U.S. and Turkish officials discuss Ukraine and NATO in unannounced meeting

By Katharine Jackson

WASHINGTON (Reuters) – U.S. national security adviser Jake Sullivan met with Turkish President Tayyip Erdogan’s chief adviser Ibrahim Kalin in Istanbul on Sunday and discussed “progress on NATO accession for Finland and Sweden”, the White House said in a statement.

The two, whose meeting was unannounced to the media beforehand, also discussed Turkey’s condemnation of Russia’s annexation of Ukrainian territory.

Turkey, a NATO member, has conducted a diplomatic balancing act since Russia invaded Ukraine on Feb. 24. Ankara opposes Western sanctions on Russia and has close ties with both Moscow and Kyiv, its Black Sea neighbours. It has also criticised Russia’s invasion and sent armed drones to Ukraine.

Sweden and Finland applied to join the military alliance in the aftermath of Russia’s invasion of Ukraine, but NATO ally Turkey expressed concerns about their candidacies.

The three countries reached a breakthrough agreement on the sidelines of the NATO summit in Madrid in June, with Turkey lifting its veto and Sweden and Finland agreeing to a set of steps to be taken to address Turkey’s concerns.

During their meeting, Sullivan and Kalin also discussed “their support for peace negotiations between Armenia and Azerbaijan, the importance of dialogue and diplomacy to resolve any disagreements in the Eastern Mediterranean, and their condemnation of Russia’s attempted, illegal annexation of Ukrainian territory,” the statement said.

(Reporting by Katharine Jackson; Editing by Lisa Shumaker)

Tensions mount as Brazilians vote in polarized presidential election

By Lisandra Paraguassu, Rodrigo Viga Gaier and Gram Slattery

BRASILIA (Reuters) -Brazilians voted on Sunday in the first round of their country’s most polarized election in decades, with leftist Luiz Inacio Lula da Silva favored to beat right-wing incumbent Jair Bolsonaro.

There were reports of long, snaking lines across Brazil as many turned out to vote in a tense election, punctuated by episodes of violence and fears over a sharp uptick in gun ownership under Bolsonaro. Military police in Sao Paulo said a man entered a voting station in the Cidade Dutra neighborhood and fired at two police officers.

“The officers are conscious and receiving medical attention,” they wrote on Twitter.

Most opinion polls have shown Lula with a 10-15 percentage point lead, but Bolsonaro has signaled he may refuse to accept defeat, stoking fears of institutional crisis. If Lula wins over 50% of valid votes, which several pollsters show within reach, he would clinch an outright victory, foregoing a run-off.

Wearing a “Get Out Bozo” shirt, Rio de Janeiro resident Anna Luisa, 70, said she was voting for Lula for the first time.

“I have to take down Bolsonaro,” she said, citing his “homophobia” and his stance over Brazil’s 1964-85 military dictatorship, which Bolsonaro has long supported.

Beloved by his fans, Lula is also loathed by many Brazilians for his graft conviction. Bolsonaro often refers to him as “the inmate.” The leftist, who was president from 2003 to 2010, was jailed during the last election. But his conviction was later overturned by the Supreme Court, allowing him to face his rival Bolsonaro this year.

Voting in São Bernardo do Campo, Lula acknowledged the dramatic turnaround in his fortunes after a conviction that he says was politically motivated.

“It’s an important day for me,” he said. “Four years ago I couldn’t vote because I was the victim of a lie … I want to try to help my country to return to normal.”

Bolsonaro voted in Rio, and said he expected to win the election in Sunday’s first round, despite his poor showing in surveys. The former army captain does not trust the pollsters, saying their results do not correspond with the support at his campaign events.

“If we have clean elections, we will win today with at least 60% of the votes,” Bolsonaro said in a social media video. “All the evidence we have is favorable to us.”

A winner could be announced within hours after polling stations close at 5 p.m. Brasilia time (2000 GMT). If no candidate wins over half of the votes, excluding blank and spoiled ballots, the top two go to an Oct. 30 run-off.

Bolsonaro has threatened to contest the result of the vote, after making baseless allegations of fraud, accusing electoral authorities of plotting against him and suggesting the military should conduct a parallel tally, which they declined to do.

CONGRESS

Brazilians are also voting on Sunday for all 513 members of the lower chamber of Congress, a third of the 81 members of the Senate and state governors and legislatures.

Though Lula leads the presidential race, Bolsonaro’s conservative coalition is expected to hold a majority in both chambers of Congress. That could present challenges for the leftist to govern a country with rising hunger, high unemployment and an uneven recovery from the COVID-19 pandemic.

Lula and Bolsonaro have both promised more generous welfare spending next year, adding to pressure on the federal budget.

The newly established autonomy of Brazil’s central bank and Lula’s choice of a centrist former rival as running mate have reassured some investors that he would not trigger a disruptive break in economic policy.

Lula has vowed to make a sharp departure from Bolsonaro’s environmental policies after deforestation in the Amazon rainforest hit a 15-year high. Lula has pledged to combat logging, step up protection of the biome and local tribes, and make Brazil a protagonist in climate diplomacy.

As in past elections, Brazil’s military has been mobilized to heighten security at some 477,000 polling stations, using electronic voting machines that allow for swift tabulation of results by the national electoral authority (TSE).

Following Bolsonaro’s criticisms of Brazil’s voting systems, the TSE invited a record number of foreign election observers, including first-time missions from U.S. observers at the Carter Center and the International Foundation for Electoral Systems (IFES).

(Reporting by Anthony Boadle, Lisandra Paraguassu and Rodrigo Viga Gaier, Gram Slattery and Beatriz Garcia; Editing by Gabriel Stargardter, Raissa Kasolowsky, Grant McCool and Daniel Wallis)

Britain to acquire two specialist ships to protect underwater infrastructure

BIRMINGHAM, England (Reuters) – Britain will acquire two specialist ships to protect underwater infrastructure such as cables and pipelines, defence minister Ben Wallace said on Sunday, following leaks in the Nord Stream gas pipelines from Russia to Europe.

European countries say the Nord Stream pipelines were damaged by “sabotage” but have stopped short of blaming Moscow. Russian President Vladimir Putin has blamed Western countries.

Speaking at the Conservative Party conference in Birmingham, central England, Wallace spoke about “mysterious damage” inflicted to the pipelines but made clear that he saw the threat to Britain’s infrastructure as coming from Russia.

“It should remind us all how fragile our economy and infrastructure is to such to such hybrid attacks … Our internet and our energy are highly reliant on pipelines and cables. Russia makes no secret of its ability to target such infrastructure,” Wallace said.

“So for that reason I can announce we have recently committed to two specialist ships with the capability to keep our cables and pipelines safe.”

Wallace said the first “multi-role survey ship for seabed warfare” would be bought this year and would be operational by the end of next year, while the second ship would be built in the United Kingdom.

