Microsoft may have exited gadget show prematurely

LAS VEGAS (AP) — Microsoft may have relinquished its starring role in America’s gaudiest gadget show a year too early.

After 13 straight years in the spotlight, Microsoft’s decision to scale back its presence at this week’s International CES deprived the software maker of a prime opportunity to explain and promote a new generation of redesigned computers running its radically remade Windows operating system.

The missed chance comes at a time when Microsoft Corp. could use a bully pulpit to counter perceptions that Windows 8 isn’t compelling enough to turn the technological tide away from smartphones and tablets running software made by Apple Inc. and Google Inc.

“They needed to be at this show in a very big way to show the progress they have made and what is it about 2013 that is going to make consumers really gravitate toward a Windows 8 machine,” said technology industry analyst Patrick Moorhead.

Since Windows 8 went on sale in late October, there has been little evidence to suggest the operating system will lift the personal computer industry out of a deepening downturn. Worldwide PC shipments during the final three months of last year dropped 6 percent from the same period in 2011, according to the research firm International Data Corp. The dip occurred despite the bevy of Windows 8 laptops and desktop machines that were on sale during the holiday shopping season.

Microsoft, though, insists things worked out at just fine during CES, even though it didn’t have a booth and only had a smattering of executives at the sprawling trade show, which drew some 156,000 people to Las Vegas.

The company, which is based in Redmond, Wash., decided it no longer makes sense to invest as much time and money in CES as it once did. The company says the show’s early January slot doesn’t mesh with the timing of its major product releases. Windows 8, for instance, was still more than nine months away from hitting the market when Microsoft CEO Steve Ballmer kicked off last year’s CES with a keynote address that was billed as the company’s swan song at the show.

“We are very comfortable with our decision,” Microsoft spokesman Frank Shaw said. “It has been a productive show for us this year.”

Microsoft’s retreat from CES puzzled some attendees curious about Windows 8. For instance, when Michael Sullivan showed up at computer maker Asus’ booth, which was stocked with Windows 8 computers, there was no one around to discuss the machines or the software.

“This is unusual,” said Sullivan, CEO of computer sales firm Spec 4 International Inc. “I don’t understand why a successful company isn’t bringing executives here.”

Asus invited some CES attendees to learn more about Windows 8 at a nearby hotel, away from the show’s main trade show. Asus has left its booth unmanned in previous years at CES, but the void wasn’t as noticeable when Microsoft’s own representatives were canvassing the floor.

NPD DisplaySearch analyst Richard Shim thought Microsoft should have had more people helping to staff its partners’ booths because, he said, no one understands how Windows 8 works better than the company that made it.

“Whenever you have a new product rolling out, it’s always helpful to communicate your message directly as opposed to counting on your partners,” Shim said.

Microsoft elected to curtail its CES presence largely because the show’s marketing value has diminished. In recent years, companies such as Apple and Google have shown that they can command more attention by holding their own exclusive events to unveil products just before they go on sale. Neither Apple nor Google had a major presence at CES.

In a sign that it is embracing its rivals’ strategy, Microsoft staged separate events last year in Los Angeles and New York to unveil Surface, a Windows-powered tablet computer, and Windows 8.

Nevertheless, both Shim and Moorhead believe would have been better off waiting until after this year’s CES to surrender its top billing on the marquee. That way, Ballmer could have used this year’s opening CES keynote to talk about Windows 8′s advantages as a finished product.

“Ballmer could have talked about the operating system more completely and built more hype around it, especially since Microsoft has been getting beaten up so far over Windows 8′s performance,” Shim said.

When Ballmer ended Microsoft’s 13-year streak of kicking off CES, he was only able to provide a peek at a makeover of the operating system that was still months away from being completed.

Microsoft touts Windows 8 as a breakthrough that will enable people to straddle the divide between personal computers and tablets. The revamped operating system is built to respond to the touch of a finger so it can work on tablet computers while still retaining the ability to respond to commands from keyboards and mice on laptop and desktop machines. To take advantage of Windows 8′s versatility, many PC makers are building convertible devices that can work as a tablet or a laptop.

But reviews of the new operating system have been lukewarm. Critics have been panning it as too confusing and cumbersome.

Microsoft used part of a CES technology forum presented by J.P. Morgan to try to build more enthusiasm. The company revealed that 60 million copies of Windows 8 have been sold so far, putting it on the same pace as the previous version — Windows 7 — at the same juncture of its release. But it’s unclear how many of those Windows 8 licenses are installed on computers that are still sitting in stores or warehouses.

