New Fed QE sends dollar lower; yen falls ahead of vote

NEW YORK: The Federal Reserve's expected expansion of its quantitative easing bond-buying Wednesday sent the dollar lower for the third straight day, with the euro almost touching $1.31 before easing back.

The yen meanwhile continued to sag ahead of the December 16 general election, with the opposition Liberal Democratic Party, which wants the Bank of Japan to further ease monetary policy, leading in polls.

In its final policy review of the year, the Fed announced it would replace its Operation Twist bond swapping program with $45 billion per month in straight bond buys, on an open-ended basis, as economic growth still needed the support.

Even as the Fed set new explicit targets for tightening policy -- when the unemployment rate falls to 6.5 percent and inflation prospects top 2.5 percent -- its actions and forecasts implied that would still not happen until 2015.

At 2200 GMT the euro was buying $1.3075, compared to $1.3003 late Tuesday.

The yen sagged as the Japanese election draws near, with the LDP's Shinzo Abe expected to return as prime minister.

Abe, prime minister in 2006-2007, has made strong calls to kickstart Japan's deflation-plagued economy, vowing to impose a three percent inflation target on the Bank of Japan and forcing it to buy bonds -- effectively deficit financing.

He has since rowed back after criticism he was endangering the independence of the central bank. But his comments helped pull down the high yen, delighting exporters hit hard by the surging currency.

The dollar gained to 83.24 yen from 82.51, while the euro moved to 108.85 yen from 107.28 yen.

"It's hard to imagine a change of government will lead to measures that have a real impact on the economy," said Kenji Shiomura, strategist at Daiwa Securities.

"Behind the deflation is a structural problem -- a shrinking population with low birthrates. This problem won't go away."

The dollar slipped to 0.9261 Swiss francs, while the pound gained to $1.6147.

-AFP/ac

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Stringing East andnd West with music

KOLKATA: Ravi Shankar was an established name in Indian music - on stage, screen and public broadcasting - when he began collaborating with peers in Western classical music. It began in 1952 when Yehudi Menuhin came to raise money for famine relief. Nehru invited the socially conscious violinist to a reception where Ravi Shankar, then popularising through Jhankar Music Circle - set up by the Shrirams in New Delhi - and composing for AIR, played for him.

Although Ravi Shankar had travelled extensively with Uday Shankar dance troupe, he had not played independently nor been to the US. Taken aback by the technical brilliance and improvisational aspect of Indian music, Menuhin started telling the Europeans about it. He invited Panditji for demonstration concerts and recorded them for posterity. That started a series which changed the face of classical music, in the East and West, giving birth to a genre we know as World Music.

"Violinist Menuhin and flutist Jean-Pierre Rampal, two of his early and lifelong collaborators, wrought a monumental change in the basis and range of global art music," Philip Glass later wrote. The American composer "had the great fortune" to work as Panditji's assistant in Paris of 1960s, when he was scoring for Conrad Rook's Chappaqua. "I found he had a practical knowledge of Western instruments. And though I was in charge of transcribing his music into Western notation for the French Chamber Orchestra, the actual orchestration was completed by Ravi himself," he wrote in the foreword to the maestro's autobiography, My Music My Life.

Ravi Shankar's encounters with Western Music proved to be a two-way street. While he gained from the discipline of notating, he joyfully shared the breadth and depth of his tradition with those outside it. And, in the process, he gave Indian musical tradition what it lacked: a theoretical understanding of ideas and concepts of its history that our gurus - being practitioners raised strictly within the oral tradition of gharanas - never needed.

Ravi Shankar's impact was more than musical - it was cultural, even spiritual. "Even before 1952, Western elite were aware of Hindu and Buddhist philosophy. In the 1960s, with the Beatles, the influence percolated to popular level," writes Peter Lavezzoli in Bhairavi: The Global Impact of Indian Music. It is hard to overstate the significance of George Harrison composing songs based on khayal, bhajan, Carnatic songs, playing sitar or travelling to Haridwar. If people also readily took to yoga, it was perhaps because they were seeking alternatives to Judeo-Christian philosophy.

"To the Indian quality of serenity, Ravi Shankar brought an exalted personal expression of union with the infinite," Yehudi Menuhin once said to TOI. "Few modern composers in the West achieve this although we revere it in Bach, Beethoven or Mozart." Ravi Shankar filled the void when he crafted a synthesis of eastern and western expressions - of immediacy and spontaneity with intuitive and eternal truth.

