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Ayman al-Zawahiri: From Cairo doctor to al-Qaeda leader

  • Join the teenage Muslim Brotherhood
  • From a respectable family in Cairo
  • He took control of al-Qaeda after the killing of bin Laden
  • He exercises his influence as an ideological and strategic organizer
  • I lack bin Laden’s charisma

DUBAI (Reuters) – Ayman al-Zawahiri succeeded Osama bin Laden in the leadership of al Qaeda after years as a key al Qaeda organizer and strategist, but his lack of charisma and competition from rival Islamic State fighters hampered his ability to launch major attacks on al Qaeda. the West.

US President Joe Biden said in a live television broadcast on Monday evening that Al-Zawahiri, 71, was killed in a US drone strike. US officials said the attack took place on Sunday in the Afghan capital, Kabul. Read more

In the years following bin Laden’s death in 2011, US airstrikes killed a succession of Zawahiri’s deputies, weakening the veteran Egyptian militant’s ability to coordinate globally.

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He had seen al-Qaeda virtually marginalized by the Arab revolutions of 2011, launched primarily by middle-class activists and intellectuals opposed to decades of authoritarianism.

Despite his reputation as an inflexible and combative figure, al-Zawahiri succeeded in nurturing loosely affiliated groups around the world that had grown to wage devastating insurgencies, some rooted in the turmoil caused by the Arab Spring. The violence has destabilized a number of countries across Asia, Africa, and the Middle East.

But the days of al-Qaeda as the hierarchical, centrally directed network of conspirators that attacked the United States on September 11, 2001, are long gone. Instead, militancy has returned to its roots in conflicts at the local level, spurred by a combination of local grievances and incitement by transnational jihadist networks using social media.

Al-Zawahiri’s origins in Islamic militancy go back decades.

The first time the world heard of him was when he stood in a cage in a courtroom after the assassination of Egyptian President Anwar Sadat in 1981.

"We have sacrificed and we are still ready for more sacrifices until the victory of Islam," al-Zawahiri chanted, wearing a white abaya, while angry at Sadat’s peace agreement with Israel.

Al-Zawahiri served a three-year prison sentence for illegal weapons possession, but was acquitted of the main charges.

A trained surgeon – one of his nicknames was a doctor – al-Zawahiri went to Pakistan on his release where he worked with the Red Crescent treating wounded Islamic mujahideen in Afghanistan fighting Soviet forces.

During that time, he became acquainted with bin Laden, a wealthy Saudi who joined the Afghan resistance.

Al-Zawahiri took over the leadership of Islamic Jihad in Egypt in 1993, and was a leading figure in the mid-1990s campaign to overthrow the government and establish a purely Islamic state. More than 1,200 Egyptians were killed.

The Egyptian authorities launched a crackdown on Islamic Jihad after the attempted assassination of President Hosni Mubarak in June 1995 in Addis Ababa. Al-Zawahiri, a gray-haired man in a white turban, responded by ordering a 1995 attack on the Egyptian embassy in Islamabad. Two cars packed with explosives crashed into the gates of the complex, killing 16 people.

In 1999, an Egyptian military court sentenced al-Zawahiri to death in absentia. By that time he was living the Spartan life of the militants after he helped bin Laden form Al Qaeda.

A video broadcast by Al Jazeera in 2003 showed the two men walking on a rocky mountainside – an image that Western intelligence hoped would provide clues to their whereabouts.

Global jihad threats

For years it was believed that al-Zawahiri was hiding along the forbidden border between Pakistan and Afghanistan.

This year, US officials determined that al-Zawahiri’s family — his wife, daughter, and children — moved to a safe house in Kabul and identified al-Zawahiri at the same location, according to a senior administration official.

The official said he was killed in a drone attack when he emerged from the balcony of the house on Sunday morning. No one else was injured. Al-Zawahiri took over the leadership of al-Qaeda in 2011 after the US Navy killed bin Laden in his hideout in Pakistan. He has since repeatedly called for global jihad, with an Ak-47 next to him during video messages.

In a eulogy for bin Laden, al-Zawahiri vowed to continue attacks on the West, recalling the threat of the Saudi-born mujahid that "you will not dream of security until we live it on the ground and until you leave Muslim lands."

As it turned out, the emergence of the more radical Islamic State in 2014-2019 in Iraq and Syria drew as much, if not more, attention from Western counterterrorism authorities.

Al-Zawahiri often tried to stir up feelings among Muslims by commenting online on sensitive issues such as US policies in the Middle East or Israeli actions against the Palestinians, but his extradition was deemed to lack bin Laden’s appeal.

On a practical level, al-Zawahiri is believed to be involved in some of al-Qaeda’s largest operations, as he helped orchestrate the 2001 attacks, when planes hijacked by al-Qaeda were used to kill 3,000 people in the United States.

