1

Sultan of Oman. As we have already announced, we intend to enter

into negotiations with the South African Government with a view to

terminating the Simonstown Agreement.

7.

We recognise that some of these decisions have implications for

our interests and the interests of our friends in the Indian Ocean area,

where the further expansion of the Soviet naval presence cannot be.

disregarded. We have accordingly decided to agree to proposals from

the United States Government for a relatively modest expansion of the

facilities on the island of Diego Garcia which they enjoy under an

existing agreement with Her Majesty's Government.

We ourselves will

benefit from these facilities since we shall be able to use them.

i

circumstances should arise which were other than normal, the use of

the facilities would be a matter for joint decision.

We and the

United States Government will pursue consultations with the aim of

developing realistic progress toward arms limitation in the Indian

Ocean area.

}

If

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