SOUTH VIET NAM REPORT ON THE WAR OVERSHADOWED BY THE POLITICAL AND DIPLOMATIC TURMOIL IN SAIGON, THE ALL BUT FORGOTTEN WAR AGAINST THE VIET CONG CONTINUES ON ITS UGLY, BLOODY AND WEARISOME COURSE . THE DRIVE AGAINST THE COMMUNISTS HAS NOT DIMINISHED IN RECENT WEEKS ; IN FACT, IT HAS INTENSIFIED . FEARS THAT THE BUDDHIST CONTROVERSY MIGHT DAMAGE MORALE AMONG VIETNAMESE TROOPS HAVE SO FAR BEEN GROUNDLESS . IF LAST WEEK'S BATTLES WERE ANY CRITERION, THE GOVERNMENT SOLDIERS ARE FIGHTING BETTER THAN EVER AGAINST A COMMUNIST FOE THAT IS EXACTING A HIDEOUS PRICE IN BLOOD IN THE FLOODED PADDIES OF THE SOUTH . THE BIGGEST GOVERNMENT VICTORY IN MONTHS CAME LAST WEEK NEAR THE TOWN OF GOCONG, 45 MILES SOUTH OF SAIGON . IN THE DEAD OF NIGHT, 500 VIET CONG REGULARS SWOOPED DOWN ON A STRATEGIC HAMLET UNDER A SCREEN OF SUPPORTING FIRE FROM HEAVY MACHINE GUNS AND RECOILLESS RIFLES . DESPERATELY CALLING FOR HELP OVER THEIR RADIO, THE DEFENDERS FOUGHT BACK DOGGEDLY, BUT WERE BARELY HOLDING OUT WHEN A GOVERNMENT INFANTRY RELIEF COLUMN ARRIVED AT DAWN WITH 15 ARMORED PERSONNEL CARRIERS . AMBUSHED BY THE REDS, THE GOVERNMENT REINFORCEMENTS DID NOT PANIC, NOSED THEIR PERSONNEL CARRIERS OFF THE ROAD AND INTO THE PADDIES, HEADING DIRECTLY FOR THE DUGIN REDS . FROM A GRAVEYARD AT THE FRINGE OF THE BATTLEFIELD, A VIET CONG HEAVY MACHINE GUN KNOCKED OUT AN APC . BUT SUPPORTED BY GOVERNMENT AIR FORCE PLANES, WHICH SWEPT OVER THE RED POSITIONS IN SCREAMING, SHALLOW DIVES FIRING ROCKETS AND DROPPING NAPALM, THE REINFORCEMENTS ROLLED STRAIGHT ONTO THE REDS, MASHING SCORES OF THE COMMUNIST TROOPS INTO THE STINKING PADDY MUD WITH THEIR HUGE STEEL TREADS . AT LAST THE REDS BROKE AND RAN, LEAVING BEHIND 83 DEAD . MUTILATED BODIES . THE EPISODE MADE NO SIZABLE DENT IN THE VIET CONG ARMY . BUT IT WAS HEARTENING TO U.S . MILITARY OBSERVERS, WHO ON MANY PAST OCCASIONS HAD WATCHED THE GOVERNMENT'S TROOPS REFUSE TO PRESS THEIR ATTACK . THIS TIME THE RELIEF COLUMN HAD STOOD ITS GROUND UNDER THE VIET CONG POUNDING AND THEN MOVED IN ON THE REDS IN BRUTAL COMBAT . TWO DAYS LATER, THE REDS EVENED THE SCORE . THIS TIME THEY HIT THE RICE-RICH CAMAU PENINSULA, TRADITIONALLY COMMUNIST-CONTROLLED TERRITORY WHERE GOVERNMENT ENCLAVES ARE ONLY ISLANDS IN A SEA OF VIET CONG . THE PLAN WAS A CLEVER TWO-PRONGED ATTACK AGAINST THE TWO GOVERNMENT-HELD CITIES OF CAI NUOC AND DAMDOI, WHICH LIE 15 MILES APART ON THE SOUTHERNMOST TIP OF VIET NAM . TO