House GOP leaders call members back to work

WASHINGTON (Reuters) - Lawmakers on Thursday gave themselves a last chance to prevent the United States from plunging off a "fiscal cliff" by setting up a late session in Congress a day before taxes are due to rise for most working Americans.

Republican leaders in the House of Representatives told their members to be back in Washington from the Christmas holiday break on Sunday in case they need to vote on budget measures.

That leaves the door open to a last-minute solution to avert big tax hikes due to kick in on January 1 and deep, automatic government spending cuts set to begin on January 2 - together worth $600 billion - that could push the United States back into recession.

But the two political parties remained far apart, particularly over plans to increase taxes on the wealthiest Americans to help close the U.S. budget deficit.

The coming days are likely to see either intense bargaining over numbers, or political theater as each side attempts to avoid blame if a deal looks unlikely. Talks could go down to the wire on New Year's Eve.

"Hopefully, there is still time for an agreement of some kind that saves the taxpayers from a wholly, wholly preventable economic crisis," Mitch McConnell, the top Republican in the Democratic-controlled Senate, said on the Senate floor.

McConnell said he was willing to look at any plan by President Barack Obama to avoid the fiscal cliff and a Senate aide said congressional leaders could hold talks with the president on Friday.

The rhetoric was still harsh on Thursday after months of wrangling - much of it along ideological lines - over whether to raise taxes and by how much, as well as how to cut back on government spending.

Senate Majority Leader Harry Reid, the top Democrat in Congress, accused Republican House Speaker John Boehner of running a "dictatorship" by refusing to allow bills he did not like onto the floor of the chamber.

"It's being operated with a dictatorship of the speaker, not allowing a vast majority of the House of Representatives to get what they want," Reid told the Senate.

Reid urged the Republicans who control the House to prevent the worst of the fiscal shock by getting behind a Senate bill to extend existing tax cuts for all except those households earning more than $250,000 a year.

MARKETS EASE

U.S. stocks sharply cut losses after news of the House reconvening as investors clung to hopes of an 11th-hour deal. Even a partial agreement on taxes that would leave tougher issues like entitlement reform and the debt ceiling until later could be enough to keep markets calm.

"I'm not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff," said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio.

Obama arrived back at the White House on Thursday from a brief vacation in Hawaii that he cut short to restart stalled negotiations with Congress.

He is likely to meet the toughest resistance from Republicans in the House, where a group of several dozen fiscal conservatives oppose any tax hikes at all.

Strictly speaking, the fiscal cliff measures begin on January 1 when tax rates go up but the House might stay in session until the following day if an agreement is being worked out.

"This January 1 deadline is a little artificial. We can do everything retroactively. We have to get it right, not get it quickly," said Republican Representative Andy Harris.

Another component of the "fiscal cliff" - $109 billion in automatic spending cuts to military and domestic programs - is set to kick in on January 2.

The House and Senate passed bills months ago reflecting their own sharply divergent positions on the expiring low tax rates, which went into effect during the administration of former Republican President George W. Bush.

Democrats want to allow the tax cuts to expire on the wealthiest Americans and leave them in place for everyone else. Republicans want to extend the tax cuts for everyone.

In another sign that Americans are increasingly worrying about their finances as Washington fails to address the budget crisis, consumer confidence fell to a four-month low in December. The fiscal wrangling in Congress sapped what had been a growing sense of optimism about the economy, a report released on Thursday showed.

Americans blame Republicans in Congress more than congressional Democrats or Obama for the fiscal crisis, a Reuters/Ipsos poll showed.

When asked who they held more responsible for the "fiscal cliff" situation, 27 percent blamed Republicans in Congress, 16 percent blamed Obama and 6 percent pointed to Democrats in Congress. The largest percentage - 31 percent - blamed "all of the above."

(Additional reporting by Fred Barbash in Washington and David Gaffen in New York; writing by Alistair Bell; editing by Todd Eastham)

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Russia's Putin signals he will sign U.S. adoption ban

MOSCOW (Reuters) - President Vladimir Putin signaled on Thursday he would sign into law a bill barring Americans from adopting Russian children and sought to forestall criticism of the move by promising measures to better care for his country's orphans.

In televised comments, Putin tried to appeal to people's patriotism by suggesting that strong and responsible countries should take care of their own and lent his support to a bill that has further strained U.S.-Russia relations.

"There are probably many places in the world where living standards are higher than ours. So what, are we going to send all our children there? Maybe we should move there ourselves?" he said, with sarcasm.

