Argentina declared tonight that all British air and naval forces within 200 miles of Argentina or the Falkland and South Georgia islands would be considered "hostile" and would be "treated accordingly."
The announcement by Argentina's military junta was made in response to Britain's declaration that its previous naval blockade around the Falklands would be expanded to cover aircraft as well beginning at 7:00 a.m. EDT Friday. The junta said its measure would also go into effect Friday.
By defining British ships and planes as hostile for the first time, the junta's announcement constituted the strongest threat yet of a first attack by Argentine forces. The announcement came after government officials here had said they were still willing to negotiate a diplomatic solution to the Falkland Islands crisis, even though a new U.S. plan was not considered acceptable.
Reports reaching London indicate that Argentina has been making dozens of military flights each day to Port Stanley on the Falklands and has not yet removed its planes from the airport runway there, Washington Post correspondent Leonard Downie Jr. reported. Asked if hostilities could occur on or around the Falklands by this weekend, one government source said, "It may be sooner than that."
British sources said they strongly doubted that Argentina would accept the American negotiating plan and indicated that any Argentine response other than yes or no would be regarded in London as an attempt to prolong the Haig mission, without any real prospect of a peace settlement, in hopes that the Reagan administration would remain neutral or even try to postpone British military moves.
Officials in London said Britain's military timetable would not be affected by anything other than a firm Argentine commitment to withdraw from the Falklands.
The Argentine junta's communique said that British warships, commercial vessels and all British aircraft would be subject to attack if they entered Argentine airspace or Argentine waters. The junta defined Argentine waters as a 200-mile area around the Argentine mainland coast as well as the Falkland Islands, the South Sandwich Islands and the South Georgia Islands now occupied by Britain's forces.
The junta added that the new measures had been ordered "without excluding any other additional measures that could be taken in exercise of the right of legitimate defense."
Diplomatic sources have said that elements of the British fleet were expected to be within range of Argentine aircraft on the Falklands and on coastal bases by today. Argentine analysts believe that the military junta has been seriously considering a preemptive Argentine air strike on British forces in the South Atlantic as its best military option.
Argentina had previously defined the 200-mile sea zone around its coast and the disputed islands as a theater of operation in which military action could be taken. Tonight's declaration expanded that zone to include airspace as well as saying that British craft would be considered hostile.
The communique came at the end of a day in which Argentine officials had sought to demonstrate their continued willingness to reach a diplomatic solution with Britain in the four-week-old confrontation over the South Atlantic islands.
Interior Minister Alfredo Saint Jean, who is managing the Foreign Ministry in the absence of Foreign Minister Nicanor Costa Mendez, said that the U.S. plan "has a few elements that could be used."
"We are leaving open the possibility of continuing the negotiations, even with this proposal as a base, or improving or taking some previous elements," Saint Jean said.
Government sources said that Argentina was eager to keep alive the U.S. diplomatic role and will thus continue to seek modifications of the U.S. peace plan as long as Washington was willing to continue in a neutral role.
"We will never actually reject U.S. proposals," one government source said. "There is a difference between rejecting and not accepting. With the latter, we can at least keep the Americans in that middle position."
Nevertheless, government sources said Argentina was very pessimistic that a peaceful solution could be found before new hostilities break out. The chief Argentine objective to the latest U.S. proposal, officials indicated, was the same absence of guarantees of Argentine sovereignty over the Falklands that have stalled agreements through three weeks of U.S. diplomatic effort.
In an interview on a local radio station this morning, Saint Jean pointedly referred to this continuing difficulty, saying,"In no way could we accept a proposal that didn't have as a special condition the recognition of our sovereignty."
Reports here said that the new U.S. plan differed from previous proposals mainly in setting a time limit on negotiations between Argentina and Britain over sovereignty.
Argentina has demanded both a limit on negotiations and an assurance that they will lead to a transfer of control to Argentina of the islands. Argentina seized the islands on April 2, ending 149 years of British control that had always been disputed by Buenos Aires.
Downie also reported from London:
With the Haig peace-making efforts generally believed here to be close to collapse, a British Foreign Office spokesman emphasized, "We still feel that if the Haig mission should fail, the United States cannot be neutral. Our expectation is that the U.S. would support Britain" with diplomatic and economic sanctions against Argentina like those already imposed by European and Commonwealth countries.
Britain, however, does not want to be seen as the party breaking off negotiations. This is why the government of Prime Minister Margaret Thatcher has decided not to give Washington a formal reaction to the American peace plan, some of which it still finds unacceptable, until Argentina responds favorably to it.
Thatcher suggested to Parliament today and aides confirmed that the formal American peace plan is not acceptable, although one government source said, "It is reasonable to assume that if the Argentines accepted the proposals, the pressure would come on us."
"The American proposals are complex and difficult and inevitably bear all the hallmarks of compromise in both their substance and language," Thatcher told Parliament. "They have to be measured against the principles and objectives expressed so strongly in our debates."
Revealing new details of the peace plan and Britain's negotiating position, Foreign Secretary Francis Pym in Parliament and government sources in private conversations outlined "difficulties" the proposals still pose for Thatcher even though, according to one source, "they generally come down on our side."
The information from these sources indicates the U.S. plan, although complicated in detail, contains three main elements:
A phased withdrawal of Argentine troops from the Falklands matched by a "parallel" pullback of the British task force.
Government sources said, as Thatcher indicated earlier, that a U.S. or U.N. peace-keeping force would be needed to supervise the withdrawal and prevent a new Argentine occupation, while 3,000 British troops have been undergoing training to serve as a British occupation force if the government believed that were necessary.
After the Argentine withdrawal, interim administration of the Falklands for up to five years by British civil servants under British, Argentine and American supervision. Any Argentine role in the interim administration or the flying of Argentina's flag along with Britain's over government buildings on the islands is still unacceptable to Thatcher, according to government sources.
During the interim administration, negotiations on the Falklands' longterm future.
The American plan makes no mention of Argentina's sovereignty claim nor does it guarantee that the negotiations would eventually lead to a transfer of sovereignty from Britain to Argentina.
"This is one of the sticking points for Argentina," Pym said tonight, and the reason why British officials believe the plan is unacceptable to Buenos Aires.
But the American proposals apparently also do not satisfy Thatcher's demand for a guarantee of the right of self-determination for the 1,800 British inhabitants of the Falklands. Haig has reportedly proposed only that their wishes "be taken account of" in the negotiations, perhaps through an advisory referendum. "They have to have a real say in their future," one British source said, suggesting that the American plan attempts to fudge this issue.
In any negotiations over long-term sovereignty or administration of the islands, Pym told Parliament, "We will cooperate with whatever outcome was acceptable to the Falkland islanders."