West to send Syrian rebels aid, not arms

ROME (Reuters) - Western powers pledged aid for Syrian rebels on Thursday but stopped short of offering them weapons, disappointing opponents of President Bashar al-Assad clamoring for more arms.

More than 70,000 Syrians have been killed in a fierce conflict that began with peaceful anti-Assad protests nearly two years ago.

Washington has given $385 million in humanitarian aid for Syria but U.S. President Barack Obama has so far refused to give arms, arguing it is difficult to prevent them from falling into the hands of militants who could use them on Western targets.

The United States said it would for the first time give non-lethal aid to the rebels and would more than double its support to Syria's civilian opposition, casting it as a way to bolster the rebels' popular support.

The help will include medical supplies, food for rebel fighters and $60 million to help the civil opposition provide basic services like security, education and sanitation.

U.S. Secretary of State John Kerry announced the new steps after a meeting of 11 mostly European and Arab nations within the "Friends of Syria" group.

The European Union, acting on a decision this month to send direct aid to the rebels, said it had amended sanctions on Syria to permit the supply of armored vehicles, non-lethal military equipment and technical aid, provided they were intended to protect civilians.

If the provision of non-lethal assistance goes smoothly, it could conceivably offer a model for providing weaponry should Western governments ultimately decide to do so.

The aid offered for now did not appear to entirely satisfy the Syrian National Council opposition, a fractious Cairo-based group that has struggled to gain traction inside Syria, especially among disparate rebel forces.

"Many sides ... focus (more) on the length of the rebel fighter's beard than they do on the blood of the children being killed," Syrian National Coalition President Moaz Alkhatib said at an appearance with Kerry and Italian Foreign Minister Giulio Terzi.

A rebel commander in Aleppo, Syria's second city left devastated by several months of heavy fighting, said the lack of arms was the main obstacle to victory for his forces.

"We hope ... that weapons will flow and things will change but we are not waiting for them - we are going ahead with our fighting plans on the ground," the commander, Abdel-Jabbar Oqaidi, told Reuters by Skype.

He estimated that four fifths of the city was now under rebel control and the insurgents had taken over Aleppo's historic Umayyad mosque and the Palace of Justice. The claim could not immediately be verified.

A picture posted on the Internet showed what activists said was a rebel fighter prostrate in prayer in the Umayyad mosque's courtyard, its blackened archways still bearing signs of a fire which damaged the 13th century complex last year.

The rebels were still fighting for control of three airports in the Aleppo region, Oqaidi said.

DISAPPOINTMENT

In what analysts described as a sign of disappointment at the West's reluctance to send arms, Syria's political opposition postponed talks to choose the leader of a provisional government, two opposition sources told Reuters in Beirut.

Opposition leaders hoped a Saturday meeting in Istanbul would elect a prime minister to operate in rebel-controlled areas of Syria, threatened by a slide into chaos as the conflict between Assad's forces and insurgents nears its second anniversary.

While one source said the meeting might happen later in the week, a second source said it had been put off because the three most likely candidates for prime minister had reservations about taking the role without more concrete international support.

"The opposition has been increasingly signaling that it is tired of waiting and no one serious will agree to be head of a government without real political and logistical support," said Syrian political commentator Hassan Bali, who lives in Germany.

Bali said the United States and other members of the core "Friends of Syria" nations appeared intent "on raising the ante against Assad but are not sure how."

A final communiqué said participants would "coordinate their efforts closely so as to best empower the Syrian people and support the Supreme Military Command of the (rebel) Free Syrian Army in its efforts to help them exercise self-defense".

Kerry said the United States would for the first time provide assistance - in the form of medical supplies and the standard U.S. military ration known as Meals Ready to Eat, or MREs - to the fighters.

A U.S. official told reporters it would give the aid only to carefully vetted fighters, adding that the United States was worried that "extremists" opposed to democracy, human rights and tolerance were gaining ground in the country.

"Those members of the opposition who support our shared values ... need to set an example of a Syria where daily life is governed neither by the brutality of the Assad regime nor by the agenda of al Qaeda affiliated extremists," the official said.

REBELS WANT ANTI-TANK, ANTI-AIRCRAFT WEAPONS

The continued U.S. refusal to send weapons may compound the frustration that prompted the coalition to say last week it would shun the Rome talks. It attended only under U.S. pressure.

Many in the coalition say Western reluctance to arm rebels only plays into the hands of Islamist militants now widely seen as the most effective forces in the struggle to topple Assad.

With fighting raging on largely sectarian lines, French President Francois Hollande said at a Moscow summit that new partners were needed to broker talks on ending the crisis, winning guarded support from Russian President Vladimir Putin.

"We think that this dialogue must find a new form so that it speaks to all parties," said Hollande, giving few details of his proposal.

Putin said Russia - one of Assad's staunchest allies - would look at Hollande's proposal, "which I think we could consider with all our partners and try to carry out."

Russia has said Assad's departure must not be a precondition for talks and a political solution, while the West has sided with Syria's opposition in demanding his removal from power.

Kerry's offer of medical aid and food rations fell far short of rebel demands for sophisticated anti-tank and anti-aircraft weapons to help turn the tables against Assad's mostly Russian-supplied forces.

It also stopped short of providing other forms of non-lethal assistance such as bullet-proof vests, armored personnel vehicles and military training to the insurgents.

Last week the European Union opened the way for direct aid to Syrian rebels, but did not lift an arms embargo on Syria.

Kerry said the U.S. role should not be judged in isolation but in the context of what other nations will do.

"What we are doing ... is part of a whole," he said. "I am absolutely confident ... that the totality of this effort is going to have an impact of the ability of the Syrian opposition to accomplish its goals."

(Additional reporting by Mariam Karouny; Writing by Alistair Lyon; Editing by Roger Atwood and Tom Pfeiffer)

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Iran upbeat on nuclear talks, West still wary

ALMATY (Reuters) - Iran was upbeat on Wednesday after talks with world powers about its nuclear work ended with an agreement to meet again, but Western officials said it had yet to take concrete steps to ease their fears about its atomic ambitions.

Rapid progress was unlikely with Iran's presidential election, due in June, raising domestic political tensions, diplomats and analysts had said ahead of the February 26-27 meeting in the Kazakh city of Almaty, the first in eight months.

The United States, China, France, Russia, Britain and Germany offered modest sanctions relief in return for Iran curbing its most sensitive nuclear work but made clear that they expected no immediate breakthrough.

In an attempt to make their proposals more palatable to Iran, the six powers appeared to have softened previous demands somewhat, for example regarding their requirement that the Islamic state ship out its stockpile of higher-grade uranium.

Iran's chief nuclear negotiator Saeed Jalili said the powers had tried to "get closer to our viewpoint", which he said was positive.

In Paris, U.S. Secretary of State John Kerry commented that the talks had been "useful" and that a serious engagement by Iran could lead to a comprehensive deal in a decade-old dispute that has threatened to trigger a new Middle East war.

Iran's foreign minister said in Vienna he was "very confident" an agreement could be reached and Jalili, the chief negotiator, said he believed the Almaty meeting could be a "turning point".

However, one diplomat said Iranian officials at the negotiations appeared to be suggesting that they were opening new avenues, but it was not clear if this was really the case.

Iran expert Dina Esfandiary of the International Institute for Strategic Studies said: "Everyone is saying Iran was more positive and portrayed the talks as a win."

"I reckon the reason for that is that they are saving face internally while buying time with the West until after the elections," she said.

The two sides agreed to hold expert-level talks in Istanbul on March 18 to discuss the powers' proposals, and return to Almaty for political discussions on April 5-6, when Western diplomats made clear they wanted to see a substantive response from Iran.

"Iran knows what it needs to do, the president has made clear his determination to implement his policy that Iran will not have a nuclear weapon," Kerry said.

A senior U.S. official in Almaty said, "What we care about at the end is concrete results."

ISRAELI WARNING

Israel, assumed to be the Middle East's only nuclear-armed power, was watching the talks closely. It has strongly hinted it might attack Iran if diplomacy and sanctions fail to ensure that it cannot build a nuclear weapon. Iran denies any such aim.

Israeli Prime Minister Benjamin Netanyahu said economic sanctions were failing and urged the international community to threaten Iran with military action.

Western officials said the offer presented by the six powers included an easing of a ban on trade in gold and other precious metals, and a relaxation of an import embargo on Iranian petrochemical products. They gave no further details.

In exchange, a senior U.S. official said, Iran would among other things have to suspend uranium enrichment to a fissile concentration of 20 percent at its Fordow underground facility and "constrain the ability to quickly resume operations there".

