Wayward penguin released south of New Zealand (AP)

WELLINGTON, New Zealand – He needed a little push before speeding backward down a makeshift slide. Once in the water, he popped his head up for one last look. And then he was gone. The wayward emperor penguin known as "Happy Feet" was back home in Antarctic waters after an extended sojourn spent capturing hearts in New Zealand.

Happy Feet was released into the ocean south of New Zealand on Sunday, more than two months after he came ashore on a beach nearly 2,000 miles (3,000 kilometers) from home and became an instant celebrity.

Speaking from a satellite phone aboard the research vessel Tangaroa, Wellington Zoo veterinarian Lisa Argilla said Happy Feet's release went remarkably smoothly given that the boat was being tossed about in 25-foot (8-meter) swells in the unforgiving Antarctic ocean.

Argilla said crew members from the boat carried the penguin inside his custom-built crate to the stern of the ship for his final send-off about 50 nautical miles (90 kilometers) north of remote Campbell Island. The crew had already cut the engines and put in place a canvas slide that they soaked with water from a hose.

But when they opened the door of the crate, the penguin showed no interest in leaving.

"I needed to give him a little a tap on his back," Argilla said.

The penguin slipped down the slide on his stomach, bottom first, she said. He resurfaced about 6 feet (2 meters) from the boat, took a look up at the people aboard, and then disappeared beneath the surface.

"I was really happy to see him go," Argilla said. "The best part of my job is when you get to release animals back into the wild where they are supposed to be."

The 3-foot-tall (meter-tall) aquatic bird was found June 20 on Peka Peka Beach, about 40 miles (65 kilometers) northwest of New Zealand's capital, Wellington. It had been 44 years since an emperor penguin was last spotted in the wild in New Zealand.

At first, conservation authorities said they would wait and let nature take its course with the penguin. But it soon became clear the bird's condition was deteriorating, as he scooped up beaks full of sand and swallowed, likely mistaking it for snow, which emperor penguins eat for its moisture when in Antarctica.

With the world watching, authorities finally took action, moving the penguin to the Wellington Zoo four days after he was discovered.

At the zoo, the 3 1/2-year-old bird underwent numerous stomach flushing procedures to remove sand from his digestive system. He was given a makeshift home in a room that zoo staff kept filled with a bed of ice so he wouldn't overheat.

A local television station, TV3, set up a webcam and streamed images of the bird around-the-clock. Soon, Happy Feet had a quarter-million followers.

And, perhaps befitting of a bird from the Internet age, those followers will be able to keep track of him for a while longer. Happy Feet has been fitted with a GPS tracker, and his movements will be posted online. Argilla expects the tracker to fall off the next time the bird molts.

Argilla said the final boat journey, which began last Monday and ran into terrible weather, was difficult for her — she got seasick — and the crew. The one who seemed least bothered, she said, was Happy Feet, who rolled with the swells, slept standing up and took nips at the crew when they fed him fresh fish.

Now that Happy Feet has been nursed back to health, Argilla said his chances are as good as they are for any other penguin in the wild.

"He swam away, not caring about us anymore," Argilla said.

She paused.

"And that's a good thing," she said.

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To keep track of Happy Feet's movements, go to http://www.wellingtonzoo.com/

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Somalia heads terrorism risk, South Sudan in top 5: survey (Reuters)

LONDON (Reuters) – Somalia is most at risk from terrorist attack, followed by Pakistan, Iraq and Afghanistan and the new nation of South Sudan, according to a ranking by global analysts Maplecroft.

The consultancy's latest Terrorism Risk Index also assesses threats to be rising in Yemen, Iran, Uganda, Libya, Egypt and Nigeria.

A Maplecroft statement said increased dangers seen in Yemen and Uganda were caused by al Qaeda-associated violence, those in Iran stemmed from attacks by Sunni Muslim rebel group Jundollah and those in Egypt and Libya originated in terrorist and criminal attempts to exploit Arab Spring political unrest.

Nigeria is beset by militant raids in the Niger Delta, by sectarian violence and by radical Islamist attacks in the north.

