Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

Tunisian Islamists rally to show "power of street"


TUNIS (Reuters) - Thousands of Islamists marched in Tunis on Saturday in a show of strength, a day after the funeral of an assassinated secular politician drew the biggest crowds seen on the streets since Tunisia's uprising two years ago.


About 6,000 supporters of the ruling Ennahda movement rallied to back their leader Rachid al-Ghannouchi, who was the target of angry slogans raised by mourners at Friday's mass funeral of Chokri Belaid, a rights lawyer and opposition leader.


"The people want Ennahda again," the Islamists chanted, waving Tunisian and party flags as they marched towards the Interior Ministry on Habib Bourguiba Avenue in the city centre.


The demonstration was dwarfed by the tens of thousands who had turned out in Tunis and other cities to honor Belaid and to protest against the Islamist-led government the day before, shouting slogans that included "We want a new revolution".


Belaid's killing by an unidentified gunman on Wednesday, Tunisia's first such political assassination in decades, has shaken a nation still seeking stability after the overthrow of veteran strongman Zine al-Abidine Ben Ali in January 2011.


The family of the slain politician has accused Ennahda of responsibility for his killing. The party denies any hand in it.


"We are here to support legitimacy, but if you prefer the power of the street, look at the streets today, we have this power," Lotfi Zitoun, an Ennahda leader, said in a speech to the Islamist demonstrators in Tunis.


Tunisia's political transition has been more peaceful than those in other Arab nations such as Egypt, Libya and Syria, but tensions are running high between Islamists elected to power and liberals who fear the loss of hard-won liberties.


FREEDOMS THREATENED


"We have gained things - the freedom of expression, the freedom to meet, to form organizations, parties, to work in the open," said Radhi Nasraoui, a veteran human rights campaigner.


"The problem is that these freedoms are still threatened, and there are attempts (by Islamists) to touch the gains of women," she told Reuters.


After Belaid's death, Prime Minister Hamadi Jebali promised to form a non-partisan, technocratic cabinet to run the country until an election could take place, despite complaints from within his own Ennahda party and its two junior non-Islamist coalition partners that he had failed to consult them.


Jebali told France 24 television on Saturday that he would resign if political parties refused to support his proposal, which he said was intended to "save the country from chaos".


The state news agency TAP said the prime minister would unveil his new government next week.


Secular groups have accused the Islamist-led government of a lax response to attacks by ultra-orthodox Salafi Islamists on cinemas, theatres, bars and individuals in recent months.


Prolonged political uncertainty and street unrest could damage an economy that relies on tourism. Unemployment and other economic grievances fuelled the revolt against Ben Ali in 2011.


Tunisia's stock exchange has fallen 3.32 percent since Belaid's assassination.


France, the former colonial power, ordered its schools in Tunis to stay closed on Friday and Saturday, warning its nationals to stay clear of potential flashpoints in the capital.


Some of the Islamist demonstrators shouted "France, out", in response to remarks by French Interior Minister Manuel Valls which were rejected by Jebali, the prime minister, on Friday.


"We must support all those who fight to maintain values and remain aware of the dangers of despotism, of Islamism that threatened those values today through obscurantism," Valls had said on Europe 1 radio on Thursday in comments on Tunisia.


"There is an Islamic fascism which is on the rise in many places."


Tunisian Foreign Minister Rafik Abdessalem described Valls's remarks as "worrying and unfriendly".



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Violence mars funeral of slain Tunisian opposition leader


TUNIS (Reuters) - Police and mourners clashed at the mass funeral on Friday of secular opposition leader Chokri Belaid, whose assassination has plunged Tunisia deeper into political crisis.


Braving chilly rain, at least 50,000 people turned out to honor Belaid in his home district of Jebel al-Jaloud in the capital, chanting anti-Islamist and anti-government slogans.


It was Tunisia's biggest funeral since the death of Habib Bourguiba, independence leader and first president, in 2000.


Violence erupted near the cemetery as police fired teargas at demonstrators who threw stones and set cars ablaze. Police also used teargas against protesters near the Interior Ministry, a frequent flashpoint for clashes in the Tunisian capital.


Tunisia, cradle of the Arab uprisings, is riven by tensions between dominant Islamists and their secular opponents, and by frustration at the lack of social and economic progress since President Zine al-Abidine Ben Ali was ousted in January 2011.


Belaid's assassination has shocked a country which had hitherto experienced a relatively peaceful political transition.


"The people want a new revolution," shouted mourners in Tunis, who also sang the national anthem.


Crowds surged around an open army truck carrying Belaid's coffin, draped in a red and white Tunisian flag, from a cultural center in Jebel al-Jaloud towards the leafy Jallaz cemetery, as a security forces helicopter flew overhead.


"Belaid, rest in peace, we will continue the struggle," mourners chanted, holding portraits of the politician killed near his home on Wednesday by a gunman who fled on a motorcycle.


Some demonstrators denounced Rachid Ghannouchi, leader of the ruling Islamist Ennahda party. "Ghannouchi, assassin, criminal," they chanted. "Tunisia is free, terrorism out."


Police fired teargas to disperse anti-government protesters throwing stones and petrol bombs in the southern mining town of Gafsa, a stronghold of support for Belaid, witnesses said.


Crowds there had chanted "The people want the fall of the regime", a slogan first used against Ben Ali.


CRADLE OF REVOLT


In Sidi Bouzid, the southern town where the revolt against the ousted strongman began, about 10,000 marched to mourn Belaid and shout slogans against Ennahda and the government.


Banks, factories and some shops were closed in Tunis and other cities in response to a strike called by unions in protest at Belaid's killing, but buses were running normally.


Tunis Air suspended all its flights because of the strikes, a spokesman for the national airline said. Airport sources in Cairo said EgyptAir had canceled two flights to Tunisia after staff at Tunis airport joined the general strike.


After Belaid's assassination, Prime Minister Hamdi Jebali, an Islamist, said he would dissolve the government and form a cabinet of technocrats to rule until elections could be held.


But his own Ennahda party and its secular coalition partners complained they had not been consulted, casting doubt over the status of the government and compounding political uncertainty.


No one has claimed responsibility for the killing of Belaid, a lawyer and secular opposition figure.


His family have blamed Ennahda but the party has denied any hand in the shooting. Crowds have attacked several Ennahda party offices in Tunis and other cities in the past two days.


"Hope still exists in Tunisia," Fatma Saidan, a noted Tunisian actor, told Reuters at Belaid's funeral. "We will continue to struggle against extremism and political violence."


She called for national unity, saying: "We are ready to accept Islamists, but they don't accept us."


SECULAR SYMBOL


While Belaid had only a modest political following, his criticism of Ennahda policies spoke for many Tunisians who fear religious radicals are bent on snuffing out freedoms won in the first of the revolts that rippled through the Arab world.


Secular groups have accused the Islamist-led government of a lax response to attacks by ultra-orthodox Salafi Islamists on cinemas, theatres and bars in recent months.


The economic effect of political uncertainty and street unrest could be serious in a country which has yet to draft a new constitution and which relies heavily on the tourist trade.


Mohamed Ali Toumi, president of the Tunisian Federation of Travel Agencies, described the week's events as a catastrophe that would have a negative impact on tourism, but he told the national news agency TAP no cancellations had been reported yet.


France, which had already announced the closure of its schools in Tunis on Friday and Saturday, urged its nationals to stay clear of potential flashpoints in the capital.


The cost of insuring Tunisian government bonds against default rose to its highest level in more than four years on Thursday and ratings agency Fitch said it could further downgrade Tunisia if political instability continues or worsens.


(For an interactive look at Tunisia please click on http://link.reuters.com/tub85t)


(Additional reporting by Alexander Dziadosz in Cairo and Brian Love in Paris; Editing by Jon Boyle)


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Khamenei rebuffs U.S. offer of direct talks


DUBAI (Reuters) - Iran's highest authority, Ayatollah Ali Khamenei, on Thursday slapped down an offer of direct talks made by U.S. Vice President Joe Biden this week, saying they would not solve the problem between them.


"Some naive people like the idea of negotiating with America, however, negotiations will not solve the problem," Khamenei said in a speech to officials and members of Iran's air force carried on his official website.


"If some people want American rule to be established again in Iran, the nation will rise up to face them," he said.


"American policy in the Middle East has been destroyed and Americans now need to play a new card. That card is dragging Iran into negotiations."


Khamenei made his comments just days after Joe Biden said the United States was prepared to meet bilaterally with the Iranian leadership. "That offer stands but it must be real and tangible," Biden said in a speech in Munich.


With traditional fiery rhetoric, Khamenei lambasted Biden's offer, saying that since the 1979 revolution the United States had gravely insulted Iran and continued to do so with its threat of military action.


