Golf: US 2014 Ryder Cup captain Watson wants Tiger on team

NEW YORK: Eight-time major golf champion Tom Watson, named on Thursday to be captain of the 2014 US Ryder Cup squad by the PGA of America, said that he sees Tiger Woods being on that team.

Citing the 14-time major champion's hunger for victory, Watson said a healthy Woods would be a certainty on the 12-man US lineup by virtue of a captain's selection even if he is unable to qualify on points.

"I want him on my team," Watson said. "Tiger is maybe the best player in history. If he's not on the team, he's going to be number one in my picks."

Watson, who at 63 is the oldest captain in US Ryder Cup history, had been critical of Woods in the aftermath of his infamous sex scandal.

But Watson said he admires Woods for his determination to win and Woods was among the first to applaud Watson's appointment.

"I would like to congratulate Tom Watson on his selection as Ryder Cup captain," Woods said in a statement. "I think he's a really good choice. Tom knows what it takes to win and that's our ultimate goal.

"I hope I have the privilege of joining him on the 2014 United States team."

Watson, a five-time British Open champion, was selected in hopes of ending an American slump in the biennial golf showdown. Europeans have won five of the past six Ryder Cup matches, including at Medinah near Chicago last September.

"It's going to be a great journey. I hope that we will change the tide," Watson said.

The prior US Ryder Cup captain age mark belonged to Sam Snead, who was 57 when he guided the Americans in 1969.

Watson called the tension of the Ryder Cup as huge as any golf event.

"The pressure is incredibly strong," he said. "The pressure of playing in the Ryder Cup is greater or as great as in any event. My job is to help them deal with that pressure.

"I've lived for that pressure and lived underneath that pressure all my career."

Watson will be 65 when the next Ryder Cup is contested in 2014 at Gleneagles in Scotland. Having won his first major title in Scotland at Carnoustie in 1975 and taken four major crowns on Scottish soil, Watson said he knew he wouldn't have the crowd in 2014.

"They are going to be cheering against me," he said.

Watson first served as the US captain in 1993, the last time a US squad won a Ryder Cup on European soil.

"I really wanted the challenge to do it again," Watson said. "I was waiting for about 20 years to get the call.

"I loved it the first time. It's just a great honor to be able to do it again.

"This time we need 14 1/2 points."

Watson becomes the first repeat US Ryder Cup captain since 1987, when Jack Nicklaus guided the Americans at his Muirfield Village home course but the Americans suffered their first defeat on US soil.

Brandt Snedeker, like Woods a member of this year's losing squad, backed Watson as well.

"Obviously they were looking outside the box, given our recent failures," Snedeker said in a posting on the tour website.

"They wanted to get a guy who has had success and commands respect. I think that's why they went this way: to get the US to rally around him as a way to rejuvenate the American side.

"Tom is one of the best competitors of all time. He's going to bring that fire and unwillingness to lose and mental strength that has defined his career."

Saying he hoped to bring the "Watson luck" to the US side, Watson said his role was inspirational and informational more than motivational.

"They don't need to be motivated. My job is to maybe inspire a little bit," Watson said. "The most important thing is to be there to help them out."

Among the lessons Watson cited was arriving early to allow bodies time to adjust to time changes before tinkering with stroke mechanics.

PGA of America president Ted Bishop said there was no problem selecting Watson despite him not having played full-time on the PGA circuit in 14 years.

"We're just tired of losing Ryder Cups," Bishop said, explaining that Watson's appointment was in large part due to that "weariness".

Watson, who won 39 PGA titles - the last at the 1998 Colonial, had no worries about age differences, citing contact with several top players and his playing in a few events alongside many of today's stars, including the Masters and British Open.

"I deflect that very simply by saying we play the same game," Watson said.

-AFP/ac

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Samsung knocks Apple maps in Sydney marketing stunt

Samsung is apparently not keen on letting Apple's recent Maps mishap in Australia go unnoticed, and is poking fun of its rival in downtown Sydney today.

CNET Australia has snapped pics of a little guerrilla marketing by Samsung featuring a muddied-up vehicle with a tent and other camping supplies. Next to it is a sign that says, "Oops, should have gotten a Samsung Galaxy S III. Get navigation you can trust."

