se] ° JFK ASSASSINATION SYSTEM IDENTIFICATION FORM AGENCY INFORMATION ; . Released under the John Kennedy Wssassination Records AGENCY : CIA RECORD NUMBER : 104-10302-10030 RECORD SERIES : JFK . AGENCY FILE NUMBER : CIA-DI-FILES (44 Use 210% Note). Wot ww __ Fase#: Nu 55355 Date: DOCUMENT INFORMATION 4-05-2015 ~ Ollection Act of 1992 AGENCY ORIGINATOR |: CIA FROM : TO : TITLE : OCI WEEKLY REVIEW DATE : 12/27/1963 /PAGES + 28 SUBJECTS : CUBAN POLITICS DOCUMENT TYPE : PAPER CLASSIFICATION : TOP SECRET RESTRICTIONS : 1B : . CURRENT STATUS : RELEASED IN PART PUBLIC - RELEASED WITH DELETIONS ‘DATE OF LAST REVIEW : 09/01/99 . COMMENTS. : JFK-M-02 : F2 : 1999.09.01.15:50:22:873103 [R} - ITEM IS RESTRICTED 104-10302-10030 HW 55355 DBocld:32401336 Page 1 . f
ae wo ~ 27 December 1963 SC No. 00624/63 i Cony WEEKLY REVIEW . ' | OFFICE OF CURRENT INTELLIGENCE 33 ASE SRAM ERSTE SL PEO PEO EY TP GG IPD RSE ASENT EL BRM E  E ) m Z = zy > i. Z 4 m - ae G) m Z O Im > 0) m Z (-) < THIS DOCUMENT CONTAINS CODE WORD MATERIAL NO FOREIGN DISSEM TOP-SECRET GROUP | Excluded from automatic downgrading end declassification HW 55355 Docld:32401336 Page 2?
This document contains classified information affecting the national security of the United States within the meaning of the espionage laws, US Code Title 18, Sections 793, 794, and 798. The law prohibits its transmission or the revelation of its contents in any manner to an unauthorized person, as well as its use in any manner prejudicial © to the safety or interest of the United States or for the benefit of any foreign government to the detriment of the United States. ‘It is to be seen only by US personnel especially indoctrinated and authorized to receive COMMUNICATIONS INTELLIGENCE information; its security must be maintained in accordance with COMMUNICATIONS INTELLIGENCE REGULATIONS. No action is to be taken on any COMMUNICATIONS INTELLI- GENCE which may be contained herein, regardless of the advantages to be gained, unless such action is first approved by the Director of Central Intelligence. DISSEMINATION CONTROLS This document MUST NOT BE RELEASED TO FOREIGN GOVERNMENTS. If marked with specific dissemination controls in accordance with the provisions of DCID 1/7, the document must be handled within the framework of the limitation so imposed. HW 55355 Docld: 32401338 Page 3
HW 355355 4 CONTENTS (Information as of 1200 EST, 26 December 1963) THE COMMUNIST WORLD Page SOVIET TRADE ACTIVITY IN THE INDUSTRIAL WEST ‘1 Within a week after the central committee approved Khrushchev's plan for the chemical industry, Soviet traders apparently had their instructions and were renewing contacts in the industrial West. CHINESE COMMUNIST LEADERS' AFRICAN TOUR 2 While Chou En-lai and Chen Yi have been able to project an aura of Afro-ASsian amity during the first two weeks of their two-month tour, they have not scored comparable successes in the political or economic fields. EAST GERMAN REACTION TO RELAXATION OF BERLIN TRAVEL 3 The East German people, while elated over the holi- day travel arrangements in Berlin, are publicly voicing hope that they may be permitted to visit their relatives in West Berlin and West Germany. NORTH KOREA. IMPROVES AIR DEFENSE CAPABILITY 4 Pyongyang has more widely dispersed its supersonic MIG-21s, has acquired relatively sophisticated new radar, and has equipped its IL-28s with an improved blind bombing and navigational system. NORTH VIETNAM'S MILITARY ESTABLISHMENT This military force, primarily a ground army with no tactical air and little naval capability, is nevertheless the most formidable in Southeast Asia. Its most notable achievement is its highly special- ized capability to support and maintain insurgency © operations in adjacent countries. (Published sep- . arately as Special Report SC No. 00624/63B) AS IA-AFRICA ENTHUSIASM FOR SOUTH VIETNAM REGIME FLAGGING 5 ' The military regime is beginning to take steps to make its counterinsurgency effort more effective, but the generals still seem to have little idea of how torally significant popular support. LAOS 6 Communist forces have moved to erase recent gains by rightist units in central Laos. Neutralist and Pathet Lao representatives are continuing their efforts to: ease tension between the two factions. 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page i FOP-SECRET-DPISAR ‘Docld: 327401338 Page 4
ASIA-AFRICA (continued) Page FRENCH CABINET MINISTER TO VISIT CAMBODIA Armed Forces Minister Messmer's visit in early Jan- uary is designed primarily to strengthen French in- fluence in the wake of Sihanouk's call for an end to the US aid program. ARABS PLAN NO OVERT ACTION AGAINST ISRAELI PROJECT 8 Arab military chiefs apparently feel that overt mil- itary action against Israel's Jordan River diversion project is not feasible, but sabotage of its facili- ties may be attempted. CYPRUS DISPUTE FLARES AGAIN 9 The new outbreak of fighting on Cyprus is a reaction to President Makarios' determination to change the constitution so as to limit the role of the Turkish minority. BREAKUP OF THE FEDERATION OF RHODESIA AND NYASALAND The ten-year-old federation is being dissolved on 31 December because its black African population has persistently opposed it as a device to perpet- uate white rule. [ts dissolution will end London's hopes for an economically integrated, multiracial state and increase the danger of bitter clashes between white and black nationalists in its three erstwhile constituent territories. (Published sep- arately as Special Report SC No. 00624/63A) AREA NOTE 10 Saudi Arabia EUROPE THE COMMON MARKET CRISIS Agreements reached on agricultural policy on 23 De- cember are apparently sufficient to discourage De Gaulle from breaking up the community. The agreement on a position for the Kennedy Round is not necessarily favorable to the US. UK-US FRICTIONS OVER SHIPPING POLICY 12 The British Government has advised shipping circles not to comply with US demands for information relat- ing to rate discrimination against US exports. WEST GERMAN POLITICAL DEVELOPMENTS 13 Willy Brandt has again taken the center of the polit- ical stage with the success of negotiations to open the Wall. for the holiday season. He has been named acting chairman of the SPN. 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Page ii —FOPR-SEGREF DBER HW 55355 DoclId: 32401338 Page 5
