Foreign Relations of the United States, 1964–1968, Volume XIX, Arab-Israeli Crisis and War, 1967

404. Memorandum of Conversation¹

Washington, August 2, 1967.

SUBJECT

• Talks with Egyptians

PARTICIPANTS

• Mr. Walter McDonald, Pan American Oil Company
• Lucius D. Battle, Assistant Secretary, NEA

1. I had a lengthy lunch today with Mr. Walter McDonald of Standard Oil of Indiana of which Pan American Oil is a subsidiary. I have known Mr. McDonald for about three years. During the time that I was in Cairo, he was a frequent visitor in connection with the oil finds of Pan American. He is on excellent terms with senior officials in the UAR Government. Mr. McDonald has just returned from the UAR and has seen a number of the top officials of the Government. He informs me that these officials and a number of private individuals with whom he talked convey the following impressions:

(a) Nasser has had it. The UAR is, however, better off with him for a few months than without him. If he goes now, there will be chaos and serious inroads by the communists. He must stay until some real plan exists for a governmental structure without him.

(b) The pro-Western elements in the country all believe that there must be a clear sign that the West will still deal with the UAR. This signal must come very soon or the absence of an alternative will drive the UAR completely into communist hands as the pro-Western elements will give up any hope of restraining the situation.

(c) There is general despondency throughout the country, particularly over the economic situation which is acutely serious.

(d) The desire of the USSR for an air base in Yemen and a naval base either in the UAR or in the Red Sea area is widely discussed.

2. Mr. McDonald said that he had been asked by Vice President Mohieddin, Mahmud Younis, and Aziz Sidki (former Ministry of the Treasury) to convey the following to me and through me to the U.S. Government.

(a) Either Zakaria Mohieddin or a senior representative of the UAR would like to come to the U.S. in the very near future. If Mohieddin comes, he would have to be received by the President or the Vice President. While he would not expect any aid, he could not go back to Cairo empty handed politically. The object of his trip would be to give evidence of an alternative relationship with the West to the only relationship apparent now; i.e., Russia.

(b) If the Israelis will withdraw 25 miles from the Suez Canal, the UAR will begin work immediately on clearing the Canal. While the UAR will not agree to Israeli shipping transiting the Suez Canal, it will publicly agree to the Straits of Tiran being open to Israeli shipping.

(c) The Israelis might be able to accept such an arrangement as a concession to world commerce with the possibility that the Suez might in time be open to them even though not initially.

(d) Time is of the essence if the remaining pro-Western elements in the country are not to give up any hope of Western help. While these elements all recognize that Nasser is a major stumbling block, they prefer to have him in office temporarily to having the alternatives available. While no one will suggest that a plot is underway against Nasser, almost all pro-Western elements refer to the need for a leader who reflects the changing times. While Nasser served his purpose as a revolutionary leader, that need is finished and he will ultimately have to be replaced.

(e) Most of the pro-Western or non-aligned elements are aware of the fact that the U.S. cannot grant government aid directly. They hope for an IMF agreement, rollover of credits, private business activity, etc. sufficient to keep them going until ties with the U.S. can be reestablished.

(f) Somewhat inconsistent with the view that the Russians are waiting to take over is the fact that they appear to have told the Government of the UAR that the Russians can give only token food assistance.

(g) The message regarding the visit of Mohieddin or another senior representative is a serious message, the reply to which is to be passed through the Pan American representative in Cairo as soon as possible.

1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL UAR/US. Top Secret; Nodis. Drafted by Battle on August 3. Rusk’s initials with a line drawn through them appear on the memorandum indicating that he read it; and a note on the memorandum states that Battle had reported the conversation briefly at the staff meeting the previous day. Saunders sent a copy to Bundy with an attached note stating that Battle regarded this “as more serious than other feelers, but still doesn’t think it comes from Nasser.” Since Battle “doesn’t think we can offer much” he was not eager to talk, but Eugene Rostow had sent a memorandum to Rusk recommending an expression of willingness to talk in Geneva. (Johnson Library, National Security File, NSC Special Committee Files, Whirlwind)