Egypt opposition protests against constitution

CAIRO (Reuters) - Opponents of Egyptian President Mohamed Mursi staged protests in Cairo on Tuesday against an Islamist-backed draft constitution that has divided Egypt but looks set to be approved in the second half of a referendum this weekend.

Several hundred protesters outside the presidential palace chanted "Revolution, revolution, for the sake of the constitution" and called on Mursi to "Leave, leave, you coward!". While the protest was noisy, numbers were down on previous demonstrations.

Mursi obtained a 57 percent "yes" vote for the constitution in the first part of the referendum last weekend, state media said, less than he had hoped for.

The opposition, which says the law is too Islamist, will be encouraged by the result but is unlikely to win the second part this Saturday, which is to be held in districts seen as even more sympathetic towards Mursi's Muslim Brotherhood.

The National Salvation Front opposition coalition said there were widespread voting violations last Saturday and called for protests to "bring down the invalid draft constitution".

The Ministry of Justice said it was appointing judges to investigate complaints of voting irregularities.

Opposition marchers converged on Tahrir Square, cradle of the revolution that toppled Hosni Mubarak almost two years ago, and Mursi's presidential palace, still ringed with tanks after earlier protests.

A protester at the presidential palace, Mohamed Adel, 30, said: "I have been camping here for weeks and will continue to do so until the constitution that divided the nation, and for which people died, gets scrapped."

The build up to the first day of voting saw clashes between supporters and opponents of Mursi in which eight people died. Recent demonstrations in Cairo have been more peaceful, although rival factions clashed on Friday in Alexandria, Egypt's second biggest city.

RESIGNATION

Egypt's public prosecutor resigned under pressure from his opponents in the judiciary, dealing a blow to Mursi and drawing an angry response from his supporters in the Muslim Brotherhood.

In a statement on its Facebook page, the Islamist group that propelled Mursi to power in an election in June, said the enforced departure of public prosecutor Talaat Ibrahim was a "crime" and authorities should not accept the resignation.

Further signs of opposition to Mursi emerged when a judges' club urged its members not to supervise Saturday's vote. But the call is not binding and balloting is expected to go ahead.

If the constitution is passed, national elections can take place early next year, something many hope will help end the turmoil that has gripped Egypt since the fall of Mubarak.

The closeness of the first referendum vote and low turnout give Mursi scant comfort as he seeks to assemble support for difficult economic reforms.

"This percentage ... will strengthen the hand of the National Salvation Front and the leaders of this Front have declared they are going to continue this fight to discredit the constitution," said Mustapha Kamal Al-Sayyid, a professor of political science at Cairo University.

Mursi is likely to become more unpopular with the introduction of planned austerity measures, Sayyid told Reuters.

To tackle the budget deficit, the government needs to raise taxes and cut fuel subsidies. Uncertainty surrounding economic reform plans has already forced the postponement of a $4.8 billion loan from the International Monetary Fund. The Egyptian pound has fallen to eight-year lows against the dollar.

Mursi and his backers say the constitution is needed to move Egypt's democratic transition forward. Opponents say the document is too Islamist and ignores the rights of women and of minorities, including Christians who make up 10 percent of the population.

Demonstrations erupted when Mursi awarded himself extra powers on November 22 and then fast-tracked the constitution through an assembly dominated by his Islamist allies and boycotted by many liberals.

The referendum has had to be held over two days because many of the judges needed to oversee polling staged a boycott in protest. In order to pass, the constitution must be approved by more than 50 percent of those voting.

(Additional reporting by Tamim Elyan and Edmund Blair; Writing by Giles Elgood; Editing by Alison Williams)

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Merry Christmas, America-Haters?

When TNT was preparing its annual special “Christmas in Washington” with the president of the United States, you’d think the last star musician they would consider to join the official caroling would be Psy, the South Korean rapper. What on Earth is Christmasy about this man’s invisible-horse-riding dance to his dorky disco-rap hit “Gangnam Style”? It’s not exactly the natural flip-side to “O Holy Night.” But TNT couldn’t resist this year’s YouTube sensation.

This inane publicity stunt backfired when the website Mediaite reported on Dec. 7 that Psy (real name: Park Jae-sang) had participated in a 2002 protest in which he crushed a model of an American tank with a microphone stand. But that’s nothing compared to the footage of a 2004 performance after a Korean missionary was slaughtered by Islamists in Iraq. These lyrics cannot be misunderstood.

