Foreign Relations of the United States, 1955–1957, Near East Region; Iran; Iraq, Volume XII

270. Staff Study Prepared in the Department of State¹

Washington, October 30, 1957.

UNITED STATES OBJECTIVES AND POLICIES WITH RESPECT TO THE NEAR EAST

Problem

1. To analyze the current situation in the Near East, to ascertain the factors and trends which endanger the U.S. and Western position there, and to determine the general course of action that will better safeguard U.S. and Western interests in the area.

Analysis

Objectives

2. The objectives of the U.S. with respect to the Near East are:

a. Availability to the U.S. and its allies of the resources, the strategic positions, and the passage rights of the area, and the denial of such resources and strategic positions to the Soviet bloc.

b. Stable, viable, friendly and progressive governments in the area, aware of the threat to their own independence and integrity posed by international Communism, and with maximum capacity to meet that threat.

c. Containment of the Arab-Israel problem, a reduction of tensions between Israel and the Arab states, and, ultimately the promotion of an atmosphere in which the parties to the Arab-Israel dispute can work toward a peaceful and equitable settlement of their differences either directly or through the good offices of a third party.

d. Establishment among politically important groups in the area of a psychological climate favorable to the achievement of U.S. objectives.

e. Prevention of the further extension of Soviet influence in the area and the rollback of existing Soviet presence and influence.

f. Wider recognition on the part of the governments and peoples of the area that in the twentieth century independence can only be perfected by “interdependence”, realization of the community of interests between the area and the Free World, [and] awareness of the stake which the peoples of the area have in the future and fortunes of the Free World.

The Importance of the Area

3. The Near East is of great strategic, political, and economic importance to the Free World. The area contains the greatest petroleum resources in the world and essential facilities for the transit of military forces and Free World commerce. It also contains the Holy Places of the Christian, Jewish, and Moslem world and thereby exerts religious and cultural influences affecting people everywhere. The geographical position of the Near East makes the area a stepping stone toward the strategic resources of Africa. The security interests of the U.S. would be critically endangered if the Near East should fall under Soviet influence or control. The strategic resources are of such importance to the Free World, particularly Western Europe, that it is in the security interest of the U.S. to maintain a high level of effort to insure that these resources will be available and will be used for strengthening the Free World.

Principal Obstacles to U.S. Objectives

The Arab-Israel Dispute

4. The U.S. role in the United Nations and elsewhere in the circumstances surrounding the emergence of the State of Israel, and subsequent U.S. private and public economic assistance to Israel, are the primary bases for criticism of the U.S. in the Arab world. The commonly stated official Arab public position on the Arab-Israel conflict has since 1948 consisted of insistence on the implementation of all relevant United Nations resolutions with respect to Palestine. Extremist Arabs call for the extinction of Israel by force, but the containment and isolation of Israel is the general Arab objective, since the fear of Israeli expansionism pervades the Arab world. The Arabs seek in the long run the disappearance of Israel. Israel’s primary objective is to obtain a settlement based on Arab recognition of the status quo, involving recognition that Israel is here to stay and a gradual relaxation of present Arab economic warfare. Israel seeks to establish itself as a permanent entity in the Middle East, viable both territorially and economically, in the context of the fulfillment of its self-ordained mission to “ingather the exiles” and bring a majority of the Jews of the world to live in Israel.

5. The Soviet Union supported United Nations action recommending the partition of Palestine and, through Czechoslovakia, provided the arms which so heavily contributed to the Israel victories in 1948. Support for Israel was discarded about 1952 for a pro-Arab policy. Prior to the United Kingdom-French-Israel invasion of Egypt in 1956, there appeared to be a limit beyond which Soviet anti-Israel propaganda would not go. Since then, However, Soviet anti-Israel propaganda seems to have gone much further, but there is still some reason for believing that the USSR would not deliberately provoke an Arab state to attack Israel.

6. The change in administration in the U.S. in 1953 saw a reexamination of U.S. policies with respect to the Palestine problem and a conscious effort to establish a more balanced approach. U.S. actions and the U.S. attitude are, however, still regarded by the Arabs as being heavily weighted on the Israel side. The U.S. supports the continued existence of Israel, and also supports the territorial integrity of the Arab states against Israeli aggression. The U.S. strongly desires to see a settlement of the Palestine problem. Specific points of friction between the Arabs and the U.S. on the Arab-Israel problem include: Israel military superiority; the problem of the Arab refugees; U.S. public and private aid to Israel; Israel immigration policies; and Israel use of the Suez Canal and the Gulf of Aqaba.

Arab Nationalist Aspirations

7. As is the case with other newly emergent states, the Arab countries have had to face up to the fact that national independence is not a solution to all of their problems. The result has been two-fold: a jealous and exaggerated concern over present sovereignty, and a feeling that the Arab place in the sun cannot be achieved in the context of the present situation where Arab human and physical resources are divided among eleven separate national entities and parts of the Arab world are still under the control of Western Powers. While there are probably decisive historical, ethnic, and cultural obstacles to Arab unity, it has become a widespread aspiration particularly among the semi-educated urban proletariat. Nasser, in particular, has demonstrated his ability to exploit this aspiration. Israel, as a physical separating factor, plays a role in this context.

8. Our economic and cultural interests in the area have led, not unnaturally, to close U.S. relations with elements in the Arab world whose primary interest lies in the maintenance of relations with the West and the status quo in their countries—Chamoun of Lebanon, King Saud, Nuri of Iraq. In the spring of 1957, the U.S. took dramatic action to support King Hussein and to maintain the independence of a Jordan which is basically unviable, politically and economically. These developments have contributed to a widespread belief in the area, particularly among discontented elements mentioned above, that the U.S. desires to keep the Arab world disunited and is committed to work with “reactionary” Arab elements to that end.

9. The USSR, on the other hand, having no established economic or other interests in the area, and desirous of destroying the Western position, need not be inhibited in proclaiming all-out support for Arab unity and the most extreme Arab nationalist aspirations.

Repercussions in the Area of the East-West Struggle

10. Communism in both its domestic and international guises has appeared in the area as the latest of a series of foreign ideologies. The Near East, according to some scholars, has been in a state of political and cultural disequilibrium since the arrival of Napoleon in Egypt in 1798. The area’s institutions and religions have steadily declined in vigor, as a result of the impact of Western culture, and native resistance to Communism per se has therefore been disappointing. The fashionable policy in the area is a “neutralism” based on the belief that Arab interests will best be served by encouraging a competition between the East and the West for Arab favor. The Arabs do not lack confidence in their ability to maintain their independence in such a competition. The Arabs sincerely believe that Israel poses a greater threat to their interests than international Communism.

11. Arab animus towards Israel is a useful area for exploitation by the USSR which faces no domestic difficulties or inhibitions of conscience in pursuing an anti-Israel policy and in supplying arms. The USSR can also freely endorse Arab aspirations for unity and the elimination of all Western influence from the area, particularly Arab-Western military arrangements which cause concern to Soviet leaders. Arab extremists and the Soviets have a common objective in unseating Arab rulers interested in maintaining the status quo in the area and consolidating their regimes. The USSR repeatedly calls attention to its propinquity to the area as against the remoteness of the West. Certain Arab states have surplus agricultural commodities which compete with our own in world markets but which the Soviet bloc is willing to purchase.

