Swiss say U.S. not in touch over Heinz insider trading case


ZURICH (Reuters) - Swiss authorities said on Monday they have not yet been asked to help a U.S. investigation into alleged insider trading in call options of H.J. Heinz Co the day before the company announced it would be sold, even though a Zurich account is at the heart of the matter.


U.S. securities regulators filed suit on Friday against as-yet-unidentified traders in Heinz options alleging they traded on inside information before the company made public the deal to be bought for $23 billion by an investor group made up of Warren Buffett's Berkshire Hathaway Inc and Brazil's 3G Capital Partners.


The U.S. Securities and Exchange Commission said in a statement on Friday it had obtained "an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that was used to reap more than $1.7 million from trading in advance of yesterday's public announcement about the acquisition of H.J. Heinz Company."


The order from the U.S. District Court for the Southern District of New York freezes the traders' assets and prohibits them from destroying any evidence, the SEC statement said.


SEC spokesman John Nester said on Monday that the assets concerned had been frozen in the United States, not Switzerland, though the "beneficial owners" were those allegedly behind the Swiss account. He did not respond immediately when asked if the U.S. authorities were in contact with their Swiss counterparts.


With the assets frozen, the SEC would have had no immediate need for Swiss assistance in the case, although it eventually may need help to identify the account holders.


Rainer Borer, a spokesman for the Swiss financial markets watchdog known as FINMA, said a U.S. court cannot by itself freeze assets in an account of a bank operating in Switzerland.


"For that, it has to ask for legal or administrative assistance," he told Reuters. "Up to now, FINMA has not received a U.S. request for administrative assistance in the mentioned case of potential insider trading."


Justice ministry spokesman Folco Galli said the ministry had not received an official request for legal assistance either.


"Either a request for administrative or legal assistance would be necessary because a U.S. court cannot enforce a coercive measure in Switzerland," he said.


U.S. bank Goldman Sachs has said it is co-operating with the SEC probe. The SEC suit filed Friday refers to the account in Switzerland as the "GS Account.


Heinz had no comment, Michael Mullen, a company spokesman, said by email. Berkshire Hathaway and 3G Capital likewise declined to comment, said Gemma Hart, a spokeswoman for the investor group.


(Reporting by Silke Koltrowitz; Additional reporting by Martin de Sa'Pinto in Zurich and Jim Wolf in Washington; Editing by Marguerita Choy)



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U.N. says has list of Syrian war crimes suspects


GENEVA (Reuters) - Syrians in "leadership positions" who may be responsible for war crimes have been identified, along with units accused of perpetrating them, United Nations investigators said on Monday.


Both government forces and armed rebels are committing war crimes, including killings and torture, spreading terror among civilians in a nearly two-year-old conflict, they said.


The investigators' latest report, covering the six months to mid-January, was based on 445 interviews conducted abroad with victims and witnesses, as they have not been allowed into Syria.


The independent team, led by Brazilian Paulo Pinheiro, called on the U.N. Security Council to "act urgently to ensure accountability" for grave violations, possibly by referring the violators to the International Criminal Court for prosecution.


"The ICC is the appropriate institution for the fight against impunity in Syria. As an established, broadly supported structure, it could immediately initiate investigations against authors of serious crimes in Syria," the 131-page report said.


It added: "Individuals may also bear criminal responsibility for perpetuating the crimes identified in the present report. Where possible, individuals in leadership positions who may be responsible were identified alongside those who physically carried out the acts."


Karen Konig AbuZayd, one of the four commissioners on the team of some two dozen experts, told Reuters: "We have information suggesting people who have given instructions and are responsible for government policy. People who are in the leadership of the military, for example."


"It is the first time we have mentioned the ICC directly. The Security Council needs to come together and decide whether or not to refer the case to the ICC. I am not optimistic."


But its third list of suspects, building on lists drawn up in the past year, remains secret. It will be entrusted to U.N. High Commissioner for Human Rights, Navi Pillay, upon expiry of its current mandate at the end of March, the report said.


Pillay, a former judge at the ICC, said on Saturday that Syrian President Bashar al-Assad should be probed for war crimes and called for immediate action by the international community, including possible military intervention.


"The evidence collected sits in the safe in the office of the High Commissioner against the day it might be referred to a court and evidence would be examined by a prosecutor," said a European diplomat.


