Pakistani Shi'ites call off protests after Quetta bombing arrests

QUETTA, Pakistan (Reuters) - Pakistani Shi'ites agreed to bury those killed in the most recent sectarian bombing, ending four days of protests, after the government said on Tuesday it had arrested 170 suspects linked to the attack.

Saturday's bombing in the northwestern city of Quetta killed 85 people. In an echo of a protest last month after a similar attack left nearly 100 dead, grieving relatives refused to bury their kin in a powerful rebuke to a government they say has repeatedly failed to protect them.

On Tuesday, Shi'ite leaders called off the protest after Information Minister Qamar Zaman Kaira said four suspects had been killed and 170 people arrested within hours of the government announcing an operation against the militants.

"The operation will go on until all culprits are nabbed," Kaira said.

It was unclear how Pakistan's security forces were able to locate so many suspects in such a short period of time, or why they had not moved to do so before.

Pakistan has a poor record when it comes to prosecuting terrorism suspects. More than 60 percent of suspects brought before anti-terrorism courts in Punjab province were released in 2011, the most recent year for which data is available.

"All our demands have been met," said Shi'ite leader Amin Shaheedi. "The government has assured us that Quetta will be protected now and such incidents will not be repeated."

Interior Minister Rehman Malik said the government had also replaced the provincial police chief and offered to heavily fortify the Hazara Shi'ite enclave in Quetta. Those who come out risk being killed.

The Hazara are a distinctive ethnic group whose features and dialect make them easy targets for Sunni militants.

Protests in support of the Shi'ites in Quetta were also held in other cities across the country.

In the commercial hub of Karachi, protesters blocked the road to the airport. In the capital of Islamabad, protesters gathered outside the Supreme Court, where the powerful chief justice has opened hearings into the violence.

He is demanding reports from intelligence services on what they are doing to counter the threat from the Sunni sectarian group Lashkar-e-Jhangvi.

The LeJ claimed responsibility for both Saturday's bombing and one last month that claimed nearly 100 lives. Their campaign of bombings and assassinations of minority Shi'ites is a bid to destabilize nuclear-armed Pakistan and install a Sunni theocracy.

Sectarian attacks dramatically increased last year, killing more than 400 Shi'ites across Pakistan.

On Monday, a Shi'ite doctor famed for his charity work was shot dead along with his 11-year-old son as he took the boy to school in the eastern city of Lahore. Community leaders said it seemed to be a sectarian attack.

The violence has called into question whether the government can secure the country ahead of elections expected in May.

(Additional reporting by Mehreen Zahra-Malik, Writing By Katharine Houreld; Editing by Jeremy Laurence)

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Pressure mounts on Israel over Palestinian prisoner fast

RAMALLAH, West Bank (Reuters) - Hundreds of Palestinian prisoners in Israeli jails declared a one-day fast on Tuesday in solidarity with four inmates whose hunger strike has fuelled anti-Israel protests in the occupied West Bank.

Samer al-Issawi, one of the four Palestinians who have been on hunger strike, has been refusing food, intermittently, for more than 200 days. His lawyer says his health has deteriorated.

Gaunt and wheelchair-bound, Issawi appeared on Tuesday before a Jerusalem civil court, which deferred releasing him for at least another month.

The prisoners' campaign for better conditions and against detention without trial has touched off violent protests over the past several weeks outside an Israeli military prison and in West Bank towns.

In the Gaza Strip, the Islamic Jihad group said a truce with Israel that ended eight days of fighting in November could unravel if any hunger striker died.

The Palestinian Prisoners Club, which looks after the welfare of inmates and their families, said 800 prisoners were taking part in the day-long fast.

Issawi was among 1,027 jailed Palestinians freed by Israel in 2011 in exchange for Gilad Shalit, a soldier who was abducted on the Gaza border by Hamas, the Islamist militant group that now rules the enclave.

Issawi and Ayman Sharawneh, who has also been on hunger strike, are among 14 Palestinians who have been re-arrested by Israel since being released in the Shalit trade.

Ofir Gendelman, a spokesman for Israeli Prime Minister Benjamin Netanyahu, wrote on Twitter that Issawi and Sharawneh were detained "because they violated the terms of the Shalit deal by returning to illegal activities which pose a threat".

INTERNATIONAL CONCERN

Palestinian negotiator Saeb Erekat said he had been in contact with Israel and urged it to release the men. He said Egypt, which helped mediate the Shalit prisoner swap and also negotiated an end to a Palestinian mass hunger strike in Israeli jails last year, was trying to end the new protest.

Israel has defused previous long-term hunger strikes among the some 4,700 Palestinians in its jails by agreeing to release individuals or deporting them to Gaza - a prospect rejected by the four prisoners, who hail from Jerusalem and the West Bank.

The Quartet of Middle East negotiators - the United States, Russia, the United Nations and European Union - have expressed concern at the hunger strike.

In a statement on Monday, France's Foreign Ministry urged Israel "to be sensitive to the risk of a tragic outcome and to take appropriate measures as a matter of urgency".

The statement said "administrative detention must remain an exceptional measure of limited duration and be carried out with due regard for fundamental safeguards".

Israel holds some Palestinians in "administrative detention" based on evidence presented in a closed military court. It says the practice pre-empts militant attacks against it while keeping its counter-intelligence sources and tactics secret.

There were some 178 administrative detainees in Israeli jails in January, down from just over 300 around the time of another Palestinian hunger strike campaign last spring, according to Palestinian rights group Addameer.

"The battle waged by me and by my heroic colleagues ... is everyone's battle, the battle of the Palestinian people against the occupation and its prisons," Issawi said in a message conveyed to the Palestinian Ministry of Prisoners last week.

(Additional reporting by Nidal al-Mughrabi in Gaza and Ali Sawafta in Ramallah; Editing by Alison Williams)

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Yemeni warplane crashes in capital Sanaa, 12 dead

SANAA (Reuters) - A Yemeni air force plane crashed in the capital Sanaa on Tuesday, killing at least 12 people, security sources said.

State news agency Saba said three women and two children were among those killed when the plane, on a training flight, came down in a western residential district. Eleven people were wounded, security sources said.

Pictures of the crash on social media sites showed one body near burning wreckage of the aircraft. Several cars were on fire and debris littered the street.

A security official said the pilot had ejected from the plane. There was no immediate word on whether he had survived.

"It's terrible and painful," resident Abdullah al-Ashwal said. "The police and medics evacuated five completely burned bodies, they were all unrecognizable."

Abdulsattar Mohammed said he saw a plane burning near houses that were also set on fire. "People were terrified and ambulances arrived late," he said.

A military official said the plane was a Russian SU-22 fighter/ground attack aircraft.

Yemen has 30 SU-22s and four SU-22UM3s in an air force with 79 capable aircraft in all, according to the 2012 Military Balance handbook issued by the International Institute of Strategic Studies.

In November 2012, a Yemeni military transport plane crashed near Sanaa airport and burst into flames, killing all 10 people aboard.

(Reporting by Mohammed Ghobari; Writing by Mahmoud Habboush and William Maclean; Editing by Alistair Lyon)

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Syrian rocket attack on Aleppo kills 20: activists

AMMAN (Reuters) - A Syrian army rocket attack on a rebel-held district in the city of Aleppo killed at least 20 people and another 25 were missing, opposition activists said on Tuesday.

The missile was identified from its remains as a Scud-type rocket that government forces have increasingly used in areas under opposition control in the province of Aleppo and in the province of Deir a-Zor to the east, they said.

"The rocket brought down three adjacent buildings in Jabal Badro district. The bodies are being dug up gradually. Some, including children, have died in hospitals," Mohammad Nour said by phone from Aleppo. He said testimony from survivors indicated that 25 people were still under the rubble.

Video footage showed dozens of people scouring the site for missing victims and inspecting the damage. A body was being pulled from under a collapsed concrete structure. At a nearby hospital, a baby said to have been dug out from under the wreckage was shown dying in the hands of doctors.

Abdeljabbar al-Akeidi, head of the rebel Aleppo Military Council in Syria's largest city and erstwhile commercial hub, was shown in video footage inspecting the scene.

Syrian opposition fighters have captured several army bases in Aleppo in the last two months, depriving the army of secure sites from which troops have been firing artillery at rebel-held districts of the city and surrounding rural areas.

Rocket salvoes over the last week have hit the towns of Tel Rifaat and Dar Izza in rural Aleppo, as well the eastern towns of Albu Kamal and Mou Hassan near the border with Iraq.

Abu Mujahed of the Sham News Network opposition group in Aleppo said that although rebels were present in Jabal Badro, the area on the city's eastern edge had little strategic value.

"Jabal Badro has been with the opposition for months and life was normal in the district. Shops were open and people were going to work," Abu Mujahed said. "Using a devastating weapon like a Scud aims to stir anger against the (rebel) Free Syrian Army and undermine its base of popular support."

Syria has been convulsed by an uprising and civil war for almost two years, with an estimated 70,000 people killed, and U.N. investigators say war crimes, including deliberate attacks on civilians, have been committed by both sides.

(Reporting by Khaled Yacoub Oweis, Amman newsroom; Editing by Mark Heinrich)

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Nigerian "terrorists" nab French tourists in Cameroon: Hollande

DAKAR/ATHENS (Reuters) - Gunmen kidnapped seven French nationals, including three children, on Tuesday in northern Cameroon near the border with Nigeria and the perpetrators came from neighboring Nigeria, French President Francois Hollande said.

The risk of attacks on French nationals and interests in Africa has risen since France sent forces into Mali last month to help oust Islamist rebels occupying the country's north.

