Palestinians hand Netanyahu letter, Fayyad absent

A Palestinian delegation handed Israeli Prime Minister Benjamin Netanyahu a letter setting out their grievances on Tuesday, but their prime minister, Salam Fayyad, refused to join them for what would have been the highest-level meeting since 2010.

Netanyahu, who took the letter from top Palestinian negotiator Saeb Erekat and intelligence chief Majed Faraj, promised a written reply in two weeks.

"Both sides hope the exchange of letters will help find a way to advance peace," said a joint statement issued after the meeting in Jerusalem.

The Palestinian letter, from President Mahmoud Abbas, demanded a halt to Israeli settlement construction on West Bank land captured in the 1967 Middle East war and deplored Israel's lack of commitment to the peace process, officials said.

Fayyad had been expected to lead the Palestinian team for what would have been the highest level meeting since formal peace talks between the two sides broke off in 2010.

But he was reluctant to engage with Israel on a day when more than 1,000 Palestinian prisoners began a hunger strike in protest against their conditions in Israeli jails, senior Palestinian officials told Reuters.

His last-minute withdrawal may also cast new light on divisions within the Palestinian political establishment, which has yet to find a strategy likely to lead to Palestinian statehood.

An Israeli official said earlier that Netanyahu would reiterate his call for talks to resume without preconditions, and for a meeting with Abbas.

The letter could be a basis for the Palestinians to renew their unilateral push for international recognition of statehood at the United Nations, an effort suspended last autumn amid stiff opposition from Washington and Israel.

WATERED-DOWN VERSION

Before the meeting, Palestinians said the letter would accuse Israel of failing to carry out its obligations under the 2003 "road map" agreed by both sides, which includes a halt to settlement activity on captured West Bank land.

Palestinian officials said the letter was a watered-down version of previous drafts which suggested the Palestinian Authority, run by Abbas, would dissolve itself or sever ties with Israel if there was no progress.

Foreign governments have viewed the letter with apprehension and urged the Palestinians not to use threatening language, but also welcomed the prospect of a rare high-level Israeli-Palestinian meeting.

The Palestinians may take their case for statehood to the U.N. General Assembly, having failed to secure backing at the Security Council in 2011, though only the Security Council - where the United States has veto power - has the authority to grant full U.N. membership.

U.S.-sponsored peace talks froze in late 2010 after Netanyahu rejected Palestinian demands that he extend a partial settlement construction freeze he had imposed, at Washington's behest, to persuade the Palestinians to take part in talks.

About 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem, areas Israel captured in the 1967 war. Palestinians want the territory for an independent state along with the Hamas-controlled Gaza Strip.

The settlements are considered illegal by the International Court of Justice, the highest U.N. legal body for disputes.

Israel cites historical and Biblical links to the West Bank and says the status of settlements should be decided in peace negotiations.

(Additional reporting by Ali Sawafta; Editing by Tim Pearce)
Reuters

Exclusive: China's Bo backed, then blocked murder probe against his wife: sources

Chinese politician Bo Xilai initially agreed to a police probe of his wife's role in the murder of a British businessman before abruptly reversing course and demoting his police chief, causing upheavals that led to the downfall of both men, sources said.

The sources' account gives new details of the dramatic breakdown in relations between Bo, an ambitious leader who cast himself as the crime-fighting boss of Chongqing, China's biggest municipality, and his once trusted police chief, Wang Lijun.

Reuters reported on Monday that Briton Neil Heywood was poisoned last November after he threatened to expose a plan by Bo's wife, Gu Kailai, to move money abroad.

The scandal is potentially the most divisive the Communist Party has faced since Zhao Ziyang was sacked as Party chief in 1989 for opposing the brutal army crackdown on student-led demonstrations for democracy centered on Tiananmen Square in Beijing that year.

Before his fall, Bo, 62, was widely seen as a contender for a post in China's top leadership committee, which will be decided later this year.

In a tense meeting on or about January 18, Wang confronted Bo with evidence implicating Gu in the death of Heywood, a former friend of the Bo family, said two sources with knowledge of police and government information on the case.

Bo was so angry he ordered Wang out of the office, but after composing himself he told Wang to return and signaled that he would let the inquiry proceed, the sources added.

Two or three days later, Bo backflipped and shunted aside Wang in an apparent bid to quash the inquiry and protect his wife and his career, the sources said.

Wang fled to the U.S. consulate in the nearby city of Chengdu on February 6 in an apparent asylum attempt, which exposed the rift between him and Bo and later brought to light official suspicions that Bo's wife engineered Heywood's murder.

It is not possible to contact Gu, Bo or Wang. Gu and Wang are in custody and Bo has not been seen in public since March, when he was dismissed as boss of Chongqing, in southwest China. He was stripped of his seat on the Politburo last week.