The official did not describe what was being asked of Iran as a "shutdown" of the plant as Western diplomats had said in previous meetings with Iran last year.

Iran says it has a sovereign right to enrich uranium for peaceful purposes, and wants to fuel nuclear power plants so that it can export more oil.

But 20-percent purity is far higher than that needed for nuclear power, and rings alarm bells abroad because it is only a short technical step away from weapons-grade uranium. Iran says it produces higher-grade uranium to fuel a research reactor.

Iran's growing stockpile of 20-percent-enriched uranium is already more than half-way to a "red line" that Israel has made clear it would consider sufficient for a bomb.

In Vienna on Wednesday, a senior U.N. nuclear agency official told diplomats in a closed-door briefing that Iran was technically ready to sharply increase this higher-grade enrichment, two Western diplomats said.

"Iran can triple 20 percent production in the blink of an eye," one of the diplomats said.

The U.S. official in Almaty said the powers' latest proposal would "significantly restrict the accumulation of near-20-percent enriched uranium in Iran, while enabling the Iranians to produce sufficient fuel" for their Tehran medical reactor.

This appeared to be a softening of a previous demand that Iran ship out its stockpile of higher-grade enriched uranium, which it says it needs to produce medical isotopes.

Iran has often indicated that 20-percent enrichment could be up for negotiation if it received the fuel from abroad instead.

Jalili suggested Iran could discuss the issue, although he appeared to rule out shutting down Fordow. He said the powers had not made that specific demand.

The Iranian rial, which has lost more than half its foreign exchange value in the last year as sanctions bite, rose some 2 percent on Wednesday, currency tracking websites reported.

(Additional reporting by Fredrik Dahl and Yeganeh Torbati in Almaty, Georgina Prodhan in Vienna, Zahra Hosseinian in Zurich, Gabriela Baczynska in Moscow, Dan Williams in Jerusalem and Marcus George in Dubai; Writing by Timothy Heritage and Fredrik Dahl; Editing by Louise Ireland)

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Italy parties seek way out of election stalemate

ROME (Reuters) - Italy's stunned political parties searched for a way forward on Tuesday after an inconclusive election gave none of them a parliamentary majority and threatened prolonged instability and a renewal of the European financial crisis.

The results, notably the dramatic surge of the anti-establishment 5-Star Movement of comic Beppe Grillo, left the center-left bloc with a majority in the lower house but without the numbers to control the upper chamber, the Senate.

Financial markets fell sharply at the prospect of a stalemate that reawakened memories of the crisis that pushed Italy's borrowing costs toward unsustainably high levels and brought the euro zone to the brink of collapse in 2011.

"The winner is: Ingovernability," ran the headline in Rome newspaper Il Messaggero, reflecting the deadlock the country will have to confront in the next few weeks as sworn enemies are forced to work together to form a government.

Ratings agency Standard & Poor's said on Tuesday that policy choices of the next Italian government would be crucial for the country's creditworthiness, underlining the need for a coalition that can agree on new reforms.

Pier Luigi Bersani, head of the center-left Democratic Party (PD), has the difficult task of trying to agree a "grand coalition" with former prime minister Silvio Berlusconi, the man he blames for ruining Italy, or striking a deal with Grillo, a completely unknown quantity in conventional politics.

The alternative is new elections either immediately or within a few months, although both Berlusconi and Bersani have indicated that they want to avoid a return to the polls if possible: "Italy cannot be ungoverned and we have to reflect," Berlusconi said in an interview on his own television station.

For his part, Grillo, whose movement won the most votes of any single party, has indicated that he believes the next government will last no more than six months.

"They won't be able to govern," he told reporters on Tuesday. "Whether I'm there or not, they won't be able govern."

He said he would work with anyone who supported his policy proposals, which range from anti-corruption measures to green-tinted energy measures but rejected suggestions of entering a formal coalition: "It's not time to talk of alliances... the system has already fallen," he said.

The election, a massive rejection of the austerity policies applied by Prime Minister Mario Monti with the backing of international leaders from U.S. President Barack Obama to German Chancellor Angela Merkel, caused consternation across Europe.

German Finance Minister Wolfgang Schaeuble put a brave face on it, saying "that's democracy".

Spanish Foreign Minister Jose Manuel Garcia-Margallo was more pessimistic.

"This is a jump to nowhere that does not bode well either for Italy or Europe," he said.

A long recession and growing disillusionment with mainstream parties and tax-raising austerity fed a bitter public mood and contributed to the massive rejection of Monti, whose centrist coalition was relegated to the sidelines.

Projections by the Italian center for Electoral Studies showed that the center-left will have 121 seats in the Senate, against 117 for the center-right alliance of Berlusconi's PDL and the regionalist Northern League. Grillo would take 54.

That leaves no party with the majority in a chamber which a government must control to pass legislation.

"THE BELL IS RINGING"

On a visit to Germany, President Giorgio Napolitano said he would not comment until the parties had consulted with each other and Bersani called on Berlusconi and Grillo to "assume their responsibilities" to ensure Italy could have a government.

He warned that the election showed austerity policies alone were no answer to the economic crisis and said the result carried implications beyond Italy.

"The bell is ringing for Europe as well," he said in his first public comments since the election.

He said he would present a limited number of reform proposals to parliament, focusing on jobs, institutional reform and European policy.

However forming an alliance may be long and difficult and could test the sometimes fragile internal unity of the mainstream parties.

"The idea of a majority without Grillo is unthinkable. I don't know if anyone in the PD is considering it but I'm against it," said Matteo Orfini, a member of Bersani's PD secretariat.

"The idea of a PD-PDL government, even if it's backed by Monti, doesn't make any sense," he said.

For his part, Berlusconi won a boost when his Northern League ally Roberto Maroni won the election to become regional president of Lombardy, Italy's economic heartland and one of the richest and most productive areas of Europe.

For Italian business, with an illustrious history of export success, the election result brought dismay that there would be no quick change to what they see as a regulatory sclerosis that has kept the economy virtually stagnant for a decade.

"This is probably the worst possible scenario," said Francesco Divella, whose family began selling pasta under its eponymous brand in 1890 in the southern region of Puglia.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

But even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy that has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, who is currently on trial for having sex with an under-age prostitute.

However, Monti struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth. A weak center-left government may not find it any easier.

The view from some voters, weary of the mainstream parties, was unrepentant: "It's good," said Roger Manica, 28, a security guard in Rome, who voted for the center-left PD.

"Next time I'll vote 5-Star. I like that they are changing things, even if it means uncertainty. Uncertainty doesn't matter to me, for me what's important is a good person who gets things done," he said. "Look how well they've done."

(Additional reporting by Barry Moody, Gavin Jones, Lisa Jucca, Steven Jewkes, Steve Scherer, Catherine Hornby and Massimiliano Di Giorgio, Annika Breidthardt in Berlin. Writing by Philip Pullella and James Mackenzie; Editing by Peter Graff)

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Huge protest vote pushes Italy towards deadlock

ROME (Reuters) - A huge protest vote by Italians enraged by economic hardship and political corruption pushed the country towards deadlock after an election on Monday, with voting projections showing no coalition strong enough to form a government.

With more than two thirds of the vote counted, the projections suggested the center left could have a slim lead in the race for the lower house of parliament.

But no party or likely coalition appeared likely to be able to form a majority in the upper house or Senate, creating a deadlocked parliament - the opposite of the stable result that Italy desperately needs to tackle a deep recession, rising unemployment and a massive public debt.

Such an outcome has the potential to revive fears over the euro zone debt crisis, with prospects of a long period of uncertainty in the zone's third largest economy.

Italian financial markets took fright after rising earlier on hopes for a stable and strong center-left led government, probably backed by outgoing technocrat premier Mario Monti.

The projected result was a stunning success for Genoese comic Beppe Grillo, leader of the populist 5-Star Movement, who toured the country in his first national election campaign hurling obscenity-laced insults against a discredited political class.

With vague election promises and a team of almost totally unknown candidates, the shaggy haired comedian channeled pure public anger against what many see as a sclerotic and useless political system.

The likely result was also a humiliating slap in the face for colorless center-left leader Pier Luigi Bersani, who appeared to have thrown away a 10-point opinion poll lead less than two months ago against Silvio Berlusconi's center right.

Berlusconi, 76, who staged an extraordinary comeback from sex and corruption scandals since diving into the campaign in December, appeared to be leading in the Senate race, but Grillo's projected bloc of Senators would leave him well short of a majority.

