Oil prices rise after upbeat US, China data

NEW YORK: Oil prices finished higher Friday in New York, buoyed by greater optimism about global growth following encouraging indicators from the US and China.

A barrel of West Texas Intermediate, the US benchmark, settled 28 cents higher at US$97.77 on the New York Mercantile Exchange.

Even stronger was the price of European oil benchmark Brent futures, which closed at US$116.76 a barrel on the Intercontinental Exchange, up US$1.21. The close was Brent's highest level since May 2012.

Oil prices got a lift from Friday's monthly US nonfarm labour payroll data.

Although the number of net jobs added in January came in below expectations, markets were heartened by a significant upward revision in the 2012 monthly figures.

The Labor Department reported employers added 157,000 jobs in January and upped its estimate for December jobs growth to 196,000.

After a sweeping annual revision of earlier data, the department also said monthly job growth averaged 181,000 in 2012, well above the prior estimate of 153,000 jobs.

The US jobs report was not the only strong data point released Friday, said Dominick Chirichella, an analyst with the Energy Management Institute. There was also strong manufacturing data in the US and China, the world's two biggest energy consumers.

"Pretty much everything across the board was positive," Chirichella said.

The one exception was Wednesday's report on the US economy for the 2012 fourth quarter, which showed gross domestic product shrank 0.1 per cent, the first contraction since the 2009 recession.

But the oil and equity markets "ignored" the GDP reading, Chirichella added.

"Crude is being lifted with all the other markets, even though the underlying fundamentals do not necessarily justify that," said Matt Smith, an analyst with Schneider Electric. "Demand is relatively flat and supply is at a 20-year high."

Oil prices have also been supported by the fall in the US dollar against the euro. Because oil is traded in US dollars, it becomes cheaper for consumers who use other currencies to purchase the commodity.

Still, prices of US benchmark WTI continued to be weighed down by problems at the Seaway pipeline.

The pipeline has encountered operational problems that have limited the flow of oil from the Cushing, Oklahoma-based trading hub to refineries on the US Gulf Coast, producing a glut of oil at landlocked Cushing that has pressured prices.

- AFP/jc

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India irked as China gets Pakistan's strategic Gwadar port

NEW DELHI: Pakistan's cabinet formally agreed to hand over the operation of its strategically located Gwadar port to China on Wednesday. This puts in place China's famed "string of pearls" strategy which may have significant implications for India.

On Wednesday, the Pakistan cabinet, in one of its last decisions, transferred the operations responsibility of the Gwadar port from Singapore's PSA (Port of Singapore Authority) International to China's Overseas Port Holdings. This had been agreed some time ago as PSA International and Pakistani navy fell out over land transfers, security issues and lack of infrastructure. PSA had asked to withdraw from the contract and Pakistan had agreed.

In 2011, the Pakistani defence minister had announced in Beijing that Islamabad would transfer ownership to a Chinese company. China had demurred then, but despite the worsening security situation in Balochistan, the Chinese have apparently agreed to take it over.

China has already encountered opposition from Baloch people, who have objected to the Chinese taking over their traditional lands. And as the transition in Afghanistan draws near, that region, specially Quetta, which apparently houses top Taliban leaders, is likely to see more violence.

Gwadar was built by China but during its operation by PSA, it barely attracted any commercial traffic. There is also a lot of port development that remains to be built. Pakistan expects China to complete that construction in record time, given its past performance.

More than that, Pakistan expects China to turn Gwadar into a naval base. However, China has its work cut out. A container terminal, rail and road links from the port across Balochistan would need to be built, before China can take advantage of the port itself.

For China, Gwadar could also be a conduit for energy flows into northwestern China, by transporting oil and gas from the port through pipelines that traverse Balochistan and the federal agencies to feed into China's Xinjiang province. As China's oil imports increase, it would prefer to insulate its energy flows from the turbulent waters of the Straits of Malacca and the South China Sea.

Indian ships among others patrol the former as an anti-piracy measure. In the latter, China is involved in a territorial dispute with Vietnam and Philippines among others. In a conflict, it would be easy to shut off China's energy supplies. But not if they can be routed through Gwadar where Pakistan Navy can also add to the security.

According to recent figures, over 60% of China's imported oil travels through the Straits of Hormuz. Having Gwadar under its command would change the security dynamics for China.

