Syria rushes reinforcements to its largest city

In this Tuesday, July 24, 2012 photo, a damaged Syrian military tank is seen at the border town of Azaz, some 20 miles (32 kilometers) north of Aleppo, Syria. Turkey sealed its border with Syria to trucks on Wednesday, July 25, 2012 cutting off a vital supply line to the embattled nation as fighting stretched into its fifth day in the commercial capital of Aleppo. (AP Photo/Turkpix)

BEIRUT (AP) — Syrian troops rushed dozens of tanks and reinforcements Wednesday toward Aleppo, the country's strategically vital commercial capital, in a bid to crush a rebel advance that has spread to wide swaths of the sprawling city.

As five days of fighting in Aleppo intensified, and with rumors swirling of a final showdown in that city, neighboring Turkeytightened its borders but said refugees will be allowed through.

"We are expecting a big attack on Aleppo," Mohammed Saeed, an activist based in Aleppo, told The Associated Press. "People are worried they might face random shelling while fleeing."

The rebels have made stunning advances over the past week, but the battle for control of Syria, a geographic and political linchpin at the heart of the Middle East, is far from over. And the potential for wider, regional unrest is great.

Israel's foreign minister warned that his country will act immediately if it discovers Islamic militants such as Lebanon's Hezbollah are raiding Syria's chemical or biological weapons stocks.

"For us, that's a casus belli, a red line," Avigdor Lieberman told Israel Radio.

Israeli officials have reported a run on gas masks. Demand has almost doubled in the past few days, to 4,200 requests on Tuesday from a years-old average of about 2,200, said Merav Lapidot, a spokeswoman for the Israeli postal service, which distributes the masks.

On Monday, Syria threatened to unleash its chemical and biological weapons if it faces a foreign attack.

The White House said Wednesday that the Syrian government's assault on Aleppo with tanks and fixed-wing aircraft illustrates what it called "the depth of depravity" by Assad's regime.

White House spokesman Jay Carney said the administration has seen "credible" reports about the regime's use of military hardware in Aleppo. Carney said Assad was using its forces to "perpetrate heinous violence" against the city's civilian population.

Carney also pointed to defections by two Syrian ambassadors as an indication that officials in Assad's circle are "fleeing government because of the heinous actions taken by Assad."

Still, after 17 months of fighting and a death toll that activists say has reached 19,000 people, the government remains far better armed than the rebels and willing to launch attacks from the sky, strafing neighborhoods with helicopter gunships. In Aleppo, witnesses also have reported warplanes unleashing sonic booms.

The rebels are disorganized and disparate, unable to communicate on a national level or hold territory for long. After a rebel rush on the capital, Damascus, last week — including a brazen bombing that killed four regime insiders — the government routed the fighters by calling in attack helicopters and heavy weapons that devastated entire neighborhoods.

Regime forces followed up the shelling with door-to-door searches in Damascus that were still going on Wednesday to flush out remaining rebel sympathizers.

The escalating bloodshed prompted two more defections by Syrian diplomats Wednesday — the envoy to Cyprus and her husband, the former ambassador to the United Arab Emirates, according to the opposition Syrian National Council. The announcement follows the televised appearance late Tuesday by Brig. Gen. Manaf Tlass, who confirmed his defection and said Syrians must work together to build a new country.

It was his first public appearance since he left Syria earlier this month. French officials later confirmed that he was in France. Tlass is the son of a former Syrian defense minister.

Turkey's decision to seal its border to trucks Wednesday comes as fears mount that the 17-month-old crisis in Syria will spread. Syria's close ties to Iran and Hezbollah mean that the conflict has the potential to draw in the country's neighbors.

Iran's Defense Minister Ahmad Vahidi said there are no Iranian troops in Syria and that the Syrian government is capable of confronting terrorists — the regime's term for its opponents — the semiofficial Fars news agency reported Wednesday. Vahidi was reacting to reports that accuse Iran of deploying troops in Syria to help quell the armed uprising against Assad's government.

Turkey was a Syrian ally before the uprising began in March 2011, but Ankara is now among the harshest critics of Damascus. Turkish territory along the countries' 566-mile (911-kilometer) border is used as a staging ground for rebel fighters as well as a haven for thousands of refugees. Before the uprising began, the border was the transit point for food and construction materials that Turkey exported to the entire Middle East.

"We have serious concerns over the safety of Turkish trucks regarding their entry and return from Syria," Turkish Economy Minister Zafer Caglayan said, adding that three border crossings were in rebel hands. Syrians seeking refuge or to resupply would still be allowed in.

The battle in Aleppo is just 40 miles (60 kilometers) from the Turkish border. Aleppo is Syria's largest city, with a population of about 3 million.

On Wednesday, Saeed, the Aleppo activist, described fierce battles in neighborhoods all over the city, including some near the center.

Aleppo's historic old city at the center is a U.N. world heritage site.

"Shooting and clashes are going on nonstop," Saeed said.

There are no immediate prospects for international action in Syria or the kind of NATO air campaign that tipped the scales against Libya's Moammar Gadhafi. NATO and the U.N. have all but ruled out foreign military intervention, in part out of fears that it would only make the country's problems worse. The U.S. and its allies have shown little appetite for getting involved in another Arab nation in turmoil.

