101. Report Prepared by Director of Central Intelligence Helms1

SUBJECT

  • Views on the Persian Gulf [less than 1 line not declassified]
1.
[3 lines not declassified] The two pressing issues in this area are clearly the status of three islands in the Strait of Hormuz (Abu Musa and the two Tunbs) and the prospects for a Federation of Arab Amirates among the Trucial States and neighboring Shaykhdoms.
2.
Conclusions:
A.
There appears to be an almost total breakdown of constructive communication among the major parties: Iran, Saudi Arabia and the United Kingdom. This communication breakdown could, if unresolved prior to British withdrawal, lead to a political breakdown among the Gulf Shaykhdoms. The ability of all parties concerned to control the aftermath would then be considerably less than it is today.
B.
[11/2 lines not declassified] HMG’s officials state that the decision to withdraw is final, that there will be no large-scale British reintervention after withdrawal, and, by implication at least, that they have all but despaired of working out a “reasonable solution among reasonable men.” Given bad Saudi-Iranian feeling against Britain and apparent British determination to pull out with as little additional fuss as possible, it is difficult at present to see how anything more than drift will occur in the area during the remainder of this year.
C.
Failure to find a settlement before the British withdraw would not only add to turbulence in the Gulf area but could also open yet another front in the Arab-Israeli struggle. The Israelis’ principal objective in the Persian Gulf is to maintain the flow of Iranian oil to Israel but in the bargain they would not mind increasing friction between their friend Iran and the Arab states. This friction seems predestined by Iran’s insistence on regaining sovereignty over the three islands, one way or another. If the Iranians seize the islands, the Arab countries, led by Iraq, will probably close ranks in vocal opposition. The Soviets will undoubtedly support the Arabs in projecting any takeover of the islands as an Iranian-Israeli-(and most likely)-US plot.
D.
The British believe the Soviets will move slowly at first, limiting initial representation to a modest diplomatic and commercial [Page 326]mission in Bahrain. The Iranians and Saudis seem too preoccupied with their own parochial interests to have given much thought to likely Soviet moves after British withdrawal. On the other hand, Soviet policy in Arab countries with newly changed status (e.g., South Yemen and Libya) suggests it is overly optimistic to conclude that the Soviets will be inactive in the Gulf.
E.
The American stake in the Persian Gulf is obviously our trade surplus in this area, now $1.5 billion per year, and the current oil output of 16.5 million barrels per day which is expected to rise to 22 million barrels by 1975. On this basis alone, the continuing search for a formula to bring together Iran and Saudi Arabia plus the Arab Shaykhdoms would seem to be indicated and additional effort perhaps warranted. The extent to which the U.S. Government should involve itself in good offices is clearly a policy question.
3.
The following is a summary, country by country, [less than 1 line not declassified].
A.
British View: [less than 3 lines not declassified] The British recognize Iran as the unchallenged military power in the area. Iran is rapidly expanding naval and air force facilities along the Persian Gulf littoral. These facilities, without the islands, will insure Iranian control of the Gulf straits. HMG is ready and anxious to work out a reasonable solution among reasonable men. The difficulty is that the Iranian officials, particularly Foreign Minister Zahedi, appear to be misinforming the Shah and laying nearly total blame for the lack of a settlement on what they see as HMG’s “double-dealing.” King Faysal of Saudi Arabia is avoiding (and probably incapable of playing) any constructive role. Kuwait is not expected to make any useful initiatives, not taking sides in the controversy probably being its optimum position. Bahrain, which almost certainly will opt to become independent in the next month or so, to be followed by Qatar, is too concerned with national survival to emerge as a Gulf leader. The Trucial Shaykhdoms may eventually end up a federation of seven States, or possibly six if Dubai refuses to join, but in any case are too small, too weak militarily and too much tied to traditional petty rivalries to become an effective unified force. Perhaps surprising, Iraq has turned inward and become notably less aggressive after several years of active involvement with Gulf insurgent movements. Also, the UAR, once possibly the greatest threat to future area stability, appears to be preoccupied with more important problems elsewhere and is not now considered a significant factor in the Gulf. The British think that the main source of future trouble will come through internal subversion. Two theories prevail: either Bahrain, the most sophisticated and developed of the Shaykhdoms, will go first, or the initial threat will be a domino-type reaction sparked by the radical regime in Aden, moving through Dhufar and the rest of Sultanate of Oman [less than 1 line not declassified][Page 327]and affecting all the Trucial Shaykhdoms as far as Abu Dhabi. The British tend to be fairly relaxed, perhaps overly so, about the Soviets. They believe the Soviets will move cautiously for the first year or two after British withdrawal, limiting early representation to small diplomatic and commercial missions in Bahrain. Whatever the source of future subversion—purely internal or fomented by external forces such as the Soviets, the British are unanimous that there is almost no chance of large-scale reintervention or counteraction by HMG after withdrawal. [less than 1 line not declassified] there are so many vital international problems for Britain today, pre-eminently the common market question, that HMG simply cannot afford to get bogged down in Persian Gulf politics after 31 December 1971. And except for stated willingness to offer advice to, and meet with, the parties most directly concerned, there is little, if any, indication that HMG plans major new diplomatic efforts to resolve the outstanding issues of the Gulf before British withdrawal.
B.

