Monday, May. 10, 1982

Now, Alas, the Guns of May

By George Russell

COVER STORY

Negotiations collapse, and the British attack

Early this morning, British aircraft took action to enforce the total exclusion zone and to deny the Argentines use of the airport at Port Stanley." That terse announcement from Britain's Defense Ministry last Saturday confirmed what the world had steadily come to fear after a month of failed diplomacy: the war was on for possession of the remote, frigid, sparsely populated Falkland Islands.

In a sudden spate of attacks, British warplanes swept in over Port Stanley, the Falklands' tiny capital, and struck at the 4,000-ft. airstrip held since Argentina invaded the islands on April 2. First came a long-range, delta-winged Vulcan bomber from a base at Ascension Island, some 3,800 miles away. The Vulcan refueled in the air on the way to its target, dropped 21 half-ton bombs and, said a British defense official in London, left the airfield "severely cratered."

About three hours later, carrier-based Sea Harrier jets armed with 1,000-lb. bombs and cannons swooped in again on the airfield, pounded it and then streaked back out over the South Atlantic. In a separate strike, British jets attacked a grassy airfield 50 miles away, near the settlement of Goose Green (see map). Though one Harrier reportedly suffered minor damage, British officials called the series of missions a success and reported: "All aircraft and personnel returned safely." British warships also shelled the Port Stanley airport and perhaps other military positions along the Falklands coastline. A British Sea King helicopter was also said to have launched a strafing attack near the settlement of Darwin, hard by Goose Green.

The outburst of hostilities confirmed Britain's determination to enforce the total air and sea blockade of the Falklands that went into effect at 7 a.m. Eastern Daylight Time Friday. At that point, British government spokesmen had made it clear that Argentine planes on the ground, including the Italian-built Aermacchi light attack aircraft spotted on the islands, would be considered in violation of the ban on all non-British craft within a 200-mile radius of the islands.

The attack, if it did in fact make the Port Stanley strip unusable, meant that the British had virtually destroyed Argentina's ability to resupply its roughly 10,000 troops in the Falklands. The air assault had also considerably eased the task of protecting the British task force of 60-odd ships, some of which were now on battle stations within a few miles of the Falklands. In addition, the attack prepared the way for a possible full-scale invasion of the islands. According to the Argentines, the British task force commander, Rear Admiral John ("Sandy") Woodward, who celebrated his 50th birthday on the day of the action, broadcast a demand for surrender to the troops occupying Port Stanley. "No way--we're winning," replied the local Argentine commander. He added: "Bring on the little prince," a reference to Britain's Prince Andrew, 22, a helicopter pilot with the fleet.

On the mainland, the Argentine junta denounced Britain's aggressive action, but denied that the Port Stanley airfield had been taken out of operation at all. The Argentines also claimed that their antiaircraft gunners at Port Stanley had downed two Sea Harriers, killing one pilot and capturing another. The Argentines said that a third plane had been hit and was seen "falling into the sea." By Sunday, they claimed to have shot down seven British aircraft. Air force officials in Buenos Aires admitted that three Argentine soldiers were killed and seven wounded in the attacks, but they insisted that ground defenses on the island had not been damaged "in the least."

The Argentines sent six Israeli-built Dagger jets against the British fleet in retaliation, and claimed to have badly damaged at least one British vessel. The British admitted that a frigate had suffered minor damage and one sailor had been wounded, but said that they had downed at least two Argentine planes.

Amid the welter of claims and counterclaims, President Ronald Reagan told reporters in Washington that the attack had come as a "complete surprise" to him. He said that it would not deter the U.S. from seeking a peaceful solution to the conflict, even though the U.S. had openly declared its support for Britain only a day earlier. Declared Reagan: "All I know is we will stand ready to help."

