US stocks soar on fiscal cliff deal

NEW YORK: US stocks shot up Wednesday on news of a fiscal cliff deal in Congress that prevented most tax increases and delayed sharp spending cuts.

Fifteen minutes into trade, the Dow Jones Industrial Average was up 215.17 points (1.64 percent) at 13,319.31.

The tech-rich Nasdaq Composite added 71.73 points (2.38 percent) at 3,091.24, while the broad-market S&P 500 gained 25.76 points (1.81 percent) at 1,451.95.

In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of a bill that avoids the "fiscal cliff" of automatic spending cuts and tax increases.

While markets were closed on Tuesday for the New Year holiday, lawmakers approved a compromise bill that raises taxes on the rich and puts off automatic $109 billion federal budget cuts for two months.

If they had failed, Americans would have been hit by sweeping tax hikes, and spending cuts would have kicked in across the government, in a combined $500 billion shock that could have undermined the tepid recovery.

The Wall Street rally reflected a sense of relief that the tax deal should help keep the US economy from slipping back into recession, said Patrick O'Hare of Briefing.com.

"Still, it seemingly ignores the fact that the tax deal, which did not include an extension of the payroll tax cut, is going to be a drag on the economy."

- AFP/de

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Delhi gang rape: CJI Altamas Kabir calls for speedy trial of case

NEW DELHI: A fast-track court to try sexual offence cases against women was inaugurated here by Chief Justice of India Altamas Kabir on Wednesday who advocated speedy trial of the case relating to the December 16 gang-rape of the 23-year-old girl who later died of injuries sustained .

The CJI, who justified the public reaction against the ghastly incident, said the offence could have been averted had the Supreme Court guidelines on removal of tinted glasses from the vehicles been followed.

"It's good to know that after the December 16 tragic incident, people have started raising their voice on crime against women," he said while expressing the hope that the fast track court at Saket district courts complex here would be operational immediately.

The CJI, however, said blame game should be avoided and the case of the paramedic, which is in the "public eye", should be decided on fast track.

"Blame game will not serve anything. We have to go to the root of the problem. This case, which is in the public eye, should be decided as early as possible," he said.

He also cautioned about the people's reaction against sending the accused for trial and calling for handing them over to the public to be dealt with by saying that it is a "dangerous reaction".

"People's reaction has been that do not send the accused to trial. Hand them over to us, we will deal with them. Hang them. But let us not get carried away. Let us deal with the matter in a manner in which we are able to do justice as early as possible. Let us show that the judiciary is behind the common man," he said.

The CJI said a fast track court particularly for trying sexual offences against women was not only necessary but also welcome and the government has also "woken up" to the need of fast track courts for such cases.

The CJI said he will try his level best with the administration to see that the other part of the case, that is the part before the matter comes to the court, is taken care of as quickly as possible.

Justice Kabir said four other fast track courts would be made operational in different parts of Delhi to show "we mean business in tackling matters of such nature".

Chief justice of the Delhi high court D Murugesan said judicial officers have been identified for the fast track courts and wherever possible, cases will be taken up on a day-to-day basis.

Apart from the CJI and the chief justice of the Delhi high court, several judges of the high court and district courts were also present at the inauguration ceremony.

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Clinton receiving blood thinners to dissolve clot

WASHINGTON (AP) — Doctors treating Secretary of State Hillary Rodham Clinton for a blood clot in her head said blood thinners are being used to dissolve the clot and they are confident she will make a full recovery.

Clinton didn't suffer a stroke or neurological damage from the clot that formed after she suffered a concussion during a fainting spell at her home in early December, doctors said in a statement Monday.

Clinton, 65, was admitted to New York-Presbyterian Hospital on Sunday when the clot turned up on a follow-up exam on the concussion, Clinton spokesman Phillipe Reines said.

The clot is located in the vein in the space between the brain and the skull behind the right ear. She will be released once the medication dose for the blood thinners has been established, the doctors said.

