Clinton Says Budget Cuts Undermine Security

An energized Secretary of State Hillary Clinton stood her ground today, telling the Senate Foreign Relations Committee that she has overseen plans to secure diplomatic outposts around the world while cuts in State Department funding undermine those efforts.

Citing a report by the department's Accountability Review Board on the security failures that led to the deaths of four Americans in Benghazi, Libya, during an attack last year, Clinton said the board is pushing for an increase in funding to facilities of more than $2 billion per year.

"Consistent shortfalls have required the department to prioritize available funding out of security accounts," Clinton told the Senate this morning, while again taking responsibility for the Benghazi attack. "And I will be the first to say that the prioritization process was at times imperfect, but as the ARB said, the funds provided were inadequate. So we need to work together to overcome that."

Clinton, showing little effect from her recent illnesses, choked up earlier in discussing the Benghazi attack.

"I stood next to President Obama as the Marines carried those flag-draped caskets off the plane at Andrews," Clinton said this morning, her voice growing hoarse with emotion. "I put my arms around the mothers and fathers, sisters and brothers, sons and daughters."

The outgoing secretary of state was the only witness to giving long-awaited testimony before the Foreign Relations Committee this morning, and will appear before the House Foreign Affairs Committee at 2 p.m.

Molly Riley/UPI via Newscom

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The secretary, who postponed her testimony in December, started today by giving context to the terrorist attack.

"Any clear-eyed examination of this matter must begin with this sobering fact," Clinton began. "Since 1988, there have been 19 Accountability Review Boards investigating attacks on American diplomats and their facilities."

But the secretary did not deny her role in the failures, saying that as secretary of state, she has "no higher priority and no greater responsibility" than protecting American diplomats abroad like those killed in Benghazi.

"As I have said many times, I take responsibility, and nobody is more committed to getting this right," Clinton said. "I am determined to leave the State Department and our country safer, stronger and more secure."

Clinton testified that the United States needs to be able to "chew gum and walk at the same time," working to shore up its fiscal situation while also strengthening security, and she refuted the idea that across-the-board cuts slated to take place in March, commonly referred to as sequestration, were the way to do that."

"Now sequestration will be very damaging to the State Department and USAID if it does come to pass, because it throws the baby out with the bath," Clinton said.

While the State Department does need to make cuts in certain areas, "there are also a lot of very essential programs … that we can't afford to cut more of," she added.

More than four months have passed since the attack killed U.S. Ambassador Christopher Stevens and three other Americans in Libya. These meetings, during which Clinton discussed the report on State Department security failures by the Accountability Review Board, were postponed because of her recent illness.

Clinton told the Senate that the State Department is on track to have 85 percent of action items based on the recommendations in the Accountability Review Board report accomplished by March, with some already implemented.

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Cameron promises Britons straight choice on EU exit

LONDON (Reuters) - Prime Minister David Cameron promised on Wednesday to give Britons a referendum choice on whether to stay in the European Union or leave if he wins an election in 2015, placing a question mark over Britain's membership for years.

Cameron ended months of speculation by announcing in a speech the plan for a vote sometime between 2015 and the end of 2017, shrugging off warnings that this could imperil Britain's economic prospects and alienate its biggest trading partner.

He said the island nation, which joined the EU's precursor European Economic Community 40 years ago, did not want to retreat from the world, but public disillusionment with the EU was at "an all-time high".

"It is time for the British people to have their say. It is time for us to settle this question about Britain and Europe," Cameron said. His Conservative party will campaign for the 2015 election promising to renegotiate Britain's EU membership.

"When we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice to stay in the European Union on these new terms; or come out altogether. It will be an in-out referendum."

The speech firmly ties Cameron to an issue that was the bane of a generation of Conservative leaders. In the past, he has avoided partisan fights over Europe, the undoing of the last two Conservative prime ministers, John Major and Margaret Thatcher.

Britain would seek to claw back powers from Brussels, he said, a proposal that will be difficult to sell to other European countries. London will do an "audit" to determine which powers Brussels has that should be delegated to member states.

Sterling fell to its lowest in nearly five months against the dollar on Wednesday as Cameron was speaking.

The response from EU partners was predictably frosty. French Foreign Minister Laurent Fabius quipped: "If Britain wants to leave Europe we will roll out the red carpet for you," echoing Cameron himself, who once used the same words to invite rich Frenchmen alienated by high taxes to move to Britain.

