UK ups offer for Mali, African anti-Islamist effort

LONDON (Reuters) - Britain on Tuesday boosted its offer of aid to help France fight Islamist rebels in Mali, and pledged troops to help other African governments in the region counter a rising tide of Islamist radicalism.

Up to 240 British troops could be deployed as part of two missions to train African troops, 40 in Mali as part of a European Union mission, and a further 200 in anglophone West African countries, Prime Minister David Cameron's spokesman said.

At least 70 more British personnel could be involved in logistical and support missions. "It is an African operation in support of the Malian government and we think that the right way to do this is for regionally-led forces to take the lead," the spokesman said, adding Britons would take no combat role.

The increased logistical support for France includes a ferry to transport troops and equipment to Africa, and allowing France and its allies to use Britain for air-to-air refueling.

Britain has also offered to set up a "Combined Joint Logistics Headquarters" in Mali, but France believes such a facility is not needed, Cameron's spokesman said, adding it would be kept under review.

A decision on whether to send up to 200 British soldiers on West African training missions is expected to be taken soon after African Union-led discussions in Addis Ababa, while talks are taking place in Brussels over troops for Mali.

(Reporting by Mohammed Abbas; Editing by Andrew Osborn)

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Passenger plane crash kills 21 in Kazakhstan

KYZYL TU, Kazakhstan (Reuters) - A passenger plane crashed in thick fog near Kazakhstan's commercial capital Almaty on Tuesday and broke into pieces when it hit the ground, killing all 21 people on board.

After several hours, rescue teams recovered the plane's flight recorder, the central communications service for Kazakhstan's president said on its Twitter page.

A list published by the prosecutor-general's office showed there had been 16 passengers and five crew members on board.

The Canadian-built Bombardier Challenger CRJ-200 belonged to private Kazakh airline SCAT. It came down near the village of Kyzyl Tu about 5 km (3 miles) from Almaty's airport.

"There was no fire, no explosion. The plane just plunged to the earth," Yuri Ilyin, deputy head of the city's emergencies department, told Reuters near the scene.

Parts of the plane could be seen in the thick snow. Tractors and other heavy vehicles were being used cut paths through the snow to the wreckage but journalists were kept at a distance from the crash site.

It was the second fatal plane crash in the former Soviet republic in just a over a month.

Visibility at Kyzyl Tu was only about 20 to 30 meters (yards), and much of the area around Almaty was veiled in fog when the plane crashed at around 1 p.m. (2 a.m. ET).

"The preliminary cause of the accident is bad weather," Deputy Almaty Mayor Maulen Mukashev told reporters. "Not a single part of the plane was left intact after it came down."

The plane had been on its way from the city of Kokshetau in northern Kazakhstan to Almaty in the southeast, Mukashev said.

SCAT, which has been operating since 1997, runs an extensive domestic service and has some international flights.

Alexander Gordeyev, deputy head of Almaty's airport, said the weather had been bad but planes were being allowed to land.

A military transport airplane crashed in bad weather on December 25 near the southern Kazakh city of Shymkent, killing all 27 on board. Prosecutors have said a combination of technical problems, bad weather and human error caused that accident.

(Additional reporting and writing by Dmitry Solovyov; Editing by Louise Ireland and Timothy Heritage)

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Sixty-five found executed in Syria's Aleppo: activists

BEIRUT (Reuters) - At least 65 people, apparently shot in the head, were found dead with their hands bound in a district of the northern Syrian city of Aleppo on Tuesday, activists said.

The British-based Syrian Observatory for Human Rights, which says it provides objective information about casualties on both sides of Syria's war from a network of monitors, said the death toll could rise as high as 80. It was not clear who had carried out the killings.

Opposition activists posted a video of a man filming at least 51 muddied male bodies alongside what they said was the Queiq River in the rebel-held Bustan al-Qasr neighborhood of Aleppo.

The bodies had gunshot wounds to their heads, and their hands were bound. Blood was seeping from their heads and some of them appeared to be young, possibly teenagers, and dressed in jeans, shirts and sneakers.

The Queiq River rises in Turkey and travels through government-held districts of Aleppo before it reaches Bustan al-Qasr.

"They were killed only because they are Muslims," said a bearded man in another video said to have been filmed in central Bustan al-Qasr after the bodies were removed from the river. A pickup truck with a pile of corpses was parked behind him.

It is hard for Reuters to verify such reports from inside Syria because of restrictions on independent media.

Government forces and rebels in Syria have both been accused by human rights groups of carrying out summary executions in the 22-month-old conflict, which has claimed more than 60,000 lives.

Rebels pushed into Aleppo, Syria's most populous city, over the summer, but are stuck in a stalemate with government forces. The city is divided roughly in half between the two sides.

The revolt started as a peaceful protest movement against more than four decades of rule by President Bashar al-Assad and his family, but turned into an armed rebellion after a government crackdown.

More than 700,000 people have fled, the United Nations says.

REBELS FIGHT KURDS

In the eastern city of Deir al-Zor, insurgents including al Qaeda-linked Islamist fighters captured a security agency after days of heavy fighting, according to an activist video issued on Tuesday.

The fighters freed prisoners from the building, it added.

The video, posted online, showed men armed with assault rifles cheering as they stood outside a building that they said was a local branch of Syria's intelligence agency.

Some of the fighters carried a black flag with the Islamic declaration of faith and the name of the al-Nusra Front, which has ties to al Qaeda in neighboring Iraq. The video also showed tanks, which appeared to be damaged, and a room containing weapons.

The war has become heavily sectarian, with rebels who mostly come from the Sunni Muslim majority fighting an army whose top generals are mostly from Assad's Alawite sect, an offshoot of Shi'ite Islam. Assad has framed the revolt as a foreign-backed conspiracy and blames the West and Sunni Gulf states.

Fighting also took place in the northern town of Ras al-Ain, on the border with Turkey, between rebels and Kurdish militants, the Observatory said.

The insurgents have been battling fighters of the Kurdish People's Defence Units for about two weeks in the area, and scores of people have died in the violence.

(Reporting by Alexander Dziadosz and Oliver Holmes; Editing by Kevin Liffey)

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Israel boycotts U.N. rights scrutiny session

GENEVA (Reuters) - Israel boycotted a U.N. human rights forum on Tuesday where it was due to have its record reviewed, setting a precedent that concerns rights activists and many Western nations.

The president of the Human Rights Council, Poland's ambassador Remigiusz Henczel, noted the absence of the Israeli delegation and ordered the meeting suspended briefly to decide how to proceed.

He called it "an important issue and unprecedented situation", inviting comment by the council's 47 members as well as observer states.

Israel, which would be expected to face criticism for its dealings with the Palestinian territories that is says are to safeguard security, suspended relations with the council last May because of what it called an inherent bias against it.

The record of the Jewish state was due to be examined by the 47-member state forum as part of the Universal Periodic Review (UPR) process, the council's scrutiny of all U.N. member states. Israel's last review was in December 2008, when it attended.

"As the only recalcitrant state among 193, Israel's deliberate absence would sabotage the principle of universality," Peter Splinter, Geneva representative of Amnesty International to the U.N. in Geneva, said in a blog on Tuesday.

U.S. human rights ambassador Eileen Chamberlain Donahoe, speaking to reporters last week, said of the U.S. ally: "We have encouraged Israel to come to the UPR, to tell its story, to present its own narrative of its human rights situation. We think it is a good opportunity to do that."

(Reporting by Stephanie Nebehay; Editing by Alison Williams)

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Malian troops uncover rebel arms caches in recaptured towns

DOUENTZA/GAO, Mali (Reuters) - French-backed Malian troops searched house-to-house in Gao and Timbuktu on Tuesday, uncovering arms and explosives abandoned by Islamist fighters, and France said it would look to hand over longer-term security operations to African troops.

French and Malian troops retook the two Saharan towns in northern Mali virtually unopposed at the weekend after an 18-day French-led offensive that has pushed back the al Qaeda-allied militants into hideouts in the deserts and mountains.

Malian government soldiers were combing through the Niger River towns and their neighborhoods of dusty alleys and mud-brick homes. In Gao, they arrested at least five suspected Islamist rebels and sympathizers, turned over by local people, and uncovered caches of weapons and counterfeit money.

Residents reported some looting of shops in Timbuktu owned by Arabs and Tuaregs suspected of having helped the Islamists who had occupied the world-famous seat of Islamic learning, a UNESCO World Heritage site, since last year.

Fleeing Islamist fighters torched a Timbuktu library holding priceless ancient manuscripts, damaging many.

Malian army sources told Reuters pockets of armed Islamist fighters, on foot to avoid French air strikes, were still hiding in the savannah and deserts around Gao and Timbuktu and near main roads leading to them, parts of which were still unsafe.

The West African country has been in political limbo since a March 2012 coup triggered the rebel takeover of the north.

France, which has sent around 3,000 troops to Mali at the request of its government, says it wants to pass the baton of longer-term security operations there to a larger U.N.-backed African force, known as AFISMA, being deployed in the country.

The French, anxious not to get bogged down in a messy counter-insurgency war in their former Sahel colony, have made clear that while the first phase of liberating the biggest north Mali towns may be over, a more difficult challenge to flush the Islamist desert insurgents from their hideouts still remains.

"We will stay as long as necessary. We want to make sure there will be a good handover between France and AFISMA. There is no question of us getting stuck in the mud," French Foreign Minister Laurent Fabius said in Ethiopia's capital Addis Ababa.

ELECTIONS IN JULY

Also in Addis Ababa, Malian interim President Dioncounda Traore announced his government would aim to organize "credible" elections for July 31, a demand made by major western backers of the anti-rebel operation.

