OUE sets deadline for F&N takeover offer






SINGAPORE: A consortium led by property group Overseas Union Enterprise (OUE) has set a deadline for its takeover offer of conglomerate Fraser and Neave (F&N).

Its S$13.1 billion offer for F&N will close on 3 January.

OUE is controlled by Lippo Group, a major Indonesian conglomerate that was founded by tycoon Mochtar Riady. Mr Mochtar is father of OUE's executive chairman Stephen Riady.

The OUE-led consortium offered to buy out shares of F&N at S$9.08 a piece on 15 November.

It is backed by Japanese brewer Kirin Holdings, which holds a 14.8 per cent stake in F&N. Kirin is also F&N's second largest shareholder.

OUE's offer was 2.25 per cent higher than the S$8.88 per share offered by rival TCC Assets, which is controlled by Thai beverage tycoon Charoen Sirivadhanabhakdi.

Through his entities TCC and Thai Beverage, he now owns almost a third of F&N.

TCC's S$8.7 billion bid for F&N will close on 11 December.

Analysts expect both sides to battle it out for F&N given the attractiveness of its property and soft drinks business.

They say TCC, which has extended the deadline on its offer twice, could ask for yet another extension next Tuesday before making their next move.

Liu Jinshu, deputy lead analyst at SIAS Research said: "TCC can't drag this out over a prolonged period, with the OUE bid announced last month, there is pressure for them to raise the stake.

"The premium offered by OUE's offer at S$9.08 a share is not high. TCC might not find it attractive after they have invested so much resources and effort in F&N. There is potential for TCC to rope in a partner and put in a higher bid for F&N."

F&N's share price closed at S$9.39 on Thursday, leading analysts to say that shareholders are holding out for a better offer and that a bidding war could emerge.

"We are seeing steady level being held at around the S$9.40-S$9.50 share mark on the exchange traded share. At the moment we are waiting to see who would move first in terms of putting in a better offer… I think we are likely to see both sides improve before we actually get to the end of any takeover," said Head of Premium Client Management at IG Markets Jason Hughes.

F&N is expected to appoint an independent financial advisor to review OUE's offer.

- CNA/jc



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BJP is bigger evil than Cong and JD(S): Yeddyurappa

BANGALORE: A week after snapping his four decade old association with BJP, former chief minister BS Yeddyurappa came down heavily on BJP, calling it 'a bigger evil' than Congress and JD(S).

"BJP is a bigger evil than Congress or JDS. So I have decided not to return to my previous party under any circumstance" Yeddyurappa said. However, he said he cannot forget the party as it has given him everything right from the post of president of a municipality to CM.

The 70-year-old former BJP strongman, who is set to formally launch his regional outfit Karnataka Janata Party in Haveri on Sunday said he has distanced himself from RSS ideology and is now wedded to the principles of Mahatma Gandhi, BR Ambedkar and Jayaprakash Narayan.

Yeddyurappa claimed that he has the support of 50 to 55 BJP MLAs and 12 MPs. He dared BJP leadership to take action against his supporters. In the same tenor, he also took on chief minister Jagadish Shettar. "I made a mistake in making Shettar CM. But I do not want to topple it and face allegations that I was responsible for it,'' he said.

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Celebrations planned as Wash. legalizes marijuana


SEATTLE (AP) — Legal marijuana possession becomes a reality under Washington state law on Thursday, and some people planned to celebrate the new law by breaking it.


Voters in Washington and Colorado last month made those the first states to decriminalize and regulate the recreational use of marijuana. Washington's law takes effect Thursday and allows adults to have up to an ounce of pot — but it bans public use of marijuana, which is punishable by a fine, just like drinking in public.


Nevertheless, some people planned to gather at 12:01 a.m. PST Thursday to smoke in public beneath Seattle's Space Needle. Others planned a midnight party outside the Seattle headquarters of Hempfest, the 21-year-old festival that attracts tens of thousands of pot fans every summer.


"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."


In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.


