Britain braces for key budget update






LONDON: British finance minister George Osborne unveils his budget update on Wednesday, and will likely admit it could take longer than expected to slash the deficit as a result of the weaker-than-expected economy.

Chancellor of the Exchequer Osborne was to deliver his Autumn Statement before parliament at 1230 GMT, when the Office for Budget Responsibility (OBR) fiscal watchdog will also publish its latest growth and borrowing forecasts.

Osborne has already warned that economic recovery will take longer than hoped but insisted that abandoning the government's tough deficit-slashing austerity measures would be catastrophic amid the ongoing eurozone debt crisis.

"We had two targets, one was to get debt share falling as a share of national income by 2015/16 and also to balance the current budget," the chancellor told BBC television over the weekend.

"It's clearly taking longer to deal with Britain's debts; it's clearly taking longer to recover from the financial crisis than anyone would have hoped but we have made real progress."

Ahead of the budget update, Osborne pledged Tuesday to invest £5.0 billion in schools, transport and science over the next two fiscal years, with the cash sourced from a new raft of spending cuts across most civil service departments.

And on Monday, Osborne launched a campaign against "tax dodgers" and "cowboy advisers" to claw back £2.0 billion a year, as lawmakers alleged that multinationals such as Starbucks and Google are avoiding huge tax bills.

The OBR was meanwhile expected to lower its gross domestic product (GDP) forecasts as the economy faces major headwinds from state austerity, inflationary pressures and the eurozone's ongoing crisis.

Osborne had in March forecast that the British economy would grow by 0.8 per cent this year, followed by 2.0 per cent in 2013 and 2.7 per cent in 2014.

Weaker economic growth would slash taxation receipts and spark upward revisions to its official borrowing targets, according to analysts.

Alongside Osborne's budget in March, the OBR predicted that public sector net borrowing (PSNB) as a proportion of economic output would begin to fall in 2015/2016, after peaking at 76.3 per cent of GDP in 2014/15.

And it forecast state borrowing would reach £120 billion ($192 billion, 148 billion euros) in the 2012/2013 financial year ending in March, compared with £121.4 billion in 2011/2012.

But with PSNB already standing at £73.3 billion and four months of the financial year to go, Osborne could breach the target.

Recent official data showed Britain had escaped from recession in the third quarter of this year, with its economy growing 1.0 per cent.

However, experts argue this was due to one-off factors like the London Olympics and rebounding activity after public holidays in the second quarter.

The Conservative-Liberal Democrat coalition government imposed austerity measures to slash a record deficit inherited from the previous Labour administration. Opposition Labour politicians maintain that the cuts pushed the economy into a painful double-dip recession.

The Organisation for Economic Co-operation and Development urged Osborne last week to push back his debt reduction targets rather than drive through more growth-damaging austerity.

Meanwhile, the country's official statistics watchdog on Tuesday warned the government to stop claiming that real-terms National Health Service spending had increased after calculating funds had actually fallen slightly.

The UK Statistics Authority said Health Secretary Jeremy Hunt should "clarify" claims on the Conservative party website that "we have increased the NHS budget in real terms in each of the last two years".

- AFP/ck



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India urges Israel to speed up defence projects

NEW DELHI: India has asked Israel to speed up crucial bilateral defence projects, including the around Rs 13,000 crore development of two advanced surface-to-air missile (SAM) systems to arm Indian armed forces against hostile aircraft, drones and helicopters.

This came at the 10th joint working group on defence cooperation here, co-chaired by defence secretary Shashikant Sharma and Israeli defence ministry director-general Major-General Ehud Shani.

While the regional and global security situation, including the recent Israel-Hamas ceasefire, figured in the talks, the focus was on bilateral defence training programmes, exchanges, R&D projects and armament deals.

Israel is India's second largest defence supplier, second only to Russia, but the expansive ties are largely kept under wraps due to political sensitivities. Tel Aviv records military sales worth around $1 billion to New Delhi every year, ranging from Heron and Searcher UAVs, Harpy and Harop 'killer' drones to Barak anti-missile defence systems and Green Pine radars, Python and Derby air-to-air missiles.

