SOURCE: The St. Petersburg Times
DATE: Issue #1186 (52), Friday, July 14, 2006
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TITLE: Russia Says WTO Deal Reached, U.S. Disagrees
AUTHOR: By Douglas Busvine
PUBLISHER: Reuters
TEXT: MOSCOW — Russia said on Thursday it had achieved a breakthrough in talks with the United States on joining the World Trade Organization, but the U.S. side said no final deal had yet been reached. 
Finance Minister Alexei Kudrin was quoted by Russian news agencies as saying that Presidents George W. Bush and Vladimir Putin should sign a WTO protocol in St. Petersburg on Friday or Saturday, when the annual Group of Eight summit begins.
“I hope that a protocol will be signed before the G8, tomorrow or the day after,” Kudrin was quoted by Interfax as saying.
Kudrin said a deal had been reached on financial services, but talks were continuing on other areas. U.S. officials said no comprehensive WTO entry agreement had yet been struck.
“No deal has been reached at this point,” said one official traveling with Bush on a pre-G8 visit to Germany.
U.S. Trade Representative Susan Schwab has held two days of talks in Moscow in a bid to seal Russia’s decade-old bid to join the 149-nation trade club.
“We are continuing to meet and are committed to a commercially strong agreement,” Schwab’s spokesman, Sean Spicer, said in an email statement. “Both sides still have important unresolved issues.”
One source familiar with the talks said earlier that the problem areas of access to Russia’s farm produce market for U.S. exporters and its protection of intellectual property rights were still not settled.
Russia is the biggest economy outside the world trade body. An accord with the United States would eliminate one of the last remaining obstacles to Russia’s WTO membership and set a positive tone for the G8 summit.
Kudrin said the U.S. side had dropped a demand that foreign banks be allowed to open branches in Russia instead of being required as they are now to open subsidiaries — an arrangement that gives Russia greater supervisory powers.
“We agreed that foreign insurance companies would be allowed to open branches, but we insisted that foreign banks will not open branches in Russia,” Kudrin said, according to RIA Novosti.
Kudrin later said that talks were continuing and progressing on other areas.
“Agriculture remains an unresolved question. On the question of intellectual property we have almost reached agreement,” he said. 
“I hope that within a day or two we will succeed,” Kudrin said.
Senate Democrats urged Bush on Wednesday not to rush into a deal, questioning Russia’s reliability as a trading partner.
“Numerous actions by Russia have created significant doubts about whether the government of Russia has the political will to comply with its obligations,” Senate Minority Leader Harry Reid and 19 other Senate Democrats said in a letter to Bush.
Senior U.S. lawmakers and leading software, movie and music industry groups have urged the Bush administration not to sign a bilateral agreement until Moscow stamps out copyright piracy.

TITLE: Activists Jailed as G8 Summit Gets Underway
AUTHOR: By Galina Stolyarova and Liza Hearon
PUBLISHER: Special to The St. Petersburg Times
TEXT: Activists of the Second Russian Social Forum, a protest event organized by antiglobalist and opposition movements to coincide with the meeting of the Group of Eight heads-of-government summit this weekend, are crying foul as the police continue to arrest their members. 
More than a dozen activists, including two Germans and one Swiss citizen, have been arrested and sentenced for 10 to 15 days in jail this week on grounds such as “urinating on a street,” “swearing at the police” and “violence,” said Vladimir Soloveichik, a left-wing politician and one of the forum’s organizers. 
According to local activists, Henning Wallerius, 25, and Eike Korfhage, 30, of Germany, along with Adrian Sauter, of Switzerland, came to Russia in a bicycle convoy and are being detained for 10 days on Tuesday. They were arrested on Friday and charged for swearing at police when they were walking to an apartment. A Russian who came outside to meet them, wearing his slippers, was also detained.
“The charge of swearing at the police is often used — all they need is two police officers to say it happened; it is an easy way to suppress activists. The legal possibilities are limited in Russia,” said Dmitry, a St. Petersburg lawyer who is assisting the activists and asked that his last name be withheld to protect his identity. He said that the German and Swiss consulates were involved in the cases.
Nikolai, a young activist who asked that his name be changed to protect his identity, said this week’s court hearings were held under “suspicious circumstances.”
“The police arrested anarchist Mikhail Lunkovsky and then placed some of their staff in his apartment; the police answered the phone and grabbed anyone who had the misfortune to come by,” Nikolai said. “The police do not bother collecting evidence or providing the activists with a lawyer.”
Alexander Chekalin, deputy head of the Russian Interior Ministry, drew a different picture and suggests the activists are exaggerating. 
“The scenario is different: when the police arrest some brawlers or drunkards and try to establish their identities, these people say they are antiglobalists who came to participate in the counter-summit,” Chekalin said. “The police have not been instructed to arrest antiglobalists.”
Ruslan Linkov, leader of the Democratic Russia non-governmental organization, said the situation is part of a deal between the law enforcement and the courts. 
“The district courts have so-called duty judges who produce the needed verdicts as if working on an assembly-line,” he said. “Some of the detainees weren’t able to contact a lawyer or get in touch with members of their families.”
Linkov also criticized City Hall for refusal to give permission to opposition meetings. 
City Hall has rejected requests for an antiglobalist march on Petrograd Side and a subsequent meeting by the Avrora Cruiser on Saturday, a Communist march on Nevsky Prospekt, also on Saturday, and a rock concert at Kirov Stadium on Sunday.
“Russia is a country with a long history of authoritarian rule and a short history of ill-fated democracy, which was anything from ‘managed’ to ‘sovereign’ but never the real thing,” Linkov said. “The treatment of the opposition in St. Petersburg shows that things do not change.”
On Thursday, six activists heading to St. Petersburg on the train from Moscow were detained and taken to a police station for questioning, photographing and fingerprinting.
“Five minutes before the train reached St. Petersburg, two guys in transit police uniforms and two in normal clothes came,” said Alex, 21, who asked that his last name be withheld because he is frightened of the police. 
“They showed their cards too quickly for me to be able to read it. They had a list of about 30 names and when they checked our passports they found our names on the list.
“We asked them what was happening and they said we were members of an extremist youth organization,” Alex said. 
Alex said he believes his name was on the list on the basis of previous arrests at demonstrations.
His friend Zhenya, 26, was detained for almost two hours along with him. 
“Maybe they thought I was an activist trying to take down McDonalds or something. But I am not — I am just interested in social problems and am coming to the forum to learn about legal problems,” he said.
St. Petersburg political analyst Stanislav Yeremeyev urged locals to accept the demands of security at such a major event, describing them as inevitable.
“The importance of the event and its positive long-lasting effects are so significant that ordinary people should demonstrate a more understanding attitude,” he said. “Local newspapers are abundant with complaints, which is very unfair. A grand event like this is worth a little discomfort.”

