Extracts.

China to Properly Increase National Defense Budget Next Year.

Among the four major measures of active fiscal policy China to take next
year one is to properly lift national defense budget, says authoritative
sources, according to Hong Kong based Wen Wei Po December 26.

Continue pursuing proactivefiscal policy
Among the four major measures of active fiscal policy China to take next
year one is to properly lift national defense budget, says authoritative
sources, according to Hong Kong   based Wen Wei Po December 26.

China will continue to stick to active fiscal policy to further expand
domestic demands, says a report completed lately by authoritative
departments. The measures mainly include:

First, treasury bonds to be issued continuously to a ensure stable growth of
treasury bonds investment.


Secondly, taxes and fees to be cut for further reducing the expense burden
of peasants, enterprises and consumers.


Thirdly, policies are still to be adopted for increasing incomes of urban
and rural residents. Salary for employees in governmental departments will
be lifted at proper time and the standards spelt out to guarantee basic
livelihood of vulnerable groups also to be lifted.


Fourthly, more funds will be put into basic education and budget of national
defense would be expanded properly.

Rise of military budget normal
China's military budget has been on a rise in recent years. It was 93.47 bn
yuan in 1998, 107.67 bn yuan in 1999, 121.29 bn yuan in 2000 and 141.004 bn
yuan in 2001. 

Expert say the budget increase is quite normal since in recent years,
following central authority's instruction, the military troops have stopped
running business and there must be increased funds to guarantee normal
operations of military undertakings.

The increased budget will also be used to settle retired officers, improve
living standard of military staff, such as, by paying for salary and
allowance alongside with the growth of incomes for urban and rural
residents. 

****


Three killed in violence on Israel-Jordan border .

Two Arab gunmen and an Israeli soldier were killed on Tuesday in some of the
bloodiest violence in years on the usually quiet Israel-Jordan border, the
Israeli army said. 

Two Arab gunmen and an Israeli soldier were killed on Tuesday in some of the
bloodiest violence in years on the usually quiet Israel-Jordan  border, the
Israeli army said. 

The fighting, during an ambush of an Israeli patrol and a search for the
attackers at the River Jordan, underlined the absence of peace in the Holy
Land, where Christmas was marked in a sombre mood after 15 months of
Israeli-Palestinian bloodshed.

There was no immediate claim of responsibility for the assault amid
simmering Palestinian anger over Israel's ban on President Yasser Arafat's
annual Christmas pilgrimage to Bethlehem.

Describing the shooting attack about 15 km (nine miles) north of the West
Bank, an Israeli army officer said the commander of the patrol and a tracker
were shot and wounded in the initial gunfire near the border fence in a
farming area. 

A soldier was killed and two others were wounded in an ensuing battle, the
army said, adding that the bodies of two "armed terrorists" were later found
just inside Israel.

Security sources first reported that Israeli forces had entered Jordan in
pursuit of the gunmen but later said troops crossed the frontier fence --
short of the actual border -- without leaving Israeli territory.

Israel and Jordan signed a peace treaty in 1994.

While ambulances rushed in to evacuate the wounded, an Israeli helicopter
gunship poured machinegun fire into a grove of trees where the gunmen were
believed to have fled.

ordanian Minister of State Saleh Qallab denied reports Israeli forces had
crossed the border and said there was no proof the infiltrators had come
from Jordan. 

The raid was one of the most serious incidents of bloodshed along the
frontier in years. 

The bloodiest attack since the 1994 peace treaty occurred in 1997 when a
Jordanian soldier killed seven Israeli schoolgirls at the border.

In 1996, Palestinian gunmen who infiltrated from Jordan killed three Israeli
soldiers in the West Bank.

****



Israeli Troops Raid Palestinian Village, Arrest 18.

Israeli troops swept into a West Bank village on Wednesday and seized 18
activists from Palestinian President Yasser Arafat's Fatah organization,
Palestinian security sources said.

Israeli troops swept into a West Bank village on Wednesday and seized 18
activists from Palestinian President Yasser Arafat's Fatah organization,
Palestinian security sources said.

About 300 soldiers entered the Palestinian village of Azzoun, southwest of
the city of Nablus, before dawn and arrested the men, three of whom were
also members of the Palestinian general intelligence service, the sources
said. 

The Israeli army declined comment. Israel has accused some members of
Fatah's military wing and Palestinian security services of involvement in
attacks on Israelis during a 15-month-old Palestinian uprising against
Israeli occupation.

Arafat called on December 16 for an end to all assaults on Israelis and
ordered the arrest of dozens of militants following a wave of Palestinian
suicide attacks. Israel has branded the arrests a sham and has conducted a
series of sweeps for militants in Palestinian areas.

In the latest raid, Israeli troops seized 18 men in a house-to-house search
of Azzoun and withdrew five hours after they arrived, Palestinian security
sources said. No shooting was reported.

Azzoun, which is close to a cluster of Jewish settlements, lies in an area
officially under overall Israeli security control and Palestinian civil
administration. 

