Electrical fault corrected, 'Big Bang' collider to restart soon

(GNN) - CERN engineers said on Tuesday they have resolved a problem that had delayed the relaunch after a two-year refit of the Large Hadron Collider particle smasher, which is probing the mysteries of the universe.

A statement from the research center just outside Geneva said a metal fragment that caused an intermittent short circuit in one of the giant magnets in the vast underground complex had been successfully removed.

The relaunch of the so-called 'Big Bang' machine had to be postponed last week because of the problem.

CERN said that after new tests on all the circuits in the area where the fault appeared, the way would be clear for proton particles to be sent in opposite directions right around the machine's 27-kilometre underground tubes.

This could happen "in a few days", the statement said.

However, proton particle collisions at twice the power of the first runs, which brought the discovery of the long-sought Higgs boson, will not begin until May, physicists say.

These collisions, at almost the speed of light, create the chaotic conditions inside the LHC close to those that followed the Big Bang 13.8 billion years ago, from which the universe eventually emerged.

The product of the collisions is captured in the collider's giant detectors and is analyzed by scientists at CERN and around the world for signs of new information about the cosmos and how it works at the elementary particle level.

Among the aims of scientists at the revamped LHC is to establish the existence of the unseen dark matter that makes up around 96 per cent of the stuff of the universe, but has only been detected through its influence on visible objects.

(Reuters)(Reporting by Robert Evans; Editing by Crispian Balmer)

Obama to Iran's people: 'Best opportunity in decades' to pursue different future with U.S.

(GNN) - U.S. President Barack Obama, in a message to Iran's people and leaders on Thursday, said this year represented the "best opportunity in decades" to pursue a different relationship between their two countries.

Obama said nuclear talks between Iran and Western powers had made progress but that gaps remained.

"This moment may not come again soon," Obama said in his message celebrating Nowruz, the Iranian New Year. "I believe that our nations have an historic opportunity to resolve this issue peacefully - an opportunity we should not miss."

Iran and six world powers are seeking a comprehensive agreement to curb Iran's most sensitive nuclear activities for at least 10 years in exchange for a gradual end to sanctions against Tehran. The powers aim to complete the framework of a final deal by the end of March and reach a full agreement by June 30.

Western powers and their allies suspect Tehran of wanting to create an atomic weapons capability. Tehran denies that and says its nuclear ambitions are purely peaceful.

The talks have raised concerns among U.S. lawmakers that the White House will cut Congress out of any deal and will treat Iran too lightly.

Obama said in his message that "the days and weeks ahead will be critical. Our negotiations have made progress, but gaps remain. And there are people, in both our countries and beyond, who oppose a diplomatic resolution."

"My message to you - the people of Iran - is that, together, we have to speak up for the future we seek," he said, adding: "This year, we have the best opportunity in decades to pursue a different future between our countries."

Obama said Iran's leaders in the talks had a choice between keeping their country on the current path of isolation and sanctions or putting it on the road to more trade and investment with the rest of the world.

"This is what’s at stake today," Obama said. "And this moment may not come again soon. I believe that our nations have an historic opportunity to resolve this issue peacefully - an opportunity we should not miss."

(Reuters)(Reporting by Jeff Mason; Writing by Peter Cooney; Editing by Sandra Maler)

Netanyahu poised for governing coalition after final vote tally

(GNN) - Israeli Prime Minister Benjamin Netanyahu is poised to lead a heavily right-leaning coalition government with control of 67 of parliament's 120 seats, according to final election results released on Thursday.

Netanyahu's right-wing Likud party won 30 seats, compared with 24 for his main rival, the center-left Zionist Union. It was a huge gain from the last election in 2013, when Likud won 18. Zionist Union's leader, Isaac Herzog, conceded defeat.

"The reality is clear, the reality dictates that we will be in opposition and will be an alternative on each issue," he told Army Radio, dismissing any idea of a unity government.

President Reuven Rivlin has said that on Sunday he will begin to ask leaders of parties that won election to parliament to recommend a candidate to form a government. The nominee, almost certainly to be Netanyahu, will have 42 days to do so.

Since no one faction captured an outright parliamentary majority in Netanyahu's come-from-behind victory, Israel will again be governed by a coalition of parties -- as it has been throughout its 67-year history.

Netanyahu, who has publicly ruled out a broad government with Zionist Union, is expected to ask far-right parties Jewish Home (8 seats) and Yisrael Beitenu (6), and religious factions Shas (7) and United Torah Judaism (6) to join him.

That would put him in command of 57 seats -- still short of a majority -- making a new centrist party, Kulanu, which won 10 seats, the kingmaker.

Kulanu's leader, Moshe Kahlon, a former Likud cabinet minister, has been offered the post of finance minister in Netanyahu's government, and has said he would weigh the offer.

Political commentators expect Kahlon, who pledged during the campaign to work to lower the high cost of living, to sign on as a member.

The right-leaning government is likely to pursue tough policies towards the Palestinians, including further settlement building in the occupied West Bank and East Jerusalem.

On the eve of the election, Netanyahu drew Palestinian and international outrage by declared there would be no Palestinian state on his watch, backtracking from a 2009 pledge to pursue a two-state solution to the decades-old conflict.

The final voting results, issued after ballots cast by soldiers in military bases and patients in hospitals were counted, raised Likud's seat total from 29 to 30 and gave the left-wing Meretz party 5 seats instead of 4.

(Reuters)(Editing by Giles Elgood)

Netanyahu: I haven't changed policy on Palestinian state - MSNBC

(GNN) - Israeli Prime Minister Benjamin Netanyahu denied on Thursday abandoning his commitment to the eventual creation of a Palestinian state, backing away from comments he made during his re-election campaign that drew sharp criticism from Israel's ally the United States.

