Russia's Putin suggests he will sign U.S. adoption ban

MOSCOW (Reuters) - Russian President Vladimir Putin said on Thursday he saw no reason not to sign a bill into law that would ban Americans adopting Russian children and promised measures to improve care of his country's orphaned youngsters.

Although Putin said he would need to study the final text of the bill, the comments were the strongest indication yet that he will approve the adoption ban legislation, which has strained U.S.-Russia relations.

Parliament gave its final approval on Wednesday to the bill that would also bring in other measures in retaliation for new U.S. legislation designed to punish Russians accused of human rights violations.

"So far I see no reason not to sign it, although I have to review the final text and weigh everything," Putin said in televised remarks at a meeting of senior federal and regional officials.

"I am ready to sign not only the law ... but also a presidential decree that will modify the support mechanisms for orphaned children ... especially those who are in a difficult situation, by that I mean in poor health," Putin said.

Critics of the bill say Russia is playing politics with the lives of children. Child rights advocates say children in Russia's crowded and troubled orphanage system will have less of a chance of finding homes if the bill becomes law.

(Reporting By Alexei Anishchuk; Writing by Alissa de Carbonnel; Editing by Steve Guttermann and Andrew Osborn)

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New India rape protests fizzle, victim airlifted to Singapore

NEW DELHI (Reuters) - Police thwarted an attempt by activists on Thursday to rekindle mass protests in New Delhi over the gang rape and ferocious beating of a young woman, after the victim was airlifted to Singapore for specialist hospital care to save her life.

Demonstrations erupted in New Delhi after the December 16 attack, culminating last weekend in pitched battles between police and protesters around the city's India Gate war memorial.

However, activists who gathered on Thursday for a fresh march on India Gate were stopped by police in riot gear armed with tear gas and water cannons to hold them back.

"We will win back our freedom!" the protesters, mostly university students, shouted as they pushed against barricades on a road leading to the city's landmark monument. Unable to make further headway, the crowd dispersed as night fell.

New Delhi has the highest number of sex attacks among India's major cities, with a rape reported on average every 18 hours, according to the National Crimes Records Bureau.

Most rapes and other sex crimes go unreported and offenders are rarely punished, but the brutality of the assault on the medical student in New Delhi triggered public outrage, demands for both better policing and harsher punishment for rapists.

The 23-year-old victim, who was thrown out of a moving bus after being attacked by six men, was flown to Singapore on Wednesday night for treatment at the city-state's Mount Elizabeth Hospital, after more than a week of intensive care in a government hospital in New Delhi.

Dr. Kelvin Loh, chief executive officer of the Singapore hospital, said on Thursday evening that the woman was in "an extremely critical condition".

"Prior to her arrival, she has already undergone three abdominal surgeries, and experienced a cardiac arrest in India," Loh said. "A multi-disciplinary team of specialists is taking care of her and doing everything possible to stabilize her condition."

The outcry and spasm of violent protests over the case caught Prime Minister Manmohan Singh's government off guard and set off a blame game between politicians and the police.

Singh digressed in a speech on economic planning on Thursday to stress that the safety and security of women was a priority issue for his government, and said there would be a review of the laws and levels of punishment for aggravated sexual assault.

But within an hour of that meeting, his Congress party was plunged into embarrassment over comments made by one of its lawmakers, Abhijit Mukherjee, son of the country's president.

Mukherjee described the anti-rape demonstrations as a "pink revolution" by women wearing heavy make-up who think it is fashionable to protest.

Quizzed repeatedly on news channels, Mukherjee said he regretted causing offence and apologized. However, his comments had already sparked a wave of fury on social media sites and even his own sister said she was "embarrassed" by her brother.

