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3. The first issue turns on whether the French Union can and will prevent the loss of Indochina and what further actions, if any the United States can take to bolster or assist the French effort. Some of these questions were covered by the Report of the Special Committee of March 17, 1954. Others are matters of continuous intelligence estimates. At the present time there is clearly a possibility that a trend in the direction of the loss of Indochina to Communist control may become irreversible over the next year in the absence of greater U.S. participation. There is not, however, any certainty that the French have as yet reached the point of being willing to accept a settlement which is unacceptable to U.S. interests or to cease their military efforts. Moreover, regardless of the outcome of the fight at Dienbienphu, there is no indication that a military decision in Indochina is imminent. It is clear that the United States should undertake a maximum diplomatic effort to cause the French and Associated States to continue the fight to a successful conclusion.

4. The attached Annex addresses itself to the second issue: The risks, requirements and consequences of certain alternative forms of U.S. military intervention. In order to permit analysis of military requirements and allied and hostile TOP SECRET Rh