Cyprus Leaders Head To Brussels For Talks

Cyprus Bailout: Threat To Savings

Updated: 7:36am UK, Saturday 23 March 2013

By Ashish Joshi, Sky News Correspondent

Finally late into Friday night - an agreement on Plan B, meaning Cyprus has moved one giant step towards securing a Brussels bailout.

It includes a solidarity fund pooling together state assets and the granting of power to the Government to control bank capital.

The latter move is to prevent a run on the banks when their doors finally open on Tuesday.

There will also be a restructuring of the country's banks and a savings tax on Cypriot savers.

The details of the tax have still to be finalised, but the framework is in place.

It could mean savings over 100,000 euros held in Bank of Cyprus accounts being taxed up to 20%, according to one source close to the negotiations.

The same source said if that proposal is rejected there will be a plan to impose a tax of around 10% on all Cypriot bank accounts over 100,000 euros.

The threat of savers being hit hangs over the heads of people like Loizos Michael.

The 60-year-old tailor worked hard for 35 years, building up a good business.

He was looking forward to a wealthy retirement. Not anymore. Times are hard.

Speaking from his small tailor's shop in central Nicosia, Mr Michael said: "With the banks being closed, it is hard because I don't have a credit card and so cash flow is a problem.

"Even filling your car with petrol needs thinking about.

"Cypriots have always been workers by nature and nobody could have imagined that unemployment would be so high.

"This has hit us hard in the pockets."

Cyprus is weathering a storm - the likes of which this Mediterranean island has never faced in her young history.

Mr Michael said he knew things were getting bad, but expected solutions to be found to avoid ordinary people having to suffer.

"I expected something better. But now, it looks like the problem has been brewing for some time," he said.

"There used to be some people talking about the crisis, but now everyone's talking about it.

"I think things are harder now than just after the war. After the war of '74 people could still find work. Now, there is just no work so people have no money. What can we do?"

In the 1990s, Cyprus boasted a dynamic, booming economy, but it grew and unchecked.

An overbloated banking sector exposed to Greek debt has crippled the country's economy.

Now people like Loizos Michael must pay the price. He and the rest of Cyprus will soon find out exactly how much that is going to be.

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Obama Ends Mid East Tour With Petra Visit

Obama Beams On Mid East Trip

Updated: 11:49am UK, Saturday 23 March 2013

By Sam Kiley, Middle East Correspondent, Jerusalem

He beamed and Bibi-ed at every opportunity literally back slapping his way out of a sour relationship with Israel's Prime Minister.

Then Barack Obama shooed Benjamin Netanyahu into a cabin at Ben Gurion airport which was being swept with a khamsin sandstorm from the Sahara.

Inside the little room he stood over "Bibi" like the parent of a petulant child ordered to phone to apologise to an angry neighbour.

The call to Recep Erdogan, Turkey's Prime Minister, was to say sorry for the deaths of nine of his countrymen who were killed in a botched commando raid on the Mavi Marmaris in May 2010.

The raid was intended to stop the Marmaris from breaching the sea blockade of the Gaza Strip by Israel.

It shattered relations with Turkey, until then an Israeli ally.

Obama told Netanyahu to fix it - and he dutifully got some diplomatic glue out and got to work.

After four days of his first tour of Israel and Palestine since he became US president, the Israel-Turkey break through was Mr Obama's only visible achievement.

The Palestinians expected nothing and got it from an administration which has, in their eyes, woefully neglected the region while illegal Jewish settlements continued to eat into Palestinian lands on the West Bank.

The Israeli public was charmed by a speech he gave to 600 university students in Jerusalem in which he quoted the Torah, dropped the occasional Hebrew phrase and celebrated the princes of modern Zionism, Theodor Herzl and David Ben-Gurion.

That speech was an effort to reach past Netanyahu and appeal directly to the Israeli people. He told them to campaign for change and peace directly and demand their politicians take risks to achieve a two-state solution.

Many in Israel believe that the "status quo" is acceptable. He told them that no wall was high enough, no anti-missile batteries too impregnable, that Israel could survive indefinitely without making peace with he Palestinians.

But he didn't demand a freeze on settlements, which he has in the past and which has been a pre-condition for the Palestinians to return to talks.

