Philippine leader signs US$49b anti-poverty budget






MANILA: Philippine President Benigno Aquino on Wednesday signed into law a 2.005 trillion-peso ($49 billion) budget for 2013, vowing to use higher taxes on tobacco and alcohol to boost programmes to reduce poverty.

Education, health, agriculture and a cash-transfer scheme for the poor are the key priorities of the appropriations, which are 10.5 percent higher than the 2012 national budget, he said during the signing ceremony.

"We designed this budget as an instrument to give the common man the power to control and improve his life," Aquino said.

He thanked parliament for passing earlier this month a controversial rise in "sin taxes" on tobacco and alcohol products, which is expected to bring in over $800 million in extra revenues next year.

Budget Secretary Florencio Abad said the budget law includes 44.2 billion pesos for "conditional cash-transfer", up 12 percent from this year.

The three-year-old scheme gives up to $34 a month to the poorest families who meet certain criteria, like keeping their children in school and getting them as well as pregnant family members regularly to visit government health clinics.

Government officials say this gives their children a better opportunity to climb out of destitution.

More than 26 percent of the Philippines' population of about 100 million are deemed by the government to be living in poverty.

- AFP/al



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CNET's Next Big Thing: the connected revolution



It's been called the Internet of Things, the connected future, the post-PC and even, in our minds, the post-mobile world: however you want to refer to it, the trend toward ubiquitously connected devices and people is inescapable and poised to change everything about the consumer electronics world.


At CNET, we're calling it the post-mobile future: mapping the next frontier of consumer electronics. Because let's be blunt: consumer electronics has been kind of a boring world for the past couple of years. It seems like all we talk about is smartphones and
tablets, tablets and smartphones. Last year's Next Big Thing was the post-PC revolution, and it was too easy to imagine that world devolving into an endless stream of increasingly powerful little touch-screen squares of various sizes.


The Nest Thermostat is an early poster child of an increasingly automated future.

The Nest Thermostat is an early poster child of an increasingly automated future.



(Credit:
Lindsey Turrentine/CBS Interactive)



But the reality is very different, and moving quickly. Yes, smartphones and tablets dominate the landscape--for now. And these devices have already begun to pave the way toward a remarkable future. Already, you can use a phone or tablet to control the temperature in your house, call a taxi that already knows your location, video chat with anyone in the world, lock or unlock the door of your house, start your car, augment reality, or access nearly all the world's information in seconds.


What comes next? All that and more. According to Cisco, one trillion devices will be connected to the Internet in 2013. As SmartThings CTO Jeff Hagins put it during a recent presentation at Le Web in Paris, "the entire world is becoming programmable." It's a trend that has the potential to do nothing less than "change almost everything," according to Forbes.


Ultimately, this connected future comes down to increasingly inexpensive sensors, wireless broadband networks, and imagination.


At
CES, Brian Cooley and I (Molly Wood) will sit down with a high-powered and exciting panel: billionaire investor and entrepreneur Mark Cuban; James Fishler, a senior vice president at LG Electronics USA; Sheryl Connelly, Ford's in-house futurist; and others to talk about the changing face of consumer electronics, the technology industry, and what the connected future might look like.


We'll talk about device design, which can range from wearables like the Nike FuelBand and Google's Project Glass glasses to connected medical devices to smart-home thermostats like Nest, smart appliances, connected
cars that are like wireless command centers on wheels (and increasingly automated, to boot), and even mind-control headbands (yes, those exist now). We'll discuss the increasing challenge of building the networks to support this growing number of devices, whether Wi-Fi or 4G wireless or some future incarnation of connectivity. We'll discuss the business challenges that face existing companies and entrepreneurs looking to capitalize on a fast-moving technological groundswell, and we'll talk about the security and privacy issues that will no doubt slow things down just a tiny bit.


We hope you'll join us for this standing-room-only session on January 8 at 3 p.m. in Las Vegas (North Hall). And if you can't make it in person, don't worry: we'll be live-streaming the whole thing on CNET. See you there, and in the meantime, here's an Always On report from Paris, where the Le Web conference took on this topic, and I was there to interview attendees and participants about the trend.