12. The U.S., on the other hand, is publicly committed to a foreign policy which embraces the preservation of the State of Israel in its essentials. We have found it to our interest to work with and seek to strengthen those Arab leaders who appreciate the mutual benefits derived from cooperating with the West. These same leaders are the joint targets of nationalist Arabs and the USSR. Where we and our friends seek a level of stability in the area to permit peaceful economic and social progress, nationalist Arabs and the Soviets need continuing chaos in order to pursue their separate aims. Certain of the governments friendly to us are required to use repressive measures in order to curb extremist elements and retain power; we are identified with those efforts. The impact of our efforts to bring home the facts concerning police state methods behind the Iron Curtain is blunted by the commonness of similar—if less efficient—methods in the Near East. The Near Eastern tends to see our support of such governments as inconsistent with U.S. principles, while not at the same time exhibiting an aversion to the use of repressive measures in the Soviet area. [2½ lines of source text not declassified] The younger generation, generally uninfluenced by religion, is not repulsed by the idea of a controlled society. Our Western democratic ideals of freedom and democracy, while vaguely reversed [revered?] and talked about, are, in actuality, little understood. Against the background of the grievances against the West, the antagonisms toward Israel, dissatisfaction with local governments, an imperfect understanding of the principles we espouse, and venal and ineffective local information media, our psychological efforts against Communism lose their effectiveness.

13. Our responsibilities as the leader of the Free World in the region add to the area of potential difficulties in our relations. So long as so many Arabs remain unconvinced of their stake in the future of the Free World, our concern over Middle East petroleum as essential to the Western alliance, our desires to create indigenous strength to resist Communist subversion or domination, our efforts to maintain existing military transit and base rights and to deny them to the USSR, are looked upon as a mere cover for a desire to divide and dominate the area. This is a situation which, given time, can be improved as there is growing realization that only the Free World is willing or able to develop, purchase and dispose of the oil of the area on terms which can fulfill Arab aspirations for higher living standards.

14. Soviet interest in opposing both the Baghdad Pact and the American Doctrine is obvious. Here again a substantial element of Arab public opinion pursues the same objective. Iraqi membership in the Baghdad Pact is considered a challenge to Egyptian leadership of the area, an attempt to divide the Arab world, and to minimize the Israeli threat. It is claimed that membership of non-Arab states, even though they may be Moslem, prevents the Baghdad Pact from being a truly indigenous instrument. Arab nationalists argue that British membership in and U.S. support of the Baghdad Pact prove its “imperialist” character. There is also opposition to the Baghdad Pact based on the fear that it increases the risk of bringing World War III to an area which escaped the horrors, and indeed, profited, from World War II. This fear applies likewise to the American Doctrine. In addition, the American Doctrine, with its “stand up and be counted” character with respect to international Communism, is incompatible with the Arab brand of “neutralism”, and traditional Arab reluctance to be committed.

United States Support of Western Allies

15. The major phenomena affecting the U.S. since the ill-fated British-French-Israel invasion of Egypt in November, 1956 have been the emergence of the U.S. as the leader of Free World interests in the area and tacit recognition of that fact by our British and French allies in all areas except the Persian Gulf. U.S. action opposing the invasion was generally appreciated by the Arabs at the time, but the strong position which we briefly achieved began to fade quickly for a number of reasons, one of which was our making it clear that the U.S. would under no circumstances permit developments in the Middle East to lessen its support of the Western European alliance. This continuing and necessary association with the West makes it impossible for us to avoid some identification with the powers which formerly had “colonial” interests in the area. As these interests have receded, the points of conflict between the Arab states and nations of Western Europe have been reduced. There remain several, however, which can only be troublesome for some time to come.

Persian Gulf

16. The United Kingdom is convinced that its continued predominance in the Persian Gulf is essential to guarantee the flow of oil necessary to maintain the British domestic economy and international position. Saudi Arabia undoubtedly over the long run envisions the reduction or elimination of British influence in the Gulf [1½ lines of source text not declassified]. The Persian Gulf States and the Aden Colony and Protectorate are considered by Arab Nationalists as terra irridenta in the Eastern Arab World. The Western alliance makes the U.S. a target for some of the animus which this situation generates.

North Africa

17. The continuing conflict in Algeria continues to excite the Arab world. There is not a single Arab leader, no matter how pro-Western he may be on other issues, who is prepared to accept anything short of full Algerian independence as a solution to this problem. The nature of the warfare there provides a constant stream of news and propaganda which has a highly unsettling effect in the Eastern Arab states. There is fertile ground for Soviet and Arab nationalist distortion of the degree of U.S. and NATO moral and material support to the French in Algeria. The emotional and ostentatious character of French support for Israel is a further unsettling element. The promising relationship which was developing between Tunisia and Morocco, on the one hand, and France on the other, as a result of French granting of independence to those countries, is being poisoned by disputes arising out of the hostilities. This development serves to jeopardize U.S. objectives in these two countries and elsewhere in the Arab world.

Economic Problems

18. The majority of the states in the area have seen a significant rise in living standards since the close of World War II. Standards of consumption have risen, education is more widespread, and a middle class is being established in an area where but a decade or two before feudalism seemed quite firmly entrenched. As is generally the case, however, the rise in living and social standards which has taken place has only whetted the mass appetite for more progress and more material advantages. This rise in living standards, moreover, sometimes has the effect of moving people from a settled tribal or village environment into an urban realm of potential conflict with new forces and new ideas; they move from areas of political inertia into areas of stimulated dissatisfaction. Not unnaturally the tendency is to ascribe the blame for the area’s relative state of underdevelopment to external factors such as “colonialism”, unfair arrangements with the oil-producing companies, and a desire on the part of the West to keep the Arab world relatively undeveloped so that it may ultimately become a source of raw materials and the primary market for Israel industry. There is a lack of desire on the part of the Arabs to recognize the need for conscious and deliberate planning of major development programs either on a national or regional basis, the need to establish orderly processes of capital formation within the area, and the advantages to be gained by the free movement of capital and persons throughout the area.

19. The above statements with respect to a gradual increase in living standards do not apply to Egypt. It would appear that the population pressure in Egypt has reached a point where there is practically nothing which human technology at its present stage of development could do to arrest the downward trend of living standards. Even the fullest development of the Nile River would be overtaken by population growth within Egypt. Perhaps Egypt’s only economic salvation may lie in a major technological breakthrough such as a discovery of oil in vast quantities on Egyptian territory or the establishment of a source of extremely cheap power for use in the desalinization of seawater and pumping it up to Egypt’s desert plateaus.

20. U.S. economic and technical assistance programs have contributed substantially to the rise in the standard of living throughout most of the area. Here again, however, the favorable impact of such programs has been dissipated to some extent by the fact that this rise in standards has not kept up with local expectations. In a sense, we have become victims of our own reputation for rapid, skillful and imaginative execution of major engineering works. The Arabs feel that we have the resources with which to perform miracles in their countries if only we desired to do so. A further source of difficulty has arisen from comparisons on a per capita basis of assistance which we have given to Israel with assistance rendered to the Arab states. Legislative requirements surrounding U.S. aid are considered to be “strings” or political conditions established in derogation of local sovereignties. In some cases, U.S. aid programs have meant the import of a large number of U.S. technicians, all requiring a firmly [fairly?] high, and by local standards, ostentatious standard of living. The presence of American technicians and advisers in some numbers in local government agencies has excited adverse comment from time to time.

21. A further problem is created by the fact that certain of the agricultural commodities produced by the area have become surplus to and competitive with the needs and products of the West. This is particularly true with respect to Egyptian and Sudanese cotton. It is periodically true of such crops as Syrian grains, Iraqi cereals and dates, and Lebanese fruit. The Soviet orbit has been able to increase the volume of its trade with the area by arranging to dispose of certain of these commodities under barter and economic and military assistance arrangements.

21–A. The obstacles to the attainment of our objectives are so great and the forces working to weaken the U.S. position in the area are so strong that we cannot exclude the possibility of being faced with a set of circumstances which put up to us squarely the choice of either using force to maintain our position in the area or seeing it disappear entirely.

