France, worried by Trump, promises to be defender of Iran nuclear deal

France leader saying he will continue Iran Nuclear Deal

By John Irish

TEHRAN (Reuters) – France vowed on Monday to act as defender of Iran’s nuclear deal, which U.S. President Donald Trump has threatened to tear up, but said it was imperative Tehran abide strictly by the conditions of the accord.

Arriving in the Iranian capital for a two-day visit, French Foreign Minister Jean-Marc Ayrault said it was in the “common interest” that the 2015 accord under which Tehran agreed to curb its nuclear program in return for lifted sanctions was obeyed.

During the U.S. election race Trump had branded it “the worst deal ever negotiated”, telling voters he would either rip it up or seek a better agreement.

“I’m coming as the defender of the accord, but to be vigilant and explain that they (the Iranians) must be irreproachable,” Jean-Marc Ayrault told reporters after landing in Tehran.

“We harbor real concerns about the U.S. administration’s attitude towards this agreement,” he said.

The deal was brokered by the United States, Russia, China, Britain, Germany and France. Paris took one of the hardest lines against Tehran in the negotiations, but has been quick to restore trade ties.

Major French corporations including planemaker Airbus, oil major Total and automobile manufacturers Peugeot and Renault have all signed deals.

Ayrault said that while Tehran had “largely” kept to the terms of the deal, it had pushed the spirit of the accord over the past year by carrying out several ballistic missile tests.

“We want this agreement to be respected. It is in the common interest of the international community that it is,” Ayrault said.

The foreign minister is due to meet Iranian President Hassan Rouhani, Foreign Minister Mohammad Javad Zarif and the powerful Secretary of Supreme National Security Council, Ali Shamkhani.

The visit, which includes an economic conference where some contracts may be concluded, will provide an opportunity for talks on Syria. Paris is a vociferous opponent of Iran’s backing of Syria’s leader, Bashar al-Assad.

“We will discuss our disagreements, notably on Syria. “We had hoped Iran would be less aggressive in the region,” Ayrault said, referring to the period since the nuclear deal.

On Sunday, Trump spoke by telephone with Saudi Arabia’s King Salman, a close U.S.-ally in the Middle East. A White House statement said the two leaders agreed on the need to address “Iran’s destabilizing regional activities.”

(Editing by Ingrid Melander and Richard Lough)

Jihadists in Syria launch assault on rebels attending peace talks

hotel hosting Syria peace talks

By Tom Perry

BEIRUT (Reuters) – A jihadist group launched a major assault on Free Syrian Army factions in Syria as they attended peace talks in Kazakhstan, rebel officials said on Tuesday, igniting a new conflict among insurgents that could further strengthen the government’s hand.

The attack by jihadist group Jabhat Fateh al-Sham targeted FSA groups in northwestern Syria in an area representing the rebellion’s main territorial foothold after the opposition’s defeat in Aleppo last month.

Fateh al-Sham could not immediately be reached for comment. The group was previously known as the Nusra Front, and changed its name after announcing it was cutting ties with al Qaeda last year.

Tensions have been building between Fateh al-Sham and more moderate rebels since government forces backed by Russian air power and Iranian-backed Shi’ite militias drove the rebels out of Aleppo, a major victory for President Bashar al-Assad.

Fateh al-Sham is not covered by a shaky truce between the government and rebels brokered by Russia and Turkey, one of the main backers of the FSA groups. The aim of the meeting in Astana, organized by Russia, Turkey and Iran, is to shore up the ceasefire that came into effect on Dec. 30.

The commander of one of the FSA groups, Jaish al-Mujahideen, told Reuters the “extremely fierce” Fateh al-Sham attack aimed to “eliminate the revolution and turn it black”, a reference to the black flag flown by the jihadists in Syria.

He said the group had seized “some positions”, though these were far from its headquarters. “A comprehensive war has now started against the Golani gang,” he added, a reference to Abu Mohamad al-Golani, the leader of Fateh al-Sham.

In a statement, Jaish al-Mujahideen called for other factions to “stand as if they are one man” against the group.

