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Analysis: The next stop for Palestinians could be global courts

Written By Bersemangat on Jumat, 30 November 2012 | 18.56

(Reuters) - The U.N. General Assembly's overwhelming vote to recognize Palestine as a non-member state offers little prospect for greater clout in world politics but it could make a difference in the international courts.

The formal recognition of statehood, even without full U.N. membership, could be enough for the Palestinians to achieve membership at the Hague-based International Criminal Court (ICC), where member states have the power to refer for investigation alleged war crimes or crimes against humanity.

With its upgraded status at the U.N., the Palestinians may now seek to apply to the ICC for membership and authority to file war-crimes charges against the Israeli government and its officials.

That threat of so-called "lawfare" has already prevented some Israeli civilian and military leaders from traveling abroad out of fear they'd be arrested as war criminals.

"Israelis are afraid of being hauled to The Hague," said Robert Malley, the Middle East program director for the International Crisis Group.

The Palestinians have long planned to use non-membership statehood at the U.N., once obtained, as a way to enter the ICC. One Palestinian negotiator, in talking to the International Crisis Group, called the strategy a "legal or diplomatic intifada" against Israel.

When Palestinian Authority President Mahmoud Abbas addressed the United Nations in September he specifically accused Israel of committing war crimes.

Israeli officials have said the country's armed forces strictly adhere to international law and argue the true aim of Palestinians' accusations is to isolate Israel.

Last spring, the ICC's former chief prosecutor turned down a 2009 Palestinian request for prosecution of Israel's actions in the 2008-2009 Gaza war with Hamas, specifically noting that Palestine was only a U.N. observer entity.

In September, the new ICC prosecutor, Fatou Bensouda, said a General Assembly vote could make the difference.

"What we have also done is to leave the door open and to say that if this -- if Palestine is able to pass over that (statehood) hurdle, of course, under the General Assembly, then we will revisit what the ICC can do," Bensouda said during a talk in New York.

The Hague-based ICC is the one international venue where individuals can be criminally charged. All 117 countries that ratified the Rome Statute, which created the court, are bound to turn over suspects.

The United States and Israel have not joined the Rome Statute, but that would not prevent the Palestinians from pursing cases under the treaty. ICC arrest warrants and rulings carry geopolitical weight even when they can't be enforced. An indictment of Libya's Moammar Gadhafi last year helped mobilize international support for the rebels who opposed him.

Of course, if the Palestinians enter the legal battlefield, they, too, risk being accused and prosecuted in the venues where they'd try to target Israelis.

There is no guarantee for either side that the ICC prosecutor would follow through on charges. The ICC has procedural obstacles that could head off any prosecution there.

Some commentators argue that, like lawyers in any legal fight, both the Palestinians and Israelis have exaggerated the stakes in what's more of a political and public-relations drama.

"The concern that something dramatic would change is overblown," said Rosa Brooks, a professor of international law at Georgetown University who has also served in policy roles at the State and Defense departments.

And it's important to remember that the ICC is a political organization as much as a legal one -- cases are initiated by member governments and the U.N. Security Council -- so geopolitical considerations can trump a strictly legal case.

(Reporting by Joseph Schuman; Editing by Eileen Daspin and Lisa Shumaker)


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Palestinians win de facto U.N. recognition of sovereign state

UNITED NATIONS (Reuters) - The 193-nation U.N. General Assembly on Thursday overwhelmingly approved the de facto recognition of the sovereign state of Palestine after Palestinian President Mahmoud Abbas called on the world body to issue its long overdue "birth certificate."

The U.N. victory for the Palestinians was a diplomatic setback for the United States and Israel, which were joined by only a handful of countries in voting against the move to upgrade the Palestinian Authority's observer status at the United Nations to "non-member state" from "entity," like the Vatican.

Britain called on the United States to use its influence to help break the long impasse in Israeli-Palestinian peace talks. Washington also called for a revival of direct negotiations.

There were 138 votes in favor, nine against and 41 abstentions. Three countries did not take part in the vote, held on the 65th anniversary of the adoption of U.N. resolution 181 that partitioned Palestine into separate Jewish and Arab states.

Thousands of flag-waving Palestinians in the West Bank and the Gaza Strip set off fireworks and danced in the streets to celebrate the vote.

The assembly approved the upgrade despite threats by the United States and Israel to punish the Palestinians by withholding funds for the West Bank government. U.N. envoys said Israel might not retaliate harshly against the Palestinians over the vote as long as they do not seek to join the International Criminal Court.

If the Palestinians were to join the ICC, they could file complaints with the court accusing Israel of war crimes, crimes against humanity and other serious crimes.

U.S. Secretary of State Hillary Clinton called the vote "unfortunate and counterproductive," while the Vatican praised the move and called for an internationally guaranteed special status for Jerusalem, something bound to irritate Israel.

The much-anticipated vote came after Abbas denounced Israel from the U.N. podium for its "aggressive policies and the perpetration of war crimes," remarks that elicited a furious response from the Jewish state.

"Sixty-five years ago on this day, the United Nations General Assembly adopted resolution 181, which partitioned the land of historic Palestine into two states and became the birth certificate for Israel," Abbas told the assembly after receiving a standing ovation.

"The General Assembly is called upon today to issue a birth certificate of the reality of the State of Palestine," he said.

Israeli Prime Minister Benjamin Netanyahu responded quickly, condemning Abbas' critique of Israel as "hostile and poisonous," and full of "false propaganda.

"These are not the words of a man who wants peace," Netanyahu said in a statement released by his office. He reiterated Israeli calls for direct talks with the Palestinians, dismissing Thursday's resolution as "meaningless."

ICC THREAT

A number of Western delegations noted that Thursday's vote should not be interpreted as formal legal recognition of a Palestinian state. Formal recognition of statehood is something that is done bilaterally, not by the United Nations.

Granting Palestinians the title of "non-member observer state" falls short of full U.N. membership - something the Palestinians failed to achieve last year. But it does have important legal implications - it would allow them access to the ICC and other international bodies, should they choose to join.

Abbas did not mention the ICC in his speech. But Palestinian Foreign Minister Riyad al-Maliki told reporters after the vote that if Israel continued to build illegal settlements, the Palestinians might pursue the ICC route.

"As long as the Israelis are not committing atrocities, are not building settlements, are not violating international law, then we don't see any reason to go anywhere," he said.

"If the Israelis continue with such policy - aggression, settlements, assassinations, attacks, confiscations, building walls - violating international law, then we have no other remedy but really to knock those to other places," Maliki said.

In Washington, a group of four Republican and Democratic senators announced legislation that would close the Palestinian office in Washington unless the Palestinians enter "meaningful negotiations" with Israel, and eliminate all U.S. assistance to the Palestinian Authority if it turns to the ICC.

"I fear the Palestinian Authority will now be able to use the United Nations as a political club against Israel," said Republican Senator Lindsey Graham, one of the sponsors.

Abbas led the campaign to win support for the resolution, which followed an eight-day conflict this month between Israel and Islamists in the Gaza Strip, who are pledged to Israel's destruction and oppose a negotiated peace.

The vote highlighted how deeply divided Europe is on the Israeli-Palestinian conflict.

At least 17 European nations voted in favor of the Palestinian resolution, including Austria, France, Italy, Norway and Spain. Abbas had focused his lobbying efforts on Europe, which supplies much of the aid the Palestinian Authority relies on. Britain, Germany and many others chose to abstain.

The traditionally pro-Israel Czech Republic was unique in Europe, joining the United States, Israel, Canada, Panama and the tiny Pacific Island states Nauru, Palau, Marshall Islands and Micronesia in voting against the move.

'HOPE SOME REASON WILL PREVAIL'

Peace talks have been stalled for two years, mainly over Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world. There are 4.3 million Palestinians in the West Bank and Gaza.

After the vote, U.S. Ambassador to the United Nations Susan Rice called for the immediate resumption of peace talks.

"The Palestinian people will wake up tomorrow and find that little about their lives has changed save that the prospects of a durable peace have only receded," she said.

She added that both parties should "avoid any further provocative actions in the region, in New York or elsewhere."

Palestinian Prime Minister Salam Fayyad said he hoped all sides would use the vote to push for new breakthroughs in the peace process.

"I hope there will be no punitive measures," Fayyad told Reuters in Washington, where he was attending a conference.

"I hope that some reason will prevail and the opportunity will be taken to take advantage of what happened today in favor of getting a political process moving," he said.

Britain's U.N. ambassador, Mark Lyall Grant, told reporters it was time for recently re-elected U.S. President Barack Obama to make a new push for peace.

"We believe the window for the two-state solution is closing," he said. "That is why we are encouraging the United States and other key international actors to grasp this opportunity and use the next 12 months as a way to really break through this impasse."

(Additional reporting by Andrew Quinn in Washington, Noah Browning in Ramallah, Jeffrey Heller in Jerusalem, Robert Mueller in Prague, Gabriela Baczynska and Reuters bureaux in Europe and elsewhere; Editing by Eric Beech and Peter Cooney)


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Fighting cuts access to Damascus airport, flights suspended

BEIRUT (Reuters) - Syrian rebels battled forces loyal to President Bashar al-Assad just outside Damascus on Thursday, cutting access to its international airport, and Dubai-based Emirates airline and EgyptAir stopped flights to the Syrian capital.

The Internet and some telephone lines went down across Syria. Rebels and the government traded blame for the blackout, the worst communications outage in 20 months of conflict.

Rebels fighting to topple Assad have been making gains around Syria by overrunning military bases and have been ramping up attacks on Damascus, his seat of power.

A rebel fighter who identified himself as Abu Omar, a member of the Jund Allah brigade, told Reuters that insurgents fired mortars at the airport's runways and were blocking the road linking it with the capital.

Speaking from the scene of the fighting, he said insurgents were not inside the airport but were able to block access to and from it.

A spokesman for a rebel Military Council in Damascus, Musaab Abu Qitada, said an artillery round was fired at a military site inside the airport and that fighting was now less than a kilometer (mile) away from the complex.

