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

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

Tehran, June 29, 1966, 1400Z.

1762. Military Sales to Iran.

1. Jablonsky and I spent one hour and three-quarters with Shah morning 29th. It was rough.

2. Noting in our meeting previous to his departure we had been able to inform him of USG readiness to provide additional $200,000,000 in credit for military purchases over next five years, I said we had during Shah’s absence worked on pricing with view to minimum financial burden. We now had data which we believed could be worked into program acceptable to him. Important point was to get on with job of figuring out third tranche bearing in mind HIM’s priorities.

3. Shah said he had every intention being “reasonable.” He repeatedly expressed appreciation for what USG has done for Iran in military field in past and his desire that healthiness this relationship will continue. At same time, he referred to predicament in which Pakistan had found itself last fall and since that time due to suspension of US military supplies. He considered USG’s policy misguided for in his view US has driven Paks as regards military procurement into arms of Chinese and also Russians, Pak military mission currently being in Moscow. All this, he said, has given him much cause for thought. He has, he said, reached a conclusion as far as Iranian military procurement policy is concerned. If USG shows itself responsive, Shah said he wishes to maintain maximum supply relationship with traditional U.S. supplier. This is particularly true, he said, for lethal and sensitive items such as aircraft. He pointed out that once a pilot is in air he is beyond control and can in fact turn against his country. Hence Shah wants aircraft program in safe American hands. Other items such as anti-aircraft equipment do not present same opportunities for subversive potential. Therefore, if USG unwilling supply such items at reasonable prices and terms, they can be procured elsewhere.

4. Turning to spread sheet of Peterson approved items (except destroyer) and their costs, Shah quickly concentrated on items he wants to order from U.S. without delay: Blue Shark system, remaining 209 M–60 tanks, F–4 aircraft, and 30-day war reserve for three services. Later in discussion, Jablonsky was able to persuade Shah at least for this year to limit additional war reserve to air force only.

5. Shah laid greatest emphasis on F–4 aircraft. He was particularly upset by limitation to one squadron. One squadron, he observed, would only be enough for two or three planes at each airfield. This was totally unacceptable. Also unacceptable, he said, is 1970 target date. Noting how Soviets have already supplied and are continuing to supply MIG–21’s to their friends, notably Iraq, Shah said, “We are faced with the problem right now.”

6. As to F–4 pricing, Shah considers price of $39 million for 12 aircraft high, although he did not describe it as unacceptable. He said French Mirages have been offered at $1.1 million per copy “naked” and $1.6 million “complete.” French have guaranteed to have first Mirage in country in 20 months and total order within 32 months. He noted he could buy at least two Mirages for price of each F–4. At same time, he said, he realized F–4 is much better aircraft. He indicated he would think about this offer for “a week or ten days” (later he said until July 4) but his interest ultimately dependent on obtaining two squadrons and earlier delivery.

7. Question of destroyer never came up during conversation. Shah, however, at one point gave clear indication that he is tending toward British deal (Embtel 1594).²

8. Later in discussion when I urged Shah to keep in mind that his F–5 is good aircraft, which is doing yeoman work in Vietnam, Shah disclosed “in confidence” that an Israeli pilot had been here recently, had flown the F–5, and contrasted it disparagingly with Mirages which Israelis possess.

9. When we noted Shah had not indicated interest in anti-aircraft equipment, Shah said he thought he could get such equipment, as opposed to “sensitive” aircraft, from elsewhere, probably from Russians. He asked re effectiveness of Russian SAM’s in Vietnam and Jablonsky reported they only having limited success. Shah noted that until now he has not approached Russians, only British and French. (Implication was that British and French offers not very attractive.) Re Tiger Cat, Shah acknowledged it had only limited value.

10. When I expressed personal hope that Shah could avoid arms procurement from Russians and indicated how it would complicate matters for us, Shah took firm stand. Rest of conversation was heavily punctuated with his insistence that Iran simply must have “liberty of action.” He said he hoped USG would understand that his ideals are same as ours and that “even behind our backs he supports U.S. on Vietnam” but Iran’s main concern is to “stand on its own feet,” from security as well as economic and political standpoints. Instead of acting irritated, USG should realize that Iran’s independent stance is best possible roadblock to Communist influence.

11. Shah went on to say that USG has had no compunctions about providing arms to other countries which also procure arms from Soviets. He noted specifically India, Iraq and Yugoslavia. I mentioned those were different circumstances. India was faced with Chinese aggression. Shah retorted India used American arms against Paks. I noted equipment to Iraq was limited and cash sales. Shah said bitterly USG always finds “excuses” for such deals with countries which persistently side against US in world affairs while at same time making life as difficult as possible for US’s true friends.

12. Re Pakistan, I noted we apparently assess last fall’s episode somewhat differently. I said USG considers it acted in Pakistan’s “higher interest” by inducing an early end to conflict instead of fueling war further. Shah retorted tartly all US did was to hurt Pakistan, its ostensible ally, while Indians continued to receive arms from other suppliers.

13. I assured Shah USG welcomes Iran’s ability to stand on its own feet, and there is no divergence of opinion in Washington on this score. In fact, most Americans are so gratified they are concerned that Iran’s remarkable progress not be jeopardized by excessive expenditures for arms.

14. Expressing full confidence in Shah’s ability to keep situation on even keel, I noted clandestine Soviet broadcasts and wondered about wisdom of opening further opportunities for Soviets via arms procurement, non-sensitive or sensitive. Shah was quick to emphasize that broadcasts are aimed at him and his regime. This all more reason, he said, why Iran’s best hope lies in “independent” stance which frustrates Communist attempts to drive wedge between Shah and his people. I took occasion also to note that extent of shift in Iranian policy is already misleading some of Iranian opinion, e.g. almost daily attacks in some of lesser Iranian newspapers and a general cooling of atmosphere here against Americans. This too, is Soviet aim, I added. Shah said Russians are paying some newspapers. He added that any unfriendliness of Iranian opinion is at least part due to America’s past mistakes. He cited what he considers virtually public USG support for Amini as “last chance for Iran,” and alleged USG opposition to Iran’s acquisition of steel mill. He said he felt that this trend in public opinion would pass within next few months, just as American press attitude toward his own endeavors has undergone favorable change.

15. Throughout discussion, Shah referred in bitter terms re U.S. policy toward Nasser, and to India. Re latter, he reluctantly agreed that it would be calamity for such sizeable nation to “go down drain.” Re Nasser, I reiterated previous argumentation that USG policy is based not on reward for good behavior but on what is in general interest of blocking communism and facilitating Mideast stability. He remained unimpressed.

16. Shah complained how USG treats its friends as “commercial” clients. All my efforts to explain what preferential treatment Iran has received in past and continues to receive failed to change his mind.

17. In summing up, Shah reiterated he wishes to proceed with purchase of: remaining M–60 tanks, Blue Shark, and air force war reserve. He will await further word re F–4’s, particularly whether two squadrons available and delivery prospects. Cost factor will also be taken into consideration when comparing offers. He said he would like to make foregoing purchases, but under clear understanding re his “liberty of action” re procurement elsewhere if USG intends to attach “strings.” He said he would like to know now so that alternative arrangements can be made now rather than two or three years later when it may be too late. Shah closed by reassurance that whatever happens to our military relationship his ideals are always those of U.S. and free world.

Meyer

1. Source: Department of State, Central Files, DEF 19–8 U.S.-IRAN. Confidential; Limdis. Repeated to CINCSTRIKE/USCINCMEAFSA.
2. See footnote 3, Document 145.