Egyptian opposition to shun Mursi's national dialogue

CAIRO (Reuters) - President Mohamed Mursi was expected to press ahead on Saturday with talks on ways to end Egypt's worst crisis since he took office even though the country's main opposition leaders have vowed to stay away.

Cairo and other cities have been rocked by violent protests since November 22, when Mursi promulgated a decree awarding himself sweeping powers that put him above the law.

The upheaval in the most populous Arab nation, following the fall of Hosni Mubarak last year, worries the West, in particular the United States, which has given it billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

Mursi's deputy raised the possibility that a referendum set for December 15 on a new constitution opposed by liberals might be delayed. But the concession only goes part-way towards meeting the demands of the opposition, who also want Mursi to scrap the decree awarding himself wide powers.

On Friday, large crowds of protesters surged around the presidential palace, breaking through barbed wire barricades and climbing on tanks guarding the seat of Egypt's first freely elected president, who took office in June.

As the night wore on, tens of thousands of opposition supporters were still at the palace, waving flags and urging Mursi to "Leave, leave".

"AS LONG AS IT TAKES"

"We will stay here for as long as it takes and will continue to organize protests elsewhere until President Mursi cancels his constitutional decree and postpones the referendum," said Ahmed Essam, 28, a computer engineer and a member of the liberal Dostour party.

Vice President Mahmoud Mekky issued a statement saying the president was prepared to postpone the referendum if that could be done without legal challenge.

Mursi's planned dialogue meeting was expected to go ahead on Saturday in the absence of most opposition factions. "Everything will be on the table," a presidential source said.

Mursi could be joined by some senior judiciary figures and politicians such as Ayman Nour, one of the candidates in Mubarak's only multi-candidate presidential race, in 2005, in which he was unsurprisingly trounced.

The opposition has demanded that Mursi rescind the decree giving himself wide powers and delay the vote set for December 15 on a constitution drafted by an Islamist-led assembly which they say fails to meet the aspirations of all Egyptians.

EXPAT VOTE DELAYED

The state news agency reported that the election committee had postponed the start of voting for Egyptians abroad until Wednesday, instead of Saturday as planned. It did not say whether this would affect the timing of voting within Egypt.

Ahmed Said, leader of the liberal Free Egyptians Party, told Reuters that delaying expatriate voting was intended to seem like a concession but would not change the opposition's stance.

The opposition organized marches converging on the palace which Republican Guard units had ringed with tanks and barbed wire on Thursday after violence between supporters and opponents of Mursi killed seven people and wounded 350.

Islamists, who had obeyed a military order for demonstrators to leave the palace environs, held funerals on Friday at Cairo's al-Azhar mosque for six Mursi partisans who were among the dead.

"With our blood and souls, we sacrifice to Islam," they chanted.

A group led by leftist opposition leader Hamdeen Sabahy has called for an open-ended protest at the palace.

Some pro-Mursi demonstrators gathered in a mosque not far from the palace, but said they would not march towards the palace to avoid a repeat of the violence that took place on Wednesday night.

In a speech late on Thursday, Mursi had refused to retract his decree or cancel the referendum on the constitution, but offered talks on the way forward after the referendum.

The National Salvation Front, the main opposition coalition, said it would not join the dialogue. The Front's coordinator, Mohamed ElBaradei, a Nobel peace laureate, dismissed the offer as "arm-twisting and imposition of a fait accompli".

ElBaradei said that if Mursi were to scrap the decree with which he awarded himself extra powers and postpone the referendum "he will unite the national forces".

Murad Ali, spokesman for the Muslim Brotherhood's Freedom and Justice Party, said opposition reactions were sad: "What exit to this crisis do they have other than dialogue?" he asked.

(This story corrects Mursi's title to president in paragraph 1)

(Additional reporting by Omar Fahmy; Writing by Giles Elgood; Editing by Michael Roddy and Paul Tait)

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Susan Powell's Father-in-Law Secretly Took 4,500 Pictures of Her

12/07/2012 at 07:30 PM EST

Wrapping up a year that has brought unimaginable frustration and heartbreak, Susan Powell's family marked the three-year anniversary of her disappearance at a ceremony this week near where her two sons are buried.

"It's a hard time of year," Susan's father, Chuck Cox, tells PEOPLE. "Our daughter's still missing. Someday, we will find out what happened to her."

He added that he is not sure what to make of a West Valley City, Utah, police announcement Thursday that their investigation into Susan's Dec. 6, 2009 disappearance remains active but "has been scaled down," with a reduction in the number of full-time investigators working the case.

The announcement came at the same time that more evidence emerged of the alleged obsession Susan's father-in-law, Steven Powell, had toward her. Authorities released nearly 4,500 pictures that they say he secretly took of her at home and elsewhere.

Cox says he's hopeful that the police are still doing everything possible to solve Susan's case, but he hasn't ruled out suing the department for failing to arrest Susan's husband, Josh Powell, for her murder.

More than two years after Susan's disappearance, Josh on Feb. 5 murdered the couple's two sons and committed suicide by blowing up his house.

Cox's lawyer, Anne Bremner, says Cox "goes back and forth" over whether to sue West Valley City. "He wants them to find her. A lawsuit can have a chilling affect on things."

Cox and Bremner say they do plan to file a lawsuit against the state of Washington for continuing to give Josh visitation with his children despite what they claim were mounting concerns regarding his mental stability.

Although Cox and the police believe that Josh Powell knew more than anyone what happened to Susan, they also strongly suspect that his father, Steven Powell, should still be looked at more closely.

Steven Powell

Ted S. Warren / AP

The Coxes hoped Steve Powell's voyeurism trial in May would unearth some answers but it did not. Powell invoked his Fifth Amendment right against self-incrimination when asked in jail about Susan.

In numerous interviews with PEOPLE, Steve and Josh Powell denied any involvement in Susan's disappearance and have suggested that she ran off with another man.

Steve Powell was prosecuted for surreptitiously photographing his neighbor's young daughters (and is serving a 30-month sentence), but the investigation also unearthed journals in which Powell described his interest in his daughter-in-law, as well as the thousands of photos, which were released Thursday to the Associated Press.

In a journal entry, Steven Powell recalls a sexually charged dream in which Susan asks him, “Do you think I would make a good wife for you?” None of the pictures show Susan naked, although there are images of her crotch and backside.

"We think he knows exactly where our daughter is," Cox says.

Once Susan disappeared, Josh sold the family's home in Utah and moved with the boys into Steven Powell's house in Puyallup, Wash., only about two miles from the Cox family.

On Thursday, families streamed to Puyallup’s Woodbine Cemetery to remember the Powell boys and other children who died tragically and to dedicate a memorial: a bronze angel inspired by the novella The Christmas Box, in which strangers learn the value of love following a child’s death.

The novella's author, Richard Paul Evans, also attended the dedication. The memorial is on a hill overlooking the boys' gravesites 75 yards away.

"We get a lot of support from a lot of people and we're going to make it through," Cox says.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Wall Street Week Ahead: "Cliff" worries may drive tax selling

NEW YORK (Reuters) - Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-loss selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it's still up nearly 32 percent for the year.

Apple dropped 8.9 percent in this past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one's tax bill is going to jump sharply just because the calendar changes.

"Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"You have a lot of high-net-worth individuals in taxable accounts, and that could be what's affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual."

Of this year's top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

Next week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

Friday's jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that Superstorm Sandy had hit the labor market hard.

"After the FOMC meeting, I think it's going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

"I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year," he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade's chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple's stock.

