Congress settles funding fight, for now (Reuters)

WASHINGTON (Reuters) – The House of Representatives on Tuesday passed a bill that puts the government on stable financial footing for six weeks but does nothing to resolve a battle over spending that is likely to flare again.

By a bipartisan vote of 352 to 66, the House passed a bill that funds government programs at their current levels through November 18. The measure, which passed the Senate last week, now heads to President Barack Obama to sign into law.

Budget battles have paralyzed Washington several times this year, leading to two near-shutdowns and a near-default that prompted a downgrade of the country's once-sterling debt rating.

The dispute could heat up again in the coming weeks as lawmakers try to finish work on the 12 spending bills that fund everything from weather satellites to foreign aid for the current fiscal year, which started on Saturday.

Democrats and Republicans agree on the total amount of money to be spent -- $1.043 trillion -- but differ sharply about how that money should be divided up.

House Republicans unveiled a bill last week that would deny funding for several signature Obama initiatives, including his landmark healthcare overhaul and his "Race to the Top" education program. That is likely to encounter fierce resistance from Democrats who control the Senate.

Disaster aid, normally a noncontroversial issue, could be a sticking point as well.

A fund to help victims of floods, tornadoes and other disasters nearly ran dry last week as Republicans and Democrats fought over whether the extra cost should be offset with spending cuts elsewhere.

That fund was replenished with $2.65 billion on Saturday, but the Federal Emergency Management Agency will likely have to ask Congress for more money in the coming months to help people affected by one of the most extreme years for weather in U.S. history.

The repeated brinkmanship has unnerved investors and consumers as the economy faces a renewed threat of recession. That uncertainty is likely to last through the end of the year, according to one analyst.

"The disaster aid fight demonstrated how delicate the process is an how little it takes to throw it off kilter," said Jim Dyer, a former Republican staff director for the House Appropriations Committee. "I think the threat of a shutdown is always there because we have so many people with strong positions."

(Editing by Vicki Allen)

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Gadhafi vows to fight as loyalists strike oil hub (AP)

By RYAN LUCAS and HADEEL AL-SHALCHI, Associated Press Ryan Lucas And Hadeel Al-shalchi, Associated Press – 1?hr?11?mins?ago

TRIPOLI, Libya – Fugitive leader Moammar Gadhafi accused revolutionary forces of surrendering Libya to foreign influence and vowed to press ahead with his resistance in a message Monday issued just hours after a twin attack on a key oil facility by loyalist fighters. At least 15 attackers were killed, an anti-Gadhafi commander said.

"We will not be ruled after we were the masters," said the brief statement attributed to Gadhafi that was read on Syria's Al-Rai TV by its owner Mishan al-Jabouri, a former Iraqi lawmaker and Gadhafi supporter.

The message described the opposition forces as "traitors" who are willing to turn over Libya's oil riches to foreign interests.

"We will not hand Libya to colonialism, once again, as the traitors want," said the statement, which pledged to fight against the "coup."

The firebrand words by Gadhafi contrast sharply with the staggering losses for his regime in recent weeks, including being driven from the capital Tripoli and left with only a handful of strongholds that are surrounded by former rebel forces.

Gadhafi's whereabouts are unknown, but his followers claim he is still in Libya. Some of his family members have fled to neighboring Niger, most recently his son al-Saadi.

Although Gadhafi's opponents now hold sway over most of Libya — and remain backed by NATO airstrikes — there are signs that the Libyan strongman's backers can still strike back.

At the important oil terminal at Ras Lanouf, suspected loyalist staged back-to-back attacks that began with saboteurs setting fires and then shifted to a convoy of gunmen riding in from the desert.

Col. Hamid al-Hasi, the commander for anti-Gadhafi forces in eastern Libya, said a group of 15 employees set fire to the facility, located on the Mediterranean coast about 380 miles (615 kilometers) southeast of Tripoli. He said five of the saboteurs were killed and the rest arrested.

In a possibly coordinated attack, the port was then targeted by a convoy of armed men apparently based in a refugee camp about 18 miles (30 kilometers) south of Ras Lanouf. One revolutionary commander, Fadl-Allah Haroun, said a total of 15 people were killed in both attacks.

The size of the ground assault force was unclear, but Haroun said it may have been as big as 40 vehicles.

Former rebels, meanwhile, have been facing stiff resistance from Gadhafi supporters in Bani Walid since last week and have captured most of the northern half of the town, which is one of three significant remaining bastions of Gadhafi's loyalists.

Mubarak al-Saleh, an opposition political envoy from Bani Walid, claimed Gadhafi's son Seif al-Islam is leading loyalist forces massed in the town, about 90 miles (140 kilometers) southeast of Tripoli.

"The forces are not from Bani Walid but from all over Libya," he said. "We lost many people in the battle."

Dozens of cars loaded with Libyan families and personal belongings streamed out of the town in anticipation of a fresh assault.

"The fighting will be very bad," said Fadila Salim as she drove out of Bani Walid. Her husband, Mohammed Ibrahim, said there is no electricity, no water and shops are running out of food. He says many are "stuck in their houses and afraid to leave."

