Thai banker Prasarn to be next c.bank governor

July 6 (Reuters) – Kasikornbank (KBAN.BK) President Prasarn Trairatvorakul will be the next governor of the Bank of Thailand, a minister said after a cabinet meeting on Tuesday.

Current Governor Tarisa Watanagase retires at the end of September. Prasarn emerged as the leading candidate to replace her last month.

Information and Communication Technology Minister Juti Krairerk gave the name to reporters. (Reporting by Pracha Hariraksapitak; Writing by Orathai Sriring; Editing by Alan Raybould)

Greek pension reform to be fair, viable – PM

June 25 (Reuters) – Greece’s pension reform will be fair and is needed to make the system viable, Prime Minister George Papandreou told parliament ahead of a cabinet meeting meant to agree a pension reform plan.

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“Today we want to succeed on two fronts, to have a pension system that is viable … and fair,” the Prime Minister said on Friday.

Opinion polls show a very large majority of Greeks oppose the pension reform and unions will stage a general 24-hour strike on June 29.

The cabinet meeting is meant to agree on a major overhaul of the debt-choked country’s ailing pension system and to ease labour rules to make it easier to fire staff, key requirements of a 110-billion euro EU/IMF bailout programme. (Reporting by Tatiana Fragou and Ingrid Melander)

Key party attacks draft Spanish labor reform

(Reuters) – Spain’s biggest regional political party, the CiU, on Sunday criticized the government’s draft proposal for labor reform as a “slapdash job” and said it would not support it in its current form.

The government had rushed to draw up its own proposal on Friday after three-way talks with unions and business failed and the draft is unclear on matters like the procedure for firing, CiU spokesman Josep Antoni Duran Lleida told SER radio.

“(We say) no to this labor reform it’s a slapdash job,” Lleida, of the Catalan nationalist party (CiU), said.

Economists see the reform of Spain’s inflexible labor laws as vital to restore Spain’s competitiveness, return the economy to strong growth and prevent a Greek-style debt crisis.

The Catalan nationalist party is an important ally for the Socialist government if it hopes to pass the reform through a parliamentary vote on June 22. The party’s 10 votes would be enough to give the government the majority it needs.

Without them the government, trailing in opinion polls, will have to seek support from several other parties. The reform is due to be approved at a cabinet meeting on Wednesday.

The CiU abstained from a parliamentary vote on austerity measures last month, allowing the government to push through the plan by a single vote.

After European countries were forced to come to the rescue of Greece last month, financial markets have fretted that other ailing euro zone economies like Spain and Portugal could suffer similar debt crises.

Prime Minister Jose Luis Rodriguez Zapatero on Saturday said the draft package would help generate jobs and boost confidence in the Spanish economy, although the business organization CEOE slammed the proposal saying it would increase employer costs.

Unions have criticized the draft reforms, saying they cater to business rather than workers. They have threatened a general strike if the measures are passed in a parliamentary vote.

Minority unions in the northern industrial regions of the Basque Country and Navarra said on Saturday they would call a general strike on June 29 there in protest at the reform.

Spain’s 20 percent unemployment, the highest in the euro zone, has crimped economic activity, making Spain struggle to emerge from its worst recession in half a century.

The austerity plan would affect economic growth, Economy Minister Elena Salgado said in an interview published in El Pais newspaper on Sunday. It was unlikely there would be net growth in employment in 2010, she said, with job growth more likely to start next year.

The great census divide

The Nationalist Congress Party is not in favour of a caste-based census, but has not made it an issue as it finds Big Brother Congress suddenly more accommodating towards the Yadav triumvirate — Sharad, Mulayam and Lalu — than its partners in the UPA. At the Cabinet meeting last week, senior NCP leader and Civil Aviation Minister Praful Patel took the middle path, pointing out that the matter has reached such a point that the government would be criticised either way. The NCP camp is dismayed at the haste with which the Congress brought the onus on the government by promising to bring the issue in the Cabinet.

The Cabinet meeting witnessed some spirited opposition with Minister of Youth Affairs & Sports M S Gill leading from the front and terming it as a retrogressive step. Human Resource Development Minister Kapil Sibal wanted the government to take a “rationalist” approach.