That law also takes effect Thursday, when gay and lesbian couples can start picking up their wedding certificates and licenses at county auditors' offices. Those offices in King County, the state's largest and home to Seattle, and Thurston County, home to the state capital of Olympia, planned to open the earliest, at 12:01 a.m. Thursday, to start issuing marriage licenses. Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.


The Seattle Police Department provided this public marijuana use enforcement guidance to its officers via email Wednesday night: "Until further notice, officers shall not take any enforcement action — other than to issue a verbal warning — for a violation of Initiative 502."


Thanks to a 2003 law, marijuana enforcement remains the department's lowest priority. Even before I-502 passed on Nov. 6, police rarely busted people at Hempfest, despite widespread pot use, and the city attorney here doesn't prosecute people for having small amounts of marijuana.


Officers will be advising people to take their weed inside, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."


Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.


But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.


The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.


"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress" — a non-issue, since the measures passed in Washington and Colorado don't "nullify" federal law, which federal agents remain free to enforce.


The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.


That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.


Colorado's measure, as far as decriminalizing possession goes, is set to take effect by Jan. 5. That state's regulatory scheme is due to be up and running by October 2013.


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Johnson can be reached at https://twitter.com/GeneAPseattle


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Cliffhanger: Can They Get to 'Yes'?












There are all sorts of theories floating around Washington about what kind of deficit reduction deal Democrats and Republicans eventually cut and when and how they get there.


And, nearing the end of a week when little progress appears to have been made, one thing is certain: Americans are worried about the consequences of going over the fiscal cliff.


According to a new Quinnipiac University poll out this morning, voters by a 47 to 23 percent margin said that the consequences of falling off the cliff, which include deep spending cuts and painful tax hikes, would be bad for the economy. And even more -- 53 percent -- said lawmakers' failure to avoid the cliff would be "bad for their personal financial situation" compared to just 13 percent who said it wouldn't.


What's more, President Obama and Democrats head into the final weeks before Christmas operating from a position of relative strength, at least when it comes to public opinion.


Read: What national "fiscal cliff" polls tells us (and what they don't)


Obama's post-election job approval rating stands at 53 percent, according to the latest Quinnipiac numbers (40 percent disapprove), and 53 percent of voters also said they trust the president and Democrats more than Republicans to work out a deal in the deficit negotiations.
But the question of how that happens is another matter altogether. Some Republicans say that the best option is to simply get President Obama and House Speaker John Boehner in a room together and wait for them to hammer out a deal mano-a-mano.




In an interview this week with Bloomberg News, President Obama disagreed.


"I don't think that the issue right now has to do with sitting in a room," he told Bloomberg's Julianna Goldman. "The issue right now that's relevant is the acknowledgment that if we're going to raise revenues that are sufficient to balance with the very tough cuts that we've already made and the further reforms in entitlements that I'm prepared to make, that we're going to have to see the rates on the top two percent go up. And we're not going to be able to get a deal without it."


Related: Can the mortgage deduction survive the fiscal cliff?


Nevertheless, House Republican Whip Rep. Kevin McCarthy, R-Calif., called on the president to lead and predicted that we are entering a crucial phase of the talks -- despite the fact that some lawmakers are leaving town for a long weekend.


"If you want the answer to solving the fiscal cliff, the House has put an offer on the table and the president now has to engage," McCarthy said at a news conference yesterday. "I think the next 72 hours are critical. If he sits back and continues to play politics that will give you your answer to where we are going. This is an opportunity for this country to lead. This is an opportunity for the president to lead."


And Speaker Boehner assured that he would "be available at any moment to sit down" with the president "to get serious about solving this problem." (President Obama and Boehner spoke by telephone yesterday).


In the end, more Americans are rooting for compromise rather than collapse: By a 48 to 43 percent margin, voters surveyed in today's Quinnipiac poll predicted that President Obama and Congress would reach agreement to avoid the cliff by the end of the year.



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Confrontation between rival protesters looms in Egypt crisis


CAIRO (Reuters) - Egypt's Muslim Brotherhood called for a rally backing President Mohamed Mursi outside his palace on Wednesday and leftists planned a counter-demonstration, raising fears of clashes in a crisis over a disputed push for a new constitution.