(Reporting by Alistair Smout, editing by Elizabeth Piper and Nick Macfie)

UK sees improving ‘mood music’ on Northern Ireland protocol

By Alistair Smout

BIRMINGHAM, England (Reuters) – The prospects for the Northern Ireland protocol seem to be improving as the United Kingdom tries to renegotiate part of the Brexit deal with the European Union and re-establish the province’s devolved assembly, a British minister said on Sunday.

The event at the Conservative Party conference in Birmingham, central England, saw a softening in tone from some former hardliners in the dispute with the EU, matching a shift from the foreign minister James Cleverly, who is leading talks.

“I understand the complications and maybe we could have understood them a bit better, sooner. But now the mood music certainly seems to be changing and I very much hope that we get some solutions,” said Northern Ireland Secretary Chris Heaton-Harris.

“Let’s hope we can put the protocol to bed, get the assembly going, and then everyone can move forward in a peaceful and prosperous Northern Ireland.”

Both Britain and the EU agreed to the Northern Ireland protocol as a way to avoid reinstating border controls between the British-run province of Northern Ireland and EU member Ireland after Britain left the EU, seen as key to protecting peace on the island.

Heaton-Harris said that the protocol wasn’t written to complicate trade between Northern Ireland and Britain, but it had done, and needed to be renegotiated so that unionists would rejoin the devolved Stormont executive.

He added that “discussions reopened with gusto” on the protocol in a call with Cleverly and EU negotiator Maros Sefcovic last week.

Heaton-Harris once co-chaired the European Research Group (ERG) with Steve Baker, a self-styled “hard man of Brexit”. Baker organised lawmaker rebellions against Theresa May’s deal, pushing for a harder form of Brexit.

Baker said that having acted with “ferocious determination” to get Britain out of the EU, he regretted how that might have damaged relations with the bloc.

“It’s with humility that I want to accept and acknowledge that I and others did not always behave in a way which encouraged Ireland and the European Union to trust us,” Baker said, adding that both had legitimate interests that Britain was willing to respect.

“I’m sorry about that, because relations with Ireland are not where they should be, and we all need to work extremely hard to improve them.”

(Reporting by Alistair Smout; Editing by Frank Jack Daniel)

Tesla’s logistical challenges overshadow record deliveries

By Hyunjoo Jin

-Tesla Inc on Sunday announced lower-than-expected electric vehicle deliveries in the third quarter, as logistical challenges overshadowed its record deliveries.

Tesla delivered 343,830 electric vehicles, a record for the world’s most valuable automaker, but less than the 359,162 analysts on average had expected, according to Refinitiv. A year earlier Tesla delivered 241,300 units.

The latest deliveries fell short of Tesla’s production of 365,923 vehicles, which is rare for the automaker which has seen its deliveries higher or similar to production in many of recent quarters.

“Historically, our delivery volumes have skewed towards the end of each quarter due to regional batch building of cars,” Tesla said in a statement. “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.”

The results came as concerns are growing about the global economy that could dampen consumer demand for expensive items, hitting technology stocks such as Apple and Tesla last week.

“The economy around the edges is still having a negative impact for Tesla that’s mostly logistical. But that I think there is some demand (issues) sprinkled in there,” Wedbush Securities analyst Dan Ives told Reuters after the delivery results.

“There is a dark cloud over the auto sector. And Tesla is not immune.”

Ford Motor said last month inflation-related costs would be $1 billion more than expected in the third quarter and that parts shortages had delayed deliveries.

Tesla set an ambitious target to produce almost 495,000 Model Y and Model 3s in the fourth quarter of this year, internal plans reviewed by Reuters show.

The company’s production ambitions come against the backdrop of increasingly gloomy outlook for global growth, with Musk himself telling top managers in June he had a “super bad feeling” about the economy and planned to cut staff.

“I think that EVs in for probably a little bit of a rough patch, just because people are probably going to be a little bit hesitant and less urgent to buy something new,” OANDA senior market analyst Ed Moya said.

In September, Tesla’s vehicle order backlog fell especially in China, Troy Teslike, a Tesla data tracker tweeted.

The automaker also upgraded production lines at Shanghai after a resurgence in COVID-19 cases forced a suspension at the plant and fueled the first dip in deliveries after a nearly two-year-long record run.

Tesla said it delivered 325,158 Model 3 compact cars and Model Y sport-utility vehicle, as well as 18,672 of its Model S and Model X premium vehicles to customers during the quarter.

(Reporting by Hyunjoo Jin in San Francisco, Savyata Mishra and Mrinmay Dey in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker)

Polls close as Bosnians choose between nationalists and reformists

By Daria Sito-Sucic

SARAJEVO (Reuters) -Bosnia’s polls closed on Sunday as voters turned out to choose the country’s new collective presidency and lawmakers at national, regional and local levels, in a contest between entrenched nationalists and economy-focused reformists.

Election authorities said that 35% of nearly 3.4 million people eligible to vote had turned out to cast their ballots by 3 p.m (1300 GMT). Despite reports of irregularities and the detention of some people over ballot fraud, officials said the vote had proceeded in a satisfactory manner.

Bosnia is going through its worst political crisis since the end of its war in the 1990s, prompted by separatist policies of the Serb leadership and threats of blockades by Bosnian Croats.

“I expect some changes at least for our youth,” said Mubera Sarac, a pensioner arriving at a polling station in Sarajevo.

“It does not matter if old or new (politicians) win, they just need to change something in their minds for the sake of our young people,” Sarac added.

The first official results are expected at midnight, but political parties are expected to come out with their own results around 10 p.m.

Bosnia comprises two autonomous regions, the Serb-dominated Serb Republic and the Federation shared by Bosniaks, or Bosnian Muslims, and Croats, linked by a weak central government. The Federation is further split into 10 cantons. There is also the neutral Brcko district in the north.

Election campaigning by ruling ethnic parties was dominated by nationalist rhetoric, focusing on themes of protection of national interests and criticism of opponents more than on issues such as jobs and soaring inflation.

NATIONALISTS SEEN STAYING DOMINANT

A lack of reliable polls has made it difficult to predict the outcome, but many analysts believe nationalist parties will remain dominant and that the biggest change may come in the Bosniak camp, which is the largest and most politically diverse.

The leader of the largest Party of Democratic Action (SDA), Bakir Izetbegovic, is running for the role of Bosniak presidency member in what is seen as a tight race with Denis Becirovic of the anti-nationalist Social Democratic Party (SDP), whose bid is supported by 11 civic-oriented opposition parties.

Observers believe that Serb and Croat nationalist parties will remain in power, but some polls have suggested that separatist pro-Russian leader Milorad Dodik, who is running for the role of president of the Serb Republic, is facing strong competition from opposition economist Jelena Trivic.

“Those who win the elections will also be held accountable to the people for finding the best possible solutions and answers to the world’s and Europe’s challenges, which will be anything but easy,” Dodik, who boasts about his close ties with Russian President Vladimir Putin, said after casting his ballot.

The Croat parties have warned they may block the formation of a government after the vote if moderate Zeljko Komsic wins the post of Croat presidency member.

They say his victory would be based on votes by majority Bosniaks, and that they will not regard him as the legitimate Croat representative.

