974.5301/7–251: Telegram
The United States Representative at the United Nations (Austin) to the Department of State 1
3. Re Suez Canal dispute. Referring to info received this morning from UKDel (Usun 2, July 2),2 to effect that London may have had in mind for some time bringing up Suez Canal matter in SC, we submit for Dept’s consideration following objections to this course, at least for time being:
- 1.
- To put public pressure on Egyptians would tend to freeze their intransigence rather than increase possibility of getting alleviation of restrictions.
- 2.
- In turn our own interests and those of our close friends might be further damaged. In this connection Balluseck (Netherlands) indicated that because of Dutch shipping, aviation and other interests (he mentioned favorable balance of payments with Egypt) he thought his govt would be quite reluctant to press Egyptians unduly.
- 3.
- To air our dispute with Egyptians in SC would tend further to damage our general position with them as well as with their Arab neighbors. Arab stated might well be expected to claim that once again USG was endeavoring to pull Israeli chestnuts out of fire.
- 4.
- To air this dispute in SC would inevitably bring once more to the fore all of the bitterness between Arab states and Israel over Palestine already sharpened by Huleh dispute.
- 5.
- Egyptians would undoubtedly air publicly and probably bitterly their differences with UK concerning revision of UK-Egyptian treaty involving not only Suez but also Sudan.
- 6.
- At present touchy stage of Iranian question it would not seem wise to precipitate in SC debate on Suez restrictions.
For these reasons we are strongly inclined to recommend that Dept ascertain whether in fact UK seriously considers bringing up Suez question and if so attempt to dissuade them.
It would seem to us that in present circumstances most effective means of securing alleviation sought would be continued diplomatic effort in close concert, if not jointly, with govts most closely affected. Presumably diplomatic effort would be strengthened at least over a period of time and economic hardship suffered by Israel alleviated by extent to which operations of Haifa refinery could be stepped up by imports from sources not dependent on canal. Lourie informed us on Friday that while at one time Haifa refinery had ceased operation entirely, it was now operating at about 20 percent of capacity on basis of oil imported from Venezuela.