White House Seeks to Lower Iraq Report Expectations

July 9 (Bloomberg) -- Bush administration officials sought to lower expectations for a report this month on the Iraq war, saying it was unrealistic to expect the study would show significant progress in meeting military and political goals. The report, which must be submitted to Congress by July 15, is just an interim assessment delivered at an early stage of the new U.S. military drive to quell sectarian and insurgent violence, said White House Press Secretary Tony Snow and Defense Department spokesman Bryan Whitman. ``You are not going to expect all the benchmarks to be met at the beginning of something,'' Snow said. Whitman called the report ``a snapshot that's very much at the front end'' of the U.S. offensive. The report will be delivered as Congress debates several measures to limit U.S. military operations in Iraq and amid reports that administration officials are debating a possible change of course. Defense Secretary Robert Gates yesterday canceled a trip to Latin America so he could remain in Washington for meetings on Iraq. Whitman said today that Gates participated in one strategy session this morning and would be involved in others during the week.

The New York Times reported today that the administration is discussing whether President George W. Bush should announce an intention to gradually withdraw troops from high-casualty areas in order to stop more Republican lawmakers from turning against the war.

`Way Ahead'

Snow said the Times story ``got way ahead of the facts.'' He said there was no debate within the administration ``on withdrawing forces right now from Iraq.'' In a later briefing, Snow told reporters, ``There is no intensifying discussion about reducing troops.'' Still, Pentagon spokesman Whitman didn't dispute that the administration meetings on Iraq this week had grown in importance, leading to Gates's decision to stay home.``It was a realization that this week it was going to be important for the secretary to be a part of these policy meetings that were going to be taking place,'' Whitman said. Bush must report to Congress by July 15 on the Iraqi government's progress in meeting a host of benchmarks. They include revising the constitution to encourage political participation by Sunnis, relaxing legal restrictions on members of Saddam Hussein's Baath Party, guaranteeing all major ethnic and religious groups a share of oil revenue and holding new local elections. On the military front, the report is supposed to measure progress the Iraqi government has made in providing security forces and neighborhood outposts in Baghdad to support the U.S. military offensive.

Iraq Platform

The Senate this week is taking up a $648.8 billion defense policy measure that will be a platform for many amendments to force a change in Iraq policy. Majority Leader Harry Reid, a Nevada Democrat, said the Senate may vote as soon as tomorrow on an amendment offered by Senator Jim Webb, a Virginia Democrat, that would require all troops to get longer breaks between deployments.Another amendment will be offered by Michigan Democrat Carl Levin, the chairman of the Senate Armed Services Committee. It would set a goal of withdrawing most American combat troops by March 31 of next year.

Study Group

Colorado Democrat Ken Salazar is seeking support for a plan to adopt the recommendations of the bipartisan Iraq Study Commission, which proposed setting the conditions for withdrawing most U.S. combat troops by March 31, 2008. A limited number of troops would stay behind to train Iraqis and conduct counterterrorism offensives. U.S. military deaths in the Iraq conflict have climbed to almost 3,600 as rebels continue to target American forces with roadside bombs, gunfire and other forms of attack. May was the third bloodiest month of the war for the U.S., with 120 combat deaths. The tide of Republican defections from Bush's camp grew during the July 4 recess, putting pressure on Bush for a new strategy. Senator Pete Domenici of New Mexico joined Senators Richard Lugar of Indiana and George Voinovich of Ohio in calling for a new tack in Iraq. ``The Iraqis are not stepping up to the plate, and it's been our American troops that are bearing the brunt of the burden,'' Senator Susan Collins, Republican of Maine, said today on Cable News Network. The White House has urged congressional Republicans to maintain solidarity on Iraq, at least until September, to give the U.S. offensive a chance to work.

Hold Off

The administration has appealed for lawmakers to hold off until a mid-September progress report by Army General David Petraeus, the U.S. commander in Iraq, and Ryan Crocker, the U.S. ambassador to the country. Reid today said today that the votes on Iraq will make clear where senators stand. ``I think we will find in the next couple of weeks whether the Republicans who have said publicly they think the present course should change are willing to vote with us,'' he said.