The biggest surprise, however, was Steel Minister Virbhadra Singh’s support for a caste census. He said that by promising to bring the issue in the Cabinet, the government had already committed itself to the cause

Maya shelves memorial force bill, hands over security to home guards

Lucknow, May 28 — With the Governor BL Joshi holding the controversial State Special Zone Security Force Bill, 2010 and subsequent Ordinance for the protection of parks and memorials, the state Cabinet on Friday decided to withdraw both legislations. The government had planned to establish security force with special powers for the protection of these sites.

Shelving the Bill and Ordinance the Cabinet meeting chaired by Chief Minister Mayawati here on Friday decided to hand over the security of all 12 parks and memorials in Lucknow and Noida to armed home guards. The Cabinet had approved proposal for establishment of special zone security force for this purpose.

In January last the BSP government had passed the Bill and later it was sent to the Governor. However in view of sweeping powers to the proposed force the Governor had sought legal opinion.

Late with some amendments the government also promulgated an ordinance on the issue but it could not cut much ice with the Governor. The government without waiting for gubernatorial approval decided to set up the force by inducting retired army personnel.

The government today said that during recruitment of army personnel it was noticed that women were not available for the security purpose. The government said presence of women in this force was necessary.

The induction of ex-army man in the force without women was not found feasible. The Cabinet thus withdrew the plan today.

In view of availability of women home guards the Cabinet has now approved the establishment a force consisting of Home guards. The Cabinet also noted that recruitment and training under the Bill and ordinance was long drawn process whereas Home guards were easily available and they could be quickly trained for this specific purpose.

Thai govt approves relief measures after unrest

Thailand’s cabinet has approved a relief plan, including soft loans and grants, to help businesses and people affected by recent political unrest, Finance Minister Korn Chatikavanij said on Tuesday.

Loans totalling 5 billion baht ($154 million) will be extended to small and medium-sized businesses in Bangkok, Korn told reporters after a weekly cabinet meeting.

They will be offered at low interest rates of 2-3 percent per year over six years with a grace period of two years.

The “red shirt” anti-government protests were broken up by the military on May 19, sparking riots and arson that destroyed part of the country’s biggest shopping mall and closed down banks for two days.

Korn said small businesses that had suffered from arson would each receive a 50,000 baht ($1,543) grant from the government.

The government would offer a 7,500 baht grant to employees and street vendors who had lost income, Korn said.

Affected companies that had retained staff and kept paying them would also receive help, Korn said, adding details on all the measures would be decided later.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Alan Raybould)

Modern woman hit by burqa ban

The ban on burqa in France may not have pleased the Islamists, but it has also not been welcomed by modern Muslim women.

One runs her own company, another is a housewife and a third, a divorcee, raises her children by herself. Like nearly 2,000 other Muslim women who freely wear face-covering veils anywhere in France, their lives will soon change and they are worried.

French Justice Minister Michele Alliot-Marie today presented a draft law to the Cabinet banning Muslim veils that cover the face, the first formal step in a process to forbid such attire in all public places in France. It calls for USD 185 fines and, in some cases, citizenship classes for women who run afoul of the law.

The measure notably creates a new offence, “inciting to hide the face,” and anyone convicted of forcing a woman to wear such a veil risks a year in prison and a USD 18,555 fine, according to a copy of the text.

“Citizenship should be experienced with an uncovered face,” President Nicolas Sarkozy told the Cabinet meeting, in remarks released by his office. “There can be no other solution but a ban in all public places.”

Although the Interior Ministry estimates there are only 1,900 women in France who cover their faces with veils, the planned law would be another defining moment for Islam here as the nation tries to bring its Muslim population, at least 5 million, the largest in western Europe into the mainstream, even by force of law.

The bill is to go before parliament in July, and despite the acrimonious debate that is sure to come, there is little doubt the measure will become law. Sarkozy, who says such veils oppress women, wants a law banning them on the books as soon as possible.