Khairiyah al-Mahdi, a 40-year-old housewife, was fleeing the town along with her husband, six daughters and two sons.

She said her house was among the first to fly the revolution's tricolor flag when Libyan fighters pushed into Bani Walid over the weekend. But deteriorating living conditions, threats from Gadhafi supporters and heavy clashes in the town prompted her family to flee.

"We left Bani Walid because Gadhafi loyalists in control of the local radio announced through airwaves that anyone helping the rebels or part of them will be killed," she said. "A lot of people are scared and now leaving."

The main battle front in Bani Walid is now a bridge that links the town with the port city of Misrata to the northwest. Gadhafi loyalists have covered the pavement with oil slicks and fuel spills to hinder vehicles trying to cross into the city center.

A rebel commander, Abu Ouejeila al-Hbeishi, said Gadhafi snipers have taken up positions on roof tops, including on a hotel, an ancient castle and an administrative building in the town center. Loyalist forces also fired Grad rockets and mortars at revolutionary fighters on the northern edge of Bani Walid, where al-Hawaishi said some 2,000 former rebels have gathered.

NATO, which has played a key role in crippling Gadhafi's military forces since intervening in Libya's civil war in late March, has kept up its attacks on remaining pro-Gadhafi sites. The military alliance said its warplanes hit targets Sunday in Gadhafi's hometown of Sirte, including a military logistics facility and three surface-to-air missile systems.

The Misrata Military Council said clashes inside Sirte between Gadhafi loyalists and opposition backers has left at least three people dead.

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Al-Shalchi reported from Wadi Dinar, Libya.

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Poll: OK to trade some freedoms to fight terrorism (AP)

By NANCY BENAC and JENNIFER AGIESTA, Associated Press Nancy Benac And Jennifer Agiesta, Associated Press – 1?hr?10?mins?ago

WASHINGTON – Surveillance cameras in public places? Sure. Body scans at airports? Maybe. Snooping in personal email? Not so fast.

The same Americans who are increasingly splashing their personal lives across Facebook and Twitter trace a meandering path when asked where the government should draw the line between protecting civil liberties and pursuing terrorism.

Ten years after the 9/11 attacks led to amped-up government surveillance efforts, two-thirds of Americans say it's fitting to sacrifice some privacy and freedoms in the fight against terrorism, according to a poll by The Associated Press-NORC Center for Public Affairs Research.

A slim majority — 54 percent — say that if they had to choose between preserving their rights and freedoms and protecting people from terrorists, they'd come down on the side of civil liberties. The public is particularly protective of the privacy of U.S. citizens, voicing sharp opposition to government surveillance of Americans' emails and phone calls.

For some Americans, their reluctance to give up any freedoms is a reflection of their belief that the terrorists eventually will succeed no matter what.

"If somebody wants to do something, they'll find a way," says David Barker, a retired high school teacher from Wynne, Ark., who says he's not ready to sacrifice any freedoms in return for more security.

Others worry that giving up one freedom will lead to the loss of others.

"It's like opening a crack in the door, and then the door is opened wide," says Keri Jean, a homemaker from Elk Ridge, Utah.

The poll asked people to grapple with some of same quandaries that the government and the courts have been wrestling with over the past decade, and even before the 2001 terrorist attacks. And it turns out that policymakers, too, have drawn a zigzag line as they make tradeoffs between aggressively pursuing potential terrorists and preserving privacy and civil liberties.

Two-thirds of those surveyed believe the resulting policies are a mish-mash created in reaction to events as they occur rather than clearly planned.

Consider the rules on government interception of email: Sometimes that's legal and sometimes it's not. It depends on how old the email is, whether it's already been opened by the recipient, whether the sender and recipient are within the U.S., and which federal appellate court considers the question. Sometimes investigators need a warrant and sometimes no court approval is necessary.

The AP-NORC poll found that about half of those surveyed felt that they have indeed lost some of their own personal freedoms to fight terrorism. Was it worth it? Close to half of those who thought they'd lost freedoms doubted it was necessary.

Overall, six in 10 say the government is doing enough to protect Americans' rights and freedoms as it fights terrorism. But people may not even be aware of what they've given up. The extent of government eavesdropping and surveillance is something of a mystery.

There have been recent efforts in Congress — unsuccessful so far — to require the Justice Department to estimate how many people in the U.S. have had their calls and email monitored under a 2008 law that gave the government more surveillance authority. And a recent AP investigation revealed the existence of a secret police unit in New York that monitored daily life inside Muslim communities.

Transportation Security Administration chief John Pistole, in a speech Tuesday at the Center for Strategic & International Studies, took note of the challenge of providing security without trampling on civil liberties, saying: "We have to make sure we're doing everything we can, while respecting privacy and civil liberties — there's a lot of debate about that — as to ensuring that another 9/11 doesn't happen."

For all of their concern about protecting personal rights, Americans — just like policymakers and the courts — show far more willingness to allow intrusions into the lives of foreigners than into their own.