The top four rankings were unchanged from Maplecroft's previous survey issued in November 2010 but South Sudan, which came into being last month on secession for the north, replaced the Palestinian Territories at number five due to the high average number of people killed per attack in violence there.

The UK-based company's index rates 198 countries on the number, frequency and intensity of terrorism attacks, plus the likelihood of mass casualties occurring. While based on historical data, it is intended as a forward-looking assessment.

The survey's reporting period of April 2010 to March 2011, partly overlaps with the June 2009 to June 2010 data used in its previous ranking.

It defines terrorism as the calculated and purposeful use of violence employed to influence the attitudes and behavior of people and governments, and takes its raw data from the U.S. National Counter-terrorism Center's Worldwide Incidents Tracking System.

QAEDA OFFSHOOTS SEEN STOKING RISKS

Maplecroft sees 20 states at "extreme risk." Apart from the top five, these are Yemen 6, Palestinian Territories 7, Democratic Republic of Congo 8, Central African Republic 9, Colombia 10, Algeria 11, Thailand 12, Philippines 13, Russia 14, Sudan, 15, Iran 16, Burundi 17, India 18, Nigeria 19 and Israel 20.

There was an increased risk from regional offshoots of al Qaeda including Al-Qaeda in the Arabian Peninsula and Al-Qaeda in the Islamic Maghreb, the survey said, adding that a spate of revenge attacks by militants in Pakistan following the killing of al Qaeda leader Osama bin Laden there in May showed his death had not led to a short-term fall in militancy.

On Somalia, Maplecroft said that despite suffering some losses in Mogadishu, the Islamist militant group al-Shabaab continued to hold much of south and central Somalia and "launch some of the most devastating attacks in the capital" in its fight against a Western-backed interim government.

South Sudan got its rating "primarily due to the intensity of terrorist attacks, with an average of 6.59 fatalities per terrorist incident, almost three times that of Somalia at 2.23."

At least seven rebel militias are fighting the new government's forces which are trying to establish stability after winning separation as part of the climax to a 2005 peace deal ending decades of civil war with Khartoum.

NORWAY LOW DOWN THE SCALE

Despite its elevated risk ranking, the statement said, "South Sudan's death toll of 211 from terrorist attacks pales in comparison to the top four countries. Over the same period Somalia suffered 1,385 deaths, Pakistan 2,163 deaths, Iraq 3,456 deaths and Afghanistan 3,423 deaths, which together account for over 75 percent of the world's 13,492 fatalities.

Iran continued to experience a small but lethal number of mass-casualty attacks including a twin suicide bombing in Zahedan in July 2010, which collectively killed at least 28.

One of the largest changes in rankings was Uganda, which jumped 20 places to 22 following bombings in Kampala in July 2011 that killed 79 people. The attack marked the first strikes on foreign soil by al Shabaab.

The only Western European country seen at high risk was Greece, assessed at 27, down from 24, due to violent left-wing groups. The next most at risk was Britain, rated at 38, up from 46, while France was at 45, barely changed from 44.

The survey period did not cover an attack in Norway by anti-Muslim zealot Anders Behring Breivik, who killed 77 people in Oslo and a nearby island.

After the attack, some analysts argued that terrorism monitoring had been skewed toward the threat of violence from Muslim groups, ignoring the danger posed by far right westerners.

The survey rated Norway at a lowly 112.

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Afghan president's half brother killed in south (AP)

KANDAHAR, Afghanistan – President Hamid Karzai's half brother, the most powerful man in southern Afghanistan and a lightning rod for criticism of corruption in the government, was assassinated Tuesday by a close associate. His death leaves a dangerous power vacuum in the south just as the government has begun peace talks with insurgents ahead of a U.S. withdrawal.

Ahmed Wali Karzai, the head of the Kandahar provincial council, was shot to death while receiving guests at his home in Kandahar, the capital of the province that was the birthplace of the Taliban movement and was the site of a recent U.S.-led offensive.

Tooryalai Wesa, the provincial governor of Kandahar, identified the assassin as Sardar Mohammad and said he was a close, "trustworthy" person who had gone to Wali Karzai's house to get him to sign some papers.