Investors have been so unimpressed with the reception to the new Windows products that Microsoft’s stock price has slipped 4 percent since the operating system’s Oct. 26 release. Meanwhile, the bellwether Standard & Poor’s 500 index has gained 4 percent. Microsoft’s stock closed Friday at $ 26.83, up 37 cents.

A clearer picture of the early reception to Windows 8 may emerge Jan. 24 when Microsoft is scheduled to report its earnings for the three months spanning the holiday shopping season.

Although he wasn’t the main attraction, Ballmer made a cameo appearance during Qualcomm Inc. CEO Paul Jacobs’ opening address at this year’s show.

Ballmer’s acceptance of Qualcomm’s invitation to join Jacobs on stage surprised some people because Qualcomm has emerged as a threat to Intel Corp., a longtime Microsoft ally that makes most of the processors in Windows computers. Instead of touting Windows 8, Ballmer spent his time hailing a streamlined version of the operating system, dubbed Windows RT, which runs on tablets using processors that rely on technology designed by ARM, another Intel rival.

Microsoft’s top executive in charge of technical strategy appeared on stage at Samsung Electronics’ invitation to reveal a Windows phone featuring a flexible color display. The electronics of the phone are in a little box, and the thin, bendable screen is attached to it, looking much like a piece of paper.

That left Intel and other Microsoft partners, including PC makers Samsung, Sony, Asus, Acer and Hewlett-Packard Co., to do most of the boasting about Windows 8 at their own CES booths.

“Our partners are doing that very effectively,” Shaw said. “You couldn’t walk through the (CES) floor without seeing people doing really interesting things with Windows 8.”

But there were other times when it appeared Microsoft’s partners could have used some help.

Sony exhibitor John Guzman, for instance, seemed stumped when an Associated Press reporter visited the company’s CES booth and asked whether a machine running Windows 8 or the more advanced Windows 8 Pro would be a better fit for journalistic work.

“That is more of a Microsoft question,” Guzman said, adding that no Microsoft representatives were around.

___

Liedtke reported from San Francisco. AP Technology Writer Peter Svensson contributed to this story.

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Miranda Kerr: Orlando and I Are Too Busy for Another Baby

Alex J. Berliner/ABImages

Party time!

After last year’s low-key celebration, Miranda Kerr and Orlando Bloom went a bit bigger for their son Flynn Christopher‘s second birthday, inviting 15 of his pint-sized pals over for a backyard bash.

“It was a lot of fun … and it was a really special celebration,” the Victoria’s Secret Angel, 29, told reporters at Qantas Australian Celebrity Party Wednesday in Beverly Hills, Calif.

“We had a little bubble machine and the kids loved it. We also had little bunny rabbits and chickens.”

Amid speculation of a split, Kerr says the couple are in fact busy concentrating on their baby boy before contemplating the idea of a second child.

“We are really enjoying our time with Flynn at the moment. He’s such a ball of love and he’s so wonderful,” she shares.

“And we are both so busy that I think it’s nice to have that time together and not rush any other babies for now.”

Citing “communication and honesty” as key components to a successful marriage, the model admits despite time often spent apart from Bloom, the two constantly keep in touch.

“Lots of Skype. Especially now that we have our son,” she says, adding Flynn is a fan of the video calling. “I’m not much of a talking on the phone person. I prefer to text. It’s always very hard to get me on the phone.”

But even between their hectic schedules and worldly travels, Kerr is still determined to keep Flynn in tune with his Australian heritage — particularly their unique cuisine.

“He says, ‘G’day mate’ and he puts a thumb up, too,” she says. “My grandma introduced him to Vegemite and he’s never turned back. [He says,] ‘Mummy, mummy, Vege.’”

– Anya Leon with reporting by Raha Lewis

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Flu more widespread in US; eases off in some areas

NEW YORK (AP) — Flu is more widespread across the nation, but the number of hard-hit states has declined, health officials said Friday.

Flu season started early this winter, and includes a strain that tends to make people sicker. Health officials have forecast a potentially bad flu season, following last year's unusually mild one. The latest numbers, however, hint that the flu season may already have peaked in some spots.