"You take up arms against the nation of Iran and say: 'negotiate or we fire'. But you should know that pressure and negotiations are not compatible and our nation will not be intimidated by these actions," he added.


Relations between Iran and the United States were severed in 1979 after the overthrow of Iran's pro-western monarchy and diplomatic meetings between officials have since been very rare.


ALL OPTIONS STILL "ON THE TABLE"


Currently U.S.-Iran contact is limited to talks between Tehran and a so-called P5+1 group of powers on Iran's disputed nuclear program which are to resume on February 26 in Kazakhstan.


Israel's Deputy Prime Minister Dan Meridor said he was skeptical the negotiations in Almaty could yield a result, telling Israel Radio that the United States needed to demonstrate to Iran that "all options were still on the table".


Israel, widely recognized to be the only nuclear power in the Middle East, has warned it could mount a pre-emptive strike on Iranian atomic sites. Israel sees its existence as directly threatened by the prospect of an nuclear-armed Iran, given Tehran's refusal to recognize the existence of the Jewish state.


"The final option, this is the phrasing we have used, should remain in place and be serious," said Meridor.


"The fact that the Iranians have not yet come down from the path they are on means that talks ...are liable to bring about only a stalling for time," he said.


Iran maintains its nuclear program is entirely peaceful but Western powers are concerned it is intent on developing a weapons program.


Many believe a deal on settling the nuclear issue is impossible without a U.S.-Iranian thaw. But any rapprochement would require direct talks addressing many sources of mutual mistrust that have lingered since Iran's 1979 Islamic Revolution and the subsequent U.S. embassy hostage crisis in Tehran.


Moreover, although his re-election last November may give President Barack Obama a freer hand to pursue direct negotiations, analysts say Iran's own presidential election in June may prove an additional obstacle to progress being made.


(Additional reporting by Dan Williams; Editing by William Maclean and Jon Boyle)



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Tunisia protests after government critic shot dead


TUNIS (Reuters) - A fierce critic of the Tunisian government's dealings with radical Islamists was shot dead on Wednesday, sending protesters onto the streets two years after their Jasmine Revolution sparked revolt across the Arab world.


The headquarters of the moderate Islamist Ennahda party, which rules in a fractious coalition with secularists, was set ablaze after Chokri Belaid, an outspoken, secular leader, was gunned down outside his home in the capital.


His party and others in the opposition parties said they would quit the assembly that is writing a new constitution and called a general strike for Thursday when Belaid will be buried.


Prime Minister Hamadi Jebali, who said the identity of the attacker was not known, condemned his killing as a political assassination and a strike against the "Arab Spring" revolution. Ennahda denied any involvement.


As Belaid's body was taken by ambulance through Tunis from the hospital where he died, police fired teargas towards about 20,000 protesters at the Interior Ministry chanting for the fall of the government.


"This is a black day in the history of modern Tunisia ... Today we say to the Islamists, 'get out' ... enough is enough," said Souad, a 40-year-old teacher outside the ministry.


"Tunisia will sink in the blood if you stay in power."


Despite calls for calm from the president, who is not an Islamist, thousands also demonstrated in cities including Mahdia, Sousse, Monastir and Sidi Bouzid, the cradle of the revolution, where police fired teargas and warning shots at protesters who set cars and a police station on fire.


While Belaid's nine-party Popular Front bloc has only three seats in the constituent assembly, the opposition jointly agreed to pull its 90 or so members out of the body, which is acting as parliament and writing the new post-revolution charter. Ennahda and its fellow ruling parties have some 120 seats.


The small North African state was the first Arab country to oust its leader and hold free elections as uprisings spread around the region in 2011, leading to the ousting of the rulers of Egypt, Yemen and Libya and to the civil war in Syria.


But as in Egypt, many who campaigned for freedom from repression under autocratic rulers and better prospects for their future now feel their revolutions have been hijacked by Islamists they accuse of clamping down on personal liberties, with no sign of new jobs or improvements in infrastructure.


Tunisia's new constitution will pave the way for new elections but will inevitably be a source of friction between secularists and Islamists, just as it was in Egypt, where the president adopted sweeping powers to force it through.


The ruling parties have agreed to hold the vote in June, but that date still needs approval by the assembly.


HARDSHIP


Since the uprising, the government has faced a string of protests over economic hardship and Tunisia's future path, with many complaining hardline Salafists were taking over the revolution in the former French colony once dominated by a secular elite under the autocratic rule of Zine al-Abidine Ben Ali.


Last year, Salafist groups prevented several concerts and plays from taking place in Tunisian cities, saying they violated Islamic principles. That worries the secular-minded among the 11 million Tunisians, who fear freedom of expression is in danger.


Salafists also ransacked the U.S. embassy in Tunis in September, during international protests over an Internet video mocking Islam.


The embassy issued a statement on Wednesday condemning Belaid's killing: "There is no justification for this heinous and cowardly act," it said. "Political violence has no place in the democratic transition in Tunisia."


The United States urged the Tunisian government to bring his killers to book.


Declining trade with the crisis-hit euro zone has left Tunisians struggling to achieve the better living standards many had hoped for following Ben Ali's departure. Any further signs of unrest could scare off tourists vital to an industry only just recovering from the revolution.


"More than 4,000 are protesting now, burning tires and throwing stones at the police," Mehdi Horchani, a Sidi Bouzid resident, told Reuters. "There is great anger."


Jobless graduate Mohamed Bouazizi set himself on fire in December 2010 in the city, 300 km (180 miles) southwest of Tunis, after police confiscated his unlicensed fruit cart, triggering the "Jasmine Revolution" that forced Ben Ali to flee to Saudi Arabia less than a month later, on January 14, 2011.


President Moncef Marzouki, who last month warned the tension between secularists and Islamists might lead to "civil war", canceled a visit to Egypt scheduled for Thursday and cut short a trip to France, where he addressed the European Parliament.


"There are political forces inside Tunisia that don't want this transition to succeed," Marzouki told journalists in Strasbourg.


"When one has a revolution, the counter revolution immediately sets in because those who lose power - it's not only Ben Ali and his family - are the hundreds of thousands of people with many interests who see themselves threatened by this revolution," he added.


Belaid, who died in hospital, said earlier this week that dozens of people close to the government had attacked a Popular Front group meeting in Kef, northern Tunisia, on Sunday.


A lawyer and human rights activist, the 48-year-old had been a constant critic of the government, accusing it of being a puppet of the rulers in the small but wealthy Gulf state of Qatar, which Tunisia denies.


"Chokri Belaid was killed today by four bullets to the head and chest," Ziad Lakhader, a Popular Front leader, told Reuters.


The Interior Ministry said he had been gunned down by a man who fled on a motorcycle with an accomplice.


DENIES INVOLVEMENT


Prime Minister Jebali, a member of Ennahda, said the killers wanted to "silence his voice".


"The murder of Belaid is a political assassination and the assassination of the Tunisian revolution," he said.


Ennahda leader Rached Ghannouchi denied any involvement by his party in the killing. "Is it possible that the ruling party could carry out this assassination when it would disrupt investment and tourism?" Ghannouchi told Reuters.


He blamed those seeking to derail Tunisia's democratic transition: "Tunisia today is in the biggest political stalemate since the revolution. We should be quiet and not fall into a spiral of violence. We need unity more than ever," he said.


He accused secular opponents of stirring up sentiment against his party following Belaid's death. "The result is burning and attacking the headquarters of our party in many areas," he said.


Witnesses said crowds had also attacked Ennahda offices in Sousse, Monastir, Mahdia and Sfax.


French President Francois Hollande said he was concerned by the rise of violence in Paris's former dominion, where the government says al Qaeda-linked militants linked to those in neighboring countries have been accumulating weapons with the aim of creating an Islamic state.


"This murder deprives Tunisia of one of its most courageous and free voices," Hollande's office said in a statement.


Riccardo Fabiani, Eurasia analyst on Tunisia, described it as a "major failure for Tunisian politics".


"The question is now what is Ennahda going to do and what are its allies going to do?" he said. "They could be forced to withdraw from the government which would lead to a major crisis in the transition."


Marzouki warned last month that the conflict between Islamists and secularists could lead to civil war and called for a national dialogue that included all political groupings.


Ennahda won 42 percent of seats in a parliamentary election in 2011 and formed a government in coalition with two secular parties, the Congress for the Republic, to which President Marzouki belongs, and Ettakatol.


Marzouki's party threatened on Sunday to withdraw from the government unless it dropped two Islamist ministers.


(Additional reporting by John Irish in Paris; Writing by Alison Williams; Editing by Alastair Macdonald)



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Iran's Ahmadinejad kissed and scolded in Egypt


CAIRO (Reuters) - Mahmoud Ahmadinejad was both kissed and scolded on Tuesday when he began the first visit to Egypt by an Iranian president since Tehran's 1979 Islamic revolution.


