- Israel authorises more reservists after rockets target cities
- Argentina to argue debt repayments immune to U.S. law
- American contractor jailed in Cuba sues U.S., employer for $60 million
Posted: 16 Nov 2012 08:30 PM PST
GAZA/JERUSALEM (Reuters) - Israel's Cabinet authorised the mobilisation of up to 75,000 reservists late on Friday, preparing the ground for a possible Gaza invasion after Palestinians fired a rocket toward Jerusalem for the first time in decades.
Tel Aviv, Israel's commercial centre, also came under rocket attack for the second straight day, in defiance of an Israeli air offensive that began on Wednesday with the declared aim of deterring Hamas from launching cross-border attacks that have plagued southern Israel for years.
Hamas, the Islamist group that runs the Gaza Strip, claimed responsibility for firing at Jerusalem and Tel Aviv. Israel said the rocket launched toward Jerusalem landed in the occupied West Bank, and the one fired at Tel Aviv did not hit the city. There were no reports of casualties.
The siren that sounded in Jerusalem stunned many Israelis. The city, holy to Jews, Muslims and Christians, was last struck by a Palestinian rocket in 1970, and it was not a target when Saddam Hussein's Iraq fired missiles at Israel in the 1991 Gulf War.
Prime Minister Benjamin Netanyahu held a four-hour strategy session with a clutch of senior ministers in Tel Aviv on widening the military campaign, while other Cabinet members were polled by telephone on raising the mobilisation level.
Political sources said they decided to more than double the current reserve troop quota set for the Gaza offensive to 75,000. The move did not necessarily mean all would be called into service.
Hours earlier, Egypt's prime minister, denouncing what he described as Israeli aggression, visited Gaza and said Cairo was prepared to mediate a truce.
U.S. President Barack Obama spoke with Netanyahu and Egyptian President Mohamed Mursi on Friday, the White House said, while Obama's defence secretary, Leon Panetta, talked with his Israeli counterpart, Ehud Barak.
Officials in Gaza said 29 Palestinians - 13 militants and 16 civilians, among them eight children and a pregnant woman - had been killed in the enclave since Israel began its air strikes. Three Israeli civilians were killed by a rocket on Thursday.
The Israeli military said 97 rockets fired from Gaza hit Israel on Friday and 99 more were intercepted by its Iron Dome anti-missile system. Dozens of Israeli bombing raids rocked the enclave, and one flattened the Gaza Interior Ministry building.
In a further sign Netanyahu might be clearing the way for a ground operation, Israel's armed forces announced that a highway leading to the territory and two roads bordering the enclave of 1.7 million Palestinians would be off-limits to civilian traffic.
Tanks and self-propelled guns were seen near the border area on Friday, and the military said it had already called 16,000 reservists to active duty.
Netanyahu is favoured to win a January national election, but further rocket strikes against Tel Aviv, a free-wheeling city Israelis equate with New York, and Jerusalem, which Israel regards as its capital, could be political poison for the conservative leader.
"The Israel Defence Forces will continue to hit Hamas hard and are prepared to broaden the action inside Gaza," Netanyahu said before the rocket attacks on the two cities.
Asked about Israel massing forces for a possible Gaza invasion, Hamas spokesman Sami Abu Zuhri said, "The Israelis should be aware of the grave results of such a raid, and they should bring their body bags."
A solidarity visit to Gaza by Egyptian Prime Minister Hisham Kandil, whose Islamist government is allied with Hamas but also party to a 1979 peace treaty with Israel, had appeared to open a tiny window to emergency peace diplomacy.
Kandil said, "Egypt will spare no effort ... to stop the aggression and to achieve a truce."
But a three-hour truce that Israel declared for the duration of Kandil's visit never took hold.
Obama commended Egypt's efforts to help calm the Gaza violence in a call to Mursi on Friday, the White House said, and underscored his hope of restoring stability.
In a call with Netanyahu, Obama discussed options for "de-escalating" the situation, the White House said.
Obama "reiterated U.S. support for Israel's right to defend itself, and expressed regret over the loss of Israeli and Palestinian civilian lives," a statement on the call said.