The death toll in Syria is likely approaching 70,000 people, Pillay told the Security Council last week in a fresh appeal for it to refer Syria to the ICC, the Hague-based war crimes court.


Government forces have carried out shelling and aerial bombardment across Syria including Aleppo, Damascus, Deraa, Homs and Idlib, the independent U.N. investigators said, citing corroborating evidence gathered from satellite images.


"In some incidents, such as in the assault on Harak, indiscriminate shelling was followed by ground operations during which government forces perpetrated mass killing," it said, referring to a town in the southern province of Deraa where residents told them that 500 civilians were killed in August.


"SPREADING TERROR"


"Government forces and affiliated militias have committed extra-judicial executions, breaching international human rights law. This conduct also constitutes the war crime of murder. Where murder was committed as part of a widespread or systematic attack against a civilian population, with knowledge of that attack, it is a crime against humanity," the U.N. report said.


They have targeted queues at bakeries and funeral processions, in violence aimed at "spreading terror among the civilian population", it said.


"Syrian armed forces have implemented a strategy that uses shelling and sniper fire to kill, maim, wound and terrorize the civilian inhabitants of areas that have fallen under anti-government armed group control," the report said.


Government forces had used cluster bombs, it said, but it found no credible evidence of either side using chemical arms.


Rebel forces fighting to topple Assad in the protracted and increasingly sectarian conflict have committed war crimes include murder, torture, hostage-taking and using children under age 15 in hostilities, the U.N. report said.


"They continue to endanger the civilian population by positioning military objectives inside civilian areas," it said. Rebel snipers had caused "considerable civilian casualties".


"The violations and abuses committed by anti-government armed groups did not, however, reach the intensity and scale of those committed by government forces and affiliated militia."


Foreign fighters, many of them from Libya, Tunisia, Saudi Arabia, Lebanon, Iraq and Egypt, have radicalized the rebels and helped detonate deadly improvised explosive devices, it said.


The two other commissioners are former chief ICC prosecutor Carla del Ponte and Vitit Muntarbhorn of Thailand.


"It is an investigative mechanism and its evidence can be given to relevant judicial authorities when the time comes. In the interim, it is the one piece of U.N.-approved machinery shining a light on abuses," the European diplomat said.


Referring to del Ponte, who joined in September, the diplomat said: "She brings a harder-edged prosecutorial lens so when they are looking at the evidence she is very well placed to know what sort of evidence would assist a later judicial process."


(Reporting by Stephanie Nebehay; Editing by Alistair Lyon)



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Beyoncé & Jay-Z Celebrate All-Star Weekend in Houston















02/18/2013 at 06:00 AM EST



It's Beyoncé's world and we're all just living in it.

On Saturday night, Blue Ivy's pop star mom, her husband Jay-Z and LeBron James held court in Houston at the Sprite Two Kings private dinner at RDG + Bar Annie.

While fans were buzzing about the singer's new documentary, Life Is but a Dream, Beyoncé slipped into the late night event dressed in a white pantsuit with her honey-hued hair in curls.

As the event continued, Chef Robert del Grande served mixed surf and turf with starters of Maine lobster salad, seared foie gras poor boys and entrees including wood grilled prime beef and gulf red snapper.

After dinner, things took a lively turn as deejay Mick Boogie played hits late into the night. Other attendees included P. Diddy, Drake, Ne-Yo, and Scottie and Larsa Pippen.

– Heather Staible


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Study: Better TV might improve kids' behavior


SEATTLE (AP) — Teaching parents to switch channels from violent shows to educational TV can improve preschoolers' behavior, even without getting them to watch less, a study found.


The results were modest and faded over time, but may hold promise for finding ways to help young children avoid aggressive, violent behavior, the study authors and other doctors said.


"It's not just about turning off the television. It's about changing the channel. What children watch is as important as how much they watch," said lead author Dr. Dimitri Christakis, a pediatrician and researcher at Seattle Children's Research Institute.


The research was to be published online Monday by the journal Pediatrics.


The study involved 565 Seattle parents, who periodically filled out TV-watching diaries and questionnaires measuring their child's behavior.


Half were coached for six months on getting their 3-to-5-year-old kids to watch shows like "Sesame Street" and "Dora the Explorer" rather than more violent programs like "Power Rangers." The results were compared with kids whose parents who got advice on healthy eating instead.


At six months, children in both groups showed improved behavior, but there was a little bit more improvement in the group that was coached on their TV watching.


