The 1959 to 1963 phase of the Vietnam War started after the North Vietnamese had made a firm decision to commit to a military intervention in the guerrilla war in South Vietnam, a buildup phase began, between the 1959 North Vietnamese decision and the Gulf of Tonkin Incident, which led to a major US escalation of its involvement. Vietnamese communists saw this as a second phase of their revolution, the US now substituting for the French.

Between the Geneva accords in 1954 and 1956, the two states created by the talks were still forming; the influence of major powers, especially France and the United States, and to a lesser extent China and the Soviet Union, were as much an influence as any internal matters. There is little question that in 1957–1958, there was a definite early guerrilla movement against the Diệm government, involving individual assassinations, expropriations, recruiting, shadow government. The insurgents were South Vietnamese rebels or northerners who had been living there for some time. While there was clearly communications and perhaps arms supply from the north, there is little evidence of any Northern units in the South, although organizers may well have infiltrated.

There was endemic insurgency in South Vietnam throughout the period 1954–1960. It can also be establishedbut less surelythat the Diệm regime alienated itself from one after another of those domestic sectors which might have offered it political support, and was grievously at fault in its rural programs. That these conditions engendered animosity toward the Southern dictatorship seems almost certain, and they could have led to a major resistance movement even without North Vietnamese help.

There is little doubt that there was some kind of Viet Minh-derived "stay behind" organization between 1954 and 1960, but it is unclear whether they were directed to take over action until 1957 or later. Before that, they were unquestionably recruiting and preparing.

While the visible guerrilla incidents increased gradually, the key policy decisions by the North were made in 1959. Early in this period, there was a greater degree of conflict in Laos than in South Vietnam. US combat involvement was, at first, greater in Laos, but the activity of advisors, and increasingly US direct support to South Vietnamese soldiers, increased, under US military authority, in late 1959 and early 1960. Communications intercepts in 1959, for example, confirmed the start of the Ho Chi Minh trail and other preparation for large-scale fighting. North Vietnam declared its public support for communist insurgents in South Vietnam. The communist forces in South Vietnam established the National Front for the Liberation of South Vietnam (Viet Cong). At the same time, the United States helped the South Vietnamese regime conduct its war strategy. Despite this assistance, the communist forces still won on the battlefield, fighting several large campaigns next to the big cities. Diệm was unable to take control of political crisis and was overthrown by the Council of Revolutionary Military (some documents of both sides suggest that it was the United States which had given the green light for this coup). After several years of chaos, the Ngô Đình Diệm government came to an end in 1963 and South Vietnam then fell into management crisis.

Competing strategies In April 1959, a branch of the Lao Động (Worker's Party of Vietnam), of which Ho Chi Minh became Secretary-General in 1956, was formed in the South, and communist underground activity increased. Some of the 90,000 Viet Minh troops that had returned to the North following the Geneva Agreements had begun filtering back into the South to take up leadership positions in the insurgency apparat. Mass demonstrations, punctuated by an occasional raid on an isolated post, were the major activities in the initial stage of this insurgency. Communist-led uprisings launched in 1959 in the lower Mekong Delta and Central Highlands resulted in the establishment of liberated zones, including an area of nearly fifty villages in Quảng Ngãi Province. In areas under communist control in 1959, the guerrillas established their own government, levied taxes, trained troops, built defense works, and provided education and medical care. In order to direct and coordinate the new policies in the South, it was necessary to revamp the party leadership apparatus and form a new united front group.

North Vietnam committed, in May 1959, to war in the South; this was confirmed by communications intelligence. Diệm, well before that point, had constantly pushed a generic anticommunism, but how much of this was considered a real threat, and how much a nucleus around which he justified his controls, is less clear. Those controls, and the shutdown of most indigenous opposition by 1959, were clearly alienating the Diệm government from significant parts of the Southern population. The government was massively mismanaging rural reforms and overemphasizing its power base in the cities, which might have had an independent rebellion. North Vietnam, however, clearly began to exploit that alienation. The US, however, did not recognize a significant threat, even with such information as intelligence on the formation of the logistics structure for infiltration. The presentation of hard evidence — communications intelligence about the organization building the Ho Chi Minh trail — of Hanoi's involvement in the developing strife became evident. Not until 1960, however, did the US recognize both Diệm was in danger, that the Diệm structure was inadequate to deal with the problems, and present the first "Counterinsurgency Plan for Vietnam (CIP)"

Republic of Vietnam strategy Quite separate from its internal problems, South Vietnam faced an unusual military challenge. On the one hand, there was a threat of a conventional, cross-border strike from the North, reminiscent of the Korean War. In the fifties, the U.S. advisors focused on building a "mirror image" of the U.S. Army, designed to meet and defeat a conventional invasion.