Fabius was attending a meeting of international donors there who were asked to foot the bill for the African intervention force for Mali, which Ivory Coast President Alassane Ouattara said would exceed 8,000 troops and cost nearly $1 billion.

The United States and European governments are backing the French and African military operation against the Islamist rebels in northern Mali with logistical, airlift and intelligence support, but they are not sending combat troops.

They see the intervention as vital to root out a hotbed of al Qaeda-allied insurgency in West Africa that could threaten African governments and western interests from Mauritania to oil-producing Nigeria, as well as strike directly in Europe.

U.S. DRONES FOR NIGER

Britain boosted an offer of aid to help France's effort in Mali and pledged troops to assist other African governments in the region. Up to 240 British troops could be deployed as part of two missions to train African troops.

The United States also extended deployment of surveillance drones that could track down rebel bases and columns in the Sahara desert. Mali's neighbor Niger on Tuesday gave permission for U.S. drones to fly from its territory.

The bulk of the planned African intervention force for Mali - to be comprised mostly of West African troops - is still struggling to get into the country, hampered by shortages of kit and supplies and lack of airlift capacity to fly the troops in.

Around 2,000 are already on the ground. Burkina Faso, Benin, Nigeria, Senegal, Togo, Niger and Chad are providing soldiers for the AFISMA force. Burundi and other nations have also pledged to contribute.

Hundreds of soldiers from Chad and Niger with desert warfare experience have crossed into Mali to join the French and Malian operations against the retreating Islamist rebels, who have pulled back to the rugged northeast mountains of the Adrar des Ifoghas range on the border with Algeria.

The commander of the Chadian forces in Mali, Abdu Aziz Hassan Adam, told Reuters in Gao his forces were ready to "sweep the terrorists out of the north of Mali". "They are a threat for all the countries of the world," he added.

TUAREGS HOLD KIDAL

Besides Gao and Timbuktu, another major Malian Saharan town, Kidal, had also been in Islamist insurgent hands but MNLA Tuareg rebels said on Monday they had taken control there after the Islamists left.

The MNLA's Tuareg leaders, whose pro-independence rebellion that seized the northern half of Mali last year was subsequently hijacked by Islamist radicals, said their desert fighters were ready to join the French-led campaign against "terrorist organizations" - a reference to al Qaeda and its allies.

But they also asked for direct negotiations with the Malian government about their autonomy demands.

Chadian troops were expected to deploy up to Kidal in the northeast to secure it, officials in Niger said.

Besides the funds being pledged at the Addis Ababa donors' conference for the African force - which seem likely to fall short of the nearly $1 billion requirement estimated by African leaders - the International Monetary Fund has also approved a rapid loan of $18.4 million for the Malian government.

(Additional reporting by Aaron Maasho in Addis Ababa, Laurent Prieur in Nouakchott, Mohammed Abbas in London, Abdoulaye Massalatchi in Niamey, and Lucia Mutikani and Anna Yukhananov in Washington; Writing by Pascal Fletcher; Editing by Daniel Flynn and Pravin Char)

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Kurdish militants set for Turkey ceasefire in February: paper

ISTANBUL (Reuters) - Kurdish militants will halt hostilities with Turkey in February according to the timetable of a fledgling peace process aimed at ending 28 years of insurgency, a report in a mainstream newspaper said on Tuesday.

Turkish intelligence officials began talks with jailed Kurdistan Workers Party (PKK) leader Abdullah Ocalan in late 2012 and preliminary talks have also been held with PKK members in northern Iraq, where most of the group's several thousand militants are based, it said.

More than 40,000 people have been killed in fighting since the rebels took up arms in 1984 with the aim of carving out a Kurdish state in southeastern Turkey. The PKK, designated a terrorist group by Ankara, the United States and the European Union, has since moderated its goal to one of autonomy.

The conflict is the chief domestic problem facing Prime Minister Tayyip Erdogan after 10 years in power.

"According to the timetable on the table, the PKK will announce its decision to halt hostilities in February right after an official call by Abdullah Ocalan," the paper said.

As an initial confidence-building step, around 100 PKK fighters will hand in their weapons and leave Turkey, the Hurriyet daily said.

Hurriyet, which is regarded as authoritative on security-related matters, did not identify its sources and there was no immediate comment from Turkish officials.

When asked about the report, PKK spokesman Roj Welat said the group had not as yet declared any ceasefire.

"The PKK officially has made no such declaration for the moment," Welat told Reuters by telephone. "There is no such information in our hands."

The militants have announced unilateral ceasefires in the past, but these have been ignored by Turkish security forces.

Under a framework discussed with Ocalan, all PKK fighters will eventually disarm after the withdrawal from Turkey and in return the government will improve the rights of Kurds, who make up some 20 percent of Turkey's population of 76 million.

As part of those reforms, Turkey's parliament last week passed a law allowing defendants to use Kurdish in court in a move seen aimed at breaking a deadlock in the trials of hundreds accused of links to the PKK. [ID:nL6N0AU2VN]

NORTHERN IRAQ TALKS PLANNED

Only Erdogan and a few officials are believed to have first-hand knowledge of the peace framework. They have not disclosed details of the plan, nor have they denied reports on it by media close to the government.

With next year's local and presidential elections in mind, Erdogan has limited time and is keen to keep the process under wraps due to fears of a nationalist backlash against talks with a group reviled by most Turks.

A more senior delegation from the MIT national intelligence agency, possibly including its head - Hakan Fidan, was due to travel to Arbil in northern Iraq for more talks with the PKK in the coming week, the liberal Radikal daily reported.

Among those expected to take part in the meeting was Sabri Ok, a senior figure in the PKK who participated in previous peace talks with Fidan in Oslo. Those negotiations unraveled in 2011 when recordings of them were leaked to the media.

The planned withdrawal of PKK fighters from Turkish territory is expected to be monitored by representatives of non-governmental organizations.

The militants previously withdrew from Turkish territory on Ocalan's orders after his capture in 1999, as part of moves towards peace. However, several hundred militants are estimated to have been killed by security forces during that withdrawal.

In an apparent bid to ease PKK concerns, Erdogan gave his word this month that the same thing would not happen again.

(Additional reporting by Patrick Markey in Baghdad; Editing by Louise Ireland and Jonathon Burch)

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Debris of F-16 missing in Italy believed found, search focuses on spot

RAVENNA, Italy (Reuters) - Italian Coast Guard divers searching for a missing American F-16 and its pilot were focusing on Tuesday on waters where a fishing boat found debris believed to belong to the jet, a Coast Guard official said.

The debris, including fragments of carbon steel, was found floating in the northern Adriatic overnight, Rear Admiral Francesco Saverio Ferrara said. The U.S. Air Force said in a statement on Tuesday it was thought to be wreckage from the missing aircraft.

"We hope to find out more during the day so we can have a more complete picture of what happened," Ferrara said.

The missing jet took off from Aviano Air Base on a training exercise on Monday evening, and the control tower lost contact with the plane at about 2 p.m. ET.

Search-and-rescue operations are being conducted by sea from the port of Ravenna, and Air Force planes from Aviano are spearheading the search from above, Ferrara said.

Snow and rain hampered the operation overnight, and on Tuesday fog was hampering visibility, the Coast Guard said.

Aviano is the base for the U.S. Air Force's 31st Fighter Wing. The Air Force said a board of officers would investigate the incident.

"Wing leadership remains hopeful that we will safely rescue our pilot," an Air Force statement said.

(Reporting by Giorgio Benvenuti; Writing by Steve Scherer in Rome; Editing by Sonya Hepinstall)

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Hundreds of Qaeda-linked militants reinforce south Yemen bastion

SANAA (Reuters) - Hundreds of al Qaeda-linked militants arrived in southern Yemen on Tuesday to reinforce Islamist fighters facing a major government offensive following the breakdown of talks to free three Western hostages, an official and residents said.

Air strikes against militant targets in the al Qaeda stronghold of al-Manaseh and ambushes by the Islamist fighters after Monday's army assault, killed at least six insurgents and 14 soldiers, including 11 killed by a suicide bomber.

More than 2,500 people had fled Manaseh, and were housed in schools in nearby villages and towns, the official said.

About 8,000 soldiers took part in the offensive on al Qaeda in the Arabian Peninsula's (AQAP) bastion in al-Bayda province, south of the capital Sanaa, a local official told Reuters.

Tackling lawlessness in the impoverished Arabian Peninsula state, which flanks the world's biggest oil exporter Saudi Arabia, is an international priority. The United States views Yemen as a front line in its struggle against al Qaeda.

The Islamist reinforcements were mostly from Abyan province, scene of heavy fighting in May 2012 that drove AQAP fighters from several southern towns, the official and local residents said.

"I saw dozens of bearded men, not locals, carrying guns," a resident who would only identify himself as Abbad said of the Islamist militants. "People say they are mujahideen (holy fighters) coming from Abyan."

A Finnish couple and an Austrian man, who were studying Arabic in Yemen, were snatched last month by tribesmen in the capital Sanaa. They were later sold to al Qaeda members, and taken to al-Bayda, a Yemeni official told Reuters this month.

The assault on Manaseh began a day after representatives of the 15 countries on the U.N. Security Council flew to Yemen in a show of support for a U.S.-backed power transfer deal in danger of faltering and plunging the country further into chaos.

Militants linked to AQAP, which U.S. officials believe is one of the most dangerous and active branches of the global network, were emboldened by widespread chaos in Yemen after an uprising in 2011 against former President Ali Abdullah Saleh.

Yemen's armed forces made their last major assault on AQAP in May 2011, a few months after Saleh stepped down under a Gulf-brokered power transfer deal.