TITLE: Bush Defends Israel, Russia Condemns Strike
AUTHOR: By Kerstin Gehmlich
PUBLISHER: Reuters
TEXT: PARIS — Russia and France condemned Israel’s strikes in Lebanon on Thursday as a dangerous escalation of the Middle East conflict but the United States said Israel had the right to defend itself. 
President Bush defended Israel’s attack on Beirut airport, but warned the Israelis they should be careful not to weaken the fragile Lebanese government.
“Israel has the right to defend herself,” Bush told a news conference after talks with German Chancellor Angela Merkel. “Secondly, whatever Israel does should not weaken the ... government in Lebanon.”
Bush and Merkel made clear at a joint news conference they felt Israel’s actions in seeking kidnapped soldiers and responding to Hizbollah rocket attacks were justified.
But Russian Foreign Minister Sergei Lavrov denounced both Israel’s attack on Lebanon and its operations against the Palestinian territories.
“This is a disproportionate response to what has happened and if both sides are going to drive each other into a tight corner then I think that all this will develop in a very dramatic and tragic way,” he told reporters on a flight from Paris to Moscow, Interfax news agency reported.
Israel struck Beirut airport and began enforcing a naval blockade of Lebanon on Thursday, intensifying reprisals after Hizbollah seized two Israeli soldiers and killed eight in cross-border attacks on Wednesday.
The Israeli attacks have killed 52 Lebanese civilians.
French Foreign Minister Philippe Douste-Blazy called Israel’s bombardment of Beirut airport “a disproportionate act of war,” saying there was a real risk of a regional war.
Douste-Blazy also condemned Hizbollah’s firing of rockets into northern Israel and the seizure of the soldiers, telling Europe 1 radio these were “irresponsible acts.”
“The only solution is a return to reason by both sides,” he said. “We are calling for a lowering of tensions.”
Hizbollah fired barrages of rockets into towns across northern Israel on Thursday, killing one civilian and wounding 29 others in their heaviest bombardment in a decade.
The violence is the worst between Israel and Lebanon since 1996 when Israeli troops still occupied part of the south. Bush said there was concern that any activities by Israel to protect herself would weaken the Lebanese government.
“Having said all that, people need to protect themselves. There are terrorists who will blow up innocent people in order to achieve tactical objectives. 
In this case, the objective is to stop the advance of peace,” he added.
British Prime Minister Tony Blair called on all sides in the Middle East crisis to exercise restraint, act proportionately and get back to the negotiating table as soon as possible.
“Overall, let us remember how these problems have arisen which is first and foremost the kidnappings. We condemn these kidnappings and call for the soldiers involved to be released,” Blair’s official spokesman said.

TITLE: Poll Reveals Ignorance Of G8, Identifies Key Issues
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Sixty percent of respondents polled in G8 member states have no idea that their heads of government are meeting in St. Petersburg this weekend, according to recently released research.
However, the international attention from the event is expected to bring numerous benefits to the city such as a massive investment boom and crowds of foreign tourists.
U.S.-based agency Global Market Insite joined forces with St. Petersburg’s Agency for Social Information to poll 8001 people in G8 member states to investigate the way the nations feel about the meeting, the group’s status and the issues it’s striving to solve.
The sociologists asked the respondents which issues they would include in the agenda for the 2006 G8 summit if they were asked for advice.
For Japanese respondents, climate change topped the list of priorities, while global poverty ranked first in France and the United Kingdom. Most Italians and Germans mentioned violation of human rights, and citizens of Canada and the U.S. selected the spread of dangerous infectious diseases as the most pressing issue. 
The majority of Russians chose terrorism as the greatest global threat.
Sergei Shelin, a political analyst and columnist with the Moscow-based magazine Novoye Vremya, said the agenda selected by the poll’s participants mirrors the fears with which these nations are preoccupied. He compared the forthcoming summit with a meeting of leaders of scared tribes. 
“This is a moment of truth for the G8: these frightened nations delegated their leaders to find solutions and if the meetings bring nothing more than fruitless volatility, the trust for the club will be undermined,” Shelin said.
The poll indicates that the majority of respondents would welcome further increases in the size of the group. This view is shared by 56 percent of Italians, 54 percent of Britons and Canadians and 49 percent of the French.
Another poll, conducted by the Moscow-based ROMIR monitoring agency, shows that 70 percent of Russians are convinced that the upcoming G8 summit will increase Russia’s global role.
Angela di Stasi, a Professor of European Community Law and Chair in International Relations at the University of Salerno in Italy, warns that Russia’s accession to the G8 should not be seen as an isolated event. The gradual integration of Russia in the G8 is evidence of a move towards consensus on globally resonant issues, including security, international drug trafficking, refugee flows and nuclear safety, she said.
“Russia’s membership in the G8 is explained by geo-political strategic factors, rather than by any economic factors, and it coincides with the country’s transition process towards a modern market economy,” di Stasi said. “It coincides, above all, with a progressive Russia’s integration in the economic and political international system via partnership and membership in the International Monetary Fund, the Paris Club, the Council of Europe, the EU-Russia Cooperation Agreement and other organizations.”

TITLE: MegaFon keeping its subscribers Local numbers will remain local
TEXT: Changes to telecommunications legislation have left a number of questions unanswered, even now that they have come into effect. One thing is clear; the changes have led a to serious restructuring of the telecommunications market, the effects of which have been felt by everyone – subscribers and operators – in both the mobile and fixed-line spheres.
The legislative changes mean that mobile operators no longer have the right to offer local numbers – for example, in St. Petersburg, numbers with dialing code 812 – thus officially ascribing federal numbers – for example, starting with dialing code 921 – to mobile operators. The legislation now includes sanctions that can be imposed, up to and including stripping an operator of its license or revoking its right to assign numbers. What could an operator serving hundreds of thousands of subscribers with local numbers do? Today, most are prepared to sign agent deals with fixed-line operators to offer local numbers on their behalf. MegaFon has taken a different route, having obtained a license 18 months ago to offer local and intra-zonal communications over the whole of the Northwest Region. 
“Of course, many people are worried by what is happening with local numbers, which the company has been offering and servicing for more than 10 years,” says Alexander Volkov, director of MegaFon’s subsidiary in the Northwest Region. “These numbers existed until 2001, after which a resolution was adopted to give us numbers using geographically non-specific codes – in MegaFon’s case in Petersburg, this was 921. At that time, after receiving no numbers from the Ministry, we created something unique – every subscriber was given two numbers, one federal and one local in addition. Subscribers could sign new contracts that included two numbers but left the terms of service unchanged. Now that the law strictly regulates this issue, we will offer local numbers as a fixed-line operator. We have kept a reserve stock of numbers for ourselves, and our subscribers will be able to continue using local numbers, getting the service from one operator.”
But this is not the end of MegaFon’s development on the fixed-line market. With a diversified transport infrastructure network, including in remote areas of the Northwest Region, in the next year or two Megafon North-West plans to offer a raft of services and technological solutions, including for corporate clients.
“The market is developing toward service convergence,” says Oleg Fyodorov, technical director of MegaFon’s Northwest Region subsidiary. “Having a license allows us to move in this direction. In all of the Northwest Region’s administrative centers we will have the fixed-line equipment necessary to offer our services, and we will also carry out work to increase the capacity of our transport network.”
Another serious change to the legislation is the introduction of Calling Party Pays (CPP). From July 1, MegaFon North-West will not charge for incoming calls from 921 numbers. Subscribers retain the option of having additional local numbers, with the operator redirecting incoming calls to their federal numbers. The subscriber pays for redirecting from the 101st minute of talk time with subscribers to the public network.
“The free 100 minutes a month are a bonus that will help our subscribers in the next few months to work out how much incoming traffic from fixed-line telephones they need. Statistics show that this is about 30 minutes a month at the moment. The limit of 100 minutes has to do mainly to do with fraud – the risk of abusing the free incoming traffic,” Alexander Volkov says.
Another aspect to bear in mind is the flipside of CPP – or rather its literal implications for subscribers who make calls. And in this connection MegaFon North-West predicts growth in the popularity of local numbers, since along with prestige they will acquire new economic status. Fixed-line subscribers will be able to make outgoing calls to mobiles only if they are dialing local numbers. In all other cases, making calls from a home phone to a mobile will add charges for the conversation to the phone bill. Thus, a mobile phone owner can keep control of his financial relations with those he needs to be in touch with.