In their statement, Dr. Lisa Bardack of the Mount Kisco Medical Group and Dr. Gigi El-Bayoumi of George Washington University said Clinton was making excellent progress and was in good spirits.

Clinton's complication "certainly isn't the most common thing to happen after a concussion" and is one of the few types of blood clots in the skull or head that are treated with blood thinners, said Dr. Larry Goldstein, a neurologist who is director of Duke University's stroke center. He is not involved in Clinton's care.

The area where Clinton's clot developed is "a drainage channel, the equivalent of a big vein inside the skull. It's how the blood gets back to the heart," Goldstein said.

Blood thinners usually are enough to treat the clot and it should have no long-term consequences if her doctors are saying she has suffered no neurological damage from it, Goldstein said.

Clinton returned to the U.S. from a trip to Europe, then fell ill with a stomach virus in early December that left her severely dehydrated and forced her to cancel a trip to North Africa and the Middle East. Until then, she had canceled only two scheduled overseas trips, one to Europe after breaking her elbow in June 2009 and one to Asia after the February 2010 earthquake in Haiti.

Her condition worsened when she fainted, fell and suffered a concussion while at home alone in mid-December as she recovered from the virus. It was announced Dec. 13.

This isn't the first time Clinton has suffered a blood clot. In 1998, midway through her husband's second term as president, Clinton was in New York fundraising for the midterm elections when a swollen right foot led her doctor to diagnose a clot in her knee requiring immediate treatment.

Clinton had planned to step down as secretary of state at the beginning of President Barack Obama's second term. Whether she will return to work before she resigns remained a question.

Democrats are privately if not publicly speculating: How might her illness affect a decision about running for president in 2016?

After decades in politics, Clinton says she plans to spend the next year resting. She has long insisted she had no intention of mounting a second campaign for the White House four years from now. But the door is not entirely closed, and she would almost certainly emerge as the Democrat to beat if she decided to give in to calls by Democratic fans and run again.

Her age — and thereby health — would probably be a factor under consideration, given that Clinton would be 69 when sworn in, if she were elected in 2016. That might become even more of an issue in the early jockeying for 2016 if what started as a bad stomach bug becomes a prolonged, public bout with more serious infirmity.

Not that Democrats are willing to talk openly about the political implications of a long illness, choosing to keep any discussions about her condition behind closed doors. Publicly, Democrats reject the notion that a blood clot could hinder her political prospects.

"Some of those concerns could be borderline sexist," said Basil Smikle, a Democratic strategist who worked for Clinton when she was a senator. "Dick Cheney had significant heart problems when he was vice president, and people joked about it. He took the time he needed to get better, and it wasn't a problem."

It isn't uncommon for presidential candidates' health — and age — to be an issue. Both in 2000 and 2008, Sen. John McCain, R-Ariz., had to rebut concerns he was too old to be commander in chief or that his skin cancer could resurface.

Two decades after Clinton became the first lady, signs of her popularity — and her political strength — are ubiquitous.

Obama had barely declared victory in November when Democrats started zealously plugging Clinton as their strongest White House contender four years from now, should she choose to take that leap.

"Wouldn't that be exciting?" House Democratic leader Nancy Pelosi declared in December. "I hope she goes. Why wouldn't she?"

Even Republicans concede that were she to run, Clinton would be a force to be reckoned with.

"Trying to win that will be truly the Super Bowl," Newt Gingrich, the former House Speaker and 2012 GOP presidential candidate, said in December. "The Republican Party today is incapable of competing at that level."

Americans admire Clinton more than any other woman in the world, according to a Gallup poll released Monday — the 17th time in 20 years that Clinton has claimed that title. And a recent ABC News/Washington Post poll found that 57 percent of Americans would support Clinton as a candidate for president in 2016, with just 37 percent opposed. Websites have already cropped up hawking "Clinton 2016" mugs and tote bags.

Beyond talk of future politics, Clinton's three-week absence from the State Department has raised eyebrows among some conservative commentators who questioned the seriousness of her ailment after she canceled planned Dec. 20 testimony before Congress on the deadly attack on the U.S. diplomatic mission in Benghazi, Libya.

