A top Iranian general said government troops are “ready to sacrifice our lives” rather than back down in the face of protests over June’s disputed presidential election.

Gen. Sayyed Hassan Firouzabadi, chief of Iran’s Joint Armed Forces, said Iranian soldiers were willing to die as they did in the brutal eight-year Iran-Iraq war in the 1980s, according to the state-run Fars News Agency.

“Some may think that by protesting and chanting their slogans against us, we will back down, retreat and give up,” Firouzabadi said. “We are ready to sacrifice our lives, as we showed during the time of the Sacred Defense [the Iran-Iraq war].”

The government has cracked down on Iranians who protested the outcome of the June 12 election in which hard-line President Mahmoud Ahmadinejad was declared the winner over his chief rival, reformist Mir Hossein Moussavi.

Moussavi called the vote fraudulent and his supporters took to the streets by the thousands, sparking clashes between demonstrators and government troops, and members of a pro-government paramilitary force.

“The military uniform, in the system of the Islamic Republic, which is the system of the holy Quran, is the uniform of the Prophet’s faithful, Firouzabadi said. “It is the uniform of service to the supreme leadership and the people.”

Meanwhile, Brig. Gen. Azizollah Rajabzadeh, Tehran’s police chief, announced the creation of a 50,000-strong constable-like force called the “honorary police officers” that will assist police units, state-run Press TV reported.

Rajabzadeh said the honorary police force could eventually expand to 300,000 nationwide. – CNN

At least four people were killed and 32 wounded as six Baghdad-area churches were bombed within 24 hours, officials told CNN.

The first bombing took place Saturday night at St. Joseph’s church in western Baghdad, according to an Interior Ministry official. Two bombs placed inside the church exploded at about 10 p.m. No one was in the church at the time of the attack.

Sunday afternoon, three bombs exploded outside churches, wounding eight civilians, the official said. The bombs detonated within a 15-minute span, between 4:30 and 4:45 p.m. Two of the churches are in central Baghdad’s al-Karrada district, and the third is in al-Ghadeer in eastern Baghdad.

Sunday evening, a car bomb exploded outside a church on Palestine Street in eastern Baghdad just after 7 p.m., the official said. Four people died, and 21 were wounded.

And in southern Baghdad’s Dora district, a bomb outside a church wounded three other civilians.

Most of the churches were damaged in the bombings, according to video footage.

One Christian Iraqi, interviewed outside Sacred Heart Church — one of the two in al-Karrada — said the bomb went off shortly before 5 p.m., as members were arriving for Sunday evening mass. No one was hurt, Sabhan George told CNN, but the bomb damaged the church building and some cars outside.

George said he is concerned about the church bombings. If this continues, he said, “there will be no Christians left in Iraq.”

St. Joseph’s was one of six churches hit by coordinated bombings of Christian houses of worship in Baghdad and Mosul in 2004. The church is in the al-Jamiaa neighborhood of Baghdad, a former stronghold of al Qaeda in Iraq. There have been recent reports of an increase in targeted attacks in the area.

Many of Iraq’s estimated 1 million Christians have fled the country after targeted attacks by extremists. In October, more than a thousand Iraqi families fled the northern city of Mosul after they were reportedly frightened by a series of killings and threats by Muslim extremists, who apparently ordered them to convert to Islam or face possible death. At least 14 Christians were killed in Mosul in the first two weeks of October.

Separately, gunmen shot and killed an official in the Iraqi city of Kirkuk on Sunday morning, a local police official told CNN.

Using guns with silencers, the assailants opened fire on Rizko Aziz Nissan outside his home in central Kirkuk at 8:15 a.m.

Nissan was an Iraqi Christian, but the motives behind his killing were not immediately clear. Kirkuk is 150 miles (240 kilometers) north of Baghdad. – Reuters

Brazilian authorities detained the wife of former world boxing champion Arturo Gatti as a suspect in his killing, according to local reports.

Gatti was found dead Saturday in a hotel in Brazil, where he was taking a vacation with his wife, Amanda Carina Barbosa Rodrigues, and their young child.

The 37-year-old Canadian, who was born in Italy and made his name as a fighter based in New Jersey, was staying in the northeast seaside resort of Porto de Galihnas.

Rodrigues, 23, was being held in a police station in the city of Recife in connection with the killing, a police official in Porto de Galihnas told CNN.

