Kashmir.

1. My immediately preceding teletypet contains the text of India's written reply to our proposal, which was given to me at 9 p.m. last night, 26th December, at the Barclay Hotel by Rau. At this meeting Rau was accompanied by Bajpal and Sheikh Abdulla. Arnold Smith, Angle and Carter were with me.

2. As you will see, this reply amounts, in effect to an outright rejection of our proposal, and an uncompromising restatement of India's position on the Kashmir question.

3. Rau stated that they were replying in writing since our proposal had been in writing.

4. I avoided commenting on this reply. I did, however, mention the careful consideration which we had given to all aspects of the Kashmir question, and said that we regarded our proposal, to which we had given much thought, as being equitable to both sides, as well as providing a basis for an expeditious settlement of the Kashmir question.

5. I asked Bajpai and Rau what, in their view, the next step should be. They had no suggestion to make.

6. I advised the Indian representatives of my intention to proceed with the Security Council meeting arranged for 11 a.m. on Wednesday, December 28th. I said that I assumed that it was my duty to the Security Council to report to them, and to make our proposal public, together with the replies of the Indian and Pakistan Governments. Bajpai agreed with this procedure. He stressed, however, that it would not be fair to make India's reply public until Pakistan's reply had also been submitted and that the replies should be made public simultaneously. If Pakistan's reply has not been received by the time the Council meets, Bajpal asked that I do not make his reply known. I agreed that this was fair and also assured Bajpai that we would not in any way give Pakistan any indication of India's reply until Pakistan had submitted its own reply to me.

7. Bajpai said that he recognized the very hard work that had gone into our proposal and the spirit in which it had been submitted. He said he had not failed to report all this, together with all our observations, to his Government. He also hinted at disagreement regarding our proposals within the Government of India. He said that we would recognise that a democratic Government had to take into account public passions and prejudices as well as long-term national considerations. He also said that in communicating his Government's reply to us he was merely doing his duty as a servant of his Government.

8. At the beginning of the meeting, Bajpai had unnecessarily selected a hard chair for himself and said that it was appropriately "a stool of penance". It is also worth reporting, I believe, that Bajpai and Rau appeared somewhat dejected at this meeting, whereas Sheikh Abdulla looked very pleased indeed with himself. The Indian Government's rejection of our proposal is, of course, a triumph for Abdulla.