'Vodka pipeline' to Kyrgyzstan plugged

KYRGYZ customs officials have shut down a pipeline that had been used to apparently pump thousands of litres of vodka from Kazakhstan to Kyrgyzstan under a river, Kyrgyz police say, according to the Akipress news agency.

The 20-centimetre-thick, half-kilometre-long pipe had been laid beneath the border river Chu, said the police official from the northern Kyrgyz city of Tokmok.

It was equipped with multiple valves and lay on a track along the river's bottom.

"We assume that thousands of litres of alcohol were smuggled with it, primarily vodka," said the police officer.

It is believed the alcohol was smuggled this way for months.

The pipe was discovered during a routine inspection.

No arrests have yet been made.

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Protesters dragged out of Egypt mosque

EGYPTIAN police have dragged supporters of ousted president Mohamed Morsi out of a Cairo mosque, where crowds tried to attack them.

Morsi loyalists had refused to leave the mosque, which was surrounded by security forces, including police who fired in the air to keep mobs from attacking the Islamists.

Witnesses said that Egyptian security forces stormed the al-Fateh mosque after firing tear gas at hundreds of supporters of the country's ousted president barricaded inside.

Local journalist Shaimaa Awad said on Saturday that security forces rounded up protesters inside the mosque, located in Cairo's central Ramses Square.

The sound of gunfire could be heard in the background.

Egypt's official news agency MENA reported that gunmen opened fire on security forces from the mosque's minaret.

Local television stations broadcast live footage of soldiers firing assault rifles at the minaret.

The mosque served as a field hospital and morgue following clashes on Friday in the area.

The protesters barricaded themselves inside overnight out of fears of being beaten by vigilante mobs or being arrested by authorities.

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World powers condemn Egypt bloodshed

EGYPT'S military rulers are facing international condemnation over the bloody crackdown on Muslim Brotherhood protesters, with France warning of the threat of "civil war" and Turkey demanding UN action.

At least 525 people were killed in Wednesday's assaults on two Cairo protest camps of supporters of ousted Islamist president Mohamed Morsi in the worst violence the country has seen in decades.

The United States led global condemnations overnight against the "deplorable" violence, while Paris, London and Berlin have summoned Egypt's ambassadors to voice their strong concern.

Turkey's Prime Minister Recep Tayyip Erdogan on Thursday called for an urgent UN Security Council meeting over Egypt's "massacre" of Morsi supporters.

China was characteristically muted, calling for "maximum restraint" from all parties, while fellow Security Council permanent member Russia only urged tourists to avoid trips to Egypt.

Only two Gulf states that have cracked down on Islamist groups within their own borders initially voiced support for the Cairo military leaders.

French President Francois Hollande said "everything must be done to avoid a civil war" in Egypt, while his government conveyed France's "great concern over the tragic events" to Egypt's envoy.

"France is committed to finding a political solution and calls for elections to be held as soon as possible, in line with the commitments made by Egypt's transitional authorities," said a statement.

Germany also summoned the Egyptian ambassador, a day after its Foreign Minister Guido Westerwelle urged all sides to renounce violence and return immediately to negotiations.

"On the orders of Foreign Minister Westerwelle, the ambassador was told the position of the German government in no uncertain terms," said a foreign ministry spokeswoman.

Turkey's Erdogan, a Morsi supporter, told reporters in Ankara that "the Security Council of the United Nations should convene quickly to discuss the situation in Egypt".

"This is a very serious massacre ... against the Egyptian people who were only protesting peacefully," he added, criticising "the silence" of the global community in the face of the bloodshed.

The United States did not initially criticise the overthrow of Morsi, Egypt's first democratically elected and Islamist leader, and has avoided using the term "coup," which under US law would have halted some $US1.3 billion in annual military aid to Cairo.

But US Secretary of State John Kerry's comments, in which he called for elections, appeared to fully recant his previously expressed support for Egypt's military-backed government.

"Today's events are deplorable and they run counter to Egyptian aspirations for peace, inclusion and genuine democracy," he said.

Denmark suspended aid worth four million euros to Egypt "in response to the bloody events and the very regrettable turn the development of democracy has taken", development aid minister Christian Friis Bach told the Berlingske newspaper.

Further afield, Pakistan expressed its "dismay and deep concern" over the loss of innocent lives and called the events "a major setback for Egypt's return to democracy".

The Philippines urged its 6000 nationals in Egypt to leave the country and raised the alert level because of "the escalating civil unrest and insecurity".

The United Arab Emirates and Bahrain separately voiced support for Egypt's military leaders, saying it was the state's duty to restore order.

The Emirati foreign ministry affirmed its "understanding of the sovereign measures taken by the Egyptian government after it had practised maximum self-restraint during the preceding period".

The Gulf state, where dozens of Islamists have been jailed for plotting to overthrow the regime, criticised what it said was the "insistence of political extremism groups to make speeches of violence and incitement ... that led to (Wednesday's) sad events".

