New Afghan violence makes Obama decision tougher

WASHINGTON — President Barack Obama's next move on Afghanistan is growing more difficult by the day. Deadly attacks this week deepened British and U.N. alarm over their commitments, and fresh worries about Iraq could delay the exit of U.S. troops there, squeezing an already overstretched military.

The White House says Obama's answer on whether to expand the U.S. fighting force in Afghanistan by as much as 60 percent will be announced "in the coming weeks," the same vague timetable it has offered for much of the fall.

Obama has brushed off criticism that he is taking too long to decide whether to meet his war commander's request to provide about 40,000 more troops at the end of this year, atop a record 68,000.

But the longer the decision hangs fire, the more complications mount. The latest violence against foreign civilians and soldiers was unprecedented in scope. And that was on top of Afghanistan's perilous politics, an ongoing headache for the White House.

Obama is "taking into account the political situation, the security situation, the health of our force and all that needs to be done" to make good on the promise of dismantling the al-Qaida terror network, White House press secretary Robert Gibbs said Thursday.

The deliberations are taking place under an assumption that the Army and Marine Corps will have greater flexibility as U.S. forces are drawn down in Iraq. The withdrawal plan is hinged to Iraqi elections that are scheduled for January but now are in question.

In an e-mail this week to top Pentagon officials, the U.S. commander in Iraq, Army Gen. Ray Odierno, warned that the elections could be delayed — potentially delaying the exit of U.S. troops with each passing day.

Odierno in September told Congress that he would keep the number of troops in Iraq — currently about 117,000 — steady until about two months after the election to safeguard against any surge in attacks or violence following the vote.

Barring a significant increase in violence, U.S. commanders have said about two-thirds of the troops will begin heading home almost immediately after that two-month period, bringing the number of American forces in Iraq to between 35,000 and 50,000 by the end of August 2010.

Iraqi lawmakers ended their session Thursday without agreeing to terms for the vote. They plan to try again on Saturday.

Senior Obama officials have reached out to the Iraqi government over the past two days and urged them to resolve the impasse quickly.

If Obama increases the size of the U.S. force in Afghanistan, the first of the fresh soldiers would probably begin to arrive in January or February. That could be done whether the planned withdrawal from Iraq goes forward on schedule or not, but things would get trickier in the months that follow.

The Army, the service most affected by the strain of fighting two wars at once, is only now getting some breathing room, with soldiers given longer periods at home between deployments and an end to the unpopular "stop-loss" practice of keeping troops beyond their expected date of departure.

The Pentagon approved a temporary increase in the size of the Army earlier this year, but keeping very large numbers of troops in Iraq while shipping tens of thousands more to Afghanistan in the spring could strap the service anew.

In an interview this week, the Army's No. 2 military official said the troop drawdown in Iraq still could happen on time, even if the elections are delayed.

"The fact that the elections could slip one way or the other doesn't surprise any of us who have had any experience with Iraq," said Army Vice Chief of Staff Peter W. Chiarelli. "The fact that something doesn't get done, or pass on the day it's supposed to get passed, doesn't mean that somebody won't find a way around it or find a way to fix something later on. If the elections are delayed, then we'll deal with that."

Chiarelli did not rule out sending troops home after Iraq's elections faster than is now expected if violence is low. He said any number of still-undecided factors — if Obama approves sending fewer forces to Afghanistan than requested by the commander, for example, or if they can be deployed later — could let the Iraq drawdown stay on pace without a personnel crunch.

On Capitol Hill, some lawmakers are questioning whether American forces should stick to an Iraqi withdrawal schedule before knowing what the level of security — or violence — will be after the elections.

Rep. Howard P. "Buck" McKeon, top Republican on the House Armed Services Committee, said Obama's August 2010 deadline gives Odierno "little room to maneuver" should massive and continued attacks across Iraq start anew. In a letter this week, McKeon asked the president to cancel the deadline if necessary.

