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U.S. Might Finance Nile Project if Egypt Abandons Soviet Deal

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The United States might help finance a huge irrigation and power dam across the Upper Nile if Egypt abandons plans to rely on the Soviet bloc for war munitions, it was learned today from government sources. It is thought likely here that Assistant Secretary of State George V. Allen hinted at this proposal in his talks with Premier Nasser in Cairo.

According to sources here, Mr. Allen was authorized to promise Col. Nasser “reasonable amounts” of munitions on easy credit terms or some other arrangement to facilitate a transaction if Egypt abandons its arms dealings with the Communists.

Meanwhile, British Foreign Secretary Harold Macmillan and Secretary of State John Foster Dulles today spent over two hours in a discussion in which Mr. Macmillan said “special attention was given to problems of the Middle East.” Questioned by reporters after the meeting at the State Department, Mr. Macmillan declined to say whether any decision was reached on Egypt’s intention to accept Communist munitions or on Israel’s intention to seek Western arms in a move to maintain the balance of power.

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