Bangladesh's worst-ever factory blaze kills over 100

DHAKA (Reuters) - Fire swept through a garment factory on the outskirts of Bangladesh's capital killing more than 100 people, the fire brigade said on Sunday, in the country's worst-ever factory blaze.

Working conditions at Bangladeshi factories are notoriously poor, with little enforcement of safety laws, and overcrowding and locked fire doors are common. The cause of this fire was not immediately known.

The blaze at the nine-storey Tazreen Fashion factory in the Ashulia industrial belt of Dhaka started on the ground floor late on Saturday and spread, trapping hundreds of workers.

"So far, the confirmed death toll is 109, including nine who died by jumping from the building," Mizanur Rahman, deputy director of the fire brigade, told Reuters.

Witnesses said the workers, mostly women, ran for safety as the fire engulfed the plant but were unable to get through narrow exits.

"Many jumped out from the windows and were injured, or died on the spot," Milon, a resident, said.

Most of the bodies were burnt beyond recognition and authorities had started burials while mourning relatives scrambled to find their loved ones, officials and witnesses said.

Unofficial sources put the number of dead at more than 120. Most of the bodies were found on the second floor, Rahman said.

Bangladesh has around 4,500 garment factories and is the world's biggest exporter of clothing after China, with garments making up 80 percent of its $24 billion annual exports.

This was the highest ever death toll in a Bangladeshi factory fire. In 2006, 84 people were killed in a blaze in the southern port of Chittagong where fire exits had been blocked.

More than 300 factories near the capital shut for almost a week earlier this year as workers demanded higher wages and better working conditions.

(Editing by Nick Macfie)

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Five killed in attack on Pakistan Shi'ite gathering, 90 hurt

DERA ISMAIL KHAN, Pakistan (Reuters) - A bomb killed at least five people and wounded 90 near a Shi'ite procession in Pakistan on Sunday, police said, as the government struggles to stop a wave of attacks by sectarian Sunni militant groups determined to wipe out the minority sect and seize power.

Sunni hardliners threatened to strike hard this weekend, an important one in the Shi'ite religious calendar, prompting authorities to halt cellphone coverage in several areas to prevent bombings triggered by remote control.

Authorities have also restricted motorcycle travel, hoping to deprive suicide bombers of one mode of transportation.

The wounded were carried away in the northwestern city of Dera Ismail Khan, where a bomb targeting Shi'ites killed at least seven people, including four children, on Saturday.

Pakistan's Taliban, who are focused on battling the state but are also allied with Sunni sectarian groups, claimed responsibility for both attacks.

"For Interior Minister of Pakistan Rehman Malik, who blocked mobile phones across the country and banned motorbikes, you can't stop our activities against the Shi'ite community and security forces," Taliban spokesman Ehsanullah Ehasan said by telephone from an undisclosed location.

"We will keep continuing our activities and this is a failure of security forces, police and army that we have made successful attacks in Dera Ismail Khan."

Past attacks during the religious event have killed large numbers of Shi'ites.

Sunday's bomb, planted in a shop near a street market, also wounded five security officials, said senior police official Malik Mushtaq.

Doctors at a hospital in Dera Ismail Khan said five people were killed and 90 wounded. "There is a lack of ambulances and not enough hospital beds," said one. "People brought many of the injured to the hospital on rickshaws."

Hardline Sunni groups, which are becoming increasingly dangerous, have vowed to carry out more attacks as the Shi'ite mourning month of Muharram comes to a climax on Sunday.

Security officials say organizations such as Lashkar-e-Jhangvi (LeJ) are stepping up attacks on Shi'ites, who they regard as non-believers, in a bid to destabilize nuclear-armed, U.S. ally Pakistan and establish a Sunni theocracy.

Al Qaeda, which is close to LeJ, pushed Iraq to the brink of a sectarian civil war several years ago with large-scale suicide bombings of Shi'ites.

More than 300 Shi'ites have been killed in Pakistan so far this year in sectarian conflict, according to human rights groups. The campaign is gathering pace in rural as well as urban areas such as Karachi, Pakistan's biggest city.

Shi'ites account for up to 20 percent of this nation of 180 million.

The growing death toll has discouraged some Shi'ites from taking part in processions this year during one of their most sacred rituals, when people flagellate themselves with chains and other items to commemorate the martyrdom of the grandson of Islam's prophet, who was killed during the battle of Karbala.

"If I were to compare with last year, the fear has definitely increased," said Sadia Fatema, 28. "Just last night me and my mother were asking my father and brother if they really had to go to the procession. We are worried."

Others say the pressure has made Shi'ites stand up to Sunni hardliners.

"There is fear, but there is also anger and defiance among Shi'ites," said one, who asked not to be named.

"Shi'ites never felt like a minority in Pakistan but now they are slowly being turned into a real minority. And Shi'ites will not let this happen."

Washington, a critical source of financial aid for cash-strapped Pakistan, has been pressuring the South Asian nation to crack down on militants based in tribal areas who cross the border to attack American-led forces in Afghanistan.

Pakistan, meanwhile, faces major domestic security challenges from a wide range of groups, including the Taliban, who capitalize on issues such as unemployment, official corruption and poverty to boost recruitment.

A series of army offensives has failed to break the back of militant groups based along the border with Afghanistan.

"Our children are being killed but the government is powerless," complained Shi'ite Amina Bokhari. "What is the purpose of this security they claim to give us?"

(Additional reporting by Jibran Ahmad in PESHAWAR and Mehreen Zahra-Malik in ISLAMABAD; Writing by Michael Georgy; Editing by Nick Macfie)

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Hezbollah says could hit all of Israel in future war

BEIRUT (Reuters) - Hezbollah leader Sayyed Hassan Nasrallah warned Israel on Sunday that thousands of rockets would rain down on Tel Aviv and cities across the Jewish state if it attacked Lebanon.

Speaking four days after the ceasefire which ended a week of conflict between Israel and the Islamist Hamas rulers of Gaza, Nasrallah said Hezbollah's response to any attack would dwarf the rocket fire launched from Palestinian territories.

"Israel, which was shaken by a handful of Fajr-5 rockets during eight days - how would it cope with thousands of rockets which would fall on Tel Aviv and other (cities) ... if it attacked Lebanon?" Nasrallah said.

The Fajr-5s, with a range of 75 km (45 miles) - able to strike Tel Aviv or Jerusalem - and 175 kg (386 lb) warheads, are the most powerful and long-range rockets to have been fired from Gaza.

But Hezbollah, which fought Israel to a standstill in a 34-day war six years ago, says it has been re-arming since then and has a far deadlier arsenal than Hamas. Nasrallah has said Hezbollah could kill tens of thousands of people and strike anywhere inside Israel if hostilities break out again.

"If the confrontation with the Gaza Strip ... had a range of 40 to 70 km, the battle with us will range over the whole of occupied Palestine - from the Lebanese border to the Jordanian border, to the Red Sea," Nasrallah said.

Hezbollah could hit targets "from Kiryat Shmona - and let the Israelis listen carefully - from Kiryat Shmona to Eilat", he said, referring to Israeli's northernmost town on the Lebanese border to the Red Sea port 290 miles further south.

The movement has warned that any Israeli attack against the nuclear facilities of its patron Iran, which has armed and funded the Lebanese Shi'ite Muslim militant group, would inflame the Middle East - though it has not specified its own response.

In a move it said showed it could penetrate deep inside Israeli defenses, it flew a drone over Israel last month. The drone was shot down after flying 25 miles into southern Israel.

Israel says its Iron Dome missile defense system knocked out 90 percent of the rockets fired from Gaza which were on course to hit populated areas.

TENS OF THOUSANDS MARK ASHURA

Nasrallah, who has lived in hiding since 2006 to avoid assassination by Israel, was speaking by video-link to tens of thousands of Shi'ite faithful in southern Beirut commemorating Ashura, the day when the Prophet Mohammad's grandson Hussein was killed in battle 13 centuries ago.

Wearing a black turban and robes in a sign of mourning, the 52-year-old cleric said his Shi'ite movement wanted to prevent sectarian tension in Lebanon - fuelled by the civil war in Syria - plunging his country into renewed conflict.

"We want to avert strife and Israel is our only enemy. We have no enemies in Lebanon," Nasrallah said.

Many Sunni Muslim political leaders blamed Hezbollah's ally Syria for last month's bomb attack which killed a top intelligence official and plunged Lebanon into political crisis.

The opposition March 14 coalition blamed Syria for the assassination and called on the Lebanese government, dominated by allies of Hezbollah and Syria, to quit.

Sporadic clashes have erupted since then, including a shootout in the southern city of Sidon two weeks ago when three people were killed after supporters of a Sunni cleric tried to tear down Shi'ite Ashura banners.

On Saturday the army said it arrested five people and seized 450 grams (1lb) of explosives in Nabatiyeh on the eve of an Ashura march in the southern Lebanese town which was attended by thousands of Shi'ite mourners, many striking their heads with blades to draw blood to mark the tragedy of Hussein's death.

Security sources said the arrested men were Syrians suspected of planning an attack on the Ashura processions but Nasrallah, speaking late on Saturday, suggested they were trying to send arms to the conflict in Syria.

"We already know that many Syrians arrive in Lebanon to buy weapons," he said. "Neither weather nor rain can frighten us, nor can explosions or security threats stand between us and Imam Hussein".

(Additional reporting by Laila Bassam in Beirut and Dan Williams in Jerusalem; Editing by Louise Ireland)

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Congo says no talks with rebels unless they quit Goma

GOMA, Democratic Republic of Congo (Reuters) - Congo said on Sunday it would not negotiate with M23 rebels in the east until they pulled out of the city of Goma, but a rebel spokesman said Kinshasa was in no position to set conditions on peace talks.

Congolese President Joseph Kabila met with M23 for the first time on Saturday after an urgent summit in Uganda where regional leaders gave M23 two days to leave Goma, which the rebels seized six days ago after U.N.-backed government troops melted away.