(Writing by Satarupa Bhattacharjya, Additional reporting by Arup Roychoudhury in New Delhi and Hasan Saeed in Singapore; Editing by John Chalmers and Ron Popeski)

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Christian politician quits Egypt upper house as tensions persist

CAIRO (Reuters) - A Christian member of Egypt's upper house of parliament quit on Thursday, reflecting persistent political tensions just a day after the Islamist-dominated chamber took over legislative authority under a contentious new constitution.

The Islamist-backed charter, approved in a referendum this month, is meant to be the cornerstone of a democratic and economically stable Egypt. But the opposition says it is too Islamist and does nothing to protect minorities.

The resignation of Nadia Henry, who represents the Anglican Church in the upper house, also highlights worries by Egypt's Christians, who make up about a tenth of its 83 million population, about political gains made by Islamists since Hosni Mubarak was ousted in a 2011 revolution.

Under pressure to show tolerance towards all groups, President Mohamed Mursi appointed 90 members including Christians, Liberals and women to the upper house - with Islamists from the Muslim Brotherhood and ultra-conservative Salafis - last week.

But in a resignation letter published by the state-owned al-Ahram newspaper, Henry said liberal and other minority groups were not represented properly in the chamber.

"I agreed to the membership of the Shura Council (upper house) in the context of consensus that stressed all civil forces will get appointed," Henry wrote.

"Since that did not happen, I hope you accept my apology for not accepting the appointment," she said.

She did not attend the upper house session on Wednesday, the first with the appointed members.

The opposition fears that the Shura Council upper house, which will hold legislative authority until a new parliament is elected in early 2013, will issue laws curbing freedoms.

Mursi signed the new constitution into law this week after two thirds of Egyptian voters approved it in a two-stage referendum this month which the opposition said was marred by widespread violations.

Propelled to power by his Muslim Brotherhood allies this year, Mursi says the constitution and a subsequent vote to elect a permanent lower house will help stop political unrest and allow him to focus on burning economic issues.

Henry was one of the 90 members handpicked by Mursi into the 270-seat council. She was not immediately available for comment.

Any further resignations would threaten the legitimacy of the Shura Council at a time when it is expected to move fast with difficult reforms key to helping Egypt's battered economy.

Two-thirds of the upper house were elected in a vote this year, with one third appointed by the president, some of whom are members of the Muslim Brotherhood's Freedom and Justice Party and other ultra-conservative Salafis.

Mursi and his Islamist allies have urged the opposition to engage in national unity talks to achieve much needed consensus to help end an economic crisis that has widened the budget deficit and sent the Egyptian pound to a eight-year low.

"We stress again that the nation should achieve internal reconciliation and forget its differences," the Muslim Brotherhood's supreme guide, Mohamed Badei, told Egyptians in his weekly message.

"Let's work seriously to end the reciprocal wars of attrition. We are in an urgent need to unify ranks and group together and focus our capabilities and assets to the general benefit."

The constitution has come under attack from Mursi's opponents after Christians and liberals quit an assembly tasked with drafting the constitution earlier, saying the document gave no guarantees of a civil state and threatened freedoms.

(Editing by Maria Golovnina and Angus MacSwan)

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Iran will open suspect military base if threats dropped: report

DUBAI (Reuters) - Iran would let U.N nuclear inspectors into a military base they suspect was used for atomic weapons-related work, if threats against the Islamic Republic are dropped, a government official was quoted as saying.

The International Atomic Energy Agency (IAEA) believes Iran conducted explosives tests with possible nuclear applications at Parchin, a sprawling military base southeast of Tehran, and has repeatedly asked to inspect it.

Western diplomats say Iran has carried out extensive work at Parchin over the past year to cleanse it of any evidence of illicit activities but IAEA chief Yukiya Amano said earlier this month a visit would still be "useful".

"If the trans-regional threats (against Iran) dissipate, then they will find it possible to visit Parchin," Deputy Foreign Minister Hassan Qashqavi was quoted by the Iranian Labour News Agency as saying on Wednesday. The comments were also published on Thursday by online magazine Iran Diplomacy.