By one year, there was no meaningful difference between the two groups overall. Low-income boys appeared to get the most short-term benefit.


"That's important because they are at the greatest risk, both for being perpetrators of aggression in real life, but also being victims of aggression," Christakis said.


The study has some flaws. The parents weren't told the purpose of the study, but the authors concede they probably figured it out and that might have affected the results.


Before the study, the children averaged about 1½ hours of TV, video and computer game watching a day, with violent content making up about a quarter of that time. By the end of the study, that increased by up to 10 minutes. Those in the TV coaching group increased their time with positive shows; the healthy eating group watched more violent TV.


Nancy Jensen, who took part with her now 6-year-old daughter, said the study was a wake-up call.


"I didn't realize how much Elizabeth was watching and how much she was watching on her own," she said.


Jensen said her daughter's behavior improved after making changes, and she continues to control what Elizabeth and her 2-year-old brother, Joe, watch. She also decided to replace most of Elizabeth's TV time with games, art and outdoor fun.


During a recent visit to their Seattle home, the children seemed more interested in playing with blocks and running around outside than watching TV.


Another researcher who was not involved in this study but also focuses his work on kids and television commended Christakis for taking a look at the influence of positive TV programs, instead of focusing on the impact of violent TV.


"I think it's fabulous that people are looking on the positive side. Because no one's going to stop watching TV, we have to have viable alternatives for kids," said Dr. Michael Rich, director of the Center on Media and Child Health at Children's Hospital Boston.


____


Online:


Pediatrics: http://www.pediatrics.org


___


Contact AP Writer Donna Blankinship through Twitter (at)dgblankinship


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Euro, dollar up after G20, stocks ease on growth concern

LONDON (Reuters) - The euro and the dollar rose against the yen on Monday after the G20 decided not to criticize Japan for its expansionist policies, but shares eased as Europe's weak growth outlook weighed on sentiment.


Financial leaders from the world's 20 biggest economies promised on Saturday not to devalue their currencies to boost exports, aiming to defuse talk of currency wars that had been roiling the markets.


The euro gained 0.2 percent to 125.32 yen, edging up toward a 34-month high of 127.71 yen hit earlier this month, while the dollar rose 0.6 percent to 94 yen, closer to its highest level since May 2010 of 94.46 hit on February 11.


"Future yen direction will continue to be driven by domestic monetary policy from the Bank of Japan and improving international investor confidence, which are both driving the yen weaker," said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ.


Japanese Prime Minister Shinzo Abe is poised to nominate a new BOJ governor. Sources told Reuters that former financial bureaucrat Toshiro Muto, considered likely to be less radical than other candidates, was leading the field.


Abe said on Monday that buying foreign bonds was a future option for the Bank of Japan, which would entail selling of the yen by the central bank.


The euro was also rising against the dollar, gaining 0.1 percent to $1.3375 ahead of address by European Central Bank president Mario Draghi to the region's parliament which may touch on the outlook for the single currency after the G20 meeting.


In European markets, attention was also switching to the release of euro area Purchasing Managers' Indexes for February and German sentiment indices due later in the week, and the upcoming general elections in Italy.


Analysts expect Thursday's euro area flash PMI indices, which point to economic activity around six months out, to show growth stabilizing across the recession-hit region, leaving hopes for a recovery in the second half of the year intact.


Concerns over an inconclusive outcome in Italian elections at the end of the week added to the weaker sentiment as a fragmented parliament could hamper a future government's reform efforts.


The worries about the outlook for Italy were encouraging investors back into safe have German government bonds on Monday, with 10-year Bund yields easing 3.6 basis points to be around 1.63 percent.


"Political uncertainty will keep Bunds well bid this week," ING rate strategist Alessandro Giansanti said, adding that only better than expected economic data could create selling pressure on German debt near term.


EARNINGS HIT


European equity markets were taking their lead from corporate earnings reports which have been reflecting the sluggish economic conditions across the region.


Danish brewer Carlsberg , which generates just over 60 percent of its sales in western Europe, became the latest company to report a weaker-than-expected quarterly profit, sending its shares to lowest level in nearly a month.


The 5 percent drop in price for shares in the world's fourth biggest brewery helped send the FTSEurofirst 300 index <.fteu3> of top European shares down 0.4 percent in morning trade. Germany's DAX <.gdaxi>, the UK FTSE <.ftse> and France's CAC-40 <.fchi> were all also slightly weaker. <.l><.eu/>


Earlier, the effect of the G20 statement and the comments from Abe indicating a renewed drive to stimulate the economy lifted the Nikkei stock index <.n225> by 2.1 percent, near to its highest level since September 2008.


