Hamas looks to root out Israel's spy networks

By Nidal al-Mughrabi

GAZA (Reuters) - The alleged spy buried his face in his hands inside a Gaza jail as he admitted passing intelligence to Israel during its battles with armed Palestinian groups.

"My handlers in Israel called me and told me that collaborators in Gaza don't know one another and that each worked alone, so hide and stay as you are," the man told visiting reporters, under the watchful eye of a plainclothed Hamas security officer.

"I should have turned myself in. This is my problem now. Maybe if I had, you wouldn't find me here," he said.

The Islamist Hamas government, which is pledged to Israel's destruction by force of arms, is lauding a recent campaign to root out informants in its midst, which it hopes will deprive Israel of a subtle but effective tool.

The muscular 41-year-old, who did not give his name, missed the deadline to turn himself in and will not receive leniency when his case goes to trial, Hamas says. Fellow prisoners listened to his anguish over his unknown fate through metal windows in the concrete corridor.

The Hamas Interior Ministry says the month-long campaign which ended on April 11 was a policy shift away from harsher tactics against spies accused of passing on vital information, such as the whereabouts of arms' depots or top militants.

These tip-offs are believed to have helped Israel plan its air strikes during the eight-day conflict with Hamas last November, when Israeli jets hit some 1,450 targets, killing more than 170 Palestinians, including many civilians.

The militant group used to broadcast chilling confessions of collaborators and put the worst offenders to death.

In scenes that shocked the world, seven suspected spies were yanked from Hamas custody in Gaza during the November conflict and shot dead in the street. One corpse was dragged by motorbike through Gaza city by pistol-waving men shouting, "God is Great."

But in this latest campaign, publicized through billboards and mosque sermons, Hamas's Internal Security Service (ISS) promised to treat those who surrendered of their own volition gently.

The campaign, Hamas says, was meant to bring wayward citizens back into the fold and counter through persuasion the espionage it says Israel gains through manipulation.

"We've made a media and educational effort to inform the Palestinian public about collaboration...the worst and most dangerous tool the occupation (Israel) uses against our people," said Mohammed Lafi, the deputy ISS chief who led the campaign.

He declined to reveal how many Gazans had stepped forward, saying such information would benefit Israel. In all, Hamas says only "tens" of spies are languishing behind bars.

ISRAEL RECRUITS

Collaboration with Israel is widely reviled by Palestinians, who see spies as traitors to their people.

"Do they feel mercy for the kids who get torn into pieces and to leaders whose bodies are burnt to death? Why should I feel mercy for him?" said Huda Adel, an office secretary, voicing sentiments shared by many Gaza residents.

Locals often refuse to marry their sons or daughters to relatives of convicted or dead collaborators.

"It's horrifying how your life can turn into hell in a blink of an eye," the brother of a jailed alleged spy told Reuters, taking deep drags from his cigarette.

Sitting nervously in a Gaza cafe, the man said many people shunned his brother's family when rumors of his deeds spread.

"Will his daughter marry? Will anyone accept to marry his boy?" the brother worried.

Minister of Interior Fathy Hammad said Hamas's new policy aimed to emphasize that spying was an individual act and offered anonymity to anyone who handed themselves in to avoid the inevitable backlash from their neighbors.

"As a community we should support the family whose household fell to the devil," Hammad told Reuters.

Many confessed spies say they were offered coveted Israeli permits to move in and out of the crowded coastal enclave, which struggles under tight restrictions from neighboring Israel and Egypt. Others were in Israeli custody and agreed to become spies in exchange for commuted sentences.

Rights groups say Israel also tries to force Gazans in need of outside medical treatment to become spies.

Others simply sought cash, feeding information via secret cell phone chips or coded emails.

A senior Israeli official told Reuters the informants were necessary because "Israel faces a very real threat from Gaza, as Hamas regards every Israeli civilian as a legitimate target".

Israel pulled its troops and settlers from the territory in 2005 but has come under regular rocket attack since then. In response, it imposed a stringent blockade on Gaza and has waged two short wars in a stated effort to stop the missiles.

The official called the Hamas government a "Stalinist authoritarian regime" whose measures against suspected spies amounts to "brutal and arbitrary violence against the people of Gaza, using collaboration charges as an excuse".

FEAR AND FAVOUR

Since taking power in 2007, Hamas authorities have executed 14 people, including six convicted spies. Hammad said his ministry reserved the right to execute more spies in future.

Hamas's political rival, the Palestinian Authority which has partial control over the nearby, occupied West Bank, also comes down heavily on alleged spies. Last week, a member of the Palestinian security forces was condemned to death for being a collaborator, although his sentence will almost certainly be commuted to life in jail.

Human Rights Watch said the amnesty plan was an improvement to Hamas's usual legal practice, which it says often involves incommunicado detention and evidence extracted through torture.

"Steps by Hamas to provide an alternative to the detention and trial of alleged collaborators should be encouraged given the severe problems with its justice system," senior HRW researcher Bill Van Esveld told Reuters.

ISS deputy head Lafi, for the first time disclosing details on its jailing policy on convicted spies, said most of those already in jail whose crimes were not serious would be freed after serving two-thirds of their sentences.

The offer will not spare veteran spies, and those whose work led to the killings in Israeli bombing raids or assassinations of militant leaders, Hamas said.

But with almost one third of Gazans unemployed and 80 percent of households living below the poverty line, local NGOs believe some young Gazans will continue to be drawn to espionage in return for Israeli cash, regardless of Hamas crackdowns.

"The Gaza government should treat some of the reasons why Israel's security forces manage to get through to victims, such as poverty," said Samir Zaqout of the al-Mezan Center for Human Rights, which is based in Gaza's Jabalia refugee camp.

(Additional reporting by Noah Browning; Editing by Sonya Hepinstall)

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Kurdish rebels begin withdrawal from Turkey

By Ayla Jean Yackley

SEMDINLI, Turkey (Reuters) - Kurdish militants began to withdraw from Turkey on Wednesday, pursuing a peace process meant to end a three-decade insurgency that has killed 40,000 people, ravaged the region's economy and tarnished the country's image abroad.

Turkish security forces manned checkpoints along the mountainous border with Iraq, keeping watch as the agreed pullout started by the first small groups of up to 2,000 Kurdistan Workers Party (PKK) fighters.

The withdrawal, ordered late last month by top PKK commander Murat Karayilan, is the biggest step yet in a deal negotiated by the group's jailed leader Abdullah Ocalan with Turkish officials to end almost 30 years of conflict.

The PKK has accused the army of endangering the pullout with reconnaissance drones and troop movements they said may trigger clashes. But there was no sign of military activity in the grey skies over southeast Turkey.

"I can say the withdrawal began today based on the information we have," pro-Kurdish Peace and Democracy Party (BDP) co-leader Gultan Kisanak told Reuters. "Local sources report that the armed PKK militants are on the move."

Security sources did not confirm the withdrawal. Fighters are accustomed to moving furtively and are expected to move in groups of around half a dozen in a process likely to take several months.

"We have observed movement among (PKK) group members, but have not been able to establish whether this is regrouping or preparation for a withdrawal," a security source told Reuters.

The PKK force is small but dogged, with 3,000-4,000 fighters based in Iraq and 1,500-2,000 in Turkey, where they have targeted Turkish troops as well as bombed cities including Istanbul and beach resorts.

The withdrawal will be monitored on the Turkish side by the MIT intelligence agency and across the border by the Kurdish regional government of northern Iraq.

The first fighters were expected to arrive at PKK bases in northern Iraq within a week.

But a PKK commander for the Semdinli area told a local source that guerrillas were unable to cross into Iraq because of increased security, including new checkpoints and soldiers deployed on mountainsides.

On the road to Semdinli, where the PKK launched their insurgency with an attack on August 15, 1984, soldiers and police appeared to be mostly waving regular traffic through.

"I think this is our best chance yet for peace. On the front line, both sides want the bloodshed to stop," said a 30-year-old sergeant among a group of soldiers drinking tea behind a row of sandbags at a checkpoint.

HUGE GAMBLE

Prime Minister Tayyip Erdogan has taken a huge gamble with the process, attracting a nationalist backlash before elections next year as he seeks to end a conflict which has put a huge burden on state coffers and tarnished Turkey's image abroad.

The PKK, designated a terrorist organization by Turkey, the United States and European Union, said in a statement on Wednesday the Turkish military had bombarded areas around Semdinli with artillery and mortars on Tuesday.

It has reported a series of similar barrages in recent days, but there have been no reports of casualties. Turkey has pledged to maintain the fight against the PKK until they disarm, but Erdogan said they will not be targeted during the pullout.

Few areas have been scarred by the conflict more than Semdinli, accessible by a single road that cuts through emerald-green valleys and snowcapped mountains, and which witnessed the deadliest clashes in more than a decade last year.

"This town has never known normalcy. It has always been in the cross-hairs of war," said 30-year-old Mayor Sedat Tore. He does not remember a time in his life without the violence.

"May 8 represents an enormous opportunity to finally silence the guns. The people don't understand this process fully, but they are hopeful. They are searching for even the smallest ray of light at the end of the tunnel," he said.

Erdogan reiterated a call for the rebels to disarm before leaving. The PKK has rejected this, fearing they could come under attack, as they did in a previous pullback.

"They surely know the routes from which they have entered Turkey and can use the same routes to leave," Erdogan told reporters on Tuesday.

Karayilan has warned that PKK fighters will retaliate if the Turkish army launches any kind of operation against them.

Hugh Pope, Turkey project director for the International Crisis Group, said the withdrawal's significance was symbolic as the fighters will not have disarmed and could return, with the acid test being an absence of clashes to build confidence.

"This is the most promising peace process we've seen," he said. Success, he added, would require a series of reforms to promote reintegration including anti-terrorism laws and Kurdish language education, and amendments to parts of the constitution.

(Additional reporting by Gulsen Solaker in Ankara and Seyhmus Cakan in Diyarbakir; Writing by Daren Butler; Editing by Nick Tattersall and Mark Heinrich)

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Bangladesh braces for unrest as judges prepare war crime verdict

By Serajul Quadir

DHAKA (Reuters) - A Bangladeshi war crimes tribunal is due to pronounce judgment on a top Islamist politician on Thursday, raising fears a guilty verdict could ignite a fresh round of clashes between members of his party and security forces.

