Tuesday, 5 August 2014

WAR NEWS Gaza ceasefire holding on second day, talks under way

GAZA/CAIRO (Reuters) - A Gaza truce was holding on Wednesday as Egyptian mediators pursued talks with Israeli and Palestinian representatives on an enduring end to a war that has devastated the Hamas Islamist- dominated enclave.

Egyptian intelligence officials met in Cairo with a high-level Israeli delegation late on Tuesday, a day after conferring with Palestinians who included envoys from Hamas and the Islamic Jihad group, Egyptian officials said.

"The indirect talks between the Palestinians and Israelis are moving forward," one Egyptian official said, making clear that the opposing sides were not meeting face to face. "It is still too early to talk about outcomes but we are optimistic."

Egyptian and Palestinian sources said further discussions were expected to be held in Cairo on Wednesday, with expectations of an initial response by Israel to Palestinian demands, which it has so far shown no sign of accepting.

Israel withdrew ground forces from the Gaza Strip on Tuesday morning and started a 72-hour Egyptian-brokered ceasefire with Hamas as a first step towards a long-term deal.

In Gaza, where some half-million people have been displaced by a month of bloodshed, some residents left U.N. shelters to trek back to neighbourhoods where whole blocks have been destroyed by Israeli shelling and the smell of decomposing bodies fills the air.

Streets in towns in southern Israel, which had been under daily rocket fire from the Gaza Strip, were filled again with playing children.

BLOCKADE

Palestinians want an end to the Israeli-Egyptian blockade on impoverished Gaza and the release of prisoners, including those Israel arrested in a June crackdown in the occupied West Bank after three Jewish seminary students were kidnapped and killed.

Israel has resisted those demands.

"For Israel the most important issue is the issue of demilitarisation. We must prevent Hamas from rearming, we must demilitarise the Gaza Strip," Mark Regev, a spokesman for Prime Minister Benjamin Netanyahu, told Reuters television.

U.S. Secretary of State John Kerry, in an interview on the BBC's HARDtalk programme, also spoke of a need for Hamas to decommission its rocket arsenal.

"What we want to do is support the Palestinians and their desire to improve their lives and to be able to open crossings and get food in and reconstruct and have greater freedom," Kerry said.

"But that has to come with a greater responsibility towards Israel, which means giving up rockets, moving into a different plane," he said.

Kerry said, however, all this would "finally come together" as part of wider Israeli-Palestinian peace efforts that he has spearheaded but which have been frozen since April over Israel's opposition to a unity deal between Hamas and Western-backed President Mahmoud Abbas's Palestine Liberation Organization.

Hamas, which seized the Gaza Strip from forces loyal to Abbas in 2007, has ruled out giving up its weapons.

HUMANITARIAN AID

An Israeli official, who declined to be identified, said Israel wanted humanitarian aid to flow to the Palestinian enclave's 1.8 million inhabitants as soon as possible.

But, the official said, the import of cement - vital for reconstruction - would depend on achieving guarantees that it would not be used by militants to construct more infiltration tunnels leading into Israel and other fortifications.

Gaza officials say the war has killed 1,867 Palestinians, most of them civilians. Israel says 64 of its soldiers and three civilians have been killed since fighting began on July 8, after a surge in Palestinian rocket launches.

An Israeli opinion poll, conducted after the ceasefire went into effect, said Israelis, while not regarding the Gaza war as a victory for their country's powerful military, remained highly supportive of Netanyahu.

According to the poll in the Haaretz newspaper, 51 percent of those surveyed said neither side won, while 36 percent believe that Israel emerged victorious. Six percent said Hamas was the victor.

Of the 442 people who took part in the poll, 77 percent described Netanyahu's performance during the war as excellent or good.

Efforts to turn the ceasefire into a lasting truce could prove difficult, with the sides far apart on their central demands, and each rejecting the other's legitimacy. Hamas rejects Israel's existence and vows to destroy it, while Israel denounces Hamas as a terrorist group and eschews any ties.

Egypt has positioned itself as a mediator in successive Gaza conflicts but, like Israel, its current administration views Hamas as a security threat.

Besides the loss of life, the war has cost both sides economically. Gaza faces a massive $6-billion price tag to rebuild devastated infrastructure. Israel has lost hundreds of millions of dollars in tourism and other sectors and fears cuts in overall economic growth this year as well.

Palestinian officials said a donor conference to raise funds for Gaza's reconstruction would be held in Oslo next month.

(Additional reporting by Ali Sawafta in Ramallah and Ori Lewis in Jerusalem; Writing by Jeffrey Heller in Jerusalem; Editing by Giles Elgood)



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TOP NEWS Hurricane, tropical storm roll toward Hawaii

HONOLULU (Reuters) - A hurricane and a tropical storm on Wednesday were heading west across the Pacific Ocean toward the tourist haven of Hawaii, where officials announced school closures and warned visitors and residents to prepare.

Sea surges and flooding were forecast.

