"I advise, recommend and warn them (the Americans) over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once," the semi-official Fars news agency quoted Salehi as saying. Salehi did not name the aircraft carrier or give details of the action Iran might take if it returned. However, last week a spokeswoman for the US 5th Fleet said the USS John C Stennis had left the Gulf.

Iran completed 10 days of naval exercises in the Gulf on Monday, and said during the drills that if foreign powers imposed sanctions on its crude exports it could shut the Strait of Hormuz, through which 40 percent of the world's traded oil is shipped. The US Fifth Fleet, which is based in Bahrain, said it would not allow shipping to be disrupted in the strait.

Its plans come after the Coalition raised the VAT rate to 20 per cent last year but kept an exemption for food, children's clothes, passenger travel, books, newspapers and other products. Last night the proposals sparked outrage among politicians and public-spending campaigners who attacked the Eurocrats for trying to interfere in Britain's tax affairs. Ukip leader Nigel Farage said: "In their desperation to raise cash, the EU is prepared to do anything and hurt the most vulnerable."

"These plans would add up to 20 per cent costs on food and children's clothes. To put an extra tax on books and newspapers would be a strike for ignorance over education." Everyone would suffer, but the most vulnerable would suffer the most. The Commission, supported by the London-based Institute for Fiscal Studies think-tank, called for the exemptions to be abandoned to allow a common VAT regime that would streamline the single market. But the move, which could raise 24 billion pounds a year for Government coffers, would deliver a crippling blow to the country's poorest families and hard-pressed pensioners.

Eurocrats and the institute argue that much of the money could be given back by cutting the standard rate of VAT, lower income tax and increases in benefits. But John O'Connell, of the TaxPayers' Alliance, said: "The UK's tax system is too burdensome and too complex, but changes should be decided here not by Eurocrats."

''There is no possibility in the current situation of evaluating what will happen the day after Bashar's fall,'' he said. Barak warned the committee the fall of the Assad family could have implications for the Israeli-occupied Golan Heights. ''In the north, there may be possible implications from Syria on the Golan Heights and a broader area as the result of the loss of control,'' he said on Monday in a separate statement released by his office.

Syrian opposition leaders have said that Israel will "likely remain an enemy" in the eyes of any government they head. Assad has been at the helm of a bloody crackdown on pro-democracy activists that UN Human Rights officials estimate has killed more than 5,000 civilians since 'Arab Spring' protests erupted in Syria early in 2011. Assad and his Hizbullah allies have insinuated Lebanese opposition figures who recently met with Saudi officials in Riyadh are linked to anti-Assad insurgents in Syria.

Saudi Arabia and its Gulf allies have sought to isolate Assad as a means of undercutting rival Iran's axis of influence in the region.

Harry Burkhart, 24, was booked for investigation of arson of an inhabited dwelling and was being held without bail, authorities said. He is a German national, but authorities said they didn't know how long he's been in the United States. Police said he told arresting officers he's from Frankfurt. Burkhart was arrested earlier in the day because he resembled a "person of interest" captured on surveillance video. He was stopped by a reserve sheriff's deputy in a van being sought by arson investigators, who did not rule out the possibility that others may be involved.

More than 50 blazes have flared since Friday in Hollywood, neighboring West Hollywood and the San Fernando Valley, causing about $3 million in damage. Firefighters have not responded to any other suspicious fires since Burkhart was detained. The blazes forced many apartment dwellers from their homes. But there were no serious injuries - one firefighter was hurt in a fall from a ladder, and another person suffered smoke inhalation. Most of the fires began in cars, and authorities have not said how they were started.

The demonstration near the city's opera house comes amid rising anger with the ruling Fidesz party, which critics - including the US secretary of state, Hillary Clinton - fear is eroding individual liberties and media freedom while undermining the independence of the judiciary and other state institutions. Across town, outside the headquarters of the state broadcaster MTV, journalists have been on hunger strike since 9 December, protesting at what they say is gross interference in their work by pro-government editors. They were outraged after a former chief justice was airbrushed out of a state television broadcast, evoking the dark days of media manipulation during the Soviet era.