"We want to liberate the airport because of reports we see and our own information we have that shows civilian airplanes are being flown in here with weapons for the regime. It is our right to stop this," he told Reuters on Skype from Damascus.

U.S. and European officials said rebels were making gains in Syria, gradually eroding Assad's power, but said the fighting had not yet shifted decisively in their favor.

Two Austrian soldiers in a U.N. peacekeeping force deployed to monitor the frontier with the Israeli-occupied Golan Heights were wounded when their convoy came under fire near Damascus airport, Austria's defense ministry said. Syria state television said the soldiers were wounded by gunfire when rebels attacked an army position near the airport road.

The Information Ministry later said the highway to the airport was safe after security forces cleared it of "terrorists." Rebels said fighting in the area was continuing. The ministry said the airport was operating regularly, but there were no flights scheduled to land in the evening.

The accounts of fighting could not be verified immediately because of tight restrictions on media access to Syria.

But many airlines had already halted flights. Emirates suspended daily service to Damascus "until further notice." EgyptAir also said it was suspending all flights to Damascus because of "the deterioration of the security situation" there.

An EgyptAir flight that left at 1:30 p.m. (1130 GMT) landed in Damascus on schedule but the pilot was instructed to take off straight back to Egypt, airport sources in Cairo said.

INTERNET, PHONE LINES DOWN

Residents said the Internet in Damascus crashed in the early afternoon, and mobile and land telephone lines were functioning only intermittently.

A blog post on Renesys, a U.S. company which tracks Internet traffic worldwide, said that at 12:26 pm (1026 GMT), the entire country's Internet connectivity shut down completely.

The government has been accused of cutting communications in previous assaults on rebel-held areas in Syria. Syria's minister of information said "terrorists" were responsible for the Internet shutdown, while the telecommunications minister blamed what he said was a fault in the main communications network.

The past two weeks have seen rebels seizing a series of army bases across Syria, exposing Assad's loss of control in northern and eastern regions despite the devastating air power that he has used to bombard opposition strongholds, killing dozens of civilians as well. More than 40,000 people have been killed since the uprising began, according to opposition groups.

Rebels and activists said the fighting along the road to Damascus airport, southeast of the capital, was heavier in that area than at any other time in the conflict.

"PREPARING FOR MAJOR BATTLE"

Nabeel al-Ameer, from the rebel Military Council, said a large number of army reinforcements had arrived along the road after three days of scattered clashes ending with rebels seizing side streets to the north of it.

He said he hoped the proximity of the rebels to the airport would dissuade authorities from using it to import military equipment, but the priority now was to block the road.

There are several military airports around Damascus that remain under government control.

A Syrian security source told Reuters on condition of anonymity that the army had started a "cleansing operation" in the capital to confront rebel advances.

The source, who is from Assad's elite 4th Armoured Division, said one of the aims of the operation was to seal off the suburbs - where rebels are dominant - from the city center.

Assad is fighting an insurgency that grew out of peaceful demonstrations for democratic reform but has escalated, after a military crackdown on protesters, into a bloody civil war.

Syrian warplanes on Thursday bombed Kafr Souseh, Douma and Daraya, neighborhoods that fringe the center of the city where rebels have managed to hide out and ambush army units.

Activists said the areas were taking one of the heaviest poundings they had seen in months.

A senior European Union official said that Assad - whose family has held power in Syria for 42 years - might be preparing for a military showdown around Damascus by isolating the city with a network of checkpoints.

"The rebels are gaining ground but it is still rather slow. We are not witnessing the last days yet," the official said on condition of anonymity.

"On the outskirts of Damascus, there are mortars and more attacks. The regime is thinking of protecting itself ... with checkpoints in the next few days ... (It) seems the regime is preparing for major battle on Damascus."

A U.S. official said the rebels were "making important tactical gains that could eventually trigger a strategic shift in the conflict."

"They haven't reached that point yet, but the span of regime control is narrowing, and Assad's forces are having greater difficulty beating back the insurgents' progress," said the official, who also spoke on condition of anonymity.

Secretary of State Hillary Clinton echoed that view in remarks in a speech in Washington.

"I don't know that you can say that for the entire country it is yet at a tipping point, but it certainly seems that the regime will be much harder pressed in the next months," she said.

WARY BIG POWERS

Most foreign powers have condemned Assad but stopped short of arming rebel fighters as they fear heavy weapons could make their way into the hands of radical Islamist units, who have grown increasingly prominent in the insurgency.

Rebels decry their supporters for not providing them with surface-to-air missiles that they say they need to counter the air force. But recent looting of anti-aircraft missiles from army bases, as well as a slow stream of such weapons believed to be coming from Gulf Arab adversaries of Assad, has allowed them to shoot down some helicopters and jets.

U.S. Defense Secretary Leon Panetta told a Pentagon news conference the United States had not provided anti-aircraft missiles to the Syrian opposition, saying it was focused on nonlethal aid and humanitarian relief.

"Let me say unequivocally that we have not provided any of those kinds of missiles to the opposition forces located in Syria," he said.

Panetta and Israeli Defense Minister Ehud Barak both told the news conference they believed Assad would ultimately fall.

"It's criminal behavior on a global scale what he is doing to his own people, using jet fighters and helicopters and artillery and tanks, killing his own people," Barak said. "The whole world is watching and somehow it's not easy to mobilize enough sense of purpose and unity of action and political will to translate ... our feelings about what happens there into action to stop it."

Peter Bouckeart, emergencies director at Human Rights Watch, said the surface-to-air missiles used so far appeared to have been captured from the Syrian military and there was no evidence any of the ones used to date "have come from outside Syria."

He said the number of these missiles in rebel hands was probably over 20 but could rise significantly if rebels continue to capture military bases.

The relatively small number of anti-aircraft missiles looted so far means that many rebel-controlled areas of the country remain vulnerable to air strikes. The Observatory said 15 citizens, including children and women, were killed during a bombing in Aleppo's Ansari district on Thursday.

(Additional reporting by Dominic Evans and Erika Solomon in Beirut; Yasmine Saleh and Edmund Blair in Cairo, Praveen Menon in Dubai, Tabassum Zakaria and David Alexander in Washington, Tarmo Virki in helsinki and Justyna Pawlak in Brussels; Editing by Tom Pfeiffer and Cynthia Osterman)


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Egypt constitution finalized as opposition cries foul

CAIRO (Reuters) - An Islamist-led assembly raced through approval of a new constitution for Egypt on Friday to end a crisis over President Mohamed Mursi's newly expanded powers, but opponents responded with another rally in Cairo against the Islamist leader.

"The people want to bring down the regime," they chanted in Tahrir Square, where hundreds had gathered, echoing the chants that rang out in the same place less than two years ago and brought down Hosni Mubarak.

Mursi said the decree halting court challenges to his decisions, which sparked eight days of protests and violence by Egyptians calling him a new dictator, was "for an exceptional stage", aimed at speeding up the democratic transition.

"It will end as soon as the people vote on a constitution," he told state television while the constituent assembly was still voting on the draft, which the Islamists say reflects Egypt's new freedoms. "There is no place for dictatorship."

The opposition cried foul. Liberals, leftists, Christians, more moderate Muslims and others had withdrawn from the assembly, saying their voices were not being heard.

They have called for a big rallies across the country on Friday after tens of thousands protested against Mursi's decree on Tuesday. Demonstrations tend to gather pace later in the day.

Protesters said they would push for a 'no' vote in a referendum, which could happen as early as mid-December. If approved, it would immediately cancel the president's decree.

"We fundamentally reject the referendum and constituent assembly because the assembly does not represent all sections of society," said Sayed el-Erian, 43, a protester in Cairo's Tahrir Square. He is a member of the liberal Dostour (Constitution) Party, set up by prominent opposition figure Mohamed ElBaradei.

"Leave, leave," some chanted, another anti-Mubarak slogan.

The plebiscite on the constitution is a gamble based on the Islamists' belief they can mobilize voters again after winning all the elections since Mubarak was overthrown in February 2011.

But it will need the cooperation of judges to oversee the vote, though many were angered by Mursi's decree that they said undermined the judiciary. Some judges have gone on strike.

The assembly concluded the vote after a 19-hour session, approving all 234 articles including presidential powers, the status of Islam, the military's role and the extent to which human rights will be respected in the post-Hosni Mubarak era.

HISTORIC CHANGES

The final draft contains historic changes to Egypt's system of government. It limits to eight years the amount of time a president can serve, for example. Mubarak was in power for three decades. It also introduces a degree of oversight over the military establishment - though not enough for critics.

Mursi is expected to ratify the document by Saturday, allowing a referendum to be held as soon as mid-December.

"We have finished working on Egypt's constitution," said Hossam el-Gheriyani, head of the assembly in a live broadcast of the session. "We will call the president today (Friday) at a reasonable hour to inform him that the assembly has finished its task and the project of the constitution is completed."

The vote was often interrupted by bickering between the mostly Islamist members and Gheriyani over the articles. Several articles were amended on the spot before they were voted on.

"This is a revolutionary constitution," Gheriyani said, asking members of the assembly to launch a cross-country campaign to "explain to our nation its constitution".

Critics argue it is an attempt to rush through a draft they say has been hijacked by the Muslim Brotherhood, which backed Mursi for president in a June election, and its allies.

Two people have been killed and hundreds injured in protests since the decree on Thursday last week, which deepened the divide between the newly empowered Islamists and their critics.

Setting the stage for more tension, the Muslim Brotherhood and its Islamist allies have called for pro-Mursi rallies on Saturday. But officials from the Brotherhood's party changed the venue and said they would avoid Tahrir Square.

Seeking to calm protesters, Mursi said he welcomed opposition but there was no place for violence. "I am very happy that Egypt has real political opposition," he said.

He said Egypt needed to attract investors and tourists. The crisis threatens to derail early signs of an economic recovery after two years of turmoil. Egypt's benchmark stock index fell on Thursday to a four-month low.

