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CAIRO (Reuters) ? Under fierce pressure from street protests, Egypt's army chief promised on Tuesday to hand over to a civilian president by July and made a conditional offer for an immediate end to army rule.
Field Marshal Mohamed Hussein Tantawi, head of the military council that has ruled Egypt since Hosni Mubarak's overthrow on February 11, told the nation the army did not seek or want power.
"The army is ready to go back to barracks immediately if the people wish that through a popular referendum, if need be," the 76-year-old said in a surprising segment of a televised speech.
But demonstrators in Cairo's Tahrir Square, braving clouds of tear gas, derided the offer, calling the referendum a stalling tactic and chanting "Leave, leave." More clashes broke out in a nearby street leading to the Interior Ministry.
Looking far from confident, Tantawi said parliamentary polls would begin on time, starting this coming Monday, and that a presidential vote would take place in June, far sooner than the military's previous plans that would have kept it in power until late 2012 or early 2013.
Tantawi, trying to defuse a surge of popular anger reminiscent of the movement that toppled Mubarak, also said the council had accepted the resignation of Prime Minister Essam Sharaf's cabinet, which would be replaced with a national salvation government to steer Egypt to civilian rule.
A military source said Tantawi's referendum offer would come into play "if the people reject the field marshal's speech," but did not explain how the popular mood would be assessed. Tantawi may calculate that most Egyptians, unsettled by dizzying change, do not share the young protesters' appetite for breaking from the army's familiar embrace just yet.
"He is trying to say that, despite all these people in Tahrir, they don't represent the public," said 32-year-old protester Rasha, one of dozens huddled around a radio in the nearby Cafe Riche, a venerable Cairo landmark. "He wants to pull the rug from under them and take it to a public referendum."
The concessions, agreed in a meeting between the army and some politicians, have been wrenched from the military by five days of protests in Tahrir Square and elsewhere, amid violence that has killed 36 people and wounded more than 1,250.
CONCESSIONS SPURNED
The response from some protesters was crisp and dismissive, some comparing the speech to Mubarak's final, despairing attempts to save himself by offering belated concessions.
"Not enough of course," Shadi el-Ghazali Harb, a leader of the Revolutionary Youth Coalition, told Reuters.
"The military council is fully responsible for the political failure Egypt is going through now. We demand a solution that strips the military council of all its powers immediately."
It is unclear who or what institution might carry out the functions of head of state if the council were dissolved.
Anger against the generals exploded this month after a cabinet proposal to set out constitutional principles that would permanently shield the army from civilian oversight.
The demonstrators, who again braved clouds of tear gas to occupy Tahrir Square, said the army must relinquish power now.
"We demand a full purge of the system and the removal of the military council," said Fahmy Ali, one protester in Tahrir.
Protesters earlier hanged from a lamp post an effigy of Tantawi, who was Mubarak's defense minister for two decades.
In Egypt's second city of Alexandria, hundreds of protesters marched to a military base waving their shoes in disgust at Tantawi's speech, chanting: "Where is the transfer of power?"
"Tantawi's speech is just like Mubarak's. It's just to fool us," said 27-year-old Youssef Shaaban.
Clashes between police and demonstrators angry at the speech erupted in the eastern city of Ismailia, a witness said.
Protesters also took to the streets in Nile Delta cities north of Cairo, angry at the deaths and injuries in and around Tahrir, witnesses said. About 3,000 gathered in the industrial city of Mahalla al-Kubra. Some threw petrol bombs at a police building. People also demonstrated in Tanta, and some also threw petrol bombs another police building there.
The unrest has knocked Egypt's markets. The benchmark share index has fallen 11 percent since Thursday, hitting its lowest level since March 2009. The Egyptian pound fell to its weakest against the dollar since January 2005.
The United States, which gives Egypt's military $1.3 billion a year in aid, called for an end to the "deplorable" violence in Egypt and said elections there must go forward.
"We are deeply concerned about the violence. The violence is deplorable. We call on all sides to exercise restraint," White House spokesman Jay Carney said.
MEETING WITH POLITICIANS
The Muslim Brotherhood, which anticipates a strong showing in the election, was among five parties at the crisis talks with the military council. Three presidential candidates were also there. Others, including Mohamed ElBaradei, stayed away.
