What’s in a name? Obama to welcome leader of ‘Myanmar,’ not ‘Burma’

Myanmar's president, Thein Sein, at the U.N. building in Bangkok on April 29. (Chaiwat Subprasom /Reuters)Straight up: This will only be of interest to foreign policy nerds and people interested in the fate of U.S. relations with this particular Asian country (Shoutout: Mitch McConnell of Kentucky, Republican senate minority leader and resident expert in Congress on this issue).

The White House announced Wednesday that President Barack Obama will welcome President Thein Sein of Myanmar next week. It's a historic visit, part of a gradual patching-up of relations after decades of tension and U.S. economic sanctions.

Obama himself became the first sitting president to visit Myanmar in November 2012. But there's one catch: According to the State Department and the CIA, there's doesn't seem to be any such country. According to those agencies, Thein Sein leads "Burma."

It's a notable diplomatic reward. Obama used the name "Myanmar" during his visit there in November. Authorities there have long quested for Washington to recognize the name, but it's still quite rare among U.S. policymakers—and nearly unheard of in Congress.

Here's the State Department's take: "The military government changed the country name to "Myanmar" in 1989. It remains U.S. policy to refer to the country as Burma."

What does the Central Intelligence Agency have to say? This: "Since 1989 the military authorities in Burma, and the current parliamentary government, have promoted the name Myanmar as a conventional name for their state; the US Government has not adopted the name, which is a derivative of the Burmese short-form name Myanma Naingngandaw."

So why the change? National Security Council spokeswoman Caitlin Hayden has the goods:

"The United States government over time has begun limited use of the name 'Myanmar' as a diplomatic courtesy," Hayden told Yahoo News by email. "Our policy remains that Burma is the name of the country."

She confirmed that the use of the other name is, in effect, a symbolic reward.

"Burma has undertaken a number of positive reforms, including releasing over 850 political prisoners; easing media restriction; permitting freedom of speech, assembly, and movement," she said. "We have responded by expanding our engagement with the government, easing a number of sanctions, and as a courtesy in appropriate setting, more frequently using the name 'Myanmar.'"

Obama believes "that showing respect for a government that is pursuing an ambitious reform agenda is an important signal of support for its efforts and our desire to help the transformation succeed," Hayden said.

Here is the full statement from White House press secretary Jay Carney:

Statement by the Press Secretary on the visit of President Thein Sein of Myanmar to the White House

President Obama will welcome His Excellency President Thein Sein to the White House on Monday, May 20, 2013. Since President Obama’s historic trip to Rangoon last November, the United States has continued to advocate for continued progress on reform by President Thein Sein’s government, in close cooperation with Aung San Suu Kyi, civil society leaders, and the international community. The President looks forward to discussing with President Thein Sein the many remaining challenges to efforts to develop democracy, address communal and ethnic tensions, and bring economic opportunity to the people of his country, and to exploring how the United States can help.

President Thein Sein’s visit underscores President Obama’s commitment to supporting and assisting those governments that make the important decision to embrace reform, and highlights the dedication of the United States to helping the Burmese people realize the full potential of their extraordinary country.

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Israeli leader under fire for costly lifestyle

JERUSALEM (AP) — Israel's prime minister is under fire again for a costly lifestyle at taxpayers' expense, just as his government is slashing welfare benefits and raising taxes to cope with a huge deficit.

Israeli media took aim Tuesday at reports that the expenses of Benjamin Netanyahu's office have soared nearly 80 percent since he took office in 2009. Netanyahu and his family split their time among three homes, including an official residence. The cost of maintaining them came to roughly $905,000 last year.

The information was released only after a civil liberties group filed a freedom of information request.

The disclosure comes days after a TV station reported that Netanyahu spent $127,000 in public funds for a special sleeping cabin on a recent five-hour flight to London.

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New leader to head Egypt's Jewish community

CAIRO (AP) — Egypt's Jewish community has announced that it has elected the daughter of a well-known leftist and nationalist icon to protect its heritage and care for its dwindling, elderly membership.

Magda Haroun, 60, told The Associated Press Tuesday she aimed to continue the work of her predecessor, Carmen Weinstein, who died Saturday at the age of 82. Weinstein was known for her efforts to preserve synagogues and a Jewish cemetery.

"My new priority is to preserve the Egyptian Jewish heritage ... to give it back to Egypt, because it belongs to Egypt," Haroun said.

Haroun, an Egyptian who is fluent in Arabic, French and English, was born in Alexandria, Egypt's second largest city. She attended school in Cairo, and graduated from Cairo University with a degree in Applied Arts. She runs a patents and legal affairs firm with her sister Nadia.

Haroun said she considered herself Egyptian before Jewish, born and raised in the country.

Her father Chehata Haroun was a prominent Egyptian nationalist, one of the founders of the leftist Al Tagammu Party. He was known for his anti-Zionist politics and his defense of Egyptian Jews against accusations of having greater loyalty to Israel than to Egypt, at the peak of the Mideast wars.

Haroun had previously told the AP that only around 40 Egyptian Jews remain in the country, a far-cry from the once-thriving Jewish community that largely left more than 60 years ago at a time of hostilities between Egypt and Israel.

"I will continue taking care of them, socially, medically, gathering them for the holidays, and burying them with dignity," Haroun said.

Haroun was unanimously elected as community president at an extraordinary general assembly meeting held on Monday, following Weinstein's death.

Since the creation of the state of Israel in 1948, an estimated 65,000 Jews left Egypt — most of them traveling to Europe and the West. Few of them settled in Israel. The remnants of the community are split between Cairo and the Mediterranean city of Alexandria that was also once a thriving multicultural and cosmopolitan hub.

Considerable hostility persists in Egypt, where radical preachers and others regularly denounce both Israel and Jews in general. However, Haroun said that Egyptians were kind-hearted and what ultimately mattered was social interaction. "If you treat others well, you will be treated well," she said.

