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But it was not immediately clear how far China's People's Liberation Army (PLA) soldiers had withdrawn - Delhi had claimed they were 19 km (12 miles) beyond the point it understands to be the border with China, a vaguely defined de facto line called the Line of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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Idea that American held by Venezuela is a spy 'ridiculous:' Obama

By Steve Holland

SAN JOSE (Reuters) - The Venezuelan government's suggestion that an American citizen it has detained is a spy is "ridiculous," U.S. President Barack Obama said in a television interview recorded on Saturday during a visit to Costa Rica.

Venezuela said late last month it had detained an American called Timothy Hallet Tracy, accusing him of financing opposition student demonstrations after April's disputed presidential election and saying he had clearly been trained as an intelligence agent.

Venezuela said Tracy, 35, from Michigan, had received money from a foreign non-profit organization and had redirected those funds toward student organizations, seeking to provoke "civil war".

Relatives and friends of Tracy have described him to U.S. media as a documentary maker who was in Venezuela to make a film about the presidential election.

"This U.S. citizen who apparently has been detained, we will handle (it) like ... every situation where we get a U.S. citizen who gets into some sort of legal tangle in a foreign country," Obama told Noticias Telemundo in an interview set to be aired on Sunday.

"The notion that this individual is some spy is ridiculous," Obama added as he wrapped up a three-day trip to Mexico and Costa Rica. "We've seen some of this rhetoric occasionally come out of Venezuela."

U.S. officials say the matter is being handled privately, rather than government-to-government, and they are unaware of details of the case. They are, however, seeking consular access to Tracy.

Venezuelan President Nicolas Maduro, elected in April by a narrow margin, has accused former U.S. officials of fomenting plans to assassinate him and also said Washington is supporting efforts to destabilize Venezuela.

FLOOD OF ACCUSATIONS

The U.S. government has denied that, and Venezuela's opposition has derided the torrent of accusations as a smokescreen to distract people from difficult domestic issues.

Obama said in a separate interview with Univision News, aired on Friday, that the United States was watching "crackdowns on the opposition" in Venezuela, when asked if he considered newly elected Maduro to be the country's legitimate president.

The United States angered Maduro when it last month held back recognition of his narrow victory over Capriles.

"What we want for Venezuela is ... Venezuelans ... able to choose their own leadership in fair and free elections a democratic process that is credible," Obama told Noticias Telemundo. "We have not tried to interfere in any way with what happens there."

"What we've said is, you know, let's make sure that the rules are being followed, that people are not being thrown into jail or intimidated, that the press is allowed to report fairly on what happens, that the ruling party doesn't resort to intimidation in terms of skewing results."

Maduro responded to Obama's criticism of Venezuela's democratic credentials with an angry denunciation of the U.S. leader's "insolence" on Saturday during a government "cadena" broadcast that all local television channels are obliged to show live.

"There's now no doubt that Obama himself, as the puppet of that imperial power, is behind the financing in dollars of this right wing that wants to mess with and destroy Venezuela's democracy," he said.

Maduro said he would not let up in his defense of Venezuela's sovereignty and constitution, and was prepared to talk with Washington despite its antagonism towards him.

"We can sit down even with the devils' major-general, Obama," he said in a speech to red-shirted workers who chanted "Obama, fascist" as he wound up.

A later statement by the Venezuelan government accused Obama of turning a blind eye to deaths that occurred in opposition-led protests the day after Maduro's election, and showing hypocrisy on human rights given his failure to close a prison for foreign terrorism suspects at the U.S. Naval Base in Guantanamo Bay, Cuba.

(With reporting by Andrew Cawthorne and Deisy Buitrago in Caracas; Writing by Simon Gardner; Editing by Eric Walsh)

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Malaysians vote to decide fate of world's longest-ruling coalition

By Anuradha Raghu and Niluksi Koswanage

JOHOR BARU, Malaysia (Reuters) - Malaysians began voting on Sunday in an election that could weaken or even end the rule of one of the world's longest-lived coalitions, which faces a stiff challenge from an opposition pledging to clean up politics and end race-based policies.