Eight months into a rebellion that U.N. experts say is backed by neighboring Rwanda, the rebels have so far shown no sign of quitting the lakeside city of one million people.

The rebels say they plan to march on other cities in the east, and then strike out across the country to the capital Kinshasa, across 1,000 miles of dense jungle with few roads, a daunting feat achieved 15 years ago by Kabila's father.

Amani Kabasha, a spokesman for M23's political arm, welcomed the meeting with Kabila but questioned the government's resolve to end a crisis that risks engulfing the region.

"Why put conditions on talks? You pose conditions when you are in a position of strength. Is the government really in such a position?" Kabasha told Reuters in Goma, which sits on the north shore of Lake Kivu at Congo's eastern border with Rwanda.

Vianney Kazarama, the rebels' military spokesman, said government forces that had been reinforcing along the shores of the lake were now deploying in hills around the rebel held town of Sake and government-held Minova, both Goma's west.

A U.N. source in Minova said government soldiers had gone on a looting spree for a second straight night there. The town was calm on Sunday but gunshots rang out overnight, the source said.

"What is real is that the morale of the troops is very low. They've lost hope in the commanders," the U.N. source said.

The Congolese army has vowed to launch counter-offensives and win back lost territory. The rebels have warned the government against embarking on a "new military adventure".

So far, the unruly and poorly-led army has been little match for the rebels, despite assistance from a U.N. peacekeeping mission that deployed attack helicopters to support the government before Goma fell.

Rebel leaders share ethnic ties with the Tutsi leadership of Rwanda, a small but militarily capable neighbor that intervened often in eastern Congo in the 18 years since Hutu perpetrators of Rwanda's genocide took shelter there. Rwanda has repeatedly denied Congolese and U.N. accusations it is behind M23.

Saturday's Kampala summit called on the rebels to abandon their aim of toppling the government and proposed that government troops be redeployed inside Goma.

The rebels have not explicitly rejected or accepted the proposals. They are, however, unlikely to cede control of the city or accept government soldiers inside it.

WITHDRAW

Regional and international leaders are trying to halt the latest bout of violence in eastern Congo, where millions have died of hunger and disease in nearly two decades of fighting fuelled by local and regional politics, ethnic rifts and competition for reserves of gold, tin and coltan.

"Negotiations will start after the (M23) withdrawal from Goma," Congolese government spokesman Lambert Mende said.

Kabila was still in the Ugandan capital on Sunday morning but was expected to return to Kinshasa later in the day or on Monday, two Congo government sources said. Kabila's communications chief Andre Ngwej said he did not believe official talks would start in the next few days.

While Kabila's army is on the back foot, analysts are skeptical the rebels can make good on their threat to march on Kinshasa without major support from foreign backers.

The regional leaders' plan proposed deploying a joint force at Goma airport comprising of a company of neutral African troops, a company of the Congolese army (FARDC) and a company of the M23.

In a statement, the Kinshasa government said Tanzania would take command of the neutral force and that South Africa had offered "substantial" logistical and financial contributions towards it. The Kampala plan did not say what the consequences would be if the rebels did not comply.

(Writing by Richard Lough; Editing by James Macharia and Peter Graff)

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Italy centre left picks candidate for next PM

ROME (Reuters) - Italy's centre left voted on Sunday to choose the candidate who will be the leading contender to succeed Mario Monti as prime minister after an election in March and take charge of steering the country through a deep recession.

Opinion surveys show Democratic Party leader Pier Luigi Bersani is the frontrunner among five candidates, followed by Florence mayor Matteo Renzi, who has vowed to shake up Italy's political establishment if he is chosen to lead the alliance.

The vote will eliminate a major element of uncertainty in choosing a successor to Monti's technocrat government.

The centre-left alliance is well ahead in opinion polls for the parliamentary election and the winner of the primary vote is in pole position to take over Monti's efforts to control strained public finances and tackle a year-long recession.

Support for Prime Minister Silvio Berlusconi's deeply divided centre-right People of Freedom party (PDL) has crumbled to less than half than it recorded in the last election in 2008.

Berlusconi said on Saturday he was again thinking about running, deepening the PDL chaos.

"It's time for a return to serious politics, and as a consequence we can start to resolve the economy," said 57-year-old Vincenzo Donna Maria, after he cast his vote for lower house deputy Bruno Tabacci, one of the other candidates, at a busy outdoor polling station in northern Rome.

A woman who voted for Bersani, who did not wish to be named, said she hoped for "a better country, led by honest people".

Both Bersani and Renzi reject the idea, encouraged by international markets, that Monti should return after the vote to continue his economic policies that have so far included unpopular spending cuts, tax rises and labor reform.

Protests on Saturday by tens of thousands of students and workers from across the political spectrum highlighted the levels of discontent among Italians grappling with the slump and rising unemployment in the euro zone's third biggest economy.

RUN-OFF POSSIBLE

While Renzi, 37, is much more popular across the general population than career politician Bersani, 61, he is far weaker among party supporters who will decide the primary.

Organizers expect up to 4 million party and non-party voters to take part in the poll that is open to anyone over 18 who is Italian or resident in Italy regularly, but it is likely that members will make up the biggest proportion of those at the ballot box.

However, Bersani may still fail to secure the 50 percent he needs for a first-round victory, which will mean a second round run-off will be held on December 2. At that point he is likely to pick up the votes of third-placed Nichi Vendola, the openly gay governor of the southern Puglia region.

"I am expecting a run-off because there are a lot of us," said Bersani, talking to reporters at a voting station on Saturday. "All five of us are going to try to lend a hand to help this country emerge from its suffering."

An upbeat Renzi told reporters before joining in a half-marathon in Florence: "If I lose it will have been a great people's experience, but I'm going to win."

The centre right is due to hold its own primaries on December 16, but PDL secretary Angelino Alfano said on Saturday that would no longer make sense if Berlusconi chose to stand.

Further complicating the national political picture is the dramatic rise of the anti-establishment 5-Star Movement, which is now second in opinion polls, and that around half of Italians say they are either undecided or will abstain.

It is also still unclear what electoral system will be used for the national vote, expected on March 10-11, as politicians have been arguing over how to reform an unpopular electoral law that allows party leaders to hand-pick members of parliament.

Voting on Sunday was due to end at 8 p.m. (1900 GMT), with results due around midnight (2300 GMT).

(Editing by Alison Williams)

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China lands fighter jet on new carrier in show of force

SHANGHAI (Reuters) - China has carried out its first successful landing of a fighter jet on its first aircraft carrier, state media said on Sunday, a symbolically significant development as Asian neighbors fret about the world's most populous country's military ambitions.

The home-built J-15 fighter jet took off from and landed on the Liaoning, a reconditioned Soviet-era vessel from Ukraine which only came into service in September this year.

China ushered in a new generation of leaders this month at the 18th Communist Party Congress in Beijing, with outgoing President Hu Jintao making a pointed reference to strengthening China's naval forces, protecting maritime interests and the need to "win local war".

China is embroiled in disputes with the Philippines and Vietnam over South China Sea islands believed to be surrounded by waters rich in natural gas. It has a similar dispute with Japan over islands in the East China Sea.

It has also warned the United States, with President Barack Obama's "pivot" to Asia, not to get involved.

"We should make active planning for the use of military forces in peacetime, expand and intensify military preparedness, and enhance the capability to accomplish a wide range of military tasks, the most important of which is to win local war in an information age," Hu said.

China has advertised its long-term military ambitions with shows of new hardware, including its first test flight of a stealth fighter jet in early 2011, an elite helicopter unit and the launch of the aircraft carrier.

China is boosting military spending by 11.2 percent this year, bringing official outlays on the People's Liberation Army to 670.3 billion yuan ($100 billion) for 2012, after a 12.7 percent increase last year and a near-unbroken string of double-digit rises across two decades.

Beijing's public budget is widely thought by foreign experts to undercount its real spending on military modernization, which has drawn repeated calls from the United States for China to share more about its intentions.

China's state-run Xinhua news portal said the J-15 - which can carry multi-type anti-ship, air-to-air, and air-to-ground missiles - is comparable to the Russian Su-33 jet and the U.S. F-18. It did not say when the landing on the carrier took place.

(Reporting by Shanghai Newsroom; Editing by Nick Macfie)

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UK calls for U.S. focus on Israel-Palestinian issue

LONDON (Reuters) - British Foreign Secretary William Hague on Sunday urged the United States to take a more active role in seeking a lasting settlement between Israelis and Palestinians, warning of a "final chance" for a two-state solution.

Eight days of fighting between Israel and Palestinians in the Hamas-ruled enclave of Gaza diverted U.S. President Barack Obama's attention to the Middle East as he toured Asia on his first trip abroad after this month's election.

Hague told the BBC it was "time for a huge effort on the Middle East peace process".

"This is what I have been calling for, particularly calling for the United States now after their election to show the necessary leadership on this over the coming months, because they have crucial leverage with Israel and no other country has," Hague said.

"We're coming to the final chance maybe for a two state solution for the Israeli-Palestinian conflict," he added.

U.S. Secretary of State Hillary Clinton broke off from Obama's tour of Asia to help negotiate a ceasefire between Israel and Hamas to end this month's bout violence.

Recent U.S. efforts to coax the Palestinians and Israelis back into negotiations to agree a long term peace have failed, and talks are set become even more fraught if the Palestinians succeed in securing recognition as an "observer state".

A vote on the diplomatic upgrade could take place later this month at the U.N. General Assembly, and if successful would implicitly recognize Palestinian statehood. Israel and the United States oppose the move and call for a return to talks.

The last direct negotiations between Israel and Palestinian leaders in the occupied West Bank broke down in 2010 over the issue of Jewish settlement building across the territory.

Britain has also been pushing the United States, a close ally, to take a bigger role in helping to end the conflict in Syria, with Prime Minister David Cameron calling for greater engagement within hours of Obama's re-election.