The lost vehicle and signage, of course, are referring to recent incidences of people getting stranded in a wilderness area around Australia's Murray-Sunset National Park instead of the town of Mildura after searching for the latter in Apple's Maps software.

Over the weekend, local Australian police put out a notice encouraging iPhone owners to rely instead on paper maps or an alternate GPS system. The issue has since been fixed and attributed, in part, to a double listing in the national GPS database.

Samsung's poke at Apple is just its most recent marketing attack. The company has put considerable resources into a TV advertising campaign knocking Apple's devices as under-featured, and those who shop for it as out of touch.

The two companies continue to duke it out in the courtroom, with some of the fallout from the August verdict -- which found Samsung had infringed Apple's patents involving the iPhone and
iPad -- to be determined over the next few weeks.

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Police: Ore. mall shooter didn't know his victims

PORTLAND, Ore. A gunman who opened fire on shoppers at a Portland mall had no connection to the two people he fatally shot and wanted to kill as many people as possible, police said Wednesday.

The shooter, who wore a mask, was a young man who fired randomly, investigators said. The only person wounded was a young woman, Kristina Shevchenko, whose age could not be confirmed. She was in serious condition at Oregon Health and Science University Hospital in Portland.

Police said they had tentatively identified the gunman but would not release his name or give any information on a possible motive.

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Ore. mall chaos: Gunman kills two, then shoots himself

"It really was a killing of total strangers, to my knowledge at this point and time. He was really trying to kill as many people as possible," Clackamas County Sheriff Craig Roberts told ABC's "Good Morning America."

People at the mall were heroic in helping get shoppers out of the building, including off-duty emergency room nurses who rendered aid, Roberts said.

In response to previous mass shootings elsewhere, the first arriving officers were trained to form teams and go inside instead of waiting for SWAT. Employees at the mall also received training to handle such a situation.

CBS News senior correspondent John Miller, a former deputy director of the FBI, said it was "pretty miraculous" that more people were not shot during the incident.

"He fired 'countless rounds' ... he reloaded," Miller said, before adding, "Given the amount of rounds he fired, he hit a fairly small number of people, so this could have been much worse."

The first 911 call came at 3:29 p.m. Tuesday. The first officers arrived a minute later. By 3:51 p.m., all the victims and the gunman and rifle had been found. Four SWAT teams spent hours clearing the 1.4 million square-foot mall, leaving shoppers and workers to hide in fear.

The mall Santa, Brance Wilson, was waiting for the next child's Christmas wish when shots rang out, causing the mall to erupt into chaos.

About to invite a child to hop onto his lap, Wilson instead dove for the floor and kept his head down as he heard shots being fired upstairs in the mall.

"I heard two shots and got out of the chair. I thought a red suit was a pretty good target," said Wilson, 68. Families waiting for Santa scattered. More shots followed, and Wilson crept away for better cover.

Witnesses said the gunman fired several times near the mall food court until the rifle jammed and he dropped a magazine onto the floor, then ran into the Macy's store.

Witnesses heard the gunman saying, "I am the shooter," as he fired rounds from a semi-automatic rifle inside the Clackamas Town Center, a popular suburban mall several miles from downtown Portland.

Some were close enough to the shooter to feel the percussion of his gun.

Police rapid-response teams came into the mall with guns drawn, telling everyone to leave. Shoppers and mall employees who were hiding stayed in touch with loved ones with cellphones and texting.

Kayla Sprint, 18, was interviewing for a job at a clothing store when she heard shots.

"We heard people running back here screaming, yelling '911,'" she told The Associated Press.

Sprint barricaded herself in the store's back room until the coast was clear.

Jason DeCosta, a manager of a window-tinting company that has a display on the mall's ground floor, said when he arrived to relieve his co-worker, he heard shots ring out upstairs.

DeCosta ran up an escalator, past people who had dropped for cover and glass littering the floor.

"I figure if he's shooting a gun, he's gonna run out of bullets," DeCosta said, "and I'm gonna take him."

DeCosta said when he got to the food court, "I saw a gentleman face down, obviously shot in the head."

"A lot of blood," DeCosta said. "You could tell there was nothing you could do for him."

He said he also saw a woman on the floor who had been shot in the chest.

