Congress ‘rebels’ force Telangana meet

NEW DELHI: Union home minister Sushil Kumar Shinde has convened an all-party meeting in New Delhi on December 28 to discuss the Telangana statehood issue. The move is essentially aimed at placating the seven Congress MPs from the region who were growing increasingly restive over the government's indecision on Telangana and had even threatened to boycott the FDI vote in the Lok Sabha on Wednesday to mark their protest.

The all-party meeting proved a successful trade-off, with all the seven MPs — Ponnam Prabhakar, G Vivekanad, Madhu Yaskhi Goud, S Rajaiah, M Jagannath, Rajgopal Reddy and G Sukhender Reddy — willingly voting with the government.

Encouraged by having got the government to agree to the all-party deliberations — the second in nearly two years, the first being when P Chidambaram met representatives of eight Andhra parties on January 6, 2011 — the MPs demanded that each party be represented by only one leader to present a united and final view.

Incidentally, the seven MPs from Telangana had, over the last couple of days, given the Congress leadership some anxious moments, especially when they put up a no-show at a floor coordination meeting called by the party on Tuesday.

Sensing portents of a rebellion, home minister and Leader of Lok Sabha Shinde as well as parliamentary affairs minister Kamal Nath had been working over the last couple of days to get the sulking MPs on board for the crucial vote.

The MPs kept up the pressure on the government by initially refusing to take Shinde and Nath's advice, and then failing to turn up for a floor coordination meeting called by the party. Some of the MPs even met TRS chief K Chandrashekar Rao on Tuesday, adding to the Congress's worries.

The MPs insisted that the government give them a firm commitment on the all-party meeting before they commit on the FDI vote.At the last all-party meeting, the government had allowed parties to depute two representatives each to speak on the demand for separate Telangana state. This time, the Congress MPs from Andhra are said to have insisted on each party deputing only one leader to articulate the party's views on Telangana issue.

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Longer tamoxifen use cuts breast cancer deaths

Breast cancer patients taking the drug tamoxifen can cut their chances of having the disease come back or kill them if they stay on the pills for 10 years instead of five years as doctors recommend now, a major study finds.

The results could change treatment, especially for younger women. The findings are a surprise because earlier research suggested that taking the hormone-blocking drug for longer than five years didn't help and might even be harmful.

In the new study, researchers found that women who took tamoxifen for 10 years lowered their risk of a recurrence by 25 percent and of dying of breast cancer by 29 percent compared to those who took the pills for just five years.

In absolute terms, continuing on tamoxifen kept three additional women out of every 100 from dying of breast cancer within five to 14 years from when their disease was diagnosed. When added to the benefit from the first five years of use, a decade of tamoxifen can cut breast cancer mortality in half during the second decade after diagnosis, researchers estimate.

Some women balk at taking a preventive drug for so long, but for those at high risk of a recurrence, "this will be a convincer that they should continue," said Dr. Peter Ravdin, director of the breast cancer program at the UT Health Science Center in San Antonio.

He reviewed results of the study, which was being presented Wednesday at a breast cancer conference in San Antonio and published by the British medical journal Lancet.

"The result of this trial will have a major, immediate impact on premenopausal women," Ravdin said.

About 50,000 of the roughly 230,000 new cases of breast cancer in the United States each year occur in women before menopause. Most breast cancers are fueled by estrogen, and hormone blockers are known to cut the risk of recurrence in such cases.

Tamoxifen long was the top choice, but newer drugs called aromatase inhibitors — sold as Arimidex, Femara, Aromasin and in generic form — do the job with less risk of causing uterine cancer and other problems.

But the newer drugs don't work well before menopause. Even some women past menopause choose tamoxifen over the newer drugs, which cost more and have different side effects such as joint pain, bone loss and sexual problems.

The new study aimed to see whether over a very long time, longer treatment with tamoxifen could help.

Dr. Christina Davies of the University of Oxford in England and other researchers assigned 6,846 women who already had taken tamoxifen for five years to either stay on it or take dummy pills for another five years.

Researchers saw little difference in the groups five to nine years after diagnosis. But beyond that time, 15 percent of women who had stopped taking tamoxifen after five years had died of breast cancer versus 12 percent of those who took it for 10 years. Cancer had returned in 25 percent of women on the shorter treatment versus 21 percent of those treated longer.