Clinton had been due to discuss with lawmakers a scathing report she had commissioned on the attack. It found serious failures of leadership and management in two State Department bureaus were to blame for insufficient security at the facility. Clinton took responsibility for the incident before the report was released, but she was not blamed. Four officials cited in the report have either resigned or been reassigned.

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Associated Press writer Ken Thomas in Washington and AP Chief Medical Writer Marilynn Marchione in Milwaukee contributed to this report.

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Senate Approves 'Fiscal Cliff' Deal, Sends to House

Two hours after a midnight deadline for action, the Senate passed legislation early New Year's Day to avert the so-called fiscal cliff with an overwhelming vote of 89-8.

Senate passage set the stage for a final showdown in the House, where a vote could come as early as today.

"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," President Obama said in a statement shortly after the vote.

"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans."

The bill extends Bush-era tax cuts permanently for individuals making less than $400,000 per year and couples making less than $450,000 but allows the top marginal tax rate on incomes above those levels to rise to 39.6 percent.

Capital gains taxes would rise to 20 percent from 15 percent.

The measure would raise the estate tax from 35 to 40 percent for estates larger than $5 million, prevent the alternative minimum tax from hammering millions of middle-class workers and extend unemployment benefits for one year.

'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video

Lawmakers also decided at the last minute to use the measure to prevent a $900 pay raise for each member of Congress due to take effect this spring.

The steep "sequester" budget cuts scheduled to go into effect with the New Year -- a $1.2 trillion hit to defense and domestic programs -- would be postponed for two months.

"I've said all along our most important priority is protecting middle-class Americans, this legislation does that," Senate Majority Leader Harry Reid, D-Nev., said early this morning prior to the vote.

The deal at hand does little to address the nation's long-term debt woes, however, and does not entirely solve the problem of the "fiscal cliff."

Indeed, the last-minute compromise -- far short from a so-called grand bargain on deficit reduction -- could set up a new showdown on the same spending cuts in two months amplified by a brewing fight on how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.

Reid said he is "disappointed" they were unable to achieve a broader deal but that the compromise was necessary.

"We tried," he said. "If we did nothing, the threat of a recession is very real."

Speaking after Reid, Senate Minority Leader Mitch McConnell, R-Ky., called the deal an "imperfect solution" and noted this should not be the model on how things get done in the Senate.

McConnell also thanked Vice President Joe Biden, who visited Capitol Hill late Monday night and brokered the deal with Senate Republicans.

The measure must now move to the Republican-led House.

Five Senate Republicans and three Democrats voted against the plan, but the large margin of passage was seen as boosting the bill's prospects in the House, even though fiscal conservatives were poised to vehemently oppose the deal when it comes to the floor for a vote.

House Speaker John Boehner of Ohio said the House would not vote on any Senate-passed measure "until House members, and the American people, have been able to review" it.

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Syria starts 2013 with aerial strikes and clashes

BEIRUT (Reuters) - Syrians woke on New Year's Day to countrywide aerial bombardment, while President Bashar al-Assad's forces and rebels fighting to topple him clashed on the outskirts of the capital.

Residents of Damascus entered the new year to the sound of artillery hitting southern and eastern districts that form a rebel-held crescent on the outskirts of the capital, the center of which is still firmly under government control.

In the center, soldiers manning checkpoints fired celebratory gunfire at midnight, causing alarm in a city where streets were largely deserted.

"How can they celebrate? There is no 'Happy New Year'," Moaz al-Shami, an opposition activists who lives in the capital's central Mezzeh district, said over Skype, his voice trembling with anger.

He said rebel fighters attacked one checkpoint in the district of Berzeh early on Tuesday. Opposition groups said mortar bombs hit the southwest suburb of Daraya, where the army launched a military offensive on Monday to retake the battered district.

Assad's air force pounded Damascus's eastern suburbs, as well as rebel-held areas in the second city Aleppo, and several rural towns and villages, opposition activists said.