U.S. stock futures were barely changed and are expected to stay little changed as Wall Street will be closed on Monday for the Presidents' Day holiday. <.n/>


MSCI's world equity index <.miwd00000pus> was flat as markets extended two-week period of consolidation that has followed the big run up in January when demand was buoyed by the efforts of global central banks to stimulate the world economy.


Data from EPFR Global, a US-based firm that tracks the flows and allocations of funds globally, shows investors pulled $3.62 billion from U.S. stock funds in the latest week, the most in 10 weeks after taking a neutral stance the prior week.


But demand for emerging market equities remained strong, with investors putting $1.81 billion in new cash into stock funds, the fund-tracking firm said.


CHINA RETURN


In the commodity markets traders played catch up after a week-long holiday last week in China, the world's second biggest consumer of many raw materials, had kept activity subdued, with worries about the euro zone economy weighing on sentiment.


Copper, for which China is the world's largest consumer, fell 0.8 percent to $8,135 a metric ton (1.1023 tons) on the London futures market.


Gold rebounded by 0.3 percent from a six-month low to be $1,614 an ounce as jewelers in China returned to the physical market after the Lunar New Year holiday.


Crude oil markets were mostly steady after some weak U.S. industrial production data on Friday [ID:nL1N0BF44A] was seen dampening demand, while tensions in the Middle East lent some support.


U.S. crude fell 20 cents to $95.66 a barrel but Brent inched up two cents $117.86.


(Reporting by Richard Hubbard; editing by Philippa Fletcher)



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Pope, at one of last appearances, says pray for me and next pope

HOUSTON (Reuters) - Michael Jordan never played against LeBron James but that has not stopped the two from going one-on-one over how to determine greatness on the basketball court. Jordan, widely hailed as the best player of all-time and who turns 50 on Sunday, believes it is all about championship rings, while James, 28, thinks that view is a little too simplistic. The debate has been the chief talking point of reporters and players in the run-up to the National Basketball Association's (NBA) All-Star game in Houston on Sunday. ...
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Beyoncé's Life Is But a Dream: The Best Moments















02/16/2013 at 11:05 PM EST



I am ... still singing!

Beyoncé's HBO documentary, Life Is But a Dream, aired Saturday night and it was a 90-minute whirlwind of music, dance and emotion. And though the singer, 31, has been everywhere recently (the Inauguration, the Super Bowl halftime show, Oprah's Next Chapter), the film was full of new and exciting moments. Here are my favorites:

Baby Bey: A home movie of Beyoncé as a little girl playing with bees made my jaw drop. The scene seems to prove what her fans believe: that she was born to be a superstar known as Queen B. I also loved seeing her singing – and being a typical, giggling teenager – with her sister Solange and Kelly Rowland.

The Heartbreak: From her frank discussion of firing her father as a manager to hearing "the saddest song" she's ever written after having miscarriage, the film – which Beyoncé produced and directed herself – had raw, emotional moments.

Mrs. Carter: Life is like a dream for Beyoncé and husband Jay-Z, who surprisingly shared intimate moments together – giddy over her pregnancy, singing Coldplay's "Yellow" to each other, enjoying solitude on a boat in an undisclosed, exotic location. You could feel the love when she toasted him on his birthday.

Blue Ivy: How cute is she?! When Beyoncé and Jay's baby girl, who turned 1 in January, appeared on the screen at the premiere of Life Is But a Dream at New York's Ziegfeld Theater, the crowd gasped and then let out a collective "aww." And I jammed my fingers on the TV screen the first time I watched, trying to pinch those cheeks. Seeing Beyoncé at home with a baby on her hip was a powerful reminder that the fierce superstar is human afterall.

The Music: Of course! Seeing her sing "Listen" with a gorgeously altered ending in a car convinced me of one thing: Beyoncé is definitely not human! I also loved seeing everything that went into her epic Billboard Music Awards performance of "Run the World (Girls)." I just wish I could do that dance. And is it me or does "Resentment" get grittier and angrier every time she performs it?

Praise Beysus and long live the Queen B!

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UN warns risk of hepatitis E in S. Sudan grows


GENEVA (AP) — The United Nations says an outbreak of hepatitis E has killed 111 refugees in camps in South Sudan since July, and has become endemic in the region.