Another Gulf state, Bahrain, which is facing an uprising led by the Shi'ite majority against the Sunni regime, said that the "measures taken by Egyptian authorities to restore peace and stability were to protect the rights of the Egyptian citizen, which the state is obliged to do".

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Egypt Islamists call new march, 525 dead

Egypt's health ministry has raised the death toll from Wednesday's nationwide violence to 278. Source: AAP

ISLAMISTS have vowed to rally in support of deposed president Mohamed Morsi despite a violent crackdown that sparked Egypt's worst day of violence for decades, with more than 500 people killed.

As the death toll from the carnage soared, condemnation of Wednesday's crackdown on two Muslim Brotherhood protest camps in Cairo poured in, with Britain, France and Germany summoning the country's ambassadors to express concern.

The Brotherhood, the Islamist movement from which Morsi hails, said a march was planned on Thursday from the Al-Iman mosque in the capital "to protest the death of their relatives".

The call came after a tense night, following the army-backed interim government's decision to impose a month-long, nationwide state of emergency and curfews in 14 provinces.

In Cairo, trucks cleared debris from the charred sites of the Rabaa al-Adawiya and Nahda square protest camps, occupied for weeks by Morsi loyalists, paralysing the area.

Posters of Morsi were strewn next to burnt tins of food, as light traffic returned to the streets.

The health ministry continued to update its toll, saying at least 525 people had been killed across the country on Wednesday, including 43 police.

Despite the violence, Egypt's press trumpeted the end of the pro-Morsi demonstrations, which had occupied two Cairo squares since the military ousted the Islamist president on July 3.

"The nightmare of the Brotherhood is gone," the daily Al-Akhbar's front page headline read.

"The Brotherhood's last battle," added Al-Shorouk.

The newspapers carried photos of protesters brandishing weapons and throwing stones, but none from makeshift morgues where dead protesters were lined up in rooms slick with blood.

Residents of Rabaa al-Adawiya said the tension and paralysis caused by the protests had put lives on hold.

"We were hearing gunshots all day ... (The dispersal) had to happen. People here were not living," said Omar Hamdy, 23.

At least four churches were attacked as police broke up the protests, with Christian activists accusing Morsi loyalists of waging "a war of retaliation against Copts in Egypt".

The day's violence was Egypt's worst in decades, exceeding even that seen during the 18-day uprising that ousted president Hosni Mubarak.

An AFP correspondent counted at least 124 bodies in makeshift morgues in the Rabaa al-Adawiya protest site and the Brotherhood spoke of 2200 dead overall and more than 10,000 wounded.

The Islamist movement remained defiant on Thursday, with spokesman Gehad al-Haddad saying demonstrations would continue.

"We will always be non-violent and peaceful. We remain strong, defiant and resolved," he tweeted. "We will push forward until we bring down this military coup."

Morsi loyalists have insisted their demonstrations are exclusively peaceful, but an AFP reporter saw several protesters carrying weapons at Rabaa on Wednesday.

The violence prompted vice-president and Nobel laureate Mohamed ElBaradei to resign, saying he was troubled over the loss of life, "particularly as I believe it could have been avoided".

The dramatic assault on the sit-ins began shortly after dawn on Wednesday, with security forces firing tear gas before storming the sites.

The operation surprised many, coming after officials described plans to gradually disperse the protests over several days in a bid to avoid violence.

Some Morsi supporters were eventually able to leave the Rabaa site through a safe passage, flashing victory signs as they left.

By evening, a security official said Rabaa al-Adawiya was "totally under control".

In the smaller of the protest camps, at Al-Nahda square in central Cairo, police said they had control of the area after just two hours.

Europe's leading powers, along with Iran, Qatar and Turkey, strongly denounced the use of force by the interim government.

Turkish Prime Minister Recep Tayyip Erdogan Thursday called for an urgent UN Security Council meeting over the crackdown, while Denmark announced it has suspended development aid to Egypt.

The White House said Washington, which provides Egypt with $US1.3 billion in annual military aid, "strongly condemns" the violence against the protesters and opposed the imposition of a state of emergency.

But Egypt's interim prime minister Hazem al-Beblawi praised the police for their "self-restraint" and said the government remained committed to an army-drafted roadmap calling for elections in 2014.

The violence was not confined to Cairo, with clashes between security forces and Morsi loyalists breaking out in the northern provinces of Alexandria and Beheira, the canal provinces of Suez and Ismailiya, and the central provinces of Assiut and Menya.

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US consumer prices up, inflation mild

US consumer prices rose slightly last month as gas costs increased at a slower pace. Overall, the figures showed that inflation remains mild.

The Labor Department says the consumer price index rose 0.2 per cent in July, after a 0.5 per cent gain in June. Gas prices rose only 1 per cent last month, after jumping 6.3 per cent in June. In the past 12 months, the index has increased 2 per cent.