Mursi returned to work at his compound a day after it came under siege from opposition protesters furious at his drive to ratify a new constitution in a snap referendum set for December 15 after temporarily expanding his powers by decree.


The Islamist president said he acted to prevent courts still full of appointees from the era of autocratic predecessor Hosni Mubarak from derailing the draft constitution meant to complete a political transition in the Arab world's most populous state.


The Brotherhood, from which Mursi emerged to narrowly win a free election in June, summoned supporters to a demonstration outside the palace in response to what it termed "oppressive abuses" by opposition parties.


Brotherhood spokesman Mahmoud Ghozlan was quoted on its Facebook page as saying opposition groups "imagined they could shake legitimacy or impose their views by force".


Leftist opposition leader Hamdeen Sabahy promptly urged his supporters to go to the streets as well, heightening the chances of confrontation between Islamists and their opponents.


A spokeswoman for Sabahy's Popular Current movement asked protesters to head to the palace to reinforce those still camped out there after Tuesday evening's protests, in which officials said 35 protesters and 40 police were wounded.


Although they fired tear gas when protesters broke through barricades to reach the palace walls, riot police appeared to handle those disturbances with restraint.


About 200 protesters camped out overnight, blocking one gate to the palace in northern Cairo, but traffic was flowing normally and riot police had been withdrawn.


"Our demands to the president: retract the presidential decree and cancel the referendum on the constitution," read a placard hung by demonstrators on a palace gate.


The rest of the Egyptian capital was calm, despite the political furor over Mursi's November 22 decree handing himself wide powers and shielding his decisions from judicial oversight.


Crowds had gathered on Tuesday for what organizers dubbed a "last warning" to Mursi. "The people want the downfall of the regime," they chanted, roaring the signature slogan of last year's uprising that ousted Mubarak.


But the "last warning" may turn out to be one of the last gasps for a disparate opposition that has little chance of stopping next week's vote on a constitution drafted over six months and swiftly approved by an Islamist-dominated assembly.


MURSI STANDS HIS GROUND


Facing the gravest crisis of his six-month-old tenure, the Islamist president has shown no sign of buckling under pressure, confident that the Muslim Brotherhood and its Islamist allies can win the referendum and a parliamentary election to follow.


Many Egyptians yearn for an end to political upheaval that has scared off investors and tourists, damaging the economy.


Ahmed Kamel, spokesman for the Congress Party led by former Arab League chief Amr Moussa, said Mursi should meet opposition demands, not call for an Islamist counter-demonstration.


Some protesters have already gone beyond opposition calls for Mursi to scrap his decree, defer the referendum and set up a "representative committee" to revise the draft constitution, instead demanding the president's overthrow.


"The demands of the street are moving faster than those of the politicians," said Elijah Zarwan, a fellow with the European Council on Foreign Relations. "Now is the time for the Egyptian liberals to negotiate without conditions."


COURT PROTEST


Dozens of pro-Mursi demonstrators, watched by equal numbers of police, waved flags outside the Supreme Constitutional Court, whose rulings have complicated the Islamists' rise to power.


"You are not a political agency," read one banner held by the demonstrators, addressing a court that in June ordered the dissolution of the Islamist-led lower house of parliament.


Mursi issued his decree temporarily putting his actions above the law to forestall any court ruling to dissolve the upper house or the assembly that wrote the constitution.


State institutions, with the partial exception of the judiciary, have mostly fallen in behind Mursi.


The army, the power behind all previous Egyptian presidents in the republic's six-decade history, has gone back to barracks, having apparently lost its appetite to intervene in politics.


In a bold move, Mursi sacked Mohamed Hussein Tantawi, the Mubarak-era army commander and defense minister, in August and removed the sweeping powers that the military council which took over after Mubarak's fall had grabbed two months earlier.


The liberals, leftists, Christians, ex-Mubarak followers and others opposed to Mursi, elected in a close result against a secular rival, have yet to generate a mass movement or a grassroots political base to challenge the Brotherhood.