As China moves into the Indian Ocean, Gwadar port would be ideal as a staging ground for Chinese ships. China already has a steady presence in Sri Lanka's Hambantota port, it is wooing Maldives, though no port presence is planned yet. China is also building a port in Chittagong, Bangladesh, as well as Sonadiya, near Cox's Bazar.

From the security point of view, India could find itself considerably constrained. It's not for nothing that India has ramped up its relations with Oman, though there is no security presence there yet. India has been pushing to develop the Iranian port of Chahbahar, but that remains a long-term project.

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Obama offers faith groups new birth control rule

WASHINGTON (AP) — Facing a wave of lawsuits over what government can tell religious groups to do, the Obama administration on Friday proposed a compromise for faith-based nonprofits that object to covering birth control in their employee health plans.

Some of the lawsuits appear headed for the Supreme Court, threatening another divisive legal battle over President Barack Obama's health care overhaul law, which requires most employers to cover birth control free of charge to female workers as a preventive service. The law exempted churches and other houses of worship, but religious charities, universities, hospitals and even some for-profit businesses have objected.

The government's new offer, in a proposed regulation, has two parts.

Administration officials said it would more simply define the religious organizations that are exempt from the requirement altogether. For example, a mosque whose food pantry serves the whole community would not have to comply.

For other religious employers, the proposal attempts to create a buffer between them and contraception coverage. Female employees would still have free access through insurers or a third party, but the employer would not have to arrange for the coverage or pay for it. Insurers would be reimbursed for any costs by a credit against fees owed the government.

It wasn't immediately clear whether the plan would satisfy the objections of Roman Catholic charities and other faith-affiliated nonprofits nationwide challenging the requirement.

Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, which is representing religious nonprofits and businesses in lawsuits, said many of his clients will still have serious concerns.

"This is a moral decision for them," Duncan said. "Why doesn't the government just exempt them?"

Neither the Catholic Health Association, a trade group for hospitals, nor the U.S. Conference of Catholic Bishops had an immediate reaction, saying the regulations were still being studied.

Some women's advocates were pleased.

"The important thing for us is that women employees can count on getting insurance that meets their needs, even if they're working for a religiously affiliated employer," said Cindy Pearson, executive director of the National Women's Health Network.

Policy analyst Sarah Lipton-Lubet of the American Civil Liberties Union said the rule appeared to meet the ACLU's goal of providing "seamless coverage."

Health and Human Services Secretary Kathleen Sebelius said in a statement that the compromise would provide "women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns."

The birth-control rule, first introduced a year ago, became an election issue, with some advocates for women praising the mandate as a victory but some religious leaders decrying it as an attack on faith groups.

The health care law requires most employers, including faith-affiliated hospitals and nonprofits, to provide preventive care at no charge to employees. Scientific advisers to the government recommended that artificial contraception, including sterilization, be included in a group of services for women. The goal, in part, is to help women space out pregnancies to promote health.

Under the original rule, only those religious groups that primarily employ and serve people of their own faith — such as churches — were exempt. But other religiously affiliated groups, such as church-affiliated universities, Catholic Charities and hospitals, were told they had to comply.

Catholic bishops, evangelicals and some religious leaders who have generally been supportive of Obama's policies lobbied fiercely for a broader exemption. The Catholic Church prohibits the use of artificial contraception. Evangelicals generally accept the use of birth control, but some object to specific methods such as the morning-after contraceptive pill, which they argue is tantamount to abortion, and is covered by the policy.

Obama had promised to change the birth control requirement so insurance companies — and not faith-affiliated employers — would pay for the coverage, but religious leaders said more changes were needed to make the plan work.

Since then, more than 40 lawsuits have been filed by religious nonprofits and secular for-profit businesses contending the mandate violates their religious beliefs. As expected, this latest regulation does not provide any accommodation for individual business owners who have religious objections to the rule.

Questions remain about how the services ultimately will be funded. The Health and Human Services Department has not tallied an overall cost for the plan, according to Chiquita Brooks-LaSure, an HHS deputy policy director.

However, in its new version of the rule, the department argues that the change won't impose new costs on insurers because it will save them money "from improvements in women's health and fewer child births."

The latest version of the mandate is now subject to a 60-day public comment period. The overall mandate is to take effect for religious nonprofits in August.

___

Zoll reported from New York. Associated Press writer David Crary in New York contributed.