"They have been taken by a terrorist group that we know and that is in Nigeria," Hollande told reporters during a visit to Greece. Islamist militants in northern Nigeria now pose the biggest threat to stability in Africa's top oil-producing state.

Radio France International had earlier reported the kidnapping, saying that the seven people were taken by armed men on motorbikes and were being taken towards Nigeria.

Western governments have grown concerned that Nigeria's radical Islamists may link up with groups elsewhere in the region, particularly al Qaeda's North African wing AQIM given the conflict in nearby Mali.

The seven tourists were abducted at around 7 a.m. in a village about 10 km (six miles) from the Nigerian border near the Waza national park and Lake Chad in the extreme north of Cameroon where Westerners often go for holidays.

It was the first case of foreigners being seized in the mostly Muslim north of Cameroon, a former French colony.

"I see the hand of (Nigerian militants) Boko Haram in that part of Cameroon. France is in Mali, and it will continue until its mission is completed," Hollande said.

France intervened in Mali last month when Islamist rebels, after hijacking a rebellion by ethnic Tuareg MNLA separatists to seize control of the north in the confusion following a military coup, pushed south towards the capital Bamako.

Eight French citizens are already being held in West Africa's Sahel region by al Qaeda-affiliated groups.

Cameroon Information Minister Issa Tchiroma Bakary said he could not confirm the kidnapping report for now.

On Sunday, seven foreigners were snatched from the compound of Lebanese construction company Setraco in northern Nigeria's Bauchi state, and al Qaeda-linked Ansaru took responsibility.

Northern Nigeria is increasingly afflicted by attacks and kidnappings by Islamist militants. Ansaru, which rose to prominence only in recent months, has also claimed the abduction in December of a French national who is still missing.

An Ansaru statement said kidnappings were driven by "the transgression and atrocities done to the religion of Allah by the European countries in many places, such as Afghanistan and Mali."

(Additional reporting by John Irish and Diadie Ba in Dakar, Vicky Buffery in Paris; Writing by John Irish; Editing by Mark Heinrich)

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Saudi king swears in first women members of advisory council

RIYADH (Reuters) - Saudi Arabia's King Abdullah on Tuesday swore in the country's first female members of the Shura Council, an appointed body that advises on new laws, in a move that has riled conservative clerics in the Islamic monarchy.

Abdullah, who has not been seen on television since shortly after a back operation in November, was shown on state media sitting in a palace chamber to give a short speech as he swore in the new council members.

King Abdullah is seen as having pushed to cautiously advance the role of women in Saudi society.

The health of the king, who turns 90 this year, is closely watched in the world's top oil exporter because he has the final say on policy.

Major speeches in recent months have been made on Abdullah's behalf by his heir, Crown Prince Salman. State media have also listed Salman as chairing the weekly cabinet sessions in place of the king.

"Your place in the Shura Council is not as those who have been honored, but as those who have been charged with a duty, as you represent part of society," he said, addressing the new women members.

One fifth of the new Shura Council are women. The decision to appoint women to the body, which functions in place of an elected parliament, was announced in 2011 but their names were only made public last month.

The Shura Council is remodeling parts of its chamber to ensure strict gender segregation between members.

Saudi Arabia's government is entirely appointed by the king, who is also prime minister. The country's only elections are for half the seats on municipal councils that have few powers.

Women will also have the right to vote and stand for office in the next municipal ballot, Abdullah said in 2011.

The decision to appoint women to the Shura Council prompted a protest by dozens of conservative clerics outside the royal court in January.

They complained that the move, and other reforms aimed at making it easier for women to work, went against sharia law.

In the ultra-conservative kingdom, women are banned from driving and need the consent of a male "guardian" to work, travel abroad or open a bank account.

(Reporting by Angus McDowall and Amena Bakr; Editing by Jeremy Laurence)

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Venezuela's Maduro would win vote if Chavez goes: poll

CARACAS (Reuters) - Venezuelan Vice President Nicolas Maduro would win a presidential vote should his boss Hugo Chavez's cancer force him out, according to the first survey this year on such a scenario in the South American OPEC nation.

Local pollster Hinterlaces gave Maduro 50 percent of potential votes, compared to 36 percent for opposition leader Henrique Capriles.

Chavez made a surprise return to Venezuela on Monday, more than two months after cancer surgery in Cuba, to continue treatment at home for the disease that is jeopardizing his 14-year socialist rule.

He has named Maduro, 50, a former bus driver and union activist, as his preferred successor.

Capriles, 40, a center-left state governor who lost to Chavez in a presidential vote last year, likely would run again.

Chavez still has not spoken in public since his December 11 operation in Cuba. Venezuelans were debating on Tuesday the various possible scenarios after his homecoming - from full recovery to resignation or even death from the cancer.

There was widespread expectation Chavez would soon be formally sworn in for his new six-year term at the Caracas military hospital where officials said he was staying. The January 10 ceremony was postponed while he was in Cuba.

"The president's timeline is strictly linked to his medical evolution and recovery," said Rodrigo Cabezas, a senior member of Chavez's ruling Socialist Party who, like other officials, would not comment on when he might be sworn in.

CAPRILES ANGRY

Should Chavez be forced out, Venezuela's constitution stipulates an election must be held within 30 days, giving Capriles and the opposition Democratic Unity coalition another chance to end the socialists' lengthy grip on power.

Capriles, who crossed swords with Hinterlaces at various points during the presidential election, again accused its director, Oscar Schemel, of bias in the latest survey.

"That man is not a pollster, he's on the government's payroll," Capriles told local TV.

"He said in December I would lose the Miranda governorship," he added, referring to his defeat of government heavyweight Elias Jaua, now foreign minister, in that local race.

Opinion surveys are notoriously controversial and divergent in Venezuela, with both sides routinely accusing pollsters of being in the pocket of the other. But Hinterlaces successfully forecast Chavez's win with 55 percent of the vote in October.

Its latest poll was of 1,230 people between January 30-February 9.

Polls last year showed Capriles - an energetic basketball-playing lawyer who admires Brazil's centrist mix of free-market economics with strong social welfare policies - as more popular than any of Chavez's senior allies.

But Chavez's personal blessing of Maduro, on the eve of his last cancer surgery, has transformed his status and made him the heir apparent for many of the president's supporters.

As de facto leader since mid-December, Maduro also has built up a stronger public profile, copying the president's techniques of endless live TV appearances, especially to inaugurate new public works or promote popular policies like subsidized food.

He lacks Chavez's charisma, however, and opponents have slammed him as a "poor imitation" and incompetent.

EMOTION

Local analyst Luis Vicente Leon said that should Chavez die, Maduro would benefit from the emotion unleashed among his millions of passionate supporters in Venezuela.

"The funeral wake for Chavez would merge into the election campaign," he told a local newspaper, noting how Argentine President Cristina Fernandez's popularity surged when her husband and predecessor Nestor Kirchner died in 2010.

Maduro already has implemented an unpopular devaluation of the local currency and said more economic measures are coming this week in what local economists view as austerity measures after blowout spending prior to last year's election.

In Caracas, the streets were quieter after tumultuous celebrations of Chavez's homecoming by supporters on Monday. A few journalists stood outside the military hospital.

Prayer vigils were planned in various parts of Venezuela.

"We hope Chavez will stay governing because he is a strong man," supporter Cristina Salcedo, 50, said in Caracas.

Student demonstrators who had chained themselves near the Cuban Embassy last week, demanding more information on Chavez's condition, called off their protest after his return.

Until photos were published of him on Friday, the president had not been seen by the public since his six-hour December 11 operation, the fourth since cancer was detected in mid-2011.

The government has said Chavez is breathing through a tracheal tube and struggling to speak.

Bolivian President Evo Morales arrived in Caracas on Tuesday in the hope of visiting his friend and fellow leftist.

(Additional reporting by Deisy Buitrago, Mario Naranjo, Girish Gupta in Caracas, Carlos Quiroga in La Paz; Editing by Bill Trott)

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Israel confirms Australian's suicide in judge's inquiry

JERUSALEM (Reuters) - Israel released details on Tuesday about the 2010 jailhouse suicide of an Australian immigrant reported to have been a disgraced Mossad spy, saying he hanged himself in his cell and no foul play was involved.

The affair was kept under wraps until it emerged last week with an Australian television expose that identified the dead man as 34-year-old Ben Zygier, a likely Israeli foreign intelligence recruit held for suspected security offences.

Without explicitly naming Zygier, Israel has confirmed that at the time it had a dual citizen in custody and under alias to stem serious harm to national interests, on which it would not elaborate. The December 15 date it gave for the detainee's death matched that etched on the Melbourne-born Jew's gravestone.

Easing a gag order, an Israeli court allowed the publication on Tuesday of the results of a judge's inquiry, completed two months ago, into the death.

The investigation showed the prisoner looped a wet sheet around his neck, tied it to the bars of a bathroom window in his cell and hanged himself, choking to death.

Israeli media reported the bathroom area was not covered, for privacy reasons, by closed-circuit television cameras that transmitted images from other parts of the isolation cell.

Ruling out foul play on the basis of medical and physical evidence, Judge Dafna Blatman-Kardai said entry to the cell was monitored by cameras and examination of their footage showed no one "intervened in causing the death of the deceased".

She said his family - which has not commented publicly on the case - agreed with the findings.

"A small amount of sedative was found in his blood. There was no alcohol or drugs. This does not change my determination ... about the cause of death," a forensic medical expert was quoted as saying in the judge's report.

