BP profits slide on US oil spill fallout

LONDON: British energy giant BP on Tuesday said its net profits slumped by more than half last year on fines and asset sales linked to the 2010 Gulf of Mexico oil spill disaster, ahead of a US trial later this month.

Earnings after tax tumbled 54 percent to $11.58 billion (8.6 billion euros) in 2012, compared with $25.7 billion in 2011, BP said in a results statement.

Adjusted net profit, stripping out fluctuations in the value of inventories, plunged by almost 50 percent to $11.99 billion.

The London-listed group took a pre-tax charge of $4.1 billion for the fourth quarter in relation to the Gulf of Mexico disaster, taking its total clean-up bill to $42.2 billion.

Profits were hit also by divestments, including the sale of BP's 50-percent stake in the troubled Russian joint venture TNK-BP to the main Russian oil producer Rosneft.

BP added it was still assessing the impact of the deadly attack at its joint venture in the In Amenas gas site in Algeria last month, but remained committed to the country.

The energy major also revealed it had reached its target to sell $38 billion of assets a year earlier than originally planned, as it sought to meet the bill for the oil spill costs.

However, the sell-offs pushed annual production lower. Output sank more than five percent to 2.319 million barrels of oil equivalent per day, excluding TNK-BP's output.

The results were issued one week after a US judge approved a $4.5-billion deal in which BP pleaded guilty to criminal charges from the 2010 oil spill.

The devastating blast on the BP-leased Deepwater Horizon drilling rig on April 20, 2010 killed 11 people and unleashed some 4.9 million barrels of oil into the Gulf.

Later this month, BP will face a mammoth trial consolidating scores of remaining lawsuits stemming from the worst environmental disaster to strike the United States.

It must also still resolve a civil case on environmental fines which could amount to as much as $18 billion if gross negligence is found. BP also remains on the hook for billions in economic damages, including the cost of environmental rehabilitation.

Despite plunging profits, chief executive Bob Dudley argued that the group was well positioned for long-term growth.

"We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects. This lays a solid foundation for growth into the long-term," said Dudley in Tuesday's earnings release.

"Moving through 2013 we will deliver further operational milestones and remain on track for delivery of our ten-point strategic plan, including our target for operating cash flow growth, by 2014," he added.

BP shares rose 1.67 percent to stand at 469.75 pence in late trading on London's FTSE 100 index, which was up 0.71 percent to 6,291.47 points.

The company's results were meanwhile published three weeks after a fatal Islamist attack on the BP-operated In Amenas gas plant, in a hostage-taking siege that ended with the deaths of almost 40 captives, mostly foreigners.

"We are working with our partners to assess the impact of the incident and intend to resume activities when it is safe to do so," BP said on Tuesday.

"BP remains committed to operating in Algeria, where we have high-quality assets and have been present for over 60 years."

The In Amenas gas field is a joint venture between BP, Norwegian group Statoil and Algerian state-owned oil firm Sonatrach.

-AFP/ac

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Privacy groups tell U.S. to stop lobbying EU on data law changes

A coalition of privacy groups has written to leading U.S. politicians to seek assurances that policymakers "advance the aim of privacy" in Europe, rather than hinder the development of new European data protection and privacy laws.

The Electronic Frontier Foundation (EFF), the American Civil Liberties Union (ACLU), the Electronic Privacy Information Center (EPIC), and more than a dozen other groups are seeking to meet with U.S. Attorney General Eric Holder, U.S. Secretary of State John Kerry, and U.S. Acting Secretary of Commerce Rebecca Blank, to ensure that new European data law proposals are bolstered and not weakened.

When made final, the European Union's Data Protection Regulation will govern the data and privacy laws of Europe's 27 member states.

In the letter (PDF) sent today, the 18 groups claim that U.S. and European citizens' privacy and personal data are "being abused by both the commercial sector and governments" and that the "line is increasingly blurred as personal data passes between both with few restrictions."

While European politicians continue to debate ever-amended drafts to the new EU Data Protection Regulation -- which seeks to replace an outdated 1995 directive -- U.S. policymakers are "mounting an unprecedented lobbying campaign to limit the protections that European law would provide," the letter states.