“I think that finally, after 30 years, it should be better for the people in whole of Bosnia,” said Milenko Crnjak, after he voted in the western town of Livno.

“We have so much potential … but young people are departing and the old are staying and dying.”

(Additional reporting by Reuters TV; Editing by Nick Macfie, Jan Harvey and Alexander Smith)

Bulgaria’s GERB party seen winning national election

By Tsvetelia Tsolova

SOFIA (Reuters) -The GERB party of ex-Prime Minister Boyko Borissov looked set to win Sunday’s election in Bulgaria, the nation’s fourth in under two years, with many voters looking for predictability from a former leader amid steep inflation and energy costs.

Exit polls by Gallup International and Alpha Research showed the centre-right GERB with 24.6%-25.5% of ballots.

GERB’s main rival, the reformist We Continue the Change party, led by Kiril Petkov, whose coalition government collapsed in June, came second with 18.9-19.9% according to the exit polls.

If confirmed, the result would herald tough coalition talks ahead that could still end in a hung parliament or even another ballot.

Either would prolong policy instability and raise the prospect of Sofia missing its 2024 target date for entry into the euro zone.

(Reporting by Tsvetelia TsolovaEditing by Nick Macfie, Gareth Jones and Frances Kerry)

Israel upbeat on draft Lebanese demarcation deal, sees gas profit-sharing

By Dan Williams

JERUSALEM (Reuters) -Israel gave its preliminary nod on Sunday to a draft U.S.-brokered deal demarcating a maritime border with Lebanon that may lead to profit-sharing in a disputed Mediterranean gas prospect.

Hoping to defuse one source of conflict between the hostile countries and prod them toward accommodation, U.S. envoy Amos Hochstein last week submitted a new proposal that would pave the way for offshore energy exploration.

After years of stop-start shuttle diplomacy, agreement seems closer than ever. As Beirut mulls the 10-page draft – details of which have been kept under wraps – the Iran-backed Hezbollah movement called it “a very important step” on Saturday while Parliament Speaker Nabih Berri, a powerful Hezbollah ally, deemed it “positive”.

Israeli approval of the draft awaited legal review, Prime Minister Yair Lapid told his cabinet at its weekly session.

“But,” he said in televised remarks, “just as we insisted from day one, the proposal fully preserves Israel’s national security interests, as well as our economic interests”.

Lapid appeared to float an arrangement whereby gas would be produced by a company under a Lebanese license in the disputed Qana prospect, with Israel receiving a share of revenues.

“We have no opposition to an additional Lebanese gas field being developed, from which we would of course receive royalties due us,” he said. “Such a field would weaken Lebanese dependency on Iran, restrain Hezbollah and bring regional stability.”

The centrist Lapid heads a caretaker government ahead of a Nov 1 election. His challenger, conservative ex-Prime Minister Benjamin Netanyahu, has argued the Lebanese deal could benefit Hezbollah, and accused Lapid of evading parliamentary scrutiny.

Hinting he might overturn the deal if re-elected, Netanyahu tweeted on Sunday: “We will not be bound by this fait accompli.”

Israel’s defense minister, Benny Gantz, said any final agreement would be brought for review by parliament and called on Netanyahu to refrain from comments that “endanger the deal”.

Hezbollah fought Israel in a 2006 war and remains hostile to Lebanon’s southern neighbour. But with the Lebanese economy in deepening distress, Hezbollah has pledged to abide by whatever Beirut agrees to in the indirect talks.

“We support the Lebanese position, so that we safeguard our right to demarcate our maritime borders and invest in our gas,” Lebanon’s National News Agency quoted senior Hezbollah official Mohammad Raad as saying.

(Additional reporting by Timour Azhari in BeirutWriting by Dan WilliamsEditing by Raissa Kasolowsky and Frances Kerry)

OPEC+ to consider oil cut of over than 1 million bpd – sources

By Maha El Dahan and Olesya Astakhova

DUBAI (Reuters) -OPEC+ will consider an oil output cut of more than a million barrels per day (bpd) next week, OPEC sources said on Sunday, in what would be the biggest move yet since the COVID-19 pandemic to address oil market weakness.

The meeting will take place on Oct. 5 against the backdrop of falling oil prices and months of severe market volatility which prompted top OPEC+ producer, Saudi Arabia, to say the group could cut production.

OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.

Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the U.S. dollar after the Federal Reserves raised rates.

A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.

The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.

Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of U.S. President Joe Biden.

Last week, a source familiar with the Russian thinking said Moscow would like to see OPEC+ cutting 1 million bpd or one percent of global supply.

That would be the biggest cut since 2020 when OPEC+ reduced output by a record 10 million bpd as demand crashed due to the COVID pandemic. The group spent the next two years unwinding those record cuts.

On Sunday, the sources said the cut could exceed 1 million bpd. One of the sources suggested cuts could also include a voluntary additional reduction of production by Saudi Arabia.

OPEC+ will meet in person in Vienna for the first time since March 2020.

Analysts and OPEC watchers such as UBS and JP Morgan have suggested in recent days a cut of around 1 million bpd was on the cards and could help arrest the price decline.

“$90 oil is non-negotiable for the OPEC+ leadership, hence they will act to safeguard this price floor,” said Stephen Brennock of oil broker PVM.

(Reporting by Maha El Dahan, Olesya Astakhova and Alex Lawler; Editing by Gareth Jones, Jan Harvey and Raissa Kasolowsky)

Liz Truss tries to reassure public on economic plan as Conservatives gather

By Elizabeth Piper and Andrew MacAskill

BIRMINGHAM, England (Reuters) – British Prime Minister Liz Truss tried to reassure her party and the public on Sunday by saying she should have done more to “lay the ground” for an economic plan that saw the pound fall to record lows and government borrowing costs soar.

On the first day of her governing Conservative Party’s annual conference, Truss, in office for less than a month but already under intense pressure, sought a softer tone by saying she would support the public during a difficult winter and beyond.

She defended her “growth plan”, a package of tax-cutting measures that investors and many economists have criticised for setting out billions of pounds of spending while offering few details on how it would be paid for in the short term.

Truss said it was the right direction, suggesting she had not fully explained to critics the depth of Britain’s problems and the urgent need for a radical plan. Traders and investors have dismissed that argument as a reason for the falls in the pound and the increase in borrowing costs last week.

But in what some Conservative lawmakers worry will hurt their prospects at an election due in 2024, Truss did not deny that the plan would require spending cuts for public services and refused to commit to increasing welfare benefits in line with inflation, while endorsing a tax cut for the wealthiest.

Asked what she was doing to ease concerns in Britain about the impact of her plan on mortgages, loan and rental costs, Truss told the BBC: “I understand their worries about what has happened this week,” she told the BBC in the central English city of Birmingham.

“I do stand by the package we announced, and I stand by the fact that we announced it quickly because we had to act, but I do accept that we should have laid the ground better.”

Jake Berry, chairman of the Conservative Party, suggested the markets may have overreacted, while admitting he was not an economist. “So let’s see where the markets are in six months time,” he told Sky News.

TROUBLE AHEAD?