The clashes followed Secretary of State Alexander Haig's stark warning on Friday that "the South Atlantic crisis is about to enter a new and dangerous phase, in which large-scale military action is likely." The showdown had indeed seemed inevitable by the end of last week as British forces imposed their total blockade and Argentine troops dug in to defend the territory they had themselves seized by force.

After weeks of intense negotiation, Haig had admitted failure in the U.S. effort to bring about a diplomatic settlement in the Falklands crisis. He left no doubt that the blame lay with the aggressor, Argentina, and announced that the U.S. was finally abandoning its formal stance of neutrality in the dispute. Effective immediately, the U.S. was joining 14 other Western nations in imposing some form of economic sanctions on Argentina.

Specifically, the U.S. announced that it was:

> Suspending all military exports to Argentina.

> Withholding certification of Argentine eligibility for military sales.

>Suspending new Export-Import Bank credits and loan guarantees.

>Suspending loan guarantees of the U.S. Commodity Credit Corporation.

In addition, Haig said that the U.S. would provide "materiel support" for the British forces if requested. That is likely to include fuel for warships and aircraft at relatively close range to the disputed zone. Until now the U.S. had provided weather and satellite intelligence information, and aircraft refueling at Ascension Island, where Britain and the U.S. share an airbase. Haig stressed, however, that there would be "no direct U.S. military involvement" in the Falklands.

Haig's announcement may have been intended in part to move the Argentines into resuming negotiations. In any case, the U.S. actions had an immediate effect. Within minutes after the Secretary of State finished making his statement in Washington Friday morning, Argentine Foreign Minister Nicanor Costa Mendez appeared at the United Nations to declare that his country "is always willing" to comply with an April 3 U.N. Security Council resolution calling for cessation of hostilities between Britain and Argentina, for Argentine withdrawal of its occupying troops from the Falklands and for negotiations between the parties. He went on, however, to declare that Argentina's claim of sovereignty over the islands, which Argentina calls the Malvinas, is "non-negotiable."

Costa Mendez's remarks may have been a bid for one last peace-keeping effort, possibly under the aegis of the U.N. and its Secretary-General, Javier Perez de Cuellar. Even though British Prime Minister Margaret Thatcher had earlier ruled out the possibility of any U.N.-sponsored peace effort, British Foreign Secretary Francis Pym announced in London that he would be returning to the U.S., first to consult with Secretary of State Haig and then to visit the U.N. in Manhattan. But Pym also had tough words for Costa Mendez: "Let him put his money where his mouth is. All the junta has to do is officially apply for British transit permission for troops to be withdrawn [from the islands]."

Like many Britons, Pym was pleased at the long-expected news that the U.S., which had tried for weeks to mediate the Falklands dispute, had officially moved to support its staunchest ally. Said Pym: "To have the world's most powerful state on our side must make Argentina see that aggression cannot pay. The British people are deeply grateful to the U.S., and especially to Mr. Haig for his remarkable efforts."

Despite the last-minute diplomatic activity, the air strikes confirmed explosively that time had finally run out in the Falklands. Hours before the British total blockade of the disputed islands went into effect, the Argentines had announced a reciprocal blockade. Any airplane or ship from either country caught within 200 miles of the Falklands was liable to be attacked. Argentina's intention to carry the fight to the British fleet meant that a major air or sea battle might start at any moment.

British warships led by the aircraft carriers Hermes and Invincible had nosed into position around the Falklands. The big ships, guarded by antisubmarine frigates and nuclear-powered hunter submarines, were as close as 90 miles to shore, while destroyers interposed themselves between the islands and the mainland to set up a radar "picket" about 100 miles west of the Falklands. Fighting 40-to-50-m.p.h. winds that whipped the frigid seas into 40-ft. waves--momentarily leaving the propellers of the lighter frigates spinning in mid-air--the British task force had begun an effort to choke off supplies to the occupiers, while Royal Marine commandos prepared for hit-and-run raids to demoralize the Argentine troops. There were unconfirmed reports that British commando units were already ashore in the archipelago, gathering intelligence and possibly preparing for a full-scale British invasion. The Argentine occupying force on the islands, according to Argentina's military governor of the Falklands, General Mario Benjamin Menendez, was in a state of "total alert," expecting an assault that could come, in Menendez's words, "at any minute." The innocent bystanders of the Falklands dispute, the 1,800 English-speaking residents of the islands, had mostly evacuated to the countryside or taken the opportunity to leave the islands.

