Sudan urges South Sudan to expel rebels for oil restart

KHARTOUM (Reuters) - Sudan will not allow South Sudan's oil exports to flow through its territory until Juba cuts ties with anti-Khartoum rebels and expels their leaders, a Sudanese vice president said on Wednesday, dampening hopes that bilateral tensions were over.

In a rare interview with foreign media, Sudan's Second Vice President al-Haj Adam Youssef also dismissed rumors that President Omar Hassan al-Bashir was in poor health, and said senior officers arrested for planning a coup against the veteran leader last month would get a fair trial.

Sudan and South Sudan agreed in September to secure their disputed border and resume oil exports after clashes brought them close to an all-out war in April. It was the worst violence since the South seceded last year under a 2005 deal that ended decades of civil war.

The African neighbors have yet to withdraw their armies from the border, a step both said was necessary to resume oil flows from the south, a lifeline for both of their economies.

South Sudan shut down its entire output of 350,000 barrels a day in January after failing to agree on an export fee with Sudan for the crude to pass through pipelines in the north.

On Sunday, South Sudan's negotiator Pagan Amum said exports could restart in two or three weeks, raising hopes that lingering issues would be resolved at talks in Khartoum this week.

But Youssef rejected Amum's assertion that security questions had been settled, and accused Juba of continuing to support and host rebels fighting the Khartoum government.

"We see that nothing has been done positively in this respect. We want action, of course, rather than talking," Youssef told Reuters, sitting in his office in the Republican Palace on the banks of the Nile.

"We hope the next few days will reveal some positive steps, he said, but added: "Unless the security is sorted out nothing is going to be implemented (regarding oil) ... We are waiting for concrete and positive steps."

Juba denies Khartoum's charges that it supports insurgents in Darfur and rebels of the SPLM-North fighting in the border states of South Kordafan and Blue Nile. But analysts say the allegations by Sudan are credible.

Journalists photographed Darfur rebels fighting alongside the South Sudanese army during the border clashes in April and have met some SPLM-North leaders in the South's capital Juba.

"They shouldn't be supported, of course, by any means of support, military support or political support. They have to be chased out," Youssef said.

Sudan would not budge on security, he said, adding that the government had not included oil exports fees from the South in its budget for next year.

Youssef ruled out talks with the SPLM-North, made up mainly of fighters who sided with the South during the civil war, until it cut ties with Juba.

"They have to come to us as Sudanese but not representing the South Sudan army," he said. "For example, if a Sudanese is working in the American marines and then he comes here to talk with us as a Sudanese, we are not going to accept it at all."

A FOILED COUP

Youssef, who comes from an Arab tribe in Darfur, dismissed health rumors about Bashir. The president has undergone surgery twice since August in Qatar and in Saudi Arabia.

"He is in his office upstairs and working, you can see him," he said, pointing in the direction of Bashir's office in the historic palace, once the seat of British colonial rule in the country.

Bashir has appeared in public less often in recent months and did not attend a major Arab mining conference in Khartoum last week, fuelling speculation that he was in poor health.

The president, who seized power in a 1989 coup, has faced street protests over galloping inflation since Sudan lost three-quarters of its original oil output to South Sudan when the latter gained independence last year.

Youssef said Bashir could still seek re-election in the next election, expected in 2015, although officials in his ruling National Congress Party (NCP) said last year he would not run again.

"At the right time, the institution will resume its meeting and decide who is the nominee for the NCP for the presidency for the next round," he said. "There is nothing that will hinder President Bashir to be nominated."

Weak opposition parties have failed to mobilize mass anti-government protests but signs of a new threat emerged when authorities arrested ex-spy chief Salah Gosh and a group of officers last month for planning a plot to undermine security.

Confirming for the first time it was a coup attempt against Bashir, Youssef said those arrested would get a fair trial. He dismissed the plot as "normal in Sudan", a country that has seen several governments overthrown since independence in 1956.

"They had prepared their weapons but not shouldered them yet," he said. "It is normal, isn't it? It's normal in a country like Sudan. Haven't you heard it in other countries?"

"The ambition of human beings cannot be suppressed. Everyone has ambitions to be president, even you probably think of that."