Truss took office on Sept. 6, but Queen Elizabeth died two days later and so the first days of the new prime minister’s term were largely taken up with the national mourning period, when politics was all but paused.

She launched her plan two weeks after taking office, with her team feeling she had signalled her plans during a leadership campaign against rival Rishi Sunak, who had argued against immediate tax cuts.

But the scale of the unfunded cuts spooked markets. After a large sell-off, the pound has since recovered after Britain’s central bank, the Bank of England, stepped in, but government borrowing costs remain markedly higher.

Investors say the government will have to work hard to restore confidence, and the BoE emergency round of bond-buying is due to run only until Oct. 14, leaving Truss with little time.

It was not the backdrop she wanted for her first party conference as prime minister.

She arrived in the main hall to cheers and a standing ovation, but only half the seats were filled, partly because of a weekend train strike but also possibly a sign of the unease over her package.

Some in the party fear they are at risk of being seen as “the nasty party”, cutting taxes for the wealthiest while doing little to improve the lives of the most vulnerable.

In what could be a sign of things to come, business minister Jacob Rees-Mogg was heckled by a dozen protesters shouting “Not welcome here” when he was arriving at the conference centre. He had to be escorted by police.

One former minister, Michael Gove, long at the heart of government, also rubbished the party’s plans to abolish the highest 45% level of income tax, hinting he might vote against it, and Andy Street, the Conservative mayor of Birmingham, said he would not have made that policy.

“It is going to be very, very difficult to argue it’s okay to reduce welfare payments when we are cutting taxes for the richest,” Gove told an event at the conference.

Truss argued the move was part of the simplification of the tax system, but added the decision on the top tax was taken by her finance minister, Kwasi Kwarteng.

She also suggested that politicians spent too much time worrying about how their policies were received by the public, saying she was focused on driving growth.

But she struggled when pressed to answer whether scrapping some taxes would have to be paid for with cuts to public services. Rather than denying this, she said she wanted the best possible services, which offer taxpayers value for money.

Further reading:

How the Bank of England threw markets a lifeline

(Reporting by Elizabeth Piper and Andrew MacAskill; Additional reporting by Hannah McKay and Alistair Smout; Editing by Gareth Jones, Jan Harvey and Frances Kerry)

U.S. citizen allowed to leave Iranian prison for a week

By Arshad Mohammed and Parisa Hafezi

(Reuters) -Siamak Namazi, an Iranian American imprisoned in Iran for nearly seven years on espionage-related charges rejected by Washington as baseless, has been allowed out of Tehran’s Evin prison on a one-week furlough, his lawyer said on Saturday.

Separately, his father and former United Nations official Baquer Namazi, who was also convicted on charges of “collaboration with a hostile government,” has been allowed to leave Iran for medical treatment, U.N. spokesman Stephane Dujarric said in a statement.

It was unclear if the moves might be a step toward Siamak’s full release, nor whether it signals the possible furlough or release of other U.S. citizens detained in Iran.

Iran’s Nournews said an unidentified regional nation had mediated between Tehran and Washington for the “simultaneous release of prisoners”.

The semi-official news agency also reported that “billions of dollars of Iran’s frozen assets because of the U.S. sanctions will be released soon.”

The White House denied this. “Reports from Iranian sources of a transfer of funds related to the release of Baquer Namazi and furlough of Siamak Namazi are categorically false,” National Security Council spokeswoman Adrienne Watson said on Sunday.

Earlier, U.S. State Department spokesperson Ned Price said: “We were deeply gratified to learn from the U.N. Secretary-General today that Iran has lifted the travel ban imposed on Baquer Namazi.”

The department was grateful that Siamak Namazi was granted a humanitarian furlough to be with his father, Price said in a release. Price thanked U.S. allies and partners who worked to help the Namazis, including the U.N. Secretary-General, Switzerland, Qatar, the United Arab Emirates, Oman, and the United Kingdom.

It was unclear what motivated Tehran’s decisions on both men.

“The travel ban on Baquer Namazi was lifted on Wednesday on humanitarian grounds and due to the requests made for his treatment abroad,” said Kazem Gharibabadi, Iran’s deputy judiciary chief, state media reported.

“He can leave the country whenever he wants to … In this context, Siamak, his son, was given a week furlough to meet his parents.”

Iran is grappling with the biggest show of opposition to its clerical authorities since 2019 with dozens of people killed in unrest across the country ignited by the death in police custody of Mahsa Amini, a 22-year-old woman from Iranian Kurdistan.

CONVICTIONS

Baquer Namazi, 85, was convicted in Iran of “collaboration with a hostile government” in 2016 and sentenced to 10 years in prison. Iranian authorities released him on medical grounds in 2018 and closed his case in 2020, commuting his sentence to time served but effectively barring him from leaving the country.

His son Siamak, 51, has been held in Evin prison since 2015 and was convicted of the same charge as his father in 2016. The U.S. government has described the charges against both as baseless.

“I am thrilled for the Namazi family that for the first time in seven years Siamak Namazi is sleeping at home with his family,” said lawyer Jared Genser, who represents the family. Siamak was staying with his parents at their Tehran apartment and was on a one-week renewable furlough, Genser said.

“This is a critical first step but of course we will not rest until the entire family is able to return to the United States and their long nightmare is finally over,” Genser added.

Iranian Americans, whose U.S. citizenship is not recognized by Tehran, are often pawns between the two nations, now at odds over whether to revive a fraying 2015 pact under which Iran limited its nuclear program in return for sanctions relief.

In addition to the Namazis, other U.S. citizens detained in Iran include environmentalist Morad Tahbaz, 67, who also has British nationality, and businessman Emad Shargi, 58. A separate State Department spokesperson said the United States is working to bring those two home as well as Siamak Namazi.

Karim Sadjadpour, an analyst with the Carnegie Endowment for International Peace in Washington, said the Namazis should never have been imprisoned.

“The Islamic Republic deserves no credit for temporarily releasing hostages that never deserved to spend a single day in prison,” Sadjadpour said.

(Reporting By Arshad Mohammed in Lutsen, Minn., Parisa Hafezi in Dubai and Timothy Gardner, Steve Holland in Washington; Editing by Richard Pullin, Frances Kerry and Grant McCool)

Hurricane Orlene could bring flash floods, mudslides to Mexico

MEXICO CITY (Reuters) – Hurricane Orlene barreled toward Mexico’s southwestern coast as a dangerous Category 3 storm and is expected to dump torrential rains even as it is forecast to weaken in the coming days, the National Hurricane Center (NHC) said on Sunday.

Orlene, which is packing maximum sustained winds near 125 miles per hour (205 km per hour), with higher gusts, is projected to pass near or over Mexico’s Islas Marias Sunday night or Monday morning, the Miami-based NHC said in its latest public advisory.

“Orlene has likely peaked in intensity,” said the NHC.

Despite forecast weakening, the storm is seen reaching mainland Mexico’s coast as a hurricane on Monday.

“After landfall, rapid weakening is expected and the low-level center should dissipate over the mountainous terrain of southwestern Mexico in 60-72 hour,” said the NHC, adding that torrential rains could lead to flash flooding, as well as possible landslides in areas of rugged terrain.