DEFEATING “THE FSA IN THE NORTH”

Fateh al-Sham has a history of crushing FSA groups in the conflict that began in 2011. One of the single biggest groups in the insurgency, Fateh al-Sham has been targeted in a spate of U.S. air strikes in the northwest since the new year.

One of these killed dozens of its fighters at a training camp in Idlib last week. The Pentagon said that attack was carried out by a B-52 bomber and killed more than 100 al Qaeda fighters.

The Fateh al-Sham assault was focused in rebel-held areas to the west of Aleppo, and adjoining areas of Idlib province, which is almost entirely in insurgent hands. Tensions have also flared in that area between Fateh al-Sham and Ahrar al-Sham, a large Islamist group widely believed to be backed by Turkey.

An official in a second FSA group, Jabha Shamiya, told Reuters the attack began overnight, describing it as a large assault in several areas. The official said it was the first time Fateh al-Sham had attacked the FSA groups in that area.

“What they are doing serves Iran and the regime – so there is no FSA left in the north – particularly with the factions’ delegation now in Astana where the regime offered nothing with regards to the ceasefire,” said the Jabha Shamiya official.

The FSA groups now needed to coordinate their efforts to repel the attack, he said.

(Reporting by Tom Perry; Editing by Hugh Lawson and Dominic Evans)

Expectations low as Syria’s warring sides meet

hotel hosting the Syrian preace talks

By Olzhas Auyezov and Suleiman Al-Khalidi

ASTANA (Reuters) – Syria’s warring sides met for talks for the first time in nine months on Monday, with frosty initial exchanges suggesting chances of a significant breakthrough were slim as the country’s six-year-old conflict ground on.

They sat opposite each other at a round table in a hotel conference room before a day of negotiations – sponsored by Russia, Turkey and Iran in Kazakhstan’s capital Astana – got under way.

Both delegations said the focus was on the country’s ceasefire, a fragile precursor to a wider political solution.

But Bashar al-Jaafari, the head of the delegation representing Syrian President Bashar al-Assad, said negotiators for the rebel forces had been rude and unprofessional, accusing them of defending “war crimes” committed by Jabhat Fateh al-Sham, the militant group formerly known as Nusra Front.

A rebel source said opposition representatives planned to negotiate with the government side only via intermediaries.

Mohammed Alloush, the head of the opposition delegation, told delegates he wanted to stop “the horrific flow of blood” by consolidating the shaky ceasefire and freezing military operations, saying Iran-backed militias had to leave Syria.

Russian news agency TASS cited a draft communique in which Moscow, Ankara and Tehran would commit to jointly fighting Islamic State and Jabhat Fateh al-Sham and set up a mechanism for trilateral monitoring of the ceasefire, which took effect on Dec. 30.

But fundamental divisions also remain between pro-Assad Russia and Turkey, which has supported anti-Assad rebels – including whether Syria’s president should stay in power or, as the rebels are demanding, step down.

There were no senior government figures among the delegations in Astana and Kazakhstan’s foreign ministry said it expected the meetings to be over by midday on Tuesday.

OVERSEEING CEASEFIRE

Some observers said the talks, which UN Special Envoy for Syria Staffan de Mistura is attending, could help jump-start U.N.-led negotiations that were suspended in late April.

De Mistura said it was crucial to get a mechanism to oversee and implement a nationwide ceasefire in place to build confidence.

“That by itself … would be a major achievement,” he said, adding he hoped Astana could pave the way for direct talks between the government and opposition in Geneva next month.

The Astana talks pointedly exclude the West, though Kazakhstan, with the backing of Moscow and Ankara, extended an invitation to the new U.S. administration last week, which Washington declined.

Iranian officials have said they strongly oppose U.S. involvement, though George Krol, the U.S. ambassador to Kazakhstan, attended as an observer.

Turkey and Russia – each for their own reasons – both want to disentangle themselves from the fighting. That has pushed them into an ad hoc alliance that some people believe represents the best chance for progress towards a peace deal, especially with Washington distracted by domestic issues.