Tamoxifen had some troubling side effects: Longer use nearly doubled the risk of endometrial cancer. But it rarely proved fatal, and there was no increased risk among premenopausal women in the study — the very group tamoxifen helps most.

"Overall the benefits of extended tamoxifen seemed to outweigh the risks substantially," Dr. Trevor Powles of the Cancer Centre London wrote in an editorial published with the study.

The study was sponsored by cancer research organizations in Britain and Europe, the United States Army, and AstraZeneca PLC, which makes Nolvadex, a brand of tamoxifen, which also is sold as a generic for 10 to 50 cents a day. Brand-name versions of the newer hormone blockers, aromatase inhibitors, are $300 or more per month, but generics are available for much less.

The results pose a quandary for breast cancer patients past menopause and those who become menopausal because of their treatment — the vast majority of cases. Previous studies found that starting on one of the newer hormone blockers led to fewer relapses than initial treatment with tamoxifen did.

Another study found that switching to one of the new drugs after five years of tamoxifen cut the risk of breast cancer recurrence nearly in half — more than what was seen in the new study of 10 years of tamoxifen.

"For postmenopausal women, the data still remain much stronger at this point for a switch to an aromatase inhibitor," said that study's leader, Dr. Paul Goss of Massachusetts General Hospital. He has been a paid speaker for a company that makes one of those drugs.

Women in his study have not been followed long enough to see whether switching cuts deaths from breast cancer, as 10 years of tamoxifen did. Results are expected in about a year.

The cancer conference is sponsored by the American Association for Cancer Research, Baylor College of Medicine and the UT Health Science Center.

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

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NYC Subway Pusher Charged With Murder

A New York City man was charged today with murder for shoving another man onto subway tracks where he was struck and killed by an oncoming train.

Naeem Davis, 30, was charged after being questioned by police since Tuesday about the death of Ki-Suck Han, 58, of Queens, N.Y.

The charges include murder second degree: intentional, as well as murder second degree: depraved indifference.

He is charged with murdering Han "with depraved indifference" not because he intended to kill Han, but because his lack of regard for Han's life resulted in the death. Two sources involved in Davis' arrest and charging say there is a question whether he intended to kill Han or whether his death was an unintended consequence of an altercation.

NYC Man Pushed on Subway Tracks, Killed by Train Watch Video

Bystanders Pull Mom, Son From Subway Tracks Watch Video

Davis admitted to police while explaining the incident that he shoved Han in a way that caused him to fall onto the subway tracks, according to multiple sources involved with the investigation.

Han struggled to pull himself up from the shoulder-high track bed and back onto the platform at the 49th Street and Seventh Avenue station around 12:30 p.m. on Monday, but was hit and killed by a Q train when it barrelled into the station.

Davis could be heard arguing with Han before the fatal shove, according to surveillance video from the station. Davis told police that Han was harassing him and would not leave him alone, so he pushed Han.

Detectives are investigating whether the altercation began at the subway station turnstile and whether Han had jumped that turnstile and bumped Davis.

Police are also awaiting toxicology results on Han, who was found with an empty pint bottle of vodka on him when he died, according to sources.

Davis has no currently known mental illness history. He has prior arrests for minor charges, although the search of his arrest record is not complete. Those arrests in New York City appear to be peddler related.

He is expected to be arraigned this evening in New York.

Han death shocked New York City and the moment was frozen in the city's psyche by a photograph that captured Han with his arms and head above the platform staring at the oncoming train.

A doctor who was standing nearby attempted to perform CPR on Han, but he was pronounced dead at Roosevelt Hospital shortly after the accident.

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NATO warns Syria not to use chemical weapons

BRUSSELS/BEIRUT (Reuters) - NATO told Syrian President Bashar al-Assad on Tuesday that any use of chemical weapons in his fight against encroaching rebel forces would be met by an immediate international response.

The warning from NATO Secretary-General Anders Fogh Rasmussen came as U.S. government sources said Washington had information that Syria was making what could be seen as preparations to use its chemical arsenal.

Syrian forces meanwhile bombarded rebel districts near Damascus in a sustained counter-attack to stem rebel gains around Assad's power base as the insurgency may be entering a decisive phase.

