INDONESIA: SUGGESTED COURSE OF ACTION BY SECURITY COUNCIL
We can assume that the purpose of the Dutch is to clean up the Republic as quickly as possible, capture all influential leaders, and install a regime in Republican territories which will be willing to co-operate in a federal interim government established according to Dutch plans. Their main object is speed. They hope to be able not only to capture all strategic points but to quell all resistance before any positive Security Council counter-measures can come into effect. They then hope to point out that they have restored peace in Indonesia and that any further Security Council sanctions are unnecessary and pointless (as indeed they would be except as a form of punishment) [and]  could not long be sustained.
2. It is clear therefore that the Dutch have weighed the consequences of their action and will take no notice whatever, at any rate for the time being, of any orders to cease fire and return to the status quo.
3. The chances are however that they will not be able to clean things up quickly, but instead will get bogged down in active guerrilla warfare which will not only help to drain their resources but which they will not possibly be able to disguise under a claim to have restored peace. The longer this goes on, the more hostile will be the reaction in other countries, and the better chance there will be for economic or other sanctions applied early to take effect.
4. On a realistic view we might as well assume that only when the Dutch begin to bog down will the Security Council begin to exercise any real influence. Until that time the Dutch will simply refuse to consider any suggestions or demands for early elections under U.N. supervision, satisfactory guarantees for the Republic, etc.
5. If and when that times comes, however, a combination of their own military difficulties in Indonesia and of strong pressures applied from without might be calculated to bring the Dutch to a more tractable frame of mind. It is then that, perhaps under threat of bigger and better economic sanctions, we can once again begin to talk to them about terms of a settlement with the Republic.
6. This suggests to me that our line of action in the Security Council should be somewhat as follows:
(1) Cease fire and withdrawal: This is the obvious first step. The Dutch will however take no notice of it, even if it were immediately backed up by some hastily devised sanction. It would be better therefore not to think of any specific sanctions in connection with a cease fire and withdrawal order but rather to regard sanctions as something to be worked out carefully with a view to a possible long-term 'squeeze' effect.
(2) Sanctions: At the same time we should be making up our mind straight away what lengths we are prepared to go to in imposing sanctions, and how soon they should be applied. If we are to apply sanctions they may as well be effective and the sooner they are brought to bear the sooner they are likely to take effect.
(3) Terms of Settlement: If the Dutch achieve their purpose and succeed in presenting a fait accompli, there will be little point in considering terms of settlement. If they get bogged down, conditions of settlement will become relevant again. The question of possible terms might therefore be left for the moment and meanwhile worked out carefully having regard to events as they develop and to the Cochran  and other plans.