Civil liberties groups and some lawmakers in Israel, protesting at the state censorship restricting local reporting on the case, have demanded to know whether Zygier's rights were violated by his months of incarceration, isolated from other inmates, and whether his death could have been prevented.

Those calls were echoed in Australia, where media suggested Zygier had been suspected of betraying Mossad missions to Canberra's spy services. Australia was angered in 2010 by the fraudulent use of its passports in the assassination of a Hamas arms procurer in Dubai, which the Gulf emirate blamed on Israel.

NEGLIGENCE IN QUESTION

In her report, the judge said there was prima facie evidence that the Prisons Authority had been negligent, noting that it had received special instructions on supervising the prisoner to prevent a possible suicide.

A Justice Ministry spokesman said state prosecutors would decide whether charges will be brought.

A source briefed on the affair told Reuters that Israel has since installed biometric detectors in the toilet stalls of high-risk prisoners, designed to summon guards within seconds should they stop breathing or display other signs of distress.

Responding to the media reports about Zygier, Israeli Internal Security Minister Yitzhak Aharonovitch told parliament on Monday that the detainee had received frequent family visits and been "supervised by mental-health support and treatment systems, both external and those of the Prisons Service".

Zygier also consulted with Israeli lawyers, one of whom, Avigdor Feldman, said he saw the married father of two shortly before his death to discuss "grave charges" on which he had been indicted, and the possibility of a plea bargain.

"I met with a balanced person ... who was rationally weighing his legal options," Feldman told Israeli television last week, adding Zygier had denied the charges against him.

"His interrogators told him he could expect lengthy jail time and be ostracized from his family and the Jewish community. There was no heart string they did not pull, and I suppose that ultimately brought about the tragic end."

Feldman declined to comment on an Israeli newspaper report that Zygier faced between 10 and 20 years in prison.

Deputy Prime Minister Dan Meridor on Saturday called Zygier's death a "tragedy" but said his treatment was justified.

(Additional reporting by Maayan Lubell; Writing by Dan Williams and Jeffrey Heller; Editing by Mark Heinrich)

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Italy's centre-left moves to reassure doubters

ROME (Reuters) - Italy's centre-left moved on Tuesday to quash fears that it will form a weak government after next weekend's election, saying it was committed to rapid economic reform and that outgoing premier Mario Monti must have a frontline political role.

"We are fully aware that inertia is not an option. We have no time to waste. Italy's problems are very serious and we cannot afford more recession or stagnation ... we need to deliver in terms of jobs, income, simplification," said Stefano Fassina, chief economic official in the centre-left Democratic Party.

Although markets have remained largely sanguine about the result of the February 24-25 vote, there have been rumbles this week about the chances that it will bring instability or a weak, left-leaning government unable or unwilling to carry out the difficult reforms needed to make Italy competitive.

A centre-left coalition headed by Democratic Party (PD) leader Pier Luigi Bersani is widely expected to win the vote and the most recent polls show it 4-5 points ahead of Silvio Berlusconi's centre-right.

But pollsters expect Bersani to fall short of a controlling majority in the Senate, which has equal law-making powers to the lower house, forcing it to seek support from Monti's centrists and raising the specter of a government split by disputes.

Fassina, who comes from the PD's left-wing, dismissed these fears and the suggestion that Monti, the technocrat who led Italy out of a major financial crisis last year, would refuse to ally with a centre-left coalition because of the suspicion it would be dominated by trade unions and leftists.

Monti, who is struggling to attract votes in the centre, said in an interview with Rome's Il Messaggero daily on Tuesday: "We have nothing in common with the left-wing coalition."

He has repeatedly urged Bersani to drop leftist ally Nichi Vendola of the small Left, Ecology and Freedom (SEL) party.

But Fassina told Reuters in an interview: "I guess that Monti, like us, wants to do something positive for this country. If we do not have a majority and Monti can provide the numbers for forming a stable government, why wouldn't he do it? What is the alternative? Another election in a couple of months?"

SAVIOUR

He added: "It would be difficult to explain to the rest of the world that the savior is not providing support for forming a government."

Fassina said the centre-left would seek an alliance with Monti to strengthen the government and reassure markets even if it had a majority by itself.

Despite Monti's lackluster political campaign, Fassina said the outgoing premier, "is an asset for Italy so in one way or another he should stay in the front line." Monti replaced Berlusconi in November 2011 as Italy slid towards a perilous debt crisis.

Fassina said the problems around an alliance stretching from Vendola to Monti "are enormously exaggerated," adding that Vendola had signed a pact to follow majority decisions in the coalition, in which the PD would be dominant.

"Vendola is not the extremist that people like to describe for electoral purposes," Fassina said, referring to the openly gay poet's 7-year tenure as governor of the southern region of Puglia where he has been widely described as a moderate. "There is a pretty good track record," Fassina said.

He added that he was less worried about Vendola than the danger that Monti would not get enough votes to help the centre-left form a majority because of the rise of the anti-establishment 5-Star Movement and Berlusconi's centre-right, describing them both as "populist forces"

Beppe Grillo, the 5-Star leader, has been boosted by a wave of recent corruption scandals and is now running third on close to 20 percent according to polls, well ahead of Monti.

But Fassina added: "Our feeling is that with Monti we will have a majority in the Senate large enough to have a stable government, this is what we understand from the latest polls."

He said the centre-left believed the most urgent reform in Italy was to streamline a notoriously bloated and inefficient public sector, address rampant corruption and transform a byzantine system of justice that causes years of delays in civil as well as criminal cases, a major disincentive to investment.

He said a plethora of local, central and regional authorities had caused paralysis and created hundreds of small and inefficient companies providing local services. The centre-left would close many of these companies and merge others.

Despite the feeling of many senior businessmen that reforming the labor market is the most urgent measure for a new government, Fassina said existing legislation was in line with the European average.

However, he said Monti's labor reforms had failed to close the gap between highly protected older workers and young people on precarious temporary contracts. The PD would encourage permanent contracts by cutting tax costs for companies.

Fassina said Berlusconi would try to retain enough influence to protect his personal interests through blocking anti-trust and anti corruption legislation and preventing an extension of the statute of limitations that has saved him in several fraud trials.

But if a stable government was formed after this election, Berlusconi would be marginalized and lose leadership of his People of Freedom party (PDL) within two years.

(Writing by Barry Moody; Editing by Giles Elgood)

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British shoppers may pay high price from horsemeat scandal

LONDON (Reuters) - For Britons worried last week's beef lasagne was in fact a helping of horse, peace of mind that such a meal will never reach dining tables again may come at a price.

Livestock specialists say that contrary to some public comments by supermarkets, ensuring a chain of quality from farm to table will cost money - particularly at the cheaper, ready-made meal end.

"How can you supply a meal for two people for a pound," said Andrew Hyde, managing director of British meat supplier Traymoor.

"I know what things cost and I know that if I was to put six ounces of quality mincemeat into a lasagne or a cottage pie then I would have to charge twice that price," he said.

The horsemeat scandal, which has triggered product recalls across Europe and damaged confidence in the food industry, erupted last month when tests in Ireland revealed some beef products sold there and in Britain contained equine DNA.

The British government has come under pressure to act and to explain lapses in quality control. Supermarkets, catering and restaurant firms, as well as food manufacturers, are battling to restore consumer confidence amid a welter of lurid headlines playing on a popular British queasiness about eating horsemeat.

Although Tesco, Britain's biggest retailer, has said raising standards "doesn't mean more expensive food," many in the meat industry are not convinced.

"Producing high quality, fully traceable, high welfare standard livestock costs money to put on peoples' tables," said Peter Garbutt, chief livestock adviser for Britain's farmers union, the NFU.

He said consumers had to be more realistic.

Lawmakers are expected to respond to the scandal with further regulation to ensure an ongoing regime of product testing, quality assurance and policing of standards.

With DNA testing costing up to 500 pounds ($770) per sample, creating a robust regime will not come cheap.

PRICE RISES

Analysts reckon value lines, such as frozen beefburgers or spaghetti bolognese ready-meals, are currently so cheap and profit margins so thin that supermarkets have little room for manoeuvre.

They say that spells increased margin pressure for already squeezed suppliers and price rises for consumers.

"I don't think there's any way that we can escape the viewpoint that the price of having guaranteed food in terms of it contains what it says it contains is ultimately higher prices," said Neil Saunders of retail research agency Conlumino.

"We might be speaking about a couple of pence on an item, because this is a game about volume."

That would add to food price inflation, already running at 4.9 percent in the 12 weeks to January 20 as a result of high commodity prices, according to market researcher Kantar, causing a further squeeze on the budgets of shoppers reeling from meager wage rises and government austerity measures.

That is a scenario lawmakers fear.

"The consumer cannot be left to face a Catch-22 where they can either pay for food that complies with the highest standards of traceability, labeling and testing, or accept that they cannot trust the provenance and composition of the foods they eat," said Anne McIntosh, a legislator who chairs the cross-party Food and Rural Affairs Committee, which published a report into the scandal last week.

Food experts say globalization has helped the food industry grow, but has also created a vast system which has fuelled the risk of adulteration.

Mark Price, managing director of upmarket British grocer Waitrose, told Reuters the horsemeat scandal was the inevitable result of big grocers putting pressure on suppliers.

"If you have a competition that says: Who can sell the cheapest stuff? Inevitably at a point in time you will get something like this," he said.

Two Competition Commission investigations have cleared supermarkets of unduly pressuring suppliers.

Tesco CEO Philip Clarke said on Friday he had ordered a review of the firm's approach to its supply chain. He wants relationships with its suppliers to become more "transparent and collaborative".

