Egypt's Brotherhood Vows to Keep Defying Coup . . .

Photo: AP Supporters of the ousted Egypt's President Mohammed Morsi hold his portraits during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday, July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Mid.East NEWS - CAIRO (AP) Egypt's Muslim Brotherhood vowed Thursday to continue its "peaceful" resistance in defiance of the military's ouster of the country's Islamist President Mohammed Morsi.

A Brotherhood statement also distanced the group from an assassination attempt Wednesday against a senior army commander in the Sinai Peninsula. The statement came a day after Egypt's military-backed government tightened its crackdown on the Brotherhood, ordering the arrest of its spiritual leader in a bid to choke off the group's campaign to reinstate Morsi, now held at an undisclosed Defense Ministry facility.

The Brotherhood is outraged by the overthrow of Morsi and demands nothing less than his release from detention and his reinstatement as president. "We will continue our peaceful resistance to the bloody military coup against constitutional legitimacy," the Brotherhood said. "We trust that the peaceful and popular will of the people shall triumph over force and oppression."

Morsi was Egypt's first freely elected president. He was ousted by the military on July 3, following a wave of protests by millions of Egyptians who took to the streets to call for his removal. The Brotherhood's statement also denounced the assassination attempt against Maj. Gen. Ahmed Wasfi in the Sinai town of Rafah, near the border with Gaza, saying the group adheres to peaceful measures in line with what it says are the teachings of Islam.

Gunmen in a pickup truck opened fire on Wasfi's convoy late Wednesday, drawing fire from the accompanying troops, security officials said. The commander escaped unharmed but a 5-year-old girl was killed in the clashes, said the officials, speaking on condition of anonymity because they were not authorized to speak to the media. One gunman was arrested.

The Brotherhood denounced the warrants for the arrest of Mohammed Badie and nine other leading Islamists for inciting violence that left dozens dead in Cairo on Monday, saying "dictatorship is back" and insisting it will never work with the interim rulers.

Leaders of the Brotherhood are believed to be taking refuge somewhere near a continuing sit-in by the group's supporters at the Rabaah al-Adawiya Mosque in eastern Cairo, but it is not clear if Badie also is there.

Security agencies have already jailed five leaders of the Brotherhood, including Badie's powerful deputy, Khairat el-Shaiter, and shut down its media outlets. The prosecutor general's office said Badie, another deputy, Mahmoud Ezzat, senior member Mohammed El-Beltagy and popular preacher Safwat Hegazy are suspected of instigating Monday's clashes with security forces outside a Republican Guard building that killed 54 people - most of them Morsi supporters - in the worst bloodshed since he was ousted.

The Islamists have accused the troops of gunning down protesters, while the military blamed armed backers of Morsi for attempting to storm a military building. The arrest warrants highlight the armed forces' zero-tolerance policy toward the Brotherhood, which was banned under authoritarian leader Hosni Mubarak.

"This just signals that dictatorship is back," said Brotherhood spokesman Ahmed Aref. "We are returning to what is worse than Mubarak's regime, which wouldn't dare to issue an arrest warrant of the general leader of the Muslim Brotherhood."

The Brotherhood's refusal to work with the new interim leaders underscored the difficulties they face in trying to stabilize Egypt and bridge the deep fissures that have opened in the country during Morsi's year in office.

Photo: AP Supporters of the ousted Egypt's President Mohammed Morsi, wave an Islamic group flag with Arabic words which read "No God but Allah and Mohammad is his prophet," during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP An injured Sheik, center, a supporter of ousted Egypt's President Mohammed Morsi, who was wounded on his eye during clashes with anti-Morsi protesters last week, attends the Tarawih prayer, after the evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP Supporters of ousted Egypt's President Mohammed Morsi, hold his portraits and wave Egyptian flags as they shout slogans during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP Supporters of the ousted Egypt's President Mohammed Morsi, shout pro-Morsi slogans as they hold a banner against Egyptian Defense Minister Gen. Abdel-Fattah el-Sissi, during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP Supporters of the ousted Egypt's President Mohammed Morsi, hold his portrait during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP Supporters of ousted Egypt's President Mohammed Morsi shout slogans during a demonstration after the Iftar prayer, evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: APA supporter of ousted Egypt's President Mohammed Morsi, cries during the Tarawih prayer, after the evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

Photo: AP An Egyptian boy stands among the supporters of ousted Egypt's President Mohammed Morsi, who are offering the the Tarawih prayer, after the evening meal when Muslims break their fast during the Islamic month of Ramadan, in Nasr City, Cairo, Egypt, Wednesday July 10, 2013. Egypt's military-backed government tightened a crackdown on the Muslim Brotherhood on Wednesday, ordering the arrest of its revered leader in a bid to choke off the group's campaign to reinstate President Mohammed Morsi one week after an army-led coup.