Islas Marias could see 6 to 10 inches (15 to 25 cm) of rain, the Mexican states of Nayarit and Sinaloa 3 to 6 inches, with local amounts of up to 10 inches, and Jalisco and Colima some 1 to 3 inches, with isolated areas of as much as 5 inches.

The storm was currently located 95 miles southwest of Cabo Corrientes, Mexico.

Mexico’s civil protection agency announced on Twitter the closure of ports in Nayarit, Jalisco and Colima.

(Reporting by Valentine Hilaire; Editing by Anthony Esposito and Lisa Shumaker)

Exclusive-India’s Reliance Jio to launch 4G enabled low-cost laptop at $184

By Munsif Vengattil

NEW DELHI (Reuters) – Reliance Jio will launch a budget laptop priced at $184 (15,000 Indian rupees) with an embedded 4G sim card, aiming to replicate the success of its low-cost JioPhone in India’s highly price-sensitive market, two sources told Reuters.

The Mukesh Ambani-led conglomerate has partnered with global giants Qualcomm and Microsoft for the JioBook, with the former powering its computing chips based on technology from Arm Ltd, and the Windows OS maker providing support for some apps.

Jio, India’s biggest telecom carrier with more than 420 million customers, did not immediately respond to a request for comment.

The laptop will be available to enterprise customers such as schools and government institutes from this month, with a consumer launch anticipated within the next three months, sources said. As with the JioPhone, a 5G-enabled version will follow.

“This will be as big as JioPhone,” one of the sources with direct knowledge of the matter told Reuters.

Since its launch late last year, the handset has been India’s top-selling sub-$100 smartphone, accounting for a fifth of the market over the last three quarters, according to Counterpoint.

The JioBook will be produced locally by contract manufacturer Flex with Jio aiming to sell “hundreds of thousands” of units by March, one of the sources said.

Overall PC shipments in India stood at 14.8 million units last year, led by HP, Dell and Lenovo, according to research firm IDC.

The launch of the JioBook will extend the total addressable laptop market segment by at least 15%, Counterpoint analyst Tarun Pathak said.

The laptop will run Jio’s own JioOS operating system and apps can be downloaded from the JioStore. Jio is also pitching the laptop as an alternative to tablets for out of the office corporate employees.

Jio, which raised around $22 billion from global investors such as KKR & Co Inc and Silver Lake in 2020, is credited with disrupting the world’s no. 2 mobile market when it launched cheap 4G data plans and free voice services in 2016, and later the 4G smartphone at a cost of just $81.

(Reporting by Munsif Vengattil in New Delhi; Editing by Kirsten Donovan)

Tensions high as Brazilians on other side of Atlantic cast ballots

By Catarina Demony and Miguel Pereira

LISBON (Reuters) – Brazilian Artur Dantas moved to Portugal six months ago because of political tension in his country but he hopes the result of Sunday’s elections might allow him and others to return home one day.

Dantas and thousands of others in Portugal’s capital Lisbon, the city with the largest number of Brazilian voters outside the South American nation, queued – some for hours – to cast their ballots in the first round of Brazil’s most polarised election in decades.

Nearly 81,000 Brazilians in Portugal are registered to vote, with more than half heading to the polls in Lisbon. Long queues were also reported in other European cities, including London and Paris.

High voter turnout led Brazilian authorities to keep the Lisbon polling station opened until 8 p.m. instead of 5 p.m. as initially planned.

Most opinion polls in the contest for president have shown leftist former leader Luiz Inacio Lula da Silva with a solid lead over right-wing incumbent Jair Bolsonaro. But Bolsonaro has signalled he may refuse to accept defeat, stoking fears of institutional crisis or post-election violence.

“I came (to Portugal) precisely because of the political tension … I believe Lula will pacify the nation and many Brazilians might be able to go back,” said Dantas, a 23-year-old waiter.

The queue to vote in Lisbon snaked around the city’s law university, and voters seemed deeply divided. There were some confrontations and exchanges of accusations between supporters from both sides.

The Portuguese police has mobilised officers to prevent violence at polling stations.

Some voters wore t-shirts with Lula’s name and face on it while others wore Brazil’s yellow and green football jersey, which has become a symbol of those backing Bolsonaro.

But outside the university’s entrance, Jacilene Maceao, a 53-year-old cleaner who has lived in Portugal for nearly two decades, wore the jersey as a way to reclaim it. She wants Lula to win.

“Bolsonaro has done nothing for Brazil,” she said. “He pretends to be evangelic but he’s not evangelic … he’s the devil’s son.”

As Maceao and others shouted “Lula”, some shouted back: “Thief!”. Lula, who was president from 2003 to 2010, served a conviction for graft that was later overturned.

Claudio Alves, 28, who wore a crucifix necklace, said Bolsonaro could get Brazil “out of the hole it is in”.

“Brazil is a very rich country and has great potential but because of PT (Lula’s party) and many years of stealing and corruption Brazil is in the state it is in,” he said as his young son stood next to him. “I want a better Brazil.”

(Reporting by Catarina Demony and Miguel Pereira in Lisbon; Editing by Grant McCool)

Burkina Faso president resigns, coup leader says, as army faction seeks Russia support

By Thiam Ndiaga and Anne Mimault

OUAGADOUGOU (Reuters) -Burkina Faso’s self-declared military leader Captain Ibrahim Traore has accepted a conditional resignation offered by President Paul-Henri Damiba to avoid further violence after Friday’s coup, religious and traditional leaders said on Sunday.

Traore said that order was being restored after violent protests against the French embassy and days of fighting as his faction moved to topple the government.

Splits have emerged within the army, with many soldiers appearing to seek Russian support as the influence of former colonial power France wanes.

At least three separate videos shared on online on Saturday and Sunday showed Burkina Faso soldiers atop armoured personnel carriers, waving Russian flags, while the crowd around chanted “Russia! Russia!”. Reuters has not verified the videos.

Traore’s team urged people to halt attacks on the French embassy, targeted by protesters after an officer said France had sheltered Damiba at a French military base in the West African country and that he was planning a counter-offensive.

The French foreign ministry denied the base had hosted Damiba after his ouster on Friday. Damiba also denied he was at the base, saying the reports were a deliberate manipulation of public opinion. His whereabouts remain unknown.

“We want to inform the population that the situation is under control and order is being restored,” an army officer said in a statement broadcast on national television. Traore, an army captain, stood beside the officer and was flanked by other armed and masked soldiers.

Another statement said Traore would continue to act as president until the designation of a transitional civilian or military president in coming weeks.

Ouagadougou was mostly calm on Sunday after sporadic gunfire across the capital throughout Saturday between opposing army factions.

“We invite you to continue with your activities and refrain from all acts of violence and vandalism… notably that against the French embassy and the French military base,” the officer loyal to Traore said, urging people to remain calm.

The soldiers announced that Burkina Faso’s air borders had been reopened.

