With the cessation of hostilities, now reported to have been ordered by the Dutch authorities, presumably arbitration on the dispute will take place.
2. It is suggested, however, that the occupation by the Dutch forces of considerable areas of territory previously under the jurisdiction of the Republic will seriously prejudice the process of arbitration in their favour.
3. In the three days delay in implementing the Security Council's decision of 1st August, the Dutch forces have captured Tjilatjap, previously described as the last Republican town of any importance. The impression is that the Dutch have gained their objectives and will be quite happy to bring hostilities to an end if they are permitted to retain their gains. Whatever else happens post-1st August gains must be surrendered at once.
4. It is suggested that the Australian representative should be instructed to propose a supplementary motion detailing the methods by which the Security Council's decision of 1st August will be implemented. (Draft telegram attached.) 
5. Consideration might be given to whether Australia should offer patrol aircraft to be solely under the orders of the Security Council for the purposes of observing withdrawal of troops and reporting on the evacuation by the military forces of both parties of the areas in which hostilities are being carried out. The legal position as to whether Australian Forces can be used in this way would require investigation.