Qashqavi was most likely referring to Israel's threat of military strikes against Iran and the possibility of further sanctions by the West.

Israel has said it will resort to military action if diplomacy fails to prevent Iran getting nuclear weapons. Tehran says its nuclear work is entirely peaceful.

Earlier this month, IAEA officials visited Iran to try to negotiate access to Parchin to resolve outstanding issues related to "possible military dimensions" of Iran's nuclear program.

Iran has repeatedly said that a wider agreement on the IAEA's inquiry must be reached before opening the site to inspectors.

(Reporting By Marcus George; Editing by Robin Pomeroy)

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Syria envoy calls for political change to end conflict

BEIRUT (Reuters) - The international envoy seeking a solution to Syria's 21-month-old conflict said on Thursday political change was needed to end the violence which has killed 44,000 people, and called for a transitional government to rule until elections.

Speaking in Damascus at the end of a five-day trip during which he met President Bashar al-Assad, Lakhdar Brahimi did not spell out detailed proposals but said that only substantial change would meet the demands of ordinary Syrians.

Russian Foreign Minister Sergei Lavrov added to the envoy's call for a peaceful solution when he told a senior Syrian diplomat that only a "broad inter-Syria dialogue and political process" could end the crisis.

Brahimi's push for a transitional government suggested he was trying to build on an international agreement in Geneva six months ago which said a provisional body - which might include members of Assad's government as well as the opposition - should lead the country into a new election.

But the mainly Sunni Muslim Syrian rebels have seized the military initiative since the Geneva meeting in June and the political opposition has ruled out any transitional government in which Assad, from Syria's Alawite minority, plays a role.

Rebel fighters resumed attacks on Thursday against the military base of Wadi Deif, which lies next to Syria's main north-south highway linking Aleppo with Damascus. Around the capital itself, Assad's forces have tried for weeks to dislodge rebels from suburbs which ring the east and south of the city.

"Certainly it was clear in Geneva, and it's even clearer now that the change which is needed is not cosmetic or superficial," Brahimi told a news conference in Damascus before leaving Syria.

"I believe the Syrian people need, want and aspire to genuine change and everyone knows what this means," he said.

"A government must be created ... with all the powers of the state," Brahimi added. He said it should hold power for a transitional period until elections - either for a new president or a new parliament - are held.

"This transitional process must not lead to the ... collapse of state institutions. All Syrians, and those who support them, must cooperate to preserve those institutions and strengthen them," he said.

Radwan Ziadeh of the opposition Syrian National Council dismissed Brahimi's proposal as "unrealistic and fanciful" and said a transitional government could not be built on the same "security and intelligence structure as the existing regime".

TOO SOON FOR COMPLETE PLAN

Russia's Lavrov met Syrian Deputy Foreign Minister Faisal Makdad in Moscow on Thursday and underscored "the lack of an alternative to a peaceful resolution of (Syria's) internal conflict through a broad inter-Syria dialogue and political process," a Russian Foreign Ministry statement said. But it made no mention of ways to achieve those goals.

Syrian and Lebanese sources said Makdad had been sent to Moscow to discuss details of a peace plan proposed by Brahimi.

Brahimi is due in Moscow on Saturday and said he also expected to have a third joint meeting with U.S. and Russian officials soon following two rounds of talks earlier this month. But he denied the existence of a U.S.-Russian plan to end the crisis and said it was too soon to present a "complete plan".

"What is preferred is that we don't present such a plan until we feel that all sides have agreed to it. That way, implementing it is easy. If that doesn't happen, the other solution could be to go to the (United Nations) Security Council to issue a binding resolution for everyone," he said.

A Russian Foreign Ministry spokesman also denied any joint initiative between Moscow and Washington.

World powers remain divided over what has become an increasingly sectarian struggle, with Sunni Muslim states such as Turkey and the Gulf Arab countries supporting the rebels while Shi'ite Iran and Hezbollah have backed Assad, whose Alawite community has its roots in Shi'ite Islam.

