Mass protest as Michigan curbs union rights

CHICAGO: Thousands of protesters descended on Michigan's state capitol Tuesday as lawmakers prepared to pass union-curbing "right-to-work" legislation in a state seen as the heart of the labor movement.

The measure would weaken unions by allowing workers who get the same wages and benefits as union members to decline to pay any union dues.

Democratic lawmakers begged their Republican colleagues not to pass the controversial bill, which they warned would unleash deep social and political strife.

"There will be blood. There will be repercussions," state representative Douglass Geiss told the chamber.

Geiss reminded his colleagues of the violent clashes that accompanied the struggle to form unions in the 1930s and warned that people feel just as strongly about solidarity today.

"If ten people walk in and say I'm not going to pay dues anymore, there's going to be fights," he warned.

State representative John Switlaski lashed out at the fact Republicans were pushing the bill through in a lame duck session using a parliamentary maneuver that limits debate and means Democrats can't stop it unless they regain control in the 2014 election.

"The next two years are going to be terrible. They're going to be ugly," Switlaski said.

"I think we should pause and take a step back... let the people have a say. we'll vote for it. Put it on the ballot."

Republican state representative Lisa Lyons insisted the law was about giving workers their constitutionally guaranteed right to freedom of association.

"We are witnessing history in the making," she said. "This is the day that Michigan freed its workers."

Boos and chants of "veto" poured into the chamber from the gallery after the House voted 58-51 to pass the bill, sending it to Governor Rick Snyder for final approval.

Hundreds of union members and supporters crowded into the capitol dome, blowing whistles and chanting "the people are united" and "What's disgusting? Union busting!"

Thousands more shivered in the cold outside, television news footage showed.

"The right-wing forces in Michigan are trying to take power away from working families," United Auto Workers union chief Bob King told reporters.

"They want working families to have less income, less security. This is about partisanship, not bringing the state together."

Currently, the state operates a "closed shop" policy that requires workers who profit from collective bargaining to pay fees but does not make it mandatory for them to become union members.

The right-to-work law creates an incentive for people not to join the union in what is known as the "free rider" problem because it allows them to benefit from collective bargaining without paying for it.

Snyder insists the law is necessary "to maintain our competitive edge" and attract new jobs, especially after neighboring Indiana became the 23rd US state to enact right-to-work legislation earlier this year.

But while business may profit from weakening unions, the real motivation for lawmakers is political, said Roland Zullo, a labor relations expert at the University of Michigan.

"This whole right-to-work thing is retribution," Zullo told AFP. "It's really about the fact that unions in Michigan were very important actors in helping to elect Democrats this last election."

Unions are a key source of financial and grassroots get-out-the-vote support for President Barack Obama's Democrats, and he was quick to slam the controversial bill in an appearance at Michigan auto plant Monday.

"You know, these so-called right-to-work laws -- they don't have to do with economics: they have everything to do with politics," Obama told a cheering crowd of unionized workers.

"What they're really talking about is giving you the right to work for less money."

-AFP/ac

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Valve co-founder says Steam Box is a go

Vavle's Big Picture is just one step in the Steam Box equation.

(Credit:
Steam)

Way back in March, the Internet sort of exploded when it became apparent that Valve really was working on its own gaming hardware package.

Now, Gabe Newell himself has told Kotaku that Valve will create its own hardware and software solution that is designed to compete directly with next-gen consoles from Sony and Microsoft.

Kotaku interviewed Newell at the Video Game Awards in Culver City, Calif., over the weekend. Newell said that the consumer response to Big Picture had been better than expected, and that the next step was to get Steam Linux into alpha and ensure that Big Picture works on the platform.

Read more of "Gabe Newell says Steam Box is a go" at CNET Australia.

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N. Korea extends rocket launch window a week

SEOUL, South Korea North Korea on Monday extended the launch period for a controversial long-range rocket by another week, until Dec. 29, citing technical problems.

An unidentified spokesman for the North's Korean Committee of Space Technology told state media scientists found a "technical deficiency in the first-stage control engine module of the rocket." The statement didn't elaborate, but said technicians were "pushing forward" with final preparations for the launch.