Flu was widespread in 47 states last week, up from 41 the week before, the Centers for Disease Control and Prevention said on Friday. Many cases may be mild. The only states without widespread flu are California, Mississippi and Hawaii.

The hardest hit states fell to 24 from 29, with large numbers of people getting treated for flu-like illness. Dropped off that list were Florida, Arkansas and South Carolina in the South, the first region hit this flu season.

Recent flu reports have included the holidays when some doctor's offices were closed, so it will probably take a couple more weeks to know if the flu has peaked in some places or grown stronger in others, CDC officials said Friday.

"Only time will tell how moderate or severe this flu season will be," CDC Director Dr. Thomas Frieden said in a teleconference with reporters.

Nationally, 20 children have died from the flu. There is no running tally of adult deaths, but the CDC estimates that the flu kills about 24,000 people in an average year.

Flu vaccinations are recommended for everyone 6 months or older, and health officials say it is not too late to get vaccinated. flu reports.

Nearly 130 million doses of flu vaccine were distributed this year, and at least 112 million have been used. Vaccine is still available, but supplies may have run low in some locations, health officials say.

Hyrmete Sciuto, of Edgewater, N.J., got a flu shot Friday at a New York City drugstore. She hadn't got one in years, but news reports on the flu this week made her concerned.

As a commuter by ferry and bus, "I have people coughing in my face," she said. "I didn't want to risk it this year."

The flu vaccine isn't foolproof; people who get vaccinated can still get sick.

On Friday, CDC officials said a recent study of more than 1,100 people has concluded the current flu vaccine is 62 percent effective. That means the average vaccinated person is 62 percent less likely to get a case of flu that's bad enough to require a trip to the doctor, compared to people who don't get the vaccine.

That's in line with how effective the vaccine has been in other years.

The flu vaccine is reformulated annually, and officials say this year's version is a good match to the viruses going around.

Flu usually peaks in midwinter. Symptoms can include fever, cough, runny nose, head and body aches and fatigue. Some people also suffer vomiting and diarrhea, and some develop pneumonia or other severe complications.

Most people with flu have a mild illness. But people with severe symptoms should see a doctor. They may be given antiviral drugs or other medications to ease symptoms.

Some shortages have been reported for children's liquid Tamiflu, a prescription medicine used to treat flu. But health officials say adult Tamiflu pills are available, and pharmacists can convert those to doses for children.

___

AP Science Writer Malcolm Ritter in New York contributed to this report.

___

Online:

CDC flu: http://www.cdc.gov/flu/index.htm

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Wall Street falls, pressured by Wells Fargo, banks

NEW YORK (Reuters) - Stocks edged lower on Friday after Wells Fargo & Co , the first major bank to kick off fourth-quarter earnings season for the financial sector, reported a decline in net interest margin despite a record profit in the latest quarter.

Wells Fargo, the fourth-biggest U.S. bank and the nation's largest home lender, said its fourth-quarter net interest margin - a key measure of how much money banks make from loans - fell, even as profit jumped 24 percent. The bank also made fewer mortgage loans than in the third quarter.

"It (Wells Fargo results) is weighing on the sector. We are keeping our fingers crossed that this won't be a sector thing and more confined to Wells Fargo, but it's definitely playing a factor today," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets LLC in Boston.

The bank's shares fell 1.4 percent to $34.92. The S&P 500 financial sector index <.gspf> fell 0.6 percent and the KBW Banks index <.bkx> fell 1 percent. Bank of America Corp , JPMorgan Chase & Co and Citigroup Inc are due to report results next week.

Overall earnings were expected to grow by 1.9 percent in this earnings season, according to Thomson Reuters data.

The Dow Jones industrial average <.dji> was up 6.12 points, or 0.05 percent, at 13,477.34. The Standard & Poor's 500 Index <.spx> was down 2.37 points, or 0.16 percent, at 1,469.75. The Nasdaq Composite Index <.ixic> was down 2.19 points, or 0.07 percent, at 3,119.56.

Also keenly watched Friday were shares of Dow component Boeing , which fell 2.6 percent to $75.11 after a cracked cockpit window and an oil leak on separate flights in Japan compounded safety concerns about its new 787 Dreamliner. The U.S. Department of Transportation said the jet would be subject to a review of its critical systems by regulators.

Best Buy shares rallied after its results showed a bit of a turnaround in its U.S. stores, though same-store sales were flat during the key holiday season. Shares jumped 12 percent to $13.69.

