Palestinians win de facto U.N. recognition of sovereign state

UNITED NATIONS (Reuters) - The 193-nation U.N. General Assembly on Thursday overwhelmingly approved the de facto recognition of the sovereign state of Palestine after Palestinian President Mahmoud Abbas called on the world body to issue its long overdue "birth certificate."

The U.N. victory for the Palestinians was a diplomatic setback for the United States and Israel, which were joined by only a handful of countries in voting against the move to upgrade the Palestinian Authority's observer status at the United Nations to "non-member state" from "entity," like the Vatican.

Britain called on the United States to use its influence to help break the long impasse in Israeli-Palestinian peace talks. Washington also called for a revival of direct negotiations.

There were 138 votes in favor, nine against and 41 abstentions. Three countries did not take part in the vote, held on the 65th anniversary of the adoption of U.N. resolution 181 that partitioned Palestine into separate Jewish and Arab states.

Thousands of flag-waving Palestinians in the West Bank and the Gaza Strip set off fireworks and danced in the streets to celebrate the vote.

The assembly approved the upgrade despite threats by the United States and Israel to punish the Palestinians by withholding funds for the West Bank government. U.N. envoys said Israel might not retaliate harshly against the Palestinians over the vote as long as they do not seek to join the International Criminal Court.

If the Palestinians were to join the ICC, they could file complaints with the court accusing Israel of war crimes, crimes against humanity and other serious crimes.

U.S. Secretary of State Hillary Clinton called the vote "unfortunate and counterproductive," while the Vatican praised the move and called for an internationally guaranteed special status for Jerusalem, something bound to irritate Israel.

The much-anticipated vote came after Abbas denounced Israel from the U.N. podium for its "aggressive policies and the perpetration of war crimes," remarks that elicited a furious response from the Jewish state.

"Sixty-five years ago on this day, the United Nations General Assembly adopted resolution 181, which partitioned the land of historic Palestine into two states and became the birth certificate for Israel," Abbas told the assembly after receiving a standing ovation.

"The General Assembly is called upon today to issue a birth certificate of the reality of the State of Palestine," he said.

Israeli Prime Minister Benjamin Netanyahu responded quickly, condemning Abbas' critique of Israel as "hostile and poisonous," and full of "false propaganda.

"These are not the words of a man who wants peace," Netanyahu said in a statement released by his office. He reiterated Israeli calls for direct talks with the Palestinians, dismissing Thursday's resolution as "meaningless."

ICC THREAT

A number of Western delegations noted that Thursday's vote should not be interpreted as formal legal recognition of a Palestinian state. Formal recognition of statehood is something that is done bilaterally, not by the United Nations.

Granting Palestinians the title of "non-member observer state" falls short of full U.N. membership - something the Palestinians failed to achieve last year. But it does have important legal implications - it would allow them access to the ICC and other international bodies, should they choose to join.

Abbas did not mention the ICC in his speech. But Palestinian Foreign Minister Riyad al-Maliki told reporters after the vote that if Israel continued to build illegal settlements, the Palestinians might pursue the ICC route.

"As long as the Israelis are not committing atrocities, are not building settlements, are not violating international law, then we don't see any reason to go anywhere," he said.

"If the Israelis continue with such policy - aggression, settlements, assassinations, attacks, confiscations, building walls - violating international law, then we have no other remedy but really to knock those to other places," Maliki said.

In Washington, a group of four Republican and Democratic senators announced legislation that would close the Palestinian office in Washington unless the Palestinians enter "meaningful negotiations" with Israel, and eliminate all U.S. assistance to the Palestinian Authority if it turns to the ICC.

"I fear the Palestinian Authority will now be able to use the United Nations as a political club against Israel," said Republican Senator Lindsey Graham, one of the sponsors.

Abbas led the campaign to win support for the resolution, which followed an eight-day conflict this month between Israel and Islamists in the Gaza Strip, who are pledged to Israel's destruction and oppose a negotiated peace.

The vote highlighted how deeply divided Europe is on the Israeli-Palestinian conflict.

At least 17 European nations voted in favor of the Palestinian resolution, including Austria, France, Italy, Norway and Spain. Abbas had focused his lobbying efforts on Europe, which supplies much of the aid the Palestinian Authority relies on. Britain, Germany and many others chose to abstain.

