NATO warns Syria not to use chemical weapons

BRUSSELS/BEIRUT (Reuters) - NATO told Syrian President Bashar al-Assad on Tuesday that any use of chemical weapons in his fight against encroaching rebel forces would be met by an immediate international response.

The warning from NATO Secretary-General Anders Fogh Rasmussen came as U.S. government sources said Washington had information that Syria was making what could be seen as preparations to use its chemical arsenal.

Syrian forces meanwhile bombarded rebel districts near Damascus in a sustained counter-attack to stem rebel gains around Assad's power base as the insurgency may be entering a decisive phase.

International concern over Syria's intentions has been heightened by reports that its chemical weapons have been moved and could be prepared for use.

"The possible use of chemical weapons would be completely unacceptable for the whole international community and if anybody resorts to these terrible weapons I would expect an immediate reaction from the international community," Rasmussen told reporters at the start of a meeting of alliance foreign ministers in Brussels.

The chemical threat made it urgent for the alliance to send Patriot anti-missile missiles to Turkey, Rasmussen said.

The French Foreign Ministry referred to "possible movements on military bases storing chemical weapons in Syria" and said the international community would react if they were used.

Britain has told the Syrian government that any use of chemical weapons would have "serious consequences", Foreign Secretary William Hague said.

U.S. President Barack Obama on Monday told Assad not to use chemical weapons, without saying how the United States might respond. The Foreign Ministry in Damascus said it would never use such weapons against Syrians.

CLASSIFIED INTELLIGENCE

The U.S. has collected what has been described as highly classified intelligence information demonstrating that Syria is making what could be construed as preparations to use elements of its extensive chemical weapons arsenal, two U.S. government sources briefed on the issue said.

One of the sources said that there was no question that the US "Intelligence community" had received information pointing to "preparations" under way in Syria related to chemical weapons. The source declined to specify what kind of preparations had been reported, or how close the intelligence indicated the Syrians were to deploying or even using the weapons.

Western military experts say Syria has four suspected chemical weapons sites, and it can produce chemical weapons agents including mustard gas and sarin, and possibly also VX nerve agent. The CIA has estimated that Syria possesses several hundred liters of chemical weapons and produces hundreds of tonnes of agents annually.

The fighting around Damascus has led foreign airlines to suspend flights and prompted the United Nations and European Union to reduce their presence in the capital, adding to a sense that the fight is closing in.

The army fightback came a day after the Syrian foreign ministry spokesman was reported to have defected in a potentially embarrassing blow to the government.

The Syrian Observatory for Human Rights said 200 people were killed across Syria on Monday, more than 60 of them around Damascus. Assad's forces bombarded districts to the south-east of the capital on Tuesday, near to the international airport, and in the rebel bastion of Daraya to the south-west.

Opposition footage posted on the Internet showed a multiple rocket launcher fire 20 rockets, which activists said was filmed at the Mezze military airport in Damascus.

Reuters could not independently verify the footage due to the government's severe reporting restrictions.

In central Damascus, shielded for many months from the full force of a civil war in which 40,000 people have been killed, one resident reported hearing several loud explosions.

"I have heard four or five thunderous blows. It could be barrel bombs," she said, referring to makeshift bombs which activists say Assad's forces have dropped from helicopters on rebel-dominated areas.

MORTAR ATTACK

The state news agency said that 28 students and a teacher were killed near the capital when rebels fired a mortar bomb on a school. Rebels have targeted government-held residential districts of the capital.

The mainly Sunni Muslim rebel forces have made advances in recent weeks, seizing military bases, including some close to Damascus, from forces loyal to Assad, who is from Syria's Alawite minority linked to Shi'ite Islam.

Faced with creeping rebel gains across the north and east of the country, and the growing challenge around the capital, Assad has increasingly resorted to air strikes against the insurgents.

A diplomat in the Middle East said Syrian Foreign Ministry spokesman Jihad Makdissi had left the country and defected, while the British-based Observatory said it had information that he flew from Beirut on Monday afternoon heading for London.

In Beirut, a diplomat said Lebanese officials had confirmed that Makdissi spent several days in Beirut before leaving on Monday, but could not confirm his destination.