North Korea is making its second attempt of the year to launch a rocket that the United Nations, Washington, Seoul and others call a cover meant to test technology for missiles that could be used to strike the United States. They have warned North Korea to cancel the launch or face a new wave of sanctions.

The North Koreans call the launch a peaceful bid to advance their space program, and a last wish of late leader Kim Jong Il, who died a year ago, on Dec. 17. North Korea is also celebrating the centennial this year of the birth of national founder Kim Il Sung, current leader Kim Jong Un's grandfather. An April launch broke apart seconds after liftoff.

The announcement of the planned rocket launch has sparked worry because of the timing: South Korea and Japan hold key elections this month, President Obama begins his second term in January, and China has just formed a new leadership.

The North had originally set up a 13-day launch window, starting Monday, but it announced early Sunday that it may delay the liftoff for unspecified reasons.

Experts in Seoul and Tokyo had speculated that technical glitches may have forced scientists to postpone the launch of the finicky three-stage rocket, its fifth attempt since 1998.

Temperatures in the border city of Sinuiju, near the launch site, dropped to 8.6 degrees Fahrenheit Monday morning, and the Korean Peninsula has been seized by early winter storms and unusually cold weather, the Korea Meteorological Administration said in Seoul.

Engineers can launch a rocket when it's snowing, but lightning, strong wind and freezing temperatures have the potential to stall liftoff, said Lee Chang-jin, an aerospace professor at Seoul's Konkuk University.

Snow covered the North's launch site last week, according to commercial satellite imagery taken by GeoEye on Dec. 4 and shared with The Associated Press by the 38 North and North Korea Tech websites. The road from the main assembly building to the launch pad showed no fresh tracks, indicating that the snowfall may have stalled the preparations.

Still, Japanese Prime Minister Yoshihiko Noda said Monday that his government would maintain vigilance. Tokyo has mobilized its military to intercept any debris from the rocket.

"At this moment, we are keeping our guard up," Defense Minister Satoshi Morimoto told reporters Monday. "We have not seen any objective indication that would cause us to make any change to our preparedness."

In addition to four failed launches, North Korea has unveiled missiles designed to target U.S. soil and has tested two atomic devices in recent years. It has not yet proven to have mastered the technology for mounting a nuclear warhead to a long-range missile, however.

A successful launch would mean North Korea could develop an intercontinental ballistic missile capable of striking the U.S. mainland within two to three years, said Chong Chol-Ho, a weapons of mass destruction expert at the private Sejong Institute near Seoul.

Six-nation negotiations to offer North Korea much-needed aid in exchange for nuclear disarmament have been stalled since early 2009.

Last week, U.S. Secretary of State Hillary Rodham Clinton said Washington was deeply concerned, and urged foreign ministers from NATO and Russia to demand that Pyongyang cancel its plans. Moscow joined calls on Pyongyang to reconsider.

China, North Korea's main ally and aid provider, also noted its concern, acknowledging North Korea's right to develop its space program but urging Pyongyang to harmonize the bid with restrictions, including those set by the U.N. Security Council.

International pressure and the prospect of dialogue may be a factor in the delay, analysts in Seoul said.

China must have sent a "very strong" message calling for the North to cancel the launch plans, said analyst Baek Seung-joo of the South Korean state-run Korea Institute for Defense Analyses.

North Korea may also be holding off if the U.S., its longtime Korean War foe, actively engages Pyongyang in dialogue, said Koh Yu-hwan, a professor of North Korean studies at Seoul's Dongguk University.

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Iran: We Stole All Secrets From US Drone

An Iranian military commander claimed Monday that the country has stolen all the secrets held by a high-tech American surveillance drone that crashed in Iran last year, according to Iranian news reports.

"All the intelligence in this drone has been completely decoded and extracted and we know each and every step it has taken," said Brig. Gen. Amir Ali Hajizadeh, Commander of the Aerospace Division for the elite Islamic Revolutionary Guard, according to an English-language report by Iran's semi-official Fars News Agency.