The traditionally pro-Israel Czech Republic was unique in Europe, joining the United States, Israel, Canada, Panama and the tiny Pacific Island states Nauru, Palau, Marshall Islands and Micronesia in voting against the move.

'HOPE SOME REASON WILL PREVAIL'

Peace talks have been stalled for two years, mainly over Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world. There are 4.3 million Palestinians in the West Bank and Gaza.

After the vote, U.S. Ambassador to the United Nations Susan Rice called for the immediate resumption of peace talks.

"The Palestinian people will wake up tomorrow and find that little about their lives has changed save that the prospects of a durable peace have only receded," she said.

She added that both parties should "avoid any further provocative actions in the region, in New York or elsewhere."

Palestinian Prime Minister Salam Fayyad said he hoped all sides would use the vote to push for new breakthroughs in the peace process.

"I hope there will be no punitive measures," Fayyad told Reuters in Washington, where he was attending a conference.

"I hope that some reason will prevail and the opportunity will be taken to take advantage of what happened today in favor of getting a political process moving," he said.

Britain's U.N. ambassador, Mark Lyall Grant, told reporters it was time for recently re-elected U.S. President Barack Obama to make a new push for peace.

"We believe the window for the two-state solution is closing," he said. "That is why we are encouraging the United States and other key international actors to grasp this opportunity and use the next 12 months as a way to really break through this impasse."

(Additional reporting by Andrew Quinn in Washington, Noah Browning in Ramallah, Jeffrey Heller in Jerusalem, Robert Mueller in Prague, Gabriela Baczynska and Reuters bureaux in Europe and elsewhere; Editing by Eric Beech and Peter Cooney)

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Chinese, U.S. soldiers complete disaster relief drill amid Asia tensions

CHENGDU (Reuters) - Chinese and American soldiers finished a week-long disaster rescue exercise on Friday, furthering military ties between the two countries even as military tensions rise between China and U.S. military allies in the Pacific region.

The exercise, which included 20 U.S. soldiers visiting facilities in three Chinese cities, are meant to bring the two rivals closer together through non-combat military collaboration, and to allay fears of countries in the region worried over China's rising influence.

"Our senior leaders have been pretty clear: they're seeking a positive, cooperative and comprehensive relationship between our two nations," said Maj. Gen. Stephen Lyons, commander of the U.S. Army's 8th Theater Sustainment Command, based in Hawaii.

"That spirit of cooperation and that level of transparency I think helps signals throughout the region, and it helps us understand each other," Lyons said at a People's Liberation Army barracks on the outskirts of Chengdu in southwest China, where a massive earthquake devastated nearby regions in 2008, killing more than 87,000 people.

The general leading the Chinese side acknowledged the two services' rivalry, but said they share a common duty.

"The Chinese and American militaries do have our differences, but it is my belief that it is the indispensable responsibility of the two militaries to join forces in disaster relief," said Maj. Gen. Tang Fen, director of the PLA's Mass Work Office, General Political Department.

"Our two sides have a lot of experiences to share with each other and much to learn from each other."

Chinese Defence Minister Liang Guanglie this week also promoted military cooperation between Beijing and Washington.

"We should develop the ties between us, between our two militaries, touch on some of our differences, resolve conflicting views," he told Reuters. "We should push forward the development of our two powers, and push forward the development of a new China-U.S. military relationship."

The U.S. and Chinese military have exchanged occasional visits on disaster relief since 1998, but those were mostly information sharing, Lyons said. This was the first exercise involving planning for joint action, and observation of Chinese troops training in drills such as practicing entering and rappelling down the sides of buildings and using dog handlers.

Amid all nice talk however, the two sides remain considerably wary of each other.

"The distrust of the U.S. military within the PLA is very high. The distrust of the PLA within the U.S. military is substantial," says Kenneth Lieberthal, a former National Security Council senior director for Asia in the Clinton administration.

The two sides have often expressed suspicion over each other's intentions, with Washington viewing China's growing economic and military clout as an attempt to dominate Asia, and Beijing seeing U.S. force projection including President Barack Obama's year-old "rebalancing" of a military focus back to Asia as China-containment.

"Some high-ranking Chinese officials have openly stated that the United States is China's greatest national security threat," wrote Wang Jisi, dean of the School of International Studies at Peking University, in a paper published earlier this year by China's Centre for International and Strategic Studies. "This perception is widely shared in China's defence and security establishments."