Basic materials shares were pressured after China's annual consumer inflation rate picked up to a seven-month high, narrowing the scope for the central bank to boost the economy by easing monetary policy. The S&P basic materials sector <.gspm> fell 0.6 percent.

Dendreon Corp shares jumped 14.7 percent to $5.85 after Sanford C. Bernstein upgraded the drugmaker's stock to "outperform" from "market-perform" and said it could be one of the best performers in 2013.

(Editing by Bernadette Baum, Nick Zieminski)

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France launches air strike in Mali

PARIS/BAMAKO (Reuters) - The French air force carried out an air strike in Mali on Friday in support of government forces trying to push back Islamist rebels, French Foreign Minister Laurent Fabius said.

The raid came as France launched a military intervention in the west African state to help the government resist a push south by rebel forces.

Western powers fear the alliance of al Qaeda-linked militants that seized the northern two-thirds of Mali in April will seek to use the vast desert zone as a launchpad for international attacks.

"French forces brought their support this afternoon to Malian army units to fight against terrorist elements," French President Francois Hollande told reporters. "This operation will last as long as is necessary."

Hollande said United Nations Security Council resolutions meant France was acting in accordance with international laws.

Earlier, Hollande had made it clear that France would intervene to stop any further drive southward by Islamist rebels as Malian soldiers launched a counter-offensive to wrest back a town captured by militants this week.

Mali's government appealed for urgent military aid from France on Thursday after Islamist fighters encroached further south, seizing the town of Konna in the center of the country. The rebel advance caused panic among residents in the nearby towns of Mopti and Sevare, home to a military base and airport.

"We are faced with blatant aggression that is threatening Mali's very existence. France cannot accept this," Hollande said in a New Year speech to diplomats and journalists. "We will be ready to stop the terrorists' offensive if it continues."

The U.N. Security Council in December authorized the deployment of an African-led force supported by European states.

"The French believe that France, and Europe, face a real security threat from what is happening in the Sahel," said Jakkie Cilliers, executive director of the Institute for Security Studies in South Africa.

More than two decades worth of peaceful elections had earned the Mali a reputation as a bulwark of democracy in a part of Africa better known for turmoil - an image that unraveled in a matter of weeks after a coup last March that paved the way for the Islamist rebellion.

Mali is Africa's third largest gold producer and a major cotton grower, and home to the fabled northern desert city of Timbuktu - an ancient trading hub and UNESCO World Heritage site that hosted annual music festivals before the rebellion.

REINFORCEMENTS ARRIVE

Residents had seen Western soldiers arriving late on Thursday at an airport at Sevare, 60 km (40 miles) south of Konna.

Sevare residents also reported the arrival of military helicopters and army reinforcements, which took part in the counter-attack to retake Konna overnight on Thursday in a bid to roll back the militant's southward drive.

"Helicopters have bombarded rebel positions. The operation will continue," a senior military source in Bamako said.

A source at Sevare airport also said around a dozen war planes had arrived on Friday. A spokesman for the Nigerian air force said planes had been deployed to Mali for a reconnaissance mission, not for combat.

A spokesman one of the main groups in the Islamist rebel alliance said they remained in control of Konna.

Asked whether the rebels intended to press ahead to capture Sevare and Mopti, the Ansar Dine spokesman, Sanda Ould Boumama, said: "We will make that clear in the coming days." He said any intervention by France would be evidence of an anti-Islam bias.

The French foreign ministry stepped up its security alert on Mali and parts of neighboring Mauritania and Niger on Friday, extending its red alert - the highest level - to include Bamako. France has 8 nationals in Islamist hands in the Sahara after a string of kidnappings.

"Due to the serious deterioration in the security situation in Mali, the threat of attack or abduction is growing," the ministry said in its travel alert. "It is strongly recommended that people avoid unnecessarily exposing themselves to risks."

(Additional reporting by Richard Valdmanis in Dakar, Pascal Fletcher in Johannesburg, Alexandria Sage, John Irish and Elizabeth Pineau in Paris; writing by Daniel Flynn; editing by Philippa Fletcher and Giles Elgood)

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Sprint confirms it will launch BlackBerry 10 later this year

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Dennis Tyler Finds Homes for More Than 7,000 Retired Greyhounds

Heroes Among Us

By Emily Evans and Kristen Mascia

01/10/2013 at 02:05 PM EST

Dennis Tyler and his greyhounds

Jeffery Salter

Dennis Tyler never expected to fall in love.