The trip was meant to underline a thaw in relations since Egyptians elected an Islamist head of state, President Mohamed Mursi, last June. But it also highlighted deep theological and geopolitical differences.


Mursi, a member of the Sunni Muslim Brotherhood, kissed Ahmadinejad after he landed at Cairo airport and gave him a red carpet reception with military honors. Ahmadinejad beamed as he shook hands with waiting dignitaries.


But the Shi'ite Iranian leader received a stiff rebuke when he met Egypt's leading Sunni Muslim scholar later at Cairo's historic al-Azhar mosque and university.


Sheikh Ahmed al-Tayeb, head of the 1,000-year-old seat of religious learning, urged Iran to refrain from interfering in Gulf Arab states, to recognize Bahrain as a "sisterly Arab nation" and rejected the extension of Shi'ite Muslim influence in Sunni countries, a statement from al-Azhar said.


Visiting Cairo to attend an Islamic summit that begins on Wednesday, Ahmadinejad told a news conference he hoped his trip would be "a new starting point in relations between us".


However, a senior cleric from the Egyptian seminary, Hassan al-Shafai, who appeared alongside him, said the meeting had degenerated into an exchange of theological differences.


"There ensued some misunderstandings on certain issues that could have an effect on the cultural, political and social climate of both countries," Shafai said.


"The issues were such that the grand sheikh saw that the meeting ... did not serve the desired purpose."


The visit would have been unthinkable during the rule of Hosni Mubarak, the military-backed autocrat who preserved Egypt's peace treaty with Israel during his 30 years in power and deepened ties between Cairo and the West.


"The political geography of the region will change if Iran and Egypt take a unified position on the Palestinian question," Ahmadinejad said in an interview with Al Mayadeen, a Beirut-based TV station, on the eve of his trip.


He said he wanted to visit the Gaza Strip, the Palestinian territory which neighbors Egypt to the east and is run by the Islamist movement Hamas. "If they allow it, I would go to Gaza to visit the people," Ahmadinejad said.


Analysts doubt that the historic changes that brought Mursi to power will result in a full restoration of diplomatic ties between states whose relations were broken off after the conclusion of Egypt's peace treaty with Israel in 1979.


OBSTACLES TO FULL TIES


At the airport the two leaders discussed ways of improving relations and resolving the Syrian crisis "without resorting to military intervention", Egyptian state media reported.


Egypt is concerned by Iran's support for Syrian President Bashar al-Assad, who is trying to crush an uprising inspired by the revolt that swept Mubarak from power two years ago. Egypt's overwhelmingly Sunni Muslim population is broadly supportive of the uprising against Assad's Alawite-led administration.


Egyptian Foreign Minister Mohamed Kamel Amr sought to reassure Gulf Arab allies - that are supporting Cairo's battered state finances and are deeply suspicious of Iran - that Egypt would not jeopardize their security.


"The security of the Gulf states is the security of Egypt," he said in remarks reported by the official MENA news agency.


Mursi wants to preserve ties with the United States, the source of $1.3 billion in aid each year to the influential Egyptian military.


"The restoration of full relations with Iran in this period is difficult, despite the warmth in ties ... because of many problems including the Syrian crisis and Cairo's links with the Gulf states, Israel and the United States," said one former Egyptian diplomat.


Iranian Foreign Minister Ali Akbar Salehi said he was optimistic that ties could grow closer.


"We are gradually improving. We have to be a little bit patient. I'm very hopeful about the expansion of the bilateral relationship," he told Reuters. Asked where he saw room for closer ties, he said: "Trade and economics."


Egypt and Iran have taken opposite courses since the late 1970s. Egypt, under Mubarak's predecessor Anwar Sadat, concluded a peace treaty with Israel in 1979 and became a close ally of the United States and Europe. Iran from 1979 turned into a center of opposition to Western influence in the Middle East.


Symbolically, Iran named a street in Tehran after the Islamist who led the 1981 assassination of Sadat.


Egypt gave asylum and a state funeral to Iran's exiled Shah Reza Pahlavi, who was overthrown in the 1979 Iranian revolution. He is buried in a mosque beside Cairo's mediaeval Citadel alongside his ex-brother-in-law, Egypt's last king, Farouk.


(Additional reporting by Ayman Samir, Marwa Awad and Alexander Diadosz; Writing by Paul Taylor and Tom Perry; Editing by Andrew Roche and Robin Pomeroy)



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Syrian opposition chief says offers Assad peaceful exit


BEIRUT (Reuters) - Syrian opposition leader Moaz Alkhatib urged President Bashar al-Assad on Monday to respond to his initiative for dialogue, saying it was aimed at ending the bloodshed and helping "the regime leave peacefully".


Speaking after meeting senior Russian, U.S. and Iranian officials at the weekend, Alkahtib said none of them had a plan to end the civil war and Syrians must find their own resolution.


"The big powers have no vision ... Only the Syrian people can decide on the solution," the Syrian National Coalition leader told Al Jazeera Television.


The moderate Islamist preacher announced last week he was prepared to talk to Assad's representatives. Although he set several conditions, the move broke a taboo on contacts with authorities and dismayed many in opposition ranks who insist on Assad's departure as a precondition for negotiation.


Alkhatib said it was not "treachery" to seek dialogue to end a conflict in which more than 60,000 people have been killed, 700,000 have been driven from their country and millions more are homeless and hungry.


"The regime must take a clear stand (on dialogue) and we say we will extend our hand for the interest of people and to help the regime leave peacefully," he told the Qatar-based channel. "It is now in the hands of the regime."


Assad announced last month what he said were plans for reconciliation talks to end the violence but - in a speech described by U.N. Syria envoy Lakhdar Brahimi as narrow and uncompromising - he said there would be no dialogue with people he called traitors or "puppets made by the West".


Syria's uprising erupted 22 months ago with largely peaceful protests, escalating into a civil war that pits mainly Sunni Muslim rebels against Assad, who is from Syria's Alawite minority and whose family has ruled Syria for 42 years.


POWERS DIVIDED


The violence has divided major powers, with Russia and China blocking U.N. Security Council draft resolutions backed by the United States, European Union and Sunni Muslim Gulf Arab states that could have led to U.N. sanctions on Assad. Shi'ite Iran has remained his strongest regional backer.


Alkhatib said that the international deadlock meant that only Syrians could stave off further humanitarian disaster.


"We will find a solution, there are many keys," he said. "If the regime wants to solve (the crisis), it can take part in it. If it wants to get out and get the people out of this crisis, we will all work together for the interest of the people and the departure of the regime."


One proposal under discussion was the formation of a transitional government, Alkhatib said, without specifying how he thought it could come about. World powers agreed a similar formula seven months ago but then disagreed over whether that could allow Assad to stay on as head of state.


Activists reported clashes between the army and rebel fighters to the east of Damascus on Monday and heavy shelling of rebel-held areas of the central city of Homs. The Jobar neighborhood, on the southwestern edge of Homs, was hit by more than 100 rockets on Monday morning, one activist said.


The Syrian Observatory for Human Rights said 180 people had been killed across the country on Sunday, including 114 rebel fighters and soldiers. Sunday's death toll also included 28 people killed in the bombardment of a building in the Ansari district of the northern city of Aleppo.


Assad has described the rebel fighters as foreign-backed Islamist terrorists and said a precondition for any solution is that Turkey and Sunni-ruled Gulf Arab states stop funding, sheltering and arming his foes.


Rebels and activists say Iran and the Lebanese Shi'ite military group Hezbollah have sent fighters to reinforce Assad's army - a charge that both deny.


ECONOMIC SUPPORT


"The army of Syria is big enough, they do not need fighters from outside," Iranian Foreign Minister Ali Akbar Salehi said in Berlin on Monday.


"We are giving them economic support, we are sending gasoline, we are sending wheat. We are trying to send electricity to them through Iraq, we have not been successful."


Another Iranian official, speaking in Damascus after talks with Assad, said on Monday that Israel would regret an air strike against Syria last week, without spelling out whether Iran or its ally planned a military response.


"They will regret this recent aggression," said Saeed Jalili, Secretary of Iran's Supreme National Security Council.


Salehi, Russian Foreign Minister Sergei Lavrov and U.S. Vice President Joe Biden all met Alkhatib in Munich at the weekend and portrayed his willingness to talk with Syrian authorities as a major step towards resolving the war.


But Alkhatib is under pressure from other members of the exiled leadership in Cairo for saying he would be willing to talk to Assad, albeit on condition that Assad releases 160,000 prisoners and issues passports to the tens of thousands who have fled to neighboring countries without travel documents.


Walid al-Bunni, a member of the Coalition's 12-member politburo, dismissed Alkhatib's meeting with Salehi.


"It was unsuccessful. The Iranians are unprepared to do anything that could help the causes of the Syrian Revolution," Bunni, a former political prisoner, told Reuters from Budapest.