"The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple's volatility to carry over into the market volatility," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, registered their worst week since May 2010. In another bearish sign, the stock's 50-day moving average fell to $599.52 - below its 200-day moving average at $601.38.

"There's a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple," Aama said.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there's a decent chance that the market could rally before year end.

"Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it's hung in there in anticipation of something coming," he said.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on .L/O; Pan-European stock market outlook .EU/O; Tokyo stock market outlook .T/O; Wall St Week Ahead runs every Friday.)

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Egypt struggle seen costing Mursi, even if he wins

CAIRO (Reuters) - The crisis unleashed by President Mohamed Mursi's bid to wrap up Egypt's transition on his own terms has eroded his nation's faith in their nascent democracy and will complicate the already unenviable task of government.

His effort to drive through a constitution against the wishes of major sections of society, including a Christian minority, has damaged prospects for building consensus needed to tackle challenges ahead, such as fixing a broken economy.

Having promised to be a president for all, Mursi stands accused of putting the interests of his group, the Muslim Brotherhood, ahead of others who say their aspirations are not reflected in the draft to be put to a December 15 referendum.

On the other side, suspicions harbored by Islamists towards their secular-minded opponents have only deepened as a result of the turmoil ignited by Mursi's effort to fast-track the final stage of the transition from Hosni Mubarak's rule.

With the more extreme among them opposed to the very notion of democracy, the Islamists say their rivals are not respecting the rules of the game that put them in the driving seat by winning free and fair elections.

People anxious to see Egypt recover from two years of turbulence fear bad blood could persist and squash hopes for cooperation needed to help Mursi rule smoothly and deliver much-needed reforms.

"If they succeed in the referendum, they will see that as a step forward, but not without cost," said a Western diplomat.

Though Mursi won international praise for mediating a truce in Gaza, the violence on his own streets worries the West and particularly the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979. U.S. President Barack Obama told Mursi on Thursday of his "deep concern" about casualties during protests.

A victim of the polarization could be the Brotherhood's plans to forge electoral alliances with liberals in forthcoming parliamentary polls. The head of the Brotherhood's Freedom and Justice Party told Reuters this week he saw such alliances as preferable to an ideological tie-up with other Islamists.

The divisions are now playing out in the streets. Seven people were killed and hundreds wounded this week in clashes between Islamists and their rivals. A call by Mursi for dialogue was rebuffed by activists who are to protest again on Friday.

"We said that this state of polarization, if it was not dealt with properly, would reach this point, and it has," said Ayman Al-Sayyad, who quit his post as a Mursi adviser on Wednesday following an eruption of violence.

"This was the scene that we were trying to avoid," he added in an interview with al-Hayat television.

The inclusive image Mursi had tried to build around his administration was one of the first victims of the crisis that mushroomed following a November 22 decree that expanded his powers and protected his decisions from judicial review.

RESIGNATIONS

A Christian and a woman were among the first to resign from his staff, as surprised by the decree as most Egyptians. Despite an early bout of violence, Mursi showed no sign of wavering and appeared to brush off his critics.

"I see things more than they do," he told Time.

With speculation swirling around how he took the decision, Egyptians long suspicious of the Brotherhood have concluded Mursi is running the country at the group's command.

In response, the Islamists complain that many of Mursi's attempts at outreach were rebuffed early on. Their view of the opposition has grown dimmer through the crisis. Brotherhood members have started to dismiss opponents as "feloul", meaning "remnants" - a pejorative implying loyalty to Mubarak.

"The really unfortunate side effect of the last two weeks is the political atmosphere has become really toxic. I fear that could endure long past the current crisis," said Elijah Zarwan, a fellow with the European Council on Foreign Relations.

"The next government is going to have to move very quickly to address many problems and it will need cooperation. In the current atmosphere, it is hard to imagine others cooperating."

Such cooperation will be at a premium for introducing policies aimed at reining in a crushing budget deficit and staving off a balance of payments crisis. Egypt's economy has lost $70 billion to $80 billion of economic output since Mubarak was ousted, in one economist's estimate.

Top of the economic to-do list are measures to cut back on fuel subsidies - one of the biggest drains on state finances. Tweaks to such support are bound to be unpopular in a nation where both rich and poor have grown used to cheap petrol.

"He has inherited an economy that is weak and needs serious surgery, so he is going to have to make controversial decisions over the next year or so," said Simon Kitchen, strategist at EFG-Hermes, an Egyptian investment bank.

"Ideally you want to do that in an environment where you have some sort of political consensus," he said.

"THEY BURNED THEIR BRIDGES"

Some subsidy reform and other steps to cut waste are part of a program agreed in principle with the International Monetary Fund for $4.8 billion loan designed to support the budget.

The IMF board meets on December 19 to discuss approval of the loan, which would be seen by investors as a seal of approval for the government's reform program.

Besides the economy, Mursi needs wider backing to tackle other problems including a judiciary which his opponents agree needs overhaul. But even when he sacked the unpopular, Mubarak-era prosecutor general, Mursi was criticized for showing an autocratic streak in the way he went about it.

In the new system of government outlined in the draft constitution, Egypt's next parliament will have a say over the shape of government. A parliamentary election would go ahead some two months later if the constitution is approved in the referendum.

With that in mind, the Freedom and Justice Party is already eyeing alliances to fight the parliamentary election.

FJP leader Saad al-Katatni said in an interview his preference was for an alliance with liberals, not the hardline Islamists whose backing has helped Mursi through the crisis. "Our preferred option is that the alliance not be ideological so that we don't have a split in the nation," he said.

The Brotherhood had kept the nascent hardline Salafi parties at arm's length as they emerged after Mubarak's political demise. That trend has gradually been reversed as the Brotherhood has looked to fellow Islamists for support.

"They burned their bridges with the secular camp and relied heavily on the Salafi camp. We don't feel that is where they naturally want to be right now," said the Western diplomat, speaking on condition of anonymity.

Sentiment from liberal parties suggests the Brotherhood will struggle to convince liberals that it is a trustworthy partner.

"I don't think the man realizes the degree of rebellion and rage the people have," said Ahmed Said, head of the liberal Free Egyptians Party, referring to Mursi. "The country is totally divided and polarized. You have two nations now."

(Writing by Tom Perry; Editing by Peter Graff)

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The X Factor Reveals Its Four Semi-Finalists

TV Watch

The X Factor

By Aaron Parsley

12/06/2012 at 09:20 PM EST

There were tears on The X Factor Thursday night.

With only four spots in next week's semi-finals, the six acts who performed two songs each Wednesday night were a tense bunch. Especially after last week's shocking elimination that sent home fan favorite Vino Alan.

A majority of PEOPLE.com readers picked Demi Lovato's only remaining contestant, CeCe Frey, as the singer who most deserved elimination. Was she able to make it through one more week? Keep reading for all the results ...

CeCe Frey was the first to go.

"I'm proud of everything that I've done on this show," she said. "I hope I've taught everyone at home that you need to love who you are, because the more you love who you are, the less you're going to need anybody else to."

Her coach tried to avoid tears but shed a few anyway. "I've grown so close to you," Demi said. "And I'm just so proud of you."

Three acts were then declare safe: Simon Cowell's boy band, Emblem3; Britney Spears's frontrunner, Carly Rose Sonenclar; and L.A. Reid's country singer, Tate Stevens, also a frontrunner.

That left Team Britney's Diamond White and Simon's other group, Fifth Harmony, to sing for survival.

Fifth Harmony sang Mariah Carey's "Anytime You Need a Friend," and Diamond sang Lee Ann Womack's "I Hope You Dance."