"We're aware of reports that he has defected and may be coming to the UK. We're seeking clarification," a Foreign Office spokeswoman in London said.

Makdissi was the public face to the outside world of Assad's government as it battled the 20-month-old uprising. But he had barely appeared in public for several weeks before Monday's report of his defection.

He had little influence in a system largely run by the security apparatus and the military. But Assad's opponents will see the loss of such a high profile figure, if confirmed, as further evidence of a system crumbling from within.

The United Nations and European Union both said they were reducing their presence in Syria in response to the escalated violence around the capital.

A spokesman for U.N. humanitarian operations said the move would not stop aid deliveries to areas which remained accessible to relief convoys.

"U.N.-funded aid supplies delivered through SARC (Syrian Arab Red Crescent) and other charities are still moving daily where the roads are open," Jens Laerke told Reuters in Geneva.

"We have not suspended our operation, we are reducing the non-essential international staff."

Three remaining international staff at the European Union delegation, who stayed on in Damascus after the departure of most Western envoys, crossed the border into Lebanon on Tuesday after pulling out of the Syrian capital.

(Additional reporting by David Brunnstrom in Brussels, Khaled Yacoub Oweis in Cairo, Erika Solomon, Oliver Holmes and Ayat Basma in Beirut, Mark Hosenball, Mohammed Abbas and David Cutler in London, and Stephanie Nebehay in Geneva; Editing by Giles Elgood)

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Football: Real Madrid hit four as Ajax crumble

MADRID: Real Madrid made light work of Ajax with an emphatic 4-1 win on Tuesday, but still had to settle for second place in Champions League Group D.

Goals from Cristiano Ronaldo, Kaka and a Jose Callejon double in the Santiago Bernabeu sealed the Spanish champions' victory, but top spot in the group went to Borussia Dortmund who beat Manchester City 1-0.

Derk Boerrigter got the consolation for the Dutch who gave a good account of themselves and their reward is a place in the Europa League after finishing third ahead of Manchester City, who came a miserable last.

Afterwards Madrid coach Jose Mourinho was full of praise for the performance of ex-Tottenham player Luka Modric, who gave two wonderful assists for his side's first goals of the evening.

"Modric has already performed well for us in a number of games, he is a great player who can play at the highest level, nobody can deny he is going to be an important signing for the future of this club," he said.

Mourinho had earlier took advantage of having already qualified to rest a number of first team players, mixing youth with experience, a tactic for which he has recently come under fire in the Spanish press for rarely doing.

Reserve goalkeeper Adan started and a Champions League debut was handed to full-back Nacho Fernandez.

Mourinho also introduced 17-year-old Jose Rodriguez and Alvaro Morata, a year his elder, late on while the experienced Ricardo Carvalho started his first Champions League game of the season.

Fabio Coentrao limping off early, with what looked like a hamstring injury, was the only negative on the night for Mourinho.

Ajax coach Frank de Boer, with a Europa League place still to fight for, named the same side that began Saturday's encouraging 3-1 win over PSV Eindhoven.

However, the weakened Madrid side did not appear to be worried as they dominated possession and it was not long before the chances began arriving thick and fast.

Karim Benzema had the ball in the net as early as the seventh minute but the French striker was ruled offside.

By the time Cristiano Ronaldo hit Madrid's first of the night on 13 minutes, a post had already come between Fabio Coentrao and the opening goal.

Modric won the ball in his own half before finding Benzema with a long raking pass that allowed the Frenchman to check back and square the ball into the path of Ronaldo for an easy finish.

Kenneth Vermeer in the Ajax goal had to make good saves from Benzema and Ronaldo before Callejon doubled Real's lead on 28 minutes.

Modric was again involved, turning under pressure on halfway before digging out a fantastic pass for Callejon to race onto and finish with aplomb.

A Sami Khedira shot on 39 minutes had to be dealt with by Vermeer, and it was his performance that kept Madrid's lead down to two at the break.

For Ajax, 18-year-old Dane Viktor Fischer was lively all evening on the left wing and he brought the first save of the night from Adan just before the interval.

Kaka hit Madrid's third, exquisitely curling a left-footed shot home off the post from just outside the area just after the break.