Parliament gave its final approval on Wednesday to the bill, which would also introduce other measures in retaliation for new U.S. legislation which is designed to punish Russians accused of human rights violations.

For it to become law Putin needs to sign it.

"So far I see no reason not to sign it, although I have to review the final text and weigh everything," Putin said at a meeting of federal and regional officials that was shown live on the state's 24-hour news channel.

"I intend to sign not only the law ... but also a presidential decree that will modify the support mechanisms for orphaned children ... especially those who are in a difficult situation, by that I mean in poor health," Putin said.

Critics of the bill say the Russian authorities are playing political games with the lives of children, while the U.S. State Department repeated its "deep concern" over the measure.

"Since 1992 American families have welcomed more than 60,000 Russian children into their homes, and it is misguided to link the fate of children to unrelated political considerations," State Department spokesman Patrick Ventrell said in a statement.

Ventrell added that the United States was troubled by provisions in the bill that would restrict the ability of Russian civil society organizations to work with U.S. partners.

Children in Russia's crowded and troubled orphanage system - particularly those with serious illnesses or disabilities - will have less of a chance of finding homes, and of even surviving, if it becomes law, child rights advocates say.

They point to people like Jessica Long, who was given up shortly after birth by her parents in Siberia but was raised by adoptive parents in the United States and became a Paralympic swimming champion.

However, the Russian authorities point to the deaths of 19 Russian-born children adopted by American parents in the past decade, and lawmakers named the bill after a boy who died of heat stroke in Virginia after his adoptive father left him locked in a car for hours.

Putin reiterated Russian complaints that U.S. courts have been too lenient on parents in such cases, saying Russia has inadequate access to Russian-born children in the United States despite a bilateral agreement that entered into force on November 1.

NATIONAL IDENTITY

But Putin, who began a new six-year term in May and has searched for ways to unite the country during 13 years in power, suggested there were deeper motives for such a ban.

"For centuries, neither spiritual nor state leaders sent anyone abroad," he said, indicating he was not speaking specifically about Russia but about many societies.

"They always fight for their national identities - they gather themselves together in a fist, they fight for their language, culture," he said.

The bid to ban American adoptions plays on sensitivity in Russia about adoptions by foreigners, which skyrocketed as the social safety net unraveled with the 1991 Soviet collapse.

Families from the United States adopt more Russian children than those of any other country.

Putin had earlier described the Russian bill as an emotional but appropriate response to the Magnitsky Act, legislation signed by President Barack Obama this month as part of a law granting Russia "permanent normal trade relations" (PNTR) status.

The U.S. law imposes visa bans and asset freezes on Russians accused of human rights violations, including those linked to the death in a Moscow jail of Sergei Magnitsky, an anti-graft lawyer, in 2009.

The Russian bill would impose similar measures against Americans accused of violating the rights of Russian abroad and outlaw some U.S.-funded non-governmental groups.

(Reporting By Alexei Anishchuk; additional reporting by Andrew Quinn in Washington; Writing by Alissa de Carbonnel and Steve Gutterman; Editing by Andrew Osborn and Doina Chiacu)

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Wall Street drops in thin session, led by retailers

NEW YORK (Reuters) - Stocks fell for a third straight day on Wednesday, dragged lower by retail stocks after a report showed consumers spent less in the holiday shopping season than last year.

Trading was light, with volume at a mere 4.01 billion shares traded on the New York Stock Exchange, the Nasdaq and NYSE MKT, well below the daily average so far this year of about 6.48 billion shares. The day's volume was the lightest full day of trading so far in 2012. Many senior traders were still on vacation during this holiday-shortened week and major European markets were closed for the day.

Many investors said concerns about the "fiscal cliff" kept shoppers away from stores, suggesting markets may struggle to gain any ground until that issue is resolved. The CBOE Volatility Index <.vix> or VIX, Wall Street's favorite barometer of investor anxiety, rose 4.46 percent, closing above 19 for the first time since November 7.

A number of 2012's strongest performers advanced, a sign that portfolio managers may be engaging in "window dressing," a practice where market participants buy securities with big gains to improve the appearance of their holdings before presenting the results to clients. Bank of America Corp , which has more than doubled in 2012, added 2.6 percent to $11.54 on Wednesday.

Holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year, according to data from MasterCard Advisors SpendingPulse. The Morgan Stanley retail index <.mvr> skidded 1.8 percent while the SPDR S&P Retail Trust slipped 1.7 percent.