“If the law is voted, I won’t take off my veil. … No one will dictate my way of life” but God, said Najat, a divorcee, who gave her age as “45 plus.” She was one of a half-dozen women who, in a rare move, met with reporters yesterday to express their worries about changes they say will impact their lives to the core.

Like others, she refused to give her full name. All said they fear for their safety in an increasingly tense climate.

Najat was among those who said she has been increasingly harassed since debate over the planned law began nearly a year ago.

Amnesty International urged French lawmakers to reject the bill. The London-based organisation said its expert on discrimination in Europe, John Dalhuisen, believes a complete ban would violate rights to freedom of expression and religion for women who wear the face veils “as an expression of their identity or beliefs.”

A French anti-racism group, MRAP, which opposes such dress, said a law would be “useless and dangerous.”

Belgian PM to tender resignation to king – minister

Belgian Prime Minister Yves Leterme has gone to King Albert to tender his government’s resignation, a minister said after an emergency cabinet meeting on Thursday.

Health Minister Laurette Onkelinx told reporters Leterme had had no other choice but to quit after the Flemish liberal party withdrew its support for the five-party coalition.

(Reporting by Antonia van de Velde, writing by Philip Blenkinsop, editing by Timothy Heritage)

Reds enter Thai parliament, House adjourned

Bangkok, Apr.7 (ANI): Red-shirt supporters of the anti-government United Front for Democracy against Dictatorship (UDD) entered the parliament compound on Wednesday afternoon to press Prime Minister Abhisit Vejjajiva to dissolve the House of Representatives and call a general election.

Over 1,000 protesters led by core member Arisman Pongruangrong broke into the parliament compound after another red-shirt group led by co-leaders Payap Panket and Suporn Attawong began withdrawing from the area to guard the pro-UDD satellite-based People Channel on Lat Phrao road, the Bangkok Post reported.

A group of protesters converged on Imperial World shopping mall on Lat Phrao road to prevent the People Channel from being shut down by the government.

Parliament President Chai Chidchob adjourned the parliament after the protesters surrounded the parliament compound on Wednesday morning.

The red-shirts moved to the parliament compound from their rally site near Phan Fa bridge after receiving reports that Prime Minister Abhisit and his deputy overseeing security Suthep Thaugsuban would hold the weekly cabinet meeting there.adders were prepared for MPs to escape from the other side of the parliament, while security officials asked the protesters to make way for the lawmakers to leave.

Comedian and UDD key supporter Jeng Dogjik urged the protesters not to let Democrat Party MPs leave the parliament.

There were about 200 government and opposition MPS inside the parliament building, including Deputy Prime Minister Suthep and Prime Minister’s Office Minister Sathit Wongnongtoey. (ANI)

Thai PM declares state of emergency

Thailand’s embattled premier declared a state of emergency in Bangkok after protesters stormed parliament in a dramatic escalation of their bid to topple the government.

MPs fled and several senior government figures were airlifted by military helicopter after red-shirted supporters of ousted premier Thaksin Shinawatra forced their way into the country’s parliamentary compound.

In an effort to contain the crisis, prime minister Abhisit Vejjajiva invoked emergency rule, which bans public gatherings of more than five people and gives broad powers to the police and military.

“The state of emergency aims to resolve the situation and bring a return to normal,” Mr Abhisit told a nationally televised press conference.

He said the mass rallies were unconstitutional and had tarnished the country’s image, eroding investor confidence.

It is the fourth time since 2008 that emergency law has been declared in the capital because of political turmoil.

Mr Abhisit left a cabinet meeting at parliament when he learnt that the Reds were approaching, moving to a military barracks in the city’s northern outskirts, where he has mostly been based since the protests began mid-March.

Tens of thousands of anti-government protesters have refused to leave Bangkok’s main commercial district, where they have been since Saturday, disrupting traffic and causing major shopping centres to shut.

The red-clad movement remained defiant, vowing to keep up their action.

“I gamble my life with this dictator government,” said Reds leader Jatuporn Prompan.

The Reds, mostly from Thailand’s rural poor and working class, say the government is illegitimate because it came to power with army backing through a parliamentary vote in December 2008 after a court ousted Thaksin’s allies.