EUROPE (continued) Page AREA NOTES . 14 NATO and Iceland WESTERN HEMISPHERE DOMESTIC POLITICS IN CUBA 15 Castro has cautiously continued efforts to reduce the influence of the Moscow-oriented Cuban Com- munists, who are said to have banded together to work clandestinely against him. DOMINICAN REGIME FACES NEW POLITICAL CHALLENGES 16 The killing of 15 guerrillas by army troops ap- parently removes the insurgent threat but could provoke dangerous political repercussions. The head of the provisional government has already re- Signed. BRAZIL . 17 Appointment of Ney Galvao as finance minister reduces the already slight prospect that Brazil's critical financial problems would be handled ef- fectively. Other cabinet changes may follow. AREA NOTE , 18 Bolivia : 27 Dec 63 _ CURRENT INTELLIGENCE WEEKLY REVIEW Page iii - “TOP-SECRET -DEYAR- HW 55355 Docld:32401336 Page 6
HW 355355 negotiation. The Communist World SOVIET TRADE ACTIVITY IN THE INDUSTRIAL WEST Within a week after the central committee approved Khrushchev's plan for the chem- ical industry, Soviet traders apparently had their instruc- tions and budget allocations _ and were renewing their activ- ity in trade circles of the in- dustrial West. Contracts for fertilizer installations, plastics and syn- thetic plants, petrochemical equipment, and mining machinery are already j j z of report they have under consider- ation a proposal by a West Ger- man consortium to supply the ‘USSR with $400 million worth of petrochemical equipment. A Soviet mission is negotiating with the British Imperial Chem- ical Industry (ICI), which here- tofore has supplied the USSR with technical know-how. ICI reportedly has offered to de- liver equipment and processes for the production of fertiliz- ers, herbicides, rubber chem- icals, and plastics. Negotia- tions also are under way for large numbers of Japanese chemi- cal fertilizer plants. Another Western consortiun, involving US equipment and proc- esses, is discussing delivery of a large oil refinery. In addition, contracts for a wide range of other machinery and equipment will probably soon be Signed. These contracts appar- ently had been postponed until the new chemical equipment buy- 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW ing program was presented to the plenum and allocations for various trade corporations for next year were approved. The Soviet need for addi- tional credit to finance planned expanded purchases is crucial. The USSR presumably can generate sufficient funds to meet down payments on sizable orders. However, credit arrangements must be set now to spread out the heavy crush of payments which otherwise would fall due in 1965-66 when equipment con- tracted for next year will be delivered.. Soviet ability to increase hard-currency reserves is not likely to improve in the near future. Moscow's current grain imports will reduce its gold reserves by 25 percent. If these continue beyond mid- 1964, the Soviet hard-currency position will be under further strain. Despite the bleak foreign exchange prospects for the USSR, Soviet officials appear hopeful that Western competition for Soviet orders will be adequate to foster Western governmental and banking opinion favorable to more and longer term credit. Moscow may also hope that a continuation of its relatively restrained foreign policy will be helpful in this context. While viewing the USSR as an acceptable commercial risk, the banking community has hereto- fore been unwilling to extend credits beyond a five-year pe- riod because of uncertainty about future political develop- ments. (SECRET) Page l FOP-SECREFDAAR ‘Docld: 32401338 Page 7
HW 355355 The Communist World CHINESE COMMUNIST LEADERS' AFRICAN TOUR With two weeks of their pro- jected two-month tour of Africa completed, Chou En-lai and For- eign Minister Chen Yi can claim high marks for their efforts to project an aura of Afro-Asian amity and to identify Peiping with African aspirations. There is no evidence, however, that they have scored any comparable success in the political or eco- nomic fields. The joint on 21 December communiqué issued at the conclusion of the Chinese leaders’ visit to Cairo contains few surprises, and reports from Algiers suggest that discussions with Ben Bella are following predictable lines. Thus far the Chinese have at- tempted to minimize differences, play up past contacts, and press such themes as militant struggle against colonialism and "US im- perialism," In both Algiers and Cairo, Chou's hosts sought to demon- strate their nonalignment by actions designed to play down the impact of the Chinese lead- ers'arrival. Chou was greeted in Cairo with a 2l-gun salute, but Nasir was not on hand. In Algeria, Ben Bella was on hand to greet his guests, but the top- level delegation he sent to the Soviet Union just before Chou's arrival is receiving more pub- licity than the Chinese guests. It has become increasingly ‘apparent that a major objective of the trip has been to undercut Soviet influence throughout the 27 Dec a o) -CUR. ENT INTELLIGENCE WEEKLY REVIEW continent. Criticism of the USSR was reportedly a recurrent theme in Chou's four lengthy talks with Nasir. Nasir report- edly said that Chou talked about the USSR the way the Soviets used to talk about the US. He accused the Soviets of trying to colonize China, of breaking political and economic promises, and of becoming tools of the US, and he warned that any Afro- Asian country which became de- pendent on Moscow would suffer the same fate as Peiping. In Algeria, Chou sounded a Similar note. He cited China's early support for Algerian rev- Olutionaries--support which ac- tually pre-dated that of the USSR. He has also undoubtedly scored Soviet unreliability. The Chi- nese may be pressing the Algerians to use some of the $50-million credit offered in October. This offer was made to counter a $100- million Soviet credit offered earlier the same month. Sino-Soviet rivalry for African support also flared at the UN, where Peiping outmaneu- vered Moscow on the question of enlarging the representation in principal UN organs to accommo- date the African bloc. Soviet delegate Fedorenko had attempted to make it appear that the Chi- nese were opposed to the African- sponsored expansion plan because they insisted that any change in the UN be tied to Peiping's own admission to the Security Council. The USSR found itself | holding a suddenly emptied bag, TOP SECRET DINAR ‘Docld: 32401338 Page 6
