Region

CAIRO — A roadside bomb killed two soldiers and wounded six others on Tuesday as it struck a passing armoured vehicle in the restive Sinai peninsula, Egyptian military and medical officials said.

A military official said the explosion took place as army forces patrolled an area near the village of Al Kharouba, close to the Gaza Strip in the north.

Egypt has been battling an Islamist insurgency in North Sinai since the army ousted president Mohamed Morsi in July 2013.

Militant attacks in Sinai are spearheaded by a group called Ansar Beit Al Maqdis (Partisans of Jerusalem), the Egyptian affiliate of the Islamic state group that controls swathes of territory in Syria and Iraq.

Ansar Beit Al Maqdis has claimed some of the deadliest and most sophisticated attacks against Egyptian security forces in the Sinai peninsula, which neighbours Israel and the Palestinian enclave in Gaza.

Islamist groups say the attacks are in response to the deaths of more than 1,400 civilians and the arrests of more than 15,000 since Morsi's ouster.

Earlier this month two bombings, one of them a suicide attack on a police base, killed a civilian and an army officer. Two civilians and 30 police officers were wounded in that attack. A roadside bomb a day earlier killed three soldiers in the peninsula.

Dozens of security personnel have been killed in the unrest. Security forces say they have killed more than 172 Islamists since February in recent operations.

LONDON — The European Union is set to put 40 Iranian shipping firms back on a list of sanctioned groups in a blow to the Islamic republic's transport sector which has sought an easing of trade restrictions, letters sent from the EU showed.

The move, which comes at a critical time in international talks on Iran's nuclear programme, is part of the EU's response to a series of court victories by Iranian companies that have overturned EU sanctions against them. In February, the bloc re-imposed sanctions on Iran's biggest oil tanker firm NITC.

The 40 companies, including Hamburg-based Ocean Capital Administration GmbH, were previously placed on the EU's sanctions list because the EU said they were controlled or otherwise linked to top national carrier the Islamic Republic of Iran Shipping Lines (IRISL), which had previously been blacklisted.

In January, the bloc's second highest court annulled EU sanctions on the 40 shipping companies and an Iranian bank, which had been hit with asset freezes as part of pressure on Tehran. The general court struck down the sanctions, saying the EU had not given valid reasons for saying that IRISL was supporting nuclear proliferation.

In letters dated March 12 and seen by Reuters, that were sent by the European Council to the shipping firms' lawyer Maryam Taher, the Council said the reasons for the intended re-listings included the companies being owned or controlled by IRISL or for providing training, spare parts and services to IRISL or IRISL employees.

"Consequently, the council intends to designate your clients again," the letters said.

An EU diplomat told Reuters on Tuesday: "The [EU] Council looks at every judgement carefully and explores all choices available. A discussion on the cases you mention... will be held in the working party this week."

Taher said the decision to re-list the companies was "purely politically motivated and not based on any proper evidence" that the entities were linked with nuclear proliferation or Iran's government.

"The whole purpose of the EU sanctions is to leverage pressure on the Iranian government to come to an agreement in relation to nuclear proliferation," she said.

World powers are trying to reach a framework deal with Tehran by the end of the month that would restrict the most sensitive aspects of Iran's atomic programme in return for an easing of international sanctions, which have halved the country's oil exports to just over 1 million barrels per day since 2012 and hammered its economy.

WASHINGTON — Israel has spied on Iran's nuclear talks with the United States and other major powers, the Wall Street Journal reported Tuesday.

Israel quickly dismissed the report as "not true", and denied spying on the United States.

The Journal report, quoting current and former US officials, said the operation was designed to infiltrate the talks and help build a case against the emerging terms of a deal.

Besides eavesdropping, Israel obtained information from confidential US briefings, informants and diplomatic contacts in Europe, the officials told the Journal.

It added that more than the espionage, what irked the White House was the fact that Israel shared inside information with American legislators in a bid to sap support for a deal intended to limit Iran's nuclear programme.

Many Republicans are opposed to such an accord.

"It is one thing for the US and Israel to spy on each other. It is another thing for Israel to steal US secrets and play them back to US legislators to undermine US diplomacy," the Journal quoted a senior US official briefed on the matter as saying.

US intelligence agencies spying on Israel discovered the operation when they intercepted communications among Israeli officials. These communications carried details the Americans believed could only have come from access to the confidential talks, officials said, according to the Journal.