Police official Osmar Silva Santiago confirmed local reports that Gatti’s body was found Saturday morning in his hotel room with strangulation marks.

“This crime is being investigated by our homicide experts and we hope to have more answers tomorrow,” Santiago said.

Police recovered a blood-stained purse strap from the scene, according to media reports.

Rodrigues became a suspect because of inconsistencies during her interrogation, local reports quoted homicide task force chief Josedith Ferreira as saying.

Gatti made his name in a series of three fights against “Irish” Micky Ward, losing the first but triumphing in the other two.

He held the IBF super-featherweight and WBC light-welterweight titles, and he also won the WBC junior welterweight belt but lost it to Floyd Mayweather Jr. in 2005.

Gatti retired in 2007 after suffering a knockout defeat by Alfonso Gomez in his comeback, ending with a record of 40 wins and nine losses.

He grew up in Montreal, Quebec, after leaving Italy at an early age, and returned to the city following his retirement.

According to Gatti’s official Web site, the Italian-born pugilist won “Fight of the Year” for three consecutive years. – CNN

Hoping to end a string of delays, NASA will try to launch the space shuttle Endeavour on Sunday on a mission to deliver the last piece of Japan’s Kibo laboratory to the International Space Station.

Liftoff is scheduled for 7:13 p.m. EDT from the Kennedy Space Center in Florida. Forecasters predicted a 70 percent chance the weather would be suitable for launch.

NASA canceled Saturday’s launch attempt after a spate of lightning strikes near the shuttle’s launch pad. Engineers spent the day checking the spaceship’s electrical systems and other equipment to make sure there was no damage.

“We’ve seen nothing so far that indicates anything was actually affected by the lightning strikes,” Mike Moses, the shuttle program manager at the Kennedy Space Center, told reporters after Saturday’s postponement.

NASA managers met early Sunday to review the engineers’ findings and cleared the shuttle for flight.

Shortly before 10 a.m. EDT, technicians began pumping a half-million gallons (1.9 million liters) of liquid oxygen and liquid hydrogen into the ship’s external fuel tank for the 8 1/2-minute ride into orbit.

Endeavour’s primary cargo is a porch for Japan’s $2.4 billion Kibo lab complex. The platform can be used to expose experiments to the open environment of space.

The porch is scheduled to be installed during the first of five spacewalks planned during Endeavour’s 12-day stay at the outpost, a $100 billion project of 16 nations.

The space station has been under construction 225 miles above Earth for more than a decade. It consists of nearly 26,000 cubic feet (735 cubic meters) of pressurized space, about as much room as a typical four-bedroom house.

The shuttle also will be ferrying a new crew member to the station. NASA astronaut Timothy Kopra will take over for Japan’s Koichi Wakata, who has been aboard the station since March.

NASA had hoped to fly Endeavour last month, but the mission was rescheduled after hydrogen leaked from a vent line while the ship was being fueled for flight.

(Editing by Jim Loney and Doina Chiacu) – Reuters

Two men were seriously injured during the traditional Running of the Bulls in the Spanish city of Pamplona on Sunday, one day after another runner was gored to death there for the first time since 2003, media reported.

Television showed one man being gored in the neck before he was trampled under the hooves of bulls charging through the city’s narrow streets surrounded by dozens of runners trying to get as close as possible to the animals.

A 44-year-old local man was caught by a bull weighing over half a tonne, after the animal became detached from others and was circled by a crowd of runners just before end of the course at the bull ring.

The bull impaled him in the chest, before returning to toss the bloodied man into the air several times and shredding his traditional white trousers, despite efforts by other runners to distract the animal and pull it away by its tail.

“He has a very, very serious prognosis. We have to wait to see if his lung becomes infected,” the doctor treating him told a news conference.

Damniel Jimeno, a 27-year-old from Alcala de Henares near Madrid, was fatally gored in the neck on Saturday. His body was due to be cremated on Sunday.

Pamplona’s ‘San Fermin’ is one of hundreds of bull-running fiestas held in Spain every year but was made famous by Ernest Hemingway’s novel ‘The Sun Also Rises’ and the week-long fiesta now attracts hundreds of runners from around the world, often drinking all night before the early morning run.

(Reporting by Ben Harding) – Reuters

A roadside bomb killed two U.S. Marines in southern Afghanistan, the U.S. military said on Sunday, the latest deaths in an escalation of violence that has put pressure on coalition leaders over their war strategy.

