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

119. Memorandum From the Assistant Secretary of Defense for International Security Affairs (McNaughton) to Secretary of Defense McNamara¹

I–21036/66

Washington, February 16, 1966.

SUBJECT

• Military Survey for Iran

I. Problem:

The Shah of Iran has become increasingly concerned over what he views as a mounting Arab threat to Iran’s security. We have accordingly agreed, after several months of discussion, to conduct a survey of Iranian military requirements against the non-Soviet threat. The Survey Team will arrive in Iran on 16 February.

The Survey Team’s Terms of Reference direct that all recommendations be in full consonance with the U.S. objective of maintaining our position as primary arms supplier to Iran, while limiting equipment purchases to legitimate requirements and minimizing the impact on Iran’s economic and social development. The Team does require, however, supplemental guidance as to specific items of U.S. equipment it can consider in formulating a response to Iran.

II. Discussion:

As you will recall, the 1964 U.S.-Iranian Memorandum of Understanding called for Iran to purchase two squadrons of F–5 interceptors during the late 1960s to supplement the seven squadrons provided by MAP grant aid. Soon after the agreement was signed, the Shah informed us that the introduction of Soviet-built MIG–21 aircraft into neighboring Arab countries, particularly Iraq, made it “imperative” for him to buy a higher performance aircraft than the F–5. In this context he has mentioned an improved F–5, the F–4 or the F–111 as possible substitutes.

In a study of Iran’s air defense requirements prepared for ISA last fall, the Joint Chiefs of Staff indicated their belief that Iran had a genuine need for a higher performance aircraft than the F–5 and recommended that the U.S. sell the Iranians two squadrons (UE–13) of F–4s in the 1967–1973 time frame.

Another of the Shah’s felt needs is an anti-aircraft system to defend key air bases and oil installations in western and southwestern Iran. The Shah deferred his decision on choice of weapons pending a U.S. decision on what we intended to procure for U.S. forces. When informed in December that the U.S. had chosen the gun (Vulcan)/Chaparral mix, the Shah expressed interest in procuring the system, providing that price and availability were reasonable. Although I understand U.S. requirements are expected to saturate Vulcan and Chaparral production capacity until FY 70, it might become politically desirable to be prepared to offer Iran one or two battalions from current production before U.S. requirements for 22 battalions are fully satisfied in 1970.

The Shah also wants a tank to replace the M–47s now in inventory, and expressed keen interest in the Sheridan during last year’s Annual Review of the 1964 agreement. Army production of the Sheridan is scheduled to peak at 50 a month in FY 68 and a phased delivery to Iran, beginning in the last half of CY 68, could be worked into the Army’s production schedule.

In the naval area, the Shah believes he needs destroyer types to meet the threat to his oil installations in the Persian Gulf area, and an Iranian purchase team recently visited Western Europe to secure price and availability data on various equipment items, including new-construction destroyers.

In general we believe the Shah exaggerates the non-Soviet threat to Iran, and would like to discourage his purchase of highly sophisticated weaponry. We concede that Iranian air defenses in the southwest could be strengthened and a follow-on tank deserves consideration, but we regard the Persian Gulf naval threat as minimal. On the other hand, the Shah has purchasing power and a determination to modernize his forces, so our continued political relations depend on a moderately forthcoming response.

III. Recommendations:

That you authorize the U.S. Survey Team, Iran, in assessing Iranian requirements, to consider the following U.S. materiel for possible sale to Iran. This authorization would be for planning purposes only.² The findings of the Survey Team will be subject to a careful interagency review before a commitment is made.

1. Sale from new production of up to two squadrons (U/E, 13 each) of F–4 aircraft, in lieu of two F–5 squadrons, for delivery in approximately CY 70.³

2. Sale of up to two squadrons of F–5C aircraft, in lieu of F–5A/Bs, for delivery in CY 1968.⁴

3. Sale of the sanitized Sparrow (AIM–7–N).

4. Sale from new production of up to two battalions of Gun/Chaparral for phased delivery between CYs 68–70.

5. Sale from new production of up to 150 Sheridan tanks, with Shillelagh missiles, for phased delivery between CYs 68–70.⁵

6. Sale from new construction of one DE or DD-type ship (Hull class DD, Dealy Class DE, DEG or DDG) for delivery in CY 70–71.⁶

John T. McNaughton

1. Source: Washington National Records Center, RG 330, OSD Files: FRC 70 N 6648, 381 IRAN 16 Feb 1966. Secret. A stamped note on the margin of the source text reads “Mr. McNaughton has seen.”
2. The words “for planning purposes only” are underlined and initialed by McNamara.
3. McNamara initialed his approval of this recommendation on February 19 and added “reluctantly & for planning only.”
4. McNamara initialed his approval of recommendations 2, 3, and 4.
5. McNamara initialed his approval of this recommendation and added “or earlier if he wishes.”
6. McNamara initialed his disapproval of this recommendation.