There have been dozens of killings of security and military officials by suspected al Qaeda gunmen in the past year, suggesting AQAP remains resilient despite increased U.S. drone strikes and an onslaught by government forces.

Yemen has struggled to restore normality since President Abd-Rabbu Mansour Hadi was elected in February 2012 following a year of protests that forced his predecessor Ali Abdullah Saleh to step down after 33 years in power.

(Editing by Louise Ireland and Sami Aboudi)

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Army warns unrest pushing Egypt to the brink

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

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

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

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

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

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

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

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

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

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

DEEPLY POLARISED

The 58-year-old previously headed military intelligence and studied at the U.S. Army War College. Diplomats say he is well known to the United States, which donates $1.3 billion in military aid each year, helping reassure Washington that the last year's changes in the top brass would not upset ties.

One of Sisi's closest and longest serving associates, General Mohamed el-Assar, an assistant defense minister, is now in charge of the military's relations with the United States.

Almost seven months after Mursi took office, Egyptian politics have become even more deeply polarized.

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

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

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

Residents in the three canal cities had taken to the streets in protest at a nightly curfew now in place there. The president's spokesman said on Tuesday that the 30-day state of emergency could be shortened, depending on circumstances.

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

The police have been facing "unprecedented attacks accompanied by the appearance of groups that pursue violence and whose members possess different types of weapons", the state news agency reported, quoting the Interior Ministry spokesman.

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

WARY MILITARY

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

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

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

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

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

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

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

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

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

The presidency said a committee would be formed to look at changes to the constitution, but it ruled out changing the government before the parliamentary election.

Mursi's pushing through last month of a new constitution which critics see as too Islamic remains a bone of contention.

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

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Greens' push for conservative vote gives Merkel headache

BERLIN (Reuters) - Germany's Greens are on a roll after a big jump in their support in a regional election this month confirmed the growing mainstream appeal of a party once seen as a fringe leftist movement but which now poses a challenge to Angela Merkel.

Worryingly for the conservative Chancellor ahead of a federal election in September, support for the Greens is spreading from the cities to rural areas once dominated by her Christian Democrats.

In Lower Saxony on Jan 20. the Greens won 14 percent of the vote - up from 8 percent in 2008 - by focusing on local concerns about factory farming, nuclear waste and social issues.

Today's Greens - Europe's most successful ecological party - are a far cry from the muesli-munching, sandal-wearing peaceniks of popular mythology.

Long popular among high-earning urban professionals with a social conscience, they are now casting their net more widely by stressing 'conservative values' such as fiscal responsibility.

"We targeted not just our core supporters in Lower Saxony but all those who want real change, including in the rural areas," said Renate Kuenast, a Green leader in the German parliament.

"We have changed over the past decades from a party focused on particular groups, like the peace movement or human rights, because the country has changed and we had to change, to widen our appeal," said the former farm minister.

Their success in Lower Saxony, a sprawling industrial and agricultural hub, has reignited talk of the Greens sharing power with Merkel's conservatives in the autumn, though party leaders play this down for fear of upsetting core supporters.

The Greens won votes in Lower Saxony from all main parties and from people who had not voted in the past.

"We drew support from a very varied array of voters in Lower Saxony - rather more women than men, also from young people, first-time voters and the unemployed," said Katrin Goering-Eckardt, a newly elected Green leader.

KEEPING PROMISES

Goering-Eckardt, also a leader of the Protestant church, uses sober rhetoric that appeals to conservatives.

"Voters can expect us not to make promises that we cannot keep," she told Reuters in an interview.

In what Spiegel magazine dubbed a "Green revolution" in Lower Saxony, the Greens will join a coalition with the Social Democrats (SPD) to replace Merkel's Christian Democrats (CDU) - a feat they hope to repeat at the national level in the autumn.

It is not the first election upset the Greens have caused the CDU. In 2011, they took control of Baden-Wuerttemberg, a conservative bastion in southwest Germany. They then extended their power when a Green became mayor of the state capital Stuttgart, home to some of Germany's biggest companies.

The Greens have also governed in coalition with the CDU - in Hamburg from 2008 to 2011. More Germans are now asking whether that could happen at the federal level too, especially when the SPD - the Greens' preferred allies - are being dragged down by their unpopular candidate for chancellor, Peer Steinbrueck.

It is an option Merkel may have to consider if her current Free Democrat (FDP) coalition partners miss the 5 percent barrier for entering the Bundestag, the lower house of parliament, in September's vote.

Conservatives and Greens share a belief in fiscal rectitude, European integration and conservation. Merkel took a pirouette towards the Greens by deciding to shut down Germany's nuclear power plants after the Fukushima disaster in Japan and embrace renewable green energy.

John Kornblum, a former U.S. ambassador to Germany, recalls a meeting where senior Greens lawmaker Cem Oezdemir was told "he sounded just like Angela Merkel, to which he replied that he did not disagree with Merkel on many things".

"The old adage was that German chief executives voted for the CDU and their wives and kids voted Green," said Kornblum.

SAME RESTAURANTS, DIFFERENT VALUES

"Supporters of the Greens and the conservatives go to the same restaurants, they often have the same style of life, but they go to different rallies and have different values," said politics professor Gero Neugebauer of Berlin's Free University.

Like most analysts, he believes Merkel is more likely to form a coalition with the SPD - like the one she led in 2005-09 - but said she might prefer the Greens because, as a smaller party, they would be easier to dominate.

"The Greens could be destroyed if they go into coalition with the conservatives," he warned.

Both the SPD and now the FDP have seen their fortunes suffer after entering a Merkel-led coalition. That is precisely what makes many Green voters nervous.

"I fear the Greens would lose their identity if they joined a coalition with Merkel ... I don't know if I could vote for the Greens after that," said Berlin-based neurologist Fabian Klostermann, 44, a lifelong Green supporter.

Leaders like Goering-Eckardt are very aware of such fears.

"We are a progressive, left-oriented party," said Goering-Eckardt, whose East German, Protestant background leads to comparisons with Merkel, a pastor's daughter raised in the east.

In contrast to the CDU, the Greens back same-sex marriage and legal quotas for women in the workplace and oppose plans to pay families who choose to keep toddlers at home rather than sending them to nursery, calling it socially reactionary.

Goering-Eckardt dismissed suggestions that Merkel's renewable energy push could hurt the Greens nationally.

"It is clear in the end that people vote for the original article and that means us. It is a question of credibility."

Some Green supporters were philosophical about striking a Faustian bargain with the CDU, their longtime arch foe.

"It is wonderful that other parties are becoming greener," said actress Barbara Becker. "I just hope the Greens don't become too grey and boring in the process."

(Additional reporting by Hans-Edzard Busemann; Editing by Stephen Brown)

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South Africa's ANC berates bank for "Arab Spring" ad campaign

JOHANNESBURG (Reuters) - A major South African bank has become embroiled in a row with the ruling African National Congress (ANC) over an advertising campaign in which youngsters voice concerns about the faltering progress of Nelson Mandela's self-styled 'Rainbow Nation'.

The "You Can Help" (www.youcanhelp.co.za) campaign by First National Bank (FNB), the high street arm of financial services group FirstRand, was billed as a bid to reinvigorate the push to build a non-racial democracy from the ashes of apartheid.

Instead, it elicited a furious response from the ANC, exposing a thinness of skin that belies the party's 19 years in power and virtually impregnable two-thirds majority in parliament.

The party's youth wing accused the bank of treason and a "lame attempt to recreate an Arab Spring of some sort in South Africa", while its Women's League branded the TV advert - which did not name the ANC - "offensive and politically biased".

In a statement, the party's chief spokesman dismissed the ad as "disrespectful to elders" and said the ANC would "engage" with FNB bosses, raising fears about freedom of expression in Africa's biggest economy.

The advert, which first aired last week, features a speech by a 17-year-old girl at a school in the sprawling Johannesburg township of Soweto in which she expresses concerns about crime, corruption and a shambolic public education system.

The issues are all long-running political topics that the ANC has acknowledged are problems, but the ferocity of its reaction suggests concerns about a general election due in April next year.

While there is virtually no chance of the party that helped overturn decades of white-minority rule losing, analysts say it is worried about its popularity among the so-called "Born Frees" - young South Africans who have no memory of apartheid.

With millions of blacks seeing little improvement in their lives despite strong economic growth since 1994, the ANC is also worried that 94-year-old Mandela's campaign pledge of a "Better life for all" is starting to ring hollow.

"Clearly the ANC is very sensitive about the possibility it may lose votes because of ineffective management of the country in some places and not delivering on promises of jobs and growth," said William Gumede, a political analyst at Johannesburg's Wits University.

"Although the party has been in power for such a long time, it still has its inferiority complexes," he added.

"FROM THE HEART"

FNB said it would not bow to pressure to pull the advert, which was based on interviews with 1,360 young South Africans speaking unscripted and "from the heart".

It denied having any political motive in releasing a separate summary of its interviews that did include the youngsters' often damning criticism of the ANC and its leadership.

In the commercial hub of Johannesburg - home to a quarter of South Africa's 52 million people - just 4 percent of youngsters expressed a positive view of the leadership of Jacob Zuma, who came to office in 2009.

Quotes released by FNB suggest first-time voters take a very dim view of the numerous scandals that have plagued Zuma's administration - the latest being a $27 million state-funded upgrade to his private house.

"The country is being overrun by poverty ... while Jacob Zuma is renovating his home," one university student from Zuma's home province of KwaZulu Natal was quoted as saying.

Nor are the youth the only ones losing patience with the 101-year-old liberation movement.

