Israel holding fire during Egypt premier's visit to Gaza

JERUSALEM (AP) — Israel offered to suspend its offensive in the Gaza Strip on Friday during a brief visit by Egypt's premier there if militants refrain from firing rockets at Israel, an official said, but the Palestinians unleashed a fresh salvo.

An official in Prime Minister Benjamin Netanyahu's office said the Israeli leader was responding to an Egyptian request.

Gaza militants stepped up their barrages of rocket fire into Israel as Hesham Kandil crossed into Gaza before midday through the only border post with Egypt, heavily guarded by Egyptian security personnel wearing flak jackets and carrying assault rifles.

He was greeted by Gaza's Hamas prime minister, Ismail Haniyeh, who ventured out in public for the first time since Israel launched the offensive Wednesday by assassinating the militant group's military commander.

Israel told the Egyptians the military "would hold its fire on the condition that during that period, there won't be hostile fire from Gaza into Israel," the Israeli official said. "Prime Minister Netanyahu is committed to the peace treaty with Egypt, which is in the strategic interest of both countries," he added, speaking on condition of anonymity to discuss the diplomatic exchange.

There were no immediate reports of Israeli retaliation for the latest salvo. Israeli police spokesman Micky Rosenfeld said the militants were making a clear statement. "There's no intention whatsoever to stop firing into Israel," he said.

Three days of fierce fighting between Israel and Gaza militants has widened the instability gripping the region, straining already frayed Israel-Egypt relations. The Cairo government recalled its ambassador in protest.

Egypt said Kandil's three-hour visit Friday was meant as a show of solidarity with the Palestinian territory's militant Hamas rulers.

Egyptian intelligence officials involved in negotiations to end previous rounds of fighting are accompanying Kandil on his visit, an Egyptian diplomat said, suggesting it was more than a display of support.

The diplomat said Gaza militants have told Egyptian intelligence officials they would be willing to hold their fire if Israel would commit to mediation to stop its military operation and targeted killings.

Word of the possible pause in the fighting came after a night of fierce exchanges and signals that Israel might be preparing to invade Gaza. Overnight, the military said it targeted about 150 of the sites Gaza gunmen use to fire rockets at Israel, as well as ammunition warehouses, bringing to 450 the number of sites struck since the operation began Wednesday.

Israeli troops, tanks and armored personnel carriers massed near the Palestinian territory, signaling a ground invasion might be imminent.

Militants unleashed dozens of rocket barrages overnight.

Fighting between the two sides escalated sharply Thursday with a first-ever rocket attack from Gaza on the Tel Aviv area, menacing Israel's most densely populated area. No casualties were reported there, but three people died in the country's rocket-scarred south when a projectile slammed into an apartment building.

The death toll in Gaza was 19, including five children, according to Palestinian health officials.

Early Friday, 85 missiles exploded within 45 minutes in Gaza City, sending black pillars of smoke towering above the coastal strip's largest city. The military said it was targeting underground rocket-launching sites.

One missile flattened sections of the Interior Ministry, leaving a huge pile of rubble, and another hit an uninhabited house belonging to a senior Hamas commander. Those strikes, together with an attack on a generator building near Haniyeh's home, signaled that Israel was expanding its offensive beyond military targets.

Ten-month-old Haneen Tafesh was killed Thursday when flying shrapnel from an air attack on a field next to her family's shack struck her in the head.

"What did she do? Did she fire any rockets?" asked her 23-year-old father, Khaled Tafesh, as he waited outside the Shifa hospital morgue in Gaza City, waiting for the funeral of his only child to begin.

Israel and Hamas had largely observed an informal truce since Israel's devastating incursion into Gaza four years ago, but rocket fire and Israeli airstrikes on militant operations continued sporadically.

The Israeli offensive has not deterred the militants from firing more than 400 rockets aimed at southern Israel, the military said. On Thursday, they also unleashed for the first time the most powerful weapons in their arsenal — Iranian-made Fajr-5 rockets capable of reaching Tel Aviv.

The two rockets that struck closest to Tel Aviv appear to have landed in the Mediterranean Sea, defense officials said, and another hit an open area on Tel Aviv's southern outskirts.