Chinese officials insist that China's intent is to safeguard its own sovereignty. But Chinese military actions and weapons advances this year give some neighbors cause for concern.

China has been increasingly asserting territorial claims this year over waters and islands in the South and East China Seas, in direct conflict against Japan, the Philippines, Thailand, Malaysia and Taiwan.

Southeast Asia's top diplomat warned on Friday that China's plan to board and search ships that illegally enter what it considers its territory in the disputed South China Sea could spark naval clashes and hurt the region's economy.

Surin Pitsuwan, secretary-general of the Association of Southeast Asian Nations (ASEAN), said the Chinese plan was a "very serious turn of events".

China launched its first aircraft carrier and two prototypes of stealth fighter jets this year. Earlier this month it unveiled a new attack helicopter and pilotless drone aircraft. A U.S. congressional commission reported that China's submarines will likely be capable carrying nuclear warheads in two years.

Cooperation such as this week's disaster relief exercise helps to ease such tensions, Lyons said.

"There's going to be differences between our two nations," he said. "But as long as we're committed to solving those differences in a peaceful, stable kind of way, there's goodness in having discussions about what we agree upon and what we disagree upon."

(Editing by Nick Macfie)

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Gushing UK papers laud PM Cameron's stance on press law

LONDON (Reuters) - British Prime Minister David Cameron woke on Friday to find usually hostile newspapers gushing about his statesman-like qualities after he signaled his opposition to a new law governing the press.

After his party suffered a night of humiliation in three parliamentary elections, instead of facing questions over his leadership, he was cheered for rejecting the main plank of proposals from a public inquiry he set up in the wake of outrage at the excesses of tabloid newspapers.

Under a headline over two pages lauding "Cameron's Stand for Freedom", the right-wing Daily Mail said a "Defiant PM" had refused to accept the call for laws to control the press.

"To his enormous credit, however, David Cameron sees this report for what it is - a mortal threat to the British people's historic right to know," it said in its editorial.

"If he prevails in protecting that right, with the help of like-minded freedom lovers in the Commons and Lords, he will earn a place of honor in our history."

The Daily Telegraph, another right-leaning newspaper that has been far from fulsome in its support for Cameron, said the unexpected decision had revealed his leadership and acceptance that press freedom was "a constitutional necessity".

"His decision tells us also something about Mr. Cameron's capacity for statesmanship," the paper said in a commentary piece on its front page. "He appreciates the need for decisions that are unfashionable or unpopular.

"He has answered the hopes of a Conservative Party that sometimes wonders what he stands for," it said, under a cartoon mocking the inquiry with the line: (Caption to be supplied by cross-party committee of MPs).

Cameron's clear sign he would reject the main recommendation of the report from Lord Justice Brian Leveson followed a year-long inquiry that heard in unflinching detail from celebrities, victims of crime and others who said the notoriously aggressive press had ruined their lives.

It also followed weeks of frantic lobbying by the newspapers within Westminster, who argued any involvement of the law in press regulation would amount to state control and an attack on free speech, putting Britain on a par with Zimbabwe.

Critically, Cameron's stance also puts him on the same side as the majority of his senior Conservative ministers who had openly opposed legislation, and in alliance with Boris Johnson, a former journalist and London mayor who is cheered by the press and seen as a possible challenger to Cameron in the future.

While it will bolster his position in the eyes of press barons ahead of a 2015 election, it is not without risk.

It puts him in clear opposition to Nick Clegg, leader of the junior Liberal Democrat party in the coalition, and vulnerable to defeat in parliament if the opposition force a vote.

It also earned him the condemnation of those who spoke out against the press, including the families of murder victims, who accused the prime minister of betrayal. Both the politicians who oppose Cameron and the press victims plan to keep up the pressure as lawmakers try to find a consensus.

"MIXED BLESSING"

Malcolm Rifkind, a Conservative party grandee and former foreign secretary, told Reuters the pressure applied by senior members of the cabinet had meant Cameron could not simply accept the Leveson recommendations in full.

He had previously given his backing to statutory regulation.

He also described the lavish praise from the country's press as a "mixed blessing" that should prompt caution in the party.

"Governments normally like press support but when it's press support because you're not responding to what many people would have liked but the press didn't want, then obviously you've got to be careful," he said.

