Shirtless photo a “joke,” says FBI agent who began Petraeus inquiry

WASHINGTON/NEW YORK (Reuters) – The FBI agent who began the investigation that led David Petraeus to resign as CIA director said that a shirtless photo he sent to a woman at the center of the probe was a “joke” sent to many friends, and was not meant to be sexual.

Frederick Humphries told the Seattle Times in an interview published Thursday that the photo in the unfolding adultery scandal that brought down Petraeus was sent to Tampa, Florida, socialite Jill Kelley in 2010.

Humphries, who has been identified in media reports on the scandal mainly as the “shirtless” FBI agent, was a “top-notch” operative, according to a prosecutor who worked with him on the “millennium bomber” case years ago.

Andrew Hamilton, now a senior deputy prosecutor for King County, Washington, said Humphries was assigned to the case partly because he spoke excellent French. Ahmed Ressam, who was convicted of plotting to bomb the Los Angeles International Airport on New Year’s Eve 1999, claimed to be from Quebec and spoke French.

“That’s the first time I met him, as a case agent,” Hamilton told Reuters. “We spent a lot of time together over the next couple years getting ready for trial, and I couldn’t have asked for more as a case agent. He was very, very thorough, and very honest. We always thought we were very lucky to have him.”

Five months ago, Kelley ignited the FBI investigation that led to Petraeus when she asked Humphries whether the bureau could look into harassing emails she had been receiving.

The investigation eventually revealed that the emails to Kelley were sent by Paula Broadwell, an Army reserve officer in military intelligence and co-author of a biography of Petraeus.

The FBI investigation revealed Broadwell’s affair with Petraeus, who cited the relationship when he resigned as CIA chief last week. The probe also ensnared General John Allen, the commander of NATO forces in Afghanistan, whom agents found had exchanged “flirtatious” emails with Kelley, law enforcement officials said.

(Editing by David Lindsey and Jim Loney)

Internet News Headlines – Yahoo! News

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Justin Bieber Brings His Mom to the American Music Awards

By Maggie Coughlan

11/18/2012 at 09:35 PM EST

Pattie Mallette and Justin Bieber

Jonathan Alcorn/Reuters/Landov

Mother knows best!

Despite his recent split from Selena Gomez, Justin Bieber still had a date for the 40th American Music Awards on Sunday: his mother, Pattie Mallette.

Malette – who recently penned Nowhere But Up: The Story of Justin Bieber's Mom – looked thrilled to pose for photographs with her son.

When Bieber won the first award of the night, for favorite pop/rock male artist, his proud mother, 38, beamed.

"I want to say this is for all the haters who thought I was just here for one or two years. I feel like I'm going to be here for a very long time," the singer said as he accepted the award.

The award was a highlight during a rocky week for Bieber, who on Friday reunited with Gomez, 20, for dinner at a Japanese restaurant in Los Angeles. But just five minutes after entering the restaurant, the couple emerged with Gomez looking visibly "mad," says a source.

Later that night, Bieber Tweeted "Things aren't always easy. there is a lot of pressure. im figuring it all out. im trying. but i care, i notice, i still hear u. #Beliebers."

Read More..

EU drug regulator OKs Novartis' meningitis B shot

LONDON (AP) — Europe's top drug regulator has recommended approval for the first vaccine against meningitis B, made by Novartis AG.

There are five types of bacterial meningitis. While vaccines exist to protect against the other four, none has previously been licensed for type B meningitis. In Europe, type B is the most common, causing 3,000 to 5,000 cases every year.

Meningitis mainly affects infants and children. It kills about 8 percent of patients and leaves others with lifelong consequences such as brain damage.

In a statement on Friday, Andrin Oswald of Novartis said he is "proud of the major advance" the company has made in developing its vaccine Bexsero. It is aimed at children over two months of age, and Novartis is hoping countries will include the shot among the routine ones for childhood diseases such as measles.

Novartis said the immunization has had side effects such as fever and redness at the injection site.