Thousands of U.S. Marines and hundreds of British soldiers have been fighting major new offensives in the past 10 days in Helmand province, a Taliban stronghold and Afghanistan’s biggest producer of the opium that funds the insurgency.

The assault by U.S. Marines, Operation Strike of the Sword, is the first major operation under U.S. President Barack Obama’s new regional strategy to defeat the Taliban and stabilize Afghanistan, which holds a presidential election on August 20.

It was launched with insurgency violence at its highest since the Taliban’s austere Islamist government was ousted in 2001 by U.S. and Afghan forces for failing to hand over al Qaeda leaders wanted over the September 11 attacks on the United States.

Violence has flared again throughout Afghanistan since the operation began on July 2, with attacks in traditional Taliban strongholds in the south and east as well as in relatively more peaceful areas in the north and west.

The Taliban backlash has put pressure on leaders in Washington and London, who say U.S. and other NATO-led troops have pushed back Taliban insurgents but that a lot of tough fighting remains to be done during the summer.

Obama told Sky News on Saturday the United States and its allies would have to evaluate Afghanistan again after next month’s election to see what other military or development steps might be needed.

THIRD SOLDIER DIES

The latest two soldiers to be killed by a roadside bomb died in Helmand on Saturday, a U.S. military spokeswoman said.

“The one attack in Helmand killed two Marines,” said spokeswoman Lieutenant Commander Christine Sidenstricker.

The U.S. military earlier reported four Marines were killed but Sidenstricker said the same incident in Helmand had been reported twice to officials in Kabul.

A third soldier serving with NATO-led forces in the south died on Friday from wounds received in June, the alliance said in a statement issued on Sunday. No other details were available.

Washington is pouring in extra troops under Obama’s new strategy, with numbers set to more than double to 68,000 by the end of the year. About 90,000 U.S. and NATO troops are already serving in Afghanistan.

British troops mounting their biggest operation of the campaign in Afghanistan have also suffered under the Taliban backlash, with 15 confirmed killed in a 10-day period, including five in two roadside bomb blasts on Friday.

Taliban casualty figures were not immediately available.

Britain has now lost 184 soldiers in Afghanistan since it joined the U.S.-led war, more than the 179 killed in Iraq since 2003, putting the Afghan campaign sharply into focus at home.

British Prime Minister Gordon Brown telephoned Afghan President Hamid Karzai on Sunday, the presidential palace said in a statement, and Karzai expressed his sympathy over the British casualties.

Brown told Karzai Britain would continue to help the Afghan people in the fight against terrorism and in building up Afghan security forces, the palace said. U.S. commanders have complained of a lack of Afghan troops in the latest operations.

One of the main goals of the new operation is to capture ground from the Taliban and hold it, something overstretched British-led NATO troops have so far been unable to achieve. It is also seeking to win over Afghans from the insurgency.

With the latest deaths dominating headlines, finance minister Alistair Darling said on Saturday British troops would get whatever equipment they needed despite a ballooning deficit putting pressure on the defense budget.

The media, military experts and opposition politicians have questioned the government’s strategy and its commitment to equipping troops properly. Britain has sent 700 extra troops for the presidential election period, taking its force to 9,000.

In Helmand, the main British military hospital on Friday coped with the biggest load of battlefield casualties suffered in a day since the Falklands campaign in the 1980s.

But politicians and military leaders have warned often in recent weeks that a bloody summer of fighting lay ahead.

(Additional reporting by Jonathon Burch in Kabul and Peter Graff in Helmand; Editing by Andrew Dobbie) – Reuters

The CIA withheld information from Congress about a secret counterterrorism program on orders from former U.S. Vice President Dick Cheney, a U.S. senator said on Sunday amid calls for an investigation.

Democratic Senator Dianne Feinstein told “Fox News Sunday” that CIA Director Leon Panetta disclosed Cheney’s involvement when he briefed members of Congress two weeks ago. She said Panetta told them he had canceled the program.

President Barack Obama appointed Panetta to head the agency early this year. The still-secret program, which The New York Times said never became operational, began after the September 11 attacks on the United States.

News of Cheney’s involvement, reported by the Times on Sunday, prompted an outpouring of criticism by Obama’s fellow Democrats and support by rival Republicans in Congress.

Feinstein, chairman of the Senate Intelligence Committee, said: “Director Panetta did brief us two weeks ago — I believe it was on the 24th of June … and, as had been reported, did tell us that he was told that the vice president had ordered that the program not be briefed to the Congress.”