Haroun dismissed any fears from the rise of Islamists to power in Egypt after the 2011 overthrow of President Hosni Mubarak in a popular uprising. "The community size is still the same, and they keep dying one after another, what's the difference?"

But she said that the ensuing political turmoil around the community had made members fearful.

"Don't forget that most of the community is elderly women and housewives, uninvolved in everyday life," she added. "When they see the intolerance around them, they become more anxious."

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Kurdish rebel leader hopeful for peace

ANKARA, Turkey (AP) — Jailed Kurdish rebel leader Abdullah Ocalan says he hopes peace talks with Turkey will succeed.

Ocalan's message was read by Kurdish legislators who met him on his prison island off Istanbul on Sunday. Earlier in the week, these lawmakers also met with Kurdish rebel commanders based in northern Iraq.

The rebels declared a ceasefire last month, heeding a call by Ocalan, who is engaged in talks with Turkish officials to end the nearly 30-year-old Kurdish rebel conflict.

The efforts, however, appear to have hit a snag over Turkish demands that the rebels retreat from Turkey unarmed. A Kurdish party leader has said the insurgents are hesitant about withdrawing fighters without legal guarantees from Turkey.

The conflict between Turkey and the rebels has killed tens of thousands of people since 1984.

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Regional leaders refuse to recognize Central African Republic coup leader

By Madjiasra Nako

N'DJAMENA (Reuters) - African heads of state on Wednesday refused to recognize rebel leader Michel Djotodia's self-appointment as president of Central African Republic, calling instead for the creation of a new transitional body to guide the country to elections.

The decision, taken at a summit of leaders from the central African region, further isolates Djotodia, who led thousands of insurgents into the former French colony's crumbling riverside capital Bangui on March 24, ousting President Francois Bozize.

"It seems impossible to us to recognize a man who has appointed himself," Chadian President Idriss Deby said following the summit in Chad's capital N'djamena.

Deby led troops into the Chadian capital and seized power in 1990. He has won four elections since then. Bozize himself seized power in Central African Republic in 2003.

African and Western leaders have already condemned the rebellion in the mineral-rich but chronically unstable nation. The African Union suspended Central African Republic and imposed sanctions on Djotodia while Washington said he was not a legitimate leader.

Djotodia has already tried to contain international condemnation by creating a transitional government headed by a civilian prime minister, Nicolas Tiangaye, and promising elections in three years.

A spokeswoman for Djotodia said earlier she hoped the new leadership in Bangui would get regional backing.

"What we want is support from the African Union and ECCAS (the 10-nation Economic Community of Central African States) for all of our plans to restore peace in the country ... We need legitimacy," said Anne Victoire Yakossobe.

But Deby said the summit had instead called for the creation of a transitional institution that would draw up a new constitution and prepare for elections within 18 months.

"We have in mind a college, a sort of executive that will be elected by all the social actors. This college will designate its president, which will be the president of Central African Republic," Deby said.

The decisions of the summit were greeted with cautious optimism by Central African Republic's political opposition, which has rejected the new government, saying it is stacked with Djotodia allies.

"We are waiting for the (regional) ministers to come explain the mechanisms that will be put in place. We want to know how this is going to work on the ground," opposition spokesman Edouard Kouyamounou told Reuters.

SOUTH AFRICAN WITHDRAWAL

Though organized by regional states, the summit included a delegation led by South African President Jacob Zuma, who is under growing pressure at home following the deaths of 13 South African soldiers during the March 24 onslaught.

The withdrawal of South African forces, in the country under agreements with Bozize, had been a demand of the rebels during peace talks with the government in Gabon earlier this year.

However Pretoria sent reinforcements to Bangui as the rebellion built up last month.

Those soldiers will now return home, Deby said.

"President Jacob Zuma announced to us his decision to withdraw South African troops, who had come to Central African Republic in the framework of a cooperation agreement," he said.

The killing of its soldiers has prompted questions about South African's role in the country, and how a military training mission there became entangled in an internal conflict.

South African media reports have suggested the soldiers were defending South African mining interests, but officials in Pretoria have denied this. They say the presence of the 400 South African troops was covered by a 2007 bilateral defense accord with Bozize.

(Additional reporting by Ed Cropley and Ange Aboa; Writing by Richard Valdmanis and Joe Bavier; Editing by Andrew Heavens)

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Hamas re-elects Mashaal as its leader

CAIRO (AP) — Hamas on Monday re-elected longtime leader Khaled Mashaal, capping a year of secret internal elections, officials in the Islamic militant group said.

The Qatar-based Mashaal, 56, is a veteran politician with close ties to regional powers Qatar, Egypt and Turkey. He has been key to Hamas' attempts to break out of its political isolation following its violent takeover of Gaza in 2007.

Mashaal's re-election could revive stalled reconciliation efforts between Hamas and political rival Mahmoud Abbas, the Western-backed Palestinian president. The Hamas takeover of Gaza left Abbas with only parts of the West Bank, and the rival camps have become increasingly entrenched in their respective territories since 2007.

Two Hamas officials said Mashaal ran unopposed and was re-elected by a majority in the movement's Shura Council, which is believed to have about 60 members. The officials spoke on condition of anonymity because they were not authorized to discuss the secret procedure.

Hamas began holding internal elections a year ago, a secretive process spread over several countries, shrouded in mystery and beset by logistics problems.

Hamas has four components — activists in Gaza, in the West Bank, in exile and those imprisoned by Israel. Each of the four groups chooses local leaders as well as delegates to the Shura Council. This council selects a decision-making political bureau and the head of that body — the stage that was wrapped up in Cairo on Monday.

Mashaal became head of the movement in 1996 and will now lead it for another four years.

He is seen as a member of the more pragmatic wing of Hamas, in connection with the Israeli-Palestinian conflict.