As Wali Karzai was signing the papers, the assassin "took out a pistol and shot him with two bullets — one in the forehead and one in the chest," Wesa said. "Another patriot to the Afghan nation was martyred by the enemies of Afghanistan."

The killing coincided with a visit to the capital, Kabul, by French President Nicolas Sarzoky.

"This morning my younger brother Ahmed Wali Karzai was murdered in his home," the Afghan president said during a joint news conference with Sarkozy. "Such is the life of Afghanistan's people. In the houses of the people of Afghanistan, each of us is suffering and our hope is, God willing, to remove this suffering from the people of Afghanistan and implement peace and stability."

The Taliban claimed responsibility for the assassination at the heavily guarded house, hidden behind 8-foot (2.5 meter) blast walls. The Interior Ministry said an investigation was under way, and Kandahar Police Chief Gen. Abdul Raziq said police have detained several men who were guarding Mohammad's home for questioning about his recent activities.

President Karzai arrived in Kandahar on Tuesday evening by helicopter to attend the funeral scheduled for Wednesday morning, according to Raziq.

Wali Karzai, who was in his 50s and had survived several previous assassination attempts, was seen by many as a political liability for the Karzai government after a series of allegations, including that he was on the CIA payroll and involved in drug trafficking. He denied the charges. The president repeatedly challenged his accusers to show him evidence of his sibling's wrongdoing, but said nobody ever could.

Wali Karzai remained a key power broker in the south, helping shore up his family's interests in the Taliban's southern heartland, which has been the site of numerous offensives by U.S., coalition and Afghan troops to root out insurgents. Militants have retaliated by intimidating and killing local government officials or others against the Taliban.

The United Nations said in a quarterly report issued June 23 that more than half of all assassinations across Afghanistan since March had been in Kandahar. In April, the Kandahar police chief Khan Mohammad Mujahid was killed by a suicide bomber wearing a police uniform who blew himself up beside the official's car.

According to a government official with knowledge of the investigation, Wali Karzai was holding a meeting in his home with five provincial council members and a number of local village elders, including the assassin. The official said Mohammad was a close friend and had represented Wali Karzai many times in their shared home village of Karz, the president's hometown. Mohammad was the village elder of Karz and was his emissary and travel companion throughout Kandahar, the official said.

At about 11:30 a.m. Mohammad asked Wali Karzai to speak with him privately and to sign some papers in an adjoining room, the official said. Three shots rang out, according to the official. Wali Karzai's bodyguards ran into the room and found him on the floor with bullet wounds to his head, hand and leg. The bodyguards shot and killed the assassin.

The government official said that it remains unclear whether the killing was the result of an internal feud or a Taliban plot.

Although tribal rivalries are common in Kandahar, bloodletting within tribes is fairly uncommon, he said.

Agha Lalai, deputy of the provincial council, said he was one of the first to respond to the sounds of shots.

Lalai said that he and several other men picked up Wali Karzai and attempted to carry him out of the house, but he died before they left the grounds.

In Kabul, the political elite reacted to the killing with shock and concern about the future of the country's southern region and beyond. Though Wali Karzai held an elected office in the provincial council, people who knew him said he seemed to float above the various political and tribal spheres dominating the south. Throngs of people came to Karzai's house on a daily basis seeking remedies for everything from family disputes, to tribal battles, to political intrigues.

Members of the international community had urged the president to remove his brother from his powerful provincial position, saying that it was essential if he was to prove to the Afghan people that he was committed to good governance. But despite his alleged forays into narco-trafficking, smuggling, and land theft, many Western officials also relied on him because of his unparalleled reach and understanding of the various players in the area.

Noorolhaq Olomi, a former parliament member from Kandahar, said Wali Karzai was the most powerful man in southern Afghanistan — "more of a governor than the governor" and "everybody's leader in the south, not just Kandahar."

"I cannot say whether this was political or personal or some other matter," Olomi said. "But whoever did it, it shows the weakness of this government. The president needs to change things. He needs to change himself and build a government that is real. Right now, there is no government. It's all a fraud."

Condolences flooded into the president palace throughout the day.