(Reporting by Mohammed Abbas; Editing by Alison Williams)

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Egypt stocks plunge after Mursi power grab

CAIRO (Reuters) - Egypt's stock market plunged on Sunday in its first day open since Islamist President Mohamed Mursi seizure of new powers set off street violence and a political crisis, unraveling efforts to restore stability after last year's revolution.

More than 500 people have been injured in protests since Friday, when Egyptians awoke to news that Mursi had issued a decree widening his powers and shielding them from judicial review.

Mursi's Muslim Brotherhood supporters were expected to turn out again on the streets in a show of support after prayers on Sunday afternoon. His supporters and opponents are both planning massive demonstrations on Tuesday that many fear will lead to more violence.

Sunday's stock market fall of nearly 10 percent - halted only by automatic curbs - was the worst since the uprising that toppled Hosni Mubarak in Feb 2011. Images of protesters clashing with riot police and tear gas wafting through Cairo's Tahrir Square were an unsettling reminder of that revolution.

"We are back to square one, politically, socially," said Mohamed Radwan of Pharos Securities, an Egyptian brokerage firm.

Judges announced on Saturday they would go on strike. Liberal politician Mohammed ElBaradei called Mursi a "dictator".

Forged out of the once-banned Muslim Brotherhood, the Mursi administration has defended his decree as an effort to speed up reforms that will complete Egypt's democratic transformation.

Yet leftists, liberals, socialists and others say it has exposed the autocratic impulses of a man once jailed by Mubarak, while Islamist parties have rallied behind Mursi.

"There is no room for dialogue when a dictator imposes the most oppressive, abhorrent measures and then says 'let us split the difference'," prominent opposition leader ElBaradei said.

"I am waiting to see, I hope soon, a very strong statement of condemnation by the U.S., by Europe and by everybody who really cares about human dignity," he said in an interview with Reuters and the Associated Press.

Activists opposed to the Mursi decree were camped out in central Cairo for a third consecutive day. State media reported that Mursi met for a second day with his advisers.

"I am really afraid that the two camps are paving the way for violence," said Hassan Nafaa, a professor of political science at Cairo University. "Mursi has misjudged this, very much so. But forcing him again to relinquish what he has done will appear a defeat."

WARNINGS FROM WEST

Mursi's decree drew warnings from Western countries to uphold democracy, a day after he had received glowing tributes from the United States and others for his work brokering a deal to end eight days of violence between Israel and Hamas.

"Investors know that Mursi's decisions will not be accepted and that there will be clashes on the street," said Osama Mourad of Arab Financial Brokerage.

Investors had grown more confident in recent months that a legitimately elected government would help Egypt put its economic and political problems behind it. The stock market's main index had risen 35 percent since Mursi's victory.

Just last week, investor confidence was helped by a preliminary agreement with the International Monetary Fund over a $4.8 billion loan needed to shore up state finances.

Issued late on Thursday, the Mursi decree marks an effort to consolidate his influence after he successfully sidelined Mubarak-era generals in August. Analysts say it reflects Muslim Brotherhood suspicions of sections of a judiciary that is largely unreformed from the Mubarak era.

The decree defends from judicial review decisions taken by Mursi until a new parliament is elected. That vote is expected early next year.

It also shields the Islamist-dominated assembly writing Egypt's new constitution from a raft of legal challenges that have threatened the body with dissolution, and offers the same protection to the Islamist-controlled upper house of parliament.

Many of Mursi's political opponents share the view that Egypt's judiciary needs reform. But they see the decree as a threat to the country's nascent democracy.

(Editing by Peter Graff)

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Suicide bombs kill 11 at military church in Nigeria

KADUNA, Nigeria (Reuters) - Two suicide bombs killed at least 11 people on Sunday at a church in a barracks in northern Nigeria, where the Islamist sect Boko Haram is waging a campaign of violence, the military said.

Army spokesman Bola Koleoso said a bus drove into the side of the St. Andrew Military Protestant Church at the Jaji barracks in Kaduna state and exploded at around 1105 GMT, five minutes after a service had started.

Explosives inside a Toyota Camry were detonated outside the church ten minutes later, he said. The military said at least 30 were injured.

A military source who witnessed the attack said the second bomb was the most deadly, killing people who went to help the injured from the first blast. Witnesses said the barracks was cordoned off and ambulances carried the wounded to hospital.

There was no claim of responsibility but Islamist sect Boko Haram has frequently attacked the security forces and Christian churches in its fight to create an Islamic state in Nigeria, where the 160 million population is evenly split between Christians and Muslims.

A suicide bomber killed eight people and injured more than 100 last month at a church in another part of Kaduna state, which has a mixed Muslim and Christian population and often suffers from sectarian tensions.

CHURCH ATTACKS

A bomb attack in a church in Kaduna state in June triggered a week of tit-for-tat violence that killed at least 90 people.

Gunmen killed six people in a village in northern Kaduna state earlier this month. The area was at the heart of post-election violence in April last year that left hundreds dead and thousands displaced.

Boko Haram's purported spokesman Abu Qaqa, who used to confirm the sect's attacks in phone calls to journalists, was killed by the military in September, the army said. Since then there has been little public communication by the group.

Nigeria's army on Saturday offered 290 million naira ($1.8 million) for information leading to the capture of 19 leading members of Boko Haram, including 50 million naira for the sect's self-proclaimed leader Abubakar Shekau.

At least 2,800 people have died in fighting since Boko Haram's insurrection began in 2009, according to Human Rights Watch. Most in the northeast of the country, where the sect usually attacks politicians and security forces.

Former Prime Minister Tony Blair visited Nigeria with the Archbishop of Canterbury-designate Justin Welby last week to launch a program by Blair's foundation to reconcile religious differences in Africa's most populous nation.

The foundation said it was at consultancy stage and gave no details on how much would be spent or who would benefit.

(Writing by Joe Brock; Editing by Andrew Roche)

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Syrian rebels take airbase in slow progress toward Damascus

AMMAN (Reuters) - Syrian rebels said on Sunday they had captured a helicopter base east of Damascus after an overnight assault, their latest gain in a costly battle to unseat President Bashar al-Assad that is drawing nearer to his seat of power.

The Marj al-Sultan base, 15 km (10 miles) from the capital, is the second military facility on the outskirts of the city reported to have fallen to Assad's opponents this month.

Activists said rebels had destroyed two helicopters and taken 15 prisoners.

"We are coming for you Bashar," a rebel shouted in an internet video of what activists said was Marj al-Sultan. Restrictions on non-state media meant it could not be verified.

The rebels have been firming their hold on farmland and urban centers to the east and northeast of Damascus while a major battle has been underway for a week in the suburb of Daraya near the main highway south.

"We are seeing the starting signs of a rebel siege of Damascus," veteran opposition campaigner Fawaz Tello said from Berlin. "Marj al-Sultan is very near to the Damascus Airport road and to the airport itself. The rebels appear to be heading toward cutting this as well as the main northern artery to Aleppo."

Assad's core forces, drawn mainly from his minority Alawite sect, an offshoot of Shi'ite Islam that has dominated power in Syria for nearly five decades, are entrenched in the capital.

They also have devastating air superiority although they have failed to prevent rebels increasing their presence on the edge of the capital and in neighborhoods on the periphery.

A Western diplomat following the fighting said Assad still had the upper hand. "The army will allow positions to fall here and there, but it can still easily muster the strength to drive back the rebels where it sees a danger," the diplomat said.

"The rebels are very short of international support and they do not have the supplies to keep up a sustained fight, especially in Damascus."

IRAN CONDEMNS PATRIOT PLAN

Iran said Turkey's request to NATO to deploy Patriot defensive missiles near its border with Syria would add to problems in the region, where Iran is pitted against mostly Sunni Turkey and Gulf Sunni powers.

Iran's Shi'ite rulers have stepped up support for Assad while Sunni Arab powers helped forge a new opposition coalition this month recognized by France and Britain as the sole representative of the Syrians.

Syria has called the missile request "provocative", seeing it as a first step toward a no-fly zone over Syrian airspace which the opposition is seeking to help them hold territory against an enemy with overwhelming firepower from the air.

Most foreign powers are reluctant to go that far.

NATO has said the possible deployment of the missiles was purely defensive. The U.S.-led Western alliance has had some talks on the request but has yet to take a decision.

Turkey fears security on its border may crumble as the Syrian army fights harder against the rebels, some of whom have enjoyed sanctuary in Turkey in their 20-month-old revolt against Assad's rule.

Ankara has scrambled fighter jets and returned fire after stray Syrian shells and mortar bombs from heavy fighting along the border landed in its territory.

More than 120,000 Syrian refugees are sheltering in camps in southern Turkey and more are expected with winter setting in and millions of people estimated to be short of food inside Syria.

Abu Mussab, a rebel operative in the area of Hajar al-Aswad in south Damascus, said the opposition fighters had given up expecting a no-fly zone. "The bet is now on better organization and tactics," he said.

The video said by activists to have been filmed at the Marj al-Sultan base showed rebel fighters carrying AK-47 rifles.

An anti-aircraft gun was positioned on top of an empty bunker and a rebel commander from the Ansar al-Islam, a major Muslim rebel unit, was shown next to a helicopter.

"With God's help, the Marj al-Sultan airbase in eastern Ghouta has been liberated," the commander said in the video. Eastern Ghouta, a mix of agricultural land and built-up urban areas, has been a rebel stronghold for months.

Damaged mobile radar stations could be seen on hilltops, with rebels waiving as they walked in the compound.

Footage from Saturday evening showed rebels firing rocket-propelled grenades at the base, and what appeared to be a helicopter engulfed in flames.

Last week rebels briefly captured an air defense base near the southern Damascus district of Hajar al-Aswad, seizing weapons and equipment before pulling out to avoid retaliation from Assad's air force.