Episode 25: Torture testing the iPad Mini in Paris!




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UBS to pay $1.5B in fines for rate manipulation

GENEVA Swiss bank UBS has agreed to pay $1.53 billion in fines to resolve allegations that it helped manipulate the benchmark LIBOR interest rate.

UBS announced Wednesday that its board of directors has authorized settlements with U.S., Swiss and British financial regulatory agencies.

Switzerland's largest bank is one of several leading banks under investigation over the possible manipulation of the LIBOR rate, short for London interbank offered rate. The LIBOR rate is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.

In a proposed agreement with the U.S. Department of Justice, UBS has agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates.

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Newtown Settles In for Prayerful, Somber Christmas













Residents of Sandy Hook, Conn., gather every year under an enormous tree in the middle of town to sing carols and light the tree. The tree is lit this year, too, but the scene beneath it is starkly different.


The tree looms over hundreds of teddy bears and toys, but they are for children who will never receive them. The ornaments are adorned with names and jarringly recent birth dates.


Wreaths with pine cones and white ribbons hang near the tree, one each for a life lost. A small statue of an angel child sleeps among a sea of candles.


A steady flow of well-wishers, young and old, tearfully comes to cry, pray, light candles, leave gifts and share hugs and stories.


CLICK HERE for complete coverage of the massacre at Sandy Hook.


The Christmas season is a normally joyful time for this tight-knit village, but in the wake of a shooting rampage, holiday decorations have given way this year to memorial signs. And instead of cars with Christmas trees on top, there are media vans with satellites.


Connie Koch has lived in Newtown for nine years. She lives directly behind Sandy Hook Elementary School, where Adam Lanza, 20, killed 20 children and six adults before turning the gun on himself. Earlier that Friday morning, he had also killed his mother at home.










President Obama on Newtown Shooting: 'We Must Change' Watch Video







Koch said the shocked town, which includes the Village of Sandy Hook, is experiencing a notably different Christmas this year.


"It's more somber, much more time spent in prayer for our victims' families and our friends that have lost loved ones," she said as she stood near the base of the tree.


CLICK HERE for a tribute to the shooting victims.


Her family has been touched by the tragedy is multiple ways.


"My daughter, she lost her child that she babysat for for six years," she said, holding back tears. "And for her friend who lost her mother. And for my dear friend who lost one of her friends in the school, one of the aides.


"It's hard. And there will be much prayer on Christmas morning for these people, for our community."


Koch said her community always rallies in the face of tragedy, but the term "hits close to home" resonates this time more than ever before. She says the only way to make it through is one day at a time.


"It's all you can do, one hour at a time," Koch said. "For me, I don't even want to wake up in the morning because I don't want to have to face it again. You feel like it's still just a dream and with the funerals starting, it's becoming more real. It's becoming more final."


Another Newtown parent, Adam Zuckerman, stood by the makeshift memorial with a roll of red heart stickers with the words, "In Our" above a drawing of the Sandy Hook Elementary School welcome sign. He was selling the stickers to collect money for a Sandy Hook victims' fund.


"It's a lot," he said of the events of the past few days. "We don't know how it's going to affect our community, but I feel very strongly that I needed to do something to keep it positive, to keep this community positive."


Zuckerman's 20-year-old stepdaughter came home from college for winter break the night before the shooting. As a high school student, she worked in one of the town's popular toy stores.


"She knew a lot of the kids," he said of his daughter. "Their parents brought them in over the years. We have other friends who have lost family here and good friends who are dear friends with the principal of the school. … It's pretty rough."






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Insight: Once a symbol of new Afghanistan, can policewomen survive?


KABUL (Reuters) - Shortly after Friba joined the Afghan National Police, she gave herself the nickname "dragon" and vowed to bring law and order to her tormented homeland.


Five years later, she is tired of rebuffing the sexual advances of male colleagues, worries the budget for the female force will shrink and fears the government will abandon them.


Women in the police force were held up as a showcase for Afghan-Western efforts to promote rights in the new Afghanistan, born from the optimism that swept the country after the ouster of the Taliban in 2001.


