North Korea to target U.S. with nuclear, rocket tests

SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".

The announcement by the country's top military body came a day after the U.N. Security Council agreed to a U.S.-backed resolution to censure and sanction North Korea for a rocket launch in December that breached U.N. rules.

North Korea is not believed to have the technology to deliver a nuclear warhead capable of hitting the continental United States, although its December launch showed it had the capacity to deliver a rocket that could travel 10,000 km (6,200 miles), potentially putting San Francisco in range, according to an intelligence assessment by South Korea.

"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.

North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un, who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.

China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.

Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition, with Xi Jinping due to take office in March.

China's Foreign Ministry called for calm and restraint and a return to six-party talks, but effectively singled out North Korea, urging the "relevant party" not to take any steps that would raise tensions.

"We hope the relevant party can remain calm and act and speak in a cautious and prudent way and not take any steps which may further worsen the situation," ministry spokesman Hong Lei told reporters at a regular press briefing.

North Korea has rejected proposals to restart the talks aimed at reining in its nuclear capacity. The United States, China, Russia, Japan and the two Koreas are the six parties involved.

"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.

Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.

"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.

U.S. URGES NO TEST

Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.

"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.

"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."

The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.

A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.

North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons

North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.

According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.

North Korea has not yet mastered the technology needed to make a nuclear warhead small enough for an intercontinental missile, most observers say, and needs to develop the capacity to shield any warhead from re-entry into the earth's atmosphere.

North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.

The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father, Kim Jong-il, who oversaw the country's military and nuclear programs.

The older Kim died in December 2011.

"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.

(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan and Ron Popeski)

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Cameron warns companies must 'pay fair share' of taxes

DAVOS: British Prime Minister David Cameron warned Thursday that corporations must "pay their fair share" of taxes and said he would use Britain's G8 chairmanship to counter tax avoidance.

Speaking at the World Economic Forum in Davos, Cameron said too many global businesses were abusing tax schemes, after Britain last year announced a crackdown on multinationals such as Starbucks, Google and Amazon, claiming they are avoiding huge tax bills.

"When some businesses aren't seen to pay their taxes, that is corrosive to public trust," Cameron said in a speech to the global political and business elite.

"We want to use the G8 to drive a more serious debate on tax evasion and avoidance. This is an issue whose time has come," he said.

He said Britain would use its chairmanship this year of the Group of Eight rich nations to push for cross-border action on tax avoidance.

"Clamp down in one country and the travelling caravan of lawyers, accountants and financial gurus just moves on elsewhere. So we need to act together at the G8," Cameron said.

He insisted such moves were not anti-business.

"I believe in low taxes... I'm a low-tax Conservative. But I'm not a companies-should-pay-no-tax Conservative," Cameron said. "Individuals and businesses must pay their fair share."

Britain last month announced a campaign against "tax dodgers" and "cowboy advisers" to claw back £2 billion a year, after lawmakers alleged that multinationals were involved in "immoral" avoidance of tax.

German Chancellor Angela Merkel stressed that tax evasion and fraud was also an "enormously important issue" for the Group of 20 major economies.

"Every financial instrument, every financial product, every financial market, needs to be placed under regulation," said the chancellor.

"We are very far from that and I can only call on the financial industry to support us on this because another bubble that we create would bring another crisis for the global economy, which would be very difficult to overcome," she added.

Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses, hit back saying that harmonisation of rules was not necessarily the best solution to tax fraud.

Multinationals should enter into talks with the relevant tax authorities "to obtain prior agreements for a particular initiative or investment," said Frederic Donnedieu de Vabres, the group's chairman.

"It is this, as opposed to a pursuit of harmonisation, that perhaps poses the best way forward," he added.

- AFP/jc

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BJP outwits KJP to stay afloat, for now

BANGALORE: The BJP's counter strike seems to have outwitted the B S Yeddyurappa-led Karnataka Janata Party (KJP) and put them on the defensive, at least for now.