however, when Peiping loudly repudiated Fedorenko's statement and accused the Soviets of using the issue as a pretext for op- posing Afro-Asian demands. Chou can be expected to ‘capitalize on this during next week's visit to Morocco and in subsequent stops in Guinea, Ghana, and Mali. No details of Chou's itinerary beyond Rabat have been made public by Peiping. } EAST GERMAN REACTION TO RELAXATION Reaction of East Germans to the agreement to let West Berliners visit relatives in East Berlin is hopeful but still fairly cautious, judging by re- ports from local party officials. The party central head- quarters, obviously concerned that the agreement might have domestic repercussions, ordered district officials to submit immediate reports and detailed follow-ups on reactions to this partial relaxation of travel curbs imposed in connection with the building of the Berlin Wall. Most of the responses state that the people are elated but are publicly voicing hope that they may be permitted to visit their relatives in West Berlin and West Germany. Many East Germans express hope that the present move will be followed by other relaxations--a reaction probably quite unpalatable to the regime. Public comment--at least. as reported by the various 27 Dec 63 -| to West Berlin. ‘CURRENT INTELLIGENCE WEEKLY REVIEW The Communist World Such secrecy may well be prompted by ‘security considerations. Chi- nese officials were apparently seriously shaken by the abortive plot to kill Liu Shao-chi in Cambodia last spring. The Chi- nese envoy in Cairo reportedly told Nasir of concern for Chou's safety and asked that travel plans during the Chinese leader's visit to the UAR not be made public. (SECRET NO FOREIGN DIS- SEM) OF BERLIN TRAVEL party headquarters--is still fairly cautious: One party . member in Magdeburg said: "The reason we don't let our citizens go to West Germany is that we are afraid they will defect." But he was promptly silenced by comrades who parroted the party line on "the terror against our GDR citizens in West Germany." Public expression of dis- satisfaction with harsh travel and internal controls has been ‘recurrent in recent months, reaching a peak prior to the 20 October parliamentary elec- tions. The people's reaction to “the pass agreement with West Berlin points up one of the re- gime's major problems: how to project an image of itself as a sovereign state and of East Ber- lin as its capital without in- creasing discontent among its population, who still risk shoot- ing if they attempt to escape (SECRET KIMBO) Page 3 —FOP-SECRETF PRAR HW 355355 DocId: 32401338 Page 93
| SAM site 4 - ot _ 8 .  <fBomber elements , + Fighter defense elements “e Radar station A East coast filter center Early warning-tadar coverage _ - | TOP SECRET DINAR , "27 DECEMBER 1963 - . MILES 100 "aut tpaRt ee Sn) 34447 Se eee HW 55355 DBocld:32401336 Page 10
JERK Act 6 (1) (B) HW 55355 Docld:32401338 in June 1963, The Communist World NORTH KOREA IMPROVES AIR DEFENSE CAPABILITY North Korea has recently taken several steps which signif- icantly strengthen its air de- fenses. MIG-21 (Fishbed) jet fighters, which were first de- tected only at Pukchang-ni air- field, now are being stationed at other airfields. Pyongyang has also apparently just acquired a large number of relatively sophisticated types of radar sets. In addition, the North Korean bomber force, which has a total of about 100 IL-28 (Beagle) jet light bombers, is in part now equipped with, and has been training with, an im- proved blind bombing and naviga- tional system. Testing of and flight train- ing with the new fighters--10 to 14 of which were apparently obtained from the USSR in the 1962--were first noted Since that time the MIG-21s have been detected frequently in flight activity involving ground controlled in- tercept exercises. Beginning in October, MIG- 21s have been noted operating from Wonsan on the east coast of North Korea, Their deploy— ment to this airfield places supersonic fighters on both the east and west coasts of North Korea, The North Koreans have re- cently expanded their radar 27 Dec 63 _ coverage. CURRENT INTELLIGENCE WEEKLY REVIEW Six new types of radar, at least one of which is believed to be exclusively of Chinese Communist manufacture, have been detected. For the present these radars will ap- parently supplement rather than replace North Korea's original three types--Kniferest A, SCR- 270, and Token. The identifiable new types include Kniferest B, Spoonrest A, and a new type of Chinese Com- munist origin which is probably a substantial modification of the SCR-270. Spoonrest A is sometimes used as the acquisi- tion radar for surface-to-air missile sites, but it is also used in an early warning role and is probably intended for that use in North Korea. Acquisition of these new radars reflects North Korea's efforts to extend the range of its early warning detection system. To improve height-finding capability, Pyong- yang has also introduced more sophisticated radars such as Rockcake and Stonecake. Another improvement in North Korea's air capability is the equipment of about twenty IL-28s with an improved blind bombing and navigational radar system des- ignated Shorewalk. When properly used, this system permits preci- sion navigation and blind bombing without the use of ground communi- cations which would betray the di- rection of the flight and the tar- get designation. (TOP SECRET DINAR) Page 4 TOP SECRET Dinar Page i1
