Russia’s Putin, despite sanctions, still hopes for better U.S. ties

MOSCOW (Reuters) – Russian President Vladimir Putin still hopes to pull Moscow’s ties with Washington out of a deep crisis, but nobody will go into mourning if this ambition is not reciprocated by the United States, the Kremlin said on Monday.

Moscow is bracing itself for a slew of new U.S. sanctions despite Putin meeting U.S. President Donald Trump at a summit in Helsinki in July, an encounter both sides said went well.

Initial Russian triumphalism after the summit turned sour however as anger over what some U.S. lawmakers saw as an over deferential Trump performance galvanized a new sanctions push.

The U.S. State Department has said it will impose fresh sanctions by the end of this month, while bi-partisan legislation from senators calls for other curbs to be widened.

Moscow is also bracing itself for potential U.S. measures designed to frustrate its Nord Stream 2 gas pipeline project.

Kremlin spokesman Dmitry Peskov told reporters on a conference call that the new U.S. sanctions proposals were unfriendly, illegal and would harm world trade.

“Let’s wait and see what will happen, if anything,” said Peskov, saying any Russian response would be dictated by Russia’s own national interests.

“The Russian president is hoping for the best and, despite all this, wants to pull our bilateral ties out of the deep crisis they are in. He (Putin) still has that desire. But at the same time, nobody plans to go into mourning if our approach is not reciprocated by Washington.”

(Reporting by Tom Balmforth and Polina Ivanova; Editing by Andrew Osborn)

Joy, disbelief as Korean families separated by war meet after 65 years

North and South Korean family members meet during a reunion at North Korea's Mount Kumgang resort, near the demilitarized zone (DMZ) separating the two Koreas, North Korea, August 20, 2018. Yonhap via REUTERS

By Hyonhee Shin

SEOUL (Reuters) – About 90 families from North and South Korea wept and embraced on Monday as the neighbors held their first reunion events in three years for relatives wrenched apart by the Korean War for more than six decades.

The brief reunions are set to total just 11 hours over the next three days in the North’s tourist resort of Mount Kumgang after the neighbors renewed exchanges this year following a standoff over Pyongyang’s nuclear and missile programs.

North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed to the reunion events at a summit in April.

About 330 South Koreans from 89 families, many in wheelchairs, embraced 185 separated relatives from the North with tears, joy, and disbelief. Some struggled to recognize family not glimpsed in more than 60 years.

A man selected as a participant for a reunion shows pictures of his deceased mother and little brothers living in North Korea, at a hotel used as a waiting place in Sokcho, South Korea, August 19, 2018. REUTERS/Kim Hong-Ji

A man selected as a participant for a reunion shows pictures of his deceased mother and little brothers living in North Korea, at a hotel used as a waiting place in Sokcho, South Korea, August 19, 2018. REUTERS/Kim Hong-Ji

“How are you so old?” Kim Dal-in, 92, asked his sister, Yu Dok, after gazing at her briefly in silence.

“I’ve lived this long to meet you,” replied the 85-year-old, wiping away tears as she clasped a photograph of her brother in his youth.

Siblings Kim Gyong Sil, 72 and Gyong Yong, 71, wearing the traditional hanbok dress, colored pale violet, stood nervously staring at the entrance, awaiting their 99-year-old mother Han Shin-ja. They could not speak for minutes, wailed loudly and rubbed their cheeks and hands.

“When I fled home in the war…,” Han said, faltering as she choked with emotion and left her sentence incomplete.

The separated families are victims of a decades-long political gridlock since the 1950-53 war ended in a truce rather than a peace treaty, with ties increasingly strained as Pyongyang rapidly stepped up its weapons programs.

More than 57,000 South Korean survivors have registered for the family reunions, which usually end in painful farewells.

For years, Seoul has called for regular meetings between separated families, including the use of video conferences, but the program often fell victim to fragile ties.

At his historic June summit with U.S. President Donald Trump in June, Kim pledged to abandon his country’s nuclear programs if Washington provided security guarantees, but the two sides have since struggled to agree how to reach that goal.

The reunions should be scaled up sharply, held regularly, and include exchanges of visits and letters, said Moon, himself a member of a separated family from the North’s eastern port city of Hungnam.

“It is a shame for both governments that many of the families have passed away without knowing whether their lost relatives were alive,” he told presidential secretaries at a meeting.

Lee Geum-seom, who has been selected as a participant for a reunion, is helped by volunteers as she arrives at a hotel used as a waiting place in Sokcho, South Korea, August 19, 2018. REUTERS/Kim Hong-Ji

Lee Geum-seom, who has been selected as a participant for a reunion, is helped by volunteers as she arrives at a hotel used as a waiting place in Sokcho, South Korea, August 19, 2018. REUTERS/Kim Hong-Ji

“Expanding and accelerating family reunions is a top priority.”