"With the 'fiscal cliff' hanging over our heads, it was hard to convince people to shop, and now it's hard to convince investors that there's any reason to buy going into year-end," said Rick Fier, director of trading at Conifer Securities in New York, which has about $12 billion in assets under administration.

President Barack Obama is due back in Washington early Thursday for a final effort to negotiate a deal with Congress to bridge a series of tax increases and government spending cuts set to begin next week, the so-called "fiscal cliff" many economists worry could push the U.S. economy into recession if it takes effect.

Coach Inc fell 5.9 percent to $54.13 as the S&P 500's biggest decliner, followed by Amazon.com , down 3.9 percent at $248.63, and Abercrombie & Fitch , off 3.5 percent at $45.44. Ralph Lauren Corp , Limited Brands and Gap Inc also ranked among the S&P 500's biggest decliners.

The Dow Jones industrial average <.dji> slipped 24.49 points, or 0.19 percent, to 13,114.59 at the close. The Standard & Poor's 500 Index <.spx> shed 6.83 points, or 0.48 percent, to 1,419.83. The Nasdaq Composite Index <.ixic> dropped 22.44 points, or 0.74 percent, to 2,990.16.

J.C. Penney Co was a notable exception to the weakness in retail stocks, surging 4.4 percent to $20.75 as the S&P 500's biggest gainer. It was followed closely by Bank of America and Genworth Financial , which each gained nearly 3 percent for the day.

"People want to show they own names like these, making them prime 'window dressing' candidates," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

"Bank of America keeps going up even though it's overbought and you'd expect a pullback at these levels. No one wanted it when it was under $10 a share, but they want it now."

The S&P 500 has fallen 1.5 percent over the past three sessions, the worst three-day decline since mid-November. The Dow Jones Transportation Average <.djt>, viewed as a proxy for business activity, fell 0.6 percent.

A Republican plan that failed to gain traction last week triggered the S&P 500's recent drop, highlighting the market's sensitivity to headlines centered on the budget talks.

During the last five trading days of the year and the first two of next year, it's possible for a "Santa rally" to occur. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during that period and risen 79 percent of the time, according to data from PrinceRidge.

"While it's unlikely there could be a budget deal at any time, no one wants to get in front of that trade," said Conifer's Fier. "Investors can easily make up for any gains when there's more action in 2013."

Data showed U.S. single-family home prices rose in October, reinforcing the view that the domestic real estate market is improving, as the S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis.

Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 2 to 1, while on the Nasdaq, more than five stocks fell for every three that rose.

(Editing by Jan Paschal)

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Denver rolls, keeps top spot in AP Pro32 rankings

NEW YORK (AP) — Peyton Manning and his Broncos are closing in on the playoffs as the top team in the AP Pro32 NFL power rankings.

Denver strengthened its grip on the top spot Wednesday following its 10th win in a row, receiving nine first-place votes and 381 points in balloting by The Associated Press panel of 12 media members who regularly cover the league.

The AFC West champion Broncos (12-3) close out the regular season at home against Kansas City (2-13), 32nd and last in the rankings. The final AP Pro32 rankings will be released next Wednesday.

The NFC South champion Atlanta Falcons (13-2) moved up two places to second with one first-place vote and 363 points. Last week, the Broncos were first by three points over San Francisco, which dropped to sixth after being blown out by Seattle.

"Eleven in a row (after KC this weekend) and primed for a Super Bowl run," Rich Gannon of CBS Sports/Sirius XM said in voting the Broncos first.

"As expected the Broncos have become a scoring machine that also has good pass rushers. Still a chance they are the No. 1 seed in the AFC," Pat Kirwan of SiriusXM NFL Radio/CBSSports.com said.

The Seahawks (one first-place vote) were up two spots to fifth after routing the 49ers 42-13 on Sunday night.

"They have scored 120 points more than their last three opponents and officially have become the team no one wants to play in the postseason," Dan Pompei of the Chicago Tribune said.

Despite the loss, the 49ers still received a first-place vote.

"Admittedly, a HUGE mulligan," said ESPN's Chris Berman in sticking with the 49ers at No. 1.

Green Bay was up three spots to third after its 55-7 rout of Tennessee, while New England dropped a place to fourth after hanging on for a 23-16 win over No. 31 Jacksonville.

"If there's any solace from an unimpressive win at Jacksonville, the Patriots also seemed disinterested in their final two regular-season games last year before reaching Super Bowl," Alex Marvez of Foxsports.com said.