Recommendations from the European Medicines Agency are usually adopted by the European Commission. Novartis also is seeking to test the vaccine in the U.S.

Read More..

Wall Street Week Ahead: Going off "cliff" with a bungee cord

NEW YORK (Reuters) - The 1987 crash. The Y2K bug. The debt ceiling debacle of 2011.

All these events, in the end, turned out to be buying opportunities for stocks. So will the "fiscal cliff," some investors say as they watch favorite stocks tumble during the political give-and-take happening in Washington.

The first round of talks aimed at avoiding the "fiscal cliff" caused a temporary rise in equities on Friday, signaling Wall Street's recent declines could be a buying opportunity. The gains were small and sentiment remains weak, but it suggests hope for market bulls.

Though shares ended moderately higher on Friday, it was not enough to offset losses for the week. The S&P was down 1.5 percent, while both the Dow and the Nasdaq fell 1.8 percent.

The S&P 500 is down more than 5 percent in the seven sessions that followed President Barack Obama's re-election. Uncertainty arose as attention turned to Washington's task of dealing with mandated tax hikes and spending cuts that could take the U.S. economy back into recession.

Some see the market's move as an overreaction to hyperbolic headlines about policy gridlock in Washington, believing stocks may start to rebound in what should be a quiet few days ahead of the Thanksgiving holiday next Thursday.

"It just doesn't seem to make any sense that you suddenly wake up the day after the election and realize we've got a fiscal cliff," said Krishna Kumar, partner at New York hedge fund Goose Hollow Alpha Advisors.

Not long ago the S&P was on target for its second-best year in the last 10, riding a 17 percent advance in 2012. That's been halved to about 8 percent, which isn't bad but disappointing compared with just a month ago.

Investors have been selling the year's winners. Apple is down 25 percent from its peak above $700. General Electric is down 14 percent; Google has lost 16 percent. Overall, the stocks that make up the top 10 percent of performers in the month prior to Election Day have been the worst performers since, according to Bespoke Investment Group of Harrison, New York.

"I think it's a good opportunity to be long stocks at these levels," said Kumar.

Hikes on capital gains and dividend taxes are on the line, and Obama has dug in his heels on what he sees as a mandate to make the tax code more progressive.

He seems to have the upper hand in dealings with Congress because Republican lawmakers don't want to see tax rates increase, which is what will happen if no solution is found by the beginning of 2013. Republicans don't want to take the blame for driving the economy over the cliff.

The current crisis is similar to last year's fight to raise the U.S. debt ceiling, which led to the downgrade of the United States' top credit rating in early August 2011.

During the dealings, the S&P 500 lost 18.8 percent between its peak in July 2011 and its bottom in August. As the market slid, the political standoff badly hurt investors' confidence in Washington, setting off a spike in volatility.

In the end a deal was announced that raised the ceiling and put off longer-term fiscal decisions until January 1, 2013, setting the stage for today's "fiscal cliff" crisis.

After staying flat through September 2011, the S&P 500 jumped 31 percent between its October low and the end of March.

BUY THE DIP?

Gridlock in Washington and all that could possibly go wrong with the economy if a deal is not reached have grabbed the headlines, but the negotiations leave room for stock market gains. Congressional leaders said Friday they will work through the Thanksgiving holiday recess to find a solution.

"The debate over how to solve (the fiscal cliff) may be more productive than is commonly recognized," said Brad Lipsig, senior portfolio manager at UBS Financial Services in New York.

"The U.S. is facing a major debt overhang, and serious steps toward addressing it might ultimately be viewed as a positive for future growth," he said. "The market may recognize this and, after a time of hand wringing, recover from the concerns with a renewed sense of optimism."

The recent selling took the S&P 500's relative strength index - a technical measure of internal strength - below 30 this week, indicating the benchmark is oversold and due for a rebound.

The RSI in four of the 10 S&P sectors - utilities, telecoms, consumer staples and technology - is below 30 and the highest RSI reading, for the consumer discretionary sector, is below 40, suggesting a bounce is in store.

