Myanmar says jets used against Kachin rebels


YANGON (Reuters) - Myanmar's military has used jets to attacks rebel fighters in northern Kachin state, the government said on Thursday, its first admission of an intensification of a conflict that has raised doubts about its reformist credentials.


Rebel sources have reported aerial bombings, shelling and even the use of chemical weapons since December 28 after the Kachin Independence Army (KIA) ignored an ultimatum to stop blocking an army supply route in the hilly, resource-rich state where more than 50,000 people have been displaced.


Official newspapers said that air support was used on December 30 to thwart KIA fighters who had occupied a hill and were attacking logistics units of the Tatmadaw, as Myanmar's military is known.


"The Tatmadaw troops cleared Point-771 hill and its surrounding areas where the KIA troops were attacking the Tatmadaw logistic troops," the New Light of Myanmar, a government mouthpiece, said. "The air cover was used in the attack."


U.N. Secretary-General Ban Ki-moon voiced concern on Wednesday over reports of helicopters and fighter jets being used in the state bordering China. The KIA said the attacks were intended to clear the path for an assault on its headquarters in Laisa.


Ban called on Myanmar's government to "desist from any action that could endanger the lives of civilians" and reiterated demands for humanitarian aid groups to be granted access, U.N. spokesman Martin Nesirky said in a statement.


President Thein Sein's quasi-civilian administration insists it wants a ceasefire and political dialogue. It says troops have acted only in self-defense and on Thursday denied having plans to seize the KIA's stronghold.


DOMINANT MILITARY


The escalation of fighting has raised doubts about the sincerity of the reformist ex-generals running the government and the extent of their power in a country the size of Britain and France plagued by decades of internal conflict.


Some analysts and diplomats say central government is either not fully committed to peace with the KIA or unable to assert control over the military, which still dominates politics and the economy despite formally ceding power in March 2011.


Colonel James Lum Dau, a Thai-based spokesman for the KIA's political wing, said Kachin officials on the ground had reported up to 300 people killed in air strikes.


"We are in a defensive position. Right now more people are suffering not only bombings, but shelling and spraying of chemical weapons with helicopter gunships and jets," he said. "Only god knows what to do. We are praying."


It is difficult for journalists to independently verify accounts from the two sides.


Fighting erupted in Kachin in June 2010, ending a 17-year truce, and has continued even as government negotiators have agreed ceasefires elsewhere with ethnic Shan, Chin, Mon and Karen militias after decades of fighting in border areas.


Mistrust runs deep between the military and the KIA, which was once backed by China, and multiple rounds of talks aimed at reaching a ceasefire have gone nowhere. Analysts say a history of bad blood and a battle for control of resources, including highly lucrative jade, could be stoking the unrest.


Zaw Htay, a senior official in Thein Sein's office, told Reuters no air strikes had taken place but K-8 trainer jets had provided cover fire to protect ground troops from rebel attacks. The military, he said, had no intention of seizing the KIA's headquarters.


"The president has said this and at the same time he has invited KIA leaders to come and talk with him in Naypyitaw, but they still haven't responded," Zaw Htay said.


(Additional reporting by Paul Carsten in Bangkok; Writing by Martin Petty; Editing by Alan Raybould)



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US stocks soar on fiscal cliff deal






NEW YORK: US stocks shot up Wednesday on news of a fiscal cliff deal in Congress that prevented most tax increases and delayed sharp spending cuts.

Fifteen minutes into trade, the Dow Jones Industrial Average was up 215.17 points (1.64 percent) at 13,319.31.

The tech-rich Nasdaq Composite added 71.73 points (2.38 percent) at 3,091.24, while the broad-market S&P 500 gained 25.76 points (1.81 percent) at 1,451.95.

In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of a bill that avoids the "fiscal cliff" of automatic spending cuts and tax increases.

