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Exclusive: transcript of a recently declassified CIA report from from March 7,1949 — Original document page
The establishment of the State of Israel by force with intimidation of Arab governments by the US and the USSR, with the cutting off of British arms and ammunitions (the Arabs’ only source of supply), with ample sources for Israel of munitions and finance, the Israeli battle victory is complete, but it has solved nothing.  If boundaries to an Israeli state, any boundaries, had been set and guaranteed by the Great Powers, peace might return to the area.  On the contrary, we have actually a victorious state which is limited to no frontiers and which is determined that no narrow limits shall be set.  The Near East is faced with the almost certain prospect of a profound and growing disturbance by Israel which may last for decades.

A CIA Report from March 7,1949 — Original document page

Observations concerning Palestine and the Arab Countries

I. The Military Situation in Palestine

The new state of Israel is strong in military equipment, finances, and
morale, and possesses a striking power which could easily seize the remainder of
Palestine as well as adjacent parts of Lebanon, Syria or of Egypt north of the
Suez Canal.  It is probable that the next military adventure will be to
annex the Jerusalem area.  The Arabs cannot successfully renew the appeal
to arms: they lack unity, leadership, arms and airplanes.

This is a striking reversal of the situation as it was on June 1, 1948.
Israel then was screaming to high Heaven for a ceasefire order from the United
Nations, whereupon the Great Powers forced the first truce using explicit
threats to Arab countries failing to comply.  At the time, the Arabs,
assured by treaty with Britain of continued supply of arms and ammunition, were
on the offensive, had reached to a point eight miles from Tel Aviv, and had cut
to the coast between Haifa and Nakoura.  With the truce and its stipulation
that neither side should get military advantage of any kind during the truce,
Britain suspended the military supplies to the Arabs previously delivered in
accordance with treaty agreements.  Meanwhile, however, arms procured from
many sources — including more than fifty Messerschmidt fighters — poured into
Israel.  By the time the first truce expired, these Messerschmidt fighters
took complete control of the air and were able to disperse enemy infantry and to
‘strafe’ Arab towns and villages just as before Dunkirk, British and French
troops had been rendered impotent by Messerschmidt planes.

Arab morale was further damaged by the success of British diplomacy in
detaching Trans-Jordan and Iraq from the joint Arab military program, and by the
battle defeats inflicted by Israel on Arabs in the successive seizures by Israel
of Arab territory without regard to United Nations orders to retire to positions
held at the various ceasefire dates.

II. A Long-Range Disaster

The establishment of the
State of Israel by force with intimidation of Arab governments by the US and the
USSR, with the cutting off of British arms and ammunitions (the Arabs’ only
source of supply), with ample sources for Israel of munitions and finance,
the Israeli battle victory is complete, but it has solved nothing.  If
boundaries to an Israeli state, any boundaries, had been set and guaranteed by
the Great Powers, peace might return to the area.  On the contrary, we have
actually a victorious state which is limited to no frontiers and which is
determined that no narrow limits shall be set.  The Near East is faced with
the almost certain prospect of a profound and growing disturbance by Israel
which may last for decades.

(a) Instead of restoring the boundaries of the province of Judea as they were
in 70 AD, the Israeli leaders now state freely though usually unofficially,
their demand for an ever-expanding empire.  Their present possessions are
regarded by them as only a beachhead into the Arab and Muslim world — a large
part of which they intend to exploit.  They are not prepared to live off
what the land will yield as the Arabs do.

(b) The index of the cost of living in Israel has risen to 500% of what it
was in that area from 1933 to 1939.  Having driven out the Arabs from their
homes, Israel lacks cheap labor, and without a very large per capita subsidy the
economy of the state would soon collapse.  This the Israeli government
intends to prevent by continuing to secure funds from Zionists and other
sympathizers abroad, by large loans, and as soon as possible, by the
exploitation of the Arab hinterland, especially the agriculture and industries
of Syria and Iraq.