An alliance of opposition groups pledged to keep up protests and said broader civil disobedience was possible to fight what it described as an attempt to "kidnap Egypt from its people."

ISLAMIC REFERENCES

Eleven newspapers plan not to publish on Tuesday to protest Mursi's decree, one reported. Al-Masry Al-Youm, one of Egypt's most widely read dailies, also said three privately owned satellite channels would not broadcast on Wednesday in protest.

The draft injects new Islamic references into Egypt's system of government but keeps in place an article defining "the principles of sharia" as the main source of legislation - the same phrase found in the previous constitution.

The president can declare war with parliament's approval, but only after consulting a national defense council with a heavy military and security membership. That was not in the old constitution, used when Egypt was ruled by ex-military men.

Activists highlighted other flaws such as worrying articles pertaining to the rights of women and freedom of speech.

A new parliamentary election cannot happen until the constitution is passed. Egypt has been without an elected legislature since the Islamist-dominated lower house was dissolved in June, based on a court order.

"The secular forces and the church and the judges are not happy with the constitution; the journalists are not happy, so I think this will increase tensions in the country," said Mustapha Kamal Al-Sayyid, a Cairo University political science professor.

(Additional reporting by Tom Perry, Yasmine Saleh and Tamim Elyan; Writing by Edmund Blair; Editing by Philippa Fletcher)


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U.N. set for implicit recognition of Palestinian state, despite U.S., Israel threats

Written By Bersemangat on Kamis, 29 November 2012 | 18.56

UNITED NATIONS (Reuters) - The U.N. General Assembly is set to implicitly recognize a sovereign state of Palestine on Thursday despite threats by the United States and Israel to punish the Palestinian Authority by withholding much-needed funds for the West Bank government.

A Palestinian resolution that would change the Palestinian Authority's U.N. observer status from "entity" to "non-member state," like the Vatican, is expected to pass easily in the 193-nation U.N. General Assembly.

Israel, the United States and a handful of other members are planning to vote against what they see as a largely symbolic and counterproductive move by the Palestinians.

Palestinian President Mahmoud Abbas has been leading the campaign to win support for the resolution, and over a dozen European governments have offered him their support after an eight-day conflict this month between Israel and Islamists in the Gaza Strip, who are pledged to Israel's destruction and oppose his efforts toward a negotiated peace.

The U.S. State Department said on Wednesday that Deputy Secretary of State Bill Burns and U.S. Middle East peace envoy David Hale traveled to New York on Wednesday in a last-ditch effort to get Abbas to reconsider.

The Palestinians gave no sign they were turning back.

Secretary of State Hillary Clinton repeated to reporters in Washington on Wednesday the U.S. view that the Palestinian move was misguided and efforts should focus instead on reviving the stalled Middle East peace process.

"The path to a two-state solution that fulfills the aspirations of the Palestinian people is through Jerusalem and Ramallah, not New York," she said. "The only way to get a lasting solution is to commence direct negotiations."

State Department spokeswoman Victoria Nuland reiterated U.S. warnings that the move could lead to a reduction of U.S. economic support for the Palestinians. The Israelis have also warned they might take significant deductions out of monthly transfers of duties that Israel collects on the Palestinians' behalf.

'SLAP IN THE FACE'

Granting Palestinians the title of "non-member observer state" falls short of full U.N. membership - something the Palestinians failed to achieve last year. But it would allow them access to the International Criminal Court and some other international bodies, should they choose to join them.

Hanan Ashrawi, a top Palestinian Liberation Organization official, told a news conference in Ramallah that "the Palestinians can't be blackmailed all the time with money."

"If Israel wants to destabilize the whole region, it can," she said. "We are talking to the Arab world about their support, if Israel responds with financial measures, and the EU has indicated they will not stop their support to us."

Peace talks have been stalled for two years, mainly over the issue of Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world.

In their draft resolution, the Palestinians have pledged to relaunch the peace process immediately following the U.N. vote.

As there is little doubt about how the United States will vote when the Palestinian resolution to upgrade its U.N. status is put to a vote sometime after 3 p.m. (2000 GMT) on Thursday, the Palestinian Authority has been concentrating its efforts on lobbying wealthy European states, diplomats say.

With strong support from the developing world that makes up the majority of U.N. members, the Palestinian resolution is virtually assured of securing more than the requisite simple majority. Palestinian officials hope for over 130 yes votes.

Abbas has been trying to amass as many European votes in favor as possible.

As of Wednesday afternoon, Austria, Denmark, Norway, Finland, France, Greece, Iceland, Ireland, Luxembourg, Malta, Portugal, Spain and Switzerland had all pledged to support the Palestinian resolution. Britain said it was prepared to vote yes, but only if the Palestinians fulfilled certain conditions.

Diplomats said the Czech Republic was expected to vote against the move, although other Europeans might join it. Germany said it could not support the Palestinian resolution, but left open the question of whether it would abstain, like Estonia and Lithuania, or vote no with the Czechs.

Ashrawi said the positive responses from European states were encouraging and sent a message of hope to all Palestinians.

"This constitutes a historical turning point and opportunity for the world to rectify a grave historical injustice that the Palestinians have undergone since the creation of the state of Israel in 1948," she said.

A strong backing from European nations could make it awkward for Israel to implement harsh retaliatory measures. Diplomats say Israel wants to avoid antagonizing Europe. But Israel's reaction might not be so measured if the Palestinians seek ICC action against Israel on charges of war crimes, crimes against humanity or other crimes the court would have jurisdiction over.

Israel also seems wary of weakening the Western-backed Abbas, especially after the political boost rival Hamas received from recent solidarity visits to Gaza by top officials from Egypt, Qatar and Tunisia.

Hamas militants, who control Gaza and have had icy relations with the Palestinian Authority in the West Bank, unexpectedly offered Abbas their support earlier this week.

One Western diplomat said the Palestinian move was almost an insult to recently re-elected U.S. President Barack Obama.

"It's not the best way to convince Mr. Obama to have a more positive approach toward the peace process," a Western diplomat planning to vote for the Palestinian resolution said. "Three weeks after his election, it's basically a slap in the face."

(Andrew Quinn in Washington, Noah Browning in Ramallah, Jeffrey Heller in Jerusalem, Michelle Nichols in New York, and Reuters bureaux in Europe and elsewhere; Editing by Peter Cooney)


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Insight: Cash crisis, Arab ferment threaten Jordan's stability

AMMAN (Reuters) - Violent protests that shocked Jordan this month have mostly subsided, but unprecedented chants for the "fall of the regime" suggested a deeper malaise in a kingdom so far spared the revolts reshaping the Arab world.

Anger over fuel subsidy cuts undoubtedly drove the unrest, in which police shot dead one man during a confrontation at a police station. The government's planned electricity price rises starting next year may well ignite more popular fury.

King Abdullah has made some constitutional reforms and his counselors say turnout at a parliamentary poll in January will test public support for the pace of political change amid an acute financial crisis that has forced Jordan to go to the IMF.

However, the model that has kept Jordan relatively stable for decades is cracking, nowhere more so than in the tribal East Bank provinces long seen as the bedrock of support for the Hashemite monarchy installed here by Britain in 1921.

The formula reinforced after the 1970 civil war between the army and Palestinian guerrillas - a defining national trauma now airbrushed from public discourse - broadly gives East Bankers jobs in the army, police, security services and bureaucracy.

Jordan's Palestinian-origin majority dominates private enterprise, but does not play a commensurate political role, in part because electoral gerrymandering curbs its voting power.

Although the fissure between the two communities is blurred by inter-marriage, long co-existence and, at least among the elite, business ties, it is likely to haunt Jordan as long as the wider Israeli-Palestinian conflict remains unresolved.

Jordanians of all stripes are fearful of the insecurity that stalks their neighbors, but the money that kept discontent in check across a fragmented society is simply no longer there.

An influx of 240,000 refugees from the Syrian conflict next door has further strained the resources of a country of seven million that has almost no oil and precious little water.

"Reform is genuinely difficult because you need to change the economic as well as the political rules," said a European diplomat. "In the past the tribes gave their support in return for jobs and money. Now that this is no longer affordable, they are shouting things like 'We won't pay for your corruption'."

Palestinians, while also hard hit by the austerity measures, have mostly laid low to avoid political flak.

DISGRUNTLED TRIBESMEN

In Kerak, a tribal hilltop town caught up in price protests earlier this month, morose shopkeepers await customers in the narrow market streets below the imposing Crusader citadel.

"Everyone who feels the pinch should go out in the street to express his views peacefully," said Hani Herzallah, 41, a barber with four children. He said he had joined the protests against fuel price rises that included a 54 percent increase in the cost of gas cylinders most Jordanians use for cooking and heating.

At a shop selling live chickens from wire cages, Tahseen al-Tanashat, 64, said he had just drawn his 200 dinar ($280) pension, but only had 50 dinars left after paying his bills.

Tanashat, on a state pension since he retired as a guard 31 years ago, said two of his three sons were soldiers. "I just want my 19-year-old still at home to get a job in the army."

For all their complaints, Kerak, 90 km (56 miles) south of Amman, has been lavished with state funds, thanks perhaps to powerful Majali and Tarawneh tribal figures who have occupied top positions in the government and military for decades.

An illuminated four-lane highway leads to the town of 65,000, passing a power station and an industrial zone that is far from bustling. Kerak boasts a major university, a new public hospital along with training colleges, and a palace of justice.

But jobs are scarce. A government hiring freeze is meant to alleviate the public sector pay and pension burden on a state treasury long reliant on aid from Gulf Arab and Western donors.

A U.S. diplomatic cable published by WikiLeaks said Jordan's "bloated civil service and military patronage system" soaked up 83 percent of the 2010 budget, despite planned spending cuts.

The economy has hit even stormier seas since then. Egypt's new rulers have sharply reduced cheap gas supplies to Jordan, which imports 97 percent of its energy and which has suddenly had to pay an extra $2.5 billion a year for fuel.

This month's protests were the most violent of several bouts of unrest in Jordan since Arab uprisings erupted nearly two years ago and toppled autocrats in Tunisia, Egypt and Libya.

