Euro near two-week low, shares up on rekindled rate cut hopes

LONDON (Reuters) - The euro hovered near a two-week low and European shares rose on Friday after the European Central Bank rekindled expectations that it could again take the knife to interest rates.

Strong Chinese trade data also helped lift optimism about global growth prospects, boosting oil, copper and Asian shares, although investors booking profits before next week's Chinese new year holidays limited gains.

ECB President Mario Draghi levered the door to a rate cut back open on Thursday, saying the bank would monitor the potential downward pressure of a strengthening euro on already near-target inflation.

European share markets opened higher on the hopes lower borrowing rates would also reverse some of the 8 percent trade-weighted rise in the euro over the last six months that has began to weigh on exporters.

"We're in a 'risk-on' mode and continental Europe should continue to do well in this environment," said Cyrille Urfer, who heads up asset allocation at Swiss bank Gonet.

The pan-European FTSEurofirst 300 <.fteu3> was up 0.5 percent by 0815 GMT, though it remained on course for its second weekly loss in a row.

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were up 0.6, 0.4 and 0.3 percent respectively and U.S. stock futures pointed to a steady Wall Street start. <.l><.eu><.n/>

While Draghi said the euro's recent surge was a sign of a return of confidence, he said: "We certainly want to see whether the appreciation is sustained and will alter our risk assessment as far as price stability is concerned."

The comments went further than many analysts had expected and as European trading gathered pace the euro steadied at $1.3398 after earlier dropping to $1.33705, the lowest since January 25.

China said its exports grew 25 percent in January from a year ago, the strongest showing since April 2011 and well ahead of market expectations for a 17 percent rise, while imports also beat forecasts, surging 28.8 percent on the year.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> added 0.3 percent and Australian shares rallied 0.7 percent to 34-month highs.

"China's economic conditions are improving and the trade data confirms the continuation of a recovery trend. Not just the trade data but retail, production and investment flows clearly show that the economy bottomed out in the third quarter last year," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.

In the bond market, benchmark German Bund futures were little changed in early trade as Draghi's cautious tone on the euro zone's economy underpinned demand for low risk assets.

Investors focused on Irish bonds after benchmark 10-year yields slid to their lowest since before the start of the subprime crisis in 2007 on news Dublin had clinched a bank debt deal that will cut its borrowing needs over the next decade.

(Additional reporting by Sudip Kar-Gupta; editing by Philippa Fletcher)

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Dominant Tunisian Party Rejects Move to Contain Assassination Fallout

Anis Mili/Reuters

Tunisian protesters clashed with the riot police during a demonstration after the death of Mr. Belaid outside the Interior ministry in Tunis on Wednesday.

TUNIS — Tunisian officials moved quickly Wednesday to contain the fallout after a leading opposition figure was assassinated outside his home. They announced that they would restructure the Islamist-led government and form a national unity cabinet as thousands took to the streets in protests that security forces beat back with tear gas.

But Reuters reported on Thursday that the country’s dominant Ennahda party had rejected the plan to to dissolve the government, as proposed Wednesday by Prime Minister Hamadi Jebali.

“The prime minister did not ask the opinion of his party," Abdelhamid Jelassi, Ennahda’s vice-president was quoted as saying. “We in Ennahda believe Tunisia needs a political government now. We will continue discussions with others parties about forming a coalition government.”

The reported rejection — which was not immediately confirmed — appeared to inject a new element of political uncertainty into an already fraught situation.

The killing of the politician, Chokri Belaid, one of Tunisia’s best-known human rights defenders and a fierce critic of the ruling Islamist party, placed dangerous new strains on a society struggling to reconcile its identity as a long-vaunted bastion of Arab secularism with its new role as a proving ground for one of the region’s ascendant Islamist parties.

The explosion of popular anger, which led to the death of a police officer in the capital, posed a severe challenge to Ennahda, which came to power promising a model government that blended Islamist principles with tolerant pluralism.

