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

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

Tehran, May 4, 1966, 1000Z.

1485. Iran Military Purchasing. Ref Deptel 1094.²

1. Peterson Report handed to Shah morning 4th. Meanwhile General Jablonsky has made it available to General Aryana.

2. Without discussing report itself, I conveyed to Shah key points of reftel. I pointed out augmentation recommended by Peterson estimated total $308 million, although there some possibility shaving few dollars here and there via routes suggested in reftel. Shah said while Iran might not require equipment of too much sophistication, as far as spare parts, training and usage concerned he could not treat his military personnel with less care than US treats its military personnel.

3. Pointing out USG desires maintain total ceiling of $400 million ($200 million envisaged in 1964 Memo of Understanding plus $200 million authorized last fall by Iran Parliament), I noted that some items would have to be deferred but Shah would have discretion in determining mix of US-approved items. Shah said he has no intention of spending dollar more than is necessary, but he cannot “play with fate” of his country. Once again he called attention to billions of dollars of wealth in southern Iran and said it would be foolish to risk its loss for few million dollars. He considers these expenditures as “insurance.” In this connection, he said “recent developments” (Nasser’s threats against territory of Saudi Arabia) prove that his concern is not idle and that possibility cannot be ruled out that Nasser’s influence will reach Persian Gulf area. I, as usual, expressed view he is overestimating imminence and nature of such danger.

4. Later in discussion, Shah said he has report that Turks are seeking $2,000 million in new military assistance from US, including 3,000 tanks, I expressed doubt. Comment: In Shah’s mind there is obviously contrast re what USG providing Turkey via grant as over against much lesser amount we willing to permit his more opulent country to buy. PriMin yesterday also asked me re Turk aid, noting GOI has received report from its Embassy Washington giving various military aid figures deduced from Congressional reports.

5. Shah concluded conversation by expressing hope USG will realize importance of “solidifyingquot; its relations with those countries who still want close and friendly ties with us. I assured him it remains our desire to have healthy relationship with Iran, noting, however, at same time that America is bearing heavy burdens notably Viet-Nam which sometimes limit what we are able to do elsewhere.

6. Comment: Audience was short one for until Shah has had opportunity to study Peterson Report I saw no purpose in getting into details or going beyond general observations set forth in reftel. Shah agreed we would discuss specifics during annual review exercise following my return from Washington.³

Meyer

1. Source: Department of State, Central Files, DEF 19–8 US–IRAN. Secret. Repeated to CINCSTRIKE/USCINCMEAFSA.
2. Document 133.
3. In telegram 1500 from Tehran, May 6, Meyer reported that the Shah’s initial reaction to the Peterson Report centered on two points: 1) queries regarding the price of each item in the proposed program; and 2) the need for expediting and increasing the number of all-weather high performance aircraft. (Department of State, Central Files, DEF 19–8 U.S.-IRAN)