Bill Clinton: Extend all tax cuts temporarily

Former President Bill Clinton speaks during a campaign event for President Barack Obama at the Waldorf Astoria, Monday, June 4, 2012, in New York.

WASHINGTON (AP) -- Former President Bill Clinton said Tuesday that broad tax cuts that expire in January should be temporarily renewed, including for the wealthiest Americans, to give lawmakers time to reach a deal on a longer-term extension that should exclude the rich.

Clinton's comments were in contrast to President Barack Obama, whose re-election he is supporting. Obama has opposed renewing the tax reductions for people earning over $250,000 a year, saying they must contribute to the effort to control rampant federal deficits.

Reductions in income tax rates and other levies first enacted under President George W. Bush expire in January, at the same time that $1.2 trillion in automatic spending cuts begin to take effect. The nonpartisan Congressional Budget Office and others have warned that letting both events occur would suck so much money out of the economy that it could spark a renewed recession next year.

"What I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long-term debt reduction plan as soon as they can, which presumably will be after the election," Clinton said on CNBC's "Closing Bell With Maria Bartiromo."

Asked whether that meant extending the tax cuts, Clinton said, "They will probably have to put everything off until early next year. That's probably the best thing to do right now."

He also said Republicans will press to include the wealthy in a permanent extension of the tax cuts, adding, "I don't think the president should do that."

White House officials would not comment immediately on Clinton's remarks. But officials pointed out that Obama has said repeatedly that he would not extend the Bush tax cuts for higher earners after they expire.

After the interview, Clinton spokesman Matt McKenna said the former president has said before that he favored extending all the tax cuts as part of a compromise tax and jobless benefits bill in 2010, "but does not believe the tax cuts for the wealthiest Americans should be extended again."

Republicans have insisted that tax rates for the rich should be kept low, saying many of them run companies that create jobs.

Besides the spending cuts and expiration of the tax cuts, the government is expected to need a renewal of its authority to borrow money and avoid a federal default by early next year, something that is up to Congress to decide. Without action, January will also see an end to a one-year Social Security payroll tax cut and to a provision avoiding deep cuts in Medicare reimbursements to doctors.

A postelection lame duck session of Congress is expected to address those issues, with the results depending on who wins the White House and control of the House and Senate on Election Day Nov. 6. Many lawmakers believe final decisions won't be made until next year.

Last week, Clinton said GOP presidential challenger Mitt Romney had a "sterling" record at private equity firm Bain Capital, departing from efforts by Obama's campaign to criticize the Republican's experience there as having little to do with job creation.

Obama and Clinton have improved their relationship since 2008, when Obama defeated Hillary Rodham Clinton in a bitter Democratic contest for the presidential nomination.

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15 million of world's babies are born prematurely

A mother carrying her unnamed twin baby, 11 days old, in a Care center

WASHINGTON (AP) -- About 15 million premature babies are born every year - more than 1 in 10 of the world's births and a bigger problem than previously believed, according to the first country-by-country estimates of this obstetric epidemic.

The startling toll: 1.1 million of these fragile newborns die as a result, and even those who survive can suffer lifelong disabilities.

Most of the world's preemies are born in Africa and Asia, says the report released Wednesday.

It's a problem for the U.S., too, where half a million babies are born too soon. That's about 1 in 8 U.S. births, a higher rate than in Europe, Canada, Australia or Japan - and even worse than rates in a number of less developed countries, too, the report found.

But the starkest difference between rich and poorer countries: Survival.

"Being born too soon is an unrecognized killer," said Dr. Joy Lawn of Save the Children, who co-authored the report with the March of Dimes, World Health Organization and a coalition of international health experts. "And it's unrecognized in the countries where you could have a massive effect in reducing these deaths."

Sophisticated and expensive intensive care saves the majority of preterm babies in the U.S. and other developed nations, even the tiniest, most premature ones. The risk of death from prematurity is at least 12 times higher for an African newborn than for a European baby, the report found.

Globally, prematurity is not only the leading killer of newborns but the second-leading cause of death in children under 5.

"These facts should be a call to action," United Nations Secretary-General Ban Ki-moon wrote in an introduction to the report.

Three-quarters of the deaths could be prevented by spreading some simple, inexpensive treatments to the neediest countries, the report concludes. For example, providing $1 steroid shots during preterm labor hastens development of immature fetal lungs. They're standard in developed countries; wider use in low-income countries could save nearly 400,000 babies a year.

Even more lives could be saved by teaching "kangaroo care," in which moms carry their tiny babies nestled skin-to-skin on their bare chests for warmth when there are no incubators.

"To see babies who are 900 grams (about 2 pounds) survive without any technology, it's fantastic," says Lawn, who has watched kangaroo care save lives in countries like Malawi, with the highest preterm birth rate - 18.1 percent.

Also needed: Antibiotics to fight the infections that often kill newborns, and antiseptic cream to prevent umbilical cord infection.

Survival isn't the only hurdle. No one knows how many preemies suffer disabilities including cerebral palsy, blindness or learning disorders.

That's why preventing preterm births in the first place is the ultimate goal, one reason for comparing countries - to learn why some do better and some worse. Previously, the groups had estimated that 13 million babies were born prematurely each year, based on regional data.

About 12 percent of U.S. births are preterm, about the same as Wednesday's report estimates in Thailand, Turkey and Somalia. In contrast, just 5.9 percent of births in Japan and Sweden are premature.

Experts can't fully explain why the U.S. preemie rate is so much worse than similar high-income countries. But part of the reason must be poorer access to prenatal care for uninsured U.S. women, especially minority mothers-to-be, said March of Dimes epidemiologist Christopher Howson. African-American women are nearly twice as likely as white women to receive late or no prenatal care, and they have higher rates of preterm birth as well, he said.

More disturbing, the report ranks the U.S. with a worse preterm birth rate than 58 of the 65 countries that best track the problem, including much of Latin America. Add dozens of poor countries where the counts are less certain, and the report estimates that 127 other nations may have lower rates.

Whatever the precise numbers, "we have a shared problem among all countries and we need a shared solution," Howson said.

One key: Not just early prenatal care but more preconception care, he said. Given that in the U.S. alone, nearly half of pregnancies are unplanned, health providers should use any encounter with a woman of childbearing age to check for factors that could imperil a pregnancy.

"Ensure that mom goes into her pregnancy as healthy as possible," Howson said.

Scientists don't know what causes all preterm birth, and having one preemie greatly increases the risk for another. But among the risk factors:

-Diabetes, high blood pressure, infections and smoking.

-Being underweight or overweight, and spacing pregnancies less than two years apart.

-Pregnancy before age 17 or over 40.

-Carrying twins or more.

-In wealthier countries, early elective inductions and C-sections.

"A healthy baby is worth the wait," Howson said, noting that being even a few weeks early can increase the risk of respiratory problems, jaundice, even death.

The WHO defines a preterm birth as before completion of the 37th week of pregnancy. Most preemies fall in the "late preterm" category, born between 32 and 37 weeks. Extreme preemies are born before 28 weeks. So-called "very preterm" babies fall in between.

Lawn's biggest frustration is how often later preemies die in low-income countries because even the health providers may not know simple steps that might save them - and the fatalism around those deaths.

"If you're in the States and have a preterm baby now, even at 25 weeks you've got a 50 percent chance of survival and people expect that. Whereas in Ghana, if a baby's born 2 months early, people kind of expect the baby to die," she said.

