UPDATE 5-Bush says committed to Middle East peace efforts

Reuters: [2008-05-17 19:23:00]

(Updates throughout with Bush, Abbas, Gheit comments)

By Matt Spetalnick and Tabassum Zakaria

SHARM EL-SHEIKH, Egypt, May 17 (Reuters) - U.S. President George W. Bush, responding to Arab dismay about his praise for Israel, said on Saturday he was confident a deal on Palestinian statehood could be reached before he leaves office.

Despite scepticism over his chances of securing a peace agreement by the end of his term in January, Bush expressed optimism that a deal could be done.

Speaking after a meeting with Palestinian President Mahmoud Abbas in the Red Sea resort of Sharm el-Sheikh, Bush said he told Abbas that he was "absolutely committed" to working with Palestinians and Israelis to get a Palestinian state defined.

"I do so for a couple of reasons. One, it breaks my heart to see the vast potential of the Palestinian people really wasted," he said.

"It'd be an opportunity to end the suffering that takes place in the Palestinian territories," Bush said. "And the second reason I'm for it is because it's the only way for lasting peace."

Palestinians say the Israeli occupation in the West Bank has created great hardship for them.

Abbas did not mention Bush's speech to Israel's parliament on Thursday in which he heaped praise on Israel but made only one reference to Palestinians' aspirations for a state of their own.

"We know very well that you personally as well as your administration are committed to reach peace before the end of 2008," Abbas said. "We are delighted to continue our engagement with you."

Bush, who will address Palestinian issues in a speech Sunday to the World Economic Forum, said the creation of a Palestinian state would be "an opportunity to end the suffering in the Palestinian territories."

ANNIVERSARY VISIT

Egyptian President Hosni Mubarak had raised the issue of Bush's speech to the Knesset in a meeting earlier on Saturday.

"We detect on the American side some optimism and we told them that we have the same information but it is results that will reveal whether this progress which the parties speak of is real," Egyptian Foreign Minister Ahmed Aboul Gheit told reporters.

"Time will tell how able the U.S. administration is to achieve its objectives but we must keep trying. We cannot leave the Palestinians in this tragic situation which we see in Gaza, or the West Bank," he said.

On the way from the airport on the last leg of his Middle East tour, Bush's motorcade passed a "peacemakers" mural on the side of the road, a reminder of past efforts on diplomacy in the region by his predecessors.

Bush's visit to Israel to celebrate its 60th anniversary raised fresh doubts in the Arab world over his ability to act as an even-handed broker between Israel and the Palestinians.

He hailed Israel as a "homeland for the chosen people" and pledged that Israelis could forever count on American support against enemies like Hamas and Iran.

Abbas, who wants Bush to put more pressure on Israel, has little leverage and is weak at home, governing only in the West Bank while the Islamists of Hamas control Gaza.

Israeli Prme Minister Ehud Olmert is also on the ropes, facing a corruption scandal that could force his resignation and possibly derail the peace process altogether.

Bush's Middle East tour, his second this year, follows a U.S.-hosted conference in Annapolis, Maryland, in November where Israeli and Palestinian leaders pledged to try to reach a peace agreement by the end of Bush's term.

Since then, talks have bogged down over Israeli settlement expansion in the occupied West Bank and violence in and around the Gaza Strip, where Hamas cross-border rocket fire has triggered a tough Israeli military response.

(Additional reporting by Jonathan Wright; Editing by Keith Weir) ((Reuters Messaging: matt.spetalnick.reuters.com@reuters.net; +1 202 898 8300, fax +1 202 898 8383))

Keywords: BUSH MIDEAST/

UPDATE 2-Tennis-Jankovic faces qualifier after Sharapova hurt

Reuters: [2008-05-17 18:15:00]

(Recasts after Cornet win)

ROME, May 17 (Reuters) - Title holder Jelena Jankovic will meet French qualifier Alize Cornet in the final of the Italian Open after the withdrawal of Russian second seed Maria Sharapova with a calf strain.

The 18-year-old Cornet staged a splendid comeback to upset Russian sixth seed Anna Chakvetadze 3-6 6-4 6-3 and earn herself a meeting with Serb fourth seed Jankovic.

The first set of the semi-final was tight until the seventh game, when Cornet was punished with a break of serve after blasting some easy forehands into net.

