Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

Netanyahu to discuss Iran, Syria, Palestinians with Obama


JERUSALEM (Reuters) - Iran's nuclear ambitions, the civil war in Syria and stalled Israeli-Palestinian peace efforts will top the agenda of U.S. President Barack Obama's visit to Israel, Prime Minister Benjamin Netanyahu said on Sunday.


"It is a very important visit that will emphasize the strong alliance between Israel and the United States," Netanyahu, who has had a testy relationship with Obama, told his cabinet.


The White House announced on Tuesday that Obama plans to visit Israel, the West Bank and Jordan this spring, raising prospects of a new U.S. push to restart Israeli-Palestinian peace efforts frozen for the past two years.


The White House gave no exact dates for the trip, Obama's first to Israel since taking office. Israel's Channel 10 television station cited unnamed sources in Washington last week saying the visit to Israel would start on March 20.


In public remarks at the cabinet session, Netanyahu put Iran at the top of his list of talking points with Obama and referred only in general terms to peace efforts with the Palestinians, stopping short of setting a revival of bilateral negotiations as a specific goal of the visit.


"The president and I spoke about this visit and agreed that we would discuss three main issues ... Iran's attempt to arm itself with nuclear weapons, the unstable situation in Syria ... and the efforts to advance the diplomatic process of peace between the Palestinians and us," Netanyahu said.


U.S.-hosted negotiations between Israel and the Palestinians collapsed in September 2010 in a dispute over Israeli settlement-building in the occupied West Bank, land captured in a 1967 war and which Palestinians seek as part of a future state that includes Gaza and East Jerusalem.


Obama and Netanyahu discussed the coming trip in a January 28 telephone call.


COALITION TALKS


The visit will take place only after Netanyahu puts together a new governing coalition following his narrower-than-expected victory in Israel's January 22 election.


Netanyahu, who heads the right-wing Likud party, has begun talks with prospective political partners and still has up to five weeks to complete the process.


Citing the dangers Israel faces from the "earthquake that is happening around us", a reference to Arab upheaval in the region and the prospect of a nuclear-armed Iran, Netanyahu said Obama's visit now was particularly important.


Obama's tensions with Netanyahu have been aggravated by the Israeli leader's demands for U.S. "red lines" on Iran's nuclear program - something the president has resisted, though he has said military options are on the table if sanctions and diplomacy fail.


Iranian President Mahmoud Ahmadinejad said on Sunday that Tehran would not negotiate about its nuclear program under pressure, and would talk to its adversaries only if they stopped "pointing the gun".


Iran dismisses Western suspicions that its nuclear program is aimed at building weapons. Israel is widely believed to have the Middle East's only nuclear arsenal.


Netanyahu has insisted he will stick to the red line laid down in September, when he told the United Nations that Iran should not have enough enriched uranium to make even a single warhead.


He gave a rough deadline of summer 2013, and Israeli political commentators have speculated that Obama had opted to visit Israel before that date to caution Netanyahu against any go-it-alone attack against Iran's nuclear facilities.


Obama visited Israel as a presidential candidate in 2008 but drew Republican criticism for not travelling there in his first term. His Republican predecessor, former President George W. Bush, also waited until his second term to go to Israel.


(Editing by Matthew Tostevin)



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Protests erupt as India executes man for 2001 parliament attack


NEW DELHI (Reuters) - India hanged a Kashmiri man on Saturday for an attack on the country's parliament in 2001, sparking clashes in Kashmir between protesters and police who wielded batons and fired teargas. Dozens of people were injured.


President Pranab Mukherjee rejected a mercy petition from Mohammad Afzal Guru and he was hanged at 8 a.m. (0230 GMT) in Tihar jail in the capital, New Delhi. Security forces anticipating unrest had imposed a curfew in parts of insurgency-torn Kashmir and ordered people off the streets.


Guru, from the Indian part of divided Kashmir, was convicted of helping organize arms for the gunmen who made the attack and a place for them to stay. He always maintained his innocence.


India blamed the attack on the parliament of the world's largest democracy on militants backed by Pakistan, targeting the prime minister, interior minister and legislators in one of the country's worst ever militant attacks.


Pakistan denied any involvement and condemned the attack but tension rose sharply and brought the nuclear-armed rivals dangerously close to their fourth war. Nearly a million soldiers were mobilized on both sides of the border and fears of war only dissipated months later, in June 2002.


The hanging was ordered less than three months after India executed the lone surviving gunman of a 2008 attack in the city of Mumbai in which 166 people were killed.


Saturday's execution could help the ruling Congress party deflect opposition criticism of being soft on militancy as it gears up for a series of state elections this year and a general election due by 2014, while grappling with an economic slowdown.


"Congress has decided to be more proactive in view of the elections, not only in terms of economic policy but also matters like the hanging," said political analyst Amulya Ganguli.


"The Congress has now deprived the BJP of a propaganda plank," he said, referring to the main opposition Bharatiya Janata Party.


Government officials dismissed suggestions that electoral politics played a role in the decision to execute Guru.


In major towns of Indian Kashmir, where security forces have battled a Muslim separatist insurgency for decades, barricades were erected and hundreds of police and paramilitary force members were deployed.


"The hanging of Afzal Guru is a declaration of war by India," said Hilal Ahmad War, leader of a separatist faction.


Thirty-six people including 23 policemen were injured in protests, said police spokesman Manoj Sheeri, with most of the violence in Guru's home district.


Authorities shut down internet services to try to stop news of the hanging and unrest spreading. The chief minister of Jammu and Kashmir state, Omar Abdullah, made a televised appeal for calm.


Scuffles also broke out in New Delhi between Hindu activists and demonstrators who gathered at a city-centre protest site to condemn the execution, a Reuters witness said.


WARNING


Five militants stormed the parliament complex in New Delhi on December 13, 2001, armed with grenades, guns and explosives, but security forces killed them before they could enter the main chamber. Ten other people, most of them security officers, were killed.


Guru said he never got a fair trial and his brother reiterated that on Saturday, adding that authorities had not warned the family of his execution.


"At least the government should have given the family a chance to meet him," said the brother, Ajaz Ahmad Guru. "He didn't get a fair trial. His wife is in deep shock."


India said the Pakistan-based Jaish-e-Mohammad militant group was responsible for the parliament attack. The group fights Indian rule in Muslim-majority Kashmir.


The hanging last year of Mohammad Ajmal Kasab, the lone surviving Pakistani militant involved in the 2008 Mumbai attacks, after a long lull in executions, prompted speculation that India would move quickly to execute Guru.


But unlike Kasab's execution, which sparked celebrations in the streets, Guru's case was seen as more divisive.


Some Kashmiri leaders warned that hanging Afzal would fuel the revolt in India's part of the Himalayan region in which tens of thousands of people have been killed since 1989.


Curfews were imposed in Srinagar, the region's summer capital in the Kashmir valley, and major towns including Baramulla, Guru's home town.


Kashmir is divided between India and Pakistan, both of which claim the region in full and rule it in part. They have fought two of their three wars over the region.


In Pakistan-controlled Kashmir, more than 250 people took to the streets to protest against the hanging, shouting "Down with India" and burning an Indian flag.


India has long accused Muslim Pakistan of arming and funding militants to fight Indian forces in Kashmir. Pakistan says it only provides moral support to the fellow-Muslim people of Kashmir, who, Pakistan says, face harsh Indian rule.


The dispute, a legacy of the division of the sub-continent at the end of British rule, is the main factor souring relations between the neighbors.


(Additional reporting by Fayaz Bukhari, Mansi Thapliyal, Ashok Pahalwan, Abu Arqam Naqash, Arnika Thakur and Satarupa Bhattacharjya; Editing by Ross Colvin and Robert Birsel)



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Tens of thousands mourn slain Tunisia opposition leader


TUNIS (Reuters) - Tens of thousands of Tunisians took to the streets amid scattered violence on Friday to mourn secular opposition leader Chokri Belaid, whose assassination has plunged Tunisia deeper into political crisis.


Braving chilly rain, at least 50,000 people turned out for Belaid's funeral in his home district of Jebel al-Jaloud in the capital, chanting anti-Islamist and anti-government slogans.


It was Tunisia's biggest funeral since the death of Habib Bourguiba, independence leader and first president, in 2000.


Tunisia, cradle of the Arab uprisings, is riven by tensions between dominant Islamists and their secular opponents, and by frustration at the lack of social and economic progress since President Zine al-Abidine Ben Ali was ousted in January 2011.


"The people want a new revolution," shouted mourners in Tunis, who also sang the national anthem.


Crowds surged around an open army truck carrying Belaid's coffin, draped in a red and white Tunisian flag, from a cultural center in Jebel al-Jaloud towards the leafy Jallaz cemetery, as a security forces helicopter flew overhead.


Police fired teargas and shots in the air to disperse youths who were smashing cars near the cemetery, forcing some mourners to run from the choking clouds. Police also used teargas against demonstrators outside the Interior Ministry.