Gu is being held on suspicion of committing or arranging Heywood's murder, though no details of the motive or the crime itself have been publicly released, other than a general comment from Chinese state media that he was killed after a financial dispute.

Shortly before Bo was removed as party chief of Chongqing, Bo said his family was being unfairly vilified by rumors he did not specify, and leftist groups supporting him have continued to maintain he is the victim of a plot.

"Bo was shocked and outraged after he learned about the murder. He asked Wang to leave, saying he wanted to be alone and clear his mind," said well-connected Chonqging entrepreneur Wang Kang, citing accounts of the confrontation by city officials.

"When Wang returned half an hour later, Bo said to him that the issue carried too much significance and he would seriously punish his wife, Gu Kailai," Wang told Reuters in his office, decorated with pictures of himself meeting senior officials, including Bo's late father, revolutionary veteran Bo Yibo, a comrade of Mao Zedong.

A second source with direct ties to senior officials and police in Chongqing corroborated this account of what police and government officials believe happened.

"Bo Xilai was shocked and outraged, and then later saw what a threat the case was," the second source said, speaking on condition of anonymity because of the sensitivity of the matter.

"So he quickly removed him from the public security bureau three days later," the source added. "For Wang Lijun that was a terrible shock. If you took away his uniform, you stole his life."

Bo demoted Wang to the much less powerful role of vice mayor for education, culture and science.

INTERNAL STRUGGLE

Bo's move against Wang led to his police chief dashing into the U.S. consulate in Chengdu, near Chongqing, where he spent about 24 hours before leaving into the hands of Chinese central government authorities. Wang could now face treason charges.

Chongqing officials initially told British diplomats that Heywood's death was natural. Inside the Chongqing government at the time, police were raising suspicions that it was murder and Bo was moving to silence them, the sources said.

Police believe Heywood was poisoned with a drink at Chongqing's secluded hilltop Nanshan Lijing Holiday Hotel after he threatened to expose a plan by Gu to move money abroad, the second source and another source with knowledge of the police investigation have told Reuters.

Bo and his police chief had grown close during their popular campaign to clean up organized crime in Chongqing. Unlike other officials, Wang could visit Bo's office without informing security first, said the source with direct ties to senior officials and police.

Wang personally took over the case when he found several deputies had refused to sign off on the report of Heywood's death, and he reassured investigators to continue their work even after a connection to Gu was established, the source said.

"When the special case group realized what they were onto about Heywood, they were worried, but Wang Lijun told them not to worry, he would assume full responsibility for their work. He said others shouldn't be implicated," the source added.

Wang Kang, an entrepreneur who also makes documentaries, cited Chongqing officials as saying police chief Wang Lijun had been unwilling to hand over case materials to Bo.

"Wang Lijun was Bo's attack dog, but he also had his own ideas," said Wang Kang, who is no relation of Wang Lijun.

"If Wang Lijun was totally loyal to Bo Xilai, he could have destroyed the evidence."

(Additional reporting by Don Durfee and Benjamin Kang Lim in BEIJING; Editing by Brian Rhoads, Mark Bendeich and Dean Yates)
Reuters

Incensed Spain threatens Argentina after YPF seizure

An incensed Spain threatened swift economic retaliation against Argentina on Tuesday after it unveiled plans to seize YPF, the South American nation's biggest oil company which is controlled by Spanish energy group Repsol.

Madrid called in Argentina's ambassador over the nationalization order on Monday by Argentina's combative president, Cristina Fernandez, a move that sent Repsol shares tumbling but delighted many ordinary Argentines.

"I must express my profound unease. It's a negative decision for everyone," Spanish Prime Minister Mariano Rajoy said.

Speaking at a World Economic Forum meeting in Mexico, he said the Spanish-controlled company was being expropriated "without any justification."

Spanish Industry Minister Jose Manuel Soria promised "consequences" in the coming days. "They will be in the diplomatic field, the industrial field, and on energy," he said.

Spain is due to consider its next steps at a cabinet meeting on Friday. But it appeared to have limited leverage over Argentina, which has proven impervious to pressure in the past.

Repsol said YPF was worth $18 billion as a whole, and that it would seek compensation on that basis.

As of Tuesday's market close, YPF's market capitalization was $10.4 billion, according to Reuters data.

Argentina's Deputy Economy Minister Axel Kicillof said Buenos Aires would not agree to Repsol's valuation. "We're not going to pay what they say," he told the Senate committee kicking off a debate over the expropriation bill.

"We need YPF's objectives to match Argentina's objectives ... The state is the solution," Kicillof said.

He said that securing control of YPF was central to Fernandez fulfilling her reelection campaign promise of "deepening the model" for her state-centric policies.