Protesters have scrawled "leave" over Mursi's palace walls, but the president has made clear he is not going anywhere.


"The crisis we have suffered for two weeks is on its way to an end, and very soon, God willing," Saad al-Katatni, head of the Brotherhood's Freedom and Justice Party, told Reuters.


Investors have seized on hopes that Egypt's turbulent transition, which has buffeted the economy for two years, may soon head for calmer waters, sending stocks 1.6 per cent higher after a 3.5 percent rally on Tuesday.


The most populous Arab nation has turned to the IMF for a $4.8 billion loan to help it out of a crisis that has depleted its foreign currency reserves.


The government said on Wednesday the process was on track and Egypt's request would go to the IMF board as expected.


(Additional reporting by Tom Perry and Yasmine Saleh; Writing by Alistair Lyon; Editing by Mark Heinrich)



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AA to introduce new advanced defensive driving course






SINGAPORE: The Automobile Association of Singapore (AA) plans to introduce a new advanced defensive driving course, as part of its continuing efforts to promote safe driving and safer roads.

Speaking at the AA's 105th charity gala dinner held at the Ritz-Carlton Millenia Singapore, AA president Bernard Tay said that the association will be working with the authorities on the curriculum.

No timeline was announced for the course. AA holds defensive driving courses for the public once a year with the next one expected in June or July next year.

Some driving schools in Singapore such as the Bukit Batok driving centre currently conduct a day course on defensive driving, which includes skid planning and emergency planning. At Woodlands Driving school, defensive driving is included in their basic driving courses.

Mr Tay also announced that S$700,000 had been collected for three beneficiaries - the Singapore Road Safety Council, the Teck Ghee Citizens' Consultative Committee Community Development & Welfare Fund and the National Arthritis Foundation.

The event was graced by Prime Minister Lee Hsien Loong and Members of Parliament Cedric Foo, Hri Kumar Nair and Lam Pin Min.

Mr Lee noted the growth of the AA from 56 members in 1907 to over 83,000 members today.

"We are a completely different world but it's a world where there's still a role for AA to serve their members, to educate them on road safety, provide them with services," said Mr Lee. - TODAY



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CBI likely to file FIR in offshore mining case

NEW DELHI: CBI is likely to register a case in connection with alleged irregularities in the country's first-ever attempt of offshore mining to explore untapped mineral wealth worth thousands of crores in the sea bed.

The agency, which had registered a preliminary inquiry in September, found enough material to proceed with regular case against some of the beneficiary companies and government officials posted at Indian Bureau of Mines in Nagpur, CBI sources said.

They said at least three officials of the Indian Bureau of Mines are likely to be named in the FIR along with four companies related to family members of an Indian Revenue Services officer who grabbed nearly half of 62 blocks which were put on offer despite lacking necessary qualifications.

They said last year, the government in a first attempt to explore offshore mineral wealth, had placed 62 blocks on offer out of which 28, nearly half, were bagged by companies owned by family members of the former Enforcement Directorate official who had also served in the mines ministry.

The final award of licences had been put on hold after aggrieved parties approached the Bombay high court and the Andhra Pradesh high court seeking their cancellation.

The companies allegedly owned by the son and brother of the officer are based in the national capital, they said.

It is alleged that companies were incorporated after bids were invited from the interested parties willing to go for exploration and did not have any experience in offshore mining at the time of notification.

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Longer tamoxifen use cuts breast cancer deaths


Breast cancer patients taking the drug tamoxifen can cut their chances of having the disease come back or kill them if they stay on the pills for 10 years instead of five years as doctors recommend now, a major study finds.


The results could change treatment, especially for younger women. The findings are a surprise because earlier research suggested that taking the hormone-blocking drug for longer than five years didn't help and might even be harmful.


In the new study, researchers found that women who took tamoxifen for 10 years lowered their risk of a recurrence by 25 percent and of dying of breast cancer by 29 percent compared to those who took the pills for just five years.


In absolute terms, continuing on tamoxifen kept three additional women out of every 100 from dying of breast cancer within five to 14 years from when their disease was diagnosed. When added to the benefit from the first five years of use, a decade of tamoxifen can cut breast cancer mortality in half during the second decade after diagnosis, researchers estimate.