"Belaid, rest in peace, we will continue the struggle," mourners chanted, holding portraits of the politician killed near his home on Wednesday by a gunman who fled on a motorcycle.


Some demonstrators denounced Rachid Ghannouchi, leader of the ruling Islamist Ennahda party. "Ghannouchi, assassin, criminal," they chanted. "Tunisia is free, terrorism out."


Police fired teargas to disperse anti-government protesters throwing stones and petrol bombs in the southern mining town of Gafsa, a stronghold of support for Belaid, witnesses said.


Crowds there had chanted "The people want the fall of the regime", a slogan first used against Ben Ali.


CRADLE OF REVOLT


In Sidi Bouzid, the southern town where the revolt against the ousted strongman began, about 10,000 marched to mourn Belaid and shout slogans against Ennahda and the government.


Banks, factories and some shops were closed in Tunis and other cities in response to a strike called by unions in protest at Belaid's killing, but buses were running normally.


Tunis Air suspended all its flights because of the strikes, a spokesman for the national airline said, adding that flights operated by other airlines were not affected.


However, airport sources in Cairo said Egypt's national airline EgyptAir had canceled two flights to Tunisia after staff at Tunis airport joined the general strike.


After Belaid's assassination, Prime Minister Hamdi Jebali, an Islamist, said he would dissolve the government and form a cabinet of technocrats to rule until elections could be held.


But his own Ennahda party and its secular coalition partners complained they had not been consulted, casting doubt over the status of the government and compounding political uncertainty.


No one has claimed responsibility for the killing of Belaid, a lawyer and secular opposition figure.


His family have blamed Ennahda but the party has denied any hand in the shooting. Crowds have attacked several Ennahda party offices in Tunis and other cities in the past two days.


"Hope still exist in Tunisia," Fatma Saidan, a noted Tunisian actor, told Reuters at Belaid's funeral. "We will continue to struggle against extremism and political violence."


She called for national unity, saying: "We are ready to accept Islamists, but they don't accept us."


SECULAR SYMBOL


While Belaid had only a modest political following, his criticism of Ennahda policies spoke for many Tunisians who fear religious radicals are bent on snuffing out freedoms won in the first of the revolts that rippled through the Arab world.


Secular groups have accused the Islamist-led government of a lax response to attacks by ultra-orthodox Salafi Islamists on cinemas, theatres and bars in recent months.


The economic effect of political uncertainty and street unrest could be serious in a country which has yet to draft a new constitution and which relies heavily on the tourist trade.


Mohamed Ali Toumi, president of the Tunisian Federation of Travel Agencies, described the week's events as a catastrophe that would have a negative impact on tourism, but he told the national news agency TAP no cancellations had been reported yet.


France, which had already announced the closure of its schools in Tunis on Friday and Saturday, urged its nationals to stay clear of potential flashpoints in the capital.


"Unless unavoidable, it is best to stay away from the city center today, and steer clear of demonstrations and major road crossings or sensitive buildings," said Helene Conway-Mouret, minister in charge of French people living abroad.


The Austrian foreign ministry issued a similar warning.


The cost of insuring Tunisian government bonds against default rose to its highest level in more than four years on Thursday and ratings agency Fitch said it could further downgrade Tunisia if political instability continues or worsens.


(For an interactive look at Tunisia please click on http://link.reuters.com/tub85t )


(Additional reporting by Alexander Dziadosz in Cairo, Brian Love in Paris and Michael Shields in Vienna; Editing by Andrew Heavens)



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Khamenei rebuffs U.S. offer of direct talks


DUBAI (Reuters) - Iran's highest authority, Ayatollah Ali Khamenei, on Thursday slapped down an offer of direct talks made by U.S. Vice President Joe Biden this week, saying they would not solve the problem between them.


"Some naive people like the idea of negotiating with America, however, negotiations will not solve the problem," Khamenei said in a speech to officials and members of Iran's air force carried on his official website.


"If some people want American rule to be established again in Iran, the nation will rise up to face them," he said.


"American policy in the Middle East has been destroyed and Americans now need to play a new card. That card is dragging Iran into negotiations."


Khamenei made his comments just days after Joe Biden said the United States was prepared to meet bilaterally with the Iranian leadership. "That offer stands but it must be real and tangible," Biden said in a speech in Munich.


With traditional fiery rhetoric, Khamenei lambasted Biden's offer, saying that since the 1979 revolution the United States had gravely insulted Iran and continued to do so with its threat of military action.


"You take up arms against the nation of Iran and say: 'negotiate or we fire'. But you should know that pressure and negotiations are not compatible and our nation will not be intimidated by these actions," he added.


Relations between Iran and the United States were severed in 1979 after the overthrow of Iran's pro-western monarchy and diplomatic meetings between officials have since been very rare.


ALL OPTIONS STILL "ON THE TABLE"


Currently U.S.-Iran contact is limited to talks between Tehran and a so-called P5+1 group of powers on Iran's disputed nuclear program which are to resume on February 26 in Kazakhstan.


Israel's Deputy Prime Minister Dan Meridor said he was skeptical the negotiations in Almaty could yield a result, telling Israel Radio that the United States needed to demonstrate to Iran that "all options were still on the table".


Israel, widely recognized to be the only nuclear power in the Middle East, has warned it could mount a pre-emptive strike on Iranian atomic sites. Israel sees its existence as directly threatened by the prospect of an nuclear-armed Iran, given Tehran's refusal to recognize the existence of the Jewish state.


"The final option, this is the phrasing we have used, should remain in place and be serious," said Meridor.


"The fact that the Iranians have not yet come down from the path they are on means that talks ...are liable to bring about only a stalling for time," he said.


Iran maintains its nuclear program is entirely peaceful but Western powers are concerned it is intent on developing a weapons program.


Many believe a deal on settling the nuclear issue is impossible without a U.S.-Iranian thaw. But any rapprochement would require direct talks addressing many sources of mutual mistrust that have lingered since Iran's 1979 Islamic Revolution and the subsequent U.S. embassy hostage crisis in Tehran.


Moreover, although his re-election last November may give President Barack Obama a freer hand to pursue direct negotiations, analysts say Iran's own presidential election in June may prove an additional obstacle to progress being made.


(Additional reporting by Dan Williams; Editing by William Maclean and Jon Boyle)



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Tunisia protests after government critic shot dead


TUNIS (Reuters) - A Tunisian opposition politician was shot dead on Wednesday, sending protesters onto the streets of cities nationwide two years after the uprisings that swept Tunisia's president from power and inflamed the Arab world.


The headquarters of the moderate Islamist Ennahda party, which rules in a fractious coalition with secularists, was set ablaze after Chokri Belaid, an outspoken critic of the government, was gunned down outside his home in the capital.


Prime Minister Hamadi Jebali, who said the identity of the attacker was not known, condemned Belaid's killing as a political assassination and a strike against the "Arab Spring" revolution. Ennahda denied any involvement by the part.


Despite calls for calm from the president, 8,000 protesters, massed outside the Interior Ministry, calling for the fall of the government, and thousands more demonstrated in cities including Mahdia, Sousse, Monastir and Sidi Bouzid, the cradle of the revolution, where police fired teargas and warning shots.


"This is a black day in the history of modern Tunisia ... Today we say to the Islamists, 'get out' ... enough is enough," said Souad, a 40-year-old teacher outside the Interior Ministry in Tunis. "Tunisia will sink in the blood if you stay in power."


The small North African state was the first Arab country to oust its leader and hold free elections as uprisings spread around the region, leading to the ousting of the rulers of Egypt, Yemen and Libya and to the civil war in Syria.


But like in Egypt, many who campaigned for freedom from repression under autocratic rulers and better prospects for their future now feel their revolutions have been hijacked by Islamists they accuse of clamping down on personal freedoms, with no sign of new jobs or improvements in infrastructure.


HARDSHIP


Since the uprising, the government has faced a string of protests over economic hardship and Tunisia's future path, with many complaining hardline Salafists were taking over the revolution in the former French colony dominated previously by a secular elite under the dictatorship of Zine al-Abidine Ben Ali.


Last year, Salafist groups prevented several concerts and plays from taking place in Tunisian cities, saying they violated Islamic principles, worrying the secular-minded among the 11 million Tunisians, who fear freedom of expression is in danger.


Declining trade with the crisis-hit euro zone has also left Tunisians struggling to achieve the better living standards many had hoped for following Ben Ali's departure. Any further signs of unrest could scare off tourists vital to an industry only just recovering from the revolution.


"More than 4,000 are protesting now, burning tires and throwing stones at the police," Mehdi Horchani, a Sidi Bouzid resident, told Reuters. "There is great anger."


Jobless graduate Mohamed Bouazizi set himself on fire in December 2010 in the city, 300 km (180 miles) southwest of Tunis, after police confiscated his unlicensed fruit cart, triggering the "Jasmine Revolution" that forced Ben Ali to flee to Saudi Arabia less than a month later, on January 14, 2011.


