CONNFIRENTIAL

continue to aim at realistic progress towards arms limitation in

the Indian Ocean. Any such arrangements would clearly require

the participation of the US and Soviet Governments; so we support

the suggestion made by the Prime Minister of Australia that the

US and Soviet Governments should consult together on the possibility

of mutual restraint in the Indian Ocean.

39. Oman is fighting against a professionally organised and

externally supported rebellion which threatens the stability of the

Arabian Peninsula, an area of great economic importance to Britain

and from which we receive a lot of our oil. We do not think that

it would be right in present circumstances to make any change in

the forces we station there. We shall, however, make some economies

as our need for staging facilities at Masirah declines, and shall

continue to keep the level of our military assistance to the

Sultan under review.

40. We propose, in present circumstances, to retain forces in

Cyprus, though at reduced strength. In order to ease the severe

accommodation problems that have arisen within the Sovereign Base

Areas (SBAs) since the events of last year, the squadrons of

Lightnings and Hercules permanently based on the island, together

with the Vulcan strike aircraft stationed there in support of CENTO,

have been withdrawn and replaced by smaller numbers of aircraft on

detachment from the United Kingdom. For the same reason there will

be some reduction in Army personnel.

41.

We will retain our membership of the Central Treaty Organisation

(CENTO), but will no longer declare any forces to the Organisation:

the CENTO-assigned Canberras and Nimrods will be withdrawn from Malta

I-18

CONFIDENTIAL

CONFIDENTIAL

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