EADS unveils new structure to "simplify" group

PARIS: The European Aeronautic Defence and Space Company (EADS), which owns the plane maker Airbus, said on Wednesday that it has agreed to a new equity structure that will reduce the role of state shareholders while preserving their strategic interests.

The deal will leave France and Germany each with 12-percent holdings and Spain with 4.0 percent, a statement said, as the German automaker Daimler and French conglomerate Lagardere curtailed their own stakes.

"This agreement aims at normalising and simplifying the governance of EADS while securing a shareholding structure that allows France, Germany and Spain to protect their legitimate strategic interests," a statement issued by the company said.

EADS added that it would buy back up to 15 percent of its free-floating capital in the first half of next year, subject to market conditions, a move that would underpin the share price as Daimler and Lagardere sold their stakes.

EADS shares jumped by 2.46 percent to 27.73 euros on the Paris stock exchange, which closed before the announcement on Wednesday with a gain of 0.28 percent overall.

The agreement allows for the percentage of freely floating EADS shares to jump from 49 percent at present to more than 70 percent, the group said.

A statement issued by the French presidency emphasised that the deal would "guarantee the interests of the French, German and Spanish states within the group."

It would also give EADS "the freedom of movement it needs to pursue its development," the French statement added, while underscoring that the group's headquarters would remain in Toulouse, southern France.

German Chancellor Angela Merkel welcomed the deal as well, saying in a statement that as a result, "the Franco-German partnership within EADS can advance in a balanced manner. The spirit that existed when the group was founded is thus respected."

EADS was created in July 2000 via a merger of the German defence company DASA, France's Aerospatiale-Matra and the Spanish group CASA.

According to the French presidency's statement, the new agreement "reinforces the protection of the nation's strategic defence interests via a specific agreement between EADS and the French state."

In particular, Paris would have a priority to buy shares in the French aerospace company Dassault, in which EADS owns a stake of 46 percent, should it be put up for sale.

Officials in Paris and Berlin have been in talks for several months on how to handle the exits of key EADS shareholders Daimler and Lagardere, a development that was set to shake up the original equity framework.

According to the EADS statement, the "present shareholder pact (is) expected to be replaced by a normal company governance scheme."

EADS, which is officially registered in the Netherlands, is active in building satellites, rocket launchers, helicopters and defence systems in addition to its main unit, Airbus.

The group recently tried to seal a tie up with the British defence group BAE Systems, but that deal, said to be worth $45 billion (34 billion euros) fell through, reportedly owing to German concern that it would be sidelined within the merged entity.

Britain was said to be concerned about undue state influence over a new global aerospace giant.

-AFP/ac

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20th anniversary of Babri mosque demolition: The damage has not been undone as yet

LUCKNOW: Twenty years after demolition of Babri mosque, the Ayodhya debate is still on. The frenzy mob which razed the masjid to ground on December 6, 1992, perhaps had little or no inkling that the fanatic act would change the Indian politics for all times to come. Though the Ram Temple issue seems to have lost its electoral appeal, the damage has not been undone as yet and the efforts to polarise votes on religious lines continues, at least in UP, where eight major communal clashes have taken place after Samajwadi Party (SP) came to power in March this year and the Bhartiya Janta Party (BJP) is trying to cobble up the team of Hindutava hardliners who played a crucial role in the Temple movement, leading to the demolition of the masjid.

The communal rift created by the 1990 Ram temple movement which resulted in demolition of the mosque saw the BJP emerging as a national force, particularly in the north and west India, thereby changing the Indian polity forever. Till then the politics mainly revolved around the Congress and anti-Congressism, but post 1992, it became 'triangular' with the addition of the anti-Congress-BJP Third front. The demographic vote equations also changed with the Muslims, who also held inaction of the then Congress government headed by PV Narasimha Rao at the Centre equally responsible for the demolition of the mosque, shifting loyalty to regional parties which they felt could counter the saffron threat. It led to the rise of regional satraps like Mulayam Singh Yadav and Lalu Prasad Yadav among others.

The upheaval also pushed India into an era of instability which saw four prime ministers heading various coalition governments and two mid-term lok sabha polls between 1990-99. As no single party could win majority since then, the regional parties have been playing crucial role in formation of the governments. The coalition politics still continues but now its more mature and stable than 90s. But in UP, the instability continued from 1989 to 2007, during which period, the state saw ten governments of different permutations and combinations, three mid term assembly elections, four chief ministers, defections in parties and two stints of president rule. Interestingly, while the BJP was able to sustain in other states after Babri mosque demolition, in UP its tally declined steadily with every election.