Bunni said the Coalition was preparing a meeting of all its 70 members in Cairo to hear from Alkhatib about his diplomatic moves.


Alkhatib, whose family are custodians of the Umayyad Mosque in the historic centre of Damascus, is seen as a bulwark against the radical Islamist Salafist forces who wield heavy influence in the armed opposition.


(Additional reporting by Yeganeh Torbati in Dubai and Stephen Brown in Berlin; Editing by Kevin Liffey)



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Syrian opposition chief under fire for talks with Assad allies


MUNICH (Reuters) - Syria's opposition leader flew back to his Cairo headquarters from Germany on Sunday to explain to skeptical allies his decision to talk with President Bashar al-Assad's main backers Russia and Iran, in hope of a breakthrough in the crisis.


The Russian and Iranian foreign ministers, and U.S. Vice-President Joe Biden, portrayed Syrian National Coalition leader Moaz Alkhatib's new willingness to talk with the Assad regime as a major step towards resolving the two-year-old war.


"If we want to stop the bloodshed we cannot continue putting the blame on one side or the other," Iran's Ali Akbar Salehi said on Sunday, welcoming Alkhatib's overtures and adding that he was ready to keep talking to the opposition. Iran is Assad's main military backer together with Russia.


"This is a very important step. Especially because the coalition was created on the basis of categorical rejection of any talks with the regime," Lavrov was quoted as saying on Sunday by Russia's Itar Tass news agency.


Russia has blocked three U.N. Security Council resolutions aimed at pushing Assad out or pressuring him to end a civil war in which more than 60,000 people have died. But Moscow has also tried to distance itself from Assad by saying it is not trying to prop him up and will not offer him asylum.


Syrian state media said Assad received a senior Iranian official and told him Syria could withstand "threats ... and aggression" like an air attack on a military base last week, which Damascus has blamed on Israel.


"USELESS" TALKING TO IRAN


Politicians from the United States, Europe and the Middle East at the Munich Security Conference praised Alkhatib's "courage". But the moderate Islamist preacher was likely to face sharp criticism from the exiled leadership back in Cairo.


Alkhatib has put his leadership on the line by saying he would be willing to talk to representatives of the Assad regime on condition they release 150,000 prisoners and issue passports to the tens of thousands of displaced people who have fled to neighboring countries but do not have documents.


"He has a created a political firestorm. Meeting the Iranian foreign minister was totally unnecessary because it is useless. Iran backs Assad to the hilt and he might as well have met with the Syrian foreign minister," said one of Alkhatib's colleagues on the 12-member politburo of the Syrian National Coalition.


Alkhatib, whose family are custodians of the Umayyad Mosque in the historic centre of Damascus, is seen as a bulwark against Salafist forces who are a main player in the armed opposition.


He was chosen as the head of the Coalition in Qatar last year, with crucial backing from the Muslim Brotherhood.


The Syrian opposition member, speaking on condition of anonymity, pointed to comments by Salehi and Lavrov on Sunday, a day after their meetings with Alkhatib, as evidence that they had not changed their positions and still backed Assad.


Salehi told the Munich conference where the round of talks took place that the solution was to hold elections in Syria - making no mention of Assad having to leave the country.


FIZZLE OUT?


Firm opposition backers like Qatar's Prime Minister Hamad bin Jassim al-Thani and U.S. Republican Senator John McCain voiced frustration in Munich at the international community's reluctance to intervene in the Syrian conflict.


"We consider the U.N. Security Council directly responsible for the continuing tragedy of the Syrian people, the thousands of lives that were lost, the blood that was spilled and is still flowing at the hands of the regime's forces," said al-Thani.


Moscow played down the significance of the discussions in Munich, with one diplomatic source calling the talks between Lavrov and Alkhatib "simply routine meetings".


"We have presented our views when Minister Lavrov meet Alkhatib, we have noted his comments that there is still a chance for dialogue with Syrian government. That is something we have called for," said the Russian source.


"To what extent is that realistic, that's a different matter and there are doubts about that," said the source.


One source in Khatib's delegation said the offer of dialogue would find an echo among Syrians opposed to Assad who have not taken up arms "and want to get rid of him with the minimum bloodshed".


Fawaz Tello, a veteran Syrian opposition campaigner based in Berlin, said Alkhatib had made "a calculated political manoeuvre to embarrass Assad".


"But it is an incomplete initiative and it will probably fizzle out," Tello told Reuters. "The Assad regime cannot implement any item in the series of initiatives we have seen lately because it would simply fall."


Russia and Iran were already beginning to use Alkhatib's initiative negatively, he said, while "the regime and its allies will only treat Alkhatib's meetings as an additional opportunity to smash the rebellion or weaken it".


Asked about the risk of his strategy being seen as a sign of weakness in the opposition or frustration at the Free Syrian Army's gains, Alkhatib told Reuters in Munich: "The fighters have high morale and they are making daily advances."


(Additional reporting by Alexandra Hudson in Munich and Gabriela Baczynska in Moscow; Writing by Stephen Brown; Editing by Andrew Roche)



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Turkish leftist group claims U.S. embassy bombing: website


ISTANBUL (Reuters) - A Turkish leftist group claimed responsibility on Saturday for a suicide bomb attack on the U.S. embassy and accused Washington of using Turkey as its "slave", according to a statement posted on the internet.


The Revolutionary People's Liberation Army-Front (DHKP-C) said it carried out Friday's attack, in which a suicide bomber detonated explosives strapped to his body at the embassy in Ankara, killing himself and a Turkish security guard.


In a statement on "The People's Cry" website, the DHKP-C, which is listed as terrorist organization by the United States and Turkey, warned Turkish Prime Minister Tayyip Erdogan he too was a target.


"Murderer America! You will not run away from people's rage," the statement said, next to a picture of the bomber, named as Alisan Sanli, wearing a black beret and military-style clothes and with an explosives belt around his waist.


Erdogan, who said hours after the attack that the DHKP-C were responsible, met with his interior and foreign ministers as well as the head of the army and state security service in Istanbul on Saturday to discuss the bombing.


Interior Minister Muammer Guler said the attacker had served time in jail on domestic terrorism charges in Turkey in the past, re-entered the country using false documents and was wanted by the authorities.


"(The bomber) was demanding to pass through the guest and staff gate of the U.S. embassy using a fake ID when he detonated the explosives," the provincial governor's office in Ankara said in a statement.


It said he had also detonated a hand grenade.


The White House condemned the bombing as an "act of terror", while the U.N. Security Council described it as a heinous act.


U.S. officials said the DHKP-C were the main suspects in Friday's bombing but did not exclude other possibilities.


Islamist radicals, extreme left-wing groups, ultra-nationalists and Kurdish militants have all carried out attacks in Turkey in the past.


U.S. PATRIOT MISSILES


The DHKP-C, formed in 1978, is virulently anti-American.


It called on Washington to remove Patriot missiles, due to go operational on Monday as part of a NATO defense system, from Turkish soil. The missiles are being deployed alongside systems from Germany and the Netherlands to guard NATO-member Turkey against a spillover of the war in neighboring Syria.


"Our action is for the independence of our country, which has become a new slave of America," the statement said.


Turkey is a key U.S. ally in the Middle East with common interests ranging from energy security to counter-terrorism and has been one of the leading advocates of foreign intervention to end the civil war in Syria.


It was the second attack on a U.S. mission in four months. On September 11, 2012, U.S. Ambassador Christopher Stevens and three American personnel were killed in an Islamist militant attack on the U.S. Consulate in Benghazi, Libya.


The DHKP-C was responsible for the assassination of two U.S. military contractors in the early 1990s in protest against the first Gulf War and launched rockets at the U.S. consulate in Istanbul in 1992, according to the U.S. State Department.


It has been blamed for previous suicide attacks, including one in 2001 that killed two police officers and a tourist in Istanbul's central Taksim Square, and has carried out a series of deadly attacks on police stations in the last six months.


Friday's attack may have come in retaliation for an operation against the DHKP-C last month in which Turkish police detained 85 people. A court subsequently remanded 38 of them in custody over links to the group.


(Writing by Nick Tattersall; Editing by Andrew Roche)



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Suicide bomber kills guard at U.S. embassy in Turkey


ANKARA (Reuters) - A suicide bomber from a far-left group killed a Turkish security guard at the U.S. embassy in Ankara on Friday, blowing the door off a side entrance and sending smoke and debris flying into the street.


The attacker blew himself up inside U.S. property, Ankara Governor Alaaddin Yuksel said. The blast sent masonry spewing out of the wall and could be heard a mile away.


Interior Minister Muammer Guler said the bomber was a member of a far-left group. The U.S. State Department said it was working with Turkish police to investigate what it described as "a terrorist blast".


