Italy's lower house approves Monti's budget plans

ROME (Reuters) - Italy's lower house of parliament on Thursday approved a package of budget measures including a sales tax hike and a cut in some payroll taxes, aimed at helping the government reach its deficit-cutting targets.

Approval was expected after Prime Minister Mario Monti's government won three confidence votes on Wednesday that it had called to speed up passage of the budget.

The measures will now move to the Senate for approval, which is expected before Christmas.

The Chamber of Deputies approved the plans by 372 votes against 73.

The budget, enshrined in a so-called Stability Law, is central to Monti's efforts to lower Italy's public deficit to 1.8 percent of output next year from a targeted 2.6 percent in 2012.

Monti agreed at the end of October to overhaul the first draft of the budget legislation by replacing a planned income tax cut with a reduction in payroll taxes paid by employers.

The package still includes a one percentage point rise in the highest value-added tax (VAT) rate, which will go into effect next July, bringing it to 22 percent. The lower 10 percent rate will not be increased as previously planned.

The Stability Law is expected to be one of the final pieces of major legislation approved under Monti before Italy gears up for a national election.

(Reporting by Giuseppe Fonte,; Writing by Catherine Hornby; Editing by Hugh Lawson)

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Congo army fights back as rebels hold Goma

SAKE/GOMA, Democratic Republic of Congo (Reuters) - Congolese troops were fighting back on Thursday against rebels who rejected calls from African leaders to quit the eastern city of Goma, captured earlier this week.

Thousands of people fled the area of clashes around the town of Sake, as M23 rebel fighters rushed from Goma to reinforce their positions there against a counter-offensive by the army.

The rebel movement, widely believed to be backed by Rwanda, has vowed to "liberate" all of the vast, resource-rich country after taking Goma, a provincial capital on the Rwandan border, ramping up tensions in a fragile region.

The head of M23's political arm said the rebels would not retreat despite the call to do so from governments in central Africa, preferring to hold their ground until President Joseph Kabila opens direct talks with them: "We'll stay in Goma waiting for negotiations," Jean-Marie Runiga told Reuters in the city.

"They're going to attack us and we're going to defend ourselves and keep on advancing."

Rebel fighters seized the sprawling lakeside city of a million people on Tuesday after government soldiers retreated and U.N. peacekeepers gave up trying to defend it.

The next day the rebels moved in unopposed to Sake, a strategic town about 25 km (15 miles) west along the main road. It was there that government troops and allied militia were hitting back in fighting the flared up late on Wednesday.

Regional and international leaders have been scrambling to halt the fresh conflagration in the Great Lakes, a region of many colonial-era frontiers and long a tinderbox of ethnic and political conflict, fuelled by mineral deposits.

On Wednesday, foreign ministers from the states of the Great Lakes region demanded the rebels leave Goma and halt their advance, and Kabila - in a concession to the rebels that fell short of opening talks - promised to look into their grievances.

"I'm not confident, because I've already waited for three months in Kampala for talks," Runiga said of a recent spell in the capital of Uganda, which has tried to mediate in the Democratic Republic of Congo (DRC).

Neighboring Uganda and Rwanda had no right to make demands of M23, added the group's political chief, who styles himself Bishop Runiga, a post he holds in several Congolese churches.

He said M23 wanted aid groups to return to Goma, after they evacuated during the fighting. Reuters correspondents in the city saw some aid workers driving in the town on Thursday.

RENEWED CLASHES

Thousands of residents fled the town of Sake on Thursday, a Reuters correspondent in Sake said, as gun battles continued.

"It's no problem, it's just war," Vianney Kazarama, an M23 spokesman, said by telephone, adding that the clashes had begun late on Wednesday.

Several truckloads of M23 fighters sped toward Sake from Goma as the fighting raged on Thursday afternoon.

M23 takes its name from a peace deal, signed on March 23, 2009, that was meant to bring former rebels into the national army, but which the group says the government has violated.

The group has since sought to broaden its support in Congo by tapping into popular frustrations over the government's slow pace of reform in one of the world's least developed and most turbulent nations.

But the effort has faced hurdles amid mounting evidence of Rwanda's involvement in the insurgency.

Kabila's government insists the M23 rebellion is a creation of Rwanda, which has intervened repeatedly in Congo over the past 18 years - and the claim is backed by U.N. experts who say Kigali is both commanding and supporting the insurgency in part to control the region's minerals.