Ajax then enjoyed a good period of pressure and much needed relief.

Fischer went close with a curling shot before Derk Boerrigter pounced on a punched clearance from Adan to grab a consolation for the Dutch on the hour mark.

Boerrigter forced a save from Adan with a free-kick five minutes later and Ajax went on to play bright attacking football for much of the second half.

Mourinho shuffled his pack and introduced youth and Morata responded with a great run on the right and cross for Callejon to head home his second and his side's fourth with two minutes remaining.

- AFP/fa

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Cash scheme will influence polls, says CEC

CHENNAI/NEW DELHI: Chief election commissioner V C Sampath on Tuesday expressed his disapproval over the Centre's decision to go ahead with the direct cash transfer scheme when assembly elections were round-the-corner in Gujarat.

Himachal Pradesh, the other state that went to polls, is yet to know the result, and model code of conduct is still in force.

Sampath, who was in Chennai to review the ongoing summary revision of rolls, said that the EC would not allow the level playing field to be disturbed in any manner. He said the Centre should not have started the scheme at this juncture. "Our order is clear, that it is something which ought not to have been done now." The scheme will actually come into effect only on January 1, but the EC's view is that the announcement should not have been made now as it would influence elections in the two states. "We have expressed our concern," he added.

The CEC has also directed the Centre to suspend all steps towards operationalization of the scheme in the two election-bound states until the poll process was complete. Incidentally, this may make little difference on the ground as the direct cash transfer scheme is to roll out across 51 districts — of which four are in Gujarat and two in Himachal Pradesh — only from January 1, 2013. The poll process in the two states will wind up by December 24.

TOI was the first to report on December 2 about EC's unhappiness over the timing of the cash transfer scheme and said its implementation would be put on hold in the poll-bound states until after the elections.

The EC's order on Tuesday, which followed a BJP complaint, said the poll-eve announcement was "avoidable... going by the letter and spirit of the model code of conduct".

Stating that the commission was not going into the merits of the government's policy decisions but was concerned if any such decision would disturb the electoral level playing field, the EC said the government had failed to offer justification sought by it on the necessity of the direct cash transfer announcement while the poll code was in force in Gujarat and Himachal.

The three-member body is said to have questioned the urgency behind announcing the scheme in November when the roll out was slated only by the New Year, by when the poll process would be over.

Besides, the fact that two Union ministers, P Chidambaram and Jairam Ramesh, held forth on the benefits of the scheme from Congress platforms caught the EC's attention. The government sees cash transfers as a major poll hook, coining the slogan "aap ka paisa, aap ke haath" while seeing the benefits of the scheme in streamlining subsidies and getting rid of ghost beneficiaries. Mindful of its populist appeal, the BJP lost no time in alleging violation of the poll code by the Congress-led government at the Centre.

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Study: Drug coverage to vary under health law

WASHINGTON (AP) — A new study says basic prescription drug coverage could vary dramatically from state to state under President Barack Obama's health care overhaul.

That's because states get to set benefits for private health plans that will be offered starting in 2014 through new insurance exchanges.

The study out Tuesday from the market analysis firm Avalere Health found that some states will require coverage of virtually all FDA-approved drugs, while others will only require coverage of about half of medications.

Consumers will still have access to essential medications, but some may not have as much choice.

Connecticut, Virginia and Arizona will be among the states with the most generous coverage, while California, Minnesota and North Carolina will be among states with the most limited.

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Online:

Avalere Health: http://tinyurl.com/d3b3hfv

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Obama Sees 'Potential' for Averting the Fiscal Cliff

President Obama says he sees "potential" for averting the "fiscal cliff" in 28 days, but that no deal will get done unless Republicans consent to raise income-tax rates on the top 2 percent of U.S. earners.

"We're going to have to see the rates on the top 2 percent go up and we're not going to be able to get a deal without it," Obama told Bloomberg TV in his first televised interview since the Nov. 6 election.

Obama suggested that Republican opposition to any increase in tax rates has stifled progress in negotiations and at least partly explains why he has not met more regularly with House Speaker John Boehner.

"Speaker Boehner and I speak frequently," he said. "I don't think the issue right now has to do with sitting in a room.