"The U.S. should not stand in the way of Europe's efforts to strengthen and modernize its legal framework," the letter states.

Administration 'working to protect' the lobby?
The new EU data protection and privacy law is meant to further protect the 500 million-plus European citizens' rights in an ever-globalizing world and borderless cloud.

A major concern is the extra-territorial effect of U.S. law on European citizens, notably with the FISA Amendments Act 2008 and sections of the Patriot Act for monitoring communications between Americans and foreigners.

One leading U.S. consumer protection and privacy organization warned that EU officials are being pressured by the U.S. to weaken the proposed privacy protections in the drafts of the data protection laws.

Center for Digital Democracy Executive Director Jeff Chester told ZDNet that despite the pro-privacy tone from President Obama, his administration is "working to protect the U.S. data lobby."

The privacy groups also noted that updating the U.S. Electronic Communications Privacy Act (ECPA) -- under which authorities need only a subpoena approved by a federal prosecutor, rather than a judge, to obtain electronically stored messages six months old or older -- "would be a good start for the strengthening of U.S. law and policy" to bring the country in compliance with international human rights norms.

EU 'fed up' with U.S. lobbying
A year ago, EU Justice Commissioner Viviane Reding said the lobbying effort had been "absolutely fierce" and unprecedented in scale, according to The Telegraph.

On Sunday, the head of an influential pan-European industry group criticized "intensifying pressure from U.S. lobbyists on behalf of Google and Facebook," in order to suit the needs of Silicon Valley technology companies, according to the Financial Times of London.

Jacob Kohnstamm, chairman of the EU's Article 29 Working Party -- a group of data protection officials from each of the EU's member states -- said European lawmakers are "fed up" with U.S. lobbying.

In sharp words aimed at the Americans, he said: "You're not going to change your Fourth Amendment because of a business model in Europe, are you?"

The European Parliament is expected to vote on the draft regulation around the end of April, according to the European Union.

Read more
of "Privacy groups call on U.S. government to stop lobbying against EU data law changes" at ZDNet.

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Boy held captive may celebrate birthday as hostage

(CBS News) The Alabama hostage drama is now in its seventh day. The 5-year-old boy held captive underground by Jimmy Lee Dykes remains underground and could spend his birthday as a hostage. The boy, identified only as Ethan, turns six on Wednesday.

Police tell CBS News they still have an open line of communication with the Dykes, but almost a full week into this standoff, very little has changed.

Details about communications with the suspect Dykes, remain scarce. Dykes did allow police to lower crackers and a red hot wheels car into the underground bunker for his hostage.

Cindy Steiner, a friend of Ethan's family, told CBS News he has autism. She said, "He's crying, he wants his momma, he's never really been away from her."

Police said Dykes appears to be caring for Ethan. Sheriff Wally Olson said in a recent press conference, "Thank you for taking care of our child."

Neighbors remember Dykes for his anti-government rants. A source told CBS News senior producer Pat Milton that Dykes is a decorated Vietnam-era veteran. He served in the Navy in the late 1960s, based in Japan and California and received awards for good conduct.

CBS News senior correspondent John Miller, a former FBI assistant director, who has been involved in other hostage and standoff situations, said there are some good signs in this situation. He said Dykes' caring for the boy is a sign of bonding. "You can see that when Dykes asks for coloring books, crayons. He allows medication to come in," he said. "He's trying to provide for this boy, so as time goes on, that bond should increase.

For John Miller's full analysis, watch the video in the player below.

"It also happens with the negotiators. There's going to be a primary negotiator who started this conversation and a backup negotiator and then over this many days they're going to be others. He's going develop relationships and trust as he asks for things and they give him things and they ask for things in return. ... That can only get better, probably not worse."

Miller said the situation with Dykes may be controlled to some extent by negotiators, but depends largely on Dykes' own rollercoaster or emotions. Miller explained, "One would argue this might not be a stable person, so they have to manage that in that conversation and sometimes they may want to do a controlled probe to stir things up if there's no conversation, but otherwise they may want to talk him down if he's getting excited. But they want to keep that even if they can."

