399. Col. John Kieffer, registered representative Cuban Government, told Department today that latest information from his sources was:

(1) In Las Villas Province Government still controlled Santa Clara, Cienfuegos and Sagua de Grand, but rest of territory in rebel hands.

(2) Rebels commanded by Camilo Cienfuegos in North and Che Guevara in South, were only ostensibly under direction Fidel Castro, actually taking orders directly from Juan Marinello and other Communist leaders. Communist cells were being quickly organized in villages, Communist pamphlets and literature distributed and other methods typical of Communist guerrilla occupation were being seen.

(3) Although Government can hold cities for moment, US will find "Communist Cuba on its doorstep" unless it quickly lifts arms embargo.

(4) Embassy Habana has been apprised of above and has sent people into area.
 

Department would appreciate Embassy comment, particularly re alleged Communist operations in rebel-held territory in Las Villas Province and statement Embassy has sent people into that area.