Projections gave Bersani's center-left alliance a lead of less than one percentage point in the lower house. If confirmed, that would be enough to control the chamber because of election laws that guarantee a 54 percent majority to the party with the largest share of the vote.

In the Senate the picture was different. The latest projection from RAI state television showed Berlusconi's bloc winning 112 Senate seats, the center-left 105 and Grillo 64, with Monti languishing on only 20 after a failed campaign which never took off. The Senate majority is 158.

Berlusconi, a master politician and communicator, wooed voters with a blitz of television appearances and promises to refund a hated housing tax despite accusations from opponents that this was an impossible vote buying trick.

Grillo has attacked all sides in the campaign and ruled out a formal alliance with any group although it was not immediately known how he would react to his stunning success or how his supporters would behave in parliament.

DANGER OF NEW ELECTION

A bitter campaign, fought largely over economic issues, made some investors fear a return of the kind of debt crisis that took the euro zone close to disaster and brought the technocrat Monti to office, replacing Berlusconi, in 2011.

The projected results showed more than half of Italians had voted for the anti-euro platforms of Berlusconi and Grillo.

Officials from both center and left warned that the looming deadlock could make Italy ungovernable and force new elections.

A center-left government either alone or ruling with Monti had been seen by investors as the best guarantee of measures to combat a deep recession and stagnant growth in Italy, which is pivotal to stability in the currency union.

The benchmark spread between Italian 10-year bonds and their German equivalent widened from below 260 basis points to above 300 and the Italian share index lost all its previous gains after projections of the Senate result.

"These projections suggest that we are heading for an ungovernable situation", said Mario Secchi, a candidate for Monti's centrist movement.

Stefano Fassina, chief economic official for Bersani's center-left, said: "The scenario from the projections we have seen so far suggests there will be no stable government and we would need to return to the polls."

If the results are confirmed the only possibility looks like a "grand coalition" combining right and left, like the one Monti led for a year. But politicians said before the vote this could not work for long and would struggle to work decisively.

Monti helped save Italy from a debt crisis when Rome's borrowing costs were spiraling out of control, but few Italians now see him as the savior of the country, in its longest recession for 20 years.

Grillo's movement rode a huge wave of voter anger about both the pain of Monti's austerity program and a string of political and corporate scandals. It had particular appeal for a frustrated younger generation shut out of full-time jobs.

"I'm sick of the scandals and the stealing," said Paolo Gentile, a 49-year-old Rome lawyer who voted for 5-Star.

"We need some young, new people in parliament, not the old parties that are totally discredited."

Berlusconi, a billionaire media tycoon, exploited anger against Monti's austerity program, accusing him of being a puppet of German Chancellor Angela Merkel, but in many areas Grillo was a bigger beneficiary of public discontent.

Italy desperately needs a strong, reform-minded government to revive growth after two decades of stagnation and address problems ranging from record youth unemployment to a dysfunctional justice system and a bloated public sector.

Italians wrung their hands at prospects of an inconclusive result that will mean more delays to these reforms.

"It's a classic result. Typically Italian. It means the country is not united. It is an expression of a country that does not work. I knew this would happen," said 36-year-old Rome office worker Roberta Federica.

Another office worker, Elisabetta Carlotta, 46, shook her head in disbelief. "We can't go on like this," she said.

(Additional reporting by Stefano Bernabei, Steve Scherer, Gavin Jones, Naomi O'Leary and Giuseppe Fonte in Rome and Lisa Jucca in Milan; Writing by Barry Moody; Editing by Peter Graff)

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Syrian opposition says captures former nuclear site

AMMAN (Reuters) - Syrian rebels have captured the site of a suspected nuclear reactor near the Euphrates river which Israeli warplanes destroyed six years ago, opposition sources in eastern Syria said on Sunday.

Al-Kubar site, around 60 km (35 miles) west of the city of Deir al-Zor, became a focus of international attention when Israel raided it in 2007. The United States said the complex was a North Korean-designed nuclear reactor geared to making weapons-grade plutonium.

Omar Abu Laila a spokesman for the Eastern Joint Command of the Free Syrian Army said the only building rebels found at the site was a hangar containing at least one Scud missile.

"It appears that the site was turned into a Scud launch base. Whatever structures it had have been buried," he said, adding that three army helicopters airlifted the last loyalist troops before opposition fighters overran the area on Friday.

The Syrian military, which razed the site after the Israeli raid, said the complex was a regular military facility but refused to allow the International Atomic Energy Agency unrestrained access, after the agency said the complex could have been a nuclear site.

The U.N. investigation appears to have died down since the national revolt against Preident Bashar al-Assad broke out in 2011, with the armed opposition increasingly capturing military sites in rural areas and on the edges of cities.

U.N. inspectors examined the site in June 2008 but Syrian authorities has barred them access since.

Abu Laila said Scuds appear to have been fired from Kubar at rebel-held areas in the province of Homs to the west.

The complex, he said, had command and control links with loyalist troops in the city of Deir al-Zor, where Assad's forces have been on the retreat and are now based mainly in and around the airport in the south of the city.

Footage showed fighters inspecting the site and one large missile inside a hangar. One fighter pointed to what he said were explosives placed under the missile to destroy it before attacking forces got to it.

Abu Hamza, a commander in the Jafaar al-Tayyar brigade, said in a YouTube video taken at Kubar that various rebel groups, including the al Qaeda linked al-Nusra front, took part the operation and that U.N. inspectors were welcome to come and survey the site.

In the last few months, opposition fighters have captured large swathes of the province of Deir al-Zor, a Sunni Muslim desert oil producing region that borders Iraq, including most of a highway along Euphrates leading to Kubar.

The province is far from the Assad's main military supply bases on the coast and in Damascus. Long-time alliances between Assad, who belongs to the minority Alawite sect, an offshoot of Islam, and Sunni tribes in Deir al-Zor have also largely collapsed since the revolt.

But Assad's forces remain entrenched in the south of the city of Deir al-Zor and armed convoys guarded by helicopters still reach the city from the city of Palmyra to the southwest, according to opposition sources.

(Editing by Stephen Powell)

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Rockets hit Aleppo, killing at least 29: monitor

BEIRUT (Reuters) - Rockets struck eastern districts of Aleppo, Syria's biggest city, on Friday, killing at least 29 people and trapping a family of 10 in the ruins of their home, activists in the city said.

"There are families buried under the rubble," said an activist called Baraa al-Youssef, speaking by Skype after visiting the scene in his Ard al-Hamra neighborhood.

"Nothing can describe it, it's a horrible sight."

Video footage posted by several activists showed a burning building and people carrying the wounded to cars to be ferried to hospital. It was hard to gauge the scale of the damage in the night-time footage but rubble was clearly visible on the ground.

Rami Abdulrahman of the British-based Syrian Observatory for Human Rights said three explosions shook Aleppo and reported at least 29 people had been killed. Another 150 were wounded, he said, and the final death toll was likely to be higher.

Youssef said 30 houses were destroyed by a single rocket.

On Tuesday activists said at least 20 people were killed when a large missile of the same type as Russian-made Scuds hit the rebel-held district of Jabal Badro.

(Reporting by Mariam Karouny and Dominic Evans; Editing by Stephen Powell)

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French, Malian forces fight Islamist rebels in Gao

GAO, Mali (Reuters) - French and Malian troops fought Islamists on the streets of Gao and a car bomb exploded in Kidal on Thursday, as fighting showed little sign of abating weeks before France plans to start withdrawing some forces.

Reuters reporters in Gao in the country's desert north said French and Malian forces fired at the mayor's office with heavy machineguns after Islamists were reported to have infiltrated the Niger River town during a night of explosions and gunfire.

French Defense Minister Jean-Yves Le Drian told a news conference in Brussels that Gao was back under control after clashes earlier in the day.

"Malian troops supported by French soldiers killed five jihadists and the situation is back to normal," he said.

In Kidal, a remote far north town where the French are hunting Islamists, residents said a car bomb killed two. A French defense ministry source reported no French casualties.

French troops dispatched to root out rebels with links to al Qaeda swiftly retook northern towns last month. But they now risk being bogged down in a guerrilla conflict as they try to help Mali's weak army counter bombings and raids.

"There was an infiltration by Islamists overnight and there is shooting all over the place," Sadou Harouna Diallo, Gao's mayor, told Reuters by telephone earlier in the day, saying he was not in his office at the time.