President Moncef Marzouki, who last month warned the tension between secularists and Islamists might lead to "civil war", canceled a visit to Egypt scheduled for Thursday and cut short a trip to France, where he addressed the European Parliament.


"We will continue to fight the enemies of the revolution," the secularist leader told European Union lawmakers in Strasbourg.


Belaid, who died in hospital, was a leading member of the opposition Popular Front party. A lawyer and human rights activist, he had been a constant critic of the government, accusing it of being a puppet of the rulers in the small but wealthy Gulf state of Qatar, which Tunisia denies.


"Chokri Belaid was killed today by four bullets to the head and chest," Ziad Lakhader, a leader of the Popular Front, told Reuters. "Doctors told us that he has died. This is a sad day for Tunisia."


DENIES INVOLVEMENT


Ennahda Prime Minister Jebali said the killers wanted to "silence his voice".


"The murder of Belaid is a political assassination and the assassination of the Tunisian revolution," he said.


Party President Rached Ghannouchi denied any involvement in the killing. Belaid said earlier this week that dozens of people close to the government attacked a meeting of his party.


"Is it possible that the ruling party could carry out this assassination when it would disrupt investment and tourism?" Ghannouchi told Reuters.


He blamed those seeking to derail Tunisia's democratic transition after a 2011 uprising. "Tunisia today is in the biggest political stalemate since the revolution. We should be quiet and not fall into a spiral of violence. We need unity more than ever," Ghannouchi said.


He accused secular opponents of stirring up sentiment against his party following Belaid's death. "The result is burning and attacking the headquarters of our party in many areas," he said.


French President Francois Hollande condemned the shooting, saying he was concerned by the rise of violence in Paris's former dominion, where the government says al Qaeda-linked militants linked to those in neighboring countries have been accumulating weapons with the aim of creating an Islamic state.


"This murder deprives Tunisia of one of its most courageous and free voices," Hollande's office said in a statement.


Riccardo Fabiani, Eurasia analyst on Tunisia, described it as a "major failure for Tunisian politics".


"The question is now what is Ennahda going to do and what are its allies going to do?" he said. "They could be forced to withdraw from the government which would lead to a major crisis in the transition."


Marzouki warned last month that the conflict between Islamists and secularists could lead to civil war and called for a national dialogue that included all political groupings.


Ennahda won 42 percent of seats in a parliamentary election in 2011 and formed a government in coalition with two secular parties, the Congress for the Republic, to which President Marzouki belongs, and Ettakatol.


Marzouki's party threatened on Sunday to withdraw from the government unless it dropped two Islamist ministers.


(Additional reporting by John Irish in Paris; Writing by Alison Williams; Editing by Alastair Macdonald)



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Iran's Ahmadinejad in Egypt on historic visit


CAIRO (Reuters) - Mahmoud Ahmadinejad arrived in Egypt on Tuesday on the first trip by an Iranian president since the 1979 revolution, underlining a thaw in relations since Egyptians elected an Islamist head of state.


President Mohamed Mursi, the Muslim Brotherhood politician elected in June, kissed Ahmadinejad as he disembarked from his plane at Cairo airport. The leaders walked down a red carpet, Ahmadinejad smiling as he shook hands with waiting dignitaries.


Visiting Cairo to attend an Islamic summit that begins on Wednesday, the president of the Shi'ite Islamist republic is due to meet later on Tuesday with the grand sheikh of al-Azhar, one of the oldest seats of learning in the Sunni world.


Such a visit would have been unthinkable during the rule of Hosni Mubarak, the military-backed autocrat who preserved Egypt's peace treaty with Israel during his 30 years in power and deepened ties between Cairo and the West.


"The political geography of the region will change if Iran and Egypt take a unified position on the Palestinian question," Ahmadinejad said in an interview with Al Mayadeen, a Beirut-based TV station, on the eve of his visit.


He said he wanted to visit the Gaza Strip, the Palestinian territory which neighbors Egypt to the east and is run by the Islamist movement Hamas. "If they allow it, I would go to Gaza to visit the people," Ahmadinejad said.


Analysts doubt that the historic changes that brought Mursi to power in Egypt will result in a full restoration of diplomatic ties between states whose relations were broken off after the Iranian revolution and the conclusion of Egypt's peace treaty with Israel in 1979.


OBSTACLES TO FULL TIES


At the airport the two leaders discussed ways of boosting relations between their countries and resolving the Syrian crisis "without resorting to military intervention", Egyptian state media reported.


Egypt is concerned by Iran's support for Syrian President Bashar al-Assad, who is trying to crush an uprising inspired by the revolt that swept Mubarak from power two years ago. Egypt's overwhelmingly Sunni Muslim population is broadly supportive of the uprising against Assad's Alawite-led administration.


The Mursi administration also wants to safeguard relations with Gulf Arab states that are supporting Cairo's battered state finances and are deeply suspicious of Iran.


Egyptian Foreign Minister Mohamed Kamel Amr reassured Gulf Arab allies that Egypt would not jeopardize their security.


"The security of the Gulf states is the security of Egypt," he told the official MENA news agency, in response to questions about Cairo's opening to Iran and its impact on other states in the region.


Mursi wants to preserve ties with the United States, the source of $1.3 billion in aid each year to the influential Egyptian military.


His government has established close ties with Hamas, a movement backed by Iran and shunned by the West because of its hostility to Israel, but its priority is addressing Egypt's deep economic problems.


"The restoration of full relations with Iran in this period is difficult, despite the warmth in ties ... because of many problems including the Syrian crisis and Cairo's links with the Gulf states, Israel and the United States," said one former Egyptian diplomat.


Speaking to Reuters on the sidelines of preparatory meetings for the two-day Islamic summit, Iranian Foreign Minister Ali Akbar Salehi said he was optimistic that ties could grow closer.


"We are gradually improving. We have to be a little bit patient. I'm very hopeful about the expansion of the bilateral relationship," he said. Asked where he saw room for closer ties, he said: "Trade and economics."


Ahmadinejad's visit to Egypt follows Mursi's visit to Iran in August for a summit of the Non-Aligned Movement.


Sheikh Ahmed al-Tayeb, head of the 1,000-year-old al-Azhar mosque and university, will meet Ahmadinejad at his offices in mediaeval Islamic Cairo, al-Azhar's media office said.


Salehi, the Iranian foreign Minister, stressed the importance of Muslim unity when he met Sheikh al-Tayeb at al-Azhar last month.


Egypt and Iran have taken opposite courses since the late 1970s. Egypt, under Mubarak's predecessor Anwar Sadat, concluded a peace treaty with Israel in 1979 and became a close ally of the United States and Europe. Iran from 1979 turned into a center of opposition to Western influence in the Middle East.


Symbolically, Iran named a street in Tehran after the Islamist who led the 1981 assassination of Sadat.


Egypt gave asylum and a state funeral to Iran's exiled Shah Reza Pahlavi, who was overthrown by the 1979 Iranian revolution. He is buried in a medieval Cairo mosque alongside his ex-brother-in-law, Egypt's last king, Farouk.


(Additional reporting by Ayman Samir and Alexander Diadosz; Editing by Andrew Roche and Paul Taylor)



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Mali Tuaregs seize two Islamist leaders fleeing French strikes


KIDAL, Mali (Reuters) - Tuareg rebels in northern Mali said on Monday they had captured two senior Islamist insurgents fleeing French air strikes toward the Algerian border, and France pressed ahead with its bombing campaign against al Qaeda's Saharan desert camps.


Pro-autonomy Tuareg MNLA rebels said they had seized Mohamed Moussa Ag Mohamed, an Islamist leader who imposed harsh sharia law in the desert town of Timbuktu, and Oumeini Ould Baba Akhmed, believed to be responsible for the kidnapping of a French hostage by the al Qaeda splinter group MUJWA.


"We chased an Islamist convoy close to the frontier and arrested the two men the day before yesterday," Ibrahim Ag Assaleh, spokesman for the MNLA, told Reuters from Ouagadougou in Burkina Faso. "They have been questioned and sent to Kidal."


France has deployed 3,500 ground troops, and warplanes and armored vehicles in its three-week-old Operation Serval (Wildcat) in Mali which has broken the Islamists' 10-month grip on northern towns, where they imposed sharia law.


Paris and its international partners want to prevent the Islamists from using Mali's vast desert north as a base to launch attacks on neighboring African countries and the West.


The MNLA, which seized control of northern Mali last year only to be pushed aside by better-armed Islamist groups, regained control of its northern stronghold of Kidal last week when Islamist fighters fled French airstrikes into the nearby desert and rugged Adrar des Ifoghas mountains.


The Tuareg group says it is willing to help the French-led mission by hunting down Islamists. It has offered to hold peace talks with the government in a bid to heal wounds between Mali's restive Saharan north and the black African-dominated south.


