Periscope

SYRIA
A Mystery Deepens

American intelligence analysts aren't sure what to make of an apparent terrorist attack last week in the diplomatic quarter of the Syrian capital, Damascus. Some anti-Syrian hard-liners in Congress suggest that Syrian security forces staged the attack so President Bashar Assad could show the White House he was curbing terrorism. (According to reports, two or three assailants died in the attack.) Under a new law, President George W. Bush is supposed to impose economic sanctions on Syria soon unless he is convinced that Damascus is serious about shutting down Syria-based terrorist groups.

The Assad government, desperate to avoid U.S. sanctions, has been trying to convince Washington that it is indeed taking on the militants. (The prevailing theory in D.C. is that the Syrians may have tried to mount a crackdown against local jihadis, who then struck back.) U.S. officials say the Syrians made a recent appeal to CIA Director George Tenet, whose agency got considerable help from Syria while investigating Qaeda cells after 9/11. But sources say Tenet couldn't promise the forestalling of sanctions. Syria's commitment against terrorism was called into question by authorities in Jordan, who recently released detailed evidence about a major bombing plot against Jordanian and U.S. targets in Amman; the plotters allegedly got critical support from cohorts in Syria.
--Mark Hosenball

GLOBAL BUZZ
THE REPORT CARD FROM REFORM SCHOOL EDITION

Reform may fare best in places where it looks least likely. Georgia's Western-backed leader, on the other hand, is acting more like a hard-liner by the day.

India + Exit polls have the BJP looking weak and the markets jittery. Sure, the coalition will bicker, but all sides agree on key reforms. They'll pass--so will the jitters.

Brazil + Lula's under fierce pressure to start spending. But he's also desperate to win over swing voters in fall local elections. He'll hold the fiscal reins tight.

Israel + Desperate for allies, P.M. Sharon has given Finance Minister Netanyahu the room to push through vital banking reforms. They'll outlast the political turmoil.

Georgia - Prez Saakashvili is a fresh face, but inexperienced. His hotheaded posturing may be dooming hopes for a peaceful settlement with breakaway Adjaria region.

THAILAND
Tough Times for Thaksin

Thai officials are talking tough about the bloodbath in the southern half of the country last week, in which they say 107 Islamic militants were killed in attacks on police and Army posts in several towns. (Some locals claim that several of the dead were innocent civilians.) Thai intelligence sources say they were tipped off about the predawn raids by some 200 attackers several hours beforehand, but could not get as many troops as they would have liked in place. "If they were able to confirm it earlier, nobody would have gotten away," says one source.

Officials insist the attacks are not the work of foreign terrorists. They say the attackers were local Muslim separatists, financed by drug smugglers. The latter have been crippled by Bangkok's anti-drug crackdown and would presumably welcome any help in disrupting government activities in the area.

Even if that scenario is true, the government's heavy-handed tactics may have created a terrorist problem where none existed. Prime Minister Thaksin Shinawatra has been trying to enforce security in the south while pumping money into the region. But now, officials admit, a terrorist attack could well hit Bangkok as payback for last week's killings. Says one intelligence source: "We know that [terrorists] are there now... and they're waiting."
--Joe Cochrane

RUSSIA
Power Grab

Most Moscow businessmen are convinced the Kremlin means to take over Yukos after the oil giant had its worst week since the October jailing of CEO Mikhail Khodorkovsky. Yukos' assets have been frozen, its credit rating has been slashed and Western banks holding $1 billion in Yukos debt warn of a possible default. The question is just how the Kremlin will finesse the transfer without it looking like renationalization--something foreign investors dread. If Yukos' biggest shareholders are convicted of tax evasion and fraud, it's fairly simple, says one Moscow oil insider. First, levy huge penalties that match the roughly $14 billion value of the company. Then, to pay those fines, sell--most likely to a domestic oil producer loyal to the Kremlin. Sibneft's Roman Abramovich is a leading candidate. