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

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

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

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

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

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

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

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

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

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

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

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

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

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

ICC THREAT

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

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

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

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

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

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

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

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

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

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

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

'HOPE SOME REASON WILL PREVAIL'

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

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

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

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

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

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

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

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

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

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

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Microsoft Surface Pro battery will last roughly four hours

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The X Factor Announces Top 6

TV Watch

The X Factor

11/29/2012 at 09:40 PM EST

From left; Demi Lovato, Britney Spears and Simon Cowell

FOX

Mario Lopez called the first elimination on Thursday's The X Factor a "bit of a shocker."

And so was the second.

The top eight contestants sang No. 1 hits Wednesday in an emotional night. Keep reading to find out which two performers were sent packing – and who's in season 2's top six ...

Paige Thomas was the first to go – which is shocking because she toned down her over-the-top performing style to sing Rick Astley's "Never Gonna Give You Up" like a like a "legitimate pop star," according to Simon Cowell.

That left Demi Lovato with just one singer on her team: CeCe Frey, who was told (by Cowell) to "pack her bags" Wednesday after her performance of "Lady Marmalade."

But L.A. Reid's contestant Vino Alan and Team Britney's Diamond White were in the bottom two and had to sing for survival. He performed "Trouble" and she sang Beyoncé's "I Was Here."

L.A. voted to send home Diamond; Britney returned the favor and voted to send home Vino. Demi voted Vino out as well. That left Simon ... and he fell in line with the female panelists, voting to get rid of Vino. Either one would have been a shock but Vino had been ranked third last week.

Here's how the top six rank this week:
1. Carly Rose Sonenclar
2. Tate Stevens
3. Emblem3
4. Fifth Harmony
5. CeCe Frey
6. Diamond White

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Clinton releases road map for AIDS-free generation

WASHINGTON (AP) — In an ambitious road map for slashing the global spread of AIDS, the Obama administration says treating people sooner and more rapid expansion of other proven tools could help even the hardest-hit countries begin turning the tide of the epidemic over the next three to five years.

"An AIDS-free generation is not just a rallying cry — it is a goal that is within our reach," Secretary of State Hillary Rodham Clinton, who ordered the blueprint, said in the report.

"Make no mistake about it, HIV may well be with us into the future but the disease that it causes need not be," she said at the State Department Thursday.

President Barack Obama echoed that promise.

"We stand at a tipping point in the fight against HIV/AIDS, and working together, we can realize our historic opportunity to bring that fight to an end," Obama said in a proclamation to mark World AIDS Day on Saturday.

Some 34 million people worldwide are living with HIV, and despite a decline in new infections over the last decade, 2.5 million people were infected last year.

Given those staggering figures, what does an AIDS-free generation mean? That virtually no babies are born infected, young people have a much lower risk than today of becoming infected, and that people who already have HIV would receive life-saving treatment.

That last step is key: Treating people early in their infection, before they get sick, not only helps them survive but also dramatically cuts the chances that they'll infect others. Yet only about 8 million HIV patients in developing countries are getting treatment. The United Nations aims to have 15 million treated by 2015.

Other important steps include: Treating more pregnant women, and keeping them on treatment after their babies are born; increasing male circumcision to lower men's risk of heterosexual infection; increasing access to both male and female condoms; and more HIV testing.

The world spent $16.8 billion fighting AIDS in poor countries last year. The U.S. government is the leading donor, spending about $5.6 billion.

Thursday's report from PEPFAR, the President's Emergency Plan for AIDS Relief, outlines how progress could continue at current spending levels — something far from certain as Congress and Obama struggle to avert looming budget cuts at year's end — or how faster progress is possible with stepped-up commitments from hard-hit countries themselves.

Clinton warned Thursday that the U.S. must continue doing its share: "In the fight against HIV/AIDS, failure to live up to our commitments isn't just disappointing, it's deadly."