Those in Kerak and other East Bank towns were organized by local opposition movements known collectively as Hirak, whose grievances focus on corruption, poor services and unemployment. They also resent privatization and other market reforms intended to reduce state spending - from which they benefit.

"Hirak is not driven by democracy, but by a sense of entitlement," said Mustafa Hamarneh, a social scientist running for parliament in the provincial town of Madaba. "It has not developed from spontaneous mobilization into a national political movement. It is parochial, with personalized demands."

EMBOLDENED ISLAMISTS

Jordan lacks credible political parties, with the exception of the Muslim Brotherhood's Islamic Action Front, whose power base is mostly, but not exclusively, urban and Palestinian. In some cities Islamists have developed tentative links with Hirak.

The Brotherhood, which has a track record of moderation since its Jordan branch was licensed in 1946, plans to boycott the January election, citing rules it says are meant to keep it from securing the biggest bloc in the 150-seat assembly.

The authorities accuse the Islamists, emboldened by Arab uprisings that led to election wins for their counterparts in Egypt and Tunisia, of fomenting unrest and of refusing to join a reform dialogue launched by King Abdullah in early 2011.

"Apparently the Muslim Brotherhood decided they stood to get more gains if they stayed in the streets," said a senior official source, speaking on condition of anonymity.

He acknowledged that the timing of the subsidy cuts, just as winter and an election were approaching, was far from ideal, but said there was no choice because Jordan risked "insolvency".

In return for a $2 billion standby arrangement agreed in August, the International Monetary Fund wants public sector reform and action on subsidies, including electricity tariffs.

Gulf donors such as Saudi Arabia, which rescued Jordan from an earlier crunch point with $1.4 billion a year ago, have held off from giving direct budget support so far this year, though Riyadh and Kuwait have sent $250 million each for projects.

Speculation about the reasons ranges from heavy spending by Gulf nations to stave off disaffection at home, concern about corruption in Jordan, and more pressing regional priorities - or even irritation that Amman had factored assumptions about Gulf aid into its IMF presentation without asking the donors first.

Saudi Arabia and Qatar may also want Jordan to be more active in the Syria crisis. "They would essentially like to see Jordan becoming the southern equivalent of Turkey in supporting the Syrian opposition," said Amman-based analyst Moin Rabbani.

"The Jordanians however ... prefer to play a less visible role and exercise it more covertly."

The survival of a vengeful Bashar al-Assad or a triumph for his Islamist-dominated foes would both pose dangers for Amman.

Jordan, valued by the West for its peace treaty with Israel and for its role as a stable buffer in a volatile region, still has an ambassador in Damascus, in line with its usual policy of walking a careful line between its more powerful neighbors.

TOP-DOWN REFORM

When Arab revolts began last year, the king, reigning since his father Hussein died in 1999, renewed a political reform drive opposed by conservatives which he had set aside to focus on economic liberalization aimed at expanding the middle class.

"The results remain disappointing," wrote Julien Barnes-Dacey in a paper for the European Council on Foreign Relations. "Despite changes to the constitution, few restrictions have been placed on the king's direct political authority."

King Abdullah, who has replaced his cabinet five times in the past two years, can still appoint and dismiss governments, although he has promised to consult parliament on choosing the next prime minister, who must then win a confidence vote.

"Parliament must become its own master and not get dissolved by the king in two words," said Wisam al-Majali, a Hirak activist in Kerak. "Now if even the best parliament digs deeper on corruption, it is dissolved the next day."

Another Kerak activist, Moaz al-Batoush, said an empowered parliament would obviate the need for street protests against "stupid" decisions that risked igniting revolutionary demands.

"Some people angered by the price rises reacted by calling for the downfall of the regime," he said, adding that this had never been a Hirak demand. "There is a crisis of confidence."

The official source defended the reforms, which include creation of an independent electoral commission, saying an overwhelming majority of Jordanians opposed removing powers from a monarch seen as a safeguard amid competing interests.

He said re-drawing electoral boundaries was not easy, given resistance from now over-represented East Bankers - Amman gets only a fifth of seats in parliament, despite being home to roughly half Jordan's population, many of them Palestinians.

The mood is sour among Palestinians in the Hussein refugee camp, now a scruffy built-up neighborhood of the capital.

"These price rises have slapped people in the face," said Abdul-Moneim Abu Aisha, 52, a butcher dragging on a cigarette as he sold small gobbets of meat in a tiny neon-lit shop.

In a market street where stalls piled high with vegetables jut out into the snarled traffic, people said only minor fuel price protests had occurred in the camp. Some voiced suspicion that even these were the work of outside provocateurs.

"The Palestinian camps will move only when the Jordanian tribal cities move and when the whole country rises up. If the camps rise up on their own they will be put down brutally," said a carpenter, who gave his name only as Abu Omar.

"We are targeted as Palestinians," he said, while having his hair cut. "The first thing they ask when you enter a police station is about your original hometown. But I'm a Jordanian who served in the army, and if anything happens to the country I will be the first to defend it, so why ask where I come from?"

With East Bankers and Palestinians alike feeling aggrieved, tensions might calm if the January election produced a new-look parliament and a government with the popular legitimacy to take tough decisions, but the electoral rules and the planned boycott of the vote by Islamists and others make this unlikely.

While the 50-year-old king seems confident his roadmap is the best route for a divided society, not everyone is so sure.

"Jordan needs an inclusive political reform to cope with the horrendous economic challenges," the European diplomat said.

"What we have is a baby step. The democratic deficit remains and has not been narrowed at a time when you need public confidence to deal with the challenges and the corruption."

(editing by Janet McBride)


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China considering attending U.S.-hosted military exercise

BEIJING (Reuters) - China's Defence Ministry said on Thursday it was considering a U.S. invitation to attend military drills in the Pacific, in what would be a rare case of cooperation between the countries that share deep military suspicions.

Asked to confirm if U.S. Navy Secretary Ray Mabus, recently in Beijing, had invited China to attend the U.S.-hosted multi-nation Rimpac maritime exercises, Defence Ministry spokesman Geng Yansheng said that was the case.

"The Chinese side thanks the U.S. side for the invite, and will give it positive consideration," he told a monthly news briefing, according to a transcript posted on the ministry's website. Foreign reporters are not allowed to attend.

This year's Rimpac involved more than 22 nations, including Russia, Japan and India, in waters off Hawaii, but China was not invited. The next one is scheduled for 2014.

China and the United States, the world's two largest economies, have had an on-again, off-again defence relationship in recent years.

Two years ago China severed all military ties over U.S. arms sales to self-ruled Taiwan. Beijing has never renounced the use of force to bring the island under its control.

Pentagon officials have long complained that China has not been candid enough about its rapid military build-up, whereas Chinese officials have accused Washington of viewing their country in suspicious, "Cold War" terms.

U.S. Defense Secretary Leon Panetta urged China in September to expand military relations with the United States to reduce the risk of confrontation.

This week, Chinese and U.S. officers are holding a disaster management exercise in China's southwestern city of Chengdu.

However, China's military modernization continues apace. It has territorial disputes with Japan and various Southeast Asian nations in the South China Sea.

(Reporting by Ben Blanchard; Editing by Robert Birsel)


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Insight: France's love affair with nuclear cools

PARIS (Reuters) - For decades, the elite engineers turned out by Paris's grand Corps des Mines academy were faithful followers of the pro-atomic creed that transformed their country into the most nuclear-reliant nation in the world.

But a new generation of Mines graduates is starting to question that policy. It is a change of mindset that could aid efforts by President Francois Hollande to cut reliance on nuclear power from 75 percent to 50 percent of the electricity mix by 2025.

"Noone at the Corps des Mines questions the need for nuclear power in the energy mix, however the younger generation is more concerned about the environment and leaving room for other energy sources," said Francois Bordes, a 40-year old Corps des Mines graduate who advises businesses on energy efficiency.

Bordes is part of a generation of Mines engineers who believe atomic energy has a role to play - but not the dominant one given it by elders who helped build the world's second-largest nuclear program after the United States.

"There is a generation gap between Mines members who had key jobs during the three booming post-war decades and those who started out in the past 15 years," Bordes added.

The Corps des Mines was founded in 1794 to turn France's now-exhausted coal mines to the advantage of Europe's industrial revolution. But after World War Two it won a new raison d'être when Corps des Mines engineer Pierre Guillaumat worked with De Gaulle to create the state-funded CEA nuclear research body.

It became an example of French post-war "dirigisme" - the policy under which the state seeks to direct the economy - determining how nuclear energy was used for civilian and military purposes, with the development of France's atomic bomb.

"A RISKIER WORLD"

The construction of 58 nuclear reactors prompted successive French governments to invest massively in electric heating to absorb the supplies. France became the world's top electricity exporter.

Now some Mines graduates say the heavy dependence on one energy form means France struggles to cope with seasonal demand spikes.

"We believed for too long that nuclear energy was cheap and that we could, for example, massively develop electric heating as a result. This is nonsensical," said Vincent Le Biez, a 27- year-old Mines graduate.

Alumni include Anne Lauvergeon, ex-head of nuclear giant Areva, current head of France's nuclear energy watchdog ASN, Pierre-Franck Chevet, his predecessor Andre-Claude Lacoste, and Jacques Repussard of the IRSN nuclear safety institute.

The nuclear industry's image was tainted in the eyes of the French public after the 1986 Chernobyl nuclear disaster, when the nuclear watchdog insisted radioactive contamination from the accident had not spread to French territory.

In fact it released vast quantities of radioactive material over the whole of Europe and France was no exception. For many French, the episode created the perception of an invisible pro-nuclear lobby pushing its interests against those of the nation.

France's nuclear lobby is hard to pin down because it is intricate. Its critics tend to be anti-nuclear NGOs or green politicians with no ministerial experience. A rare exception is Corinne Lepage, former ecology minister under Alain Juppe's government between 1995 and 1997.

Lepage said the lobby had strong leverage in parliament.