The United States contributes the vast majority of soldiers fighting a difficult war, but relies on NATO allies and others, including the United Nations, for other troops, supplies and a network of contributions such as election administration.

In Kabul, the head of the U.N. mission warned that Afghanistan cannot count on international support indefinitely unless the government tackles corruption and bad governance. The U.N. abruptly announced Thursday it will temporarily relocate more than half of its international staff while it looks for safer accommodation for them. An attack last week on a U.N. guesthouse killed five staffers.

The deaths of five British soldiers gunned down by an Afghan policeman as they made tea after a patrol has shaken public support for the war in the nation that has been the largest contributor of forces after the United States.

Demands are intensifying for a pullout three weeks after Prime Minister Gordon Brown made an unpopular decision to add 500 British forces. Brown's move was seen as a gesture to Obama as the president weighs a much larger U.S. increase.

If British troops can't trust the Afghan colleagues they are supposed to be training, analysts and newspapers asked Thursday in Britain, how can they fight the Taliban? And where does it leave an exit strategy that depends on handing over control to Afghan forces?

Asked the Daily Mail: "What kind of war is this?"

That's stronger opposition than Obama faces at home, but a worrisome sign as the United States looks ahead to assuming a larger share of the burden in Afghanistan whether Obama adds significant forces or not. Several allies plan to leave in 2010 and 2011.

US, NKorea agree to hold bilateral meetings: report

SEOUL — The United States and North Korea have agreed to hold two rounds of bilateral meetings before the North returns to multilateral nuclear disarmament talks, a US news report said.

The agreement was reached at last month's meetings in New York and San Diego between officials from the two sides, Foreign Policy magazine said on its website, in a report seen Wednesday.

The communist state, putting further pressure on the United States to start direct talks, announced Tuesday it has completed reprocessing spent fuel rods to produce more plutonium for its atomic weapons programme.

The US State Department responded that the plutonium production "runs counter" to the North's disarmament commitments and violates UN Security Council resolutions.

It said it has not decided when and where to hold bilateral talks involving the US special envoy to North Korea, Stephen Bosworth.

Foreign Policy, quoting an administration official, said "substantial progress" was made in talks between Sung Kim, the State Department's special envoy to six-party talks, and visiting North Korean official Ri Gun.

The North has said it is ready to return to the six-party nuclear disarmament talks which it abandoned in April, but only if it first has bilateral discussions with Washington to improve relations.

South Korea's chief nuclear negotiator Wi Sung-Lac told Yonhap news agency separately the United States is expected to decide soon whether and when to hold the bilateral dialogue.

Foreign Policy said Ri agreed that Bosworth would meet Kang Sok-Ju, first vice foreign minister, rather than chief nuclear negotiator Kim Kye-Gwan.

"Bosworth's visit would be seen as a failure unless some demonstrable progress was made and it is widely believed that only the top officials in Kim Jong-Il's regime have real negotiating authority," the magazine said.

Ri, however, "demurred" on Sung Kim's demand that the North abide by a September 2005 six-party nuclear deal, the magazine said.

This calls for North Korea's denuclearisation in return for economic aid, diplomatic recognition and the establishment of a permanent peace regime to replace the fragile armistice that ended the 1950-53 war.

The North wanted to resume talks "based on the idea of denuclearisation of the Korean peninsula, a nuanced but important distinction," the magazine said.

Pyongyang calls for the withdrawal of any US nuclear threat and a change in its "hostile" policy as a precondition for giving up its nuclear weapons.

The North quit the six-party talks in April after the United Nations censured its long-range rocket launch. It had vowed at the time to restart the nuclear programme which it shut down under six-party pacts.

It conducted an atomic weapons test in May, the second since 2006.

Texas churches help pave way for new Vatican plan

ARLINGTON, Texas — At Saint Mary the Virgin Catholic Church, the 75-year-old priest is married, members sing from an Episcopalian hymnal and parishioners kneel at the altar to receive Communion.

