Analysis: Modi's Gujarat growth model might not work across India

SURAT, India (Reuters) - Turning a single Indian state with a long tradition of entrepreneurship and a solid political majority into an investor-friendly economic powerhouse is one thing.

Replicating that experience across a diverse country of 1.2 billion would be a tougher prospect for Narendra Modi, whose leadership of booming Gujarat state has led to his being touted as a potential candidate to become India's next prime minister.

While Modi wins praise even from critics for cutting red tape and making government more responsive and predictable, many ingredients for Gujarat's run of growth were in place well before he took office in 2001.

"It is like an icing on cake sort of thing. You have a nice cake and Modi has done a lot of good icing," said Rakesh Chaudhary, director of Pratibha Group, a textile manufacturer in Palsana on the outskirts of the Gujarat city of Surat.

Industry in Gujarat is helped by a long coastline and plenty of barren land that is easy to turn over to factory use.

The power that comes from a long-standing and heavy majority for his Bharatiya Janata Party (BJP) in the state also gives Modi an advantage that he would not enjoy on a national stage marked by fractious coalition politics.

Despite a controversial past - Modi is accused by critics of not doing enough to stop or of even quietly encouraging religious riots in 2002 that saw as many as 2,000 killed, most of them Muslims - he has established a reputation as an economic reformer in part by building on the strengths of Gujarat and marketing them heavily.

Modi's marketing savvy, aided by the Washington lobbying and public affairs firm APCO Worldwide, will be on display at the biennial "Vibrant Gujarat Summit" that begins on Friday.

Initiated by Modi in 2003 to attract investment after the violence and an earthquake in 2001, the event is attended by thousands of corporate officials who pledge billions in investment, although in reality only a fraction has seen the light of day. Of 12.4 trillion rupees ($225 billion) in investment proposed at the 2009 event, just 8.5 percent had been spent as of November 2011, according to state government data.

"Under Modi's regime, there has been significant improvement in infrastructure growth, significant improvement in industrialization, as well as agriculture," said Jahangir Aziz, senior Asia economist at JPMorgan. "But what has been overplayed is initial conditions were actually pretty decent in Gujarat."

HIGHER OFFICE?

The stocky Modi, who favors traditional Indian attire and a clipped white beard, plays down any prime ministerial ambitions.

But his popularity in Gujarat - the BJP won 115 of the state assembly's 182 seats in a December election - has fuelled speculation that he could lead his Hindu nationalist party in 2014 against India's ruling Congress party, which has been beset by corruption scandals and overseen a sharp economic slowdown.

"His economic record in Gujarat is obviously something which matters a lot to the middle classes. That, coupled with strong leadership," said Swapan Dasgupta, an analyst with links to the BJP who expects Modi to be the party standard-bearer in 2014.

Critics say that while Modi has indeed encouraged investment and helped bring reliable electricity and law and order, double-digit growth has not been shared broadly enough. In the five years through March 2010, some states - including Tamil Nadu and Karnataka - did better at bringing down poverty levels.

"Big business people get a lot from the government and scheduled caste people (minorities) get a lot, but people like us who are in between get nothing," said Bhupendra Thakkar, 50, who earns 6,000 rupees ($109) a month selling fruit near Surat's decrepit railway station.

FRIEND OF BUSINESS

Modi lured Tata Motors to the state in 2008 after the company's plans to build a factory for its low-cost Nano car were thwarted by farmers in West Bengal.

Ford Motor Co and Maruti Suzuki are also building plants in the western state - high profile investments that carry the added benefit of acting as marketing tools.

In the seven years through March 2011, Gujarat's economy grew an annual 10.08 percent at constant prices, against 6.45 percent in the eight years through March 2002 (Modi took office in October 2001), which was still ahead of the all-India average of 6.16 percent. A handful of states, including Maharashtra and Tamil Nadu, clocked bigger gains over the same recent period.

By comparison, policy gridlock at the national level has contributed to a drop-off in corporate investment, putting India on track to record its slowest annual growth rate in a decade.

Accustomed to getting his way, Modi, 62, could struggle to negotiate the coalition politics that have become the norm at the national level and have hindered attempts at reform by Prime Minister Manmohan Singh's Congress-led administration.

"Policymaking has benefited from the fact that the BJP has had absolute majority in the state legislature - an advantage it certainly will not enjoy in the federal parliament," said Anjalika Bardalai, an analyst with the Eurasia Group in London.

Modi has also been able to leverage the business acumen of Gujaratis, a group that has long been known for trading and entrepreneurship and includes a prosperous global diaspora as well as billionaires such as Adani Group chief Gautam Adani and Mukesh Ambani, who controls Reliance Industries, India's most valuable company.

"Modi might not be as successful as he has been here because the business mentality is unique to Gujarat," said Chandrakant Sanghavi, chairman of Sanghavi Exports International, a diamond trader and processor. "It could be prevalent in other states but the ratio may be less." ($1 = 55.0700 Indian rupees)

(Editing by John Chalmers and Alex Richardson)

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U.S. does not rule out removing all troops from Afghanistan

WASHINGTON (Reuters) - The Obama administration does not rule out a complete withdrawal of U.S. troops from Afghanistan after 2014, the White House said on Tuesday, just days before President Barack Obama is due to meet Afghan President Hamid Karzai.

The comments by U.S. Deputy National Security Adviser Ben Rhodes were the clearest signal yet that, despite initial recommendations by the top military commander in Afghanistan to keep as many as 15,000 troops in the country, Obama could opt to remove everyone, as happened in Iraq in 2011.

Asked about consideration of a so-called zero-option once the NATO combat mission ends at the end of 2014, Rhodes said: "That would be an option that we would consider."

Rhodes made clear that a decision on post-2014 troop levels is not expected for months and will be made based on two U.S. security objectives in Afghanistan - denying a safe haven to al Qaeda and ensuring Afghan forces are trained and equipped so that they, and not foreign forces, can secure the nation.

"There are, of course, many different ways of accomplishing those objectives, some of which might involve U.S. troops, some of which might not," Rhodes said, briefing reporters to preview Karzai's visit.

In Iraq, Obama decided to pull out all U.S. forces after failing in negotiations with the Iraqi government to secure immunity for any U.S. troops who would remain behind.

The Obama administration is also insisting on immunity for any U.S. troops that remain in Afghanistan, and that unsettled question will figure in this week's talks between Obama and Karzai and their aides.

"As we know from our Iraq experience, if there are no authorities granted by the sovereign state, then there's no room for a follow-on U.S. military mission," said Douglas Lute, special assistant to Obama for Afghanistan and Pakistan.

Jeffrey Dressler, an Afghanistan expert at the Washington-based Institute for the Study of War who favors keeping a larger presence in Afghanistan, questioned whether the White House comments might be part of a U.S. bargaining strategy with Kabul.

"I can't tell that they're doing that as a negotiating position ... or if it is a no-kidding option," Dressler said. "If you ask me, I don't see how zero troops is in the national security interest of the United States."

SHOULDN'T JUST "LEAVE THEM"

U.S. officials have said privately that the White House had asked for options to be developed for keeping between 3,000 and 9,000 troops in the country, a lower range than was put forward initially by General John Allen, the top U.S. and NATO commander in Afghanistan.

Allen suggested keeping between 6,000 and 15,000 troops in Afghanistan.

Retired General Stanley McChrystal, a former U.S. commander of the Afghan mission who resigned in 2010, said in an interview with Reuters on Monday there was a value to having an overt U.S. military presence in Afghanistan after 2014 - even if it wasn't large.

"The art, I would say, would be having the smallest number so that you give the impression that you are always there to help, but you're never there either as an unwelcome presence or an occupier - or any of the negatives that people might draw," he said, without commenting on any specific numbers.

The United States now has about 66,000 troops in Afghanistan and Rhodes confirmed there would be steady reductions in troop levels through 2014.

Also on the agenda for the Obama-Karzai talks are tentative reconciliation efforts involving Taliban insurgents. Those efforts have shown flickers of life after nearly 10 months of limbo.

Still, hopes for Afghan peace talks have been raised before, only to be dashed. Last March, the Taliban suspended months of quiet discussions with Washington aimed at getting the insurgents and the Karzai government to the peace table.

Washington has also had a strained relationship with Karzai, who in October accused the United States of playing a double game in his country by fighting the war in Afghan villages instead of going after those in Pakistan who support insurgents.

Karzai will give a joint press conference with Obama on Friday and will visit the Pentagon on Thursday, meeting with Defense Secretary Leon Panetta and the U.S. top military officer, General Martin Dempsey.

Still, it is unclear what, if any, concrete agreements might emerge from Karzai's visit to Washington.

Michael O'Hanlon, a defense analyst at Brookings, cautioned against expecting too much from the visit, which he said is best seen as an opportunity for Washington and Kabul to "shore up this partnership that has had such a troubled status and a weak foundation."

