CDC: Flu seems to level off except in the West


New government figures show that flu cases seem to be leveling off nationwide. Flu activity is declining in most regions although still rising in the West.


The Centers for Disease Control and Prevention says hospitalizations and deaths spiked again last week, especially among the elderly. The CDC says quick treatment with antiviral medicines is important, in particular for the very young or old. The season's first flu case resistant to treatment with Tamiflu was reported Friday.


Eight more children have died from the flu, bringing this season's total pediatric deaths to 37. About 100 children die in an average flu season.


There is still vaccine available although it may be hard to find. The CDC has a website that can help.


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CDC: http://www.cdc.gov/flu/


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WH, Senators to Begin Push on Immigration Reform












The White House and a bipartisan group of senators next week plan to begin their efforts to push for comprehensive immigration reform.


President Barack Obama will make an announcement on immigration during a Tuesday trip to Las Vegas, Nevada, the White House said on Friday. The Senate group is expected make their plans public around the same time, the Associated Press reported.


See Also: Where Do Labor Unions Stand on Immigration?


For Obama, immigration reform is a campaign promise that has remained unfulfilled from his first White House run in 2008. During his 2012 re-election campaign, the president vowed to renew his effort to overhaul the nation's immigration system. It has long been expected that Obama would roll out his plans shortly after his inauguration.


The president's trip to Las Vegas is designed "to redouble the administration's efforts to work with Congress to fix the broken immigration system this year," the White House said.


Ever since November's election, in which Latino voters turned out in record numbers, Republicans and Democrats have expressed a desire to work on immigration reform. Obama has long supported a bill that would make many of the nation's 11 million undocumented immigrants without criminal records eligible to apply for an earned pathway to citizenship, which includes paying fines and learning English.






Charles Dharapak/AP Photo







But the debate over a pathway to citizenship is expected to be contentious. Other flashpoints in an immigration reform push could include a guest-worker program, workplace enforcement efforts, border security, and immigration backlogs.


In a statement, the White House said that "any legislation must include a path to earned citizenship."


Ahead of his immigration push next week, Obama met today with a group of lawmakers from the Congressional Hispanic Caucus (CHC), including chairman Rubén Hinojosa (D-Texas) , Sen. Bob Menendez (D-N.J.), Democratic Caucus Chair Rep. Xavier Becerra (D-Calif.), and CHC Immigration Task Force Chair Rep. Luis Gutierrez (D-Ill.), the latter's office said. CHC members are expected to play a pivotal role in the debate.


"The president is the quarterback and he will direct the team, call the play, and be pivotal if we succeed. I am very optimistic based on conversations with Republicans in the House and Senate that we will do more than just talk about the immigration issue this year," Gutierrez said in a statement following the CHC meeting with Obama. "The president putting his full weight and attention behind getting a bill signed into law is tremendously helpful. We need the president and the American people all putting pressure on the Congress to act because nothing happens in the Capitol without people pushing from the outside."


A bipartisan group of eight senators, which includes Menendez, has also begun talks on drafting an immigration bill and will play an integral part in the process of passing a bill through Congress. Sen. Marco Rubio (R-Fla.), who has been participating in talks with others senators, has also unveiled his own outline for an immigration proposal.


The group of senators have reportedly eyed Friday as the date when they'll unveil their separate proposal, according to the Washington Post.



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North Korea to target U.S. with nuclear, rocket tests


SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


The announcement by the country's top military body came a day after the U.N. Security Council agreed to a U.S.-backed resolution to censure and sanction North Korea for a rocket launch in December that breached U.N. rules.


North Korea is not believed to have the technology to deliver a nuclear warhead capable of hitting the continental United States, although its December launch showed it had the capacity to deliver a rocket that could travel 10,000 km (6,200 miles), potentially putting San Francisco in range, according to an intelligence assessment by South Korea.


"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.


North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un, who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.


China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.


Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition, with Xi Jinping due to take office in March.