While markets were closed on Tuesday for the New Year holiday, lawmakers approved a compromise bill that raises taxes on the rich and puts off automatic $109 billion federal budget cuts for two months.

If they had failed, Americans would have been hit by sweeping tax hikes, and spending cuts would have kicked in across the government, in a combined $500 billion shock that could have undermined the tepid recovery.

The Wall Street rally reflected a sense of relief that the tax deal should help keep the US economy from slipping back into recession, said Patrick O'Hare of Briefing.com.

"Still, it seemingly ignores the fact that the tax deal, which did not include an extension of the payroll tax cut, is going to be a drag on the economy."

- AFP/de



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Judge decides to keep Samsung sales data unsealed



U.S. District Court Judge Lucy Koh has denied Samsung's request to keep its phone and device sales data out of the public's eye.


According to Bloomberg, which obtained a copy of an order filed earlier this week, Koh decided that Samsung must file and cannot seal an exhibit detailing total units sold on certain Samsung products. The products included in that exhibit, as well as the span of time in which the sales were registered, were not disclosed in Koh's order.


Judge Koh has been at the epicenter of Apple and Samsung's vicious patent battle in a San Jose court. The judge presided over Apple's first major victory in their battle, when the iPhone maker was awarded more than $1 billion from a jury that found Samsung violated several of its patents. Last month, Judge Koh denied Apple's request for a sales ban on Samsung products.



Still, the case continues on, as Apple tries to seek more damages from Samsung, and Samsung plans its appeal to a Federal Circuit court. According to Bloomberg, Samsung wanted to keep its sales data out of the court record until its appeal was heard by that circuit court -- a plea Koh struck down.


"Samsung's appeal involves pricing information and profit margins," Koh wrote in her order, according to Bloomberg, adding that the soon-to-be unsealed exhibit "only lists the number of units sold in each of several recent months."


This isn't the first time sales data has been made public. In August, Apple was forced to reveal sales data on its iPhone, iPad, and iPod Touch over a period of five years. Samsung had to do the same on its Galaxy Prevail mobile phone. Just a couple of months later, Apple was ordered by Judge Koh to share its sales, earnings, and profit margins, on the iPhone.


It wasn't a total loss for Samsung this time around. In a separate order, Judge Koh said that the company would be able to seal operating profit on two unidentified Samsung phones.


CNET has contacted Samsung for comment on the judge's order. We will update this story when we have more information.


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House GOP blasted for scrapping Sandy aid vote

WASHINGTON New York area-lawmakers in both parties erupted in anger late Tuesday night after learning the House Republican leadership decided to allow the current term of Congress to end without holding a vote on aid for victims of Superstorm Sandy.

Rep. Peter King, R-N.Y., said he was told by the office of Majority Leader Eric Cantor of Virginia that Speaker John Boehner of Ohio had decided to abandon a vote this session.

Cantor, who sets the House schedule, did not immediately comment. House Democratic Whip Steny Hoyer of Maryland told reporters that just before Tuesday evening's vote on "fiscal cliff" legislation, Cantor told him that he was "99.9 percent confident that this bill would be on the floor, and that's what he wanted."

A spokesman for Boehner, Michael Steel said, "The speaker is committed to getting this bill passed this month."

A House Republican aide confirmed to CBS News producer Jill Jackson that the House would not take up the bill during this session.

In remarks on the House floor, King called the decision "absolutely inexcusable, absolutely indefensible. We cannot just walk away from our responsibilities."

The Senate approved a $60.4 billion measure Friday to help with recovery from the October storm that devastated parts of New York, New Jersey and nearby states. The House Appropriations Committee has drafted a smaller, $27 billion measure, and a vote had been expected before Congress' term ends Thursday at noon.