Explaining what a controlled probe is, Miller said it's a possible tactic "when somebody breaks off conversation, you can stir things up. Make some noise, do something provocative. That will usually generate a phone call. And then at least you've got a conversation going on. On the other hand, when somebody is getting very excited for perspective, they say, let's see where things are. 'The kid's fine, you're fine, let's bring this down a notch.'"

Children in the area will return to school Monday for the first time since the shooting.

On Sunday, just miles from the standoff, hundreds gathered to remember slain bus driver Charles Poland, Jr. Police say Dykes shot Poland Tuesday, when he stormed this school bus demanding child hostages.

Robbie Batchelor, a fellow school bus driver, said of Poland, "He laid down his life for the kids on the bus."

Twenty children on that bus escaped.

Watch Manuel Bojorquez's full report in the video above.

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Syrian opposition chief says offers Assad peaceful exit

BEIRUT (Reuters) - Syrian opposition leader Moaz Alkhatib urged President Bashar al-Assad on Monday to respond to his initiative for dialogue, saying it was aimed at ending the bloodshed and helping "the regime leave peacefully".

Speaking after meeting senior Russian, U.S. and Iranian officials at the weekend, Alkahtib said none of them had a plan to end the civil war and Syrians must find their own resolution.

"The big powers have no vision ... Only the Syrian people can decide on the solution," the Syrian National Coalition leader told Al Jazeera Television.

The moderate Islamist preacher announced last week he was prepared to talk to Assad's representatives. Although he set several conditions, the move broke a taboo on contacts with authorities and dismayed many in opposition ranks who insist on Assad's departure as a precondition for negotiation.

Alkhatib said it was not "treachery" to seek dialogue to end a conflict in which more than 60,000 people have been killed, 700,000 have been driven from their country and millions more are homeless and hungry.

"The regime must take a clear stand (on dialogue) and we say we will extend our hand for the interest of people and to help the regime leave peacefully," he told the Qatar-based channel. "It is now in the hands of the regime."

Assad announced last month what he said were plans for reconciliation talks to end the violence but - in a speech described by U.N. Syria envoy Lakhdar Brahimi as narrow and uncompromising - he said there would be no dialogue with people he called traitors or "puppets made by the West".

Syria's uprising erupted 22 months ago with largely peaceful protests, escalating into a civil war that pits mainly Sunni Muslim rebels against Assad, who is from Syria's Alawite minority and whose family has ruled Syria for 42 years.

POWERS DIVIDED

The violence has divided major powers, with Russia and China blocking U.N. Security Council draft resolutions backed by the United States, European Union and Sunni Muslim Gulf Arab states that could have led to U.N. sanctions on Assad. Shi'ite Iran has remained his strongest regional backer.

Alkhatib said that the international deadlock meant that only Syrians could stave off further humanitarian disaster.

"We will find a solution, there are many keys," he said. "If the regime wants to solve (the crisis), it can take part in it. If it wants to get out and get the people out of this crisis, we will all work together for the interest of the people and the departure of the regime."

One proposal under discussion was the formation of a transitional government, Alkhatib said, without specifying how he thought it could come about. World powers agreed a similar formula seven months ago but then disagreed over whether that could allow Assad to stay on as head of state.

Activists reported clashes between the army and rebel fighters to the east of Damascus on Monday and heavy shelling of rebel-held areas of the central city of Homs. The Jobar neighborhood, on the southwestern edge of Homs, was hit by more than 100 rockets on Monday morning, one activist said.

The Syrian Observatory for Human Rights said 180 people had been killed across the country on Sunday, including 114 rebel fighters and soldiers. Sunday's death toll also included 28 people killed in the bombardment of a building in the Ansari district of the northern city of Aleppo.

Assad has described the rebel fighters as foreign-backed Islamist terrorists and said a precondition for any solution is that Turkey and Sunni-ruled Gulf Arab states stop funding, sheltering and arming his foes.

Rebels and activists say Iran and the Lebanese Shi'ite military group Hezbollah have sent fighters to reinforce Assad's army - a charge that both deny.

ECONOMIC SUPPORT

"The army of Syria is big enough, they do not need fighters from outside," Iranian Foreign Minister Ali Akbar Salehi said in Berlin on Monday.

"We are giving them economic support, we are sending gasoline, we are sending wheat. We are trying to send electricity to them through Iraq, we have not been successful."

