U.S. seeks funds for Middle East peace plan but details are vague and Palestinians unhappy

Palestinians burn a picture of U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, and representations of Israeli flags during a protest against Bahrain's workshop for U.S. Middle East peace plan, in Gaza City, June 25, 2019. REUTERS/Mohammed Salem

By Matt Spetalnick

MANAMA (Reuters) – The Trump administration prepared to launch its $50 billion economic formula for Israeli-Palestinian peace in Bahrain on Tuesday but the Palestinian leadership reiterated its disdain for the plan and Saudi Arabia, envisaged as one of its main bank-rollers, also indicated some reservations.

Bahraini armoured vehicle takes up position on bridge leading to Manama’s Four Seasons hotel for first day of U.S.-hosted “Peace to Prosperity” conference, in Manama, Bahrain, June 25, 2019. REUTERS/Matt Spetalnick

Bahraini armoured vehicle takes up position on bridge leading to Manama’s Four Seasons hotel for first day of U.S.-hosted “Peace to Prosperity” conference, in Manama, Bahrain, June 25, 2019. REUTERS/Matt Spetalnick

The two-day international meeting, led by Trump’s son-in-law and senior advisor Jared Kushner, has been billed as the first part of Washington’s broader political blueprint to resolve the Israeli-Palestinian conflict.

But the political details of the plan, which has been almost two years in the making, remain a secret. Neither the Israeli nor Palestinian governments will attend the curtain-raising event in Manama, which Lebanon and Iraq are staying away from.

Palestinian President Mahmoud Abbas, whose Palestinian Authority exercises limited self-rule in the Israeli-occupied West Bank, was scathing about its prospects of success.

“Money is important. The economy is important. But politics are more important. The political solution is more important.”

Washington will be hoping that attendees in Manama such as wealthy Gulf states will show a concrete interest in the plan, which expects donor nations and investors to contribute $50 billion to Palestinian territories, Jordan, Egypt and Lebanon.

Saudi Arabia – a close U.S. ally which shares a common foe with Israel in Iran – voiced support on Tuesday for “international efforts aimed at improving prosperity, investment and economic growth in the region”.

But Riyadh reiterated that any peace deal should be based on the Saudi-led Arab peace initiative that has been the Arab consensus on the necessary elements for a deal since 2002.

That plan calls for a Palestinian state drawn along borders which predate Israel’s capture of territory in the 1967 Middle East war, as well as a capital in East Jerusalem and refugees’ right of return – points rejected by Israel.

Kushner said the plan would not adhere to the Arab initiative. “It will be somewhere between the Arab Peace Initiative and between the Israeli position,” he told Al Jazeera TV in an interview to air on Tuesday.

Chief Palestinian negotiator Saeb Erekat said Kushner is “committed to the initiatives of Israel’s colonial settlement councils.”

Israeli Prime Minister Benjamin Netanyahu, a close Trump ally, said Israel was open to the plan. “We’ll hear the American proposition, hear it fairly and with openness,” he said on Sunday.

White House senior adviser Jared Kushner and Treasury Secretary Steven Mnuchin arrive at Manama's Four Seasons hotel, the venue for the U.S.-hosted "Peace to Prosperity" conference, in Manama, Bahrain, June 25, 2019. REUTERS/Matt Spetalnick

White House senior adviser Jared Kushner and Treasury Secretary Steven Mnuchin arrive at Manama’s Four Seasons hotel, the venue for the U.S.-hosted “Peace to Prosperity” conference, in Manama, Bahrain, June 25, 2019. REUTERS/Matt Spetalnick

Expectations for success are low. The Trump team concedes the economic plan – billed “Peace to Prosperity” – will be implemented only if a political solution to one of the world’s most intractable conflicts is reached.

Jordan and Egypt, the only Arab states to have reached peace with Israel, are sending deputy finance ministers. Kushner’s plan has hit a political nerve in Jordan, home to millions of citizens of Palestinian refugee origin.

