Obama "modestly optimistic" for fiscal deal

WASHINGTON: US President Barack Obama said Friday he was "modestly optimistic" a deal could be agreed with Republicans to head off a "fiscal cliff" crisis that could trigger a recession and rock global markets.

Obama said after meeting top congressional leaders that Senate Democrats and Republicans would work overtime this weekend to try to head off a $500 billion time bomb of tax hikes and spending cuts before a January 1 deadline.

"We had a constructive meeting today," Obama said. "I'm modestly optimistic that an agreement can be achieved."

Obama said that Democratic Senate Majority leader Harry Reid and Republican minority leader Mitch McConnell would try to seal a deal on shielding the middle class from higher taxes due to come into force on Tuesday.

But he warned that if they failed, he would demand a vote in Congress on his own suggestion, to raise taxes on all American families earning over $250,000 a year and for an extension of unemployment insurance for two million people.

Such a scenario would leave Republicans in a tough political spot as if they refuse, it would be easy for the White House to blame them for the economy toppling over the cliff.

Obama also vented frustration that America's dysfunctional political system meant a slog through the Christmas and New Year vacation after it failed to come up with a deal until just before Tuesday's deadline.

"Ordinary folks, they do their jobs. They meet deadlines. They sit down and they discuss things and then things happen.

"The notion that our elected leadership can't do the same thing is mind-boggling to them. It needs to stop."

McConnell said after the talks, also involving Republican House Speaker John Boehner and Democratic House minority leader Nancy Pelosi that he was "hopeful and optimistic."

An aide to Boehner said the talks focused on "potential options and components for a plan that could pass both chambers of Congress" and said the speaker told Obama that the Senate must go first, before the House acts.

Earlier, Wall Street picked up pessimistic signs before Obama's talks.

The Dow Jones Industrial Average dropped 158.20 points or 1.21 percent, as Washington's perennial gridlock threatened to deal what Obama described as a "politically self-inflicted wound" to the economy.

If no deal is reached by January 1, all Americans will face a tax hike and massive and automatic budget cuts will come into force which budget experts say could trigger a new US recession and cause a spike in unemployment.

It is not clear whether the Obama plan would avert the massive automatic spending cuts or deal with his separate request to raise the $16 trillion ceiling on government borrowing.

Republicans want to extend George W. Bush-era tax cuts due to expire on Tuesday for everyone and accuse the president of failing to offer meaningful spending cuts in a bargain in return for them agreeing to raise revenues.

Some top lawmakers clung to hope.

Republican Senator Bob Corker earlier complained Obama and Democrats in Congress had balked at cutting spending on social programs weighing on the budget and inflating the deficit.

"We're going to end up with a small, kick-the-can-down-the-road bill that creates another fiscal cliff to deal with this fiscal cliff. How irresponsible is that?" Corker told reporters.

Retiring Democratic Senator Ben Nelson had warned: "If this meeting is not successful in achieving a proposal, I think you need to get a parachute."

Obama broke off his vacation in Hawaii in search of a last-minute deal and Boehner called the House back to work on Sunday.

It is questionable if any package could pass the House as restive conservatives last week rebuked Boehner by rejecting his fallback plan that would have raised taxes on people earning $1 million.

While each side must for the sake of appearances be seen to be seeking a deal, the easiest way out of the mess might be to allow the economy to go over the cliff, but to fix the problem in the first few days of next year.

In that scenario, Republicans, who are philosophically opposed to raising taxes, could back a bill to lower the newly raised rates on almost all Americans, thus sidestepping the stigma of raising taxes.

Recent polls show a majority of Americans back Obama's handling of the crisis, and would blame Republicans for a failure to fix it, so the president could get a short-term political boost from an early deal next year.

Should the stalemate linger however, the crisis would cloud the early months of Obama's second term, would dent his popularity and could detract from his key political goals like immigration reform and gun control.

