Leon Panetta says al Qaeda's defeat "within reach" (Reuters)

KABUL (Reuters) – New U.S. Defense Secretary Leon Panetta arrived in Afghanistan on Saturday, saying he believed the strategic defeat of al Qaeda was within reach if the United States could kill or capture up to 20 remaining leaders of the core group and its affiliates.

Panetta, on his first trip since taking over the Pentagon on July 1, told reporters before arriving in Kabul that now was the time -- in the wake of the May killing of Osama bin Laden -- to intensify efforts to target al Qaeda's leadership.

"We're within reach of strategically defeating al Qaeda and I'm hoping to be able to focus on that, working obviously with my prior agency as well," said Panetta, who ran the CIA until the end of June.

"Now is the moment following what happened with bin Laden, to put maximum pressure on them. Because I do believe that if we continue this effort that we can really cripple al Qaeda as a threat to (the United States)."

Panetta declined to offer all the names of al Qaeda leadership the United States was looking at. But he singled out two men: Anwar al-Awlaki, an American imam who has become a senior leader of al Qaeda's Yemen-based affiliate, and Ayman al-Zawahri, who replaced bin Laden as the head of al Qaeda.

Panetta said he believed Zawahri was living in Pakistan's tribal areas, and "he's one of those we would like to see the Pakistanis target."

"I would say somewhere around 10-20 key leaders that between Pakistan, Yemen, Somalia, AQIM (al Qaeda in the Islamic Maghreb) in North Africa. Those are, if we can go after them, I think we really can strategically defeat al Qaeda," he said.

Panetta added that the U.S. military and the CIA were engaged in a number of operations focusing on militants in Yemen. He did not give specifics.

BETTER TIES WITH KARZAI?

Panetta's first trip to Afghanistan as defense secretary comes at a time of growing impatience in the United States with the nearly decade-old war, even as President Barack Obama pushes ahead with plans for a faster-than-expected drawdown.

Critics say the U.S. war strategy is undermined partly by Pakistan's failure to go after militants -- including those staging cross-border attacks in Afghanistan.

Panetta acknowledged Pakistani cooperation in going after some militants but added "we've got to continue to push (the Pakistanis) to do that."

"That's the key," Panetta said.

Critics also point to the strained relationship with Afghan President Hamid Karzai, who has been accused of failing to address rampant corruption.

Although Panetta has met Karzai several times before as CIA director, he expressed hope that Obama's decision to move top officials including himself into new roles linked to Afghanistan would help improve ties.

"Hopefully it can be the beginning of a much better relationship than what we've had (with Karzai) over the past few years," Panetta said.

Obama's withdrawal plans call for the first 10,000 of the nearly 100,000 U.S. troops in Afghanistan to leave the country by the end of this year. Another 23,000 will pull out by the end of next summer, with the goal of gradually handing over lead security responsibility to Afghan forces by the end of 2014.

Panetta said the biggest challenge remained training Afghan forces in the months and years ahead.

"We've made good progress on that, but I think there's a lot more work to do of being able to transition responsibility to them," he said.

(Reporting by Phil Stewart; Editing by Eric Beech)

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Panetta: US within reach of defeating al-Qaida (AP)

By ROBERT BURNS, AP National Security Writer Robert Burns, Ap National Security Writer – 2?hrs?18?mins?ago

KABUL, Afghanistan – The U.S. and its allies are within reach of defeating al-Qaida after killing Osama bin Laden and gaining new insights about the terrorist group's other leading figures, new U.S. Defense Secretary Leon Panetta said Saturday.

The former CIA director offered an upbeat assessment about the prospects for ending al-Qaida's threat as he spoke with reporters flying with him on his first visit to Afghanistan since taking over as Pentagon chief July 1.

In a separate interview later, Army Gen. David Petraeus, the top U.S. commander in Afghanistan, said he agreed with Panetta's assessment.

In the aftermath of the May 2 raid that killed bin Laden in Pakistan, the U.S. has determined that eliminating "somewhere around 10 to 20 key leaders" of al-Qaida would cripple the network, Panetta said. Those leaders are in Pakistan, Yemen, Somalia and North Africa, he added.

"We're within reach of strategically defeating al-Qaida," Panetta said, addressing reporters for the first time since succeeding Robert Gates as defense secretary.

"The key is that, having gotten bin Laden, we've now identified some of the key leadership within al-Qaida, both in Pakistan as well as in Yemen and other areas," he said.

"If we can be successful at going after them, I think we can really undermine their ability to do any kind of planning, to be able to conduct any kind of attack" on the United States. "That's why I think it's within reach. Is it going to take some more work? You bet it is. But I think it's within reach," Panetta said.