He was charged with his alleged role in the 1998 bombings of the US embassies in Kenya and Tanzania. The FBI put a $25 million bounty on his most wanted list.

notable family

Al-Zawahiri did not emerge from the slums of Cairo, like others who were drawn to militant groups that promised a noble cause. Born in 1951 to a prominent family in Cairo, al-Zawahiri was the grandson of the imam of al-Azhar, one of Islam’s most important mosques.

Al-Zawahiri grew up in the leafy Cairo suburb of Maadi, a place favored by expats from the Western countries he criticizes. Al-Zawahiri, the son of a pharmacology professor, first embraced Islamic fundamentalism at the age of fifteen.

His ideas were inspired by the revolutionary ideas of the Egyptian writer Sayed Qutb, an Islamist who was executed in 1966 on charges of trying to overthrow the state.

People who studied with al-Zawahiri at Cairo University’s Faculty of Medicine in the 1970s describe a lively young man who went to the movies, listened to music, and joked with friends.

"When he got out of prison he was a completely different person," said a doctor who studied with al-Zawahiri and declined to be named.

In a courtroom cage after Sadat was assassinated in a military parade, al-Zawahiri addressed the international press, saying that the militants had suffered severe torture including flogging and wild dog attacks in prison.

"They arrested wives, mothers, fathers, sisters and sons in a trial to put psychological pressure on these innocent prisoners," he said.

His fellow prisoners said that these conditions further radicalized al-Zawahiri and set him on the path of global jihad.

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Editing by Howard Guller, Raju Gopalakrishnan and Stephen Coates

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Stephen King will strike in favor of the US government in a case against book publishing and mass merger

WASHINGTON (Reuters) – The U.S. Department of Justice asked a federal judge on Monday to block the merger of two "Big Five" book publishers, Penguin Random House and Simon & Schuster, in a trial expected to draw distinctive testimony from horror writer Stephen King.

"It’s real money for real people," said John Reed, an attorney for the Department of Justice.

Also Monday, in the same Washington federal court, the Department of Justice argued before a different judge that UnitedHealth’s (OH.N) $8 billion deal to buy Change Healthcare (CHNG.O) It must stop. Read more

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In the publisher consolidation experiment, the government is not focusing on what consumers pay for books but on advances paid to the most successful authors, especially those with $250,000 or more.

"Evidence will show that the proposed merger will likely result in expected bestseller authors receiving smaller upfront payments, meaning that authors who work for years on their manuscripts will be paid less for their efforts," the government said in a pre-trial brief.

The government also intends to show that there are concerns among the merging parties that the deal is illegal. It previously revealed an email sent by Simon & Schuster CEO Jonathan Karp, who wrote: "I’m pretty sure the Department of Justice won’t allow Penguin Random House to buy us, but that’s assuming we still have the Department of Justice."

King, author of "The Shining," "Carrie" and other blockbuster films, will testify to the government, along with publishing executives and author agents.

Michael Beach, CEO of Hachette Book Group, is due to testify on Monday, while King is expected to testify on Tuesday.

Penguin Random House, the largest book publisher in the United States, said it plans to buy rival Simon & Schuster in November 2020. Penguin Random House is owned by German media company Bertelsmann. (BTGGg.F). Simon & Schuster is owned by ViacomCBS, now known as Paramount Global (PARA.O). The Ministry of Justice filed its lawsuit in November 2021. Read more

Defense led by attorney Daniel Petrushelli who defeated the Trump administration’s 2018 bid to stop AT&T Inc (Tennessee) From buying Time Warner, he argued that the market for books and publishers to win best-selling authors is a competitive market and that a merger would make it more competitive.

Petroselli said in opening arguments that the government is asking the court to block the merger for "less than 100 books a year," rejecting the idea that the biggest booksellers would be able to reduce advances.

Publishers will argue that the evidence shows that when bidding for potential bestsellers, Penguin Random House and Simon & Schuster "are rarely the best bidders."

The top five publishers are Penguin Random House, HarperCollins, Macmillan, Simon & Schuster, and Hachette, with Walt Disney Co. (DIS.N) and Amazon.com Inc (AMZN.O) Also in the market. HarperCollins is owned by News Corp (NWSA.O).

U.S. District Judge Florence Bane for the District of Columbia will decide whether the deal can go ahead. The trial is expected to last two to three weeks.

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(cover) by Diane Bartz and David Shepardson in Washington. Editing by Matthew Lewis and Mark Porter

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US House Speaker Pelosi begins her Asian tour, without mentioning Taiwan

  • Pelosi is touring Singapore, Malaysia, South Korea and Japan
  • Taiwan is not mentioned on its agenda
  • Chinese Air Force confirms determination to defend Earth
  • Chinese military exercises in the South China Sea

BEIJING (Reuters) – U.S. House Speaker Nancy Pelosi kicked off a four-nation Asian tour on Sunday without mentioning Taiwan, her office said, amid intense speculation that she might visit the self-governing island claimed by China.

"House Speaker Nancy Pelosi is leading a congressional delegation to the Indo-Pacific region, including visits to Singapore, Malaysia, South Korea and Japan," her office said. statement.