"What I want to do is what we did during the decline following the budget negotiations in the summer of 2011: The lower the stock market goes, the more I want to own stock," said Brian Reynolds, chief market strategist at New York-based Rosenblatt Securities.

"If we go off the cliff it will be with a bungee cord attached," he said.

KEEP CALM AND HEDGE

Volatility is expected to rise through the end of November and to spike in late December if no agreement on the fiscal cliff is reached in Congress. Alongside comes opportunity for those with high risk tolerance.

"Recently, volatility has increased in the market overall. You can't really pick it up in the VIX yet, but I think as we get through November, I think you're likely to see the VIX be at a relatively higher level," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

In 2011, the VIX averaged 19.2 in July and 35 in August. So far this month the average is 17.8 and it is expected to spike if negotiations on the cliff drag into late next month.

"Looking at the range of possibilities, I would say any of them would be better than sitting here waiting. I would even put going off the fiscal cliff in that category," said Jill Cuniff, president of Seattle-based Edge Asset Management Inc, which manages about $20 billion.

"But we don't believe Congress will let that happen; there's going to be some middle ground here."

(Reporting by Rodrigo Campos and Jonathan Spincer, additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..

Israel, Gaza fighting rages on as Egypt seeks truce

GAZA/JERUSALEM (Reuters) - Israel bombed militant targets in Gaza for a fifth straight day on Sunday, launching aerial and naval attacks as its military prepared for a possible ground invasion, though Egypt saw "some indications" of a truce ahead.

Forty-seven Palestinians, about half of them civilians, including 12 children, have been killed in Israel's raids, Palestinian officials said. More than 500 rockets fired from Gaza have hit Israel, killing three people and injuring dozens.

Israel unleashed its massive air campaign on Wednesday, killing a leading militant of the Hamas Islamist group that controls Gaza and rejects Israel's existence, with the declared goal of deterring gunmen in the coastal enclave from launching rockets that have plagued its southern communities for years.

The Jewish state has since launched more than 950 air strikes on the coastal Palestinian territory, targeting weaponry and flattening militant homes and headquarters.

The raids continued past midnight on Sunday, with warships bombarding targets from the sea. And an air raid targeted a building in Gaza City housing the offices of local Arab media, wounding three journalists from al Quds television, a station Israel sees as pro-Hamas, witnesses said.

Two other predawn attacks on houses in the Jebalya refugee camp killed one child and wounded 12 other people, medical officials said.

These attacks followed a defiant statement by Hamas military spokesman Abu Ubaida, who told a televised news conference.

"This round of confrontation will not be the last against the Zionist enemy and it is only the beginning."

The masked gunman dressed in military fatigues insisted that despite Israel's blows Hamas "is still strong enough to destroy the enemy."

An Israeli attack on Saturday destroyed the house of a Hamas commander near the Egyptian border.

Casualties there were averted however, because Israel had fired non-exploding missiles at the building beforehand from a drone, which the militant's family understood as a warning to flee, and thus their lives were spared, witnesses said.

Israeli aircraft also bombed Hamas government buildings in Gaza on Saturday, including the offices of Prime Minister Ismail Haniyeh and a police headquarters.

Among those killed in air strikes on Gaza on Saturday were at least four suspected militants riding motorcycles, and several civilians including a 30-year-old woman.

ISRAELI SCHOOLS SHUT

Israel said it would keep schools in its southern region shut on Sunday as a precaution to avoid casualties from rocket strikes reaching as far as Tel Aviv and Jerusalem in the past few days.

Israel's "Iron Dome" missile interceptor system destroyed in mid-air a rocket fired by Gaza militants at Tel Aviv on Saturday, where volleyball games on the beach front came to an abrupt halt as air-raid sirens sounded.

Hamas' armed wing claimed responsibility for the attack on Tel Aviv, the third against the city since Wednesday. It said it had fired an Iranian-designed Fajr-5 at the coastal metropolis, some 70 km (43 miles) north of Gaza.