HW 355355 “Southeast Asia ENTHUSIASM FOR SOUTH VIETNAM REGIME FLAGGING Communist guerrilla activ- ity increased only slightly. in connection with the third anni- versary, on 20 December, of the Viet Cong's Liberation Front, despite. advance Communist propa- ganda exhortation for a major military effort. The Viet Cong continued to direct attacks and harassing activities primarily at strategic hamlets. South Vietnam's new govern- ment is Showing extreme sensi- tivity to discussion of a "neu- tralist solution" to its in- surgency problem. The Communists' Liberation Front has repeatedly proposed such a settlement, and the idea is gaining new advocates as a result of Cambodia's call for an international conference. Saigon's military rulers last. week closed down a newspaper which was expressing interest in neutralism. However, editorials in the vernacular. press, even though attacking neutralism, have kept the debate in the public eye. On 20 December, Saigon students-- possibly encouraged by the re- gime--demonstrated against neu- tralism. ° ' On the military front, the government is beginning to take some steps to overcome the leth- argy that has affected its coun- terinsurgency effort since the coup. A long-range pacification program has been launched in one of the most troublesome provinces in the northern part of the coun- try, and broad command changes have been introduced in two prov- inces south of Saigon where security has been deteriorating. In the political field, the government has named 60 27 Dec 63 members of the civilian advisory Council of Notables. Returned exiles apparently are not rep- resented, and there is a dearth of direct provincial represen- tation. Many appointees, how- ever, are. prominent political, professional and lay religious leaders who could provide effec- tive guidance to the regime if they are given a chance, Apathy and disenchantment over the new government are wide- spread among such key elements as middle-grade officers, stu- dents and politicians. Criti- cism centers on the lack of firm direction by the ruling gen- erals, on repeated reshuffling of local officials deemed in- competent, corrupt or close to the Diem regime, and on the rise in Viet Cong activity. There are signs that junta members themselves are beginning to share the disillusionment of some cir- ‘cles with Premier Tho's provi- Sional cabinet, which is described as ineffective and regional in outlook. Leading generals nevertheless seem to have few effective steps in mind to rally.popular support. Three generals recently complained to US officials that they were hav- ing trouble finding qualified Vietnamese to fill government posi- tions and that press criticism of their efforts was unhelpful. General "Big" Minh, the chief of state, has indicated a personal distaste for a prominent role, and has asserted that the people would gradually come to appreciate the new government as problems were solved on a province-by province-basis. (SECRET NO FOR- EIGN DISSEM/BACKGROUND USE ONLY) CURRENT INTELLIGENCE WEEKLY REVIEW Page 5 TOP SECRET DINAR DoclId: 327401338 Page 12
LAOS Communist forces have moved to erase recent gains made by rightist units in cen- tral Laos. Pathet Lao troops, reportedly supported by sub- stantial numbers of North Viet- namese, on 19 December captured Kam Keut and the nearby airfield, three days after occupying the key route junction at Lak Sao. Right-wing messages have de- scribed a key rightist parabattal- ion as "completely smashed." Communist units have advanced south of Lak Sao toward neutral- ist positions along Route 8-A, , but there have been no indica- tions that they intend to press their advantage by a major drive on Nhommarath, which is still held by rightist forces. In other areas, there have been reports of only limited activ- ity, involving scattered skir- mishes and artillery exchanges. Meanwhile, neutralist and Pathet Lao representatives are continuing their efforts to negotiate an easing of tensions between the two factions. At 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Asia-Africa a meeting on 20 December in the Plaine des Jarres, both sides called for an "early" meeting between Premier Souvanna and Prince Souphannouvong. They .also agreed, in principle, that elements of the coalition govern- ment should be transferred from Vientiane to the royal capital at Luang Prabang, which would be neutralized and placed under tri- partite control. Both factions reiterated their support. for the formation of a mixed police force in a neutralized Vientiane. General Phoumi's right~- wing faction, which was not represented at the meeting, remains skeptical of Pathet Lao intentions. Phoumi apparently believes that an agreement for the neutralization of Luang Prabang is unlikely, but he may join in talks on the subject. He has indicated, however,that the neutralization of Vientiane is contingent on the willingness of the Pathet Lao to allow free movement in areas of Laos now under their control. (TOP SE- CRET DINAR) * Page 6 —FOP-SECREF PRBER HW 55355 DBocld:32401336 -Page 14
HW 355355 Asia~Africa FRENCH CABINET MINISTER TO VISIT CAMBODIA Armed Forces Minister Pierre Messmer's visit to Cam- bodia from 4-7 January is de- Signed primarily to strengthen French influence there in the wake of Prince Sihanouk's call ‘for an end to the US aid pro- gram. Messmer's high-level entourage, which includes the chiefs of the Foreign Ministry's Indochina and Cultural and Tech- nical divisions, will probably ' recommend some increases in aid, but De Gaulle apparently has no intention of taking on any large new commitments. French-grant aid to Cam- bodia since 1956 has amounted to only $15 million. Current assistance is threefold: a military training mission of at least 250 men; cultural aid in the form of a university mission and 319 teachers in Cambodian schools; and the maintenance of about 40 experts in the fields of health and public works. In addition, a number of French nationals hired by the Cambodian Government hold positions of considerable influence in the Ministry of Finance, the Treas- ury, and the premier's office, and are among Prince Sihanouk's advisers. Paris has indicated it has no intention of equaling the US aid program. Any increase | 27 Dec 63 in military aid probably would be limited to reconditioned and obsolete equipment, such as trucks and light armored vehicles. Increased cultural and technical assistance probably would include further help for the French uni- versity mission, more teachers, ' and 30 or 40 additional technical experts, especially agricultural- “ists. The extension of. French aid will be complicated by Cambodia's claims for compensation for losses incurred as a result of the 1958 devaluation of the French franc. Since 1958 France has asserted that a large-scale aid program would be impossi- ble until there is agreement on an exchange rate, but a compro- mise may now be in sight. Sihanouk has sought French help in maintaining Cambodia's policy of neutrality, and in recent talks with the US andthe UK, France has supported his _ call for an international con- ference on Cambodian neutral- ity, despite US objections. Indeed, De Gaulle has consist- ently sought to meet Sihanouk more than half way, and Paris may now encourage Sihanouk to press this issue. (CON- FIDENTIAL) * CURRENT INTELLIGENCE WEEKLY REVIEW Page 7 FOR-SECREF PINAR ‘Docld: 32401338 Page 15 -