Mr. Belaid was shot and killed outside his home in an upscale Tunis neighborhood as he was getting into his car on Wednesday morning. The interior minister, citing witnesses, said that two unidentified gunmen had fired on Mr. Belaid, striking him with four bullets.

The killing, which analysts said was the first confirmed political assassination here since the overthrow of the autocratic leader, Zine el-Abidine Ben Ali, was a dark turn for the country that was the birthplace of the Arab uprisings of two years ago. It resonated in countries like Egypt and Libya that are struggling to contain political violence while looking to Tunisia’s turbulent but hopeful transition as a reassuring example.

“Confronting violence, radicalism and the forces of darkness is the main priority for societies if they want freedom and democracy,” Amr Hamzawy, a member of Egypt’s main secular opposition coalition, wrote on Twitter on Wednesday. “Assassinating Chokri Belaid is warning bell in Tunisia, and in Egypt too.”

The response by Tunisian officials was being closely watched. President Moncef Marzouki cut short an overseas trip to deal with the crisis. Mr. Jebali, the prime minister, called the killing a “heinous crime against the Tunisian people, against the principles of the revolution and the values of tolerance and acceptance of the other.”

Bowing to the outrage, he said cabinet ministers would be replaced with technocrats not tied to any party until elections can be held.

The announcement, which had been expected for months, held out the promise that Tunisia might continue to avoid the political chaos that has plagued its neighbors. Since the uprising, the country has held successful elections, leading to a coalition government merging Ennahda and two center-left parties. An assembly writing the country’s constitution has circumscribed the role of Islamic law, allowing Tunisia to avoid the arguments over basic legal matters that have led to protracted unrest in Egypt.

The struggle over identity here has taken a different form, as hard-line Islamists have pressured Ennhada to take a more conservative path. Secular groups have faulted Ennahda for failing to confront the hard-liners, or for secretly supporting them. The restructuring does not completely loosen Ennahda’s hold on political power.

The killing remained a mystery on Wednesday. The authorities did not announce any arrests, saying only that witnesses said the gunmen had appeared to be no more than 30 years old. Among Mr. Belaid’s colleagues and relatives, suspicions immediately fell on the hard-line Islamists known as Salafists, some of whom have marred the transition with acts of violence, including attacks on liquor stores and Sufi mausoleums.

Monica Marks reported from Tunis, and Kareem Fahim from Cairo. Reporting was contributed by Alan Cowell from Paris, Gerry Mullany from Hong Kong, Mayy El Sheikh from Cairo, David D. Kirkpatrick from Antakya, Turkey, and Brian Knowlton from Washington.

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American Idol: It's a Guys' Night in Hollywood

TV Watch

American Idol

By Jamie Bufalino

02/06/2013 at 11:00 PM EST

From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj and Keith Urban

George Holz/FOX

Caution: Contains spoilers!

"It does feel a bit like The Hunger Games," said Keith Urban, ramping up the drama as American Idol kicked off the first day of Hollywood Week. Although producers didn't unleash any tracker jackers on the contestants, they did throw in a couple unexpected twists: This season the week started off as a guys-only competition (the girls arrive in Hollywood next week), and after surviving a round of sudden death solo sing-offs, contestants would then be put into groups from which they couldn't escape.

During the solo round, the standouts included two memorable contestants from the nationwide auditions. First up, Navy man Micah Johnson, who developed a speech impediment after suffering through a botched surgery to remove his tonsils. After a rousing rendition of Elton John's "Bennie and the Jets," Johnson was the first to get the green light to the next round.

Joining him soon after was Cuban-American Lazaro Arbos, a 21-year-old ice cream scooper from Naples, Fla., who speaks with a severe stutter but sings with ease. Although Arbos admitted to being both "scared" and "petrified," he quickly won the judges over – Nicki Minaj made her fingers into a heart-shape while he sang – with his take on the Robbie Williams hit, "Angels."