Another Iranian official, speaking in Damascus after talks with Assad, said on Monday that Israel would regret an air strike against Syria last week, without spelling out whether Iran or its ally planned a military response.

"They will regret this recent aggression," said Saeed Jalili, Secretary of Iran's Supreme National Security Council.

Salehi, Russian Foreign Minister Sergei Lavrov and U.S. Vice President Joe Biden all met Alkhatib in Munich at the weekend and portrayed his willingness to talk with Syrian authorities as a major step towards resolving the war.

But Alkhatib is under pressure from other members of the exiled leadership in Cairo for saying he would be willing to talk to Assad, albeit on condition that Assad releases 160,000 prisoners and issues passports to the tens of thousands who have fled to neighboring countries without travel documents.

Walid al-Bunni, a member of the Coalition's 12-member politburo, dismissed Alkhatib's meeting with Salehi.

"It was unsuccessful. The Iranians are unprepared to do anything that could help the causes of the Syrian Revolution," Bunni, a former political prisoner, told Reuters from Budapest.

Bunni said the Coalition was preparing a meeting of all its 70 members in Cairo to hear from Alkhatib about his diplomatic moves.

Alkhatib, whose family are custodians of the Umayyad Mosque in the historic centre of Damascus, is seen as a bulwark against the radical Islamist Salafist forces who wield heavy influence in the armed opposition.

(Additional reporting by Yeganeh Torbati in Dubai and Stephen Brown in Berlin; Editing by Kevin Liffey)

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Israel preparing for post-Assad Syria chaos

JERUSALEM: Israel has implicitly confirmed it carried out an air strike in Syria, sparking a warning from Iran, but the Jewish state's next step in anticipation of a post-Bashar al-Assad era remains a mystery.

Defence Minister Ehud Barak told a defence conference in Munich on Sunday that an air raid last week that Syria said targeted a military complex near its capital was "another proof that when we say something we mean it."

He reiterated that Israel would not allow advanced weapon systems to fall into the hands of Lebanon's Shiite militant group Hezbollah, an ally of Damascus.

The minister stopped short of giving explicit confirmation of the air strike and there has still been no official comment from either the Israeli military or the government.

The New York Times, citing a senior US military official, reported Sunday that the air strike may have damaged Syria's main research centre on biological and chemical weapons.

Barak's comments came a day after US Defence Secretary Leon Panetta said Washington was increasingly concerned that "chaos" in Syria could allow Hezbollah to obtain sophisticated weapons from the Damascus regime.

"The chaos in Syria has obviously created an environment where the possibility of these weapons, you know, going across the border and falling into the hands of Hezbollah has become a greater concern," Panetta told AFP.

The Israeli raid on Wednesday targeted surface-to-air missiles and an adjacent military complex believed to house chemical agents, according to a US official who spoke on condition of anonymity. Syria has threatened to retaliate.

In a sign of increased border tensions, Israel has moved three of its Iron Dome missile defence batteries to its north, from where they can cover possible fire from Syria or Lebanon.

Iran's security chief Saeed Jalili, on a visit to Damascus on Monday, implicitly warned that Israel would be made to regret its actions.

"Just like it regretted all its wars... the Zionist entity will regret its aggression against Syria," said Jalili, who heads Iran's Supreme National Security Council.

"The Muslim world supports Syria," Jalili said. "Syria is at the forefront of the Muslim world's confrontation" with Israel.

Ephraim Halevy, a former head of Mossad, the Israeli foreign intelligence agency, wrote Monday in top-selling daily Yediot Aharonot that his country had no intention of becoming embroiled in Syria's internal turmoil.

"Israel is not involved in the Syrian civil war or in the Iranian warfare on Syrian soil," he wrote.

"From all standpoints, it would have preferred that this conflict had not broken out in the first place, and for Israel to continue to enjoy the absolute quiet along the armistice lines drawn between the two states following the (1973) Yom Kippur War."

"This is the reason that it has displayed restraint both in its actions and in its dearth of official statements," Halevy added.

The raid "shows how the new security situation in Israel is complex and complicated," military analyst Avi Issacharof wrote on the news site Walla. "This new year will be decisive for Israel, not only in the context of the Iranian nuclear programme."

