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'Yes' camp takes slim lead in Greece

By Michele Kambas and Lefteris Papadimas

ATHENS (Reuters) - Tens of thousands of Greeks took to the streets on Friday in rival rallies that laid bare the deep divide heading into a referendum that may decide the country’s future in Europe’s single currency.

Prime Minister Alexis Tsipras, elected in January on a promise to end years of austerity, urged people packing Syntagma square in central Athens to spurn the tough terms of an aid deal offered by international creditors to keep the country afloat.

His European partners say a 'No' vote will jeopardize Greece’s membership of the euro.

Tsipras says they are bluffing, fearing the fallout for Europe and the global economy. A 'Yes' vote may bring him down, ushering in a new period of political instability for a country reeling from five days of shuttered banks and rationed cash withdrawals.

Framing Sunday’s ballot as a battle for democracy, freedom and European values, the 40-year-old left-wing leader told Greeks to “turn your backs on those who terrorize you daily”.

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Demonstrators, supporting the yes vote for the upcoming referendum applaud during a rally in the nor …

“On Sunday, we are not just deciding that we are staying in Europe, but that we are deciding to live with dignity in Europe,” he told the crowd of at least 50,000.

His opponents accuse Tsipras of gambling Greece’s future on a rapid-fire plebiscite that a major European rights watchdog says falls short of international standards of fairness.

Four opinion polls published on Friday had the 'Yes' vote marginally ahead; a fifth put the 'No' camp 0.5 percent in front, but all were well within the margin of error.

"We know that the lenders will close the door if we say no, but we must fight,” said 65-year-old pensioner Irini Stavridou, who attended the 'No' rally.

“We must fight not only for Greece but all the people in Europe, for those who just have a different opinion."

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Men prepare voting booths ahead of the referendum at a high school, which will be used a polling sta …

ODE TO JOY

On Syntagma, patriotic songs blared out over loudspeakers. At the 'Yes' camp, thousands rallied in front of the old Olympic Stadium to Beethoven’s "Ode to Joy," the anthem of the European Union. There appeared to be fewer people than in the 'No' crowd.

"I prefer to vote ‘Yes’, have a few more years austerity and give my child a better future,” said unemployed economist Marina Peppa, 45. “It’s not going to be easy, but if ‘No’ prevails we’ll have Armageddon, total poverty.”

With tension building, police fired stun grenades and briefly scuffled with a few dozen black-clad people carrying red flags, often carried by anti-establishment radicals. The violence appeared to be isolated.

In a televised address earlier in the day, Tsipras seized on a report by the International Monetary Fund – which argued that Greece's massive public debt could not be sustained without significant writedowns – as vindication of his rejection of the lenders’ terms.

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Pensioners line up as they wait to be allowed into a bank to withdraw a maximum of 120 euros ($134) …

Finance Minister Yanis Varoufakis called the IMF report "music to our ears". Regardless of the outcome of the referendum, Greece will need some 50 billion euros as well as a massive debt writedown, the report said.

European policy makers, however, issued fresh warnings of the costs of a 'No' vote in a plebiscite called with just eight days' notice after the breakdown of talks with the European Commission, the IMF and the European Central Bank.

Commission President Jean-Claude Juncker and German Finance Minister Wolfgang Schaeuble dismissed Tsipras' argument that his government would be able to move smoothly to negotiate more favorable terms if Greeks backed his rejection.

"If the Greeks will vote 'No', the Greek position is dramatically weakened," Juncker told a news conference.

BRINKMANSHIP

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A pensioner is helped by a bank manager after collapsing while waiting along with dozens of other pe …

Tsipras is betting Europe will compromise rather than let Greece slip out of the euro zone. But behind the rhetoric, there were more concrete signs of the pressure Europe can exert on Greece.

The euro zone's rescue fund, Greece's largest creditor, said it was reserving the right to call in 130.9 billion euros of debt ahead of time after Athens defaulted on an IMF loan.

With banks shuttered all week, cash withdrawals rationed and commerce seizing up, Sunday’s ballot could decide whether Greece gets another last-ditch financial rescue in exchange for more harsh austerity measures or plunges deeper into economic crisis.

One in four Greek workers are jobless; the economy has shrunk by a quarter since 2009.

Tsipras’ opponents have pointed to the fact that the referendum is on a deal that is no longer on the table, accusing him of recklessly endangering the country's future.

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Greek Prime Minister Alexis Tsipras arrives to speak to journalists after an EU summit in Brussels o …

Greece's top administrative court, however, rejected an appeal against the referendum by two Greek citizens, who argued that the constitution bars plebiscites on fiscal issues and that the question is too complex.

The 'No' campaign has directed much of its venom at Germany, the euro zone's dominant power and Greece's biggest creditor.

One poster plastered in central Greece shows a picture of German Finance Minister Wolfgang Schaeuble with the slogan: "For five years he's been sucking your blood. Tell him NO now."

But fuelling fears of worse to come, the Financial Times reported that Greek banks were making contingency plans to possibly "bail in" depositors, a prospect Greek leaders have repeatedly denied.

