New Online Privacy Loophole Lets Facebook Advertise to Kids

Mark Zuckerberg‘s been eager to find a way to get more kids on Facebook for years, and on Wednesday, the Federal Trade Commission handed it to him on a platter. That might be overstating it a little bit. It’s more like the FTC served it to him on a platter covered in plastic wrap with a note attached that says “Do not open.” Nevertheless, should Facebook decided to see what’s inside, experts in online privacy for children say the social network could legally start peddling everything from kids’ bicycles to that new gender-neutral Easy Bake Oven.

RELATED: German Official Urges Citizens to Stop Using Facebook

After months of deliberating and plenty of lobbying on both sides of the issue, the FTC updated the controversial Children’s Online Privacy Protection Act (COPPA) this week. The changes were absolutely designed to better protect children in the privacy-invading era of social media, especially from the data-hungry advertisers who want to sell them things. Websites like Facebook don’t allow kids to sign up without their parents permission, generally because COPPA has prohibited them from collecting the kinds of information they need to serve them ads. And why would they want a user to whom they couldn’t serve ads? Under the new FTC rules, parental permission is required for just about anything a kid would do on Facebook, including uploading photos, videos and geolocational information. Tracking tools like cookies are also verboten without a parent’s permission.

RELATED: What Police Learn About You When They Subpoena Your Facebook Account

But there’s a loophole. The new rules say very plainly that no parental permission is needed “for the sole purpose of supporting the website or online service’s internal operations, such as contextual advertising, frequency capping, legal compliance, site analysis, and network communications.” The key phrase there is “contextual advertising,” which is an ad product Facebook has been working on for a while. Facebook’s version basically reads your News Feed and shows you ads that are relevant, or contextual, to what you’re reading. As a few people have pointed out, this opens a door for Facebook to start exploring the idea of ad-supported profiles for kids. Alan Simpson, the vice president of child privacy advocacy group Common Sense, isn’t happy about this idea. “Common Sense doesn’t like this part, and the industry lobbyists probably do,” he told TechCrunch Monday evening.

RELATED: What Facebook Does to Kids’ Brains

Now, there are a lot of ifs in this scenario. Based on the magnitude and sensitivity of the issue, Facebook probably doesn’t want to go scaring a bunch of parents by sneaking through loopholes to show their kids Easy Bake Oven ads. It has been nearly a decade and a half since COPPA got an update, though, and Mark Zuckerberg isn’t really known for his patience. Of course, Facebook could do what they’ve been doing for ages, which is look over their shoulder while kids lie about having permission and sign up anyways.

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The X Factor: Finalists Sing for Votes One Last Time

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The X Factor

By Aaron Parsley

12/19/2012 at 10:40 PM EST

from left: Fifth Harmony, Tate Stevens and Carly Rose Sonenclar

Ray Mickshaw/FOX

Who's going to get a $5 million recording contract?

The X Factor's season 2 finale got underway Wednesday night with the finalists performing three songs each – including a duet with a music superstar.

Britney Spears's contestant, Carly Rose Sonenclar, has been a favorite, trading the No. 1 spot with her fellow finalist, L.A. Reid's country singer Tate Stevens, through out the competition.

Carly first reprised "Feeling Good," and sang it better than the first time she performed it during her audition, according to judge Simon Cowell. "It's shocking how bright your star is," Spears said. She performed her duet with Leann Rimes, singing the country star's hit, "How Do I Live." Her final performance – of Leonard Cohen's "Hallelujah" – had the judges gushing. "You looked like an angel," Demi Lovato said. "You sang like a ridiculously talented angel."

Tate, the competition's only country singer, first performed "Anything Goes" by Randy Houser. "I'm still obsessed with you," Demi said. Added Simon, "You are made in America. You are authentic." For his duet, he sang Little Big Town's cheeky party anthem, "Pontoon." And for his final performance in the competition, Tate sang Chris Young's "Tomorrow." "In a year's time," Simon said, "We're going to be hearing about your record sales."

"I'm almost crying because I realize it's the last time I'm going to see you perform on that stage," Demi said.