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Secret Video Shows Bomb Dogs Failing Tests

A new government investigation suggests that the Transportation Security Administration is not collecting enough detailed information to know if its bomb dogs are well trained and capable of finding bombs at the nation's airports, and includes secret video that shows the dogs failing tests to detect explosives.

TSA has been testing bomb dogs in Miami and Oklahoma City and will be testing them at Dulles airport, outside Washington, D.C., this month.

A GAO report released this week, however, says that the passenger-screening canines have not been adequately tested, and included secret video shot over the past year that showed the dogs failing to detect explosives properly at the test airports.

"As part of our review," wrote the GAO, "we visited two airports at which PSC teams have been deployed and observed training exercises in which PSC teams accurately detected explosives odor (i.e., positive response), failed to detect explosives odor (i.e., miss) and falsely detected explosives odor (i.e., non-productive response)."

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The report also said that "TSA could have benefited from completing operational assessments of PSCs before deploying them on a nationwide basis to determine whether they are an effective method of screening passengers in the U.S. airport environment."

In a statement, the TSA said it "acknowledges the need to further examine the data collected over a longer term. To that end, the National Canine Program (NCP) will reestablish annual comprehensive assessments. Beginning in March 2013, TSA plans to expand the Canine Website to improve functionality and reporting capabilities addressing a GAO recommendation."

It also said that this month it would complete effectiveness assessments at Miami, Oklahoma City and Dulles airports, and that it would identify the proper places for the dogs to be deployed at 120 airports by the end of fiscal 2013.

The cost of keeping bomb-sniffing dogs on the government's payroll has almost doubled in the past two years, from $52 million to more than $100 million. Each TSA dog team costs the taxpayers $164,000 dollars a year.

"They want to do the right thing," aviation expert Jeff Price told ABC News, "but the homework hasn't been done. A lot of money gets spent before they know something works."

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Suicide bomber kills guard at U.S. embassy in Turkey

ANKARA (Reuters) - A far-leftist suicide bomber killed a Turkish security guard at the U.S. embassy in Ankara on Friday, officials said, blowing open an entrance and sending debris flying through the air.

The attacker detonated explosives strapped to his body after entering an embassy gatehouse. The blast could be heard a mile away. A lower leg and other human remains lay on the street.

Prime Minister Tayyip Erdogan said the bomber was a member of the Revolutionary People's Liberation Party-Front (DHKP-C), a far-left group which is virulently anti-U.S. and anti-NATO and is listed as a terrorist organization by Washington.

The White House said the suicide attack was an "act of terror" but that the motivation was unclear. U.S. officials said the DHKP-C were the main suspects but did not exclude other possibilities.

Islamist radicals, extreme left-wing groups, ultra-nationalists and Kurdish militants have all carried out attacks in Turkey in the past. There was no claim of responsibility.

"The suicide bomber was ripped apart and one or two citizens from the special security team passed away," said Prime Minister Tayyip Erdogan.

"This event shows that we need to fight together everywhere in the world against these terrorist elements," he said.

Turkish media reports identified the bomber as DHKP-C member Ecevit Sanli, who was involved in attacks on a police station and a military staff college in Istanbul in 1997.

KEY ALLY

Turkey is a key U.S. ally in the Middle East with common interests ranging from energy security to counter-terrorism and has been one of the leading advocates of foreign intervention to end the conflict in neighboring Syria.

Around 400 U.S. soldiers have arrived in Turkey over the past few weeks to operate Patriot anti-missile batteries meant to defend against any spillover of Syria's civil war, part of a NATO deployment due to be fully operational in the coming days.

The DHKP-C was responsible for the assassination of two U.S. military contractors in the early 1990s in protest against the first Gulf War and launched rockets at the U.S. consulate in Istanbul in 1992, according to the U.S. State Department.

Deemed a terrorist organization by both the United States and Turkey, the DHKP-C has been blamed for suicide attacks in the past, including one in 2001 that killed two police officers and a tourist in Istanbul's central Taksim Square.

The group, formed in 1978, has carried out a series of deadly attacks on police stations in the last six months.

The attack may have come in retaliation for an operation against the DHKP-C last month in which Turkish police detained 85 people. A court subsequently remanded 38 of them in custody over links to the group.

"HUGE EXPLOSION"

U.S. Ambassador Francis Ricciardone emerged through the main gate of the embassy shortly after the explosion to address reporters, flanked by a security detail as a Turkish police helicopter hovered overhead.