Austin Patty, 20, who works at Macy's, said he saw a man in a white mask carrying a rifle and wearing a bulletproof vest. There was a series of rapid-fire shots in short succession as Christmas music played. Patty said he dove for the floor and then ran.

His Macy's co-worker, Pam Moore, told the AP the gunman was short, with dark hair.

Kira Rowland told KGW-TV that she was shopping at Macy's with her infant son when the shots started.

"All of a sudden you hear two shots, which sounded like balloons popping," Rowland told the station. "Everybody got on the ground. I grabbed the baby from the stroller and got on the ground."

Rowland said she heard people screaming and crying.

"I put the baby back in the stroller and ran," Rowland said.

Kaelynn Keelin was working two stores down from Macy's when the gunfire began. She watched windows of another store get shot out. She and her co-workers ran to get customers inside their own store to take shelter.

"If we would have run out, we would have run right into it," she said.

Shaun Wik, 20, was Christmas shopping with his girlfriend and opened a fortune cookie at the food court. Inside was written: "Live for today. Remember yesterday. Think of tomorrow."

As he read it, he heard three shots. He heard a man he believes was the gunman shout, "Get down!" but Wik and his girlfriend ran. He heard seven or eight more shots. He didn't turn around.

"If I had looked back, I might not be standing here," Wik said. "I might have been one of the ones who got hit."

Clackamas Town Center is one of the Portland area's biggest and busiest malls, with 185 stores and a 20-screen movie theater.

Holli Bautista, 28, was shopping at Macy's for a Christmas dress for her daughter when she heard pops that sounded like firecrackers. "I heard people running and screaming and saying 'Get out, there's somebody shooting,'" she told the AP.

She said hundreds of shoppers and mall employees started running, and she and dozens of other people were trying to escape through a department store exit.

Tiffany Turgetto and her husband were leaving Macy's through the first floor when they heard gunshots coming from the second floor of the mall. They were able to leave quickly through a Barnes and Noble bookstore before the police locked down the mall.

"I had left my phone at home. I was telling people to call 911. Surprisingly, people are around me, no one was calling 911. I think people were in shock," she said.

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Oregon Mall Shooting Hero Gets Customer to Safety

A store employee at the Clackamas Town Center mall used his knowledge of the shopping complex to hustle a customer out of the building during Tuesday's shooting rampage and then twice went back inside to guide other shoppers to exits and safety.

Allan Fonseca, who works at Lancome counter in Macy's and was waiting on Jocelyn Lay when they heard shots fired about 3:30 p.m. Thinking quickly, Fonseca got her behind the counter to hide.

"We both just looked at each other and knew that this was a serious situation and it was a gunman and we both just dove down below the Lancome counter there for a little protection," Lay told "Good Morning America." "And the gunfire just kept going off."

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Lay said that she began praying for the Lord to protect her and the other shoppers in the mall. She said Fonseca, as a store employee, knew exactly what to do, and she credits him as her hero.

"He said that we needed to evacuate, and he took me by the hand and took me down the escalator and out to safety," she said.

Once Fonseca was sure that she was safe, he then turned to her and said, "I'm going to go back and help other people."

Fonseca said that because he is familiar with the exits in the mall, he felt that he would be able to help shoppers escape the gunfire.

"I felt that if I knew how to get out of the mall and out to safety then I should share that knowledge with everyone else, like the shoppers that don't come here regularly and don't know all of the exits," he said. "So I decided to go back up because I wanted to see if there was anybody in panic or didn't know where to do."

Fonseca returned to the mall and evacuated the lower level of the Macy's store, and then went back up to the "shooting floor" to look for his co-workers. Lay says she's not sure she would have done if he hadn't been there to get her out of harm's way.

"I probably just would have stayed there and probably would have had a little more fear because it's one of those situations where you've seen in previous shootings, the gunman keep shooting and keep looking for different people," she said. "I would have huddled there and hoped and prayed."

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North Korea launches rocket , raising nuclear arms stakes

SEOUL/TOKYO (Reuters) - North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to opponents.

The rocket, which North Korea says put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far away as the continental United States.

"The satellite has entered the planned orbit," a North Korean television news reader clad in traditional Korean garb announced, after which the station played patriotic songs with the lyrics "Chosun (Korea) does what it says".

