US position on Japan island dispute a 'bet

VEILED US warnings to Beijing not to challenge Japan's control of disputed islands encouraged Tokyo's "dangerously right-leaning" government and "betrayed" Washington's vow of neutrality, Chinese state media has reported.

The comments came as Japan's coastguard said three Chinese government ships had entered Japanese territorial waters around the islands, known as the Senkaku in Japanese and the Diaoyu in Chinese.

US Secretary of State Hillary Clinton on Friday said the area around the islands in the East China Sea was under Japan's control and therefore protected under a US security treaty with Tokyo.

Speaking at a joint news conference with Japanese Foreign Minister Fumio Kishida in Washington, and without mentioning Beijing directly, she said the US opposed "any unilateral actions" to undermine Japanese authority over the islands.

But in a commentary piece, the official Chinese news agency Xinhua criticised Washington's position, saying it "cast doubts on (US) credibility as a responsible power in the region".

It was "unwise" for Washington "to throw support behind Japan in Tokyo's islands dispute with Beijing", Xinhua said, adding: "This unbalanced position has betrayed its declared intention to stay neutral on the issue."

The US proposal for "tighter military alliance with Japan will only encourage Tokyo's dangerously right-leaning tendency", Xinhua said.

But Chinese foreign ministry spokesman Qin Gang was quoted by the agency as saying that Beijing "has always advocated to resolve issues between relevant countries through bilateral dialogue and by peaceful means".

Three Chinese government surveillance vessels sailed in waters around the disputed islands on Saturday for nearly five hours but had all left Japanese waters by 1.52 pm (1552 AEDT), the Japan coastguard said.

China has repeatedly sailed into the waters since Japan nationalised the chain in September, a move that triggered anger and demonstrations in China.

The United States insists it is neutral on the ultimate sovereignty of the islands.

"We want to see China and Japan resolve this matter peacefully through dialogue," Clinton said on Friday.

"We do not want to see any action taken by anyone that could raise tensions or result in miscalculation that would undermine the peace, security and economic growth in this region."

China has persistently criticised the US position and the sending of maritime surveillance ships to the potentially gas-rich area is seen by experts as a way to contest the notion that Japan holds effective control.

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Seven hostages dead in gas plant assault

SEVEN foreign hostages and 11 of their kidnappers have died as Algerian special forces launched a final assault on the besieged In Amenas gas complex, an Algerian security source says.

"The assault took place mid-morning. Eleven terrorists lost their lives along with the foreign hostages. We think they were killed in retaliation," the source told AFP on Saturday.

The heavily armed gunmen from a group known as "Signatories in Blood" had been holed up in the In Amenas gas complex since they took up to 41 foreign worker hostage in a dawn assault on Wednesday.

The gunmen, cited by Mauritania's ANI news agency, said on Saturday they were still holding "seven foreign hostages," denying claims of more.

"Signatories in Blood," led by Algerian Mokhtar Belmokhtar, a former senior Al-Qaeda commander in north Africa, were demanding an end to French intervention against Islamists in neighbouring Mali, ANI reported earlier.

Belmokhtar also wanted to exchanging American hostages for the blind Egyptian sheikh Omar Abdul Rahman and Pakistani Aafia Siddiqui, jailed in the United States on charges of terrorist links.

But US State Department spokeswoman Victoria Nuland said "the United States does not negotiate with terrorists."

On Friday, an Algerian security official had said troops were trying to reach a "peaceful" end to the crisis, before "neutralising the terrorist group that is holed up in the plant and freeing a group of hostages still being held there."

Amid a virtual news blackout in Algiers, harshly criticised by local media, world leaders took a tough stand on the fate of the remaining hostages.

US Defence Secretary Leon Panetta said Washington would "take all necessary steps to protect our people" from the threat of Al-Qaeda-affiliated militants in north Africa.

"Whether or not that involves assisting others with military operations, whether it involves developing in a cooperative way operations there, those are areas that I think remain to be decided," he told the BBC.

Earlier, US Secretary of State Hillary Clinton told a news conference with Japanese Foreign Minister Fumio Kishida of her deep concern "about those who remain in danger. Utmost care must be taken to preserve innocent life."

At least one American had already been confirmed dead before Saturday's final assault.

On Friday, the militants gave a breakdown of three Belgians, two Americans, one Japanese and a Briton, although Belgium said there was no indication any of its nationals were being held.

An Algerian security official had put the remaining number of foreign hostages at 10.

Norway's Statoil, which jointly operates the In Amenas site with Britain's BP and Sonatrach of Algeria, said two Norwegians have been found alive but six others remain unaccounted for.

In Tokyo, Prime Minister Shinzo Abe ordered his government to do everything possible to ensure the safety of those Japanese unaccounted for in "an extremely despicable" incident that "can never be forgiven."

France, which said on Saturday that 2000 of the 2500 troops it had pledged were now on the ground in Mali, said on Saturday that no more of its citizens were being held.

Of the French intervention in Mali, Foreign Minister Laurent Fabius said at a meeting in Abidjan on Saturday that "France was obliged to intervene very, very rapidly, otherwise there would have been no more Mali."

Algerian news agency APS quoted a government official as saying the kidnappers, who claimed to have come from Niger, were armed with machine guns, assault rifles, rocket launchers and missiles.

This was confirmed by an Algerian driver, Iba El Haza, who said the hostage-takers spoke in different Arabic dialects and perhaps also in English.

"From their accents I understood one was Egyptian, one Tunisian, another Algerian and one was speaking English or (another) foreign language," Haza told AFP, two days after escaping during the army's Thursday attack.

"The terrorists said: 'You have nothing to do with this, you are Algerians and Muslims. We won't keep you, we only want the foreigners.'"

Algeria's El Watan daily quoted a former military officer as justifying the army's assault on Thursday, saying: "All hesitation is forbidden when the future of the nation is at stake or being threatened."

The final death tolls, of both foreign and Algerian hostages and of gunmen, was not yet known.

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2000 French troops now in Mali

FRANCE now has 2000 troops on the ground in Mali as part of a drive against Islamist militants holding the north of the country, Defence Minister Jean-Yves Le Drian says.

That was 200 more than a day earlier, said the minister during a visit to the western port of Lorient, adding that a further 900 French soldiers were supporting the operation from bases outside Mali.

French defence officials on Saturday said they had never stated that France was aiming to have a total of 2500 soldiers on the ground in its former colony in West Africa.

That figure was widely used in the media.

Le Drian said on Saturday that "perhaps we will go beyond that", and added that "in any case, around 4000 troops will be mobilised for this operation" in Mali itself and elsewhere.

The Economic Community of West African States (ECOWAS) has vowed to boost the French effort with a total of about 5800 troops.

But only about a 100 have actually reached Mali.

West African leaders were meeting Saturday in Ivory Coast to try to fast track the deployment.

France launched its intervention on January 11 after the Al-Qaeda-linked rebels swooped down from their northern stronghold and threatened the Malian capital Bamako.

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US orders evacuation of Mali embassy

THE US State Department has ordered all family members of embassy employees to leave Mali, amid the country's escalating conflict with Islamist militants who control the vast arid north.

The order late on Friday follows a tumultuous week in which gunmen across the border in Algeria staged a deadly raid on a remote gas plant, taking an unknown number of foreign hostages.

"On January 18, the Department of State ordered the departure of all dependent family members who are not employed at the US Embassy in Bamako, Mali, for a period of up to 30 days," the notice stated.

It cited "ongoing fighting in northern and central Mali, fluid political conditions, the loss of government control of Mali's northern provinces, and continuing threats of attacks and kidnappings of westerners."

And although conditions in the capital remain calm, "the recent escalation of hostilities around Mopti in northern Mali has heightened tensions throughout the country," the warning said, also noting that Interim President Dioncounda Traore had declared a state of emergency on January 12.

French troops joined a regional effort to oust the militants on January 11, after the Al-Qaeda-linked rebels swooped down from their northern stronghold and threatened the Malian capital Bamako.

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Swan warns against 'endless pessimism'

FEDERAL Treasurer Wayne Swan is determined to have a "positive debate" about the economy in the 2013 election year.

Mr Swan will tell a financial services forum in New York on Saturday (AEDT) that "endless pessimism" is a risk to the global recovery, "just as it weighs on business and consumer sentiment in Australia's economy".

"I am determined to have a positive debate in Australia in 2013 about how we lock in the gains we've made in the last five years, and set our economy and our community up for the next five years," the treasurer says, adding "the future of our region is remarkably bright".

Mr Swan's vow comes after the government and opposition appeared to blame each other for weak jobs data released on Thursday.