She said the visit would include those countries, but did not specify whether Pelosi, who is third in the presidential succession streak, would stop again.

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"The trip will focus on mutual security, economic partnership and democratic governance in the Indo-Pacific region," she added.

Gregory Meeks, chair of the House Foreign Affairs Committee, was among the delegation.

Pelosi is expected to arrive in Singapore on Monday for a two-day visit, CNA reported, citing the country’s foreign ministry. The American Chamber of Commerce in Singapore was scheduled to host a reception with her on Monday afternoon, on its website.

China views US officials' visits to Taiwan as an encouraging sign for the island’s pro-independence camp. Washington does not have formal diplomatic relations with Taiwan but is obligated by law to provide the island with the means to defend itself.

Pelosi’s visit would be a dramatic, if not unprecedented, display of US support for Taiwan. Republican Newt Gingrich was the last House Speaker to visit Taiwan in 1997.

President Xi Jinping warned his US counterpart Joe Biden on Thursday that Washington must adhere to the one-China principle and "those who play with fire will die because of it."

Biden told Xi that US policy on Taiwan has not changed and Washington is firmly opposed to unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait. Read more

Taiwan’s Foreign Ministry said Friday after the call between Xi and Biden that Taiwan will continue to deepen its close security partnership with the United States.

State media quoted Chinese Air Force spokesman Shen Jinqi as saying on Sunday that Beijing "will resolutely maintain national sovereignty and territorial integrity."

At a military air show, Chen said the Air Force has many types of combat aircraft capable of circling the "precious island of our motherland," referring to Taiwan.

"The Chinese Air Force has the firm will, full confidence and sufficient capacity to defend national sovereignty and territorial integrity," he said.

A comment from a Chinese People’s Liberation Army unit on Weibo, the Chinese Twitter-like social media, posted on Friday – "Get ready for war!" He got 1.87 million thumbs up.

South China Sea

With the US aircraft carrier USS Ronald Reagan and its strike group back in the South China Sea by Thursday, the Chinese military has stepped up exercises in the vicinity.

On Saturday, the Chinese military conducted live-fire exercises in the waters off Fujian Province, more than 100 kilometers (62 miles) from Taiwan, according to local authorities.

The Chinese Coast Guard will conduct exercises in the South China Sea off Guangzhou Province on Monday, according to another notice issued by the Maritime Safety Administration.

Prominent Chinese commentator Hu Xijin said on Saturday he had deleted a tweet warning of military retaliation if US fighter jets accompanied Pelosi on a visit to Taiwan, after Twitter blocked his account. Read more

White House national security spokesman John Kirby said Friday that the United States has not seen any evidence of looming Chinese military activity against Taiwan. Read more

Biden told reporters on Wednesday that he believes the US military believes Pelosi’s visit to Taiwan "is not a good idea right now."

Pelosi’s Asian tour comes at a politically sensitive time for Chinese and American leaders.

Xi is expected to seek an unprecedented third term in Congress later this year, while in the United States, Biden’s Democratic Party will face a fierce battle to retain control of the US House of Representatives in the November midterm elections.

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(Reporting by Yu Lun Tian) Editing by William Mallard, Himani Sarkar and Sandra Maller

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Russia assigns mercenaries to frontline sectors as infantry losses mount – UK

  • Wagner fighters are unlikely to change the course of the invasion – UK
  • Ukraine is trying to disrupt supply lines and bomb bridges
  • Russia strikes Kyiv region for the first time in weeks

Kyiv (Reuters) – Russia has assigned mercenaries to keep parts of Ukraine’s front line, Britain’s Defense Ministry said on Friday, signaling it is short of combat infantry, as Kyiv ramps up a counter-offensive in the south. .

A greater reliance on paid fighters from Russia’s private military company Wagner Group to carry out front-line missions rather than their usual special operations work would be another sign that the Russian military is under pressure six months into its war in Ukraine.

But the British Ministry of Defense said in an intelligence update that it was unlikely that Wagner’s mercenaries would make up for the loss of regular infantry units or change the course of the Russian invasion.

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"This is a significant change from the group’s previous employment since 2015, when it normally carried out tasks different from regular, overt and large-scale Russian military activities," the ministry said on Twitter.

Outside normal business hours, Wagner and the Kremlin could not be reached for comment.

Officials in Kyiv said on Wednesday they had observed an "intense redeployment" of Russian forces in the south, where British defense officials believe the 49th Russian Army, stationed on the western bank of the Dnipro River, is at risk.

British intelligence said Thursday that the southern city of Kherson, key to Russia’s land supply lines from Russia-annexed Crimea, is now effectively cut off from other Russian-occupied territories.

The Kherson region fell to Russian forces shortly after the start of what Moscow calls a "special military operation" on February 24. Ukraine describes the Russian invasion as an imperial-style war of conquest.

The Ukrainian military has used long-range missile systems supplied by the West to severely damage three bridges across the Dnipro River in recent weeks, making it difficult for Russia to supply its forces on the West Bank.