International concern over Syria's intentions has been heightened by reports that its chemical weapons have been moved and could be prepared for use.

"The possible use of chemical weapons would be completely unacceptable for the whole international community and if anybody resorts to these terrible weapons I would expect an immediate reaction from the international community," Rasmussen told reporters at the start of a meeting of alliance foreign ministers in Brussels.

The chemical threat made it urgent for the alliance to send Patriot anti-missile missiles to Turkey, Rasmussen said.

The French Foreign Ministry referred to "possible movements on military bases storing chemical weapons in Syria" and said the international community would react if they were used.

Britain has told the Syrian government that any use of chemical weapons would have "serious consequences", Foreign Secretary William Hague said.

U.S. President Barack Obama on Monday told Assad not to use chemical weapons, without saying how the United States might respond. The Foreign Ministry in Damascus said it would never use such weapons against Syrians.

CLASSIFIED INTELLIGENCE

The U.S. has collected what has been described as highly classified intelligence information demonstrating that Syria is making what could be construed as preparations to use elements of its extensive chemical weapons arsenal, two U.S. government sources briefed on the issue said.

One of the sources said that there was no question that the US "Intelligence community" had received information pointing to "preparations" under way in Syria related to chemical weapons. The source declined to specify what kind of preparations had been reported, or how close the intelligence indicated the Syrians were to deploying or even using the weapons.

Western military experts say Syria has four suspected chemical weapons sites, and it can produce chemical weapons agents including mustard gas and sarin, and possibly also VX nerve agent. The CIA has estimated that Syria possesses several hundred liters of chemical weapons and produces hundreds of tonnes of agents annually.

The fighting around Damascus has led foreign airlines to suspend flights and prompted the United Nations and European Union to reduce their presence in the capital, adding to a sense that the fight is closing in.

The army fightback came a day after the Syrian foreign ministry spokesman was reported to have defected in a potentially embarrassing blow to the government.

The Syrian Observatory for Human Rights said 200 people were killed across Syria on Monday, more than 60 of them around Damascus. Assad's forces bombarded districts to the south-east of the capital on Tuesday, near to the international airport, and in the rebel bastion of Daraya to the south-west.

Opposition footage posted on the Internet showed a multiple rocket launcher fire 20 rockets, which activists said was filmed at the Mezze military airport in Damascus.

Reuters could not independently verify the footage due to the government's severe reporting restrictions.

In central Damascus, shielded for many months from the full force of a civil war in which 40,000 people have been killed, one resident reported hearing several loud explosions.

"I have heard four or five thunderous blows. It could be barrel bombs," she said, referring to makeshift bombs which activists say Assad's forces have dropped from helicopters on rebel-dominated areas.

MORTAR ATTACK

The state news agency said that 28 students and a teacher were killed near the capital when rebels fired a mortar bomb on a school. Rebels have targeted government-held residential districts of the capital.

The mainly Sunni Muslim rebel forces have made advances in recent weeks, seizing military bases, including some close to Damascus, from forces loyal to Assad, who is from Syria's Alawite minority linked to Shi'ite Islam.

Faced with creeping rebel gains across the north and east of the country, and the growing challenge around the capital, Assad has increasingly resorted to air strikes against the insurgents.

A diplomat in the Middle East said Syrian Foreign Ministry spokesman Jihad Makdissi had left the country and defected, while the British-based Observatory said it had information that he flew from Beirut on Monday afternoon heading for London.

In Beirut, a diplomat said Lebanese officials had confirmed that Makdissi spent several days in Beirut before leaving on Monday, but could not confirm his destination.

"We're aware of reports that he has defected and may be coming to the UK. We're seeking clarification," a Foreign Office spokeswoman in London said.

Makdissi was the public face to the outside world of Assad's government as it battled the 20-month-old uprising. But he had barely appeared in public for several weeks before Monday's report of his defection.

He had little influence in a system largely run by the security apparatus and the military. But Assad's opponents will see the loss of such a high profile figure, if confirmed, as further evidence of a system crumbling from within.

The United Nations and European Union both said they were reducing their presence in Syria in response to the escalated violence around the capital.

