Mr Obama says he wants America to re-engage with the Middle East

US President Barack Obama is heading to the Middle East on a visit aimed at increasing US engagement with the Islamic world.

Mr Obama travels first to Saudi Arabia and then to Egypt, where he will make a keynote speech on ties with the region.

He says he wants to open dialogue with Muslims and overcome misapprehensions on both sides. He also wants to revive Middle East peace negotiations.

It is his first Middle East visit since taking office.

Barack Obama's goal is to improve perceptions of the US and to push for a peace deal between Israel and the Palestinians, says BBC Diplomatic Correspondent Jonathan Marcus.

In the process he wants to make other US strategic goals in the region - like stability in Iraq and the containment of Iran - easier to achieve.

OBAMA'S TOUR 3 June: Saudi Arabia - talks with King Abdullah on Israel-Palestinian peace negotiations 4 June: Egypt - talks with President Hosni Mubarak, keynote speech at Cairo university 5 June: Germany - meets Chancellor Angela Merkel, visits to Dresden and to Buchenwald concentration camp 6 June: France - meets President Nicolas Sarkozy, attends D-Day events in Normandy

To do this he needs Arab partners and this trip takes in two key nations - Saudi Arabia and Egypt.

The Saudis are sponsors of the only comprehensive peace plan for relations between the Arab world and Israel.

Egypt is intimately involved with the Palestinian problem, acting as an intermediary between Israel and Hamas in the Gaza Strip.

Mr Obama needs both countries on board if he is to breathe life into the largely moribund peace negotiations, our correspondent says.

'Action not words'

In Saudi Arabia, Mr Obama will hold talks with King Abdullah in Riyadh. As well as regional issues, Mr Obama said he would raise the issue of oil prices with the Saudi ruler.

Saudi Arabia is gearing up for the visit by the US leader

On Thursday, he is to deliver a speech at Cairo University which he hopes will set a new tone in US-Arab relations.

After Cairo, Mr Obama will travel on to Europe for D-Day commemorations.

The tour itinerary does not include Israel but shortly before departing for Saudi Arabia, Mr Obama had a meeting with Israel's defence minister, Ehud Barak, in Washington.

The president is reported to have used the meeting to reiterate that the US intends to be tough with Israel on the question of settlement building in the West Bank.

Israel is resisting calls to freeze building activity in all settlements, but Palestinian leaders have said there can be no progress towards peace without a halt to such construction.

Speaking to the BBC ahead of his visit, Mr Obama said he believed the US was "going to be able to get serious negotiations back on track" between Israel and the Palestinians.

He said his visit offered the US and the Islamic world the chance "to listen to each other a little bit more".

But there were no silver bullets, he warned.

"There are very real policy issues that have to be worked through that are difficult. Ultimately, it's going to be action and not words that determine the path, the progress from here on out," he said.

On the eve of his visit, the deputy leader of al-Qaeda urged Muslims to ignore the new tone from Washington.

In an audio message posted on a website, Ayman al-Zawahiri said Mr Obama's "bloody messages" - in Iraq and Afghanistan - would not be concealed by "polished words".

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The military trials for Guantanamo detainees have been much criticised

US President Barack Obama is expected to announce on Friday that he is reviving military trials for some of the detainees at Guantanamo Bay.

But legal rights for defendants facing the military commissions will be significantly improved, officials said.

President Obama halted the trials as one of his first acts on taking office in January, saying the US was entering a new era of respecting human rights.

The decision to revive the military trials has angered civil rights groups.

There are currently 241 detainees still at the US base in Guantanamo Bay, Cuba.

President Obama has pledged to close the camp by January 2010.

'Disappointing'

Administration officials told journalists that President Obama would announce plans to restart the military commissions - but with improved rights for detainees.

They are reported to include restrictions on hearsay evidence; a ban on evidence obtained by cruel treatment; giving detainees more leeway to choose their own lawyers; and protecting detainees who refuse to testify.

