Your telegram 597 of 12th April. [1] Possible Peace Treaty with
Italy.

1. As you know Australian Government's preference has been to
leave final decisions, especially on territorial questions, until
ultimate peace settlement.

2. However, since this view was declared in Australian - New
Zealand Agreement and our telegram 133 of 10th June, 1944 [2], We
recognize that prospects of any early peace treaty with Germany
appear to have become remote, that the complete liberation of
Italy is near and that there may be advantages in not deferring an
Italian settlement indefinitely. We would certainly welcome any
encouragement which an improved status would now give to those
seeking a firmly based democratic regime throughout Italy.

3. Without wishing to commit ourselves finally at this stage we
therefore agree that the possible advantages of an early
settlement with Italy might be further explored, providing
(a) that some satisfactory arrangement is reached at the United
Nations Conference for international trusteeship machinery which
could be applied at an appropriate time to former Italian
Colonies;

(b) that, as closely interested powers, the Soviet Union, France,
Greece and Yugoslavia are not only consulted as to the principle
of an early peace settlement with Italy but are associated from
the beginning in negotiation of terms. [3]

4. In suggesting the above we have in mind mainly your proposal
that the treaty with Italy should be final. On present
information, however, we do not feel convinced that for the
purpose in mind a final treaty has any advantages over a
preliminary treaty as proposed earlier, and would welcome views on
this point.