Created: 9/19/1980

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The lolwnic Consultative Acaenbly'e diocuocion of the hostage ieeuc uaa delated yesterday by Prine Minister ftajai'c interruption toecret report on the Iran-Iraq border situation. Tiie Iraqiscucd regulations governing the use of the Shatt al Arab uaten/au. raiaim the possibilityajor confrontation uith Iran.

Debate on the committee to handle tho hostage issue was acrimonious and apparently will be resumud at the Assembly's next session on Sunday. Prolonged discussion is likely before tho committee begins its work. The Assembly agreed yesterdayroposal by the hardliners for the Assembly to produce "terms offor the committee.

Hardliners used the session to call for hostage trials, condemn the US, and attack secular moderates who had official contacts with the US during the Bazargan administration. Moderates like Bazargan and Ebrahia Yazdi responded by citing Khomeini's instruction last year to "prepare public opinion" for necessary military relations with tho US, and the contacts Ayatollah Beheshti and other clerics had earlier with US officials.

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Military Situation

Baghdad ycotcrday declared that all ships using the Shatt al Arab must fly the Iraqi flag, follow Iraqiinstructions, and pay tolls to Iraq. Iranian authorities arc likely to balk at such measures especially for their warships en route to the naval shipyard at Khorramshahr* Baghdad almost certainly is prepared to jse force to back up its claim to the waterway,

Fighting continued yesterday along the southernorder with Iran claiming its artillery set an Iraqi oil well ablaze. Iran has avoided suchin past clashes. Iraq claimed to have dewned another Iranian aircraft and repulsed Iranian tank attacks along the southern part of the border.

There havo also been clashes along the Shatt al Arab portion of the border. These threaten key economicin Iraq and Iran. Pipelines in the area connect major Iraqi oil export terminals in the Persian Gulf with oilfields west of Al Basrah and along tho border. That city is the site of Iraq's largest refinery which handles about one-third of the country's domestic oil requirements and also is Iraq's chief deep-water commercial port,two-thirds of the country's imports. If hostilities reach the city or affect shipping on the Shatt al Arab. Iraq could suffer major shortages ci grain, machinery

and petroleum products.

Original document.

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