Central African Republic rebels halt advance, agree to peace talks

DAMARA, Central African Republic (Reuters) - Rebels in Central African Republic said they had halted their advance on the capital on Wednesday and agreed to start peace talks, averting a clash with regionally backed troops.

The Seleka rebels had pushed to within striking distance of Bangui after a three-week onslaught and threatened to oust President Francois Bozize, accusing him of reneging on a previous peace deal and cracking down on dissidents.

Their announcement on Wednesday gave the leader only a limited reprieve as the fighters told Reuters they might insist on his removal in the negotiations.

"I have asked our forces not to move their positions starting today because we want to enter talks in (Gabon's capital) Libreville for a political solution," said Seleka spokesman Eric Massi, speaking by telephone from Paris.

"I am in discussion with our partners to come up with proposals to end the crisis, but one solution could be a political transition that excludes Bozize," he said.

Bozize on Wednesday sacked his Army Chief of Staff and took over the defense minister's role from his son, Jean Francis Bozize, according to a decree read on national radio, a day after publicly criticizing the military for failing to repel the rebels.

The advance by Seleka, an alliance of mostly northeastern rebel groups, was the latest in a series of revolts in a country at the heart of one of Africa's most turbulent regions - and the most serious since the Chad-backed insurgency that swept Bozize to power in 2003.

Diplomatic sources have said talks organized by central African regional bloc ECCAS could start on January 10. The United States, the European Union and France have called on both sides to negotiate and spare civilians.

Central African Republic is one of the least developed countries in the world despite its deposits of gold, diamonds and other minerals. French nuclear energy group Areva mines the country's Bakouma uranium deposit - France's biggest commercial interest in its former colony.

RELIEF IN BANGUI

News of the rebel halt eased tension in Bangui, where residents had been stockpiling food and water and staying indoors after dark.

"They say they are no longer going to attack Bangui, and that's great news for us," said Jaqueline Loza in the crumbling riverside city.

ECCAS members Chad, Congo Republic, Gabon and Cameroon have sent hundreds of soldiers to reinforce CAR's army after a string of rebel victories since early December.

Gabonese General Jean Felix Akaga, commander of the regional force, said his troops were defending the town of Damara, 75 km (45 miles) north of Bangui and close to the rebel front.

"Damara is a red line not to be crossed ... Damara is in our control and Bangui is secure," he told Reuters. "If the rebellion decides to approach Damara, they know they will encounter a force that will react."

Soldiers armed with Kalashnikovs, rocket propelled grenade launchers and truck-mounted machineguns had taken up positions across the town, which was otherwise nearly-abandoned.

Some of the fighters wore turbans that covered their faces and had charms strung around their necks and arms meant to protect them against enemy bullets.

Chad's President Idriss Deby, one of Bozize's closest allies, had warned the rebels the regional force would confront them if they approached the town.

Chad provided training and equipment to the rebellion that brought Bozize to power by ousting then-president Ange Felix Patasse, who Chad accused of supporting Chadian dissidents.

Chad is also keen to keep a lid on instability in the territory close to its main oil export pipeline and has stepped in to defend Bozize against insurgents in the past.

A CAR government minister told Reuters the foreign troop presence strengthened Bozize's bargaining position ahead of the Libreville peace talks.

"The rebels are now in a position of weakness," the minister said, asking not to be named. "They should therefore stop imposing conditions like the departure of the president."

Central African Republic is one of a number of countries in the region where U.S. Special Forces are helping local soldiers track down the Lord's Resistance Army, a rebel group which has killed thousands of civilians across four nations.

France has a 600-strong force in CAR to defend about 1,200 of its citizens who live there.

Paris used air strikes to defend Bozize against a rebellion in 2006. But French President Francois Hollande turned down a request for more help, saying the days of intervening in other countries' affairs were over.

(Additional reporting by Paul-Marin Ngoupana in Bangui and Jon Herskovitz in Johannesburg; Writing by Richard Valdmanis; Editing by Andrew Heavens and Janet Lawrence)

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Israel arresting Palestinians to preempt uprising: security

JERUSALEM: Israel plans to step up arrests of suspected militants in the occupied West Bank to prevent a rising tide of low-intensity conflict and civil unrest from turning into an uprising, security sources say.