"There are a lot of scars in this relationship. There are a lot of hurt feelings," O'Hanlon said. "It's sort of like a bad marriage and it's very easy for just the wrong word to immediately set people off in an emotional way."

(Additional reporting by David Alexander.; Editing by Eric Beech and Christopher Wilson)

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Afghan peace efforts show flickers of life

WASHINGTON/ISLAMABAD (Reuters) - President Barack Obama and Afghan President Hamid Karzai will discuss matters of war, including future U.S. troop levels and Afghanistan's army, when they meet on Friday, but matters of peace may be the most delicate item on their long agenda.

After nearly 10 months in limbo, tentative reconciliation efforts involving Taliban insurgents, the Karzai government and other major Afghan factions have shown new signs of life, resurrecting tantalizing hopes for a negotiated end to decades of war.

Pakistan, which U.S. and Afghan officials have long accused of backing the insurgents and meddling in Afghanistan, has recently signaled an apparent policy shift toward promoting its neighbor's stability as most U.S. combat troops prepare to depart, top Pakistani and Afghan officials said.

In another potentially significant development, Taliban representatives met outside Paris last month with members of the Afghan High Peace Council - although not directly with members of the Karzai government, which they have long shunned.

U.S. officials, speaking on condition of anonymity, said the developments are promising - but that major challenges remain to opening negotiations, let alone reaching an agreement on the war-ravaged country's political future.

Hopes for Afghan peace talks have been raised before, only to be dashed. Last March, the Taliban suspended months of quiet discussions with Washington aimed at getting the insurgents and the Karzai government to the peace table.

Obama is expected to press the Afghan president to bless the formal opening of a Taliban political office in the Gulf state of Qatar as a way to jump-start inter-Afghan talks.

Karzai has been lukewarm to the idea, apparently fearing his government would be sidelined in any negotiations.

TRIP AT A TURNING POINT

Karzai's meeting with Obama, at the end of a three-day visit to Washington, is shaping up to be one of the most critical encounters between the two leaders, as the White House weighs how rapidly to remove most of the roughly 66,000 U.S. troops in Afghanistan and how large a residual force to leave after 2014.

Obama, about to begin his second term in office, appears determined to wrap up U.S. military engagement in Afghanistan. On Monday, he announced as his nominee for Pentagon chief former Nebraska Senator Chuck Hagel, who appears likely to favor a sizeable U.S. troop drawdown.

Other issues on the agenda have plenty of potential for causing friction: the future size and focus of the Afghan military; a festering dispute over control of the country's largest detention center; and the future of international aid after 2014.

Karzai's trip "is one of the most important ones because the discussions we are going to have with our counterparts will define the relations between (the) United States and Afghanistan," Afghan Foreign Minister Zalmay Rassoul told the lower house of parliament this month.

No final announcement on post-2014 U.S. troop levels is expected during Karzai's visit, and the issue is further complicated by Washington's insistence on legal immunity for American troops that remain.

General John Allen, the top U.S. and NATO commander in Afghanistan, recommended keeping between roughly 6,000 and 15,000 U.S. troops in Afghanistan after 2014, but the White House is considering possibly leaving as few as 3,000 troops.

A U.S. official, speaking on condition of anonymity, said the White House had asked for options to be developed for keeping between 3,000 and 9,000 troops in the country.

PAST PEACE HOPES DASHED

Last year, the Obama administration hoped to kick-start peace talks with a deal that would have seen Washington transfer five Taliban prisoners from Guantanamo Bay prison. In return, the Taliban would renounce international terrorism and state a willingness to enter talks with Karzai's representatives.

That deal never came off, and the question now is whether it, or an alternative peace process, can get under way as the U.S. military presence rapidly winds down.

Looking at developments in the last few months, "you could see that there are things happening," said one U.S. official, who was not authorized to speak for the record.

At the end of 2012, Pakistan released four Afghan Taliban prisoners who were close to the movement's reclusive leader, Mullah Mohammed Omar. It appeared to be a step toward meeting Afghanistan's long-standing insistence that Islamabad free those who could help promote reconciliation. A senior Afghan official welcomed the release.

A member of Pakistan's parliament closely involved in Afghan policy-making said there are signs of a shift in the thinking of Pakistan's powerful military. Some in the military, which has long regarded Afghanistan as a battleground in its existential conflict with rival India, are now saying that the graver threat comes from Pakistan's own militants.

"Yes, there is skepticism. The hawks are there. But the fact is that previously there were absolutely no voices in the army with this kind of positive thinking," the parliamentarian said.

"Pakistan has also realized that there won't be a complete withdrawal of the U.S. from Afghanistan," the lawmaker said. "The security establishment realizes it has to compromise somewhere. Hence the Taliban releases. ... Hence the statements from even the most skeptical Afghan officials that there is a change in Pakistani thinking."

Ghairat Baheer, who represented the Hezb-e-Islami faction at last month's peace talks in the Paris suburb of Chantilly, rejected a continued U.S. military presence in Afghanistan, but praised the Pakistan prisoner release as a sign of its good intentions.

WAITING FOR THE TALIBAN

After more than a year of frustration, Obama administration officials are skeptical about luring the Taliban to peace talks, citing what appears to be a deep fissure within the movement between moderates who favor entering the political process and hard-liners committed to ousting both NATO troops and Karzai.

The Taliban's lead negotiator, Tayeb Agha, whom the Obama administration regards as a reliable interlocutor, offered to resign last month in apparent frustration, the Daily Beast website reported.

Taliban envoys have yet to meet officially with Karzai's government, and the insurgents demand a rewriting of the Afghan constitution.

"I don't think anyone knows where (reconciliation) stands. And I mean that because there are a lot of reconciliation talks and a lot of games that are being played in a lot of places," said Fred Kagan, a military analyst at the conservative American Enterprise Institute.

"The likelihood of getting an acceptable deal that actually secures our interests is vanishingly small," he said. "But the probability that you could get the deal and have it implemented in time to make this drawdown timeline make sense is nonsense."

(Additional reporting by Phil Stewart and David Alexander in Washington, and Hamid Shalizi in Kabul. Editing by Christopher Wilson)

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Assad "peace plan" greeted with scorn by foes

BEIRUT (Reuters) - Syrian President Bashar al-Assad rejected peace talks with his enemies on Sunday in a defiant speech that his opponents described as a renewed declaration of war.

Although the speech was billed as the unveiling of a new peace plan, Assad offered no concessions and even appeared to harden many of his positions. He rallied Syrians for "a war to defend the nation" and disparaged the prospect of negotiations.

"We do not reject political dialogue ... but with whom should we hold a dialogue? With extremists who don't believe in any language but killing and terrorism?" Assad asked supporters who packed Damascus Opera House for his first speech since June.

"Should we speak to gangs recruited abroad that follow the orders of foreigners? Should we have official dialogue with a puppet made by the West, which has scripted its lines?"

It was his first public speech to an audience in six months. Since the last, rebels have reached the capital's outskirts.

George Sabra, vice president of the opposition National Coalition, told Reuters the peace plan Assad put at the heart of his speech did "not even deserve to be called an initiative":

"We should see it rather as a declaration that he will continue his war against the Syrian people," he said.

"The appropriate response is to continue to resist this unacceptable regime and for the Free Syrian Army to continue its work in liberating Syria until every inch of land is free."

The speech was seen by many as a response to U.N. mediator Lakhdar Brahimi, who has been meeting U.S. and Russian officials to try to narrow differences between Washington and Moscow over a peace plan. Brahimi also met Assad in Syria late last month.

"Lakhdar Brahimi must feel foolish after that Assad speech, where his diplomacy is dismissed as intolerable intervention," said Rana Kabbani, a Syrian analyst who supports the opposition.

The United States, European Union, Turkey and most Arab states have called on Assad to quit. Russia, which sells arms to and leases a naval base from Syria, says it backs a transition of power but that Assad's departure should not be a precondition for any talks.

REPETITIONS

Assad's foreign foes were scornful and dismissive of the speech. "His remarks are just repetitions of what he's said all along," said Ahmet Davutoglu, foreign minister of Syria's northern neighbor and former friend Turkey.

"It seems he's locked himself up in a room and only reads the intelligence reports presented to him."

The U.S. State Department said Assad's speech "is yet another attempt by the regime to cling to power and does nothing to advance the Syrian people's goal of a political transition".

"His initiative is detached from reality, undermines the efforts of Joint Special Representative Lakhdar Brahimi, and would only allow the regime to further perpetuate its bloody oppression of the Syrian people," said spokeswoman Victoria Nuland.

EU foreign affairs chief Catherine Ashton said Brussels would "look carefully if there is anything new in the speech, but we maintain our position that Assad has to step aside and allow for a political transition".

The 47-year-old Assad, tall and mustachioed, in a business suit and tie, spoke confidently for about an hour before a crowd of cheering loyalists, who occasionally interrupted him to shout and applaud, at one point raising their fists and chanting: "With blood and soul we sacrifice for you, oh Bashar!"