"The revolutionary youth are not holding dialogue with the military council. The dialogue is going on in Tahrir Square, not behind closed doors with the generals," said Khaled Mardeya, a spokesman for the January 25 Revolution Coalition.
Beyond Cairo, violence has accompanied protests in some big cities but nationwide demonstrations against army rule have yet to match the vast numbers that turned out to topple Mubarak.
In Tahrir, activists tried to control access to the square. Volunteers on motorbikes ferried casualties from clashes with security forces firing tear gas near the Interior Ministry.
The mood among protesters was determined. "The real revolution begins from today," said Taymour Abu Ezz, 58. "Nobody will leave until the military council leaves power."
Political uncertainty has gripped Egypt since Mubarak's fall, while sectarian clashes, labor unrest, gas pipeline sabotage and a gaping absence of tourists have paralyzed the economy and prompted a widespread yearning for stability.
Several banks in central Cairo were closed on Tuesday as a precaution against looting, the state news agency said.
In a stinging verdict on nine months of army control, rights group Amnesty International accused the military council of brutality sometimes exceeding that of Mubarak.
It said the military had made only empty promises to improve human rights. Military courts had tried thousands of civilians and emergency law had been extended. Torture had continued in army custody. Consistent reports spoke of security forces employing armed "thugs" to attack protesters.
(Reporting by Peter Apps in London, Marwa Awad, Omar Fahmy, Dina Zayed, Shaimaa Fayed, Tom Perry, Tamim Elyan, Patrick Werr and Edmund Blair in Cairo, Abdel Rahman Youssef in Alexandria and Yusri Mohamed in Ismailia; Writing by Alistair Lyon in Cairo; Editing by Alastair Macdonald in Cairo)
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Defense Secretary Leon Panetta is seen on Capitol Hill in Washington, Tuesday, Nov. 15, 2011, prior to testifying before the Senate Armed Services Committee hearing on security issues relating to Iraq. (AP Photo/Evan Vucci)
Defense Secretary Leon Panetta is seen on Capitol Hill in Washington, Tuesday, Nov. 15, 2011, prior to testifying before the Senate Armed Services Committee hearing on security issues relating to Iraq. (AP Photo/Evan Vucci)
Sen. John McCain, R-Ariz., ranking Republican on the Senate Armed Services Committee,right, talks with Defense Secretary Leon Panetta on Capitol Hill in Washington, Tuesday, Nov. 15, 2011 prior to Panetta testifying before the committee. (AP Photo/Evan Vucci)
WASHINGTON (AP) ? Congress' defense hawks insist the military should be spared from automatic spending cuts after a special panel failed to reach a deal on reducing the deficit.
No way, says President Barack Obama, who vowed Monday to veto any effort to undo the roughly $1 trillion in across-the-board cuts, half from domestic programs and half from defense.
"There will be no easy off-ramps on this one. We need to keep the pressure up to compromise, not turn off the pressure," Obama said. "The only way these spending cuts will not take place is if Congress gets back to work and agrees to a balanced plan to reduce the deficit by at least $1.2 trillion."
The confrontation will play out in a politically charged atmosphere, with Obama's Republican presidential rivals Mitt Romney and Rick Perry already criticizing the commander in chief for the looming defense cuts.
Actually, those big federal deficit reductions wouldn't begin until January 2013. That allows plenty of time for lawmakers to try again to produce a debt plan, or for a new post-election cast of characters ? with possibly a different president ? to reverse them.
Protectors of the Pentagon budget argue that last summer's debt accord between Obama and congressional Republicans already inflicted enough damage. That law set in motion some $450 billion in reductions to planned Pentagon spending over the next decade.
Defense hawks are backed in part by Defense Secretary Leon Panetta, who warned of a hollow fighting force and implored Congress to produce a debt plan avoiding "cuts that will tear a seam in the nation's defense."
Now the supercommittee's failure sets the stage for the automatic cuts Panetta had feared. Combined with the earlier reductions, the Pentagon would be looking at nearly $1 trillion sliced from projected spending levels over 10 years.
"Those who have given us so much have nothing more to give," said House Armed Services Committee Chairman Howard "Buck" McKeon, R-Calif., promising to introduce legislation to prevent the cuts.
