Algerian army raid kills 34 hostages

AN Algerian air strike has killed 34 hostages, some of them Westerners, and 15 of their Islamist kidnappers at a desert gas field, a spokesman for the kidnappers has been quoted as saying.

"Thirty-four hostages and 15 kidnappers were killed in an (air) raid by the Algerian army," the spokesman told the ANI news agency in remarks that have not been independently confirmed.

The source said Westerners were among the dead, but did not elaborate.

Also killed was Abu al-Baraa, who led the operation in which 41 foreigners and scores of Algerians were seized.

The spokesman said Algerian aircraft attacked the kidnappers when they tried to "transport some of the hostages in vehicles to a location to the south".

The militants said they seized the hostages, who are known to include US, French, British, Irish, Norwegian and Japanese citizens, in retaliation for the French military intervention in northern Mali.

Algerian media reported that 15 foreigners and 30 Algerians being held hostage had managed to escape, but authorities could not confirm this.

Algerian troops encircled the plant on Thursday, prompting gunmen to demand their withdrawal to allow for negotiations.

They have also demanded the release of some 100 Islamist extremists in Algeria, and want them sent to northern Mali, where French and Malian troops were battling extremists who seized a massive swathe of territory in April 2012.

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Man chases girls on NSW south coast

POLICE are searching for a man who chased two young girls on the NSW south coast.

Two 11-year-old girls were riding their bikes at Sanctuary Point about 1.30pm (AEDT) on Wednesday when they noticed a blue car with tinted windows, police said.

A man who got out of the car approached the girls and started chasing them when they pedalled away.

The girls rode to the nearest house and sought refuge with the home-owner.

The man was last seen getting into the front passenger's seat of the hatchback before it drove off south along Paradise Beach Road.

He is described as having a dark complexion and bald head.

At the time, he was wearing a light brown short sleeve shirt, white shorts and skateboarder-style shoes.

He was also carrying a bum bag over one shoulder.

Anyone with information is asked to contact Crime Stoppers on 1800 333 000.

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US stocks open higher as banks fall

US stocks have opened higher but bank shares are lower following Bank of America's quarterly earnings report, which came in close to expectations.

Five minutes into trade on Thursday, the Dow Jones Industrial Average was up 41.31 points, or 0.30 per cent, at 13,552.54.

The broad-based S&P 500 gained 5.51 points, or 0.37 per cent, to 1,478.14.

The tech-heavy Nasdaq Composite rose 14.43 points, or 0.46 per cent, to 3,131.97.

Bank of America shares were down 1.9 per cent after the company reported fourth-quarter earnings that were sharply lower than the year-ago period, heavily dented by write-offs related to settlements related to its mortgage business.

Citigroup fell 3.0 per cent on its earnings disappointment, also hit by mortgage business charges.

Boeing shares lost another 1.3 per cent after its 787 was grounded around the world for safety inspections.

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US housing starts rebound in December

CONSTRUCTION of new US homes rebounded in December, the Commerce Department says, capping a year of strong recovery in the industry.

Housing starts grew to an annual pace of 954,000 units last month, rebounding from November's 851,000, which was depressed by the impact of Hurricane Sandy on the densely populated northeastern coastal region.

The annual pace has picked up from 754,000 units at mid-year 2012 and 697,000 units in December 2011.

The actual number of homes started in 2012 was estimated by the department at 780,000, a sharp 28.1 per cent higher than 2011, showing a sustained recovery in the housing sector after the 2008-2009 recession.

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US jobless claims drop to five-year low

NEW US jobless claims dropped last week to the lowest level in five years as the ailing jobs market slowly improves, official data shows.

Initial claims for unemployment insurance benefits totalled 335,000 in the week ending January 12, down a hefty 37,000, or almost 10 per cent, from the prior week's revised level, the Labor Department reported on Thursday.

The often volatile weekly claims report was lower than the 370,000 analysts expected.

Last week's four-week moving claims average fell to 359,250 from the prior week's 366,000.

Claims, a sign of the pace of layoffs, trended in the 370,000 range for most of 2012.

Marisa Di Natale of Moody's Analytics noted claims were at their lowest level since early January 2008 and fell for the first time in six weeks.

"Over the past few weeks the claims data have been difficult to interpret because of holiday-related volatility," she said.

"Nevertheless, claims are down 27,000 between the December and January payroll survey reference periods which indicates a modest improvement in job growth over the month."

