World News joined 0001

[OMEN]

The two top gas executives from Russian and Ukraine held talks in Moscow today, in the first face-to-face contact since their row choked off supplies to EU countries in bitter winter weather.

There was no immediate word on the outcome of the talks, but further urgent diplomacy was planned for later today when delegations from Kiev and Moscow were to meet officials from a European Union increasingly concerned at the gas cut-offs.

Russia's state-controlled gas export monopoly Gazprom fully suspended supplies of transit gas towards Ukraine yesterday, saying there was no longer any point delivering the gas because Kiev had shut down the pipelines.

Ukraine, whose pro-Western leaders have clashed with the Kremlin over their drive to join NATO, said Russia was deliberately starving Europe of gas. Russia cut off gas for Ukraine's domestic consumption on New Year's Day.

The row over gas prices and debts owed by Ukraine to Russia cut heating to tens of thousands of households in Bulgaria and hit supplies as far west as France and Germany as Europe faced freezing mid-winter temperatures.

In Bulgaria, one of the worst affected countries, at least 45,000 households were without central heating yesterday. Schools were shut and some companies were closed. Temperatures in Sofia fell to -14 degrees overnight.

Gazprom Chief Executive Alexei Miller and Oleh Dubyna, head of Ukrainian state energy firm Naftogaz, met overnight in Moscow, a Gazprom official told Reuters. The official declined to give any details.

The two men "discussed ways out of this crisis situation", Russian news agencies quoted Gazprom spokesman Sergei Kupriyanov as saying.

Miller and Dubyna were expected to meet again in Brussels when they hold talks with European Energy Commission Andris Piebalgs and Czech Trade and Industry Minister Martin Riman, representing the Czech EU presidency.

Against a backdrop of mounting pressure from European countries on both Kiev and Moscow to get gas flowing again, Russian President Dmitry Medvedev spoke by telephone late last night with Ukrainian President Viktor Yushchenko.

Medvedev told his Ukrainian counterpart gas supplies had become hostage to squabbling in the Kiev leadership and that Moscow would only resume pumping gas for Ukraine's own use if Kiev agreed to pay a market price for the fuel.

Reuters

[OMEN]

The euro extended its declines against the dollar and the yen this morning.

The common currency traded at $1.3582 as of 8.06am in London today, from $1.3644 yesterday. The euro also weakened to 124.51 yen, from 126.42.

Against sterling the euro weakened to 90.5 cents as it continued its retreat from highs of over 98 cents at the end of December.

Agencies

[OMEN]

Several rockets have slammed into northern Israel from Lebanon with the army returning fire.

'Three rockets landed in Israel fired from Lebanon,' said police spokesman Micky Rosenfeld, adding that two people were lightly wounded in the area around the northern town of Nahariya.

'We carried out direct fire at the source of the rocket fire from Lebanon,' an Israeli army spokeswoman said.
The rockets fell a day after the chief of Lebanon's Hezbollah, a Shia militia with which Israel fought a 34-day war in 2006, warned that 'all possibilities' were open against Israel amid its deadly offensive in Gaza.

A Hezbollah spokesman had 'no immediate confirmation' on the strike and Haidar Dokmak, a Hezbollah official in southern Lebanon said: 'We are verifying the report.'

The last time rockets from Lebanon in northern Israel was on 17 June 2007 slamming into the northern town of Kiryat Shmona causing minor damage and no injuries.

At the time, Hezbollah denied responsibility and Israel also said Hezbollah was not involved in the attack and blamed it on an unnamed Palestinian group.

Israeli media cited unnamed military sources saying that today's attack was likely to have also come from Palestinian groups firing in retaliation of Israel's deadly offensive in Gaza.

Officials from the Lebanese chapters of the two main Palestinian factions, Fatah and Hamas, denied that their groups were responsible for the rockets.

Residents of southern Lebanon began to leave the area after the early morning fire.

Israel and Hezbollah militia fought a 34-day war in 2006, after guerrillas from the Lebanese Shia movement seized two Israeli soldiers in a deadly cross-border raid.

The war killed more than 1,200 Lebanese, mostly civilians, and more than 160 Israelis, mostly soldiers.

Israel is currently in the 13th day of a massive offensive in Gaza.

Israeli warplanes, meanwhile, bombed targets across Gaza and tanks advanced in the Hamas-ruled territory as US backing for a truce proposal raised expectations of an end to the onslaught that has killed more than 600 Palestinians.

In the occupied West Bank, Israeli police shot and killed a Palestinian man who tried to set fire to a gas station at a Jewish settlement, an Israeli rescue service said.

Police confirmed the shooting but not the man's condition.

Residents in Gaza described the overnight bombardment to the east of the city as among the heaviest in the offensive.

In the south of the territory tanks advanced closer to the town of Khan Younis.

Although Israel pressed on with the offensive, it said it accepted the 'principles' of a European-Egyptian ceasefire proposal.

The US urged Israel to study the plan.

Israel's assault resumed after a brief pause yesterday to help Gaza's inhabitants stock up on much-needed supplies.

20 Palestinians were killed yesterday, medics said, including three children in an air strike on a car.

RTE

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