The opposition arrived in Astana aware that the fall of their former urban stronghold, Aleppo, has shifted the momentum in the fighting in favor of Assad.

On Sunday, war planes bombed rebel-held areas of western Syria, killing 12 people in one location, the Syrian Observatory for Human Rights said, while insurgent shelling of Aleppo killed six.

“The ceasefire is clinically dead, but the Russians and Turks want to keep it alive to send a message to the international community that they are the ones in charge of the Syrian situation,” said Observatory director Rami Abdulrahman.

(Additional reporting by John Irish, Denis Dyomkin and Kinda Makieh in Astana, Michelle Nichols at the United Nations, Bozorgmehr Sharafedin in Dubai and Thomas Perry in Beirut; Writing by Olzhas Auyezov/Christian Lowe/Andrew Osborn; Editing by John Stonestreet)

Soldiers, rescue dogs seek trapped firefighters in Tehran building collapse

By Parisa Hafezi

ANKARA (Reuters) – Soldiers, sniffer dogs and rescue workers were searching for an estimated 25 trapped firefighters on Thursday in the ruins of a 17-storey commercial building that collapsed while they were trying to put out a blaze, the mayor of Tehran said.

Iranian state TV said at least 78 people, including 45 firefighters, had been hurt when the Plasco building in the south of the capital came crashing down in a giant cloud of dust. One witness described it as “like a horror movie”.

Mayor Mohammad Baqer Qalibaf denied speculation on social media that dozens of people had been killed. “The reports on 30, 50 fatalities are incorrect. Around 25 firefighters are trapped inside and rescue teams are trying to take them out,” he told state television.

The broadcaster reported: “Still some parts of the collapsed building are on fire. Firefighters are trying to control the fire.” Most of those hurt had been taken to hospital and many were quickly discharged, it said.

The semi-official Tasnim news agency said troops had been sent to help dig through the ruins. It said one of the first firefighters to be reached had demanded to be let back inside to save his colleagues.

The agency quoted an official in the Tehran governor’s office as saying an electrical short-circuit had caused the fire, but there was no immediate confirmation of this.

President Hassan Rouhani ordered an immediate investigation and compensation for those affected.

RESCUE COULD TAKE DAYS

Tehran Fire Department spokesman Jalal Maleki said the building had collapsed vertically. “That is why adjacent buildings were not damaged,” he said.

Occupants of the building had been evacuated as the firefighters tackled the blaze. State TV said the tenants included garment manufacturers, and broadcast footage of business owners trying to re-enter the wreckage.

Sniffer dogs searched for signs of survivors buried under giant slabs of concrete and heaps of twisted metal. The rescue operation could last more than two days, state TV said.

The Plasco building, Iran’s first private high-rise, was built more than 50 years ago by a prominent Iranian-Jewish businessman who was arrested and sentenced to death for ties to Israel after the 1979 Islamic revolution.

Tasnim said it “had caught fire in the past”. A fire department spokesman told state TV that tenants “had been warned repeatedly in the past months by the municipality to evacuate the building because of safety concerns.”

“We had repeatedly warned the building managers about the lack of safety,” Maleki told state TV. “The building lacked fire extinguishers… But the building managers ignored the warnings.”

The owner of a nearby grocery store, forced by police to leave the area, told Reuters by telephone: “It was like a horror movie. The building collapsed in front of me.”

The semi-official Fars news agency said police had cordoned off the nearby British, German and Turkish embassies. “The flames could be seen kilometers away from the old building,” it said.

(Writing by Parisa Hafezi; Editing by Mark Trevelyan)

Iran’s Revolutionary Guards position for power

Iran's Revolutionary Guards

By Babak Dehghanpisheh

BEIRUT (Reuters) – Iran’s Revolutionary Guards look set to entrench their power and shift the country to more hardline, isolationist policies for years to come following the death of influential powerbroker Ali Akbar Hashemi Rafsanjani.

Former president Rafsanjani long had a contentious relationship with the Islamic Revolutionary Guard Corps (IRGC), which is both the strongest military force in Iran and also has vast economic interests worth billions of dollars.

