Syria, Iran say Assad to remain in power till 2014

DAMASCUS, Syria (AP) — Iran and Syria condemned a U.S. plan to assist rebels fighting to topple President Bashar Assad on Saturday and signaled the Syrian leader intends to stay in power at least until 2014 presidential elections.

The remarks came against the backdrop of a strategic victory for the regime as the military regained control over a string of villages along a key highway to open a potential supply route in Syria's heavily contested north.

The army command boasted of the achievement in a statement, saying it had eradicated the remnants of "terrorist agents and mercenaries" in the area that links the government-controlled central city of Hama with Aleppo's international airport.

The reversal of gains, confirmed by Syrian activists, has the potential to change the outcome of the battle in Aleppo, Syria's largest city where government troops and rebels have been locked in a stalemate for months.

Syrian rebels have long complained that they are hampered by the world's failure to provide heavier arms to help them battle Assad's better-equipped military. The international community is reluctant to send weapons partly because of fears they may fall into the hands of extremists who have been gaining influence among the rebels.

But U.S. Secretary of State John Kerry announced on Thursday that the Obama administration was giving an additional $60 million in assistance to Syria's political opposition and would, for the first time, provide non-lethal aid directly to the rebels.

Assad told the Sunday Times, in an interview timed to coincide with Kerry's first foreign trip as the top U.S. diplomat, that "the intelligence, communication and financial assistance being provided is very lethal."

In their first official statements on the U.S. decision, the Syrian and Iranian foreign ministers accused Washington of having double standards and warned it will only delay an end to the civil war.

Iran is a staunch ally of the Syrian regime and has stood by the embattled Assad throughout the conflict.

Syrian Foreign Minister Walid al-Moallem and his Iranian counterpart, Ali Akbar Salehi, also set clear parameters for any future talks with the opposition, saying that whether Assad stays or goes will be decided in presidential elections scheduled for next year. Salehi went further to say Assad may run for another term.

"Assad is Syria's legal president until the next elections. Individuals have the freedom to run as candidates. Until that time, Assad is Syria's president," Salehi said at a joint news conference in Tehran. Al-Moallem said the Syrian people have the right to choose their leaders through the ballot box.

The remarks are likely to complicate already faltering diplomatic efforts to start a dialogue between the government and the opposition, which has offered to join talks with regime elements but insists that Assad must step down.

Assad was quoted by the Sunday Times as saying that he had no intention of going into exile. He said during the interview in Damascus last week that "no patriotic person will think about living outside his country."

He accused Kerry of wasting time by trying to ease him out of power, according to the newspaper, saying it was an internal issue "so I'm not going to discuss it with anyone from abroad."

The U.N. estimates that 70,000 people have died since the uprising against Assad began in March 2011.

Syria's opposition chief has offered to sit down for talks with regime elements, but insists that Assad must step down.

Al-Moallem said it was inconceivable that Washington would allocate $60 million in assistance to Syrian opposition groups while it continues to "kill the Syrian people" through economic sanctions imposed against the country.

"If they truly wanted a political settlement, they wouldn't punish the Syrian people and finance (opposition) groups with so-called non-lethal aid," he said. "Who are they kidding?"

The Damascus official called Syria's sovereignty a "red line."

He directly accused Turkey and Qatar and other countries he did not name of supporting and funding "armed terrorist groups" operating in Syria, using the regime's terminology for the rebels. Both countries are strong rebel backers and have offered logistical and other assistance to Syrian opposition groups.

His Iranian host, Salehi, said "double standards were being applied by certain countries that serve to prolong and deepen the Syrian crisis" and lead to more bloodshed.

Syrian rebels control large swaths of land in the country's northeast, including several neighborhoods of Aleppo.

For weeks they have been trying to storm the Aleppo airport, a major prize in the battle for Syria's commercial capital. The rebels ousted troops from several bases protecting the facility and cut off a major highway the army used to supply its troops inside the airport complex.

Syrian army officials said troops had secured the facility and regained control of several villages along the highway leading to the airport after days of fighting.

An opposition spokesman, Rami Abdul-Rahman, director the Britain-based anti-regime activist group the Observatory for Human Rights, confirmed the army's victory Saturday, calling it a "significant achievement."

"Securing these villages, assuming the regime can hang on to them, has the potential to turn around the direction of the conflict in Aleppo," Abdul-Rahman said.

In other violence Saturday, clashes broke out in the northeastern Raqqa province, and activists said dozens of people on both sides were reported dead or wounded.