Excluding food and gas costs, which are volatile, core prices also rose 0.2 per cent. They have increased just 1.7 per cent in the past year. That's below the Federal Reserve's annual inflation target of 2 per cent.

Tame inflation has enabled the Fed to pursue low-interest rate policies in an effort to stimulate growth. Higher inflation would pressure the Fed to raise rates.

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Fewer Americans seek jobless benefits

THE number of Americans seeking unemployment benefits dropped 15,000 last week to a seasonally adjusted 320,000, the fewest since October 2007 - a sign of dwindling layoffs and steady if modest job growth.

The Labor Department said on Thursday that the less volatile four-week average fell 4000 to 332,000, the fewest since November 2007 and the fifth straight decline.

Companies are laying off fewer workers, a trend that has lowered applications for unemployment benefits 14 per cent this year. But hiring is still sluggish, resulting in only modest net job growth.

At the depth of the recession in March 2009, applications for unemployment benefits numbered 670,000. They have fallen steadily ever since.

"The underlying story in jobless claims is one of a continued improvement," Yelena Shulyatyeva, an economist at BNP Paribas, wrote in a note to clients. But "we need to see the pace of hiring pick up in order for payroll growth to accelerate from its current pace."

Nearly 4.6 million Americans received unemployment benefits in the week that ended July 27, the latest period for which data are available. That's about 66,000 more than in the previous week but nearly 20 per cent less than a year ago.

The Labor Department says layoffs have averaged 1.6 million a month through June, fewer than the monthly average of nearly 1.8 million in the pre-recession year 2006.

Hiring hasn't recovered as quickly. Employers hired an average of 4.3 million people a month this year through June, well below the 2006 monthly average of 5.3 million. As a result, net job growth is still subpar.

Employers have added an average of 192,000 jobs a month this year. The unemployment rate has declined to 7.4 per cent. That's still well above the 5 per cent to 6 per cent range associated with a normal economy.

A weak economy has given employers little reason to hire freely even if they've stopped cutting jobs. The economy grew at a sluggish 1.4 per cent annual rate in the first half of the year, hobbled by tax increases, federal spending cuts and global economic weakness.

Many economists foresee growth accelerating in the second half of the year to an annual rate of roughly 2.5 per cent. They expect consumer spending to pick up as the effects of the tax increases and spending cuts diminish. Improving home sales and higher stock prices are also expected to make people feel more confident about their finances and more willing to spend.

On Tuesday, the government reported that US retail sales grew 0.2 per cent in July from June despite a drop in car sales. "Core" retail sales, which exclude the volatile auto, gas and building supply categories, rose 0.5 per cent. That was the best gain since a similar increase in December.

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Wal-Mart cuts profit outlook

WAL-MART Stores Inc is cutting its annual profit outlook as the world's largest retailer continues to deal with a tough economy at home and abroad.

Wal-Mart reported also second-quarter results on Thursday that missed Wall Street estimates.

The US-based retailer says second-quarter profit rose 1.3 per cent to $US4.07 billion ($A4.49 billion), or $US1.24 per share, for the three months ended July 31. That compares with $US4.02 billion, or $US1.18 per share, a year earlier.

Net sales rose 2.4 per cent to $US116.2 billion.

Analysts were expecting earnings of $US1.25 per share on revenue of $US118.09 billion.

Revenue at stores open at least a year at Wal-Mart's namesake business fell 0.3 per cent. That's considered an important measure of a retailer's performance.

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Cairo awash in blood as police storm camps

One person has been killed in Cairo as clashes over Egypt's ousted president Mohamed Morsi erupted. Source: AAP

SECURITY forces have stormed two huge Cairo protest camps occupied for weeks by supporters of Egypt's ousted president Mohamed Morsi, leaving at least 124 people dead in a crackdown that turned into a bloodbath.

As clashes raged in the capital on Wednesday, three churches were attacked in central Egypt, with Christian activists accusing Morsi loyalists of waging "a war of retaliation against Copts in Egypt".

Hours after the first tear gas canisters rained down on tents of protesters in the sprawling Rabaa al-Adawiya camp in east Cairo, an AFP correspondent counted at least 124 bodies in makeshift morgues.

In a field hospital, its floors slippery with blood, doctors struggled to cope with the casualties, leaving the hopeless cases, even if still alive.

The Muslim Brotherhood, from which Morsi emerged, said that 2200 people had been killed and over 10,000 injured as authorities confirmed 56 deaths in Wednesday's violence.

Security officials had spoken of a gradual dispersal of the sit-ins over several days, but the dramatic descent on the squares shortly after dawn came as a surprise to many.

Al-Azhar, Sunni Islam's main seat of learning, which sided with the military in its overthrow of Morsi on July 3, distanced itself from the crackdown.

"Al-Azhar stresses to all Egyptians that it did not know about the methods used for the dispersal of the protests except through media channels," Grand Imam Ahmed al-Tayyeb said in a televised statement.

