Memorandum, State Department Summary of Telegrams

NLT[Naval Aide) 284 OFFICE OF THE SECRETARY OF STATE DECLASSIFIED WASHINGTON State Dept. Guidelines, March 6, 1982 E.O. 12065, Sec. 3-402 November 23, 1951 By DEB NLT, Date 9-6-81 de SEGURITY INF ORMA TION IRAN We have instructed Ambassador Henderson in Tehran that, since we do not wish to lose an opportunity to ex- plore with Mosadeq all approaches to a settlement of the oil issue, he should continue to discuss the oil issue with Mosadeq upon the latter's re- - turn to Iran in an attempt to keep the door open for possible resumption of negotiations. We believe Henderson need not give the impression he is ne - gotiating a settlement of the oil dispute or is optimistic regarding making any progress with Mosadeq. While we believe it unlikely that a settlement can be reached while Mosadeq remains in power, we do not consider itim- possible and believe we must continue our efforts unless continuing conver- sations with Mosadeq will result in preventing his replacement by a more reasonable government. We informed Ambassador Henderson that we are unaware of any objections on the part of the British Government to his con- tinuing to explore possible grounds for a settlement with Mosadeq and other Iranian officials. INDIA In a long and frank conversation with Ambassador Bowles, Bajpai, the Secretary-General of the Indian Ministry of External Affairs, stated that India had specifically and definitely warned the Chinese Communist Government that any military moves across the India-Nepal border with Tibet would constitute military aggression against the Indian Government. Bajpai, however, did not anticipate such actualag gression but expected instead a more subtle Chinese Communist effort to win India gradually by stressing common Asian interests in general and the problems of economic deyelopment in particular. At the same time, Bajpai revealed that his latest information from the Indian Embassy in Peiping was that the Chinese Communists were fully prepared for a winter campaign in Korea and had substantially increased their air power. The Peiping report further warned that, although the Chinese were not contemplating an offen- - sive unless the cease-fire talks failed and were earnestly seeking an armis- - tice and an eventual peace settlement, Chinese pride would compel an in- definite continuation of hostilities if the Western negotiators were excess- ively rigid. IOPSECRET SECURITY INFORMA TION