Many of Rwanda's international allies, including the United States, Sweden, the Netherlands and the European Union have suspended some aid over the allegations.

Britain, which unblocked part of its frozen aid in September citing Rwandan efforts to solve the crisis, said it was now considering new evidence that could affect future aid.

"We judge the overall body of evidence of Rwandan involvement with M23 in the DRC to be credible and compelling," British Foreign Secretary William Hague said in a statement.

"These allegations will necessarily be a key factor in future aid decisions to the Government of Rwanda."

The United Nations on Wednesday defended its failed effort to prevent rebels from seizing Goma, saying its helicopters had fired hundreds of rockets at rebels but were unable to beat them back as their ranks swelled dramatically.

Runiga said M23 had the capacity to hang on to Goma, after its force was bolstered by mutinying Congolese soldiers from Kabila's army, the FARDC.

"Absolutely," he said. "Firstly we have a disciplined army, and also we have the FARDC soldiers who've joined us.

"They're our brothers, they'll be retrained and recycled then we'll work with them."

(Writing by Richard Valdmanis; Editing by David Lewis and Alastair Macdonald)

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Opera boss gets top job at scandal-hit BBC

LONDON (Reuters) - The BBC appointed a former journalist who runs the Royal Opera House to lead the broadcaster on Thursday after sex abuse scandals that shook public trust in one of Britain's most treasured institutions.

Tony Hall, a former a former director of BBC news, will replace George Entwistle who resigned as director-general this month after failing to get to grips with a scandal that threw the 90-year-old state-funded organization into turmoil.

Chris Patten, chairman of the BBC Trust which overseas the broadcaster and appoints its chief, said Hall was "the right person to lead the BBC out of its current crisis" and that his journalism experience would be "invaluable as the BBC looks to rebuild its reputation."

Hall, who will take up the role in March, left the BBC shortly after missing out on the top job in 2001.

His predecessor lasted just 54 days in the job, widely criticized for lacking leadership amid a scandal centering on the former BBC presenter Jimmy Savile, who died last year and has since been exposed as a predatory serial child abuser.

Already under fire for his handling of the Savile affair, Entwistle quit after the BBC's flagship program "Newsnight" wrongly claimed a senior Conservative politician had also been involved in child sex abuse.

"The past eight weeks have been very traumatic for the BBC but this is a significant day ... (that) marks the beginning of a new phase," Patten said in a statement.

In early reaction, media analysts greeted the appointment of Hall as a sound choice.

"He is an insider in the sense that the BBC will not be strange to him, but he is an outsider in the sense that he has good experience of running quite a difficult public sector institution, and doing so rather well," said Steven Barnett, professor of communication at Westminster University.

Hall, he added, was "definitely someone who the BBC can rely on to get it out of the mess that it is in now."

Roy Greenslade, professor of journalism at City University, London said: "I'm delighted. I think he's a very wise appointment.

"He's a rare combination: someone who rose very high at the BBC, but who's also done well outside it.

"I think he covers both essential facets of what you need in a director-general. He has news experience - which will be essential to clean up this Newsnight mess - and he has business experience at the Royal Opera House."

John Whittingdale, chairman of parliament's media committee, said the Trust had been sensible to move quickly in making a new appointment but he questioned whether Hall would be able to deal with reforming BBC bureaucracy.

"The area where there does need to be strong leadership is in streamlining and getting to grips with the bureaucracy and structure within the BBC," Whittingdale told Reuters.

"That, possibly, is an area where Tony Hall doesn't have experience and there might have been a case for somebody with more external management experience."

(Additional reporting by Tim Castle and Peter Schwartzstein; Editing by Robin Pomeroy)

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Sudan says arrests ex-spy chief after foiled plot

KHARTOUM (Reuters) - Sudan arrested its former spy chief and other senior military and security officers on Thursday after foiling what officials said was a plot to incite chaos and target leaders in this oil-producing African state.

Witnesses told Reuters they saw army tanks and armored vehicles moving down a main street in the centre of Khartoum around midnight, but life in the city was normal during the day with shops in the centre bustling with customers.

Sudan's President Omar Hassan al-Bashir has kept up a 23-year hold on power, even as a series of uprisings troubled the country's poor border areas, including the conflict-torn region of Darfur.