Islamist radicals, far-left groups, far-right groups and Kurdish separatist militants have all carried out attacks in Turkey in the past. There was no claim of responsibility.


"The suicide bomber was ripped apart and one or two citizens from the special security team passed away," said Turkish Prime Minister Tayyip Erdogan, who was attending a ceremony in Istanbul when the blast happened.


"This event shows that we need to fight together everywhere in the world against these terrorist elements," he said.


Far-left groups in Turkey oppose what they see as U.S. influence over Turkish foreign policy.


Turkey is a key U.S. ally in the Middle East with common interests ranging from energy security to counter-terrorism, and has been one of the leading advocates of foreign intervention to end the conflict in neighboring Syria.


Around 400 U.S. soldiers have arrived in Turkey over the past few weeks to operate Patriot anti-missile batteries meant to defend against any spillover of Syria's civil war, part of a NATO deployment due to be fully operational in the coming days.


U.S. Ambassador Francis Ricciardone emerged through the main gate of the embassy, which is surrounded by high walls, shortly after the explosion to address reporters, flanked by a security detail as a Turkish police helicopter hovered overhead.


"We are very sad of course that we lost one of our Turkish guards at the gate," Ricciardone said, thanking the Turkish authorities for a prompt response.


A Reuters witness saw one wounded person being lifted into an ambulance as police armed with assault rifles cordoned off the area.


"It was a huge explosion. I was sitting in my shop when it happened. I saw what looked like a body part on the ground," said travel agent Kamiyar Barnos, whose shop window was shattered around 100 meters away from the blast.


OPPOSED TO U.S. INFLUENCE


State broadcaster TRT said the attacker was thought to be from The Revolutionary People's Liberation Party-Front (DHKP-C), which wants a socialist state and is vehemently anti-American, according to the U.S. National Counterterrorism Center (NCTC).


The group, deemed a terrorist organization by both the United States and Turkey, was blamed for a suicide attack in 2001 that killed two police officers and a tourist in Istanbul's central Taksim Square.


Guler said the bomber could have been from the DHKP-C or a similar group.


The DHKP/C has in the past attacked Turkish official targets with bombs, but arrests of some of its members in recent years have weakened its capabilities, according to the NCTC.


The date of the DHKP-C's most recent attack, on an Istanbul police station, was September 11, 2012, seen as a symbolic strike to coincide with the 11th anniversary of the al Qaeda attacks on the United States.


Despite some strains, Washington and Ankara have long had a strong strategic alliance. U.S. President Barack Obama chose Turkey as his first Muslim nation to visit after he took office five years ago.


Turkish support and bases have helped U.S. forces in Afghanistan, while Turkey hosts a NATO radar system, operated by U.S. forces, in its eastern province of Malatya to help defend against any regional threat from Iran.


More recently, it has led calls for international intervention in neighboring Syria and is hosting hundreds of NATO soldiers who are manning the Patriot missile defense system near the Syrian border, hundreds of kilometers from the capital.


The U.S. consulate in Istanbul warned its citizens to be vigilant and to avoid large gatherings, while the British mission in Istanbul called on British businesses to tighten security after what it called a "suspected terrorist attack".


The most serious bombings of this kind in Turkey occurred in November 2003, when car bombs shattered two synagogues, killing 30 people and wounding 146. Authorities said the attack bore the hallmarks of al Qaeda.


Part of the HSBC Bank headquarters was destroyed and the British consulate was damaged in two more explosions that killed a further 32 people a week later.


(Additional reporting by Daren Butler and Ayla Jean Yackley in Istanbul; Writing by Nick Tattersall; Editing by Jon Hemming)



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Syrian rebels make slow headway in south


AMMAN (Reuters) - The revolt against President Bashar al-Assad first flared in Deraa, but the southern border city now epitomizes the bloody stalemate gripping Syria after 22 months of violence and 60,000 dead.


Jordan next door has little sympathy with Assad, but is wary of spillover from the upheaval in its bigger neighbor. It has tightened control of its 370-km (230-mile) border with Syria, partly to stop Islamist fighters or weapons from crossing.


That makes things tough for Assad's enemies in the Hawran plain, traditionally one of Syria's most heavily militarized regions, where the army has long been deployed to defend the southern approaches to Damascus from any Israeli threat.


The mostly Sunni Muslim rebels, loosely grouped in tribal and local "brigades", are united by a hatred of Assad and range from secular-minded fighters to al Qaeda-aligned Islamists.


"Nothing comes from Jordan," complained Moaz al-Zubi, an officer in the rebel Free Syrian Army, contacted via Skype from the Jordanian capital Amman. "If every village had weapons, we would not be afraid, but the lack of them is sapping morale."


Insurgents in Syria say weapons occasionally do seep through from Jordan but that they rely more on arsenals they seize from Assad's troops and arms that reach them from distant Turkey.


This month a Syrian pro-government television channel showed footage of what it said was an intercepted shipment of anti-tank weapons in Deraa, without specifying where it had come from.


Assad's troops man dozens of checkpoints in Deraa, a Sunni city that was home to 180,000 people before the uprising there in March 2011. They have imposed a stranglehold which insurgents rarely penetrate, apart from sporadic suicide bombings by Islamist militants, say residents and dissidents.


Rebel activity is minimal west of Deraa, where military bases proliferate near the Israeli-occupied Golan Heights.


Insurgents have captured some towns and villages in a 25-km (17-mile) wedge of territory east of Deraa, but intensifying army shelling and air strikes have reduced many of these to ruin, forcing their residents to join a rapidly expanding refugee exodus to Jordan, which now hosts 320,000 Syrians.


However, despite more than a month of fighting, Assad's forces have failed to winkle rebels out of strongholds in the rugged volcanic terrain that stretches from Busra al-Harir, 37 km (23 miles) northeast of Deraa, to the outskirts of Damascus.


Further east lies Sweida, home to minority Druze who have mostly sat out the Sunni-led revolt against security forces dominated by Assad's minority, Shi'ite-rooted Alawite sect.


"KEY TO DAMASCUS"


As long as Assad's forces control southwestern Syria, with its fertile, rain-fed Hawran plain, his foes will find it hard to make a concerted assault on Damascus, the capital and seat of his power, from suburbs where they already have footholds.


"If this area is liberated, the supply routes from the south to Damascus would be cut," said Abu Hamza, a commander in the rebel Ababeel Hawran Brigade. "Deraa is the key to the capital."


Fighters in the north, where Turkey provides a rear base and at least some supply lines, have fared somewhat better than their counterparts in the south, grabbing control of swathes of territory and seizing half of Aleppo, Syria's biggest city.


They have also captured some towns in the east, across the border from Iraq's Sunni heartland of Anbar province, and in central Syria near the mostly Sunni cities of Homs and Hama.


But even where they gain ground, Assad's mostly Russian-supplied army and air force can still pound rebels from afar, prompting a Saudi prince to call for outsiders to "level the playing field" by providing anti-tank and anti-aircraft weapons.


"What is needed are sophisticated, high-level weapons that can bring down planes, can take out tanks at a distance," Prince Turki al-Faisal, a former intelligence chief and brother of the Saudi foreign minister, said last week at a meeting in Davos.


Saudi Arabia and its fellow Gulf state Qatar have long backed Assad's opponents and advocate arming them, but for now the rebels are still far outgunned by the Syrian military.


"They are not heavily armed, properly trained or equipped," said Ali Shukri, a retired Jordanian general, who argued also that rebels would need extensive training to use Western anti-tank or anti-aircraft weapons effectively even if they had them.


He said two powerful armored divisions were among Syrian forces in the south, where the rebels are "not that strong".


It is easier for insurgents elsewhere in Syria to get support via Turkey or Lebanon than in the south where the only borders are with Israel and Jordan, Shukri said.


Jordan, which has urged Assad to go, but seeks a political solution to the crisis, is unlikely to ramp up support for the rebels, even if its cautious policy risks irritating Saudi Arabia and Qatar, financial donors to the cash-strapped kingdom.


ISLAMIST STRENGTH


"I'm confident the opposition would like to be sourcing arms regularly from the Jordanian border, not least because I guess it would be easier for the Saudis to get stuff up there on the scale you'd be talking about," said a Western diplomat in Amman.


A scarcity of arms and ammunition is the main complaint of the armed opposition, a disparate array of local factions in which Islamist militants, especially the al Qaeda-endorsed Nusra Front, have come to play an increasing role in recent months.


The Nusra Front, better armed than many groups, emerged months after the anti-Assad revolt began in Deraa with peaceful protests that drew a violent response from the security forces.


It has flourished as the conflict has turned ever more bitterly sectarian, pitting majority Sunnis against Alawites.


Since October, the Front, deemed a terrorist group by the United States, has carried out at least three high-profile suicide bombings in Deraa, attacking the officers' club, the governor's residence and an army checkpoint in the city centre.