By delaying the resignation of 13 rebel BJP MLAs loyal to Yeddyurappa, chief minister Jagadish Shettar has all but outsmarted Yeddyurappa who has been gunning for him. The BJP has not only taken the steam out of the rebels' campaign for the removal of the Shettar government, but also left KJP leaders embarrassed at the tame end likely to their resignation drama.

Rebel ministers Shobha Karandlaje and C M Udasi, who quit the Shettar ministry on Wednesday, appeared anxious the day after as the chief minister hasn't yet accepted their resignations. It's a deliberate plan by the BJP not to accept the resignations as the two ministers are likely to face the threat of being disqualified in case they defy the party whip to attend the budget session which starts on February 4.

This is also true in the case of 11 other MLAs, who are still searching for the elusive Speaker to formally submit their resignations.

Yeddyurappa mellowed down on Thursday when he realized his loyalists were running scared. "I had no intention to pull down the government. Our contention is that Shettar should not conduct any constitutional activities, including presentation of the budget. The BJP government doesn't have the moral right to continue as it had lost the majority following the resignation of two ministers and 11 other MLAs. Shettar should step down immediately to save the assembly's honour," Yeddyurappa said, trying to make amends for his earlier stand.

But he said more BJP MLAs are likely to resign and join his party. "Another BJP MLA Sunil Vallyapure will soon resign his assembly membership and join us. There are many more but I can't say how many," he added. Experts say if Yeddyurappa wants to pull down the government, he can easily do so by asking the rebel BJP MLAs to petition the governor withdrawing their support. But he can't afford to do so as he knows it can backfire as it involves the sentiments of the influential Lingayat community to which he and Shettar belong.

Playing the emotional card, Shettar on warned of a backlash, particularly in North Karnataka, if his government was toppled. "If there's an attempt to bring down a government which is giving good administration, people will not pardon us," he said in his hometown Hubli.

Governor HR Bhardwaj wrote to the assembly secretariat seeking details of the Speaker's whereabouts following a representation from rebel MLAs on Wednesday. The governor also sought tour programme details of assembly secretariat officials.

After their frantic search for the Speaker failed, rebel legislators now plan to petition the high court to seek the Speaker's presence in Bangalore. "We'll wait for two more days. If the Speaker doesn't return to Bangalore, we plan to file a habeas corpus petition in the high court," MLA Nehru Olekar said.

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Pentagon to Allow Women in Combat

Defense Secretary Leon Panetta will lift a longstanding ban on women serving in combat, according to senior defense officials.

The services have until this May to come up with a plan to implement the change, according to a Defense Department official.

That means the changes could come into effect as early as May. The services will have until January 2016 to complete the implementation of the changes.

The military services will also have until Janurary 2016 to seek waivers for certain jobs -- but those waivers will require a personal approval from the secretary of defense and will have to be based on rationales other than the direct combat exclusion rule.

The move to allow women in combat, first reported by the Associated Press, was not expected this week, although there has been a concerted effort by the Obama administration to further open up the armed forces to women.

The Joint Chiefs of Staff unanimously recommended in January to Secretary Panetta that the direct combat exclusion rule should be lifted.

"I can confirm media reports that the secretary and the chairman are expected to announce the lifting of the direct combat exclusion rule for women in the military," said a senior Defense Department official. "This policy change will initiate a process whereby the services will develop plans to implement this decision, which was made by the secretary of defense upon the recommendation of the Joint Chiefs of Staff."

Chairman of the Joint Chiefs Gen. Martin Dempsey sent Panetta a memo earlier this month entitled, "Women in Service Implementation Plan."

"The time has come to rescind the direct combat exclusion rule for women and to eliminate all unnecessary gender-based barriers to service," the memo read.

Adek Berry/AFP/Getty Images

"To implement these initiatives successfully and without sacrificing our warfighting capability or the trust of the American people, we will need time to get it right," he said in the memo, referring to the 2016 horizon.

