Created: 12/2/1985

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Items From the National Intelligence Daily




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Warning Page

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Arrice: RelationstlIraq-Syria: Counierlng Syrian Tnrronsm

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USSR-Persian Qulf: implicationsanoing

Angola: Upbeat Party

PLO: Financial


Relations With Neighbors

Inteniittrd terrorist attacks mar provoke South Atrlcer, action aaalnnountries uitdi

Soulh Attics hasay pursue Insurgents Into Zimbabwearare does not SCI guickly to stop guerrillas from crossing into South Air ten. The warningash of landmine explosionsof Messina, near Ihe Zimbabwean Pordor. that caused at least one Ihumber of tnjurlc

^Pretoria would,be likely to carry out Its threat to pursue guerrlflns it they continue escaping Into Zimbabwe and would move againsi olher neighboring slates so spooled of harboring guerrillas. Pretoria also may Increasesupport lor dissidentounlHo* where ANC activity Is suspocied The recent ANC lactlcs appear deuignnd lo step up snacks in Soulh Africa but to avoid numbers of casualties.


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Countering Syrian Terrorism


Iraq claims fo haveyr/on ipontoreO ring responsible for several bombings In BsahOad, bul lha Iraqis are holding oil on any retaliation, apparently lo keeppossibilityapprochement with Damaacus.

television highlighted the arrest of lour Iraqi nationals said to nave boon responsible lor three spectacular and deadly enproslona In Baghdad2n the broadcast. Ihe four assorted lhal Syrian Inteligence organized the attacks and that ihe ring had planned lo set, oft more bombs during Shia religious celebrations last montn

I Recent efforts by Irog and Syria to reconcileave made no progress so far. Nonetheless. Baghdad probably calculates that frlettone between Syria and Iran over oil uppttes and other Issues offer an opportunity to pgjaj Damascus away from its support tor the Iranian war etior t. >J| ^

The Iraqis probablyrevert to sponsoring terrorist aliacka against Syria il Damascus proves obdurate on Us backing for Iran and the reconclllatron talks tel. The presence in Baghdad of PLO elements capable ol mounting anti-Syrian operations may serve both as an implicit itvnnt to Damascus and na an atd to Iraq In controlling such operations*

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BRA2JI Going it Alone

Brasilia currently reels Utile pleasure to conclude now IMF and debt agreements because of tit strong balance-of .payments position. Finance MloEster Funaro onnounced last week lhal Braill wftl cease eflorts to reach an IMF accord and to restructure Its bank debt. Brasilia claims its fiscal reform program lor lOofl is as lough as is poUticesy leasible and thai it wet reduce the pobilc-secior deficit not as much as demanded by the Fund

i government evidently believes Ihat most banks will continue to reschedule short-term credits and principal repaymentsyear ir interest payments are met. With Important national elections scheduled tor late neat year. Brasilia Is likely to grant greater adjustmentreditors only il tha Inflation rateercent]

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Special Analysis

a' Expanding Rotations

The USSR probably expects new opportunitiesoreIn lha Persian Quit alter Ilt recent success Inrelations with Omen and the United Arabbetween Persian Gull Arabs and the US willto keep trying to court Saudi Arabia, Qatar, andPersian Gull states remain suspicious otIn the region, but their more Immediate concern Iswar. Kvwalt.the UAE, endesaer degree, OmanIncreasingly to Moscow toraddltlonal Insurance againstirom Iranarjraq end to polish their 2


The USSR probably views the decision by Oman and Ihe UAE to establish relations as evidence that Its policy ol supporting Iraq in Its war with Iron has paid oil. it expects further successes In the Qua but jtWesj

establishing ties to Bahrain and Qatar maySSR la now satisfied wiih the state of relations with Saudi Arabia and Implied lhat formal ties may eventually be possl :^

