Global shares, euro edge up ahead of ECB meeting

London (Reuters) - The euro and shares inched higher on Thursday, as investors awaited the European Central Bank's policy meeting later in the day and President Mario Draghi's views on the region's growth outlook.

Testimony from the new head of the Bank of England, bond auctions by France and Spain, earnings reports from a host of major European companies and the start of a two-day European Union summit provided more reasons for investors to be cautious.

The euro edged up 0.3 percent to $1.3570, holding above this week's low of $1.3458 plumbed on Tuesday but well shy of a 15-month peak of $1.3711 set last Friday.

The common currency has now soared 20 percent against Japan's yen in just three months, risen 8 percent on sterling and 7 percent on the dollar, increasing tensions among policymakers across the recession-hit region.

The gains have put the spotlight firmly on ECB president Draghi's 1330 GMT news conference, which follows the bank's meeting where interest rates are expected to be left unchanged.

"Draghi has to be very careful because it's a very sensitive time in currency markets, and investors will be looking for any hint of the ECB's thinking on this issue," said Ned Rumpeltin, head of G10 FX strategy at Standard Chartered Bank.

"It is probably the wisest path for him to avoid the debate on the currency at this point in time."

At his news conference last month, Draghi read out a G20 statement on exchange rates in which members pledged to avoid competitive devaluations. With another meeting of the group due next week, it's likely Draghi will keep to this line.

BRITAIN VIEW

Ahead of the ECB meeting, the man about to take the helm at the Bank of England, Canadian Mark Carney, faces his first public grilling about how he would revive Britain's stagnant economy.

Carney, the first foreigner to run the bank in its 318-year history, faces a three-hour question-and-answer session that could also signal how he will bring his banking expertise to bear on the UK's crisis-hit banks.

The Bank of England also holds its monetary policy meeting later. No policy changes are expected at the BoE's monthly meeting, with an announcement due at 1200 GMT.

The UK central bank is unlikely to change interest rates though to signal an unchanged monetary policy stance it needs to announce fresh purchases of bonds to maintain its stock at the current level of 375 billion sterling.

Ten-year gilt yields were 1 basis point lower at 2.09 percent ahead of the testimony and the bank's announcement.

German Bund futures reflected the cautious mood across all markets, edging up 5 ticks to 142.61, with attention on reaction to a Spanish sale of 4.5 billion euros of new debt.

Increasing calls for Spain's prime minister Mariano Rajoy to resign over a corruption scandal may have hit investor demand for the bonds, which saw higher yields at the sale.

Ten-year Spanish government bond yields were 3.7 basis points higher at 5.48 percent, while two-year borrowing costs rose 1.9 bps to 2.89 percent.

SHARES STABLE

European shares were mostly little changed, stabilizing after sharp losses in the previous session, as mixed corporate results and rising economic concerns in the euro zone added to the nerves ahead of the ECB meeting.

The FTSEurofirst 300 index <.fteu3> of top European shares was slightly higher in early trade, despite disappointing results from French pharmaceutical group Sanofi , telecoms firm Alcatel Lucent and Credit Suisse . <.eu/>

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were all around 0.1 percent higher.

"The medium and long-term positive trend is still intact, although on the short term, we're turning 'neutral'; indexes are very close to key support levels," said Aurel BGC chartist Gerard Sagnier.

Commodities markets were all trading within tight ranges, with investors' attention firmly fixed on the currency implications of anything the ECB's Draghi might say.

The euro often dictates gold's movements in particular, and ahead of the meeting it had inched up to about $1,680 an ounce.

"Gold is very much dependent on the outcome of the ECB. I don't think today they will give us a clear indication whether the euro is indeed overvalued," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.

"If they try to weaken the euro because the economy hasn't bottomed out, then in that case, it's possible gold may go up a bit."

Brent crude was steady in a tight range around $117 per barrel ahead of the meeting.

Brent has gained over the last three weeks as positive data suggested the global economy had turned a corner, which augurs well for fuel demand, while supply worries stemming from tensions in the Middle East have also supported prices.