Mr Abhisit cancelled a planned trip to the United States for a nuclear security summit next week due to the unrest.

The Reds have been emboldened after the police and army backed down on Tuesday following a tense standoff in the capital’s tourist heartland.

The authorities have threatened the protesters with a year in jail, but so far no arrests have been made. Security forces have refrained from using force to disperse the tens of thousands of protesters, who have been roaming the capital.

The government said it would act if needed to end the protests, but reiterated that it wanted a peaceful resolution to the standoff.

The followers of Thaksin – a billionaire telecoms tycoon who lives abroad to avoid a jail term for corruption – fervently support the populist policies he introduced before his ouster in a 2006 coup.

Thaksin sought to rally his supporters on Wednesday in a brief message through the micro-blogging service Twitter, praising their “courage, patience and unity.”

On Tuesday, protesters threw plastic bottles, pushed against police barricades and later took over the streets of central Bangkok on motorcycles and in pick-up trucks, pouring into the capital’s financial district.

The military has mounted a heavy security response, deploying 50,000 personnel at one point to try to contain the protests, which drew as many as 100,000 people on the first day on March 14.

But the government wants to avoid a repeat of last April’s clashes with Red Shirts that left two people dead, six months after riot police took on the rival Yellow Shirts in bloody scenes outside parliament.

In the latest unexplained blast since the rallies began, police said a grenade exploded shortly after midnight next to a supermarket in Bangkok, injuring one man.

Protesters storm Thai parliament

Hundreds of protesters have stormed the grounds of Thailand’s parliament, forcing government ministers to flee by helicopter and raising pressure in a four-week street rally seeking snap elections.

The red-shirted supporters of ousted premier Thaksin Shinawatra later retreated, but tens of thousands remain in Bangkok’s main shopping district, refusing orders to leave until prime minister Abhisit Vejjajiva dissolves parliament.

The scene outside parliament was among the most chaotic and confrontational since the sporadic protests began on March 12.

Protesters massing outside gates of the sprawling complex pressed up against a line of police in full riot gear.

When some “red shirts” forced open the iron gate, police melted away and hundreds of protesters swarmed onto the grounds, including dozens packed on the back of a truck that drove into the main entrance.

They pressed up against security forces outside the lobby doors but left after about 20 minutes only to gather again outside the gates, brandishing guns and tear-gas canisters they said were seized in a scuffle with military police.

Ministers had held a cabinet meeting inside the building earlier but some had left before the protesters broke through.

Deputy Prime Minister Suthep Thaugsuban and several other ministers escaped by helicopter.

“Many of us climbed over a parliament wall to an adjacent compound where a government helicopter waited to take us away,” Satit Wongnongtoey, a minister attached to the prime minister’s office, said on television.

Mr Abhisit is facing pressure from Bangkok’s elite and middle class and even his own government to halt the rally, but has held back to avert a confrontation many believe would cause even greater damage.

Threats to arrest the protesters have not been carried out, emboldening the movement.

The red shirts have taken aim at the urbane, Oxford- and Eton-educated economist, whom they see as a front man for an unelected elite and military that is secretly intervening in politics and operating with impunity.

They say Mr Abhisit, who came to power in a 2008 parliamentary vote after courts dissolved a pro-Thaksin ruling party, should call an election and let the people choose their government.

Red-shirt leaders say they will respect the result.

Israel’s Netanyahu vows response to Gaza attacks

Prime Minister Benjamin Netanyahu warned militants on Sunday that Israel would respond to any attacks from the Gaza Strip that harmed Israelis, making the pledge after clashes along the Hamas-run enclave’s border.

“Israel’s response policy is decisive and firm. It provides a firm answer to any harm caused to our citizens and soldiers. This policy is known and will continue,” Netanyahu told reporters at the start of the weekly cabinet meeting.

“Hamas and the other terror groups should know that they are responsible for their deeds,” he said.

Two Israeli soldiers and two Palestinian militants were killed on Friday in the most deadly clash on the Israel-Gaza frontier since Israel ended an offensive there 14 months ago.