Women have been officially prohibited from serving in combat since a 1994 rule that barred them from serving in ground combat units. That does not mean they have been immune from danger or from combat.

As Martha Raddatz reported in 2009, women have served in support positions on and off the frontlines in Iraq and Afghanistan, where war is waged on street corners and in markets, putting them at equal risk. Hundreds of thousands of women deployed with the military to those two war zones over the past decade. Hundreds have died.

READ MORE: Female Warriors Engage in Combat in Iraq, Afghanistan

Woman have been able to fly combat sorties since 1993. In 2010, the Navy allowed them on submarines. But lifting restrictions on service in frontline ground combat units will break a key barrier in the military.

READ MORE: Smooth Sailing for First Women to Serve on Navy Submarines

READ MORE: Female Fighter Pilot Breaks Gender Barriers

Panetta's decision will set a January 2016 deadline for the military service branches to argue that there are military roles that should remain closed to women.

In February 2012 the Defense Department opened up 14,500 positions to women that had previously been limited to men and lifted a rule that prohibited women from living with combat units.

Panetta also directed the services to examine ways to open more combat roles to women.

However, the ban on direct combat positions has remained in place.

Advocates for equality in the services will be pleased. On Capitol Hill today, retired Chief Master Sgt. Cindy McNally, a victim of sexual assault in the military, said placing women in combat roles would help equalize the services and actually cut down on sexual assaults, which have emerged as a major problem in the military.

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Cameron promises Britons vote on EU exit

LONDON (Reuters) - Prime Minister David Cameron promised Britons a vote on quitting the European Union, rattling London's biggest allies and some investors by raising the prospect of uncertainty and upheaval.

Cameron announced on Wednesday that the referendum would be held by the end of 2017 - provided he wins a second term - and said that while Britain did not want to retreat from the world, public disillusionment with the bloc was at "an all-time high".

"It is time for the British people to have their say. It is time for us to settle this question about Britain and Europe," Cameron said in a speech, adding that his Conservative party would campaign for the 2015 parliamentary election on a promise to renegotiate the terms of Britain's EU membership.

"When we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice to stay in the European Union on these new terms; or come out altogether. It will be an in-out referendum."

A referendum would mark the second time British voters have had a direct say on the issue. In 1975, they decided by a wide margin to stay in, two years after the country had joined.

Most recent opinion polls have shown a slim majority would vote to leave amid bitter disenchantment, fanned by a hostile press, about the EU's perceived influence on the British way of life. However, a poll this week showed a majority for staying.

Cameron's position is fraught with uncertainty. He must come from behind to win the next election, secure support from the EU's 26 other states for a new British role, and hope those countries can persuade their voters to back the changes.

He also avoided saying exactly what he would do if he failed to win concessions in Europe, as many believe is likely.

Critics, notably among business leaders worried about the effect on investment, say that for years before a vote, Britain may slip into a dangerous and damaging limbo that could leave it adrift or effectively pushed out of the EU.

The United States, a close ally, is also uneasy about the plan, believing it will dilute Britain's international clout. President Barack Obama told Cameron last week that Washington valued "a strong UK in a strong European Union" and the White House said on Wednesday it believed Britain's membership of the EU was mutually beneficial.

Some of Britain's European partners were also anxious and told Cameron on Wednesday his strategy reflected a selfish and ignorant attitude. However, Angela Merkel, the leader of EU paymaster Germany, was quick to say she was ready to discuss Cameron's ideas.

FRENCH "NON"

French Foreign Minister Laurent Fabius was less diplomatic: "If Britain wants to leave Europe, we will roll out the red carpet," he quipped, echoing words Cameron used recently to urge France's rich to escape high taxes and move to Britain.

French President Francois Hollande repeated his refusal of special deals: "What I will say, speaking for France, and as a European, is that it isn't possible to bargain over Europe to hold this referendum," he said. "Europe must be taken as it is.

"One can have it modified in future but one cannot propose reducing or diminishing it as a condition of staying in."

