Israel finance minister says Iran economy "on verge of collapse"

JERUSALEM (Reuters) - Iran's economy is edging towards collapse due to international sanctionsover its controversial nuclear program, Israeli Finance Minister Yuval Steinitz said on Sunday.

Israel regards the prospect of its arch enemy developing nuclear weapons as a threat to its existence, and Prime Minister Benjamin Netanyahu has said that, although sanctions are taking their toll, they are not yet forcing Iran to abandon work that could soon lead to a nuclear warhead.

However, Israeli officials appear increasingly ready to acknowledge the effect of recent American and European sanctions designed to restrict Iran's lifeline oil exports.

"The sanctions on Iran in the past year jumped a level," Steinitz told Israel Radio, noting that as finance minister, he follows Iran's economy.

"It is not collapsing, but it is on the verge of collapse. The loss of income from oil there is approaching $45-50 billion by the year's end," Steinitz said.

The United States, Israel's main ally, says it will not allow Tehran to produce the bomb, but sanctions should be given more time to work before force is considered.

American and Israeli commentators say a military strike to destroy Iran's nuclear plants, which Iran says are designed only to develop a nuclear generating capacity, could trigger a regional war with unforeseeable consequences.

In Israel too, some prominent political and military figures question Netanyahu's warning that Iran is so close to the threshold of nuclear capability that military action will soon be the only way to stop it.

But there has been no open split in his coalition over the issue. Steinitz praised the prime minister's speech to the U.N. General Assembly last week in which he used graphics to underscore the perceived Iranian threat.

SOARING INFLATION

An Israeli Foreign Ministry document leaked last week said sanctions had caused more damage to Iran's economy than at first thought and ordinary Iranians were suffering under soaring inflation, although this did not appear to be changing policy.

On Saturday, the Iranian currency slumped to an historic low of about 28,400 rials to the dollar, a fall of about 57 percent since June 2011, meaning a sharp rise in the price of imports.

"The Iranians are in great economic difficulties as a result of the sanctions," Steinitz said.

Parliamentary opponents of Iranian President Mahmoud Ahmadinejad say sanctions are not a major cause of Iran's economic problems and accuse his government of mismanaging the economy.

"The first approach today is that authorities accept their mistakes and failures, second, that they not blame their mistakes on others, and third, that they invite all the pundits and experts to find a way to solve the problems of the economy," Iranian legislator Ezzatollah Yousefian was quoted as saying by the Mehr news agency.

Israeli Foreign Minister Avigdor Lieberman told Saturday's Haaretz daily that he believed Iran's Islamic theocracy would be toppled in a revolt like the one that toppled Egyptian president Hosni Mubarak last year.

"The opposition demonstrations that took place in Iran in June 2009 will come back in even greater force," he told the paper. "In my view, there's going to be an Iranian-style Tahrir revolution. The young generation are sick of being held hostage and sacrificing their future."

(Reporting by Ari Rabinovich in Jerusalem. Additional reporting by Yeganeh Torbati in Dubai; Writing by Douglas Hamilton; Editing by Kevin Liffey)

Police: 23 killed in blasts across Iraq

BAGHDAD (AP) — Bombs striking Shiite neighborhoods, security forces and other targets acrossIraq killed at least 23 people Sunday, officials said. It was the latest instance in which insurgents launched coordinate attacks in multiple cities across the country in a single day, apparently intending to rekindle widespread sectarian conflict and undermine public confidence in the beleaguered government.

The deadliest attack came in the town of Taji, a former al-Qaida stronghold just north of Baghdad, where three explosive-rigged cars went off within minutes of each other. Police said eight people died and 28 were injured in the back-to-back blasts that began around 7:15 a.m.

In all, at least 82 people were wounded in the wave of attacks that stretched from the restive but oil-rich city of Kirkuk in Iraq's north to the southern Shiite town of Kut.

There was no immediate claim of responsibility for the violence, but car bombs are a hallmark of al-Qaida in Iraq. The militant network has vowed to take back areas of the country, like Taji, from which the Sunni insurgent network was pushed before U.S. troops withdrew last December.

Shortly after the Taji attacks, police said a suicide bomber set off his explosives-packed car in the Shiite neighborhood of Shula in northwest Baghdad. One person was killed and seven wounded. Police could not immediately identify the target.

"So many people were hurt. A leg of a person was amputated," lamented Shula resident Naeem Frieh. "What have those innocent people done to deserve this?"