The report highlighted Zambia, which already is seeing some declines in new cases of HIV. It will have to treat only about 145,000 more patients over the next four years to meet its share of the U.N. goal, a move that could prevent more than 126,000 new infections in that same time period. But if Zambia could go further and treat nearly 198,000 more people, the benefit would be even greater — 179,000 new infections prevented, the report estimates.

In contrast, if Zambia had to stick with 2011 levels of HIV prevention, new infections could level off or even rise again over the next four years, the report found.

Advocacy groups said the blueprint offers a much-needed set of practical steps to achieve an AIDS-free generation — and makes clear that maintaining momentum is crucial despite economic difficulties here and abroad.

"The blueprint lays out the stark choices we have: To stick with the baseline and see an epidemic flatline or grow, or ramp up" to continue progress, said Chris Collins of amFAR, the Foundation for AIDS Research.

His group has estimated that more than 276,000 people would miss out on HIV treatment if U.S. dollars for the global AIDS fight are part of across-the-board spending cuts set to begin in January.

Thursday's report also urges targeting the populations at highest risk, including gay men, injecting drug users and sex workers, especially in countries where stigma and discrimination has denied them access to HIV prevention services.

"We have to go where the virus is," Clinton said.

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Wall Street ends higher after swings on 'fiscal cliff'

NEW YORK (Reuters) - Stocks finished higher on Thursday as investors bought on sporadic dips in a market roiled by conflicting comments from Washington about negotiations on an agreement to avoid the "fiscal cliff."

Tech shares, including Research In Motion and Advanced Micro Devices , helped the Nasdaq outperform the broader market. Telecommunications and health-care stocks were the day's best-performing sectors.

Reflecting the uncertainty surrounding U.S. budget talks, trading was choppy. Wall Street reversed early gains and fell shortly after House Speaker John Boehner, the top Republican in Congress, dashed hopes that lawmakers were getting closer to a budget deal that would avert automatic tax increases and spending cuts set for early 2013 - the fiscal cliff - that could push the U.S. economy into a recession next year. But the market rebounded by afternoon and the three major U.S. stock indexes rebounded to near their session highs.

"There is an emotional part in buying on the small dips here. Investors are more worried about missing the rally than losing money as they believe that the 'fiscal cliff' will be solved eventually," said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"Until the fiscal cliff is solved, the madness of the crowd will not subside."

Discussions on Capitol Hill are aimed at avoiding big automatic spending cuts and tax hikes, known as the fiscal cliff, that will start taking effect beginning in January.

Boehner's comment about a lack of progress in talks with the White House was one of a series of contrary pronouncements by lawmakers and the Obama administration over whether Washington will finally cut a deal.

There have been some signs that leaders are moving closer to a fiscal agreement. The S&P 500 has gained about 5 percent recently after a sell-off that took it down almost 8 percent following the U.S. election on November 6. But investors remain wary that politicians' ad hoc statements can spark quick reversals in the market.

U.S.-listed shares of BlackBerry maker Research In Motion rose 4 percent to $11.54 after Goldman Sachs upgraded the stock to "buy" from "neutral" on optimism ahead of the launch of the BlackBerry 10 smartphone.

Advanced Micro Devices Inc shares gained 4.1 percent to $2.04 on plans to sell and lease back its campus in Austin, Texas. The sale and lease-back will raise cash and fund its chipmaking business as Advanced Micro Devices diversifies beyond the struggling PC industry into new markets.

The Dow Jones industrial average <.dji> rose 36.71 points, or 0.28 percent, to 13,021.82 at the close. The Standard & Poor's 500 Index <.spx> gained 6.02 points, or 0.43 percent, to 1,415.95. The Nasdaq Composite Index <.ixic> advanced 20.25 points, or 0.68 percent, to close at 3,012.03.

So far this week, the Dow is up 0.1 percent, the S&P 500 is up 0.5 percent and the Nasdaq is up 1.5 percent.

But shares of top retailers retreated in the wake of data showing a weak start to November sales after Superstorm Sandy. Kohl's Corp fell 12 percent to $45.02.

Tiffany shares dropped 6.2 percent to $59.80 after the upscale jeweler reported quarterly results and cut its full-year sales and profit forecasts.