Moscow probably hopes to exploit the doubts of the Gull slates about US commitments lo their security. Soviet media have touted relations with Oman and the UAEign of growing esteem for the USSR and disenchantment with the US. Poiyakov recently visited Iraq and Kuwait, possibly to set lhe stage for reported visits by Soviet Defense Minlstor spfcoiQv to Kuwait and President Saddam Hussayn lo Moscow!

most certatnty would be willing to

II lha Iran-Iraq war threatens to spill over in the Gull and the US refuses to supply air detense equipment.;

relationship should Riya


The USSR also may try to expand its limited economic ties in the Gull. Moscow may try toew agreement on economic cooperation with Kuwait signed last month to urge Oman and the UAE to open their marxots to Soviet goods. In addition, the Soviets eventually may want more oil from lhe Gutf either to rose" for hard currency or to supply their own clients as domestic oil


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Special Analysis

Party Congress

President dot Santos, who willarry congressthird since Angolanpoliticallyat any time since attumlng power$ hatthen ever on the Soviets end Cubans. He will seekgsle etrong backing from the rating SJPLA lo confinesstruggleNITA and South Atgge.ere , miliary oltenslva w

Tho MPlA leadership probably wtfl interpret Iho auccoss olrecent offensive against UNITA as holding the promisesuccess lo come. UNITA presumably would like to carrynear ihe capital this week, but it failed toewmgNonaligned Movement In Luanda In September



Although tho MPLA willilitary solution to Iho Insurgency. It Is unlikely to close the door on talks aimedegionalas lhe recent discussion In Lusaka. Zambia with US rop went awes. Angola's Increased dependence on Soviet mints ry assistance wm notasy for dos Santos to pursue serious negotiations at odds wfth Sowel


Is also likely to introduce reforms to broaden the party's kmtted appeal and to improve the economy, which wtth tho eicepHon of tha oil Industry,hambles]

Special Analysis


The PLO fa esperlenclng Increased llnanclal strains lhat are torclng It to draw on reserves end curtail woclel wellare services II has traditionally provided to Palestinians. The PLO't money troubles are not diminishing Its terrorist capabilities, however, because PLO Chlel Aralat Is taking special measures to ensure theell funded ^

Tho Palestine National Fund, th* financial aim ol theurrent deficit0 ma-on. baaede*pend.iures ol0 million. The PLOsand social wollaro wings hove suflorod heavyIn the past lew years, firstesult ot Israel's invasionand more recenily because of attacks byon Palestinian refugee camps In Beirul. Th* dispersal of PLOIrom Lebanon to various Arab stales three years ago hasattery costsD

Arab conlruxriions have fallen wrtb dectnlng oil incomes and thefinance the Iran-Iraq war. Representatives of seven Arab8 and pledged lo gtv* the0ear. the National Fund reports that only Saudi Arabia is stillillion. Donations olher Ihan formalalto appear to have diminished, with mom Arab support now 'and training PLO


The increasePLO-roJated violence over the past lew years demonstrates that PLO leaders are making sure military pTBperedness remains high. Last year Arafat bypassed regular PLO channels to deposit Saudi aid directly Into militaryaction tor which he was publicly ohkJcd by the Nalional Fundi

Tho more radical. anti-Arafat factions also have plenty ol money for terrorist operations, even though the split with Arafat has removed Ihem Irom thc PlO's formal financial network. Thee* groups had indctxrndent reserves al the time of thev detection msewed from the Notional101



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Political Repercussions

Tha PLOfinancial drfticuttie* are forcing itut bach on its iMiiiltionui roleocial welfare o. onn Nation for Palestinian relugees In particular. Ihe PLO Is now less able lo help Palestinian in Jordan. Lebanon, and the Israeli-occupied lerrnorles who have been .j ' reduced UN refugee services.

Aralat is also sulferlng from ihe money shortage. His ability to control lherso strings has longajor asset to his leadership, but the decjininq revenues are Urn it ingtty to dispense funds has begun to husbanti more carefully, ps> tly to omphi is power.-butto



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