Bangladesh, reeling from a factory collapse that killed more than 700 people two weeks ago, is navigating one of its most turbulent periods since independence as a series of political conflicts converge ahead of elections due early next year.

Protests over the war crimes trials are one of the main challenges facing the government of Prime Minister Sheikh Hasina, who opened an inquiry into abuses committed during a 1971 war for independence from Pakistan in 2010.

The tribunals have angered Islamists who say they are a politically-motivated attempt to persecute the leadership of Jamaat-e-Islami, the main Islamist party in Bangladesh and a key part of an opposition coalition.

Bangladesh became part of Pakistan at the end of British colonial rule in 1947. The independence war claimed about 3 million lives. Thousands of women were raped.

Some factions in Bangladesh opposed the break with Pakistan, including Jamaat. Its leaders have denied involvement in abuses.

On Thursday, judges are due to hand down a verdict in the trial of Muhammad Kamaruzzaman, a leader of Jamaat who is accused of involvement in the murder and torture of several civilians.

Syed Haider Ali, the lead government prosecutor, said he expected the court would sentence Kamaruzzaman to death.

"On the basis of our arguments we are hopeful of getting the highest punishment," Ali told reporters.

Kamaruzzaman was arrested in a separate criminal case in July, 2010, and was charged with war crimes the following month. He has pleaded not guilty through his lawyers.

Dozens of people have been killed in clashes between security forces and protesters opposed to the tribunal since the first guilty verdict was delivered in January. Kamaruzzaman's judgment will be the fourth since the trials began.

The tribunal has been criticized by rights groups for failing to adhere to international standards. Human Rights Watch said lawyers, witnesses and investigators reported they had been threatened.

In a separate challenge to Hasina's government, tens of thousands of members of the hardline Islamist Hefajat-e-Islam movement massed in the capital Dhaka this week to demand the imposition of a new blasphemy law.

At least 20 people were killed in some of the worst violence seen in the city in decades when police used water cannons to disperse the gathering.

The Bangladesh Nationalist Party, the main opposition party, has also turned up the heat on Hasina's secular Awami League government by calling a series of strikes to demand she resign.

Bangladesh has been rocked by protests and counter-protests linked to the tribunal since January, when it handed down its first sentence by condemning an expelled Jamaat member to death. In the second case, a Jamaat leader was given life in jail.

About 60 people have been killed in protests since the tribunal's third conviction in March, when another member of Jamaat, Delwar Hossain Sayedee, 73, was sentenced to death for abuses including murder and rape during the war.

Jamaat and the BNP both accuse the prime minister of using the tribunal to persecute them. The government denies that and says justice must be served.

(Editing by Matthew Green and Andrew Heavens)

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U.S., Russia seek new Syria peace talks; rebels skeptical

By Arshad Mohammed and Erika Solomon

MOSCOW/BEIRUT (Reuters) - Russia and the United States agreed to seek new peace talks with both sides to end Syria's civil war, but opposition leaders were skeptical on Wednesday of an initiative they fear might let President Bashar al-Assad hang on to power.

Mindful the conflict may be far from over, Britain has urged fellow European Union states to lift an arms embargo, arguing it would strengthen those rebel groups favored by Western powers.

Visiting Moscow after Israel bombed sites near Damascus and as President Barack Obama also faces renewed calls to arm the rebels, U.S. Secretary of State John Kerry said late on Tuesday that Russia agreed to work on a conference in the coming weeks.

An East-West disagreement that has seen some of the frostiest exchanges between Washington and Moscow since the Cold War has deadlocked U.N. efforts to settle the Syrian conflict for two years, so any rapprochement could bring an international common front closer than it has been for many months.

Israeli air strikes, reports of the use of chemical weapons and the increasing prominence of al Qaeda-linked militants among the rebels have all added to international urgency for an end to a war that has killed more than 70,000 people.

U.N. Secretary-General Ban Ki-moon on Wednesday welcomed the announcement by Kerry and Russian Foreign Minister Sergei Lavrov.

"The Secretary-General and Joint Special Representative (Lakhdar) Brahimi have asserted from the outset their conviction that a negotiated political solution is the only way to end this prolonged and ever-deepening crisis, the U.N. statement said.

But with Syria's factional and sectarian hatreds more entrenched than ever, it is far from clear the warring parties are ready to negotiate with each other. Most opposition figures have ruled out talks unless Assad and his inner circle are excluded from any future transitional government.

"I believe the opposition would find it impossible to hold talks over a government that still had Assad at its head," said Samir Nashar of the opposition's umbrella National Coalition.

"Before making any decisions, we need to know what Assad's role would be. That point has been left vague, we believe intentionally so, in order to try to drag the opposition into talks before a decision on that is made."

In the past, the United States has backed opposition demands that Assad be excluded from any future government, while Russia has said that must be for Syrians to decide, a formula the opposition believes could be used to keep Assad in power.

Opposition members said they were concerned by comments from Kerry in Moscow, echoing Russia, that the decision on who takes part in a transitional government should be left to Syrians.

"Syrians are worried that the United States is advancing its own interests with Russia, using the blood and suffering of the Syrian people," said National Coalition member Ahmed Ramadan.

Inside Syria, where rebel groups have disparate views, a military commander, Abdeljabbar al-Oqaidi, told Reuters, "If the regime were present, I do not believe we would want to attend."

There was no immediate response from the Syrian government, which has offered reforms but dismisses those fighting it as terrorists and puppets of outside powers - the West, Turkey and Arab states opposed to Assad's ally Iran.

EU ARMS BAN

If fears of an escalation of the war are driving new peace moves, they have also set some Western powers looking again at their military options. Washington said last week it was rethinking its opposition to arming the rebels, and it emerged on Wednesday that Britain had been lobbying the EU to let it do so, too.

Several EU governments are resisting French and British efforts to get the embargo lifted, concerned the move could escalate the two-year-old conflict.

In a paper seen by Reuters, London suggested ways the ban could be amended to get arms to the National Coalition. Existing sanctions expire on June 1. With France, the other main military power in the bloc, Britain is trying to persuade Spain, Austria, Sweden and others to ease opposition to arming the rebels.

But with the prospect of the conflict spilling across a volatile region central to global energy supplies and transit routes, major powers also have, as Kerry told Putin on Tuesday, "very significant common interests" in pushing for a settlement.

"The alternative," Kerry later told a joint news conference with Lavrov, "is that Syria heads closer to an abyss, if not over the abyss and into chaos".

Both sides fear a failed state in Syria could provide a base for hostile militants willing to strike around the world.

Last June, at a conference in Geneva, Washington and Moscow agreed on the need for a transitional government in Syria, but diplomacy has foundered since then, and the mediator of the Geneva conference, former U.N. Secretary-General Kofi Annan, quit in despair, saying differences among powers were too wide.

Kerry said the conference might be held as early as this month, although no venue has been set.

Russia, backed by China, has vetoed three U.N. Security Council resolutions hostile to Assad. Alarmed at Western powers' use of a U.N. mandate to oust Muammar Gaddafi in Libya, Moscow and Beijing are wary of such interference in their own affairs.

RISK OF POWER VACUUM

Recent developments have focused minds on the risks of wider war in the Middle East.

The White House said last month that Assad's troops probably used chemical weapons - which Obama has called a "red line" that would mandate a strong, if unspecified, response. The government and rebels each accuse the other of using poison gas, a charge both sides deny. British Prime Minister David Cameron said on Wednesday there was evidence Assad's forces "continue" to use sarin gas.

But despite pleading from the opposition, Western leaders have been reluctant to weigh in by arming the rebels, especially as Islamist fighters have pledged allegiance to al Qaeda, highlighting the risk to the West that a poorly managed change of leadership in Syria could bring hostile militants to power.

Israeli air strikes in recent days - which Israeli officials said hit Iranian arms headed for Assad and Tehran's Lebanese allies Hezbollah - underlined the risk of cross-border conflict.

The violence has inflamed a confrontation between Sunni and Shi'ite Muslims in the Middle East, with Shi'ite Iran supporting Assad, and Sunni powers like Saudi Arabia backing the rebels.

Tehran warned of unforeseeable consequences if Assad were toppled and said only a political deal would avert a regional conflagration: "God forbid, if there is any vacuum in Syria, these negative consequences will affect all countries," Foreign Minister Ali Akbar Salehi said. "No one knows what will happen."

Diplomatic sources in Moscow made clear the latest push for peace was being driven by growing alarm following the Israeli air raids, the possibility of foreign arms pouring into Syria and the possible use of chemical weapons.

Moscow and Washington have also signaled they want to improve cooperation on security matters since the Boston Marathon bombings, which U.S. officials suspect was carried out by ethnic Chechens who had lived in Russia. U.S. officials said FBI chief Robert Mueller had been in Moscow on Tuesday to discuss the bombings, but gave no details.

In a further sign of Washington's efforts to improve ties with Russia, Kerry avoided any sharp public criticism of Moscow's human rights record when he met civil rights activists in the Russian capital on Wednesday before his departure.

In Syria, Internet connections and phones to the outside world were restored after a day-long blackout that officials put down to a technical fault on a cable but which opposition activists said was deliberately imposed for military operations.

(Additional reporting by Steve Holland in Washington, Suleiman al-Khalidi in Amman, Arshad Mohammed, Timothy Heritage, Alexei Anishchuk and Steve Gutterman in Moscow, and Lou Charbonneau at the United Nations; Writing by Alastair Macdonald, Timothy Heritage and Peter Graff; Editing by Will Waterman and Peter Cooney

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Analysis: Race politics may stunt reforms after Malaysia election

By Stuart Grudgings

KUALA LUMPUR (Reuters) - Malaysia's racially divisive election result has sparked a battle within the country's ruling party that is likely to slow Prime Minister Najib Razak's drive to reform the economy and roll back policies favoring majority ethnic Malays.

Najib's Barisan Nasional (BN) coalition retained power in Sunday's election in the multi-ethnic Southeast Asian nation. But the coalition lost the popular vote and turned in its worst-ever electoral performance as it was heavily abandoned by the minority Chinese and rejected by many voters of all races in urban areas.