Ninety-three families from both sides of the border had been initially due to hold a three-day gathering from Monday, but four South Korean members canceled at the last minute because of poor health, the Red Cross said.

From Thursday, 88 more groups of relatives will meet, comprised of 469 individuals from the South and 128 from the North, Seoul’s Unification Ministry says.

For Lee Jong-shik, 81, Monday’s reunion was a hard-won second chance to track down his younger brother, Ri Chong Song, after the failure of a 2009 effort when a different individual showed up, to the dismay of the family from the South.

“I tried so hard, too, searching for you for seven years,” Ri told his brother.

The participants included the families of a prisoner of war and five people abducted by North Korean authorities during the conflict, though the six South Koreans they had hoped to meet had died.

The reunions, which began in 1985, can be a traumatic experience, say survivors, who know they are unlikely to see their relatives again since many are 80 or older and first-timers typically get priority for visits.

About 132,600 individuals were listed as separated families by the end of July. Of the 57,000 survivors, 41.2 percent are in their 80s and 21.4 percent in their 90s, government data show.

The oldest South Korean participant is 101-year-old Baek Seong-gyu, who was reunited with his daughter-in-law and granddaughter.

“Most participants are elderly and many suffer from hypertension, diabetes and have underlying medical conditions,” said physician Han Sang-jo. “Ahead of the reunions, we are thoroughly checking their health.”

Many brought gifts of clothing, medicine, and food for their North Korean relatives since anything deemed extravagant by Pyongyang was unlikely to pass muster.

Moon Hyun-sook, 91, said she put together clothes, cosmetics, and medicine for her two sisters, younger than she is by 12 and 26 years.

“Whenever I saw pretty clothes, I always thought how cute they would look in them,” she said.

(Reporting by Hyonhee Shin and Joyce Lee in SEOUL, Hyun Young Yi in SOKCHO, and Joint Press Corps; Editing by Soyoung Kim and Clarence Fernandez)

Turkey’s lira weakens 4 percent, Trump says won’t take pastor’s detention ‘sitting down’

A street vendor sells food on a main street in central Ankara, Turkey August 17, 2018. REUTERS/Umit Bektas

By Daren Butler, David Dolan and Humeyra Pamuk

ISTANBUL (Reuters) – Turkey’s battered lira weakened 3 percent on Friday after a Turkish court rejected an American pastor’s appeal for release, drawing a stiff rebuke from President Donald Trump, who said the United States would not take the detention “sitting down”.

The case of Andrew Brunson, an evangelical Christian missionary from North Carolina who has lived in Turkey for two decades, has become a flashpoint between Washington and Ankara and accelerated a widening currency crisis.

The lira has lost nearly 40 percent of its value against the dollar this year as investors fret about President Tayyip Erdogan’s influence over monetary policy.

Heavy selling in recent weeks has spread to other emerging market currencies and global stocks and deepened concerns about the economy, particularly Turkey’s dependence on energy imports and whether foreign-currency debt poses a risk to banks.

Borrowing costs may rise further after both Moody’s and Standard Poor’s ratings agencies cut Turkey’s sovereign credit ratings deeper into “junk” territory late on Friday.

“They should have given him back a long time ago, and Turkey has in my opinion acted very, very badly,” Trump told reporters at the White House, referring to Brunson. “So, we haven’t seen the last of that. We are not going to take it sitting down. They can’t take our people.”

Trump’s comments came after a court in Izmir province rejected an appeal to release Brunson from house arrest, saying evidence was still being collected and the pastor posed a flight risk, according to a copy of the court ruling seen by Reuters.

Brunson is being held on terrorism charges, which he denies. Trump, who counts evangelical Christians among his core supporters, has increasingly championed the pastor’s case.

It was not immediately clear what additional measures, if any, Trump could be considering. U.S. Treasury Secretary Steven Mnuchin told Trump on Thursday that more sanctions were ready if Brunson were not freed.

The United States and Turkey have imposed tit-for-tat tariffs in an escalating attempt by Trump to induce Erdogan into giving up the pastor. Erdogan has cast the tariffs, and the lira’s sell-off, as an “economic war” against Turkey.

The lira last traded at 6.0100 to the dollar at 2159 GMT, 3 percent weaker after tumbling as much as 7 percent earlier. Turkey’s dollar bonds fell, while the cost of insuring exposure to Turkish debt rose.

As the row deepens, Turkey has sought to improve strained ties with European allies. In a telephone call on Friday, Finance Minister Berat Albayrak and his French counterpart Bruno Le Maire discussed U.S. sanctions against Turkey and cooperation between their countries, Albayrak’s ministry said.

SPEED-BUMPS

“Diplomatic negotiations hit speed-bumps and that’s not unusual in these kinds of situations,” said Jay Sekulow, a personal attorney for Trump who is also representing Brunson’s family. “We remain hopeful there will be a prompt resolution. Having said that, we fully support the president’s approach.”