A spokesman for U.N. humanitarian operations said the move would not stop aid deliveries to areas which remained accessible to relief convoys.

"U.N.-funded aid supplies delivered through SARC (Syrian Arab Red Crescent) and other charities are still moving daily where the roads are open," Jens Laerke told Reuters in Geneva.

"We have not suspended our operation, we are reducing the non-essential international staff."

Three remaining international staff at the European Union delegation, who stayed on in Damascus after the departure of most Western envoys, crossed the border into Lebanon on Tuesday after pulling out of the Syrian capital.

(Additional reporting by David Brunnstrom in Brussels, Khaled Yacoub Oweis in Cairo, Erika Solomon, Oliver Holmes and Ayat Basma in Beirut, Mark Hosenball, Mohammed Abbas and David Cutler in London, and Stephanie Nebehay in Geneva; Editing by Giles Elgood)

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Pregnant Kate 'feeling better' after second day in hospital

LONDON: Prince William's pregnant wife Kate was feeling better on Tuesday after a second day of hospital treatment for acute morning sickness, palace officials said.

William spent most of the day at his wife's bedside as congratulations poured in from around the world after Monday's announcement that the Duke and Duchess of Cambridge, both 30, are expecting their first child -- a new royal heir.

"The Duchess of Cambridge is continuing to feel better," a spokesman for the couple's office at St James' Palace said.

"She and the Duke are immensely grateful for the good wishes they have received."

He added that Kate would remain at the private King Edward VII Hospital in central London and continue with treatment for hyperemesis gravidarum, a severe form of morning sickness that affects about one in 200 pregnant women.

News of the pregnancy has ended feverish speculation about a new heir that began immediately after their lavish wedding in April 2011.

The baby will be third in line to the throne regardless of whether it is a girl or a boy, after a historic agreement among the 16 Commonwealth realms last year to end the centuries-old practice of male primogeniture.

Britain said on Tuesday that it received formal consent for the new laws from the other realms on the very day the pregnancy was announced, in what Deputy Prime Minister Nick Clegg called a "wonderful coincidence".

William, the second in line to the throne after his father Prince Charles, visited his wife in hospital following her admission on Monday afternoon and spent more than six hours with her on Tuesday.

Wearing a purple jumper over a shirt and jeans, he emerged from the hospital at 5:45pm (1745 GMT) and smiled at the waiting media before being driven away.

St James's Palace has said Kate is still at the "very early stages" of pregnancy -- likely less than 12 weeks -- and it is thought the news was released because her admission to hospital would have made her condition public.

Hospitalisation is needed in severe cases of hyperemesis gravidarum to treat dehydration with intravenous fluids for a few days, as it is impossible to keep fluids down.

Kate is expected to stay in hospital for several days and will then require a period of rest, a palace spokeswoman said, adding that her public engagements have been cancelled for the next week.

The diagnosis has meanwhile sparked speculation that Kate may be expecting twins, as experts say the condition is more common with a multiple pregnancy.

Palace officials said the royal couple only "recently" became aware that Kate was pregnant although there has been speculation for months, fuelled by images of the duchess sipping water instead of wine at official dinners.

She showed no sign of being ill at her most recent public engagement on Friday, when she displayed her hockey skills at her old primary school, wearing high-heeled boots and an Alexander McQueen tartan coat.

There was reportedly a rush to inform members of the royal family of the news before the public announcement.

Queen Elizabeth II, her husband Prince Philip, Charles and his wife Camilla were said by the palace to be "delighted", as were Kate's parents, Carole and Michael Middleton.

William's brother Prince Harry, 28, who will be bumped down to fourth in the line of succession by the new arrival, was reportedly informed by email in Afghanistan, where he is deployed as an Apache attack helicopter pilot.

News of the pregnancy sparked huge excitement in the British press as well as a frenzy of Internet speculation about what the child will be called and what it will look like, with numerous bizarre mock-up photographs being circulated.

Prime Minister David Cameron, who had his fourth child in 2010, led the congratulations by saying the royal couple would make "wonderful parents".

US President Barack Obama and his wife Michelle, who met William and Kate during a state visit to Britain last year, also sent their congratulations.

Australian Prime Minister Julia Gillard said the news "is going to bring joy to many around the world", while her New Zealand counterpart John Key said it was "fabulous".

