Created: 10/7/1980

OCR scan of the original document, errors are possible

National Intelligence Daily (Cable)



Tehran was bombedecond oonoecutioe day ueeterday, and Iraqi aircraft also struck military and economic targets in Mltern Iran.

Mood in Baghdad

civ'lian and military morale in Baghdad remains high and

diplomatic speculation on President Saddam Hussein political demise is premature.

Iraqi enthusiasm for the fighting appears to Be waning as Iraqi civilians sec evidence that the conflict has direct costs:

Iranian Air Force continues to his Baghdad and other Iraqi cities.

--Thousands of foreign workers and theirare leaving Iraq.

--Boghdrtd University has suspended classeswhile elementary and secondary schools appear to have closed temporarily.

funerals of Iraqi soldiers killed in the fighting arc more numerous.

Iraq's hopesuick victory have been dashed. Its strategy now is probably to wear down Iraniansince the Iraqis may estimate that the Iranian military cannot continue its current level of operations much longer and will soon have significant shortages in fuel and spare pnrts.

The prospectonger war has made Iraq especially sensitive to any sign that foreign governments areIran with military supplies. Recent Iraqi press as well as charges by Iraqi Defense Minister Talfah that the US is supplying Iran with spare parts,

reflect Iraq's concern that Washington and Tehran will

eal involving arms and the hostages.

Inside Iran

President Bani-Sadr's newspaper in editorials over the weekend sharply criticized his clerical opponents for their purges of tho officer corps before the war with Iraq. The paper criticized "narrow-minded Muslimwho sought to weaken the armed forces and

asked, "What would have boon the fate of Iran today if they had succeeded in the plans to eliminate out Army?"

Bani-Sadr is probably attempting to seize theinitiative. He undoubtedly fears that the clerics will blame him for Iran's military setbacks because he has been commander in chief of the armed forces since last February, and assumed direct command of the warshortly before the Iragi offensive into Khuzestan.

Soviet Reaction

//The Soviets for the first time have soughtossible Western naval force in the Persian Gulf would impinge on the USSR's security interests.


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