"Until there is a peace deal, we cannot hold national elections," Ag Assaleh said, referring to interim Malian President Dioncounda Traore's plan to hold polls on July 31.


Many in the southern capital Bamako - including army leaders who blame the MNLA for executing some of their troops at the Saharan town of Aguelhoc last year - strongly reject any talks.


French special forces took the airport in Kidal on Tuesday, reaching the most northern city previously held by the Islamist alliance. Though the MNLA says it controls Kidal, a Reuters reporter in the town saw a contingent of Chadian troops - part of a U.N.-backed African mission being deployed to help retake northern Mali - backing up French special forces there.


TARGETING REBEL BASES, DEPOTS


French Foreign Minister Laurent Fabius said warplanes were continuing bombing raids on Islamists in Mali's far north to destroy their supply lines and flush them out of remote areas.


"The objective is to destroy their support bases, their depots because they have taken refuge in the north and north-east of the country and can only stay there in the long-term if they have the means to sustain themselves," Fabius said.


"The army is working to stop that," he told French radio.


Jets attacked rebel camps on Sunday targeting logistics bases and training camps used by the al Qaeda-linked rebels near Tessalit, close to the Algerian border.


French President Francois Hollande made a one-day trip to Mali on Saturday, promising to keep troops in the country until the job of restoring government control in the Sahel state was finished. He was welcomed as a savior by cheering Malians.


The rebels' retreat to hideouts in the remote Adrar des Ifoghas mountains - where Paris believes they are holding seven French hostages - heralds a potentially more complicated new phase of France's intervention in its former colony.


"We are still in the same war, but we're entering a new battle," said Vincent Desportes, a French former general and now associate professor at Science-Po university in Paris.


"We will look to gradually wear out and destroy the terrorists that are sheltering in the Ifoghas. It's now a war of intelligence (services), strikes and probably action by special forces in the background."


Hollande said on Saturday that Paris would withdraw its troops from Mali once the landlocked West African nation had restored sovereignty over its territory and a U.N.-backed African military force could take over from the French soldiers.


Drawn mostly from Mali's West African neighbours, this force is expected to number more than 8,000. But its deployment has been badly hampered by shortages of kit and airlift capacity and questions about who will fund the estimated $1 billion cost.


Fabius said French soldiers may soon pull back from Timbuktu. Its residents had celebrated their liberation from the Islamists, who had handed down punishments including whipping and amputation for breaking sharia law.


The rebels also smashed sacred Sufi mausoleums and destroyed or stole some 2,000 ancient manuscripts at the South African-sponsored Baba Ahmed Institute, causing international outcry.


"A withdrawal could happen very quickly," Fabius said. "We're working towards it because we have no desire to stay there for the long-term.


(Additional reporting by John Irish in Paris, Daniel Flynn in Dakar and David Lewis in Timbuktu; Writing by Daniel Flynn; Editing by Pascal Fletcher and Jon Boyle)



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Attackers kill 33 at police HQ in disputed Iraqi city


KIRKUK, Iraq (Reuters) - At least 33 people were killed in the Iraqi city of Kirkuk on Sunday when a suicide bomber detonated a truck packed with explosives outside a police headquarters and gunmen disguised as officers tried to storm the compound.


The blast was the third major attack in weeks in or near the multiethnic city of Arabs, Kurds and Turkmen, at the heart of a dispute between Iraq's central government and the autonomous Kurdistan region.


Police said the bomber triggered the huge blast near a side entrance to the police building, demolishing part of a government office nearby.


"A suicide bomber driving a vehicle packed with explosives hit the entrance of the headquarters and after the blast gunmen in explosive vests attacked with AK47s and grenades, but the guards killed them," a police official said.


Guards and emergency workers dragged bloodied survivors onto stretchers amid the wreckage of the blast, which left a large crater in the street.


Police said 33 were killed, including 12 employees at the government office. But a health official said only 16 bodies were at a hospital morgue and more than 90 were wounded.


The attack comes as insurgents linked to al Qaeda try to inflame sectarian conflict in Iraq, where a power-sharing government split among Shi'ite majority, Sunni and ethnic Kurds has been in crisis since the last U.S. troops left a year ago.


"TWO-FRONT" CRISIS


Shi'ite Prime Minister Nuri al-Maliki is facing mass protests from Sunni Muslims in western provinces calling for him to step down, complaining of marginalization since the fall of Saddam Hussein.


In the north, the premier is also caught in a tense standoff with the country's autonomous Kurdish enclave over control of oil wealth and land along the so-called "disputed territories" where both regions claim control.


Kirkuk, 170 km (100 miles) north of the capital, is at the heart of the dispute. Last year Baghdad and the Kurdistan regional government sent rival forces to towns close to the disputed territories.


Several armed groups are active in Kirkuk, and Sunni Islamist insurgents linked to al Qaeda often attack security forces in an attempt to undermine Maliki's government and stoke sectarian tensions.


Al Qaeda's local wing, Islamic State of Iraq, though weakened after years of war with American troops, has benefited from the inflow of Sunni Islamists and arms into Syria where Sunni rebels are fighting President Bashar al-Assad.


Suicide bomb attacks are the hallmark of the Iraqi al Qaeda wing, and the group claimed responsibility for a suicide bombing that killed a Sunni lawmaker last month in Falluja.


But Kirkuk has also been home to the Naqshbandi army or JRTN, one of several insurgent groups made up of former soldiers and members of Saddam's outlawed Baath party.


Iraqi Arabs, Kurdistan's government and Kirkuk's minority Turkmen all lay claim to the city, known to some as the "Jerusalem of the Kurds" - a reference to its historically disputed status.


Last month a suicide bomber disguised as a mourner killed at least 26 at a funeral at a Shi'ite mosque in the nearby city of Tuz Khurmato, and days earlier a suicide bomber driving a truck killed 25 in an attack on a political party office in Kirkuk.


The level of violence in Iraq is lower than at the height of sectarian slaughter in 2006-2007, when tens of thousands died. But more than 4,400 people were killed last year in attacks and bombings, the first increase in deaths in three years.


(Additional reporting by Omar Mohammed in Kirkuk and Ahmed Rasheed in Baghdad; Writing by Patrick Markey; Editing by Andrew Roche)



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Spain's Rajoy says corruption allegations are false


MADRID (Reuters) - Spanish Prime Minister Mariano Rajoy strongly denied on Saturday allegations in the media that he and other leaders of his centre-right People's Party had for years received payments out of a secret slush fund.


"I need only two words: it's false," Rajoy said in a televised address after an extraordinary meeting of party leaders to discuss the allegations.


Rajoy welcomed a full investigation into the affair and said that the party would be fully transparent and that he would publish on the internet all of his tax declarations to clear up the scandal.


Last week El Pais newspaper published extracts from what it said were ledgers maintained by party treasurers to register cash contributions from business leaders that were then distributed to party leaders.


"It is not true that we (in this party) received cash that we hid from tax officials," Rajoy said in the brief speech. He did not take questions from the media.


Dozens of police in riot gear guarded PP headquarters in central Madrid on Saturday, cutting off neighboring streets. A small gathering of demonstrators shouted "resign" outside the building after several hundred people protested there on Thursday and Friday nights.


The growing scandal over alleged cash payments to People's Party leaders from a slush fund fed by construction industry executives has damaged Rajoy's credibility during a profound economic crisis in Spain.


Both right-leaning El Mundo newspaper and left-leaning El Pais have reported details of the scandal, citing sources within the PP and copies of the alleged secret accounts kept by party treasurers.


Rajoy, 57, has asked Spaniards for sacrifices as he slashes spending to trim a dangerously high public deficit that last year threatened to bankrupt the state and force him to seek a humiliating international bailout.


His popularity has plummeted during his 13 months in office as his austerity measures aggravate a deep recession and 26 percent unemployment.


The PP has an absolute majority in Parliament and so far the party has not shown signs of a split that would allow opponents to carry a vote of no confidence.


The PP has already said it will commission an external audit of its accounts.


The anti-corruption prosecutor's office said on Friday it is investigating the alleged payments. If the prosecutor finds evidence of a crime he will make a report to Spain's High Court, which will then decide whether it opens a judicial investigation, the first step to a possible criminal trial.


(Additional reporting by Iciar Reinlein and Rodrigo de Miguel; Writing by Fiona Ortiz)



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Suicide bomber kills guard at U.S. embassy in Turkey


ANKARA (Reuters) - A suicide bomber killed a Turkish security guard at the U.S. embassy in Ankara on Friday, blowing the door off a side entrance and sending smoke and debris flying into the street.


Ankara Governor Alaaddin Yuksel said the attacker was inside U.S. property when the explosives were detonated. The blast sent masonry spewing out of the wall of the side entrance, but there did not appear to be any more significant structural damage.


The bomber was also killed.


U.S. Ambassador Francis Ricciardone emerged through the main gate of the building, which is surrounded by high walls, shortly after the explosion to address reporters, flanked by a security detail as a Turkish police helicopter hovered overhead.


