New UK defense minister appointed after scandal (AP)

LONDON – Britain's defense minister quit Friday in the face of an influence-peddling scandal focused on the role of a close friend who was present on scores of overseas trips despite having no government role

Liam Fox was replaced by Philip Hammond, 55, a veteran Conservative Party lawmaker who had been transport secretary.

Fox resigned Friday evening following days of allegations about the influence-peddling of a close personal friend who joined him on key foreign visits and posed as an unofficial aide.

The outgoing Fox became the first Conservative Party lawmaker to quit Britain's Cabinet since the country's coalition government was formed following an inconclusive election in May 2010.

Hammond, who is married with three children, is seen as a steady, reliable manager who will be charged with overseeing severe budget cuts at the defense department while managing the difficult war in Afghanistan.

Fox became cornered by questions over the policy influence of his 34-year-old friend Adam Werritty, who served as the best man at Fox's 2005 wedding and with whom he had once shared an apartment. Critics demanded to know who was funding the younger man's tours across the globe to join the minister on 18 overseas visits.

Questions were also raised about whether Werritty was representing groups interested in building ties with Fox to gain defense contracts, or seeking to curry favor with the British defense establishment.

Fox, 50, had initially insisted he planned to continue in his role leading Britain's armed forces, but he was sunk by continued disclosures over Werritty's activities.

"I mistakenly allowed the distinction between my personal interest and my government activities to become blurred," Fox told Prime Minister David Cameron in his resignation letter. "The consequences of this have become clearer in recent days. I am very sorry for this."

Cameron praised Fox's work, saying he had overseen changes at the defense ministry that would ensure the armed forces were "fully equipped to meet the challenges of the modern era."

"On Libya, you played a key role in the campaign to stop people being massacred by the Gadhafi regime and instead win their freedom," Cameron wrote.

Fox also played an important role implementing controversial budget cuts throughout the military.

Though Werritty did not have an official paid role with the defense ministry, he had business cards listing him as an adviser to Fox.

Fox, who was voted in to parliament in 1992, said he had no plans to quit the House of Commons.

However, he expressed regret at leaving his position while military operations are ongoing in Afghanistan and Libya.

"I am proud also to have played a part in helping to liberate the people of Libya, and I regret that I will not see through to its conclusion Britain's role in Afghanistan, where so much progress has been made," he said.

Fox was brought up on a public housing estate in Glasgow, Scotland's largest city and studied medicine at the University of Glasgow, where he became involved in politics.

Though he married his long term girlfriend Dr. Jesme Baird in 2005, he had been the frequent subject of speculation over his sexual orientation.

Critics further pressed Fox on the relationship with Werritty after he disclosed on Monday they had met 40 times since May 2010, including on business trips and family holidays overseas.

Werritty had previously worked for Fox's Atlantic Bridge organization, a now defunct charity that promoted hawkish foreign policy views and sought to become a forum for neo-conservatives in London and Washington.

Fox, who contended for the Conservative Party leadership but came in third in a contest won by Cameron in 2005, was closely allied to Margaret Thatcher, a patron of his charity. The ex-prime minister attended his 50th birthday party last month, though she is now 86 and usually too weak to go out in public.

The departed defense minister was known for favoring closer ties to the United States and had alienated some in his party with his views.

Main opposition Labour Party lawmaker Jim Murphy said Fox's actions in allowing Werritty access to visits, and to arrange a meeting in Dubai with a potential supplier had breached rules governing the conduct of ministers.

Supporter Louise Mensch, a Conservative Party legislator, said Fox's exit was regrettable.

"He was an outstanding Secretary of State for defense and a completely dedicated minister," she wrote on Twitter.

Britain's top civil servant is continuing an inquiry aimed at determining whether Fox breached rules, and whether Werritty profited personally.

Hammond is being replaced at the transport ministry by Justine Greening, a rising legislator within Prime Minister David Cameron's party.

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Associated Press Writer Meera Selva contributed to this report.

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Cypriot defense min resigns after blast kills 12 (AP)

MARI, Cyprus – A massive explosion ripped through a Cypriot naval base Monday after a brush fire detonated gunpowder stored in containers, killing 12 people, wounding 62 and prompting the resignations of the country's defense minister and top military chief.

Bodies covered with white sheets lay scattered on a charred hillside near the Evangelos Florakis Naval Base on the Mediterranean island's southern coast, while ambulances ferried the injured to hospitals in Larnaca and Limassol. The bodies of the dead where taken to a morgue at Nicosia hospital in the Cypriot capital.