Elements of a Course of Action

The Arab-Israel Dispute

22. We must learn to live with this problem for a long time ahead, as the widely divergent objectives of the parties to the dispute, and the efforts of the USSR to capitalize on the conflict prevent a dramatic resolution of the problem. In a dispute where emotions and tensions are so high, we cannot expect to hope that either party will respond quickly or affirmatively to a policy of sympathetic impartiality on our part. Each will insist that our policies favor the other side. Our own lack of maneuverability in this field, however, impels us to endeavor to commit ourselves to a process of persuasion not only with regard to sincerity of our motives but also as to the worth of the very real practical benefits which our policies have brought and can bring to the area. There are specific points of friction which we can endeavor to minimize, but the attitude of the parties, the willingness of the Arabs to turn to the USSR, and the increased weakness of our position in the area make it unwise for the U.S. to take an initiative looking toward a general settlement for the foreseeable future. This would not, however, preclude us from supporting, or even inspiring, an initiative taken by another friendly country, or in the United Nations.

23. Our primary short-term objective must remain the prevention or thwarting of a resort to force by either party to the Palestine dispute in an attempt to gain a favorable solution. The present courses of action in this contingency involving the use of moral suasion and economic sanctions, within and outside the United Nations, which served us well in the Suez hostilities should be retained. We should continue efforts to maintain and perhaps expand the mission of the UNTSO and of the UNEF in preventing and localizing frontier outbreaks. We should continue publicly to oppose an arms race in the area, despite the fact that Soviet deliveries to Syria and Egypt, and French deliveries to Israel give us little basis for hope that the present competition for arms will be quickly terminated. We should continue to require Israel to look to sources other than the U.S. for its military requirements. The present state of tensions in the area requires us to recognize that the aforementioned courses of action might prove inadequate to the achievement of our objectives. We should be prepared to deal with a contingency requiring a direct U.S. military action in opposing an aggressive act on the part of a party to the Arab-Israel dispute and rendering quick and effective assistance to the victims of such aggression. Our military planning and the disposition of our . forces in the area should take this possibility into account. We should maintain the offer of willingness, contained in the Secretary of State’s speech of August 26, 1955, to join in an international guarantee of agreed frontiers between Israel and the Arab states.

24. The presence of nearly a million refugees from the 1948 Palestine hostilities on the territory of the Arab states surrounding Israel serves as a constant reminder of the humiliating defeat the Arabs suffered at the hands of an Israel which received a large measure of support from the U.S. U.S. contributions to UNRWA have been the decisive factor in maintaining a relief, medical, and educational program for the refugees at a level which compares not unfavorably with standards extant among the indigenous populations of the host states. This U.S. contribution has gained us no popular credit with the Arabs; to the contrary, our assistance is dismissed as a wholly inadequate act of atonement. The Arabs demand the repatriation of the refugees, which Israel refuses, and efforts by the U.S. or UNRWA to improve the lot of the refugees have been largely unsuccessful, in view of this political obstacle.

25. The UNRWA mandate from the United Nations General Assembly expires on June 30, 1960. It is apparent that UNRWA will find increasing difficulty in financing its needs during the remainder of its existence. The U.S. should continue to contribute to UNRWA programs, subject to the present limitation that our contribution should not exceed 70 percent of the total. If UNRWA’s financial difficulties cause the curtailment of refugee programs in host countries friendly to us (e.g., Jordan and Lebanon), we should be prepared to assist those countries bilaterally. We should take no action to extend the mandate of UNRWA beyond 1960. To do so would give the impression both to the host countries and to Israel that the U.S. was prepared to carry this heavy burden indefinitely and in the absence of progress toward a permanent solution. We should begin now to study measures to be taken when UNRWA disappears. The least we should do is to seek that the United Nations investigate the situation thoroughly with a view to establishing a new agency with more realistic terms of reference. Consideration might be given to permitting the United Nations responsibility for the refugees to expire altogether, to be replaced by bilateral programs of assistance from friendly governments to be used in resettlement projects. We should continue to state that the offers concerning refugees set forth in the Secretary’s speech of August 26, 1955 remain valid (willingness to assist Israel in financing compensation, willingness to assist in projects aimed at rehabilitating the refugees either by resettlement in the Arab states, or, to such extent as may be feasible, repatriation). While, in present circumstances, we should avoid a U.S. initiative in the refugee problem, we should in appropriate circumstances encourage or even inspire an initiative by a third party. We should continue to make clear to the Israelis our view that they must in some way accept the principle of repatriation.

26. The Unified Plan for the Development of the Jordan River Basin (The “Johnston Plan”) which would provide inter alia a decent livelihood for well over 100,000 Jordanians and refugees gained technical acceptance by the Arab states and Israel as a result of brilliant and painstaking negotiations by Ambassador Eric Johnston during the period 1953–1955. The plan failed to receive political clearance by the Arab states. In view of the tense political situation in the area, it is not believed that clearance of the Unified Plan, as a whole, by the interested states could be achieved in the immediate future. This should not preclude study and perhaps action on elements of the plan which might be implemented in the hope that ultimately a number of seemingly isolated works could be linked together in a system covering the entire river basin, e.g., a diversion of the lower Yarmuk by Jordan into an East Ghor Canal.

27. Another source of friction is the avowed policy of Israel of encouraging unrestricted Jewish immigration. Arab apprehension over this policy springs from two basic causes: (a) increased Israel population makes more difficult the task of eventually liquidating Israel; (b) Israel’s resources are already inadequate to support the present population. The Arabs feel that a further influx will inevitably lead to Israel territorial expansion, despite any pretensions to the contrary which any present Israel Government may put forward. There is enough realism in the second of these concerns to give us pause. Israel firmly hopes to “rescue” the 2.5 million Jews now living in the Soviet orbit. The USSR has permitted a trickle of emigration from behind the Iron Curtain, apparently for the purpose of keeping this hope alive in Israel. [18 lines of source text not declassified]

28. A further source of friction lies in U.S. public and private economic assistance to Israel. The Arabs point out that total U.S. public assistance to Israel with a population of less than two million has approximated that given to the entire Arab world. An effort has been made to establish a pattern of declining U.S. Government aid to Israel, not only because of our policy of impartiality, but also in order to wean Israel away from dependence on the U.S. This effort should be continued and we should seek as quickly as possible to put public aid to Israel on a project basis, [1 line of source text not declassified] and encourage the Israelis to look to private capital investment as their primary source of external assistance. U.S. private assistance to Israel is also a point of friction with the Arabs who point out that the exemption from income tax which is accorded to U.S. contributions to the United Jewish Appeal makes these gifts an indirect additional subsidy from the U.S. Government. [9 lines of source text not declassified]

29. A further source of friction lies in the question of Israel use of the Suez Canal and passage through the Straits of Tiran. The Arabs oppose the former because they feel it enables Israel to avoid the full impact of the Arab boycott of Israel. Our own position supporting the Israel right to use the Canal is based on the Constantinople Convention of 1888 and the Security Council Resolution of 1951. At present, a tacit and probably fragile modus vivendi appears to be on the way to being worked out whereby Israel cargoes of “non-strategic” goods, as defined by the Egyptians (this does not include oil), are permitted transit through the Canal in third flag vessels.

30. The question of passage through the Gulf of Aqaba has taken on much more importance in recent months. With the occupation of the former Egyptian gun position at the Straits of Tiran by UNEF, there is no longer a physical means in the hands of the Arabs for obstructing passage of Israel or Israel-bound shipping. The majority of the world maritime powers, including the U.S., support the right of innocent passage through the Straits for ships of all nations, including Israel or Israel-bound shipping. In an Aide-Mémoire dated February 11, 1957, it was stated that “the United States believes that the Gulf comprehends international waters and that no nation has the right to prevent free and innocent passage in the Gulf and through the Straits giving access thereto ….² In the absence of some overriding decision to the contrary, as by the International Court of Justice, the U.S., on behalf of vessels of U.S. registry, is prepared to exercise the right of free and innocent passage and to join with others to secure general recognition of this right.” Since the Israel withdrawal from Sinai and the deployment of UNEF at the mouth of the Gulf, over a score of vessels, including U.S. ships, have called at the Israel Port of Eilat. The Israelis have constructed an eight inch oil pipeline from Eilat to Beersheba which connects with a sixteen inch line from Beersheba to the Mediterranean. So far, Israel has been able to purchase oil from Iran for delivery to Eilat. Israel naval forces in the Gulf consist of two frigates and three PT boats. These vessels have apparently been tied up for the past few months. The Israelis have made it clear, however, that any attempt to interfere with Israel-bound traffic through the Gulf will be met by force.