CONFUSE GOVERNMENT REINFORCEMENTS AND TO HAMPER THEIR SPEEDY ARRIVAL, THE VIET CONG FIRST FEINTED AT THREE NEIGHBORING OUTPOSTS, SOWED MINES ON A MAJOR ROAD OVER WHICH GOVERNMENT TROOPS HAD TO TRAVEL, AND POURED HARASSING MORTAR FIRE ON A U.S . HELICOPTER AIRSTRIP IN THE AREA . THE MILITARY FRONT SEEMED A MILLION MILES FROM SAIGON LAST WEEK . FOUR WEEKS AFTER THE CRACKDOWN ON SOUTH VIET NAM'S BUDDHIST OPPOSITION, AN ATMOSPHERE OF WATCHFUL WAITING HUNG OVER THE CITY . STILL FEARFUL OF A COUP, THE GOVERNMENT STATIONED SECRET POLICE OUTSIDE THE HOMES OF SUSPECT OFFICIALS ; TOP MILITARY OFFICERS WERE ORDERED TO SLEEP AT MILITARY HEADQUARTERS SO THAT A CHECK COULD BE KEPT ON THEIR WHEREABOUTS . WITH THE BUDDHIST OPPOSITION LULLED FOR THE MOMENT, SAIGON'S STUDENT POPULATION FEEBLY TRIED TO RAISE PROTESTS AGAINST THE GOVERNMENT . PELTED WITH CHAIRS AND DESKS THROWN FROM CLASSROOM WINDOWS, GOVERNMENT TROOPS CLOSED MANY OF SAIGON'S SCHOOLS, THREW NEARLY 1,000 STUDENTS INTO JAIL TO COOL OFF . IT SEEMED LIKELY THAT VIET CONG AGENTS INSPIRED MUCH OF THE DEMONSTRATING . THIS MADE IT ALL THE MORE IMPORTANT FOR THE U.S . AND PRESIDENT NGO DINH DIEM TO SETTLE THEIR DIFFERENCES . THE LATEST EPISODES OFFERED LITTLE ASSURANCE OF THAT . COUCHING HIS WORDS IN THE MOST CAREFUL DIPLOMATIC TERMS, U.S . AMBASSADOR HENRY CABOT LODGE LAST WEEK SUGGESTED TO DIEM THAT HIS BROTHER AND FIERY SISTER-IN-LAW, NGO DINH NHU AND MME . NHU, LEAVE THE COUNTRY UNTIL THE CURRENT CRISIS WAS OVER AND A FRESH RAPPROCHEMENT SHORTLY AFTER MIDNIGHT, THE REDS HIT CAI NUOC DIRECTLY . POURING MORTAR SHELLS AND RECOILLESS RIFLE FIRE IN THE PERIMETER SYSTEM OF DEFENSIVE BUNKERS, THE VIET CONG BREACHED THE FRONT GATE OF THE CITY'S MAJOR OUTPOST, RAN FROM BUNKER TO BUNKER LOBBING IN GRENADES AND SHOOTING THE DEFENDERS IN THE BACK . THE FIGHT LASTED FOR ONLY 35 MINUTES, BUT THE REDS OCCUPIED THE TOWN FOR THE NEXT 17 HOURS . IT WAS A BLOODBATH . WHEN REINFORCEMENTS FINALLY APPEARED, THEY FOUND A HEAP OF 50 MUTILATED BODIES, INCLUDING WOMEN AND CHILDREN, WHICH THE REDS HAD SET AFIRE . OF THE 100-MAN DEFENDING FORCE, ONLY 25 SURVIVED . EXPERTS DIFFER . SOON THEREAFTER, THE REDS OVERRAN THE NEIGHBORING TOWN OF DAMDOI . BUT THIS TIME THE COMMUNISTS MADE THE MISTAKE OF STAYING TOO LONG . SEVEN HOURS AFTER THE VIET CONG OCCUPIED THE TOWN, GOVERNMENT MARINES, AIRLIFTED TO THE SCENE IN U.S . HELICOPTERS, COUNTERATTACKED . HALF THE MARINE FORCE BLOCKED THE