Possible SIA revamp on the cards

SINGAPORE: As the aviation industry continues to be plagued by rising fuel costs and weakness in the global economy, Singapore Airlines has seen its profits being squeezed as more travellers turn to cheaper alternatives.

The airline, which is Asia's second largest by market capitalisation, cautioned on Thursday that loads and yields for its passenger and cargo businesses are expected to remain under pressure.

In an effort to further slash costs, SIA has also recently reduced its cockpit crew.

Competition from gulf carriers and budget airlines has significantly affected the profits of legacy carriers. With costs of jet fuel set to rise even further, analysts say it is imperative for legacy carriers such as SIA to revamp itself, either with new product offerings or new destinations.

"SIA has always done exceptionally well with its offering of premium products... But perhaps it's time for them to re-look the premium economy segment... which is an area where many other competitors are looking at," said Shukor Yusof, an aviation analyst with Standard & Poor's.

"If they were to come up with something that would entice passengers that are currently flying low cost carriers and if they can manage the fares in a way that would attract large numbers on board, then it would work," he said.

Besides SilkAir, SIA has also started its long-haul low-cost offshoot Scoot, in an attempt to glean some profits from the low cost carrier segment.

However some believe SIA should continue to pump money to protect its premium seats segment.

"Their premium sector is what holds them up. They've high yielding passengers and if they try to reduce that, they will lose them to other premium carriers like Cathay, Qantas, (or) Emirates," said Shashank Nigam, CEO of Simpliflying.

"Singapore airlines, while they're part of Star Alliance, they're not very close to their members so certainly after having sold (their) Virgin Atlantic stake, they should be looking at other partnerships to enhance passenger experience," he added.

Besides teaming up with Emirates, competitor Qantas has also announced its intention to form stronger links to the key hubs of Singapore and Hong Kong, paving the way for more head-on competition with SIA.

Analysts say some of these enhancements should include more technology updates to appeal to the well-connected traveller.

- CNA/jc

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SC nod to Zakia for protest petition against SIT report

NEW DELHI: The Supreme Court on Thursday allowed Zakia Jafri to file a fresh protest petition in a trial court against the SIT's closure report reportedly giving clean chit to Gujarat chief minister Narendra Modi in a 2002 riot case in Ahmedabad in which her husband and ex-Congress MP was killed.

The apex court directed that the widow of slain leader Ehsan Jafri be supplied with entire report of the inquiry by the Special Investigation Team (SIT) in the 2002 Gulberg Housing Society riot case of Ahmedabad to enable her to file the protest petition.

It clarified that the report shall be supplied without the comments of the SIT chief and she can file a protest petition within two months from the date of receiving the material against the SIT's closure report in the case in which 69 people, including her husband, were killed by a mob on February 28, 2002.

"We clarify that the petitioner (Jafri) is entitled to entire inquiry report placed in sealed envelope before this court on May 12, 2010," a bench comprising justices P Sathasivam, Aftab Alam and Ranjana Prakash Desai said.

It also set aside two orders of the Ahmedabad trial court of July 16 and November 27 of last year.

She had filed an appeal against the orders rejecting her demand for preliminary report filed by AK Malhotra, member of the SIT, in the Supreme Court and accepting the SIT closure report filed on March 13, 2012 in the case respectively.

The bench in its order said that the statement recorded during the inquiry of the complaint filed by Jafri should be treated as the statement recorded under section 161 of the Code of Criminal Procedure which involves examination of witnesses.

It also said that the statements recorded during the inquiry would only be used for taking decision on the closure report filed by the SIT into the case.

The apex court made it clear that "the present order is confined to the case in which the complaint was filed by Zakia on June 8, 2006" in which she had sought inquiry against Modi and others with regard to 2002 riots.

Gujarat's additional advocate general Tushar Mehta told the bench that the state government was not taking adverserial stand in the case. He said six out of the nine cases investigated by the SIT have resulted in conviction.

Senior advocate Raju Ramachandran, who was assisting the court as amicus curaie in the matter, said the widow was entitled for entire material sought by her.

The apex court on September 12, 2011 had passed the order relating to supply of documents to Zakia.

It had also asked the SIT, which probed the riot cases including the Ahmedabad Gulberg Housing Society massacre case in which former Congress MP Jafri had been killed, to forward its final report to the local court.