31. The principal protagonist of the Arab view that Israel should be excluded from the Gulf has become Saudi Arabia. King Saud maintains that this is a “life and death” matter for his country and that Israel use of the Gulf represents a “reward for aggression.” He has expressed concern at the presence of Israel warships so close to Saudi Arabia, and publicly declared that Israel’s presence in the Gulf threatens the security of a traditional route for Moslem pilgrims and the Moslem Holy Places themselves. He is also concerned at the economic implications of Israel’s use of the Gulf. First, it represents an Israel breakthrough of the Arab boycott. Secondly, it opens a prospect of Persian Gulf oil reaching the Mediterranean by means of a channel not in Arab hands. The King has reacted negatively to suggestions that Saudi Arabia take an initiative in this matter in the International Court of Justice. He believes that the U.S. has sufficient influence with Israel to force a return to the status quo ante in the Gulf. While there is as yet no evidence that the King will resort to force in an effort to eliminate Israel presence in the Gulf, it seems clear that the King’s attitude on this question will greatly influence many other aspects of U.S.-Saudi Arabian relations.

32. We have engaged in extensive discussions of the Gulf of Aqaba question with the Saudis over the past several months. Our objective in such discussions has been to persuade the Saudis that our position with respect to the freedom of passage through the Gulf need not jeopardize any legitimate Saudi interests. We have also sought to persuade the Saudis of the wisdom, if they continue to believe they must oppose the use of the Gulf by Israel-bound shipping, of seeking action in the International Court of Justice, perhaps through a request for an advisory opinion by the Security Council or the General Assembly. So far our efforts have not been successful. If this problem continues to fester, and it appears that a resort to force in the Gulf is imminent, we should seek to arrange an initiative in the United Nations to obtain a determination of the rights of the parties and the maritime community by the International Court of Justice. In the above circumstances, we may wish to suspend, pending the Court’s determination, our present policy of looking with favor upon transits through the Straits made without the permission of the littoral states.

[Numbered paragraph 33 (10 lines of source not) text declassified]

The East-West Conflict

34. The USSR appears committed to a course of action designed to achieve: first, a global recognition that the Soviet Union has a legitimate interest in the area and must be dealt with on that basis; secondly, sufficient influence to put the USSR in a position whereby it can effectively deny the oil resources of the area to the Western alliance; and finally, the complete removal of Western influence and the ultimate domination of the area by the USSR. It is believed that the USSR seeks to bring about these developments by means short of overt acts which would risk global war. At the same time, we must face up to the possibility that the USSR is so heavily engaging its prestige in the area, and is so recklessly in the pursuit of its objectives, that a combination of circumstances might arise which could bring about hostilities between Soviet or “volunteer” forces and the forces of the Free World, including the U.S.

35. The USSR is seeking an arrangement whereby it, on the one hand, and the U.S. and its allies on the other, would acknowledge and accommodate to each other’s interests in the area. For example, it would probably be possible to achieve a tacit working arrangement whereby, if the U.S. would suspend the military assistance provisions of the American Doctrine, cease supporting the Baghdad Pact, and make it clear that we would neither strengthen present military bases in the area nor seek additional ones, the USSR, for its part, would limit or forego arms deliveries to the states of the area. The overriding disadvantage to us of such an arrangement is obvious. We for our part would be committed to acquiescence in an irreversible trend toward the dissolution of any security system in the area. The Soviets, on the other [hand], would be in a position, once it became clear the Western security system was dead beyond any revival, to resume arms shipments at any time they chose. Meanwhile they would not have ceased working against us, and Near East governments friendly to us, by political means. The fact that those states in the area nearest the USSR are those which are the most concerned about the Communist threat (Turkey, Iran, Iraq, Pakistan) makes a territorial modus vivendi with the USSR impractical. Any line that were drawn would involve our consent to paramount Soviet influence among peoples most determined to resist it, and the weakening of the Northern barrier would gravely expose the states to the South. The consequent effect on other peoples in the area, who witnessed such a sell-out on our part, could again only favor the USSR.

36. It is therefore apparent that there is little we can do directly with the Soviet Union other than continue to make clear our determination to risk global war, if necessary, to prevent aggression in the area by a state controlled by international Communism, and to assist states in the area to defend their independence against indirect Communist aggression. The primary thrust of the Soviet effort has been in the fields of subversion, willingness to exploit intra-area conflicts, propaganda, and intimidation of the states of the area. Our efforts must be concentrated in the strengthening of resistance to Soviet efforts by the peoples of the area themselves. Of advantage to us is the fact that those states in the area which have shown themselves most disposed to accept Soviet influence are not contiguous to the Soviet Union. The issues involved in this area are so great however and the stakes are so high we would not wish to leave the impression that this study seeks to close the door firmly to the possibility of any conceivable understanding with the Soviet Union. Even if, in this remote contingency, some sort of an arrangement with the USSR could be worked out, a vigorous action program covering all other fields would still be required of us in order to maintain the United States position and influence in the area.

37. It is clear that none of the indigenous forces in the area defined for this study will be in a position to offer effective cooperation in a war against Soviet forces for the few years ahead in which we are interested. The primary objective of our military assistance programs, therefore, must be in strengthening internal security against Communist subversion or efforts to influence governments through civil disturbance. We should be prepared to go beyond this, and provide items of equipment not strictly necessary for internal security if the morale of the government and security forces of the country we are assisting so requires it. Some recognition should be taken of longer range plans for area defense. We should seek in all cases to limit our military assistance programs to the economic capacity of the receiving country to carry a military establishment. We cannot, however, in present circumstances, bind ourselves absolutely to this consideration. The maintenance of internal security in states of the area friendly to us, and the prevention of arms imbalances among area states so great as to tempt local aggression, are so important that we should be prepared, if necessary, to divert resources intended for other areas to this task. We must also be in a position to supply armed forces, on request, to assist local security forces in combating Communist-inspired revolutionary movements.

38. For a long time to come, the primary responsibility for defending the area against international Communism will rest with us. It is therefore essential that U.S. planning and military staffing patterns take this into account. The Department of Defense should carry out its plan for a coordinating mechanism in this field where presently various military branches and services, including CINCNELM, CINCEUR, USAF and JCS, have different and limited responsibilities for the Middle East, Our forces in the area should have at their disposal adequate resources [less than 1 line of source text not declassified]. Early completion of an agreed plan on political-military objectives and strategy for the area is essential. The plan would take into account the Defense Department’s study of the military implications of the Joint Resolution on the Middle East and the study by Frank Nash on the general problem of U.S. overseas bases.

39. The Baghdad Pact is a going concern. Its survival of the shock of the Suez invasion demonstrates that it has a certain resilience. The U.S. has been able to use it as a basis for stimulating needed regional economic development projects. We should continue to support the Baghdad Pact. We should not join it at this time. The added encouragement which would be given to Pact members by our joining would be greatly outweighed by the problems we would face in our relations with other states such as Israel and Saudi Arabia. We should encourage present Pact members to strengthen the Pact as it now is rather than seek new adherents to the Pact. We should participate actively in the work of the Economic Committee and the Counter Subversion Committee of the Pact. Our participation in the Military Committee will depend heavily on the development of our own plan for the defense of the area.