(c) Alone among the Great Powers, Britain has been working on a plan to
restore a balance between the forces in Palestine, but it already appears that
this plan is probably doomed to fail.  Zionist pressure in the USA,
Anglophobia in Iraq and Egypt, and above all, Russia’s determination to prolong
chaos in the Near East and to complete the discrediting of British and American
diplomacy, combine to work against the policy of the British Government and its
collaborators — King Abdulla of Trans-Jordan and the Prime Minister of Iraq,
Nuri Said.

(d) The duration of the disaster is guaranteed also by the unsolved problem
of 700,000 Arab refugees.  Whether or not these refugees are fed, clothed,
and kept alive for the time being, they remain as a primary source of
resentment, distress and continuing expense.  No workable plan has been
proposed for their resettlement ina gainful livelihood.  Israel sneers at
the UN order to repatriate or compensate them.  Riots have already taken
place in some of the refugee camps and refugee leaders have addressed their
followers in vituperative language denouncing Americans, British, Zionists and
Arab League failures of which they are the helpless victims.  They include
many intellectuals who are more than ripe for Communist propaganda, some of whom
are now meeting regularly in Aleppo.

III. Arab Politics

Since the Arab military defeats and the complete rebuff of the Arab position
at the United Nations Assembly in Paris, the Arab League has practically
disappeared as a political force and the several Arab countries are pursuing
nationalistic policies looking for allies and friends.

Only Saudi Arabia, Egypt and perhaps Lebanon have a good chance to succeed in
maintaining their independence by following the new isolationist policy. 
Saudi Arabia alone follows a completely realistic policy of refusing to commit
suicide for sentimental or fanatical reasons.  Egypt is still internally
insecure and with recurring assassinations and riotings may face internal
upheaval and the liquidation of the upper classes.

Iraq, potentially wealthy in natural resources, would be the first to fall
into Communist control.  Although intelligent leaders have managed to hold
Syria together, it is believed by some foreign diplomats and many Arab leaders
that Syria, as a nation, will break up in two or three years, with autonomous
shaikhdoms in Aleppo, Homs and Hama, a Kurdish puppet province in the Jezireh,
and with the Jebel Druze delivering Damascus to Abdulla of Trans-Jordan unless
the Israelis get Damascus first.

IV. The United Nations

The United Nations is already completely discredited in the minds of the Arab
Governments and the Arab peoples.  There are many reasons for this, but the
evidence usually is the failure of the UN or the Mediator to enforce UN orders
to Israel.  For example:

(a) To prevent arms and Czechoslovakian airplanes from reaching Israel.

(b) To deliver the assassins of Count Bernadotte, although their identity is
known to hundreds of Jews.

(c) To repatriate or compensate over half a million refugees.

(d) To permit UN observers with Israeli forces when they are on the
offensive.

(e) To retire to the lines occupied at the October 14 “cease fire”
period.

(f) To evacuate areas given to the Arabs by the UN proposal of November 29,
1947; although at the same time insisting upon invading the Negeb, to excuse
which they quote the same UN partition proposal.  (The Arab areas occupied
in defiance of the UN include Western Galilee, Jaffa, Nazareth, and villages
over the Lebanon frontier.)

(g) To respect the international character of the Jerusalem area.

IV. Russia’s Purpose

Although Russia has officially sided with Israel she is actually on the side
of disorder and hunger.  Russia and her satellites armed Israel to an
extent few people in the United States understand, but Communists are also
active among the Arabs.  They may upset the Iraq Government at any time;
the have succeeded in establishing contact with the President of Syria to whom
overtures have been made; they have captured the leadership of Arabs in
Nazareth, Jaffa, and Acre, who are despairing of any effective help from Arab
countries and are turning to Communism.  (In Nazareth, for example, no one
can hold or get a job without the permission of the Communist boss.)  The
USSR will help Israel expand until the Arab Governments as well as British and
American policies are completely discredited.  The Russians will then
decide whether to make a puppet of the Zionists or of the Arabs — if the
situation in the Near East continues to degenerate, Russia may find both parties
begging for the honor.  The Prime Ministers of two Arab countries told me
they have reason to believe that, blocked in Western Europe, Russia will divert
her Cold War to the “soft-underbelly” of the Near East.