German Foreign Minister Guido Westerwelle said his country wanted Britain to remain a full EU member, but London could not expect to pick and choose the aspects of membership it liked.

Business leaders have warned that the prospect of years of doubt over Britain's EU membership would damage the investment climate.

"Having a referendum creates more uncertainty and we don't need that," Martin Sorrell, chief executive of advertising giant WPP, told the World Economic Forum in Davos.

"This is a political decision. This is not an economic decision. This isn't good news. You added another reason why people will postpone investment decisions."

The speech also opens a rift with Cameron's junior coalition partners, the Liberal Democrats. Their leader, Deputy Prime Minister Nick Clegg, said the plan would undermine a fragile economic recovery.

And even allies further afield are wary: the United States has said it wants Britain to remain inside the EU with "a strong voice".

EUROSCEPTICS THRILLED

Cameron has been pushed into taking such a strong position in part by the rise of the UK Independence Party, which favors complete withdrawal from the EU and has climbed to third in opinion polls, mainly at the expense of the Conservatives.

"All he's trying to do is to kick the can down the road and to try and get UKIP off his back," said UKIP leader Nigel Farage.

Eurosceptics in Cameron's party were thrilled by the speech. Conservative lawmaker Peter Bone called it "a terrific victory" that would unify 98 percent of the party. "He's the first prime minister to say he wants to bring back powers from Brussels," Bone told Reuters. "It's pretty powerful stuff".

Whether Cameron will ever hold the referendum remains as uncertain as the Conservatives' chances of winning the next election in 2015.

They trail the opposition Labour party in opinion polls, and the coalition government is grappling with a stagnating economy as it pushes through public spending cuts to reduce Britain's large budget deficit.

Cameron said he would prefer Britain, the world's sixth biggest economy, to remain inside the 27-nation EU. As long as he secured the reforms he wants, he would campaign for Britain to stay inside the EU "with all my heart and soul".

But he also made clear he believed the EU must be radically reformed. It was riskier to maintain the status quo than to change, he said.

"The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy," he said.

"WAFER THIN" CONSENT

The euro zone debt crisis was forcing the bloc to change, and Britain would fight to make sure new rules were fair to countries that didn't use the common currency, he said. Britain is the largest of the 10 EU members that do not use the euro.

Democratic consent for the EU in Britain was now "wafer thin", he said, reflecting the results of opinion polls that show a slim majority would vote to leave the bloc.

"Some people say that to point this out is irresponsible, creates uncertainty for business and puts a question mark over Britain's place in the European Union," said Cameron. "But the question mark is already there: ignoring it won't make it go away."

Asked after the speech whether other EU countries would agree to renegotiate Britain's membership, Cameron said he was an optimist and that there was "every chance of success."

"I want to be the prime minister who confronts and gets the right answer for Britain on these kind of issues," he said.

It is nearly 40 years since British voters last had a say in a referendum on Britain's membership of the European club. A 1975 vote saw just over 67 percent opt to stay inside with nearly 33 percent wanting to leave.

(Additional reporting by Paul Taylor in Davos and Alexandra Hudson in Berlin; Editing by Guy Faulconbridge and Peter Graff)

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Japan presses Algeria for answers as toll hits nine

ALGIERS: A senior Japanese official met Algeria's prime minister on Wednesday to press for an explanation of the gas plant siege, as Tokyo confirmed the deaths of two more nationals, taking its toll to nine.

Senior Vice Foreign Minister Shunichi Suzuki arrived aboard a government jet that is to repatriate the bodies of those known to have been killed in the hostage crisis, along with the seven Japanese who survived.

Tokyo announced late Wednesday that it knew for sure that nine Japanese were killed after Islamist gunmen overran the desert facility. One Japanese citizen remains unaccounted for.

"Unfortunately, we have been able to confirm two more deaths," said Chief Cabinet Secretary Yoshihide Suga. "The Japanese government expresses sincere condolences to the families and people concerned."

"The use of violence cannot be tolerated for any reason. We firmly condemn acts of terror," he said adding the government would do its utmost to confirm the fate of the final missing person.

Seventeen Japanese were at the facility in In Amenas when jihadists struck last Wednesday at the start of a four-day siege that left dozens of foreigners dead. Seven of them made it to safety.

Suzuki carried a letter to Algerian President Abdelaziz Bouteflika from Japan's Prime Minister Shinzo Abe, Suga told reporters in Tokyo earlier.

As well as Prime Minister Abdelmalek Saleki, Suzuki also met Foreign Minister Mourad Medelci, Japan's Kyodo News reported, citing Tokyo's foreign ministry.