Ukraine said its planes bombed five Russian strongholds around Kherson and another nearby city on Thursday, the epicenter of its biggest counterattack in the conflict.

Russia bombed the outskirts of Kyiv for the first time in weeks on Thursday. District Governor Oleksiy Kuleba said on Telegram that 15 people were wounded when rockets landed on military installations in the Vyshhorod district, on the outskirts of the capital.

Sirens sounded as Ukrainian President Volodymyr Zelensky addressed Parliament alongside visiting Lithuanian President Gitanas Noseda.

The attack shattered the sense of life returning to normal in Kyiv since Russian forces abandoned attempts to capture the city in the early weeks of the war, in the face of fierce Ukrainian resistance.

The region’s governor, Vyacheslav Chusov, told Ukrainian television on Thursday that more than 10 Russian missiles had hit the Chernihiv region, northeast of Kyiv. Like Kyiv, Chernihiv has not been targeted for weeks.

The Northern Command of the Ukrainian Armed Forces said that more than 20 missiles were fired at the Chernihiv region bordering Russia from a base in Belarus, an ally of Russia.

Reuters was unable to verify the battlefield reports.

Eastern Front

Ukraine’s counterattacks in the south come as Russia continues its battle for control of the entire Donbass industrial region in the east, which includes the Donetsk and Luhansk provinces.

Donetsk region governor Pavlo Kirilenko said on Telegram that Russian forces bombed the town of Bakhmut, which Russia described as a key target in its advance through Donetsk, four times on Thursday. He added that at least three people were killed and three wounded.

As the fighting raged, international efforts continued to try to reopen Ukrainian ports and allow the export of grain and other goods.

Allowing the safe passage of grain shipments from Ukraine should alleviate shortages that have left tens of millions of people around the world facing soaring food prices and starvation.

Russia and Ukraine struck a deal last week to lift a ban on grain exports from Black Sea ports, but UN aid coordinator Martin Griffiths said "critical" details of safe passage for ships were still being worked out.

Griffiths had hoped the first shipment of grain would be shipped from a Ukrainian port on the Black Sea as early as Friday. Read more

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Reporting by Reuters offices. Written by Stephen Coates. Lincoln Fest Editing.

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Biden begins his fifth call with the Chinese president, as he looks to de-escalate tensions in Taiwan

WASHINGTON (Reuters) – U.S. President Joe Biden and Chinese President Xi Jinping began their fifth call as leaders on Thursday, as concerns mounted over a possible visit to Taiwan demanded by China, U.S. House of Representatives Speaker Nancy Pelosi.

The White House said the call began at 8:33 a.m. (1233 GMT) and US officials said it would have a broad agenda, including a discussion of Russia’s invasion of Ukraine, which China has not yet condemned.

In essence, US officials see the exchange as another opportunity to manage competition between the world’s two largest economies, whose relations are increasingly skewed by tensions over democratically governed Taiwan, which Xi has vowed to reunite with the mainland, by force if necessary.

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Beijing has issued mounting warnings of repercussions for Pelosi to visit Taiwan, a move that would be a dramatic, if unprecedented, display of US support for the island, which it says faces growing Chinese military and economic threats.

Washington has no official relations with Taiwan and follows a "one China" policy, which recognizes Beijing and not Taipei diplomatically. But it is obligated by US law to provide the island with the means to defend itself, and pressure has grown in Congress for more visible support.

White House national security spokesman John Kirby told reporters on Wednesday.

One of the people briefed on the planning for the call said the Biden administration believes that leader-to-leader engagement is the best way to reduce tensions over Taiwan.

Some analysts believe Xi also has an interest in avoiding escalation as he seeks an unprecedented third term in office at China’s ruling Communist Party congress expected in the fall.

Biden also wants to discuss climate issues and economic competition, the person briefing said, as well as the idea of ​​capping the price of Russian oil to punish Moscow for its war in Ukraine, an issue Treasury Secretary Janet Yellen raised with her Chinese counterparts earlier. July. Read more

The Biden administration is debating whether to raise some tariffs on Chinese goods as a way to mitigate rising inflation, but US officials said the decision was not expected before the call. Read more

When Biden last spoke to Xi in March, he warned of "consequences" if Beijing provided material support for Russia’s war, and the US government believes that red line has not been crossed in the months since.

Taiwan has complained of intensifying Chinese military exercises over the past two years to try to force it to accept Beijing’s sovereignty. Just before the phone call Thursday, Taiwan’s military said it had fired flares to warn a drone that had "peeked" at a strategically located and heavily fortified island near the Chinese coast that may have been searching its defenses. Read more

Toxic links

The White House has reiterated that the "one China" policy has not changed despite speculation about Pelosi’s possible visit, which the speaker has not yet confirmed.

The last time the speaker of the US House of Representatives visited Taiwan was in 1997, and as an equal branch of government, the US executive has little control over travel within Congress.

China has grown militarily and economically powerful since then, and some analysts fear that such a visit at a time of fraught relations could lead to a crisis across the 100-mile (160 kilometer) wide waterway separating China and Taiwan.