"Yes, the Patriots are hard to figure out, but this isn't: They're always a Super Bowl factor as long as Tom Brady is healthy," Clark Judge of CBSSports.com said.

Indianapolis, which clinched a playoff spot with a win over Kansas City, moved up to 10th in a season in which the Colts started out No. 32 in the first AP Pro32 rankings.

"Can an assistant coach be named the NFL's coach of the year? Colts offensive coordinator Bruce Arians has put himself in that position for his interim work filling in for ailing head coach Chuck Pagano this season," Rick Gosselin of the Dallas Morning News said.

And yes, Arians can win the award.

Minnesota, meanwhile, rose to No. 12 this week, and needs a win over Green Bay to earn a playoff spot. The Vikings started the season 29th.

"Adrian Peterson is finally getting a little help from his friends," Ira Kaufman of the Tampa Tribune said.

Philadelphia began the season No. 8 and dropped three more spots to No. 27 after a 27-20 loss to Washington. The Redskins, meanwhile, went the other way, starting at No. 25 and rising to No. 9 this week.

"It's very simple for the resurgent Redskins: beat the Cowboys on Sunday, and the division is theirs," Bob Glauber of Newsday said. "Would be an incredible finish for a team that looked to be out of it at 3-6."

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

___

Follow Richard Rosenblatt on Twitter at: http://www.twitter.com/rosenblattap

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Climate change: No consensus needed

Lake Cachet II in Aysen, Chilean Patagonia, disappeared because of rising temperatures driven by climate change, experts say.

STORY HIGHLIGHTS

• Tseming Yang: Result of Doha climate change conference less than desirable


• Yang: It's time to abandon the myth that a consensus solution is the best approach


• He says the 25 major carbon emitters should work out an agreement among themselves


• Yang: Smaller, focused discussions may be better than large, U.N.-style gatherings

Editor's note: Tseming Yang, former deputy general counsel at the Environmental Protection Agency, is professor of law at Santa Clara University Law School.

(CNN) -- The Doha climate change conference this year was the most significant in nearly 20 years of gatherings under the U.N. Framework Convention process aimed at staving off future global warming disaster.

Since carbon dioxide emission limits agreed to under the 1997 Kyoto Protocol were to expire at the stroke of midnight on December 31, 2012, it was critical that the international community agreed to extend those obligations and to continue talks about future emission cuts.

But the outcome fell far short of what will be necessary to keep the world's average temperature from rising more than 2 degrees Celsius in the foreseeable future.

Under the Doha arrangement, 17 of the 25 biggest carbon emitting countries (including China, the United States, Russia and India) did not commit to any legally binding emission limits. The countries that did agree to extend and deepen their Kyoto emission reductions, including the European Union, Australia and Eastern Europe, make up only about 15% of the world's emissions. That seems like a rather meager return on the investment of time and effort over the past years.

But there is one silver lining.

The world's top 20 carbon emitters together make up about 77% of emission and account for about 4.3 billion people, which is about 62% of the global population. The remaining 170 or so countries account for just over 20% of emissions.

As often is the case, these negotiations over climate have come to symbolize epic David and Goliath struggles pitting poor developing countries against recalcitrant government officials from rich countries. Lobbying efforts, shaming tactics, and staging public demonstrations have been the slingshots of choice. One result is that more people are paying attention to environmental issues.

Nonetheless, it is time to abandon the myth that a consensus solution is necessarily the best approach. The unfortunate reality is that little can get done right now. It's like having hundreds of cooks with hundreds of different recipes attempting to prepare one meal in the same small kitchen. After two decades of hard work, it is time to consider reducing the number of cooks.

A better alternative to a United Nations-style conference would be for the 25 major emitters to come to an agreement just among themselves about their mutual commitments to deal with climate change effectively.

In other words, get the 25 cooks to work together on the main meal. The hundreds of other cooks ought to step out of the kitchen.

Some smaller, focused discussions have already started, such as in the Major Economies Forum. Imagine what kind of deals on cutting emissions would be possible just among China, India and the United States -- the top three emitters in the world respectively. Imagine a deal involving emission sources in China, which has some of the world's most polluting coal-fired power plants, and California, which is on a course to become one of the most stringently controlled states in carbon emissions.

Of course, there are no guarantees for success. But discussions within such a smaller group would allow government leaders to confront the realities of climate change and engage in direct horse-trading without the static of thousands of other voices desiring to load their issues into the deal.