While 47 percent of Americans support allowing the government to read emails sent between people outside the United States without a warrant, just 30 percent supported similar monitoring of emails sent between people inside the country, for example. And while nearly half supported government eavesdropping on phone calls between people outside the country without a warrant, only a quarter favored such surveillance of calls inside the U.S.

"Countries have become bound with political correctness and I think need to be a little more strict," says Jean, despite her warnings about surrendering more freedoms. "Stop being afraid to offend others."

The government can listen in on telephone calls made by foreigners outside the United States without a warrant, but government investigators are generally required to obtain orders signed by judges to eavesdrop on domestic phone calls and other electronic communications within the U.S. The rules are more complex for cross-border communication between foreigners and Americans.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, which focuses on privacy and civil liberties, says Americans were surprisingly willing to accept new surveillance techniques in the years after the 9/11 attacks, but the pendulum now appears to be swinging somewhat in the other direction.

"People are just not quite willing to accept these tradeoffs, particularly when they are ineffective," he says.

The U.S. effort to combat terrorism receives mixed reviews: Just 36 percent say it's been extremely or very effective, 49 percent say moderately so.

About a third of Americans are concerned that they or their family will be victims of a terrorist attack, and 37 percent believe the area where they live is at least at moderate risk of being attacked.

Susan Davis, a medical transcriptionist from Springfield, Mo., answers for many Americans when asked whether sacrificing some freedom is warranted in order for the government to provide more security.

"Yeah," she says, "as long as they don't go too far with it."

But everyone has their own definition of what's too far.

The poll found that Americans have different comfort levels with various scenarios in pursuing potential terrorist activity. For example:

_71 percent favor surveillance cameras in public places to watch for suspicious activity.

_58 percent favor random searches involving full-body scans or pat-downs of airplane passengers.

_55 percent favor government analysis of financial transactions processed by U.S. banks without a warrant.

_47 percent favor requiring all people in the U.S. to carry a national ID card and provide it to authorities upon demand.

_35 percent favor racial or ethnic profiling to decide who should get tougher screening at airports.

The first three scenarios already are legal; the latter two are not.

The poll turned up sharp divisions among Americans on whether torture — banned by the government — should have any place in combating terrorism.

Fifty-two percent said torture can be justified at least sometimes to obtain information about terrorist activity. Forty-six percent said it can never or only rarely be justified.

The AP-NORC poll was conducted July 28 to Aug. 15. It involved landline and cell phone interviews with 1,087 adults nationwide, and has a margin of sampling error of plus or minus 4.1 percentage points.

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Associated Press writer Stacy Anderson, Polling Director Trevor Tompson and News Survey Specialist Dennis Junius contributed to this report.

___

Online:

www.apnorc.org

___

Benac can be reached at http://twitter.com/nbenac. Agiesta can be reached at http://twitter.com/JennAgiesta.

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Arrest warrants issued for LSU players over fight (AP)

BATON ROUGE, La. – Police obtained arrest warrants Friday for LSU quarterback Jordan Jefferson and a teammate, Joshua Johns, on charges of second-degree battery for a bar fight that injured four people last week, and the players have been suspended indefinitely by the school.

Baton Rouge police Sgt. Don Stone said investigators have contacted the players' attorney, Nathan Fisher, and LSU coach Les Miles, and asked for the players to turn themselves in.

Jefferson and Johns, a linebacker, face felony charges for their alleged roles in a fight outside Shady's bar in Baton Rouge on Aug. 19.

"We will continue to cooperate with the authorities in an effort to find out exactly what took place during the incident," Miles said. "As sad as this incident is, it's important that we learn from this and that we take away a valuable lesson. This has weighed on all of us. It's time for us to come together as a team and focus on what we are here to do."

A police report says a 19-year-old woman named Victoria Long said she witnessed several LSU players beating one of the alleged victims and saw Jefferson kick that man in the face.

Four people were treated and released at a hospital in the hours after the fight, and police have said one person had three fractured vertebrae, injuries serious enough to warrant felony charges.

Two witnesses who work at the bar told The Associated Press that the players did not throw the first punch, but added that once the melee began, it was difficult to see who hit whom, and could not verify the extent to which Jefferson and Johns were involved.

Shady's door manager Jordan Neldare, who said he witnessed the fight, said he noticed that Jefferson removed himself from the brawl before it was over, and was standing alone near the bar's entrance, looking upset.

Police have identified Jefferson, Johns, offensive lineman Chris Davenport, and receiver Jarvis Landry as people of interest in the fight.

The four players, who each were interviewed by investigators Tuesday, have hired defense attorney Nathan Fisher, who did not immediately return a phone call seeking comment on the arrest warrants.

On Wednesday, police executed a search warrant of Jefferson's apartment and took 49 pairs of shoes, along with a DNA swab.

Under team orders, LSU players have not discussed the fight publicly since it happened.

Fourth-ranked LSU opens its season Sept. 3 against No. 3 Oregon in Dallas. Although Johns is a reserve, Jefferson was expected to start.