Compounding the tension were concerns about what role, if any, the Soviets might play if serious fighting began. Soviet spy ships had dogged the British armada as it made its slow way down the South Atlantic to the Falklands. In private conversations with Secretary of State Haig, Argentina's Costa Mendez had warned that his country might turn to the Soviet Union for military assistance in the event of a British attack. Haig was unfazed by the threat, but the very mention of possible Soviet involvement added yet another level of possible trouble that might arise from the situation.

Despite the complexities caused by both U.S. and Soviet interests in the outcome, the Falklands showdown remained the oddity it has been from the beginning: a case of 19th century gunboat confrontation in the late 20th century. The last-minute oscillations between peace and war were a product of the very nature of the face-off. Britain's firm conviction throughout has been that only by means of the steady escalation of both military and diplomatic pressure could Argentina be forced to relinquish a prize that it had taken by an illegal armed invasion. As Prime Minister Thatcher, the Iron Lady of British politics, told the House of Commons last week, "Gentle persuasion is not going to make the Argentine government give up what it has seized by force." The broader principle was that anything less than determined resistance to the Argentine invasion would, to use the words of Haig, "condone the use of unlawful force to resolve disputes."

If there was any doubt that the British were prepared to use force decisively to retake the Falklands, it was dispelled on April 25. At dawn's first light, more than 100 members of M Company, 42nd Commando, of the Royal Marines were landed on remote and mountainous South Georgia Island, a British dependency some 800 miles east of the Falklands. By 6 that evening, Prime Minister Thatcher was able to enjoin Britons to "rejoice, rejoice," as she and Defense Secretary John Nott announced the recapture of their first objective in the South Atlantic without a single British casualty. Fighting continued on South Georgia, however, until at least 10 a.m. the following day.

The assault on South Georgia offered the first concrete insight into the ways Britain might fight its difficult war in the Falklands. Even as Foreign Secretary Pym conferred in Washington with Secretary of State Haig on April 22 about a possible diplomatic solution to the crisis, as many as a dozen members of Britain's elite Special Boat Squadron, an ultra-secret frogman-commando unit, had slipped quietly ashore on the island. Their mission was to scout Argentine troop emplacements and estimate the size of the opposing force. The scouts reported that the Argentine troops at the South Georgia harbor of Grytviken, the site of an abandoned whaling station, numbered no more than 44.

On Sunday, as two helicopters ferried reconnaissance units to the 100-mile-long island, the British had a stroke of luck. Some five miles from South Georgia, the chopper pilots spotted the Argentine submarine Santa Fe moving toward Grytviken. The British fired at the sub, a diesel-powered craft built in 1944 by the U.S., with machine guns and rockets. They scored at least three hits on the vessel, which began leaking oil and giving off smoke. The stricken Santa Fe limped into Grytviken harbor to beach itself. As about 50 Argentine troops poured off the vessel, the British saw that they had intercepted reinforcements for the garrison. The British commander of the South Georgia task force decided to advance the timing of his attack. As Royal Marines Spokesman Lieut. Colonel Tim Donkin in London later summed up the decision: "He judged it right to move, and then to move very swiftly."

