98. Memorandum From Harold Saunders and Rosemary Neaher of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1


  • Status Report on the Arabian/Persian Gulf

There is just about half a year remaining before the special treaty relationships between the British and the Gulf states come to an end. British efforts to get a Gulf federation in train before withdrawal were accelerated last year by London’s appointment of Sir William Luce, an old Gulf hand, as the Prime Minister’s special representative on that issue. He has periodically made the rounds in the Gulf states, Saudi Arabia and Iran and has remained in touch with Washington as the situation evolved. Secretary Rogers, in London for SEATO, had the opportunity to get high-level assessments on the British outlook,2 and Luce has now gone back to the area for yet another round of discussions.

This paper is intended to bring you up to date on the state of play in the negotiations between the British and the states in the Gulf as we move into the last lap before official British ties terminate in December. [The attached map should be helpful.]3 We will be coming to you separately later with a broader strategy paper on U.S. options in the Gulf after 1971, so this paper will not address any larger issues or great power interests in the area.

The present situation can be described in terms of developments in three broad areas:

Efforts to achieve a federation among all or some of the nine states.
Efforts to resolve the dispute between Iran and two of the states (over possession of three tiny islands) which has resulted in the Shah’s withholding his support for the formation of a federation. Failure to resolve this dispute could lead to the Shah’s seizure of these islands and trigger the first Persian Gulf crisis.
Refinement of British plans for the manner and extent of their withdrawal and the shape and intent of their post-withdrawal presence.

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I. Federation

Whether a federation will emerge at all and whether, assuming it does, it will be subscribed to by all nine or less than nine states are still the big questions. To date, there has been no agreement among the states on what powers would be delegated to the proposed Federation of Arab Amirates (kingdoms) or where its capital should be. In the interim, some have developed interest in going independent, two are caught in the dispute with Iran and all have demonstrated their capacity to allow historic family and tribal rivalries to obscure issues of longer-term security.

Exhaustive consultations on the question of a federation of nine members led the British to conclude early this year that that prospect was dead and that prospects for a configuration short of nine were very much up in the air; their recent talks with us confirm British skepticism. The matter stands as follows:

  • Nine is dead because Bahrein has made clear—in every way short of a declaration—that it wants to go independent. Bahrein’s ruling family (related to Kuwait’s Sabahs) has a more sophisticated and developed society and found the proposals for sharing power in the FAA with poorer and more backward neighbors unsatisfactory.
  • Eight also seems impossible. Qatar, it appears, does not want to remain in a federation without Bahrein, putting it in competition with entities among the remaining seven with which it has had vigorous disputes. Everyone is fairly certain that Qatar will opt for independence if Bahrein does.
  • —A union of seven has not been ruled out but there have been problems:
  • —The seven states, running west to east, are Abu Dhabi, Dubai and the five Trucial States of Sharja, Ajman, Umm al Qaiwain, Ras al Khaimah and Fujairah.
  • —The Saudis and the Kuwaitis, finally persuaded to lobby in the Gulf on behalf of union, have until recently pressed for a federation of the nine [despite the fact that Bahrein’s intentions have been clear for some time]. This has inhibited serious consideration on the part of the Gulf states of a union of anything less than nine. Just this past month, the two littorals acknowledged that nine was a dead question.
  • —One helpful factor in the British view would have been an immediate declaration of independence by Bahrein. Bahrein, however, has been reluctant to do this without Faisal’s go-ahead. Faisal has dawdled because he would have preferred a union of the remaining eight—now deemed impossible—over seven. [The latter would undoubtedly be dominated by wealthy Abu Dhabi with which Faisal has two serious border disputes.] The latest development is that Bahrein, with Saudi approval, is expected to make its declaration for independence in June. The British have felt this to be an unnecessary delay.
  • —Two of the seven—Sharja and Ras al Khaimah—respectively claim the islands of Abu Musa and the Tunbs which the Shah has made unquestionably clear will be his—by force if necessary. The Shah has made his [Page 314]support for a federation contingent upon resolution of the islands question.
  • —Finally, there are tribal rivalries among the seven. For example, Dubai for historic reasons might align with Qatar rather than remain under the predominant influence of Abu Dhabi. The five small Trucial States are virtual desert kingdoms which have barely moved into the 20th century, although there is some suggestion that Abu Dhabi could have jurisdiction over them. [Dubai, of course, is geographically situated between Abu Dhabi and the five.]