Acting Employment Minister Kate Ellis took the chance to score a political point by blaming the rise in the national unemployment rate on Queensland's conservative government, while Opposition Leader Tony Abbott linked the numbers to Labor's decision to back away from a budget surplus in 2012/13.

Mr Swan says turbulence in the world economy during the second half of 2012 forced Australia to write down in just four months the revenue losses it had expected over a full year.

Despite this, the government is still delivering one of the biggest fiscal consolidations in Australia's history.

"We'll continue our fiscal discipline despite the big revenue write-downs which have made a surplus unlikely this year," the treasurer says.

While the government's previously promised surplus is not likely to eventuate in 2012/13, the budget outcome will have "no bearing at all on our determination to make room for our medium-term priorities like the Gonski education reforms and the National Disability Insurance Scheme", Mr Swan says.

He reiterates that "savage cuts" to public spending would be detrimental to the economy.

"We'll keep doing what's right for our economy, protecting the jobs and livelihoods of the most vulnerable in our community, while making room for our priorities and investing for the nation's future," Mr Swan says.

The government plans to make a "thorough assessment" of its budget in early 2013, "methodically working through the facts to ensure we continue to manage the economy responsibly and support employment".

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'Very, very challenging' fire day in NSW

TWO properties have been destroyed, a property owner hospitalised and several firefighters have collapsed after a "very, very challenging" day of bushfires in NSW.

Despite plummeting temperatures bringing a cool change across the state on Friday night, firefighters were warning the battle against the blazes is far from over.

The number of total fires burning in NSW rose to 120 on Friday after a day of intense heat and gusts of up to 90km/h fanned the flames of existing fires and sparked new blazes.

Twenty-six of those were uncontained as of 11pm (AEDT) on Friday.

"It's been a really, really challenging day for firefighters across the state," an RFS spokeswoman told AAP.

"It didn't get into catastrophic, but it was up at the high end of extreme in a number of places.

"And while the cool change will certainly provide some relief, we've got many large bushfires burning that are not going to be wrapped up just because the temperatures drop."

Disaster struck in the Bega Valley on Friday evening after a new bushfire west of Merimbula destroyed two properties and two sheds in the Millingandi area.

It brings to 53 the number of properties destroyed in the devastating NSW fires this year.

That fire crossed the Princes Highway on Friday afternoon and was threatening more properties between Wolumla and Millingandi, with firefighters working desperately thorough the night to contain it, the RFS said.

At Nowra, a rural property owner was taken to hospital after an "erratic" fire at Barringella Creek swept through a farm and destroyed a shed on the town's outskirts.

The bushfire, burning 12km southwest of Nowra, was downgraded to 'watch and act' on Friday, but there were still concerns some properties could be at risk if the wind changed.

Temperatures across the state were well into the 40s, sparking a number of blazes, including a fast moving grassfire at Boorowa, east of Young.

Fears the town of 1000 people would come under threat were assuaged when the fire line closest to it was contained.

However, it then changed direction and was threatening properties at Douglas Gap and Campbellfields roads.

In Sydney, which recorded its hottest-ever temperature of 45.8C, a fire broke out in the Ku-Ring-Gai Chase National Park, sending smoke and burning embers across the northern suburbs.

Firefighters were expected to work through the night to protect properties in the area.

Meanwhile, fires in Campbelltown and Marsden Park in the west were contained relatively quickly.

The state's most damaging blaze in the Warrumbungle National Park west of Coonabarabran continued unabated throughout the day, with more than 170 firefighters battling the 46,000-hectare fire.

Also of concern was a fire started by a torched car near Cessnock, in the Hunter region, which caused the evacuation of some residents.

Rain brought some relief to conditions there on Friday night, but it also put paid to firefighters' backburning efforts.

A number of firefighters collapsed as they worked to protect homes from blazes in "furnace-like" conditions.

"We're having fires popping up all over the state," Rural Fire Service (RFS) Deputy Commissioner Rob Rogers said.

"We've had a number of firefighters collapse with heat exhaustion.

"It's been incredibly hot for them."

The Bureau of Meteorology (BoM) was predicting a cool change for much of NSW over the weekend, bringing much lower temperatures and a strong chance of rain.

"It's going to bring the fire danger ratings right down," a BoM spokesman said.

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New Eurogroup head to be named on Monday

THE new head of the eurozone's group of 17 finance ministers will be named when they meet Monday, outgoing chair Jean-Claude Juncker says, with the Netherlands widely expected to take the post.

"The Dutch finance minister presented his candidature, which is a good one, and the decision will be taken next Monday," Juncker, Luxembourg's prime minister, said after meeting with Jeroen Dijsselbloem on Friday.

Dijsselbloem, who had said on Thursday he would formally announce his candidacy when meeting Juncker, told reporters he would present his views on how to manage the eurozone after more than three years of crisis to his colleagues on Monday.

"I want to thank Juncker for his work at the Eurogroup ... (and) all the advice he has given me as a newcomer to this financial world," said Dijsselbloem, 46, who was named finance minister only in November last year.

"We'll see Monday how it goes. My French colleague has asked for a presentation of ... (my) vision for the Eurogroup," he said.

"I am very glad to give that on Monday. That is a very reasonable request from the French colleague. We'll do that."

At one time, it had looked as if France wanted its finance minister, Pierre Moscovici, to take the Eurogroup post, but Paris could not reach a compromise with Germany, the eurozone's paymaster and biggest economy.

Moscovici said in Paris on Thursday that the Eurogroup should not rush into appointing a new chief, calling for the selection procedure to last "several weeks".

Apart from Dijsselbloem, there are no other candidates to head the Eurogroup, which coordinates policy on the single currency.

Juncker has been in the post since 2005. He has served through the worst of a debt crisis that several times appeared to threaten the euro's survival as Greece, Ireland and Portugal were forced into massive international bailouts.

In July, he tried to step down but in the absence of a compromise candidate agreeable to Paris and Berlin, he reluctantly said he would stay on until January, when he made an "irrevocable" decision to leave.

He has won widespread respect for his commitment to the euro and the wider European project, and is well-known for a mordant sense of humour. He will remain as Luxembourg's prime minister, a position he won in 1995.

In contrast, Dijsselbloem, from the PvdA Labour party, has barely two months of ministerial experience and little is known of his views on the future of the 17-nation currency union.

He told the Dutch parliament his presentation on Monday would focus on the Eurogroup's functioning and agenda.

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Protesting Sunnis call for Iraq PM to go

THOUSANDS have rallied in Sunni-majority areas of Iraq, calling for the ouster of Shi'ite Prime Minister Nouri al-Maliki in the latest of ongoing protests that have deepened a political crisis.

Demonstrators in Baghdad and other cities also demanded the reform of anti-terror laws they say are targeted at the Sunni community, as well as the release of prisoners they claim are being wrongfully held.

Friday's protests came after authorities released more than 400 prisoners, with a top minister publicly apologising for detaining some without charge for prolonged periods, and following visits to two of the biggest protest sites by ministers.

In the capital, protesters rallied at Sunni mosques after Friday prayers in which preachers railed against the government, while demonstrators in Samarra and Mosul insisted they would continue to rally and called for Maliki's ouster.

"Do not give space to those who ... want to take away your rights, even though it is their duty to protect them," said Adnan al-Naimi, an imam at the Najib Basha mosque in north Baghdad where about 400 demonstrators congregated.

Protesters, many holding large Iraqi flags and banners, shouted: "We don't want committees, we want our rights," a reference to a committee set up by Maliki to address protesters' demands, "Enough injustice!" and "Release the prisoners!"

Protests also took place in predominantly Sunni cities north and west of Baghdad.

In Samarra, thousands gathered in the city's central Al-Haq Square for Friday prayers, during which imam Mohammed al-Hamdoon shouted: "They have made promises before, and they made promises yesterday, but let them hear - we will stay, protesting, until we get our rights."

Demonstrators held up banners saying: "The people want the fall of the regime", and "Leave, Maliki, without negotiation."

On Wednesday, Iraq said it had freed more than 400 prisoners since anti-government rallies erupted last month, and Deputy Prime Minister Hussein al-Shahristani said it would press on with more releases daily.

The protests began on December 23 in mostly Sunni areas of Iraq, with the longest-running demonstration blocking a key highway linking Baghdad to Jordan and Syria.

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Algerian army frees nearly 650 hostages

THE Algerian army's rescue operation has freed nearly 650 hostages, including around 70 foreigners, who had been seized by Islamist gunmen at the In Amenas gas plant, national media reports.