Obama was his usual captivating self when delivering a set-piece speech.

Off the cuff at press conferences he was as poor as a performer as Ronald Reagan. Not with gaffes but by appearing uncomfortable, halting and insecure when asked to provide solutions to the problems that he had eloquently identified.

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Tensions Rise In Lebanon As Premier Resigns

Lebanese president Michel Suleiman has formally accepted the resignation of prime minister Najib Makiti, who stepped down blaming government infighting.

On Friday, Mr Makiti announced his whole government was quitting because of arguments over elections and the extension to the term of office of an internal security chief.

Mr Makati has said he hoped the move would prompt leaders of the different factions to "shoulder their responsibilities".

Mr Suleiman asked Mr Mikati's government to assume a caretaking role while a new government is being formed.

Mr Mikati's unexpected resignation throws the country into uncertainty at a time when it is being hit by sporadic violence enflamed by the civil war in neighbouring Syria.

Lebanon has long been a tinderbox of inter-ethnic and religious rivalries and has only recently recovered from a devastating civil war.

The two main political groups in the country support different sides in the Syrian civil war, in which more than 70,000 have died.

Lebanese Prime Minister Najib Mikati has resigned

Most Sunni Muslims in Lebanon support the uprising against Syria's leader Bashar al-Assad, who is from the Syria's Alawite minority.

But many Alawites also live in north Lebanon and sometimes the opposing groups clash violently.

It has led to fighting on the streets of Lebanon where tens of thousands of Syrian refugees have fled, with six killed and more than 20 wounded in Tripoli on Thursday.

Another 12 died in street battles in the northern city of Tripoli in December.

Mr Mikati has been prime minister since June 2011, heading a government dominated by the Shiite militant group Hezbollah and its allies, many of whom have a close relationship with Assad's regime.

But his relations with Hezbollah have never been smooth with Hezbollah frequently accusing him of loyalty to the pro-Western opposition.

He stepped down on Friday in part as a protest over Hezbollah's refusal to extend the tenure of the country's police chief, Maj Gen Ashraf Rifi, who at 58 is about to hit the mandatory retirement age for his rank.

Mr Rifi, like Mr Mikati, is a Sunni Muslim who is considered a foe by Hezbollah.

In his speech Friday, Mr Mikati said that if Mr Rifi was not allowed to stay on, his departure would send the police department into "a vacuum" at a time when a solid leader was needed.

As well as the outbreaks of violence, Lebanon has been accused by Syria of turning a blind eye to its citizens aiding rebels either by running weapons across the border or by actually taking part.

On Thursday a Lebanese citizen was captured by the Syrians after infiltrating the country to fight alongside rebel forces, state television said.

On Tuesday, President Michel Sleiman denounced as "unacceptable" a series of Syrian air raids a day earlier that targeted sites inside Lebanese territory. Syria denied launching the attack.

Israel fears that if Hezbollah gets the upper hand in Lebanon, it may use Syrian weapons smuggled across the border against its southern neighbour, which could then spark a new Middle Eastern war.

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Lindsay Lohan Escapes Nightclub Fight Charges

Lindsay Lohan is not being charged in connection with an alleged fight at a nightclub in New York last November.

Lawyer Mark Heller said the actress would face no formal charges after prosecutors were unable to gather sufficient evidence to prove the case.

"She's totally clear and exonerated. She has nothing but smooth sailing ahead," he said.

Lohan last appeared in court in Los Angeles on Monday

A spokeswoman for Manhattan District Attorney Cyrus Vance declined to comment.

Lohan, 26, was arrested on November 29 on a charge of misdemeanour assault after an encounter with a woman at the Avenue club in New York's trendy Meatpacking District.

Lohan's accuser, Tiffany Mitchell, was "disappointed" that the District Attorney's office had decided not to prosecute, said her lawyer, Gloria Allred.

"Ms Mitchell is considering all of her legal options in the civil justice system because of what she suffered that night," she said.

The DA's decision was welcome news for Liz & Dick star Lohan, who accepted a plea deal on Monday in a car crash case in California.

She had been accused of lying to the police about who had been driving her Porsche when it was in collision with a dumper truck and violating the terms of her probation.

The Mean Girls actress was sentenced to five days in prison, but that time will be served in a locked-down rehabilitation facility rather than a jail.