Simon's remaining act, girl group Fifth Harmony, may have had their best night yet in the competition, beginning with "Anything Can Happen." L.A. called it "magical," adding that they're "the one to beat." Britney said the colorful performance was "spectacular, girly and fun." Their duet, with The X Factor's own Demi Lovato, of "Give Your Heart a Break" was a highlight of the night.

"These girls are so easy to work with," the judge said. "They're so down to earth, so sweet and I love you guys. This was so much fun."

Their last song, "Let It Be" by the Beatles, proved how much the five members have "blossomed as a group," Britney said. Admitting his bias, their mentor Simon said, based on their performances on Wednesday, the girls of Fifth Harmony "deserve to win the competition."

Do you agree? Or is Tate or Carly your choice for the big prize? Tell us in the comments below.

The winner will be revealed Thursday in a two-hour show that will include a performance by One Direction.

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Experts: Kids are resilient in coping with trauma

WASHINGTON (AP) — They might not want to talk about the gunshots or the screams. But their toys might start getting into imaginary shootouts.

Last week's school shooting in Connecticut raises the question: What will be the psychological fallout for the children who survived?

For people of any age, regaining a sense of security after surviving violence can take a long time. They're at risk for lingering anxiety, depression, post-traumatic stress disorder.

But after the grief and fear fades, psychiatrists say most of Newtown's young survivors probably will cope without long-term emotional problems.

"Kids do tend to be highly resilient," said Dr. Matthew Biel, chief of child and adolescent psychiatry at MedStar Georgetown University Hospital.

And one way that younger children try to make sense of trauma is through play. Youngsters may pull out action figures or stuffed animals and re-enact what they witnessed, perhaps multiple times.

"That's the way they gain mastery over a situation that's overwhelming," Biel explained, saying it becomes a concern only if the child is clearly distressed while playing.

Nor is it unusual for children to chase each other playing cops-and-robbers, but now parents might see some also pretending they're dead, added Dr. Melissa Brymer of the UCLA-Duke National Center for Child Traumatic Stress.

Among the challenges will be spotting which children are struggling enough that they may need professional help.

Newtown's tragedy is particularly heart-wrenching because of what such young children grappled with — like the six first-graders who apparently had to run past their teacher's body to escape to safety.

There's little scientific research specifically on PTSD, post-traumatic stress disorder, in children exposed to a burst of violence, and even less to tell if a younger child will have a harder time healing than an older one.

Overall, scientists say studies of natural disasters and wars suggest most children eventually recover from traumatic experiences while a smaller proportion develop long-term disorders such as PTSD. Brymer says in her studies of school shootings, that fraction can range from 10 percent to a quarter of survivors, depending on what they actually experienced. A broader 2007 study found 13 percent of U.S. children exposed to different types of trauma reported some symptoms of PTSD, although less than 1 percent had enough for an official diagnosis.

Violence isn't all that rare in childhood. In many parts of the world — and in inner-city neighborhoods in the U.S., too — children witness it repeatedly. They don't become inured to it, Biel said, and more exposure means a greater chance of lasting psychological harm.

In Newtown, most at risk for longer-term problems are those who saw someone killed, said Dr. Carol North of the University of Texas Southwestern Medical Center, who has researched survivors of mass shootings.

Friday's shootings were mostly in two classrooms of Sandy Hook Elementary School, which has about 450 students through fourth-grade.

But those who weren't as close to the danger may be at extra risk, too, if this wasn't their first trauma or they already had problems such as anxiety disorders that increase their vulnerability, she said.

Right after a traumatic event, it's normal to have nightmares or trouble sleeping, to stick close to loved ones, and to be nervous or moody, Biel said.

To help, parents will have to follow their child's lead. Grilling a child about a traumatic experience isn't good, he stressed. Some children will ask a lot of questions, seeking reassurance, he said. Others will be quiet, thinking about the experience and maybe drawing or writing about it, or acting it out at playtime. Younger children may regress, becoming clingy or having tantrums.

Before second grade, their brains also are at a developmental stage some refer to as magical thinking, when it's difficult to distinguish reality and fantasy. Parents may have to help them understand that a friend who died isn't in pain or lonely but also isn't coming back, Brymer said.