RUSSIAN FLAGS

Damiba himself led a coup earlier this year against a civilian government that had lost support over rising violence by Islamist extremists. Damiba’s failure to stop attacks by the militant groups had led to anger in the ranks of the armed forces in the former French-protectorate.

Divisions have emerged within the army also over whether to seek help from other international partners to combat the militants.

The soldiers who ousted Damiba said the former leader, whom they had helped to seize power in January, reneged on a plan to seek other partners.

They did not name the partners, but observers and supporters said the soldiers want closer partnership with Russia, as did the soldiers who seized power in neighbouring Mali in August 2020.

There are concerns that France’s influence in its former colonies in the region is weakening, while Russia, riding growing anti-French sentiment, spreads its influence.

Hundreds of people, some waving Russian flags and supporting Traore’s takeover, gathered in protest in front of the French embassy on Saturday and Sunday, throwing stones and burning tires and debris on Saturday and early on Sunday.

“We want cooperation with Russia. We want the departure of Damiba and France,” said Alassane Thiemtore who was among the protesters.

Anti-French demonstrators also gathered and stoned the French Cultural Centre in the Southern town of Bobo-Dioulasso. French business interests were also vandalised on Sunday morning.

Burkina Faso has become the epicentre of attacks carried out by groups linked to al Qaeda and Islamic State, after violence that began in neighbouring Mali in 2012 spread to other countries south of the Sahara Desert.

Thousands have been killed in raids on rural communities and millions have been forced to flee despite Damiba’s promise to tackle insecurity following his coup in January.

This week, at least 11 soldiers died in an attack in northern Burkina Faso. Dozens of civilians are missing following the attack.

(Reporting by Thiam Ndiaga and Anne Mimault Writing by Bate Felix; Editing by Kirsten Donovan, Frank Jack Daniel and Nick Macfie)

Blinken to woo Latin America’s new leftist leaders, reassert U.S. commitment

By Humeyra Pamuk and Matt Spetalnick

WASHINGTON (Reuters) – Secretary of State Antony Blinken heads to Latin America on Monday to reassert Washington’s commitment to the region and meet with three new leftist leaders, amid concerns that neglect of the hemisphere has let China make economic inroads.

During his week-long trip to Colombia, Chile and Peru the top U.S. diplomat will also attend a ministerial summit and hold talks on regional challenges including migration, drug-trafficking, post-pandemic recovery, climate change and the Venezuelan crisis.

U.S. officials acknowledge privately the need to show the United States’ southern neighbors they remain a policy priority despite the focus on big geopolitical issues such as Russia’s war in Ukraine and China’s threat to Taiwan.

Officials remain hopeful that Latin America’s new leftist leaders will not govern as ideological firebrands and instead continue to maintain a free-enterprise-friendly approach and nurture U.S. ties.

“We are not judging countries based on where they fall on the political spectrum, but rather their commitment to democracy, the rule of law and human rights,” Assistant Secretary Brian Nichols, the State Department’s top diplomat on the Western Hemisphere, said in a briefing call.

“And I would note that we are also visiting three countries that have been longtime vital trade partners of the United States, countries with free trade agreements with the United States … We are focused on strengthening our relations with those governments,” Nichols said.

Blinken will aim to solidify U.S. partnerships in the face of an increasingly ambitious China that has been expanding its economic footprint across the resource-rich region, which was once Washington’s geopolitical backyard.

“This (the trip) reflects the interest of the United States to pay more attention to Latin America, and specifically South America in this case, in terms of the deepening relationship there is with China,” said Guillermo Holzmann, a Chilean academic and political analyst.

DRUGS AND DIPLOMACY

The trip, Blinken’s first in almost a year to the Andean region, will kick off a day after Brazilians head to the polls for a highly-polarized election, in which leftist candidate Luiz Inacio Lula da Silva is leading in opinion polls against the far-right populist President Jair Bolsonaro.

Blinken’s first stop, in Colombia, could be a test of long-standing close U.S. ties. Its new leftist president, former rebel Gustavo Petro, has derided the U.S.-led war on drugs as a failure and called for a new international approach.

The South American country is a top producer of cocaine and has historically faced pressure from Washington to eradicate drug crops. Petro has also moved to re-engage diplomatically and economically with the government of Venezuelan President Nicolas Maduro, despite U.S. efforts to isolate the OPEC country. 

Blinken’s trip comes after a rare prisoner swap on Saturday in which Venezuela freed seven U.S. citizens, including five oil executives, and the Biden administration released two relatives of Maduro held in federal prison in Florida on drug convictions.

Biden administration officials have struck a mostly conciliatory tone toward Petro, stressing areas of agreement on issues such as climate change and citing his appeals to Maduro to return to talks with the Venezuelan opposition.

Regarding Petro’s calls to end the war on drugs, Nichols said Washington strongly supports “a health and science based approach” to counter narcotics.

“This is reflected in our policy of supporting rural development and rural security in Colombia. And we believe that President Petro strongly shares that goal,” Nichols said.

But one U.S. official said Washington was watching closely whether Colombia’s outreach to authorities in neighboring Venezuela undercuts U.S. sanctions on Maduro’s government.

RESOLUTION ON UKRAINE

Blinken’s second stop will be Chile, where Gabriel Boric, a former protest leader, was elected as the country’s youngest ever president earlier this year promising ambitious social reforms amid a wave of political unrest. 

But his approval ratings quickly fell and in September voters overwhelmingly rejected a proposed new constitution, forcing an overhaul of his cabinet.

Though Boric has openly criticized autocratic left-wing leaders such as Maduro and Nicaraguan President Daniel Ortega, he rankled U.S. officials by speaking out against President Joe Biden’s decision to exclude Cuba, Venezuela and Nicaragua from the Summit of the Americas in June.

In Lima, Blinken will attend a ministerial meeting of the Organization of American States (OAS) General Assembly, where Washington will push to pass a new resolution against Russia’s invasion of Ukraine after the group issued one in March condemning Moscow.

But there are doubts over how many countries will support the move after Petro said arming Ukraine would escalate the conflict. “We hope for strong support from all member states on the resolution on Ukraine,” Nichols said.

Blinken’s visit will come at a sensitive time for Peruvian President Pedro Castillo, a leftist who took office last year. Politics in the world’s No. 2 copper producer is highly polarized amid mounting allegations of corruption against Castillo and close allies. He denies any wrongdoing.

Peru’s foreign minister Cesar Landa told Reuters that items on the agenda for discussion with Blinken included democratic governance, combating drug trafficking, and immigration.

(Reporting by Humeyra Pamuk and Matt Spetalnick; Additional reporting by Natalia Ramos in Santiago, Marcelo Rochaburn in Lima, and Julia Symmes-Cobb in Bogota; Editing by Daniel Wallis)

Ukraine and Russia: What you need to know right now

(Reuters) – Ukraine said it was in full control of the eastern logistics hub of Lyman, Kyiv’s most significant battlefield gain in weeks, which a senior official said could provide a staging post for further gains to the east.