Years ago, the Texas parish and a handful of other conservative Episcopal churches in the U.S. decided to become Roman Catholic. Though they were confirmed by the Vatican, they were still allowed to practice some of their Anglican traditions, including having married priests.

Now, these churches may have helped pave the way for Anglicans worldwide, or Episcopalians as they are known in the U.S., to become Catholic under a new Vatican plan created to make it easier for such conversions. The surprise move revealed in October is designed to entice traditionalists opposed to women priests, openly gay clergy and blessing of same-sex unions.

The Rev. Allan Hawkins, who leads Saint Mary the Virgin church outside of Dallas, said the Vatican's decision could start unifying the Catholic and Anglican churches after a centuries-old rift.

"I didn't think I would live to see this day," Hawkins said during a recent Sunday Mass.

Saint Mary the Virgin is one of three churches in Texas to become Catholic after the Vatican's 1980 approval of the "Anglican use" provision, which allowed U.S. churches to convert on a case-by-case basis but also retain their traditions and identity.

The small church 20 miles west of Dallas made the switch in 1994 after members decided to leave the Episcopal church because they felt it was going against Biblical teachings when it ordained women as bishops and accepted gay priests.

Saint Mary the Virgin stuck to many of its Anglican roots, such as offering a more traditional way of receiving Communion that includes kneeling instead of standing. But in other ways, it operates the same as Catholic parishes.

"We didn't join to be completely different," said Giles Hawkins, 42, the priest's son and parish member.

The new effort by Pope Benedict XVI to make it easier for Anglicans worldwide to convert to Catholicism is considered part of his overall aim of unifying the church and putting a highly conservative stamp on it.

The decision was reached in secret by a small group of Vatican officials, and the spiritual leader of the global Anglican church was not consulted about the change and was informed only hours before the announcement.

The Vatican and Anglican leaders have been in talks for decades over how to possibly reunite since Anglicans split with Rome in 1534 when English King Henry VIII was refused a marriage annulment. But the Vatican move could be considered as a signal that the ecumenical talks' ultimate goal is converting Anglicans to Catholicism.

"Christ's will for his church is that it's one," Hawkins said. "As Anglicans, our background is with the church (in Rome), and we didn't create that division. I would also like to see Baptists, Methodists and Presbyterians unite as well."

However, no one expects a large number of Anglo-Catholic parishes to be created in the U.S. The decision was prompted mainly by Anglo-Catholics in England and the Traditional Anglican Communion, a 77-million strong organization led by an Australian archbishop.

Although details have not been finalized, the U.S. bishops are expected to create the equivalent of a nationwide diocese with one leader to oversee Anglo-Catholic parishes. Currently, each parish answers to a local Catholic bishop.

When San Antonio's Our Lady of the Atonement Catholic Church converted to Catholicism in 1983, it was the first parish to do so under Rome's new provision. At the time, it was a group of 18 people who had left several Episcopal churches and wanted to become a Catholic church, said the Rev. Christopher Phillips, the parish priest. It has since grown to 500 families.

"But being a married priest has never been an issue. When I'm with other priests, they always ask about my family. I've been accepted as a Catholic priest because that's what I am," Phillips said.

AP Religion Writer Rachel Zoll in New York contributed to this report.

Japan unemployment falls amid recovery signs

TOKYO — Japan's economy on Friday showed fresh signs that it is recovering after a sharp downturn, with jobless figures hitting a four-month low, an easing in deflation and household spending edging up.

Japan's unemployment rate fell to a four-month low of 5.3 percent in September, beating the market expectation that it would rise to 5.6 percent, according to data from the internal affairs ministry.

The latest figure was down from 5.5 percent in August and the lowest since 5.2 percent in May.

A separate survey released by the labour ministry Friday showed there were 43 job offers for every 100 jobseekers in September, slightly up from a record low of 42 in the previous two months.