Let's face it -- we are way beyond the time for finding an ideal solution. Every year the world waits to take further concrete steps to cut emissions, the atmosphere will be loaded with millions of tons more carbon dioxide that will stay for a century. And the job of limiting global warming to 2 degrees Celsius will be more out of reach.

At the best, gatherings like the one in Doha dangle a tantalizing mirage of achieving a sustainable future. At the worst, they give cover to governments that would rather avoid the hard choices they ultimately will have to make.

After one more expensive and time-consuming round of talks, it's time to be honest with what can really be accomplished in these U.N.-style gatherings.

Follow us on Twitter @CNNOpinion

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The opinions expressed in this commentary are solely those of Tseming Yang.

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Chicago parking meter rates to rise again in 2013

In an annual ritual that has become as predictable if not as joyous as a New Year’s Eve countdown to midnight, Chicago drivers again will have to dig a little deeper to pay to park at meters in 2013.

Loop rates will go up 75 cents to $6.50 an hour as part of scheduled fee increases included in Mayor Richard Daley’s much-criticized 2008 lease of the city’s meters to Chicago Parking Meters LLC.

Paid street parking in neighborhoods near the Loop will rise 25 cents and reach $4 an hour. Metered spaces in the rest of Chicago also will increase by a quarter per hour, to $2, according to the company.

Come the new year, workers will begin adjusting the now-familiar pay boxes to reflect the new rates in the Loop, from there working outward into the neighborhoods, the company said in a news release Wednesday.

Chicago Parking Meters hopes to have all the meters set to the new rates by the end of February, and drivers won’t have to pay the steeper rate until the box they’re using has been changed.

This is the last of the explicitly defined yearly meter jumps included in the company’s 75-year, $1.15 billion lease. But Chicago drivers shouldn’t expect the cost of parking to level out — starting in 2014, prices can be adjusted annually using a formula tied to the rate of inflation.

Daley’s parking meter deal has become something of a political boogeyman in Chicago over the years.

Mayor Rahm Emanuel has opted to bash it, talking occasionally about the bad deal reached by his predecessor and saying he won’t simply pay up when the company hands the city invoices for lost meter revenue due to street closures and other reasons.

The city's unpaid tab for lost parking meter revenue now tops $61 million as Emanuel disputes bills the company has sent. It’s unclear how much the city will be able to knock off that total.

Some aldermen, stung by constituents’ criticism of their overwhelming support of the meter lease barely two days after Daley handed them the proposal, have called on Emanuel to give them more time to consider far-reaching deals. Still, Emanuel’s digital billboard agreement quickly sailed through the council 43-6 this month despite opponents drawing comparisons to the parking meter deal.

Most parking meters in Chicago neighborhoods cost 25 cents an hour after the City Council approved the meter lease by a  40-5 vote in December 2008.

Neighborhood meters went up to $1 an hour in January 2009 and have increased each year since, along with those downtown.

jebyrne@tribune.com
Twitter @_johnbyrne

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Syria to discuss Brahimi peace proposals with Russia

BEIRUT (Reuters) - Syrian President Bashar al-Assad sent a senior diplomat to Moscow on Wednesday to discuss proposals to end the conflict convulsing his country made by international envoy Lakhdar Brahimi, Syrian and Lebanese sources said.

Brahimi, who saw Assad on Monday and is planning to hold a series of meetings with Syrian officials and dissidents in Damascus this week, is trying to broker a peaceful transfer of power, but has disclosed little about how this might be done.

More than 44,000 Syrians have been killed in a revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.

Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.

Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.

However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.

He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.

"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.

Russia, which has given Assad diplomatic and military aid to help him weather the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.

"ASSAD CANNOT STAY"

A Russian Foreign Ministry source said Makdad and an aide would meet Foreign Minister Sergei Lavrov and Mikhail Bogdanov, the Kremlin's special envoy for Middle East affairs, on Thursday, but did not disclose the nature of the talks.

On Saturday, Lavrov said Syria's civil war had reached a stalemate, saying international efforts to get Assad to quit would fail. Bogdanov had earlier acknowledged that Syrian rebels were gaining ground and might win.

Given the scale of the bloodshed and destruction, Assad's opponents insist the Syrian president must go.

Moaz Alkhatib, head of the internationally-recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of real powers.

Comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was one of Brahimi's ideas.

"The government and its president cannot stay in power, with or without their powers," Alkhatib wrote, saying his Coalition had told Brahimi it rejected any such solution.

