On July 26, the United States, Britain, and China released the Potsdam Declaration, announcing the terms for Japan's surrender, with the warning, "We will not deviate from them. There are no alternatives. We shall brook no delay."
the elimination "for all time [of] the authority and influence of those who have deceived and misled the people of Japan into embarking on world conquest"
the occupation of "points in Japanese territory to be designated by the Allies"
"Japanese sovereignty shall be limited to the islands of Honshū, Hokkaidō, Kyūshū, Shikoku and such minor islands as we determine." As had been announced in the Cairo Declaration in 1943, Japan was to be stripped of her pre-war empire, including Korea and Taiwan, as well as all her recent conquests.
"The Japanese military forces shall be completely disarmed"
"stern justice shall be meted out to all war criminals, including those who have visited cruelties upon our prisoners"
But on the other hand,
"We do not intend that the Japanese shall be enslaved as a race or destroyed as a nation, ... The Japanese Government shall remove all obstacles to the revival and strengthening of democratic tendencies among the Japanese people. Freedom of speech, of religion, and of thought, as well as respect for the fundamental human rights shall be established."
"Japan shall be permitted to maintain such industries as will sustain her economy and permit the exaction of just reparations in kind, ... Japanese participation in world trade relations shall be permitted."
"The occupying forces of the Allies shall be withdrawn from Japan as soon as these objectives have been accomplished and there has been established in accordance with the freely expressed will of the Japanese people a peacefully inclined and responsible government.
The only mention of "unconditional surrender" came at the end:
"We call upon the government of Japan to proclaim now the unconditional surrender of all Japanese armed forces, and to provide proper and adequate assurances of their good faith in such action. The alternative for Japan is prompt and utter destruction."
Whether the Emperor was of one those who had "misled the people of Japan", or even a war criminal—or potentially part of a "peacefully inclined and responsible government" was left unstated.
On July 27, the Japanese government considered how to respond to the Declaration. The four military members of the Big Six wanted to reject it, but Togo persuaded the cabinet not to do so until he could get a reaction from the Soviets. In a telegram, Kase Shunichi, Japan's ambassador to Switzerland, observed that unconditional surrender applied only to the military and not to the government or the people, and he pleaded that it should be understood that the careful language of Potsdam appeared "to have occasioned a great deal of thought" on the part of the signatory governments—"they seem to have taken pains to save face for us on various points." The next day, Japanese paper reported that the Declaration, the text of which had been broadcast and dropped on leaflets into Japan, had been rejected. In an attempt to manage public perception, Prime Minister Suzuki met with the press, and stated,
"The Joint Proclamation ... is nothing but a rehash of the Cairo Declaration. As for the Government, it does not find any important value in it; the government will just mokusatsu it."
The meaning of the word "mokusatsu", literally "kill with silence", is not precise; it can range from 'ignore' to 'treat with contempt'—which actually described fairly accurately the range of effective reactions within the government. However, Suzuki's statement was taken as a rejection by the press, both in Japan and abroad, and
no further statement was made in public or through diplomatic channels to alter this understanding.