He and others in Hamas insist the movement will not recognize Israel and renounce violence — Western conditions for dealing with Hamas.

He has suggested he could accept a Palestinian state alongside Israel, though he has not said if such a state would end the conflict, or only be an interim step to an Islamic state in all of historic Palestine, including what is now Israel.

Mashaal has also come out in support of so-called popular resistance against Israeli occupation, a term Palestinians used for marches and stone-throwing protests. In the past, Hamas gunmen and suicide bombers have killed hundreds of Israelis in attacks.

Mashaal pushed for reconciliation with Abbas in his previous term, but was blocked by Hamas hardliners in Gaza who fear a unity deal will give Abbas a new foothold in Gaza and weaken Hamas' grip on the territory.

Last year, Mashaal and Abbas, who have cordial relations, reached a deal whereby Abbas would head an interim government of technocrats in the West Bank and Gaza. This government would have paved the way for general elections.

However, the deal never got off the ground because of opposition from Hamas leaders in Gaza and senior figures in Abbas' Fatah movement.

Last week, the emir of Qatar proposed holding a reconciliation conference in Egypt in the coming weeks to set up a timetable for forming the interim government and holding elections.

___

Laub reported from Ramallah, West Bank.

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Italy's center-left leader fails to form govt

MILAN (AP) — Italy remained in political gridlock Thursday after the center-left leader announced he had failed to form a government.

Pier Luigi Bersani, who has been talking with parties since Friday, expressed some bitterness when he told reporters at the president's office in Rome that he found "unacceptable" attempts by some parties to set "preclusions and conditions."

Bersani's attempt at forming a stable government able to help Italy out of recession and get Italians back to work was always a long shot. Bersani's coalition controls the lower house, but not the Senate, and inconclusive February elections gave strong voice to a protest party.

The next move belongs to President Giorgio Napolitano, who will hold a day of consultations Friday to "personally ascertain the developments possible," the president's secretary general, Donato Marra, said.

The failure makes more likely a possible technical government with a well-defined mission to take on urgent tasks, which include rewriting the election law, and push through some measures that have broader acceptance, like cutting political costs.

"I do believe now that the president will try to find a personality who is not so political as Bersani, possibly coming out of the left, and see if that person can find some sort of agreement to get the backing" from both the center-left and the center-right, said Giovanni Orsina, a professor of political science at Rome's LUISS University. "That is the only solution at the moment."

The Feb. 24-25 elections ended in a three-way gridlock with Bersani's center-left forces, former Premier Silvio Berlusconi's center-right forces and the anti-establishment protest movement founded by comic-turned-political leader Beppe Grillo.

Old animosities and a hardline left wing of his party forced Bersani to rule out an alliance with Berlusconi's center-right forces — a sort of grand coalition that Napolitano clearly favored. And Grillo's 5 Star Movement made clear that it wouldn't back Bersani or any established party — despite Bersani's appeal to responsibility during a meeting Wednesday.

The 5 Star Movement's apparent intransigence makes a way forward difficult. It refuses steadfastly to vote confidence in any government that it does not run, and the Italian constitution requires a vote of confidence for a government to officially take office.

The movement on Thursday proposed that Italy could continue under the caretaker government of Mario Monti, allowing the newly elected parliament to take on some urgent tasks. It was unclear if Napolitano would find that acceptable, if Monti would want to stay on, or if such a possibility were even constitutional.

Orsina said there is a limit to how long a government can continue without a vote of confidence, and this caretaker government was formed provisionally until a new government could be formed. "If we say it is not a provisional solution, that it is more permanent, I think Monti should go back to the chambers and ask for confidence," Orsina said.

Monti, whose technical government enacted emergency measures to help protect Italy from the sovereign debt crisis after Berlusconi stepped down in 2011, dissolved parliament last December after Berlusconi pulled support, paving the way to elections. More recently, he has been under pressure over his government's flip-flop over the fate of two Italian marines charged with murder in India. It first announced earlier this month the pair would not go back to face trial after being allowed home temporarily, but then sent them back anyway fearing international isolation over the move.

His decision to run in the elections, finishing fourth with a dismal 10 percent of the vote, also has sapped his authority as a technical figure.

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Chinese leader bolsters Russian ties on first foreign trip

By Alexei Anishchuk and Timothy Heritage

MOSCOW (Reuters) - Chinese leader Xi Jinping emphasized the importance of relations with Russia as a counterweight to U.S. influence by visiting Moscow on his first foreign trip as president, and secured more oil to fuel China's growing economy.

Although relations between Moscow and Beijing have rarely been smooth, they have improved in the past decade and Xi highlighted this by signing energy, trade and political deals on Friday to strengthen ties between them.

Russian President Vladimir Putin has long sought to blunt U.S. influence overseas, while China is grappling with the expanded military and economic interest the United States has displayed in Asia since 2011.

Xi became the first foreign guest to be met in the Kremlin by an honorary cavalry escort created by Putin in 2002, officials said, and looked at ease with the Russian leader in its glittering halls despite the formality of the occasion.

Putin, 60, greeted Xi with a firm handshake and a grin then ushered him down a red carpet past a long line of officials and into the Kremlin's gilded Green Room.

The meeting was carefully scripted and any disharmony was glossed over. But Putin looked more comfortable with Xi than with the French and German leaders, Francois Hollande and Angela Merkel, who raised human rights concerns during recent visits.

"I get the impression that you and I always treat each other with an open soul, our characters are alike. We always speak in a good manner, you and I are good friends," Xi, 59, told Putin as they began their talks, sitting in gold-trimmed chairs.

His remark recalled former U.S. President George Bush's declaration on meeting Putin in 2001 that he had looked him in the eye and "was able to get a sense of his soul".

The crowning point of the visit was an agreement between Russia's biggest oil producer, Rosneft, to gradually increase oil supplies to China to 45-50 million tonnes a year - three times the current level.