Israeli leaders fear a possible transfer of Syrian chemical and biological weapons to Hezbollah, but also that a general destabilisation of the country could turn it into a preserve of radical Islamist groups.

"A number of ideologically radical groups affiliated with Al-Qaeda have infiltrated the governmental vacuum (in Syria) that contributes to the chaos," said Issacharof.

Israeli leaders, particularly Barak, have repeatedly predicted President Assad's imminent fall and the military is planning its response.

Israel plans to declare a buffer zone inside Syria border to prevent radical groups from getting too close to its territory when the embattled Damascus regime topples, security sources told AFP on Sunday.

- AFP/jc

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How can Amy Poehler help Best Buy during the Super Bowl?

Can she help?

(Credit:
Best Buy/YouTube Screenshot by Chris Matyszczyk/CNET)

In the first quarter of today's Big Game featuring big people doing big things to each other, Amy Poehler will be trying to do big things for Best Buy.

Unlike the players -- who will probably be tied 3-3 in a dull defensive battle when Amy appears -- Poehler has one shot to give the Best Buy brand a shot in arm. Or perhaps a shot at redemption.

Best Buy has been crossing some turbulent oceans recently, so securing the services of one of America' funniest actors is a pleasant coup.

The company has released a sneak preview (embedded here) of Poehler asking questions that are sweetly self-referential, so it may be that this theme will continue during today's spot.

More Technically Incorrect

The idea seems to be that whatever questions you have, those nice people in blue polo shirts will have the answer for you.

In order to reinforce this dream, Best Buy has co-opted the hashtag #infiniteanswers on Twitter.

Naturally, there have already been slight setbacks with this strategy.

For example, a twitterer called Jonathan has already offered: "#infiniteanswers not at your Willimar MN location I have seen smarter things come out of a dead animal."

Worse, another tweeter, Billy Byler seemed to be experiencing a little humorous bile: "Every answer was 'Not sure. Check Amazon.' @BestBuy: Amy Poehler visited us & had A LOT of questions. http://youtu.be/PcmW8HCuLo8 #infiniteanswers."

Can you win them over, Amy? Can you?

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Bus hits overpass in Boston, injuring more than 30

Updated February 3, 2013, 12:23 p.m. ET

After a visit to Harvard University, dozens in a group of high school students and their adult chaperones were injured when their charter bus hit a bridge after police say the driver failed to heed low-clearance warning signs.

One person was hospitalized with life-threatening injuries and three with serious injuries, the Boston Emergency Medical Services said. Thirty-four people were injured in all, EMS said.

The Calvary Coach bus was carrying 42 people and was heading back to the Philadelphia area when it struck an overpass on Soldier's Field Road in Boston, a major crosstown road, at around 7:30 p.m. Saturday, Massachusetts State Police said. Some passengers were trapped for more than an hour as rescue crews worked to free them.

In this photo released by the Boston Fire Department via Twitter, firemen work to remove injured passengers from a bus that hit an bridge as it traveled along Soldiers Field Road in the Allston neighborhood of Boston Saturday night, Feb. 2, 2013.

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AP Photo/Boston Fire Department

Massachusetts police say Samuel J. Jackson, who is 66, was driving the bus Saturday night.

Ray Talmedge, owner of the Philadelphia-based Calvary Coach Bus company, told WCAU-TV that Jackson looked down at his GPS and saw the bridge too late.

Police say no charges have been filed. A phone number listed for Jackson rang unanswered Sunday. The investigation will determine if he faces more serious charges, state police said. The driver was not injured.

Authorities said the bus did not belong on the road, where a 10-foot height limit is in place and over-sized vehicles are not authorized. State Police said the driver, "failed to heed signs" warning of the height limit and will likely be cited for an over-height violation.

CBS Station WBZ Boston reported that the bus company has an adequate record with the Department of Transportation.

The students were part of a Destined for a Dream Foundation group, Talmedge said. Officials with the Bristol, Pa.-based group, a nonprofit that helps underprivileged youth, refused to comment on the crash when reached by phone.