"There is a certain (Palestinian) awakening," one source told AFP.

"As a consequence a decision was taken within the security establishment to increase intelligence activity and arrests among members of Hamas or activists against Israel," he added. "It started in the past few days and will increase."

Recent events, however, suggest that such a policy could backfire.

On Tuesday, undercover Israeli troops attempting to arrest a suspected Islamic Jihad militant were pelted with rocks by an angry crowd.

The squad made their arrest, but Palestinian security sources said dozens were lightly injured when soldiers fired rubber bullets, live rounds and tear gas at their attackers.

Israeli public radio's military affairs reporter quoted military sources on Wednesday as saying the arrest operation was routine, but the Palestinian response was anything but so.

"What is exceptional is the grave disturbances," she quoted her sources as saying. "An operation like this would not in the past have brought disturbances of this kind."

"There is a certain rise in disturbances in the territories but talk of a third intifada is premature," she added.

Earlier this month, troops in a southern West bank village were forced to abort an attempt to arrest a Palestinian policeman suspected of militant activity when crowds of local residents pelted them with rocks.

They seized the man later at a military checkpoint near Hebron.

The Palestinians have twice risen up against their Israeli occupiers in so-called intifadas (uprisings) -- in December 1987 and September 2000.

But neither movement succeeded in ending the Israeli occupation of the West Bank that began in 1967. Now, with direct talks between Israel and the Palestinians on hold since September 2010, observers have raised the spectre of a third uprising breaking out.

Ghassan Khatib, a veteran of the first intifada, who later became a Palestinian cabinet minister and now teaches at the West Bank's Birzeit University, does not see a guiding hand in the current round of clashes.

Violence "spontaneous"

He considers as "spontaneous" the daily confrontations between Palestinian farmers and Jewish settlers, the hurling of rocks and petrol bombs at Israeli motorists in Palestinian areas and the clashes with troops.

"I don't think that it can be connected to any specific event; it's been building up gradually," he told AFP.

"I think it's a result of the dangerous combination of a complete absence of any political horizon together with serious economic and financial crisis that is leading to increased unemployment and poverty," he added, noting an increase in settlement activity.

"In my view the situation is not sustainable," he said.

Israel's Shin Bet domestic security service tied an upswing in clashes to November's eight-day battle between Israel and Palestinian militants in the Gaza Strip.

"In response to the operation, Jerusalem and the (West Bank) also saw an increase in the level of violence," Shin Bet said in its monthly summary for November.

It recorded 122 Palestinian attacks on Israelis in the West Bank, compared with 39 in October, and 44 incidents in Jerusalem, up from 31 the month before.

Israeli police spokesman Micky Rosenfeld said Palestinian youngsters seemed to be heavily involved in the unrest, which some Israeli media are already calling "a mini-intifada."

"In general there's been an increase in the number of incidents that have taken place, stone-throwing incidents as well as Molotov cocktails on the main highways," he told AFP.

"The majority of incidents take place in the morning when Palestinian children are on their way to school and in the afternoon when Palestinian children are returning from school," he said.

-AFP/ac

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Brain image study: Fructose may spur overeating

This is your brain on sugar — for real. Scientists have used imaging tests to show for the first time that fructose, a sugar that saturates the American diet, can trigger brain changes that may lead to overeating.

After drinking a fructose beverage, the brain doesn't register the feeling of being full as it does when simple glucose is consumed, researchers found.

It's a small study and does not prove that fructose or its relative, high-fructose corn syrup, can cause obesity, but experts say it adds evidence they may play a role. These sugars often are added to processed foods and beverages, and consumption has risen dramatically since the 1970s along with obesity. A third of U.S. children and teens and more than two-thirds of adults are obese or overweight.

All sugars are not equal — even though they contain the same amount of calories — because they are metabolized differently in the body. Table sugar is sucrose, which is half fructose, half glucose. High-fructose corn syrup is 55 percent fructose and 45 percent glucose. Some nutrition experts say this sweetener may pose special risks, but others and the industry reject that claim. And doctors say we eat too much sugar in all forms.

For the study, scientists used magnetic resonance imaging, or MRI, scans to track blood flow in the brain in 20 young, normal-weight people before and after they had drinks containing glucose or fructose in two sessions several weeks apart.