Japan has asked Algeria to fully investigate events at the gas plant and exactly how individuals died, Suga said in Tokyo.

"Algeria has promised to cooperate as much as possible," he said.

Algeria has said 37 foreigners of eight different nationalities and an Algerian were killed in the siege, which ended on Saturday.

Several people are still missing and the bodies of others are so badly charred that they have not been identified.

Wednesday's visit came as it emerged that Britain, Japan, the United States and other countries whose nationals were caught up in the events at the In Amenas plant issued a joint demarche to Algeria last Friday.

A demarche is a formal diplomatic move in which a country's stance is conveyed in person -- rather than by note -- to another government.

In a conference telephone call, vice foreign minister Minoru Kiuchi told foreign minister Medelci that Tokyo wanted Algiers to do all it could to protect captives.

"Japan is strongly concerned about acts that put the lives of the hostages at risk, and it is regrettable that the Algerian government pressed military rescue operations," he said, according to the foreign ministry.

Japan was among the more forthright of nations as the hostage crisis unfolded, summoning Algiers' ambassador to demand answers and to push for military restraint as armed forces surrounded the plant.

The Japanese plane's arrival in Algiers came as Tokyo announced it was shutting its embassy in neighbouring Mali, evacuating staff and urging its nationals there to leave because of the deteriorating security situation.

The kidnappers claimed they launched their attack in protest at Algeria's complicity in a French military campaign against Islamists in Mali.

The Japanese death toll in Algeria -- the highest in a terror attack since Al-Qaeda crashed airliners into New York's Twin Towers when 24 Japanese died -- has shaken a country not accustomed to its citizens being made targets abroad.

There has been blanket media coverage of events half a world away and anguished demands for more to be done to protect Japanese working in trouble spots, including beefing up spy networks.

Kyodo on Wednesday said Suga indicated Tokyo's willingness to consider increasing the number of defence attaches at Japanese embassies to strengthen the country's ability to gather information.

"I am aware of the need. We need to think about the most effective (crisis-response) measures," Suga said.

-AFP/ac

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Surface RT tablet to get update glitch fix -- in February

Hang in there, Surface RT users.

(Credit:
Josh Miller/CNET)

Microsoft is working on a fix for Windows RT users hit by application-updating problems that seemingly were introduced by the latest set of updates Microsoft pushed out for the operating system earlier this month.

As The Next Web noted late last week, some Surface RT users have not been able to access the Windows Store or Windows Update since applying the latest set of Patch Tuesday fixes, rolled out on January 8. A firmware update for Surface RT devices was also part of the batch of updates delivered at that time.

A Microsoft spokesperson said the company expects to have a fix ready by early February. Here's the official statement:

Some Windows RT customers who attempted to apply January's bulletins had issues installing updates. Specifically, impacted Windows RT devices went into connected standby mode during the download of updates from Windows Update, causing the connection to be disrupted. We apologize for any inconvenience this may have caused and are working to correct the issue; we expect to have a fix in place in the first week of February.

The spokesperson's statement noted that the coming fix will be for all ARM-based Windows RT devices. Surface RTs comprise the significant majority of systems running the Windows RT operating system at this point.

Microsoft officials announced yesterday that the company will expand Surface RT's availability to customers in 13 Western European markets beyond the countries where it is available now. (Surface RT is already available in Australia, Canada, China, France, Germany, Hong Kong, the United Kingdom and the U.S.) Microsoft also plans to make available a 64GB version of the Surface RT that isn't bundled with the black Touch Cover for $599.

One final note: As part of Microsoft's Surface-related announcements yesterday, officials started using the slightly shorter (but still awful) "Surface Windows RT" and "Surface Windows 8 Pro" names to refer to the first two Microsoft-made PC/tablet hybrids. Before yesterday, the products were known officially as "Surface With Windows RT" and "Surface With
Windows 8 Pro." I'm not sure why Microsoft doesn't just call them Surface RT and
Surface Pro like most of the rest of us do. But there you have it.

This story originally appeared at ZDNet under the headline "Microsoft to deliver fix for Surface RT users hit by application-update problems.

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Netanyahu likely clings to job in Israel election

Updated at 6:59 a.m. Eastern.

JERUSALEM Israel's parliamentary election ended Wednesday in a stunning deadlock between Prime Minister Benjamin Netanyahu's hard-line bloc and center-left rivals, forcing the badly weakened Israeli leader to scramble to cobble together a coalition of parties from both camps, despite dramatically different views on Mideast peacemaking and other polarizing issues.

