Mursi calls December 15 referendum, Islamists rally

CAIRO (Reuters) - Egypt's President Mohamed Mursi called a December 15 referendum on a new constitution, hoping to end protests over a decree expanding his powers, as at least 200,000 of his Islamist supporters rallied in Cairo on Saturday.

Approval of the constitution drafted by an assembly stacked with Mursi's Islamist allies will override the November 22 decree that temporarily shielded Mursi from judicial oversight and triggered statements of concern from Western governments.

The decree plunged Egypt into its worst crisis since Mursi won office in a June election and sparked countrywide protests and violence in which two people have been killed and hundreds injured. This hit an economy just showing signs of recovery.

"I renew my call for opening a serious national dialogue over the concerns of the nation, with all honesty and impartiality," said Mursi after receiving the final draft from the constituent assembly. "We must move beyond the period of confrontation and differences, and get on to productive work."

The constitution is meant to be the cornerstone of democracy after three decades of army-backed autocracy under President Hosni Mubarak. Yet drafting it has been divisive, exposing splits between newly empowered Islamists and their opponents.

Protesters in an open-ended sit-in in Cairo's Tahrir Square, which was also the focus of demonstrations against Mubarak, accuse Mursi's Muslim Brotherhood of trying to impose a flawed constitution.

Leading opposition figure Mohamed ElBaradei said on Twitter that "struggle will continue" despite the referendum and that the draft constitution "undermines basic freedoms."

Liberal figures including former Arab League chief Amr Moussa pulled out of the constituent assembly last month, as did representatives of Egypt's Christian minority.

The draft constitution contains Islamist-flavored language which opponents say could be used to whittle away human rights and stifle criticism. It forbids blasphemy and "insults to any person", does not explicitly uphold women's rights and demands respect for "religion, traditions and family values".

The text also limits presidents to two four-year terms, requires parliamentary approval for their choice of prime minister, and introduces some civilian oversight of the military - although not enough for critics.

Mursi described it as a constitution that fulfilled the goals of the January 25, 2011 revolution that brought an end to Mubarak's rule. "Let everyone - those who agree and those who disagree - go to the referendum to have their say," he said.

JUDGES TO SUPERVISE VOTE

To hold the referendum, Mursi will depend on a judiciary which has been on partial strike over the November 22 decree, and which he and the Brotherhood suspect of links to the Mubarak regime. Judges oversee elections in Egypt.

Vice President Mahmoud Mekky said he trusted the judiciary would supervise the vote, state news agency MENA reported.

Mursi is betting the Islamists' core supporters and ordinary Egyptians fed up with instability will pass the constitution.

While Mursi only secured the presidency by a slim margin, the Islamists have won all elections since Mubarak was toppled.

The opposition must decide whether to urge a boycott or a "No" vote in the referendum. If they secure a "No", the president could retain the powers he has unilaterally assumed.

The referendum call met with cheers from the pro-Mursi rally at Cairo University. Streets were clogged with those sympathetic to the Muslim Brotherhood and more hardline Salafi parties.

The rally was a show of strength by Islamists who feel under attack from leftist, liberal and socialist parties. By early evening, the crowd peaked at at least 200,000, said Reuters witnesses, basing estimates on previous Cairo rallies. Authorities declined to give an estimate for the crowd's size.

"The people want the implementation of God's law," chanted flag-waving demonstrators, many bussed in from the countryside.

Tens of thousands of Egyptians protested against Mursi on Friday, chanting: "The people want to bring down the regime," echoing a trademark slogan of the revolts against Arab leaders.

Rival demonstrators threw stones after dark in the northern city of Alexandria and a town in the Nile Delta. Similar clashes erupted again briefly in Alexandria on Saturday, state TV said.

Mohamed Noshi, 23, a pharmacist from Mansoura, said he had joined the rally in Cairo to support Mursi and his decree. "Those in Tahrir don't represent everyone. Most people support Mursi and aren't against the decree," he said.