British naval guns pounded the area around Grytviken to clear a landing zone for helicopters, taking care, meanwhile, to avoid hitting Argentine troop concentrations in order to minimize casualties. When the Royal Marines, backed by a few army troops, finally came ashore, the initial firefight was reportedly brisk and brief. Within two hours after the landing, a white flag was hoisted by the Argentine commander at Grytviken, and a short while later the blue and white Argentine flag was hauled down. After securing Grytviken, the British were able to make radio contact with a second garrison of 16 Argentine soldiers at another harbor, Lieth, some 20 miles away. Those troops refused to surrender, making a further mopping-up necessary. In the end the British captured 156 Argentine soldiers and sailors and 38 Argentine civilians in the operation. Only one man was wounded, a Santa Fe crewman whose leg was later amputated by a British navy surgeon. (Another Argentine was later reported to have died "in a serious incident." The British gave no further details but announced an investigation.) The British promised to return their Argentine prisoners to the mainland. In a gesture of civility uncommon in modern warfare, the commanders of the Santa Fe and the Argentine garrison were entertained at dinner aboard a task-force vessel following the victory. The Argentines, according to Royal Marines Spokesman Donkin, expressed "their gratitude for the humanity" of their captors.

Argentina's response to the South Georgia defeat was to deny that it had taken place. The junta in Buenos Aires maintained that scatterings of Argentine troops were carrying on the battle from specially prepared hideouts in the rugged recesses of the island. That version of events was speedily discounted by the British. Then Argentine military sources argued that the loss of South Georgia had been expected by the junta. There was, however, no disguising the fact that the Argentine military was surprised and shaken by the attack.

The members of the British task force, on the other hand, were elated, perhaps overly so. In a slightly misguided effort to increase the psychological pressure on the Argentines, task-force Commander Woodward indulged in some very un-British braggadocio following the assault. "South Georgia was the appetizer," the rear admiral told British journalists aboard his flagship Hermes. "Now the heavy punch is coming behind. This is the run-up to the big match, which, in my view, should be a walkover." Advised Woodward to the remaining Argentine troops in the Falklands: "If you want to get out, I suggest you do so now. Once we arrive, the only way home will be courtesy of the Royal Navy."

Woodward's ebullient talk prompted winces back in London, and he was quickly chided by his Admiralty superiors. Grumbled an aide to Prime Minister Thatcher: "Boast if you must when you've won. But for God's sake, to tell people in advance that you've got it is not even common prudence."

Another person whose spirits were boosted by the South Georgia victory was the Prime Minister. The day after the raid, Thatcher was greeted in the House of Commons with a roar of approval. She told the assembled M.P.s that the armed action "in no way alters the government's determination to do everything possible to achieve a negotiated solution to the present crisis." She also expressed hopes that Argentina would continue negotiations with Secretary of State Haig.

That evening, however, in a 50-minute television interview with the British Broadcasting Corporation, Thatcher gave the impression of almost relishing the prospect of the further use of force. Comparing the British handling of the Falklands crisis with her government's handling last February of a hijacked airplane that landed at Stansted Airport near London (the British refused to let the aircraft take off again), Thatcher argued, "That's the way to stop hijacking. Similarly, to see that an invader does not succeed is to stop further invasions and to really stand up for international law against international anarchy." Most Britons seem to agree: a survey by Market & Opinion Research International, a leading British pollster, showed that public approval for government handling of the crisis had climbed to 76%, up from 60% in a week.

But if Thatcher expected the parliamentary euphoria of Monday to continue, she was mistaken. The next day in the Commons, the first major crack appeared in the spirit of unity that has dominated the House since the British fleet first set sail on April 5. Opposition Labor Party Leader Michael Foot backed away from the idea of further military action and demanded that Thatcher refer the issue to the U.N. Said Foot: "If she will not respond to what I am asking, [Thatcher] will do great injury to our country all over the world."