Israeli media said that with 99.8 percent of votes counted on Wednesday morning, each bloc had 60 of parliament's 120 seats. Commentators said Netanyahu, who called early elections expecting easy victory, would be tapped to form the next government because the rival camp drew 12 of its 60 seats from Arab parties who've never joined a coalition.

That means the right-wing Netanyahu will have to form a coalition with moderates who support peace talks with the Palestinians, reports CBS Radio News correspondent Robert Berger. That could help Netanyahu improve ties with the U.S., but it could also mean he is only able to build an unstable coalition government that won't last.

A startlingly strong showing by a political newcomer, the centrist Yesh Atid party, turned pre-election forecasts on their heads and dealt Netanyahu his surprise setback.

Yesh Atid, or There is a Future, a party headed by political newcomer Yair Lapid, is now Netanyahu's most likely partner. Lapid has said he would only join a government committed to sweeping economic changes and a resumption of peace talks with the Palestinians.

Addressing his supporters early Wednesday, Netanyahu vowed to form as broad a coalition as possible. He said the next government would be built on principles that include reforming the contentious system of granting draft exemptions to ultra-Orthodox Jewish men and the pursuit of a "genuine peace" with the Palestinians. He did not elaborate, but the message seemed aimed at Lapid.

Shortly after the results were announced, Netanyahu called Lapid and offered to work together. "We have the opportunity to do great things together," Netanyahu was quoted as saying by Likud officials.

Netanyahu's Likud-Yisrael Beitenu alliance was set to capture about 31 of the 120 seats, significantly fewer than the 42 it held in the outgoing parliament and below the forecasts of recent polls.

With his traditional allies of nationalist and religious parties, Netanyahu could put together a shaky majority of 61 seats, results showed. But it would be virtually impossible to keep such a narrow coalition intact, though it was possible he could take an additional seat or two as numbers trickled in throughout the night.

The results capped a lackluster campaign in which peacemaking with the Palestinians, traditionally the dominant issue in Israeli politics, was pushed aside. Netanyahu portrayed himself as the only candidate capable of leading Israel at a turbulent time, while the fragmented opposition targeted him on domestic economic issues.

Israeli actor, journalist and author Yair Lapid, leader of the Yesh Atid party, speaks to supporters, Jan. 23, 2013 at his party headquarters in Tel Aviv.

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Getty

Netanyahu's goal of a broader coalition will force him to make some difficult decisions. Concessions to Lapid, for instance, will alienate his religious allies. In an interview last week with The Associated Press, Lapid said he would not be a "fig leaf" for a hard-line, extremist agenda.

Lapid's performance was the biggest surprise of the election. The one-time TV talk show host and son of a former Cabinet minister was poised to win 19 seats, giving him the second-largest faction in parliament.

Presenting himself as the defender of the middle class, Lapid vowed to take on Israel's high cost of living and to end the contentious system of subsidies and draft exemptions granted to ultra-Orthodox Jews while they pursue religious studies. The expensive system has bred widespread resentment among the Israeli mainstream.

Thanks to his strong performance, Lapid is now in a position to serve as the kingmaker of the next government. He will likely seek a senior Cabinet post and other concessions.

Yaakov Peri, a member of Lapid's party, said it would not join unless the government pledges to begin drafting the ultra-Orthodox into the military, lowers the country's high cost of living and returns to peace talks. "We have red lines. We won't cross those red lines, even if it will cost us sitting in the opposition," Peri told Channel 2 TV.

Addressing his supporters, a beaming Lapid was noncommittal, calling only for a broad government with moderates from left and right. "Israelis said no to the politics of fear and hatred," he said. "And they said no to extremism and anti-democracy."

There was even a distant possibility of Lapid and more dovish parties teaming up to block Netanyahu from forming a majority.

"It could be that this evening is the beginning for a big chance to create an alternative government to the Netanyahu government," said Shelly Yachimovich, leader of the Labor Party, which won 15 seats on a platform pledging to narrow the gaps between rich and poor.

Although that seemed unlikely, Netanyahu clearly emerged from the election in a weakened state.

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Group Finds More Fake Ingredients in Popular Foods

It's what we expect as shoppers—what's in the food will be displayed on the label.

But a new scientific examination by the non-profit food fraud detectives the U.S. Pharmacopeial Convention (USP), discovered rising numbers of fake ingredients in products from olive oil to spices to fruit juice.