"Nearly 650 hostages seized in the attack carried out on Wednesday by a terrorist group at the In Amenas gas complex, among them 573 Algerians and more than half of the 132 foreign hostages, were freed," the APS news agency reported.

Algeria's state news service says about 60 foreign hostages are unaccounted for in the standoff with Islamist militants now entering its third day.

The news service said more than half the 132 foreign hostages had been freed, but the report could not account for the rest. The report on Friday also said special forces had resumed negotiations after an assault Thursday at the gas plant deep in the Sahara.

A Mauritanian news site that frequently receives messages from al-Qaeda linked militants said the hostage-takers in Algeria had offered to trade two captive Americans for two jailed terror figures in the United States.

One of the two, Omar Abdel Rahman, masterminded the 1993 World Trade Centre bombing.

Mauritania's ANI news agency reported the gunmen holding hostages in Algeria wanted to negotiate an end to French intervention in Mali and exchange American hostages for prisoners held in the United States, quoting sources close to their leader.

ANI reported that the sources close to Mokhtar Belmokhtar said he had proposed that France and Algeria negotiate "an end to the war being waged by France in Azawad" (northern Mali).

In what ANI said was a video that would be distributed to the media, Belmokhtar also proposes "exchanging American hostages held by his group (the 'Signatories in Blood') for Egyptian Omar Abdelrahman and Pakistani Afiah Sidiqi, jailed in the United States on charges of terrorist links".E

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US stocks open mixed after solid China GDP

US stocks were mixed in opening trade on Friday despite a strong growth report from China, as some earnings disappointments, especially from Intel, and Boeing's 787 problems weighed on the market.

Five minutes into trade, the Dow Jones Industrial Average was up 12.78 points (0.09 per cent) to 13,608.802.

The broad-based S&P 500 fell 1.82 points (0.12 per cent) to 1,479.12.

The tech-heavy Nasdaq Composite lost 9.15 points (0.29 per cent) at 3,126.85.

Chipmaker Intel sank 5.6 per cent after a poor fourth-quarter earnings report, with a 31 per cent drop in profit.

General Electric added 2.3 per cent after reporting a 7.5 per cent rise in fourth-quarter profit, with chief executive Jeffrey Immelt expressing measured confidence for 2013.

AT&T fell 0.5 per cent following its after-trade announcement on Thursday that it would take a $US10 billion ($A9.53 billion) charge on fourth-quarter earnings to account for a sharp cut in its forecast earnings at its pension fund, due to lower interest rates.

Boeing, facing more trouble over its 787 aircraft, fell back 0.5 per cent following Thursday's 1.2 per cent rebound.

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Warsaw exchange dumps CEO over ethics

THE Warsaw Stock Exchange (WSE), the biggest exchange in central and eastern Europe, has replaced its president and CEO, Ludwik Sobolewski, over conflict-of-interest allegations, naming Adam Maciejewski, his deputy, to the top job.

At issue are allegations that Sobolewski, 47, used a WSE employee to solicit funding from listed companies to finance a movie starring his actress-girlfriend.

The WSE board ruled his activities "violated business ethics".

Maciejewski, 45, has worked in various capacities for the WSE since 1994, including management of the trading, and trading and market development departments.

He joined the management board in 2006, where he was responsible for the derivatives and structured products market, transaction systems, technology, trading and data vending.

Nearly 900 companies are quoted on the exchange, worth nearly 700 billion zloty ($A215 billion) in total.

The first bell on the WSE trading floor rang in 1991 after the collapse of Communism in Poland two years earlier.

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Settlements hit Bank of America earnings

BANK of America has reported fourth-quarter earnings that were lower than the year-ago period but slightly above expectations as it worked to put the effects of the housing bust behind it.

Bank of America said it had net earnings of $US367 million ($A349 million) compared with $US1.6 billion in the same 2011 fourth quarter.

That equated to three cents per share, better than the two cents per share projected by analysts.

Bank of America's revenue of $US18.67 billion in the quarter missed estimates of $US21.03 billion.

As expected, the giant US bank's earnings were hit by a recently announced settlement with government-controlled mortgage giant Fannie Mae, which resulted in a charge of $US2.7 billion.

Earnings were also dented by a $US2.5 billion charge related to a settlement between several large banks and the Office of the Comptroller of the Currency and Federal Reserve over foreclosure processes.

Bank of America chief financial officer Bruce Thompson said the bank had made progress in 2012 in putting the housing bust behind it.

"We've put a lot of risk behind us in 2012, and we just feel we're in a much better place as we head into 2013," Thompson said.

Bank of America said that compared with a year ago, its results for the 2012 fourth quarter were driven by improved credit quality across most major portfolios and higher investment banking fees, partially offset by an increase in consumer real estate losses reflecting the Fannie Mae and US settlements

Bank of America said it had 267,190 full-time employees as of the end of the quarter, some 5400 lower than the prior quarter.

Thompson said he expects additional staff cuts as the company works through its trove of loan delinquencies. About 50,000 workers are associated with this domain, Thompson said.

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Zimbabwe vice-president Nkomo dead: Mugabe

ZIMBABWEAN vice-president John Nkomo has died after a long battle with cancer, President Robert Mugabe says.

Nkomo, 78, was said to have died at Saint Anne's hospital in Harare.

"We have lost our vice-president John Landa Nkomo, he was suffering for a long time with cancer," Mugabe said on Thursday.

"We have lost a real revolutionary, a fighter of freedom, a friend of the people, he will be dearly missed by all of us."

Nkomo was appointed to one of the country's two vice-presidencies under Mugabe in late 2009.

Responsible for overseeing financial, economic and environmental policy he was seen as loyal to Mugabe.

He "can be counted on to do Mugabe's bidding", a leaked US diplomatic cable dating from 2009 said.

His Ndebele roots made him useful in checking the opposition Movement for Democratic Change in Matabeleland, a western region where the MDC enjoys strong support.

While he was sometimes mooted as a successor to Mugabe, few believe he had a real shot at taking the top post.

His appointment was the culmination of a political journey that began in the early 1960s, when he joined the Zimbabwe African People's Union, a pro-independence movement, which later became part of Mugabe's Zanu-PF.

The US embassy in Harare expressed its condolences, saying he played "an important role in shaping the course of Zimbabwean history".

"Whether as a teacher, a politician, an advocate for Zimbabwe's independence, or as a public servant, Vice-President Nkomo was a patriot who dedicated his life to Zimbabwe's sovereignty and prosperity," the embassy said in a statement.

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Lobbyist cleared in 'stinking' BAE trial

BRITISH defence giant BAE Systems' alleged central and eastern Europe fixer has been cleared of laundering millions of dollars to grease palms and win arms contracts in the region.

The deal-broker, Alfons Mensdorff-Pouilly, was however given a two-month suspended prison sentence for the lesser crime of falsifying evidence, a court in Vienna ruled at the end of a high-profile trial on Thursday.

"The whole affair stinks, but it doesn't stink enough," presiding judge Stefan Apostol said, calling the verdict "more than unsatisfactory" given the "morally questionable business practices" outlined.

Mensdorff, a colourful count, allegedly received 12.6 million euros ($A15.9 million) from BAE between 2000 and 2008, which prosecutors charged was then used to slip to "decision-makers" in the Czech Republic, Hungary and Austria to buy military jets.

Even though the trial heard from witnesses testifying to Mensdorff receiving envelopes stuffed with cash, the court was shown "insufficient" evidence to prove that this money was then used to bribe people, the judge said.

The prosecution's case was weakened by the fact that BAE executives were not obliged to testify after the firm's controversial $US450 million ($A430 million) settlement with US and British authorities to settle this and other cases in 2010.

"It was lucky for you that the British didn't come (to the trial), that the case was abandoned and that evidence could not be firmed up," the judge said.

"Otherwise things could have turned out quite differently."

Prosecutors also lacked key witnesses such as Timothy Landon, another larger-than-life character implicated in a 1970 coup in Oman who helped get the count hired by BAE in the 1990s. Landon, who was married to Mensdorff's cousin, died in 2007.

Chief prosecutor Michael Radasztics said BAE had "created illegal structures" and that by not testifying, had given the court "the finger".

The reason for BAE's no-show, he said, was simple: "Because there is no legal explanation for what happened and because everything on the charge sheet is accurate."

He said he would appeal.

In another high-profile corruption trial in Austria this week, former interior minister and European lawmaker Ernst Strasser was sentenced to four years in prison on Monday for bribery.

Strasser was secretly filmed by undercover journalists in 2010 offering to influence the drawing up of EU legislation for a fee of 100,000 euros per year.