Gen. David Petraeus, the outgoing commander of NATO and U.S. forces in Afghanistan, condemned the murder and said the coalition would support efforts to prosecute anyone who played a role in the killing. "President Karzai is working to create a stronger, more secure Afghanistan, and for such a tragic event to happen to someone within his own family is unfathomable," Petraeus said in a statement.

Both Pakistani President Asif Ali Zardari and Pakistani Prime Minister Yousuf Raza Gilani called the president to express their sadness at his brother's death.

Abdullah Abdullah, the top opposition leader in Afghanistan who ran against Karzai in the latest presidential election, called it "an act against national personality and the ones who are at the service of the Afghan people."

Mohammad Yusuf Pashtun, a senior adviser to the president for construction, water, energy and mines, said the death will have a big impact on security in southern Afghanistan.

"My first impression is that in spite of all the negative propaganda against him he managed to be a source of stability in that area," he said. "When it comes to bringing people together in the south, this creates a vacuum. I don't know what will happen now, but something must be done by the local leadership."

Rangina Hamidi, a resident of Kandahar and daughter of the city's mayor, said Wali Karzai is survived by five children — two sons and three daughters. She says his youngest son was born about a month ago.

Wali Karzai has been the reported target of multiple assassination attempts.

In May 2009, a bodyguard was killed when his motorcade was ambushed by insurgents but Wali Karzai was not harmed.

That attack came less than two months after four Taliban suicide bombers stormed Kandahar's provincial council office, killing 13 people in an assault that Wali Karzai said was aimed at him, although he had left the building a few minutes beforehand.

Wali Karzai also survived a November 2008 suicide attack on the provincial council offices that killed six other people.

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Associated Press writers Amir Shah, Rahim Faiez, Solomon Moore, Heidi Vogt and Deb Riechmann in Kabul and Kathy Gannon in Islamabad contributed to this report.

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Independent South Sudan "free at last" (Reuters)

JUBA (Reuters) – Tens of thousands of South Sudanese danced and cheered as their new nation declared independence on Saturday, a hard-won separation from the north that still leaves simmering issues of disputed borders and oil payments unresolved.

The president of South Sudan, Salva Kiir, stood next to his old civil war foe the president of Sudan, Omar Hassan al-Bashir, who now leads just the north, at a ceremony to mark the birth of the new nation.

Under-developed, oil-producing South Sudan won its independence in a January referendum -- the climax of a 2005 peace deal that ended decades of fighting with the north.

Security forces at first tried to control the streets in the south's dusty capital Juba, but retreated as jubilant crowds moved in overnight and through the day, waving flags, dancing and chanting "South Sudan o-yei, freedom o-yei."

Some revelers fainted in the blistering heat as South Sudan's parliamentary speaker, James Wani Igga, read out the formal declaration of independence.

"We, the democratically elected representatives of the people ... hereby declare Southern Sudan to be an independent and sovereign state," said Igga before Sudan's flag was lowered, the South Sudan flag was raised and the new anthem sung. Kiir took the oath of office.

People threw their hands in the air, embraced and wept. "We got it. We got it," one man said as he hugged a woman.

The presence of Bashir, who campaigned to keep Africa's largest state united, was a key gesture of goodwill.

It will also be an embarrassment to some Western diplomats at the event. The International Criminal Court has issued an arrest warrant for Bashir on charges of war crimes in Darfur.

Bashir gave a speech congratulating the new country. "The will of the people of the south has to be respected," he said, adding that both states had to maintain peace.

RECOGNITION

North Sudan's government was the first to recognize South Sudan on Friday, hours before the split took place, a move that smoothed the way to the division.

The United States, China and Britain signaled their recognition of the state on Saturday, according to official statements and government media reports.

"After so much struggle by the people of South Sudan, the United States of America welcomes the birth of a new nation," said U.S. President Barack Obama, stopping short of announcing any immediate changes in longstanding U.S. sanctions on Sudan that Khartoum has been hoping will be lifted.

Dignitaries including U.N. Secretary General Ban Ki-moon and the leaders of about 30 African nations attended.

In a possible sign of the South's new allegiances, the crowd included about 200 supporters of Darfur rebel leader Abdel Wahed al-Nur, fighting Khartoum in an eight-year insurgency just over South Sudan's border in the north.