If this penchant for improvisation proved a gain for rock and jazz, it also opened Indian music to new concepts and took it to new heights.

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DA investigating Texas' troubled $3B cancer agency

AUSTIN, Texas (AP) — Turmoil surrounding an unprecedented $3 billion cancer-fighting effort in Texas worsened Tuesday when its executive director offered his resignation and the state's chief public corruption prosecutor announced an investigation into the beleaguered agency.

No specific criminal allegations are driving the latest probe into the Cancer Prevention and Research Institute of Texas, said Gregg Cox, director of the Travis County district attorney's public integrity unit. But his influential office opened a case only weeks after the embattled agency disclosed that an $11 million grant to a private company bypassed review.

That award is the latest trouble in a tumultuous year for CPRIT, which controls the nation's second-largest pot of cancer research dollars. Amid the mounting problems, the agency announced Tuesday that Executive Director Bill Gimson had submitted his letter of resignation.

"Unfortunately, I have also been placed in a situation where I feel I can no longer be effective," Gimson wrote in a letter dated Monday.

Gimson said the troubles have resulted in "wasted efforts expended in low value activities" at the agency, instead of a focused fight against cancer. Gimson offered to stay on until January, and the agency's board must still approve his request to step down.

His departure would complete a remarkable house-cleaning at CPRIT in a span of just eight months. It began in May, when Dr. Alfred Gilman resigned as chief science officer in protest over a different grant that the Nobel laureate wanted approved by a panel of scientists. He warned it would be "the bomb that destroys CPRIT."

Gilman was followed by Chief Commercialization Officer Jerry Cobbs, whose resignation in November came after an internal audit showed Cobbs included an $11 million proposal in a funding slate without a required outside review of the project's merits. The lucrative grant was given to Dallas-based Peloton Therapeutics, a biomedical startup.

Gimson chalked up Peloton's award to an honest mistake and has said that, to his knowledge, no one associated with CPRIT stood to benefit financially from the company receiving the taxpayer funds. That hasn't satisfied some members of the agency's governing board, who called last week for more assurances that no one personally profited.

Cox said he has been following the agency's problems and his office received a number of concerned phone calls. His department in Austin is charged with prosecuting crimes related to government officials; his most famous cases include winning a conviction against former U.S. House Majority Leader Tom DeLay in 2010 on money laundering charges.

"We have to gather the facts and figure what, if any, crime occurred so that (the investigation) can be focused more," Cox said.

Gimson's resignation letter was dated the same day the Texas attorney general's office also announced its investigation of the agency. Cox said his department would work cooperatively with state investigators, but he made clear the probes would be separate.

Peloton's award marks the second time this year that a lucrative taxpayer-funded grant authorized by CPRIT instigated backlash and raised questions about oversight. The first involved the $20 million grant to M.D. Anderson Cancer Center in Houston that Gilman described as a thin proposal that should have first been scrutinized by an outside panel of scientific peer-reviewers, even though none was required under the agency's rules.

Dozens of the nation's top scientists agreed. They resigned en masse from the agency's peer-review panels along with Gilman. Some accused the agency of "hucksterism" and charting a politically-driven path that was putting commercial product-development above science.

The latest shake-up at CPRIT caught Gilman's successor off-guard. Dr. Margaret Kripke, who was introduced to reporters Tuesday, acknowledged that she wasn't even sure who she would be answering to now that Gimson was stepping down. She said that although she wasn't with the agency when her predecessor announced his resignation, she was aware of the concerns and allegations.

"I don't think people would resign frivolously, so there must be some substance to those concerns," Kripke said.

Kripke also acknowledged the challenge of restocking the peer-review panels after the agency's credibility was so publicly smeared by some of the country's top scientists. She said she took the job because she felt the agency's mission and potential was too important to lose.

Only the National Institutes of Health doles out more cancer research dollars than CPRIT, which has awarded more than $700 million so far.

Gov. Rick Perry told reporters in Houston on Tuesday that he wasn't previously aware of the resignation but said Gimson's decision to step down was his own.