The plea deal also includes 90 days in rehab, 30 days of community labour, 18 months of psychological counselling, a fine and restitution.

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China: President Xi In Russia On First Trip

By Mark Stone, China Correspondent

The new Chinese president is in Russia for his inaugural foreign trip.

Xi Jinping will hold meetings with his Russian counterpart Vladimir Putin at the Kremlin as part of a two day visit to Moscow.

President Xi, who was made Communist Party leader in November and installed as the country's president last week, will also hold meetings with the Russian Prime Minister Dimitry Medvedev.

He will attend the opening celebrations to mark 'Chinese Tourism Year' in Russia and will deliver a speech at the Moscow State Institute of International Relations.

A meeting has also been scheduled with officials from the Russian Defence Ministry.

Since November there has been plenty of speculation over which country would be chosen for the first foreign trip.

Russia and China are historically allied together in a union which has countered western global interests.

Vladimir Putin will meet the Chinese leader in Moscow

The two countries continue to share views on key global issues including Syria and Iran.

Moscow and Beijing both vetoed key UN resolutions on the Syrian crisis.

The two countries stand together, against the US-led stance on both Syria and Iran's disputed nuclear programme.

However, economics is the critical motivation for this trip.

Last year, just before his re-election to the presidency, Mr Putin said that he wanted to "catch the Chinese wind in our economic sail".

Russia is the world's largest energy producer. China is the world's largest user of energy and needs more of it.

Given the downturn in Europe, Russia needs a new customer. China wants to sign an agreement on a new natural gas pipeline with the Russians.

President Xi's wife Peng Liyuan is a well-known Chinese singer

"We will have some outcomes related to energy, investment and major projects of strategic importance. We expect some breakthrough on these pragmatic cooperation fields," Vice Foreign Minister Cheng Guoping told a press conference in Beijing.

Geo-politically, America's so-called pivot to Asia may also have prompted the Russia trip.

According to the Chinese Xinhua state-run news agency, President Xi has said that China and Russia should "strengthen coordination in international and regional affairs to safeguard world peace, safety and stability".

Xinhua said the pivot, which will see America re-focus its attention and its military to the Asia-Pacific region, represented a "strategic mistrust" of China.

Chinese-US relations are tense with Washington accusing Beijing of industrial-level state-sponsored computer hacking.

Despite that though, the new Chinese premier Li Keqiang insisted at a press conference last weekend that both countries were committed to closer ties.

"China and the United States have their own distinctive cultures but we must learn from each other to maintain strong ties," Premier Li said.

One other issue is the source of significant anticipation. In a marked departure from the style of his predecessor Hu Jintao, President Xi's wife is expected to play an active role in the trip.

Peng Liyuan is a well-known and glamorous Chinese singer.

In a move which will position her as a Chinese "first lady", Peng is expected be photographed with her husband and attend engagements in the Russian capital.

On Sunday, President Xi will travel from Moscow to Tanzania, South Africa and Congo; a sign of the vital connection China has with the African continent.

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Burma: Sectarian Clashes Leave 25 People Dead

Buildings are on fire in the Burmese city of Meikhtila after fierce clashes between Buddhists and Muslims left several people dead and reduced communities to ashes.

Up to 25 people have been killed in three days of fighting that erupted after an argument between a Buddhist couple and the Muslim owners of a gold shop escalated into a riot involving hundreds of people.

Burma's president has declared a state of emergency in areas of the country affected by the violence.

Firemen battle to extinguish a burning building in Meikhtila

Meikhtila residents have been arming themselves with knives and sticks after rumours that violent agitators were heading for the city set its Muslim community on edge.

Hundreds of Muslims have reportedly now fled their homes to shelter in the city's sports stadium after complaints of too few police and reports of groups of Buddhists roaming the streets.

At least one mosque, an Islamic school, shops and a government office were set alight, according to a fire service official. Both Buddhist and Muslim homes were set on fire.

"I am really sad over what happened here because this is not just happening to one person. It's affecting all of us," said Maung Maung, a Buddhist ward leader in Meikhtila.

"Everyone is in shock here. We never expected this to happen," said a Muslim teacher in Mandalay.