"We are very sad of course that we lost one of our Turkish guards at the gate," Ricciardone he said, thanking the Turkish authorities for a prompt response.


A Reuters witness saw one wounded person being lifted into an ambulance as police armed with assault rifles cordoned off the area.


"It was a huge explosion. I was sitting in my shop when it happened. I saw what looked like a body part on the ground," said travel agent Kamiyar Barnos whose shop window was shattered around 100 meters away from the blast.


One witness said the blast was audible a mile away.


There was no immediate claim of responsibility. The British Consulate-General to Turkey said the blast a "suspected terrorist attack".


Islamist radicals, far-left groups, far-right groups and Kurdish separatist militants have all carried out attacks in Turkey in the past.


The main domestic security threat comes from the separatist Kurdistan Workers Party (PKK), deemed a terrorist group by the United States, European Union and Turkey, but the PKK has focused its campaign largely on domestic targets.


Turkey has led calls for international intervention in neighboring Syria and is hosting hundreds of NATO soldiers from the United States, Germany and the Netherlands who are operating a Patriot missile defense system along its border with Syria, hundreds of kilometers away from the capital.


The U.S. Patriots were expected to go active in the coming days.


The most serious attacks of this kind in Turkey occurred in November 2003, when car bombs shattered two synagogues, killing 30 people and wounding 146. Authorities said the attack bore the hallmarks of al Qaeda.


Part of the HSBC Bank headquarters was destroyed and the British consulate was damaged in two more explosions that killed a further 32 people a week later.


(Writing by Nick Tattersall and Daren Butler; Editing by Jon Hemming)



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Syrian rebels make slow headway in south


AMMAN (Reuters) - The revolt against President Bashar al-Assad first flared in Deraa, but the southern border city now epitomizes the bloody stalemate gripping Syria after 22 months of violence and 60,000 dead.


Jordan next door has little sympathy with Assad, but is wary of spillover from the upheaval in its bigger neighbor. It has tightened control of its 370-km (230-mile) border with Syria, partly to stop Islamist fighters or weapons from crossing.


That makes things tough for Assad's enemies in the Hawran plain, traditionally one of Syria's most heavily militarized regions, where the army has long been deployed to defend the southern approaches to Damascus from any Israeli threat.


The mostly Sunni Muslim rebels, loosely grouped in tribal and local "brigades", are united by a hatred of Assad and range from secular-minded fighters to al Qaeda-aligned Islamists.


"Nothing comes from Jordan," complained Moaz al-Zubi, an officer in the rebel Free Syrian Army, contacted via Skype from the Jordanian capital Amman. "If every village had weapons, we would not be afraid, but the lack of them is sapping morale."


Insurgents in Syria say weapons occasionally do seep through from Jordan but that they rely more on arsenals they seize from Assad's troops and arms that reach them from distant Turkey.


This month a Syrian pro-government television channel showed footage of what it said was an intercepted shipment of anti-tank weapons in Deraa, without specifying where it had come from.


Assad's troops man dozens of checkpoints in Deraa, a Sunni city that was home to 180,000 people before the uprising there in March 2011. They have imposed a stranglehold which insurgents rarely penetrate, apart from sporadic suicide bombings by Islamist militants, say residents and dissidents.


Rebel activity is minimal west of Deraa, where military bases proliferate near the Israeli-occupied Golan Heights.


Insurgents have captured some towns and villages in a 25-km (17-mile) wedge of territory east of Deraa, but intensifying army shelling and air strikes have reduced many of these to ruin, forcing their residents to join a rapidly expanding refugee exodus to Jordan, which now hosts 320,000 Syrians.


However, despite more than a month of fighting, Assad's forces have failed to winkle rebels out of strongholds in the rugged volcanic terrain that stretches from Busra al-Harir, 37 km (23 miles) northeast of Deraa, to the outskirts of Damascus.


Further east lies Sweida, home to minority Druze who have mostly sat out the Sunni-led revolt against security forces dominated by Assad's minority, Shi'ite-rooted Alawite sect.


"KEY TO DAMASCUS"


As long as Assad's forces control southwestern Syria, with its fertile, rain-fed Hawran plain, his foes will find it hard to make a concerted assault on Damascus, the capital and seat of his power, from suburbs where they already have footholds.


"If this area is liberated, the supply routes from the south to Damascus would be cut," said Abu Hamza, a commander in the rebel Ababeel Hawran Brigade. "Deraa is the key to the capital."


Fighters in the north, where Turkey provides a rear base and at least some supply lines, have fared somewhat better than their counterparts in the south, grabbing control of swathes of territory and seizing half of Aleppo, Syria's biggest city.


They have also captured some towns in the east, across the border from Iraq's Sunni heartland of Anbar province, and in central Syria near the mostly Sunni cities of Homs and Hama.


But even where they gain ground, Assad's mostly Russian-supplied army and air force can still pound rebels from afar, prompting a Saudi prince to call for outsiders to "level the playing field" by providing anti-tank and anti-aircraft weapons.


"What is needed are sophisticated, high-level weapons that can bring down planes, can take out tanks at a distance," Prince Turki al-Faisal, a former intelligence chief and brother of the Saudi foreign minister, said last week at a meeting in Davos.


Saudi Arabia and its fellow Gulf state Qatar have long backed Assad's opponents and advocate arming them, but for now the rebels are still far outgunned by the Syrian military.


"They are not heavily armed, properly trained or equipped," said Ali Shukri, a retired Jordanian general, who argued also that rebels would need extensive training to use Western anti-tank or anti-aircraft weapons effectively even if they had them.


He said two powerful armored divisions were among Syrian forces in the south, where the rebels are "not that strong".


It is easier for insurgents elsewhere in Syria to get support via Turkey or Lebanon than in the south where the only borders are with Israel and Jordan, Shukri said.


Jordan, which has urged Assad to go, but seeks a political solution to the crisis, is unlikely to ramp up support for the rebels, even if its cautious policy risks irritating Saudi Arabia and Qatar, financial donors to the cash-strapped kingdom.


ISLAMIST STRENGTH


"I'm confident the opposition would like to be sourcing arms regularly from the Jordanian border, not least because I guess it would be easier for the Saudis to get stuff up there on the scale you'd be talking about," said a Western diplomat in Amman.


A scarcity of arms and ammunition is the main complaint of the armed opposition, a disparate array of local factions in which Islamist militants, especially the al Qaeda-endorsed Nusra Front, have come to play an increasing role in recent months.


The Nusra Front, better armed than many groups, emerged months after the anti-Assad revolt began in Deraa with peaceful protests that drew a violent response from the security forces.


It has flourished as the conflict has turned ever more bitterly sectarian, pitting majority Sunnis against Alawites.


Since October, the Front, deemed a terrorist group by the United States, has carried out at least three high-profile suicide bombings in Deraa, attacking the officers' club, the governor's residence and an army checkpoint in the city centre.


Such exploits have won prestige for the Islamist group, which has gained a reputation for military prowess, piety and respect for local communities, in contrast to some other rebel outfits tainted by looting and other unpopular behavior.


"So far no misdeeds have come from the Nusra Front to make us fear them," said Daya al-Deen al-Hawrani, a fighter from the rebel al-Omari Brigade. "Their goal and our goal is one."


Abu Ibrahim, a non-Islamist rebel commander operating near Deraa, said the Nusra Front fought better and behaved better than units active under the banner of the Free Syrian Army.


"Their influence has grown," he acknowledged, describing them as dedicated and disciplined. Nor were their fighters imposing their austere Islamic ideology on others, at least for now. "I sit with them and smoke and they don't mind," he said.


The Nusra Front may be trying to avoid the mistakes made by a kindred group, Al Qaeda in Iraq, which fought U.S. troops and the rise of Shi'ite factions empowered by the 2003 invasion.


The Iraqi group's suicide attacks on civilians, hostage beheadings and attempts to enforce a harsh version of Islamic law eventually alienated fellow Sunni tribesmen who switched sides and joined U.S. forces in combating the militants.


Despite the Nusra Front's growing prominence and its occasional spectacular suicide bombings in Deraa, there are few signs that its fighters or other rebels are on the verge of dislodging the Syrian military from its southern bastions.


Abu Hamza, the commander in the Ababeel Hawran Brigade, was among many rebels and opposition figures to lament the toughness of the task facing Assad's enemies in the south: "What is killing us is that all of Hawran is a military area," he said.


"And every village has five army compounds around it."


(Writing by Alistair Lyon; Editing by Alastair Macdonald)



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Mursi heads to Germany on trip cut back by Egypt crisis


CAIRO/BERLIN (Reuters) - Egyptian President Mohamed Mursi flew to Germany on Wednesday to try to convince Europe of his democratic credentials, leaving behind a country in crisis after a week of violence that has killed more than 50 people.


Two more protesters were shot dead before dawn near Cairo's central Tahrir Square on the seventh day of what has become the deadliest wave of unrest since Mursi took power in June.