In an interview at the main U.S. military headquarters in Kabul, Petraeus said al-Qaida is on the run.

"There has been enormous damage done to al-Qaida," beyond the death of bin Laden, in the areas of western Pakistan where the group is believed operating, Petraeus said. "That has very significantly disrupted their efforts and it does hold the prospect of a strategic defeat, if you will, a strategic dismantling, of al-Qaida."

Asked how he defines a "strategic defeat" for al-Qaida, Petraeus said it means that "they can't carry out strategically important attacks."

Petraeus, who is leaving his post this month and succeeding Panetta at the CIA, said there are small numbers of al-Qaida terrorists in Afghanistan. He said the al-Qaida "brand" is likely to remain a feature of the global terrain, even if the Pakistan-based core of al-Qaida is unable to carry out large attacks against the West.

Panetta said the 10 to 20 top terrorist figures in al-Qaida's hierarchy who are now the focus of U.S. efforts include Ayman al-Zawahri, the designator successor to bin Laden as al-Qaida's leader.

Panetta said the U.S. believes al-Zawahri is living in the Federally Administered Tribal Areas of western Pakistan.

The only other name he mentioned was Anwar al-Awlaki, the U.S.-born Muslim cleric living in Yemen. The U.S. has put him on a kill-or-capture list.

"Now is the moment, following what happened with bin Laden, to put maximum pressure on them because I do believe that if we continue this effort we can really cripple al-Qaida as a major threat" to America, he said.

Al-Qaida's attacks of Sept. 11, 2001, triggered the U.S.-led invasion of Afghanistan and the overthrow of the Taliban government that had sheltered bin Laden. But in the years since, the Taliban has reasserted itself and al-Qaida has managed to operate from havens in neighboring Pakistan.

Al-Qaida affiliates have emerged in Iraq, Yemen, Somalia, and elsewhere. That's led many in the U.S. to argue for a shift from fighting the Taliban in Afghanistan to targeting al-Qaida leaders in Pakistan and other places.

Asked whether he thought Pakistani authorities knew that bin Laden had been living in their country, Panetta said, "Suspicions, but no smoking gun." The Pakistani government says it did not know bin Laden's whereabouts when Navy SEALs attacked his compound not far from Islamabad.

In Panetta's talks with Petraeus and his successor, Marine Gen. John R. Allen, a central topic was expected to be President Barack Obama's decision on June 22 to withdraw 10,000 U.S. troops from Afghanistan this year and 23,000 more by September 2012. The drawdown is to begin this month, but not all details have been worked out.

Offering an overview of the security situation in Afghanistan, Petraeus said he was encouraged that the number of insurgent attacks in June was down slightly from June 2010 and that the trend is holding thus far in July. This contrasts with intelligence analysts' forecast of an 18 percent to 30 percent increase for 2011, he said.

Panetta also intended to meet with Afghan President Hamid Karzai. Karzai's mercurial character and frequent public criticisms of the U.S.-led international military coalition have soured his relations with many U.S. officials, including the current U.S. ambassador. Karl Eikenberry.

Eikenberry is handing off that post this month to Ryan Crocker, a veteran diplomat and former U.S, ambassador to Iraq who was coaxed out of retirement. Crocker reopened the U.S. Embassy in Kabul after the 2001 toppling of the Taliban

Panetta said he believes he and Obama's "whole new team" of U.S. leaders in Kabul have a good understanding of Karzai.

"Hopefully, it can be the beginning of a much better relationship than what we've had over the last few years," he said.

On a lighter note, he said he has gotten a feel for his new job as defense secretary. He compared it to his official aircraft, a towering military version of the Boeing 747.

"It's big, it's complicated, it's filled with sophisticated technology, it's bumpy, but in the end it's the best in the world."

___

Robert Burns is on Twitter (at)robertburnsAP.

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Analysis: Debt deal not that far out of reach (Reuters)

WASHINGTON (Reuters) – You would never know it from all the hot air rising out of Washington, but President Barack Obama and congressional Republicans could easily reach a deal to raise the debt limit and avoid an early August default.

Before talks hit a brick wall last weekend, negotiators were tantalizingly close to a $2 trillion-plus budget deal that would enable Congress to sign off on further borrowing, according to Democratic and Republican sources.

Since then, things have not looked good. Obama compared Republicans to lazy schoolchildren and Democrats accused them of deliberately sabotaging the economy. Republicans have not shied away from salty language, either.

"Washington is addicted to spending, and the addict-in- chief is the president," Republican Senator Jim DeMint said on the Senate floor on Thursday.

Analysts worry lawmakers may be painting themselves into a corner. "In order to get out of this mess they're going to have to eat some of their words," said Joe Minarik, a former budget official in the Clinton administration.