40. It is recognized that the measures discussed above, while absolutely essential to the protection of our interests in the area, are primarily of a negative and prophylactic character. The struggle between ourselves and the Soviet Union with regard to the Middle East will in all probability be carried on primarily as a battle for men’s minds. In such a context, the totality of our policies toward the area must constantly be appraised to determine whether what we are doing and what we stand for has sufficient appeal and dynamism. This is particularly true with respect to our attitudes toward Arab nationalist aspirations and Arab “nationalism.”

41. As noted above, the primary factors in the area favoring Arab “neutralism” have been the feeling that the Arabs can only gain in an East-West competition for their favor and a fear of the consequences which a third world war might bring to the area. We have attempted with regard to the former to make clear that the U.S. is unprepared to engage in a competition with the USSR, and that a strengthening of relations with the Soviet Union almost inevitably means a jeopardizing of relations with the U.S. We have endeavored to persuade the Arabs that the best way of preventing World War III anywhere in the world is for the free peoples to unite and maintain their strength.

42. We have not defined, on an area basis, with any precision the degree of Soviet presence and influence in a country which we would be prepared to tolerate. We felt, for example, that the degree of economic commitment to the Soviet bloc by Egypt resulting from the arms deals made it impossible for us to implement our offer to be of assistance on the Aswan Dam. We have viewed with grave concern the degree of Soviet presence and influence in Syria resulting from the recent arms and economic assistance deals. At the same time, we have viewed with relative equanimity trade agreements between such countries as Israel and Lebanon with Soviet bloc countries. These agreements have not resulted in a primary dependence on Soviet bloc markets. We have sought to prevent recognition of Communist China by the Arab states, but have not made it an issue in our relations with Israel which recognized Communist China in January, 1950. We have successfully counseled the Jordan Government of the dangers involved in the establishment of diplomatic relations with the USSR, applauded the decision of the Iraqis to sever such relations, but have not urged Lebanon to follow suit. We have indicated a willingness to offer economic aid to Yemen despite that country’s purchase of arms from the Soviet bloc and acceptance of bloc economic aid offers. The foregoing would appear to indicate that we have found it necessary to make decisions on an ad hoc country-by-country basis, in the light of circumstances prevailing at the time, and the basic attitude of the country concerned toward the Communists. It is not believed that it would be possible or useful in this study to attempt to define with any precision the degree of Soviet presence which we could tolerate, as there are subjective and local factors which must be taken into account in each case.

43. These considerations affect also a definition of a “neutralism” which would be acceptable to us. We have on more than one occasion expressed the view that we are prepared to deal with a “truly neutral” Egypt. We have pointed out to the Egyptians those aspects of the Egyptian-Soviet relationship, and other Egyptian actions which have, in our view, prevented Egyptian policy from being “truly neutral.” The lack of a constructive response to these comments by the Egyptians has not enabled us to pursue this matter in any detail with them.

44. It is obviously impossible to attempt to set down in advance a definitive description of what we would regard as “true neutralism.” There are a few rules of thumb, however, which might be worth considering in this study. We would probably not oppose the maintenance of diplomatic relations with the USSR and Soviet satellite countries (except East Germany) provided the Near East state concerned felt that it required such relations for prestige purposes and demonstrated an awareness of, and determination to deal with, potential subversive threats emanating from bloc missions. The question of relations with Communist China is more difficult but even here we might be prepared to tolerate such relations provided the Near East state concerned undertook to minimize these relations and to make no efforts to persuade other area states to establish them. The question of economic relations is largely one of degree. We have tolerated bilateral trade agreements with bloc countries when their impact on area trade patterns was not overly significant. We would probably have to go a bit farther than this with respect to a surplus commodity such as Egyptian cotton. A formula might be worked out whereby the West would be prepared to make a sympathetic effort to assist the Near East state in disposing of its surpluses, provided the Near East state undertook not to seek Communist markets for more than half of its annual crops. In the field of cultural relations, the Near East state should be prepared to make a serious effort to balance Communist bloc presentations with those from the Free World. The Near East state concerned would be expected to assure that its state-directed propaganda media would avoid slavish adherence to the Communist line. The most difficult area would probably be that of arms supplies and we would probably have to content ourselves with an arrangement whereby, over a period of years, total dependence on the Soviet bloc for arms, ammunition, and replacements was phased out. In this, as in other areas, much would depend on the willingness of the Near East state concerned to recognize the danger to its own independence from Communist agents, including bloc technicians, and a determination to deal with this threat.

45. A primary consideration in determining the possible conditions of a modus vivendi which could be reached with an Arab state on the basis of a mutual definition of “true neutralism” would be that under no circumstances could the total effect of our political commitments and economic and military assistance to such a state be greater than or even approximate that which we are doing for other area states which have had the courage and conviction to take positions clearly favoring the Free World.

Arab Nationalist Aspirations

46. The U.S. is unjustly accused of hampering Arab nationalist aspirations. The historical record going back to the middle of the nineteenth century indicates the significant and positive role which we have played in an emerging Arab nationalism. It is doubtful that such states as Syria, Lebanon and the Sudan would have achieved their complete independence as rapidly as they did had it not been for United States support. Furthermore, such public expressions of our attitude toward Arab unity as have been made, have been positive and favorable. We have in the past made clear that we would not look with disfavor upon the union of two or more Arab states provided this took place in accordance with the freely expressed wishes of the peoples directly concerned. In the specific instances where we have opposed schemes for “Arab Unity” (our sympathy with King Ibn Saud’s opposition to the King Abdullah–United Kingdom “greater Syria scheme”; our opposition to Nasser’s efforts to extend Egyptian hegemony by subversion) they have been clearly cases to which our publicly stated criteria did not apply. We have also made considerable efforts to prevail upon the Arabs to reduce trade barriers and to stimulate the flow of goods, persons and capital among their countries. We have offered technical assistance to the Arab League, as an entity, to facilitate this process. We stimulated consideration of a project for an Arab bank as a device for promoting the investment of oil revenues in “have not” Arab states. We supported the awarding of the status of observer to the Arab League at the United Nations.

47. It would be useful for us to examine how we could best use this clear historical record in our informational and other activities to demonstrate our acceptance of a peaceful evolution of the Arab world toward a unit or units of greater size, strength and potentiality based on the popular will. If we restate such a position, we should be better able to point out the true character of schemes which, while masquerading under the rallying cry of “Arab unity,” are merely the efforts of one despotic regime to expand its territory and influence at the expense of other peoples.

48. It is clear that a federation of Egypt and Syria under their present regimes, with the resulting increase in their capability to threaten Lebanon, Jordan and Saudi Arabia and Iraq and perhaps engulf them one-by-one would be contrary to our interests. There are, however, regional schemes which are not without attraction to us and which we should carefully consider. Among these are a strengthening of the ties among Saudi Arabia, Jordan and Iraq; the strengthening of relations between Iraq and a pro-Western Syria whereby Iraq would gain some kind of access to the Mediterranean; a strengthening of relations between the Sudan and Ethiopia; and, while not in the area of this study, the possibility of a North African Federation comprising Libya, Tunisia, Morocco and eventually an independent Algeria. [4 lines of source text not declassified]

Egypt

49. Our objectives are an Egypt prepared to maintain normal relations with Western countries; recognizing the threat to itself and to the area of international Communism and thus refraining from abetting its objectives; desisting from efforts to dominate the Middle East and devoting major attention to internal and economic problems. Among specific courses of action which suggest themselves are the maintenance of a situation which demonstrates that collaboration with the Soviet bloc in the military and economic spheres does not fulfill Egypt’s most basic requirements. We should continue to press for acceptable arrangements for the Suez Canal. Failing a change in the attitude of the Egyptian Government, we should persevere in efforts to isolate Egypt. We should, by appropriate means, make clear to the Arab world Egypt’s inherent economic and social weaknesses and growing incapability to exercise constructive leadership. We should continue to display an attitude of relative indifference to developments inside Egypt but be quick to identify and generate opposition to Egyptian efforts [less than 1 line of source text not declassified]. The U.S. should always remain ready to respond to the unexpected if Nasser’s future actions render invalid the present assessment, and to work for an understanding along the lines set forth in paragraph 44 above. However, the U.S. should be wary of being drawn into unilateral moves, and proceed on a quid pro quo basis insisting upon performance by Egypt which could be proven. We should urge our Western allies who may for compelling economic reasons seek an accommodation with Egypt to pursue a similar policy.