LYMAN

* Ukraine’s capture of a city within territory of Russian President Vladimir Putin’s declared annexation demonstrates that Ukrainians are making progress and are able to push back against Russian forces, NATO Secretary-General Jens Stoltenberg said.

* The recapture of Lyman in the Donetsk region is a key factor for “further de-occupation” in the neighbouring Luhansk region, Luhansk Governor Serhiy Gaidai said.

* U.S. Defense Secretary Lloyd Austin cheered the recapture of Lyman, saying on Saturday it was an encouraging battlefield success and that the loss of the logistics and transport hub will pose a dilemma for Russia’s military.

* Russia said on Saturday its troops had withdrawn from Lyman to avoid being surrounded by Ukraine’s army.

* Ramzan Kadyrov, an ally of President Vladimir Putin and head of Russia’s Chechnya region, said on Saturday Moscow should consider using a low-yield nuclear weapon in Ukraine after the loss of Lyman.

RUSSIAN PARLIAMENT

* Russia’s parliament is to consider on Monday bills and ratification treaties to absorb the regions, the speaker of Russia’s lower house of parliament, Vyacheslav Volodin said.

ZAPORIZHZHIA

* The head of the U.N. nuclear watchdog called for the release of the director-general of Ukraine’s Russian-occupied Zaporizhzhia nuclear power plant, saying his detention posed a threat to safety and security.

DIPLOMACY

* Pope Francis made an impassioned appeal to Putin to stop “this spiral of violence and death” in Ukraine, saying the crisis there was risking a nuclear escalation with uncontrollable global consequences.

* Russia failed to win enough votes on Saturday for re-election to the U.N. aviation agency’s governing council, in a boost for Western powers that wanted to hold Moscow accountable following its invasion of Ukraine.

* Germany will deliver the first of four advanced IRIS-T air defence systems to Ukraine in the coming days to help ward off drone attacks, Defence Minister Christine Lambrecht said on Saturday during a visit to Odesa.

CASUALTIES

* Ukraine’s SBU security service said at least 20 civilians were killed in Russian shelling of a civilian convoy in late September in an eastern “grey zone” between Russian- and Ukrainian-controlled territory.

GAS FLOWS

* Russian Deputy Prime Minister Alexander Novak said it was technically possible to restore the ruptured offshore infrastructure of the Nord Stream gas pipelines, TASS news agency reported.

* Italy’s Eni said it would not receive any of the gas it had requested from Russia’s Gazprom for delivery on Saturday, but the firms said they were working to fix this.

(Compiled by Frances Kerry and Raissa Kasolowsky)

Indonesia soccer stampede kills 125 after police use tear gas in stadium

By Stanley Widianto, Stefanno Sulaiman and Yuddy Cahya Budiman

MALANG, Indonesia (Reuters) -A stampede at a soccer stadium in Indonesia has killed 125 people and injured more than 320 after police police used tear gas to quell a pitch invasion, authorities said on Sunday, in one of the world’s worst stadium disasters.

Officers fired tear gas in an attempt to disperse agitated supporters of the losing home side who had invaded the pitch after the final whistle in Malang, East Java, on Saturday night, the region’s police chief Nico Afinta told reporters.

“It had gotten anarchic. They started attacking officers, they damaged cars,” Nico said, adding that the crush occurred when fans fled for an exit gate.

World soccer’s governing body FIFA specifies in its safety regulations that no firearms or “crowd control gas” should be carried or used by stewards or police.

East Java police did not respond to a request for comment on whether they were aware of the regulations against using gas in stadiums.

“Many of our friends lost their lives because of the officers who dehumanised us,” said Muhammad Rian Dwicahyono, 22, crying as he nursed a broken arm at the local Kanjuruhan hospital. “Many lives have been wasted.”

The stadium disaster appeared to be the world’s worst in decades. Wiyanto Wijoyo, the head of Malang’s health agency, put the final death toll at 125, and injuries at 323.

Video footage from local news channels showed fans streaming onto the pitch after Arema FC lost 3-2 to Persebaya Surabaya around 10 p.m. (1500 GMT), followed by scuffles, and what appeared to be clouds of tear gas and unconscious fans being carried out of the venue.

Many victims at the nearby Kanjuruhan hospital suffered from trauma, shortness of breath and a lack of oxygen due to the large number of people at the scene affected by the gas, said hospital head Bobi Prabowo.

Bobi told Metro TV that some victims had sustained brain injuries and that the fatalities included a 5-year-old.

President Joko Widodo said authorities must thoroughly evaluate security at matches, adding that he hoped this would be “the last soccer tragedy in the nation”.

Jokowi, as the president is known, ordered the Football Association of Indonesia, PSSI, to suspend all games in the top league BRI Liga 1 until an investigation had been completed.

Inside the stadium at night, a burned chair still lay unattended while slippers and shoes were strewn haphazardly. A damaged police car was also towed outside in a clean-up.

At a funeral of two brothers, age 14 and 15, in Malang who had been attending a soccer match for the first time, their relative Endah Wahyuni said: “My family and I didn’t think it would turn out like this,” adding that they were “quiet and obedient.”

INVESTIGATION OF GAS

FIFA President Gianni Infantino said in a statement to Reuters that the football world was in “a state of shock following the tragic incidents that have taken place in Indonesia” and the event was “dark day for all involved”.

FIFA has requested a report on the incident from PSSI, which has sent a team to Malang to investigate, PSSI secretary general Yunus Nusi told reporters.

Indonesia’s human rights commission also plans to investigate security at the grounds, including the use of tear gas, its commissioner told Reuters.

On Sunday mourners gathered outside the gates of the stadium to lay flowers for the victims. Later at night people burned candles in a vigil at a lion statue, the local club’s symbol.

Hundreds also attended a candle-lit vigil in the capital Jakarta on Sunday night, carrying placards that read “Indonesian soccer in mourning” and “stop police brutality.”

Amnesty International Indonesia slammed the security measures, saying the “use of excessive force by the state … to contain or control such crowds cannot be justified at all”.

The country’s chief security minister, Mahfud MD, said in an Instagram post that the stadium had been filled beyond its capacity. Some 42,000 tickets had been issued for a stadium designed to hold 38,000 people, he said.

INDONESIAN FOOTBALL SCENE

Financial aid would be given to the injured and the families of victims, East Java Governor Khofifah Indar Parawansa told reporters.

There have been outbreaks of trouble at matches in Indonesia before, with strong rivalries between clubs sometimes leading to violence among supporters.

Crowds pack stadiums but the football scene in Indonesia, a country of 275 million people, has been blighted by hooliganism, heavy-handed policing and mismanagement.

Zainudin Amali, Indonesia’s sports minister, told KompasTV the ministry would re-evaluate safety at football matches, including considering not allowing spectators in stadiums.

Periodic stadium disasters have horrified fans around the world. In 1964, 328 people were killed in a crush when Peru hosted Argentine at the Estadio Nacional.

In a 1989 British disaster, 96 Liverpool supporters were crushed to death when an overcrowded and fenced-in enclosure collapsed at the Hillsborough Stadium in Sheffield.