-AFP/ac

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Upcoming book gives look at early Apple designs

Ghosts of iPhones past.

(Credit:
Hartmut Esslinger/Designboom)

Apple fanatics may find themselves foaming at the mouth over some retro conceptual
Mac computer photos featured in Hartmut Esslinger's upcoming book "Design Forward: Creative Strategies for Sustainable Change."

The book explores Esslinger's journey as a German designer who worked with Sony, Louis Vuitton, and others before moving on to Apple in 1982. Apple hired Esslinger to transform the successful yet scattered startup into a brand with a globally recognizable design mantra.

The book, which was written about earlier by Designboom, sheds light on some stunning Apple product concepts, many of which came to fruition years -- or in some cases decades -- later. You can see a few of these concepts here in our blog post, but head on over to Designboom to see more of Esslinger's prototype Mac desktop computers, a phone, a laptop, and even a
tablet.

An excerpt from the book reveals how a 28-year-old Steve Jobs aspired to bring the company together from the inside out through its product design:

The company's [then] CEO, Michael Scott, had created different business divisions for each product line, including accessories such as monitors and memory drives. Each division had its own head of design and developed its products the way it wanted to. As a result, Apple's products shared little in the way of a common design language or overall synthesis.

In essence, bad design was both the symptom and a contributing cause of Apple's corporate disease. Steve's desire to end the disjoined approach gave birth to a strategic design project that would revolutionize Apple's brand and product lines, change the trajectory of the company's future, and eventually redefine the way the world thinks about and uses consumer electronics and communication technologies.

The "Design Forward" book reveals how Apple originally contacted Esslinger's firm Frog Design after learning of a similar move by Xerox. At the time, Xerox employed the Richardson Smith design agency to develop a single design-language that could be used across the company.

Another fascinating portion of the book, which is available for preorder on Amazon, reveals that Jobs had Esslinger create a Mac computer that looked like one made by Sony -- a company that was consistently redefining aesthetic trends in consumer electronics during that time.

Hartmut's vision of an Apple computer with a dash of Sony style.

(Credit:
Hartmut Esslinger/Designboom)

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"Low-end blizzard" eases in Northeast

Updated 3:50 p.m. ET

CONCORD, New Hampshire A powerful winter storm blamed for 16 deaths in other parts of the country is bringing rain to southern
New England and snow further north, but the region has been largely spared the pounding that other states took.

The storm pushed through the Upper Ohio Valley and made its way into the Northeast Wednesday night, leaving up to a foot of snow in some locations by Thursday morning. By noon, the precipitation had stopped in parts of Pennsylvania and New Jersey and Massachusetts, though snow continued to fall in upstate New York, New Hampshire, Maine and Vermont.

Other areas were getting a messy mix of rain and snow or just rain - enough to slow down commuters and those still heading home from holiday visits with family.

"The way I've been describing it is as a low-end blizzard, but that's sort of like saying a small Tyrannosaurus rex," said John Kwiatkowski, an Indianapolis-based meteorologist with the weather service.

24 Photos

Winter weather smacks U.S.

Thousands of travelers were trying to make it home Thursday after the fierce storm stranded them at airports or relatives' homes around the region. Some inbound flights were delayed in Philadelphia and New York's LaGuardia, but the wet and windy weather wasn't leading to delays at other major East Coast airports.

On New York's Long Island, a Southwest Airlines jet bound for Tampa, Florida, veered off a taxiway and got stuck in mud Thursday morning. Officials said there were no injuries to the 129 passengers and five crew members, who were expected to take a later flight. Though the area received heavy rain overnight, Southwest spokesman Paul Flanigan said it wasn't clear whether that played a role in the incident.

In Pittsburgh, a flight that landed safely during the storm Wednesday night got stuck in snow for about two hours on the tarmac. The American Airlines flight arrived between 8 and 9 p.m., but then ran over a snow patch and got stuck.

