Netanyahu hopeful of compromise at end of talks in US

Israeli Prime Minister Benjamin Netanyahu says he is hopeful of a compromise on the row over Jerusalem settlements after talks in Washington.

He boarded his plane back to Israel talking of a "golden way" to revive Mid-East peace talks but there was no official comment from the White House.

Mr Netanyahu met President Barack Obama and held last-minute talks with Mid-East envoy George Mitchell.

Neither he nor US officials gave details of what was discussed.

The row over Israel's plans for homes in occupied East Jerusalem has caused one of the worst crises in US-Israeli ties for decades.

There were no photo calls with President Obama

The White House had reportedly been trying to persuade Mr Netanyahu to commit to several trust-building measures to revive hopes for indirect "proximity talks" between Israel and the Palestinians.

The Palestinians pulled out of moves towards talks two weeks ago, after Israel unveiled plans to build 1,600 homes in the East Jerusalem settlement of Ramat Shlomo.

The project was approved during a visit by US Vice-President Joe Biden - a move which Washington initially branded an insult.

Extended visit

Scant information on the content of Mr Netanyahu's negotiations has emerged and rarely has so little been said about such high-level meetings, lasting so long, between the US and one of its closest allies, says the BBC's Richard Lister in the US capital.

Mr Netanyahu was quoted by news agencies as saying he thought a "golden" way had been found to move the peace process forward while preserving Israeli interests.

However, the Israeli daily Haaretz quoted him as saying that Israel was "trying to find the golden path".

Israeli sources quoted by Reuters news agency said Mr Netanyahu could not finalise any confidence-building measures until he presented them to his cabinet.

US officials speaking on condition of anonymity to the Associated Press news agency said the talks had not ended tensions over Israel's construction in East Jerusalem.

Mr Netanyahu had extended his stay by hours to work on a deal but the talks with Mr Mitchell ended at about 2000 (0100 GMT) on Wednesday without any announcements, one of the officials said.

Mr Mitchell had returned to the US following a meeting in the West Bank with Palestinian Authority President Mahmoud Abbas.

Earlier on Wednesday, White House spokesman Robert Gibbs said that President Obama had held "honest" talks with Mr Netanyahu, urging him to take steps to build confidence in the peace process.

Mr Gibbs added that the US was seeking "clarification" about the latest plans to build homes in occupied East Jerusalem.

Minutes before Mr Netanyahu's fence-mending visit to the White House on Tuesday, it emerged the Jerusalem municipal government had approved another development.

Twenty apartments are to be built for Jewish settlers on the site of an old hotel in the predominantly Arab neighbourhood of Sheikh Jarrah.

Mr Gibbs told reporters on Wednesday there were areas of agreement and disagreement between the sides.

"The president has asked the prime minister for certain things to build confidence up to proximity talks that we think can make progress," Mr Gibbs said.

He reiterated the American position that there was an "unbreakable bond" between the US and the Israeli people.

The Israelis said there had been a "good atmosphere" during Tuesday's talks.

But the BBC's Kim Ghattas in Washington notes Mr Netanyahu did not get the reception usually reserved for America's allies.

There was no press conference, no lavish welcome, and the White House did not even release a picture of the meeting.

It all signals that the US is playing tough, making clear it is upset with the Israeli government, says our correspondent.

Palestinians want East Jerusalem for their future capital, but Israel insists the city cannot be divided.

Nearly half a million Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem.

They are considered illegal under international law, although Israel disputes this.

Dubai World gets $9.5bn government backing

The Dubai government has announced it will provide $9.5bn (£6.4bn) in funding to help its Dubai World investment vehicle to restructure its debt.

The troubled company has presented a plan to restructure $23.5bn of debt to its creditors, including converting $8.9bn of debt into equity.

Creditors will now decide on whether to accept the plan.

Dubai World stunned global markets in November last year when it asked for a six-month delay on debt repayments.

'Strong future'

The restructuring plan also involves a cash injection of $1.5bn from the Dubai Financial Support Fund (DFSF), as well as issuing two tranches of new debt to be repaid over five- and eight-year periods.