The Israeli army said an officer and a conscript were killed in an ambush by Palestinian gunmen against a military patrol.

The incident was followed by an Israeli army incursion into Khan Younis in the central Gaza Strip. The troops returned to Israeli territory on Saturday, and the violence subsided.

Israel unilaterally withdrew from the Gaza Strip in 2005 but has maintained a blockade of its border with the territory since Hamas took over the enclave in 2007.

Hamas has largely held its fire since a three-week war with Israel in the opening days of 2009 in which some 1,400 Palestinians, mainly civilians, and 13 Israelis, mostly soldiers, were killed.

But smaller factions have violated the de facto truce by firing rockets and mortar bombs into neighbouring Israeli territory.

Tensions have run high along the Gaza frontier this month, with Israel launching repeated air strikes in response to Palestinian rocket attacks, one of which killed a Thai worker in a kibbutz last week.

(Writing by Joseph Nasr)

Israel’s Netanyahu rejects “Obama disaster” headline

Prime Minister Benjamin Netanyahu rejected on Sunday a description of President Barack Obama as Israel’s “greatest disaster”, a phrase a best-selling newspaper attributed to an anonymous confidant of the premier.

Both leaders are locked in a deep disagreement over Israeli settlement in occupied territory in and near Jerusalem. Analysts have described as a humiliating snub Obama’s low-profile White House talks with Netanyahu on Tuesday.

In a banner headline, Israel’s Yedioth Ahronoth, quoted an unidentified Netanyahu confidant as saying: “We’ve got a real problem. You could say that Obama is the greatest disaster for Israel — a strategic disaster.”

A statement issued by Netanyahu’s office said: “The prime minister emphatically rejects the anonymous quotes about President Obama that a newspaper attributed to one of his confidants, and he condemns them.”

Netanyahu was at pains to hammer home the message, telling reporters at the start of the weekly cabinet meeting: “I have heard over recent days anonymous and improper remarks in the media about the U.S. administration and American president.”

“I want to say clearly, these comments are unacceptable to me. They do not come from anyone representing me. The relations between Israel and the United States are those of allies and friends, and are based on tradition spanning many years.”

Netanyahu gave no indication in his public remarks at the session that he intended to curb settlement in East Jerusalem, an issue that has angered Palestinians and delayed the start of indirect, U.S.-mediated peace talks.

But the statement — distributed to correspondents by text message, and followed by two telephone calls from a Netanyahu spokesman to check it was being published — appeared to signal the Israeli leader’s wish not to worsen tensions with Obama.

The Obama-Netanyahu meeting at the White House was held without the usual trappings of an on-camera handshake or a joint statement.

“There were areas in which there was swift agreement,” Netanyahu told the cabinet about the talks.

“In areas where there was disagreement, we tried to take, and we did take, certain steps to narrow the gaps in order to move the (peace) process forward,” he said, without elaborating.

U.S. PRESSURE

Resisting U.S. pressure, Netanyahu has said Israel would not stop building in West Bank territory it annexed to East Jerusalem after capturing the two areas in a 1967 war.

Netanyahu has vowed to find a way out of the faceoff, but a Friday meeting of senior cabinet members to discuss measures that might persuade the Palestinians to resume peace talks adjourned without any breakthrough.

“I think we will continue these efforts. We are continuing them today and in the coming days,” Netanyahu said at the cabinet meeting.

Netanyahu’s government is dominated by pro-settler parties, including his own, and meeting any U.S. demands on settlements — after a 10-month partial construction freeze he announced in November — could endanger his coalition.

Citing historical and Biblical links, Israel considers all of Jerusalem its capital, a claim that is not recognised internationally. Palestinians want East Jerusalem as the capital of a state they seek in the West Bank and Gaza Strip.

(Additional reporting by Joseph Nasr)

Israel’s Netanyahu vows response to Gaza attacks

(Reuters) – Prime Minister Benjamin Netanyahu warned militants on Sunday that Israel would respond to any attacks from the Gaza Strip that harmed Israelis, making the pledge after clashes along the Hamas-run enclave’s border.