A journalist saw the incinerated remains of two victims on a roadside, just one of several reports of bodies in the town, as flames raged from torched mosques and houses while other buildings smouldered unattended.

"The situation is getting worse," a local resident said. "People are destroying buildings. Many people have been killed. We are scared and trying to stay safe at home."

A group of reporters were stopped at knife-point by a gang of young men and monks and forced to hand over their camera memory cards, according to one of the journalists.

Muslims fearing for their safety flee to the city's sports stadium

The United Nations has warned the violence could endanger a fragile reform programme launched after Burma's quasi-civilian reformist government replaced 49 years of military dictatorship in 2011.

Political activists have since been released from prison and free elections have been held in the country's historic transition to democracy.

But the new government has faced criticism over its failure to contain simmering ethnic tensions which were suppressed and under-reported by years of military rule.

In 2012 pitched battles between Buddhists and Muslims escalated into orchestrated attacks on Muslim communities by organised gangs of ethnic Rakhine Buddhists.

Burma is a predominantly Buddhist country, but about 5% of its 60 million people are Muslims and there are large Muslim communities in Yangon and Mandalay, its two largest cities.

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Israel: Obama Declares Shared Vision Of Peace

Barack Obama has paid respects to victims of the Holocaust and reaffirmed Israel's right to exist at the end of a three-day visit to the country.

The US President laid wreaths at the graves of former Israeli Prime Minister Yitzhak Rabin and modern-Zionism founder Theodor Herzl, a symbolic visit that acknowledged the rationale for Israel's existence rests with its historical ties to the region.

The President was accompanied by US Secretary of State, John Kerry

Mr Obama was criticised in 2009 for a speech he made in Cairo in which he gave the Holocaust as the reason for justifying Israel's existence.

The President donned a skullcap while paying a sombre visit to the Hall of Names chamber at the Yad Vashem Holocaust memorial.

The circular room is lined with photographs documenting some 600 victims of the Holocaust. "Nothing could be more powerful," said the President.

Accompanied by Israeli Prime Minister Benjamin Netanyahu and President Shimon Peres, Mr Obama declared the memorial illustrated the "depths to which humanity can sink".

But he also claimed the monument serves as a reminder of the "righteous among nations who refused to be bystanders."

As the President approached Herzl's resting place he bowed his head before turning briefly to ask Mr Netanyahu where to place a small stone in the Jewish custom, before laying the stone atop the grave.

The Hall of Names chamber documents some 600 victims of the Holocaust

"It is humbling and inspiring to visit and remember the visionary who began the remarkable establishment of the State of Israel," Mr Obama wrote in the Mount Herzl guestbook.

"May our two countries possess the same vision and will to secure peace and prosperity for future generations."

Mr Obama leaves a wreath at the grave of former PM Yitzhak Rabin

At Yad Vashem, Mr Obama donned a skull cap and was accompanied by Rabbi Israel Meir Lau, a survivor of the Buchenwald Concentration camp who lost both parents in the Holocaust.

At Yitzhak Rabin's grave he was greeted by members of Rabin's family. In a symbolic gesture, the stone he placed on Rabin's grave was from the grounds of the Martin Luther King memorial in Washington.

Rabin, Mr Obama told family members, was "a great man."

The President will later travel to Jordan for talks with King Abdullah II. The Syrian civil war and Jordan's struggle to cope with the influx of half-a-million Syrian refugees will be among the topics discussed.

Palestinian leaders have accused Mr Obama of letting Israel ride rough-shod over their dream of statehood and King Abdullah has voiced fears that extremists could create a regional base in Jordan.

Before leaving for Jordan the President was to tour the Church of the Nativity in Bethlehem.

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China's First Lady Peng Liyuan Steals Limelight

Chinese Leader's First Foreign Trip

Updated: 9:26am UK, Friday 22 March 2013

By Mark Stone, China Correspondent

The new Chinese president is in Russia for his inaugural foreign trip.

Xi Jinping will hold meetings with his Russian counterpart Vladimir Putin at the Kremlin as part of a two day visit to Moscow.

President Xi, who was made Communist Party leader in November and installed as the country's president last week, will also hold meetings with the Russian Prime Minister Dimitry Medvedev.

He will attend the opening celebrations to mark 'Chinese Tourism Year' in Russia and will deliver a speech at the Moscow State Institute of International Relations.