The unemployment rate held steady at 7.8 per cent in December, a four-year low, and job growth last year jumped by 1.4 per cent, the biggest increase in six years.

The January jobs report is scheduled on February 1.

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Vic residents told to leave bushfire zone

RESIDENTS in the east Victorian town of Licola are being told to consider leaving their homes as a fast moving bushfire fanned by changing wind directions threatens the community.

The fire in the eastern part of the Baw Baw National Park had grown from 250 hectares on Thursday afternoon to 4200 hectares that night.

Watch-and-act alerts are advising residents in several surrounding towns to activate their bushfire plans ahead of a wind change expected in the early hours of Friday.

A CFA spokeswoman said strong winds had helped fan the fire, making it fast moving and unpredictable.

Smoke could be seen 50km away, she said.

Residents of Licola have received emergency SMS alerts and are being told to consider leaving the area as soon as possible as the CFA anticipates the blaze will hit Licola Road on Friday.

The CFA warning says the out-of-control fire is expected to impact the towns of Coongulla, Coopers Creek, Cowwarr, Glengarry, Glenmaggie, Heyfield, Licola, Parkers Corner, Seaton, Toongabbie, Glengarry North, Erica and Rawson between 6am (AEDT) and 10am on Friday.

Residents of Maiden Town, Walhalla and Mormon Town are being warned they could be affected by embers from the blaze.

An emergency relief centre has been established at the Sale Baptist Church.

Bureau of Meteorology senior forecaster James Taylor said hot weather overnight combined with gale force winds forecast to hit the region on Friday morning were concerning.

A total fire ban has been declared for the West and South Gippsland, north east, northern country and East Gippsland districts for Friday.

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Canberra community remembers 2003 fires

A DECADE on from the fatal Canberra firestorm, the community will gather for a low key commemoration service.

On January 18, 2003 a bushfire killed four people and destroyed more than 500 homes on the city's western edge.

In the shadow of the bushfires now burning at Cooma and Yass, the people of Canberra will come together on Friday to remember that disaster.

The commemoration will have the theme of Reflection, Inspiration, and Looking Forward.

It will involve speakers from the community, churches and emergency services as well as ACT Chief Minister Katy Gallagher.

ACT Emergency Services Minister Simon Corbell, who lives in the area affected by the fire, says he thinks people's recovery from 2003 has been mixed.

"Many people have very much responded to the confronting nature of the circumstances they faced ... in 2003," he told AAP.

"But for others the impact and the harm caused is still very real and very raw in their emotions."

But he thought the community overall had shown "extraordinary resilience and capacity to grow".

Mr Corbell said the ACT was much better prepared now to deal with "the ever-present threat" of bushfires.

The commemoration service will take place at 10am AEDT at the ACT Bushfire Memorial on the corner of Uriarra and Cotter Roads in Weston.

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NRA head defends using Obama girls in ad

THE head of the powerful National Rifle Association has defended his group's mention of President Barack Obama's daughters in a web ad criticising the administration's moves on gun control.

"Our point is not about the president's kids. It's about everybody else's kids," said NRA president David Keene, speaking to CBS television.

"We think that one of the most important things we can do is provide security to the children of America and we don't think that's an inappropriate message."

The ad, released by the NRA on Tuesday, has been roundly criticised for breaking a cardinal rule in Washington - that the children of a sitting US president are off-limits for criticism or as a political talking point.

The NRA released the ad one day before Obama signed 23 executive actions in a bid to check a rash of gun violence including the killings of 20 children at Sandy Hook Elementary School last month and other recent mass shootings.

The NRA spot asked why Obama is "sceptical about putting armed security in schools when his kids are protected by armed guards at their school?"

Like the children of earlier presidents, the Obama girls - Malia, 14, and Sasha, 11 - receive the protection of armed Secret Service officers wherever they go, including their private Washington, DC school.

The NRA ad slammed the duplicity of "protection for their kids, and gun-free zones for ours".

"Are the president's kids more important than yours?" the NRA's narrator asked in a deep voice.

In a December interview, Obama said he was "sceptical" that an NRA proposal of placing armed security guards at schools around the country was the sole answer to curbing mass shootings.

White House spokesman Jay Carney released a statement on Wednesday responding to the ad shortly before Obama outlined his new gun proposals.

"Most Americans agree that a president's children should not be used as pawns in a political fight," Carney said in a statement emailed to reporters.

"But to go so far as to make the safety of the president's children the subject of an attack ad is repugnant and cowardly."

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