As expected, Simon and Britney voted to send home each other's acts. But it was the end of the road for Diamond, after L.A. and Demi both voted to send her home as well.

"I'm just thinking of Cher Lloyd right now," she said of the "Want U Back" singer. "She came in fifth and look where she is."

Here's how the top four ranked:
1. Tate Stevens
2. Carly Rose Sonenclar
3. Emblem3
4. Fifth Harmony

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Stock index futures fall, focus on jobs data

LONDON (Reuters) - Stock index futures pointed to a lower open on Wall Street on Friday, with futures for the S&P 500, the Dow Jones and the Nasdaq 100 falling 0.1 to 0.2 percent.

U.S. non-farm employment, due at 8.30 a.m. EST, is forecast to have risen by 93,000 jobs last month after gaining 171,000 in October, according to a Reuters survey. The unemployment rate is seen holding steady at 7.9 percent.

Superstorm Sandy likely put a dent in U.S. jobs growth in November, temporarily interrupting a recently established trend of modestly rising payrolls.

Amarin Corporation was down 18.4 percent in late trading on Thursday after the bio-pharmaceutical company said it raised $100 million in non-equity financing that will help it form a sales force to launch its heart drug Vascepa, but disappointed investors hoping for a sale or partnership.

Smith & Wesson Holding Corp was up 5.8 percent, after the bell on Thursday following the release of its results, while GEO Group was up 6.2 percent after the company announced a special dividend.

Brent crude steadied above $107 per barrel, but prices were headed for their biggest weekly loss in more than a month on worries about the euro zone economy and a looming fiscal crisis in the United States, the world's top oil consumer.

European shares <.fteu3> were down 0.2 percent, pressured by lower German and Italian shares, after Germany's central bank cut its growth outlook for Europe's largest economy next year, and on political uncertainty in Italy.

U.S. stocks closed modestly higher on Thursday, a day ahead of the key monthly jobs report, as a rebound in shares of Apple helped boost technology shares.

The Dow Jones industrial average <.dji> rose 39.55 points, or 0.30 percent, to 13,074.04 at the close. The Standard & Poor's 500 Index <.spx> added 4.66 points, or 0.33 percent, to 1,413.94. The Nasdaq Composite Index <.ixic> gained 15.57 points, or 0.52 percent, to close at 2,989.27.

(Reporting by Atul Prakash)

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Tanks outside Mursi's palace, streets calmer

CAIRO (Reuters) - Egyptian army tanks deployed outside the presidential palace on Thursday in streets where supporters and opponents of President Mohamed Mursi had clashed into the early hours of the morning in violence that killed five people.

Armored troop carriers also moved into the roads around the palace, in what Egypt's state news agency said was a measure to secure the palace. The area had become a chaotic battleground between Mursi's Islamist backers and their opponents.

The soldiers' badges identified them as members of the Presidential Guard and Republican Guard, whose duties include guarding the presidency. At least five tanks and nine armored personnel carriers were seen near or around the palace.

The health ministry said five people had been killed and 350 wounded in bloodshed that has exacerbated the worst crisis since Mursi took office as Egypt's first president since a popular uprising overthrew Hosni Mubarak in February, 2011.

The military played a crucial role in ending Mubarak's 30-year rule by taking over from him to manage a transitional period, but it has stayed out of the latest crisis.

Mursi's opponents accuse him of seeking to create a new autocracy by awarding himself extraordinary powers in a decree on November 22 and were further angered when an Islamist-dominated assembly pushed through a draft constitution that opponents said did not properly represent the aspirations of the whole nation.

The president has defended his decree as necessary to prevent courts still full of judges appointed by Mubarak from derailing a constitution vital for Egypt's political transition.

Around the palace, traffic was moving through streets strewn with rocks thrown during violence in which petrol bombs and guns were also used. Hundreds of Mursi supporters were still in the area, many wrapped in blankets and some reading the Koran.

"We came here to support President Mursi and his decisions. He is the elected president of Egypt," said demonstrator Emad Abou Salem, 40. "He has legitimacy and nobody else does."

MUTUAL ACCUSATIONS

An opposition group called for more protests at the palace later on Thursday, setting the stage for further confrontation.

Mursi's opponents say the Muslim Brotherhood, the group that propelled the president to power in a June election, is behind the violence. The Brotherhood says the opposition is to blame and that the five dead were all Mursi supporters. The United States, worried about the stability of an Arab state which has a peace deal with Israel and which receives $1.3 billion in U.S. military aid, urged dialogue. Britain also called for restraint and an "inclusive" political process.

A presidential source said Mursi, silent in the last few days, was expected to make a statement later on Thursday.

Vice President Mahmoud Mekky proposed "personal ideas" for a negotiated way out on Wednesday, saying amendments to disputed articles in the constitution could be agreed with the opposition. A written agreement could then go to parliament, to be elected after a referendum on the constitution on December 15.

"There must be consensus," he told a news conference in the presidential palace as fighting raged outside on Wednesday. But the opposition stuck by its demand for Mursi to cancel the November 22 decree and postpone the referendum before any dialogue.

Protests spread to other cities, and offices of the Muslim Brotherhood's political party in Ismailia and Suez were torched.

But Mursi has shown no sign of buckling under pressure from protesters, confident that the Islamists, who have dominated both elections since Mubarak was overthrown, can win the referendum and parliamentary election to follow.

As well as relying on his Brotherhood power base, Mursi may also draw on a popular yearning for stability and economic revival after almost two years of political turmoil.

Opposition coordinator Mohamed ElBaradei said on Wednesday the street action and the polarization of society were pushing Egypt into violence and "could draw us to something worse".

The Egyptian pound plunged 4 percent on Thursday to its lowest level in eight years, after previously firming on hopes that a $4.8 billion IMF loan would stabilize the economy. The Egyptian stock market fell 4.4 percent after it opened.

(Additional reporting by Reuters TV; Tamim Elyan, Yasmine Saleh and Tom Perry, Writing by Edmund Blair and Tom Perry; Editing by Alistair Lyon and Giles Elgood)

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Guatemala detains McAfee, to expel him to Belize

GUATEMALA CITY (Reuters) – Guatemalan police arrested U.S. software guru John McAfee on Wednesday for illegally entering the country and said it would seek to expel him to neighboring Belize, which he fled after being sought for questioning over his neighbor’s murder.

McAfee, who had been in hiding for three weeks, crossed into Guatemala with his 20-year-old girlfriend to evade authorities in Belize who wanted to quiz him as “a person of interest” about the killing of fellow American Gregory Faull.

“He entered the country illegally and we are going to seek his expulsion for this crime,” Interior Minister Mauricio Lopez Bonilla said. McAfee was detained by Guatemalan police and a member of Interpol at the upscale Intercontinental hotel in Guatemala City.

One of Silicon Valley’s first entrepreneurs to build an Internet fortune, the 67-year-old made millions of dollars through the antivirus software that now carries his name.

McAfee’s behavior has been increasingly erratic in recent years but there is no international arrest warrant for him. Police in Belize say he is not a prime suspect.

Government spokesman Francisco Cuevas said the entrepreneur would be expelled to Belize and he expected the process to be completed by early Thursday morning.

Fernando Lucero, spokesman for Guatemala’s immigration department, saidimmediate deportation had been ruled out. McAfee’s lawyer Telesforo Guerra was seeking an injunction to have him released and the American said on his blog www.whoismcafee.com that he would not now be returned to the Belize border until a higher judge reviewed the case.