Hurricane Iselle was about 860 miles (1,384 km) east of Hilo, on the Island of Hawaii, moving west-northwest at 13 miles per hour (21 km per hour) with maximum sustained winds of 100 mph (161 kph), the National Hurricane Center said on Wednesday.

Residents were stocking up on basics as authorities in Honolulu advised them to prepare a seven-day disaster supply kit. The hurricane was forecast to weaken over the next 48 hours, the NHC center said.

Further east over the Pacific, Tropical Storm Julio was about 1,290 miles (2,076 km) from Baja California in Mexico and also expected to continue moving west-northwest through Thursday, the NHC said on Wednesday.

That storm was moving at 15 mph (24 kph) and has maximum sustained wind speeds of 65 mph (100 kph), it said.

Shoppers in Honolulu waited in line at supermarkets with carts full of bottled water, batteries and nonperishable food items.

"With Hawaii's remoteness, it could be as long as a week before a full disaster relief operation can be initiated," the department said in a statement late on Monday.

Honolulu school teacher Gina Nakahodo said she had felt calm about the situation, until she reached the empty water aisle of her local grocery store early on Tuesday.

"We've had so many storms that have passed us by, but with these two back to back you begin to worry. Then all of the sudden the aisles are empty and there's no water and it makes your heart pound a little," Nakahodo said.

She said she talked to a couple visiting from California, and told them everything was going to be OK. "But in the back of my mind I'm wondering, 'what's going to happen?'," she said.

The Coast Guard warned people to prepare for the onset of heavy weather by Thursday, with the hurricane and tropical storm expected to generate extreme sea conditions, storm surge and surf of 10 to 15 feet (3 to 4.6 meters) throughout the island chain.

The National Weather Service issued a flash flood watch from early Thursday to early Saturday, with Hurricane Iselle expected to bring heavy rains to the islands.

Public schools would be closed on Thursday on the islands of Maui, Molokai, Lanai and the Big Island, the Hawaii State Department of Education said.

Hurricanes rarely hit Hawaii. The state was washed over by Hurricane Flossie in 2007, which caused 20-foot (6-meter) waves but very little damage. Hurricane Neki did minor damage to a marine national monument northwest of the islands in 2009.

In 1992, Hurricane Iniki pummeled the island of Kauai, killing six people and causing estimated damages of $2.4 billion. Before that, the last recorded hurricane to hit Hawaii was the Kohala Cyclone in 1871.

Separately on Tuesday, the NHC said Bertha, the second hurricane of the 2014 Atlantic season, had weakened to a tropical storm some 475 miles (765 km) west of Bermuda.

(Reporting by Malia Mattoch McManus in Honolulu; Additional reporting by Daniel Wallis. Writing by Eric M. Johnson Editing by Jeremy Gaunt.)



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TOP NEWS Kansas Republican senator Roberts fights off Tea Party challenger

KANSAS CITY Mo. (Reuters) - Veteran Republican Senator Pat Roberts fought off a Kansas primary challenge by a Tea Party-backed doctor who had promised a "family feud" with his distant relative President Barack Obama if elected, results on Wednesday showed.

Roberts secured 48 percent of the vote and Milton Wolf 41 percent in the four-candidate field, according to final but unofficial results, the Kansas secretary of state said.

Roberts has had a 47-year career in Congress and faced conservative challenger Wolf, who said he wanted to "save the Republic."

Wolf acknowledged a distant family tie to Obama but built his campaign on promises to repeal many of the Democratic president's policies. In an interview with CNN, Wolf promised "the mother of all family feuds to save America," if elected.

In primary battles ahead of November's midterm elections, Roberts' showing marked a victory for an incumbent Republican, a pattern that played out more broadly as voters went to the polls in other U.S. states on Tuesday. Missouri, Michigan and Washington state also held primaries.

In Kansas' 4th Congressional District, incumbent Republican Congressman Mike Pompeo won 63 percent of the vote to beat challenger Todd Tiahrt with 37 percent.

Pompeo, backed by powerful food and agriculture companies, has introduced legislation to nullify state efforts to require labeling on foods made from genetically modified crops.

In Missouri, Republican John "Jay" Ashcroft - whose father, John Ashcroft, was Missouri governor, U.S. attorney general and a U.S. senator - won about 54 percent of the vote in his bid for an open seat in the state senate against attorney Jack Spooner, who carried nearly 36 percent with all precincts reporting.

Five of Missouri's U.S. Representatives face primary challengers but are expected to hold their seats going into November's election.

NARROWLY BEATEN

In the Republican primary in Michigan, Tea Party-backed incumbent Justin Amash, member of a rebel group of U.S. House conservatives known for their resistance to compromise, declared victory over challenger Brian Ellis.

Also in Michigan, U.S. Representative Kerry Bentivolio, a reindeer farmer and Santa Claus impersonator, was defeated by challenger Dave Trott, making Bentivolio the third incumbent Republican congressman to lose in a primary so far this year.