The crucial mining sector is in a mess, with platinum giant Anglo American Platinum looking to close two mines and lay off 14,000 workers after the worst industrial unrest since apartheid last year.

In April, Reuel Khoza, the chairman of FNB rival Nedbank, triggered a vitriolic response when he labelled ANC leaders a "strange breed" incapable of running a sophisticated emerging economy in the 21st century.

South Africa's churches then launched a blistering attack in December, accusing the ANC of moral decay the week before a five-yearly meeting at which it re-elected Zuma as party president with a thumping internal majority.

($1 = 8.8636 South African rand)

(Editing by Andrew Heavens)

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Syrian rebels clash with Kurds in northeast: activists

BEIRUT (Reuters) - At least 56 people have been killed in a week of fighting in northeast Syria between anti-government rebels and members of the long-oppressed Kurdish minority who have seized on the civil war to try to secure self-rule, activists said on Tuesday.

The British-based Syrian Observatory for Human Rights, which collates reports on Syria's violence from local activists, said on Tuesday that the anti-Damascus rebels were using tanks and mortars on Tuesday against Kurdish forces.

In a separate incident, it said at least 42 people including women and children had been killed when a car bomb targeting a pro-government militia went off on Monday evening in the town of Salamiyah, east of the central city of Hama.

With Arab rebels entangling government forces to the west and south, the Kurds, who make up around 10 percent of the population, have exploited the vacuum to set up the Kurdish schools and cultural centers long denied them under Baath party rule, as well as police and armed militias.

But they have remained at arm's length from the increasingly Islamist-dominated mostly Sunni Arab rebels, fearing that these would not honor the autonomy aspirations of a region that holds a significant part of Syria's estimated 2.5 billion barrels of crude oil reserves.

On Tuesday, fighters of the Kurdish People's Defence Units clashed with several rebel groups in the city of Ras al-Ain in Syria's northern Hasaka province, the Observatory said.

"The clashes erupted (last) Wednesday ... and (have) resulted in the deaths of at least 56 fighters," the group said.

The fighting is one of many sectarian or ethnic fault lines that have prevented the emergence of a single coherent movement to try to oust President Bashar al-Assad since insurgents took up arms after the government cracked down on peaceful protests in March 2011.

Since then, the conflict has become a full-scale civil war in which more than 60,000 people have been killed, 650,000 pushed to flee the country and well over a million made homeless within Syria.

A video posted online showed men and women gathering around a street strewn with rubble at what the Observatory said was the site of the blast in Salamiyah.

It said some of the wounded were in critical condition.

The state news agency SANA said the blast had been caused by a suicide bomber and that 25 people had been killed.

Reuters cannot verify such reports from inside Syria because the government severely limits access for independent media.

(Reporting by Alexander Dziadosz; Editing by Kevin Liffey)

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Chad troops move toward Niger's Mali border to face Islamists

NIAMEY/BAMAKO (Reuters) - An armored column of Chadian troops in Niger moved towards the Malian border on Tuesday, part of an African military force that is gradually deploying to support French operations against Islamist rebels in northern Mali.

A Reuters reporter witnessed the Chadian forces, who are experienced in desert operations, advancing north from the capital Niamey on the road to Ouallam, some 100 km (60 miles) from the border, where a company of Niger's troops are already stationed.

France, which launched air strikes in Mali 11 days ago to halt a surprise Islamist offensive toward the capital Bamako, has urged a swift deployment of the U.N.-mandated African force to back up its 2,150-strong ground forces already there.

Niger President Mahamadou Issoufou, who visited the troops at Ouallam military base, condemned the al Qaeda-linked Islamist alliance controlling Mali's vast desert north. An Imam, or Muslim cleric, said prayers for the troops.

"We are going to war. A war imposed on us by traffickers of all kinds, an unjust war, from which the peaceful citizens of northern Mali are suffering terribly," Issoufou told the forces.

"I am confident in your burning desire for victory."

France says its troops will remain in Mali until they have completely dislodged the Islamist fighters from the north, amid concerns that the militants could use the vast desert area to launch terrorist attacks on the West and on neighboring African countries.

Fears of this wider security threat from al Qaeda and its local allies in North and West Africa have increased sharply following a raid last week on a gas plant in Algeria by Islamist fighters. At least 37 foreign hostages were killed in the raid and its aftermath, when Algerian forces stormed the installation.

Niger's armed forces, which completed their training a month ago, are expected to advance toward the rebel-held north Malian city of Gao in collaboration with the Chadian troops. It was not clear when exactly they would cross the border.

Gao, the largest city of Mali's north, has been hit by French air strikes in recent days.

Niger has already sent a technical team to Mali, part of a battalion of 544 troops accompanied by six French liaison officers which it will deploy to Mali.

(Additional reporting by Richard Valdmanis in Bamako and John Irish in Paris, Kader Maazou in Oualam; Writing by Daniel Flynn; Editing by Pascal Fletcher)

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Two blasts, suicide attack kill 17 in Baghdad

BAGHDAD (Reuters) - Three blasts, including a suicide bomber attack near an army base, killed least 17 people across Baghdad on Tuesday, the latest violence as Shi'ite Prime Minister Nuri al-Maliki faces increasing pressure from a political crisis.

The most deadly explosions took place in Taji, 20 km (12 miles) north of Baghdad, where a suicide bomber driving a car packed with explosives detonated his bomb near an army base, killing at least seven people and wounding 24.

Another parked car bomb exploded in a crowded market in the Shi'ite neighborhood of Shula, northwestern Baghdad, killing 5 people and wounded 13, police and hospital sources said.

In Mahmudiya, a town 30 km (20 miles) south of Baghdad, a car bomb attack near an army checkpoint killed five people, including two soldiers and wounded 14 more, including four soldiers.

Violence in Iraq has eased since the widespread sectarian carnage of 2006-2007, but Sunni Islamist insurgents still launch frequent attacks, seeking to reignite confrontation between the Shi'ite majority, Sunni Muslims and ethnic Kurds.

Shi'ite premier Maliki's government is trying to ease mass Sunni protests that erupted a month ago and his central government is also locked in a dispute with the country's autonomous Kurdistan region over control of oilfields.

(Reporting by Kareem Raheem and Ahmeed Rasheed; writing by Patrick Markey)

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U.S. begins transporting French troops, equipment to Mali

PARIS (Reuters) - The United States has started transporting French soldiers and equipment to Mali as part of its logistical aid to French forces fighting Islamist militants in the north of the country, a U.S. official said on Tuesday.

Paris has launched a military campaign against Islamist fighters in Mali at the request of the Malian government, amid fears the vast desert country could become a launchpad for international attacks.

"We have started air lifting French army personnel and equipment to Bamako from Istres," said Benjamin Benson, a spokesman for U.S. Africa Command (AFRICOM).

A Reuters camera crew on Tuesday saw a U.S.-flagged military transport aircraft taking off from the Istres air base in southern France.

Benson said the U.S. flights had started on Monday, but declined to give details on the number of planes being used.

"We did have two flights today so far. An early morning flight and a later one. We are going to continue the operations for the next couple of days as required to meet the needs of the French to get the material delivered," he said.

French Armed Forces spokesman Thierry Burkhard said on Monday that Britain, Belgium, Canada and Denmark were already transporting French material.

Benson said the United States was also working with France on intelligence issues, but declined to say if surveillance drones were being used.

(Reporting By John Irish in Paris and Marina Depetris in Istres; Editing by Janet Lawrence)

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Iran may use U.N. nuclear talks to seek leverage with big powers

VIENNA (Reuters) - Iran may be holding back from working with a U.N. investigation into its nuclear program to use it as a bargaining chip in pursuit of significant sanctions relief or other concessions in broader negotiations with world powers.

That could explain why United Nations nuclear inspectors once again returned empty-handed after talks last week in Tehran, where they tried to overcome obstacles to a long-stalled inquiry into suspected atomic bomb research by Iran.

Iran has suggested at various times in the past that it would expect a "kind of reward" for cooperating with the International Atomic Energy Agency (IAEA), a Western official said, making clear he saw no rationale for this.

If this is Tehran's thinking, a year-long effort by the IAEA to unblock its investigation looks unlikely to succeed as long as separate diplomacy between the six major powers and Tehran remains deadlocked.

"They don't want to offer substantive cooperation," one Western diplomat said after the IAEA's latest stab on January 16-17 at coaxing the Islamic Republic into starting to address questions about its atomic activities.

Another envoy in Vienna, where the U.N. agency is based, described the IAEA's roller-coaster negotiations with Iran as a "well-practiced dance" by Tehran of "two steps backwards, one step forward."

The failure to achieve a breakthrough in the most recent of a series of largely fruitless meetings between the IAEA and Iran marked another setback for diplomatic efforts to resolve the stand-off and head off the threat of a new Middle East war.

Both Iran and the United States, Britain, France, Germany, China and Russia say they want to resume talks after a seven-month hiatus. But the two sides' priorities diverge: the powers want to curb Iranian nuclear work of potential use in developing atomic weapons, while Iran wants sanctions scrapped and their "rights" to enrich uranium formally recognized.

They have yet to announce a date and venue and as delays continue, Iran is amassing more nuclear material that could be turned into bomb fuel if refined further. Israel has threatened military action to foil any nuclear weapons capability in Iran.

The powers, known as the P5+1 as they group the five permanent, veto-wielding members of the U.N. Security Council along with Germany, want peaceful guarantees on Iran's enrichment program and Iranian transparency toward the IAEA.

Iran, which says it seeks only peaceful nuclear energy from enrichment, is keen above all for the West to remove sanctions expanded last year to block its economically vital oil exports.