Rosneft, meanwhile, will be granted a $2 billion loan from the China Development Bank and a $2 billion deal was announced by Russian and Chinese companies to develop coal resources in eastern Siberia.

But they did not agree on a long-sought deal on supplies of pipeline gas to China, underlining the lingering mistrust that has dogged relations for decades.

Even so, Putin declared the visit a success.

"The new Chinese leader's decision to choose our country on his first foreign visit highlights the special nature of the strategic partnership between Russia and China," he said.

NEW PRESIDENT, NEW IMPULSE

Xi arrived in Moscow with first lady Peng Liyuan, a singer whose first step into the international limelight was an instant Internet sensation in China, where her glamorous appearance won her an immediate fan club.

There was no sign, however, of Putin's estranged wife, Lyudmila. She was last seen at a state event last May, when Putin was inaugurated for a six-year third term.

Putin has said he wants to "catch the Chinese wind in our economic sail". China's economy is the world's second largest and could outstrip the U.S. economy during Xi's 10-year term.

Mutual trade has more than doubled in five years to hit $87.5 billion in 2012. But the trade volume is still about five times smaller than Russia's with the European Union and far smaller than China's trade with the United States.

Relations between Russia and China were often uneasy during the Soviet era even though Moscow was also then under communist rule. But the two U.N. Security Council members' solidarity on important global issues has strengthened in recent years.

"China and Russia have similar or identical positions on key international and regional issues," Xi said, reading from a statement after talks and a document-signing ceremony, with Putin sitting beside him behind a large white desk.

"We intend to still more decisively defend the aims and principles of the U.N. Charter and the commonly accepted norms of international relations, to protect justice and equality in the world and provide for peace, stability and prosperity."

The two countries have three times blocked Western-backed measures on the conflict in Syria despite talk of grumbling in Beijing, and Russia has followed China's lead on North Korea. They gave no details of their plans for reinforced cooperation and reporters were not allowed to put questions to them.

(Additional reporting by Thomas Grove and Steve Gutterman; Writing by Timothy Heritage; Editing by Erica Billingham)

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China's new leader to meet Russia's Putin on first foreign trip

By Thomas Grove

MOSCOW (Reuters) - Decorated with Chinese paintings and red silk armchairs, a huge business complex on the edge of Moscow is the kind of enterprise China's new leader Xi Jinping wants to nurture when he arrives on Friday in Russia for his first overseas trip.

Just off the traffic-choked highway ringing Moscow, a jumble of Chinese and Russian firms, a 400-room hotel and conference venues sprawl over the 200-square-kilometre (77 square miles), $350 million Greenwood complex, which was built by a Beijing-controlled consortium with materials shipped from China.

Just as Xi will be alert to economic opportunities, so his host, President Vladimir Putin, will aim to "catch the Chinese wind in our economic sail", as he phrased it a year ago, just before his-re-election to the presidency.

That desire will grow stronger if China overtakes the United States as the world's largest economy during Xi's 10-year term.

The world's largest energy producer, Russia, and its most voracious consumer, China, want to bolster their common clout as a financial and geopolitical counterweight to Europe and the United States, whose "Asia pivot" regional strategy has caused concern in China.

Putin and Xi, less than a year apart in age, echoed one another in interviews before the visit, each saying the Chinese leader's choice of Moscow as his first destination was evidence of the "strategic partnership" between the nations.

A smiling Xi, 59, recalled that he read Russian greats such as Alexander Pushkin and Leo Tolstoy in his younger days. Putin, 60, said Russian-Chinese relations were at "the best in their centuries-long history".

The two U.N. Security Council members' solidarity on important global issues has, if anything, strengthened in recent years.

They have joined forces three times to block Western-backed measures on the conflict in Syria despite talk of grumbling in Beijing, and Russia has followed China's lead on North Korea - two issues likely to come up in talks on Friday.

They have negotiated alongside the West on Iran's nuclear program but watered down past sanctions in the Security Council and opposed new punitive measures as counterproductive.

Russia has added to Japan's woes over territorial disputes with Beijing by playing up its control over an archipelago claimed by Tokyo.

But that lockstep movement on the global stage has not translated into easy agreement on bilateral energy deals.

ELUSIVE GAS DEAL

While industry sources said a package of deals to be signed would make Beijing Russia's top customer for oil, prospects for a long-sought agreement on supplies of pipeline gas to China, stymied for years by price disputes, were dimmer.

Xi's presidency is seen as a chance for a fresh start in such talks, which have foundered on price. Putin's spokesman spoke of a "positive dynamic" on Thursday but said there was no deal ready for signing.

In his interview, released by the Kremlin hours before Xi's planned arrival, Putin said bilateral trade had more than doubled in five years and reached $87.5 billion in 2012.

"The two countries want more economic cooperation and we're not just talking about oil and gas companies, but also smaller companies as well. They are at the fore," said Yevgeny Kolesov, director of Optim Consulting, the first Russian consulting company to open in China.

But the trade volume is about five times smaller than Russia's with the European Union, and also far smaller than China's trade with the United States.

The rising influence of China, with its proximity to Russia's sparsely populated eastern parts and nearly 10 times more people, has given rise in Russia to worries that China may one day challenge Moscow's influence on its own territory.

Russia has created a separate ministry to channel resources to its far east, which complains of neglect and underfunding more than 20 years after the Soviet Union collapsed.

FAR EAST FEARS

Defense analysts say Russian efforts to allocate military resources, including air defenses and nuclear submarines, to its eastern coast is an effort to counter China's rising military might - even as Russia sells weapons to its neighbor.

Like their populations, their economies are uneven. China's gross domestic product grew 7.8 percent last year, while Russia's growth was about 3.5 percent and was close to stagnating in February, with 0.1 percent year-on-year growth.