When it came time to form groups of four, the Idol producers threw a few more curveballs – such as pairing a couple of country crooners with two flamboyant (think glitter and faux fur) dudes Ryan Seacrest described as the show's "resident divas."

The result: a quartet that dubbed themselves Country Queen, which delivered a train wreck of a performance. Still, somehow three of the four made it through.

Meanwhile, Arbos's group experience also proved to be a bit of a disaster – which some of his cohorts blamed on his inability to quickly learn the lyrics and melody to the Beach Boys hit "Wouldn't It Be Nice." Although his main nemesis got the boot, a tearful Arbos got the chance to sing another day.

The day of auditions came to a close with what was possibly the most heartbreaking Idol exit ever. New York City subway singer Frankie Ford got a case of the jitters before going on stage, then proceeded to screw up the lyrics and sing off key – leaving the judges no choice but to pull the plug on his dreams. Before walking off into the night, a sobbing Ford stared into the camera and said, "I swear to God I'm coming back next year and I'm going to win."

There will be more solos Thursday (8 p.m. ET), as the judges have to whittle the 43 men left in the competition down to 20 lucky fellas.

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New whooping cough strain in US raises questions

NEW YORK (AP) — Researchers have discovered the first U.S. cases of whooping cough caused by a germ that may be resistant to the vaccine.

Health officials are looking into whether cases like the dozen found in Philadelphia might be one reason the nation just had its worst year for whooping cough in six decades. The new bug was previously reported in Japan, France and Finland.

"It's quite intriguing. It's the first time we've seen this here," said Dr. Tom Clark of the Centers for Disease Control and Prevention.

The U.S. cases are detailed in a brief report from the CDC and other researchers in Thursday's New England Journal of Medicine.

Whooping cough is a highly contagious disease that can strike people of any age but is most dangerous to children. It was once common, but cases in the U.S. dropped after a vaccine was introduced in the 1940s.

An increase in illnesses in recent years has been partially blamed on a version of the vaccine used since the 1990s, which doesn't last as long. Last year, the CDC received reports of 41,880 cases, according to a preliminary count. That included 18 deaths.

The new study suggests that the new whooping cough strain may be why more people have been getting sick. Experts don't think it's more deadly, but the shots may not work as well against it.

In a small, soon-to-be published study, French researchers found the vaccine seemed to lower the risk of severe disease from the new strain in infants. But it didn't prevent illness completely, said Nicole Guiso of the Pasteur Institute, one of the researchers.

The new germ was first identified in France, where more extensive testing is routinely done for whooping cough. The strain now accounts for 14 percent of cases there, Guiso said.

In the United States, doctors usually rely on a rapid test to help make a diagnosis. The extra lab work isn't done often enough to give health officials a good idea how common the new type is here, experts said.

"We definitely need some more information about this before we can draw any conclusions," the CDC's Clark said.

The U.S. cases were found in the past two years in patients at St. Christopher's Hospital for Children in Philadelphia. One of the study's researchers works for a subsidiary of Johnson & Johnson, which makes a version of the old whooping cough vaccine that is sold in other countries.

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JournaL: http://www.nejm.org

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Stock index futures signal mixed open

PARIS (Reuters) - Stock index futures pointed to a mixed open on Wall Street on Thursday. Futures for the S&P 500 were down 0.05 percent, Dow Jones futures down 0.07 percent and Nasdaq 100 futures up 0.05 percent at 0933 GMT.

European shares steadied on Thursday as investors awaited the European Central Bank's policy meeting later in the day and President Mario Draghi's views on the region's growth prospects.

Draghi faces a grilling over the euro's sharp rise and his connection to an Italian banking scandal at the ECB meeting where interest rates are almost certain to be unchanged.

Visa Inc's quarterly profit beat analysts' estimates for the ninth consecutive quarter.