Witnesses and an AFP correspondent said after firing tear gas, security forces surged into Rabaa al-Adawiya, sparking pandemonium among the thousands of protesters who had set up the camp soon after Morsi was ousted.

Men in gas masks rushed to grab each canister and dunk them in containers of water, as the main stage near the mosque of the camp blared Islamic anthems and protesters chanted "Allahu Akbar" (God is great).

Clashes quickly erupted between protesters and security forces on the outskirts of the camp, with automatic fire reverberating across the square.

Protest leaders wearing gas masks stood defiantly on a stage while crowds of people wearing face masks stood amid the swirling tear gas as bulldozers began dismantling the camp.

In the smaller of the protest camps at Al-Nahda square in central Cairo, police said they took control of the square after two hours.

Television footage showed flattened tents, as women and children flanked by police and army troops were led out of the square.

Dozens rounded up in the dispersal were shown sitting on the ground, handcuffed and surrounded by security forces.

The violence came amid international appeals for calm.

Berlin called on all sides to renounce violence and return to negotiations and Britain, Iran and Qatar condemned the use of force by Egyptian police.

It was a dramatic turn of events for the Muslim Brotherhood, who just over a year ago celebrated Morsi's win as Egypt's first elected president.

Morsi's Muslim Brotherhood urged Egyptians to take to the streets in their thousands to denounce the "massacre".

"This is not an attempt to disperse, but a bloody attempt to crush all voices of opposition to the military coup," Brotherhood spokesman Gehad al-Haddad said on Twitter.

The Rabaa al-Adawiya protest camp, where several Brotherhood leaders had been staying, "is calling on Egyptians to take to the streets to stop the massacre", Haddad said.

But the anger against the Islamist movement was evident on Wednesday as residents of several neighbourhoods clashed with Morsi loyalists.

In Cairo, supporters of the deposed president blocked several roads in the central Mohandesseen neighbourhood, and were working to set up a new protest camp there, witnesses said.

Police were deployed in the area where tear gas was fired and gunshots heard.

Clashes also erupted between security forces and Morsi loyalists in the northern provinces of Alexandria and Beheira, the canal provinces of Suez and Ismailiya and the central provinces of Assiut and Menya.

In Menya, witnesses said the Saint Ibram and Virgin Mary church and the Saint Mina church were torched.

Assailants also threw firebombs at Mar Gergiss church in Sohag, a city with a large community of Coptic Christians who comprise up to 10 per cent of Egypt's 84 million people, causing it to burn down, the agency said.

Coptic Pope Tawadros II, together with Al-Azhar's Tayyeb, had supported the military and sat by army chief Abdel Fattah al-Sisi when he announced that Morsi had been deposed and laid out a new political roadmap for the country.

As authorities struggled to contain the unrest in the country, Egypt's railway authorities announced that all trains had been grounded to prevent protesters from moving outside of Cairo and reassembling.

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Sailors feared dead in Indian sub blast

A diesel-powered Indian submarine has exploded in Mumbai, leaving 18 sailors missing. Source: AAP

INDIA'S navy says all 18 sailors on board a submarine which exploded and sank are feared dead, and admitted the incident had left a "dent" in the country's defences.

The fully-armed INS Sindhurakshak, returned by original manufacturer Russia earlier this year after a major refit, exploded in flames in Mumbai shortly in the early hours of Wednesday and sank in a military shipyard.

The disaster is thought to be the Indian navy's worst since the sinking of a frigate by a Pakistani submarine in 1971. Defence Minister A.K. Antony described the explosion as the "greatest tragedy in recent time".

"I feel sad about those navy personnel who have lost their lives in service of the country," he told reporters in New Delhi.

Chief of naval staff D.K. Joshi said no sign of life had been detected on board even after divers managed to enter through the main hatch in a bid to refloat the vessel.

"While we hope for the best, we have to prepare for the worst," he told reporters in Mumbai, adding that there was a possibility some crew might have found air pockets but "the indicators are negative.

"It is certainly a dent on Indian navy's submarine capabilities for the time being," he added.

The blast came days after New Delhi trumpeted the launch of its first domestically-produced aircraft carrier and the start of sea trials for its first Indian-made nuclear submarine.

The world's biggest democracy has been expanding its armed forces rapidly to upgrade its mostly Soviet-era weaponry and respond to what is perceived as a growing threat from regional rival China.

Amateur video footage showed a fireball in the forward section of the Sindhurakshak, where torpedoes and missiles are stored as well as the battery units.

"There were two to three explosions and the night sky lit up briefly," eyewitness Dharmendra Jaiswal told AFP.

Joshi said there had been an initial fire which appeared to have sparked a big explosion as weaponry ignited.

"The basic question is what caused the fire and explosion. We do not have an answer to that question as of now," he said.

A board of inquiry would probe all possible explanations including sabotage, but "the indicators at this point of time do not support that theory", he said.