Whatever action the United States takes looks likely to cause more pain for Turkish assets.

People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer

People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer

“There has been no improvement in relations with the U.S. and additional sanctions may be on the horizon,” said William Jackson of Capital Economics in a note to clients, adding that the lira could see a downward trend in 2019 and beyond.

Turkey’s banking watchdog has taken steps to stabilize the currency, limiting futures transactions for offshore investors and lowering limits on swap transactions. On Friday, it further broadened those caps.

But some economists have called for more decisive moves.

Turkey and its firms face repayments of nearly $3.8 billion on foreign currency bonds in October, Societe Generale has calculated. It estimates Turkey’s short-term external debt at $180 billion and total external debt at $460 billion – the highest in emerging markets.

Companies that for years have borrowed abroad at low-interest rates have seen their cost of servicing foreign debt rise by a quarter in lira terms in two months.

After each downgrading Turkey by one notch, S&P said it expected a recession next year while Moody’s said a weakening of Turkey’s public institutions had made policymaking less predictable.

Fitch Ratings had earlier said the absence of an orthodox monetary policy response to the lira’s fall, and the rhetoric of Turkish authorities, had “increased the difficulty of restoring economic stability and sustainability”.

DEEP CONCERNS

Albayrak, Erdogan’s son-in-law, told investors on Thursday that Turkey would emerge stronger from the currency crisis, insisting its banks were healthy and signaling it could ride out the dispute with Washington.

Economists gave Albayrak’s presentation a qualified welcome and the lira initially found some support, helped by Qatar’s pledge to invest $15 billion in Turkey.

Deep concerns remain about the potential for damage to the economy, however. Turkey is dependent on imports, priced in hard currency, for almost all of its energy needs.

Erdogan has remained defiant, urging Turks to sell their gold and dollars for lira. But foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier, central bank data showed.

Turkish markets will be closed from midday on Monday for the rest of the week for the Muslim Eid al-Adha festival.

(Additional reporting by Ece Toksabay, Tuvan Gumrukcu, and Nevzat Devranoglu in Ankara; Karin Strohecker and Claire Milhench in London; Jeff Mason and Karen Freifeld in Washington; Editing by Catherine Evans and James Dalgleish)

South Korea’s diehard Trump supporters hail ‘guardian of liberty’

A member of a conservative right-wing civic group attends an anti-North Korea and pro-U.S. protest in Seoul, South Korea, August 4, 2018. REUTERS/Kim Hong-Ji

By Jeongmin Kim and Minwoo Park

SEOUL (Reuters) – Every time an image of U.S. President Donald Trump appears on TV in South Korea, 69-year-old Vietnam War veteran Chung Seung-jin solemnly salutes.

The U.S. flag Chung keeps in his home in Seoul gets similar respect every morning.

Vietnam War veteran Chung Seung-jin poses for photographs after an interview with Reuters at his home in Suwon, South Korea, July 31, 2018. REUTERS/Kim Hong-Ji

Vietnam War veteran Chung Seung-jin poses for photographs after an interview with Reuters at his home in Suwon, South Korea, July 31, 2018. REUTERS/Kim Hong-Ji

“I salute President Trump and the U.S. flag every day to show how much I trust him,” Chung told Reuters as he attended a recent anti-North Korea rally in the sweltering summer heat in downtown Seoul.

“I salute to pay respect to Mr. Trump, supporting his reign as the leader of the world and guardian of liberty.”

For many South Korean conservatives who liked Trump’s initial tough talk against North Korea’s Kim Jong Un, his abrupt embrace of the autocratic leader at their historic Singapore summit in June was nothing short of a betrayal.

Trump, who ridiculed Kim as “rocket man” last year, has since called the North Korean leader “funny” and “smart” and even praised his ability to retain his authoritarian grip on power.

“Trump said Kim is an ‘amazing leader’, thus legitimizing him. This makes us, the patriotic citizens, feel betrayed,” said Cho Won-jin, leader of the right-wing Korean Patriots’ Party.

Members of a conservative right-wing civic group attend an anti-North Korea and pro-U.S. protest in Seoul, South Korea, August 4, 2018. REUTERS/Kim Hong-Ji

Members of a conservative right-wing civic group attend an anti-North Korea and pro-U.S. protest in Seoul, South Korea, August 4, 2018. REUTERS/Kim Hong-Ji

But for a colorful handful of Trump supporters who gather regularly on the streets of Seoul to call for aggressive action against North Korea, faith in the U.S. president is unshaken.

“I have saluted Trump today as always with utmost sincerity,” said 76-year-old demonstrator Lee Yoon-jo, nodding at a large picture of a beaming Trump at a demonstration in downtown Seoul.

As he saluted, demonstrators held giant U.S. and South Korean flags in front of the U.S. embassy, alongside banners in Korean and English reading “The United States is a thankful brother country that has been devoted to a free Korea”.