Q&A: Closing Guantanamo 'Struggle' over Guantanamo

President Obama is expected to ask for a further four-month delay for the trials so that the new procedures can be implemented.

Some rights groups reacted with dismay to the news. They campaigned throughout the Bush administration for the military trials to be scrapped.

"It's disappointing that Obama is seeking to revive rather than end this failed experiment," said Jonathan Hafetz of the American Civil Liberties Union.

"There's no detainee at Guantanamo who cannot be tried and shouldn't be tried in the regular federal courts system."

President Obama himself had criticised the military commission system during his election campaign, describing it as "an enormous failure".

But, his aides pointed out on Thursday, the president never rejected the possibility of using military commissions altogether if they could be made fairer.

They highlighted legislation he supported as a senator in 2006 which was intended to do just that.

The BBC's Adam Brookes in Washington says the president may have decided that trying detainees such as Khalid Sheikh Mohammed - the man who allegedly planned 9/11 - in a civilian court in the US would be simply too complex and too difficult.

It is thought that only around 20 of the current detainees are likely to be tried through the revived military commissions, our correspondent says.

The remaining Guantanamo detainees are expected to either be released, transferred to other countries or tried by civilian prosecutors in US federal courts.

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John Kerry visits the destroyed American International School in northern Gaza

The Palestinian group Hamas has sent a letter addressed to the US president via a US politician visiting Gaza, a senior UN official has said.

UN relief agency chief Karen Abu Zayd told the BBC the letter had been received by the UN and passed on.

She did not say if Senator John Kerry had accepted it, and there were no details about the letter's contents.

The US views Hamas, which seized control of Gaza in 2007, as a terrorist organisation and will not deal with it.

A former presidential candidate, Mr Kerry was visiting Gaza with US congressmen Brian Baird and Keith Ellison in the first such visit to the Hamas-run Strip since 2007.

The men are not likely to meet Hamas.

FROM THE BBC WORLD SERVICE More from BBC World Service

Correspondents say their visit appears to be more humanitarian than political.

As the head of the Senate Foreign Committee, Mr Kerry is a senior Democrat, but all three men are visiting Gaza in their capacity as lawmakers, not representatives of the administration of President Barack Obama.

A spokeswoman for the US consulate said it was thought to be the first visit by US congressmen for at least four years.

Mr Kerry also visited the Israeli town of Sderot, a target of Palestinian rocket attacks, before entering Gaza.

Standing in front of a pile of used rockets, Mr Kerry said that both he and President Obama believed that nobody should have to spend their lives in fear of attack.

John Kerry in Gaza and Israel

"I know that our president, President Obama, whom I support strongly, stood right here," he said, referring to a visit before the 2008 US election.

"He was right here in front of these rockets. He came to Sderot as I have because we feel very deeply that no-one should live under this kind of threat, no children should be raised in that kind of fear.

"We are sympathetic with the crisis that people face on a daily basis here in Israel, from those who choose no other path other than to use instruments of terror."

Earlier he said: "[The visit] does not indicate any shift whatsoever with respect to Hamas... what it indicates is our effort to listen and to learn."

Hamas won elections in 2006 and consolidated control by force in 2007.

Like Israel, the EU and the UN, the US government officials refuse to deal with the militant group.

In addition, there have been security concerns since Palestinian militants blew up an American diplomatic convoy in October 2003, killing three people.

Mr Ellison, from Minnesota, was the first Muslim elected to the US Congress, while Mr Baird, a clinical psychologist, is from Washington.

Rockets fired

Their visit came as violent incidents tested the unilateral ceasefires Israel and Hamas have both declared, amid Egyptian-brokered attempts to reach a firmer truce deal.

Many Gazans have been made homeless by the fighting

The Israeli military confirmed it was carrying out airstrikes in the Gaza Strip, but gave no further details.

This followed the launching of two rockets from Gaza into Israel on Thursday morning, after two mortars were fired the previous night.

The Israeli military said its forces had also crossed into Gaza and shot and lightly injured a Palestinian near the border fence, after the man's behaviour raised suspicions he was attempting to plant a bomb.