The rocket was launched just before 10 a.m. (0100 GMT), according to defense officials in South Korea and Japan, and was more successful than a rocket launched in April that flew for less than two minutes.

The North American Aerospace Defense Command (NORAD) said that it "deployed an object that appeared to achieve orbit", the first time an independent body has verified North Korean claims.

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the U.N. Security Council to stiffen sanctions that it originally imposed in 2006 after the North's first nuclear test.

North Korea is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state's "military first" programs put in place by his late father, Kim Jong-Il.

North Korea hailed the launch as celebrating the prowess of all three members of the Kim family to rule since it was founded in 1948.

"At a time when great yearnings and reverence for Kim Jong-il pervade the whole country, its scientists and technicians brilliantly carried out his behests to launch a scientific and technological satellite in 2012, the year marking the 100th birth anniversary of President Kim Il Sung," its KCNA news agency said. Kim Il Sung, the current leader's grandfather, was North Korea's first leader.

The United States condemned the launch as "provocative" and a breach of U.N. rules, while Japan's U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely from the Security Council as China, the North's only major ally, will oppose them.

"The international community must work in a concerted fashion to send North Korea a clear message that its violations of United Nations Security Council resolutions have consequences," the White House said in a statement.

U.S. intelligence has linked North Korea with missile shipments to Iran. Newspapers in Japan and South Korea have reported that Iranian observers were in the North for the launch, something Iran has denied.

Japan's likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on Sunday and who is known as a hawk on North Korea, called on the United Nations to adopt a resolution "strongly criticizing" Pyongyang.

A North Korean Foreign Ministry spokesman reiterated that the rocket was a "peaceful project".

"The attempt to see our satellite launch as a long-range missile launch for military purposes comes from hostile perception that tries to designate us a cause for security tension," KCNA cited the spokesman as saying.

"STUMBLING BLOCK"

China had expressed "deep concern" prior to the launch which was announced a day after a top politburo member, representing new Chinese leader Xi Jinping, met Kim Jong-un in Pyongyang.

On Wednesday, its tone was measured, regretting the launch but calling for restraint on any counter-measures, in line with a policy of effectively vetoing tougher sanctions.

"China believes the Security Council's response should be cautious and moderate, protect the overall peaceful and stable situation on the Korean peninsula, and avoid an escalation," Chinese Foreign Ministry spokesman Hong Lei told journalists.

Bruce Klingner, a Korea expert at the Heritage Foundation, said: "China has been the stumbling block to firmer U.N. action and we'll have to see if the new leadership is any different than its predecessors."

A senior adviser to South Korea's president said last week it was unlikely there would be action from the United Nations and Seoul would expect its allies to tighten sanctions unilaterally.

Kim Jong-un, believed to be 29 years old, took power when his father died on December 17 last year and experts believe the launch was intended to commemorate the first anniversary of his death. The April launch was timed for the centennial of the birth of Kim Il Sung.

Wednesday's success puts the North ahead of the South which has not managed to get a rocket off the ground.

"This is a considerable boost in establishing the rule of Kim Jong-un," said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of people are malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its workers overseas.

Many of its 22 million people need handouts from defectors, who have escaped to South Korea, for basic medicines.

Given the puny size of its economy - per capita income is less than $2,000 a year - one of the few ways the North can attract world attention is by emphasizing its military threat.

It wants the United States to resume aid and to recognize it diplomatically, although the April launch scuppered a planned food deal.

The North is believed to be some years away from developing a functioning nuclear warhead although it may have enough plutonium for about half a dozen nuclear bombs, according to nuclear experts.

It has also been enriching uranium, which would give it a second path to nuclear weapons as it sits on big natural uranium reserves.

"A successful launch puts North Korea closer to the capability to deploy a weaponized missile," said Denny Roy, a senior fellow at the East-West Center in Hawaii.

"But this would still require fitting a weapon to the missile and ensuring a reasonable degree of accuracy. The North Koreans probably do not yet have a nuclear weapon small enough for a missile to carry."

The North says its work is part of a civil nuclear program although it has also boasted of it being a "nuclear weapons power".