Economy in Gaza edges toward crisis

By Steven Erlanger and Isabel Kershner (International Herald Tribune)

JERUSALEM: In the month since Hamas took over Gaza, routing Fatah forces there, the economy of the territory is slipping again toward crisis. With the main commercial crossing into Israel closed since June 12, only essential items of food and medicine are entering Gaza, and what is left of the commercial sector is shutting down.

On Monday, the UN agency responsible for caring for the nearly 70 percent of Gazans who are refugees or their descendants announced that it had halted all its building projects in the territory because it had run out of basic construction supplies, like cement.

The halt, to about $93 million of projects employing 121,000 people, includes new schools, water works, health centers and sewage-treatment plants, a major issue in Gaza, where the old temporary sewage reservoirs have already once broken their banks, said the agency, the United Nations Relief and Works Agency, or Unrwa.

Agency officials say they are rapidly running down their reserves of food and other supplies.

Regular Gaza factories and businesses, already hit hard by intra-Palestinian violence, are running out of materials they need to operate - and to provide jobs. A report last week by Gisha, an Israeli advocacy group, said that up to 75 percent of the 3,900 factories operating in Gaza on the eve of the closure of the Karni crossing have had to cease production, according to the Palestinian Federation of Industry.

Unable to import raw materials or export finished products, the factory closures are forcing as many as 30,000 more families to rely on aid to survive.

Ali al-Hayak, director of the Palestinian Federation of Industry, said that "Israel is not punishing the government; instead it is punishing the people."

At the heart of the issue is Hamas, the militant Islamic group classified as a terrorist organization by Israel, the United States and the European Union. They do not want to work with Hamas or see Hamas succeed in Gaza, and they are not in any hurry to reopen the Karni crossing to anything but emergency supplies.

That is also true of the Fatah leadership in Ramallah, where the Palestinian president, Mahmoud Abbas, whose Presidential Guards used to control the Karni checkpoint, is not eager to ease Hamas's problems.

It appears to some Israeli officials and Western diplomats that Fatah is continuing its efforts to squeeze Hamas by keeping Karni shut - just as Egypt has agreed with Israel to keep the Rafah crossing closed to limit the movement of individuals and money in and out of Gaza.

Some think that Abbas would rather see Karni stay shut for now.

"That is my understanding," said Representative Steven Israel, Democrat of New York, who recently spent time with Palestinian leaders in Ramallah, including the new prime minister, Salam Fayyad, and with Israeli leaders like Defense Minister Ehud Barak. He quoted one senior Israeli official who told him, "Let's see how Hamas feeds its children now."

So the anti-Hamas camp is grappling with a problem: opening Karni and Rafah, which could help revive the expiring economy of Gaza, could also help to strengthen Hamas and its chances of succeeding in Gaza.

All say they do not want ordinary Gazans to be punished for their leaders, but only Hamas seems eager to reopen Karni. Israel says it will work with the Palestinians once they organize themselves and come up with an internal solution. But there are those both in Israel and in Fatah who prefer to see Hamas try to cope with the pressures of its victory without helping a group that sees itself at war with both of them.

At the height of the fighting, Israel closed down Karni, the main cargo crossing on the Gaza-Israel border and the only one equipped for commercial imports and exports. The Palestinian Authority's Presidential Guards, who had previously secured the Palestinian side of the crossing and who are loyal to Hamas's rival, Fatah, fled their posts.

With them vanished the Israeli-Palestinian agreements for running the crossing, which had been designed to address Israel's deep-seated security concerns.

"We woke up one morning and found Hamas gunmen in ski masks on the other side," said Mark Regev, a spokesman for the Israeli Foreign Ministry.

Abbas has ordered his forces in Gaza, including the police, to stay at home, and what's left of Gaza's tiny industrial base is on the verge of collapse. Of the 1.5 million Palestinians who live in the impoverished Gaza enclave, 1.1 million already rely on food handouts, according to international aid officials, and they are concerned that the numbers will grow.

"It was the dynamic of poverty that took us to where we are in the first place," said John Ging, director of operations of the United Nations Relief and Works Agency.

