Security 438 (repeated as 435).
1. The Indonesian question came forward for discussion late this afternoon  (first part of the session was devoted to statements by Albania and Bulgaria on Greece).
2. We supported the request of the Philippines to participate but the resolution to issue invitation received only six votes (Australia, United States, Syria, China, Brazil and Colombia).
3. India then reviewed the history of the case stressing the unilateral interpretation of Linggadjati Agreement by the Netherlands. Sen then referred to telegrams from the Indonesian Government urging the withdrawal of Netherlands forces to the October demarcation lines and the appointment of an international commission of arbitration.  He suggested that the Council should take action to meet these requests.
4. Van Kleffens made a general statement attempting to justify the Netherlands action since the passage of the Council resolution, in particular, the occupation of Madura, which he claimed was essential to save the population from starvation (see also our 736 ).
5. We then analysed the situation stressing the lack of stabilising factors which were present when the truce of October 1946 was negotiated (your 437  paragraph 3) and the danger that the situation might deteriorate if action was not taken quickly to reopen negotiations. We drew attention to charges and counter- charges which had already been made and which might have been avoided if our proposal for the despatch of an observer by the Secretariat had been adopted. We suggested that the Council should either instruct the Secretary-General to send an official or might send out a small commission to observe the implementation of cease fire orders.
We pointed out however that this was a short range plan only and that it was even more important that steps should be taken as soon as possible to ensure that the second part of the Council's resolution was implemented. We stressed the fact that good offices or even mediation was insufficient and that Australia had understood the resolution to call for arbitration. The only offer which had hitherto been made was by the United States for mediation and that the Indonesian Government had asked for arbitration by more than one power. At this point we drew attention of the Council to the offer of joint mediation and arbitration, quoting from the Prime Minister's statement.  Finally we indicated that at the next meeting of the Council (probably Tuesday) we would submit a resolution to give effect to our proposals.
6. Today's action will enable us to continue initiative when Council resumes. What we have in mind is resolution noting and approving United States and the Australian offers and possibly appointing a small commission which could observe and report to the Council. Such a commission might enable the Indonesians who are committed to larger body to accept joint United States- Australian arbitration without loss of face. If you approve we will work along these lines over the weekend and will try to persuade Sjahrir who is expected in New York tomorrow to accept them on behalf of the Indonesian Government.