Najib was quick to blame the outcome on the swing by Chinese voters to the opposition alliance, putting a racial interpretation on the result that has struck a chord with traditionalists in his United Malays National Organisation (UMNO).

UMNO, which dominates Barisan, now faces a leadership election in October or November that is likely to be fought between traditional and reformist wings.

"The ideological lines have been drawn within UMNO," said Khairy Jamuluddin, a reformist who heads the party's youth wing, in a posting on Twitter. "Game on."

Any major reforms are likely to be postponed until the leadership is decided, although Najib has said he will push for national "reconciliation" and press ahead with a $444 billion economic masterplan aimed at attracting investment and doubling incomes by 2020.

Conservatives have blamed ethnic polarization and Chinese "disloyalty" while reformists have urged Najib to expand steps to make UMNO more inclusive beyond its base of poor, rural Malays.

Utusan Malaysia, a newspaper controlled by UMNO, sought to portray Sunday's election result in racial terms, with one headline saying: "What more do the Chinese want?"

Malaysia's former and longest-serving prime minister, Mahathir Mohamad, a powerful figure in UMNO, was quoted by local media as saying "ungrateful Chinese" and "greedy Malays" were to blame for the result.

"It may be the starting shot of what's to come for Najib," Oi Kee Beng, deputy director of Singapore's Institute of Southeast Asian Studies, said of conservative reactions to the result. "At the same time, I think he is their (UMNO's) best asset despite everything."

FRAUD

Najib also has to deal with a strong opposition that is claiming that Barisan won the election through fraud. On Wednesday, tens of thousands of opposition activists thronged a stadium on the outskirts of the capital Kuala Lumpur in response to a call from opposition leader Anwar Ibrahim.

"This is merely the beginning of the battle between the people and an illegitimate, corrupt and arrogant government," Anwar, a former deputy prime minister, told the crowd, many of whom wore black to symbolize mourning.

Najib, the 59-year-old son of a former prime minister, had far higher approval ratings than his party in the run-up to the election and has few obviously strong rivals to replace him.

Taking power in 2009, he staked his fortunes on reforms aimed at spurring growth, increasing transparency and dismantling affirmative action policies.

But Najib's ambitions have been curbed by conservative interests within UMNO. He has failed to come up with major steps to roll back the ethnic privileges that are seen as having benefited an elite of well-connected Malays more than the poor majority.

The government does not provide an ethnic breakdown of the population, but Malays make up about 60 percent of the 28 million people, while Chinese comprise more than 25 percent. The country also has a significant minority of ethnic Indians.

Barisan won 133 seats in the 222-member parliament, but only 47 percent of the popular vote, compared to the opposition's 50 percent.

"The polarization in this voting trend worries the government," Najib said. "We are afraid that if this is allowed to continue, it will create tensions."

But Barisan has also come in for criticism from younger voters for corruption and patronage politics that critics say have been the hallmark of its 56 years in power.

Liew Chin Tong, an opposition member of parliament from the southern state of Johor, said Najib appeared to be taking the wrong message from the election result.

"It was not just the Chinese who swung against Barisan Nasional. There were many young first-time and second-time voters who voted against the BN," he told Reuters.

Najib now looks more vulnerable to traditionalists in his party who are opposed to his tentative steps to phase out the policies that favor ethnic Malays, introduced two years after traumatic race riots in 1969.

Those policies have been a pillar of UMNO's support but have been a prime cause of ethnic Chinese and Indian alienation and investors say they stunt growth and investment in Southeast Asia's third-largest economy.

Najib's efforts to roll back these policies and other politically sensitive reforms - such as the introduction of a consumption tax to reduce Malaysia's dependence on oil revenues and lowering fuel and food subsidies to tackle a chronic budget deficit - could be put on the backburner for now.

"The outlook for direct investment will remain uncertain until it becomes clearer whether or not Najib's reform-minded policies will continue," HSBC economists said in a note after the result.

The opposition's Liew said Najib's choices of cabinet members in the coming days would be a crucial indication of whether his new government would try to appeal across ethnic groups or only to its Malay base.

"His comments on the Chinese is rhetoric," Liew said. "What we need to see is who he will include in his cabinet. Will it be made up of UMNO extremists or younger members from the middle ground? We also have to see if he will include the Chinese."

(Additional reporting by Niluksi Koswanage, Siva Sithraputhran, Anuradha Raghu and Angie Teo; editing by Raju Gopalakrishnan)

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Nigerian Islamist raid in northeast town kills 55: military

By Ibrahim Mshelizza

BAMA, Nigeria (Reuters) - Suspected members of the Nigerian Islamist sect Boko Haram armed with machineguns laid siege on the northeastern town of Bama on Tuesday, freeing over 100 prison inmates and leaving 55 people dead, the military said.

Around 200 heavily armed members of Boko Haram arrived in buses and pick-up trucks and carried out a coordinated strike, first hitting the army barracks and the police station before breaking into the town's prison, military spokesman Sagir Musa told Reuters.

Musa said 22 police officers, 14 prison officials, two soldiers and four civilians were killed, while 13 of the group's own members died, in what was one of the rebel's most deadly single strikes since a 2009 uprising.

Gunmen freed 105 prisoners during the raid which began at around 5 a.m. (0400 GMT) and lasted almost five hours, Musa said. He said some of the attackers were dressed in army uniforms.

Bama's police station, army barracks and government buildings were set ablaze, he said.

"They came in army uniform pretending to be soldiers but were able to detect them," Musa said.

Bama is a small, remote town in northeastern Borno state, Boko Haram's home state and the nucleus of its attacks.

"The call to prayer was just being said at about 5 a.m. when the Boko Haram started shooting from all directions and we ran for our lives," eyewitness Amina Usman told Reuters.

"One woman who could not run burned to death," Usman added.

The Boko Haram sect and offshoots such as the al Qaeda-linked Ansaru, as well as associated criminal networks, pose the main threat to stability in Africa's top energy producer.

Western governments are increasingly concerned about Nigerian militants linking up with other jihadist groups in the West African region.

Boko Haram wants to carve out an Islamic state in a country split roughly equally between Christians and Muslims. One of its chief demands is that its imprisoned members and family members are released and it has carried out several prison breaks.

Attacks by Boko Haram have killed more than 3,000 people since 2009, based on figures from Human Rights Watch.

Violence in Nigeria's northeast has shown no signs of abating. Clashes between Islamists and a multinational force from Nigeria, Niger and Chad killed dozens of people last month.

A senator who visited the site said 228 people were killed, but the military puts the figure at 37.

President Goodluck Jonathan has set up a committee to work out the terms of an amnesty for the rebels but their leader, Abubakar Shekau, has shown no interest in it so far.

(Additional reporting by Tim Cocks in Maiduguri; Writing by Joe Brock; Editing by Michael Roddy)

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U.S., Russia push for rapid talks to end Syria carnage

By Thomas Grove and Erika Solomon

MOSCOW/BEIRUT (Reuters) - Russia and the United States agreed to bury their differences over Syria and to try to convene international talks with both sides in the civil war to end the carnage that is inflaming the Middle East.

Visiting Moscow after Israel bombed targets near Damascus and as President Barack Obama faces new calls to arm the rebels, U.S. Secretary of State John Kerry said Russia had agreed to try to arrange a conference as early as this month involving both President Bashar al-Assad's government and his opponents.

An East-West disagreement that has seen some of the frostiest exchanges between Washington and Moscow since the Cold War has deadlocked U.N. efforts to settle the Syrian conflict for two years, so any rapprochement could bring an international common front closer than it has been for many months.

But with Syria's factional and sectarian hatreds more entrenched than ever after 70,000 deaths, it is far from clear the warring parties are ready to negotiate. There was no immediate comment from the Syrian government, which has offered reforms but dismisses those fighting it as "terrorists".

The late hour of the announcement in Moscow - Kerry was kept waiting for three hours by President Vladimir Putin - also meant leaders of the Western-backed opposition umbrella group the Syrian National Coalition were not available for comment. Many on the body have insisted Assad's exit is a condition for talks.

Inside the country, where rebel groups are numerous and have disparate views, a military commander in the north, Abdeljabbar al-Oqaidi, told Reuters he would want to know details of the U.S.-Russian plan before taking a view. "But," he added, "if the regime were present, I do not believe we would want to attend."

Alarmed at the prospect of the conflict spilling across an already volatile and economically important region, however, the major powers have, as Kerry told Putin on Tuesday, "very significant common interests" in pushing for a settlement.

"The alternative," Kerry later told a joint news conference with Russian Foreign Minister Sergei Lavrov, "is that Syria heads closer to an abyss, if not over the abyss and into chaos.

"The alternative is that the humanitarian crisis will grow. The alternative is that there may be even a break-up of Syria."

GENEVA AGREEMENT

Last year at a conference in Geneva in June, Washington and Moscow agreed on the need for a transitional government in Syria but left open the question of what would happen to Assad, whose departure Obama has called for but which Russia, accusing the West of meddling, says should be a matter for Syrians only.

Rejecting a characterization of Moscow as the protector of Assad, to whose army it has been a major arms suppliers since the days of his father's rule, Lavrov said Russia was not concerned by the fate of "certain" individuals.

"The task now is to convince the government and all the opposition groups ... to sit at the negotiating table," he said.

Kerry said the conference should be held "as soon as is practical - possibly and hopefully by the end of the month". Neither he nor Lavrov said where it might take place.

Kerry said there would be "a growing crescendo of nations who will want to push for a peaceful resolution, rather than the chaos that comes with the break-up of a country".

Kerry said the decision on who takes part in any transitional government should be left to the Syrians.

Lavrov said the aim would be "to persuade the government and the opposition together ... to fully implement the Geneva communique" on creating a transitional government.

Russia, backed by China which shares its mistrust of Western enthusiasm for toppling some autocrats, has refused appeals to consider sanctions on Assad, vetoing three U.N. Security Council resolutions condemning his crackdown on opposition groups.