Earlier, the supporters of Nur's rebel Sudan Liberation Army faction stood in a line chanting "Welcome, welcome new state," wearing T-shirts bearing their leader's image. One carried a banner reading "El Bashir is wanted dead or alive."

Traditional dance groups drummed and waved shields and staffs in a carnival atmosphere.

"Free at last," said Simon Agany, 34, as he walked around shaking hands after midnight -- the time when officials said the South actually became the world's newest nation.

The crowd cheered as Kiir unveiled a giant statue of civil war hero John Garang, who signed the peace deal with the north.

Kiir offered an amnesty to rebels fighting his government and promised to bring peace to troubled border areas.

"I would like to take this opportunity to declare amnesty for all those who have taken up arms against Sudan," he said.

"I want to assure the people of Abyei, Darfur, Blue Nile and South Kordofan that we have not forgotten you. When you cry, we cry. When you bleed, we bleed. I pledge to you today that we will find a just peace for all," he said.

SEEDS OF FUTURE TENSION

Khartoum's recognition of the South did not dispel fears of future tensions.

Northern and southern leaders have still not agreed on a list of issues, most importantly the line of the border, the ownership of the disputed Abyei region and how they will handle oil revenues, the lifeblood of both economies.

At the stroke of midnight the Republic of Sudan lost almost a third of its territory and about three quarters of its oil reserves, which are sited in the south. It faced the future with insurgencies in its Darfur and Southern Kordofan regions.

In Khartoum on Saturday, one sign of the new national order was the disappearance of some English-language and SPLM-linked newspapers. The north said it suspended them on Friday as they were published or owned by southerners -- an ominous signal for more than 1 million southerners left in the north.

Many northerners see the separation as a loss of face.

Analysts have long feared a return to war if north-south disputes are not resolved.

Mostly Muslim Sudan fought rebels in the south, where most follow Christianity and traditional beliefs, for all but a few years from the 1950s in civil wars fueled by ethnicity, religion, oil and ideology.

(Additional reporting by Ulf Laessing, Andrew Heavens and Khaled Abdelaziz in Khartoum and Megan Davies at the United Nations; Writing by Andrew Heavens; Editing by Tim Pearce)

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South Sudan becomes world's newest nation (AFP)

JUBA (AFP) – Celebrations erupted in South Sudan on Saturday as the world's newest nation proclaimed formal independence and turned the page on five decades of devastating conflict with the north.

"Our martyrs did not die in vain... We have waited for more than 56 years for this day. It is a day that will be forever engraved on our hearts and minds," President Salva Kiir told tens of thousands of jubilant southerners at the official ceremony in Juba.

Earlier, parliament Speaker James Wani Igga read out the declaration of the south's secession from the north following a near unanimous vote for separation in a January referendum.

"We, the democratically elected representatives of the people, based on the will of the people of South Sudan, and as confirmed by the outcome of the referendum of self-determination, hereby declare South Sudan to be an independent and sovereign nation," Wani Igga told the cheering crowds.

South Sudan's national flag was then raised, to wild applause, tears and song.

"I should cry for the recognition of this flag among the flags of the world," shouted one tearful man.

"We have been denied our rights. Today, no more shall that happen."

The declaration of independence affirmed the new state's democratic and multi-ethnic and multi-confessional character, and its commitment to friendly relations with all countries "including the Republic of Sudan."

Sudanese President Omar al-Bashir, guest of honour at the ceremony, watched a parade by thousands of members of his former military foes, the SPLA, whom he failed to defeat as head of the northern army for 16 years.

In a conciliatory speech, Bashir repeated his wish to see the newborn nation succeed.

"We will fulfill our commitment to help the new state of South Sudan in its first steps, because we want it to succeed, and because its success will be our success," Bashir said.

From early morning, revellers had gathered at the venue amid tight security for the ceremony which was attended by dozens of African leaders and senior Western officials.

It was the largest international gathering ever seen in the war-damaged former garrison town on the White Nile that lacks even basic infrastructure, and army generals were asked to vacate their seats to make space for foreign guests.