29 Photos


Cleaning up after Sandy






29 Photos


Superstorm Sandy: State-by-state snapshots



More than $2 billion in federal funds has been spent so far on relief efforts for 11 states and the District of Columbia struck by the storm, one of the worst ever to hit the Northeast. The Federal Emergency Management Agency's disaster relief fund still has about $4.3 billion, enough to pay for recovery efforts into early spring, according to officials. The unspent FEMA money can only be used for emergency services, said Rep. Frank Pallone Jr., D-N.J.

New York, New Jersey, Connecticut, District of Columbia, West Virginia, Virginia, Maryland, New Hampshire, Delaware, Rhode Island, Pennsylvania and Massachusetts are receiving federal aid.

Sandy was blamed for at least 120 deaths and battered coastline areas from North Carolina to Maine. New York, New Jersey and Connecticut were the hardest hit states and suffered high winds, flooding and storm surges. The storm damaged or destroyed more than 72,000 homes and businesses in New Jersey. In New York, 305,000 housing units were damaged or destroyed and more than 265,000 businesses were affected.

"This is an absolute disgrace and the speaker should hang his head in shame," said Rep. Eliot Engel, D-N.Y.

"I'm here tonight saying to myself for the first time that I'm not proud of the decision my team has made," said Rep. Michael Grimm, R-N.Y. "It is the wrong decision, and I' m going to be respectful and ask that the speaker reconsider his decision. Because it's not about politics, it's about human lives."

"I truly feel betrayed this evening," said Rep. Nita Lowey, D-N.Y.

"We need to be there for all those in need now after Hurricane Sandy," said Rep. Gregory Meeks, D-N.Y.

The House Democratic leader, Rep. Nancy Pelosi of California, said she didn't know whether a decision has been made and added, "We cannot leave here doing nothing. That would be a disgrace."

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Obama Hails 'Cliff' Deal, Warns of Next Fiscal Fight













Minutes after the House of Representatives approved a bipartisan Senate deal to avert the "fiscal cliff" and preserve Bush-era tax cuts for all Americans making less than $400,000 per year, President Obama praised party leaders and wasted little time turning to the next fiscal fight.


"This is one step in the broader effort to strengthen our economy for everybody," Obama said.


Obama lamented that earlier attempts at a much larger fiscal deal that would have cut spending and dealt with entitlement reforms failed. He said he hoped future debates would be done with "a little less drama, a little less brinksmanship, and not scare folks quite as much."


But Obama drew a line in the sand on the debt ceiling, which is set to be reached by March.


"While I will negotiate over many things, I will not have another debate with this Congress over whether they should pay the bills for what they've racked up," Obama said. "We can't not pay bills that we've already incurred."


An hour after his remarks, Obama boarded Air Force One to rejoin his family in Hawaii, where they have been since before Christmas.






AP Photo/Charles Dharapak













House Republicans agreed to the up-or-down vote Tuesday evening, despite earlier talk of trying to amend the Senate bill with more spending cuts before taking a vote. The bill delays for two months tough decisions about automatic spending cuts that were set to kick in Wednesday.


A majority of the Republicans in the GOP-majority House voted against the fiscal cliff deal. About twice as many Democrats voted in favor of the deal compared to Republicans. One hundred fifty-one Republicans joined 16 Democrats to vote against the deal, while 172 Democrats carried the vote along with 85 Republicans.


The Senate passed the same bill by an 89-8 vote in the wee hours of New Year's Day. If House Republicans had tweaked the legislation, there would have been no clear path for its return to the Senate before a new Congress is sworn in Thursday.


The vote split Republican leaders in the House. House Speaker John Boehner, R-Ohio, voted yes, and so did the GOP's 2012 vice presidential candidate, Rep. Paul Ryan, R-Wis.


But House Majority Leader Eric Cantor, R-Va., the No. 2 Republican in the House, voted no. It was his opposition that had made passage of the bill seem unlikely earlier in the day.


The deal does little to address the nation's long-term debt woes and does not entirely solve the problem of the "fiscal cliff."


Indeed, the last-minute compromise -- far short from a so-called grand bargain on deficit reduction -- sets up a new showdown on the same spending cuts in two months amplified by a brewing fight on how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.