— names of dignitaries interviewed have been censored (marked as A, B,
C . . . )—

SUMMARY OF COMMENTS MADE BY CERTAIN PERSONALITIES MADE IN PRIVATE
INTERVIEWS — December 17, 1948 to January 19, 1949

Key Designation (the alphabetic key assigned to the
individual)

A. “Propaganda has failed; the UN has failed; the Arabs are
divided.  What is the use of empty threats by Farouk, Ibn Saud, etc., when
there is nothing they can deliver?

“Abdulla at least has a program.  No one else is acting
effectively.  he is the lesser of evils, although he is not reliable
himself.  But he might stop the Jews.

“Syria suffers from no program.  There is profound discontent, a demand
for a real economic program.  Otherwise the country will be bankrupt and in
chaos.

“Only a Greater Syria will provide the economic means to enable the northern
Arab countries to avoid revolution and escape Communist domination.  This
Greater Syria, however, should not be under the crown of Abdulla of
Trans-Jordan, but under the crown of the King of Iraq, with viceroys
representing him in Syria, Transjordan, and Palestine.

“The northern countries cannot hope for support from Egypt or Saudi Arabia
from which they are separated physically by Israel and by the unreliable British
puppet, King Abdulla.  In spite of the infiltration of Iraq by Communist
propaganda, I feel sure that Iraq is more secure than Egypt, where the Muslim
Brotherhood will continue its assassinations, and where King Farouk keeps a
plane fueled up for a quick departure to his happy hunting grounds in
Rhodesia.”

B. “I have no confidence in the new Syrian Government *(. . .
censored . . .) *Syria cannot be saved by a reshuffling of the same faces in
the Government — most of whom are content to hold office and draw salary. 
Syria cannot be lifted from its demoralized condition after the Palestine
defeats, or preserved from the threat of bankruptcy and of civil strife unless
there is a profound reform and a constructive economic program reaching and
benefitting the common people.  So far as Aleppo is concerned, we have no
reason to believe that the new Syrian Government will be any better than its
predecessors.”

C. “The last chance for a peaceful and reasonable solution of the
Major Powers was the Bernadotte Proposal for the frontiers between Israel and
Arab Palestine.  At that time I still believed that there was a chance for
UN officials and the general American public to consider limiting Israel to
reasonable frontiers which would leave in Arab hands the principal centers of
Arab population.  Unfortunately no Major Power supported the Bernadotte
Plan.  After Bernadotte’s assassination (by an Israeli), I spoke
with the two top men responsible about the solution I have described, and both
said, ‘Yes, that is a very sensible plan and a very fair solution if it could be
arranged.’  But nothing ever happened about it.  It was like a subject
of the weather — which Mark Twain said everybody talks about but no one does
anything about.”

D. “Strange as it may seem to you, I now favor the partition of
Palestine.  Convinced as I am that the Zionists will continue their
aggressive policy of expansion in the effort to exploit the Arab World, I think
we Arabs are much better off to have Israel behind definite frontiers resulting
from partition than to have to include the Zionists in a single State of
Palestine and have them, with their propaganda and endless financial resources,
gradually work from within Arab Councils and the Arab League to undermine Arab
interests.  I believe it is better to have your enemy in a neighboring lot
with a fence between, behind which he is supposed to stay, than it is to have
him as a part owner of your own farm with freedom to roam all over your own
house and property.”

E. “I am concerned about the nepotism in the Saudi Arab Government,
especially with regard to the Royal Family and the Minister of Finance. 
Other advisors of the King seem to rise or fall in accordance with their
personal services, but the Minister of Finance is entrenching members of his
family in positions of Government responsibility without regard to their
competence.  His nephew, who is practically an idiot, is getting too much
control of finances.  Although the King makes good use of a few of his
older sons, some of the others are intriguing and running up debts in a way that
does not promise well for their conduct if the King should die, and they should
be free to suit themselves.  In my opinion, Saudi Arabia is entirely too
much bound to the Royal Family and to the family of the Minister of Finance,
without any opportunity for others to reach positions of responsibility.”

