Bipartisan efforts on Capitol Hill to tighten financial regulation ground to a halt in the Senate on Friday, casting one of the top domestiAfter months of public debate and closed-door talks, Senate Banking Committee Chairman Christopher Dodd, the Democrats' chief negotiator, said he has been unable to agree on a bill with his Republican counterpart, Senator Richard Shelby.

"We have reached an impasse," Dodd said, adding he is drafting new legislation to be considered later this month. "While I still hope that we will ultimately have a consensus package, it is time to move the process forward."

The situation leaves Democrats to proceed alone on an initiative of international significance since the 2008 financial crisis, while painting Republicans -- allied with banks and Wall Street -- into an uncomfortable obstructionist corner.

At stake is President Barack Obama's push for tighter oversight of the politically unpopular financial industry -- an initiative that rose to the top of his agenda after an embarrassing election defeat in January for Democrats in Massachusetts.

The Senate impasse comes as finance ministers for the Group of Seven rich nations meet this weekend in Canada, with financial regulation high on their agenda.

The main obstacle to Senate agreement is Obama's proposal to create a Consumer Financial Protection Agency (CFPA) to protect Americans from abusive mortgages and credit cards. Banks oppose the agency as a threat to their profitability.

Republicans say the CFPA would be a costly new layer of government bureaucracy while Democrats say it is needed because existing agencies failed to enforce consumer protection laws already on the books, contributing to the financial crisis.

FRANK BACKS DODD

Democratic Representative Barney Frank said that by declaring an impasse, Dodd will speed movement toward a vote and force the hand of Republicans who have opposed reforms for more than a year, in line with bank lobbyists.

"Chris is forcing the pace here. He gave them plenty of time, but at some point, people are going to have to vote on this. It's going to be a test of the Republicans," said Frank, the chairman of the House of Representatives Financial Services Committee, in an interview with Reuters on Friday.

In addition to the CFPA, Democrats want a new regulator to police "systemic risk" in the financial system, new procedures for dealing with large financial firms in distress and new protections for investors and financial consumers.

Shelby said in a statement he was willing to work with Democrats, but added that some topics were non-negotiable, such as the CFPA, which would strip existing bank supervisory agencies of their consumer protection responsibilities.

"I fully support enhancing both consumer protection and safety and soundness regulation," he said. "I will not support a bill that enhances one at the expense of the other, however."

Elizabeth Warren, a Harvard Law School professor seen as frontrunner to head the CFPA, told Reuters the breakdown of negotiations was "a testament to the power of Wall Street."

"Even after 16 months of pain, a few basic, common sense safety rules are somehow controversial," said Warren, who now chairs a watchdog panel overseeing the $700 billion financial bailout program established during the waning days of the Bush administration.

Dodd said that some bipartisan agreements are close to being reached and he hopes to include them in a new proposal.

Republican Senator Bob Corker said he was "disappointed" with the Dodd-Shelby impasse, but added he and Democratic Senator Mark Warner were close to a bipartisan approach to systemic risk regulation and dealing with big troubled firms.

Republican Senator Judd Gregg said he remains committed to working with Dodd, Shelby and Senator Jack Reed with whom he has had "constructive dialogue" on derivatives market reform.

FRANK SEES BILL BY SUMMER

Frank said he is still confident there will be a House-Senate conference before summer to agree on a single bill to send to Obama. "What Senator Dodd is doing is perfectly reasonable on all fronts," Frank said.

The House in December approved a bill calling for the biggest financial regulatory changes since the Great Depression. Lobbyists for banks and Wall Street firms fought the bill for months and all House Republicans voted against it.

The Senate has been debating the matter for more than a year. While Republicans have conceded that regulatory changes are needed, they have not offered a comprehensive strategy of their own and have consistently opposed Democratic measures.

As the debate has worn on, public anger over bailouts of financial firms, and big executive bonuses, has grown. As November elections near, Democrats are seeking to portray Republicans as obstacles to reform and allies of Wall Street.