"This proposal represents the best possible solution for all stakeholders," Dubai World said.

"It follows extensive discussions with our creditors, a thorough review of Dubai World's businesses and significant financial support from the government."

Sheikh Ahmad bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, said the proposals would ensure that both Dubai World and property company Nakheel were "key contributors to the strong economic future of the Emirate of Dubai".

"The government of Dubai, acting through the DFSF, will support these proposals with significant financial resources, including a commitment to fund up to $9.5bn in new funding over the business plan period."

'Good response'

Analysts said the proposals would be well received by investors.

"It boosts sentiment because this is a strong commitment," said Ayman al-Saheb at Darahem Financial Brokerage.

He said the companies could now begin "restructuring properly".

"Information is key in the capital markets, and now that we have received some information, we definitely expect a good response from investors."

After Dubai World first asked for extensions on debt repayments last year, major global stock markets fell as investors worried about the health of the Dubai economy.

Banks were hit particularly hard on concerns over Dubai's ability to pay back its debts.

Dubai World is the centrepiece of Dubai's economy and helped to drive the emirate's economic expansion.

Another US Internet company pulls back in China

By JOELLE TESSLER

WASHINGTON -- Two U.S. companies that sell Internet addresses to Web sites said Wednesday they had stopped registering new domain names in China because the Chinese government has begun demanding pictures and other identification documents from their customers.

One of the domain name companies, Go Daddy Inc., announced its change in policy at a congressional hearing that was largely devoted to Google Inc. ( GOOG - news - people )'s announcement Monday that it will no longer censor Internet search results in China.

Christine Jones, executive vice president and general counsel of Go Daddy, said the company's decision was not a reaction to Google but instead reflects its concern about the security of its customers and "the chilling effect" of the new Chinese government requirements.

"We just made a decision that we didn't want to act as an agent of the Chinese government," Jones told lawmakers.

Separately, a company that offers similar services, Network Solutions LLC, also said Wednesday it had stopped handling China Web registrations in December, for the same reason.

Zhong Shan, China's vice commerce secretary in charge of foreign trade, said he hadn't been briefed on the Go Daddy decision.

Speaking to reporters at the Chinese Embassy in Washington, however, Zhong called Google's decision an "exceptional case" that wouldn't undermine the confidence of foreign investors in China. He said China's economy wasn't perfect, but that the government is working to create a more attractive investment environment.

"China's policy of opening up remains unchanged," Zhong said through an interpreter. "We still welcome foreign investment."

Go Daddy - a company known for risque ads that mock congressional hearings - has been registering domain names in China since 2005 under authorization from the China Internet Network Information Center, a quasi-government agency. The company currently manages about 27,000 ".cn" domain names. That's a small slice of Chinese Web sites, and ".cn" names continue to be available through other resellers.

Go Daddy said the agency has always made the company, known as a registrar, collect customer names, addresses and other contact information since it began registering ".cn" Internet domain names. But late last year, Go Daddy said, the Chinese agency changed its policy to require ".cn" domain name registrars to also collect head shots, business identifications and signed registration forms from new customers and then forward that information to the agency.

Then, Jones said, the agency instructed domain name registrars to obtain this same information from existing customers and forward it too - warning that Web sites of customers who refuse to register would be disabled.

Go Daddy said it has contacted 1,200 of its customers with ".cn" Web sites, asking for the additional documentation and informing them that it would be handed over to the China Internet Network Information Center. The company said only about 20 percent of those customers have provided the documentation.

Now, Jones said, the company won't register new names. She did not say how much of the company's revenue the business was bringing in.

Network Solutions said in a statement that it dropped the service in December because the Chinese policy was "intrusive" and would have placed a burden on its customers.

Similarly, another domain name registrar based in the U.S., eNom Inc., wants to continue offering ".cn" Web addresses, but is worried that the changes China has ordered "could make it almost impossible to do it," said Jeffrey Eckhaus, general manager at eNom.