Such exploits have won prestige for the Islamist group, which has gained a reputation for military prowess, piety and respect for local communities, in contrast to some other rebel outfits tainted by looting and other unpopular behavior.


"So far no misdeeds have come from the Nusra Front to make us fear them," said Daya al-Deen al-Hawrani, a fighter from the rebel al-Omari Brigade. "Their goal and our goal is one."


Abu Ibrahim, a non-Islamist rebel commander operating near Deraa, said the Nusra Front fought better and behaved better than units active under the banner of the Free Syrian Army.


"Their influence has grown," he acknowledged, describing them as dedicated and disciplined. Nor were their fighters imposing their austere Islamic ideology on others, at least for now. "I sit with them and smoke and they don't mind," he said.


The Nusra Front may be trying to avoid the mistakes made by a kindred group, Al Qaeda in Iraq, which fought U.S. troops and the rise of Shi'ite factions empowered by the 2003 invasion.


The Iraqi group's suicide attacks on civilians, hostage beheadings and attempts to enforce a harsh version of Islamic law eventually alienated fellow Sunni tribesmen who switched sides and joined U.S. forces in combating the militants.


Despite the Nusra Front's growing prominence and its occasional spectacular suicide bombings in Deraa, there are few signs that its fighters or other rebels are on the verge of dislodging the Syrian military from its southern bastions.


Abu Hamza, the commander in the Ababeel Hawran Brigade, was among many rebels and opposition figures to lament the toughness of the task facing Assad's enemies in the south: "What is killing us is that all of Hawran is a military area," he said.


"And every village has five army compounds around it."


(Writing by Alistair Lyon; Editing by Alastair Macdonald)



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Merkel urges Egypt's Mursi to hold crisis dialogue


CAIRO/BERLIN (Reuters) - Authorities in an Egyptian city scaled back a curfew imposed by President Mohamed Mursi, and the Islamist leader cut short a visit to Europe on Wednesday to deal with the deadliest violence in the seven months since he took power.


Two more protesters were shot dead before dawn near Cairo's central Tahrir Square on Wednesday, a day after the army chief warned that the state was on the brink of collapse if Mursi's opponents and supporters did not end street battles.


More than 50 people have been killed in the past seven days of protests by Mursi's opponents, raising global concern over whether the Islamist leader can restore stability to the most populous Arab country.


Mursi imposed a curfew and a state of emergency on three Suez Canal cities on Sunday but that only seemed to further provoke crowds in a week of unrest marking the second anniversary of the uprising that toppled Hosni Mubarak.


The governor of Ismailia, one of the three canal cities, said on Wednesday he was scaling back the curfew, which would now take effect nightly from 2:00 a.m. instead of 9:00 p.m..


Mursi, speaking in Berlin before hurrying home to deal with the crisis, called for dialogue with opponents but would not commit to their demand that he first agree to include them in a unity government.


Asked about that proposal, he said the next government would be formed after parliamentary elections in April.


Egypt was on its way to becoming "a civilian state that is not a military state or a theocratic state", Mursi said.


The violence at home forced Mursi to scale back his European visit, billed as a chance to promote Egypt as a destination for foreign investment. He flew to Berlin but called off a trip to Paris and was due back home after only a few hours in Europe.


Chancellor Angela Merkel, who met him, echoed other Western leaders who have called on him to give his opponents a voice.


"One thing that is important for us is that the line for dialogue is always open to all political forces in Egypt, that the different political forces can make their contribution, that human rights are adhered to in Egypt and that of course religious freedom can be experienced," she said at a joint news conference with Mursi.


SPIRIT OF REVOLUTION


Mursi's critics accuse him of betraying the spirit of the revolution by keeping too much power in his own hands and those of his Muslim Brotherhood, the Islamist movement banned under Mubarak which won repeated elections since the 2011 uprising.


Mursi's supporters say the protesters want to overthrow Egypt's first democratically elected leader. The current unrest has deepened an economic crisis that saw the pound currency tumble in recent weeks.


Near Cairo's Tahrir Square on Wednesday morning, dozens of protesters threw stones at police who fired back teargas, although the scuffles were brief.


"Our demand is simply that Mursi goes, and leaves the country alone. He is just like Mubarak and his crowd who are now in prison," said Ahmed Mustafa, 28, a youth who had goggles on his head to protect his eyes from teargas.


Opposition politician Mohamed ElBaradei called for a meeting of the president, ministers, the ruling party and the opposition to halt the violence. But he also restated the precondition that Mursi first commit to seeking a national unity government.


The worst violence has been in the Suez Canal city of Port Said, where rage was fuelled by death sentences passed against soccer fans for roles in deadly riots last year.


After decades in which the West backed Mubarak's military rule of Egypt, the emergence of an elected Islamist leader in Cairo is probably the single most important change brought about by the wave of Arab revolts over the past two years.


Mursi won backing from the West last year for his role in helping to establish a ceasefire between Israel and Palestinians that ended a conflict in Gaza. But he then followed that with an effort to fast-track a constitution that reignited dissent at home and raised global concern over Egypt's future.


Western countries were alarmed this month by video that emerged showing Mursi making vitriolic remarks against Jews and Zionists in 2010 when he was a senior Brotherhood official.


German Foreign Minister Guido Westerwelle said ahead of Mursi's visit that the remarks, in which Mursi referred to Zionists as "descendants of apes and pigs" were "unacceptable".


"NOT AGAINST JEWS"


Asked about those remarks at the news conference with Merkel, Mursi repeated earlier explanations that they had been taken out of context.


"I am not against the Jewish faith," he said. "I was talking about the practices and behavior of believers of any religion who shed blood or who attack innocent people or civilians. That's behavior that I condemn."


"I am a Muslim. I'm a believer and my religion obliges me to believe in all prophets, to respect all religions and to respect the right of people to their own faith," he added.


Egypt's main liberal and secularist bloc, the National Salvation Front, has so far refused talks with Mursi unless he promises a unity government including opposition figures.


"Stopping the violence is the priority, and starting a serious dialogue requires committing to guarantees demanded by the National Salvation Front, at the forefront of which are a national salvation government and a committee to amend the constitution," ElBaradei said on Twitter.


Those calls have also been backed by the hardline Islamist Nour party - rivals of Mursi's Brotherhood. Nour and the Front were due to meet on Wednesday, signaling an unlikely alliance of Mursi's critics from opposite ends of the political spectrum.


Brotherhood leader Mohamed El-Beltagy dismissed the unity government proposal as a ploy for the Front to take power despite having lost elections. On his Facebook page he ridiculed "the leaders of the Salvation Front, who seem to know more about the people's interests than the people themselves".


In a sign of the toll the unrest is having on Egypt's economy, ratings agency Fitch downgraded its sovereign rating by one notch to B on Wednesday.


German industry leaders see potential in Egypt but are concerned about political instability.


"At the moment many firms are waiting on political developments and are cautious on any big investments," said Hans Heinrich Driftmann, head of Germany's Chamber of Industry and Commerce.


(Additional reporting by Yasmine Saleh and Marwa Awad in Cairo, Stephen Brown and Gernot Heller in Berlin and Arshad Mohammed in Washington; Writing by Peter Graff; Editing by Peter Millership)



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Army warns unrest pushing Egypt to the brink


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


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


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


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


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


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


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


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


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


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


DEEPLY POLARISED


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


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


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


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


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


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


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


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


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


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


WARY MILITARY


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


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


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


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


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


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


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


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


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


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


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


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



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Violence flares in Egypt after emergency law imposed


CAIRO (Reuters) - A man was shot dead on Monday in a fifth day of violence in Egypt that has killed 50 people and prompted the Islamist president to declare a state of emergency in an attempt to end a wave of unrest sweeping the Arab world's biggest nation.


Emergency rule announced by President Mohamed Mursi on Sunday covers the cities of Port Said, Ismailia and Suez. The army has already been deployed in two of those cities and cabinet approved a measure to let soldiers arrest civilians.


A cabinet source told Reuters any trials would be before civilian courts, but the step is likely to anger protesters who accuse Mursi of using high-handed security tactics of the kind they fought against to oust President Hosni Mubarak.


Egypt's politics have become deeply polarized since those heady days two years ago, when protesters were making most of the running in the Arab Spring revolutions that sent shockwaves through the region and Islamists and liberals lined up together.


Although Islamists have won parliamentary and presidential elections, the disparate opposition has since united against Mursi. Late last year he moved to expand his powers and push a constitution with Islamist leanings through a referendum, punctuated by violent street protests.


Mursi's call for a national dialogue meeting on Monday to help end the crisis was spurned by his main opponents.


They accuse Mursi of hijacking the revolution, listening only to his Islamist allies and breaking a promise to be a president for all Egyptians. Islamists say their rivals want to overthrow by undemocratic means Egypt's first freely elected leader.