“Kill those f—-ing Yankees who have been torturing Iraqi captives … Kill those f—-ing Yankees who ordered them to torture … Kill their daughters, mothers, daughters-in-law and fathers … Kill them all slowly and painfully.”

This isn’t just anti-American. It’s anti-human.

Guess where this story first surfaced in the American media? CNN, from the same corporate family tree as TNT. It was posted back on Oct. 6 on CNN’s iReport, an open-source online news feature that allows users to submit stories for CNN consideration.

The Korean one-hit wonder put out the usual abject careerist apology, but he weirdly said, “I’m deeply sorry for how these lyrics could be interpreted.” Those darn lyrics and those darn people who misinterpret lyrics about killing Yankees’ mothers. It is like Barack Obama expressing regret for the awful things said about Susan Rice, ignoring the awful things said by Susan Rice.

Psy is now a millionaire. As Jim Treacher wrote at the Daily Caller: “So far he’s made over $ 8 million from the song, about $ 3 million of it from the people he once wanted to kill.” Brad Schaeffer at Big Hollywood noted his own father fought for South Korea’s independence in the Korean War: “Had it not been for ‘f——-g Yankees’ like my Dad, this now-wealthy South Korean wouldn’t be ‘Oppan Gangnam Style’ so much as ‘Starving Pyongyang Style.’” (Gangnam is a posh district in the South Korean capital of Seoul.)

Despite the controversy, neither the Obama White House nor the TNT brass felt it was necessary to send Psy packing before the Dec. 9 taping. On Saturday, ABC reporter Muhammad Lila merely repeated, “the White House says the concert will go on and that President Obama will attend, saying that they have no control over who performs at that concert.”

What moral cowardice. On Monday morning, another pliant publicist, NBC correspondent Peter Alexander, calmly relayed that the White House did take control on the Psy front — on its own “We The People” website, where the people may post petitions to the president for their fellow citizens to sign. A petition asking Obama to dump Psy from the Christmas concert was itself dumped. Alexander explained: “But that petition was removed because the rules say the petitions only apply to federal actions. And, of course, the President had no say over who the private charity chose to invite.”

This is double baloney. The White House hasn’t removed silly “federal action” petitions like the one asking to “Nationalize the Twinkie Industry,” or one to “Secure resources and funding, and begin construction of a Death Star by 2016.” They removed one that they didn’t want people to sign.

As for Obama having “no say over” who appeared on the TNT show, the president could easily declare he wasn’t going to share a stage with this America-hater. Or he could have obviously placed one phone call to Time Warner CEO Jeff Bewkes (an Obama donor), and expressed the dismay of the President of the United States.

Instead, the Obamas came and honored Psy. Yes, the president honored a man who despised America enough to want its citizens slaughtered.

John Eggerton of Broadcasting and Cable magazine observed, “At the end of the taping, when the First Family customarily shakes hands and talks briefly with the performers, the First Lady gave Psy a hug, followed by a handshake from the President, who engaged Psy in a short, animated discussion — at one point Psy appeared to rock back with laughter — and patted the singer on the shoulder.”

I never thought I’d ever view a Christmas special featuring a hideous hater of America celebrated by the President of the United States.

L. Brent Bozell III is the president of the Media Research Center. To find out more about Brent Bozell III, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2012 CREATORS.COM

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Experts: No link between Asperger's, violence

NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.

Asperger's is a mild form of autism often characterized by social awkwardness.

"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.

Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.

A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.

High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.

Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.

"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.

"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.

Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.

Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.

"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.

She said those with Asperger's tend to focus on rules and be very law-abiding.

"There's something more to this," she said. "We just don't know what that is yet."

After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.

__

AP Writer Matt Apuzzo contributed to this report.

___

Online:

Asperger's information: http://1.usa.gov/3tGSp5

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S&P 500 rises more than 1 percent

In the aftermath of Friday's Newtown school shooting, we've heard tales mostly horrifying and occasionally heroic, from surviving witnesses and mourning citizens alike, but this one lies somewhere in between, all the more unshakeable. One six-year-old Sandy Hook student played dead in her first-grade classroom, her family pastor said late Sunday, with the kind of quick thinking that ended up saving her life but now leaves her with the unshakeable memories of watching all her classmates being shot and killed. ...