The storm system spawned Gulf Coast region tornadoes on Christmas Day, startling people like Bob and Sherry Sims of Mobile, Alabama, who'd just finished dinner.

"We heard that very distinct sound, like a freight train," said Bob Sims. They headed for a center bathroom.

Play Video

Winter storm blasts Northeast

Power was still out at the Sims' home on Wednesday, but the house wasn't damaged and they used a generator to run heaters to stay warm. Some neighbors were less fortunate, their roofs peeled away and porches smashed by falling trees.

People were killed in accidents in Kentucky, Oklahoma, Arkansas, Ohio, Indiana, Pennsylvania and Virginia, and homes in businesses in Arkansas and Maryland were without power.

Officials in Ohio blamed the bad weather for a crash that killed an 18-year-old girl, who lost control of her car Wednesday afternoon and smashed into an oncoming snow plow on a highway northeast of Cincinnati.

A man and a woman in Evansville, Ind., were killed when the scooter they were riding went out of control on a snowy street Wednesday and they were hit by a pickup truck.

Two passengers in a car on a sleet-slickened Arkansas highway were killed Wednesday in a head-on collision, and two people, including a 76-year-old Milwaukee woman, were killed Tuesday on Oklahoma highways. Deaths from wind-toppled trees were reported in Texas and Louisiana. Other storm-related deaths include a man checking on a disabled vehicle near Allentown, Pa., who was struck and killed Wednesday night, and two people killed in separate crashes in Virginia.

As usual, winter-sports enthusiasts welcomed the snow. At Smiling Hill Farm in Maine, Warren Knight was hoping for enough snow to allow the opening of trails.

"We watch the weather more carefully for cross-country skiing than we do for farming. And we're pretty diligent about farming. We're glued to the weather radio," said Knight, who described the weather at the 500-acre farm in Westbrook as being akin to the prizes in "Cracker Jacks -- we don't know what we're going to get.

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Utah Teachers Flock to Gun Training

The perception of schools as sanctuaries from violence has been "blown up" by recent events and some believe it's time for educators to literally take the situation into their own hands and carry guns.

"We've had this unwritten code, even among criminals, that schools are off limits. Those are our kids. You don't mess with that," Utah Shooting Sports Council (USSC) Chairman Clark Aposhian told ABCNews.com today.

"That perception has been blown away now," he said. "It's been shattered and if there's one thing that parents across the country are united on, it's that they are committed to and serious about protecting their kids."

Aposhian spoke shortly before opening a weapons training class for teachers and school employees that drew more than 200 Utah educators organized by the USSC, a leading gun lobby group that believes that teachers should be able to fight back when faced with an armed intruder.

"One firearm in the hands of one teacher could have made the difference at Sandy Hook or Columbine, but they weren't allowed to carry in those schools," Aposhian said.

The USSC is waiving its normal $50 training fee today for teachers who wish to attend. Aposhian said the 200 person course was filled to capacity and said he plans on holding another session for people he may have to turn away today.

INFOGRAPHIC: Gun in America: By The Numbers

"We trust these teachers to be with our kids for 8 to 10 hours a day every day," Aposhian said. "I don't think it's a far reach to think that we could think that they would act responsibly and with decorum in protecting their own lives and the lives of the kids under their care."

Gun Owners Give Back: LA Residents Return Guns After Newtown Tragedy Watch Video

The idea of armed teachers has been part of a fiery debate on gun control following the rampage at Connecticut's Sandy Hook Elementary School that left 20 children and six adults dead on Dec. 14.

Utah is one of only a handful of states, including Oregon, Hawaii and New Hampshire, that allow people to carry licensed concealed weapons into public schools. It is not known how many Utah teachers carry guns in public schools because the records are not public.

But Aposhian said that he tells detractors that Utah has not had any school shootings or accidental shootings in the approximately 12 years the law has been in effect.