"Unfortunately, the speaker's proposal right now is still out of balance," he added, referring to the GOP plan unveiled Monday that would extend all income tax rates at current levels while imposing changes to Medicare and Social Security.

The GOP proposal would achieve $2.2 trillion in deficit reduction in the next decade, including $800 billion in higher taxes through elimination of loopholes and deductions, slower annual cost-of-living increases for Social Security benefits and a higher eligibility age for Medicare.

Jessica Kourkounis/Getty Images

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The plan contrasts sharply with the White House proposal, which calls for $1.6 trillion in new tax revenue -- largely from higher rates on upper-income earners -- modest unspecified savings from Medicare and a new burst of economic stimulus spending.

Both sides have dismissed out of hand the opposing proposal, raising the prospect of continued gridlock as the economy hurdles toward the "cliff."

Income tax rates for the top 2 percent of Americans remain the immediate sticking point. Obama insists that rates must rise at the end of the year as part of any deal; Republicans oppose increasing rates on the wealthy.

Unless Obama and Republicans reach a compromise, a sweeping set of automatic, across-the-board tax hikes and deep spending cuts will take effect, potentially throwing the U.S. economy back into recession.

The "cliff" scenario results from a failure by Congress and the administration at previous intervals to take steps to reduce federal deficits and debt.

In the Bloomberg interview, Obama said he could be flexible on tax rates and entitlement overhaul, but only in broader discussions next year about revamping the tax code and social safety-net programs.

"Let's let [rates on higher-income earners] go up and then let's set up a process with a time certain at the end of 2013, or the fall of 2013, where we work on tax reform, we look at what loopholes and deductions both Democrats and Republicans are willing to close and it's possible that we may be able to lower rates by broadening the base at that point," he said.

The president also said he's "willing to look at anything" that might strengthen entitlements and extend their financial solvency, but did not specify further.

Republicans continued to rebuff the president's proposal Tuesday, claiming the $1.6 trillion package of tax increases could not pass either house of Congress, including the Democrat-controlled Senate.

"Only one person in the country can deliver the members of his party to support a deal that he makes, and that is the president," said Senate Minority Leader Mitch McConnell.

He praised House Republicans for "trying to move the process forward" with their proposal, but stopped short of endorsing it. Some conservative advocacy groups have been assailing GOP leaders this week for consenting to any tax revenue increases in a deal with Obama.

"With our latest offer we have demonstrated there is a middle ground solution that can cut spending and bring in revenue without hurting American small businesses," Boehner said in a statement today.

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Israel says will stick with settlement plan despite condemnation

JERUSALEM (Reuters) - Israel rejected concerted criticism from the United States and Europe on Monday over Prime Minister Benjamin Netanyahu's decision to expand settlement building after the United Nations' de facto recognition of Palestinian statehood.

Washington urged Israel to reconsider its plan to erect 3,000 more homes in the occupied West Bank and East Jerusalem, saying the move hindered peace efforts with the Palestinians.

Britain, France, Spain, Sweden and Denmark summoned the Israeli ambassadors in their capitals to give similar messages.

An official in Netanyahu's office said Israel would not bend. "Israel will continue to stand by its vital interests, even in the face of international pressure, and there will be no change in the decision that was made," the official said.

Angered by the U.N. General Assembly's upgrading on Thursday of the Palestinians' status in the world body from "observer entity" to "non-member state", Israel said the next day it would build the new dwellings for settlers.

Such projects, on land Israel captured in a 1967 war, are considered illegal by most world powers and have routinely drawn condemnation from them. Approximately 500,000 Israelis and 2.5 million Palestinians live in the two areas.

In a shift that raised the alarm among Palestinians and in world capitals, Netanyahu's pro-settler government also ordered "preliminary zoning and planning work" for thousands of housing units in areas including the "E1" zone east of Jerusalem.

Such construction in the barren hills of E1 has never been put into motion in the face of opposition from Israel's main ally, the United States. Building in the area could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for a contiguous state.

Israeli television stations reported Jerusalem's district planning commission would soon approve plans for several thousand more housing units, including more than 1,000 Israel had shelved two years ago after angering Washington by publishing the plans before a visit by Vice President Joe Biden.