P.S. Rahangdale, an off-duty firefighter who rushed to the scene, told a local television channel that the Sindhurakshak "was totally on fire" and was berthed next to another submarine.

"Because of timely intervention of my team and resources and navy's resources we could save that second submarine," he said.

Other sailors on vessels berthed nearby were admitted to a navy hospital in Mumbai with burns.

In February 2010, the Sindhurakshak suffered a fire while docked in Visakhapatnam city in southern India, killing a 24-year-old sailor and leaving two others with burns.

A spokesman for the Russian Zvyozdochka company which overhauled the Sindhurakshak's weapons, navigation and power generator systems said India raised no objections about the vessel when it was returned after testing in April.

The submarine, whose name means "Protector of the Seas" in Hindi, is still covered by a Russian warranty and eight Zvyozdochka employees are in Mumbai, the spokesman said.

"Zvyozdochka is prepared to render its full assistance in the investigation and search for the causes of the accident," the spokesman told the ITAR-TASS news agency.

The submarine was built in 1997 in Saint Petersburg and had completed 1000 dive hours since returning after its refurbishment.

Rahul Bedi, a defence expert with IHS Jane's Defence Weekly, told AFP the 16-year-old submarine lacked some safety features common to newer vessels even after its $80 million overhaul.

"They don't have escape routes in the event of accidents, unlike some of the modern submarines," he said.

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Sky News cameraman killed in Egypt

A TV cameraman for Britain's Sky News has been shot dead while covering the clashes in Egypt, the network says.

Mick Deane, a 62-year-old father of two, had worked for Sky for 15 years and had been based in Washington DC and Jerusalem.

He was covering the crackdown by Egyptian police on pro-Morsi supporters in two camps in Cairo on Wednesday morning when he was killed.

British Prime Minister David Cameron said on Twitter: "I am saddened to hear of the death of cameraman Mick Deane, covering Egyptian violence. My thoughts are with his family and Sky News team."

Head of Sky News John Ryley described Deane as "the very best of cameramen, a brilliant journalist and an inspiring mentor to many at Sky".

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Egypt crackdown sparks global outrage

EGYPT'S bloody crackdown on supporters of ousted president Mohamed Morsi has triggered widespread condemnation as the international community reacted with alarm to the deepening crisis.

Europe's leading powers along with Iran, Qatar and Turkey strongly denounced the use of force by the military-backed interim government on Wednesday to clear two protest camps in Cairo.

The action has resulted in more than 120 deaths, according to AFP reporters at the scene.

"I am deeply concerned at the escalating violence and unrest in Egypt," British Foreign Secretary William Hague said in a statement. "I condemn the use of force in clearing protests and call on the security forces to act with restraint."

Qatar, a main backer of the pro-Morsi Muslim Brotherhood, issued a similar message.

"Qatar strongly denounces the means by which peaceful protesters in Rabaa al-Adawiya camp and Al-Nahda square have been dealt with and which led to the killing of several unarmed innocent people among them," a foreign ministry spokesman said in a statement published on the official QNA agency.

Turkey - which had developed strong ties with Morsi's government - urged the international community to act immediately over what it said was an "unacceptable" response to the protests.

"The international community, particularly the UN Security Council and Arab League, must act immediately to stop this massacre," the prime minister's office said in a statement.

Iran also termed the crackdown a "massacre".

"Iran is following the bitter events in Egypt closely, disapproves of the violent actions, condemns the massacre of the population and warns of the serious consequences," the foreign ministry said in a statement.

France and Germany refrained from apportioning blame for the crisis, calling for calm from both sides.

"It is essential that this violence cease and that a sense of calm prevails," a French foreign ministry statement said. "France calls on all parties to show the greatest restraint and warns against the disproportionate use of force.

"Emerging from this crisis can only be achieved through a political solution, which involves everyone promoting dialogue and the search for a compromise.

German Foreign Minister Guido Westerwelle said: "We call on all political forces to return immediately to negotiations and avert an escalation of violence.

"All further bloodshed must be prevented."

The European Union also appealed for restraint, with EU foreign policy chief Catherine Ashton's spokesman saying: "Confrontation and violence are not the way forward."

There was no immediate reaction from the US to Wednesday's bloodshed in the Arab world's most populous country.

Washington has given the interim regime in Egypt qualified backing, refusing to declare July's ouster of Morsi a coup while calling for a swift return to civilian rule.

A State Department spokesman on Tuesday urged the Egyptian authorities to allow Morsi supporters to protest freely but stopped short of outright condemnation of the crackdown.

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ASEAN unites on South China Sea

SOUTHEAST Asian nations have vowed unity in pressing China to accept a binding code of conduct for handling disputes in the South China Sea, the Thai foreign ministry says.

Competing claims to the sea have for decades stirred tension in the region and the waterway, believed to sit atop vast deposits of oil and natural gas, has long been seen as one of Asia's potential military flashpoints.