Outgoing Foreign Minister Avigdor Lieberman dismissed the report.

"This report is not true. Obviously Israel has security interests to defend and we have our own intelligence. But we do not spy on the United States. There are enough participants in these negotiations, including Iranians," he said in Israel.

"We got our intelligence from other sources, not from the United States. The instruction has been clear for decades now: you don't spy on the United States, directly or indirectly."

DUBAI — Yemeni Foreign Minister Riyadh Yaseen called on Monday for Gulf Arab military intervention to halt advances by Houthi fighters, a move that could draw neighbouring states into the country's deepening power struggle.

The Sunni Muslim monarchies of the Gulf back President Abed Rabbo Mansour Hadi, whose forces have recently suffered reverses at the hands of Iranian-backed Houthis approaching his base in the southern port of Aden from the north.

"We are requesting an intervention by the Gulf Shield forces to stop this Iranian-backed Houthi expansion," Yaseen told the newspaper Al Sharq Al Awsat, referring to a military force of the six-nation Gulf Cooperation Council (GCC).

"We have expressed to the GCC, the United Nations as well as the international community that there should be a no-fly zone, and the use of military aircraft should be prevented at the airports controlled by the Houthis."

The Houthis, who share a Shiite Muslim ideology with Iran, seized the capital Sanaa in September, a blow to the state which widened splits in the army. The group initially shared power with Hadi but dissolved parliament last month.

Saudi Arabia and its Arab neighbours view their takeover as a coup and believe Iran is trying to build up its power in the region by backing armed proxies.

Speaking in Riyadh, Saudi Foreign Minister Saud Al Faisal warned that Iran was trying "to sow sectarian strife" in the region and said Gulf Arab states would take steps to back Hadi.

"If this issue is not solved peacefully, we will take the necessary measures to protect the region from their aggression," he told a news conference. 

Clashes and protests 

Houthi fighters clashed with armed opponents in south and central Yemen on Monday, residents and the Houthis said. An array of tribesmen, militiamen and army units loyal to Hadi are resisting the southward advance of the Houthis, in skirmishes that have escalated since the weekend.

Houthi guerrillas backed by allied army units fought gun battles against tribesmen in Taiz province, residents said.

On its official Twitter account, the Houthis said their forces had repelled an attack by "terrorist partisans and mercenaries".

Militiamen and soldiers loyal to Hadi have built up a security belt on the approaches to Aden in recent days, placing tanks and artillery on mountaintops overlooking the frontlines with the Houthis.

Fighting also broke out between Houthi forces and tribal militiamen in the central provinces of Al Bayda and Mareb, killing at least 15 from both sides, local officials said.

The Houthi seizure on Sunday of Taiz city, Yemen's third largest, shocked opponents of the group there.

Hundreds of activists have set up a protest camp by a main army base loyal to Houthis in the city centre, and soldiers there opened fire on demonstrators and injured several, activists said.

BEIRUT — Daesh fighters attacked a military airport in Syria's Homs province on Monday as they pressed a westward offensive against government strongholds, a monitoring group said.

Forays by Daesh, which is strongest in the northeast and east, into the provinces of Homs, Hama and even Damascus pose a fresh challenge for Syrian President Bashar Assad.

Syria's army has seized control of a swathe of territory from Damascus through the cities of Homs and Hama to the western coast by defeating other, less powerful militias including rebels fighting under the banner of the Free Syrian Army.

The Syrian Observatory for Human Rights, which tracks the violence through a network of sources in the country, said Daesh attacked a military airport in Tadmur, a town in Homs province, early on Monday.

Syrian officials could not immediately be reached for comment, and the fighting was not reported on state media.

Observatory head Rami Abdulrahman said 74 soldiers in Hama province had been killed by Daesh, which he speculated launched both attacks to raise morale after losses to Kurdish forces in the northeast.

The offensive followed a three-day battle that erupted on Friday further west in Hama around Sheikh Hilal village, the observatory said. Daesh was trying to cut the road from Hama to Aleppo, once Syria's most populous city, it added.

A Syrian official said Daesh had killed around 70 people in the Sheikh Hilal area in what he described as a "massacre against civilians", adding that some of the bodies were mutilated.

Some of those killed may have been from locally formed defence groups or were off-duty soldiers but there were no military casualties, he said.