"Economically, Russia is very concerned about the balance ... but it hasn't shown up on a political level yet," said Fyodor Lukyanov, editor of the journal Russia in Global Affairs.

In some ways, the partnership between Moscow and Beijing - awkward allies even when both were ruled by communists - may be more tactical than strategic.

For now, China wants to show it does not want problems on its border with Russia - the site of clashes half a century ago - said Dmitri Trenin, director of the Carnegie Moscow Center think tank.

It also wants the Russian oil that helps keep its economy flowing.

"The Chinese have been tremendously successful at playing the Russians to their own advantage, much better than the Americans have done with Russia," Trenin said.

Xi and Putin are expected to attend a summit next week of the BRICS group of emerging market economies, which also includes Brazil, India and host South Africa, and the Chinese leader will visit other African nations Beijing is courting.

The Chinese leader is bringing first lady Peng Liyuan on the state visit, which has left Kremlin watchers wondering whether Putin's wife, Lyudmila, will make a rare public appearance.

(Additional Reporting by Sonia Elks and Gabriela Baczynska, Editing by Steve Gutterman and Will Waterman)

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Sudan leader says he intends to step down in 2015

KHARTOUM, Sudan (AP) — Sudan's president says he intends to step down in 2015 after more than 20 years in power.

In an interview published in several Sudanese dailies on Wednesday, Omar al-Bashir says the people of Sudan need "fresh blood and a new impetus to continue their march." The next presidential election is due in 2015.

Al-Bashir seized power in a 1989 coup that toppled an elected government. He was last elected in 2010, a year before Sudan's southern region seceded.

Al-Bashir had in the past declared his intention to step down but his National Congress Party insisted he continued in office. However, the party said on Wednesday it was considering another candidate.

In the interview, al-Bashir said his decision not to run in the next election was "definite, God willing."

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New China leader Xi meets U.S.'s Lew, focus on shared aims

BEIJING (Reuters) - Treasury Secretary Jack Lew will meet new Chinese President Xi Jinping on Tuesday at a critical time in relations between the world's two largest economies, with cyber hacking, the Chinese currency and market access high on the agenda for talks.

The meeting will be Xi's first with a senior foreign official since he was formally elected as president by China's parliament on Thursday. It is also Lew's first major trip since his confirmation, indicating the importance of the relationship.

Chinese Premier Li Keqiang, the head of government, pledged on Sunday to forge "a new type of relationship" with the United States and called for the end of a cyber-hacking row between the two countries.

A private computer security company said last month a secretive Chinese military unit was likely behind a series of hacking attacks targeting the United States. President Barack Obama raised the issue during a phone call with Xi last week.

Lew plans to press Chinese officials to stop cyber attacks directed at the United States. China, in turn, says it is the target of U.S. hacking attacks.

Li has said reform was necessary to deliver long-term economic stability and Lew will also push China to accelerate economic reforms.

Lew also wants Beijing to allow its currency to rise faster against the U.S. dollar and to take steps to increase market access for U.S. goods and to protect intellectual property rights better.

Later on Tuesday, Lew will meet Xu Shaoshi, chairman of China's National and Development Reform Commission, the economic planning agency that wields approval authority over major investment projects.

Lew will also meet newly-appointed finance minister Lou Jiwei, formerly head of China's sovereign wealth fund.

(Reporting by Anna Yukhananov; Editing by Paul Tait and Michael Perry)

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North Korea's leader oversees artillery fire near disputed islands

SEOUL (Reuters) - North Korean leader Kim Jong-un supervised a live artillery drill close to a disputed sea border with South Korea, state news agency KCNA reported on Thursday, in the latest sign of increased tensions between the two Koreas.

KCNA did not specify when the drill took place. The border is seen as the most likely site of any clash between the North, which has stepped up military preparations in response to being sanctioned for its February nuclear test, and South Korea.

North Korea has threatened a nuclear war with the United States in response to new United Nations sanctions and to strike back at South Korea and the United States during military drills that the two allies are holding.

Kim praised the artillery units on two islands after watching them hit targets, in what KCNA described as the "biggest hotspots in the southwestern sector of the front", in practice for striking at two South Korean islands.

North Korea's claims to be able to stage a nuclear strike on the United States have been derided by most observers of its missile program, but it shelled a South Korean island in 2010, causing civilian casualties.

Pyongyang has kept up a steady stream of incendiary rhetoric since moves began to sanction it in the United Nations over its third nuclear test. It was also subject to sanctions for the launch of a long-range test rocket in December that critics say is aimed at proving its long-range missile technology.

The new United Nations sanctions aim to stifle funding for the North's nuclear and missile programs and for the ruling Kim dynasty, although much will depend on whether China, the North's main ally, enforces them.

So far, there are few signs beyond Pyongyang's rhetoric that it is preparing for a major conflict.

South Korean workers at the Kaesong joint industrial zone in the North reported seeing North Korean soldiers wearing camouflage webbing earlier this week but said work was proceeding as normal.

(Reporting by David Chance; Editing by Paul Tait)

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Venezuela opposition leader joins presidential race

CARACAS (Reuters) - Venezuelan opposition leader Henrique Capriles said on Sunday he will challenge the late Hugo Chavez's preferred successor for the presidency next month, setting the stage for a bitter campaign.

Capriles, a 40-year-old state governor, will face election favorite and acting President Nicolas Maduro. The pair have until Monday to register their candidacies for the April 14 vote.

The election will decide whether Chavez's self-styled socialist and nationalist revolution will live on in the country with the world's largest proven oil reserves.

"I am going to fight," Capriles said at a news conference. "Nicolas, I am not going to give you a free pass. You will have to beat me with votes."

Former vice president Maduro, 50, a hulking one-time bus driver and union leader turned politician who echoes Chavez's anti-imperialist rhetoric, is expected to win the election comfortably, according to two recent polls.