Scans showed that drinking glucose "turns off or suppresses the activity of areas of the brain that are critical for reward and desire for food," said one study leader, Yale University endocrinologist Dr. Robert Sherwin. With fructose, "we don't see those changes," he said. "As a result, the desire to eat continues — it isn't turned off."

What's convincing, said Dr. Jonathan Purnell, an endocrinologist at Oregon Health & Science University, is that the imaging results mirrored how hungry the people said they felt, as well as what earlier studies found in animals.

"It implies that fructose, at least with regards to promoting food intake and weight gain, is a bad actor compared to glucose," said Purnell. He wrote a commentary that appears with the federally funded study in Wednesday's Journal of the American Medical Association.

Researchers now are testing obese people to see if they react the same way to fructose and glucose as the normal-weight people in this study did.

What to do? Cook more at home and limit processed foods containing fructose and high-fructose corn syrup, Purnell suggested. "Try to avoid the sugar-sweetened beverages. It doesn't mean you can't ever have them," but control their size and how often they are consumed, he said.

A second study in the journal suggests that only severe obesity carries a high death risk — and that a few extra pounds might even provide a survival advantage. However, independent experts say the methods are too flawed to make those claims.

The study comes from a federal researcher who drew controversy in 2005 with a report that found thin and normal-weight people had a slightly higher risk of death than those who were overweight. Many experts criticized that work, saying the researcher — Katherine Flegal of the Centers for Disease Control and Prevention — painted a misleading picture by including smokers and people with health problems ranging from cancer to heart disease. Those people tend to weigh less and therefore make pudgy people look healthy by comparison.

Flegal's new analysis bolsters her original one, by assessing nearly 100 other studies covering almost 2.9 million people around the world. She again concludes that very obese people had the highest risk of death but that overweight people had a 6 percent lower mortality rate than thinner people. She also concludes that mildly obese people had a death risk similar to that of normal-weight people.

Critics again have focused on her methods. This time, she included people too thin to fit what some consider to be normal weight, which could have taken in people emaciated by cancer or other diseases, as well as smokers with elevated risks of heart disease and cancer.

"Some portion of those thin people are actually sick, and sick people tend to die sooner," said Donald Berry, a biostatistician at the University of Texas MD Anderson Cancer Center in Houston.

The problems created by the study's inclusion of smokers and people with pre-existing illness "cannot be ignored," said Susan Gapstur, vice president of epidemiology for the American Cancer Society.

A third critic, Dr. Walter Willett of the Harvard School of Public Health, was blunter: "This is an even greater pile of rubbish" than the 2005 study, he said. Willett and others have done research since the 2005 study that found higher death risks from being overweight or obese.

Flegal defended her work. She noted that she used standard categories for weight classes. She said statistical adjustments were made for smokers, who were included to give a more real-world sample. She also said study participants were not in hospitals or hospices, making it unlikely that large numbers of sick people skewed the results.

"We still have to learn about obesity, including how best to measure it," Flegal's boss, CDC Director Dr. Thomas Frieden, said in a written statement. "However, it's clear that being obese is not healthy - it increases the risk of diabetes, heart disease, cancer, and many other health problems. Small, sustainable increases in physical activity and improvements in nutrition can lead to significant health improvements."

___

Online:

Obesity info: http://www.cdc.gov/obesity/data/trends.html

___

Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

Mike Stobbe can be followed at http://twitter.com/MikeStobbe

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House Votes on Senate's 'Fiscal Cliff' Deal

The Republican-dominated House of Representatives has approved a bipartisan Senate deal to avert the "fiscal cliff," sending the compromise to President Obama's for his signature.

House Republicans agreed to the up-or-down vote Tuesday evening, despite earlier talk of trying to amend the Senate bill with more spending cuts before taking a vote.

If House Republicans had tweaked the legislation, there would have been no clear path for its return to the Senate before a new Congress is sworn in Thursday.

The Senate passed the same bill by an 89-8 vote in the wee hours of New Year's Day.

Before deciding on the up-or-down vote in the House, GOP leaders had emerged from a morning conference meeting disenchanted by the legislative package devised by Senate Minority Leader Mitch McConnell, R-Mo., and Vice President Biden early this morning, with several insisting they could not vote on it as it stood.

