Aust will never accept boat people: Rudd

THE first group of asylum seekers to be dealt with under Labor's new hardline approach to boat arrivals could be transferred to Papua New Guinea for processing and possible settlement within weeks.

Prime Minister Kevin Rudd declared the policy on Friday, saying the new regime to deny settlement in Australia to asylum seekers who paid people smugglers for unauthorised passage would begin immediately.

The surprise announcement was condemned by refugee advocates as inhumane and praised by the opposition as a "very promising development".

Mr Rudd's hardline approach means people arriving by boat and without a visa will be sent to Australia's Manus Island facility in Papua New Guinea for assessment and, if found to be refugees, they will be settled there.

The first transfers to Manus Island are expected within weeks, following the arrival on Friday of a boat carrying 80 people at the Cocos (Keeling) Islands.

"From now on, vessels that are intercepted will have the new rules apply to them and it will be a couple of weeks because of the health checks ... before the first transfers take place," Immigration Minister Tony Burke said.

The plan is the key plank of a new regional settlement arrangement signed on Friday by the PNG and Australian governments and better positions Labor to go the federal election with a border protection solution.

"Any asylum seeker who arrives in Australia by boat will have no chance of being settled in Australia as a refugee," Mr Rudd, who was flanked by his PNG counterpart Peter O'Neill, said in Brisbane.

"If they are found to be genuine refugees, they will be resettled in Papua New Guinea."

If they are not found to be genuine refugees, they would be repatriated or sent to a safe third country.

The Manus facility currently houses 215 people in tents and shelters and living conditions are described as harsh.

A permanent 600-bed facility is due for completion in January but further upgrades are now expected.

"This is a very hard-line decision," Mr Rudd said.

"But our responsibility as a government is to ensure that we have a robust system of border security and orderly migration."

Mr Rudd said there would be no cap on the number of people who can be transferred to PNG and the new arrangements will apply for the next 12 months and be subject to annual review.

But if the plan leads to a "significant change" in the number of people arriving by boat, the government "stands ready to progressively increasing our humanitarian intake towards 27,000".

"Our expectation ... is as this regional resettlement arrangement is implemented, and the message is sent loud and clear back up the pipeline, the number of boats will decline," Mr Rudd said.

In exchange for PNG's agreement, Australia will fund further aid initiatives, including redeveloping a major referral hospital in Lae and supply half the funding to reform PNG's university sector.

It will also support professional management teams in health, education and law and order.

Mr O'Neill said PNG had its own refugee issues, but he believed the deal would allow orderly processing.

"We believe strongly that genuine refugees can be able to be resettled in our country and within the region in the years to come," he said.

Mr Rudd acknowledged the new approach won't be smooth sailing and he expects the agreement could be challenged through the courts.

Opposition Leader Tony Abbott said Mr Rudd's plan was about processing.

"It is not about stopping the boats," he said.

Australian Greens Leader Christine Milne said the resettlement plan was "ruthless and repugnant".

She accused Mr Rudd of lurching so far to the political right he had "leap frogged" Mr Abbott.

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Oil prices ending week higher

OIL prices have advanced, building on the week's gains triggered by positive global economic data that boosts the outlook for crude demand.

New York's main contract, West Texas Intermediate (WTI) for delivery in August, rose 53 cents to $US108.57 a barrel - a fresh 16-month high point.

Brent North Sea crude for September meanwhile gained 34 cents to stand at $US109.04 a barrel in London midday trade.

WTI had jumped by $1.56 in value on Thursday to end at the highest level since March 1, 2012.

The big jump in New York crude accompanied similar gains for share prices on Wall Street after a sharper-than-expected drop in US jobless claims and an unexpected spike in regional manufacturing activity.

Markets have been supported also by this week's assurances from Federal Reserve chief Ben Bernanke that the bank's $85 billion-a-month bond-buying scheme would be kept in place as long as the world's biggest economy needed it.

"Better-than-expected US economic data are providing the WTI price with upward momentum and so is the sharp reduction of US crude oil stocks in past weeks," said Commerzbank analyst Carsten Fritsch.

The official crude inventories report by the US Department of Energy on Wednesday showed supplies in the United States fell by 6.9 million barrels in the week to July 12.

The drop, which comes during the summer driving season when Americans take to the roads for their holidays, beat the 2.2 million barrels estimated by analysts.

Analysts said oil prices would remain supported by signs of stronger demand in the United States, the world's top crude consumer, as well as fears of a disruption in Middle East supply caused by Egypt's political turmoil.

Oil prices have risen this week, also despite weak economic data out of China, the world's biggest consumer of energy.

China reported that economic growth slowed to a 7.5-percent pace in the April-June quarter, down from 7.7 percent in the previous three months.

The slower growth rate came in as expected, which analysts said might explain the lack of impact on the market.

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US spy claims hit German relations: Merkel

Two-thirds of Germans are unhappy with the Merkel government's handling of claims of US spying. Source: AAP

ALLEGATIONS of US spying in Germany and Europe have hit Berlin's relations with Washington, Chancellor Angela Merkel warns, as she attempts to stop the scandal from derailing her bid for re-election in September.