McAfee was taken to a residence belonging to the immigration department guarded by a small group of police.

He had been seeking political asylum in Guatemala, which has been embroiled in a long-running territorial dispute with Belize. .

Residents and neighbors on the Caribbean island of Ambergris Caye, where McAfee has lived in Belize for about four years, say he is eccentric, impulsive, volatile and at times unstable, citing his love of guns and young women.

McAfee has said he believes authorities in Belize will kill him if he turns himself in for questioning. Belize’s prime minister has denied this and called him paranoid and “bonkers.”

“It’s a wild, wild country,” McAfee told Reuters in an interview in his hotel room just hours before his detention.

“Everyone sees one part of Belize,” he said. “They think it’s a wonderful, peaceful, lovely place, blue waters, so McAfee has got to be crazy. Maybe I am crazy. If I were, I wouldn’t know.”

In Belize, he was often seen with armed bodyguards dressed in camouflage, pistols tucked into his belt. McAfee’s slain neighbor had complained about the loud barking of dogs that guarded his exclusive beachside compound.

His run-in with authorities in Belize is a world away from a successful life in the United States, where the former Lockheed systems consultant started McAfee Associates in the late 1980s. McAfee has no relationship now with the company, which was sold to Intel Corp.

NO REGRETS

There was already a case against McAfee in Belize for possession of illegal firearms, and police had previously raided his property on suspicion he was running a lab to make illegal synthetic narcotics.

He says he has not taken drugs since 1983.

“(Before then) I took drugs constantly, 24 hours of the day, I took them for years and years. I was the worst drug abuser on the planet,” McAfee said. “Then I finally went to Alcoholics Anonymous, and that was the end of it.”

But he has no regrets about the path his life has taken, or the loss of the lion’s share of his fortune over the years and says he is happier now that he cares less for material things.

“My life has not declined,” he said. “My life has been on the increase ever since I decided that stuff – houses, money – doesn’t mean much. I had more money than I could spend in million lifetimes. Why would I care?”

McAfee says he has been persecuted by Belize’s ruling party because he wouldn’t pay out some $ 2 million to it.

“The misunderstanding of the severity of their request for money was my big mistake,” McAfee said. “Had I known that, I would maybe have said $ 2 million is way too much. Let’s negotiate something, just don’t rape me for the next seven months. Writing a check would have been a lot easier.”

The party has denied soliciting money from him.

McAfee has been living in the tiny Central American nation for about four years, and wants to return to live there eventually. But he says he is being framed, and denies any involvement in his neighbor’s killing.

“We had one disagreement about a dog. I had disagreements with all my neighbors about my dogs. I had a disagreement with myself about my dogs. They were noisy,” he said.

“Why would I leave behind the body and all the evidence?” he asked. “I’m not stupid.”

(Additional reporting by Gabriel Stargardter; Writing by Simon Gardner; Editing by Philip Barbara, Lisa Shumaker and Patrick Graham)

Tech News Headlines – Yahoo! News

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Frank Ocean, Taylor Swift Collect Grammy Nominations

12/06/2012 at 01:00 AM EST

How FUN!

The Grammys handed out their nominations Wednesday night at a concert in Nashville and there was a decidedly youthful feel: Taylor Swift earned a nod for record of the year and the band FUN joined Frank Ocean with the trifecta of album and record of the year and best new artist.

In the country categories, Blake Shelton is up against Carrie Underwood for best solo performance and Miranda Lambert was nominated for best album.

Here are some of the major nominations. For a complete list go to Grammy.com:

Album of the Year:
El Camino – The Black Keys
Some Nights– FUN.
Babel – Mumford & Sons
Channel Orange – Frank Ocean
Blunderbuss – Jack White

Record of the Year:
Lonely Boy – The Black Keys
Stronger (What Doesn't Kill You) – Kelly Clarkson
We Are Young – FUN. featuring Janelle Monáe
Somebody That I Used To Know – Gotye Featuring Kimbra
Thinkin Bout You – Frank Ocean
We Are Never Ever Getting Back Together – Taylor Swift

Best New Artist:
Alabama Shakes
FUN
Hunter Hayes
The Lumineers
Frank Ocean

Song Of The Year:
"The A Team" – Ed Sheeran, songwriter (Ed Sheeran)
"Adorn" – Miguel Pimentel, songwriter (Miguel)
"Call Me Maybe" – Tavish Crowe, Carly Rae Jepsen & Josh Ramsay, songwriters (Carly Rae Jepsen)
"Stronger (What Doesn't Kill You)" – Jörgen Elofsson, David Gamson, Greg Kurstin & Ali Tamposi, songwriters (Kelly Clarkson)
"We Are Young" – Jack Antonoff, Jeff Bhasker, Andrew Dost & Nate Ruess, songwriters (FUN. featuring Janelle Monáe)

Best Country Solo Performance:
"Home" – Dierks Bentley
"Springsteen" – Eric Church
"Cost Of Livin'" – Ronnie Dunn
"Wanted" – Hunter Hayes
"Over" – Blake Shelton
"Blown Away" – Carrie Underwood

Best Country Album:
Uncaged – Zac Brown Band
Hunter Hayes – Hunter Hayes
Living For A Song: A Tribute To Hank Cochran – Jamey Johnson
Four The Record– Miranda Lambert
The Time Jumpers – The Time Jumpers

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Standard Chartered sees $330 million Iran fine, profit rise erodes

HONG KONG/LONDON (Reuters) - Standard Chartered expects to pay $330 million to settle a case with U.S. regulators for breaking sanctions on Iran, the Asian-focused bank said on Thursday, a second such penalty which could almost wipe out its profit growth this year.

Standard Chartered already paid $340 million to New York's Department of Financial Services (DFS) in the third quarter, and the London-based bank said the settlement with federal and other state regulators was expected "very shortly".

The original DFS fine will cut pretax profit growth this year to around 5 percent, from an underlying profit rise of more than 10 percent, the bank said in a trading update - so the additional payment could leave profits near flat on the year.

The DFS, New York's banking regulator, said Standard Chartered had hidden financial transactions with Iran. The bank agreed to pay the civil penalty after its stock dropped due to the allegations and a threat to revoke its license to do business in New York.

The United States has led the drive for sanctions, hoping to halt an Iranian nuclear program which Washington suspects is aimed at producing weapons although Tehran says it is peaceful.

Even slim earnings growth would mean a 10th straight year of record profits, as StanChart has ridden on Asia's rise through much of the last decade, allowing it to continue hiring and increasing earnings when much of the industry is shrinking.

Finance Director Richard Meddings estimated Standard Chartered could have to pay $320-330 million next year under a British bank levy. This is about $65 million more than originally expected, due to finance minister George Osborne's announcement on Wednesday that the levy would be raised.

Standard Chartered expects to pay about $210 million under the tax this year, up from $165 million in 2011, and warned that there has been a "significant and increasing cost of regulation", in particular for liquidity.

The levy has been criticized for being harder on banks that are expanding their balance sheet, even outside Britain. These include Standard Chartered, which has threatened to quit London if the cost of being based in Britain becomes too much.

Despite its regulatory costs, the bank is one of the few still hiring and Meddings told analysts he expected to add more staff this year than the previous guidance of about 1,500.

"We expect it now to be through 2,000 by the end of the year as we continue to hire. A lot of that hiring is in the back office support functions and compliance and risk, but it's also in consumer banking," he told analysts on a call.

Meddings said the bank would add a similar number of jobs next year. "We'd expect to be at around the same level for next year," he told Reuters.