"I do not support the bill," House Majority Leader Eric Cantor, R-Va., said as he left the meeting. "We're looking for the best path forward. No decisions have been made yet."

House Speaker John Boehner refused to comment on the meeting, but his spokesman said, "the lack of spending cuts in the Senate bill was a universal concern amongst members in today's meeting."

Bill Clark/Roll Call/Getty Images

'Fiscal Cliff' Negotiations: Congress Reaches Agreement Watch Video

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"Conversations with members will continue throughout the afternoon on the path forward," Brendan Buck said in a statement.

As lawmakers wrestled with the legislation, the non-partisan Congressional Budget Office estimated that the bill's added spending combined with the cost of extending tax cuts for those making under $400,000 would actually add $3.9 trillion to the deficit over the next 10 years. The Joint Committee on Taxation reached a similar conclusion.

The impasse once again raised the specter of sweeping tax hikes on all Americans and deep spending cuts' taking effect later this week.

"This is all about time, and it's about time that we brought this to the floor," House Minority Leader Nancy Pelosi said after emerging from a meeting with Democrats.

"It was a bill that was passed in the U.S. Senate 89-8. Tell me when you've had that on a measure as controversial as this?" she said of the overwhelming vote.

Pelosi could not say, however, whether the measure had the backing of most House Democrats.

"Our members are making their decisions now," she said.

Biden, who brokered the deal with McConnell, joined Democrats for a midday meeting on Capitol Hill seeking to shore up support for the plan.

While Congress technically missed the midnight Dec. 31 deadline to avert the so-called cliff, both sides have expressed eagerness to enact a post-facto fix before Americans go back to work and the stock market opens Wednesday.

"This may take a little while but, honestly, I would argue we should vote on it today," said Rep. Tom Cole, R-Okla., who sits on the Budget Committee. "We know the essential details and I think putting this thing to bed before the markets is important.

"We ought to take this deal right now and we'll live to fight another day, and it is coming very soon on the spending front."

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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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Colorado town in the thick of fracking dispute

Longmont, COLORADO: The US oil and gas industry is condemning a move by one Colorado town to impose its own ban on the practice of hydraulic fracturing.

Voters in Longmont have chosen to outlaw the controversial practice within city limits, but drillers and the state government said the city has overstepped its bounds.

Space for large houses with mountain views -- one of the reasons the population of the Colorado city of Longmont has grown steadily over the past twenty years. But some residents are not happy with a new neighbour that has moved in recent years.

Natural gas wells and pipelines have sprung up around Longmont - often very close to subdivisions.

Michael Bellmont, one of the activists involved in a recent campaign to ban hydraulic fracturing in Longmont, said modern fracking practices use chemicals that can contaminate surrounding air and water, and is dangerous to health.

He said: "if you live within half a mile of these wells, one is 250 per cent more likely to have negative and chronic health impacts, and 60 per cent more likely to get cancer."

The majority of Longmont voters agree with Bellmont -- in November, they approved the ban on hydraulic fracturing in the city by a 60 to 40 per cent margin.

That ban has triggered a row with the oil and gas industry, which already leases land and drills in Longmont, and maintains fracking is safe.

Colorado governor John Hickenlooper -- a supporter of the oil and gas industry -- expects drilling companies to sue to overturn the ban.

Tisha Conoly Schuller, president and CEO of the Colorado Oil & Gas Association, said: "The oil and gas industry -- we're evaluating our options, and then the state government has also been looking at their options. So I imagine we will see a lawsuit in Longmont, and there's lots of different ways it could come about."

Environmentalists are locked in a heated debate with county and state regulators over the issue -- including proposed rules on how far wells should be from people's homes.

Dr William Fleckenstein of the Colorado School of Mines said: "It adds a lot of jobs, there's a lot of rigs that are there. But at the same time, the rigs that are drilling -- the pipelines are going to impact people's lives and the industry has to take into account those impacts."

In Longmont, the city is gearing up for a protracted and expensive legal battle -- one which could set a precedent for other towns and cities that want to take matters regarding fracking into their own hands.

-CNA/ac

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Brain image study: Fructose may spur overeating

This is your brain on sugar — for real. Scientists have used imaging tests to show for the first time that fructose, a sugar that saturates the American diet, can trigger brain changes that may lead to overeating.

