No progress in cliff talks leave dollar-euro flat

NEW YORK: The dollar traded flat against the euro Wednesday after a slight push higher mid-session, as talks continued in Washington on averting the economy-crunching fiscal cliff.

At 2200 GMT, the euro bought $1.2939, a hair off the level at the same time Tuesday.

Just hours earlier, the euro fell to $1.2881 before rebounding, the swings apparently related to perceptions over whether the fiscal cliff talks were going well, analysts said.

President Barack Obama suggested key issues were still unresolved with a challenge to Republicans to compromise, deflating the impact of more optimistic remarks earlier by Republican House Speaker John Boehner on progress.

"Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced," Obama said.

"I believe that both parties can agree on a framework that does that in the coming weeks," he said. "In fact, my hope is to get this done before Christmas."

Forex expert Neal Gilbert of GFT was skeptical even of that deadline.

"If no more positive comments are made by the Republican side tomorrow, then we can likely chalk this up to political gamesmanship and resume our regularly scheduled acceleration toward the edge of the fiscal cliff," Gilbert said.

The yen edged higher, with the looming election in Japan limiting any gains as long as the opposition Liberal Democratic Party continues to lead in the polls.

LDP leader Shinzo Abe has vowed to pressure the Bank of Japan into more aggressive monetary easing if his party wins.

The dollar bought 82.03 yen, compared to 82.16 on Tuesday, while the euro was at 106.14 yen, from 106.30.

The dollar was flat against the Swiss franc, trading at 0.9300 francs, and the British pound was also barely changed at $1.6013.

-AFP/ac

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Indira Gandhi lent Indian politics the dynastic shift: Ramachandra Guha

BANGALORE: The Congress led by Indira Gandhi fostered a generation of hero worship and dynasty politics after 1969. This inspired many others like Muthuvel Karunanidhi, who started off with noble intentions to fight against caste discriminations, to do the same and has led to a centralization of politics in present India, said Ramachandra Guha, on Wednesday.

He was speaking during the launch of his latest book, Patriots and Partisans.

The 54-year-old historian went on to add that Jawaharlal Nehru, one of the most charismatic leaders of Indian politics, has been slowly losing his popularity because of the Congress's dynastic politics.

"Sins of seven successive generations have been bestowed on Nehru," he said light-heartedly.

The highest paid non-fiction writer of the country also slammed the phenomenon called the 'Congress chamchagiri'. "I saw a long queue of Congress party members waiting outside Rahul Gandhi's house during his birthday, a couple of years ago, braving scorching sun. Nevertheless, Rahul didn't come out to greet them while the 100 kilogram cake they had brought for him disintegrated leaving a trail from the Congress general secretary's house till the Indira Gandhi circle," he said.

He said that scientific institutions in Delhi couldn't achieve the success of ones in other parts of the country as officials chosen in the capital-based institutions are often selected on the recommendation of politicians.

Guha went on to add that massacre of Muslims in Hyderabad during the annexation of the state by the Indian army happened before the constitution came into being in 1950, but it is sad that the perpetrators of 1984 Sikh massacre and 2002 Muslim massacre in Gujarat, which were initiated by Congress and BJP, respectively, haven't still been punished.

He slammed right and left wing politicians, saying that the citizens have allowed the Hindu rightists' claims to be truly patriots of the country because the left is often considered anti-patriotic because their fatherland has always been a different country - depending upon the prevalence of Marxists movements in these countries, like China, the USSR, Cuba and currently Venezuela - and also due to the high decibel levels and angry outbreaks of the saffron brigade.

"Violence unleashed by left ( Naxalites) and right (Hindu fundamentalists) is against democracy, liberalism, religious plularism and tolerance, the idea that our Constitution promotes. Citizens should protect the country from these extremisms," he said.

TOO EARLY

Guha had a word of advice for the Arvind Kejriwal-launched Aam Aadmi Party, saying that it's too early for them to participate in the 2014 general elections. "Their current economic policies are a bit naive," he added.

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CDC: HIV spread high in young gay males

NEW YORK (AP) — Health officials say 1 in 5 new HIV infections occur in a tiny segment of the population — young men who are gay or bisexual.