By contrast, most rivals have been cutting, with Citi saying on Wednesday it was cutting 11,000 jobs.

By 5:30 a.m. EDT StanChart's London shares were up 0.9 percent, trailing a 1.1 percent rise in European bank shares.

A LID ON COSTS

A rise in the number of unemployed bankers meant Standard Chartered could keep a lid on costs, with revenue growing faster than costs - a phenomenon known in financial industry jargon as "positive jaws". However, cost growth in its wholesale bank, effectively its investment banking arm, would be higher than income growth due to the DFS fine, it said.

For much of 2010, StanChart was hit by ever-rising costs as an increasing number of banks and brokerages tried to expand in Asia. Since then, various minor players including Samsung Securities and KBW have begun pulling out.

The bank does not release specific numbers in its trading updates, which it keeps for annual results typically in late February. It singled out Malaysia, China and Indonesia as regions where income grew by at least 10 percent.

In Hong Kong, its biggest market, income grew at a high single-digit percentage, the bank said.

StanChart's Hong Kong-listed shares are up 9 percent year-to-date, lagging the 20 percent rise on the Hang Seng Index.

Asset quality remained good, the bank said, with loan impairments within the wholesale bank expected to be below the levels seen in the first half of this year. For the consumer bank, loan impairment is expected to increase by at least 10 percent from the first half.

However, StanChart pointed to India and the Middle East as two markets where it was watchful for asset quality. Slowing growth in some emerging markets has raised concern that StanChart could be hit by a rise in bad loans.

(Editing by Alex Richardson and David Stamp)

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Egypt's Mursi back at palace after night of protests

CAIRO (Reuters) - Egyptian President Mohamed Mursi returned to work on Wednesday a day after slipping out of his palace when it came under siege from protesters furious at his drive to push through a new constitution after temporarily expanding his own powers.

The Health Ministry said 35 protesters were wounded and the Interior Ministry said 40 policemen were hurt in clashes around the presidential palace on Tuesday. While they fired tear gas when protesters breached barricades to reach the palace walls, riot police appeared to handle the disturbance with restraint.

A presidential source said Mursi was back in his office even though up to 200 demonstrators had camped out near one entrance to the palace in the northern Cairo district of Heliopolis overnight. Traffic was flowing normally in the area where thousands of people had protested the night before, and riot police had been withdrawn, a Reuters witness said.

The rest of the Egyptian capital Cairo was calm, despite the political furore over Mursi's November 22 decree handing himself wide powers and shielding his decisions from judicial oversight.

The Islamist leader says he acted to prevent courts from derailing a newly drafted constitution that will go to a referendum on December 15, after which Mursi's decree will lapse.

"Our demands from the president: retract the presidential decree and cancel the referendum on the constitution," read a placard hung by demonstrators on a palace gate.

The crowds had gathered in what organizers had dubbed a "last warning" to Mursi. "The people want the downfall of the regime!" they chanted, roaring the signature slogan of last year's uprising that ousted President Hosni Mubarak.

But the "last warning" may turn out to be one of the last gasps for a disparate opposition which has little chance of stopping next week's vote on a constitution drafted over six months and swiftly approved by an Islamist-dominated assembly.

Facing the gravest crisis of his six-month-old tenure, the Islamist president has shown no sign of buckling under pressure, confident that the Muslim Brotherhood and its Islamist allies can win the referendum and a parliamentary election to follow.

Many Egyptians yearn for an end to political upheaval that has scared off investors and tourists, worsening an economic crisis.

COURT PROTEST

Dozens of pro-Mursi demonstrators, watched by equal numbers of police, waved flags outside the Supreme Constitutional Court, whose rulings have complicated the Islamists' rise to power.

"You are not a political agency," read one banner held by the demonstrators, addressing a court that in June ordered the dissolution of the Islamist-led lower house of parliament.

Mursi issued his November 22 decree temporarily putting his actions above the law to forestall any court ruling to dissolve the upper house or the assembly that wrote the constitution.

Now that the document has been approved and preparations for the referendum are under way, it is not clear whether the president might roll back his decree as a sop to the opposition.

State institutions, with the partial exception of the judiciary, have mostly fallen in behind Mursi, who emerged from the Muslim Brotherhood to win a free election in June.

The army, which backed all Egypt's previous presidents in the republic's six-decade history, has gone back to barracks, having apparently lost its appetite to intervene in politics.

In a bold move, Mursi sacked Mohamed Hussein Tantawi, the Mubarak-era army commander and defense minister, in August and removed the sweeping powers that the military council which took over after Mubarak's fall had grabbed two months earlier.

The liberals, leftists, Christians, ex-Mubarak followers and others opposed to the president who was narrowly elected in June against a secular rival have yet to generate a mass movement or a grassroots political base to challenge the Brotherhood.

Protesters have scrawled "leave" over Mursi's palace walls, but the president has made clear he is not going anywhere.

"The crisis we have suffered for two weeks is on its way to an end, and very soon, God willing," Saad al-Katatni, head of the Brotherhood's Freedom and Justice Party, told Reuters on Tuesday, saying approval of the constitution in the forthcoming referendum would end the turmoil set off by Mursi's decree.

The Islamic Forces Coalition, which includes the Brotherhood, Salafis and other Islamic parties, condemned the "insulting" demonstrations outside the presidential palace.

"We remind (opposition figures) that the deciding factor in these differences is what the ballot boxes say, not what sabotage attempts create," it said in a statement.

Investors have seized on hopes that Egypt's turbulent transition, which has buffeted the economy for two years, may now be heading for calmer waters, sending stocks 1 per cent higher in early trading after a 3.5 percent rally on Tuesday.

The most populous Arab nation has turned to the IMF for a $4.8 billion loan to help it out of a crisis that has depleted its foreign currency reserves.

The government said on Wednesday the process was on track and Egypt's request would go to the IMF board as expected.

(Additional reporting by Tom Perry; Writing by Alistair Lyon; Editing by Mark Heinrich)

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The Voice Reveals Top Four Contestants

TV Watch

By Julia Haskins

12/04/2012 at 09:35 PM EST

The Voice"'s top six contestants were under double pressure Monday night when they had to sing two songs each. But there was even more stress at Tuesday's elimination.

"It went as well as it could have gone," Team Blake's Terry McDermott said on Monday of his performances of "I Want to Know What Love Is" and Rod Stewart's "Stay with Me." "There was a lot of pressure stripping a song down, but it worked to my advantage."

"I felt good," said Team Cee Lo's Trevin Hunte, who performed "Walking on Sunshine" and Jennifer Hudson's "And I Am Telling You (I'm Not Going)." "I'm confident. I feel like I've really grown. I'm definitely happy with my performance. I just want to see how America votes."

His chance came Tuesday when he and McDermott stood alongside competitors Nicholas David (Team Cee Lo), Cassadee Pope (Team Blake), Melanie Martinez and Amanda Brown (both Team Adam) to hear host Carson Daly reveal the voting results. Keep reading to find out ...

America saved McDermott, Hunte and Pope, but Martinez said goodbye to the competition for good. "I love all of you who have supported me," she said to her fans. "I'm just so grateful for you."

Brown also met the same fate, making David the final member of the top four.

The semi-final show airs Monday at 8:00 p.m. on NBC.

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Study: Drug coverage to vary under health law

WASHINGTON (AP) — A new study says basic prescription drug coverage could vary dramatically from state to state under President Barack Obama's health care overhaul.

That's because states get to set benefits for private health plans that will be offered starting in 2014 through new insurance exchanges.