At the end of the speech, supporters rushed to the stage, mobbing him and shouting: "God, Syria and Bashar is enough!" as a smiling president waved and was escorted from the hall past a backdrop showing a Syrian flag made of pictures of people whom state television described as "martyrs" of the conflict so far.

"We are now in a state of war in every sense of the word," Assad said in the speech, broadcast on Syrian state television. "This war targets Syria using a handful of Syrians and many foreigners. Thus, this is a war to defend the nation."

Independent media are largely barred from Damascus.

Giving the speech in the opera house, in a part of central Damascus that has been hit by rebel attacks, could be intended as a show of strength by a leader whose public appearances have grown rarer as the rebellion has gathered force.

Critics saw irony in the venue: "Assad speech appropriately made in Opera House!" tweeted Rami Khouri, a commentator for Lebanon's Daily Star newspaper. "It was operatic in its other-worldly fantasy, unrelated to realities outside the building."

DEATHS

The United Nations says 60,000 people have been killed in the civil war, the longest and bloodiest of the conflicts to emerge in two years of revolts in Arab states.

Rebels now control much of the north and east of the country, a crescent of suburbs on the outskirts of the capital and the main border crossings with Turkey in the north.

But Assad's forces are still firmly in control of most of the densely populated southwest, the main north-south highway and the Mediterranean coast. The army also holds military bases throughout the country from which its helicopters and jets can strike rebel-held areas with impunity, making it impossible for the insurgents to consolidate their grip on territory they hold.

Assad, an eye doctor, has ruled since 2000, succeeding his late father Hafez, who had seized power in a 1970 coup.

The rebels are drawn mainly from Syria's Sunni Muslim majority, while Assad, a member of the Alawite sect related to Shi'ite Islam, is supported by some members of religious minorities who fear retribution if he falls.

The conflict has heightened confrontation in the Middle East between Shi'ite Iran and Sunni Arab rulers, particularly those in the Gulf who are allied with the West against Tehran.

The plan unveiled in Sunday's speech could hardly have been better designed to ensure its rejection by the opposition. Among its proposals: rebels would first be expected to halt operations before the army would cease fire, a certain non-starter.

Assad also repeatedly emphasized rebel links to al Qaeda and other Sunni Islamist radicals. Washington has also labeled one of the main rebel groups a terrorist organization and says it is linked to the network founded by Osama bin Laden.

Diplomacy has been largely irrelevant so far in the conflict, with Moscow vetoing U.N. resolutions against Assad.

U.N. mediator Brahimi has been trying to bridge the gap, meeting senior U.S. and Russian officials to discuss his own peace proposal, which does not explicitly mention Assad's fate.

National Coalition spokesman Walid Bunni said Assad's speech appeared timed to prevent a breakthrough in those talks, by taking a position that could not be reconciled with diplomacy.

"The talk by Brahimi and others that there could be a type of political solution being worked out has prompted him to come out and tell the others 'I won't accept a solution'," Bunni said, adding that Assad feared any deal would mean his downfall.

(Additional reporting by Suleiman al-Khalidi in Amman, Gulsen Solaker in Ankara and Tim Castle in London; Writing by Peter Graff; Editing by Alastair Macdonald and Kevin Liffey)

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Venezuela lawmakers elect Chavez ally as Assembly chief

CARACAS (Reuters) - Venezuelan lawmakers re-elected a staunch ally of Hugo Chavez to head the National Assembly on Saturday, putting him in line to be caretaker president if the socialist leader does not recover from cancer surgery.

By choosing the incumbent, Diosdado Cabello, the "Chavista"-dominated legislature cemented the combative ex-soldier's position as the third most powerful figure in the government, after Chavez and Vice President Nicolas Maduro.

"As a patriot ... I swear to be supremely loyal in everything I do, to defend the fatherland, its institutions, and this beautiful revolution led by our Comandante Hugo Chavez," Cabello said as he took the oath, his hand on the constitution.

He had earlier warned opposition politicians against attempting to use the National Assembly to "conspire" against the people, saying they would be "destroyed" if they tried.

Thousands of the president's red-clad supporters gathered outside parliament hours before the vote, many chanting: "We are all Chavez! Our comandante will be well! He will return!"

If Chavez had to step down, or died, Cabello would take over the running of the country as Assembly president and a new election would be organized within 30 days. Chavez's heir apparent, Maduro, would be the ruling Socialist Party candidate.

Chavez, who was diagnosed with an undisclosed form of cancer in his pelvic area in mid-2011, has not been seen in public nor heard from in more than three weeks.

Officials say the 58-year-old is in delicate condition and has suffered multiple complications since the December 11 surgery, including unexpected bleeding and severe respiratory problems.

Late on Friday, Maduro gave the clearest indication yet that the government was preparing to delay Chavez's inauguration for a new six-year term, which is scheduled for Thursday.

'CHAVEZ IS PRESIDENT'

Maduro said the ceremony was a "formality" and that Chavez could be sworn in by the Supreme Court at a later date.

The opposition says Chavez's absence would be just the latest sign that he is no longer fit to govern, and that new elections should be held in the South American OPEC nation.

Brandishing a copy of the constitution after his win in the Assembly, Cabello slammed opposition leaders for writing a letter to foreign embassies in which they accused the government of employing a "twisted reading" of the charter.

"Get this into your heads: Hugo Chavez was elected president and he will continue to be president beyond January 10. No one should have any doubt ... this is the constitutional route," he said as fellow Socialist Party lawmakers cheered.

The opposition sat stony-faced. One of their legislators had earlier told the session that it was not just the head of state who was ill, "the republic is sick."

Last year, Chavez staged what appeared to be a remarkable comeback from the disease to win re-election in October, despite being weakened by radiation therapy. He returned to Cuba for more treatment within weeks of his victory.

Should the president have to step down after 14 years in office, a new vote would probably pit Maduro, a 50-year-old former bus driver and union leader, against opposition leader Henrique Capriles, the 40-year-old governor of Miranda state.

Capriles lost to Chavez in October's presidential election.

"I don't think Maduro would last many rounds in a presidential race. He's not fit for the responsibility they have given him," Capriles said after the vice president's appearance on state television.

Chavez's condition is being watched closely by leftist allies around Latin American who have benefited from his oil-funded generosity, as well as investors attracted by Venezuela's lucrative and widely traded debt.

The country boasts the world's biggest crude reserves. Despite the huge political upheaval Chavez's exit would cause, the oil industry is not likely to be affected much in the short term, with an extension of "Chavismo" keeping projects on track, while a change in parties could usher in more foreign capital.

(Additional reporting by Deisy Buitrago; Editing by Vicki Allen)

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Chavez swearing-in can be delayed: Venezuelan VP

CARACAS (Reuters) - President Hugo Chavez's formal swearing-in for a new six-year term scheduled for January 10 can be postponed if he is unable to attend due to his battle to recover from cancer surgery, Venezuela's vice president said on Friday.

Nicolas Maduro's comments were the clearest indication yet that the Venezuelan government is preparing to delay the swearing-in while avoiding naming a replacement for Chavez or calling a new election in the South American OPEC nation.

In power since 1999, the 58-year-old socialist leader has not been seen in public for more than three weeks. Allies say he is in delicate condition after a fourth operation in two years for an undisclosed form of cancer in his pelvic area.

The political opposition argues that Chavez's presence on January 10 in Cuba - where there are rumors he may be dying - is tantamount to the president's stepping down.

But Maduro, waving a copy of the constitution during an interview with state TV, said there was no problem if Chavez was sworn in at a later date by the nation's top court.

"The interpretation being given is that the 2013-2019 constitutional period starts on January 10. In the case of President Chavez, he is a re-elected president and continues in his functions," he said.

"The formality of his swearing-in can be resolved in the Supreme Court at the time the court deems appropriate in coordination with the head of state."

In the increasing "Kremlinology"-style analysis of Venezuela's extraordinary political situation, that could be interpreted in different ways: that Maduro and other allies trust Chavez will recover eventually, or that they are buying time to cement succession plans before going into an election.

Despite his serious medical condition, there was no reason to declare Chavez's "complete absence" from office, Maduro said. Such a declaration would trigger a new vote within 30 days, according to Venezuela's charter.

RECOVERY POSSIBLE?

Chavez was conscious and fighting to recover, said Maduro, who traveled to Havana to see his boss this week.

"We will have the Commander well again," he said.

Maduro, 50, whom Chavez named as his preferred successor should he be forced to leave office, said Venezuela's opposition had no right to go against the will of the people as expressed in the October 7 vote to re-elect the president.

"The president right now is president ... Don't mess with the people. Respect democracy."

Despite insisting Chavez remains president and there is hope for recovery, the government has acknowledged the gravity of his condition, saying he is having trouble breathing due to a "severe" respiratory infection.

Social networks are abuzz with rumors he is on life support or facing uncontrollable metastasis of his cancer.