Around 200,000 people have been killed since 2011 in Syria's civil war, which pits Assad against a range of rebels including jihadist groups such as Daesh and Al Qaeda's Nusra Front. A US-led coalition is bombarding Daesh in both Syria and Iraq.

Kurdish forces, backed by coalition air strikes, defeated Daesh in the northern Syria town of Kobani this year and other areas in the northeast.

Syrian state television said Syria's army killed 19 Daesh fighters on Monday in the eastern province of Deir Al Zor, one of the insurgent group's strongholds.

Government supporters posted a video on YouTube on Saturday showing trucks covered in the national flag carrying coffins of people said to have been killed fighting Daesh in Hama province.

The footage was said to be taken in Salamiyah, a religiously-diverse town east of Hama that has been attacked by jihadist brigades.

A Daesh fighter told Reuters on condition of anonymity that the Hama campaign aimed to eventually take Salamiyah. "The ultimate goal is liberate Salamiya and Hama but it will not happen before Daesh is 100 per cent ready," he said.

TUNIS — Tunisian Prime Minister Habib Essid fired six police commanders on Monday, including the head of tourist security, after a militant attack on the national museum last week in which 20 foreign visitors were killed.

The premier's office spokesman, Mofdi Mssedi, said the six also included an intelligence brigade chief, the Tunis district police chief, the traffic police commander, a Bardo museum security chief and a commander for the capital's Sidi Bachir district.

"Prime Minister Habib Essid visited the Bardo museum yesterday and took note of several security failures there," Mssedi said.

Militant gunmen killed 20 foreign tourists, including Japanese, Polish, Italian and Spanish visitors, last Wednesday as they got off buses at the Bardo museum, inside the parliament compound that is normally heavily guarded.

It was the worst attack in more than a decade in Tunisia, testing the North African country's young democracy four years after the revolt that overthrew autocrat Zine Al Abidine Ben Ali and opened the way for free elections.

One police officer working at the museum had been arrested for abandoning his post during the attack, local radio and media reported. Officials did not immediately confirm the arrest.

Japan's Parliamentary Vice Foreign Minister Kazuyuki Nakane visited Tunisia on Monday to discuss the case with Tunisia's foreign minister.

"We gave our condolences for the families of the Japanese victims," Foreign Minister Taieb Baccouche told reporters outside the Japanese embassy in Tunis.

Foreign dignitaries have been invited to Tunis on Sunday to participate in a march against terrorism in the same way that France brought world leaders to Paris after the attacks on the Charlie Hebdo magazine by Islamist militants in January.

Another demonstration is also planned for Tunis on Tuesday when the Bardo Museum will reopen.

Two gunmen were shot dead at the scene in Tunis and authorities say they are looking for a third suspect. They have so far arrested more than 20 people, 10 of whom officials believe were directly involved in the attack. Some had recently returned from fighting for Islamist militant groups in Syria, Iraq and Libya.

Daesh militants fighting in Iraq and Syria claimed that their supporters carried out the attack although a local Al Qaeda affiliated group known as Okba Ibn Nafaa has also published details and comments on the assault.

Tunisia has been largely spared the violent aftermath of the Arab Spring uprisings of 2011, with secular and Islamist parties overcoming their divisions to compromise, approve a new constitution and hold free elections.

Hardline Islamist groups also emerged after the revolt against Ben Ali swept away his one-party rule. Since then security forces have been caught up in a growing battle with militants, some of whom are returning from training and fighting overseas.

Authorities say the two gunmen killed in the Bardo attack had trained in jihadi camps in Libya after they were radicalised in local mosques by militant recruiters. More than 3,000 Tunisians left to fight in Syria and Iraq and hundreds have returned, creating a security risk for authorities.

MUSCAT — Sultan Qaboos of Oman returned home on Monday after spending more than eight months in Germany for medical treatment that was completely successful, state television reported.

Sultan Qaboos returned after "having completed medical treatment in Germany whose results were crowned as a total success”, the television announced as it showed the 74-year-old who was thin but walking with ease from a royal plane and along a red carpet.

In his last public address, Sultan Qaboos appeared on television in November to tell his nation that he would miss the 44th anniversary of his inauguration and national day, saying his treatment was giving "good results".