The judge said Strasser had greatly damaged Austria's reputation, rejecting his defence that he had thought the reporters were spies as "one of the most outlandish things I have heard in my 20-year career".

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Man chases girls on NSW south coast

POLICE are searching for a man who chased two young girls on the NSW south coast.

Two 11-year-old girls were riding their bikes at Sanctuary Point about 1.30pm (AEDT) on Wednesday when they noticed a blue car with tinted windows, police said.

A man who got out of the car approached the girls and started chasing them when they pedalled away.

The girls rode to the nearest house and sought refuge with the home-owner.

The man was last seen getting into the front passenger's seat of the hatchback before it drove off south along Paradise Beach Road.

He is described as having a dark complexion and bald head.

At the time, he was wearing a light brown short sleeve shirt, white shorts and skateboarder-style shoes.

He was also carrying a bum bag over one shoulder.

Anyone with information is asked to contact Crime Stoppers on 1800 333 000.

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Algerian army raid kills 34 hostages

AN Algerian air strike has killed 34 hostages, some of them Westerners, and 15 of their Islamist kidnappers at a desert gas field, a spokesman for the kidnappers has been quoted as saying.

"Thirty-four hostages and 15 kidnappers were killed in an (air) raid by the Algerian army," the spokesman told the ANI news agency in remarks that have not been independently confirmed.

The source said Westerners were among the dead, but did not elaborate.

Also killed was Abu al-Baraa, who led the operation in which 41 foreigners and scores of Algerians were seized.

The spokesman said Algerian aircraft attacked the kidnappers when they tried to "transport some of the hostages in vehicles to a location to the south".

The militants said they seized the hostages, who are known to include US, French, British, Irish, Norwegian and Japanese citizens, in retaliation for the French military intervention in northern Mali.

Algerian media reported that 15 foreigners and 30 Algerians being held hostage had managed to escape, but authorities could not confirm this.

Algerian troops encircled the plant on Thursday, prompting gunmen to demand their withdrawal to allow for negotiations.

They have also demanded the release of some 100 Islamist extremists in Algeria, and want them sent to northern Mali, where French and Malian troops were battling extremists who seized a massive swathe of territory in April 2012.

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Nigerian bus crash kills 14: official

FOURTEEN people have been killed and four others seriously injured when their bus crashed into a truck and caught fire in northern Nigeria, a road safety official says.

"At around 6:30 am (1630 AEST) today a commuter bus which was carrying 18 passengers crashed into an abandoned truck in the middle of the road that had lost control and fell on its side overnight," Usman Masari told AFP.

The crash happened near the town of Potiskum, capital of Yobe state, added Masari, head of the state Federal Road Safety Commission.

"The bus caught up in flames, resulting in the death(s) of 14 passengers while four others sustained serious injuries," he said.

Nigeria, Africa's most populous nation, has one of the worst road accident records in Africa, with poor roads, badly maintained vehicles and reckless driving conspiring to kill thousands every year.

At least 27 people on a truck laden with cattle and sheep drowned after their vehicle plunged into a river in northwest Sokoto state last month, officials said.

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New free online travel guide: Wikivoyage

WIKIPEDIA has launched a free online global travel handbook.

Using a similar format to the popular internet encyclopedia, Wikivoyage.org can be edited by users and is funded by public donations.

The site already contains some 50,000 articles in nine languages, reports British newspaper The Times.

Visitors to the site can collate customised travel guidebooks suitable for printing, and the site also links to interactive map software.

The not-for-profit website faces stiff competition from, among others, the commercial Wikitravel, with which it is engaged in two lawsuits.

The new player in the market will also have to battle established sites by Lonely Planet and TripAdvisor.com.

The response to Wikivoyage.org has been mixed.

"I can imagine Wikivoyage being a part of someone's vacation research, but just a part," research analyst Andrew Warren-Payne told The Times.

"It's hard to see why this would be significantly disruptive - TripAdvisor et al did that years ago."

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Some migraines tied to women's heart risk

WOMEN who suffer from migraines accompanied by visual disturbances such as flashes of light may be at increased risk of heart attacks and blood clots, researchers said Tuesday.

The study involved 27,860 women, of whom 1,435 had migraine with aura, as such disturbances are called.

Over the course of the 15-year study, there were 1,030 cases of heart attack, stroke or death from a cardiovascular ailment, said the report from the American Academy of Neurology.

"After high blood pressure, migraine with aura was the second strongest single contributor to risk of heart attacks and strokes," said study author Tobias Kurth.

"It came ahead of diabetes, current smoking, obesity, and family history of early heart disease."

Kurth, or Brigham and Women's Hospital in Boston and the French National Institute of Health, is also a fellow of the American Academy of Neurology.

The risk for migraine-plagued women with aura was three times greater than for those with migraines that lacked this disturbance, Kurth told AFP.

A second study released by the same academy said women who had migraines with aura and took hormonal contraceptives were more likely to have blood clots.

Both studies will be presented at the academy's annual meeting in March in San Diego, California.

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Sugar intake linked to weight: NZ study

CUTTING back on sugar can help people make a small but significant fall in weight, an Otago University-led study says.

The study, commissioned by the World Health Organisation (WHO), found that reducing free sugars in the diet produced an average weight reduction of 0.8kg, while increasing sugar intake produced a corresponding increase of 0.75kg.

The findings were the result of researchers studying numerous international studies of the impact on body weight of free sugars - sugars added to foods by the manufacturer, cook, or consumer, plus those naturally present in honey, syrups, and fruit juices.

"It seems easier to overeat if your diet includes lots of sugary foods and drinks. When you overeat you gain weight," said Dr Lisa Te Morenga of Otago's Department of Human Nutrition, one of the study's lead authors.

After searching nearly 8000 trials and 10,000 studies published up to December 2011, the researchers found 68 studies that directly looked at the effects of free sugars on body weight and analysed those.

Dr Te Morenga said few of the studies had data lasting longer than 10 weeks, meaning the extent to which reducing sugars might reduce risk of obesity can't be extrapolated from the findings.

However, she said that "when considering the rapid weight gain that occurs after an increased intake of sugars, it seems reasonable to conclude that advice relating to sugars intake is a relevant component of a strategy to reduce the high risk of overweight and obesity in most countries".

There was less clear evidence with children, mainly due to poor compliance with dietary advice.

An editorial by two Boston professors in the British Medical Journal, which published the study, called for greater education, improvement in food and drinks provided at schools and worksites, and increasing tax on sugar-laden drinks.

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Art on the go, courtesy of Paris airport

FANCY a slice of art in between flights? Culture vultures now have a chance to satisfy their on-the-go urges with a new museum in the heart of France's largest airport, showcasing collections from top art institutions.

Meant as a "window" onto the capital's main museums, the exhibition space unveiled on Tuesday at Charles de Gaulle international airport will allow passengers "to get to know Paris' rich cultural offering better," said Pascal Bourgue, marketing and services director at Aeroports de Paris.

Open between the first flight of the day and the last, and offering free entry to all passengers transiting through terminal 2E, the Museum Space as it has been dubbed is set to display original works, on loan from Parisian museums, he said.

Nestled between the waiting lounges and boutiques, the space designed by architects Willmotte Pere et Fils blends wood, glass and steel in its decor. The 250-square-metre area targets long-haul international passengers, many of them bound for Asia.

For its inaugural six-month exhibition, organisers reached out to the Rodin Museum which loaned some 50 works by the 19th-century sculptor, including The Thinker and The Kiss.

The Rodin Museum's director Catherine Chevillot hailed the initiative as "unusual and original", and a way to "reach an audience which isn't necessarily familiar with museums."

After Rodin, the gallery is expected to host two six-month exhibitions a year, although it has not yet disclosed which museums are taking part.

Francis Briest, president of the fund set up to finance the space, says the art institutions involved will get a chance to showcase their collections to a wider audience.

A similar museum exists within Amsterdam's Schiphol Airport in the Netherlands, but it is dedicated solely to the country's national museum, the Rijksmuseum. American gallerist Larry Gagosian in October also opened an exhibition space at Le Bourget airport nearby, but that targets a more limited audience of private jet passengers.

With a record number of 61.6 million passengers having passed through the doors of Charles de Gaulle airport last year, the museum expects to host between 1500 and 2000 visitors a day.

"On an average, passengers spend between one and a half to two hours in the airport. During that time, they're relaxed and open to this type of experience," Bourgue said.

"The goal is to make this area a real cultural space, with a vibrant and dynamic offering," Briest said.