An estimated 45,000 people have been killed in the revolt, which started in early 2011 with peaceful protests demanding democratic reforms but turned into an armed uprising after months of attacks on protesters by security forces.

A resident of the central city of Homs, who asked to remain anonymous, said shells had landed on the Old City early on Tuesday.

Homs lies on the strategic north-south highway and parts of the ancient city have been leveled during months of clashes. Government forces ousted rebels from the city early last year but militants have slowly crept back in.

"The Old City is under siege. There is shelling from all sides," he said.

The opposition-linked Syrian Observatory for Human Rights, a British-based monitoring group, reported 160 people killed on the final day of 2012, including at least 37 government troops. The group's reports cannot be verified.

BOMBARDMENT

The civil war in Syria has become the longest and deadliest of the conflicts that rose out of the uprisings that swept through the Arab world over the past two years.

Many Sunni Muslims, the majority in Syria, back the rebellion, while Assad, who hails from the Shi'ite-derived Alawite minority sect, is backed by some minorities who fear revenge if he falls. His family has ruled Syria harshly since his father seized power in a coup 42 years ago.

Assad's forces have lately relied more on aerial and artillery bombardment, rather than infantry. Residential areas where rebels base themselves have been targeted, killing civilians unable to flee. Schools and queues of people buying bread have been hit.

Rebels have taken swathes of the north and the east but have struggled to hold cities, complaining that they are defenseless against Assad's Soviet-built air force.

A year ago, many diplomats and analysts predicted Assad would leave power in 2012. But he has proved resilient and none of his inner circle have defected. He still largely retains control of his armed forces.

Diplomatic efforts to end the war have faltered, with the rebels refusing to negotiate unless Assad leaves power and him pledging to fight until death.

Most Western and Arab states have called for him to leave power. He is supported by Russia and Shi'ite Iran.

In the final days of 2012, international mediator Lakhdar Brahimi called on countries to push the sides to talk, saying Syria faced a choice of "hell or the political process".

One Damascus resident, who asked not to be identified for security reasons, said the usual new year's eve crowds were absent from the increasingly isolated capital.

"There was hardly anyone on the streets, no cars, no pedestrians. Most restaurants, cafes and bars were empty," she said. Some young people gathered at three bars in the old city.

"There was music but nobody was dancing. They just sat there with a drink in their hands and smoking. I don't think I saw one person smile," she said. The midnight gunfire caused alarm.

"It was very scary. No one knew what was going on. People got very nervous and started making phone calls. But then I discovered that at least on my street, the gunfire was celebratory."

(Editing by Peter Graff and Alison Williams)

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Football: Brazil starlet Lucas relishing PSG challenge

DOHA: Brazilian international midfielder Lucas Moura said Tuesday he is ready to embrace the "challenge" at an evolving Paris Saint-Germain.

Lucas, 20, signed from Sao Paulo in the summer on a four-and-a-half-year deal worth 40 million euros as PSG held off competition from the likes of Manchester United and Real Madrid to snare a player hailed as one of the bright hopes of the Brazilian team.

"It's a real challenge for me," said Lucas, who has scored three goals in 22 appearances for Brazil.

"PSG is in full evolution. (Sporting director) Leonardo helped me a lot to take the decision to sign when I could have continued with my former team in Brazil until season's end.

"It's a very important step in my career. There are stronger competitions in Europe. PSG has a long history with Brazilian players and I hope I'll be able to write a new page in this history."

PSG president Nasser al-Khelaifi added: "We're very happy to start the year with one of the world's best players."

Lucas, who has joined his new teammates at a training camp in Qatar, could make his debut in a friendly against Qatari champions Lekhwiya on Wednesday, four days before PSG's French Cup round-of-64 match against Arras in Calais.

Khelaifi said the club was not planning to recruit any more players in the January transfer window, adding however that "anything could happen".

"We've got a great team with some great players, I don't think we need to recruit," he said.

"We've got a month ahead of us. For the moment, we're not planning on recruiting anyone but I don't know, there could be injuries, anything can happen."