With a presidential election in May and a question mark over the health of Iran’s most powerful figure, Supreme Leader Ayatollah Ali Khamenei, analysts say the Guards will soon have opportunities to tighten their grip on the levers of power.

Rafsanjani, who died on Sunday aged 82, had criticized the Guards’ expanding economic interests, which range from oil and gas to telecommunications and construction, their role in the crackdown on protests after disputed 2009 presidential elections and the country’s missile program which the Guards oversee.

Rafsanjani was a high-profile member of the Assembly of Experts that selects the Supreme Leader. Though he favored an easing of security restrictions on Iranians at home, opening up to the West politically and economically, he was a respected go-between who could balance the influence of hardliners.

During mourning ceremonies this week, senior Revolutionary Guards commanders appeared on state TV to praise Rafsanjani, a companion of the Islamic Republic’s founder Ayatollah Ruhollah Khomeini and one of the pillars of the 1979 Islamic Revolution.

But analysts say many are quietly celebrating the departure of one of their biggest domestic critics.

“They’re going to be very happy,” said Ali Ansari, director of the Institute of Iranian Studies at the University of St Andrews. “They’re shedding a lot of crocodile tears.”

ABSOLUTELY PIVOTAL

With Rafsanjani out of the picture the Guards can play a crucial role in determining who becomes the next Supreme Leader by steering Assembly members toward a candidate more sympathetic to their interests, analysts say.

“All of the candidates you hear about who could replace Khamenei are much more hardline and have more radical views,” said Mehdi Khalaji, a former seminarian from Qom who is a senior fellow at the Washington Institute for Near East Policy.

The hardline camp in Iran has defined itself by a deep distrust of Western governments and rigid opposition to internal political reform, whereas Rafsanjani was the leading force behind moderate President Hassan Rouhani’s election win.

The 2015 nuclear agreement between Iran and Western powers was also anathema to hardliners and they have often used the deal, and the economic openings it offered Western companies, to criticize Rouhani’s government.

The question of who could replace Khamenei, 77, was first raised in earnest when he was hospitalized in 2014.

State TV showed Khamenei, who became the Islamic Republic’s second Supreme Leader in 1989, in a hospital bed with a string of officials visiting. Analysts said this was done to help the public recognize that a change at the top was inevitable.

In the event of Khamenei’s death, the Assembly of Experts’ 88 members will hold a closed-door session to push for the candidate of their choice before a final vote is taken. Analysts expect the Revolutionary Guards to play a significant role.

“They’ll be absolutely pivotal,” said Ansari.

PIECES IN PLACE

The Revolutionary Guards first secured an economic foothold after the Iran-Iraq war of the 1980s when Iran’s clerical rulers allowed them to invest in leading Iranian industries.

Their economic influence, authority and wealth grew after former guardsman Mahmoud Ahmadinejad became president in 2005 and has increased since, leading some analysts to say the next Supreme Leader is unlikely to wield the same power as Khamenei.

“They have been putting all the pieces in place for a very forceful show of force if Khamenei passes away,” said Abbas Milani, director of the Iranian Studies program at Stanford University.

“They’re seizing every day one more lever of intelligence power, financial power, police power. Clearly they’re putting their forces in play,” Milani said.

While there is no clear single candidate for the role of Supreme Leader, there are a handful of top contenders.

One possible candidate is Ayatollah Mahmoud Hashemi Shahroudi, 68, a former head of the judiciary who is now deputy head of the Assembly of Experts.

Shahroudi is favored by Khamenei, experts say, and, crucially, is thought to have the backing of the Revolutionary Guards.

Another candidate is Ayatollah Sadeq Amoli Larijani, the 55-year-old current head of the judiciary who has twice been appointed to the position by Khamenei.

Larijani comes from a family of political heavyweights – one brother, Ali, is parliament speaker and another has served in government – but Sadeq is not regarded as a senior cleric and is unlikely to muster much support among the old guard.

A third possible candidate is Mohammad-Taqi Mesbah-Yazdi, a hardline stalwart who has tussled with reformists for years. Mesbah-Yazdi did not get enough votes to keep his seat in the Assembly last year and, at 82, his age will likely be an issue if he is being considered for the top position in the country.