Asked if the matter should be investigated, Senate Majority Whip Dick Durbin said, “Absolutely.”

“The executive branch of government cannot create programs like these programs and keep Congress in the dark. There is a requirement for disclosure,” said Durbin said on ABC’s “This Week.”

“It has to be done in an appropriate way so it doesn’t jeopardize our national security, but to have a massive program that is concealed from the leaders in Congress is not only inappropriate; it could be illegal,” he said.

Feinstein and Democrat Patrick Leahy, chairman of the Senate Judiciary Committee, insisted no one should go outside the law.

Asked about Cheney’s involvement, Leahy told CBS’s “Face the Nation”: “I’d like to know if it’s true or not. I mean, nobody in this country is above the law … You can’t have somebody say, well, if you’re vice president, you don’t have to obey the law.”

Feinstein said Congress “should have been told” about the secret problem and that the vice president shouldn’t be above the law.

“This is a big problem, because the law is very clear. And I understand the need of the day, which was when America was in shock” after September 11, she said on Fox. “But … I think you weaken your case when you go outside of the law.”

CHENEY’S POST-ELECTION BATTLE

Cheney was a key advocate in the Bush administration of using controversial interrogation methods such as waterboarding on terrorism suspects and has emerged as a leading Republican critic of Obama’s national security policies.

Since Obama took over from President George W. Bush on January 20, Cheney has engaged in an increasingly contentious battle with the new administration over the CIA interrogation procedures that undermined the United States’ reputation around the world.

In one of his first acts as president, Obama ordered more humane treatment for terrorism suspects.

Panetta has vowed not to allow coercive interrogation practices, secret prisons or the transfer of terrorist suspects to countries that may use torture, a pledge seen as a break with the agency’s policies under Bush.

Republican Senator Jeff Sessions, the ranking Republican on the Judiciary Committee, told “Face the Nation” he said he believed the Cheney allegations will be investigated.

Asked if he expected the situation to be looked into, Sessions said, “Well, I’m sure it will be.”

“I don’t know what the facts are. But I believe that Vice President Cheney served his country with as much fidelity as he could possibly give to it. And he tried to serve us in an effective way. And I hope that nothing like this would impact on his outstanding record.”

(Reporting by World Desk Americas; Editing by Doina Chiacu) – Reuters

Honduras’ interim government on Sunday lifted a curfew imposed since the June 28 coup that ousted President Manuel Zelaya, saying it had succeeded in restoring calm and reducing crime.

The announcement by the caretaker administration of President Roberto Micheletti, installed by Honduras’ Congress after the coup, came as a relief for the already battered economy and for people struggling to return to normal life.

Isolated by the international community after Zelaya’s ouster, Honduras is bracing for austerity under the weight of economic sanctions, and the lifting of the curfew indicated Micheletti’s government felt it could control the Central American nation despite frequent pro-Zelaya demonstrations.

Ordinary Hondurans have sought to put a brave face on the coup crisis, from a village that forged ahead regardless with its annual fiesta, complete with a brass band and fireworks, to the gang-plagued slums surrounding the capital, where the poor are bracing for higher prices and unemployment.

Even the wealthy have felt the pinch. At the upscale restaurant El Patio, where Saturday nights are normally a rollicking affair of mariachi music and rum-fueled laughter, the neon lights were dimmed early on a dining terrace that was half-filled even though the national soccer team was on TV.

“Nobody knows how this is going to turn out,” El Patio manager Dolores de Jesus Ordonez said. “I have a lot of faith in the dialogue going on in Costa Rica.”

Micheletti’s interim government is holding talks with Zelaya’s representatives under the auspices of Costa Rican President Oscar Arias. But he says Zelaya’s reinstatement is not negotiable because he contravened the constitution by seeking to illegally extend his rule.

The talks have resulted in little apparent progress, aside from an agreement to keep talking.

Zelaya, now traveling the Americas in search of support, also ran afoul of his political base and ruling elites in the conservative country by allying himself with Venezuela’s firebrand leftist president, Hugo Chavez.

Zelaya told Caracas-based Telesur television on Sunday he intended to return “at any time, on any day, anywhere” even though the new government vows to arrest him.

At least one pro-Zelaya protester was killed in clashes at Tegucigalpa’s airport a week ago when Honduran troops blocked an attempt by Zelaya to return in a plane provided by Chavez.