ASSAD DEFIANT

Recent developments have helped focus minds on the risks of wider war in the Middle East: intelligence reports that Assad's troops may have used chemical weapons had renewed calls for Obama to arm the rebels or even offer U.S. forces; Islamist fighters pledging allegiance to al Qaeda has highlighted how some of the rebels are also hostile to the West; and Israeli air strikes said to target Iranian arms headed for Lebanon's Hezbollah have underlined the risk of escalation.

In what appeared to be another sign of the country's travails, Internet connections between Syria and the outside world were cut off on Tuesday, according to data from Google Inc and other global Internet companies.

Google's Transparency Report pages showed traffic to Google services pages from Syria suddenly stopping shortly before 3 p.m. EDT (1900 GMT). Most websites within Syria were rendered unreachable as well, other experts said, as the county appeared to shut itself off.

REBELS TAKE U.N. PEACEKEEPERS HOSTAGE

Speaking before the announcement in Moscow, Assad was quoted by a sympathetic Lebanese television channel as saying he would defy Israel, the United States and Arab powers who oppose him.

"The recent Israeli aggressions expose the extent of the complicity between the Israeli occupier, regional countries and the West in promoting the current events in Syria," he said.

"The Syrian people and their heroic army ... are capable of confronting this Israeli adventure, which represents one of the faces of terrorism that is targeting Syria every day."

While showing little desire to embroil U.S. forces in Syria after winding down engagements in Iraq and Afghanistan, Obama has rejected criticism that he might back out of a commitment to act if Assad crossed a "red line" of using chemical weapons.

On Tuesday, he pointed to the killing of Osama bin Laden and the toppling of Libyan leader Muammar Gaddafi, brought down by a U.S.-backed rebellion, as evidence that "we typically follow through on our commitments". It is still unclear if chemical weapons were used.

The chaos in Syria, where a fifth of the 25 million population has been driven from their homes, was underlined by the latest incident of rebels taking U.N. peacekeepers hostage on the ceasefire line with the Israeli-occupied Golan Heights.

U.N. Secretary-General Ban Ki-moon strongly condemned the incident and called for the four Filipinos' immediate release. They were detained as they patrolled close to an area where 21 Filipino observers were held for three days in March.

The Yarmouk Martyrs Brigade said the peacekeepers were seized for their own safety during clashes in the area.

More widely, the violence in a religiously and ethnically diverse country at the heart of the Arab and Muslim world has inflamed a confrontation between Iran and its fellow Shi'ite allies like Hezbollah on the one hand and the Sunni Arab powers, including U.S. ally Saudi Arabia, who back the Sunni rebels against Assad's Alawite minority, an offshoot of Shi'ite Islam.

Iran, at daggers drawn with Israel and the West over its nuclear program, warned of unforeseeable consequences if Assad were toppled and said only a political settlement to Syria's civil war would avoid a regional conflagration.

"God forbid, if there is any vacuum in Syria, these negative consequences will affect all countries," Foreign Minister Ali Akbar Salehi said in Jordan. "No one knows what will happen."

(Additional reporting by Steve Holland in Washington, Suleiman al-Khalidi in Amman and Arshad Mohammed, Timothy Heritage, Alexei Anishchuk and Steve Gutterman in Moscow; Writing by Alastair Macdonald; Editing by Alison Williams and Mohammad Zargham)

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China calls U.S. the "real hacking empire" after Pentagon report

BEIJING (Reuters) - China on Wednesday accused the United States of sowing discord between China and its neighbors after the Pentagon said Beijing is using espionage to fuel its military modernization, branding Washington the "real hacking empire".

The latest salvo came a day after China's foreign ministry dismissed as groundless a Pentagon report which accused China for the first time of trying to break into U.S. defense computer networks.

The Pentagon also cited progress in Beijing's effort to develop advanced-technology stealth aircraft and build an aircraft carrier fleet to project power further offshore.

The People's Liberation Army Daily called the report a "gross interference in China's internal affairs".

"Promoting the 'China military threat theory' can sow discord between China and other countries, especially its relationship with its neighboring countries, to contain China and profit from it," the newspaper said in a commentary that was carried on China's Defense Ministry's website.

The United States is "trumpeting China's military threat to promote its domestic interests groups and arms dealers", the newspaper said, adding that it expects "U.S. arms manufacturers are gearing up to start counting their money".

The remarks in the newspaper underscore the escalating mistrust between China and the United States over hacking, now a top point of contention between Washington and Beijing.

A U.S. computer security company, Mandiant, said in February a secretive Chinese military unit was likely behind a series of hacking attacks that targeted the United States and stole data from more than 100 companies.

That set off a war of words between Washington and Beijing.

China has said repeatedly that it does not condone hacking and is the victim of hacking attacks -- most of which it claims come from the United States.

"As we all know, the United States is the real 'hacking empire' and has an extensive espionage network," the People's Daily, a newspaper regarded as a mouthpiece of the Chinese Communist Party, said in a commentary.

The article -- which was published under the pen name "Zhong Sheng", meaning "Voice of China" -- said "in recent years, the United States has continued to strengthen its network tools for political subversion against other countries".

"Cyber weapons are more frightening than nuclear weapons," the People's Daily said. "To establish military hegemony on the Internet by repeatedly smearing other countries is a dangerous and wrong path to take and will ultimately end up in shooting themselves in the foot."

(Reporting by Sui-Lee Wee; Editing by Michael Perry)

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Sea cucumbers, abalone off the menu in China frugality drive

By Kevin Yao and Megha Rajagopalan

BEIJING (Reuters) - President Xi Jinping's crackdown on Chinese government extravagance has emptied top-end restaurants and dented the sale of expensive food and drink, putting downward pressure on the world's second largest economy.

High-end caterers in Beijing and other big cities have borne the brunt of Xi's austerity drive, which he launched in November in an attempt to tackle pervasive corruption and allay criticism of the lifestyles led by some officials.

As the number of lavish official banquets has dwindled, the sale of pricey delicacies such as sea cucumbers and abalone has plunged, suppliers said.

Late last month, unlisted restaurant chain Merrylin closed its flagship outlet in western Beijing - the location of central government ministries and offices.

"We had to shut down due to heavy losses. The business was difficult to maintain as the restaurant had been relying on government spending," said Zhou Guihong, a manager at Merrylin.

Some 130 workers, including Zhou, have lost their jobs. The 4,000-square-metre restaurant had 38 banquet rooms.

Xiangeqing, China's first privately owned restaurant group to go public, posted a net loss of 68.4 million yuan ($11 million) in the first quarter, in contrast to a 46.2 million yuan profit in the same period last year.

Annual sales growth of the catering sector slowed sharply to 8.5 percent in the first quarter from 13.6 percent in the whole of 2012. Sales for large caterers dipped 2.6 percent in the first quarter, compared to a 12.9 percent rise last year, official data showed.

That put a drag on China's consumption, with annual retail sales growth slowing to 12.4 percent in the first quarter from 14.3 percent over all of 2012.

A raft of data this week is also likely to show subdued factory and investment growth in April, following surveys that showed the weakness in China's manufacturing sector is spreading to the services sector, which makes up almost half of gross domestic product.

SILVER LINING?

At the same time, the frugality campaign has raised optimism of increased private consumption over the longer term, which could put China on a more sustainable economic footing.

The anti-corruption drive could cut bloated government consumption, which accounts for an estimated 15 percent of GDP, and increase state spending on underfunded social welfare systems.

This would give ordinary Chinese more confidence to spend money instead of saving large chunks of their income for medical bills and other emergencies, analysts say.

Household consumption in China is about 35 percent of GDP - the lowest among major economies and less than half of that in the United States.

"It's negative for the economy in the near term, particularly in terms of government consumption. But it could be positive in the long term," said Haibin Zhu, chief China economist at JPMorgan Chase in Hong Kong.

FEELING THE PINCH

Many high-end restaurants are now offering cheaper dishes.

Meng Kai, Xiangeqing's founder and chairman, said in February his company would shift from high-end catering to the mass market. Xiangeqing's shares have fallen by around a third since mid-January.

The catering slowdown is spilling over to gourmet food and expensive liquor and cigarettes - all mainstays at alcohol-fuelled official banquets.

Seafood wholesalers in the Fengtai district of Beijing said the price of sea cucumbers, once a ubiquitous and notoriously expensive banquet staple, had dived.

"It's because our country's leader has issued rules saying government officials cannot eat this kind of thing anymore, or give them as presents," said a wholesaler surnamed Zhu, gesturing to rows of dried sea cucumber gift boxes, which once sold for thousands of yuan each, now gathering dust on his shelves.

Eating and drinking together is an indispensable part of Chinese elite culture as business deals are usually discussed and sealed at the dining table.

Xi has made battling corruption a top task of his administration, warning the problem is so severe it could threaten the ruling Communist Party's survival.

"This is a campaign against conspicuous consumption. It will go on for the foreseeable future," said Willy Lam, a China politics specialist at the Chinese University of Hong Kong.

But Xi may have to take bolder steps to reduce the government's role in the economy - the root cause of widespread official rent-seeking and corruption, analysts say.

"This (austerity) is a good start but reforms are needed. We don't need to worry about the downward pressure on the economy," said Xu Hongcai, senior economist at the China Center for International Exchange, a government think tank. ($1 = 6.1667 Chinese yuan)

(Editing by Dean Yates)

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Assad's forces capture strategic town in southern Syria

By Suleiman Al-Khalidi

AMMAN (Reuters) - The Syrian army captured a strategic southern town from rebel fighters on Wednesday after a ferocious two-month bombardment, in an advance likely to result in President Bashar al-Assad's forces regaining control of an international transit route, opposition sources said.

The fall of Khirbet Ghazaleh, situated in the Hauran Plain on the highway to Jordan, came after a Jordanian-backed Syrian opposition military council failed to supply weapons to the town's defenders.

This raised resentment among opposition fighters over what they saw as a lack of Jordanian support for their efforts to defeat Assad's forces in the region, according to rebel commanders and activists in the area.

The Hauran Plain, which extends to the Israeli occupied Golan Heights, is the birthplace of the revolt against four decades of family rule by Assad and his late father, which erupted in the city of Deraa in March 2011.