Obama Widens Approval Above All as Democrats, Republicans Lag

By John McCormick

March 25 (Bloomberg) -- President Barack Obama receives lukewarm ratings from Americans, at least until you compare him with other major political figures and institutions.

Fifty percent approve of the job he is doing, a Bloomberg National Poll shows, down from 54 percent in December.

Those favorability numbers look solid when compared with House Speaker Nancy Pelosi, Treasury Secretary Timothy Geithner, 2008 Republican presidential candidate Mitt Romney and both political parties, with voters unhappy about U.S. finances and the direction the nation is heading.

“It’s about the money,” says J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the nationwide survey. “His scores are lowest when it comes to dealing with the budget, and it is the thing that inflames the American public. Government spending is the hot-button issue right now.”

Obama’s approval rating is roughly equal to what Bill Clinton had at this point in his presidency, according to data maintained by Gallup. It’s higher than the 45 percent Ronald Reagan recorded in April 1982.

Obama, 48, still enjoys an 85 percent job-approval rating among Democrats, compared with 46 percent among independent voters and 11 percent among Republicans.

Disturbed by Deficit

He receives higher marks for his handling of foreign affairs than on matters closer to home. Fifty-eight percent approve of Obama’s management of relations with other countries, while 54 percent approve of his running of the war in Afghanistan, the poll found.

Obama’s performance is viewed more critically when it comes to the budget deficit, dealing with the aftermath of the 2008 financial crisis, health care and job creation.

“The terrible economy has been a magnet pulling down Obama’s approval ratings,” says Mark Mellman, a Democratic pollster who worked for John Kerry’s 2004 presidential bid. “The fact that he has only been pulled down to 50 percent is a sign of the respect and affection people have for him. Being at 50 percent is actually a pretty strong place to be.”

The weakest category among those tested for Obama was the deficit. Only about a third of Americans approve of the way he’s dealing with the nation’s finances.

With 80 percent of poll participants agreeing with the statement “government spending is out of control,” Selzer says there is a political opening for Republicans in November’s congressional elections, if they can maintain the notion that Obama and Democrats are spending too freely.

Can’t See Progress

“Everything sounded good when he was running, but nothing is really getting done yet,” says John Gabrys, 46, a stay-at- home father and former physical education instructor who lives in Somonauk, Illinois. “I haven’t seen any progress.”

Gabrys, who considers himself an independent, says he voted for Obama. He gives the president a “C+” on his presidency so far, although he says he could improve his grade by generating more jobs.

“Everyone’s numbers are atrocious because nobody is delivering,” says pollster Doug Schoen, who worked for Clinton during his presidency. “If the Democratic Party is unable to address the economic problems, then they are gone.”

With unemployment at 9.7 percent, 58 percent of Americans believe the nation is headed in the wrong direction, essentially unchanged from December. Ninety percent of Republicans and 62 percent of independents think things are going poorly, while less than a third of Democrats feel that way.

Worried About Leaders

The depressed mood is reflected in concern about the nation’s leaders, with 56 percent of respondents pessimistic they will find solutions to challenges facing the U.S. That skepticism rises to 83 percent among Republicans and 62 percent among independents.

The poll of 1,002 U.S. adults was conducted March 19-22. It has a margin of error of plus or minus 3.1 percentage points.

Obama’s numbers look better when measured against other public figures.

Federal Reserve Chairman Ben Bernanke is viewed favorably by 34 percent and unfavorably by 23 percent, with 43 percent saying they weren’t sure what to think about him.

Like Bernanke, Obama attracts more favorable than unfavorable ratings, 53 percent to 42 percent, with just 5 percent not sure.

Geithner Down

Geithner is less popular, with 25 percent holding a favorable view, 28 percent having a negative view and 47 percent unsure.

Pelosi is seen favorably by 31 percent, while 48 percent have an unfavorable view and 21 percent are unsure.

Both major political parties have numbers better than Pelosi. The Democratic and Republican parties have almost equal favorability at 42 percent and 39 percent, respectively.