Gratitude for U.S. support in the 1950-1953 Korean War, as well as anti-communist rhetoric used by the South’s military rulers in the 1970s still resonate with many older South Koreans, said analyst Jeong Chan-dae of Sungkonghoe University.

“To these elderly conservatives, the U.S. is more than just an ally and more of a ‘savior’,” he said.

Holding a faded black-and-white photograph from his time he fought alongside American allies in the Vietnam War in 1968, Chung said: “Without the U.S., South Korea would never have been able to exist.”

Trump and Kim met in Singapore in June, where they announced an agreement in which Kim reaffirmed his “unwavering” commitment to denuclearize. Little progress on that front has been made in the weeks since.

A Gallup Korea poll conducted just after the summit found 48 percent of South Korean conservatives thought the meeting went well, compared to 79 percent of progressives.

Standing on a corner in Seoul, surrounded by flags and anti-North Korean banners, the small knot of demonstrators are unfazed by the shift in tone, noting that Trump could still resort to “regime change” if a denuclearisation deal doesn’t pan out.

“President Trump has always masterfully guided and protected South Korea and the free world and always will,” Lee said, again giving a military salute. “Thank you, Mr. President.”

(Reporting by Jeongmin Kim and Minwoo Park; Writing by Josh Smith; Editing by Nick Macfie)

Iran naval drills underway amid tensions with U.S.

A staff member removes the Iranian flag from the stage after a group picture with foreign ministers and representatives of the U.S., Iran, China, Russia, Britain, Germany, France and the European Union during the Iran nuclear talks at the Vienna International Center in Vienna, Austria July 14, 2015. To match Analysis USA-ELECTION/IRAN

By Phil Stewart

WASHINGTON (Reuters) – The United States believes Iran has started carrying out naval exercises in the Gulf, apparently moving up the timing of annual drills amid heightened tensions with Washington, U.S. officials told Reuters on Thursday.

One U.S. official, speaking on condition of anonymity, said possibly more than 100 vessels were involved in the drills, including small boats. A second official expected the drill could be wrapped up this week.

Iran has been furious over U.S. President Donald Trump’s decision to pull out of an international nuclear deal and reimpose sanctions on Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran’s vital oil exports.

The U.S. military’s Central Command on Wednesday confirmed it has seen an increase in Iranian naval activity, including in the Strait of Hormuz, a strategic waterway for oil shipments that Iran’s Revolutionary Guards have threatened to block.

“We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways,” said Navy Captain Bill Urban, the chief spokesman at Central Command, which oversees U.S. forces in the Middle East.

Central Command did not update its guidance on Thursday.

A third official said the Iranian naval operations did not appear to be affecting commercial maritime activity.

U.S. officials, speaking to Reuters on condition of anonymity, said the drills appeared designed to send a message to Washington, which is intensifying its economic and diplomatic pressure on Tehran but so far stopping short of using the U.S. military to more aggressively counter Iran and its proxies.

But Iran did not appear interested in drawing attention to them. Iranian authorities have yet to comment on them and several officials contacted by Reuters declined to comment.

Trump’s policies are already putting significant pressure on the Iranian economy, although U.S. intelligence suggests they may ultimately rally Iranians against the United States and strengthen Iran’s hardline rulers, officials say.

Iran’s currency plumbed new depths this week ahead of Aug. 7, when Washington is due to reimpose a first lot of sanctions following Trump’s withdrawal from the 2015 nuclear deal.

Protests have broken out in Iran since the beginning of the year over high prices, water shortage, power cuts and alleged corruption.

On Tuesday, hundreds of people rallied in cities including Isfahan, Karaj, Shiraz and Ahvaz to protest high inflation caused in part by the weak rial.

(Reporting by Phil Stewart in Washington; additional reporting by Parisa Hafezi in Ankara; Editing by James Dalgleish)

U.S. detects new activity at North Korea factory that built ICBMs

A satellite image shows the Sanumdong missile production site in North Korea on July 29, 2018. Planet Labs Inc/Handout via REUTERS

By David Brunnstrom

WASHINGTON (Reuters) – U.S. spy satellites have detected renewed activity at the North Korean factory that produced the country’s first intercontinental ballistic missiles capable of reaching the United States, a senior U.S. official said on Monday, in the midst of talks to compel Pyongyang to give up its nuclear arms.

Photos and infrared imaging indicate vehicles moving in and out of the facility at Sanumdong, but do not show how advanced any missile construction might be, the official told Reuters on condition of anonymity because the intelligence is classified.

The Washington Post reported on Monday that North Korea appeared to be building one or two new liquid-fueled intercontinental ballistic missiles at the large research facility on the outskirts of Pyongyang, citing unidentified officials familiar with intelligence reporting.