No injuries were reported, but the rocket fire sowed panic in Tel Aviv and made the prospect of a ground incursion more likely. The government later approved the mobilization of up to 30,000 reservists for a possible invasion.

Netanyahu said the army was hitting Hamas hard with what he called surgical strikes, and warned of a "significant widening" of the Gaza operation. Israel will "continue to take whatever action is necessary to defend our people," said Netanyahu, who is up for re-election in January.

At least 12 trucks were seen transporting tanks and armored personnel carriers toward Gaza late Thursday, and buses carrying soldiers headed toward the border area.

An Israeli ground offensive could be costly to both sides. In the last Gaza war, Israel devastated parts of the territory, setting back Hamas' fighting capabilities but also paying the price of increasing diplomatic isolation because of a civilian death toll numbering in the hundreds.

In the current round of fighting, the civilian casualties have been relatively low and the Israeli strikes seem to be more surgical.

In other ways, the latest hostilities are reminiscent of the first days of that three-week offensive against Hamas. Israel also caught Hamas off guard then with a barrage of missile strikes and threatened to follow up with a ground offensive.

Since then, Israel has improved its missile defense systems, but it is facing a more heavily armed Hamas. Israel estimates the militants have 12,000 rockets, including more sophisticated weapons from Iran and from Libyan stockpiles plundered after the fall of Moammar Gadhafi's regime there last year.

___

Laub reported from Gaza City, Gaza Strip.

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Rising obesity strains Europe’s shrinking health budgets
















LONDON (Reuters) – More than half of Europeans are obese or overweight, adding significant pressure to healthcare costs at a time when spending is being cut by governments, the OECD and European Commission said on Friday.


On average across the European Union, health spending per capita rose by 4.6 percent a year in real terms between 2000 and 2009, but fell 0.6 percent in 2010.













In a report on health across the 27-nation bloc, the Paris-based Organisation for Economic Co-operation and Development and the Brussels-based Commission, said 52 percent of adults in the EU are now overweight or obese.


The report blamed physical inactivity and the widespread availability of energy-dense, sugary and fatty foods.


In 18 countries out of the 27 member states, the proportion of overweight and obese adults now exceeds 50 percent and the obesity rate, at 17 percent on average across the region, has doubled since 1990 in many countries.


“(The rise) is a major public health concern,” the report said. “Because obesity is associated with higher risks of chronic illnesses, it is linked to significant additional healthcare costs.”


The report noted that the growing cost burden coincided with governments around Europe cutting spending to reduce the debts left over from the 2008 financial crisis.


“Spending had already started to fall in 2009 in countries hardest hit by the economic crisis,” it said. “But this was followed by deeper cuts in 2010 in response to growing budgetary pressures and rising debt-to-GDP ratios.”


As a result, EU members spent an average of 9.0 percent of their GDP on health in 2010, up from 7.3 percent in 2000, but down from a peak of 9.2 percent in 2009.


The Netherlands was the highest, devoting 12 pct of its gross domestic product to health in 2010, followed by France and Germany, both at 11.6 percent.


The rate of obesity in France is close to twice what it was in 1990 but at 12.9 percent it is still less than half the rate in Britain of 26.1 percent.


The risk of diseases such as diabetes, hypertension, heart disease, asthma, arthritis and some forms of cancer is increased by obesity.


Although it was affecting all populations, obesity tended to be worse among the poor and less well educated, and was more prevalent in women than men.


People with a body mass index (BMI) of 25 to 30 are classed as overweight while those at 30 or higher are obese. BMI is formula of weight and height that differs slightly depending on whether it is done in kilograms and meters or pounds and inches.


Despite the fall in health spending, life expectancy in the EU continued to rise and stood at an average 79 years in 2010, up more than six years since 1980.


This was driven by improved living and working conditions as well as better access to higher quality healthcare.


But Yves Leterme, the OECD Deputy Secretary-General, and Paola Testori Coggi, head of the Commission’s directorate for health, had a warning for EU governments.


“If the report does not yet show any worsening health outcomes due to the crisis, there is no cause for complacency – it takes time for poor social conditions or poor quality care to take its toll from people’s health,” they said in a joint foreword to the report.


(Editing by Jeremy Gaunt)


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Canada’s Carney says rate hikes “less imminent”
















TORONTO (Reuters) – Interest rate hikes have become less imminent than the Bank of Canada once expected, although rates are still likely to rise, central bank Governor Mark Carney said in an interview published on Saturday.