Egypt cannot hold a new parliamentary election until a new constitution is passed. The country has been without an elected legislature since the Supreme Constitutional Court ordered the dissolution of the Islamist-dominated lower house in June.

The court is due to meet on Sunday to discuss the legality of parliament's upper house.

"We want stability. Every time, the constitutional court tears down institutions we elect," said Yasser Taha, a 30-year-old demonstrator at the Islamist rally in Cairo.

(Additional reporting by Marwa Awad, Yasmine Saleh and Tamim Elyan; Writing by Alistair Lyon and Tom Perry; Editing by Myra MacDonald and Jason Webb)

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Suicide bombers attack U.S. base in Afghanistan

JALALABAD, Afghanistan (Reuters) - Suicide attackers detonated bombs and fired rockets outside a major U.S. base in Afghanistan on Sunday, killing five people in a brazen operation that highlighted the country's security challenges ahead of the 2014 NATO combat troop pullout.

Local police officials said bodies in Afghan police and military uniforms were scattered around the entrance of the airfield in the eastern city of Jalalabad after a two-hour battle. A Taliban spokesman said the militant group had launched the 6 a.m. assault.

The Taliban, who have been fighting U.S.-led NATO and Afghan forces for more than a decade, sometimes dress in uniforms for attacks.

Two suicide bombers died after blowing themselves up in cars, said Nasir Ahmad Safi, a spokesman for the provincial government.

Seven other bombers were killed in the a gunbattle with Afghan and coalition forces. Three Afghan soldiers and two civilians also died, said Safi.

U.S. helicopters circled overhead.

"There were multiple suicide bombers involved," said Major Martyn Crighton, a spokesman for the NATO-led International Security Assistance Force (ISAF).

Several coalition troops were wounded, he said.

The United States and Afghan government are scrambling to stabilize Afghanistan before most NATO combat troops withdraw at the end of 2014 and hand over security to Afghan forces.

Some Afghans doubt government security forces will be able to defend the country against any Taliban attempts to seize power again after foreign troops withdraw. There are also growing fears that a civil war will erupt.

President Hamid Karzai's government say Afghan security forces have made good progress.

Afghanistan's defense ministry spokesman said there were rocket attacks at the Jalalabad base followed by suicide bombings.

In a text message, Taliban spokesman Zabihullah Mujahid said : "This morning at 6 a.m. a number of our devotees attacked the major U.S. Base in Jalalabad city and so far have brought heavy casualties to the enemy."

In February, a suicide car bomber killed nine people at the base, almost exclusively used by NATO and the U.S. military.

(Additional reporting by Martin Petty in KABUL; Writing by Michael Georgy; Editing by Ron Popeski)

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North Korea plans new rocket launch as leader asserts power

SEOUL (Reuters) - North Korea said it would carry out its second rocket launch of 2012 as its youthful leader Kim Jong-un flexes his muscles a year after his father's death, in a move that South Korea and the United States swiftly condemned as a provocation.

North Korea's state news agency announced the decision to launch another space satellite on Saturday, just a day after Kim met a senior delegation from China's Communist Party in the North Korean capital of Pyongyang.

China, under new leadership, is North Korea's only major political backer and has continually urged peace on the Korean peninsula, where the North and South remain technically at war after an armistice, rather than a peace treaty, ended the 1950-53 conflict.

China's Foreign Ministry said it was deeply concerned by the move, but urged calm.

"North Korea has a right to the peaceful use of space, but this right has been restricted by U.N. Security Council resolutions. (China) hopes all sides can do more to benefit peace and stability on the peninsula, and hopes all sides handle it calmly to avoid the situation escalating," ministry spokesman Qin Gang said in a statement.

In Washington, U.S. State Department spokeswoman Victoria Nuland condemned the launch plan as a provocative threat to the Asia-Pacific region that would violate United Nations resolutions imposed on Pyongyang after past missile tests.

"A North Korean 'satellite' launch would be a highly provocative act that threatens peace and security in the region," she said in a written statement.