Syria's struggle "has taken a vicious form of sectarian confrontation," Brahimi said. "Syrian officials foremost, as well as the international community, must not let Syria slide down this very dangerous path which threatens the future of Syria."

Deep differences between Western powers opposed to Assad - led by the United States - and Russia and China which have supported his government, have left the U.N. Security Council paralyzed and largely sidelined throughout the conflict.

The political stalemate has helped transform a once-peaceful uprising into a civil war in which rebels have grown in military strength and taken control of swathes of territory in the north, leaving Assad increasingly reliant on air power to curb them.

Activists in the central province of Hama, where rebels launched an offensive last week to extend their control southwards towards the capital, reported on Thursday that rebels shot down a MiG jet near the town of Morek.

The Syrian Observatory for Human Rights, which monitors violence across Syria, said air force jets launched three raids on rebel forces around Wadi Deif. The British-based group also reported fierce clashes in the area.

The violence has been accompanied by an escalation in apparently sectarian attacks between the Sunni Muslim majority and minorities such as Assad's Alawite sect, which has largely supported the president.

Activists in Hama uploaded a video of what appeared to be Assad soldiers and shabbiha militia members stabbing the body of a dead man and setting it on fire. The man looked as if he had been beaten to death.

"This is a terrorist, a brother of a whore, one of those trying to destroy the country," one of the men shouted. Two men in camouflage uniforms and army helmets stood by watching. Samer al-Hamawi, an activist from Hama, said rebels in his area found the video on the phone of a soldier they captured this week.

The video emerged a day after Islamist rebel units released footage showing the bodies of dozens of Assad's fighters along a highway near an Alawite town in Hama.

(Additional reporting by Marwan Makdesi in Damascus and Steve Gutterman in Moscow; Editing by Pravin Char)

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Three Afghans dead in new blast at U.S. base in Afghan east

KHOST, Afghanistan (Reuters) - A suicide bomber killed three people in an attack on a U.S. base in Afghanistan on Wednesday, the same base that is believed to be used by the CIA and which a suicide bomber attacked three years ago killing seven CIA employees.

The Afghan Taliban claimed responsibility for the attack in the eastern town of Khost, saying they had sent a suicide bomber driving a van packed with explosives to the base.

"The target was those who serve Americans at that base," said Taliban spokesman Zabihullah Mujahid.

Afghanistan's NATO-led force said the bomber did not get into the base nor breach its perimeter. Police said the three dead were Afghans who were outside the base, which is beside a military airport.

The al Qaeda-linked Haqqani network, widely regarded as the most dangerous U.S. foe in Afghanistan, is active in Khost province, which is on the Pakistani border.

After more than a decade of war, Taliban insurgents are still able to strike strategic military targets, and launch high-profile attacks in the capital, Kabul, and elsewhere.

Three years ago, an al Qaeda-linked Jordanian double-agent killed seven CIA employees and a Jordanian intelligence officer in a suicide bombing at the same base in Khost, known as Forward Operating Base Chapman.

It was the second deadliest attack in CIA history.

Afghan police official General Abdul Qasim Baqizoy, the Khost police chief, said no CIA agents were hurt on Wednesday.

Afghan authorities are scrambling to improve security across the country before the U.S. combat mission ends in 2014.

Besides pressure from the Taliban, U.S.-led NATO forces also face a rising number of so-called insider attacks, in which Afghan forces turn their weapons on Western troops they are supposed to be working with.

On Monday, an Afghan policewoman killed a U.S. police adviser at the Kabul police headquarters, raising troubling questions about the direction of the war.

It appeared to be the first time that a woman member of Afghanistan's security forces carried out such an attack.

On Tuesday, Afghan officials said the woman has an Iranian passport and moved to Afghanistan 10 years ago. There was no suggestion that Iran was involved in the attack on the American.