There were also protests in December when Klubradio, a popular liberal radio station critical of the government, announced it would have to shut down in 2012 after its frequency was given to a new company. The decision was taken by the controversial Media Council, whose members are all nominated by Fidesz. Last week MPs from the Politics Can Be Different (LMP) party were arrested when they chained themselves to the parliament gate in a protest at the government's unilateral law changes.

With two-thirds of all MPs in the Hungarian parliament, Fidesz is able to pass dramatic legislation unhindered by the opposition. In 18 months in office, the government has passed hundreds of new laws. On Friday, it ignored warnings from the International Monetary Fund and the European Union to approve new central bank regulations which give the government the power to appoint bank deputies.

The IMF and the EU had already broken off talks which had been scheduled to discuss a bailout of Hungary's faltering economy. The country's finances are in such a poor state that just before Christmas the ratings agencies Moody's and S&P downgraded Hungary's debt to junk category. At a government securities auction last week, just 50% of a total offer of 100 million euros were sold at extremely high yields, suggesting that investors had lost faith.

Tensions between Iran and the West escalated again on Monday as Tehran announced it had test-fired two long-range missiles in international waters near the strategic Strait of Hormuz. "We have successfully test-fired long-range shore-to-sea and surface-to-surface missiles, called Qader (capable) and Nour (Light) today," Deputy navy Commander Mahmoud Mousavi told state television.

Amid ongoing international criticism of Iran's nuclear program, the missile launches were Tehran's latest show of force in military exercises started in response to the pressure. Monday's maneuvers came after the country announced the launch of a medium range missile the day before. The so-called war games could bring Iranian ships near US naval forces operating in the Persian Gulf. Both the US and Israel have not ruled out a military response in the conflict over Iran's nuclear ambitions, and US forces based in Bahrain have said they will not allow a closure of the important Strait of Hormuz - through which 40 percent of the world's crude oil is transported.

Center-left daily Suddeutsche Zeitung writes:

"The United States and Iran are playing a dangerous game of cat and mouse... It remains unclear just how strict the US government will be in applying the new sanctions. The White House can approve exceptions. But if punishments are pushed through to their full extent, they will amount to an economic blockade against Iran."

"The US sanctions are the toughest yet to be levied against Tehran in the battle over Iran's nuclear program. And they are risky. In the past, when such blockades were enforced by military ships along foreign coasts, they were considered an act of war. If Iran's oil doesn't reach the world market, oil prices will reach painful levels for the West. Still, even if there is little to suggest that Iran will back down, it's worth a try. The alternatives would be far more uncomfortable: Iran with nuclear weapons or an Israeli military strike."

Conservative daily Die Welt writes:

"Ten years ago former US President George W Bush coined the phrase "axis of evil" when he gave his State of the Union speech on January 29, 2002, describing Iraq, Iran and North Korea as regimes who aimed to threaten the West with terror and weapons of mass destruction. In Europe, no one wanted to accept this culturally antiquated moral-religious speech, also finding the term 'axis' confusing, as it implied these nations were forming an alliance... Today, Iran, Syria and North Korea do advise and support each other about rockets and even nuclear questions."

"Bush was right in his diagnosis. Dictators remain dictators, evil and hostile. One shouldn't tolerate them, and must instead fight them with all possible means. Especially Iran and North Korea."

The conservative Frankfurter Allgemeine Zeitung writes:

"Iran is playing with fire. With even the tiniest wrong move, the Middle East could be left in flames... According to an Iranian General, closing the Strait (of Hormuz) would be as simple as drinking a glass of water. But Iran would only be harming itself that way."

"The country's Arabic neighbors are alarmed. Even the threat of closing the strait is tantamount to blackmail. They turn cold with the thought that Iran could soon be armed with atomic weapons, becoming even more aggressive. The only way to prevent this is once again more weapons from America."

When asked whether it is a requirement for the government in Egypt to recognize Israel, Bayoumi responded by saying: "This is not an option, whatever the circumstances, we do not recognize Israel at all. It's an occupying criminal enemy." The deputy leader stressed during the interview that no Muslim Brotherhood members would ever meet with Israelis for negotiations."I will not allow myself to sit down with criminals."