(Additional reporting by Khalid Abdelaziz; Writing by Ulf Laessing; Editing by Pascal Fletcher and David Stamp)

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Typhoon kills at least 283 in Philippines

NEW BATAAN, Philippines (Reuters) - Blocked roads and severed communications in the southern Philippines frustrated rescuers on Wednesday as teams searched for hundreds of people missing after the strongest typhoon this year killed at least 283 people.

Typhoon Bopha, with central winds of 120 kph (75 mph) and gusts of up to 150 kph (93 mph), battered beach resorts and dive spots on Palawan island on Wednesday but it was weakening as it moved west.

Hardest hit was the southern island of Mindanao, where Bopha made landfall on Tuesday. It triggered landslides and floods along the coast and in farming and mining towns inland.

Interior Minister Manuel Roxas said 300 people were missing.

"Entire families were washed away," Roxas, who inspected the disaster zone, told reporters.

Most affected areas were cut off by destroyed roads and collapsed bridges and army search-and-rescue teams were being flown in by helicopter.

Power was cut and communications were down.

According to tallies provided by the military and disaster agency officials, 283 people were killed.

Thousands of people were in shelters and officials appealed for food, water and clothing. Dozens of domestic flights were suspended on Wednesday.

The governor of the worst-hit province, Compostela Valley, in Mindanao said waves of water and mud came crashing down mountains and swept through schools, town halls and clinics where huddled residents had sought shelter.

The death toll in the province stood at 160. In nearby Davao Oriental province, where Bopha made landfall, 110 people were killed.

"The waters came so suddenly and unexpectedly, and the winds were so fierce," the Compostela Valley governor, Arthur Uy, told Reuters by telephone.

He said irrigation reservoirs on top of mountains had given way sending large volumes of water down to the valleys. Torrential rain often triggers landslides down slopes stripped of their forest cover.

Damage to agriculture and infrastructure in the province was extensive, Uy said.

STUNNED

Corn farmer Jerry Pampusa, 42, and his pregnant wife were marooned in their hut but survived.

"We were very scared," Pampus said. "We felt we were on an island because there was water everywhere."

Another survivor, Francisco Alduiso, said dozens of women and children who had taken shelter in a village centre, had been swept away.

"We found some of the bodies about 10 km (6 miles) away," Alduisa told Reuters. The only building left standing in his village was the school.

Another survivor, Julius Julian Rebucas, said his mother and brother disappeared in a flash flood.

"I no longer have a family," a stunned Rebucas said.

An army commander said two dozen people had been pulled from the mud in one area and were being treated in hospital.

About 20 typhoons hit the Philippines every year, often causing death and destruction.

Almost exactly a year ago, Typhoon Washi killed 1,500 people in Mindanao.

(Additional Reporting by Rosemarie Francisco and Manny Mogato; Editing by Robert Birsel)

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Iran says extracts data from U.S. spy drone

DUBAI (Reuters) - Iran has obtained data from a U.S. intelligence drone that shows it was spying on the country's military sites and oil terminals, Iranian media reported its armed forces as saying on Wednesday.

Iran announced on Tuesday that it had captured a ScanEagle drone belonging to the United States, but Washington said there was no evidence to support the assertion.

The incident has underscored tensions in the Gulf as Iran and the United States draw attention to their military capabilities in the vital oil exporting region in a standoff over Iran's disputed nuclear program.

"We have fully extracted the drone's information," Iran's Islamic Revolutionary Guard Corps (IRGC) said in a statement on Wednesday, according to Iran's English-language Press TV.

The drone was gathering military information and spying on the transfer of oil from Iran's petroleum terminals, the IRGC statement said, according to Press TV. Iran's main export terminal is at Kharg Island.

The U.S. government has focused on blocking Iran's oil exports through sanctions to persuade Iran to give up its disputed nuclear program, which the U.S. and its allies believe is aimed at developing a bomb, something Iran denies.

Israeli officials have threatened to strike Iran's nuclear sites if sanctions and diplomacy fail to stop its program.

Iran has repeatedly threatened to close the Strait of Hormuz - through which about 40 percent of the world's seaborne crude oil is shipped - if it comes under attack. U.S. commanders have said they will not let that happen.