Co-operative Group CEO Peter Marks similarly spoke of taking a closer look at its supply chain.

Meanwhile, although the horsemeat scandal has undermined grocers' relationship with customers, investors appear unperturbed.

Last week, the height of the crisis, shares in Britain's food retail sector rose 1.2 percent. So far this year the sector is up 6.2 percent.

($1 = 0.6460 British pounds)

(Editing by Jeremy Gaunt.)

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Iran says it is converting uranium, easing bomb fears

DUBAI (Reuters) - Iran acknowledged on Tuesday that it was converting some of its higher-grade enriched uranium into reactor fuel, a move that could help to prevent a dispute with the West over its nuclear program hitting a crisis in mid-2013.

Conversion is one way for Iran to slow the growth in its stockpile of material that could be used to make a bomb. That stockpile is currently projected to reach a level intolerable to Israel in mid-year, just as Iran's room for negotiation is being limited by a presidential election in June.

Iranian Foreign Ministry spokesman Ramin Mehmanparast was asked at a weekly news conference about a Reuters report that Iran has converted small amounts of its 20-percent enriched uranium into reactor fuel.

"This work is being done and all its reports have been sent to the International Atomic Energy Agency (IAEA) in a complete manner," he was quoted as saying by the state news agency IRNA.

It was Iran's first acknowledgment that it had apparently resumed converting into fuel small amounts of uranium enriched to a concentration of 20 percent fissile material.

Iran's production of that higher-grade uranium worries the major powers because it is only a short technical step away from the 90-percent purity needed for a weapon.

On-off negotiations with the major powers and four rounds of U.N. Security Council sanctions have failed to persuade Iran to stop its enrichment activities, and the IAEA has been refused full access to investigate other suspect elements of the nuclear program.

Iran denies that it is seeking a weapon and says its nuclear program serves only peaceful purposes such as electricity and the production of medical isotopes.

CRITICAL MASS

But Israel, widely believed to be the only nuclear-armed country in the Middle East, has indicated that Iran's stockpile will reach a level in June at which it considers it must attack to stop Iran acquiring enough fissile material for a bomb. With a presidential election taking place that month, Tehran's room to make concessions to foreign powers is limited.

A U.S. official sought to reassure Israel this week on the determination of President Barack Obama, due to visit the region shortly, to curb Iran's nuclear program, according to an Israeli official who declined to be named.

Rose Gottemoeller, acting U.S. undersecretary of state for arms control and international security, "reiterated the Americans' commitment to preventing a nuclear Iran, and their worries about regional proliferation, were Iran to go nuclear", said the official, who met Gottemoeller.

Iran averted a potential crisis last year by converting some 100 kg of its 20-percent enriched uranium into fuel, suggesting to some that it was carefully keeping below the threshold set by Israel, while still advancing its nuclear technology.

It is not believed to have enriched uranium beyond 20 percent. A fuller picture is unlikely until a new IAEA report on Iran's nuclear activity, due by late February.

Separately, officials from the IAEA are due to hold talks in Tehran on Wednesday in the hope of restarting their long-stalled inquiry into Iran's nuclear program.

The U.N. agency, whose mission is to prevent the spread of nuclear weapons, has been trying for a year to negotiate a so-called structured approach with Iran that would give its inspectors access to sites, officials and documents.

The IAEA especially wants access to the Parchin military complex southeast of Tehran where it believes explosives tests relevant for nuclear weapons development may have taken place and been subsequently concealed, allegations that Iran denies.

"READY FOR DEAL"

Mehmanparast said Iran was ready to come to a "comprehensive agreement" with the IAEA if Tehran's nuclear rights were recognized. Part of this agreement could include a visit to Parchin, he said.

But Fereydoun Abbasi-Davani, head of the Atomic Energy Organisation of Iran, on Tuesday criticized the IAEA's handling of documents related to Iran, signaling the continued mistrust between the agency and Tehran.

"Unfortunately their system is not sufficiently secure," Abbasi-Davani said, according to the Iranian Students' News Agency (ISNA). "They need to be more careful in their interactions with Iran."

Last year Abbasi-Davani accused the U.N. agency of a "cynical approach" and mismanagement, and said "terrorists and saboteurs might have intruded" into the agency.

Iran and six world powers, known as the P5+1, are due to hold a new round of talks on the nuclear program in Kazakhstan on February 26.

U.S. Secretary of State John Kerry said on Friday that the powers were ready to respond if Iran came to the talks prepared to discuss "real substance".

Foreign Minister Ali Akbar Salehi, visiting Moscow, said Iran was "counting on there being positive and constructive steps made to resolve this problem at the upcoming meeting".

In Tehran, Salehi's spokesman Mehmanparast responded to news that North Korea had conducted its third nuclear test in defiance of existing United Nations resolutions by saying: "We need to come to a point where no country will have any nuclear weapons."

(Editing by Kevin Liffey)

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Italian ex-spy chief gets 10 years in CIA case

MILAN (Reuters) - Italy's former military intelligence chief was sentenced to 10 years in jail on Tuesday for his role in the kidnapping of an Egyptian Muslim cleric in an operation organized by the United States.

An American former CIA station chief was this month sentenced in absentia to seven years in jail after imam Abu Omar was snatched from a Milan street in 2003 and flown to Egypt for interrogation during the United States' "war on terror".

The Milan appeals court sentenced Niccolo Pollari, former head of the Sismi military intelligence agency, to 10 years in prison and his former deputy Marco Mancini to nine years.

The court also awarded a provisional 1 million euros in damages to the imam, the Ansa news wire reported, as well as 500,000 euros to the imam's wife.

Nicola Madia, a lawyer for Pollari, said he was disturbed by the decision and that his client would appeal to Italy's highest court. Pollari will not have to go to jail until the appeals process has been exhausted.

Madia said Pollari had not been able to defend himself properly because successive Italian governments had declared the case to be covered by state secrecy laws.

The sentences are part of the fallout from a campaign waged by then U.S. president George W. Bush after the September 11, 2001, attacks on the United States.

Abu Omar says he was tortured for seven months after being flown to Egypt in what was known as an "extraordinary rendition" operation. He was resident in Italy at the time of his abduction.

Former CIA Rome station chief Jeffrey Castelli and two other American officials were convicted in their absence by the Milan appeals court for their part in the plot, but are unlikely to serve their sentences.

Human rights groups have been fighting to expose heavy-handed tactics used by the CIA during the Bush administration.

(Reporting by Sara Rossi; Writing by Keith Weir; Editing by Kevin Liffey)

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Rising power Qatar stirs unease among some Mideast neighbors

DUBAI/DOHA (Reuters) - In the center of Cairo, young men hold up a burning flag for the cameras to show their fury at a nation they believe is meddling in their country and the wider Middle East.

It's a familiar image. But it's not the U.S. flag they are waving, it is that of Qatar, the Gulf state that has used its billions to spread its influence in the wake of the Arab Spring.

For most Western governments and officials, the influence of Qatar emir Sheikh Hamad bin Khalifa al-Thani's government is seen as broadly positive.

Qatar's neighbors are uneasy, however.

In Egypt, Libya and Syria, where Qatar tried to play a role post-Arab Spring, it finds itself blamed for much that has gone wrong on a local level. Close ties to Egypt's new leaders, the Muslim Brotherhood, have alarmed countries like the United Arab Emirates, where the Islamist group is still banned and which in January said it had foiled a Brotherhood-linked coup plot.

Senior officials in the UAE have long believed Qatar has long-term strategy to use the Brotherhood to redraw the region.

"There is both greater apprehension and appreciation for Qatar two years after the Arab awakening in the region," said Taufiq Rahim, Executive Director of Dubai-based geopolitics consultancy Globesight.

"While prior to the revolutions, Qatar was seen more as a mediator, its foreign policy recently has been much more proactive and in some cases partisan."

Some Western analysts and diplomats believe Qatar's leaders have been effectively improvising their way through the new landscape, experimenting to see what they can achieve with the massive wealth generated by its natural gas reserves over the past 15 years. An estimated $17 trillion in monetisable natural gas riches still remain in the ground.

Others, however, see a much more deliberate strategy.

"What we are seeing here is a high-stakes poker game for the future of the Middle East," said one Gulf-based Western diplomat on condition of anonymity.

Even supporters are concerned the country may be overstepping its boundaries and getting a reputation for playing favorites.

"There is widespread appreciation of the positive role that Qatar has played in the region," said Ari Ratner, a former advisor on the Middle East at the State Department and now fellow at the Washington-based Truman National Security Project.

"At the same time there is a broad consensus that the Qataris themselves would be better served by fully delivering on their pledges of aid and working through established governments rather than their preferred factions."

MUSLIM BROTHERHOOD?

The emirate has long been a country of sometimes baffling contradictions. While in many ways one of the most conservative of the Gulf states, it has also proved the most enthusiastic about the changes wrought by the Arab Spring.

Of the 1.9 million people who live there, only some 250,000 are ethnic Qataris, most of whom practice Wahhabism, the austere form of Islam also practiced in Saudi Arabia.

Sheikh Hamad and his glamorous second wife Sheikha Mozah have gained a reputation as modernizers in recent years, however, raising the country's profile significantly with the launch of the Al Jazeera television network and successful hosting of the 2006 Asian Games, as well as initiating the country's World Cup bid.

The emirate has always made a point of keeping as many diplomatic doors open as possible and has relished its role at the center of regional diplomacy. Of all the members of the regional Gulf Cooperation Council, it has long been the closest to Iran even as it courted Washington and hosted U.S. forces. It has been trying to inject new life into peace efforts between Sudan and rebel groups in Darfur with offers of development aid.