UN Judges Reinstate Karadzic Genocide Charge . . .

Photo: APFormer Bosnian Serb leader Radovan Karadzic enters the courtroom of the U.N. Yugoslav war crimes tribunal (ICTY) in The Hague, Netherlands, Thursday, July 11, 2013. Judges at the ICTY are ruling on a prosecution appeal against Karadzic's acquittal on genocide charge, one of the key allegations against him over atrocities during Bosnia's bloody war.

Mid.East NEWS - THE HAGUE, Netherlands (AP) Appeals judges at the United Nations' Yugoslav war crimes tribunal have reinstated a genocide charge against Radovan Karadzic linked to a campaign of killing and mistreating non-Serbs at the start of the Bosnian war in 1992.

The decision Thursday reversed the former Bosnian Serb leader's acquittal last year on one of the two genocide charges he faces. Presiding Judge Theodor Meron says appeals judges believe that prosecution evidence presented at Karadzic's trial "could indicate that Karadzic possessed genocidal intent."

Thursday's ruling will likely further draw out his long-running trial on 10 other charges including another genocide count for allegedly masterminding the 1995 Srebrenica massacre.

Baby Among 409 Buried On Srebrenica Anniversary . . .

Photo: AP Bosnian women walk among the tombstones during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Mid.East NEWS - SREBRENICA, Bosnia-Herzegovina (AP) - Hava Muhic stood Thursday above the smallest pit in the cemetery, near her husband's grave. It was dug for her baby girl - who was born and died here 18 years ago on the day of the worst massacre Europe has seen since World War II.

Muhic's baby is among the remains of 409 people recently identified after being found in mass graves, who were reburied at the Potocari Memorial Center on the anniversary of the Srebrenica massacre. This year's commemorations bring the total of identified victims to 6,066. Another 2,306 remain missing.

Muhic is burying the daughter she never had a chance to see or call by name. A simple wooden marker above the little green coffin says: Newborn Muhic (father Hajrudin) 11.07.1995 - the single date marking both birth and death.

Muhic blames her child's death on the frantic rush to seek safety among U.N. peacekeepers as Bosnian Serbs overran the town. A woman who helped her give birth in the U.N. compound told her the girl was born with the umbilical cord wrapped around her neck and that she was dead.

There is no way to know whether the chaos of the day had anything to do with the baby's death. One thing's certain, however: Muhic spent 18 years living with the pain of not knowing where her baby girl was buried.

Back then, Srebrenica was a U.N.-protected Muslim town in Bosnia besieged by Serb forces throughout the country's 1992-95 war. Serb troops led by Gen. Ratko Mladic broke into the enclave on July 11, 1995. That morning, some 30,000 Bosnian Muslims flocked to the U.N. military base in the town's Potocari suburb seeking refuge.

Among them was Muhic, then 24 - and nine months pregnant with her second child. Labor pains took her breath away as she passed the gate of the U.N. base. One of the peacekeepers told her she could enter the base's main building but said the others would have to stay outside in the courtyard.

Muhic recalled the moment after she learned her baby's fate. "Two men in uniform came . . . They took my baby and put it in a box. They asked me for my personal information and I gave it to them. They said they were taking the baby to bury it."

Meanwhile, Serb forces had also entered the U.N. compound unopposed by any of the hundreds of frightened U.N Dutch soldiers. They began separating men from women. Over the course of 5 days, they executed 8,372 men and boys.

A half hour after she delivered the baby, Hava Muhic was told to get up and leave the building. Still covered in blood, she climbed with other women into a truck that drove them to safety. She did not know where her 5 year-old son or husband were.

Years later, she discovered that her husband Hajrudin, his two brothers and her brother were among the thousands killed in the massacre, which the International Court of Justice later defined as genocide. Mladic and former Bosnian Serb president Radovan Karadzic are both now standing trial in front of the U.N. war crimes tribunal for the Srebrenica genocide in Srebrenica and other war crimes.

Muhic's son survived. Now 23, he lives with her in southern France. Authorities spent years trying to find a mass grave that Dutch soldiers reported digging inside the base for Bosnian Muslims who died of natural causes during the carnage, according to Amor Masovic, one of the directors of Bosnia's Missing Persons Institute.

Forensic experts searched several locations the soldiers pointed out, but could not find any skeletons. "Eventually we obtained a photo the soldiers have taken of the open grave with the little body in it," Masovic said. "By the position of the light poles on the photo and some shades, we found the location last year. There were five other bodies in the grave besides the baby's."