Rebel fighters, operating under the umbrella of the Free Syrian Army, cut off the highway to Jordan two months ago. But keeping the road off-limits to Assad's forces depended on retaining Khirbet Ghazaleh, which is at a crossroads leading west to the contested city of Deraa, the sources said.

Before the uprising in Syria, billions of dollars in goods traded between Gulf countries, Turkey and Europe were transported along the highway, which passes Khirbet Ghazaleh before ending at the Nassib border crossing to Jordan.

About 1,000 rebel fighters withdrew from Khirbet Ghazaleh on Wednesday after losing hope that reinforcements would come from Jordan, which has been cautious about provoking a military response from Assad, activists and opposition fighters said.

"Assad's forces started advancing from the north and west and I can still go back to Khirbet Ghazaleh but I cannot do anything," Abu Yacoub, commander of the Martyrs of Khirbet Ghazaleh brigade, told Reuters by telephone from Hauran.

"I can get a thousand fighters back but it is useless because I don't have ammunition in my hands."

Abu Yacoub said he had contacted Ahmad Nemaah, head of the Jordanian backed military council, before ordering the rebel fighters to withdraw, but Nemaah told him he could not do anything.

"If we lost a battle it does not mean we lost for good. But everyone has turned against Nemaah," Abu Yacoub said.

Nemaah could not be reached for comment.

'BIG TRAGEDY'

"Tomorrow, the big tragedy will happen, the regime's supply route to Deraa will reopen and the officers will go back and ammunition will be resupplied and the bombardment will resume," said Abu Yacoub. "For 61 days we had choked them by controlling Khirbet Ghazaleh."

Abu Yacoub said he had lost 35 fighters in two months.

Al Mutasem Billah, an activist with the Sham News Network opposition monitoring group, said most of the rebel brigades in the south blame Jordan and the military council for the defeat.

"The council follows Jordanian Intelligence, which is more concerned about setting up a proxy unit than an effective force on the ground to take on Assad," he said.

Abu Bakr an activist in the nearby Ghweireh village said most civilians had fled Khirbet Ghazaleh but fear was growing that the remaining residents would face summary executions, similar to massacres in other towns overrun by Assad's forces.

"The people of the area are now fleeing because they fear the army will sweep across the region," he said. "The Free Syrian Army will continue to withdraw and won't face the army along the highway because they no longer have ammunition."

Hauran, which borders Jordan and the Golan Heights, has become a significant battleground as the capital of Damascus comes under pressure, with Assad's forces and loyalist militias hitting back.

The intensified fighting has also led to an influx this year of hundreds of thousands of refugees through Jordan's 370 km (230 mile) border with Syria.

The rebels say they have captured large quantities of weapons, ammunition and vehicles, which has helped them to maintain an offensive after a long period in which the southern border area was relatively quiet compared to the northern and eastern parts of Syria.

Jordan has stepped up security and deployed more troops to the border.

Diplomatic and regional intelligence sources also said Amman was allowing limited supplies of light arms to the military council, which is opposed to the Nusra front, an Islamist militant group suspected of links to al Qaeda and blacklisted by the United States as a "terrorist group."

Al-Nusra members, however, have been largely uninvolved in the Khirbet Ghazaleh fighting, activists and opposition military sources said.

(Additional reporting and writing by Khaled Yacoub Oweis. Editing by Christopher Wilson)

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North Korea missiles moved away from launch site: U.S. officials

By Phil Stewart

WASHINGTON (Reuters) - North Korea has taken two Musudan missiles off launch-ready status and moved them from their position on the country's east coast, U.S. officials told Reuters on Monday, after weeks of concern that Pyongyang had been poised for a test-launch.

U.S. Secretary of State John Kerry warned North Korea last month that it would be a "huge mistake" to launch the medium-range missiles, but the prospects of a test had put Seoul, Washington and Toyko on edge.

One U.S. official, speaking on condition of anonymity, cautioned that the missiles were still mobile and the fact that they had been moved was no guarantee they would not be set up elsewhere and fired at some point.

"It is premature to celebrate it as good news," said another U.S. official, Daniel Russel, the senior director for Asian affairs at the National Security Council.

However, a third U.S. official, also speaking on condition of anonymity, said the United States did not believe the missiles had gone to an alternate launch site and that they were now believed to be in a non-operational location.

The Musudan missiles have a range of roughly 3,000 to 3,500 kilometers (1,900 to 2,200 miles). A possible test launch, depending its trajectory, could have dramatically escalated tensions on the Korean peninsula.

North Korea's move coincided with preparations by President Barack Obama to meet South Korean President Park Guen-hye at the White House on Tuesday, where they will hold talks and have a working lunch followed by a joint news conference.

Pentagon spokesman George Little declined to comment on the status of the North Korean missiles.

"I wouldn't again comment on intelligence. But what we have seen recently is a 'provocation pause.' And we think that's obviously beneficial to efforts to ensure we have peace and stability on the Korean peninsula," Little told reporters.

The heightened tensions, including North Korean threats to attack U.S. bases in the Pacific, coincided with U.S.-South Korean military drills that Pyongyang had branded "a rehearsal for invasion." Those drills ended on April 30.

In a rare show of force during the drills, two nuclear-capable, bat-winged B-2 stealth bombers flew 37 1/2 hours from their U.S. base to drop dummy munitions on a South Korean range, and then returned home.

Asked what may have contributed to Pyonyang's latest move, Little noted various possibilities, including the fact that, North Korea's previous cycles of provocation had ended after a while.

He also noted that the Chinese government had made some helpful statements.

"We do think they (China) probably - again I can't speak for them - they probably heard very loudly from us and from others the need to ratchet it back and lower the temperature," Little said.

The White House's Russel told reporters it was too early to determine whether North Korea's apparent move away from a launch was an encouraging development.

"It's premature to make a judgment about whether the North Koreans' provocation cycle is going up, down or zigzagging," he said. "The decision to launch or not launch missiles, to conduct a provocation or to stand down or defer it, is a decision that rests with the North Koreans."

(Additional reporting by Steve Holland; editing by Christopher Wilson)

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Israel says 'no winds of war' despite Syria air strikes

By Dan Williams and Khaled Yacoub Oweis

JERUSALEM/AMMAN (Reuters) - Israel played down weekend air strikes close to Damascus reported to have killed dozens of Syrian soldiers, saying they were not aimed at influencing its neighbor's civil war but only at stopping Iranian missiles reaching Lebanese Hezbollah militants.

Oil prices spiked above $105 a barrel, their highest in nearly a month, on Monday as the air strikes on Friday and Sunday prompted fears of a wider spillover of the two-year-old conflict in Syria that could affect Middle East oil exports.

"There are no winds of war," Yair Golan, the general commanding Israeli forces on the Syrian and Lebanese fronts, told reporters while out jogging with troops.

"Do you see tension? There is no tension. Do I look tense to you?" he said, according to the Maariv NRG news website.

Israeli Prime Minister Benjamin Netanyahu came under veiled criticism in Beijing, where he began a scheduled visit in an apparent sign of confidence Syrian President Bashar al-Assad would not retaliate. China urged restraint without mentioning Israel by name.

Russia, Assad's other protector on the U.N. Security Council, said the strikes by Israel "caused particular alarm". President Vladimir Putin and U.S. Secretary of State John Kerry will meet on Tuesday to try to tackle differences over the Syrian crisis.

Israeli officials said the raids were not connected with Syria's civil war but aimed at stopping Hezbollah, an ally of Iran, acquiring weapons to strike Israeli territory.

Israel aimed to avoid "an increase in tension with Syria by making clear that if there is activity, it is only against Hezbollah, not against the Syrian regime," veteran lawmaker Tzachi Hanegbi, a confidant of Netanyahu, told Israel Radio.

MOST CASUALTIES FROM ELITE UNIT

The Syrian Observatory for Human Rights, an opposition monitoring group based in Britain, said at least 42 Syrian soldiers were killed in the strikes and 100 were missing.

Other opposition sources put the death toll at 300 soldiers, mostly belonging to the elite Republican Guards, a praetorian unit that forms the last line of defense of Damascus and includes mainly members of Assad's Alawite sect, an offshoot of Shi'ite Islam that has controlled Syria since the 1960s.

As well as the heavily fortified Hamah compound, linked to Syria's chemical and biological weapons program, the warplanes hit military facilities manned by Republican Guards on Qasioun Mountain overlooking Damascus and the nearby Barada River basin.

Residents, activists and rebel sources said the area is a supply route to the Lebanese Shi'ite militant group Hezbollah, but missiles for Hezbollah did not appear to be the only target.

Air defenses comprising Russian-made surface-to-air missiles and anti-aircraft guns on Qasioun and overlooking the rebellious Damascus district of Barzeh were also hit, they said. Their statements could not be verified due to restrictions on media.

"The destruction appeared to be massive," said one activist in Damascus, who did not want to be identified.

Russia said it was concerned the chances of foreign military intervention in Syria were growing, suggesting its worry stemmed in part from reports about the alleged use of chemical weapons in the conflict that has killed 70,000 people.

"The further escalation of armed confrontation sharply increases the risk of creating new areas of tension, in addition to Syria, in Lebanon, and the destabilization of the so-far relatively calm atmosphere on the Lebanese-Israeli border," Russian Foreign Ministry spokesman Alexander Lukashevich said.

Assad's government accused Israel of effectively helping al Qaeda Islamist "terrorists" and said the strikes "open the door to all possibilities". It said many civilians had died but there was no official casualty toll.

CALCULATING

Israeli officials said that, as after a similar attack in the same area in January, they were calculating Assad would not fight a well-armed neighbor while preoccupied with survival against a revolt that grew from pro-democracy protests in 2011.

Israel has not confirmed the latest attacks officially, but has reinforced anti-missile batteries in the north. It said two rockets landed, by mistake, on Monday, in the Golan Heights, the Israeli-occupied area near Syria's border with Israel.

"They were fired erroneously as a byproduct of internal conflict in Syria," an Israeli military spokesman said.

Syria would be no match for Israel in any direct military showdown. But Damascus, with its leverage over Lebanon's Hezbollah, could consider proxy attacks through Lebanon.