Supervalu shares sank 18.6 percent to $2.28 after a report that Cerberus Capital Management was having difficulty obtaining financing to buy out the troubled grocery chain.

Data showed the U.S. economy grew faster than initially thought in the third quarter as businesses restocked, but consumer and business spending were revised lower in a sobering reminder of the economic recovery's underlying weakness.

Contracts to buy previously owned U.S. homes rose more than expected in October, a sign the housing market recovery advanced into the fourth quarter despite a mammoth storm and concerns over looming tax hikes. Homebuilders' shares rose. The PHLX housing index <.hgx> rose 0.8 percent.

About 6.15 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.

On both the NYSE and the Nasdaq, roughly three stocks rose for every one that fell.

(Editing by Kenneth Barry and Jan Paschal)

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Egypt assembly seeks to wrap up constitution

CAIRO (Reuters) - The assembly writing Egypt's constitution said it could wrap up a final draft later on Wednesday, a move the Muslim Brotherhood sees as a way out of a crisis over a decree by President Mohamed Mursi that protesters say gives him dictatorial powers.

But as Mursi's opponents staged a sixth day of protests in Tahrir Square, critics said the Islamist-dominated assembly's bid to finish the constitution quickly could make matters worse.

Two people have been killed and hundreds injured in countrywide protest set off by Mursi's decree.

The Brotherhood hopes to end the crisis by replacing Mursi's controversial decree with an entirely new constitution that would need to be approved in a popular referendum, a Brotherhood official told Reuters.

It is a gamble based on the Islamists' belief that they can mobilize enough voters to win the referendum: they have won all elections held since Hosni Mubarak was toppled from power.

But the move seemed likely to deepen divisions that are being exposed in the street.

The Muslim Brotherhood and its Islamist allies called for protests on Saturday in Tahrir Square, setting the stage for more confrontation with their opponents, who staged a mass rally there on Tuesday.

The constitution is one of the main reasons Mursi is at loggerheads with non-Islamist opponents. They are boycotting the 100-member constitutional assembly, saying the Islamists have tried to impose their vision for Egypt's future.

The assembly's legal legitimacy has been called into question by a series of court cases demanding its dissolution. Its popular legitimacy has been hit by the withdrawal of members including church representatives and liberals.

"We will start now and finish today, God willing," Hossam el-Gheriyani, the assembly speaker, said at the start of its latest session in Cairo, saying Thursday would be "a great day".

"If you are upset by the decree, nothing will stop it except a new constitution issued immediately," he said. Three other members of the assembly told Reuters there were plans to put the document to a vote on Thursday.

ENTRENCHING AUTHORITARIANISM

Just down the road from the meeting convened at the Shura Council, protesters were again clashing with riot police in Tahrir Square. Members of the assembly watched on television as they waited to go into session.

"The constitution is in its last phases and will be put to a referendum soon and God willing it will solve a lot of the problems in the street," said Talaat Marzouk, an assembly member from the Salafi Nour Party, as he watched the images.

But Wael Ghonim, a prominent activist whose online blogging helped ignite the anti-Mubarak uprising, said a constitution passed in such circumstances would "entrench authoritarianism".

The constitution is supposed to be the cornerstone of a new, democratic Egypt following Mubarak's three decades of autocratic rule. The assembly has been at work for six months. Mursi had extended its December 12 deadline by two months - extra time that Gheriyani said was not needed.

The constitution will determine the powers of the president and parliament and define the roles of the judiciary and a military establishment that had been at the heart of power for decades until Mubarak was toppled. It will also set out the role of Islamic law, or sharia.

The effort to conclude the text quickly marked an escalation, said Nathan Brown, a professor of political science at George Washington University in the United States.

"It may be regarded with hostility by a lot of state actors too, including the judiciary," he said.

Leading opposition and former Arab League chief figure Amr Moussa slammed the move. He walked out of the assembly earlier this month. "This is nonsensical and one of the steps that shouldn't be taken, given the background of anger and resentment to the current constitutional assembly," he told Reuters.

