DIRECTORATE OF INTELLIGENCE
Central Intelligence Bulletin
onduras: El Salvador's failure to withdraw its troops could leadesumption of hostilities. (Page 6)
" TOP OECRET
Spain: General Franco's naming yesterday of Prince Juan Carlos as king-designate has ended the long guessing game over who will succeed Franco, but the basic political situation remains unchanged.
Under the constitution. Franco may continue as chief of state and chief of government for life. Except in the unlikely event of Franco's suddenly stepping down, Prince Juan Carlos will not become king until the general's death or incapacitation. Because Franco also has the power to revoke the designation, he can keepyear-old princecontrol. In addition, the prince will have to take an oath to uphold Franco's twelve Principles of the National Movement and the six fundamental laws which institutionalize the present system of government.
In choosing Prince Juan Carlos, Franco passed over the chief pretender Don Juan, father of the prince and son of the last king, Alfonso XIII, Don Juan apparently is not going to contest the decision at this time * He reportedly is angry, however, and his chief adviser has indicated deep disappointment at the "installation" as opposed to the "restoration" of the monarchy. Most monarchists are resigned to the decision and somewhat assuaged by thecommitment to the monarchical form.
Franco also has the power to name hisas chief offrom three nominations made by the Council of the Realm, but most informed observers do not expect him to do so now.
Initial reactions of the power groupsthe government and of the general public have
been positive. They see the choice as providing for continuity with careful control on political
evolution and asight at the time of
of both Israel and fighting since the
increasingly bellicose actions Egypt have led to the heaviest end ofar-
attack on of the Suez Canal onction to date, and the artillery positions and an island at the southern end July is its largest commando recent attacks on Egyptian SAM sites mark the first time
Israelis have bombed Egyptian territory In the face of increasing Egyptianthe Israelis have stated that they intend to "use whatever means are appropriate" in an effort
Egyptians of Israel's military su-
* j* J
against Israeli losses of
The rising pace of action is reflected in air
aggressiveness can be traced in part to the substantial resupply, retraining, andof the Egyptian armed forces and to the improvement in morale resulting from the series of successful commando raids and artillery strikesby Egypt. The losses suffered by Egypt,could result in atemporaryof Egyptian commando raids across the Suez Canal
Cairo press meanwhile has been playing up the recent clashesictory for Egypt, and Nasir can be expected to highlight the victory theme in his speech today marking the anniversary of thewhich brought him to power Israel's tactics do not appear to have had any appreciable psychological effect on the Egyptian masses. They know enough to discount their own government's claims of losses inflicted on the Israelis but can beto gain some satisfaction from the Israeli admissions of casualties and lost aircraft.
L Elonduras: El Salvador's failure to withdraw its troops by midnight yesterday inwith the OAS deadline could lead to aof hostilities.
OAS members view Salvadoran defiance with serious concern and seem prepared to seek stronger measures to effect the withdrawal. The OAS Council, which went into formal session at midnight, is expected toeeting of foreign ministers onuly to consult on the options available under the terms of the Rio Treaty.
Despite claims by both sides that they will abide by the cease-fire, there are increasing signs that preparations for renewed fighting are being pressed.
onduran planes have been readied for combat
Thereumber of reports that El Salvador is acquiring aircraft from various private foreign sources, including some in the us. If this is true, El Salvador may well bolster its already strong military positionis Honduras.
)e&that Nicaraciuan troops have crossed
into Honduras, and that two planeloads of arms andalso have been supplied from Nicaragua. reports had stated that President Somoza wastoward military support for Honduras. In ayesterday, Somoza and the Guatemalan foreignsaid their governmentshared concern in the dispute of their neighbors and believe that Elshould be prevented from consolidating territory taken by force from Honduras.
' "the Honduran Government may be hard pressed to
)rs restrain its people from taking retaliatorysalvadoran citizens, including those interned
during the early stage of the conflict. This danger would increase if fighting resumes. The Hondurans, at this point, believe that they have done all that is possible to conform to OAS resolutions, with no reciprocity on the part of El Salvador.
ulIntelligence BulletinOriginal document.