The settlement plan, U.N. Secretary-General Ban Ki-moon said, would deal "an almost fatal blow" to a two-state solution to the Israeli-Palestinian conflict.

French President Francois Hollande said he was "extremely concerned" and Washington made clear it would not back such Israeli retaliation over the U.N. vote, sought by Palestinians after peace talks collapsed in 2010 over settlement building.

"We urge Israeli leaders to reconsider these unilateral decisions and exercise restraint as these actions are counterproductive and make it harder to resume direct negotiations to achieve a two state solution," White House spokesman Jay Carney told a briefing.

Ahead of a Netanyahu visit this week, Germany, considered Israel's closest ally in Europe, urged it to refrain from expanding settlements, and Russia said it viewed the Israeli moves with serious concern.

RETALIATION

Israeli Finance Minister Yuval Steinitz said Israel could not have remained indifferent to the Palestinians' unilateral move at the United Nations.

"I want to tell you that those same Europeans and Americans who are now telling us 'naughty, naughty' over our response, understand full-well that we have to respond, and they themselves warned the Palestinian Authority," he said.

Palestinian chief negotiator Saeb Erekat said building in E1 "destroys the two-state solution, (establishing) East Jerusalem as the capital of Palestine and practically ends the peace process and any opportunity to talk about negotiations in the future".

The United States, one of the eight countries to vote alongside Israel against the Palestinian resolution at the General Assembly, has said both were counterproductive to the resumption of direct peace talks.

In Europe, only the Czech Republic voted against the status upgrade while many countries, including France, backed it. Netanyahu plans to visit Prague this week to express his thanks.

In the Gaza Strip, Sami Abu Zuhri, spokesman for the governing Hamas Islamist movement, called the settlements "an insult to the international community, which should bear responsibility for Israeli violations and attacks on Palestinians".

Israeli police arrested three Jewish settlers on Monday whom they suspect of arson and other crimes against Palestinian property in the West Bank, including the torching of a car.

Attackers have often proclaimed they are exacting a "price tag" for steps taken against the settler movement by Palestinians, or by the Israeli government.

Alongside the settlement plans, Israel announced it would withhold about $100 million in Palestinian tax revenues from the Palestinian Authority, which exercises limited self-rule in the West Bank, saying Palestinians owed $200 million to Israeli firms.

"These are not steps towards peace, these are steps towards the extension of the conflict," Spanish Foreign Minister Jose Manuel Garcia-Margallo said.

Only three weeks ago, Netanyahu won strong European and U.S. support for a Gaza offensive that Israel said was aimed at curbing persistent cross-border rocket fire.

Favored by opinion polls to win a January 22 national election, he brushed off the condemnation and complaints at home that he is deepening Israel's diplomatic isolation.

Netanyahu told his cabinet on Sunday that his government "will carry on building in Jerusalem and in all the places on the map of Israel's strategic interests".

But while his housing minister has said the government would soon invite bids from contractors to build 1,000 homes for Israelis in East Jerusalem and more than 1,000 in West Bank settlement blocs, the E1 plan is still in its planning stages.

"No one will build until it is clear what will be done there," the minister, Ariel Attias, said on Sunday.

Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush, and the area has been under the scrutiny of his successor, Barack Obama.

Israel cites historical and Biblical links to the West Bank and Jerusalem and regards all of the holy city as its capital, a claim that is not recognized internationally.

(Additional reporting by Crispian Balmer, Dan Williams, Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Steve Gutterman in Moscow, Gareth Jones in Berlin, John Irish and Elizabeth Pineau in Paris and Tim Castle in London; writing by Jeffrey Heller; editing by Philippa Fletcher)

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Football: Lionel Lewis calls it a day

SINGAPORE: He was Singapore's safest pair of hands for almost a decade and, despite retiring from international football last year with 73 caps, Lionel Lewis was playing well enough to warrant consideration for a recall to the national squad for the current ASEAN Football Federation Championship.

But a persistent ankle injury put paid to the possibility of that happening, and now Lewis has decided to call it a day.

The 29-year-old Home United custodian will hang up his gloves to get a head start on his post-football career at Nanyang Polytechnic, his former school. He will be joining its Student Affairs Department.