Romney is regarded favorably by 31 percent and unfavorably by 26 percent, with 43 percent unsure.

At 31 percent, the economy was most often cited as the top issue facing the nation, followed by health care at 22 percent, and government spending and the federal deficit at 20 percent.

For Republicans, government spending and the deficit are virtually tied with the economy for the top spot at 32 percent and 33 percent, respectively. Just 8 percent of Democrats say government spending and the deficit is the most important issue.

“I feel like we are creating problems that my daughter’s kids someday will pay the price for,” says Laurie Hartman, 49, an administrative assistant and Republican who lives in Syracuse, New York. “We think we can fix problems by throwing money at them.”

To contact the reporter on this story: John McCormick in Washington at jmccormick16@bloomberg.net;

How Westerners in China Can Fight Back

The best strategy for dealing with Beijing's chilly new business climate is not to copy Google's example

By Daniel Michaeli

No matter how tense commercial relations between the U.S. and China become, American corporations cannot afford to mimic Google's (GOOG) mistake and give up huge growth opportunities in the world's largest market. That's why business leaders need to adjust their strategies quickly to stem the damage.

First, they must cultivate untapped sources of support within China, beginning with independent executives who also chafe at Beijing's market-unfriendly policies. Coordinating a message with these leaders would change the narrative, removing the perception that greater economic openness means giving in to foreign pressure.

Some are already willing to join U.S. companies in public support of better Chinese economic policies. On Mar. 24, for instance, Bloomberg reported that Chinese executives including Yang Yuanqing, CEO of Lenovo (LNVGY), have gone public with their support of the currency realignment U.S. exporters need to be more competitive in China.

Allies Inside China

One place to look for allies is among the private executives upset because they cannot secure loans from state banks that pump cheap money into state-owned enterprises. Case in point: Last year, Liu Jieyin, the founder of Okay Airways, complained about the unfair dominance of state companies to Forbes. And he said the business climate for independent firms was so bad that "if you asked me to set up a private airline now, I would not dare."

American companies should also try to enlist help from state-owned enterprises that have an interest in open trade and investment. For example, the Commercial Aircraft Corp. of China (Comac)—which is making the C919, China's first jumbo jet—recently signed a $10 billion contract for an engine made by a joint venture of General Electric (GE) and France's Safran (SAF:FP). Comac is already taking orders for the C919, but whether the jet will be ready by 2016 as pledged depends on the successful execution of the engine contract. A worsening of the business environment could put such contracts, and even access to future export markets, at risk.

Despite the shrill rhetoric coming from Beijing, many government officials appreciate the concerns of foreign businesses. Some have long histories with foreign companies; others hope to restore economic openness for other reasons. They worry about stifling innovation and weakening the private sector, which has fueled growth for decades; creating housing and equity bubbles; and paying the environmental and public health costs of overinvestment. These worries were all raised publicly at the National People's Congress meeting in March.

Choose Your Battles

In addition to mustering support within China, U.S. companies must choose their battles more carefully. So when an attempted hacking raised the prospect of local competitors stealing trade secrets, Google should have focused on compelling authorities, perhaps by dangling the threat of going public about the hacking, to commit to protecting its intellectual property. Instead, Google threatened to leave China's search engine market if search censorship wasn't lifted—an impossible request of an authoritarian state. This action invited a hard-line response, failed to secure Google's intellectual property, and will only hinder Chinese citizens' access to information.

When threats are necessary, they should come from business groups with substantial combined leverage. U.S. companies manufacturing in China are collectively responsible for the livelihood of millions of Chinese workers. They also have the ability to build up the capabilities of regional competitors such as India. This gives them political leverage if they act in unison.

Market openness serves China's long-term interests. It strengthens the country's dynamic private companies and improves access to Western technologies. But it may take time for China's leaders to realize that. In the meantime, U.S. companies need to challenge Chinese policies more effectively. If American businesses fail in China, they put at risk both U.S. economic competitiveness and the most important bilateral relationship of this century.