Italian Prime Minister Mario Monti was more positive. He said he agreed with Cameron on the need to make the EU more innovative and welcomed the idea of a British referendum, saying he thought Britons would ultimately vote to stay in the bloc.

Billed by commentators as the most important speech of Cameron's career, his referendum promise ties him firmly to an issue that has bedeviled a generation of Conservative leaders.

In the past, he has been careful to avoid bruising partisan fights over Europe, an issue that undid the last two Conservative prime ministers, John Major and Margaret Thatcher.

His speech appeared to pacify a powerful Euroskeptic wing inside his own party, but deepen rifts with the Liberal Democrats, the junior partners in his coalition. Their leader, Deputy Prime Minister Nick Clegg, said the plan would undermine a fragile economic recovery.

Sterling fell to its lowest in nearly five months against the dollar on Wednesday as Cameron was speaking.

"BREXIT"?

Cameron said he would take back powers from Brussels, saying later in parliament that, when it came to employment, social and environmental legislation, "Europe has gone far too far".

But such a clawback - still the subject of an internal audit to identify which specific powers he should target for repatriation to London - is likely to be easier said than done.

If Cameron wins re-election but then fails to renegotiate Britain's membership of the EU, a 'Brexit' could loom.

Business leaders have warned that years of doubt over Britain's EU membership would damage the $2.5 trillion economy and cool the investment climate.

"Having a referendum creates more uncertainty and we don't need that," Martin Sorrell, chief executive of advertising giant WPP, told the World Economic Forum in Davos. "This is a political decision. This is not an economic decision.

"This isn't good news. You added another reason why people will postpone investment decisions."

Cameron has been pushed into taking such a strong position partly by the rise of the UK Independence Party, which favors complete withdrawal from the EU and has climbed to third in the opinion polls, mainly at the expense of the Conservatives.

"All he's trying to do is to kick the can down the road and to try and get UKIP off his back," said UKIP leader Nigel Farage.

Euroskeptics in Cameron's party, who have threatened to stir up trouble for the premier, were thrilled by the speech.

Conservative lawmaker Peter Bone called it "a terrific victory" that would unify 98 percent of the party. "He's the first prime minister to say he wants to bring back powers from Brussels," Bone told Reuters. "It's pretty powerful stuff".

Whether Cameron holds the referendum remains as uncertain as the Conservatives' chances of winning the election. They trail the opposition Labour party in opinion polls, and the coalition is grappling with a stagnating economy as it pushes through unpopular public spending cuts to reduce a large budget deficit.

Labour leader Ed Miliband said on Wednesday his party did not want an in-or-out referendum.

EU REFORM

Cameron said he would campaign for Britain to stay in the EU "with all my heart and soul", provided he secured the reforms he wants. He made clear the Union must become less bureaucratic and focus more on free trade.

It was riskier to maintain the status quo than to change, he said: "The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy," he said.

Asked whether, if he did not succeed in his renegotiation strategy, would recommend a vote to take Britain out, he said only: "I want to see a strong Britain in a reformed Europe.

"We have a very clear plan. We want to reset the relationship. We will hold that referendum. We will recommend that resettlement to the British people."

Cameron said the euro zone debt crisis was forcing the bloc to change and that Britain would fight to make sure new rules were fair to the 10 countries that do not use the common currency, of which Britain is the largest.

Democratic consent for the EU in Britain was now "wafer thin", he said:

"Some people say that to point this out is irresponsible, creates uncertainty for business and puts a question mark over Britain's place in the European Union. But the question mark is already there: ignoring it won't make it go away."

A YouGov opinion poll on Monday showed that more people wanted to stay in the EU than leave it, the first such result in many months. But it was unclear whether that result was a blip.

Paul Chipperfield, a 53-year-old management consultant, said he liked the strategy: "Cameron's making the right move because I don't think we've had enough debate in this country," he said.

"We should be part of the EU but the EU needs to recognize that not everybody's going to jump on the same bandwagon."