Saudi Arabia and the United Arab Emirates want to move on from a Palestinian conflict they believe has held back the Arab world. Other Gulf states such as Kuwait, Qatar and Oman have not said who they are sending to the conference.

“If there is a one percent chance we do something good here, we should get together and try,” billionaire Mohamed Alabbar, one of Dubai’s most prominent businessmen, said after arriving at the venue in Manama and embracing two American rabbis.

POLITICAL PLAN?

It is not clear whether the Trump team plans to abandon the “two-state solution,” which involves creation of an independent Palestinian state living side by side with Israel.

The United Nations and most nations back the two-state solution and it has underpinned every peace plan for decades.

But Trump’s team has consistently refused to commit to it, keeping the political stage of the plan a secret.

U.N. Secretary-General Antonio Guterres urged the pursuit of “peace efforts to realize the vision of two States, Israel and Palestine, living side by side in peace and security”.

Any such solution would have to settle long-standing issues such as the status of Jerusalem, mutually agreed borders, satisfying Israel’s security concerns and Palestinian demands for statehood, and the fate of Israel’s settlements and military presence in territory in Palestinians want to build that state.

In Gaza, businesses closed doors in a general strike called by the ruling Islamist Hamas group and other factions.

In the West Bank on the outskirts of Ramallah, where a small crowd of protesters was dispersed by Israeli troops firing tear gas, Palestinian lawmaker Mustafa Barghouti said: “There can be no economic solution as a substitute for our freedom.”

The workshop is being held in Bahrain, home of the U.S. Navy’s Fifth Fleet, at a time of heightened tension between Tehran and Washington and its Gulf allies. Trump on Monday imposed sanctions on Iran’s Supreme Leader and other officials after Iran downed an U.S. drone last week.

Palestinian leaders have boycotted the conference, and are refusing to engage with the White House – accusing it of pro-Israel bias. Breaking with international convention, Trump in 2017 recognized disputed Jerusalem as Israel’s capital – a move that infuriated the Palestinians and other Arabs.

Seven Palestinian businessmen gathered in the lobby of the Four Seasons hotel, the conference venue. They estimated that 15 to 20 Palestinian business representatives would be present.

“The politicians will not bring us anywhere,” said conference attendee Shlomi Fogel, an Israeli entrepreneur. “We, the business people, should be able to show them there might be another way.”

(Reporting by Matt Spetalnick and Stephen Farrell; Additional reporting by Nidal al-Mughrabi in Gaza and Rami Ayyub in Ramallah; Writing by Ghaida Ghantous; Editing by Angus MacSwan)

After devastating flooding, U.S. Midwest farms need more than ‘paper towels’ to recover

A combination of aerial photos show the farm of Richard Oswald near Langdon, Missouri after flooding March 20, 2019 and in the fall of 2018 at right. Courtesy of Richard Oswald/Handout via REUTERS.

By Andrew Hay

(Reuters) – Missouri farmer Richard Oswald needs a lot of help to recover from flooding that left his home and farm looking like a manmade island in an inland sea.

Relief groups are giving tetanus shots and handing out free meals and cleaning supplies near his farm in the Langdon-Rock Port area, about 100 miles (161 km) northwest of Kansas City. But what Oswald really needs is money.

Hit by the worst flooding in living memory, he and thousands of other farmers along the Missouri River will each require hundreds of thousands of dollars in disaster funds or loans to start over.

“The typical response on flood relief is groups like the Red Cross show up with paper towels and rubber gloves and scrub buckets,” said Oswald, 69, who does not expect to be able to get to his home or land for weeks. “The biggest thing farmers need is cash, or ways to access funds.”

‘BOUNCE BACK’

Slammed by a trade war and low commodity prices, Midwest family farms have been in the red and in decline for the last five years. The number of U.S farms fell by 100,000 between 2010 and 2017, according to U.S. Department of Agriculture (USDA) data.

Thousands more will now go under without emergency financial support for flooding, pummeling heartland economies almost entirely dependent on agriculture, farmers and aid groups said.