TITLE: U.S., Russia To Boost Nuclear Ties
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia will host joint field exercises with the United States on nuclear safety issues by the end of 2006, the Federal Atomic Energy Agency said Wednesday.
The move is one of a series of measures to boost nuclear security cooperation between the two countries, as agreed on by agency chief Sergei Kiriyenko and U.S. Energy Secretary Samuel Bodman, the agency said in a statement.
Although signed by the two officials at the end of June, the measures were made public Wednesday, just two days before a meeting between Presidents George W. Bush and Vladimir Putin in St. Petersburg. Experts said the exercises, among other measures, suggested the presidents would move toward an overarching agreement that would kick-start wholesale cooperation between the two countries’ nuclear industries.
“Such an agreement would lift restrictions on any cooperation in the nuclear sphere between Russia and the United States,” an agency spokesman said Wednesday.
Cooperation with the U.S. nuclear industry could help Russia earn billions of dollars in atomic power station construction and fuel supply and reprocessing contracts. Some estimates put the global value of the nuclear storage and processing sector alone at $20 billion. 
Ecologists and opposition politicians cried foul this week after it became apparent that such an agreement could theoretically allow the transportation of spent fuel from the U.S. to Russia for processing and storage. “This would turn the country into a waste basket,” Yabloko official Sergei Mitrokhin said at a news conference Wednesday.
As part of the cooperation on nuclear safety, both the United States and Russia would be “maintaining an aggressive timeline” for repatriating spent nuclear fuel from third-party countries, the atomic energy agency’s statement said.
An agency spokesman denied, however, that the cooperation would extend Russia receiving U.S.-made fuel for reprocessing and storage. “U.S. fuel uses a different sort of uranium, which our facilities do not process,” the spokesman said.
Meanwhile, Washington and Moscow look set to embark on a historic field exercise “focused on a search for radioactive materials and the elimination of consequences resulting from a nuclear or radiological emergency,” the agency said. 
The move flows out of the 2005 Bratislava Checklist, a nuclear safety deal signed by Russia and the United States in February 2005.
“It’s the first time that the militaries of both countries will work together on ways to tackle the possible theft of nuclear materials,” said Alexander Pikayev, a Moscow-based nuclear expert.

TITLE: Historic IPO Could Value Rosneft at $73 Bln
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW — Rosneft looked to be heading for a valuation of more than $73 billion as bankers closed the books for bids Wednesday in the biggest Russian initial public offering in history. 
BP, China’s CNPC and Malaysia’s Petronas have reportedly offered to stump up to $5 billion in offers for the shares. Foreign portfolio investors, until now reluctant to take part in a sale seen as too pricey, appear to be moving in at the last minute, banking sources said.
Bankers indicated earlier Wednesday that the IPO was going to fly when they told potential investors they would only take bids at the top end of the price range, at between $7.15 to $7.85 per share. That would value Rosneft at more than $73 billion, a premium on Russia’s biggest oil company, LUKoil.
Rosneft is set to issue up to 14.9 percent of its shares on exchanges in Moscow and London on Friday.
A high valuation would signal success for the Kremlin’s flagship oil firm in a share offering that has been fraught with legal risks and slammed by critics as an attempt to legitimize the state’s bid to wrest back control of the strategic oil sector. Former presidential economic advisor Andrei Illarionov has slammed the sale as “a crime against the Russian people” for bypassing budget and privatization procedures.
Some investors, however, said the IPO presented a chance to buy into the growing might of the Kremlin as Rosneft looks set to secure preferential treatment in future deals. 
“It’s going to be huge,” said Eric Kraus, manager of the Nikitsky Fund. “[President Vladimir] Putin says he wants it to be Russia’s leading oil company and he gets what he wants. They want someone who can go head-to-head with Exxon and Shell.”
In a sign the Kremlin looked to be pressing ahead with that bargain, Interfax on Wednesday evening cited a source close to Rosneft’s board as saying it was in talks to buy Moscow-based conglomerate Sistema’s 25 percent in Bashneft, the oil company of Bashkortostan. 
Last month, Rosneft won control of TNK-BP’s Udmurtneft after China’s Sinopec agreed to buy the unit for it in return for receiving a minority stake. No one at Rosneft or Sistema could be reached for comment on the Interfax report.
Rosneft tripled its production base after it took over the crown jewels of Mikhail Khodorkovsky’s Yukos oil empire, Yuganskneftegaz, following its sale in a forced government auction for a knockdown price.
The acquisition made Rosneft a target of lawsuits by Yukos shareholders as the country’s one-time No. 1 oil major was crushed under the weight of more than $30 billion in back taxes. 
It also propelled Rosneft into a position where it could fend off a takeover bid by state-controlled gas giant Gazprom.
Barclays Capital chairman Hans Jorg Rudloff, a recently appointed director on Rosneft’s board, called the company’s push to take the company public a “validation” of policies to push Russia to become part of the global economic system.
“I think it’s a huge step forward,” Rudloff said by telephone from London on Wednesday. 
“This was not about money. There is a desire to integrate. This is a company that did not have to submit itself to the rules of foreign exchanges. ... Now it will have to adhere to international standards.”
But some investors said the enticing of foreign oil majors to buy up chunks of Rosneft shares — due to low portfolio investor demand — meant that the IPO had nothing to do with global market integration.
Instead, they said, the IPO has only highlighted the growing autocratic rule of the Kremlin as investors consider buying in to curry favor with the authorities.
“Anyone who wants to send a valentine to Vladimir Putin saying, ‘We care,’ is buying,” Kraus said. “This is not a market issue.”
Rosneft’s bankers have been touting the shares as a “ticket” to future oil and gas deals in Russia now that the Kremlin has reasserted control over the energy sector and promised deals to foreign oil majors only on its own terms.
In a sign foreign oil majors’ participation was far from decided, Interfax cited a source close to the deal late Wednesday as saying Rosneft’s bankers would meet with strategic investors Thursday to finalize the allocation of shares. 
Rosneft president Sergei Bogdanchikov has said no single investor can hold more than 2 percent of the company’s shares, giving potential stakeholders no say in decision-making at the company.
CNPC has said it could invest up to $3 billion in the offering. An Indian oil ministry official told Bloomberg on Wednesday that India would make its decision over whether to invest over the next two weeks even though the shares will be listed over the next week. 
The Financial Times cited people close to the deal Wednesday as saying BP would invest $1 billion. In a possible hint it may be raising cash for the issue, BP has said it is selling its stake in a Gulf of Mexico field for $2.2 billion. 
BP spokesman Toby Odone declined to comment on the IPO on Wednesday.
BP’s Russian venture, TNK-BP, has been under fire. It faces more than $2 billion in back-tax bills, and its flagship project to develop the vast Kovykta gas field in eastern Siberia has been stalled for years amid opposition from Gazprom.
Robert Amsterdam, an international lawyer for Khodorkovsky, said BP was a hostage to “Kremlin impunity.”
“BP is not in Siberia. It’s not in a concentration camp. But it is hostage to a Kremlin points system where political points are required to protect your investment as there’s no rule of law,” he said.
Britain’s Financial Services Authority rejected a last-ditch bid by Yukos to thwart the sale on the London Stock Exchange on the grounds that the IPO was tantamount to abetting the sale of stolen goods. 
Yukos received a letter late Tuesday that said the FSA was rejecting its complaint. The letter gave no reason, but said the shares listing in London would go ahead from next Wednesday onward.
A source close to Rosneft said trading would start as planned on Moscow exchanges on Friday, the eve of the Group of Eight summit.
Trading in Rosneft shares can start on Friday once the price has been announced.