Its links to the Muslim Brotherhood may be similarly pragmatic and flexible. But some believe Qatar has made a risky bet to put the movement at the heart of its regional strategy.

The emirate has clearly emerged as something of a focal point for the group, originally founded in Egypt in 1928 and now with national chapters across much of the Islamic world.

Several key current or former members - including televangelist Yousef Al-Qaradwi, a former senior Brother widely watched across the region - reside in the country having fled other states. Western officials who have worked with the Qataris in Libya and Syria say they have invariably favored groups with Brotherhood connections.

Sandhurst-trained Sheikh Hamad is seen broadly sympathetic to the movement, diplomats say, while heir apparent Tamim bin Hamad al-Thani is widely believed to be closer still.

As early as 2009, senior officials from the UAE were briefing their U.S. counterparts that they believed Doha's rulers were using the group to destabilize their neighbors. According to a diplomatic cable released by Wikileaks, Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahayan told U.S. officials Qatar was simply "part of the Brotherhood".

ARMS, AL JAZEERA

Senior Brotherhood officials deny any regional conspiracy; national chapters in different countries say they share ideology but have no direct links.

In their very occasional public statements, Qatari officials deny any special relationship with the group. Prime Minister Hamad bin Jassim bin Jabr al-Thani also rejected suggestions of a wider regional agenda from Qatar.

"We have a clear policy which is not to interfere in the internal affairs of any state," he told Kuwait's al-Rai newspaper in a September 2012 interview.

Few take that statement at face value, however.

Qatar's funding and direct support - including weaponry and the deployment of special forces - were key to building the capacity of opposition fighters first in Libya.

As President Mohammed Mursi's government in Egypt has struggled with mounting economic woes, Qatar has stepped up as an increasingly vital financial backer. In Syria, it has been a leading supplier of rebel arms.

But already, Qatar is feeling the heat for its actions. In Libya, Qatar is being blamed for an increasingly destabilizing rise in Islamist intolerance and violence. In Egypt, it finds itself caught up in the popular dissatisfaction with Mursi and accusations of economic imperialism: a multibillion dollar Suez Canal investment deal was described by protesters as a foreign attempt to seize control of vital national assets.

In Syria, critics say its shipments of arms to rebels has become a chaotic free-for-all. Current and former Western officials say Qatari officials and rich Arabs from Saudi Arabia and elsewhere have been cutting ad hoc deals on the Turkish-Syrian border with a disparate collection of opposition groups.

Even Al Jazeera - which played a crucial role in spreading the word of the 2011 unrest - is facing complaints of mounting and usually pro-Brotherhood bias. While the English-language service is seen as more neutral, the station's Arabic service is widely viewed as openly espousing a pro-Muslim Brotherhood agenda.

FAILURE TO COMMUNICATE?

Diplomats say Qatari officials have been surprised at the pushback.

One problem, those who watch Qatar closely say, is that with only a handful of senior royals and officials controlling policy it is all but impossible for the outside world to know what their strategy is.

Officials rarely answer media requests for information and there is no foreign ministry or government spokesman. For the handful of foreign media based in Doha, the only way of getting official comment is to accost officials at public events, and even then they are often tight-lipped.

No Qatari official was available to comment on this story.

"They are simply not explaining what they are doing properly," said one Doha-based analyst on condition of anonymity. "Conspiracy theories are rife."

Western governments and corporations with an eye on Qatar's vast gas wealth and investment portfolio have so far tended not to concern themselves too much with its politics. A higher profile is bringing with it greater scrutiny, however.

The arrest and sentencing of a local poet to life imprisonment late last year for writings critical of the government spurred widespread international condemnation and accusations of double standards.

Indeed, Qatar's problems with its neighbors may be only just beginning.

"People asking questions are met with walls of silence," said the Doha-based analyst. "That doesn't wash very well with an Egyptian who has just been shot in the leg in Tahrir Square."

(Additional reporting by Sami Aboudi; Editing by Sonya Hepinstall)

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China joins U.S., Japan in condemning North Korea nuclear test

SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of existing U.N. resolutions, drawing condemnation from around the world, including from its only major ally, China, which summoned the North Korean ambassador to protest.

The reclusive North said the test was an act of self-defense against "U.S. hostility" and threatened further, stronger steps if necessary.

It said the test had "greater explosive force" than the 2006 and 2009 tests. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating that it had again used plutonium which is more suitable for use as a missile warhead.

North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.

China, which has shown signs of increasing exasperation with the recent bellicose tone of its neighbor, summoned the North Korean ambassador in Beijing and protested sternly, the Foreign Ministry said.

Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".

China is a permanent member of the Security Council.

U.S. President Barack Obama labeled the test a "highly provocative act" that hurt regional stability and pressed for new sanctions.

"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said in a statement.

The Security Council will meet on Tuesday to discuss its reaction to the test, although North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.

Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated. U.N. Secretary-General Ban Ki-moon said the test was a "clear and grave violation" of U.N. Security Council resolutions.

Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms program and return to talks. NATO condemned the test as an "irresponsible act" that posed a grave threat to world peace.

The test "was only the first response we took with maximum restraint", an unnamed spokesman for the North Korean Foreign Ministry, which acts as Pyongyang's official voice to the outside world, said in a statement carried by the official KCNA news agency.

"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps."

North Korea often threatens the United States and its "puppet", South Korea, with destruction in colorful terms.

North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear program and that prospects were "gloomy" for the denuclearization of the divided Korean peninsula because of a "hostile" U.S. policy.

South Korea, still technically at war with the North after the 1950-53 civil war ended in a mere truce, also denounced the test.

The magnitude was roughly twice as large as that of 2009, Lassina Zerbo, director of the international data centre division of the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization, said. The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred.

"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.

Despite China's strong response, the test is likely to be a major embarrassment for Beijing, the North's sole major economic and diplomatic ally.

"The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions," said Mark Fitzpatrick of the International Institute for Strategic Studies think tank.

North Korea trumpeted the announcement on its state television channel to patriotic music against the backdrop of an image of its national flag.

It linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.

The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed merely at putting satellites in space.

North Korea used plutonium in previous nuclear tests and prior to Tuesday there had been speculation it would use highly enriched uranium so as to conserve its plutonium stocks as testing eats into its limited supply of the material that could be used to construct a nuclear bomb.

"VICIOUS CYCLE"

Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.

South Korea's Yonhap news agency said Pyongyang had informed China and the United States of its plans to test on Monday, although this could not be confirmed.

When North Korean leader Kim, 30, took power after his father's death in December 2011, there were hopes the he would bring reforms and end Kim Jong-il's "military first" policies.

Instead, the North, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.

"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."

But options for the international community appear to be in short supply.

Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieved maximum international attention.

Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. He will likely have to tweak his State of the Union address due to be given on Tuesday.

Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, prepares to take office on February 25.

China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.

The longer-term game plan from Pyongyang may be to restart talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear program, hosted by China and including the two Koreas, the United States, Japan and Russia.

Its puny economy and small diplomatic reach mean the North struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, last made in 2010.

"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," said Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.

The European Union's foreign policy chief, Catherine Ashton, urged North Korea to refrain from further provocation.

EU member Denmark called on China to step up to the plate and use its influence to rein in its ally.

"This deserves only one thing and that is a one-sided condemnation," said Foreign Minister Villy Sovndal. "North Korea is likely the most horrible country on this planet."

(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Editing by Nick Macfie)

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Air base falls as Assad's forces come under pressure

AMMAN (Reuters) - Syrian opposition fighters captured a military airport near the northern city of Aleppo on Tuesday in another military setback for President Bashar al-Assad's forces which have come under intensifying attack across the country.

The airport is the latest military facility to fall under rebel control in a strategic region situated between Syria's industrial and commercial center and the country's oil- and wheat- producing heartland to the east.

Fighting in the nearly two-year-old conflict has intensified in the three weeks since the political leadership of the opposition offered to negotiate a departure for Assad.

In the first direct government response, Syria's minister for "national reconciliation", Ali Haidar, said he was willing to travel abroad to meet Moaz Alkhatib, the Cairo-based president of the Syrian National Coalition opposition group.

Authorities had previously said they would talk to the "patriotic opposition" - figures who have not allied themselves with the armed rebellion. But most centrist opposition figures have left the country since Abdel-Aziz al-Khayyer, a proponent of dialogue and non-violence, was arrested last year.

"I am willing to meet Mr Khatib in any foreign city where I can go in order to discuss preparations for a national dialogue", Haidar told the Guardian newspaper.

But Haidar said the authorities rejected any dialogue that aims "to hand power from one side to another" and insisted that formal negotiation must take place on Syrian soil.

The main push for talks on a transition is coming from U.N. envoy Lakhdar Brahimi, a veteran diplomat who helped mediate an end to civil war in neighboring Lebanon and warned that Syria could become a failed state.

The Syrian uprising, in which 60,000 people have been killed, has been the bloodiest of the Arab revolts that already toppled four autocrats in Libya, Egypt, Tunis and Yemen.

With the minority Alawite sect, an offshoot of Shi'ite Islam, dominating power in Syria, the conflict has deepened the Shi'ite-Sunni divide in the Middle East.

JETS OVER DAMASCUS

In the capital Damascus, residents and activists said the army had moved tanks to central Abbasid Square to shore up its defensive lines after rebels breached it last week and then struck several security targets in the heart of the capital.

Jets bombarded rebel held areas in the east of the capital and in an expanse of farmland and urban areas known as Eastern Ghouta, from where rebels have launched an attack to cut off the loyalist supply lines.