But Sudan has been stuck in economic crisis since the south - the source of most of its known oil-reserves - declared independence last year under the terms of a peace deal.

High prices for food have added to widespread public anger over losing the south and have emboldened opposition activists to call for protests. Analysts say the crisis has also exacerbated divisions in the government and squeezed the patronage system they say Bashir has relied on.

(To see a special report on Bashir's Sudan, please click on ID:nL3E8MD574])

Unrest over price rises and food and fuel shortages has preceded coups in Sudan in the past.

Salah Gosh, former head of Sudan's powerful intelligence and security agency, was arrested with others on suspicion of "inciting chaos", "targeting" some leaders and spreading rumors about Bashir's health, the information minister told reporters.

Bashir, 68, has undergone throat surgery twice since the summer. Officials insist he is in good health.

"A lot of evidence was gathered showing there is a movement aiming to incite chaos, target some leaders and undermine the country's stability," the minister Ahmed Belal Osman, said.

"The situation is now totally stable," he added, naming Gosh and two other arrested officers including Wad Ibrahim, a prominent Islamist in the army.

Some Islamists inside the army and the ruling National Congress Party have said that Bashir and other senior leaders have abandoned the religious values of the 1989 coup and have concentrated decision-making in the hands of a few people.

Some also feel Bashir has been too soft on South Sudan, which temporarily wrong-footed the Sudanese army by seizing a major oilfield during border fighting in April - a shock to many officers.

TANKS HEADED DOWNTOWN

Witnesses said they saw military vehicles on a major street that runs alongside the city's airport overnight.

"We saw something unusual in Khartoum ... four armored vehicles and two tanks on Abeid Khatim Street heading in the direction of downtown," one witness said, asking not to be named.

Security at the defense ministry, intelligence headquarters and other buildings associated with military and security authorities appeared normal early in the morning, a Reuters witness in the city said.

Sudan has been plagued by political conflicts and crises for most of its history since independence from Britain in 1956.

Decades of civil war between the north and south culminated with South Sudan's independence in July last year under a 2005 peace deal.

Tensions in both nations and between the two states have been high since then. The two countries accused one another of incursions in disputed border zones on Wednesday, a setback to recent security and border deals.

Small demonstrations against cuts in fuel subsidies and other austerity measures broke out across Sudan in June but petered out after a security crackdown and the start of the Muslim fasting month of Ramadan.

"PLOTTING LIKE BREATHING"

Gosh was once among Sudan's most influential officials. As chief of the National Intelligence and Security Service, he headed what is one of the country's most powerful institutions alongside the army.

Bashir removed Gosh as spy chief in 2009, replacing him with the current head Mohammed Atta al-Moula. Officials did not explain the decision to sack Gosh at the time, but Khartoum political circles widely speculated the former chief was suspected of plotting against Bashir.

A leaked U.S. diplomatic cable from 2008 quoted a government official as saying Gosh had mused about the possibility an International Criminal Court arrest warrant for Bashir could lead some to try to replace the president.

"Conspiracy and plotting is like breathing in Sudan," the cable noted.

Gosh had been appointed presidential adviser on security affairs, but was also removed from that position last year.

Western rights groups have accused Gosh of complicity in abuses in the country's Darfur region, which has endured a nearly decade-old insurgency.

But while the ICC has issued arrest warrants for Bashir and other officials on charges of war crimes in Darfur, Gosh has never been indicted.

The former spy chief is also described by historians and analysts as a key interlocutor with U.S. officials when Sudan was cooperating with the United States by providing information on al Qaeda in the years after the September 11 attacks.

(Writing by Alexander Dziadosz and Ulf Laessing; Editing by Andrew Heavens)

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Georgia PM aims to strengthen his role before presidential vote

TBILISI (Reuters) - Georgia's new prime minister aims to change the constitution to boost his powers before a presidential vote next year, he said on Thursday, but will not try to impeach rival President Mikheil Saakashvili.

Bidzina Ivanishvili won power in a parliamentary election last month that ended Saakashvili's nine-year political dominance but left Georgia with an uneasy "cohabitation" government, with the president still in place, at least until October.

"We are not going to initiate the (president's) impeachment," Ivanishvili told a news conference, adding: "We will probably initiate constitutional amendments which will be clear to everyone."