The purpose of the foregoing was not to recount bothersome details but to demonstrate the kinds of mind-boggling jealousies and tribal prerogatives that affect regional cooperation among the Gulf states.

The British have been monitoring and keeping the lid on these squabbles throughout the protectorship period. Preparing to shed the veil as the protector power, they must settle some of these rivalries if the Gulf states are ever to work together. The British have given some thought to the smallest combination of states—perhaps two or three (in addition to an independent Bahrein and Qatar)—but questions remain as to the viability of such a configuration and the status of those shaykhdoms which might be excluded. Nevertheless, Luce is out in the field now pressing for a federation of seven which now Saudi Arabia, Kuwait and Iran also think is the best arrangement.

The short-range British strategy vis-à-vis federation can be summed up as follows: (1) They will press Bahrein to stick to its intention to declare independence in June. (2) They told Secretary Rogers in London that they will continue to take a public position as favoring a union of seven, as Bahrein’s intentions (and Qatar’s) are now clear in the public view. [Their objective would be to go with Bahrein, Qatar and an FAA of seven to the U.N. in the fall for membership.] (3) They will press the Arabs to work out a union of the seven but they have privately told us that, all else failing, they will accept a union of even as few as two. (4) They will press the Shah and the two Trucial States to resolve the islands question.

British intentions in the event that no federation is formed are less precise. They have told us privately that they would probably have to work out some kind of bilateral relationship with the four larger states analogous to that which they would accord any federation that would have been formed [Section III of this paper]. The ticklish question in their view would be what would happen to the five tiny Trucial States.

II. The Islands Dispute

Standing right in the neck of the entrance to the Gulf are Abu Musa (claimed by Sharja) and the Tunbs (claimed by Ras al Khaimah). Sovereignty over and a military presence on all three of the islands are claimed by the Shah. [His adamance on the islands is reinforced by his [Page 315]feeling that he was magnanimous in relinquishing Iran’s claim to Bahrain.]4 The following attitudes affect resolution of the problem:

—The Shah has said that these islands are necessary to him for the defense of Gulf security and that a military presence alone would not be enough; he must also have sovereignty (which would permit him exclusive rights over the oil believed to be offshore Abu Musa). Until February, he was willing to settle for a negotiation which fuzzed the sovereignty question (letting the Arabs temporarily off the hook) but gave him an immediate presence on the islands. This would facilitate movement towards a federation since he has said he would advance his support for it as soon as the British worked out with the two Gulf states to permit Iran its rightful presence on the island. The Shah has told Luce he is fully prepared to be very financially and economically generous to the shaykhs.

Neither side has been given to compromise. In February, frustrated at the lack of progress in talks, the Shah declared that he demanded both sovereignty and a military presence and that he would seize the islands the moment the British departed if the matter was not settled in advance of withdrawal. The British saw this as a turn for the worse.

It would seem that the Shah would want to avoid a precipitous move if he is to play a leading role in the Gulf. This may have been his thinking when, last month, he advanced to the British a softer negotiating position in which he returned to interest in fuzzing the sovereignty (for a period of two years at most and on the assumption it would be resolved in his favor), generous compensation for the Trucial States (he has even asked that the British begin researching the economic needs of Sharja and Ras al Khaimah), and some joint garrisoning in only the first weeks of ceding the islands to the Shah. If the shaykhs would accept this, the Shah would immediately declare his support for a federation (provided no documents related thereto mentioned the islands question). Luce is currently peddling this last offer in Sharja and Ras al Khaimah and will be going back to Tehran. We will keep you informed of the results.