“Over time, rates are likely to increase somewhat, but over time, so a less imminent timing relative to our expectation,” Carney said in an interview with the National Post newspaper.













Canada’s economy rebounded better than most from the global economic recession, and the Bank of Canada is the only central bank in the Group of Seven leading industrialized nations that is currently hinting at higher interest rates.


But Carney has also made clear that there will be no rate rise for a while, despite high domestic borrowing rates that he sees as a major risk to a still fragile economy.


“We’ve been very clear in terms of lines of defense in addressing financial vulnerabilities,” he said in the interview. “And the most prominent one, obviously, in Canada, is household debt.”


He said the bank was monitoring the impact of four successive government moves to tighten mortgage lending, which aimed to take the froth out of a hot housing market without causing a damaging crash in prices.


A Reuters poll published on Friday showed the majority of 20 forecasters believe the government has done enough to rein in runaway prices, preventing the type of crash that devastated the U.S. market.


The experts expect Canadian housing prices to fall 10 percent over the next several years, but they do not expect the recent property boom to end in a U.S.-style collapse.


(Reporting by Janet Guttsman; Editing by Vicki Allen)


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RIM to offer free voice calls over Wi-Fi with BBM
















TORONTO (AP) — BlackBerry users will soon be able to make free voice calls over a Wi-Fi network using the popular BBM messaging service.


Research In Motion Ltd. announced Wednesday that it’s adding the feature to BBM. Users will be able to switch back and forth from a text chat to a voice call. A split-screen option will let them talk and text at the same time.













The new feature is a free update for existing customers and comes months before RIM introduces its new BlackBerry 10 smartphones, which are seen critical to RIM’s survival.


RIM made a surprise disclosure in its most recent earnings report in announcing that the number of subscribers grew, thanks in part to emerging markets and its popular BBM service. It’s struggling in North America as customers migrate to flashier iPhones and Android phone.


RIM stopped short of offering the BBM voice feature over wireless carriers’ own cellular networks. Doing so would have potentially created more congestion on cellular data networks and deprive carriers of revenue for voice calls. With the new feature, the free calls are limited to times and places where Wi-Fi is available.


The Canadian company said the BBM voice feature is especially attractive for developing markets. Unlike regular texts, BBM messages are not charged on a per-text basis.


Although RIM is struggling in North America, the BlackBerry continues to sell well in such markets as South Africa, Nigeria and Indonesia.


The BBM service has long been a reason for BlackBerry users to not defect to other smartphones but there are rival messaging services.


RIM said the BBM voice update is currently available for BlackBerry smartphones running the BlackBerry 6 operating system or higher, with plans for BlackBerry 5 later. RIM’s latest phones run the 7 operating system. The next version, BlackBerry 10, will come soon after a Jan. 30 launch event.


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Jon Bon Jovi’s daughter arrested after suspected drug overdose
















(Reuters) – Rock star Jon Bon Jovi‘s daughter was arrested in New York state on Wednesday on drug possession charges following a suspected heroin overdose, local police said.


Stephanie Bongiovi, 19, was found unresponsive in a dormitory room at Hamilton College in Clinton, New York from an alleged overdose and taken to a local medical facility, according to the Town of Kirkland Police Department.













Heroin and marijuana were found in the dorm room during a search, police said.


Bongiovi was later booked on misdemeanor charges of possession of a controlled substance (heroin), marijuana possession and criminal use of drug paraphernalia. She has since been released, police said.


Representatives of the singer declined to comment.


Police said Ian S. Grant, 21, a student who was in the same room as Bongiovi, was also charged with possession of a controlled substance (heroin) and later released. Both Bongiovi and Grant will appear in court at a later date.


Hamilton College declined to comment on the arrests or Bongiovi’s health but said it is cooperating with the police investigation.


Bongiovi is the oldest of four children of rocker Bon Jovi and his wife, Dorothea Hurley.