Within an hour, another suicide bomber drove a minibus into a security checkpoint in Kut, located 160 kilometers (100 miles) southeast of Baghdad. Three police officers were killed and five wounded, Maj. Gen. Hussein Abdul-Hadi Mahbob said.

And in Iraq's north, another policeman was killed when security forces were trying to defuse a car bomb parked on the main highway between the cities of Kirkuk and Tuz Khormato, said Kirkuk police chief Brig. Gen. Sarhad Qadir. A second policeman was wounded in the blast, Qadir said. Kirkuk is about 290 kilometers (180 miles) north of Baghdad.

At around 10:30 a.m., another parked car bomb went off next to a bus carrying Iranian pilgrims in the town of Madain, killing three Iraqis and injuring 11 others included seven Iranians, another police officer and health official said. Madain is mainly Sunni area located 20 kilometers (12 miles) southeast of Baghdad.

In the town of Balad Ruz, 75 kilometers (45 miles) northeast of Baghdad, a parked car bomb targeted a passing police patrol, killing two policemen and injuring seven others, a police officer and health official said. And in the nearby town of Khan Bani Saad, 15 kilometers (nine miles) northeast of Baghdad, yet another parked car bomb exploded near a market and killed one civilian and injured nine others, they added.

Two Iraqi soldiers were killed in the town of Tarmiyah, 50 kilometers (30 miles) north of Baghdad, when their patrol hit a roadside bomb, another police officer and health official said. Six other people, including four civilians were wounded.

And in Baghdad, another parked car bomb went off next to a police patrol, killing a police officer and a civilian, other officials said. Eight other people were injured.

Health officials in Taji, Tarmiyah and Baghdad confirmed the casualties. All officials spoke anonymously as they were not authorized to release information.

Violence has dropped since the height of Iraq's bloodshed a few years ago, but Iraqi forces have failed to stop the attacks that continue to claim lives almost daily.

Senior central government officials were not available for comment.

Muslim protesters torch Buddhist temples, homes in Bangladesh

Bangladeshi Buddhist monks form a human chain during a protest against attacks on Buddhist temples and homes, in front of national press club in Dhaka September 30, 2012. Hundreds of Muslims in Bangladesh burned at least four Buddhist temples and 15 homes of Buddhists on Sunday after complaining that a Buddhist man had insulted Islam, police and residents said. REUTERS/Andrew Biraj (BANGLADESH - Tags: RELIGION CIVIL UNREST)

Bangladesh's Home Minister Mohiuddin Khan Alamgir (3rd L) visits a burned temple in Cox's Bazar September 30, 2012. Hundreds of Muslims in Bangladesh burned at least four Buddhist temples and 15 homes of Buddhists on Sunday after complaining that a Buddhist man had insulted Islam, police and residents said. REUTERS/Stringer (BANGLADESH - Tags: RELIGION CIVIL UNREST POLITICS)

COX'S BAZAR, Bangladesh (Reuters) - Hundreds of Muslims inBangladesh burned at least four Buddhist temples and 15 homes of Buddhists on Sunday after complaining that a Buddhist man had insulted Islam, police and residents said.

Members of the Buddhist minority in the Cox's Bazar area in the southeast of the country said unidentified people were bent on upsetting peaceful relations between Muslims and Buddhists.

Muslims took to the streets in the area late on Saturday to protest against what they said was a photograph posted on Facebook that insulted Islam.

The protesters said the picture had been posted by a Buddhist and they marched to Buddhist villages and set fire to temples and houses.

Police said they had deployed extra security forces and banned gatherings in Buddhist-dominated areas.

"We brought the situation under control before dawn and imposed restrictions on public gatherings," said Salim Mohammad Jahangir, Cox's Bazar district police superintendent.

Many people in predominantly Muslim Bangladesh have been angered in recent days by a film made in California that mocks the Prophet Mohammad.

Muslims in Bangladesh and beyond have also been outraged by violence over the border in Myanmar where members of the majority Buddhist community clashed with minority Muslims this year.

Police had escorted the man accused of posting the insulting photograph and his mother to safety, Jahangir said.

Sohel Sarwar Kajal, the Muslim head of the council in the area where the arson took place, said he was trying to restore communal peace.

"We are doing everything possible to quell tension and restore peace between the communities," he told reporters.

(This story corrects "Bazaar" to "Bazar" in sixth paragraph)

(Reporting by Nurul Islam; Writing by Anis Ahmed; Editing by Robert Birsel)

Iran touts domestic Internet as Gmail ban rankles

TEHRAN (AP) — Iranian officials announced that they would soon introduce local alternatives toGoogle and its Gmail e-mail service, even as the country's media and even some officials stepped up complaints over Tehran's decision to enact a ban on Gmail in response to an anti-Islam film, newspapers reported on Sunday.