  • —The Trucial shayks are nervous about ceding “Arab territory,” especially in a time when nationalist, radical forces are growing in the area, and they are also fearful of the accusation of collusion with the Shah. Sharja also sees a valuable asset in the prospective oil deposits off Abu Musa. Both Trucial leaders are characteristically of a desert mentality and not inclined to budge in any event. They have indicated that they would almost prefer to have the islands seized, thus absolving them of responsibility. Luce has not been overly sanguine that the [Page 316]Shah’s latest negotiating position is saleable to the Trucial rulers, although he customarily takes a dim view in advance.
  • —The British—in the eyes of the Shah, Faisal and the Kuwaitis— are the only ones who could work out a compromise and the picture of these negotiations over the islands contains nuances of deeper British concern for their long-term future in the Gulf as well as their especial favoritism for their Gulf state clients, over Iran. The British have several options, each of which produces a different set of dilemmas which they appear to be weighing:

    Pressing the shaykhs harder, pushing the theory that ceding the islands to the Shah for security purposes is in the interests of Gulf security. Done before withdrawal and in a package which fuzzed the sovereignty issue, short-term public outcry could be muffled as attention switched to focus on the formation of a federation. The Saudis and the Kuwaitis have taken the position that the British should work out any mutually satisfactory agreement. They are less concerned about the disposition of the islands than being forced to take a position—which they would have to do—if the Shah seized the islands.

    —The British have expressed real interest in using the concept of “in the interests of Gulf security” as the mode for getting over the island question and, assuming the shaykhs bought the Shah’s latest proposal, it would appear the route. At the same time, there are clear signs of reluctance to press too hard on these Arab clients on a question of “Arab territory” and wishful hoping that the Shah will back down. This is because their problem is very deep concern about their long-term credibility with the Arabs, particularly vis-à-vis their interests in the Gulf in the future when formal British responsibility will have ceased. The effects of U.K. involvement in ceding “Arab territory” on the eve of withdrawal would have to be weighed against the effects of U.K.-Iran antagonism.


    Permitting the Shah to simply set up a presence on the islands now. The British would assume a posture of helplessness which would protect them against Arab criticism.

    —This would have some of the same drawbacks as option 1 without the advantage of being able to characterize the deal as part of British efforts to tidy up outstanding problems before withdrawal. It would be a less helpful way for the Shah to begin a “cooperative” role in the Gulf and the Shah himself is really more interested in getting his islands as unprecipitously as possible.


    Permit the matter to drift. The Shah will seize the islands at the beginning of next year. The British have hinted that they rather like the fact of being entirely off the hook. At the same time, they are fully aware of the drawbacks.

    —With the termination of formal British ties, the British would no longer have the formal cover for intervening in the face of whatever [Page 317]public outcry might occur. The Arabs could take the case to the U.N. for a long drawn-out debate, and the Shah’s forceable seizure could become an issue to inflame prospects for cooperation of the littorals. The moderate Arab littorals (Saudi Arabia and Kuwait) would have to take a position against the Shah and the radicals would have a cause celebre. In the meantime, the Shah would have advanced no support for a federation. [It has not been established that his support is the determining factor in the establishment of the FAA. There would seem to be enough bickering on the Arab side to prevent its formation. However, the Shah’s frustration of unity efforts—in distracting two potential members—is one more hurdle and a potential source of irritation between the littorals if it goes unresolved.]

Comment: The results of Luce’s most recent Tehran-Trucial States exchange, as time runs out, will be crucial.

III. British “Withdrawal”

If the foregoing issues bear an air of tentativeness, the nature and timing of British withdrawal and the shape of the post-withdrawal U.K. presence is even less clear. Much, we are told, will depend on the outcome of negotiations to get a federation effectively in gear.

As the protector power, Britain was, in effect, the parent of the Gulf states in helping to resolve issues between them and in conducting their foreign policy. The British were also responsible for the defense of the Gulf states and committed to coming to their defense.