"I haven't changed my policy. I never retracted my speech in Bar-Ilan University six years ago calling for a demilitarized Palestinian state that recognizes the Jewish State," Netanyahu said in an interview with MSNBC two days after winning a bitterly contested Israeli election.

"What has changed is the reality," Netanyahu said, citing the Palestinian Authority's refusal to recognize Israel as a Jewish state and the Hamas militant group's continued control of the Gaza Strip.Netanyahu drew a sharp rebuke from the United States and the international community for his comments on the eve of Tuesday's election that there would be no Palestinian state created on his watch. The quest for Palestinian statehood is a cornerstone of both U.S. diplomacy going back decades and President Barack Obama's Middle East policy.

On Wednesday, the White House scolded Netanyahu for abandoning his commitment to negotiate for a Palestinian state and for "divisive" campaign rhetoric toward Israel's minority Arab voters.

Netanyahu backed off his election eve comment on Thursday.

"I don't want a one-state solution. I want a sustainable, peaceful two-state solution. But for that, circumstances have to change," he told MSNBC.

In another signal that the Obama administration is looking to turn up the heat on Netanyahu after his re-election, the White House is sending Obama’s chief of staff, Denis McDonough, to address the liberal pro-Israel U.S.-based group J Street on Monday.

The group, a proponent of two states side by side, opposed Netanyahu in the election campaign and sharply criticized both his reversal on Palestinian statehood and remarks in which he accused left-wingers from abroad of working to turn out minority Arab Israeli voters to unseat him.

In the television interview, Netanyahu dismissed any suggestion he was racist. "I'm not," he said.

Netanyahu's frosty relations with Obama worsened when he accepted a Republican invitation to speak to Congress two weeks before the Israeli election, a move assailed by Democratic leaders as an insult to the presidency and a breach of protocol.

Partisan divisions over the Israeli leader burst into the open again in Congress on Thursday when several Republican members accused Obama of throwing a "temper tantrum" over the Netanyahu address.

Democratic Representative Gerry Connolly shot back: "I cannot let that go by. A foreign leader has insulted the head of state of the United States government. It’s not a temper tantrum, and it didn’t start with President Obama."

Netanyahu, who received a congratulatory phone call from U.S. Secretary of State John Kerry on Wednesday, said he was sure he would speak with Obama soon. "We'll work together," he told MSNBC. "We have to."

(Reuters)(Reporting by Doina Chiacu, Matt Spetalnick and Anna Yukhanov; Writing by Doina Chiacu; Editing by Howard Goller)

U.S. 'deeply disturbed' by reports of chemical weapons in Syria: Kerry

(GNN) - The United States is deeply disturbed by reports that Syrian government forces attacked the town of Sarmin using chlorine as a weapon on Tuesday, Secretary of State John Kerry said in a statement on Thursday.

"We are looking very closely into this matter and considering next steps," he said. "While we cannot yet confirm details, if true, this would be only the latest tragic example of the Assad regime's atrocities against the Syrian people, which the entire international community must condemn."

A group monitoring the Syrian civil war said on Tuesday that government forces carried out a poison gas attack that killed six people in the northwest, and medics have posted videos of children suffering what they said was suffocation.

But a Syrian military source described the report of an attack on the town in Idlib province as propaganda.

Kerry has been getting tough on Syria in recent days after raising concerns among Middle East allies that the United States is open to negotiating with Assad, who has been fighting Islamist and other rebels since 2011. The State Department has said the United States is seeking a negotiated political settlement but one that excludes Assad.

Syria agreed in 2013 to destroy its entire chemical weapons program under a deal brokered with the United States and Russia after hundreds of people were killed in a sarin gas attack on the outskirts of the capital, Damascus.

Syria’s ambassador to the global chemical weapons watchdog said on Thursday that his country condemned any use of chemical weapons, without mentioning any specific incidents, according to Syrian state news agency SANA.

Envoy Basam al-Sabagh said Damascus had provided the Hague-based Organisation for the Prohibition of Chemical Weapons (OPCW) with documents in December showing armed groups had used chlorine gas in Syria, the SANA report said.

It cited Sabagh’s comments to the OPCW’s executive council in a session on Thursday in which he also said Syria had fulfilled all of its obligations under the Chemical Weapons Convention.

The OPCW has found evidence that chlorine gas was repeatedly used as a weapon in the country.

(Reuters)(Reporting by Lisa Lambert; Additional reporting by Sylvia Westall in Beirut; Editing by Eric Beech and Jonathan Oatis)

European negotiator says framework accord with Iran unlikely soon

(GNN) - Six world powers are unlikely to reach a framework agreement with Iran on its nuclear work in the coming days as the sides are still far apart on key issues, a senior European negotiator said on Thursday, blaming Tehran for failing to compromise.

"Contrary to what the Iranians are saying with regard to 90 percent of an accord being done, that's not correct," the negotiator told reporters on condition of anonymity. "We are not close to an agreement."

Iran and six world powers are seeking a comprehensive agreement to curb Iran's most sensitive nuclear activities for at least 10 years in exchange for a gradual end to sanctions. The powers aim to complete the framework of a final deal by the end of March and reach a full agreement by June 30.

A senior U.S. State Department official on Thursday denied reports there was a draft nuclear deal in circulation among six world powers and Iran. An Iranian official echoed the denial. Several Western officials had privately spoken of a document with brackets highlighting areas of disagreement.

One major stumbling block is that Iran is pressing world powers to agree to start easing some restrictions on its atomic program earlier than Western countries are willing to accept, Western and Iranian officials said.

The current round of talks Switzerland may need to continue beyond Friday, the State Department official said.

"We are pretty far away. There are a lot of issues that still need to be resolved. The Iranians must make substantial concessions," the European negotiator said.

U.S. Secretary of State John Kerry said the sides were working on difficult issues.