(Reporting By Eric Kelsey and Piya Sinha-Roy; Editing by Patricia Reaney and Kenneth Barry)


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Sources: BP to pay record fine for Gulf Coast disaster

HOUSTON/WASHINGTON (Reuters) - BP Plc is expected to pay a record U.S. criminal penalty and plead guilty to criminal misconduct in the 2010 Deepwater Horizon disaster through a plea deal reached with the Department of Justice (DoJ) that may be announced as soon as Thursday, according to sources familiar with discussions.


Three sources, who spoke to Reuters on condition of anonymity, said BP would plead guilty in exchange for a waiver of future prosecution on the charges.


BP confirmed it was in "advanced discussions" with the DoJ and the Securities & Exchange Commission (SEC).


The talks were about "proposed resolutions of all U.S. federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident," it said in a statement on Thursday, but added that no final agreements had been reached.


The discussion do not cover federal civil claims, both BP and the sources said.


London-based oil giant BP has been locked in months-long negotiations with the U.S. government and Gulf Coast states to settle billions of dollars of potential civil and criminal liability claims resulting from the April 20, 2010, explosion aboard the Deepwater Horizon rig.


The sources did not disclose the amount of BP's payment, but one said it would be the largest criminal penalty in U.S. history. That record is now held by Pfizer Inc, which paid a $1.3 billion fine in 2009 for marketing fraud related to its Bextra pain medicine.


The DoJ declined to comment.


The deal could resolve a significant share of the liability that BP faces after the explosion killed 11 workers and fouled the shorelines of four Gulf Coast states in the worst offshore spill in U.S. history. BP, which saw its market value plummet and replaced its CEO in the aftermath of the spill, still faces economic and environmental damage claims sought by U.S. Gulf Coast states and other private plaintiffs.


The fine would far outstrip BP's last major settlement with the DoJ in 2007, when it payed about $373 million to resolve three separate probes into a deadly 2005 Texas refinery explosion, an Alaska oil pipeline leak and fraud for conspiring to corner the U.S. propane market.


The massive settlement, which comes a week after the U.S. presidential election, could ignite a debate in Congress about how funds would be shared with Gulf Coast states, depending on how the deal is structured. Congress passed a law last year that would earmark 80 percent of BP penalties paid under the Clean Water Act to the spill-hit states of Louisiana, Mississippi, Alabama, Florida and Texas.


POTENTIAL LIABILITY


In an August filing, the DoJ said "reckless management" of the Macondo well "constituted gross negligence and willful misconduct" which it intended to prove at a civil trial set to begin in New Orleans in February 2013. The U.S. government has not yet filed any criminal charges in the case.


Given that the deal will not resolve any civil charges brought by the Justice Department, it is also unclear how large a financial penalty BP might pay to resolve the charges, or other punishments that BP might face.


Negligence is a central issue to BP's potential liability. A gross negligence finding could nearly quadruple the civil damages owed by BP under the Clean Water Act to $21 billion in a straight-line calculation.


Still unresolved is potential liability faced by Swiss-based Transocean Ltd, owner of the Deepwater Horizon vessel, and Halliburton Co, which provided cementing work on the well that U.S. investigators say was flawed. Both companies were not immediately available for comment.


According to the Justice Department, errors made by BP and Transocean in deciphering a pressure test of the Macondo well are a clear indication of gross negligence.


"That such a simple, yet fundamental and safety-critical test could have been so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence," the government said in its August filing.


Transocean in September disclosed it is in discussions with the Justice Department to pay $1.5 billion to resolve civil and criminal claims.


The mile-deep Macondo well spewed 4.9 million barrels of oil into the Gulf of Mexico over a period of 87 days. The torrent fouled shorelines from Texas to Florida and eclipsed in severity the 1989 Exxon Valdez spill in Alaska.


BP has already announced an uncapped class-action settlement with private plaintiffs that the company estimates will cost $7.8 billion to resolve litigation brought by over 100,000 individuals and businesses claiming economic and medical damages from the spill.


(Additional reporting by Andrew Callus in London; Editing by Edward Tobin and David Stamp)


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Congress, Obama face dynamite in “fiscal cliff”: CEOs
















BOSTON (Reuters) – Corporate America is raising the volume of its plea that the U.S. government avert a year-end “fiscal cliff” that could send the nation back into recession, but chief executives aren’t pushing the panic button just yet.