Chavez's abrupt exit from the political scene would be a huge shock for Venezuela. His oil-financed socialism has made him a hero to the poor, while critics call him a dictator seeking to impose Cuban-style communism on Venezuelans.

Should Chavez leave office, a new election is likely to pitch former bus driver and union activist Maduro against opposition leader Henrique Capriles, the 40-year-old governor of Miranda state.

Capriles lost to Chavez in the October presidential election, but won an impressive 44 percent of the vote. Though past polls have shown him to be more popular than all of Chavez's allies, the equation is now different given Maduro has received the president's personal blessing - a factor likely to fire up Chavez's fanatical supporters.

His condition is being watched closely by Latin American allies that have benefited from his help, as well as investors attracted by Venezuela's lucrative and widely traded debt.

"The odds are growing that the country will soon undergo a possibly tumultuous transition," the U.S.-based think tank Stratfor said this week.

(Additional reporting by Marianna Parraga; editing by Christopher Wilson)

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Eleven dead in Damascus gas station blast

AZAZ, Syria (Reuters) - At least 11 people were killed and 40 wounded when a car bomb exploded at a crowded petrol station in the Syrian capital Damascus on Thursday, opposition activists said.

The station was packed with people queuing for fuel that has become increasingly scarce during the country's 21-month-long insurgency aimed at overthrowing President Bashar al-Assad.

The semi-official al-Ikhbariya television station showed footage of 10 burnt bodies and Red Crescent workers searching for victims at the site.

The opposition Revolution Leadership Council in Damascus said the explosion was caused by a booby-trapped car.

There was no immediate indication of who was responsible for the bombing in the Barzeh al-Balad district, whose residents include members of the Sunni Muslim majority and other religious and ethnic minorities.

"The station is usually packed even when it has no fuel," said an opposition activist who did not want to be named. "There are lots of people who sleep there overnight, waiting for early morning fuel consignments."

It was the second time that a petrol station has been hit in Damascus this week. Dozens of people were incinerated in an air strike as they waited for fuel on Wednesday, according to opposition sources.

In northern Syria, rebels were battling to seize an air base in their campaign against the air power that Assad has used to bomb rebel-held towns.

More than 60,000 people have been killed in the uprising and civil war, the United Nations said this week, a much higher death toll than previously thought.

DRAMATIC ADVANCES

After dramatic advances over the second half of 2012, the rebels now hold wide swathes of territory in the north and east, but they cannot protect towns and villages from Assad's helicopters and jets.

Hundreds of rebel fighters were attempting to storm the Taftanaz air base, near the highway that links Syria's two main cities, Aleppo and Damascus.

A rebel fighter speaking from near the Taftanaz base overnight said much of the base was still in loyalist hands but insurgents had managed to destroy a helicopter and a fighter jet on the ground.

The northern rebel Idlib Coordination Committee said the rebels had detonated a car bomb inside the base.

The government's SANA news agency said the base had not fallen and that the military had "strongly confronted an attempt by the terrorists to attack the airport from several axes, inflicting heavy losses among them and destroying their weapons and munitions".

Rami Abdulrahman, head of the opposition-aligned Syrian Observatory for Human Rights which monitors the conflict from Britain, said as many as 800 fighters were involved in the assault, including Islamists from Jabhat al-Nusra, a powerful group that Washington considers terrorists.

Taftanaz is mainly a helicopter base, used for missions to resupply army positions cut off by the rebels, as well as for dropping crude "barrel bombs" on rebel-controlled areas.

Near Minakh, another northern air base that rebels have surrounded, government forces have retaliated by shelling and bombing nearby towns.

NIGHTLY BOMBARDMENTS

In the town of Azaz, where the bombardment has become a near nightly occurrence, shells hit a family house overnight. Zeinab Hammadi said her two wounded daughters, aged 10 and 12, had been rushed across the border to Turkey, one with her brain exposed.

"We were sleeping and it just landed on us in the blink of an eye," she said, weeping as she surveyed the damage.

Family members tried to salvage possessions from the wreckage, men lifting out furniture and children carrying out their belongings in tubs.

"He (Assad) wants revenge against the people," said Abu Hassan, 33, working at a garage near the destroyed house. "What is the fault of the children? Are they the ones fighting?"

Opposition activists said warplanes struck a residential building in another rebel-held northern town, Hayyan, killing at least eight civilians.

Video footage showed men carrying dismembered bodies of children and dozens of people searching for victims in the rubble. The provenance of the video could not be independently confirmed.

In addition to their tenuous grip on the north, the rebels also hold a crescent of suburbs on the edge of Damascus, which have come under bombardment by government forces that control the center of the capital.

On Wednesday, according to opposition activists, dozens of people died in an inferno caused by an air strike on a petrol station in a Damascus suburb where residents were lining up for fuel.

The civil war in Syria has become the longest and bloodiest of the conflicts that rose out of uprisings across the Arab world in the past two years.

Assad's family has ruled for 42 years since his father seized power in a coup. The war pits rebels, mainly from the Sunni Muslim majority, against a government supported by members of Assad's Shi'ite-derived Alawite minority sect and some members of other minorities who fear revenge if he falls.

The West, most Sunni-ruled Arab states and Turkey have called for Assad to step down. He is supported by Russia and Shi'ite Iran.

(Additional reporting by Khaled Yacoub Oweis in Amman and Dominic Evans in Beirut; Writing by Peter Graff; Editing by Ruth Pitchford and Giles Elgood)

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At least 61 crushed to death in Ivory Coast stampede

ABIDJAN (Reuters) - At least 61 people were crushed to death in a stampede after a New Year's Eve fireworks display at a stadium in Ivory Coast's main city Abidjan early on Tuesday, officials said.

Witnesses said police had tried to control crowds around the Felix Houphouet-Boigny Stadium following the celebrations, triggering a panic in which scores were trampled.

"The estimate we can give right now is 49 people hospitalized ... and 61 people dead," said the chief of staff of Abidjan's fire department Issa Sacko.

Crying women searched for missing family members outside the stadium on Tuesday morning. The area was covered in patches of dried blood and abandoned shoes.

"My two children came here yesterday. I told them not to come but they didn't listen. They came when I was sleeping. What will I do?" said Assetou Toure, a cleaner.

Sanata Zoure, a market vendor injured in the incident, said New Year's revelers going home after watching the fireworks had been stopped by police near the stadium.

"We were walking with our children and we came upon barricades, and people started falling into each other. We were trampled with our children," she said.

Another witness said police arrived to control the crowd after a mob began chasing a pickpocket.

President Alassane Ouattara called the deaths a national tragedy and said an investigation was under way to find out what happened.

"I hope that we can determine what caused this drama so that we can ensure it never happens again," he said after visiting the injured in hospital.

The country, once a stable economic hub for West Africa, is struggling to recover from a 2011 civil war in which more than 3,000 people were killed.

Ivory Coast's security forces once were among the best trained in the region, but a decade of political turmoil and the 2011 war has left them in disarray.

At least 18 people were killed in another stampede during a football match in an Abidjan stadium in 2009.

(Reporting by Loucoumane Coulibaly and Alain Amontchi; Writing by Richard Valdmanis; Editing by Michael Roddy)

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North Korean leader, in rare address, seeks end to confrontation with South

SEOUL (Reuters) - North Korean leader Kim Jong-un called for an end to confrontation between the two Koreas, technically still at war in the absence of a peace treaty to end their 1950-53 conflict, in a surprise New Year speech broadcast on state media.

The address by Kim, who took over power in the reclusive state after his father, Kim Jong-il, died in 2011, appeared to take the place of the policy-setting New Year editorial published in leading state newspapers.

But North Korea has offered olive branches before and Kim's speech does not necessarily signify a change in tack from a country which vilifies the United States and U.S. ally South Korea at every chance it gets.

Impoverished North Korea raised tensions in the region by launching a long-range rocket in December that it said was aimed at putting a scientific satellite in orbit, drawing international condemnation.

North Korea, which considers North and South as one country, the Democratic People's Republic of Korea, is banned from testing missile or nuclear technology under U.N. sanctions imposed after its 2006 and 2009 nuclear weapons tests.

"An important issue in putting an end to the division of the country and achieving its reunification is to remove confrontation between the north and the south," Kim said in the address that appeared to be pre-recorded and was made at an undisclosed location.

"The past records of inter-Korean relations show that confrontation between fellow countrymen leads to nothing but war."

The New Year address was the first in 19 years by a North Korean leader after the death of Kim Il-sung, Kim Jong-un's grandfather. Kim Jong-il rarely spoke in public and disclosed his national policy agenda in editorials in state newspapers.

"(Kim's statement) apparently contains a message that he has an intention to dispel the current face-off (between the two Koreas), which could eventually be linked with the North's call for aid (from the South)," said Kim Tae-woo, a North Korea expert at the state-funded Korea Institute for National Unification.

"But such a move does not necessarily mean any substantive change in the North Korean regime's policy towards the South."