China's Foreign Ministry called for calm and restraint and a return to six-party talks, but effectively singled out North Korea, urging the "relevant party" not to take any steps that would raise tensions.


"We hope the relevant party can remain calm and act and speak in a cautious and prudent way and not take any steps which may further worsen the situation," ministry spokesman Hong Lei told reporters at a regular press briefing.


North Korea has rejected proposals to restart the talks aimed at reining in its nuclear capacity. The United States, China, Russia, Japan and the two Koreas are the six parties involved.


"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.


Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.


"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.


U.S. URGES NO TEST


Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.


"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.


"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."


The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.


A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.


North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons


North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.


According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.


North Korea has not yet mastered the technology needed to make a nuclear warhead small enough for an intercontinental missile, most observers say, and needs to develop the capacity to shield any warhead from re-entry into the earth's atmosphere.


North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.


The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father, Kim Jong-il, who oversaw the country's military and nuclear programs.


The older Kim died in December 2011.


"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.


(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan and Ron Popeski)



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Man sails from PNG to Australian island on twig raft






SYDNEY: A Polish man was lucky to be alive on Friday after sailing from Papua New Guinea to a north Australian island on a raft made of twigs and sticks, through crocodile and shark-infested waters, during a cyclone.

The man was found washed up in mangroves on Saibai Island in the Torres Strait, a treacherous stretch of water that lies between the two countries.

What made his survival even more miraculous was that he attempted the trip in the aftermath of Cyclone Oswald, with 1.5 metre (five foot) swells and 40 knot winds, rescue authorities said.

"It's the first time I've heard of someone trying to cross the Torres Strait in a raft in the middle of a cyclone," Australian Maritime Safety Authority (AMSA) spokeswoman Jo Meehan told AFP, adding that the flimsy raft was held together with string.

"It's not something we'd recommend. Navigation in the area is challenging for normal vessels, it's quite treacherous with reefs and rocks, and he did it in high winds and high seas.

"He's very lucky to have made it."

Australian immigration authorities said they were waiting to interview the man and it was not clear whether he was carrying a passport.

"He has been transferred to Thursday Island where he has been detained," a spokesman said, adding that the man was being medically assessed before being interviewed to find out why he made the trip.

AMSA was alerted when residents of Saibai, which is part of Australia but only four kilometres from Papua New Guinea, spotted the man offshore on Thursday.

They sent a helicopter and a customs ship but failed to find him, so they called in local police who discovered the exhausted man in the mangroves.

Australian media reported said the Pole, who has not been named, set off from Sigabadura village in Papua New Guinea on Wednesday and that locals tried talking him out of the voyage.

One report, citing Australian authorities, said he had been dropped in Papua New Guinea by a yacht.

- AFP/fa



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India to continue to push for David Headley's extradition after he gets 35 years in jail

NEW DELHI: India on Friday said it will continue to press for extradition of David Headley from the US after the Pakistani-American LeT terrorist escaped death penalty for helping plot the 2008 Mumbai terror attack and sentenced to 35 years in jail by an American court.

External affairs minister Salman Khurshid said the government was "slightly disappointed" over the quantum of sentence, saying the 52-year-old convict should have got the "severest sentence".

Asserting that India's demand was Headley should be tried in India, Khurshid said he would have possibly got a "serious and severe" sentence in this country. Khurshid, however, said the sentence handed over to Headly was a "beginning".

"The 35 year sentencing and what the judge said is a beginning. We understand there are legal procedures in the US but nevertheless the position we have, the request(extradition) that we have made remains intact," Khurshid told reporters.

Union home secretary R K Singh also said that India will push for Headley's extradition.

Congress spokesman Rashid Alvi expressed disappointment at the verdict and demanded that he should be tried in India. BJP spokesperson Rajiv Pratap Rudy demanded that Headley should be extradited to India and be tried under Indian laws and given capital punishment.