After drinking a fructose beverage, the brain doesn't register the feeling of being full as it does when simple glucose is consumed, researchers found.

It's a small study and does not prove that fructose or its relative, high-fructose corn syrup, can cause obesity, but experts say it adds evidence they may play a role. These sugars often are added to processed foods and beverages, and consumption has risen dramatically since the 1970s along with obesity. A third of U.S. children and teens and more than two-thirds of adults are obese or overweight.

All sugars are not equal — even though they contain the same amount of calories — because they are metabolized differently in the body. Table sugar is sucrose, which is half fructose, half glucose. High-fructose corn syrup is 55 percent fructose and 45 percent glucose. Some nutrition experts say this sweetener may pose special risks, but others and the industry reject that claim. And doctors say we eat too much sugar in all forms.

For the study, scientists used magnetic resonance imaging, or MRI, scans to track blood flow in the brain in 20 young, normal-weight people before and after they had drinks containing glucose or fructose in two sessions several weeks apart.

Scans showed that drinking glucose "turns off or suppresses the activity of areas of the brain that are critical for reward and desire for food," said one study leader, Yale University endocrinologist Dr. Robert Sherwin. With fructose, "we don't see those changes," he said. "As a result, the desire to eat continues — it isn't turned off."

What's convincing, said Dr. Jonathan Purnell, an endocrinologist at Oregon Health & Science University, is that the imaging results mirrored how hungry the people said they felt, as well as what earlier studies found in animals.

"It implies that fructose, at least with regards to promoting food intake and weight gain, is a bad actor compared to glucose," said Purnell. He wrote a commentary that appears with the federally funded study in Wednesday's Journal of the American Medical Association.

Researchers now are testing obese people to see if they react the same way to fructose and glucose as the normal-weight people in this study did.

What to do? Cook more at home and limit processed foods containing fructose and high-fructose corn syrup, Purnell suggested. "Try to avoid the sugar-sweetened beverages. It doesn't mean you can't ever have them," but control their size and how often they are consumed, he said.

A second study in the journal suggests that only severe obesity carries a high death risk — and that a few extra pounds might even provide a survival advantage. However, independent experts say the methods are too flawed to make those claims.

The study comes from a federal researcher who drew controversy in 2005 with a report that found thin and normal-weight people had a slightly higher risk of death than those who were overweight. Many experts criticized that work, saying the researcher — Katherine Flegal of the Centers for Disease Control and Prevention — painted a misleading picture by including smokers and people with health problems ranging from cancer to heart disease. Those people tend to weigh less and therefore make pudgy people look healthy by comparison.

Flegal's new analysis bolsters her original one, by assessing nearly 100 other studies covering almost 2.9 million people around the world. She again concludes that very obese people had the highest risk of death but that overweight people had a 6 percent lower mortality rate than thinner people. She also concludes that mildly obese people had a death risk similar to that of normal-weight people.

Critics again have focused on her methods. This time, she included people too thin to fit what some consider to be normal weight, which could have taken in people emaciated by cancer or other diseases, as well as smokers with elevated risks of heart disease and cancer.

"Some portion of those thin people are actually sick, and sick people tend to die sooner," said Donald Berry, a biostatistician at the University of Texas MD Anderson Cancer Center in Houston.

The problems created by the study's inclusion of smokers and people with pre-existing illness "cannot be ignored," said Susan Gapstur, vice president of epidemiology for the American Cancer Society.

A third critic, Dr. Walter Willett of the Harvard School of Public Health, was blunter: "This is an even greater pile of rubbish" than the 2005 study, he said. Willett and others have done research since the 2005 study that found higher death risks from being overweight or obese.

Flegal defended her work. She noted that she used standard categories for weight classes. She said statistical adjustments were made for smokers, who were included to give a more real-world sample. She also said study participants were not in hospitals or hospices, making it unlikely that large numbers of sick people skewed the results.

"We still have to learn about obesity, including how best to measure it," Flegal's boss, CDC Director Dr. Thomas Frieden, said in a written statement. "However, it's clear that being obese is not healthy - it increases the risk of diabetes, heart disease, cancer, and many other health problems. Small, sustainable increases in physical activity and improvements in nutrition can lead to significant health improvements."