In Ohio, the Buckeye Firearms Association is launching a pilot armed teacher training program in which 24 teachers will be selected to attend a three-day training class.

Arizona's Attorney General Tom Horne has proposed a state law amendment that would allow one educator in each school to carry a gun.

During today's six-hour training session, the educators will be taught about gun safety, loading and unloading, manipulating the firearm, how to clear malfunctions, use of force laws and state and federal firearm laws.

The training sessions normally draw about 15 to 20 people, Aposhian said, but many of the teachers who have signed up for today have expressed strong feelings about attending the class.

"I think it runs the gamut from passive desire to get a permit because they thought about it here and there to a fervor given the recent events," Aposhian said. "Perhaps they've had an epiphany of sorts and realized that that sanctuary they work in, or at least the perceived sanctuary, isn't all that safe."

The Utah State Board of Education Chair Debra Roberts released the following statement today on the matter:

"The Utah State Board of Education expresses sympathy to all involved in the recent school shooting in Connecticut. In the face of this terrible tragedy, as schools move forward in taking measures to ensure the safety of students and school personnel, we urge caution and thoughtful consideration."

The statement noted that its schools have emergency plans to handle such situations.

Carol Lear, the board's director of school law and legislation, was more blunt about Aposhian's gun training, telling the Associated Press, "It's a terrible idea...It's a horrible, no-good, rotten idea."

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Russia's Putin signals he will sign U.S. adoption ban

MOSCOW (Reuters) - President Vladimir Putin signaled on Thursday he would sign into law a bill barring Americans from adopting Russian children and sought to forestall criticism of the move by promising measures to better care for his country's orphans.

In televised comments, Putin tried to appeal to people's patriotism by suggesting that strong and responsible countries should take care of their own and lent his support to a bill that has further strained U.S.-Russia relations.

"There are probably many places in the world where living standards are higher than ours. So what, are we going to send all our children there? Maybe we should move there ourselves?" he said, with sarcasm.

Parliament gave its final approval on Wednesday to the bill, which would also introduce other measures in retaliation for new U.S. legislation which is designed to punish Russians accused of human rights violations.

For it to become law Putin needs to sign it.

"So far I see no reason not to sign it, although I have to review the final text and weigh everything," Putin said at a meeting of federal and regional officials that was shown live on the state's 24-hour news channel.

"I intend to sign not only the law ... but also a presidential decree that will modify the support mechanisms for orphaned children ... especially those who are in a difficult situation, by that I mean in poor health," Putin said.

Critics of the bill say the Russian authorities are playing political games with the lives of children, while the U.S. State Department repeated its "deep concern" over the measure.

"Since 1992 American families have welcomed more than 60,000 Russian children into their homes, and it is misguided to link the fate of children to unrelated political considerations," State Department spokesman Patrick Ventrell said in a statement.

Ventrell added that the United States was troubled by provisions in the bill that would restrict the ability of Russian civil society organizations to work with U.S. partners.

Children in Russia's crowded and troubled orphanage system - particularly those with serious illnesses or disabilities - will have less of a chance of finding homes, and of even surviving, if it becomes law, child rights advocates say.

They point to people like Jessica Long, who was given up shortly after birth by her parents in Siberia but was raised by adoptive parents in the United States and became a Paralympic swimming champion.

However, the Russian authorities point to the deaths of 19 Russian-born children adopted by American parents in the past decade, and lawmakers named the bill after a boy who died of heat stroke in Virginia after his adoptive father left him locked in a car for hours.

Putin reiterated Russian complaints that U.S. courts have been too lenient on parents in such cases, saying Russia has inadequate access to Russian-born children in the United States despite a bilateral agreement that entered into force on November 1.

NATIONAL IDENTITY

But Putin, who began a new six-year term in May and has searched for ways to unite the country during 13 years in power, suggested there were deeper motives for such a ban.

"For centuries, neither spiritual nor state leaders sent anyone abroad," he said, indicating he was not speaking specifically about Russia but about many societies.