Gao is a French hub for operations in the Kidal region, about 300 km (190 miles) northeast, where many Islamist leaders are thought to have retreated and foreign hostages may be held.

"They are black and two were disguised as women," a Malian soldier in Gao who gave his name only as Sergeant Assak told Reuters during a pause in heavy gunfire around Independence Square.

Six Malian military pickups were deployed in the square and opened fire on the mayor's office with the heavy machineguns. Two injured soldiers were taken away in an ambulance.

French troops in armored vehicles later joined the battle as it spilled out into the warren of sandy streets, where, two weeks ago, they also fought for hours against Islamists who had infiltrated the town via the nearby river.

Helicopters clattered over the mayor's office, while a nearby local government office and petrol station was on fire.

A Gao resident said he heard an explosion and then saw a Malian military vehicle on fire in a nearby street.

Paris has said it plans to start withdrawing some of its 4,000 troops from Mali next month. But rebels have fought back against Mali's weak and divided army, and African forces due to take over the French role are not yet in place.

Islamists abandoned the main towns they held but French and Malian forces have said there are pockets of Islamist resistance across the north, which is about the size of France.

CAR BOMB

Residents reported a bomb in the east of Kidal on Thursday.

"It was a car bomb that exploded in a garage," said one resident who went to the scene but asked not to be named.

"The driver and another man were killed. Two other people were injured," he added.

A French defense ministry official confirmed there had been a car bomb but said it did not appear that French troops, based at the town's airport, had been targeted.

Earlier this week, a French soldier was killed in heavy fighting north of Kidal, where French and Chadian troops are hunting Islamists in the Adrar des Ifoghas mountains, which border Algeria.

Operations there are further complicated by the presence of separatist Tuareg rebels, whose rebellion triggered the fighting in northern Mali last year but were sidelined by the better-armed Islamists.

Having dispatched its forces to prevent an Islamist advance south in January, Paris is eager not to become bogged down in a long-term conflict in Mali. But their Malian and African allies have urged French troops not to pull out too soon.

(Additional reporting by Emanuel Braun in Gao, Adama Diarra in Bamako, David Lewis and John Irish in Dakar and Adrian Croft in Brussels; Writing by David Lewis; Editing by Jason Webb and Roger Atwood)

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Syria "Scud-type" missile said to kill 20 in Aleppo

AMMAN (Reuters) - A Syrian missile killed at least 20 people in a rebel-held district of Aleppo on Tuesday, opposition activists said, as the army turns to longer-range weapons after losing bases in the country's second-largest city.

The use of what opposition activists said was a large missile of the same type as Russian-made Scuds against an Aleppo residential district came after rebels overran army bases over the past two months from which troops had fired artillery.

As the uprising against President Bashar al-Assad, now a civil war, nears its two-year mark, rebels also landed three mortar bombs in the rarely-used presidential palace compound in the capital Damascus, opposition activists said on Tuesday.

The United Nations estimates 70,000 people have been killed in the conflict between largely Sunni Muslim rebels and Assad's supporters among his minority Alawite sect. An international diplomatic deadlock has prevented intervention, as the war worsens sectarian tensions throughout the Middle East.

A Russian official said on Tuesday that Moscow, which is a long-time ally of Damascus, would not immediately back U.N. investigators' calls for some Syrian leaders to face the International Criminal Court for war crimes.

Moscow has blocked three U.N. Security Council resolutions that would have increased pressure on Assad.

Casualties are not only being caused directly by fighting, but also by disruption to infrastructure and Syria's economy.

An estimated 2,500 people in a rebel-held area of northeastern Deir al-Zor province have been infected with typhoid, which causes diarrhea and can be fatal, due to drinking contaminated water from the Euphrates River, the World Health Organization (WHO) said on Tuesday.

"There is not enough fuel or electricity to run the pumps so people drink water from the Euphrates which is contaminated, probably with sewage," the WHO representative in Syria, Elisabeth Hoff, told Reuters by telephone.

The WHO had no confirmed reports of deaths so far.

BURIED UNDER RUBBLE

In northern Aleppo, opposition activists said 25 people were missing under rubble of three buildings hit by a several-meter-long missile. They said remains of the weapon showed it to be a Scud-type missile of the type government forces increasingly use in Aleppo and in Deir a-Zor.

NATO said in December Assad's forces fired Scud-type missiles. It did not specify where they landed but said their deployment was an act of desperation.

Bodies were being gradually dug up, Mohammad Nour, an activist, said by phone from Aleppo.

"Some, including children, have died in hospitals," he said.

Video footage showed dozens of people scouring for victims and inspecting damage. A body was pulled from under collapsed concrete. At a nearby hospital, a baby said to have been dug out from wreckage was shown dying in the hands of doctors.

Reuters could not independently verify the reports.

Opposition activists also reported fighting near the town of Nabak on the Damascus-Homs highway, another route vital for supplying forces in the capital loyal to Assad, whose family has ruled Syria since the 1960s.

Rebels moved anti-aircraft guns into the eastern Damascus district of Jobar, adjacent to the city centre, as they seek to secure recent gains, an activist said.

"The rebels moved truck-mounted anti-aircraft guns to Jobar and are now firing at warplanes rocketing the district," said Damascus activist Moaz al-Shami.

Russian Deputy Foreign Minister Gennady Gatilov told a news conference a U.N. war crimes report, which accuses military leaders and rebels of terrorizing civilians, was "not the path we should follow ... at this stage it would be untimely and unconstructive."

Syria is not party to the Rome Statute that established the ICC and the only way the court can investigate the situation is if it receives a referral from the Security Council, where Moscow is a permanent member.

(Writing by Oliver Holmes; Editing by Jason Webb)

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Time to refer Syrian war crimes to ICC: U.N. inquiry

GENEVA (Reuters) - United Nations investigators said on Monday that Syrian leaders they had identified as suspected war criminals should face the International Criminal Court (ICC).

The investigators urged the U.N. Security Council to "act urgently to ensure accountability" for violations, including murder and torture, committed by both sides in an uprising and civil war that has killed about 70,000 people since March 2011.

"Now really it's time ... We have a permanent court, the International Criminal Court, who would be ready to take this case," Carla del Ponte, a former ICC chief prosecutor who joined the U.N. team in September, told a news briefing in Geneva.

But because Syria is not party to the Rome Statute that established the ICC, the only way the court can investigate the situation is if it receives a referral from the Security Council. Russia, Assad's long-standing ally and a permanent veto-wielding member of the council, has opposed such a move.

"We cannot decide. But we pressure the international community to decide because it's time to act," del Ponte said.

Brazilian expert Paulo Pinheiro, who leads the U.N. inquiry set up in 2011, said: "We are in very close dialogue with all the five permanent members and with all the members of the Security Council, but we don't have the key that will open the path to cooperation inside the Security Council."

His team of some two dozen experts is tracing the chain of command in Syria to establish criminal responsibility and build a case for eventual prosecution.

"Of course we were able to identify high-level perpetrators," del Ponte said, adding that these were people "in command responsibility...deciding, organizing, planning and aiding and abetting the commission of crimes".

She said it was urgent for the Hague-based war crimes tribunal to take up cases of "very high officials", but did not identify them, in line with the inquiry's practice.

"We have crimes committed against children, rape and sexual violence. We have grave concerns. That is also one reason why an international body of justice must act because it is terrible."

Del Ponte, who tried former Yugoslav President Slobodan Milosevic at the International Criminal Tribunal for the Former Yugoslavia on war crimes charges, said the ICC prosecutor would need to deepen the investigation on Syria before an indictment could be prepared.

Karen Koning AbuZayd, an American member of the U.N. team, told Reuters it had information pointing to "people who have given instructions and are responsible for government policy, people who are in the leadership of the military, for example".

The inquiry's third roster of suspects, building on lists drawn up in the past year, remains secret. It will be entrusted to U.N. High Commissioner for Human Rights Navi Pillay upon expiry of its mandate at the end of March, the report said.

Pillay, a former ICC judge, said on Saturday Assad should be investigated for war crimes, and called for outside action on Syria, including possible military intervention.

Pinheiro said the investigators would not speak publicly about "numbers, names or levels" of suspects.

SEVEN MASSACRES IDENTIFIED

The investigators' latest report, covering the six months to mid-January, was based on 445 interviews conducted abroad with victims and witnesses, as they have not been allowed into Syria.

"We identified seven massacres during the period, five on the government side, two on the armed opponents' side. We need to enter the sites to be able to confirm elements of proof that we have," del Ponte said.

