Karzai: Afghanistan, US in contacts with Taliban

KABUL, Afghanistan (AP) — President Hamid Karzai said Saturday that Afghanistan and the United States are engaged in peace talks with the Taliban, even as insurgents stormed a police station near the presidential palace, killing nine people.

The brazen attack in the heart of Kabul's government district provided a sharp counterpoint to Karzai's first official confirmation that the U.S. and Afghan governments are holding discussions with the Taliban.

The Obama administration neither directly confirmed nor denied Karzai's statement.

State Department spokesman Mark Toner said the U.S. has "consistently supported an Afghan-led" peace process.

"Over the past two years, we have laid out our red lines for the Taliban: They must renounce violence; they must abandon their alliance with al-Qaida; and they must abide by the constitution of Afghanistan," Toner said. "This is the price for reaching a political resolution and bringing an end to the military actions that are targeting their leadership and decimating their ranks."

Saturday's violence underscored the challenges facing any possible negotiated settlement to the decade-long war.

Three men dressed in Afghan army uniforms stormed the police station near the presidential palace and opened fire on officers, said Mohammed Honayon, a witness. The Interior Ministry said in a statement that one of the attackers detonated a suicide bomb vest outside the gates while the others rushed in and began shooting.

The crackle of gunfire echoed through the streets typically bustling with shoppers and government employees on a Saturday, the start of Afghanistan's work week. The fighting ended by 3 p.m. when security forces shot dead the two other attackers. Three police officers, one intelligence agent and five civilians were killed in the attack, the Interior Ministry said.

Taliban spokesman Zabiullah Mujahid claimed responsibility for the attack in a text message to The Associated Press, saying the group dispatched three suicide bombers.

The assault occurred shortly after Karzai announced during a speech at the presidential palace that his government and the U.S. have begun preliminary negotiations with the Taliban aimed at ending the conflict.

"In the course of this year, there have been peace talks with the Taliban and our own countrymen," Karzai said. "Peace talks have started with them already and it is going well. Foreign militaries, especially the United States of America, are going ahead with these negotiations."

Karzai said some of the Taliban emissaries that have met with members of the peace council he set up were only representing themselves, while others were speaking for the broader movement. The exact nature of the contacts was not immediately clear, and Karzai said that no government official outside of the council had contact with them.

"The peace council is trying to get connected to them to bring peace," the president said.

Attacks in the Afghan capital have been relatively rare, although violence has increased since the May 2 killing of Osama bin Laden in a U.S. raid in Pakistan and the start of the Taliban's annual spring offensive.

The capital is one of seven regions scheduled to be handed over to Afghan security control in late July — part of NATO's efforts to begin transferring security responsibilities ahead of its planned 2014 withdrawal from the country. The U.S. also plans to start drawing down troops in July.

The last major attack in Kabul took place last month when a suicide bomber wearing an Afghan police uniform infiltrated the main Afghan military hospital in late May, killing six medical students. A month before that, a suicide attacker in an army uniform sneaked past security at the Afghan Defense Ministry, killing three.

Insurgents also attacked three convoys ferrying fuel and supplies to NATO troops stationed in western and eastern Afghanistan, killing nine Afghan security guards and torching at least 15 fuel tankers, officials said.

Two of the supply convoys hit roadside bombs Saturday in eastern Ghazni province, killing four Afghan security guards escorting the trucks to a nearby base for Polish troops, said provincial police chief Mohammed Hussain.

Insurgents also ambushed a NATO fuel convoy late Friday along the border between Herat and Farah provinces in the west, killing five Afghan guards and wounding seven others before setting fire to the tankers, said Abdul Rashied, a local police chief.

In the eastern city of Jalalabad, insurgents kidnapped a provincial council member for Logar province and three of his family members.

Two NATO service members also were killed Saturday in an insurgent attack in southern Afghanistan, according to the alliance. At least 32 international soldiers have died in Afghanistan so far this month, raising the death toll for 2011 to 238.

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Associated Press writers Ahmad Seir and Amir Shah contributed to this report.

Kadhafi vows to defeat NATO

Libya's Moamer Kadhafi vowed Friday to defeat NATO as his forces launched a deadly rocket assault on rebel-held Misrata but lost a key stretch of road towards Tunisia's border.

Mahmud Jibril of the opposition National Transitional Council (NTC) meanwhile denied suggestions by a Russian envoy that the rebel leadership had been negotiating with his regime.