The report said plans to shave off at least 30 percent on deposits above 8,000 euros were "an increasingly likely scenario for at least one bank", as part of a restructuring of the bank sector once Greek is back in a bailout program.

Louka Katseli, head of Greece's Bank Association and chair of the National Bank of Greece, dismissed the report as "completely baseless".

She told Skai TV: "There are no such scenarios at any Greek bank, not even as an exercise on paper."

(Additional reporting by James Mackenzie in Athens, Julien Ponthus and Ingrid Melander in Paris and David Chance in Washington; Writing by James Mackenzie and Matt Robinson; editing by Anna Willard)

Beirut (AFP) - A new Islamist rebel alliance, including Al-Qaeda's Syrian affiliate, was locked in a fierce battle Friday to seize government-held areas of Aleppo, the divided former economic capital.

Once a powerhouse of industry, Aleppo has been devastated by years of fighting between regime forces and a succession of rebel groups.

Clashes raged overnight as the Islamist alliance, which calls itself Ansar al-Sharia, sought to take control of the air force intelligence headquarters in Zahra, on Aleppo's northwestern outskirts, said the Syrian Observatory for Human Rights.

According to the British-based monitor, the 13 groups in the alliance announced the launch of the "Ansar al-Sharia operations room" on Thursday.

They said the aim was to "liberate Aleppo and the countryside" and "to draft a joint covenant to run Aleppo after its liberation in line with sharia" Islamic law.

The rebels advanced to take control of several buildings in Zahra despite regime air strikes, according to Observatory head Rami Abdel Rahman.

"There were at least 35 dead among insurgent ranks and dozens of killed and wounded on the regime side," he told AFP.

The coalition, which includes Al-Qaeda's Syrian associate Al-Nusra Front, the rival of the Islamic State jihadist group, pledged "victory for the Muslims of Aleppo".

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Once a powerhouse of industry, Aleppo has been devastated by years of fighting between regime forces …

Syrian state television said that the army had "foiled attempts to infiltrate Aleppo on several fronts, killing more than 100 terrorists" -- the regime's standard term for all rebel groups.

To the west of the city, rebels from a different Islamist-dominated alliance called Conquest of Aleppo captured parts of a military research centre, the Observatory said.

It said 11 rebels and an unknown number of regime troops were killed in that battle.

On Thursday, Ansar al-Sharia launched a multi-district assault on government-held parts of Aleppo city, in attacks that killed at least four civilians, the Observatory said.

Rebels fired several hundred rockets and projectiles into at least seven government-held neighbourhoods, with the army returning fire and regime aircraft carrying out raids.

Fighting resumed Friday before dawn on pro-government areas of the Ashrafiyeh and Khaldiyeh in the city's northern and western sectors, the monitor said.

Abdel Rahman said hundreds of shells fell on both government- and rebel-held areas of the city, in what he said was Aleppo's "worst night" since 2012.

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More than 230,000 people have been killed in Syria since the country's conflict began in March 2 …

One Aleppo resident, a 23-year-old student who gave her name as Sahar, said fighting had been "intensive".

"We are used to the sound of explosions but yesterday (Thursday) there were so many. We heard the blasts but because they were coming from everywhere we didn't know where the shells were falling," she told AFP by telephone.

- City, province divided -

Control of Aleppo has been divided between government and rebel forces since shortly after fighting began there in mid-2012.

The regime largely controls the west of the city, with rebels from different factions present in the east.

The situation is largely reversed in the countryside surrounding the city, and both government and rebel forces have at times sought to encircle their opponents and besiege them.

Activist Karim Obeid said the Ansar al-Sharia coalition had targeted Aleppo's Zahra "because the (Syrian) army regularly bombs opposition-held locations from there".

Taking Zahra would help to open up rebel access to the border with Turkey, Obeid added.

In recent months, Al-Nusra has allied elsewhere with Islamist rebels to win large swathes of territory from the regime, particularly in the northwestern province of Idlib.

Overnight, anti-regime forces also attacked an army outpost at the entrance to Zabadani near Damascus, according to the Observatory.

Zabadani is around 20 kilometres (12 miles) north of the capital and was one of the first towns to fall to rebels in early 2012.

Following a fightback aided by Shiite militant group Hezbollah, the government has seized control of several towns and villages close to the Lebanese border and Zabadani is the last in rebel hands.

The Observatory said the army responded by dropping more than 40 barrel bombs -- crudely made, non-guided missiles -- on the town, after at least three rebels and five regime troops were killed in skirmishes.

More than 230,000 people have been killed in Syria since the country's conflict began in March 2011.

Wochit
ISIS Destroys Historic Archaeological Relics

BEIRUT (AP) — Islamic State group militants have destroyed six archaeological pieces from the historic town of Palmyra that were confiscated from a smuggler, the group said.

An IS statement, released late Thursday, said the six busts were found when the smuggler was stopped at a checkpoint. The issue was referred to an Islamic court in the IS-held northern Syrian town of Manbij, which ordered that they be destroyed and the man be whipped.

Photographs released by the group show IS militants destroying the busts with large hammers. Another photo shows the smuggler being whipped.