"I think going by what the judge has said this should go "I think going by what the judge has said this should go a long way in hopefully conveying a very clear message that the kind of things that have been going on in the past will not be tolerated," Khurshid said. US District Judge Harry Leinenweber said yesterday, "The sentence I impose, I'm hopeful it will keep Mr Headley under lock and key for the rest of his natural life."

The judge said it would have been much easier to impose the death penalty. "That's what you deserve".

Headley had entered into a plea bargain with the US investigators under which he escaped death sentence. "Mr. Headley is a terrorist," the judge said while imposing the sentence on 12 counts in a packed court.

Leinenweber also said, "He commits crime, cooperates and then gets rewarded for the cooperation.

"No matter what I do, it is not going to deter terrorists. Unfortunately, terrorists do not care for it. I do not have any faith in Mr Headley when he says that he is a changed person now.

"I do believe that it is my duty to protect the public from Mr Headley and ensure that he does not get into any further terrorist activities. Recommending 35 years is not a right sentence".

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It's Official: Women Will Serve in Combat













Women will soon be able to serve in combat, as things officially changed with the stroke of a pen today at the Pentagon.


At a joint news conference, Secretary of Defense Leon Panetta and Joint Chiefs of Staff Charman Gen. Martin Dempsey signed a memorandum rolling back a 1994 directive prohibiting women from doing so.


"They serve, they're wounded, and they die right next to each other," Panetta said of women and men in the military. "The time has come to recognize that reality.


"If they're willing to put their lives on the line, then we need to recognize that they deserve a chance," Panetta said, noting that he wants his own granddaughters and grandsons to have the same opportunities in their lives and careers.


The change won't be immediate, however. While Panetta announced that thousands of new positions will now be open to women, he has asked the military branches to submit plans by May on how to integrate women into combat operations. He set a January 2016 deadline for branches to implement the changes, giving military services time to seek waivers for certain jobs.


Both Panetta and Dempsey said they believe the move will strengthen the U.S. military force.








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"Ultimately, we are acting to strengthen the armed forces," Dempsey said. "We will extend opportunities to women in a way that maintains readiness, morale and unit cohesion."


Women have already served in combat in Iraq and Afghanistan, as ABC News' Martha Raddatz and Elizabeth Gorman reported in 2009: Prohibited from serving in roles "whose primary mission is to engage in direct combat on the ground," women in support roles, nonetheless, served in support roles on the frontlines, where they have fought, been wounded and died.


Women have also flown combat missions since 1993 and have served on submarines since 2010.


Panetta noted that 152 women have died serving in the U.S. military in Iraq and Afghanistan. Dempsey said he realized a change was inevitable when he noticed two female turret gunners protecting a senior military officer.


"It's clear to all of us that women are contributing in unprecedented ways to the military's mission of defending the nation," Panetta said. "Women represent 15 percent of the force of over 200,000 [and] are serving in a growing number of critical roles on and off the battlefield.


"I've gone to Bethesda to visit wounded warriors, and I've gone to Arlington to bury our dead. There's no distincton."


Panetta and Dempsey said President Obama supported the move, while warning them to maintain military readiness as they considered the change.


Obama hailed the move in a written statement


"Today, by moving to open more military positions -- including ground combat units -- to women, our armed forces have taken another historic step toward harnessing the talents and skills of all our citizens," he said.


"This milestone reflects the courageous and patriotic service of women through more than two centuries of American history and the indispensable role of women in today's military," Obama said.






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North Korea to target U.S. with nuclear, rocket tests


SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


The announcement by the country's top military body came a day after the U.N. Security Council agreed a U.S.-backed resolution to censure and sanction the country for a rocket launch in December that breached its bans.


"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.


North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.


China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.


Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition with Xi Jinping due to take office in March.


North Korea has rejected proposals to restart the so-called six-party talks aimed at reining in its nuclear capacity.


"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.


Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.


"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.


U.S. URGES NO TEST


Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.


"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.


"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."


The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.


A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.


North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons


North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.


According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.


North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.


Its long-range rockets are not seen as capable of reaching the United States mainland and it is not believed to have the technology to mount a nuclear warhead on a long-range missile.