The U.N. report said the ICC was the appropriate institution for the fight against impunity in Syria. "As an established, broadly supported structure, it could immediately initiate investigations against authors of serious crimes in Syria."

Government forces have carried out shelling and air strikes across Syria including Aleppo, Damascus, Deraa, Homs and Idlib, the 131-page report said, citing corroborating satellite images.

"Government forces and affiliated militias have committed extra-judicial executions, breaching international human rights law. This conduct also constitutes the war crime of murder. Where murder was committed as part of a widespread or systematic attack against a civilian population, with knowledge of that attack, it is a crime against humanity," the report said.

Those forces have targeted bakery queues and funeral processions to spread "terror among the civilian population".

Rebels fighting to topple Assad have also committed war crimes including murder, torture, hostage-taking and using children under age 15 in hostilities, the U.N. report said.

"They continue to endanger the civilian population by positioning military objectives inside civilian areas" and rebel snipers had caused "considerable civilian casualties", it said.

George Sabra, a vice president of the opposition Syrian National Coalition, asked about the U.N. report, told Reuters at a conference in Stockholm: "We condemn all kind of crimes, regardless who did it.

"We can't ignore that some mistakes have been made and maybe still happen right now. But nobody also can ignore that the most criminal file is that of the regime."

(This story has been corrected to fix name of Milosevic tribunal in 11th paragraph)

(Reporting by Stephanie Nebehay; additional reporting by Anna Ringstrom in Stockholm; Editing by Mark Heinrich)

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Pope, near abdication, says pray "for me and next pope"

VATICAN CITY (Reuters) - Pope Benedict asked the faithful to pray for him and for the next pope, in his penultimate Sunday address to a crowded St. Peter's Square before becoming the first pontiff in centuries to resign.

The crowd chanted "Long live the pope!," waved banners and broke into sustained applause as he spoke from his window. The 85-year-old Benedict, who will abdicate on February 28, thanked them in several languages.

Speaking in Spanish, he told the crowd which the Vatican said numbered more than 50,000: "I beg you to continue praying for me and for the next pope".

It was not clear why the pope chose Spanish to make the only specific reference to his upcoming resignation in his Sunday address.

A number of cardinals have said they would be open to the possibility of a pope from the developing world, be it Latin America, Africa or Asia, as opposed to another from Europe, where the Church is crisis and polarized.

"I can imagine taking a step towards a black pope, an African pope or a Latin American pope," Cardinal Kurt Koch, a Swiss Vatican official who will enter the conclave to choose the next pope, told Reuters in an interview.

After his address, the pope retired into the Vatican's Apostolic Palace for a scheduled, week-long spiritual retreat and will not make any more public appearances until next Sunday.

Speaking in Italian in part of his address about Lent, the period when Christians reflect on their failings and seek guidance in prayer, the pope spoke of the difficulty of making important decisions.

"In decisive moments of life, or, on closer inspection, at every moment in life, we are at a crossroads: do we want to follow the ‘I', or God? The individual interest, or the real good, that which is really good?" he said.

FOR THE GOOD OF THE CHURCH

The pope has said his physical and spiritual forces are no longer strong enough to sustain him in the job of leading the world's 1.2 billion Roman Catholics at a time of crisis for the Church in a fast-changing world.

Benedict's papacy was rocked by crises over the sex abuse of children by priests in Europe and the United States, most of which preceded his time in office but came to light during it.

His reign also saw Muslim anger after he compared Islam to violence. Jews were upset over his rehabilitation of a Holocaust denier. During a scandal over the Church's business dealings, his butler was convicted of leaking his private papers.

Since his shock announcement last Monday, the pope has said several times that he made the difficult decision to become the first pope in more than six centuries to resign for the good of the Church. Aides said he was at peace with himself.

"In a funny way he is even more peaceful now with this decision, unlike the rest of us, he is not somebody who gets choked up really easily," said Greg Burke, a senior media advisor to the Vatican.

"I think that has a lot to do with his spiritual life and who he is and the fact he is such a prayerful man," Burke told Reuters Television.

People in the crowd said the pope was a shadow of the man he was when elected on April 19, 2005.

"Like always, recently, he seemed tired, moved, perplexed, uncertain and insecure," said Stefan Malabar, an Italian in St. Peter's Square.

"It's something that really has an effect on you because the pope should be a strong and authoritative figure but instead he seems very weak, and that really struck me," he said.

The Vatican has said the conclave to choose his successor could start earlier than originally expected, giving the Roman Catholic Church a new leader by mid-March.

Some 117 cardinals under the age of 80 will be eligible to enter the secretive conclave which, according to Church rules, has to start between 15 and 20 days after the papacy becomes vacant, which it will on February 28.

But since the Church is now dealing with an announced resignation and not a sudden death, Vatican spokesman Federico Lombardi said the Vatican would be "interpreting" the law to see if it could start earlier.

CONSULTATIONS BEGUN

Cardinals around the world have already begun informal consultations by phone and email to construct a profile of the man they think would be best suited to lead the Church in a period of continuing crisis.

The Vatican appears to be aiming to have a new pope elected and then formally installed before Palm Sunday on March 24 so he can preside at Holy Week services leading to Easter.

New details emerged at the weekend about Benedict's health.

Peter Seewald, a German journalist who wrote a book with the pope in 2010 in which Benedict first floated the possibility of resigning, visited him again about 10 weeks ago.

"His hearing had deteriorated. He couldn't see with his left eye. His body had become so thin that the tailors had difficulty in keeping up with newly fitted clothes ... I'd never seen him so exhausted-looking, so worn down," Seewald said.

The pope will say one more Sunday noon prayer on February 24 and hold a final general audience on February 27.

The next day he will take a helicopter to the papal summer retreat at Castel Gandolfo, south of Rome, where he will stay for around two months before moving to a convent inside the Vatican where he will live out his remaining years.

(Additional reporting by Hanna Rantala; Editing by Robin Pomeroy)

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Bomb kills 64 in Pakistan's Quetta

QUETTA, Pakistan (Reuters) - Sixty-four people including school children died on Saturday in a bomb attack carried out by extremists from Pakistan's Sunni Muslim majority, police said.

A spokesman for Lashkar-e-Jhangvi, a Sunni group, claimed responsibility for the bomb in Quetta, which caused casualties in the town's main bazaar, a school and a computer center. Police said most of the victims were Shi'ites.

Burned school bags and books were strewn around.

"The explosion was caused by an improvised explosive device fitted to a motorcycle," said Wazir Khan Nasir, deputy inspector general of police in Quetta.

"This is a continuation of terrorism against Shi'ites."

"I saw many bodies of women and children," said an eyewitness at a hospital. "At least a dozen people were burned to death by the blast."

Most Western intelligence agencies have regarded the Pakistani Taliban and al Qaeda as the gravest threat to nuclear-armed Pakistan, a strategic U.S. ally.

But Pakistani law enforcement officials say Lashkar-e-Jhangvi has become a formidable force.

TENSIONS

Last month the group said it carried out a bombing in Quetta that killed nearly 100 people, one of Pakistan's worst sectarian attacks. Thousands of Shi'ites protested in several cities after that attack.

Pakistani intelligence officials say extremist groups, led by Lashkar-e-Jhangvi, have escalated their bombings and shootings of Shi'ites to trigger violence that would pave the way for a Sunni theocracy in U.S.-allied Pakistan.

More than 400 Shi'ites were killed in Pakistan last year, many by hitmen or bombs, and the perpetrators are almost never caught. Some hardline Shi'ite groups have hit back by killing Sunni clerics.

The growing sectarian violence has hurt the credibility of the government, which has already faced criticism ahead of elections due in May for its inability to tackle corruption and economic stagnation.

The schism between Sunnis and Shi'ites developed after the Prophet Muhammad died in 632 when his followers could not agree on a successor.

Emotions over the issue are highly potent even today, pushing some countries, including Iraq five years ago, to the brink of civil war.

Pakistan is nowhere near that stage but officials worry that Sunni extremist groups have succeeded in dramatically ratcheting up tensions and provoking revenge attacks in their bid to destabilize the country.

(Reporting by Jibran Ahmed; Writing by Michael Georgy; Editing by Stephen Powell)

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Exclusive: North Korea tells China of preparations for fresh nuclear test - source

BEIJING (Reuters) - North Korea has told its key ally, China, that it is prepared to stage one or even two more nuclear tests this year in an effort to force the United States into diplomatic talks, said a source with direct knowledge of the message.

Further tests could also be accompanied this year by another rocket launch, said the source, who has direct access to the top levels of government in both Beijing and Pyongyang.