Now fellow senior Jarrett Lee is the likely starter, with sophomore Zach Mettenberger, a junior college transfer, next in line.

Jefferson, a senior, guided LSU to an 11-2 record last season. He is 20-7 as a starter, but the team ranked last in passing in the Southeastern Conference last season, with 155.6 yards per game.

Still, LSU has numerous key players returning and was expected to compete for Southeastern Conference and national championships this season.

The team's success now will ride on how the players are able to regroup from a series of setbacks this offseason, one of which occurred Thursday when LSU suspended starting wide receiver Russell Shepard for violating school and NCAA codes that pertain to discussing NCAA inquiries with teammates who are also scheduled to be interviewed on the same matter.

LSU plans to apply for Shepard's reinstatement, but it is unclear how long that will take. The receiver will miss at least the opener and possibly more games.

Shepard had been interviewed about the NCAA's ongoing investigation into the relationship that scouting services provider and purported street agent Willie Lyles has had with a number of college football programs, including both LSU and Oregon.

Earlier this summer, Steve Kragthorpe, who was hired after last season as the Tigers' new offensive coordinator, announced he had Parkinson's disease. He has remained on staff as quarterbacks coach, but relinquished offensive coordinator duties. Miles has since promoted offensive line coach Greg Studrawa to fill that void.

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Gaddafi to "fight to end" as rebels seize HQ (Reuters)

TRIPOLI (Reuters) – Triumphant rebels seized Muammar Gaddafi's compound in Tripoli on Tuesday after a fierce battle with a loyalist rearguard but there was no word on the fate of the Libyan leader who vowed again to fight "to the end."

Reuters journalists watched rebel fighters stream through the sprawling Bab al-Aziziya headquarters compound, firing in the air in celebration after hours of heavy clashes. But it was unclear whether the "Brother Leader" or his sons were still somewhere in the complex's maze of buildings and bunkers.

Defensive fire died away and hundreds of jubilant rebels poured in. Some smashed a statue of Gaddafi. Others hunted through dozens of buildings, unchallenged, seizing weaponry and vehicles. The rebels' envoy to the United Nations said the area was "totally in the hands of the revolutionaries."

One man shouted: "It's over. Gaddafi is finished."

The Russian head of the World Chess Federation, who visited Gaddafi in Tripoli in June, said he had received a call from him on Tuesday afternoon in which Gaddafi said he was still in the capital. He "is in Tripoli, he is alive and healthy and is prepared to fight to the end," Kirsan Ilyumzhinov told Reuters.

The rebels' envoy in Rome, Hafed Gaddur, said: "It seems clear that he is confined to his bunker complex."

"We thought Tripoli would be liberated in one month or perhaps even two months, instead that happened in just a few hours, a day, so we've made great progress," he told Reuters.

Western governments, which have backed disparate opposition groups, said they could not be sure where the 69-year-old leader was but urged him to surrender after six months of civil war which have put an end to his four decades of absolute power.

French President Nicolas Sarkozy said after speaking to U.S. President Barack Obama that the end of Gaddafi's rule was "inevitable and near."

NATO, which declined to confirm reports that its air forces bombed Gaddafi's compound to aid the rebels, said Gaddafi's whereabouts were unclear but no longer a major concern.

In Washington, a Pentagon spokesman said he believed Gaddafi was still in Libya and that his forces remained a threat. He also said the United States was monitoring chemical weapons sites in Libya, amid worries that groups hostile to Western interests could try to seize stocks once built up by Gaddafi.

SWIFT END SOUGHT

Western leaders are anxious for a rapid end to fighting -- tensions among rebels are a concern for those hoping for a swift return of order and a reopening of Libyan oil exports.

"We hope this is over soon," said an unemployed engineer watching events near Gaddafi's compound. "I fear that the violence will continue until Gaddafi and his family have left the country," he added, giving his name only as Omar.

Another bystander said: "Gaddafi is finished, even if some snipers and mercenaries are still resisting. But there is no doubt that we are free and Gaddafi is finished."

There are growing concerns for civilians in the city, after days of siege and fighting in which officials have suggested hundreds of combatants may have been killed or wounded.

At a private house several miles from the center, wounded from the fighting were being treated, to the sound of gunfire.

"We need medication and stretchers, this situation is a disaster," medical student Shuaib Rais told Reuters.

CREDIBILITY

Speaking after Gaddafi's son and long-time heir-apparent Saif al-Islam confounded rebel claims of his capture by appearing to journalists at the Bab al-Aziziya compound early on Tuesday, several analysts said the credibility of the disparate opposition movement had suffered a serious setback.

Though the credibility of Saif al-Islam's claims that his father's supporters were winning the war was also threadbare, confusion among the rebels, who seemed to have allowed two of Gaddafi's sons to escape on Monday, embarrassed their backers.

Noman Benotman, senior analyst at Britain's Quilliam think tank and an associate of Gaddafi's former spy chief, said: "Gaddafi is banking on the rebels making a mess of Tripoli and causing chaos. He is relying on them to behave badly.