Bayoumi went on to say that the Muslim Brotherhood would take legal procedures towards canceling the peace treaty between Egypt and Israel that was signed in 1979. "The Brotherhood respects international conventions, but we will take legal action against the peace treaty with the Zionist entity," he told the paper. At the beginning of December, Egypt's two leading Islamist parties won about two-thirds of votes for party lists in the second round of polling for a parliament that will help draft a new constitution after decades of autocratic rule.

Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show. The International Monetary Fund cut its forecast for growth this year to 4 percent from a prior estimate of 4.5 percent as Europe's debt crisis spreads, the US struggles to reduce a budget deficit exceeding $1 trillion and China's property market cools. "The weight of supply may be a concern," Stuart Thomson, a money manager in Glasgow at Ignis Asset Management Ltd., which oversees $121 billion, said in a December 28 telephone interview. "Rather than the start of the year being the problem, it's the middle part of the year that becomes the problem. That's when we see the slowdown in the global economy having its biggest impact."

The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. Coming after a year in which Standard & Poor's cut the US's rating to AA+ from AAA and put 15 European nations on notice for possible downgrades, the competition to find buyers is heating up. "It is a big number and obviously because many governments are still in a deficit situation the debt continues to accumulate and that's one of the biggest problems," Elwin de Groot, an economist at Rabobank Nederland in Utrecht, Netherlands, part of the world's biggest agricultural lender, said in an interview on December 27.

After Italy, France has the most amount of debt coming due, at $367 billion, followed by Germany at $285 billion. Canada has $221 billion, while Brazil has $169 billion, the UK has $165 billion, China (PRCH) has $121 billion and India $57 billion. Russia has the least maturing, or $13 billion. Rising borrowing costs forced Greece, Portugal and Ireland to seek bailouts from the European Union and IMF. Italy's 10 year yields exceeded 7 percent last month, a level that preceded the request for aid from those three nations.

For a table of bond and bill redemptions and interest payments in 2012 for the Group of Seven countries, Brazil, China, India and Russia, in dollars, using data calculated by Bloomberg as of December 29, go to:

http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html

But officials from both sides have played down the prospect of any imminent resumption in peace talks. Negotiations stalled in late 2010 after Israel refused to freeze Jewish settlement building in the West Bank. Both Israeli and Palestinian officials have done nothing to raise expectations ahead of the meeting, reports the BBC's Kevin Connolly in Jerusalem. The priority for both sides will be to avoid blame if the process cannot be restarted, he adds.

"The Jordanian efforts are the last-minute efforts to salvage the situation," Mr Erekat told reporters at a news conference in Ramallah ahead of the talks. "We hope that the Israeli government would reciprocate the Jordanian efforts by announcing cessation of settlement activities and the acceptance of the concept of the two-state solution," he told AP. Jordan is hosting the talks as part of efforts to resume direct peace negotiations between the two sides.

Representatives of Palestinian Islamist group Hamas, which runs the Gaza Strip, have condemned the meeting. "This meeting will continue the policy of failure... We in the Hamas movement demand that the Palestinian Authority stop and boycott all these kinds of meeting which are politically dangerous," Hamas spokesman Sami Abu Zuhri told Reuters. Direct talks between Israel and the Palestinians stalled in September 2010. The Palestinians walked out in protest at the building of Jewish settlements in the occupied West Bank. Almost 500,000 Jews live in settlements on occupied territory. The settlements are illegal under international law, although Israel disputes this.

The sanctions target both private and government-controlled banks - including central banks - and would take hold after a two to six month warning period, depending on the transactions, a senior Obama administration official said. Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the US national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.

Sanctioned institutions would be frozen out of US financial markets. "Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world," the senior US official told Reuters. Iran's central bank is the main conduit for Tehran's oil revenues.

Obama signed the bill during his vacation in Hawaii, just hours after Tehran said it had delayed planned long-range missile tests in the Gulf and signaled it was ready for fresh talks on its disputed nuclear program. Senior US officials said Washington was consulting with its foreign partners to ensure the new sanctions can work without harming global energy markets. They stressed the US strategy of both isolating and remaining open to engagement with Iran was unchanged.