U.N. refugee agency spokesman Adrian Edwards says the influx of people to the camps from neighboring Sudan is believed to be one of the factors in the rapid spread of the contagious, life-threatening inflammatory viral disease of the liver.


Edwards said Friday that the camps have been hit by 6,017 cases of hepatitis E, which is spread through contaminated food and water.


He says the largest number of cases and suspected cases is in the Yusuf Batil camp in Upper Nile state, which houses 37,229 refugees fleeing fighting between rebels and the Sudanese government.


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After decent rally, perhaps time for a pause

NEW YORK (Reuters) - Stocks could struggle to extend their seven-week winning streak as the quarterly earnings period draws to a close and the market bumps into strong technical resistance.


Many analysts say the market could spend the next few weeks consolidating gains that have lifted the benchmark Standard & Poor's 500 <.spx> by 6.6 percent since the start of the year.


The S&P 500 ended up 0.1 percent for the week, recovering from a late sell-off on Friday after a Bloomberg report about slow February sales at Wal-Mart triggered a slide in the retailer's shares. It was the index's seventh week of gains.


Odds of a pullback are increasing, with the market in slightly overbought territory, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.


"I do suspect the closing of the earnings season will lead to at least a pause and possibly a pullback," Zaro said. The S&P 500 could shave 3 to 5 percent between now and early April, he said.


Fourth-quarter earnings have mostly beaten expectations. Year-over-year profit growth for S&P 500 companies is now estimated at 5.6 percent, up from a January 1 forecast for 2.9 percent growth, and 70 percent of companies are exceeding analyst profit expectations, above the 62 percent long-term average, according to Thomson Reuters data.


On Thursday, Wal-Mart, the world's largest retailer, is due to report results, unofficially closing out the earnings period. Investors will be keen to see its quarterly numbers, especially after the Friday's news report that rattled investors.


The S&P 500 has gained 4.3 percent since Alcoa kicked off the earnings season on January 8.


The approaching March 1 deadline for across-the-board federal budget cuts unless Congress reaches a compromise adds another reason for caution, especially with recent economic data indicating the recovery remains bumpy.


Manufacturing output fell 0.4 percent last month, the Federal Reserve said on Friday, but production in November and December was much stronger than previously thought.


TESTING RESISTANCE


The S&P 500 has been trading near five-year highs, and it notched its highest level since November 2007 this week. But the gains have pushed the benchmark index almost as far as it is likely to go in the near term, with strong resistance hovering around 1,525 and 1,540, one analyst said.


As a result, the index is set to move sideways, said Dave Chojnacki, market technician at Street One Financial in Huntington Valley, Pennsylvania. "We just don't have the volume or the catalyst right now" to go above those levels, he said.


At the same time, other analysts say, the market has not shown significant signs of slowing, including a break below 15- and 30-day moving averages.


Such moves would be needed to show that momentum is slowing or that the market is at risk of a correction, said Todd Salamone, director of research for Schaeffer's Investment Research in Cincinnati, Ohio. The S&P 500's 14-day moving average is at 1,511 while the 30-day is at 1,494. The index closed Friday at 1,519.


Recent M&A activity, including news this week of a merger between American Airlines and US Airways Group , helped provide some strength for the market this week and optimism that more deals may be on the way.


In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.


The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded.


Among other companies expected to report earnings next week are Nordstrom , Hewlett-Packard and Marriott International


(Reporting By Caroline Valetkevitch; Editing by Leslie Adler)



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Exclusive: North Korea tells China of preparations for fresh nuclear test - source


BEIJING (Reuters) - North Korea has told its key ally, China, that it is prepared to stage one or even two more nuclear tests this year in an effort to force the United States into diplomatic talks, said a source with direct knowledge of the message.


Further tests could also be accompanied this year by another rocket launch, said the source, who has direct access to the top levels of government in both Beijing and Pyongyang.


North Korea conducted its third nuclear test on Tuesday, drawing global condemnation and a stern warning from the United States that it was a threat and a provocation.


"It's all ready. A fourth and fifth nuclear test and a rocket launch could be conducted soon, possibly this year," the source said, adding that the fourth nuclear test would be much larger than the third, at an equivalent of 10 kilotons of TNT.


The tests will be undertaken, the source said, unless Washington holds talks with North Korea and abandons its policy of what Pyongyang sees as attempts at regime change.