Another Iranian outlet, Press TV, reported that Hajizadeh said that data gleaned from the drone showed that it was not spying on the Iranian nuclear program – a story Hajizadeh said the Americans had spread "as an excuse for hostile practices."

The RQ-170 Sentinel drone, a classified unmanned surveillance craft produced by defense contracting giant Lockheed Martin, was on a CIA mission when it mysteriously crashed in Iranian territory last December, according to U.S. officials at the time. Days after the crash, Press TV broadcast video of what appeared to be the drone propped up but in good condition. Iranian officials said then they were going to set about analyzing the advanced aircraft.

At the time of the crash, American officials said that the drone had been operating over Afghanistan when its operators lost control, after which it floated into Iranian airspace. Iranian officials said their country's electronic warfare experts had been able to take control of the drone and bring it down -- a claim disputed by Pentagon spokesperson John Kirby, who said the drone was not taken down by "hostile activity of any kind."

READ: US Drone on CIA Mission Before Crashing Into Iran

The bat-wing shaped craft is designed to dodge enemy radar and slip unnoticed into hostile territory to gather information or support operations on the ground. It was reportedly used to keep tabs on the man believed to be Osama bin Laden during the Navy SEAL mission that took out the terror leader in Pakistan in May.

Hajizadeh also reportedly said today that a surveillance drone sent by Hezbollah to spy in Israel in October was "an old product of Iran" and featured none of the technology allegedly gleaned from the RQ-170.

Representatives from the CIA and the U.S. military did not immediately respond to requests for comment for this report.

ABC News' Luis Martinez and Martha Raddatz contributed to this report.

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Egypt army given temporary power to arrest civilians

CAIRO (Reuters) - Egypt's Islamist president has given the army temporary power to arrest civilians during a constitutional referendum he is determined to push through despite the risk of bloodshed between his supporters and opponents accusing him of a power grab.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and their critics besieging Mohamed Mursi's graffiti-daubed presidential palace. Both sides plan mass rallies on Tuesday.

The elite Republican Guard has yet to use force to keep protesters away from the palace, which it ringed with tanks, barbed wire and concrete barricades after last week's violence.

Mursi, bruised by calls for his downfall, has rescinded a November 22 decree giving him wide powers but is going ahead with a referendum on Saturday on a constitution seen by his supporters as a triumph for democracy and by many liberals as a betrayal.

A decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians and refer them to prosecutors until the announcement of the results of the referendum, which the protesters want cancelled.

Despite its limited nature, the edict will revive memories of Hosni Mubarak's emergency law, also introduced as a temporary expedient, under which military or state security courts tried thousands of political dissidents and Islamist militants.

But a military source stressed that the measure introduced by a civilian government would have a short shelf-life.

"The latest law giving the armed forces the right to arrest anyone involved in illegal actions such as burning buildings or damaging public sites is to ensure security during the referendum only," the military source said.

Presidential spokesman Yasser Ali said the committee overseeing the vote had requested the army's assistance.

"The armed forces will work within a legal framework to secure the referendum and will return (to barracks) as soon as the referendum is over," Ali said.

Protests and violence have racked Egypt since Mursi decreed himself extraordinary powers he said were needed to speed up a troubled transition since Mubarak's fall 22 months ago.

The Muslim Brotherhood has voiced anger at the Interior Ministry's failure to prevent protesters setting fire to its headquarters in Cairo and 28 of its offices elsewhere.

Critics say the draft law puts Egypt in a religious straitjacket. Whatever the outcome of the referendum, the crisis has polarized the country and presages more instability at a time when Mursi is trying to steady a fragile economy.

On Monday, he suspended planned tax increases only hours after the measures had been formally decreed, casting doubts on the government's ability to push through tough economic reforms that form part of a proposed $4.8 billion IMF loan agreement.

"VIOLENT CONFRONTATION"

Rejecting the referendum plan, opposition groups have called for mass protests on Tuesday, saying Mursi's eagerness to push the constitution through could lead to "violent confrontation".