A diplomatic source in Muscat had said the sultan, who has ruled Oman since overthrowing his father in a bloodless 1970 coup, was suffering from colon cancer.

When he took the reins of power, Oman was an isolated country living on the margins of the modern world with little or no infrastructure.

Sultan Qaboos has since transformed his Gulf sultanate — which sits atop proven gas reserves of 660 million cubic metres — into a modern state.

In October 2011, Sultan Sultan Qaboos, who has no children or brothers, amended the process of choosing his successor.

The sultan, whose closest relatives are cousins, appointed five top officials to a council that would be involved in confirming the new sultan in case of any royal family dispute.

CAIRO — The idea is colossal: building an eco-friendly city the size of Singapore in the desert outside Cairo, a sleek new capital fit for the 21st century where a diverse slice of society will live in harmony.

Of the projects unveiled at the corporate jamboree that was Egypt's economic conference last weekend, "The Capital Cairo" is the biggest and least transparent endeavour, the latest mega-project ordered by President Abdel Fattah Al Sisi to kick-start an ailing economy.

There will be leafy mixed-use neighbourhoods, housing for up to 7 million people, 2,000 schools, shopping malls, solar energy farms, efficient public transport, skyscrapers, a million new jobs and even a central park more than twice the size of New York City's. It's everything missing from Egypt today — with a price tag of up to $80 billion.

For urban planners, the project — described as "a dream of what could become reality" — is a mystery, hastily conceived with no concrete information on funding. Questions stick out over the actual demand for so many units, who will build required infrastructure and how to attract a diverse cross-section of society. Is a flashy Dubai-style city feasible in impoverished Egypt?

"No one's looked at it on any serious scale... It is more like a scripted media event than a serious proposal, reflecting the current government's obsession with foreign, Gulf investments somehow coming to Egypt's rescue," said Cairo-based urban planner David Sims. "Real estate is now considered the engine of Egypt's growth and what better way to stimulate it, in spite of the dismal record of new desert towns to date, than to proclaim a colossal new capital?"

Crowds flocked to a scale model of the city during the conference in the resort town of Sharm El Sheikh, where companies and states committed $36 billion in investments and billions more in preliminary agreements. In his closing remarks, Sisi said he was "in a hurry" to see the new capital built and urged work done faster than the original 10-year time frame.

Peopling the desert with new cities has been an obsession of successive presidents in the Arab world's most populous country, but after decades of work and billions spent, occupancy rates are a fraction of original forecasts. Drawing Egyptians to new sites has been a major challenge, with high prices, lack of infrastructure, and few jobs in the areas.

All that will change with the new project, initiators say. The new plan falls under the auspices of the housing ministry and will be built by an Emirati-led fund called Capital City Partners. Founding partner Mohamed Alabbar said clear profit incentives will encourage the private sector to lead the way. Alabbar is chairman of Emaar Properties, the Emirati real estate developer behind large-scale projects like the record-breaking Burj Khalifa skyscraper and Downtown Dubai.

"If you really want growth, if you want a great percentage of return, then this is the place in the Middle East... For us as businessmen, the numbers make sense," he said in Sharm El Sheikh. "I like to do big things in big countries where I know the economy and the people, and I know how eager the government [is] to move forward."

"In Egypt, I'll bite any risk any day," he added.

Others wonder if Egypt, a country with mass illiteracy, crushing poverty and tiny individual wealth compared to the energy-rich Emirates, is ready for the swank Dubai model of "world-class lifestyle" put forward by the man who built the world's first Armani Hotel.

"Let's say this does happen in seven years as the government wants. That's about 150,000 housing units per year, the same figure of what's currently being built annually in the whole country," urban policy researcher Yahia Shawkat said. "So where is the demand going to come from?"

Organisers of the project haven't revealed funding or partnership details, and requests for information went unanswered. A housing ministry official who wasn't authorised to release information and spoke anonymously said a master plan would be "released in July or August, God willing". El Watan newspaper, close to the government, reported the contract would be signed before September with execution beginning in November. Citing an unnamed government official, it said the state would hold 20 per cent of the shares in the company behind the project.

The allure of mega-projects as a way to fix the economy is clear. Growth hovers around 2 per cent, far from its all-time high of 7 per cent before the 2011 popular uprising that ousted longtime autocrat Hosni Mubarak. Unemployment stands around 13 per cent.