Officials suspect she may have been recruited by al Qaeda or the Taliban, and had intended to also kill Afghan police officials.

(Reporting by Elyas Wahdat; Writing by Michael Georgy; Editing by Robert Birsel)

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Russian parliament approves ban on American adoptions

MOSCOW (Reuters) - A bill banning Americans from adopting Russian children went to President Vladimir Putin for his signature on Wednesday after winning final approval from parliament in retaliation for a U.S. law meant to punish Russian human rights abusers.

Putin has strongly hinted he will sign the bill, which also outlaws some U.S.-funded non-governmental groups and hits back at U.S. sanctions by imposing visa bans and asset freezes on Americans accused of violating the rights of Russians.

The Federation Council, Russia's upper parliament house, voted unanimously to approve the bill, which has clouded U.S.-Russian relations and outraged liberals who say lawmakers are playing a political game with the lives of children.

The bill has drawn unusual criticism from some government officials including Foreign Minister Sergei Lavrov and Olga Golodets, a deputy prime minister who said it may violate an international convention on children's rights.

Putin has described it as an emotional but appropriate response to U.S. legislation he said was poisoning relations.

U.S. President Barack Obama this month signed off on the Magnitsky Act, which imposes visa bans and asset freezes on Russians accused of human rights violations, including those linked to the death in custody of an anti-graft lawyer in 2009.

The ban on American adoptions takes Russia's response a step further, playing into deep sensitivity among Russians - and the government in particular - over adoptions by foreigners, which skyrocketed after the 1991 Soviet collapse.

The bill is named for Dima Yakovlev - a Russian-born toddler who died of heat stroke when his adoptive American father forgot him in a car.

MORAL GROUNDS

"It is immoral to send our children abroad to any country," Federation Council deputy Valery Shtyrov said in a one-sided debate peppered with hawkish rhetoric before the 143-0 vote.

Child rights advocates say the law, due to take effect on January 1 if signed by Putin, will deprive children of a way out of Russia's overcrowded orphanage system.

"This is the most vile law passed since Putin came to power," opposition activist Boris Nemtsov said, adding that he was certain the president would sign it. "Putin is taking children hostage, like a terrorist".

Police said they had arrested seven people protesting against the law on Wednesday outside the Federation Council.

Nevertheless, lawmaker Gennady Makin said the Magnitsky Act demanded a tough response.

"He who comes to Russia with a sword dies by that sword," he said.

The dispute adds to tension in U.S.-Russia ties already strained over issues ranging from Syria to the Kremlin's treatment of opponents and restrictions imposed on civil society groups since Putin, in power since 2000, began a new six-year term in May.

The Russian bill would outlaw U.S.-funded "non-profit organizations that engage in political activity", which Putin accuses of trying to influence Russian politics.

Russia ejected the United States Agency for International Development (USAID), which funds Russian non-governmental groups, in October, and Putin has signed a law forcing many foreign-funded organizations to register as "foreign agents" - a term that evokes the Cold War.

Americans affected by the visa ban could include those involved in the prosecution of Viktor Bout, a Russian arms trader serving a 25-year prison term in the United States after an arrest and trial condemned as unfair by Moscow.

(Reporting by Alissa de Carbonnel; Writing by Steve Gutterman; Editing by Pravin Char and Peter Graff)

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Japan Abe taps allies for cabinet, pledges deflation fight

TOKYO (Reuters) - New Japanese Prime Minister Shinzo Abe vowed on Wednesday to battle deflation and a strong yen, and bolster ties with the United States as he kicked off a second administration committed to reviving the economy while coping with a rising China.

A hawk on security matters, Abe, 58, has promised aggressive monetary easing by the Bank of Japan and big fiscal spending by the debt-laden government to slay deflation and weaken the yen to make Japanese exports more competitive.

Critics worry, however, that he will pay too little heed to reforms needed to generate growth despite an ageing, shrinking population and reform a creaking social welfare system.