With a heated election season in the rear-view mirror, executives are calling on the White House and congressional leaders to head off a self-imposed deadline that could bring $ 600 billion in spending cuts and higher taxes early in 2013 if they are unable to reach a deal on cutting the federal budget deficit.













The Business Roundtable on Tuesday kicked off a print, radio and online ad campaign on which it plans to spend hundreds of thousands of dollars featuring the chiefs of Honeywell International Inc , Xerox Corp and United Parcel Service Inc calling on lawmakers to resolve the issue.


In an opinion piece published on Tuesday evening on the Wall Street Journal’s website, Goldman Sachs Chief Executive Officer Lloyd Blankfein urged the business community and the Obama administration to compromise and reconcile so as not to derail the fragile recovery.


One of the more dramatic warnings of the consequences of allowing the U.S. economy to go over the fiscal cliff came from Honeywell CEO David Cote.


“If the last debt ceiling discussion was playing with fire, this time they’re playing with nitroglycerin,” Cote said in an interview. “If they go off the cliff, I think it would spark a recession that’s a lot bigger than economists think. Some think it would just be a small fire. I think it could turn into a conflagration.”


The nonpartisan Congressional Budget Office (CBO) estimates that the U.S. economy would contract 0.5 percent in 2013 if the government fails to stop the budget cuts and tax increases – far below the 2 percent growth economists currently forecast.


A failure in Washington to solve the crisis by the year’s end could prompt major companies to curtail investment plans, said Duncan Niederauer, CEO of NYSE Euronext , operator of the New York Stock Exchange.


“We simply won’t be investing in the United States. We will be investing elsewhere where we have more certainty of the outcome,” Niederauer said in an interview.


About a dozen top U.S. CEOs, including General Electric Co’s Jeff Immelt, Aetna Inc’s Mark Bertolini, American Express Co’s Ken Chenault and Dow Chemical Co’s Andrew Liveris are scheduled to meet with President Barack Obama on Wednesday to discuss the issue.


The four are members of “Fix the Debt,” an ad-hoc lobbying organization that this week launched an advertising campaign that advocates long-term debt reduction.


UNCERTAINTY FACTOR


Bank of America Corp CEO Brian Moynihan said on Tuesday that worries about the cliff have companies holding off on spending.


“That uncertainty continues to hold back the recovery,” Moynihan said, speaking at an investor conference in New York.


Sandy Cutler, CEO of manufacturer Eaton Corp , shared his concern.


“Until we solve the fiscal issues (in the United States and Europe), you’re not going to get back to normal GDP growth,” Cutler told investors on Tuesday.


CEOs are not alone in this worry. The CBO report warned that failure to reach a deal could push the U.S. unemployment rate up to 9.1 percent, the highest since July 1991. It is currently 7.9 percent.


Obama and the Republican leadership of the House of Representatives have signaled a more conciliatory tone since last week’s election, when Obama soundly defeated Republican challenger Mitt Romney, whose party retained a majority in the House.


Wilbur Ross, an investor known for taking stakes in distressed companies, is bracing for higher tax rates in 2013.


“We, like many people, have been trying to utilize gains this year. It does seem that the probability is that rates will go up,” Ross said in an interview with Reuters Insider. “We don’t have a “for sale” sign on anything. But we are mindful that there is a benefit to concluding things this year rather than next.


NO SIGNS OF PANIC


Concerns about the cliff have not prompted customers to cancel orders, though they have added to an overall level of uneasiness that has companies wary of making large capital purchases or hiring significant numbers of new workers.


“We haven’t seen the panicking, like, ‘I’m not going to order something because of the fiscal cliff,’” said Steve Shawley, chief financial officer of heating and cooling systems maker Ingersoll Rand Plc . “Customers are being very judicious with their orders.”


Likewise, JPMorgan Chase & Co CEO Jamie Dimon last month told investors he did not expect the negotiations to hurt lending in the fourth quarter.


“The fiscal cliff isn’t going to change us,” Dimon said, referring to JPMorgan’s commercial bank, which loans money to businesses. The bank’s investment banking side could be more vulnerable if the debate makes investors jittery, he allowed.


WEAPONS, MEDICINES IN THE CROSS-HAIRS


The defense and healthcare sectors are the most vulnerable to the fiscal cliff, as they face the threat of sequestration — automatic, across-the-board cuts to their funding.