The study out Tuesday from the market analysis firm Avalere Health found that some states will require coverage of virtually all FDA-approved drugs, while others will only require coverage of about half of medications.

Consumers will still have access to essential medications, but some may not have as much choice.

Connecticut, Virginia and Arizona will be among the states with the most generous coverage, while California, Minnesota and North Carolina will be among states with the most limited.

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Online:

Avalere Health: http://tinyurl.com/d3b3hfv

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Stock futures signal gains at open

PARIS (Reuters) - Stocks were indicated to open higher on Wednesday, with futures for the S&P 500 up 0.35 percent, Dow Jones up 0.43 percent and Nasdaq 100 up 0.41 percent at 4:55 a.m. EDT.

* European shares resumed a recent sharp rally on Wednesday after comments from China's new leader boosted global growth expectations.

* Chinese Communist Party chief Xi Jinping said the country will maintain its fine-tuning of economic policies in 2013 to ensure stable economic growth, sparking a sharp rally in Chinese shares with the Shanghai Composite Index <.ssec> surging 2.9 percent.

* Xi listed tax reform, urbanization and allowing the market to play a bigger role in setting resource prices as among his key priorities.

* On the domestic front, investors awaited ADP's November employment report, due at 8:15 a.m. EDT. Economists in a Reuters survey expect 125,000 jobs were created versus 158,000 in October. Other data on Wednesday include factory orders and ISM's November non-manufacturing index, both due at 11 a.m. EDT.

* Repsol filed a U.S. lawsuit to block Chevron Corp's deal with Argentina's YPF , ramping up the Spanish oil company's legal response to the loss of its assets in Argentina.

* Programmable chipmaker Altera Corp trimmed its fourth-quarter revenue expectation citing fewer orders for its older products, sending its shares down 2 percent after the bell.

* Aerovironment Inc posted a better-than-expected quarterly profit as its unmanned aircraft unit sold more fixed-price products, sending its shares up 9 percent after the bell.

* Pandora Media Inc

lowered its fourth-quarter guidance, blaming a pull-back by advertisers on concerns about the U.S. budget, but analysts suggested it was due more to increasing competition.

* The U.S. Senate on Tuesday voted 98-0 to approve a wide-ranging defense bill that authorizes $631.4 billion in funding for the U.S. military, the war in Afghanistan and nuclear weapons.

* Walt Disney gave a much needed boost to Netflix , becoming the first major Hollywood studio to use the video service to bypass premium channels like HBO that traditionally controlled the delivery of movies to TV subscribers.

* The U.S. securities regulator is investigating a $10 million stock sale in March by Steven Fishman, chief executive of close-out retailer Big Lots Inc who announced his retirement on Tuesday, the Wall Street Journal reported, citing a person familiar with the inquiry.

* U.S. stocks finished slightly lower in a quiet session on Tuesday as the back-and-forth wrangling over the "fiscal cliff" gave investors little reason to act.

* The Dow Jones industrial average <.dji> fell 13.82 points, or 0.11 percent, to 12,951.78 at the close. The Standard & Poor's 500 Index <.spx> dipped 2.41 points, or 0.17 percent, to 1,407.05. The Nasdaq Composite Index <.ixic> shed 5.51 points, or 0.18 percent, to close at 2,996.69.

(Reporting by Blaise Robinson; Editing by John Stonestreet)

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Israel says will stick with settlement plan despite condemnation

JERUSALEM (Reuters) - Israel rejected concerted criticism from the United States and Europe on Monday over Prime Minister Benjamin Netanyahu's decision to expand settlement building after the United Nations' de facto recognition of Palestinian statehood.

Washington urged Israel to reconsider its plan to erect 3,000 more homes in the occupied West Bank and East Jerusalem, saying the move hindered peace efforts with the Palestinians.

Britain, France, Spain, Sweden and Denmark summoned the Israeli ambassadors in their capitals to give similar messages.

An official in Netanyahu's office said Israel would not bend. "Israel will continue to stand by its vital interests, even in the face of international pressure, and there will be no change in the decision that was made," the official said.

Angered by the U.N. General Assembly's upgrading on Thursday of the Palestinians' status in the world body from "observer entity" to "non-member state", Israel said the next day it would build the new dwellings for settlers.

Such projects, on land Israel captured in a 1967 war, are considered illegal by most world powers and have routinely drawn condemnation from them. Approximately 500,000 Israelis and 2.5 million Palestinians live in the two areas.

In a shift that raised the alarm among Palestinians and in world capitals, Netanyahu's pro-settler government also ordered "preliminary zoning and planning work" for thousands of housing units in areas including the "E1" zone east of Jerusalem.

Such construction in the barren hills of E1 has never been put into motion in the face of opposition from Israel's main ally, the United States. Building in the area could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for a contiguous state.

Israeli television stations reported Jerusalem's district planning commission would soon approve plans for several thousand more housing units, including more than 1,000 Israel had shelved two years ago after angering Washington by publishing the plans before a visit by Vice President Joe Biden.

The settlement plan, U.N. Secretary-General Ban Ki-moon said, would deal "an almost fatal blow" to a two-state solution to the Israeli-Palestinian conflict.

French President Francois Hollande said he was "extremely concerned" and Washington made clear it would not back such Israeli retaliation over the U.N. vote, sought by Palestinians after peace talks collapsed in 2010 over settlement building.

"We urge Israeli leaders to reconsider these unilateral decisions and exercise restraint as these actions are counterproductive and make it harder to resume direct negotiations to achieve a two state solution," White House spokesman Jay Carney told a briefing.

Ahead of a Netanyahu visit this week, Germany, considered Israel's closest ally in Europe, urged it to refrain from expanding settlements, and Russia said it viewed the Israeli moves with serious concern.

RETALIATION

Israeli Finance Minister Yuval Steinitz said Israel could not have remained indifferent to the Palestinians' unilateral move at the United Nations.

"I want to tell you that those same Europeans and Americans who are now telling us 'naughty, naughty' over our response, understand full-well that we have to respond, and they themselves warned the Palestinian Authority," he said.

Palestinian chief negotiator Saeb Erekat said building in E1 "destroys the two-state solution, (establishing) East Jerusalem as the capital of Palestine and practically ends the peace process and any opportunity to talk about negotiations in the future".

The United States, one of the eight countries to vote alongside Israel against the Palestinian resolution at the General Assembly, has said both were counterproductive to the resumption of direct peace talks.

In Europe, only the Czech Republic voted against the status upgrade while many countries, including France, backed it. Netanyahu plans to visit Prague this week to express his thanks.

In the Gaza Strip, Sami Abu Zuhri, spokesman for the governing Hamas Islamist movement, called the settlements "an insult to the international community, which should bear responsibility for Israeli violations and attacks on Palestinians".

Israeli police arrested three Jewish settlers on Monday whom they suspect of arson and other crimes against Palestinian property in the West Bank, including the torching of a car.

Attackers have often proclaimed they are exacting a "price tag" for steps taken against the settler movement by Palestinians, or by the Israeli government.

Alongside the settlement plans, Israel announced it would withhold about $100 million in Palestinian tax revenues from the Palestinian Authority, which exercises limited self-rule in the West Bank, saying Palestinians owed $200 million to Israeli firms.

"These are not steps towards peace, these are steps towards the extension of the conflict," Spanish Foreign Minister Jose Manuel Garcia-Margallo said.

Only three weeks ago, Netanyahu won strong European and U.S. support for a Gaza offensive that Israel said was aimed at curbing persistent cross-border rocket fire.