The compact ScanEagle drone had been flying over the Gulf in the last few days and was captured when it strayed into Iranian airspace, the IRGC said in a statement on Tuesday.

The U.S. military has been using Boeing Co ScanEagle spy planes since 2004 and they have become a relatively inexpensive way for the United States and others to conduct surveillance.

In November, the United States said Iranian warplanes shot at a U.S. surveillance drone flying in international airspace.

Iran said the aircraft had entered its airspace to spy on Iranian oil platforms and said it would respond "decisively" to any incursions.

In December 2011, Iran said it had captured a U.S. RQ-170 reconnaissance drone in eastern Iran which was reported lost by U.S. forces in neighboring Afghanistan.

Iranian commanders have since announced they have extracted valuable technology from the aircraft and were in the process of reverse-engineering it for their own defense industry.

(Reporting By Yeganeh Torbati, Editing by William Maclean)

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Clinton says "desperate" Assad could use chemical arms

BEIRUT/BRUSSELS (Reuters) - Washington fears a "desperate" Syrian President Bashar al-Assad could use chemical weapons as rebels bear down on Damascus, Secretary of State Hillary Clinton said on Wednesday, repeating a vow to take swift action if he does.

Rebels fighting to overthrow Assad said they had surrounded an air base near Damascus, a fresh sign that battle is closing in on the Syrian capital, a day after NATO agreed to send air defense missiles to Turkey.

The Western military alliance's decision to send U.S., German and Dutch Patriot missile batteries to help defend the Turkish border would bring European and U.S. troops to Syria's frontier for the first time in the 20-month civil war.

Rebels said representatives of their armed groups were meeting in Turkey with officials from the new National Coalition, an opposition group now recognized by Turkey and several Arab and Western countries as Syria's legitimate authority.

The coalition plans to create a transitional government in exile, as well as a new military structure to unify the rebels, plagued by divisions and rivalries even as they advance.

"The goal is to get us on track to move towards a unified force, though we are not there yet. But right now, the priority is to create a structured leadership for all the rebels to follow," said a rebel organizer based in Turkey.

Heavier fighting erupted around Damascus a week ago, bringing a war that had previously been fought mainly in the provinces to the center of Assad's power. Fighters said on Wednesday they had surrounded the Aqraba air base, about 4 km (2-1/2 miles) outside the capital.

"We still do not control the air base but the fighters are choking it off. We hope within the coming hours we can take it," said Abu Nidal, a spokesman for a rebel force called the Habib al-Mustafa brigade.

He said rebels captured a unit of air defense soldiers, killing and imprisoning dozens while others escaped. Syria's state news agency said the army was still firmly in control of the base, but did not respond to rebel claims that they were surrounding the area.

Accounts like this from Syria are impossible to verify, as the government has restricted media access to the country.

For several days, Western officials have repeatedly focused on what they say is a threat that Assad could use poison gas.

After meeting other NATO foreign ministers in Brussels, Clinton said: "Our concerns are that an increasingly desperate Assad regime might turn to chemical weapons, or might lose control of them to one of the many groups that are now operating within Syria."

"We have sent an unmistakable message that this would cross a red line and those responsible would be held to account," she added.

U.S. officials have said this week they have intelligence that Syria may be making preparations to use chemical arms.

"It looks to me as if the Syrian opposition forces have a strategy and are implementing it with some success, and appear to be bearing in on Damascus for what could be an end-game," said Nigel Inkster, ex-deputy head of Britain's MI6 spy agency, now at London's International Institute for Strategic Studies.

"I suspect there will be those among Assad's supporters who take the view that if it comes to an existential struggle, they will have nothing to lose by unleashing CW (chemical weapons)."

Syria, which has not signed the international chemical weapons treaty banning the use of poison gas, says it would never use such weapons on its own people.

FIGHTING IN SUBURBS

Wednesday saw fighting in a semi-circle of suburbs on the capital's eastern outskirts.

"The shelling is so loud, it feels like every other minute there is an air raid or an artillery shell hitting. We were woken up early by the sounds of the shelling in the eastern suburbs today," Ayman, who lives near the suburb of Jaramana, said by Skype.