Thatcher refused. She pointed out that Argentina has not complied with the Security Council's Resolution 502, passed on April 3, calling for removal of Argentine troops from the Falklands. Said a Thatcher aide: "Argentina is not only in defiance of Resolution 502, but has violated it further by reinforcing its troops on the Falklands." As she said on television, delaying the use of force is an aid to the Argentines, since as weather worsens in the South Atlantic "it will get more and more difficult for us to use a military option." Said Thatcher: "I have to keep in mind the interests of our boys who are on those warships, and our marines, to see that they can succeed in doing whatever it is we decided they have to do at the best possible time and with minimum risk to them." After the U.S. publicly backed Britain, Thatcher felt that sending Foreign Secretary Pym to the U.N. was a useful way to restore bipartisan harmony in Westminster.

Thatcher was confident that many Labor backbenchers did not share the misgivings of Foot and other members of his party's shadow cabinet. But there are members of her own party with less enthusiasm than the Prime Minister's for the protracted use of force in the Falklands. Thatcher has assembled both attitudes in a five-person inner War Cabinet that is collectively making day-by-day decisions during the Falklands crisis. Representing caution are Foreign Secretary Pym and Home Secretary William Whitelaw. Harder-line members are Thatcher, Defense Secretary Nott and Conservative Party Chairman Cecil Parkinson. Parkinson's presence in the inner council struck many observers as unusual, but, by virtue of his party job, he keeps close tabs on the opinions of individual Tory M.P.s, and therefore is in a position to advise Thatcher on what positions her followers will support, and how strongly they will support them.

War Cabinet discussions are shrouded in secrecy, but TIME has learned that the British inner circle has set a strict deadline of mid-June, the onset of winter, for resolution of the Falklands crisis, whether by diplomatic or by military means. Explains a Thatcher aide: "We just can't keep our fleet bobbing around in such harsh weather conditions forever."

The group also agreed on overall military strategy. As they have been doing all along, the British intend to step up pressure on the Argentines by stages. As a senior British diplomat described them for TIME'S Frank Melville: Stage 1 ended with the retaking of South Georgia. Stage 2 began with last week's imposition of the sea and air blockade of the Falklands and the strikes on the island airfields. Stage 3 could include bombing runs against air-bases on the Argentine mainland and a major ground assault against the Argentine forces on the Falklands.

Along with the briskly enforced blockade, the British are considering such actions as sabotage and the blowing up of Argentine supply dumps in the Falklands by special commando units infiltrated onto the islands, as they were onto South Georgia. Last week, the government first issued a rare denial, then a more routine "no comment," at reports that small groups of British troops are already on the Falklands.

The problems with the blockade strategy are the same ones the British have faced since assembling the task force. The major difficulty is achieving air superiority, either tactical or absolute, over the Argentines in the Falklands. The Hermes and Invincible are equipped with only 20 Sea Harrier vertical short-takeoff and landing jet aircraft. The Harriers are highly maneuverable but also are relatively slow (top speed 736 m.p.h.) and have a maximum range of only 460 miles--or about 100 miles for a 1 1/2-hr. blockade patrol. The Royal Navy's version of the Harrier is not well suited to supporting ground troops; for that, the British need a longerrange, Royal Air Force version of the aircraft, the Harrier GR.Mk3. A British container ship, the Atlantic Conveyor, is now bringing 18 of the Harrier GR.Mk3s to the Falklands, but they are not expected to arrive for another week.

Even with the R.A.F. Harriers, the British are definitely outgunned in the air. The Argentines have 82 American-made A-4P and A-4Q Skyhawk attack aircraft, 21 French-built Mirage III fighter-bombers and 26 Dagger aircraft, an Israeli-modified version of another Mirage model. The Argentine Mirage Ills have a combat range of about 745 miles, enabling them to operate over the Falklands from bases on the Argentine mainland. The British may be able to offset some of the Argentine air advantage through skillful use of naval forces. Destroyers from the British task force, equipped with Sea Dart surface-to-air missiles (effective range: about 20 miles), will be on hand to support the Harriers against enemy aircraft, missiles and surface vessels while British frigates with antisubmarine helicopters protect the two aircraft carriers and the destroyers against submarine attack.