"We're very sad of course that we lost one of our Turkish guards at the gate," Ricciardone said, describing the victim as a "hero" and thanking Turkish authorities for a prompt response.

U.S. State Department spokeswoman Victoria Nuland condemned the attack on the checkpoint on the perimeter of the embassy and said several U.S. and Turkish staff were injured by debris.

"The level of security protection at our facility in Ankara ensured that there were not significantly more deaths and injuries than there could have been," she told reporters.

It was the second attack on a U.S. mission in four months. On September 11, 2012, U.S. Ambassador Christopher Stevens and three American personnel were killed in an attack on the U.S. Consulate in Benghazi, Libya.

The attack in Benghazi, blamed on al Qaeda-affiliated militants, sparked a political furor in Washington over accusations that U.S. missions were not adequately safeguarded.

A well-known Turkish journalist, Didem Tuncay, who was on her way in to the embassy to meet Ricciardone when the attack took place, was in a critical condition in hospital.

"It was a huge explosion. I was sitting in my shop when it happened. I saw what looked like a body part on the ground," said travel agent Kamiyar Barnos, whose shop window was shattered around 100 meters away from the blast.

CALL FOR VIGILANCE

The U.S. consulate in Istanbul warned its citizens to be vigilant and to avoid large gatherings, while the British mission in Istanbul called on British businesses to tighten security after what it called a "suspected terrorist attack".

In 2008, Turkish gunmen with suspected links to al Qaeda, opened fire on the U.S. consulate in Istanbul, killing three Turkish policemen. The gunmen died in the subsequent firefight.

The most serious bombings in Turkey occurred in November 2003, when car bombs shattered two synagogues, killing 30 people and wounding 146. Part of the HSBC Bank headquarters was destroyed and the British consulate was damaged in two more explosions that killed 32 people less than a week later. Authorities said those attacks bore the hallmarks of al Qaeda.

(Additional reporting by Daren Butler and Ayla Jean Yackley in Istanbul, Mohammed Arshad and Mark Hosenball in Washington; Writing by Nick Tattersall; Editing by Stephen Powell)

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Judge to US government: stop censoring 9/11 hearings

GUANTANAMO BAY: A military judge overseeing September 11 pre-trial hearings revealed Thursday the government had censored discussion of secret CIA prisons from outside the courtroom, and angrily ordered such censorship not happen again.

The proceedings at the high-security courtroom where five alleged 9/11 plotters are to be tried are heard in the press gallery and in a room where human rights groups and victims' families sit, with a 40 second delay.

This is done so a court security officer, or CSO, sitting next to the judge can block anything deemed classified.

The officer has two switches -- "stop" and "go" -- and spectators behind a thick glass window can see a red light go on when proceedings are in fact being silenced.

Judge James Pohl disclosed Thursday that the government -- by means of the so-called original classification authority (OCA) -- also has a switch, but outside the courtroom, that allows it to cut off the broadcast of the proceedings.

On Monday part of the proceedings were censored when the discussion touched on secret CIA prisons where the suspects were held and abused.

The judge said he was stunned and angry that the censoring mechanism was activated from outside the court, without his knowledge.

This must stop, Pohl said, adding that "the judge and only the judge" can decide what happens in his courtroom.

On Thursday, the last day of this round of hearings, Pohl said the government must "disconnect the outside feed or ability to suspend the broadcast" from outside his court.

The ruling means censoring can go on, but it cannot be activated from outside the courtroom.

The judge said the "public has no unfettered right to access classified info. However, the only person who is authorised to close the courtroom is the judge."

"This order takes effect immediately," he said.

The Justice Department prosecutor in charge of classified material questions, Joanna Baltes, had said the OCA had the possibility of controlling the outside feed.

So it seems it was the OCA that pulled the plug on the sound Monday, as it was the CIA that ran the secret prisons where terror suspects, including the five defendants here, were subjected to "enhanced interrogation" methods.

The harsh interrogations have included techniques like waterboarding, a form of simulated drowning, that are widely regarded as torture.

Thursday was the last day of the latest session of pre-trial hearings. The five defendants, including self-proclaimed 9/11 mastermind Khalid Sheikh Mohamed, were not present as they are boycotting the sessions.

The 9/11 trial at this US base on the southeastern tip of Cuba is not expected to start for at least a year.

The five men accused of plotting the suicide attacks against the Twin Towers and the Pentagon, which killed nearly 3,000 people, face the death penalty if convicted.