"Now the focus turns to spending," said Boehner in a statement after the vote. "The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the 'balanced' approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."


Republicans hope that allowing the fiscal cliff compromise, which raised taxes without an equal amount of spending cuts, will settle the issue of tax rates for the coming debates on spending.






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Air raid on petrol station in Damascus suburb kills 30: activists


AMMAN (Reuters) - At least 30 civilians were killed on Wednesday when Syrian warplanes bombed a petrol station in a rebellious suburb on the eastern edge of Damascus, two opposition campaigners on the scene said.


"I counted at least 30 bodies. They were either burnt or dismembered," said Abu Saeed, an activist who arrived at the area in the Muleiha suburb of Damascus an hour after the raid occurred at 1:00 PM (1100 GMT).


Another activist, Abu Fouad, said warplanes had bombarded the area as a consignment of fuel arrived and crowds packed the station.


Video footage taken by activists, which could not be independently verified, showed a body of a man a helmet on a motorcycle amid flames that had engulfed the site, apparently hit while in a line of vehicles waiting for petrol. A man was also shown carrying a dismembered body.


Muleiha is one of a series of Sunni Muslim suburbs ringing the capital that have been at the forefront of the 21 month revolt against the rule of President Bashar al-Assad, who belongs to the Shi'ite-derived Alawite minority sect.


Government forces control the center of Damascus and have been pounding the suburbs from the air.


(Reporting by Khaled Yacoub Oweis, Amman newsroom; Editing by Peter Graff)



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Football: Brazil starlet Lucas relishing PSG challenge






DOHA: Brazilian international midfielder Lucas Moura said Tuesday he is ready to embrace the "challenge" at an evolving Paris Saint-Germain.

Lucas, 20, signed from Sao Paulo in the summer on a four-and-a-half-year deal worth 40 million euros as PSG held off competition from the likes of Manchester United and Real Madrid to snare a player hailed as one of the bright hopes of the Brazilian team.

"It's a real challenge for me," said Lucas, who has scored three goals in 22 appearances for Brazil.

"PSG is in full evolution. (Sporting director) Leonardo helped me a lot to take the decision to sign when I could have continued with my former team in Brazil until season's end.

"It's a very important step in my career. There are stronger competitions in Europe. PSG has a long history with Brazilian players and I hope I'll be able to write a new page in this history."

PSG president Nasser al-Khelaifi added: "We're very happy to start the year with one of the world's best players."

Lucas, who has joined his new teammates at a training camp in Qatar, could make his debut in a friendly against Qatari champions Lekhwiya on Wednesday, four days before PSG's French Cup round-of-64 match against Arras in Calais.

Khelaifi said the club was not planning to recruit any more players in the January transfer window, adding however that "anything could happen".

"We've got a great team with some great players, I don't think we need to recruit," he said.

"We've got a month ahead of us. For the moment, we're not planning on recruiting anyone but I don't know, there could be injuries, anything can happen."

Khelaifi added: "PSG today wants to build a big European club and place itself among the best in Europe and the world.

"We have to spend money for that and act like the other big clubs. If we hadn't have spent this much, we wouldn't be at this level."

- AFP/fa



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Why I still love the Nexus 7


There's something about the holidays and the cold January that often follows in the Northeast that makes me want to curl up on the couch with a good book -- or in this day and age, a book on my e-reader or
tablet.



The
Nexus 7 debuted more than six months ago at Google's annual developer conference, but I am still a big fan of the device. And I have no trouble recommending it to tablet buyers.

In this edition of Ask Maggie, I explain why the Nexus 7 is still a good device at a decent price. One Ask Maggie reader is tired of squinting to read books on his smartphone, but he's troubled by the $200 price tag. Meanwhile, the second reader is debating whether to get the smaller 7-inch Nexus 7 mini-tablet or a bigger
Android tablet from Samsung.