International dignitaries attending the ceremony included UN Secretary General Ban Ki-moon, US ambassador to the UN Susan Rice, EU foreign policy chief Catherine Ashton and British Foreign Secretary William Hague

More than a dozen African leaders also attended.

Recognition of the newly independent state flooded in from around the world, with US President Barack Obama vowing to support South Sudan in the "hard work" of nation building.

British Prime Minister David Cameron called it a historic day "for South Sudan and the whole of Africa."

Ban hailed the new state's birth "after a struggle that destroyed so many lives for so many years," and said it was an important day for the United Nations which has been engaged in promoting peace in Sudan for many years.

South Sudan's independence came exactly six months after southerners voted almost unanimously to split with their former civil war enemies in the north.

For decades, until a peace agreement was signed in 2005, southern rebels fought successive wars with the north, leaving the region in ruins, millions of people dead and a legacy of mutual mistrust.

The independence ceremony was held at the mausoleum of the late rebel leader John Garang, who died just months after signing the peace accord that ended Africa's longest-running conflict and opened the door to nationhood.

Roman Catholic Archbishop Paulino Lokudu appealed for reconciliation after the long years of civil war.

"We pray for a new mentality of mutual understanding and cooperation between our two new neighbouring nations," he said.

Some at the ceremony were critical of Bashir, who is wanted by the International Criminal Court on charges of crimes against humanity and genocide in Darfur, Sudan's war-torn western region.

Around 200 supporters of Darfur rebel leader Abdelwahid Nur held a banner reading: "The new beginning," and "Together we must stop genocide in Darfur, Nuba Mountains."

The Nuba Mountains in South Kordofan state in the north have seen deadly clashes in the run-up to southern independence between northern troops and pro-southern militia.

But Khartoum was among the first countries to officially recognise the fledgling nation, which now needs all the help it can get to meet the challenges of building a stable and prosperous future.

For this, it must strike a cooperative relationship with Bashir, given the strong ties that continue to bind the two countries, and despite the strain on relations caused by the bloodshed in the Nuba Mountains.

Bashir said it was the joint responsibility of both nations to build confidence and reach agreement on outstanding issues that were not resolved before partition, during talks in Addis Ababa.

Kiir called on his people to forgive those who had caused them suffering and urged them to take responsibility for building a "strong foundation" for their nation.

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South Sudan is world's newest nation at midnight (AP)

JUBA, Sudan – When Southern Sudan becomes the world's newest country on Saturday, its people will rejoice in the streets as it enters statehood as one of the poorest and least developed places on earth.

But advocates and diplomats warned Friday that when the celebrations subside and the dignitaries leave, unresolved problems between the south and the northern government, could spark renewed conflict along their new international border.

The internationally-brokered 2005 peace deal that ended more than two decades of north-south war expires Saturday.

South Sudan becomes its own nation at midnight. The U.N. recognizes 192 countries; South Sudan will be 193.

Sudan, the country South Sudan is breaking away from, will recognize the new country as soon as Friday turns to Saturday.

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Rockets push back rebels south of Libyan capital (Reuters)

BIR-AYYAD, Libya (Reuters) – Libyan rebels who had advanced to within 80 km (50 miles) of Muammar Gaddafi's stronghold in the capital were forced to retreat Friday after coming under a barrage of rocket fire from government forces.

The rebels' advance five days ago to the outskirts of the small town of Bir al-Ghanam had raised the possibility of a breakthrough in a four-month old conflict that has become the bloodiest of the "Arab Spring" uprisings.

Rebel fighters who had been massing on a ridge near Bir al-Ghanam and preparing for an attack were now pulling back under fire from Russian-made Grad rockets, said a Reuters photographer in Bir-Ayyad, 30 km to the south.

He said the rocket barrage was now reaching as far back as Bir-Ayyad, a road junction in the foothills of the Western Mountains range south-west of Tripoli from where the rebels had launched their advance last week.

The reversal underlines the resilience of Gaddafi's forces, who have withstood 15 weeks of bombardment by NATO missiles and warplanes, and attempts by rebels on three fronts to break through their lines.

