Press, in particular Sydney Herald, today carried front page streamer of possibility of mediation by you and Lie on Berlin. This is in line with statement also reported by Fraser broadcasting with Prime Minister that Australia and New Zealand had specific duty to 'contribute to solution of world problems not only physically, but also by advice and counsel'. There is no editorial comment, apparently waiting next move.
2. Hopes are raised on smaller scale but in way similar to the time of Truman's approach to Soviet. I assume this is the case in other countries also. The last attempt failed because Truman misjudged public opinion and would not follow through.
3. Possible method for settlement would be holding of Peace Conference of belligerent powers immediately after the conclusion of the General Assembly or early in New Year, but firm date should be fixed. At this Conference all draft treaties on which Council of Foreign Ministers have been working, and any others which might be put forward, could be discussed, with a view to reaching text agreed by two-thirds majority, subject to ratification by all major belligerents before becoming operative. This procedure would be in accord with spirit of great power agreements yet obviate further delays in Council of Foreign Ministers preparation of unanimous draft treaty and still preserve the claimed rights of the great powers.