(Additional reporting by Dominic Evans in Beirut Yeganeh Torbati in Dubai and Ece Toksabay in Istanbul; editing by Philippa Fletcher)

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New pope installed to lead church in Islamist-run Egypt

CAIRO (Reuters) - The Coptic Orthodox church staged a ceremony rich in ritual on Sunday to install its pope, Tawadros II, who Christians hope will guide them through the new, Islamist-led Egypt.

The 60-year-old pope was picked on November 4 and the ceremony on Sunday filled with incense, elaborate robes and chanting marked his formal ascendance as the 118th leader of the church.

Coptic Christians, whose church predates the arrival of Islam in Egypt, make up a tenth of Egypt's 83 million people.

Many fear their community, the biggest Christian group in the Middle East which has long complained of discrimination, will be squeezed to the sidelines of society under Islamists now ruling the Muslim-majority nation.

"We chose him because he is man who is obedient to God," said Bishop Bakhomious, who was pope in the interim period after Shenouda III died aged 88 in March after four decades in office.

"God had listened to our prayers and did not wish to leave us orphans for long," he added, as priests and bishops prayed for the new pope, dressing him in lavish embroidered vestments.

In the final stages, a red and gold mitre was placed on his head before he sat on a throne. The bearded and bespectacled pope trained as pharmacist before being ordained.

President Mohamed Mursi, propelled to power by the Muslim Brotherhood, did not attend the ceremony in the cathedral in Cairo's Abbasiya district to the dismay of some Christians who said it undermined his claim to be a leader for all Egyptians.

But he sent his prime minister, Hisham Kandil. Other officials and dignitaries also attended.

Tawadros II faces challenges delivering on the hopes of his flock. He told Reuters at a desert monastery west of Cairo a day after his was picked that the church would oppose any new constitution that only met Muslim concerns.

Liberals, moderate Muslims and Islamists are tussling over the shape of the constitution and extent of Islamic references in the document. A group of technical advisers quit the assembly drawing it up on Saturday, saying their voices were not being heard.

That complicates a process that is vital to completing Egypt's transition to democracy since Hosni Mubarak was toppled last year. A constitution must be in place before an election can be held to replace the dissolved parliament.

George Samir, a 32-year-old Copt who helped organize Sunday's service, said he had mixed emotions as he was reminded of the Shenouda's passing during the ceremony.

But he added: "I am happy to have a new pope, a new father and leader for the Christians. Pope Tawadros seems to be a very decent and modest leader. God bless him and bless us all."

Christians have long grumbled that they are sidelined in the workplace and in law, citing rules that make it easier to build a mosque than a church. A spate of attacks on churches since Mubarak's overthrow has further worried them.

(Writing by Edmund Blair; Editing by Andrew Heavens)

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Kurd militants end hunger strike in Turkey, deal seen

ISTANBUL/DIYARBAKIR (Reuters) - Hundreds of Kurdish militants ended a hunger strike in jails across Turkey on Sunday in response to an appeal from their leader, fuelling hopes a deal had been struck that could revive talks to end a decades-old conflict.

Kurdistan Workers Party (PKK) leader Abdullah Ocalan called on his supporters to end their protest after holding a series of discussions with Turkish MIT intelligence agency officials, according to one media report.

Top MIT officials have held secret meetings with senior PKK representatives in Oslo in recent years and Turkish Prime Minister Tayyip Erdogan said in September more talks were possible.

More than 40,000 people have been killed in 28 years of fighting between Turkey and the PKK - designated a terrorist group by Ankara, the United States and the European Union.

Ocalan's call for an end to the hunger strike, which militants staged to demand an end to his isolation in an island prison south of Istanbul, was announced by his brother on Saturday.

"On the basis of our leader's call ... we end our protest as of November 18, 2012," Deniz Kaya, a spokesman for the jailed PKK militants, was quoted as saying in a statement by an association representing the inmates' families.

The announcement was welcomed by the government, which had been increasingly worried any deaths during the hunger strike might provoke more violence.

"I hope we will not face such protests from now on. Turkey is a democratic country," Deputy Prime Minister Bulent Arinc was quoted as telling reporters by state-run Anatolian news agency.

"Whatever demands the people have, the government and politicians can air them in parliament," he added.

A newspaper said on Sunday talks between Ocalan and Turkish intelligence officials over the last two months had paved the way for his appeal to end the protest, which lasted 68 days.

"A delegation went to Imrali on three occasions. A senior MIT official joined one of these visits and Ocalan's intervention was sought to end the hunger strike," the liberal daily Radikal said. It did not identify its sources.

Fighting between the PKK and Turkish forces surged over the summer. Ankara has linked the renewed hostilities to the conflict in neighboring Syria and accused Syrian President Bashar al-Assad of arming the PKK.

In the latest violence, five Turkish soldiers were killed in clashes with PKK fighters in Hakkari province near the border with Iraq on Sunday, security sources told Reuters.

MOST DEMANDS NOT MET

Ocalan, imprisoned on Imrali island in the Marmara Sea south of Istanbul since his capture in 1999, has significant support among Kurds but is widely reviled by Turks who hold him responsible for the conflict since the PKK took up arms in 1984.

According to justice ministry figures, about 1,700 people had been taking part in the hunger strike. Kurdish politicians said the inmates were now receiving medical treatment.

There was no indication their demands had been met.

As well as end to Ocalan's isolation and limited access to lawyers, they had demanded greater use of the Kurdish language in schools and other institutions.

Erdogan's government has boosted Kurdish cultural and language rights since taking power a decade ago. But Kurdish politicians are seeking greater political reform, including steps towards autonomy for mainly Kurdish southeastern Turkey.

Addressing one of the protesters' demands, the government has submitted to parliament a bill allowing defendants to use Kurdish in court testimony.

Seven leading Kurdish politicians, mostly from the pro-Kurdish Peace and Democracy Party (BDP), had joined the hunger strike over the last week.

"We hope this call will pave the way for the next process, which is to end (Ocalan's) isolation ... The Kurdish problem should be resolved by dialogue and deliberation," BDP leader Selahattin Demirtas told reporters late on Saturday.

(Reporting by Seyhmus Cakan; Writing by Daren Butler; Editing by Andrew Heavens)

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Chalk, blackboard... teargas? Italy protests start at school

ROME (Reuters) - At dawn before lessons could start last week, high school pupils at the Nomentano Science School in a northern suburb of Rome slipped chains around the gates and blocked the doors with chairs taken from classrooms.

Between the ragged European Union flag and Italian tricolour over the entry they hung a new banner: a white sheet spray painted with the word "Occupied".

With youth unemployment more than three times the national average and Prime Minister Mario Monti's austerity policies biting into education spending, high school and university students have moved to the front of anti-government protests.

As strikes swept Europe on Wednesday, teenagers armed with makeshift riot shields painted to look like the covers of famous books led a march of thousands through Rome. The demonstration ended in violent clashes, with riot police chasing protesters down the banks of the Tiber under clouds of teargas.

In a speech this week at Milan's Bocconi University, where he was an economics professor before becoming prime minister, Monti expressed sympathy, saying young people were paying for "serious errors accumulated over the past decades".

Nomentano is one of more than a dozen schools around Rome to be seized by students in a revolt against reforms and economic crisis cuts imposed by Monti's technocrat government.

Student Nicholas Giordano, 18, pointed to gaping holes in the school's outdoor paving and its broken roofs.

"There are toilets that haven't worked for months. When it rains, in some classrooms the water comes in," Giordano said. "We want to show the government that this is unacceptable."

Students have been camping inside the school in sleeping bags since Monday, and said their occupation would last at least through the week.

Proposals which the CGIL union says will shave 182 million euros ($232.81 million) from schools' annual budgets have become a rallying point for groups that oppose Monti from across the political spectrum, from neo-fascists to the far left.

LOST GENERATION

Italy's young people are among the hardest hit by an economy that has been dipping in and out of recession since 2008. The youth unemployment rate is 35 percent.

Italy has repeatedly cut education spending in recent years, despite allocating just 4.9 percent of gross domestic product to education according the most recent OECD figures, from 2009. Of the 31 members of the group of rich countries for which it had data, only the Czech Republic, Hungary and Slovakia spent less.

Concern increased last week when the head of the association representing local governments said planned cuts to regional spending would force schools to extend Christmas holidays.

"We do not have the money to pay to heat the classrooms," Antonio Saitta told a conference.

For those who do find work after graduation, university has not always led to skilled jobs: according to the Bank of Italy, one in four employed graduates were "overqualified" in 2011, working as waiters, farm laborers or in other jobs that do not require a degree, a rise of two percentage points from 2009.

Student anger is focused on an education reform bill going through parliament that would give schools more autonomy and allow them to accept other sources of funding than the state, which protesters believe is intended to encourage privatization.

Professor Antonio Cocozza, a specialist in the economics of education at Italy's LUISS University, said reforms to give schools control over their curriculums were needed so schools could adjust their teaching to the needs of the market.

"There is a risk an entire generation may not find employment, or may not find an occupation that matches their studies," Cocozza said. "I agree with austerity, but we must invest at the same time, otherwise we risk not being ready for economic recovery in the future."

ANTI-POLITICS

The occupations, which began in a seaside district of the capital before spreading from school to school, are organized by disparate student groups united by anger at austerity. They reflect disillusionment with mainstream politics across society.

"The government runs the risk of finding itself at odds with a large part of the population," said Federico Brugnola, 17, who said about a thousand of Nomentano's 1,400 students supported the occupation. "All those angry people will begin to rise up. Italy risks becoming another Greece."

In a result that could presage national elections in five months, an October vote in Sicily made the anti-political party of comedian Beppe Grillo the island's largest political force.

Among youth groups that have gained prominence is the far-right Blocco Studentesco, whose members describe themselves as modern-day fascists, venerate dictator Benito Mussolini, and want banks, utilities, telecoms and transport nationalized.

The students of Nomentano said protests would continue even after they return to classes.