The government on Tuesday released new numbers that spotlight how the spread of the AIDS virus is heavily concentrated in young males who have sex with other males. Only about a quarter of new infections in the 13-to-24 age group are from injecting drugs or heterosexual sex.

The Centers for Disease Control and Prevention said blacks represented more than half of new infections in youths. The estimates are based on 2010 figures.

Overall, new U.S. HIV infections have held steady at around 50,000 annually. About 12,000 are in teens and young adults, and most youth with HIV haven't been tested.

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CDC report: http://www.cdc.gov/vitalsigns

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Egypt Erupts Over Morsi's 'First Step for Tyranny'

Nov 27, 2012 1:33pm

Khalil Hamra/AP Photo

CAIRO – Waves of protesters poured into Cairo’s Tahrir Square today to protest the far-reaching constitutional declaration made by President Mohammed Morsi last week that has essentially granted him unchecked power.

Click here for images of the demonstrations in Tahrir Square.

The new declaration frees Morsi from judicial oversight and with no parliament currently in place, many said longtime dictator Hosni Mubarak had simply been substituted with another.

“This is the first step for tyranny, he’s trying to put all the power in his hands and this is against the constitution and the law,” said Hassan Gamal, a professor of orthopaedic surgery. “No exceptions for anybody. Mubarak was tyrant because of the exceptions. We’re not going to tolerate any exceptions anymore.”

Liberal groups had called for the mass protest against Morsi, many of which have long complained of Islamists’ strength in post-Mubarak Egypt, led by Morsi and the Muslim Brotherhood. Protesters today said they were afraid of the constitution being written by an Islamist-dominated constitutional assembly, which will be put to a referendum once finished.

“The Muslim Brotherhood, they say something and then do the opposite,” said English teacher Nadine Mustafa. “We are in the 21st century, we want democracy, we don’t want a pharaoh ruining the country. This is ridiculous.”

Morsi’s office published the seven-article declaration on Thursday, the second of which states that Morsi’s laws and decrees “are final and binding and cannot be appealed by any way or to any entity” until the constitution is approved and a parliament elected.

Violence immediately broke out with clashes between Morsi opponents, supporters and police leading to more than 500 injuries and at least three deaths. To prevent more violence, the Muslim Brotherhood on Monday night cancelled their own rallies planned for today, though supporters did turn out in Alexandria.

“He’s a president that was elected to office with no constitution, no parliament and no defined powers in the state. It’s an exceptional circumstance,” argued Muslim Brotherhood senior adviser Jihad Haddad, who accused Mubarak-appointed judges of blocking Morsi’s attempts to reform the country’s institutions.

Morsi’s office insisted that the powers are only temporary. Haddad said the declaration will only be valid until a draft of the constitution is submitted.

“[Morsi] tried to do this through the only available avenue and choice,” Haddad said. “It does terrify [Morsi opponents] because the only thing they can rely on is trust and that trust was given to us during the presidential elections.”

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Egyptians challenge Mursi in nationwide protests

CAIRO (Reuters) - Tens of thousands of Egyptians rallied on Tuesday against President Mohamed Mursi in one of the biggest outpourings of protest since Hosni Mubarak's overthrow, accusing the Islamist leader of seeking to impose a new era of autocracy.

Police fired tear gas at stone-throwing youths in streets near the main protest in Cairo's Tahrir Square, heart of the uprising that toppled Mubarak last year. Clashes between Mursi's opponents and supporters erupted in a city north of Cairo.

But violence could not overshadow the show of strength by the normally divided opponents of Islamists in power, posing Mursi with the biggest challenge in his five months in office.

"The people want to bring down the regime," protesters in Tahrir chanted, echoing slogans used in the 2011 revolt.

Protesters also turned out in Alexandria, Suez, Minya and other Nile Delta cities.

Tuesday's unrest by leftists, liberals and other groups deepened the worst crisis since the Muslim Brotherhood politician was elected in June, and exposed the deep divide between the newly empowered Islamists and their opponents.

A 52-year-old protester died after inhaling tear gas in Cairo, the second death since Mursi last week issued a decree that expanded his powers and barred court challenges to his decisions.

Mursi's administration has defended the decree as an effort to speed up reforms and complete a democratic transformation in the Arab world's most populous country.