Bonnie Glaser, a China expert at the German Marshall Fund in the United States, said.

She said Biden and Xi need to focus their advocacy on de-escalation, including potential mechanisms to reduce the risk of mishaps.

Kirby said the administration is in touch with Pelosi’s office to make sure it has "all the context" it needs to make decisions about her travel.

China has offered little indication of specific responses it might take if Pelosi, a longtime critic of China, especially on human rights issues, goes to Taiwan.

Raising the Taiwan issue could serve as a domestic distraction from the slowing Chinese economy, said Martin Chorzimba, a senior fellow at the Peterson Institute for International Economics, but "any reaction strong enough to impose US sanctions will do serious damage to China and the world economy." Read more

Chinese state media said Thursday that the country will try hard to achieve the best possible results for the economy this year, ignoring previous calls that it will strive to achieve its 2022 growth target. This came after a high-level meeting of the Communist Party chaired by Xi. Read more

Scott Kennedy, of the Washington Center for Strategic and International Studies, said he did not believe the two sides were on the brink of a crisis, but that "the risk of a major crisis is well above zero" and it was important to avoid Biden’s invitation to Xi. Unwelcome clash.

"Beijing, Taipei, and Washington are full of people immersed in how to send and interpret signals that convey threats and reassurance, and I’m sure no one wants war right now."

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Additional reporting by Michael Martina, Trevor Honeycutt, David Bronstrom and Garrett Renshaw; Additional reporting by Martin Quinn Pollard in Beijing. Editing by Raju Gopalakrishnan, Philippa Fletcher and Bernadette Bao

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Russia-occupied Kherson cut off due to Ukraine counter-attacks – Britain

  • Ukraine’s counter-offensive in Kherson is gaining momentum – UK
  • Ukraine says Russia is conducting "large-scale redeployment" in the south
  • Russian-backed forces take control of the Vohlhersk plant
  • Blinkin says he plans to make a call with Russian Lavrov

(Reuters) – British defense and intelligence officials said on Thursday that a Ukrainian counterattack had effectively cut off the Russian-occupied southern city of Kherson and left thousands of Russian troops stationed near the Dnipro River "extremely weakened".

Ukraine has made it clear that it intends to regain control of Kherson, which fell to Russia in the early days of the invasion launched by Russian President Vladimir Putin on February 24.

The British Ministry of Defense said Ukrainian forces likely established a bridge south of the Ingolets River, and used new, long-range artillery to destroy at least three of the bridges crossing the Dnipro River.

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"The 49th Russian army stationed on the western bank of the Dnipro River now appears highly vulnerable," she said in a regular intelligence bulletin on Twitter, adding that Kherson is effectively isolated from other Russian-occupied territories.

His loss would severely undermine Russia’s attempts to portray the occupation as a success.

Oleksiy Danilov, secretary of Ukraine’s National Security and Defense Council, had earlier tweeted that Russia was concentrating "maximum number of forces" in the direction of Kherson, but gave no details.

Oleksiy Aristovich, an adviser to Ukrainian President Volodymyr Zelensky, said Russia is conducting an "extensive redeployment" of forces from east to south in what amounts to a strategic shift from offensive to defense.

Zelensky said Ukraine would rebuild the Antonevsky Bridge over the Dnipro River and other crossings in the region.

"We are doing everything we can to ensure that the occupation forces do not have any logistical opportunities in our country," he said in a speech on Wednesday evening.

Russian officials had previously said they would instead go to bridges and pontoon ferries to ferry troops across the river.

Russia-backed forces said on Wednesday they had captured the Soviet-era Volhersk coal-fired power plant, Ukraine’s second largest, in what was Moscow’s first major gain in more than three weeks. Read more

Diplomacy

Russia invaded Ukraine on February 24 in what Moscow called a "special military operation" to disarm and "disarm" its neighbor. Ukraine and its allies describe the invasion as an unjustified war of aggression.

US Secretary of State Anthony Blinken said he plans to have a phone conversation with Russian Foreign Minister Sergei Lavrov – the first among diplomats since before the war began.

Blinken told a news conference that the call in the coming days would not be "negotiations on Ukraine," reiterating Washington’s position that any talks on ending the war should be between Kyiv and Moscow.

Russia has not received any official request from Washington regarding a phone call between Blinkin and Lavrov, TASS news agency reported.

Blinken said the US made a "big offer" to Russia to release US citizens, WNBA star Britney Grenier and former US Marine Paul Whelan, without giving details of what the US would offer in return. Read more

Blinken said he would pressure Lavrov to respond to the offer.

A source familiar with the situation confirmed a CNN report that Washington was willing to exchange Russian arms smuggler Victor Bout, who is serving a 25-year prison sentence in the United States, as part of a deal.

Aside from discussing the Americans being held by Russia, Blinken said he and Lavrov would bring up the preliminary agreement on grain exports reached last week between Russia, the United States, Turkey and Ukraine.