In the Israeli Mediterranean port of Ashdod, a rocket ripped into several balconies. Police said five people were hurt.

Israel's operation has drawn Western support for what U.S. and European leaders have called Israel's right to self-defense, but there was also a growing number of calls from world leaders to seek an end to the violence.

British Prime Minister David Cameron "expressed concern over the risk of the conflict escalating further and the danger of further civilian casualties on both sides," in a conversation with Israeli Prime Minister Benjamin Netanyahu, a spokesperson for Cameron said.

The United Kingdom was "putting pressure on both sides to de-escalate," the spokesman said, adding that Cameron had urged Netanyahu "to do everything possible to bring the conflict to an end."

Ben Rhodes, a deputy national security adviser to President Barack Obama, said the United States would like to see the conflict resolved through "de-escalation" and diplomacy, but also believes Israel has a right to self-defense.

Egyptian President Mohamed Mursi said in Cairo as his security deputies sought to broker a truce with Hamas leaders, that "there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees."

Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying "there is hope," but it was too early to say whether the efforts would succeed.

In Jerusalem, an Israeli official declined to comment on the negotiations. Military commanders said Israel was prepared to fight on to achieve a goal of halting rocket fire from Gaza, which has plagued Israeli towns since late 2000, when failed peace talks led to the outbreak of a Palestinian uprising.

Diplomats at the United Nations said Secretary-General Ban Ki-moon is expected to visit Israel and Egypt in the coming week to push for an end to the fighting.

POSSIBLE GROUND OFFENSIVE

Israel, though, with tanks and artillery positioned along the frontier, signaled it was still weighing a possible ground offensive into Gaza.

Israeli cabinet ministers decided on Friday to more than double the current reserve troop quota set for the Gaza offensive to 75,000 and around 16,000 reservists have already been called up.

Asked by reporters whether a ground operation was possible, Major-General Tal Russo, commander of the Israeli forces on the Gaza frontier, said: "Definitely."

"We have a plan. ... It will take time. We need to have patience. It won't be a day or two," he added.

Another senior commander briefing reporters on condition of anonymity said Israel had scored "good achievements" in striking at nearly 1,000 targets, with the aim of ridding Hamas of firepower imported from Libya, Sudan and Iran.

A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favorite to win a January national election.

Hamas fighters are no match for the Israeli military. The last Gaza war, involving a three-week Israeli air blitz and ground invasion over the New Year's period of 2008-09, killed over 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.

But the Gaza conflagration has stirred the pot of a Middle East already boiling from two years of Arab revolution and a civil war in Syria that threatens to spread beyond its borders.

One major change has been the election of an Islamist government in Cairo that is allied with Hamas, potentially narrowing Israel's maneuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

(Writing by Allyn Fisher-Ilan; Editing by Todd Eastham)

Read More..

Apple, Samsung allowed to add products in U.S. patent lawsuit

(Reuters) – A U.S. judge allowed Samsung Electronics Co Ltd to pursue claims the iPhone5 infringes its patents on Thursday, while also allowing Apple Inc to add claims that the Samsung Galaxy Note, Galaxy S III and the Jelly Bean operating system violate its patents.

The ruling by U.S. Magistrate Judge Paul Grewal in San Jose, California, was the latest development in a continuing legal war by Apple against manufacturers like Samsung whose products use Google Inc’s Android software.

Representatives for both Apple and Samsung declined comment.

The case is one of two patent infringement lawsuits pending in the U.S. District Court in San Jose by Apple against Samsung. An earlier lawsuit by Apple that related to different patents resulted in a $ 1.05 billion jury verdict against Samsung on August 24.

Apple filed the second lawsuit in February, alleging that various Samsung smartphone and tablet products including the Galaxy Nexus infringed eight of its patents.

Samsung denied infringement and filed a cross-complaint alleging that Apple’s iPhone and iPad infringed eight of its patents.