Many political analysts believe that the 'Mandir' issue should be seen along with the 'Mandal'. After revolting against Rajiv Gandhi over Bofors scam, VP Singh formed Janta Dal in 1989 by bringing all the anti-Congress forces together. In the subsequent elections, the Congress was defeated but Janta Dal could not get the majority either. Singh became prime minister with support of the Left and the BJP. On August 7, 1990, Singh implemented the Mandal commission report providing 27% reservation for other backward classes (OBCs) to mobilise backward vote bank. On September 25, BJP's LK Advani began his rath yatra from Somnath in Gujrat demanding construction of Ram Temple at the disputed site housing Babri masjid in Ayodhya, which the saffron forces claimed was the birth place of Lord Ram.

The yatra, which was to end at Ayodhya, left behind a trail of communal clashes. On Singh's direction, the then Bihar chief minister Lalu Yadav's ordered police to intercept yatra at Samastipur and arrest Advani on October 23. On October 30, the then UP chief minister Mulayam Singh Yadav ordered firing on people, who had assembled in Ayodhya on BJP's call, when they tried to storm into the mosque. The firing in Ayodhya and ensuing communal clashes in all over the country left over 500 dead. The immediate impact was that the mandir (communal) politics overshadowed the mandal (caste) politics. As a result, the BJP's number in Lok Sabha rose to 120 in 1991 from 85 in 1989. The BJP also won state assembly elections in five states in 1991 -- UP, Madhya Pradesh, Rajasthan, Himachal Pradesh.

The communal plank polarised votes across all castes. After assuming power in UP under Kalyan Singh, saffron forces gave call to start 'symbolic' construction of Temple on December 6, 1992, which led to demolition of the mosque. Kalyan was jailed for a day for 'contempt of court'. He had assured the Supreme Court that the government will protect mosque but failed to discharge the constitutional duty. The turn of events led to more communal riots across the country but by razing the mosque down, the saffron brigade killed the goose that laid the golden egg. At least, it was true for UP where caste politics took over communalism after tempers cooled down following fall of the 15th century mosque, allegedly built by a Mughal ruler over ruins of a temple at Lord Ram's birth place after destroying it.

"Temple politics created 'upper caste dominated middle class' vote bank for the BJP. A few dominant OBCs also supported it. The party sustained in the states where it is in direct fight with the Congress. But in UP, dalits by Mayawati and OBCs by Mulayam realised that supporting temple politics means accepting the brahminical order responsible for their repression since ages", said political analysts. In due course, said political observer JP Singh, the BJP also realised that the factor which increased its tally from 2 in 1984 to 182 in 1999 is also the major hurdle in exceeding further. The party had to put the temple issue on the back seat to form a coalition with other parties to assume power at the Centre. This, however, left supporters disappointed, leading to drop in its tally in subsequent elections.

In UP, the disillusionment of upper casts from BJP was so strong that a section brahmins voted for BSP in 2007 assembly elections and for SP in 2012. But, says political analyst Sudhir Panwar, the divisive politics based on cast and faith has divided farmers, artisans and industrial workers, as a result the issues related to agriculture and labour have become secondary in the priority list of the political parties. "One should also not forget that maximum cases of terror attacks in India have happened after demolition of Babri mosque, which communalized the social-political environment of country further. We need to defeat hardliners, in all the communities, and their political masters, for the sake of the nation and people", he added.

However, political parties seems to be in no mood to leave caste and communal politics. In fact, the BJP leaders said that today party needs the kind of tailwind that was necessary for the party in 1984 when it was reduced to just two seats in Parliament. The Vishwa Hindu Parishad had then came to the rescue. It formed a committee to 'liberate' the 'birthplace' of Lord Ram in Ayodhya and build a temple. Advani was given leadership of the campaign. The BJP gained from the issue till 1999 but decline started thereafter. The decline was mainly because of loss in UP where BJP's seatshare dropped to 10 in 2009 from 51 in 1991.