The Egyptian army chief warned on Tuesday that the state was on the brink of collapse if Mursi's opponents and supporters did not end street battles that have marked the two-year anniversary of the revolt that toppled autocrat Hosni Mubarak.


Because of the crisis, Mursi has curtailed his European visit, cancelling plans to go to Paris after Berlin. He is due to return to Cairo later in the day.


Near Tahrir Square on Wednesday morning, dozens of protesters threw stones at police who fired back teargas, although the scuffles were brief.


"Our demand is simply that Mursi goes, and leaves the country alone. He is just like Mubarak and his crowd who are now in prison," said Ahmed Mustafa, 28, a youth who had goggles on his head to protect his eyes from teargas.


Opposition politician Mohamed ElBaradei called for a meeting between the president, government ministers, the ruling party and the opposition to halt the violence. But he also restated the opposition's precondition that Mursi first commit to seeking a national unity government, which the president has so far rejected.


Mursi's critics accuse him of betraying the spirit of the revolution by keeping too much power in his own hands and those of his Muslim Brotherhood, the Islamist movement banned under Mubarak which won repeated elections since the 2011 uprising.


Mursi's supporters say the protesters want to overthrow Egypt's first democratically elected leader. The unrest has prevented a return to stability ahead of parliamentary elections due within months, and worsened an economic crisis that has seen the pound currency tumble in recent weeks.


The worst violence has been in the Suez Canal city of Port Said, where rage was fuelled by death sentences passed against soccer fans for deadly riots last year. Mursi responded by announcing on Sunday a month-long state of emergency and curfew in Port Said and two other Suez Canal cities.


Protesters have ignored the curfew and returned to the streets. Human Rights Watch called for Mursi to lift the decree.


Mursi will be keen to allay the West's fears over the future of the most populous Arab country when he meets German Chancellor Angela Merkel and powerful industry groups in Berlin.


"DISTURBING IMAGES"


"We have seen worrying images in recent days, images of violence and destruction, and I appeal to both sides to engage in dialogue," German Foreign Minister Guido Westerwelle said in a radio interview on Wednesday ahead of Mursi's arrival.


Germany's "offer to help with Egypt's transformation clearly depends on it sticking to democratic reforms", he added.


Germany has praised Mursi's efforts in mediating a ceasefire between Israel and Palestinians in Gaza after a conflict last year, but became concerned at Mursi's efforts to expand his powers and fast-track a constitution last year.


Berlin was also alarmed by video that emerged in recent weeks showing Mursi making vitriolic remarks against Jews and Zionists in 2010 when he was a senior Brotherhood official. Germany's Nazi past and strong support of Israel make it highly sensitive to anti-Semitism.


Mursi's past anti-Jewish remarks were "unacceptable", Westerwelle said. "But at the same time President Mursi has played a very constructive role mediating in the Gaza conflict."


Egypt's main liberal and secularist bloc, the National Salvation Front, has so far refused talks with Mursi unless he promises a unity government including opposition figures.


"Stopping the violence is the priority, and starting a serious dialogue requires committing to guarantees demanded by the National Salvation Front, at the forefront of which are a national salvation government and a committee to amend the constitution," ElBaradei said on Twitter.


Those calls have also been backed by the hardline Islamist Nour party - rivals of Mursi's Brotherhood. Nour and the Front were due to meet on Wednesday, signaling an unlikely alliance of Mursi's critics from opposite ends of the political spectrum.


Brotherhood leader Mohamed El-Beltagy dismissed the unity government proposal as a ploy for the Front to take power despite having lost elections. On his Facebook page he ridiculed "the leaders of the Salvation Front, who seem to know more about the people's interests than the people themselves".


German industry leaders see potential in Egypt but are concerned about political instability: "At the moment many firms are waiting on political developments and are cautious on any big investments," said Hans Heinrich Driftmann, head of Germany's Chamber of Industry and Commerce.


Mursi's supporters blame the opposition for preventing an economic recovery by halting efforts to restore stability. The opposition says an inclusive government is needed to bring calm.


"The economy depends on political stability and political stability depends on national consensus. But the Muslim Brotherhood does not talk about consensus, and so it will not lead to any improvement in the political situation, and that will lead the economy to collapse," said teacher Kamal Ghanim, 38, a protester in Tahrir Square.


(Additional reporting by Yasmine Saleh and Marwa Awad in Cairo, Stephen Brown and Gernot Heller in Berlin and Arshad Mohammed in Washington; Writing by Peter Graff; Editing by Giles Elgood and Paul Taylor)



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Army says political tussle taking Egypt to brink


CAIRO, Egypt (Reuters) - Egypt's army chief said political strife was pushing the state to the brink of collapse - a stark warning from the institution that ran the country until last year as Cairo's first freely elected leader struggles to contain bloody street violence.


General Abdel Fattah al-Sisi, appointed by President Mohamed Mursi last year to head the military, added in a statement on Tuesday that one of the primary goals of deploying troops in cities on the Suez Canal was to protect the waterway that is vital for Egypt's economy and world trade.


Sisi's comments, published on an official army Facebook page, followed 52 deaths in the past week of disorder and highlighted the mounting sense of crisis facing Egypt and its Islamist head of state who is struggling to fix a teetering economy and needs to prepare Egypt for a parliamentary election in a few months that is meant to cement the new democracy.


Violence largely subsided on Tuesday, although some youths again hurled rocks at police lines in Cairo near Tahrir Square.


It seemed unlikely that Sisi was signaling the army wants to take back the power it held for six decades since the end of the colonial era and through an interim period after the overthrow of former air force chief Hosni Mubarak two years ago.


But his message sent a powerful message that Egypt's biggest institution, with a huge economic as well as security role and a recipient of massive direct U.S. subsidies, is worried about the fate of the nation, after five days of turmoil in major cities.


"The continuation of the struggle of the different political forces ... over the management of state affairs could lead to the collapse of the state," said General Abdel Fattah al-Sisi, who is also defense minister in the government Mursi appointed.


He said the economic, political and social challenges facing the country represented "a real threat to the security of Egypt and the cohesiveness of the Egyptian state" and the army would remain "the solid and cohesive block" on which the state rests.


Sisi was picked by Mursi after the army handed over power to the new president in June once Mursi had sacked Field Marshal Hussein Tantawi, in charge of Egypt during the transition and who had also been Mubarak's defense minister for 20 years.


RALLY AT FUNERALS


After almost seven months since Mursi took office, Egypt politics have become even more deeply polarized.


Opponents spurned a call by Mursi for talks on Monday to try to end the violence. Instead, protesters have rallied in Cairo and Alexandria, and in the three Suez Canal cities - Port Said, Ismailia and Suez - where Mursi imposed emergency rule.


On Tuesday, thousands were again on the streets of Port Said to mourn the deaths of two people in the latest clashes there, taking the total toll in Mediterranean port alone to 42 people. Most were killed by gunshots in a city where weapons are rife.


Mohamed Ezz, a Port Said resident speaking by telephone, heard heavy gunfire through the night. "Gunshots damaged the balcony of my flat, so I went to stay with my brother," he said.


Residents in the three canal cities had taken to the streets in protest at a nightly curfew now in place there.


In Cairo on Tuesday afternoon, police again fired teargas as stone-throwing youths in a street near Tahrir Square, the centre of the 2011 uprising. But the clashes were less intense than previous days and traffic was able to cross the area. Street cleaners swept up the remains of burnt tires and other debris.


Street flare-ups are a common occurrence in divided Egypt, frustrating many people desperate for order and economic growth.


Although the general's comments were notably blunt, Egypt's military has voiced similar concerns in the past, pledging to protect the nation. But it has refused to be drawn back into a direct political role after its reputation as a neutral party took a pounding during the 17 months after Mubarak fell.


"Egyptians are really alarmed by what is going on," said Cairo-based analyst Elijah Zarwan, adding that the army was reflecting that broader concern among the wider public.


"But I don't think it should be taken as a sign that the military is on the verge of stepping in and taking back the reins of government," he added.


In December, Sisi offered to host a national dialogue when Mursi and the rivals were again at loggerheads and the streets were aflame. But the invitation was swiftly withdrawn before the meeting went ahead, apparently because the army was wary of becoming embroiled again in Egypt's polarized politics.


LEGITIMACY CHALLENGED


Protests initially flared during the second anniversary of the uprising that erupted on January 25, 2011 and toppled Mubarak 18 days later. They have been exacerbated by riots in Port Said where residents were angered when a court sentenced to death several people from the city over deadly soccer violence.


Since the 2011 revolt, Islamists who Mubarak spent his 30-year rule suppressing have won two referendums, two parliamentary elections and a presidential vote.


But that legitimacy has been challenged by an opposition that accuses Mursi of imposing a new form of authoritarianism. Mursi's supporters says protesters want to overthrow Egypt's first ever democratically elected leader by undemocratic means.