When problem behaviors or signs of distress continue for several weeks, Brymer says it's time for an evaluation by a counselor or pediatrician.

Besides a supportive family, what helps? North advises getting children back into routines, together with their friends, and easing them back into a school setting. Studies of survivors of the Sept. 11 terrorist attacks found "the power of the support of the people who went through it with you is huge," she said.

Children as young as first-graders can benefit from cognitive-behavioral therapy, Georgetown's Biel said. They can calm themselves with breathing techniques. They also can learn to identify and label their feelings — anger, frustration, worry — and how to balance, say, a worried thought with a brave one.

Finally, avoid watching TV coverage of the shooting, as children may think it's happening all over again, Biel added. He found that children who watched the 9/11 clips of planes hitting the World Trade Center thought they were seeing dozens of separate attacks.

___

EDITOR'S NOTE — Lauran Neergaard covers health and medical issues for The Associated Press in Washington.

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Shares, euro rise on hopes of U.S. "cliff" deal, BOJ easing

SINGAPORE (Reuters) - Asian shares rose and the euro hit multi-month highs on Wednesday as signs of progress in resolving the U.S. "fiscal cliff" budget crisis and expectations of more aggressive monetary stimulus from the Bank of Japan lifted riskier assets.

The gains in Asia came after Wall Street's S&P 500 <.spx> rose more than 1 percent, completing its best two-day run in a month, on growing confidence a deal can be reached in Washington to avoid a raft of painful spending cuts and tax rises due to take effect from January if there is no budget agreement. <.n/>

"What is important, and what is driving the market higher, is that the two parties are now in constructive discussions over specific tax levels and spending programs, and working towards a common middle ground," said Cameron Peacock, a strategist at IG Markets in Melbourne.

Industrial commodities such as oil and copper consolidated earlier gains, while gold recovered some lost ground but remained not far above its lowest in nearly four months as progress in the U.S. budget talks limited its safe-haven appeal.

JAPAN SHARES KEEP RISING

Tokyo's Nikkei share average <.n225> rose 1.3 percent, topping 10,000 points for the first time since April, as the Bank of Japan (BOJ) was starting a two-day policy meeting. <.t/>

The BOJ will ease monetary policy and consider adopting a 2 percent inflation target in January, double its current price goal, sources say, after pressure from the incoming prime minister, Shinzo Abe, for stronger efforts to beat deflation.

"The market is already in overbought territory, but investors are increasingly being alarmed that there is a risk of not having Japanese stocks in their portfolios," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Australian shares <.axjo> rose to a 17-month high, led by miners and banks. MSCI's broadest index of Asia Pacific shares outside Japan <.miapj0000pus> gained 0.3 percent, while S&P 500 futures were flat.

The euro rose as far as $1.3250 on electronic trading platform EBS, its highest since the beginning of May, and against the yen it fetched 111.58, having risen as far as 111.69, its highest since late August 2011.

"Unless U.S. fiscal cliff talks take an unexpected turn for the worse, we believe that EUR/USD will meet our 1.3300 year-end target," analysts at BNP Paribas wrote in a note.

Oil held steady, with Brent crude rising a few cents to around $108.88 a barrel and U.S. crude barely changed just below $88.

"There is more upside potential for Brent because of a revival in the overall economic outlook," said Yusuke Seta, a commodities sales manager at Newedge Japan.

Copper was also flat just above $8,020 a metric ton (1.1023 tons). Copper rallied almost 8 percent from mid-November to hit a two-month high a week ago, but has since lost some ground.

Gold rose 0.3 percent to around $1,675 an ounce, after falling to $1,661.01 on Tuesday, its lowest since August.

(Additional reporting by Ayai Tomisawa in Tokyo and Ian Chua in Sydney; Editing by Richard Borsuk)

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Inquiry harshly criticizes State Department over Benghazi attack

WASHINGTON (Reuters) - Security at the U.S. mission in Benghazi, Libya was grossly inadequate to deal with a September 11 attack that killed a U.S. ambassador and three others because of failures within the State Department, an official inquiry found on Tuesday.