"There is at the parliament a powerful group of parliamentarians and senators who are pro-nuclear, with some formerly from EDF," she said, referring to the state utility that is Europe's biggest electricity producer. "They are so close to the (nuclear) lobby that they are called 'EDF allies'."

Chernobyl was for many a wake-up call to the dangers of nuclear energy, an alarm which sounded again with Japan's Fukushima nuclear disaster last year.

"Graduates who started out working in the 1990s are more worried about a riskier world where no technology is perfect," said Bordes.

"PURGING" CHERNOBYL

Hollande's government is due to shut France's oldest reactor by the end of 2016 and launched on Thursday a national debate on energy that will for the first time include discussion of the role of atomic power.

That debate will help shape a framework energy law in 2013 that will define how to cut France's nuclear capacity, boost renewable energy and lift energy efficiency. With France currently shunning shale gas for ecological reasons, nuclear advocates will argue that French industry simply cannot do without cheap nuclear power.

France is slowly embracing heavily-subsidized renewable energies, such as wind and sun power, but they only make up 13 percent of the energy mix, far behind Germany and Spain and well below the 23-percent target set by former President Nicolas Sarkozy for 2020.

The change in mindset is reflected at the ASN. In contrast to its handling of Chernobyl, it was the first agency worldwide to classify the Fukushima accident at the top end of the international nuclear and radiological event scale (INES).

ASN activated an unprecedented communication plan designed to provide France and the world with an up-to-the-minute independent view of the unfolding event.

"There was in the mind of a number of people at the French nuclear safety authority, including myself, the idea that we had to purge Chernobyl," said Lacoste, who retired this month after 20 years as ASN chief.

Yet any move away from nuclear is likely to be a subtle shift rather than a sharp jolt. While the oldest nuclear reactor is due to be shut, there are no plans to halt construction of Areva's next-generation reactor in northwestern France.

"The shift announced by the French President will not affect the technical expertise of French operators EDF and Areva," Jean-Paul Tran Thiet, an energy lawyer for White & Case said.

But the cooling of France's ardour for nuclear could give pause for thought to others such as South Africa, still hesitating to build new reactors.

"This decision can also be perceived as a weakening in confidence of the nuclear power sector, which could have a negative impact on foreign buyers," Tran Thiet added.

(Additional reporting by Axelle Du Crest; editing by Mark John, Anna Willard and Janet McBride)


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Palestinians win support from Swiss, Danes for U.N. vote

Written By Bersemangat on Rabu, 28 November 2012 | 18.56

GENEVA/RAMALLAH, West Bank (Reuters) - Switzerland and Denmark on Wednesday joined a growing list of European countries that back an upgrade for Palestinians to non-member status at the United Nations, a victory that would be a diplomatic boost to their aspirations for statehood.

With overwhelming support from the developing world, the Palestinians appear certain to earn approval in the 193-member U.N. General Assembly for a status upgrade to "observer state" on Thursday.

Israel and its main ally the United States oppose the move, which would implicitly recognize Palestinian statehood.

France said on Tuesday it would vote in favor of non-member status and Switzerland and Denmark have now followed suit.

"The decision to support the resolution is in accordance with Switzerland's policy to seek a negotiated, just, and durable peace between Israel and an independent and viable Palestinian state within secure and internationally recognized borders," the Swiss Foreign Ministry said in a statement.

The Swiss decision followed a visit to Berne by Palestinian President Mahmoud Abbas this month as the country hesitated between voting in favor of the resolution or abstaining.

A positive vote would make it possible to "revitalize the concept of a two-state solution by placing Israel and Palestine on an equal footing in future peace negotiations", the Swiss ministry said.

Abbas had reiterated his commitment to relaunch the peace process immediately following the U.N. vote, it said.

In Copenhagen, the Danish foreign minister said Denmark would also vote "yes".

"It is a moderate text which clearly highlights the need for peace negotiations and negotiations for a two-state solution that can secure Palestinians a safe and sustainable state side by side with Israel, minister Villy Sovndal said.

Britain, which has been cool on the idea, was due to announce its decision later in the day.

Israel and the United States condemn the U.N. bid, saying the only genuine route to statehood for the Palestinians is via a peace agreement made in direct talks with Israel.

Talks however have been stalled for two years, mainly over the issue of Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world.

TURNING POINT

In Ramallah in the West Bank, senior Palestine Liberation Organization official Hanan Ashrawi said the response was encouraging and sent a message of hope to all Palestinians.

"This constitutes a historical turning point and opportunity for the world to rectify a grave historical injustice that the Palestinians have undergone since the creation of the state of Israel in 1948."

"Now the people of this land, with enormous solidarity, is telling the whole world not only that we exist, but we are on our land and we have a right to self-determination and statehood," she said.

European countries are eager to bolster moderates such as Abbas after an eight-day conflict this month between Israel and Gaza-based Islamists estranged from more moderate West Bank compatriots and opposed to Israel's very existence.

Israel and the United States have mooted withholding aid and tax revenue that the Palestinian government in the West Bank needs to survive. Israeli Foreign Minister Avigdor Lieberman has also viewed options that include bringing down Abbas.

The change would allow the Palestinian territories to access bodies like the International Criminal Court, which prosecutes people for genocide, war crimes and other human rights violations.

After Israeli, British and U.S. diplomats unsuccessfully tried to persuade the Palestinians to drop their upgrade bid, they focused on trying to get the Palestinians to guarantee that they would forego complaining about Israel to the ICC.

Britain, which had pushed European countries to abstain on the U.N. vote, has asked the Palestinians to forego joining the ICC in return for its vote. Britain's U.N. Ambassador Mark Lyall Grant said London had not yet decided how to vote.

"We have made consistently clear that it is wrong for the Palestinians to bring this resolution to a vote at this time and that it isn't likely to be a helpful contribution to the peace process in the Middle East," Lyall said in New York on Tuesday.

The Palestinian U.N. observer, Riyad Mansour, said the Palestinians would not rush to sign up to the ICC if they win the U.N. status upgrade. But seeking action against Israel in the court would remain an option, he told a news conference at the United Nations on Tuesday.

Mansour said that if Israel continued to violate international law, particularly by building settlements in the West Bank - territory Israel captured in the 1967 Middle East War - then the Palestinians would consult with friends, including Europe, on what to do next.

The United States has suggested aid for the Palestinians - and possibly some funding for the United Nations - could also be at risk if the Palestinians win the U.N. upgrade. Israel has said it may cancel the Paris Protocol, an economic accord it maintains with the cash-strapped Palestinian Authority.

(Additional reporting by Mette Fraende in Copenhagen; Editing by Angus MacSwan)


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Egypt protests continue in deadlock over Mursi powers

CAIRO (Reuters) - Hundreds of protesters were in Cairo's Tahrir Square for a sixth day on Wednesday, demanding that Egyptian President Mohamed Mursi rescind a decree they say gives him dictatorial powers.

Five months into the Islamist leader's term, and in scenes reminiscent of the popular uprising that unseated predecessor Hosni Mubarak last year, police fired teargas at stone-throwers following protests by tens of thousands on Tuesday against the declaration that expanded Mursi's powers and put his decisions beyond legal challenge.

Protesters say they will stay in Tahrir until the decree is withdrawn, bringing fresh turmoil to a nation at the heart of the Arab Spring and delivering a new blow to an economy already on the ropes.

Senior judges have been negotiating with Mursi about how to restrict his new powers, while protesters want him to dissolve an Islamist-dominated assembly that is drawing up a new constitution and which Mursi protected from legal review.

Any deal to calm the street will likely need to address both issues. But opposition politicians said the list of demands could grow the longer the crisis goes on. Many protesters want the cabinet, which meets on Wednesday, to be sacked, too.

Mursi's administration insists that his actions were aimed at breaking a political logjam to push Egypt more swiftly towards democracy, an assertion his opponents dismiss.

"The president wants to create a new dictatorship," said 38-year-old Mohamed Sayyed Ahmed, who has not had a job for two years. He is one of many in the square who are as angry over economic hardship as they are about Mursi's actions.

"We want the scrapping of the constitutional declaration and the constituent assembly, so a new one is created representing all the people and not just one section," he said.

The West worries about turbulence in a nation that has a peace treaty with Israel and is now ruled by Islamists they long kept at arms length. The United States, a big donor to Egypt's military, has called for "peaceful democratic dialogue".

Two people have been killed in violence since the decree, while low-level clashes between protesters and police have gone on for days near Tahrir. Violence has flared in other cities.

WRANGLES

Trying to ease tensions with judges, Mursi assured Egypt's highest judicial authority that elements of his decree giving his decisions immunity applied only to matters of "sovereign" importance, a compromise suggested by the judges in talks.

That should limit it to issues such as declaring war, but experts said there was much room for interpretation. The judges themselves are divided, and the broader judiciary has yet to back the compromise. Some have gone on strike over the decree.

The fate of the assembly drawing up the constitution has been at the centre of a wrangle between Islamists and their opponents for months. Many liberals, Christians and more moderate Muslims have walked out, saying their voices are not being heard in the body dominated by Islamists.

That has undermined the work of the assembly, which is tasked with shaping Egypt's new democracy. Without a constitution in place, the president's powers are not permanently defined and a new parliament cannot be elected.

For now, Mursi holds both executive and legislative powers. His decree says his decisions cannot be challenged until a new parliament is in place. An election is expected in early 2013.

"If Mursi doesn't respond to the people, they will raise their demands to his removal," said Bassem Kamel, a liberal and former member of the now dissolved parliament that was dominated by Mursi's party, a wing of the Muslim Brotherhood.

He said Tuesday's protest showed that Egyptians "understood that the Brotherhood isn't for democracy but uses it as a tool to reach power and then to get rid of it".

Protecting his decisions and the constituent assembly from legal review was a swipe at the judiciary, still largely unreformed since Mubarak's era. In a speech on Friday, Mursi praised the judiciary as a whole but referred to corrupt elements he aimed to weed out.