Zakia has filed the petition challenging the trial court's order rejecting her plea for supply of some documents relating to the investigation in the case including the probe report filed by Malhotra.

She was seeking the documents to file a protest petition against the SIT's closure report in the case.

Zakia contended that the court's refusal to allow her access the documents pertaining to the investigation by the SIT into the case was coming in the way of her filing the protest petition against the closure report.

The court was hearing Zakia's appeal against July 16, 2012 order of the trial court, which had rejected her demand for preliminary report filed by Malhotra in the Supreme Court after the inquiry into her complaint against Modi and others with regard to 2002 riots.

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New whooping cough strain in US raises questions

NEW YORK (AP) — Researchers have discovered the first U.S. cases of whooping cough caused by a germ that may be resistant to the vaccine.

Health officials are looking into whether cases like the dozen found in Philadelphia might be one reason the nation just had its worst year for whooping cough in six decades. The new bug was previously reported in Japan, France and Finland.

"It's quite intriguing. It's the first time we've seen this here," said Dr. Tom Clark of the Centers for Disease Control and Prevention.

The U.S. cases are detailed in a brief report from the CDC and other researchers in Thursday's New England Journal of Medicine.

Whooping cough is a highly contagious disease that can strike people of any age but is most dangerous to children. It was once common, but cases in the U.S. dropped after a vaccine was introduced in the 1940s.

An increase in illnesses in recent years has been partially blamed on a version of the vaccine used since the 1990s, which doesn't last as long. Last year, the CDC received reports of 41,880 cases, according to a preliminary count. That included 18 deaths.

The new study suggests that the new whooping cough strain may be why more people have been getting sick. Experts don't think it's more deadly, but the shots may not work as well against it.

In a small, soon-to-be published study, French researchers found the vaccine seemed to lower the risk of severe disease from the new strain in infants. But it didn't prevent illness completely, said Nicole Guiso of the Pasteur Institute, one of the researchers.

The new germ was first identified in France, where more extensive testing is routinely done for whooping cough. The strain now accounts for 14 percent of cases there, Guiso said.

In the United States, doctors usually rely on a rapid test to help make a diagnosis. The extra lab work isn't done often enough to give health officials a good idea how common the new type is here, experts said.

"We definitely need some more information about this before we can draw any conclusions," the CDC's Clark said.

The U.S. cases were found in the past two years in patients at St. Christopher's Hospital for Children in Philadelphia. One of the study's researchers works for a subsidiary of Johnson & Johnson, which makes a version of the old whooping cough vaccine that is sold in other countries.

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JournaL: http://www.nejm.org

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Ex-LA Cop Sought in Shootings of 3 Cops, 2 Slayings

Police in Southern California say they suspect that a fired cop is connected to the shootings -- one fatal -- of three police officers this morning, as well as the weekend slayings of an assistant women's college basketball coach and her fiancé in what cops believe are acts of revenge against the LAPD, as suggested in the suspect's online manifesto.

Former police officer Christopher Jordan Dorner, 33, who's a U.S. Navy reservist, has been publically named as a suspect in the killings of Monica Quan, 28, and her 27-year-old fiancé, Keith Lawrence, Irvine police Chief David L. Maggard said at a news conference Wednesday night.

"We are considering him armed and dangerous," Lt. Julia Engen of the Irvine Police Department said.

Police say Dorner shot at four officers in two incidents overnight, hitting three of them: one in Corona, Calif., and two in Riverside, Calif.

Sgt. Rudy Lopez of the LAPD said two LAPD officers were in Corona, and were heading out on special detail to check on one of the individuals named in Dorner's manifesto. Dorner allegedly grazed one of them but missed the other.

The Riverside Police Department said two of its officers were shot before one of them died, KABC-TV reported. The extent of the other's injuries is unclear.

Police suspected a connection to Dorner.

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"They were on routine patrol stopped at a stop light when they were ambushed," Lt. Guy Toussant of the Riverside police department said.

Police around Southern California are wearing tactical gear, including helmets and guns across their chests. The light-up signs along California highways show the license plate number of Dorner's car, and say to call 911 if it is seen. The problem, police say, is that they believe Dorner is switching license plates on his car, a 2005 charcoal gray Nissan Titan pickup truck.