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Egypt building collapse kills 17 people

AT least 17 people have been killed and eight injured when a 12-storey building collapsed in the Egyptian coastal city of Alexandria, a security official has told AFP.

More people were trapped under the rubble and were calling out to rescue teams for help, the official added.

Emergency services rescued 10 people after the building housing 24 families in the Maamura district of Alexandria collapsed in the early hours, a security official said earlier.

Another two people were killed when a three-storey building collapsed in the Nile Delta province of Daqahliya, a security official told AFP.

"A mother and her child were killed and eight others injured when the building collapsed," the official said, adding that an estimated 10 people were still under the rubble.

Egypt has seen a number of construction disasters over the years, many of them blamed on planning violations or bad maintenance.

The latest incidents will pile pressure on President Mohamed Morsi's government which has been criticised for failing to address Egypt's chronic problems.

On Tuesday, 19 people died and over 100 injured when a train carrying military conscripts derailed southwest of Cairo.

According to media reports, it is the fifth deadly train accident since Morsi was sworn in as Egypt's first Islamist president in June.

The railway network's poor safety record stems largely from lack of maintenance and decades of poor management. In Egypt's deadliest railway tragedy, the bodies of more than 360 passengers were recovered from a train after a fire in 2002.

Egyptians have long complained that the government has failed to deal with the country's transport problems, with roads as poorly maintained as railway lines.

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Bangladesh court accepts graft case

A COURT has paved the way for corruption charges to be pressed against Bangladesh's opposition leader which could end up preventing the former premier from contesting next year's election.

Khaleda Zia is accused by the Anti-Corruption Commission of abusing her power while in office between 2001-6 by forcing people to donate to a charity named after her late husband, a former president who was assassinated in 1981.

Zia was present at the crowded court hearing in Dhaka.

Judge Zahirul Haque of the Metropolitan Sessions Court accepted the charge sheet which named her the "main accused" in the case, prosecution lawyer Mosharraf Hossain told AFP.

"The case has been taken for cognisance for the purpose of trial," Hossain said, adding that the court would also issue an arrest warrant against her fugitive political secretary who is a trustee of the charity.

The court will now hear arguments on whether it should press charges against Zia. If convicted, she could face a maximum seven years in jail and be banned from taking part in any future elections.

Zia's Bangladesh Nationalist Party (BNP) was crushed in the last parliamentary elections in 2008 by the Awami League party of her bitter rival Sheikh Hasina, who is now prime minister.

Her lawyer Sanaullah Mia told AFP the case was "false" and "politically motivated", adding the charity was a private organisation and not under the jurisdiction of the anti-graft body.

Both Hasina and Zia were detained for a year until the middle of 2008 as part of an anti-corruption crackdown launched by an army-backed caretaker government.

The charges against Hasina have all been thrown out since she came to power after the 2008 elections.

In recent months the BNP has enforced a series of crippling nationwide strikes demanding polls under a neutral technocrat-led administration.

It says it fears vote-rigging if the Hasina government organises the elections due in January 2014.

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Violence kills 12 Pakistan security forces

AT least 12 Pakistani security personnel have been killed in clashes and a landmine explosion in the two regions of the country most troubled by insurgents, officials say.

In the northwestern tribal belt, officials said dozens of militants attacked a checkpoint overnight, sparking clashes that killed six security personnel and four militants.

The fighting broke out in the northwestern Khyber district, where troops are frequently locked in clashes with homegrown Islamist militia Lashkar-e-Islam.

Taliban and al-Qaeda-linked militants have carved out strongholds in the semi-autonomous tribal belt to plot attacks on Pakistani, Afghan and Western targets.

"Around 100 militants attacked a Frontier Corps checkpost in the Shalobar area of Bara in Khyber tribal region on Monday night, which triggered a firefight," a security official told AFP on condition of anonymity.

Officials said four paramilitary soldiers and two tribal policemen were killed, and 16 other personnel were wounded.

The area is cut off to journalists and aid workers so it was not possible to confirm the death toll independently.

A spokesman for Lashkar-e-Islam said it carried out the attack but denied that any of its fighters were killed.

"We took four soldiers hostage as well. There was no loss of life on our side in the clashes," said spokesman Abur Rasheed Lashkari in a text message.

In the southwestern province of Baluchistan, six policemen were killed when their vehicle ran over a landmine around 460 kilometres southwest of Quetta.

"A senior police official of intelligence branch and five of his subordinates were on a mission in Panjgur district when their vehicle collided with a landmine. All of them were killed," Balach Aziz, a senior administration official, told AFP.

Twin suicide attacks killed 92 people at a snooker hall in a mainly Shi'ite Muslim area of Quetta last Thursday, the deadliest single sectarian attack on the minority community in Pakistan.

AFP alm/

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African troops bound for Mali

THE first African troops are bound for Mali to shore up a five-day old French military offensive that has sent Islamist insurgents fleeing from their northern strongholds.

Defence sources said France plans to triple its force from a current 750 to a total of 2500 troops, a sign that Paris is preparing for a drawn-out campaign to stem the advance of Islamists who have held northern Mali since April.

But France and fellow UN Security Council members also want to speed up the deployment of a UN-mandated, 3300-strong West African intervention force in the former French colony.

West African army chiefs began meeting on Tuesday in Bamako to plan the roll-out, as Nigeria, which is leading the force, said the first of its troops would deploy to Mali within a day.

"We are here today to speak about the engagement alongside our Malian brothers in arms, to liberate the north of Mali," Ivory Coast army chief General Soumaila Bakayoko said as the talks opened.

In Abuja, defence spokesman Colonel Mohammed Yerima told journalists a first Nigerian battalion will be deployed to Mali within 24 hours, and that Nigeria's total commitment will be 900 troops, 300 more than earlier announced.

Benin, Ghana, Niger, Senegal, Burkina Faso and Togo have also pledged troops.

French President Francois Hollande, speaking from a French military base in Abu Dhabi, said however it will take at least another week before the African force is deployed in full. And experts have warned it could take months before the troops are operational.

Since the French offensive was launched, the Islamists have fled three key towns under their control: Timbuktu, where residents have suffered some of the worst abuses of the past 10 months, as well as Gao, also in the north, and Douentza in Mali's centre.

Driven from their strongholds by French Rafale jets, the Islamists struck back on Monday in the government-held south, capturing the small town of Diabaly some 400 kilometres north of Bamako.

French planes hit Diabaly overnight, according to a security source who told AFP at least five Islamists were killed and many injured. A resident of a town some 20 kilometres from Diabaly told AFP he had seen armed Islamists fleeing after the strikes.

Hollande said the latest strikes had "achieved their goal". He defended the French intervention, saying it had prevented Mali from being overrun by "terrorists".

The 15-nation UN Security Council on Monday expressed its unanimous support for the French offensive.

But the Organisation of Islamic Cooperation, of which Mali is a member, called on Tuesday for an "immediate ceasefire, dubbing the offensive "premature" and urging all parties to return to negotiations.

So far the unrest has caused nearly 150,000 people to flee the country, while another 230,000 are internally displaced, the UN humanitarian agency said Tuesday.

While France has made quick gains in eastern Mali, French Defence Minister Jean-Yves Le Drian has said the situation is more difficult in the west where the rebels are better armed.

A spokesman for the Ansar Dine (Defenders of the Faith) rebel group, Senda Ould Boumama, said their withdrawal from northern cities was a "tactical retreat" to reduce civilian casualties, in comments published on Mauritanian news website Alakhbar.

A leader of the allied Movement for Oneness and Jihad in West Africa (MUJAO) also vowed revenge, warning: "France has attacked Islam. We will strike at the heart of France."

Afghanistan's Taliban insurgents have condemned France's intervention, warning of "disastrous" consequences.

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Honda unveils small SUV

HONDA has unveiled a stylish "urban SUV" concept at the heart of a small car onslaught aimed at helping the Japanese automaker boost global sales by 50 percent over the next four years.

An expansion of the already popular Fit family, Honda said the muscular yet compact car will offer a great alternative to customers who want the versatility of a sport utility vehicle with the size and handling of a small car.

"With aspirational and sophisticated styling, this urban SUV concept showcases the dynamic sculpting and vibrant character lines of a sporty coupe in the confident, capable stance of an SUV," American Honda sales chief John Mendel told a press conference at the Detroit auto show.

"Younger buyers in particular are looking for the functionality of an SUV in an efficient, fun-to-drive package. And we think this vehicle is right on the money."

The new model will hit the US and Japanese markets in 2014 following the launch of the updated Fit before being rolled out worldwide.

Small cars like the Fit, City and urban SUV will the be "key to our future," Honda chief executive Takanobu Ito said as he unveiled the concept car.