Once drafted, the constitution will go to Mursi for approval, and he must then put it to a referendum within 15 days, which could mean the vote would be held by mid-December.

COURTS DECLARE STRIKE

Deepening the crisis further on Wednesday, Egypt's Cassation and Appeals courts said they would suspend their work until the constitutional court rules on the decree.

The judiciary, largely unreformed since the popular uprising that unseated Mubarak, was seen as a major target in the decree issued last Thursday, which extended his powers and put his decisions temporarily beyond legal challenge.

"The president wants to create a new dictatorship," said 38-year-old Mohamed Sayyed Ahmed, an unemployed man, in Tahrir.

Showing the depth of distrust of Mursi in parts of the judiciary, a spokesman for the Supreme Constitutional Court, which earlier this year declared void the Islamist-led parliament, said it felt under attack by the president.

In a speech on Friday, Mursi praised the judiciary as a whole but referred to corrupt elements he aimed to weed out.

"The really sad thing that has pained the members of this court is when the president of the republic joined, in a painful surprise, the campaign of continuous attack on the Constitutional Court," said the spokesman Maher Samy.

Senior judges have been negotiating with Mursi about how to restrict his new powers.

Mursi's administration insists that his actions were aimed at breaking a political logjam to push Egypt more swiftly towards democracy, an assertion his opponents dismiss.

The West worries about turbulence in a nation that has a peace treaty with Israel and is now ruled by Islamists they long kept at arms length.

Trying to ease tensions with judges, Mursi said elements of his decree giving his decisions immunity applied only to matters of "sovereign" importance, a compromise suggested by the judges.

A constitution must be in place before a new parliament can be elected, and until that time Mursi holds both executive and legislative powers. An election could take place in early 2013.

(Additional reporting by Tom Perry and Marwa Awad; Writing by Edmund Blair and Tom Perry; Editing by Will Waterman and Giles Elgood)

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Angus T. Jones Is Not Leaving Two and a Half Men: Source

TV Watch

By Elizabeth Leonard

11/28/2012 at 07:50 PM EST

The Half is back!

Ever since Angus T. Jones bashed Two and a Half Men in a now-viral video, it begged the question: Will the 19-year-old actor return to the hit show?

If he has it his way, he will.

"Angus expects to report to work after the holiday break in January," says a source close to the star. "He intends to honor his contract through the end of the season."

Jones, who called the show "filth" and urged viewers in a video interview on a religious website to stop watching, issued an apology Tuesday night, saying he has the "highest regard" for the "wonderful people" on the show.

Although Jones is not featured in an episode that tapes next week, he intends to show up on schedule after the break, the source says.

In the meantime, the source adds, "Angus is feeling positive and he is concentrating on spending some downtime with family and friends."

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Simple measures cut infections caught in hospitals

CHICAGO (AP) — Preventing surgery-linked infections is a major concern for hospitals and it turns out some simple measures can make a big difference.

A project at seven big hospitals reduced infections after colorectal surgeries by nearly one-third. It prevented an estimated 135 infections, saving almost $4 million, the Joint Commission hospital regulating group and the American College of Surgeons announced Wednesday. The two groups directed the 2 1/2-year project.

Solutions included having patients shower with special germ-fighting soap before surgery, and having surgery teams change gowns, gloves and instruments during operations to prevent spreading germs picked up during the procedures.

Some hospitals used special wound-protecting devices on surgery openings to keep intestine germs from reaching the skin.

The average rate of infections linked with colorectal operations at the seven hospitals dropped from about 16 percent of patients during a 10-month phase when hospitals started adopting changes to almost 11 percent once all the changes had been made.

Hospital stays for patients who got infections dropped from an average of 15 days to 13 days, which helped cut costs.

"The improvements translate into safer patient care," said Dr. Mark Chassin, president of the Joint Commission. "Now it's our job to spread these effective interventions to all hospitals."

Almost 2 million health care-related infections occur each year nationwide; more than 90,000 of these are fatal.