Khelaifi added: "PSG today wants to build a big European club and place itself among the best in Europe and the world.

"We have to spend money for that and act like the other big clubs. If we hadn't have spent this much, we wouldn't be at this level."

- AFP/fa

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Why not name and honour Delhi rape victim? Shashi Tharoor tweets

NEW DELHI: In remarks that can stoke a controversy, Union minister Shashi Tharoor on Tuesday favoured making public the identity of the 23-year-old gang-rape victim wondering what interest is served by keeping her name under wraps.

Tharoor, the minister of state for human resources development, also said the revised anti-rape legislation should be named after the victim if her parents do not have any objection.

"Wondering what interest is served by continuing anonymity of #DelhGangRape victim. Why not name&honour her as a real person w/own identity?" he asked on micro-blogging site Twitter.

"Unless her parents object, she should be honoured&the revised anti-rape law named after her. She was a human being w/a name,not just a symbol," Tharoor, who is known for speaking his mind, said.

Under the law, the identity of a rape victim cannot be disclosed and printing or publishing the name or any matter which may make known the identity of any person against whom rape is committed is an offence under section 228-A of Indian Penal Code.

His comments also came close on the heels of Delhi Police registering a case against an English daily for publishing material which could lead to the identification of the victim.

Tharoor's comments sparked instant reactions on Twitter with people supporting and questioning his suggestions.

"Why are you after creating honours, idols and temples again instead of making real changes to criminal justice system?" Chirdeep, one of the users, asked.

Anil Wanvari, however, wrote: "A good suggestion. This is exactly what I had recommended four days ago. Cheers!"

The girl was gang-raped and brutally assaulted allegedly by six persons in a moving bus in south Delhi on December 16. She died in a Singapore hospital on December 29.

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Kenya hospital imprisons new mothers with no money

NAIROBI, Kenya (AP) — The director of the Pumwani Maternity Hospital, located in a hardscrabble neighborhood of downtown Nairobi, freely acknowledges what he's accused of: detaining mothers who can't pay their bills. Lazarus Omondi says it's the only way he can keep his medical center running.

Two mothers who live in a mud-wall and tin-roof slum a short walk from the maternity hospital, which is affiliated with the Nairobi City Council, told The Associated Press that Pumwani wouldn't let them leave after delivering their babies. The bills the mothers couldn't afford were $60 and $160. Guards would beat mothers with sticks who tried to leave without paying, one of the women said.

Now, a New York-based group has filed a lawsuit on the women's behalf in hopes of forcing Pumwani to stop the practice, a practice Omondi is candid about.

"We hold you and squeeze you until we get what we can get. We must be self-sufficient," Omondi said in an interview in his hospital office. "The hospital must get money to pay electricity, to pay water. We must pay our doctors and our workers."

"They stay there until they pay. They must pay," he said of the 350 mothers who give birth each week on average. "If you don't pay the hospital will collapse."

The Center for Reproductive Rights, which filed the suit this month in the High Court of Kenya, says detaining women for not paying is illegal. Pumwani is associated with the Nairobi City Council, one reason it might be able to get away with such practices, and the patients are among Nairobi's poorest with hardly anyone to stand up for them.

Maimouna Awuor was an impoverished mother of four when she was to give birth to her fifth in October 2010. Like many who live in Nairobi's slums, Awuor performs odd jobs in the hopes of earning enough money to feed her kids that day. Awuor, who is named in the lawsuit, says she had saved $12 and hoped to go to a lower-cost clinic but was turned away and sent to Pumwani. After giving birth, she couldn't pay the $60 bill, and was held with what she believes was about 60 other women and their infants.

"We were sleeping three to a bed, sometimes four," she said. "They abuse you, they call you names," she said of the hospital staff.

She said saw some women tried to flee but they were beaten by the guards and turned back. While her husband worked at a faraway refugee camp, Awuor's 9-year-old daughter took care of her siblings. A friend helped feed them, she said, while the children stayed in the family's 50-square-foot shack, where rent is $18 a month. She says she was released after 20 days after Nairobi's mayor paid her bill. Politicians in Kenya in general are expected to give out money and get a budget to do so.