Israel Radio's military affairs correspondent said the army's Homefront Command had told municipal officials to make civil defence preparations for the possibility that fighting could drag on for seven weeks. An Israeli military spokeswoman declined to comment on the report.
The Gaza conflagration has stoked the flames of a Middle East already ablaze with two years of Arab revolution and a civil war in Syria that threatens to leap across borders.
It is the biggest test yet for Mursi, a veteran Islamist politician from the Muslim Brotherhood who was elected this year after protests ousted military autocrat Hosni Mubarak in 2011.
Egypt's Muslim Brotherhood are spiritual mentors of Hamas, yet Mursi has also pledged to respect Cairo's 1979 peace treaty with Israel, seen in the West as the cornerstone of regional security. Egypt and Israel both receive billions of dollars in U.S. military aid to underwrite their treaty.
Mursi has vocally denounced the Israeli military action, while promoting Egypt as a mediator, a mission that his prime minister's visit was intended to further.
A Palestinian official close to Egypt's mediators told Reuters Kandil's visit "was the beginning of a process to explore the possibility of reaching a truce. It is early to speak of any details or of how things will evolve".
Hamas fighters are no match for the Israeli military. The last Gaza war, involving a three-week long Israeli air blitz and ground invasion over the New Year period of 2008-2009, killed more than 1,400 Palestinians, mostly civilians. Thirteen Israelis died.
Tunisia's foreign minister was due to visit Gaza on Saturday "to provide all political support for Gaza," the spokesman for the Tunisian president, Moncef Marzouki, said in a statement.
U.S. Secretary of State Hillary Clinton spoke by telephone on Friday to the Israeli and Egyptian foreign ministers as well as Jordan's King Abdullah and planned to speak on Saturday with Qatar's prime minister, said a senior State Department official travelling with her in Singapore.
Clinton called the officials "in the hopes that they will use their leverage and influence with Hamas to get them to cease their attacks and then to bring about a de-escalation, where we can get to an end to the violence," the official said.
Hamas refuses to recognise Israel's right to exist. By contrast, Palestinian President Mahmoud Abbas, who rules in the nearby West Bank, does recognise Israel, but peace talks between the two sides have been frozen since 2010.
Abbas' supporters say they will push ahead with a plan to have Palestine declared an "observer state" rather than a mere "entity" at the United Nations later this month.
(Additional reporting by Maayan Lubell and Crispian Balmer in Jerusalem and David Brunnstrom in Singapore, and Phil Stewart; Editing by Giles Elgood, Will Waterman and Peter Cooney)Israel cabinet authorises mobilisation of up to 75,000 reservists
Israel's Barak seeks three more Iron Dome rocket interceptors
Israel trying to undermine Palestinian U.N. move - Abbas
Thousands protest in Egypt against Israeli attacks on Gaza
Copyright © 2012 Reuters
Posted: 16 Nov 2012 05:06 PM PST
BUENOS AIRES/NEW YORK (Reuters) - Argentina's government will tell a U.S. judge on Friday that sovereign debt repayments made outside the United States are immune to U.S. law and seizures by holdout bondholders, the South American country's state news agency reported.
Argentina is fighting an October ruling by a U.S. federal appeals court that would force the government to pay holdout creditors holding bonds that have been in default since 2002. It is due to present papers by midnight.
The U.S. 2nd Circuit Court of Appeals in New York last month ruled that Argentina discriminated against bondholders who refused to take part in two debt restructurings as the nation tried to recover from a $100 billion (63 billion pounds) default a decade ago.
The ruling sparked fears that U.S. courts could ultimately inhibit debt payments to creditors who accepted terms of the restructuring, out of consideration for investors who rejected Argentina's terms at the time.
This would trigger a technical default.
The appeals court, however, referred the case back to the U.S. District Court to address the technical questions of just how debt payments would be calculated and how to treat the involvement of third-party banks such as Bank of New York Mellon, which act as transfer agents for money owed to exchange bondholders.
Argentine President Cristina Fernandez said recently her country will not pay "one dollar to the vulture funds," her term for the holdout investors who buy distressed or defaulted debt and then sue in international courts to get paid in full. Fernandez has vowed to keep making payments to other creditors.