A surging fuel import bill has pushed production to the top of Fernandez's agenda at a time of worsening state finances in Latin America's No. 3 economy.

Repsol, whose shares fell 7.5 percent in Madrid on Tuesday, said the takeover was unjustified and vowed to defend its interests.

"This battle is not over," company Chairman Antonio Brufau said. "The expropriation is nothing more than a way of covering over the social and economic crisis facing Argentina right now."

Late on Tuesday, Moody's Investors Service said it was downgrading YPF and keeping the company's ratings on review.

European Commission President Jose Manuel Barroso urged Argentina to uphold international agreements on business protection with Spain. "I am seriously disappointed about yesterday's announcement," he said in Brussels.

British Foreign Secretary William Hague added to the chorus of condemnation, saying: "This goes against all the commitments Argentina has made in the G20 to promote transparency and reduce protectionism."

Argentina and Britain have been locked in a diplomatic battle over oil exploration in the Falkland Islands for months.

RESOURCE NATIONALISM

Spanish media slammed the expropriation, believed to be biggest nationalization in the natural resources field since the seizure of Russia's Yukos oil company a decade ago.

La Razon newspaper carried a photograph of Fernandez on its front page in a pool of oil with the headline: "Kirchner's Dirty War", a reference to her full name.

El Periodico spoke of "The New Evita", noting Fernandez announced the nationalization in a room dominated by a large sculptured image of Eva Peron, the first lady of Argentina from 1946-1952 who is revered by many Argentines as a champion of the poor.

Repsol's Brufau said he suspected nationalization of YPF was imminent when he tried to contact Fernandez last Friday and was told that the president "was angry" and did not want to speak.

YPF has been under pressure from Fernandez's center-left government to boost oil production, and its share price has plunged in recent months on speculation about a state takeover.

Spanish investment in Argentina may now be at risk after the move on YPF. In the "reconquista", or reconquest, of the 1990s, newly privatized Spanish businesses bought Latin American banks, telephone companies and utilities. "Reconquista" refers to the Spanish conquest of the region 500 years earlier.

Foreign investors are key to helping develop one of the world's largest reserves of shale oil and gas recently discovered in the Vaca Muerta area of Argentina.

Investors have pushed up the cost of protecting themselves against the risk of Argentina defaulting on its debt. Since February, Argentine credit default swaps have cost more than those of Venezuela, whose credit is also considered risky.

Argentine bond spreads widened to almost three times the average of the JPMorgan Emerging Markets Bond Index Plus (EMBI+), showing a decline in confidence.

ACE UP ITS SLEEVE?

Some analysts questioned whether Argentina might have an ace up its sleeve in the form of a new partner such as China Petrochemical Corp (Sinopec Group).

A Chinese website said Sinopec was in talks with Repsol to buy YPF for more than $15 billion, although other sources said the nationalization move would probably get in the way of such a deal. Sinopec dismissed the report as a rumor.

Fernandez said on Monday the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51 percent stake in YPF by seizing shares held exclusively by Repsol, saying energy was a "vital resource".

Fernandez, who still wears the black of mourning 18 months after the death of her husband and predecessor as president Nestor Kirchner, stunned investors in 2008 when she nationalized private pension funds. She has also renationalized the country's flagship airline, Aerolineas Argentinas.

Such measures are popular with ordinary Argentines, many of whom blame free-market policies such as the privatizations of the 1990s for the economic crisis and debt default of 2001/02.

(Additional reporting by Andres Gonzalez in Madrid, Tom Bergin and Michael Holden in London, Karina Grazina, Juliana Castilla and Hugh Bronstein in Buenos Aires, Daniel Bases in New York, Krista Hughes in Puerta Vallarta and Sebastian Moffett in Brussels; Writing by Giles Elgood, William Schomberg and Hugh Bronstein; Editing by Toni Reinhold)
Reuters

Exclusive: China's Bo backed, then blocked murder probe against his wife: sources

Chinese politician Bo Xilai initially agreed to a police probe of his wife's role in the murder of a British businessman before abruptly reversing course and demoting his police chief, causing upheavals that led to the downfall of both men, sources said.

The sources' account gives new details of the dramatic breakdown in relations between Bo, an ambitious leader who cast himself as the crime-fighting boss of Chongqing, China's biggest municipality, and his once trusted police chief, Wang Lijun.

Reuters reported on Monday that Briton Neil Heywood was poisoned last November after he threatened to expose a plan by Bo's wife, Gu Kailai, to move money abroad.

The scandal is potentially the most divisive the Communist Party has faced since Zhao Ziyang was sacked as Party chief in 1989 for opposing the brutal army crackdown on student-led demonstrations for democracy centered on Tiananmen Square in Beijing that year.