Democrats suffered a blow in January with the loss of a special Senate election in Massachusetts. That reduced their voting bloc in the Senate by one, making passage of a financial reform bill dependent upon winning some Republican support.

Neal Wolin, U.S. Treasury Department Deputy Secretary, said in a statement: "Enacting comprehensive financial reform remains an urgent priority and we believe it is important that the process move forward."
c policy priorities of the Obama administration in a stark political light.

Wind-whipped snow eddies dance across the aptly named Road to Nowhere on the outskirts of Arctic Iqaluit, and the mood is definitely mixed as locals await finance ministers from the world's rich nations."As far as I'm concerned it's a PR stunt for you guys," one man said dismissively outside North Mart, one of two large food stores in the northern Canadian town of 6,000. "They won't be leaving no money here."

It is an unusual place to bring finance ministers and central bank chiefs from Canada, Britain, the United States, France, Germany, Italy and Japan and it's true they won't have much time to shop. Most arrive on Friday ahead of an opening dinner, and they will be gone by Saturday night after a working session that ends by early afternoon.

But some locals are glad to see the visitors, if only because they hope a trip up north -- Iqaluit is only 300 km (200 miles south of the Arctic Circle -- will help the outside world understand northern life better.

Mathew Nuqingaq, a local artist and goldsmith dressed in a hooded sealskin coat against temperatures that hover near -15 degrees Celsius (zero degrees Fahrenheit) before the biting wind is taken into account, said he was pleased to see Iqaluit get some attention.

"It's good for business and it's good for them to see how we live up here," he said as snowmobiles roared by on snow-packed streets shared with pickup trucks, vans and heavy snow-removal machinery that arrives by sea during the summer.

"I don't really follow all the issues that they talk about but I know that what they do can affect us and affect everyone else around the world, including right here in the Arctic and that's a really important issue to us," Nuqingac said. He hoped the visitors will take away some appreciation of a native culture that includes hunting for whales, seals and caribou.

"People don't understand the environment and how we live off the land, so people make assumptions that we area dying culture and we have to sustain that culture," he said. "We need the animals, the polar bears and everything else that is native here."

From the outskirts, along the Road to Nowhere, the view is of a surprisingly tidy town spread along Frobisher Bay. It is an endless vista of white, with no defining line to show where Baffin Island meets the ice-covered Arctic Ocean.

Ironically, that may help explain why the meeting is taking place in Iqaluit.

"I think Mr. Harper (Canadian Prime Minister Stephen Harper) wants to put his feet on the Arctic and say this is Canadian territory," said cab driver Daniel Hillman.

"I think that is a good move too, as well as the chance for people to see the traditional life here and see that when people go hunting for seals they use all the meat, they use everything and there is no waste."

A proposed European ban on seal products, even though aimed at the annual East Coast hunt and not intended to apply to products from the Inuit, is a particular sore point.

"Europeans don't understand that Inuit style is to live with that because we don't have anything else," Hillman said. "We don't even have trees, we don't have anything else."