It is the first time since May 2007 that the job-offer ratio has improved from the previous month.

Many Japanese companies, particularly exporters, moved swiftly to cut jobs and production in response to a slump in demand caused by the global economic downturn.

But Japan's economy grew in April-June for the first time in five quarters on rebounding exports and government stimulus measures.

Another survey from the internal affairs ministry showed deflation in Japan eased slightly in September following four straight months of record declines in consumer prices.

Core prices, which exclude those of volatile fresh food, dropped 2.3 percent in the month from a year earlier, after an unprecedented 2.4 percent slump in August.

Compared with the previous month, prices rose 0.1 percent -- the first increase in six months.

Some economists warned against being too upbeat on the economic outlook.

"There are concerns that price drops in services and other wide-ranging sectors may pressure wages, leading consumers to seek even lower prices," Credit Suisse economists wrote in a report.

"A further credit easing is needed" as deflation remains, they said.

In September Japanese household spending edged up by 1.0 percent from a year earlier, an increase for a second consecutive month.

Japan was stuck in a deflationary spiral for years after its asset price bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of further price drops.

The current global economic downturn and a slump in commodity costs pushed the world's number two economy back into the deflationary doldrums. Core consumer prices have now fallen year-on-year for the past seven months.

Feds interview crew of plane that overshot airport

MINNEAPOLIS — Federal investigators interviewed the crew of the Northwest Airlines flight that overshot the Minneapolis airport by 150 miles on Sunday.

National Transportation Safety Board spokesman Keith Holloway said investigators were interviewing the pilot and co-pilot in person in Minneapolis. He would not provide additional details, but did say the NTSB would not comment on the substance of the discussions until Monday at the earliest.

Northwest Airlines is cooperating and doing its own internal investigation, said Chris Kelly, a spokesman for Northwest Airlines' parent company, Delta Air Lines Inc.

Air traffic controllers tried for more than an hour Wednesday night to contact the Minneapolis-bound flight, which later turned around and landed safely. First officer Richard Cole has said he and the captain were not sleeping or arguing in the cockpit, but hasn't explained their lapse in response and the detour. The Wall Street Journal reported on its Web site Sunday that the pilots planned to repeat their story to safety investigators during Sunday's interview.

Mounting deficits raise urgency for governments to switch from spenders to savers

OTTAWA — The bills are coming in across the country, and they are hefty.

In the last two days, Ontario reported it will suffer a $24.7-billion deficit in the current fiscal year, almost double its March projection, and the federal government said it is already $23.7 billion in the red, only five months into its year.

With Quebec issuing an update next week - expected to be worse than previously thought - the TD Bank is also revisiting a report it issued earlier this week that the total public sector shortfall will be at least $90 billion this year.

It more than likely will be in the $100-$110 billion range.

TD Bank economist Derek Burleton says governments are creating such a debt elephant that they will need to cut spending drastically or even raise taxes to prevent Canada from falling into the deficit nightmare of the 1970s, '80s and '90s.

"There's a case to be made that the era of restraint Canadians are looking at over the next three to five years is going to keep our growth lower than otherwise would be the case," Burleton said.

Bank of Montreal economist Douglas Porter agrees that governments will soon have to shift their attention from how to spend to stimulate the economy to how to kill the monster they created.

On Friday, Finance Minister Jim Flaherty told a business audience near Toronto that the government needed to pump spending in the face of a deep recession.

And he repeated the familiar mantra that Canada is "by far" in the best fiscal position among Group of Seven countries to pay off its mounting debts.

But economists say that distinction is carrying less weight with each new government recalculation of upcoming shortfalls.

"I think we are going to reach an uncomfortable juncture, perhaps as early as next year, when the recovery is still relatively young, and yet deficits will be so large they will cry out for the need for some restraint," Porter said.