A second mother named in the lawsuit, Margaret Anyoso, says she was locked up in Pumwani for six days in 2010 because she could not pay her $160 bill. Her pregnancy was complicated by a punctured bladder and heavy bleeding.

"I did not see my child until the sixth day after the surgery. The hospital staff were keeping her away from me and it was only when I caused a scene that they brought her to me," said Anyoso, a vegetable seller and a single mother with five children who makes $5 on a good day.

Anyoso said she didn't have clothes for her child so she wrapped her in a blood-stained blouse. She was released after relatives paid the bill.

One woman says she was detained for nine months and was released only after going on a hunger strike. The Center for Reproductive Rights says other hospitals also detain non-paying patients.

Judy Okal, the acting Africa director for the Center for Reproductive Rights, said her group filed the lawsuit so all Kenyan women, regardless of socio-economic status, are able to receive health care without fear of imprisonment. The hospital, the attorney general, the City Council of Nairobi and two government ministries are named in the suit.

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Associated Press reporter Tom Odula contributed to this report.

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Deal or No Deal, 'Cliff' Debate Will Linger Into 2013

Dec 31, 2012 6:00am

AP Photo/ Evan Vucci

Analysis

The fiscal cliff is just the beginning.

Regardless of whether Democrats and Republicans reach some kind of last-minute bargain to avoid the worst effects of tax hikes and spending cuts, the disaster that has been the fiscal cliff negotiations has broad implications for the Washington agenda in 2013 and beyond.

The tone has been set for the new year, and possibly for the rest of President Obama’s time in office: Washington’s divisions are the only point that matters anymore. Call if dysfunction or call it just plain broken, just don’t call it capable of even small legislative moves that involve compromise.

Hopes of a grand bargain on fiscal policy, involving entitlement spending, tax rates, and the debt ceiling, disappeared weeks ago. All that’s left are fading possibilities involving the delaying portions of tax increases and restoring some planned cuts.

Those are moves that actually make the deficit outlook worse. More saliently, they should be the politically easy things to get done, yet Congress is paralyzed and the president appears powerless to do anything meaningful to prod action.

The other items Obama ticked through this weekend as part of his second-term agenda – immigration reform, energy and environmental policy, infrastructure investments, gun control – look like dreams in this environment.

The causes are manifold, and the blame doesn’t have to be equally distributed for the ramifications to be real. The fact is that Republicans – who will control at least one house of Congress for at least half of the president’s second term – do not now and may not ever see sufficient political benefit to offer the types of concessions Democrats are insisting on.

If an election couldn’t change that, there’s precious little left that can. Name the issue and it’s all too easy to see similar dynamics derailing meaningful reform.

Washington is now broken beyond the point where bold individual leadership can even fix it. The forces at play are bigger than the ability of the president, House Speaker John Boehner, or any other person or persons to turn them around without the certain promise of a revolt in the party ranks that would leave them out of effective power.

The cliff metaphor suggests a jump into a void, but at least one that has a bottom. Yet as the nation watches this slow-motion wreck, the depths of dysfunction have yet to be fully explored.

SHOWS: World News

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Assad's forces battle to retake Damascus suburb

AMMAN (Reuters) - Elite Syrian government troops backed by tanks battled on Monday to recapture a strategic Damascus suburb from rebels who have advanced within striking distance of the center of Syria's capital.

Five people, including a child, died from army rocket fire that hit the Daraya suburb during the fighting, opposition activists said. Daraya is part of a semi-circle of Sunni Muslim suburbs south of the capital that have been at the forefront of the 21-month-old revolt against President Bashar al-Assad.

"This is the biggest attack on Daraya in two months. An armored column is trying to advance but it is being held (back) by the Free Syrian Army," said Abu Kinan, an opposition activist in the area, referring to a rebel group.