North Korea also reiterated its long-standing desire for the United States to sign a final peace agreement with it and establish diplomatic relations, he said. North Korea remains technically at war with both the United States and South Korea after the Korean war ended in 1953 with a truce.


In Washington, U.S. State Department spokeswoman Victoria Nuland urged North Korea to "refrain from additional provocative actions that would violate its international obligations" under three different sets of U.N. Security Council resolutions that prohibit nuclear and missile tests.


North Korea "is not going to achieve anything in terms of the health, welfare, safety, future of its own people by these kinds of continued provocative actions. It's just going to lead to more isolation," Nuland told reporters.


The Pentagon also weighed in, calling North Korea's missile and nuclear programs "a threat to U.S. national security and to international peace and security."


"The United States remains vigilant in the face of North Korean provocations and steadfast in our defense commitments to allies in the region," said Pentagon spokeswoman Major Catherine Wilkinson.


Initial estimates of this week's test from South Korea's military put its yield at the equivalent of 6-7 kilotons, although a final assessment of yield and what material was used in the explosion may be weeks away.


North Korea's latest test, its third since 2006, prompted warnings from Washington and others that more sanctions would be imposed on the isolated state. The U.N. Security Council has only just tightened sanctions on Pyongyang after it launched a long-range rocket in December.


Pyongyang is banned under U.N. sanctions from developing missile or nuclear technology after its 2006 and 2009 nuclear tests.


North Korea worked to ready its nuclear test site, about 100 km (60 miles) from its border with China, throughout last year, according to commercially available satellite imagery. The images show that it may have already prepared for at least one more test, beyond Tuesday's subterranean explosion.


"Based on satellite imagery that showed there were the same activities in two tunnels, they have one tunnel left after the latest test," said Kune Y. Suh, a nuclear engineering professor at Seoul National University in South Korea.


Analysis of satellite imagery released on Friday by specialist North Korea website 38North showed activity at a rocket site that appeared to indicate it was being prepared for a launch (http://38north.org/2013/02/tonghae021413/).


NORTH 'NOT AFRAID' OF SANCTIONS


President Barack Obama pledged after this week's nuclear test "to lead the world in taking firm action in response to these threats" and diplomats at the U.N. Security Council have already started discussing potential new sanctions.


North Korea has said the test was a reaction to "U.S. hostility" following its December rocket launch. Critics say the rocket launch was aimed at developing technology for an intercontinental ballistic missile.


"(North) Korea is not afraid of (further) sanctions," the source said. "It is confident agricultural and economic reforms will boost grain harvests this year, reducing its food reliance on China."


North Korea's isolated and small economy has few links with the outside world apart from China, its major trading partner and sole influential diplomatic ally.


China signed up for international sanctions against North Korea after the 2006 and 2009 nuclear tests and for a U.N. Security Council resolution passed in January to condemn the latest rocket launch. However, Beijing has stopped short of abandoning all support for Pyongyang.


Sanctions have so far not discouraged North Korea from pursuing its nuclear ambitions.


"It is like watching the same movie over and over again," said Lee Woo-young, a professor at Seoul's University of North Korean Studies. "The idea that stronger sanctions make North Korea stop developing nuclear programs isn't effective in my view."


The source with ties to Beijing and Pyongyang said China would again support U.N. sanctions. He declined to comment on what level of sanctions Beijing would be willing to endorse.


"When China supported U.N. sanctions ... (North) Korea angrily called China a puppet of the United States," he said. "There will be new sanctions which will be harsh. China is likely to agree to it," he said, without elaborating.


He said however that Beijing would not cut food and fuel supplies to North Korea, a measure it reportedly took after a previous nuclear test.


He said North Korea's actions were a distraction for China's leadership, which was concerned that the escalations could inflame public opinion in China and hasten military build-ups in the region.


The source said he saw little room for compromise under North Korea's youthful new leader, Kim Jong-un. The third Kim to rule North Korea is just 30 years old and took over from his father in December 2011.


He appears to have followed his father, Kim Jong-il, in the "military first" strategy that has pushed North Korea ever closer to a workable nuclear missile at the expense of economic development.


"He is much tougher than his father," the source said.


(Additional reporting by Arshad Mohammed and Phillip Stewart in WASHINGTON; Writing by David Chance; Editing by Raju Gopalakrishnan, David Brunnstrom and Jackie Frank)



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