The group's Facebook page said the trip to Harvard was to "visit the campus, sit with the office of cultural advancement, followed by a tour of the campus ... followed by Harvard Square (shopping, eating, site seeing...etc...) This should be a fun time for all!"

None of those injured was identified, and state police said they did not know how many of the injured were adults and how many were juveniles.

The bus suffered significant damage in the crash. The front part of the roof was pushed in while the center section bowed downward. Photos posted on the Fire Department's website showed firefighters standing on the top of the bus using boards to extract people. The last victim was freed from the bus around 9 p.m., according to the department.

The Massachusetts Bay Transportation Authority sent buses to pick up other passengers and get them out of the frigid temperatures.

Soldiers Field Road curves along the Charles River and passes by Harvard and Boston University. It is a major roadway to the Massachusetts Turnpike. Soldiers Field remained closed while crews tried to remove the bus.

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Former SEAL Killed at Gun Range; Suspect Arrested

A man is under arrest in connection with the killing of former Navy SEAL and "American Sniper" author Chris Kyle, the most deadly sniper in U.S. history, and another man at an Erath County, Texas, gun range, police said.

"We have lost more than we can replace. Chris was a patriot, a great father, and a true supporter of this country and its ideals. This is a tragedy for all of us. I send my deepest prayers and thoughts to his wife and two children," "American Sniper" co-author Scott McEwen said in a statement to ABC News.

ABC affiliate WFAA-TV in Dallas reported that Kyle and a neighbor of his were shot while helping a soldier who is recovering from post traumatic stress syndrome at a gun range in Glen Rose.

The suspect, identified as Eddie Routh, 25, was arrested in Lancaster, Texas, after a brief police chase, a Lancaster Police Department dispatcher told ABC News.

Routh was driving Kyle's truck at the time of his arrest and was held awaiting transfer to Texas Rangers, according to police.

Investigators told WFAA that Routh is a former Marine said to suffer from post-traumatic stress syndrome.

Authorities identified the other man who was killed with Kyle as 35-year-old Chad Littlefield.

AP Photo/The Fort Worth Star-Telegram, Paul Moseley

PHOTOS: Notable Deaths in 2013

Kyle, 38, served four tours in Iraq and was awarded two Silver Stars, five Bronze Stars with Valor, two Navy and Marine Corps Achievement Medals, and one Navy and Marine Corps Commendation.

From 1999 to 2009, Kyle recorded more than 150 sniper kills, the most in U.S. military history.

After leaving combat duty, Kyle became chief instructor training Naval Special Warfare Sniper and Counter-Sniper teams, and he authored the Naval Special Warfare Sniper Doctrine, the first Navy SEAL sniper manual. He left the Navy in 2009.

"American Sniper," which was published last year in 2012, became a New York Times best seller.

Kyle was also an advocate for his fellow service members suffering from PTSD, creating a foundation to help with their treatment.

Travis Cox, the director of FITCO Cares, the non-profit foundation Kyle established, said Kyle's wife Taya and their children "lost a dedicated father and husband" and the country has lost a "lifelong patriot and an American hero."

"Chris Kyle was a hero for his courageous efforts protecting our country as a U.S. Navy SEAL during four tours of combat. Moreover, he was a hero for his efforts stateside when he helped develop the FITCO Cares Foundation. What began as a plea for help from Chris looking for in-home fitness equipment for his brothers- and sisters-in-arms struggling with Post Traumatic Stress Disorder (PTSD) became an organization that will carry that torch proudly in his honor," Cox said in a statement.

The fatal shooting comes after week filled with gun-related incidents, as the national debate heats up on what to do about gun violence.

In the past week, a teen who participated in President Obama's inaugural festivities was shot to death in Chicago, a bus driver was fatally shot and a 5-year-old was taken hostage in Alabama, and a Texas prosecutor was gunned down outside a courthouse.

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Syrian opposition chief under fire for talks with Assad allies

MUNICH (Reuters) - Syria's opposition leader flew back to his Cairo headquarters from Germany on Sunday to explain to skeptical allies his decision to talk with President Bashar al-Assad's main backers Russia and Iran, in hope of a breakthrough in the crisis.

The Russian and Iranian foreign ministers, and U.S. Vice-President Joe Biden, portrayed Syrian National Coalition leader Moaz Alkhatib's new willingness to talk with the Assad regime as a major step towards resolving the two-year-old war.