Lawrence was found slumped behind the wheel of his white Kia in the parking lot of their upscale apartment complex in Irvine Sunday and Quan was in the passenger seat.

"A particular interest at this point in the investigation is a multi-page manifesto in which the suspect has implicated himself in the slayings," Maggard said.

Police said Dorner's manifesto included threats against members of the LAPD. Police say they are taking extra measures to ensure the safety of officers and their families.

The document, allegedly posted on an Internet message board this week, apparently blames Quan's father, retired LAPD Capt. Randy Quan, for his firing from the department.

"Your lack of ethics and conspiring to wrong a just individual are over," he allegedly wrote.

One passage from the manifesto reads, "I will bring unconventional and asymmetrical warfare to those in LAPD uniform whether on or off duty."

"I never had the opportunity to have a family of my own," it reads. "I'm terminating yours."

Dorner was with the department from 2005 until 2008, when he was fired for making false statements.

Randy Quan, who became a lawyer in retirement, represented Dorner in front of the Board of Rights, a tribunal that ruled against Dorner at the time of his dismissal, LAPD Capt. William Hayes told The Associated Press Wednesday night.

According to documents from a court of appeals hearing in October 2011, Dorner was fired from the LAPD after he made a complaint against his field-training officer, Sgt. Teresa Evans, saying in the course of an arrest she had kicked a suspect who was a schizophrenic with severe dementia.

After an investigation, Dorner was fired for making false statements.

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Tunisia protests after government critic shot dead

TUNIS (Reuters) - A Tunisian opposition politician was shot dead on Wednesday, sending protesters onto the streets of cities nationwide two years after the uprisings that swept Tunisia's president from power and inflamed the Arab world.

The headquarters of the moderate Islamist Ennahda party, which rules in a fractious coalition with secularists, was set ablaze after Chokri Belaid, an outspoken critic of the government, was gunned down outside his home in the capital.

Prime Minister Hamadi Jebali, who said the identity of the attacker was not known, condemned Belaid's killing as a political assassination and a strike against the "Arab Spring" revolution. Ennahda denied any involvement by the part.

Despite calls for calm from the president, 8,000 protesters, massed outside the Interior Ministry, calling for the fall of the government, and thousands more demonstrated in cities including Mahdia, Sousse, Monastir and Sidi Bouzid, the cradle of the revolution, where police fired teargas and warning shots.

"This is a black day in the history of modern Tunisia ... Today we say to the Islamists, 'get out' ... enough is enough," said Souad, a 40-year-old teacher outside the Interior Ministry in Tunis. "Tunisia will sink in the blood if you stay in power."

The small North African state was the first Arab country to oust its leader and hold free elections as uprisings spread around the region, leading to the ousting of the rulers of Egypt, Yemen and Libya and to the civil war in Syria.

But like in Egypt, many who campaigned for freedom from repression under autocratic rulers and better prospects for their future now feel their revolutions have been hijacked by Islamists they accuse of clamping down on personal freedoms, with no sign of new jobs or improvements in infrastructure.

HARDSHIP

Since the uprising, the government has faced a string of protests over economic hardship and Tunisia's future path, with many complaining hardline Salafists were taking over the revolution in the former French colony dominated previously by a secular elite under the dictatorship of Zine al-Abidine Ben Ali.

Last year, Salafist groups prevented several concerts and plays from taking place in Tunisian cities, saying they violated Islamic principles, worrying the secular-minded among the 11 million Tunisians, who fear freedom of expression is in danger.

Declining trade with the crisis-hit euro zone has also left Tunisians struggling to achieve the better living standards many had hoped for following Ben Ali's departure. Any further signs of unrest could scare off tourists vital to an industry only just recovering from the revolution.

"More than 4,000 are protesting now, burning tires and throwing stones at the police," Mehdi Horchani, a Sidi Bouzid resident, told Reuters. "There is great anger."

Jobless graduate Mohamed Bouazizi set himself on fire in December 2010 in the city, 300 km (180 miles) southwest of Tunis, after police confiscated his unlicensed fruit cart, triggering the "Jasmine Revolution" that forced Ben Ali to flee to Saudi Arabia less than a month later, on January 14, 2011.