Anti-Mursi protesters were out on the streets again in Cairo and elsewhere on Monday, the second anniversary of one of the bloodiest days in the revolution that erupted on January 25, 2011, and ended Mubarak's iron rule 18 days later.


CONCERNS


Hundreds of demonstrators in Port Said, Ismailia and Suez, cities which all lie on the economically vital Suez Canal, had turned out against Mursi's decision on Sunday within moments of him speaking. Activists there pledged to defy a curfew that starts at 9 p.m. (1700 GMT).


Instability in Egypt has raised concerns in Western capitals, where officials worry about the direction of a key regional player that has a peace deal with Israel.


The political unrest has been exacerbated by street violence linked to death penalties imposed on soccer supporters convicted of involvement in stadium rioting a year ago.


In Cairo on Monday, police fired volleys of teargas at stone-throwing protesters near Tahrir Square, cauldron of the anti-Mubarak uprising. A 46-year-old bystander was killed by a gunshot, a security source said. It was not clear who opened fire.


"We want to bring down the regime and end the state that is run by the Muslim Brotherhood," said Ibrahim Eissa, a 26-year-old cook, protecting his face from teargas wafting towards him.


Propelled to the presidency in a June election by the Muslim Brotherhood, Mursi has lurched through a series of political crises and violent demonstrations, complicating his task of shoring up the economy and of preparing for a parliamentary election to cement the new democracy in a few months.


"The protection of the nation is the responsibility of everyone. We will confront any threat to its security with force and firmness within the remit of the law," Mursi said, angering many of his opponents when he wagged his finger at the camera.


The president offered condolences to families of victims of violence and also called a dialogue meeting on Monday at 6 p.m. (11 a.m. ET) between Islamist allies and their liberal, leftist and other opponents to discuss the crisis.


The main opposition National Salvation Front coalition rejected the offer as "cosmetic and not substantive" and set several conditions that have not been met in the past, such as forming a national salvation government. They also demanded that Mursi announce his responsibility for the bloodshed.


SECURITY MEASURES


"We will send a message to the Egyptian people and the president of the republic about what we think are the essentials for dialogue. If he agrees to them, we are ready for dialogue," opposition politician Mohamed ElBaradei told a news conference.


The opposition Front has distanced itself from the latest flare-ups but said Mursi should have acted far sooner to impose security measures that would have ended the violence.


"Of course we feel the president is missing the real problem on the ground, which is his own policies," Front spokesman Khaled Dawoud said after Mursi made his declaration.


Other activists said Mursi's measures to try to impose control on the turbulent streets could backfire.


"Martial law, state of emergency and army arrests of civilians are not a solution to the crisis," Ahmed Maher of the April 6 movement that helped galvanize the 2011 uprising said. "All this will do is further provoke the youth. The solution has to be a political one that addresses the roots of the problem."


Thousands of mourners joined funerals in Port Said for the latest victims in the Mediterranean port city. Seven people were killed there on Sunday when residents joined marches to bury 33 others who had been killed a day earlier, most by gunshot wounds in a city where arms are rife.


Protests erupted there on Saturday after a court sentenced to death several people from the city for their role in deadly soccer violence last year, a verdict residents saw as unfair. The anger swiftly turned against Mursi and his government.


Rights activists said Mursi's declaration was a backward step for Egypt, which was under emergency law for Mubarak's entire 30-year rule. His police used the sweeping arrest provisions to muzzle dissent and round up opponents, including members of the Brotherhood and even Mursi himself.


Heba Morayef of Human Rights Watch in Cairo said the police, still hated by many Egyptians for their heavy-handed tactics under Mubarak, would once again have the right to arrest people "purely because they look suspicious", undermining efforts to create a more efficient and respected police force.


"It is a classic knee-jerk reaction to think the emergency law will help bring security," she said. "It gives so much discretion to the Ministry of Interior that it ends up causing more abuse, which in turn causes more anger."


(Additional reporting by Yasmine Saleh in Cairo and Yusri Mohamed in Ismailia; Editing by Giles Elgood and Peter Millership)



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Nightclub fire kills 245 in southern Brazil


PORTO ALEGRE, Brazil (Reuters) - A fire in a nightclub killed at least 245 people in southern Brazil on Sunday when a band's pyrotechnics show set the building ablaze and fleeing patrons were unable to find the emergency exits in the ensuing panic, officials said.


The blaze in the southern city of Santa Maria was started when a band member or someone from its production team ignited a flare, which then set fire to the ceiling, said Luiza Sousa, a civil police official. The fire spread "in seconds," she said.


An estimated 500 people were in the Boate Kiss nightclub when the fire broke out early on Sunday, and many were unable to find the exits as dark smoke quickly filled the room. At least one exit was locked, trapping hundreds inside to die, many from asphyxiation as they inhaled smoke, police said.


"When I looked around, all I saw were dead bodies all around, lying on the floor. It was macabre," survivor Taynne Vendrusculo told GloboNews TV. "It all happened so fast. Both the panic and the fire spread rapidly, in seconds."


Television footage showed people sobbing outside the club, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.


By noon (1400 GMT), the death toll had risen to 245 and 48 people were being treated in local hospitals, said Major Cleberson Bastianello, head of the military police unit leading the rescue efforts. He said all of the bodies of the victims had been removed from the nightclub.


President Dilma Rousseff, who started her political career in the same state where the fire happened, cut short a visit to Chile to return to Brazil to visit the scene. Before departing, Rousseff gave a televised statement in which she broke out in tears as she pledged government help for the victims and their families.


"We are trying to mobilize all possible resources to help in the rescue efforts," she said. "All I can say at the moment is that my feelings are of deep sorrow."


The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.


Brazil's safety standards and emergency response capabilities are under particular scrutiny as it prepares to host the 2014 World Cup soccer tournament and the 2016 Olympics.


The Boate Kiss nightclub was a popular venue in Santa Maria, a university town of more than 275,000 people. The massive nightclub sometimes attracts up to 2,000 people on a given night, according to reviews on the Internet.


One of the club's owners had already surrendered to police in Santa Maria for questioning, GloboNews reported.


Rio Grande do Sul state Health Secretary Ciro Simoni said emergency medical supplies from all over the state were being sent to the scene.


Santa Maria is some 186 miles west of the state capital of Porto Alegre. "A sad Sunday!" tweeted Rio Grande do Sul Governor Tarso Genro. He said "all possible measures" were being taken in response.


(Additional reporting by Guillermo Parra-Bernal, Gustavo Bonato, Leila Coimbra, Todd Benson, Jeferson Ribeiro and Brian Winter; Editing by Todd Benson, Kieran Murray and Eric Beech)



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At least 26 die in Egyptian clashes over death sentences


PORT SAID, Egypt/CAIRO (Reuters) - At least 26 people died on Saturday when Egyptians rampaged in protest at the sentencing of 21 people to death over a soccer stadium disaster, adding to bloody street turmoil confronting Islamist President Mohamed Mursi.


Armored vehicles and military police fanned through the streets of Port Said after the violence. The state news agency quoted a general as saying the military aimed to "establish calm and stability in Port Said and to protect public institutions".


Unrest flared with nationwide rallies on Friday to mark the second anniversary of the overthrow of autocrat Hosni Mubarak, a democratic revolution that protesters now accuse Mursi of betraying by ramming through an Islamist-hued constitution.


While anniversary-related violence subsided, a new outbreak hit Port Said after a court sentenced 21 men to die for involvement in the deaths of 74 people after a local soccer match on February 1, 2012, many of them fans of the visiting team.


Residents ran wildly through the streets of Port Said, outraged that men from their city had been blamed for the stadium disaster, and gunshots were reported near the prison where most of the defendants were being held.


Security sources said 26 people, at least two of them policemen, had been killed in the Mediterranean coastal city. State television reported more than 200 people had been wounded.


Witnesses said some men stormed two police stations in Port Said, where protesters lit tires in the street, sending black smoke funneling into the air.


At least nine people were killed in clashes with police on Friday, mainly in the port of Suez where the army has also deployed. Hundreds were injured as police rained down tear gas on protesters armed with stones and some with petrol bombs.


The schism between Islamists and secular Egyptians is hurting efforts by Mursi, freely elected in June, to revive an economy in crisis - deprived of fresh investment and tourism due to political upheaval - and stem a slide in Egypt's currency.


The political strife and lack of security that has blighted the Arab world's most populous country over much of the post-Mubarak era is casting an ominous shadow over a parliamentary election expected to start in April.


DIVERSITY


Highlighting tensions, the opposition National Salvation Front coalition called for a government of national unity and an early presidential vote among other demands. It said it would call for more protests next Friday and could boycott the parliamentary election if its demands are not met.


Mursi's opponents say he has failed to deliver on economic pledges or be a president representing the full political and communal diversity of Egyptians, as he pledged.