****


Iraq's Foreign Minister to Visit Tehran Next Month.
 
Iraq's Foreign Minister Naji Sabri said on Tuesday he would visit Iran early
next year to discuss issues blocking the normalisation of relations between
the two Muslim neighbours since their runinous war in the 1980s.

Iraq's Foreign Minister Naji Sabri said on Tuesday he would visit Iran
early next year to discuss issues blocking the normalisation of relations
between the two Muslim neighbours since their runinous war in the 1980s.

Sabri said he had discussed the visit -- the first such exchange in several
years -- with Iran's Foreign Minister Kamal Kharrazi at the sidelines of the
ministerial meeting of the Organisation of the Islamic Conference in Doha on
December 10. 

"I will visit Iran next month, God willing, to hold detailed talks on
pending issues," Iraq's satellite channel quoted Sabri as saying.

"There are files still pending since the 1980s between the two countries and
we are endeavouring to close them and currently there is an Iranian
delegation in Baghdad to solve the problem of displaced people," he said.

Ties have improved between the two countries which fought a an
eight-year-long war in the 1980s. Baghdad has reopened its borders for
Iranian pilgrims to visit Shi'ite shrines in Iraq.

****



Chinese FM in Cairo for Bilateral Ties, Mideast Situation.

Chinese Foreign Minister Tang Jiaxuan arrived in Cairo Tuesday evening for
talks with his Egyptian counterpart Ahmed Maher and Arab League chief Amr
Moussa. 

Chinese Foreign Minister Tang Jiaxuan arrived in Cairo Tuesday evening for
talks with his Egyptian counterpart Ahmed Maher and Arab League chief Amr
Moussa. 

Describing Tang's visit as "very important," Maher said earlier Tuesday that
both sides will discuss the latest developments in the occupied Palestinian
territories, bilateral relations and anti- terrorism issues.

Referring to his scheduled talks with Tang on Wednesday, Moussa said on
Tuesday that they will exchange views on the current situation in the Middle
East and recent developments in Afghanistan.

Egypt is the fourth stop of Tang's Mideast tour, which has taken him to
Lebanon , Syria  and Jordan.

****



Iran, Yugoslavia Pledge to Develop Closer Ties.

Iranian Foreign Minister Kamal Kharazi and his visiting Yugoslavian
counterpart Goran Svilanovic Tuesday pledged to expand bilateral ties in
various fields, the official IRNA news agency reported.

Iranian Foreign Minister Kamal Kharazi and his visiting Yugoslavian
counterpart Goran Svilanovic Tuesday pledged to expand bilateral ties in
various fields, the official IRNA news agency reported.

They made the pledge during their talks on bilateral, regional and
international issues Tuesday.

Kharazi expressed satisfaction with development in Yugoslavia and stressed
that the two countries, both members of the Group of 77 and Non-aligned
Movement, should strengthen their bilateral ties and cooperation in regional
and international affairs.

Svilanovic, who arrived here on Monday evening for a two-day visit, briefed
Kharazi on the developments in his country, including joint investments,
transfer of technology and industrial cooperation, and called for Iran's
participation in rebuilding his country.

Iran has strategic location in the region and has played a key role in the
Muslim world, he said, pledging that Belgrade would do its best to promote
ties with Iran in all areas.

During the meeting, the two sides also inked a cultural exchange agreement
for next three years and two memorandums of understanding on cooperation
between the two foreign ministries and anti- narcotics smuggling.

The two ministers also called for restoration of Palestinian people's
legitimate rights and the return of the Palestinian refugees to their
homeland. 

The international community, especially the European countries, should exert
greater pressure on Israel   to halt the killing of Palestinian people, they
said. 

****



Iraq Presents U.N. Its Oil-for-food Purchase Plan.

Iraq on Tuesday presented the United Nations its purchase plan for the 11th
phase of the U.N. oil-for-food program, the official Iraqi News Agency (INA)
reported. 

Iraq  on Tuesday presented the United Nations its purchase plan for the 11th
phase of the U.N. oil-for-food program, the official Iraqi News Agency (INA)
reported. 

An official in Iraq's U.N. mission submitted the plan in a letter to U.N.
Secretary-General Kofi Annan, the report said, without elaborating.

Annan in October criticized Iraq for not spending enough of its oil revenues
on food and making "little or no provision" for the specific needs of
vulnerable groups such as female-headed households with young children.

The U.N. oil-for-food program, launched in 1996, allows Iraq to sell oil and
use part of the revenues to buy food, medicine and other essentials for its
22 million people to offset the impact of the U.N. embargo imposed on Iraq
for its 1990 invasion of Kuwait.

At the end of last month, U.N. Security Council renewed the program for
another six months to May 30, 2002.

The U.N. controls the proceeds from Iraq's oil sales and puts them into an
escrow account to pay for the goods Iraq orders within the framework of the
U.N. oil-for-food program.













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