Appro Date
MIDDLE EAST FROKiPAS. CONTENTS
LEBANON: SITUATION REPORTY)
INTERNATIONAL: CRUDE OIL PRICES SLIDINGf)
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M. IN BRIEFEBANON: SITUATION REPORTf) HOSTAGE CRISIS
THE HOSTAGE CRISIS REMAINS TENSE WITH HIZBALLAH AND ISRAEL riovfE*CH *PPURS T0T,WC THE OTHER TO
LERIC ABBAS MUSAWI YESTERDAY PUBLICLY WARNED THAT. If THE US CARRIEO OUT MILITARY ACTION IN LEBANON.
WIUNT" AND THATHIZBALLAH'SAfU KE AlS0 CONTINUED TO PRESS FOR SHAYKH ABDULyBiID ! RELEASE' "nPLICITlY THREATENING THE ISRAELI PS TAKEN CAPTIVEUSAWI OlO NOT. HOWEVER. RE ITERATE THE THREAT
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TO KILL ANOTHER US HOSTAGE* TODAY Y0 IS HOT RELEASED.
UG 89
ISRAELI LEADERS APPEAR ACUTELY WORRIEO THAT UBAYO'S KIDNAPPING HAS BACKFIRED ANO IS COSTING THEM CONSIDERABLY IN WASHINGTON.
NEVERTHELESS. TEL AVIV IS PUTTING CONCERN FOR ITS OWN HOSTAGES FIRST AND WILL CARRY OUT ITS THREAT TO RETALIATE IF THEY ARE HARMED. REGARDLESS OF THE RISK THAT WOULD POSE TO THE REMAINING US HOSTAGES. HIZBALLAH, FOR ITS PART, WOULD 8f UNLIKELY TO DIFf EfiLMTIATE BETWEEN AN ISRAELI S Al
SOVIET RESPONSE
IN TALKS WITH IRANIAN PRESIOENT-ELECT RAFSANJANI IN TEHRAN THIS WEEK, SOVIET FOREIGN MINISTER SHEVARDNADZE EXPRESSEO "SERIOUS CONCERN" OVER THE EXECUTION OF HIGGINS AND THE KIOKAPPING OF UBAYO. ACCORDING TO TASS. THE TWO OFFICIALS CONDEMNED ACTS OF TERRORISM ANO. Ly
CEO PLANS TO CONTINUE TALKt ON LEBANON AT THE EXPERT LEVEL.
THE SOVIET FOREIGN MINISTRY LATER ISSUED AN OFFICIAL STATEMENT THAT COUNSELED RESTRAINT TO ALL PARTIES INVOV.'iD IN THE HOSTAGE CRISIS ANO WARNEO THAT ESCALATEO VIOLENCE tOULOETTLEMENT IN LEBANON AND BLOCK PROGRESS IN THE ARAB-ISRAELI PEACE PROCESS. TASS HAS REITERATED THOSE THEMESTATEMENT ISSUEDALL FOR THE IMMEDIATE RELEASE OF ALL HOSTAGES.
COMMENTt MOSCOW IS PROBABLY GENUINELY CONCERNED THAT MILITARY-STRIKES IN RETALIATION FOR THE EXECUTION Of HIGGINS COULD DISRUPT ITS EFFORTS TO CONVENE AN INTERNATIONAL CONFERENCE ON THE ARAB-ISRAELI CONFLICT.pi
THE SOVIETS HOPE TO CONVINCE THE US THAT THEY OPPOSE TERRORISM AHO THAT THEIR NEW LINKS TO TEHRAN CAN BE CONSTRUCTIVE. MOSCOW WOULD WELCOME CREDIT FOR HELPING RESOLVE THE HOSTAGE CRISIS. BUT IT WILL BE CAREFUL NOT TO JEOPARDIZE SOVIET TIES TO IRAN OR SYRIA BY PRESSING TOO HARD FOR CONCESSIONS. THE USSR IS ALSO SENSITIVE TO FEARS IN SYRIA ANO IRAN OF SUPERPOWER COLLUSION, AND IT WILL TRY TO AVOID APPEARING Ta %tS Ah ADVOCATE OF"US VIEWS ON THE HOSTAGES.
SECRET
UG 69
2. INTERNATIONAL) CRUDE OIL PRICES SLIDING
WORLD CRUDE OIL*PRICES HAVE FALLEN TO THEIR LOWEST LEVELS SINCE fE6RUARr BECAUSE OF SLUGGISH Oil OEMANO ANO RISING SUPPLIES. THE AVERAGE PRICE OF CRUDE OIL WORLDWIDE HAS FALLEN Si.SO IH RECENT WEEKS TO0 PER BARREL. PRELIMINARY DATA SUGGEST THAT THIS YEAR'S OECD OIL DEMAND IS SOMEWHAT SHORT OF EARLIER FORECASTS BECAUSE OF HIGHER OIL PRICES EARLIER IH THE YEAR AND SLOWER-THAN EXPECTED ECONOMIC GROWTH. MEANWHILE. OIL SUPPLIES HAVE RISEN.
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IN BRIEF Ml DOLE EAST
BECAUSE OPEC IS NOT LIKELY TO LIMIT PRODUCTIONRTcES 4RE LIKELY TO REMAIN UNDER DOWNWARD PRESSURE AT LEAST UNTILEPTEMBER WHEN THE CARTEL IS EXPECTED TO RECONSIDER LOCATING QUOTAS.
NEW PRESIDENT, ALI AKBAR RAFSANJANITAKES OFFICE TODAY TWO MONTHS EARLY . .OTE APPROVING EXPANDED PRESIDENTIAL POWERS VALIDATEDEGIME WANTS TRANSITION TO SEEM SMOOTH, BUT INTENSIFIED FACTIONAL CONFLICT LIKELY.
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SOUTH ASIA
t GOVERNMENT INFORMATION MINISTRY OBJECTEO TO US-SOVIET TALKS . . . REJECTED ROLE FOR NAJI8ULLAH. ZAHIROUTSIDE" SETTLEMENT EFFORTS WITHOUT RESISTANCE PARTICIPATICiL-MINISTRY STATEMENT NoT APPROVED BY INTERIM GOVERNMENT.ggW
AFRICA
SECRET
YESTEROAY AT WHITES-ONLY HOSPITAL IN SOUTH AFRICA DREW MIXED SUPPORT . .ROTESTS AGAINST SECURITY RESTRICTIONS PLANNED FOR WEEKEND . . . RESPONSEEfJSO FAR BUT VIOLENCE. SEPTEMBER ELECTION MIGHT PROVOKE CRACKDOWN. fBHti
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