One presidential source said Mursi wanted to re-make the Supreme Constitutional Court, a body of top judges that earlier this year declared the Islamist-led parliament void, leading to its dissolution by the then ruling military.

Both Islamists and their opponents broadly agree that the judiciary needs reform, but Mursi's rivals oppose his methods.

The courts have dealt a series of blows to Mursi and the Brotherhood. The first constituent assembly, also packed with Islamists, was dissolved. An attempt by Mursi in October to remove the unpopular general prosecutor was also blocked.

In his decree, Mursi gave himself the power to sack the prosecutor general and appoint a new one, which he duly did.

(Additional reporting by Tamim Elyan; Writing by Edmund Blair; Editing by Will Waterman)


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Iran "will press on with enrichment:" nuclear chief

DUBAI (Reuters) - Iran will continue enriching uranium "with intensity", with the number of enrichment centrifuges it has operating to increase substantially in the current year, the country's nuclear energy chief was quoted as saying on Wednesday.

The comments by Fereydoun Abbasi-Davani, the head of Iran's Atomic Energy Organisation, signaled continued defiance by Iran in the face of international demands that Tehran halt enrichment to the higher 20 percent fissile purity level, close down its Fordow enrichment plant, and ship out its stockpile of the material.

Diplomacy between Iran and the world powers - the United States, China, Russia, France, Germany, and Britain - has been deadlocked since a June meeting that ended without any breakthrough.

Iran has faced a tightening of Western trade sanctions in the last two years, with the United States and its allies hoping the measures will force Iran to curb its nuclear program.

"Despite the sanctions, most likely this year we will have a substantial growth in centrifuge machines and we will continue (uranium) enrichment with intensity," Abbasi-Davani was quoted as saying on Wednesday by the website of Iranian state television (IRIB).

The Iranian calendar year runs to mid-March.

But Abbasi-Davani did not say whether Iran would increase the work that most worries the West, the higher-grade enrichment of uranium to 20 percent purity, as opposed to the lower-grade enrichment to 3.5 percent level needed for nuclear power plants.

Iran says it needs 20 percent enriched uranium to make fuel for a medical research reactor, and argues its nuclear program has purely peaceful purposes.

Iran started producing 20 percent-enriched uranium at the Fordow site, buried deep inside a mountain, in late 2011 and has been operating 700 centrifuges there since January.

A U.N. report earlier this month said that the Islamic state has put in place the nearly 2,800 centrifuges that Fordow was designed for, and is poised to double the number of them operating to roughly 1,400 from 700 now.

U.N. nuclear watchdog chief Yukiya Amano said earlier this month that Iran is enriching uranium at a constant pace and international sanctions aimed at making Tehran suspend the activity are having no visible impact.

Abbasi-Davani also said on Wednesday that the Arak research reactor, which Western experts say could potentially offer Iran a second route to material for a nuclear bomb, faced "no problems" and was progressing as normal, IRIB reported.

A U.N. report this month showed that Iran has postponed until 2014 the planned start-up of the Arak research reactor, which analysts say could yield plutonium for nuclear arms if the spent fuel is reprocessed.

(Reporting By Yeganeh Torbati; Editing by Greg Mahlich)


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Congo M23 rebels say withdrawing forces

GOMA, Democratic Republic of Congo (Reuters) - Rebels in eastern Democratic Republic of Congo have started withdrawing from two towns captured from government troops, following a deal brokered by Uganda, their military leader said on Wednesday.

That would mean the M23 rebel group were giving up gains from a lightning offensive carried out in the past week, but there was no indication they were ending their eight-month-old insurgency.

The revolt against Congo's government has raised the risk of all-out war in a borderlands region dogged by nearly two decades of conflict that has killed about 5 million people and is fuelled by competition over mineral resources.

"We're leaving Sake, we're leaving Masisi," Sultani Makenga told Reuters in rebel-held Goma, the provincial capital of North Kivu. "Goma will be later," he said, adding fighters would eventually pull back 20 km from the city.

Ugandan military chief Aronda Nyakayirima said on Tuesday after a meeting with Makenga that M23 had agreed to withdraw from Goma unconditionally. But M23's political leader Jean Marie Runiga initially cast doubt on the deal, saying the pull-out was contingent on a list of demands - including direct talks with President Joseph Kabila.

The rebels captured Goma on November20 after Congolese soldiers withdrew and U.N. peacekeepers gave up defending the city. U.N. experts and the Congolese government have said the M23 rebels are backed by Rwanda, a charge denied by Kigali.

(Reporting by Jonny Hogg; Writing by Bate Felix; Editing by Pravin Char)


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Arafat's grave opened for poison tests

Written By Bersemangat on Selasa, 27 November 2012 | 18.56

RAMALLAH, West Bank (Reuters) - Forensic experts took samples from Yasser Arafat's buried corpse in the West Bank on Tuesday, trying to determine if he was murdered by Israeli agents using the hard-to-trace radioactive poison, Polonium.

Palestinians witnessed the funeral of their hero and longtime leader eight years ago, but conspiracy theories surrounding his death have never been laid to rest.

Many are convinced their icon was the victim of a cowardly assassination, and may stay convinced whatever the outcome of this autopsy. But some in the city of Ramallah where he lies deplored the exhumation.

"This is wrong. After all this time, today they suddenly want to find out the truth?" said construction worker Ahmad Yousef, 31, who stopped to watch the disinterment, carried out behind a wall of blue plastic near the Palestinian presidency headquarters.

"They should have done it eight years ago," he said.

French magistrates in August opened a murder inquiry into Arafat's death in Paris in 2004 after a Swiss institute said it had discovered high levels of polonium on clothing of his which was supplied by his widow, Suha, for a television documentary.

"Samples will be taken according to a very strict protocol and these samples will be analyzed," said Darcy Christen, spokesman for Lausanne University Hospital in Switzerland that carried out the original tests on Arafat's clothes.

"In order to do these analyses, to check, cross-check and double cross-check, it will take several months and I don't think we'll have anything tangible available before March or April next year," he added.

Arafat was always a freedom fighter to Palestinians but a terrorist to Israelis first, and a partner for peace only later. He led the bid for a Palestinian state through years of war and peacemaking, then died in a French hospital aged 75 after a short, mysterious illness.

No autopsy was carried out at the time, at the request of Suha, and French doctors who treated him said they were unable to determine the cause of death.

But allegations of foul play immediately surfaced, and many Palestinians pointed the finger at Israel, which confined Arafat to his West Bank headquarters in Ramallah for the final two and a half years of his life after a Palestinian uprising erupted.

Israel denies murdering him. Its leader at the time, Ariel Sharon, now lies in a coma from which he is expected never to awake. Israel invited the Palestinian leadership to release all Arafat's medical records, which were never made public following his death and still have not been opened.

FRENCH INVESTIGATORS

Polonium, apparently ingested with food, was found to have caused the death of former Russian spy Alexander Litvinenko in London in 2006. But some experts have questioned whether Arafat could have died in this way, pointing to a brief recovery during his illness that they said was not consistent with radioactive poisoning. They also noted he did not lose all his hair.

Eight years is considered the limit to detect any traces of the fast-decaying polonium and Lausanne hospital questioned in August if it would be worth seeking any samples, if access to Arafat's body was delayed as late as "October or November."

Not all of Arafat's family agreed to the exhumation, and his wife Suha chose not to attend the operation she had prompted.

Working in parallel with the forensic team, French magistrates were in Ramallah this week to ask if members of Arafat's inner circle might be able to shed light on his death.

One source told Reuters the French had a list of 60 questions, and had questioned one man for five hours.

Many Palestinians acknowledge that a Palestinian would almost certainly have had to administer any poison, wittingly or unwittingly.

(Writing by Crispian Balmer; Editing by Douglas Hamilton and Tom Pfeiffer)


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Mursi opponents rally in Cairo's Tahrir

CAIRO (Reuters) - Opponents of President Mohamed Mursi rallied in Cairo's Tahrir Square for a fifth day on Tuesday, stepping up calls to scrap a decree they say threatens Egypt with a new era of autocracy.

The protest called by leftist, liberal and socialist groups marks an escalation of the worst crisis since the Muslim Brotherhood politician was elected in June and exposes the deep divide between newly empowered Islamists and their opponents.

The crowd is expected to grow in the late afternoon but hundreds were already in the square after many camped overnight. Police fired tear gas and organizers urged demonstrators not to clash with Interior Ministry security forces.

One person - a Muslim Brotherhood activist - has been killed and hundreds more injured in violence set off by a move that has also triggered a rebellion by judges and battered confidence in an economy struggling to recover from two years of turmoil.

Mursi's opponents have accused him of behaving like a modern-day pharaoh. The United States, a big benefactor to Egypt's military, has voiced its concerns, worried by more turbulence in a country that has a peace treaty with Israel.

The protest will test the extent to which Egypt's non-Islamist opposition can rally support. The Islamists have consistently beaten more secular parties at the ballot box in elections held since Hosni Mubarak was toppled in February, 2011.

"We don't want a dictatorship again. The Mubarak regime was a dictatorship. We had a revolution to have justice and freedom," said Ahmed Husseini, 32, who was speaking early on Tuesday in Tahrir Square.

Activists have been camped out in Tahrir Square, scene of the historic uprising against Mubarak, since Friday, blocking it to traffic and clashing intermittently with riot police in nearby streets.

The decree issued by Mursi on Thursday expanded his powers and protected his decisions from judicial review until the election of a new parliament expected in the first half of 2013.

The New York-based Human Rights Watch said it gives Mursi more power than the military junta from which he assumed power.

U.N. Secretary-General Ban Ki-moon noted judges had challenged the decree in remarks to Austria's Die Presse, adding: "But I have also noted that Mursi wants to resolve the problem in a dialogue. I will encourage him to continue to do so."

AVOIDING CONFRONTATION

In a bid to ease tensions with judges outraged at the step, Mursi has assured the country's highest judicial authority that elements of the decree giving his decisions immunity would apply only to matters of "sovereign" importance. Though that should limit it to issues such as a declaration of war, experts said there was room for a broader interpretation.