"They always fight for their national identities - they gather themselves together in a fist, they fight for their language, culture," he said.

The bid to ban American adoptions plays on sensitivity in Russia about adoptions by foreigners, which skyrocketed as the social safety net unraveled with the 1991 Soviet collapse.

Families from the United States adopt more Russian children than those of any other country.

Putin had earlier described the Russian bill as an emotional but appropriate response to the Magnitsky Act, legislation signed by President Barack Obama this month as part of a law granting Russia "permanent normal trade relations" (PNTR) status.

The U.S. law imposes visa bans and asset freezes on Russians accused of human rights violations, including those linked to the death in a Moscow jail of Sergei Magnitsky, an anti-graft lawyer, in 2009.

The Russian bill would impose similar measures against Americans accused of violating the rights of Russian abroad and outlaw some U.S.-funded non-governmental groups.

(Reporting By Alexei Anishchuk; additional reporting by Andrew Quinn in Washington; Writing by Alissa de Carbonnel and Steve Gutterman; Editing by Andrew Osborn and Doina Chiacu)

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Egypt's Mubarak back in hospital as health worsens

CAIRO: Egypt's state prosecutor on Thursday ordered imprisoned former dictator Hosni Mubarak transferred to a military hospital after his health deteriorated, a source at the prosecutor's office said.

Mubarak, serving a life sentence over the killings of protesters, was briefly taken to hospital on December 19 for scans after he fell in his prison bathroom and hurt his head.

Mubarak, 84, will be returned to prison after he is treated, the source said.

A court sentenced the veteran strongman to life in June for failing to prevent the killings of protesters during the 18-day revolt that ended his three-decade rule in February 2011. Some 850 people died in the uprising.

Since his fall from power, Mubarak's health has appeared to deteriorate significantly, and he has suffered repeated health scares.

He spent nearly a month in hospital after he fell unconscious on June 19, with state media declaring him clinically dead on arrival. Medical sources however said he appeared to have fallen into a temporary coma.

During his time in power, the subject of his health was very much off-limits.

In 2004, he underwent surgery in Germany for a slipped disc, and he returned to Germany in March 2010 for the removal of his gall bladder and a growth on the small intestine.

During his time in power, he survived 10 attempts on his life.

-AFP/ac

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Microsoft to Google: You're not 'serious' about business apps

Even though Google execs have made some recent noises about making inroads on Microsoft's business-applications turf, the software giant claims it's not breaking a sweat.

Google "has not yet shown they are truly serious," about the enterprise app business, general manager in Microsoft's business division Julia White told the New York Times. "From the outside, they are an advertising company."

Google has increasingly beefed up its enterprise businesses, such as Google Apps and Google Cloud Services, which compete directly with Microsoft. Earlier this week, Google's head of enterprise Amit Singh announced to AllThingsD the company's goal of nabbing 90 percent of
Microsoft Office users. But, according to Business Insider, only 4 percent of Google's revenue in 2011 came from its enterprise services, while 96 percent came from advertising.

Office, by comparison, is one of Microsoft's biggest moneymakers. The company released Office 365 in June 2011, which gave users the option of using Office software in the cloud -- a clear shot across Google's bow.

White told the NYT that Office 365 is "on track to be our fastest-growing business." And in order for Google to be a serious competitor, it would have to "provide a quality enterprise experience" in areas like "privacy, data handling and security."

Microsoft, however, apparently has yet to see much revenue from Office 365. According to the Times, most users still prefer the company's older, more familiar Office software.

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Fmr. President Bush battling "stubborn" fever

Updated 6:40 p.m. ET

A "stubborn" fever that kept former President George H.W. Bush in a hospital over Christmas has gotten worse, and doctors have put him on a liquids-only diet, his spokesman said Wednesday, describing Bush's condition as guarded to CBS News.

