Memorandum, State Department Summary of Telegrams

the THE SECRETARY OF STATE DECLASSIFIED WASHINGTON State E.O. Guidelines, March 6, 1982 12065, Sec. 3-402 Dept. DEB NLT, Date 9-10-85 July 28, 1952 By SECRET SECURITY INFORMATION SUMMARY OF TELEGRAMS IRAN Prime Minister Mosadeq has approached the British through Middleton as to possible negotiations for an oil settlement. Mosadeq has come forth with the suggestion that in return for certain British economic or financial aid he would be willing to accept pro- - posals for arbitration of the compensation aspect of the oil dispute and to sign a contract with the AIOC for world distribution of Iranian oil while keeping full national control of production and refining facilities. In connection with this offer Minister of Court Ala approached Ambas- - sador Henderson to support Mosadequs request for aid and a settlement of the oil dispute, and said that he was convinced that Mosadeq was deeply concerned with the growth of hostility in Iran toward the Western world. He stated that Mosadeq was already under fire for having called in Middleton and if Mosadeq®s gesture should lead to nothing the anti-West - element would be greatly strengthened at the expense of more moderate nationalists who continue to regard friendship of the West as the real hope of Iran. We have asked Embassy London to inform the Foreign Office that in light of our analysis it would be a great mistake to reject Mosadeg's overture. It appears to us that, as a result of the events of last week, Mosadeq is clearly in a stronger position in his relations with the Shah, the Majlis and the public than at any time since the nationalization of Iranian oil in April 1951. The International Court decision has further strengthened Mosadeq's position with the public, but his position with respect to the more radical elements within the National Front and with Tudeh may be weaker than before. It appears further that our worst fears as to the weakness of the Shah have been confirmed and that the Shah has been discredited. Moreover, it is highly unlikely that any other constructive political elements would attempt to exercise power in Iran after what has happened to Qavam and that if they should it is highly unlikely that they could succeed. We believe, therefore, that if Mosadeq were to lose power there is a far greater likelihood that he would be succeeded by a group that is further to the left than a more SECRET SECURITY INHORMATION