Russia, Syria's longtime ally and a veto-wielding member of the U.N. Security Council, has ensured that the kind of U.N. resolutions that allowed Western military action in Libya would not be repeated in Syria. On Wednesday, Russian Foreign Minister Sergei Lavrov criticized new European efforts to enforce an arms embargo as "unilateral sanctions" and a "blockade."

The new commander of the U.N. observer force, Lt. Gen. Babacar Gaye, and the U.N. official for peacekeeping operations, Hervé Ladsous, were in Damascus on Wednesday to assess the prospects for a U.N. peace plan that is being widely ignored.

Half of the 300-member U.N. observer force, meant to monitor the nonexistent cease-fire, has left the country.

"I think diplomats have to be optimistic and that's no joke, I think we have to hope," Ladsous told reporters. "We have to hope that the whole process gains traction, that the vicious circle of violence can cease, and that some political solution and first and foremost some political dialogue can get started."

___

Associated Press writers Paul Schemm in Beirut, Suzan Fraser in Ankara, Turkey, Natalya Vasilyeva in Moscow and Adam Schreck in Dubai contributed to this report.

Syrian armored column closes in on Aleppo

A tank belonging to forces loyal to Syria's President Bashar al-Assad is seen in Deraa July 24, 2012. Picture taken July 24, 2012. REUTERS/Shaam News Network/Handout

AZAZ, Syria (Reuters) - The Syrian army turned its forces onAleppo on Wednesday, ordering an armored column to advance on the country's second biggest city and pounding rebels there with artillery and attack helicopters, opposition activists said.

As hostilities intensified near the Turkish border, Ankara said it was closing its crossing posts, although the United Nations said refugees fleeing Syria would be allowed through.

At the Syrian town of Azaz, a few miles south of the Turkish border, rebels appeared in control after heavy clashes over the past month in which they succeeded in driving out government forces, leaving the place a rubble-strewn ghost-town.

Syria's ambassadors to the United Arab Emirates and Cyprus - a married couple - have deserted their posts, becoming the latest officials to abandon the Damascus government, rebels said.

The 16-month revolt against President Bashar al-Assad has been transformed from an insurgency in remote provinces into a battle for control of the two main cities, Aleppo and the capital, Damascus, where fighting exploded last week.

Assad's forces have launched massive counter assaults in both cities. They appear to have beaten rebels back from neighborhoods in the capital and are turning towards Aleppo, a commercial hub in the north.

North of Aleppo, the town of Azaz has been almost completely destroyed by heavy fighting. Burnt-out armored personnel carriers sat on the roads where rebels hit them with rocket-propelled grenades. Bullet casings were scattered everywhere.

Most residents fled during the latest fighting, which drove Assad's forces out over the past month and ended in the rebels taking the Bab al-Salam border crossing with Turkey on Sunday.

Fighting in and around Aleppo is expected to prompt an exodus across the Turkish border, where some Syrian refugees are already complaining about poor conditions and have clashed with riot police in disputes over food.

"There is not enough food. They have broken our hearts, the Turks. Why are they doing this to us?" said a sobbing woman called Umm Omar, with her four children huddled next to her in a camp near the border.

ARTILLERY AND ROCKETS

Further south, Syrian forces used artillery and fired rockets on Wednesday on the northern Damascus suburb of al-Tel in an attempt to seize it from rebels, forcing hundreds of families to flee, residents and opposition activists said.

"Military helicopters are flying now over the town. People were awakened by the sound of explosions and are running away," Rafe Alam, one of the activists, said by phone from a hill overlooking Tel. "Electricity and telephones have been cut off."

Opposition sources also reported helicopters and machineguns were firing on the neighborhood of Hajar al-Aswad. The slum lies on the southern outskirts of the capital and has been a haven for rebels sneaking into Damascus from the suburbs.

In the north, opposition activists said thousands of troops had withdrawn with their tanks and armored vehicles from Idlib province near the Turkish border and were heading towards Aleppo. Rebels attacked the rear of the troops withdrawing from the north, activist Abdelrahman Bakran said from the area.

State-run Syrian television painted a more favorable picture, saying government troops were imposing security and stability in and around Aleppo.

"The terrorists are suffering terrible losses. Groups of them are throwing their weapons away and giving themselves up. Others are fleeing for the Turkish border," the television said.

Military experts believe an overstretched Syrian army is pulling back to concentrate on fighting insurgents in Aleppo and Damascus, important power centers for the government, while leaving outlying areas in the hands of rebels.

HELICOPTERS FIRING

In Aleppo, helicopters were seen firing missiles throughout Tuesday, residents said. Rebels were battling government forces by the gates of the historic old city. Troops fired mortars and shells at rebels armed with rifles and machine guns.

"I heard at least 20 rockets fired, I think from helicopters, and also a lot of machine gun fire," a resident, who gave his name as Omar, said by telephone.

Residents said fixed-wing jets had also flown over the city, followed by loud noises, though there were contradictory reports as to whether they had opened fire. Video footage posted by activists appeared to show a warplane firing its guns.