New Zealand had led the push for Commonwealth realms to scrap the laws barring first-born daughters from inheriting the throne.

- AFP/fa

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CBI to probe graft charges in road project

NEW DELHI: The CBI has started an investigation into the multi-crore highway development fraud in the World Bank funded Lucknow-Muzaffarpur stretch. The investigation agency on Tuesday sought details from National Highways Authority of India (NHAI) in connection with the case.

Sources said CBI swung into action eight months after the department of economic affairs sent a copy of the report sent by the Institutional Integrity Unit of the World Bank to the highways ministry and asked it to probe the case. The World Bank report says private highway contractors gave bribes and gifts to NHAI officials and consultants, besides "sundry cash payments" amounting to Rs 2.23 crore.

The World Bank loan for the project is $620 million. The CBI started the probe on the day MoS for road transport and highways Sarvey Sathyanarayana told Rajya Sabha the ministry had asked NHAI "to verify consequences occurred on the outcome of projects in terms of quality or project completion and take appropriate action as per provisions of agreements with contractors /supervision consultants".

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CDC says US flu season starts early, could be bad

NEW YORK (AP) — Flu season in the U.S. is off to its earliest start in nearly a decade — and it could be a bad one.

Health officials on Monday said suspected flu cases have jumped in five Southern states, and the primary strain circulating tends to make people sicker than other types. It is particularly hard on the elderly.

"It looks like it's shaping up to be a bad flu season, but only time will tell," said Dr. Thomas Frieden, director of the Centers for Disease Control and Prevention.

The good news is that the nation seems fairly well prepared, Frieden said. More than a third of Americans have been vaccinated, and the vaccine formulated for this year is well-matched to the strains of the virus seen so far, CDC officials said.

Higher-than-normal reports of flu have come in from Alabama, Louisiana, Mississippi, Tennessee and Texas. An uptick like this usually doesn't happen until after Christmas. Flu-related hospitalizations are also rising earlier than usual, and there have already been two deaths in children.

Hospitals and urgent care centers in northern Alabama have been bustling. "Fortunately, the cases have been relatively mild," said Dr. Henry Wang, an emergency medicine physician at the University of Alabama at Birmingham.

Parts of Georgia have seen a boom in traffic, too. It's not clear why the flu is showing up so early, or how long it will stay.

"My advice is: Get the vaccine now," said Dr. James Steinberg, an Emory University infectious diseases specialist in Atlanta.

The last time a conventional flu season started this early was the winter of 2003-04, which proved to be one of the most lethal seasons in the past 35 years, with more than 48,000 deaths. The dominant type of flu back then was the same one seen this year.

One key difference between then and now: In 2003-04, the vaccine was poorly matched to the predominant flu strain. Also, there's more vaccine now, and vaccination rates have risen for the general public and for key groups such as pregnant women and health care workers.

An estimated 112 million Americans have been vaccinated so far, the CDC said. Flu vaccinations are recommended for everyone 6 months or older.

On average, about 24,000 Americans die each flu season, according to the CDC.

Flu usually peaks in midwinter. Symptoms can include fever, cough, runny nose, head and body aches and fatigue. Some people also suffer vomiting and diarrhea, and some develop pneumonia or other severe complications.

A strain of swine flu that hit in 2009 caused a wave of cases in the spring and then again in the early fall. But that was considered a unique type of flu, distinct from the conventional strains that circulate every year.

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Online:

CDC: http://www.cdc.gov/flu/weekly

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Obama Sees 'Potential' for Averting the Fiscal Cliff

President Obama says he sees "potential" for averting the "fiscal cliff" in 28 days, but that no deal will get done unless Republicans consent to raise income-tax rates on the top 2 percent of U.S. earners.

"We're going to have to see the rates on the top 2 percent go up and we're not going to be able to get a deal without it," Obama told Bloomberg TV in his first televised interview since the Nov. 6 election.

Obama suggested that Republican opposition to any increase in tax rates has stifled progress in negotiations and at least partly explains why he has not met more regularly with House Speaker John Boehner.

"Speaker Boehner and I speak frequently," he said. "I don't think the issue right now has to do with sitting in a room.