___

Online:

Obesity info: http://www.cdc.gov/obesity/data/trends.html

___

Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

Mike Stobbe can be followed at http://twitter.com/MikeStobbe

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Fiscal Cliff Deal Vote Likely in Senate

The so-called "fiscal cliff" came tonight -- but now there is a specific deal on the table to try to soften it after the fact, according to congressional sources.

Senate Majority Leader Harry Reid, D-Nev., said the deal would get a vote in the Senate tonight. The House would not vote before Tuesday, having adjourned for the evening before word of the agreement spread.

"It is a compromise, so we don't love it," said a senior White House official. "But it is the right thing to do for the economy."

Vice President Joe Biden met this evening with Senate Democrats in order to convince them to support the proposal, which would extend Bush-era tax cuts permanently for people making less than $400,000 per year and households making less than $450,000, the sources said.

The steep "sequester" budget cuts scheduled to go into effect with the new year would be postponed two months, said sources. They said half the money would come from cuts elsewhere, and the other half from new revenue.

The deal also would affect taxes on investment income and estates, and extend unemployment benefits for a year, the congressional sources added.

Biden was asked to confirm the deal as he entered a meeting with Senate Democrats tonight, but only smiled and said, "Happy New Year."

"We're waiting to see how the vice president brings his party along," a McConnell aide said.

"The end is in sight," said a Democratic aide with Reid's office. "If everyone cooperates, it's possible things can move pretty quickly."

After the meeting, Sen. Charles Schumer, D-N.Y., said there was "strong" support for the plan among Senate Democrats.

"The number of people who believe we should go over the cliff rather than vote for this is very small," Schumer said, predicting a "strong Democratic vote for this."

"There is a feeling that it's not that this proposal is regarded as great or as loved in any way, but it's a lot better than going off the cliff," he said. "Vice President Biden was very persuasive."

Sen. Dianne Feinstein, D-Calif., callled the compromise the "best" that could be done.

Chip Somodevilla/Getty Images

'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video

After the midnight deadline passes, lawmakers could still prevent a tax hike by making retroactive any legislation that passes in the weeks ahead, experts said. The IRS said it has not yet advised employers to withhold more from their employees' paychecks, pending a deal.

But the deal, if it can pass through Congress, does not entirely solve the problem of the "fiscal cliff." In fact, it could set up a new showdown over the same spending cuts in just two months that would be amplified by a brewing fight over how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.

Earlier, during a midday news conference, Obama said he was optimistic about compromise.

"It appears that an agreement to prevent this New Year's tax hike is within sight, but it's not done," he said. "There are still issues left to resolve, but we're hopeful that Congress can get it done."

Congressional and White House negotiators worked out a tentative plan that, in addition to extending current tax rates for households making $450,000 or less, would raise the estate tax from 35 to 40 percent for estates larger than $5 million; and prevent the alternative minimum tax from hammering millions of middle-class workers, according to sources familiar with the talks.

Capital gains taxes would rise to 20 percent from 15, according to a senior White House official.

The deal would also extend for one year unemployment insurance benefits set to expire Tuesday, and avert a steep cut to Medicare payments for doctors, congressional sources said.

"I can report that we've reached an agreement on the all the tax issues," said Senate Minority Leader Mitch McConnell in an afternoon speech on the Senate floor.

At the time, McConnell said that federal spending cuts remained a sticking point. That hurdle later appeared to be cleared by postponing the debate two more months.

The White House had proposed a three-month delay of the cuts to allow more time to hash out details for deficit reduction, while many Senate Democrats wanted a flat one-year delay. Republicans insisted that some spending cuts should be implemented now as part of any deal.

"In order to get the sequester moved, you're going to have to have real, concrete spending cuts," said Rep. Mike Rogers, R-Mich. Without that, he said, "I don't know how it passes the House."

Some Republicans also said Obama unduly complicated progress toward an agreement by seeming to take a victory lap on taxes at his campaign-style event at the White House.

"Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans," Obama said, raising the ire of several Republicans. "Obviously, the agreement that's currently discussed would raise those rates, and raise them permanently."

Those words drew a sharp retort from Republican Sen. John McCain.

Rather than staging a "cheerleading rally," McCain said, the president should have been negotiating the finishing touches of the deal.