Sources said India expressed "concern'' at the "two-year delay'' in completion of the long-range SAM (LR-SAM) project, sanctioned in December 2005 at a cost of Rs 2,606 crore to arm Indian warships.

There are "minor hitches'' even in the bigger Rs 10,076 crore medium-range SAM (MR-SAM) project, sanctioned in February 2009 for air defence squadrons of IAF.

Both the SAM systems, being developed by Israeli Aerospace Industries (IAI) in collaboration with DRDO, have the same missile with an interception range of 70-km. They are to be produced in bulk by defence PSU Bharat Dynamics (BDL) to plug the existing holes in India's air defence cover.

"While the multi-function surveillance and threat radars, weapon control systems with data links and the like of the LR-SAM have all been tested, there has been delay in the missiles being developed by IAI,'' said a source.

"But the Israelis said everything was sorted out now and they will try to make up for the delay. DRDO has already finished its work on the propulsion and other systems,'' he added. Incidentally, the LR-SAM project was to be completed by May this year.

Another major missile project, worth around $1 billion, that Israel could bag is the one to supply third-generation anti-tank guided missiles (ATGMs) to the 1.13-million strong Indian Army. The Army has already trial-evaluated the Israeli 'Spike' ATGM after the US offer of its 'Javelin' missiles was shelved due to Washington's reluctance to undertake "transfer of technology'' to ensure BDL can make them in large numbers, as reported by TOI earlier.

India is also in commercial negotiations for another two advanced Israeli Phalcon AWACS (airborne warning and control systems), capable of detecting hostile aircraft, cruise missiles and other incoming aerial threats far before ground-based radars, at a cost of over $800 million. The first three Phalcon AWACS were inducted by IAF in 2009-2010 under the $1.1 billion tripartite agreement between India, Israel and Russia.

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Study: Drug coverage to vary under health law


WASHINGTON (AP) — A new study says basic prescription drug coverage could vary dramatically from state to state under President Barack Obama's health care overhaul.


That's because states get to set benefits for private health plans that will be offered starting in 2014 through new insurance exchanges.


The study out Tuesday from the market analysis firm Avalere Health found that some states will require coverage of virtually all FDA-approved drugs, while others will only require coverage of about half of medications.


Consumers will still have access to essential medications, but some may not have as much choice.


Connecticut, Virginia and Arizona will be among the states with the most generous coverage, while California, Minnesota and North Carolina will be among states with the most limited.


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Online:


Avalere Health: http://tinyurl.com/d3b3hfv


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Suspect Allegedly Told Cops He Traveled to Kill













A man charged in the death of a teenage barista in Alaska told police that he traveled the country with the sole purpose to kill strangers because he "liked to do it," prosecutors said today.


Vermont and federal prosecutors detailed the meticulous and cold-blooded murder of Bill and Lorraine Currier in Essex, Vt., last year and said the information came from Israel Keyes before he killed himself in an Alaska jail cell Sunday. Keyes provided details that only the perpetrator would know, police said.


Keyes, 34, the owner of an Anchorage construction company, was in jail charged with the February murder of Samantha Koenig, 18. While in jail he had been confessing to at least seven other killings in Washington, New York and Vermont.


Now that he is dead, investigators are wondering how many more killings Keyes might be responsible for and why he committed the crimes.


"He provided some motivation, but I don't think it's really [possible] to pigeonhole why he did this," Tristram Coffin, U.S. Attorney in Vermont, said at a news conference today. "He described to investigators that this was a volitional act of his. He wasn't compelled by some uncontrollable force, but it was something that he could control and he liked to do it. Why someone likes to act like that, nobody knows."










Missing Alaska Barista Had Past Restraining Order Watch Video







Authorities described the murders of the Curriers in great detail, offering insight into how the twisted killer traveled to murder, his criteria for choosing random victims and his careful planning of of the murders.


"When [Keyes] left Alaska, he left with the specific purpose of kidnapping and murdering someone," Chittenden County State Attorney T. J. Donovan said at the press conference. "He was specifically looking for a house that had an attached garage, no car in the driveway, no children, no dog."