Foreign ministers from the 10-member Association of Southeast Asian Nations (ASEAN) agreed "to speak in one voice" while seeking an "early conclusion of a code of conduct", a foreign ministry spokesman told AFP on Wednesday.

The ministers, who held a two-day informal meeting in Thailand, will meet Chinese officials in Beijing at the end of the month.

"ASEAN will have to speak with one voice and be unified. This does not mean speaking against anyone... ASEAN is united so it's easy to discuss and talk with it," the spokesman added.

"The code of conduct should have the objective of enhancing confidence between ASEAN and China... and preventing any untoward incidents from taking place in the South China Sea."

ASEAN has been trying to secure agreement from China for more than a decade

China claims nearly all of the sea, even waters approaching the coasts of neighbouring countries. It has resisted agreeing to the code of conduct, wary of giving any concessions that may weaken its claim.

Last year Cambodia, a staunch ally of China and ASEAN's chair at the time, had refused to endorse a Philippine push for a tougher line with Beijing on the issue.

On Wednesday Cambodia's deputy prime minister agreed to the unified ASEAN position on the code, the Thai spokesman said after the two-day discussions ended.

ASEAN members the Philippines, Vietnam, Brunei and Malaysia, as well as Taiwan, also claim parts of the sea.

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US retail sales up 0.2 per cent in July

US retail sales have edged up in July despite a drop in car sales.

A category of purchases that excludes the most volatile sectors rose by the most in seven months, a sign that stronger consumer spending could boost economic growth.

The Commerce Department says retail sales increased 0.2 per cent in July from June. Sales had risen 0.6 per cent in June from May. The change in both months was driven by car sales, which surged 2.9 per cent in June but fell 1 per cent in July.

"Core" retail sales, which exclude the volatile car, gas and building supply categories, rose 0.5 per cent in July. These sales had risen 0.1 per cent in May and 0.2 per cent in June.

July's gain was the biggest such advance since a 0.5 per cent rise in December.

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Merkel turns history teacher

GERMAN Chancellor Angela Merkel has marked the 52nd anniversary of the building of the Berlin Wall by giving schoolchildren in the nation's capital a lesson on the barrier that divided the city and became a symbol of the Cold War.

Acting as teacher, Merkel told a class of teenagers at Berlin's Heinrich Schliemann Gymnasium how Germany's traditions of freedom and democracy were strengthened in the aftermath of the fall of the Berlin Wall in 1989.

Merkel's hour-long talk to the class came weeks before an election on September 22.

She began her lesson by writing her name on the blackboard. It was her first teaching experience, she said.

Culture Minister Bernd Neumann joined Berlin Mayor Klaus Wowereit in laying wreaths in central Berlin to commemorate the at least 136 who died attempting to flee from the east to the west.

Researchers are attempting to establish whether more people were killed making their bid for freedom across the heavily guarded no-man's-land that divided West Berlin from the communist east.

On August 13, 1961 the former East German state began building the 155-kilometre-long wall that would eventually surround Berlin.

The communist authorities' decision to build what they called "a barrier against fascism" was aimed at stopping people from fleeing to West Germany.

The daughter of a protestant pastor, Merkel became the first chancellor to grow up on the eastern side of the wall after being born in the west Germany city of Hamburg.

The fall of the wall, which followed a popular uprising in the east against their communist rulers, also opened the way for Merkel, 59, to launch a career in politics.

Merkel joined the conservative Christian Democrats shortly after reunification in 1990.

The chancellor's visit to the school marked her first public appearance since returning from a three-week holiday, which included hiking in the Alps between Austria and Italy.

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Greece arrests wanted Pakistan architect

A BRITISH architect of Pakistani origin wanted over the collapse of a building in Pakistan in 2005 that killed 78 people during a massive earthquake has been arrested in Greece, police say.

Shaikh Abdou Hafeez, 71, was arrested on Sunday on the resort island of Zakynthos under an international warrant and is due to appear before prosecutors on Wednesday, a local police source said on Tuesday.

He is accused of homicide, destruction of public assets and corruption among other allegations, according to a statement from Greek police.

According to the warrant, he was the architect of the Margalla Towers residential complex in Islamabad which collapsed during the October 2005 quake, killing 78 people and injuring 84.

Greek prosecutors are expected on Wednesday to order Hafeez held in custody before going before a Greek court which could then rule on his extradition.

The earthquake itself, which had a magnitude of 7.6 and was centred in Kashmir, killed at least 73,000 people and left several million homeless in one of the worst natural disasters to hit Pakistan.

Margalla Towers, a 10-storey apartment block in the upmarket F-10 sector of Islamabad, was the only major building in the Pakistani capital that collapsed in the quake.

The government pledged to enforce building standards more rigorously in the wake of the disaster and several official inquiries have been held.

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Russian rocket pioneer Soldatenkov dies

ALEXANDER Soldatenkov, a top Russian rocket designer who worked on the mission that made Yury Gagarin the first man in space, has died at 86, the space industry plant where he worked says.