"We're pushing some tough issues but we made progress," Kerry told reporters, adding that it was unclear when the U.S. delegation would return to Washington.

In Washington, a senior Treasury official said the Obama administration would work with Congress to impose further sanctions on Iran if a nuclear deal is not reached.

U.S. lawmakers have been concerned the White House would cut Congress out of any deal, and would treat Iran too lightly.

Despite the gaps between the two sides in Lausanne, there have, however, been some areas of rough agreement. One of the central issues under discussion from the beginning was the number of centrifuges Iran would be permitted to operate. Western officials have said that number of would likely be around 6,000 if an agreement is reached.

Iranian Atomic Energy Organisation chief Ali Akbar Salehi, who is close to Iran's Supreme Leader, said on Tuesday that an accord was 90 percent agreed with only one issue unresolved.

Highlighting tensions after five days of talks, Salehi and Foreign Minister Mohamad Javad Zarif were captured by a Reuters photographer in a heated argument on the lawns of the luxury hotel overlooking the French Alps.

STICKING POINTS

Iranian Deputy Foreign Minister Hamid Baidinejad confirmed that there were a number of sticking points.

"Contrary to what many think, that we are only discussing one issue, it is not correct," he told reporters. "We are discussing many issues and nothing is agreed until everything is agreed."

He cited research and development into centrifuges as a sticking point.

"We are still discussing R&D along with other issues, technical and political issues," he said.

U.S. and European officials worry that Iranian research into more advanced centrifuges, the machines that purify uranium for use as fuel for reactors or, if very highly enriched, in bombs, could give it the capability to quickly produce an atomic arsenal. Tehran denies harboring any such ambitions.

The European negotiator said that if Iran does not give in on this issue, there will be no nuclear deal at all.

"Research and development currently has become the most critical and difficult issue, and there won't be an accord if the Iranians don't back down," he said.

Western officials said the duration of a deal was also an unresolved point.

President Barack Obama told Reuters in an interview this month that Iran would have to accept limits on its nuclear activities for at least 10 years under any deal.

France is pushing for at least 15 years for the agreement, followed by a 10-year period of intense monitoring by the U.N. International Atomic Energy Agency the European negotiator said.

Western officials said the United States was also pushing for restrictions on sensitive nuclear work by Tehran to be in place for more than a decade.

One diplomat referring to Israeli Prime Minister Benjamin Netanyahu's electoral win earlier this week said French negotiators had again adopted a tougher stance.

"It is like Netanyahu is sitting in the room and not French delegation," he said in a reference to Paris' opposition to an initial interim agreement in Nov. 2013.

Another major stumbling block is Iran's demand that all U.N. Security Council sanctions, including those targeting its nuclear program, be lifted immediately.

"They insist they have to go immediately. No way. It is out of the question," said the negotiator.

The United States has been calling for a written political agreement to be signed by the end of March. But Iran has rejected the idea of a written interim deal before a final deal by June 30.

Baidinejad said that if there was a framework agreement this month, it would not be in writing.

"There will be no written agreement," he said. "It will be kind of verbal agreement that will pave the ground for further talks."

(This story has been refiled to clarify attribution in paragraph 7)
(Reuters)(Additional reporting by Parisa Hafezi and Louis Charbonneau; Editing by Angus MacSwan and Giles Elgood)

Obama to sign order cutting U.S. government greenhouse gas emissions

(GNN) - U.S. President Barack Obama will sign an executive order on Thursday that sets a goal for the U.S. government to cut its greenhouse gas emissions by 40 percent by 2025, the White House said.

Although the federal government accounts for only 0.7 percent of net U.S. emissions, it is the single largest energy consumer in the United States, according to the White House.

Meeting the goal would cut 21 million metric tons of greenhouse gas emissions from 2008 levels, it said.


Several large private-sector partners, including IBM, General Electric and Honeywell, also committed to cutting a combined 5 million metric tons.

Obama has made fighting climate change a top priority in his final two years in office. The White House sees it as critical to his legacy.

In November, Obama reached an agreement with Chinese President Xi Jinping that set a goal of reducing overall U.S. greenhouse gas emissions by 26 percent to 28 percent below 2005 levels by 2025. China agreed to begin lowering its carbon dioxide emissions by 2030, with the intention of trying to do so earlier.

White House senior adviser Brian Deese said the federal government's share of greenhouse gas emissions in the overall U.S. economy is "modest," but said the announcement is significant.

"The potential from this announcement, however, is significant both because we can drive substantial reductions across the entire federal footprint and because our efforts to do that leverage both innovation and investment in the private sector," Deese said on a call with reporters.

The Environmental Protection Agency last year offered a Clean Power Plan that set deadlines for states to submit proposals to meet power plant carbon emission reduction goals.

A dozen states, including Kentucky, West Virginia, Indiana and Wyoming, sued the EPA last August, soon after the plan was unveiled, saying its use of a certain section of the Clean Air Act was illegal. The federal D.C. Circuit Court of Appeals will hear the case on April 16.

Obama's budget proposal for fiscal 2015, released last month, called for a 7 percent boost in funding for clean energy and a $4 billion fund to encourage U.S. states to make faster and deeper cuts to emissions from power plants. It also called for the permanent extension of tax credits used by the wind and solar power industries.

(Reuters)(Additional reporting by Valerie Volcovici; Editing by Dan Grebler)

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Burger King in merger talks with Canada's Tim Hortons

#GNN - Burger King (BKW.N) is in talks to combine with Canadian coffee and doughnut chain Tim Hortons Inc (THI.TO) in a deal that would create a fast food powerhouse with a market capitalization of roughly $18 billion.

The companies confirmed merger discussions late on Sunday, and said the new company would be the world's third-largest quick service restaurant. It would be based in Canada, which has lower overall corporate taxes than the United States.