State television aired Kadhafi's comments in what it said was a live telephone call from the Libyan leader, who has gone underground since Western nations began waging an air war in March to protect civilians from a bloody protest crackdown.

"They will be defeated, NATO is bound to be defeated," Kadhafi said in the speech broadcast on loudspeakers in Tripoli's Green Square as thousands of flag-waving regime supporters staged their biggest rally for weeks.

"We are determined to change nothing in our country other than by our own free will, not because of the alliance's planes... We are resisting, we are fighting," he declared.

"If they come to the ground, we will wait for them, but they are cowards, they will not dare," he said in reference to NATO's insistance it will not deploy ground troops on Libyan soil in line with a UN resolution.

Kadhafi called on Libyans to prepare to liberate their country: "Get ready men and women to free Libya inch by inch."

His speech came hours after loud explosions shook Tripoli, where Kadhafi has his residence, as NATO warplanes constantly overflew the Libyan capital, an AFP reporter said.

In rebels' western enclave of Misrata, Kadhafi loyalists killed 10 people and wounded 40 when they pounded the lifeline port city with a volley of Grad rockets, rebel spokesman Ahmed Hassan told AFP.

All the victims were civilians, he said, and were hit when rockets slammed into the western and eastern gates of the city. The body of one of the dead, a woman, was found in the rubble of her house.

Hassan said Misrata was still the target of near daily bombardment by Kadhafi loyalists, and that there had been no air strikes by the NATO-led coalition on the embattled strongman's forces on Friday.

Elsewhere, a road linking the towns of Zintan and Yafran was under the complete control of the insurgents and dotted with destroyed tanks and abandoned government vehicles, an AFP correspondent said.

The road, a key sector of the route to the border with Tunisia, was seized two days after the rebels overran the nearby villages of Ghanymma, Lawania and Zawit Bagoul.

In the Italian city of Naples, where NATO's Libya operation is headquartered, Jibril, the head of international affairs in the NTC, dismissed reports the opposition was in negotiations with the Kadhafi regime.

"I can assure you there is and there was no negotiation between the NTC and the regime," said Jibril.

At a joint news conference with Italian Foreign Minister Franco Frattini, Jibril said that were negotiations to take place, the NTC would "announce it out of commitment to our friends all over the world".

Russian envoy Mikhail Margelov said Friday that Kadhafi representatives had made contact with the rebels in European capitals including Berlin, Paris and Oslo.

Margelov had said on a one day visit to Tripoli on Thursday that the contacts had only taken place in Paris, although he did not disclose the nature of the supposed negotiations.

France said it had no knowledge of the negotiations.

"If there have been direct contacts, we're not involved and we didn't set them up," foreign ministry spokesman Bernard Valero said.

Mahmudi said on Thursday Kadhafi's departure was a "red line" that cannot be crossed, despite growing international calls for him to quit and the armed insurrection against his 41-year rule.

An NTC official in the opposition stronghold Benghazi in eastern Libya told AFP on Friday that their position was unchanged.

"Kadhafi must go. Anyone from the rebel side who negotiates his staying in power would immediately have an NTC arrest warrant issued against him," the official said, on condition of anonymity.

And NATO on Friday slammed as "cynical" an offer in an Italian newspaper interview by Moamer Kadhafi's son, Seif al-Islam, that the regime in Tripoli was ready to organise internationally supervised elections.

"Once again, it is an instance of what I would call a cynical PR ploy," said alliance spokeswoman Oana Lungescu during a news briefing on the military campaign.

"It is hard to imagine that after 41 years in which Kadhafi abolished elections, the constitution, political parties, trade unions... (that) overnight a dictator would turn into a democrat."

Vietnam to hold live-fire drill as China rift grows

Vietnam announced Friday that it would hold a live-fire naval drill next week in the South China Sea as an escalating maritime dispute fuels tensions with Beijing.

Relations between China and Vietnam are at their worst in years as the two countries trade accusations over recent confrontations between their ships in potentially energy-rich contested waters.

The United States said it was "troubled" by tensions triggered by the maritime border dispute, calling for a "peaceful resolution".

A Vietnamese naval officer told AFP that the six hours of live-fire exercises would be held on Monday around Hon Ong island, about 40 kilometres (25 miles) off Quang Nam province in central Vietnam.

The officer declined to give the reason for the night drill or say how many vessels would be involved.

Foreign ministry spokeswoman Nguyen Phuong Nga said the exercises were part of routine annual training.

