NEWS,15.11.2012

Gaza rocket lands near Tel Aviv as death toll rises

Two rockets fired from the Gaza Strip have landed close to Tel Aviv raising the stakes in a military showdown between Israel and the Palestinians that is moving towards all-out war.
It was the first attack on Israel's biggest city in 20 years.
Earlier, a Hamas rocket killed three Israelis north of the Gaza Strip, drawing the first blood from Israel as the Palestinian death toll rose to 16.
On the second day of an assault that Israel said might last many days and culminate in a ground attack, its warplanes bombed targets in and around Gaza City.
Plumes of smoke and dust furled into a sky laced with the vapour trails of outgoing rockets over the crowded city, where four young children killed yesterday were buried.
The sudden conflict, launched by Israel with the killing of Hamas's military chief, pours oil on the fire of a Middle East already ablaze with two years of revolution and an out-of-control civil war in Syria.
In brief:

• Israel has launched a major offensive in the Hamas-controlled Gaza Strip
• It says the attack is in response to Palestinian rocket strikes
• One air strike killed Hamas's military chief Ahmed Al-Jaabari
• Two rockets have landed near Israel's biggest city - Tel Aviv
• Some 270 rockets have been fired at Israel since its operation started
• At least 16 people (including five children) have been killed in the Gaza Strip
• Three Israelis have also been killed in the town of Kiryat Malachi

Egypt's new Islamist President Mohamed Mursi, viewed by Hamas as a protector, led a chorus of denunciation of the Israeli strikes by Palestinian allies.
Mursi's prime minister, Hisham Kandil, will visit Gaza on Friday local time with other Egyptian officials in a show of support for the enclave, an Egyptian cabinet official said.
Israel promised that the delegation would come to no harm.
Israel says its attack is in response to escalating missile strikes from Gaza.

Tel Aviv
Israel's bombing has not yet reached the saturation level seen before it last invaded Gaza in 2008, but Israeli officials have said a ground assault is still an option.
Israeli police said three Israelis died when a rocket hit a four-story building in the town of Kiryat Malachi, some 25km north of Gaza, the first Israeli fatalities of the latest conflict to hit the coastal region.
Air raid sirens sent residents running for shelter in Tel Aviv, Israel's commercial centre. A security source said the rocket - claimed by Islamic Jihad - landed in the sea.
The second was said to have landed in an uninhabited area of the Tel Avivi suburbs.
Tel Aviv residents said an explosion could be heard.The Tel Aviv metropolitan area holds more than three million people - more than 40% of Israel's population.
In remarks broadcast after rockets were fired at Tel Aviv, Israel's Defence Minister Ehud Barak said: "This escalation will exact a price that the other side will have to pay."
He also announced he had ordered the military to enlist more reservists "so that we can prepare for any development".
'Double war crime'
Israeli Prime Minister Benjamin Netanyahu said Hamas was committing a double war crime, by firing at Israeli civilians and hiding behind Palestinians civilians.
"I hope that Hamas and the other terrorist organisations in Gaza got the message," he said. "If not, Israel is prepared to take whatever action is necessary to defend our people."
Hamas spokesman Fawzi Barhoum said Israel would pay a heavy price "for this open war which they initiated".
After watching powerlessly from the sidelines of the Arab Spring, Israel has been thrust to the centre of a volatile new world in which Islamist Hamas hopes that Mursi and his newly dominant Muslim Brotherhood in Egypt will be its protectors.
Hamas's prime minister, Ismail Haniyeh, urged Egypt to do more to help the Palestinians.
"We call upon the brothers in Egypt to take the measures that will deter this enemy," he said.
Instability
The new conflict will be the biggest test yet of Mursi's commitment to Egypt's 1979 peace treaty with Israel, which the West views as the bedrock of Middle East peace.
"The Israelis must realise that this aggression is unacceptable and would only lead to instability in the region and would negatively and greatly impact the security of the region," Mursi said.
The Muslim Brotherhood, which brought Mursi to power in an election after the downfall of autocrat Hosni Mubarak, has called for a "Day of Rage" in Arab capitals on Friday.
The Brotherhood is seen as the spiritual mentors of Hamas.
Al-Jabaari
The Israeli offensive "Pillar of Defence" began on Wednesday when a precision Israeli airstrike killed Hamas military mastermind Ahmed Al-Jaabari. Israel then began shelling the enclave from land, air and sea.
The 15 killed in Gaza included Jaabari and six Hamas fighters plus eight civilians, among them a pregnant woman with twins, an 11-month old boy and three infants, according to the enclave's health ministry. Medics reported at least 130 wounded.
The Israeli army said 156 targets were hit in Gaza, 126 of them rocket launchers.
It said 200 rockets had struck Israel since the start of the operation, 135 of them since midnight local time.
Israel's Iron Dome interceptor system has so far shot down more than 80 rockets headed for residential areas, the military said.
Israeli warplanes dropped leaflets in Gaza telling residents to stay away from Hamas and other militants.

