The report presents the following conclusions: 1) The Vietnamese Communists are striving through their current fight-talk strategy to produce a decisive result in the war this year. Hanoi will coordinate intensified military and political operations in the South with diplomatic moves, all designed to disintegrate the fabric of the GVN, intensify pressure for peace within the US, and bring about major concessions in the Paris Talks; 2) Communist forces are suffering extraordinary military losses, but with massive replacements from the North, they will be able to maintain a high level of military pressures during the summer. We do not believe, however, that the Communist military effort by itself will be decisive. ARVN's fighting effectiveness will probably not be seriously weakened, and the Saigon government, despite continuing political and administrative weaknesses, will probably retain the capability to cope, at least minimally, with the problems of the war; 3) Nevertheless, developments in the Paris Talks or in US politics could severely test the GVN's stability and even its survuval. Saigon will press for a tough stand by the US and for major concessions from Hanoi. Moves toward compromises, whether at US initiative or Hanoi's, could touch off a severe crisis in Saigon, especially if a formal political role for the NLF appeared likely. In the end, Saigon's appraisal of US policy, in the context of the Presidential elections, could be decisive in the continuing viability of the GVN; 4) For its part, the regime in Hanoi is feeling the strains of the long and costly struggle. These will intensify if the war is protracted at the present high levels. While we expect no early shift in strategy, if, by years end, the situation has not taken a turn in its favor Hanoi will probably be obliged once again to undertake a thorough review of its options.