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[Page 494]

177. Memorandum Prepared in the Office of National Estimates, Central Intelligence Agency1


  • The Situation in Iran

1. The almost three-week-old political crisis precipitated by Mossadeq’s attack on the Shah’s position and his subsequent effort to force the monarch into exile has now died down in intensity but is still unresolved. Mossadeq retains control of the government and has steadily consolidated his position. However, some disorder continues, the Shah and other opposition elements have not yet made their peace with Mossadeq, and the Majlis has still to act on a proposed vote of confidence in him.

2. The present position of the various elements in the political picture is as follows:

a. Mossadeq retains a predominant position. He has consolidated his grip on the reins of government, retained the support of the hard-core National Movement deputies, won over such small right-wing groups as the Pan-Iran and Somka parties, and successfully rallied popular street support. Although he suggested last week that he might be willing to forego a Majlis vote of confidence (pointing out that even the opposition resolution called for his retention) he has not finally committed himself and will presumably take advantage of any sign of opposition weakening.

b. The opposition has lost ground and energy and, for the most part, appears content to accept a compromise by which the Shah and Mossadeq would both remain.

(1) Kashani and other right-wing dissidents—Baghai, the bazaar merchants, the mullahs—have done little since the rioting of 28 February which resulted in the Shah’s decision not to leave Iran. Although pro-Kashani deputies have blocked a vote of confidence by absenting themselves from the Majlis and some religious extremists are still fulminating against Mossadeq and his circle, Kashani has stated that Mossadeq as well as the Shah should remain and is reportedly now “sulking in his tent.”

(2) The pro-Shah element2 in the army and air force, which also participated in the 28 February riots, has been greatly weakened by the arrests [Page 495]and transfers which Mossadeq subsequently carried out. Although a new military plot was rumored over this last weekend, allegedly involving the armored brigade in Tehran, it is unconfirmed. One of its supposed leaders has since been assigned to a south Iran post.

(3) The old-line politicians, with leaders like General Zahedi and Ali Mansour under arrest, have participated in the boycott of the Majlis sessions but have otherwise been quiescent.

c. The Shah has continued in a state of nervous indecision. He has apparently given some covert encouragement to advocates of strong action to overthrow Mossadeq but has taken no positive action himself and evidently would be quite content with a settlement allowing him to remain in peace. He may still decide to leave Iran.

d. The tribes have played little part in the crisis. The fiercely anti-Palace Qashqai leaders have continued to support Mossadeq. While some Bahktiari leaders are still at odds with the government, there is no evidence that they have attempted to capitalize on Mossadeq’s current troubles. Other tribes, including the Kurds, have been quiet.

a. The Tudeh Party has attempted to capitalize on the situation by joining or sponsoring pro-Mossadeq anti-Shah demonstrations. However, it has generally been physically rebuffed by both the police and Mossadeq’s followers and has gained little more than experience and some propaganda effect.

3. Although the political outlook remains uncertain, the probabilities appear to be as follows:

a. With respect to the immediate crisis:

(1) It is extremely unlikely that the opposition will successfully rally to unseat Mossadeq at this late stage. Such a development would almost certainly require army participation, which is improbable now that Mossadeq’s principal military opponents have been dismissed or sent to pounding beats in the hinterland.

(2) There is still some possibility that the Shah might leave Iran, on his own initiative or under pressure from Mossadeq.

(3) It appears most probable, however, that the crisis will end in some sort of compromise whereby the Palace would be weakened but not destroyed as a political influence in Iran.

b. Even if Mossadeq succeeds in expelling the Shah, powerful opposition elements will remain, and new efforts to reassert his leadership will be required from time to time. Mossadeq is unlikely to make great progress in consolidating his control, and the regime as a whole will thus be weaker than ever.

c. Tudeh has gained little immediate advantage from the present crisis but may be able to capitalize on a future crisis, particularly if Mossadeq resorts to violent attacks on the US.

4. An important corollary question is that of the oil negotiations and Mossadeq’s attitude toward the US. Briefly, the record has been as follows:

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a. Following presentation of the package deal proposals on 15 January, Mossadeq raised a host of major and minor objections, finally urging that impartial adjudication of claims be dropped in favor of a directly negotiated lump sum settlement, thus protecting Iran against being saddled with an “unending burden.” After much consultation between the US and UK, a new and “final” set of proposals was prepared. These included concessions to Mossadeq on many minor points and provided an alternate mechanism for limiting Iranian payments to 20 years, but they preserved the concept of impartial adjudication and terms of reference which enabled AIOC to claim future profits. Henderson presented these proposals on 20 February, just after the political crisis started.

b. Mossadeq appears to be on the verge of rejecting these proposals. He immediately pointed to the compensation terms of reference as grounds for rejection and attempted to have them drastically changed. Meanwhile he has been attempting to find out from the UK, through the Swiss Legation, the amount of AIOC’s claims. On 9 March he told Henderson that the oil talks should be abandoned3 but phoned later to say that he had spoken prematurely and would consult the cabinet before making a final decision. There the matter rests.

c. Mossadeq’s recent talks with Henderson have involved some recriminations against the US. Last week the Mossadeq faction was openly charging Henderson with meddling in Iranian affairs for urging the Shah not to leave the country, though Mossadeq finally consented to accept Henderson’s protestations of good faith. Apparently in response to Soviet pressure, Mossadeq has called for withdrawal of TCI personnel from the Caspian area. In discussing the oil question, he has repeatedly asserted that the US would buy oil from Iran even without a compensation agreement if it really had Iran’s best interests at heart and has reiterated his old contention that the US was bound to provide financial aid to Iran to prevent it from going Communist.

5. Mossadeq faces a difficult decision. His instincts tell him to reject the present oil proposals. Yet rejection of the oil proposals will subject Iran to a further period of economic uncertainty and increase general pessimism and criticism of his leadership in Iran. He is probably also angry with the US for its role in the oil talks and its support of the Shah. Yet open defiance of the US would deprive Iran of an important counterweight against Soviet pressure and a potential source of financial help. In the end, he will probably reject the oil proposals but stop short of a direct rebuff to the US, hoping that a successful oil formula may [Page 497]somehow be worked out or that the US may finally be persuaded to come to Iran’s assistance.

R.L. Hewitt
  1. Source: Central Intelligence Agency, DDI Files, Job 79T00937A, Box 2, Folder 2, Staff Memoranda—1953 (Substantive). Top Secret; Security Information.
  2. An unknown hand wrote “faction” above this word.
  3. An apparent reference to a March 9 conversation Henderson had with Mosadeq and reported on in telegram 3605, March 9. See footnote 3, Document 176.