Favored by opinion polls to win a January 22 national election, he brushed off the condemnation and complaints at home that he is deepening Israel's diplomatic isolation.

Netanyahu told his cabinet on Sunday that his government "will carry on building in Jerusalem and in all the places on the map of Israel's strategic interests".

But while his housing minister has said the government would soon invite bids from contractors to build 1,000 homes for Israelis in East Jerusalem and more than 1,000 in West Bank settlement blocs, the E1 plan is still in its planning stages.

"No one will build until it is clear what will be done there," the minister, Ariel Attias, said on Sunday.

Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush, and the area has been under the scrutiny of his successor, Barack Obama.

Israel cites historical and Biblical links to the West Bank and Jerusalem and regards all of the holy city as its capital, a claim that is not recognized internationally.

(Additional reporting by Crispian Balmer, Dan Williams, Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Steve Gutterman in Moscow, Gareth Jones in Berlin, John Irish and Elizabeth Pineau in Paris and Tim Castle in London; writing by Jeffrey Heller; editing by Philippa Fletcher)

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Facebook voting begins on Instagram data-sharing, email privacy

SAN FRANCISCO (Reuters) – Facebook Inc opened the polls on Monday for its roughly 1 billion users to vote on a variety of changes to the social network‘s policies, including a proposal to scrap the user voting system that Facebook introduced in 2009.

Facebook also said it had “clarified” some of the proposed changes, specifying that a new policy allowing it to share user data with recently acquired photo-application Instagram will be carried out in compliance with applicable laws and that Facebook will seek user consent when necessary.

The proposed changes, which Facebook announced on November 21, generated roughly 89,000 user comments as well as concerns from some privacy-advocacy groups and a request for more information from the Data Protection Commission in Ireland, where Facebook’s European business has its headquarters.

“Based on your feedback and after consultation with our regulators, including the Irish Data Protection Commissioner‘s Office, we’ve further clarified some of our proposals,” said Elliot Schrage, Facebook Vice President of Communications, Public Policy and Marketing in a post on Facebook’s company blog on Monday.

Facebook is proposing to eliminate the 4-year-old system that allows users to vote on changes to its governance policies. The company says the voting system hasn’t functioned as intended and is no longer suited to its current situation as a large publicly traded company subject to oversight by various regulatory agencies.

Facebook said on Monday that it would incorporate user suggestions for creating new tools to “enhance communication” on privacy and governance matters.

Another proposal would loosen the restrictions on how members of the social network can contact other members using the Facebook email system. The company said it planned to replace the “Who can send you Facebook messages” setting with new filters for managing incoming messages.

Facebook’s potential information sharing with Instagram, a photo-sharing service for smartphone users that it bought in October, flows from proposed changes that would allow the company to share information between its own service and other businesses or affiliates it owns.

The change could open the door for Facebook to build unified profiles of its users that include people’s personal data from its social network and from Instagram, similar to recent moves by Google Inc.

Facebook said on Monday that the proposed change was “standard in the industry” and “promotes the efficient and effective use of the services Facebook and its affiliates,” such as allowing users in the U.S. to interact with users in Europe.

“This provision covers Instagram and allows us to store Instagram’s server logs and administrative records in a way that is more efficient than maintaining totally separate storage systems,” the company wrote in a separate post on its website Monday titled “explanation of changes”.

“Where additional consent of our users is required, we will obtain it,” Facebook said.

Facebook users have until December 10 to vote on the policies using a special third-party application provided by Facebook and Facebook said the results will be certified by an independent auditor.

The vote is only binding if at least 30 percent of users take part, and two prior votes never reached that threshold.

(Reporting By Alexei Oreskovic; editing by Andrew Hay)

Tech News Headlines – Yahoo! News

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Fossil fuel subsidies in focus at climate talks

DOHA, Qatar (AP) — Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to climate change, it's more like a curse.

Qatar — the host of U.N. climate talks that entered their final week Monday — is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support — an imbalance that is just starting to earn attention in the divisive negotiations on curbing the carbon emissions blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an advocacy group for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for Economic Cooperation and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in climate negotiations, which in two decades have failed to halt the rising temperatures that are melting Arctic ice, raising sea levels and shifting weather patterns with impacts on droughts and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned climate treaty is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with climate change.

"It's going to oil and coal companies that don't need it in the first place," he said.

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Associated Press writers Abdullah Rebhy in Doha, Qatar, and Brian Murphy in Dubai, United Arab Emirates, contributed to this report

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Karl Ritter can be reached at www.twitter.com/karl_ritter

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Stock futures signal slightly higher open

LONDON (Reuters) - Stock futures pointed to a slightly higher open on Wall Street on Tuesday, with futures for the Standard & Poor's 500, the Dow Jones and the Nasdaq 100 all up 0.1 percent.

* The White House dismissed a "fiscal cliff" proposal from congressional Republicans on Monday that included tax reforms and spending cuts, saying it did not meet President Barack Obama's pledge to raise taxes on the wealthiest Americans.

* ICSC/Goldman Sachs release chain store sales for the week ended December 1 at 7:45 a.m. EDT. In the previous week, sales rose 3.3 percent.

* U.S. agribusiness giant Archer Daniels Midland Co tightened its grip on GrainCorp Ltd , hiking its bid to $2.9 billion and buying more shares, but may need to offer more to win over Australia's last major independent grains handler.

* Cerberus Capital Management LP is in talks to join Virtu Financial LLC's bid for U.S. brokerage Knight Capital Group Inc , the Wall Street Journal reported, citing people familiar with the discussions.

* Redbook releases its Retail Sales Index of department and chain store sales for December at 8:55 a.m. EDT. In the prior period, sales rose 0.8 percent.

* Qualcomm Inc will invest as much as $120 million in Sharp Corp , a cash injection likely to make it the struggling Japanese TV maker's biggest shareholder, and to boost Sharp's efforts to remain viable.

* At 9:45 a.m. EDT, the Institute for Supply Management-New York releases the November index of regional business activity.

* Chevron Corp's most costly individual project is about to get even more expensive. The U.S. energy company is expected to reveal this week a highly anticipated mark-up on the price tag for the Gorgon liquefied natural gas (LNG) export complex on a remote island off Western Australia.

* Shares in auto parts retailer Pep Boys-Manny Moe and Jack were down 8 percent after the bell on Monday following the release of its results.

* Autozone , the largest U.S. auto parts retail chain, posts quarterly results.

* European Union finance ministers will try to finalize plans to put the European Central Bank in charge of supervising all euro zone banks on Tuesday, but divisions over how ECB oversight will work threaten to undermine one of Europe's boldest reforms.

* European stocks edged higher in morning trade, helped by defensive stocks including leading pharmaceuticals Sanofi and Roche . <.eu/>

* At 4:44 a.m. EDT, the FTSEurofirst 300 <.fteu3> was up 0.3 percent, led by aerospace group EADS as hopes grew its shareholders were close to an agreement to overhaul its shareholder structure.

* U.S. stocks struggled on Monday to extend the previous week's gains, dropping as disappointing U.S. factory numbers dampened optimism about China's economic growth.

* The Dow Jones industrial average <.dji> fell 59.98 points, or 0.46 percent, to 12,965.60 at the close. The Standard & Poor's 500 Index <.spx> declined 6.72 points, or 0.47 percent, to 1,409.46. The Nasdaq Composite Index <.ixic> dropped 8.04 points, or 0.27 percent, to end at 3,002.20.