Tensions between the communist neighbours have risen sharply after Hanoi accused Chinese marine surveillance vessels of cutting the exploration cables of an oil survey ship in May inside its exclusive economic zone, where the drill will be.

On Thursday Vietnam alleged a similar incident in the zone, saying a Chinese fishing boat rammed the cables of another oil survey ship in its waters, describing it as a "premeditated" attack.

Beijing countered by warning Vietnam to halt all activities that it says violate its sovereignty in disputed South China Sea waters.

The two countries have long-standing disputes over the potentially oil-rich Paracel and Spratly archipelagos and surrounding sea.

The area where the live-fire exercise is planned is about 250 kilometres from the Paracels and almost 1,000 kms from the Spratlys.

Carl Thayer, a veteran analyst of Vietnam and the South China Sea, said the drill would be a way for Vietnam to send a message, after China on Thursday also said it would conduct naval exercises.

Thayer said Vietnam was firing "a soft warning shot across the bow, rather than a real one."

But he added such drills were not unprecedented as Vietnam held an air-defence drill on land about two months ago.

In a sign of how seriously Hanoi views the situation, Prime Minister Nguyen Tan Dung this week vowed to protect Vietnam's "incontestable" sovereignty of the Paracels and Spratlys.

Vietnam said it has since deployed eight boats to "escort" the ship involved in the May incident, without saying what kind of vessels. Analysts say the move raises the stakes in the dispute.

Beijing says it is committed to peace in the South China Sea, but its more assertive maritime posture has caused concern among regional nations.

Tensions have also risen this year between China and the Philippines, another claimant to the Spratlys, where Malaysia, Brunei and Taiwan also say they have a stake.

"Nobody wants war but when there is an escalation we will act," vice defence minister Lieutenant General Nguyen Chi Vinh told local media earlier this week.

US State Department spokesman Mark Toner on Friday said: "We've been troubled by some of these reports about the South China Sea and believe they only serve to raise tensions and don't help peace and security in the region," "We support a collaborative diplomatic process... and call on all claimants to conform all the claims, both land and maritime, to international law."

US Defense Secretary Robert Gates warned last weekend that clashes may erupt in the South China Sea unless nations with conflicting territorial claims adopt a mechanism to settle disputes peacefully.

Hundreds of people held a peaceful anti-China protest outside Beijing's embassy in Hanoi on Sunday, the largest action of its kind since 2007. Protests are rare in authoritarian Vietnam.

Tensions have also spread to the Internet.

More than 200 Vietnamese websites have been attacked and some defaced with Chinese flags, an Internet security firm said Friday.

The ministries of agriculture and foreign affairs are among those targeted since the beginning of June, said Nguyen Minh Duc, director of the state-linked Bach Khoa Internetwork Security Centre.

"We don't yet know if it concerns Chinese hackers," Duc said.

Hackers nab card data from 200,000 Citi customers

NEW YORK (AP) — Citigroup Inc. has become the latest victim in a string of high-profile data thefts by hackers targeting some of the world's best-known companies.

The New York bank said Thursday that about 200,000 Citibank credit card customers in North America had their names, account numbers and email addresses stolen by hackers who broke into Citi's online account site.

The breach comes after data attacks in recent weeks have struck at companies including Internet search leader Google Inc., defense contractor Lockheed Martin Corp, and media and electronics company Sony Corp.

Citigroup said it discovered that account information for about 1 percent of its credit card customers had been viewed by hackers. Citi has more than 21 million credit card customers in North America, according to its 2010 annual report. The bank, which discovered the problem during routine monitoring, didn't say exactly how many accounts were breached. Citi said it was contacting those customers.

The bank said hackers weren't able to gain access to social security numbers, birth dates, card expiration dates or card security codes. That kind of information often leads to identity theft, where cyber criminals empty out bank accounts and apply for multiple credit cards. That can debilitate the finances and credit of victims. Citi customers could still be vulnerable other problems. Details about their bank accounts and financial information linked to them could be acquired using the email information and account numbers hackers stole.

Federal regulators have taken notice and are asking banks to improve security.

"Both banks and regulators must remain vigilant," said Sheila Bair, chair of the Federal Deposit Insurance Corporation. She said federal agencies, including the FDIC, are developing new rules to push banks to enhance online account access.

The Citi incident is only the latest data breach at a major company.

--On June 1, Google said that the personal Gmail accounts of several hundred people, including senior U.S. government officials, military personnel and political activists, had been breached.