"Food products are not always what they purport to be," Markus Lipp, senior director for Food Standards for the independent lab in Maryland, told ABC News.

In a new database to be released Wednesday, and obtained exclusively by ABC News today, USP warns consumers, the FDA and manufacturers that the amount of food fraud they found is up by 60 percent this year.

USP, a scientific nonprofit that according to their website "sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide" first released the Food Fraud Database in April 2012.

The organization examined more than 1,300 published studies and media reports from 1980-2010. The update to the database includes nearly 800 new records, nearly all published in 2011 and 2012.

Among the most popular targets for unscrupulous food suppliers? Pomegranate juice, which is often diluted with grape or pear juice.

"Pomegranate juice is a high-value ingredient and a high-priced ingredient, and adulteration appears to be widespread," Lipp said. "It can be adulterated with other food juices…additional sugar, or just water and sugar."

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Lipp added that there have also been reports of completely "synthetic pomegranate juice" that didn't contain any traces of the real juice.

USP tells ABC News that liquids and ground foods in general are the easiest to tamper with:

• Olive oil: often diluted with cheaper oils


• Lemon juice: cheapened with water and sugar


• Tea: diluted with fillers like lawn grass or fern leaves


• Spices: like paprika or saffron adulterated with dangerous food colorings that mimic the colors

Milk, honey, coffee and syrup are also listed by the USP as being highly adulterated products.

Also high on the list: seafood. The number one fake being escolar, an oily fish that can cause stomach problems, being mislabeled as white tuna or albacore, frequently found on sushi menus.

National Consumers League did its own testing on lemon juice just this past year and found four different products labeled 100 percent lemon juice were far from pure.

"One had 10 percent lemon juice, it said it had 100 percent, another had 15 percent lemon juice, another...had 25 percent, and the last one had 35 percent lemon juice," Sally Greenberg, Executive Director for the National Consumers League said. "And they were all labeled 100 percent lemon juice."

Greenberg explains there are indications to help consumers pick the faux from the food.

"In a bottle of olive oil if there's a dark bottle, does it have the date that it was harvested?" she said. While other products, such as honey or lemon juice, are more difficult to discern, if the price is "too good to be true" it probably is.

"$5.50, that's pretty cheap for extra virgin olive oil," Greenberg said. "And something that should raise some eyebrows for consumers."

Many of the products USP found to be adulterated are those that would be more expensive or research intensive in its production.
"Pomegranate juice is expensive because there is little juice in a pomegranate," Lipp said.

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Israel goes to polls, set to re-elect Netanyahu

JERUSALEM (Reuters) - Israelis voted on Tuesday in an election that is expected to hand hawkish Prime Minister Benjamin Netanyahu a third term, opening the way for a showdown with Iran and bolstering opponents of Palestinian statehood.

However, Netanyahu's own Likud party, running alongside the ultra-nationalist Yisrael Beitenu group, looks set to win fewer seats than in the previous parliament, with opinion polls showing a surge in support for the far-right Jewish Home party.

By 4 p.m. (9.00 a.m. ET), six hours before polls close, the Israeli election committee said turnout was 46.6 percent, up from 41.9 percent at the same time in 2009 and the highest level since 1999, when Netanyahu, serving his first term as prime minister, was defeated by then-Labour Party leader Ehud Barak.

Ahead of Tuesday's ballot, analysts had speculated that high turnout would benefit center-left parties that have sometimes struggled to motivate their voter base.

In a sign of concern over a possible centrist surge, Netanyahu urged his supporters to go to the polls.

"Go vote, and then go back to the cafes. Go vote so we can lead Israel because ... we don't really know how all of this is going to end," he said in public remarks at Likud party headquarters in Tel Aviv.

Political sources said Netanyahu, worried by his apparent fall in popularity, might approach center-left parties after the ballot in an effort to broaden his coalition and present a more moderate face to Washington and other concerned allies.

British Foreign Secretary William Hague warned Israel it was losing international support, saying prospects for a two-state solution to the Israeli-Palestinian conflict were almost dead because of expanding Jewish settlement in occupied territory.

Some 5.66 million Israelis are eligible to cast a ballot, with polling stations closing at 10 p.m. (3.00 p.m. ET). Full results are due by Wednesday morning, opening the way for coalition talks that could take several weeks.

The lackluster election campaign failed to focus on any single issue and with a Netanyahu victory predicted by every opinion poll, the two main political blocs seemed to spend more time on internal feuding than confronting each other.