The British describe their actual physical military presence as rather small; the important point is that internal security forces were ably led by British officers who have formed a network of effective leadership and qualified local ranks throughout the Gulf. On top of this is the British commitment to come to the defense of Gulf states under threat, either subversively or externally. U.K. defense officials have quantified their existing facilities as the following: an army battalion on Bahrein; several engineer squadrons (companies) at Sharja; two squadrons of Hawker Hunter aircraft on Bahrein (in fulfillment of a U.K. commitment to Kuwait); several frigates and minesweepers at Bahrein; contract officers with the small Bahrein Navy; seconded officers and non-commissioned officers with the Trucial Oman Scouts (the local security forces developed by the U.K. and the important element of local control).

Post-withdrawal policy was officially described on March 1 in the British parliament as the following: [This was the Conservative Government affirmation of its decision to carry out the 1968 decision of the Labor Government.]

(1) Strong support for a union of the Gulf amirates and the offer to the union of the following assistance:

  • —A treaty of friendship “containing and undertaking to consult together in time of need.”
  • —Contribution of the Trucial Oman Scouts to form the nucleus of an FAA army. Availability of British officers and other personnel on loan to FAA forces and assistance in supply of equipment. [The FAA would finance its own forces.]
  • —Offer of elements of British forces, including training teams to assist with the training of union security forces. They could be stationed on a continuing basis to act in liaison and training roles.
  • —Regular training exercises involving the British Army and RAF units.
  • —Regular visits to the area by Royal Navy ships.
  • —Review of these arrangements where relevant.

(2) HMG would expect the Union to continue to permit overflight rights and the staging of British military aircraft through Union territory as at the present.

This policy statement was prefaced by the remark that it was related “solely to the situation as it stands at present”, i.e. that Bahrein, Qatar and the seven Trucial States were continuing discussions on the formation of an acceptable federation, with help from the Saudis and Kuwaitis. Discussions with the British since have shed the following light:

  • —The statement contained an element of flexibility; there may be a lingering in the withdrawal process. [Presumably, this means in the event a federation cannot be formed before the year is out.]
  • —Nevertheless, British defense is operating on the assumption that U.K. forces will be withdrawn before the end of the year, perhaps with the most activity coming in the fall.
  • —Periodic Army and RAF exercises would continue and Royal Navy visits would amount to about four per year. Overflight and staging rights at Bahrein along with a communications facility will be kept at Bahrein. The U.K. wants to provide training teams and leave its officers and NSOC 5 with the Trucial Scouts. [The Sharja facility (a small airport) would be abandoned although the UK will maintain a facility at Masirah (Oman).]

It is as yet unclear as to what extent the British have discussed these items with the Gulf states, although this was one of the original purposes of Luce’s present trip. Presumably, the situation will change as steps towards or away from federation occur. In the event no federation is formed, the British are aware that they will have to face several questions:

  • —What would be the British relationship to each of the Gulf states?
  • —What arrangement would be made for the important Trucial Oman Scouts? [The British would like to avoid dividing them up and distributing them to each state as the core of individual armies.]
  • —What would be the British relationship to the states in general in the event each remains a separate identity?

Conclusion: Sir William Luce is back in the Gulf at the moment to draw the Shah out on his compromise proposal (Luce has already told our embassy in Tehran he is not “sanguine” about its saleability to the Shaykhs)6 and to make the rounds with the Shaykhs as well as the Saudis. From the information base established in this paper, we will keep you informed via briefer memos from now on.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 647, Country Files, Middle East, General, Vol. VIII. Secret. Sent for information.
  2. Telegram Secto 27/3859 from London, April 28. (Ibid., Box 728, Country Files, Europe, United Kingdom, Vol. VI)
  3. Attached but not printed. All brackets are in the original.
  4. As reported in telegram 780 from Jidda, March 12. (National Archives, RG 59, Central Files 1970–73, POL 19 FAA)
  5. This is a possible reference to either seconded and non-commissioned officers, or to the sector operations center.
  6. As reported in telegram 2359 from Tehran, May 6. (National Archives, Nixon Presidential Materials, NSC Files, Box 602, Country Files, Middle East, Iran, Vol. III)