Besides wanting to keep patients healthy, hospitals have a monetary incentive to prevent these infections. Medicare cuts payments to hospitals that have lots of certain health care-related infections, and those cuts are expected to increase under the new health care law.

The project involved surgeries for cancer and other colorectal problems. Infections linked with colorectal surgery are particularly common because intestinal tract bacteria are so abundant.

To succeed at reducing infection rates requires hospitals to commit to changing habits, "to really look in the mirror and identify these things," said Dr. Clifford Ko of the American College of Surgeons.

The hospitals involved were Cedars-Sinai Medical Center in Los Angeles; Cleveland Clinic in Ohio; Mayo Clinic-Rochester Methodist Hospital in Rochester, Minn.; North Shore-Long Island Jewish Health System in Great Neck, NY; Northwestern Memorial Hospital in Chicago; OSF Saint Francis Medical Center in Peoria, Ill.; and Stanford Hospital & Clinics in Palo Alto, Calif.

___

Online:

Joint Commission: http://www.jointcommission.org

American College of Surgeons: http://www.facs.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Asian shares up on hopes of U.S. budget deal

TOKYO (Reuters) - Asian shares touched their highest levels in more than three weeks and commodities rose on Thursday as sentiment improved after a senior U.S. lawmaker said he was "optimistic" on reaching a budget deal before the end of the year to avoid a fiscal crisis.

European shares will likely extend gains seen in the previous session, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> will open up as much as 0.4 percent.

A 0.4 percent climb in U.S. stock futures also hinted at a solid Wall Street open. <.l><.eu><.n/>

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> surged 1 percent, after ending a seven-day winning streak on Wednesday with a 0.3 percent drop.

Japan's Nikkei stock average <.n225> also advanced 1 percent, rebounding from the previous session's one-week closing low on optimism over the U.S. budget talks and a weaker yen. The dollar inched up 0.1 percent to 82.17 yen. <.t/>

Australian shares <.axjo> added 0.7 percent to three-week highs, supported by banks and gains in global miner Rio Tinto after its upbeat outlook on China and cost-cutting pledges. Shanghai shares <.ssec> rebounded from their lowest levels since January 2009 hit the previous day.

Market gains were subdued, however, with moves largely attributed to position adjustments ahead of year-end bookclosing, as investors were reluctant to make bets given a lack of clarity on the prospects for U.S. budget talks as well as global growth.

"There is less negative news but there are also few decisively positive news, leaving investors rotating in and out of assets which have been overbought or battered, but basically keeping their positions more or less neutral in whatever assets they have," said Yuuki Sakurai, chief executive of Fukoku Capital Management.

"Whether it's the U.S. fiscal cliff or the euro zone debt crisis, it's the same process of muddling through, taking three steps forward and two steps backward, but nevertheless making progress, so that's helping ease concerns of sharp downside risks and keeping markets in ranges," he said.

U.S. equities jumped overnight after U.S. House of Representatives Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avoid year-end austerity measures.

President Barack Obama later said he hoped an agreement can be reached before Christmas to avoid a "fiscal cliff" of tax increases and spending cuts worth $600 billion due to start in the new year and aimed at shrinking the budget deficit.

Market players remain wary of a lack of specifics on how the two major political parties plan to arrive at a compromise.

But sentiment has tended to improve on positive comments, reflecting nervousness that if U.S. lawmakers fail to strike a deal, they risk pushing the U.S. economy into recession and dragging down global growth.

The U.S. economy remains on a moderate recovery trend with modest hiring and a fragile housing market.

NO CLEAR TREND

Asia's growth prospects remain mixed, with economies such as Indonesia and the Philippines underpinned by healthy domestic demand and government spending while others such as South Korea and Japan are dragged down by sluggish domestic demand and falling exports.

A key South Korean manufacturing business survey showed on Thursday its index for December fell to match a more than 3-year low, with companies citing economic uncertainties.

China's economy appears to have emerged from its lows but the outlook is uncertain.