Maduro pushed for a snap election to cash in on a wave of empathy triggered by Chavez's death last Tuesday at age 58 after a two-year battle with cancer. He was sworn in as acting president on Friday to the fury of Capriles.

"You have used the body of the president for political campaigning," Capriles said of Maduro.

Capriles, the centrist Miranda state governor who often wears a baseball cap and tennis shoes, lost to Chavez in October. But he won 44 percent of the vote - the strongest showing by the opposition against Chavez.

Capriles has accused the government and Supreme Court of fraud for letting Maduro campaign without stepping down.

Although the ruling Socialist Party is favored to win, opposition supporters are trying to raise their spirits.

"There's no reason to think that the opposition is condemned to defeat," Teodoro Petkoff, an anti-government newspaper editor, said on his Sunday talk show.

Maduro has vowed to carry on where Chavez left off and ratify his policy platform. He acknowledged he has big shoes to fill.

"I am not Chavez - speaking strictly in terms of the intelligence, charisma, historical force, leadership capacity and spiritual grandeur of our comandante," he told a crowd on Saturday.

Chavez was immensely popular among Venezuela's poor for funneling vast oil wealth into social programs and handouts.

The heavy government spending and currency devaluations have contributed to annual inflation of more than 20 percent, hurting consumers.

"Maduro's success will depend on if he can fix the economy and its distortions," said a former high-level official in the Chavez government who declined to be named. "If he does that, he could emerge as a strong leader instead of one who is an heir."

DIFFICULT RACE

Maduro's first official meeting on Saturday was with officials from China, who Chavez courted to provide an alternative to investment that traditionally came from the United States.

He has adopted his mentor's touch for the theatrical, accusing imperialists, often a Chavez euphemism for the United States, of killing the charismatic but divisive leader by infecting him with cancer.

Emotional tributes were paid at a religious service at the military academy housing Chavez's casket on Sunday, where people continued to gather.

Chavez scared investors with nationalizations and railed against the wealthy. In heavily polarized Venezuela some well-to-do citizens toasted his death with champagne.

Venezuela's opposition coalition backed Capriles as its candidate on Saturday. If elected, Capriles says he would copy Brazil's "modern left" model of economic and social policies.

Given the state resources at Maduro's disposal and the limited time for campaigning, Capriles faces an uphill battle.

"If the opposition runs, they'll lose. If they don't run, they lose even more!" tweeted Andres Izarra, who served as information minister under Chavez.

The opposition rank-and-file is heavily demoralized after losing last year's presidential race and getting hammered in gubernatorial elections in December, stoking internal party divisions.

"There's no doubt that it's an uphill race for Capriles," local political analyst Luis Vicente Leon said. "The trouble is that given the race is so close to Chavez's death, emotions get inflamed and the candidate probably continues to be Chavez rather than Maduro."

"The big challenge for Capriles is not to campaign against Chavez but to try to take the fight to Maduro ... trying to show the huge gap (with Chavez) and relate it to the daily problems Venezuelans face."

(With reporting by Ana Isabel Martinez, Simon Gardner, Terry Wade, Pablo Garibian, Deisy Buitrago, Mario Naranjo and Enrique Andres Pretel; Editing by Stacey Joyce)

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Egypt's leader mulls army takeover of restive city

CAIRO (AP) — Officials say the Egyptian president is considering whether to give the military full control of the restive city of Port Said after days of deadly street clashes stoked by excessive force used by riot police.

The officials say Mohammed Morsi met Tuesday with his security chief and top military officers to discuss pulling out the police and putting the military in charge of the Suez Canal city to defuse tensions.

The violence has killed at least three civilians and three policemen and injured hundreds since Sunday.

The military sent reinforcement to Port Said late Monday, after protesters torched a government building and police headquarters there.

The officials from the Egyptian military and the presidential office spoke on condition of anonymity because they are not authorized to speak to the media.

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Anti-al-Qaida leader killed in Iraq shooting

BAGHDAD (AP) — A local leader of anti-al-Qaida militiamen was shot dead Tuesday in western Baghdad, one of four people killed in violence in different parts of Iraq, officials said.

The pro-government militiamen, known as the Sahwa group, joined forces with U.S. troops to fight al-Qaida during the Iraq war. Since then, the group has been a target for Sunni insurgents who consider its members to be traitors.

The leader was driving through Baghdad's western suburb of Abu Ghraib when drive-by shooters sprayed his car with bullets, killing him, a police officer said.

Another group of drive-by shooters shot and killed a municipality official in the capital's southern Saydiyah neighborhood, another police officer said.

Also in Baghdad, gunmen broke into a real estate office in the northern Sabi al-Boor neighborhood, killing two and wounding two, police said. The motive behind the attack was not immediately clear.

Three health officials confirmed the causalities. All officials spoke on condition of anonymity as they were not authorized to release the information to reporters.

Also, the provincial spokesman of the northern Kurdish city of Irbil, Hamza Othman, says a bomb attached to a car belonging to the Kurdish regional forces exploded and wounded a colonel.

Irbil is in Iraq's largely peaceful Kurdish region, 350 kilometers (220 miles) north of Baghdad. The area has generally been free of the bombings and shootings that have plagued the rest of Iraq.

Violence has ebbed in Iraq, but Sunni insurgents still launch frequent attacks to challenge the Shiite-led government.

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Mexico's arrested union leader started humble

MEXICO CITY (AP) -- Elba Esther Gordillo started out as a school teacher, then rose to become one of Mexico's most flamboyant and powerful political operators, displaying her opulence openly with designer clothes and bags.

For years, the 68-year-old union leader beat back attacks from dissidents, political foes and journalists who have seen her as a symbol of Mexico's corrupt, old-style politics. Rivals long accused her of corruption, misuse of union funds and even a murder.