TITLE: U.S. TV Show Gives City Starring Role
AUTHOR: By John Whitaker
PUBLISHER: Special to The St. Petersburg Times
TEXT: The flagship U.S. network television show “The Today Show” visited St. Petersburg to broadcast live from Palace Square on Wednesday, offering American viewers a glimpse of the city in anticipation of the G8 summit taking place this weekend. 
The show featured a pre-taped interview in which co-anchor Matt Lauer questioned President Vladimir Putin on democracy, Iran and North Korea. 
Lauer quoted U.S. Vice President Dick Cheney’s remarks in May criticizing the Russian government’s anti-democratic trends. 
“I think your Vice President’s expression there is like his bad shot on his hunting trip,” Putin retorted.
NBCs “The Today Show,” the highest-rated U.S. morning news show for almost ten consecutive years, is a lightweight three-hour hodge-podge of news, travel stories, and special-interest segments, as well as music performances.
NBC rented a Baltika beer tent outside the Winter Palace for the broadcast where a production crew of about 25 people raced around manning audio and visual equipment and coordinating the show’s live link to the program’s regular studio at Rockefeller Plaza in New York.
At 2:50 p.m. local time — 6:50 a.m. in New York — Lauer was standing calmly inside the tent, committing his opening remarks to memory as attendants applied makeup and fitted him with a microphone. 
Moments later, Lauer walked from the tent into Palace Square and in front of the cameras, and proved a magnet for American tourists who began to crowd around the co-anchor and the camera crew. 
From 3 p.m. to 5 p.m., Lauer moved around Palace Square, placing himself in front of backdrops of the Winter Palace and the Alexander Column in bright sunshine. He also took the cameras into the Hermitage museum inside the palace for a brief guided tour.
Lauer also interviewed American and Russian high school students who participated in the Junior Eight (J8) Summit, involving 64 youth delegates from G8 member countries.
Matt Brown, deputy editor of this newspaper, was also a guest on the show.
Toward the end of the broadcast, Lauer sampled Beluga caviar and pancakes. He was offered a large vodka shot, which he downed on air. 
Lauer later spoke to The St. Petersburg Times about meeting Putin, who had kept him waiting for two-and-a-half hours. “He is extremely businesslike, and clearly a student of history,” Lauer said.
He said it was a somewhat challenging interview, in light of the need for translators, since Putin is “not a guy who gives a short answer… He was tough to rein in.”
Asked whether doing a show from Russia was more difficult than from other countries, Lauer said he was the wrong person to ask. 
“It’s made very easy for me; all the groundwork has been done” by NBC producers, he said.
Asked whether Putin seemed either colder or warmer than he expected, Lauer said “I wouldn’t describe him as warm.”
After the show wrapped at 5p.m., electricity was still in the air as a small crowd of American expatriates found themselves trading stories from their experiences in St. Petersburg. Some were here studying abroad or touring through Russia. Others had a Russian spouse and were visiting family.
One man from New Hampshire, who declined to give his name for fear of future difficulty with visas, said five policemen recently stopped his family on Canal Griboyedova to check for “guns or drugs.” The policemen, he said, ended up fleecing him for cash.
“One of them started squeezing my nipples and twisting them,” he said, while one reached into his pocket and grabbed money.
There was “not even a semblance of legality” about it, he said. “They didn’t even inspect my documents.” He said they returned him his credit cards but kept $80 in cash.
One of the police officers, he said, offered an explanation for their conduct: “‘We’re just trying to protect everybody for the G8.’”

TITLE: The Life and Death of a PR Terrorist
AUTHOR: By Thomas de Waal
TEXT: In Shamil Basayev, public relations and terrorist cunning met in a diabolical combination. He cultivated his image as Russia’s public enemy No. 1. His most hideous operations, the seizure of the theater in Moscow in 2002 and of the school in Beslan in 2004, were orchestrated with the aim of terrifying the Russian public, attracting world media attention, embarrassing the Kremlin to the greatest possible degree and winning support from jihadists abroad — and in his own terms he succeeded. The killing of innocents was almost incidental to the design, the matter of whether hostages lived or died being a remote concern for someone whose worldview had no space for the lives of little people.
Basayev was not an Islamist. He came from a fairly pious Chechen family, but grew up in a Soviet world, studying in Moscow, selling computers and speaking Russian. Later on, he allied himself with visiting jihadists, such as the Saudi Emir Khattab, more because he valued their military and financial support than because he signed up fully to their beliefs. I have seen no evidence that he and Khattab made their incursion into Dagestan in 1999 out of a desire to set up a caliphate, as some Russians have claimed. That assumption attributes a long-term vision to a short-term military adventure.
Basayev was not a politician. In his brief and nonsensical tenure as prime minister of Chechnya, he undermined Aslan Maskhadov, his president and rival, and took no interest in matters as boring as the Chechen economy. Although he talked constantly about Chechen independence, he made nothing of the de facto independence granted to the region from 1996 to 1998. Yet he was actually more pragmatic than he liked to let on: I find it impossible to believe that he survived and evaded capture for so long in Chechnya without making deals and non-aggression pacts with his rivals in the pro-Moscow government.
The only time I met Basayev, in 1998, I ran into nothing but cynicism. I had come to Grozny to try to learn something about the fate of the two British hostages, Camilla Carr and Jon Jones. I went to his house and saw the fearsome Khattab standing outside with his black medusa-like locks. The two men were a contrasting pair. While Khattab glowered at me with a terrifying stare, but refused to speak to me, Basayev, in a T-shirt and baseball cap, willingly came out and talked. The reality was far less frightening than the image. He was soft-spoken and did not look me in the eyes as he treated me to his rambling views about world politics, the tragic fate of Russia and the future of Chechnya. The hostages did not interest him. It later transpired that Basayev knew a great deal about who was holding Camilla and Jon, but he taunted me by saying, “The country that invented James Bond should be able to find two missing people in Chechnya.”
Basayev was a permanent warrior. From Nagorno-Karabakh in 1992 (he was one of the last men to leave the besieged Azeri citadel of Shusha before the Armenians came in) to Abkhazia in 1993, Chechnya in 1994, Budyonnovsk in 1995 and Dagestan in 1999, he treated life as an eternal conflict in which no opportunity to fight a battle should be ignored. To that was added an obsession with vengeance against Russia, born out of the Chechen blood revenge culture and, in particular, the deaths of 11 members of his close family in a Russian bombing in 1995.
His fearlessness, cunning, propaganda skills and cruelty made him unique. Although loathed by many Chechens, mainly women, he was a hero to a certain category of Chechen young men, who celebrated his death-defying exploits and outrageous mockery of the Kremlin.
The good news is that Basayev is almost irreplaceable. Two of his kind do not come around twice in a generation. The bad news is that his removal came many years too late — and not just because many hundreds of people might otherwise be alive. The Russian leadership has eliminated or exiled the moderate wing of the Chechen pro-independence movement, which wanted to negotiate and could have brought alienated Chechens back into some kind of political process.
Consider the situation of a young twentysomething Chechen male who has been part of the rebel movement for the last decade. He has seen friends and family members die and quite probably has been wounded or tortured by Russian security forces. He has almost no education. If he watches Russian television he will see reports of his comrades being “destroyed” as if they were vermin.
Now this man has no leaders left. What route does he follow? One route is collaboration. The so-called “Kadyrovtsy” who comprise Chechnya’s pro-Moscow security forces are mainly ex-fighters, taking a rest from the hills and earning a decent salary in a new uniform. Their loyalty is entirely provisional and on the day after their leader, Chechen Prime Minister Ramzan Kadyrov, is replaced or arrested, there is no knowing what they will do next.
The other road is radical Islam. In the last five years, a network of shadowy jamaats, or Islamic groups, has sprung up across the North Caucasus, from Dagestan to Karachayevo-Cherkessia. Its adherents are anonymous pious young men from marginalized social groups. Not for them the theatrics of Basayev; they will operate like tiny ants gnawing away at the fundamentals of Russian power in the region.
Nine years is a long time in the North Caucasus. It is interesting to look at a set of pictures from the inauguration of Aslan Maskhadov as president of Chechnya in February 1997 — a ceremony attended, lest we forget, by officials from more than 40 regions of Russia. In one photograph Maskhadov is seated on the right of Akhmad Kadyrov, then mufti of Chechnya, later the man who would betray him, join up with Vladimir Putin and become a hero of Russia. On Maskhadov’s left are Ruslan Aushev, then president of Ingushetia and Alexander Lebed, the man who signed the agreement with Maskhadov to end the first Chechen war. Nearby is Basayev. Of these men, Aushev is the only one still alive, and he has been removed from power.
The grouping of these men together is a reminder of how different and subtle the politics of the North Caucasus are. Even seeming enemies keep in touch and communicate and do deals. They do not live by the vague categories of “hero,” “terrorist” or “patriot.” They are driven by ties of obligation to large groups of people. But this generation of leaders is all but gone now and we now have the more difficult task of predicting the intentions of a mass of anonymous gray men, who are not interested, as Basayev was, in broadcasting their views far and wide to the outside world.