(Additional reporting by Francesco Canepa; Editing by Will Waterman)

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Tsunami kills at least five in Solomons after big Pacific quake

(Reuters) - A powerful 8.0 magnitude earthquake set off a tsunami that killed at least five people in a remote part of the Solomon Islands on Wednesday and triggered evacuations across the South Pacific as island nations issued tsunami alerts.

The quake struck 340 km (211 miles) east of Kira Kira in the Solomons, the Pacific Tsunami Warning Center in Hawaii said as it issued warnings for the Solomons and other South Pacific nations including Australia and New Zealand. It later canceled the warnings for the outlying regions.

A tsunami measuring 0.9 metres (three feet) hit near the town of Lata on the remote Santa Cruz island, swamping some villages and the town's main airport as people fled to safety on higher ground.

More than three dozen aftershocks up to magnitude 6.6 rocked the region in the hours after the quake, the U.S. Geological Survey said.

Lata hospital's director of nursing, Augustine Pilve, told New Zealand television that five people had been killed, including a boy about 10 years old, adding that more casualties were possible as officials made their way to at least three villages that may have been hit.

"It's more likely that other villages along the coast of Santa Cruz may be affected," he said.

Disaster officials in the Solomon Islands capital Honiara told the Solomon Islands Broadcasting Corp. that they believed six people were dead and that five villages had suffered damage.

Solomon Islands Police Commissioner John Lansley said it was too early to fully assess the damage or casualty numbers, and said authorities hoped to send aircraft to the region on Thursday to help determine the extent of the damage.

Luke Taula, a fisheries officer in Lata, said he watched the tsunami as it came in small tidal surges rather than as one large wave.

"We have small waves come in, then go out again, then come back in. The waves have reached the airport terminal," he told Reuters by telephone.

The worst damage was to villages on the western side of a point that protects the main township, he said.

"There are reports that some communities have been badly hit, their houses have been damaged by the waves."

About 5,000 people lived in and around the town, but the area was deserted as people fled to higher ground, Taula said.

HOT SPOT

The Solomons, perched on the geologically active "Pacific Ring of Fire", were hit by a devastating tsunami following an 8.1 magnitude quake in 2007. At least 50 people were killed then and dozens left missing and more than 13 villages destroyed.

"It's an area that is very prone to earthquakes," said Jonathan Bathgate, seismologist at Geoscience Australia. "We've had seven 6-plus magnitude earthquakes in this region since January 31, so it has been very active in the past week."

Initial signs were that the tremor was a thrust quake, in which vertical movement in the continental plates generates higher risk of tsunami, Bathgate added.

Authorities in the Solomons, Fiji, Guam and elsewhere had urged residents to higher ground before the Pacific Tsunami Warning Center canceled its alerts.

"The earthquake would have to be quite a bit bigger to make a much more sizeable tsunami," said Brian Shiro, geophysicist for the center in Hawaii.

(Reporting by James Grubel in CANBERRA,; Additional reporting by Michael Perry and Lincoln Feast in SYDNEY and Alex Dobuzinskis in LOS ANGELES)

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Kim Kardashian's Pregnancy Is No Reason to Speed Divorce, says Kris Humphries

By Mike Fleeman

02/05/2013 at 09:20 PM EST

Kris Humphries and Kim Kardashian

Seth Browarnik/StarTraks

Kim Kardashian's baby is not even born yet and already is being drawn into mama's divorce.

Kardashian, carrying boyfriend Kanye West's child, has bristled at what she sees as stall tactics by estranged husband Kris Humphries to close the legal books on their 72-day marriage.

But Humphries's lawyer Marshall W. Waller writes that "what is really going on here is that an 'urgency' in the form of an apparently unplanned pregnancy" is being used by Kardashian as "an opportunity to gain a litigation advantage (to) prematurely set this matter for trial."

He adds parenthetically that the pregnancy is "something (Humphries) had nothing to do with."

Waller explains his reasoning for calling the pregnancy as unplanned: "Indeed, why would (she) plan to get pregnant in the midst of divorce proceedings?"

Kardashian, herself, recently addressed the timing.