Diệm (and his successors) were primarily interested in using the Army of the Republic of Vietnam (ARVN) as a device to secure power, rather than as a tool to unify the nation and defeat their enemies. Province and District Chiefs in the rural areas were usually military officers, but reported to political leadership in Saigon rather than the military operational chain of command. The 1960 "Counterinsurgency Plan for Vietnam (CIP)" from the U.S. Military Assistance Advisory Group (MAAG) was a proposal to change what appeared to be a dysfunctional structure. Further analysis showed the situation was not only a jockeying for power, but also reflected that the province chiefs indeed had security authority that could conflict with that of tactical military operations in progress, but also had responsibility for the civil administration of the province. That civil administration function became more and more intertwined, starting in 1964 and with acceleration in 1966, of the "other war" of rural development., pp. 68–71

An issue that remains unclear is whether or not any of the post-Diệm governments seriously explored a neutralist solution through direct negotiations with Hanoi, which would have been against U.S. policy. Contemporary intelligence analyses discount such negotiations, although they remained an undercurrent; Robert McNamara's 1999 book says that "Big" Minh, the leader of the coup that actually overthrew Diệm, was actively exploring such an approach without informing the U.S., pp. 113–114

Throughout this period, there clearly was a lack of information about South Vietnamese motivations. Analyses by the Bureau of Intelligence and Research (INR) of the U.S. Department of State define the political problems from a viewpoint different from that of the military., pp. 10–12 They described the immediate post-coup government, controlled by the popular "Big" Minh with Nguyen Ngoc Tho as figurehead Prime Minister, unable to get control, and the Khánh-led military junta that replaced him simply being a period of instability.

INR saw the priority during this period as more a matter of establishing a viable, sustainable political structure for South Vietnam, rather than radically improving the short-term security situation. It saw the Minh-Tho government as enjoying an initial period of popular support as it removed some of the most disliked aspects of the Diệm government. During this time, the increase in VC attacks was largely coincidental; they were resulting from the VC having reached a level of offensive capability rather than capitalizing on the overthrow of Diệm.

Contrary to the INR analysis, Douglas Pike said that there was a substantial defection from the NLF after the overthrow of Diệm, especially among Cao Đài that had considered themselves as especially persecuted by Diệm. Pike believed that a portion of the NLF was variously anti-Diệm, or simply in search of political power, rather than Communist. When this part left, the NLF came much more closely under Hanoi's control., p. I-8

During this period, INR observed, in a December 23 paper, the U.S. needed to reexamine its strategy focused on the Strategic Hamlet Program, since it was getting much more accurate — if pessimistic — from the new government than it had from Diệm. Secretary McNamara, however, testified to the House Armed Services Committee, on December 27, that only a maximum effort of American power could salvage the situation. Two days later, the Minh-Tho government was overthrown.

INR looked pessimistically at Khánh, who claimed that Minh had been making overtures to Hanoi for a neutralist settlement.INR-VN4, p. 12 It was the contemporary assessment of INR that Minh had been making no such overtures, although this is contradicted by Secretary McNamara's 1999 book.

Whether or not Khánh was right about Minh's plan, INR judged Minh as motivated primarily by personal ambition. Where Minh had tried to form a government of technicians, Khánh, admittedly with U.S. urging, brought in political elements, which quickly led to factionalism not present under Minh's period of good will. INR saw Khánh as having a contradictory policy in terms of U.S. goals: while he did increase security, he did so by means judged counterproductive in broadening the political base of the government.

INR considered new student demonstrations, in April 1964, as the first warning of a new wave of protest, which became more manifest in August. Those demonstrations contained anti-American messages, but INR was uncertain if they represented true anti-Americanism, or simply opposition to American support of Khánh. As opposed to Diệm's catastrophic handling of the Buddhist crisis, Khánh responded with moderation, and, on August 28, INR concluded he was, in fact, improving the political situation. Evidence cited including the dissolution, in the next two weeks, of Minh's military triumvirate and Minh's election as chairman of a new Provisional Steering Committee, as well as release of some jailed generals that had supported Minh. INR suggested that Khánh may have caused the unrest by supporting the genuinely popular Khánh. Khánh, however, promptly sent Minh to exile in Thailand.

Note that Minh was exiled within the same month as the Gulf of Tonkin incident, with its obvious ramifications of increased U.S. involvement.

Communist strategy