Islamists have urged their followers to turn out "in millions" the same day in a show of support for the president and for a referendum they feel sure of winning with their loyal base and perhaps with the votes of Egyptians weary of turmoil.

The opposition National Salvation Front, led by liberals such as Mohamed ElBaradei and Amr Moussa, as well as leftist firebrand Hamdeen Sabahy, has yet to call directly for a boycott of the referendum or to urge their supporters to vote "no".

Instead it is contesting the legitimacy of the vote and of the whole process by which the constitution was drafted in an Islamist-led assembly from which their representatives withdrew.

The opposition says the document fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill-equipped to deal with a looming economic crisis.

"Inevitability of referendum deepens divisions," was the headline in Al-Gomhuriya newspaper on Monday. Al Ahram daily wrote: "Political forces split over referendum and new decree."

Mursi issued another decree on Saturday to supersede his November 22 measure putting his own decisions beyond legal challenge until a new constitution and parliament are in place.

While he gave up extra powers as a sop to his opponents, the decisions already taken under them, such as the dismissal of a prosecutor-general appointed by Mubarak, remain intact.

"UNWELCOME" CHOICE

Lamia Kamel, a spokeswoman for former Arab League chief Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a "no" vote.

"Both paths are unwelcome because they really don't want the referendum at all," she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

A spokeswoman for ElBaradei, former head of the U.N. nuclear watchdog, said: "We do not acknowledge the referendum. The aim is to change the decision and postpone it."

Mahmoud Ghozlan, the Muslim Brotherhood's spokesman, said the opposition could stage protests, but should keep the peace.

"They are free to boycott, participate or say no, they can do what they want. The important thing is that it remains in a peaceful context to preserve the country's safety and security."

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a "dark tunnel".

A military source said the declaration read on state media did not herald a move by the army to retake control of Egypt, which it relinquished in June after managing the transition from Mubarak's 30 years of military-backed one-man rule.

The draft constitution sets up a national defense council, in which generals will form a majority, and gives civilians some scrutiny over the army - although not enough for critics.

In August Mursi stripped the generals of sweeping powers they had grabbed when he was elected two months earlier, but has since repeatedly paid tribute to the military in public.

So far the army and police have taken a relatively passive role in the protests roiling the most populous Arab nation.

(Additional reporting by Edmund Blair and Yasmine Saleh; editing by Philippa Fletcher)

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Football: Police hunt for Ferdinand coin throw culprit

LONDON: Police said on Monday that they were working to track down the person responsible for throwing a coin at Manchester United's Rio Ferdinand during Sunday's Manchester derby.

Ferdinand was left with blood streaming down his face from a cut above his eye after being struck by a coin as he celebrated Robin van Persie's injury-time winner in United's 3-2 victory at Manchester City.

Greater Manchester Police said that they had made 13 arrests and charged nine people over offences that occurred before, during and after the match.

"To have just 13 arrests for a crowd of this size and a match of this proportion is a testament to the policing operation we put in place," said Chief Inspector Steve Howard.

"Despite fierce rivalry and high tension, there was no major disorder. However, we will continue to investigate the coin-throwing incident and are determined to work with the club to bring the perpetrator to justice."

The Football Association (FA) are also investigating the incident.

Among the people charged were two men accused of entering the field of play during the game.

City goalkeeper Joe Hart had to restrain one fan from getting at Ferdinand after the coin-throwing incident, prompting the United defender to thank his one-time England colleague on Twitter.

The supporter, 21-year-old landscape gardener Matthew Stott, expressed regret for his behaviour on Monday.

"I would like to apologise to all those affected by my actions yesterday (Sunday), particularly Mr Ferdinand and the other players," he said in a statement released by his lawyers.

"I am extremely ashamed of my actions. I have let myself down, my family down, my fellow fans down and Manchester City Football Club."

Despite his apology, City cancelled Stott's season ticket for the rest of the season and said he would be given a lifetime ban from the club if found guilty of pitch encroachment.

"His season card has been immediately removed for the rest of the season and he has been charged to appear at court. If he is found guilty, he faces a lifetime ban," said a City spokesman.