The Curriers, unfortunately, fit all of Keyes' criteria. He spent three days in Vermont before striking. He even took out a three-day fishing license and fished before the slayings.


In June 2011, Keyes went to their house and cut a phone line from outside and made sure they did not have a security system that would alert police. He donned a head lamp and broke into their house with a gun and silencer that he had brought with him.


Keyes found the couple in bed and tied them up with zip ties. He took Lorraine Currier's purse and wallet as well as Bill Currier's gun. He left the man's wallet.


He put the couple in their own car and drove them to an abandoned farmhouse that he had previously scoped out. Keyes tied Bill Currier to a stool in the basement and went back to the car for Lorraine Currier.


"Keyes saw that Lorraine had broken free from the zip ties and observed that she was running towards Main Street," Donovan said. "He tackled her to regain control of her."


Keyes took Lorraine Currier to the second floor of the farmhouse and tied her up. He rushed to the basement when he heard commotion and found that Bill Currier's stool had broken and he was partially free.






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Syrian spokesman flees country, diplomat says

CAIRO/BEIRUT (Reuters) - A Syrian foreign ministry spokesman, who was the most public face of Bashar al-Assad's government as it battled a 20-month-old uprising, has fled the country, a diplomat in the region said on Monday.


Jihad al-Makdissi, who is in his 40s, previously worked at the Syrian embassy in London and returned to Damascus a year ago to serve as spokesman for the ministry, defending the government's crackdown on the revolt against Assad's rule.


He had little influence in a system largely run by the security apparatus and the military. But Assad's opponents will see the loss of such a high profile figure, if confirmed, as further evidence of a system crumbling from within.


Rebel forces have made advances in recent weeks, seizing military bases including some close to the capital Damascus. Amid talk that troops had moved chemical weapons, U.S. President Barack Obama again warned Assad against using them.


Makdissi belongs to Syria's Christian minority, which has largely stood behind Assad. He worked with the foreign ministry for 10 years and speaks fluent English, a rarity in a state apparatus shaped by the Baath Party's anti-Western ideology.


"He defected. All I can say is that he is out of Syria," the diplomatic source, who did not want to be named, told Reuters.


Lebanon's al-Manar Television, citing government sources, said Makdissi was sacked for making statements that did not reflect the government's position.


He was rarely seen in the media in recent weeks. His mobile telephone was switched off and there was no immediate comment in Syrian state media. The pan-Arab news channel Al Arabiya said Makdissi had left Beirut and was on his way to London, where he was expected to remain.


"We're aware of reports that he has defected and may be coming to the UK. We're seeking clarification," a Foreign Office spokeswoman said.


CHEMICAL WEAPONS


Rebels have begun to advance more quickly after months of slow sieges to cut off army routes and supplies. In the past few weeks, they seized several military bases, and are now using anti-aircraft weapons to attack the military helicopters and fighter jets that had bombarded their positions with impunity.


Media reports citing European and U.S. officials said Syria's chemical weapons had been moved and could be prepared for use in response - long a fear raised by the opposition.


White House spokesman Jay Carney said U.S. concerns about Syria's intentions regarding the use of chemical weapons were increasing, prompting Washington to make contingency plans.


Syria said it would not use chemical weapons against its own people: "Syria has stressed repeatedly that it will not use these types of weapons, if they were available, under any circumstances against its people," the foreign ministry said.


Obama, who has steered clear of repeating in Syria the kind of military engagements Washington has seen in Iraq, Afghanistan or Libya, later repeated a warning to Assad - vaguely worded - against using chemical weapons to keep himself in power:


"The world is watching," Obama said. "The use of chemical weapons is and would be totally unacceptable and if you make the tragic mistake of using these weapons there will be consequences and you will be held accountable."


DAMASCUS BATTLES


The army appears to have focused most of its energy on Damascus, where rebels have been planning to push into the capital from the surrounding suburbs.


The military has been trying to seal off the city, using heavy bombardment and air raids to try to drive rebels back. Over 56 people were killed around Damascus alone on Sunday, with 200 dead across the country.