It is a call federal and state agencies, as well as non-governmental and faith-based relief groups are answering.

President Donald Trump has approved disaster declarations for Nebraska and Iowa, making federal disaster funding available in flood-hit areas. Missouri Governor Mike Parson declared a state of emergency, paving the way for similar actions in his state.

“I know we aim for bringing everything back up to where it was,” said Rosalynn Days-Austin, a USDA emergency coordinator helping direct Federal Emergency Management Agency (FEMA) efforts in flood-affected areas. “Sometimes that’s not always possible, for a variety of reasons, but the goal is definitely to help them bounce back from their loss.”

CASH PREFERRED

Relief groups like Farm Aid are tending to the immediate needs of farmers, distributing tens of thousands of dollars in “emergency grants” – $500 gifts from cash donations that help families pay for things like groceries. After that, the group and its partners advise farming families on how to access federal disaster funds they hope are coming soon.

“What we’re hearing, because of the snowpack and rain and the wet ground, is that farmers are going to be dealing with this throughout the spring. So we’re in it for the long haul,” said Jennifer Fahy, a spokeswoman for the group established by country singer and activist Willie Nelson.

The Evangelical Lutheran Church in America (ELCA) is coordinating a long-term response to get displaced families housed, navigate the red tape of insurance companies and federal agencies and tend to the mental health needs of people who have suffered extreme trauma, said Bishop Brian Maas.

“We have national partners and coalitions within the state,” said Maas, who is asking people to hold off donating more material goods, for now. “There will be stresses because we’ve not done anything of this magnitude.

“Now we have mountains of cleaning supplies and so forth that can’t be used,” Maas said, appealing to people to get back in touch in a month to see how they can donate then. “Cash is the most flexible way to respond.”

‘FEMA IS WORTHLESS’

Another immediate need is feed for livestock.

Relief organization Farm Rescue is collecting donations of hay in the Dakotas and trucking it to farmers whose cattle are starving after their feed stands were submerged in floodwater.

“I don’t know of anything this widespread that has ever affected so many people in our service area,” said Dan Erdmann, a spokesman for the group which helps family farms get through crises ranging from natural disasters to medical emergencies.

Farmworkers, some of them undocumented and legal migrants, have been hit hard. Lutheran Family Services of Nebraska is looking at housing assistance for displaced people who previously paid around $300 a month rent and now face rents triple that due to a dearth in properties, said Stacy Martin, chief executive of the social services charity.

While relief groups tend to urgent needs, farmers like Scott Olson say more federal relief money is needed at a time when low crop prices and high debt levels are limiting farmers’ access to credit. He is counting on a farm relief bill in Congress for extra disaster compensation after he successfully lobbied in Washington for similar funds following 2011 flooding.

“Flood insurance isn’t going to cover this worth a darn. FEMA is worthless,” said Olson, who farms 3,000 acres near Tekamah, Nebraska and runs a farm equipment business. “They don’t have any money, nobody has any money.”

(Reporting by Andrew Hay in New Mexico; Additional reporting by Tom Polansek in Chicago; editing by Bill Tarrant and Lisa Shumaker)

‘It’s not about the Benjamins,’ Netanyahu says of U.S. support for Israel

FILE PHOTO: U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu shake hands as Netanyahu departs the White House in Washington, March 25, 2019. REUTERS/Leah Millis/File Photo

TEL AVIV (Reuters) – Israeli Prime Minister Benjamin Netanyahu said “it’s not about the Benjamins” as he hit back on Tuesday against any suggestion that U.S. politicians are paid to support Israel.

A tweet in February by Democratic Representative Ilhan Omar, a freshman legislator from Minnesota, was widely seen as echoing an anti-Semitic slur that Jews influence governments through money.

“It’s all about the Benjamins baby,” Omar wrote, using a slang term for $100 bills. She subsequently apologized, saying she was grateful for “Jewish allies and colleagues who are educating me on the painful history” of anti-Semitic epithets.