North Korea conducted its third nuclear test on Tuesday, drawing global condemnation and a stern warning from the United States that it was a threat and a provocation.

"It's all ready. A fourth and fifth nuclear test and a rocket launch could be conducted soon, possibly this year," the source said, adding that the fourth nuclear test would be much larger than the third, at an equivalent of 10 kilotons of TNT.

The tests will be undertaken, the source said, unless Washington holds talks with North Korea and abandons its policy of what Pyongyang sees as attempts at regime change.

North Korea also reiterated its long-standing desire for the United States to sign a final peace agreement with it and establish diplomatic relations, he said. North Korea remains technically at war with both the United States and South Korea after the Korean war ended in 1953 with a truce.

In Washington, U.S. State Department spokeswoman Victoria Nuland urged North Korea to "refrain from additional provocative actions that would violate its international obligations" under three different sets of U.N. Security Council resolutions that prohibit nuclear and missile tests.

North Korea "is not going to achieve anything in terms of the health, welfare, safety, future of its own people by these kinds of continued provocative actions. It's just going to lead to more isolation," Nuland told reporters.

The Pentagon also weighed in, calling North Korea's missile and nuclear programs "a threat to U.S. national security and to international peace and security."

"The United States remains vigilant in the face of North Korean provocations and steadfast in our defense commitments to allies in the region," said Pentagon spokeswoman Major Catherine Wilkinson.

Initial estimates of this week's test from South Korea's military put its yield at the equivalent of 6-7 kilotons, although a final assessment of yield and what material was used in the explosion may be weeks away.

North Korea's latest test, its third since 2006, prompted warnings from Washington and others that more sanctions would be imposed on the isolated state. The U.N. Security Council has only just tightened sanctions on Pyongyang after it launched a long-range rocket in December.

Pyongyang is banned under U.N. sanctions from developing missile or nuclear technology after its 2006 and 2009 nuclear tests.

North Korea worked to ready its nuclear test site, about 100 km (60 miles) from its border with China, throughout last year, according to commercially available satellite imagery. The images show that it may have already prepared for at least one more test, beyond Tuesday's subterranean explosion.

"Based on satellite imagery that showed there were the same activities in two tunnels, they have one tunnel left after the latest test," said Kune Y. Suh, a nuclear engineering professor at Seoul National University in South Korea.

Analysis of satellite imagery released on Friday by specialist North Korea website 38North showed activity at a rocket site that appeared to indicate it was being prepared for a launch (http://38north.org/2013/02/tonghae021413/).

NORTH 'NOT AFRAID' OF SANCTIONS

President Barack Obama pledged after this week's nuclear test "to lead the world in taking firm action in response to these threats" and diplomats at the U.N. Security Council have already started discussing potential new sanctions.

North Korea has said the test was a reaction to "U.S. hostility" following its December rocket launch. Critics say the rocket launch was aimed at developing technology for an intercontinental ballistic missile.

"(North) Korea is not afraid of (further) sanctions," the source said. "It is confident agricultural and economic reforms will boost grain harvests this year, reducing its food reliance on China."

North Korea's isolated and small economy has few links with the outside world apart from China, its major trading partner and sole influential diplomatic ally.

China signed up for international sanctions against North Korea after the 2006 and 2009 nuclear tests and for a U.N. Security Council resolution passed in January to condemn the latest rocket launch. However, Beijing has stopped short of abandoning all support for Pyongyang.

Sanctions have so far not discouraged North Korea from pursuing its nuclear ambitions.

"It is like watching the same movie over and over again," said Lee Woo-young, a professor at Seoul's University of North Korean Studies. "The idea that stronger sanctions make North Korea stop developing nuclear programs isn't effective in my view."

The source with ties to Beijing and Pyongyang said China would again support U.N. sanctions. He declined to comment on what level of sanctions Beijing would be willing to endorse.

"When China supported U.N. sanctions ... (North) Korea angrily called China a puppet of the United States," he said. "There will be new sanctions which will be harsh. China is likely to agree to it," he said, without elaborating.

He said however that Beijing would not cut food and fuel supplies to North Korea, a measure it reportedly took after a previous nuclear test.

He said North Korea's actions were a distraction for China's leadership, which was concerned that the escalations could inflame public opinion in China and hasten military build-ups in the region.

The source said he saw little room for compromise under North Korea's youthful new leader, Kim Jong-un. The third Kim to rule North Korea is just 30 years old and took over from his father in December 2011.

He appears to have followed his father, Kim Jong-il, in the "military first" strategy that has pushed North Korea ever closer to a workable nuclear missile at the expense of economic development.

"He is much tougher than his father," the source said.

(Additional reporting by Arshad Mohammed and Phillip Stewart in WASHINGTON; Writing by David Chance; Editing by Raju Gopalakrishnan, David Brunnstrom and Jackie Frank)

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Key U.S. general backs keeping Afghan forces at peak strength

WASHINGTON (Reuters) - The U.S. general nominated to oversee a vast region that includes Afghanistan on Thursday backed keeping Afghan forces at a peak strength of 352,000, contrary to current plans to shrink them after NATO declares the war over next year.

General Lloyd Austin, nominated to lead the U.S. military's Central Command, said at his Senate confirmation hearing that a more robust Afghan force, while more costly, would "hedge against any Taliban mischief" following America's longest war.

"Keeping the larger-size force would certainly reassure the Afghans, it would also reassure our NATO allies that we remain committed," Austin said.

The comments came two days after President Barack Obama announced in his State of the Union address that 34,000 U.S. troops - roughly half of the current U.S. force in Afghanistan - would be withdrawn by early 2014.

Obama reassured Americans that the costly, unpopular war was coming to an end, but he left unanswered bigger questions about America's exit strategy, including how many U.S. troops would stay in the country beyond 2014 to help train and advise the Afghans and to battle remnants of al Qaeda.

Obama also did not discuss the future size of the Afghan forces, although a White House fact sheet sent out after his address noted they would remain at 352,000 until "at least" early 2015.

Austin warned the Taliban would be waiting to test them.

"You could reasonably expect that an enemy that's been that determined, that agile, will very soon after we transition begin to try to test the Afghan security forces," Austin said.

Under current plans, the United States and its NATO allies will help build up the Afghan armed forces to 352,000 personnel, a number they are approaching, but the size of the force - which the allies will continue to fund - will be trimmed to 230,000 after 2015.

ECHOES OF IRAQ

The hearing frequently moved away from questions about the Afghan war and other current events to questions about Austin's past role as commander in Iraq, when a failure to strike an immunity deal for U.S. troops led to their total withdrawal in 2011.

Obama administration officials have warned that failure to strike an immunity deal with Afghanistan would also result in a pullout, but Afghan President Hamid Karzai and U.S. officials have expressed confidence a deal can be reached.

Republicans, who have criticized Obama's drawdown strategy in Afghanistan, noted that the president would have left a much smaller force in Iraq than Austin recommended, even if a deal had been struck.

Senator John McCain of Arizona lamented the lack of a U.S. presence in Iraq.

Pressed by Republicans, Austin acknowledged that the situation in Iraq was trending in a "problematic" direction, and agreed that a continued U.S. role would have helped bolster Iraqi forces.

When it came to Afghanistan, Senator Lindsay Graham of South Carolina warned Austin that if Obama sought an insufficient force for the post-2014 mission, he would refuse to vote for funding the war effort.

"It can be as low as 9 or 10,000, that I will stand with them," Graham said.

"If they overrule the commanders and create a force that cannot in my view be successful, I cannot in good conscience vote to continue this operation."

Graham said he would vote for Austin's confirmation once Austin spoke with the former commander of the Afghan mission, General John Allen, about his recommendations to Obama and reported back to the committee about his opinion.

(Reporting by Phil Stewart; Editing by David Brunnstrom)

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North Korean nuclear test draws anger, including from China

SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of U.N. resolutions, drawing condemnation from around the world, including from its only major ally, China, which summoned the North Korean ambassador to protest.

Pyongyang said the test was an act of self-defense against "U.S. hostility" and threatened stronger steps if necessary.

The test puts pressure on U.S. President Barack Obama on the day of his State of the Union speech and also puts China in a tight spot, since it comes in defiance of Beijing's admonishments to North Korea to avoid escalating tensions.

The U.N. Security Council held an emergency meeting at which its members, including China, "strongly condemned" the test and vowed to start work on appropriate measures in response, the president of the council said.

North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.