"Calls for civil disobedience and strikes will be dealt with strictly by law and there is no retreat from the decree," Refa'a Al-Tahtawy, Mursi's presidential chief of staff, told the Al-Hayat private satellite channel.

But opponents say Mursi is behaving like a modern-day pharaoh, a jibe once leveled at Mubarak. The United States, a benefactor to Egypt's military, has expressed concern about more turbulence in a country that has a peace treaty with Israel.

"We don't want a dictatorship again. The Mubarak regime was a dictatorship. We had a revolution to have justice and freedom," 32-year-old Ahmed Husseini said in Cairo.

The fractious ranks of Egypt's non-Islamist opposition have been united on the street by crisis, although they have yet to build an electoral machine to challenge the well-organized Islamists, who have beaten their more secular-minded rivals at the ballot box in two elections held since Mubarak was ousted.

MISCALCULATION

"There are signs that over the last couple of days that Mursi and the Brotherhood realized their mistake," said Elijah Zarwan, a fellow with The European Council on Foreign Relations. He said the protests were "a very clear illustration of how much of a political miscalculation this was".

Mursi's move provoked a rebellion by judges and has battered confidence in an economy struggling after two years of turmoil. The president still must implement unpopular measures to rein in Egypt's crushing budget deficit - action needed to finalize a deal for a $4.8 billion International Monetary Fund loan.

Some protesters have been camped out since Friday in Tahrir and violence has flared around the country, including in a town north of Cairo where a Muslim Brotherhood youth was killed in clashes on Sunday. Hundreds have been injured.

Supporters and opponents of Mursi threw stones at each other and some hurled petrol bombs in the Delta city of el-Mahalla el-Kubra. Medical sources said almost 200 people were injured.

"The main demand is to withdraw the constitutional declaration (decree). This is the point," said Amr Moussa, a former Arab League chief and presidential candidate who has joined the new opposition coalition, the National Salvation Front. The group includes several top liberal politicians.

Some scholars from the prestigious al-Azhar mosque and university joined Tuesday's protest, showing that Mursi and his Brotherhood have alienated some more moderate Muslims. Members of Egypt's large Christian minority also joined in.

Mursi formally quit the Brotherhood on taking office, saying he would be a president for all Egyptians, but he is still a member of its Freedom and Justice Party.

The decree issued on Thursday expanded his powers and protected his decisions from judicial review until the election of a new parliament, expected in the first half of 2013.

In Washington, White House spokesman Jay Carney urged demonstrators to behave peacefully.

"The current constitutional impasse is an internal Egyptian situation that can only be resolved by the Egyptian people, through peaceful democratic dialogue," he told reporters.

New York-based Human Rights Watch said the decree gives Mursi more power than the interim military junta from which he took over.

U.N. Secretary-General Ban Ki-moon told an Austrian paper he would encourage Mursi to resolve the issue by dialogue.

DECREE'S SCOPE DEBATABLE

Trying to ease tensions with judges, Mursi assured Egypt's highest judicial authority that elements of his decree giving his decisions immunity applied only to matters of "sovereign" importance. That should limit it to issues such as declaring war, but experts said there was room for interpretation.

In another step to avoid more confrontation, the Muslim Brotherhood cancelled plans for a rival mass rally in Cairo on Tuesday to support the decree. Violence has flared in Cairo in the past when both sides have taken to the streets.

But there has been no retreat on other elements of the decree, including a stipulation that the Islamist-dominated body writing a new constitution be protected from legal challenge.

"The decree must be cancelled and the constituent assembly should be reformed. All intellectuals have left it and now it is controlled by Islamists," said 50-year-old Noha Abol Fotouh.

With its popular legitimacy undermined by the withdrawal of most of its non-Islamist members, the assembly faces a series of court cases from plaintiffs who say it was formed illegally.

Mursi issued the decree on November 22, a day after he won U.S. and international praise for brokering an end to eight days of violence between Israel and Hamas around the Gaza Strip.

Mursi's decree was seen as targeting in part a legal establishment still largely unreformed from Mubarak's era, when the Brotherhood was outlawed.