The 18-year-old lost the five games that followed and looked out of the match at 3-0 down in the second set.

But Chakvetadze repeated the tendency she showed earlier in the tournament to relax in the middle of her matches and Cornet took advantage to roar back and level things.

The Frenchwoman, who knocked out last year's finalist Svetlana Kuznetsova on Thursday, carried the momentum in the deciding set to reach her first big final.

Sharapova, who will become world number one next week after Belgian Justine Henin retired from tennis on Wednesday, said she should be fully fit for the French Open which starts on May 25.

"The most important thing is recovery and to be ready for the French (Open), which is obviously a goal for every player," Australian Open champion Sharapova told a news conference.

"I'm going to Paris in a couple of hours. I'm going to get some treatment over there and try to be ready as soon as possible. I hope in two days I'll be able to be on court and be normal."

Jankovic, who beat American seventh seed Venus Williams in the quarter-finals on Friday, said she was disappointed not to have played the match.

"I wanted to play. I was ready for another challenge, another tough match. Unfortunately she has an injury. It happens because we have really tough, intense matches. Our bodies cannot take it sometimes. I'm happy to be in the final and have a big opportunity to win to defend my title."

The women's tournament has been troubled by injuries, like the men's Rome Masters was last week.

Cornet got a walkover into the last four on Friday when Serena Williams pulled out of their quarter-final with a back injury.

Bulgarian qualifier Tsvetana Pironkova progressed to the quarter-finals on Thursday when Belarussian Victoria Azarenka retired with a knee injury from their third round match when the former was 6-2 1-0 ahead.

Both of the semi-finals and one of the quarters at last week's Rome Masters ended early because of injury.

(Reporting by Paul Virgo, editing by Clare Lovell)

(Clare.lovell@reuters.com, London Sports Desk +442075427933; RM: clare.lovell.reuters.com@reuters.net; For the latest Reuters Premier League and international football news see: http://football.uk.reuters.com)).

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Keywords: TENNIS WOMEN/ROME

Soccer-Russian Cup final result

Reuters: [2008-05-17 18:12:00]

    May 17 (Reuters) - Russian Cup Final result on Saturday 
 CSKA Moscow 2 Amkar Perm 2 
  CSKA Moscow win 4-1 on penalties. 
    (Compiled by Infostrada Sports; Edited by Neil Maidment) 
 ((neil.maidment@reuters.com; +44207 542 0856; Reuters 
Messaging: neil.maidment.reuters.com@reuters.net; For the 
latest Reuters Premier League and international football news 
see: http://football.uk.reuters.com/)) 
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  Keywords: SOCCER EUROPE/RUSSIA CUP RESULT 
    

UPDATE 1-Ukraine May CPI to dip from April's 3.1 pct-minister

Reuters: [2008-05-17 17:34:00]

(adds quotes, details)

By Natalya Zinets

KIEV, May 17 (Reuters) - Ukraine's inflation rate will slow in May from April's 3.1 percent and the government will do everything it can to combat soaring prices, Economy Minister Bodan Danylyshyn told Reuters on Saturday.

His deputy, Iryna Kryuchkova, suggested price rises, which soared to just under 30 percent year-on-year last month, could even be negative in July and August given the prospect of a good harvest.

Fuelled by a record month-on-month rise of 3.8 percent in March, consumer price inflation has hit a cumulative 13.1 percent over the first four months of the year -- far exceeding a government target of 9.6 percent for the entire year.

"In May, it will be lower than it was in April," Danylyshyn said on the sidelines of an investment conference held in conjunction with the EBRD's annual meeting.

"And we will do everything so that it turns out that way."

Prime Minister Yulia Tymoshenko has said that price rises in the first two weeks of May stood at less than half the level recorded in the same period in April.

Officials attribute the steep increases to rises in food prices. Tymoshenko, who took office last December, also says she has inherited inflation patterns from the previous government and its pre-election increases in social benefits.

But a senior central bank official said steep rises in the price of gas imported from Russia and continued hikes towards a European market price had also impacted inflation. Ukraine now pays $179.5 per 1,000 cubic metres, from $50 in 2005.

Ihor Shumylo, director of executive director of economic issues at the central bank said he expected the gas price to rise by 50 percent in the coming years.