Nexus 7 or e-reader?

Dear Maggie,
I am debating whether I should get the Nexus 7 or not. The primary reason is the fact that I read books from the Google Play Store on my Razr Maxx right now and would love to have a larger screen that is portable. But at this point I have managed to read on the smaller screen, and I'm not sure spending $200 for a bigger screen makes sense. I've looked at e-readers, but if I am going to spend any money on a new device, I'd like to have the ability to do other things in addition to reading books. It would be great to be able to read email, play games, watch movies, etc.

I don't like using my computer for Web browsing and reading, but my smartphone seems too small. Do you think I should spend the $200 to get another device like the Nexus 7?

Based on your experiences, what would you recommend?


Thanks,
MagicWithMeaning

Dear MagicWithMeaning,
I hear you. I also think that a smartphone is too small for reading, although I know some people who don't mind it. My colleague Stephen Shankland read the entire Steve Jobs biography on his smartphone in a single night and wrote an amazing review of the book when it came out. I am afraid if I had attempted the same thing, I would have gone blind. And I probably would have only gotten through a quarter of the book in a night.


Kindle, Nook, iPad, Nexus 7

There's an array of options when it comes to choosing a device for reading e-books.



(Credit:
Sarah Tew/CNET)

At any rate, as I said, some people really don't mind the smaller size of a smartphone. And since you can magnify the text, it's certainly doable. But it sounds like you don't find this situation ideal. And I'm with you.

I think the Nexus 7 is a terrific step up, and I highly recommend it to readers. It's very light, and the size is perfect. It's about the size of a typical paperback book and can easily be held with one hand. It fits nicely into a pocket or purse, so it's portable if you read while commuting or traveling.

And since it comes with the full Android OS, you can access just about anything from the Google Play store. I mention this because other tablets of a similar size, such as the Kindle Fire, offer only a limited catalog of books, games, and movies. Whatever is available via Amazon is what's available on the Kindle Fire. This is great if you are already using that ecosystem to purchase your books and other media. But it sounds like you are already getting books and other stuff via the Google Play store, so it makes sense for you to continue using that ecosystem.

I know the $200 price tag isn't cheap. But it's a good deal considering how much other gadgets cost. Even full-priced smartphones are $400 to $500 more than the Wi-Fi only Nexus 7 tablet.

If you're looking to do more with your device, then the mini-tablet is a good pick over something like a dedicated e-reader. But the one thing I like about e-readers is the e-ink display. I think that display is a bit easier on my eyes, and I can sit and read a book for much longer than if I am using a device like the Nexus 7, which has a backlit screen.

But that is just my personal preference. I know plenty of people who don't have a problem with backlit screens. And in fact, it makes it easier to read in the dark, something that can't be done with an e-ink device.

I agree that if you're looking for the most bang for your buck, you might as well get a tablet that will give you a full browser and access to entire an app store instead of a limited-use e-reader.


Samsung Galaxy Note 2

Samsung Galaxy Note 2



(Credit:
Josh Miller/CNET)

But there is one option that you didn't mention in your question. What about getting a "phablet?" If you are able to upgrade to a new smartphone soon you may want to consider something like the Galaxy Note 2. With a 5.5-inch display, it's between the size of most Android smartphones and the 7-inch Nexus 7 tablet. It costs about $300 from carriers such as AT&T with a two-year contract. This is more than other smartphones such as the Galaxy S3. And it's more than the Nexus 7. But if you did need a new smartphone and you didn't want to buy a separate device, it might be a good compromise.

If a new smartphone isn't in the cards for you right now and you really are teetering on the edge of whether to buy the Nexus 7 or not, I'd say go for it. I know that $200 is nothing to sneeze at for many people. But when compared to larger tablets and full-priced smartphones, it's a bargain.

If you are strapped for cash, you could always wait a little longer to see if Google announces a cheaper version of the device. There are some reports from Asia that Google may be readying a $99 mini-tablet.