"God brings you things at a time when you least expect it," she said last month. "I'm such a planner and this was just meant to be. What am I going to? Wait years to get a divorce? I'd love one. It's a process."

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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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Follow Jennifer Peltz at http://twitter.com/jennpeltz

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Yen hit near three-year low as new BOJ governor eyed

LONDON (Reuters) - The yen fell close to a three-year low on Wednesday on expectations that a new Bank of Japan governor could ease policy, while the euro was steady and European shares edged up ahead of a central bank meeting.

BOJ Governor Masaaki Shirakawa has said he will step down on March 19, opening the way for a successor supporting the kind of expansionary policies the government favours.

The dollar touched 94.075 yen to its highest since May 2010 before profit taking saw it drop back to 93.76 yen, while the euro also rose as high as 127.71 yen, its strongest since April 2010, before it also eased.

Against the dollar, the euro dipped to $1.3546 but was within this week's range of $1.3450 - $1.3710.

New Japanese Prime Minister Shinzo Abe's support for aggressive easing does not seem to caused an outcry from other countries although there have been sporadic complaints from Germany and South Korea.

This makes yen selling comfortable, said Minori Uchida, chief currency strategist at the Bank of Tokyo-Mitsubishi UFJ.

"The G20 finance ministers meeting next week is unlikely to discuss currencies much. The market is likely to test further downside on the yen in the near future," Uchida said.

European shares edged up and the euro was steady ahead of Thursday's European Central Bank policy meeting after recovering from falls on Monday due to a flare up of political uncertainty in Spain and Italy. The ECB is expected to keep interest rates on hold.

London's FTSE 100 <.ftse> was up 0.5 percent, Paris's CAC-40 <.fchi> was up 0.3 percent and Frankfurt's DAX <.gdaxi> was 0.2 percent higher at 0900 GMT, leaving the pan-European FTSEurofirst 300 <.fteu3> up 0.5 percent at 1160.05.

Asian shares and industrial commodities and oil, now above $116 a barrel, consolidated recent gains that came on signs of global economic recovery.

The slide in the yen bolstered Japanese equities to their highest since October 2008 while expectations of more monetary easing pushed two-year Japanese government bond yields down to a nine-year low of 0.045 percent.

In the European bond market, benchmark German Bund futures edged up before a sale of five-year German debt that is expected to find strong demand due to a recent rise in yields and political uncertainty in Spain and Italy.

Corruption allegations in Spain have put Prime Minister Mariano Rajoy under pressure and a scandal at one of its oldest banks has led to an increasingly uncertain outcome in Italian elections later in February.

"There are fairly ominous signs (in the periphery). I know they (Italian and Spanish bonds) had a good day yesterday, but there's Spanish supply coming up," one trader said.

(Editing by Anna Willard)

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Mexico says gas leak caused deadly Pemex blast

MEXICO CITY (Reuters) - The Mexican government said on Monday that a gas leak caused a blast that killed at least 37 people at the offices of state oil monopoly Pemex in Mexico City, raising fresh questions about the firm's safety record.

Attorney General Jesus Murillo said no trace of explosives was found at the site of the explosion, the latest in a string of disasters to hit the lumbering oil giant.

New President Enrique Pena Nieto is seeking to overhaul Pemex as part of raft of economic reforms aimed at boosting growth in Latin America's No. 2 economy.

"We have been able to determine that the explosion was caused by an accumulation of gas in the basement of the building," Murillo told a news conference in Mexico City. He said the gas was believed to be methane.

Murillo said the gas may have leaked from containers in a storage facility connected to where the explosion took place by a tunnel. Or it could have leaked from an aging pipeline that passed through the building.

Another possibility is that it emanated from sewage in the ground under the building, he said.

Mexico City is built on a dried-out lake bed, and the stench of sewage often hangs over parts of the city downtown.

Murillo said contractors working on supports under the building needed electricity and used an extension cord, which could have caused a spark that ignited the gas.

Thursday afternoon's blast at a building at the Pemex headquarters complex in downtown Mexico City prompted speculation the incident could have been an act of sabotage.

That raised fears that drug war violence that has killed an estimated 70,000 people in the past six years could have entered a new, more sinister phase, and rattled investors.