The majority of Ottawa's shortfall so far this year is not from ramped up stimulus spending, but the result of the recession's wreckage. Ottawa is paying out much more for such things as benefits to the unemployed and taking in far less in taxes.

That suggests that even when stimulus spending runs its course at the end of next year's fiscal period, the gap between revenues and expenses will be so wide it will take many, many years to close.

Another problem is that governments will be trying to rake in more revenue at a time when more and more of Canada's baby boom population crosses the line from tax-paying producers, to recipients of expensive health-care and pension programs.

CIBC's Avery Shenfeld says Canada is starting to lose the fiscal edge it had gained on the United States during 12 years of surplus budgets ushered in by former Liberal finance minister Paul Martin, starting in the mid-1990s.

Canada still leads, but the gap is closing, he said in a note to clients.

"The aggregate federal and provincial budget deficit burden for residents of some provinces is not that far out of line with what the Americans face," Shenfeld wrote.

"Both countries will see the economic squeeze of fiscal tightening in the next few years, even if Canada can afford to take a bit longer in getting our house in order."

Ottawa and Ontario have set a timeline of about 2015 to return to fiscal order, but many economists see that target as too ambitious by several years.

Bank of Canada's governor Mark Carney's newest forecast on Thursday predicting the economy will expand by a modest three per cent next year and only 3.3 per cent in 2011 - two years after the end of the recession - doesn't help.

Carney also warned that prospective homebuyers should be careful about how much debt they are piling on, given that the housing market is much hotter than the overall economy.

Few economists believe growth will be to total answer to deficits. Some, such as Toronto-based consultant Dale Orr, have called on Ottawa to raise taxes. Orr says a one-point hike in the GST can raise about $13 billion in two years, which would make the government's balanced budget date of 2015-16 more tenable.

TD's Burleton doesn't make any recommendations, but agrees tax hikes may be necessary and that consumer levies and user fees would be preferable to personal or corporate tax increases.

However governments choose to tackle their deficits, he said, it is becoming urgent that they lay out plans.

"The experience in Canada has shown that manageable deficits very easily have turned into very worrisome deficits," he said.

"And the longer you stretch out a deficit-elimination horizon, the bigger the chance surprises are going to come up that throw a government off track."

One boat sunk, six others damaged by fire at Nanaimo marina (CP) – 2 hours ago

NANAIMO, B.C. — A spectacular explosion and fire that ripped through a Nanaimo, B.C., marina could have been much worse, the marina's owner said Wednesday.

One boat was sunk and six others damaged in the blaze that started after an explosion inside a boat shed, said John Nguyen, who operates the Palms Harbourside Marina in the Vancouver Island city.

"We're not sure exactly what happened but something blew up in one of the boat sheds and caught on fire, and four boat sheds is burnt," he said.

Gayle Rettmer was on her boat with her husband when the explosion took place.

"We were just getting ready to leave and (there was) a huge explosion at the end of the slip where our boat is tied, at the end of the boat sheds, and everything just shook," she said. "The boat sheds almost, like, lifted up and everything just shook. It was a deafening, deafening sound."

RCMP spokesman Const. Gary O'Brien said he's never seen damage of this magnitude from a boat fire.

"This was like a nuclear explosion went off," he said.

It's the third marina fire on the West Coast this month.

Three boats were damaged by a fire in Sidney, north of Victoria, about two weeks ago, and last week four vessels were damaged or destroyed by fire at a Coal Harbour marina in downtown Vancouver.

Nguyen said no one was injured in the latest fire and he's thanking the marina's standpipe system, required by current fire regulations, for saving most of the facility and its 100 boats.

"We're lucky that we have this state-of-the-art fire-fighting system on the dock, so the fire department responds really quick and they just connected to that system and put out the fire," he said. "We would have lost half the marina."

O'Brien said the cause of the explosion was still unknown and investigators are not making any connection to the other recent marina fires.

"It's so early in the investigation at this point. If there's any link they'll look at those," he said.

-with a file from CKWB