Created: 2/3/1959

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central intelligence bulletin



There are some indications that the Soviet party congress will be in session longer than originally planned andthat, contrary to the congress' agenda, changes In the party entral committee may be acted on at one of the closingPage

Communistndonesia: Four Chinese Communist twin-engineight bombers apparently are beingto Indonesia as part of8 bloc-Indonesian arms deals. The piston bombers, accompanied by anrrived at Rangoon, Burma,ebruary. The bloc also is providing Indonesia withowin-jet light bombers,et fighters, and substantial quantities of other types of aircraft under arms arrangementsm (page

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C*Iran-USSR: The Shah's interest inonag-gression treaty with the Soviet Union is causing graveand reassessment among Irans Baghdad Pact allies. Turkey and Pakistan view the proposed treatyirect threat to the pact and are making major efforts to induce the Shah to reconsider. London is also trying to persuade he Shah to change his decision and, if this fails, is prepared to exert maximum efforts to get him to proceedhe Iranian foreign minister indicated1 February thai Soviet-Iranian negoUaUon^vere stalled over Iranian membership in the Baghdad Pact andvery good chance" of breaking down.as been considered unlikely that the USSR would insist on terms which would obstruct conclusion of theseage 5)

everal ministers of the Algerian rebelgovernment have informed the American Embassyof their firm intention to prevent exploitation bySaharan oil resources. The rebels plan to "warn offfrom Saharan districts" and discourage Americanfrom participation in French oil development They fear American casualties might affect the USthey(Page 8)

Feb 59


oviet delegation has arrived in Libya tonegotiations for constructing and equipping two hospitals as gifts from the USSR. The Libyan Government is still "studying" other long-standing Soviet aidin the form of machinery and technical aid forprojects. At the same time, Libya is attempting to obtain Increased American aid.


Portugal: Persistent rumors In northern Portugal that the military are about to bringoup and force Prime Minister Salazar into retirement are symptomatic of thepoliticalonsiderable number of army officers, mostly of Junior grade, seem to be dissatisfied with the regime and to sympathize strongly with General Humberto Delgado, who campaigned for the presidency last spring and who, sinceanuary, has been in asylum in the Brazilian Embassy in Lisbon.

Feb 59


Spain:^Spanish police are reported reluctant totactics against student demonstrations expectedduring February, because they are unwillingthemselves with the strong-arm methods of theincreasingly open expressions of discontent inlikely, even if the government takes strongthe Union Espanola--the formation of which wasby rightist critics of Francoinner

3 Feb 59




central intelligence bulletin

Possible Lengthening of Soviet Party Congress

i'Jhet party congress, now in its eighth day, may be prolongedebruary, and thereos-




Chinese Communist Participation in Indonesian Arms Deals

Four Chinese Communist twin-engineight bombers, accompanied by an Indonesianransport, arrived at Rangoon from Kunmingebruary, apparently en route to Indonesia. The bombers, formerly subordinate tod Air Division, presumably are being transferred to Indonesia under8 arms agreement with Czechoslovakia. Under similar arrangements with Peiping, Czechoslovakia also is providing Indonesia withround-attack bombers and possibly other aircraft from Communist China as well.

Peiping also Is participating in the0 arms deal. This agreement calls for theof naval vessels, including destroyers, submarines, and subchasers. The first four of eight subchasers which were supplied to Indonesia are believed to have been deliveredhinese Communist port, presumably under arrangements similar to those by which the Chinese Communist aircraft are



Iran's Negotiations with USSR Worry Baghdad Pact Allies

(Turkey, Pakistan, and the United Kingdom, deeplyover Iranian-Soviet negotiationonaggression treaty, are urging that every feasible step be taken to save Iran and the Baghdad Pact. Turkey and Pakistan believe conclusion ofreaty would reduce the Baghdad Pact to worthlessness. They emphasize that pact members would no longer have any confidence in military planning with IranT

(Moscow's awareness of the political impactoviet non-aggression pactemberree world defenseis reflected in the arrival in Tehranigh-level negotiating mission onanuary to support Ambassador Pegov, himself an experienced diplomat.