Some analysts say, however, that given the increasing power of the Revolutionary Guards it is perhaps less significant who actually becomes the next Supreme Leader.

“The individual is no longer important,” said Khalaji at the Washington Institute. “When I get asked who’s going to replace Khamenei, I say it’s the Revolutionary Guards.”

(Editing by David Clarke)

U.S. says Navy ship fired warning shots at Iranian vessels

By Idrees Ali

WASHINGTON (Reuters) – A U.S. Navy destroyer fired three warning shots at four Iranian fast-attack vessels after they closed in at a high rate of speed near the Strait of Hormuz, two U.S. defense officials told Reuters on Monday.

The incident, which occurred Sunday and was first reported by Reuters, comes as U.S. President-elect Donald Trump prepares to take office on Jan. 20. In September, Trump vowed that any Iranian vessels that harass the U.S. Navy in the Gulf would be “shot out of the water.”

The officials, speaking on the condition of anonymity, said the USS Mahan established radio communication with the Islamic Revolutionary Guard Corps boats but they did not respond to requests to slow down and continued asking the Mahan questions.

The Navy destroyer fired warning flares and a U.S. Navy helicopter also dropped a smoke float before the warning shots were fired.

The Iranian vessels came within 900 yards (800 meters) of the Mahan, which was escorting two other U.S. military ships, they said.

The IRGC and Trump transition team were not immediately available for comment.

Years of mutual animosity eased when Washington lifted sanctions on Tehran last year after a deal to curb Iran’s nuclear ambitions. But serious differences still remain over Iran’s ballistic missile program as well as conflicts in Syria and Iraq.

One official said similar incidents occur occasionally.

Most recently in August, another U.S. Navy ship fired warning shots towards an Iranian fast-attack craft that approached two U.S. ships.

In January 2016, Iran freed 10 U.S. sailors after briefly detaining them in the Gulf.

The official added that the warning shots fired on Sunday were just one of seven interactions the Mahan had with Iranian vessels over the weekend, but the others were judged to be safe.

(Reporting by Idrees Ali; Editing by Mohammad Zargham, Chizu Nomiyama and Paul Simao)

Quake rattles southern Iran, four Afghan laborers killed: TV

ANKARA (Reuters) – An earthquake shook Iran’s southern Fars province on Friday, killing four Afghan laborers and prompting a search operation for other casualties in the thinly-populated mountainous area, Iranian state TV said.

The shallow magnitude 5.3 earthquake struck at dawn, with its epicenter 53 km southwest (33 miles) of the city of Jahrom, the USGS said. Iranian media said the quake measured 5.1.

“Four Afghans living and working on a farm were killed … (in) Saifabad village near the town of Khonj,” state TV reported.

The governor of Fars province, Mokhtar Abbasi, told state TV that rescuers were searching the quake zone for any other victims in the sparsely populated region.

Three injured people from the village of Chartala were taken to hospital but later discharged, the official IRNA news agency reported.

Iran is criss-crossed by major fault lines and has suffered several devastating earthquakes in recent years, including a 6.6 magnitude quake in 2003 which flattened the southeastern city of Bam and killed more than 25,000 people.

(Writing by Parisa Hafezi; editing by Richard Lough)

Syrian rebels say froze talks on peace conference due to ceasefire violations

A rebel fighter stands on a lookout point with his weapon on the forth day of the truce, on al-Rayhan village front near the rebel held besieged city of Douma, in the eastern Damascus suburb of Ghouta, Syria

AMMAN (Reuters) – Syrian rebel groups said on Monday they had decided to freeze any talks about their possible participation in Syrian peace negotiations being prepared by Moscow in Kazakhstan unless the Syrian government and its Iran-backed allies end what it said were violations of a ceasefire.

In a statement, the rebel groups also said that any territorial advances by the army and Iran-backed militias that are fighting alongside it would end the fragile ceasefire brokered by Russia and Turkey, which back opposing sides, that came into effect on Friday.