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U.S.: West Point putting bin Laden's last words online

Undated file photo shows al Qaida leader Osama bin Laden, in Afghanistan

WASHINGTON (AP) -- The world will soon be able to read the last words of Osama bin Laden as he struggled to command the attention of his far-flung terror network.

A selection of documents seized in last year's raid on bin Laden's house in Pakistan will be posted online Thursday by the Army's Combating Terrorism Center at the U.S. Military Academy.

The correspondence shows a leader revered but sometimes ignored by field commanders, who dismissed him as out of touch even as he urged them to keep attacking U.S. targets.

White House counterterrorism chief John Brennan said this week that bin Laden's own words confirm that America is safer with him gone.

Brennan says bin Laden wrote of his worries that his leaders were being killed so quickly the group would not survive.

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U.S. fears reprisals after Afghan shooting rampage

An Afghan man sits next to the dead bodies killed by US Army

(Reuters) - U.S. officials warned on Monday of possible reprisal attacks after 16 Afghan villagers, mostly children and women, were killed in a likely "rogue" shooting by a U.S. soldier that weakens the West's tenuous grip on a decade-old war.

Washington has rushed to distance the shootings, blamed on a lone U.S. soldier, from the efforts of the 90,000-strong U.S. force in Afghanistan, but the rampage in southern Kandahar province is certain to inflame anti-Western anger once again.

It comes less than three weeks after U.S. troops inadvertently burned copies of the Koran, the Muslim holy book, at the main NATO base in Afghanistan, sparking widespread protests in which 30 people were killed.

"The U.S. Embassy in Kabul alerts U.S. citizens in Afghanistan that as a result of a tragic shooting incident in Kandahar province involving a U.S. service member, there is a risk of anti-American feelings and protests in coming days, especially in the eastern and southern provinces," the embassy said in an emergency statement on its website.

Kandahar is the birthplace of the Taliban, toppled by U.S.-backed forces in late 2001. Southern and eastern provinces have seen some of the fiercest fighting of the war, increasingly unpopular among Americans and their European allies.

Early on Monday, the embassy said on its Twitter feed restrictions had been placed on the movements of all embassy personnel in the south.

A sharp increase in attacks on U.S. troops by Afghan forces followed the Koran burning. Sunday's incident in Kandahar was one of the worst of its kind, witnesses describing it as a "night-time massacre" that killed nine children and three women.

Villagers in three houses were attacked and many civilians were wounded, a spokesman for the NATO-led International Security Assistance Force (ISAF) said.

Deeply saddened, U.S. President Barack Obama called Afghan counterpart Hamid Karzai, promising to establish the facts quickly and "to hold fully accountable anyone responsible.

"This incident is tragic and shocking and does not represent the exceptional character of our military and the respect that the United States has for the people of Afghanistan," Obama said in a statement.

However, such incidents fuel anti-Western sentiment among Afghans and are quickly exploited by the insurgents. The Afghan Taliban said it would take revenge.


WIDESPREAD ANGER

The burning of copies of Koran at Bagram air base touched off widespread anger among Afghan officials, security forces and civilians alike. It also shows the challenges that remain as foreign forces prepare to withdraw combat troops and hand security responsibility to Afghans by the end of 2014.

Sunday's attack may also harden a growing consensus in Washington about what can be accomplished in Afghanistan even after a troop surge meant to turn the war around.

The bill for the war has already exceeded $500 billion and more than 1,900 U.S. troops have been killed, with the total number of foreign troops killed approaching 3,000.

"These killings only serve to reinforce the mindset that the whole war is broken and that there's little we can do about it beyond trying to cut our losses and leave," said Joshua Foust, a security expert with the American Security Project.

Karzai, whose relationship with his Western backers is fraught at the best of times, seethed. Civilian casualties caused by U.S. and other Western forces have long been a major cause of friction between Washington and Kabul.

He condemned the rampage as "intentional murders" and demanded an explanation. Karzai's office released a statement quoting a villager as saying "American soldiers woke my family up and shot them in the face".

There were conflicting accounts of how many U.S. soldiers were involved, with witness accounts saying there were several.

Officials from the U.S. Embassy, ISAF and from Washington said it appeared there was only one. An ISAF spokesman said the lone U.S. soldier "walked back to the base and turned himself in to U.S. forces this morning", adding there had been no military operations in the area.

The soldier in custody was described by one U.S. official in Washington as a staff sergeant who was married with three children. The sergeant had served three tours in Iraq but was on his first deployment in Afghanistan, the official said.

Neighbors and relatives of the dead said they saw a group of U.S. soldiers arrive at their village in Panjwai district, about 35 km from the provincial capital Kandahar City, at about 2 a.m. They said the soldiers entered homes and opened fire.

However, Afghan Minister of Border and Tribal Affairs Asadullah Khalid said a U.S. soldier burst into three homes near his base in the middle of the night, killing a total of 16 people, including 11 people in the first house.

Villager Haji Samad said his children and grandchildren were among 11 relatives killed.

"They (Americans) poured chemicals over their dead bodies and burned them," a weeping Samad told Reuters at the scene, with blood splattered on the walls of his home.

Neighbours said they had awoken to crackling gunfire from American soldiers, who they described as laughing and drunk.

"Their bodies were riddled with bullets," said Agha Lala, who visited one of the homes where the killings took place.

A senior U.S. defence official in Washington rejected such accounts. "Based on the preliminary information we have this account is flatly wrong," the official said. "We believe one U.S. service member acted alone, not a group of U.S. soldiers."

Defense Secretary Leon Panetta also called Karzai to offer his condolences. "I condemn such violence and am shocked and saddened that a U.S. service member is alleged to be involved, clearly acting outside his chain of command," Panetta said.

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Romney builds momentum with easy Washington win

Mitt Romney greets diners at Montgomery Inn Restaurant in Cincinnati, Ohio

(Reuters) - Mitt Romney breezed to an easy victory in the Washington state Republican presidential caucuses on Saturday, earning another momentum boost heading into next week's crucial "Super Tuesday" contests in 10 states.

With about 80 percent of precincts reporting in the non-binding straw poll, Romney had 36 percent support. Most of the precincts still to report were in pro-Romney King County, which includes the greater Seattle area.

The biggest drama was the race for second place, with only about 250 votes separating U.S. Representative Ron Paul at 25 percent and former U.S. Senator Rick Santorum at 24.4 percent. Former House of Representatives Speaker Newt Gingrich was in fourth place, at 11 percent.

The outcome marked a fourth state win for Romney this week, after the former Massachusetts governor picked up contests in Michigan, Arizona and Wyoming. He also won the other most recent vote, the Maine caucus on February 11.

Republicans are seeking a nominee to challenge President Barack Obama in the November 6 general election.

"I'm heartened to have won the Washington caucuses, and I thank the voters for their support today," Romney said in a posting on Twitter and Facebook.

"The voters of Washington have sent a signal that they do not want a Washington insider in the White House. They want a conservative businessman who understands the private sector," Romney added.

A Republican candidate needs 1,144 delegates to win the party's nomination. Some 419 delegates are at stake in the 10 primary and caucus contests on Tuesday.

States voting on Tuesday include Ohio, traditionally a national bellwether, Georgia, Tennessee and Idaho, Washington's neighbor to the east.

Kirby Wilbur, chairman of the state Republican Party, said Romney's bid for the White House seemed finally to be picking up the "Mitt-mentum" that had eluded it so far.

"I would think this would boost his chances on Super Tuesday. I don't think Governor Romney has closed the deal, but maybe he's in the process of doing that," Wilbur said.

TURNOUT HEAVY

Turnout was heavy at Saturday's caucuses, which gained more attention from candidates and media because of the volatile state of the Republican presidential race and the looming Super Tuesday contests.

