Israeli Foreign Minister Avigdor Lieberman on Sunday claimed that the Palestinians were planning "bloodshed" for September as they push for UN recognition of an independent state.
"It is clear that the Palestinian Authority is preparing bloodshed and violence the like of which we have never seen," Lieberman told reporters at a briefing in the Knesset, Israel's parliament.
The hardline foreign minister provided no evidence to back his claim but suggested the Palestinians could organise marches to coincide with the UN General Assembly in September.
"It is clear that marches by thousands have one aim, to drag the international community into the Israeli-Arab conflict and to circumvent direct negotiations so that a solution is imposed by the international community," Lieberman said, speaking in Hebrew.
Lieberman said he would ask ministerial colleagues to back him in seeking to sever cooperation with the Palestinian Authority, the administration of Palestinian president Mahmud Abbas.
"It is time (for them) to understand that there is a price," Lieberman said.
"We should respond not only with words but with actions."
But Palestinian foreign minister Riyad al-Maliki denied any violent intent on the Palestinian side and accused Lieberman of seeking to foment unrest.
"The Palestinians don't need this kind of incitement just because they're asking for their rights," he told AFP.
"We believe one hundred percent that any kind of violence will reflect negatively against our demands," he said.
The Palestinian leadership has drawn up a plan to approach the United Nations in September seeking membership for a state on the lines that existed before the 1967 Six Day war, including the West Bank, Gaza Strip and east Jerusalem.
The plan is firmly opposed by Israel and the United States, which has threatened to veto the membership attempt at the Security Council.
Israel insists that only direct negotiations can achieve a durable peace between the sides.
The Palestinians say their initiative does not contradict the possibility of new talks, but insist that they will not return to negotiations without any Israeli settlement freeze and a clear framework for new discussions. •
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Global stocks fall after US debt downgrade
By PAN PYLAS - Associated Press | AP – 7 hrs ag
Rudolf Oultz watches the display board at the Australia Stock Exchange in Sydney...
Japanese Finance Minister Yoshihiko Noda speaks to reporters at the ministry in Tokyo …
LONDON (AP) — Global stock markets sank again Monday as worries over the downgrade of U.S. debt outweighed relief at a European Central Bank pledge to buy up Italian and Spanish bonds to help the two countries avoid devastating defaults.
European markets shed their early momentum and losses were heavy in Asia. Most stocks were trading sharply lower amid mounting fears over the opening of U.S. markets, when traders will have their first chance to respond to Standard & Poor's momentous decision to lower its triple A rating for the U.S.
"The reverberations from S&P's downgrade are still being felt across the globe," said David Jones, chief market strategist at IG Index.
For a brief while Monday, it seemed that the risky decision by the European Central Bank to buy the bonds of Italy and Spain in order to help them pay their way had helped ease the selling pressure, at least in Europe, but that soon changed.
Monday's trading came after one of the worst market weeks since the collapse of U.S. investment bank Lehman Brothers in 2008 — around $2.5 trillion was wiped off global stocks last week.
In Europe, Britain's FTSE 100 index of leading British shares was down 1.7 percent at 5,157 while France's CAC-40 fell 1.6 percent to 3,227. Germany's DAX was 2.3 percent lower at 6,091.
Sentiment in Europe was hurt by an expected sell-off at the U.S. open — Dow futures were down 1.8 percent at 11,196 while the broader Standard & Poor's 500 futures fell 2.1 percent to 1,173.
So far, the S&P downgrade doesn't seem to be having too much of an impact on U.S. government bonds, known as Treasuries. The worry has been that the downgrade would prompt investors to demand more, but the yield on ten-year Treasuries has actually fallen.
"Early market reactions suggest that the treasury market will remain well supported," said Jane Foley, an analyst at Rabobank International. "Even though there may be no sharp sell-off in treasuries this week, S&P's decision should at least provide a signal to the U.S. government that it may be foolhardy to continue to take its creditors for granted indefinitely."