Netanyahu, addressing a Washington convention of the pro-Israel lobby group AIPAC, said via satellite from Tel Aviv: “Some people will just never get it. They’ll never understand why the vast majority of Americans – Jews and non-Jews alike – support Israel.”

He did not mention Omar by name.

“Take it from this Benjamin: it’s not about the Benjamins,” Netanyahu said. “The reason the people of America support Israel is not because they want our money, it’s because they share our values.”

Netanyahu had been due to address AIPAC in person, but he returned to Israel on Tuesday, two days ahead of schedule, after a rocket attack from Gaza wounded seven people in a village north of Tel Aviv.

(Writing by Jeffrey Heller; Editing by Mark Heinrich)

Drought drives desperate Afghans to marry off children for money – U.N

An internally displaced Afghan girl stands outside her tent at a refugee camp in Herat province, Afghanistan October 14, 2018. Picture taken October 14, 2018. REUTERS/Mohammad Ismail - RC1633CE5420

By Jared Ferrie

PHNOM PENH (Thomson Reuters Foundation) – Afghanistan’s worst drought in decades has driven tens of thousands of people from their homes and is pushing families to marry off their children in exchange for dowries in order to survive, the United Nations said on Tuesday.

About 223,000 people have been uprooted from their homes in the drought-hit western provinces of Herat, Badghis and Ghor this year, according to the U.N. children’s agency (UNICEF).

The U.N. Food and Agriculture Organization (FAO) said Afghan families have been skipping meals, selling off livestock and moving to cities where it is easier to access aid and services.

Some displaced families are taking even more drastic measures, according to UNICEF, which documented 161 child betrothals or marriages in Herat and Badghis between July and October. Of those, 155 were girls and six were boys.

“The drought is the worst in decades,” UNICEF spokeswoman Alison Parker told the Thomson Reuters Foundation.

“Children are becoming the collateral.”

Families receive a bride price that can ease their financial woes, having lost their livelihoods and assets, said Parker.

Many drought-hit families have had to borrow money to pay for transport, food or healthcare, the United Nations said.

The charity World Vision reported that half of households it surveyed in Badghis in September said child marriage was a measure taken to put food on the table in times of drought.

About 11 million people – almost half of Afghanistan’s rural population – will be facing “severe acute food insecurity” until February, according to the Integrated Food Security Phase Classification (IPC) system used by charities to measure hunger.

“Years of civil conflict and instability, as well as the severely degraded condition of much of the land, have compounded the impacts of the drought,” said an IPC report from August.

In addition to those forced by drought to leave their homes, conflict between the government and an array of armed groups, including the Taliban, has uprooted at least 282,000 people so far this year, according to the United Nations.

The 17-year war has also devastated Afghanistan’s education system, according to a report released on Tuesday by the Global Coalition to Protect Education from Attack, an alliance of aid agencies that includes UNICEF and Save the Children.

With a rising number of attacks on schools, teachers and students, the number of children who are not in education is increasing for the first time since 2002, the agencies said.

(Reporting by Jared Ferrie @jaredferrie; Editing Kieran Guilbert. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s and LGBT+ rights, human trafficking, property rights, and climate change. Visit http://news.trust.org)

HSBC discloses customer accounts hacked at its U.S. bank

FILE PHOTO: The HSBC logo is seen on a top roof of the main branch in Beirut, Lebanon July 25, 2016. REUTERS/ Aziz Taher/File Photo

LONDON (Reuters) – Hackers breached some HSBC & HSBA. customers’ accounts in the United States in October and accessed their information, the bank said in a regulatory filing on Tuesday.

It was not immediately clear how many accounts were breached or whether any money was stolen.

“HSBC regrets this incident, and we take our responsibility for protecting our customers very seriously.” an HSBC spokeswoman said. “We have notified customers whose accounts may have experienced unauthorized access and offered them one year of credit monitoring and identify theft protection service.”