Wilbur said voter turnout could probably exceed early estimates of 50,000, versus about 13,800 who participated in 2008.

The state usually holds both a caucus and a primary, but the cash-strapped state government this year canceled the primary, saving some $10 million.

There were scattered reports of voters being shut out when venues filled to capacity, notably at a caucus in Kennewick in Benton County, southern Washington.

Washington's 43 delegates will not be allocated until the state convention in June.

Libertarian Paul was favored by local observers to do well in the state, given his campaign's active ground operation and legions of committed supporters. He was also the only candidate to run television ads in Washington.

As others turned their attention to Super Tuesday states, Paul made three stops in Washington state on Friday, finishing with a rally for about 1,000 backers in downtown Seattle. The Texan also visited a caucus site in Puyallup, south of Seattle, on Saturday.

An overflow crowd was on hand to vote in the gymnasium at Phantom Lake Elementary School in Bellevue, where 61 caucuses were pooled together.

"We had at least twice as many people as we normally do, and a thoughtful and respectful discussion of the candidates," said caucus organizer Diane Tebelius, former chair of the state Party.

Stacey Price, 46, said she backed Romney as an experienced businessman who was financially savvy and best equipped to tackle problems like unemployment and the federal deficit.

Another voter said he wished for a stronger all-around pick to take on Obama, even if it meant choosing that candidate at the party convention in Tampa in August.

"I would like to have a compelling candidate. The goal is a strong America. I would like to have the next Ronald Reagan," said Tom Taylor, 46, of Bellevue.

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President Obama: Everybody Must Play By The Same Rules

Barack Obama, US President

WASHINGTON -- President Barack Obama used Tuesday's State of the Union address to lay out a vision of America in which everybody gets a fair shot at economic success and everybody -- including "the wealthy" -- plays by the same rules as the average citizen.

Obama's address, which comes in the midst of a rapidly escalating presidential campaign season, delivered a strong message about the need for social and economic equality and put forward a handful of new policy ideas targeting tax reform, college affordability and clean energy. But by and large, Obama's third State of the Union was focused on proposals for boosting the economy and ensuring protections for the middle class.

"Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same," Obama said. "It's time to apply the same rules from top to bottom. No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody."

Obama laid out some notable new policy proposals, including the creation of a new international minimum tax on U.S. companies making profits overseas; the launching of a new trade enforcement unit that would target unfair trade practices in countries around the world, including China; and a plan to shift federal aid away from colleges that don't keep down tuition costs. He also announced that the Defense Department will make history's largest renewable energy purchase -- totaling 1 gigawatt. The president can use his executive power to make the last item happen.

Ahead of the address, senior administration officials who spoke only on background and wouldn't be quoted, said the underlying message of the speech is that Obama's economic policies have been working and should be continued. The country had already lost 4 million jobs to the recession before Obama came into office and lost another 4 million before his policies took effect, they said. By contrast, Obama's policies have created more than 3 million private sector jobs in the past two years.

The officials also highlighted a new initiative to place 2 million people in jobs through new partnerships with businesses and community colleges. Steve Jobs, the recently deceased CEO of Apple, had pressed Obama for proposals like this in a past meeting, said the officials.

During his remarks, Obama reiterated his support for instituting the "Buffett rule," a concept that he and congressional Democrats have been pushing for months as a way to pay for their legislative priorities. Named after billionaire Warren Buffett, the rule would require people making more than $1 million to pay a minimum effective rate of at least 30 percent.

Warren Buffett's secretary Debbie Bosanek was a guest of the First Lady at the State of the Union. Buffett has made the case that millionaires and billionaires should be taxed at higher rates by pointing out that Bosanek pays a lower effective rate than he does.

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by," Obama said. "Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

Other notable attendees at the event included Rep. Gabrielle Giffords (D-Ariz.), who made the trip to Washington, D.C.,two days before she plans to step down to focus on her recovery after being shot in the head in Tucson in Jan. 2011. Giffords' husband, former astronaut Mark Kelly, also attended as a guest of the First Lady.

The president isn't wasting any time when it comes to selling his economic vision to the country. On Wednesday, he'll kick off a three-day tour of five states, Iowa, Arizona, Nevada, Colorado and Michigan, which are key battlegrounds in the upcoming presidential race. The move is a convenient way for Obama to connect his governing activities to his campaigning, which has already gotten off the ground but is not yet operating at full force.

Obama is also slated to sit down with ABC's Diane Sawyer on Thursday for his first post-State of the Union interview. Sawyer is soliciting questions from the public to ask the president.

In the meantime, White House officials will spend the week managing a social media blitz. On Tuesday night, administration officials planned to take questions from the public about the address submitted via Twitter, Facebook and Google+ in front of a live audience -- and to respond to questions in real time via Twitter, using the hashtag #WHChat and #SOTU.

From Wednesday through Friday, senior administration officials will host a marathon of online question and answer sessions via Twitter. Wednesday's panel will focus on general questions about the address. Community-focused discussions with policy advisers will take place Thursday and Friday's Q&A will be directed toward specific policy issues, including health, education and jobs. People who want to participate can ask questions on Twitter with the hashtag #WHChat, and administration officials will respond in real time.

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Gingrich victory in South Carolina jolts Republican race

Newt Gingrich

(Reuters) - Republican presidential candidate Newt Gingrich trounced frontrunner Mitt Romney in South Carolina on Saturday in a jarring victory that indicates the party's battle to pick a challenger to President Barack Obama may last months, not weeks.

Gingrich's come-from-behind triumph in the primary in the conservative southern state injects unexpected volatility into a Republican nominating race that until this week appeared to be a coronation for Romney, the former Massachusetts governor and private-equity chief.

Instead, voters in South Carolina rejected Romney's pitch that he is the best bet to fix a broken U.S. economy and defeat Obama, a Democrat, in the November 6 election.

Three different candidates - Gingrich, Romney and former U.S. senator Rick Santorum - now have won the first three contests in the state-by-state battle for the Republican presidential nomination to face Obama.

Gingrich's triumph may lead to a protracted battle of attrition as Republican candidates spend millions of dollars to tear each other down rather than uniting behind a standard-bearer to take back the White House.

With nearly all the votes counted, Gingrich had pulled in 40 percent of the vote, followed by Romney with 28 percent, networks reported. Santorum was in third with 17 percent and U.S. congressman Ron Paul in fourth with 13 percent.

The next contest is the Florida primary on January 31.

Riding a series of feisty debate performances, the former speaker of the House of Representatives captured the lingering unease of conservative voters in South Carolina who view Romney's moderate past and shifting policy stances with suspicion. Gingrich argued that he would be able to better articulate the party's conservative ideals.

South Carolina was a stunning turnaround for Gingrich, whose campaign barely survived after top staff quit last June and stumbled to a disappointing finish just three weeks ago in Iowa, the first Republican nominating contest. He finished fourth in both Iowa and New Hampshire a week later as conservatives split their votes among several candidates.

Gingrich contrasted his sometimes-chaotic management style with Romney's buttoned-down approach, arguing that his campaign was powered by ideas rather than logistics. Romney is one of the wealthiest candidates ever to run for president and his campaign is well financed.

"We don't have the kind of money that at least one of the candidates have. But we do have ideas and we do have people," Gingrich told supporters in a 22-minute tirade against Obama, the news media, judges and other "elites."

Romney acknowledged that there will be a long primary season. He said he would continue to run on his business record and paint Gingrich as a creature of Washington in the weeks ahead.