Soldatenkov died on Sunday in the Volga city of Samara, the TsSKB-Progress spaceship construction plant said in a statement.

The space industry veteran was a member of the team headed by the brilliant designer Sergei Korolyov that sent Gagarin into space in the first manned flight in 1961.

He later worked on Soyuz-2 carrier rockets as well as modifications of the early Soviet R-7 rockets.

He was deputy head designer at the Soviet space construction bureau and then at its post-Soviet equivalent, TsSKB-Progress, from 1985 to 2006.

Soldatenkov was the technical director for around 1000 carrier rocket launches, the RIA Novosti news agency reported.

Cosmonaut Vladimir Titov told RIA Novosti that Soldatenkov helped save his life in 1983 when he instructed Titov and another cosmonauts preparing for blast-off to eject from their capsule on the landing pad seconds before it exploded in a fire.

Soldatenkov was awarded the top honours by the Soviet regime: the State prize, the Lenin Prize and the title Hero of Socialist Labour.

Russia's space program has recently suffered a serious of embarrassing failures with satellites and an unmanned cargo ship crashing to the ground, damaging public pride in an industry where Moscow once led the world.

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Drivers fume but Gibraltar stays British

IRATE drivers have waited in sweltering, hours-long queues to enter Gibraltar as Spain enforced tight border checks in a growing row with Britain over the tiny territory and its surrounding waters.

On the "Rock" itself, defiant residents declared themselves thoroughly British, surrounded by English pubs serving fish and chips, Royal Mail letter boxes, bright red telephone cabins and the occasional monkey.

Gibraltarians are firmly on London's side in the latest of a long string of spats with Madrid over the fate of the British outpost which lies off the southern tip of Spain and within sight of the African coastline.

The latest flare-up was sparked when Gibraltar sank concrete blocks in disputed waters to create an artificial reef, making it impossible for Spanish fishing fleets to operate in the area.

"We don't want to belong to Spain, we are happy being British," said 42-year-old Gilbratarian Kim Bickerstaff, complaining that the Spanish border checks hurt residents and visiting workers.

Indeed, life on Gibraltar, ceded by Spain to Britain in 1713 under the Treaty of Utrecht, looks British right down to the police officers with their tall helmets.

A rare exception is the monkeys who wander nonchalantly through the streets. They live in the forests of the rock that looms over Gibraltar and descend during the day when tourists are about. Feeding the animals is forbidden.

On a pub terrace, 52-year-old office worker Rosana sat with her family and slipped easily between English and a Spanish typical of the neighbouring southern region of Andalusia.

"At home we speak both languages because we are 'llanitos'," she said, as people of Gibraltarian origin are known.

"We are British," she added proudly.

Rosana said she backed Gibraltar's creation of an artificial reef and could not understand the response of Spanish Prime Minister Mariano Rajoy's conservative government, which affected not only Gibraltarian residents but also workers coming from the Spanish border town of La Linea.

"They don't know what is happening and they are creating all kinds of obstacles," she said.

About 10,000 Spaniards work in Gibraltar and about 6000 Gibraltarians live on the Spanish side where housing in cheaper, according to Madrid.

"Those of us who have family or work here have a different viewpoint from the rest of the Spanish, we are not anti-Gibraltarian," said Rafael Marquina, a 46-year-old government worker from La Linea who was visiting his aunt.

"All the problems come from an incorrect starting point: that Gibraltar is Spanish. But Gibraltar is British and its people feel British," he said.

"The day they accept that it is in fact English they will be able to solve any problem and reach agreements."

In the meantime, however, the line of cars trying to enter the territory of just 6.8 square kilometres and home to about 30,000 people, grew to several kilometres.

By early afternoon, the Royal Gibraltar Police said waiting times had stretched to about five hours for drivers trying to enter the rocky outpost, overlooking the only entrance to the Mediterranean from the Atlantic Ocean.

"This has happened to me several times, at least six or seven times" in recent days, said Francis Perez, a 30-year-old unemployed construction worker as he waited to cross the border into Gibraltar with his family.

Perez is from Madina Cidonia, a Spanish city located about 50 kilometres from Gibraltar, and like many area residents he heads to the British outpost to buy fuel for his car and tobacco because taxes there are lower.

"It's horrible to have to spend hours to get in and out of Gibraltar. Today it's not too hot but there are other days when it was unbearable. It's all just politics," he said, as his car crept ahead.

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Charles facing political 'meddling' claims

PRINCE Charles has had 36 private meetings with British cabinet ministers in the past three years, and the large number has spurred accusations that the heir to the throne is meddling in politics.

The Daily Mail newspaper compiled a list of the meetings from public records. They include seven with Prime Minister David Cameron since the May 2010 election.

The heir to the throne is expected to be politically neutral, but 64-year-old Charles has expressed strong opinions on issues including education, architecture, religion, the environment, organic food and homeopathy.