But prosecutors had never brought a charge against her until Tuesday, when she was arrested and accused of embezzling $160 million in union funds to pay for everything from houses in a suburb of San Diego, California, to plastic surgery to her Neiman Marcus bill.

Gordillo was detained as she landed at the Toluca airport near Mexico City on a private plane from San Diego and whisked away by authorities.

Born in the impoverished southern state of Chiapas, Gordillo was just 15 years old when she joined the National Education Workers Union, then considered a sort of electoral army for the Institutional Revolutionary Party, or PRI, which governed Mexico for 71 years. She followed the path of most Mexican politicians, rising through a series of union, party and government posts. She was a senator for the PRI and also served in Mexico's lower house.

When a strike by dissident teachers led President Carlos Salinas to oust the old boss of the teacher's union in 1989, the job fell to Gordillo, who was widely seen as a reformer.

The union post made her one of the most powerful figures in the PRI at a moment when democratic reforms were starting to erode the party's hold on power, as well as its unquestioning subservience to Mexico's president.

Even before the PRI lost the 2000 election to the National Action Party's Vicente Fox, Gordillo began hedging her bets. She was the guiding force behind the creation of the New Alliance Party, which was based on members of the teacher's union and was once headed by one of her daughters.

She participated in a high-profile discussion group that included prominent social activists and opponents of the government, including Fox, and her friendship with him infuriated some PRI officials, who managed to prevent her from becoming leader of the party in 2005. She was expelled from the party a year later for supporting other parties' candidates and for founding the New Alliance.

The new party, along with the vast spread of the teacher's union itself, has given Gordillo special leverage. Because it is large enough to swing votes from one large party to another, rivals have negotiated for its backing. Her support was considered key in giving both Fox and Felipe Calderon the presidency, as well as blocking her rival, Andres Manuel Lopez Obrador, from reaching Mexico's highest office.

She maintained close ties to Calderon and was seen as the force behind the humiliating firing of Education Secretary Josefina Vazquez Mota in 2009. Officials said the firing was revenge for Vazquez Mota mocking Gordillo after it was widely reported that the union leader was going to offer Hummers to subordinates. In the middle of the Hummer controversy, Vazquez Mota jokingly offered a toy Hummer to one of her advisers at a private dinner and Gordillo heard of the incident and became enraged.

Witnesses recall seeing Vazquez Mota's legs trembling so much she had to sit down as Calderon announced her resignation.

Critics accused Gordillo of amassing more than a dozen properties worth millions of dollars. The newspaper Reforma once published a story analyzing one of her outfits and reported she was carrying a $5,500 purse and wearing $1,200 shoes.

She has acknowledged some of the wealth, saying part was inherited and part she earned through her job that paid her about $6,000 (80,000 pesos) a month.

A company that Mexican prosecutors said was registered to her dead mother's estate owns two multimillion-dollar houses in Coronado, a wealthy peninsular enclave across the bay from downtown San Diego. The properties sit across the street from each other in a gated community that caters to retirees and people with second homes.

One is a modern structure with six bedrooms and a three-car garage. It was purchased in 1991 for $1.15 million and is currently assessed at $4.72 million. A boat was docked behind the house Wednesday.

Coronado police visited the home Tuesday night after a newspaper reporter called to report that the front door was wide open, police spokeswoman Lea Corbin said. No one was inside, and police closed the door.

The company linked to the late mother's estate, Comercializadora TTS SA de CV, also owns a house across the street that was purchased in 2010 and is currently assessed at $4.08 million.

Lothar Kramer, 85, has lived next door to the six-bedroom home since 1985 and said he rarely saw anyone there and didn't know who owned it.

___

Associated Press writers Adriana Gomez Licon in Mexico City and Elliot Spagat in San Diego, California, contributed to this report.

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Opposition leader visits Syria amid Assad offensive

AMMAN (Reuters) - Opposition leader Moaz Alkhatib visited rebel-held towns in north Syria for the first time on Sunday as rebel fighters seized an army outpost from President Bashar al-Assad's forces outside the contested northern city of Aleppo, activists said.

The capture of the police academy at Khan al-Asal, used by Assad's forces as an artillery base to support troops still holding around 40 percent of the northern city, came after days of fighting in which rebels killed 150 soldiers, while sustaining heavy casualties, they said.

In an attempt to consolidate those gains on the ground and strengthen links between Assad's military and civilian foes, Alkhatib crossed into northern Syria from neighboring Turkey and toured the towns of Jarablus and Minbij.

Earlier he attended a meeting of 220 rebel commanders and opposition campaigners in the Turkish city of Gaziantep to elect an administration for Aleppo province, home to 6 million people.

Alkhatib, a 52-year-old former preacher at the Umayyad Mosque in Damascus, was chosen in November to head the coalition of political opposition to Assad. He won modest pledges of support for the rebels from Western and Arab ministers in Rome last week.

He has also said he is ready for talks with representatives of Assad's government to help find a political solution to a conflict which erupted nearly two years ago and has descended into a civil war in which around 70,000 people have been killed.

Assad, in an interview with British newspaper The Sunday Times, said his government was prepared to talk to fighters who lay down their weapons but insisted he would not leave the country or step aside under foreign pressure.

"We are ready to negotiate with anyone, including militants who surrender their arms," he said according to a transcript released by state media. However there would be no talks with "terrorists who are determined to carry weapons," he added.

"We have to be clear about this. We have opposition that are political entities and we have armed terrorists. We can engage in dialogue with the opposition but we cannot engage in dialogue with terrorists. We fight terrorists."

Alkhatib's opposition coalition says that any talks must focus on Assad's departure -- the objective of the 23-month uprising -- while rebel leaders have set even tougher conditions, insisting he depart before they start talks.

But Assad, who inherited power from his father in 2000, said he was not going anywhere. "No patriotic person will think about living outside his country. I am like any other patriotic Syrian," he told the newspaper.