Before Pohl's ruling, defence attorneys filed an emergency request seeking to suspend the proceedings on grounds that a dispute over the confidentiality of their conversations with their clients had not been resolved.

David Nevin, lawyer for Mohamed, said all his conversations with his client -- including during prison visits and even in the courtroom -- were being recorded.

The next hearings are scheduled to begin February 11, and the confidentiality issue is to be addressed. Pohl has ordered the defendants be present for that hearing.

Before adjourning until that date, Pohl summoned Bruce MacDonald, who oversees all US military courts, to testify. This was another setback for the government because it had opposed his testifying.

- AFP/jc

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Ensure our states aren’t hit by your Brahmaputra dams: India to China

NEW DELHI: India took an unusually sharp stand against China's unilateral moves to dam the Brahmaputra, saying it had "established user rights" to the river. Asserting itself for the first time, India asked China "to ensure that the interests of downstream states are not harmed by any activities in upstream areas".

In its new blueprint for the energy sector for 2011-2015, China announced it would build three hydropower bases on the Yarlung Tsangpo river, at Dagu, Jiacha and Jiexu. A hydropower station at Zangmu is already under construction. The Chinese announcement earlier this week was not preceded by any consultation or sharing of information with New Delhi.

While this actually indicates China's consistent policy that it does not believe it needs to engage India on this, the Indian response represents a distinct change in policy. Thus far, India's stated position was that New Delhi "agreed" with the Chinese statement that it would "not hurt India's interests".

As recently as March 2012, during the visit of Chinese foreign minister Yang Jiechi, external affairs ministry officials said on record, "India and China have had many exchanges on this subject including at the highest levels, between the prime ministers of the two countries. The Chinese side has on many occasions told us that they will not do anything on trans-border rivers which will hurt the interests of the lower riparian countries like India. Our own look into this whole question has also led us to believe that what the Chinese are telling us is correct."

Answering a question in Rajya Sabha in November 2011, the then foreign minister SM Krishna said, "The Chinese premier, during his visit to India in December 2010, said that China's development of upstream areas will never harm downstream interests. Government has ascertained that the dam at Zangmu in the Tibet Autonomous Region is a run-of-the-river hydro-electric project, which does not store water and will not adversely impact the downstream areas in India."

In fact, in the past few years, India has consistently tried to play down the threat that Chinese construction poses. Even when local reports said that in Pasighat town in East Siang district of Arunachal Pradesh, the water level of the Brahmaputra river receded so much that it was almost dry. In fact, Chinese spokespersons have even quoted Krishna to show that India "understood" the Chinese position.

In October, 2011, Jiao Yong, China's vice-minister for water resources, was quoted as saying, "The Yarlung Tsangpo (Brahmaputra) river flows across China's Qinghai Tibet plateau. Many Chinese citizens have been calling for greater usage of this river. However, considering the technical difficulties, the actual need of diversion, and the possible impact on the environment and state-to-state relations, the Chinese government has no plans to conduct any diversification project in this river."

Clearly a lot has changed since then. For India, the biggest problem is not merely that China continues to build dams on the river with impunity, and might implement its long-term plan of diverting the waters of the Brahmaputra to its parched northeast. It is that China refuses to accede to any international rule of law. There is no bilateral water treaty between India and China. China is not ready to even discuss the issue with India.

Indian officials say a large proportion of the catchment of the Brahmaputra lies within Indian territory, which will not be affected by the Chinese dams. Within the government, there is an urgency to dam the waters of the Brahmaputra in Arunachal Pradesh and Assam. Some of this makes Bangladesh uneasy, but India is going out of its way to accommodate Dhaka's concerns even to the extent of giving it a stake in these projects. None of this is forthcoming from China to India, however.

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Hedgehog Alert! Prickly pets can carry salmonella

NEW YORK (AP) — Add those cute little hedgehogs to the list of pets that can make you sick.

In the last year, 20 people were infected by a rare but dangerous form of salmonella bacteria, and one person died in January. The illnesses were linked to contact with hedgehogs kept as pets, according to a report released Thursday by the Centers for Disease Control and Prevention.

Health officials on Thursday say such cases seem to be increasing.

The CDC recommends thoroughly washing your hands after handling hedgehogs and cleaning pet cages and other equipment outside.

Other pets that carry the salmonella bug are frogs, toads, turtles, snakes, lizards, chicks and ducklings.