The proposed deal would be structured as a so-called tax inversion transaction to move Burger King's domicile out of the United States, and could come as soon as in the next few days, according to sources familiar with the discussions.

Recent attempts by companies for tax inversion deals, which are made to avoid higher U.S. taxes and save money on foreign earnings and cash held outside the United States, have drawn the attention of President Barack Obama, who criticized a "herd mentality" by companies seeking such deals.

Walgreen Co (WAG.N) recently decided against a tax inversion deal in its acquisition of European pharmacy chain Alliance Boots ABN.UL, saying it was "not in the best long-term interest of shareholders to attempt to re-domicile outside the U.S." [ID:nL6N0QC35L]

Amid heightened political sensitivity in the United States to such tax-cutting transactions, Walgreen said it was mindful of the public reaction to a potential inversion deal and its role as an "iconic American consumer retail company with a major portion of its revenues derived from government-funded reimbursement programs."

3G MAINTAINING MAJORITY
The companies said 3G Capital, the majority owner of Burger King, will continue to own the majority of the shares in the new combined entity on a pro forma basis, with the remainder held by existing shareholders of Tim Hortons and Burger King.

3G, a New York-based investment firm with Brazilian roots, acquired the then struggling Burger King in 2010 for about $3.3 billion. It later took the company back to market in 2012 but still owns nearly 70 percent of the firm's shares, according to Thomson Reuters data.

Tim Hortons and Burger King are set to operate as standalone brands within this new entity while benefiting from shared corporate services, the companies said.

Burger King said its experience in building a large global footprint would allow it to help accelerate Tim Hortons's growth in international markets.

If a deal gets sealed this wouldn't be the first time the iconic Canadian restaurant chain moves into foreign hands. It was bought by Wendy's International Inc in 1995, but later spun out in 2006 after the fast food chain came under pressure from activist investor Nelson Peltz.

While operated from Oakville, Ontario, it kept its corporate headquarters in Delaware before moving it back to Canada in 2009. Canadian Prime Minister Stephen Harper took some credit for the move, citing the Conservative government’s decision to cut the corporate tax rate.

Since coming to power in 2006, the Conservatives have cut Canada's corporate tax rate to 15 percent. Public companies also have to pay provincial corporate taxes that then bring their combined federal and provincial tax rate to about 25 percent or higher.

Tim Hortons and Burger King said they do not plan to comment on this potential deal further unless and until a transaction is agreed, or discussions are discontinued.

Burger King, founded in 1954 and headquartered in Miami, Florida, operates over 13,000 locations in nearly 100 countries and territories across the globe. It has a market capitalization of about $9.55 billion.

Oakville, Canada-based Tim Hortons operates more than 3,500 system wide restaurants in Canada and over 850 in the United States. Its U.S. market cap stands at about $8.4 billion.

(GNN)(Reuters)(AIP)(Additional reporting by Chuck Mikolajczak, Olivia Oran and Mike Stone; Editing by Leslie Adler, Stephen Coates and Ryan Woo)

Nigeria isolates hospital in Lagos as Obama briefed on Ebola outbreak

#GNN - The #Nigerian city of Lagos shut and quarantined a hospital on Monday where a Liberian man died of the Ebola virus, the first recorded case of the highly-infectious disease in Africa's most populous country.

Patrick Sawyer, a consultant for Liberia's Finance Ministry in his 40s, collapsed on arrival at the Lagos airport on July 20. He was put in isolation at the First Consultants Hospital in Obalende, one of the most crowded parts of a city that is home to 21 million people. He died on Friday.

"The private hospital was demobilized (evacuated) and the primary source of infection eliminated. The decontamination process in all the affected areas has commenced," Lagos state health commissioner Jide Idris told a news conference. He said the hospital would be closed for a week and the staff would be closely monitored.

Ebola has killed 672 people in Guinea, Liberia and Sierra Leone since it was first diagnosed in February. The fatality rate of the current outbreak is around 60 percent although the disease can kill up to 90 percent of those who catch it. Highly contagious, its symptoms include vomiting, diarrhea and internal and external bleeding.

In Sierra Leone, which has the highest number of Ebola cases in the current outbreak at 525, President Ernest Bai Koroma visited an Ebola center in the northeastern district of Kenema.

An administration official said President Barack Obama was receiving updates, and noted that U.S. agencies had stepped up assistance to help contain the virus.

Susan Rice, Obama's national security adviser, said in a televised interview on Monday the outbreak was of "grave concern."

"We are very much present and active in trying to help the countries of the region and the international authorities like the World Health Organization address and contain this threat. But it is indeed a very worrying epidemic," Rice told MSNBC.

HOSPITAL STAFF, OTHERS MONITORED
Authorities were monitoring 59 people who were in contact with Sawyer, including airport contacts, the Lagos state health ministry said, but it said the airline had yet to provide a passenger list for the flights Sawyer used.

Derek Gatherer, a virologist at Britain's University of Lancaster, said anyone on the plane near Sawyer could be in "pretty serious danger," but that Nigeria was better placed to tackle the outbreak than its neighbors.

"Nigerians have deep pockets and they can do as much as any Western country could do if they have the motivation and organization to get it done," he said.

Nigeria's largest air carrier Arik Air has suspended flights to Liberia and Sierra Leone because of the Ebola risk, Arik spokesman Ola Adebanji said in an email on Monday.

"RED ALERT"
David Heymann, head of the Centre on Global Health Security at London's Chatham House, said every person who had been on the plane to Lagos with Sawyer would need to be traced and told to monitor their temperature twice a day for 21 days.

The World Health Organization said in a statement that Sawyer's flight had stopped in Lomé, Togo, on its way to Lagos.