Honda forecasts that sales of this "global compact series" will expand from about 500,000 today to 1.5 million for the fiscal year ending in March 2017, Mendel told AFP.

That will help Honda drastically increase sales from four million to six million vehicles during the same period.

The remaining growth will come primarily from its core global models: the Accord, Civic and CRV.

"We see small continuing to grow," Mendel said in an interview after the launch.

"We think that with continued pressure on fuel economy demands we'll see a continuation of that kind of Europeanisation of the US market: smaller, more rational but I want all the emotional content, I want the capability."

There is a great deal of pent-up demand in the United States for Honda's Fit that will not be met until a new factory in Mexico comes online in 2014 with the capacity to build 200,000 vehicles a year, Mendel said.

Honda expects to be able to boost US sales from 1.4 million vehicles in 2012 to about 1.8 million by 2017, which will help North American sales reach close to two million.

Building small cars profitably is "tough," especially for vehicles sold in emerging markets that need to come in a lower price point, Ito said on the sidelines of the show.

"I think for all automobile markers to survive in the future it's going to be necessary to make these kinds of small cars, to make them highly efficient and to have the technology to build them," he added.

"We think product development and tech development in this area is something we're very good at."

Toyota is also building a new factory in Japan that will focus on compact cars and is working to slash overhead, increase efficiency and optimise production by concentrating research and development, sourcing and production in one location.

Similar plans are going into the upcoming Mexican plant and localisation also helps to lower costs while offsetting currency fluctuations and the impact of the strong yen.

"The exchange rate obviously is not something one can control and it's not something that's very easy to predict," Ito said.

"Therefore, globally for Honda in order for us to grow we need to work to minimise these exchange rate risks."

Honda - which was the first Japanese automaker to launch US auto production in 1982 - currently builds 90 percent of the vehicles it sells in the United States in North America.

That will move up to about 95 percent once the Mexican factory comes on line, Ito said in an interview on the sidelines of the show.

Honda already has several smaller expansions underway at some of its 14 existing North American plants to bring total capacity up to 1.92 million units from the current level of 1.63 million by 2014.

"We will have more flexibility as well as capacity for exportation," said Tetsuo Iwamura, head of Honda's North American operations.

The Japanese automaker recently hit the milestone of one million vehicles exported from the United States and is looking to become a net exporter of vehicles from North America within the next two years.

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Merry Christmas Mr Lawrence director dies

THE Japanese director of the acclaimed World War II prison camp drama Merry Christmas Mr Lawrence, Nagisa Oshima, has died, his son says. He was 80.

Oshima, who had a critical hit with the controversial erotic work In the Realm of the Senses which famously contained unsimulated sex scenes, had been ill for some time.

"My father died calmly," Oshima's younger son Arata told AFP.

"He was with members of his family, wife Akiko and elder son Takeshi. I wasn't there. My father had been in hospital since late last year and died of pneumonia."

The younger Oshima was speaking from his late father's home in Fujisawa near Kamakura, outside Tokyo.

Oshima's cinematic career began in earnest in the 1960s with a series of films with political themes, establishing his reputation as a serious director.

Many of his works tackle issues surrounding discrimination or exploring the boundaries of social acceptability.

It was into this latter category that In the Realm of the Senses fell in 1976. The sexually explicit portrayal of an affair between a prostitute-turned-hotel worker and her boss was based on a true story.

The couple's relationship evolves to include elements of sadism and masochism, and ends with the protagonist dead and his genitals severed.

Further worldwide acclaim came with the 1983 film Merry Christmas Mr Lawrence, starring David Bowie, Beat Takeshi Kitano and Tom Conti.

The movie, based on the writing of Laurens van der Post about his WWII experiences, depicts the shifting relationships of men in a Japanese prisoner of war camp.

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Assad may run for 2014 election

SYRIA'S President Bashar al-Assad may defy calls to step down and stand for election in 2014, an official says, as his army pounded rebel zones with shells and air strikes, killing dozens.

In a bloody day for Syria as it marked 22 months since the eruption of an anti-regime revolt that has morphed into a full-scale civil war, a bomb rocked Aleppo University in the country's north killing at least 15 people, while 45 others died in shellings and air raids elsewhere, a watchdog said.

The latest violence came a day after a senior official said Assad should be allowed to run for election in 2014.

"We are opening the way for democracy, or deeper democracy. In a democracy you don't tell somebody not to run," said Deputy Foreign Minister Faisal Muqdad in an interview with the BBC on Monday.

He repeated the Syrian regime's insistence that calls for Assad to step down immediately are foreign-backed and illegitimate.

"It is a coup d'etat if we listen to what those armed groups and those elements of Syria are proposing," said Muqdad.

"The president now and many other candidates who may run (in the 2014 elections) will go to the people, put their programs and be elected by the people," Muqdad told the BBC.

Muqdad's remarks come after Assad unveiled in a rare speech on January 5 in Damascus his own three-step peace initiative for the strife-torn country.

He offered dialogue with the opposition to end the conflict - but only with elements he deemed acceptable, not rebel-affiliated groups he termed "killers" and "terrorists" manipulated by foreign powers.

His plan was rejected outright by the entire opposition as well as by the West, and it was criticised heavily by UN-Arab League peace envoy Brahimi who termed it "one-sided".

The United Nations says that more than 60,000 people have died in the Syria conflict which began 22 months ago, on March 15, 2011, with peaceful protests that erupted into deadly violence in the wake of a harsh regime crackdown.

Contradictory reports meanwhile emerged on the origin of Tuesday's blast in Aleppo University, which struck the campus on the first day of exams.

"The explosion caused casualties among both students on their first day of exams, and people displaced from areas of the city damaged by terrorist attacks and who have sought refuge in the university complex," said the official SANA news agency.

State television blamed "terrorists", without specifying the nature of the explosion, while anti-regime activists said it was caused by an air strike.

A military official in Aleppo told AFP the explosion occurred after rebels tried to shoot down a warplane with a missile, but failed to hit their target.

Other sources said a car bomb attack was behind the blast.

Elsewhere in Syria, an artillery attack on the town of Houla in the central province of Homs killed 12 people, including seven minors, the Observatory said.

In Homs city, warplanes struck the besieged districts of Jobar and Sultaniyeh, while in the northern province of Aleppo, an air raid in on the rebel-held town of Al-Bab killed at least eight people, including three women and two children.

Near Damascus, warplanes raided the southeast and northeast outskirts of the capital, where the army is pressing its bid to take back rebel strongholds, said the Observatory, which relies on a network of activists, doctors and lawyers across Syria to compile its reports.

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Conditions improve at NSW bushfire

MORALE among firefighters tackling a "big and messy" blaze that has destroyed more than 30 homes in northern NSW is improving as the odds begin to stack their way.

The fire, which has scorched 40,000 hectares and has a perimeter of more than 100 kilometres, is confirmed to have decimated at least 33 properties in the Timor Road area and more than 50 sheds.

But Steve Rayson, incident control manager at the RFS control centre in Coonabarabran, said conditions had "settled down substantially" overnight.

More than 100 firefighters were on the ground, supported by bulldozers, trucks and aerial teams.

Strike teams from out of the area were also arriving, arming the firefighting effort with more resources than ever before.

"We have got much more equipment than we ever had for this fire," Mr Rayson told AAP on Tuesday.

"We have a chance now to consolidate."

Despite house losses and locals bearing the brunt of the fire on Sunday, he said morale was good.

"It's obviously very tragic for people to have lost homes. We can't understate the impact that has had on the community.

"But morale is good because people can see that the cards are getting stacked in our favour."

But he said the situation can quickly shift.

Overnight in the outskirts of Coonabarabran a soft red hue sat on the the hills of the Warrumbungle National Park, as embers slowly cracked and spat.

While small pockets of fires were burning along Baradine and Budaldine roads, much of the surrounding landscape simply looked to be smouldering.

However, Mr Rayson said people shouldn't be deceived.

"You can have a fire like now which is not moving much at all because it is quite cool.

"But a changing wind strength and a fire which is nice can become an out of control monster very, very rapidly."

The biggest challenge facing firefighters is that the blaze has a large fire edge to monitor and control, he said.

It is expected that the RFS will move from property protection towards containing the blaze throughout Tuesday.

Some people in Baradine have returned home, with electricity also up and running for a number of properties, however almost 70 poles that were burnt by the blaze still aren't connected.

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UPS to drop bid for TNT Express

US delivery giant United Parcel Service (UPS) says it's pulling out of its multi-billion-euro bid for Dutch firm TNT Express after EU competition authorities said they would probably block the deal.