The army has already been deployed in Port Said and Suez and the government agreed a measure to let soldiers arrest civilians as part of the state of emergency. Sisi reiterated that the army's role would be support the police in restoring order.


The instability has provoked unease in Western capitals, where officials worry about the direction of a powerful regional player that has a peace deal with Israel. The United States condemned the bloodshed and called on Egyptian leaders to make clear violence was not acceptable.


Mursi's invitation to rivals to a national dialogue with Islamists on Monday was spurned by the main opposition National Salvation Front coalition, which described it as "cosmetic".


The only liberal politician who attended, Ayman Nour, told Egypt's al-Hayat channel after the meeting ended late on Monday that attendees agreed to meet again in a week.


He said Mursi had promised to look at changes to the constitution requested by the opposition but did not consider the opposition's request for a government of national unity. Mursi's pushing through last month of a new constitution which critics see as too Islamic remains a bone of contention.


When Mursi announced he was imposing a state of emergency on the Suez Canal cities he pledged to confront threats to security "with force and firmness." But Some activists said Mursi's measures to try to impose control could backfire.


"Martial law, state of emergency and army arrests of civilians are not a solution to the crisis," said Ahmed Maher of the April 6 movement that helped galvanize the 2011 uprising. "All this will do is further provoke the youth. The solution has to be a political one that addresses the roots of the problem."


(Additional reporting by Yasmine Saleh and Omar Filmy in Cairo, Yusri Mohamed in Ismailia and Abdelrahman Youssef in Alexandria; Writing by Edmund Blair; Editing by Alastair Macdonald)



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Violent protests greet Egypt emergency decree


CAIRO (Reuters) - A man was shot dead on Monday in a fifth day of violence in Egypt that has killed 50 people and prompted the Islamist president to declare a state of emergency in an attempt to end a wave of unrest sweeping the Arab world's biggest nation.


Under emergency powers announced by President Mohamed Mursi for the cities of Port Said, Ismailia and Suez on Sunday, the army will have the right to arrest civilians and to help police restore order.


A cabinet source told Reuters any trials would be before civilian courts, but the step is likely to anger protesters who accuse Mursi of using high-handed security tactics of the kind they fought against to oust president Hosni Mubarak.


Egypt's politics have become deeply polarized since those heady days two years ago, when protesters were making most of the running in the Arab Spring revolutions that sent shockwaves through the region.


Although Islamists have won parliamentary and presidential elections, the disparate opposition has since united against Mursi. Late last year he moved to expand his powers and push a constitution with Islamist leanings through a referendum punctuated by violent street protests.


Mursi's opponents accuse him of hijacking the revolution, listening only to his Islamist allies and breaking a promise to be a president for all Egyptians. They say too many hold-outs from the Mubarak era remain in their posts.


Islamists say their rivals want to overthrow by undemocratic means Egypt's first freely elected leader.


Some opposition groups have called for more protests in Cairo and elsewhere on Monday to mark the second anniversary of one of the bloodiest days in the revolution that erupted on January 25, 2011, and ended Mubarak's iron rule 18 days later.


Hundreds of demonstrators in Port Said, Ismailia and Suez, cities which all lie on the economically vital Suez Canal, turned out against Mursi's decision on Sunday within moments of him speaking. Activists there pledged to defy a curfew that starts at 9 p.m. (1700 GMT).


Instability in Egypt has raised concerns in Western capitals, where officials worry about the direction of a key regional player that has signed a peace deal with Israel.


The political unrest has been exacerbated by street violence linked to death penalties imposed on soccer supporters convicted of involvement in stadium rioting a year ago.


In Cairo on Monday, police fired volleys of teargas at stone-throwing protesters in and around Tahrir Square, cauldron of the anti-Mubarak uprising.


KILLED BY A GUNSHOT


A 46-year-old bystander was killed by a gunshot, a security source at the Interior Ministry said. It was not clear who fired the shot.


"We want to bring down the regime and end the state that is run by the Muslim Brotherhood," said Ibrahim Eissa, a 26-year-old cook, protecting his face from teargas wafting towards him.


Mursi also called for a national dialogue with his rivals for later on Monday, but the early response from members of the main opposition coalition suggested they saw little point.


Propelled to the presidency in a June election by the Muslim Brotherhood, Mursi has lurched through a series of political crises and violent demonstrations, complicating his task of shoring up the economy and preparing for a parliamentary election to cement the new democracy in a few months.


"The protection of the nation is the responsibility of everyone. We will confront any threat to its security with force and firmness within the remit of the law," Mursi said, offering condolences to families of victims in the canal zone cities.


Appealing to his opponents, the president called for a dialogue on Monday at 6 p.m. (1600 GMT), inviting a range of Islamist allies as well as liberal, leftist and other opposition groups and individuals to discuss the crisis.


The main opposition National Salvation Front coalition said it would not attend.


Mursi's call to hold talks was "cosmetic and not substantive", a leading member of the coalition, Mohamed ElBaradei, told a news conference.


SECURITY MEASURES


The opposition Front has distanced itself from the latest flare-ups but said Mursi should have acted far sooner to impose security measures that would have ended the violence.


"Of course we feel the president is missing the real problem on the ground, which is his own policies," Front spokesman Khaled Dawoud said. "His call to implement emergency law was an expected move, given what is going on, namely thuggery and criminal activity."


But other activists said Mursi's measures to try to impose control on the turbulent streets could backfire.


"Martial law, state of emergency and army arrests of civilians are not a solution to the crisis," Ahmed Maher of the April 6 movement that helped galvanize the 2011 uprising said. "All this will do is further provoke the youth. The solution has to be a political one that addresses the roots of the problem."


Thousands of mourners joined funerals in Port Said for the latest victims in the Mediterranean port city. Seven people were killed there on Sunday when residents joined marches to bury 33 others who had been killed a day earlier, most by gunshot wounds in a city where arms are rife.


Protests erupted there on Saturday after a court sentenced to death several people from the city for their role in deadly soccer violence last year, a verdict residents saw as unfair. The anger swiftly turned against Mursi and his government.


Rights activists said Mursi's declaration was a backward step for Egypt, which was under emergency law for Mubarak's entire 30-year rule. His police used the sweeping arrest provisions to muzzle dissent and round up opponents, including members of the Brotherhood and even Mursi himself.


Heba Morayef of Human Rights Watch in Cairo said the police, still hated by many Egyptians for their heavy-handed tactics under Mubarak, would once again have the right to arrest people "purely because they look suspicious", undermining efforts to create a more efficient and respected police force.


"It is a classic knee-jerk reaction to think the emergency law will help bring security," she said. "It gives so much discretion to the Ministry of Interior that it ends up causing more abuse, which in turn causes more anger."


(Additional reporting by Yasmine Saleh in Cairo and Yusri Mohamed in Ismailia; Editing by Will Waterman and Giles Elgood)



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Fire at nightclub kills more than 200 in Brazil


PORTO ALEGRE, Brazil (Reuters) - At least 200 people were killed in a nightclub fire in southern Brazil on Sunday after a band's pyrotechnics show set the building ablaze, and fleeing patrons were unable to find the emergency exits, local officials said.


Bodies were still being removed from the Kiss nightclub in the southern city of Santa Maria, Major Gerson da Rosa Ferreira, who was leading rescue efforts at the scene for the military police, told Reuters.


Local officials said 180 people were confirmed dead, and Ferreira said the death toll would rise above 200. He said the victims died of asphyxiation or from being trampled, and that there were possibly as many as 500 people inside the club when the fire broke out at about 2:30 a.m.


Television footage showed people sobbing outside the club, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.


"It was really fast. There was a lot of smoke, really dark smoke," survivor Aline Santos Silva, 29, told Globonews TV. "We were only able to get out quickly because we were in a VIP area close to the door."


President Dilma Rousseff cut short a visit to Chile and was returning to Brazil following the blaze, her spokesperson said.


Luiza Sousa, a civil police official in Santa Maria, told Reuters the blaze started when a member of the band or its production team ignited a flare, which then set fire to the ceiling. The fire spread "in seconds," Sousa said.


The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.


Brazil's safety standards and emergency response capabilities are under particular scrutiny as the country prepares to host the 2014 World Cup soccer tournament and the 2016 Summer Olympics.


Rio Grande do Sul state Health Secretary Ciro Simoni said emergency medical supplies from all over the state were being sent to the scene.


Santa Maria is some 186 miles west of the state capital of Porto Alegre. "A sad Sunday!" tweeted Rio Grande do Sul Governor Tarso Genro. He said "all possible measures" were being taken in response and that he was on his way to the scene.


(Additional reporting by Guillermo Parra-Bernal, Todd Benson and Brian Winter; Editing by Eric Beech)



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At least 22 die in Egyptian clashes over death sentences


PORT SAID, Egypt/CAIRO (Reuters) - At least 22 people died on Saturday when Egyptians rampaged in protest at the sentencing of 21 people to death over a soccer stadium disaster, adding to bloody street turmoil confronting Islamist President Mohamed Mursi.