Iranian View: [5 lines not declassified].

The British are becoming more troublesome. The central issue began 80 years ago when the British “stole” the three islands from Iran. Now Iran will get the islands back, by force if necessary. [less than 1 line not declassified] The British are meddling with the Kuwaitis and even non-Gulf countries such as the UAR. As has occurred elsewhere when they withdrew from overseas territory, the British are leaving (perhaps intentionally) a “mess” in the Persian Gulf. The one hope is that British concentration on other problems, especially the EEC, will reduce their capability for troublemaking in the Gulf. Iran is the strongest and only stable country in the area. King Faysal is old and rather ineffectual. The main concern about Saudi Arabia is who or what will succeed King Faysal, and when. Bahrain, Qatar and the seven Trucial States are free to do what they want without interference from Iran. Iran welcomes a federation of the Shaykhdoms, if this is the Shaykhdoms’ choice, and is even prepared to offer financial assistance to the needy Trucial States. But Iran must first regain the three islands. Iraq could be more of a problem if reinforced by further Soviet military hardware. Soviet “friendship” treaties with Iraq and Syria, patterned after the UAR model, would be particularly dangerous for Iran. The Soviets have not given up their historic aim of seeking a land route to the Persian Gulf.

[11/2 lines not declassified] Iran may be misreading British intentions and overestimating British capabilities in the post-1971 Gulf. After all, Iran and the UK as well as the US and other countries concerned, all want the same thing—stability in the area. The usual Iranian response was, “yes, but …”, and citing the British briefing of Egypt on the Gulf problem as clearly mischievous. On 28 June the local press highlighted a speech by the Prime Minister pointing up Iran’s determination to get the three islands whatever the cost. According to [less than 1 line not [Page 328]declassified] “the cost may be the collapse of CENTO if the British force Iran to quit by remaining obstinate over the islands.”

C.

Saudi View: (Note: Although I did not visit Saudi Arabia or talk with Saudi officials on this trip, the following is based on an assessment given me [less than 1 line not declassified])

King Faysal regards himself as the greatest Arab, dangerously overestimating his own and his country’s capability to influence events in the Middle East. He has refused to discuss any solution to the Gulf situation other than that based on a federation of nine Shaykhdoms, even though this is a patently dead issue. He has requested that the Bahrainis postpone any final decision on independence, but has left them baffled as to his own intentions. In mid-June the British Ambassador in Jidda informed King Faysal that HMG felt compelled to abandon efforts to achieve a federation of nine Shaykhdoms and asked for Saudi support for a union of seven (without Bahrain and Qatar). King Faysal reportedly lectured the Ambassador that Saudi Arabia could not be a party to destroying the original concept of a federation of nine. The King further warned the Ambassador that a federation of seven would confirm the world’s suspicions of British perfidy, that HMG’s ultimate objective is the perpetuation of British dominance of the lower Gulf. The British vehicle, [less than 1 line not declassified] would be the “stooge” Sultan of Oman who would then attempt to absorb the seven Trucial States. Contrasted [less than 1 line not declassified] views [1 line not declassified] that a federation of nine is out of the question and that, in fact, Bahraini independence is desirable. [less than 1 line not declassified] Saudi Arabia would not object to Iranian takeover of the disputed islands, provided this could be done in such a way to avoid the appearance that Saudi Arabia acquiesced in the seizure of Arab territory by non-Arabs. [name not declassified] talks of Saudi Arabia’s “Manifest Destiny” to unite the entire Arabian peninsula under the Saudi flag and, in particular, suggests that any internal unrest in Abu Dhabi would be used as a pretext to take over that Shaykhdom. [3 lines not declassified] Conspicuous failure of any of King Faysal’s policies would make him appear a foolish old man, spoil chances of achieving solidarity with Iran in the Gulf, and eventually result in a serious weakening of the monarchy in Saudi Arabia.