"They want rival militia zones to start springing up ... That's why it's critical for the rebels to get their act together."

Residents, many of whom had taken to the streets on Sunday to celebrate the end of Gaddafi's 42-year rule, stayed indoors as the irregular rebel armies that swept the capital ran into resistance from sharpshooters, tanks and other heavy weaponry.

DIVISIONS

The lack of clear control, however, has revived concerns the sprawling, thinly populated desert state could fall into the kind of instability that has beset Iraq since Saddam Hussein's overthrow. Gaddafi loyalists and anti-Western Islamists could exploit Libya's ethnic, tribal and political divisions.

Rebel officials say they have a force ready to impose order in the capital, as they have generally done in parts of the country they have taken since February. But it is not yet clear how they will handle traditional east-west divisions if they consolidate their grip on the country.

The uncharacteristically efficient rebel advance into the capital, coordinated with an uprising inside the city, seemed evidence to some analysts of the military advice and training Western and some Arab powers, including Qatar, have provided.

Many assume special forces are also active on the ground.

Outside powers, including U.S. President Obama, have been at pains to characterize the revolt against Gaddafi as quite different from the Western assault on Saddam, saying it is a home-grown uprising inspired by other Arab protest movements that overthrew Western-backed autocrats in Tunisia and Egypt.

Aid, some of it in the form of Libyan state funds seized from accounts controlled by Gaddafi, and advice will be plentiful, foreign governments assured the rebel leadership in Benghazi as it contemplates moving to Tripoli.

But all have ruled out sending in ground troops to bolster a new government which faces considerable difficulties in setting up a new administration given Gaddafi's four-decade reliance on informal governance and a personality cult.

"We've sought to learn the lessons of the failures of Iraq, which have very much influenced our thinking -- trying to make sure we don't make the same mistakes again," said British International Development Secretary Andrew Mitchell.

(Reporting by Missy Ryan, Peter Graff, Ulf Laessing, Zohra Bensemra and Leon Malherbe in Tripoli, Thomas Grove in Moscow, Robert Birsel in Benghazi, William Maclean and Peter Apps in London, Hamid Ould Ahmed and Christian Lowe in Algiers, Souhail Karam in Rabat, Richard Valdmanis and Giles Elgood in Tunis, Laura MacInnis and Alister Bull in Oak Bluffs, Mass., Nour Merza in Dubai, Deepa Babington in Rome and Alexandria Sage in Paris; Writing by Alastair Macdonald; Editing by Elizabeth Fullerton)

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U.S. "hikers'" lawyer to fight Iran spy sentence (Reuters)

TEHRAN (Reuters) – The lawyer for two Americans convicted of spying in Iran said Sunday he would appeal their eight-year sentence, which shocked their families who had hoped to see them freed after more than two years already spent in Tehran's most notorious jail.

Shane Bauer and Josh Fattal were arrested on the border with Iraq in 2009 where they said they were hiking. They were found guilty of illegal entry and espionage, a verdict likely to further strain Iran's already poor relations with Washington.

"We have 20 days to appeal and I will try my best to use all legal means to annul the sentence," lawyer Masoud Shafiee told Reuters.

"It was my belief, and still is, that they are innocent and I have not seen any evidence that shows they are guilty."

Bauer, 28, and Fattal, 29, share a cell in Tehran's Evin prison. They had pleaded not guilty to the charges at their closed-door trial which ended on July 31.

"Josh and Shane were informed about the verdict yesterday," Shafiee said, adding that he had not seen them in person. The two years they had already served would count toward their 8-year sentences, he said.

They were arrested on July 31, 2009 near Iran's border with Iraq, along with Bauer's girlfriend, Sarah Shourd, 32, who was released on $500,000 bail in September and returned home to California where she has been campaigning for their freedom.

Confirming a leaked report of the sentence, Tehran Prosecutor-General Abbas Jafari Dolatabadi told a news conference that no verdict had yet been passed on Shourd who did not return to Iran to stand trial.

TENSIONS

The "hikers" affair has heightened tensions between Tehran and Washington, which cut diplomatic ties after the storming of the U.S. embassy in the wake of the 1979 Islamic Revolution.

Several prominent public figures including boxer Muhammad Ali and singer Yusuf Islam, both Western converts to the Muslim faith, have called for their release.

The verdict was announced as Russia launches a fresh attempt to find a diplomatic solution to a standoff over Tehran's nuclear program, which Washington says is aimed at making atomic bombs, something Iran denies.

A Facebook page called "Free the Hikers" brimmed with comments expressing shock and disgust at the ruling, and offering prayers for the jailed men.

According to the Facebook page, Fattal was visiting Bauer and Shourd in the Syrian capital Damascus where Bauer was working as a freelance journalist when they decided to hike in the mountains of neighboring Iraq.

If they crossed the unmarked border into Iran, it was by mistake, they have said.

Their trial took place behind closed doors and the evidence against them has not been made public.

In a filmed interview posted on the website freethehikers.org, Shourd said that after two initial months of interrogations her questioner told her their case was on hold as it was "political" and that she was caught in a "tug of war between two countries."