But after he took in a former racing greyhound named Clara Voyant in 1991, Tyler soon discovered that he'd found a constant companion in the affectionate light-brown dog, who strode beside him on daily walks and nestled against him while watching TV.

"She was a very special dog," recalls the Melbourne, Fla.-based father of two grown children. "She blended right into the family."

So when Tyler, 66, learned that many greyhounds, some injured while racing, faced the risk of being euthanized, he couldn't look the other way.

"These dogs can be the most wonderful pets," he says. "I needed to do something."

Since then the retired mechanic and his wife, Claire, 66, have found homes for more than 7,400 greyhounds through his nonprofit, Florida Greyhounds. Using donations, Tyler provides medical care for the dogs, personally matches them to a compatible family and drives them from his home state of Florida – which has the largest number of greyhound racetracks in the U.S. – to their new homes along the East Coast.

While the group briefly suspended operations last year due to new costs at track kennels in the area, Tyler says they'll be back up running later this month. His group has also started a fledgling foster dog program.

Lorie Stewart, of Satellite Beach, Fla., is one of the thousands of people who have benefitted from Tyler's efforts.

"I just adore my dogs," says Stewart, who's adopted five greyhounds through Florida Greyhounds. "They call them potato chip dogs because they're so addictive; you can't have just one!"

More Heroes Among Us:

• Hero Lawyer Gives His House to a Homeless Family for a Year

• Nine-Year-Old Cancer Victim's Happy Spirit Kept Alive Through Strangers' Donations

Know a hero? Send suggestions to heroesamongus@peoplemag.com. For more inspiring stories, read the latest issue of PEOPLE magazine

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Retooling Pap test to spot more kinds of cancer

WASHINGTON (AP) — For years, doctors have lamented that there's no Pap test for deadly ovarian cancer. Wednesday, scientists reported encouraging signs that one day, there might be.

Researchers are trying to retool the Pap, a test for cervical cancer that millions of women get, so that it could spot early signs of other gynecologic cancers, too.

How? It turns out that cells can flake off of tumors in the ovaries or the lining of the uterus, and float down to rest in the cervix, where Pap tests are performed. These cells are too rare to recognize under the microscope. But researchers from Johns Hopkins University used some sophisticated DNA testing on the Pap samples to uncover the evidence — gene mutations that show cancer is present.

In a pilot study, they analyzed Pap smears from 46 women who already were diagnosed with either ovarian or endometrial cancer. The new technique found all the endometrial cancers and 41 percent of the ovarian tumors, the team reported Wednesday in the journal Science Translational Medicine.

This is very early-stage research, and women shouldn't expect any change in their routine Paps. It will take years of additional testing to prove if the so-called PapGene technique really could work as a screening tool, used to spot cancer in women who thought they were healthy.

"Now the hard work begins," said Hopkins oncologist Dr. Luis Diaz, whose team is collecting hundreds of additional Pap samples for more study and is exploring ways to enhance the detection of ovarian cancer.

But if it ultimately pans out, "the neat part about this is, the patient won't feel anything different," and the Pap wouldn't be performed differently, Diaz added. The extra work would come in a lab.

The gene-based technique marks a new approach toward cancer screening, and specialists are watching closely.

"This is very encouraging, and it shows great potential," said American Cancer Society genetics expert Michael Melner.

"We are a long way from being able to see any impact on our patients," cautioned Dr. Shannon Westin of the University of Texas MD Anderson Cancer Center. She reviewed the research in an accompanying editorial, and said the ovarian cancer detection would need improvement if the test is to work.

But she noted that ovarian cancer has poor survival rates because it's rarely caught early. "If this screening test could identify ovarian cancer at an early stage, there would be a profound impact on patient outcomes and mortality," Westin said.

More than 22,000 U.S. women are diagnosed with ovarian cancer each year, and more than 15,000 die. Symptoms such as pain and bloating seldom are obvious until the cancer is more advanced, and numerous attempts at screening tests have failed.

Endometrial cancer affects about 47,000 women a year, and kills about 8,000. There is no screening test for it either, but most women are diagnosed early because of postmenopausal bleeding.