"The bombing has been terrible. The centre of Damascus is shaking. You can hear the jets from here," said one woman.

Despite a large military arsenal - opposition activists reported several Scud missiles being fired at unknown targets from an army base north of Damascus - Assad's forces appeared to be on the defensive in many parts of the country.

The army and a plethora of security forces remain entrenched in fortress-like bases in Damascus and the provincial capitals, where their advantages in air power and heavy weaponry have kept the opposition from taking over the major cities.

Jarrah air base, 60 km (40 miles) east of Aleppo, came under the control of rebel units who have been surrounding it for weeks, and the highway linking Aleppo to the east of the country is in opposition hands, the Sham News Network said.

Video footage showed fighters from the Islamic Free Syria Movement inspecting the airport. Several fighter jets were shown on the ground at the airport and in concrete shelters.

Abu Abdallah Minbij, one of the opposition commanders who planned the attack on the airport, said by phone that two operational MiG jets and ammunition were found intact at the base, along with 40 disused fighter jets.

"The airport was being used to bomb northern and eastern rural Aleppo. By capturing it, we have cut the regime's supply line from Aleppo to the east," Minbij said.

He said the army will now struggle to send reinforcements to stop a rebel advance in the adjacent Raqqa province, where rebels have captured the country's largest hydro-electric dam this week.

In Sfeira, a nearby town in rural Aleppo, footage showed opposition fighters surrounding a captured tank in the middle of the town, with the body of three soldiers on the ground.

Assad's father, the late President Hafez al-Assad, used carrot and stick tactics to build alliances with the Sunni Muslim tribes in rural Aleppo and in Raqqa and Deir al-Zor to the east that cemented the decades long domination of his Alawite minority on the country.

But most of the alliances between the ruling minorities have broken down since the 22-month uprising erupted in March 2011.

Opposition activists said Liwa al-Islam, the largest rebel unit in the area, has thousands of fighters belonging to tribes that have abandoned Assad, such as the Anzeh tribe, which extends to Saudi Arabia.

They said the focus of rebel operations in Aleppo the last few weeks have been to neutralize four airports in the province, including Jarrah, which have been also used as artillery bases to shell surrounding rebel-held countryside and towns.

"The airports have been a source of aerial bombardment and indiscriminate shelling on rural Aleppo and on the city itself," activist Abu Louay al-Halabi said by phone from Aleppo.

He said rebels have hit planes on the ground belonging to two squadrons based in the airport of Minbij, 70 km (45 miles) northeast of Aleppo and overran several buildings in Nairab airport, which is adjacent to the city and remains in government hands.

"Once the airports are neutralized, the opposition's grip on Aleppo will become less tenuous and the fighters can concentrate on taking the whole city," Halabi said.

(Reporting by Khaled Yacoub Oweis; Editing by Peter Graff)

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Egypt court jails Israeli for two years: court sources

CAIRO (Reuters) - An Egyptian court sentenced an Israeli man to two years in prison for crossing illegally into the Sinai peninsula, court sources said on Tuesday.

Egypt said in December it had arrested the man after he slipped into the Sinai's Taba region and took photographs of security buildings.

State media at that time identified the man, Andrei Pshenichnikov, as a 24-year-old army officer. Israeli media said he was a civilian and a pro-Palestinian activist.

The ruling by the court in the Nuweiba area of Sinai was issued on Monday.

The court sources said Pshenichnikov had not given a convincing explanation for why he crossed into Egypt illegally when he could have entered as a tourist.

Sinai has suffered from lax security since Egypt's 2011 uprising, which overthrew President Hosni Mubarak. Egypt regained the peninsula, which Israel occupied during a 1967 war, after the two signed a peace deal in 1979.

The two countries have maintained an uneasy peace since then, and their relations have been marred by several high-profile cases in which Egyptian authorities accused Israel of espionage.

Israeli tourists have continued to holiday in the Sinai, although in lower numbers since a spate of bomb attacks on resorts from 2004 to 2006.

(Reporting by Yousri Mohamed; Writing by Alexander Dziadosz; Editing by Jon Hemming)

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Pope's resignation could hurt Berlusconi in Italian vote

ROME (Reuters) - Pope Benedict's resignation could limit the chances of former Italian prime minister Silvio Berlusconi closing the gap on the center-left frontrunner before this month's election, some pollsters and analysts say.

Berlusconi, who seemed certain to lose a few months ago, has staged an aggressive campaign based on tax-cut promises that has eroded the lead of Pier Luigi Bersani's Democratic Party (PD) and raised the prospect of an inconclusive outcome.

However, some pollsters say the pope's resignation could clip Berlusconi's wings by eclipsing the election campaign on television and newspapers at a time when he has just 12 days left to win over voters.

"This will put the campaign on ice for a while and that is bad news for Berlusconi who still needs to make up ground," said Renato Mannheimer, head of the ISPO polling agency.

Final polls published on Friday before a two-week blackout ahead of the February 24-25 vote gave Bersani an average lead of 5.7 points, down from above 10 percent before start of the campaign.

Under Italy's complicated voting system, that gap would give Bersani a comfortable majority in the Chamber of Deputies, but may not guarantee him a majority in the Senate, where seats are allocated on a regional basis.

Berlusconi's media blitz has involved a spate of "shock announcements" including the promised reimbursement of a hated housing levy, the abolition of payroll taxes on new hires, and an amnesty for tax evaders.

CAMPAIGN COVERAGE

With the election campaign relegated from page one to the around page 15 of the main newspapers on Tuesday, the impact of such announcements can be expected to be diluted for several more days at least.

The pope's decision also dominated Berlusconi's own media empire on Tuesday. He controls three of Italy's seven national free-to-air television channels and the largest magazine publisher.

Although coverage of the Vatican may taper off in the coming days, speculation over Benedict's successor will ensure that it shares the spotlight with the election right up to voting day.

"This is going to take visibility away from Berlusconi, and that should benefit the frontrunner, which is the PD," said Roberto D'Alimonte, Italy's top election expert. "Berlusconi needs space in the media to close the gap."

Another aspect cited by some commentators was a possible connection in voters' minds between the decision of the pope to step aside due to his age and the refusal of Berlusconi to do the same even though he has been prime minister four times and is himself 76-years-old.

"After the pope's announcement Berlusconi seems 20 years older," said political commentator Antonio Polito in a tweet that reflected scores of similar remarks on the social network.

However, some pollsters were sceptical that Benedict's historic decision could affect voting behaviour as all the biggest parties were well known and their broad policy positions have already been laid out.

Nicola Piepoli of the prominent Piepoli Institute said he believed the center left's lead had already stabilized, while Maurizio Pessato of the SWG agency said the election race would soon force its way back to the front of Italy's news agenda.

"One or two days won't change anything. Now 90 percent of the news is about the pope, but tomorrow it will be 70 percent, and the next day 50 percent and so on," Pessato said.

(Editing by Alison Williams)

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Iran denies officials to be questioned over Buenos Aires bombing

DUBAI (Reuters) - Tehran denied on Tuesday it had agreed to allow international investigators to question Iranian officials over the 1994 bombing of a Jewish community center in Buenos Aires as part of a plan to form a truth commission.

Following the bombing which killed 85 people, Argentinian authorities in 2007 secured Interpol arrest warrants for five Iranians and a Lebanese. Iran denies links to the attack.

Argentina said last month it had agreed with Iran to establish a "truth commission" made up of foreign legal experts to review all the relevant documentations of the attack, which Argentine courts accuse Tehran of sponsoring.

But Iranian Foreign Ministry spokesman Ramin Mehmanparast on Tuesday denied plans that Iranian officials would be questioned over the bombing.

"This report is a lie," Mehmanparast said during a news conference in Tehran reported by the Iranian Students' News Agency (ISNA).

Israel and Jewish groups had criticized the pact as they fear it could weaken the case against Iranian officials. It was also seen as a diplomatic victory for Iran as it faces international isolation and sanctions over its nuclear program.

The memorandum of understanding between Iran and Argentina reportedly outlined plans for Argentine legal officials to meet in Tehran to question people named by Interpol.

Iranian Defence Minister Ahmad Vahidi is among the Iranian officials sought by Argentina, which is home to Latin America's largest Jewish community.

(Reporting by Zahra Hosseinian; Editing by Angus MacSwan)

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Putin aims to soften Duma bill on preventing wealth going abroad

MOSCOW (Reuters) - President Vladimir Putin has submitted a bill to Russia's parliament aimed at preventing officials stashing illicit wealth abroad, seeking to make good on a pledge to crack down on corruption and stem capital flight.

But the text, published on Tuesday, is weaker than one already proposed by the State Duma, the lower house, which unlike Putin's bill would not allow apparatchiks to own property abroad or to open foreign bank accounts.

In his first annual address to the nation since returning to the Kremlin for a third presidential term, Putin called in December for "a whole system of measures to 'de-offshore' our economy".

The legislative initiative seeks to take the wind out of the sails of election protesters who rallied around slogans denouncing "swindlers and thieves" around Putin as he campaigned for the presidential election last March.

Russia has suffered annual net capital outflows of around $80 billion in recent years, much of which has been driven by officials shifting money abroad, say anti-corruption activists.

Russia ranks 133rd, alongside Honduras and Guyana, out of 174 states in Transparency International's 2012 Corruption Perception Index. It is under international scrutiny as it chairs the Group of 20 nations this year and has pledged to push forward the economic forum's anti-corruption agenda.

The bills are intended to apply to senior state and regional officials, lawmakers, judges, prosecutors, executives at state-owned companies and members of the central bank board.