Some women balk at taking a preventive drug for so long, but for those at high risk of a recurrence, "this will be a convincer that they should continue," said Dr. Peter Ravdin, director of the breast cancer program at the UT Health Science Center in San Antonio.


He reviewed results of the study, which was being presented Wednesday at a breast cancer conference in San Antonio and published by the British medical journal Lancet.


About 50,000 of the roughly 230,000 new cases of breast cancer in the United States each year occur in women before menopause. Most breast cancers are fueled by estrogen, and hormone blockers are known to cut the risk of recurrence in such cases.


Tamoxifen long was the top choice, but newer drugs called aromatase inhibitors — sold as Arimidex, Femara, Aromasin and in generic form — do the job with less risk of causing uterine cancer and other problems.


But the newer drugs don't work well before menopause. Even some women past menopause choose tamoxifen over the newer drugs, which cost more and have different side effects such as joint pain, bone loss and sexual problems.


The new study aimed to see whether over a very long time, longer treatment with tamoxifen could help.


Dr. Christina Davies of the University of Oxford in England and other researchers assigned 6,846 women who already had taken tamoxifen for five years to either stay on it or take dummy pills for another five years.


Researchers saw little difference in the groups five to nine years after diagnosis. But beyond that time, 15 percent of women who had stopped taking tamoxifen after five years had died of breast cancer versus 12 percent of those who took it for 10 years. Cancer had returned in 25 percent of women on the shorter treatment versus 21 percent of those treated longer.


Tamoxifen had some troubling side effects: Longer use nearly doubled the risk of endometrial cancer. But it rarely proved fatal, and there was no increased risk among premenopausal women in the study — the very group tamoxifen helps most.


"Overall the benefits of extended tamoxifen seemed to outweigh the risks substantially," Dr. Trevor Powles of the Cancer Centre London wrote in an editorial published with the study.


The study was sponsored by cancer research organizations in Britain and Europe, the United States Army, and AstraZeneca PLC, which makes Nolvadex, a brand of tamoxifen, which also is sold as a generic for 10 to 50 cents a day. Brand-name versions of the newer hormone blockers, aromatase inhibitors, are $300 or more per month, but generics are available for much less.


The results pose a quandary for breast cancer patients past menopause and those who become menopausal because of their treatment — the vast majority of cases. Previous studies found that starting on one of the newer hormone blockers led to fewer relapses than initial treatment with tamoxifen did.


Another study found that switching to one of the new drugs after five years of tamoxifen cut the risk of breast cancer recurrence nearly in half — more than what was seen in the new study of 10 years of tamoxifen.


"For postmenopausal women, the data still remain much stronger at this point for a switch to an aromatase inhibitor," said that study's leader, Dr. Paul Goss of Massachusetts General Hospital. He has been a paid speaker for a company that makes one of those drugs.


Women in his study have not been followed long enough to see whether switching cuts deaths from breast cancer, as 10 years of tamoxifen did. Results are expected in about a year.


The cancer conference is sponsored by the American Association for Cancer Research, Baylor College of Medicine and the UT Health Science Center.


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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP


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Majority Back Clinton for Presidential Bid in 2016


ap hillary clinton jp 121204 wblog Hillary Clinton Wins High Popularity, Majority Support for a 2016 Bid

Kevin Lamarque/AP Photo


Carried by a new high in personal popularity and broad approval of her work as secretary of state, Hillary Clinton closes out her diplomatic career with majority support as a candidate for president in 2016.


Fifty-seven percent in the latest ABC News/Washington Post poll say they’d back a run by Clinton to succeed Barack Obama, vs. 37 percent opposed. That includes a broad gender gap – 66 percent support for Clinton among women, dropping to 49 percent among men.


See PDF with full results, charts and tables here.


Clinton is expected to step down soon from her leadership of the State Department, a position she accepted after narrowly losing the Democratic presidential nomination to Obama in 2008. She’s demurred on the prospect of another bid for the presidency.