"If we want to stop the bloodshed we cannot continue putting the blame on one side or the other," Iran's Ali Akbar Salehi said on Sunday, welcoming Alkhatib's overtures and adding that he was ready to keep talking to the opposition. Iran is Assad's main military backer together with Russia.

"This is a very important step. Especially because the coalition was created on the basis of categorical rejection of any talks with the regime," Lavrov was quoted as saying on Sunday by Russia's Itar Tass news agency.

Russia has blocked three U.N. Security Council resolutions aimed at pushing Assad out or pressuring him to end a civil war in which more than 60,000 people have died. But Moscow has also tried to distance itself from Assad by saying it is not trying to prop him up and will not offer him asylum.

Syrian state media said Assad received a senior Iranian official and told him Syria could withstand "threats ... and aggression" like an air attack on a military base last week, which Damascus has blamed on Israel.

"USELESS" TALKING TO IRAN

Politicians from the United States, Europe and the Middle East at the Munich Security Conference praised Alkhatib's "courage". But the moderate Islamist preacher was likely to face sharp criticism from the exiled leadership back in Cairo.

Alkhatib has put his leadership on the line by saying he would be willing to talk to representatives of the Assad regime on condition they release 150,000 prisoners and issue passports to the tens of thousands of displaced people who have fled to neighboring countries but do not have documents.

"He has a created a political firestorm. Meeting the Iranian foreign minister was totally unnecessary because it is useless. Iran backs Assad to the hilt and he might as well have met with the Syrian foreign minister," said one of Alkhatib's colleagues on the 12-member politburo of the Syrian National Coalition.

Alkhatib, whose family are custodians of the Umayyad Mosque in the historic centre of Damascus, is seen as a bulwark against Salafist forces who are a main player in the armed opposition.

He was chosen as the head of the Coalition in Qatar last year, with crucial backing from the Muslim Brotherhood.

The Syrian opposition member, speaking on condition of anonymity, pointed to comments by Salehi and Lavrov on Sunday, a day after their meetings with Alkhatib, as evidence that they had not changed their positions and still backed Assad.

Salehi told the Munich conference where the round of talks took place that the solution was to hold elections in Syria - making no mention of Assad having to leave the country.

FIZZLE OUT?

Firm opposition backers like Qatar's Prime Minister Hamad bin Jassim al-Thani and U.S. Republican Senator John McCain voiced frustration in Munich at the international community's reluctance to intervene in the Syrian conflict.

"We consider the U.N. Security Council directly responsible for the continuing tragedy of the Syrian people, the thousands of lives that were lost, the blood that was spilled and is still flowing at the hands of the regime's forces," said al-Thani.

Moscow played down the significance of the discussions in Munich, with one diplomatic source calling the talks between Lavrov and Alkhatib "simply routine meetings".

"We have presented our views when Minister Lavrov meet Alkhatib, we have noted his comments that there is still a chance for dialogue with Syrian government. That is something we have called for," said the Russian source.

"To what extent is that realistic, that's a different matter and there are doubts about that," said the source.

One source in Khatib's delegation said the offer of dialogue would find an echo among Syrians opposed to Assad who have not taken up arms "and want to get rid of him with the minimum bloodshed".

Fawaz Tello, a veteran Syrian opposition campaigner based in Berlin, said Alkhatib had made "a calculated political manoeuvre to embarrass Assad".

"But it is an incomplete initiative and it will probably fizzle out," Tello told Reuters. "The Assad regime cannot implement any item in the series of initiatives we have seen lately because it would simply fall."

Russia and Iran were already beginning to use Alkhatib's initiative negatively, he said, while "the regime and its allies will only treat Alkhatib's meetings as an additional opportunity to smash the rebellion or weaken it".

Asked about the risk of his strategy being seen as a sign of weakness in the opposition or frustration at the Free Syrian Army's gains, Alkhatib told Reuters in Munich: "The fighters have high morale and they are making daily advances."

(Additional reporting by Alexandra Hudson in Munich and Gabriela Baczynska in Moscow; Writing by Stephen Brown; Editing by Andrew Roche)

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