Syria

50. Our objective in the period immediately ahead must be to keep the present regime in Syria off balance and in the position of being an abnormality in the area. By so doing, we are in the best position to encourage the generation of pressures upon Syria by the other Arab states. We should keep both Syria and the Soviet Union on the defensive as to the depth of their collaboration. We should by every possible means make it abundantly clear to the Arab peoples as a whole, including the Syrians themselves, that the maintenance of the present regime in Syria not only threatens Syrian freedom and independence but endangers the entire area. We should maintain diplomatic relations with Syria throughout this period if it is possible to do so without risking humiliation. [2½ lines of source text not declassified]

Saudi Arabia

51. We should continue to seek to maintain the friendliest relations with King Saud and endeavor to persuade him to use his influence for objectives we seek within the Arab world. We should be careful not to overestimate the latter nor to expect Saud to take positions which on their face, at least, appear directly to oppose public protestations of “Arab unity.” We should, under appropriate circumstances, and with due respect for the sensitivities involved endeavor to make clear to Saud our belief that his own strength and, indeed, the future of his regime, depend very heavily on a program of judicious financial, economic and social reform. We should continue to permit the relationship between ARAMCO and the Saudi Government to remain on a purely commercial basis, intervening only when there is a clear threat to American interests. We should do our utmost to bring about a diminution of difference of opinion on the Gulf of Aqaba as an obstacle to good relations. We should seek to increase our influence and understanding among groups in Saudi Arabia from which elements of leadership may emerge, particularly in the armed forces and middle level of Saudi Arabian Government officials.

52. While it is clearly to our interests to promote the resumption and bettering of relations between Saudi Arabia and Great Britain, we should probably avoid undue haste. British-Saudi differences with respect to the Persian Gulf are deep-seated and our best course of action may well lie in continuing to exhort both sides to compose their differences without our becoming too deeply involved in the specific points of dispute. The British now indicate that they are prepared to move with the tide in permitting to the Gulf Shaikhdoms greater freedom of action in relations with neighboring Arab states. We should encourage this and, as opportunities arise, also encourage the gradual evolution of more modern political institutions in these Shaikhdoms. We should also strengthen our own representation in the Gulf area, through the completion of treaty negotiations with Muscat and the establishment of a Consulate in Muscat and, perhaps eventually, through the establishment of a Consulate in Bahrein. On the Buraimi issue, the most we can probably hope to accomplish is to persuade the British and the Saudis either to resume negotiations in some mutually acceptable context or to establish a neutral buffer area between their respective spheres of influence. Such negotiations might drag on interminably and might not themselves produce any progress, but the fact that they were going on might serve to encourage the restoration to normal of other aspects of the British-Saudi relationship.

Yemen

53. Our objectives in Yemen include: a government able effectively to govern the country as a whole, keeping law and order; permitting legitimate foreign participation in development in accordance with established international commercial practice; recognizing the threat of international Communism and prepared to phase out its present arrangements with the Soviet Union for arms, technical and economic assistance; prepared to maintain peace on the border with the Aden Protectorate and agree to a fair demarcation of the boundary; receptive to the influence of King Saud on Middle Eastern problems. The present Imam, while opportunistic, seems disposed to balance the trend toward relations with the Soviets by closer relations with the West. During this period, we should support the regime of the present Imam and seek to extend U.S. influence to the maximum extent possible. Our opportunities in a period of dynastic strife or under a regime headed by Crown Prince Badr might be less. Among possible courses of action are: remain aloof for the present from the internal political struggle; move carefully but rapidly to the formulation and implementation of a few high impact economic assistance projects; establish a resident representative in Yemen; encourage King Saud to take a more active part in Yemen affairs and assist him in establishing a useful degree of influence; support practical arrangements for the delineation of the boundary between Aden and Yemen.

Jordan

54. Our short term objective in Jordan must be to assure the continuing success of King Hussein’s actions to rid the country of Soviet-Syrian-Egyptian domination, and to maintain its true independence and integrity. It is recognized that from the long-term viewpoint, Jordan is viable neither economically nor politically. It should be similarly recognized, however, that under present circumstances it is impossible to conceive of a situation whereby Jordan could disappear without the risk of widespread bloodshed and a grave threat to our interests in the area. In the long term, we should be prepared to accept a merger or association of Jordan with one or more other Arab states so that it would form part of a viable political entity capable of resisting international Communism and other foreign pressures. [2 lines of source text not declassified] The U.S. initiative in this regard should be confined, for the present, to the strengthening of Saudi and Iraqi influence in Jordan. Israel has thus far acquiesced in efforts which have been made to this end and we should seek to assure the maintenance of this Israeli attitude. Our present short-term courses of action with respect to Jordan should be maintained. These include: the extension of economic aid for budgetary support and economic development; military assistance to the extent necessary to retain the loyalty of the Arab Army to the King and its capability to maintain internal security; [1 line of source text not declassified]; efforts to persuade Iraq and Saudi Arabia of the importance to their own interest of assisting Jordan politically and economically. In addition, we are urging the British to maintain economic development assistance for Jordan at previous levels.

Iraq

55. Our short-term objectives must include the maintenance of the present regime in Iraq. It is recognized that the present regime lacks widespread popular support and there are substantial elements in Iraq who deeply regret their enforced isolation from many of the trends affecting the rest of the Arab world. It should be equally recognized, however, that there are few elements among the opposition with whom we could work and that a change of regime or a period of chronic instability brought about by successful civil commotion could only greatly endanger our interests. It is felt that as the benefits of Iraq’s wise investment in economic development become apparent to evergrowing numbers of people, there will be an increasing interest in the maintenance of Iraqi independence and an increasing pride in Iraq’s growing strength. This trend is already discernible and should be encouraged. We do not feel that it is unrealistic over the long term to assume that a peaceful change from the present system of government to a more broadly-based, moderate, and progressive government can be achieved. Such a government could provide leadership to forces of constructive and progressive nationalism, based on complete independence throughout the Arab world. We should continue our present courses of action with respect to Iraq. These include: extension of military assistance to Iraq³ at a level calculated to strengthen internal security, maintain the morale, prestige, and loyalty of the Iraq Army, and permit Iraq to play a role, as a member of the Baghdad Pact, in the defense of the area; extension of technical assistance and guidance in the sound investment of Iraq’s oil revenues; fostering Iraqi cooperation with Saudi Arabia, Jordan, and Lebanon; and cooperation with the United Kingdom in military assistance to Iraq.