In another step to avoid more confrontation, the Muslim Brotherhood cancelled a mass protest it had called in Cairo for Tuesday in support of a decree that has also won the backing of more hardline Islamist groups.

But there has been no retreat on other elements of the decree, including a stipulation that the Islamist-dominated body writing a new constitution be protected from legal challenge.

Its popular legitimacy undermined by the withdrawal of most of its non-Islamist members, the assembly faces a raft of court cases from plaintiffs who claim it was formed illegally.

The new system of government to be laid out in the constitution is one of the issues at the heart of the crisis.

"The president of the republic must put his delusions to one side and undertake the only step capable of defusing the crisis: cancelling the despotic declaration," liberal commentator and activist Amr Hamzawy wrote in his column in al-Watan newspaper.

"We asked for the cancellation of the decree and that did not happen," said Mona Amer, spokeswoman for the opposition movement Popular Current, part of a coalition of parties that are joining forces to challenge the Mursi decree.

Mursi issued the decree a day after his administration won international praise for brokering an end to eight days of violence between Israel and Hamas in Gaza.

The decree was seen as targeting in part a legal establishment still largely unreformed from Mubarak's era, when the Brotherhood was outlawed.

MEETING HALF WAY

Rulings from an array of courts this year have dealt a series of blows to the Brotherhood, leading to the dissolution of the first constitutional assembly and the parliament elected a year ago. The Brotherhood had a major say in both.

The judiciary blocked an attempt by Mursi to reconvene the Brotherhood-led parliament after his election victory. It also stood in the way of his attempt to sack the prosecutor general, a Mubarak hold over, in October.

In his decree, Mursi gave himself the power to sack that prosecutor and appoint a new one. In open defiance of Mursi, some judges are refusing to acknowledge that step.

But in a sign that other judges were willing to meet Mursi half way, the Supreme Judicial Council, the nation's highest judicial body, proposed Mursi limit the scope of decisions that would be immune from judicial review to "sovereign matters", language the presidential spokesman said Mursi backed.

"The president said he had the utmost respect for the judicial authority and its members," spokesman Yasser Ali told reporters in announcing the agreement on Monday.

Mursi's administration has defended his decree as an effort to speed up reforms and complete a democratic transformation. Leftists, liberals, socialists and others say it has exposed the autocratic impulses of a man once jailed by Mubarak.

Before the president's announcement, leftist politician Hamdeen Sabahy said protests would continue until the decree was scrapped and said Tahrir would be a model of an "Egypt that will not accept a new dictator because it brought down the old one".

Mursi has repeatedly stated the decree will only stay in place until a new parliament is elected - something that can only happen once the constitution is written and passed in a popular referendum.

Though both Islamists and their opponents broadly agree that the judiciary needs reform, his rivals oppose Mursi's methods.

(Additional reporting by Seham Eloraby in Cairo and Michael Shields in Vienna; Editing by Anna Willard)


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Euro zone, IMF secure deal on cutting Greek debt

BRUSSELS (Reuters) - Euro zone finance ministers and the International Monetary Fund clinched agreement on reducing Greece's debt on Monday in a breakthrough to release urgently needed loans to keep the near-bankrupt economy afloat.

After 12 hours of talks at their third meeting in as many weeks, Greece's international lenders agreed on a package of measures to reduce Greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020.

In a significant new pledge, ministers committed to taking further steps to lower Greece's debt to "significantly below 110 percent" in 2022 -- the most explicit recognition so far that some write-off of loans may be necessary from 2016, the point when Greece is forecast to reach a primary budget surplus.

To reduce the debt pile, they agreed to cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.

"When Greece has achieved, or is about to achieve, a primary surplus and fulfilled all of its conditions, we will, if need be, consider further measures for the reduction of the total debt," German Finance Minister Wolfgang Schaeuble said.

Eurogroup Chairman Jean-Claude Juncker said ministers would formally approve the release of a major aid installment needed to recapitalize Greece's teetering banks and enable the government to pay wages, pensions and suppliers on December 13.

Greece will receive up to 43.7 billion euros in stages as it fulfills the conditions. The December installment will comprise 23.8 billion for banks and 10.6 billion in budget assistance.

The IMF's share, less than a third of the total, will only be paid out once a buy-back of Greek debt has occurred in the coming weeks, but IMF Managing Director Christine Lagarde said the Fund had no intention of pulling out of the program.

They promised to hand back 11 billion euros in profits accruing to their national central banks from European Central Bank purchases of discounted Greek government bonds in the secondary market.

They also agreed to finance Greece to buy back its own bonds from private investors at what officials said was a target cost of around 35 cents in the euro.

European Central Bank President Mario Draghi said on leaving the talks: "I very much welcome the decisions taken by the ministers of finance. They will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece."

BETTER FUTURE

Greek Prime Minister Antonis Samaras welcomed the deal.

"Everything went well," he told reporters outside his mansion at about 3 a.m. in the morning.

"Tomorrow, a new day starts for all Greeks."

However, the biggest opposition party, Syriza, dismissed the deal and said it fell short of what was needed to make the country's debt sustainable.

The euro strengthened against the dollar after news of the deal and commodities and Asian shares also rose.

Greece, where the euro zone's debt crisis erupted in late 2009, is the currency area's most heavily indebted country, despite a big "haircut" this year on privately-held bonds. Its economy has shrunk by nearly 25 percent in five years.

Negotiations had been stalled over how Greece's debt, forecast to peak at 190-200 percent of GDP in the coming two years, could be cut to a more sustainable 120 percent by 2020.

The agreed figure fell slightly short of that goal, and the IMF was still insisting that euro zone ministers should make a firm commitment to further steps to reduce the debt stock if Athens implements its adjustment program faithfully.

The key question remains whether Greek debt can become sustainable without euro zone governments having to write off some of the loans they have made to Athens.

Germany and its northern European allies have hitherto rejected any idea of forgiving official loans to Athens, but EU officials believe that line may soften after next year's German general election.

DEBT RELIEF "NOT ON TABLE"

Schaeuble told reporters earlier that debt forgiveness was legally impossible, not just for Germany but for other euro zone countries, if it was linked to a new guarantee of loans.

"You cannot guarantee something if you're cutting debt at the same time," he said. That did not preclude possible debt relief at a later stage if Greece completed its adjustment program and no longer needs new loans.

At Germany's insistence, earmarked revenue and aid payments will go into a strengthened "segregated account" to ensure that Greece services its debts.

A source familiar with IMF thinking said a loan write-off once Greece has fulfilled its adjustment program would be the simplest way to make its debt viable, but other methods such as forgoing interest payments, or lending at below market rates and extending maturities could all help.

The German banking association (BDB) said a fresh "haircut" or forced reduction in the value of Greek sovereign debt, must only happen as a last resort.

The ministers agreed to reduce interest on already extended bilateral loans from the current 150 basis points above financing costs to 50 bps.

No figures were announced for the debt buy-back in an effort to avoid triggering a rise in market prices in anticipation of a buyer. But before the meetings, officials had spoken of a 10 billion euro buy-back, that would achieve a net reduction of about 20 billion euros in the debt stock.

German central bank governor Jens Weidmann has suggested that Greece could "earn" a reduction in debt it owes to euro zone governments in a few years if it diligently implements all the agreed reforms. The European Commission backs that view.

An opinion poll published on Monday showed the Syriza party with a four-percent lead over the Conservatives who won election in June, adding to uncertainty over the future of reforms.

(Additional reporting by Robert-Jan Bartunek, Ethan Bilby, Luke Baker in Brussels, Reinhardt Becker in Berlin; Writing by Paul Taylor; Editing by Luke Baker and Anna Willard)


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Uganda military chief: Congo M23 rebels to pull out of Goma

KAMPALA (Reuters) - Uganda's military chief said on Tuesday that the leader of the M23 rebel group in the Democratic Republic of Congo, Colonel Sultani Makenga, has agreed to withdraw from the eastern cities of Goma and Sake.

African leaders called on the rebels on Saturday to abandon their aim of toppling the government and leave the city of Goma they captured last week, hoping to prevent a descent into all-out war in a region dogged by nearly two decades of conflict.

"We met last night and I communicated to him the decision of regional leaders reached on Saturday and he accepted to pull back his forces out of Goma and Sake and also stop any further advances southward," Uganda's chief of defense forces, Aronda Nyakayirima, told Reuters.

"He didn't put up any conditions for pulling out because he agreed that all their grievances will be resolved in the ICGLR (Great Lakes) mechanism as stipulated in the declarations of the Saturday summit (in Kampala)," he said.

A spokesman for the M23 rebels said he had not heard from his leader but withdrawing from Goma was not a problem.

"We don't know what Uganda discussed with our leader but what I can say is that withdrawing from Goma isn't a big problem. We can withdraw now, this evening or any time," Amani Kabasha told Reuters.

"The most important issue is that we agree with (DRC President Joseph) Kabila. As long as we agree with Kabila we can withdraw any time."

Lambert Mende, Congo's government spokesman, said he was aware Uganda had received Makenga.

"We hear that the response (to the request to pull out) is a yes but as for the time frame I am not sure. We are well used to false promises so we'll wait and see," he told Reuters.

Jean-Marie Runiga, M23's political chief, was expected to hold a news conference at 0900 GMT (4 a.m. ET) in Goma.

Rebel forces on Monday strengthened their positions around Goma, fanning out into hills surrounding the eastern city less than 20 km (12 miles) north of government positions in Minova, on the shores of Lake Kivu.

But Nyakayirima said the pullout should begin at midday, though it was not clear whether that referred to Kampala or Goma time, meaning 0900 or 1000 GMT.

The rebels, who have said they want to overthrow the government in Kinshasa, captured Goma after Congolese soldiers withdrew and U.N. peacekeepers were forced to give up defending the city.