Sens. John McCain of Arizona, the top Republican on the Senate Armed Services Committee, and Lindsey Graham, R-S.C., a member of the panel, said they would "pursue all options" to avoid deeper defense cuts.
"As every military and civilian defense official has stated, these cuts represent a threat to the national security interests of the United States, and cannot be allowed to occur," the two said in a joint statement.
Rep. Adam Smith of Washington state, the top Democrat on the House Armed Services Committee, said even the specter of automatic reductions "will be extremely disruptive and could lead to cut backs in defense spending well before January 2013." He implored Democrats and Republicans to act with urgency to produce a budget plan.
But there's hardly unanimity in Congress. Deficit-cutting tea partyers in the GOP are siding with liberal Democrats in signaling they're ready to allow military reductions. In addition, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., said they would abide by the consequences of last summer's deficit-fighting law ? and they control what legislation moves forward.
Freshman Sen. Rand Paul, R-Ky., a tea party favorite, even questioned the legitimacy of the outcry over the military reductions.
Paul points out that the spending cuts aren't to the military's existing budget, but rather a scaling back of the Pentagon's plan to increase its spending every year.
"If we do nothing, military spending goes up 23 percent over 10 years," Paul said in an interview on CNN Sunday. "If we sequester the money, it will still go up 16 percent. So spending is still rising under any of these plans."
According to the nonpartisan Congressional Budget Office, the planned Pentagon budget for 2021 would be some $700 billion, an increase over the current level of about $520 billion. The cuts agreed to last summer plus the automatic reductions would trim the projected budget by about $110 billion.
If the automatic cuts go through, the Pentagon would face a 10 percent reduction in its $550 billion budget in 2013. On the domestic side, education, agriculture and environmental programs would face cuts of around 8 percent.
Social Security, Medicaid and many veterans' benefits and low-income programs are exempt from automatic cuts. Medicare is limited to a 2 percent reduction.
Senate Minority Leader Mitch McConnell, R-Ky., said it is imperative for Obama "to ensure that the defense cuts he insisted upon do not undermine national security," as Panetta has warned.
McCain and Graham have been working on legislation that would undo the automatic defense reductions and instead impose a 5 percent across-the-board reduction in government spending combined with a 10 percent cut in pay for members of Congress.
The Senate resumes work next week on a massive defense bill, a possible vehicle for any effort to rework or undo the cuts. Prospects are still unclear.
"Flat out repeal of sequester? No," said G. William Hoagland, a former top GOP Senate budget aide.
Instead, Hoagland suggested that Obama could use Republican demands for an extension of the tax cuts enacted under President George W. Bush as leverage in negotiations to soften the automatic spending cuts. Congress must decide by the end of next year whether to extend the Bush tax cuts. Democrats want to allow them to expire for wealthy Americans.
Congressional Republicans and Democrats must also decide in the coming weeks whether to extend unemployment benefits for the long-term jobless and leave in place a payroll tax cut enacted last year to prop up the economy.
Another costly question is whether to fix Medicare's payment formula to prevent a 27 percent cut in doctors' pay starting Jan. 1.
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BANGKOK (AP) ? World stock markets fell Monday as a change of government in debt-laden Spain and warnings from Asian officials of a sharp growth slowdown underlined the challenges facing the world economy.
Benchmark crude fell below $97 per barrel. The dollar strengthened against the euro but slipped against the yen.
European shares retreated in early trading. Britain's FTSE 100 slipped 1.2 percent to 5,300.67. Germany's DAX dropped 1.5 percent to 5,715.68 and France's CAC-40 slid 1.3 percent to 2,956.66.
The Nikkei 225 index in Tokyo fell 0.3 percent to end at 8,348.27, its lowest closing since March 2009.
Wall Street was set to lose ground, with Dow Jones industrial futures falling 0.9 percent at 11,659 and S&P 500 futures down 1.2 percent at 1,199.80.
Market jitters were in evidence a day after Spain voted in a new government ? the third time in as many weeks that Europe's debt crisis has toppled an administration. Governments in financially troubled Greece and Italy have also fallen.
