'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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