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; David Alexander, Matt Spetalnick and Paul Eckert in WASHINGTON; Linda Sieg in TOKYO, Sui-Lee Wee and Michael Martina in BEIJING,; Rosmarie Francisco in MANILA; Writing by David Chance; Editing by Raju Gopalakrishnan and Robert Birsel)

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UN court sentences Srebrenica commander to life for genocide

THE HAGUE: The UN's Yugoslav war crimes court found Bosnian Serb general Zdravko Tolimir guilty of genocide for his role in the 1995 Srebrenica massacre, Europe's worst atrocity since World War II, and sentenced him to life in jail.

"The majority of the court finds you guilty" of crimes including genocide, judge Christoph Flugge told the Hague-based International Criminal Tribunal for the former Yugoslavia.

"Zdravko Tolimir, you are hereby sentenced to life imprisonment," the judge then told the gaunt former commander, who crossed himself three times before the verdict was handed down.

The majority of the court's judges agreed with prosecutors who had asked for a life sentence, saying Tolimir, now 64, was involved in "massive" crimes committed at the Srebrenica and Zepa enclaves in July 1995.

They said they were "of a massive scale, severe in (their) intensity and devastating in (their) effect."

Judges said Tolimir -- whom they called the "right-hand man and eyes and ears of (Bosnian Serb army commander) Ratko Mladic," -- who is also being tried by the court -- had overseen Bosnian Serb army officers conducting the slaughter of at least 6,000 Muslim men and boys at Srebrenica.

Conducting his own defence, Tolimir said that what happened at Srebrenica in eastern Bosnia in July 1995 amounted to "fighting against terrorist groups", rather than the murder of Muslim men and boys after Dutch peacekeepers at the "safe" enclave were overrun by Mladic's forces.

Tolimir, said Judge Flugge, "had full knowledge of the despicable criminal operations and himself furthered their goals," in this brutal episode in the Balkans country's bloody 1992-95 war that claimed 100,000 lives and left 2.2 million others homeless.

Apart from genocide, Tolimir was found guilty on six other counts including extermination, murder, persecution and forcible transfer.

Judges said prosecutors did not prove a count of deportation beyond reasonable doubt in relation to the attacks on Srebrenica and Zepa.

During his trial prosecutors said the former intelligence chief was part of a grand scheme to murder thousands of Muslim men and boys and expel thousands of woman and children from the enclave in order to create a "mono-ethnic Serb state."

The prosecution also alleged that about 25,000 women, children and elderly people were forcibly transferred from the enclaves to Muslim-controlled territories, while thousands of men and boys old enough to bear arms were executed and dumped in mass graves.

Tolimir was involved in a "joint criminal enterprise" to "summarily execute and bury thousands of Bosnian Muslim men and boys aged 16 to 60 captured from the Srebrenica enclave," according to the charge sheet.

During the trial, prosecutors said Mladic relied on Tolimir to "carry out the slow strangling of the Srebrenica and Zepa enclaves" to create conditions which would force the Muslim population "to give up hope of survival."

Tolimir is the most senior Serb to have a verdict handed down by the UN war crimes court since two Croatian generals and two former Kosovar guerrillas were acquitted last month, sparking Serbia's ire.

In 2004, Radislav Krstic became the highest-ranking Bosnian Serb officer to be sentenced on appeal to 35 years in jail for his role in the Srebrenica massacre.

Arrested in May 2007 in Bosnia-Herzegovina, Tolimir had seen his trial delayed several times due to ill-health.

Mladic, also dubbed "the Butcher of Bosnia," was arrested in Serbia last year, and now faces 11 counts before the same Hague-based court, including for the Srebrenica massacre.

-AFP/ac

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Sony launches new entertainment app for Xperia users

Sony is launching an app aimed at Xperia smartphone users that grants access to additional music, film, and sports content.

Sony Mobile Communications, a subsidiary of Japanese electronics maker Sony, announced today that a new app, called the Xperia Lounge, has been released in beta. Available on Google's
Android operating system, Xperia Lounge contains "backstage" content based around music, film, gaming, and sports.

Touted as a "VIP" experience, the free app is launching with content from band Coldplay and a competition to win tickets to see Swedish House Mafia. It will later include a chance to attend FIFA events. Content is provided by Sony's partners and sponsors, and includes live concert streaming, behind the scenes film footage, and song streaming.

The application is available from Google Play.

If you don't own an Xperia phone, you can still download the free app, but you won't be able to access all streaming services or content. The Xperia Lounge app will be available in 11 languages.