Media speculated that Bauer and Fattal could be freed as a goodwill gesture during the Muslim holy month of Ramadan which began on August 1 and will end toward the end of this week on a day that has yet to be announced by religious authorities.

Previously, Iranian officials had suggested the Americans might be swapped for Iranians jailed in the United States, an option rejected by U.S. Secretary of State Hillary Clinton.

The semi-official Fars news agency reported that the family of an Iranian woman whose detention in the United States has been highlighted by some media as an example of unfair U.S. treatment of Iranians will fly to visit her Wednesday.

Shahrazad Mir Gholikhan, was sentenced in March 2009 to more than five years in prison for brokering a deal to send night-vision goggles to Iran in violation of a U.S. embargo.

(Writing by Robin Pomeroy)

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Assad says Syria won't stop fight against "terrorists" (Reuters)

AMMAN (Reuters) – Syrian President Bashar al-Assad said on Tuesday his forces would continue to pursue "terrorist groups," after Turkey pressed him to end a military assault aimed at crushing protests against his rule.

Syria "will not relent in pursuing the terrorist groups in order to protect the stability of the country and the security of the citizens," state news agency SANA quoted Assad as telling Turkish Foreign Minister Ahmet Davutoglu.

"But (Syria) is also determined to continue reforms ... and is open to any help offered by friendly and brotherly states."

While the two men held talks in Damascus, Syrian forces killed at least 30 people and moved into a town near the Turkish border, an activist group said.

The National Organization for Human Rights said most of the fatalities occurred when troops backed by tanks and armored vehicles overran villages north of Hama, while four were killed in Binnish, 30 km (20 miles) from the border with Turkey.

Despite growing international condemnation, including a sudden wave of Arab criticism, Assad's forces also pursued an offensive in the eastern city of Deir al-Zor, residents said.

Activists say at least 1,600 civilians have died since the uprising against Assad erupted in March, making it one of the bloodiest of the upheavals sweeping the Arab world.

Davutoglu held six hours of meetings with Syrian officials, including a two-hour session alone with Assad.

Neighbouring Turkey has grown increasingly critical of the violence but earned a sharp rebuke on Sunday when an Assad adviser said Syria would not accept interference in its affairs.

U.S. Secretary of State Hillary Clinton had asked Davutoglu to reinforce a demand from Washington that Syria return the army to barracks immediately and release prisoners.

Syria has faced nearly five months of protests against Assad's 11-year rule, inspired by Arab revolts which overthrew leaders in Egypt and Tunisia earlier this year.

Last week Assad sent troops and tanks to quell the mostly Sunni Muslim city of Hama in central Syria and the army launched a similar assault on Sunday against Deir al-Zor.

An armored column also pushed toward the center of the city on Tuesday, with troops storming houses and making arrests in the provincial capital of an oil region bordering Iraq's Sunni heartland, a resident said.

"They are now about one kilometer from downtown. When they finish with one district, they move to another," said the resident, who gave his name as Iyad.

GROWING ISOLATION

Turkish Prime Minister Tayyip Erdogan has described Syria's uprising as a domestic issue for Turkey, because of their 850 km (530 mile) shared border.

Increasing the pressure on Assad, Sunni Muslim power Saudi Arabia issued a blunt warning that he risked turmoil unless he stopped the bloodshed and adopted reforms. Kuwait and Bahrain followed the kingdom in recalling their ambassadors.

The withdrawal of envoys left Assad with few diplomatic friends bar Iran. Western states have imposed sanctions on his top officials, while states with close ties to Damascus such as Russia and Turkey have warned Assad he is running out of time.

Nevertheless, no country has proposed military action such as that launched against Libya's leader Muammar Gaddafi.

In Deir al-Zor, a resident said on Monday 65 people had been killed since tanks and armored vehicles barreled into the city, 400 km (250 miles) northeast of Damascus on Sunday.

The British-based Syrian Observatory of Human Rights said among the dead were a mother and her two children, an elderly woman and a girl. Syria has expelled most independent media since the revolt began, making it hard to confirm accounts.

Syrian authorities have denied that any Deir al-Zor assault took place. The official state news agency said "not a single tank has entered Deir al-Zor" and reports of tanks in the city were "the work of provocateur satellite channels."

The authorities say they have faced attacks since the protests erupted in March, blaming armed saboteurs for civilian deaths and accusing them of killing 500 security personnel.

State television broadcast footage on Sunday of mutilated bodies floating in the Orontes river in Hama, saying 17 police had been ambushed and killed in the central Syrian city.

The official SANA news agency said on Monday the military was starting to pull out of Hama after it said they had helped restore order. Residents said there were still tanks in parts of the city and security forces were making arrests.

About 1,500 people were detained in Hama's Jarajima district and troops killed three civilians, the Observatory said.

Activists say at least 130 people were killed in Hama, where Assad's father crushed an armed Islamist uprising in 1982, and one group has put the death toll at over 300.