Jim McGrath, Bush's spokesman in Houston, had said earlier in the day that the fever had gone away, but he later corrected himself.

"It's an elevated fever, so it's actually gone up in the last day or two," McGrath told The Associated Press. "It's a stubborn fever that won't go away."

"Following a series of setbacks including a persistent fever, President Bush was admitted to the intensive care unit at Methodist Hospital on Sunday where he remains in guarded condition," McGrath said in an emailed statement. "Doctors at Methodist continue to be cautiously optimistic about the current course of treatment. The President is alert and conversing with medical staff, and is surrounded by family."

Doctors at Methodist Hospital in Houston have run tests and are treating the fever with Tylenol, but they still haven't nailed down a cause, McGrath said. Doctors also have put Bush on a liquid diet, though McGrath could not say why.

The bronchitis-like cough that initially brought Bush to the hospital on Nov. 23 has improved, McGrath said. The 88-year-old is now coughing about once a day, he said.

Bush was visited on Christmas by his wife, Barbara, his son, Neil, and Neil's wife, Maria, and a grandson, McGrath said. Bush's daughter, Dorothy, will arrive Wednesday in Houston from Bethesda, Md. The 41st president has also been visited twice by his sons, George W. Bush, the 43rd president, and Jeb Bush, former governor of Florida.

Bush and his wife live in Houston during the winter and spend their summers at a home in Kennebunkport, Maine.

The former president was a naval aviator in World War II - at one point the youngest in the Navy - and was shot down over the Pacific. He achieved notoriety in retirement for skydiving on at least three of his birthdays since leaving the White House in 1992.

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WH Lashes Out at 'Congressional Stupidity'

With only days to come up with a deal to avoid the fiscal cliff, the White House said “congressional stupidity” was damaging the economy but that an agreement could be reached if Republican leaders don’t get in the way.

President Obama cut his Hawaiian vacation short and headed back to Washington today while the Senate is scheduled to reconvene on Thursday. House Speaker John Boehner, R-Ohio, said previously that he would give House members a 48-hour notice of any upcoming vote, which means that the soonest the House could consider a bill would be Saturday — just two days before a deadline to make a deal or trigger a rise in taxes and steep budget cuts.

Boehner and other GOP leaders issued a statement today following a conference call saying: “The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate.  If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House.”

While Boehner put the onus on the president and Senate Majority Leader Harry Reid, a White House official used testy language to  put the responsibility back on Boehner and Senate Minority Leader Mitch McConnell.

“What we need is for the Senate Minority Leader not to block a vote and for Boehner to allow a vote,” a White House official told ABC News. “The hits to our economy aren’t coming from outside factors, they’re coming from congressional stupidity.”

Reid’s plan would serve as a Democratic counterpart to Boehner’s plan B, which failed to gain enough support for a vote last week. Boehner left the ball in the Senate’s court after withdrawing  his plan Thursday.

Any plan from Reid is expected to include extending the Bush tax cuts for Americans making $250,000 or less.

Related: What if Bush tax cuts expire?

This has been a sticking point for the left and the right throughout discussions. Democrats believe that lower- and middle-class families should keep the  tax cut, while letting it expire for households making more than $250,000. Republicans counter that no Americans should be forced to pay higher taxes come Jan. 1, though Boehner’s plan would have required those making more than $1 million to lose the cut.

Reid could also propose cuts to tax deductions to generate more federal revenue.

Related: Can the mortgage deduction survive the fiscal cliff?

Michael Ettlinger, vice president for economic policy at the liberal think tank Center for American Progress, said that would make his plan very similar to Obama’s.

“I think this is likely to go smaller more than bigger as they try to gather votes in the Senate,” Ettlinger told ABC News Wednesday. “The Democratic vision of things is fairly clear. Where the Senate Republicans are willing to go is less so. That’s going to be the issue.”