Tehran, which has long backed Assad, whose Alawite minority has religious ties to Iran's Shi'ite Islam, denied Israel's attack was on arms for Hezbollah. Hezbollah did not comment.

Moscow and Beijing have blocked Western-backed measures against Assad at the United Nations Security Council, opposing any proposal that has his exit from power as a starting point.

Allegations of the use of chemical weapons - long described by Western leaders as a "red line" that would have serious consequences - have added to regional and international tension.

After months of increasingly bitter fighting, Assad's government and the rebels have each accused the other of carrying out three chemical weapon attacks.

In Washington, an influential U.S. senator introduced a bill on Monday that would provide weapons to some Syrian rebels.

Democratic Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, said in a statement that Assad had crossed a red line and "the U.S. must play a role in tipping the scales toward opposition groups".

President Barack Obama has taken a cautious approach to the reports of the use of chemical weapons in Syria, saying he would not allow himself to be pressured prematurely into deeper intervention in the conflict.

The White House has said the Syrian government has probably used chemical weapons. A U.S. official said on Monday Washington had no information to suggest that rebels had used them.

Syria is not part of the international treaty that bans poison gas but has said it would never use it in an internal conflict. Rebels say they have no access to chemical arms.

A U.N. inquiry commission said on Monday war crimes investigators had reached no conclusions on whether any side in the Syrian war has used chemical weapons, after a suggestion from one of the team that rebel forces had done so.

(Additional reporting by Alexei Anishchuk in Moscow, Michael Martina in Beijing, Marwan Makdesi in Damascus, Jonathon Burch in Ankara and Patricia Zengerle in Washington Writing by Philippa Fletcher; Editing by Peter Graff and Mohammad Zargham)

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At least 20 dead in Islamist protests in Bangladesh

By Ruma Paul

DHAKA (Reuters) - At least 20 Bangladeshis were killed on Monday in clashes between police and hardline Islamists demanding religious reforms, as violence spread beyond the capital Dhaka to other parts of the country.

The clashes began on Sunday after 200,000 Islamist supporters marched in Dhaka to press demands critics said would amount to the "Talibanisation" of a country that maintains secularism as state policy, but they were met by lines of police firing teargas and rubber bullets.

On Monday, hundreds of protesters, many wearing white Muslim skull caps and throwing stones, re-grouped and police fired teargas, rubber bullets and water cannons to disperse them.

Protesters set fire to vehicles, including two police cars, and stormed a police post on the outskirts of the capital, police said.

Two policemen and a member of a paramilitary force were among the 13 people killed in the capital, said police official Shah Mohammad Manzur Kader.

Five more died in the southeastern city of Chittagong after police opened fire on protesters attacking their station and two were killed in Bagerhat in the south.

On Sunday, four people were killed and hundreds injured in the clashes, according to hospital officials.

U.N. Secretary-General Ban Ki-moon called on all sides to end the violence and express their views peacefully.

"The Secretary-General urges political and religious leaders to engage in constructive dialogue and help defuse the tensions," he said in a statement.

The protests are led by a group called Hefajat-e-Islam, which set the government a May 5 deadline to introduce a new blasphemy law, reinstate pledges to Allah in the constitution, ban women from mixing freely with men and make Islamic education mandatory.

The government of the overwhelming Muslim country has rejected the demands.

The clash of ideologies could plunge Bangladesh into a cycle of violence as the two main political parties, locked in decades of mutual distrust, exploit the tension between secularists and Islamists ahead of elections that are due by next January.

Bangladesh has been rocked by protests and counter-protests since January, when a tribunal set up by the government to investigate abuses during a 1971 war of independence from Pakistan sentenced to death in absentia a leader of the main Muslim party, the Jamaat-e-Islami.

Jamaat opposed Bangladeshi independence from Pakistan in the war but denies accusations that some of its leaders committed murder, rape and torture during the conflict.

The Hefajat-e-Islam emerged from the protests over the tribunal.

More than 100 people have been killed in the clashes this year, most of them Islamist party activists and members of the security forces.

The troubles have cast a shadow over economic prospects at a time when industrial accidents, such as the April 24 collapse of a garment factory complex where more than 600 people died , are raising questions about investing and buying cheap products from the country.

(Editing by Robert Birsel and Mike Collett-White)

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Bombs, mosque attack kill 17 in Iraqi capital: police

BAGHDAD (Reuters) - At least 17 people were killed by three bombs and a grenade attack on a mosque in the Iraqi capital Baghdad on Monday, medics and police said.

Unidentified assailants threw hand grenades at Sunni Muslim worshippers as they left a mosque on Monday evening, killing six people, police and medics said.

Earlier in the day, two car bombs exploded near police checkpoints at the entrance to the Shi'ite district of Hussainiya in the north of the city, killing one policeman and seven civilians.

A third bomb near a restaurant frequented by police killed three civilians in the southern district of Doura, medics and police said. At least 33 people were wounded in the three attacks.

Iraq has become increasingly volatile with fragile relations between Sunni and Shi'ite Muslims under strain from the largely sectarian civil war in neighboring Syria. Tensions are at their highest since U.S. troops pulled out of Iraq at the end of 2011.

No group immediately claimed responsibility for the blasts.

Iraq is home to a number of Sunni Islamist insurgent groups including a local al Qaeda affiliate that has launched regular attacks to undermine the Shi'ite-led government and provoke wider confrontation.

Violence is still well below the height of the country's sectarian bloodletting in 2006-07. But April was the bloodiest month since 2008, with 712 people killed in bombings and other violence, the United Nations Iraq mission said last week. About 1,500 people have been killed this year.

(Reporting by Kareem Raheem, writing by Aseel Kami, editing by Andrew Heavens)

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China reports four more bird flu deaths, toll rises to 31

BEIJING (Reuters) - Four more people in China have died from a new strain of bird flu, bringing to 31 the number of deaths from the mysterious H7N9 virus, with the number of infections rising by two to 129, according to Chinese health authorities.

Among the deaths, two occurred in the eastern province of Jiangsu; one was from eastern Zhejiang; while another was from central Anhui, based on a Reuters analysis of the data provided by Chinese health authorities on Monday.

The government did not provide more details of the victims.

Chinese health authorities said two new infections were reported in the eastern coastal province of Fujian. The virus, which was mostly concentrated in the region around the commercial capital of Shanghai, spread to Fujian in late April.

The Geneva-based World Health Organization (WHO) has said it has no evidence that the new strain of bird flu, which was first detected in patients in China in March, is easily transmissible between humans.

Chinese scientists have confirmed that the H7N9 strain has been transmitted to humans from chickens. But the WHO has said 40 percent of people infected with H7N9 appear to have had no contact with poultry.

The head of the U.S. Centers for Disease Control and Prevention said the current strain of bird flu cannot spark a pandemic in its current form - but he added that there is no guarantee it will not mutate and cause a serious pandemic.

(Reporting by Sui-Lee Wee; Editing by Michael Perry)

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India and China withdraw troops from Himalayan face off

By Fayaz Bukhari and Satarupa Bhattacharjya

SRINAGAR/NEW DELHI, Indian (Reuters) - India and China simultaneously withdrew troops from camps a few meters apart in a Himalayan desert on Sunday, apparently ending a three-week standoff on a freezing plateau where the border is disputed and the Asian giants fought a war 50 years ago.

The two sides stood down after reaching an agreement during a meeting between border commanders, an Indian army official told Reuters, after the tension threatened to overshadow a planned visit by India's foreign minister to Beijing on Thursday.

But it was not immediately clear how far China's People's Liberation Army (PLA) soldiers had withdrawn - Delhi had claimed they were 19 km (12 miles) beyond the point it understands to be the border with China, a vaguely defined de facto line called the Line of Actual Control, which neither side agrees on.

Defence and foreign ministry spokesmen did not immediately respond to requests for comment.

"Our troops have moved one kilometer backwards from the position they were on since April 16," said the officer, from the Indian army's Northern Command, which oversees the disputed region on the fringes of India's Jammu and Kashmir state.

"Chinese troops have also moved away from their position they were holding on since April 15 when they intruded in Indian territory. It is not clear yet how (far) the PLA moved back."

India considered it the worst border incursion for years.

New Delhi often appears insecure about relations with its powerful neighbor, despite slowly warming relations between Asia's largest countries. China is India's top trade partner, but the unresolved border sours the friendship.

India's opposition and much of the media has been critical of the government's handling of the standoff, drawing parallels with a 1962 war which ended in its humiliating defeat. On Friday, parliament was adjourned after members shouted "Get China out, save the country".

"YOU ARE IN CHINESE TERRITORY"

India says Chinese troops intruded into its territory on the western rim of the Himalayas on April 15. Some officials and experts believe the incursion signaled Chinese concern about increased Indian military activity in the area.

A group of about 30 Chinese soldiers, backed by helicopters, had pitched several tents near a 16th century Silk Road campsite called Daulat Beg Oldi, close to an air strip New Delhi uses to support troops on the Siachen glacier.

Each day since, Indian and Chinese soldiers and border guards left their camps and stood about 100 meters (330 feet) apart on the Depsang Plain, a 5,000 meter (16,400 feet) high desert ringed by jagged peaks of the Karakoram range.

Winter temperatures can drop to minus 30 degrees centigrade, and the area is lashed by icy strong winds all year round.

A photograph released by a source in the Indian army showed a group of six Chinese soldiers on a rock-strewn landscape holding a bright orange banner that read, in English and Mandarin, "This is the Line of Actual Control, You are in Chinese territory".

Delhi reopened the Daulat Beg Oldi airstrip in 2008. Two other runways, out of use since the war, have been opened and Daulat Beg Oldi has been upgraded since.

Siachen, at the north of the disputed region of Kashmir, is claimed by both India and Pakistan and has the dubious distinction of being the world's highest battlefield.

Tensions are likely to persist given India and China's increased presence in an area that for centuries was largely unclaimed and criss-crossed with caravan routes. Now the land abuts the Karakoram Highway joining Pakistan to China, which Beijing hopes to develop further as trade route linking it to the Arabian Sea port of Gwadar.

Speaking before Sunday's resolution, Srikanth Kondapalli, an Indian analyst who specialises in China studies, said the dispute lay close to large hydroelectric projects and an ambitious plan to expand the Karakoram highway.