D.
Jordanian View: King Husayn favors a federation of the Arab Shaykhdoms and is willing to support a grouping of seven if nine is not possible. Although aware of the dispute between Iran and the UK, he is trying to stand aside and avoid playing an active role. He is obviously not interested in offending his benefactor, King Faysal.
E.
Israeli View: [11/2 lines not declassified] There are two essential Israeli interests in the Persian Gulf; maintaining and improving the Israeli defense posture, and securing the oil lifeline from Iran to the port of Eilat. The Israelis are influenced by their desire to support the Iranians, [Page 329]their continued involvement with the Kurds in Iraq (with whose help 400 Iraqi Jews have recently been brought to Israel), and their interest in any action which could weaken the development of an effective common Arab military front against Israel.

Israeli officials do not see the three islands in the Strait of Hormuz as being of great strategic importance. They believe that shipping in the Bal al-Mandab Strait in the Red Sea can be secured with a naval presence (aided by bases in Ethiopia). They would presumably agree that the Iranian Navy, operating from Iranian coastal bases, could protect shipping in the Strait of Hormuz in the Persian Gulf. Israel would tend to support Iranian seizure of the islands, but this position is probably derived primarily from interest in the best possible security for the tanker route from Iran to Israel.

Israelis have ample experience with the nuisance value of guerrilla movements. They strongly favor rapid action against such movements before they become entrenched. This philosophy encourages a wary eye toward the Soviet and Chinese presence in the area. Thus the Israelis believe that guerrilla movements in Oman and elsewhere in the Arabian hinterland could be eradicated with the judicious and not inordinate application of men and materiel, especially helicopters, even by the Saudis.

The Israelis see inter-Arab relations as an elaborate scenario in which claims are rarely pushed to the acid test of war. In this context, they believe King Faysal with money and religious prestige can wield political influence within the Arab World despite military weakness. They view King Faysal as less effective, however, in dealing with Iran due to historic Arab-Persian mutual distrust and the vast superiority of Iran’s military forces.

According to the Israelis, the UAR has been inactive in the Persian Gulf since the June War of 1967.

The Israelis have little respect for the declining British authority in the area. They tend to agree that British policy is designed to avoid antagonizing the various Shaykhdoms and to retain maximum influence in the area, via commercial interests, after final withdrawal at the end of 1971. In this view, the Israelis are probably influenced by the opinions of their Iranian friends.

There is considerable Israeli interest in Iraqi intentions in the area, related directly to Iraqi capabilities against Israel. Israel viewed favorably the removal of most Iraqi forces from Jordan and their relocation opposite Kuwait and on the Iranian border (where they are too distant to pose a coup threat to the Government in Baghdad). Israel is sympathetic with the Iranian thesis that the Soviets wish to use Iraq as a subversive base of operations in the area. Soviet naval visits to Iraq and the presence of Soviet fishing boats in the Persian Gulf have been [Page 330]noted. The Israelis have no doubt that Iranian forces could defeat the Iraqis and they see no immediate Iraqi threat to Kuwait. Without much respect for the Iraqi regime, the Israelis nevertheless closely watch Iraqi actions, including alleged Iraqi assistance to the Popular Front for the Liberation of the Occupied Arab Gulf.

The Israelis have little to suggest regarding the small Shaykhdoms. They are cynical about the chances of a federation and are deeply pessimistic about the capacity of the various Shaykhs to handle their affairs once the British leave. They see the Shaykhdoms’ need for a new “uncle” and they fear, whoever it is, their interest will suffer.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 647, Country Files, Middle East General, Vol. VIII. Secret. Sent to Haig under a July 8 covering memorandum from Helms.