The two Koreas have seen tensions rise to the highest level in decades after the North bombed a Southern island in 2010 killing two civilians and two soldiers.

The sinking of a South Korean navy ship earlier that year was blamed on the North but Pyongyang has denied it and accused Seoul of waging a smear campaign against its leadership.

Last month, South Korea elected as president Park Geun-hye, a conservative daughter of assassinated military ruler Park Chung-hee whom Kim Il-sung had tried to kill at the height of their Cold War confrontation.

Park has vowed to pursue engagement with the North and called for dialogue to build confidence but has demanded that Pyongyang abandon its nuclear weapons ambitions, something it is unlikely to do.

Conspicuously absent from Kim's speech was any mention of the nuclear arms program.

(Additional reporting by Sung-Won Shim; Editing by Nick Macfie)

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Chavez suffers new post-surgery complications

CARACAS (Reuters) - Venezuelan President Hugo Chavez is suffering more complications linked to a respiratory infection that hit him after his fourth cancer operation in Cuba, his vice president said in a somber broadcast on Sunday.

Vice President Nicolas Maduro flew to Cuba to visit Chavez in the hospital as supporters' fears grew for the ailing 58-year-old socialist leader, who has not been seen in public nor heard from in three weeks.

Chavez had already suffered unexpected bleeding caused by the six-hour operation on December 11 for an undisclosed form of cancer in his pelvic area. Officials said doctors then had to fight a respiratory infection.

"Just a few minutes ago we were with President Chavez. He greeted us and he himself talked about these complications," Maduro said in the broadcast, adding that the third set of complications arose because of the respiratory infection.

"Thanks to his physical and spiritual strength, Comandante Chavez is confronting this difficult situation."

Maduro, flanked by his wife Attorney-General Cilia Flores, Chavez's daughter Rosa Virginia and her husband, Science Minister Jorge Arreaza, said he would remain in Havana while Chavez's condition evolved.

He said Chavez's condition remained "delicate" - a term he has used since the day after the surgery, when he warned Venezuelans to prepare for difficult times and urged them to keep the president in their prayers.

"We trust that the avalanche of love and solidarity with Comandante Chavez, together with his immense will to live and the care of the best medical specialists, will help our president win this new battle," Maduro said.

A senior government official in Caracas said the New Year's Eve party in the capital's central Plaza Bolivar had been canceled. "Everyone pray for strength for our comandante to overcome this difficult moment," the official, Jacqueline Faria, added on Twitter after making the announcement.

OIL-FINANCED SOCIALISM

Chavez's resignation for health reasons, or his death, would upend politics in the OPEC nation where his personalized brand of oil-financed socialism has made him a hero to the poor but a pariah to critics who call him a dictator.

His condition is being closely watched around Latin America, especially in other nations run by leftist governments, from Cuba to Bolivia, which depend on subsidized fuel shipments and other aid from Venezuela for their fragile economies.

Chavez has not provided details of the cancer that was first diagnosed in June 2011, leading to speculation among Venezuela's 29 million people and criticism from opposition leaders.

Chavez's allies have openly discussed the possibility that he may not be able to return to Venezuela to be inaugurated for his third six-year term as president on the constitutionally mandated date of January 10.

Senior "Chavista" officials have said the people's wishes were made clear when the president was re-elected in October, and that the constitution makes no provision for what happens if a president-elect cannot take office on January 10.

Opposition leaders say any postponement would be just the latest sign that Chavez is not in a fit state to govern and that new elections should be called to choose his replacement. If Chavez had to step down, new elections would be called within 30 days.

Opposition figures believe they have a better shot against Maduro, who was named earlier this month by Chavez as his heir apparent, than against the charismatic president who for 14 years has been nearly invincible at the ballot box.

Any constitutional dispute over succession could lead to a messy transition toward a post-Chavez era in the country that boasts the biggest oil reserves in the world.

Maduro has become the face of the government in Chavez's absence, imitating the president's bombastic style and sharp criticism of the United States and its "imperialist" policies.

In Sunday's broadcast, Maduro said Chavez sent New Year greetings to all Venezuelans, "especially the children, whom he carries in his heart always."

(Additional reporting by Deisy Buitrago and Mario Naranjo; Editng by Kieran Murray and Christopher Wilson)

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Body of India rape victim arrives home in New Delhi

NEW DELHI (Reuters) - The body of a woman whose gang rape provoked protests and rare national debate about violence against women in India arrived back in New Delhi early on Sunday and was quickly cremated at a private ceremony.

The unidentified 23-year-old medical student died from her injuries on Saturday, prompting promises of action from a government that has struggled to respond to public outrage.

She had suffered brain injuries and massive internal injuries in the attack on December 16, and died in hospital in Singapore where she had been taken for treatment.

She and a male friend had been returning home from the cinema, media reports say, when six men on a bus beat them with metal rods and repeatedly raped the woman. The friend survived.

Six suspects were charged with murder after her death.

A Reuters correspondent saw family members who had been with her in Singapore take her body from the airport to their Delhi home in an ambulance with a police escort.

Ruling party leader Sonia Gandhi was seen arriving at the airport when the plane landed and Prime Minister Mannmohan Singh's convoy was also there, the witness said.

The body was then taken to a crematorium and cremated. Media were kept away but a Reuters witness saw the woman's family, New Delhi's chief minister, Sheila Dikshit, and the junior home minister, R P N Singh, coming out of the crematorium.

Security in the capital remained tight after authorities, worried about the reaction to the news of her death, had on Saturday deployed thousands of policemen and closed some roads and metro stations.

Protesters still gathered, in New Delhi and other cities, to keep the pressure on Singh's government to get tougher on crime against women. Last weekend, protesters fought pitched battles with police.

On Sunday, lines of policemen in riot gear and armed with heavy wooden sticks stood in front of metal barricades closing off roads in New Delhi. Morning traffic was light.

DOUBTS

The outcry over the attack caught the government off-guard. It took a week for Singh to make a statement, infuriating many protesters.

Issues such as rape, dowry-related deaths and female infanticide rarely enter mainstream political discourse in India.

Analysts say the death of the woman dubbed "Amanat", an Urdu word meaning "treasure", by some Indian media could change that, although it is too early to say whether the protesters calling for government action to better safeguard women can sustain their momentum through to national elections due in 2014.

Newspapers raised doubts about the commitment of both male politicians and the police to protecting women.

"Would the Indian political system and class have been so indifferent to the problem of sexual violence if half or even one-third of all legislators were women?" the Hindu newspaper asked.

The Indian Express acknowledged the police force was understaffed and poorly paid, but there was more to it than that.

"It is geared towards dominating citizens rather than working for them, not to mention being open to influential interests," the newspaper said. "It reflects the misogyny around us, rather than actively fighting for the rights of citizens who happen to be female."

Most sex crimes in India go unreported, many offenders go unpunished, and the wheels of justice turn slowly, according to social activists, who say that successive governments have done little to ensure the safety of women.

Commentators and sociologists say the rape has tapped into a deep well of frustration many Indians feel over what they see as weak governance and poor leadership on social issues.

New Delhi has the highest number of sex crimes among India's major cities, with a rape reported on average every 18 hours, according to police figures. Government data show the number of reported rape cases in India rose by nearly 17 percent between 2007 and 2011.

For a link to the poll, click http://www.trust.org/trustlaw/news/special-coverage/g20women/

(Additional reporting by Ross Colvin and Diksha Madhok; Writing by Louise Ireland; Editing by Kevin Liffey and Robert Birsel)

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Indian gang rape victim dies; New Delhi braces for protests

NEW DELHI/SINGAPORE (Reuters) - A woman whose gang rape sparked protests and a national debate about violence against women in India died of her injuries on Saturday, prompting a security lockdown in New Delhi and an acknowledgement from India's prime minister that social change is needed.

Bracing for a new wave of protests, Indian authorities deployed thousands of policemen, closed 10 metro stations and banned vehicles from some main roads in the heart of New Delhi, where demonstrators have converged since the attack to demand improved women's rights. Hundreds of people staged peaceful protests at two locations on Saturday morning.

The 23-year-old medical student, severely beaten, raped and thrown out of a moving bus in New Delhi two weeks ago, had been flown to Singapore in a critical condition by the Indian government on Thursday for specialist treatment.

The intense media coverage of the attack and the use of social media to galvanize the protests, mostly by young middle-class students, has forced political leaders to confront some uncomfortable truths about the treatment of women in the world's largest democracy.

Most sex crimes in India go unreported, many offenders go unpunished, and the wheels of justice turn slowly, according to social activists who say that successive governments have done too little to ensure the safety of women.

"The need of the hour is a dispassionate debate and inquiry into the critical changes that are required in societal attitudes," Prime Minister Manmohan Singh said in a statement.

"I hope that the entire political class and civil society will set aside narrow sectional interests and agenda to help us all reach the end that we all desire - making India a demonstrably better and safer place for women to live in."