Thomas de Waal is Caucasus editor at the Institute for War and Peace Reporting in London.

TITLE: St. Petersburg Horror Story
AUTHOR: By Boris Kagarlitsky
TEXT: Everyone knows that official holidays are little different from natural disasters in Russia. The older generation remembers how the Soviet Union prepared for the 1980 summer Olympics in Moscow. Local residents fled the city, where the streets were filled mostly with foreign athletes and KGB agents. In 2003, St. Petersburg’s 300th anniversary showed that Soviet traditions were alive and well. This weekend’s G8 summit will be the next test.
First the airport will be closed. Then railroads and buses to St. Petersburg will cease operating, after which city transport will stop. Those who don’t move in time will be unable to get in or out of the city. St. Petersburg residents face a new blockade of Leningrad.
At the same time, operation “Covering Force” is sweeping across the country. The media reported a series of measures aimed at stopping “unwanted elements” from reaching St. Petersburg after civic nongovernmental organizations decided to hold alternative events during the G8 summit including conferences, seminars and — over the same days as the summit — the Russian Social Forum. Russia is a European country, and St. Petersburg, as everybody knows, is Russia’s most European city, so the forum was allowed to go ahead. The only thing the authorities forgot to warn left-wing activists about was that a nationwide dragnet would be thrown over them ahead of the forum.
The forum will take place, but not everyone will be there. People are being taken off trains and arrested by police and state security bodies across the country. Friendly people are visiting them at home, work or school and advising them sincerely not to travel anywhere, as they will not be allowed back afterward.
Roman Burlak, leader of a left-wing youth group in Krasnoyarsk, was lucky. His passport was stolen and police officers took him off a train and told him that a strange object likely belonging to him had been found in the same car; if it turned out to be an explosive device, he would face five years in prison. But people in Siberia are kindhearted, and Burlak managed to get a hotel room — without a passport — and was advised to spend the money he had saved for the trip on vodka. Burlak sent all his friends an SMS saying that he had no plans to blow up President Vladimir Putin and that they should not wait for him in Petersburg. No explosives were found.
But Alexander Ignatyuk, a philosophy student from Saratov, was less fortunate. He was called to a police station and not released. Following standard procedure, as soon as he arrived he started throwing his weight around, breaking things and swearing. He was sentenced to 15 days and will be sweeping streets in Saratov instead of appearing at the forum. Worst of all is Tatarstan, however, where people have disappeared completely, likely to return only after the summit.
“It’s like a lesson in Russian political geography,” said Ilya Budraitskis, a member of the Marxist group Forward. “The general directive is ‘hold them and don’t release them.’ But every region interprets this in its own way, following local customs and traditions. In some places it’s light-hearted, with a sense of humor. In others it’s more malicious, and in some just stupid.” 
But far from all of the Social Forum’s organizers realize what is going on. After the authorities banned a demonstration, several members of the organizing committee called for a physical confrontation with the authorities. Worse, the declarations were made in the name of the Left Front, although no one obtained the right to speak in its name. It’s easy to predict what will happen next. Clashes between hundreds of activists and thousands of security officers can only serve as PR for two or three self-proclaimed leaders, while the left as a whole will take a battering. Skirmishes between small groups and law enforcement agencies will lead to activists becoming isolated from the general population, which is what the authorities want.
The St. Petersburg summit will be remembered for years and will, in a sense, be a watershed. The authorities have already demonstrated their interpretation of civil rights. The left now has to show how well its understands real life.

Boris Kagarlitsky is the director of the Institute for Globalization Studies.

TITLE: The French connection
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: On the occasion of Bastille Day on Friday, the new director of the French Institute talks about French culture in St. Petersburg.
L’Art de vivre, or the art of living, is the essence of French culture for Helena Perroud, who is in her first year in St. Petersburg as the director of the French Institute. Perroud arrived in town almost at the same time as her husband Martin Bonnichon, head of the France’s Economic Mission in St. Petersburg, formerly an advisor to the French Finance Minister and financial director for the Centre Pompidou in Paris.
A French home, says Perroud, reflects the philosophy embodied in a line from Charles Baudelaire’s poem “L’invitation au voyage”: “LÈ, tout n’est qu’ordre et beautÎ, Luxe, calme et voluptÎ.”
“First of all I mean the precious little nuances that make a difference, and create the atmosphere,” Perroud said. “For instance, it involves anything surrounding the dining experience: fine dishes, flowers, linen... after all, the French believe that cuisine is the eighth art, after the cinema!”
Perroud’s own office overlooking the State Academic Cappella is a compelling illustration of this philosophy, with Nobilis curtains and a stunning replica of Napoleon’s portable leather camp-chair and table, a gift from French company Grange that makes refined copies of museum relics, standing in the far left corner.
Born in Moscow in 1971, Perroud studied at the Lycee Louis le Grand and subsequently at the Sorbonne Paris IV. Prior to her arrival in St. Petersburg, she worked for France’s president, Jacques Chirac, as advisor on education.
Describing St. Petersburg as the Russian city where the Soviet past is perhaps felt the least, Perroud feels that a harmonious architectural landscape affects the mentality of the citizens.
“The city was founded to be a capital, and this place still oozes history and sends out a tangible ‘imperial’ vibe,” she said.
For Perroud, St. Petersburg is a bridge connecting Western Europe and Russia as a whole. She feels the city has a special attraction for Western Europeans.
Martin Bonnichon concurs, calling the city a European Utopia.
“The city was built by the architects, who for various reasons could not fulfill their projects on home soil,” he explains. 
“A good case in point is Auguste de Montferrand, the architect of St. Isaac’s Cathedral.”
“Most cities in Europe already existed when St. Petersburg was being created, and it simply wouldn’t have been possible to do that amount of creative and planning work in any other place,” he added.
In pre-Revolutionary years many Russian aristocrats spoke Russian with a subtle French accent. One hundred years and three political regimes on, French is still taught in St. Petersburg much more widely than in Moscow.
But for a native speaker the standard of French can leave something to be desired. 
“A number of local restaurants print their menus in French but with lots of embarrassing mistakes,” Perroud noted. “I introduced myself to their managers and offered to edit the texts for free but to my surprise nobody seemed in the slightest bit interested.”
“Very few people know that the French Institute in St. Petersburg was originally opened in 1911, then relaunched in 1992,” Perroud said. “It is very exciting to continue this historical tradition.”
“In this respect, we are even older: The first-ever foreign trade mission in the whole history of French diplomacy was established in St. Petersburg in 1896,” Bonnichon adds. 
The city’s noble history aside, the diplomats tangibly miss French courtesy on the banks of Neva River.
“Nobody says hello in our building, people just pass by with indifferent faces, something that would be unthinkable in France,” Perroud said. “One may call it politeness but perhaps it is a reflection of a reserved mentality.”
As the new head of the French Institute, which promotes French language and culture in St. Petersburg, Perroud focuses on cultural trends.
“It is important that the Russians get an idea who and what is currently admired in France, without decade-long delays,” Perroud said, referring to recent visits to the city by the writer Michel Houellebecq, and the composer and pianist Karol Beffa. “I would like to bring as many bright personalities and especially up-and-coming talent as possible.”
When Perroud asks locals what associations with French culture come to mind, she typically gets answers that are alarmingly traditional. 
“Most people mention Gerard Depardieu, the theater Comedie Francaise, Joe Dassin and the Eiffel Tower — which is wonderful but this limited range betrays a lack of exposure to France,” she said. One of Perroud’s upcoming initiatives is a visit by Dominique Paini, director of the Fondation Maeght, the largest private art collection in France. 
“The gallery has a wonderful selection of artworks that would be thrilling to exhibit here, and also new Russian collectors have a lot to learn from Mr Paini and institutions like the Fondation Maeght,” she said.
For the French, St. Petersburg is a neo-romantic ideal, Perroud observes. 
“The city is less known than Venice but has an equally strong romantic charm and flair around it,” she explains. “That makes it easy to convince people to come here.”
To enhance French-Russian interpenetration, Perroud is working on establishing an association of the Friends of St. Petersburg’s French Institute in France. The alliance will count among its members some of France’s most prominent people in culture and the arts, for instance, Christine Albanel, the director of Versailles museum, and Jean-Marie and Chantal Fournier, owners of Salle Gaveau, one of the most famous concert halls in Paris and founders of the Monte Carlo Music Masters classical music competition, Perroud said.
Parents of three daughters, aged 6, 4 and 1 1/2, Perroud and Bonnichon are familiar with what French children appreciate the most. Their favorite book, which they hope to promote to St. Petersburg kids, is invariably Herge’s Adventures of Tintin. The Tintin comic book series, fusing history and humor, tops the list of the most memorable childhood books for a number of French writers. Tintin, the boy reporter, has adventures all over the world, anywhere from Tibet to Soviet Russia.
The 23 Tintin books have sold more than 200 million copies worldwide, in 50 languages, and continue selling at least 2 million copies annually, according to Britain’s newspaper The Guardian. 
Tintin was recently voted the greatest French-language graphic novel of all time in a poll of professionals, editors and critics and the French put it among the top fifty most important books of the 20th century in a recent survey published by French newspaper Le Figaro.