About 1,300 Palestinians and 13 Israelis died during Israel's three-week operation in January, which was aimed at halting Palestinian rocket fire into Israel.

Since Israel withdrew its forces from Gaza, sporadic rocket and mortar fire has continued, while Israel has carried out several airstrikes against smuggling tunnels in the south of Gaza, and what it says are militant facilities elsewhere in the territory.

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Former Senator Tom Daschle has withdrawn his nomination as US health and human services secretary after a controversy involving unpaid taxes.

US President Barack Obama said he had accepted his nominee's withdrawal "with sadness and regret".

Mr Obama later acknowledged in a TV interview that he had "made a mistake" in his handling of the case.

It was revealed last week that Mr Daschle, an early Obama backer, had failed to pay some $130,000 in taxes.

His move came only hours after Nancy Killefer, nominated as budget watchdog, also withdrew over tax issues.

The two high-profile withdrawals were the latest setbacks for Mr Obama as he seeks to form his new administration.

Ms Killefer said she did not want a personal tax issue - reportedly concerning household help - to distract from and delay Mr Obama's plans.

Tom Daschle says he notified officials when he realised he had made a mistake.

Her appointment to the newly-created post of chief performance officer was intended to help cut wasteful government spending.

Announcing his withdrawal, Mr Daschle, the former Senate Democratic leader, said he would have not been able to operate "with the full faith of Congress and the American people".

He also said he did not want to "be a distraction" from Mr Obama's agenda.

In a statement, Mr Obama said: "Tom has made a mistake, which he has openly acknowledged. He has not excused it, nor do I."

The president went on: "Now we must move forward with our plan to lift this economy and put people back to work."

'Setting an example'

In an interview with NBC Mr Obama said he regretted the way he had handled the case.

"I've got to own up to my mistake which is that ultimately it's important for this administration to send a message that there aren't two sets of rules," he said, according to a transcript.

"You know, one for prominent people and one for ordinary folks who have to pay their taxes."

White House press secretary Robert Gibbs said both nominees had come to the decision to withdraw on their own.

"They both recognised that you can't set an example of responsibility but accept a different standard of who serves," Mr Gibbs said.

Massachusetts Senator John Kerry said Mr Daschle's withdrawal was a great loss to the cause of health care reform.

"When the smoke clears and the frenzy has ended, no-one will believe that this unwitting mistake should have erased 30 years of selfless public service and remarkable skill and legislative expertise on health care," he said.

Mr Daschle paid about $128,000 in back taxes and $12,000 in interest last month.

Appearing before the Senate Finance Committee on Monday, he apologised for what he said had been a mistake. The tax issue stemmed from the use of a car and driver provided to him by a friend and consulting client.

The BBC's James Coomarasamy in Washington says Mr Obama has been facing growing criticism over the contradiction between his pledge to create a new, ethical administration and the problems of his nominees.

US Treasury Secretary Timothy Geithner was confirmed last week only after long arguments over his failure to pay $34,000 (£24,500) in taxes he owed until shortly before he was nominated.

In January, New Mexico Governor Bill Richardson announced he was withdrawing from consideration as commerce secretary after an investigation was launched into a state contract that had been given to his campaign donors.

Republican Senator Judd Gregg was on Tuesday appointed instead, the second from his party to join Mr Obama's cabinet.

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US President Barack Obama has warned that more US banks are likely to fail, as the full extent of their losses in the economic crisis becomes clear.

Speaking to NBC News, Mr Obama said "some banks won't make it" but stressed that people's deposits would be safe.

He has asked Treasury Secretary Timothy Geithner to draw up guidelines for banks receiving taxpayers' money.

Meanwhile, he warned of a "difficult next few days" as the Senate begins to debate his $800bn (£567bn) rescue plan.

Taking responsibility

In an interview with NBC, Mr Obama said it was likely the banks had not yet fully acknowledged the extent of their losses.

"The banks, because of mismanagement, because of huge risk-taking, are now in a very vulnerable position," he said.