Lebanon

56. Lebanon has defied all known criteria with respect to political and economic viability and has emerged as the most prosperous (per capita) and advanced Arab state in the world. While internal pressures within Lebanon remain high, it is important that we recognize the degree to which Lebanese politicians will seize upon external issues for purposes of personal advancement. A great deal of the anti-Western and “pro-Arab” statements and actions emanate from a group of opposition leaders who are well aware of the importance to them personally of the maintenance of Lebanon’s independence and good relations with the West. For example, a large measure of the opposition outcry to the instrument of Lebanon’s adherence to the American Doctrine may well arise from a desire to prevent President Chamoun from obtaining a further term of office. In a country as small as Lebanon, with a political system based on ever shifting coalitions among established ethnic and religious groups, it is important that the U.S. maintain contact and influence among a large number of local leaders. It is also important, in planning U.S. programs for Lebanon, to recognize Lebanon’s position as a “show case” of close relations with the West and its role as a net exporter of such human resources as commercial acumen and professional skills to the rest of the Arab world. For example, economic assistance to Lebanon is difficult to justify on the basis of need, in view of Lebanon’s current prosperity. On the Other hand, however, a soundly conceived and well-executed development program in Lebanon has repercussions to the advantage of Arab-Western cooperation far beyond Lebanon’s borders. We should continue to extend military assistance to Lebanon at a level sufficient to permit the maintenance of internal security and to allow Lebanese forces to withstand the initial onslaught of an attack from Syria until outside help can arrive. We should quickly implement present plans to provide technical assistance for the strengthening of the police and gendarmérie. Economic and technical assistance should continue to be extended at approximately current levels. We should stress both within and outside the country the theme of Lebanon as a highly successful experiment in which many peoples of diverse religion and culture work together amicably and effectively for the advancement of their country. We should continue to support the American University of Beirut.

Sudan

57. Our objectives are a stable Sudan, oriented towards the West, free from effective influence by international Communism, uninvolved in Arab quarrels, and cooperating with other states in the Nile Valley, especially Ethiopia and Uganda, but eventually also Egypt, for the unified development of this river system. The Umma Party in the Sudan, which leads the present coalition, has demonstrated its determination to maintain Sudanese independence and its awareness of the threat from Egypt and international Communism. It is to our interest that the Umma Party and its close allies achieve a substantial victory in the forthcoming elections which are to be held in February, 1958. We should be prepared to be adequately responsive to requests for economic and technical assistance which may result from the forthcoming visit of an ICA mission to the Sudan. We should pay special attention to the problem of internal security and be prepared to consider a small program, if requested, directed at increasing the internal security capabilities of the Sudan Defense Force. We should encourage close Sudan-Ethiopian relations and endeavor to bring Uganda into this grouping. We should be in a position to take measures, in conjunction with our Western allies, to assure that Sudan will find a market in the Free World for the larger part, at least, of its exportable surplus of cotton.

Roles of Other Powers

58. Current British policies tacitly admit the change which has taken place with respect to the British position in the area—a trend which was accelerated by the abortive attack on Egypt. Diplomatic relations with Egypt, Syria, and Saudi Arabia remain severed. The British have voluntarily withdrawn militarily from Jordan and Libya. There is no longer evidence of a British compulsion to take initiatives in the area without consulting us, as was the case with the rupture of the Buraimi arbitration proceedings; the Eden Palestine speech of November, 1955; the Templer Mission which aimed to bring Jordan into the Baghdad Pact in December, 1955; and, of course, the Suez affair of 1956. While the British are the first to recognize that they no longer have a paramount position in the area, they are acutely aware of their dependence on Middle East petroleum to retain world power status and are determined to maintain for this reason their position in the Persian Gulf. The British also wish to keep their present influence with Iraq and the other Baghdad Pact powers. Our objectives with respect to the British in the area will no longer revolve around the usefulness per se of the maintenance of a British position in the area. Rather will they be conditioned by our very real interest in maintaining Britain as a strong and prosperous member of the Western alliance. We should be prepared to keep the United Kingdom currently informed and work with it through both overt and covert channels on area problems to the extent that this will in fact advance U.S. area objectives. We should continue to urge a settlement of the Buraimi and related boundary problems with Saudi Arabia, and of the Persian Gulf islands and sea bed question. We should support a continuing important British role in Iraq, but should not allow deference to British wishes to block the exercise of the measure of U.S. responsibility the situation demands, particularly in the military assistance sphere. We should encourage the United Kingdom to continue financial and other support for the Baghdad Pact.

59. France [1½ lines of source text not declassified]. The attack on Egypt, the ostentatious military assistance to Israel, and the Algerian problem, have embittered French relations with the Arab world. Except for North Africa, the French position has been almost totally destroyed and the same is likely to occur in North Africa in the absence of a prompt solution of the Algerian problem. Our objective with the French in the area covered by this study lies primarily in the field of public relations: [4 lines of source text not declassified]. We should keep the French generally informed of our policies, [1½ lines of source text not declassified]. We should also seek to encourage France to use its new-found influence with Israel on behalf of the common Western interest in the area.

60. A number of other powers have a deep interest in the area and have expressed a desire to consult with us with regard to it. Turkey is of course gravely concerned at developments in Syria and the growth of Soviet influence there. Turkey would like to see more Arab states join the Baghdad Pact. We should consult closely with the Turks but recognize that their ability to exert a great deal of day-to-day influence in the area is rather closely limited by Arab antipathy toward the Turks which goes back to the days of the Ottoman Empire and Arab disapproval of the rather close relations (primarily economic) between Turkey and Israel. Turkey’s greatest contribution to our objectives in the Near East will probably continue to be the fact that a strong Turkey lies athwart the land communications between the USSR and most of the Arab World. Iran’s contributions also will probably remain primarily geographical. The Iranians have cooperated with us in the area and their influence while not great has been constructive. Iran thus far has been able to turn away Arab pressure to cease sales of oil to Israel for delivery through the Gulf of Aqaba. India’s Nehru makes pious pronouncements from time to time with respect to the need for peace in the Near East but it is highly doubtful that India would accept the role of peacemaker between the Arabs and the Israelis. Nehru probably realizes that his assuming such a role would cost India what influence it has in the area and that the effort would probably not succeed. Pakistan seeks continually to extend its influence as a large Moslem nation into the Near East and has close and sometimes useful relations with Saudi Arabia and Iraq.

61. Italy constantly requests us to consult more with respect to Near East problems. The Italians seem primarily interested in obtaining U.S. recognition of them as a Mediterranean power. While the Italians are highly thought of throughout the area and enjoy good relations with all of the countries there, they have an exaggerated opinion of their influence nor are they in a position to devote much by way of resources. Italian connections with the Yemen are particularly helpful to the U.S. The Germans are without doubt the most popular of any of the Westerners with the Arabs. German goods and trading arrangements are highly regarded. Germany was able to turn away much of the Arab criticism arising from the reparations agreement with Israel by hinting in appropriate places that this agreement came about as a result of U.S. pressure on Germany. The German Federal Republic is willing to cooperate with us in the Near East. However, the Bonn government can be expected to devote most of its energies in this area to prevent Arab recognition of East Germany. We cannot, therefore, look to the Germans to take many risks. We should, however, urge them to grant credits for economic development to friendly Arab states. The Greeks presently are cultivating relations with the Arab states, particularly Egypt. The Greeks hope thus to be able better to protect the thousands of Greek residents in Egypt. They also seek to capitalize on the anti-Turkish feeling in the area and gain support for their desire to annex Cyprus. We cannot expect Greek influence in the area to be very useful to us so long as the Cyprus matter is unresolved.

Role of the United Nations

62. The United Nations has been seized of the Palestine question since before the emergence of the State of Israel. It is directly involved in the unresolved Arab-Israel problem in a number of ways. The United Nations Truce Supervision Organization maintains the ceasefire ordered by the Security Council in the summer of 1948 and provides the machinery for the implementation of the Armistice Agreements between Israel and its immediate Arab neighbors. The United Nations Relief and Works Agency for Palestine Refugees in the Near East provides relief and shelter for the nearly 1,000,000 refugees. The United Nations Palestine Conciliation Commission (of which the U.S., France and Turkey are members) was charged with carrying the parties of the dispute forward from the stage of Armistice Agreements to a general settlement. The efforts of PCC have been unsuccessful and the Commission is now almost moribund. It is, however, performing a useful function in that it is gathering and organizing data as to the ownership and value of property now in Israel which belonged to the Arab refugees. These data will be invaluable if ever a compensation plan can be carried out. Since 1956, a United Nations Emergency Force has been in the Near East. UNEF is presently stationed at the mouth of the Gulf of Aqaba and in the Gaza Strip. The Secretary General was charged by the Security Council in the Spring of 1956 with a mission to the area to bring about practical measures aimed at reducing border tensions.