Though both Islamists and their opponents broadly agree that the judiciary needs reform, Mursi's rivals oppose his methods.

Rulings from an array of courts this year have dealt a series of blows to the Brotherhood, leading to the dissolution of the first constitutional assembly and the lower house of parliament elected a year ago. The Brotherhood dominated both.

The judiciary blocked an attempt by Mursi to reconvene the Brotherhood-led parliament after his election victory. It also stood in the way of his attempt to sack the prosecutor general, another Mubarak holdover, in October.

In his decree, Mursi gave himself the power to sack that prosecutor and appoint a new one. In open defiance of Mursi, some judges are refusing to acknowledge that step.

(Additional reporting by Tom Perry, Seham Eloraby, Marwa Awad and Yasmine Saleh in Cairo and Michael Shields in Vienna; Writing by Edmund Blair and Tom Perry; Editing by Giles Elgood/Mark Heinrich)

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Euro sags after new Greek debt deal sealed

NEW YORK: The euro fell against the dollar Tuesday following a week of gains after the European Union and IMF reached agreement on recasting Greece's bailout to avert a looming default.

But the dollar's gains were limited by signs that negotiations in Washington over the looming fiscal cliff, remained divided on key issues.

At 2200 GMT the euro was at $1.2938, down from $1.2971 at the same time Monday.

The yen was mixed, falling to 82.16 yen per dollar from 81.98 yen Monday, but gaining to 106.30 yen per euro from 106.38.

Neal Gilbert of GFT said profit taking set in on the euro after its rise ahead of the Greek debt talks Monday.

"The Eurogroup worked overtime yesterday to finally come to an agreement on Greece after two postponements delayed it into this week," Gilbert said.

"In response, risk markets rose, but not as handily as some had expected. The euro-dollar in particular barely reached $1.30 from $1.2960 before profit taking shoved it back down toward the $1.29 handle throughout the US trading session."

Greece won breathing space with long-frozen eurozone loans to restart from December and a first clear admission that a chunk of the country's debt burden will eventually have to be written off.

After 13 hours of talks in Brussels, the eurozone and the International Monetary Fund agreed to unlock 43.7 billion euros ($56 billion) in loans and on the need to grant significant debt relief for decades to come.

Greece must still meet a series of agreed conditions but "the decision will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece," said European Central Bank President Mario Draghi who left the talks before a final press conference.

Meanwhile Gilbert said he expected the yen to slip further ahead of the December 16 Japanese election, with the opposition Liberal Democratic Party leading in the polls.

LDP leader Shinzo Abe has vowed to pressure the Bank of Japan into launching aggressive monetary easing measures if his party wins.

"Since Abe's LDP party is expected to be victorious in the December 16 elections, the yen may well continue to depreciate," said Gilbert.

In other currencies, the Chinese yuan was steady as the US Treasury ruled against labeling Beijing a currency manipulator, trading at 6.227 yuan per dollar, shy of the record high of 6.220 hit on Monday.

The dollar rose to 0.9306 Swiss francs from 0.9278 francs.

The British pound fell to $1.6019 from $1.6026.

-AFP/ac

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Mamata to decide on voting over FDI

KOLKATA: With the Congress likely to garner a majority in Parliament over the FDI issue, the Trinamool Congress is yet to carve out its strategy in Parliament, in case Lok Sabha Speaker Meira Kumar allows the debate under rule 184.

Trinamool leaders have left it to Trinamool chief Mamata Banerjee to decide whether the party will stage a walkout along with parties such as Samajwadi Party and Bahujan Samaj Party or record their dissent during voting with the BJP and the Left.

"We still believe that no-confidence motion is the only way to remove this minority government and stop this unethical political charade being played out. Even now this can be done.

Only one MP is required to move this motion. It doesn't matter which political party it is. Let those, who're so vocal on price rise, FDI in retail and removal of subsidy cap on domestic LPG, come forward and vote on it. If one is convinced that these are anti-people policies, what stops them from nudging the government out of power. Why resort to rules to save them?" said Trinamool all India general secretary Mukul Roy.

Roy was more keen on nailing down Left Front chairman Biman Bose's recent argument that the Left didn't support the Trinamool's no-confidence notice because parties reluctant to bring down the government would vote against the government if the debate is allowed under rule 184. Roy, however, didn't want to foretell the party's strategy in the fast changing situation.