North Korea has notified its neighbors of the proposed flight path, an unnamed South Korean official told Yonhap news agency on Sunday, saying that it would take a similar path to a failed rocket launch in April this year.

That was supposed to take the rocket over seas separating China and the Korean peninsula where the first stage of the rocket would drop into the sea, then to pass over Okinawa. The second stage was to fall in seas off the Philippines.

Pentagon spokesman George Little said, "North Korea must abide by its international obligations under U.N. Security Council resolutions that clearly articulate what it can and cannot do with respect to missile technologies."

Seoul's foreign ministry called the move a "grave provocation." Japan's Kyodo news agency said Prime Minister Yoshihiko Noda had ordered ministries to be on alert for the launch.

"North Korea wants to tell China that it is an independent state by staging the rocket launch and it wants to see if the United States will drop its hostile policies," said Chang Yong-seok, a senior researcher at the Institute for Peace Affairs at Seoul National University.

North Korea is banned from conducting missile or nuclear-related activities under U.N. resolutions imposed after earlier nuclear and missile tests. The country says its rockets are used to put satellites into orbit for peaceful purposes, but that assertion is not widely accepted outside of Pyongyang.

Washington and Seoul believe that the impoverished North is testing long-range missile technology with the aim of developing an intercontinental ballistic missile capable of carrying a nuclear warhead.

Pyongyang's threats are aimed, in part, at winning concessions and aid from Washington, analysts say.

POLITICS AND ANNIVERSARIES

The failed April rocket launch took place to celebrate the 100th anniversary of the birth of North Korea founder Kim Il Sung and the latest test will take place close to the December 17 date of the death of former leader Kim Jong-il.

It will also come as South Korea gears up for a December 19 presidential election in a vote that pits a supporter of closer engagement with Pyongyang against the daughter of South Korean dictator Park Chung-hee.

The April test was condemned by the United Nations, although taking action against the North is hard as China refuses to endorse further sanctions against Pyongyang.

North Korea is already one of the most heavily sanctioned states on earth thanks to its nuclear program.

Pyongyang has few tools to pressure the outside world to take it seriously due to its diplomatic isolation and its puny economy.

The state that Kim Jong-un inherited last December after the death of his father boasts a 1.2 million-member military, but its population of 23 million, many malnourished, supports an economy worth just $40 billion annually in purchasing power parity terms, according to the U.S. Central Intelligence Agency.

"The North's calculation may be that they have little to lose by going ahead with it at this point," said Baek Seung-joo of the Korea Institute for Defense Analyses in Seoul.

Baek said the test planned for December would likely be no more successful in launching a satellite than the April one that crashed into the sea between China and North Korea after flying just 120 km (75 miles).

"Kim Jong-un may be taking a big gamble trying to come back from the humiliating failure in April and in the process trying to raise the morale for the military," Baek said.

North Korea's space agency said on Saturday that it had worked on "improving the reliability and precision of the satellite and carrier rocket" since April's launch.

(Additional reporting by Jack Kim, Jumin Park and Sung-won Shim in SEOUL, John Ruwitch in SHANGHAI, Ben Blanchard and Niu Shuping in BEIJING and Andrew Quinn, Paul Eckert and David Alexander in WASHINGTON; Editing by Ron Popeski, Doina Chiacu and Daniel Magnowski)

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Israel withholds Palestinian funds after U.N. vote

JERUSALEM (Reuters) - Israel said on Sunday it was withholding this month's transfer of tax revenues to the Palestinian Authority, after the United Nations' de facto recognition of a Palestinian state.

Under interim peace deals, which Israel says the Palestinians violated by unilaterally seeking an upgrade of their status at the United Nations, it collects about $100 million a month in duties on behalf of the authority.

But, Israeli officials said, the authority owes about $200 million to the Israel Electric Corporation, and that money will now be deducted from the tax transfers.

