NATIONAL INTELLIGENCE DAILY MONDAY 13 MAY 1991

Created: 5/13/1991

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Situatlon Report

Sporadic dosha between Iraqi troops and Kurdish rebel forces in northern Iraq continue as gorernment and Kurdish representatives In It ash dad negotiate over Kurdiih autonomy.

Skirmishes In Northern Iraq

Comment: Intermittent clashes almost certainly will continue astry to press Baghdad for concessions in thc talks and thcto consolidate its

Iraqi Miliiary Concerns About

Talks Edge Toward Agreement

claims it is nearingan agreement on autonomy with Kurdith opposition repicsentatives in Baghdad, but Kurdish leaders remain cautious. The government-controlled press said on Saturdaycommon accord" will be announcedew days. Ma'sud Barzani. leader ofthe Kurdish Democratic Party and head of the current Kurdish negotiating team, said on Saturday the talks had hit some snags, but heore upbeat public statement yesterday.

Comment! Opposition leaders probably feel pressed to reach an agreement soon because of concern that Baghdad's agreement this weekend to allow an expanded UN relief effort in Kurdistan and the increasing flow of refugees back into the area are reducing their bargaining leverage. Baghdad's opposition to Kurdish control of Iraq's oil-rich Karkuk region and Iraqi unwillingness to agree to international guarantees almost certainly remain key stumblingblocks. tM M

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Soviet Defense Minister's Visit

Defense Minister Yaaovs just-ended visit to Chinaeneral Secretary Jiang Zemin. Premier Li Peng,Yang Shangkun. as welleeting with his

Comment.isit gave senior Chinesehonce toTlCiviews on world events and developments in the USSR before Jiang goes ihere this week. The discussions probably will lead to increased contacts between regional military commands and perhaps between some units near the Sino-Sov.et border, to invitations for observersttend military exercises and to exchanges between service academies. Yazov and lhc Chinese probably also put the finishing touches on plansale to China ofighter aircraft and discussed ways to speed negotiations on trooplonsu> Snviri border and rd.itrd confidence-building measures,

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LEBANON: Hl/ballnh. Hardliners Gaining Ground

of Hizballah. Tufayli hid been vulnerable IO attack by hardliners because of earlier discussions with the government and almost certainly believed publicly attacking it would help him in the Leadership Council election. Any institutional gains by hardliners are unlikely to affect the fate of Western hostages: the Council has little influence over Hizballah members who hold thcm.l

ROMANIA: Old Guard Counterattacks

of the ruling National Salvation Front are rallying around President Iliescu in what appears to be an old-guard counterattack against Prime Minister Roman's reform

ultranationalisi

newspaper owned by art Iliescu supporter has intensified iu attacksRoman for alleged involvement in corruption and has indirectly criticized his Jewish heritage by attacking Jewija represcnuitoa in the government and media.

Comment: Roman had appeared to gain strength at theany congress in March, and there was speculationtry to replace Iliescu as president Iliescu may hope to usesupport group to capitalize on opposition to theand save his position. The old guard may see him asbearer in the nghl against real reform. Roman'sability to press ahead with reform will depend on publicreaction to the soaring unemployment that hii program iibnrii |

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In Brief

Yel'isin lo visit Czechoslovak I*ees ils democracy as model for Russia, wants direct economic, polilicaleeting with President Havel will enhance Yel'tsin's credentials as Soviet statesman before June's presidential electiuii.'Baaj|

Soviet Ukrainian opposition deputies walked out of republic Supreme Sovietay they will not return until jailed Ukrainian activist Sicpan Khmari is. increases tensions before Khmara's tnal tomorrow ffJfJBJt

offering commercial0 million in overdue interest plusercent of interest comingould affect debt talks onanks resisting precedeni of Parisperccni writ CO IT nut considering reduction options,

Italian firm selling USSR agricultural products0 million using EC subsidies, Italian Governmentollows privatelyillion sale tompact on food shortages limned by transportation, distribution

-Vietnamese Communis Party chief,USSRadditionalconomy hurt by cutsinSoviec supplies. Western economicoscow unlikely to give enougho ease difficulties.

Soviet Views of the' EC

Earlier Soviet expectationsrong relationship with the EC would strengthen Gorbachev's regime appear to have declined in recent months. Soviet-EC trade has increased more slowly than expected and will continue to be restrained by the USSR's economic problems, even though Moscow is still trying to convince the EC that its economic reform is on track and would welcome EC suppon for Soviet participation in. Moscow's expectations probably also have been dampened by its concerns that the Community and some member states are beginning to hedge agaiost the possibility the USSR may break up. In turn. Soviet wiUingness to respond to EC concerns io order to maintain dialogue probably also has declined. The Soviets may believe compromise is unnecessary, since the EC has reinstated aid suspended after the crackdown in the Baltic republics without concessions from Moscow on the use of force io domestic crises. The choice of Levas an "oldthe USSR's new Ambassador to the Coisimunity suggests traditionalists want to watch the relationship closely.

Despite Gorbachev's recent efforts to reach an accommodation with the majority of Soviet republics, domestic developments io tbe USSR probably will remain an irritant in Soviet-EC relations. Thc Community will try to avoid controversy, but discord with the EC or individual states is possible as long as Gorbachev's program does not explicitly permit republics to secede. Nonetheless, to the extent that Gorbachev can bold down domestic violence, be can help insulate Sovict-EC relations from further strain.

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Special Analysis

to Gorbachev, For Now

ECs rtlailomi with Moscow hare bounced back from ihc chill caused by lhe Sorlet crackdown in the Baltic republics las' January.

Despite concerns that Gorbachev has strayed from the path of reform,members sea no viable alternative to him and probably trill support mores for him to attendummit in txtndon in July. flBk

Most EC member states believe Gorbachev it the only leader capable of preventing political and economic chaos in the USSRomplete takeover by the hardliners. They fear such developments mightlood of refugees into Western Europe and aggravate ethnic conflicts in East European "

leaders probably will also support havingnvite Gorbachev to the London summit. The Soviets are eager for such an opportunity to plead their case for massive Western economic avorable Westesponse tolea is not likely unless the Soviet leadershipjtdopts more market-oriented reforms. At the same time.members probably will urgeembers to take more responsibility for helping the USSR, arguing that the Community is already providing substantial aid to Eastern Europe,^f/

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