63. The foregoing indicates how deeply involved the United Nations is in the area, to a degree where a Palestine settlement, without United Nations participation at some stage, would probably not take place. In the months immediately ahead our primary objective in the United Nations with respect to Palestine will probably be to maintain an atmosphere of moral pressure on the parties to work toward a settlement. A great deal will depend on how the United Nations acquits itself in its handling of the present Syrian complaint against Turkey. We should continue to support the UNTSO and to urge that Israel cooperate fully with it. We should continue to explore possibilities of an enlarged function for UNEF.

Economic Policies

64. The last year or so has seen the beginnings of the emergence of the U.S. Government as victor over its own procedures with respect to economic aid to the area. Through a judicious use of Sections 201 and 401 of the Mutual Security Act, and the broad authority contained in the Middle East Doctrine, we are beginning to achieve that degree of flexibility so necessary for the successful operation of our programs in the Near East. The Development Loan Fund should also prove a useful tool. It is difficult to forecast a decline in the total amount of aid to be extended to this area. The reduced allocations to Israel have been more than offset by increasing U.S. responsibilities in Jordan and Lebanon. Developments favorable to us in either Syria or Egypt would almost certainly involve substantial economic aid programs to those countries. If a Palestine settlement could be achieved, the U.S. would probably be looked to for contributions which could run into hundreds of millions of dollars. A major task before us will be to persuade the American people, at a time when sentiment for foreign aid is declining, of the importance to our interests of the maintenance of economic programs in the Near East.

65. We have made a clear record of our desire to assist in regional economic development projects. Some beginnings have been made with respect to the Baghdad Pact countries. Regional projects involving both Arab states and Israel are obviously not feasible. Regional projects involving only Arab states have been difficult to identify, in view of rivalries among the states themselves and their desire to assure their own internal economic development before cooperating with other countries. Another source of difficulty has been the fact that Syria has never signed an economic assistance agreement with us, economic aid to Egypt is now suspended, and the program in Saudi Arabia was terminated in 1954 to be resumed only this year and only with respect to assistance for the Port of Dammam and the construction of an air terminal at Dhahran. Despite these difficulties, we should continue to express our willingness to finance sound regional projects proposed by the states of the area. We are presently examining a proposal for a development bank for the area.

66. Our major economic interest in the area is, of course, oil. The most significant recent developments have probably been the breach of the 50–50 formula in Iran and the entry of a number of new companies showing interest in developing the oil of such regions as the off-shore areas of the Persian Gulf and territory in Saudi Arabia which ARAMCO is relinquishing in accordance with its concession agreement. We can expect to see continuing pressure on the oil companies from the governments in the area for higher revenues. In Saudi Arabia the pressure on ARAMCO is in the direction of an integrated company responsible not only for production but for transportation and marketing as well; the Saudis are undoubtedly looking toward the distant day when they will take over the company. It may well be that the present trend will continue until arrangements are found whereby title to the oil produced remains in the hands of the country from which it is extracted; with the foreign concessionary companies operating on the basis of management and market contracts. The consortium arrangement in Iran may point the way to this type of relationship throughout the area.

67. The arrangements for transporting oil out of the area will also be under heavy pressure for upward revisions of the share of the local governments through which the facilities pass. The pipelines furthermore live under the risk of disruption at the hands of an unfriendly government, particularly Syria. While Nasser seems presently committed to a policy designed to demonstrate to the world that he is capable of operating the Suez Canal on an equitable and efficient basis, this attitude may well wear off as economic pressures within Egypt mount. It would appear that safety and dependability for the export facilities of oil from the area lie primarily in the diversification of those facilities. It is noted that the petroleum industry is losing interest in an alternative pipeline through Turkey. If the Qum oil field should prove out, perhaps Iran and Turkey will come to an arrangement of their own. The Iraqis should be encouraged in their plans to link by pipeline their northern oil fields with the Persian Gulf and to establish an offshore loading port near Basra. While we should not publicly oppose the diversion of the presently unused Haifa pipeline through Syria to a Lebanese port on the Mediterranean, this development would simply increase the number of facilities available only on Syrian sufferance and may be of doubtful economic value, in view of the condition and size of the long-unused line. With the linking of Iraqi fields to the Persian Gulf and the completion of the tanker fleet presently in the shipyards or on the drawing boards, the West should be in a much stronger position. There will be competing countries anxious to dispose of their oil and a number of alternative transportation facilities equally anxious for employment. We should maintain pressure on Egypt to make a more adequate international commitment with respect to the operation of the Canal. We should give diplomatic support, as required, to the pipeline companies in their discussions with the governments through whose territory the facilities run.

68. One of the principal problems faced by the countries in the area is that of disposing of their agricultural surpluses. Egyptian and Sudanese cotton are particularly difficult to dispose of in Free World markets. From time to time, surpluses arise in such commodities as Lebanese apples and Jordan and Syrian cereals. The USSR has been quick to exploit these surpluses and to offer to purchase them at what appear to be higher prices than those available in Free World markets. While this is a highly difficult problem for us, in view of U.S. cotton surplus and the domestic political importance attached to cotton, there are a few courses of action which merit detailed study. First of all, we could examine how the Western World as a whole, particularly the NATO countries, might best work together to provide markets for critical surpluses. Secondly, in the field of cotton, we might give intensive study to the possibilities of an international cotton agreement. Finally, we should give consideration to a plan whereby the U.S. and perhaps its Western allies would be in a position to effect pre-emptive purchases, if necessary, of surplus agricultural commodities, including cotton.

Two other matters deserve mention at this point. The developing, largely politically oriented, labor organizations in the Near East should be recognized as potent psychological weapons. Many of the unions are now largely uncommitted or are veering toward Communist control. Every effort should be made to encourage their Western orientation and establishment on sound, practical economic (rather than political) lines. Our programs of bringing more labor grantees to the U.S.⁴ Although civil aviation matters are dealt with in other NSC and OCB documents, note should be taken of the increased capacity of the USSR to put competing civil aircraft into the air.

69. Psychological and political programs carefully adapted to the attitudes and conditions in the area and designed to reach groups considered politically important and influential should:

a. Further and explain U.S. policies and objectives, stressing:

(1) U.S. interest in freedom and independence of Middle East nations.

(2) U.S. belief [that] regional problems are primarily concern of nations in area.

(3) U.S. support for freely-chosen closer unity among Arab nations.

(4) Traditional U.S. support for nationalist aspirations of peoples.

(5) U.S. support for United Nations.

(6) U.S. desire to contribute to economic strength of nations in area.

b. Recognizing the generally [less than 1 line of source text not declassified] ineffective character of indigenous information media in the Arab world, seek to create a climate favorable to the U.S. through the maximum encouragement of effective direct relations between U.S. citizens and peoples of the area through exchange of persons, technical assistance programs, and the stimulation of private U.S. activities in the area.

[Heading and numbered paragraph 70 (2 lines of source text) not declassified]

1. Source: Department of State, S/P–NSC Files: Lot 61 D 167, NSC 5801 File. Top Secret. A memorandum from Boggs to the National Security Council Planning Board transmitting the Staff Study for discussion at the Planning Board’s meeting of November 5 and a table of contents are not printed.
2. Ellipsis in the source text.
3. See Annex on “US–UK Memorandum of Understanding on US Military Assistance to Iraq”. [Footnote in the source text. The Annex is not printed.]
4. The handwritten words “should be expanded” appear at this point in another copy of this paper in Department of State, Central Files, 611.80/10–3057.