"It's not the best time to be making big positional changes now. Most investors are waiting for policy guidance on the structural reforms the Chinese leadership has been talking a lot about," said Alan Lam, Julius Baer's Greater China equity analyst.

"With the United States, Japan and the euro zone focused on spending cuts, and China's patchy success in turning domestic consumption into the main driver of its economy, the global economy may find it tough to muster momentum," said Thomas Lam, chief economist at DMG & Partners Securities.

"If that's the case, then that's probably going to hold back any substantial increase in demand for metals or other commodities," he added.

The euro was steady around $1.2954 after peaking at $1.3010 on Tuesday, its highest level since October 31, on news of a deal on Greece's debt reduction plan paved the way for further aid to prevent Athens' from an imminent default.

U.S. crude futures rose 0.4 percent to $86.86 a barrel and Brent inched up 0.3 percent to $109.82.

Spot gold steadied around $1,720.06 an ounce after slumping 1.5 percent on Wednesday for its biggest one-day drop in nearly a month when deflation worries related to a U.S. fiscal crisis and debt-stricken Greece triggered a heavy bout of stop-loss orders from momentum-driven fund investors.

But investment interest remained high, as illustrated by holdings of the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, hitting a record high for a second consecutive day at 1,347.018 metric tons (1484.8 tons) on November 28.

"Generally, people are still pretty bullish on gold and last night was just a one-off correction, nothing extraordinary," said a Singapore-based trader, adding that $1,650-$1,700 would be a good buying level.

Investors were cautiously bullish in Asian credit markets, tightening the spreads on the iTraxx Asia ex-Japan investment-grade index by 1 basis point.

(Additional reporting by Rujun Shen and Melanie Burton in Singapore and Clement Tan in Hong Kong; Editing by Michael Perry & Kim Coghill)

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Egyptians challenge Mursi in nationwide protests

CAIRO (Reuters) - Tens of thousands of Egyptians rallied on Tuesday against President Mohamed Mursi in one of the biggest outpourings of protest since Hosni Mubarak's overthrow, accusing the Islamist leader of seeking to impose a new era of autocracy.

Police fired tear gas at stone-throwing youths in streets near the main protest in Cairo's Tahrir Square, heart of the uprising that toppled Mubarak last year. Clashes between Mursi's opponents and supporters erupted in a city north of Cairo.

But violence could not overshadow the show of strength by the normally divided opponents of Islamists in power, posing Mursi with the biggest challenge in his five months in office.

"The people want to bring down the regime," protesters in Tahrir chanted, echoing slogans used in the 2011 revolt.

Protesters also turned out in Alexandria, Suez, Minya and other Nile Delta cities.

Tuesday's unrest by leftists, liberals and other groups deepened the worst crisis since the Muslim Brotherhood politician was elected in June, and exposed the deep divide between the newly empowered Islamists and their opponents.

A 52-year-old protester died after inhaling tear gas in Cairo, the second death since Mursi last week issued a decree that expanded his powers and barred court challenges to his decisions.

Mursi's administration has defended the decree as an effort to speed up reforms and complete a democratic transformation in the Arab world's most populous country.

"Calls for civil disobedience and strikes will be dealt with strictly by law and there is no retreat from the decree," Refa'a Al-Tahtawy, Mursi's presidential chief of staff, told the Al-Hayat private satellite channel.

But opponents say Mursi is behaving like a modern-day pharaoh, a jibe once leveled at Mubarak. The United States, a benefactor to Egypt's military, has expressed concern about more turbulence in a country that has a peace treaty with Israel.

"We don't want a dictatorship again. The Mubarak regime was a dictatorship. We had a revolution to have justice and freedom," 32-year-old Ahmed Husseini said in Cairo.

The fractious ranks of Egypt's non-Islamist opposition have been united on the street by crisis, although they have yet to build an electoral machine to challenge the well-organized Islamists, who have beaten their more secular-minded rivals at the ballot box in two elections held since Mubarak was ousted.

MISCALCULATION

"There are signs that over the last couple of days that Mursi and the Brotherhood realized their mistake," said Elijah Zarwan, a fellow with The European Council on Foreign Relations. He said the protests were "a very clear illustration of how much of a political miscalculation this was".