State news agency Telam said the government would argue that the repayments were "immune to U.S. law" because "the payment of creditors is conducted outside that country."
"When the money arrives in New York, it already belongs to the creditors, not to Argentina," it quoted an unnamed official source as saying.
Argentine bonds closed up 1 percent on average in over-the-counter trading in Buenos Aires on Friday, after accumulating a loss of 4.1 percent in the previous three sessions.
"The move by Argentina put a floor under debt prices, because if it works it could create a buying opportunity," said Ruben Pascuali, a trader at local brokerage Mayoral Bursatil.
TELL US WHAT TO DO
Bank of New York Mellon, which transfers funds from the Argentine government to the country's bond holders, argued in a brief filed late on Friday to U.S. District Court Judge Thomas Griesa that it is not an agent of the Argentine government and maintains an "at arm's length" relationship.
The bank said its "duty of loyalty runs to the Exchange holders," that is, to enforce the rights of investors who exchanged their bonds in 2005 and 2010.
"Punishing an innocent third party to try to obtain compliance from an enjoined party goes beyond any legitimate purpose for contempt," BNY Mellon said.
The bank said it could be put between a rock and a hard place if Griesa rules they are to make payments to all parties but are prohibited because Argentina doesn't transfer any money through it.
"BNY Mellon will face a potential conflict between its obligations to Exchange Holders under the Indenture and its obligations to the Court," the bank argued.
In that case, the bank said, it needs guidance from the court on what its duties and responsibilities would be.
Ultimately, the bank wants the lower court's order from Griesa, which currently has all payments halted, to remain in place until the full appeals process has run its course.
That means after Griesa addresses the two technical questions set by the appeals court, BNY Mellon wants him to keep the payments frozen until the 2nd Circuit reviews and rules on his logic.
The deadline for parties to present their positions to Griesa is Friday at 11:59 p.m. EST (0459 GMT, Saturday). The judge is expected to make a speedy response given Argentina is due to start making $3.3 billion worth of payments to exchange bondholders starting December 2. Griesa's ruling will automatically return to the appeals court for review.
In a court filing this week, Elliott Management Corp's NML Capital Ltd and two Aurelius Capital Management funds urged Griesa to lift his February 23 stay on payments pending appeal.
October's ruling by the appeals court largely upheld injunctions issued in February by Griesa in favour of the holdouts, which own roughly $1.4 billion of defaulted debt.
The holdouts warned in their argument to Griesa that terms of the swapped Argentine bonds may allow the country to circumvent the United States by using subsidiaries in London and Luxembourg to make debt payments.
Weighing in on the arguments before the deadline were other transfer agents, holdout investors and exchange bond holders.
The Clearing House Association, a banking association and payments company, sent a letter directly to Griesa explaining that any order should not apply to beneficiary's banks, funds-transfer systems or other parties in a funds transfer.
The letter was obtained from a source with direct knowledge of the case. It argued the ruling would cause "disruption of payment systems and delays in processing legitimate payments" made by Argentine entities that have nothing to do with the case.
Law firm Duane Morris, representing roughly 100 mainly Italian holdout investors with approximately $165 million in principal and pre-judgement interest, sided with NML.
"Despite its proclaimed ability to pay, Argentina has steadfastly refused to make payments that are due under the defaulted bonds - even to the individuals who are not "vultures," Anthony Costantini, a lawyer with Duane Morris wrote in a brief to Griesa on Friday.
On the other side are bond holders who participated in the exchanges who urged that NML not be allowed to collect on its judgments.
Fintech Advisory Inc, a New York investment management firm that gave up $698.9 million of the $1.052 billion it was owed by Argentina during the two debt swaps, argued if the judge sided with the holdout bondholders, Argentina would be in breach of contracts with exchange bondholders like itself.
"There is no basis for any order to cause such a result," Fintech's lawyers wrote.