Spain dumped its ruling Socialist government Sunday for the conservative leadership of Mariano Rajoy, who inherits an economy wracked by debt and an unemployment nightmare ? which at more than 21 percent is the highest among the 17 nations that use the euro.
Rajoy also must lower Spain's soaring borrowing costs with deficit-reducing measures while preventing an already moribund economy from heading into a double-dip recession.
Adding to pessimism, Chinese Vice Premier Wang Qishan, who oversees trade and finance, said this weekend that the global economic situation is "extremely serious" and predicted the malaise is likely to be long term, state media reported.
The effects of slowing global demand were also evident in Japan, where exports fell for the first time in three months in October. Singapore's government, meanwhile, said it expects the island's economy to grow as little as 1 percent next year, down from a 5 percent expansion this year as export demand from developed countries wanes.
Hong Kong's Hang Seng fell 1.4 percent to 18,225.85 and South Korea's Kospi dropped 1 percent to 1,820.03. Australia's S&P/ASX 200 fell 0.3 percent to 4,163. Mainland Chinese shares fell slightly, with the benchmark Shanghai Composite Index inching down less than 0.1 percent to 2,415.13, its lowest close in almost one month.
Stocks that are heavily dependent on exports to the West have come under pressure recently, said Linus Yip of Hong Kong-based First Shanghai Securities. "The market right now is still worried about future economic growth, the European debt problem," Yip said.
In Tokyo trade, Mazda Motor Corp. lost 5.1 percent and Panasonic Corp. lost 2 percent. South Korea's LG Chem Ltd., which makes batteries for cars, lost 4.3 percent.
Energy and resource shares were hit by the uncertain outlook for the global economy. Hong Kong-listed China National Offshore Oil Corp., known as CNOOC, fell 3 percent. Japanese energy explorer Inpex Corp. fell 2.6 percent.
Mainland Chinese shares in textiles and railway infrastructure companies were among that market's gainers while shares in coal miners and environmental protection companies weakened.
"Earlier forecasts on credit easing haven't actually come true and the situation in Europe is also affecting sentiment here," said Li Jianfeng, an analyst at Caida Securities, based in Shanghai.
Gains were muted on Wall Street on Friday. While the Conference Board's index of leading economic indicators rose more than Wall Street analysts were expecting ? a sign that the economy may pick up in the coming months ? many investors were cautious as a key Congressional committee remained deadlocked on ways to cut the U.S. budget deficit.
The Dow Jones industrial average gained 0.2 percent to close at 11,796.16. The Standard and Poor's 500 lost less than 0.1 percent to 1,215.65. The Nasdaq composite slid 0.6 percent to 2,572.50.
Benchmark crude for December delivery was down $1 at $96.65 a barrel in electronic trading on the New York Mercantile Exchange on Monday. The contract fell $1.41 to finish at $97.41 per barrel on the Nymex on Friday.
In currency trading, the euro fell to $1.3462 from $1.3518 late Friday in New York. The dollar weakened to 76.79 yen from 76.97 yen.
___
Researcher Fu Ting in Shanghai contributed.
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A half-century in the making, Joe Paterno's impeccable reputation was shattered in a matter of days.
He's out of a job, and his name has been scraped off the Big Ten title trophy. He's been taken to task by everyone from the president of the United States to his good friend, Bobby Bowden. Flaws in his program, once barely whispered about, are now an open topic. Although Penn State says it isn't touching Paterno's statue outside Beaver Stadium, the fact that someone even asked indicates how far his stock has fallen.
The admirable graduation rates, the players who were as good off the field as they were on, the financial support for Penn State that had nothing to do with football ? all of it has been undone by the one thing Paterno did not do. Go to the police with an abuse allegation.
"This is a scandal large enough that this is going to hang on his legacy," said Frank Fitzpatrick, a Philadelphia Inquirer columnist and author of two books on Paterno and Penn State, including the new biography, "Pride of the Lions."
"It's incredibly sad, I think. That's not to excuse what he did or say he doesn't deserve it," Fitzpatrick added. "It's still sad for a guy who, I think, really did try. ... To see it all end so unceremoniously and so ugly, it's just hard to take."
The tumult isn't over, either. Penn State said Friday that the NCAA will examine the school's handling of the child sex-abuse scandal involving former defensive coordinator Jerry Sandusky, invoking that dreaded question of "institutional control."