While Trinamool Rajya Sabha MP Sukhendu Sekhar Ray held that the party will fight FDI tooth and nail, senior party MP Sultan Ahmed said, "Whether to vote or not will be decided later by the Trinamool parliamentary party and the party supremo Mamata Banerjee, let the Speaker decide it first. The government will never agree to a discussion under rule 184 without majority. Our leader in the Lok Sabha, Sudip Bandopadhyay, has already cleared our stand on the matter. There is nothing more to add to it." Domestic compulsion is also weighing heavily on Trinamool Congress before it is seen aligning with CPM and BJP.

Left parties, on the other hand, have dumped the number game getting a whiff that the Congress might gather the numbers. Asked whether the CPM is heading towards a situation similar to the confidence debate on the Indo-US civil nuclear deal, CPM Rajya Sabha MP Shyamal Chakrabarty said: "Not at all. We have been trying to forge the broadest possible unity against FDI entry in multi-brand retail. I am confident that we will be achieving our target to a great extent. The Trinamool's no confidence move would have given the government a leeway to continue with their anti-people policies on all fronts for a period of six months instead," Chakrabarty said.

Trinamool leaders, on the other hand, believe that a debate under rule 184, will give Trinamool an opportunity to expose the Opposition "double-speak." "Biman Bose had argued if the government survived our no-confidence motion, they will get a parliamentary mandate to introduce FDI in retail. So if a vote under rule 184 does take place and the government wins it, would it be any different? The CM had made it clear that we believed in moving a no-confidence for it wasn't a half-measure. What is happening now only vindicates her belief," a Trinamool MP said.

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Bounce houses a party hit but kids' injuries soar

CHICAGO (AP) — They may be a big hit at kids' birthday parties, but inflatable bounce houses can be dangerous, with the number of injuries soaring in recent years, a nationwide study found.

Kids often crowd into bounce houses, and jumping up and down can send other children flying into the air, too.

The numbers suggest 30 U.S. children a day are treated in emergency rooms for broken bones, sprains, cuts and concussions from bounce house accidents. Most involve children falling inside or out of the inflated playthings, and many children get hurt when they collide with other bouncing kids.

The number of children aged 17 and younger who got emergency-room treatment for bounce house injuries has climbed along with the popularity of bounce houses — from fewer than 1,000 in 1995 to nearly 11,000 in 2010. That's a 15-fold increase, and a doubling just since 2008.

"I was surprised by the number, especially by the rapid increase in the number of injuries," said lead author Dr. Gary Smith, director of the Center for Injury Research and Policy at Nationwide Children's Hospital in Columbus, Ohio.

Amusement parks and fairs have bounce houses, and the playthings can also be rented or purchased for home use.

Smith and colleagues analyzed national surveillance data on ER treatment for nonfatal injuries linked with bounce houses, maintained by the U.S. Consumer Product Safety Commission. Their study was published online Monday in the journal Pediatrics.

Only about 3 percent of children were hospitalized, mostly for broken bones.

More than one-third of the injuries were in children aged 5 and younger. The safety commission recommends against letting children younger than 6 use full-size trampolines, and Smith said barring kids that young from even smaller, home-use bounce houses would make sense.

"There is no evidence that the size or location of an inflatable bouncer affects the injury risk," he said.

Other recommendations, often listed in manufacturers' instruction pamphlets, include not overloading bounce houses with too many kids and not allowing young children to bounce with much older, heavier kids or adults, said Laura Woodburn, a spokeswoman for the National Association of Amusement Ride Safety Officials.

The study didn't include deaths, but some accidents are fatal. Separate data from the product safety commission show four bounce house deaths from 2003 to 2007, all involving children striking their heads on a hard surface.

Several nonfatal accidents occurred last year when bounce houses collapsed or were lifted by high winds.

A group that issues voluntary industry standards says bounce houses should be supervised by trained operators and recommends that bouncers be prohibited from doing flips and purposefully colliding with others, the study authors noted.

Bounce house injuries are similar to those linked with trampolines, and the American Academy of Pediatrics has recommended against using trampolines at home. Policymakers should consider whether bounce houses warrant similar precautions, the authors said.

