Hatta has reaffirmed that in recent informal talks Van Mook went no further than I have already reported.  Hatta personally believes that Van Mook is looking towards a settlement but is restricted by the reactionary policy of The Hague.
2. The Dutch may now be expected to concentrate on setting up a provisional Government to their liking. After the Dutch elections next week and following amendments to the Netherlands constitution in preparation for the United States of Indonesia and the consent of the Provisional Government of the Indonesian Union, a bill will most probably be introduced into the new Parliament giving the Indonesian Provision[al] Government its first constitutional powers. The support of the Federal Government for such a bill has been specially brought to the attention of prominent Netherlands politicians who recently visited the country.  The bill would be introduced whether or not the Republican Government agreed to participate in the Provisional Federal Government, but in the event of Republic [participating] , Van Mook would probably insist on selecting both Republican Representatives and their portfolios. Van Vredenburch will probably discuss provisions of the bill with the Dutch Government when he returns to Holland on Thursday.
3. This outline indicates the real nature of present Dutch delaying tactics. They are keeping up the appearance of negotiating with the Republic but in fact are pursuing unilaterally their own programme.
4. The Dutch will endeavour to keep a firm control of the Provisional Government. Nevertheless there may be a possibility of a settlement with the Republicans if the Dutch are prepared to bind themselves to a programme of elections to a constitutional assembly and creation of a fully sovereign United States of Indonesia as outlined in our proposals.
5. The major difficulty will be the Dutch insistence on the restoration of law and order in the Republic before the elections are held. Even the minimum difficulty could possibly be overcome if the Dutch would give a guaranteed date for the final transfer [of]  sovereignty as required by principle one of the six additional principles.  Unfortunately the Dutch appear to underestimate the intensity of national spirit in the Republican youth who would revolt if the Dutch were to enter into Republican territory.
6. Both Masjuma and P.N.I. have accepted the United States - Australian proposals.
7. Following impasse in meeting of the Steering Committee on Tuesday, June 29th, I tried to persuade the Committee of Good Offices to report fully to the Security Council and to ask for further instructions. Other members of the Committee were however extremely reluctant and only agreed to report amendment of my immediately preceding telegram.