Like most of Syria, ruled by Assad's minority Alawite family, Hama and Deir al-Zor are mainly Sunni cities, and the crackdowns there resonate with Sunnis, who form the majority in the region and govern most Arab countries.

(Additional reporting by Mariam Karouny in Beirut and Ankara bureau; Writing by Dominic Evans; Editing by Jon Hemming)

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Analysis: FAA showdown on spending presages larger fight (Reuters)

WASHINGTON (Reuters) – A deal in Congress to end a two-week standoff over U.S. aviation funding presaged a larger and more acrimonious fight over labor unions, financing air traffic modernization and other issues this fall.

The impasse over a surprising proposal to cut $16 million in government subsidies to airlines that provide service to rural communities was less about aviation and spending, and more about escalating partisan rancor and overhang from the political wildfire on raising the multitrillion-dollar U.S. debt limit.

Industry insiders, lawmakers and aviation officials all expect the divided climate in Washington to define final negotiations on a long-term legislative blueprint for FAA budgeting and aviation priorities, like modernizing the aging air traffic control system.

The previous multiyear congressional authorization for aviation programs expired in 2007, and lawmakers have struggled to negotiate a new one. Bills passed by the House and the Senate must be reconciled by a committee comprised of members from both houses.

But overshadowing negotiations, which have yet to start, is the FAA shutdown and its choppy political wake.

"If the Senate refuses to negotiate on the few remaining issues, they can be assured that every tool at our disposal will be utilized to ensure a long-term bill is signed into law," said Rep. John Mica, the chairman of the House Transportation Committee.

It was Mica's proposal on subsidy cuts that triggered the two-week impasse in Congress that held up legislation to fund full FAA operations through mid-September.

That standoff ended on Friday with the Senate swallowing Mica's bill, which included wiggle room for the Transportation Department to waive any reduction in rural airline flights for the time being.

LABOR LOOMS LARGE

Underlying the subsidy fight was a contentious proposal in the long-term aviation bill by the Republican-led House to roll back a federal rule pushed by Obama administration appointees making it easier to organize labor unions at airlines.

Democrats insist the measure was inserted at the behest of mostly non-union Delta Air Lines. Unions, an important constituent of Obama and Democrats, have failed multiple times to organize major work groups outside of pilots, who are represented by the Air Line Pilots Association.

"There is no agreement in Congress to make this change to workers' rights. Insisting it be included in the FAA bill will only cause more economic uncertainty," said Rep George Miller, the senior Democrat on the House Education and Workforce Committee.

All other major airlines are heavily unionized.

John Rockefeller, Mica's counterpart in the Senate as chairman of the Commerce Committee, has promised a showdown on the union issue as well, saying that conservative Republicans want to "undo worker protection" and "may again block progress" on FAA legislation.

Rockefeller accused Republicans of holding the "entire aviation system hostage" during the airline subsidy dispute that resulted in the temporary shutdown of FAA airport construction projects. Funding for those are expected to resume this week.

U.S. airlines, including Delta, United Airlines and American Airlines, and other businesses, such as aircraft manufacturers Boeing Co and Europe's Airbus, are eager for action on the long-term bill.

They do not favor everything in the legislation but strongly promote efforts to accelerate the transformation of U.S. air traffic control to a satellite-based navigation system. They anticipate that change will allow for dramatic advances in aircraft systems and design, more efficient use of air space, and fuel savings associated with flying more direct routes.

(Editing by Maureen Bavdek)

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China quarterly growth tops forecast, boosts inflation fight (Reuters)

BEIJING (Reuters) – China's economy grew faster than expected in the second quarter, easing fears of a hard landing and strengthening Beijing's resolve to fight persistently high inflation.

China's statistics office said on Wednesday that stabilizing prices remained the top priority, even though a "complex and volatile" global economy posed a threat to growth, complicating the policy choices.

Second-quarter gross domestic product rose 9.5 percent from a year earlier, exceeding economists' forecasts for 9.4 percent growth, helped by solid domestic consumption and investment.

But that was still the slowest pace since the third quarter of 2009, when the world economy was pulling out of its worst recession in 80 years.

Some cooling was expected -- and even welcome -- because China has raised interest rates and clamped down on bank lending to try to ease inflation, which hit a three-year high in June. The stronger-than-expected GDP figures suggest Beijing may have more room to tighten without choking off growth.

"These are very good numbers," said Liu Li-Gang, an economist with ANZ in Hong Kong.

"This is perhaps the reason the (central bank) raised interest rates last week. They are showing they are not afraid of a significant slowdown in the economy."

For investors worried that Beijing's tightening campaign might exact too heavy a toll on the fastest-growing major economy in the world, the figures offered some reassurance. Industrial output in June was also stronger than expected, growing at its fastest pace in over a year.

Asian stocks, metals and the Australian dollar all rose.

China's GDP in April to June rose 2.2 percent from the first quarter on a seasonally adjusted basis, a slight pick-up in pace from 2.1 percent in the first quarter.

Chinese officials have struck a hawkish note in recent days, mindful of the risk that overheating inflation could stoke civil unrest.