THE PRICE OF LOYALTY

But Putin's draft stops short of stringent measures that could alienate the loyalists whom he relies on to uphold the 'vertical' power structure he has built up since first rising to Russia's highest office in 2000.

By allowing officials to open foreign accounts only through Russian banks, Putin's bill could benefit the state banks VTB and Sberbank, which have subsidiaries in several European countries.

Sberbank's head German Gref has lobbied for easier rules.

"This is a kind of a loophole that would make it possible to finance real estate investments abroad but under tighter control with better transparency," said Oleg Vyugin, a former Russian financial market regulator who now advises Morgan Stanley.

Putin's ruling party holds a secure majority over the chamber, but the fact that he has submitted his own version reflects Kremlin concern that the Duma version is too harsh.

Deputy Speaker Sergey Zheleznyak was quoted by the Interfax news agency as saying that Putin's proposal, while allowing ownership of property abroad, would require this to be properly declared.

That, say lawmakers and bankers, could lead to a compromise being passed that would put the onus on declaring personal wealth without unduly affecting officials who lead increasingly international lifestyles.

If an official, their spouse or children who are minors violate the law, that official would lose his or her job, according to Putin's draft.

After the law enters force, affected officials would have three months to close overseas accounts at foreign-owned banks and sell their investments in foreign stocks and bonds.

Putin's spokesman, Dmitry Peskov, said trusts would also be covered by the ban. Offshore trusts often make it possible to conceal the identity of an investment's beneficial owner.

(Reporting by Katya Golubkova and Maria Tsvetkova; Editing by Douglas Busvine and Liffey)

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Small Russian banks help Iran's oil exports: minister

MOSCOW (Reuters) - Small Russian banks are participating in schemes to finance Iranian oil exports, which are the target of U.S. and European sanctions against Tehran, Russian Energy Minister Alexander Novak said on Tuesday.

"Large (banks) are not taking part. Small ones are, yes," Novak told reporters, in the first such confirmation by a top Russian official.

"Major banks are not involved as they have taken into consideration the possibility of any sanctions to which they might become subject."

In 2011, the U.S. Congress passed a law requiring buyers of Iranian oil to make significant cuts to their oil purchases, or risk being cut off from the U.S. financial system.

The European Union followed suit by imposing sanctions last July against Iran's oil and shipping industries which barred Europe-based insurers from covering tankers that carry Iranian oil. Later, it also added bans on financial transactions and on sales to Iran of shipping equipment, among other measures.

Novak, who spoke after meeting Iranian Foreign Ali Akbar Salehi in Moscow, declined to name either the banks involved or the scale and nature of their possible financing of oil exports from Iran.

Salehi, in Moscow on a trade mission, said that Russian companies would be welcome to participate in developing the growing oil industry of the OPEC member state.

The West suspects of Iran of seeking to acquire atomic weapons, while Tehran insists its nuclear program is peaceful. Six-power talks with Iranian nuclear negotiators are due to be held in Almaty, Kazakhstan, on February 26.

(Reporting by Vladimir Soldatkin; Editing by Douglas Busvine and William Hardy)

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North Korea threatens "stronger" measures than nuclear test

SEOUL (Reuters) - North Korea stepped up its bellicose rhetoric on Tuesday threatening to go beyond carrying out a promised third nuclear test in response to what it believes are "hostile" sanctions imposed after a December rocket launch.

The North frequently employs fiery rhetoric aimed at South Korea and the United States and in 2010 was blamed for sinking a South Korean naval vessel. It also shelled a South Korean island in the same year, killing civilians.

It did not spell out the actions it would take. The North is not capable of staging a military strike on the United States, although South Korea is in range of its artillery and missiles and it can hit Japan with its missiles.

"The DPRK (Democratic Peoples Republic of Korea, or North Korea) has drawn a final conclusion that it will have to take a measure stronger than a nuclear test to cope with the hostile forces nuclear war moves that have become ever more undisguised," the North's KCNA state news agency said.

The United States and South Korea are staging military drills that North Korea says are a rehearsal for an invasion, something both Washington and Seoul deny.

The North successfully launched a long-range rocket in December in violation of U.N. resolutions that banned it from developing missile or nuclear technology after nuclear tests in 2006 and 2009.

The North says that it has the sovereign right to launch rockets for peaceful purposes.

Its widely trailed third nuclear test was announced in response to the sanctions agreed in January, although satellite imagery indicates that the isolated and impoverished state has been readying its nuclear test site for more than a year.

While most experts believe the North will stage a test, the timing is not known. It could come around February 16, the anniversary of former leader Kim Jong-il's birth.

LIMITATIONS

Another unknown is what the North will use as fissile material. In the past it has used its diminishing supply of plutonium stocks, but is believed to have enriched weapons grade uranium that would give it a second path to a nuclear bomb.

U.S. nuclear expert Siegfried Hecker, who visited a North Korean nuclear facility in 2010 believes the North could stage two explosions, one using plutonium to as to perfect its capacity to design a warhead small enough to be mounted on a missile, and a second using highly enriched uranium.

"Such (dual) tests have some technical limitations and are more challenging to conduct, but they have the huge advantage of not incurring additional political cost - in other words, they can get two for the price of one," Hecker wrote in the February 4 issue of Foreign Policy magazine.

Pyongyang's two tests so far have been puny. The yield of the 2006 test is estimated at somewhat less than 1 kiloton (1,000 tons of TNT equivalent) and the second some 2-7 kilotons, compared with say 20 kilotons for a Nagasaki type bomb, Hecker wrote.

North Korea has in the past used the leverage gained from its nuclear and rocket tests to try to restart six-party talks aimed at securing international recognition and aid for the country whose only major diplomatic backer is China.

There are few signs that the United States is willing to talk after the North rebuffed a food aid deal in March 2012 when it launched a long-range rocket after promising not to.

The planned third nuclear test and "stronger" measures come as South Korea prepares to swear in new President Park Geun-hye on February 25. Park had pledged talks and aid if the North gives up its nuclear ambitions.

(Editing by Robert Birsel)

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Bulgaria says Hezbollah behind fatal bus bombing

SOFIA (Reuters) - Bulgaria said on Tuesday it had evidence showing that Lebanese militant movement Hezbollah carried out a bomb attack on a bus in the Black Sea city of Burgas that killed five Israeli tourists last year.

The conclusions of the Bulgarian investigation, citing a clear connection to an attack on European Union soil, might open the way for the EU to join the United States in branding the Iranian-backed Hezbollah a terrorist organization.

Three people were involved in the attack, two of whom had genuine passports from Australia and Canada, Bulgarian Interior Minister Tsvetan Tsvetanov told reporters after Sofia's national security council discussed the investigation.

"There is data showing the financing and connection between Hezbollah and the two suspects," Tsvetanov said.

"What can be established as a well-grounded assumption is that the two persons whose real identity has been determined belonged to the military wing of Hezbollah."

Israel blamed the attack in Burgas, which killed five Israeli tourists, their Bulgarian driver and the bomber, on Iran and Hezbollah, a Shi'ite Islamist militia that is part of the Lebanese government and waged a brief 2006 war with Israel.

Iran has denied responsibility and accused arch-enemy Israel of plotting and carrying out the bus bombing last July.

Hezbollah, designated by the United States as a terrorist organization in the 1990s, had no immediate reaction to Tuesday's announcement.

Israeli Prime Minister Benjamin Netanyahu said Hezbollah and Iran were waging a "global terror campaign" and the Burgas bomb was just one in a series of attacks carried out against civilians in Thailand, Kenya, Turkey, India, Azerbaijan, Cyprus and Georgia.

"The attack in Burgas was an attack on European soil against a member of the European Union. We hope the Europeans will draw the necessary conclusions about the true character of Hezbollah," Netanyahu said in a statement.

EU ASSESSING RESULTS

"The implications of the investigation need to be assessed seriously as they relate to a terrorist attack on EU soil," a spokesman for EU foreign policy chief Catherine Ashton said. "The EU and member states will discuss the appropriate response based on all elements identified by the investigators."

The Netherlands considers Hezbollah a terrorist group and said in August that the EU should also do so, which would mean Brussels could act to freeze Hezbollah assets in Europe.

Britain reserves the designation for Hezbollah's armed wing but other EU member states, which have blacklisted the Palestinian Islamist group Hamas, have resisted U.S. and Israeli pressure to do the same to Hezbollah.

Bulgaria, a member of NATO as well as the EU, had previously said that the bombing was plotted elsewhere and carried out by foreigners. Even so, that attack stoked tension in a country where Muslims make up some 15 percent of the 7.3 million population.

All three people involved in the attack had fake U.S. driving licenses that were printed in Lebanon, Tsvetanov said. The two suspects with Canadian and Australian passports had been living in Lebanon, one since 2006 and the other since 2010.

No one has been arrested in connection with the attack and Tsvetanov said he hoped Australia, Canada and Lebanon would cooperate with the continuing investigation.

(Additional reporting by Angel Krasimirov in Sofia, Ari Rabinovitch in Jerusalem, Justyna Pawlak in Brussels and Dominic Evans in Beirut; Writing by Sam Cage; Editing by Mark Heinrich)

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France arrests suspected Islamists in Mali rebels probe

PARIS (Reuters) - French police arrested four suspected Islamist militants near Paris on Tuesday as part of an investigation into the recruitment of volunteers by al Qaeda insurgents in Mali, Interior Minister Manuel Valls said.

France's intervention in Mali to rid its former colony of Islamist fighters has prompted the authorities to increase security against possible reprisal attacks on its interests in mainland France and abroad.