Commentators on the popular ConservativeHome website mostly backed Cameron for showing backbone over the issue but even they warned he should not get used to the adulation.

Rupert Murdoch's Sun tabloid, which has been particularly tough on Cameron's government and would typically oppose any apparent attack on the press, joined his Times paper in being conciliatory towards Leveson and less exuberant about Cameron.

The 4 million pound ($6 million) inquiry was ordered after the Sun's sister title the News of the World admitted hacking into phone messages on an industrial scale to generate ever more salacious stories.

"Much of Lord Leveson's report on the press makes sense," the Sun said in its editorial, adding it applauded Cameron's decision to oppose any legal basis for a new watchdog.

The only major newspaper to question Cameron's decision was the left-leaning Guardian, which led much of the coverage of the phone hacking scandal last year.

"The prime minister has surprised many, especially the victims, with his multi-leveled concerns about statute," it said. "It is not clear if this is a position of principle, or to win friends on the Tory benches and in Fleet Street.

"Leveson was the seventh occasion in as many decades that an inquiry has been commissioned into the behavior of the press. It's time to get it right."

(Reporting by Kate Holton and Michael Holden; Editing by Sophie Hares)

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Iran may quit anti-nuclear arms pact if attacked: envoy

VIENNA (Reuters) - Any attack on Iran's nuclear facilities may lead to it withdrawing from the Non-Proliferation Treaty (NPT), a pact aimed at preventing the spread of nuclear arms, a senior Iranian official said on Friday.

Ali Asghar Soltanieh, Iran's ambassador to the International Atomic Energy Agency, also suggested Iran in such a case could kick out IAEA inspectors and install its uranium enrichment centrifuges in "more secure" places.

His comments may strengthen concerns among many Western nuclear experts that military action against Iran aimed at preventing it from developing nuclear weapons may backfire and only drive its entire nuclear program underground.

There has been persistent speculation that Israel might bomb Iran, which it accuses of seeking a nuclear weapons capability. Iran denies the charge and says Israel's assumed atomic arsenal is a threat to regional security.

If attacked, "there is a possibility that the (Iranian) parliament forces the government to stop the (U.N. nuclear) agency inspections or even in the worse scenario withdraw from the NPT," Soltanieh said in a statement in English submitted to a meeting of the IAEA's 35-nation Board of Governors.

Asked about Soltanieh's comments, Israel's ambassador to the IAEA, Ehud Azoulay, said: "I believe that they are going to do it anyhow, in the near future, so I'm not surprised.

"When they make their first nuclear explosion they will have to withdraw, I believe," he told reporters, adding he thought Iran was "following the steps" of North Korea.

North Korea was the first country to withdraw from the NPT, in 2003, and has denied IAEA access to its atomic sites. It carried out nuclear tests in 2006 and in 2009.

Iran, one of the world's largest oil producers, says its nuclear program is a peaceful bid to generate electricity.

Like nuclear-armed India and Pakistan, Israel has never signed the NPT. It neither confirms nor denies having nuclear arms, although non-proliferation and security analysts believe it has several hundred nuclear weapons.

"MASTER OF ENRICHMENT"

The Jewish state has said it would sign the treaty and renounce atomic weaponry only as part of a broader peace deal with Arab states and Iran that guaranteed its security.

Under the 189-nation NPT, which came into force in 1970, non-nuclear weapons states commit to not develop such arms.

Israel and the United States see Iran as the world's main nuclear proliferation danger. Iran and Arab states say Israel's nuclear capabilities threaten regional peace and security.

In a defiant 11-page statement which prompted one Western diplomat to say he was "very pessimistic" about a new round of talks between Iran and the IAEA in mid-December, Soltanieh said the Iranian nuclear file "has to be closed immediately" and U.N. inspections work regarding the country returned to "routine".

"This is the only way that encourages Iran to show more flexibility in taking voluntary steps," Soltanieh said.

The IAEA is seeking to resume a long-stalled investigation into suspicions that Iran has conducted atom bomb research, and Western officials accuse Tehran of stonewalling the inquiry.

Soltanieh said nuclear weapons have no use and only creates vulnerability, and that any military action against Iran would not stop it from enriching uranium.

Refined uranium can have both civilian and military purposes, and a series of U.N. Security Council resolutions since 2006 have demanded that Iran suspend the activity, something the Islamic state has repeatedly ruled out.