Asked after the speech whether other EU countries would agree to renegotiate Britain's membership, Cameron said he was an optimist and that there was "every chance of success".

"I don't want Britain to leave the EU," he told parliament later. "I want Britain to reform the EU."

In the 1975 referendum, just over 67 percent voted to stay inside with nearly 33 percent against.

(Additional reporting by Paul Taylor in Davos, Alexandra Hudson in Berlin, Brenda Goh in London, Jeff Mason in Washington and James Mackenzie in Rome; Editing by Guy Faulconbridge, David Stamp and Alastair Macdonald)

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'Avatar' director Cameron accused over screenplay

LOS ANGELES: A US judge ordered director James Cameron to hand over drafts of the screenplay for "Avatar" Wednesday, to lawyers for a man claiming he wrote the script on which the 3D blockbuster was based.

Eric Ryder is seeking compensation from Cameron and his production company Lightstorm Entertainment, claiming that the 2009 Oscar-nominated film is based on a story he wrote called "K.R.Z. 2068."

He filed a lawsuit in December 2011, saying he spent two years developing the story. On Wednesday Los Angeles Superior Court Judge Alan Rosenfield ordered Cameron's lawyers to turn over screenplay drafts.

"We have to be careful and sensitive about ideas and information," said the judge.

But he denied a request by Ryder's lawyers to grant access to the personal calendars of Cameron and Jon Landau, the chief operating officer of Cameron's Lightstorm Entertainment Inc.

Ryder's lawyer K. Andrew Kent said his legal team will also get access to backup tapes from computers used by Cameron.

"Avatar," about a paraplegic US marine with split loyalties after being sent to a distant world wanted for its mining potential, was seen as a breakthrough in the use of 3D technology, and has grossed more than US$2.7 billion worldwide.

- AFP/jc

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Tripura rebel leader held in Bangladesh, handed over to India

AGARTALA: All Tripura Tiger Force (ATTF) chief Ranjit Debbarma has been arrested in Bangladesh and "pushed back" to India through the Meghalaya border. The rebel leader was produced before a court in Agartala on Wednesday and was remanded in police custody.

Intelligence sources said Ranjit was arrested by Bangladesh officials in Dhaka on December 22. He was "pushed back" to India along the border with Meghalaya late on Tuesday night.

BSF officials took Ranjit into custody at the border and handed him over to Meghalaya police. Tripura police officers brought him to Agartala on Wednesday morning. Intelligence sources said Tripura police had learnt about Ranjit's arrest in the first week of January.

The sources said Biswamohan Debbarma, another top rebel leader who heads National Liberation Front of Tripura (NLFT), has also been arrested near Dhaka, but it could not be officially confirmed. The ATTF and NLFT are two major militant outfits operating in Tripura.

The sources said Ranjit was staying in Dhaka since last 20 years and was arrested when the Rapid Action Battalion had raided his house based on specific information. His arrest comes months after BSF submitted a list of militant hideouts in Bangladesh to Border Guards, Bangladesh (BGB), in Dhaka.

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Flu season fuels debate over paid sick time laws

NEW YORK (AP) — Sniffling, groggy and afraid she had caught the flu, Diana Zavala dragged herself in to work anyway for a day she felt she couldn't afford to miss.

A school speech therapist who works as an independent contractor, she doesn't have paid sick days. So the mother of two reported to work and hoped for the best — and was aching, shivering and coughing by the end of the day. She stayed home the next day, then loaded up on medicine and returned to work.

"It's a balancing act" between physical health and financial well-being, she said.

An unusually early and vigorous flu season is drawing attention to a cause that has scored victories but also hit roadblocks in recent years: mandatory paid sick leave for a third of civilian workers — more than 40 million people — who don't have it.

Supporters and opponents are particularly watching New York City, where lawmakers are weighing a sick leave proposal amid a competitive mayoral race.

