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Of even more concern to the Thatcher government was the attitude of the U.S., which had officially swung to Britain's side in the Falklands dispute only on April 30, after a month of unsuccessful attempts to negotiate a diplomatic settlement. Thatcher's War Cabinet realized that it could not afford to lose U.S. sympathy. As a senior British Cabinet member told TIME, "We cannot and will not repeat the ghastly mistake of Sir Anthony Eden at Suez in 1956, when he led Great Britain into war without the backing of America." Of Prime Minister Thatcher, widely known as one of the most hawkish voices in her inner circle, the Cabinet member said that "Margaret's heart may be telling her to leap into the fray, but her head is telling her that you cannot militarily operate in the Southern Hemisphere without U.S. explicit or implicit support."
Accordingly, almost because the fighting had worsened, the emphasis swung back to negotiation. Said a key British politician: "We realized that only the swiftest diplomatic action could recapture the international support we have been losing." The British looked first to Haig, who in turn found a mediator in Peruvian President Fernando Belaunde Terry. The use of Belaúnde as an intermediary seemed to have several advantages. Peru is a Latin American country with traditionally friendly ties to Argentina. When the threat of war first emerged, the Peruvian Congress voted to send military supplies to Argentina. Belaunde, however, is a democratic moderate with close personal ties to the U.S.
The Peruvian plan was in essence a slightly modified version of proposals that Haig had been urging during his shuttle diplomacy last month. A senior British Cabinet member described it as "an American car painted in Peruvian colors with Haig in the driver's seat." The chief elements of the package were 1) a cease-fire with a simultaneous Argentine withdrawal from the islands and a pullback of the British fleet; 2) an end to economic sanctions against Argentina imposed by Britain's supporters; 3) establishment of an interim U.S.-Brazilian-West German-Peruvian authority for the Falklands while the two disputing countries negotiate ultimate sovereignty over the territory. Belaúnde's chief contribution to the plan was to simplify some aspects of the U.S. ideas for the transitional administration of the islands.
Meanwhile, a second possibility for negotiations was opening up at the U.N., through the offices of Secretary-General Pérez de Cuéllar, himself a Peruvian. Some key details of Pérez de Cuéllar's peace proposals were deliberately unclear, but they also called for a cease-fire and pullback by the forces of both sides, as well as a temporary administration for the Falklands (this time under U.N. auspices).
Significantly, the Secretary-General's plan made no mention of the issue of ultimate sovereignty. Argentina was insisting that sovereignty is nonnegotiable, and Britain maintained that any settlement must respect the self-determination of the 1,800 Falkland Islanders, who are heavily in favor of remaining British. Pérez de Cuéllar set a midweek target for British and Argentine responses to his ideas, and a closed-door informal meeting of the U.N. Security Council was called the following day to consider the issue.