Makers of weapons systems note that they have long been preparing for declining sales as the United States winds down two long wars in Iraq and Afghanistan. The industry has already shed tens of thousands of jobs and closed facilities.


Lockheed Martin Corp’s new president and chief operating officer, Marillyn Hewson, told analysts on Monday her company had been preparing for tighter defense budgets for years, even before the sequestration deal.


“We aren’t going to see a major change,” said Hewson. “We’ve been very proactive as a leadership team in taking actions in recent years to address our cost structure, to look at how we can make our product more affordable.”


Automatic cuts to the federal budget could reduce federal health spending by $ 21.5 billion in 2013, potentially affecting everything from Medicare to the Food and Drug Administration, according to an analysis by PwC’s Health Research Institute.


Vincent Forlenza, the CEO of Becton Dickinson & Co , said the labs he supplies have held off on buying new instruments because of the threat of spending cuts.


“If we don’t get to a deal we will have another year of paralysis and putting off research,” Forlenza said. “The impact of uncertainty on the (National Institutes of Health) budget is causing our research customers to put off research.”


(The story corrects spelling of company name in penultimate paragraph to “Becton Dickinson” instead of “Beckton Dickinson”)


(Additional reporting by John McCrank, Nick Zieminski, Caroline Humer, Jed Horowitz, Sharon Begley and Daniel Wilchins in New York, Rick Rothacker in Charlotte, North Carolina, Nichola Groom in Los Angeles, Andrea Shalal-Esa in Washington, Debra Sherman in Chicago and Anna Driver in Houston; Editing by Patricia Kranz and Steve Orlofsky and Carol Bishopric)


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Cellphones may get smaller Holiday lift: Gartner
















(Reuters) – The pre-Christmas shopping season is likely to boost cellphone sales less that usual this year as a weaker global economy forces consumers to cut back, research firm Gartner said on Wednesday.


“It will be a cautious quarter. Consumers are either cautious with their spending or finding new gadgets like tablets, as more attractive presents,” Gartner analysts said.













Gartner said sales of cellphones declined 3 percent in the third quarter from a year earlier, falling for the third quarter in a row, while sales of smartphones grew 47 percent.


Smartphone growth this year is boosted by strong demand in China, where annual sales will grow to 165-170 million from 78 million a year earlier, it said.


“There is huge growth coming from the Chinese market,” said Gartner analyst Anshul Gupta.


This is helping local players to climb in global cellphone rankings, with ZTE, Huawei and TCL now among the seven largest cellphone vendors globally, Gartner said.


Samsung Electronics continues to lead the global cellphone sales ranking, ahead of Nokia and Apple. In smartphone sales Nokia, which still lead the market early last year, dropped to No 7, Gartner said.


(Reporting By Tarmo Virki)


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Liza Minnelli to guest star on TV musical drama “Smash”
















LOS ANGELES (Reuters) – Liza Minnelli will guest star on an episode of TV musical drama “Smash,” NBC said on Tuesday.


The singer and actress will play herself and sing a number in one episode of the show when it returns in February 2013. The series, starring Debra Messing, Anjelica Huston and Katharine McPhee, dramatizes the backstage life of writers, producers and actors working to create a Broadway musical about Marilyn Monroe.













Liza Minnelli is the essence of a multi-talented, singular show business sensation, particularly for her extraordinary contributions to Broadway,” Robert Greenblatt, the president of NBC Entertainment, said in a statement.


“So what could be more fitting than to have her legendary talent on a show that celebrates a world Liza has dazzled for decades?” he added


The daughter of director Vincente Minnelli and Hollywood legend Judy Garland, Minnelli, 66, is one of a handful of stars to have won an Oscar, Emmy, Grammy and Tony award.


She is best-known for her portrayal of Sally Bowles in the musical “Cabaret.” She is also expected to revive her role as Lucille on the upcoming fourth season of “Arrested Development,” which is slated to air on Netflix after being canceled by Fox in 2006.


NBC has moved the second season of “Smash” from Monday to Tuesday night, starting on February 5, 2013.


(Reporting by Eric Kelsey; editing by Jill Serjeant and Matthew Lewis)


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'Warrior monk' at center of growing scandal

WASHINGTON (Reuters) - Marine Corps General John Allen, the soberly formal, spit-and-polish head of U.S. and international forces in Afghanistan, is not a military leader whose image immediately conjures up the word "flirtatious."