Pointing to a flu outbreak that the governor has called a public health emergency, dozens of doctors, nurses, lawmakers and activists — some in surgical masks — rallied Friday on the City Hall steps to call for passage of the measure, which has awaited a City Council vote for nearly three years. Two likely mayoral contenders have also pressed the point.

The flu spike is making people more aware of the argument for sick pay, said Ellen Bravo, executive director of Family Values at Work, which promotes paid sick time initiatives around the country. "There's people who say, 'OK, I get it — you don't want your server coughing on your food,'" she said.

Advocates have cast paid sick time as both a workforce issue akin to parental leave and "living wage" laws, and a public health priority.

But to some business owners, paid sick leave is an impractical and unfair burden for small operations. Critics also say the timing is bad, given the choppy economy and the hardships inflicted by Superstorm Sandy.

Michael Sinensky, an owner of seven bars and restaurants around the city, was against the sick time proposal before Sandy. And after the storm shut down four of his restaurants for days or weeks, costing hundreds of thousands of dollars that his insurers have yet to pay, "we're in survival mode."

"We're at the point, right now, where we cannot afford additional social initiatives," said Sinensky, whose roughly 500 employees switch shifts if they can't work, an arrangement that some restaurateurs say benefits workers because paid sick time wouldn't include tips.

Employees without sick days are more likely to go to work with a contagious illness, send an ill child to school or day care and use hospital emergency rooms for care, according to a 2010 survey by the University of Chicago's National Opinion Research Center. A 2011 study in the American Journal of Public Health estimated that a lack of sick time helped spread 5 million cases of flu-like illness during the 2009 swine flu outbreak.

To be sure, many employees entitled to sick time go to work ill anyway, out of dedication or at least a desire to project it. But the work-through-it ethic is shifting somewhat amid growing awareness about spreading sickness.

"Right now, where companies' incentives lie is butting right up against this concern over people coming into the workplace, infecting others and bringing productivity of a whole company down," said John A. Challenger, CEO of employer consulting firm Challenger, Gray & Christmas.

Paid sick day requirements are often popular in polls, but only four places have them: San Francisco, Seattle, Washington, D.C., and the state of Connecticut. The specific provisions vary.

Milwaukee voters approved a sick time requirement in 2008, but the state Legislature passed a law blocking it. Philadelphia's mayor vetoed a sick leave measure in 2011; lawmakers have since instituted a sick time requirement for businesses with city contracts. Voters rejected a paid sick day measure in Denver in 2011.

In New York, City Councilwoman Gale Brewer's proposal would require up to five paid sick days a year at businesses with at least five employees. It wouldn't include independent contractors, such as Zavala, who supports the idea nonetheless.

The idea boasts such supporters as feminist Gloria Steinem and "Sex and the City" actress Cynthia Nixon, as well as a majority of City Council members and a coalition of unions, women's groups and public health advocates. But it also faces influential opponents, including business groups, Mayor Michael Bloomberg and City Council Speaker Christine Quinn, who has virtually complete control over what matters come to a vote.

Quinn, who is expected to run for mayor, said she considers paid sick leave a worthy goal but doesn't think it would be wise to implement it in a sluggish economy. Two of her likely opponents, Public Advocate Bill de Blasio and Comptroller John Liu, have reiterated calls for paid sick leave in light of the flu season.

While the debate plays out, Emilio Palaguachi is recovering from the flu and looking for a job. The father of four was abruptly fired without explanation earlier this month from his job at a deli after taking a day off to go to a doctor, he said. His former employer couldn't be reached by telephone.

"I needed work," Palaguachi said after Friday's City Hall rally, but "I needed to see the doctor because I'm sick."

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Associated Press writer Susan Haigh in Hartford, Conn., contributed to this report.

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Follow Jennifer Peltz at http://twitter.com/jennpeltz

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Left Turn? Obama Speech Invigorates Progressives

A presidential campaign that was largely about jobs and the economy gave way during Monday's inaugural ceremonies to a sweeping affirmation of progressivism and call for "collective action."

Now, liberal allies of President Obama say they're closely watching to see whether the second-term president follows through on issues with which he has struggled before.