He said the lack of agreement about where the border lies, combined with increased military and infrastructure activity meant more flashpoints were likely.

"It is a no-man's land," said Kondapalli, who considers the current standoff to be more serious than the usual cross-border incidents. "Even if the (present) issue is resolved, this will only flare up."

(Writing by Frank Jack Daniel; Editing by Jon Hemming)

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Gunfight in Nigeria's Delta oil region kills eight: sources

YENAGOA, Nigeria (Reuters) - Gunmen opened fire on a group of former militants in the oil producing Niger Delta late on Saturday, leading to a shootout that left eight people dead, a security official said.

None could confirm who carried out the attack. The men targeted were loyal to one of several Nigerian Delta militant leaders who accepted a government amnesty in 2009 in exchange for money, ending attacks that at one time shut down nearly half of production in Africa's biggest oil and gas industry.

Those killed included the younger brother of General Reuben Wilson, the leader of one former militant group, Wilson told Reuters at his house on Sunday where weeping mourners were gathered. He denied that his group had returned fired.

Tensions are growing between militant leaders enjoying the lucrative state handouts or government contracts and their foot soldiers who have been paid much less or received nothing, tensions that now threaten the Delta's fragile peace.

The shootout in the town of Lobia, which sits on the creeks and swamps of the Delta's Bayelsa state, was close to where an attack on a boat by disgruntled ex-militants killed 12 policemen in April.

"There was an armed collision between two groups at Lobia, which led to the death of an unspecified number of persons. The bodies are still in the river," said a spokesman for security forces in the Niger Delta, Lieutenant Colonel Onyeama Nwachukwu.

A senior security source, who also said the attack had led to a shootout, put the death toll at eight.

But Wilson denied that the group targeted by the unidentified assailants was armed.

"Unknown gunmen shot at them and killed them all and they were not armed, as claimed in some quarters," he said.

The motive was unclear. The previous attack in April was carried out by followers of Kile Selky Torughedie, who claimed Torughedie had embezzled amnesty money they were owed.

Any resurgence of Delta violence would be a blow to President Goodluck Jonathan, who helped negotiate the amnesty and who is from the Ijaw, the same ethnic group as most of the armed groups in the Delta. His forces are stretched by an Islamist insurgency in the north.

It would also be a problem for multinational energy companies such as leading operator Royal Dutch Shell that are already contending with industrial scale oil theft by armed gangs.

Militants claiming to be from the Movement for the Emancipation of the Niger Delta (MEND) claimed April's attack on a boat carrying police. Analysts doubted the claim as the group's commanders are mostly under amnesty and its leader, Henry Okah, is in jail.

(Reporting by Tife Owolabi; Writing by Tim Cocks; Editing by Tom Pfeiffer)

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Egypt's prime minister unhurt by shooting near his car: police

CAIRO (Reuters) - Egyptian police on Sunday detained a young man who opened fire on Prime Minister Hisham Kandil's convoy and his four companions in Cairo in an incident the authorities said had no political motive. Kandil was not injured.

The young men were on their way to settle a feud when their vehicle crossed paths with Kandil's convoy at 11 p.m. (5 p.m. EST)in Dokki, a residential and commercial district of the capital, the Interior Ministry said in a statement.

When Kandil's security guards tried to force the vehicle away from the convoy, one of the men fired two shots at their car. The police gave chase and caught the five men, the Interior Ministry said. The incident had no "political motives or other dimensions", it added.

The five men were aged between 18 and 29, the Interior Ministry statement said.

(Writing by Tom Perry; editing by Christopher Wilson)

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Malaysia coalition extends rule despite worst electoral showing

By Niluksi Koswanage and Yantoultra Ngui

KUALA LUMPUR (Reuters) - Malaysian Prime Minister Najib Razak could step down by the end of the year, ruling party sources said on Monday, after his coalition extended its 56-year rule but haemorrhaged Chinese and Malay voters in its worst-ever general election performance.

Najib, 59, was already under pressure from conservatives in his ruling party for not delivering a stronger majority in Sunday's election despite a robust economy and a $2.6 billion deluge of social handouts to poor families.

Najib's Barisan Nasional won 133 seats in the 222-member parliament, well short of the two-thirds majority it lost in 2008. Opposition leader Anwar Ibrahim People's Alliance won 89 seats, up seven from the 2008 election but still well short of unseating one of the world's longest-serving governments.

"We could see Najib step down by the end of this year," said a senior official in the dominant United Malays National Organisation (UMNO), which leads the coalition.

"He may put up a fight, we don't know, but he has definitely performed worse. He does not have so much bargaining power," said the official, who spoke on condition of anonymity.

Former Prime Minister Mahathir Mohamad, still a powerful figure in UMNO, told Reuters last year that Najib must improve on the 140 seats won in 2008 or his position would be unstable.

Kuala Lumpur's stock market surged 7.8 percent on Monday to a record high on investor relief that the untested opposition had failed to take power. The Malaysian ringgit jumped to a 20-month high.

Ethnic Chinese who make up a quarter of Malaysians continued to desert Barisan Nasional, accelerating a trend seen in 2008. Alarmingly for Najib, support from majority ethnic Malays also weakened, the UMNO source said, a sign that middle-class Malays are agitating for change.

"Malay unity is at stake here. Some of the Malays are rejecting UMNO. That is obvious," the source said.

ANWAR CRIES FOUL

Ethnic Chinese have turned to the opposition, attracted by its pledge to tackle corruption and end race-based policies favoring ethnic Malays in business, education and housing.

"We will work towards more moderate and accommodative policies for the country," a grim-faced Najib told a news conference after the majority was confirmed. "We have tried our best but other factors have happened ... We didn't get much support from the Chinese for our development plans."

Barisan Nasional also failed to win back the crucial industrial state of Selangor, near the capital Kuala Lumpur, which Najib had vowed to achieve.

Voting was marred by irregularities, said Anwar, 65, a former deputy prime minister in the 1990s who was sacked after falling out with his former boss, Mahathir. His three-party opposition alliance had been optimistic of a historic victory, buoyed by huge crowds at recent rallies.

But as counting went late into Sunday night, it became clear that his fractious opposition had failed to pull off what would have been the biggest election upset in Malaysia's history.

After claiming an improbable early win, Anwar later rejected the result as "fraudulent". He had accused the coalition of flying up to 40,000 "dubious" voters, including foreigners, across the country to vote in close races. The government says it was merely helping voters get to home towns to vote.

RISKS AHEAD FOR COALITION

Bank of America Merrill Lynch economists expect the government to focus on fiscal consolidation after a string of populist pre-election handouts. They expect cuts to fuel subsidies in the second half and a consumption tax next year.

It cited some risks, however, including UMNO elections in October and November when Najib may be challenged.

"Once the dust and excitement has settled, you will see that it's not only the Chinese which were siphoned off from Barisan Nasional. There was a mini-Malay wave in the urban areas against UMNO," said another senior UMNO official.

"In the next round of elections within UMNO, you will see some dissidents emerging and asking for Najib to resign," said the official, who has held cabinet positions in government. He said Mahathir would be among those who back the dissidents.

The 2008 result signaled a breakdown in traditional politics as minority ethnic Chinese and ethnic Indians, as well as many majority Malays, rejected Barisan Nasional's brand of race-based patronage that has ensured stability but led to corruption and widening inequality.

Ethnic Chinese parties affiliated with Barisan Nasional suffered heavy losses in 2008 and were punished by voters again on Sunday. Its ethnic Chinese MCA party won just five seats, down from 15 in 2008.

That leaves Barisan Nasional dominated more than ever by ethnic Malays, who make up about 60 percent of the population, increasing a trend of racial polarization in the country.

The benchmark FTSE Bursa Malaysia KLCI Index hit a lifetime high of 1,826.22, with stocks linked to the coalition and its favored tycoons gaining handsomely.

Malaysia's second-largest lender by assets, CIMB Group Holdings Bhd, rose 8.8 percent. Its chief executive, Nazir Razak, is Najib's brother. Hospitals operator IHH Healthcare Bhd added 6.7 percent and energy services firm SapuraKencana Petroleum Bhd jumped 8.9 percent.

Australia's Lynas Corp Ltd, which is building the world's largest rare earths plant outside China in Malaysia, jumped 13 percent.

"There was a concern that the opposition would move fairly quickly against Lynas given that there were a number of groups actively protesting against the plant," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

(Additional reporting by the Reuters Kuala Lumpur bureau; Writing by Jason Szep; Editing by Paul Tait)

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No early warning for U.S. on Israeli strikes in Syria

By Tabassum Zakaria and Deborah Charles

WASHINGTON (Reuters) - The United States was not given any warning before air strikes in Syria against what Western and Israeli officials say were weapons headed for Hezbollah militants, a U.S. intelligence official said on Sunday.

Without confirming that Israel was behind the attacks, the intelligence official said that the United States was essentially told of the air raids "after the fact" and was notified as the bombs went off.

Israeli jets bombed Syria on Sunday for the second time in 48 hours. Israel does not confirm such missions explicitly - a policy it says is intended to avoid provoking reprisals. But an Israeli official acknowledged that the strikes were carried out by its forces.

"It would not be unusual for them to take aggressive steps when there was some chance that some sophisticated weapons system would fall into the hands of people like Hezbollah," the U.S. intelligence official told Reuters, speaking on condition of anonymity.

While the air raids raised fears that America's main ally in the Middle East could be sucked into the Syrian conflict, Israel typically does not feel it has to ask for a green light from Washington for such attacks.

Officials have indicated in the past that Israel sees a need only to inform the United States once such a mission is under way.

U.S. President Barack Obama said on Saturday that Israel has the right to guard against the transfer of advanced weapons to Hezbollah, an ally of both Syria and Iran.

Rather than an attempt to tip the scales against Syrian President Bashar al-Assad, Israel's action is seen more as part of its own conflict with Iran, which it fears is sending missiles to Hezbollah in Lebanon through Syria. Those missiles might hit Tel Aviv if Israel makes good on threats to attack Tehran's nuclear program.