"We can expect that we're going to have to do more to shore up the financial system."

What we can't do is let very modest differences get in the way of the overall package moving forward quickly President Barack Obama

The president, who has been critical of bank executives receiving bonuses despite taking government bail-outs, also announced there would be new rules for such banks.

"If a bank or a financial institution is getting relief then they've got to abide by certain conditions," he said.

The president made it clear he was taking responsibility for turning round the US economy before the next presidential election in 2012, saying he could expect only one term in office if it was not fixed in the next three years.

The interview was short on details, with the president declining to comment on whether he planned to create a "bad bank" to buy toxic assets from other financial institutions.

He said he did not want to pre-empt an announcement planned for next week.

'Considerable unrest'

The president and Vice-President Joe Biden are due to meet congressional leaders later on Monday to encourage them to move forward on the $800bn economic stimulus package.

Mr Obama said he was confident that Republicans would be able to support the final version of the legislation, although it passed in the House of Representatives without a single Republican vote.

I think there is a bipartisan feeling that this is not the way to get the economy moving Mitch McConnell Republican Senate leader

He acknowledged that the two parties were not agreed on all aspects of the plan.

"But what we can't do is let very modest differences get in the way of the overall package moving forward quickly," he said.

It is unlikely that it will be able to pass the Senate without Republican support because the Democrats do not have the majority that they would need to vote down any potential delaying tactics.

As debating began in the Senate, leader of the Republicans in the chamber, Mitch McConnell, signalled his intention to oppose the bill - saying that even members of Mr Obama's own party were not happy with the proposals.

"There is considerable Democratic senatorial unrest about this package," he said.

"I think there is a bipartisan feeling that this is not the way to get the economy moving. And hopefully we'll see that exhibited on various amendments where we may have some bipartisan success in modifying the bill."

The Democrat leader in the Senate, Harry Reid, said he hoped the measures would be approved by the end of the week.

Gloomy figures

Mr Obama's comments came as fresh official data indicated the problems facing the wider US economy show no signs of lessening.

The Treasury Department announced it would need to borrow $493bn in the first three months of this year.

The figure is a record amount for the January-March period, but is smaller than the $569bn the government borrowed from October to December last year - which was the all-time high for any quarter.

US consumer spending fell for a sixth consecutive month in December, according to the Commerce Department.

Although the decline was expected, the 1% drop was worse than the 0.9% contraction predicted by analysts.

Meanwhile, construction spending fell for a third month in a row in December, dropping 1.4%.

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Rod Blagojevich has been ousted as Illinois governor after being convicted of abusing his powers.

Mr Blagojevich said he was "saddened and disappointed" by the verdict but "not at all surprised" and would fight to clear his name.

He was charged with trying to sell the seat vacated by Barack Obama when he was elected president.

In a second vote, Mr Blagojevich was banned from holding public office in Illinois for life.

He had been arrested in December and faces a criminal trial over bribes allegedly taken during his two terms.

No other Illinois governor has been impeached, let alone convicted in a Senate trial.

Mr Blagojevich has now been replaced as governor by Patrick Quinn, a fellow Democrat and the state's lieutenant governor.

Senators voted 59-0 against him after an impeachment hearing, despite his claim that he had "done nothing wrong" and there was no evidence of a crime.

After being sworn in, Mr Quinn told the senate "the ordeal is over".

He said the elected representatives had "reflected the will of the people".

"Now it's our job to call upon the people of Illinois to make the sacrifices necessary to address the serious challenges we have before us," Mr Quinn said.


'No evidence'

Speaking outside his home after the senate hearing, Mr Blagojevich said he "obviously saddened and disappointed, but not at all surprised by what the state senate did today".

He told reporters he was grateful for having had the opportunity to "get up every day to fight for average, ordinary people".

"I love the people of Illinois today more than I ever have before," he said, to which a person in the crowd shouted back: "We love you too!"

Mr Blagojevich had addressed his trial on Thursday in a last-minute bid to save his position, having earlier said he would not take any part.