Srebrenica's mayor Camil Durakovic believes the baby would have been alive today had Muhic received normal medical care. "But it died because it was born under unbearable circumstances and therefore it is a victim of genocide," he said.

Hava had a name for her daughter but she never had the chance to give it to her. She has asked that it be engraved on the tiny white marble headstone that is to replace the wooden one. "I will do all I can to have the name the mother wanted for her child engraved on the baby's tombstone," said Durakovic. "That is the least we can do for the mother."

So soon, Hava is likely to have the comfort of visiting a grave where - instead of "Newborn" - the headstone reads: "Fatima".

Photo: AP A Bosnian woman cries near the coffin of her relative during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP A Bosnian woman cries during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP A Bosnian woman cries near the coffin of her relative during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP A Bosnian woman says prayers next to the coffin of a child during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP Bosnian woman Merima Nukic prays at the grave of her father during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP A Bosnian family comfort a woman who cries over the coffin of her son during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP A Bosnian woman prays during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

Photo: AP Bosnian woman Merima Nukic searches for her father's grave among gravestones during a funeral ceremony at the memorial center in Potocari, near Srebrenica, 160 kms east of Sarajevo, Bosnia, Thursday, July 11, 2013. People from around Bosnia and abroad have begun arriving in Srebrenica Thursday to commemorate 18th anniversary of the 1995 massacre and rebury recently identified victims exhumed from mass graves. The victims’ bodies are still being exhumed from mass graves in the area, where Serbs had dumped them in an attempt to cover up the crime. Identified victims are buried each year on the massacre’s anniversary at a memorial cemetery near Srebrenica.

NYSE Operator Takes Over LIBOR Bank Rate . . .

Photo: AP Trader Luke Scanlon, right, works on the floor of the New York Stock Exchange Monday, July 8, 2013. Stocks rose in early trading Monday ahead of the start of second-quarter corporate earnings reports.

Mid.EastNEWS - LONDON (AP) The company behind the New York Stock Exchange will take over running and restoring confidence in the scandal-hit London interbank offered rate, or LIBOR, a UK committee has ruled.

The independent panel, set up by the UK government following revelations last year that the rate had been manipulated, chose NYSE Euronext to take over LIBOR from the British Bankers' Association, which had supervised the rate-setting for decades.

The changeover is scheduled to be completed by early 2014, the panel said in a statement. It did not identify any other bidders. "This change will play a vital role in restoring the international credibility of LIBOR," the panel's chair, Baroness Sarah Hogg, said in a statement.

LIBOR underpins trillions of dollars of transactions all over the world. It is an average rate that measures how much banks expect to pay each other for loans and is also used in calculating borrowing costs of hundreds of trillions of dollars in loans and investments such as bonds, auto loans and derivatives.

But the setting of LIBOR was underpinned on trust. The scandal emerged when authorities realized banks - including Royal Bank of Scotland, Barclays and UBS - were submitting false data to gain market advantages.

U.S. and U.K. regulators fined RBS more than $460 million for rate-rigging. Barclays' role led to a $453 million fine and the resignation of chief executive, Bob Diamond. Swiss bank UBS was fined $1.5 billion.

After the scandal erupted, the government moved to restore confidence in LIBOR's integrity, establishing the panel to review the rate and creating criminal penalties for those who violate the rules. "We want to protect taxpayers and restore faith in financial services," financial secretary to the UK Treasury Greg Clark said in a statement.

The decision to award the tender to a U.S.-based organization will help restore the credibility of Libor, said Mark Taylor, dean of the Warwick Business School and a former managing director of the investment firm, BlackRock.

Taylor said that since much of the criticism of how LIBOR was managed came out of the U.S., having a respected player such as NYSE Euronext take charge will help restore confidence among investors, showing that it is "squeaky clean."

But British officials expect further reforms to come as part of the package - such as the documentation of transactions and submissions that are revealed well after the fact. Creating a paper trial will make it harder to manipulate the rate - despite the temptation to do so, Taylor said.

"What it means is that they will get as close as possible to saying what the true market rate is," Taylor said. The rate will be administered by NYSE Euronext Rate Administration Limited, a new subsidiary of NYSE Euronext. The new company will be based in the UK and will be regulated in Britain by the Financial Conduct Authority. The global exchange said it is uniquely placed to restore the international standing of LIBOR.

In a statement, the NYSE Euronext said the new division will be able to use the group's "trusted brand, long regulatory experience and market-leading technical ability to return confidence to the administration of LIBOR."