President Moncef Marzouki, who last month warned the tension between secularists and Islamists might lead to "civil war", canceled a visit to Egypt scheduled for Thursday and cut short a trip to France, where he addressed the European Parliament.

"We will continue to fight the enemies of the revolution," the secularist leader told European Union lawmakers in Strasbourg.

Belaid, who died in hospital, was a leading member of the opposition Popular Front party. A lawyer and human rights activist, he had been a constant critic of the government, accusing it of being a puppet of the rulers in the small but wealthy Gulf state of Qatar, which Tunisia denies.

"Chokri Belaid was killed today by four bullets to the head and chest," Ziad Lakhader, a leader of the Popular Front, told Reuters. "Doctors told us that he has died. This is a sad day for Tunisia."

DENIES INVOLVEMENT

Ennahda Prime Minister Jebali said the killers wanted to "silence his voice".

"The murder of Belaid is a political assassination and the assassination of the Tunisian revolution," he said.

Party President Rached Ghannouchi denied any involvement in the killing. Belaid said earlier this week that dozens of people close to the government attacked a meeting of his party.

"Is it possible that the ruling party could carry out this assassination when it would disrupt investment and tourism?" Ghannouchi told Reuters.

He blamed those seeking to derail Tunisia's democratic transition after a 2011 uprising. "Tunisia today is in the biggest political stalemate since the revolution. We should be quiet and not fall into a spiral of violence. We need unity more than ever," Ghannouchi said.

He accused secular opponents of stirring up sentiment against his party following Belaid's death. "The result is burning and attacking the headquarters of our party in many areas," he said.

French President Francois Hollande condemned the shooting, saying he was concerned by the rise of violence in Paris's former dominion, where the government says al Qaeda-linked militants linked to those in neighboring countries have been accumulating weapons with the aim of creating an Islamic state.

"This murder deprives Tunisia of one of its most courageous and free voices," Hollande's office said in a statement.

Riccardo Fabiani, Eurasia analyst on Tunisia, described it as a "major failure for Tunisian politics".

"The question is now what is Ennahda going to do and what are its allies going to do?" he said. "They could be forced to withdraw from the government which would lead to a major crisis in the transition."

Marzouki warned last month that the conflict between Islamists and secularists could lead to civil war and called for a national dialogue that included all political groupings.

Ennahda won 42 percent of seats in a parliamentary election in 2011 and formed a government in coalition with two secular parties, the Congress for the Republic, to which President Marzouki belongs, and Ettakatol.

Marzouki's party threatened on Sunday to withdraw from the government unless it dropped two Islamist ministers.

(Additional reporting by John Irish in Paris; Writing by Alison Williams; Editing by Alastair Macdonald)

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Euro not currently overvalued, Germany says

BERLIN : The euro is not currently overvalued and exchange rates should not be used to try and boost competitiveness, the German government said Wednesday, rejecting French calls for ways to cap the single currency's recent rise.

"The German government is of the conviction that the euro, historically speaking, is currently not overvalued," government spokesman Steffen Seibert told a news briefing.

"What we're currently seeing is a rise in the value of the euro which is a counter-reaction to the massive depreciation in the wake of the eurozone crisis," Seibert said.

Earlier in Paris, French Finance Minister Pierre Moscovici had said an overvalued euro hurts economic growth and the issue should be discussed among eurozone finance ministers and the group of 20 leading economies.

But Berlin sees no cause for alarm.

The latest rise in the euro "shows that financial markets' confidence in the euro is returning. That's not a bad thing," government spokesman Seibert continued.

Germany believes that a currency's exchange rate should reflect its economic fundamentals "and flexible exchange rates are the best to way to achieve this," he said.

"I can only point out that both the G8 and the G20 separately agreed that it made sense for the markets to set exchange rates," the spokesman noted.

French minister Moscovici said that while the euro's recent rise was partly explained by the abatement of the eurozone crisis, the monetary policy of other countries was also to blame.

Moscovici said it is "legitimate" to discuss with European finance ministers what could be the fair value of the euro and the right way to get there.

But while Seibert acknowledged that the topic would likely be discussed, "from our point of view, exchange rate policy is not an appropriate tool to boost competitiveness.

"The effects of things like targeted devaluation tend to be rather short-term. You can't use it to achieve a lasting boost in competitiveness," Seibert said.