Clashes were also reported near the airport in Aleppo, Syria's largest city, which is in the north. Insurgents have made that airport a target in the hope of limiting government access to Aleppo, which is largely under rebel control.

Rebels have taken much of the north and east of Syria over the past six months, but government forces still hold most of the densely populated southwest around the capital, the main north-south highway and the Mediterranean coast.

Government forces scored a victory on Saturday, pushing rebels out of Deir Baalbeh, a district in Homs, an important central city that straddles the highway linking Damascus with the north and the Mediterranean.

Some opposition activists have said scores or even hundreds of people were executed in Deir Baalbeh by troops that seized it after several days of fighting. However, reports of killings there on a large scale could not be verified.

More than 45,000 people are estimated to have been killed in the 21-month war, the longest and deadliest of the revolts that began throughout the Arab world two years ago. Mainly Sunni Muslim rebels are fighting to topple Assad, a member of the Alawite minority sect whose family has ruled Syria since his father seized power 42 years ago in a coup.

The opposition refuses to hold peace talks unless Assad relinquishes power, and military successes over the last six months have reinforced its belief it can drive him out by force.

However, government troops still heavily outgun the fighters and maintain air bases scattered across the country.

The Damascus suburbs have become one of the major fronts of the war, with the rebels hoping to finally bring their uprising to the capital, heart of Assad's power.

Activist Abu Kinan said that tens of thousands of civilians had fled Daraya during weeks of government assault on the suburb, but that 5,000 remained, along with hundreds of rebels. Daraya is located near the main southern highway connecting Damascus to the Jordanian border 85 km (50 miles) to the south.

Activists said Republican Guard forces are trying to push back rebels who have been slowly advancing from the outskirts of Damascus to within striking distance of government targets and central districts inhabited by Assad's Alawite minority sect.

Assad's forces have mostly relied on aerial and artillery bombardment, rather than infantry. Rebels have been able take outlying towns and have clashed with government troops near Damascus International Airport, halting flights by foreign airlines.

Another activist in Damascus with links to rebels, who did not want to be named, said Daraya has been a firing position for rebels using mortars and homemade rockets. From it, they have been able to hit a huge presidential complex located on a hilltop overlooking Damascus and target pro-Assad shabbiha militia in an Alawite enclave nearby known as Mezze 86.

"So far they have missed the palace but they are getting better. I think the regime has realized that it no longer can afford to have such a threat so close by, but it has failed to overrun Daraya before," he said.

"HELL OR THE POLITICAL PROCESS"

The opposition is backed by most Western and Arab states, while Assad has enjoyed the diplomatic protection of Moscow, which sells arms to his government and maintains a naval base in one of his ports.

Western countries have been searching for signs that Moscow is lifting its protection of Assad, hoping that would bring him down much as Russia's withdrawal of support heralded the fall of Serbian leader Slobodan Milosevic 12 years ago.

Moscow said on Saturday that it has no power to make Assad leave office, and accused the rebels of prolonging the bloodshed by refusing to negotiate with him.

U.N. envoy Lakhdar Brahimi has called on outside powers to push all sides to talk, arguing that Syria faces a choice of "hell or the political process".

Brahimi is touting a peace plan agreed to in principle by international powers six months ago, but the plan does not explicitly call for Assad to be excluded from power, which the opposition regards as a precondition to any talks.

The opposition-linked Syrian Observatory for Human Rights said that rebels clashed with government troops near Aleppo's international airport. Rami Abdelrahman, the British-based Observatory's director, told Reuters by phone that fighting flared on Sunday night and continued into Monday morning.

He said no flights were departing or arriving from the airport. Syria's state airline canceled at least one flight there over the weekend.

Nevertheless, the government's seizure of Deir Baalbeh in Homs is a reminder that its forces are still capable of recapturing territory from the lightly armed rebels. Syria's state news agency SANA said government forces seized a large cache of weapons and ammunition after capturing the district.

(Writing by Peter Graff; Editing by Oliver Holmes and Mark Heinrich)

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