Frustration at the slow progress is growing inside the military alliance, with some members worried about the cost, civilian casualties and the fact the campaign has now been going on much longer than its backers anticipated.

There are also differences about how proactive NATO members should be in aiding the rebels, who are hampered by a lack of organization and a shortage of equipment.

France this week became the first member of the anti-Gaddafi alliance to acknowledge that it had supplied weapons to the rebels, saying this was justified to protect civilians under threat from Gaddafi's forces.

It said it used parachutes to drop assault rifles and rocket launchers, along with humanitarian supplies, to rebels in the Western mountains.

That admission prompted Russia, a permanent member of the United Nations Security Council, to accuse France of a "gross violation" of a U.N. arms embargo.

Even France's NATO allies distanced themselves from the French operation, though Britain and the United States said they believed it was justified under U.N. rules.

NATO STRIKE

Libyan state television reported that NATO had bombed military and civilian sites in the government-controlled town of Garyan, on the eastern edge of the Western Mountains.

NATO said it had successfully destroyed a military target in the town Friday.

"It should be noted that the target was well outside the built-up area of the conurbation and no collateral damage was observed afterwards. At no time was any civilian area targeted," a NATO official said.

Gaddafi has said the NATO campaign is an act of colonial aggression aimed at stealing Libya's plentiful oil. His aides say arrest warrants issued Monday by the International Criminal Court for him, his son and his brother-in-law have no legitimacy because the court is a tool of the West.

Gaddafi's daughter, Aisha, said in a television interview broadcast late Thursday that her father's administration was prepared to cut a deal with the rebels if that was what it took to stop the bloodshed.

The offer marks a shift in tone. Until now Libyan officials have dismissed the rebels as criminals and no one in the Libyan leader's inner circle has publicly raised the possibility of making any accommodation with them.

"There are direct and indirect negotiations and we should stop letting Libyan blood," Gaddafi's daughter said in an interview with France 2 television.

"And for that we are ready to ally with the devil and that is the armed rebels," said Aisha Gaddafi, a lawyer who has no official government role but has often acted as a mediator on behalf of her family.

But she dismissed the prospect of her father going into exile. "This word departure, departure, departure ... what I find strange is where do you want him to go? This is his country, his land, his people," she said.

The London-based Asharq al-Awsat newspaper reported Gaddafi's representatives had been meeting officials from France and Britain on the Tunisian island of Djerba.

Citing unnamed sources from the Gaddafi and opposition camps, the newspaper said Gaddafi was willing to step down if he was spared prosecution and allowed to live in his hometown of Sirte, northern Libya, with guarantees for his security.

There was no confirmation of the report from Gaddafi's government, Britain or France.

OPTIONS NARROWING

Anti-Gaddafi rebels rejected talks with the Libyan leader's administration after the International Criminal Court issued its arrest warrants, saying there was no point talking to a war criminal.

Some Libya-watchers say Gaddafi has floated the possibility of a peace deal several times to stall for time and weaken the resolve of the Western alliance to push him out.

But others say he may be looking for a negotiated exit as his options narrow. International sanctions are causing a shortage of fuel in Gaddafi-controlled areas, and NATO strikes are eroding his ability to enforce his power.

The Libyan conflict has sent ripples far beyond the North African country of six million people.

The fighting has halted Libyan oil exports, helping push up world crude prices to about $111 a barrel.

It has also created a security vacuum which officials in the region say could be exploited by Islamist militants and al Qaeda's North African wing.

"If this civil war goes on, it would be a new Somalia, which I don't say lightly. In three months we could be dealing with extremists," Marouane Abassi, World Bank country manager for Libya, told Reuters in the Tunisian capital.

(Additional reporting by Tarek Amara and Andrew Hammond in Tunis, David Brunnstrom in Brussels, Sami Aboudi in Dubai and John Irish in Paris; Writing by Christian Lowe; editing by Ralph Boulton)

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Yemen's Saleh to reappear as violence grips south (Reuters)

RIYADH/SANAA (Reuters) – Wounded Yemeni President Ali Abdullah Saleh, not seen in public since an attack on his palace in early June, is well enough to return soon to Yemen and will make a media appearance within the next couple of days.