"I don't shrink from competition, I embrace it," Romney told supporters. "I believe competition makes us all better. I know it's making our campaign stronger."

Obama, who does not face a primary challenger, will have his turn in the spotlight on Tuesday with his State of the Union address. In a message to supporters on Saturday, he said the speech would focus on "building an economy that works for everybody, not just a wealthy few."

ON TO FLORIDA

Heading into Florida, Romney starts off with a wide lead in the polls and a distinct edge in logistics and fund-raising, which will be crucial in a state with 10 separate media markets.

Campaigns must spend at least $1 million each week to reach voters in the sprawling southern state, according to local political officials. Romney's allies have already spent $5 million, mostly on ads attacking Gingrich. No other candidate has a significant presence in the state.

Animosity between Gingrich and Romney has been festering since December, when a group supporting Romney launched a blitz of negative TV ads in Iowa that ruined Gingrich's campaign there. In South Carolina, a state with a reputation for rough and tumble politics, the gloves came off.

Gingrich attacked Romney's business record at private equity firm Bain Capital and his reluctance to release personal tax information, while Romney pointed to Gingrich's past ethics lapses and alluded to his messy personal life.

South Carolina Republican voters said they were focused on fixing the sluggish economy and finding the strongest candidate to defeat Obama. Some 78 percent said they were "very worried" about the economy and 45 percent said that the most important trait in a candidate was the ability to beat Obama, according to exit polls released by CNN.

Those issues are the twin pillars of Romney's candidacy.

But Gingrich's wide-ranging stump speeches and red-meat attacks against Obama convinced many voters that he had the fire in the belly to take on the incumbent.

"A vote for Newt was a vote against Obama," said Charleston photographer Kim Woods, who voted for Gingrich.

Romney saw his aura of inevitability erode in South Carolina after leading opinion polls by 10 percentage points a week ago. He suffered a setback on Thursday when Iowa officials declared in a recount that he had actually come in second place in that state, instead of winning narrowly as initially announced.

Romney took a swipe at Gingrich for criticizing his conduct at Bain Capital, calling it an "assault on free enterprise."

"Those who pick up the weapons of the left today will find them turned against us tomorrow," Romney told supporters.

Voters said they viewed Romney's business background as an asset. But he waffled this week when asked whether he would release his tax records, and acknowledged that he pays a much lower tax rate than many Americans, around 15 percent.

In his speech, Gingrich took aim at Obama, painting him as a weak president, "truly a danger to the country" with his energy policies and "out of touch with reality." He also lashed the news media and condemned what he called "the growing anti-religious bigotry of the elites" in America.

'PUNCH IN THE MOUTH'

"This is the punch in the mouth/wake up call Romney needed if he wanted to be a strong general election candidate," Republican strategist Ford O'Connell said in a Twitter message, referring to the South Carolina results.

Romney has attacked Gingrich's ties to mortgage giant Freddie Mac and criticized his time in the nation's capital. His campaign also highlighted Gingrich's $300,000 fine due to ethics lapses while serving as House speaker 15 years ago.

The thrice-married Gingrich has fended off publicity about his turbulent marital history. On Thursday, he rejected his second wife's accusation that he had asked her for an "open marriage" while he was having an affair with another woman in the 1990s.

South Carolina has been a tough state for Romney's presidential ambitions. In his previous run for the White House in 2008, Romney finished a poor fourth, with just 15 percent of the vote, behind winner and eventual Republican nominee John McCain. McCain endorsed Romney in the current campaign.

The winner of South Carolina's Republican presidential primary has gone on to win the party's nomination in every presidential election since 1980.

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Iran sends rare letter to U.S. over killed scientist

Mahmoud Ahmadinejad

(Reuters) - Iran said on Saturday it had evidence Washington was behind the latest killing of one of its nuclear scientists, state television reported, at a time when tensions over the country's nuclear program have escalated to their highest level ever.

In the fifth attack of its kind in two years, a magnetic bomb was attached to the door of 32-year-old Mostafa Ahmadi-Roshan's car during the Wednesday morning rush-hour in the capital. His driver was also killed.

U.S. Secretary of State Hilary Clinton denied responsibility and Israeli President Shimon Peres said Israel had no role in the attack, to the best of his knowledge.

"We have reliable documents and evidence that this terrorist act was planned, guided and supported by the CIA," the Iranian foreign ministry said in a letter handed to the Swiss ambassador in Tehran, state TV reported. The Swiss embassy represents U.S. interests in a country where Washington has no diplomatic ties.

The spokesman for Iran's Joint Armed Forces Staff, Massoud Jazayeri, said: "Our enemies, especially America , Britain and the Zionist regime (Israel), have to be held responsible for their actions."

Iran in the past has accused Israel of causing a series of spectacular and sometimes bloody mishaps to its nuclear programme. Israeli officials do not comment on any involvement in those events, although some have publicly expressed satisfaction at the setbacks.

Feeling the heat from unprecedented new sanctions, Iran's clerical establishment has brandished its sword by threatening to block the main Mid-East oil shipping route, starting to enrich uranium at an underground bunker and sentencing an Iranian-American citizen to death on spying charges.

State TV said a "letter of condemnation" had also been sent to Britain, saying the killing of Iranian nuclear scientists began after the head of Britain's MI6 spy service announced intelligence operations against states seeking nuclear weapons.

The West says Iran's nuclear programme is aimed at building a bomb. Tehran says it has the right to peaceful nuclear power.

Tehran has urged the U.N. Security Council and Secretary-General Ban Ki-moon to condemn the latest killing.

After years of international sanctions that had little impact on Iran, U.S. President Barack Obama signed new measures on New Year's Eve that, if fully implemented, would make it impossible for most countries to pay for Iranian oil.

Washington is requiring that countries gradually reduce their purchases of Iranian oil in order to receive temporary waivers from the sanctions.

The European Union is expected to unveil similar measures next week, and announce a gradual oil embargo among its member states, who collectively buy about a fifth of Iran's exports.

The combined measures mean Iran may fail to sell all of the 2.6 million barrels a day of exports it relies on to feed its 74 million people. Even if it finds buyers, it will have to offer steep discounts, cutting into its desperately-needed revenue.

On Tuesday shipping sources told Reuters Iran was storing an increasing supply of oil at sea - as much as 8 million barrels - and was likely to store more as it struggles to sell it.

Iran denies it is having trouble: "There has been no disruption in Iran's crude exports through the Persian Gulf ... We have not stored oil in the Gulf because of sanctions as some foreign media reported," oil official Pirouz Mousavi told the semi-official Mehr news agency on Friday.

The sanctions are causing real hardship on the streets, where prices for basic imported goods are soaring, the rial currency has plummeted and Iranians have been flocking to sell rials to buy dollars to protect their savings.

The pain comes less than two months before a parliamentary election, Iran's first since a presidential vote in 2009 that was followed by eight months of street demonstrations.

Iran's authorities successfully put down that revolt by force, but since then the "Arab Spring" has shown the vulnerability of authoritarian governments in the region to protests fueled by anger over economic difficulty.

CLASH THREAT

Iran has threatened to block the Strait of Hormuz leading to the Gulf if sanctions are imposed on its oil exports, and has threatened to take unspecified action if Washington sails an aircraft carrier through the strait, an international waterway.

Military experts say Tehran can do little to fight the massive U.S.-led fleet that guards the strait, but the threats raise the chance of a miscalculation that could lead to a military clash and a global oil crisis.

The Pentagon said on Friday that small Iranian boats had approached close to U.S. vessels in the strait last week, although it said it did not believe there was "hostile intent."