Since Sissi overthrew Mubarak's elected but divisive successor Mohamed Morsi of the Muslim Brotherhood in 2013, Gulf allies and Brotherhood enemies Saudi Arabia, United Arab Emirates and Kuwait have stepped in with more than $30 billion in aid. The alliance may help explain Cairo's attraction to their model of fast-paced developments on previously barren land.

But in the absence of a parliament since 2012, the government's vision for a new capital appears to have been made unilaterally.

"This is a very classic kind of developer-speak where they get public land and then start studies and consultation with the public after the fact. It's a purely speculative kind of real estate exercise, opposed to what's really needed — a structure of dialogue with people," Shawkat said.

Sisi's personal engagement in the project coupled with the sheer size of possible Gulf investments make it likely to go ahead in some form. The question now is how much the state will pay for infrastructure upgrades, or whether it can persuade private developers to pitch in.

"Egypt is facing a housing shortage and serious population growth pressures, so the move to meet that demand in new urban areas outside of Cairo is a good idea," Cairo-based urban planner Josh Drake said. But he raised concerns about the execution. "The companies will be interested in quick money by selling units, but when it comes to infrastructure and schools, community facilities and open spaces — things that cost money and have little return — they'll probably be avoiding those costs."

KHARTOUM — Leaders from Egypt, Ethiopia and Sudan signed a cooperation deal on Monday over a giant Ethiopian hydroelectric dam on a tributary of the River Nile, in a bid to ease tensions over regional water supplies.

The leaders said the "declaration of principles" would pave the way for further diplomatic cooperation on the Grand Renaissance Dam, which has stirred fears of a regional resource conflict. No details of the agreement were immediately released.

Egypt, which relies almost exclusively on the Nile for farming, industry and drinking water, has sought assurances that the dam will not significantly cut the river's flow to its rapidly growing population.

Ethiopia, the source of the Blue Nile which joins the White Nile in Khartoum and runs on to Egypt, says the dam will not disrupt the river's flow and hopes the project will transform it into a power hub for the electricity-hungry region.

Ethiopia's Prime Minister Hailemariam Desalegn told the gathering in Khartoum: "I reaffirm that Ethiopia's Grand Renaissance Dam will not cause any harm to downstream countries."

Egyptian President Abdel Fattah Al Sisi stressed his country's dependence on Nile waters. "You will develop and grow and I am with you, but be aware that in Egypt the people live only on the water that comes from this river," he said.

The principles in the agreement include giving priority to downstream countries for electricity generated by the dam, a mechanism for resolving conflicts, and providing compensation for damages, Egyptian Irrigation Minister Hossam Al Moghazi said after the ceremony.

He told reporters the signatories also pledged to protect the interests of downstream countries when the dam's reservoir is filled.

OCCUPIED JERUSALEM — Israeli Prime Minister Benjamin Netanyahu said on Monday he regretted offending Israel's Arabs during a rallying call on election day last week that his critics had denounced as racist.

In a video clip posted on his Facebook page, Netanyahu told representatives of Israel's Arab community: "I know that the things I said a few days ago offended Israel's Arabs. I had no intention for this to happen, I regret this."

Fearing his voters would stay home, Netanyahu, who won a surprise election victory last Tuesday and is set to head a new government, accused left-wing organisations of bussing Arab-Israelis to the polls "in droves" to vote against him.

"The rule of the right is in danger," he said at the time.

Speaking to the group of Arab Israelis at his official residence in Jerusalem on Monday, Netanyahu said: "I consider myself as prime minister of each one of you, of all Israel's citizens, regardless of religion, race or gender."

While he got a warm reception from those present, his comments were rejected by Ayman Odeh, leader of the Joint Arab List, which secured 13 seats at the last week's election to become the third largest force in parliament.

"We do not accept this apology. It was to a group of elders and not to the elected leadership of Israel's Arabs ... I want to see actions, how is he going to manifest this apology? ... will he advance equality?" Odeh told Israel's Channel 10.

Arab Israelis make up around 20 per cent of the country's 8 million-strong population.

They are descendants of residents who stayed put during the 1948 war of Israel's creation, in which hundreds of thousands of fellow Palestinians fled or were forced to leave their homes, ending up in Jordan, Lebanon and Syria as well as in the occupied West Bank, Gaza Strip and East Jerusalem.