"There is a king sitting on the throne in Israel and I wanted to dethrone him, but it looks like that won't happen," said Yehudit Shimshi, a retired teacher voting in central Israel in balmy winter weather that drew out the electorate.

No Israeli party has ever secured an absolute majority, meaning that Netanyahu, who says that dealing with Iran's nuclear ambitions is his top priority, will have to bring various allies on board to control the 120-seat Knesset.

The former commando has traditionally looked to religious, conservative parties for backing and is widely expected to seek out the surprise star of the campaign, self-made millionaire Naftali Bennett, who heads the Jewish Home party.

Bennett has ruled out any peace pact with the Palestinians and calls for the annexation of much of the occupied West Bank.

His youthful dynamism has struck a chord amongst Israelis, disillusioned after years of failed peace initiatives, and has eroded Netanyahu's support base.

The Likud has also shifted further right in recent months, with hardline candidates who reject the so-called two-state solution dominating the top of the party list.

"TRENDY PARTIES"

Surveys suggest Bennett may take up to 14 seats, many at the expense of Likud-Beitenu, which was projected to win 32 in the last round of opinion polls published on Friday - 10 less than the two parties won in 2009 when they ran separate lists.

Acknowledging the threat, Netanyahu's son Yair urged young Israelis not to abandon the old, established Likud.

"Even if there are more trendy parties, there is one party that has a proven record," he said on Tuesday.

Amongst the new parties standing for the first time in an election were Yesh Atid (There is a Future), a centrist group led by former television host Yair Lapid, seen winning 13 seats.

"All our lives we voted Likud, but today we voted for Lapid because we want a different coalition," said Ahuva Heled, 55, a retired teacher voting with her husband north of Tel Aviv.

Lapid has not ruled out joining a Netanyahu cabinet, but is pushing hard for ultra-Orthodox Jews to do military service - a demand fiercely rejected by some allies of the prime minister.

Israel's main opposition party, Labour, which is seen capturing up to 17 seats, has already ruled out a repeat of 2009, when it initially hooked up with Netanyahu, promising to promote peace negotiations with the Palestinians.

U.S.-brokered talks collapsed just a month after they started in 2010 following a row over settlement building, and have lain in ruins ever since. Netanyahu blamed the Palestinians for the failure and says his door remains open to discussions.

Palestinian President Mahmoud Abbas says he won't return to the table unless there is a halt to settlement construction.

That looks unlikely, with Netanyahu approving some 11,000 settler homes in December alone, causing further strains to his already notoriously difficult relations with U.S. President Barack Obama, who was sworn in for a second term on Monday.

IRAN THREAT

Tuesday's vote is the first in Israel since Arab uprisings swept the region two years ago, reshaping the Middle East.

Netanyahu has said the turbulence - which has brought Islamist governments to power in several countries long ruled by secularist autocrats, including neighboring Egypt - shows the importance of strengthening national security.

If he wins on Tuesday, he will seek to put Iran back to the top of the global agenda. Netanyahu has said he will not let Tehran enrich enough uranium to make a single nuclear bomb - a threshold Israeli experts say could arrive as early as mid-2013.

Iran denies it is planning to build the bomb, and says Israel, widely believed to have the only nuclear arsenal in the Middle East, is the biggest threat to the region.

The issue has barely registered during the election campaign, with a poll in Haaretz newspaper on Friday saying 47 percent of Israelis thought social and economic issues were the most pressing concern, against just 10 percent who cited Iran.

One of the first problems to face the next government, which is unlikely to take power before the middle of next month at the earliest, is the stuttering economy.

Data last week showed the budget deficit rose to 4.2 percent of gross domestic product in 2012, double the original estimate, meaning spending cuts and tax hikes look certain.

(Additional reporting by Ori Lewis, Jeffrey Heller and Tova Cohen; Editing by Alistair Lyon)

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SGX's Q2 net profit rises 17% to S$76m

SINGAPORE : Rising interest in derivatives trading helped lift earnings for the Singapore Exchange (SGX) last quarter.

Asia's second-largest bourse operator reported a 17 per cent on-year rise in second-quarter net profit to S$76 million.

It also attracted a large number of new bond listings in the same quarter.

Derivatives trading has been the star performer in SGX.

Over the October to December quarter, derivatives daily average volume on SGX hit a record of 358,532 contracts, up 30 per cent on-year.

This was supported by rising trading interests in China A50 futures and Japan Nikkei 225 options.