REFORM OUTLOOK

The explosion next to Pemex's flagship tower block prompted renewed criticism of the oil giant's safety record.

For years a source of national pride, Pemex has proven stubbornly resistant to change. The company has become a touchstone for Mexico's capacity for economic reform since oil output began to fall behind the performance of other major producers.

A symbol of Mexican self-sufficiency since president Lazaro Cardenas expropriated U.S. and British oil companies in 1938 and nationalized the oil industry, Pemex has also become a byword for inefficiency and graft.

Pena Nieto, who took office in December, has made passing an energy reform to boost crude production a priority this year.

Geoffrey Pazzanese, who co-manages Federated Investors' $523 million Federated InterContinental Fund, said an accident would help the government push its energy reform.

"It's probably going to be positive for the reform, it underlines the need for Pemex to invest in its own capital spending," he said before Murillo spoke. "You have a big explosion in a building that's right in the middle of the city.

"Conspiracy theories aside, people are probably outraged about the situation and that tends to spur action," he added.

Mexico is the world's No. 7 oil producer and a top exporter to the United States. But output has slumped from a peak of 3.4 million barrels per day in 2004 to less than 2.6 million bpd now.

While the company had said it improved safety prior to the blast, fires, explosions and other safety breaches are regular occurrences.

Mexico loses hundreds of millions of dollars a year to theft of oil carried out by drug gangs, petty criminals and corrupt workers. The Mexican government relies on oil revenues to fund nearly a third of the federal budget.

The heavy tax burden has limited Pemex's ability to fund new projects and lift crude output. The government has warned that Mexico could become a net oil importer as early as 2018 if major new oil finds cannot be developed.

The company had pinned its long-term hopes of boosting production on the deep waters of the Gulf of Mexico, where the government estimates there are significant oilfields.

The last conservative administration had helped Pemex by drawing more outside investment into mature oilfields via the auction of private contracts.

(With reporting by David Alire Garcia, Krista Hughes, Ana Isabel Martinez and Anahi Rama; Writing by Simon Gardner and Dave Graham; Editing by Xavier Briand)

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Jillian Michaels: My Son Phoenix Is 'Fiery' Like Me

Mom & Babies
Celebrity Baby Blog

02/04/2013 at 03:00 PM ET

Gregg DeGuire/WireImage

Jillian Michaels‘ son Phoenix is already taking after his mama — just not the expected one!

Although The Biggest Loser trainer expected her baby boy to inherit her partner’s laidback approach to life — Heidi Rhoades delivered their son in May — the 8-month-old’s budding personality is the polar opposite.

“He wants to walk and he gets really pissed about it when he can’t. He gets frustrated,” Michaels, 38, told PEOPLE at the recent TCAs.

“He’s a fiery little sucker, he’s just like me. I’m like, ‘You were supposed to be like Heidi!’ But he’s not. It’s not good, not good.”

Admitting she is “terrified for when he’s a teenager,” Michaels has good reason to be: Recently she spotted her son — who is “crawling aggressively” — putting his electrician skills to the test in the family room.

“He’s into everything, which is kind of a nightmare to be totally honest,” she says. “We have an outlet in the floor in the living room and I caught him eating the outlet on the floor … I was like, ‘Mother of God!’”

Phoenix’s big sister Lukensia, 3, has also been busy keeping her mamas on their toes. “Lu just had her first ski trip and she had a little crush on her teacher, Ollie,” Michaels shares.

“At first I was like, ‘Oh my God, we’re letting our baby go!’ The second day we took her she ran right to him — loves Ollie.”

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Bullying study: It does get better for gay teens

CHICAGO (AP) — It really does get better for gay and bisexual teens when it comes to being bullied, although young gay men have it worse than their lesbian peers, according to the first long-term scientific evidence on how the problem changes over time.

The seven-year study involved more than 4,000 teens in England who were questioned yearly through 2010, until they were 19 and 20 years old. At the start, just over half of the 187 gay, lesbian and bisexual teens said they had been bullied; by 2010 that dropped to 9 percent of gay and bisexual boys and 6 percent of lesbian and bisexual girls.

