Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1955, Volume XIV

276. Telegram From the Department of State to the Embassy in Egypt¹

Washington,September 15, 1955—6:54 p.m.

515.Embtels 440, 441, 442.² Dept agrees with you on interrelationship US area policies and Alpha tactics. Your talks with Fawzi have helped clarify possible steps to relate them in concrete terms. Our policies in support of northern tier have been set forth both publicly and privately to various govts (e.g.,Deptel 107³). We cannot change these policies. Pakistan’s adherence to Baghdad Pact expected momentarily. We would welcome adherence Iran but believe this unlikely occur near future. While we do not envisage adherence additional Arab states at this time, we could not assist in any program which would isolate Iraq from rest of Arab states. Also we could not give our support to grouping involving states bordering on Israel in absence substantial progress toward Arab-Israel settlement. However, can envisage rear area grouping complementing and supporting, not rivaling, northern tier and not precluding eventual adherence other Arab states to Baghdad Pact. This underscores importance movement on Alpha.

We have been exploring possibilities assisting Nasser finance arms purchases and find severe practical difficulties irrespective policy considerations. Acceptance local currency in magnitude $10 million apparently would require programming current econ assistance funds so as create requirement this amount of pounds. In effect Egypt would lose in econ assistance dollars what it gains in military assistance dollars. We see no prospects for other immediate large-scale requirement for pounds. Extension of credit under Section 106⁴ requires use of service funds and would involve repayment in dollars with interest. We recognize disadvantages delaying answer to Nasser for protracted period. However, positive steps by him such as start in exploring Secretary’s statement would bolster greatly case for accommodating Egypt on financing.

Re timing Nasser visit to US, we still inclined believe extending of official invitation should tie in with demonstrable progress on Alpha.

Hoover

1. Source: Department of State, Central Files, 684A.86/9–1155. Top Secret; Alpha; Limited Distribution. Drafted by Russell and approved by Jernegan, who signed for Hoover. Repeated to London.
2. Telegrams 440 and 441, September 11, are not printed. Telegram 442 is Document 268.
3. See footnote 3, Document 174.
4. Reference is to Section 106 of the Mutual Security Act of 1954.