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Central Intelligence Bulletin
CONTENTS
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Panama: Canal treaty negotiations (Page 8)
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Israel-Egypt: The recent series of aircraft strikes against Egyptian positions along* Canal is apparently indicative ofactical pattern for the immediate future.
Sinceuly, Israeli aircraft have struck three times against Egyptian installations on the west side of the canal. In announcingction, an Israeli spokesman noted thatiolations of the cease-fire had continued, and that "consequently Israeli Air Force planes attacked.
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Israelis, still very conscious ofhad heretofore avoided using aircraft on this front. ardened Israeli attitude has become evident recently. This is typified by the Defense Ministry official's comment that oker game, and thehe limit.
For their part, the Egyptians appearkeep the situation alo-ng the canal activeconsequences. Even prior to his blusteryWednesday, Nasir indicated he felt compelledthe Israelis aloncj the canal. Moreover,of severe losses during the heavy clashespast few days, the Egyptian Air Force has soto seekith the Israelis andbegun its own air s'lirikes against Israelinear the canal,
Central Intelligence Bulletin
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South Korea; President Pak hasoldmove to undercut criticism of the third term amendment movement.
Pak announced last night that thewill definitely move to amend thepermit him to runhird term speech he emphasized that he will interpretnational referendumote ofin him and his policies; conversely, hethat he will "step down immediately" ifis rejected. This statementa shock tactic designed to make the Southabout the consequencesovernment without
Pak.
By publicly linking the prestige of histo the amendment movement, Pak has indicated that he and his supporters are confident that they can obtain enough support in the National Assembly to pass the amendment. Pak, however, continues to try to appear to be above the squabbles andof the assembly and apparently is confident that the economic growth and politicaluring his period of national leadership are his
best assets among the general electorate,
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Elonduras: El Salvador's armed presence on Honduran soil continues while theof American States (OAS) moves to deal with the conflict on the diplomatic level. Salvadoran strategy is now to obtain enough abstentions in the OAS to avoid being condemned as an aggressor when the foreign ministers meet in Washington onuly.
Most Latin American countries are reluctant to censure El Salvador or enforce OAS resolutions with an Inter-American Peace Forceanyare willing to impose sanctions if thereonsensus, but few are willing to propose sanctions In formalwo-thirds vote is required to invoke such measures under the Rio Treaty.
Argentina and Brazil have made it clear that they are willing to collaborate in an IAPF if necessary. Mexico, which has traditionally opposedorce, recognizes that the prestige of the OAS is at stake. If other means fail, it would go along, but would not send troops.
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There is increasing concern that the conflict between El Salvador and Honduras will severely set back the cause of economic integration.
Extremely pessimistic forecasts have come from the deputy secretary general of the Common Market Secretariat and from Guatemalan officials. Thegeneral of Guatemala's National Planningone of Central America's shrewdest economists and most dispassionate observers, has expressed doubts that the Common Market will ever recover.
Commercial relations between El Salvadorare suspended. Both countries,agreed not to interfere with shipmentsother three Common Market countries. and harassment continue to impede tradeCosta Rica, Nicaragua, and Guatemala,
Bolivia: Retired General Armando Escobar'sto run for president next year has increased the likelihoodilitary coup.
General Cesar Ruiz, armed forces chief of staff and confidant of armed forces commander General Ovando, said that military leaders are furious over Escobar's decision. According to Ruiz, they will review the impact of this development and--if it appears that Escobar could defeat Ovando in an openwilloup.
Escobar's announcement was not unexpected. He has been extremely popular as mayor of La Paznd his candidacy has been boosted by President Siles. eries of barn-storming appearances throughout Bolivia, he has been generating increasing appeal in rural areas. He is believed to be the only political personality who could defeat Ovandoegal election.
Ovando's presidential ambitions are supported by the military high command and strategically based units in La Paz. Despite Escobar's popularity with civilian groups in the capital, he is not known to have any major support from the country's professional military clique, which looks down on him as anwho came up through the ranks withoutthe military academy.
ilitary coup at this time would probably ensure Ovando's succession to theit would almost certainly ushereriod sSjf civil unrest.
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Eastest Germany: Pankow is bothered by the implications of Polish leader Gomulka's suggestion that Bonnreaty with Poland on the Oder-Neisse border question.
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The East Germans
o be concluded, suggestion nonetheless. They that the Polish offer might be Germany as an indication that claim to represent all Germans East Germans fear thatored during anyest perhaps on other subjects such litical relations.
probably do not oxpoct
but oppose Gomulka's apparently believe
interpreted in East Warsaw accepts Bonn's . In addition, the nterests might be ig-German negotiations, as economic and po-
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West Germans continue to maintainesolution of the border issue can come about onlyroader peace treaty ending World War II, as was specified in the Potsdam agreement. Several Wast German officials, however, have professed toolish willingness to be flexible on this and other issues.
For their part, the Poles appear willing to keep on talking, and presumably have Soviet consent to do so. Gomulka, who first made his proposal onay, reiterated it onuly in the presence of Soviet, Czechoslovak, and East German
of whom, however, supported it.
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NOTES
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Panan-j: The junta govcrr.ncnt is reportedlyew three-man negotiating team to be headed by Ambassador to the US Roberto Aleman to reopen canal treaty negotiations. Aleman isencouraging government strongman General Torrijos along these lines by stating erroneously that the US has agreed to such negotiations. ormer chief of the foreign ministry's treaty staff, who is extremely anti-US, is being mentioned
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Central Intelligence Bulletin
NATIONAL INTELLIGENCE ESTIMATE
The United States Intelligence Board, onuly, approved the following national intelligence estimate:
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