In Europe, a particular focus has also been on the bond markets and the ECB's statement late Sunday that it would "actively implement" its bond-buying program to calm investor concerns that Italy and Spain won't be able to pay their debts. Last week, worries over the two countries' ability to keep tapping bond markets contributed to the turmoil in global markets.
Traders say the European Central Bank has spent around euro2 billion already Monday and that's really had a marked impact on the cost of borrowing for both countries. The yield on Italy's ten-year bonds fell 0.62 percentage point to 5.38 percent while Spain's tumbled 0.83 percentage point to 5.21 percent.
Seeking to avert panic spreading across financial markets, the finance ministers and central bankers of the Group of 20 industrial and developing nations issued a joint statement Monday saying they were committed to taking all necessary measures to support financial stability and growth.
"We will remain in close contact throughout the coming weeks and cooperate as appropriate, ready to take action to ensure financial stability and liquidity in financial markets," they said.
However, many analysts think that the international efforts may not be enough to calm jittery markets.
"Investors are concerned about a rising risk of global recession, credit downgrades especially now in the eurozone, such as France, the threat of a major bank bust and a global liquidity trap as investors stay in cash," said Neil MacKinnon, global macro strategist at VTB Capital.
Earlier in Asia, the repercussions of S&P's downgrade weighed on stock markets.
Among the major markets, Japan's Nikkei 225 stock average closed down 2.2 percent 9,097.56, while Hong Kong's Hang Seng fell the same rate to 20,490.50. South Korea's Kospi ended 3.8 percent lower as did China's main exchange in Shanghai.
In the currency markets, the euro was down 0.3 percent at $1.4265 while the dollar was down 0.6 percent at 77.80 yen. The U.S. dollar also hit another record low against the Swiss franc.
Fears over the global economy are having a major impact on oil markets, with the main New York rate down another $2.99 to $83.91 a barrel. •
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| Electric-grid threat: U.S. 'will be taught mother of all lessons'
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| Iran is planning to retaliate against the United States for the sabotage against its nuclear program, according to an editorial in the Kayhan newspaper. Specifically, it's looking into launching a cyber attack against U.S. electrical grid systems. |
| Read the latest now on WND.com.
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Building set ablaze in south London as riots escalate
By Mohammed Abbas | Reuters – 28 mins ago
A burning car is seen on a street in Hackney, east London, August 8, 2011.
The disturbances started late Saturday in London's northern Tottenham district when a peaceful protest over the police's shooting of a suspect turned violent, leaving parts of the high street charred and its shops looted.
The violence Monday spread to Hackney in east London and the deprived districts of Peckham and Lewisham in south London. •
(Reporting by Mohammed Abbas)
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Latest update 02:10 08.08.11
Netanyahu anticipates 'enormous change' in Israel's economy
As market spirals down, the prime minister announces formation of panel to meet with protest leaders.
By Barak Ravid and Moti BassokPrime Minister Benjamin Netanyahu Sunday announced the formation of a panel of experts to hold a dialogue with the leaders of the tent protests.
Meanwhile, he and Finance Minister Yuval Steinitz both think the downgrade of America's credit rating last week and Europe's economic crisis are warnings that Israel must stick to a fiscal policy of curbing spending and paring down debt.
 | Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz consulting in Knesset recently. |
| Photo by: Emil Salman |
Their concern is great enough that senior treasury and Bank of Israel officials held an emergency meeting on the economy at midnight on Saturday. The atmosphere of anticipation was only heightened by yesterday's stock market collapse, when leading indexes in Tel Aviv plunged 7 percent.
Steinitz, interviewed on Army Radio yesterday, noted that Israel has certain constraints, such as defense spending, which is necessarily higher than the Western norm, and must also be careful not to increase the deficit. "We don't want to be in the situation of Greece, Spain and other countries," he warned.