The grandson of a former prime minister, Abe has staged a stunning comeback five years after abruptly resigning as premier in the wake of a one-year term troubled partly by scandals in his cabinet and public outrage over lost pension records.

"With the strength of my entire cabinet, I will implement bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and with these three policy pillars, achieve results," Abe told a news conference after parliament voted him in as Japan's seventh prime minister in six years.

Abe's long-dominant Liberal Democratic Party (LDP) surged back to power in this month's election, three years after a crushing defeat at the hands of the novice Democratic Party of Japan.

CLOSE ALLIES, PARTY RIVALS

Abe appointed a cabinet of close allies who share his conservative views in key posts, but leavened the line-up with LDP rivals to provide ballast and fend off criticism of cronyism that dogged his first administration.

Former prime minister Taro Aso, 72, was named finance minister and also received the financial services portfolio.

Ex-trade and industry minister Akira Amari becomes minister for economic revival, heading a new panel tasked with coming up with growth strategies such as deregulation.

Policy veteran Toshimitsu Motegi, as trade minister, will be tasked with formulating energy policy in the aftermath of the Fukushima nuclear disaster last year.

Loyal Abe backer Yoshihide Suga was appointed chief cabinet secretary, a key post combining the job of top government spokesman with responsibility for coordinating among ministries.

Others who share Abe's agenda to revise the pacifist constitution and rewrite Japan's wartime history with a less apologetic tone were also given posts, including conservative lawmaker Hakubun Shimomura as education minister.

"These are really LDP right-wingers and close friends of Abe," said Sophia University professor Koichi Nakano. "It really doesn't look very fresh at all."

Fiscal hawk Sadakazu Tanigaki, whom Abe replaced as LDP leader in September, becomes justice minister while two rivals who ran unsuccessfully in that party race - Yoshimasa Hayashi and Nobuteru Ishihara - got the agriculture and environment/nuclear crisis portfolios respectively.

CENTRAL BANK THREATENED

Business leaders welcomed the new cabinet, but the biggest corporate lobby, Keidanren, urged the government to take part in the U.S.-led Trans-Pacific Partnership (TPP) trade pact, Kyodo news agency said. The LDP has been wary of the pact given the political clout of the heavily protected farm sector.

The yen has weakened about 9.8 percent against the dollar since Abe was elected LDP leader in September. On Wednesday, it hit a 20-month low of 85.38 yen against the greenback on expectations of aggressive monetary policy easing.

Abe has threatened to revise a law guaranteeing the Bank of Japan's (BOJ) independence if it refuses to set a 2 percent inflation target.

BOJ minutes released on Wednesday showed the central bank was already pondering policy options in November, concerned about looming risks to the economy. The BOJ stood pat at its November rate review meeting, but eased this month in response to intensifying pressure from Abe.

Abe also promised during the election campaign to take a tough stance in territorial rows with China and South Korea over separate chains of tiny islands, while placing priority on strengthening Japan's alliance with the United States.

On Wednesday, he repeated his resolve to firm up ties with Washington and his intention to protect "the people's lives, Japanese territory and its beautiful oceans".

China expressed hope that Abe's cabinet would work with Beijing to improve ties, but reiterated that the disputed isles were its territory. "We hope Japan works with China with sincerity and makes real efforts to solve relevant problems through dialogue and negotiations," Chinese Foreign Ministry spokesman Hua Chunying told a news conference in Beijing.

Abe named low-profile lawmakers to the foreign and defense portfolios. Itsunori Onodera, 52, who was senior vice foreign minister in Abe's first cabinet, becomes defense minister while Fumio Kishida, 55, a former state minister for issues related to Okinawa island - host to the bulk of U.S. forces in Japan - was appointed to the top diplomatic post. Unlike many others in the cabinet, Kishida has an image as something of a diplomatic dove.

Abe, who hails from a wealthy political family, made his first overseas visit to China to repair chilly ties when he took office in 2006, but has said his first trip this time will be to the United States.

