While it is difficult to assign a time at which the situation in the Middle East has been at all encouraging in its general aspect, the decision by Premier Mohammed Mossadegh of Iran to break off relations with Great Britain brings the outlook for improvement in that region to a new shade of dimness.

The history of the altercation between Great Britain and Iran is well known and needs no recapitulation here, but it is proper to mention that the relations between the two countries have reached such a point that formal cancellation was hardly necessary. In the past nine months, British diplomatic posts in Iran have been practically eliminated, and communications between British and Iran commonly confined themselves to the business of making new proposals in the oil dispute or rejecting those which had already been made.

The latest rejection by the British concerned the proposal by Premier Mossadegh’s demands that Britain pay his government approximately $137,000,000 in royalties[,] the proprietorship of which has been disputed.

Upon receiving this note of rejection and what amounted to a lecture on diplomatic courtesy from the British Foreign Office, Mossadegh abruptly slashed all diplomatic ties with Britain. The results of this insofar as the oil situation will not be so drastic as the results from a diplomatic point of view and their effects on the course of action to be followed by other Middle Eastern countries whose relations with Britain have not been too comfortable.

It has been pointed out by observers that the Iranian matter has occurred when the United Nations Assembly has before it three other major problems affecting the same explosive part of the world. These involve the claims of Morocco and Tunisia for their independence from France and the fate of the Arab refugees from Palestine. The decline of British prestige in the Middle East, together with the rather ineffectual operations of the United States Department of State in connection with the Iranian and other problems of that region, have opened the way for strong speculation concerning the attitude of the Soviet Union toward developments there.

Altogether, the prospects for any settlement of the various disputes or, indeed, a climate for discussion favorable to the western powers are not bright. While there will be general agreement with John Foster Dulles, Republican foreign policy advisor, that “to lose the good will of our friends in the Middle East would be another tragic disaster of immense proportions”, neither Mr. Dulles nor the present Secretary of State, Mr. Acheson, has come forth with any promising arrangement by which the situation may be improved, nor has Mr. Eden, the British foreign secretary. Certainly Premier Mossadegh is not being helpful.

[Dean Acheson, Anthony Eden. Dulles statement from Oct. 16, 1952]