"Iran is master of enrichment technology ... it can easily replace damaged facilities," Soltanieh said. But, he added, Iran is "well prepared to find a negotiated face-saving solution and a breakthrough from the existing stalemate".

Diplomacy between Iran and six world powers - the United States, China, Russia, France, Germany, and Britain - aimed at finding a peaceful solution to the decade-old dispute has been deadlocked since a June meeting that ended without success.

Both sides now say they want to resume talks soon, after the re-election of U.S. President Barack Obama, and diplomats expect a new meeting in Istanbul in December or January.

Iran has faced a tightening of Western trade sanctions which the United States and its allies hope will force it to curb its nuclear program. Soltanieh said: "Western sanctions have had no effect whatsoever on the enrichment activities."

(Editing by Mark Heinrich)

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Colombia seeks talks with Nicaragua to solve maritime spat

LIMA (Reuters) - Colombian President Juan Manuel Santos said on Friday he hoped to have "civilized" talks with Nicaragua's leader to resolve a dispute over their sea border after a U.N. court slashed Bogota's maritime territory.

Both countries have warships in the resource-rich waters but Santos urged diplomacy.

"I'm from the school of having an iron fist but wearing a silk glove," he told reporters at a South American summit in Lima. "I hope to be able to tell Nicaragua's president that we will manage this in the most civilized and respectful way possible."

Santos said he plans to meet with Nicaraguan President Daniel Ortega on Saturday in Mexico, where they will attend the swearing in of Mexican President-elect Enrique Pena Nieto.

"We will explore all these paths and leave none out," Santos said. "A treaty with Nicaragua will require a conversation with Nicaragua."

Ortega has said he expects Colombia, a close ally of the United States, to recognize the court's decision.

Santos has refused to apply a ruling made last week by the Hague-based International Court of Justice that reduced a large expanse of Colombia's maritime territory, drawing the border in favor of Nicaragua while giving a cluster of disputed islands to Bogota.

In protest, Colombia withdrew from a treaty on Wednesday that bound it to the U.N. court's decision. But the action does not have retroactive impact for the waters, which have potential offshore oil and gas deposits as well as fishing potential.

If left unsolved, the dispute could exacerbate regional tensions. Left-leaning Nicaragua likely will find support with allies including Venezuela, Ecuador and Bolivia.

(Reporting By Omar Mariluz; Editing by Bill Trott)

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German foreign minister tells Berlin to boost embassy security

BERLIN (Reuters) - German Foreign Minister Guido Westerwelle urged the mayor of Berlin on Friday to tighten security at foreign embassies in the city, a day after 30 protesters stormed the grounds of the Iranian mission and pelted the building with stones.

Westerwelle asked mayor Klaus Wowereit in a letter to act swiftly to remedy security shortcomings, citing 13 occasions over the past two years when embassies, including those of Libya and Nigeria, were attacked or occupied.

"Just as we expect other states to provide adequate protection for our embassies, so we must ensure German authorities are doing everything possible to protect diplomatic missions," Westerwelle's spokesman said on Friday.

Berlin police said in a statement that masked protesters used rope-ladders on Thursday to climb into the grounds of the Iranian embassy, where they tore down a flag and torched it, and defaced the building.

Police officers assigned to protect the building were overwhelmed and threatened by the protesters.

A spokesman for Wowereit said embassies were receiving suitable protection.

(Reporting by Alexandra Hudson; Editing by Sophie Hares)

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Algeria says vote had 44 percent turnout, showing stability

ALGIERS (Reuters) - Algeria on Friday declared a 44 percent turnout in municipal elections and said the ruling party was victorious, keen to show its people remained engaged in the political system despite a lack of reform achieved in Arab uprisings elsewhere.

Memories in the major energy-producing state of a vicious 1990s civil war between Islamists and the state that killed around 200,000 people have, analysts say, deterred Algerians back from mass protests like those that swept away rulers in neighboring Tunisia and Libya, as well as Egypt and Yemen.

But having avoided major unrest, the North African Arab state still wants to strengthen the credibility of its political system and had aimed for a 40-45 turnout in Thursday's communal elections to illustrate that there was no widespread apathy.

Interior Minister Daho Ould Kablia, reading the results of the vote at a news conference, said the outcome was in line with expectations. "The results were foreseeable," he said.