While Brahimi was working to bridge the vast gaps between Assad and his foes, fighting raged across the country and a senior Syrian military officer defected to the rebels.

Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.

The video, published by the Syrian Observatory for Human Rights, showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.

The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.

STRATEGIC BASE

Rebels relaunched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a battle for a major army compound and fuel storage and distribution point.

Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with a vehicle rigged with explosives.

The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several people killed in Wednesday's fighting, which it said was among the heaviest for months.

The military used artillery and air strikes to try to hold back rebels assaulting Wadi Deif and the town of Morek in Hama province further south. In one air raid, several rockets fell near a field hospital in the town of Saraqeb, in Idlib province, wounding several people, the Observatory said.

As violence has intensified in recent weeks, daily death tolls have climbed. The Observatory reported at least 190 had been killed across the country on Tuesday alone.

The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.

"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.

A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".

Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.

(Additional reporting by Laila Bassam; Writing by Alistair Lyon; Editing by Andrew Osborn)

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Yen on defensive on U.S. fiscal worry, helps Nikkei

TOKYO (Reuters) - Uncertainty over whether U.S. lawmakers will strike a deal by an end-of-year deadline to avert a severe fiscal retrenchment undermined the yen and bolstered Japanese shares on Tuesday in low volume, with many participants away on Christmas holiday.

The dollar rose to a 20-month high of 84.965 yen early on Tuesday in Asia, as Japanese markets caught up with global investors who had reacted overnight to incoming Japanese Prime Minister Shinzo Abe's weekend comments that raised the pressure on the Bank of Japan.

During a meeting on Tuesday with officials from Japan's major business lobby, Keidanren, Abe reiterated calls on the BOJ to conduct bold monetary easing to beat deflation by setting an inflation target of 2 percent.

The head of Abe's coalition partner said on Tuesday the coalition party and Abe had agreed to set a 2 percent inflation target and compile a large stimulus budget to help the economy return to growth and overcome deflation.

The yen has come under pressure as a result of expectations that the BOJ will be compelled to adopt more drastic monetary stimulus measures next year.

The dollar was expected to stay firm this week as investors repatriate dollars, and as the U.S. fiscal impasse is likely to continue to sap investor appetite for risky assets and raise the dollar's safe-haven appeal.

"The dollar is seen relatively well bid, with all focus on the fiscal cliff," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"Negotiations may be carried over the weekend, but markets still expect a deal to be struck by December 31. It is unthinkable that the U.S. will risk driving its economic growth sharply lower by not agreeing to avoid it."

U.S. lawmakers and President Barack Obama were on Christmas holiday and talks were unlikely to resume until later in the week.

House of Representatives Speaker John Boehner failed to gain support for a tax plan at the end of last week, raising fears that the United States may face the "fiscal cliff" of some $600 billion in automatic spending cuts and tax increases set to start on January 1.

Japan's Nikkei stock average <.n225> resumed trading after a three-day weekend with a 1.1 percent gain, recapturing the key 10,000 mark it ceded on Friday after Boehner's failure sparked a broad market sell-off and the Tokyo benchmark closed down 1 percent. The Nikkei was likely to be supported as long as the yen stayed weak. <.t/>

"Ongoing optimism about the weak yen is lifting hopes that exporters' earnings will be better than expected," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Analysts say a near-term correction may be possible as the index is now in "overbought" territory after gaining 16.2 percent over the last six weeks, hitting a nine-month high last Friday. Its 14-day relative strength index was at 72.34, above the 70 level that signals an overbought condition.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> nudged up 0.1 percent, driven higher by surging Shanghai shares, as most Asian bourses were shut for Christmas.

The Shanghai Composite Index <.ssec> soared over 2 percent to five-month highs as investors bought property stocks on mounting optimism about the sector. Taiwan shares <.twii> jumped 1.3 percent on gains in technology and financial shares.

Asset performance in 2012: http://link.reuters.com/muc46s

2012 commodities returns: http://link.reuters.com/faz36s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

U.S. HOLDS 2013 KEY

Goro Ohwada, president and CEO at Japan-based fund of hedge funds Aino Investment Corp, said investors were likely to focus on economic fundamentals and the United States for cues on investment direction in 2013.

"There is a feeling that an investment strategy based on economic fundamentals may finally work next year, with asset prices more closely reflecting fair value. The problem is, we don't know yet which asset is a better bet than others," Ohwada said, adding that oil and gold appeared to be near their highs.

Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory, said commodities and energy prices will likely move in tight ranges in 2013, with investors eyeing political events, including the U.S. fiscal cliff outlook, Italian parliamentary election set for February 24-25, and Germany's elections in September.

"The macroeconomic policies taken this year around the world to support growth are expected to result in a moderate recovery in 2013 to reduce an excessive downside risk to prices. This will likely keep commodities, gold and energy prices near their highs," Niimura said.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Edmund Klamann and Daniel Magnowski)

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Lakers beat Knicks 100-94 to get to .500

LOS ANGELES (AP) — Kobe Bryant engineered a second-half comeback, helping the Los Angeles beat the New York Knicks 100-94 on Tuesday and extend the Lakers' winning streak to five games while lifting them to .500.

Bryant scored 34 points in his NBA-record 15th Christmas Day game and Metta World Peace added 20 points and seven rebounds while defending Carmelo Anthony, whose 34 points led the Knicks. Bryant, the league's leading scorer, has topped 30 or more points in nine straight games.

The Lakers improved to 14-14 — 9-9 under new coach Mike D'Antoni — and upped their holiday record to 21-18, including 13-9 at home.

The Knicks controlled most of the game behind Anthony and J.R. Smith, who had 24 points. But they struggled offensively in the fourth, when Anthony was limited to seven points and Smith had five.

Smith's 3-pointer pulled New York to 96-94. After Pau Gasol made one of two free throws, Smith missed another 3 that would have tied the game at 97 with 32 seconds left.

Gasol dunked with 12 seconds to go, punctuating a win that sent Lakers fans, frustrated by the team's struggles and coaching change, home happy. The Lakers avenged a 116-107 loss in New York on Dec. 13.

Steve Nash had 16 points, 11 assists and six rebounds in his second game in nearly two months. He missed 24 straight games while recovering from a small fracture in his lower left leg. Dwight Howard had 14 points and 12 rebounds, and Gasol had 13 points and eight rebounds.

Bryant had eight of the Lakers' first 10 points to open the fourth during a run that provided their first lead since the opening quarter in a game matching the two teams that have played the most on Christmas Day.

They took the lead for good on Bryant's basket with 7:38 remaining. Anthony and Tyson Chandler were in foul trouble in the fourth, with Chandler fouling out late.

The Knicks opened the third on a 15-5 run, with Anthony setting up on the perimeter and hitting two 3-pointers as part of his 10 points that stretched their lead to 61-53. His jumper provided the Knicks' largest lead of the game, 69-60.

Bryant and Nash ignited the quiet atmosphere by leading a 17-9 run that drew the Lakers to 78-77 going into the fourth. They combined to score 15 points, although Bryant missed two free throws to end the third that would have given the Lakers their first lead since early in the game. The Knicks' earlier roll dissolved in missed shots and a technical on Chandler for arguing a call.

World Peace scored 16 points in the second quarter, including eight in a row, when the Lakers played catch-up most of the way. His 3-pointer gave the Lakers their first lead of the period with 1:10 remaining. Smith tied it up with a free throw before Nash's jumper sent the Lakers into halftime leading 51-49.

Bryant scored the Lakers' final nine points of the first quarter to give them a 25-23 lead. D'Antoni's plan of having Darius Morris guard Anthony didn't last long after he scored five of the Knicks' first seven points.

NOTES: Bryant surpassed Oscar Robertson as the league's all-time Christmas Day scorer with 383 points. Robertson had 377. ... Knicks F/C Amare Stoudemire shot some before the game. He's been out all season after left knee surgery. ... ... Knicks C Marcus Camby had four points and four rebounds in 8 minutes. He's been sidelined by a sore left foot and barely played this season. ... Asked about Bryant as an MVP candidate, D'Antoni said, "You can't put anybody MVP if you're below .500." ... In their only other Christmas Day meeting in 1963, the Lakers beat the Knicks 134-126 behind 47 points by Jerry West and 27 from Elgin Baylor. ... Several Lakers had unopened gift bags in their lockers with the tag, "From Kobe Merry Xmas 2012." ... The Lakers were all in white, while the Knicks were all in orange down to their socks in a color similar to Syracuse. ... Howard spent time before the game explaining to his teammates a snake chant he wanted them to do during Bryant's pre-game introduction, in honor of his "Mamba" nickname. ... Among the celebs holidaying at Staples Center were Rihanna and Chris Brown, Adam Levine, Samuel L. Jackson, George Lopez and Richard Lewis. Vanessa Bryant and her two young daughters sat courtside opposite the Lakers bench.

