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No confirmation has been received of the presence of Italian troops in Germany or on the Western Front. One source has, however, suggested the possibility of German formations being moved through Italy to Africa. When the situation in France has been settled German domination is likely to come more and more into the open and Italy, inspired and aided by Germany, may undertake more active offensive operations.
26. The situation in Egypt may be regarded as satisfactory. Over 85 per cent. Italian suspects have been secured. In the Western Desert our forces captured the forts of Capuzzo and Madalena and took as prisoners eight officers and two hundred other ranks. In the same area 12 tanks, 6 guns and 7 lorries were captured from the Italians, who are reported as demoralised by our attack. There were no British casualties, but about 50 Italians were killed and wounded, and over 200 taken prisoner. Middle East air operations are reported in later paragraphs.
The Balkan States.
27. In Roumania, Gestapo cells are reported to have been set up near Bucharest, in the oil district at Ploesti, and at four ports on the Danube. Since the beginning of May more than one report has been received from Hungary of the presence of Hungarian Staff Officers, troops and police in South Poland, the Protectorate, and Slovakia.
U.S.S.R.
28. All reports received during the week tend to confirm the movement of Soviet troops towards their Western frontiers. The fact that the Soviet Union is becoming increasingly nervous as a result of German successes in the West was strikingly evidenced by the sudden ultimatum presented to Lithuania, and the subsequent occupation by large forces of additional bases in that country, Latvia and Estonia. There are definite indications that the Soviet move into the Baltic States was undertaken by Moscow without prior consultation with the German Government.
Far East.
29. After the successful conclusion of the Ichang operation, the next step in the Japanese campaign in China is directed against China's munition supply routes. An operation to cut the channel of communication between the Hong Kong Leased Territory and Chinese guerilla forces in the East River district (east of Canton) is probable in the near future. While the present Japanese Govern- ment continues to exercise a moderating influence, the events of the last few days in France have given considerable encouragement to extremist military circles.
General Review.
AIR SITUATION.
30. During the early part of the week both air forces were concentrating on operations on the Western Front, but with the collapse of French resistance strategical attacks were resumed. Bomber Command carried out extensive attacks on communications and industrial targets in Germany, and the German air force made two raids in considerable force, which marked the beginning of attacks on industry in this country. Attacks on Italy were continued, but our aircraft and servicing units have now been withdrawn from Southern France. Coastal Command flew a large number of armed reconnaissances off the Norwegian and Dutch coasts, and a number of attacks were made an enemy shipping. Five promising attacks were made on submarines. Our air operations in the Middle East continue to be considerably more successful than those of the enemy.
Air Defence of Great Britain.
31. This week has been marked by the initiation of German air attacks against industry in this country, though so far damage and casualties have not
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