Damascus itself has not been free of unrest. Rebel-held southern districts have been bombarded heavily, activists say. The Syrian Observatory for Human Rights reported fierce clashes around the Tishreen military hospital in the northern Barzeh district and a car bomb in the southern area of Tadamon.


Neither side appears to have the upper hand in the fighting around Damascus. A previous attempt by rebels last July to hold ground in the city was crushed, but the fighters fell back into the suburbs and nearby countryside.


Clashes and tensions also remain high around Damascus International Airport and along the airport highway, which has become an on-and-off battleground that forced foreign airlines to suspend flights to Damascus since Thursday evening.


EgyptAir, which tried to resume flights on Monday, had to call back a plane headed to Damascus due to the "bad security situation" around the airport, an airline official said.


The conflict has grown increasingly bloody in recent months, as rebels began to contest Assad's power around the capital as well as in Aleppo, Syria's largest city. More than 40,000 people have died in the conflict, with hundreds more killed each week.


The United Nations said on Monday it was withdrawing "all non-essential international staff" from Syria because of deteriorating security, and was restricting remaining staff to Damascus. It said more armored vehicles were needed following attacks on humanitarian aid convoys sometimes caught in the crossfire.


A European Union official said the EU was pulling international staff from Damascus because of the security situation and its ambassador to Syria had ended his posting.


(Editing by Philippa Fletcher and Alastair Macdonald; Reporting by Khaled Yacoub Oweis, Erika Solomon, Additional reporting by Mohammed Abbas; Editing by Michael Roddy)


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Police raid highway operator over Japan tunnel collapse






TOKYO: Japanese police on Tuesday raided offices belonging to a highway operator over a weekend tunnel collapse that killed nine people.

More than eight officers from the Yamanashi Police Department entered the office of NEXCO in Hachioji, western Tokyo, a spokesman for the highway operator said.

"We are fully cooperating with the authorities over the accident," the spokesman told AFP.

Police also plan to raid more of the company's offices in connection with the tragedy at the Sasago tunnel, which passes through hills near Mount Fuji, Japanese broadcaster NHK said.

On Monday, the Japanese government ordered inspections of ageing highway tunnels following the accident as suspicion over the cause of the accident centred on decaying ceiling supports.

- AFP/fa/ck



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Shimla takes first step towards modern transportation

SHIMLA: Shimla residents can now hope to get a new transportation system in the near future with Global Energy Basil (GBL) of Germany, a partner of European Union, showing keen interest in Rs 3,000cr comprehensive mobility plan prepared by Shimla municipal corporation. Having shortlisted Shimla for funding purpose, GBL has invited Shimla municipal corporation for presentation in January.

Shimla town faces a serious problem of traffic congestion due to peculiar geography and age-old construction. The road infrastructure was created during the British rule to cater to the needs of the then population, and little progress has been made till now. With the passage of time, increase in population and inflow of tourists further increased the problems.

To decongest Shimla, Himachal Pradesh government has decided to form satellite towns on the outskirts to save original character of the city which otherwise is bursting at seams with over-population and over-construction. Three satellite towns have been proposed at Vaknaghat on Shimla-Chandigarh highway, Fagu on Shimla-Rampur highway and Ghandal in-between Ghanahatti and Shalaghat on Shimla-Bilaspur highway.

If GBL agrees to fund the comprehensive mobility plan of Shimla, the city would get relief from traffic congestion and pollution. Sources said that GBL has already funded around 40 such projects in other parts of the world, including Beijing, Kampala and Islamabad.

Comprehensive mobility plan submitted to Global Energy Basil has provision of regulating 48,000 vehicles in the city in a planned manner. Submitted plan has the provision for ropeways at the cost of $623 million and tunnels estimated at $63 million, sources said.

Confirming the development, municipal commissioner Dr M P Sood said that acceptance of proposal by GBL is a big success. "For the first time, a mega project has been planned for Shimla and in January, a presentation would be made to GBL during its annual convention," he said.

Sood said that after Kochin, Shimla is second city in India where GBL has shown interest to fund the project. "The project envisages cable ropeways, mono rail, widening of existing corridors and construction of escalators," he said.