"Tehran apparently is seeking to withhold cooperation with the IAEA in order to increase leverage vis-a-vis the P5+1," said Daryl Kimball of the Arms Control Association, a U.S.-based research and advocacy group.

NO REWARD

The IAEA, whose mandate is to forestall the spread of nuclear weapons, has been trying for a year to negotiate a framework agreement with Iran giving its inspectors access to sites, officials and documents for their investigation.

After the previous meeting in mid-December, the IAEA said progress had been made and that it expected to seal the deal in this month's session. But after the two days of talks last week it said "important differences" remained.

A new round of IAEA-Iran discussions has been scheduled for February 13, which may allow for the global powers and Tehran to meet first to try and make headway in the wider dispute.

"Iran might think that if it grants access now, it may be in a weaker position to demand sanctions relief in a few week's time," said Shashank Joshi, a senior fellow and Middle East specialist at the Royal United Services Institute.

But the Western official said he saw no willingness among the powers "to pay any kind of reward" to Iran if it allowed the IAEA to resume its inquiry: "We think that is separate and it is in Iran's own interest to cooperate with the IAEA."

The powers and Iran last met in June, when Tehran rejected demands to halt its higher-grade enrichment and close an underground nuclear plant in exchange for limited sanctions relief, such as an end to a ban on imports of aviation spare parts, as well as civilian nuclear cooperation.

"Iran has always linked the IAEA and the P5+1 talks," Cliff Kupchan at political risk consultancy Eurasia Group said.

"They don't like what's on offer from the Western nations in the main talks, so they're holding all their chits, including ones relevant to the IAEA, for the main talks."

Hossein Mousavian, a former Iranian nuclear negotiator, said Iran and the powers should agree in their next meeting a "package consisting of all major requirements" of both sides.

"This should include technical demands of the IAEA and also address Iranian demands for recognition of its rights for enrichment and lifting sanctions. If so, then the IAEA would be able to have a successful visit to Tehran," he said.

(Editing by Mark Heinrich)

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Israel goes to polls, set to re-elect Netanyahu

JERUSALEM (Reuters) - Israelis voted on Tuesday in an election that is expected to hand hawkish Prime Minister Benjamin Netanyahu a third term, opening the way for a showdown with Iran and bolstering opponents of Palestinian statehood.

However, Netanyahu's own Likud party, running alongside the ultra-nationalist Yisrael Beitenu group, looks set to win fewer seats than in the previous parliament, with opinion polls showing a surge in support for the far-right Jewish Home party.

By 4 p.m. (9.00 a.m. ET), six hours before polls close, the Israeli election committee said turnout was 46.6 percent, up from 41.9 percent at the same time in 2009 and the highest level since 1999, when Netanyahu, serving his first term as prime minister, was defeated by then-Labour Party leader Ehud Barak.

Ahead of Tuesday's ballot, analysts had speculated that high turnout would benefit center-left parties that have sometimes struggled to motivate their voter base.

In a sign of concern over a possible centrist surge, Netanyahu urged his supporters to go to the polls.

"Go vote, and then go back to the cafes. Go vote so we can lead Israel because ... we don't really know how all of this is going to end," he said in public remarks at Likud party headquarters in Tel Aviv.

Political sources said Netanyahu, worried by his apparent fall in popularity, might approach center-left parties after the ballot in an effort to broaden his coalition and present a more moderate face to Washington and other concerned allies.

British Foreign Secretary William Hague warned Israel it was losing international support, saying prospects for a two-state solution to the Israeli-Palestinian conflict were almost dead because of expanding Jewish settlement in occupied territory.

Some 5.66 million Israelis are eligible to cast a ballot, with polling stations closing at 10 p.m. (3.00 p.m. ET). Full results are due by Wednesday morning, opening the way for coalition talks that could take several weeks.

The lackluster election campaign failed to focus on any single issue and with a Netanyahu victory predicted by every opinion poll, the two main political blocs seemed to spend more time on internal feuding than confronting each other.

"There is a king sitting on the throne in Israel and I wanted to dethrone him, but it looks like that won't happen," said Yehudit Shimshi, a retired teacher voting in central Israel in balmy winter weather that drew out the electorate.

No Israeli party has ever secured an absolute majority, meaning that Netanyahu, who says that dealing with Iran's nuclear ambitions is his top priority, will have to bring various allies on board to control the 120-seat Knesset.

The former commando has traditionally looked to religious, conservative parties for backing and is widely expected to seek out the surprise star of the campaign, self-made millionaire Naftali Bennett, who heads the Jewish Home party.

Bennett has ruled out any peace pact with the Palestinians and calls for the annexation of much of the occupied West Bank.

His youthful dynamism has struck a chord amongst Israelis, disillusioned after years of failed peace initiatives, and has eroded Netanyahu's support base.

The Likud has also shifted further right in recent months, with hardline candidates who reject the so-called two-state solution dominating the top of the party list.

"TRENDY PARTIES"

Surveys suggest Bennett may take up to 14 seats, many at the expense of Likud-Beitenu, which was projected to win 32 in the last round of opinion polls published on Friday - 10 less than the two parties won in 2009 when they ran separate lists.

Acknowledging the threat, Netanyahu's son Yair urged young Israelis not to abandon the old, established Likud.

"Even if there are more trendy parties, there is one party that has a proven record," he said on Tuesday.

Amongst the new parties standing for the first time in an election were Yesh Atid (There is a Future), a centrist group led by former television host Yair Lapid, seen winning 13 seats.

"All our lives we voted Likud, but today we voted for Lapid because we want a different coalition," said Ahuva Heled, 55, a retired teacher voting with her husband north of Tel Aviv.

Lapid has not ruled out joining a Netanyahu cabinet, but is pushing hard for ultra-Orthodox Jews to do military service - a demand fiercely rejected by some allies of the prime minister.

Israel's main opposition party, Labour, which is seen capturing up to 17 seats, has already ruled out a repeat of 2009, when it initially hooked up with Netanyahu, promising to promote peace negotiations with the Palestinians.

U.S.-brokered talks collapsed just a month after they started in 2010 following a row over settlement building, and have lain in ruins ever since. Netanyahu blamed the Palestinians for the failure and says his door remains open to discussions.

Palestinian President Mahmoud Abbas says he won't return to the table unless there is a halt to settlement construction.

That looks unlikely, with Netanyahu approving some 11,000 settler homes in December alone, causing further strains to his already notoriously difficult relations with U.S. President Barack Obama, who was sworn in for a second term on Monday.

IRAN THREAT

Tuesday's vote is the first in Israel since Arab uprisings swept the region two years ago, reshaping the Middle East.

Netanyahu has said the turbulence - which has brought Islamist governments to power in several countries long ruled by secularist autocrats, including neighboring Egypt - shows the importance of strengthening national security.

If he wins on Tuesday, he will seek to put Iran back to the top of the global agenda. Netanyahu has said he will not let Tehran enrich enough uranium to make a single nuclear bomb - a threshold Israeli experts say could arrive as early as mid-2013.

Iran denies it is planning to build the bomb, and says Israel, widely believed to have the only nuclear arsenal in the Middle East, is the biggest threat to the region.

The issue has barely registered during the election campaign, with a poll in Haaretz newspaper on Friday saying 47 percent of Israelis thought social and economic issues were the most pressing concern, against just 10 percent who cited Iran.

One of the first problems to face the next government, which is unlikely to take power before the middle of next month at the earliest, is the stuttering economy.

Data last week showed the budget deficit rose to 4.2 percent of gross domestic product in 2012, double the original estimate, meaning spending cuts and tax hikes look certain.

(Additional reporting by Ori Lewis, Jeffrey Heller and Tova Cohen; Editing by Alistair Lyon)

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Chavez aiming to return to Venezuela: Bolivian leader

LA PAZ (Reuters) - Venezuelan leader Hugo Chavez is undergoing physical therapy to hasten his return home after he underwent cancer surgery in Cuba last month, Bolivian President Evo Morales said on Tuesday.

"I communicated with Cuba and, brothers and sisters, we have good news about our brother, President Hugo Chavez. He is already undergoing physical therapy to return to his country," said Morales, a fellow leftist and Chavez ally.

"Latin American leaders like Fidel (Castro) and Hugo Chavez are very much needed at international events and I'm certain that soon we will be (together again) at presidential summits," Morales added during a speech in La Paz.

On Monday, Venezuela's foreign minister said Chavez was joking and giving instructions again, the latest positive comment from an official six weeks after the president's disappearance from public sight for cancer treatment.

Rumors earlier this month that Chavez, 58, was on life support have given way in the last few days to speculation that he may soon return to Venezuela.

Venezuelans are debating whether Chavez may be able to recover well enough to continue governing, or wants to come home to smooth a handover of power.

(Reporting by Carlos Quiroga; Writing by Hilary Burke; Editing by Mohammad Zargham)

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Yemen minister urges ground ops, not drones, against militants

DUBAI (Reuters) - A cabinet minister criticized on Tuesday the use of pilotless U.S. drones against suspected al Qaeda militants in Yemen, a tactic that has outraged communities in targeted areas, and urged a move to ground operations to avoid hurting civilians.

Yemen, an Arabian Peninsula country plagued by lawlessness that has been exploited by al Qaeda to launch attacks on Arab and Western targets, has witnessed a rising tempo of U.S. missile strikes in recent weeks.

"To have an innocent person fall, this is a major breach," Yemeni Human Rights Minister Hooria Mashhour told Reuters on a visit to the United Arab Emirates, voicing rare public opposition to the tactic by a member of the cabinet.