The Hopkins research piggybacks on one of the most successful cancer screening tools, the Pap, and a newer technology used along with it. With a standard Pap, a little brush scrapes off cells from the cervix, which are stored in a vial to examine for signs of cervical cancer. Today, many women's Paps undergo an additional DNA-based test to see if they harbor the HPV virus, which can spur cervical cancer.

So the Hopkins team, funded largely by cancer advocacy groups, decided to look for DNA evidence of other gynecologic tumors. It developed a method to rapidly screen the Pap samples for those mutations using standard genetics equipment that Diaz said wouldn't add much to the cost of a Pap-plus-HPV test. He said the technique could detect both early-stage and more advanced tumors. Importantly, tests of Paps from 14 healthy women turned up no false alarms.

The endometrial cancers may have been easier to find because cells from those tumors don't have as far to travel as ovarian cancer cells, Diaz said. Researchers will study whether inserting the Pap brush deeper, testing during different times of the menstrual cycle, or other factors might improve detection of ovarian cancer.

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Wall Street climbs on China data; S&P nears resistance

NEW YORK (Reuters) - Stocks climbed on Thursday on optimism about global growth spurred by stronger-than-expected exports in China, the world's second-biggest economy, though gains in the S&P 500 were capped at a resistance level near a 5-year high.

Financial and energy stocks were the day's top gainers in afternoon trading. The financial sector index <.gspf> rose 0.8 percent and the energy sector <.gspe> was up 0.6 percent.

The benchmark Standard & Poor's 500 index hovered near a five-year closing peak of 1,466.47. On Friday, the index had closed at its highest since December 2007.

"The market is technically right at the level of resistance, near 1,465-1,467," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.

"A solid breakthrough above the level would be the start of a next leg higher, but it looks like it is going to be difficult to break above that level for now," Frederick said, citing concerns about the corporate earnings season and impending negotiations over the U.S. debt ceiling.

By late morning, the S&P 500 had erased almost all its gains from earlier Thursday in minutes. Some traders said the dip was triggered by a trade in the options market that prompted a large amount of S&P futures to hit the market at the same time, sending the S&P 500 index down rapidly.

Data showed China's export growth rebounded sharply to a seven-month high in December, a strong finish to the year after seven straight quarters of slowdown.

The Dow Jones industrial average <.dji> was up 36.20 points, or 0.27 percent, at 13,426.71. The Standard & Poor's 500 Index <.spx> was up 5.11 points, or 0.35 percent, at 1,466.13. The Nasdaq Composite Index <.ixic> was up 0.05 points, or 0.00 percent, at 3,105.86.

In company news, shares of upscale jeweler Tiffany dropped 4.3 percent to $60.53 after it said earnings for the year through January 31 will be at the lower end of its forecast.

U.S.-traded Nokia shares jumped 18 percent to $4.42 after the Finnish handset maker said its fourth-quarter results were better than expected and that the mobile phone business achieved underlying profitability.

Herbalife Ltd stepped up its defense against activist investor Bill Ackman, stressing it was a legitimate company with a mission to improve nutrition and help public health. The stock was down 2.4 percent at $39.15.

U.S. data showed claims for unemployment benefits rose last week, though seasonal volatility made it difficult to get a clear picture of the labor market's health.

Also, U.S. wholesale inventories rose more than expected in November and sales rose by the most in more than 1-1/2 years. The market's reaction to both reports was muted.

(Editing by Bernadette Baum)

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Syria denounces peace envoy who hinted Assad must go

BEIRUT (Reuters) - Syria denounced international envoy Lakhdar Brahimi as "flagrantly biased" on Thursday, casting doubt on how long the U.N.-Arab League mediator can pursue his peace mission.

The Syrian Foreign Ministry was responding to remarks by Brahimi a day earlier in which he ruled out a role for President Bashar al-Assad in a transitional government and effectively called for the Baathist leader to quit.

"In Syria...what people are saying is that a family ruling for 40 years is a little bit too long," Brahimi told the BBC, referring to Assad, who inherited his post from his father Hafez al-Assad, who seized power in 1970 and ruled for 30 years.

"President Assad could take the lead in responding to the aspiration of his people rather than resisting it," the veteran Algerian diplomat said, hinting the Syrian leader should go.

The Foreign Ministry in Damascus said it was very surprised at Brahimi's comments, which showed "he is flagrantly biased for those who are conspiring against Syria and its people".

The ministry later said it was nevertheless still willing to work with the envoy to find a political solution to the crisis.