"WHO is sending teams to both Nigeria and Togo to do follow- up work in relation to contact tracing, in particular to contacts he may have had on board the flight," spokesman Paul Garwood said.

Liberia closed most of its border crossings and introduced stringent health measures on Sunday, a day after a 33-year-old American doctor working there for the relief organization Samaritan's Purse tested positive for Ebola.

Nigeria's airports, seaports and land borders have been on "red alert" since Friday over the disease.

Exacerbating the difficulty of containing the virus, Nigerian doctors are on strike over conditions and pay.

The WHO said that in the past week, its regional director for Africa, Luis Sambo, had been on a fact-finding mission to Guinea, Liberia and Sierra Leone, which have 1,201 confirmed, suspected and probable cases among them.

"He observed that the outbreak is beyond each national health sector alone and urged the governments of the affected countries to mobilize and involve all sectors, including civil society and communities, in the response," the WHO said.

(GNN,Reuters,AIP)(Reporting by Tim Cocks, additional reporting by Oludare Mayowa in Lagos, Tom Miles in Geneva, Kate Kelland in London, Roberta Rampton in Washington, and Umaru Fofana in Freetown; writing by Toni Reinhold, editing by G Crosse)

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Kerry to woo Modi's India, but quick progress unlikely

#GNN - U.S. Secretary of State John Kerry visits India this week as Washington tries to revitalize ties it sees as a counterbalance to China's rising power, but rapid progress is unlikely, despite the reformist reputation of India's new leader.

The visit by Kerry, and a trip by Defense Secretary Chuck Hagel next month, follow the resounding election win of Prime Minister Narendra Modi in May and are meant to create a good climate for Modi's planned visit to Washington in September.

Analysts say it is only once Modi meets President Barack Obama that the United States may have a more realistic hope for progress on big defense projects, on removing obstacles to U.S. firms' participation in India's nuclear power industry, and for firmer statements of shared interests in Asia.

"India will play a much greater role in Asia under the Modi administration, but it will do so for its own reasons and under its own terms," said Ashley Tellis of Washington's Carnegie Endowment for International Peace think tank.

Four years ago, Obama declared the U.S.-India relationship would be "one of the defining partnerships of the 21st century" and last week the State Department called it one of "enormous strategic importance."

But while the two countries are in many ways natural allies, as big democracies with shared concerns about Islamist militancy and the rise of China, the relationship falls far short of Obama's rhetorical billing.

Disputes over protectionism and intellectual property rights have soured the business climate and India has remained cautious about committing to U.S. strategic designs, given concerns that U.S. power, eroded by domestic budget battles, may be waning.

The relationship took a dive last year after an Indian diplomat was arrested in New York on charges of mistreating her domestic help, an episode that provoked outrage and resentment in New Delhi.

Modi, whose Hindu nationalist Bharatiya Janata Party swept to an overwhelming victory after years of shaky Indian coalitions, has yet to make clear how closely he plans to work with Washington.

The potential for tension was always high. He was banned from visiting the United States after Hindu mobs killed more than 1,000 people, most of the Muslims, while he was chief minister of his home state of Gujarat.

The Obama administration sought to turn a new page by quickly inviting Modi to Washington after his election, and was pleased by his quick positive response.

Kerry will be heading the U.S. team at the annual Strategic Dialogue with India on Thursday, and will be accompanied by U.S. Commerce Secretary Penny Pritzker.

MODI MYSTERY
The BJP has a strong streak opposed to Western dominance of world affairs and this meshes with the rise of the BRICS block of five powerful emerging nations, which includes China, that see themselves as a counterbalance to U.S. hegemony.

One of Modi's first moves on the world stage since taking office was to sign up to a BRICS development bank intended to wrest control over global finanacial institutions away from the United States and Europe.

On Friday India threatened to block a worldwide reform of customs rules agreed last December, prompting a U.S. warning that its demands on food stockpiling could kill global trade reform. [IN:nL4N0Q02SU]

The deadline for agreeing the trade facilitation deal falls during Kerry's time in New Delhi and a failure to overcome India's objections by next week could overshadow his visit.

The Indian stance has fueled doubts about the extent of Modi's commitment to pushing through economic reforms seen as necessary to spur growth and attract investment.

U.S. officials say Modi's first budget contained some positive signs. But ownership limits in the defense sector were not relaxed enough to allow U.S. firms the controlling stakes they seek in joint ventures, which will make them reluctant to share technology India craves.

Nisha Biswal, U.S. assistant secretary of state for South Asia, spoke this month of the U.S. desire for Indian growth and its greater involvement in Southeast and East Asia, where China's territorial claims have caused increasing alarm.

India, which for decades had close military links with the Soviet Union while leading the world non-aligned movement, is cautious about being too closely associated with U.S. strategic policy, not least because of its economic links with China.

"They will resist packaging their initiatives as a favor done to the United States, or as part of grand American strategy," said Tellis, of the Carnegie think tank.

"They may end up doing pretty much what the United States wants, but they will do so their own way."

(This version of the story was refiled to remove an extraneous word in the third paragraph.)

(GNN,Reuters,AIP)(Reporting by David Brunnstrom in Washington and Frank Jack Daniel and Sanjeev Miglani in New Delhi; Editing by David Storey)

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Obama could curb corporate 'inversions' on his own -ex-U.S. official

#GNN - #President Barack Obama could act without congressional approval to limit a key incentive for U.S. corporations to move their tax domiciles abroad in so-called "inversion" deals, a former senior U.S. Treasury Department official said on Monday.

By invoking a 1969 tax law, Obama could bypass congressional gridlock and restrict foreign tax-domiciled U.S companies from using inter-company loans and interest deductions to cut their U.S. tax bills, said Stephen Shay, former deputy assistant Treasury secretary for international tax affairs in the Obama administration. He also served as international tax counsel at Treasury from 1982 to 1987 in the Reagan administration.