The comments by Mashhour, formerly a top activist in the mass unrest that ousted President Ali Abdullah Saleh a year ago, reflect growing public unease about the strikes and amounted to rare criticism from within the government. Saleh's successor, President Abd-Rabbu Mansour Hadi, has praised drone operations.

But dozens of armed tribesmen took to the streets in southern Yemen on January 4 to protest against drone strikes which they said had killed innocent civilians.

The United States never comments on action by its drones, which it has used to hunt down militants in Yemen for years. The Yemeni government allows such air strikes but usually does not comment on the U.S. role in specific incidents.

Asked for her position on the use of drones, Mashhour did not mention the United States or assert that any specific strike had killed civilians.

But she said: "I am in favor of changing the anti-terrorism strategy, I think there are more effective strategies.

"We're committed to fighting terrorism but we're calling for changing the means and strategies," she said on the sidelines of a U.N. Yemen humanitarian appeal meeting in Dubai. "These means and strategies can be applied on the ground without harming civilians and without leading to human rights violations."

U.S. COUNTER-TERRORISM AID TO YEMEN

Since the September 11, 2001 attacks on the United States, Washington has increased counter-terrorism help to Yemen, where al Qaeda's regional wing grew in power and influence during the popular uprising against Saleh.

Al Qaeda in the Arabian Peninsula (AQAP) is considered by Western governments to be one of the most active and dangerous wings of the global network founded by Osama bin Laden and has attempted a number of attacks on U.S. interests.

Leaked U.S. diplomatic cables said that Saleh had agreed in 2009 to a covert U.S. war on Islamist militants and accepted that Yemen take responsibility for U.S. attacks when necessary.

But Hadi spoke openly in favor of the drone strikes during a trip to the United States in September. Hadi, who has been praised by the U.S. ambassador in Sanaa as being more effective against al Qaeda than Saleh, was quoted as saying that he personally approved every attack.

Mashhour also said she wanted to see a fair trial for anyone suspected of involvement "in terrorist activities".

"This is our idea, to do this through the judiciary. But the United States said that it's in an open war with them and they declared the U.S. as an enemy. The (U.S.) declared (militants) as enemies who could be targeted wherever they are found.

"All we are calling for is justice and reliance on international regulations with regard to human rights and to be true to our commitment to our citizens in that they all deserve a fair trial," Mashhour added.

(Writing by Mahmoud Habboush; Editing by William Maclean and Mark Heinrich)

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Hijackers release oil tanker hijacked off Ivory Coast

LONDON (Reuters) - An oil tanker seized by gunmen close to the Ivory Coast's port of Abidjan has been released after being hijacked last week, the Nigerian ship owner said on Tuesday.

"The entire cargo on board was discharged while the crew were locked up in the junior officers' mess room," said Rowaye Jubril, the chairman of Brila Energy.

Jubril said that an inspector had been sent to assess the damage done to the vessel, which had been carrying about 5,000 metric tons of fuel.

(Reporting by Jessica Donati; editing by Keiron Henderson)

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Explosions at Syria's Aleppo university kills 15: group

BEIRUT (Reuters) - At least 15 people were killed and dozens wounded in two explosions that rocked the University of Aleppo in Syria's second largest city on Tuesday, the Syrian Observatory for Human Rights said.

State television said there had been one explosion at the university, which lies in the government-controlled area, describing it as a "terrorist attack".

Rebels have used car bombs and suicide attacks in fighting government forces and attacking government-controlled areas.

Fighting between rebels and government forces has reached a stalemate in Aleppo and left the city divided. Rebels say they control more than half the province.

State television footage showed at least one body lying on the street and several cars burning.

The second explosion reported by the Observatory, a British-based opposition monitoring group, may have been caused by a burning car, but there was no independent confirmation.

One of the university buildings was damaged. The state news agency said the explosion occurred on the first day of exams.

(Reporting by Mariam Karouny; Editing by Alison Williams)

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Indian PM says no "business as usual" with Pakistan

NEW DELHI (Reuters) - Indian Prime Minister Manmohan Singh said on Tuesday there could be no "business as usual" with Pakistan after a clash last week along the line dividing the arch-rivals in Kashmir in which two Indian soldiers were killed and their bodies mutilated.

Speaking to reporters at a ceremony to mark India's Army Day, Singh said that the killings on January 8 on the Line of Control, in which one of the soldiers was beheaded, were a "barbaric act".

His remarks come after the Indian army chief General Bikram Singh said India reserved the right to retaliate at a time and place of its choosing and he had instructed his ground commanders to be aggressive in the face of provocation.

Despite each side blaming the other for the worst outbreak of violence in the area since a ceasefire was agreed nine years ago, analysts said a breakdown in ties between the nuclear-armed neighbors was highly unlikely.

Singh has been pushing for a rapprochement with Pakistan, despite opposition not only from the main rival political party but also from within his ruling coalition.

Yet Indian Foreign Minister Salman Khurshid said ties could not remain unaffected by the flare-up on the border.

"Such actions by the Pakistan army which are in contravention of all norms of international conduct not only constitute a grave provocation but lead us to draw appropriate conclusions about Pakistan's seriousness in pursuing normalization of relations with India."

Each army has lost two soldiers in fighting along parts of the 740-km (460-mile) de facto border this month.

The decapitation of one of the Indian soldiers provoked outrage in the country and demands of retribution including from his family which wanted the severed head of the soldier back.

Pakistan has dismissed the Indian allegations as propaganda and instead accused India of violating the ceasefire in Kashmir, which has been the cause of two of three wars between the two neighbors.

But Khurshid said New Delhi had asked Pakistan's government to conduct an investigation into the attack and ensure that the grave act by its army was not repeated.

"It should not be felt that the brazen denial and a lack of proper response from the government of Pakistan to our repeated demarches on this incident will be ignored and that bilateral relations could be unaffected or that there will be 'business as usual'," he said in a statement.

The two countries have been trying to revive a peace process that went into deep freeze after the Mumbai attacks in November 2008 by a Pakistan-based militant group.

Pakistan remained committed to the peace process, a foreign ministry spokesman said in a statement on Tuesday.

"Pakistan attaches great importance to the ongoing peace process with India, and is committed to resolve the issue of LOC violations under the agreed mechanism," the spokesman said.

He added that Pakistan's offer to hold an investigation by the United Nations Military Observer's Group for India and Pakistan remained on the table.

India rejects any involvement of the U.N. group, considering the whole of Kashmir as an integral part of the country.

(Additional reporting by Annie Banerji; Katharine Houreld in Islamabad; Writing by Sanjeev Miglani; editing by Jason Neely)

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U.N. nuclear watchdog eyes Iran deal, Parchin visit

VIENNA (Reuters) - The U.N. nuclear watchdog said on Tuesday it hoped to gain access to the Parchin military site during a visit to Iran this week aimed at unblocking an investigation into suspected atom bomb research in the Islamic state.

The International Atomic Energy Agency will seek to finalize a framework deal with Iran in Wednesday's talks in Tehran that would enable it to relaunch its inquiry, IAEA Deputy Director General Herman Nackaerts said.

"We are approaching these talks in a constructive spirit ... and we trust that Iran will work with us in the same spirit," he said at Vienna airport before his team departed for Tehran for a new round of what have been long-fruitless negotiations.

World powers striving to resolve a decade-old dispute over Iran's atomic work and avert the threat of a new Middle East war will scrutinize the IAEA-Iran talks for any indication of an Iranian readiness to finally start addressing their concerns.

Uncertainty reigns over when the powers - the United States, France, Germany, China, Russia and Britain - and Iran will resume their separate negotiations aimed at finding a broader diplomatic solution.

Israel - a U.S. ally believed to have the Middle East's only nuclear arsenal - has threatened military action if diplomacy and economic sanctions intended to curb Iran's uranium enrichment program do not resolve the stand-off.

Iran, a major oil producer and exporter, says its nuclear work is an entirely peaceful project to generate an alternative source of energy for a rapidly expanding population.

The IAEA, whose mission it is to prevent the spread of nuclear weapons in the world, has been trying for a year to negotiate a so-called structured approach with Tehran that would give it access to sites, officials and documents in Iran.

Both the IAEA and Tehran have said progress was made at their last meeting in mid-December.

"We are aiming to finalize the structured approach to resolving the outstanding issues on the possible military dimensions of Iran's nuclear program," Nackaerts said.

The IAEA's immediate priority is to visit the Parchin military facility southeast of Tehran, where it suspects explosive tests relevant for nuclear weapons may have taken place, perhaps a decade ago. Iran denies the allegation.

"We hope that we will be allowed to go to Parchin and if access is granted we will welcome the chance to do so," Nackaerts said. "We are ready to go."

IRAN STRESSES ITS NUCLEAR "RIGHTS"

Some members of the IAEA team carried metallic cases, apparently with equipment they would need to inspect Parchin for any traces of illicit nuclear-related activity there.

Western diplomats say Iran has worked for the past year to cleanse Parchin of any incriminating evidence, but IAEA chief Yukiya Amano said late last year a visit would still be useful.

Iran, which rejects accusations of a covert bid to develop the means and technologies needed to produce nuclear arms, says it must first reach a framework accord with the IAEA on how the inquiry should be done before providing any Parchin access.

It says Parchin is a conventional military facility and has dismissed accusations that it "sanitizing" the premises.

Parchin "has nothing to do with nuclear activities," Foreign Ministry spokesman Ramin Mehmanparast said in Tehran.

Iran is ready to remove "any ambiguities" over its nuclear program, state television quoted him as saying. But he also appeared to link this to what he called a recognition of Iran's nuclear "rights", meaning work including uranium enrichment.