The French Institute in St. Petersburg is located at 20, Moika embankment. The French Economic Mission can be found at 11, Moika embankment.

TITLE: The late show
AUTHOR: By Andrei Vorobei
PUBLISHER: Special to The St. Petersburg Times
TEXT: An exhibition of work by one of the giants of American art is on show at the State Hermitage Museum.
On U.S. Independence Day, the State Hermitage Museum celebrated by opening an exhibition of work by the influential American artist Willem de Kooning. 
Following the large retrospective of Cy Twombly at the museum three years ago, the de Kooning show presents another American superstar of 20th century art and is indisputably the major exhibition in St. Petersburg this summer. The exposition is drawn from American private and public collections and represents the first time that the artist has had a show devoted entirely to his work in Russia. The singularity of the project is that it features only the most recent, rarely shown and still-debated period of the artist’s long and prolific career. In this way, the Russian audience’s familiarization with de Kooning’s heritage will start from the end — that is, from his paintings of the 1980s. 
Although a giant of American art, de Kooning did not become an American resident until the age of 22, in 1926, after leaving Rotterdam in the Netherlands where he was born and where he studied. In 1927 in New York he met Arshile Gorky, who became one of his closest friends and with whom he shared a studio. 
From the 1920s to the 1940s his circle was extended by such poets, artists, and curators as Edwin Denby, John Graham, Stuart Davis and David Smith. He was promoted by such critics as Clement Greenberg and Harold Rosenberg. During the 1940s, he participated in group shows; at one of them he met Jackson Pollock. 
Thereafter he was increasingly identified with the New York School, also known as the Abstract Expressionists, and by the mid-50s he was considered one of its foremost figures. 
De Kooning’s first one-man show, featuring a powerful black-and-white abstract cycle at the New York Egan Gallery in 1948, institutionalized his growing underground reputation and fame among artists. 
All this was despite the fact that with all his biomorphic free-associative compositions and explicit anatomical citations in paintings, he had never completely abandoned figurative principles in his abstract puzzles, contradicting the dominant stylistic canon of the period. 
In the 1940s, de Kooning started his first series of paintings called “Women” — the most celebrated of his works — which became a leitmotif during a life-long career. He exclusively addressed this theme again in the early 1950s, and then, after turning to abstract urban and rural landscapes, he created a new group of “Women” in the 1960s. In the early 1970s he tried sculpture. During the 1960s and 1970s, de Kooning’s work was the subject of a series of exhibitions around the world. 
In the meantime, de Kooning was almost alone among the painters of the New York School to witness the decline of the revolutionary post-war American art movement, which lifted American art to dominance on the international art scene. Such leading figures in painting as Gorky and Pollock died during the 1940s and 1950s — either from suicide or in car crashes. 
The Hermitage’s exhibition presents what was to follow in de Kooning’s career. 
“It seems like a lot of artists, when they get older, they get simpler,” de Kooning said in 1959. This was the case for his own later work, too. Although it continued to involve familiar biomorphic fragments, compared to his grotesque and blatant technique in the “Women” series, with their totemic smiles, his 1980s works look tranquil and pastoral. 
“De Kooning went from violent tumult to a baroque painterly hedonism, and from there, in his last great works, to a radiant, sensuous calm,” as one critic put it. 
The work is colorful, joyful, and full of the vitality of gesture. There are different interpretations of this “haunting and ethereal” period. Some see it as revelation, a therapy for a man who battled with Alzheimer’s disease (he was diagnosed in the 1980s); others suggest that they were simply sold off by enterprising art dealers before they were finished.   

“Willem de Kooning: The Late Paintings” runs from July 4 to Sept. 24, 2006 at the State Hermitage Museum. www.hermitage ru

TITLE: Chernov’s choice
AUTHOR: By Sergey Chernov
TEXT: A 12-hour rock concert by opposition artists scheduled to be held at the Kirov Stadium on Sunday has been shut down by city authorities as part of a general crackdown on anti-G8 and political opposition activists during the G8 summit.
The concert was to be part of the Second Russian Social Forum, a gathering of various opposition groups timed to coincide with the G8 summit and dubbed a “counter-summit.”
The Social Forum is being  held at the Kirov Stadium, notoriously far from central St. Petersburg, while all outside events such as an antiglobalist march on the Petrograd Side with a subsequent meeting near the Avrora cruiser were not granted permission.
“The concert is not happening,” said the Social Forum’s press officer Vladimir Soloveichik by phone on Thursday. “The [city] government banned it late at night yesterday. Everything is canceled.”
Ilya Ponomaryov of the left-wing group Left Front who was in charge of the concert said he has no idea why it was banned.
“The concert was canceled because it was banned by the government of St. Petersburg, but the reason is a mystery to me,” he said by phone on Thursday. “It would have been a high point in the events that we are planning and a gift to the people living in the city who are fed up with this summit. It would have provided some relief from the nervous atmosphere present in the city these days.”
Ponomaryov said a popular band was to headline the event but refused to name it.
“I don’t want to say who because of the ban,” he said. “The [star band] was expecting that the concert would be canceled which is why we did not advertise it for a long time. We decided to start putting up the posters around the city if everything was OK on July 14.”
Other bands scheduled to take part were such left-wing acts as Sixtynine and Echelon and the less politically outspoken Gagarin Band, Rtut, Dekabr and Aloe.
However, although Ponomaryov admitted that the hugely popular ska-punk band Leningrad was one of the acts contacted, rumors about the band taking part were groundless, according to drummer Denis Kuptsov.
“It’s not true,” said Kuptsov this week. “I have no idea about this concert. We are on holiday now and there are no concerts planned in the near future.”
The next officially announced Leningrad concert is due on July 23 at the Emmaus Festival. 
Yevgeny Fyodorov of Tequilajazzz said his band was not approached to take part, but he would have jumped at the chance. 
“We were not approached, but I would have been happy to perform, because this would comply with our political stance,” he said. “I am not surprised that it was canceled. Just look at what is going on in the city; I was already stopped by police twice today on the suspicion of being a skinhead, right on Petrograd side where I live,” said the famously bald Fyodorov, 40.