(Reporting by Lawrence White; Editing by David Goodman)

After Syria fall-out, Hamas ties with Iran restored: Hamas chief

Hamas Chief Ismail Haniyeh (R) and Hamas Gaza leader Yehya Al-Sinwar (L) attend a news conference as the wife of slain senior Hamas militant Mazen Fuqaha gestures, in Gaza City May 11, 2017.

By Nidal al-Mughrabi

GAZA (Reuters) – Hamas and Iran have patched up relations, the Palestinian militant group’s new leader in Gaza said on Monday, and Tehran is again its biggest backer after years of tension over the civil war in Syria.

“Relations with Iran are excellent and Iran is the largest supporter of the Izz el-Deen al-Qassam Brigades with money and arms,” Yehya al-Sinwar, referring to Hamas’s armed wing, told reporters.

Neither Hamas nor Iran have disclosed the full scale of Tehran’s backing. But regional diplomats have said Iran’s financial aid for the Islamist movement was dramatically reduced in recent years and directed to the Qassam Brigades rather than to Hamas’s political institutions.

Hamas angered Iran by refusing to support Iran’s ally Syrian President Bashar al-Assad in the six-year-old civil war.

“The relationship today is developing and returning to what it was in the old days,” Sinwar, who was elected in February, said in his first briefing session with reporters.

“This will be reflected in the resistance (against Israel) and in (Hamas’s) agenda to achieve the liberation,” he said.

Hamas seeks Israel’s destruction. It has fought three wars with Israel since seizing the Gaza Strip from forces loyal to Western-backed Palestinian President Mahmoud Abbas in 2007.

Sinwar, a former Hamas security chief who had spent 20 years in Israeli jails, said the group is always preparing for a possible war with Israel. But he said such a conflict was not in Hamas’s strategic interests at the moment.

“We are not interested in a war, we do not want war and we want to push it backward as much as we could so that our people will relax and take their breath and in the same time we are building our power,” he said. “We do not fear war and we are fully ready for it.”

Hamas and Abbas’s Palestinian Authority (PA), which exercises limited self-rule in the Israeli-occupied West Bank, are locked in political dispute over the issue of Palestinian unity.

Abbas’s slashing of PA funding for Israeli-supplied electricity to Gaza has led to prolonged daily blackouts in the coastal enclave.

Sinwar, in his remarks, invited Abbas’s Fatah movement for talks on forming a new national unity government to administer both the Gaza Strip and the West Bank.

There was no immediate response from PA officials. Abbas has called on Hamas to first relinqish control of Gaza before he removes economic sanctions and to prepare for the formation of a new unity government that will be tasked with holding presidential and parliament elections.

 

 

 

 

(Editing by Jeffrey Heller and Richard Balmforth)

 

North Korea hacking increasingly focused on making money more than espionage: South Korea study

A projection of cyber code on a hooded man is pictured in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

By Christine Kim

SEOUL (Reuters) – North Korea is behind an increasingly orchestrated effort at hacking into computers of financial institutions in South Korea and around the world to steal cash for the impoverished country, a South Korean state-backed agency said in a report.

In the past, suspected hacking attempts by North Korea appeared intended to cause social disruption or steal classified military or government data, but the focus seems to have shifted in recent years to raising foreign currency, the South’s Financial Security Institute (FSI) said.

The isolated regime is suspected to be behind a hacking group called Lazarus, which global cybersecurity firms have linked to last year’s $81 million cyber heist at the Bangladesh central bank and the 2014 attack on Sony’s Hollywood studio.

The U.S. government has blamed North Korea for the Sony hack and some U.S. officials have said prosecutors are building a case against Pyongyang in the Bangladesh Bank theft.

In April, Russian cybersecurity firm Kaspersky Lab also identified a hacking group called Bluenoroff, a spin off of Lazarus, as focused on attacking mostly foreign financial institutions.

The new report, which analyzed suspected cyber attacks between 2015 and 2017 on South Korean government and commercial institutions, identified another Lazarus spinoff named Andariel.

“Bluenoroff and Andariel share their common root, but they have different targets and motives,” the report said. “Andariel focuses on attacking South Korean businesses and government agencies using methods tailored for the country.”