ISRAEL'S JORDAN RIVER DIVERSION PROJECT ees Canal of conduit, proposed or under construction WS Denilitarized Zone LEE, LEBANON SSS SSS SSSA ON SS. S SS NY x X N NY Phen sisal x Pumping Station (Under Construction) tunnel, Resenols 7" ; Tunnel , ’ twee ASRAEL ee, Mediterranean | { Sea, /. NEGEV DESERT CODE WORD MATERIAL ON REVERSE OF PAGE HW 55355 DBocld:32401336 Page 16
AW 55355 “TOP SECRET DINAR- Asia~Africa ARABS PLAN NO OVERT ACTION AGAINST ISRAELI PROJECT The Arab states evidently do not plan any overt military action against Israel when in late January or early February the Israelis begin pumping tests for their Jordan River diversion project, but sabotage of the project's facilities may be at- tempted. The Arab military chiefs who met in Cairo in mid-December apparently decided that direct military attacks are not feasi- ble. The chiefs reportedly agreed, however, that the states bordering on Israel should mount independent and uncoor- . dinated clandestine operations. The Arab League Defense Council, which meets in January, probably will approve this rec- ommendation, but its implementa- tion is another matter. Egyp- tian, Jordanian, and Lebanese officials have indicated pri- vately that their governments have no intention of taking aggressive action of any kind against the Israeli project. Nasir, however, told the Canadian ambassador in early December that he was worried that Syria might act unilater- ally and present the other Arab 27 Dec 63 states with a dilemma. Damascus will be under strong pressure to fulfill its threats against the Israeli scheme, particularly in view of the close proximity of the Syrian border to Israel's pumping station on Lake Tiberias. Nasir's wariness about be- coming involved in a war with Israel over Jordan waters was also evident in a speech he made on 23 December. He empha- sized that the problem is polit~ ical rather than military in nature and that the chiefs of staff cannot solve it. He called for a summit meeting of Arab presidents and kings to seek a solution. considers there is an outside possibility that Syria might bomb or shell the pumping facility's transformer station. However, the Israelis | believe the primary threat stems from former Palestinians now living in Syria, Jordan or Lebanon, who might make a dra- matic effort to sabotage the project even though they prob- ably could not cause serious damage. (SECRET NO FOREIGN DISSEM/BACKGROUND USE ONLY) CURRENT INTELLIGENCE WEEKLY REVIEW Page 8 FOR-SEGCREF PRAR ‘Docld:32401338 Page 17
HW 355355 CYPRUS DISPUTE FLARES AGAIN Fighting between the Greek and Turkish Cypriot communities, which began on 21 December and was continuing on 26 December despite efforts to obtain a cease- fire, is the culmination of a steady growth of tension on the island during the past few weeks. The new tension followed Presi- dent Makarios' presentation to Turkish Cypriot leaders of propos- als for changing the Cyprus con- stitution. The proposals, which essentially involved removing the guarantees to the Turkish minor- ity that had been written into the Cyprus settlement of 1959, were rejected by the Turkish Gov- ernment even before the Turkish Cypriots had made their views known. Most of the initial fight- ing appears to have been between: Greek Cypriot police and the Turk- ish underground, and to have taken place in the Turkish areas of Nic- osia.. The situation there de- teriorated progressively during the week, as the police lost con- trol to extremist groups of ir- regulars from both communities. A cease-fire, to be supervised by the British, had not been ef- fective as of the morning of 26 December. Fighting had also con- tinued at the port city of Lar- naca; the rest of the island was quiet but tense. 27 Cee 63 Asia-Africa In the face of these de- velopments, the Turkish Govern- ment threatened to exercise its. right under the 1959 agreement to intervene on Cyprus. Three Turkish jet fighters flew over Nicosia on 25 December, and Turkish naval units appeared off the island. Part of. the 650-man Turkish garrison on Cyprus left its barracks to move into one of the Turkish quarters of the capital. Part of the 950-man Greek contingent then moved to protect Greek areas. The situa- tion evidently prodded Athens and London into a more active role, and Greek, Turkish and British forces on Cyprus have been placed under a unified Brit- ish-led command. Britain has an- nounced it is sending 150 ad- ditional troops. The violence may make lead- ers of both sides more cautious in pressing political demands. Soon after the outbreak, Makarios told the US ambassador he would go more slowly in pushing his con- stitutional revisions. Both eth- nic groups, however, will be fur- ther embittered--particularly the Turkish community, which is believed to have suffered much the heavier casualties. (CONFIDENTIAL) CURRENT INTELLIGENCE WEEKLY REVIEW Page 9 —FCP- SECRET PINAR DoclId: 327401338 Page 138
AREA NOTE Saudi Arabia: Crown Prince Faysal appears to have weathered his latest dispute with King Saud without making any conces- Sions. The details of a new arrangement between the two are not known, but Faysal is still firmly in control of the govern- ment. Royal Guard elements which the King ordered to posi- ‘tions around his palace at the height of the dispute. have now been withdrawn. The dispute centered on Saud's attempt to resume per- sonal control of the government, which he relinquished to Faysal a year ago when his health broke. The immediate issues_ 27 Dec 63 CURRENT INTELLIGENCE Asia-Africa were variously reported to have been the new budget, which cuts funds allotted to the royal family, and Faysal's refusal to give cabinet posts to two of Saud's sons. In blocking Saud's chal- lenge, Faysal apparently was supported by most of the im- portant members of the royal family. Throughout the crisis the Saudi regular army remained under the orders of the minis- ter of defense, Prince Sultan, a Faysal adherent. Some ob- servers have reported that the King's action has actually served to strengthen Faysal's position. (CONFIDENTIAL NO FOREIGN DISSEM) WEEKLY REVIEW Page 10 FOPR-SECREF DIAAR ‘Docld:32401338 Page 19.