Images of gun-wielding Afghan policewomen have been broadcast across the globe, even inspiring a television program popular with young Afghan women.


But going from the burqa to the olive green uniform has not been easy.


In Reuters interviews with 12 policewomen in districts across the Afghan capital, complaints of sexual harassment, discrimination and bitter frustration were prevalent.


President Hamid Karzai's goal is for 5,000 women to join the Afghan National Police (ANP) by the end of 2014, when most foreign troops will leave the country.


But government neglect, poor recruitment and a lack of interest on the part of authorities and the male-dominated society mean there are only 1,850 female police officers on the beat, or about 1.25 percent of the entire force.


And it looks to get worse.


Friba, who asked that her second name not be used, says it all when she runs a manicured finger across her throat: "Once foreigners leave we won't even be able to go to the market. We'll be back in burqas. The Taliban are coming back and we all know it."


Conditions for women in Afghanistan have improved significantly since the Taliban were ousted. Women have won back basic rights in voting, education and work since Taliban rule, when they were not allowed out of their homes without a male escort and could be publicly stoned to death for adultery.


But problems persist in the deeply conservative Muslim society scarred by decades of conflict. The United Nations said this month that despite progress, there was a dramatic under reporting of cases of violence against women.


Some female lawmakers and rights groups blame Karzai's government for a waning interest in women's rights as it seeks peace talks with the Taliban, accusations his administration deny.


"We have largely failed in our campaign to create a female police force," said a senior Afghan security official who declined to be identified because of the sensitivity of the subject.


"Mullahs are against it, and the women are seen as not up to the job," he added, referring to Muslim preachers.


Almost a third of the members of the female force work in Kabul, performing duties such as conducting security checks on women at the airport and checking biometric data.


"CONSTANTLY HARASSED"


Friba sat in a city police station room decorated with posters of policemen clutching weapons to talk to Reuters.


"I am the dragon and I can defend myself, but most of the girls are constantly harassed," she said.


"Just yesterday my colleague put his hands on one of the girl's breasts. She was embarrassed and giggled while he squeezed them. Then she turned to us and burst into tears."


On the other side of Kabul, detective Lailoma, who also asked that her family name not be used, said several policewomen under her command had been raped by their male colleagues.


Dyed russet hair poking out from her black hijab, part of the female ANP uniform, Lailoma wrung her hands as she complained about male colleagues: "They want it to be like the time of the Taliban. They tell us every day we are bad women and should not be allowed to work here."


Male colleagues also taunt the women, she added, often preventing them from entering the kitchen, meaning they miss out on lunch.


On several occasions, male colleagues interrupted Reuters interviews in what the policewomen said were attempts to intimidate them into silence.


One male officer entered the room without knocking three times to retrieve pencils; another spent 20 minutes dusting off his hat, only to put it back on a shelf. The women switched subjects when the men came in.


Rana, a 31-year-old, heavy-set policewoman with curly hair, said policewomen were expected to perform sexual favors: "We're expected to do them to just stay in the force."


The raping of policewomen by their male counterparts "definitely takes place", said Colonel Sayed Omar Saboor, deputy director for gender and human rights at the Interior Ministry, which oversees the police.


"These men are largely illiterate and see the women as immoral."


Insecurity, opposition to women working out of the home and sexism deter many women from signing up, said Saboor.


But impoverished widows sometimes have no choice. A starting salary is about 10,500 afghanis a month ($210).


DIFFICULT


The Interior Ministry and foreign organizations responsible for training the women police - NATO, the European Union and the United Nations Development Programme (UNDP) - say recruitment poses the main challenge to the force.


"It is just difficult. There is no real history of women in the police force, there is no precedent, even having an open space for women in employment is a challenge," UNDP Associate Administrator Rebeca Grynspan told Reuters.


A recruitment campaign of television adverts and posters has not produced the desired effect in a country where there are huge social and religious divides between the rural and urban populations. Even fewer join the national army, where some 350 women serve amongst 190,000.


"Much of the male leadership don't want to have anything to do with women in the ANP. Commanders want them out of their units," Saboor said, adding that having 2,500 female police officers could be realistic by end-2014.