In an article being published on Monday in Tax Notes, a journal for tax lawyers and accountants, Shay said the federal government needs to move quickly to respond to a recent surge in inversion deals that threatens the U.S. corporate tax base.

"People should not dawdle," said Shay, now a professor at Harvard Law School, in an interview on Friday about his article.

If the administration were to take the steps he discusses, Shay said, some of the many inversion deals that are said to be in the works might be halted in their tracks.

The regulatory power conferred by the tax code section he has in mind, known as Section 385, is "extraordinarily broad" and would be a "slam dunk" for the Treasury Department, he said.

A recent sharp upswing in inversion deals is causing alarm in Washington, with Obama last week urging lawmakers to act soon on anti-inversion proposals from him and other Democrats. But Republican opposition has blocked Congress from moving ahead.

Meantime, investment bankers and tax lawyers are aggressively promoting inversion deals among corporate clients, with U.S. drugstore chain Walgreen Co one of several companies known to be evaluating such a transaction.

Medical technology group Medtronic Inc, based in Minnesota, and drug maker AbbVie Inc, of Illinois, are in the midst of inverting to Ireland by buying smaller Irish rivals and shifting their tax domiciles to that country.

The biggest attraction of inversions for U.S. multinationals is putting their foreign profits out of the reach of the U.S. Internal Revenue Service. But another incentive is to make it easier to do so-called "earnings stripping" transactions.

This legal strategy involves making loans from a foreign parent to a U.S. unit, which can then deduct the interest payments from its U.S. taxable income. Plus, the foreign parent can book interest income at its home country's lower tax rate.

Section 385 empowers the Treasury secretary to set standards for when a financial instrument should be treated as debt, eligible for interest deductibility, and when it should be treated as ineligible equity.

If a corporation has loaded debt into a U.S. unit beyond a certain level, Section 385 could be used by the government to declare the excess as equity and ineligible for deductions.

"The stuff I'm describing should be putting a crimp in tax-motivated deals," Shay said. (GNN,Reuters,AIP)(Editing by Eric Walsh)

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Fighting in Gaza abates, but truce hopes look fragile

#GNN - #Fighting subsided in #Gaza on Sunday after #Hamas #Islamist #militants said they backed a 24-hour humanitarian truce and U.S. President Barack Obama called for a ceasefire but there was no sign of any comprehensive deal to end fighting with Israel.

Hamas said it had endorsed a call by the United Nations for a pause in the fighting in light of the upcoming Muslim holiday of Eid al-Fitr, which begins on Monday.

Some firing of rockets continued after the time that Hamas had announced it would put its guns aside and Israeli Prime Minister Benjamin Netanyahu questioned the validity of the truce.

Obama spoke by phone on Sunday with Israeli Prime Minister Benjamin Netanyahu and stressed the need for an immediate, unconditional humanitarian ceasefire in Gaza, the White House said.

Urging a permanent end to hostilities on the basis of the 2012 ceasefire agreement, Obama added that "ultimately, any lasting solution to the Israeli-Palestinian conflict must ensure the disarmament of terrorist groups and the demilitarization of Gaza."

Israeli artillery guns also fired barrages into the Gaza Strip, Israeli media reported, although the objects of the fire was initially unclear.

"Hamas doesn't even accept its own ceasefire, it's continuing to fire at us as we speak," Netanyahu said in an interview with CNN, adding that Israel would "take whatever action is necessary to protect our people".

Nonetheless, Gaza Strip residents and Reuters witnesses said Israeli shelling and Hamas missile launches had slowly subsided through the afternoon, suggesting a de facto truce might be taking shape as international efforts to broker a permanent ceasefire appeared to flounder.

However, Israel's military has said it will need more time to destroy a warren of tunnels criss-crossing the Gaza border that it says is one of its main objectives.

Egypt had also destroyed 13 tunnels which crossed into its territory, an Egyptian general said on his Facebook page. It was "a continuation of the efforts by the armed forces in protecting the borders of the state from smugglers and terrorists," Brigadier General Mohamed Samir Abdulaziz Ghoneim said.

Israel and the Hamas Islamists who control Gaza had agreed to a 12-hour ceasefire on Saturday to allow Palestinians to stock up on supplies and retrieve bodies from under the rubble.

Netanyahu's cabinet voted to extend the truce until midnight on Sunday at the request of the United Nations, but called it off when Hamas launched rockets into Israel during the morning.

Palestinian medics said at least 10 people had died in the wave of subsequent strikes that swept Gaza.

Some 1,031 Palestinians, mainly civilians and including many children, have been killed in the 20-day conflict. A Gaza health ministry official issued revised figures, saying that 30 fewer people than thought had died in the conflict.

Israel says 43 of its soldiers have died, along with three civilians killed by rocket and mortar fire out of the Mediterranean enclave.

The military said an investigation into an attack last Thursday on a U.N.-run school in which 15 people were killed showed that a single errant mortar shell landed in an empty courtyard, denying it was responsible for the deaths.

DIPLOMATIC BLOCK
Israel launched its Gaza offensive on July 8, saying its aim was to halt rocket attacks by Hamas and its allies.

After aerial and naval bombardment failed to quell the outgunned guerrillas, Israel poured ground forces into the Gaza Strip 10 days later, looking to knock out Hamas's rocket stores and destroy the vast network of tunnels.

The army says its drive to find and eliminate tunnels would continue through any temporary truce.

A poll published by Israel's Channel 10 television said some 87 percent of respondents wanted Israel to continue the operation until Hamas was toppled.

Diplomatic efforts led by U.S. Secretary of State John Kerry to end the conflict have shown little sign of progress. Israel and Hamas have set conditions that appear irreconcilable.

