The situation worsens in South Vietnam, as the Viet Cong attack and capture the district headquarters at An Lao and much of the surrounding valley 300 miles northeast of Saigon.
South Vietnamese troops regained control only after reinforcements were airlifted into the area by U.S. helicopters. During the course of the action, two U.S. advisors were killed. There were over 300 South Vietnamese casualties and as many as 7,000 villagers were temporarily forced to abandon their homes.
In response, Ambassador Maxwell Taylor, who had just returned from Washington, held a series of conferences with Premier Tran Van Huong, General Nguyen Khanh, and other South Vietnamese leaders. Taylor told them that the United States would provide additional financial aid to help stabilize the worsening situation in the countryside. It was agreed that the funds would be used to strengthen South Vietnam's military forces (which South Vietnam agreed to increase by 100,000 men) and to "further economic assistance for a variety of reforms of industrial, urban, and rural development." Nothing was said during these discussions about President Lyndon B. Johnson's plans to commence the bombing of North Vietnam, which had been decided during Taylor's meeting with the president and his advisers when Taylor was in Washington earlier in December.