Most of the areas being shelled are pro-opposition, apart from Jaramana, seen as a pro-government or neutral area, where town elders have refused rebel requests to pass through.

A rebel unit said fighters had attacked a checkpoint on the outskirts of Jaramana. Heavy fighting was also reported in the suburbs of Saqba, Irbeen, and Zamalka, according to the pro-opposition Syrian Observatory for Human Rights.

The army's strategy has been to divide Damascus, Assad's seat of power, from the countryside where rebels are increasingly dominant. Air raids and artillery have pounded rebel-held suburbs near the city for more than a week, in what activists call the worst shelling yet in the area.

A Syrian government source said the army had pushed rebels back 9 km (5 miles) from the capital. Rebels contacted did not confirm or deny this, but said their goal was not yet to enter the city.

"It is very clear that the government wants to cut off the capital, the city was built that way with its air bases all around it. Right now we are concerning ourselves with certain strategic points that we want to take before we try to enter the city," said the rebel spokesman Abu Nidal, speaking by Skype.

MISSILE DEFENCE

NATO's decision to send air defense missiles to the Turkish frontier is a first military step into the region by an alliance that has so far refused to repeat its armed intervention that helped toppled Libya's Muammar Gaddafi last year.

NATO says the Patriot missiles are purely defensive; Syria and allies Russia and Iran say the move increases regional instability and could set the stage to impose a no-fly zone.

Turkey, a NATO member hostile to Assad and hosting thousands of refugees, says it needs the air defense batteries to shoot down any missiles that might be fired across its border. The German, Dutch and U.S. batteries would take weeks to deploy.

"What it does do, of course, is send a very powerful signal," Lieutenant General Frederick Hodges, commander of NATO's new land command headquarters in the Turkish city of Izmir, told Reuters.

"The Assad regime, the father and now the current Assad, have in desperate times taken desperate steps, so this is a very clear signal about what is not going to be allowed. NATO is not going to allow an expansion of what the Assad regime is doing."

A Turkish foreign ministry official said: "The Patriots were requested to create a counter measure to every possible kind of threat, first and foremost short-range ballistic missiles, because we know they have them."

Cengiz Candar, a veteran commentator at Turkey's Radikal newspaper who travelled with Foreign Minister Ahmet Davutoglu to Brussels this week, said the government was worried about some of Syria's 500 missiles falling into the wrong hands.

"The minister and his team were of the view that Syria was not expected to use them against Turkey, but that there was a risk of these weapons falling into the hands of 'uncontrolled forces' when the regime collapses," Candar wrote on Wednesday.

Fighting also continued for a seventh day near the highway leading to the Damascus International Airport, which opposition activists say has become an on-off battle zone.

Fighting around Damascus has led airlines to suspend flights and prompted diplomats to leave, adding to a sense the fight is closing in. Hungary said on Wednesday it would shut its embassy.

(Additional reporting by Peter Apps in London, Oliver Holmes in Beirut, Justyna Pawlak and Adrian Croft in Brussels, Nick Tattersall in Istanbul, Jonathon Burch in Ankaraand Krisztina Than in Budapest; Writing by Peter Graff; Editing by Giles Elgood)

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Egypt's vice president suggests way out of crisis

CAIRO (Reuters) - Egypt's vice president proposed ideas on Wednesday to defuse unrest over a draft constitution that has polarized the most populous Arab nation, with Islamists fighting opposition protesters near the presidential palace.

Vice President Mahmoud Mekky said amendments to disputed articles could be agreed with the opposition. A written agreement could then be submitted to the next parliament, to be elected after a referendum on the constitution on December 15.

"There must be consensus," he told a news conference, saying opposition demands must be respected to overcome the crisis.

Egyptian opposition leader Amr Moussa said President Mohamed Mursi should make a formal offer for dialogue, rather than what Mekky had presented as personal ideas to resolve the row.

A senior Muslim Brotherhood official said Mekky's proposals needed to be crystallized.

"We are ready when there is something formal, something expressed in definite terms, we will not ignore it, especially if there is something useful," Moussa told Reuters during talks with other opposition figures.

The website of Al-Ahram said opposition leaders were discussing Mekky's proposals.

