Have had several talks with Mike and State in attempt to keep Hawk/Johnson Plan/Nasser dilemma from getting out of control. Since Mike has already told Jewish leaders in confidence about Hawks (he urged no public comment before 28 September but naturally feels it may leak sooner), next two problems are (a) how to preserve at least fighting chance for Johnson Plan; (b) how to keep US/UAR rapprochement from going off rails.
Mike is very goosy about Johnson Plan, thinks we have over-committed our prestige to it, and would like to start disengaging. One thing upsetting him is that he told Israelis they would have final word on admitting any refugee. However, Johnson himself later altered final version of Plan (para. 10) to call for UN impartial arbitration of any conflict over admissibility. Israelis immediately hopped on this as derogation of their sovereignty and Mike feels he's been put in difficult spot. He doesn't see a prayer of Israelis buying Plan with this in it.
In any case, I argued vigorously to Mike that we ought to play out hand on Johnson Plan, papering over above crack if possible. After all, US prestige is already committed to Plan--JFK has written Ben Gurion, Nasser, and Hussein about it and to retreat now would be a real loss of face. Moreover, so what if US prestige is attached to a failure; we discounted this in advance, arguing that it was to US advantage to have made a real effort at solving refugee problem. This would permit us subsequently to justify disengaging gradually from UNRWA and shifting burden to area states themselves. State feels the same way; indeed there are optimists who think Johnson chances slightly improved, largely as result of UAR restraint to date.
As to some token that we still desire to improve our relations with Nasser (which means giving Kaissouni something while he here for IMF meeting), I think we should approve State suggestion of announcing $10 million final installment of stabilization contribution if Europeans ready to match it), plus a private promise that we will sign multi-year PL-480 as soon as Congress adjourns. Opposition to PL-480 announcement is not that it would upset Israelis; Mike says he and JFK would have no objections on these grounds. Problem arises from general stop-order which aid bill managers have put on announcing any major agreements until bill passed. Announcing a $400 million PL-480 deal with Nasser could create enough of a stink that we should seek to avoid it.
1. Rusk has approved above, but don't you think we should at least clue JFK on it in advance (I recall his annoyed reaction when he discovered we gave a couple of hundred million in PL-480 last year). Also we need authority to override stop-order on aid agreements.
2. Also urge that you emphasize to President that we should not disengage too quickly from Johnson Plan. Let's let nature take its course--there's still a slim chance plan might work. If not, let someone else torpedo it. For us to torpedo our own brain-child is neither necessary nor becoming. In fact I've suggested Mike plug same idea with Israelis. Why should they get out in front on wrecking Johnson Plan; let Arabs take the onus.