"My friends and family know I have been thinking about my career after football," said Lewis, who had a training stint with Manchester City in 2007 and a week-long trial with Swiss side Grasshopper-Club Zurich.

"The job offer from Nanyang Polytechnic has been on the table for several months and after working out all the options, including the possibility of playing football on a part-time basis, I've decided to stop instead when my contract with Home runs out at the end of this month."

With a young family - his wife Jenny gave birth to their son Jonas only 10 weeks ago and his daughter Jennel is four - Lewis, who has a Sports Management degree from the University of Wolverhampton, felt it was necessary to not delay the start of his second career.

"I can play for another five to eight years, and if I were getting the kind of money that an English Premier League player earns, maybe it would be harder to walk away. But a footballer's pay here... you can't even smell their one-week wages," said Lewis, who did not say how much he earned at Home.

"I'm not putting down local football but that is the reality. Getting started now means that when I am 35, I can have a more assured career and hopefully be able to explore more options."

Former Singapore and Home United coach P N Sivaji thinks Lewis is making the right move.

"Yes, Lionel's one of our best goalkeepers ever, and yes, keepers do get better with age. But I think he's probably tired of the life of a footballer and its routines," he said.

Lewis' 12-year playing career has left him with a litany of injuries. He even had surgery three weeks ago to repair a tear to his anterior talofibula ligament. But he said he was not quitting because of his injuries.

"I've got to be satisfied with my 12 years, having won many trophies and travelled to most parts of the world," he said. "It has been an absolutely wonderful journey, and I am looking forward to this career change.

"I still plan to play football once a week and my friends will be happy because I can now join their social games."

- TODAY

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Zee editors denied bail for 2nd time in a week

NEW DELHI: For the second time in less than a week, a trial court on Monday dismissed the bail applications of the two Zee group editors arrested for allegedly trying to extort Rs 100 crore from Congress MP Naveen Jindal's firm.

Metropolitan magistrate Rajinder Singh on Monday dismissed the bail pleas, saying Zee News head Sudhir Chaudhary and Zee Business editor Samir Ahluwalia had not given any new grounds for their release on bail after their earlier plea was rejected on November 28. The two editors will now have to move a higher court for bail.

Move higher court for bail: Magistrate

Investigation is at a preliminary stage and there is no change of facts and circumstances since November 28...and no fresh ground has come up to release them on bail. Hence, in my considered opinion, the bail (plea) is dismissed," the court said while dismissing bail pleas of two Zee group editors. The metropolitan magistrate said the two editors would now have to move a higher court for bail.

During the hearing, special public prosecutor Rajiv Mohan argued that the two accused had no right to move a fresh bail plea as a similar application under section 437 of CrPC had been dismissed by a magistrate.

Mohan argued the two editors should not be given bail as they were involved in criminally extorting money from Jindal Steel and Power Limited and have also abused the freedom of speech and expression granted to the press under Article 19 of the Constitution. The two had been booked for non-bailable offences and hence can't be released on bail, Mohan added.

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Fossil fuel subsidies in focus at climate talks

DOHA, Qatar (AP) — Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to climate change, it's more like a curse.

Qatar — the host of U.N. climate talks that entered their final week Monday — is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support — an imbalance that is just starting to earn attention in the divisive negotiations on curbing the carbon emissions blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an advocacy group for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for Economic Cooperation and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in climate negotiations, which in two decades have failed to halt the rising temperatures that are melting Arctic ice, raising sea levels and shifting weather patterns with impacts on droughts and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned climate treaty is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with climate change.

"It's going to oil and coal companies that don't need it in the first place," he said.

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Associated Press writers Abdullah Rebhy in Doha, Qatar, and Brian Murphy in Dubai, United Arab Emirates, contributed to this report

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Karl Ritter can be reached at www.twitter.com/karl_ritter

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Boehner Makes Fiscal Cliff Counter-Offer

House Speaker John Boehner today sent President Obama a counter-proposal on how to cut the deficit that he called a “credible plan” to break the stalemate in negotiations to keep the country from going off the “fiscal cliff” but just hours later the White House quickly rejected the offer.