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Syrian vice president says neither side can win war

BEIRUT (Reuters) - Syrian Vice President Farouq al-Sharaa said that neither the forces of President Bashar al-Assad nor rebels seeking to overthrow him can win the war which is now being fought on the outskirts of Assad's powerbase in Damascus.

Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely been seen since the Syrian revolt erupted in March 2011 and is not part of the president's inner circle directing the fight against Sunni rebels.

But he is the most prominent figure to say in public that Assad will not win. He was speaking to Lebanon's al-Akhbar paper in an interview from Damascus, which is now hemmed in by rebel fighters to the south.

Assad's forces have used jets and artillery to try to dislodge the fighters from around Damascus but the violence has crept into the heart of the capital and activists said rebels overran three army stations in a new offensive in the central province of Hama on Monday.

Sharaa said the situation in Syria, where more than 40,000 people have been killed, was deteriorating and a "historic settlement" was needed to end the conflict, involving regional powers and the U.N. Security Council and the formation of a national unity government "with broad powers".

"With every passing day the political and military solutions are becoming more distant. We should be in a position defending the existence of Syria. We are not in a battle for an individual or a regime," Sharaa was quoted as saying.

"The opposition cannot decisively settle the battle and what the security forces and army units are doing will not achieve a decisive settlement," he told the paper, adding that the insurgents fighting to topple Syria's leadership could plunge it into "anarchy and an unending spiral of violence".

Sources close to the Syrian government say Sharaa had pushed for dialogue with the opposition and objected to the military response to an uprising that began peacefully.

In Damascus, clashes raged between Palestinian factions loyal to and opposed to Assad in the Yarmouk district a day after Syrian fighter jets bombed a mosque there, killing at least 25 people.

Activists said troops and tanks were gathered outside the camp on Monday and hundreds of Palestinians refugees living in Syria flooded into Lebanon.

Syria hosts half a million Palestinian refugees, most living in Yarmouk and descendants of those admitted after the creation of Israel in 1948, and has always cast itself as a champion of the Palestinian struggle, sponsoring several guerrilla factions.

Both Assad's government and the mainly Sunni Muslim Syrian rebels have enlisted and armed divided Palestinian factions as the uprising has developed into a civil war.

In a veiled criticism of the crackdown, Sharaa said there was a difference between the state's duty to provide security to its citizens, and "pursuing a security solution to the crisis".

He said even Assad could not be certain where events in Syria were leading, but that anyone who met him would hear that "this is a long struggle...and he does not hide his desire to settle matters militarily to reach a final solution."

CHANGE INEVITABLE

"We realize today that change is inevitable," Sharaa said, but "none of the peaceful or armed opposition groups with their known foreign links can call themselves the sole legitimate representative of the Syrian people".

"Likewise the current leadership...cannot achieve change alone after two years of crisis without new partners who contribute to preserving (Syria's) national fabric, territorial unity and regional sovereignty".

Rebels have now brought the war to the capital, without yet delivering a fatal blow to the government. But nor has Assad found the military muscle to oust his opponents from the city.

In Hama province, rebels and the army clashed in a new campaign launched on Sunday by rebels to block off the country's north, activists said.

The Syrian Observatory for Human Rights, an opposition-linked violence monitor, said fighting raged through the provincial towns of Karnaz, Kafar Weeta, Halfayeh and Mahardeh.

"There is not fighting in these areas often," said Rami Abdelrahman, head of the Observatory, adding that rebels units from Idlib joined the offensive and three army stations had been destroyed.

He said there were no clashes reported in Hama city, which lies on the main north-south highway connecting the capital with Aleppo, Syria's second city.

Qassem Saadeddine, a member of the newly established rebel military command, told Reuters on Sunday fighters had been ordered to surround and attack army positions across the province. He said forces loyal to Assad had been given 48 hours to surrender or be killed.

"When we liberate the countryside of Hama province ... then we will have the area between Aleppo and Hama liberated and open for us," he said.

In 1982 Hafez al-Assad, father of the current ruler, crushed an uprising in Hama city, killing up to 30,000 civilians.

Qatiba al-Naasan, a rebel from Hama, said the offensive would bring retaliatory air strikes from the government but that the situation is "already getting miserable".

"For sure there will be slaughter - if the army wants to shell us many people will die. There are many populated areas and many refugees have fled here."

