Reference 1079 from Washington  reporting State Department is against mediation and arbitration, we have just learned of Dutch offer to meet Republican and other representatives at round table conference to work out United States of Indonesia. 
It would be unwise to oppose what might appear to be Dutch move to reach peaceful settlement even though Dutch proposals cannot reasonably be justified as fair and just. Best approach and one which also answers State Department is to point out necessity for Indonesian agreement with any proposals put forward they being one party to the dispute.
The suggestion that Dutch Government will invite some neutrals to observe cease fire (paragraph 3c Washington 1079) is ridiculous unless agreed to by Indonesia who no doubt will insist in taking part in the nomination of Neutral Governments.
We have shown up emptiness of American offer and forced Dutch to make conciliatory move. What is necessary now is to maintain Security Council decision, the authority and jurisdiction of the Council and point out Indonesian full rights as one party to determine peaceful means of settlement of dispute.
Your 747  just received. This seems an empty resolution as compared with original move for arbitration.  You should therefore see how debate goes with a view to taking opportunity of putting forward previous proposals for arbitration by small group and also for group of observers. 
Your 746  just received. It is too early for Sjahrir or ourselves to weaken under American pressure and absence of instruction from his Government can only be interpreted as implying no change in their policy which is insistence on arbitration. Delay for Foote's report cannot be justified.
Moreover Foote's failure to invite Australian representative equally concerned in this matter to accompany him to Djokjakarta means that American reports of Indonesian attitude have no validity based on confirmation by a third party.
Sjahrir will require encouragement at this stage and it would be unwise for us to move from position we have already adopted and which Indonesians have already accepted.