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that serious US-Libyan fighting results, there could be a
 groundswell of popular outrage in support of an "Arab-Muslim
 brother"--even such a black sheep as Qadhafi. In such a
 case, Libya could reap substantial sympathy as an aggrieved
 underdeveloped nation being bullied by a superpower with links
 to the "Zionist enemy." These perceptions and particularly
 their detrimental impact on Sadat's regime make more imperative
 the question of advance consultation with Egypt. (S NF)

Additionally, the present poor state of Libyan relations
 with other Arab states could be given a boost. States like
 Algeria whose ties with Libya have been progressively loosened
 might feel obliged to express support for Qadhafi. (S NF)

Reaction of Libyan Populace

The Libyan people will learn only as much of the US exercise,
 and any incident, as their government wishes them to know.
 Their reaction will be manipulated, and might well include mob
 scenes--either simple demonstractions or actual attacks on US
 personnel inside Libya. Their reaction is less significant,
 however, than the reaction of the Libyan military--which may
 well have suffered casualties in an incident. The Intelligence
 Community believes that the reaction of the Libyan military
 could take either of two opposing forms:

-- The military could rally around the Qadhafi regime,
 as happened during the border war with Egypt in the
 summer of 1977, an incident which aborted an extensive
 plot within the Libyan military.

-- Or, because of increased disaffection with the regime
 in the past several years, the military could turn
 against Qadhafi.

We do not have enough evidence of the state of mind within
 the Libyan military to choose between the two alternatives,
 although we do believe the military is less likely to rally
 around the regime than it was in 1977. (S NF)

Soviet Response

The Soviets will move quickly to exploit the situation
 to fan Libyan apprehensions about the United States and to
 undercut US arguments that the USSR is the major threat to
 the Middle East. Coming on the heels of the Reagan-Sadat

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