Under Ivanishvili, authorities have arrested more than 10 former senior officials, including an ex-interior minister and the army chief-of-staff, raising opposition fears of a purge and drawing criticism from Saakashvili's allies in the West.

Parliament approved the constitutional changes - giving more powers to the legislature and the prime minister - before the election which brought the billionaire businessman to office - but they were due to take effect only after the October 2013 presidential election.

"We want these amendments to come into force earlier," Ivanishvili said. "Not after the election in October 2013, but earlier."

Ivanishvili signaled that relations with the West were a priority by making Brussels his first foreign trip last week. But he said a planned visit to the United States would be postponed until next year.

NATO and European Union leaders upbraided the prime minister over the arrest of political opponents as he visited Brussels and Ivanishvili said afterwards that his four-day absence had harmed the government's work.

The 56-year-old made his fortune mainly in Russia and faces a difficult balancing act between the West and Moscow, which welcomed his election victory. He ruled out a visit to Russia, but said he might meet Russian officials in some neutral territory.

"My visit to Russia is impossible as there are Russian embassies in (disputed territories) Abkhazia and South Ossetia ... but there might be meetings in Europe or somewhere else, although it's too early to talk about it," Ivanishvili said.

Saakashvili secured a promise of eventual NATO membership for his country of 4.5 million, but the alliance rejected calls led by former U.S. President George W. Bush for quick accession in 2008.

Months later, Georgia fought a five-day war with Russia over the breakaway regions of South Ossetia and Abkhazia, which Russia says are now independent states.

(Reporting by Margarita Antidze; Editing by Robin Pomeroy)

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Gaza ceasefire holds but mistrust runs deep

GAZA/JERUSALEM (Reuters) - A ceasefire between Israel and Hamas held firm on Thursday with scenes of joy among the ruins in Gaza over what Palestinians hailed as a victory, and both sides saying their fingers were still on the trigger.

In the sudden calm, Palestinians who had been under Israeli bombs for eight days poured into Gaza streets for a celebratory rally, walking past wrecked houses and government buildings.

But as a precaution, schools stayed closed in southern Israel, where nerves were jangled by warning sirens - a false alarm, the army said - after a constant rain of rockets during the most serious Israeli-Palestinian fighting in four years.

Israel had launched its strikes last week with a declared aim of ending rocket attacks on its territory from Gaza, ruled by the Islamist militant group Hamas, which denies Israel's right to exist. Hamas had responded with more rockets.

The truce brokered by Egypt's new Islamist leaders, working with the United States, headed off an Israeli invasion of Gaza.

It was the fruit of intensive diplomacy spurred by U.S. President Barack Obama, who sent his secretary of state to Cairo and backed her up with phone calls to Israeli Prime Minister Benjamin Netanyahu and Egyptian President Mohamed Mursi.

Mursi's role in cajoling his Islamist soulmates in Gaza into the U.S.-backed deal with Israel suggested that Washington can find ways to cooperate with the Muslim Brotherhood leader whom Egyptians elected after toppling former U.S. ally Hosni Mubarak, a bulwark of American policy in the Middle East for 30 years.

Mursi, preoccupied with Egypt's economic crisis, cannot afford to tamper with a 1979 peace treaty with Israel, despite its unpopularity with Egyptians, and needs U.S. financial aid.

MORE DEATHS

Despite the quiet on the battlefield, the death toll from the Gaza conflict crept up on both sides.

The body of Mohammed al-Dalu, 25, was recovered from the rubble of a house where nine of his relatives - four children and five women - were killed by an Israeli bomb this week.

That raised to 163 the number of Palestinians killed, more than half of them civilians, including 37 children, during the Israeli onslaught, according to Gaza medical officials.

Nearly 1,400 rockets struck Israel, killing four civilians and two soldiers, including an officer who died on Thursday of wounds sustained the day before, the Israeli army said.

Israel dropped 1,000 times as much explosive on the Gaza Strip as landed on its soil, Defense Minister Ehud Barak said.

Municipal workers in Gaza began cleaning streets and removing the rubble of bombed buildings. Stores opened and people flocked to markets to buy food.

Jubilant crowds celebrated, with most people waving green Hamas flags but some carrying the yellow emblems of the rival Fatah group, led by Western-backed President Mahmoud Abbas.