The United States and Israel have not ruled out military action if diplomacy fails to resolve the nuclear dispute. Iran says it would retaliate if attacked.

The tension has caused spikes in global oil prices in recent weeks, although prices eased at the close of last week's trading on the prospect of reduced demand in economically stricken European countries. Brent crude fell 82 cents to settle at $110.44 a barrel on Friday.

The chances for an imminent easing of tension look even more remote as the nuclear deadlock continues because of Iran's refusal to halt the sensitive nuclear work.

Last week Iran began enriching uranium underground - the most controversial part of its nuclear programme - at a bunker deep below a mountain near the Shi'ite holy city of Qom.

Nuclear talks with major powers collapsed a year ago. Iran says it wants the talks to resume, but the West says there is no point unless it is willing to discuss a halt to uranium enrichment, which can be used to make material for a bomb.

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Taiwan votes in tight presidential polls

Tsai Ing-wen cast her vote shortly before 10 am in a suburb of Taipei, AFP

Taipei - Taiwan began voting on Saturday in a tight presidential election that will decide who will run the island and manage crucial ties with China over the next four years.

Polls opened at 08:00 for the island's 18.1 million eligible voters in an election where the choice is essentially between pro-China incumbent Ma Ying-jeou and his main challenger Tsai Ing-wen, a China-sceptic.

"I voted for Ma because I am doing business with China and I often travel there," said businesswoman Ane Wei as she left a polling station in downtown Taipei.

"It'd be more convenient for me and good for my business if he remains in office."

Ruby Yang, an office worker, said she had cast her ballot in favour of Tsai "because I want to see the first female president in Taiwan".

Tsai cast her vote shortly before 10:00 in a suburb of Taipei, and Ma was expected to vote shortly afterwards.

For the past ten days, no opinion polls have been allowed, but the final surveys published last week showed a race too close to call, with Ma of the Kuomintang (KMT) party leading Tsai by as little as three percentage points.

Beijing and Washington are watching closely, as victory for Ma, 61, would likely be seen as a renewed mandate for policies that have brought about the most dramatic thaw in ties with the mainland in over 60 years.

"The reason why the Chinese mainland is so concerned about the Taiwan election is because we are worried that the idea of 'Taiwan independence' will be further spread by the process, as it was in the past," the state-controlled Chinese paper Global Times said on Friday.

Boosting trade

But it went on to say that "with democracy developing, rationality is growing while extremism is on the wane in Taiwan. In the future, the rotation of ruling parties will have a smaller influence on Taiwan's policymaking".

Ma was elected four years ago on a promise to improve Taiwan's economy by boosting trade and travel links with China and the key achievement of his term is a sweeping trade pact signed in 2010.

A win for 55-year-old Tsai could usher in a period of uncertainty in ties with China, as her Democratic Progressive Party (DPP) has traditionally favoured distancing the island from the mainland.

China and Taiwan have been governed separately since the end of a civil war in 1949, but Beijing still claims sovereignty over the island, and has vowed to get it back, even if it must go to war to make it happen.

The United States, too, is keeping a close eye on the election, hoping the outcome will not upset the stability that the strategically vital Taiwan Straits area has experienced since Ma assumed power in 2008.

Further complicating the race is the third candidate, former KMT heavyweight James Soong, 69, who could cost Ma the result by taking crucial votes away.

Officials believe a relatively large proportion of the eligible voters will cast their ballots because of the tightness of the race.

Both Ma and Tsai staged huge rallies in Taipei on Friday to whip up support and try to win the undecided voters who will decide the outcome.

Chang Poh-ya, chairwoman of the Central Election Commission, said on Friday she expected the turnout rate to reach about 80%, compared with just over 76% in the 2008 vote.

The nearly 15 000 polling stations will close at 16:00. The presidential vote coincides with a poll for Taiwan's 113-member parliament, where the KMT currently has a majority.

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Unemployment near three-year low

Employed People in USA

WASHINGTON (Reuters) -

U.S. employment growth accelerated last month and the jobless rate dropped to a near three-year low of 8.5 percent, the strongest evidence yet the economic recovery is gaining steam.

Nonfarm payrolls increased 200,000 in December, the Labor Department said on Friday. It was the biggest rise in three months and beat economists' expectations for a 150,000 gain.

The unemployment rate fell from a revised 8.7 percent in November to its lowest level since February 2009, a heartening sign for President Barack Obama whose re-election hopes could hinge on the state of the labor market.

"The labor market is healing, but we still have a long way to go to recoup the losses we have endured. We may be close to a tipping point where gains can become more self-feeding," said Diane Swonk, chief economist at Mesirow Financial in Chicago.

A string of better-than-expected U.S. data in recent weeks has highlighted a contrast between the recovery in the world's biggest economy and Europe, where the economy is widely believed to be contracting.

The jobs data was overshadowed in financial markets by concerns over Europe's debt crisis. U.S. stocks ended mostly down, while Treasury debt prices rose on safe-haven bids.

The dollar rose to a near 16-month high against the euro.

Republican presidential hopefuls have blasted Obama's economic policies as doing more harm than good.

The latest economic signs, however, could offer him some political protection.

The economy added 1.6 million jobs last year, the most since 2006, and the jobless rate, which peaked at 10 percent in October 2009, has dropped 0.6 percentage point in the last four months.

Obama welcomed the news and urged Congress to extend a two-month payroll tax cut through 2012 to help sustain the recovery.

"We're moving in the right direction. When Congress returns they should extend the middle-class tax cut for all of this year, to make sure we keep this recovery going," he said.

LONG ROAD BACK

Employment remains about 6.1 million below its pre-recession level and at December's pace of job growth, it would take about 2-1/2 years to win those jobs back. There are roughly 4.3 unemployed people for every job opening.

Unseasonably mild weather last month helped fuel a hefty gain in construction employment. Courier jobs also rose sharply, a move the Labor Department pinned on strong online shopping for the holiday season.

Those jobs could be lost in January and the unemployment rate might rise as Americans who had abandoned the hunt for work are lured back into the labor market.

The drop in the jobless rate was mostly due to strong hiring. The labor force shrank only modestly.

A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, dropped to an almost three-year low of 15.2 percent from 15.6 percent in November.

Still, all told, 23.7 million Americans are either out of work or underemployed.

With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds.

FED STILL IN PLAY

Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years.

While the prospect of a further easing of monetary policy was damped a bit by the jobs data, the shaky outlook means a third round of asset purchases by the Federal Reserve remains an option.

"The Fed will be watching for further credible evidence that this improving trend is gaining traction," said Anthony Karydakis, chief economist at Commerzbank in New York.

New York Federal Reserve Bank President William Dudley on Friday suggested the U.S. central bank was still leaning toward buying more bonds to pull borrowing costs lower, describing the recovery as "frustratingly slow" and the unemployment rate as "unacceptably high."

"I believe it is also appropriate to continue to evaluate whether we could provide additional (policy) accommodation," said Dudley.

GOVERNMENT A DRAG

All the job gains in December came from the private sector, where payrolls rose 212,000 - the most in three months.

Government employment contracted 12,000, with most of the drag coming from local government layoffs. However, the pace of government job losses is moderating as some states report revenue growth after years of being in the red.

For all of 2011, the private sector added 1.9 million jobs, while government employment fell 280,000. A measure of the share of industries that showed job gains during the month rebounded to a five-month high in December after diving in November.

Construction payrolls increased 17,000 after falling 12,000 in November as mild weather has boosted groundbreaking for new homes.