(Additional reporting by Richard Lough and Jonny Hogg in Goma; Writing by Yara Bayoumy; Editing by Hugh Lawson)


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Syrian rebels take airbase in slow progress toward Damascus

Written By Bersemangat on Senin, 26 November 2012 | 18.56

AMMAN (Reuters) - Syrian rebels said on Sunday they had captured a helicopter base east of Damascus after an overnight assault, their latest gain in a costly battle to unseat President Bashar al-Assad that is drawing nearer to his seat of power.

The Marj al-Sultan base, 15 km (10 miles) from the capital, is the second military facility on the outskirts of the city reported to have fallen to Assad's opponents this month.

Activists said rebels had destroyed two helicopters and taken 15 prisoners.

"We are coming for you Bashar," a rebel shouted in an internet video of what activists said was Marj al-Sultan. Restrictions on non-state media meant it could not be verified.

The rebels have been tightening their hold on farmland and urban centers to the east and northeast of Damascus while a major battle has been underway for a week in the suburb of Daraya near the main highway south.

"We are seeing the starting signs of a rebel siege of Damascus," veteran opposition campaigner Fawaz Tello said from Berlin. "Marj al-Sultan is very near to the Damascus Airport road and to the airport itself. The rebels appear to be heading toward cutting this as well as the main northern artery to Aleppo."

Assad's core forces, drawn mainly from his minority Alawite sect, an offshoot of Shi'ite Islam that has dominated power in Syria for nearly five decades, are entrenched in the capital.

They also have devastating air superiority although they have failed to prevent rebels increasing their presence on the edge of the capital and in neighborhoods on the periphery.

A Syrian government air strike on the rebel-held village of Deir al-Asafir, 12 km (8 miles) east of Damascus, killed 10 children on Sunday, opposition activists said.

Internet video footage also showed residents collecting young bodies hit by shrapnel. A sobbing woman picked up the lifeless body of a girl, while the bodies of two boys were shown in the back seat of a car.

"None of those killed were older than 15 years old. There are two women among 15 people wounded," said Abu Kassem, an activist in the village told Reuters.

A Western diplomat following the fighting said Assad still had the upper hand. "The army will allow positions to fall here and there, but it can still easily muster the strength to drive back the rebels where it sees a danger," the diplomat said.

"The rebels are very short of international support and they do not have the supplies to keep up a sustained fight, especially in Damascus."

IRAN CONDEMNS PATRIOT PLAN

Iran said Turkey's request to NATO to deploy Patriot defensive missiles near its border with Syria would add to problems in the region, where Iran is pitted against mostly Sunni Turkey and Gulf Sunni powers.

Iran's Shi'ite rulers have stepped up support for Assad while Sunni Arab powers helped forge a new opposition coalition this month recognised by France and Britain as the sole representative of the Syrians.

Syria has called the missile request "provocative", seeing it as a first step toward a no-fly zone over Syrian airspace which the opposition is seeking to help them hold territory against an enemy with overwhelming firepower from the air.

Most foreign powers are reluctant to go that far.

NATO has said the possible deployment of the missiles was purely defensive. The U.S.-led Western alliance has had some talks on the request but has yet to take a decision.

Turkey fears security on its border may crumble as the Syrian army fights harder against the rebels, some of whom have enjoyed sanctuary in Turkey in their 20-month-old revolt against Assad's rule.

Ankara has scrambled fighter jets and returned fire after stray Syrian shells and mortar bombs from heavy fighting along the border landed in its territory.

More than 120,000 Syrian refugees are sheltering in camps in southern Turkey and more are expected with winter setting in and millions of people estimated to be short of food inside Syria.

Abu Mussab, a rebel operative in the area of Hajar al-Aswad in south Damascus, said the opposition fighters had given up expecting a no-fly zone. "The bet is now on better organization and tactics," he said.

The video said by activists to have been filmed at the Marj al-Sultan base showed rebel fighters carrying AK-47 rifles.

An anti-aircraft gun was positioned on top of an empty bunker and a rebel commander from the Ansar al-Islam, a major Muslim rebel unit, was shown next to a helicopter.

"With God's help, the Marj al-Sultan airbase in eastern Ghouta has been liberated," the commander said in the video. Eastern Ghouta, a mix of agricultural land and built-up urban areas, has been a rebel stronghold for months.

Damaged mobile radar stations could be seen on hilltops, with rebels waiving as they walked around the compound.

Footage from Saturday evening showed rebels firing rocket-propelled grenades at the base, and what appeared to be a helicopter engulfed in flames.

Last week rebels briefly captured an air defence base near the southern Damascus district of Hajar al-Aswad, seizing weapons and equipment before pulling out to avoid retaliation from Assad's air force.

(Additional reporting by Dominic Evans in Beirut Yeganeh Torbati in Dubai and Ece Toksabay in Istanbul; Editing by Philippa Fletcher)


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Catalan election weakens bid for independence from Spain

BARCELONA, Spain (Reuters) - Separatists in Spain's Catalonia won regional elections on Sunday but failed to get a resounding mandate for a referendum on independence, which had threatened to pile political uncertainty on top of Spain's economic woes.

Catalan President Artur Mas, who has implemented unpopular spending cuts, had called an early election to test support for his new drive for independence for Catalonia, a wealthy but financially troubled region in northeastern Spain.

Voters frustrated with the economic crisis and the Spanish tax system, which they claim is unfair to Catalonia, handed almost two-thirds of the 135-seat local parliament to four different separatist parties that all want to hold a referendum on secession from Spain.

But they punished the main separatist group, Mas's Convergence and Union alliance, or CiU, cutting back its seats to 50 from 62.

That will make it difficult for Mas to lead a united drive to hold a referendum in defiance of the constitution and the central government in Madrid.

"Mas clearly made a mistake. He promoted a separatist agenda and the people have told him they want other people to carry out his agenda," said Jose Ignacio Torreblanca, head of the European Council on Foreign Relations' Madrid office.

The result will come as a relief for Spanish Prime Minister Mariano Rajoy, who is battling a deep recession and 25 percent unemployment while he struggles to cut high borrowing costs by convincing investors of Spain's fiscal and political stability.

Mas, surrounded by supporters chanting "independence, independence", said he would still try to carry out the referendum but added that, "it is more complex, but there is no need to give up on the process."

Resurgent Catalan separatism had become a major headache for Rajoy, threatening to provoke a constitutional crisis over the legality of a referendum just as he is trying to concentrate on a possible international bailout for troubled Spain.

Catalonia shares some of its tax revenue with the rest of Spain and many Catalans believe their economy would prosper if they could invest more of their taxes at home. The tax issue has revived a long-dormant secessionist spirit in Catalonia.

Mas had tried to ride the separatist wave after hundreds of thousands of people demonstrated in the streets in September, demanding independence for Catalonia, which has its own language and sees itself as distinct from the rest of Spain.

In a speech to supporters on Sunday night Mas recognized that he had lost ground and though CiU is still the largest group in the Catalan parliament, he said he would need the support of another party to govern and to pass harsh austerity measures.

"We've fallen well short of the majority we had. We've been ruling for two years under very tough circumstances," he said.

Catalonia's traditional separatist party, the Republican Left, or ERC, won the second biggest presence in the Catalan parliament, with 21 seats. The Socialists took 20 seats. And Rajoy's centre-right People's Party won 19.

Three other parties, including two that want a referendum on independence, split the remaining 25 seats. ECFR's Torreblanca said the Catalan elections were similar to those around Europe in that economic woes have benefited marginal political groups, while larger, traditional parties have lost ground.

MAS MADE BIG BET

Mas's bet on separatism may have helped the big winner of Sunday's election, the Republican Left, which more than doubled its seats in the Catalan parliament to 21 from 10,

"He talked about it so much that he ended up helping the only party that has always been for independence, which is the Republican Left," said political analyst Ismael Crespo at the Ortega y Gasset research institute.

Mas's CiU had always been a pro-business moderate nationalist party that fought for more autonomy and self-governance for Catalonia without breaking away from Spain.

Mas broke with that tradition in September when he made a big bet on a referendum, tapping into a centuries old Catalan dream of independence that is rooted in the Middle Ages when there was a Principality of Catalonia.

Modern day Catalonia, with 7.5 million people, is more populous than Denmark. Its economy is almost as big as Portugal's and it generates one fifth of Spanish gross domestic product.

Since Spain returned to democracy in the 1970s after the Francisco Franco dictatorship regions like Catalonia and the Basque Country, which also has its own language, won significant autonomy.

For several decades the Catalan independence movement had died down. But it has flared up again in the economic crisis.

The momentum has been inspired in part by Scotland's plans to hold a referendum in 2014 and by the break away movement in Flanders. But it could subside as voters contemplate the economic realities of independence especially if the price to pay is leaving the European Union.

Wary that separatism could spread to the Basque Country and beyond, Rajoy said this week that the Catalan election was more important than general elections.

Home to car factories and banks and the birthplace of surrealist painter Salvador Dali and architect Antoni Gaudi, the region also has one of the world's most successful football clubs, FC Barcelona.

SPENDING CUTS HURT MAS

After a decade of overspending during Spain's real estate boom, Catalonia and most of the country's other regions are struggling to pay state workers and meet debt payments.

Mas was one of the first Spanish leaders to embark on harsh austerity measures after Catalonia's public deficit soared and the regional government was shunned by debt markets. He has also had to take billions of euros in bailout funds from the central government.

Josep Freixas, 37 and unemployed, voted for CiU but recognized the party had lost seats "because people have been really affected by the spending cuts and by the crisis."

At CiU headquarters on Sunday night Freixas carried a rolled up pro-independence flag - a single star against yellow and red stripes - that has become a symbol of the separatist movement.

Turnout was very high in the election, 68 percent, 10 percentage points higher than in the previous vote two years ago.

Raquel Correa, a 30-year-old journalist, said she travelled home from Brussels for the vote. She cast her ballot for Republican Left, or ERC. "I think people who want independence voted ERC because they are the real thing. They have fought for independence for a long time."

(Additional reporting by Sarah Morris in Barcelona and Emma Pinedo in Madrid; Editing by Jackie Frank)


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