Ahrar al-Sham Movement, a militant Islamic brigade fighting with the rebels, announced in an online video posted Saturday that it was starting a wide scale operation against military and infrastructure targets in the area along with other extremists including Jabhat al-Nusra, the al-Qaida-affiliated group designated by the U.S. as a terrorist group.

Sporadic clashes also continued near Syria's Rabiya border crossing with Iraq. Syrian fighter jets fired at least two missiles and rebels on the ground fired at the jets, according to a witness on the Iraqi side of the border.

The fighting comes a day after Iraqi officials said a Russian-made rocket fired from Syria slammed into Iraqi territory, intensifying concerns that violence from Syria's civil war could spill across the border. No one was injured in the strike.

A police officer at the Iraqi Rabiya border crossing said five Syrian soldiers and one officer fled the clashes into Iraqi territory. Three of the soldiers were wounded and evacuated to a hospital in the northern Iraqi city of Mosul, he said. A doctor confirmed the figure.

Both spoke on condition of anonymity because they were not authorized to release information to the media. They didn't say what happened to the other three who fled.

The chief of Syrian rebel forces, Salim Idris, accused Iraqi soldiers of firing at rebel positions inside Syrian territory and claimed Iraq's government was backing Assad's regime.

Iraq's Defense Ministry denied that Iraqi forces were backing the Syrian army during clashes with rebels. A statement said Iraqi forces are deployed in the border regions only for routine duties and one Iraqi soldier was wounded during the exchange of fire.

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Karam reported from Beirut. Associated Press writers Barbara Surk in Beirut, Ali Akbar Dareini in Tehran and Qassim Abdul-Zahra and Sinan Salaheddin in Baghdad contributed to this report.

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Syrian regime's air power keeps rebels in check

BEIRUT (AP) — President Bashar Assad has exploited his greatest advantage in the Syrian civil war — his air power — to push back rebel advances and prevent the opposition from setting up a rival government in its northern stronghold.

Along the way, fighter jets and helicopters have hit civilian targets such as hospitals, bakeries and residential buildings, according to a report released Thursday by a U.S.-based human rights group. It accused the regime of committing war crimes with indiscriminate airstrikes that have killed more than 4,000 civilians since summer.

The Human Rights Watch report said Assad's air force has dropped "imprecise and inherently indiscriminate" munitions, including cluster bombs, on civilian areas.

In recent months, large parts of northern Syria near the border with Turkey have fallen to the rebels, including several neighborhoods of Aleppo, the country's largest city. With the recent influx of more advanced weapons and other foreign aid, the rebels have also made major gains in the south, seizing military bases and towns in the strategically important region between Damascus and the border with Jordan.

Two years into the uprising, however, the Assad regime's control of the skies is hampering rebels' efforts to hold on to territory they capture with any efficiency. An interim leader of the opposition has been elected, but he and others opposed to Assad have made only a few, brief forays into rebel-controlled areas.

"The air force is extremely important for Assad right now," said Joseph Holliday, a Syria analyst at the Washington-based Institute for the Study of War.

"It has allowed Assad to prevent rebels from establishing a part of Syria where people can be safe and the opposition can focus on governing the place," he said. "It very difficult to do that without a space that is free from constant harassment from the aircraft."

Although the rebels have been able to shoot down several aircraft after capturing some heavier weapons from military bases, they are largely helpless when it comes to Assad's air supremacy.

The opposition has repeatedly asked their foreign backers for weapons that can shoot down the regime's aircraft and help hasten the fall of Assad. But the United States and its European allies have been reluctant to provide opposition fighters with anti-aircraft missiles for fear they may end in the hands of radical Muslim groups that have been the most organized fighting force on the opposition side.

The rebels also want a no-fly zone established over northern Syria, but the countries opposed to Assad have taken no action on that option, either.

The top U.S. military commander in Europe, Adm. James Stavridis, said last month that some NATO nations are looking at a variety of military operations to end the deadlock and assist the opposition forces, including using aircraft to impose a no-fly zone, providing military assistance to the rebels and imposing arms embargoes.

As with U.S. and international involvement in Libya in 2011, a resolution from the U.N. Security Council and agreement among the alliance's 28 members would be needed before NATO takes a military role in Syria, Stavridis said.

Late last year, NATO deployed Patriot batteries along Turkey's border with Syria, with the alliance's leaders emphasizing that the missiles will not be used to shoot down aircraft operating in Syrian airspace.

Military experts say it is unlikely the West will revisit the no-fly zone any time soon.