Assad's forces have occasionally launched air strikes from fixed-wing jets on other cities during the uprising, but tend to rely on helicopters for air strikes in urban areas.

The uprising has entered a more violent phase in the past 10 days since rebels poured into Damascus in large numbers.

Last Wednesday, an explosion killed four members of Assad's inner circle inside a security headquarters, a blow that wiped out much of the top echelon of his military command structure and shattered the reputation for invulnerability that his family has held since his father seized power in a coup in 1970.

Western powers have been calling for Assad to be removed from power for many months, and now say they believe his days are numbered. But they fear that he will fight to the end, raising the risk of sectarian warfare spreading across one of the world's most volatile regions.

Syria heightened the alarm on Monday by confirming that it had chemical and biological weapons and saying it could use them against external threats, prompting warnings from Washington and Moscow against using the arsenal.

In its strongest language yet, Russia told Syria that it was unacceptable to threaten to use chemical weapons, the Russian Foreign Ministry said on Wednesday.

In a meeting with Syria's ambassador to Moscow, Deputy Foreign Minister Mikhail Bogdanov "laid out in an extremely clear form Russia's position on the inadmissibility of any threats of the use of chemical weapons", the ministry said.

Israel said that if Syrian-backed Hezbollah guerrillas used the situation to take control of the weapons, it would "act immediately and with utmost force".

As the revolt against Assad intensifies, top Syrian officials have started to abandon their posts. Syria's ambassador to the United Arab Emirates, Abdelatif al-Dabbagh, and his wife, who is Damascus's envoy to Cyprus, Lamia al-Hariri, have defected and are both now in Qatar, the opposition Syrian National Council said on Wednesday.

Brigadier General Manaf Tlas, a member of Assad's inner circle who fled Syria this month, appeared on television in his first public comments since defecting. He called on troops to abandon the government.

Elsewhere in the country, activists reported a series of killings by government troops and pro-Assad militia.

They reported an attack on a mosque in a village northwest of the city of Hama, with at least 15 confirmed dead. At least nine people were killed in army shelling of al-Herak, a town south of Deraa. In Damascus, activists said they found the bodies of 11 men executed by government forces in the district of Qaboun.

The accounts, like others from activists, could not be confirmed. Syria restricts access by international journalists.

The British-based Syrian Observatory for Human Rights, which compiles reports from activists, said 1,261 people had been killed since the fighting intensified in Damascus on July 15. That made last week by far the bloodiest in an uprising in which activists say at least 18,000 people have been killed.

(Writing by Giles Elgood; Editing by Anna Willard, David Stamp and Will Waterman)

Wealthy Stash $21 Trillion in 'Pirate' Banks

There are two banking systems for the wealthy. Private banks. And "pirate" banks.

"Pirate banks" form a large and fast-growing virtual banking system that has helped the wealthy hide more than $21 trillion offshore, according to a new report from the left-leaning Tax Justice Network USA.

That hidden wealth is costing governments $280 billion a year in lost tax revenue, the report says.

The report says much of that wealth is held by fewer than 10 million of the global super-wealthy and is handled by the world's 50 largest banks. Today's "pirate banking" clients include everyone from "30-year-old Chinese real-estate speculators and Silicon Valley software tycoons to Dubai oil sheks, Russian presidents, mineral-rich African dictators and Mexican drug lords," the report said.

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"The 'pirate banking' system now launders, shelters, manages and, if necessary, re-domiciles the riches of many of the world's worst villains, as well as the tangible and intangible assets and liabilities of many of our wealthiest individuals," said the report.

The report states that the top 50 banks managed more than $12 trillion in cross-border invested assets from private clients, trusts and foundations. While the report doesn’t break down how much if any of those flows are illegal, it states that “they are key players in many havens around the globe, and key enablers of the global tax injustice system.”

The report was written by James Henry, a former economist for McKinsey & Co.

Of course, determining how much wealth is hidden overseas is an imprecise science. And many conservative groups contest the estimate.

The problem, says Dan Mitchell, a senior fellow at the Cato Institute, is that the estimate is based on a series of assumptions aimed at making people "believe that much of cross-border investing is all about tax evasion and that all this money should go to government, and that this would be a good thing." The real problem facing governments, Mitchell says, is spending not revenues.

The Tax Justice Network used data from the World Bank and International Monetary Fund, the United Nations, central banks and national accounts to model capital flows for 139 countries. It supplemented this with other data on transfer prices and reserve currencies, along with consulting firm research on offshoring.

All that data-crunching resulted in the estimate that the world's wealthy have between $21 trillion and $32 trillion stashed offshore, and that the world's top 50 banks collectively manage more than $12 trillion of that money. Smaller banks, investment banks, insurance companies, hedge funds and independent money managers oversaw the rest.

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The $21 trillion to $32 trillion estimate does not include real estate, yachts, thoroughbreds or gold bricks, which could also increase the number.

The report says that traditional offshore havens like Switzerland and Singapore hold substantial amounts. But much of the offshore fortune is held in a "virtual country" - a network of complicated cross-border entities designed to shelter wealth.

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