U.S. District Judge Lucy Koh issued a preliminary injunction against pretrial sales of the Nexus in June. But the U.S. Court of Appeals for the Federal Circuit overturned the sales ban on October 11.

Following the debut of the iPhone on September 21, Samsung sought to add it as an Apple product that infringed its patents. Apple moved likewise to add the Samsung Galaxy Note 10.1, Samsung Galaxy S III and the Jelly Bean operating system in connection with the Galaxy Nexus.

In his ruling Thursday, Grewal said Samsung acted with “reasonable diligence” in asking the court to allow it to add the iPhone 5 to the case.

Apple did not oppose adding the iPhone5. Nevertheless, Grewal warned Apple to “think twice before opposing similar amendments reflecting other newly released products — e.g. the iPad 4 and iPad mini — that Samsung may propose in the near future.”

The case is Apple Inc v. Samsung Electronics Co., Ltd., et al., U.S. District Court, Northern District of California, 12-cv-00630.

(Reporting By Nate Raymond in New York; Editing by Richard Pullin)

Wireless News Headlines – Yahoo! News

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Taylor Swift and One Direction's Harry Styles: Are They Dating?

By Patrick Gomez

11/17/2012 at 10:40 PM EST

Taylor Swift and Harry Styles

Janet Mayer/Splash News Online; Don Arnold/Wireimage

Taylor Swift appears to be taking her love life in a new direction.

The "Never Ever Getting Back Together" singer is seemingly taking her lyrics to heart as she moves on from recent ex, Conor Kennedy, and enjoys the company of One Direction hottie Harry Styles.

"I had to literally do a double-take," an onlooker tells PEOPLE of finding Styles, 18, with Swift, 22, on the set of The X Factor Thursday morning.

Styles was on hand to watch Swift rehearse the debut of "State of Grace," which she performed later that night on the Fox reality show.

"He was smiling at her while she rehearsed. When she was done he jumped up on stage, picked her up, put her over his shoulder and carried her off stage," the onlooker says. "The whole crew was really surprised."

The young singers were also spotted by X Factor host Mario Lopez, who says he was slapped on the back by Styles during Swift's rehearsal.

"I said, 'What are you doing here,' " Lopez said on his 104.3 MY FM radio show Friday. "And he sort of [pointed] toward Taylor."

Lopez went on to say he later saw the two "hand-in-hand."

A telling sign of the budding relationship may have been a look Styles shared with his bandmate Niall Horan a week earlier after Horan told PEOPLE his favorite song of 2012 was Swift's "Never Ever Getting Back Together."

When asked if he would ever date Swift, Horan gave a small laugh, looked at Styles and answered with a succinct, "no."

Read More..

EU drug regulator OKs Novartis' meningitis B shot

LONDON (AP) — Europe's top drug regulator has recommended approval for the first vaccine against meningitis B, made by Novartis AG.

There are five types of bacterial meningitis. While vaccines exist to protect against the other four, none has previously been licensed for type B meningitis. In Europe, type B is the most common, causing 3,000 to 5,000 cases every year.

Meningitis mainly affects infants and children. It kills about 8 percent of patients and leaves others with lifelong consequences such as brain damage.

In a statement on Friday, Andrin Oswald of Novartis said he is "proud of the major advance" the company has made in developing its vaccine Bexsero. It is aimed at children over two months of age, and Novartis is hoping countries will include the shot among the routine ones for childhood diseases such as measles.

Novartis said the immunization has had side effects such as fever and redness at the injection site.

Recommendations from the European Medicines Agency are usually adopted by the European Commission. Novartis also is seeking to test the vaccine in the U.S.

Read More..

Wall Street Week Ahead: Going off "cliff" with a bungee cord

NEW YORK (Reuters) - The 1987 crash. The Y2K bug. The debt ceiling debacle of 2011.

All these events, in the end, turned out to be buying opportunities for stocks. So will the "fiscal cliff," some investors say as they watch favorite stocks tumble during the political give-and-take happening in Washington.