Today, the BJP has reached a saturation point in most of the states except UP where its prospects may improve. But the situation in UP has gone from bad to worse for the BJP to the extent that it lost the Ayodha seat for the first time since 1989 in the assembly elections held earlier this year. The 'embarrassment' has made saffron forces to sit up and revive the Hindutva agenda, as in 1984, by bringing back the Hindutva mascots like Uma Bharti and Kalyan Singh. Simultaneously, the work at the workshop set up in Ayodhya during temple movement to carve pillars for the 'grand Ram Temple' has started, indicating that something is cooking in the saffron camp. The riots under the SP rule have come as a booster.

While the BJP is desperate for a revival in UP, the Congress and SP are also looking forward to cash in on the 'fear psychosis' among Muslims after demolition of the Babri Masjid. The two parties are trying to appease the minority committee by announcing a number of sops. Mulayam has prime ministerial ambitions and that can be fulfilled only if his party is able to win maximum seats in UP. And, it will be possible only if Muslims stick to him, so Mulayam is doing all he can to keep them in good humour. Besides welfare schemes for the Muslims, he has promised to release all Muslims 'falsely' implicated in terror acts. He is even taking support of hardliner Muslims and has inducted some of them in the party.

The Bahujan Samaj Party is also trying to win the confidence of the Muslims by publicising that the community was safe during the Mayawati rule, during which period no riots took place. Mayawati, too, has prime ministerial ambitions. Both SP and BSP are banking on the fact that the Ram Temple movement and the Babri Masjid demolition pushed India into an era of instability. As no single party could win majority after the incident, the regional parties have been playing a crucial role in the formation of central governments. Also, ever since the Muslims have been voting tactically for the party which can stop the BJP. Under these circumstances, Mayawati and Mulayam know that Muslim votes would be crucial for them to become king or kingmakers in 2014.

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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 approves Turkey request for Syria border missiles

BRUSSELS: NATO on Tuesday agreed to deploy Patriot missiles along the border of member state Turkey as requested by Ankara to help it defend its territory against threats from Syria.

"NATO has agreed to augment Turkey's air defence capabilities in order to defend the population and territory of Turkey and to contribute to the de-escalation of the crisis along the alliance's border," a statement said.

Turkey formally asked its NATO partners to deploy the US-made anti-missile system after a series of cross-border shellings, including one that left five civilians dead on October 3.

"We say to anyone who would want to attack Turkey -- don't even think about it," said NATO chief Anders Fogh Rasmussen, announcing the decision taken by the 28-member military alliance.

Germany, the Netherlands and the United States have agreed to provide the Patriot missile batteries, which would come under the command of the Supreme Allied Commander Europe (SACEUR), the NATO statement said.

Stressing that the surface-to-air Patriot system was purely defensive, Rasmussen said technical discussions would now follow about how many of the missiles would be deployed and where.

The discussions at NATO came amid reports that Syria is moving chemical weapons from among its stockpile, as the regime of President Bashar al-Assad fights rebels seeking to oust him.

"NATO members expressed grave concerns about reports that the Syrian regime is considering the use of chemical weapons. Any such action would be completely unacceptable and a clear breach of international law," Rasmussen said.

The joint NATO statement on the Patriots' deployment stressed that it "will be defensive only. It will in no way support a no-fly zone or any offensive operation."

Rasmussen insisted deploying the missiles would lead to a de-escalation of the crisis, and added that NATO officials would regularly assess the situation and the implementation of the deployment.

NATO's decision reflected "our full determination and resolve to protect our nations and territories," Rasmussen told journalists.

Calling what is happening in Syria "absolutely outrageous," Rasmussen said it was "a responsibility for the international community to facilitate and ensure a peaceful" end to the conflict.

- AFP/fa

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GMR row: Diplomatic failure for India

NEW DELHI: The Maldives government and GMR are headed on a collision course, but India is the ultimate loser, exhibiting a stunning diplomatic failure and political naivete of a country crucial to India's security considerations.

Maldives has given GMR until Saturday December 8 to get out of the Male airport. GMR's CEO Andrew Harrison, in a statement said, "The injunction clearly prevents them from taking the action outlined in their notice issued to us stating that the airport would be taken over at the end of the 7 day period. We remain resolute in our position and there is no question of an offer being made and certainly no question of any alleged offer being accepted as we will simply not agree to our rights nor the injunction being undermined in any way."