TITLE: Korea Talks Fall Apart
AUTHOR: By Jack Kim
PUBLISHER: Reuters
TEXT: PUSAN, South Korea — Efforts to bring North Korea back to disarmament talks were in tatters on Thursday as Pyongyang stormed out of a meeting with the South and a senior U.S. diplomat left the region after a week of shuttle diplomacy.
The deadlock threw the spotlight back on wrangling over a UN resolution censuring North Korea for its July 5 missile tests, which has pitted Japan against China and Russia.
Kyodo news agency reported that Japan was now prepared to work on an alternative Security Council resolution sponsored by Moscow and Beijing that urges North Korea to suspend its nuclear programs but avoids the mandatory sanctions Tokyo has sought. 
“What is important is to adopt a binding resolution,” the agency quoted an official as saying on condition of anonymity.
Tension between the two Koreas erupted at bilateral ministerial talks in the South Korean city of Pusan, where the Pyongyang's delegation parried complaints about the missile tests and focused instead on economic cooperation and requests for aid.
“The South side will pay a price before the nation for causing the collapse of the ministerial talks and bringing a collapse of North-South relations that is unforeseeable now,” the North Koreans said in a statement before leaving for the airport, a day before the meeting was due to end.
The North Koreans demanded that the South stop joint military drills with the United States due next year, saying it was ready to protect South Korea with its 1.2-million-strong armed forces.
That provoked an unusually biting reply from South Korean Unification Minister Lee Jong-seok that echoed the rhetoric of the years before Seoul's determined policy of rapprochement.
“Who in the South asked you to protect our safety?” Lee told Kwon on Tuesday, according to a South Korean official. “It would help our safety for the North not to fire missiles or develop a nuclear program.”
The South said the North could also forget about any more aid until it returns to separate talks on its nuclear weapons.
China and the United States have also urged the reclusive communist state to return to six-country talks with South Korea, Japan and Russia on winding up its nuclear arms program. 
The negotiations stalled last November because Pyongyang objected to U.S. financial sanctions based on accusations North Korea counterfeited U.S. currency and trafficked drugs.
U.S. Assistant Secretary of State Christopher Hill said a “friendship delegation” sent to Pyongyang by Beijing, the closest North Korea has to an ally, had failed to achieve a breakthrough.
“So far they don't seem to be interested in listening, much less doing anything,” he told reporters before leaving Beijing for Washington. “I think the Chinese are as baffled as we are.”
Hill said he was confident the United Nations would send a “very strong, very clear message” to Pyongyang over the barrage of missiles it test-fired last week.
However, Tokyo said it was still seeking a Security Council vote on a resolution that would impose sanctions for the North Korean missiles, which splashed into the sea off its west coast.
“We can't be twisted around by any attempts to buy time to water down the strong resolve of the international community over the firing of the missiles,” Chief Cabinet Secretary Shinzo Abe said.

TITLE: Israel Blasts Beruit Airport in Intense Attack
PUBLISHER: The Associated Press
TEXT: BEIRUT, Lebanon  — Israel intensified its  attacks  against Lebanon on Thursday, blasting Beirut’s international airport and the southern part of the country in its heaviest air campaign against its neighbor in 24 years. More than two dozen civilians were killed, officials said. 
The strikes on the airport, which damaged three runways, came hours before Israel said it was imposing an air and naval blockade on Lebanon to cut off supply routes to Lebanese militants.
The airport, located in the Hezbollah-controlled southern suburbs of Beirut, was closed after the attacks and flights were diverted to nearby Cyprus. It was the first time since Israel’s 1982 invasion of Lebanon and occupation of Beirut that the airport was hit by Israel.
Israel also fired a missile at the building housing the studios of Hezbollah’s Al-Manar TV in the southern suburbs of Beirut on Thursday morning, the channel’s press officer Ibrahim Farhat told The Associated Press. One person was hurt, but the station continued to broadcast.
Overnight Israeli attacks in southern Lebanon, meanwhile, killed 26 civilians and wounded dozens more, Lebanese security officials said. 
A family of 10 and another family of seven were killed in their homes in the village of Dweir near Nabatiyeh, the officials said, speaking on condition of anonymity as they were not authorized to speak to the press.
Later Thursday, Lebanese guerrillas fired volleys of rockets at northern Israel, killing an Israeli woman in her home in the border town of Nahariya, officials said. Five people were wounded.
The strikes followed a cross-border raid by Hezbollah guerrillas Wednesday during which two Israeli soldiers were captured. The militants demanded the release of Israeli-held prisoners, but Israel responded by bombing Lebanon and sending ground troops across the border for the first time in six years.
Eight Israeli soldiers and three Lebanese were killed in fighting Wednesday. Israeli Prime Minister Ehud Olmert called the Hezbollah raid an “act of war” by Lebanon and threatened “very, very, very painful” retaliation. 
The Cabinet, meeting Wednesday in the wake of the military’s highest daily death toll in four years, decided to continue the army operation and call on the international community to disarm Hezbollah, according to participants.
On Thursday, Israeli Foreign Ministry spokesman Mark Regev said the offensive in Lebanon has far-reaching objectives, including pushing Hezbollah militants away from the Israeli border and eventually sidelining the group altogether.

TITLE: France May Propose UN Action if Iran Says ‘No’
PUBLISHER: Reuters
TEXT: TEHRAN, Iran — The Iranian president said on Thursday Iran would not abandon its right to nuclear technology in a defiant statement after Tehran’s case was referred back to the UN Security Council in its atomic dispute with the West. 
Five permanent Security Council members, the United States, France, Britain, Russia, China, plus Germany have backed a nuclear package aimed at ending the standoff but on Wednesday asked the council to intervene after Tehran failed to reply.
“Our answer to the P5+1 package is clear, the Iranian nation abides by international laws and regulations but will not abandon its obvious right to obtain nuclear technology,” President Mahmoud Ahmadinejad was quoted as saying by state TV.
He repeated that Iran would give its final response to the package by August 22, despite pressure for a swifter response.
The package offers Iran economic and diplomatic incentives if it suspends uranium enrichment, a process the West believes Iran is using to develop an atomic bomb. Iran has refused to halt the work, saying it has the right to carry it out.
France said world powers would propose a UN resolution over Iran’s nuclear activities that could include sanctions if Iran does not give them a positive response by mid-August.
French Foreign Minister Philippe Douste-Blazy said this would be part of a two-stage process.
“The first is a (UN) resolution as soon as possible, in a few days, to demand the suspension of all sensitive nuclear activity by Iran,” he told Europe 1 radio.
“If Iran responds with a ‘no’ in mid-August, we will propose a resolution under Chapter VII of the United Nations charter ... notably article 41, which proposes a set of negative measures, including economic ones,” he said. 
Article 41 allows for economic sanctions but does not endorse military action.
Ahmadinejad said Iran was ready for talks but he also repeated threats to review cooperation with the UN watchdog, the International Atomic Energy Agency (IAEA), and review adherence to the nuclear Non-Proliferation Treaty.

TITLE: In the East, Bush Hails Ties With Germany
PUBLISHER: The Associated Press
TEXT: STRALSUND, Germany — President Bush celebrated a new era of relatively tension-free U.S.-German relations on Thursday, despite continuing controversy over American detentions at the Guantanamo Bay prison.
“I bring a message from the American people: we’re honored to call the German people friends and allies,” Bush told a crowd of several hundred gathered in this northern port city’s old market square. “We share common values and common interests. We want to work together to keep the peace. We want to work together to promote freedom. There’s so much we can do working together.”
German Chancellor Angela Merkel said she wanted Bush to come to her home district in the formerly communist Eastern Bloc region to thank the United States for helping Germany to reunify and to display the area’s successes and continuing challenges.
“This is why I am also delighted to have you here, to show you here in my constituency what it means when people try to take their own fate, their own future into their own hands and try to turn it to something positive,” Merkel said.
She presented Bush with a small barrel of local herring — a gift the president said, laughing, both surprised and pleased him.
A military band played marches in the cobblestoned city center — towered by St. Nicholas Church and a town hall dating to medieval times — where most of the president’s events for the day were taking place. In the evening, Bush’s visit to Merkel’s old neighborhood was wrapping up with a wild boar barbeque in the small town of Trinwillershagen.
Though anti-Bush protesters gathered, thousands of police were keeping most far from the areas Bush will tour.