They have previously urged Mursi to retract a decree widening his powers, defer the plebiscite and agree to revise the constitution, but have not echoed calls from street protesters for his overthrow and the "downfall of the regime".

Mursi had returned to work at his compound a day after it came under siege from protesters furious at his assumption of extraordinary powers via an edict on November 22.

Mursi, narrowly elected by popular vote in June, said he acted to stop courts still full of judges appointed by ousted strongman Hosni Mubarak from derailing a constitution meant to complete a political transition in Egypt, long a strategic ally of Washington and signatory to a 1979 peace deal with Israel.

Rival groups threw stones at each other outside the presidential palace in northern Cairo on Wednesday. Islamist supporters of Mursi tore down tents erected by leftist foes, who had begun a sit-in there.

"They hit us and destroyed our tents. Are you happy, Mursi? Aren't we Egyptians too?" asked protester Haitham Ahmed.

Dozens of opposition supporters streamed away from the palace as hundreds of Islamists arrived, shouting, "God is greatest. The people support the president's decision."

Mohamed Mohy, a pro-Mursi demonstrator who was filming the scene, said: "We are here to support our president and his decisions and save our country from traitors and agents."

Facing the gravest crisis of his six-month-old tenure, Mursi has shown no sign of buckling, confident that Islamists can win the referendum and a parliamentary election to follow.

Many Egyptians yearn for an end to political upheaval that has scared off investors and tourists, damaging the economy.

Mekky said street mobilization by both sides posed a "real danger" to Egypt. "If we do not put a stop to this phenomenon right away ..., where are we headed? We must calm down."

DIALOGUE

U.S. Secretary of State Hillary Clinton weighed into Egypt's political debate, saying dialogue was urgently needed on the new constitution, which should "respect the rights of all citizens".

Clinton and Mursi worked together last month to broker a truce between Israel and Hamas Islamists in the Gaza Strip.

"It needs to be a two-way dialogue ... among Egyptians themselves about the constitutional process and the substance of the constitution," Clinton told a news conference in Brussels.

Washington is worried about rising Islamist power in Egypt, a staunch security partner under Mubarak, who preserved Cairo's peace treaty with Israel, a pact still bolstered by billions of dollars of U.S. military and economic assistance.

The Muslim Brotherhood, to which Mursi belonged before he was elected, had summoned supporters to an open-ended demonstration at the presidential palace on Wednesday to respond to "oppressive abuses" by opposition parties.

Brotherhood spokesman Mahmoud Ghozlan was quoted on its Facebook page as saying opposition groups "imagined they could shake legitimacy or impose their views by force".

Essam el-Erian, deputy head of the Brotherhood's political party, said: "The president will not retreat, and if the state apparatus is weakened by the wounds of the previous period, then the people can impose their will and protect legitimacy."

Leftist opposition leader Hamdeen Sabahy promptly urged his supporters to go to the streets as well, heightening the chances of confrontation between Islamists and their opponents.

Responding to the scuffles at the palace, opposition leader Mohamed ElBaradei urged Mursi via Twitter to protect protesters there if he wants to keep "what remains of his legitimacy".

About 10,000 protesters had encircled the palace on Tuesday for what organizers dubbed a "last warning" to Mursi. "The people want the downfall of the regime," they chanted, roaring the signature slogan of last year's uprising against Mubarak.

Officials said 35 protesters and 40 police were wounded.

"LEAVE"

The "last warning" may turn out to be one of the last gasps for a disparate opposition that has little chance of scuttling next week's vote on a constitution drawn up over six months and swiftly approved by an Islamist-dominated assembly.

Protesters have scrawled "leave" over Mursi's palace walls, but the president has made clear he is not going anywhere.

Ahmed Kamel, spokesman for the Congress Party led by former Arab League chief Amr Moussa, said Mursi should meet opposition demands, not call for an Islamist counter-demonstration.

Opposition leaders have urged Mursi to scrap his decree, defer the referendum and agree to revise the constitution, but have not echoed protesters' calls for his overthrow.

"The demands of the street are moving faster than those of the politicians," said Elijah Zarwan, a fellow with the European Council on Foreign Relations.