Of those who join, few have prospects for promotion. They often find themselves in police stations without proper facilities for women, such as toilets or changing rooms which are vital for the many who hide the fact that they work from their families.


The sprawling Interior Ministry has only recently started work on installing toilets for women. "Ten years of this war have passed, and we're only now building them a toilet," Saboor said with a wry laugh.


For First Lieutenant Naderah Keshmiri, whose humble yet stern approach helps her pursue cases of violence against women, life as a policewoman means being undervalued.


"My male subordinates quickly became generals. But not me. Where's my promotion?" she asked in a UNDP-backed Family Response Unit, which she heads.


The UNDP has set up 33 of the units countrywide, which help increase female visibility in the ANP, with plans to more than double them by 2015.


A Western female police trainer, who spoke on condition of anonymity, said policewomen are almost always passed over for promotion by their male commanders.


U.S. lawmakers are hoping to amend a defense bill by year-end to protect the rights of Afghan women during the security transition. They want to reduce physical and cultural barriers to women joining the security forces.


Ethnicity also plays a role: 55 percent of women in the ANP are ethnic Tajik, Afghanistan's second-largest ethnic group. Recruiting from the largest and most conservative ethnic group, the Pashtuns, is difficult.


The Taliban draw most of their support from the Pashtuns, who dominate the south of the country. Pashtun women make up only 15 percent of the force.


Hazaras, a largely Shi'ite minority who suffered enormous losses at the hands of the Taliban, are overrepresented amongst the women, making up 24 percent, according to figures from NATO's training mission in Afghanistan.


But many of the policewomen are wondering whether their force can survive.


Lowering her voice, Friba whispered: "As soon as the foreigners leave, they'll reduce our salaries. This will not happen to the men. Or perhaps they'll kick us out entirely."


(Editing by Michael Georgy and Robert Birsel)



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Malaysia Airlines to buy 36 turboprop planes






KUALA LUMPUR: Malaysia Airlines on Tuesday said it will buy 36 new ATR turboprop aircraft for 3.0 billion ringgit ($916 million) as it looks to further expand its regional and domestic networks.

Of the 36 ATR-72-600 planes, the carrier said 20 will go to subsidiary Firefly, which is fast expanding its lucrative routes, while 16 are for MASwings which flies to Sarawak and Sabah on Borneo island.

The purchase comes after struggling flag carrier Malaysia Airlines in November said it had swung back to a profit, ending six straight quarterly losses after slashing unprofitable routes to cut costs.

Malaysia Airlines group CEO Ahmad Jauhari Yahya said Firefly is expected to rapidly expand within the next five years, thanks to growing demand in Asia.

"The additional aircraft will be utilised to continue growing Firefly's network and providing customers with more travel options," said Ahmad Jauhari, who signed the deal with Filippo Bagnato, chief executive of French-Italian firm ATR.

The aircraft are slated to be delivered from the end of the second quarter of 2013.

Launched in April 2007, Firefly provides connections to various points within Malaysia, Thailand, Singapore and Indonesia's Sumatra.

Firefly currently has 12 ATR-72-500 aircraft while MASwings operates 10 similar aircraft.

- AFP/al



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NRA's Facebook page shuttered, Twitter activity halted



The NRA posted this photo on Twitter the day before the Newtown school shooting. Now it's Facebook page has completely disappeared.



(Credit:
Screenshot by Dara Kerr/CNET)


In the wake of the Newtown tragedy, when an armed man stormed a Connecticut elementary school and killed 26 people, including 20 children, gun control has been under high scrutiny from both lawmakers and citizens.

The National Rifle Association -- the longtime champion of gun ownership rights -- has stayed conspicuously out of the debate, however. So much so, that it has even ceased all of its social media activity -- its Facebook page was recently shuttered and the group has not posted a single new tweet on its Twitter account.

The last tweet from the NRA was posted at 9:36 a.m. on December 14, which was the day of the massacre, and offered members a holiday giveaway promotion. The group typically posts at least two to three times a day.

One of its most recent tweets, from the day before the Newtown shooting, boasted that its Facebook page topped 1.7 million "likes."