TENSION WITH VENEZUELA

In a sign that tensions with Venezuela remained, Honduran police on Saturday night detained for several hours members of TV crews of the Venezuelan state channel VTV and Caracas-based Telesur, which have been extensively covering pro-Zelaya protests and other news developments.

Speaking in Caracas, Chavez condemned the detention.

“Is this the path they want to take?” Chavez said.

He said he was convinced it was the “Yankee empire” (United States) behind Zelaya’s ouster in Honduras, even though U.S. President Barack Obama’s administration quickly condemned the coup and has called for Zelaya’s restoration, drawing praise from Zelaya himself.

Reflecting widespread international condemnation of the coup, foreign ministers and diplomats from 50 democracies on Sunday urged the reinstatement of Zelaya and said his overthrow represented a threat to democracy.

The call came from a meeting in Portugal of the Community of Democracies, an intergovernmental organization that seeks to strengthen democratic institutions.

Micheletti is due to hand over power after scheduled November elections, which he says will go ahead as planned.

He has asked citizens to prepare for austerity after foreign lenders suspended about $200 million in credits and the United States cut off $16.5 million in military assistance while threatening to halt a further $180 million in aid.

In the Santa Cecilia slum in hills above Tegucigalpa, where unemployment and crime are rife, the people are familiar with hardship.

“The men go out to steal and the women stay at home waiting for their husbands to come back from stealing,” said Fedelina Zepeda, 52, who makes 80 lempiras (about $4) a day selling hand-made tortillas from her brick and corrugated tin house.

The coup was triggered by a planned voted on June 28 called by Zelaya to measure support for convening a constitutional assembly that could have lifted limits on presidential terms. The Supreme Court and Congress had deemed the vote unconstitutional and ordered Zelaya’s removal.

A day before the national plebiscite, the village of San Buenaventura was preoccupied by another vote — one to choose the child queen of the annual fiestas in honor of the saint bearing the name of the farming enclave of 2,300 people tucked in a forest-covered valley 20 miles from the capital.

Seven-year-old Jessy Ordonez prevailed, but the next day’s coup suddenly cast doubt on whether the fiesta could be held.

“She got very sad. Every day she asked what was going to happen,” said her father, Jorge Ordonez.

In the event, Jessy got her moment of glory as the fiesta went ahead despite the political crisis, accompanied by a band of ancient, beat-up instruments played by elderly musicians

“This is what the people want,” Mayor Jose Andres Amador said, “not all the political games.”

(Additional reporting by Simon Gardner, Enrique Andres Pretel, Juana Casas in Tegucigalpa, Patricia Zengerle in Caracas, Shrikesh Laxmidas in Lisbon; Editing by Pascal Fletcher) – Reuters

As British troops moved into the village newly freed from Taliban control, they heard one message from the anxious locals: for God’s sake do not bring back the Afghan police.

U.S. and British troops have launched a campaign to seize control of Helmand province, about half of which was in Taliban hands, and restore Afghan government institutions.

But as they advance, they are learning uncomfortable facts about their local allies: villagers say the government’s police force was so brutal and corrupt that they welcomed the Taliban as liberators.

“The police would stop people driving on motorcycles, beat them and take their money,” said Mohammad Gul, an elder in the village of Pankela, which British troops have been securing for the past three days after flying in by helicopter.

He pointed to two compounds of neighbors where pre-teen children had been abducted by police to be used for the local practice of “bachabazi,” or sex with pre-pubescent boys.

“If the boys were out in the fields, the police would come and rape them,” he said. “You can go to any police base and you will see these boys. They hold them until they are finished with them and then let the child go.”

The Interior Ministry in Kabul said it would contact police commanders in the area before responding in detail.

When the Taliban arrived in the village 10 months ago and drove the police out, local people rejoiced, said Mohammad Rasul, a toothless elderly farmer who keeps a few cows and chickens in a neatly tended orchard of pomegranate trees, figs and grape vines.

Although his own son was killed by a Taliban roadside bomb five years ago, Rasul said the fighters earned their welcome in the village by treating people with respect.

“We were happy (after the Taliban arrived). The Taliban never bothered us,” he said.

Before the Taliban arrived, the police had come to his house with a powerful landlord he called a “tyrant,” who put a rifle in his face, searched through his compound and demanded money.

“If (the British) bring these people back, we can’t live here. If they come back, I am sure they will burn everything,” Rasul said.