TITLE: Vanuatu is The ‘Happiest’ Place
PUBLISHER: Agence France Presse
TEXT: LONDON — The tiny South Pacific Ocean archipelago of Vanuatu is the happiest country on Earth, according to a study published measuring people’s wellbeing and their impact on the environment. 
Colombia, Costa Rica, Dominica and Panama complete the top five in the Happy Planet Index, compiled by the British think-tank New Economics Foundation.
The index combines life satisfaction, life expectancy and environmental footprint — the amount of land required to sustain the population and absorb its energy consumption.
Zimbabwe came bottom of the 178 countries ranked, below second-worst performer Swaziland, Burundi, the Democratic Republic of Congo and Ukraine. 
Italy came out better in 66th place, ahead of Germany (81), Japan (95), Britain (108), Canada (111), France (129), the United States (150) and Russia, in lowly 172nd place.

TITLE: Zidane Answers Critics
AUTHOR: The Associated Press
TEXT: PARIS — The Zinedine Zidane mystery is not quite solved yet. 
In his first, highly awaited comments since the World Cup final, the French soccer star only partly explained what caused him to react in fury and head-butt an Italian opponent: repeated harsh insults about his mother and sister. 
But Zidane didn’t go into specifics about what Marco Materazzi said. Materazzi swears he never insulted Zidane’s mother. And FIFA is still investigating. 
Relaxed and soft-spoken, Zidane repeatedly apologized to fans — especially to children — in several interviews late Wednesday. 
“Above all, I’m human,” he said. 
The 34-year-old midfielder said he didn’t regret the abrupt, violent outburst Sunday that marked the end of his 18-year professional career. 
“I tell myself that if things happened this way, it’s because somewhere up there it was decided that way,” he told TF1 television. “And I don’t regret anything that happened, I accept it.” 
Zidane sidestepped questions about exactly what Materazzi said. 
“I would rather have taken a punch in the jaw than have heard that,” he told the Canal Plus channel, stressing that Materazzi’s language was “very harsh,” and that he repeated the insults several times. 
Zidane and Materazzi exchanged words after Italy broke up a French attack in extra time. Seconds later, Zidane lowered his head and rammed Materazzi in the chest, knocking him to the ground. Zidane was sent off, reducing France to 10 men. Italy went on to win in a penalty shootout with Zidane — an excellent penalty-taker — in the locker room. 
The act of aggression marred the end of the World Cup, with many warning it would tarnish Zidane’s formidable legacy. Zidane retired after the tournament, and he said Wednesday his decision was definitive. 
The France captain stressed that he felt no regret about his outburst “because that would mean [Materazzi] was right to say all that.” 
“My act is not forgivable,” Zidane said. “But they must also punish the true guilty party, and the guilty party is the one who provokes.” 
For days, sports fans around the world have been riveted by the question: What could Materazzi have said to set Zidane off in the last few moments of his career? Media from Brazil to Britain hired lip readers to try to figure it out, then came up with different answers. 
Materazzi has acknowledged he insulted Zidane, without giving specifics. At nearly the same moment Zidane was on TV, excerpts from an interview that Materazzi gave were posted on an Italian paper’s web site. 
“I didn’t say anything to him about racism, religion or politics,” Materazzi told the Gazzetta dello Sport. “I didn’t talk about his mother, either. I lost my mother when I was 15 and even now I still get emotional talking about her.” 
Zidane “has always been my hero,” Materazzi said. “I admire him a lot.” 
Despite the head-butt, journalists selected Zidane for the Golden Ball award for best player at the World Cup.

TITLE: CSKA Stays Top of Russian League; Kazan Disappoints
PUBLISHER: Agence France Presse
TEXT: MOSCOW — Russia’s reigning champion CSKA Moscow kept its place on top of the Premier League after Kazan blew a chance to move into first place.
Kazan is tied with third-placed Nalchik on 21 points after being held to a 1-1 home draw by Torpedo Moscow on Wednesday, and that result left CSKA, which suffered an unexpected 2-1 defeat at the hands of minnows Rostov on Monday, top of the table with 22 points from 11 matches.
Kazan were trailing after Torpedo’s Polish striker Grzegorz Piechna put his side into the lead in the fifth minute.
But the hosts responded well, pinning their opponents back and leveled seven minutes later through midfielder Dmitry Vasiliyev.
In the second half Kazan dominated but were unable to score a winner as Torpedo produced a brave defensive display.
CSKA was in complete command against Rostov but lacked accuracy and missed a hatful of chances before Alexander Dantsev put the visitors ahead in the 14th minute.
CSKA’s Brazilian striker Jo leveled before the break when he converted a penalty for his 13th goal of the season.
However, Rostov striker Spartak Gogniyev stunned CSKA as he scored the winning goal from close range with 28 minutes remaining.
Russia’s nine-time champion Spartak Moscow, runner-up last year, remained in fourth place after a 3-1 home win against rock bottom Yaroslavl.
Skipper Yegor Titov put Spartak 1-0 up after 23 minutes with a close-range header from Brazilian midfielder Santos Mozart’s corner.
Forward Roman Pavlyuchenko made it 2-0 when he fired into the top left-hand corner from the edge of the box after a breakaway.
The visitors’ captain Alexander Shirko scored for Yaroslavl nine minutes after the restart, but Spartak’s Dutch star Quincy Owusu-Abeyie restored his side’s two-goal lead with nine minutes remaining.

The Russian Football Union (RFU) on Wednesday signed a multi-million dollar contract with Rosgosstrakh, the country’s largest insurance company. 
“This is not just a sponsorship deal,” RFU chief Vitaly Mutko said, referring to a five-year contract, worth more than $50 million. “Rosgosstrakh also becomes our partner as we pursue our goal of further developing Russian football.” 
Mutko said the RFU wanted to sign a similar deal with a number of Russian companies in the near future. 
Russian soccer enjoys the backing of several wealthy businessmen, particularly oil tycoon Roman Abramovich. 
The Chelsea owner was responsible for luring highly successful Dutch coach Guus Hiddink to Russia. 
Mutko said Hiddink should arrive in Moscow early next week to begin as Russia coach after leading Australia at the World Cup. 
Hiddink signed a 2-1/2-year contract with the RFU in April.

TITLE: Russian Success in Sweden
PUBLISHER: The Associated Press
TEXT: BASTAD, Sweden —Tommy Robredo of Spain and Yevgeny Korolev of Russia won second-round matches in straight sets Thursday to set up a quarterfinal meeting at the Swedish Open. 
Robredo, a semifinalist four times during six trips to southern Sweden, breezed past Germany’s Alexander Waske 6-3, 6-1 on the slow clay court. 
Korolev, a qualifier, beat Luis Horna of Peru 6-2 6-3. 
Robredo, who won the Hamburg Masters in May for the biggest title of his career, did not lose a point on his first serve in the opening set. 
The second-seeded Spaniard broke Waske’s serve at the start of the second set and easily held his own the rest of the way. 
Korolev played his fifth match in six days. He won three matches in the qualifying event last weekend to get into the main draw. The 18-year-old Russian has only lost one set so far. 
Defending Swedish Open champion Rafael Nadal withdrew from the tournament last week. 
The second-ranked Spaniard, who lost the Wimbledon final to Federer, has won a record 60 straight matches on clay.

TITLE: Overnight Sensation Xavier Carter To Meet Olympic Champ in Rome
PUBLISHER: Reuters
TEXT: ROME — Athletics’ newest star Xavier Carter takes his first steps on the big stage when he faces Olympic champion Jeremy Wariner in the 400 meters at Rome’s Golden Gala meeting on Friday. 
Carter was virtually unknown in Europe until Tuesday when he sped round the outside lane in Lausanne to win the 200 meters in a time of 19.63 seconds — the second-fastest ever behind Michael Johnson’s 1996 world record of 19.32 seconds. 
Carter, a 20-year-old student from Louisiana State University, had picked up his first passport only two weeks earlier, having put his career as an American footballer on hold to concentrate on athletics. 
His run in Lausanne slashed almost a third of a second off his previous best, a performance that left him as surprised as everybody else. 
“I still don’t know much about athletics,” Carter was quoted as saying in La Gazzetta dello Sport on Thursday. 
“Until a few days ago my experience in this world was limited to school and university races. 
“The most important thing for me was that I improved my time, but I know I can go faster.”