(a) Cease Fire Interpretation (1) The G.O.C. agreed unanimously today  that 'Territory which was not occupied or controlled on August 4th' is territory which on August 4th was not 'actually under authority of the hostile army'. Occupation or control on August 4th, within the meaning of the resolution of November 1st, did not 'extend' to territory where such authority 'had not been established' and could not 'be exercised' effectively without 'movement of armed forces of one party in any direction, which movement might reasonably be expected to provoke retaliatory action by other party'.
The occupation or control by either party of any territory which was not occupied or controlled as defined above on August 4th is inconsistent with the resolutions of August 1st and November 1st.
Steps for rectification should proceed as quickly as possible in accordance with the truce plan submitted by the Committee to both parties for determination of the demilitarised zone.
(2) Herremans, in agreeing, made proviso that Van Zeeland might over-rule him. Graham then made clear that in this eventuality he would (word apparently omitted) majority decision on basis of stronger definitions agreed to by the United States and ourselves.
I also stated that if the plan was not accepted I would move that the parties be asked whether they would withdraw to positions occupied on August 4th.
(3) I understand that Tamzil in conversation with the Chinese Consul-General was told orally that China would not oppose the Dutch having to move back from the present perimeters if the Republic agreed to arming of Pau An Tui.  Tamzil has asked for information in writing and the Consul-General has invited him to work out details together. The importance of this development if the matter, as I expect, goes to the Security Council is obvious.
(b) Political Talks (1) Beginning today the G.O.C. will hold formal but closed political discussions with each of the parties on alternative days. This will put on record the position of the Netherlands delegation which today reveal to the surprise only of the Americans that there was no real agreement at Linggadjati.
Netherlands position is that the text of the Agreement is entirely subject to later elucidations of the Commission-General, Parliament, and Official Netherlands correspondence.  For example, clause 1 of the Agreement is regarded by the Netherlands as recognition of Republic . . . only to give them a chance to prove that as a Government they could exercise authority over certain territories in a democratic way. The absurdity of this position is brought out by the fact that the Netherlands Delegation states that interpretations were in the minds of the Commission-General when it initialled the Agreement.
(2) I have tabled a working document suggesting a proposal on the United States-Philippines pattern.  The United States, however, are determined to go ahead exploring the positions of the parties, using Linggadjati as agenda. Apart from the delay which is now inevitable, I cannot see that this matters, particularly as the Netherlands were obviously embarrassed by the Committee's questions today. When after a week or 10 days it becomes obvious that there is no basis for agreement, the Committee will have to propose to all  parties that it make suggestions. If accepted this will provide the best opportunity of pressing our views; if rejected there would be no alternative to reference back to the Security Council, although I realise that from our point of view this may be too late.
(c) Possible Second Police Action A major pre-occupation at present is to thwart a second and final Police Action which is by no means out of the question, particularly when the Dutch hear of hardening attitude of the Committee. I hope to report on this tomorrow when I expect to have fuller information.
(d) Miscellaneous Van Vredenburch told us today it was not yet decided whether Jonkman would come to Indonesia.