Rupert Murdoch's News Corp on Wednesday reported higher quarterly revenue and profit on strong growth at its cable assets including its Regional Sports and FX networks.

Boeing Co is working on battery design changes that would minimize fire risks on its grounded 787 Dreamliner and could have the passenger jet flying again as soon as March, the Wall Street Journal reported.

Green Mountain Coffee Roasters Inc forecast sales growth for the current quarter that is slightly lower than analysts expected as retailers work through unsold inventory of its products after a slower-than-expected holiday season.

Hon Hai Precision Industry Co Ltd , the main manufacturer of Apple Inc products, said on Thursday consolidated January sales dropped 8.19 percent from a year earlier.

A U.S. judge threw out a lawsuit from South Korea's Woori Bank accusing Bank of America Corp's Merrill Lynch unit of misleading investors about the riskiness of collateralized debt obligations, saying the suit had missed a deadline under South Korean law.

CVS Caremark Corp said on Wednesday it bought Drogaria Onofre, Brazil's eighth-largest drugstore chain last week, marking the first time the drugstore and pharmacy services company has ventured outside the United States.

Michael Dell and his investment firm are putting up $750 million in cash toward the $24.4 billion purchase of Dell Inc to help bankroll the largest private equity-backed buyout since the financial crisis.

Yelp Inc posted a bigger-than-expected quarterly loss and its shares fell 6 percent in after-market trading as the consumer review website faces competition from Facebook Inc .

Chipmaker TriQuint Semiconductor Inc forecast current-quarter results below analysts' estimates after some orders were pulled into the fourth quarter, sending its shares down 8 percent.

Allstate Corp's quarterly profit fell 45 percent on losses from superstorm Sandy, but the home and auto insurer said it has paid out about 95 percent of Sandy claims and is seeing rate increases across businesses.

Herbalife Inc disclosed more information on Wednesday about how much its U.S. distributors earn, looking to provide more clarity as it defends its business model from critics like billionaire hedge fund manager Bill Ackman.

On the macro front, investors awaited weekly jobless claims, due at 1330 GMT, as well as quarterly data on productivity and unit labor costs, also due at 1330 GMT.

Among the companies set to report results on Thursday feature Coca-Cola Enterprises , Hasbro, Inc. , Philip Morris International and Sprint Nextel Corp. .

U.S. stocks ended mostly flat on Wednesday, taking another pause in the recent rally that has driven the S&P 500 to five-year highs, as transportation and technology shares lost ground.

The Dow Jones industrial average <.dji> was up 7.22 points, or 0.05 percent, at 13,986.52. The Standard & Poor's 500 Index <.spx> was up 0.83 points, or 0.05 percent, at 1,512.12. The Nasdaq Composite Index <.ixic> was down 3.10 points, or 0.10 percent, at 3,168.48.

(Reporting by Blaise Robinson; editing by Stephen Nisbet)

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New Skirmishes Reported in Mali as France Vows to Exit

PARIS — Amid reports of continued skirmishes with Islamist extremists driven out of the main settlements of northern Mali, France renewed a promise on Wednesday that its soldiers would begin returning home within weeks, handing over to West African and Malian units charged with keeping the vast desert area under government control.

But French officials acknowledged that, despite their claimed military successes so far, new hostilities had erupted on Tuesday near the northern town of Gao between what were depicted as remnants of the insurgents and French and Malian forces.

“From the moment our forces, supported by Malian forces, began missions and patrols around the towns which we have taken, we have encountered residual jihadist groups which fight,” Defense Minister Jean-Yves Le Drian said in a radio interview.

“We will seek them out,” he said, pledging to bring security to the recaptured areas. “Yesterday there was some rocket fire from residual jihadist groups in the Gao region” of northern Mali, he said, without going into detail.

In an interview published in the Metro newspaper, Foreign Minister Laurent Fabius said that, starting in March, “the number of French troops should fall.