Palestinian President Mahmoud Abbas called again on Wednesday for a halt to Israeli settlement building before he would resume talks with Israel, accusing it of trying to scupper Palestinian statehood.Addressing supporters of his Fatah party in Ramallah on the fifth anniversary of the death of his predecessor Yasser Arafat, Abbas said U.N. resolutions called for there to be a "clear framework" for talks to end more than 60 years of conflict.
"We cannot go to negotiations without a framework. And we say the framework is U.N. resolutions, meaning a return to the 1967 borders," Abbas said. "What's new in this demand?
"Also, we want a full stop to settlements, including natural growth and in Jerusalem," the 74-year-old leader said.
The Palestinian leader told the crowd he did not want to go into his desire not to seek a second term as president in a January election.
"On this occasion, I don't want to talk again about my wish not to run in the upcoming elections," Abbas said.
"As I said in my speech, there will be other decisions ... that I will take in light of coming developments," he said, referring to his announcement last week that he would not seek re-election.
Abbas said resuming negotiations required the Israeli government's commitment to the framework of the peace process, which included halting settlement activity.
"Without this, I will not agree," he told supporters.
He accused Israel of trying to thwart the internationally backed "two-state solution" for the creation of a Palestinian state alongside Israel.
JANUARY VOTE UNLIKELY
Israel occupied the West Bank, Gaza Strip and East Jerusalem in 1967. The Palestinians want their own state in the two main territories, with Jerusalem as its capital.
Israeli Prime Minister Benjamin Netanyahu has ruled out going beyond a partial limitation on Jewish settlement building in areas of the occupied West Bank not annexed by Israel to its Jerusalem municipality.
During a visit to Jerusalem earlier this month, U.S. Secretary of State Hillary Clinton praised Netanyahu's offer of "restraint" on settlements without repeating earlier U.S. calls for a freeze.
President Barack Obama has increased pressure on Abbas in recent weeks to resume negotiations, suspended a year ago, without waiting for further Israeli limitations on settlement.
Abbas rejects that approach and aides say his disenchantment with the apparent shift in U.S. policy over settlements was behind his announcement last week that he would prefer not to stand in a presidential election he has called for January.
Many analysts see the elections and the threat to quit as part of a negotiating tactic on the part of Abbas.
His Islamist rivals Hamas, who control the Gaza Strip, have ruled out holding elections there, leading analysts to conclude that a vote in January is unlikely.
Abbas told supporters he still had his hand extended to Hamas, offering reconciliation after the violent schism that split the Palestinians in 2007, and he urged his rivals to sign an Egyptian proposal to end their division.
"We have agreed to the Egyptian document and we call upon Hamas to accept it without procrastination," he said. "Our hand is extended for reconciliation."
(Additional reporting by Nidal al-Mughrabi in Gaza and Ali Sawafta in Ramallah; editing by Alastair Macdonald and Douglas Hamilton)

Cambodia has rejected a request for the extradition of former Thai Prime Minister Thaksin Shinawatra, who is now visiting the Southeast Asian nation.
Thailand's former Prime Minister Thaksin Shinawatra, left, sits with Cambodian Prime Minister Hun Sen during meeting in Takhmua, Kandal province, 11 Nov 2009 On Wednesday, Thai diplomats presented Cambodian officials with a request to detain and extradite Mr. Thaksin. He arrived in Cambodia on Tuesday, where he has been appointed economic adviser to Cambodian Prime Minister Hun Sen.
Cambodia responded with a diplomatic note rejecting the request.
Mr. Thaksin fled Thailand more than a year ago to avoid a two-year jail sentence for corruption.
The Cambodian government has said it considers Mr. Thaksin's conviction to be politically motivated.
In response to Cambodia's decision, the Thai government has threatened tear up its extradition treaty with Cambodia and to review other joint agreements if Mr. Thaksin is not sent back.
Relations between the two neighbors have been strained for more than a year because of a territorial dispute.
There are concerns that soured relations between the two neighbors could spill over to a Association of Southeast Asian Nations meeting that is being held in Singapore on the sidelines of the Asia Pacific Economic Cooperation forum.
On Thursday, Thaksin is scheduled to deliver a speech to 300 Cambodian economic experts. Cambodian officials have said he will stay in the country for two or three days but is not intending to live there.
Following Mr. Thaksin's appointment to the Cambodian government, both Thailand and Cambodia recalled their ambassadors.