Not to be undone, the securities market performed well too.

Its daily average volume rose 8 per cent for the quarter to hit a trading value of S$1.2 billion.

This translates to a revenue of S$58 million for the securities business segment.

SGX said the better performance was due to improvements in investor sentiment following stability over the Europe debt situation and improved US economy.

Magnus Bocker, chief executive officer of Singapore Exchange, said: "We should remember the enormous amount of liquidity in the market. Not so much in the equity market, but actually more in the fixed income and currency markets, and with chasing yields and lot of very successful and growing companies, I think we can all expect this sentiment to continue. I think we can expect more flows into securities."

Some analysts are bullish on SGX's prospects going forward.

The said the improved investment climate globally may benefit the exchange operator.

Ken Ang, investment analyst at Phillip Securities Research, said: "SGX is very well placed to benefit from this increasing attractiveness of the equity market and therefore resulting in increase in trading value."

SGX attracted eight new listings in its second quarter - raising S$798.9 million.

While the number seems small, it came amid declines in the global initial public offering (IPO) market.

In 2012, global IPO volumes fell 27 per cent, with the lowest level of funds raised since 2009.

Kenneth Ng, head of Singapore research at CIMB Research, said: "I think while that (derivative) is great and that diversified the revenue of SGX, SGX still has a rather pertinent problem of trying to increase the security turnover velocity and value by retail initiatives, attracting listings and so forth."

Apart from seeking more IPOs, SGX also attracted some 90 new bond listings, raising S$39.7 billion for the quarter.

- CNA/ms

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Video showdown set for March in Web-chat debate

After a fractious false start last year, Web standards makers will reconvene in Orlando, Florida, this March to try to settle a debate about the best video technology for browser-based chatting.

The Web-based chat standard, which holds the potential to bring Skype-like audio and video communication services to the Web, is called WebRTC. The debate about it centers on how best to compress video: the widely used industry-standard H.264 codec, or Google's royalty-free, open-source VP8 codec?

The discussion took some surprising twists and turns late last year -- including Google's last-minute action to postpone discussion because of unspecified intellectual property issues and a vote by H.264 patent holders about whether to offer that codec for free.

If this debate sounds familiar, it's because Web standards setters already hashed it in recent years when dealing with Web video. There, fans of H.264's quality and widespread support pitted against those who gnash their teeth at patent-encumbered technology erecting toll booths on an an Internet otherwise built from free-to-implement standards.

HTML5 introduced built-in video, in principle letting Web developers use it as easily as they do images and no longer requiring them to rely on a plug-in like Adobe Systems' Flash Player.

But the HTML5 video standards world couldn't agree on a codec -- the technology that defines how to encode and decode video so it can be sent over a network or stored on a disk in compressed form. Some prefer the H.264 codec, which is built into
Windows 7 and 8, OS X, iOS, and
Android, but which requires royalty payments to patent holders when shipped in products. Others prefer Google's VP8, a later arrival that Google is trying to promote as part of the WebM project.

Now we have the sequel to that debate, this time for real-time communications on the Web.

Separately from the codec issue is the RTC issue. The leading contender, backed notably by Google and Mozilla, is a standard in the making called WebRTC. Microsoft arrived later with a lower-level competing proposal called CU-RTC-Web. Burt regardless of which form of real-time video and audio chat arrives on the Web, a video codec will be necessary.

Standards makers had agreed to a show-of-hands vote on H.264 vs VP8 in November to see if they could pick a mandatory-to-implement (MTI) codec -- in other words, the one that would be required for software to say it supported the standard. That could have been a huge boost for encouraging VP8 adoption, which has been lackluster so far.

But at the last minute -- literally -- Google asked to postpone the issue because of unspecified intellectual property rights (IPR) issues at the Internet Engineering Task Force (IETF), one standards group involved in the real-time communications standard.

In a mailing list message, Google's Serge Lachapelle said:

Google understands that concerns have been raised within the IETF RTCWEB WG [Real-Time Communication in Web browsers Working Group] regards to VP8 IPR...

Google likes VP8
Google believes strongly that the VP8 codec is the best technical option for a mandatory to implement codec.

We therefore kindly ask to postpone this decision and hope the workgroup will take this opportunity to make progress on other vital topics.

The postponement is for the IETF's upcoming meeting in Orlando from March 10 to 15. That postponement didn't sit well with some.

