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Inside Report (3)

''We need a better abacus,'' said the British official laconically.

Using typical understatement, he meant that Britain must now strengthen its military intelligence-gathering. Three times British forces were surprised in the Falklands campaign: At the number of Argentine forces at Goose Green, at the number of islanders still in Port Stanley, and at the large numbers of Argentine soldiers in the capital.

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The Defense Ministry is reviewing procedures to find out why intelligence did not reveal more exact numbers ahead of time. Officials admit concern at the underestimates.