The cash-strapped authority, which exercises limited self-rule in the occupied West Bank, largely depends on the tax money to pay civil servants' salaries. Yasser Abed Rabbo, a senior Palestinian official, said Israel was guilty of "piracy and theft" by refusing to hand over the funds.

Israel has previously frozen payments to the body during times of heightened security and diplomatic tensions, provoking strong international criticism, such as when the U.N. cultural body UNESCO granted the Palestinians full membership a year ago.

"I do not intend this month to transfer the funds to the Palestinians. In the coming period I intend to use the money to deduct debts the Palestinian Authority owes to the Israel Electric Corporation and other bodies," Finance Minister Yuval Steinitz said on Israel Radio.

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 upgrading the Palestinians' observer status at the U.N. to "non-member state", like the Vatican, from "entity".

Hours after the U.N. vote, Israel said it was authorizing 3,000 new settler homes in the West Bank and East Jerusalem and expediting planning work for thousands more dwellings in a geographically sensitive area close to Jerusalem, which critics said would kill off Palestinian hopes of a viable state.

The United States said the expansion plan, which also drew strong European criticism, was counterproductive to the resumption of Israeli-Palestinian peace talks frozen since 2010.

(Reporting by Maayan Lubell; Writing by Jeffrey Heller; Editing by Pravin Char)

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Palestinian dies after Israeli troops fire at Gaza border: medics

GAZA (Reuters) - One of six Palestinians shot and wounded by Israeli troops on Friday while protesting at the Gaza Strip boundary fence died on Saturday, hospital officials said.

The fortified fence and a 300-metre-deep zone on the Palestinian side - on which Israel has regularly fired since 2009 with the declared aim of keeping gunmen and infiltrators away from the border - have been a testing ground for the November 21 truce that ended an eight-day surge in Gaza fighting.

Gaza's Hamas government has said the Egyptian-brokered ceasefire would put an end to the Israeli no-go zone, allowing Palestinian farmers back to their land there. Israel has said it would back off if Palestinians did not threaten to strike across the boundary.

Asked about Friday's shootings near the southern town of Rafah, an Israeli military spokeswoman said Palestinians had come up to the fence to vandalize it. Soldiers warned them away, and when that did not deter them, shot at their legs, she said.

Palestinians described the incident as a demonstration, saying that six people were wounded by the Israeli gunfire. One of them, a 21-year-old man, died on Saturday, hospital officials in Gaza said.

Islamist Hamas remains hostile to the Jewish state but has on at least one occasion sent police to evacuate such protests since the ceasefire, saying it sought both to shore up the truce and prevent Palestinian casualties.

(Writing by Dan Williams and Nidal al-Mughrabi; Editing by Pravin Char)

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North Korea plans second rocket launch in December

SEOUL (Reuters) - North Korea is to carry out its second rocket launch this year in December as South Korea holds its presidential election in a move that will likely trigger diplomatic tensions between the two Koreas and censure from the United States and Japan.

State news agency KCNA said on Saturday that the launch of a rocket carrying a satellite would take place between December 10 and December 22.

North Korea says its launches are for peaceful purposes, although Washington and Seoul believe the isolated, impoverished state is testing long-range missile technology with the aim of developing an intercontinental ballistic missile capable of carrying a nuclear warhead.

North Korea undertook a similar launch in April that was aborted a few minutes into its mission. The North is banned from conducting missile or nuclear-related activities under United Nations resolutions.

The coming launch will take place around the time of South Korea's presidential polls on December 19 and close to the first anniversary of the death of former leader Kim Jong-il.

Kim died on December 17 last year and was succeeded by his son, Kim Jong-un.

(Reporting by David Chance and John Ruwitch; Editing by Ron Popeski)

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Islamists rally behind Mursi as Egypt's rifts widen

CAIRO (Reuters) - Islamist crowds demonstrated in Cairo on Saturday in support of President Mohamed Mursi, who is racing through a constitution to try to defuse opposition fury over his newly expanded powers.