His supporters say his critics do not respect the democracy that has given Egypt its first freely elected leader.


The Muslim Brotherhood, which propelled Mursi to office, said in a statement that "corrupt people" and media who were biased against the president had stirred up anger on the street and incited violence.


At the Port Said soccer stadium a year ago, many spectators were crushed and witnesses saw some thrown off balconies after the match between Cairo's Al Ahly and local team al-Masri.


Families of victims in court cheered and wept for joy when Judge Sobhy Abdel Maguid read a list of 21 names "referred to the Mufti", a phrase used to denote execution, as all death sentences must be reviewed by Egypt's top religious authority.


A total of 73 people have been standing trial. Other rulings will be issued on March 9, the judge said.


One relative in the court shouted: "God is greatest." Outside the Al Ahly club in Cairo, fans also cheered. They had threatened more violence unless the death penalty was meted out.


Thousands took to the streets of Cairo, Alexandria and other cities on Friday to protest against what they call the creeping authoritarianism of Mursi's rule. Protesters in Cairo were again hurling stones at police lines in Cairo on Saturday.


SEEKING CHANGE


"We want to change the president and the government. We are tired of this regime. Nothing has changed," said Mahmoud Suleiman, 22, in Cairo's Tahrir Square, the cauldron of the 2011 anti-Mubarak revolt and near where youths stoned police.


Ahmed Salama, 28, a protester camped out with dozens of others in Tahrir, said: "The protests will continue until we realize all the demands of the revolution - bread, freedom and social justice."


Ismailia and Suez, cities which like Port Said lie on the Suez Canal, witnessed some of the worst violence on Friday. But a canal official said the unrest on Friday and Saturday had not disrupted traffic in the waterway vital to international trade.


In a statement in response to Friday's violence, Mursi said the state would not hesitate in "pursuing the criminals and delivering them to justice". He urged Egyptians to respect the principles of the revolution by expressing views peacefully.


The president met on Saturday with the National Defence Council, which includes senior ministers and security officials, to discuss the spate of violence.


In a televised statement, the National Salvation Front said it was holding Mursi responsible for the disturbances.


The Front was formed from disparate groups last year when Mursi awarded himself extra powers and fast-tracked an Islamist-flavored constitution to a referendum, opposed by the Front although the document was passed in the popular vote.


"Egypt will not regain its balance except by a political solution that is transparent and credible, by a government of national salvation to restore order and heal the economy and with a constitution for all Egyptians," prominent opposition politician Mohamed ElBaradei wrote on his Twitter account.


Until the Front was formed, the opposition had struggled to unite and their vote had been split at presidential and parliamentary polls, helping Islamists. The last parliament was dissolved based on court order, demanding a new vote this year.


Mustapha Kamal Al-Sayyid, a professor of political science at Cairo University, said the latest violence reflected the frustration of many liberal-minded Egyptians and others.


"The state of polarization between Islamists and others is most likely to continue and will have a very negative impact on the state's politics, security and economy," he said.


Inspired by the popular uprising in Tunisia, Egypt's revolution spurred further revolts across the Arab world. But the sense of common purpose among Egyptians two years ago has unraveled, triggering bloody street battles last month.


(Additional reporting by Omar Fahmy; Writing by Edmund Blair; Editing by Mark Heinrich)



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Violence flares on anniversary of Egypt uprising


CAIRO/ALEXANDRIA (Reuters) - Protesters clashed with police across Egypt on Friday on the second anniversary of the revolt that toppled Hosni Mubarak, taking to the streets against an elected Islamist president whose opponents say is trampling over the new democracy.


At least 61 civilians and 32 security personnel were hurt in violence in Cairo, Alexandria and Suez as police fired tear gas and protesters pelted them with stones, the Interior Ministry said.


Street battles also broke out in Ismaila, where the Muslim Brotherhood's political party offices were torched.


Thousands of opponents of Mursi and his Brotherhood allies massed in Cairo's Tahrir Square - the cradle of the uprising against Mubarak - to revive the demands of a revolution they say has been betrayed by Islamists.


The January 25 anniversary showcased the divide between the Islamists and their secular foes that is hindering President Mohamed Mursi's efforts to revive an economy in crisis and reverse a plunge in Egypt's currency by enticing back investors and tourists.


Inspired by Tunisia's popular uprising, Egypt's revolution spurred further revolts across the Arab world. But the sense of common purpose that united Egyptians two years ago has given way to internal strife that has only worsened and last month triggered lethal street battles.


Before dawn on Friday, police battled protesters who threw petrol bombs and firecrackers as they tried to approach a wall blocking access to government buildings near Tahrir Square.


Clouds of tear gas fired by police filled the air. At one point, riot police used one of the incendiaries thrown at them to set ablaze at least two tents erected by the youths, a Reuters witness said.


Clashes between stone-throwing youths and the police continued in streets around the square into the day. Ambulances ferried away a steady stream of casualties.


"Our revolution is continuing. We reject the domination of any party over this state. We say no to the Brotherhood state," Hamdeen Sabahy, a popular leftist leader, told Reuters.


There were similar scenes in Suez and Alexandria, where protesters and riot police skirmished near local government offices. Tear gas fouled the air and black smoke billowed from tyres set ablaze by youths.


Some protesters pledged to march to Mursi's Cairo palace.


The anniversary brought thousands of Mursi's opponents into the streets of other cities, including Port Said at the northern mouth of the Suez Canal and al-Mahalla al-Kubra in the Nile Delta.


The Brotherhood decided against mobilizing for the anniversary, wary of the scope for more conflict after violence in December that was stoked by Mursi's decision to fast-track an Islamist-tinged constitution rejected by his opponents.


"The Brotherhood is very concerned about escalation, that's why they have tried to dial down their role on January 25," said Shadi Hamid, director of research at the Brookings Doha Center.


"It's definitely tense on the ground, but so far there hasn't been anything out of the ordinary or anything that really threatens to fundamentally alter the political situation."


In Tahrir Square, protesters echoed the chants of 2011's historic 18-day uprising. "The people want to bring down the regime," they chanted. "Leave! Leave! Leave!" chanted others as they marched towards the square.


"We are not here to celebrate but to force those in power to submit to the will of the people. Egypt now must never be like Egypt during Mubarak's rule," said Mohamed Fahmy, an activist.


BADIE CALLS FOR "PRACTICAL, SERIOUS COMPETITION"


With its eye firmly on forthcoming parliamentary elections, the Brotherhood marked the anniversary with a charity drive across the nation. It plans to deliver medical aid to one million people and distribute affordable basic foodstuffs.


Writing in Al-Ahram, Egypt's flagship state-run daily, Brotherhood leader Mohamed Badie said the country was in need of "practical, serious competition" to reform the corrupt state left by the Mubarak era.


"The differences of opinion and vision that Egypt is passing through is a characteristic at the core of transitions from dictatorship to democracy, and clearly expresses the variety of Egyptian culture," he wrote.


Still, Mursi faces discontent on multiple fronts.


His opponents say he and his group are seeking to dominate the post-Mubarak order. They accuse him of showing some of the autocratic impulses of the deposed leader by, for example, driving through the new constitution last month.


"I am taking part in today's marches to reject the warped constitution, the 'Brotherhoodisation' of the state, the attack on the rule of law, and the disregard of the president and his government for the demands for social justice," Amr Hamzawy, a prominent liberal politician, wrote on his Twitter feed.


The Brotherhood dismisses many of the criticisms as unfair fabrications of their rivals, accusing them of failing to respect the rules of the new democracy that put the Islamists in the driving seat by winning free elections.


Six months into office, Mursi is also being held responsible for an economic crisis caused by two years of turmoil. The Egyptian pound has sunk to record lows against the dollar.


SOURCES OF FRICTION ABOUND


Other sources of friction abound. Little has been done to reform brutal Mubarak-era security agencies. A spate of transport disasters on roads and railways neglected for years is feeding discontent as well. Activists are impatient for justice for the victims of violence over the last two years.


These include hardcore soccer fans, or ultras, who have been rallying in recent days to press for justice for 74 people killed in a soccer stadium disaster a year ago in Port Said after a match between local side al-Masry and Cairo's Al Ahly.


The parties that called for Friday's protests listed demands including a complete overhaul of the constitution.


Critics say the constitution, which was approved in a referendum, offers inadequate protection for human rights, grants the president too many privileges and fails to curb the power of a military establishment supreme in the Mubarak era.


Mursi's supporters say that enacting the constitution quickly was crucial to restoring stability desperately needed for economic recovery, and that the opposition is making the situation worse by perpetuating unrest.


(Additional reporting by Ashraf Fahim, Tom Perry, Marwa Awad and Shaimaa Fayed in Cairo and Yousri Mohamed in Ismailia; Writing by Tom Perry; Editing by Angus MacSwan)



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