Russia cut gas flows to Europe on Wednesday in an energy standoff with the European Union. It has blocked grain exports from Ukraine since the invasion, but agreed on Friday to allow shipments through the Black Sea to the Bosphorus strait in Turkey and to global markets. Read more

The deal became doubtful almost immediately when Russia launched cruise missiles at Odessa, Ukraine’s largest port, on Saturday, just 12 hours after the deal was signed.

Before the invasion and subsequent sanctions, Russia and Ukraine accounted for nearly a third of global wheat exports.

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Reporting by Reuters offices. Written by Grant McCall and Stephen Coates; Editing by Cynthia Osterman and Lincoln Fest.

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Samsung warns of weak demand for chips for phones and computers as people shop less

Samsung Electronics' logo appears in its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong Ji

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  • Server customers may have to adjust inventory in the event of a recession – Samsung official
  • H2 foldable phone sales aim to surpass the previous flagship
  • Strong Dollar Helped Take Profits in Q2

SEOUL, July 28 (Reuters) – Samsung Electronics Co., Ltd. (005930.KS) He warned demand for chips from smartphones and PCs would weaken further as shopping drops, and that more resilient demand from server customers may also see adjustments amid recession fears.

While the world’s largest maker of memory chips and smartphones had its best operating profit from April to June since 2018 on strong demand for server chips, it said its mobile business saw earnings weaken amid geopolitical issues, inflation concerns, rising components and logistics costs. Read more

“Server (chip demand) is less affected by macro issues…but in the event of a global recession, server customers will also have to adjust their inventory,” Jin Man Han, executive vice president of Samsung’s memory chip business, said at a conference. a call.

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"Due to the high level of uncertainty, we are constantly updating our forecasts," he added.

Earlier, San Diego-based Qualcomm Inc (QCOM.O) He warned that fourth-quarter sales were hurt by lower smartphone demand, adding to the chorus of voices warning about chip sales as severe inflation pressures consumer spending.

Also, the Ukrainian crisis and the shutdown of COVID-19 in China, the world’s largest smartphone market, have exacerbated supply chain hurdles, forcing many phone makers to cut chip orders.

Han said Samsung will respond to the uncertainty with "flexible" deployment of short-term capital expenditures and a disciplined supply of chips to match demand.

Cape Investment & Securities analyst Park Sung-Soon said he expects "capital spending cuts by Samsung and SK Hynix for the next year in the memory chip industry."

However, Samsung was relatively upbeat about smartphone demand in the second half, saying that the company’s supply disruptions were mostly resolved and that demand would either remain flat or even see single-digit growth.

Sales of foldable phones aim to outpace sales of its previous flagship smartphone, the Galaxy Note, in the second half. It is expected to unveil the latest foldable devices on August 10.

Best Q2 profit since 2018

Samsung’s operating profit rose to 14.1 trillion won ($10.8 billion) for the quarter ended June 30 from 12.57 trillion won a year earlier, the highest profit in the second quarter since 2018 and also slightly more than its own estimate of 14 trillion won.

The earnings included chip earnings of 9.98 trillion won and mobile phone business earnings of 2.62 trillion won.

"Primary demand for servers (memory chips) will remain strong as investments in core infrastructure and new growth areas such as artificial intelligence and 5G are expected to continue to expand, with a focus on large data center companies," Samsung said.

TSMC (2330.TW), the world’s largest chipmaker, earlier this month also touted demand for its high-tech chips used in data centers. Read more

However, smaller competitor SK Hynix 000660.KS said on Wednesday that demand for server memory chips is likely to slow in the second half as data center customers use their inventory while preparing for a downturn. Read more

Samsung’s April-June revenue rose 21% to 77.2 trillion won.

The firm said a strong dollar also helped Samsung’s chipset profits, boosting its operating profit by 1.3 trillion won compared to the previous quarter.

Samsung’s chip sales are primarily in dollars, while it reports its earnings in Korean won, so a strong dollar translates to higher chip earnings.

The company’s shares rose 0.7% in afternoon trading, versus a 1% rise in the broader market (.KS11) And a 0.3% drop in memory chip rival SK Hynix shares.

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(Additional reporting by Joyce Lee and Hekyung Yang.) Edited by Himani Sarkar

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Russia tells that NASA’s space station withdrawal is less imminent than previously reported

The International Space Station (ISS) is photographed by the Expedition 56 crew of the Soyuz spacecraft after dismantling, October 4, 2018. NASA/Roscosmos/Handout via REUTERS/File Photo

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A senior NASA official told Reuters on Wednesday that Russian space officials have told their American counterparts that Moscow wants to continue transporting its astronauts aboard the International Space Station (ISS) until their orbital site is built and operational. .

Combined with comments by a senior Russian space official published on Wednesday, the latest indications are that Russia still has at least six years to end an orbital cooperation with the United States dating back more than two decades.