“The regime and its allies have continued firing and committed many and large violations,” said the statement signed by the mainly moderate rebel groups operating under the umbrella of the so-called Free Syrian Army (FSA).

The U.N. Security Council on Saturday gave its blessing to the ceasefire deal, which are slated to be followed by peace talks in the Kazakh capital, Astana.

The statement said the main violations were in an area northwest of Damascus in the rebel-held Wadi Barada valley, where government forces and the Iran-backed Lebanese Hezbollah group have been trying to press advances in an ongoing campaign.

Rebels say the army is seeking to recapture the area, where a major spring provides most of Damascus’s water supplies and which lies on a major supply route from Lebanon to the Syrian capital used by Hezbollah.

Like previous Syria ceasefire deals, it has been shaky from the start, with repeated outbreaks of violence in some areas, but has largely held elsewhere.

The rebel groups questioned Russia’s ability to force the Syrian government and their allies to abide by the terms of the ceasefire deal.

(Reporting by Suleiman Al-Khalidi; Editing by Jonathan Oatis)

Russia, Turkey, Iran eye dicing Syria into zones of influence

Russian President Vladimir Putin (R) and Syrian President Bashar al-Assad enter a hall during a meeting at the Kremlin in Moscow, Russia

By Andrew Osborn and Orhan Coskun

MOSCOW/ANKARA (Reuters) – Syria would be divided into informal zones of regional power influence and Bashar al-Assad would remain president for at least a few years under an outline deal between Russia, Turkey and Iran, sources say.

Such a deal, which would allow regional autonomy within a federal structure controlled by Assad’s Alawite sect, is in its infancy, subject to change and would need the buy-in of Assad and the rebels and, eventually, the Gulf states and the United States, sources familiar with Russia’s thinking say.

“There has been a move toward a compromise,” said Andrey Kortunov, director general of the Russian International Affairs Council, a think tank close to the Russian Foreign Ministry.

“A final deal will be hard, but stances have shifted.”

Assad’s powers would be cut under a deal between the three nations, say several sources. Russia and Turkey would allow him to stay until the next presidential election when he would quit in favor of a less polarizing Alawite candidate.

Iran has yet to be persuaded of that, say the sources. But either way Assad would eventually go, in a face-saving way, with guarantees for him and his family.

“A couple of names in the leadership have been mentioned (as potential successors),” said Kortunov, declining to name names.

Nobody thinks a wider Syrian peace deal, something that has eluded the international community for years, will be easy, quick or certain of success. What is clear is that President Vladimir Putin wants to play the lead role in trying to broker a settlement, initially with Turkey and Iran.

That would bolster his narrative of Russia regaining its mantle as a world power and serious Middle East player.

“It’s a very big prize for them if they can show they’re out there in front changing the world,” Sir Tony Brenton, Britain’s former ambassador to Moscow, told Reuters. “We’ve all grown used to the United States doing that and had rather forgotten that Russia used to play at the same level”

BACKROOM DEALS

If Russia gets its way, new peace talks between the Syrian government and the opposition will begin in mid-January in Astana, the capital of Kazakhstan, a close Russian ally.

The talks would be distinct from intermittent U.N.-brokered negotiations and not initially involve the United States.

That has irritated some in Washington.

“So this country that essentially has an economy the size of Spain, that’s Russia, is strutting around and acting like they know what they are doing,” said one U.S. official, who declined to be named because of the subject’s sensitivity.

“I don’t think the Turks and the Russians can do this (political negotiations) without us.”

Foreign and defense ministers from Russia, Turkey and Iran met in Moscow on Dec. 20 and set out the principles they thought any Syria deal should adhere to.

Russian sources say the first step is to get a nationwide ceasefire and then to get talks underway. The idea would then be to get Gulf states involved, then the United States, and at a later stage the European Union which would be asked, maybe with the Gulf states, to pick up the bill for rebuilding.

The three-way peace push is, at first glance, an odd one.

Iran, Assad’s staunchest backer, has provided militia fighters to help Assad, Russia has supplied air strikes, while Turkey has backed the anti-Assad rebels.