“France has no intention of remaining in Mali,” he said. “It is the Africans and the Malians themselves to guarantee the security, the territorial integrity and the sovereignty of the country.”

The Defense Minister, Mr. Le Drian, said the French deployment for its lightning offensive launched last month had now reached 4,000 soldiers “and we won’t go beyond that.”

The deployment is already far higher than the 2,500 soldiers France initially projected and has been boosted by the arrival during the weekend of 500 more soldiers.

But the French officials seem anxious to persuade their citizens that the country’s armed forces are not being pulled inexorably into a perilous long-term commitment risking higher casualties.

“The progressive transfer from the French military presence to the African military presence can be made relatively quickly,” he said. “In several weeks, we will be able to begin to reduce our deployment.”

France intervened after Islamist forces who had controlled northern Mali for months began a sudden drive to the south almost a month ago. After halting the rebel advance with airstrikes, France sent in ground troops who advanced along with Malian units but met little apparent resistance as the insurgents melted back into their hide-outs in the rugged northeast of the country.

But the latest reporting of skirmishes near Gao seemed to suggest that the insurgents have not completely withdrawn.

The main town in that region is Kidal, now under the control of French and Chadian forces.

In a first rough tally of casualties on Tuesday, Mr. Le Drian said the French intervention had killed “several hundred” insurgents, both in airstrikes and in “direct combat” in two towns in the center and north of the country — Konna and Gao.

France says it lost one member of its armed forced — a helicopter pilot — while Mali has said 11 of its soldiers were killed and 60 wounded in the fighting at Konna last month.

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Kim Kardashian's Pregnancy Is No Reason to Speed Divorce, says Kris Humphries

By Mike Fleeman

02/05/2013 at 09:20 PM EST

Kris Humphries and Kim Kardashian

Seth Browarnik/StarTraks

Kim Kardashian's baby is not even born yet and already is being drawn into mama's divorce.

Kardashian, carrying boyfriend Kanye West's child, has bristled at what she sees as stall tactics by estranged husband Kris Humphries to close the legal books on their 72-day marriage.

But Humphries's lawyer Marshall W. Waller writes that "what is really going on here is that an 'urgency' in the form of an apparently unplanned pregnancy" is being used by Kardashian as "an opportunity to gain a litigation advantage (to) prematurely set this matter for trial."

He adds parenthetically that the pregnancy is "something (Humphries) had nothing to do with."

Waller explains his reasoning for calling the pregnancy as unplanned: "Indeed, why would (she) plan to get pregnant in the midst of divorce proceedings?"

Kardashian, herself, recently addressed the timing.

"God brings you things at a time when you least expect it," she said last month. "I'm such a planner and this was just meant to be. What am I going to? Wait years to get a divorce? I'd love one. It's a process."

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Critics seek to delay NYC sugary drinks size limit

NEW YORK (AP) — Opponents are pressing to delay enforcement of the city's novel plan to crack down on supersized, sugary drinks, saying businesses shouldn't have to spend millions of dollars to comply until a court rules on whether the measure is legal.

With the rule set to take effect March 12, beverage industry, restaurant and other business groups have asked a judge to put it on hold at least until there's a ruling on their lawsuit seeking to block it altogether. The measure would bar many eateries from selling high-sugar drinks in cups or containers bigger than 16 ounces.

"It would be a tremendous waste of expense, time, and effort for our members to incur all of the harm and costs associated with the ban if this court decides that the ban is illegal," Chong Sik Le, president of the New York Korean-American Grocers Association, said in court papers filed Friday.

City lawyers are fighting the lawsuit and oppose postponing the restriction, which the city Board of Health approved in September. They said Tuesday they expect to prevail.

"The obesity epidemic kills nearly 6,000 New Yorkers each year. We see no reason to delay the Board of Health's reasonable and legal actions to combat this major, growing problem," Mark Muschenheim, a city attorney, said in a statement.