Pyongyang has been stepping up its online hacking capabilities as one way of earning hard currency under the chokehold of international sanctions imposed to stop the development of its nuclear weapons program.

Cyber security researchers have also said they have found technical evidence that could link North Korea with the global WannaCry “ransomware” cyber attack that infected more than 300,000 computers in 150 countries in May.

“We’ve seen an increasing trend of North Korea using its cyber espionage capabilities for financial gain. With the pressure from sanctions and the price growth in cryptocurrencies like Bitcoin and Ethereum – these exchanges likely present an attractive target,” said Luke McNamara, senior analyst at FireEye, a cybersecurity company.

North Korea has routinely denied involvement in cyber attacks against other countries. The North Korean mission to the United Nations was not immediately available for comment.

ATM, ONLINE POKER

The report said the North Korean hacking group Andariel has been spotted attempting to steal bank card information by hacking into automated teller machines, and then using it to withdraw cash or sell the bank information on the black market. It also created malware to hack into online poker and other gambling sites and steal cash.

“South Korea prefers to use local ATM vendors and these attackers managed to analyze and compromise SK ATMs from at least two vendors earlier this year,” said Vitaly Kamluk, director of the APAC research center at Kaspersky.

“We believe this subgroup (Andariel) has been active since at least May 2016.”

The latest report lined up eight different hacking instances spotted within the South in the last few years, which North Korea was suspected to be behind, by tracking down the same code patterns within the malware used for the attacks.

One case spotted last September was an attack on the personal computer of South Korea’s defense minister as well as the ministry’s intranet to extract military operations intelligence.

North Korean hackers used IP addresses in Shenyang, China to access the defense ministry’s server, the report said.

Established in 2015, the FSI was launched by the South Korean government in order to boost information management and protection in the country’s financial sector following attacks on major South Korean banks in previous years.

The report said some of the content has not been proven fully and is not an official view of the government.

(Additional reporting by Jeremy Wagstaff in SINGAPORE; Editing by Soyoung Kim and Michael Perry)

Seattle employers cut hours after latest minimum wage rise, study finds

FILE PHOTO: Protest signs are pictured in SeaTac, Washington just before a march from SeaTac to Seattle aimed at the fast food industry and raising the federal minimum wage and Seattle's minimum wage to $15 an hour December 5, 2013. REUTERS/David Ryder/File Photo

By Alex Dobuzinskis

(Reuters) – A Seattle law that requires many businesses to pay a minimum wage of at least $13 an hour has left low-wage workers with less money in their pockets because some employers cut working hours, a study released on Monday said.

Low-wage workers on average now clock 9 percent fewer hours and earn $125 less each month than before the Pacific Northwest city set one of the highest minimum wages in the nation, the University of Washington research paper said.

Even so, overall employment at city restaurants, where a large percentage of low-wage earners work, held steady.

Seattle, which has a booming economy and a strong technology sector, is midway through an initiative to increase its minimum wage for all employers to $15 an hour. The city is at the forefront of a nationwide push by Democratic elected officials and organized labor in targeting $15 for all workers.

“Most people will tell you there is a level of minimum wage that is too high,” Jacob Vigdor, a professor of public policy at the University of Washington and director of the team studying the increase, said in a phone interview. “There is a sense that as you raise it too high, then you get to a point where employers will really start cutting back.”

Many companies reached that point after Seattle, a city of nearly 700,000 residents, raised the minimum to $13 an hour for large employers beginning Jan. 1, 2016, according to the study.

Seattle’s labor market held steady when the minimum rose to $11 from $9.47 on April 1, 2015, the university found in a study released last year.

“Raising the minimum wage helps ensure more people who live and work in Seattle can share in our city’s success, and helps fight income inequality,” Seattle Mayor Ed Murray said in a statement in response to the study, which the city commissioned.

The federal minimum wage has stayed at $7.25 an hour since 2009, and the Republican-controlled U.S. Congress has opposed an increase.