"He comes out and calls people together and has a group standing behind him, laughs and jokes and ridicules Republicans. Why?" said McCain.

Several Democrats also voiced disappointment with the president and the emerging deal.

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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.

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.

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.

(Reporting by Jack Kim; Editing by Nick Macfie)

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Philippines set to quit Marcos wealth chase

MANILA: The Philippines is to wind down a near-30-year hunt for the embezzled wealth of late dictator Ferdinand Marcos, with more than half the supposed $10 billion fortune still missing, the man in charge of the search said.

With Marcos' widow and children back in positions of political power, and the government tightening its belt, the cost of the pursuit has become prohibitive, said Andres Bautista, head of the Presidential Commission on Good Government.

"It has become a law of diminishing returns at this point," Bautista told AFP in an interview at the commission's offices, a now rundown building where Marcos' oldest daughter Imee used to hold office.

"It's been 26 years and people you are after are back in power. At some point, you just have to say, 'We've done our best', and that's that. It is really difficult.

"In order now to be able to get these monies back, you need to spend a lot."

Bautista, 48, left a high-paying corporate job two years ago to answer a call to help the government of President Benigno Aquino, who promised to end corruption and uplift the lives of millions of poor Filipinos.

He and like-minded young lawyers who joined the agency soon found out that reforming the under-funded commission -- itself prone to corruption -- while at the same time going after powerful people, was no easy task.

Despite numerous criminal and civil cases being filed against them, none of the Marcos heirs or their cronies, who have been accused of plundering government coffers, have so far been successfully prosecuted, while high-powered lawyers have been used to tie up the judicial process for years on end.

Long-term chronic mishandling of the commission led to an unmanageable paper trail and evidence went missing that led to bitter losses in litigation, Bautista said.

"These accusations (against the commission officials) are not without basis. They were the ones in charge of guarding the chicken coop and some of them helped themselves to the eggs," he said, refusing to name names.

The president's late mother and democracy icon, Corazon Aquino, replaced Marcos after a bloodless people power revolt ended his 20-year regime in 1986 and sent him and his family into US exile.

She made it her first priority to create the commission, tasked with recovering all of Marcos's wealth. Conservative estimates put the worth of assets and funds looted from government coffers at $10 billion.

But before she left office she allowed Marcos's flamboyant widow, Imelda -- known for her thousands of pairs of shoes -- and their son and two daughters to return home.

And over the past two decades the Marcoses have regained and consolidated their political base.

Marcos's son and namesake, Ferdinand Marcos Junior, is a senator who has hinted at contesting the presidency in the 2016 elections.

Imelda is expected to run for a second term in the House of Representatives in May 2013, while her daughter Imee, governor of the family's Ilocos Norte provincial bailiwick, is also widely thought to want a second term.

"There is still a lot of mystery surrounding the fabled wealth, and my sense is there is still much more out there," Bautista said.

"Our problem now is that everyone is back in power. That does not in any way make our job any simpler."

Since its creation, the agency has recovered 164 billion pesos (about $4 billion), some invested in prime New York real estate, jewellery, and about $600 million stashed in secret numbered Swiss bank accounts.

The jewellery, including a 150 carat giant Burmese ruby and diamond tiara, is locked in a vault at the central bank, and at one point the international auction house Christie's estimated it could fetch up to $8.5 million.

More recently Bautista worked closely with the New York district attorney's office to charge a former personal secretary of Imelda and two others over a conspiracy to sell a Monet painting that had been bought by the family.

Marcos, an astute art buyer, distributed the priceless collection of at least 300 artworks to cronies when his regime was about to crumble. Only half have been recovered so far and the rest are missing, Bautista said.

The official said he had recommended to President Benigno Aquino that the commission wind down its operations, and transfer its work to the justice department.

If Aquino agrees he would have to get parliament to pass a law abolishing the agency.

"They (the Marcos family) have the resources to go head-to-head with us in respect to litigation. Why do you think forfeiture cases are still languishing 26 years after?" Bautista said.

The agency's annual budget of less than 100 million pesos was only enough to pay its staff of about 200, many of them young lawyers who turned down high paying jobs elsewhere, he added.

"It's a lonely job. It doesn't win you any friends."

-AFP/ac

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