MINES, SNIPERS

The British effort, Operation Panther’s Claw, has focused on the Babaji district north of the provincial capital Lashkar Gah, an area of lush fields, vineyards and orchards, watered by carefully tended streams and canals fed by the Helmand river.

Taliban fighters have sown the area with homemade mines and sniper nests, inflicting the worst casualties of the war. At least 15 British soldiers have been killed in the past 12 days.

Further south, some 4,000 U.S. Marines have met less resistance after seizing three districts of the lower Helmand River valley in an air and ground assault.

The aim is to impose Afghan government control over most of the province in time for an August 20 presidential poll.

But commanders say holding the area for the longer term will depend on bringing in credible local security forces.

The United States has spent lavishly in the past eight years to build up the Afghan National Army (ANA).

But it left training the Afghan National Police (ANP) to Germany, which spent a fraction as much, sending a small number of civilian instructors.

The result is a police force that is widely acknowledged to be unprepared for work in a combat zone: the ANP suffered three times as many deaths as the ANA last year.

Washington is rushing to make up the gap, sending 4,000 military trainers to Afghanistan this year to focus mainly on professionalizing the police.

Entire police forces are being removed from districts and sent to remote locations for intensive eight-week training.

Major Al Steele, commander of Bravo Company of 3 SCOTS, the Black Watch, who met elders in Pankela, acknowledged their concerns but said foreign forces were working on it.

“We have heard a lot of complaints about the ANP, but the Coalition Forces and the ANA are working together well, and the ANP are getting better,” he told Gul Mohammad, squatting outside the elder’s mud-walled compound.

The elder shrugged and flipped his prayer beads.

“Every time we heard that new ANP would come. But the old ANP would come back and it would be just like in the past.”

“The people here trust the Taliban,” he said. “If the police come back and behave the same way, we will support the Taliban to drive them out.”

(Editing by Paul Tait and Myra MacDonald) – Reuters

Palestinians reject any deal between Israel and the United States that would allow even limited Jewish settlement construction in the occupied West Bank, a top Palestinian negotiator said on Sunday.

“There are no middle-ground solutions for the settlement issue: either settlement activity stops or it doesn’t stop,” Saeb Erekat told Voice of Palestine radio.

Erekat said Palestinian President Mahmoud Abbas expressed that message in a letter on Saturday to U.S. President Barack Obama.

Erekat was responding to reports that Israel and the United States were discussing a compromise that would allow some building in existing settlements under what Israel terms “natural growth” to accommodate expanding families.

A U.S. official denied on Wednesday a report in the Israeli daily Maariv that the Obama administration agreed work could continue on 2,500 housing units whose construction had begun, despite its call for a total freeze to spur peace efforts.

The report followed talks in London last week between George Mitchell, Obama’s special Middle East envoy, and Israeli Defense Minister Ehud Barak aimed at healing a rift over continued settlement activity.

The U.S. State Department said Mitchell was expected in the region “soon” for talks with Israeli and Palestinian officials.

Barak has been seeking a deal with the United States that would include initial steps by Arab states to normalize relations with Israel in return for limiting settlement activity.

PEACE TALKS

Israeli Prime Minister Benjamin Netanyahu on Sunday renewed his call on Abbas to resume peace talks immediately.

“There is no reason for us not to meet anywhere in Israel and I suggest we meet … to advance peace for the benefit of both our peoples,” Netanyahu said during the weekly cabinet meeting, held in the southern city of Beersheba.

Palestinians have said they would not revive stalled peace talks with Israel unless its settlement activities stopped.

“If settlement continues Israel will be allowed to build one thousand units here and two thousand units there, which will lead Arabs and Palestinians to believe that the American administration is incapable of swaying Israel to halt its settlement activities,” Erekat told the radio.

“The message is clear: settlements should stop immediately.”

Some 500,000 Israelis live in the West Bank and Arab East Jerusalem, areas Israel captured in a 1967 war. Palestinians say Jewish settlements, deemed illegal by the World Court, would deny them a viable and contiguous state.

Western officials said the United States was moving in the direction of making allowances so Israel could finish off at least some existing projects which are close to completion or bound by private contracts that cannot be broken.

Israel estimates that 2,500 units are in the process of being built and cannot be stopped under Israeli law.

Netanyahu, under U.S. pressure, has pledged not to build new settlements in the West Bank.

(Writing by Joseph Nasr, Editing by Richard Balmforth) – Reuters