Another possibility is that the British could find a way to smuggle their Harriers, which do not need airstrips, onto remote areas of the Falklands, decreasing the vulnerability of British aircraft carriers and bringing the fighters closer to their targets. Says a senior British naval officer: "If we could get Harriers covertly ashore, it would give us an enormous advantage, perhaps the winning card."

Without such a surprise stratagem, the current phase of the British plan could involve heavy casualties. Echoing that fact, a chastened Task Force Admiral Woodward reversed his earlier confident talk and warned that "unless people say 'let's stop,' it will be a long and bloody campaign." Those remarks were appreciated in London no more than his earlier ones, prompting one Thatcher aide to grumble: "I wish our admiral would shut up."

If Admiral Woodward's prophecy comes true, the British would move to the still largely undefined Stage 3. The chief option being considered: a further long-range strike by British strategic bombers, this time against Argentina's mainland airbases. It would be carried out by Britain's venerable fleet of Vulcans, the planes that took part in the airfield attacks last Saturday. Once part of the country's nuclear deterrent force, the Vulcans, most of which are some 20 years old or more, have been refitted to carry as many as 21 conventional 1,000-lb. bombs each. Practice flights of the Vulcans for their new role took place in Scotland, and the first of the aircraft, along with their Victor aerial refueling tankers, were ferried to Ascension Island not long after the British navy began assembling its Falklands task force. Other Stage 3 possibilities include a full-scale invasion of the Falklands aimed at encircling the main Argentine forces at Port Stanley. But for that, the current British forces of some 4,000 marines and paratroopers (1,500 with the task force, 2,500 aboard the converted ocean liner Canberra) is inadequate. Recognizing the manpower problem, the British last week sent 1,200 more troops toward the Falklands aboard the Norland ferry. Additional British units are receiving emergency training for Falklands duty in the mountainous reaches of northern Scotland.

While the military confrontation was paramount, much of last week's action was diplomatic. The day of the South Georgia assault, Argentine Foreign Minister Costa Mendez had been scheduled to meet with Haig to discuss U.S. proposals for a peaceful solution to the crisis. They included 1) an Argentine withdrawal from the islands and pullback of the British fleet; 2) an end to economic sanctions against Argentina imposed by Britain's supporters; 3) establishment of an interim U.S.-British-Argentine authority for the Falklands while the two disputing countries negotiate ultimate sovereignty over the territory. The U.S. already knew the principal British objection to the proposals: they did not address the issue of self-determination for the 1,800 Falkland Islands residents, who have long insisted on retaining their ties with Britain.

As a result of the British assault on South Georgia, Costa Mendez postponed, then canceled his meeting with Haig. The Argentine diplomat declared that the U.S. mediation effort was "suspended" and that his country was "technically at war" with Britain. Costa Mendez took his case to a Washington meeting of foreign ministers of the Organization of American States. There Argentina intended to invoke the 1947 Inter-American Treaty of Reciprocal Assistance, to which the U.S. is a party. That pact, also known as the Treaty of Rio, stipulates that an armed attack against any one of the signatories will be considered an attack against them all and provides for various sanctions against the aggressor.

Most Latin countries are sympathetic to Argentina's claim, but not to its use of force. In the end, the O.A.S., by a 17-to-O vote with the U.S. and three other countries abstaining, passed a resolution supporting Argentine sovereignty in the Falklands. But the resolution also demanded adherence to U.N. Security Council Resolution 502. The junta had miscalculated.

Meanwhile, European Community* foreign ministers reaffirmed their backing of economic sanctions against Argentina during a meeting in Luxembourg attended by Foreign Secretary Pym. Clearly, the British were succeeding in consolidating their support. At the meeting Pym also defended the U.S. for failing by that time to join in the sanctions, showing sympathy for Haig's continuing efforts to act as mediator. Privately, however, many Britons were growing resentful of the American public posture of evenhandedness in the conflict.