Both Ging and Regev say they are waiting for the Palestinians to come up with some kind of internal agreement on how to administer the Palestinian side of the crossings in a way that will meet Israeli security requirements.

"There has been no decision in Israel to keep the crossings closed on political grounds," Regev said.

Yet when it comes to Karni, there seems to be a general ambivalence and little sense of urgency in either Jerusalem or Ramallah, the administrative capital of the West Bank, where Abbas has appointed an emergency government with no Hamas ministers.

"We need to differentiate between punishing the people of Gaza and weakening Hamas," said Nimr Hamad, an Abbas political adviser. "We don't want the people to suffer."

But when it comes to practical solutions for reopening Karni, Hamad refers the problem back to Israel. "The moment Israel is ready to discuss the issue we will see what solutions are possible," he said.

In a statement on Monday about the crossings, Hamas said: "The leadership of the Palestinian Authority tries to take advantage of the people's suffering to achieve political goals."

There are people in Israel who oppose reopening Karni, according to Shlomo Dror, spokesman for the Coordinator of Activities in the Territories, the Israeli military agency that deals with Palestinian civil affairs. "We are now discussing what constitutes humanitarian assistance," he said. "Some people feel we should be allowing in water, electricity, and that's it."

As for the mood of the U.S. Congress, which had earlier been asked to provide millions to help the Presidential Guard with training and to rebuild the Palestinian side of Karni, Israel, the U.S. representative, said, "There is no appetite to fund Karni, no interest there."

Congress does support helping Abbas and Fayyad in the West Bank, Representative Israel said, adding, "Everyone agrees that Fayyad is our last, best hope."

The Israeli military moved quickly in conjunction with international aid organizations to allow the passage of medicines and staples into Gaza, mostly through smaller, secondary crossings like Sufa and Kerem Shalom, in order to stave off a looming crisis of hunger and public health.

A UN report covering the week of June 25 to July 1 found that the emergency imports into Gaza had met 70 percent of the minimum food needs of the population there.

But Ging warns that at current levels, the assistance is a stopgap solution.

Since Karni is the only crossing equipped to handle containers, the process of bringing in tons of products through smaller crossings, where everything has to be transferred from Israeli trucks to Palestinian trucks, is painstakingly slow and expensive.

So far, Ging's organization has been drawing on its large reserves in Gaza to supplement the aid. But in less than six weeks, he says, "the stocks will be running out and we will start getting into big trouble."

Google buys online security group for $625m (Financial Times)

Google on Monday beefed up its offerings to the corporate world with one of its largest acquisitions, buying online security and compliance company Postini for $625m.

The move increased the level of competition between Google and Microsoft in offering services to business. Google has built its success on its consumer-oriented search engine, but has been building up Google Apps, an online software suite for companies and organisations.

The news helped Google shares to a record high in New York. Its shares were nearly 1 per cent higher at $544.07 in midday trading and touched $548.74 earlier in the day.

Postini is best known for filtering spam from company inboxes. Google already has similar technology incorporated in its Gmail e-mail service, but it does not have a strong reputation for security in the enterprise.

"The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day," said Dave Girouard, head of Google Enterprise. "At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance."

Postini would provide the security and assurance that managements wanted, he said.

The new acquisition, based in San Carlos, California, will become a wholly owned subsidiary of Google. It serves 35,000 businesses and has 10m users worldwide. As well as spam-filtering, it offers instant messaging security and message archiving and encryption.

The privately held company says it has been profitable since 2004. The transaction is expected to close in the third quarter.

More than 100,000 business -users employ Google Apps, which offers e-mail, an appointments diary, spreadsheets and word processing through the web browser. Google Enterprise also sells search appliances and services such as Google Earth and Google Maps.

Google has focused on small acquisitions of start-ups to supplement its web services. Postini ranks as one of three exceptions.

The leading internet company is in the process of acquiring the online advertising company DoubleClick for $3.1bn. Last year, it bought the YouTube video sharing service for $1.65bn.