"This will not stop at the end of the week. This will not stop with the elections. In two years I'll be going to university and I will continue the struggle there," Brugnola said. "We will continue to protest until things get better. This is a fight for our future." ($1 = 0.7817 euros)

(Reporting by Naomi O'Leary)

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Southeast Asia calls for talks with China on sea dispute

PHNOM PENH (Reuters) - Southeast Asian nations displayed a rare show of unity on Sunday against China's sweeping maritime claims, calling for the first formal talks with Beijing over a sea dispute that has raised tensions and exposed deep divisions in the region.

As Chinese Premier Wen Jiabao arrived in Cambodia for meetings with Southeast Asian leaders, the 10-member Association of Southeast Asian Nations (ASEAN) appeared determined to avoid a repeat of an embarrassing breakdown of talks in July over competing claims in the mineral-rich South China Sea, its biggest security challenge.

Cambodia's Prime Minister Hun Sen will tell Wen that ASEAN wants to begin talks on a binding Code of Conduct, aimed at reducing the chance of naval flashpoints, as soon as possible, ASEAN Secretary General Surin Pitsuwan told reporters.

"Prime Minister Hun Sen himself will be discussing with the PM of China tonight and delivering this consensus on the ASEAN side," Surin said.

"They would like to see the commencement of the discussion as soon as possible because this is an issue of interest, concern and worry of the international community."

China's assertive claims in the South China Sea have sown deep divisions within the bloc at a time when military spending in the region is surging and the United States refocuses attention on Asia - a "pivot" that President Barack Obama will reinforce on his visit to the summit on Monday in Cambodia's capital, Phnom Penh.

Chinese ally Cambodia has used its powers as ASEAN chair this year to restrict discussion of the issue, in line with Beijing's view that the disputes should be discussed on a bilateral basis. China has said it is willing to discuss the Code of Conduct when the "time is right."

Asked about the ASEAN request for formal talks, Chinese foreign ministry spokesman Qin Gang said consultations with ASEAN nations were ongoing and that the issue should not be a "stumbling block" for relations between China and the region.

Wen is due to hold formal talks with ASEAN leaders on Monday.

Diplomats said the Philippines, a close U.S. ally, had invited fellow Southeast Asian claimant states Vietnam, Brunei, and Malaysia to separate talks in Manila to be held later this year or early next year.

"We are trying to make that happen, hopefully in Manila," Philippine Foreign Secretary Albert del Rosario told reporters.

The other members of ASEAN include Cambodia, Laos, Myanmar, Thailand, Singapore and Indonesia, none of which have claims on the South China Sea.

One Philippine diplomat said the meeting was aimed at resolving issues among the claimant states, such as overlapping economic zones. He voiced frustration with China for delaying the start of talks with ASEAN over the Code of Conduct.

"ASEAN has done its part," the diplomat said. "Now it is up to China to also come up with its own because when we formally sit down we will present our position to them. In fact we have already written it."

GLACIAL PROGRESS

Despite saying it is ready for talks with China, ASEAN is still debating its own version of a maritime code - a process that could be further complicated by the talks in Manila.

China's Wen arrived in Phnom Penh on Sunday for talks with ASEAN leaders ahead of the broader East Asia summit that includes the United States and Japan among other Asian nations.

Ahead of the summit, China warned that the South China Sea issue should not overshadow the talks. But U.S. officials said that Obama will reinforce a "very strong interest" in progress on a dispute-management mechanism, a likely irritant to China which has said that Washington should stay out of the row.

The facade of ASEAN unity on the issue collapsed dramatically in July when the group failed to agree on a joint communique for the first time in its 45-year history. Tempers frayed as Cambodia blocked a Philippine request to include a mention of a stand-off between Chinese and Philippine ships at a disputed shoal off the Filipino coast.

Philippine President Benigno Aquino refrained from mentioning the shoal incident in remarks to other leaders on Sunday.

Regional giant Indonesia took the lead in repairing the damage by circulating a six-point ASEAN consensus on the dispute that reaffirmed a commitment to complete the Code of Conduct.

Indonesia said on Friday it had proposed a kind of regional hotline with China that would enable leaders to "pick up the phone and chat" in the event of a naval incident.

Security analysts say the chances of a misstep leading to conflict are rising as military spending in the fast-growing region surges and nationalist sentiment over the dispute increases in several claimant states.

Proven and undiscovered oil reserve estimates in the South China Sea range as high as 213 billion barrels of oil, the U.S. Energy Information Administration said in a 2008 report. That would surpass every country's proven oil reserves except Saudi Arabia and Venezuela, according to the BP Statistical Review.

(Additional reporting by James Pomfret; Editing by Jason Szep and Raju Gopalakrishnan)

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German Greens go mainstream in bid for power

HANOVER, Germany (Reuters) - Germany's Greens have gone grey. The world's most successful pro-environment party has turned deadly serious about gaining power by stealing votes from Chancellor Angela Merkel - and perhaps by joining her.

The muesli, woolly sweaters, thick beards and endless debates about abstract issues that were once part of any Greens congress are largely gone. In their place is a more mature party of smartly dressed professionals with one clear aim: getting back into government after federal elections next year.

At their unusually harmonious three-day party congress in Hanover that ended on Sunday, Greens leaders were applauded for hailing their party's "conservative values" and unabashedly trying to appeal to center-right voters, using language that a decade ago would have had them booed off the stage.

Pollsters put support for the Greens at 13 percent, enough if the electoral arithmetic goes their way to make them kingmakers after Germans vote in September, 2013.

The party would prefer a coalition with the Social Democrats, renewing a government which ruled Germany from 1998 to 2005. But Greens are quietly thinking the unthinkable and opening up to a possible alliance with Merkel's conservatives, long their political arch enemy.

Greens express distaste for an alliance with Merkel and her Christian Democrats (CDU), but interest in her supporters. "We don't want the CDU, we want only your voters," Katrin Goering-Eckart, a newly-elected party leader, told the Congress.

Goering-Eckart, a Lutheran church leader, expresses the Greens' pride in their weightiness, openly admitting their hope that the makeover will attract conservative voters.

"If you want to run the country, if you want policies that add up, then you've got to be serious about it," she told Reuters. "It's not something you can do with smoke and mirrors."

The problem for the Greens is that their preferred partners, the Social Democrats (SPD), are languishing at 30 percent support in opinion polls. This may not be enough for the two parties to win a parliamentary majority and oust Merkel, whose conservatives are polling about 39 percent.

Once a peacenik ecological movement with a far-left tilt, delegates in Hanover made clear that they are no longer dead set against a coalition with Merkel, even though many prefaced their remarks with "We'd rather have an SPD-Greens government, but..."

The Greens - once famous for their unpredictable and self-destructive congress battles that could stretch beyond midnight - have already proved they can attract conservatives.

Last year they stunned Merkel by winning control of the state of Baden-Wuerttemberg, traditionally a conservative bastion, with the SPD as junior partners.

Under Winfried Kretschmann, Germany's first Green state premier, they have won a reputation as a "safe pair of hands" and extended their power when a Green became mayor of the state capital, Stuttgart, which is home to some of Germany's biggest companies including carmaker Daimler-Benz.

At a state level, they have already worked with conservatives. They ruled Hamburg with the CDU for three years until 2011 in a coalition that earned them national respectability as a fiscally responsible party.

A MORE POWERFUL FORCE

In their early years, the Greens had an aversion to power after they were founded in 1980. Only in the mid 1990s did they begin to shed their "anti-party party" ways and actively seek to be part of a federal government. As junior partners to the SPD under Chancellor Gerhard Schroeder, they helped shape policies on social and energy issues that profoundly changed Germany.

The Greens are now a much more powerful force than in 1998 when they won 6.7 percent of the vote. They got a record 10.7 percent in the 2009 election and could break that next year.

Goering-Eckart, 46, is the main reason that speculation is rampant about an alliance with conservatives - who are "black" in Germany's political color coding. A fresh-faced centrist, she was the unexpected winner of a primary battle to become the party's lead candidate, alongside veteran Juergen Trittin.

Goering-Eckart beat off two other more established women and will be the face of the party in next year's campaign. Analysts believe she can help to poach some votes from Merkel.

"Goering-Eckart is in the centre and will attract some conservative voters," said Thomas Jaeger, political scientist at Cologne University. "But the question is will the party follow her into the centre or will she move left? I think the Greens are going to have a hard time winning over lots of CDU voters."

Jaeger believes the Greens' attempt to present themselves as a more serious centrist party is an ill-fated attempt to distract from the fact that Merkel has robbed them of their most important issue - switching off nuclear power. After last year's Fukushima disaster in Japan, Merkel reversed course and decided to shut down Germany's nuclear industry.

The Greens briefly soared to highs of 24 percent in opinion polls amid fears of nuclear power. "The Greens don't really have a campaign issue any more," said Jaeger. "They can talk about social issues but who's listening to the Greens on that? They're trying to distract attention with the talk of 'black-green'."

Many delegates at the congress spent much time speaking against "black-green" as a coalition option, even though few wanted to rule it out - a subtle but significant shift from four years ago when black-green was anathema. One Greens leader said the party should keep all options open.

"If every party rules out any coalition except their preferred alliance there won't be a government and that's not good for Germany," Tuebingen mayor Boris Palmer told Reuters.

"We prefer the SPD but shouldn't rule anything. It's wrong to rule anything out before the election. 'Black-green' is not likely but shouldn't be ruled out. If the CDU makes an offer for a coalition with more green policies in it than without us, we should take it. Otherwise, we're better off in the opposition."

(editing by David Stamp)

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Israel, Gaza fighting rages on as Egypt seeks truce

GAZA/JERUSALEM (Reuters) - Israel bombed Palestinian militant targets in the Gaza Strip from air and sea for a fifth straight day on Sunday, preparing for a possible ground invasion while also spelling out its conditions for a truce.

Palestinians launched dozens of rockets into Israel and targeted its commercial capital, Tel Aviv, for a fourth day. The "Iron Dome" missile shield shot down two of the rockets fired toward Israel's biggest city but falling debris from the interception hit a car, which caught fire. Its driver was not hurt.

In scenes recalling Israel's 2008-2009 winter invasion of the Gaza Strip, tanks, artillery and infantry massed in field encampments along the sandy border. Military convoys moved on roads in the area newly closed to civilian traffic.

Prime Minister Benjamin Netanyahu said Israel was ready to widen its offensive.

"We are exacting a heavy price from Hamas and the terrorist organizations and the Israel Defence Forces are prepared for a significant expansion of the operation," Netanyahu said at a cabinet meeting, giving no further details.

Palestinian officials said 56 Palestinians, most of them civilians, including 16 children, have been killed in small, densely populated Gaza since the Israeli offensive began, with hundreds wounded. More than 500 rockets fired from Gaza have hit Israel, killing three civilians and wounding dozens.

Israel unleashed intensive air strikes on Wednesday, killing the military commander of the Islamist Hamas movement that governs Gaza and spurns peace with the Jewish state.

Israel's declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has bedeviled Israeli border towns for years and is now displaying greater range, putting Tel Aviv and Jerusalem in the crosshairs.

AIR STRIKE ON MEDIA CENTRES

In air raids on Sunday, two Gaza City media buildings were hit, witnesses said. Eight journalists were wounded and facilities belonging to Hamas's Al-Aqsa TV as well as Britain's Sky News were damaged.

An employee of Beirut-based al Quds television station lost his leg in the attack, local medics said.

The Israeli military said the strike targeted a rooftop "transmission antenna used by Hamas to carry out terror activity", and that journalists in the building had effectively been used as human shields by the group.

Three other attacks killed three children and wounded 14 other people, medical officials said, with heavy detonations regularly jolting the Mediterranean coastal enclave.

Egyptian President Mohamed Mursi said in Cairo, as his security deputies sought to broker a truce with Hamas leaders, that "there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees".

Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying "there is hope", but that it was too early to say whether the efforts would succeed.

U.N. Secretary-General Ban Ki-moon will be in Egypt on Monday for talks with Mursi, the foreign ministry in Cairo said. U.N. diplomats earlier said Ban was expected in Israel and Egypt this week to push for an end to the fighting.

Asked on Israel Radio about progress in the Cairo talks, Silvan Shalom, one of Netanyahu's deputies, said: "There are contacts, but they are currently far from being concluded."

Listing Israel's terms for ceasing fire, Moshe Yaalon, another deputy to the prime minister, wrote on Twitter: "If there is quiet in the south and no rockets and missiles are fired at Israel's citizens, nor terrorist attacks engineered from the Gaza Strip, we will not attack."

SYRIAN FRONT

Israel's military also saw action along the northern frontier, firing into Syria on Saturday in what it said was a response to shooting aimed at its troops in the occupied Golan Heights. Israel's chief military spokesman, citing Arab media, said it appeared Syrian soldiers were killed in the incident.

There were no reported casualties on the Israeli side from the shootings, the third case this month of violence that has been seen as a spillover of battles between Syrian President Bashar al-Assad's forces and rebels trying to overthrow him.

Israel's operation in the Gaza Strip has so far drawn Western support for what U.S. and European leaders have called its right to self-defense, but there was also a growing number of appeals from them to seek an end to the hostilities.

British Foreign Minister William Hague said on Sky News that he and Prime Minister David Cameron "stressed to our Israeli counterparts that a ground invasion of Gaza would lose Israel a lot of the international support and sympathy that they have in this situation".

Israel's cabinet decided on Friday to double the current reserve troop quota set for the Gaza campaign to 75,000. Some 31,000 soldiers have already been called up, the military said.

Netanyahu, in his comments at Sunday's cabinet session, said he had emphasized in telephone conversations with world leaders "the effort Israel is making to avoid harming civilians, while Hamas and the terrorist organizations are making every effort to hit civilian targets in Israel".

Israel withdrew settlers from Gaza in 2005 and two years later Hamas took control of the slender, impoverished territory, which the Israelis have kept under blockade.

NETANYAHU IN RE-ELECTION BID

Ben Rhodes, a deputy national security adviser to President Barack Obama, said the United States would like to see the conflict resolved through "de-escalation" and diplomacy, but also believed Israel had the right to self-defense.

A possible sweep into the Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favored to win a January election.

The last Gaza war, a three-week Israeli blitz and invasion four years ago, killed 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.

The current flare-up around Gaza has fanned the fires of a Middle East ignited by a series of Arab uprisings and a civil war in Syria that threatens to spread beyond its borders.

One significant change has been the election of an Islamist government in Cairo that is allied with Hamas, which may narrow Israel's maneuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

On Saturday, Israeli aircraft bombed Hamas government buildings in Gaza, including the offices of Prime Minister Ismail Haniyeh and a police headquarters.

Israel's Iron Dome missile interceptor system has destroyed more than 200 incoming rockets from Gaza in mid-air since Wednesday, saving Israeli towns and cities from potentially significant damage.

However, one rocket salvo unleashed on Sunday evaded Iron Dome and wounded two people when it hit a house in the coastal city of Ashkelon, police said.

(Additional reporting by Maayan Lubell in Jerusalem and London bureau, Writing by Jeffrey Heller)

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At least five killed in Nairobi grenade attack

NAIROBI (Reuters) - At least five people were killed when a grenade tore through a minibus in Nairobi's Somali-dominated Eastleigh neighborhood on Sunday, a Reuters witness and police said.

"I saw bodies ripped apart," the Reuters photographer said.

The force of the explosion tore apart the vehicle's roof and seats and shattered the window of a nearby cafe. Two other cars were damaged, the photographer said.

Kenya has suffered a string of deadly attacks in its capital Nairobi, the southern port city of Mombasa as well as the eastern garrison town of Garissa over the past year.

The attacks have been blamed on Somali militants and their sympathizers in retaliation for Kenya's decision to send troops into Somalia last year to drive out al Qaeda-linked militants which Nairobi has blamed for attacks on its territory.

African Union peacekeepers, led by Kenyan forces, drove al Shabaab militants out of their last major urban stronghold of Kismayu in southern Somalia seven weeks ago.

Nairobi regional police commander Moses Ombati said the grenade had been thrown into the minibus, commonly referred to as matatus in Kenya.

Ombati confirmed five people had been killed, while the Kenya Red Cross said on its Twitter account that seven people had died and 24 people had been taken to hospital.

There was no immediate claim of responsibility for the attack.

In July, masked assailants launched simultaneous gun and grenade attacks on two churches in Garissa, killing at least 17 people.

Armed cattle raiders killed at least 32 Kenyan police officers in a military-style ambush last weekend. That attack exposed how ill-equipped Kenya's police force is, at a time when they are facing new challenges, including a presidential election next March.

(Reporting by Thomas Mukoya and Humphrey Malalo; Writing by Yara Bayoumy; Editing by Alison Williams)

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Puntland says arrests al Shabaab members, seizes explosives

NAIROBI (Reuters) - Somalia's northern region of Puntland, which up to now has been spared violence fuelled by Islamist fighters, said on Sunday its security forces had arrested two suspected members of the al Qaeda-linked al Shabaab militant group.

Puntland's president has warned the militants, squeezed out of their urban strongholds further south, were moving north towards his semi-autonomous region, a relatively peaceful area.

The government said in a statement security forces on Saturday arrested a man known as Abu Hafsa, whom they said was al Shabaab's head of assassinations. A second man, Abdirizak Hussein Tahlil, identified as an al Shabaab logistics officer, was also arrested.

The statement said Puntland forces had also seized suicide jackets, hand grenades, explosive powder, as well as wires, fuses and remote controls during the raid in Galkayo.

Under pressure from African Union peacekeeping troops and Somali government forces, al Shabaab has lost many of its major urban strongholds in south-central Somalia since it launched a rebellion against the Western-backed government in 2007.

But in an audio statement posted on al Shabaab-linked websites, Sheikh Ali Mohamud Rage, al Shabaab's spokesman, claimed the militant group still controlled most of southern and central Somalia. "Even babies know that we don't need to go to Puntland's hills," he said.

Al Shabaab withdrew from the capital Mogadishu in August last year and lost their last major bastion of Kismayu seven weeks ago. Officials say many fighters have taken up positions in the mountains west of Bossaso in Puntland.

Puntland authorities have captured two shipments of explosives from Yemen in the past few months in incidents that have raised concern about the possible cooperation between Yemen-based al Qaeda in the Arabian Peninsula and al Shabaab, which formally merged with al Qaeda earlier this year.

Puntland spans the relatively calm north of Somalia and has largely escaped the worst of Somalia's upheaval of the last 20 years. It has been showcased by foreign powers advocating a loose federal political system in Somalia as a solution to its troubles.

The area is also rich in energy resources and is being sized up by oil explorers. However, Puntland's authorities have said there is increasing insecurity, which it blames on al Shabaab.

(Additional reporting by Abdi Sheikh in Mogadishu; Writing by Yara Bayoumy; Editing by Rosalind Russell)

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Three killed as Egyptian soldiers, residents clash over land

CAIRO (Reuters) - Three people were killed and 12 injured in a firefight between soldiers and armed residents over a disputed island in the Nile west of Egypt's capital Cairo, a security source said.

An army statement said the authorities were clearing the island, which the army says it owns and is a centerpoint for its operations to keep Cairo secure, after armed-residents raided it on Friday night forcing guards out.

Residents exchanged fire with security forces from buildings overlooking the island, at Giza, injuring four soldiers.

Many cases of illegal building on or usage of land owned by the government took place in the security vacuum following the popular uprising that toppled Hosni Mubarak last year. A new Islamist-led government is trying to restore order.

Such campaigns to remove residents claiming land rights are often carried out by police, and have been met with resistance. However, incidents of firing at soldiers are very rare.

Twenty five locals were arrested by the army. Their families have blocked a main road adjacent to the Nile demanding their release.