Speculation about Saleh's health and the likelihood of his return to Yemen have been rife since he was hurt in a bomb blast on June 3 in a mosque in his presidential palace. He flew to Saudi Arabia for treatment, leaving behind a country on the verge of civil war.

The president has not been seen in public since the explosion, which killed several people and wounded the prime minister, two deputy prime ministers and the speakers of both parliamentary chambers. It is not clear what role if any Saleh, under pressure to step down, sees for himself in ruling Yemen.

"He will appear within the next 48 hours despite our fear that the burns on his features and on different parts of his body will be an obstacle given that his appearance will not be as the media expects it," said Ahmed al-Sufi, the President's media secretary.

Yemen has been rocked by months of protests against Saleh's three decades of rule. Before that he was grappling with a rebellion in the north, separatist violence in the south and a resurgent wing of al Qaeda.

Sufi said Saleh was in good health and continued to direct Yemeni affairs from abroad. Saleh's deputy Abd-Rabbu Mansour Hadi has been at the helm while the president recovers.

A source close to the president said Saleh's condition was good enough to allow him to travel to Yemen soon.

"The bomb in the mosque was in close proximity to the president when it went off. He was really lucky to get out," the source, who was with Saleh during the attack, told Reuters.

Saleh is suffering from burns but they cover less than 40 percent of his body, the source said, addressing reports in recent weeks about the extent of his injuries.

Yemeni officials previously accused an opposition tribal coalition of shelling the palace, which it denied.

ANTI-SALEH MARCH

Last week, a Western diplomat told Reuters Saleh was unlikely to return home soon, as Saudi Arabia and the United States continue to push for a transfer of power under an existing Gulf Arab proposal for a transition in Yemen.

They fear a power vacuum and tribal warfare will be exploited by the local wing of al Qaeda to launch attacks in the Gulf region and beyond.

Tens of thousands marched in Sanaa on Sunday to demand Saleh leave power, condemning the United States and Saudi Arabia for what they saw as a failure to take a strong stand against him.

"The position of the United States and Saudi Arabia is against our revolution ... We want a transition council to be set up and for the remainders of the regime to leave," said demonstrator Imar Naji, referring to Saleh's sons who hold top military and security posts.

The proposal by Gulf Arab neighbors calls for Saleh to hand power over to his deputy, Vice President Abd-Rabbu Mansour Hadi, who is acting president, as a step toward forming a new government and preparing for an election.

Ahmed Saleh, the president's son who heads the elite Republican Guards, said he backed Hadi's "efforts ... and meetings with opposition leaders and representatives of the international community to resolve the crisis..."

But he also voiced support for "constitutional legitimacy," terms often used by Saleh backers to justify his refusal to leave power, according to a statement on a Defense Ministry website.

Upon his return, President Saleh aims to propose two solutions, a source close to Saleh said.

"The first is to shift all power to the parliament and become just a figurehead," said the source. "The second will be to let a coalition government be formed and then hold early presidential elections and leave quietly."

VIOLENCE IN SOUTH

Underscoring the chaos in the country, especially in the south, an air raid on Saturday killed six militants on the outskirts of a village at the entrance to the volatile Abyan province.

A local official in Abyan told Reuters three soldiers were killed on Sunday in clashes with jihadist militants who took control of the province's capital Zinjibar in May.

Earlier, authorities detained the head of a prison and his deputy for questioning over the escape of 63 al Qaeda-affiliated inmates in the southern port city of al-Mukalla this week.

The jailbreak stoked fears militants are exploiting the unrest to gain a foothold in the impoverished state, from which they could launch attacks in the region and beyond.

Saleh's opponents say he is deliberately letting militants tighten their grip in the country to prove that only he stands in the way of an Islamist takeover.

In a sign of international unease, The U.N. Security Council voiced "grave concern" with the deteriorating security situation in Yemen, putting aside disagreements that had prevented the 15-nation body from speaking unanimously on the unrest there. (Additional reporting by Mohammed Mukhashaf in Aden and Mohammed Ghobari in Sanaa; writing by Isabel Coles; Editing by Ralph Boulton)

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