This can only have an ugly ending. While there has been no communication with Maldives president, Waheed, the foreign minister told Salman Khurshid that they were determined to evict GMR. India can either look the other way, or adopt strong-arm tactics neither of which has any good implications.

When India fell over itself to recognize Waheed as president, who had overthrown Nasheed in February, he was an unknown quantity. But Indian government were happy to dump Nasheed for Waheed, including indicating that Nasheed was acting against Indian interests. The GMR deal was one of the big reasons behind the February events anyway, so it should have been incumbent on the Indian government to ensure that the problems were ironed out.

Ousted Mohamed Nasheed, wrote this week, "India should have foreseen the consequences its investments would later face in endorsing a regime consisting of elements that had previously shown its disapproval towards major Indian investments. India should have taken its time to assess the political situation of the country and should have confirmed the legitimacy of the controversial regime before accepting it. However, failure to do so resulted in the scrapping of its single largest investment by the very government it had recognised."

Maldives has lurched from protest to protest, even though India by and large protected the Waheed government from certain censure by the Commonwealth Ministerial Action Group (CMAG). But India failed to secure its own interests in return, because India wasn't actually engaged with the implications of what was clearly happening in Maldives.

Foreign minister Salman Khurshid, said India was keeping Maldives "at arms length" since the departure of Nasheed. India is now paying the price for that decision. Waheed's special advisor, Hassan Saeed wrote a letter to Manmohan Singh in September, asking India to assist in the termination. In his letter, he said, "The Indian Foreign Secretary's visit to our country in February failed to resolve the political crisis largely because India is no longer seen as a friendly and fair neighbour who could broker an honest and fair deal."

This was not just about GMR. Maldives complained that the government was being forced to pay GMR, that Maldivians were being charged for the airport fee. Indian officials said GMR was ready to make a deal with the Maldives government, which should have been facilitated. This vaccum gave Islamists like the Adhaalath party room to push Waheed on this issue.

Indian officials complained "outside" interests have muddied the waters __ which is not surprising. The Adhaalath party, said sources, has strong links with Pakistan, which is only now being acknowledged in India.

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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 Republicans, who have opposed any increase in tax rates, were stifling progress in negotiations and at least partly explained 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.

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."

Jessica Kourkounis/Getty Images

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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 said Monday that higher rates are unacceptable and have been opposed in the past by many congressional Democrats.

"With the 'fiscal cliff' nearing, our priority remains finding a reasonable solution that can pass both the House and Senate, and be signed into law in the next couple of weeks," Boehner and six House Republican leaders wrote in a letter to Obama Monday.

They insisted that agreeing to $800 billion in higher revenues was a significant concession for Republicans, who had always resisted tax increases of any kind.

Boehner was at the White House Monday for the annual holiday reception, but did not pose with Obama for a photo, as he has in the past. The two reportedly last spoke by phone Saturday in what aides described as a "curt" call. They last met in person Nov. 16, but have no planned future meetings.

Both men met separately today with a bipartisan group of the nation's governors to discuss the "fiscal cliff" and how to minimize any fallout from the deficit debate on state economies.

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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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Football: Struggling Hoffenheim sack Babbel

BERLIN: Struggling Bundesliga side Hoffenheim sacked coach Markus Babbel on Monday the day after a 4-1 drubbing by Werder Bremen left them 16th in the table and with nine defeats in their last 10 matches.

The 40-year-old former German international - who has previously coached Hertha Berlin and VfB Stuttgart - will be replaced temporarily by the Under-23 team coach Frank Kramer.

"The deteriorating situation on the sporting front and the negative atmosphere left me no choice," said club manager Andreas Mueller.

"We must push the 'reset' button and start afresh," added Mueller, who conceded it had been a difficult decision to take.

Mueller said that Babbel - whose overall record was seven wins, eight draws and 14 defeats - had worked hard, but that things simply hadn't worked out.

"I am conscious of the work that Markus has put in. What is dreadful is that the team didn't follow his lead on the pitch," he said.

"The challenge now is to avoid relegation."

Babbel, who had a distinguished playing career playing for both Bayern Munich and Liverpool, had been in charge since February and his contract ran till June 30 2014.

He is the second Bundesliga coach to lose his job this season, veteran Felix Magath having been sacked by VfL Wolfsburg in October.

- AFP/fa

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