Armored vehicles and military police fanned through the streets of Port Said after the violence. The state news agency quoted a general as saying the military aimed to "establish calm and stability in Port Said and to protect public institutions".


The unrest began with nationwide rallies on Friday to mark the second anniversary of the overthrow of autocrat Hosni Mubarak, a democratic uprising that protesters now accuse Mursi of betraying by ramming through an Islamist-hued constitution.


While anniversary-related violence subsided, a new flare-up hit Port Said after a court sentenced 21 men to die for involvement in the deaths of 74 people after a local soccer match on February 1, 2012, many of them fans of the visiting team.


Residents ran wildly through the streets of Port Said in rage that men from their city had been blamed for the stadium disaster, and gunshots were reported near the prison where most of the defendants were being held.


State television, citing the Health Ministry, said 22 people were killed and more than 200 wounded. Security sources said at least two of the dead were policemen.


A witness said some men stormed a police station in Port Said, where protesters lit tires in the street, sending black smoke funneling into the air.


At least nine people were killed in clashes with police on Friday, mainly in the port of Suez where the army has also deployed. Hundreds were injured as police rained down tear gas on protesters armed with stones and some with petrol bombs.


The schism between Islamists and secular Egyptians is hurting efforts by Mursi, freely elected in June, to revive an economy in crisis and reverse a slide in Egypt's currency.


The political strife and lack of security that has blighted the Arab world's most populous country over much of the post-Mubarak era is casting a chilling shadow over a parliamentary election expected to start in April.


Highlighting tensions, the opposition National Salvation Front coalition called for a government of national unity and an early presidential vote among other demands. It said it would call for more protests next Friday and could boycott the parliamentary election if its demands are not met.


Mursi's opponents say he has failed to deliver on economic pledges or be a president representing the full political and communal diversity of Egyptians, as he pledged.


His supporters say his critics do not respect the democracy that has given Egypt its first freely elected leader.


VICTIMS' RELATIVES CHEER


At the Port Said soccer stadium a year ago, many spectators were crushed and witnesses saw some thrown off balconies after the match between Cairo's Al Ahly and local team al-Masri.


Families of victims in court cheered and wept for joy when Judge Sobhy Abdel Maguid read a list of 21 names "referred to the Mufti", a phrase used to denote execution, as all death sentences must be reviewed by Egypt's top religious authority.


A total of 73 people have been standing trial. Other rulings will be issued on March 9, the judge said.


One relative in the court shouted: "God is greatest." Outside the Al Ahly club in Cairo, fans also cheered. They had threatened more violence unless the death penalty was meted out.


Thousands took to the streets of Cairo, Alexandria and other cities on Friday to protest against what they call the authoritarianism of Mursi's rule. Protesters in Cairo were again hurling stones at police lines in Cairo on Saturday.


"We want to change the president and the government. We are tired of this regime. Nothing has changed," said Mahmoud Suleiman, 22, in Cairo's Tahrir Square, the cauldron of the 2011 anti-Mubarak revolt and near where youths stoned police.


"PURSUING CRIMINALS"


Ahmed Salama, 28, a protester camped out with dozens of others in Tahrir, said: "The protests will continue until we realize all the demands of the revolution - bread, freedom and social justice."


In a statement in response to Friday's violence, Mursi said the state would not hesitate in "pursuing the criminals and delivering them to justice". He urged Egyptians to respect the principles of the revolution by expressing views peacefully.


The president met on Saturday with the National Defence Council, which includes senior ministers and security officials, to discuss the spate of violence.


In a televised statement, the National Salvation Front said it was holding Mursi responsible.


The Front was formed from disparate groups last year when Mursi awarded himself extra powers and fast-tracked an Islamist-flavored constitution to a referendum, opposed by the Front although the document was passed in the popular vote.


"Egypt will not regain its balance except by a political solution that is transparent and credible, by a government of national salvation to restore order and heal the economy and with a constitution for all Egyptians," prominent opposition politician Mohamed ElBaradei wrote on his Twitter account.


Until the Front was formed, the opposition had struggled to unite and their vote had been split at presidential and parliamentary polls, helping Islamists. The last parliament was dissolved based on court order, demanding a new vote this year.


Mustapha Kamal Al-Sayyid, a professor of political science at Cairo University, said the latest violence reflected the frustration of many liberal-minded Egyptians and others.


"The state of polarization between Islamists and others is most likely to continue and will have a very negative impact on the state's politics, security and economy," he said.


Inspired by the popular uprising in Tunisia, Egypt's revolution spurred further revolts across the Arab world. But the sense of common purpose among Egyptians two years ago has unraveled, triggering bloody street battles last month.


(Additional reporting by Omar Fahmy; Writing by Edmund Blair; Editing by Mark Heinrich)



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North Korea threatens war with South over U.N. sanctions


SEOUL (Reuters) - North Korea threatened to attack rival South Korea if Seoul joined a new round of tightened U.N. sanctions, as Washington unveiled more of its own economic restrictions following Pyongyang's rocket launch last month.


In a third straight day of fiery rhetoric, the North directed its verbal onslaught at its neighbor on Friday, saying: "'Sanctions' mean a war and a declaration of war against us."


The reclusive North has this week declared a boycott of all dialogue aimed at ending its nuclear program and vowed to conduct more rocket and nuclear tests after the U.N. Security Council censured it for a December long-range missile launch.


"If the puppet group of traitors takes a direct part in the U.N. 'sanctions,' the DPRK will take strong physical counter-measures against it," the North's Committee for the Peaceful Reunification of Korea said, referring to the South.


The committee is the North's front for dealings with the South. DPRK is short for the North's official name, the Democratic People's Republic of Korea.


The U.N. Security Council unanimously condemned North Korea's December rocket launch on Tuesday and expanded existing U.N. sanctions.


On Thursday, the United States slapped economic sanctions on two North Korean bank officials and a Hong Kong trading company that it accused of supporting Pyongyang's proliferation of weapons of mass destruction.


The company, Leader (Hong Kong) International Trading Ltd, was separately blacklisted by the United Nations on Wednesday.


Seoul has said it will look at whether there are any further sanctions that it can implement alongside the United States, but said the focus for now is to follow Security Council resolutions.


The resolution said the council "deplores the violations" by North Korea of its previous resolutions, which banned Pyongyang from conducting further ballistic missile and nuclear tests and from importing materials and technology for those programs. It does not impose new sanctions on Pyongyang.


The United States had wanted to punish North Korea for the rocket launch with a Security Council resolution that imposed entirely new sanctions against Pyongyang, but Beijing rejected that option. China agreed to U.N. sanctions against Pyongyang after North Korea's 2006 and 2009 nuclear tests.


NUCLEAR TEST WORRY


North Korea's rhetoric this week amounted to some of the angriest outbursts against the outside world coming under the leadership of Kim Jong-un, who took over after the death of his father Kim Jong-il in late 2011.


On Thursday, the North said it would carry out further rocket launches and a nuclear test, directing its ire at the United States, a country it called its "sworn enemy".


U.S. Defense Secretary Leon Panetta said the comments were worrying.


"We are very concerned with North Korea's continuing provocative behavior," he said at a Pentagon news conference.


"We are fully prepared ... to deal with any kind of provocation from the North Koreans. But I hope in the end that they determine that it is better to make a choice to become part of the international family."


North Korea is not believed to have the technology to deliver a nuclear warhead capable of hitting the continental United States, although its December launch showed it had the capacity to deliver a rocket that could travel 10,000 km (6,200 miles), potentially putting San Francisco in range, according to an intelligence assessment by South Korea.


South Korea and others who have been closely observing activities at the North's known nuclear test grounds believe Pyongyang is technically ready to go ahead with its third atomic test and awaiting the political decision of its leader.


The North's committee also declared on Friday that a landmark agreement it signed with the South in 1992 on eliminating nuclear weapons from the Korean peninsula was invalid, repeating its long-standing accusation that Seoul was colluding with Washington.


The foreign ministry of China, the North's sole remaining major diplomatic and economic benefactor, repeated its call for calm on the Korean peninsula at its daily briefing on Friday.


"The current situation on the Korea peninsula is complicated and sensitive," spokesman Hong Lei said.


"We hope all relevant parties can see the big picture, maintain calm and restraint, further maintain contact and dialogue, and improve relations, while not taking actions to further complicate and escalate the situation," Hong said.


But unusually prickly comments in Chinese state media on Friday hinted at Beijing's exasperation.


"It seems that North Korea does not appreciate China's efforts," said the Global Times in an editorial, a sister publication of the official People's Daily.


"Just let North Korea be 'angry' ... China hopes for a stable peninsula, but it's not the end of the world if there's trouble there. This should be the baseline of China's position."


(Additional reporting by Michael Martina in Beijing; editing by Jeremy Laurence and Raju Gopalakrishnan)



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