A. According to the agreement, the people living on the island were shifted to Mauritius' main island, and the British paid some compensation for their rehabilitation.
B. Diego Garcia, a small island in the Indian Ocean was a part of the Group of Islands of Mauritius.
C. Today, it is a base of high strategic significance.
D. When Mauritius' independence was negotiated with the British in 1965 the colonial power insisted on the condition that Diego Garcia would continue to remain a British possession.
E. The British leased out the island to U.S.A. which set up a nuclear military base.
Statement E cannot start the paragraph because of the word 'the island', which indicates that it has already been mentioned in a previous statement. Among B and D only statement B appears to be the right choice because in statement D there is no explanation for Diego Garcia. Hence D is a continuation of a previous statement. Among B and D, choice D cannot be the answer because there is no time agreements between statements C and A and E and D. Hence B is the obvious choice.