Later that day, Paterno's son Scott announced that his father is being treated for lung cancer. The cancer, diagnosed during a follow-up visit last weekend for a bronchial illness, is treatable, and Scott Paterno said doctors are "optimistic he will make a full recovery."
Even before the news about Paterno's health, those who admired him had started to view the 84-year-old coach as a tragic figure.
"This is difficult for everybody who knows Joe or anybody who cares about Joe," former Nebraska coach Tom Osborne, a close friend of Paterno's, said last week. "I feel bad about him and his family. I feel bad about the people who were victimized ? very bad about them."
It's been two weeks since Sandusky, Paterno's one-time heir apparent, was accused of sexually abusing eight boys in a 15-year span, setting off a child sex-abuse scandal that stunned Penn State and forever altered the image of major college football's winningest coach.
Paterno is not the target of any criminal investigation. But Penn State's board of trustees fired him Nov. 9 because it felt the coach did not go far enough in alerting authorities after then-graduate assistant Mike McQueary told Paterno he witnessed an alleged assault in March 2002.
McQueary, now Penn State's wide receivers coach, told a grand jury he saw Sandusky raping a boy of about 10 in the showers at the Penn State football building. McQueary went to Paterno, though it is not clear if he described the alleged attack in as graphic detail as he did to the grand jury. Paterno then told athletic director Tim Curley and university vice president Gary Schultz, whose responsibilities included oversight of the campus police.
No one called police.
"Did he make a mistake? Sure, he made a mistake," former Ohio State coach John Cooper said. "And is he paying the price. Absolutely and rightfully so. ... But I'm not going to forget all the good things he did."
But public opinion quickly turned against the man who for so long had been the moral compass of college athletics, the one person who could always be counted on to do the right thing in a business where so many others have gone wrong.
A day after Paterno was fired, two Pennsylvania senators announced they were rescinding their support for Paterno's nomination for the prestigious Presidential Medal of Freedom. The Big Ten announced Monday it was renaming its trophy for the conference title game, saying it would be "inappropriate" to keep Paterno's name on it.
"The trophy and its namesake are intended to be celebratory and aspirational, not controversial," Big Ten commissioner Jim Delany said.
Much of the anger stems from disillusionment, said psychologist Stan Teitelbaum, author of "Sports Heroes, Fallen Idols."
Society has a need for heroes, Teitelbaum said, and Paterno fit the bill perfectly with his "Success with Honor" philosophy. He steered Penn State clear of the tawdry scandals that sullied the reputations of high-profile programs such as Ohio State, USC and Miami, and demanded that his players conduct themselves with high character and morals.
He prized education ? his name is on a library at Penn State, not an athletic facility ? and Penn State could talk about "student-athletes" without drawing snickers. The Nittany Lions had 47 academic All-Americans under Paterno, a national-best 15 in the past five years alone. Penn State's graduation rate consistently ranks among the best in the Big Ten; in 2010, its 84 percent rate trailed only Northwestern's 95.
When Paterno was revealed as flawed ? as human ? people who had invested so much faith in him felt betrayed, Teitelbaum said.
"Joe Paterno was perceived as a very benign father figure. Father figures are supposed to protect us from the dangers of the world," Teitelbaum said. "As more and more things came out, people became more and more disappointed and disappointment turns to anger. He was supposed to have spared us."
There is an element of schadenfreude in Paterno's humbling, too.
Paterno was proud of being able to claim the moral high ground and made no attempt to hide it. He once said he wouldn't retire because he didn't want to leave coaching to the Jackie Sherrills and Barry Switzers of the world.
Switzer won three national titles at Oklahoma, but his Sooners were college football's renegades. Oklahoma was slapped with three years' probation for major recruiting violations, and five players were arrested on felony charges before Switzer stepped down in June 1989. Sherrill had brushes with the NCAA at both Texas A&M and Mississippi State.
"There were a lot of people who felt Joe was sanctimonious and holier than thou and pious when there wasn't any reason to be," Fitzpatrick said. "In that sense, that attitude set him up for a fall like this. People aren't cheerful that Joe's going through something like this but some are thinking, `See, I told you. Even at mighty blessed Penn State.'
