INDONESIA

Americans did not in fact submit resolution [1] to Council
yesterday and according to Hood are still undecided whether to do
so Monday. They do not want another abortive resolution and at
same time they do not want to be party to some compromise which
will put Republic in worse position than it is now.

Hood has telegraphed lengthy U.S. draft resolution on lines
foreshadowed in Working Paper. [2] Main objection to it appears to
be that it calls upon parties to resume negotiations on basis of
Cochran proposals [3] under auspices of United Nations Commission
and to reach agreement to enable establishment of Interim Federal
Government not later than 15th March. If no agreement reached by
1st March Commission to submit to Security Council its own
recommendations for settlement. As we have pointed out to Hood,
this would simply mean returning to position as it stood before
police action, and there is no reason to hope that resumption of
negotiations would help Republic to secure settlement on
reasonable terms. Only satisfactory course at this stage would
seem to be for Council itself to lay down terms of settlement.

Difficulty is to draw up satisfactory terms at short notice for
incorporation in pending resolution. Solution might be for Council
to give its Commission three weeks in which to draw up just and
workable settlement (working by majority vote and consulting the
parties as necessary) and present it to Council which could then
endorse and promulgate it.

As regards withdrawal of Dutch troops, United States draft
resolution provides for withdrawal by stages under supervision of
United Nations Commission. Hood reports that Republican delegates
in New York are now opposed to immediate withdrawal, which would
saddle Republic with serious administrative difficulties and
invite chaos.

At Friday's Security Council meeting, following Van Royen's
statement, Cadogan found Dutch statement of plans 're-assuring'
while Hood described them as misleading and as altogether ignoring
Republic. [4] He used eyewitness reports of conditions in Republic
to refute Dutch claims that there is little guerilla activity and
to show that Dutch are distributing food and clothing only to
Indonesians who helped them.

McIntyre will be in Melbourne to-morrow with latest cables and for
consultation if necessary.