The first round of talks aimed at avoiding the "fiscal cliff" caused a temporary rise in equities on Friday, signaling Wall Street's recent declines could be a buying opportunity. The gains were small and sentiment remains weak, but it suggests hope for market bulls.

Though shares ended moderately higher on Friday, it was not enough to offset losses for the week. The S&P was down 1.5 percent, while both the Dow and the Nasdaq fell 1.8 percent.

The S&P 500 is down more than 5 percent in the seven sessions that followed President Barack Obama's re-election. Uncertainty arose as attention turned to Washington's task of dealing with mandated tax hikes and spending cuts that could take the U.S. economy back into recession.

Some see the market's move as an overreaction to hyperbolic headlines about policy gridlock in Washington, believing stocks may start to rebound in what should be a quiet few days ahead of the Thanksgiving holiday next Thursday.

"It just doesn't seem to make any sense that you suddenly wake up the day after the election and realize we've got a fiscal cliff," said Krishna Kumar, partner at New York hedge fund Goose Hollow Alpha Advisors.

Not long ago the S&P was on target for its second-best year in the last 10, riding a 17 percent advance in 2012. That's been halved to about 8 percent, which isn't bad but disappointing compared with just a month ago.

Investors have been selling the year's winners. Apple is down 25 percent from its peak above $700. General Electric is down 14 percent; Google has lost 16 percent. Overall, the stocks that make up the top 10 percent of performers in the month prior to Election Day have been the worst performers since, according to Bespoke Investment Group of Harrison, New York.

"I think it's a good opportunity to be long stocks at these levels," said Kumar.

Hikes on capital gains and dividend taxes are on the line, and Obama has dug in his heels on what he sees as a mandate to make the tax code more progressive.

He seems to have the upper hand in dealings with Congress because Republican lawmakers don't want to see tax rates increase, which is what will happen if no solution is found by the beginning of 2013. Republicans don't want to take the blame for driving the economy over the cliff.

The current crisis is similar to last year's fight to raise the U.S. debt ceiling, which led to the downgrade of the United States' top credit rating in early August 2011.

During the dealings, the S&P 500 lost 18.8 percent between its peak in July 2011 and its bottom in August. As the market slid, the political standoff badly hurt investors' confidence in Washington, setting off a spike in volatility.

In the end a deal was announced that raised the ceiling and put off longer-term fiscal decisions until January 1, 2013, setting the stage for today's "fiscal cliff" crisis.

After staying flat through September 2011, the S&P 500 jumped 31 percent between its October low and the end of March.

BUY THE DIP?

Gridlock in Washington and all that could possibly go wrong with the economy if a deal is not reached have grabbed the headlines, but the negotiations leave room for stock market gains. Congressional leaders said Friday they will work through the Thanksgiving holiday recess to find a solution.

"The debate over how to solve (the fiscal cliff) may be more productive than is commonly recognized," said Brad Lipsig, senior portfolio manager at UBS Financial Services in New York.

"The U.S. is facing a major debt overhang, and serious steps toward addressing it might ultimately be viewed as a positive for future growth," he said. "The market may recognize this and, after a time of hand wringing, recover from the concerns with a renewed sense of optimism."

The recent selling took the S&P 500's relative strength index - a technical measure of internal strength - below 30 this week, indicating the benchmark is oversold and due for a rebound.

The RSI in four of the 10 S&P sectors - utilities, telecoms, consumer staples and technology - is below 30 and the highest RSI reading, for the consumer discretionary sector, is below 40, suggesting a bounce is in store.

"What I want to do is what we did during the decline following the budget negotiations in the summer of 2011: The lower the stock market goes, the more I want to own stock," said Brian Reynolds, chief market strategist at New York-based Rosenblatt Securities.

"If we go off the cliff it will be with a bungee cord attached," he said.