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Fossil fuel subsidies in focus at climate talks

DOHA, Qatar (AP) — Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to climate change, it's more like a curse.

Qatar — the host of U.N. climate talks that entered their final week Monday — is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support — an imbalance that is just starting to earn attention in the divisive negotiations on curbing the carbon emissions blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an advocacy group for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for Economic Cooperation and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in climate negotiations, which in two decades have failed to halt the rising temperatures that are melting Arctic ice, raising sea levels and shifting weather patterns with impacts on droughts and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned climate treaty is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with climate change.

"It's going to oil and coal companies that don't need it in the first place," he said.

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Associated Press writers Abdullah Rebhy in Doha, Qatar, and Brian Murphy in Dubai, United Arab Emirates, contributed to this report

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Karl Ritter can be reached at www.twitter.com/karl_ritter

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Boehner on Fiscal Cliff Talks: 'You Can't Be Serious'













President Obama and his White House team appear to have drawn a line in the sand in talks with House Republicans on the "fiscal cliff."


Tax rates on the wealthy are going up, the only question is how much?


"Those rates are going to have to go up," Treasury Secretary Tim Geithner flatly stated on ABC's "This Week." "There's no responsible way we can govern this country at a time of enormous threat, and risk, and challenge ... with those low rates in place for future generations."


But the president's plan, which Geithner delivered last week, has left the two sides far apart.


In recounting his response today on "Fox News Sunday," House Speaker John Boehner said: "I was flabbergasted. I looked at him and said, 'You can't be serious.'


"The president's idea of negotiation is: Roll over and do what I ask," Boehner added.


The president has never asked for so much additional tax revenue. He wants another $1.6 trillion over the next 10 years, including returning the tax rate on income above $250,000 a year to 39.6 percent.






TOBY JORRIN/AFP/Getty Images















Obama Balances Fiscal Cliff, Defense Department Appointment Watch Video





Boehner is offering half that, $800 billion.


In exchange, the president suggests $600 billion in cuts to Medicare and other programs. House Republicans say that is not enough, but they have not publicly listed what they would cut.


Geithner said the ball is now in the Republicans' court, and the White House is seemingly content to sit and wait for Republicans to come around.


"They have to come to us and tell us what they think they need. What we can't do is to keep guessing," he said.


The president is also calling for more stimulus spending totaling $200 billion for unemployment benefits, training, and infrastructure projects.


"All of this stimulus spending would literally be more than the spending cuts that he was willing to put on the table," Boehner said.


Boehner also voiced some derision over the president's proposal to strip Congress of power over the country's debt level, and whether it should be raised.


"Congress is not going to give up this power," he said. "It's the only way to leverage the political process to produce more change than what it would if left alone."


The so-called fiscal cliff, a mixture of automatic tax increases and spending cuts, is triggered on Jan. 1 if Congress and the White House do not come up with a deficit-cutting deal first.


The tax increases would cost the average family between $2,000 and $2,400 a year, which, coupled with the $500 billion in spending cuts, will most likely put the country back into recession, economists say.



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Egypt's top court shuts down, blames Islamist protesters

CAIRO (Reuters) - Protests by Islamists allied to President Mohamed Mursi forced Egypt's highest court to adjourn its work indefinitely on Sunday, intensifying a conflict between some of the country's top judges and the head of state.


The Supreme Constitutional Court said it would not convene until its judges could operate without "psychological and material pressure", saying protesters had stopped the judges from reaching the building.


Several hundred Mursi supporters had protested outside the court through the night ahead of a session expected to examine the legality of parliament's upper house and the assembly that drafted a new constitution, both of them Islamist-controlled.


The cases have cast a legal shadow over Mursi's efforts to chart a way out of a crisis ignited by a November 22 decree that temporarily expanded his powers and led to nationwide protests against him and his Muslim Brotherhood group.


The court's decision to suspend its activities appeared unlikely to have any immediate impact on Mursi's drive to get the new constitution passed in a national referendum on December 15.


Judges supervise voting in Egypt, and Mursi will need them to oversee the referendum.