During his tenure as Thai prime minister, he was accused of corruption and later convicted of allowing his wife to buy state land at a discount price. In his sole season in charge of Manchester City the club recorded a loss of nearly £30m. But now Thaksin Shinawatra has a new job – as an economic adviser to the Cambodian government.
Cambodia announced that the former Thai prime minister – who last year was sentenced in absentia to two years' imprisonment in his home country – will serve as an adviser on economic matters to both its government and prime minister, in a move that has immediately raised tensions in Thailand.
Thai officials said today that the country would recall its ambassador in Cambodia and "review all of the agreements" between the two countries following the announcement of Shinawatra's appointment yesterday.
State television in Cambodia confirmed last night that King Norodom Sihamoni had officially approved Shinawatra to take up his new role. The former Manchester City chairman, who was convicted of violating a conflict of interest law in 2008, was ousted as Thai prime minister in 2006 in a military coup. He has been living in self-imposed exile ever since.
Shinawatra is still a deeply divisive figure in Thailand, where officials claim he is trying to undermine the current government to regain power. And Chavanont Intarakomalsut, a secretary to the Thai foreign minister, confirmed that the country would recall its ambassador from Cambodia "to express our dissatisfaction" with the appointment.
"We will also review all of the agreements between the two countries along with any other cooperation with them," he said.
Cambodia's seeming adoption of Shinawatra represents the most severe diplomatic action so far amid ongoing tensions with Thailand. The two countries have been involved in a series of small but sometimes deadly skirmishes over the demarcation of their border in recent months.
Hun Sen, the Cambodian prime minister, angered his Thai counterpart, Abhisit Vejjajiva, ahead of a summit meeting of Asian leaders in Thailand last month by declaring that Shinawatra was welcome to take refuge in Cambodia. Thailand responded by saying it would seek to extradite Shinawatra if he went to Cambodia, who countered that such a request would be rejected, as Shinwatra's prosecution and conviction had been politically motivated.
His supporters in Thailand claim the country's political elite is ignoring the fact Shinawatra was twice democratically elected because it feels its own privileges are threatened.
The new Cambodian economic adviser, who purchased Manchester City for £81.6m in 2007, made his fortune in telecommunications before entering politics in 1994. He was elected prime minister in 2001 and served for five years before being deposed.
Shinawatra – whose wife, Pojaman, was sentenced in absentia to three years in jail for tax fraud in 2008 – had his UK visa revoked in November last year.

BANGKOK - THAILAND said on Friday it would tear up an oil and gas exploration deal with Cambodia, stoking a row over Phnom Penh's naming of fugitive former Thai premier Thaksin Shinawatra as an economics adviser.
The government in Bangkok also warned that it could seal the border between the two countries, one day after the neighbours both recalled their respective ambassadors due to the dispute over the appointment of Thaksin.
Thai Foreign Minister Kasit Piromya said Bangkok had decided to cancel a 2001 agreement to jointly develop a disputed area in the Gulf of Thailand which was signed during Thaksin's time in power. Twice-elected Thaksin was ousted in a coup in 2006 and had close relations with Cambodian Prime Minister Hun Sen during his six years in power. Thaksin is now living abroad to avoid a two-year jail term for corruption.
'The Foreign Ministry has decided to terminate the memorandum of understanding between Thailand and Cambodia to develop the overlapping area which was signed by the Thaksin government,' Mr Kasit said.
Mr Kasit said the oil and gas exploration deal for a 26,000 sq km area had made no progress in the last eight years and he would propose to the cabinet on Tuesday that it should be scrapped.
'The ministry believes that the appointment of Thaksin directly affects the agreement as he was fully aware of Thailand's position in dealing with Cambodia,' he told reporters by telephone from a regional summit in Tokyo. -- AFP

BANGKOK - THAILAND'S fugitive former prime minister Thaksin Shinawatra's appointment earlier this week by Cambodia's mercurial Prime Minister Hun Sen has jangled nerves in the Thai capital and entangled both countries in a diplomatic brawl that prompted Thailand first and then Cambodia to recall their ambassadors on Thursday.
Analysts say Thaksin's latest move could be the launchpad for a political comeback.
'Thaksin is on a new offensive. This is a calculated campaign to undermine this government and to change governments,' said Thitinan Pongsudhirak, a political science professor at Bangkok's Chulalongkorn University. 'He wants to retake what he sees as his legitimate right, which is to have another election that he believes he will win.'
For the government of Prime Minister Abhisit Vejjajiva, Cambodia's action is a slap in the face it feels compelled to respond to. It called the appointment an 'interference in Thailand's domestic affairs.'
From cyberspace, Thaksin tweeted to his 40,000 Twitter followers that Abhisit's recall of the Thai ambassador was a 'childish overreaction', and tweeted in a seperate message: 'I'm asking permission from all Thai people to advise the Cambodian government ... until I have a chance to serve you again.'
Current Prime Minister Abhisit faces the challenge of how to calm the political maelstrom around Thaksin. 'Thailand is now in the international spotlight and its leader has been discredited,' said Sompop Manarungsan, a political economist at Chulalongkorn University. 'The strategy Thaksin is using, I call it 'crashing.' He is destroying everything in his path to reach his goal.' -- AP