Joining the mounting criticism of CPRIT is the woman credited with brainstorming the idea for the agency in the first place. Cathy Bonner, who served under former Texas Gov. Ann Richards, teamed with cancer survivor Lance Armstrong in selling Texas voters in 2007 on a constitutional amendment to create an unprecedented state-run effort to finance a war on disease.

Now Bonner says politics have sullied an agency that she said was built to fund research, not subsidize private companies.

"There appears to be a cover-up going on," Bonner said.

Peloton has declined comment about its award and has referred questions to CPRIT. The agency has said the company wasn't aware that its application was never scrutinized by an outside panel, as required under agency rules.

___

Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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Obama Recognizes Syrian Opposition Group

In a diplomatic shift, President Obama said today his administration now formally recognizes the newly-formed, leading coalition of Syrian rebels who are fighting to topple Syria's embattled President Bashar Assad.

"We've made a decision that the Syrian Opposition Coalition is now inclusive enough, is reflective and representative enough of the Syrian population that we consider them the legitimate representative of the Syrian people in opposition to the Assad regime," Obama said.

The announcement, made during an exclusive interview with ABC News' Barbara Walters, grants new legitimacy to the rebel group and marks a new phase in U.S. efforts to isolate the Assad regime.

"It's a big step," Obama said of the decision. The United States follows Britain and the European Union, both of which last month recognized the Syrian opposition group.

More of Barbara Walters' exclusive first joint, post-election interview with President Obama and first lady Michelle Obama airs Friday, Dec. 14, on "20/20" at 10 p.m. ET on ABC stations.

The diplomatic designation will allow the United States to more closely support rebel efforts, including the organization of a future post-Assad government, administration officials said.

"Obviously, with that recognition comes responsibilities," Obama said of the young coalition. "To make sure that they organize themselves effectively, that they are representative of all the parties, [and] that they commit themselves to a political transition that respects women's rights and minority rights."

Official White House Photo by Pete Souza

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The move does not include the provision of weapons, but it opens the door for that possibility in the future.

"Providing arms has to be done in a way that helps promote a political solution," one senior Obama administration official said today. "And until we understand how these arms promote a political solution, we do not see how provision of arms is a good idea."

But the official added, "the president has never ruled out in the future providing arms."

Obama expressed caution today about some Syrian factions involved with the coalition, warning that the United States will not support extremist elements.

"Not everybody who's participating on the ground in fighting Assad are people who we are comfortable with," Obama told Walters. "There are some who, I think, have adopted an extremist agenda, an anti-U.S. agenda, and we are going to make clear to distinguish between those elements."

The president specifically singled out the group Jabhat al-Nusrah for its alleged affiliation with Al Qaeda in Iraq. The State Department says the jihadist group is responsible for nearly 600 violent attacks in major Syrian cities in the past year.

"Through these attacks, al-Nusrah has sought to portray itself as part of the legitimate Syrian opposition while it is, in fact, an attempt by [Al Qaeda in Iraq] to hijack the struggles of the Syrian people for its own malign purposes," State Department spokeswoman Victoria Nuland said.

The Obama administration blacklisted al-Nusrah earlier this week, imposing economic sanctions and branding it a terrorist organization.

Recognition of the Syrian rebel group has been expected. Secretary of State Hillary Clinton was to formally announce the new relations with the United States during a meeting of international allies supporting Syria's rebels in Marrakech, Morocco, on Wednesday.

She has since cancelled her trip because of an illness. Her deputy, Bill Burns, will attend in her place.

President Obama also discussed the looming "fiscal cliff" and suggested a new flexibility on cuts to entitlement spending. Read that report here.

ABC News' Martha Raddatz contributed to this report.

More of Barbara Walters' exclusive first joint, post-election interview with President Obama and first lady Michelle Obama airs Friday, Dec. 14, on "20/20" at 10 p.m. ET on ABC stations.

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Egyptian army to host unity talks as crisis deepens

CAIRO (Reuters) - Egypt's army chief will host national unity talks on Wednesday, seeking to end a growing political and economic crisis in the Arab world's most populous nation.

The meeting scheduled for 1430 GMT was called in response to a wave of protests since President Mohamed Mursi awarded himself sweeping powers on November 22 to push through a new constitution shaped by his Islamist allies, which is due to go to a referendum on Saturday.