The Britain-based Syrian Observatory for Human Rights said on Friday it was unclear if the busts were authentic or if the militants destroyed fake busts as a cover for the IS group's own antiquities smuggling.

While there is no firm evidence of the amount of money being made by the Islamic State group from looting antiquities, satellite photos and anecdotal evidence confirm widespread plundering of archaeological sites in areas under IS control.

IS captured the historic Syrian town of Palmyra in May from government forces. Many fear that the group will damage the town's archaeological sites as they did in neighboring Iraq earlier this year.

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This image posted on a militant website by the Aleppo branch of the Islamic State group on Friday, J …

Palmyra's UNESCO world heritage site is famous for its 2,000-year-old Roman colonnades, other ruins and priceless artifacts. Before Syria's conflict began in 2011, tens of thousands of tourists visited the remote desert outpost, a cherished landmark referred to by Syrians as the "Bride of the Desert."

In March, IS members in Iraq razed 3,000-year old Nimrod and bulldozed 2,000-year old Hatra — both UNESCO world heritage sites.

The Sunni extremists, who have imposed a violent interpretation of Islamic law, or Shariah, in the territories they control in Syria and Iraq, believe ancient relics promote idolatry.

IS militants also recently destroyed a lion statue dating back to the 2nd century in Palmyra, said Maamoun Abdulkarim, the head of the Syrian government's Antiquities and Museums Department.

He said the statue, discovered in 1977, had stood at the gate of the town's museum, and had been placed inside a metal box to protect it from damage.

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DigitalGlobe imagery of the Palmyra ruins collected on June 4th, 2015. An oasis in the Syrian desert …

In Paris, the U.N. cultural agency's chief, Irina Bokova, condemned on Friday the latest destruction of Palmyra's cultural heritage, saying the actions "reflect the brutality and ignorance of extremist groups and their disregard of local communities and of the Syrian people."

"The destruction of funerary busts of Palmyra in a public square, in front of crowds and children asked to witness the looting of their heritage is especially perverse," Bokova added.

"These busts embody the values of human empathy, intelligence and honor the dead," she said. "Their destruction is a new attempt to break the bonds between people and their history, to deprive them of their cultural roots in order to better enslave them."

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Associated Press writer Jamey Keaten in Paris contributed to this report.

MOSCOW (AP) — Russia will consider new selective retaliatory measures against some specific Western countries, the nation's security chief said Friday, pointing at Finland as a possible target.

The tough statement appears to herald a new round in spiraling Russia-West confrontation over Ukraine. It followed a session of Russia's Security Council chaired by President Vladimir Putin, who vowed to firmly resist Western pressure and ordered to draft a new response.

Russia may, for example, revise favorable conditions for Finnish timber traders in response to Helsinki's refusal to issue a visa to the Russian lower house speaker, the council's secretary, Nikolai Patrushev said. He added in televised remarks that Russia wouldn't necessarily make the move, but wants to consider this and other retaliatory measures.

Finland has denied entry to the State Duma speaker, Sergei Naryshkin, because he was on the EU sanctions list. Naryshkin planned to lead a delegation to next week's session of the Parliamentary Assembly of the Organization for Security and Cooperation in Europe, and Moscow responded to the Finnish move by boycotting the meeting.

Travel restrictions against Russian officials and businessmen are part of the U.S. and the EU response to Moscow's 2014 annexation of Ukraine's Crimean Peninsula and its support for pro-Russian insurgents in eastern Ukraine. The West also has slapped Russia with economic sanctions, which have cut its access to capital markets and banned transfers of military and energy technologies.

Moscow has retaliated to Western sanctions by banning many Western agricultural products.

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Russian President Vladimir Putin, right, and Prime Minister Dmitry Medvedev shake hands before a Sec …

Speaking at the Security Council's meeting, Putin said the West wants to punish Russia for its course. "We are conducting independent domestic and foreign policy. We aren't trading in our sovereignty and some don't like it," he said.

Putin pointed at the EU's decision last month to extend its sanctions through January and the U.S. warnings of possible new penalties as signals that "we shouldn't expect some of our geopolitical opponents to revise their unfriendly course in the foreseeable future."

He said that Russia should respond with "additional systemic measures in all key areas," but refrained from specifics in his opening remarks.

Putin didn't mention any specific countries, but Patrushev, his long-time lieutenant and a fellow KGB veteran, squarely blamed Washington for the Ukrainian crisis.

"The United States has initiated all those events in Ukraine. It has initiated a coup and put the current Ukrainian leadership in power," he said in a reference to the massive public protests that chased Ukraine's former pro-Moscow president from office.

Patrushev claimed that the settlement of the Ukrainian conflict depends entirely on the U.S.

"If the U.S. takes steps to normalize the situation, it will be normalized. If it doesn't want to do so, the situation will drag on for a long time," he said.

The U.S. and the EU, in turn, have accused Moscow of fueling a rebellion in eastern Ukraine with troops and weapons — accusations Moscow has denied. They said the sanctions should stay in place until Russia fulfills the terms of February's cease-fire deal.