According to the U.S. official who spoke to Reuters, one photo showed a truck and covered trailer similar to those the North has used to move its ICBMs. Since the trailer was covered, it was not possible to know what, if anything, it was carrying.

The White House said it did not comment on intelligence. A senior official at South Korea’s presidential office said U.S. and South Korean intelligence agencies are closely looking into various North Korean movements, declining specific comment.

The evidence obtained this month is the latest to suggest ongoing activity in North Korea’s nuclear and missile facilities despite talks with the United States and a June summit between North Korean leader Kim Jong Un and U.S. President Donald Trump.

Trump declared soon afterward that North Korea no longer posed a nuclear threat. Kim committed in a broad summit statement to work toward denuclearization, but Pyongyang has offered no details as to how it might go about that and subsequent talks have not gone smoothly.

It was not the first time U.S. intelligence clashed with the president’s optimism.

In late June, U.S. officials told U.S. media outlets that intelligence agencies believed North Korea had increased production of fuel for nuclear weapons and that it did not intend to fully give up its nuclear arsenal.

U.S. Secretary of State Mike Pompeo told the U.S. Senate Foreign Relations Committee last week that North Korea was continuing to produce fuel for nuclear bombs despite its pledge to denuclearize. But he insisted the Trump administration was still making progress in its talks with Pyongyang.

Joel Wit, a former State Department negotiator and founder of 38 North, a North Korea monitoring project, said it was unrealistic to expect North Korea to stop its programs “until the ink is dry on an agreement.”

That was the case with U.S. negotiations with the Soviet Union during the Cold War, and more recently with Iran, “which continued to build more centrifuges capable of producing nuclear material even as it negotiated with the United States to limit those capabilities,” Wit said.

The Sanumdong factory produced two Hwasong-15 ICBMs, North Korea’s longest-range missiles, but the U.S. official noted that Pyongyang still had not tested a reliable re-entry vehicle capable of surviving a high-velocity trip through the Earth’s atmosphere and delivering a nuclear warhead.

It is possible, the official said, that any new missiles the North is building may be for further testing of such vehicles and of more accurate guidance systems.

“They seem to have figured out the engines, but not all the higher-tech stuff, and that might be what this is about,” the official said.

“What’s more, a liquid-fueled ICBM doesn’t pose nearly the threat that a solid-fueled one would because they take so long to fuel, and that’s something we almost certainly could see in time to abort a launch, given our assets in the vicinity.”

(Additional reporting by David Alexander and Joyce Lee; Writing by Mary Milliken; Editing by Peter Cooney)

Trump threatens U.S. government shutdown over border wall

FILE PHOTO: U.S. President Donald Trump at the Rose Garden of the White House in Washington, U.S., July 25, 2018. REUTERS/Joshua Roberts/File Photo

By Doina Chiacu

WASHINGTON (Reuters) – U.S. President Donald Trump said on Sunday he would allow the federal government to shut down if Democrats do not fund his border wall and back immigration law changes, betting that maintaining a hard line will work in Republicans’ favor in November congressional elections.

However, a disruption in federal government operations could backfire on Trump if voters blame Republicans, who control Congress, for the interruption in services.

“I would be willing to ‘shut down’ government if the Democrats do not give us the votes for Border Security, which includes the Wall! Must get rid of Lottery, Catch & Release etc. and finally go to system of Immigration based on MERIT! We need great people coming into our Country!” Trump said on Twitter.

Americans are divided along party lines on immigration, and 81 percent of Republicans approved Trump’s handling of the issue, according to a Reuters/Ipsos poll released this month.

The Republican president has threatened a shutdown several times since taking office in 2017 in a bid to get immigration priorities in congressional spending bills, especially funding for a wall along the southern U.S. border. Trump has asked for $25 billion to build the wall.

“I don’t think it would be helpful, so let’s try to avoid it,” Republican Senator Ron Johnson, chairman of the Senate Homeland Security Committee, said on CBS’ “Face the Nation.”

Congress must agree on a spending measure to fund the government by a Sept. 30 deadline.

Although Republicans control both the U.S. Senate and House of Representatives, disagreements between moderates and conservatives in the party have impeded a speedy legislative fix.

Standoffs over spending levels and immigration led to a three-day government shutdown, mostly over a weekend, in January and an hours-long shutdown in February.

The House in June rejected an immigration bill favored by conservative Republicans.

The Republican president has made tougher immigration laws a centerpiece of his administration, from the first ill-fated travel ban on people from predominantly Muslim nations to the current battle raging over the separation of illegal immigrant children from their parents at the U.S.-Mexico border.

A federal judge on Friday urged the U.S. government to focus on finding deported immigrant parents whose children remain in the United States.