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Whale Whodunit: How Investigators Solve Marine Deaths

Sometimes the bodies show up floating in the ocean, other times they wash ashore. Then it’s up to investigators to figure out what happened.

Whales, like humans, can meet unnatural ends. The bodies they leave behind can tell a story about what killed them, sometimes revealing evidence of a prolonged, painful death.

Michael Moore, director of the Woods Hole Oceanographic Institution‘s Marine Mammal Center, is among those who lead examinations, known as necropsies, on dead whales.

Whales, because of their enormous size and weight, present a unique challenge when they wash up on a beach or appear floating at sea. [In Photos: The World's Biggest Animals]

A plan & tools

“I don’t get involved unless I have a plan, because as soon as I am involved, I am committed to disposing of it,” Moore said of a dead whale’s body. “So essentially you work backwards from the end stage, whether it be digging a hole in the beach, or trucking it off or towing it back out to sea or whatever.”

Moore’s tools include a camera, knives (kept in a box marked with a note for airport security), chest waders, rubber gloves, hooks, chains and heavy machinery with trained operators. The heavy machinery ideally includes an excavator, for pulling the animal apart and digging a hole, and a front-end loader, for moving the animal and parts of it around, as well as filling the hole. 

“If you don’t have the machinery it can take days and days, you may never finish,” the necropsy and bury the whale, he said.

Overall, his crew typically includes eight or nine people.

The suspects

The deaths that most concern Moore are those caused by humans, specifically, by collisions with boats or fishing gear that entangles the whale.

Sometimes the cause is obvious. A ship’s propeller can leave slices on a whale’s body. In one case, a whale found floating near Jacksonville, Fla., had obvious propeller cuts down one side of its body, including into its chest.

“When the animal was pulled up the beach, you could hear gas coming out of the chest,” Moore said.

The blunt trauma of a collision with a boat can be less obvious, while entanglement in fishing gear can be more obvious, or not.

Information about why whales die matters because many whale populations are small and vulnerable.

Right whales, a species of particular interest to Moore, were estimated in 2007 to number at least 396 in the western North Atlantic; they are one of the most endangered large whales in the world. Ship strikes and entanglements with fishing gear are believed to be holding back the right whale population’s growth and recovery, according to the U.S. National Oceanic and Atmospheric Administration’s 2011 stock assessment. 

The necropsy

After inspecting the whale externally and taking measurements, Moore and his crew measure the thickness of its insulating fat, or blubber, which they strip off by hooking the blubber to a chain attached to the bucket of an excavator, to “unpeel it like a banana,” he said.

Once the blubber is off, the team peels away the now-exposed muscle, getting down to the chest and abdomen, where they remove ribs and examine the animal’s organs — if they haven’t already decomposed.

Moore can’t explain what a decaying whale smells like; he lost his sense of smell in veterinary school, because of exposure to formalin, a preservative made with formaldehyde. But rather than an advantage, this is a problem, he said: “I think a good sense of smell is a valuable diagnostic tool, so I regret not having my sense of smell.” [The 10 Weirdest Animal Discoveries of 2012]

During this process, the investigators are looking for abnormalities, such as bruising, often accompanied by fractured bones. These are common signs of a boat collision.

Evidence of a fishing gear entanglement may be obvious — for instance rope, net or other gear still attached to the animal — but sometimes these are gone.

The whale may have lost the gear over time or fishermen may have removed it in the hopes of salvaging the gear, Moore said.

One humpback whale he examined had obviously been in a trawl net, yet only a small knot of twine in its mouth remained.

A slow death

Particularly agonizing stories can show up in the entanglement deaths.

Right whales that pick up gear meant for lobsters or humpbacks that catch herring trawl nets can survive for months. The gear — depending on where it has become attached — can kill in a variety of ways, Moore and colleagues describe in a review article published in the Journal of Marine Biology earlier this year. It can drown a whale; if caught in the whale’s mouth, the gear can starve the animal; it can exhaust them by creating drag; it can cause injuries that can lead to infection and loss of blood.

In the review, Moore and graduate student Julie van der Hoop label these long-lasting whale entanglements “cruel” in their article.

“I think any animal on this planet, especially the more cognitive, higher sentient beings have a right to be as pain-free as possible, and when human activities cause wild animals to be in pain I object to that,” Moore said.

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