Mursi's move provoked a rebellion by judges and has battered confidence in an economy struggling after two years of turmoil. The president still must implement unpopular measures to rein in Egypt's crushing budget deficit - action needed to finalize a deal for a $4.8 billion International Monetary Fund loan.

Some protesters have been camped out since Friday in Tahrir and violence has flared around the country, including in a town north of Cairo where a Muslim Brotherhood youth was killed in clashes on Sunday. Hundreds have been injured.

Supporters and opponents of Mursi threw stones at each other and some hurled petrol bombs in the Delta city of el-Mahalla el-Kubra. Medical sources said almost 200 people were injured.

"The main demand is to withdraw the constitutional declaration (decree). This is the point," said Amr Moussa, a former Arab League chief and presidential candidate who has joined the new opposition coalition, the National Salvation Front. The group includes several top liberal politicians.

Some scholars from the prestigious al-Azhar mosque and university joined Tuesday's protest, showing that Mursi and his Brotherhood have alienated some more moderate Muslims. Members of Egypt's large Christian minority also joined in.

Mursi formally quit the Brotherhood on taking office, saying he would be a president for all Egyptians, but he is still a member of its Freedom and Justice Party.

The decree issued on Thursday expanded his powers and protected his decisions from judicial review until the election of a new parliament, expected in the first half of 2013.

In Washington, White House spokesman Jay Carney urged demonstrators to behave peacefully.

"The current constitutional impasse is an internal Egyptian situation that can only be resolved by the Egyptian people, through peaceful democratic dialogue," he told reporters.

New York-based Human Rights Watch said the decree gives Mursi more power than the interim military junta from which he took over.

U.N. Secretary-General Ban Ki-moon told an Austrian paper he would encourage Mursi to resolve the issue by dialogue.

DECREE'S SCOPE DEBATABLE

Trying to ease tensions with judges, Mursi assured Egypt's highest judicial authority that elements of his decree giving his decisions immunity applied only to matters of "sovereign" importance. That should limit it to issues such as declaring war, but experts said there was room for interpretation.

In another step to avoid more confrontation, the Muslim Brotherhood cancelled plans for a rival mass rally in Cairo on Tuesday to support the decree. Violence has flared in Cairo in the past when both sides have taken to the streets.

But there has been no retreat on other elements of the decree, including a stipulation that the Islamist-dominated body writing a new constitution be protected from legal challenge.

"The decree must be cancelled and the constituent assembly should be reformed. All intellectuals have left it and now it is controlled by Islamists," said 50-year-old Noha Abol Fotouh.

With its popular legitimacy undermined by the withdrawal of most of its non-Islamist members, the assembly faces a series of court cases from plaintiffs who say it was formed illegally.

Mursi issued the decree on November 22, a day after he won U.S. and international praise for brokering an end to eight days of violence between Israel and Hamas around the Gaza Strip.

Mursi's decree was seen as targeting in part a legal establishment still largely unreformed from Mubarak's era, when the Brotherhood was outlawed.

Though both Islamists and their opponents broadly agree that the judiciary needs reform, Mursi's rivals oppose his methods.

Rulings from an array of courts this year have dealt a series of blows to the Brotherhood, leading to the dissolution of the first constitutional assembly and the lower house of parliament elected a year ago. The Brotherhood dominated both.

The judiciary blocked an attempt by Mursi to reconvene the Brotherhood-led parliament after his election victory. It also stood in the way of his attempt to sack the prosecutor general, another Mubarak holdover, in October.

In his decree, Mursi gave himself the power to sack that prosecutor and appoint a new one. In open defiance of Mursi, some judges are refusing to acknowledge that step.

(Additional reporting by Tom Perry, Seham Eloraby, Marwa Awad and Yasmine Saleh in Cairo and Michael Shields in Vienna; Writing by Edmund Blair and Tom Perry; Editing by Giles Elgood/Mark Heinrich)

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