Linear thermoelastic problems are solved for the thermal stress and displacement fields in an elastic solid of infinite extent weakened by a plane of discontinuity or crack occupying the space outside of a circular region. The faces of the crack are heated by maintaining them at certain temperature and/or by some prescribed heat flux the distributions of which are such that their magnitudes diminish at infinity. Special emphasis is given to the case when the circular region surrounded by the external crack is insulated from heat flow. The solution to this thermal stress problem may be combined with that of applying appropriate tractions to the crack faces, thus providing the necessary ingredients for extending the Dugdale hypothesis to thermally-stressed bodies containing cracks. More specifically, the results of the analysis permit an estimate of the plastic zone size and the plastic energy dissipation for an external circular crack. Information of this kind contributes to the understanding of the mechanics of fracture initiation in ductile materials.