(Reporting by Doina Chiacu; Additional reporting by Sarah N. Lynch; Editing by Lisa Shumaker)

Trump thanks Kim as North Korea transfers remains of missing U.S. soldiers

A soldier carries a casket containing the remains of a U.S. soldier who was killed in the Korean War during a ceremony at Osan Air Base in Pyeongtaek, South Korea, July 27, 2018. REUTERS/Kim Hong-Ji/Pool

By Joyce Lee and Eric Beech

SEOUL/WASHINGTON (Reuters) – North Korea transferred 55 small, flag-draped cases carrying the suspected remains of U.S. soldiers killed in the Korean War on Friday, officials said, a first step in implementing an agreement reached in a landmark summit in June.

The repatriation of the remains missing in the 1950-53 conflict is seen as a modest diplomatic coup for U.S. President Donald Trump as it was one of the agreements reached during his meeting with North Korean leader Kim Jong Un in Singapore aimed primarily at securing the denuclearization of the North.

“After so many years, this will be a great moment for so many families. Thank you to Kim Jong Un,” Trump wrote on Twitter.

A White House statement earlier said: “We are encouraged by North Korea’s actions and the momentum for positive change.”

A U.S. military transport plane flew to an airfield in North Korea’s northeastern city of Wonsan to bring the remains to Osan air base in South Korea, the White House statement said.

Soldiers in dress uniforms with white gloves were seen slowly carrying 55 small cases covered with the blue-and-white U.N. insignia, placing them one by one into silver vans waiting on the tarmac in Osan.

A U.N. honor guard carries a box containing remains believed to be from American servicemen killed during the 1950-53 Korean War after it arrived from North Korea, at Osan Air Base in Pyeongtaek, South Korea, Friday, July 27, 2018. Ahn Young-joon/Pool via Reuter

A U.N. honor guard carries a box containing remains believed to be from American servicemen killed during the 1950-53 Korean War after it arrived from North Korea, at Osan Air Base in Pyeongtaek, South Korea, Friday, July 27, 2018. Ahn Young-joon/Pool via Reuters

Straight-backed officers looked on next to the flags of the United States, South Korea and the United Nations.

A formal repatriation ceremony would be held at Osan on Wednesday, the White House said.

The remains would then be flown to Hawaii for further processing under the U.S. Defense POW/MIA Accounting Agency, the U.N. Command said in a statement.

The transfer of the remains coincided with the 65th anniversary of the 1953 armistice that ended fighting between North Korean and Chinese forces on one side and South Korean and U.S.-led forces under the U.N. Command on the other. The two Koreas are technically still at war because a peace treaty was never signed.

Kim paid tribute to the North’s Korean War “martyrs” and to Chinese soldiers killed in the conflict, state media said.

More than 7,700 U.S. troops who fought in the Korean War remain unaccounted for, with about 5,300 of those lost in what is now North Korea.

U.S. soldiers salute to vehicles transporting the remains of 55 U.S. soldiers who were killed in the Korean War at Osan Air Base in Pyeongtaek, South Korea, July 27, 2018. REUTERS/Kim Hong-Ji/Pool

U.S. soldiers salute to vehicles transporting the remains of 55 U.S. soldiers who were killed in the Korean War at Osan Air Base in Pyeongtaek, South Korea, July 27, 2018. REUTERS/Kim Hong-Ji/Pool

GOODWILL GESTURE

The pledge to transfer war remains was seen as a goodwill gesture by Kim at the June summit and, while it has taken longer than some U.S. officials had hoped, the handover will rekindle hopes for progress in nuclear talks.

Kim committed in a broad summit statement to work toward denuclearization but Pyongyang has offered no details.

South Korea welcomed the return of the remains, calling it “meaningful progress that could contribute to fostering trust” between Pyongyang and Washington.

The two Koreas agreed to hold general-level military talks on Tuesday to discuss ways to implement their own summit in April in which they vowed to defuse tensions, Seoul’s defense ministry said on Friday.

South Korea also said it plans to cut the number of troops from 618,000 to 500,000 by 2020 and the number of generals from 436 to 360 as part of military reforms.

The plan comes amid a thaw in relations between the two Koreas and days after the South pledged to reduce guard posts and equipment along the demilitarized zone on its border with the North.

It would spend 270.7 trillion won ($241.8 billion) on the reforms from 2019-23, which translates into a 7.5 percent rise in its annual defense budget, the ministry said in a statement.

Pyongyang has renewed calls for a declaration of the end of the Korean War, calling it the “first process for peace” and an important way Washington can add heft to security guarantees it has pledged in return for North Korea giving up its nuclear weapons.

The U.S. State Department says Washington is committed to building a peace mechanism to replace the armistice when North Korea has denuclearised.

U.S. Secretary of State Mike Pompeo told a Senate hearing on Wednesday North Korea was continuing to produce fuel for nuclear bombs despite of its pledge to denuclearize, even as he argued that the United States was making progress in talks with Pyongyang.

Pompeo said North Korea had begun to dismantle a missile test site, something Kim also promised in Singapore, and called it “a good thing, steps forward”. However, he said Kim needed to follow through on his summit commitments to denuclearize.