Transportation and warehousing employment jumped 50,200. The bulk of the rise came from the messenger industry, which added 42,000 jobs, reflecting an increase in deliveries of online purchases made during the holiday season.

Manufacturing jobs rose 23,000, the largest increase since July. Factory employment rose 225,000 last year, sustaining gains for the first time since 1997.

But there were soft spots in retail, where payrolls growth slowed to 27,900 after hefty gains in November as retailers geared up for a busy holiday shopping season.

Temporary hiring, seen as a harbinger of future hiring, fell for the first time June, dropping 7,500 in December after gaining 11,200.

Hourly earnings rose a modest four cents, indicating that most of the jobs being created are low paying.

This is a potentially troubling sign for consumer spending, which has been largely supported by a reduction in savings, although it also signals a lack of inflation pressure.

"Firms need to grow wages faster if consumption is to accelerate. There is not a lot of appetite to give raises," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

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Comet defies death, brushes up to sun and lives

Comet to Sun

WASHINGTON (AP) — A small comet survived what astronomers figured would be a sure death when it danced uncomfortably close to the broiling sun.

Comet Lovejoy, which was only discovered a couple of weeks ago, was supposed to melt Thursday night when it came close to where temperatures hit several million degrees. Astronomers had tracked 2,000 other sun-grazing comets make the same suicidal trip. None had ever survived.

But astronomers watching live with NASA telescopes first saw the sun's corona wiggle as Lovejoy went close to the sun. They were then shocked when a bright spot emerged on the sun's other side. Lovejoy lived.

"I was delighted when I saw it go into the sun and I was astounded when I saw something re-emerge," said U.S. Navy solar researcher Karl Battams.

Lovejoy didn't exactly come out of its hellish adventure unscathed. Only 10 percent of the comet — which was probably millions of tons — survived the encounter, said W. Dean Pesnell, project scientist for NASA's Solar Dynamics Observatory, which tracked Lovejoy's death-defying plunge.

And the comet lost something pretty important: its tail.

"It looks like the tail broke off and is stuck" in the sun's magnetic field, Pesnell said.

Comets circle the sun and sometimes get too close. Lovejoy came within 75,000 miles of the sun's surface, Battams said. For a small object often described as a dirty snowball comprised of ice and dust, that brush with the sun should have been fatal.

Astronomers say it probably didn't melt completely because the comet was larger than they thought.

The frozen comet was evaporating as it made the trip toward the sun, "just like you're sweating on a hot day," Pesnell said.

"It's like an ice cube going by a barbecue grill," he said.

Pesnell said the comet, although only discovered at the end of November by an Australian observer, probably is related to a comet that came by Earth on the way to the sun in 1106.

As Comet Lovejoy makes its big circle through the solar system, it will be another 800 or 900 years before it nears the sun again, astronomers say.

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Iran releases video of downed U.S. spy drone–looking intact

Downed U.S. spy plane

Iran's Press TV on Thursday broadcast an extended video tour of the U.S. spy drone that went down in the country--and it indeed appeared to look mostly intact.

American officials have acknowledged that an unmanned U.S. reconnaissance plane was lost on a mission late last week, but have insisted that there is no evidence the drone was downed by hostile acts by Iran. Rather, they said, the drone likely went down because of a malfunction, and they implied the advanced stealth reconnaissance plane would likely have fallen from such a high altitude--the RQ-170 Sentinel can fly as high as 50,000 feet--that it wouldn't be in good shape.

But Iranian military officials have claimed since Sunday that they brought down an American spy drone that was little damaged. And now they have provided the first visual images of what looks to be a drone that at least outwardly appears to be in decent condition, in what is surely another humiliating poke in the eye for U.S. national security agencies.

The Pentagon declined to comment on the released images Thursday, a Defense Department spokesman told Yahoo News. But military analysts said it appeared to them to be the American drone in question.

"I have been doing this for thirty years, and it sure looks like" a stealthy U.S. drone to me," Loren Thompson, a military analyst with the Lexington Institute and consultant to the RQ-170's manufacturer, Lockheed Martin, told Yahoo News in a telephone interview Thursday. "I think we are going to face the high likelihood that Iran has an intact version of one of our most important intelligence gathering tools."

Still, Thompson went on, the intelligence "windfall" to Iran from obtaining the advanced U.S. stealthy drone may be mitigated.

"I don't think the Iranians get as much out of it as they might hope," he said. "It probably came into their hands as a result of a technical malfunction. What that means is they still don't have a real defense against the U.S. flying other vehicles that have similar capabilities, without much fear of interception."

Analysts also noted that the video of the drone released by Iran did not show the drone's underside. "Pretty intact," the Center for Strategic and International Studies' James Lewis said by email. "Interesting that they covered the underside."

The New York Times reported Thursday that--unsurprisingly--the RQ-170 was lost while making the latest foray over Iran during an extended CIA surveillance effort of Iran's nuclear and ballistic weapons program.

"The overflights by the bat-winged RQ-170 Sentinel, built by Lockheed Martin and first glimpsed on an airfield in Kandahar, Afghanistan, in 2009, are part of an increasingly aggressive intelligence collection program aimed at Iran, current and former officials say," the Times' Scott Shane and David Sanger wrote. "The urgency of the effort has been underscored by a recent public debate in Israel about whether time is running out for a military strike to slow Iran's progress toward a nuclear weapon."

Iran in turn has complained that the drone overflights represent an act of aggression and violation of its sovereignty, and summoned the Swiss envoy--who represents U.S. interests in Iran--on Thursday to lodge a protest.

However, while the images of the U.S. drone surely allowed Iran to score another public relations blow against Washington, Iran may find it tough to generate much in the way of international sympathy for being the target of U.S. surveillance.

Last week, Iranian hardliners ransacked the British embassy in Tehran, prompting the United Kingdom to recall its diplomatic staff from Tehran and order Iran's embassy in London closed. Last month, the UN atomic watchdog agency issued a report raising concerns about research Iran is suspected by some nations to have conducted before 2003 on military aspects of its nuclear program. Iran has insisted its nuclear program is for peaceful energy purposes. In October, the United States accused elements of Iran's Qods force of plotting to assassinate the Saudi envoy to the United States. The United Nations General Assembly voted last month in favor of a resolution condemning the Iranian plot.

Amid its growing international isolation, Iran, unsurprisingly, seemed intent to play up the drone incident for all it could.

"China, Russia want to inspect downed U.S. drone," proclaimed a headline from Iran's Mehr news agency Thursday.

The RQ-170 Sentinel, however, reportedly did not use the latest U.S. surveillance technology on board, in part because as a single-engine aircraft, it was thought more likely to occasionally go down.

"The basic principles of stealthy aircraft are fairly well known," Thompson said. "In terms of [the drone's] on-board electronics and information systems, it is fairly routine in combat to require authentication codes to make them hard to unlock."

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Obama Urges Congress To Extend Payroll Tax Cut

Barack Obama, President of U.S.

WASHINGTON — President Barack Obama pressured Republicans in Congress on Monday to extend a payroll tax cut, saying the economic recovery is "still fragile" and middle class families need the money.

"My message to Congress is this: Keep your word to the American people and don't raise taxes on them right now. Now's not the time to slam on the brakes. Now's the time to step on the gas," Obama said at the White House. He said despite a decline in the unemployment rate to 8.6 percent in November, "our recovery is still fragile" and the nation's economy could be hurt by economic turbulence in Europe.

The president has been seeking an extension and expansion to the payroll tax cut that will expire at the end of the year. The White House says taxes on the average family would increase by $1,000 if the cuts are not extended.