I hope this advice was helpful. And good luck!

Nexus 7 vs. Galaxy Tab 2 10.1

Dear Maggie,
I'm getting my first Android tablet, but I'm on a strict budget. I have wanted the Nexus 7 for a while, but found a great deal ($270) for a refurbished Samsung Galaxy Tab 2 10.1. Which is better?


Thanks,
TEP

Dear TEP,
The answer to your question really depends on which screen size you like better. The Galaxy Tab 2 has a bigger 10-inch screen, while the Nexus 7 has the smaller 7-inch screen. Personally, I prefer the smaller screen to the bigger one. The smaller tablets are easier to stick in a pocket, bag, or purse. And you can hold it with one hand. I use the Nexus 7 for reading, and I find that it's fairly light and easy to hold with one hand.


Samsung Galaxy Tab 2 10.1



(Credit:
Samsung)

That said, the Galaxy Tab 2 10.1 is a fine device. And it has gotten decent marks from CNET and other tech reviewers. If you like that size device and you want an Android tablet, then that is a good device to consider. And the price certainly sounds right.

But if the size is really a toss-up, and you could go either way, then I would still choose the Nexus 7. CNET rated it as one of the best Android tablets on the market. And at $200 brand new, it's still $70 less than the refurbished Galaxy Tab 2 that you have found.

I hope this advice was helpful. Good luck. And Happy New Year!

Ask Maggie is an advice column that answers readers' wireless and broadband questions. The column now appears twice a week on CNET, offering readers a double dosage of Ask Maggie's advice. If you have a question, I'd love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header. You can also follow me on Facebook on my Ask Maggie page.

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Senate Approves 'Fiscal Cliff' Deal, Sends to House













Two hours after a midnight deadline for action, the Senate passed legislation early New Year's Day to avert the so-called fiscal cliff with an overwhelming vote of 89-8.


Senate passage set the stage for a final showdown in the House, where a vote could come as early as today.


"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," President Obama said in a statement shortly after the vote.


"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans."


The bill extends Bush-era tax cuts permanently for individuals making less than $400,000 per year and couples making less than $450,000 but allows the top marginal tax rate on incomes above those levels to rise to 39.6 percent.


Capital gains taxes would rise to 20 percent from 15 percent.


The measure would raise the estate tax from 35 to 40 percent for estates larger than $5 million, prevent the alternative minimum tax from hammering millions of middle-class workers and extend unemployment benefits for one year.








'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video









Lawmakers also decided at the last minute to use the measure to prevent a $900 pay raise for each member of Congress due to take effect this spring.


The steep "sequester" budget cuts scheduled to go into effect with the New Year -- a $1.2 trillion hit to defense and domestic programs -- would be postponed for two months.


"I've said all along our most important priority is protecting middle-class Americans, this legislation does that," Senate Majority Leader Harry Reid, D-Nev., said early this morning prior to the vote.


The deal at hand does little to address the nation's long-term debt woes, however, and does not entirely solve the problem of the "fiscal cliff."


Indeed, the last-minute compromise -- far short from a so-called grand bargain on deficit reduction -- could set up a new showdown on the same spending cuts in two months amplified by a brewing fight on how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.


Reid said he is "disappointed" they were unable to achieve a broader deal but that the compromise was necessary.


"We tried," he said. "If we did nothing, the threat of a recession is very real."


Speaking after Reid, Senate Minority Leader Mitch McConnell, R-Ky., called the deal an "imperfect solution" and noted this should not be the model on how things get done in the Senate.


McConnell also thanked Vice President Joe Biden, who visited Capitol Hill late Monday night and brokered the deal with Senate Republicans.


The measure must now move to the Republican-led House.


Five Senate Republicans and three Democrats voted against the plan, but the large margin of passage was seen as boosting the bill's prospects in the House, even though fiscal conservatives were poised to vehemently oppose the deal when it comes to the floor for a vote.