"We will not speak about politics nor about the referendum. Tomorrow we will sit together as Egyptians," armed forces chief and Defense Minister Abdel Fattah al-Sisi said at a gathering of army and police officials on Tuesday.

Mursi and the Muslim Brotherhood, which propelled him to power in a June election, were expected to attend, while the main opposition coalition said it would decide on Wednesday morning whether to participate. The opposition stayed away from an earlier reconciliation meeting called by Mursi last weekend.

The judiciary committee overseeing the vote decided late on Tuesday that the referendum would be conducted on two days instead of one, as previously planned.

"The committee had officially asked the President to issue a law approving that the referendum takes place on two stages on Saturday December 15 and Saturday December 22," Judge Mahmoud Abu Shousha, a member of the referendum judiciary committee, said. Voting for Egyptians living abroad starts on Wednesday.

"The reason for the splitting of the vote into two stages is due to a shortage of judges needed to supervise the ballot stations," another member of the committee, who asked not to be named, said.

Many judges had decided in a joint meeting on Tuesday to not supervise the vote on a constitution they say had divided the country into two groups.

Outside the presidential palace - where anti-Mursi protesters are demanding the Islamist postpone the vote on a constitution they say does not represent all Egyptians - there was skepticism tinged with some hope.

"Talks without the cancellation of the referendum - and a change to the constitution to make it a constitution for all Egyptians and not the Brotherhood - will lead to nothing and will be no more than a media show," said Ahmed Hamdy, a 35-year-old office worker.

But the fact that the army was calling such talks "is an indication to all parties that the crisis is coming to a head and that they need to end it quickly", he said.

Earlier, Finance Minister Mumtaz al-Said disclosed that a $4.8 billion International Monetary Fund loan, a cornerstone of Egypt's economic recovery hopes, would be delayed until next month because of the crisis.

The delay was intended to allow time to explain a widely criticized package of economic austerity measures to the Egyptian people, Said told Reuters.

REBUILD CONSENSUS

Prime Minister Hisham Kandil said the measures would not hurt the poor. Bread, sugar and rice would not be touched, but prices of cigarettes and cooking oil would go up and fines would be imposed for public littering. In a bid to rebuild consensus, he said there would be a public consultation about the program next week.

In Washington, the IMF said Egypt had asked for the loan to be postponed "in light of the unfolding developments on the ground". The Fund stood ready to consult with Egypt on resuming discussions on the stand-by loan, a spokeswoman said.

On the streets of Cairo, thousands of opposition supporters gathered outside the presidential palace to demand that Mursi postpone Saturday's referendum.

A bigger crowd of flag-waving Islamist Mursi backers, who want the vote to go ahead as planned on Saturday, assembled at two mosques and remained on the streets as night fell over the Egyptian capital. There were also protests in Alexandria and other cities.

The extended upheaval following the fall of Hosni Mubarak last year is causing concern in the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

State Department spokeswoman Victoria Nuland emphasized "deep concerns" over the situation in Egypt and repeated calls on protesters to demonstrate peacefully and on security forces to act with restraint. She declined to be drawn on whether Washington believed the referendum should be postponed.

The latest unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and the opposition. But the Republican Guard has yet to use force to keep protesters away from the presidential palace, now ringed with tanks, barbed wire and concrete barricades.

(Additional reporting by Tamim Elyan and Edmund Blair in Cairo, and Andrew Quinn in Washington; Writing by Giles Elgood; Editing by Michael Roddy)

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Football: Bradford pile on the misery for woeful Arsenal

BRADFORD, United Kingdom: Arsenal defender Thomas Vermaelen missed the decisive spot-kick as League Two minnows Bradford City stunned the Gunners with a 3-2 penalty shoot-out triumph after a 1-1 draw in the League Cup quarter-finals on Tuesday.

Garry Thompson's volleyed strike after 16 minutes gave the underdogs a shock 1-0 lead at Valley Parade, but Arsenal thought they had got out of jail when Vermaelen netted three minutes from the end of normal time.

However, Bradford went on to win their ninth consecutive penalty shoot-out with Santi Cazorla and Marouane Chamakh missing the first two kicks for the Gunners before Vermaelen's blunder consigned Arsene Wenger's side to arguably the most humiliating loss of the Frenchman's 16-year reign.