Putin has struck a series of backroom understandings with his Turkish counterpart Tayyip Erdogan to ease the path to a possible deal, several sources familiar with the process say.

Moscow got Iran to buy into the idea of a three-way peace push by getting Turkey to drop its demands for Assad to go soon, the same sources said.

“Our priority is not to see Assad go, but for terrorism to be defeated,” one senior Turkish government official, who declined to be named, said.

“It doesn’t mean we approve of Assad. But we have come to an understanding. When Islamic State is wiped out, Russia may support Turkey in Syria finishing off the PKK.”

Turkey views the YPG militia and its PYD political wing as extensions of the outlawed Kurdistan Workers Party (PKK), which has long waged an insurgency in its largely Kurdish southeast.

“Of course we have disagreements with Iran,” said the same Turkish official. “We view some issues differently, but we are coming to agreements to end mutual problems.”

Aydin Sezer, head of the Turkey and Russia Centre of Studies, an Ankara-based think tank, said Turkey had now “completely given up the issue of regime change” in Syria.

Turkey’s public position remains strongly anti-Assad however and Foreign Minister Mevlut Cavusoglu said on Wednesday a political transition with Assad was impossible.

Brenton, Britain’s former ambassador, said Moscow and Ankara had done a deal because Moscow had needed Turkey to get the opposition out of Aleppo and to come to the negotiating table.

“The real flesh in the game the Turks have, and the fear they have, is of an autonomous Kurdistan emerging inside Syria that would have direct implications for them,” he said.

Ankara launched an incursion into Syria, “Operation Euphrates Shield”, in August to push Islamic State out of a 90-km (55-mile) stretch of frontier territory and ensure Kurdish militias did not gain more territory in Syria.

REALPOLITIK

The shifting positions of Moscow and Ankara are driven by realpolitik. Russia doesn’t want to get bogged down in a long war and wants to hold Syria together and keep it as an ally.

Turkey wants to informally control a swathe of northern Syria giving it a safe zone to house refugees, a base for the anti-Assad opposition, and a bulwark against Kurdish influence.

The fate of al-Bab, an Islamic State-held city around 40 km (25 miles) northeast of Aleppo, is also a factor. Erdogan is determined that Turkish-backed rebels capture the city to prevent Kurdish militias from doing so.

Several sources said there had been an understanding between Ankara and Moscow that rebels could leave Aleppo to help take al-Bab.

Iran’s interests are harder to discern, but Ali Akbar Velayati, Iran’s Supreme Leader Ayatollah Ali Khamenei’s top adviser, said Aleppo’s fall might alter a lot in the region.

By helping Assad retake Aleppo, Tehran has secured a land corridor that connects Tehran to Beirut, allowing it to send arms to Hezbollah in Lebanon.

Russian and Western diplomatic sources say Iran would insist on keeping that corridor and on Assad staying in power for now. If he did step down, Tehran would want him replaced with another Alawite, which it sees as the closest thing to Shia Islam.

Iran may be the biggest stumbling block to a wider deal.

Iranian Defence Minister Hossein Dehghan has said Saudi Arabia must not take part in talks because of its stance on Assad – Riyadh wants the Syrian leader to step down.

Scepticism about the prospects for a wider deal abounds.

Dennis Ross, an adviser to Democratic and Republican administrations, now at the Washington Institute for Near East Policy, said he did not think a deal would bring peace to Syria.

“I doubt this will end the war in Syria even after Aleppo,” Ross told Reuters. “Assad’s presence will remain a source of conflict with the opposition.”

(Additional reporting by Maria Tsvetkova in Moscow, Bozorgmehr Sharafedin in Beirut, William Maclean in Dubai, Ece Toksabay, David Dolan, Arshad Mohammed, Phil Stewart and Yeganeh Torbati in Washington; Editing by Janet Lawrence)

Highlights: Russian President Putin’s end-of-year news conference

Journalists listen to Russian President Vladimir Putin during his annual end-of-year news conference in Moscow, Russia, December 23,

MOSCOW (Reuters) – The following are highlights from Russian President Vladimir Putin’s annual end-of-year news conference.