Washington says Iran does not automatically have the right to refine uranium under international law because, it argues, Tehran in the past concealed sensitive nuclear activity contrary to its safeguards agreement with the IAEA.

Enriched uranium can fuel nuclear power plants, Iran's declared goal, but also provide material for bombs if refined further, which the West suspects is Tehran's ultimate ambition.

A report by U.S. nonproliferation experts this week said Iran could produce enough weapon-grade uranium for one or more nuclear bombs by mid-2014, and that Washington and its allies should intensify sanctions.

Analysts and diplomats see a window of opportunity for world powers to make a renewed diplomatic push to find an overall negotiated solution to the dispute after U.S. President Barack Obama won re-election in November.

The six powers want Iran to scale back its uranium enrichment program and cooperate fully with the IAEA. Iran wants the West to first lift sanctions hurting its economy.

Both sides say they want to resume talks soon, but have yet to announce a date and venue.

Iran's Mehmanparast also reiterated that a religious edict from clerical Supreme Leader Ayatollah Ali Khamenei banning nuclear bombs is binding on Tehran and suggested this should defuse concerns about Iranian nuclear ambitions.

"There is nothing more important in defining the framework for our nuclear activities than the leader's fatwa," Mehmanparast said. "This fatwa is our operational instruction."

Khamenei's fatwa, according to a September 2012 report by the Fars news agency, prohibited the production, stockpiling and use of nuclear weapons and said they contradict "Islamic beliefs and the principles of the Islamic Republic of Iran".

(Additional reporting by Marcus George in Dubai; editing by Mark Heinrich)

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Pakistan turmoil deepens as court orders PM's arrest

ISLAMABAD (Reuters) - Pakistan's Supreme Court ordered the arrest of the prime minister on Tuesday on corruption allegations, ratcheting up pressure on a government that is also facing street protests led by a cleric who has a history of ties to the army.

The combination of the arrest order and the mass protest in the capital Islamabad led by Muslim cleric Muhammad Tahirul Qadri raised fears among politicians that the military was working with the judiciary to force out a civilian leader.

"There is no doubt that Qadri's march and the Supreme Court's verdict were masterminded by the military establishment of Pakistan," Fawad Chaudhry, an aide to Prime Minister Raja Pervez Ashraf, told Reuters.

"The military can intervene at this moment as the Supreme Court has opened a way for it."

However, the ruling coalition led by the Pakistan Peoples' Party (PPP) has a majority in parliament and lawmakers can simply elect another prime minister if Ashraf is ousted. In June, Ashraf replaced Prime Minister Yusuf Raza Gilani, who was disqualified by the Supreme Court in a previous showdown between the government and the judiciary.

Also, elections are due in a few months and President Asif Ali Zardari hopes to lead the first civilian government in Pakistan's 65 years as an independent nation that will complete its full term.

But power struggles will distract the unpopular government from tackling an array of problems - a Taliban insurgency, economic stagnation and growing sectarian tensions triggered by bomb attacks and tit-for-tat shootings.

The military, which sees itself as the guarantor of Pakistan's stability, has long regarded the PPP-led government as corrupt, incompetent and unable to prevent the nuclear-armed country from falling apart.

Pakistan's powerful army has a long history of coups and intervening in politics. But these days generals seem to have little appetite for a coup. Army chief General Ashfaq Kayani has vowed to keep the military out of politics.

But many believe top military leaders still try to exert behind-the-scenes influence, and any moves by the military in the latest crisis could not happen without a green light from Kayani, arguably the most powerful man in Pakistan.

"Extra-constitutional regime change, or "outside of the political calendar" if you will, is only possible in Pakistan with the tacit nod of the military, on account of it being a long-time stakeholder in Pakistani politics," said Shamila Chaudhry, an analyst at Eurasia Group.

"The Qadri march was like a trial balloon. The military indirectly sent it out to see if it would work."

Some politicians believe the military will try to dominate the caretaker administration that will oversee the run-up to the polls after parliament is dissolved, which is due to happen in March. An election date has yet to be announced.

The protest by Qadri and his followers has also been seen by commentators as being orchestrated by the military to add to the pressure on Zardari's government, although the military has denied any ties to the cleric.

PEOPLE'S MONEY

Thousands of followers of the populist cleric camped near the federal parliament cheered and waved Pakistani flags as television channels broadcast news of the Supreme Court's order to arrest Ashraf on charges of corruption.

"We don't want any of those old politicians. They just take all the people's money," said 19-year-old student Mohammed Wasim. "We congratulate the whole nation (on the Supreme Court's order). Now we have to take the rest of the thieves to court."

Government officials said they were baffled by the arrest order, which came hours after Chief Justice Iftikhar Chaudhry said elections should go ahead as scheduled.

"This was totally unexpected," an official in Ashraf's office told Reuters. "The prime minister and two or three of his friends were watching Qadri speak on television and this suddenly happened."

Pakistan's stock exchange fell by more than 500 points, or nearly three percent, on news of the court order, due to fears over fresh political turmoil, which comes against a backdrop of militant bombings and tension on the border with India.

Qadri, who played a role in backing a military coup in 1999, threatened to remain camped out near the federal parliament with thousands of supporters until his demands for the resignation of the government were met.

The fiery orator returned home from Canada less than a month ago to lead a call for electoral reforms to bar corrupt politicians from office that has made him an instant hit among Pakistanis disillusioned with the state.

In a speech from behind a bullet-proof shield in front of parliament, Qadri praised the military and the judiciary, the country's two other power centers.

"(The government) has wasted and brought a bad end to our armed forces, those armed forces who are highly sincere, highly competent and highly capable and highly professional," he said, alternating between Urdu and English.

"Even they can't do anything because the political government isn't able to deliver anything from this land. Judgments are being passed by our great, independent judiciary but the government is not ready to implement them."

Qadri is demanding that the government dissolve the legislature and announce the formation of a caretaker government to oversee the run-up to elections.

One senior military officer, who said he was speaking in a purely personal capacity, said there was no appetite in the military to repeat the coups seen in Pakistan's past, but added the stand-off could be resolved if the army played a role in the formation of a caretaker government as a "moderator".

"We should try as far as possible to abide by the constitution and law in looking for change. The army chief has made this clear," the officer told Reuters.

"But things seem to be moving beyond control," the officer added. "It is totally incorrect to say the army is behind Qadri. But if he brings thousands of people to the streets and things get worse, there may be very few options."

(Additional reporting by Matthew Green and Mubasher Bukhari in ISLAMABAD and Jibran Ahmad in PESHAWAR; Writing by Michael Georgy; Editing by Raju Gopalakrishnan)

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FBI sent agents to Manila to probe Universal payments: Philippine regulator

MANILA (Reuters) - The FBI sent agents to Manila as part of a probe into millions of dollars of payments made by Universal Entertainment Corp to a government consultant in relation to the firm's casino project on Manila Bay, the Philippine gaming regulator said.

Reuters, citing sources with knowledge of the matter, reported on January 12 that agents from the Las Vegas office of the Federal Bureau of Investigation were in Manila to probe the payments by Universal, controlled by Japanese billionaire Kazuo Okada. The payments are also being investigated by the Nevada Gaming Control Board, which regulates Universal's operations in the United States.

FBI's Philippine counterpart, the National Bureau of Investigation (NBI), has been separately investigating the payments as a potential bribery case.

The FBI agents met last week with the chief legal counsel of the state gaming regulator and operator Philippine Amusement & Gaming Corporation (Pagcor), said Cristino Naguiat, chairman and CEO of Pagcor, confirming the Reuters report.

"They just asked about the process," Naguiat told reporters in Manila on Tuesday, referring to the Philippine probe. "They are interested in Okada."

Calls to the Las Vegas FBI office seeking comment went unanswered outside business hours. Officials at the office declined on Saturday to comment on the Reuters story.

Reuters was the first to report in mid-November on the money transfers totaling $40 million to Rodolfo Soriano, an aide of Naguiat's predecessor Efraim Genuino. The payments were made in 2010 when Universal was lobbying for concessions from the government for its casino project.

Reuters has not been able to reach Soriano at his listed residences. Genuino's lawyers did not answer calls to their mobile phones seeking comment.

Universal, majority owned by founder Okada and his son through a family trust, has said that it carried out its business in the Philippines lawfully. It has also announced the filing of a defamation suit against Reuters in Tokyo for its reporting on the matter.

Universal has also sued in Tokyo three former employees, claiming they sent $15 million of the total $40 million in transfers without authorization. Universal has set up a panel of experts without ties to the company to independently investigate the matter.

Universal has done nothing improper and is ready to cooperate with investigators in the Philippines, said company spokesman Nobuyuki Horiuchi on Tuesday.

"We don't see this as an investigation of our conduct but rather as an investigation of whether the Reuters reports have been correct," he said.

The NBI probe on Universal's payments has been extended for a month, Naguiat told reporters. The agency was previously given until December 22 to come up with a final report on the payments.

Officials at the NBI could not be immediately reached for comment.

Pagcor has threatened to strip Universal of its license for the $2 billion casino resort being developed by the company if evidence of bribery was found.

PROJECT DELAYS

The investigations have delayed construction at the casino resort by "a couple of months," Naguiat said.

Universal said last year that it planned to open the resort, which includes two luxury casino hotels and high-end shopping malls, in 2014.

"They cannot open a casino (if) there's a problem. They can always do the hotel, restaurants and retail. We are not in a position to prevent those things... We can only stop the casino," Naguiat said.

Universal's ongoing talks with Philippine property firm Robinsons Land Corp on a sale of a minority stake in the Osaka-listed company's Philippine unit are also delaying the project, he said.