"Unfortunately, the speaker's proposal right now is still out of balance," he added, referring to the GOP plan unveiled Monday that would extend all income tax rates at current levels while imposing changes to Medicare and Social Security.

The GOP proposal would achieve $2.2 trillion in deficit reduction in the next decade, including $800 billion in higher taxes through elimination of loopholes and deductions, slower annual cost-of-living increases for Social Security benefits and a higher eligibility age for Medicare.

Jessica Kourkounis/Getty Images

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The plan contrasts sharply with the White House proposal, which calls for $1.6 trillion in new tax revenue -- largely from higher rates on upper-income earners -- modest unspecified savings from Medicare and a new burst of economic stimulus spending.

Both sides have dismissed out of hand the opposing proposal, raising the prospect of continued gridlock as the economy hurdles toward the "cliff."

Income tax rates for the top 2 percent of Americans remain the immediate sticking point. Obama insists that rates must rise at the end of the year as part of any deal; Republicans oppose increasing rates on the wealthy.

Unless Obama and Republicans reach a compromise, a sweeping set of automatic, across-the-board tax hikes and deep spending cuts will take effect, potentially throwing the U.S. economy back into recession.

The "cliff" scenario results from a failure by Congress and the administration at previous intervals to take steps to reduce federal deficits and debt.

In the Bloomberg interview, Obama said he could be flexible on tax rates and entitlement overhaul, but only in broader discussions next year about revamping the tax code and social safety-net programs.

"Let's let [rates on higher-income earners] go up and then let's set up a process with a time certain at the end of 2013, or the fall of 2013, where we work on tax reform, we look at what loopholes and deductions both Democrats and Republicans are willing to close and it's possible that we may be able to lower rates by broadening the base at that point," he said.

The president also said he's "willing to look at anything" that might strengthen entitlements and extend their financial solvency, but did not specify further.

Republicans continued to rebuff the president's proposal Tuesday, claiming the $1.6 trillion package of tax increases could not pass either house of Congress, including the Democrat-controlled Senate.

"With our latest offer we have demonstrated there is a middle ground solution that can cut spending and bring in revenue without hurting American small businesses," Boehner said in a statement.

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Israel says will stick with settlement plan despite condemnation

JERUSALEM (Reuters) - Israel rejected concerted criticism from the United States and Europe on Monday over Prime Minister Benjamin Netanyahu's decision to expand settlement building after the United Nations' de facto recognition of Palestinian statehood.

Washington urged Israel to reconsider its plan to erect 3,000 more homes in the occupied West Bank and East Jerusalem, saying the move hindered peace efforts with the Palestinians.

Britain, France, Spain, Sweden and Denmark summoned the Israeli ambassadors in their capitals to give similar messages.

An official in Netanyahu's office said Israel would not bend. "Israel will continue to stand by its vital interests, even in the face of international pressure, and there will be no change in the decision that was made," the official said.

Angered by the U.N. General Assembly's upgrading on Thursday of the Palestinians' status in the world body from "observer entity" to "non-member state", Israel said the next day it would build the new dwellings for settlers.

Such projects, on land Israel captured in a 1967 war, are considered illegal by most world powers and have routinely drawn condemnation from them. Approximately 500,000 Israelis and 2.5 million Palestinians live in the two areas.

In a shift that raised the alarm among Palestinians and in world capitals, Netanyahu's pro-settler government also ordered "preliminary zoning and planning work" for thousands of housing units in areas including the "E1" zone east of Jerusalem.

Such construction in the barren hills of E1 has never been put into motion in the face of opposition from Israel's main ally, the United States. Building in the area could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for a contiguous state.

Israeli television stations reported Jerusalem's district planning commission would soon approve plans for several thousand more housing units, including more than 1,000 Israel had shelved two years ago after angering Washington by publishing the plans before a visit by Vice President Joe Biden.

The settlement plan, U.N. Secretary-General Ban Ki-moon said, would deal "an almost fatal blow" to a two-state solution to the Israeli-Palestinian conflict.

French President Francois Hollande said he was "extremely concerned" and Washington made clear it would not back such Israeli retaliation over the U.N. vote, sought by Palestinians after peace talks collapsed in 2010 over settlement building.