A day earlier, French President Francois Hollande had said the euro's value cannot not be left to the whims of the market.

Speaking to European Parliament in Strasbourg said "a single currency zone must have a foreign exchange policy otherwise it will see an exchange rate imposed on it (by the markets) which is out of line with its real competitive position."

The euro has strengthened sharply in the past few months as the eurozone appeared to have finally got the better of a debt crisis which at one stage looked likely to sink the whole project.

On Friday, the single currency hit US$1.3711, a level last seen in mid-November 2011, stoking concerns that it could begin to hurt exports, a key growth driver at a time when the overall eurozone economy is struggling badly.

For several months some emerging countries have objected that monetary policy by leading central banks, in injecting liquidity into their own economies, tends to depress their currencies and amounts to a policy of competitive devaluation.

Analysts say that the policy of the European Central Bank is showing signs of being somewhat less relaxed and this is one factor tending to push up the euro.

- AFP/ch

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India repatriates two Pak teenage boys

AMRITSAR: In yet another good will gesture Border Security Force (BSF) handed over two Pak teenage boys to Pakistan Rangers after they had entered India on Wednesday.

They were sent back after being satisfied of their innocence. Earlier on January 17th, BSF had handed over a Pak national Sayeed Naseem Hussain Shah to Pak Rangers who had also unintentionally entered India. Giving details of the incident a BSF officials informed that two Pak teenage boys Mohammad Tariq, 14 and Naved, 15, both residents of Shikhupura , Pakistan had entered India from near Border Out Post Rattan Khurd at around 5.30pm on Wednesday.

Both of them were apprehended by a BSF's patrolling party. The investigations revealed that both Pak boys had come to visit their relatives in Harbasanpura village near Lahore and had come to pay obeisance at the mazar of Peer Baba situated near Indo Pak international border in the area of Border Out Post Rattan Khurd in Amritsar sector. "Both the boys had inadvertently crossed the international border and were not aware of the alignment of the international boundary" said BSF official. They were handed over to Pak Rangers from Attari international border on Wednesday evening.

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Critics seek to delay NYC sugary drinks size limit

NEW YORK (AP) — Opponents are pressing to delay enforcement of the city's novel plan to crack down on supersized, sugary drinks, saying businesses shouldn't have to spend millions of dollars to comply until a court rules on whether the measure is legal.

With the rule set to take effect March 12, beverage industry, restaurant and other business groups have asked a judge to put it on hold at least until there's a ruling on their lawsuit seeking to block it altogether. The measure would bar many eateries from selling high-sugar drinks in cups or containers bigger than 16 ounces.

"It would be a tremendous waste of expense, time, and effort for our members to incur all of the harm and costs associated with the ban if this court decides that the ban is illegal," Chong Sik Le, president of the New York Korean-American Grocers Association, said in court papers filed Friday.

City lawyers are fighting the lawsuit and oppose postponing the restriction, which the city Board of Health approved in September. They said Tuesday they expect to prevail.

"The obesity epidemic kills nearly 6,000 New Yorkers each year. We see no reason to delay the Board of Health's reasonable and legal actions to combat this major, growing problem," Mark Muschenheim, a city attorney, said in a statement.

Another city lawyer, Thomas Merrill, has said officials believe businesses have had enough time to get ready for the new rule. He has noted that the city doesn't plan to seek fines until June.

Mayor Michael Bloomberg and other city officials see the first-of-its-kind limit as a coup for public health. The city's obesity rate is rising, and studies have linked sugary drinks to weight gain, they note.

"This is the biggest step a city has taken to curb obesity," Bloomberg said when the measure passed.

Soda makers and other critics view the rule as an unwarranted intrusion into people's dietary choices and an unfair, uneven burden on business. The restriction won't apply at supermarkets and many convenience stores because the city doesn't regulate them.

While the dispute plays out in court, "the impacted businesses would like some more certainty on when and how they might need to adjust operations," American Beverage Industry spokesman Christopher Gindlesperger said Tuesday.

Those adjustments are expected to cost the association's members about $600,000 in labeling and other expenses for bottles, Vice President Mike Redman said in court papers. Reconfiguring "16-ounce" cups that are actually made slightly bigger, to leave room at the top, is expected to take cup manufacturers three months to a year and cost them anywhere from more than $100,000 to several millions of dollars, Foodservice Packaging Institute President Lynn Dyer said in court documents.