"It's not easy to just go on and establish a no-fly zone, and the West has said so before," said Beirut-based military analyst, Brig. Gen. Hisham Jaber, a retired Lebanese army officer who heads the Middle East Center for Studies and Political Research in Beirut.

"They know that the Syrian army remained strong, the air force is behind Assad, and they also know that Syria has a very sophisticated air defense system," he said.

Jaber said Syria has about 400 operational aircraft, although analysts say it is difficult to come up with reliable figures on the Syrian air force and air defenses because of the extreme secrecy that blankets its military matters.

Like his late father and predecessor, Hafez, the younger Assad stacked key military posts with members of their minority Alawite sect in the past 40 years, ensuring the loyalty of the armed forces by melding the fate of the army and the regime. The air force is particularly close to the regime. Hafez Assad was an air force pilot and commander before seizing power in 1970.

However, many pilots are Sunni Muslims, and defections from the air force since the beginning of the uprising in March 2011 have been rare.

In the most dramatic escape from Syria, a fighter pilot on a training mission flew his MiG-21 warplane to neighboring Jordan in June. Only three other pilots have reportedly defected, crossing into Jordan by land last summer.

Syrian officials denounced the pilot, who is a Sunni Muslim, and military experts with knowledge of Syria suggested that the regime has grounded Sunni pilots, relying on Alawites to carry out airstrikes instead. No order has appeared in public to support their claims.

While the air force is an important tool in Assad's battle for survival, it's not his last one, said Joshua Landis, a Syria expert at the University of Oklahoma.

"It's the 3 million Alawites who believe that they will be ethnically cleansed by the opposition if the rebels overthrow Assad," Landis said. "It's because of the fear of those who could come after him that has spread around Syrian minority communities in the past year of the revolution, that many — including Sunnis — continue fighting on the regime's side."

In their campaign against the opposition, the Syrians have been using helicopters, MiG jets and trainer aircraft to hit targets daily in the north, the east, the south and in rebel strongholds on the edges of the capital of Damascus.

"The aim of the airstrikes appears to be to terrorize civilians from the air, particularly in the opposition-controlled areas where they would otherwise be fairly safe from any effects of fighting," Ole Solvang of Human Rights Watch told The Associated Press.

More than 4,300 people have been killed since summer in such attacks that amount to "serious violations of international humanitarian law," and people who commit such breaches are "responsible for war crimes," the New York-based group said in the report, the most comprehensive study of Syrian air force operations in rebel-held areas since the beginning of the conflict. The U.N. estimates that more than 70,000 people have been killed in the civil war.

The Assad regime has significantly increased its use of air power since July, when the rebels captured territory in the north after an offensive, as well as last month after they seized their first provincial capital, Raqqa. The city is bombed almost daily.

Human Rights Watch said it inspected 52 sites in northern Syria and documented what it labeled 59 unlawful attacks by the Syrian air force in rebel-held areas.

Based on inspections and more than 140 interviews with witnesses, HRW said warplanes "deliberately targeted four bakeries (in the north) where civilians were waiting in bread lines a total of eight times."

Repeated aerial attacks on two hospitals that the group visited in the northern areas under opposition control "strongly suggest that the government also deliberately targeted these facilities," HRW said.

Assad's jets have dropped incendiary weapons on residential areas in the north that are designed to set fire to objects and people, the group said.

The planes have also hit civilian areas with makeshift bombs, made from hundreds of pounds (kilograms) of explosives stuffed into barrels. HRW even found unexploded naval mines on sites hit by airstrikes in northern Syria, Solvang said.

"They seem to be using pretty much everything they have to bomb places," he said.

Officials in Damascus could not immediately be reached for comment on the Human Rights Watch report. The Syrian government describes the rebels as foreign-backed terrorists set on destroying the country.

HRW also criticized the Free Syrian Army and other opposition groups for not taking measures to avoid deploying forces and headquarters in or near densely populated areas.

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Macquarie expands in UK power sector

By Cezary Podkul

NEW YORK (Reuters) - Macquarie Bank is expanding its power trading business in the UK, hiring traders from rival banks and sourcing electricity from newly acquired power plants in hopes of becoming a bigger player in the sector.

The Australian banking group has hired six traders and acquired two power station management agreements in the UK in recent months as part of the expansion, Nicholas O'Kane, global head of Macquarie's Energy Markets Division, said in an interview.

"We have, in the last three to four months, taken the opportunity to build up that business," O'Kane said, pointing to client requests as the reason for the expansion.

The move highlights the growth opportunities available to some financial players as others have retrenched and cut back their commodity operations in the face of regulatory and financial pressures.