The U.N. Security Council has unanimously boosted sanctions on North Korea since 2006 in a bid to choke off funding for Pyongyang’s nuclear and ballistic missile programs, banning luxury goods said to include recreational sports equipment.

The United States has blocked a request by the International Olympic Committee to transfer sports equipment to North Korea so its athletes can participate in the Olympic Games, United Nations diplomats said on Thursday.

Before Friday’s transfer of remains, the United States and North Korea had worked on so-called joint field activities to recover Korean War remains from 1996-2005. Washington halted those operations, citing concerns about the safety of its personnel as Pyongyang stepped up its nuclear program.

More than 400 caskets of remains found in North Korea were returned to the United States between the 1990s and 2005, with the bodies of some 330 other Americans also accounted for, according to the Defense POW/MIA Accounting Agency.

Pentagon officials have said discussions with North Korea have included resuming field operations in the North to recover remains.

The program helped bring in vital hard currency to North Korea, which has been under U.S.-led sanctions for decades. However, reviving it could complicate U.S. efforts to persuade countries around the world to maintain economic pressure on Pyongyang over its ballistic and nuclear programs.

(Reporting by Eric Beech and David Brunnstrom in WASHINGTON and Joyce Lee in SEOUL; Additional reporting by Hyonhee Shin in SEOUL; Editing by Mohammad Zargham, Paul Tait and Nick Macfie)

U.S. Christian pastor leaves Turkish prison after court ruling

U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey July 25, 2018. Demiroren News Agency, DHA via

By Ezgi Erkoyun and Daren Butler

ISTANBUL (Reuters) – A U.S. Christian pastor on trial in Turkey on terrorism charges left prison on Wednesday after a court ruled he should be transferred to house arrest, a step that could help reduce tension between the NATO allies.

Andrew Brunson, who has worked in Turkey for more than 20 years and has been detained for the last 21 months, was escorted out of prison by officials in the coastal city of Izmir, live television footage showed. He departed in a convoy of cars.

Brunson, who is from North Carolina, was detained in October 2016 and charged with helping the group which Ankara says was behind a failed military coup earlier that year.

His lawyer Ismail Cem Halavurt said Brunson has to wear an electronic ankle bracelet and is banned from leaving the country.

The same court rejected a week ago a call by Brunson’s defense for his release. The state-owned Anadolu news agency said the court had decided, after re-evaluating the case, that he could leave prison on health grounds and because he would be under effective judicial control.

Brunson’s detention deepened a rift between NATO allies Washington and Ankara, who are also at odds over the Syrian war and Turkey’s plan to buy missile defenses from Russia.

A source in the United States familiar with the developments said the sudden shift came a day before U.S. Vice President Mike Pence had been set to unveil a harsh new policy on Turkey.

The source, who was not authorized to speak publicly about the matter, said U.S. and Turkish officials had been working on a deal that would lead to Brunson’s release, with Washington expecting him to be freed at the trial last week.

U.S. officials had been under the impression that the deal was in place, the source said, adding that when Brunson was not released, Pence spoke with President Donald Trump and the two agreed harsh new policy measures were needed to force the issue.

Pence spoke by phone on Wednesday with Brunson, who expressed gratitude for the help from Trump and his top officials in securing his move from prison, the source said.

“LONG OVERDUE NEWS

Brunson was accused of helping supporters of Fethullah Gulen, the U.S.-based cleric who Turkish authorities say masterminded the coup attempt against President Tayyip Erdogan in which 250 people were killed. He was also charged with supporting outlawed PKK Kurdish militants.

The pastor, who denies the charges, faces up to 35 years in jail if found guilty.

U.S. Secretary of State Mike Pompeo welcomed what he said was the “long overdue news” of Brunson’s transfer, but said it was not enough. “We have seen no credible evidence against Mr. Brunson, and call on Turkish authorities to resolve his case immediately in a transparent and fair manner,” he said on Twitter.

Financial markets took the transfer order as a positive, seeing in it the potential for improvement in ties between Ankara and Washington.

The Turkish lira strengthened to 4.8325 against the dollar from 4.8599 before the report. Shares of Halkbank, whose former deputy general manager was convicted in January of evading U.S. sanctions on Iran, jumped 12 percent.

Erdogan has previously linked Brunson’s fate to that of the Muslim cleric Gulen, whose extradition from the United States has been a long-held demand of Turkish authorities. Gulen denies any involvement in the coup bid.

Trump said in a tweet last week that Brunson was being held hostage and that Erdogan should “do something to free this wonderful Christian husband & father”.

The U.S. Senate passed a bill last month including a measure that prohibits Turkey from buying F-35 Joint Strike Fighter jets because of Brunson’s imprisonment and Turkey’s purchase of Russia’s S-400 air defence system.