A meeting has also been scheduled with officials from the Russian Defence Ministry.

Since November there has been plenty of speculation over which country would be chosen for the first foreign trip.

Russia and China are historically allied together in a union which has countered western global interests.

The two countries continue to share views on key global issues including Syria and Iran.

Moscow and Beijing both vetoed key UN resolutions on the Syrian crisis.

The two countries stand together, against the US-led stance on both Syria and Iran's disputed nuclear programme.

However, economics is the critical motivation for this trip.

Last year, just before his re-election to the presidency, Mr Putin said that he wanted to "catch the Chinese wind in our economic sail".

Russia is the world's largest energy producer. China is the world's largest user of energy and needs more of it.

Given the downturn in Europe, Russia needs a new customer. China wants to sign an agreement on a new natural gas pipeline with the Russians.

"We will have some outcomes related to energy, investment and major projects of strategic importance. We expect some breakthrough on these pragmatic cooperation fields," Vice Foreign Minister Cheng Guoping told a press conference in Beijing.

Geo-politically, America's so-called pivot to Asia may also have prompted the Russia trip.

According to the Chinese Xinhua state-run news agency, President Xi has said that China and Russia should "strengthen coordination in international and regional affairs to safeguard world peace, safety and stability".

Xinhua said the pivot, which will see America re-focus its attention and its military to the Asia-Pacific region, represented a "strategic mistrust" of China.

Chinese-US relations are tense with Washington accusing Beijing of industrial-level state-sponsored computer hacking.

Despite that though, the new Chinese premier Li Keqiang insisted at a press conference last weekend that both countries were committed to closer ties.

"China and the United States have their own distinctive cultures but we must learn from each other to maintain strong ties," Premier Li said.

One other issue is the source of significant anticipation. In a marked departure from the style of his predecessor Hu Jintao, President Xi's wife is expected to play an active role in the trip.

Peng Liyuan is a well-known and glamorous Chinese singer.

In a move which will position her as a Chinese "first lady", Peng is expected be photographed with her husband and attend engagements in the Russian capital.

On Sunday, President Xi will travel from Moscow to Tanzania, South Africa and Congo; a sign of the vital connection China has with the African continent.

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Israel: Obama Meets Abbas After Rocket Blast

President Barack Obama has told Palestinians they deserve an "independent and sovereign" state during his visit to the West Bank.

Mr Obama arrived in Ramallah hours after Palestinian militants fired two rockets into southern Israel.

He held talks with Palestinian Authority President Mahmoud Abbas and told a news conference that the US is "deeply committed" to a two-state solution, but the only way to achieve it is through negotiation.

Mr Obama said that Israel's ongoing settlement building was unhelpful to the pursuit of peace but urged the Palestinians not to make halting the policy a precondition for negotiations.

He said: "We do not consider continued settlement activity to be constructive, to be appropriate, to be something that can advance the cause of peace."

President Abbas said that peace with Israel should not be achieved through violence, occupation, settlements, arrests or denial or refugee rights.

There have been angry protests ahead of Mr Obama's Ramallah visit

The rockets fired from Gaza, a reminder of heightened tensions in the region, caused damage to land around a house but there were no injuries.

Police spokesman Micky Rosenfeld said: "One exploded in the back yard of a house in Sderot, causing damage, and the second landed in a field."

Military officials cited by army radio said they believed the attack was timed deliberately to coincide with Mr Obama's visit.

Israel pointed the finger for the attacks at Islamist movement Hamas, which controls the Gaza Strip, although there was no direct claim of responsibility.

President Obama - who visited the town where the rockets landed as a presidential candidate in 2008 - was miles away in Jerusalem at the time, preparing to visit the Israel Museum.

A police expert clears the remains of a rocket from outside a Sderot house

There were protesters outside the Palestinian Authority headquarters in Ramallah ahead of his arrival for talks with Palestinian leaders, who have accused him of riding roughshod over their hopes of statehood.

Sky News Middle East Correspondent Sam Kiley said settlements and the controversial "right of return" for Palestinians to their former lands in Israel would be on the agenda.

He added: "The crucial thing is for President Obama to get back into the peace process."