Critics of minimum wage increases say they lead to layoffs and force some companies out of business.

The latest research from the University of Washington found no major reduction in hours or jobs at Seattle restaurants, in keeping with a finding in a study conducted by University of California, Berkeley, that was released last week.

Lawmakers in California, the nation’s most populous state, voted last year to increase the minimum wage to $15 an hour by 2022. Elected officials in several states, including New York and Oregon, and large cities such as Chicago have in the last two years approved their own minimum pay hikes.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Leslie Adler)

Trump states Saudis not paying fair share for U.S. defense

U.S. President Donald Trump and Saudi Deputy Crown Prince and Minister of Defense Mohammed bin Salman enter the State Dining Room of the White House in Washington, U.S., March 14, 2017. REUTERS/Kevin Lamarque

By Stephen J. Adler, Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump complained on Thursday that U.S. ally Saudi Arabia was not treating the United States fairly and Washington was losing a “tremendous amount of money” defending the kingdom.

In an interview with Reuters, Trump confirmed his administration was in talks about possible visits to Saudi Arabia and Israel in the second half of May. He is due to make his first trip abroad as president for a May 25 NATO summit in Brussels and could add other stops.

“Frankly, Saudi Arabia has not treated us fairly, because we are losing a tremendous amount of money in defending Saudi Arabia,” he said.

Trump’s criticism of Riyadh was a return to his 2016 election campaign rhetoric when he accused the kingdom of not pulling its weight in paying for the U.S. security umbrella.

“Nobody’s going to mess with Saudi Arabia because we’re watching them,” Trump told a campaign rally in Wisconsin a year ago. “They’re not paying us a fair price. We’re losing our shirt.”

The United States is the main supplier for most Saudi military needs, from F-15 fighters to control and command systems worth tens of billions of dollars in recent years, while American contractors win major energy deals.

The world’s top oil exporter and its biggest consumer have enjoyed close economic ties for decades, with U.S. firms building much of the infrastructure of the modern Saudi state after its oil boom in the 1970s.

Saudi officials could not immediately be reached for comment on Trump’s latest comments.

But Foreign Minister Adel al-Jubeir rejected similar comments from Trump during his election campaign, telling CNN during a visit to Washington last July that the Islamic kingdom “carries its own weight” as an ally.

Saudi Arabia’s powerful deputy crown prince Mohammed bin Salman met with Trump last month in a meeting that was hailed by a senior Saudi adviser as a “historical turning point” in relations. The talks appeared to signal a meeting of minds on many issues, including their shared view that Iran posed a regional security threat.

Riyadh and other Gulf allies see in Trump a strong president who will shore up Washington’s role as their main strategic partner and help contain Riyadh’s adversary Iran in a region central to U.S. security and energy interests, regional analysts said.

ISLAMIC STATE “HUMILIATION”

Asked about the fight against Islamic State, which Saudi Arabia and other U.S. allies are confronting as a coalition, Trump said the militant group had to be defeated.

“I have to say, there is an end. And it has to be humiliation,” Trump said, when asked about what the endgame was for defeating Islamist violent extremism.

“There is an end. Otherwise it’s really tough. But there is an end,” without detailing a strategy.

A visit to Israel would reciprocate a White House visit in February by Israeli Prime Minister Benjamin Netanyahu. Palestinian President Mahmoud Abbas is due to meet Trump next Wednesday in Washington.

Trump has set a more positive tone with Israel than his Democratic predecessor, Barack Obama, who often clashed with the right-wing Israeli leader, and has raised concerns among Palestinians that their leaders may not get equal treatment.

Trump has also asked Israel to put unspecified limits on its building of Jewish settlements on land the Palestinians want for a state, and has promised to seek a Middle East peace deal that eluded his predecessors. However, he has offered no new diplomatic prescriptions.

“I want to see peace with Israel and the Palestinians,” he said. “There is no reason there’s not peace between Israel and the Palestinians – none whatsoever.”