North Korea said the test had "greater explosive force" than those it conducted in 2006 and 2009. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating it had again used plutonium, which is suitable for use as a missile warhead.

China, which has shown signs of increasing exasperation with the recent bellicose tone of its reclusive neighbor, summoned the North Korean ambassador in Beijing and protested sternly, the Foreign Ministry said.

Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".

Analysts said the test was a major embarrassment to China, which is a permanent member of the Security Council and North Korea's sole major economic and diplomatic ally.

Obama called the test a "highly provocative act" that hurt regional stability.

"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said.

U.S. Ambassador to the United Nations Susan Rice said Washington and its allies intended to "augment the sanctions regime" already in place due to Pyongyang's previous atomic tests. North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.

Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated.

Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms program and return to talks. NATO condemned the test as an "irresponsible act."

South Korea, still technically at war with North Korea after a 1950-53 civil war ended in a mere truce, also denounced the test. Obama spoke to South Korean President Lee Myung-bak on Tuesday and told him the United States "remains steadfast in its defense commitments" to Korea, the White House said.

MAXIMUM RESTRAINT

North Korea's Foreign Ministry said the test was "only the first response we took with maximum restraint".

"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps," it said in a statement carried by the official KCNA news agency.

North Korea - which gave the U.S. State Department advance warning of the test - often threatens the United States and its "puppet", South Korea, with destruction in colorful terms.

North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear program and that prospects were "gloomy" for the denuclearization of the divided Korean peninsula because of a "hostile" U.S. policy.

Suzanne DiMaggio, an analyst at the Asia Society in New York, said North Korea had embarrassed China with the test. "China's inability to dissuade North Korea from carrying through with this third nuclear test reveals Beijing's limited influence over Pyongyang's actions in unusually stark terms," she said.

Mark Fitzpatrick of the International Institute for Strategic Studies think tank, said: "The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions."

The magnitude of the explosion was roughly twice that of the 2009 test, according to the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization. The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred.

U.S. intelligence agencies were analyzing the event and found that North Korea probably conducted an underground nuclear explosion with a yield of "approximately several kilotons", the Office of the Director of National Intelligence said.

Nuclear experts have described Pyongyang's previous two tests as puny by international standards. The yield of the 2006 test has been estimated at less than 1 kiloton (1,000 tons of TNT equivalent) and the second at some 2-7 kilotons, compared with 20 kilotons for a Nagasaki-type bomb.

Initial indications are that the test involved the latest version of a plutonium-based prototype weapon, according to one current and one former U.S. national security official. Both previous tests involved plutonium. If it turns out the test was of a new uranium-based weapon, it would show that North Korea has made more progress on uranium enrichment than previously thought.

The United States uses WC-135 Constant Phoenix "sniffer" aircraft to collect samples to identify nuclear explosions. These would need to be deployed quickly to detect whether highly enriched uranium rather than plutonium was used because uranium decays to undetectable levels within a matter of days. Plutonium takes much longer to decay.

North Korea trumpeted news of the test on its state television channel to patriotic music against a backdrop of its national flag.

"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.

North Korea linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.

The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed at putting satellites in space.

Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.

It used plutonium in previous nuclear tests and before Tuesday there had been speculation that it would use highly enriched uranium so as to conserve its plutonium stocks, as testing eats into its limited supply of materials to construct a nuclear bomb.

"VICIOUS CYCLE"

When Kim Jong-un, who is 30, took power after his father's death in December 2011, there were hopes that he would bring reforms and end Kim Jong-il's "military first" policies.

Instead, North Korea, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.

"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."

Options for the international community appear to be in short supply. Diplomats at the United Nations said negotiations on new sanctions could take weeks since China is likely to resist tough new measures for fear they could lead to further retaliation by the North Korean leadership.

Beijing has also been concerned that tougher sanctions could further weaken North Korea's economy and prompt a flood of refugees into China.

Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieve maximum international attention.

Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. The U.S. president will likely have to tweak his State of the Union address due to be given on Tuesday.

Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, is preparing to take office on February 25.

China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.

The longer-term game plan from Pyongyang may be to restart international talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear program, hosted by China and including the two Koreas, the United States, Japan and Russia.

Its puny economy and small diplomatic reach mean that North Korea struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, the last of which was made in 2010.

"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," predicted Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.

(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau and Michelle Nichols at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Mark Hosenball, Paul Eckert, Roberta Rampton, Tabassum Zakaria and Jeff Mason in WASHINGTON; Editing by Nick Macfie, Claudia Parsons and David Brunnstrom)

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Pope's sudden resignation sends shockwaves through Church

VATICAN CITY (Reuters) - Pope Benedict stunned the Roman Catholic Church on Monday when he announced he would stand down, the first pope to do so in 700 years, saying he no longer had the mental and physical strength to carry on.

Church officials tried to relay a climate of calm confidence in the running of a 2,000-year-old institution, but the decision could lead to uncertainty in a Church already besieged by scandal for covering up sexual abuse of children by priests.

The soft-spoken German, who always maintained that he never wanted to be pope, was an uncompromising conservative on social and theological issues, fighting what he regarded as the increasing secularization of society.

It remains to be seen whether his successor will continue such battles or do more to bend with the times.

Despite his firm opposition to tolerance of homosexual acts, his eight year reign saw gay marriage accepted in many countries. He has staunchly resisted allowing women to be ordained as priests, and opposed embryonic stem cell research, although he retreated slightly from the position that condoms could never be used to fight AIDS.

He repeatedly apologized for the Church's failure to root out child abuse by priests, but critics said he did too little and the efforts failed to stop a rapid decline in Church attendance in the West, especially in his native Europe.

In addition to child sexual abuse crises, his papacy saw the Church rocked by Muslim anger after he compared Islam to violence. Jews were upset over rehabilitation of a Holocaust denier. During a scandal over the Church's business dealings, his butler was accused of leaking his private papers.

In an announcement read to cardinals in Latin, the universal language of the Church, the 85-year-old said: "Well aware of the seriousness of this act, with full freedom I declare that I renounce the ministry of Bishop of Rome, Successor of St Peter ...

"As from 28 February 2013, at 20:00 hours (1900 GMT) the See of Rome, the See of St. Peter will be vacant and a conclave to elect the new Supreme Pontiff will have to be convoked by those whose competence it is."

POPE DOESN'T FEAR SCHISM

Benedict is expected to go into isolation for at least a while after his resignation. Vatican spokesman Father Federico Lombardi said Benedict did not intend to influence the decision of the cardinals in a secret conclave to elect a successor.

A new leader of the world's 1.2 billion Roman Catholics could be elected as soon as Palm Sunday, on March 24, and be ready to take over by Easter a week later, Lombardi said.

Several popes in the past, including Benedict's predecessor John Paul, have refrained from stepping down over their health, because of the division that could be caused by having an "ex-pope" and a reigning pope alive at the same time.

Lombardi said the pope did not fear a possible "schism", with Catholics owing allegiances to a past and present pope in case of differences on Church teachings.

He indicated the complex machinery of the process to elect a new pope would move quickly because the Vatican would not have to wait until after the elaborate funeral services for a pope.

It is not clear if Benedict will have a public life after he resigns. Lombardi said Benedict would first go to the papal summer residence south of Rome and then move into a cloistered convent inside the Vatican walls.

The resignation means that cardinals from around the world will begin arriving in Rome in March and after preliminary meetings, lock themselves in a secret conclave and elect the new pope from among themselves in votes in the Sistine Chapel.

There has been growing pressure on the Church for it to choose a pope from the developing world to better reflect where most Catholics live and where the Church is growing.

"It could be time for a black pope, or a yellow one, or a red one, or a Latin American," said Guatemala's Archbishop Oscar Julio Vian Morales.

The cardinals may also want a younger man. John Paul was 58 when he was elected in 1978. Benedict was 20 years older.

"We have had two intellectuals in a row, two academics, perhaps it is time for a diplomat," said Father Tom Reese, senior fellow at the Woodstock Theological Center at Georgetown University. "Rather than electing the smartest man in the room, they should elect the man who will listen to all the other smart people in the Church."

Liberals have already begun calling for a pope that would be more open to reform.

"The current system remains an 'old boy's club' and does not allow for women's voices to participate in the decision of the next leader of our Church," said the Women's Ordination Conference, a group that wants women to be able to be priests.

"GREAT COURAGE"

The last pope to resign willingly was Celestine V in 1294 after reigning for only five months, his resignation was known as "the great refusal" and was condemned by the poet Dante in the "Divine Comedy". Gregory XII reluctantly abdicated in 1415 to end a dispute with a rival claimant to the papacy.