Code Red sirens wailed in Sderot shortly after the rockets hit at 7am, forcing commuters and schoolchildren to run to bomb shelters.

Yossi Haziza, a Sderot resident in whose courtyard the first rocket exploded, was looking at the walls of his home sprayed with shrapnel and shattered windows.

Mr Obama reaffirmed US support for Israel during talks in Jerusalem

He said: "I wish this was merely damage to property but my eight-year-old daughter and my wife are terrified. We just want to live in peace. We don't want to keep having to run to bomb shelters."

Mr Obama, on the first foreign trip of his second term, says he has come to the Holy Land simply "to listen" to the parties about how to resume peace talks frozen for two-and-a-half years.

He said he decided against coming with a comprehensive peace plan that might not be fit for current political conditions.

The US President's new approach was in stark contrast to early in his first term, when he declared Israeli settlement building to be illegitimate and promised to dedicate himself to peace.

Meanwhile, Palestinian activists set up a protest camp on West Bank land east of Jerusalem where Israel has announced controversial plans to build, demanding an end to Obama's "bias and support for Israel".

Israel's plan to build thousands of new settler homes in an area called E1 has sparked a major international backlash, with experts saying it could wipe out hopes for a viable Palestinian state.

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North Korea Issues Fresh Threat To America

By Mark Stone, Asia Correspondent

North Korea has threatened to attack American airbases on the Japanese island of Okinawa and the Pacific island of Guam.

A statement by Kim Yong Chul, the spokesman of the Supreme Command of the Korean People's Army warned of "military actions".

"The US should not forget that the Anderson Air Force Base on Guam where B-52 bombers take off and naval bases in Japan and Okinawa where nuclear-powered submarines are launched are within the striking range of the Democratic People's Republic of Korea (DPRK) precision strike means," the statement read.

"Now that the US started open nuclear blackmail and threat, the DPRK, too, will move to take corresponding military actions."

The words mark the latest escalation in a lengthy stand-off as North Korea defies calls from the rest of the world to halt its dual nuclear and ballistic missile programmes.

North Korea has threatened an attack over B-52 drills

The American government has not yet responded to the threat.

British diplomatic sources speaking to Sky News from Seoul have said the UK Government "takes any threats seriously and there is some concern over the more harsh rhetoric coming from the DPRK".

However, the source insisted that there was no panic or alarm among diplomatic circles and that UK travel advice to South Korea remains unchanged.

The latest threat from North Korea is a direct response to a series of joint military exercises involving the US and South Korea.

On Tuesday, the US Air Force deployed its giant B-52 bombers from their base on Guam. The planes, which are capable of carrying and deploying nuclear bombs, flew sorties over the Korean peninsula as part of the military exercise.

The Pentagon in Washington confirmed the B-52 deployment. Spokesman George Little said the US wanted to underline its commitment and capacity to defend South Korea against an attack from the North.

Military guard posts of South Korea (front) and North Korea (far)

However, the flights were condemned by Pyongyang as "an unpardonable provocation".

"The US is introducing a strategic nuclear strike means to the Korean peninsula at a time when its situation is inching close to the brink of war," the North Korean statement added.

The North Korean military does have rockets capable of reaching both Okinawa and Guam.

The surprisingly successful rocket launch in December followed a trajectory similar to that which any strike against Okinawa would take.

The Pentagon has confirmed the B-52 deployment

Okinawa is 600 miles due south of the Korean peninsula. Guam is further away, to the east of the Philippines.

While Pyongyang has proved it has the range capability, it is not clear whether or not their missiles are accurate enough to hit a specific target. And the country does not yet have the ability to carry out a nuclear strike at this range.

Earlier this month, the UN imposed the toughest sanctions yet on North Korea.

Kim Jong-Un reacted with anger, threatening to attack America, South Korea and Japan. The young and unpredictable leader toured military units calling for them to prepare for 'all out war'.

Computers are seen down at the main office of broadcaster YTN in Seoul

Meanwhile, Wednesday's unusually large cyberattack in South Korea, which brought down banks and broadcasters for one hour, has been traced to China.

Experts in Seoul claim the simultaneous attacks all bore the same IP address which was traced to the Chinese mainland.

Many of North Korea's internet and computing operations are tied to China. There is no suggestion that the Chinese government had any involvement.

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