With the cessation of hostilities, now reported to have been
ordered by the Dutch authorities, presumably arbitration on the
dispute will take place.

2. It is suggested, however, that the occupation by the Dutch
forces of considerable areas of territory previously under the
jurisdiction of the Republic will seriously prejudice the process
of arbitration in their favour.

3. In the three days delay in implementing the Security Council's
decision of 1st August, the Dutch forces have captured Tjilatjap,
previously described as the last Republican town of any
importance. The impression is that the Dutch have gained their
objectives and will be quite happy to bring hostilities to an end
if they are permitted to retain their gains. Whatever else happens
post-1st August gains must be surrendered at once.

4. It is suggested that the Australian representative should be
instructed to propose a supplementary motion detailing the methods
by which the Security Council's decision of 1st August will be
implemented. (Draft telegram attached.) [1]

5. Consideration might be given to whether Australia should offer
patrol aircraft to be solely under the orders of the Security
Council for the purposes of observing withdrawal of troops and
reporting on the evacuation by the military forces of both parties
of the areas in which hostilities are being carried out. The legal
position as to whether Australian Forces can be used in this way
would require investigation.