Kablia said the National Liberation Front (FLN), ruling since independence from France in 1962, was the biggest winner, followed by the National Rally for Democracy (RND), a government coalition partner led by former prime minister Ahmed Ouyahia.

The Green Algeria Alliance, a grouping of Islamist parties, were left far behind, a poor result for official Islamist groups similar to their showing in legislative elections last May.

Despite Kablia's remarks, many Algerians did not seem enthused about the vote for members of more than 1,500 councils, including their mayors, believing real change could only come through the next presidential election, due in 2014.

Real local power lies not with the elected municipal councils but with appointed provincial officials, despite government promises to democratize the system.

Algeria, an OPEC member that supplies about a fifth of Europe's imported gas, and an important U.S. ally in the fight against al Qaeda, has used its energy revenues to lift living standards with increased social spending.

The authorities want to avoid pressure to institute real reforms in an ossified post-colonial political system in which army generals remain the real power behind the scenes.

Opposition Islamists with potential for large popular support are kept out of the system in the country of 37 million people.

Algeria saw some rioting last year over high prices, unemployment and a lack of housing units. But President Abdelaziz Bouteflika responded with a pay rise for public sector employees, free loans for young entrepreneurs and continued subsidies on basic foodstuffs.

Bouteflika, 75, is serving his third five-year term and is not expected to run in the 2014 presidential election.

(Writing by Hamid Ould Ahmed and Andrew Hammond; Editing by Mark Heinrich; Editing by Andrew Roche)

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Senate approves new sanctions for Iran energy, shipping

WASHINGTON (Reuters) - The Senate on Friday resoundingly approved new sanctions on trade with Iran's energy, port, shipping and ship-building sectors, its latest effort to ratchet up economic pressure on Tehran over its nuclear program.

The new package builds on existing U.S. sanctions but maintains exemptions for countries that have made significant cuts to their purchases of Iranian crude oil.

Iran's currency has plunged this year as its oil exports were slashed by U.S. and European sanctions aimed at pressuring the country's leadership to stop pursuing nuclear weapons.

Iran says its nuclear program is for peaceful purposes. The United Nations' nuclear chief said on Thursday his agency has made no progress in its year-long push to investigate whether Iran has worked on developing an atomic bomb.

"We must be clear to the Iranians that toughing it out and waiting it out is not an option, that it will only get worse," Democratic Senator Robert Menendez of New Jersey said ahead of the vote.

Menendez co-authored the package with Republican Senator Mark Kirk of Illinois and Senator Joseph Lieberman, an Independent from Connecticut.

Senators voted 94-0 to make the new sanctions part of an annual defense policy bill.

The Obama administration has not publicly commented on the proposals, but has privately raised concerns that it does not provide enough "waiver flexibility," said Carl Levin, chairman of the Senate Armed Services Committee.

Levin said those concerns may be addressed when the Senate and House of Representatives work out differences to finalize the massive defense bill. Both bodies will need to approve the defense bill before it would be given to President Barack Obama to sign into law.

The new sanctions also include measures aimed at stopping the flow of gold from Turkey to Iran.

The American Israel Public Affairs Committee, a powerful pro-Israel lobby group, endorsed the measures, which they said would close a loophole in existing laws.

"In an effort to circumvent international sanctions on the Central Bank of Iran, some purchasers of Iranian oil and natural gas have been using gold and other precious metals to pay for petroleum products," AIPAC leaders said in a letter to senators ahead of the vote, urging support for the bill.

(Reporting by Roberta Rampton; Editing by Vicki Allen)

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Syria jets bombard rebel targets on airport road

BEIRUT (Reuters) - Syrian air force jets bombarded rebel targets on Friday close to the Damascus airport road and a regional airline said foreign carriers had halted flights to the capital.

Activists said security forces clashed with rebels trying to topple President Bashar al-Assad around Aqraba and Babilla districts on the southeastern outskirts of the Damascus which lead to the international airport.

Internet connections and most telephone lines were down for a second day, the worst communications outage in a 20-month-old uprising in which 40,000 people have been killed, hundreds of thousands have fled the country, and millions been displaced.

The mostly Sunni Muslim rebels who are battling Assad, from Syria's Alawite minority linked to Shi'ite Islam, have been making gains around Syria by overrunning military bases and have been ramping up attacks on Damascus, his seat of power.

A resident of central Damascus said he saw black smoke rising from the east and the south of the city on Friday morning and could hear the constant boom of shelling. State television said Assad's forces were fighting rebels in those areas.