Hamas wants an end to the Israeli-Egyptian economic blockade of Gaza before agreeing to halt hostilities. Israel has signaled it could make concessions toward that end, but only if Gaza's militant groups are stripped of their weapons.

"Hamas must be permanently stripped of its missiles and tunnels in a supervised manner," Economy Minister Naftali Bennett said, "In return we will agree to a host of economic alleviations," the security cabinet member said on Facebook.

Kerry flew back to Washington overnight after spending most of the week in Egypt trying to bridge the divide, putting forward some written proposals to Israel on Friday.

Speaking off the record, cabinet ministers described his plan as "a disaster", saying it met all Hamas demands, such as lifting the Israeli-Egyptian blockade completely and ignored Israeli terms, such as stripping Hamas of its rockets.

There was no immediate comment from U.S. officials.

The obvious rancour added yet another difficult chapter to the already strained relations between Netanyahu and Kerry, whose energetic drive to broker a definitive peace deal between Israel and the Palestinians ended in acrimony in April.

DESTRUCTION
The main U.N. agency in Gaza, UNRWA, said 167,269 displaced Palestinians have taken shelter in its schools and buildings, following repeated calls by Israel for civilians to evacuate whole neighborhoods ahead of military operations.

But in southern Gaza, residents of villages near the town of Khan Younis attacked the offices of the International Committee of the Red Cross, torching furniture and causing damage, saying the organization had not done enough to help them.

During the lull in fighting inside Gaza on Saturday, residents flooded into the streets to discover scenes of massive destruction in some areas, including Beit Hanoun in the north and Shejaia in the east.

An Israeli official said the army hoped the widespread desolation would persuade Gazans to put pressure on Hamas to stop the fighting for fear of yet more devastation.

The Israeli military says its forces have uncovered more than 30 tunnels in Gaza, with some of the burrows reaching into Israeli territory and designed to launch surprise attacks on Jewish communities along the border.

The military said on Sunday it found a tunnel that led directly into the dining room of an Israeli kibbutz.

Other underground passages, the military says, serve as weapons caches and Hamas bunkers. One official said troops had found it easier to operate during the truce as the immediate threat to their safety was diminished.

The Gaza turmoil has stoked tensions amongst Palestinians in mainly Arab East Jerusalem and the occupied West Bank.

Medics said eight Palestinians were killed on Friday in incidents near the West Bank cities of Nablus and Hebron - the sort of death toll reminiscent of previous uprisings against Israel's prolonged military rule there.

The violence has sparked protests outside the region.

Demonstrators in London marched from the Israeli embassy to the Houses of Parliament and Whitehall, blocking traffic throughout the West End. French police clashed with pro-Palestinian protesters who defied a ban by authorities to march in central Paris.

(GNN,Reuters,AIP)(Additional reporting by Maayan Lubell and Ari Rabinovitch in Jerusalem, Noah Browning in Gaza, Ali Sawafta in Ramallah and Jim Loney and Steve Holland in Washington; Writing by Mayaan Lubell and Crispian Balmer; Editing by Raissa Kasolowsky, Stephen Powell and Eric Walsh)

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U.S. diplomats' return to Libya could be more hazardous than exit

#GNN - If evacuating U.S. #embassy staff from #Libya was perilous - three F-16 fighters and Marines in Osprey aircraft flew overhead a road convoy from Tripoli to Tunisia - sending them back in could be politically hazardous for President Barack Obama.

U.S. diplomats work in dangerous places such as Baghdad and Kabul, but the ghosts of Benghazi hang over the U.S. presence in Libya after an attack on a U.S. mission in the eastern Libyan city in 2012 that killed Ambassador Chris Stevens and three other Americans.

Republicans, preparing to battle Obama's Democrats in mid-term elections in November, have been quick to characterize the chaos in Libya as further evidence of the administration's weak foreign policy.

The eight or so U.S. diplomats who had been in Libya and a security staff numbering 200 or more drove out of the country on Saturday under a heavy escort, amid the worst violence in the capital and in Benghazi since Washington and its NATO allies helped topple Muammar Gaddafi in 2011.

The State Department said embassy staff would return to Tripoli once it was deemed safe.

But analysts said that would be a difficult decision to make given raw memories of the Benghazi attack, which sparked sustained Republican criticism of Obama and his then secretary of state, Hillary Clinton - who is widely expected to run for the White House in 2016.

Republicans charged that the administration did not provide sufficient security for the mission, did not respond quickly enough and then tried to cover up its shortcomings. Harm to another diplomat in Libya would be disastrous for Obama.

Jon Alterman, head of Middle East program at the Center for Strategic and International Studies think tank in Washington, said the United States could not afford to think of the symbolical impact of withdrawing its diplomats when lives were at risk.

“The job of an embassy is to talk to a government. If it’s unclear who you can talk to and who can help provide security then that shifts the equation," Alterman said.

"Embassies rely a lot on local governments to both secure them and also to provide intelligence that helps us secure them. And if that isn’t working then you have to look quite closely at you security plan and whether you can actually protect the facility.”

But he added he did not expect the embassy closure to be long-term, like that in Somalia after anti-U.S. violence in the 1990s, and noted that Tripoli embassy had been evacuated during the fall of Gaddafi and then re-staffed.

LOOKS COUNT
Some of the impact of evacuating an embassy is appearance.

“Of course it looks bad – countries normally try to keep their embassies open as long as they can," said Francois Heisbourg, a security expert at the Foundation for Strategic Research think tank in Paris.

“What would be a problem would be if the Americans stayed out for long period. The decision to close may have come quite naturally, but it’s going to be a very difficult responsibility to reopen the embassy. That is one where the ghosts of Benghazi are going to come back again.”

The State Department sought to play down suggestions that the evacuation would further hamper efforts to stabilize Libya.