The researchers said the same results likely would be found in the United States.

In both countries, a "sea change" in cultural acceptance of gays and growing intolerance for bullying occurred during the study years, which partly explains the results, said study co-author Ian Rivers, a psychologist and professor of human development at Brunel University in London.

That includes a government mandate in England that schools work to prevent bullying, and changes in the United States permitting same-sex marriage in several states.

In 2010, syndicated columnist Dan Savage launched the "It Gets Better" video project to encourage bullied gay teens. It was prompted by widely publicized suicides of young gays, and includes videos from politicians and celebrities.

"Bullying tends to decline with age regardless of sexual orientation and gender," and the study confirms that, said co-author Joseph Robinson, a researcher and assistant professor of educational psychology at the University of Illinois in Urbana-Champaign. "In absolute terms, this would suggest that yes, it gets better."

The study appears online Monday in the journal Pediatrics.

Eliza Byard, executive director of the Gay, Lesbian & Straight Education Network, said the results mirror surveys by her anti-bullying advocacy group that show bullying is more common in U.S. middle schools than in high schools.

But the researchers said their results show the situation is more nuanced for young gay men.

In the first years of the study, gay boys and girls were almost twice as likely to be bullied as their straight peers. By the last year, bullying dropped overall and was at about the same level for lesbians and straight girls. But the difference between men got worse by ages 19 and 20, with gay young men almost four times more likely than their straight peers to be bullied.

The mixed results for young gay men may reflect the fact that masculine tendencies in girls and women are more culturally acceptable than femininity in boys and men, Robinson said.

Savage, who was not involved in the study, agreed.

"A lot of the disgust that people feel when you bring up homosexuality ... centers around gay male sexuality," Savage said. "There's more of a comfort level" around gay women, he said.

Kendall Johnson, 21, a junior theater major at the University of Illinois, said he was bullied for being gay in high school, mostly when he brought boyfriends to school dances or football games.

"One year at prom, I had a guy tell us that we were disgusting and he didn't want to see us dancing anymore," Johnson said. A football player and the president of the drama club intervened on his behalf, he recalled.

Johnson hasn't been bullied in college, but he said that's partly because he hangs out with the theater crowd and avoids the fraternity scene. Still, he agreed, that it generally gets better for gays as they mature.

"As you grow older, you become more accepting of yourself," Johnson said.

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Online:

Pediatrics: http://www.pediatrics.org

It Gets Better: http://www.itgetsbetter.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Euro, oil slide on European worries, shares flat

LONDON (Reuters) - The euro and oil fell on Tuesday while European shares were largely flat as renewed worries over political risks in the euro zone trimmed demand for riskier assets for a second day.

A rise in political uncertainty in Spain, where the prime minister is facing calls to resign, and in Italy, which holds a general election later this month, provoked a big sell off on Monday, ending a solid new year rally.

The euro, which has taken the brunt of the selling, had risen 2.3 percent against the U.S. dollar this year to a high of just over $1.37 on Friday, before the selloff began and was down 0.4 percent at $1.3460 in early European trade.

The broad FTSE Eurofirst 300 index <.fteu3> of top European shares dropped 1.5 percent to its lowest level of the year on Monday, steadied to open up 0.1 percent up. Across Europe London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were all recovering from the previous days sharp falls.

Most analysts see this week's selloff as a correction to a rally linked to signs of growing euro zone economic stability and an improving global outlook, which has been underpinned by the easier monetary policies of major central banks.

"What we are looking at, at the moment, is a correction, a consolidation or even a 'baby risk off', " said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

"Nevertheless our working hypothesis remains that after the correction the trends in place before will continue as the two main drivers are still there; namely central banks continuing to inject liquidity and more and more proof of an economic recovery," he said.

Bond markets have also stabilized after a sharp rise in yields on Spanish and Italian debt and growing demand for safe-haven German government bonds. This followed a narrowing of spreads this year between peripheral and core government debt.

"We had a very strong rally in peripheral markets, strong spread compression in January which was probably faster than fundamentals were favoring, so we are in a correction. It's not a new trend, it's just a correction," Patrick Jacq, European rate strategist at BNP Paribas said.