He may, however, put contentious issues that could upset key trade partner China and fellow-U.S. ally South Korea on the backburner to concentrate on boosting the economy, now in its fourth recession since 2000, ahead of an election for parliament's upper house in July.

The LDP and its small ally, the New Komeito party, won a two-thirds majority in the 480-seat lower house in the December 16 election. That allows the lower house to enact bills rejected by the upper house, where the LDP-led block lacks a majority.

But the process is cumbersome, so the LDP is keen to win a majority in the upper house to end the parliamentary deadlock that has plagued successive governments since 2007.

"Trust in our party has not yet been fully restored and I feel we are still viewed with critically by the people, so I want to get results as soon as possible to restore trust," Abe told the news conference.

($1 = 84.7950 Japanese yen)

(Additional reporting by Stanley White, Kiyoshi Takenaka, Tetsushi Kajimoto, Kaori Kaneko and Chris Meyers and by Terril Yue Jones in Beijing; Editing by Dean Yates)

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Syria to discuss Brahimi proposals with Russia

BEIRUT (Reuters) - Syrian President Bashar al-Assad dispatched a senior diplomat to Moscow on Wednesday to discuss proposals made by envoy Lakhdar Brahimi to end the conflict convulsing his country, Syrian and Lebanese sources said.

Brahimi, who met Assad on Monday as part of a series of planned talks with Syrian officials and dissidents in Damascus this week, is trying to arrange a peaceful transfer of power, but has disclosed little about how this might be achieved.

More than 44,000 Syrians have died in the revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.

Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.

Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.

However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.

He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.

"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.

Russia, which has given Assad diplomatic and military aid in the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.

On Saturday, Russian Foreign Minister Sergei Lavrov said Syria's civil war had reached stalemate and international efforts to persuade Assad to quit would fail.

Assad's opponents insist the Syrian president must go, given the scale of bloodshed and destruction they blame on him.

Moaz Alkhatib, head of the internationally recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of any real powers.

SHELLING KILLS 20

The comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was among Brahimi's ideas.

"We have told every official we have met: the government and its president cannot stay on in power, with or without their powers. This is unacceptable to Syrians," Alkhatib wrote.

"The coalition leadership has told Lakhdar Brahimi directly that this type of solution is rejected."

While Brahimi was striving to bridge the vast gaps between Assad and his foes, fighting raged on across the country and a senior Syrian military officer defected to the rebels.

Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.

The video published by the Syrian Observatory for Human Rights showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.

The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.

Rebels re-launched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a critical battle for a major army base and fuel storage and distribution point.

Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with an explosives-rigged vehicle.

The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several killed in Wednesday's fighting, which it said was among the heaviest there for months.

As violence has intensified in recent weeks, with Assad using his air power and artillery to contain rebel advances, daily death tolls have climbed. At least 190 were killed across the country on Tuesday alone, the Observatory said.

The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.

"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.

A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".

Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.

(Additional reporting by Laila Bassam; Writing by Alistair Lyon)

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Egypt's contentious Islamist constitution becomes law

CAIRO (Reuters) - Egyptian President Mohamed Mursi signed into law a new constitution shaped by his Islamist allies, a bitterly contested document which he insists will help end political turmoil and allow him to focus on fixing the economy.

Anxiety about a deepening political and economic crisis has gripped Egypt in past weeks, with many people rushing to buy dollars and withdraw their savings from banks. The Egyptian pound tumbled on Wednesday to its weakest level against the U.S. currency in almost eight years.

The new constitution, which the liberal opposition says betrays Egypt's 2011 revolution by dangerously mixing religion and politics, has polarized the Arab world's most populous nation and prompted occasionally violent protest on the streets.

The presidency said on Wednesday that Mursi had formally approved the constitution the previous evening, shortly after results showed that Egyptians had backed it in a referendum.

