Khrushchev and McCloy discuss the German peace treaty, with Khrushchev praising Eisenhower’s disarmament efforts and reaffirming the USSR’s intent to sign the treaty regardless of US opposition. They exchange views on nuclear testing, disarmament, and verification mechanisms, with both sides recognizing the challenges of inspections and trust. The conversation ends with agreement to continue talks the following day to further explore disarmament and German settlement issues.