cl Perea originates in:the fact that there are substantial: differences . tariffs on: ‘individual items, even though over~all tariff: levels are: the EEC. common external, tariff was arrived at by. averaging the tariffs. of: the, ‘member states, an vin the US schedule,” : parison with those” ‘of the EEC. me ea } ng? ‘insisted that a 50-percent cut i in tariffs by both, the US and.the: “EEC would. leave ‘the Us \ the EEC. rgaini Swer_ to‘eff CODE WORD MATERIAL ON REVERSE OF PAGE HW 55355 DBocld:32401336 Page 20
DoclId: 32401336 THE COMMON MARKET CRISIS The Common Market appears to have averted disaster for the sec- ond time in less than a year. The eleventh—hour agreements reached on agricultural policy on 23 De- cember are apparently sufficient to discourage De Gaulle from carry- ing out his threat to break up the community. Moreover, the Germans and Dutch succeeded in extracting limited commitments from Paris on EEC participation in the Kennedy -Round of tariff negotiations. These agreements donot cover all the out- standing issues, however, and the manner in which they were reached will leave a residue of bitterness. Nor is it certain that major US interests have fared well. The main agricultural elements in the "package" deal are the reg- ulations concerning intracommunity trade in beef, rice, and dairy prod- ucts and the rules governing the community farm fund. Their effect is to open the large West German market to farm exports of France, Italy, and the Netherlands--gen- erally at a substantial advantage over the exports of nonmembers. Al- though approval of these and the financial regulations is an im- portant step forward, the key ques- tion of grain price unification is still unsettled. Further considera- tion of the formula proposed by Com-— missioner Mansholt has been delayed until next year, The agreement on a Kennedy Round position is likewise an ad~ vance for the community, but from the US view not necessarily favor- able. On the long-standing problem .of tariff “disparities ,'' the EEC adopted a formula which would exempt from the proposed 50-per- cent linear reduction in tariffs a far larger-number of items than the US hoped for, The EEC position 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Europe on farm products in the trade. ne- gotiations--although an improvement over the initial Mansholt propos- als--also leaves much to be desired from the US view. In general, the EEC proposes that, if its levy sys- tem operates in such a way as to cause difficulties for the exports of nonmembers, then the EEC Commis- Sion will be called on to propose "appropriate," but unspecified, measures. These would not apply if it is technically impossible to determine how much protection is actually involved in the levy sys- tem. The general relief within the community which greeted these agreements reflects both the depth of the crisis and some op- timism that the Common Market's unity may have been restored. The prominent role played by the EEC's commission in achieving the compromise has in particu- lar encouraged those who hope to strengthen the community's in- stitutional structure. In France the conviction was evidently widespread, how- ever, that both Bonn and The Hague were quite prepared to see the French "leave" the Common Mar- ket, and in the event of its breakup, to seek alternative -ties with the Outer Seven. More- over, while it may prove healthy that Bonn "stood up" to De Gaulle in this instance, its motive was strongly colored by a desire to pro- tect its inefficient farmers. Nor does it augur well for US~EEC re- lations that the French blame the US for much of the opposition they encountered. (SECRET NO FOREIGN DISSEM) Page ll —FOP-SECRET DINAR Page ?1
Europe UK-US FRICTIONS OVER SHIPPING POLICY British shipping and offi- cial circles are incensed over recent US demands for informa- tion relating to rate discrim- ination against US exports. The British Government has ad- vised against compliance on the grounds that this informa- tion is commercially confiden- tial, and that the US- cannot demand what the UK Government cannot obtain. Following a recent con- gressional investigation into alleged rate discrimination against American exports, the US Maritime Commission asked the North Atlantic Freight Con- ference to explain the differ- entials on a long list of items, setting a 20 January deadline for compliance under penalty of heavy fines. The US posi- tion is that US exporters are being penalized because outward rates are higher on the average than the inward rates. British and other shipping lines regard the differentials as economically justified. The tonnage of US exports is much greater than import tonnage, and shipping lines--anxious to avoid half-loaded or in-ballast westbound voyages--have tradi- tionally charged lower rates for items imported into the US than for exports from this country. 27 Dec 63 ‘support. Thus, what are seen as American efforts to regulate international shipping lines in order to improve the unfavorable US balance of payments have caused increasing rancor in Britain. Before Parliament ad- journed for its Christmas recess on 20 December, some Conserva- tive MPS called for retaliatory restrictions on US ships arriv- ing at UK ports. Although the MPs did not specify what re- strictions they had in mind, the government cannot afford in the present pre-election ‘period to leave itself open to charges that it is not atten- tive enough to domestic interests. The Douglas-Home government, while hopeful of some compromise before the 20 January deadline, is busily lining up international At the recently con- cluded conference of transport ministers of 10 European mari- time nations, Britain proposed that Japan be invited to join the united front of European maritime countries in a general protest against US shipping policies, thereby aligning roughly three quarters of the world's shipping business against the US position. Japan agreed to do so, and the collective protest was filed with the State Department on 23 Decem- ber. (CONFIDENTIAL NO FOR- EIGN DISSEM) CURRENT INTELLIGENCE WEEKLY REVIEW Page 12 FOP-SECREF PEAR DoclId: 327401338 Page 22?