Trump brushed aside a question of whether he might use a possible trip to Israel to declare U.S. recognition of the entire city of Jerusalem as Israel’s capital, a reversal of longstanding U.S. foreign policy likely to draw international condemnation.

“Ask me in a month on that,” he said, without elaborating.

If Trump ties an Israel visit to next month’s Brussels trip, it would be around the time Israelis are celebrating the 50th anniversary of the reunification of Jerusalem, when Israel captured Arab East Jerusalem in the 1967 Middle East war.

Successive U.S. administrations as well as the international community have not recognized Israel’s annexation of the eastern part of the city, and the future status of Jerusalem remains one of the thorniest issues in the Israeli-Palestinian dispute.

Israel claims all of Jerusalem, which contains sites sacred to the Jewish, Muslim and Christian faiths, as its capital. Palestinians want East Jerusalem as the capital of a future state of their own.

(Additional reporting by David Brunnstrom; Writing by Yara Bayoumy and Matt Spetalnick; Editing by Howard Goller)

Frugal U.S. consumers seen holding back first-quarter GDP

People shop at The Grove mall in Los Angeles November 26, 2013. REUTERS/Lucy Nicholson

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. economy likely hit a soft patch in the first quarter as an unseasonably warm winter and rising inflation weighed on consumer spending, in a potential setback to President Donald Trump’s promise to boost growth.

Reduced business investment in inventories and government spending cuts also crimped gross domestic product growth. A Reuters survey of economists conducted last week forecast GDP rising at a 1.2 percent annual rate, but many economists lowered their estimates after the government on Thursday released advance reports on the goods trade deficit and inventories in March.

The Atlanta Federal Reserve is forecasting the economy growing at only a 0.2 percent rate in the first quarter, which would be the weakest performance in three years.

The economy grew at a 2.1 percent pace in the fourth quarter. The government will publish its advance first-quarter GDP estimate on Friday at 8:30 a.m. The expected sluggish first-quarter growth pace, however, is not a true picture of the economy’s health.

The labor market is near full employment and consumer confidence is near multi-year highs, suggesting that the mostly weather-induced slowdown in consumer spending is probably temporary. First-quarter GDP tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to rectify.

“The weakness is not a reflection of the underlying health of the economy, part of it is residual seasonality,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “It has become more understood over the past few years, that’s why people often discount first-quarter GDP.”

Even without the seasonal quirk and temporary restraints, economists say it would be difficult for Trump to fulfill his pledge to raise annual GDP growth to 4 percent, without increases in productivity.

Trump is targeting infrastructure spending, tax cuts and deregulation to achieve his goal of faster economic growth.

On Wednesday, the Trump administration proposed a tax plan that includes cutting the corporate income tax rate to 15 percent from 35 percent, but offered no details.

ANEMIC CONSUMER SPENDING

Economists estimate that growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to below a 1.0 percent rate in the first quarter. That would be the slowest pace in nearly four years and follows the fourth quarter’s robust 3.5 percent growth rate.

The expected weakness in consumer spending is blamed on a mild winter, which undermined demand for heating and utilities production. Higher inflation, which saw the consumer price index averaging 2.5 percent in the first quarter, also hurt spending.

Government delays issuing income tax refunds to combat fraud also weighed on consumer spending. Economists said Federal Reserve officials were likely to view both the anemic consumer spending and GDP growth as temporary when they meet next week. The Fed is not expected to raise interest rates.

“The good news is that the Fed in recent years has distanced itself from the GDP numbers,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. “A weak first-quarter GDP print should not affect the policy debate.”

After contributing to GDP growth for two straight quarters, inventory investment was likely a drag in the first quarter. JPMorgan is forecasting inventories chopping off one percentage point from GDP growth. Trade was likely neutral after being a huge drag in the fourth quarter.

But some good news is expected. Business investment likely rose further, with spending on equipment seen accelerating thanks to rising gas and oil well drilling as oil prices continue their recovery from multi-year lows.

Investment in home building is also expected to have gained momentum in the first quarter.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)