(Reporting by Tamim Elyan; Editing by Alison Williams)

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Exclusive: Video shows Nigerian troops shooting captives

KADUNA, Nigeria (Reuters) - A video obtained by Reuters shows Nigerian troops shooting unarmed captives in broad daylight by the roadside in the northeastern city of Maiduguri, the bastion of an Islamist insurgency.

Nigeria's military has long been accused of human rights abuses, including summary executions, in the troubled north but there has been no video proof since the first crackdown on the Islamist sect Boko Haram in 2009.

A spokesman for the army said it was "impossible" for Nigerian troops to do such a thing.

Boko Haram is fighting to carve an Islamic state out of Nigeria, and its fighters have killed hundreds in bomb and gun attacks, many of them from the security forces, since beginning the uprising three years ago.

The video was taken by a soldier who said he was present while the shootings took place two weeks ago. The soldier, who requested anonymity, passed it to Reuters on Sunday.

In the grainy footage, a man sits down next to three or four corpses piled together on the roadside. He pleads for his life while soldiers shout at him and a crowd looks on a few meters away. "Please don't fire," the man says in pidgin English.

He tries to stand up and get onto the back of a pick up truck to the left. A Nigerian soldier shouts "come out", and drags him off it, shoving him on the ground.

One of them kicks him in the head. Then he and another soldier aim assault rifles at him. Four gunshots are heard and the man lies still next to the others.

Nigerian army spokesman Colonel Mohammed Yerima said he had not seen the video but that the events must have been staged.

"How can they do that? It is not possible. This is the Boko Haram tactics," He said. "They will do the killing, say it's the military and then Amnesty International and so on will blame us. It's not possible for Nigerian troops to act in this way."

Nigerian forces have repeatedly denied accusations of such abuses, saying the only times they kill suspected militants is during combat. Those captured are questioned or freed, they say.

U.S. Assistant Secretary of State for Democracy, Human Rights and Labour Michael Posner said on Friday that the United States was seriously concerned by reported abuses committed by Nigerian security forces in their efforts to quell the insurgency.

Such alleged abuses usually occur shortly after members of the security forces have been killed or wounded in an attack by the sect. The killings in this video happened after a bomb attack on a military patrol further up the road, the soldier who provided the footage said.

Another video from the same source, which he said was taken after the executions, shows soldiers piling up about two dozen bodies in two bloody heaps on the ground from the back of a military truck.

The videos could spur renewed calls for Nigeria's security forces to change their approach to the insurgency, which critics say is prompting desperate, angry youths to join Boko Haram and encouraging the northern population to shelter them.

That uprising was sparked by a military crackdown on the sect in which hundreds were killed, including its founder and spiritual leader Mohammed Yusuf, who died in police custody.

President Goodluck Jonathan has been accused of treating the conflict as a security problem that can be solved with force alone, rather than addressing the root causes of the insurgency.

Amnesty International issued a report this month in which it said human rights abuses committed by security forces were fuelling the conflict they were meant to end.

The report said a "significant number" of people accused of links with Boko Haram had been executed after arrest without due process, while hundreds were detained without charge or trial and many of those arrested disappeared or were later found dead.

The Nigerian military rejected that report, including accusations that they execute suspects, as "biased and mischievous."

(Writing by Tim Cocks; editing by David Stamp)

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Bomb kills Afghan family including hours-old baby

KABUL (Reuters) - A roadside bomb killed a family of six, including a baby born just hours before, in eastern Afghanistan on Sunday, local officials said.

The family was leaving a maternity hospital in Khost province in a pick-up truck when the bomb exploded, said a statement from the office of the provincial governor.

"A pregnant woman was taken by her family to a hospital last night at 10 p.m, and they were making their way home in the morning with their newly born baby when the bomb hit," said Zarmaeed Mokhlis, governor of Khost's Sabari district.

In southern Helmand province, a roadside bomb killed three and wounded two members of one family on their way to a wedding, hospital officials in the provincial capital Lashkar Gah said.

Roadside bombs are by far the deadliest weapon deployed by Taliban insurgents in the war against NATO and the government of President Hamid Karzai, and they have become grimly more powerful over recent years.

A Taliban spokesman said the group was aware of the Khost incident, but could not immediately confirm or deny involvement.

Civilians bear the brunt of the violence in the war, now in its 11th year. Last year, the number of civilians killed rose for the fifth straight year to more than 3,000, according to the U.N.

(Reporting by Mirwais Harooni, Writing by Amie Ferris-Rotman; Editing by Ron Popeski)

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Greeks angered by "princes of parliament" pay fight

ATHENS (Reuters) - When Greece's government pushed through a law last week aimed at slashing public wages and raising taxes, its biggest threat was not the firebrand opposition or the 100,000 protesters thronged at the gates of parliament.

It was the assembly's workers themselves, a well-connected group that has long evoked disdain for enjoying the kind of lavish pay and benefits that have become emblematic of the public sector excess at the heart of Greece's debt crisis.

The staff dispute that image. But, having discovered that a 500-odd page draft law of cost cuts and tax hikes included a last minute amendment giving the finance ministry oversight over parliamentary pay, dozens of clerks walked off the job.

"Thieves!" they shouted at parliamentarians as they blocked the doors to the chamber, according to a witness, who saw some workers try to hit journalists who were filming them.

Police rushed to lock the door to the basement after a group threatened to shut off the power main.

The walk out briefly halted debate on the bill required for Greece to avoid bankruptcy and forced Finance Minister Yannis Stounaras to back down, a feat thousands of furious demonstrators in the rain outside had failed to achieve.

It triggered outrage among lawmakers and media, who ran headlines reading "Shame!" and complained most of the staff, unsackable under the constitution, were friends or family of politicians benefiting from an anachronistic patronage system.

Greek liberal daily Ta Nea dubbed them "The Princes of Parliament" and called for widespread dismissals among the almost 1,300 staffers.

"The party is over. The politicians have the responsibility to clean the Augean Stables they have created," the newspaper wrote in a front-page editorial, referring to the dirtiest of Hercules's 12 legendary labors in which he diverted a river to wash the manure from the stalls of 1,000 divine cattle.

In August, Conservative New Democracy MP Byron Polydoras struck a nerve when, appointed parliament speaker for just one day after an inconclusive May election, he made his daughter a permanent employee in his office, a position immune to firing.

The chamber's workers outnumber Greece's 300 deputies by more than four to one. By comparison, Britain's House of Commons has around 1,830 for its 646 lawmakers, a ratio of 2.8 to one.

PERKS

Newspapers cataloged perks enjoyed by the clerks, lawyers, legal experts, messengers, and others in parliament's halls.

Besides public sector pensions, the lists included benefits such as 16-monthly salaries and huge one-off bonuses upon retirement.

The legislature's staff, however, tells a different story. According to Panagiotis Politis, president of the parliament workers' association, his salary has been cut by 50 percent, in line with cuts seen across Greece's public sector.

"We used to get the 16 monthly salaries, election bonuses and so on. But all this has been cut... I have 25 years experience and I get 1,040 euros a month, net," he said.

"What's happening with the media is absurd. By attacking us they are targeting the political system... We can't go out with our children and our spouses in society."

A finance ministry official said Stounaras would resubmit the amendment in an effort to eliminate all bonus schemes within the state system. Politis said the assembly's workers would it block again.

He fears it could threaten the last uncut benefits - overtime payments worth up to 500 euros a month and a 60-salary retirement bonus that could amount to 150,000 euros or more for workers with 30 years experience.

"Of course we don't agree with cutting our retirement bonuses. This is our money," he said, explaining they were partially funded by monthly contributions from workers.

"If they bring it back in the same way, we will stop it...Maybe more forcefully this time."

($1 = 0.7868 euros)

(Additional reporting by Karolina Tagaris and Renee Maltezou; editing by Anna Willard)

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Strong quake in central Myanmar kills at least six

YANGON (Reuters) - An earthquake struck central Myanmar on Sunday near its second-biggest city, Mandalay, killing at least six people, with the death toll likely to rise as part of an unfinished bridge fell into the Irrawaddy River and several workers were missing.

The earthquake, put at magnitude 6.8 by the local meteorological service, struck around 60 km (37 miles) northwest of Mandalay near the town of Shwebo at 7:41 a.m. (0111 GMT), and was quite shallow at around 10 km (6 miles) deep.

A police officer in Shwebo said two people had died and 20 had been injured in nearby Kyauk Myaung.

"A house collapsed in Kyauk Myaung. The Radana Thinga Bridge, still under construction, over the river was badly damaged. A huge steel beam fell into the river and five workers went missing," he told Reuters.

State television, the usual mouthpiece for government statements in Myanmar along with state-run newspapers, said 15 people from the bridge construction site were missing.

It gave no death toll but said a number of religious buildings and pagodas had been destroyed or damaged.

Media in Myanmar reported minor damage in several places around Mandalay, including Amarapura, a town popular with tourists because of its monasteries and the longest teak bridge in the world. Pagodas had been damaged there, media said.

One local source who declined to be named said at least 10 people were trapped in a gold mine in the Singgu area, where there are many small-scale mines.

A police officer in Singgu Township opposite Kyauk Myaung on the east side of the Irrawaddy told Reuters that four people had died there and another nine were injured in the earthquake.

"Those injured are not in a critical condition. We are still monitoring the damage and casualties in the environs," he said.

Several strong aftershocks hit the region, including one put at magnitude 5.8 as evening approached at 5:24 p.m. (1054 GMT).

The United Nations' Office for the Coordination of Humanitarian Affairs in Myanmar said the first quake was also felt in Thailand, Laos and Yunnan province in China.

"Information available at this stage indicates that the event did not result in serious damage," it said in a statement.

Myanmar is among Asia's poorest countries.

A quasi-civilian government has opened up the country since taking over in March 2011 from the military, which had ruled for nearly 50 years.

The military regime was condemned by humanitarian agencies in 2008 for initially refusing international help to cope with Cyclone Nargis, which killed more than 130,000 people.