The blast occurred in the early hours of the morning when a brush fire approached dozens of storage containers holding gunpowder that had been confiscated in 2009 from a ship heading from Iran to Syria.

With criticism mounting over how the material had been handled and stored, Defense Minister Costas Papacostas and the country's top military official, National Guard chief Brig. Gen. Petros Tsalikides, resigned over the incident.

Government spokesman Stefanos Stefanou said investigators had ruled out sabotage as a cause for the blast, but wouldn't elaborate further. He said experts will be called from abroad to assist police and national guard investigators to determine the exact cause of the explosion.

Greece's National Defense General Staff said it was sending "specialized military and security force personnel" to Cyprus to help with investigations following a Cypriot request.

Asked about concerns that the base commander had reportedly expressed fears over the safety of the gunpowder's storage area, Stefanou said officials convened a meeting last week at the Defense Ministry to discuss the matter followed by an onsite inspection of the storage area.

He said certain decisions were made but weren't implemented in time to prevent the incident.

Fifty of the 62 people injured had been treated and released from hospitals, Stefanou said. Two of those still hospitalized had suffered serious injuries.

President Dimitris Christofias had asked Tsalikides and Papacostas to remain in their posts until replacements were found.

Stefanou said the government has declared a three-day mourning period with all flags at public buildings flying at half staff. State funerals would be held for those killed, he said.

The concussion wave from the blast damaged houses in nearby villages, and knocked out the island's main power station, leading to power cuts in several areas. Authorities appealed to the public to limit their electricity consumption, which has spiked amid a three-day heatwave that has led to temperatures of about 40 degrees Celsius (104 Fahrenheit).

Airport authorities said both Paphos and Larnaca airports were reducing power consumption to the minimum possible and had turned on their generators.

The Agriculture Ministry also urged the public to reduce water consumption as much as possible because desalination plants had been taken offline due to power problems.

The blast occurred just one day shy of the ninth anniversary of a fatal national guard helicopter crash that killed then National Guard commander Evangelos Florakis — for which the naval base is named — and four other officers.

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New defense chief Panetta in Iraq, to press on drawdown (Reuters)

BAGHDAD (Reuters) – Leon Panetta arrived in Iraq on Sunday on his first trip there as defense secretary, saying he would press Baghdad on the future U.S. military presence and go after militants attacking U.S. forces with Iranian rockets.

The United States is scheduled to withdraw all of its remaining 46,000 troops from Iraq by the end of this year, under the terms of a bilateral security pact -- despite U.S. and Iraqi military concerns about expected gaps in security.

Panetta, who is fresh from a trip to Afghanistan, made hopeful remarks to Congress last month that Iraq's government might eventually ask some U.S. forces to remain beyond 2011. But he was cautious in his comments to reporters in Afghanistan, just before departing for Iraq.

Asked whether he would encourage Iraq to ask some U.S. forces to stay, Panetta said: "I'll encourage them to make a decision so that we'll know where we're going."

U.S. officials say that the clock is ticking and that the longer the Iraqis wait, the more difficult it becomes for Washington to say "yes."

"Nothing is actually completely impossible. But things do become costlier and riskier" the later in the year it gets, said one senior U.S. defense official, briefing reporters on condition of anonymity.

"They could conceivably ask General Austin as the last guy in Iraq at midnight on December 31st but it would be pretty difficult for us to say 'yes'," the official said, referring to Army General Lloyd Austin, commander of U.S. forces in Iraq.

The question is a tricky one for Iraqi Prime Minister Nuri al-Maliki's Shi'ite-led coalition government. At least one key group in Maliki's fragile cross-sectarian coalition -- the political bloc of anti-American Shi'ite cleric Moqtada al-Sadr -- openly opposes a continuing U.S. military presence.

Sadr's bloc has threatened to escalate protests and even "military resistance" if U.S. troops stay on.

Another political hiccup that is worrying Washington is Baghdad's failure so far to name a defense minister -- an issue Panetta said he would raise in his talks with Maliki on Monday.

(Reporting by Phil Stewart)

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House passes $649B defense spending bill (AP)

WASHINGTON – The House on Friday overwhelmingly passed a $649 billion defense spending bill that boosts the Pentagon budget by $17 billion and covers the costs of wars in Iraq and Afghanistan.

The strong bipartisan vote was 336-87 and reflected lawmakers' intent to ensure national security, preserve defense jobs across the nation and avoid deep cuts while the country is at war.

While House Republican leaders slashed billions from all other government agencies, the Defense Department is the only one that will see a double-digit increase in its budget beginning Oct. 1.