HW 355355 ‘Docld: 32401338 WEST GERMAN POLITICAL DEVELOPMENTS The opening of the Berlin Wall during the holiday season and the death of Social Demo- cratic Party (SPD) chairman Erich Ollenhauer have placed ‘Willy Brandt once again in the center of the German political stage. The agreement to open the Wall resulted from Brandt's un- ceasing efforts to ease condi- tions for Berliners. His will- ingness to reach agreement with the East Zone authorities on the pass issue is being criticized by some Christian Democratic Union (CDU) leaders and by the CDU-oriented press in West Ger- many. Brandt, however, is bank- ing on the expectation that most West Germans, like the Berliners, will approve his action. He has even hinted that there may be further negotiations with the Hast Germans to extend the period of the passes beyond the 5 Jan- uary cutoff date. There is also speculation that both East and West Germany will find the pass agreement a model for agreement on other issues. Brandt, who was the most logical choice, was named acting chairman of the SPD immediately after Ollenhauer's death on 14 December. Deputy Chairman Her- bert Wehner has proposed that 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Europe Brandt's position be formalized at a special party convention next month. Fritz Erler, the party's foreign and defense expert, is slated to take Brandt's place in the hierarchy as second deputy chairman. As the SPD leader, Brandt would stand to be candidate for chan- cellor in the 1965 general elec- tions. If current opinion polls are any indication, the SPD will give the CDU a strong race in that contest. Brandt, however, has not yet committed himself, since to accept the SPD chairmanship might require him to resign as mayor of Berlin and move to Bonn. In so doing he would have to operate at a distance from his political bastion. Whatever Brandt decides, the SPD is bound to miss the conciliating influence of Ollen- hauer, who was able to hold together the often highly antagonistic factions of the party. Brandt, with his ideas of greater flexibility in foreign policy, may be expected to clash more frequently with Wehner, who--despite his Com- munist past--has come to rep- resent the SPD's right wing. (SECRET NO FOREIGN DISSEM) “ Page 13 FOR-SECREFPRAR Page 23
Hw 55355 Docld:32401338 AREA NOTES NATO: The NATO ministe- rial meeting in Paris, which ended on 17 December, avoided serious discussion of the more contentious issues facing the alliance. There was, for in- stance, only passing reference to the matter of nuclear shar- ing. While NATO's military posture was generally recognized as still inadequate, the Force Planning exercise--which is designed to help correct this situation--was not discussed at all. The dispute over basic strategy, the chief stumbling block to the exercise, was put off until after De Gaulle's press conference.sometime in January. All but the French agreed that the alliance should explore possibilities of negotiating with the Soviets on outstanding East-West issues. The Germans, as usual, indicated some reser- vations because of their sensi- tivity regarding Berlin and Ger- man reunification. The question of restricting Western credits to the Soviet bloc was reserved for future consideration. (SE- CRET NO FOREIGN DISSEM) 27 Dec 63 CURRENT ™NTELLIGENCE WEEKLY REVIEW Europe Iceland's near general » strike was settled on 21 Decem- ber when labor and management agreed to a 25-percent wage in- crease. The ll-day work stop- page was led by Communist-dom- inated unions seeking, as in the past, to force the resigna- tion of the Conservative - So- cial Democratic government by discrediting its economic poli- cies. The settlement is regarded as a political victory for Prime Minister Benediktsson's govern- ment, since the Communists were unable to maintain a solid grip on labor. The settlement, however, will intensify inflationary pressures and will probably force Benediktsson to take ex- traordinary measures to maintain economic stability. For polit- ical reasons he will try to avoid another currency devaluation, but it is doubtful that the government can maintain its economic stabilization program without resorting to this meas- ure. (CONFIDENTIAL) Page 14 —LOP-SECREF PINAR Page 24
‘Docld: 32401336 DOMESTIC POLITICS IN CUBA Fidel Castro is continuing his effort to reduce the influence of the veteran Communists who were lead- ers of the Moscow-oriented, pre-rev- olutionary Communist party of Cuba. Castro's campaign against then, launched in a bitter attack in March 1962, subsequently seemed to lose steam. Recent reports from knowl- edgeable clandestine sources, how- ever, indicate that the old liners are again on the defensive and are likely to suffer further in govern- ment shake-ups which may be in the offing. Castro nevertheless con- tinues to move slowly in order to avoid undue disruption within his regime, The only major veteran Commu- nist figure to remain in Castro's . good graces is Carlos Rafael Rod- riguez, the head of the National Agrarian Reform Institute. Rod- riguez' position has actually been strengthened in recent weeks with the raising of his job to cabinet level. He has evidently convinced Castro of his personal loyalty and of his ability as an administrator. It is also possible that Rodriguez performs a useful and trusted liai- son role between Castro and Soviet leaders. He returned to Havana on 22 December after a two-week trip to the USSR and several Soviet satel- lites where, according to press ac- counts, he. was in contact with high- ranking Communist Party officials. - The old-line Cuban Communists remain strong, according to a re- cent clandestine report, in the in- termediate and lower echelons of the military and party hierarchies. Wherever possible, they continue 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Western Hemisphere their "sectarian" efforts to secure positions for their comrades at the expense of Fidelistas. A clandes- ' tine source reported hearing "ru- mors" in high regime circles late last month that veteran Communists have banded together in clandestine cells to work against Castro. Che Guevara continues to be the Cuban leader most openly critical of the Soviet Union and the most insist-— ent on the "necessity" of accelerat- ing the revolution in Latin America. Fidel Castro is said to agree with Guevara's position, but awareness of Cuba's own self-interest still com- pels him