In this report the CIA reviews the situation following the July truce in the 1948 war between Israel and the Arabs. They conclude that the mediator, Count Folke Bernadotte, has exacerbated the feelings of both sides and expected the matter to be returned to the UN General Assembly. The report reiterates earlier concern about the Irgun and Stern Gang’s activities, particularly in Jerusalem, where they are trying to make sure the city is part of Israel.
The report says there are approximately 330,000 Arab refugees, which is consistent with the finding of the UN, and far fewer than would later be claimed by critics of Israel. The CIA blames Israel’s refusal to allow refugees to return to their homes for exacerbating Arab dissatisfaction with the Jews.
The truce, the report says, is putting a strain on Israel’s economy and continuation of the truce would be an “intolerable burden.” The Agency says Israel is confident that if a peace agreement is not negotiated it can resume fighting and “force the Arabs out of Palestine.”
“No Arab government is prepared to recognize the existence of a Jewish state or to negotiate directly with representatives of Israel,” according to the CIA.
As in past reports (see for, example, Report on the Consequences of Partition, the CIA is particularly concerned about Soviet involvement in the conflict and the possibility that Iraq and Syria will seek the USSR’s support.
Also, consistent with past reports (see for, example, Possible Developments in Palestine Following Partition Vote) the Agency continues to suggest that the UN resolve the conflict with an alternative to partition and that the Security Council enforce any future decision.