F. “I myself and a number of my family have lost all faith in the
program of the Mufti and in any of the Arab leaders proposing plans for
Palestine.  Together with three of my cousins, *(. . . censored . .
. ) *we are in close touch with the Communist agents with whom we meet
regularly.  As a good Muslim, I do not believe in the Communist doctrine,
but I also do not believe that Russia is helping the Jews because she cares
about them.  Opposed as we are by American sympathy for Israel, and
abandoned as we are by the British who used to supply us with arms, we shall
look for help wherever we think we may find it; and I believe that we may find
help in Russia, to whom your country also turned when you were fighting for
survival in the recent war.”

G. “We still feel the way we did about Palestine,
but the Arab program for Palestine has been defeated for the time being; in
fact, there was never really any agreement on an Arab Plan for Palestine. 
King Abdulla would sell his fellow Arabs into slavery or permit them to perish
if he could increase his own power.  You may be sure that Saudi Arabia will
follow a realistic course in its own national interest and will not be diverted
by any sentimental or fanatical considerations, nor by any foreign
interference.  Insofar as we can do so without the loss of independence we
shall cooperate fully with Americans and British in economic matters and in the
technical developments needed in Arabia, but in politics we shall be very
careful before deciding what other countries or governments will be our
friends.”

H. “I believe that popular enthusiasm for Israel has passed its peak
with the successful establishment of that State.  I understand that some of
the principal Jewish supporters are already cutting down their contributions,
and it may be that financial resources will steadily dry up.  If this is
understood and believed by Israel leaders, they may be willing to compromise
their ambitions and settle down in a limited state such as the territory they
now occupy.  If, on the other hand, they are confident of continuing
resources, the extremists may win out, and they may continue to seize additional
territory.  This continues to be the chief threat to peace.  The
United Nations has not been able to agree on definite borders for the Israeli
State which already administers territory it was never contemplated she should
have;  and without agreement among the powers to establish the frontiers,
the hope for peace depends upon the reasonableness of both Jews and Arabs in
accepting boundaries that constitute a compromise, and then remaining within
those boundaries.”

I. “The leaders and the people of Israel, as I have seen them in
Haifa, Tel Aviv and elsewhere during the past eight months, are exultant and
confident as a result of their victories, and of their recognition by the world
powers.  They include many men with brains and ability, and they have
ambitions plans for their State.

“In spite of what some Israeli leaders have claimed, the Israelis drove the
Arabs from their homes and never invited them to remain peacefully in Israel
until after they had left and their property had been confiscated.  The
homes have been and are being rapidly filled with Jewish immigrants.  This
is a true of the cities and towns; as for the small villages and farms, the
present procedure is to obliterate and plow up the Arab hamlet, or farm and
build a Jewish settlement with a new name, wiping out all trace or record of
their previous Arab location and property.  The purpose in all of this is
freely admitted — that the Israelis want to make impossible the compensation of
Arabs driven out even though such compensation should be forced upon them in
principle by some world authority.  How can one estimate the value of a
home and property which has been obliterated and of which no record
remains!  There is no question about it in my mind: Arabs will not be
permitted return to Israel and compensation will not be made to them.  On
the other hand, there is a desperate effort being made to invite back certain
Arabs with Communist leanings who may be used for propaganda purposes against
their fellow Arabs.

“The Israeli military leaders have told me that if the first truce had not
come when it did they would have lost the war.  During the three months
following the first truce, the airplanes-with-mechanics which arrived from
Czechoslovakia and the arms and explosives purchased in many places, coupled
with the complete embargo on arms to the Arabs and political dissension among
the Arabs gave the Israelis a striking force which was decisive.

“Israel still faces a major problem even if she does succeed in controlling
her extremists and expansionists.  This is the problem of maintaining the
standard of living which she has thus far enjoyed by virtue of a very high
subsidy from abroad.  The cost of living in Haifa and Tel Aviv is 500% of
the average cost of the period 1933 to 1939.  There is no cheap labor;
wages and rents are exorbitant.

“The people cannot possibly live off the land and sell their produce to
compete with the Arabs in neighboring countries, who are raising the same fruits
and vegetables at less cost.  The danger in this situation is that Israel
will not accept a lower standard of living nor reduce her population to the
number which the land would support.  She expects to maintain the
prosperity of the country either (1) by continued financial support from
the Jews of the world and their sympathizers, or (2) by exploitation of the
neighboring Arab countries where she expects to find the cheap labor and the raw
materials.”