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Pediatrics: http://www.pediatrics.org

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Mom Fears Dad in Boy's Disappearance

The mother of 13-year-old boy Dylan Redwine, who disappeared a week ago during a court ordered visit to his father, fears that the dad may have done something to "remove Dylan from the situation."

Dylan Redwine was last seen at the home of his father, Mark Redwine, when he vanished seven days ago.

"I was married to Mark for a lot of years, and I know the way he reacts to things," Elaine Redwine told ABC News. "If Dylan maybe did or said something that wasn't what Mark wanted to hear, I'm just afraid of how Mark would have reacted."

Elaine and Mark were divorced and live about five hours away from each other, ABC News affiliate KMGH reports. Dylan was staying at his father's home because of a court order granting his father visitation rights for Thanksgiving.

Elaine Redwine told ABC News she believes her ex-husband was upset that she was the court-mandated primary custodian of their son.

"I don't think Mark treats him very well," Elaine Redwine said. "I would not put it past Mark to have done something to remove Dylan from the situation. You know, like 'if I can't have him, nobody will.'"

Dylan had been with his dad in Vallecito, Colo., for just one day before he went missing. Mark Redwine told police that his son was in his home when he left to run some errands at 7:30 a.m. When he returned four hours later, the boy was missing.

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Elaine Redwine told ABC News she was having a difficult time getting in touch with her ex-husband about their son.

"He hasn't had any contact with us. [My older son] tried to get a hold of him by texting him, and he wouldn't respond," she said. "I just find it odd that at a time like this, he would be so evasive."

Mark Redwine declined to speak to ABC News.

Police say they are considering a number of possibilities, including abduction and the possibility that Dylan ran away.

"Foul play is definitely something we are looking at, but we're hoping it's a runaway case and that Dylan will show up and will be fine," La Plata Sheriff's Office spokesman Dan Bender said. "Because we don't have any clues that point in any particular direction, we have to consider every possibility."

Dylan's mother and older brother both insist Dylan wouldn't run away without contacting them, or if he did run away from his dad's home, he would have gone to them.

"When he was afraid in any situation, he knew he could call me and I would drop everything and go out there, first thing," Dylan's brother, Cory Redwine, 21, told ABC News. "He knew that me, my mom, my step-dad, any of us, if he called us and said, 'I need your help,' he knew we'd be there."

Hundreds of people have turned up to help search for Dylan, but so far police say they are no closer to finding him.

"We had people in the air, on horseback, on ATVs, search dogs, and we got no clues from any of that," Bender said.

Dive teams are searching nearby Vallecito Lake using a high-powered sonar gun, after searches this weekend revealed nothing, according to KMGH. Search teams are also combing the shoreline around the lake.

Elaine Redwine told ABC News she thinks somebody must know something, and she hopes they come forward.

"Vallecito is a small community. If anybody has seen anything or knows anything, no matter how big or small it seems, please tell us," Redwine said. "Everything right now is crucial to bringing my little boy home."

Redwine is described as 5 feet tall, 105 pounds, blond hair, blue eyes and fair complexion. He was last seen wearing a black Nike shirt, black basketball nylon shorts, black Jordan tennis shoes and a two-tone blue and white Duke Blue Devils baseball hat.

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Egypt's Islamists seek to defuse crisis over decree

CAIRO (Reuters) - Egypt's ruling Islamists tried to defuse a political crisis on Monday, with President Mohamed Mursi backing a compromise over his seizure of extended powers and his Muslim Brotherhood calling off a planned demonstration.

Mursi provoked outrage last week that led to violent protests when he issued a decree that put beyond judicial review any decision he takes until a new parliament is elected, drawing charges he had given himself the powers of a modern-day pharaoh.

Opponents plan to go ahead with a big demonstration on Tuesday to demand he scrap the decree, threatening more turmoil for a nation that has been stumbling towards democracy for almost two years since president Hosni Mubarak was ousted.

However, the Brotherhood, which was behind Mursi's election win in June, said it had called off a rival protest also planned for Tuesday in Cairo. Violence has flared when both sides turned out in the past.