--On May 30, broadcaster PBS confirmed that hackers cracked the network's website and posted a phony story claiming dead rapper Tupac Shakur was alive in New Zealand.

--On May 28, Lockheed Martin said it had detected a "significant and tenacious attack" against its computer networks. The company said it took swift and deliberate actions to protect the network and the systems remain secure.

--In April, Sony's PlayStation Network was shut down in April after a massive security breach that affected more than 100 million online accounts.

--Also in April, hackers penetrated a network operated by a data marketing firm Epsilon. The company handles email communications for companies like Best Buy Co. and Target Corp.

The number of data breaches in the last two months sets a "high water mark," said John Ottman, CEO of Application Security Inc., a New York-based firm that specializes in securing databases, the big repositories companies use to organize account information and other data.

"Attackers have realized that most organizations have not properly protected databases," Ottman said.

Cyber attackers have a variety of less-dangerous motivations, from mischief to online activism. For example, a group identifying itself as LulzSec claimed credit for the fake PBS article calling it retaliation for a documentary about WikiLeaks, the website that publishes classified documents.

But often such data breaches are an attempt to steal personal data, which is likely the case with Citi. Hackers also will pose as legitimate companies in a tactic known as "phishing," where they try to get users to supply additional information like social security numbers and email or bank passwords to get access to their financial information.

The fact that the Citi hackers only got a few pieces of personal data on customers may limit what crooks can do with the information, said Susan Grant, director of consumer protection at Consumer Federation of America, a consumer advocacy group.

"But any ID theft is worrisome for consumers," Grant said. She believes companies are responsible for protecting their customers' information from internal and external abuse.

In an emailed statement, Sean Kevelighan, a spokesman for Citi said the bank is contacting affected customers and enhancing procedures to prevent a similar security breach from happening again.

"For the security of these customers, we are not disclosing further details," he said.

State Department says Clinton not going anywhere

WASHINGTON (AP) — The State Department shot down a report Thursday that Secretary of State Hillary Rodham Clinton has been in discussions with the White House about heading the World Bank.

"The story is completely untrue," Clinton spokesman Philippe Reines said in the United Arab Emirates, where Clinton was involved in international talks on Libya.

He said Clinton has not had any conversations with President Barack Obama, the White House "or anyone else about moving to the World Bank. She has expressed absolutely no interest in the job. She would not take it if offered."

Reuters, citing sources familiar with the discussions, said her discussions involved leaving the State Department next year to lead the World Bank.

The current bank president is Robert Zoellick, whose term does not end until 2012.

The bank declined to comment Thursday.

But at a news conference Wednesday in Olso, Norway, Zoellick was asked whether it's right that an American should lead the institution.

"I think this really is a decision for shareholders, and I think there are many talented non-Americans and Americans," he said. He added, "I think it's good for the U.S. to also have some responsibility, to have some of its nationals be engaged in multinational institutions."

Clinton has said she doesn't want to stay in her job if Obama wins a second term in 2012.

The nation's top diplomat also has said she neither has plans for a second White House bid nor interest in other posts, such as vice president or defense secretary.

"I am doing what I want to do right now and I have no intention or any idea even of running again," she told CNN in March. "I'm going to do the best I can at this job for the next two years."

Hotel mogul Leona Helmsley's millionaire pooch dies

ST. PETERSBURG, Fla (Reuters) - Leona Helmsley's very rich dog Trouble has died, a spokeswoman for the deceased hotel mogul's trust said on Thursday.

Helmsley, who owned the Helmsley hotel chain, left $12 million in her will to care for her beloved Maltese when she died in 2007. A judge reduced the amount to $2 million.

Though Trouble's death is just now being reported, the dog actually died in December at the age of 12, said Eileen Sullivan, spokeswoman for the Helmsley Charitable Trust.

"She was cremated and her remains are being privately retained. The funds held in trust for her care have reverted to the Leona M. and Harry B. Helmsley Charitable Trust for charitable purposes," Sullivan said in a statement.

Harry Helmsley was Leona's late husband.

Sullivan refused to give any other details about Trouble. The New York Daily News said the dog had been cared for by the manager of the Helmsley Sandcastle Hotel in Sarasota, Florida.

Leona Helmsley was known as "the queen of mean" for the way she treated hotel employees. She served 18 months in prison for tax evasion in the 1990s.

(Reporting by Robert Green; Editing by Colleen Jenkins and Greg McCune)