House Speaker John Boehner of Ohio said the House would not vote on any Senate-passed measure "until House members, and the American people, have been able to review" it.






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Syria starts 2013 with aerial strikes and clashes


BEIRUT (Reuters) - Syrians woke on New Year's Day to countrywide aerial bombardment, while President Bashar al-Assad's forces and rebels fighting to topple him clashed on the outskirts of the capital.


Residents of Damascus entered the new year to the sound of artillery hitting southern and eastern districts that form a rebel-held crescent on the outskirts of the capital, the center of which is still firmly under government control.


In the center, soldiers manning checkpoints fired celebratory gunfire at midnight, causing alarm in a city where streets were largely deserted.


"How can they celebrate? There is no 'Happy New Year'," Moaz al-Shami, an opposition activists who lives in the capital's central Mezzeh district, said over Skype, his voice trembling with anger.


He said rebel fighters attacked one checkpoint in the district of Berzeh early on Tuesday. Opposition groups said mortar bombs hit the southwest suburb of Daraya, where the army launched a military offensive on Monday to retake the battered district.


Assad's air force pounded Damascus's eastern suburbs, as well as rebel-held areas in the second city Aleppo, and several rural towns and villages, opposition activists said.


An estimated 45,000 people have been killed in the revolt, which started in early 2011 with peaceful protests demanding democratic reforms but turned into an armed uprising after months of attacks on protesters by security forces.


A resident of the central city of Homs, who asked to remain anonymous, said shells had landed on the Old City early on Tuesday.


Homs lies on the strategic north-south highway and parts of the ancient city have been leveled during months of clashes. Government forces ousted rebels from the city early last year but militants have slowly crept back in.


"The Old City is under siege. There is shelling from all sides," he said.


The opposition-linked Syrian Observatory for Human Rights, a British-based monitoring group, reported 160 people killed on the final day of 2012, including at least 37 government troops. The group's reports cannot be verified.


BOMBARDMENT


The civil war in Syria has become the longest and deadliest of the conflicts that rose out of the uprisings that swept through the Arab world over the past two years.


Many Sunni Muslims, the majority in Syria, back the rebellion, while Assad, who hails from the Shi'ite-derived Alawite minority sect, is backed by some minorities who fear revenge if he falls. His family has ruled Syria harshly since his father seized power in a coup 42 years ago.


Assad's forces have lately relied more on aerial and artillery bombardment, rather than infantry. Residential areas where rebels base themselves have been targeted, killing civilians unable to flee. Schools and queues of people buying bread have been hit.


Rebels have taken swathes of the north and the east but have struggled to hold cities, complaining that they are defenseless against Assad's Soviet-built air force.


A year ago, many diplomats and analysts predicted Assad would leave power in 2012. But he has proved resilient and none of his inner circle have defected. He still largely retains control of his armed forces.


Diplomatic efforts to end the war have faltered, with the rebels refusing to negotiate unless Assad leaves power and him pledging to fight until death.


Most Western and Arab states have called for him to leave power. He is supported by Russia and Shi'ite Iran.


In the final days of 2012, international mediator Lakhdar Brahimi called on countries to push the sides to talk, saying Syria faced a choice of "hell or the political process".


One Damascus resident, who asked not to be identified for security reasons, said the usual new year's eve crowds were absent from the increasingly isolated capital.


"There was hardly anyone on the streets, no cars, no pedestrians. Most restaurants, cafes and bars were empty," she said. Some young people gathered at three bars in the old city.


"There was music but nobody was dancing. They just sat there with a drink in their hands and smoking. I don't think I saw one person smile," she said. The midnight gunfire caused alarm.


"It was very scary. No one knew what was going on. People got very nervous and started making phone calls. But then I discovered that at least on my street, the gunfire was celebratory."


(Editing by Peter Graff and Alison Williams)



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