"UPS informed TNT Express that UPS sees no realistic prospect that EC (European Commission) clearance can be obtained and that UPS will not pursue the transaction on any other basis," UPS said in a statement from Hoofddorp in the Netherlands on Monday.

The decision is despite an attempt by UPS last year to overcome competition concerns by amending its 5.16 billion euros ($A6.59 billion) bid.

EU competition authorities had warned that the takeover as constructed would result in damaging concentration in the European market for express delivery.

EU competition officials met UPS and TNT Express representatives on Friday and "informed the companies that on the basis of UPS's current remedy proposal it is working towards proposing a prohibition decision."

UPS then told TNT it would not continue chasing the deal and that "formal termination of the merger protocol will occur upon receipt of the prohibition decision of the EC, which ...TNT Express deems inevitable," it said.

In June, UPS launched a bid to take over TNT Express, but the EU competition authorities announced a month later they would investigate the deal.

The EU said it was worried the proposed merger would reduce the number of competitors from four to three and lead to a highly concentrated market for domestic and international express delivery services on the European continent.

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GM loses global sales crown to Toyota

GENERAL Motors lost the global sales crown once again to Toyota in 2012, as its sales grew just 2.9 per cent to 9.2 million vehicles, the US auto giant says.

The American automaker, which briefly regained the crown after Toyota's supplies were shattered by the 2011 Japanese quake and tsunami, nonetheless remains at No.2 worldwide.

German rival Volkswagen, which aspires to be the world's biggest automaker by 2018, on Sunday reported an 11 per cent increase in 2012 sales to 9.07 million.

Toyota has forecast its 2012 sales will jump 22 per cent to 9.7 million vehicles.

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Mercedes takes aim at youth market

GERMAN auto giant Daimler is taking aim at the youth market with the compact, stylish - and lower priced - Mercedes CLA coupe, unveiled on the eve of the Detroit auto show.

A sleek silhouette delivers world-leading aerodynamics, while frameless doors offset the sporty, muscular look of a bold grill and sweeping curves in the body.

"The CLA is a style rebel," Mercedes design chief Gordon Wagener said.

"The dynamic design idiom is manifested in breath-taking proportions, muscular, flowing contours and sculptural surfaces."

The interior offers all the high-tech gadgets and luxurious features customers expect from a Mercedes, like a multimedia console that seamlessly integrates with the iPhone.

The powerful engine, smooth suspension and four-wheel drive also promise agility, power and an efficient drive.

It will also be outfitted with the latest in collision prevention, including drowsiness detection and a radar that warns drivers of obstacles even at very slow speeds and will initiate braking if the driver is distracted.

"With the new CLA-class, we will open a completely new gateway to the Mercedes brand here in the US," Mercedes sales chief Joachim Schmidt told reporters.

"Our goal is to repeat the success story of the CLS in a new segment."

The CLA is aimed at both the youth market and the "young at heart" who value "trendy and high-class design, quality and refinement and personal expression through authentic brands," Schmidt said.

Set to hit US dealerships in April, Daimler will launch an advertising blitz - and announce the price - during the Superbowl on February 3, which is being held at the Mercedes-Benz Superdome in New Orleans.

The vehicle will be sold worldwide and Daimler chief Dieter Zetsche said it will be a "great car" for China and will also do well in other parts of Asia and Europe.

He did not disclose a sales target.

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Luxury, sports cars in Detroit spotlight

LUXURY and sports cars will be in the spotlight when the Detroit auto show opens Tuesday (AEDT) amid booming sales and renewed optimism as the US economy rebounds from a deep downturn.

"The mood is going to be pretty good," said Dave Sergeant, an analyst with JD Power. "The industry is coming off a reasonably good year and this year should be even better."

US sales are expected to rise to between 15 and 16 million vehicles this year after jumping 13 percent to 14.5 million vehicles in 2012, the biggest yearly gain since 1984.

The Detroit Three carmakers are raking in huge profits again after years of painful restructuring and a renewed focus on the product side of their business.

Their Asian and European counterparts are also investing heavily in the United States as they jostle for position in the highly competitive market and look for a place to grow sales amid a slowdown in China and Brazil and the collapse of European demand.

"The product is the best consumers have seen in a long time," Jesse Toprak, an analyst with the automotive site TrueCar.com, told AFP.

GM's new Corvette was the most hotly anticipated and select journalists were given a sneak preview at a lavish preview Sunday night.

The muscular and sculpted Corvette Stingray shares a name with the iconic 1963 model but is an entirely new vehicle, sharing only two parts with the previous generation Corvette.

"The soul of our company is sitting right here in Corvette," GM North America president Mark Reuss said.

"This car is the reason I work at GM."

Daimler also offered a sneak peak at an entirely new car, the compact, stylish - and lower priced - Mercedes CLA coupe which is aimed squarely at the youth market.

"The CLA is a style rebel," Mercedes design chief Gordon Wagener said.

"The dynamic design idiom is manifested in breath-taking proportions, muscular, flowing contours and sculptural surfaces."

Both vehicles will compete with luxury sports cars from Audi, BMW and a new muscle car from specialty carmaker Shelby once the show officially starts Monday.

Pickup truck fans will also have plenty of new models to feast their eyes upon, with the new Chevy Silverado and a concept (or pre-production) truck from Ford ahead of the 2015 launch of the next version of its top-selling F-series.

Honda will be testing out a concept for a smaller sport utility vehicle, as will Ford's luxury Lincoln brand. There will be plenty of new hulks on the floor as well, especially from Chrysler's Jeep and Dodge brands.

And even the more down-market vehicles are going to be decked out with features that were once reserved for luxury brands, like collision avoidance technology and heated side mirrors.

"Those features tend to be fairly profitable because once they get into the mass market they're not that expensive to install and consumers will pay fairly well for them," said Jeremy Anwyl, vice chairman of automotive site Edmunds.com.

Drivers looking for improved fuel economy will have a wide range of options as automakers push hybrids, diesel and electric vehicles, and boost the efficiency of standard gasoline engines ahead of upcoming tough new government standards.

But with hybrids and other alternative powertrains still only making up about three percent of the US market, carmakers are going to have to work harder on their green car pitches.

There is hope that younger buyers could help push demand for green cars to the point where it would have a significant impact on fuel consumption.

"While they're not necessarily going to gravitate to and make a buying decision because of 'green,' they have a preference towards new technologies," said Joe Vitale, an auto analyst with Deloitte.

"We think this generation may be the generation that creates a tipping point to an electrified world."

More than 50 new models will be revealed on Monday and Tuesday as automakers vie for the attention of some 6,000 journalists from around the world.

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Militants post picture of French commando

SOMALIA'S al-Qaeda-linked al-Shabab militants have posted a picture on their Twitter account of an alleged French commando chief killed in a botched hostage rescue operation.

"French commander killed during botched rescue operation in Bulo-Marer," read an accompanying caption to the photo.

The picture showed the body of the alleged commander, dressed in a black button-up shirt and khaki pants, lying face up on an orange surface next to presumably his combat gear. A small crucifix showed from his neck.

A second photo, also posted on al-Shabab's Twitter feed, showed the dead man in the same position but with bullet magazines and an assortment of guns and other tools of war strewn around and on top of him.

"Francois Hollande, was it worth it?" read a caption accompanying the second picture.

France's military operation on Saturday to free a French spy held hostage by al-Shabab since July 2009 was a failure, with another French soldier killed and the fate of the hostage unclear.

On Saturday, French Defence Minister Jean-Yves Le Drian said one French soldier had died and another had gone missing during the raid, adding that 17 guerrillas had been killed.

He did not say a commander had gone missing.

The French defence ministry had earlier on Monday expressed fears the Somali Islamists would put on display the bodies of the French soldier and the hostage, who France believes was killed during the operation.

"All indications unfortunately lead us to believe that the al-Shabab are preparing to organise a disgraceful and macabre display" of the bodies, Le Drian said.

The gruesome image recalled the incident in 1993 when the bodies of US soldiers were dragged through the streets and mutilated in Mogadishu, after a battle between US forces and Somali militia fighters.

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Victorian firefighter dies in Tasmania

A 60-YEAR-OLD Victorian firefighter has been found dead near a hamlet on the Tasman Peninsula where he was conducting a backburn.

Police say the body of the man, part of a Victorian contingent assisting the Tasmania Fire Service, was found near Taranna.

He was preparing for backburning operations at Waterfall Bluff, which is about two to three kilometres from the active fire edge.

Workers were sent to the area after the man failed to make a scheduled call-in.