To make its point, the White House went so far as to put up a countdown clock during spokesman Jay Carney's briefing to show when middle-class taxes would go up "if Congress doesn't act."

Some Republicans in Congress support the extension but the parties have been split on how to pay for it. Obama noted that House Speaker John Boehner, R-Ohio, and Senate Republican Leader Mitch McConnell have expressed support for the extension, adding, "I hope the rest of their Republican colleagues come around."

Brendan Buck, a Boehner spokesman, said there was widespread support for extending the payroll tax cuts but if "the president wants to make progress he should insist that Senate Democrats remove the job-killing small business tax hike from their partisan proposal."

Senate Democrats have rolled out a compromise that would drop Obama's proposal to award the tax cut to employers, bringing the cost of the plan down.

Obama also said for Congress to end its work this year without extending unemployment insurance would be a "terrible mistake" and leave "1.3 million Americans out in the cold."

The White House has called for an extension of benefits that can cover up to 99 weeks for the long-term jobless. State unemployment insurance programs guarantees coverage for six months, but Congress approved additional benefits in 2008. Expiration of those payments would mean an average loss of nearly $300 in weekly income for more than 1 million households in January.

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Islamists seen as winners in Egypt election

Vote Counting in Egypt

(Reuters) - Egypt's ruling military painted a dire picture of the economy on Thursday as election officials delayed releasing results of a landmark parliamentary poll that Islamist parties looked set to win, saying votes were still being counted.

They said first-round results would be declared on Friday, a day when youthful protesters demanding an immediate end to army rule have called a rally in Cairo's Tahrir Square to remember the 42 people killed in clashes with riot police last month.

Egyptians voting freely for the first time since army officers ousted the king in 1952 seem willing to give Islamists a chance. "We tried everyone, why not try Sharia (Islamic law) once?" asked Ramadan Abdel Fattah, 48, a bearded civil servant.

Islamist success at the polls in Egypt, the most populous Arab nation, would reinforce a trend in North Africa, where moderate Islamists now lead governments in Morocco and post-uprising Tunisia after election wins in the last two months.

Parliament, whose exact makeup will be clear only after Egypt's staggered voting process ends in January, may challenge the power of the generals who took over in February after a popular uprising toppled Hosni Mubarak, an ex-air force chief.

The army council, under growing pressure to make way for civilian rule, has said it will keep powers to pick or fire a cabinet. But the head of the Muslim Brotherhood's party said this week the majority in parliament should form a government.

The poll results had been expected on Thursday, but some constituencies had not completed their counts.

In an alarming revelation, an army official said foreign reserves would plunge to $15 billion by the end of January, down from the $22 billion reported by the central bank in October.

Mahmoud Nasr, financial assistant to army chief Field Marshal Mohamed Hussein Tantawi, told a news briefing that a widening budget deficit might force a review of costly subsidies, especially on petrol, to save money.

The economic crunch has forced the Egyptian pound to its lowest level in nearly seven years after tourism and foreign investment collapsed in the turmoil since Mubarak's overthrow.

The world is closely watching the election, keen for stability in Egypt, which has a peace treaty with Israel, owns the Suez Canal linking Europe and Asia, and which in Mubarak's time was an ally in countering Islamist militants in the region.

Washington and its European allies have urged the generals to step aside swiftly and make way for civilian rule.

GAINS FOR ISLAMISTS

Western powers are coming to accept that the advent of democracy in the Arab world may bring Islamists to power, but they also worry that Islamist rule in Egypt might erode social freedoms and threaten Cairo's 1979 peace treaty with Israel.

The Muslim Brotherhood, Egypt's oldest Islamist group, says its new Freedom and Justice Party (FJP) is set to win about 40 percent of seats allocated to party lists in this week's vote, which passed off peacefully, albeit with many irregularities.

FJP officials say the party also leads the race for individual seats that make up a third of the total in the poll.

Al-Nour Party, one of several newly formed ultra-conservative Salafi Islamist groups, said on Thursday that it expects to pick up 20 percent of assembly seats overall.

"In light of the media campaign against us, we believe our results are largely acceptable," said Youssry Hamad, Nour's spokesman. "We are doing as well as the Muslim Brotherhood."

The liberal multi-party Egyptian Bloc has said it is on track to secure about a fifth of votes for party lists.

"For the first time in Egypt we don't see a political intention by the state to forge the elections," said Magdy Abdel Halim, coordinator of an EU-backed group of election monitors.

He said the infractions observed did not affect the legitimacy of a vote held in a "reasonably fair atmosphere."

Egypt's April 6 youth movement, a prime mover in the revolt against Mubarak, said an Islamist win should not cause concern.

"No one should worry about the victory of one list or political current. This is democracy and this great nation will not allow anyone to exploit it again," its Facebook page said.

If the FJP and Nour secure the number of seats they expect, they could combine to form a solid majority bloc, although it is far from certain the Brotherhood would want such an alliance.

Senior FJP official Essam el-Erian said before the vote that

Salafis, who had kept a low profile and shunned politics during Mubarak's 30-year rule, would be "a burden for any coalition."

The FJP might seek other partners, such as the liberal Wafd or the moderate Islamist Wasat Party, set up by ex-Brotherhood members in 1996, although only licensed after Mubarak's fall.

Nour Party spokesman Hamad said solving Egypt's problems might be beyond one party. "We believe a coalition government that comprises all political streams is the best option. The burden is too much after all these years of corruption."

PERILS OF DEMOCRACY

Some Egyptians fear the Muslim Brotherhood might try to impose Islamic curbs on a tourism-dependent country whose 80 million people include a 10 percent Coptic Christian minority.

Ali Khafagi, the leader of the FJP's youth committee, said the Brotherhood's goal was to end corruption and revive the economy. Only a "mad group" would try to ban alcohol or force women to wear headscarves, he said.

The priority of the Brotherhood, which gained trust by aiding the poor under Mubarak, is likely to be economic growth to ease poverty and convince voters they are fit to govern.

Essam Sharaf's outgoing government quit during protests against army rule last month in which 42 people were killed, most near Cairo's Tahrir Square, hub of the anti-Mubarak revolt.

Kamal al-Ganzouri, asked by the army to form a "national salvation government," aims to complete the task in the next day or two, but acknowledged on Wednesday that five presidential candidates had turned down invitations to join his cabinet.

Protesters who returned to Tahrir last month, angered by the military's apparent reluctance to cede power, say the generals should step aside now, instead of appointing a man of the past like Ganzouri, 78, who was a premier for Mubarak in the 1990s.

Mohamed Taha, 46, an accountant who supports the liberal Egyptian Bloc, said the election showed that young activists had failed to present a viable program. "Their revolution was stolen and they are stuck searching for who stole it," he said.

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Military of China denounces U.S.-Australia defense upgrade

Geng Yansheng,

(Reuters) - China's military denounced the United States and Australia on Wednesday for upgrading military ties, warning that such moves could erode trust and fan Cold War-era antagonism.

Chinese Defense Ministry spokesman Geng Yansheng made the warning about a plan unveiled in mid-November by U.S. President Barack Obama and Australian Prime Minister Julia Gillard to form a de facto base in north Australia for up to 2,500 U.S. Marines.

Geng's comments came on the same day Australian Foreign Minister Kevin Rudd was reported as backing the formation of a security pact with India and the United States, another step that could fuel China's worries of being fenced in by wary neighbors.

