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Thursday, 4 April 1957

Mr CASEY - Yes. There have been developments, and the matter is under fairly active attention. The United States has presented a note to the Egyptian Government, and the American Ambassador in Cairo has had discussions with President Nasser in the last few days. Without being able to disclose the details that we know of the discussions, I think I can say that the situation does not appear to be in any way satisfactory. What appears to be coming out of the discussions falls very far short ot the six principles that were the subject of a unanimous resolution by the Security Council only a shorttime ago. I cannot predict what will happen from now on. The situation is tense and, I believe, dangerous. What the next move will be,I cannot say; but 1 would expect that, as a result of the Tecent talks in Cairo, the matter will have to go back in one form or another to the United Nations in New York. I am afraid that I have no good news to give in respect ofeither Egyptian-Israeli relationships or the future regime of the Suez Canal. The thing is fluid and, I would believe, dangerous.

Mr Calwell - The canal is fluid?

Mr CASEY - Quite fluid.

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