That marked a rare show of unity five years after Hamas, which won a Palestinian poll in 2006, forcibly wrested Gaza from Fatah, still dominant in the Israeli-occupied West Bank.

Israel began ferrying tanks northwards, away from the border, on transporters. It plans to discharge gradually tens of thousands of reservists called up for a possible Gaza invasion.

But trust between Israel and Hamas remains in short supply and both said they might well have to fight again.

"The battle with the enemy has not ended yet," Abu Ubaida, spokesman of Hamas's armed wing Izz el-Deen Al-Qassam Brigades, said at an event to mourn its acting military chief Ahmed al-Jaabari, whose killing by Israel on November 14 set off this round.

"HANDS ON TRIGGER"

The exiled leader of Hamas, Khaled Meshaal, said in Cairo his Islamist movement would respect the truce, but warned that if Israel violated it "our hands are on the trigger".

Netanyahu said he had agreed to "exhaust this opportunity for an extended truce", but told Israelis a tougher approach might be required in the future.

Facing a national election in two months, he swiftly came under fire from opposition politicians who had rallied to his side during the fighting but now contend he emerged from the conflict with no real gains for Israel.

"You don't settle with terrorism, you defeat it. And unfortunately, a decisive victory has not been achieved and we did not recharge our deterrence," Shaul Mofaz, leader of the main opposition Kadima party, wrote on his Facebook page.

In a speech, Ismail Haniyeh, Hamas's prime minister in Gaza, urged all Palestinian factions to respect the ceasefire and said his government and security services would monitor compliance.

According to a text of the agreement seen by Reuters, both sides should halt all hostilities, with Israel desisting from incursions and targeting of individuals, while all Palestinian factions should cease rocket fire and cross-border attacks.

The deal also provides for easing Israeli curbs on Gaza's residents, but the two sides disagreed on what this meant.

Israeli sources said Israel would not lift a blockade of the enclave it enforced after Hamas won a Palestinian election in 2006, but Meshaal said the deal covered the opening of all of the territory's border crossings with Israel and Egypt.

Israel let dozens of trucks carry supplies into the Palestinian enclave during the fighting. Residents there have long complained that Israeli restrictions blight their economy.

Barak said Hamas, which declared November 22 a national holiday to mark its "victory", had suffered heavy military blows.

"A large part of the mid-range rockets were destroyed. Hamas managed to hit Israel's built-up areas with around a metric tone of explosives, and Gaza targets got around 1,000 metric tonnes," he said.

He dismissed a ceasefire text published by Hamas, saying: "The right to self-defense trumps any piece of paper."

He appeared to confirm, however, a Hamas claim that the Israelis would no longer enforce a no-go zone on the Gaza side of the frontier that the army says has prevented Hamas raids.

(Additional reporting by Noah Browning in Gaza, Ori Lewis, Crispian Balmer and Dan Williams in Jerusalem; Writing by Jeffrey Heller and Alistair Lyon; Editing by Giles Elgood)

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Egypt's Mursi sacks general prosecutor, appoints another

CAIRO (Reuters) - Egyptian President Mohamed Mursi on Thursday sacked Abdel Maguid Mahmoud, the general prosecutor, to try to appease protesters demanding the retrial of officials they say were involved in orchestrating violence against them during last year's uprising.

Mursi tried to remove Abdel Maguid Mahmoud in October to calm protesters furious about the acquittal of a number of senior state officials who had stood trial over the issue but was forced to keep him in place after judges protested.

Talat Abdullah was appointed the new general prosecutor. "The public prosecutor general will occupy his post for a period of four years," said Yasser Ali, a presidential spokesman.

"The public general prosecutor is to be appointed from among members of the judiciary authority by the president for a period of four years," said Yasser Ali in a statement aired live on state TV.

Ali said the new decree applies immediately, thereby forcing the current prosecutor from his post. Mahmoud had been public prosecutor for many years.

(Writing by Marwa Awad; Editing by Andrew Osborn and Jon Hemming)

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Poland's ruling party seeks charges against opposition leader

WARSAW (Reuters) - The party of Poland's Prime Minister Donald Tusk said on Thursday it would vote to have the country's main opposition leader tried at a special tribunal on charges of leading a witch hunt against rivals while his party was in power.

The move marks a new low in relations between Tusk, the leader of the Civic Platform party, and Jaroslaw Kaczynski, the head of the Law and Justice Party, who are engaged in an angry war of words.

