British forces continued "softening up" Argentine defenses for an invasion of the Falkland Islands today as the government prepared its strategy for a climactic week of negotiations at the United Nations, which is viewed here as the last opportunity for a diplomatic resolution of the crisis.
Sea Harrier jets from the British naval task force off the Falklands today attacked two Argentine ships in harbors on Falkland Sound between East and West Falkland islands, the Defense Ministry announced here. British correspondents with the task force said other Harriers attacked Argentine military installations around the Stanley airfield early today for the third time in three days.
The Argentine ships were bombed and strafed, a Defense Ministry spokesman said. "We have no firm indication of the extent of the damage caused, although the crew of one of the vessels was subsequently seen to be abandoning ship."
Two Harriers also attacked an Argentine merchant ship, the Rio Carcarania, off East Falkland Island near the port of Darwin, British correspondents reported, and pilots in two Harriers following behind saw survivors on their way to shore in lifeboats.
Two more Harriers attacked another merchant ship moored in Fox Bay on West Falkland Island, according to British Broadcasting Corp. correspondent Brian Hanrahan on the British aircraft carrier Hermes. Hanrahan said the ship fired back, hitting one of the Harriers in the tail, but the damage was reparable and the pilot was unhurt.
The Argentine military command announced that British Sea Harrier warplanes attacked "without consequence" Darwin, which is located on a sound in the center of East Falkland, and Zorro Bay, just south of Darwin, correspondent Jackson Diehl reported. A military communique gave no further details.
The military command later acknowledged the British attack against the two ships, saying one ship was set afire and the other damaged. It said both ships were unarmed transport ships "carrying fuel, food and medicine to the people of the islands." The command also reported that the supply ship Isla de los Estados, reported missing two days ago, was now presumed to have sunk, Diehl reported.
The Isla de los Estados, carrying a crew of 30 to 40, reportedly was hit by British shells last Tuesday in the narrow sound that separates East and West Falkland.
The attacks on the ships in Falkland Sound appeared aimed at cutting all communications between Argentine forces on the two main Falkland islands. The Argentine ships were believed here to have been taking food and supplies to approximately 1,500 Argentine troops on West Falkland Island.
The repeated attacks on the Stanley airfield are aimed at preventing its use by even light planes for supply of about 5,000 or more Argentine troops in the vicinity, at destroying military installations including mobile radar believed to be used to direct Argentine air strikes against the British fleet and harassing the Argentine forces to reduce their readiness to defend against a British assault on the islands.
A senior British government source said today that such attacks as well as hit-and-run commando raids will continue "over the next few days" along with the U.N. negotiations. "There will be increasing harassment of the Argentine forces one way or another," the source said.
Declaring that the U.N. negotiations must "come to a head one way or another" this week, British Defense Secretary John Nott warned today, "If we fail to achieve a peaceful settlement, then we have no other choice but to pursue the military options much more vigorously than we have up to now.
"We will continue the softening up process of the garrison," Nott said in a radio interview. "We must put ourselves in a position that, if we decide so to do, we are ready to assault the islands and repossess them."
Asked in a radio interview if an invasion will become the most likely choice, Nott said, "Time is very short when that decision will have to be taken."
Nott was interviewed during a break from seven hours of meetings Prime Minister Margaret Thatcher held at her country residence at Chequers today with senior ministers and defense chiefs in her "war cabinet" plus Britain's ambassadors to the United Nations, Anthony Parsons, and to the United States, Nicholas Henderson.
Officials said they reviewed in detail Britain's diplomatic and military strategy to determine whether there appeared to be any way to secure through the U.N. negotiations an Argentine withdrawal from the Falklands on terms "consistent with our interest and principles."
A Thatcher aide said afterward, "There is still no point in being optimistic" about this. Parsons will return to New York Monday, according to the aide, "for what could be our last push at the U.N." unless Argentina substantially changes its negotiating position.
There is "still a considerable gap" between the British and Argentine positions on several important points, the aide said, and Britain is not prepared to give much more ground. Parsons is returning to New York "with the fullest possible authority" from Thatcher to react to any new proposals by Argentina or U.N. Secretary General Javier Perez de Cuellar, but Parsons will not be carrying any new formal British proposal.
"I think the talks are still alive," Nott said at Chequers after hearing Parsons' report to the inner cabinet. "There are great difficulties still in the way, but I am not totally despondent by what Sir Anthony Parsons has said this morning.
"But time is not on the side of negotiations," Nott added. "I don't think they can go on dragging on for much longer."
In Buenos Aires, the ruling military junta was expected to meet this evening to set Argentina's final position for the U.N. talks, officials said. President Leopoldo Galtieri said the talks in New York have reached a "vital" point, and officials here said they expected that the fate of the negotiations could become clear on Monday, when both British and Argentine representatives are expected to report to Perez de Cuellar on the results of weekend consultations by their governments, Diehl reported.
British sources said the primary sticking points in the U.N. negotiations at present are the arrangements for an Argentine withdrawal from the Falklands after a cease-fire and the form of an interim administration of the islands while their future status is negotiated. Perez de Cuellar has sought to arrange a cease-fire while postponing the difficult issue of sovereignty over the islands.
The sources said the Thatcher government has sought an "ironclad guarantee" that all Argentine military and civilian personnel now on the Falklands will be removed and stay off the islands if Britain agrees to a cease-fire.
Argentina appears to be seeking a faster pullback of the British forces further from the Falklands than the Thatcher government has offered. Thatcher has said the task force would not be pulled away from the Falklands completely until the Argentine withdrawal is completed.
The British also have insisted that a U.N. or international interim administration operate through the existing executive and legislative councils of the Falklands' 1,800 inhabitants of British heritage. During this period, British negotiators would consult the islanders on options for their future status.
The Argentine military government apparently sees this as an attempt to block eventual transfer of sovereignty to Argentina. British sources said Argentina has proposed allowing "a free flow" of Argentines into the Falklands during the interim period as well as new elections.
British sources said this would amount to packing the islands and their councils with a majority of Argentine newcomers "who would vote only one way."