In the plan, Republicans offer a total of $2.2 trillion in deficit reduction over the next decade. That would give lawmakers “ample” savings to off-set $1.2 trillion in automatic cuts set to begin to take effect Jan. 2, 2013. Senior Republican aides said the proposal does not explicitly include an offer to address the standoff over whether the president or Congress should have power over debt limit increases.

White House communications director Dan Pfeiffer rejected the GOP’s counteroffer, complaining that it “does not meet the test of balance.”

“Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve,”  Pfeiffer stated. “While the president is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates.”

Brendan Buck, a spokesman to the speaker, said that by rejecting the offer, “the White House has once again demonstrated how unreasonable it has become” and he said “it is now [Obama's] obligation to present a plan that can pass both chambers of Congress.”

The GOP deal would create $800 billion in new revenue through tax reform, but Boehner insisted that tax rates should not go up on the top 2 percent of taxpayers. Instead, the GOP wants lower tax rates after closing loopholes, limiting tax credits and capping deductions.

“We believe through tax reform that you absolutely could lower rates below what they are for this year, and still hit the $800 billion target,” a senior GOP leadership aide said.  “How much you would be able to lower rates depends on what else you’re doing in tax reform, but it’s a number that’s mathematically consistent with not raising rates and doing comprehensive tax reform.”

The offer also proposes $600 billion in health savings, $300 billion in additional mandatory savings, $300 billion in discretionary spending cuts, and $200 billion by updating the formula by which the Consumer Price Index is calculated, which would affect all sorts of federal programs from Social Security to federal pensions.

“What we’re putting forth is a credible plan that deserves serious consideration by the White House, and I would hope that they would respond in a timely and responsible way,” Boehner, R-Ohio, told reporters today when he dropped into a staff briefing on the pitch. “We could have responded in kind, but decided not to do that.”

A senior Republican aide also said health care savings is a mandatory element of a comprehensive deal.

“That has been in every one of these sets of conversations that we’ve had over the last 15 months, and I don’t think there’s any way to get to a comprehensive deal that solves this situation without it,” the aide said. “Means testing has been, likewise, a part of every single discussion.”

Boehner said the president’s offer last week was “basically the president’s budget from last February,” which he noted received no votes in the House and no votes in the Senate.

“Going over the cliff will hurt our economy and hurt job creation in our country. It’s one of the reasons why the day after the election, I offered a concession to try to speed this process up by putting revenue on the table,” Boehner said. “Unfortunately the White House responded with the La-la-land offer that couldn’t pass the House, couldn’t pass the Senate.”

Now, in a letter to the president, House Republicans say they devised an offer based on Erskine Bowles’ proposal to the Joint Select Committee on Deficit Reduction, the so-called supercommittee. But Bowles himself issued a statement that the counteroffer “does not represent” his proposal to the supercommittee, since his plan was created to demonstrate how a deal could be achieved last year as negotiations faltered.

“The Joint Select Committee failed to reach a deal, and circumstances have changed since then,” Bowles said this afternoon. “It is up to negotiators to figure out where the middle ground is today. ”

Last week, the president asked for about $1.6 trillion in new revenue, including about $800 billion from allowing tax cuts on income over $250,000 a year expire. Obama also asked for about $400 billion in new stimulus spending, but the plan was rejected by Republicans as a “step backward.”

The letter with the GOP’s proposal was sent to the president around 2 p.m. today. One senior Republican aide close to the negotiations admitted the counteroffer “is not something that a bunch of conservatives are going to be jumping up and down endorsing.”

House Minority Leader Nancy Pelosi, D-Calif., said the proposal is “another assault on the middle class, seniors, and our future.”

“The American people made clear that they want us to work together on a balanced approach; yet, in the Republican plan, any alleged resemblance to an offer seeking balance and fairness is nonexistent.  It only makes matters worse,” Pelosi said. “Republicans are simply digging in their heels by refusing to ask the wealthiest Americans to pay their fair share and actually calling for lower tax rates.”

The speaker said he did not intend to speak with the president personally about the offer, but he “might run into him” tonight at a holiday reception at the White House. Pelosi is also scheduled to attend the party.

Get more pure politics at ABC News.com/Politics and a lighter take on the news at OTUSNews.com

ABC News’ Mary Bruce contributed to this article

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