It said 50 people were injured and more than 100 detained after several hundred members of China's Muslim Hui minority tried to stop the demolition. Police demolished the mosque after the clash, said the employee, who refused to give her name. She said she did not know how many people were involved or why police demolished the mosque.

The Communist government closely monitors religious activity and worries that mosques and other houses of worship might become centers for anti-government agitation. The Hui are one of several Muslim minority groups in China. They include descendants of Muslim immigrants from Central Asia, members of China's majority Han ethnicity who converted to Islam and several other groups.

Several federal rules change with the new year, too, including a Social Security increase amounting to $450 a year for the average recipients and stiff fines up to $2,700 per offense for truckers and bus drivers caught using hand-held cellphones while driving. NBC News, the National Conference of State Legislatures, The Associated Press, and other organizations tracked the changes and offered their views on the highlights.

Many laws reflect the nation's concerns over immigration, the cost of government and the best way to protect and benefit young people, including regulations on sports concussions. Eight states will raise the minimum wage, NBC News reported. They include Arizona, Oregon, Washington, Montana, Colorado, Ohio, Vermont and Florida, NBC News said. San Francisco will become the first city to raise its minimum wage above $10 per hour. The new $10.24 minimum is nearly $3 above the federal minimum wage of $7.25 per hour, set in 2009.

January 1 is the effective date in many states for laws passed during this year's legislative sessions. In others, laws take effect July 1, or 90 days after passage.

It was the highest number ever in a single month, surpassing the previous record set in November. On December 23 alone there were 102,222 background checks, making it the second busiest single day for buying guns in history. The actual number of guns bought may have been even higher if individual customers took home more than one each. Explanations for America's surge in gun buying include that it is a response to the stalled economy with people fearing crime waves. Another theory is that buyers are rushing to gun shops because they believe tighter firearms laws will be introduced in the future.

The National Rifle Association said people were concerned about self defence because police officer numbers were declining. A spokesman said: "I think there's an increased realisation that when something bad occurs it's going to be between them and the criminal." But anti-gun campaigners said those who already owned weapons were simply hoarding more of them due to "fear-mongering" by the NRA. A spokeswoman for the Brady Campaign to Prevent Gun Violence said: "The research we've seen indicates fewer and fewer people are owning more and more guns."

Dave LaRue, of Legendary Guns in Phoenix, Arizona, said Christmas sales were up 25 per cent on the previous year and ammunition sales were also "brisk". He said: "There are a lot of people concerned about pending gun legislation and the sense about the current administration. People think future availability will be limited and there's a feeling of get it while you can."

2011 was a dire year for equities outside the United States with world stocks poised to drop by around eight percent and emerging markets faring far worse. Crude oil has been among the best performers with a roughly 10 percent increase and gold has matched it as a loss of confidence in the euro zone accelerated a flight to bullion.

So where next? The answer to that question depends on whether you believe policymakers in Europe, Asia and America will muddle through or whether a new cataclysm is imminent.

But given all the uncertainties - who could have predicted the Arab Spring this time last year or the devastation wreaked on Japan - picking the right moment to dive in will be hair-raising. "A very nasty outcome, with a collapse of the euro zone triggering a steep global recession, perhaps exacerbated by structural problems in China, is not impossible," HSBC global equity strategists said in a note.

The S&P 500, a measure of the biggest US companies' market value, spent much of the year getting pushed up and down, flummoxing shorts and longs - and scaring Moms and Pops away from stocks. It ended the year at 1,257.60, down a mere 0.04 of a point. But the S&P 500's tepid performance was encouraging, compared with other world equity markets. The United States may still be seen as a safe haven, though even that looks uncertain.

For every rally built on improving economic figures this year, selloffs were never far away on worries the European debt crisis would eventually drag the continent into a recession and perhaps the United States as well. That could continue in 2012. China and other fast-growing emerging markets can no longer be leaned on as those economies slow. In 2011's last half, the poorest-performing sectors outside of banks were most connected to global growth - materials, energy and industrial companies.

"There is a growing realization that the global economy is in jeopardy," said Bruce Bittles, chief investment strategist at Robert W Baird & Co in Nashville. "There is uncertainty in every corner of the world."