Obama's groundbreaking references to climate change and gay rights in his second inaugural address particularly surprised many progressive interest groups, which said their first-term frustrations have been replaced by a new sense of optimism.

"We are hopeful that the president's progressive speech signals a major strategy shift for the Obama administration," said Adam Green, co-founder of the Progressive Change Campaign Committee.

Green's group and other liberal Democrats have openly expressed disappointment in Obama since 2009, saying his agenda has fallen short. Many have cited his failure to advance an assault-weapons ban, as promised, enact climate change legislation or overhaul the nation's immigration system.

J. Scott Applewhite/AP Photo

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Other progressives have chafed at Obama's extension of the Bush-era tax cuts for the wealthy in 2010 and move last month to make some of the cuts permanent, while putting changes to Social Security and Medicare on the table as part of a deficit-reduction deal.

During the election campaign, Obama ran no paid TV advertising that mentioned gays or gay rights, or the term "climate change," for example. Only four of his ads mentioned environmental issues, and two explicitly portrayed Obama as a defender of the coal industry, something anathema to many environmentalists.

"If the president's inaugural words and action on guns are the template for his governing strategy in a second term, that will allow the president to win big victories and secure a legacy of bold progressive change," Green said, responding to Obama's inaugural address.

In interviews with ABC News, advocates stressed that success on many liberal priorities remains a big "if," with a politically divided Congress and a record of failure by the White House to bridge the divide.

On the environment, activists say they are most closely watching the president's upcoming decision on the proposed Keystone XL Pipeline project, which would carry oil from the tar sands of Alberta to the U.S. Gulf Coast.

Obama delayed a decision on the project in January 2012, ordering a new environmental-impact study. But with that study nearing completion, he will be forced to weigh in on an issue that has pitted a need for jobs and cheaper energy with environmental and health concerns.

"The decision on the Keystone XL pipeline will be the first indicator about how seriously he's taking climate change over the next four years," said Erich Pica, president of Friends of the Earth, an environmental advocacy group opposed to the pipeline. "We'll know in the next month and a half to two months whether he does."

Bill McKibben, an author and leading environmentalist, said in a blog post that he is not holding his breath. "With words like that, it's easy to let ourselves dream that something major might be about to happen to fix the biggest problem the world has ever faced," he wrote.
"And given the record of the last four years, we know that too often rhetoric has yielded little in the way of results."

McKibben is organizing a major environmental rally in Washington on Feb. 17.

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Netanyahu claims election win despite losses

JERUSALEM (Reuters) - Hawkish Prime Minister Benjamin Netanyahu emerged the bruised winner of Israel's election on Tuesday, claiming victory despite unexpected losses to resurgent center-left challengers.

Exit polls showed the Israeli leader's Likud party, yoked with the ultra-nationalist Yisrael Beitenu group, would still be the biggest bloc in the 120-member assembly with 31 seats, 11 fewer than the 42 they held in the previous parliament.

If the exit polls compiled by three local broadcasters prove correct - and they normally do in Israel - Netanyahu would be on course for a third term in office, perhaps leading a hardline coalition that would promote Jewish settlement on occupied land.

But his weakened showing in an election he himself called earlier than necessary could complicate the struggle to forge an alliance with a stable majority in parliament.

The 63-year-old Israeli leader promised during his election campaign to focus on tackling Iran's nuclear ambitions if he won, shunting Palestinian peacemaking well down the agenda despite Western concern to keep the quest for a solution alive.

The projections showed right-wing parties with a combined strength of 61-62 seats against 58-59 for the center-left.

"According to the exit poll results, it is clear that Israel's citizens have decided that they want me to continue in the job of prime minister of Israel and to form as broad a government as possible," Netanyahu wrote on his Facebook page.

The centrist Yesh Atid (There is a Future) party, led by former television talk show host Yair Lapid, came second with 18 or 19 seats, exit polls showed - a stunning result for a newcomer to politics in a field of 32 contending parties.