Sony Mobile has released a number of different Xperia smartphone models, including the Xperia T, Xperia J, and Xperia V. The Sony Xperia TL, available now on AT&T, may be one model that can stand up to competitors including Apple and Samsung, as it comes with Android 4.0 Ice Cream Sandwich, a 1.5GHz dual-core Snapdragon S4 processor, and a 13-megapixel camera.

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Ecuador leader: Hugo Chavez undergoing surgery

Venezuelan President Hugo Chavez blows a goodbye kiss prior to boarding his plane at Simon Bolivar International Airport in Maiquetia, Venezuela, Dec. 10, 2012, in this picture released by Miraflores Press Office. / AP Photo/Miraflores Press Office

Updated at 11:55 a.m. ET

QUITO, Ecuador Venezuelan President Hugo Chavez is undergoing cancer surgery in Cuba, Ecuador's president said Tuesday.

"Commander Hugo Chavez is being operated on at this moment. It's a very delicate operation," Correa said at an event in the Ecuadorean city of Tulcan.

"At this time he's passing through one of the hardest moments of his life. Our heart and our solidarity go out to a historic president," he said. Correa, a close ally of the Venezuelan leader, traveled to Cuba on Monday and met with Chavez.

Chavez announced on Saturday that he needed to undergo a third cancer-related surgery in about a year and a half after tests showed that "some malignant cells" had reappeared in the same area where tumors were previously removed.

Chavez also said for the first time that if his illness cuts short his presidency, Vice President Nicolas Maduro should take his place and should be elected president to lead his leftist movement.

The operation aims to remove cancerous tissue from Chavez's pelvic area. An initial surgery for a pelvic abscess in June 2011 helped reveal he had cancer.

Chavez has also undergone chemotherapy and radiation treatments.

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Video of Columbus Circle Killer Released

The hunt for New York's Columbus Circle killer took on a new impetus today as police released surveillance video showing the killer moments before he calmly walked up to Brandon Lincoln Woodard and put one bullet from a silver colored handgun into the back of the Los Angeles man's head in full view of holiday shoppers.

The video confirms the details of the hit man's calculated wait for his victim as first reported on ABCNews.com on Monday.

"In the video, the gunman wanted in the shooting death yesterday of Brandon Lincoln Woodard, 31, of Los Angeles, is seen 10 minutes before the shooting," Deputy Commissioner for Public Information Paul Browne said in a statement today.

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Woodard, who is described by police as linked to the hip hop part of the Los Angeles entertainment industry, was strolling down 58th Street near the southern end of Central Park when he was gunned down.

"The shooter, who appears to be bald and may have a beard, exited a late model Lincoln sedan, initially bare-headed, but soon pulled the hood of his jacket over his head. Ten minutes later, at approximately 2 p.m., the shooter walked up behind Woodard and fired," Browne said.

In a grainy still image also released, the gunman is seen behind Woodard a moment before the shooting, pulling the weapon from his jacket.

Just before he was shot, Woodard turned "instinctively almost," then turned back to his portable electronic device, police told ABC News.

Sources tell ABC News that Woodard was arrested in 2009 in connection with a robbery in California.

Woodard was raised in Los Angeles' Ladera Heights neighborhood and attended the private Campbell Hall High School, they said. He attended college and law school at Loyola Marymount College in Los Angeles, law enforcement sources and friends said.

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IMF loan to Egypt delayed as crisis deepens

CAIRO (Reuters) - A vital $4.8 billion International Monetary Fund loan to Egypt will be delayed until next month, its finance minister said on Tuesday, intensifying the political crisis gripping the Arab world's most populous nation.

As rival factions gathered in Cairo and Alexandria for a new round of demonstrations, Finance Minister Mumtaz al-Said said the delay in the loan agreement was intended to allow time to explain a heavily criticised package of economic austerity measures to the Egyptian people.

The announcement came after President Mohamed Mursi on Monday backed down on planned tax increases, seen as key for the loan to go ahead. Opposition groups had greeted the tax package, which had included duties on alcoholic drinks, cigarettes and a range of goods and services, with furious criticism.

"Of course the delay will have some economic impact, but we are discussing necessary measures (to address that) during the coming period," the minister told Reuters, adding: "I am optimistic ... everything will be well, God willing."