Movie theaters, meanwhile, are concerned because beverages account for more than 20 percent of their overall profits and about 98 percent of soda sales are in containers greater than 16 ounces, according to Robert Sunshine, executive director of the National Association of Theatre Owners of New York State.

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Hostage Taker Waged Firefight With SWAT Agents

Jimmy Lee Dykes, the man who held a 5-year-old boy hostage for nearly a week in an underground bunker in Alabama, had two homemade explosive devices on his property and engaged in a firefight with SWAT agents before they stormed the bunker and killed him, according to the FBI.

One explosive device was found inside the bunker and another was located in the PVC pipe negotiators used to communicate with Dykes, the FBI said Tuesday night. Both devices were "disrupted," according to the FBI.
The search for hazards is expected to continue through today.

Preliminary investigation reports indicate that Dykes engaged in a firefight with the SWAT agents who made entry, according to the FBI.

Officials were able to insert a high-tech camera into the 6-by-8-foot bunker to monitor Dykes' movements, and they became increasingly concerned that he might act out, a law enforcement source with direct knowledge of the case told ABC News Monday.

FBI special agents were positioned near the entrance of the bunker and negotiators were able to convince Dykes to approach the bunker door. FBI agents used two explosions to gain entry into the bunker. It also appears that Dykes reinforced the bunker against any attempted entry by law enforcement, according to the FBI.

ABC News has learned that Dykes first opened fired on the agents during the bunker raid. Moments later, the agents returned fire, killing Dykes.

The shooting review team continues to gather facts regarding the incident, the FBI said.

Ala. Hostage Standoff Over: Kidnapper Dead, Child Safe Watch Video

The boy, only identified as Ethan, was rescued from the scene by a waiting ambulance. The bunker raid came six days after Dykes boarded a school bus, fatally shot the driver and abducted the boy, who suffered no physical injuries.

Click here for a look at what's next for Ethan.

"It's all about timing that is why you practice. You practice blowing the door in split seconds, flash bang, shoot before Mr. Dykes would even have an opportunity to react," Brad Garrett, former FBI agent and ABC News consultant, said.

Meanwhile, Ethan is set to celebrate his 6th birthday today, happily reunited with his family.

Ethan's thrilled relatives told "Good Morning America" Tuesday that he seemed "normal as a child could be" after what he went through and has been happily playing with his toy dinosaur.

"He's happy to be home," Ethan's great uncle Berlin Enfinger told "GMA." "He's very excited and he looks good."

"For the first time in almost a week, I woke up this morning to the most beautiful sight...my sweet boy. I can't describe how incredible it is to hold him again," Ethan's' mother wrote in a statement released by the FBI Tuesday.

Ethan is "running around the hospital room, putting sticky notes on everyone that was in there, eating a turkey sandwich and watching SpongeBob," Dale County Schools Superintendent Donny Bynum said at a news conference Tuesday.

When asked about a birthday party for Ethan, Bynum said, "We are still in the planning stages. Our time frame is that we are waiting for Ethan, waiting on that process, but we are going to have it at a school facility, most likely the football stadium at Dale County High School."

He said many "tears of celebration" were shed Monday night when Ethan was reunited with his family.

"If I could, I would do cartwheels all the way down the road," Ethan's aunt Debra Cook told "GMA." "I was ecstatic. Everything just seemed like it was so much clearer. You know, we had all been walking around in a fog and everyone was just excited. There's no words to put how we felt and how relieved we were."

Cook said that Ethan has not yet told them anything about what happened in the bunker and they know very little about Dykes.

What the family does know is that they are overjoyed to have their "little buddy" back.

"He's a special child, 90 miles per hour all the time," Cook said. "[He's] a very, very loving child. When he walks in the room, he just lights it up."

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Iran's Ahmadinejad in Egypt on historic visit

CAIRO (Reuters) - Mahmoud Ahmadinejad arrived in Egypt on Tuesday on the first trip by an Iranian president since the 1979 revolution, underlining a thaw in relations since Egyptians elected an Islamist head of state.