Lapid won support amongst middle-class, secular voters by promising to resolve a growing housing shortage, abolish military draft exemptions for Jewish seminary students and seek an overhaul of the failing education system.

The once dominant Labour party led by Shelly Yachimovich was projected to take third place with 17 seats.

"YESH ATID SWEEP"

The mood was subdued at Netanyahu's Likud party election headquarters after the polls closed, with only a few hundred supporters in a venue that could house thousands.

"We anticipated we would lose some votes to Lapid, but not to this extent. This was a Yesh Atid sweep," Likud campaign adviser Ronen Moshe told Reuters.

A prominent Likud lawmaker, Danny Danon, told CNN: "We will reach out to everybody who is willing to join our government, mainly the center party of Yair Lapid."

If the prime minister can tempt Lapid to join a coalition, the ultra-Orthodox religious parties who often hold the balance of power in parliament might lose some of their leverage.

After a lacklustre campaign, Israelis voted in droves on a sunny winter day, registering a turnout of 66.6 percent, the highest since 2003. That buoyed center-left parties which had pinned their hopes on energizing an army of undecided voters against Netanyahu and his nationalist-religious allies.

Opinion polls before the election had predicted an easy win for Netanyahu, although the last ones suggested he would lose some votes to the Jewish Home party, which opposes a Palestinian state and advocates annexing chunks of the occupied West Bank.

The exit polls projected 12 seats for Jewish Home.

Full election results are due by Wednesday morning and official ones will be announced on January 30. After that, President Shimon Peres is likely to ask Netanyahu, as leader of the biggest bloc in parliament, to try to form a government.

The former commando has traditionally looked to religious, conservative parties for backing and is widely expected to seek out self-made millionaire Naftali Bennett, who heads the Jewish Home party and stole much of the limelight during the campaign.

But Netanyahu might, as Danon suggested, try to include more moderate parties to assuage Western concerns about Israel's increasingly hardline approach to the Palestinians.

WESTERN ANXIETY

British Foreign Secretary William Hague warned Israel on Tuesday it was losing international support, saying prospects for a two-state solution to the Israeli-Palestinian conflict were almost dead because of expanding Jewish settlements.

U.S.-brokered peace talks broke down in 2010 amid mutual acrimony. Since then Israel has accelerated construction in the West Bank and east Jerusalem - land the Palestinians want for their future state - much to the anger of Western partners.

Netanyahu's relations with U.S. President Barack Obama have been notably tense and Martin Indyk, a former U.S. ambassador to Israel, told the BBC the election was unlikely to change that.

"President Obama doesn't have high expectations that there's going to be a government in Israel committed to making peace and is capable of the kind of very difficult and painful concessions that would be needed to achieve a two-state solution," he said.

Tuesday's vote is the first in Israel since Arab uprisings swept the region two years ago, reshaping the Middle East.

Netanyahu, who had a first term as premier in the late 1990s, has said the turbulence, which has brought Islamist governments to power in several countries long ruled by secularist autocrats, including neighboring Egypt, shows the importance of strengthening national security.

He views Iran's nuclear program as a mortal threat to the Jewish state and has vowed not to let Tehran enrich enough uranium to make a single nuclear bomb - a threshold Israeli experts say could arrive as early as mid-2013.

Iran denies it is planning to build the bomb, and says Israel, widely believed to have the only nuclear arsenal in the Middle East, is the biggest threat to the region.

The issue barely registered during the election campaign, with a poll in Haaretz newspaper on Friday saying 47 percent of Israelis thought social and economic issues were the most pressing concern, against just 10 percent who cited Iran.

One of the first problems to face the next government, which is unlikely to take power before the middle of next month at the earliest, is the stuttering economy.

Data last week showed the budget deficit rose to 4.2 percent of gross domestic product in 2012, double the original estimate, meaning spending cuts and tax hikes look certain.

(Reporting by Jerusalem bureau; Editing by Alastair Macdonald)

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