"(But) we felt it was always inevitable Hama would be shelled and we at least want to be fighting to liberate it," he said from Hama through Skype.

He said rebels would attack areas of strategic significance but not maintain a presence in other areas to allow civilians a safe place to flee.

(Additional reporting by Oliver Holmes and Erika Solomon in Beirut, Noah Browning and Ali Sawafta in Ramallah, and Nidal al-Mughrabi in Gaza; editing by Philippa Fletcher)

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RIM begins BlackBerry 10 tests with business, government clients

TORONTO (Reuters) – Research In Motion Ltd said on Monday that it had begun a “beta testing” program that allows 120 companies and government departments to try out its new BlackBerry 10 smartphones before their global launch on January 30.

The Canadian company, which is trying to reverse a sharp decline in market share for the BlackBerry, said the program would enable so-called enterprise customers in business and government to size up the BB10.

Features of the BB10 include the ability to separate personal and business information so that the user can store both without compromising security.

RIM has struggled in recent years to hold on to its base of enterprise customers, which typically pay a higher subscription fee than consumers, as their employees push to use devices such as Apple Inc’s iPhone for business as well as personal communications.

“This is a crucial step for us in getting our large enterprise customers ready to support BlackBerry 10 at the point of launch date, as opposed to post-launch date,” Bryan Lee, senior director for enterprise accounts, said in a phone interview.

RIM is providing the software and handsets at no charge, and the companies do not have to buy anything once the trial is finished.

The company plans to release its quarterly results on Thursday, and analysts expect it to report its third straight loss as it struggles to sell its older devices.

RIM made its name selling mobile email devices to bankers, lawyers and other professionals before expanding to sell phones to consumers.

The company said the BB10 testers were from financial, insurance, healthcare, manufacturing, media, and distribution industries and include 64 Fortune 500 companies, as well as government departments.

Lee would not identify any of the entities, beyond Integris Health and the U.S. Immigration and Customs Enforcement agency, which have both said they are testing the new devices.

The customers have installed test versions of RIM’s new server software, which manages iPhones and devices using Google Inc’s Android software as well as BlackBerrys, and will each receive two preproduction BlackBerry 10 handsets later this week.

RIM shares were down 2.1 percent at C$ 13.59 in morning Toronto Stock Exchange trading.

The stock has rallied from September’s multiyear lows around C$ 6.50 on a wave of optimism over the new devices, but the share price is still far below mid-2008 highs of around C$ 150.

(Reporting by Alastair Sharp; Editing by Lisa Von Ahn)

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Les Miserables Stars

Given his strong song and dance background (plus, those two Tony Awards), it's no surprise Hugh Jackman's name gets bandied about for every big screen musical. But, in a new interview during The LA Times' Envelope Screening Series, Jackman reveals his latest stab at cinematic singing scared the life out of him.

VIDEO - Amanda Seyfried on Getting a Lap Dance From Jackman

After equating Jean Valjean in Les Miserables to Hamlet, Jackman says, "You dream of having a great part, but deep down there's that fear of, 'Will you live up to your own expectations?'"

VIDEO - Hugh Jackman Gets A Star on The Walk Of Fame

Thankfully Jackman's fears were unfounded as his work not only secured him a Golden Globe nomination for Best Actor, but a SAG nod in the same category and a smattering of Best Ensemble nominations.

Check out ETonline's exclusive clip from The LA Times' The Envelope Screening Series (for more click here!) -- and to sign up for a 14-day free trial of EPIX, click here!

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Experts: No link between Asperger's, violence

NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.

Asperger's is a mild form of autism often characterized by social awkwardness.

"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.

Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.

A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.

High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.

Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.

"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.

"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.

Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.

Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.

"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.

She said those with Asperger's tend to focus on rules and be very law-abiding.

"There's something more to this," she said. "We just don't know what that is yet."

After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.

__

AP Writer Matt Apuzzo contributed to this report.

___

Online:

Asperger's information: http://1.usa.gov/3tGSp5

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Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Japan's LDP surges back to power, eyes two-thirds majority with ally

TOKYO (Reuters) - Japan's conservative Liberal Democratic Party (LDP) surged back to power in an election on Sunday just three years after a devastating defeat, giving ex-Prime Minister Shinzo Abe a chance to push his hawkish security agenda and radical economic recipe.