President Mohamed Mursi, the Muslim Brotherhood politician elected in June, kissed Ahmadinejad as he disembarked from his plane at Cairo airport. The leaders walked down a red carpet, Ahmadinejad smiling as he shook hands with waiting dignitaries.

Visiting Cairo to attend an Islamic summit that begins on Wednesday, the president of the Shi'ite Islamist republic is due to meet later on Tuesday with the grand sheikh of al-Azhar, one of the oldest seats of learning in the Sunni world.

Such a visit would have been unthinkable during the rule of Hosni Mubarak, the military-backed autocrat who preserved Egypt's peace treaty with Israel during his 30 years in power and deepened ties between Cairo and the West.

"The political geography of the region will change if Iran and Egypt take a unified position on the Palestinian question," Ahmadinejad said in an interview with Al Mayadeen, a Beirut-based TV station, on the eve of his visit.

He said he wanted to visit the Gaza Strip, the Palestinian territory which neighbors Egypt to the east and is run by the Islamist movement Hamas. "If they allow it, I would go to Gaza to visit the people," Ahmadinejad said.

Analysts doubt that the historic changes that brought Mursi to power in Egypt will result in a full restoration of diplomatic ties between states whose relations were broken off after the Iranian revolution and the conclusion of Egypt's peace treaty with Israel in 1979.

OBSTACLES TO FULL TIES

At the airport the two leaders discussed ways of boosting relations between their countries and resolving the Syrian crisis "without resorting to military intervention", Egyptian state media reported.

Egypt is concerned by Iran's support for Syrian President Bashar al-Assad, who is trying to crush an uprising inspired by the revolt that swept Mubarak from power two years ago. Egypt's overwhelmingly Sunni Muslim population is broadly supportive of the uprising against Assad's Alawite-led administration.

The Mursi administration also wants to safeguard relations with Gulf Arab states that are supporting Cairo's battered state finances and are deeply suspicious of Iran.

Egyptian Foreign Minister Mohamed Kamel Amr reassured Gulf Arab allies that Egypt would not jeopardize their security.

"The security of the Gulf states is the security of Egypt," he told the official MENA news agency, in response to questions about Cairo's opening to Iran and its impact on other states in the region.

Mursi wants to preserve ties with the United States, the source of $1.3 billion in aid each year to the influential Egyptian military.

His government has established close ties with Hamas, a movement backed by Iran and shunned by the West because of its hostility to Israel, but its priority is addressing Egypt's deep economic problems.

"The restoration of full relations with Iran in this period is difficult, despite the warmth in ties ... because of many problems including the Syrian crisis and Cairo's links with the Gulf states, Israel and the United States," said one former Egyptian diplomat.

Speaking to Reuters on the sidelines of preparatory meetings for the two-day Islamic summit, Iranian Foreign Minister Ali Akbar Salehi said he was optimistic that ties could grow closer.

"We are gradually improving. We have to be a little bit patient. I'm very hopeful about the expansion of the bilateral relationship," he said. Asked where he saw room for closer ties, he said: "Trade and economics."

Ahmadinejad's visit to Egypt follows Mursi's visit to Iran in August for a summit of the Non-Aligned Movement.

Sheikh Ahmed al-Tayeb, head of the 1,000-year-old al-Azhar mosque and university, will meet Ahmadinejad at his offices in mediaeval Islamic Cairo, al-Azhar's media office said.

Salehi, the Iranian foreign Minister, stressed the importance of Muslim unity when he met Sheikh al-Tayeb at al-Azhar last month.

Egypt and Iran have taken opposite courses since the late 1970s. Egypt, under Mubarak's predecessor Anwar Sadat, concluded a peace treaty with Israel in 1979 and became a close ally of the United States and Europe. Iran from 1979 turned into a center of opposition to Western influence in the Middle East.

Symbolically, Iran named a street in Tehran after the Islamist who led the 1981 assassination of Sadat.

Egypt gave asylum and a state funeral to Iran's exiled Shah Reza Pahlavi, who was overthrown by the 1979 Iranian revolution. He is buried in a medieval Cairo mosque alongside his ex-brother-in-law, Egypt's last king, Farouk.

(Additional reporting by Ayman Samir and Alexander Diadosz; Editing by Andrew Roche and Paul Taylor)

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