J. “I have seen Bunche and General Riley several times.  Both
were hopeful of a Palestine settlement, if Zionists could be restrained.

“British General Gale, commanding Suez Canal Zone, and U.S. Admiral Sherman,
are ready to act to protect their nationals, or evacuate them from the area.

“Ambassador Griffis acted on the Bernadotte Plan, sought to secure Arab
agreement to it, only to be slapped down by Washington.  One day Griffis
told me he had received the same day four telegrams from Washington all mutually
contradictory . . . Wealthy Jewish friends of Griffis in the U.S.A., when he
tried to secure their support for the Bernadotte Plan, slapped him down and
refused to back him as they promised to do . . . Griffis hoped to get Egypt in
line, to have Egypt withdraw from the Arab group and align itself with the West,
leaving Syria and Lebanon in the lurch . . . Griffis never permitted any
telegram or despatch from the Embassy to carry any anti-Jewish news, nor any
anti-Arab news.  Ireland is more free to report the truth of Israeli
violations, etc., since Griffis has left . . . Israeli recruits in the last six
months have been 40% from behind the Iron Curtain.”

K. “Britain is backing Abdulla of Transjordan, with the purpose of
Balkanizing the other Arab countries and making them come crawling to Britain
for protection and separate treaties.  It is all a matter of arms, planes,
military transport, and Britain will deal it out to her puppets alone.”

L. “Syria will go to pieces in time.  There is no powerful
friend, too many centrifugal forces pulling it apart.  Abdulla is nothing
in himself, no resources, natural or financial.  He must therefore be a
puppet and cannot act independently.  He is a safe investment until the
British drop him.”

M. “A die-hard: Arabs must maintain morale and never compromise.
I was against war but having embarked, the Arabs must keep it up, cold and hot
until victory, no matter how many years.  Morale must be sustained. 
Dunkirk, Stalingrad, prove one can survive temporary battle defeats, provided
the will-to-victory remains.  Abdulla will be thrown out of Arab League,
and the fight will go on.  The Israelis are NOT invincible.  How can
three-fourths of one million Jews overcome thirty-five million Arabs in the long
run?”

N. “Lebanon — most stable and reliable Arab country.  Tapline
would be decisive in its economy and successful.  Griffis is wrong in
urging Egypt as a better route.  Egypt’s future will be decided by other
factors.  (You cannot marry Egypt to reform her — she is too far
gone.)  Egypt is less secure as a pipeline route than Lebanon.

“Syrians are convinced of Tapline’s value.  When a government is formed
it will ratify early.  To be sure, Syria is precarious, and in a couple of
years it may be broken up by the Greater Syria plots of Abdulla, but whoever
owns or governs the Tapline area will probably be sensible enough to protect
it.

“When I got an autographed photo from Abdulla, the King signed it in red ink,
‘the color of the Hojaz’ (Hejaz – sic), but I think Britain would not allow Abdulla to attack
Saudi Arabia.

“In time, Abdulla will probably take over the Jebel Druze and Damascus. 
He will not touch Lebanon which, he said, ‘is like a beehive, very active and
full of honey, but better not stick your finger in.’  At the same time, the
Communists may take over north Syria, the Jezireh, Aleppo, etc.  The
Soviet Minister to Syria and Lebanon, reported to be on indefinite leave or
transfer, suddenly returned to his post.

O. “In our opinion, no Syrian Government formed now will be
stable.  The discontent is too profound.

“Well-known Communist sympathizers among the Arab refugees have been invited
back to their homes by Israel, and have gone back.  Russia is arming Israel
and preparing some day to take over the internal government.  The Israelis
have been successful in winning the favor of observers by lavish hospitality,
including champagne and Jewish women.”

P. “The U.S. Government has
lost both Israel and the Arabs.  Israel is already a tool of Russia. 
The Arabs can never cooperate with Russia but they have lost all faith in the U.S.  Their only hope is to refuse
to agree to any rape of their land.  Let the Jews seize what
they can, they will over-extend themselves and fall in the end.  The Arabs will not and
cannot submit.