Lombardi said Benedict's stepping aside showed "great courage". He ruled out any specific illness or depression and said the decision was made in the last few months "without outside pressure". But the decision was not without controversy.

"This is disconcerting, he is leaving his flock," said Alessandra Mussolini, a parliamentarian who is granddaughter of Italy's wartime dictator. "The pope is not any man. He is the vicar of Christ. He should stay on to the end, go ahead and bear his cross to the end. This is a huge sign of world destabilization that will weaken the Church."

Cardinal Stanislaw Dziwisz, secretary to the late Pope John Paul, said the former pope had stayed on despite failing health for the last decade of his life as he believed "you cannot come down from the cross."

While the pope had slowed down recently - he started using a cane and a wheeled platform to take him up the long aisle in St Peter's Square - he had given no hint recently that he was considering such a dramatic decision.

Elected in 2005 to succeed the enormously popular John Paul, Benedict never appeared to feel comfortable in the job.

"MIND AND BODY"

In his announcement, the pope told the cardinals that in order to govern "... both strength of mind and body are necessary, strength which in the last few months, has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me."

Before he was elected pope, the former Cardinal Joseph Ratzinger was known as "God's rottweiler" for his stern stand on theological issues. After a few months, he showed a milder side but he never drew the kind of adulation that had marked the 27-year papacy of his predecessor John Paul.

U.S. President Barack Obama extended prayers to Benedict and best wishes to those who would choose his successor.

German Chancellor Angela Merkel said the pope's decision must be respected if he feels he is too weak to carry out his duties. British Prime Minister David Cameron said: "He will be missed as a spiritual leader to millions."

The Archbishop of Canterbury, leader of the worldwide Anglican communion, said he had learned of the pope's decision with a heavy heart but complete understanding.

CHEERS AND SCANDAL

Elected to the papacy on April 19, 2005, Benedict ruled over a slower-paced, more cerebral and less impulsive Vatican.

But while conservatives cheered him for trying to reaffirm traditional Catholic identity, his critics accused him of turning back the clock on reforms by nearly half a century and hurting dialogue with Muslims, Jews and other Christians.

After appearing uncomfortable in the limelight at the start, he began feeling at home with his new job and showed that he intended to be pope in his way.

Despite great reverence for his charismatic, globe-trotting predecessor -- whom he put on the fast track to sainthood and whom he beatified in 2011 -- aides said he was determined not to change his quiet manner to imitate John Paul's style.

A quiet, professorial type who relaxed by playing the piano, he showed the gentle side of a man who was the Vatican's chief doctrinal enforcer for nearly a quarter of a century.

The first German pope for some 1,000 years and the second non-Italian in a row, he traveled regularly, making about four foreign trips a year, but never managed to draw the oceanic crowds of his predecessor.

The child abuse scandals hounded most of his papacy. He ordered an official inquiry into abuse in Ireland, which led to the resignation of several bishops.

Scandal from a source much closer to home hit in 2012 when the pontiff's butler, responsible for dressing him and bringing him meals, was found to be the source of leaked documents alleging corruption in the Vatican's business dealings.

Benedict confronted his own country's past when he visited the Nazi death camp at Auschwitz. Calling himself "a son of Germany", he prayed and asked why God was silent when 1.5 million victims, most of them Jews, were killed there.

Ratzinger served in the Hitler Youth during World War Two when membership was compulsory. He was never a member of the Nazi party and his family opposed Adolf Hitler's regime.

(Additional reporting by James Mackenzie, Barry Moody, Cristiano Corvino, Alexandra Hudson in Berlin, and Dagamara Leszkowixa in Poland; Editing by Peter Graff)

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Gunbattle rocks Gao after rebels surprise French, Malians

GAO, Mali (Reuters) - Islamist insurgents launched a surprise raid in the heart of the Malian town of Gao on Sunday, battling French and local troops in a blow to efforts to secure Mali's recaptured north.

Local residents hid in their homes or crouched behind walls as the crackle of gunfire from running street battles resounded through the sandy streets and mud-brick houses of the ancient Niger River town, retaken from Islamist rebels last month by a French-led offensive.

French helicopters clattered overhead and fired on al Qaeda-allied rebels armed with AK-47s and rocket-propelled grenades who had infiltrated the central market area and holed up in a police station, Malian and French officers said.

The fighting inside Gao was certain to raise fears that pockets of determined Islamists who have escaped the lightning four-week-old French intervention in Mali will strike back with guerrilla attacks and suicide bombings.

After driving the bulk of the insurgents from major northern towns such as Timbuktu and Gao, French forces are trying to search out their bases in the remote and rugged Adrar des Ifoghas mountains, far up in the northeast.

But with Mali's weak army unable to secure recaptured zones, and the deployment of a larger African security force slowed by delays and kit shortages, vast areas to the rear of the French forward lines now look vulnerable to guerrilla activity.

"They infiltrated the town via the river. We think there were about 10 of them. They were identified by the population and they went into the police station," said General Bernard Barrera, commander of French ground operations in Mali.

He told reporters in Gao that French helicopters had intervened to help Malian troops pinned down by the rebels, who threw grenades from rooftops.

Malian gendarme Colonel Saliou Maiga told Reuters the insurgents intended to carry out suicide attacks in the town.

SUICIDE BOMBERS

No casualty toll was immediately available. But a Reuters reporter in Gao saw one body crumpled over a motorcycle. Malian soldiers said some of the raiders may have come on motorbikes.

The gunfire in Gao erupted hours after French and Malian forces reinforced a checkpoint on the northern outskirts that had been attacked for the second time in two days by a suicide bomber.

Abdoul Abdoulaye Sidibe, a Malian parliamentarian from Gao, said the rebel infiltrators were from the MUJWA group that had held the town until French forces liberated it late last month.

MUJWA is a splinter faction of al Qaeda's North African wing AQIM which, in loose alliance with the home-grown Malian Islamist group Ansar Dine, held Mali's main northern urban areas for 10 months until the French offensive drove them out.

Late on Saturday, an army checkpoint in Gao's northern outskirts came under attack by a group of Islamist rebels who fired from a road and bridge that lead north through the desert scrub by the Niger River to Bourem, 80 km (50 miles) away.

"Our soldiers came under heavy gunfire from jihadists from the bridge ... At the same time, another one flanked round and jumped over the wall. He was able to set off his suicide belt," Malian Captain Sidiki Diarra told reporters.

The bomber died and one Malian soldier was lightly wounded, he added. In Friday's motorbike suicide bomber attack, a Malian soldier was also injured.

Diarra described Saturday's bomber as a bearded Arab.

Since Gao and the UNESCO World Heritage city of Timbuktu were retaken last month, several Malian soldiers have been killed in landmine explosions on a main road leading north.

French and Malian officers say pockets of rebels are still in the bush and desert between major towns and pose a threat of hit-and-run guerrilla raids and bombings.

"We are in a dangerous zone... we can't be everywhere," a French officer told reporters, asking not to be named.

One local resident reported seeing a group of 10 armed Islamist fighters at Batel, just 10 km (6 miles) from Gao.

OPERATIONS IN NORTHEAST

The French, who have around 4,000 troops in Mali, are now focusing their offensive operations several hundred kilometers (miles) north of Gao in a hunt for the Islamist insurgents.

On Friday, French special forces paratroopers seized the airstrip and town of Tessalit, near the Algerian border.

From here, the French, aided by around 1,000 Chadian troops in the northeast Kidal region, are expected to conduct combat patrols into the Adrar des Ifoghas mountains.

The remaining Islamists are believed to have hideouts and supply depots in a rugged, sun-blasted range of rocky gullies and caves, and are also thought to be holding at least seven French hostages previously seized in the Sahel.

The U.S. and European governments back the French-led operation as a defense against Islamist jihadists threatening wider attacks, but rule out sending their own combat troops.

To accompany the military offensive, France and its allies are urging Mali authorities to open a national reconciliation dialogue that addresses the pro-autonomy grievances of northern communities like the Tuaregs, and to hold democratic elections.

Interim President Dioncounda Traore, appointed after a military coup last year that plunged the West African state into chaos and led to the Islamist occupation of the north, has said he intends to hold elections by July 31.

But he faces splits within the divided Malian army, where rival units are still at loggerheads.

(Additional reporting by Tiemoko Diallo and Adama Diarra in Bamako; Writing by Joe Bavier and Pascal Fletcher; Editing by Kevin Liffey)

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