Led by former finance minister Anwar Ibrahim, the opposition is aiming to build on startling electoral gains in 2008, when the Barisan Nasional, or National Front, ruling coalition lost its customary two-thirds parliamentary majority.

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

Hundreds of people lined up outside polling stations across the country, many of them first-time voters concerned about the rising living costs, higher crime and corruption in a government that has been in power for 56 years.

"I would like to see some change," said Wardina Shafie, a 31-year-old computer engineer after she cast her vote on the outskirts of the Malaysian capital. "I think the opposition has a good chance of taking government. I only worry about voter fraud."

The campaigning had heated up in recent days with Anwar accusing the coalition of flying up to 40,000 "dubious" voters across the country to vote in close races. The government says it was merely helping voters to return to their hometowns.

Polling will end at 5.00 pm (0900 GMT). Officials expect the first results for 222 parliamentary seats and over 500 state seats to start trickling in from 8.00 pm onwards.

Opinion polls suggest a tight race that could further reduce the coalition majority, lead the opposition to dispute the result over claims of fraud and spill over to street protests.

Under Prime Minister Najib Razak, the blue-blood son of a former leader, the coalition has tried to win over a growing middle class with social reforms and secure traditional voters with a $2.6 billion deluge of cash handouts to poor families.

He can point to robust growth of 5.6 percent last year as evidence that his Economic Transformation Programme to double incomes by 2020 is bearing fruit, while warning that the untested three-party opposition would spark economic ruin.

"The victor or loser of this 13th general election will not be BN or the opposition PR. It will be Malaysia, its people and our children," Najib tweeted on Sunday before casting his ballot in central Pahang state.

Najib, who is more popular than his party, has had some success in steadying the ship since he was installed as head of the dominant United Malays National Organisation (UMNO) in 2009.

Formidable advantages such as the coalition's control of mainstream media, its deep pockets and a skewed electoral system make it the clear favorite.

But a failure to improve on 2008's performance, when the National Front won 140 seats in the 222-seat parliament, could threaten Najib's position and his reform program. Conservative forces in UMNO, unhappy with his tentative efforts to roll back affirmative action policies favoring ethnic Malays, are waiting in the wings to challenge his leadership.

LAST CHANCE FOR ANWAR?

The election represents possibly the last chance to lead Malaysia for Anwar, a former rising UMNO star who was sacked and jailed for six years in 1998 following a feud with then prime minister Mahathir Mohamad, who remains an influential figure.

The 65-year-old former deputy prime minister says his corruption and sodomy convictions were trumped up. He received a new lease on political life last year when a court acquitted him of a second sodomy charge.

His alliance, which includes an awkward partnership between a secular ethnic Chinese party with an Islamist party, can present a viable alternative, given its record of governing in four states it took over in 2008.

It wants to break down a network of patronage that has grown up between UMNO and business tycoons. The alliance also pledges to replace policies favoring ethnic Malays in housing, business and education with needs-based assistance. Anwar has called it a balance of "market economy and Occupy Wall Street".

The opposition is riding a growing trend of civil-society activism, which has been most evident in a series of big street protests in recent years calling for reform of the electoral system and huge campaign rallies.

Election observers said at least 200,000 people turned up for rallies across the country late on Saturday in a last-minute push to support the opposition.

"One for all, all for one - regardless of color, creed, or religion," veteran politician Lim Kit Siang told a 6,000-strong crowd in southern Johor state, bordering Singapore. "We are all Malaysians, why let racial sentiments provoke us?"

Most people in the crowd were Chinese, who make up about 25 percent of Malaysians and who abandoned the ruling coalition in 2008.

Maintaining its momentum among ethnic Malay voters may be more difficult amid warnings from the National Front that they would be at risk from Chinese economic domination if the opposition won.

"I am comfortable with the current situation here," said a 62-year old Malay housewife after she cast her ballot in Johor. "I can't trust the opposition. I don't know them."

(Additional reporting by the Reuters Kuala Lumpur bureau; Writing by Stuart Grudgings and Niluksi Koswanage; Editing by Nick Macfie)

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