Wenger, who has often opted to field a weakened side in this competition, decided to name eight of the players that had beaten West Bromwich Albion 2-0 in the Premier League on Saturday.

But there was no sign of any momentum from that win as Arsenal, looking totally out of sorts in temperatures that were below freezing when the game got under way, hit a new low in an already traumatic campaign.

Bradford forward Nahki Wells forced Wojciech Sczesny into an early save after breaching the visitors' backline and the home fans were soon celebrating as Thompson picked an opportune time to claim only his second goal of the season.

The former Morecambe and Scunthorpe attacker converted Gary Jones' free kick from the right as Bradford, in front of their biggest crowd at Valley Parade since 1960 of 23,971, threatened to cause a major cup upset.

Arsenal showed signs of improvement late in the half as French midfielder Francis Coquelin went close to his first goal for the Londoners, striking his left footed shot against a post from the edge of the area.

Gervinho then missed right in front of goal with Bradford goalkeeper Matt Duke beaten after Kieran Gibbs had set up the chance with a cross from the left.

The hosts could have been 2-0 up at half-time though as Wells slotted just wide of the post after James Hanson had headed on Duke's long kick.

Bradford, who had previously won on penalties at Premier League side Wigan in the last round, continued to defend in committed fashion at the start of the second half.

But Arsenal were not helping their cause as their wayward finishing continued when Aaron Ramsey sliced a shot wide after an incisive move from the visitors.

Gervinho was next to fire a shot well wide of its target and Wenger opted to send on Chamakh, Tomas Rosicky and Alex Oxlade-Chamberlain as his side desperately searched for an equaliser.

Oxlade-Chamberlain immediately tested Duke from distance on 70 minutes, Arsenal's first shot on target in the entire game, but they could not find any momentum.

Bradford, who have already played a total of 31 matches this term, showed no signs of fatigue, defending in numbers as they tried to protect their lead.

Wilshere forced Duke into another save with a left footed shot from outside the area while Cazorla had a shot deflected wide.

But Arsenal eventually found a late equaliser two minutes from time with Vermaelen heading home from six yards out following Cazorla's cross from the left.

Cazorla could have won it for Wenger's team inside 90 minutes with two efforts that were kept out by Duke but the game went into extra-time.

Duke saved well from Gibbs and Oxlade-Chamberlain while Cazorla hit the crossbar in the second half of the added 30 minutes but the visitors could not find the goal to prevent penalties.

Cazorla's first kick was saved by Duke and then Chamakh hit the post.

Bradford missed penalties from Stephen Darby and Ritchie Jones, the latter, but Vermaelen hit the post with the final kick as the hosts reached the last four for the first time.

- AFP/ac

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Apna Ghar case: Contempt petition seeks action against Haryana chief secretary

CHANDIGARH: A contempt of court petition was filed on Tuesday before the Punjab and Haryana high court against the chief secretary (CS), Haryana, following the disappearance of two female inmates of Apna Ghar.

Petitioner Usav Singh Bains, a member of Child Rights Protection Network (CRPN), has sought contempt of court proceedings against the chief secretary for state government's failure to provide safety and security to the sexually-abused children of Rohtak's controversial shelter home - Apna Ghar.

Petitioner has submitted that on October 31, HC had ordered to ensure that none of the accused who have been enlarged on bail should be in a position to either meet or contact the children under any circumstances and if any such instance is brought to the notice of the court, the same shall be viewed with seriousness and taken to be a violation of the order

He alleged that just five days after these orders, a victim of Apna Ghar shelter home, lodged at Panipat, went missing under mysterious circumstances and again on December 10, two more Apna Ghar girls were reported as missing.

Petitioner has also added that it would be in interest of safety and security of the children that all kids in Apna Ghar be immediately shifted from Haryana to "Snehalaya" - a shelter home in Chandigarh, which would not only benefit the safety and security of the children but will also help Chandigarh branch of CBI to meet the children on a regular basis as the case is being tried at the Panchkula special CBI court. The petition would come up for hearing on Wednesday.

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Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

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Syrian Ex-General: Assad Will Use Chemical Weapons

A former top general in Syria's chemical weapons program says he doesn't doubt for a moment that President Bashar al-Assad will deploy his chemical weapons arsenal as he tries to hold onto power and crush the uprising that started almost two years ago.