A split in the International Space Station program seemed closer to hand on Tuesday, when Yuri Borisov, the newly appointed director general of the Russian space agency Roscosmos, surprised NASA by announcing that Moscow intended to withdraw from the space station partnership "after 2024." Read more

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Russian officials told the US space agency later on Tuesday that Russia’s Roscosmos wanted to remain in the partnership while Russia operates its planned orbital position, called ROSS, NASA chief space operations officer Kathy Lueders said in an interview.

"We are not getting any indication at any level of work that anything has changed," Luders told Reuters on Wednesday, adding that NASA’s relationships with Roscosmos remain "business as usual."

The space station, a science laboratory that spans the size of a football field and orbits about 250 miles (400 kilometers) above Earth, has been continuously occupied for more than two decades under a partnership led by the United States and Russia that also includes Canada, Japan and 11 European countries.

It offers one of the last vestiges of cooperation between the United States and Russia, though its fate has been in question since Russia invaded Ukraine in February, straining bilateral relations on several fronts as the Biden administration imposed economic sanctions on Moscow.

The Ukraine conflict has also raised tensions between the Russian space agency (Roscosmos) and the European Space Agency (ESA).

No formal agreement has yet been reached to extend Russia’s participation in the International Space Station beyond 2024. Lueders said that NASA, Roscosmos, ESA and other station partners plan to discuss the possibility of extending each other’s presence in the lab until 2030 during a regular meeting Friday of the board, which Supervising the management of the station.

On its website, on Wednesday, Roscosmos published an interview with Vladimir Solovyov, flight director of the Russian section of the space station, who was quoted as saying that Russia should remain at the station until Russia works.

Solovyov said he expects the ROSS to be fully assembled into orbit sometime in 2028.

"We, of course, need to continue operating the ISS until we create a fairly tangible backlog of ROSS," Solovyov said. "We must bear in mind that if we stop manned flights for several years, it will be very difficult to restore what has been achieved."

The American and Russian parts of the space station were intentionally built to be so interconnected and technically interconnected, that any abrupt withdrawal of Russian cooperation aboard the International Space Station could seriously disrupt one of the main pillars of NASA’s human spaceflight program.

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(Reporting by Joey Rowlett) Editing by Jonathan Otis and Will Dunham

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Russia cuts gas flows further as it urges Europe to save energy

Pipes are photographed at the landing facilities of the Nord Stream 1 gas pipeline in Lubmen, Germany, March 8, 2022. REUTERS/Hannibal Hanschke/

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FRANKFURT/LONDON (Reuters) – Russia delivered less gas to Europe on Wednesday in another escalation in the face of an energy crisis between Moscow and the European Union that will make it difficult for the European Union to fill up more expensive stocks. Before the winter heating season.

Cut off supplies, indicated by Gazprom (GAZP.MM) Earlier this week, it reduced the capacity of the Nord Stream 1 pipeline – the main delivery route to Europe for Russian gas – to a fifth of its total capacity.

Nord Stream 1 accounts for about a third of all Russian gas exports to Europe.

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European Union countries agreed on Tuesday a weak contingency plan to curb gas demand after striking compromise deals to limit cuts in some countries, hoping that lower consumption would mitigate the impact if Moscow halted supplies altogether. Read more

The plan highlights concerns that countries will not be able to meet targets to refill storage and keep their citizens warm during the winter months and that Europe’s fragile economic growth could suffer another blow if gas rationing is to be made. Read more

Royal Bank of Canada analysts said the plan could help Europe get through the winter provided gas flows from Russia are within 20-50% of capacity, but cautioned against "market complacency, and European politicians have now resolved the issue of gas dependence." Russian".

While Moscow has blamed delays in returning serviced turbines and sanctions for cutting supplies, Brussels has accused Russia of using energy as a weapon to blackmail the bloc and retaliate against Western sanctions over its invasion of Ukraine.

Gazprom Executive Vice President Vitaly Markelov said that the company has not yet received a Siemens turbine used at the Nord Stream 1 Portovaya compressor plant, which is undergoing maintenance in Canada.

Markelov said there were sanctions risks associated with the machines, while Siemens Energy said Gazprom needed to provide customs documents to return the turbine to Russia.

save gas

On Wednesday, physical flows through Nord Stream 1 fell to 14.4 million kWh between 1200-1300 GMT from about 28 million kWh the day before, already just 40% of normal capacity. The drop comes less than a week after the pipeline was restarted after a scheduled 10-day maintenance period.

European politicians have repeatedly warned that Russia could completely shut down gas flows this winter, which could push Germany into recession and push prices for consumers and industry even higher.

The Netherlands' wholesale gas price for August, the European benchmark, rose 7% to €210 per megawatt-hour on Wednesday, nearly 400% more than last year.

Germany, Europe’s largest economy and largest importer of Russian gas, has been hit particularly hard by supply cuts since mid-June, with its gas importer Uniper. (UN01.DE) As a result, it required a 15 billion euro ($15.21 billion) government bailout.