"Germany is not a police state. Germany is a land of freedom," Merkel said on Friday at her annual press conference, where she faced a barrage of questions about the claims over US communications surveillance.

"A friendship is founded on trust and in this case trust has been affected," she said, warning about the threat posed to Germany's relations with the United States by the allegations.

Until now, the claims of US spying have failed to dent Merkel's commanding lead in opinion polls.

But government officials are concerned that the publication of more damaging revelations could set back the chancellor's hopes of securing a third term in the September 22 election.

A survey published Friday on by the Infratest dimap pollsters showed two-thirds of Germans are unhappy with her government's handling of the claims.

This follows disclosures, believed to be from US whistleblower Edward Snowden, detailing how the US National Security Agency (NSA) was spying on allied governments and their citizens through the so-called PRISM program.

"German law on German soil", Merkel insisted.

She indicated that the key focus of the investigation into the allegations by several authorities in Berlin would be on whether any German laws had been broken by international intelligence agencies operating in Germany.

The chancellor also said her government's investigation into US surveillance activities in Germany would take some time to finish.

"The work is not complete," she said. "It is ongoing."

Her press conference coincided with a warning from Snowden's associates that new claims could be published shortly.

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Iraq suicide bomber kills 20 in mosque

A SUICIDE bomber has killed 20 people inside a crowded Sunni mosque north of Baghdad, police say, as Iraq struggles to contain its worst violence since 2008.

The bomber detonated explosives soon after entering the Abu Bakr al-Sadiq Mosque as the imam gave the Friday sermon in the town of Al-Wajihiyah, a police colonel said.

A doctor confirmed the toll from the blast which also wounded 40 people.

"I was sitting near the main entrance of the mosque when a huge explosion happened," sending dirt and objects flying, said Sinan Ghalib, who woke up in a hospital in the nearby city of Baquba with a serious wound in his left leg.

Omar Mundhir was also wounded in the leg by the explosion.

"I was sitting near the imam and the mosque was full of dozens of people when a big explosion happened, and the place went completely dark," Mundhir said, also in hospital.

"I found myself on the ground at the hospital later, with many other wounded" who were screaming and crying, he said.

Areas near Baquba have been hit by several attacks over the past few days, including a bombing on Tuesday that targeted worshippers leaving a Sunni mosque in Muqdadiyah, northeast of the city, killing four people and wounding 15.

Militants have targeted both Sunni and Shi'ite mosques in recent months, raising fears of a return to all-out sectarian conflict that killed tens of thousands of people in past years.

A bombing targeting a Shi'ite religious hall in north Baghdad earlier this month killed at least 15 people.

The latest unrest brings the number of people killed in violence this month to 457, and upwards of 2700 since the beginning of the year.

The death toll for the first 19 days of July alone has already surpassed the total for the entire month of June.

Most senior Iraqi politicians and religious leaders have remained silent about the current wave of violence.

Iraq has faced years of attacks by militants, but analysts say widespread discontent among members of its Sunni minority, which the government has failed to address, has fuelled this year's surge in unrest.

Iraqi Sunnis accuse the Shi'ite-led government of marginalising and targeting their community, including making unwarranted arrests and terrorism charges.

Protests that first broke out in Sunni-majority areas at the end of 2012, are still ongoing.

On April 23, security forces moved against protesters near the town of Hawijah in the north, sparking clashes that killed 53 people and sending tensions soaring.

More than 450 people have been killed each month from April to the present.

In addition to security problems, the government in Baghdad is also failing when it comes to addressing other basic issues.

Iraqis severely lack basic services, and face power shortages and cuts and widespread corruption.

Political squabbling has also paralysed the government, which has passed almost no major legislation in years.

AFP ldj

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Woman dies in head-on collision in NSW

A WOMAN has died in a head-on collision on the NSW north coast.

The woman was the sole occupant of a car that collided with another vehicle on the Pacific Highway at Halfway Creek, south of Grafton, at about 5.15pm (AEST) on Friday.

She died from injuries sustained in the crash, a NSW Police spokeswoman told AAP.

The elderly couple in the other car sustained minor injuries and were taken to hospital.

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Dubai rewards weight losers with gold

SHEDDING weight in Dubai is being rewarded in gold under a new initiative by the municipality of the Gulf emirate aimed at fighting obesity, local newspapers report.

"Your Weight in Gold" is the title of a campaign promising one gram of gold for every kilo shed, provided a minimum of two kilos of weight are lost by August 16.

The campaign coincides with the Muslim fasting month of Ramadan, which ends before mid-August.

During Ramadan, the faithful refrain from eating, drinking and smoking between dawn and sunset.

But many tend to tuck in heartily after dark, despite warnings that overindulgence can be bad for the health.

The three campaign-winning losers will each receive a gold coin worth 20,000 dirhams ($A5,930) through a lucky draw.

Other weight losers will share gold coins worth 200,000 dirhams.

Participants will be required to use scales installed in public parks, will receive guidance from dietitians and will have to pledge not to use unhealthy methods to lose the weight.

Many Gulf countries are struggling to reduce the level of obesity among their populations.

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