KEEP CALM AND HEDGE

Volatility is expected to rise through the end of November and to spike in late December if no agreement on the fiscal cliff is reached in Congress. Alongside comes opportunity for those with high risk tolerance.

"Recently, volatility has increased in the market overall. You can't really pick it up in the VIX yet, but I think as we get through November, I think you're likely to see the VIX be at a relatively higher level," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

In 2011, the VIX averaged 19.2 in July and 35 in August. So far this month the average is 17.8 and it is expected to spike if negotiations on the cliff drag into late next month.

"Looking at the range of possibilities, I would say any of them would be better than sitting here waiting. I would even put going off the fiscal cliff in that category," said Jill Cuniff, president of Seattle-based Edge Asset Management Inc, which manages about $20 billion.

"But we don't believe Congress will let that happen; there's going to be some middle ground here."

(Reporting by Rodrigo Campos and Jonathan Spincer, additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Read More..

Israel authorizes more reservists after rockets target cities

GAZA/JERUSALEM (Reuters) - Israeli aircraft pounded Hamas government buildings in Gaza on Saturday, including the building housing the prime minister's office, after Israel's Cabinet authorized the mobilization of up to 75,000 reservists, preparing the ground for a possible invasion into Gaza.

Hamas, the Islamist group that runs the Gaza Strip, said Israeli planes bombed the office building of Prime Minister Ismail Haniyeh - where he had met on Friday with the Egyptian prime minister, and struck a police headquarters building.

An Israeli military spokeswoman confirmed the strike on Haniyeh's office.

On Friday, Palestinians fired a rocket toward Jerusalem for the first time in decades.

Tel Aviv, Israel's commercial centre, also came under rocket attack for the second straight day, in defiance of an Israeli air offensive that began on Wednesday with the declared aim of deterring Hamas from launching cross-border attacks that have plagued southern Israel for years.

Hamas claimed responsibility for firing at Jerusalem and Tel Aviv. Israel said the rocket launched toward Jerusalem landed in the occupied West Bank, and the one fired at Tel Aviv did not hit the city. There were no reports of casualties.

The siren that sounded in Jerusalem stunned many Israelis. The city, holy to Jews, Muslims and Christians, was last struck by a Palestinian rocket in 1970, and it was not a target when Saddam Hussein's Iraq fired missiles at Israel in the 1991 Gulf War.

Prime Minister Benjamin Netanyahu held a four-hour strategy session late on Friday with a clutch of senior ministers in Tel Aviv on widening the military campaign, while other Cabinet members were polled by telephone on raising the mobilization level.

Political sources said they decided to more than double the current reserve troop quota set for the Gaza offensive to 75,000. The move did not necessarily mean all would be called into service.

Hours earlier, Egypt's prime minister, denouncing what he described as Israeli aggression, visited Gaza and said Cairo was prepared to mediate a truce.

U.S. President Barack Obama spoke with Netanyahu and Egyptian President Mohamed Mursi on Friday, the White House said.

Officials in Gaza said 30 Palestinians - 14 militants and 16 civilians, among them eight children and a pregnant woman - had been killed in the enclave since Israel began its air strikes. Three Israeli civilians were killed by a rocket on Thursday.

The Israeli military said 133 rockets fired from Gaza had hit Israel since Friday and 82 more were intercepted by its Iron Dome anti-missile system. Dozens of Israeli bombing raids rocked the enclave.

In a further sign Netanyahu might be clearing the way for a ground operation, Israel's armed forces announced that a highway leading to the territory and two roads bordering the enclave of 1.7 million Palestinians would be off-limits to civilian traffic.

Tanks and self-propelled guns were seen near the border area on Friday, and the military said it had already called 16,000 reservists to active duty.

Netanyahu is favored to win a January national election, but further rocket strikes against Tel Aviv, a free-wheeling city Israelis equate with New York, and Jerusalem, which Israel regards as its capital, could be political poison for the conservative leader.

"The Israel Defense Forces will continue to hit Hamas hard and are prepared to broaden the action inside Gaza," Netanyahu said before the rocket attacks on the two cities.