However, the NRA's official Facebook page has now completely disappeared. When users attempt to visit www.facebook.com/nationalrifleassociation, they are immediately navigated to Facebook's homepage. A Facebook spokesperson told CNET that the social network has not taken any action on the NRA's page -- which leads one to surmise that the NRA took it down voluntarily. It's unclear, however, why the Facebook page was taken down. Some reporters, like from the Daily Dot and TechCrunch, believe it's because the page had become the focal point of rage from anti-gun advocates, as well as a place of unruly debate.

CNET contacted the NRA for comment. We'll update the story when we get more information.

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Obama moves on taxes in latest "cliff" counter-proposal

President Obama gave up Monday on his demand for higher taxes on households earning $250,000 and upped it to $400,000 while embracing smaller cost-of-living Social Security raises in a counter-proposal to House Speaker John Boehner meant to narrow differences and forge a pre-Christmas "fiscal cliff" deal.

Mr. Obama and Boehner met for nearly an hour in the Oval Office on Monday and sources familiar with the talks released specific details of the White House proposal.

Boehner aides said it brought the two sides closer but said a deal was not at hand.

"Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced," said Brendan Buck, a Boehner spokesman.

Other senior Republican aides told reporters on Capitol Hill they are not rejecting the latest White House offer, but they also said that there is not parity or balance in the White House plan and substantive issues remain unresolved. One senior aide said the issues that they are talking about are not technically difficult to resolve, but they were wary the differences might be fundamental issues that are difficult to resolve.


But the depth, specificity and fine-grain nature of discussions over policy, tax revenue and spending cuts belied the tough rhetoric from the two sides in the negotiation. Signs point to a deal before the New Year's fiscal cliff deadline -- and possibly an announcement as early as Wednesday.




Play Video


Boehner's "fiscal cliff" offer brings optimism to Capitol Hill






Play Video


Boehner's "fiscal cliff" concessions come with a price



Talks picked up genuine momentum on Friday when Boehner agreed to higher income tax rates on households earning $1 million and above. Previously, Boehner opposed all income tax increases. He also gave in on raising the debt ceiling, a vote some Republicans wanted to use as leverage against Obama in 2013. Both gestures, top White House aides said, broke the logjam.

Mr. Obama responded with big concessions of his own on Monday. He offered a $400,000 income threshold for a Clinton-era top tax bracket of 39.6 percent. Boehner had proposed that tax rate for millionaires and a total 10-year tax revenue figure of $1 trillion. Obama wants $1.2 trillion in new revenue. Both sides look for hundreds of billions in new revenue in 2013 through a tax reform process that eliminates some tax deduction and closes loopholes.


The president also wants a two-year ceasefire on raising the debt ceiling. Boehner offered one year.


In addition to disagreement on income levels for tax rates or some other way to get more revenue, the two sides have not set in stone an actual tax reform process. It sounds like they are talking about creating a new sequester-like mechanism in 2014 as incentive for both tax reform and entitlement reforms.


Speaking of entitlements, Boehner also asked the White House to increase the eligibility age for Medicare but Mr. Obama again refused. This difference could loom large as Republicans want structural cost-saving changes in Medicare in exchange for raising income tax rates.

Mr. Obama has given ground on cost-of-living adjustments to Social Security and other federal benefits, but is trying to shield Medicare. Democrats have warned Obama they might bolt if he folds on raising Medicare's eligibility age. They have been less emphatic about cost-of-living adjustments.

Other components of the president's counter-proposal include:


  • $1.2 trillion in new income tax revenue with a 39.6 percent (up from 35 percent) on income of $400,000 or more.
  • $1.2 trillion in spending cuts divided this way: $800 billion in cuts; $290 billion in interest savings due to lower deficits; $130 billion in cost-of-living adjustments - - with specific protections to preserve increases for economically disadvantaged beneficiaries. Because changing cost-of-living adjustments would also affect where people fell in various tax brackets, this move would raise $90 billion
  • The $800 billion in cuts would come from $400 billion in savings to health care entitlements like Medicare and Medicaid; $200 billion in better tax revenue collection, increased financial transaction fees and reduced federal employee benefits.
  • $200 billion in domestic discretionary -- annual spending on basic government functions - divided equally between defense and non-defense programs.
  • At least $50 billion devoted next year to infrastructure spending and more in latter years - figures still subject to negotiation.
  • A one-year extension of unemployment insurance benefits.