Another city lawyer, Thomas Merrill, has said officials believe businesses have had enough time to get ready for the new rule. He has noted that the city doesn't plan to seek fines until June.

Mayor Michael Bloomberg and other city officials see the first-of-its-kind limit as a coup for public health. The city's obesity rate is rising, and studies have linked sugary drinks to weight gain, they note.

"This is the biggest step a city has taken to curb obesity," Bloomberg said when the measure passed.

Soda makers and other critics view the rule as an unwarranted intrusion into people's dietary choices and an unfair, uneven burden on business. The restriction won't apply at supermarkets and many convenience stores because the city doesn't regulate them.

While the dispute plays out in court, "the impacted businesses would like some more certainty on when and how they might need to adjust operations," American Beverage Industry spokesman Christopher Gindlesperger said Tuesday.

Those adjustments are expected to cost the association's members about $600,000 in labeling and other expenses for bottles, Vice President Mike Redman said in court papers. Reconfiguring "16-ounce" cups that are actually made slightly bigger, to leave room at the top, is expected to take cup manufacturers three months to a year and cost them anywhere from more than $100,000 to several millions of dollars, Foodservice Packaging Institute President Lynn Dyer said in court documents.

Movie theaters, meanwhile, are concerned because beverages account for more than 20 percent of their overall profits and about 98 percent of soda sales are in containers greater than 16 ounces, according to Robert Sunshine, executive director of the National Association of Theatre Owners of New York State.

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Follow Jennifer Peltz at http://twitter.com/jennpeltz

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Stock index futures point to slightly higher Wall Street open

LONDON (Reuters) - Stock index futures pointed to a slightly higher open on Wall Street on Wednesday, with futures for the S&P 500 up 0.1 percent at 5.06 a.m EST.

* Dow Jones futures added 0.3 percent while contracts on the Nasdaq 100 futures rose 0.2 percent.

* Visa , the world's largest credit and debit card network, is expected to report earnings per share of $1.79 for its first quarter, up 1.49 from a year earlier. Smaller rival MasterCard recently reported better-than-expected results but said its revenue growth could decelerate in the first half of the year due to economic uncertainty.

* Media groups Time Warner Inc. and News Corp. were also among U.S. companies due to report results.

* Liberty Global won't change Virgin Media's strategy on network roll-out and content if its deal to buy the British cable group goes through, Liberty's chief executive said on Wednesday.

* Walt Disney Co beat estimates in quarterly adjusted earnings and said it expects the next few quarters to be better on a stronger lineup of movies and rising attendance at its theme parks. The results helped lift the media giant's shares 1.7 percent in after-hours trading.

* Take-Two Interactive Software Inc reported higher revenue and earnings in the third quarter that blew past Wall Street expectations, as the video games publisher gears up to launch a new title from its mega-blockbuster "Grand Theft Auto" series. Take-Two shares were up about 7 percent in after-hours trading after closing at $12.66 on the Nasdaq.

* Online gaming firm Zynga Inc reported an unexpected fourth-quarter profit after embracing steep cost cuts and shifting forward deferred revenue. The results were a relief to investors who had feared the company might be in free fall and Zynga's shares jumped 7 percent to $2.93 in after-hours trade.

* Nasdaq OMX Group Inc is in preliminary talks with U.S. securities regulators over a possible settlement for the glitch-ridden stock market debut of social networking site Facebook Inc , the Wall Street Journal reported on Tuesday, citing people with knowledge of the discussions.

* Online photo-sharing service provider Shutterfly Inc's results beat analysts' estimates in the traditionally strong fourth quarter on higher demand during the holiday season, particularly in its enterprise unit. The company's shares rose 13 percent in after-hours trading.

* European stocks were a touch higher on Wednesday, with shares in the world's largest steelmaker, ArcelorMittal , rising after its upbeat outlook reassured investors.