EU Commission Clashes with Germany Over Banks Plan . . .

Photo: AP German Finance Minister Wolfgang Schaeuble, front right, talks with French Finance Minister Pierre Moscovici, left, during the EU Finance Ministers meeting, at the European Council building in Brussels, Tuesday, July 9, 2013. Ministers from the 28 European Union countries meet before the summer break to discuss the state to the EU economy.

Mid.EastNEWS - BRUSSELS (AP) The European Union's executive branch set up a clash with Germany on Wednesday by proposing to give itself far-reaching powers to decide what happens to banks that need rescuing.

Under the proposal, the EU Commission would act to rescue or wind down a bank after hearing advice from a board consisting of the European Central bank, its own officials and national authorities. Setting up a region-wide system to deal with troubled banks is a key part of a plan to restore confidence in the financial system. But some see the Commission's proposal as another move by Brussels to erode member countries' national sovereignty - and it immediately ran into opposition from Germany.

The proposal "gives the Commission powers that we believe it cannot have according to the current treaties," said Chancellor Angela Merkel's spokesman, Steffen Seibert. "The proposal on the table will, from our point of view, unfortunately slow down rather than speed up the road to the banking union."

Having to go through treaty changes at this stage would be fraught with danger for the EU - not only would it be time-consuming, but the proposals could easily be rejected at a time when popular opinion of the EU is low.

Seibert argued it would be much quicker to implement a German-French proposal, made in May, to move ahead with a more limited form of a banking resolution authority that can be adopted without changing the EU treaties. The authority could be given greater powers later, once limited treaty changes had been secured.

Lithuanian President Dalia Grybauskaite, who holds the EU's rotating presidency, acknowledged it would be a "challenge" for the EU nations to find common ground on the issue. The Commission said it had proposed taking the lead role because of legal constraints on other institutions.

In a statement, it said "the Commission has the necessary experience on bank restructuring" and added that it was "the best placed among EU institutions to ensure that final decisions fully respect the principles underpinning the functioning of the EU."

The Commission insisted national authorities and the ECB would still have a key role in directing the Commission's actions. The central authority to solve banking crises is one of three pillars in a broader 'banking union' that the EU is trying to create. The other two are centralized banking oversight - to be adopted by the ECB - and a jointly guaranteed deposit insurance, which has yet to be agreed on.

Creating a banking union has become important because the cost of savings banks can overwhelm individual governments' finances - as happened in Ireland and Cyprus, which both needed government bailouts.

The common rules for a centralized approach would replace the current national strategies, where local banking regulators have often proved not to be forceful enough in dealing with their home banks. They also include guidelines on having a troubled bank's creditors - the shareholders, bondholders and uninsured depositors - takes losses before taxpayer money is used in a rescue operation.

The EU Commission's president, Jose Manuel Barroso, said that with the new proposal "it should be banks themselves, and not European taxpayers, who should shoulder the burden of losses in the future."

Geir Moulson contributed to this article from Berlin.

Portugal's President: Government to Stay in Power . . .

Photo: AP A woman whistles during a protest by Portuguese nurses unions outside the Portuguese Health Ministry in Lisbon, Wednesday, July 10, 2013. The protest marked the end of a two days strike against cuts in the Portuguese health system, the increase in weekly working hours from 35 to 40 and other austerity measures.

Mid.EastNEWS - LISBON, Portugal (AP) Portugal's president said Wednesday he is keeping faith with the bailed-out country's troubled coalition government and rejecting opposition parties' demands for an early election, though he appealed to all the main parties to put aside their differences and find a broad compromise that will spare the Portuguese from needing a second financial rescue.

The government came close to collapse last week when the two coalition partners disagreed over the scale of austerity measures. The finance and foreign ministers resigned, triggering what President Anibal Cavaco Silva called "a grave political crisis" over the past 10 days.

The dispute cast doubt on Portugal's ability to comply with the debt-cutting demands of a 78-billion-euro ($100 billion) bailout it received two years ago. Other countries using the euro currency worried that Portugal's difficulties could hurt the bloc's efforts to escape its prolonged financial crisis.

In a 30-minute broadcast to the nation in a prime-time evening slot, Cavaco Silva said a snap election would be "extremely negative" for Portugal's credibility as it tries to recoup the faith of investors who are keen to see political stability that can push through fiscal and economic reforms in the debt-heavy country.

Holding early elections would consign Portugal to 82 days of virtual political paralysis, Cavaco Silva said. By creating "huge" political and financial instability, a ballot likely would make it necessary for the country to ask for more financial help, he said.