Okada was in Manila last week and had met with the president of Robinsons Land, Frederick Go, Naguiat said, without specifying where he got the information from.

Go did not respond to Reuters' request for confirmation on the meeting. Go told Reuters last week that discussions and due diligence on the deal with Universal were ongoing.

Robinsons Land said in a company disclosure last month it had signed a memorandum of understanding with Universal to acquire a minority stake in a local unit of Universal which holds a provisional license to own, develop and manage the casino resort.

Further delays, and a possible revocation of Universal's gaming license, could derail the Philippines' gaming revenue projections of $5 billion by 2015, estimated to rise further to $10 billion by 2017, Naguiat said.

Gaming revenues in the Philippines are projected to climb to around $2.5 billion this year from $2 billion in 2012, helped by the opening in March of Solaire, the country's newest casino owned by Bloomberry Resorts Corp.

(Reporting by Rosemarie Francisco and Manny Mogato; Editing by Ryan Woo)

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Northern Irish court quashes conviction for soldiers' killing

BELFAST (Reuters) - A Northern Ireland court on Tuesday quashed the conviction of the only man jailed over the 2009 murder of two British soldiers outside an army base in Northern Ireland.

Brian Shivers was found guilty last year of being involved in the killing of Patrick Azimkar, 21, and Mark Quinsey, 23, outside the Massereene Barracks in Antrim as they collected a pizza hours before they were due to fly to Afghanistan.

The judge at the time ruled Shivers had set fire to the murderers' getaway car - and that was enough to show he had been involved in the plot to kill the soldiers and was therefore legally responsible for their murders.

He was given a life sentence.

But the Court of Appeal overturned that decision on Tuesday saying Shivers' act was not enough to convict him of murder.

"The Court did not accept that a person who provides assistance after a murder with full knowledge of what has happened becomes guilty of murder," the court of appeal ruling said.

Shivers, who suffers from cystic fibrosis, had denied involvement. He will remain in custody until the Public Prosecution Service decides whether to seek a retrial.

The shooting was one of the worst attacks in the British-controlled province since a 1998 peace deal largely ended 30 years of conflict between Catholic Irish nationalists seeking union with Ireland and Protestant loyalists determined to remain part of the United Kingdom.

The Real IRA, which broke from the Irish Republican Army after the peace deal, has claimed responsibility for the killings.

The appeals court quashed Shivers' conviction on two counts of murder, six counts of attempted murder and one of possession of two firearms and ammunition with intent to endanger life.

(Writing by Conor Humphries; Editing by Andrew Heavens)

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Serbia holds out chance of U.N. seat for Kosovo

BELGRADE (Reuters) - Serbia held out the chance of a seat at the United Nations for Kosovo on Tuesday, contradicting a historic claim over its former province as it tries to remove the biggest obstacle to joining the European Union.

Serbia has vowed never to recognize Kosovo's 2008 secession but Prime Minister Ivica Dacic, under pressure to normalise ties with Kosovo's Albanian-dominated government in talks mediated by the EU, said Serbia now wanted a "comprehensive" settlement.

The West wants Serbia to loosen its grip on a small, Serb-populated pocket of northern Kosovo and establish functional, neighborly relations with its former province without formally recognizing it as independent.

Kosovo's government said this week its ultimate aim in the talks was to secure recognition of statehood by the United Nations.

"We can agree on everything," Dacic said in remarks carried by state news agency Tanjug. "We are seeking a comprehensive settlement, but for that to happen something has to be given."

"They (Kosovo) are pressuring us through the European Union, and we're not letting them into the United Nations. Are we supposed to go on sparring like that for years?" he said.

In a speech to parliament on Saturday, Dacic said Serbian sovereignty over Kosovo was "practically non-existent" and Belgrade could no longer afford to "keep its head in the sand".

They represent some of the boldest statements on Kosovo by a Serbian leader since NATO went to war in 1999 to halt a brutal Serbian counter-insurgency under late Serb strongman Slobodan Milosevic.

NATO air strikes forced the withdrawal of Serbia's army and police and Kosovo, where 90 percent of the 1.7 million people are ethnic Albanians, became a ward of the U.N.

RUSSIAN BACKING

More than 90 countries have recognized Kosovo since it declared independence in 2008, including the United States and 22 of the EU's 27 member states.

But Serbian backer Russia, a veto holder in the U.N. Security Council, stands in the way of Kosovo joining the U.N. and a raft of international bodies for which U.N. membership is a prerequisite.

The EU, which Serbian neighbor and fellow ex-Yugoslav republic Croatia will join in July, made Serbia an official candidate for membership last year, but accession talks hinge on progress in the negotiations with Kosovo.

Serbia retained de facto control over the Serb-populated area of Kosovo's north, which has resisted the authority of Kosovo's government.

On Sunday, the Serbian parliament adopted a resolution implicitly offering to recognize the authority of the Kosovo government over the entire territory, in exchange for broad autonomy for tens of thousands of ethnic Serbs living there.

Kosovo has ruled out any special status for the north.

Talks between Dacic and his Kosovo counterpart, former guerrilla commander Hashim Thaci, resume on Thursday in Brussels, chaired by EU foreign policy chief Catherine Ashton.

(Writing by Matt Robinson; Editing by Tom Pfeiffer)

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Israel police block Palestinians from reoccupying protest camp

E1, West Bank (Reuters) - Israeli police, using stun grenades, blocked about 50 Palestinian activists who tried on Tuesday to reoccupy tents they pitched last week on a patch of West Bank land which Israel wants for Jewish settlements.

Israel has drawn strong international criticism over plans to build settler homes in the area, known as "E1", which connects the two parts of the Israeli-occupied West Bank outside Arab suburbs of East Jerusalem.

On Sunday, hundreds of police officers evicted the protesters, who had claimed the area in the name of a future Palestinian state. The large, steel-framed tents remained standing at the site pending the outcome of Israeli Supreme Court hearings on Israel's intention to remove them.

Protesters who tried to return to the tents on Tuesday were confronted by police officers who told them the site had been designated off-limits by the army.

One activist wore a white bridal gown and their cars were decked out in bright ribbons, making the protest look like a traditional Palestinian wedding.

"The protesters continued to make their way up. Police pushed the protesters back down the hill," police spokesman Micky Rosenfeld said. "Two stun grenades were used to disperse the protesters and prevent attempts to climb back up."

Twenty Palestinians were detained for questioning, he said.

For years Israel froze building in E1, which houses only a police headquarters, after coming under pressure from former U.S. President George W. Bush to keep the plans on hold.

But Prime Minister Benjamin Netanyahu announced plans late last year to expand settlements after the Palestinians won de-facto statehood recognition at the United Nations General Assembly in November.

Many countries view Jewish settlement building in areas captured by Israel in a 1967 war as illegal and echo Palestinians concern such construction could deny them a viable and contiguous state.

E1 covers some 4.6 sq miles (12 sq km) and is seen as particularly important because it not only juts into the narrow "waist" of the West Bank, but also backs onto East Jerusalem, where Palestinians want to establish their capital.

About 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem. Direct peace talks between Israel and the Palestinians broke down in 2010 over the issue of Israel's continued settlement building.

(Reporting by Reuters TV at E1 and Ari Rabinovitch in Jerusalem; Writing by Noah Browning; Editing by Louise Ireland)

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Sri Lanka president picks ally as chief justice

COLOMBO (Reuters) - Sri Lankan President Mahinda Rajapaksa appointed a close ally as chief justice on Tuesday, two days after he controversially sacked the country's top judge for impeachment despite opposition from the Supreme Court.

Mohan Peiris, a former attorney general, was sworn in, Presidential spokesman Mohan Samaranayake said.

Around 100 special taskforce police officers were deployed at the Supreme Court as dozens of lawyers held candles in protest over the appointment outside the building in central Colombo.

The dismissal of Shirani Bandaranayake has threatened a constitutional crisis in the small island state which has been finding its feet slowly after a quarter century-long civil war ended in 2009.

Bandaranayake's removal from office on Sunday was illegal, the Supreme Court has ruled, prompting the United States and United Nations to voice concern.

Opposition lawmakers, religious leaders and lawyers have also expressed concern after parliament, controlled by Rajapaksa's party, voted on Friday to impeach Bandaranayake, the country's first female chief justice.

The clash between the government and judiciary has underlined the power wielded by Rajapaksa and his family in the island nation, where he has been president since 2005.

"Today marks the funeral of the independent judiciary," said Sunil Watagala, a member of Lawyers Collective, a judicial activist group, as other lawyers blew out candles to symbolize the start of a dark era in the court.

Lawyers Collective has urged all Supreme Court judges not to accept Peiris's appointment.

Police attempted to prevent Bandaranayake from talking to media at her official residence, which she left in the afternoon.

"My life is in danger," she told reporters sitting inside her vehicle before leaving.

In a separate statement she said she had suffered because she stood for an independent judiciary.

"I still am the duly appointed legitimate Chief Justice," it said.

"(But) since it now appears that there might be violence if I remain in my official residence or my chambers, I am compelled to move out."

Bandaranayake fell from favor with Rajapaksa after she ruled that the president's younger brother, Basil Rajapaksa, would need to seek further approvals for his proposal of a $614 million development budget.

Peiris, a 38-year veteran of the legal profession, has served as state counsel, attorney general and legal adviser to the Sri Lankan Cabinet of Ministers.

Political risk consultancy Eurasia Group said in a note that because of his well-known close ties to the Rajapaksa family, Peiris could face questions from the Supreme Court or Court of Appeals on the legality of any decision he makes.

(Editing by Henry Foy and Jeremy Laurence; editing by Jason Neely)

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