In Washington state's fight to represent the 1st Congressional District, early results in the vote-by-mail race showed Republican Robert Sutherland narrowly beating retired Microsoft engineer Pedro Celis, each with about 15 percent of the vote.

Celis, former chairman of the Republican National Hispanic Assembly, was expected to win the primary easily to face off in November against the incumbent Democrat, U.S. Representative Suzan DelBene.

In the state's 4th District, ex-Washington Redskins football player Clint Didier seemed likely square off against former state agriculture director Dan Newhouse, in a Republican-against-Republican race to succeed retiring 10-term U.S. Congressman Richard "Doc" Hastings.

(Additional reporting by Sharon Bernstein in Sacramento, Calif.; Writing by Eric M. Johnson; Editing by Alison Williams)



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TOP NEWS Walgreen won't shift tax domicile abroad as buys Alliance Boots

(Reuters) - U.S. retailer Walgreen Co (WAG.N) will make a full takeover of Europe's biggest pharmacy chain Alliance Boots ABN.UL, but won't use the deal to move its tax domicile overseas after fierce criticism of such tax-cutting moves at home.



Walgreen said on Wednesday it would exercise an option to buy the 55 percent it does not already own of Alliance Boots for 3.13 billion pounds ($5.27 billion) in cash and 144.3 million Walgreen shares, after first taking a 45 percent stake in 2012.



It added the combined company, with more than 11,000 stores in 10 countries, would keep its tax domicile in the United States, with headquarters in the Chicago area. It is targeting combined revenue for 2016 of $126-130 billion.



Walgreen's retreat is the third major possible tax "inversion" deal to collapse in recent months amid heightened political sensitivity in the United States to such 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".



"The company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the U.S.," Chief Executive Greg Wasson said in a statement.



Walgreen announced a new goal for adjusted earnings per share (EPS) for fiscal 2016 of $4.25-$4.60 and said it was accelerating cost reduction initiatives to achieve $1 billion in savings by the end of fiscal 2017.



It also said it planned a new $3 billion share repurchase program.



(1 US dollar = 0.5940 British pound)



(Reporting by Emma Thomasson; Editing by Mark Potter)

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TOP NEWS China anti-trust regulator conducts new raids on Microsoft, Accenture

BEIJING (Reuters) - A Chinese anti-trust regulator conducted new raids on Microsoft Corp (MSFT.O) and partner in China Accenture PLC (ACN.N), the agency said on its website on Wednesday, after saying last week Microsoft is under investigation for anti-trust violations.

The State Administration for Industry and Commerce (SAIC) raided offices in Beijing, Liaoning, Fujian and Hubei, it said. The SAIC also raided the Dalian offices of IT consultancy Accenture, to whom Microsoft outsources financial work, according to the regulator.

"We're serious about complying with China's laws and committed to addressing SAIC's questions and concerns," a Beijing-based Microsoft spokeswoman said in an e-mailed statement.

Accenture also said it is involved in investigations.

"We can confirm that, as required by Chinese laws, we are cooperating with investigators of the State Administration for Industry and Commerce and are helping provide them with certain information related to one of our clients," Accenture Greater China said in an e-mailed statement, declining to elaborate.

Last week, the SAIC said it was formally investigating Microsoft for breach of anti-trust rules and had raided four of the software firm's offices in China.

Microsoft has been suspected of violating China's anti-monopoly law since June last year in relation to problems with compatibility, bundling and document authentication for its Windows operating system and Microsoft Office software, the SAIC said last week.

The SAIC declined to provide further comment when contacted by phone on Wednesday.

Microsoft Deputy General Counsel Mary Snapp was in Beijing to meet with the SAIC on Monday, where the regulator warned Microsoft to not obstruct the probe.

But industry experts have questioned how exactly Microsoft is violating anti-trust regulations in China, where the size of its business is negligible.

The U.S. company has taken a public beating in China in recent months. It has been subject to wider scrutiny against U.S. technology firms in China in the wake of former U.S. National Security Agency contractor Edward Snowden's cyber espionage revelations.

It has also seen its OneDrive cloud storage service disrupted in China, and had its latest Windows 8 operating system banned from being installed on the central government's new computers.

The Microsoft investigation comes amidst a spate of anti-trust probes against foreign firms in China, including mobile chipset maker Qualcomm Inc (QCOM.O) and German car maker Daimler AG's (DAIGn.DE) luxury auto unit Mercedes-Benz.

China is intensifying efforts to bring companies into compliance with an anti-monopoly law enacted in 2008, having in recent years taken aim at industries as varied as milk powder and jewellery.

China on Wednesday said it will punish foreign car makers Audi, owned by Volkswagen (VOWG_p.DE), and Fiat SpA's (FIA.MI) Chrysler as well as some 10 Japanese spare-part makers for anti-trust violations.

A number of multinational companies including Mead Johnson Nutrition Co (MJN.N) and Danone SA (DANO.PA) have been slapped with substantial fines following similar investigations in the past.

(Reporting by Paul Carsten; Editing by Christopher Cushing)



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