Brahimi has had no more success than his predecessor Kofi Annan in his quest to resolve the 21-month-old conflict in which more than 60,000 people have been killed.

British Foreign Secretary William Hague warned that violence in Syria might worsen and said the international community must "step up" its response if it does.

So far regional rivalries and divisions among big powers have stymied any concerted approach to the upheaval, one of the bloodiest to emerge from a series of revolts in the Arab world.

Russian and U.S. diplomats, who back opposing sides of the war, will meet Brahimi in Geneva on Friday.

Ahead of the meeting, Russia repeated its insistence that Assad must not be pushed from power by external forces and that his exit must not be a precondition for negotiations.

"Only the Syrians themselves can agree on a model or the further development of their country," Foreign Ministry spokesman Alexander Lukashevich said.

"MASK OF IMPARTIALITY"

Syria's al-Watan newspaper said Brahimi had removed his "mask of impartiality" to reveal his true face as a "a tool for the implementation of the policy of some Western countries".

On Sunday Assad, making his first public speech in six months, offered no concessions and said he would never talk to foes he branded terrorists and Western puppets.

As peace efforts floundered, rebels battled for a strategic air base for a second day, pursuing a civil war that had briefly receded for some Damascus residents who set aside their differences to play in a rare snowfall that blanketed the city.

For a few hours, people in the capital dropped their weapons for snowballs and traded hatred for giggles.

"Last night, for the first time in months, I heard laughter instead of shelling. Even the security forces put down their guns and helped us make a snowman," Iman, a resident of the central Shaalan neighborhood, said by Skype.

There was no respite on other battlefronts, with heavy fighting around the Taftanaz base in northwestern Syria, which insurgents are trying to capture to extend their grip on Idlib province and weaken Assad's control of the skies.

Rebels assaulted the airport's main buildings and armory using heavy guns, tanks and other weapons and appeared to have overrun half the area of the base, said Rami Abdelrahman, director of the Syrian Observatory for Human Rights, a pro-opposition group that monitors the conflict from abroad.

"Now, it's serious," he said.

The air base has been used to launch helicopter attacks in the region, and its loss would be a blow to the government's ability to defend its positions there, Abdelrahman said.

MISSILE LAUNCH

Insurgents have tried to take the base for months, but have been bolstered by the recent arrival of Islamist fighters including the al Qaeda-linked al-Nusra Front, he added.

There was no immediate government account of the fighting, which could not be confirmed independently.

Opposition forces have seized swathes of territory in northern Syria in recent months, but remain vulnerable to attack by the military's planes and helicopters - hence their strategy of trying to capture air bases such as the one at Taftanaz.

There was no word on whether the firing of a short-range ballistic missile inside Syria on Wednesday, reported by a NATO official, was linked to the fighting at Taftanaz.

NATO could not confirm the type of missile used, but the description fit the Scuds that are in the Syrian military's armory, the official added, describing the latest launch and similar ones last week as "reckless".

A NATO official said that since the start of December 2012, the alliance had detected at least 15 launches of unguided, short-range ballistic missile inside Syria.

Neither side has gained a clear military advantage in the war pitting mostly Sunni Muslim rebels against security forces dominated by Assad's minority, Shi'ite-linked Alawite sect.

The Observatory also reported fighting between rebels and troops in the Sayyida Zeinab area of Damascus, and air raids were reported in the capital's Maleiha area and eastern suburbs.

Despite some support from Sunni regional powers including Turkey, Saudi Arabia and Qatar, the rebels remain largely disorganized, fragmented and ill-equipped. Poor discipline, looting and insecurity in some insurgent-held areas have also eroded their support from civilians.

Turf wars between rebel units and with Kurdish groups have also beleaguered the armed opposition. On Thursday, a senior Islamist commander was assassinated near the border with Turkey, Syrian rebels and political opposition sources said.

Thaer al-Waqqas, northern commander of al-Farouq Brigades, had been suspected of involvement in the killing four months ago of a member of al-Nusra Front.

He was shot dead at a rebel position in the town of Sermin, a few kilometers from Turkey, the sources said.

(Additional reporting by Oliver Holmes, Mariam Karouny and Erika Solomon in Beirut, Steve Gutterman in Moscow, Khaled Yacoub Oweis in Amman and Mohammed Abbas in London; Editing by Alistair Lyon and Jason Webb)

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