Amid negotiations to cut spending and raise the nation's borrowing limit, the House rejected several amendments to cut the Pentagon budget, including a measure by Rep. Barney Frank, D-Mass., to halve the bill's increase in defense spending.

"We are at a time of austerity. We are at a time when the important programs, valid programs, are being cut back," Frank said.

Scoffing at the suggestion that "everything is on the table" in budget negotiations between the Obama administration and congressional leaders, Frank said, "The military budget is not on the table. The military is at the table, and it is eating everybody else's lunch."

Still, the overall bill is $9 billion less than President Barack Obama sought. The White House has threatened a veto, citing limits on the president's authority to transfer detainees from the U.S. prison at Guantanamo Bay, Cuba, and money for defense programs it didn't want.

The measure includes $119 billion for the wars in Iraq and Afghanistan.

The House also voted to slow repeal of the policy allowing gays to serve openly in the military, backing an amendment to block funds for the training manual for the Chaplain Corps on ending the so-called "don't ask, don't tell" policy.

Rep. Tim Huelskamp, R-Kan., sponsor of the amendment, said its purpose was to prohibit chaplains from performing same-sex marriages on Navy bases regardless of a state's law. The House approved the measure 236-184.

The overall bill must be reconciled with a still-to-be-completed Senate version.

The final vote came after the House turned back an amendment by Democratic Rep. Dennis Kucinich of Ohio that would have barred funds for the U.S. operation against Libya. The vote was 251-169.

The House has sent mixed signals on Obama's military action against Libya, voting to prohibit weapons and training to rebels looking to oust Moammar Gadhafi but stopping short of trying to cut off money for American participation in the NATO-led mission.

In a series of votes Thursday, Republicans and Democrats expressed their dissatisfaction with the Libya operation, now in its fourth month with no end in sight and waning support from some nations in the international coalition. The House voted to bar military aid to the rebels but moments later rejected efforts to prevent funding for the limited U.S. mission.

The votes mirrored the contradictory actions of the House last month, when lawmakers refused to approve the operation but declined to cut off the money.

The congressional unrest over Libya stems from a stalemated civil war and Obama's contention that he didn't need congressional authorization to engage in another war on top of Afghanistan and Iraq because Libya fighting isn't full-blown hostilities. Among war-weary NATO allies, Italy announced that it was reducing its participation in the campaign by removing an aircraft carrier from the region and pulling thousands of troops home.

"Libya did not attack us. Libya did not attack NATO," Rep. Tom Cole, R-Okla., said. "However much we detest Mr. Gadhafi and his regime, we have no reason to be at war."

The House voted 225-201 for an amendment sponsored by Cole to bar the Pentagon from providing "military equipment, training or advice or other support for military activities" to an outside group, such as rebel forces, for military action in or against Libya.

Forty-eight Democrats backed the Republican-sponsored measure.

The intent of the measure was to prohibit aid to the rebels such as weapons and assistance to their Transitional National Council, including operational planning. The broad effort also would target contractors in Libya.

Obama already has authorized $25 million in nonlethal assistance to the rebels, including thousands of meals from Pentagon stocks. The U.S. also has supplied $53 million in humanitarian aid. Neither would be affected by the bill.

Moments after that vote Thursday, the House rejected a measure that would have prohibited funds for the U.S. military to continue its limited role. The vote was 229-199, with 67 Democrats breaking with the administration to support the amendment, which Kucinich cosponsored with freshman Rep. Justin Amash, R-Mich.

Lawmakers argue that Obama violated the 1973 War Powers Resolution, which requires a president to seek congressional approval within 60 days of the first military strikes, a move the commander in chief did not make.

In a reflection of congressional anger toward the administration, the House voted overwhelmingly for an amendment that prohibits spending that violates the War Powers Resolution and focuses on future military operations.

The House also rejected two other efforts to prohibit funds for the U.S. military operation in Libya.

Sen. John McCain, top Republican on the Senate Armed Services Committee, criticized the House vote on aid to the rebels, arguing that it sends the wrong message to Gadhafi and those challenging the long-time leader.

"I am saddened by the abandonment of America's traditional support for those struggling for freedom and democracy, which has been a hallmark of our Republican Party for decades," said the Arizona Republican, who traveled to Benghazi in April to meet with the rebels.

Since NATO took command of the Libya operation in early April, the U.S. role has largely been limited to support efforts such as intelligence, surveillance and electronic warfare. The U.S. has launched drone attacks and other airstrikes, flying more than 3,400 sorties.

The Senate has delayed consideration of a resolution authorizing the U.S. mission in Libya.

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