World

“Israel’s response policy is decisive and firm. It provides a firm answer to any harm caused to our citizens and soldiers. This policy is known and will continue,” Netanyahu told reporters at the start of the weekly cabinet meeting.

“Hamas and the other terror groups should know that they are responsible for their deeds,” he said.

Two Israeli soldiers and two Palestinian militants were killed on Friday in the most deadly clash on the Israel-Gaza frontier since Israel ended an offensive there 14 months ago.

The Israeli army said an officer and a conscript were killed in an ambush by Palestinian gunmen against a military patrol.

The incident was followed by an Israeli army incursion into Khan Younis in the central Gaza Strip. The troops returned to Israeli territory on Saturday, and the violence subsided.

Israel unilaterally withdrew from the Gaza Strip in 2005 but has maintained a blockade of its border with the territory since Hamas took over the enclave in 2007.

Hamas has largely held its fire since a three-week war with Israel in the opening days of 2009 in which some 1,400 Palestinians, mainly civilians, and 13 Israelis, mostly soldiers, were killed.

But smaller factions have violated the de facto truce by firing rockets and mortar bombs into neighboring Israeli territory.

Tensions have run high along the Gaza frontier this month, with Israel launching repeated air strikes in response to Palestinian rocket attacks, one of which killed a Thai worker in a kibbutz last week.

(Writing by Joseph Nasr)

Israel’s Netanyahu rejects “Obama disaster” headline

(Reuters) – Prime Minister Benjamin Netanyahu rejected on Sunday a description of President Barack Obama as Israel’s “greatest disaster,” a phrase a best-selling newspaper attributed to an anonymous confidant of the premier.

World

Both leaders are locked in a deep disagreement over Israeli settlement in occupied territory in and near Jerusalem. Analysts have described as a humiliating snub Obama’s low-profile White House talks with Netanyahu on Tuesday.

In a banner headline, Israel’s Yedioth Ahronoth, quoted an unidentified Netanyahu confidant as saying: “We’ve got a real problem. You could say that Obama is the greatest disaster for Israel — a strategic disaster.”

A statement issued by Netanyahu’s office said: “The prime minister emphatically rejects the anonymous quotes about President Obama that a newspaper attributed to one of his confidants, and he condemns them.”

Netanyahu was at pains to hammer home the message, telling reporters at the start of the weekly cabinet meeting: “I have heard over recent days anonymous and improper remarks in the media about the U.S. administration and American president.”

“I want to say clearly, these comments are unacceptable to me. They do not come from anyone representing me. The relations between Israel and the United States are those of allies and friends, and are based on tradition spanning many years.”

Netanyahu gave no indication in his public remarks at the session that he intended to curb settlement in East Jerusalem, an issue that has angered Palestinians and delayed the start of indirect, U.S.-mediated peace talks.

But the statement — distributed to correspondents by text message, and followed by two telephone calls from a Netanyahu spokesman to check it was being published — appeared to signal the Israeli leader’s wish not to worsen tensions with Obama.

The Obama-Netanyahu meeting at the White House was held without the usual trappings of an on-camera handshake or a joint statement.

“There were areas in which there was swift agreement,” Netanyahu told the cabinet about the talks.

“In areas where there was disagreement, we tried to take, and we did take, certain steps to narrow the gaps in order to move the (peace) process forward,” he said, without elaborating.

U.S. PRESSURE

Resisting U.S. pressure, Netanyahu has said Israel would not stop building in West Bank territory it annexed to East Jerusalem after capturing the two areas in a 1967 war.

Netanyahu has vowed to find a way out of the faceoff, but a Friday meeting of senior cabinet members to discuss measures that might persuade the Palestinians to resume peace talks adjourned without any breakthrough.

“I think we will continue these efforts. We are continuing them today and in the coming days,” Netanyahu said at the cabinet meeting.

Netanyahu’s government is dominated by pro-settler parties, including his own, and meeting any U.S. demands on settlements — after a 10-month partial construction freeze he announced in November — could endanger his coalition.