Seven of the hedgehog illnesses were in Washington state, including the death — an elderly man from Spokane County who died in January. The other cases were in Alabama, Illinois, Indiana, Michigan, Minnesota, Ohio and Oregon.

In years past, only one or two illnesses from this salmonella strain have been reported annually, but the numbers rose to 14 in 2011, 18 last year, and two so far this year.

Children younger than five and the elderly are considered at highest risk for severe illness, CDC officials said.

Hedgehogs are small, insect-eating mammals with a coat of stiff quills. In nature, they sometimes live under hedges and defend themselves by rolling up into a spiky ball.

The critters linked to recent illnesses were purchased from various breeders, many of them licensed by the U.S. Department of Agriculture, CDC officials said. Hedgehogs are native to Western Europe, New Zealand and some other parts of the world, but are bred in the United States.

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Online:

CDC report: http://www.cdc.gov/mmwr

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Beyonce Admits to Singing With Pre-Recorded Track

Jan 31, 2013 3:52pm

Credit: Christopher Polk/Getty Images. 

Beyonce proved the critics wrong at a press conference for the Super Bowl.

As the singer walked on stage, she asked the audience to please stand. She then kicked off the press conference with a show-stopping, live performance of the national anthem.

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“I am a perfectionist and one thing about me, I practice until my feet bleed, and I did not have time to rehearse with the orchestra. It was a live television show and a very, very important emotional show for me. One of my proudest moments,” Beyonce said when asked what happened at the inauguration.

“Due to the weather, due to the delay, due to no proper sound check, I did not feel comfortable taking a risk. It was about the president and the inauguration and I wanted to make him and my country proud. So I decided to sing along with my pre-recorded track, which is very common in the music industry, and I’m very proud of my performance,” she said.

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The 31-year-old singer also guaranteed that she will be singing live during Sunday’s Super Bowl halftime show.

“I will absolutely be singing live. I am well rehearsed and I will absolutely be singing live,” Beyonce said. “This is what I was born to do. What I’m born for.”

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After reporters were told to move onto another topic, Beyonce said she was honored and humbled to have the opportunity to perform at the Super Bowl, especially in New Orleans, since her family is from Louisiana.  As for her setlist, she said it was difficult to choose which songs to perform, adding, “trying to condense a career into 12 minutes is not easy.”

Her plans after the Super Bowl?  “I’m going to enjoy my daughter,” Beyonce laughed.  “I’ve missed her, I’m working so hard and I keep saying, ‘Mommy will be done Sunday at nine o’clock!’”

Beyonce also said that she “might” have an announcement at the end of her performance — she hinted that it would have to do with a tour.  In addition, she refused to confirm a Destiny’s Child reunion onstage.

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Syria protests over Israel attack, warns of "surprise"

BEIRUT/AMMAN (Reuters) - Syria protested to the United Nations on Thursday over an Israeli air strike on its territory and warned of a possible "surprise" response.

The foreign ministry summoned the head of the U.N. force in the Israeli-occupied Golan Heights to deliver the protest a day after Israel hit what Syria said was a military research centre and diplomats said was a weapons convoy heading for Lebanon.

"Syria holds Israel and those who protect it in the Security Council fully responsible for the results of this aggression and affirms its right to defend itself, its land and sovereignty," Syrian television quoted it as saying.

The ministry said it considered Wednesday's Israeli attack to be a violation of a 1974 military disengagement agreement which followed their last major war, and demanded the U.N. Security Council condemn it unequivocally.

U.N. Secretary-General Ban Ki-moon expressed "grave concern". "The Secretary-General calls on all concerned to prevent tensions or their escalation," his office said, adding that international law and sovereignty should be respected.

Israel has maintained total silence over the attack, as it did in 2007 when it bombed a suspected Syrian nuclear site - an attack which passed without Syrian military retaliation.

In Beirut on Thursday Syria's ambassador said Damascus could take "a surprise decision to respond to the aggression of the Israeli warplanes". He gave no details but said Syria was "defending its sovereignty and its land".

Diplomats, Syrian rebels and security sources said Israeli jets bombed a convoy near the Lebanese border on Wednesday, apparently hitting weapons destined for Hezbollah. Syria denied the reports, saying the target was a military research centre northwest of Damascus and 8 miles from the border.

Hezbollah, which has supported Assad as he battles an armed uprising in which 60,000 people have been killed, said Israel was trying to thwart Arab military power and vowed to stand by its ally.