to be more cautious in pur- suing policies that could be inter- preted as anti-Soviet. It neverthe- less remains a key regime policy to. encourage Communist revolution in Latin America. A clandestine source who is a high~level Cuban diplomat asserts that Cuban leaders privately recog- nize that popular discontent with the regime is widespread. He claims, however, that they are confident their unpopularity has reached its nadir, and that they are beginning to make up lost ground. They ex- pect, for instance, that economic difficulties--a major source of discontent--will be largely over- come within three years, The strat-— egy of the government, this source re- ports, is to hold on untii the econ- omy improves and until Cuban subver- Sive efforts elsewhere in Latin America result in the establishment of one or more Communist allies in the hemisphere. Then, the regime feels, it will be secure. (SECRET NO FOREIGN DISSEM/BACKGROUND USE ONLY) Page 15 FOP -SECREF PRAR— Page 25
DoclId: 32401336 Western Hemisphere DOMINICAN REGIME FACES NEW POLITICAL CHALLENGES The killing of 15 guerrillas by Dominican Army troops on 21 ‘December apparently removes the last pocket of insurgents op- posing the government. However, the incident could provoke dan- gerous political repercussions. Emilio De Los Santos, head of the governing military-in- stalled triumvirate, resigned in protest over what he regarded as the brutal and unnecessary kill- ing of the insurgents, includ- ing the president of the pro- Castro 14th of June Political Group. The army commander of the area in which the incident took place insists the deaths were the unavoidable result of a fire fight. If stories of armed forces "brutality" be- come widespread, however, they could provoke dangerous hostility toward the regime from rank-and- file Dominicans, who recall the repressive measures of former dictator Trujillo. The resignation of De Los Santos precipitated frantic ma- neuvering within the government 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW among civilian and military elements. Only the prompt ap- pointment of Foreign Minister Donald Reid to the vacant post in the triumvirate appears to have helped avert a serious political crisis for the moment. The triumvirate has asked the cabinet--which was chosen from and is responsible to six minority political parties--to resign to permit the appoint- ment of a more independent group. This move has promnted strong protests from four of the splinter parties backing the regime, who stand to lose patronage; the outcome is unclear. However, the National Civic Union, the only sizable party in the government, backs the cabinet reorganization. More important, the key leaders of the armed forces are provid- ing the triumvirate with their support, which could prove cru- cial in a political showdown. (SECRET NO FOREIGN DISSEM) Page 16 —-FOP-SECREF PRAR Page 276
BRAZIL Further changes in the Bra- zZilian cabinet are expected fol- lowing the resignation last week of Finance Minister Carvalho Pinto. A moderate leftist, Ney Galvao, was appointed Pinto's successor, but there remains a ‘possibility that Leonel Brizola-- who had been actively pushed for the post by the extreme left-- may eventually receive some min- istry. There is widespread be- lief in the army that War Min- ister Jair Ribeiro will also be replaced in the near future. As one responsible Brazilian com- mentator has remarked, with Gou- lart "every minister is an in- terim one." Ney Galvao's appointment actually reduces the previously slight prospect that Brazil's critical financial problems would be handled effectively. Galvao's qualifications in the economic field are weak at best and his rec~ ord as head of the Bank of Brazil aoes not command confidence with- in the business community. Be- fore taking his new post, he served as minister without port- folio in charge of coordinating foreign trade policies, a job he performed without any par- ticular distinction. Although his views are perhaps somewhat to the right of 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Western Hemisphere Goulart's, Galvao can be expected to toe the adminstration line faithfully. Moreover, Galvao's appointment may be a temporary expedient designed to allay fears that Brizola would succeed Pinto. Galvao is a versonal friend of Brizola and there is speculation that Brizola will, in fact, eventually move into the Finance Ministry. The new finance minister inherits almost insurmountable economic and financial problems. Chief among these are a rampant inflation that may see the cost. of living increase 80 percent this year, and a staggering foreign debt involving approxi- mately $1 billion in payments due over the next two years. The severity of the eco- nomic situation and Goulart's apparent intention to assume greater personal direction over financial policies increase the possibility of radical meas- ures that might be detrimental to foreign creditors and in- vestors. Goulart reportedly is considering nationalization of all public utilities and can- cellation of mining concessions. Measures such as these could lead to further deterioration of Brazil's economic position. (SECRET) a Page 17 FOP-SECREF PINAR HW 655355 DBocld:32401336 Page 27
AREA NOTE Bolivia: The political competition between Bolivian Vice President Juan Lechin and President Victor Paz Estenssoro is bound tointensify sharply as each maneuvers to line up support for the presidential nomination at next month's con- vention of the Nationalist Revolutionary Movement (MNR). Lechin probably still hopes to pull an upset by dislodging Paz or at least to demonstrate suf- ficient strength to assure him- -self of retaining his vice- presidential post. Paz seems certain, however, to be able to control the party's convention, 27 Dec 63 CURRENT INTELLIGENCE WEEKLY REVIEW Western Hemisphere assure his renomination, and designate his own running mate. If the forthcoming conven- tion repudiates Lechin, he may well withdraw from the MNR and establish a "popular front" po- litical party. He probably could count on the support of political groups ranging from leftist extremists to disgruntled factions within right-wing parties. It would seem unlikely, though, that these disparate groups could coalesce into an organization powerful enough to defeat Paz' well-organized machine in the elections set for June. (SECRET) Page 18 —FOP-SECRET-PINAR DoclId: 327401338 Page 273