The four-star general, who succeeded General David Petraeus last year as head of the International Security Assistance Force, is known for his ability to work with tribal sheikhs, a skill that helped him turn the tide against al Qaeda in Anbar Province in Iraq five years ago and has served him well in Afghanistan.


So the news that Allen, a 36-year veteran of the Marine Corps, had been snared in the same investigation that prompted the resignation of Petraeus as CIA director last week was greeted with surprise at the Pentagon and elsewhere in Washington.


John Ullyot, who served under Allen at Camp Lejeune in North Carolina in 1993, said he was all about "setting the example" for those under him and it was "hard for anyone who ever served under Allen" to believe he had been pulled into the probe.


Allen, who is married and has two daughters, "was known as a kind of warrior monk," said Ullyot, who was a spokesman for former U.S. Senator John Warner, a Republican who chaired the Senate Armed Services Committee.


Allen's connection to the probe that snared Petraeus was revealed early on Tuesday when Defense Secretary Leon Panetta announced he was putting Allen's nomination as head of U.S. European Command on hold pending an investigation.


A senior U.S. defense official said Panetta had asked the Defense Department's inspector general to investigate what the Pentagon called "inappropriate communication" between Allen and Jill Kelley, a Tampa, Florida socialite who is involved in volunteer causes that support the military.


Kelley is the woman who told the FBI she had received anonymous harassing emails about Petraeus. The FBI investigation into the emails uncovered an extramarital affair between Petraeus and his biographer, Paula Broadwell, who was found to be the source of the emails to Kelley, officials have said.


The FBI investigation also uncovered 20,000 to 30,000 pages of emails between or copied to Allen and Kelley. While defense officials were unable to say exactly how many emails there were between the two, the volume in pages raised concerns, they said.


A senior defense official, speaking on condition of anonymity, said the emails were "flirtatious" in nature, but did not deal with security or military business. The official said he had not seen the emails and could not say whether they were merely friendly or sexually explicit.


The investigation came just two days before Allen, the first Marine to serve as Commandant of Midshipmen at the U.S. Naval Academy, was to testify at a confirmation hearing naming him to replace Admiral James Stavridis as head of the U.S. European Command and Supreme Allied Commander Europe.


RECOMMENDED BY PETRAEUS


Allen and Petraeus have long known one another and served together. Allen was Petraeus' deputy at U.S. Central Command, based in Tampa.


Petraeus personally recommended Allen for the ISAF command. During Allen's confirmation hearing for the job, Senator John McCain told Allen he could "think of no higher compliment to pay a military officer" than to have the kind of support Petraeus had given him.


Allen has served as the head of ISAF since July 2011, managing the drawdown of U.S. forces following a surge that helped push Taliban insurgents out of major cities across the country.


His time in Afghanistan also has been marked by a spate of incidents that have enraged Afghans. They include video images of troops urinating on Taliban corpses and the burning of Korans and religious texts taken from a prison library. There also has been a surge in attacks on international forces by their Afghan partners.


Allen has handled the incidents with sensitivity, even as tensions have increased, his supporters say.


"I think General Allen has done a good job under very difficult circumstances in Afghanistan," said Senator Susan Collins, a member of the Armed Services Committee.


McCain, the top Republican on the Armed Services Committee, said he was surprised by the probe of Allen's emails and urged people to withhold judgment until the inspector general had finished his investigation.


"I have great respect and appreciation for the work that General Allen has done," he said. "If we fail in Afghanistan, which we are, it's because of decisions that were made by the president, not by General Allen."


"General Allen has said that he is not guilty of any improper behavior," McCain added. "He deserves to have us withhold judgment until the investigation is completed."


Allen, a 1976 Naval Academy graduate, served from 2008 to 2011 as deputy commander of U.S. Central Command, which oversees U.S. military dealings with countries from Egypt to Kazakhstan, including Afghanistan and Pakistan.


He was a deputy commanding general of the 2nd Marine Expeditionary Force in Iraq from 2006 to 2008.


(Additional reporting by Susan Cornwell. Editing by Warren Strobel and Christopher Wilson)

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