Mursi's opponents have accused him of behaving like a dictator and the West has voiced its concern, worried by more turbulence in a country that has a peace treaty with Israel and lies at the heart of the Arab Spring.

Mursi held crisis talks with members of the Supreme Judicial Council, the nation's highest judicial body, to resolve the crisis over the decree that was seen as targeting in part a legal establishment still largely unreformed from Mubarak's era.

The council had proposed he limit the scope of decisions that would be immune from judicial review to "sovereign matters", language the presidential spokesman said Mursi backed.

"The president said he had the utmost respect for the judicial authority and its members," spokesman Yasser Ali told reporters in announcing the agreement.

After reading out the statement outlining what was agreed with judges, Ali told Reuters: "The statement I read is an indication that the issue is resolved."

PROTEST GOES ON

Protesters camped out in Cairo's Tahrir Square since Friday to demand that the decree be scrapped said the president had not done enough to defuse the row. "We reject the constitutional declaration (decree) and it must be completely cancelled," said Sherif Qotb, 37, protesting amongst tents erected in the square.

Mursi's administration has defended his decree as an effort to speed up reforms and complete a democratic transformation. Leftists, liberals, socialists and others say it has exposed the autocratic impulses of a man once jailed by Mubarak.

Mona Amer, spokesman for the opposition movement Popular Current, said Tuesday's protest would go on. "We asked for the cancellation of the decree and that did not happen," she said.

Protesters are worried that the Muslim Brotherhood aims to dominate the post-Mubarak era after winning the first democratic parliamentary and presidential elections this year.

The crisis has exposed a rift between Islamists and their opponents. One person has been killed and about 370 injured in violence since Mursi issued Thursday's decree, emboldened by international praise for brokering an end to eight days of violence between Israel and Hamas in Gaza.

Before the president's announcement, leftist politician Hamdeen Sabahy said protests would continue until the decree was scrapped and said Tahrir would be a model of an "Egypt that will not accept a new dictator because it brought down the old one".

As well as shielding his decisions from judicial review, Mursi's decree protected an Islamist-dominated assembly drawing up a new constitution from legal challenge. Liberals and others say their voices are being ignored in that assembly, and many have walked out.

Only once a constitution is written can a new parliamentary election be held. Until then, legislative and executive power remains in Mursi's hands.

Though both Islamists and their opponents broadly agree that the judiciary needs reform, his rivals oppose Mursi's methods.

'NO CONFLICT'

The Supreme Constitutional Court was responsible for declaring the Islamist-dominated parliament void, leading to its dissolution this year. One presidential source said Mursi was looking for ways to reach a deal to restructure that court.

"The president and the Supreme Judicial Council confirmed their desire for no conflict or difference between the judicial and presidential authorities," spokesman Ali said.

The council had sought to defuse anger in the judiciary by urging some judges and others who had gone on strike to return to work and by proposing the idea that only decisions on "sovereign matters" be immune from legal challenge.

Legal experts said "sovereign matters" could be confined to issues such as declaring war or calling elections that are already beyond legal review. But they said Egypt's legal system had sometimes used the term more broadly, suggesting that the wording leaves wide room for interpretation.

A group of lawyers and activists has also already challenged Mursi's decree in an administrative court, which said it would hold its first hearing on December 4. Other decisions by Mursi have faced similar legal challenges brought to court by opponents.

Mursi's office repeated assurances that the steps would be temporary, and said he wanted dialogue with political groups to find "common ground" over what should go into the constitution.

The president's calls for dialogue have been rejected by members of the National Salvation Front, a new opposition coalition of liberals, leftists and other politicians and parties, who until Mursi's decree had been a fractious bunch struggling to unite.

The Front includes Sabahy, Nobel Peace Prize laureate Mohamed ElBaradei and former Arab League chief Amr Moussa.

The military has stayed out of the crisis after leading Egypt through a messy 16-month transition to a presidential election in June. Analysts say Mursi neutralized the army when he sacked top generals in August, appointing a new generation who now owe their advancement to the Islamist president.

Though the military still wields influence through business interests and a security role, it is out of frontline politics.

(Writing by Edmund Blair, Additional reporting by Yasmine Saleh; editing by David Stamp)

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