Dan Holler of conservative policy advocacy group Heritage Action for America expects the plan to include an extension of unemployment benefits, something he says would be “extremely counterproductive for the economy.”

Democrats “see it as one of the most stimulative things you can do,” Holler told ABC News Wednesday. “Heritage has great research to go ahead and say this doesn’t really help.”

Related: Fiscal Cliff negotiators search for cuts without sacrifice.

In addition to an immediate measure to stop taxes from going up, Holler suggested there would be a mechanism to compel leaders to do more further down the road, a method he said has not historically been effective at reducing the deficit.

“I think Republicans are going to look at the entire package skeptically,” Holler said of Reid’s expected plan.

Boehner press secretary Michael Steel told ABC News the speaker’s office “will take a look” at Reid’s proposal once he brings it up for a vote or shares his ideas with the House.

Garnering consensus among both parties will be difficult for any plan now. Starbucks CEO Howard Schultz is trying to bring D.C. politicians together with every coffee cup sold in the District.

Critics have called into question  Boehner’s ability to bring his own party together.

“It seems that, in the House now, Boehner has no control over his extreme right-wing faction,” Sen. Bernie Sanders, I-Vt., said on MSNBC Wednesday. “You have, over in the House, a situation where the Republicans are saying, ‘Hey, we don’t think billionaires should pay a nickel more in taxes, but we do think there should be devastating cuts in programs that are impacting working families who are already hurting as a result of the recession.’ So that’s the problem that we have.”

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Syria to discuss Brahimi peace proposals with Russia

BEIRUT (Reuters) - Syrian President Bashar al-Assad sent a senior diplomat to Moscow on Wednesday to discuss proposals to end the conflict convulsing his country made by international envoy Lakhdar Brahimi, Syrian and Lebanese sources said.

Brahimi, who saw Assad on Monday and is planning to hold a series of meetings with Syrian officials and dissidents in Damascus this week, is trying to broker a peaceful transfer of power, but has disclosed little about how this might be done.

More than 44,000 Syrians have been killed in a revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.

Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.

Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.

However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.

He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.

"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.

Russia, which has given Assad diplomatic and military aid to help him weather the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.

"ASSAD CANNOT STAY"

A Russian Foreign Ministry source said Makdad and an aide would meet Foreign Minister Sergei Lavrov and Mikhail Bogdanov, the Kremlin's special envoy for Middle East affairs, on Thursday, but did not disclose the nature of the talks.

On Saturday, Lavrov said Syria's civil war had reached a stalemate, saying international efforts to get Assad to quit would fail. Bogdanov had earlier acknowledged that Syrian rebels were gaining ground and might win.

Given the scale of the bloodshed and destruction, Assad's opponents insist the Syrian president must go.

Moaz Alkhatib, head of the internationally-recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of real powers.

Comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was one of Brahimi's ideas.

"The government and its president cannot stay in power, with or without their powers," Alkhatib wrote, saying his Coalition had told Brahimi it rejected any such solution.

While Brahimi was working to bridge the vast gaps between Assad and his foes, fighting raged across the country and a senior Syrian military officer defected to the rebels.

Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.

The video, published by the Syrian Observatory for Human Rights, showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.

The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.

STRATEGIC BASE

Rebels relaunched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a battle for a major army compound and fuel storage and distribution point.

Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with a vehicle rigged with explosives.

The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several people killed in Wednesday's fighting, which it said was among the heaviest for months.

The military used artillery and air strikes to try to hold back rebels assaulting Wadi Deif and the town of Morek in Hama province further south. In one air raid, several rockets fell near a field hospital in the town of Saraqeb, in Idlib province, wounding several people, the Observatory said.

As violence has intensified in recent weeks, daily death tolls have climbed. The Observatory reported at least 190 had been killed across the country on Tuesday alone.

The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.

"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.

A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".

Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.

(Additional reporting by Laila Bassam; Writing by Alistair Lyon; Editing by Andrew Osborn)

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