ON U.S. POLITICS

“The party that is called the Democrats has clearly forgotten the original meaning of that name.”

“The use of administrative resources (by the Democrats) is absolutely shameless.”

“Outstanding figures in American history from the ranks of the Democratic Party would likely be turning in their graves. Roosevelt certainly would be.”

“They (the Democrats) are losing on all fronts and looking elsewhere for things to blame. In my view this, how shall I say it, degrades their own dignity. You have to know how to lose with dignity.”

ON WHAT HE WOULD ASK DONALD TRUMP

“It’s hard to say. The U.S. President-elect should first have the opportunity to form his team in an orderly way. Without that, simply having unprepared meetings is not productive. What will the questions be? Questions about the normalization of our relations. Mr Trump did after all say during the election campaign that he thought it right to normalize U.S.-Russia links and said it would not get worse. Because they cannot get any worse, I agree with him on that. We’ll think together about how to make the situation better.”

ON DONALD TRUMP AND THE MILITARY

“In the course of his election campaign he (Trump) spoke about the necessity of strengthening the U.S. nuclear arsenal, and strengthening the armed forces. There’s nothing unusual here. To be honest, I’m a bit surprised by the words of certain other official representatives of the current administration who have for some reason set about proving that the armed forces of the United States are the most powerful in the world. No-one disputed that.”

“If anyone is unleashing an arms race it’s not us … We will never spend resources on an arms race that we can’t afford.”

ON PARTICIPATION IN ELECTIONS IN 2018

“When the time is ripe (I’ll say). I will look at what is happening in the country and in the world, and based on the results of what we have done and what we can do the decision will be made on whether I will participate in upcoming elections for the Russian president.”

ON THE ECONOMY

“(Economic) growth is happening thanks to certain sectors of the economy – machine building, chemicals, manufacturing and agriculture.”

“We saw some economic growth in November … This year we will probably have minus 0.5-0.6 percent (economic growth).”

ON INFLATION

“This year (inflation) will be significantly less than 6 percent … most likely in the region of 5.5 percent – this is a record low inflation rate, and gives us cause to expect that we will be able to reach our target and very soon get to inflation of 5 percent and then 4 percent.”

ON THE BUDGET DEFICIT

“The budget deficit will be a bit bigger .. 3.7 percent. In my view this is an absolutely acceptable amount because, among other reasons, we have preserved a positive external trade balance – more than 70 billion dollars (and) we have preserved our reserves … the central bank’s gold and forex reserves have even grown, and are now a little over 385 (billion dollars). Judging by that measure everything is fine. It’s a good safety margin.”

ON OPEC AND OIL PRICES

“We think that in the second half of 2017 the surplus of oil in the market will disappear and the oil price will stabilize. We are counting on a stabilization (of prices) at today’s level.”

“It (Russian oil production cuts agreed with OPEC) will be a smooth reduction that will hardly affect our overall output. This is perfectly acceptable to us, and we are counting on a rise in prices, which has already happened … a difference in the oil price of $10 will mean extra revenues to the budget of 1.75 trillion rubles ($28.65 billion) and an extra 750 billion rubles of income for oil companies, despite lower output. So at the end of the day everyone ends up winning.”

ON DOPING

“In this area transparency is absolutely essential … Undoubtedly there is a certain political element in all these issues. Sport should be cleansed, along with culture, of any sort of politics. Sport and culture are things that should unite people and not divide them.”

ON UKRAINE AND CRIMEA

“I am sure that sooner or later there will be a normalization of relations with Ukraine, and it (a bridge between Russian and Crimea) will be very beneficial to the development of Russia-Ukraine relations and future commercial and humanitarian links.”

ON PENSIONS

“All the necessary money is in place next year so we can from Feb.1 increase pensions in line with the rate of inflation in 2016.”

ON ALEPPO

“The president of Turkey and the leaders of Iran (also) played a huge role in this (managing the situation around Aleppo). I don’t know if this will sound immodest, but without our participation it would have been impossible.”

($1 = 61.0790 rubles)

(Reporting by Moscow Newsroom)