The Cambodian Government on Wednesday revealed that Thai former Prime Minister Thaksin Sinawatra was appointed Cambodian Prime Minister Hun Sen’s economic advisor on October 27. “Thaksin was really appointed as the Premier Hun Sen’s economic advisor done on October 27 by King Norodom Sihamoni,” Keo Ramy, secretary of state of the Council of Ministers (CoM), told DAP News Cambodia. The appointment as economic advisor comes after Hun Sen declared he would welcome Thaksin if he wishes to enter Cambodia. Bangkok leaders retorted angrily, threatening to extradite Thaksin. Cambodia said it would block any such extraditionHun Sen has said that he will offer a new house in Cambodia to Thaksin if he wants to pay a visit to Cambodia. The premier’s remarks followed a visit from former Thai Prime Minister Gen. Chavalit Yongchaiyuth, who is very close to Thaksin and visited Cambodia. However, Cambodia’s cozying up to Thaksin has raised the hackles of some Thais. Suthep, a Thai deputy prime minister, noted Cambodia and Thailand have an extradition agreement, which he said will be enforced to apprehend Thaksin and return him to Thailand to serve a two-year jail term.“I am not surprised about friendship between Hun Sen and Thaksin but Thailand will make the extradition request if Thaksin is provided with a permanent shelter in Cambodia,” Suthep told the Nation. Thaksin thanked Cambodia’s PM Hun Sen in his twitter feed for welcoming him to the country and having offering to build a home for him.“I have to express deepest thanks to Prime Minister Hun Sen for saying in public that I am his friend. I also would like to thank him for arranging me a house,” Thaksin said on twitter. Gen. Chavalit Yongchaiyuth, leader-in-waiting of Thailand’s opposition Puea Thai Party, has already visited Phnom Penh at the invitation of Cambodian Prime Minister Hun Sen.

Prof. Aaron J. Ciechanover, a 2004 Nobel Laureate for Chemistry and a distinguished research rrofessor at the Faculty of Medicine of the Techno Israel Institute of Technology in Haifa and a Member of the Advisory Board of the International Peace Foundation, will give a speech for peace at the University of Cambodia (UC) today. The keynote speech and dialogue at UC in Phnom Penh begins at 2 pm, a UC official said yesterday. According to the schedule, Ciechanover planned to deliver his speech on November 4 but was delayed. On Friday, Nove-mber 6, 2009 at 2 pm, he will have public dialogue with researchers at the Institute of Technology of Cambodia in cooperation with the Royal University of Phnom Penh, a press release said. Ciechanover here is to promote a culture of peace and share experience with Cambodian students and other officials. Aaron Ciechanover was Born in Haifa, Israel and received his Masters of Science in 1970 and his M.D. in 1975 from the Hadassah Medical School of the Hebrew University in Jerusalem. He received his doctorate in medicine in 1981 from the Technion and has been a Distinguished Research Professor at the Center for Cancer and Vascular Biology and the Director of the Rappaport Family Institute for Research in Medical Sciences at the Technion. In 2004 he shared the Nobel Prize for Chemistry with Professor Avram Hershko and Professor Irwin Rose for the discovery of ubiquitin-mediated protein degradation, a mechanism by which the cells of most living organisms cull unwanted proteins. Ciechanover, Avram Hershko and Irwin Rose at the beginning of the 1980s discovered one of the cell’s most important cyclical processes, regulated protein degradation. For this they were rewarded with the Nobel Prize for Chemistry.