The allegations - denied by Kaczynski - were made several years ago, but until now Tusk's party was reluctant to back a vote in parliament required to bring Kaczynski, and his former justice minister, before the tribunal.

"Our intention is mainly to protect the state against the abuse of the constitution by those in power in Poland," said Rafal Grupinski, the Civic Platform's parliamentary leader.

The abuse-of-office charges would be heard by the State Tribunal, a special political court. The tribunal could strip Kaczynski and former minister Zbigniew Ziobro of their parliamentary mandates.

Charges can be initiated in the tribunal if three-fifths of the lower house of parliament vote in support. No date has been set for a parliamentary vote. Tusk's party and two leftist-opposition parties have said they would vote for the charges, leaving them two votes short of the required threshold.

The charges stem from the suicide of leftist politician Barbara Blida in April 2007. When police arrived at her home to arrest her as part of a corruption investigation, she went into the bathroom and shot herself in the heart.

Blida's supporters said she was a victim of a politically-motivated campaign by Kaczynski's party to sideline its opponents. Kaczynski and Ziobro say the investigation into Blida was part of a legitimate effort to root out high-level graft.

Some Civic Platform leaders feared backing charges in the tribunal would exacerbate already difficult relations with Kaczynski, and could be interpreted by some as the government cracking down on dissent.

But in a sign the Civic Platform was taking a harder line against Law and Justice, Tusk accused Kaczynski on Thursday of creating an atmosphere of intolerance and hatred.

Kaczynski angered Tusk when last month he suggested the prime minister was in some way behind a plane crash in Russia in 2010 which killed Kaczynski's twin brother, Lech, and dozens of other officials.

An official investigation blamed the crash on a combination of bad weather and misjudgments by the crew and ground control.

Tusk said this sort of accusation was driving some people to take extreme actions. He has cited the example of a 45-year-old radical nationalist arrested on suspicion of plotting to blow up parliament.

"If somebody thinks of himself as a patriot and believes Kaczynski, that Poland is ruled by killers, then I'm not surprised that some react in this way," Tusk said.

"It's not like everybody can just use words that won't leave a mark in people's minds and hearts," he said.

(Reporting by Chris Borowski; Editing by Rosalind Russell)

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Syria rebels capture army base in eastern oil region

AMMAN (Reuters) - Syrian rebels captured an army base in an eastern oil province on Thursday, further weakening President Bashar al-Assad's control in the strategic region bordering Iraq.

The capture of the artillery base on the outskirts of Mayadeen, a town on the Euphrates river near some of Syria's main oilfields, followed rebel takeovers of military installations in the north and centre of the country this week.

Recent rebel momentum shows the increasing potency of the mainly Sunni Muslim fighters trying to topple Assad, who belongs to the Alawite minority linked to Shi'ite Islam. But insurgents have often had to retreat quickly after making advances to avoid strikes by the president's air force.

"The Mayadeen military base fell at 8.30 a.m. (0630 GMT)," Abu Laila, an official in the Military Revolutionary Council in the province, told Reuters. He said 44 rebel fighters had been killed in the operation to capture the base.

"The whole countryside, from the Iraqi border and along the Euphrates to the city of Deir al-Zor, is now under rebel control," he said.

Another opposition source in contact with rebels confirmed the base, 42 km (26 miles) south-east of Deir al-Zor, had fallen.

Video posted online showed rebels on motorcycles and trucks apparently inside the base waving victory signs as smoke rose from two buildings. Artillery pieces could be seen on the ground and a tank transporter stood abandoned.

Severe restrictions on non-state media make it impossible to verify opposition reports independently.

Activists say 38,000 people have been killed in the 20-month uprising which threatens to draw in regional Sunni and Shi'ite Muslim powers. Hundreds of thousands have fled the country and 2.5 million are displaced, aid groups say.

Western states, anxious to avoid another costly Middle East conflict and wary of backing rebels who include Islamist militants, have stayed on the sidelines, although France and Britain formally recognized a newly formed opposition coalition as the sole representative of the Syrians this month.

Russia, which along with China has blocked three resolutions which could have led to U.N. sanctions against Assad, criticized on Thursday proposals for NATO to deploy Patriot missiles in Turkey near the Syrian border.