In a scathing assessment, the review cited "leadership and management" deficiencies at two department offices, poor coordination among officials and "real confusion" in Washington and in the field over who had the responsibility, and the power, to make decisions that involved policy and security concerns.

The attack killed Ambassador Christopher Stevens and three other Americans and set off a political furor as Republicans used the issue to attack President Barack Obama before the November 6 election in which he won a second term in office.

The report's harsh assessment seemed likely to tarnish the four-year tenure of Secretary of State Hillary Clinton, who said in a letter accompanying the review that she would adopt all of its recommendations.

"Systemic failures and leadership and management deficiencies at senior levels within two bureaus of the State Department ... resulted in a special mission security posture that was inadequate for Benghazi and grossly inadequate to deal with the attack that took place," said the unclassified version of the report by the official "Accountability Review Board."

The board specifically faulted the department's Bureau of Near Eastern Affairs, the regional office which is responsible for the Middle East and North Africa, and the Bureau of Diplomatic Security, its law enforcement and security arm.

The five-member board said U.S. intelligence provided no "specific tactical warning" of the attack and that there was "little understanding of militias in Benghazi and the threat they posed to U.S. interests" in the eastern Libyan city, where the central government has little influence.

The incident has raised questions about the adequacy of security at U.S. embassies around the globe and where to draw the line between protecting American diplomats in dangerous places while giving them enough freedom to do their jobs.

Jon Alterman, head of the Middle East program at the Center for Strategic and International Studies, said the assessment reflected poorly on Clinton and its recommendations would probably make life harder for diplomats in the field

"This is a mark against Secretary Clinton. While she was not singled out, the report highlighted the lack of leadership and organization on security issues, and those fall into her bailiwick," Alterman said.

"The report, however, relies a little too much on bureaucratic fixes," he added. "Sprinkling people throughout the system who are not only empowered to say 'no,' but have an institutional interest in doing so, will make it harder for diplomats to get out of tightly guarded facilities."

DID LOCAL GUARDS LEAVE GATE OPEN?

The report faulted as "misplaced" the mission's dependence for security support on the "armed but poorly skilled" Libyan February 17 Martyrs' Brigade militia members and unarmed guards hired by State Department contractor Blue Mountain Libya.

No Blue Mountain guards were outside the compound immediately before the attack to provide early warning, which was their responsibility. The report raised the possibility that Blue Mountain guards left the "pedestrian gate open after initially seeing the attackers and fleeing the vicinity. They had left the gate unlatched before."

The board found little evidence that the February 17 guards alerted Americans to the attack or swiftly summoned more militia members to help once it was under way. There had been questions of reliability in the weeks preceding the attack.

"At the time of Ambassador Stevens' visit, February 17 militia members had stopped accompanying special mission vehicle movements in protest over salary and working hours," the report said.

The board recommended that the State Department create a new, senior position to oversee security at "high threat" posts, to strengthen security at such posts beyond what is usually provided by host governments, and to consult outside experts on "best practices" for operating in dangerous environments.

The department should also hire more security personnel at dangerous posts, ensure key policy and security staff serve there for at least a year and consider making it easier to punish those who perform poorly in future security incidents.

The political uproar in the United States over the Benghazi attack has already claimed one victim.

U.S. Ambassador to the United Nations Susan Rice, widely tipped as a front-runner to replace Clinton when she steps down as secretary of state early next year, last week withdrew her name from consideration, saying she wished to avoid a potentially disruptive Senate confirmation process.

Republican lawmakers had blasted Rice for comments she made on several television talk shows in the aftermath of the attack in which she said preliminary information suggested the assault was the result of protests against an anti-Muslim video made in California rather than a premeditated strike.

The review, however, concluded that no protest took place before the attack. Rice has said she was relying on talking points drawn up by U.S. intelligence officials.