He urged the three parties which signed the 2011 bailout agreement - the Social Democratic Party and smaller Popular Party, which are in government, and the main opposition Socialist Party, which was in power at the time of the bailout - to find common ground and "put the national interest above their own parties' interests."

The head of state, though he has no executive power, is responsible for ensuring the country has a stable government. Cavaco Silva spent three days consulting with political parties, business leaders, labor groups and economists before announcing his decision Wednesday.

The sudden political discord in Lisbon after two years of relatively stable government took many by surprise. Portugal has broadly stayed on course with its program of spending cuts and economic reforms, drawing comparisons with Ireland's record rather than that of more tumultuous Greece - euro area countries which have also needed rescues.

If Portugal doesn't abide by the terms of the rescue, its bailout creditors can cut off funds and leave the country at the mercy of financial markets. The three major international ratings agencies have downgraded Portugal's credit worthiness to junk status.

Paulo Portas, head of the Popular Party, which is the junior coalition partner, quit as foreign minister in disagreement with plans for more deep cuts this year and next year. He said he wanted a new emphasis on job creation and economic growth as the country weathers an expected third straight year of recession amid a jobless rate of 17.6 percent.

Prime Minister and Social Democrat leader Pedro Passos Coelho has promised a Cabinet reshuffle which, he says, will restore harmony in the coalition.

Turkish Opposition Angry Over Union Vote by Gov't

Photo: AP People chant slogans in Istiklal Avenue as they try to reach Taksim Square and Gezi Park, Istanbul, Turkey, Tuesday, July 9, 2013. Gezi Park remained open for the night after thousands of anti-government protesters broke their fast for the holy month of Ramadan by sitting down for a meal along a main Istanbul pedestrian street for a makeshift Ramadan banquet that stretched some 500 meters (yards) toward the city's landmark Taksim Square.

Mid.East NEWS - ANKARA, Turkey (AP) Turkey's parliament banned a union from approving construction projects, with opposition parties saying Wednesday the group of architects and city planners was being punished by the government for challenging redevelopment plans in Istanbul that ignited nationwide protests last month.

The surprise measure was passed late Tuesday with the votes of Prime Minister Recep Tayyip Erdogan's ruling party, which holds a parliamentary majority. The move, which requires the president's approval before taking effect, would hand over the powers of the Union of Chambers of Turkish Engineers and Architects to the ministry in charge of the environment and urban planning. It also deprives the union of a major source of revenue.

Ali Uzunirmak, a member of Turkey's nationalist party, called the measure "pirate" legislation that avoided discussions in parliamentary committees since it was debated in a midnight session. The government defended the measure saying it would benefit architects and engineers who are not members of the union.

Union members had opposed construction plans for Istanbul's Taksim Square, including the demolition of Gezi Park, one of a few remaining green spaces in the area. A police crackdown on a sit-in to protect the park ignited nationwide protests in June that turned into expression of discontent with what opponents say is Erdogan's increasingly authoritarian style of governing. The death toll in the protests, meanwhile, increased to five Wednesday when a demonstrator who was in a coma died.

"With this proposal, the government is making the (Union) pay for Gezi," Milliyet newspaper quoted pro-secular opposition legislator Akif Hamzacebi as saying while speaking out against the measure in Parliament. "This is an extension of the government's witch hunt."

On Monday, seven activists opposed to the redevelopment plans - all members of the Union - were detained as they tried to reach Gezi for a rally they had organized. Their homes were searched Tuesday, according to media reports. The European Union's expressed concern over the detentions and called on Turkey to respect "fundamental freedoms."

Erdogan, who rejects charges of authoritarianism, has blamed the protests on a conspiracy against his government, which received 50 percent of votes in 2011 elections.

Photo: AP People sit in front of a water cannon truck in Istiklal Avenue in Istanbul, Turkey, Tuesday, July 9, 2013. Gezi Park remained open for the night after thousands of anti-government protesters broke their fast for the holy month of Ramadan by sitting down for a meal along a main Istanbul pedestrian street for a makeshift Ramadan banquet that stretched some 500 meters (yards) toward the city's landmark Taksim Square.

Photo: AP Turkish riot policemen and their water cannon pull back to open Taksim Square after thousands of people demanded to enter Taksim Square and Gezi park from Istiklal Avenue, the main shopping road of Istanbul, just on the corner to Taksim Square in Istanbul, Turkey, Tuesday, July 9, 2013. Thousands of people broke the fast on the first day of Ramadan in a kind of spontaneous form of protest sitting in a queue of some hundred meters from Galatasaray University to Taksim Square on the street eating together.