Many thousands assembled outside Cairo University, waving Egyptian flags and green Islamist emblems to show their backing for the president and the constitution he is promoting.

Mursi was expected later in the day to set a date for a referendum on the constitution hastily approved by an Islamist-dominated drafting assembly on Friday after a 19-hour session.

Mohamed Ibrahim, a hardline Salafi Islamist scholar and a member of the constituent assembly, said secular-minded Egyptians had been in a losing battle from the start.

"They will be sure of complete popular defeat today in a mass Egyptian protest that says 'no to the conspiratorial minority, no to destructive directions and yes for stability and sharia (Islamic law)'," he told Reuters.

Demonstrators, many of them bused in from the countryside, held pro-constitution banners. Some read "Islam is coming", "Yes to stability" and "No to corruption".

Tens of thousands of Egyptians had protested against Mursi on Friday and rival demonstrators threw stones after dark in Alexandria and the Nile Delta town of Al-Mahalla Al-Kobra.

"The people want to bring down the regime," they chanted in Cairo's Tahrir Square, echoing the slogan that rang out there less than two years ago and brought down Hosni Mubarak.

Mursi plunged Egypt into a new crisis last week when he gave himself extensive powers and put his decisions beyond judicial challenge, saying this was a temporary measure to speed Egypt's democratic transition until the new constitution is in place.

His assertion of authority in a decree issued on November 22, a day after he won world praise for brokering a Gaza truce between Israel and the Palestinian Islamist Hamas movement, dismayed his opponents and widened divisions among Egypt's 83 million people.

Two people have been killed and hundreds wounded in protests by disparate opposition forces drawn together and re-energized by a decree they see as a dictatorial power grab.

Mursi has alienated many of the judges who must supervise the referendum. His decree nullified the ability of the courts, many of them staffed by Mubarak-era appointees, to strike down his measures, although says he respects judicial independence.

A source at the presidency said Mursi might rely on the minority of judges who support him to supervise the referendum.

Mursi, once a senior Muslim Brotherhood figure, has put his liberal, leftist, Christian and other opponents in a bind. If they boycott the referendum, the constitution would pass anyway.

If they secured a "no" vote to defeat the draft, the president could retain the powers he has unilaterally assumed.

And Egypt's quest to replace the basic law that underpinned Mubarak's 30 years of army-backed one-man rule would also return to square one, creating more uncertainty in a nation in dire economic straits and seeking a $4.8 billion loan from the IMF.

"NO PLACE FOR DICTATORSHIP"

Mursi's well-organized Muslim Brotherhood and its ultra-orthodox Salafi allies, however, are convinced they can win the referendum by mobilizing their own supporters and the millions of Egyptians weary of political turmoil and disruption.

"There is no place for dictatorship," the president said on Thursday while the constituent assembly was still voting on a constitution which Islamists say enshrines Egypt's new freedoms.

Human rights groups have voiced misgivings, especially about articles related to women's rights and freedom of speech.

The text limits the president to two four-year terms, requires him to secure parliamentary approval for his choice of prime minister, and introduces a degree of civilian oversight over the military - though not enough for critics.

The draft constitution also contains vague, Islamist-flavored language that its opponents say could be used to whittle away human rights and stifle criticism.

For example, it forbids blasphemy and "insults to any person", does not explicitly uphold women's rights and demands respect for "religion, traditions and family values".

The draft injects new Islamic references into Egypt's system of government but retains the previous constitution's reference to "the principles of sharia" as the main source of legislation.

"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 Tahrir and member of a party set up by opposition figure Mohamed ElBaradei.

Several independent newspapers said they would not publish on Tuesday in protest. One of the papers also said three private satellite channels would halt broadcasts on Wednesday.

Egypt cannot hold a new parliamentary election until a new constitution is passed. The country has been without an elected legislature since a court ordered the dissolution of the Islamist-dominated lower house in June.

(Additional reporting by Marwa Awad; Editing by Louise Ireland)

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