Both sides have already agreed to create long-term solutions for the annual ritual of adjusting the Alternative Minimum Tax, the reimbursement formulas for Medicare physicians and a grab-bag of pro-business tax breaks.

Obama also did not ask for an extension of the temporary 2 percent payroll tax - a priority for some Democrats.

Funding for Superstorm Sandy will be handled separately from the emerging fiscal cliff package. The Senate is considering the administration's $60.4 billion request and the White House expects swift, bipartisan approval.

CBS News Capitol Hill producer Jill Jackson contributed to this report.

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Conn. Kids Laid to Rest: 'Our Hearts Are With You'













Visibly shaken attendees exiting the funeral today for 6-year-old Noah Pozner, one of 20 children killed in the Connecticut school massacre last week, said they were touched by a story that summed up the first-grader best.


His mother, Veronique, would often tell him how much she loved him and he'd respond: "Not as much as I [love] you," said a New York man who attended the funeral but was not a member of the family.


Noah's family had been scheduled to greet the public before the funeral service began at 1 p.m. at the Abraham L. Green & Son Funeral Home in Fairfield, Conn. The burial was to follow at the B'nai Israel Cemetery in Monroe, Conn. Those present said they were in awe at the composure of Noah's mother.


Rabbi Edgar Gluck, who attended the service, said the first person to speak was Noah's mother, who told mourners that her son's ambition when he grew up was to be either a director of a plant that makes tacos -- because that was his favorite food -- or to be a doctor.


Outside the funeral home, a small memorial lay with a sign reading: "Our hearts are with you, Noah." A red rose was also left behind along with two teddy bears with white flowers and a blue toy car with a note saying "Noah, rest in peace."


CLICK HERE for complete coverage of the tragedy at Sandy Hook.






Don Emmert/AFP/Getty Images













President Obama on Newtown Shooting: 'We Must Change' Watch Video







The funeral home was adorned with white balloons as members of the surrounding communities came also to pay their respects, which included a rabbi from Bridgeport. More than a dozen police officers were at the front of the funeral home, and an ambulance was on standby at a gas station at the corner.


U.S. Sen. Richard Blumenthal, U.S. Rep. and Sen.-Elect Chris Murphy and Gov. Dannel P. Malloy, all of Connecticut, were in attendance, the Connecticut Post reported.


Noah was an inquisitive boy who liked to figure out how things worked mechanically, The Associated Press reported. His twin sister, Arielle, was one of the students who survived when her teacher hid her class in the bathroom during the attack.


CLICK HERE for a tribute to the shooting victims.


The twins celebrated their sixth birthday last month. Noah's uncle Alexis Haller told the AP that he was "smart as a whip," gentle but with a rambunctious streak. He called his twin sister his best friend.


"They were always playing together, they loved to do things together," Haller said.


The funeral for Jack Pinto, 6, was also held today, at the Honan Funeral Home in Newtown. He was to be buried at Newtown Village Cemetery.


Jack's family said he loved football, skiing, wrestling and reading, and he also loved his school. Friends from his wrestling team attended his funeral today in their uniforms. One mourner said the message during the service was: "You're secure now. The worst is over."


Family members say they are not dwelling on his death, but instead on the gift of his life that they will cherish.


The family released a statement, saying, Jack was an "inspiration to all those who knew him."


"He had a wide smile that would simply light up the room and while we are all uncertain as to how we will ever cope without him, we choose to remember and celebrate his life," the statement said. "Not dwelling on the loss but instead on the gift that we were given and will forever cherish in our hearts forever."


Jack and Noah were two of 20 children killed Friday morning at Sandy Hook Elementary School in Newtown, Conn., when 20-year-old Adam Lanza sprayed two first-grade classrooms with bullets that also killed six adults.