The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father Kim Jong-il, who oversaw the country's military and nuclear programs.


The older Kim died in December 2011.


"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.


(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan)



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Resurgent inflation dampens Vietnam stimulus hopes






HANOI: Vietnam's inflation accelerated in January, according to official data, reducing expectations of further monetary stimulus to boost the economy.

Consumer prices were up by 7.07 percent this month from a year earlier, following a 6.8 rise in December, the General Statistics Office in Hanoi said in a statement. Month-on-month prices gained 1.25 percent.

A further increase in prices is expected next month due to high demand before the Lunar New Year festival which starts on February 10, one Hanoi-based banker who did not want to be named told AFP.

Vietnam repeatedly raised interest rates in 2011 to prevent the economy from overheating and to rein in double-digit inflation, but with the economy cooling the authorities last year resumed monetary stimulus efforts.

The central bank in December cut interest rates for the sixth time since March as annual economic growth slowed to the weakest pace in 13 years, at roughly five percent for 2012.

Resurgent inflation is now seen as limiting the scope for further monetary stimulus that could stoke price pressures.

"It will not be easy to keep inflation below the government's initial target of 6.9 percent" in 2013, said one independent analyst who asked not to be named.

"The authorities will have to be very careful about future monetary policy. It is too early to say if they will have to raise interest rates again. They are in the middle of nowhere and don't know which path to follow."

The communist nation's economic woes are compounded by worries over toxic debts in the banking sector, falling foreign direct investment and a string of financial scandals among state-owned firms.

- AFP/al



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Pentagon to Allow Women in Combat













Defense Secretary Leon Panetta will lift a longstanding ban on women serving in combat, according to senior defense officials.


The services have until this May to come up with a plan to implement the change, according to a Defense Department official.


That means the changes could come into effect as early as May, though the services will have until January 2016 to complete the implementation of the changes.


"We certainly want to see this executed responsibly but in a reasonable time frame, so I would hope that this doesn't get dragged out," said former Marine Capt. Zoe Bedell, who joined a recent lawsuit aimed at getting women on the battlefield.


The military services also will have until January 2016 to seek waivers for certain jobs -- but those waivers will require a personal approval from the secretary of defense and will have to be based on rationales other than the direct combat exclusion rule.


The move to allow women in combat, first reported by the Associated Press, was not expected this week, although there has been a concerted effort by the Obama administration to further open up the armed forces to women.


The Joint Chiefs of Staff unanimously recommended in January to Secretary Panetta that the direct combat exclusion rule should be lifted.


"I can confirm media reports that the secretary and the chairman are expected to announce the lifting of the direct combat exclusion rule for women in the military," said a senior Defense Department official. "This policy change will initiate a process whereby the services will develop plans to implement this decision, which was made by the secretary of defense upon the recommendation of the Joint Chiefs of Staff."


Chairman of the Joint Chiefs Gen. Martin Dempsey sent Panetta a memo earlier this month entitled, "Women in Service Implementation Plan."






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"The time has come to rescind the direct combat exclusion rule for women and to eliminate all unnecessary gender-based barriers to service," the memo read.


"To implement these initiatives successfully and without sacrificing our warfighting capability or the trust of the American people, we will need time to get it right," he said in the memo, referring to the 2016 horizon.


Women have been officially prohibited from serving in combat since a 1994 rule that barred them from serving in ground combat units. That does not mean they have been immune from danger or from combat.


As Martha Raddatz reported in 2009, women have served in support positions on and off the frontlines in Iraq and Afghanistan, where war is waged on street corners and in markets, putting them at equal risk. Hundreds of thousands of women deployed with the military to those two war zones over the past decade. Hundreds have died.


READ MORE: Female Warriors Engage in Combat in Iraq, Afghanistan


"The reality of the battlefield has changed really since the Vietnam era to where it is today," said Rep. Tammy Duckworth, D-Ill., a former military helicopter pilot who lost both her legs in combat. "Those distinctions on what is combat and what is not really are falling aside. So I think that after having seen women, men, folks who -- cooks, clerks, truck drivers -- serve in combat conditions, the reality is women are already in combat."