Michaeli is a research associate at the Council on Foreign Relations. He blogs at www.asiaruminations.com.

Google's Quixotic China Challenge

The Web search leader may make little progress getting other companies to join it in publicly criticizing Beijing's Internet policies

By Douglas MacMillan

Google (GOOG) is stepping up a campaign to get other companies and the U.S. government to join it in putting pressure on China's government over alleged human-rights violations. The Web search company may make limited headway.

Following a decision to stop censoring search results in China, Google co-founder Sergey Brin said in a Mar. 25 interview with the U.K. newspaper The Guardian that the U.S. government and other businesses should put a "high priority" on calling attention to human-rights abuses in China.

While one company did just that and some U.S. government officials have championed Google's cause, there's unlikely to be a groundswell of businesses willing to take public issue with China, the world's most populous country and third-largest economy. "Just because the situation got bad for you doesn't mean it's bad for everybody else," says Danny Sullivan, editor-in-chief of the Web site Search Engine Land.

On Mar. 22, Google said it had stopped censoring its Chinese Web site and shifted search services from the mainland to an unfiltered Hong Kong site, an act criticized as "totally wrong" by China. Google said on Jan. 12 it was no longer willing to censor content on its Chinese site after being targeted by cyber attacks from within China. Hackers obtained proprietary information and e-mail data of some human-rights activists in a "highly sophisticated attack," the company said at the time.

Crossroads for Internet Companies

The standoff provoked global debate about how Internet businesses should operate in a country with a questionable record of protecting the online privacy and freedom of expression of its citizens. "A lot of businesses around the world are now realizing they have to think through and figure out how to respond to these kinds of controls—not just in China but in other parts of the world," says Ed Black, CEO of the Computer & Communications Industry Assn. "What Google has done is made them realize they may be facing a fork in the road that they better start planning for."

Two days after Google's withdrawal, Internet domain registrar GoDaddy.com announced it had stopped selling new Web domain names in China, citing dismay with government policies it says are designed to tighten control over Internet use by residents. "We don't want to be an agent for the Chinese government," says Christine Jones, Go Daddy's general counsel.

Some politicians applauded Google's move. "Google, more than any other business or force, has been the game-changer," says Representative Chris Smith (R-N.J.) in an interview. Smith and other U.S. officials are pushing for new policies that would see the U.S. government play a role in ensuring the protection of American Internet businesses in China and other countries.

In remarks in January, Secretary of State Hillary Clinton called on Beijing to investigate the hacking attacks that affected Google. "Countries or individuals that engage in cyber attacks should face consequences and international condemnation," she said during a public speech at the Newseum.

How Much to Push Back?

It's not clear that condemnation will emanate from corporations. "How far are [companies] willing to go?" asks Leslie Harris, president of the Washington nonprofit Center for Democracy & Technology. "How much are they willing to push back and what steps are they willing to take to try to mitigate the human-rights impact to their users?"

Seeking to help provide businesses a template for addressing these problems, Harris and others formed the Global Network Initiative (GNI) in 2008, a coalition of major U.S. Internet businesses like Google, Microsoft (MSFT), and Yahoo (YHOO), as well as think tanks and universities. The group meets periodically to draft and update guidelines on what procedures to take when, for example, foreign governments ask for sensitive information about users.

Yet when it comes to publicly upbraiding the Chinese, other companies may be less willing to cooperate. Google approached other companies to seek their help drawing attention to the cyber attack and was frustrated by their reluctance to come forward, a person familiar with the matter told Bloomberg News in January.

Representative Smith says the government should play a bigger role in calling out foreign countries that restrict access to the Web. Four years ago, he drafted the Global Online Freedom Act, legislation that would, among other provisions, require the U.S. State Dept. to issue an annual list of "Internet restricting countries," and require American companies to notify the State Dept. before complying with requests from foreign governments.

The bill is supported by Google, Smith says. The question now is whether other companies can get behind getting tough on China.

Douglas MacMillan is a staff writer for Bloomberg BusinessWeek in New York.