Asked about Israel massing forces for a possible Gaza invasion, Hamas spokesman Sami Abu Zuhri said, "The Israelis should be aware of the grave results of such a raid, and they should bring their body bags."

SOLIDARITY VISIT

A solidarity visit to Gaza by Egyptian Prime Minister Hisham Kandil, whose Islamist government is allied with Hamas but also party to a 1979 peace treaty with Israel, had appeared to open a tiny window to emergency peace diplomacy.

Kandil said, "Egypt will spare no effort ... to stop the aggression and to achieve a truce."

But a three-hour truce that Israel declared for the duration of Kandil's visit never took hold.

Obama commended Egypt's efforts to help calm the Gaza violence in a call to Mursi on Friday, the White House said, and underscored his hope of restoring stability.

In a call with Netanyahu, Obama discussed options for "de-escalating" the situation, the White House said.

Obama "reiterated U.S. support for Israel's right to defend itself, and expressed regret over the loss of Israeli and Palestinian civilian lives," a statement on the call said.

Israel Radio's military affairs correspondent said the army's Homefront Command had told municipal officials to make civil defense preparations for the possibility that fighting could drag on for seven weeks. An Israeli military spokeswoman declined to comment on the report.

The Gaza conflagration has stoked the flames of a Middle East already ablaze with two years of Arab revolution and a civil war in Syria that threatens to leap across borders.

It is the biggest test yet for Mursi, a veteran Islamist politician from the Muslim Brotherhood who was elected this year after protests ousted military autocrat Hosni Mubarak in 2011.

Egypt's Muslim Brotherhood are spiritual mentors of Hamas, yet Mursi has also pledged to respect Cairo's 1979 peace treaty with Israel, seen in the West as the cornerstone of regional security. Egypt and Israel both receive billions of dollars in U.S. military aid to underwrite their treaty.

Mursi has vocally denounced the Israeli military action, while promoting Egypt as a mediator, a mission that his prime minister's visit was intended to further.

U.S. Secretary of State Hillary Clinton spoke by telephone on Friday to the Egyptian and Israeli foreign ministers as well as Jordan's King Abdullah and planned to speak on Saturday with Qatar's prime minister, said a senior State Department official traveling with her in Singapore.

"We believe that Egypt has an important leadership role to play on this. It has the relationships in Gaza. The PM traveled there yesterday ... so we believe that they have the stature, the credibility and the relationships to be able to persuade Hamas and its allies to stop," the State Department official said. "So our message to them has been: 'Use it, use those things.'"

A Palestinian official close to Egypt's mediators told Reuters that Kandil's visit "was the beginning of a process to explore the possibility of reaching a truce. It is early to speak of any details or of how things will evolve".

Hamas fighters are no match for the Israeli military. The last Gaza war, involving a three-week long Israeli air blitz and ground invasion over the New Year period of 2008-2009, killed more than 1,400 Palestinians, mostly civilians. Thirteen Israelis died.

Tunisia's foreign minister was due to visit Gaza on Saturday "to provide all political support for Gaza" the spokesman for the Tunisian president, Moncef Marzouki, said in a statement.

U.N. Secretary-General Ban Ki-moon is expected to visit Israel and Egypt next week to push for an end to the fighting in Gaza, U.N. diplomats said on Friday

Hamas refuses to recognize Israel's right to exist. By contrast, Palestinian President Mahmoud Abbas, who rules in the nearby West Bank, does recognize Israel, but peace talks between the two sides have been frozen since 2010.

Abbas' supporters say they will push ahead with a plan to have Palestine declared an "observer state" rather than a mere "entity" at the United Nations later this month.

(Additional reporting by Maayan Lubell, Jeffrey Heller, Crispian Balmer in Jerusalem, David Brunnstrom in Singapore, and Louis Charbonneau at the United Nations; Writing by Jeffrey Heller; Editing by Giles Elgood, Will Waterman and Peter Cooney)

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