REDS' ESCAPE ROUTE AND ATTACKED THEIR SANDBAGGED POSITIONS . ARMED HELICOPTERS UNLOADED SOME 80 ROCKETS INTO THE COMMUNIST DEFENSES, AND FIGHTER PLANES ZOOMED IN AT TREETOP LEVEL WITH GUNS BLAZING . WHEN THE REDS FINALLY DISAPPEARED INTO THE PADDIES AFTER AN ALL-DAY FIGHT, THEY LEFT BEHIND 60 DEAD BETWEEN THE GOVERNMENT AND THE POPULATION ESTABLISHED . LODGE HINTED DELICATELY THAT THE CONTINUED PRESENCE OF THE BITTERLY CONTROVERSIAL NHUS IN SOUTH VIET NAM NOT ONLY HAMPERED THE WAR EFFORT AGAINST THE COMMUNIST VIET CONG, BUT COULD ALSO " ENDANGER " U.S . CONGRESSIONAL APPROPRIATIONS TO DIEM'S GOVERNMENT . DIEM EXPRESSED SURPRISE AND SHOCK AT LODGE'S SUGGESTION, COLDLY TURNED IT DOWN ; HE MIGHT HAVE WONDERED HOW JOHN F . KENNEDY WOULD HAVE FELT IF VIET NAM HAD ASKED FOR THE EXILE OF BOBBY AND ETHEL . WHAT NEXT IN U.S . POLICY ? IT WAS A TIME OF FRANTIC PONDERING AND FRANTIC DISCUSSION IN WASHINGTON . SOME OF THE SUGGESTIONS WERE LUDICROUS : CUT OFF ALL AID TO DIEM (WHICH WOULD EFFECTIVELY HAND THE COUNTRY TO THE COMMUNISTS) ; RUN THE SEVENTH FLEET UP TO THE COAST AND FORCE DIEM OUT OF POWER (ALSO SENSELESS, SINCE NO SUITABLE SUCCESSOR WAS VISIBLE) . NO ONE SEEMED TO BE DISCUSSING PERHAPS THE MOST SENSIBLE SOLUTION OF ALL : STOP ALL THE HALFWAY HINTS OF ENCOURAGEMENT TO PROMOTERS OF A COUP D'ETAT, AND GET ON WITH THE DIFFICULT AND UNPALATABLE TASK OF WORKING WITH NGO DINH DIEM AND HIS FAMILY . FACED WITH A PROFUSION OF PROPOSALS FOR ACTION, PRESIDENT KENNEDY WAS KEEPING HIS MIND OPEN . AT HIS PRESS CONFERENCE, HE REFUSED ALL EFFORTS TO DRAG HIM INTO A DISCUSSION THE GOVERNMENT'S MARINES WERE ALSO BADLY BATTERED ; 48 WERE KILLED BY THE TIME THE SHOOTING STOPPED . ON THE BASIS OF BODIES, THIS MIGHT BE CALLED A GOVERNMENT VICTORY . NOT SO INSIST SOME AMERICAN MILITARY MEN WHO ARGUE THAT SUCH DEFENSIVE RESPONSES WHATEVER THE PENALTY IN LIVES TO THE COMMUNIST ENEMY ARE WASTING THE STRENGTH OF THE VIETNAMESE FORCES AS WELL AS THE $1,500,000 A DAY THE U.S . IS PUMPING INTO THE COUNTRY . THESE EXPERTS WILL NOT BE HAPPY UNTIL THE GOVERNMENT CAN ORGANIZE REGULAR " SEARCH AND HOLD " OPERATIONS IN THE SOUTHERN RICE COUNTRY, COMMUNISM'S STRONGHOLD . IT IS AN INCREDIBLY DIFFICULT TASK . THOUGH THE VIET CONG ARE LOSING MORE MEN (CURRENTLY ABOUT 500 A WEEK) ALL THE TIME, THERE ARE MORE TO BE KILLED ,; OFFICIALS IN SAIGON NOW ESTIMATE THAT HARD-CORE COMMUNIST STRENGTH HAS GONE UP FROM 23,000 TO 31,000 OVER