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Syrian rebels take control of Damascus Palestinian camp


BEIRUT (Reuters) - Syrian rebels took full control of the Yarmouk Palestinian refugee camp on Monday after fighting raged for days in the district on the southern edge of President Bashar al-Assad's Damascus powerbase, rebel and Palestinian sources said.


The battle had pitted rebels, backed by some Palestinians, against Palestinian fighters of the pro-Assad Popular Front for the Liberation of Palestine-General Command (PFLP-GC). Many PFLP-GC fighters defected to the rebel side and their leader Ahmed Jibril left the camp two days ago, rebel sources said.


"All of the camp is under the control of the (rebel) Free Syrian Army," said a Palestinian activist in Yarmouk. He said clashes had stopped and the remaining PFLP fighters retreated to join Assad's forces massed on the northern edge of the camp.


The battle in Yarmouk is one of a series of conflicts on the southern fringes of Assad's capital, as rebels try to choke the power of the 47-year-old leader after a 21-month-old uprising in which 40,000 people have been killed.


Government forces have used jets and artillery to try to dislodge the fighters but the violence has crept into the heart of the city and activists say rebels overran three army stations in a new offensive in the central province of Hama on Monday.


On the border with Lebanon, hundreds of Palestinian families fled across the frontier following the weekend violence in Yarmouk, a Reuters witness said.


Syria hosts half a million Palestinian refugees, most living in Yarmouk, descendants of those admitted after the creation of Israel in 1948, and has always cast itself as a champion of the Palestinian struggle, sponsoring several guerrilla factions.


Both Assad's government and the mainly Sunni Muslim Syrian rebels have enlisted and armed divided Palestinian factions as the uprising has developed into a civil war.


"NEITHER SIDE CAN WIN"


Syrian Vice President Farouq al-Sharaa said in a newspaper interview published on Monday that neither Assad's forces nor rebels seeking to overthrow him can win the war.


Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely been seen since the revolt erupted in March 2011 and is not part of the president's inner circle directing the fight against Sunni rebels. But he is the most prominent figure to say in public that Assad will not win.


Sharaa said the situation in Syria was deteriorating and a "historic settlement" was needed to end the conflict, involving regional powers and the U.N. Security Council and the formation of a national unity government "with broad powers".


"With every passing day the political and military solutions are becoming more distant. We should be in a position defending the existence of Syria. We are not in a battle for an individual or a regime," Sharaa was quoted as telling Al-Akhbar newspaper.


"The opposition cannot decisively settle the battle and what the security forces and army units are doing will not achieve a decisive settlement," he said, adding that insurgents fighting to topple Syria's leadership could plunge it into "anarchy and an unending spiral of violence".


Sources close to the Syrian government say Sharaa had pushed for dialogue with the opposition and objected to the military response to an uprising that began peacefully.


In a veiled criticism of the crackdown, he said there was a difference between the state's duty to provide security to its citizens, and "pursuing a security solution to the crisis".


He said even Assad could not be certain where events in Syria were leading, but that anyone who met him would hear that "this is a long struggle...and he does not hide his desire to settle matters militarily to reach a final solution."


In Hama province, rebels and the army clashed in a new campaign launched on Sunday by rebels to block off the country's north, activists said.


The Syrian Observatory for Human Rights, an opposition-linked violence monitor, said fighting raged through the provincial towns of Karnaz, Kafar Weeta, Halfayeh and Mahardeh.


It said there were no clashes reported in Hama city, which lies on the main north-south highway connecting the capital with Aleppo, Syria's second city.


Qassem Saadeddine, a member of the newly established rebel military command, said on Sunday fighters had been ordered to surround and attack army positions across the province. He said Assad's forces were given 48 hours to surrender or be killed.


In 1982 Hafez al-Assad, father of the current ruler, crushed an uprising in Hama city, killing up to 30,000 civilians.


Qatiba al-Naasan, a rebel from Hama, said the offensive would bring retaliatory air strikes from the government but that the situation is "already getting miserable".


(Additional reporting by Oliver Holmes, Erika Solomon and Dominic Evans in Beirut, Afif Diab at Masnaa, Lebanon; editing by Philippa Fletcher)



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