Sharon denies alleged financial wrongdoing

SALEM VILLAGE, Israel

Prime Minister Ariel Sharon yesterday denounced reports that he is under investigation for receiving $1.5 million from a South Africa-based businessman, calling it slander designed to prevent his re-election.

The Haaretz daily reported Tuesday that Sharon and his son Gilad were under police investigation over funds received from Cyril Kern, who has been a close friend since the 1948 war that established the Jewish state.

Israel’s attorney general confirmed yesterday that Israel has asked South Africa for assistance in the case.

On Tuesday Sharon dispatched aides to deny any wrongdoing and explain that the money was a loan that was properly reported. But as pressure grew on the prime minister to speak out himself, he addressed the issue during a campaign tour in northern Israel yesterday, claiming the reports were politically motivated.

“We’re talking about a vicious political slander,” Sharon told reporters. “I will disprove this slander with documents and facts. Those who are spreading this political libel have one aim: to bring down the prime minister.”

Israeli Attorney General Elyakim Rubinstein, speaking to Army Radio yesterday, confirmed the investigation but also criticized the leak as politically motivated. “The motive is the timing of the elections and the current situation,” he said.

Gunman from Syria killed by Israeli troops

JERUSALEM

Israeli troops shot and killed a gunman who infiltrated from Syria yesterday, an unusual incident on a border that has been calm for decades.

Pressure increased on Israel, meanwhile, to reverse course and allow a Palestinian delegation to attend a conference in London designed to ease tensions and promote Palestinian reform.

Israeli soldiers exchanged fire with an armed man who crossed into the Israeli-controlled Golan Heights from Syria, killing him and capturing a second infiltrator, who was unarmed, Israeli area commander Brig. Gen. Avi Mizrahi said.

A third man fired from inside Syria, but “we didn’t fire back because didn’t want to make the situation worse,” he said.

It was a rare occurrence on the Israel-Syria border, though the two countries are bitter enemies. The last reported infiltration was in September 2001, when Israeli soldiers found a bag of weapons and explosives on the Israeli side of the border. The infiltrator in that incident apparently escaped back into Syria.

Israel captured the strategic plateau overlooking the country’s northern valley and the Sea of Galilee in the 1967 Mideast war. Syria demands the land be returned in exchange for peace, but negotiations broke down in 2000.

The Israeli military said it had been at least 15 years since it had caught an armed infiltrator crossing the border from Syria. United Nations observers on the border were unavailable for comment.

White House open to talks with N. Korea

WASHINGTON

The Bush administration is looking past a bristling statement by North Korea for a response to its offer of direct talks. Only U.S. incentives for the North to stop its nuclear weapons program are being ruled out, the White House says.

“The ball is in their court,” presidential spokesman Ari Fleischer said yesterday. “They are the ones that created this situation by reneging on agreements that they made.”

But Fleischer also emphasized that Washington’s offer to hold talks was unconditional and that the United States was “not ruling anything else out” apart from inducements to get the North to again freeze its nuclear weapons programs.

The administration was stepping up its consultations with Asian allies and China. President Bush’s national security adviser, Condoleezza Rice, set up a meeting yesterday with her South Korean counterpart, Yim Sung-joon.

Beginning Sunday and lasting through Jan. 20, Assistant Secretary of State James Kelly plans talks in South Korea, China, Singapore, Indonesia and Japan.

Kelly has no plans to go to North Korea, where he held talks last year, department spokesman Richard Boucher said.

Iraqi ofcials protest U.S., British actions

BAGHDAD, Iraq

Coalition warplanes struck air defense targets in southern Iraq yesterday for the second time this week, and a key Iraqi official said the United States and Britain were bent on war with Baghdad to subjugate the Middle East.

In Moscow, meanwhile, Iraq’s ambassador to Russia dismissed rumors Saddam Hussein might go into exile to avoid war and said the Iraqi leader would “fight to the last drop of blood” to defend his country.

Concerns war is imminent have mounted, with the United States and Britain announcing the dispatch of thousands more troops and weapons to the Persian Gulf region because of misgivings about Iraq’s commitment to abandon weapons of mass destruction.

Iraq insists it has no such weapons and maintains that claims to the contrary are simply a pretext for war.

“The aggressors in Washington and London are preparing for a devastating aggression against … the people of Iraq, and they would like once again to destroy the City of Peace (Baghdad) as they did in 1991,” Deputy Prime Minister Tariq Aziz told a visiting South African delegation yesterday.

Aziz said U.N. arms inspectors, who returned to Iraq in November after a four-year hiatus, had strayed beyond the search for weapons of mass destruction.

“They are searching for other information about Iraq’s conventional military capabilities, the Iraqi scientific and industrial capability in the civilian area, and also espionage questions,” Aziz said.

U.N. spokesman Hiro Ueki denied those allegations and said U.N. officials had received no formal complaint from Iraqi authorities about alleged espionage.

The United States has accused Saddam of stockpiling weapons of mass destruction and says it will use force if necessary to disarm him. Iraq insists it has destroyed its biological and chemical weapons and halted its nuclear program and the making of banned missiles. There have been no known instances of serious problems encountered by the inspectors since they began work Nov. 27.

Nevertheless, the pace of the U.S.-British buildup has accelerated. The American battle staff that would run a military campaign against Iraq is beginning to assemble at a command post in the small gulf state of Qatar, U.S. officials said.

Venezuelan bank workers join strike

CARACAS, Venezuela

Venezuela’s currency reached a record low against the dollar yesterday after banks said they will close for two days to support a 38-day-old strike seeking President Hugo Chavez’s ousting.

Demand for dollars soared on speculation that Chavez’s government, facing a fiscal crisis because of dwindling oil and tax revenues, would devalue the bolivar to balance its budget. Nervous depositors wanted dollars before the banks closed, not knowing what the bolivar would be worth when banks reopen next week.

Jose Torres, president of Fetrabanca, the umbrella group for bank workers unions, said banks will shut down today and tomorrow, adding weight to a strike that has dried up oil income in the world’s fifth largest oil exporter.

The bank strike underscored the intransigence of both sides, despite international pleas for them to help the Organization of American States negotiate a solution to the standoff.

The bolivar plunged by as much as 13 percent before its official close at 1,510 bolivars per dollar, down 6 percent, said the Central Bank, which uses an average of all the day’s trading prices. Previously the lowest close was 1,492 per dollar on Sept. 15.

Earlier yesterday, the government had tried to raise money by offering 40.5 billion bolivars in government bonds, worth at $29 million at that point. There were no takers.

National guardsmen fired tear gas yesterday to disperse pro-Chavez street activists throwing objects at the National Elections Council building, where opposition leaders were holding a news conference.

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