THE PAST FEW MONTHS . BUT GOVERNMENT STRIKES ARE AT LEAST MORE AND MORE FREQUENT . IN THE FIRST WEEK OF SEPTEMBER, 55 SEPARATE OFFENSIVE GROUND ACTIONS OF BATTALION STRENGTH OR LARGER WERE UNDER WAY, CLOSE TO AN ALLTIME RECORD . CONVERSELY, RED ATTACKS ALSO INCREASED FROM 300 TO 400 IN THE SAME PERIOD . AS THIS WEEK'S OPERATIONS ILLUSTRATE, HOWEVER, MANY GOVERNMENT TROOPS HAVE LEARNED TO STAND AND FIGHT . PERSONALITIES AND SAID SIMPLY : " WHAT HELPS THE WAR WE SUPPORT ; WHAT INTERFERES WITH THE WAR EFFORT WE OPPOSE . WE ARE NOT THERE TO SEE A WAR LOST . THAT IS OUR POLICY . " AS IF TO QUIET U.S . NERVOUSNESS, DIEM AT WEEK'S END ANNOUNCED THAT MARTIAL LAW, WHICH HAS BEEN IN EFFECT FOR ALMOST A MONTH, WILL END THIS WEEK, FORESHADOWING A POSSIBLE RETURN TO NORMALCY IN SOUTH VIET NAM . DRAGON LADY, DRAGONFLY IN A BLAZE OF FLASHBULBS, MME . NGO DINH NHU LEFT SAIGON LAST WEEK ON A TRIP TO BEIRUT, BELGRADE, AND POINTS WEST . ELABORATELY COIFFED AND GOWNED, SHE MET REPORTERS AND DEFENDED HER VIEWS, ATTACKED HER ENEMIES, DODGED OVERLY CURVED QUESTIONS, AND DISPLAYED AN INCREDIBLY FASCINATING FEMININE CHARM . WHETHER TWIRLING A PARASOL OR HIDING SHYLY BEHIND AN IVORY FAN, SHE BOTH ATTRACTED AND ANNOYED . " I HAD A STRONG DESIRE TO SLAP HER, " SAID ONE FRENCH TELEVISION INTERVIEWER, " BUT FROM VERY, VERY CLOSE . " AFTER THE LYNCHING . MME . NHU'S PERFORMANCE BEGAN AT THE SAIGON AIRPORT . SHE SAID THAT WHEN HER MOTHER CABLED HER FROM THE U.S . URGING HER TO FLEE SOUTH VIET NAM WITH HER CHILDREN BECAUSE THEIR LIVES WERE IN DANGER, SHE HAD ANSWERED : " DEAR MOTHER, I AM SORRY YOU HAVE BECOME INTOXICATED . " TO A QUESTION ABOUT HER ITINERARY, SHE SAID : " EVERYONE CALLS ME " THE DRAGON LADY.' FOR THE NEXT FEW WEEKS, I WILL BE LIKE THE DRAGONFLY OF THE VIETNAMESE SONG . WHEN IT'S HAPPY, IT STAYS ; WHEN IT'S UNHAPPY, IT FLIES AWAY . " TENTATIVELY, MME . NHU SAID, SHE PLANNED TO VISIT THE U.S., THOUGH IT WOULD BE LIKE GETTING INSIDE " A LION'S CAGE . " / I SHALL JUST TALK EXTEMPORANEOUSLY, " SHE SAID . " I AM INVITED BY THE MOST IMPORTANT PRESS GROUPS . AFTER LYNCHING ME, MORE OR LESS, NOW THEY WISH TO HEAR ME . " SHE DENIED THAT SHE WAS GOING TO BE SOUTH VIET NAM'S OBSERVER AT THE UNITED NATIONS GENERAL ASSEMBLY . " I HAVE NOTHING TO DO WITH THE U.N., " SHE SAID . " I AM NOT EVEN GOING THERE TO VISIT, BECAUSE I HAVE ALREADY SEEN IT . " OFFICIAL CONSTERNATION . AT THE INTERPARLIAMENTARY UNION CONFERENCE IN