T.C.A. Raghavan, the Indian high commissioner to Singapore, told reporters hours after the woman's death in a Singapore hospital that a chartered aircraft would fly her body back to India on Saturday, along with members of her family.

The body was taken to a Hindu casket firm in Singapore for embalming. Indian diplomats selected a gold and yellow coffin to transport her home, staff at the firm told reporters.

"We are very sad to report that the patient passed away peacefully at 4:45 a.m. on Dec 29, 2012 (2045 GMT Friday). Her family and officials from the High Commission (embassy) of India were by her side," Mount Elizabeth Hospital Chief Executive Officer Kelvin Loh said earlier in a statement.

Delhi's chief minister, Sheila Dikshit, said the woman's death was a "shameful moment for me not just as a chief minister but also as a citizen of this country".

The woman, who has not been identified, and a male friend were returning home from the cinema by bus on the evening of December 16 when, media reports say, six men on the bus beat them with metal rods and repeatedly raped the woman. Media said a rod was used in the rape, causing internal injuries. Both were thrown from the bus. The male friend survived.

The attack has put gender issues center stage in Indian politics arguably for the first time. Issues such as rape, dowry-related deaths and female infanticide have rarely entered mainstream political discourse.

Analysts say the death of the woman dubbed "Amanat", an Urdu word meaning "treasure," by some media could change that, although it is too early to say whether the protesters calling for government action to better safeguard women can sustain their momentum through to national elections due in 2014.

WORST PLACE

The public outcry over the attack caught the government off-guard. It took a week for Singh to make a public statement on the attack, infuriating many protesters who saw it as a sign of a government insensitive to the plight of women.

The prime minister, a stiff 80-year-old technocrat who speaks in a low monotone, has struggled to channel the popular outrage in his public statements and convince critics that his eight-year-old government will now take concrete steps to improve the safety of women.

"The Congress mangers were ham-handed in their handling of the situation that arose after the brutal assault on the girl. The crowd management was poor," a lawmaker from Singh's ruling Congress party said on condition of anonymity.

Protesters fought pitched battles with police around the capital last weekend. Police used batons, water cannon and teargas to quell the protests.

Commentators and sociologists say the rape has tapped into a deep well of frustration many Indians feel over what they see as weak governance and poor leadership on social issues.

A global poll by the Thomson Reuters Foundation in June found that India was the worst place to be a woman because of high rates of infanticide, child marriage and slavery.

New Delhi has the highest number of sex crimes among India's major cities, with a rape reported on average every 18 hours, according to police figures. Government data show the number of reported rape cases in the country rose by nearly 17 percent between 2007 and 2011.

Indian media had accused the government of sending the woman to Singapore to minimize any backlash in the event of her death but Raghavan said it had been a medical decision intended to ensure she got the best treatment.

The suspects in the rape - five men, including two brothers, aged between 20 and 40, and a 15-year-old - were arrested within hours of the attack and are in custody. The suspects, all from a slum in south Delhi, will be formally charged with murder, New Delhi Deputy Commissioner of Police Chhaya Sharma told Reuters.

Home Minister Sushilkumar Shinde told Times Now television the government was committed to ensuring "the severest possible punishment to all the accused at the earliest".

"It will not go in vain. We will give maximum punishment to the culprits. Not only to this, but in future also. This one incident has given a greater lesson" Shinde said.

He said earlier the government was considering hanging for rape in rare cases. Murder already carries the death penalty.

(Additional reporting by Ross Colvin and Diksha Madhok in New Delhi; Kevin Lim, Saeed Azhar, Edgar Su and Sanjeev Miglani in Singapore; Editing by Mark Bendeich and Robert Birsel and Ross Colvin)

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CAR appeals for French help against rebels, Paris balks

BANGUI (Reuters) - The president of the Central African Republic appealed on Thursday for France and the United States to help push back rebels threatening his government and the capital, but Paris said its troops were only ready to protect French nationals.

The exchanges came as regional African leaders tried to broker a ceasefire deal and as rebels said they had temporarily halted their advance on Bangui, the capital, to allow talks to take place.

Insurgents on motorbikes and in pickup trucks have driven to within 75 km (47 miles) of Bangui after weeks of fighting, threatening to end President Francois Bozize's nearly 10-year-stint in charge of the turbulent, resource-rich country.

French nuclear energy group Areva mines the Bakouma uranium deposit in the CAR's south - France's biggest commercial interest in its former colony.

The rebel advance has highlighted the instability of a country that has remained poor since independence from Paris in 1960 despite rich deposits of uranium, gold and diamonds. Average income is barely over $2 a day.

Bozize on Thursday appealed for French and U.S. military support to stop the SELEKA rebel coalition, which has promised to overthrow him unless he implements a previous peace deal in full.

He told a crowd of anti-rebel protesters in the riverside capital that he had asked Paris and Washington to help move the rebels away from the capital to clear the way for peace talks which regional leaders say could be held soon in Libreville, Gabon.

"We are asking our cousins the French and the United States, which are major powers, to help us push back the rebels to their initial positions in a way that will permit talks in Libreville to resolve this crisis," Bozize said.

France has 250 soldiers in its landlocked former colony as part of a peacekeeping mission and Paris in the past has ousted or propped up governments - including by using air strikes to defend Bozize against rebels in 2006.

But French President Francois Hollande poured cold water on the latest request for help.

"If we have a presence, it's not to protect a regime, it's to protect our nationals and our interests and in no way to intervene in the internal business of a country, in this case the Central African Republic," Hollande said on the sidelines of a visit to a wholesale food market outside Paris.

"Those days are over," he said.

Some 1,200 French nationals live in the CAR, mostly in the capital, according to the French Foreign Ministry, where they typically work for mining firms or aid groups.

CEASEFIRE TALKS

The U.N. Security Council issued a statement saying its members "condemn the continued attacks on several towns perpetrated by the 'SELEKA' coalition of armed groups which gravely undermine the Libreville Comprehensive Peace Agreement and threaten the civilian population."

U.S. State Department spokesman Patrick Ventrell said the U.S. embassy had temporarily suspended operations and the U.S. ambassador and other embassy personnel had left the country.

Officials from around central Africa are due to meet in Bangui later on Thursday to open initial talks with the government and rebels.

A rebel spokesman said fighters had temporarily halted their advance to allow dialogue.

"We will not enter Bangui," Colonel Djouma Narkoyo, the rebel spokesman, told Reuters by telephone.

Previous rebel promises to stop advancing have been broken, and a diplomatic source said rebels had taken up positions around Bangui on Thursday, effectively surrounding it.

The atmosphere remained tense in the city the day after anti-rebel protests broke out, and residents were stocking up on food and water.

Government soldiers deployed at strategic sites and French troops reinforced security at the French embassy after protesters threw rocks at the building on Wednesday.

In Paris, the French Foreign Ministry said protecting foreigners and embassies was the responsibility of the CAR authorities.

"This message will once again be stressed to the CAR's charge d'affaires in Paris, who has been summoned this afternoon," a ministry spokesman said.

He also said France condemned the rebels for pursuing hostilities and urged all sides to commit to talks.

Bozize came to power in a 2003 rebellion that overthrew President Ange-Felix Patasse.

However, France is increasingly reluctant to directly intervene in conflicts in its former colonies. Since coming to power in May, Hollande has promised to end its shadowy relations with former colonies and put ties on a healthier footing.

A military source and an aid worker said the rebels had got as far as Damara, 75 km (47 miles) from Bangui, by late afternoon on Wednesday, having skirted Sibut, where some 150 Chadian soldiers had earlier been deployed to try and block a push south by a rebel coalition.

With a government that holds little sway outside the capital, some parts of the country have long endured the consequences of conflicts in troubled neighbors Chad, Sudan and the Democratic Republic of Congo spilling over.

The Central African Republic is one of a number of nations in the region where U.S. Special Forces are helping local forces try to track down the Lords Resistance Army, a rebel group responsible for killing thousands of civilians across four African nations.

(Additional reporting by Leigh Thomas and Louis Charbonneau; Writing by Richard Valdmanis; Editing by Andrew Osborn and Paul Simao)

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Mental illness, poverty haunted Afghan policewoman who killed American

KABUL (Reuters) - The Afghan policewoman suspected of killing a U.S. contractor at police headquarters in Kabul suffered from mental illness and was driven to suicidal despair by poverty, her children told Reuters on Wednesday.

The woman was identified by authorities as Narges Rezaeimomenabad, a 40-year-old grandmother and mother of three who moved here from Iran 10 years ago and married an Afghan man.

On Monday morning, she loaded a pistol in a bathroom at the police compound, hid it in her long scarf and shot an American police trainer, apparently becoming the first Afghan woman to carry out such an attack.

Narges also tried to shoot police officials after killing the American. Luckily for them, her pistol jammed. Her husband is also under investigation.

Her son Sayed, 16, and daughter Fatima, 13, described how they tried to call their parents 100 times after news broke of the shooting, then waited in vain for them to come home.

