Mr. President. the Cambodian insurgent forces are now reported within a few kilometers of Phnom Penh and can shell it at will. The refugee. rice. petroleum. and power problems in the capital are serious. The government is performing no better than before and the psychology of their situation is very poor. No one knows whether the insurgents will assault the city either now or after August 15. or whether they will continue the slow squeeze. If conditions deteriorate further. it seems possible that key elements inside the government will decide to make the best deal possible and that suddenly it will all be over with a minimum of bloodshed. and with the insurgents emerging in control.