In an editorial, the usually pro-royal Daily Mail accused Charles of a "campaign of meddling".

Charles' Clarence House office said on Monday that the prince had a duty "to bring his unique perspective" and experience into meetings with officials.

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Pakistan accuses India of killing civilian

PAKISTAN has summoned India's deputy ambassador to protest over the latest round of firing in the disputed Himalayan territory of Kashmir that has left a civilian dead.

The Pakistani military accused India of "unprovoked firing" across the de facto border in the early hours of Monday, the latest in a series of recent clashes in Kashmir.

Tensions have flared again in the heavily militarised Kashmir valley with the nuclear-armed neighbours accusing each other of cross-border firing.

The latest incident took place when "Indian troops resorted to unprovoked firing in the wee hours Monday" in three areas along the de facto border known as the Line of Control (LoC), a military official said.

"Pakistani troops effectively responded to Indian firing," he said, adding that one civilian was killed "due to unprovoked Indian shelling".

Pakistan's foreign ministry voiced concerns over what it called "continuous ceasefire violations by Indian border security force" across the LoC in recent days.

"The Foreign Office summoned the Indian Deputy High Commissioner this afternoon to raise this concern which has resulted in the loss of an innocent civilian life in Rawalakot," the ministry said in a statement.

Pakistani Prime Minister Nawaz Sharif has been vocal in his desire for better relations with India since his election in May, but recent flare-ups have tested resolve on both sides.

The picturesque Himalayan territory is divided between India and Pakistan by the UN-monitored LoC, but both countries claim it in full.

A deadly flare-up along the LoC in January brought a halt to peace talks that had only just resumed following a three-year hiatus sparked by the 2008 attacks in Mumbai that killed 166 people. India blamed Pakistani militants for the attack.

The prime minister of the Pakistan-administered portion of Kashmir, Chaudhry Abdul Majeed, led a 400-strong protest march to the UN observer mission in Muzaffarabad to demand action to restore peace.

"It is the responsibility of the UN observer mission to keep peace in Kashmir," he told protesters.

"They should fulfil their responsibility by playing a role to stop shelling from India and restore calm in the valley."

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Dutch sailboat hit by tanker on canal

THREE people are missing after a German gas tanker ploughed into a sailboat on a Dutch canal, dragging it under water, with one possible survivor taken to hospital.

Several dive teams, helicopters, ambulances and fire engines were scrambled to the scene of the accident near Wemeldinge, around 20 kilometres from the Belgian border.

"The first casualty has been taken quickly to hospital," emergency services in the Zeeland region said in a tweet on Monday after rescue divers extracted someone from the wreck more than an hour after the accident.

"Dive teams are in and around the boat looking for those missing. There may be four people in the water," they said in an earlier tweet.

The sailboat sank after being hit by a tanker, which Dutch media reported was a German gas tanker headed for Antwerp in Belgium.

Traffic along the canal was halted pending the rescue operation, with emergency services set to try to bring the stricken sailboat to the surface.

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Strong earthquake hits off Peru

THE US Geological Survey says a strong earthquake with a preliminary magnitude of 6.2 has struck off the coast of northern Peru.

The quake struck at 4.49am local time and was centred 94 kilometres west-southwest of the city of Paita. The USGS says it was at the relatively shallow depth of 16 kilometres.

There were no immediate reports of damage or injuries.

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'Go hang', Zimbabwe's Mugabe tells rival

ZIMBABWE'S President Robert Mugabe says those upset by his disputed landslide election victory could "go hang".

The 89-year-old vowed never to let go of his victory as his opponent Morgan Tsvangirai lodged a petition in court challenging the election outcome.

"Those who were hurt by defeat can go hang if they so wish," Mugabe told thousands at a rally to honour heroes of the country's liberation wars on Monday.

"Never will we go back on our victory," he said in his first public address since the July 31-vote.

Mugabe was declared the winner with 61 per cent of the ballots, against Tsvangirai's 34 per cent.

He insisted that the Zimbabwean people's choice in government was clear.

"We are delivering democracy on a platter. We say take it or leave it, but the people have delivered democracy," he said.

Tsvangirai meanwhile vowed to expose "glaring evidence of the stolen vote" through a court bid.

His lawyers on Friday filed a petition at the Constitutional Court challenging the poll, which extended Mugabe's 33-year rule by another five years.

"All I can see is a nation in mourning over the audacity of so few to steal from so many," he said in a statement.

But "the thief left so much evidence at the scene of crime as we shall expose in the people's petition that we filed last week".

The elections were to end a shaky power-sharing government formed by Mugabe and Tsvangirai to avoid a tip into conflict in the aftermath of a bloody run-off election in 2008.

Tsvangirai's defeat has relegated his Movement for Democratic Change back to the opposition benches.

Local observers have called the polls flawed and Western powers have raised serious doubts over the vote.

However, regional organisations the African Union and Southern African Development Community (SADC) were less critical.

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