In response to calls from some Western and Arab governments for him to go, Assad replied: "Only (the) Syrian people can tell the president: stay or leave, come or go."

BASE CAPTURED

Opposition activists say the capture of Khan al-Asal base, 7 km (5 miles) southwest of Aleppo, comes as a boost to a joint opposition military command set up last year with Western and Arab backing to try to counter the growing military prowess of the al Qaeda-linked Jabhat al-Nusra.

"It is a locally made victory achieved by a myriad of brigades from the rural west of Aleppo. It shows that you don't have to have a foreign name to achieve victory," activist Abu Mujahed told Reuters from the area.

He said the brigades who took the site were mostly Islamist but did not subscribe to al Qaeda ideology. He added that an army academy on the western edge of the city is the last major barrier between the rebels and Assad's forces inside Aleppo.

Video footage showed Colonel Abdelbasset Tawil of the joint command of the Free Syrian army reading a statement declaring the seizure of the site among a group of commander of various brigades. "These honorable forces will continue to fight until the downfall of the Assad gang," Tawil said.

The walled complex at Khan al-Asal was turned into an army barrack from where artillery and rocket launchers gave cover for Assad's forces holding around 40 percent of Aleppo, the opposition sources said.

Video footage released by the rebel Farouq Brigade showed a rebel-driven tank firing at the base before its capture. Other videos showed fighters touring the site after it fell, stamping on a large picture of Assad and shouting: "We will get to you."

Further east, Iraqi military sources said Iraq shut a border crossing with Syria on Sunday after rebels seized the Syrian side of the frontier post close to the Syrian town of Yaarabiya.

"Iraqi authorities were ordered to shut off Rabia border crossing until further notice because of the Syrian government's lack of control over the other side of the post," police said.

Military sources said blast walls now blocked off the border crossing and employees had been evacuated, though both sides of the crossing were calm and there was no sign of Syrian troops or the rebel Free Syrian Army (FSA) forces across the border.

In Amman, Jordan's national carrier Royal Jordanian said it had stopped flying over Syrian air space for security reasons. The airline stopped its regular flights to Damascus last year along with some other carriers.

(Editing by Dominic Evans and Stephen Powell)

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Cuban leader Raul Castro says he will retire in 2018

HAVANA (Reuters) - Cuban President Raul Castro announced on Sunday he will step down from power after his second term ends in 2018, and the new parliament named a 52-year-old rising star to become his first vice president and most visible successor.

"This will be my last term," Castro, 81, said shortly after the National Assembly elected him to a second five-year term.

In a surprise move, the new parliament also named Miguel Diaz-Canel as first vice president, meaning he would take over if Castro cannot serve his full term.

Diaz-Canel is a member of the political bureau who rose through the Communist Party ranks in the provinces to become the most visible possible successor to Castro.

Raul Castro starts his second term immediately, leaving him free to retire in 2018, aged 86.

Former President Fidel Castro joined the National Assembly meeting on Sunday, in a rare public appearance. Since falling ill in 2006 and ceding the presidency to his brother, the elder Castro, 86, has given up official positions except as a deputy in the National Assembly.

The new government will almost certainly be the last headed up by the Castro brothers and their generation of leaders who have ruled Cuba since they swept down from the mountains in the 1959 revolution.

Cubans and foreign governments were keenly watching whether any new, younger faces appeared among the Council of State members, in particular its first vice president and five vice presidents.

Their hopes were partially fulfilled with Diaz-Canel's ascension. He replaces former first vice president, Jose Machado Ventura, 82, who will continue as one of five vice presidents.

Commander of the Revolution Ramiro Valdes, 80, and Gladys Bejerano, 66, the comptroller general, were also re-elected as vice presidents.

Two other newcomers, Mercedes Lopez Acea, 48, first secretary of the Havana communist party, and Salvador Valdes Mesa, 64, head of the official labor federation, also earned vice presidential slots.

Esteban Lazo, a 68-year-old former vice president and member of the political bureau of the Communist Party, left his post upon being named president of the National Assembly on Sunday. He replaced Ricardo Alarcon, who served in the job for 20 years.

Six of the Council's top seven members sit on the party's political bureau which is also lead by Castro.

The National Assembly meets for just a few weeks each year and delegates its legislative powers between sessions to the 31-member Council of State, which also functions as the executive through the Council of Ministers it appoints.

Eighty percent of the 612 deputies, who were elected in an uncontested vote February 3, were born after the revolution.

EFFORT TO PROMOTE YOUNGER GENERATION

Raul Castro, who officially replaced his ailing brother as president in 2008, has repeatedly said senior leaders should hold office for no more than two five-year terms.

"Although we kept on trying to promote young people to senior positions, life proved that we did not always make the best choice," Castro said at a Communist Party Congress in 2011.

"Today, we are faced with the consequences of not having a reserve of well-trained replacements ... It's really embarrassing that we have not solved this problem in more than half a century."

Speaking on Sunday, Castro hailed the composition of the new Council of State as an example of what he had said needed to be accomplished.

"Of the 31 members, 41.9 percent are women and 38.6 percent are black or of mixed race. The average age is 57 years and 61.3 percent were born after the triumph of the revolution," he said.

The 2011 party summit adopted a more than 300-point plan aimed at updating Cuba's Soviet-style economic system, designed to transform it from one based on collective production and consumption to one where individual effort and reward play a far more important role.

Across-the-board subsidies are being replaced by a comprehensive tax code and targeted welfare.

Raul Castro has encouraged small businesses and cooperatives in retail services, farming, minor manufacturing and retail, and given more autonomy to state companies which still dominate the economy.

The party plan also includes an opening to more foreign investment.

At the same time, Cuba continues to face a U.S. administration bent on restoring democracy and capitalism to the island and questions about the future largess of oil rich Venezuela with strategic ally Hugo Chavez battling cancer.

(Editing by Kieran Murray and Vicki Allen)

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