The Netherlands special delegation  returned to Batavia on 1st December to confer with five faction leaders from the Dutch lower House. 
2. Discussions at Kaliurang were held in a favourable atmosphere.
Most of the discussions were concerned with incidents and truce violations. The Netherlands presented a memorandum  setting out the measures expected from the Republican Government by the Netherlands. The tone of this memorandum was most peremptory and measures were found impossible by the Republican delegation and the Government. The Republic submitted a counter memorandum  which failed to satisfy the Netherlands delegation. Hatta then informed the Netherlands Minister that it would be impossible for him to take stronger unilateral action in relation to the truce than had been taken in the last few days in the broadcasts and orders to the Army. He suggested, however, a joint communique  of the Government of the Netherlands and the Government of the Republic which has been taken into consideration by the Minister.
3. The only other matters discussed were the powers of the High Representative of the Crown in the interim period and the organisation of the Federal army and the dissolution of the TNI.
Some progress was made but the parties have failed so far to find a formula for overcoming such problems as the Supreme Commander of the Federal armed forces and the co-operation of the Federal and Dutch forces in the interim period. A commendable Republican suggestion was that the Sultan of Djokja, who enjoys wide personal respect should be Minister of Defence and or Commander-in-Chief of the Federal armed forces in the interim period.
4. Hatta has insisted that the Dutch forces should only be used in an emergency [in] Indonesia at the request of the interim Federal Government. Sassen claims  this is a withdrawal from the position taken by Hatta in his aide-memoire  but Hatta replies that this is a misunderstanding of the aide-memoire and is forwarding a letter to the Netherlands Minister.  The Dutch regard this letter as crucial and will make no further decisions until it is received.
5. Stikker was more co-operative than other members of the Netherlands Party and impressed the Republicans as sincerely seeking a solution of the difficulties.
6. The Netherlands Delegation had intended to return to Kaliurang for further informal discussions. Republican political parties, however, are now strongly opposed to any informal discussions outside the G.O.C. and are insisting that Hatta and delegation only resume negotiations under the auspices of the Committee. In particular, the policy statement (see my immediately following telegram) of Masjumi, which furnishes the main political support of the Republican Government, and is therefore of special importance, makes further informal talks outside the Committee well-nigh impossible. There is, therefore, no clear understanding as to the next stage of negotiations. I have stressed with Cochran the necessity for ensuring that this vacuum does not last long.
Cochran has agreed not to interfere with Stikker's efforts for the next day or two pending the receipt of letter referred to in paragraph four.
7. Hatta's position is uncertain. All political parties, including the moderate Partai Kristen Indonesia, consider that he went to the limit, if not too far, in his aidememoire. A stormy meeting of Cabinet was held on December 1st, and a closed session of KNIP on December 2nd, may decide whether Hatta can successfully weather the storm. These political difficulties of Hatta underline the necessity of the Dutch assisting him, rather than undermining his popular support by demanding far reaching concessions at the outset.
8. Nehru has advised the Republican Government to stand firm on all essential points including;
(a) the Statute of the Union, (b) the position of the Army in the interim period, (c) elections to a constituent assembly within a prescribed period of time, and (d) continuation of international supervision in the form of G.O.C.
He has also advised that in his opinion there is little immediate prospect of an action and that negotiations should be returned to the G.O.C. as soon as possible.
9. Sukarno issued an order of the day to the Republican Army on the night of November 29th to the effect that the Republican Government would hold on strongly to the standpoint of a National Government and a National Army.
10. The capture of Sjarifuddin, Suripno by the Republican Government forces  marks the end of the Communist uprising in so far as there are no important leaders left at large.