A 30-year-old man has also been charged with what police said was a "racially aggravated public order" offence.

All the people charged are due to appear before magistrates in Manchester on January 4 next year.

FA chairman David Bernstein said the crowd trouble that marred the game was "deplorable" and called for strict punishments to be meted out to those responsible.

"It is deplorable to see those incidents and to see Rio Ferdinand with blood on his face is absolutely terrible," he told Sky Sports News.

"I think it's disturbing that we're seeing a recurrence of these types of incidents. We've had racial abuse issues, the odd pitch incursion, things being thrown at players -- it's very unacceptable and has to be dealt with severely."

He added: "I believe that if necessary these people need to go to the court and be banned for life, if they're found out."

Meanwhile, Professional Footballers' Association (PFA) chief executive Gordon Taylor said there was a case to be made for erecting nets to protect players from missiles thrown by supporters.

"I think you've got to give consideration to possibly, as has been suggested, some netting in vulnerable areas, be it behind the goals and round the corner flags," he told BBC Radio 5 Live.

United's victory took them six points clear of defending champions City at the top of the Premier League table.

-AFP/ac

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John McAfee feeling better, fights to stay in Guatemala

John McAfee

(Credit:
Personal photo)

Antivirus-software pioneer John McAfee, who is facing deportation from Guatemala to Belize in connection with a murder, is feeling better after suffering chest pains earlier this week and has filed three appeals in an effort to stay in the country.

McAfee, whose request for political asylum has already been rejected by the Guatemalan government, filed an appeal of the asylum decision and petitions to stay in the country indefinitely, as well as another that ensures his physical integrity, his attorney told the media.

Attorney Telesforo Guerra told reporters outside the detention center where McAfee has been held since his arrest Wednesday that the software pioneer turned fugitive is in good health, according to the Associated Press. McAfee, who was arrested for entering the Central American country illegally, complained of chest pains not long after his request for political asylum was rejected by the Guatemalan government on Thursday. His attorney later said that his client was suffering from stress and hypertension.

Police in neighboring Belize has been pursuing McAfee for the past few weeks in connection with the shooting death of his neighbor. McAfee had been on the run since November 12, when his neighbor Gregory Faull, a contractor and restaurant owner, was discovered with a bullet in his head.

The 67-year-old founder of the company that bears his name has also said he would like to return to the United States.

"My goal is to get back to America as soon as possible," McAfee told Reuters. "I wish I could just pack my bags and go to Miami. I don't think I fully understood the political situation. I'm an embarrassment to the Guatemalan government and I'm jeopardizing their relationship with Belize."

McAfee has told the media that he's being wrongfully persecuted by officials in Belize and that he fears for his life if he is arrested by Belize police.

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Bruno Mars: Singing is all I ever wanted to do

(CBS News) All told, Bruno Mars' music videos have been viewed a staggering one BILLION times on YouTube. Not bad for a singer who was dumped by a big record label once upon a time. This morning, Bruno Mars talks to Lee Cowan For The Record:

By his own definition Bruno Mars is a musical melting pot.

He can spin from Pop to R & B to Reggae at the drop of that signature fedora.

"So, what would you say your style is?" asked Cowan.

"What's my style? I'm a singer. I'm just a singer," he replied.

And it's the way he sings his love songs that put Mars into orbit just two years ago. "Grenade," and "Just the Way You Are" both reached Number One on the Billboard charts, becoming two of the bestselling digital singles of all time.

His debut album, "Doo-Wops & Hooligans," sold more than 5 million copies. He was Billboard's top male artist last year. And this week he'll release his second album, called fittingly enough, "Unorthodox Jukebox."

At 27 the boy from Hawaii seems to have it all.

Mars was asked if it was precarious, being on top of the peak.

"I'm a happy dude, Lee," he laughed. "The fact that I even get to feel this, at this moment is enough. Enough."

WEB EXCLUSIVE VIDEO: Bruno Mars talks about playing at Pickwick's Pub in the San Fernando Valley when he was struggling to make it after being dropped by Motown. (Click on the video player below.)

