Because of its composition the Consular Commission is likely to be
of more assistance to the Dutch than to the Indonesians.

2. The United Kingdom is anxious that negotiations be resumed with
the Republican leaders as soon as possible and that an interim
Government be formed with the inclusion of figures such as Hatta.

The proposed visit to Bayreut [1] of Netherlands Minister to the
United Kingdom [2] is probably connected with this approach.

3. On the other hand further negotiations would only be useful if
there were a basic change of heart on the part of the Dutch which
we cannot reasonably expect. Moreover with the Netherlands
occupying the whole of Indonesia the Republican leaders may
seriously weaken their popular support if they accept a
dishonourable status in negotiations.

4. The main hope of a negotiated settlement depends upon the
Security Council giving the power of arbitration to a third party
or proposing a settlement on the basis of elections throughout
Indonesia and other suggestions contained in the Committee's
plans.

5. With the Security Council unwilling to take strong action
against the Netherlands the future [of] Nationalism in Indonesia
depends on the strength of the Indonesian people and support of
individual countries in applying sanctions against the Dutch.

Collective action by South East Asia and Middle Eastern countries
would have the further advantage of bringing home to the Western
Powers the dangers of the Netherlands policy. India is considering
the calling of a Pan Asiatic conference on the Indonesian
question.

6. While the Dutch official releases to date contain hardly any
references to sabotage or guerilla activities the Republican
sources claim that this type of resistance is continuing on an
increased scale. These sources claim that the Republican army and
the Indonesians in general are only awaiting the results of the
Security Council proceedings and that should these fail to force a
fair settlement on the Dutch widespread guerilla activities will
endanger Dutch lives and property throughout Indonesia.

7. There are reports that the Dutch after regrouping are
intensifying their drive on the Republican-held areas in Sumatra.