State institutions, with the partial exception of the judiciary, have mostly fallen in behind Mursi.

The army, the muscle behind all previous Egyptian presidents in the republic's six-decade history, has gone back to barracks, having apparently lost its appetite to intervene in politics.

In a bold move, Mursi sacked Mohamed Hussein Tantawi, the Mubarak-era army commander and defence minister, in August and removed the sweeping powers that the military council, which took over after Mubarak fell, had grabbed two months earlier.

The liberals, leftists, Christians, ex-Mubarak followers and others opposed to Mursi have yet to generate a mass movement or a grassroots political base to challenge the Brotherhood.

Investors have seized on hopes that Egypt's turbulent transition, which has buffeted the economy for two years, may soon head for calmer waters, sending stocks 1.6 percent higher after a 3.5 percent rally on Tuesday.

Egypt has turned to the IMF for a $4.8 billion loan to help it out of a crisis that has depleted its foreign currency reserves. The government said on Wednesday the process was on track and its request would go to the IMF board as expected.

The board is due to review the facility on December 19.

(Additional reporting by Tom Perry, Tamim Elyan and Edmund Blair; Writing by Alistair Lyon; Editing by Mark Heinrich)

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Israel pushes settlement plan ahead; EU summons envoy

JERUSALEM/BRUSSELS (Reuters) - Israel moved ahead with plans to build 3,000 settler homes in one of the most sensitive areas of the West Bank, as the European Union summoned Israel's envoy to add its voice to a storm of international protest.

Israeli Prime Minister Benjamin Netanyahu said on Wednesday the global condemnation, some of it from the Jewish state's closest traditional allies, would not deter it from defending its "vital interests".

Palestinian President Mahmoud Abbas on Wednesday declared the housing project, which could divide the West Bank and make the creation of a contiguous future Palestinian state almost impossible, to be an uncrossable "red line".

An Israeli Defence Ministry official said architects and contractors appeared before a subcommittee of the military-run Civil Administration in the West Bank and registered their plans for construction in the E1 corridor near Jerusalem, a preliminary step before building permits are issued.

Angered by the U.N. General Assembly's de facto recognition of Palestinian statehood on Thursday, Israel announced the next day it would build the new dwellings for settlers, on land near Jerusalem that Palestinians seek for a future state.

BARREN HILLS

The decision by Netanyahu's pro-settler government to build houses on the E1 corridor's barren hills could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for an independent state on contiguous territory.

"E1 is a red line that cannot be crossed," Palestinian President Mahmoud Abbas said in the West Bank city of Ramallah.

The subcommittee convened hours before Netanyahu was due to visit Germany, where he faces a dressing down from Chancellor Angela Merkel over the settlement project.

The Israeli prime minister, for his part, is still smarting from what he considers Berlin's betrayal after Germany abstained in the U.N. vote upgrading the Palestinians' status to non-member state at the world body.

Netanyahu, stopping in Prague to thank the Czech Republic for voting against, reiterated that he remained committed to a two-state solution with the Palestinians.

Peace should entail "a demilitarized Palestinian state (that) recognizes the one and only Jewish state of Israel", he said, citing two Israeli conditions Palestinians have balked at.

Netanyahu, favored to win a January 22 general election with the backing of right-wing voters, has rejected calls by the United States and Europe to reverse course over settlements, which most countries consider illegal.

"Israel will not sacrifice its vital interests for the sake of obtaining the world's applause," he said in Prague.

Israel's housing minister has said construction work in E1 will not begin for at least a year. Commenting on the subcommittee's session, the defence official said it was a "procedural, preliminary stage".

ENVOYS SUMMONED

The European Union summoned Israel's ambassador.

"The Israeli ambassador has been invited by the Executive Secretary General of the EEAS (European External Action Service) to meet to set out the depth of our concerns," a spokeswoman said.

The Executive Secretary General - the senior diplomat in charge of policy for EU foreign affairs chief Catherine Ashton - is Pierre Vimont, former French ambassador to Washington.

Italian Foreign Minister Giulio Terzi summoned the Israeli envoy in Rome for a similar meeting on Wednesday, following Britain, France, Spain, Sweden and Denmark in such a move.

But EU states have been struggling to agree on a common response.