“Although embassy personnel are no longer in Libya, we continue to engage the Libyan government on a wide range of issues,” department spokeswoman Jen Psaki said on Saturday.

The surging violence in Libya prompted fresh criticism of Obama from Republicans keen to portray the administration as weak on all fronts.

"The administration sort of took its focus off of Libya and things have been getting worse for quite some considerable time now," Ed Royce, chairman of the U.S. House foreign relations committee, told CNN on Saturday after news of the U.S. diplomats' departure.

Robin Wright of Washington's Wilson Center think tank, who was a close friend of Ambassador Stevens, said all NATO countries, not just the United States, had "increasingly abandoned Libya over the past three years."

"Now the central government has crumbled to the point that it doesn’t even control Tripoli Airport, much less large swaths of the country," she said. "The long-term danger to the region is that Libya itself crumbles - either into a failed state, or unruly fragments that, in turn, have rippling impact on Africa and the Arab world."

(GNN,Reuters,AIP)(Reporting and writing by David Brunnstrom; Additional reporting by Missy Ryan, Mark Hosenball, Phil Stewart, Emily Stephenson and Arshad Mohammed; Editing by Frances Kerry)

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U.S. evacuates #Libya #embassy after 'free-wheeling #militia violence'

#GNN - The United States evacuated its embassy in Libya on Saturday, driving diplomats across the border into Tunisia under heavy military escort after escalating clashes broke out between rival militias in Tripoli.

Security in the Libyan capital has deteriorated following two weeks of clashes between brigades of former rebel fighters who have pounded each other with rockets and artillery fire in southern Tripoli near the embassy compound.

The violence is the worst seen in Tripoli and in eastern Benghazi since the 2011 fall of Muammar Gaddafi. Western governments fear Libya is teetering toward becoming a failed state just three years after the NATO-backed war ended his one-man rule.

Three F-16 fighters provided air support and Osprey aircraft carrying Marines flew overhead the U.S. convoy as a precaution, but there were no incidents during the five-hour drive from Tripoli to Tunisia, U.S. officials said.

"Security has to come first. Regrettably, we had to take this step because the location of our embassy is in very close proximity to intense fighting and ongoing violence between armed Libyan factions," U.S. State Department spokeswoman Marie Harf said in a statement.

U.S. sources familiar with the matter said there were about eight U.S. diplomats and 200 or more U.S. security personnel in Libya and all had been evacuated.

A Reuters reporter outside the embassy later saw no sign of movement or personnel on the perimeter gate of the compound, which lies a few kilometers from the airport.

Since one militia attacked Tripoli airport two weeks ago, fighting has killed at least 50 people in the capital, shut down most international flights and forced the United Nations and Turkey to pull out their diplomatic staff.

Tripoli was quieter after the evacuation. But at least 25 people were also killed in a day of clashes between Libyan special forces and Islamist militants who are entrenched in the eastern city of Benghazi, security and hospital sources said.

Speaking to reporters in Paris before holding talks on the Middle East, U.S. Secretary of State John Kerry described Libya's situation of "free-wheeling militia violence" as a real risk to U.S. staff with clashes around the embassy.

Britain's foreign office on Saturday also urged British nationals to leave by commercial means, due to "ongoing and greater intensity fighting in Tripoli and wider instability throughout Libya."

The battle for control of Tripoli International Airport is the latest eruption in a rivalry among bands of ex-fighters who once battled side by side against Gaddafi. Since then, they have turned against each other in the scramble for control.

Since the 2011 fall of Tripoli, fighters from the western town of Zintan and allies have controlled the area including the international airport, while rivals loyal to the port city of Misrata entrenched themselves in other parts of the capital.

SENSITIVE ISSUE
The State Department spokeswoman said embassy staff would return to Tripoli once it was deemed safe. Until then, embassy operations would be conducted from elsewhere in the region and Washington. Security in Libya is an especially sensitive subject for the United States because of the Sept. 11, 2012, attack on the U.S. mission in Benghazi, in which militants killed Ambassador Chris Stevens and three other Americans.

The attack also brought political fallout for President Barack Obama, with Republicans saying his administration did not provide sufficient overall security, did not respond quickly to the attack and then tried to cover up its shortcomings.

Ed Royce, Republican chairman of the House Committee on Foreign Affairs, told CNN on Saturday the administration needed to get "more engaged on the ground with the factions in Libya" to help bring the violence under control.

"I think they're on the right track (now) but late into the game in terms of trying to bring factions together and use U.S. leverage in order to try to work this out," Royce said.

A Libyan militant suspected of involvement in the 2012 attack, Ahmed Abu Khatallah, was captured in Libya last month and brought to the United States. He has pleaded not guilty.

But three years after Gaddafi's demise, Libya's transition to democracy is faltering, and its fragile government and nascent armed forces are unable to impose authority over the brigades of former fighters.

Many ex-fighters on the government payroll as semi-official security forces, but often pay little heed to the central government, each brigade claiming to be a legitimate force and the successors of the 2011 revolution.

Heavily armed, they have sided with competing political forces vying to shape the future of Libya in the messy steps since the end of Gaddafi's four-decade rule.

Libya's Western partners fear the OPEC oil-producing country is becoming increasingly polarized between two main groupings of competing militia brigades and their political allies.

One side is grouped around Zintan and their Tripoli allies, the Qaaqaa and al-Sawaiq brigades, which are loosely tied to the National Forces Alliance political movement in the parliament.

Opposing them is a faction centered around the more Islamist-leaning Misrata brigades and allied militias who side with the Justice and Construction Party, a wing of the Muslim Brotherhood.

(GNN)(Reuters)(AIP)(Additional reporting by Bill Trott and Phil Stewart in Washington, Arshad Mohammed in Paris; Editing by Gareth Jones, David Gregorio and Lisa Shumaker)

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