Although many economists think overall inflation pressures will ease during the second half of the year, prices have soared for popular staples such as pork and it will take time for them to recede.

A small majority of analysts expect the central bank to raise interest rates again this year and most forecast further increases in bank reserve ratios, a Reuters poll last week showed.

Sheng Laiyun, a spokesperson for China's statistics bureau, said stabilizing inflation was the primary goal, and policies would be "targeted, flexible and effective," echoing recent remarks by Premier Wen Jiabao.

"It's not easy and China has done a great job to maintain fast economic growth when the global situation is complex and volatile," Sheng said.

Europe's sovereign debt troubles and a slowdown in the U.S. economy means two of China's best export customers are struggling. New export orders slipped in June, a manufacturing survey showed earlier in July, which raised questions about China's growth prospects.

But Wednesday's figures suggested domestic demand remains robust. Final consumption contributed 4.6 percentage points to first-half growth, while exports subtracted slightly, China's statistics bureau said.

Analysts say China's economy is on course for growth well above 9 percent this year, a rate that would be the equivalent of adding Switzerland's GDP to the $6 trillion economy.

Still, demand weakness in China's Western export markets may cause economic growth to slacken in the third quarter from the second, they say.

REBALANCING

Industrial output rose 15.1 percent in June from a year earlier, the strongest growth since May 2010. It also marked a sharp quickening from May's 13.3 percent and beat market expectations of 13.1 percent.

The growth figures underlined the resilience of the world's second-largest economy, thanks to the country's rapid urbanization, and could soothe investor concerns about an abrupt slowdown that would dent demand for global commodities.

"The data should also help to dispel the wilder fears of an economic collapse in China," said George Worthington, an economist with IFR, a Thomson Reuters unit.

Fixed-asset investment grew 25.6 percent in the first six months from a year earlier, while retail sales expanded 16.8 percent, showing that domestic demand still held up relatively well despite policy tightening.

"The economic growth data are quite upbeat and industrial production is noticeably stronger than expected," said Xu Biao, an economist with China Merchants Bank in Shenzhen. "It's quite beyond expectations as Chinese imports and (purchasing manager's survey) in June were quite weak."

Stronger demand at home not only helps insulate China from the global turmoil, it provides a bit of a buffer for the rest of the world and evidence that Beijing is making good on pledges to move away from export-driven growth. But it can also increase price pressures.

Fighting inflation remains Beijing's top priority but any policy steps should avoid causing big swings in economic growth, Premier Wen said in comments published on Tuesday.

He signaled in June that the country would struggle to meet its 4 percent average inflation target in 2011. Monthly consumer price figures show inflation averaged 5.4 percent in the first half of the year.

An academic adviser to the People's Bank of China was quoted by state television on Wednesday as saying the inflation rate may have peaked in June, when it hit 6.4 percent.

Li Daokui, a member of the central bank's monetary policy committee, said the full-year inflation rate could be around 4.8 percent.

Last Wednesday, China raised rates by 25 basis points -- the third such increase this year -- which took the one-year bank deposit rate to 3.5 percent.

The central bank has raised benchmark interest rates five times since October and lifted banks' reserve requirement ratio -- its preferred policy tool so far -- nine times.

(Additional reporting by Langi Chiang, Gui Qing Koh and Zhou Xin: Writing by Emily Kaiser: Editing by Neil Fullick)

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To fight obesity, even babies should exercise (AP)

LONDON – In a new campaign against obesity, the British government issued guidelines on Monday saying that children under the age of 5 — including those who can't even walk yet — should exercise every day.

In its first such guidelines for children that young, the health department said kids under 5 who can walk should be physically active for at least three hours a day. Officials also said parents should reduce the amount of time such kids spend being sedentary while watching television or being strapped in a stroller.

The three hours of activity should be spread throughout the day. Officials said the children's daily dose of exercise is likely to be met simply through playing but could also include activities such as walking to school.

For babies who can't walk yet, the government said physical activity should be encouraged from birth, including infants playing on their stomachs or having swimming sessions with their parents. The government said children's individual physical and mental abilities should be considered when interpreting the advice.

"It's vital that parents introduce children to fun and physically active pastimes to help prevent them becoming obese children, who are likely to become obese adults at risk of heart disease, diabetes and some cancers," Maura Gillespie, head of policy and advocacy at the British Heart Foundation, said in a statement.

Nearly a quarter of British adults are obese, and experts estimate that by 2050 about 90 percent of adults will be heavy.

According to a 2008 health survey that used devices to measure how much people actually exercised, officials found only about five percent of Britons meet the government's minimum physical activity advice — about 150 minutes of moderate to vigorous exercise every week, including some every day.

For children aged 5 to 18, Britain recommends at least one hour of exercise, but that should include intensive activities to strengthen muscles and bones.

In the U.S., the Centers for Disease Control and Prevention advises children and teenagers to get about one hour or more of physical activity every day.

According to the Institute of Medicine, an independent organization in Washington, D.C., toddlers should get at least 15 minutes of exercise for every hour they spend in child care.

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