Anti-terrorism judge Marc Trevidic, who is in charge of the operation, told Reuters last month that France needed more robust local policing, better intelligence sharing and the ability to infiltrate small radical Islamist groups if it hopes to fight new security threats on its soil. [ID:nL5N0AW0LN].

Analysts say the insurgency that seized the north of Mali is paving the way for attacks on France as more French Muslims of African origin were finding a cause in the conflict.

"France is really being singled out at the moment," said Anne Giudicelli, consultant with national security specialists Terrorisc.

"It's being accused of wanting to occupy Muslim territory and that could clearly push some individuals to take action, or encourage others to build up a network," she told Reuters.

A police source said three of the four men arrested on Tuesday were Franco-Congolese and one was Malian.

Valls said the arrests had come after a long investigation into al Qaeda recruitment rings led by Trevidic.

"There is an operation ongoing in the Paris region, conducted by the DCRI (domestic security service), which comes after the arrest of an individual a few months ago on the border between Mali and Niger," he told BFM TV.

That man was a Franco-Congolese social worker named Cedric Lobo, 27, who was arrested in Niamey, the capital of Niger, while trying to reach the historic Malian city of Timbuktu to join al Qaeda in the Islamic Maghreb (AQIM), the source said.

He was subsequently extradited to France, where he was charged with planning attacks and remanded in custody.

"ENEMY FROM WITHIN"

French nationals drawn to violent militant groups had a number of points in common, said Interior minister Valls, who has taken a hard line on law and order and warned France is facing an "enemy from within."

"The profiles are often individuals that have had problems with the law, been involved in drug trafficking, and have sometimes converted to radical Islam either in prison, through the Internet or by travelling overseas," Valls told reporters.

French anti-terrorism judges have opened a number of preliminary investigations in the past year into individuals suspected of links to what they say are Malian terrorist cells.

Valls said police had stopped several individuals trying to travel from France to the Sahel - a vast swathe of semi-arid territory stretching from Senegal in the west to Eritrea in the east - known as a base for traffickers and Islamist militants.

He said a "handful" of French nationals had already joined al Qaeda-linked groups.

"There is no direct threat, but there are threats on the Internet, on social networks, calling on people to wage war, to attack French interests," Valls said.

France has tightened security in public buildings and on public transport, although it has kept its security alert level at red, signifying "probable threats", one down from the scarlet level which means "definite threats".

Highlighting the threat overseas, Paris has raised its travel warning for its citizens across the Muslim world.

The embassy in Tunis on Monday confirmed that a French school in the Tunisian capital had been sprayed with graffiti warning of reprisals after France's intervention in Mali.

(Additional reporting by Nicolas Bertin, John Irish and Vicky Buffery; Writing by Nicholas Vinocur and John Irish; Editing by Jon Boyle)

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Egypt protester who died of wounds was tortured: security sources

CAIRO (Reuters) - An Egyptian activist who died on Monday was beaten unconscious during interrogation at a security camp where he was detained for three days, two security sources said on Tuesday.

Human rights campaigners say the same brutal tactics that helped ignite the uprising against autocrat Hosni Mubarak two years ago are back under the auspices of freely elected Islamist President Mohamed Mursi.

Mohamed el-Gendi, 23, was rounded up along with other youth protesters on January 25, the second anniversary of the start of the anti-Mubarak revolt, and taken to Gabal Ahmar, a state security camp on the outskirts of Cairo.

Gendi remained there for three days and nights when he was "interrogated" and beaten, the sources said, adding that the officers had become more aggressive when he talked back to them.

The interior ministry denied accusations that Gendi was tortured, saying in its report on the matter that he was found injured on the street after he was hit by a car on January 28, and taken to Cairo's Hilal hospital where he died some days later.

The security sources spoke to Reuters on condition of anonymity as they are not authorized to speak to journalists.

At least 59 people have died in the latest street violence to hit Egypt, which has been in political turmoil since Mubarak's fall with the latest demonstrations protesting at Mursi's perceived drift towards authoritarianism.

To many Egyptians, Gendi's case recalls that of Khaled Said, a youth who activists said was tortured to death by police in 2011. Said's case helped ignite the uprising.

"We are seeing a return of police brutality that was the hallmark of Mubarak's rule," said Hafez Abo Seida from the Egyptian Organisation for Human Rights.

Mursi's office said on Monday it was in touch with the public prosecutor to look into the causes of Gendi's death.

"The presidency stresses that there shall be no return to violating the rights of citizens, their public and private freedoms in light of the rule of law and the blessed January 25 revolution," it said in a statement.

Abo Seida said there was an apparent campaign against youth activists agitating against Mursi's rule, what they see as the Muslim Brotherhood's grip on power and a police force not held accountable for the deaths of some 850 anti-Mubarak protesters.

FACEBOOK ACTIVISM

Two other activists, Gaber Salah (known as Jika) and Mohamed Hussein (known as Mohamed Christie), killed in violent protests over the past month were known to be active on Facebook pages critical of the Brotherhood.

Gendi belonged to the leftist Popular Current, which said he had also been electrocuted in custody and was left with a wire around his neck.

Doctors at Hilal hospital said Gendi was in a coma when he died, having suffered brain and lung injuries as well as multiple fractures. They made no mention of traces of electrocution or strangulation.

"He was unconscious when he was delivered to Hilal hospital," a medic there told Reuters.

Since Mursi took office seven months ago, little has been done to overhaul the national police or rehabilitate its leadership, which had been accused by international and local human rights groups of perpetrating routine abuses.

Activists and Egyptian officials say Mursi has taken few steps to hold officers accountable, fearing a backlash from the powerful police generals who run the interior ministry.

Abo Seida said Mursi and Prime Minister Hisham Kandil had given the police a license to use force by ordering them to deal firmly with any protests that turned violent.

"President Mursi has been trying to motivate the police force and encourage them to return to policing the streets to establish order. But clearly these officers are not equipped with the right tactics to deal with protesters," he said.

The recent tide of unrest has been fuelled by anger at what activists see as Mursi's attempt to monopolize power since his election, as well as a sense of social and economic malaise that has settled over Egypt since Mubarak's ouster.

A state of emergency remains in force in three cities near the Suez Canal that have also witnessed protests against Mursi and the Brotherhood, the Islamist group that propelled him to power in a June election.

(Reporting by Marwa Awad and Alexander Dziadosz; editing by Mark Heinrich)

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Iran nuclear talks set for February 26

DUBAI (Reuters) - Iran and world powers announced new talks on Tehran's nuclear program on February 26, but hopes of progress after Tuesday's announcement were tempered when an Iranian official said the West's goal in talking was to undermine the Islamic republic.

First word of the meeting, to be held in Kazakhstan, came in comments from Iran's Supreme National Security Council to state news agency IRNA. Later, a spokesman for EU foreign policy chief Catherine Ashton said she hoped to make progress in allaying concerns about a program Iran denies has a military purpose.

Both sides said the widely expected appointment to meet was made on Tuesday by Iran's deputy nuclear negotiator Ali Bagheri and European Union counterpart Helga Schmid. However, there were immediate signs from Iran, which holds a presidential election in June, that powerful figures were skeptical of their worth.

Western powers say Iran may be close to having the capacity to build a nuclear weapon, though Tehran insists it is seeking only electricity. The United States and its allies, which have imposed tough economic sanctions, are keen to show progress on an overall agreement for curbing and monitoring Iran's nuclear activities - not least because Israel, seeing itself especially threatened, has warned it could mount a pre-emptive attack.

A spokesman for Ashton, who represents the five permanent U.N. Security Council members plus Germany, said: "She hopes that the talks will be productive and that concrete progress can be made towards a negotiated solution to meet the international community's concerns about the Iranian nuclear program."

WESTERN "ARROGANCE"

But comments by Abdollah Haj-Sadeghi, a representative of Supreme Leader Ayatollah Ali Khamenei to Iran's elite Islamic Revolutionary Guard Corps (IRGC), indicated continued differences of opinion in Tehran; those may limit the prospect of narrowing the dispute with the West at the talks in Almaty, the first of their kind since negotiators met in Moscow in June.

"They will never want real dialogue and negotiations," Haj-Sadeghi was quoted as saying by the ISNA news agency, addressing religious students in the theological center of Qom.

"Their goal is to inhibit the Islamic revolution. If they can't eliminate the Islamic revolution, they want to weaken and inhibit this revolution," he said. "A revolution with a religious nature cannot reconcile itself with arrogance."

Iranian officials often use the term "arrogant" to denote Western nations. It was not immediately clear whether he was referring to the continuing process of negotiation with the six world powers, known as the P5+1, or to the prospect of direct negotiations with the United States, Iran's main adversary.

Haj-Sadeghi's remarks contrasted with those of Iranian Foreign Minister Ali Akbar Salehi, who said in Berlin on Monday that he was "optimistic" regarding what he saw as a new approach from the United States regarding Iran.

Shashank Joshi, a senior fellow and Middle East specialist at the Royal United Services Institute, said the mixed messages reflected Iran's "fragmented" political system, in which power is divided between elected and unelected bodies.

"Haj-Sadeghi's comments are consistent with a widely held Iranian view: that sanctions are less about the nuclear issue and more about regime change," Joshi said.

"He may therefore have been repeating a standard line rather than responding to Salehi."

Many Iranian leaders may be wary of entering talks which quickly collapse, Joshi said.

"Some of this rhetoric is therefore a way of managing expectations, and pushing responsibility for failure back on to the West," he said.

(Additional reporting by Fredrik Dahl; Writing by Marcus George; Editing by William Maclean and Alastair Macdonald)

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