He told senators: "There is no evidence that shows there was any wrongdoing by me as governor."

He expressed annoyance that he was not able to bring his own witnesses.

He said President Barack Obama's chief-of-staff Rahm Emanuel was one witness he would have liked to question, but rules prevented him from doing so.

He appealed to senators, at the end of the four-day trial, to consider his position, saying: "Think if you were innocent and rushed out of office.

"A crime has not been proven. How can you throw a governor out of office with incomplete evidence?"

But his speech appeared to have little effect on the senators.

"I sort of looked at him as a magician and we've all been wowed. But all the magic is gone," one senator told the Chicago Tribune.

"I am immune to his speech giving, because we've seen those tricks before. He can look sincere, he gives a good speech and he's a good performer. Perhaps he can get a job in the arts," she said.


FBI evidence

Since Mr Blagojevich was arrested last month, he has persistently denied the charges against him and has refused to resign.

There is no trial date set in the criminal case.

"If I thought I had done something wrong I would have resigned in December," he told senators.

"I didn't resign then and I'm not resigning now because I have done nothing wrong."

He says he is the victim of a political vendetta.

Impeachment prosecutor David Ellis, in his rebuttal, emphasised that Mr Blagojevich had refused to appear under oath to answer questions, opting instead to make a closing speech.

In his closing remarks, Mr Ellis said: "The evidence showed that throughout his tenure as governor, the governor has abused the power of his office and put his own interest above the interest of the people."

The impeachment followed an investigation by a 21-member committee of Illinois legislators, which looked at testimony from FBI agents who wiretapped phone calls to and from the governor's office about who should fill President Obama's seat.

It is alleged the conversations show that Mr Blagojevich was trying to use the seat to get himself or his wife a job.

Mr Blagojevich is the first US governor to be impeached in more than 20 years, after Arizona's Governor Evan Mecham was removed from office in 1988.

Four of Illinois' past eight governors have faced criminal charges and Mr Blagojevich's predecessor, George Ryan, is currently serving a jail sentence for corruption.

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A military judge at the Guanatanamo Bay detention facility has rejected a request by US President Barack Obama to suspend the trial of a detainee.

Correspondents say this could be a setback to Mr Obama's plans to close the facility.

Abd al-Rahim al-Nashiri, a Saudi citizen, is accused of planning the USS Cole attack of October 2000.

The White House said it was consulting the Pentagon and justice department about its possible options.

Judge James Pohl said the request to halt the trial to allow a review by the new administration was "unpersuasive".

The trial of Mr Nashiri will go ahead, he ruled In one of its first actions, the Obama administration instructed prosecutors to ask for the trials of 21 detainees who had been charged to be delayed by 120 days.

In some cases, the request was quickly granted.

The attack on the USS Cole while it was moored off Yemen left 17 US service personnel dead and 50 injured.

Mr Nashiri was arrested in the United Arab Emirates in 2002 and eventually transferred to Guantanamo.

He allegedly conspired to help two Islamic militants who steered an explosives-laden barge alongside the ship.

Trials halted

The new administration will now have to decide how to proceed, correspondents say.

Mr Obama ordered the review of military trials for terrorism suspects last week. He also ordered the closure, within one year, of the Guantanamo detention centre.

He said the US would continue to fight terrorism but would maintain its "values and ideals" as well.

Some 250 inmates accused of having links to terrorism remain in the facility.

The legal process for these prisoners has been widely criticised because the US military acts as jailer, judge and jury.

A judge has already suspended for 120 days the trial of five men accused over the 9/11 attacks.

These include alleged mastermind Khalid Sheikh Mohammed, who opposed the suspension, saying he wanted to confess to his role in the attacks.

"I believe that all the other trials were stayed, which I think continues to give us what we need to evaluate who is at Gitmo [Guantanamo] and make the decisions commensurate with the executive order that the president signed," White House spokesman Robert Gibbs said after Thursday's ruling.

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President Barack Obama says that multi-billion dollar bonuses taken by Wall Street bankers are "shameful" while taxpayers bail out their industry.