But in a blow to the president, an influential body representing judges decided on Sunday not to oversee the vote, the state news agency reported. The Judges' Club's decisions are not binding on members, however.


Vice President Mahmoud Mekky said on Sunday he was confident the judges would perform that role, despite calls by Mursi's critics in the judiciary for a boycott.


Three people have been killed and hundreds wounded in protests and counter-demonstrations over Mursi's decree.


At least 200,000 of Mursi's supporters attended a rally at Cairo University on Saturday. His opponents are staging an open-ended sit-in in Cairo's Tahrir Square, the cradle of the uprising that toppled Hosni Mubarak in February 2011.


The National Salvation Front, an alliance of liberal, leftist and socialist opposition groups, called for protests in Tahrir Square on Tuesday against Mursi holding the referendum on what it branded an "illegitimate constitution".


Mursi and the Muslim Brotherhood, which propelled him to power in a June election, hope to end the crisis by pushing through the new constitution hastily adopted by the drafting assembly on Friday. The next day the assembly handed the text to Mursi, who called the referendum and urged Egyptians to vote.


"The Muslim Brotherhood is determined to go ahead with its own plans regardless of everybody else. There is no compromise on the horizon," said Hassan Nafaa, a professor of political science at Cairo University.


DEEP SUSPICION


Outside the Supreme Constitutional Court, Muslim Brotherhood supporters rallied behind the referendum date. "Yes to the constitution," said a banner held aloft by one protester. Chants demanded the "purging of the judiciary".


The interior minister told the head of the court that the building was accessible and that the protests were peaceful, according a statement from the ministry.


The protest reflected the deep suspicion harbored by Egypt's Islamists towards a court they see as a vestige of the Mubarak era. The same court ruled in June to dissolve the Muslim Brotherhood-led lower house of parliament.


Since then, several legal cases have challenged the legitimacy of the upper house of parliament and the 100-member constituent assembly that wrote the constitution.


Those against the upper house have focused on the legality of the law by which it was elected, while the constitutional assembly has faced a raft of court cases alleging that the way it was picked was illegal.


Mursi believes securing approval for the new constitution in a popular referendum will bury all arguments on the legality of the constituent assembly, as well as controversy over the text it worked through the night to finish on Friday.


It will also override the November 22 decree that drew concern from Western governments and a rebellion by sections of the judiciary. The decree shielded Mursi from judicial oversight.


While the Islamists' critics, including representatives of the Christian minority, have accused the Brotherhood of trying to hijack the constitution, investors appear to have seen Mursi's moves as a harbinger of stability. They were also relieved that Saturday's mass Islamist protest went off calmly.


The main stock market index, which lost a tenth of its value in response to Mursi's November 22 decree, rallied more than 2 percent when the market opened on Sunday.


"The events that took place through the weekend, from the approval of the final draft of the constitution and the president calling a referendum, gave some confidence to investors that political stability is on track," said Mohamed Radwan of Pharos Securities, an Egyptian brokerage.


OPPOSITION INFURIATED


But opposition parties have been infuriated by what they see as the Brotherhood's attempt to ram through a constitution that does not enjoy national consensus. Mursi's opponents warn of deeper polarization ahead.


Liberal figures, including former Arab League chief Amr Moussa, pulled out of the constituent assembly last month, as did Christian representatives.


The draft constitution contains Islamist-flavored language which opponents say could be used to whittle away human rights and stifle criticism. It forbids blasphemy and "insults to any person", does not explicitly uphold women's rights and demands respect for "religion, traditions and family values".


New York-based Human Rights Watch said the draft constitution protected some rights while undermining others.


The text limits presidents to two four-year terms, requires parliamentary approval for their choice of prime minister, and introduces some civilian oversight of the military - although not enough for critics. Mubarak ruled for three decades.


Mursi described it as a constitution that fulfilled the goals of the revolution that ended Mubarak's rule. "Let everyone -- those who agree and those who disagree -- go to the referendum to have their say," he said.


The Islamists are gambling that they will be able to secure a "Yes" vote by mobilizing their core support base.


(Writing by Tom Perry; Editing by Alistair Lyon and Roger Atwood)


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