Citing historical and Biblical links, Israel considers all of Jerusalem its capital, a claim that is not recognized internationally. Palestinians want East Jerusalem as the capital of a state they seek in the West Bank and Gaza Strip.

(Additional reporting by Joseph Nasr)

Israel says it will still build in Jerusalem

Israel insisted on Friday it would not change its policy of building homes in East Jerusalem, but vowed to seek agreement with the Obama administration on how to renew stalled peace talks with Palestinians.

The statement on Jerusalem came as Prime Minister Benjamin Netanyahu convened senior cabinet ministers to consider confidence-building steps for reviving negotiations, as proposed by U.S. officials while Netanyahu was in Washington this week.

“Israeli construction policy in Jerusalem has remained the same for 42 years and isn’t changing,” a written statement from Netanyahu’s spokesman, Nir Hefez, said, suggesting Israeli cabinet ministers would not budge on that particular policy.

This month’s diplomatic impasse drew a surge of rocket and mortar attacks from the Hamas-controlled Gaza Strip, which Israel answered with airstrikes.

Israeli tanks advanced into Gaza on Friday after the worst clash with Palestinian fighters in 14 months killed two on each side, and Palestinians reported new casualties in the fighting.

The Obama administration has been pressing Israel to halt settlement construction in East Jerusalem, an issue that created new friction this month when a plan to build 1,600 more housing units was published while Vice President Joe Biden was visiting.

Sparring over settlements risks jeopardising Israel’s vital ties with the United States, its biggest ally. Yet Netanyahu has to balance these concerns with the possibility his pro-settler coalition may fall apart should he bow to U.S. demands.

Friday’s cabinet meeting adjourned without decisions.

“The prime minister set further discussion in the forum for the coming days, as well as continued contacts with the U.S. administration in order to reach an agreed path for getting the diplomatic process moving,” Hefez said.

Israel captured East Jerusalem in a 1967 war, and annexed it as part of its capital in a move not recognised internationally. Palestinians want East Jerusalem as capital of a future state in the occupied West Bank and Gaza Strip.

GAZA THREAT

Palestinian President Mahmoud Abbas also insists settlement must cease totally for peace talks stalled since December 2008 to resume. He faces domestic opposition to diplomacy from the Hamas Islamists who control Gaza and spurn the Jewish state.

The Gaza front saw its worst violence on Friday since the 2008/2009 war as Hamas members and other Palestinians attacked Israeli troops who crossed the border to dismantle a mine. Two soldiers and two gunmen died. Israel threatened to punish Hamas.

Palestinian sources said five Israeli tanks and two armoured bulldozers advanced into the Gaza Strip, firing, towards the town of Khan Younis in the centre of the narrow coastal enclave.

The Gaza-base militant group Popular Resistance Committees said one of its fighters was critically wounded by tank shelling east of the town. Palestinian sources reported Israeli helicopters and unmanned military drones in the skies.

“We have been used to seeing breakaway (Palestinian) groups doing the firing, and Hamas trying to calm things down. Possibly it is loosening its grip, for all sorts of reasons,” Israeli Defence Minister Ehud Barak told Channel Two television.

“Should that indeed prove to be the case, then there will also be ramifications for Hamas,” he said, without elaborating.

“We have no interest in returning the region to what was in the past, but we have no intention of forsaking our duty to protect the communities outside Gaza.”

The West has long objected to Israeli construction of Jewish settlements in land Palestinians seek for a state, and the issue again dogged Netanyahu’s talks with President Barack Obama on Wednesday as they sought a way to renew Middle East diplomacy.

Hefez said Netanyahu and Obama had reached a “list of understandings” in the talks on Wednesday, although some disagreements remained.

He said they had an understanding “based on the principle that on the one hand construction policy in Jerusalem doesn’t change, and on the other, Israel is ready to take steps to move the diplomatic process”.

Later Hefez clarified that he had not meant to say Washington had agreed to Israel building in East Jerusalem, but to stress Israel’s own policy on the issue.

In a statement to Reuters, Hefez said what he had told the radio “was related only to Israel’s position and did not relate at all to the American position”.