The president said their actions "were the height of irresponsibility".

He said his administration would tell bankers they needed to show some discipline and restraint.

Mr Obama was responding to reports that employees at financial companies in New York collected an estimated $18.4bn (£12.9bn) in bonuses last year.

"It is shameful, and part of what we are going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility," he added.

"The American people understand that we have got a big hole we have got to dig ourselves out of but they don't like the idea that people are digging a bigger hole."

Earlier this week, US bank Citigroup cancelled an order for a new corporate jet after President Obama questioned the wisdom of the purchase.

The White House asked whether buying the jet was the "best use of money at this point" for a bank that took $45bn (£31.6bn) of public money last autumn.

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Republican ex-secretary of state calls Democrat ‘transformational figure’

WASHINGTON - Former Secretary of State Colin Powell endorsed Sen. Barack Obama, D-Ill., for president on Sunday, criticizing his own Republican Party for what he called its narrow focus on irrelevant personal attacks over a serious approach to challenges he called unprecedented.

Powell, who for many years was considered the most likely candidate to become the first African-American president, said in an interview on NBC’s “Meet the Press” that he was not supporting Obama because of his race. He said he had watched both Obama and his Republican opponent, Sen. John McCain of Arizona, for many months and thought “either one of them would be a good president.”

But he said McCain’s choices in the last few weeks — especially his selection of Gov. Sarah Palin of Alaska as his vice presidential running mate — had raised questions in his mind about McCain’s judgment.

“I don’t believe [Palin] is ready to be president of the United States,” Powell said flatly. By contrast, Obama’s running mate, Sen. Joe Biden of Delaware, “is ready to be president on day one.”

Powell also told NBC’s Tom Brokaw that he was “troubled” by Republicans’ personal attacks on Obama, especially false intimations that Obama was Muslim and the recent focus on Obama’s alleged connections to William Ayers, a co-founder of the radical ’60 Weather Underground.

Stressing that Obama was a lifelong Christian, Powell denounced Republican tactics that he said were insulting not only to to Obama but also to Muslims.

“The really right answer is what if he is?” Powell said, praising the contributions of millions of Muslim citizens to American society.

“I look at these kind of approaches to the campaign, and they trouble me,” Powell said. “Over the last seven weeks, the approach of the Republican Party has become narrower and narrower.”

In an interview Sunday on Fox News, McCain said he was not surprised by the announcement.

“I’ve always admired and respected General Powell,” said McCain, who cited the endorsements he had received from former Secretaries of State Henry Kissinger, Alexander Haig, James Baker and Lawrence Eagleburger. “We have a respectful disagreement.”


Bolstering Obama’s international credentials

Obama said in an interview airing Monday on NBC’s TODAY that he welcomed Powell’s support and looked forward to discussing what role, if any, Powell might have in an Obama administration should he be elected.

“Here is what I can say for certain: He will have a role as one of my advisers. He has already served in that function even before he endorsed me,” Obama told NBC’s Matt Lauer. “Whether he wants to take a formal role — whether there’s something that’s a good fit for him — I think is something that he and I would have to discuss.”

Powell, a retired Army general who was chairman of the Joint Chiefs of Staff under the first President Bush before becoming secretary of state in the current administration, is one of the most highly decorated military officers of modern times and an admired figure in both parties. The Obama campaign is likely to cite the endorsement as an answer to critics and undecided voters who have questioned the foreign policy credentials of Obama, a first-term senator whose national experience amounts to four years in the Senate.

Powell said a major part of his decision to turn his back on his own party was his conclusion that Obama was the better option to repair frayed U.S. relations with allies overseas.

“This is the time for outreach,” Powell said, saying the next president would have to “reach out and show the world there is a new administration that is willing to reach out.”

In particular, he said, he welcomed Obama’s president to “talk to people we haven’t talked to,” a reference to Obama’s controversial statement that he would be open to direct diplomacy with Iranian leaders.

“I think that [Obama] has a definite way of doing business that will serve us well,” Powell said.

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