'iet leaders,uick agreement which

in ineir view woulderious blow to the Baghdad Pact will probably try to keep provisions of any Soviet-Iranian treaty as


^ generalized as possible and avoid specific conditions unpalat-'ableto^heSjah^While the Iranian foreign minister indicatedebruary that Soviet'Iranian nego-tiations were stalled over Iranian membership in the Baghdad Pact andvery good chance" of breaking down, it is considered unlikely the USSR would allow them to break down on

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Algerian Rebels to War on US Investors in Saharan Oil

ijfembers of the Algerian rebels' provisional governmentncluding the ministers of Information, armed forces, and cultural and North Africanthe United States Embassy in Tunis onanuary that American lives and property would be endangered if American companiesdirectly in the exploitation of Saharan oil. The rebels said they have told several American companies, including Standard Oil of New Jersey, whichorth Saharan concession from France last month, that they have noto explorations for oil. The rebels will not, however, permit France to exploit the Sahara's petroleum resources/"

The Algerians said that while operations inside Tunisia of the International BechtelAmerican firmipeline from the Edjele field in eastern Algeria to the Mediterranean in southernnot be bothered, no rebel effort will be spared to stop work in Algeria/

She rebels deny that France has any right to the subsoil wealth of either the Algerian or Saharan departments. The FLN has repeatedly attempted to sabotage the heavily guarded pipeline-rail route activated in8 to link the Hassi Messaoud field with theseacoast, scoring the first major success two weeks ago by blowing up an oil train, destroyingfank carsTx

COther targets for rebel activity are the construction crews which last fall beganile pipeline from Hassi Messaoud to the port of Bougie. This route, scheduled for completion this fall, will yield an estimated outputarrels of crude petroleumearlyimes8 output of the temporary pipeline and rail system. France, which is basing its economic development program for Algeria on the exploitation of the petroleum and natural gas resources of the Sahara, hopes2 to obtain virtuallyallitsesti-mated crude requirements from the SaharaT: I


intelligence bulletin


Army Coup Rumored in Portugal

rumors in northern Portugal that the military are about tooup and force Prime Minister Salazar intoreflect continuing political tensions. These rumors,

are reminiscent ofumoerilitary officerswereevolt against the regimeugust, the day of President Americo Thomaz' inauguration. The move was to take the formarch from Oporto and Braga to

A considerable number of army officers, mostly of Junior grade, are said to be disgruntled over what they regard as favoritism regarding promotions and over the regime'sseverity last May in repressing popular demonstrations in favor of the oppositionist presidential candidate, General Humberto Delgado. These officers are regarded, in the north at least, as being strong supporters of Delgado, who obtained asylum onanuary at the Brazilian Embassy in Lisbon to avoid arrest by the police. Opposition leaders in Oporto, who have recently been appealing publicly to the army to oust Salazar, maintain that the army will not permit roughof Delgado.

The likelihoodoup attempt might be strengthened ifrmy Captain Henrique Galvao, who escapedisbon hospital onanuary and is still at large, shouldin establishing direct contact with dissatisfied elements of the military. Galvao, an outspoken critic of the regime, probably still enjoys the respect of many army officers and is popularly regardedartyr because of Salazar'shostility to him. He islose friend of Delgado, and if the two work together the general might be able to make good the prediction he reportedly madeonfidant recently that "Salazar has six months in which to leave the country or else he will never leave It alive.1


The Franco regime seems unsure of itself in dealing with var-

Soppositionhe security authorities are worried about how to handle -ations by Barcelona University students reportedlyfor early February. Failure to scotch them will encourage their spread, but forceful action may worsen the situation. The official adds that many of the police are trying to devise ways of avoiding rough tactics, since they do not want to be identified with the regimes strong-arm methods/.

ebruary rightist and liberal opposition groups inannounced the formation of the Union Espanola, in defiance of the ban on all parties except the Falange. Three days earlier Joaquiniberal monarchist and wealthyember of the new party, had strongly criticized the Franco regimeinner in Madrid attended byrmy generals, bankers, lawyers, and university professors. The Union Espanola, in which the left-wing Christian Democrats, Social Democrats, Socialists, and Anarchists are notexistedroup atear ago without government interference. The regime permitted Satrustegui, aof the group, toeeting of monarchist factions held in Estoril

Should the regime fail to crack down on the Union at this time, in contrast to its severity in arrestingoocialists laston charges of illegal political activity, its forbearance would probably be due to hesitancy to alienate powerful sources of financial aid and nuclei of support in the event that Franco eventually announces the restoration of the monarchy. Whether or not the regime takes strong action, public discontent is like! to make itself heard to an increasing extent.



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