Pressure was growing in the U.S. Congress for the Reagan Administration to side more openly with Britain. The Senate voted 79 to 1 in favor of a pro-British resolution that called on the U.S. Government to "use all appropriate means to assist the British government." Haig, meanwhile, cabled his settlement proposals directly to the U.S. Ambassador to Argentina for transmission to that country's junta. Two days later the answer came back via Argentine Ambassador to Washington Estaban Takacs: No. With that, the U.S. moved to back the British.

The sanctions announced by Haig are more important diplomatically than they are in economic terms. While Haig has been fostering improved relations with Argentina, American assistance to that country has not recovered from the chilly period when the Carter Administration was outspokenly critical of an earlier Argentine junta's human rights record.

Any U.S. military assistance of consequence would have needed congressional approval. The loan guarantees from the federal Commodity Credit Corporation are used mainly for financing the sale of American agricultural products abroad; but Argentina is a major agricultural exporter, especially to the Soviet Union, and was expected to receive only $2 million in loan guarantees this year. The most important sanction was on credits from the Export-Import Bank of the United States, which will affect $500 million in Argentine purchases of hydroelectric equipment. Despite the sanctions, the U.S. would remain among Argentina's largest foreign trading partners. Argentina last year bought $2.2 billion worth of goods from the U.S., and sold $1.12 billion in return. Britain's European allies have gone one big step further than Washington by also severing their trade links with Argentina.

In Buenos Aires, the three-member junta headed by President Leopoldo Fortunato Galtieri, 55, went into emergency session at the Argentine army's imposing gray stone headquarters after Haig's announcement. Argentine Interior Minister Alfredo St. Jean described the U.S. attitude as "unjust and unreasonable." A few hours later, the military announced the imposition of formal press censorship in the country.

If there were any waverings within the military leadership after the U.S. decision, they failed to show. But making sense of the labyrinthine workings of the Argentine junta is nearly impossible at the best of times. Although President Galtieri is the group's undisputed chief, the junta operates on a consensus basis that gives the other two commanders, Navy Admiral Jorge Isaac Anaya, 55, and Air Force Brigadier General Arturo Lami Dozo, 53, considerable power. In addition, junta members must take into account the feelings of other senior military officers, especially the five corps commanders of the 130,000-man Argentine army.

Failure to keep those powerful figures satisfied could result in a palace coup--which is exactly how Galtieri took power last December. Complains a Reagan Administration official who has dealt with the Argentines: "There are 30 to 40 people who can exercise a veto." Indeed, two weeks ago, Haig thought that he had reached an agreement with the Argentines during a shuttle mission to Buenos Aires. As he left the country, however, he was handed a note at the airport rescinding the deal.

Among the junta members, Admiral Anaya is considered to be the most hawkish on the Falklands question. By some reports, it was Anaya who precipitated the April 2 invasion, without fully consulting President Galtieri. Anaya reportedly moved Argentina's only aircraft carrier, the Veinticinco de Mayo, out to sea two weeks ago without telling Galtieri. After some argument, the carrier was returned to the relative safety of the coastal shelf, where the water is too shallow for British submarines to operate safely.

Aii Force Chief Lami Dozo is considered to be far more pacifistic on the Falklands issue. Within his branch of the armed forces there are doubts among some officers about the entire adventure. But the air force, the most junior and traditionally the weakest of the Argentine armed forces in terms of political power, now bears a major responsibility for defending the islands. Says one observer of Argentine military affairs: "Lami Dozo was very dovish until he realized that the air force is at the cutting edge of what the British might do."

From the beginning, the junta has underestimated the adverse international reaction to its invasion. One reason is that military dictatorships are apt to be heedless of public opinion. Another factor may be the Argentine national character: a complex blend of nationalism, volatility, self-absorption and machismo.

For decades, as their country has suffered through regular cycles of political upheaval and economic decline, Argentines have prided themselves on being inherently superior to their neighbors. Largely of Italian and Spanish descent, the Argentines sometimes refer to themselves as "European" to distinguish themselves from other South Americans. The Argentines are notoriously thin-skinned about real or imagined slights to national honor, particularly where territory is involved.