(Reporting by Atul Prakash; Editing by Susan Fenton)

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North Korea urged to drop rocket launch plan

MOSCOW/BEIJING (Reuters) - Russia and China urged North Korea on Monday not to go ahead with a plan for its second rocket launch of 2012, with Moscow saying the launch would violate restrictions imposed by the U.N. Security Council.

North Korea's state news agency on Saturday announced the decision to launch another space satellite and reportedly told neighbors it would take a similar path to that planned for a failed rocket launch in April.

"We urgently appeal to the government (of North Korea) to reconsider the decision to launch a rocket," the Russian Foreign Ministry said in a statement.

Echoing its criticism of the April launch, Russia said North Korea had been warned not to ignore a U.N. Security Council resolution which "unambiguously prohibits (it) from launching rockets using ballistic technology".

China was not so direct in its criticism of North Korea, but urged "all sides" not to take any action that "worsens the problem".

"China believes that maintaining peace and stability on the Korean peninsula and in Northeast Asia accords with the interests of all sides and is the joint responsibility of all sides," Foreign Ministry spokesman Hong Lei told reporters.

"In the present circumstances, we hope all sides can be calm and restrained and not take any moves to worsen the problem. China will remain in touch and coordinate with all sides."

In Washington, U.S. State Department spokeswoman Victoria Nuland condemned the launch plan on Sunday as a provocative threat to the Asia-Pacific region.

ELECTION IN SOUTH

North Korea says its rockets are used to put satellites into orbit for peaceful purposes. Russia said in its statement North Korea would be allowed only to exercise its right to peaceful activity in space if the U.N.-imposed restrictions were lifted.

The warnings come just weeks before South Korea's December 19 presidential election in which how to handle North Korea is a major campaign issue. The isolated North has for years tried to influence major events in the South by issuing propaganda or launching armed attacks.

North and South Korea have been technically at war since their 1950-53 conflict ended in a truce, not a peace treaty, and regional powers have for years been trying to rein in the North's nuclear program.

Countries trying to stop North Korea's arms program believe it is using rocket launches to perfect technology to build a missile arsenal capable of delivering a nuclear warhead to the United States.

North Korea is under U.N. sanctions that ban trading in missile or nuclear technology that have driven its already dire economy deeper in trouble by cutting off what was once a lucrative source of hard cash.

Russia has often balanced criticism of Soviet-era client state North Korea's nuclear activities and missile launches with calls on other powers to refrain from belligerent actions against it, which Russia says can be counterproductive.

Russia is a permanent member of the U.N. Security Council and is upset by any defiance of council resolutions. Past launches by Pyongyang have caused concern among Russians living near the country's border with North Korea.

(Additional reporting by Ben Blanchard in Beijing; Writing by Steve Gutterman and Nick Macfie; Editing by Robert Birsel)

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U.S. election, iPhone 5, Kardashian top Yahoo! 2012 searches

LOS ANGELES (Reuters) – The U.S. presidential election became the most-searched item and Kim Kardashian was the most-searched person on Yahoo! in a year when online searches were dominated by big news stories and pop culture obsessions, the search engine company said on Monday.

The search term “election” topped the list of searches, led not only by extensive media coverage but also widening conversation on online social media platforms.

The term “political polls” was No. 8 of the top 10 Yahoo! searches of the year.

“The 2012 elections dominated the online searches, which is amazing because if something is in the news, it’s already accessible … people were really saturated by it, but even so, that was a key word that people typed throughout the year,” Vera Chan, Yahoo!’s web trend analyst, said in a conference call.

Chan said only two other news stories have topped the list in the past decade, those being the death of Michael Jackson in 2009 and the BP oil spill in 2010.

“iPhone 5″ came in at No. 2, which Chan said was interesting “in a post-Steve Jobs era” because while Apple Inc’s iPhone has featured regularly in the top searches since the first generation emerged in 2007, this was the first time a specific model had appeared high on the list.

Reality star Kim Kardashian was the most-searched person on the website, coming in at No. 3 and leading six famous women in the top 10.

Chan said Kardashian’s “notoriety has kept her at the top,” citing her ongoing divorce saga with ex-husband Kris Humphries, her high-profile relationship with rapper Kanye West and her E! channel reality shows.

Sports Illustrated cover model Kate Upton, British royal Kate Middleton, late singer Whitney Houston, troubled former child star Lindsay Lohan and pop star and former “American Idol” judge Jennifer Lopez all featured in the top 10 after being in the news prominently throughout the year.

Middleton, who was followed eagerly by fans and critics in her first year as a royal married to Britain’s Prince William and being a staple at the London Olympics and the Queen’s Diamond Jubilee, also garnered the most-searched scandal of the year when a French magazine published photos of her topless.

“olympics” came in at No. 7 on the list, as many turned to online media to watch and keep tabs on the global sporting event held in London during the summer.

On Yahoo!’s separate list of top-searched obsessions, pop culture dominated this year, with “The Hunger Games,” reality star Honey Boo Boo, erotic novel “Fifty Shades of Grey,” British boy band One Direction, Carly Rae Jepsen’s hit song “Call Me Maybe” and Korean rapper Psy’s “Gangnam Style” featuring in the top 10.

Yahoo! Inc compiles its annual search lists based on aggregated visitor activity on the network and billions of consumer searches.

(Editing by Eric Walsh)

Internet News Headlines – Yahoo! News

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Kellan Lutz, Hugh Jackman Take Bites and Swipes &#38; More Casting News

By Julia Haskins

12/02/2012 at 07:00 PM EST

Kellan Lutz (left) and Hugh Jackman

Christopher Polk/Getty, Han Myung-Gu/WireImage

It's comeback time. Whether seeking revenge or reprising beloved roles, a fresh crop of movies shows that the best characters always come back for more.

Twilight's Kellan Lutz feasts on others as a vampire, but this time, he's utilizing his own body for powers, Zimbio reports.

The actor will star in Tatua as a tattooed assassin whose weapons are extracted from the ink on his body. The process is a strain on the hit man, but he must put that aside when his son is kidnapped by a dangerous foe.

Hugh Jackman is set to reprise his role as Wolverine in
X-Men: Days of Future Past, the Hollywood Reporter. Ian McKellen (Magneto) and Patrick Stewart (Professor Xavier), will also be joining Jennifer Lawrence, James McAvoy, Michael Fassbender and Nicholas Hoult.

Charlize Theron will star in an adaptation of the final installment of a South Korean revenge trilogy, the Hollywood Reporter also says. The original movie revolves around a woman wrongfully imprisoned for 13 years who then sets out to seek her long-awaited revenge. Writer William Monahan says the English-language remake will be "very American – and very unexpected."

The made-for-TV Disney channel movie Life-Size is getting a sequel, Variety reports. Tyra Banks will reprise her role as Eve, the doll who comes to life, and also executive produce the movie. No word yet on whether Lindsay Lohan, who played Eve's owner, will be making a return.

Also coming soon:

Beyoncé won't be slowing down after her Super Bowl performance in February. Just a couple weeks later, she'll introduce her still untitled, feature-length documentary on HBO, Deadline reports. The documentary airs Feb. 16.

Bridesmaids' Rose Byrne will be going through the motions as a newlywed in I Give it a Year, Zimbio reports. As if being newly married wasn't tough enough, the "too perfect" ex Anna Faris will be shaking up an already teetering balance.

Cate Blanchett will be stirring up her wicked ways as the evil stepmother in a live-action adaptation of Disney's Cinderella, also according to Zimbio.

And George Clooney is sticking to his winning formula by joining forces with his Argo team to produce an untitled crime drama, Variety reports.

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