"The regime started to fall and deteriorate. It's coming to its end," said retired Major General Adnan Sillou in an interview in a hotel near Antakya, on Turkey's southern border with Syria. "It's highly possible that he'll start using [chemical weapons] to kill his own people because this regime is a killer."

Sillou told ABC News that until September 2008, he was chief of staff on the defensive side of the chemical weapons program. He said he was in charge of training soldiers against attacks and contact with the weapons, as well as procuring safety equipment to guard against them.

Courtesy Major-General Adnan Sillou

He listed mustard gas along with the sarin, VX and tabun nerve agents as the main elements in Syria's chemical arsenal, whose existence Syria doesn't even acknowledge. Foreign intelligence officials and analysts have focused on the first three as the main threats, and last week U.S. officials said there was evidence sarin had not only been moved, but its binary components, usually stored separately, had been combined and placed into bombs for use.

Sillou accuses Assad's forces of already spraying pesticides and dropping white phosphorous, claims also made by opposition activists.

"They're idiots, crazy. Simply they are killers," he said.

Sillou believes the regime could step it up to more serious chemical weapons if Aleppo, Syria's most populous city where fighting has raged for months, falls to the rebels.

In July, Sillou left Syria for Turkey almost four years after he said he retired from the military. Sillou told ABC News that in his last post, which he held for six years, he was second in command behind a man named Said Ali Khalil, a member of Assad's ruling Alawite sect, an offshoot of Shiite Islam.

After defecting, Sillou said he was debriefed by an Arabic-speaking agent from the Central Intelligence Agency in Turkey's capital, Ankara. The meeting lasted three hours and was the last contact he said he had with them or any other intelligence agency.

Fighting is raging around the capital, Damascus, notably on the airport road where rebels are trying to take the airport to hamper outside support and deal a highly symbolic blow to the regime. The uptick in violence near the seat of Assad's power has raised American fears that he could resort to using his chemical weapons.

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Cairo faces rival protests over constitution crisis

CAIRO (Reuters) - Opponents and supporters of Egyptian President Mohamed Mursi's plans to vote on a new constitution will take to the streets in central Cairo later on Tuesday, risking more violent confrontation after last week's deadly clashes.

Leftists, liberals and other opposition groups have called for marches to the presidential palace in the afternoon to protest against the hastily arranged referendum planned for Saturday, which they say is polarizing the country.

Islamists, who dominated the body that drew up the constitution, have urged their followers to turn out "in millions" the same day in a show of support for the president and for a referendum they feel sure of winning and that critics say could put Egypt in a religious straitjacket.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and opponents besieging Mursi's graffiti-daubed presidential palace.

The elite Republican Guard has yet to use force to keep protesters away from the palace, now ringed with tanks, barbed wire and concrete barricades, but a decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians during the referendum and until the announcement of the results.

Leftist politician Hamdeen Sabahy, one of the most prominent members of the National Salvation Front opposition coalition, said Mursi was driving a wedge between Egyptians and destroying prospects for consensus.

As well as pushing the early referendum, Mursi has angered opponents by taking sweeping temporary powers he said were necessary to secure the country's transition to stability after a popular uprising overthrew autocratic former president Hosni Mubarak 22 months ago.

"The road Mohamed Mursi is taking now does not create the possibility for national consensus," said Sabahy.

If the constitution was passed, he said: "Egypt will continue in this really charged state. It is certain that this constitution is driving us to more political polarization."

The National Salvation Front also includes Nobel Peace Prize laureate Mohamed ElBaradei and former Arab League chief Amr Moussa.

The opposition says the draft constitution fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill equipped to deal with a looming economic crisis.

Lamia Kamel, a spokeswoman for Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a "no" vote.

"Both paths are unwelcome because they really don't want the referendum at all," she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

Mahmoud Ghozlan, the Muslim Brotherhood's spokesman, said the opposition could stage protests, but should keep the peace.

"They are free to boycott, participate or say no; they can do what they want. The important thing is that it remains in a peaceful context to preserve the country's safety and security."

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a "dark tunnel".

The continuing disruption is also casting doubts on the government's ability to push through tough economic reforms that form part of a proposed $4.8 billion IMF loan agreement.

(Writing by Edmund Blair; Editing by Will Waterman)

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