They recalled Narges's severe mood swings, and how at times she beat them and even pulled out a knife. But the children said she was consistent in bemoaning poverty.

"She was usually complaining about poverty. She was complaining to my father about our conditions. She was saying that my father was poor," Sayid said in an interview in their damp, cold two-room cement house.

On the floor beside him were his mother's prescriptions and a thick plastic bag filled with pills she tried to swallow to end the misery about a month ago. On another occasion, she cut her wrist with a razor, Sayed said.

"My father was usually calm and sometimes would say that she was guilty too because it wasn't a forced marriage. They fell in love and got married."

There was no sign in their neighborhood of the billions of dollars of Western aid that have poured into Afghanistan since the ouster of the Taliban in 2001, or of government investment.

RAW SEWAGE, STAGNANT WATER, DIRT ROADS

The lane outside their home stank of raw sewage.

Dirty, stagnant water filled holes in dirt roads nearby, where children in tattered clothes played and butchers stood by cow's hooves in shops choked by dust.

Afghanistan is one of the world's poorest nations, with a third of its 30 million residents living under the poverty line.

The sole distractions from the daily grind appeared to be a deck of playing cards and a compact disc with songs from Iranian pop singers, scattered on the floor of a room where Narges would lock herself in and weep, or sit in silence.

At times, Narges would try to focus on building her children's confidence, telling them to be guided by the Muslim holy book, the Koran, to tackle life's problems.

Sayed and Fatima said she never spoke badly of the U.S. presence in Afghanistan or of President Hamid Karzai's government.

Neighbor Mohammad Ismail Kohistani was dumbfounded to hear on the radio that Afghan officials were combing Narges' phone records to try to determine whether al Qaeda or the Taliban could have brainwashed her into carrying out a mission.

But he was acutely aware of her mental problems and often heard her scream at her husband, whose low-level job in the crime investigation unit of the police brought home little cash.

Kohistani, who operates a small sewing shop with battered machines, never imagined his neighbor could be accused of a high-profile attack that raised new questions about the direction of an unpopular war.

"I became very depressed and sad," said Kohistani, sitting on the floor few feet from a tiny wood-burning stove in Narges's home, alongside family photographs and a police training manual.

Fatima would often seek refuge in Kohistani's house when her mother's behavior became unbearable. "She did not hate us, but usually she was angry and would not talk to us," said Fatima, her eyes moist with tears.

Nevertheless, she missed her mother. The children were staying with a cousin.

"I ask the government to free my mother, otherwise our future will be destroyed," said Fatima.

Officials described it as another "insider shooting", in which Afghan forces turn on Westerners they are meant to be working with to stabilize the country. There have been over 52 such attacks so far this year.

The shooting at the police headquarters may have alarmed Afghanistan's Western allies. But some Afghans have grown numb to the violence.

Kohistani's 70-year-old father Omara Khan, who sports a white beard, sat twirling prayer beads beneath a photograph of Narges in a black veil beside one of her husband.

Asked what he thought of the attack, he laughed.

"This is common in Afghanistan," said Khan, who lived through decades of upheaval, including the 10-year Soviet occupation and a civil war that destroyed half of Kabul and killed some 50,000 civilians.

"People are killed every day."

(Editing by Ron Popeski)

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Spring Wish denied as suicide bomber brings down Afghan juice empire

KABUL (Reuters) - When a Taliban suicide bomber killed two people on the edge of the Afghan capital this month, there was another casualty - a global fruit juice business optimistically called "Spring Wish" which provided work for thousands of farmers across the country.

Mustafa Sadiq's empire had been expanding healthily, bringing in badly needed foreign capital, before the attack inflicted the kind of financial loss cash-strapped Afghanistan can ill afford.

The pomegranate juice business was nearly wiped out in the split second it took the militant to detonate explosives in a truck parked near the factory on December 17.

Pieces of shredded metal were scattered everywhere. Chairs were hurled across the office where Sadiq had spent so much time figuring out how to beat the odds against decades of war, instability and hopelessness.

Sadiq was in Dubai drumming up new export deals when an assistant called with the bad news. The call that Sadiq said he did not get is also troubling him.

"So far no officials, for the sake of sympathy, have called us," Sadiq, 40, told Reuters, standing beside a year's supply of juice in containers that were ruined in the attack - nearly $10 million in losses overall.

"In this situation they should have called me and asked what kind of help they could provide. The agriculture, finance, commerce ministries. Nobody so far has visited or called."

The impact of the war, and expectations for the future, are often seen only through the eyes of Western or Afghan soldiers, or officials who point to the progress that has been made.

Sadiq offers another perspective. Some workers told him the bomber triggered the loudest blast they had heard in 30 years.

A Soviet invasion of Afghanistan in 1979 was followed by a decade of resistance by mujahideen fighters who drove them out. Then warlords carved out fiefdoms and destroyed half of the capital in the civil war that followed.

DIRTY POLITICS

The Taliban took over, were toppled in 2001 and are now raising fears they may return when U.S.-led NATO troops hand over security to Afghan forces in 2014.

But Sadiq does not see the Taliban as the biggest threat to Afghanistan's future. Instead, he says, officials have turned politics into a commercial enterprise driven by corruption.

"Government employees think it's time to fill their pockets and grab whatever they can. That will pave the way for civil war," said Sadiq, as workers feverishly loaded boxes of the little fruit juice left onto a truck, and others worked to rebuild a brick wall.

"You have to struggle, not run away. It is kind of like running away now. They have walls around themselves sitting there and they do not have contact with ordinary Afghans."

His disillusionment is shared by the Afghanistan Chamber of Commerce and Industries.

"There is no guarantee for investment in Afghanistan. People are afraid of the government, there is no rule of law. Government officials can do anything they want," the chamber's first vice-chairman, Jan Alokzai, told Reuters.

"President (Hamid) Karzai's words are only on paper and don't have any value."

Afghanistan's U.S.-backed government says it is committed to building up the economy, attracting foreign investment and helping Afghans secure a brighter future. Karzai says it is contracts with foreigners that spread graft.

WISHFUL THINKING?

The government has highlighted 2014 as a year to invest in Afghanistan, which relies heavily on foreign aid, and to take advantage of its cheap labor and land leases.

In each of the 10 years following 2014, the government hopes revenues from oil, natural gas, iron, copper and other mining ventures will generate $4 billion in revenue.

Sadiq spent time in Europe, waiting for an opportunity to return and invest in his homeland. He eventually opened a factory in an industrial park along Kabul's dusty Jalalabad Road in 2008, from where he broke into overseas markets.

Spring Wish, which employed about 1,000 people, was selling produce to the health conscious in Europe, Asia and the Middle East, bringing money into Afghanistan, while anxious Afghans carted $4.5 billion in cash out of the country last year to safety.

But when asked about the maps on a wall identifying parts of Afghanistan which offer opportunities for farmers and businesses like his, Sadiq could only put his head in his hands and cry.

The dark red seeds from Sadiq's fruits were prized in Europe for their antioxidant qualities, and in Japan where many believe they can help fight cancers. He seems most proud of the fact that he helped 40,000 farmers across Afghanistan earn a living.

As Sadiq tries to persuade his staff to keep dreaming big and to rebuild, one question may haunt him for some time. The suicide bomber parked his truck in a lane between his company and a foreign firm.

The Taliban said it attacked an American company next door, but he still wonders whether his factory, which relied on Italian machinery and benefited from U.S. aid programs, was the target. And he acknowledges he is desperate for money from Western donors.

"Around 120 people were working here and this factory was totally destroyed in the suicide attack," said Mohammed Jaw, 28, a general operator for the company. "A number of our workers will lose their jobs and now everyone is concerned about what happens next."

Despite the loss, Sadiq's entrepreneurial and marketing spirit seems intact.

"Have you tried the juice with mulberry flavor?" he asked proudly. "It's really good."

Then a worker brought the moment back to reality. He lifted his cellphone to show a photograph of the suicide bomber's severed head.

(Additional reporting by Mirwais Harooni; Editing by Nick Macfie)

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U.N. General Assembly voices concern for Myanmar's Muslims

UNITED NATIONS (Reuters) - The U.N. General Assembly expressed serious concern on Monday over violence between Rohingya Muslims and Buddhists in Myanmar and called upon its government to address reports of human rights abuses by some authorities.

The 193-nation General Assembly approved by consensus a non-binding resolution, which Myanmar said last month contained a "litany of sweeping allegations, accuracies of which have yet to be verified."

Outbreaks of violence between ethnic Rakhine Buddhists and the Rohingyas have killed dozens and displaced thousands since June. Rights groups also have accused Myanmar security forces of killing, raping and arresting Rohingyas after the riots. Myanmar said it exercised "maximum restraint" to quell the violence.

The unanimously adopted U.N. resolution "expressing particular concern about the situation of the Rohingya minority in Rakhine state, urges the government to take action to bring about an improvement in their situation and to protect all their human rights, including their right to a nationality."