Last week, Iran blocked Gmail -- but not the search engine of the parent company Google -- in response to a court order linked to the distribution of a low-budget, U.S.-produced film on YouTube, also owned by Google.

In a country with 32 million Internet users out of a population of 75 million, according to official statistics, that ban has caused widespread resentment. Even many pro-government newspapers have complained of the disruptions.

"Some problems have emerged through the blocking of Gmail," Hussein Garrousi, a member of a parliamentary committee on industry, was quoted Sunday by the independent Aftab daily as saying. He said that parliament would summon the minister of telecommunications for questioning if the ban was not lifted.

The deputy minister, Ali Hakim Javadi, told reporters that Iranian authorities were considering lifting the Gmail ban, but also wanted to introduce their own domestic alternatives: the Fakhr ("Pride") search engine and the Fajr ("Dawn") e-mail services, Aftab reported.

Iran's clerical establishment has long signaled its intent to get citizens off of the international Internet, which they say promotes Western values, and onto a "national" and "clean" domestic network. But it is unclear whether Iran has the technical capacity to follow through on its ambitious plans, or is willing to risk the economic damage.

Bans on Gmail and other services like YouTube and Facebook have left Internet users scrambling to find ways to bypass the blocks.

On Saturday, Asr-e Ertebat weekly reported that Iranians had paid a total of 4.5 million US dollars to purchase proxy services to reach blocked sites over the past month.

Somali militants flee invasion to avoid losses

MOGADISHU, Somalia (AP) — The al-Qaida-linked rebels who once controlled nearly all of Somalia's capital and sowed fear throughout the southern part of the country are fleeing their last remaining stronghold because they are outgunned and don't want heavy losses, experts said Sunday.

Kenyan troops invaded the southern Somali city of Kismayo early Friday, and the militant Islamist group al-Shabab announced soon after that their forces were leaving the lucrative port town behind. Kenyan forces have not yet moved through the whole town, but a military spokesman said troops met no resistance on Sunday.

After years of bloody street-by-street warfare, African Union troops from Uganda and Burundipushed al-Shabab out of Mogadishu in August 2011. The AU troops have since taken over towns outside of Mogadishu as well. Kenyan forces invaded Somalia late last year, and have been moving slowly toward Kismayo.

The once-powerful al-Shabab spent years defending its Mogadishu territory, but since being forced out has chosen to retreat from towns when challenged by African Union forces or Ethiopian troopswho moved into western Somalia earlier this year.

"The most plausible explanation is that they fear that they'll be outgunned by the coalition force, and as a result are incentivized to retreat," said Abdihakim Aynte, a Somali political analyst in Mogadishu. "We also know al-Shabab, by nature, couldn't engage in conventional warfare, especially in an urban area."

Aynte noted that al-Shabab fought conventional-style battles with Ethiopian troops in 2006 and 2007 "and the result was bloody and nasty."

Col. Cyrus Oguna, the spokesman for the Kenyan military, said that Kenyan troops now stationed in northern Kismayo are making plans to expand south. Oguna said he didn't know how many al-Shabab fighters are left in Kismayo, but that "we can probably say now that the numbers are less than when we got in."

An al-Shabab spokesman said on Twitter that the militants had left town and residents have reported that government and police buildings once occupied by al-Shabab have been abandoned. Oguna said Kenyan forces are prepared for multiple scenarios.

"If they were going to fight, they were going to be fought. If they were going to run away, there were some contingencies to deal with that," Oguna said.

The conventional wisdom on al-Shabab says they will turn into a guerrilla force that attacks using suicide and roadside bombs. Mohamed Sheik Abdi, another political analyst in Mogadishu, said the group will most likely divide up and attack vulnerable targets.

Yusuf Abdi Hussein, a former colonel in the Somali army, said the future political leadership of Kismayo will also dictate what al-Shabab does. The new administration will either empower or thwart their guerrilla attacks, he said.

"Usually Kismayo is contested by rival clans seeking to manipulate the resources and revenues from the port," Hussein said. "Al-Shabab will take advantages of those clan lines and will side with the disgruntled clans to use them against the government and Kenyan forces. They'll also use that issue to illustrate themselves as the only administration that could keep the two rivals living peacefully together."

Al-Shabab tries to impose an ultra-conservative style of Islam and enforce conservative social rules in areas they control. They carry out public punishments like whippings, stonings and executions.

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