Before his fall, Bo, 62, was widely seen as a contender for a post in China's top leadership committee, which will be decided later this year.

In a tense meeting on or about January 18, Wang confronted Bo with evidence implicating Gu in the death of Heywood, a former friend of the Bo family, said two sources with knowledge of police and government information on the case.

Bo was so angry he ordered Wang out of the office, but after composing himself he told Wang to return and signaled that he would let the inquiry proceed, the sources added.

Two or three days later, Bo backflipped and shunted aside Wang in an apparent bid to quash the inquiry and protect his wife and his career, the sources said.

Wang fled to the U.S. consulate in the nearby city of Chengdu on February 6 in an apparent asylum attempt, which exposed the rift between him and Bo and later brought to light official suspicions that Bo's wife engineered Heywood's murder.

It is not possible to contact Gu, Bo or Wang. Gu and Wang are in custody and Bo has not been seen in public since March, when he was dismissed as boss of Chongqing, in southwest China. He was stripped of his seat on the Politburo last week.

Gu is being held on suspicion of committing or arranging Heywood's murder, though no details of the motive or the crime itself have been publicly released, other than a general comment from Chinese state media that he was killed after a financial dispute.

Shortly before Bo was removed as party chief of Chongqing, Bo said his family was being unfairly vilified by rumors he did not specify, and leftist groups supporting him have continued to maintain he is the victim of a plot.

"Bo was shocked and outraged after he learned about the murder. He asked Wang to leave, saying he wanted to be alone and clear his mind," said well-connected Chonqging entrepreneur Wang Kang, citing accounts of the confrontation by city officials.

"When Wang returned half an hour later, Bo said to him that the issue carried too much significance and he would seriously punish his wife, Gu Kailai," Wang told Reuters in his office, decorated with pictures of himself meeting senior officials, including Bo's late father, revolutionary veteran Bo Yibo, a comrade of Mao Zedong.

A second source with direct ties to senior officials and police in Chongqing corroborated this account of what police and government officials believe happened.

"Bo Xilai was shocked and outraged, and then later saw what a threat the case was," the second source said, speaking on condition of anonymity because of the sensitivity of the matter.

"So he quickly removed him from the public security bureau three days later," the source added. "For Wang Lijun that was a terrible shock. If you took away his uniform, you stole his life."

Bo demoted Wang to the much less powerful role of vice mayor for education, culture and science.

INTERNAL STRUGGLE

Bo's move against Wang led to his police chief dashing into the U.S. consulate in Chengdu, near Chongqing, where he spent about 24 hours before leaving into the hands of Chinese central government authorities. Wang could now face treason charges.

Chongqing officials initially told British diplomats that Heywood's death was natural. Inside the Chongqing government at the time, police were raising suspicions that it was murder and Bo was moving to silence them, the sources said.

Police believe Heywood was poisoned with a drink at Chongqing's secluded hilltop Nanshan Lijing Holiday Hotel after he threatened to expose a plan by Gu to move money abroad, the second source and another source with knowledge of the police investigation have told Reuters.

Bo and his police chief had grown close during their popular campaign to clean up organized crime in Chongqing. Unlike other officials, Wang could visit Bo's office without informing security first, said the source with direct ties to senior officials and police.

Wang personally took over the case when he found several deputies had refused to sign off on the report of Heywood's death, and he reassured investigators to continue their work even after a connection to Gu was established, the source said.

"When the special case group realized what they were onto about Heywood, they were worried, but Wang Lijun told them not to worry, he would assume full responsibility for their work. He said others shouldn't be implicated," the source added.

Wang Kang, an entrepreneur who also makes documentaries, cited Chongqing officials as saying police chief Wang Lijun had been unwilling to hand over case materials to Bo.

"Wang Lijun was Bo's attack dog, but he also had his own ideas," said Wang Kang, who is no relation of Wang Lijun.

"If Wang Lijun was totally loyal to Bo Xilai, he could have destroyed the evidence."

(Additional reporting by Don Durfee and Benjamin Kang Lim in BEIJING; Editing by Brian Rhoads, Mark Bendeich and Dean Yates)
Reuters

Jennifer Aniston Not Bothered About Brad Bitt and Angelina Jolie Engagement!

JENNIFER Aniston doesn’t care about Brad Pitt‘s engagement to Angelina Jolie.

Aniston — who was married to Brad from 2000-2005 — is currently dating actor Justin Theroux and is indifferent about her ex’s plans to remarry.

“She doesn’t care. She really doesn’t. She’s happy with Justin. She’ll probably marry him. She’s moved on. People don’t want to believe it, but she has,” a source said.

Jen recently insisted Justin has had a massively positive impact on her life.

“He’s a protector, for sure. He’s just a good human being, and so funny,” she said.

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