Another Western intelligence source told Reuters the latest attack, like the previous one, was directed against stores of Fateh-110 missiles in transit from Iran to Hezbollah.

People were woken in the Syrian capital by explosions that shook the ground like an earthquake and sent pillars of flames high into the night sky. Syrian state television said bombing at a military research facility at Jamraya and two other sites caused "many civilian casualties and widespread damage," but it gave no details. The Jamraya compound was also a target for Israel on January 30.

The U.S. intelligence official said additional strikes in the future could not be ruled out.

"Any sophisticated weaponry that finds its way there (Syria)that looks to be destined to fall in the hands of bad actors, I think there is a likelihood that those could be targets as well," the second official said.

ADDED PRESSURE

Obama has repeatedly shied away from deep U.S. involvement in the Syrian conflict, which erupted in 2011 and has killed an estimated 70,000 people and created more than 1.2 million refugees.

Hours after the Israeli attacks, several U.S. lawmakers voiced concern over the mounting uncertainty in the Middle East.

Influential Republican lawmaker John McCain said Israel's air strikes on Syria could add pressure on the Obama administration to intervene, but the U.S. government faces tough questions on how it can help without adding to the conflict.

"We need to have a game-changing action, and that is no American boots on the ground, establish a safe zone and to protect it and to supply weapons to the right people in Syria who are fighting, obviously, for the things we believe," McCain said on "Fox News Sunday."

"Every day that goes by, Hezbollah increases their influence and the radical jihadists flow into Syria and the situation becomes more and more tenuous," he said.

U.S. Defense Secretary Chuck Hagel said last week that Washington was rethinking its opposition to arming the Syrian rebels. He cautioned that giving weapons to the forces fighting Assad was only one option, which carried the risk of arms finding their way into the hands of anti-American extremists among the insurgents.

The United States has said it has "varying degrees of confidence" that chemical weapons have been used in Syria on a limited scale, but is seeking more evidence to determine who used them, how they were used and when.

(Additional reporting by Caren Bohan, Roberta Rampton and Eric Beech; Editing by Alistair Bell and David Brunnstrom)

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Communal clashes in Nigeria kill at least 39: police

ABUJA, Nigeria (Reuters) - Clashes between rival ethnic groups have killed at least 39 people in eastern Nigeria's Taraba state since they erupted on Friday, police said.

Members of the Jukun were marching through the small commercial town of Wukari to a funeral when an argument broke out with local Hausa and Fulani youths, which quickly degenerated into pitched battles with guns and machetes.

Attackers set fire to around 40 houses, police said.

"At the end of the clash, 39 people were counted killed," said the police spokesman for Taraba state, Joseph Kwaji.

He said that 32 people were injured and 40 were arrested.

Taraba state is part of a volatile "Middle Belt" where Nigeria's largely Christian south and mostly Muslim north meet. Violence often flares in the Middle Belt over land disputes between semi-nomadic, cattle-keeping communities such as the Fulani and settled farming peoples like the Jukun.

Fulani settlers tend to be Muslim and other ethnic groups who see themselves as indigenous to the Middle Belt, including the Jukun, are mostly Christian, which sometimes gives the clashes a religious dimension.

Communal violence has also flared this year in Plateau state, which borders Taraba.

Last month, the U.S. Commission on International Religious Freedom, a bipartisan U.S. government agency, said more than 100 people had been killed in clashes there since March, and it urged the government to do more to tackle what it called religious violence.

(Reporting by Lanre Ola and Isaac Abrak; Writing by Tim Cocks; Editing by Mark Trevelyan and Tom Pfeiffer)

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Israel bombs Hezbollah-bound missiles in Syria: official

(Reuters) - Israel has carried out an air strike targeting a consignment of missiles in Syria bound for Hezbollah in neighboring Lebanon, an Israeli official said on Saturday.

The Jewish state had long made clear it is prepared to use force to prevent advanced weapons reaching Lebanon's powerful Shi'ite Muslim guerrillas from Syria. Syrian President Bashar al-Assad and Hezbollah are allied to Iran, Israel's arch-enemy.

With Assad battling a more than two-year-old Syrian insurgency, the Israelis also worry that the Sunni Islamist rebels could loot his arsenals and eventually hit the Jewish state, ending four decades of relative cross-border calm.

Lacking a side to support in its northern neighbor's civil war, and worried about inadvertently fuelling escalation, Israel has exercised restraint. Its government did not formally confirm Friday's air strike, which was disclosed to Reuters by an Israeli official who spoke on condition of anonymity.

"There was an air strike. The target was not a chemical weapons facility. It was missiles intended for Hezbollah," the official told Reuters.

U.S. President Barack Obama said Israel has the right to guard against the transfer of advanced weapons to Hezbollah.

The attack - the second reported Israeli air strike on a target in Syria in four months - took place after Prime Minister Benjamin Netanyahu's security cabinet approved it in a secret meeting on Thursday night, a regional security source said.

A U.S. official told Reuters the target was apparently a building. The New York Times cited unnamed American officials as saying the weapons were advanced surface-to-surface missiles from Iran and they were being stored in a warehouse at Damascus International Airport.

The Israeli air force possesses so-called "standoff" bombs that coast dozens of kilometers (miles) across ground to their targets once fired. That could, in theory, allow Israel to attack Syria from its own turf or from adjacent Lebanon.

CNN quoted unnamed U.S. officials as saying Israel most likely conducted the strike "in the Thursday-Friday time frame" and its jets did not enter Syrian air space.

Lebanese authorities reported unusual intensive Israeli air force activity over their territory on Thursday and Friday.

Syrian government sources denied having information about a strike. Bashar Ja'afari, the Syrian ambassador to the United Nations, told Reuters: "I'm not aware of any attack right now."

CHEMICAL WEAPONS

Israel believes that Hezbollah has built up an arsenal of about 60,000 missiles and rockets. The guerrilla group fired 4,000 missiles into Israel during a 2006 war.

However, Israeli Defence Ministry strategist Amos Gilad said Hezbollah was not seeking to add any of Syria's reputed stocks of chemical weapons and Assad retained control of them.

Israel and the United States last month published findings indicating that pro-Assad forces had used chemical weapons during Syria's insurgency.

In January this year, Israel bombed a convoy in Syria, apparently hitting weapons destined for Hezbollah, according to diplomats, Syrian rebels and security sources in the region.

Israel has not formally confirmed carrying out that strike.

Lebanese acting foreign minister Adnan Mansour was critical. "Attacks such as these will result in more tension and blow up the situation which it promoted," he said.

"This will not give Israel the peace or security that it wants, in its own way, rather it will push the region into an inflamed struggle and into the unknown."

Giora Eiland, a former Israeli army general and national security adviser, said the apparent deadlock in Syria's civil war, now in its third year, meant the Netanyahu government had to be prudent in any military intervention.

"I don't anticipate far-reaching consequences in Lebanon or Syria (from Israel's actions)," Eiland told Israel Radio.

Israel captured Syria's Golan in the 1967 Middle East war, built settlements and annexed the land. Their 1974 ceasefire has largely held, despite occasional firing across the Golan.

But Israeli security concerns have risen since Islamist fighters linked to al-Qaeda assumed a prominent role in the insurrection against Assad.

Israel fought an inconclusive 2006 war with Hezbollah and regards the Lebanese guerrilla groups as a potent threat. Yet Gilad, the Israeli defence ministry official, saw little risk of Hezbollah seeking to outfit itself with Syrian chemical weapons.

"Chemical weapons kill those who use them," Gilad said in a speech.

(Additional reporting by Erika Solomon in Beirut; Editing by Mark Heinrich and Tom Pfeiffer)

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Explosions shake Damascus, Syria blames Israel

By Dominic Evans

BEIRUT (Reuters) - Powerful explosions struck the outskirts of Damascus early on Sunday, sending columns of fire into the night sky, and Syrian state television said Israeli rockets had struck a military facility just north of the capital.

Israel declined to comment on the attack, but the blasts occurred a day after an Israeli official said his country had carried out an air strike targeting a consignment of missiles in Syria intended for the Lebanese militant group Hezbollah.

One of the sites hit on Sunday, the Jamraya military research center, was also targeted by Israel in January.

"The new Israeli attack is an attempt to raise the morale of the terrorist groups which have been reeling from strikes by our noble army," Syrian television said, referring to recent offensives by President Bashar al-Assad's forces against rebels.

The British-based Syrian Observatory for Human Rights quoted eyewitnesses in the area as saying they saw jets in the sky at the time of the explosions.

It said the blasts hit Jamraya as well as a nearby ammunition depot. Other activists said a missile brigade and two Republican Guard battalions may also have been targeted in the heavily militarized area just north of Damascus.

Video footage uploaded onto the Internet by activists showed a series of explosions. One lit up the skyline over the city, while another sent up a tower of flames and secondary blasts.

There was no immediate comment from Israeli officials on Sunday's explosions. "We don't respond to this kind of report," an Israeli military spokeswoman told Reuters.

The Jewish state has repeatedly made clear it is prepared to use force to prevent advanced weapons from Syria reaching Lebanon's Shi'ite Muslim Hezbollah guerrillas, who fought a 34-day war with Israel in 2006. Assad and Hezbollah are allied to Iran, Israel's arch-enemy.

With Assad battling a more than 2-year-old insurgency, the Israelis also worry that the Sunni Islamist rebels could loot his arsenals and eventually hit the Jewish state, ending four decades of relative cross-border calm.

The U.S. State Department and Pentagon had no immediate comment and the Israeli Embassy in Washington declined comment.

The uprising against Assad began with mainly peaceful protests that were met with force and grew into a bloody civil war in which the United Nations says at least 70,000 people have been killed.

Assad has lost control of large areas of north and eastern Syria, and is battling rebels on the fringes of Damascus.

But his forces have launched counter-offensives in recent weeks against the mainly Sunni Muslim rebels around the capital and near the city of Homs, which links Damascus with the Mediterranean heartland of Assad's minority Alawite sect.

(Additional reporting by Mariam Karouny in Beirut, Marwan Makdesi in Damascus, Dan Williams in Jerusalem and Arshad Mohammed and Phil Stewart in Washington; Editing by Peter Cooney)

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