Netanyahu's panel is to be chaired by Prof. Manuel Trajtenberg, who formerly headed the government's economic advisory council. Netanyahu has not yet decided who else will serve on it.
The panel is to submit proposals for reform to the socioeconomic cabinet by the end of September. That body, headed by Steinitz, will review the ideas and submit its own recommendations to Netanyahu by the end of October. Netanyahu may make additional changes, after which he will submit a final draft to the cabinet for approval. That is supposed to happen in late October or early November.
"I want the government's full backing in the enormous change we are about to make in Israel's economy," Netanyahu told yesterday's cabinet meeting.
The decision to set up a panel of experts replaces the move Netanyahu announced just a week ago: having a small group of ministers conduct a dialogue with the protesters. A panel headed by an outside expert will be less vulnerable to coalition pressures, but will also have less status and authority. Moreover, the fact that it won't submit its recommendations directly to the cabinet or the prime minister, as the panel of ministers was to have done, but only to the socioeconomic cabinet, will both delay the process and make it more likely that the proposals will be altered substantially.
The socioeconomic cabinet comprises 15 ministers - about half the government - from every party in the coalition. Yesterday, it also acquired two observers: Culture Minister Limor Livnat and Minister without Portfolio Michael Eitan, both from Netanyahu's Likud party.
Trajtenberg's panel is slated to include academic experts, businessmen, Bank of Israel representatives, and officials from the finance, industry and other ministries. But so far, Netanyahu has had trouble recruiting people from outside the government: Several people whom he called personally refused, either because they oppose the panel's expected policy line or because they felt it lacked authority.
The Prime Minister's Office, however, said the panel's composition has not yet been made public because it is still making sure none of the members has a conflict of interests. It declined to say when the names would be announced, or how many members it will have, but the assessment is that it will comprise about 10 members, half from the government and half from outside. Netanyahu told the cabinet yesterday that Trajtenberg, who has taken over the job of putting the panel together, will need "a day or two to complete the list of outside experts."
The panel will then start meeting with the protest leaders and various nonprofit organizations.
Trajtenberg, a professor of economics at Tel Aviv University, currently heads the Council for Higher Education's planning and budgeting committee. Under Netanyahu's predecessor, Ehud Olmert, he set up and led the economic advisory council. His appointment to head the current panel is surprising, as he is not considered close to Netanyahu. But it is also a slap in the face to the economic advisory council's current head, Prof. Eugene Kandel.
"I'm attentive to the protest, but we can't satisfy everyone," Netanyahu stressed at the cabinet meeting. "We'll listen to everyone. We'll act sensitively and responsibly ... We'll conduct a real dialogue. We won't present lip-service solutions; we want to bring real solutions. In the end, we'll be judged on our practical solutions."
Indeed, Knesset Speaker Reuven Rivlin said yesterday that the ongoing protests might well lead to early elections.
Netanyahu said that Trajtenberg's panel will submit recommendations on the following issues: "One, a change in priorities, with the goal of easing the economic burdens on Israel's citizens. Two, a change in the mix of tax payments. Three, expanding access to social services. Four, increasing competition and efficiency in the goods and services markets, with the goal of reducing prices. Five, implementing the housing plan we've already launched.
"The panel's recommendations will reflect the need to maintain fiscal responsibility in the state budget," he added. "Such responsibility is especially necessary at a time of economic uncertainty."
Trajtenberg told the cabinet that public frustration is high, but this is also an opportunity to effect real change.
Yet one reform has already stalled: The cabinet yesterday deferred a vote on proposals to open the dairy market to competition because they lacked a majority. And several ministers and government officials said they thought Netanyahu and Steinitz had created the three-stage decision-making process (experts, socioeconomic cabinet, full cabinet ) mainly to buy time, in hopes that the protests will die down in a few weeks. Netanyahu, they noted, is ideologically opposed to a welfare state; he favors the free market and privatization. •
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May God richly bless us with mercy, as these headaches and stressers are happening on a daily basis now! -Missygirl*