President Barack Obama is set to become the first U.S. leader to visit Myanmar this month, the strongest international endorsement of the country's fragile democratic transition.

Obama will travel to Myanmar during a November 17-20 tour of Southeast Asia that will also take in Thailand and Cambodia. It will be his first international trip since winning a second term last week.

(Additional reporting by Thin Lei Win in Bangkok; Writing by Alan Raybould; Editing by Ron Popeski)

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Israel fires warning shots at Syria over Golan shelling

JERUSALEM (Reuters) - Israeli forces fired into Syria on Sunday in what the military called a warning, after stray munitions from fighting between Syrian troops and rebels hit the Israeli-occupied Golan Heights.

The incident, described by Israel Radio as the first direct engagement of the Syrian military on the Golan since the countries' 1973 war, highlighted international fears that Syria's civil war could ignite wider regional conflict.

An Israeli security source said the military fired in the direction of a Syrian army mortar crew that had launched a shell which overshot the Golan disengagement fence on Sunday, exploding near a Jewish settlement without causing casualties.

In a statement, the Israeli military said soldiers had "fired warning shots towards Syrian areas".

"The IDF (Israel Defence Force) has filed a complaint through the UN forces operating in the area, stating that fire emanating from Syria into Israel will not be tolerated and shall be responded to with severity," the statement said.

There was no immediate comment from the 1,000-man United Nations Disengagement Observer Force which patrols the area.

Spillover violence this month from Syria onto the Golan has jangled the nerves of Israelis worried that the once-quiet front will add to threats facing the Jewish state from Islamic militants in neighboring Lebanon, Gaza and Egypt's Sinai.

There have been similar worries in Turkey, Jordan and Lebanon about incidents on their own borders with Syria, where forces loyal to President Bashar al-Assad have been battling rebels for 19 months.

"WE WILL RESPOND"

Interviewed by Israel's Army Radio earlier on Sunday, Defence Minister Ehud Barak was asked about public warnings he and another senior official issued to Assad last week to rein in Syrian sweeps against rebels near the Golan.

"The message has certainly been relayed. To tell you confidently that no shell will fall? I cannot. If a shell falls, we will respond," Barak said, without elaborating.

Prime Minister Benjamin Netanyahu, also speaking before Sunday's mortar strike on the Golan, told his cabinet that Israel was "closely following what is happening on our border with Syria .. and (is) prepared for any development".

Israel captured the Golan in the 1967 Middle East war and annexed the strategic plateau in 1981, a move not recognized internationally. In all past peace talks with Israel, Syria has insisted on the Golan's return.

The two countries signed a disengagement agreement in 1974, a year after another Arab-Israeli conflict, and though they are still technically at war the Golan had been mostly quiet since.

Another Syrian mortar bomb, one of a salvo, struck a Golan settlement on Thursday but did not explode. Separately, Israel complained to the United Nations this month after three Syrian tanks entered the Golan demilitarized zone, and said one of its army jeeps had been hit by Syrian gunfire. No one was hurt.

Israel has tried to stay out of the insurgency next door, reluctant to be drawn into another war and unclear about whether a post-Assad Syria might prove more hostile.

But Barak has said he hopes the rebels will win, Assad will fall and "a new stage in the life of Syria will begin".

Israel's military chief, Lieutenant-General Benny Gantz, warned troops on the Golan Heights a week ago: "This is a Syrian issue that could become our issue."

(Writing by Dan Williams; Editing by Douglas Hamilton and Jason Webb)

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In first, Irish PM lays wreath for British war dead

BELFAST (Reuters) - Ireland's prime minister laid a wreath to honor fallen soldiers at a British Remembrance Day service for the first time on Sunday, the latest gesture of reconciliation between historic foes.

Annual Remembrance Day services to honor Britain's war dead and the wearing of the traditional poppy are controversial in Ireland because of abuses committed by soldiers in Northern Ireland and during British rule in Ireland before independence.

Enda Kenny took part in a service in Enniskillen in Northern Ireland on the 25th anniversary of the Irish Republican Army bombing of a Remembrance Day service in the town that killed 12 people, one of the worst atrocities of three decades of sectarian violence.

He stood head bowed during two minutes of silence before taking his turn to lay a wreath on the war memorial yards from the spot where the IRA bomb exploded in 1987.

His green laurel wreath laid on behalf of the Irish Government stood out among wreaths of red poppies. He did not wear a poppy.

The gesture came a year after a visit by Queen Elizabeth to Ireland, the first by the British sovereign since independence.

During the visit, the Queen laid a wreath in the Garden of Remembrance in Dublin to honor those Irish men and women who died fighting for Irish freedom from British rule.

Also on Sunday, Deputy Prime Minister Eamon Gilmore became the first Irish minister to attend a Remembrance Day service at Belfast City Hall, laying a wreath at the city's cenotaph.

Tens of thousands of Irish soldiers fought for Britain in both world wars, but they receive relatively little recognition in Ireland, which took advantage of World War One to fight British rule and remained neutral during World War Two.

With relations with Britain the warmest for decades, the Irish government in June pardoned thousands of servicemen who deserted to fight for the Allied forces during World War Two.

During more than 30 years of violence in Northern Ireland when more than 3,600 people died, the participation of an Irish leader in a Remembrance Day ceremony would have been unthinkable.

The violence was largely ended by the Good Friday Agreement in 1998 which set up a power-sharing administration between unionists, who want to maintain Northern Ireland's position in the United Kingdom, and nationalists, who aspire to a united Ireland.

(Reporting by Ian Graham and Conor Humphries; editing by Jason Webb)

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Israel says may escalate as Hamas joins Gaza clashes

GAZA/JERUSALEM (Reuters) - Israel said it was poised to escalate attacks on the Gaza Strip on Sunday following a surge of rocket and mortar salvoes by Hamas and other Palestinian factions.

A missile strike wounded four Israeli troops on jeep patrol along the Gaza boundary on Saturday, triggering army shelling that killed four Palestinian civilians and, in turn, dozens of short-range rocket launches out of Gaza that paralyzed Israel's southern border towns.

Two Gaza militants died in the ensuing Israeli air strikes. Two workers were wounded later when a plastics factory in northern Gaza Strip caught fire after it was hit by an Israeli tank shell, emergency workers said.

Israel's Iron Dome defense system knocked out a longer-range "Grad" rocket that was aimed at the southern city of Beersheba, the army said.

Thousands of Palestinians marching in the funerals of six people killed in the past 24 hours cried: "Revenge, revenge". One man said an Israeli tank fired at children then fired on adults who rushed to the scene.

The Israeli military said the tank had shot back at the spot where shortly before militants had fired an anti-tank missile at the army patrol. "It is very unfortunate that these terrorists use their own people as human shields," said Major Arye Shalicar, a spokesman for the Israeli Defense Forces (IDF).

Israel went to war against Hamas in the winter of 2008-2009 but has shown little appetite for a new round that could strain fraught relations with the new Islamist-rooted government in neighboring Egypt, which made peace with Israel in 1979.

But conservative Prime Minister Benjamin Netanyahu may be reluctant to seem weak ahead of a January 22 general election that opinion polls currently predict he will win.

"The world needs to understand that Israel will not sit with arms crossed when faced by attempts to hurt us. And we are prepared to harshen the response," Netanyahu told his cabinet in remarks aired by Israeli broadcasters.

After not openly taking part in Saturday's fighting, which included the firing of dozens of Palestinian short-range rockets and mortar bombs, Hamas issued a joint statement with five other factions claiming responsibility for Sunday's fresh salvoes.

ON THE FENCE

Though hostile to the Jewish state, Islamist Hamas has in the past avoided clashes as it consolidates its Gaza rule and convince Egypt's new rulers it can be a stabilizing force.

Israeli officials have at times noted Hamas's efforts to impose calm in Gaza, which it has governed since 2007, and maintain a policy of holding it solely responsible for any violence from the coastal territory, whoever is firing.

Four Israelis were wounded by rockets on Sunday, a military spokeswoman said. Southern Israeli municipalities ordered residents to shelters and shuttered some schools.

Islamic Jihad, a smaller faction than Hamas which often operates independently, said one rocket crewman was killed by an Israeli air strike on Sunday, after another member was killed on Saturday while photographing the fighting.

Defence Minister Ehud Barak, a centrist in Israel's coalition government, played down speculation that the upcoming election was affecting Gaza policy.

"I don't think the election should be a consideration in how we respond. It is not meant to make us avoid action ... nor is it meant to provoke us into grabbing some kind of opportunity for an operation," Barak told Israel's Army Radio.

The 2008-2009 Gaza coincided with an election campaign and some Israeli analysts see the same dynamics building.

Barak described Saturday's jeep ambush as part of a Palestinian strategy of raising the cost of Israel's countermeasures against cross-border infiltration. Israeli forces often mount hunts for tunnels and landmines on the inside of the Gaza boundary, creating a no-go zone for Palestinians.

"Of course we don't accept their attempt to change the rules," Barak said. "The essence of the struggle is over the fence. We intend to enable the IDF to work not just on our side but on the other side as well."

Palestinians said four of Saturday's dead were civilians hit by a tank shell while paying respects at a mourning tent in Gaza's Shijaia neighborhood. Israel denies targeting civilians.

(Writing by Dan Williams; Editing by Crispian Balmer, Douglas Hamilton and Jason Webb)

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Attacker in Afghan army uniform kills NATO soldier

KABUL (Reuters) - An attacker wearing an Afghan army uniform killed a member of the NATO-led International Security Assistance Force (ISAF) in the south of Afghanistan on Sunday, the force said.

At least 57 members of ISAF Have been killed in so-called insider attacks this year, undermining trust between coalition and Afghan forces as NATO prepares to withdraw most combat troops by the end of 2014.

"An individual in an Afghan National Army uniform turned his weapon against ISAF service members, killing one," an ISAF spokesman said, declining to give the victim's nationality.

(Reporting by Daniel Magnowski; Editing by Andrew Heavens)

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