Woman have been able to fly combat sorties since 1993. In 2010, the Navy allowed them on submarines. But lifting restrictions on service in frontline ground combat units will break a key barrier in the military.


READ MORE: Smooth Sailing for First Women to Serve on Navy Submarines


READ MORE: Female Fighter Pilot Breaks Gender Barriers


Panetta's decision will set a January 2016 deadline for the military service branches to argue that there are military roles that should remain closed to women.


In February 2012 the Defense Department opened up 14,500 positions to women that had previously been limited to men and lifted a rule that prohibited women from living with combat units.


Panetta also directed the services to examine ways to open more combat roles to women.


However, the ban on direct combat positions has remained in place.






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Netanyahu turns focus to Iran after narrow election win


JERUSALEM (Reuters) - Hawkish Prime Minister Benjamin Netanyahu has claimed victory in Israel's parliamentary election, shrugging off surprise losses to centre-left challengers and vowing to stop Iran from acquiring nuclear weapons.


However, Tuesday's vote, which also disappointed religiously inspired hardliners, may deflect the premier's focus on confronting Tehran and resisting Palestinian demands as Israel's secular middle-class demanded new attention on domestic issues.


That in turn might draw Netanyahu toward a less fractious relationship with his key ally, U.S. President Barack Obama, who himself embarked on a new term this week with great ambitions.


Interim vote count results on Wednesday showed the Israeli leader's right-wing Likud and the ultra-nationalist Yisrael Beitenu would remain the biggest bloc in the 120-member assembly, but with only 31 seats, 11 fewer than the 42 the two parties held in the last parliament.


That put Netanyahu on course for a third term in office, perhaps leading a hardline coalition that would promote Jewish settlement on occupied land.


But his weakened showing in the ballot, which he had called nine months early in the hope of a strong mandate for his struggle with Iran, could complicate his efforts to forge an alliance with a stable and substantial majority in parliament.


"I am proud to be your prime minister, and I thank you for giving me the opportunity, for the third time, to lead the state of Israel," the 63-year-old leader told a cheering crowd in the early hours of Wednesday at his campaign headquarters.


Netanyahu said he planned to form as broad a governing coalition as possible, suggesting he would seek partners beyond his traditional ultra-nationalist and religious allies. His first call may be to Yair Lapid, a former television anchorman whose centrist, secular party came from nowhere to second place.


"The first challenge was and remains preventing Iran from obtaining nuclear weapons," Netanyahu said.


Iran denies it is planning to build an atomic bomb, and says Israel, widely believed to have the only nuclear arsenal in the Middle East, is the biggest threat to the region.


Netanyahu views Tehran's nuclear program as a threat to Israel's existence and has stoked international concern by hinting at possible Israeli military action to thwart it.


He has shunted Palestinian peacemaking well down the agenda despite Western concern to keep the quest for a solution alive.


Wednesday's count forecast an even split between right-wing parties and the centre-left, with each bloc taking 60 of parliament's 120 seats.


Lapid's Yesh Atid (There is a Future) party should have 19 seats, the interim count showed - a stunning result for a newcomer to politics in a field of 32 contending parties.


Lapid won support amongst middle-class, secular voters by promising to resolve a growing housing shortage, abolish military draft exemptions for Jewish seminary students and seek an overhaul of the failing education system.


He urged Netanyahu "to build as broad a government as possible so that we can bring about real change in Israel".


The once dominant Labour party led by Shelly Yachimovich was projected to take third place with 15 seats. She described Likud victory claims as "ridiculous" before final results were in.


"There is a very good chance, a very good chance, that tomorrow morning Benjamin Netanyahu will not be able to form a government," she declared at her party headquarters.


Reconciling views to build a cabinet will certainly be hard.