An aviation source in neighboring Jordan said two Syrian Air flights crossed Jordanian air space heading for the Syrian capital on Friday evening and that Damascus airport was open, although international airlines were staying away.

The head of the national airline Syria Air said services were operating according to schedule, state television reported.

EgyptAir and Emirates have suspended flights to Damascus in response to the recent violence and there was no sign that Air Arabia and flydubai had flown scheduled trips on Friday.

"Airlines are not operating to Damascus today," said a Dubai-based airline official.

The Syrian Observatory for Human Rights, a British-based opposition monitoring group, said jets were bombarding targets in rural areas around Aqraba and Babilla, where rebels clashed with Assad's forces.

The Observatory's director, Rami Abdelrahman, said the airport road was open, but there was minimal traffic.

A rebel contacted by Reuters who said he was on the airport road said his fighters would not let the airport operate. "We will never open the road. It's still closed and it will remain closed. We will not allow planes to arrive," he said.

MORTAR FIRED

Rebels said that at least one mortar round was fired at the airport during clashes on Thursday.

"We want to liberate the airport because of reports we see and our own information we have that shows civilian airplanes are being flown in here with weapons for the regime. It is our right to stop this," rebel spokesman Musaab Abu Qitada said.

U.S. and European officials said rebels were making gains in Syria, gradually eroding Assad's power, but said the fighting had not yet shifted completely in their favor.

A Damascus-based diplomat said he believed the escalation in fighting around the capital was part of a government offensive which aimed to seal off the state-controlled centre of the city from rebel-held rural areas to the south and east.

Activists say Assad's forces have also been shelling the Daraya district to the southwest of the city, trying to prevent rebels from cementing their hold of an area which could give them a presence in a continuous arc from the northeast to southwest of the capital's outer districts.

"I don't know whether the shelling has succeeded in pushing back the FSA (rebels) - experience shows that they return very quickly anyway," the diplomat said. "We seem to be entering a decisive phase of the Damascus offensive."

Syria's Internet shut down on Thursday, a move which activists blamed on authorities but which authorities variously attributed to a 'terrorist' attack or a technical fault.

Global hacking network Anonymous said it would shut down Syrian government websites around the world in response to a move it said was aimed at silencing Assad's critics.

"As we discovered in Egypt, where the dictator (Hosni) Mubarak did something similar - this is not damage that can be easily or quickly repaired," it said, referring to an Internet outage during the early days of the 2011 uprising in Egypt.

French foreign ministry spokesman Philippe Lalliot said the communications cut was of a matter of "extreme concern".

"It is another demonstration of what the Damascus regime is doing to hold its people hostage. We call on the Damascus regime to reestablish communications without delay," he said.

CloudFlare, a firm that helps accelerate Internet traffic, said on its blog that saboteurs would have had to simultaneously cut three undersea cables into the Mediterranean city of Tartous and also an overland cable through Turkey in order to cut off the entire country's Internet access.

"That is unlikely to have happened," it said.

(Additional reporting by Oliver Holmes in Beirut, Suleiman al-Khalidi in Amman, Mariam Karouny, Praveen Menon in Dubai and Jim Finkle in Boston; editing by Anna Willard)

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Egyptians protest after draft constitution raced through

CAIRO (Reuters) - Thousands of Egyptians protested against President Mohamed Mursi on Friday after an Islamist-led assembly raced through approval of a new constitution in a bid to end a crisis over the Islamist leader's newly expanded powers.

"The people want to bring down the regime," they chanted in Tahrir Square, echoing the chants that rang out in the same place less than two years ago and brought down Hosni Mubarak.

Mursi said the decree halting court challenges to his decisions, which sparked eight days of protests and violence by Egyptians calling him a new dictator, was "for an exceptional stage" and aimed to speed up the democratic transition.

"It will end as soon as the people vote on a constitution," he told state television while the constituent assembly was still voting on the draft, which the Islamists say reflects Egypt's new freedoms. "There is no place for dictatorship."

The opposition cried foul. Liberals, leftists, Christians, more moderate Muslims and others had withdrawn from the assembly, saying their voices were not being heard.

Thousands packed Tahrir and hit the streets in Alexandria and cities on the Suez Canal, in the Nile Delta and south of Cairo, responding to opposition calls for a big turnout.