Indonesia is scheduled to host the FIFA under-20 World Cup in May and June next year. They are also one of three countries bidding to stage next year’s Asian Cup, the continent’s equivalent of the Euros, after China pulled out as hosts.

The head of the Asian Football Confederation, Shaikh Salman bin Ebrahim Al Khalifa, said in a statement he was “deeply shocked and saddened to hear such tragic news coming out of football-loving Indonesia”, expressing condolences for the victims, their families and friends.

(Reporting by Yuddy Cahya Budiman and Prasto Wardoyo in Malang, Stefanno Sulaiman, Stanley Widianto, and Ajeng Dinar Ulfiana in Jakarta, and Tommy Lund in GdanskWriting by Kate Lamb and Stanley WidiantoEditing by Ed Davies, William Mallard, Kim Coghill, Frances Kerry and Frank Jack Daniel)

UK PM Truss says cabinet was not informed of plans to scrap top rate of tax

BIRMINGHAM, England (Reuters) -British Prime Minister Liz Truss said on Sunday her cabinet of top ministers was not informed in advance that the government planned to abolish the top rate of tax, adding it was a decision taken by finance minister Kwasi Kwarteng.

The government sparked turmoil in financial markets last month after Kwarteng delivered a plan to cut taxes, mainly benefitting the wealthiest, without detailing the impact on the public finances or how ministers would reform the economy to spur growth.

Truss’s comment that it was Kwarteng’s decision to remove the top rate of income tax is the first sign Truss might be trying to distance herself from her chancellor. However, she also reiterated the government was sticking with the policy.

Asked whether all her cabinet was told of the move, Truss told the BBC: “No, no we didn’t. It was a decision that the chancellor made.”

Truss said: “When budgets are developed, they are developed in a very confidential way. They are very market sensitive. Of course, the cabinet is briefed, but it is never the case on budgets that they are created by the whole cabinet.”

According to the Sunday Times, Kwarteng attended a champagne reception with hedge fund managers at the home of a Conservative donor on the same day he delivered his mini-budget.

One source told the newspaper that guests told Kwarteng to “double down” on his radical tax cutting plans.

Truss said her finance minister met business people all the time as “that’s his job”.

The opposition Liberal Democrats called for an official investigation into what happened.

Jake Berry, chairman of the Conservatives, said he also attended the event, when the finance minister gave a short speech that did not include any insight into the government’s future plans.

Berry said Kwarteng in his speech at the event “did not give any insight into future plans and I’m sure in terms of his private conversations he didn’t give any”.

(Reporting by Elizabeth Piper and Andrew MacAskillEditing by Raissa Kasolowsky)

Ukraine claims full control of key logistics hub, eyes further gains

By Tom Balmforth and Pavel Polityuk

KYIV (Reuters) -Ukraine on Sunday claimed full control of the eastern logistics hub of Lyman, Kyiv’s most significant battlefield gain in weeks, providing a potential staging post for further attacks to the east while heaping further pressure on the Kremlin.

The stinging setback for Russian President Vladimir Putin came after he proclaimed the annexation of four regions covering nearly a fifth of Ukraine on Friday, an area that includes Lyman. Kyiv and the West have condemned the proclamation as an illegitimate farce.

NATO Secretary General Jens Stoltenberg said the capture of the town, where Ukrainian flags were raised over civic buildings on Saturday, demonstrated that Ukraine is capable of dislodging Russian forces and showed the impact Ukraine’s deployment of advanced Western weapons was having on the conflict.

“As of 1230 (0930 GMT), Lyman is fully cleared,” Ukrainian President Volodymyr Zelenskiy said in a short video clip on his Telegram channel. “Thank you to our troops … Glory to Ukraine!”

“Over the past week, the number of Ukrainian flags in Donbas has increased. There will be even more a week’s time,” Zelenskiy said in an earlier overnight address, using the name for the combined Donetsk and Luhansk regions.

Russia’s defence ministry said on Saturday that it was pulling troops out of the Lyman area “in connection with the creation of a threat of encirclement”.

It did not mention Lyman in its daily update on fighting in Ukraine on Sunday, although it said Russian forces had destroyed seven artillery and missile depots in the Ukrainian regions of Kharkiv, Zaporizhzhia, Mykolaiv and Donetsk.

Russian forces captured Lyman from Ukraine in May and had used it as a logistics and transport hub for its operations in the north of the Donetsk region. Losing it is Russia’s largest battlefield loss since Ukraine’s lightning counteroffensive in the northeastern Kharkiv region last month.

Control over Lyman could prove a “key factor” in helping Ukraine reclaim lost territory in the neighbouring Luhansk region, whose full capture Moscow announced in early July after weeks of grinding advances, Luhansk governor Serhiy Gaidai said.

Lyman’s operational importance was due to its command over a key road crossing over the Siverskyi Donets River, behind which Russia has been attempting to consolidate its defences, Britain’s Ministry of Defence said.

Russia likely experienced heavy casualties during the withdrawal, the ministry added. Russia had 5,000 to 5,500 troops in the city before the Ukrainian attack, a Ukrainian military spokesman said on Saturday.

ANNEXED REGIONS

The areas Putin claimed as annexed – the Donbas regions of Donetsk and Luhansk plus Kherson and Zaporizhzhia in the south – form a swath of territory equal to about 18% of Ukraine’s total surface land area.

Russia’s parliament is to consider on Monday bills and ratification treaties to absorb the regions, the speaker of Russia’s lower house of parliament, Vyacheslav Volodin said.

A pomp-filled Kremlin signing ceremony with the regions’ Russian-installed leaders on Friday has failed to stem a wave of criticism within Russia of how its military operation is being handled. Britain’s defence ministry said that was likely to intensify with further setbacks.

Putin ally Ramzan Kadyrov, the leader of Russia’s southern Chechnya region, on Saturday called for a change of strategy “right up to the declaration of martial law in the border areas and the use of low-yield nuclear weapons.” Washington says it would respond decisively to any use of nuclear weapons.

Other hawkish Russian figures on Saturday criticised Russian generals and Russian Defence Minister Sergei Shoigu on social media for overseeing the setbacks but stopped short of attacking Putin.

U.S. “VERY ENCOURAGED”

The United States was “very encouraged” by Ukrainian gains, U.S. Defense Secretary Lloyd Austin said on Sunday, while NATO’s Stoltenberg said the fall of Lyman demonstrated the effectiveness of Western weapons in the conflict.

“Allies are stepping up their support to Ukraine and that is the best way to ensure that… Ukraine is actually able to liberate and retake occupied territory,” Stoltenberg said in an NBC interview.

Pope Francis on Sunday made an impassioned appeal to Putin to stop “this spiral of violence and death” in Ukraine and also to call on Zelenskiy to be open to any “serious peace proposal”.

Zelenskiy said on Friday that peace talks with Russia while Putin was still president would be impossible. “We are ready for a dialogue with Russia, but with another president of Russia,” he said.

(Reporting by Tom Balmforth and Pavel PolityukAdditional reporting by Reuters bureausWriting by Conor HumphriesEditing by Frances Kerry and Raissa Kasolowsky)