The text won about 64 percent of the vote, paving the way for a new parliamentary election in about two months.

The charter states that the principles of sharia, Islamic law, are the main source of legislation and that Islamic authorities will be consulted on sharia - a source of concern to the Christian minority and others.

The referendum result marked yet another electoral victory for the Islamists since veteran autocrat Hosni Mubarak was toppled in 2011, following parliamentary elections last year and the presidential vote that brought Mursi to power this year.

Mursi's government, which has accused opponents of damaging the economy by prolonging political upheaval, now faces the tough task of building a broad consensus as it prepares to impose austerity measures.

CRISIS ATMOSPHERE

The atmosphere of crisis deepened this week after the Standard & Poor's agency downgraded Egypt's long-term credit rating and warned of a possible further cut. The government has imposed currency restrictions to reduce capital flight.

The pound traded as low as 6.1775 against the dollar on Wednesday, close to its all-time low of 6.26 hit on October 14, 2004, on concerns that the government might devalue or tighten restrictions on currency movements.

"All customers are rushing to buy dollars after the downgrading," said a dealer at a Cairo-based bank. "We'll have to wait to see how the market will operate with the U.S. dollar, because as you know there is a rush at the moment."

Keen to be seen as decisive, the government is now in talks with business figures, trade unions and other groups to highlight the need for tax increases to resolve the crisis.

Mursi has committed to such austerity measures to receive a $4.8 billion loan from the International Monetary Fund.

However, Al-Mal newspaper quoted Planning Minister Ashraf al-Araby as saying the government would not implement the tax increases until it had completed the dialogue with different parts of society.

In Cairo's bustling centre, people openly expressed their frustration with economic instability as they went about their daily business.

"The country's going to the pits. Everything is a mess," Hamdy Hussein, a 61-year-old building janitor, said angrily. "It's worse than ever. Mubarak was better than now. People were living and there was security."

Ashraf Mohamed Kamal, 30, added: "The economic situation will be a mess in the next few years. It already is. People will get hungrier. People are now begging more."

TURMOIL CONTINUES

Mursi, catapulted into power by his Islamist allies this year, believes adopting the constitution quickly and holding the vote for a permanent new parliament will help to end the long period of turmoil and uncertainty that has wrecked the economy.

Mursi's government argues the constitution offers enough protection to all groups, and that many Egyptians are fed up with street protests that have prevented a return to normality and distracted the government from tackling the economy.

The charter gives Egypt's upper house of parliament, which is dominated by Islamists, full legislative powers until the vote for a new lower house is held.

While stressing the importance of political stability to heal the economy, Mursi's government has tried to play down the economic problems and appealed for unity despite the hardship.

"The government calls on the people not to worry about the country's economy," Parliamentary Affairs Minister Mohamed Mahsoub told the upper house in a speech. "We are not facing an economic problem but a political one and it is affecting the economic situation. We therefore urge all groups, opponents and brothers, to achieve wide reconciliation and consensus."

Mursi is due to address the upper house on Saturday in a speech likely to be dominated by economic policy.

Sharpening people's concerns, the authorities imposed currency controls on Tuesday to prevent capital flight. Leaving or entering Egypt with more than $10,000 in cash is now banned.

Adding to the government's long list of worries, Communications Minister Hany Mahmoud has resigned citing his "inability to adapt to the government's working culture".

The opposition has condemned the new basic law as too Islamist, saying it could allow clerics to intervene in the lawmaking process and leave minority groups without proper legal protection. It said this month's vote was marred by major violations.

Nevertheless, major opposition groups have not called for new protests, suggesting that weeks of civil unrest over the constitution may be subsiding now that it has passed.

The United States, which provides $1.3 billion a year in military aid plus other support to Egypt and sees it as a pillar of security in the Middle East, called on Egyptian politicians to bridge divisions and on all sides to reject violence.

(Additional reporting by Patrick Werr; Writing by Maria Golovnina; editing by David Stamp)

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