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Approved for Release: 2020/08/11 C02000174 # The Situation in Laos Government forces south of Xieng Khouang have received a further setback. The capture by Kong Le - Pathet Lao troops of the village outpost of Ban Ta Viang was apparently intended at least to disrupt General Phoumi's plans for a multipronged offensive designed to retake the Plaine des Jarres area and could signal a rebel intent to push southward toward Pak Sane. In the latter event, an early target would probably be Tha Thom, an important Phoumi base about 15 miles east of Ban Ta Viang. Phoumi, however, continues optimistic that his T-6 aircraft now flying ground-support operations in the Ban Ta Viang area, together with reinforcements recently sent to Tha Thom, will shortly enable him to proceed with his own offensive. Chinese Nationalist officials apparently still want their irregular troops in Burma to have some role in Laos. Ex-Premier Phoui is considering a trip to Phnom Penh to discuss with Souvanna Phouma a broadly based government in Laos. Phoui has told American Embassy officials in Vientiane that it is essential for Souvanna to return, and that Souvanna might be induced to accept a government representing all political shades minus the Communist-front Neo Lao Hak Sat as a preliminary to "complete national reconciliation." Phoui feels strongly that Laos can never be won by force of arms and that the present government does not enjoy sufficient popular support. On 14 January Communist China joined the USSR and North Vietnam in endorsing the proposal made by Cambodia's Prince TOP SECRET 16 Jan 61 CENTRAL INTELLIGENCE BULLETIN Page 3 Approved for Release: 2020/08/11 C02000174

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