Prime Minister Hisham Kandil said Egypt had requested that the loan be delayed by a month.

"The challenges are economic not political and must be dealt with aside from politics," he told a news conference.

Kandil said the reforms would not hurt the poor. Bread sugar and rice would not be touched, but cigarettes and cooking oil would go up and fines would be imposed for public littering. In a bid to rebuild consensus, he said there would be a national dialogue about the economic program next week.

In Washington, the IMF said Egypt had asked for the loan to be postponed "in light of the unfolding developments on the ground". The Fund stood ready to consult with Egypt on resuming discussions on the stand-by loan, a spokeswoman said.

GUNMEN OPEN FIRE

On the streets of the capital, tensions ran high after nine people were hurt when gunmen fired at protesters camping in Tahrir Square, according to witnesses and Egyptian media.

The opposition has called for a major demonstration it hopes will force Mursi to postpone a referendum on a new constitution.

Outside the presidential palace, dozens of protesters succeeded in pushing down two giant concrete blocks forming a small part of a wall blocking access to the site.

Thousands of flag-waving Islamist Mursi supporters, who want the vote to go ahead as planned on Saturday, assembled at a nearby mosque, setting the stage for further street confrontations in a crisis that has divided the nation of 83 million.

In Egypt's second city of Alexandria, thousands of rival demonstrators gathered at separate venues. Mursi's backers chanted: "The people want implementation of Islamic law," while his opponents shouted: "The people want to bring down the regime."

The upheaval following the fall of Hosni Mubarak last year is causing concern in the West, in particular the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

The turmoil has also placed a big strain on the economy, sending foreign currency reserves down to about $15 billion, less than half what they were before the revolt two years ago as the government has sought to defend the pound.

"Given the current policy environment, it's hardly a surprise that there's been a delay, but it is imperative that the delay is brief," said Simon Williams, HSBC economist in Dubai. "Egypt urgently needs that IMF accord, both for the funding it brings and the policy anchor it affords."

The IMF deal had been seen as giving a seal of approval to investors and donors about the government's economic plans, vital for drawing more cash into the economy to ease a crushing budget deficit and stave off a balance of payments crisis.

MASKED ATTACKERS

In central Cairo, police cars surrounded Tahrir Square in central Cairo, the first time they had appeared in the area since November 23, shortly after a decree by Mursi awarding himself sweeping temporary powers that touched off widespread protests.

The attackers, some masked, also threw petrol bombs that started a small fire, witnesses said.

"The masked men came suddenly and attacked the protesters in Tahrir. The attack was meant to deter us and prevent us from protesting today. We oppose these terror tactics and will stage the biggest protest possible today," said John Gerges, a Christian Egyptian who described himself as a socialist.

The latest bout of unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and opponents who are also gathering outside Mursi's presidential palace.

The elite Republican Guard which protects the palace has yet to use force to keep protesters away from the graffiti-daubed building, now ringed with tanks, barbed wire and concrete barricades.

The army has told all sides to resolve their differences through dialogue, saying it would not allow Egypt to enter a "dark tunnel". For the period of the referendum, the army has been granted police powers by Mursi, allowing it to arrest civilians.

The army has portrayed itself as the guarantor of the nation's security, but so far it has shown no appetite for a return to the bruising front-line political role it played after the fall of Mubarak, which severely damaged its standing.

OPPOSITION MARCHES

Leftists, liberals and other opposition groups called for marches say the hastily arranged constitutional referendum is polarizing the country and could put it in a religious straightjacket.

Mohamed ElBaradei, a prominent opposition leader and Nobel prize winner, said the referendum should be postponed for a couple of months due to the chaotic situation.

"This revolution was not staged to replace one dictator with another," he said in an interview with CNN.

Opposition leaders want the referendum to be delayed and hope they can get sufficiently large numbers of protesters on the streets to change Mursi's mind.

Islamists, who dominated the body that drew up the constitution, have urged their followers to turn out to show support for the president and for a referendum they feel sure of winning.

The opposition says the draft constitution fails to embrace the diversity of the population, a tenth of which is Christian, and invites Muslim clerics to influence lawmaking.

(Writing by Giles Elgood; Editing by Peter Graff and Will Waterman)

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