(Additional reporting by Omer Berberoglu in Istanbul; Tuvan Gumrukcu in Ankara; Roberta Rampton and Doina Chiacu in Washington; Writing by Dominic Evans and David Dolan; editing by David Stamp and Mark Heinrich)

Trump tells Iran ‘never, ever threaten’ U.S. or suffer consequences

FILE PHOTO: U.S. President Donald Trump speaks about his summit meeting with Russian President Vladimir Putin as he begins a meeting with members of the U.S. Congress at the White House in Washington, July 17, 2018. REUTERS/Leah Millis/File Photo

By Warren Strobel and Parisa Hafezi

WASHINGTON/ANKARA (Reuters) – U.S. President Donald Trump told Iran it risked dire consequences “the like of which few throughout history have suffered before” if the Islamic Republic made more threats against the United States.

His words, spelled out in capital letters in a late night Twitter message, came hours after Iranian President Hassan Rouhani told Trump that hostile policies toward Tehran could lead to “the mother of all wars.”

Despite the heightened rhetoric, both sides have reasons to want to avoid starting a conflict that could easily escalate.

Trump’s comments come in the context of a barrage of speeches and online communications meant to foment unrest and pressure Iran to end its nuclear program and its support of militant groups, according to U.S. officials.

Iran has faced increased U.S. pressure and possible sanctions since Trump’s decision in May to withdraw the United States from a 2015 international agreement over Iran’s nuclear program.

In his message directed at Rouhani, Trump wrote: “Never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history have ever suffered before. We are no longer a country that will stand for your demented words of violence and death. Be cautious!”.

Earlier on Sunday, Rouhani had told a gathering of Iranian diplomats: “Mr Trump, don’t play with the lion’s tail, this would only lead to regret.”

“America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars,” said Rouhani, quoted by the state news agency IRNA.

Rouhani left open the possibility of peace between the two countries, at odds since the 1979 Islamic Revolution. But Iran’s most powerful authority Supreme Leader Ayatollah Ali Khamenei said on Saturday negotiations with the United States would be an “obvious mistake”.

Rouhani also scoffed at Trump’s threat to halt Iranian oil exports and said Iran has a dominant position in the Gulf and the Strait of Hormuz, a major oil shipping waterway.

A senior commander of Iran’s elite Revolutionary Guards reacted angrily to Trump’s threats by saying Tehran would continue to resist its enemies, Iran’s Students news Agency ISNA reported.

“We will never abandon our revolutionary beliefs … we will resist pressure from enemies … America wants nothing less than (to) destroy Iran … (but) Trump cannot do a damn thing against Iran,” Brigadier General Gholamhossein Gheybparvar said.

“WAR OF WORDS”

Trump’s warning to Iran came hours after a speech by U.S. Secretary of State Mike Pompeo who denounced Iran’s clerical leadership as a “mafia” and promised unspecified backing for Iranians unhappy with their government.

Tehran reacted to Pompeo’s speech as an interference in Tehran’s affairs, the semi-official Tasnim news agency reported.

“Such policies will unite Iranians who will overcome plots against their country,” Iranian Foreign Ministry spokesman Bahram Qasemi said.

Israeli Prime Minister Benjamin Netanyahu praised Trump’s “strong stance” on Iran.

At the same time, Germany said threats of war were “never helpful”.

There is limited appetite in Washington for a conflict with Iran, not least because of the difficulties the U.S. military faced in Iraq after its 2003 invasion but also because of the impact on the global economy if conflict raised oil prices.

Many ordinary Iranians are worried that the war of words might lead to a military confrontation but insiders in Tehran told Reuters that the U.S. administration would not drag the country into another quagmire in the Middle East.

With popular discontent over Iran’s faltering economy and sliding currency, and the prospect of tough new U.S. sanctions, Iran’s leaders have called for unity.

Many ordinary Iranians are largely skeptical of the Trump administration’s support for Iranian citizens because of the harsh U.S. sanctions on the country and a visa ban imposed on Iranians barring them from entering the United States.

Iran’s faction-ridden religious and political elites have closed ranks against Trump’s hawkish approach to Tehran.

However, growing strains with the U.S. will eventually boost Rouhani’s anti-Western hardline rivals who fear losing power if the nuclear deal, championed by Rouhani, ended the country’s political and economic isolation.

Rouhani’s apparent threat earlier this month to disrupt oil shipments from neighboring countries came in reaction to efforts by Washington to force all countries to stop buying Iranian oil.

Washington initially planned to shut Iran out of global oil markets completely after Trump abandoned the deal that limited Iran’s nuclear ambitions, demanding all other countries stop buying Iranian crude by November.

But the United States has somewhat eased its stance, saying it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.

(Additional reporting by Brendan O’Brien in Washington, Dubai newsroom, Dan Williams in Jerusalem; Writing by Daniel Wallis and Parisa Hafezi; Editing by Matthew Mpoke Bigg)