"Everyone knows that sooner or later Ukraine will have pay the European price," he told journalists.

Russia's gas export monopoly Gazprom <GAZP.MM> currently sells gas to its European customers at around $400. Prices fluctuate together with global prices for refined products with a lag of six to nine months.

Ukraine's inflation hit 16.6 percent throughout 2007 against 11.6 percent the pervious year. Consumer prices leapt in March, accelerating at their fastest pace since 1999. Between January and April year-on-year price growth reached 30.2 percent.

FOOD PRICES BLAMED

Prices began their rapid rise after a bad harvest last year, which boosted food costs -- 50-60 percent of the CPI basket.

Danylyshyn said the government was maintaining price controls to guard against "unjustified" increases. Other measures have included using Ukraine's state reserves of cheaper products to keep increases to a minimum.

With food prices accounting for 50-60 percent of the statistical consumer basket, the government believes a good harvest will bring down inflation figures.

"We have for the moment no reason to believe that we will have any problems with farm output. There is optimism about a good harvest," Kryuchkova said.

"This will affect food prices. We have had years with deflation in July and August and that may be the case this year. We have not ruled it out. It's in our forecasts."

But she said slow movement in extending credits to companies posed an even bigger threat to the economy.

"It is the stupor in routine credits to companies that is now slowing down normal economic development," she said. "It could be higher."

Kryuchkova said the growth forecast of 6.8 percent -- compared to 7.6 percent last year -- was unchanged.

"We will have the lowest GDP figures and the highest inflation figures in the first half. The situation can change in the second half," she said.

"I believe we will have some sort of stabilisation for several months and then growth rates will start moving up."

Experts polled by Reuters are less optimistic than the government in their forecasts -- predicting inflation of up to 21.6 percent for the year and growth of 6.0 percent. ((Kiev bureau; +380 44 244 9150; additional reporting by Sabina Zawadzki; writing by Ron Popeski; Editing by Nick Edwards; Reuters Messaging:ronald.popeski@reuters.com@reuters.net))

Sri Lankan troops capture rebel position, 16 killed

Reuters: [2008-05-17 17:32:00]

COLOMBO, May 17 (Reuters) - Sri Lankan troops have killed 16 Tamil Tiger rebels and captured a rebel-held position in the island's north, officials said on Saturday.

A military spokesman said 17 people were injured on Saturday when Tamil Tiger rebels threw a hand grenade into a crowded street in northern Sri Lanka.

"Seventeen civilians, including six females and two children, were injured when LTTE terrorists lobbed a hand grenade into a crowded street in Vavuniya," said military spokesman Brigadier Udaya Nanayakkara.

Doctors said the death toll in Friday's suicide attack in the island's capital Colombo had risen to 11 from 10. Most of the dead were police officers.

They were killed when a suicide bomber crashed his motorbike into a police bus.

The military said 16 Tamil Tigers were killed on Friday in fighting in northern Jaffna, Vavuniya, Polonnaruwa and Mannar. Four government soldiers were injured in the clashes.

The military also said troops had captured a rebel-held area in the northwestern district of Mannar on Saturday after six days of fighting.

Fighting between government forces and the Liberation Tigers of Tamil Eelam (LTTE) has intensified since the government formally pulled out of a six-year-old ceasefire pact in January, though a renewed civil war has been raging since 2006.

The LTTE, which is fighting for an independent state for minority Tamils in the north and east of the island, has not commented on the latest fighting.

Independent confirmation of battlefield casualties is not possible because of lack of access to the area but each side is known to exaggerate the other's losses.

According to a compilation of military data, some 360 rebels have been killed in fighting in May with the loss of 41 soldiers. An estimated 70,000 people have been killed in the 25-year civil war.

Analysts say the military has the upper hand in the latest phase of the long-running war given superior air power, strength of numbers and swathes of terrain captured in the island's east. But they still see no clear winner on the horizon.

The Tigers are regularly hitting back with suicide attacks increasingly targeting civilians and roadside bombs, experts and the military say, which have deterred tourists and worried some investors in the $27 billion economy.

(Reporting By Ranga Sirilal) ((ranga.sirilal@reuters.com; +94-777-394-603; Reuters Messaging; ranga.sirilal.reuters.com@reuters.net))

Keywords: SRILANKA VIOLENCE/