The Treasury Department has warned the country will face default if Congress does not lift the $14.3 trillion debt ceiling by August 2. That could push the country back into recession and upend financial markets across the globe.

Whether Republicans and Democrats can bridge their differences over the coming weeks remains to be seen.

From a dollar standpoint, the two sides are closer to a deal than it might appear.

In talks led by Vice President Joe Biden, negotiators had tentatively agreed to reduce discretionary spending, which covers everything from space exploration to pollution control, by between $900 billion and $1.3 trillion over 10 years, according to aides from both parties.

Republicans resisted cuts to military and other security spending sought by Democrats, but Senator Charles Schumer, a Democrat known as a hard-nosed partisan, said on Thursday he thought a compromise was possible in this area.

The two sides had also identified cuts to a wide range of benefit programs, such as farm subsidies, student aid and federal employee retirement plans. Democrats say these total about $200 billion, while a Republican aide put the total at $275 billion to $325 billion.

STRUCTURAL CHANGES TO MEDICARE?

Democrats have hammered their conservative opponents over a Republican proposal to scale back the Medicare program for future retirees, but the budget talks have yielded some consensus in this area as well.

Democrats say the deal could save roughly $200 billion through structural changes to health programs like Medicare and Medicaid, the healthcare program for the poor and handicapped, that don't scale back benefits, while Republicans say the total could be as high as $400 billion.

Both sides have also taken a look at changing the inflation index, which could slow the growth of benefit payments and tax exemptions. That could yield $300 billion.

The lowered spending levels would reduce the amount the government spends on interest payments. That could yield a further $325 billion to $350 billion in savings, according to a Republican aide.

The potential cuts total between $1.9 trillion and $2.7 billion -- roughly enough to ensure that Congress would not have to revisit the politically toxic issue before the November 2012 elections.

The main sticking point is tax increases. Republicans leaders have said they're off the table, and Democrats no longer expect to get the increase in income-tax rates for wealthy households that they had initially sought.

Instead, they aim to close a range of tax breaks that could generate $400 billion in new revenue. Republicans are not likely to agree to the largest of these, which would generate $300 billion from wealthy taxpayers by limiting the amount of deductions they can claim.

But other breaks for corporate jets, yachts and racehorses have a minimal impact on the budget and provide Democrats with vivid fodder for campaign attack ads. Throwing a few of these into the deal could avert a few headaches for Republicans and allow Democrats to claim a moral victory.

"It's going to be a difficult lift, but I still think that calmer minds will prevail in the end and they'll recognize that we don't have any alternative but to move forward," said Bill Hoagland, a former Republican congressional aide who has worked on budget issues for decades.

(Additional reporting by Alister Bull and Deborah Charles; editing by Todd Eastham and Cynthia Osterman)

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African Union tries to reach consensus on Libya (AP)

MALABO, Equatorial Guinea – Africa's heads of state spent the day behind closed doors on Friday, trying to reach a consensus on what to do with Libya's defiant leader Moammar Gadhafi, whose ouster would be a source of discomfort for the continent's other entrenched rulers.

Mali's President Amadou Toumani Toure said the leaders had made progress as he emerged for a break from the confidential session after hours of discussion. "But we are not yet done," he said.

Denis Sassou-Nguesso, the president of the Republic of Congo and on of five members of the African Union's high level ad hoc committee on Libya, said the group would find a solution. The leaders are meeting in Equatorial Guinea's capital for this week's African Union summit, whose theme of youth empowerment has been hijacked by the widening crisis in Libya.

Only several months ago, Gadhafi was thought to be one of the most secure of the continent's dictators, his 40-year grip on Libya still iron strong.

Among the sticking points for the presidents meeting here is what to do with Gadhafi, with some members wanting him to step down and others insisting he should be part of the solution.

Gadhafi's fall could have a domino effect, emboldening populations to rise up against other autocratic regimes, including the one in this tiny nation on Africa's western coast where critics of the regime are systematically tortured and where allegiance to the ruling party is so absolute that citizens are afraid of being seen reading the nation's only opposition newspaper.

Backers of Gadhafi are believed to include the president of Equatorial Guinea, Teodoro Obiang Nguema, who was recently elected as the African Union's rotating chairman.

The ad hoc committee on Libya has already proposed a road map, which calls for a cease-fire followed by negotiations between the warring sides leading to the creation of a transitional authority. Initially the committee was pushing for Gadhafi to be part of the negotiations, a proposal the rebels rejected. On Sunday in what appeared to be a concession, the group announced that Gadhafi had agreed not to be part of the negotiations, and in a statement the committee said they had welcomed his decision to step aside.

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