(Additional reporting by Paul Eckert and Andrew Quinn.; Editing by Christopher Wilson)

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Leak reveals Polaroid’s Android-powered camera with interchangeable lenses

Samsung’s (005930) Galaxy Camera and Nikon’s (NINOY) Coolpix S800c are just the beginning of a swath of Android-powered cameras. Newly leaked images and specs point to Polaroid reviving its camera business with what could be the world’s first Android camera with interchangeable lenses. With no official name yet, the tentatively named IM1836 camera will reportedly feature a 18.1-megapixel sensor, 3.5-inch touchscreen, pop-up flash, Wi-Fi, HDMI and Android 4.0.

[More from BGR: A guide to all the insane predictions made by Google’s new engineering director]

The Galaxy Camera and Coolpix S800c do a fine job taking pictures that are considerably better than what you get from a smartphone, but they still can’t match a mirrorless camera with a good lens. At first glance, Polaroid’s camera looks to be a rebadged Nikon 1 J2, but the resemblance only runs skin deep, as PhotoRumors reports the camera only takes MicroSD cards.

[More from BGR: How not to fix Apple Maps]

Polaroid might not be a major player, but as more companies start incorporating Android into their cameras, there’s going to be a shift in the features consumers expect from them. In the next few years, novelty features such as Wi-Fi, cellular data and photo editing apps will be the norm and we’ll laugh at how we ever lived without them.

This article was originally published by BGR

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The Voice Crowns a Winner!

TV Watch

By Julia Haskins

12/18/2012 at 11:20 PM EST

From left: Terry McDermott, Cassadee Pope, Nicholas David and host Carson Daly

Tyler Golden/NBC

The Voice has a new winner!

After several powerful performances the night before, the top three singers – Nicholas David (of Team Cee Lo) and Terry McDermott and Cassadee Pope (of Blake Shelton's team) – faced the music on Tuesday during the final results show of season 3.

Which one was the winner? Keep reading to find out ...

Cassadee Pope was named the winner of The Voice!

Pope thanked her fans who supported her throughout the competition. She was joined onstage by McDermott, who was the runner-up, and David, who came in third place.

It was a night of music as Rihanna, newly engaged Kelly Clarkson, Bruno Mars and the Killers celebrated with the finalists by displaying their talents.

Season 4 of The Voice premieres March 25, 2013, with Shakira and Usher stepping in to take over for Christina Aguilera and Cee Lo Green.

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Experts: No link between Asperger's, violence

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

__

AP Writer Matt Apuzzo contributed to this report.

___

Online:

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

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Asian shares inch higher on "fiscal cliff" hopes

TOKYO (Reuters) - Asian shares crept higher on Tuesday, tracking the overnight gains in U.S. stocks, as fresh signs of compromise maintained a new optimism that the U.S. "fiscal cliff" budget tussle could be settled before tax hikes and spending cuts begin to bite early next year.

Oil and copper also firmed on the prospect of progress in the U.S. budget talks, but expectations of more monetary easing in Japan kept the yen soft.

President Barack Obama is seeking higher tax revenues which include increased rates on the wealthy while he is willing to cut some spending by changing the way cost of living adjustments are made to Social Security retirement benefits and other programs.

Obama's offer shows his willingness to give way on an item that some of his supporters had sought to protect, and may help advance negotiations with top Republican John Boehner to avert the fiscal cliff before the end-year deadline.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.2 percent, following a rise in global shares on Monday. The index snapped an eight-day winning streak on Monday as investors took profits from last week's rally.

Fears over the U.S. fiscal crisis have dragged on many markets, but regional equities took direction from local factors.

Australian shares <.axjo> led Asia's outperformers with a 0.7 percent gain, lifted by a rise in iron ore prices <.io62-cni> to a five-month high.

"Iron ore is a very key commodity in the Chinese industrial machine, steel usage will bounce back and that is good news for our exporters," said Baillieu Holst director Richard Morrow.

Seoul shares <.ks11> rose marginally but underperformed others in Asia, as investors were reluctant to build positions ahead of South Korea's presidential vote on Wednesday.

In Japan, the Nikkei average <.n225> surged 1.1 percent to an 8-1/2-month high and edged closer to the key 10,000-mark, with sentiment bolstered by a landslide election win for the conservative Liberal Democratic Party on Sunday. <.t/>

LDP leader Shinzo Abe, who is due to be confirmed as Japan's next premier on December 26, is calling for far more aggressive monetary stimulus and huge public works spending to rescue Japan out of decades-long deflation, pledges which are seen pressuring the yen and supporting Japanese stocks by improving earnings for Japanese exporters.