He was born Peter Jean Hernandez on the island of Oahu, to a Puerto Rican father and a Filipino mother.

His dad nicknamed him Bruno after a popular wrestler. Bruno then added Mars years later.

For him and his five siblings music was always the family business.

"My dad had this 1950s review show, very Las Vegas-style, and my uncle impersonated Elvis, and that was my favorite part of the show," Mars chuckled.

Even at age two, Mars said he was taken with how girls were screaming for "Elvis." "And as a young kid, you're like, 'I want that.'"

So when his dad put Bruno on stage he did the only thing he knew. His Mini-Elvis was an instant hit, becoming so popular that little Bruno was given a cameo in the movie "Honeymoon in Vegas."

"I became a real, real attention whore after that!" Mars laughed.

At 18 he moved to Los Angeles. He and his brother started a cover band jokingly called Sex Panther, and he began performing anyplace that would have them. Places like Pickwick's Pub, in L.A.'s San Fernando Valley.

He also wrote his own music. "I had a couple tunes that we would try out," he said. Good ones? "No! Not at all!"

But soon he had inked a deal with Motown Records, and left Pickwick's for bigger gigs - or so he thought. Turns out Pickwick's actually left Bruno first. Within a few months Motown had left him, too, releasing him from his contract without ever putting out an album.

"How much of a blow was that when they dropped you?" Cowan asked.

"The biggest blow. That was a hard phone call, to call my mom and dad and say, 'I'm no longer a signed artist and I gotta rethink this whole thing.'"

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Cowboys Players Were Like 'Brothers'

Dallas Cowboys players Joshua Price-Brent and Jerry Brown Jr., had a brotherly bond that began when they were teammates at the University of Illinois and carried on when they were both signed, in different years, to the NFL franchise.

But in an instant, the lives of the young, successful men who were living out their NFL dreams were altered.

Irving police suspect Price-Brent, 24, was intoxicated when he was behind the wheel of his 2007 Mercedes early Saturday morning. He was allegedly speeding when his car hit a curb, flipped, landed in the middle of a service road and caught fire, killing his passenger, Brown, 25, who had been a linebacker on the Cowboys practice squad.

Price-Brent, who is scheduled to be arraigned today on an intoxication manslaughter charge, released a statement Saturday night from his jail cell.

"I will live with this horrific and tragic loss every day for the rest of my life," he wrote.

His attorney, George Milner, called Brown's death a "tremendous loss" and said "this was like losing a little brother" for his client.

Kansas City Chiefs Player Jovan Belcher's Murder-Suicide Watch Video

Authorities were alerted to the accident, which occurred at about 2:21 a.m., by several 911 callers, Irving Police Department spokesman John Argumaniz said. When police arrived, they found Price-Brent pulling Brown from his 2007 Mercedes, which had caught fire, he said.

Brown was unresponsive and was transported to a local hospital, where he was pronounced dead.

It was not known where the men were coming from or where they were going, but Argumaniz said officers suspected alcohol may have been a factor in the crash and asked Price-Brent to perform field sobriety tests.

"Based on the results of the tests, along with the officer's observations and conversations with Price-Brent, he was arrested for driving while intoxicated," Argumaniz said.

This is the second week in a row an NFL player has been accused of being involved in another person's death. Jovan Belcher of the Kansas City Chiefs killed his girlfriend early Dec. 1, then committed suicide while talking to team officials in the parking lot at Arrowhead Stadium.

Jovan Belcher: Police Release Dash-Cam Videos of NFL Star's Final Hours

Price-Brent was taken to a hospital for a mandatory blood draw where he was treated for minor scrapes, Argumaniz said. He was then booked on an intoxication manslaughter charge after it was learned Brown had died of injuries suffered in the crash.

It is expected that results from the blood draw could take several weeks, the police spokesman said.

If convicted, the second-degree felony intoxication manslaughter charge carries a sentence of two to 20 years in prison and a $10,000 fine.

Milner suggested that ongoing construction in the area of the crash may have played a role.