The spokeswoman said the EU reaction would depend on the extent to which they threatened the creation of a viable state of Palestine in the future.

After winning the U.N. status upgrade, the Palestinians can access the International Criminal Court in The Hague, which prosecutes people for genocide, war crimes and other major human rights violations and where it could complain about Israel.

The Palestinians have said they will not rush to sign up to the International Criminal Court, but have warned that seeking action against Israel in the court would remain an option if Israel continued to build illegal settlements.

They sent a letter of protest to U.N. Secretary-General Ban Ki-moon on Monday.

"A clear message must be sent to Israel that all of its illegal policies must be ceased or that it will be held accountable and will have to bear the consequences if its violations and obstruction of peace efforts," Palestinian U.N. observer Riyad Mansour wrote.

UN RESOLUTION "ONE-SIDED"

Analysts said Netanyahu hoped to solidify right-wing support by promoting settlements in the run-up to the parliamentary election, even at the risk of diplomatic isolation.

U.S.-sponsored Israeli-Palestinian talks collapsed in 2010 in a dispute over settlement building, and Abbas pressed ahead with his unilateral move at the United Nations over U.S. and Israeli objections and calls to return to the negotiating table.

"Our conflict with the Palestinians will be resolved only through direct negotiations that address the needs of both Israelis and Palestinians," Netanyahu said in Prague.

"It will not be resolved through one-sided resolutions at the U.N. that ignore Israel's vital needs and undermine the basic foundations of peace."

The West Bank and East Jerusalem, captured by Israel in the 1967 Arab-Israeli war, is home to some 500,000 Israelis and 2.5 million Palestinians.

(Writing by Andrew Roche; Editing by Jon Boyle)

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Colombia-FARC peace talks resume in Cuba as kidnapping issue heats up

HAVANA (Reuters) - Peace talks between the Colombian government and the Revolutionary Armed Forces of Colombia, or FARC, resumed in Havana on Wednesday in hopes of ending the 50-year-old bloody conflict even as fighting and bickering continued.

Negotiators took a break last week from the first round of talks which began in November and which seek an end to the last Marxist-led armed rebellion in South America, considered a vestige of the cold war.

They arrived Wednesday at the Cuban capital's convention center in a city suburb.

For the first time, government negotiators entered through a back door, avoiding reporters, while the FARC read a long declaration to the press about the war and the human and economic damage it has wrought.

Comments earlier this week by a FARC negotiator that the group was still holding "prisoners of war" brought harsh words from the government's lead negotiator, Humberto de la Calle, despite denials by two other rebel negotiators.

"The FARC has to respond to the victims, it has to clarify this issue of kidnapping, the way to deal with the issue of kidnapping is not with ambiguities," he said before departing Colombia for Cuba.

The FARC seized dozens of politicians and members of the armed forces over the years to use as bargaining chips with the government. Such high-profile captives have since been released.

But the families of civilians taken to fund the FARC's war say scores of people remain in jungle camps and the group continues to kidnap despite a pledge this year to cease taking captives for ransom.

Colombian forces killed at least 20 FARC guerrillas in an air and ground raid near the border with Ecuador at the weekend, the army said on Monday, the deadliest strike against rebels since the peace process started.

"It seems normal to us that at the start the positions are far apart. The effort is to put to the test the art of stringing pearls ... bring positions closer together, loosen them and build outcomes satisfactory for the sides," the FARC declaration said.

The statement did not mention the hostage issue or the raid.

Colombia's government has vowed to keep up military operations and not allow the rebels to rest and recoup, as they did during previous failed talks more than a decade ago. The FARC has called a two-month ceasefire.

FARC negotiator, Jesus Carvajalino, alias Andres Paris, told Reuters, "the raid was the government's Christmas present while we continue with the cease fire."

Colombian President Juan Manuel Santos is hoping a decade of U.S.-backed blows against the FARC has left the group sufficiently weakened to seek an end to the war.

The FARC is banking that the damage its 9,000 fighters can still inflict on South America's fourth largest economy is enough to garner significant concessions from the government.

Cuba and Norway are acting as guarantors of the talks which are broaching some of the root causes of the conflict such as agrarian development, drugs, political participation of opposition groups and victims' reparations.