(Additional reporting by Ana Nicolaci da Costa and Atul Prakash.)

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Iran hedges on nuclear talks with six powers or U.S.

MUNICH (Reuters) - Iran said on Sunday it was open to a U.S. offer of direct talks on its nuclear program and that six world powers had suggested a new round of nuclear negotiations this month, but without committing itself to either proposal.

Diplomatic efforts to resolve a dispute over Iran's nuclear program, which Tehran says is peaceful but the West suspects is intended to give Iran the capability to build a nuclear bomb, have been all but deadlocked for years, while Iran has continued to announce advances in the program.

Iranian Foreign Minister Ali Akbar Salehi said a suggestion on Saturday by U.S. Vice President Joe Biden that Washington was ready for direct talks with Iran if Tehran was serious about negotiations was a "step forward".

"We take these statements with positive consideration. I think this is a step forward but ... each time we have come and negotiated it was the other side unfortunately who did not heed ... its commitment," Salehi said at the Munich Security Conference where Biden made his overture a day earlier.

He also complained to Iran's English-language Press TV of "other contradictory signals", pointing to the rhetoric of "keeping all options on the table" used by U.S. officials to indicate they are willing to use force to keep Iran from obtaining a nuclear weapon.

"This does not go along with this gesture (of talks) so we will have to wait a little bit longer and see if they are really faithful this time," Salehi said.

Iran is under a tightening web of sanctions. Israel has also hinted it may strike if diplomacy and international sanctions fail to curb Iran's nuclear drive.

In Washington, Army General Martin Dempsey, the top U.S. military officer, said in an interview broadcast on Sunday that the United States has the capability to stop any Iranian effort to build nuclear weapons, but Iranian "intentions have to be influenced through other means."

Dempsey, chairman of the Joint Chiefs of Staff, made his comments on NBC's program "Meet the Press," speaking alongside outgoing Defense Secretary Leon Panetta.

Panetta said current U.S. intelligence indicated that Iranian leaders have not made a decision to proceed with the development of a nuclear weapon.

"But every indication is they want to continue to increase their nuclear capability," he said. "And that's a concern. And that's what we're asking them to stop doing."

The new U.S. secretary of state, John Kerry, has said he will give diplomacy every chance of solving the Iran standoff.

THE BEST CHANCE

With six-power talks making little progress, some experts say talks between Tehran and Washington could be the best chance, perhaps after Iran has elected a new president in June.

Negotiations between Iran and the six powers - Russia, China, the United States, Britain, France and Germany - have been deadlocked since a meeting last June.

EU officials have accused Iran of dragging its feet in weeks of haggling over the date and venue for new talks.

Salehi said he had "good news", having heard that the six powers would meet in Kazakhstan on February 25.

A spokesman for EU foreign policy chief Catherine Ashton, who coordinates the efforts of the six powers, confirmed that she had proposed talks in the week of February 25 but noted that Iran had not yet accepted.

Kazakhstan said it was ready to host the talks in either Astana or Almaty.

Salehi said Iran had "never pulled back" from the stuttering negotiations with the six powers. "We still are very hopeful. There are two packages, one package from Iran with five steps and the other package from the (six powers) with three steps."

Iran raised international concern last week by announcing plans to install and operate advanced uranium enrichment machines. The EU said the move, potentially shortening the path to weapons-grade material, could deepen doubts about the peaceful nature of Iran's nuclear program.

Prime Minister Benjamin Netanyahu said on Sunday that Israel's mission to stop its arch-enemy from acquiring nuclear weapons was "becoming more complex, since the Iranians are equipping themselves with cutting-edge centrifuges that shorten the time of (uranium) enrichment".

"We must not accept this process," said Netanyahu, who is trying to form a new government after winning an election last month. Israel is generally believed to be the only country in the Middle East with nuclear weapons.

(Additional reporting by Myra MacDonald and Stephen Brown in Munich, Dmitry Solovyov in Almaty, Yeganeh Torbati in Dubai and Jim Wolf in Washington; Editing by Kevin Liffey and Will Dunham)

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