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Egypt's opposition scorns Mursi's concession

CAIRO (Reuters) - A concession offered by President Mohamed Mursi failed to placate opponents who accused him on Sunday of plunging Egypt deeper into crisis by refusing to postpone a vote on a constitution shaped by Islamists.

Islamists say they see the referendum as sealing a democratic transition that began when a popular uprising toppled Hosni Mubarak 22 months ago after three decades of military-backed one-man rule.

Their liberal, leftist and Christian adversaries say the document being fast-tracked to a vote could threaten freedoms and fails to embrace the diversity of Egypt's 83 million people.

More protests were planned near Mursi's palace, despite tanks, barbed wire and other barriers installed last week after clashes between Islamists and their rivals killed seven people.

Mursi had given some ground the previous day when he retracted a fiercely contested decree giving himself extra powers and shielding his decisions from judicial review.

But the president insisted the constitutional referendum go ahead next Saturday and the Muslim Brotherhood, from which he sprang, urged the opposition to accept the poll's verdict.

Ahmed Said, a liberal leader of the main opposition National Salvation Front, described the race to a referendum as "shocking" and an "act of war" against Egyptians.

The Front has promised a formal response later on Sunday.

Egypt is torn between Islamists, who were suppressed for decades, and their rivals, who fear religious conservatives want to squeeze out other voices and restrict social freedoms. Many Egyptians just crave stability and economic recovery.

Brotherhood spokesman Mahmoud Ghozlan said the scrapping of Mursi's decree had removed any reason for controversy.

"We ask others to announce their acceptance of the referendum result," he said on the group's Facebook page, asking whether the opposition would accept "the basics of democracy".

The retraction of Mursi's November 22 decree, announced around midnight after a "national dialogue" boycotted by almost all the president's critics, has not bridged a deep political divide.

Prime Minister Hisham Kandil, a technocrat with Islamist leanings, said the referendum was the best test of opinion.

"The people are the makers of the future as long as they have the freedom to resort to the ballot box in a democratic, free and fair vote," he said in a cabinet statement.

"CONSTITUTION WITHOUT CONSENSUS"

But opposition factions, uncertain of their ability to vote down the constitution against the Islamists' organizational muscle, want the document redrafted before any vote.

"A constitution without consensus can't go to a referendum," said Hermes Fawzi, 28, a protester outside the palace. "It's not logical that just one part of society makes the constitution."

Egypt tipped into turmoil after Mursi grabbed powers to stop any court action aimed at hindering the transition. An assembly led by the Muslim Brotherhood and other Islamists then swiftly approved the constitution it had spent six months drafting.

Opponents, including minority Christians, had already quit the assembly in dismay, saying their voices were being ignored.

A leftist group led by defeated presidential candidate Hamdeen Sabahy demanded the referendum be deferred until a consensus could be reached on a new draft, saying there could be "no dialogue while blood is being spilled in the streets".

After the dialogue hosted by Mursi, a spokesman announced that the president had issued a new decree whose first article "cancels the constitutional declaration" of November 22. He said the referendum could not be delayed for legal reasons.

The decree ignited more than two weeks of sometimes bloody protests and counter-rallies in Egypt. Mursi's foes have chanted for his downfall. Islamists fear a plot to oust the most populous Arab nation's first freely elected leader.

The April 6 movement, prominent in the anti-Mubarak revolt, derided the result of Saturday's talks as "manipulation and a continuation of deception in the name of law and legitimacy".

Islamists reckon they can win the referendum and, once the new constitution is in place, a parliamentary poll about two months later. The Islamist-led lower house elected this year was dissolved after a few months by a court order.

Investors appeared relieved at Mursi's retraction of his decree, sending Egyptian stocks 4.4 percent higher on Sunday. Markets are awaiting approval of a $4.8 billion IMF loan later this month designed to support the budget and economic reforms.

The military, which led Egypt's transition for 16 turbulent months after Mubarak fell, told feuding factions on Saturday that only dialogue could avert "catastrophe". But a military source said these remarks did not herald an army takeover.

(Additional reporting by Edmund Blair and Yasmine Saleh; Editing by Stephen Powell)

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