An LDP win will usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear energy policy despite last year's Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.

A TV Asahi projection based on counted votes gave the LDP at least 291 seats in parliament's 480-member lower house, and together with its small ally, the New Komeito party, a two-thirds majority needed to override, on most matters, the upper house, where no party has majority.

That would help break a policy deadlock that has plagued the world's third biggest economy since 2007.

"We have promised to pull Japan out of deflation and correct a strong yen," Abe said on live television. "We need to do this. The same goes for national security and diplomacy."

Parliament is expected to vote Abe in as prime minister on December 26.

Analysts said that while markets had already pushed the yen lower and share prices higher in anticipation of an LDP victory, stocks could rise and the yen weaken further in response to "super majority."

While LDP and New Komeito officials confirmed they would form a coalition, LDP Secretary-General Shigeru Ishiba did not rule out cooperation with the Japan Restoration Party, a new right-leaning party that was set to pick up at least 52 seats.

"I think there is room to do this in the area of national defense," he said. The New Komeito is more moderate than the LDP on security issues.

DEMOCRATS' DEBACLE

Projections showed Prime Minister Yoshihiko Noda's Democratic Party of Japan winning at least 56 seats, less than a fifth of its tally in 2009. Noda said he was stepping down as party leader after the defeat, in which several party heavyweights lost their seats.

The Democrats swept to power in 2009 promising to pay more heed to consumers and break up the "iron triangle" of the powerful bureaucracy, business and politicians formed during more than half a century of almost unbroken LDP rule.

Many voters had said the DPJ failed to meet election pledges as it struggled to govern and cope with last year's huge earthquake, tsunami and nuclear disaster, and pushed through an unpopular sales tax increase with LDP help.

Voter distaste for both major parties has spawned a clutch of new parties including the Japan Restoration Party, founded by popular Osaka Mayor Toru Hashimoto.

LDP leader Abe, 58, who quit as premier in 2007 citing ill health after a troubled year in office, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts and party insiders say he may temper his hard line with pragmatism once in office.

"The Senkaku islands are inherently Japanese territory," Abe said, referring to the islands that China calls the Diaoyu. "I want to show my strong determination to prevent this from changing."

But he also said he had no intention of worsening relations with China.

The soft-spoken grandson of a prime minister, who would become Japan's seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military, so Japan can play a bigger global security role.

China's official Xinhua news agency, noting the deterioration in relations with Japan, warned it not to strain ties further.

"An economically weak and politically angry Japan will not only hurt the country, but also hurt the region and the world at large," Xinhua said. "Japan, which brought great harm and devastation to other Asian countries in World War Two, will raise further suspicions among its neighbors if the current political trend of turning right is not stopped in time."

"UNLIMITED" MONETARY EASING

The LDP, which promoted nuclear energy during its decades-long reign, is expected to be friendly to power utilities, although public safety concerns remain a barrier to business-as-usual for the industry.

Abe has called for "unlimited" monetary easing and big spending on public works to rescue the economy from its fourth recession since 2000. Such policies, a centerpiece of the LDP's platform for decades, have been criticized by many as wasteful pork-barrel politics.

Kyodo news agency said the new government could draft an extra budget for 2012/13 worth up to 10 trillion yen ($120 billion) and issue debt to pay for it.

Many economists say that prescription for "Abenomics" could create temporary growth and allow the government to go ahead with a planned initial sales tax rise in 2014 to help curb a public debt now more than twice the size of Japan's economy.

But it looks unlikely to cure deeper ills or bring lasting growth, and risks triggering a market backlash if investors decide Japan has lost control of its finances.

"Japan can't spend on public works forever and the Bank of Japan's monetary easing won't keep the yen weak for too long," said Koichi Haji, chief economist at NLI Research Institute. "The key is whether Abe can implement long-term structural reforms and growth strategies."

Japan's economy has been stuck in the doldrums for decades, its population ageing fast and flagship companies such as Sony Corp struggling with foreign rivals and burdened with a strong yen, making "Japan Inc" a synonym for decline.

(Additional reporting by Chikafumi Hodo, Yoko Kubota, Kiyoshi Takenaka, Leika Kihara and Mari Saito in TOKYO, Yoshiyuki Osada in OSAKA and Sui-Lee Wee in BEIJING; Editing by Tomasz Janowski and Robert Birsel)

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