Environmental Transition Minister Roberto Cingolani has warned that Italy, another major importer that normally gets 40% of its gas from Russia, will face a gas supply crisis at the end of next winter if Russia halts supplies altogether. Read more

Uniper and Eni Italian (ENI.MI) Both said they received less gas from Gazprom than in recent days.

German Finance Minister Christian Lindner said he is open to using nuclear power to avoid electricity shortages. Read more

Germany said it could extend the life of its three remaining nuclear plants, which produce 6% of their energy, if Russia decided to cut them off from gas.

Klaus Müller, head of the country’s grid regulator, said Germany can still avoid gas shortages that could push it to rationing, while making another appeal to homes and industry to "save gas".

However, German industry groups have warned that companies may have no choice but to cut production to achieve greater savings, citing slowing approval to replace natural gas with other, more polluting fuels. Read more

Mercedes Benz (MBGn.DE) CEO Ola Kaellenius said a combination of efficiency measures, increased electricity consumption, lower temperatures in production facilities and a switch to oil could cut gas use by up to 50% during the year, if needed.

Germany is currently in the second phase of its three-phase emergency gas plan, with the final phase starting once rationing can no longer be avoided.

(1 dollar = 0.9862 euros)

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Additional reporting by Paul Carrell and Rachel Moore in Berlin, Christoph Stitz in Frankfurt and Nina Chestney in London; Additional reporting by Angelo Amanti in Rome and my Reuters offices; Editing by Eileen Hardcastle and Thomas Janowski

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Microsoft is allaying market concerns by anticipating strong revenue growth

The Microsoft logo appears in Los Angeles, California, US, November 7, 2017. REUTERS/Lucy Nicholson

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July 26 (Reuters) – Microsoft Corporation (MSFT.O) On Tuesday, it forecast revenue this fiscal year to grow by double digits, driven by demand for cloud computing services and sending stocks up 5%.

The strong outlook shows that Microsoft continues to benefit from the pandemic-led shift to hybrid business models and comes at a time when investors are bracing for an economic downturn, with inflation rising and consumers cutting back on spending.

Bob O’Donnell, an analyst at TECHnalysis Research, said Microsoft’s forecast shows that despite negative economic trends, companies continue to move more business and work online.

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"I don’t think it’s unique to Microsoft," he said of the outlook. "Microsoft is very well positioned because of its portfolio of businesses and the critical role that its software and services for enterprises play."

Despite positive expectations for the fiscal year beginning July 1, Microsoft’s fourth-quarter results were slightly wrong, weighed down by a stronger dollar, slowing PC sales and lower advertiser spending.

Microsoft still had the best quarter for its cloud business with record bookings for its cloud service called Azure, said Brett Iverson, Microsoft’s general manager of investor relations.

Azure’s growth was 40%, and it missed the 43% analyst target collected by Visible Alpha. It rose by 46% if foreign exchange factors were eliminated. In the broader smart cloud division, revenue rose 20% to $20.9 billion, beating Wall Street’s average target of $19.1 billion, according to Refinitiv.

For the first quarter ended September 30, the smart cloud division was expected to bring in $20.3 billion to $20.6 billion, with the upper end slightly higher than analysts' expectations.

“We are seeing larger and longer-term engagements and won a record number of deals in excess of $100 million and over $1 billion this quarter,” said CEO Satya Nadella. "We have more data center regions than any other provider and will launch 10 within the next year."

Microsoft is facing pressure from the strong dollar as it gets about half of its revenue from outside the US. This led the company to lower its earnings and revenue forecast for the fourth quarter in June. Shares of the Redmond, Washington company are down about 25% this year. Read more

The US dollar index is up more than 2% in the quarter ending in June and about 12% this year, compared to a 1% decline a year earlier for the same period.

Without the stronger dollar, Iversen told Reuters the company’s 12% year-over-year revenue growth would have been 4 percentage points higher. Three major factors reduced fourth-quarter revenue by nearly $1 billion.

Foreign exchange negatively impacted revenues by about $600 million. The slowdown in the PC market has caused Windows OEM revenue of more than $300 million. The slowdown in ad spend has also affected LinkedIn, search and news ad revenue by more than $100 million.

“Because Microsoft is as big as it is, it’s hard for it not to reflect the overall economy," said John Freeman, vice president of equity research at CFRA Research. "We have inflation and it is clear that this will reduce consumer demand."

The company said the slump in consumer demand also affected gaming revenue, which fell 7% year-on-year due to lower Xbox hardware, content and services. It is expected to decline in low to mid single digits this quarter, driven by lower first-party content.

Microsoft reported revenue of $51.87 billion in the fourth quarter, compared to $46.15 billion a year earlier. Analysts, on average, expected revenue of $52.44 billion, according to Refinitiv IBES data.

Net income rose to $16.74 billion, or $2.23 per share, for the quarter ended June 30, from $16.46 billion, or $2.17 per share, a year earlier.

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Additional reporting by Akash Sriram in Bengaluru and Jane Lee in San Francisco; Editing by Peter Henderson and Lisa Schumaker

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