The disparate opposition which has struggled to compete with well-organized Islamists has been drawn together and reinvigorated by the crisis. Tens of thousands had also protested on Tuesday, showing the breadth of public anger.

But Islamists have a potent political machine and the United States has looked on warily at the rising power of a group they once kept at arm's length now ruling a nation that has a peace treaty with Israel and is at the heart of the Arab Spring.

Protesters said they would push for a 'no' vote in a referendum, which could happen as early as mid-December. If approved, it would immediately cancel the president's decree.

"We fundamentally reject the referendum and constituent assembly because the assembly does not represent all sections of society," said Sayed el-Erian, 43, a protester in Tahrir and member of a party set up by opposition figure Mohamed ElBaradei.

"Leave, leave," some chanted, another anti-Mubarak slogan.

In the Cairo mosque where Mursi said Friday prayers, some opponents chanted against him but backers quickly surrounded him shouting in support, journalists and a security source said.

Thousands of Mursi supporters also turned out in Alexandria.

EXHAUSTION

The plebiscite on the constitution is a gamble based on the Islamists' belief they can mobilize voters again after winning all the elections since Mubarak was overthrown in February 2011.

Despite the big numbers opposed to him, Mursi can count on backing from the disciplined Brotherhood and Islamist allies, as well as many Egyptians who are simply exhausted by the turmoil.

"He just wants us to move on and not waste time in conflicts," said 33-year-old Cairo shopowner Abdel Nasser Marie. "Give the man a chance and Egypt a break," he said.

But Mursi needs the cooperation of judges to oversee the vote, though many were angered by Mursi's decree that they said undermined the judiciary. Some judges have gone on strike.

The assembly concluded the vote after a 19-hour session, quicker than many expected, approving all 234 articles covering presidential powers, the status of Islam, the military's role and rights of citizens.

In one historic change, the president was limited to eight years in office after Mubarak served for 30 years. It introduced a degree of civilian oversight over the military - though not enough for critics.

An Egyptian official said Mursi was expected to approve the document on Saturday and then has 15 days to hold a referendum.

"This is a revolutionary constitution," said Hossam el-Gheriyani, head of the assembly in a live broadcast of the session, asking members to launch a cross-country campaign to "explain to our nation its constitution".

The vote was often interrupted by bickering between the mostly Islamist members and Gheriyani over the articles. Several articles were amended on the spot before they were voted on and the assembly worked till early morning to finish the job.

Critics argue it is an attempt to rush through a draft they say has been hijacked by the Muslim Brotherhood, which backed Mursi for president in a June election, and its Islamist allies.

Two people have been killed and hundreds injured in protests since the decree was announced on November 22, deepening the divide between the newly empowered Islamists and their critics.

PLACATING OPPONENTS

Setting the stage for more tension, the Muslim Brotherhood and its Islamist allies have called for pro-Mursi rallies on Saturday. But officials from the Brotherhood's party changed the venue and said they would avoid Tahrir Square.

Seeking to placate opponents, Mursi welcomed criticism but said there was no place for violence. "I am very happy that Egypt has real political opposition," he told state television.

He said Egypt needed to attract investors and tourists. The crisis threatens to derail a fragile economic recovery after two years of turmoil. Egypt is waiting for the International Monetary Fund to finalize a $4.8 billion loan to help it out.

An alliance of opposition groups pledged to keep up protests and said broader civil disobedience was possible to fight what it described as an attempt to "kidnap Egypt from its people".

Several independent newspapers said they would not publish on Tuesday in protest. One of the papers also said three private satellite channels would halt broadcasts on Wednesday.

The draft injects new Islamic references into Egypt's system of government but keeps in place an article defining "the principles of sharia" as the main source of legislation - the same phrase found in the previous constitution.

The president can declare war with parliament's approval, but only after consulting a national defense council with a heavy military and security membership. That was not in the old constitution, used when Egypt was ruled by ex-military men.

Activists highlighted other flaws such as worrying articles pertaining to the rights of women and freedom of speech.

A new parliamentary election cannot happen until the constitution is passed. Egypt has been without an elected legislature since a court order dissolved the Islamist-dominated lower house in June.

(Additional reporting by Patrick Werr, Tom Perry, Yasmine Saleh and Tamim Elyan; Writing by Edmund Blair; Editing by Philippa Fletcher)

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