"We urge Israeli leaders to reconsider these unilateral decisions and exercise restraint as these actions are counterproductive and make it harder to resume direct negotiations to achieve a two state solution," White House spokesman Jay Carney told a briefing.

Ahead of a Netanyahu visit this week, Germany, considered Israel's closest ally in Europe, urged it to refrain from expanding settlements, and Russia said it viewed the Israeli moves with serious concern.

RETALIATION

Israeli Finance Minister Yuval Steinitz said Israel could not have remained indifferent to the Palestinians' unilateral move at the United Nations.

"I want to tell you that those same Europeans and Americans who are now telling us 'naughty, naughty' over our response, understand full-well that we have to respond, and they themselves warned the Palestinian Authority," he said.

Palestinian chief negotiator Saeb Erekat said building in E1 "destroys the two-state solution, (establishing) East Jerusalem as the capital of Palestine and practically ends the peace process and any opportunity to talk about negotiations in the future".

The United States, one of the eight countries to vote alongside Israel against the Palestinian resolution at the General Assembly, has said both were counterproductive to the resumption of direct peace talks.

In Europe, only the Czech Republic voted against the status upgrade while many countries, including France, backed it. Netanyahu plans to visit Prague this week to express his thanks.

In the Gaza Strip, Sami Abu Zuhri, spokesman for the governing Hamas Islamist movement, called the settlements "an insult to the international community, which should bear responsibility for Israeli violations and attacks on Palestinians".

Israeli police arrested three Jewish settlers on Monday whom they suspect of arson and other crimes against Palestinian property in the West Bank, including the torching of a car.

Attackers have often proclaimed they are exacting a "price tag" for steps taken against the settler movement by Palestinians, or by the Israeli government.

Alongside the settlement plans, Israel announced it would withhold about $100 million in Palestinian tax revenues from the Palestinian Authority, which exercises limited self-rule in the West Bank, saying Palestinians owed $200 million to Israeli firms.

"These are not steps towards peace, these are steps towards the extension of the conflict," Spanish Foreign Minister Jose Manuel Garcia-Margallo said.

Only three weeks ago, Netanyahu won strong European and U.S. support for a Gaza offensive that Israel said was aimed at curbing persistent cross-border rocket fire.

Favored by opinion polls to win a January 22 national election, he brushed off the condemnation and complaints at home that he is deepening Israel's diplomatic isolation.

Netanyahu told his cabinet on Sunday that his government "will carry on building in Jerusalem and in all the places on the map of Israel's strategic interests".

But while his housing minister has said the government would soon invite bids from contractors to build 1,000 homes for Israelis in East Jerusalem and more than 1,000 in West Bank settlement blocs, the E1 plan is still in its planning stages.

"No one will build until it is clear what will be done there," the minister, Ariel Attias, said on Sunday.

Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush, and the area has been under the scrutiny of his successor, Barack Obama.

Israel cites historical and Biblical links to the West Bank and Jerusalem and regards all of the holy city as its capital, a claim that is not recognized internationally.

(Additional reporting by Crispian Balmer, Dan Williams, Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Steve Gutterman in Moscow, Gareth Jones in Berlin, John Irish and Elizabeth Pineau in Paris and Tim Castle in London; writing by Jeffrey Heller; editing by Philippa Fletcher)

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Syria mixing chemicals for sarin gas: US official

WASHINGTON: Syria has begun mixing chemicals that can be used to make deadly sarin gas, a US official told AFP Monday, amid fears that President Bashar al-Assad's forces could attack rebels with chemical weapons.

"We've picked up several indications which lead us to believe that they're combining chemical precursors," the official said, on condition of anonymity, adding that the operation was apparently aimed at making sarin.

Earlier, CNN said that Washington believed that Assad's regime was considering the feasibility of putting sarin into artillery shells for use in a limited chemical strike against opposition soldiers, the report said.

US officials stressed to the news channel that they did not believe that Assad had made a final decision on mounting such a strike.

Sarin, used in two terror attacks in Japan in the 1990s, is a man-made nerve agent which can cause convulsions, respiratory failure and death.

The intelligence appeared to explain a series of fresh warnings issued by Washington that the use of chemical weapons by the Assad government would cross a "red line" and invite unspecified US action.

- AFP/fa

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