"This would not foster stability in the region," Foreign Ministry spokesman Alexander Lukashevich said.

REBEL GAINS

The capture of the Mayadeen base leaves Assad in control of just three major army bases in Deir al-Zor province, said Sheikh Nawaf al-Bashir, a local tribal leader. He said rebels now held the main road to Iraq, from the outskirts of Deir al-Zor city to the border crossing of Albu Kamal.

The rebel move follows the capture last week of a military airport on the Iraqi border southeast of Mayadeen. In the last five days rebels have also stormed a special forces base near Aleppo, Syria's commercial hub, and an air defense position in the southern suburbs of Damascus.

In another setback for Assad, his forces pulled back on Thursday from three positions south of the town of Maarat al-Numan, on the highway linking Damascus to Aleppo, according to the opposition Syrian Observatory for Human Rights.

The area has seen heavy fighting between rebel forces, which have held the town for several weeks, and soldiers camped in a nearby military base, just 500 meters from the highway.

Near Damascus, opposition campaigners said fighting continued around the south-western suburb of Daraya and the army kept up heavy bombardment of the town, where Free Syrian Army fighters appeared to be entrenched.

To the east, clashes were also reported in the Damascus neighborhood of Jobar, which is adjacent to the main Abbasid Square. A mother, her daughter and her sister's husband were killed in shelling aimed at pushing back rebels, activists said.

Rebels in the south Damascus district of Hajar al-Aswad showed video of a captured air defense officer they identified as Colonel Bashir al-Saleh, flanked by two masked rebels carrying AK47s.

So far Assad's core military units, composed mainly of members of his Alawite minority sect, have prevented a sustained rebel push into the heart of the capital itself. The rebels have yet to hold a major Syrian city.

But activists say the rebels are gaining strength in Damascus, partly because they are being joined by fighters from outlying regions. While Assad's forces control main road junctions there have been guerrilla attacks in the last few days near Damascus Airport and rebels have expanded control of the mixed urban and farmland regions around the capital.

The Observatory said army shells struck a building next to Aleppo's Dar al-Shifaa hospital on Wednesday, one of the main rebel medical centers, killing 15 people. Most of the dead were fighters but a doctor and three children also died, it said.

(Writing by Dominic Evans; Editing by Andrew Heavens and Robin Pomeroy)

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New Ivory Coast prime minister takes finance post too

ABIDJAN (Reuters) - Ivory Coast announced a new government on Thursday in which newly appointed Prime Minister Daniel Kablan Duncan will also take the finance and economy portfolio.

Ivory Coast, which is recovering from a 2011 civil war, holds a defaulted $2.3 billion bond and recently came to an agreement with investors on rescheduling missed coupon payments over the next two years.

President Alassane Ouattara named Duncan, a member of his allied PDCI party and foreign minister in the previous cabinet, as prime minister on Wednesday, after dissolving his government last week over a lack of coalition solidarity.

Charles Koffi Diby, the former finance minister who has been the lead figure in Ivory Coast's efforts to renegotiate its bond, will take over the foreign ministry, a statement from the president's office said.

Niale Kaba, an economist who served as minister of housing promotion in the previous cabinet, will serve as minister delegated to the prime minister responsible for the economy and finance.

Many people in Ivory Coast had predicted sweeping changes to the cabinet after the surprise dismissal of the ministers last week. Though the number of cabinet positions was slashed to 28 from 39 in the reshuffle, other changes were minor.

There were no changes at the defense or agriculture ministries in the West African state, which is the world's largest cocoa grower and also a significant coffee producer.

Duncan's nomination ensures Ouattara is sticking to a deal that saw the PDCI throw its weight behind him during a 2010 election run-off in return for the prime minister's job.

Duncan, an economist, has served as prime minister once before under former president Henri Konan Bedie and was economy and finance minister under Ouattara's premiership in the early 1990s.

"Overall I think there's no earthquake. What's interesting is that Daniel Kablan Duncan is the new prime minister and will also assume the economy and finance portfolios," Samir Gadio, emerging markets analyst with Standard Bank, said.

"One could even argue that the reform-minded duo who attempted to stabilize the faltering Ivorian economy in the early 1990s has been reassembled," he said.

(Reporting by Loucoumane Coulibaly; Writing by Joe Bavier; Editing by Michael Roddy)

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