Years of veering between authoritarianism and anarchy have produced a political culture of cynicism in Argentina. What is right is all too often what can be got away with. In that context, many if not most Argentines regard fulfillment of their historical claim to the Falklands as more important than the means used to attain it. Even though the population has become increasingly restive after six years of military rule, the junta enjoys solid public support for its stand on the Falklands.

That attitude is shared even by members of the country's community of more than 100,000 Argentine citizens of British extraction, descendants of the generations of British traders and technicians who helped build modern Argentina. Those Anglo-Argentines have long formed a special, privileged class in the country, with their own schools, hospitals, charities, churches and genteelly British ways of life. They congregate at institutions like the Hurlingham Club, a vast social and recreational complex in the heavily British Buenos Aires suburb of Hurlingham. The club has five polo fields, two swimming pools, a golf course, cricket pitch and gabled clubhouse. Says an Anglo-Argentine businessman: "The tragedy of it all is that 99% of the Anglo-Argentine community are in favor of the Argentine stand. We can't understand why Mrs. Thatcher reacted so violently."

Even so, the Thatcher government has advised the roughly 17,000 British subjects in the country to leave, and British officials in Buenos Aires are asking them to register at the Swiss embassy, which is handling London's interests. "We're just counting our flock," says one diplomat. So are the Argentines: plain-clothes policemen are reported to be conducting a census of Britons in Buenos Aires. Anglo-Argentines are feeling suddenly vulnerable in a country where weeks ago it was a mark of status to be British. Says one nervous Anglo-Argentine: "Everybody's scared. We've never been faced before with this situation of having to separate our two very strong loyalties. Today we're keeping a low profile and hoping to sit it out."

The same uneasy stirrings, reports TIME Correspondent William McWhirter, are beginning to affect the faraway town of Ushuaia (pop. 10,000), located 1,450 miles from Buenos Aires at Argentina's extreme southern tip. The bucolic community, which is the site of a major naval base and is now considered to be part of a national security zone, is normally a haven of tolerance where the police chief speaks English and local duty-free stores are filled with Burberry raincoats, Dunhill men's accessories, Mary Quant cosmetics, Pringle woolens, Johnnie Walker Scotch and other British goods. Writes McWhirter: "The mood of the town has begun to change along with the moving tides of war. Ushuaia's younger men have left their jobs to serve in the town's police reserves. Three British journalists have been arrested on charges of espionage after they were discovered taking notes and using binoculars near an airport. No local lawyer will take on their case. Two weeks ago, a 30-minute blackout drill was almost festive. This week the drill lasted an hour, and failure to comply carried a jail sentence."

The niceties of conduct in Ushuaia and elsewhere in Argentina may dwindle further when, and if, British and Argentines square off ashore in the Falklands. Conditions guarantee an ugly, unpleasant engagement. The Falklands, cold, damp, desolate clumps of rock set in a storm-tossed ocean, are a dismal place for military operations. By last weekend the Argentine forces, composed in part of raw recruits conscripted only months be fore, were dug in on the mossy, treeless, windy wasteland. They were waiting for British troops, who, though surely more experienced and better trained, had al ready endured what must have seemed like an eternity of confinement and sea sickness on the violent South Atlantic. It appeared, as it has been from the first, a confrontation to be avoided. But with warplanes screaming over the Falklands, any such hope had dwindled almost to nothing.

-- By George Russell.

Reported by Bonnie Angela/London and Gavin Scott/Buenos Aires

*Members: Britain, Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, The Netherlands and West Germany. Australia, Canada, New Zealand and Norway have also imposed sanctions. Japan has promised not to take advantage of the economic opportunities created by these measures.

With reporting by Bonnie Angelo/London, Gavin Scott/Buenos Aires

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