Clinton’s fared well during her tenure at State; 68 percent approve of her work, second only to Colin Powell among the last five secretaries of state. (He managed a remarkable 85 percent approval in 2002 and 2003.) Similarly, two-thirds in this poll, produced for ABC by Langer Research Associates, see Clinton favorably overall, numerically a new high in her long public career as first lady, U.S. Senator, presidential candidate and top U.S. diplomat.


Clinton’s recovered from personal favorability as low as 44 percent in April 2008, during her presidential run; she also dropped that low in June 2003, when she was discussed as a possible candidate in the 2004 presidential race, and in June 1996, during the Whitewater controversy. Those dips underscore the potential risks should she climb back into the political fray.


In another sign of the challenges of a political candidacy, intensity of sentiment is better for Clinton personally, and as secretary of state, than it is for her as a candidate. Her “strongly” favorable rating and strong approval of her job performance outnumber her strong negatives, in both cases, by more than 2-1 margins. Strong support for her as a candidate also outweighs strong opposition, but much more narrowly, by 9 percentage points, 36 to 27 percent.


2016 and GROUPS – Politics are comparative, so actual support for Clinton as a candidate would depend more than anything on her opponents, in the Democratic primaries and general election alike. That said, having 57 percent willing to give you a look (55 percent among registered voters) is not a bad starting point – and the differences among groups are telling.


In addition to the gender gap there are sharp differences between age and racial groups, generally similar to Obama’s support patterns. Young adults, age 18 to 29, support Clinton for president by nearly 2-1; that falls to an even split among seniors. And while she gets 52 percent support among whites, that jumps to 70 percent among nonwhites, a strongly Democratic group.


Clinton does less well among nonwhites than did Obama, who won re-election with 80 percent of their support last month. That said, while majorities of white men and married men say they’d oppose a Clinton candidacy, she’s backed by more than six in 10 white women and married women – two groups that Obama lost.


Among other groups, support for Clinton in 2016 tops out at eight in 10 Democrats and liberals, vs. 23 and 24 percent of Republicans and strong conservatives, respectively. About two-thirds of moderates and six in 10 independents say they’d support a Clinton candidacy.


It’s hard to see Clinton winning 23 percent of Republicans in an actual campaign; no Democrat has come close to that mark in exit polls dating back 36 years. That’s another sign that, while currently her numbers are positive, actually running for president can be messier than it looks from a popular perch at Foggy Bottom.


METHODOLOGY – This ABC News/Washington Post poll was conducted by landline and cell phone Nov. 28-Dec. 2, 2012, among a random national sample of 1,020 adults. Results have a margin of sampling error of 4 points. The survey was produced for ABC News by Langer Research Associates of New York, N.Y., with sampling, data collection and tabulation by SSRS/Social Science Research Solutions of Media, Pa.

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NATO warns Syria not to use chemical weapons


BEIRUT (Reuters) - NATO told Syrian President Bashar al-Assad on Tuesday that any use of chemical weapons in his fight against encroaching rebel forces would be met by an immediate international response.


The warning from NATO Secretary-General Anders Fogh Rasmussen came as Syrian forces bombarded rebel districts near Damascus in a sustained counter-attack to stem rebel gains around Assad's power base.


Syrian state media said a rebel mortar attack on a school had killed 28 students and a teacher.


International concern over Syria's intentions has been heightened by reports that its chemical weapons have been moved and could be prepared for use.


"The possible use of chemical weapons would be completely unacceptable for the whole international community and if anybody resorts to these terrible weapons I would expect an immediate reaction from the international community," Rasmussen told reporters at the start of a meeting of alliance foreign ministers in Brussels.


The chemical threat made it urgent for the alliance to send Patriot anti-missile missiles to Turkey, Rasmussen said.


The French Foreign Ministry referred to "possible movements on military bases storing chemical weapons in Syria" and said the international community would react if the weapons were used.


U.S. President Barack Obama on Monday told Assad not to use chemical weapons, without saying how the United States might respond. The Foreign Ministry in Damascus said it would never use such weapons against Syrians.