"This not a 'VP8 project', VP8 stands as a possible candidate, one of a set. It seems you are having trouble putting it formally on the table. Are you sure that those troubles can be resolved in a defined interval?" said Apple's David Singer." And, unsurprisingly given Apple's fondness for H.264, he also offered veiled support for that option: "The best *technical* option is almost certainly something widely deployed, implemented, and understood."

Added Nokia's Markus Isomaki, "I agreed to the proposal to drop the discussions since I was pretty sure we would not learn much new or reach any consensus over this. However, could you elaborate a bit what lead to your request just 5 minutes before the start of the session? I mean, concerns about VP IPR status have been raised all along the way and probably will continue to be."

Google didn't respond to that message or to a CNET request for comment on the issue.

VP8 has been dogged by intellectual property issues since it emerged two and a half years go, but so far there have been no legal challenges. MPEG LA, which licenses the large pool of H.264 patents, however, said VP8 violates 12 organizations' patents without disclosing which.

Royalty-free H.264?
MPEG LA got involved in the issue, too, at the behest of t The other standards group working on WebRTC, the World Wide Web Consortium (W3C), doesn't like the idea of patent payments in Web standards -- in fact, it's explicitly against its policy. Shortly before the November vote at the last IETF meeting, therefore, the W3C's highest authorities in effect weighed in against H.264.

"Whatever codec the [IETF's] rtcweb Working Group might choose, we encourage the working group to work toward technologies that implementers can be confident are available on a royalty-free basis, and W3C is willing to work with the IETF in achieving this," said none other than World Wide Web creator Tim Berners-Lee, along with W3C Chief Executive Jeff Jaffe, Philippe Le Hegaret, who leads the W3C's HTML work, and Thomas Roessler, a W3C technology leader.

The message dropped a juicy little nugget into the debate: the possibility of free H.264 use.

That might sound improbable, but MPEG LA granted free rights in perpetuity to use H.264 for Web sites that offer free streaming videos. But the W3C suggested that it might not be wise to get any hopes up for more free rights -- because it asked for those already in the earlier HTML5 video debate:

In 2011 W3C approached MPEG LA, the licensing authority for the generally-known patent pool for H.264, with a proposal for royalty-free licensing of the H.264 baseline codec, to be referenced for use by the HTML5 video tag. MPEG LA was receptive to this proposal; however, the proposal was turned down by a narrow margin within the MPEG LA membership.

Realistically, it's quite possible there will be no decision even March. And even if there is, the debate about the best codec doesn't look like it'll end anytime soon.

Because VP8 vs H.264 is only part of the codec debate. As new technologies appear, the video world is starting to move onto the next phase: H.265 vs. VP9.

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U.K. grandma gets death sentence in Bali

BALI An Indonesian court sentenced a British grandmother to death on Tuesday for smuggling cocaine worth $2.5 million in her suitcase onto the resort island of Bali — even though prosecutors had sought only a 15-year sentence.

Lindsay June Sandiford, 56, wept when judges handed down the sentence and declined to speak to reporters on her way back to prison, covering her face with a floral scarf. She had claimed in court that she was forced into taking the drugs into the country by a gang that was threatening to hurt her children.

Indonesia, like many Asian countries, is very strict on drug crimes, and most of the more than 40 foreigners on its death row were convicted of drug charges.

Sandiford's lawyer said she would appeal. Appeals take several years, and the country has not carried out an execution since 2008, when 10 people were put to death.

A verdict is expected in the trial of Sandiford's alleged accomplice, British man Julian Anthony Pounder, on Wednesday. He is accused of receiving the drugs in Bali, which has a busy bar and nightclub scene where party drugs such as cocaine and ecstasy are bought and sold between foreigners. Two other British citizens and an Indian have already been convicted and sentenced to prison in connection with the bust.

In its verdict, a judge panel at the Denpasar District Court concluded that Sandiford had damaged the image of Bali as a tourism destination and weakened the government's drug prevention program.

"We found no reason to lighten her sentence," said Amser Simanjuntak, who headed the judicial panel.

Prosecutors had been seeking a 15-year prison sentence for Sandiford, who was arrested in May when customs officers at Bali's airport discovered 8.4 pounds of cocaine in the lining of her luggage.

State prosecutor Lie Putra Setiawan told reporters that the verdict was "appropriate," explaining that prosecutors had been demanding 15 years because of Sandiford's age.

Indonesia has 114 prisoners on death row, according to a March 2012 study by Australia's Lowy Institute for International Policy. Five foreigners have been executed since 1998, all for drug crimes, according to the institute.

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