* Japan's Nikkei average surged 3.8 percent to its highest close since October 2008 after the yen fell sharply on bets the early exit of the central bank governor would open the way for a successor who pursues aggressive monetary easing.

* The Dow Jones industrial average <.dji> closed 99.22 points, or 0.71 percent, higher at 13,979.30 on Tuesday. The Standard & Poor's 500 Index <.spx> was up 15.58 points, or 1.04 percent, at 1,511.29. The Nasdaq Composite Index <.ixic> was up 40.41 points, or 1.29 percent, at 3,171.58.

(Reporting By Francesco Canepa; Editing by Susan Fenton)

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Ahmadinejad’s Ally Arrested in as Fight With Family Grows

TEHRAN — Iranian judicial authorities arrested a protégé of President Mahmoud Ahmadinejad on Monday, the latest round in an escalating power struggle between Iran’s elected leader and the country’s most influential political family.

The Tehran prosecutor’s Web site announced the arrest of Saeed Mortazavi late Monday night, although it gave no official reason for the action.

The move follows the disclosure of a secret film by President Ahmadinejad on Monday in parliament, in which Mr. Mortazavi could be seen purportedly discussing a fraudulent business deal proposed by Fazel Larijani, 49, the youngest of the five brothers of the politically influential Larijani family.

The president’s disclosure of the film of the meeting caused an uproar in Iran, where allegations of corruption are usually made behind closed doors.

The ensuing arrest of Mr. Mortazavi, the president’s ally, heightens the intensifying stakes in the battle. Mr. Mortazavi has been controversial figure, known for closing dozens of reformist newspapers while he was a judge. The Canadian government has implicated him in the death of an Iran-Canadian photographer in 2003. And in 2010 a parliamentary report concluded that Mr. Mortazavi, while working as a prosecutor, shared responsibility for the death of three protesters in a police prison facility.

Most recently lawmakers forced his dismissal as the head of the vast Social Welfare Organization, only to have President Ahmadinejad reinstate him as caretaker.

Traveling to Egypt on the first visit of an Iranian president to that country since the 1979 Islamic revolution, Mr. Ahmadinejad condemned the arrest of Mr. Mortazavi, saying he had discovered a crime, but was now being punished.

“The judiciary belongs to the nation, and is not a family organization,” he told the state Islamic Republic News Agency on Tuesday, an apparent swipe at the Larijani family.

President Ahmadinejad, who is embroiled in political fights with both the parliament and the judiciary, has long criticized what he calls the Larijani family’s grip on power in Iran. The Larijanis counter that they have all been appointed to their positions through normal procedures.

The Larijani family is well known in Iran for the high positions they hold. One of the brothers, Ali Larijani, 55, is the head of parliament and former top nuclear negotiator, another, Sadegh Larijani, 52, is an ayatollah who heads Iran’s judiciary. The oldest brother, Mohammad-Javad Larijani, 61, is a Berkeley-educated mathematician, and one of the main theoreticians of the Islamic Republic’s political ideology.

Ali Larijani is expected to run in upcoming presidential elections scheduled for June 14, for which president Ahmadinejad is expected to support one of his own close aides as a candidate. The accusations against the Larijani family seem aimed at portraying them and their supporters as corrupt as elections near.

Mr. Mortazavi’s arrest, directly following Mr. Ahmadinejad’s disclosure of the film, is remarkable given that many politicians had called for Mr. Mortazavi’s arrest over the prison deaths, an incident harshly condemned by the country’s supreme leader, Ayatollah Ali Khamenei.

“A person was attempting to do trades that seem illegal,” Mr. Mortazavi told the Iranian Student News Agency on Monday before his arrest. “I merely reported this case to the government.”

On Sunday Ali Larijani said in parliament that he had no problem with the accusations, saying it reflected more on the president’s conduct. “They only show his true character,” the semiofficial Fars News Agency quoted him as saying.

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