Western military experts say Syria has four suspected chemical weapons sites, and it can produce chemical weapons agents including mustard gas and sarin, and possibly also VX nerve agent. The CIA has estimated that Syria possesses several hundred liters of chemical weapons and produces hundreds of tonnes of agents annually.


FLIGHTS SUSPENDED


The fighting around Damascus has led foreign airlines to suspend flights and prompted the United Nations and European Union to reduce their presence in the capital, adding to a sense that the fight is closing in.


The army fightback came a day after the Syrian foreign ministry spokesman was reported to have defected in a potentially embarrassing blow to the government.


The Syrian Observatory for Human Rights said 200 people were killed across Syria on Monday, more than 60 of them around Damascus. Assad's forces bombarded districts to the south-east of the capital on Tuesday, near to the international airport, and in the rebel bastion of Daraya to the south-west.


Opposition footage posted on the Internet showed a multiple rocket launcher fire 20 rockets, which activists said was filmed at the Mezze military airport in Damascus.


Reuters could not independently verify the footage due to the government's severe reporting restrictions.


In central Damascus, shielded for many months from the full force of a civil war in which 40,000 people have been killed, one resident reported hearing several loud explosions.


"I have heard four or five thunderous blows. It could be barrel bombs," she said, referring to makeshift bombs which activists say Assad's forces have dropped from helicopters on rebel-dominated areas.


The state news agency said that 28 students and a teacher were killed near the capital when rebels fired a mortar bomb on a school. Rebels have targeted government-held residential districts of the capital.


The mainly Sunni Muslim rebel forces have made advances in recent weeks, seizing military bases, including some close to Damascus, from forces loyal to Assad, who is from Syria's Alawite minority linked to Shi'ite Islam.


Faced with creeping rebel gains across the north and east of the country, and the growing challenge around the capital, Assad has increasingly resorted to air strikes against the insurgents.


A diplomat in the Middle East said Syrian Foreign Ministry spokesman Jihad Makdissi had left the country and defected, while the British-based Observatory said it had information that he flew from Beirut on Monday afternoon heading for London.


In Beirut, a diplomat said Lebanese officials had confirmed that Makdissi spent several days in Beirut before leaving on Monday, but could not confirm his destination.


"We're aware of reports that he has defected and may be coming to the UK. We're seeking clarification," a Foreign Office spokeswoman in London said.


Makdissi was the public face to the outside world of Assad's government as it battled the 20-month-old uprising. But he had barely appeared in public for several weeks before Monday's report of his defection.


He had little influence in a system largely run by the security apparatus and the military. But Assad's opponents will see the loss of such a high profile figure, if confirmed, as further evidence of a system crumbling from within.


ESCALATED VIOLENCE


The United Nations and European Union both said they were reducing their presence in Syria in response to the escalated violence around the capital.


A spokesman for U.N. humanitarian operations said the move would not stop aid deliveries to areas which remained accessible to relief convoys.


"U.N.-funded aid supplies delivered through SARC (Syrian Arab Red Crescent) and other charities are still moving daily where the roads are open," Jens Laerke told Reuters in Geneva.


"We have not suspended our operation, we are reducing the non-essential international staff."


Three remaining international staff at the European Union delegation, who stayed on in Damascus after the departure of most Western envoys, crossed the border into Lebanon on Tuesday after pulling out of the Syrian capital.


The Syrian army appears to have focused most of its energy on Damascus, where rebels have been planning to push into the capital from the surrounding suburbs.


Neither side appears to have the upper hand in the fighting and a previous attempt by rebels last July to hold ground in the city was crushed as the fighters fell back into the suburbs and nearby countryside.


Clashes have continued around Damascus International Airport and along the airport highway, which has become an on-and-off battleground that forced foreign airlines to suspend flights to Damascus since Thursday evening.


(Additional reporting by David Brunnstrom in Brussels, Khaled Yacoub Oweis in Cairo, Erika Solomon, Oliver Holmes and Ayat Basma in Beirut, Mohammed Abbas and David Cutler in London, and Stephanie Nebehay in Geneva)



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