Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

174. Telegram From the Embassy in Iran to the Department of State¹

Tehran, August 21, 1966, 1035Z.

791. Military Sales to Iran.

1. Expressing gratification over constructive progress re military sales made during talk which Hoopes and I had with him at Caspian (Embassy 634),² I told Shah morning 21st that Washington proceeding with follow-up actions. It is our hope, I said, to have preliminary studies completed so that USG team can come out in second or third week of September to help negotiate details of FY67 tranche.

2. Calling attention to GOI’s concurrence in amendment of 1964 Memorandum of Understanding (Embassy 777),³ Shah also expressed satisfaction that our military relationship moving in more normal course. He noted, as he had via Aram (Embassy 763),⁴ that Soviets have suddenly become “enthusiastic” to sell arms to Iran. He wanted to assure us, however, that what he had indicated at Nowshahr remains valid. Specifically, Shah said he has made decision not to buy any SAMs from Soviets. He noted that he had earlier suggested isolating SAM contingents from American sophisticated equipment. Now, however, he could assure us he would not buy any Soviet SAMs at all.

3. Asked re Soviet military reps’ prospective visit to Tehran, Shah said it is not clear at this point whether Soviet team would arrive before his departure for European visits September 1 or after his return circa Sept. 20 or 21. As he had to [line(s) missing from the source text] Hoopes and me, Shah indicated possibility purchasing minor non-sensitive items like Ack Ack, trucks or personnel carriers. He reiterated what he had told us at Caspian that he would “never” have Soviet military advisors.

4. Shah said there seems to be some doubt in USG’s mind re necessity of any kind of SAM weaponry, whether Soviet or American (Hawks). We reviewed what Hoopes had explained re cost effectiveness and that instead of investing large sums in anti-aircraft missilery it might be better to base air defense plan primarily on warning system and aircraft.

5. Shah said he been giving this matter much thought, particularly as it would affect vital and highly vulnerable Kharg Island oil installations. Choice, he indicated, boils down whether to invest $25,000,000 in one Hawk battalion (he aware that it could be funded with holding payment of $9,000,000, for black boxes, in FY67 tranche) or purchase additional F–5 squadron at $15,000,000 which would be based at Bushire and would be equipped with Sparrow missiles. He asked that DOD experts provide soundest advice possible re this choice.

6. After discussion number of other subjects, discussion returned to arms procurement and Shah again gave categoric assurances that he would buy no Soviet SAMs. I said this welcome news for as he knew purchase of any major sophisticated sensitive weaponry from Soviets would be incompatible with U.S. sale of F–4. Shah expressed gratification that circumstances have developed so as to permit him to rely on traditional US supply of sophisticated equipment. He recalled how from start he anxious maintain maximum U.S. procurement and that in any case air force should remain completely American oriented. Although again mentioning that F–4’s “very expensive,” Shah gratified to be able purchase such high quality aircraft.

7. Comment: Undoubtedly due to Aram’s spadework (Embassy 763) Shah knew precisely two key issues of moment. Although Shah asked that we consider his commitment to us as confidential, his assurances re non-purchase of Soviet sophisticated equipment and specifically SAMs were categoric and explicit. Re Hawks, his request for advice re defense of Kharg strikes us as intelligent and worthy of prompt and honest Washington response.

8. DCM Thacher accompanied me. Shah was told that if during my absence any significant problems arise Thacher and General Jablonsky well equipped to handle them. Shah agreed avail himself their assistance if necessary.

Meyer

1. Source: Department of State, Central Files, DEF 19–8 US–IRAN. Secret; Priority; Limdis. Repeated to CINCSTRIKE/USCINCMEAFSA and Moscow.
2. See footnote 2, Document 172.
3. Dated August 20. (Department of State, Central Files, DEF 19–8 U.S.-IRAN)
4. Dated August 19. (Ibid.)