Euro zone falls into recession

The euro zone fell into a recession in July-September, the second since the global financial crisis in 2009, as French resilience could not make up for a slump across Europe and the three-year debt crisis slowed Germany to a crawl.Economic output in the 17-country euro zone fell 0.1% in the third quarter, the EU's statistics office Eurostat said on Thursday, following a 0.2% drop in the second quarter.Those two quarters of contraction put the euro zone's 9.4 trillion euro ($14.7 trillion) economy officially in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.Germany and France, the euro zone's biggest economies, could not save the bloc from a double-dip recession even though both countries managed 0.2% growth in the quarter.Large countries like Italy, Spain and the Netherlands all contracted and Belgium, a big exporter, stagnated.Protests against cuts Millions of people across Europe protested against government spending cuts that EU policymakers say are crucial to ending the debt crisis but which others blame for the economic contraction."We are now getting into a double dip recession which is entirely self-made," said Paul De Grauwe, an economist with the London School of Economics."It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else," he said.Not everyone shares that view and the European Commission says labour costs are falling and exports are rising for Greece, Portugal, Spain and Ireland, arguing that austerity is a necessary evil to bring down unsustainable budget deficits.The European Commission sees a 0.4 % contraction for the euro zone in all of 2012.Demand for goods drying up Hopes for a recovery next year are also fading, with the European Commission saying the economy will grow just 0.1% in 2013.A rebound in the euro zone could be vital for the rest of the world as the United States and China struggle with the impact of the crisis on their companies' ability to grow and prosper.In one positive sign, Eurostat said separately that the euro zone's annual inflation fell to 2.5% in October from 2.6% in September, suggesting an end to a run of stubborn inflation that has contributed to the difficult environment.But after months of resilience, Germany, Europe's largest economy, is seeing its companies unnerved by the crisis and demand for its goods in the euro zone and abroad is drying up.While German gross domestic product expanded by 0.5% in the first quarter, it slowed to 0.3% in the second and weakened again in the third quarter.Economists expect a worse performance in the fourth quarter.

Wall Street down

Wall Street dropped today, after Wal-Mart's profit outlook disappointed.Shares of Wal-Mart fell, last down 3.7%, after the retail giant predicted that its fourth-quarter profit will drop."Current macroeconomic conditions continue to pressure our customers," Charles Holley, Wal-Mart's executive vice president and chief financial officer, said in a statement.There was plenty of evidence of that pressure, exacerbated by the effects of Hurricane Sandy. Applications for unemployment benefits jumped more than expected, rising 78,000 to 439,000 in the week ended November 10, according to Labor Department data. A worrying sign indeed. "We will likely see a step back in job growth," Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters.Separately, data from the Philadelphia Federal Reserve Bank and the New York Federal Reserve Bank showed that indexes of manufacturing shrank in those regions this month. The latest data only add to the need for President Barack Obama and lawmakers to find a way to avoid the so-called fiscal cliff, a mix of tax increases and spending cuts that will kick in automatically on January 1 and risk hampering the already-fragile economy.In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.38%, while the Standard & Poor's 500 and the Nasdaq Composite Index each shed 0.48%. In Europe, the Stoxx 600 Index ended the day with a 1% slide from the previous close. The FTSE 100 and Germany's DAX each dropped 0.8%. France's CAC 40 shed 0.5%. There was more bad news for the euro zone economy. The latest data showed that the region's gross domestic product dropped 0.1% in the quarter, after a 0.2% decline in the second quarter.A  poll of more than 70 economists predicted the bloc's new recession will extend until the end of the year and 2013 promises little better than stagnation. Conducted before today's data were released, the consensus was for a 2012 contraction of 0.5% and only 0.1% growth next year."The euro zone as a whole has slipped back into recession," Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, wrote in an e-mail to Bloomberg News. "Europe's economic downturn has not only deepened, it has also broadened with the core of the euro zone now much more affected. The bleak economic data out of Europe will further undermine sentiment," according to Spiro.In other news, BP said it reached a settlement with the US government to pay US$4.5 billion in penalties, settling all criminal charges and resolving securities claims relating to the Deepwater Horizon oil spill.