On December 25th Doctor Shafrudin Prawiranegara, Republican
Minister for Economic Affairs broadcast a radio message from
'somewhere in Sumatra'. In this broadcast which was relayed by
several stations in South-East Asia, Shafrudin announced the
formation of a Republican Emergency Government and outlined the
following conditions under which this Government would agree to
issue a cease-fire order and resume negotiations with the Dutch
(a) immediate release by the Dutch of the Republican Government;

(b) Withdrawal of the Dutch forces to positions of December 18th;

(c) Recognition of the Republic's de jure and de facto sovereignty
over Java, Sumatra and Madura;

(d) Establishment of a democratic and independent Indonesian
Government 'without Dutch intervention';

(e) Withdrawal of all Dutch forces from the whole of Indonesia as
soon as possible.

2. This fits in with the information given me by Hatta on December
19th that authority would be given for the establishment of an
emergency Government in Sumatra. Shafrudin is the logical leader
of such a Government.

3. Official Dutch reactions in Batavia are that Shafrudin's
conditions are 'of course not discussable'.

4. Republican sources claim that the Dutch have encountered
considerable guerilla resistance in their advances into Bandas [1]
and that Republican administration of Bandas is carrying on in the
woods in conjunction with TNI. The Committee's military observers
are unable to confirm this.

5. Military observers believe that the Dutch have now achieved
their main objectives. This means that they have completed their
advances along the main roads and taken the main towns throughout
Java and most of Sumatra. They could therefore issue a 'cease-
fire' order without embarrassment and describe any future
operations as internal security measures. For reasons indicated in
the Committee's latest report [2] to the Security Council such a
cease-fire order could not be effectively observed.