BELGRADE, WHERE SHE REPRESENTED SOUTH VIET NAM, MME . NHU STOLE THE SHOW WITH HER GRACEFUL PINK AODAI . THERE WAS FIRE IN HER EYES AND IN HER WORDS . THE DIEM GOVERNMENT WOULD NEVER YIELD TO " PERFIDIOUS BLACKMAILING ATTACKS, " SHE EXCLAIMED . WHAT ABOUT THE CONCERN FOR SOUTH VIET NAM'S BUDDHISTS VOICED BY THE VATICAN ? POPE PAUL VI IS TOO " EASILY WORRIED, " RETORTED MME . NHU . HER ACID REMARK SUPPLEMENTED EARLIER COMMENTS ON THE SAME SUBJECT ON FRENCH TELEVISION : " AS A CATHOLIC, I AM ONLY REQUIRED TO BELIEVE IN THE DOGMAS OF MY RELIGION AND THE POPE . THE POPE IS ONLY INFALLIBLE WHEN HE DECREES SOMETHING EX CATHEDRA . I DO NOT BELIEVE THAT HE WILL PUT HIMSELF IN HIS CHAIR TO DISAVOW ME, BECAUSE THAT WOULD BE A VERY BAD BLOW TO CATHOLICISM . " REPORTS THAT SHE WOULD NOT STAY AT THE CONFERENCE UNTIL ITS CONCLUSION LEFT OFFICIALS NEAR CONSTERNATION . " IF MME . NHU LEAVES ONE DAY EARLY, D ONE, " THEN THE CONFERENCE WILL HAVE LOST ITS IMPORTANCE . " BUT SHE SHOWED EVERY SIGN OF ENJOYING HERSELF . LETTING FLY AT THE WHITE HOUSE AFTER REPORTS THAT JOHN F . KENNEDY MIGHT BE A BIT UNHAPPY WITH SOUTH VIET NAM'S WHOLE RULING FAMILY, MME . NHU SUGGESTED THAT THE PRESIDENT WAS " MISINFORMED ABOUT THE SITUATION IN SOUTH VIET NAM . " / HE'S A POLITICIAN, AND WHEN HE HEARS LOUD OPPOSITION, HE TRIES TO APPEASE IT . " TWO DAYS LATER SHE HAD LUNCH WITH ANOTHER DELEGATE AT THE CONFERENCE . IT WAS NONE OTHER THAN THE PRESIDENT'S BROTHER, SENATOR EDWARD M . KENNEDY . LIKE OTHERS ON THE U.S . DELEGATION, TEDDY KENNEDY HAD HALFWAY HOPED TO AVOID THE CONFRONTATION . BUT THEY HAD A CHAT . A LONG CHAT . " SHE DISCUSSED AT LENGTH HER SIDE OF THE PICTURE, " SAID TEDDY LATER . " SHE WANTED TO TALK TO ME . SHE WANTS TO TALK TO ANYONE AND EVERYONE . " IN FACT, DECLARED AN AWED WITNESS TO THE ONE-SIDED CONVERSATION, " SHE DID NOT STOP TALKING FROM ONE MINUTE TO THE OTHER . " UNABLE TO GET A WORD IN EDGEWAYS, TEDDY TOOK NOTES . IT MAY HAVE BEEN THIS TART REMARK THAT PARTLY PROMPTED U.N . SECRETARY-GENERAL U THANT TO MAKE SOME WHOLLY GRATUITOUS OBSERVATIONS AT A MANHATTAN PRESS CONFERENCE . CONDITIONS IN SAIGON WERE " CHAOTIC, / DECLARED U THANT, ADDING THAT " CONSTITUTIONAL PROCESSES " ARE " A FEATURE WHICH IS COMPLETELY ABSENT IN VIET NAM . " THEY ARE, OF COURSE, COMPLETELY ABSENT IN HIS OWN COUNTRY, BURMA, WHICH IS RULED BY GENERAL NE WIN, AS FIRM A DICTATOR AS EXISTS IN SOUTHEAST ASIA BUT NEVER CRITICIZED BY U THANT .