"YESH ATID SWEEP"


Some in Netanyahu's party acknowledged that the election had gone somewhat awry. "We anticipated we would lose some votes to Lapid, but not to this extent. This was a Yesh Atid sweep," Likud-Yisrael Beitenu campaign adviser Ronen Moshe told Reuters.


Lapid said before the election he would consider joining a Netanyahu-led government. If that happens, the ultra-Orthodox religious parties which often hold the balance of power in parliament might lose some of their leverage.


After a lackluster campaign, Israelis voted in droves on a sunny winter day, registering a turnout of 66.6 percent, the highest since 2003. That buoyed centre-left parties which had pinned their hopes on energizing an army of undecided voters against Netanyahu and his nationalist-religious allies.


"A big majority of middle class Israelis have voted strongly against the priorities of the last government," said Dan Avnon, a political science professor at Hebrew University.


"These are the people who pay the taxes and serve in the army," he said. "I don't think they can be ignored."


Opinion polls before the election had predicted an easy win for Netanyahu, although the last ones suggested he would lose some votes to the Jewish Home party, which opposes a Palestinian state and advocates annexing chunks of the occupied West Bank.


Wednesday's interim count gave 11 seats to Jewish Home.


The biggest casualty was the centrist Kadima party, which teetered between a minimum parliamentary showing of 2 seats and political extinction, depending on the final vote tally due later on Wednesday.


Kadima had gained the highest number in the previous election in 2009, although its then leader Tzipi Livni failed to put together a governing coalition.


Official vote results will be announced on January 30. After that, President Shimon Peres is likely to ask Netanyahu, as leader of the biggest bloc in parliament, to try to form a government.


WESTERN ANXIETY


Whatever permutation finally emerges, a Netanyahu-led government is likely to resist any push for a peace deal with the Palestinians that would come anywhere near satisfying the moderates who seek a viable independent state alongside Israel.


Naftali Bennet, high-tech millionaire son of American immigrants who leads the hard-right, pro-settler Jewish Home party, was a likely coalition partner despite his election showing, which was less than surging opinion polls had predicted.


Bennet, who advocates annexing West Bank land to Israel, told cheering supporters: "There is only one truth and it is simple. The Land of Israel belongs to the people of Israel."


Britain warned Israel on Tuesday it was losing international support, saying Jewish settlement expansion had almost killed off prospects for a two-state solution.


U.S.-brokered peace talks broke down in 2010 amid mutual acrimony. Since then Israel has accelerated construction in the West Bank and east Jerusalem - land the Palestinians want for their future state - much to the anger of Western partners.


Netanyahu's relations with Obama have been notably tense and Martin Indyk, former U.S. ambassador to Israel, told the BBC the election was unlikely to change that.


"President Obama doesn't have high expectations that there's going to be a government in Israel committed to making peace and is capable of the kind of very difficult and painful concessions that would be needed to achieve a two-state solution," he said.


But Aaron David Miller, once a senior U.S. adviser on the peace process, said a weakening of the right might improve ties: "The fact is, if (Netanyahu) goes with Lapid and he reaches out to the centre, you're going to end up with an American-Israeli rapprochement to a certain degree," Miller told CNN.


Tuesday's vote was the first in Israel since Arab uprisings swept the region two years ago, reshaping the Middle East.


Netanyahu has said the turbulence, which has brought Islamist governments to power in several countries long ruled by secularist autocrats, including neighboring Egypt, shows the importance of strengthening national security.


Foreign policy issues barely registered during the election campaign, with a poll in Haaretz newspaper on Friday saying 47 percent of Israelis thought social and economic issues were the most pressing concern, against just 10 percent who cited Iran.


A major problem for the next government, which is unlikely to take power before mid-March, is the stuttering economy.


Data last week showed the budget deficit rose to 4.2 percent of gross domestic product in 2012, double the original estimate, meaning spending cuts and tax hikes look certain.


(Reporting by Jerusalem bureau; Editing by Alastair Macdonald and David Brunnstrom)



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