"But I don't think anyone expected it going wrong to this extent."
___
Follow Nancy Armour at http://www.twitter.com/nrarmour
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TEHRAN (Reuters) ? Iranian authorities shut down a reformist newspaper on Sunday after it published a scathing attack by an aide to Mahmoud Ahmadinejad on the president's rival conservatives, the latest sign of a split in the highest echelons of the Islamic Republic.
The aide, media adviser Ali Akbar Javanfekr, was also sentenced to a year in jail and banned from journalism over a separate publication which was deemed to have offended public decency, the semi-official Fars news agency reported.
Both incidents spotlighted a feud between Ahmadinejad's camp and others in the conservative establishment that runs the world's fifth biggest oil exporter and faces increasing international pressure over its nuclear activities.
Tehran's prosecutor's office ordered the daily Etemad to close for two months for "disseminating lies and insults to officials in the establishment," according to Fars.
In the interview in Saturday's edition, Javanfekr hit back at critics who accuse Ahmadinejad of being in the thrall of a "deviant" circle seeking to undermine the Islamic clergy, saying they had "poisoned" politics and implying many were corrupt.
"What have we 'deviated' from? Yes, we have deviated from those friends, from their beliefs, behavior and interpretations," Javanfekr, who also heads the official Iranian news agency IRNA, told Saturday's Etemad.
"If they meant the deviant current is a deviation from their beliefs, we confirm it."
The counter-attack, published verbatim over three pages, signaled the determination of Ahmadinejad's camp to fight back as Iran gears up for parliamentary elections in March.
Javanfekr's lawyer told Reuters he had not been notified of the jail sentence and three-year ban from journalism imposed by the prosecutor's office following a guilty verdict pronounced by the Press Supervisory Board earlier this month.
Abdollah Nakhaie said he would appeal the sentence which, according to the ISNA news agency, he has 20 days to do.
Javanfekr was convicted over an article published earlier this year on the historical origins of women's Islamic dress.
The article, in a supplement to the Iran daily in August, contained an interview suggesting that chadors - the traditional black dress of devout Iranian women - had their origins in 19th-century Paris, rather than being prescribed by Islam.
The suggestion outraged traditional hardliners who had already accused Ahmadinejad's faction of putting secular nationalist values ahead of its Islamic identity.
STABILITY AT STAKE
With the opposition "Green" movement crushed after protesting Ahmadinejad's 2009 re-election, the battle for power in Iran is now between rival conservatives -- the traditional religious hardliners and the more populist Ahmadinejad camp.
That rift became more apparent after Supreme Leader Ayatollah Ali Khamenei forced Ahmadinejad to reinstate the intelligence minister he sacked in April -- a move seen by the president's critics as a political maneuver.
Since then parliament and the judiciary have moved against the president, with lawmakers threatening impeachment and prosecutors arresting some people on the fringes of his faction.
Rebutting accusations that Ahmadinejad's faction sought to undermine Iran's clerical ruling system, Javanfekr said that the president had been endorsed by Khamenei.
"The great leader of the revolution called Ahmadinejad's government the government of work and effort. If they believe the government is not serving people it is better that they say they have a problem with the supreme leader," he said.
Analysts say that Khamenei prefers to keep Ahmadinejad in place rather that allow his rivals to unseat him and jeopardize stability at a time of economic difficulties and the risk of popular unrest spilling over from the nearby Arab world.
But Javanfekr said Ahmadinejad was far from a spent force and retained public support that meant he did not need the support of conservatives who backed him in 2009 as the best bet against a strong showing by reformists.
"It was not us who were ungrateful, they were the ones that did not acknowledge Ahmadinejad and his government...Ahmadinejad has popularity and does not owe them anything," he said.
Javanfekr criticized the treatment of Mohammad Sharif Malekzadeh, an ally of Ahmadinejad's top aide, who was arrested in June, saying he had been held in solitary confinement and suffered mental and physical consequences.
Etemad was among the few reformist papers still publishing after the June 2009 election. It has suffered temporary bans since for alleged violation of media law -- something critics say is a catch-all offence used to suppress dissent.
(Additional reporting by Ramin Mostafavi; Editing by Mark Heinrich)
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