It also shows the growing attractiveness of the UK power market, where prices spiked to an all-time high last week thanks to a pipeline malfunction that exposed the country's increasing reliance on foreign energy supplies.

To beef up its UK power operations, Macquarie has hired Turab Musayev as vice president of power origination and structuring and Max Hacker as energy analytics analyst, O'Kane said. Four gas and power shift traders, Adam Frame, Dan Briggs, Sid Rajeswaran and Tim Sheldrake have also joined Macquarie.

Musayev, Hacker, Frame and Sheldrake joined from Bank of America's Merrill Lynch unit. Briggs joined Macquarie from French utility EDF and Rajeswaran joined from BNP Paribas.

The six traders have joined a team of about 15 people in Macquarie's UK gas and power trading desk in London, reporting to Jon House and Erik Petersson, co-heads of Macquarie's energy markets division for Europe, Middle East and Africa, according to a spokeswoman.

The division has also acquired agreements to manage electricity output from two gas-fired UK power plants, which Macquarie is using "as a base to build-out our physical power business," O'Kane said.

The power stations, the 489 megawatt Baglan Bay Power Station in Wales and the 819 megawatt Sutton Bridge Power Station in Lincolnshire, were recently acquired by a Macquarie-led consortium, according to the spokeswoman.

The Sutton Bridge deal closed Wednesday while Baglan Bay was completed in October 2012, she said. Terms of the transaction could not be learned by press time.

Macquarie launched its energy markets division in London in 2003, when O'Kane moved from Asia to the UK to set up its trading desk. Since then, Macquarie has become an active player in the UK natural gas sector but less so in power, O'Kane said.

Macquarie's expansion into the sector coincides with a larger transition in commodity trading among global banks. Stung by losses from the 2008 financial crisis and increasing regulatory requirements, many U.S. and European banks have been scaling back their commodities arms. Royal Bank of Scotland Group, for instance, was forced to sell its Sempra Energy commodity trading venture in 2010 after it was bailed out by the UK government.

Some see the retrenchment as an opportunity for banks like Macquarie to pick up talent in the UK and other markets.

"Extensive layoffs in the UK and elsewhere in commodity units have provided a rich opportunity for banks that weathered the storm to expand or move into active markets," said George H. Stein, managing director of Commodity Talent, an executive search firm for commodity traders in New York.

"The European gas and power markets are particularly attractive zones for banks as they undergo regulatory and market shifts," Stein said.

Macquarie has also added to its power trading team in the United States. The firm recently hired Drew Inman in Houston, Texas to head up its power trading for the Texas market. Inman will be joining three other traders and a team of business originators focused on the Texas electric grid, O'Kane said.

Inman is joining Macquarie from Citigroup and will start on April 8, O'Kane said.

(Reporting By Cezary Podkul; Editing by Stephen Coates)

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UK says efficiency steps to cut 11 percent from power bill rise by 2020

By Susanna Twidale

LONDON (Reuters) - Britain's government said household energy bills were headed for an 18 percent increase by 2020 but its policies promoting domestic energy efficiency, including its so-called Green Deal, would make the rise significantly smaller.

The average British household could face an energy bill of 1,496 pounds per year by 2020, according to a report published by the Department of Energy and Climate Change (DECC) on Wednesday, up from the 1,267 pounds it expects homes to pay this year.

If government schemes such as the Green Deal, which helps pay for energy saving home improvements, are successful, the average 2020 bill will be 11 percent cheaper than this forecast, the report said.

"With policies, bills are still going to go up, but they are going to go up by a lot less," energy and climate change secretary Ed Davey said at a briefing for journalists ahead of the report's publication.

The Green Deal is one of several government policies now in place that include plans to roll out smart meters - indicating which appliances use most power - replace inefficient boilers and encourage energy suppliers to help pay for roof insulations.

Overall these measures will knock 452 pounds from the average bill in 2020, DECC said, although this saving will be reduced to 166 pounds by the cost of other government schemes to boost renewable generation and levies on carbon emissions.

Britain's government came under criticism last year when each of the country's big six energy providers ramped up bills by up to 10 percent, blaming soaring wholesale gas prices.

British wholesale gas prices surged to a record high last Friday after one of its main gas import pipelines shut down unexpectedly. Davey said companies would not be able to use this as an excuse to up the cost for households.

"We will make it clear to energy suppliers that this is just a cold, temporary snap and is no excuse for putting up energy bills," he said.

(Reporting by Susanna Twidale; Editing by Anthony Barker)

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