(Additional reporting by Jorge Otaola in Buenos Aires and Nate Raymond in New York; Writing by Helen Popper and Daniel Bases; editing by Theodore d'Afflisio, David Gregorio and Todd Eastham)
Copyright © 2012 Reuters
Posted: 16 Nov 2012 04:50 PM PST
MIAMI (Reuters) - A U.S. contractor jailed in Cuba after being convicted of crimes against the state sued the U.S. government and the company that hired him for $60 million (37.8 million pounds) on Friday, blaming them for his imprisonment and not warning him about the risks he faced in the communist-run island.
Alan Gross, 63, has been jailed in Cuba since December 3, 2009, and is serving a 15-year sentence for providing Internet gear to Cubans under a U.S. program that Cuba views as subversive.
In the lawsuit filed in U.S. District Court in Washington, Gross and his wife, Judy Gross, allege that his employer, Maryland-based Development Alternatives Inc, or DAI, and the U.S. government "failed to disclose adequately to Mr. Gross, both before and after he began travelling to Cuba, the material risks that he faced due to his participation in the project."
Gross, a long-time development worker, went to Cuba five times as a subcontractor for DAI, which had a contract with the U.S. Agency for International Development.
The suit also charges that DAI and the government "failed to take adequate measures" to train and protect Gross on his trips to Cuba, and that they "ignored Mr. Gross' repeated security concerns so that DAI could continue to generate significant revenue and the Government could continue to use Mr. Gross as a pawn in its overall Cuba policy initiatives."
The suit said that after his third trip, Gross wrote a memo stating that the Cuba project was "risky business in no uncertain terms. ... Detection usually means confiscation of equipment and arrest of users."
The suit specifically states that his employers failed to warn Gross about the "the techniques used by Cuban government intelligence," and "failed to conduct counterintelligence training for Mr. Gross."
The suit also accuses USAID of failing to follow "mandatory, internal directives" governing foreign travel "in connection with such projects, particularly to hostile countries like Cuba."
In a separate lawsuit against New Jersey-based Federal Insurance Co in Maryland District Court, Gross and his wife said FIS "has wrongfully refused benefits," under what the suit cited as "a wrongful detention" clause.
The Department of Justice did not respond to the lawsuit on Friday. "The case is being reviewed," said spokesman Charles Miller.
A spokesman for DAI said it was preparing a statement to be issued later on Friday. Federal Insurance Co, part of the Chubb insurance group, could not be reached for comment.
The U.S. government has said Gross should not be jailed for providing Internet access to Jews and has repeatedly demanded his release.
The case has put a hold on U.S.-Cuba relations that warmed slightly after President Barack Obama took office in January 2009.
Since his detention, Gross' wife said he had lost 100 pounds (45 kg), was battling chronic arthritis pain and had what could be a cancerous tumour beneath his shoulder blade. Gross' daughter and elderly mother both have cancer.
"The tragedy faced by the Gross family is horrific," said Scott Gilbert, lead counsel of Gilbert LLP.
"What is mind-boggling is that this never should have come to pass. The destruction of this family is the direct result of a project approved, overseen and administered by DAI and our government that was flawed from conception and pursued with complete disregard for Mr. Gross' safety and well-being. It is an utter disgrace."
Gross was working in Cuba for a U.S.-funded program to promote political change by increasing Internet access and the flow of communications. Cuba views such programs as part of long-standing U.S. attempts to topple the island's communist government.
USAID has said that Gross' job was "simply facilitating Internet connectivity to the Cuban people so they could communicate with the rest of the world."
Cuba says Gross tried to keep his work undercover and was aware of its political aims, according to a leaked court document.
The court said it found evidence on flash drives and a computer confiscated during his arrest that Gross knew more than he admitted and took action to avoid detection, including using American tourists to bring Internet equipment to Cuba without telling them what it was for.
The gear included three satellite Internet terminals, or BGANs, along with BlackBerry phones, iPods and other electronics.
Information is tightly controlled on the Caribbean island, Internet use is limited and visitors are not allowed to carry satellite technology.
During his trial, Gross said: "I did nothing in Cuba that is not done on a daily basis in millions of homes and offices around the world. ... I am deeply sorry for being a trusting fool. I was duped, I was used."
(Editing by Peter Cooney)
Copyright © 2012 Reuters
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