"Hezbollah expresses its full solidarity with Syria's leadership, army and people," said the group which fought an inconclusive 34-day war with Israel in 2006.

Russia, which has blocked Western efforts to put pressure on Syria at the United Nations, said any Israeli air strike would amount to unacceptable military interference.

"If this information is confirmed, we are dealing with unprovoked attacks on targets on the territory of a sovereign country, which blatantly violates the U.N. Charter and is unacceptable, no matter the motives," Russia's foreign ministry said.

Iranian deputy foreign minister Hossein Amir Abdullahian said the attack "demonstrates the shared goals of terrorists and the Zionist regime", Fars news agency reported. Syrian President Bashar al-Assad portrays the rebels fighting him as foreign-backed, Islamist terrorists, with the same agenda as Israel.

An aide to Supreme Leader Ayatollah Ali Khamenei said on Saturday Iran would consider any attack on Syria as an attack on itself.

In battle-torn Damascus, residents doubted Syria would fight back. One mother of five said she had heard retaliation would come later. "They always say that. They'll retaliate, but later, not now. Always later," she said, and laughed.

"The last thing we need now is Israeli fighter jets to add to our daily routine. As if we don't have enough noise and firing keeping us awake at night."

BLASTS SHOOK DISTRICT

Details of Wednesday's strike remain sketchy and, in parts, contradictory. Syria said Israeli warplanes, flying low to avoid detection by radar, crossed into its airspace from Lebanon and struck the Jamraya military research centre.

But the diplomats and rebels said the jets hit a weapons convoy heading from Syria to Lebanon and the rebels said they - not Israel - attacked Jamraya with mortars.

One former Western envoy to Damascus said the discrepancy between the accounts might be explained by Jamraya's proximity to the border and the fact that Israeli jets hit vehicles inside the complex as well as a building.

The force of the dawn attack shook the ground, waking nearby residents from their slumber with up to a dozen blasts, two sources in the area said.

"We were sleeping. Then we started hearing rockets hitting the complex and the ground started shaking and we ran into the basement," said a woman who lives adjacent to the Jamraya site.

The resident, who declined to be named because of the sensitivity over the strike, said she could not tell whether the explosions which woke her were the result of an aerial attack.

Another source who has a relative working inside Jamraya said a building inside the complex had been cordoned off and flames were seen rising from the area after the attack.

"It appears that there were about a dozen rockets that appeared to hit one building in the complex," the source, who also asked not to be identified, told Reuters. "The facility is closed today."

Israeli newspapers quoted foreign media on Thursday for reports on the attack. Journalists in Israel are required to submit articles on security and military issues to the censor, which has the power to block any publication of material it deems could compromise state security.

Syrian state television said two people were killed in the raid on Jamraya, which lies in the 25-km (15-mile) strip between Damascus and the Lebanese border. It described it as a scientific research centre "aimed at raising the level of resistance and self-defense".

Diplomatic sources from three countries told Reuters that chemical weapons were believed to be stored at Jamraya, and that it was possible that the convoy was near the large site when it came under attack. However, there was no suggestion that the vehicles themselves had been carrying chemical weapons.

"The target was a truck loaded with weapons, heading from Syria to Lebanon," said one Western diplomat, echoing others who said the convoy's load may have included anti-aircraft missiles or long-range rockets.

The raid followed warnings from Israel that it was ready to act to prevent the revolt against Assad leading to Syria's chemical weapons and modern rockets reaching either his Hezbollah allies or his Islamist enemies.

A regional security source said Israel's target was weaponry given by Assad's military to fellow Iranian ally Hezbollah.

Such a strike or strikes would fit Israel's policy of pre-emptive covert and overt action to curb Hezbollah and does not necessarily indicate a major escalation of the war in Syria. It does, however, indicate how the erosion of the Assad family's rule after 42 years is seen by Israel as posing a threat.

Israel this week echoed concerns in the United States about Syrian chemical weapons, but its officials say a more immediate worry is that the civil war could see weapons that are capable of denting its massive superiority in airpower and tanks reaching Hezbollah; the group fought Israel in 2006 and remains a more pressing threat than its Syrian and Iranian sponsors.

(Additional reporting by Mariam Karouny and Oliver Holmes in Beirut, Gabriela Baczynska in Moscow and Marcus George in Dubai; editing by David Stamp and Philippa Fletcher)

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