Police say there appears to be no suspicious circumstances at this stage.

The Department of Sustainability and Environment (DSE) said the dead man was from Gippsland.

A DSE statement from its secretary Greg Wilson and chief fire officer Alan Goodwin said the firefighter's family had been notified and no further personal details were available at this time.

They had offered their sincere condolences to the family and support had been offered.

DSE representatives have been sent to Tasmania to support crew members still on the ground.

Police are investigating the death and will prepare a report for the coroner.

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Steam train chugs through London's Tube

TOURISTS waiting for their train to Madame Tussauds in London have been treated to an unusual sight: a 19th century steam engine chugging down the tracks.

Officials sent the Met Locomotive 1, built in 1898, down London's Metropolitan Line to mark the 150th anniversary of the Tube network, the world's oldest.

Hundreds of train fans, costume-wearing enthusiasts and curious onlookers gathered at platforms and bridges across the city to watch as the locomotive travelled non-stop from Kensington Olympia station in the west to Moorgate station in central London.

London Mayor Boris Johnson was among the invited passengers aboard the historic black-and-red locomotive. He said the trip was "romantic", describing "thick clouds of white steam going past and then bits of soot coming through from the engine".

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Beijing choked by third day of smog

BEIJING has endured a third day of pollution at hazardous levels, as authorities warned a thick cloud of smog may not lift from the Chinese capital until the middle of the week.

While those venturing outside wore face masks, dissident Chinese artist Ai Weiwei went one step further, posting pictures of himself on Twitter in a gas mask.

As the dense smog shrouded large swathes of northern China, flights were cancelled and traffic delayed as visibility was reduced to 100 metres in some areas.

The dangerously poor air quality was highlighted by a steady stream of news broadcasts on state television, many of which warned residents against venturing outside.

The pollution also provoked China's huge number of microbloggers to take to the internet, with some high-profile web users calling for a re-evaluation of China's rampant modernisation.

Rapid economic growth has led to a dramatic increase in the consumption of coal and clogged city streets with cars.

"The foreign media is laughing at us. I agree with their laughter," said Hu Xijin, the editor of the state-run Global Times newspaper on Weibo, China's version of Twitter.

"This is a warning to the Government and Beijing's citizens. We have to think about what kind of modernisation we want and how to manage it."

Hu said the pollution issue would be on the front page of his newspaper on Monday.

Beijing-based Ai, 55, an outspoken critic of China's communist government, posted three pictures of himself on Twitter standing against a white background wearing a gas mask, his beard frizzing out beneath. But he did not make any verbal comment.

Beijing's municipal environment warning centre issued its second alert in two days, warning people to avoid outdoor physical activity.

The centre also urged government officials to set an example to other residents, by not using their cars.

Air quality in Beijing showed small airborne particles with a diameter small enough to deeply penetrate the lungs at a reading as high as 993 micrograms per cubic metre on Saturday evening, the warning centre said.

The World Health Organisation says the figure for such particles, known as PM2.5, should ideally be no more than 25 micrograms per cubic metre.

High levels have been linked to health problems including respiratory disease, heart disease and lung cancer.

Official PM2.5 figures have only been monitored in China's major cities since the beginning of last year.

The lack of official data makes it difficult to compare the recent smog with previous cases of pollution, said Ma Jun, director of the Beijing-based Institute of Public and Environmental Affairs.

"But it is interesting to see that residents have been warned about the dangers of pollution by official media," Ma told AFP.

"This has never happened before, and is a result of the transparency that we now have with the figures."

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French strike Islamist bases in Mali

FRANCE'S air force has launched fresh strikes in northern Mali, targeting a camp used by jihadist fighters and a weapons depot for the Islamist insurgent group Ansar Dine, officials and residents say.

Witnesses said French fighter jets struck a camp used by Islamist militants in Lere, about 150 kilometres north of Konna, a key central town that government troops recaptured with French aerial backing on Friday.

"The Lere camp, which was abandoned by the Malian army and had been used by the Islamists, was completely razed by air raids," a local official said, speaking from Mauritania where he took refuge.

Several other refugees said French air raids also struck weapons and ammunition depots used by Ansar Dine (Defenders of Faith), a group whose leaders are connected to al-Qaeda in the Islamic Maghreb (AQIM).

Security sources said Sunday's air strikes also hit targets near Douentza and Nampala.

France has said its intervention was to stop a southward advance by Islamist insurgents that threatened the capital Bamako.

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Depardieu slams Russia protest movement

FRENCH actor turned Russian national Gerard Depardieu has accused President Vladimir Putin's opposition of lacking vision and defended the Kremlin's treatment of the Pussy Riot protest punks.

Depardieu received a Russian passport at a January 6 dinner with Putin that followed a bitter and very public fight with the French authorities over a disputed new tax on the super-rich.

The screen star has denied seeking to profit from Russia's flat 13 per cent tax on incomes and has never specified whether he intends to live in Russia long term.

But he has been feted as a hero by Russian state media for offering the Kremlin a chance to highlight the benefits of its policies in the face of broad criticism of Putin abroad.

Both Putin and Depardieu refer to each other as friends and the French actor offered a severe criticism of those who oppose the Russian leader's 13-year rule.

"The Russian opposition has no program - it has nothing," he told Rossiya state television's weekly analytical program in comments carried by local news agencies.

"Unfortunately, the masses are stupid. Only the individual is beautiful," Depardieu was quoted as saying in remarks translated to Russian from French.

Russia's first mass post-Soviet rallies emerged a year ago in response to a fraud-riddled December parliamentary poll in which the ruling party barely hung on to power.

The opposition held a series of subsequent protests that reached up to 120,000 people at their height.

But Putin's thumping presidential return in May cast a pall over the movement and just over 20,000 turned out for a march held on Sunday in protest against a new law banning adoptions by American families.

Depardieu said the opposition had "very smart people" such as former chess champion Garry Kasparov in its ranks.

"But that is good for chess and not much else," said the star of films such as Cyrano de Bergerac and the Asterix & Obelix series.

He also heavily criticised the anti-Putin protest stunt that the Pussy Riot all-female punk band performed last year in Russia's main cathedral.

Two band members are serving two-year sentences in Russia's notorious manual labour camps.

Depardieu almost directly repeated Putin's argument that the band members would have been treated much more severely had they gone to an Arab country and performed in a mosque.

"Imagine if these ladies walked into a mosque; they would not come out alive," said the actor.

"But when I say such things in France, I am considered an idiot."

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France on alert over Mali backlash fears

FRANCE is in a state of high alert with military action against Islamic radicals in Mali and Somalia triggering fears of a backlash on home soil.

Armed troops patrolled rail and subway stations in Paris and security around airports and public buildings was stepped up as Defence Minister Jean-Yves Le Drian admitted the authorities were monitoring suspected Islamic militants based in France.

"The terrorist danger is permanent, it is not a new thing," Le Drian said on Sunday. "But we have to be very careful and take every precaution necessary in what is a very sensitive situation."

Le Drian acknowledged there were Islamic radicals based in France who are thought capable of becoming involved in terrorist actions, but he stressed that these individuals were subject to tight surveillance.

The existence of a home-grown Islamist threat in France became clear last year when Mohamed Merah went on a shooting spree in and around the southern city of Toulouse, killing three French paratroopers, a Rabbi and three Jewish schoolchildren before being killed himself in a police siege.

The Merah killings were followed by the dismantling, in October, of a suspected Islamist "terrorist cell" that prosecutors described as the most serious internal threat the country has faced since the Algerian-based GIA carried out a string of deadly bombings in the 1990s.

It was a splinter group of the GIA that evolved into what is now known as al-Qaeda in the Islamic Maghreb, the main organisation pulling the strings in northern Mali.

The increased security came as French warplanes bombarded Islamists in central Mali for a third day and in the aftermath of a botched commando raid in Somalia to free a French intelligence agent held there since 2009.

One French soldier died in the operation, another is missing presumed dead and the Paris authorities have also said they believe the hostage has been killed.

At least 17 Islamist guerillas were killed in the operation, according to French sources, and witnesses said at least eight civilians were caught in the crossfire.

In Mali, the army claimed that up to 100 Islamist fighters were killed during the liberation of the central town of Konna on Friday.

Ansar Dine, one of the Islamist groups which controls the north of Mali, and al-Shabab, al-Qaeda's local franchise in Somalia, have both warned that France will face retaliation over these deaths.

"In the end, it will be the French citizens who will inevitably taste the bitter consequences of their government's devil-may-care attitude towards hostages," al-Shabab said in a statement.

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