"Military alliances are a product of history, but we believe any strengthening and expansion of military alliances is an expression of the Cold War mentality," Geng said in answer to a question about the U.S.-Australian announcement, according to a transcript on the ministry's website (www.mod.gov.cn.).

"This is not in keeping with the tide of the era of peace, development and cooperation and does not help to enhance mutual trust and cooperation between countries in the region, and could ultimately harm the common interests of all concerned," he said.

"We hope that the parties concerned will do more that is beneficial to the peace and stability of the Asia-Pacific region, and not the contrary."

But the Chinese spokesman indicated that Beijing was not shunning Washington. Chinese and U.S. defense officials, led by Under Secretary of Defense Michele Flournoy, will hold talks in Beijing next Wednesday, Geng told the briefing.

Earlier this month, Obama told Asia-Pacific leaders that the United States was "here to stay," announced the plans to set up the de facto military base in north Australia and chided China for trying to prevent discussion of its South China Sea territorial disputes at regional forums.

The Chinese Ministry of Defense is the public mouthpiece of the People's Liberation Army (PLA), but foreign reporters are not allowed to attend its briefings.

COOPERATION OR CONFRONTATION?

Although falling short of full-throated condemnation of the U.S.-Australian move, Geng's words were tougher than earlier reaction from China's Foreign Ministry, which said Washington and Canberra should focus on cooperating with Beijing.

Geng said the idea raised by U.S. and Australian officials of advancing "integrated air and sea combat" amounted to "trumpeting confrontation and sacrificing others' security for the sake of one's own security."

Chinese President Hu Jintao has made clear that he wants to avoid repeating the rifts that soured ties with Washington in the first half of 2011. Hu retires from power late next year, when the U.S. is focused on its presidential race, making China's leaders especially reluctant to risk distracting rows.

Beijing is also still licking its wounds from last year, when loud maritime disputes with Japan, Vietnam, the Philippines and other neighbors fanned suspicions about China's intentions.

Chinese military officers have, however, sometimes taken a tougher stance on security worries than civilian officials.

Earlier this week, PLA Major General Luo Yuan, well-known for his hawkish views, warned that Obama's regional push showed that the United States wanted to encircle China.

The comments from Australian Foreign Minister Rudd could also magnify such fears among Chinese observers.

A new trilateral pact bringing in India into a U.S.-Australian security tent was worth exploring because "from little things big things grow," Kevin Rudd said in an interview with the Australian Financial Review newspaper.

"The response from the Indian government has really been quite positive," said Rudd.

The idea of an Australian, Indian and U.S. trilateral security dialogue, in part to counter China's rising might, has been pushed by a trio of think-tanks in all three countries, but has yet to be adopted by any government.

At a briefing in Beijing, Foreign Ministry spokesman Hong Lei did not comment directly on Rudd's statement.

"China hopes that countries in the region will do more to promote regional peace, stability and development," Hong said in answer to a question about the proposal.

India's Foreign Ministry did not comment on Rudd's statement. But Indian analysts said Delhi was likely to be cool on the idea, partly out of reluctance to risk riling China.

"The Indian political establishment has always been wary of the idea of a military alliance," said Uday Bhaskar, the head of the National Maritime Foundation, a New Delhi-based think tank.

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The Largest Pacific Octopus At The National Zoo

Octupas

WASHINGTON -- There's a new giant Pacific octopus at the National Zoo. Sadly, only kids age 5 to 15 can enter The Washington Post's contest to name the new octopus (or else we might have some of our own suggestions).

The giant Pacific octopus is the largest octopus in the world -- it can grow up to 600 pounds; the zoo's new octopus is about the size of a grapefruit now. Giant Pacific octopuses -- the plural of octopus is octopuses, octopi or octopodes, as you like -- are quite intelligent, change color to blend in with their environments and usually live around four years. (Strangely, according to researchers, it's possible that giant Pacific octopuses could live longer if their optic glands were removed.) As the name suggests, the giant Pacific octopus is found in the Pacific -- in the northern part of the ocean, at depths of up to 2,500 feet.

The zoo had another giant Pacific octopus, acquired in 2010, named Octavius. She was about four years old when she died on Nov. 4.

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NATO blunder in the northwest, Islamabad closes the "Khyber Pass"

Pakistani Soldiers

AFP - Pakistan said Saturday it would review all its agreements with Washington and NATO, especially in the diplomatic, military and intelligence, following the worst blunder of Westerners in Pakistan in a decade, which killed 26 soldiers. Following an extraordinary meeting of its main leaders, the Pakistani government has also ordered the Americans to withdraw within 15 days of the Shamsi air base, located in south-western Pakistan, and closed all supply routes for NATO in Afghanistan from its territory. The ministers and heads the largest of the army attended Saturday's meeting of the Committee for the Defence of the Government (DCC) under the chairmanship of Prime Minister Yousuf Raza Gilani, said the latter's office.

"The DCC decided to close with immediate effect logistic supply routes to NATO / ISAF (the NATO force in Afghanistan)," the source said. The vast majority of these supplies arrive by boat to Pakistan in Karachi (south), the country's main port, before being sent to Afghanistan by road. "The DCC has also decided to ask the U.S. to leave within fifteen days of the Shamsi air base" that would be used by the CIA as part of its drone strikes in Pakistani tribal areas bordering Afghanistan. Moreover, "the DCC decided that the government would completely rethink all its programs, activities and cooperation agreements with the United States, NATO and ISAF, including diplomatic, political, military and intelligence" announced Gilani's office.

Pakistan has accused NATO of killing up to 26 Pakistani soldiers in an attack before dawn Saturday in one of the tribal areas, the main rear base for Taliban insurgents and Al Qaeda who regularly attack NATO on Afghan soil. According to Islamabad, NATO helicopters bombed a Pakistani military post Baize, in the tribal district of Khyber. "They killed 26 soldiers and wounded 14," he told AFP Masood Kausar, the governor of KPK, Northwest Province of Pakistan, before paying tribute to the "martyrs". In the evening, a spokesman for ISAF, General German Carsten Jacobson, said Afghan forces and NATO operating in the Afghan province of Kunar called for air support had and it was " very likely that the air support (...) has caused losses "in Pakistan.

The officer assured that ground troops were now near the Pakistani border. Denouncing "a serious breach Pakistan's sovereignty and a violation of international law", Prime Minister Yousuf Raza Gilani has protested "in the strongest terms" with NATO and the United States, who lead the ISAF , providing the two-thirds of his troops. Gilani interrupted his weekend to return to Islamabad and talks with President Asif Ali Zardari and the leaders of the powerful army which has denounced an attack "deliberate" and "unacceptable." The Information Minister Firdous Ashiq Awan for his part believed that the attack would strengthen the anti-American sentiment among his compatriots.

The U.S. ambassador in Islamabad Cameron Munter, meanwhile, said his country would work "closely with Islamabad to investigate this incident." Pakistan has repeatedly criticized in recent years for violations of its airspace by ISAF. The latest crisis began in September 2010. Islamabad had then accused the force of killing three Pakistani soldiers and blocked the supply trucks of NATO for almost two weeks, until Washington apologizes. The United States regularly bombed the Taliban and Al Qaeda in the tribal areas with drone raids Islamabad denounces as lip service, as long as they do not kill many civilians.

Americans regularly accuse their ally Pakistan playing a double game and secretly supporting the Taliban to defend its strategic interests in Afghanistan, where NATO plans to withdraw all its combat troops by the end of 2014 . Already stormy relations between the two countries soured after the unilateral U.S. operation in which killed the head of al-Qaeda Osama bin Laden last May in Abbottabad, a garrison town in Northern Pakistan.

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