Boeing kicks off the 787 era

By Daniel Terdiman
Staff Writer, CNET News.com

I'm standing underneath the world's first Boeing 787 Dreamliner, and I'm not even close to alone.

In fact, I'm surrounded by hundreds, or thousands, of others, and everyone is in a party mood since we're all here to celebrate the official unveiling of the new Boeing plane.

Whether by luck of the calendar, or careful planning, or a little bit of both, Boeing managed to pull off the official 787 launch on July 8, 2007, or 07/08/07. I'm guessing careful planning, since everything else about the event seemed perfectly staged and perfectly executed.

And what an event it was. I knew it would be big--after all, it was the launch party for the first entirely new Boeing plane since the 777 in 1995--but I'd had no idea just how big. In the end, thousands upon thousands of Boeing employees, many of them 787 team members, as well as hundreds of journalists from around the world and many other VIP types crammed into the Boeing assembly facility here. Of course, given that this is the largest building. Still, the sea of folding chairs that greeted me when I came to the end of the red carpet we all traversed to get to our seats astonished me.

For Boeing, the 787 is a huge play. It is its first plane made largely with composite materials instead of aluminum, and it is promising its carrier customers that the plane will be far more fuel efficient than today's planes. The commitment seems to be paying off, as the company has already taken 677 orders for 787s, making it the first plane to ever rack up more than 500 pre-orders. And this despite the fact that the first passengers won't get on a 787 until next May.

It's no wonder that airlines are flocking to the plane. With fuel costs skyrocketing, they're desperate for a plane that will save them some money on the crucial "passenger mile" metric, even as it crams more and more people into a flying tube.

So the 787 Dreamliner, which can carry up to 330 passengers, depending on the model, and which can fly up to 8,500 miles, could well be a savior for the company as it tries to hold its own against a wounded, but still strong, Airbus.

Confidence running high
And it seems that Boeing is full of confidence based on all those early sales. For example, it got Tom Brokaw, the ex-NBC News anchor, to MC the launch event Sunday, and Brokaw prowled the stage with a cocky air that seemed to echo what the company is feeling as it attempts to move into the next stage of its storied history.

Company CEO Jim McNerney, too, was strutting his stuff on stage. He welcomed the thousands in the room, as well as thousands more watching the event live online and at other facilities around the world, and touted what Boeing feels is the game-changing nature of the 787 Dreamliner.

"The most important promise of the Dreamliner," McNerney said, "is to make the world a smaller place, and in doing so, bring us all together."

Maybe so. But there's no doubting that the thousands in the assembly plant for the launch were pretty worked up about the event.

So, too, were the employees of partner companies in several countries, who appeared on screen during the event, cheering and screaming on cue.

In fact, the event had a much more international feel than any other that I've been to. All around me were people speaking different languages, some I've heard before, others not. And no wonder, the 787 is truly a global product, which will be flown by at least the 47 carriers who have pre-ordered the plane, and likely many more.

But the event also felt a little bit like a giant family picnic, and again, no wonder: thousands upon thousands of people worked on the plane, and this was their first chance to see their new baby.

And what a baby it is. When the gargantuan doors to the facility pulled open at the end of 45 minutes of talking, the plane slid slowly into view, and then stopped, sparkling in the sun light. It was a perfect moment that almost seemed too improbable until I remembered that everything else about the event had gone off seemingly just as planned.

The plane sat on the tarmac, and the thousands of people slowly spilled out and around it, and next thing I knew, it was as if we had all come to a giant barbecue party in the park, except that there was no sizzling meat, no grass in sight and a giant airplane dominating the view.

I wasn't sure how to feel about this. I'm not a regular part of the airplane industry, but I certainly do love airplanes. But for many of the people on hand here, this was the culmination of years of work, and they were there to soak it all in.

Everywhere you looked, you could see people touching the plane, knocking on it to see what composite materials feel like on an airplane. Here, someone's girlfriend was posing for a picture standing next to the landing gear. There, someone's father was pointing out how jet engines work by sticking his hand up and into the engine.

I stood under the plane and it was cool and shady, which was nice because it was hot and bright alongside the plane.

But the best thing was looking around, and everywhere I could see, it was nothing but smiles.