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.

___

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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