At least 800,000 Muslim Rohingyas live in Rakhine State along the western coast of Myanmar, also known as Burma. But Buddhist Rakhines and other Burmese view them as illegal immigrants from neighboring Bangladesh who deserve neither rights nor sympathy.

The resolution adopted on Monday is identical to one approved last month by the General Assembly's Third Committee, which focuses on human rights. After that vote, Myanmar's mission to the United Nations said that it accepted the resolution but objected to the Rohingyas being referred to as a minority.

"There has been no such ethnic group as Rohingya among the ethnic groups of Myanmar," a representative of Myanmar said at the time. "Despite this fact, the right to citizenship for any member or community has been and will never be denied if they are in line with the law of the land."

(Reporting By Louis Charbonneau; Editing by Paul Simao)

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Afghan policewoman kills U.S. adviser in police chief's compound

KABUL (Reuters) - An Afghan policewoman shot dead on Monday a U.S. forces member in the chief of police's compound in Kabul, police and NATO said, another "insider attack" that is bound to raise troubling questions about the direction of an unpopular war.

It appeared to be the first time that a woman member of Afghanistan's security forces shot a member of the Western coalition force supporting and training Afghanistan's military and police.

"A U.S. police adviser was killed in an attack by an Afghan policewoman," a spokesman for the NATO-led International Security Assistance Force (ISAF) said.

Mohammad Zahir, head of the police criminal investigation department, described the incident as an "insider attack" in which Afghan forces turn their weapons on Western troops they are supposed to be working with.

After more than 10 years of conflict, militants are capable of staging attacks on Western targets in the heart of the capital, and foreign forces worry that members of the Afghan police and military they are supposed to work with can suddenly turn on them.

The policewoman approached the American adviser as he was walking in the heavily guarded police chief's compound in a bustling area of the capital. She then drew a pistol and shot him once, a senior police official told Reuters.

The police compound is close to the Interior Ministry where in February, two American officers were shot dead at close range at a time anger gripped the country over the burning of copies of the Muslim holy book at a NATO base.

"She is now under interrogation. She is crying and saying 'what have I done'," said the official of the police officer who worked in a section of the Interior Ministry responsible for gender awareness issues.

The insider incidents, also known as green-on-blue attacks, have undermined trust between coalition and Afghan forces who are under mounting pressure to contain the Taliban insurgency before most NATO combat troops withdraw by the end of 2014.

Security responsibilities in a country plagued by conflict for decades will be handed to Afghan security forces.

Many Afghans fear a civil war like one dominated by warlords after the withdrawal of Soviet occupying forces in 1989 could erupt again, or the Taliban will make another push to seize power if they reject a nascent peace process.

At least 52 members of the NATO-led International Security Assistance Force have been killed this year by Afghans wearing police or army uniforms.

Insider attacks now account for one in every five combat deaths suffered by NATO-led forces in Afghanistan, and 16 percent of all U.S. combat casualties, according to 2012 data.

Hoping to stop the alarming rise in the attacks, Afghan Defense Ministry officials have given their troops tips in foreign culture, telling them not to be offended by a hearty pat on the back or an American soldier asking after your wife's health.

NATO attributes only about a quarter of the attacks to the Taliban, saying the rest are caused by personal grievances and misunderstandings. Last year, there were 35 deaths in such attacks.

(Writing by Michael Georgy; Editing by Robert Birsel)

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Israel says Syria chemical weapons are secure for now

JERUSALEM (Reuters) - Syria's chemical weapons are still secure despite the fact that President Bashar al-Assad has lost control of parts of the country, a senior Israeli defense official said on Sunday.

Amos Gilad told Army Radio that the civil war between Assad and opposition forces fighting to topple him had become deadlocked, but that the Syrian leader showed no signs of heeding international calls to step down.

"Suppose he (Assad) does leave, there could be chaos ... in the Middle East you never know who will come instead. We need to stay level-headed; the entire world is dealing with this. At the moment, chemical weapons are under control," Gilad said.

As Syria's southern neighbor, Israel has been concerned about chemical weapons falling into the hands of Islamist militants or Lebanese Hezbollah fighters, warning it could intervene to stop such developments.

Western countries said three weeks ago that Assad's government might be preparing to use poison gas to repel rebel fighters who are encamped around Damascus, the capital, and who control rural Aleppo and Idlib in the north.

"The opposition is not managing to defeat him and he is not defeating the opposition, though more and more parts of Syria are no longer under his control and that is what matters," Gilad said.

The rebels - mainly Sunni Muslims - are pushing southwards from their northern strongholds into the central province of Hama.

But Assad, who is from the Alawite minority linked to Shi'ite Islam, has responded with artillery, air strikes and, according to NATO, with Scud-type missiles.

Western powers and some Arab countries have called for Assad to step down, but Russia's Foreign Minister Sergei Lavrov said on Saturday that international efforts to persuade Assad to quit would fail.

Lavrov said Russia had rejected requests from countries in the region to pressure Assad to go or to offer him safe haven. If Assad did exit the political scene, it could lead to an upsurge in the fighting that activists say has killed 44,000 people since the uprising began in March 2011, Lavrov said.

(Writing by Maayan Lubell; Editing by Jeffrey Heller and Andrew Osborn)

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Egypt's constitution seen passing in referendum

CAIRO (Reuters) - Egyptians voted on a constitution drafted by Islamists on Saturday in a second round of balloting expected to approve the charter that opponents say will create deeper turmoil in Egypt.

After a first round last week in which unofficial results showed 57 percent of those who voted approved the constitution, the opposition cried foul, saying a litany of alleged abuses meant the first stage of the referendum should be re-run.

But the committee overseeing the two-stage vote said their investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million eligible voters.

Islamist supporters of President Mohamed Mursi, who was elected in June, say the constitution is vital to moving Egypt towards democracy two years after Hosni Mubarak was overthrown in a popular uprising. They say it will help restore the stability needed to fix an economy that is on the ropes.

If the basic law is passed, a parliamentary election will be held in about two months.

However, the opposition says the constitution is divisive and accuses Mursi of pushing through a document that favors his Islamist allies and ignores the rights of Christians, who make up about 10 percent of the population, as well as women.

"I'm voting 'no' because Egypt can't be ruled by one faction," said Karim Nahas, 35, a stock market broker, heading to a polling station in Giza, a province included in this round of voting which covers parts of greater Cairo.

Polling stations opened at 8 a.m. (0600 GMT) and close at 7 p.m. (1700 GMT) though voting could be extended as it was last week. Queues formed at some polling stations around the country.

Unofficial tallies are likely to emerge within hours of the close, but the referendum committee may not declare an official result for the two rounds until Monday, after hearing appeals.

Shahinaz Shalaby, a housewife, said she would be voting "yes" even though she disagreed with some clauses. "We feel our voice matters," she said, adding that a "yes" vote would not stop protests but "then it will stabilize afterwards".

Cairo districts covered in the first round voted "no", but overall the vote in that round was in favor.

Analysts expect another "yes" vote on Saturday because it covers rural and other areas seen as having more Islamist sympathizers. Islamists may also be able to count on many Egyptians who are simply exhausted by two years of turmoil.

MORE UNREST

But, even if it is approved, the opposition say it is a recipe for trouble since the charter has not received broad consensus backing from the population. They say the result may go in Mursi's favor but will not be the result of a fair vote.

"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the National Salvation Front, an opposition coalition formed after Mursi expanded his powers on November 22 and then pushed the constitution to a vote.

Citing what he said were "serious violations" on the first day of voting, he said anger against Mursi and his Islamist allies was growing: "People are not going to accept the way they are dealing with the situation."

At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals clashed on Friday in the second biggest city of Alexandria, hurling stones at each other. Two buses were torched.

Mohamed Beltagy, a senior official in the Muslim Brotherhood, the group that propelled Mursi to elected office, said the constitution was crucial to holding a parliamentary election and setting up the essential institutions of state.

"What is the catastrophe of this constitution?" he asked the assembly which drafted the document, during a sitting on Friday that was called to challenge opposition criticism of the text.

Opponents, who had earlier quit the drafting assembly saying their voices were not heard, were invited but stayed away.

The vote was staggered after many judges refused to supervise the vote, meaning there were not enough to hold the referendum on a single day nationwide.

The first round was won by a slim enough margin to buttress opposition arguments that the text was divisive. Opponents who include liberals, leftists, Christians and more moderate-minded Muslims accuse Islamists of using religion to sway voters.

"The problem is not whether the majority approves, it is that they rallied the people in the name of the religion," said Mustafa Shuman, who is among dozens of people who have been camped outside Mursi's palace in Cairo in protest.

Islamists, who have won successive ballots since Mubarak's overthrow albeit by narrowing margins, dismiss charges that they are exploiting religion and say the document reflects the will of a majority in the country where most people are Muslim.

(Additional reporting by Tamim Elyan; Writing by Edmund Blair; Editing by Andrew Osborn)

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