(Writing by Allyn Fisher-Ilan and Dan Williams; editing by Diana Abdallah)

Netanyahu aide sees accord with U.S. on Jerusalem

Israeli Prime Minister Benjamin Netanyahu has secured U.S. agreement to continue building in Jerusalem, despite other points of disagreement on how to renew stalled peace talks, an Israeli spokesman said on Friday.

Netanyahu’s spokesman Nir Hefez told Army radio the day after their return from a troubled U.S. visit that Netanyahu had reached a “list of understandings” on policy toward Palestinians with President Barack Obama in their talks in Washington.

But “there were additional points still in disagreement between the sides”, Hefez added, speaking before an Israeli inner cabinet meeting later on Friday to debate making gestures to Palestinians to revive negotiations.

Palestinians have demanded a complete Israeli settlement freeze in occupied land including East Jerusalem and the West Bank. Israel sees all of Jerusalem as its capital, a claim that is not recognised internationally.

The Obama administration had also objected to Israel’s latest settlement plans for East Jerusalem, including a blueprint for 1,600 housing units published while Vice President Joe Biden was visiting, igniting new controversy this month.

Hefez said that despite these differences, Obama and Netanyahu had agreed in 90 minutes of talks in Washington on Wednesday that Israeli “construction policy in Jerusalem doesn’t change.”

Netanyahu left Washington after a three-day visit on Thursday, “with a list of understandings and additional points that are still in disagreement between the sides regarding how to renew the talks with the Palestinians,” Hefez said.

Hefez’s comments seemed to conflict with indications from U.S. officials they had sought to coax Israel into suspending further East Jerusalem projects and discussing core issues such as borders and the status of Jerusalem in indirect talks Washington seeks with Israel and the Palestinians.

Obama’s spokesman Robert Gibbs said he had asked Netanyahu to take steps to build confidence for proximity talks so that progress can be made toward comprehensive peace.

“I think we’re making progress on important issues. But nothing more on substance to report than that,” Gibbs said on Thursday.

Gibbs also said U.S. officials wanted clarification about any further building in Jerusalem, after a city official on Wednesday said final approval had been given to develop a neighbourhood from which Palestinians were evicted last year.

Palestinians said they had no indication of any agreement reached in Obama’s talks with Netanyahu about renewing negotiations.

Centre announces eight percent increase in DA for Central Govt employees

New Delhi, Mar 19 (ANI): The Congress-led United Progressive Alliance (UPA) Government on Friday announced an eight percent Dearness Allowance (DA) increase for the Central Government employees.

The DA increase has been announced to compensate for the price rise and it will be applicable from January 1, 2010.

This decision was taken in a Cabinet meeting presided over by Prime Minister Dr Manmohan Singh.

Dearness allowance (DA) is part of a person”s salary. DA is calculated as a percentage of the basic salary. This amount is then added to the basic salary along with house rent allowance to get the total salary.

Dearness Allowance is calculated on the original pension without commutation.

During the reemployment under Central or State Government, Government undertaking, Autonomous body or Local Body, they are not eligible to draw DA, in which case DA is allowed in addition to fixed pay or time scale.

In other cases of reemployment DA is allowed subject to the limit of emoluments last drawn. DA is not allowed while the pensioner stays abroad and also in case of employees absorbed in public undertaking or bodies.

If the pensioner stayed abroad without reemployment, he shall be eligible to draw DA on pension.

Dearness Allowance is granted at certain percentage of basic pension and it is revised every 6 months from 01.07.1986 onwards based on cost of living index.

Pensioners and the family pensioners are granted DA against the price rise. (ANI)

Greek PM says corruption at heart of crisis

ATHENS, March 1 (Reuters) – Corruption and impunity from prosecution lie at the heart of Greek’s debt crisis, Prime Minister George Papandreou said on Monday, calling on citizens to stomach the pain required to put the country back on track.

Bonds

“The crisis in our country is not limited to our fiscal problem. It is only the tip of the iceberg,” Papandreou said at a cabinet meeting. “It is extremely urgent to deal with it because it has assumed dramatic dimensions.”

(Reporting by Dina Kyriakidou; writing by Paul Hoskins)