NATIONAL INTELLIGENCE DAILY MONDAY 7 APRIL 1980

Created: 4/7/1980

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SITUATION REPORTS

IRAN

The Revolutionary Council's announcement that it will refer the hostage transfer issue to Aj/atollah Khomeinilee to the Council's internal dittieicne.

Although Foreign Minister Ghotbzadeh said thehas made its own decision, it is more likely that it has simply resolved to give Khomeini responsibility for handling the problem. The hardliners on the Council led by Ayatollah Beheshtl's Islamic Republic Party thisannounced their opposition to any transfer of the hostages from the militants* control. One senior IRP official mot with Khomeini and said no transfer is likely.

President Bani-Sadr on Saturday reiterated that the hostage crisis is diverting Iran's attention from its enormous domestic and International problems.

Bani-Sadr has endorsed former Irish Foreign Minister MacBride's proposal to try the Shah in absentia andis also backing the efforts of Archbishop Capueci, who met with the militants yesterday to urge thorn to hand the hostages over to the government. Neither alternative appears to enjoy much support from the hardliners in the Revolutionary Council, the militants, or Ayatollah Khomeini.

Relations With Iraq

Relations between Baghdad and Tehran continue to deteriorate). Baghdad radio indicated yesterday that the Iraqi Foreign Minister has urged Tehran to withdraw immediately its forces from several small islands in the Strait of Hormuz occupied by the Shah The

Musa and thelong been disputed by Iran and the United Arab Emirates. Bani-Sadr recently

aroused Arab opposition by reiterating Tehran'sto hold onto them. The Iraqis doubtless hope to rally Aral: support in their struggle with Iran byattention on the islands.

Foreign Minister Ghotbzadeh attacked the Iraqion television last night and indicated that he has told Iranian diplomats to leave Iraq immediately. He also stated that tha Iranian and Iraqi peoples would overthrow the Iraqi Government* /

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