Santos said at the weekend that the discussions should not drag on for too long and must be completed by November 2013 or earlier. The rebels have said they would remain in negotiations as long as necessary.

(Additional reporting by Nelson Acosta, Helen Murphy in Bogota; Editing by Jackie Frank)

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Blast hits Somali district in Kenyan capital, three wounded

NAIROBI (Reuters) - An explosion struck a predominantly Somali neighborhood in the Kenyan capital Nairobi on Wednesday, wounding at least three people during the evening rush hour, police said.

Ambulance sirens wailed through the city's congested streets and a Reuters reporter at the scene saw pools of blood on the ground. The victims had been swiftly moved from the blast site.

"I can confirm there has been a blast Eastleigh. At least three people are wounded," Nairobi police chief Moses Ombati told Reuters by telephone as he travelled to the scene.

Kenya has suffered a wave of deadly attacks in Nairobi, the port city of Mombasa and the eastern garrison town of Garissa since it sent troops into Somalia over a year ago to fight al Shabaab militants there.

(Reporting by Humphrey Malalo and Richard Lough; Editing by Jon Hemming)

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Clinton says crucial countries meet Afghan funding pledges

BRUSSELS (Reuters) - Secretary of State Hillary Clinton said on Wednesday it was crucial that NATO allies stick to their commitments to fund Afghanistan's security forces after Western forces end their combat role in the country in 2014.

Afghanistan's foreign backers have pledged $4.1 billion per year to fund Afghan security forces after 2014, but there are concerns that European countries hit by austerity cutbacks may not be able to meet their commitments.

"It will be crucial for every nation to follow through on their commitments, and for those who haven't yet committed any funding to do so," Clinton told a meeting in Brussels of NATO foreign ministers and countries contributing to the NATO-led military mission in Afghanistan.

Clinton said it was essential to focus on economic and political transition in Afghanistan for which countries have pledged $16 billion, and stressed the importance of regional support.

"Every nation in the region has a stake in Afghanistan's future and a responsibility to step up and help secure it," she said.

German Foreign Minister Guido Westerwelle stressed the importance of European countries delivering on aid commitments.

"Of course that is not easy during times of tightening purse strings. But it is in the interest of European citizens. That is why I am making sure that the commitments made are kept," he told reporters.

Afghan foreign ministry spokesman Janan Mosazai told reporters in Brussels that the Kabul government was fully aware of the financial pressures on countries.

"But we believe that the $4.1 billion annual funding commitment to the Afghan National Security Forces post-2014 is an investment, not only in the security of Afghanistan but also in the security of the broader region and the wider world," he said.

The ministers also discussed setting up a mechanism to oversee spending of the billions of dollars of foreign funding for the Afghan forces after 2014.

HANDLE OWN FINANCES

The Afghan government wants to handle its own finances but with Western concerns over corruption running high, NATO diplomats say the alliance is likely to get a strong role in managing international funding after 2014.

NATO diplomats said the new funding body will build on the existing Afghan National Army Trust Fund, set up to finance the rapid expansion of the Afghan army over the last few years, and will include international donors and the Afghan government.

Mosazai said Afghanistan wanted to deal with other countries after 2014 as an independent, sovereign country.

"But at the same time we want to ensure we have structures in place that will (reassure) everybody about the accountable, transparent, effective and efficient expenditure of those funds," he said.

Afghanistan is ranked as one of the world's most corrupt countries. The theft of about $935 million from the Kabulbank two years ago and the subsequent foot-dragging in prosecuting those responsible underlined concerns about Afghanistan's ability to manage its finances and enforce the rule of law.

(Additional reporting by Claire Davenport; Editing by Michael Roddy)

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Magnitude 5.9 quake hits eastern Iran: USGS

LONDON (Reuters) - A magnitude 5.9 earthquake struck eastern Iran on Wednesday, 42 miles north-northeast of Birjand, the U.S. Geological Survey reported.

It said the quake, which it initially recorded as magnitude 6.0, was very shallow at a depth of 6.2 miles and had hit the area at 12:08 p.m. EDT (1708 GMT).

(Editing by Michael Roddy)

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