"The Nikkei is up today primarily due to the rise in U.S. stocks overnight, but the 'Abe-effect' is surprisingly longer-lasting as investors seem to be postponing the timing of unwinding their positions until they see the details and specifics in policies," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

YEN REMAINs PRESSURED

The dollar inched up 0.1 percent to 83.95 yen, off a 20-month high of 84.48 yen hit on Monday but well above its late New York levels on Friday.

Abe applied fresh pressure on the Bank of Japan on Monday, saying that the election result reflected strong public support for his views, which he hoped the BOJ would take into account at its two-day policy meeting starting on Wednesday.

"The dollar has more upside against the yen ahead of the BOJ's meeting, with expectations for some additional easing steps being strengthened after Abe's comments yesterday," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"The corrective fall in the dollar/yen after the election was small and it's crawling up because the yen weakening trend is still intact. But after the BOJ meeting, there will likely be pre-holiday profit-taking, pushing the dollar/yen down by 1 to 2 yen," he said, adding that the dollar could temporarily touch 85 yen before profit-taking sets in by the end of the year.

The benchmark 10-year Japanese government bond yield hit a one-month high of 0.750 percent on concerns that big-scale fiscal stimulus could seriously increase the country's debt burden.

U.S. Treasury yields also inched up in Asia, with the 10-year yields briefly reaching 1.796 percent, its highest level since October 26, on hopes for a deal on the U.S. fiscal cliff.

London copper was up 0.2 percent to $8,078.50 a metric ton (1.1023 tons).

U.S. crude rose 0.4 percent to $87.57 a barrel and Brent added 0.5 percent to $108.18.

(Additional reporting by Victoria Thieberger in Melbourne; Editing by Eric Meijer)

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Syrian rebels take control of Damascus Palestinian camp

BEIRUT (Reuters) - Syrian rebels took full control of the Yarmouk Palestinian refugee camp on Monday after fighting raged for days in the district on the southern edge of President Bashar al-Assad's Damascus powerbase, rebel and Palestinian sources said.

The battle had pitted rebels, backed by some Palestinians, against Palestinian fighters of the pro-Assad Popular Front for the Liberation of Palestine-General Command (PFLP-GC). Many PFLP-GC fighters defected to the rebel side and their leader Ahmed Jibril left the camp two days ago, rebel sources said.

"All of the camp is under the control of the (rebel) Free Syrian Army," said a Palestinian activist in Yarmouk. He said clashes had stopped and the remaining PFLP fighters retreated to join Assad's forces massed on the northern edge of the camp.

The battle in Yarmouk is one of a series of conflicts on the southern fringes of Assad's capital, as rebels try to choke the power of the 47-year-old leader after a 21-month-old uprising in which 40,000 people have been killed.

Government forces have used jets and artillery to try to dislodge the fighters but the violence has crept into the heart of the city and activists say rebels overran three army stations in a new offensive in the central province of Hama on Monday.

On the border with Lebanon, hundreds of Palestinian families fled across the frontier following the weekend violence in Yarmouk, a Reuters witness said.

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

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

"NEITHER SIDE CAN WIN"

Syrian Vice President Farouq al-Sharaa said in a newspaper interview published on Monday that neither Assad's forces nor rebels seeking to overthrow him can win the war.

Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely been seen since the revolt erupted in March 2011 and is not part of the president's inner circle directing the fight against Sunni rebels. But he is the most prominent figure to say in public that Assad will not win.

Sharaa said the situation in Syria was deteriorating and a "historic settlement" was needed to end the conflict, involving regional powers and the U.N. Security Council and the formation of a national unity government "with broad powers".

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

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

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

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

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

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

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

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

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

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

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

(Additional reporting by Oliver Holmes, Erika Solomon and Dominic Evans in Beirut, Afif Diab at Masnaa, Lebanon; editing by Philippa Fletcher)

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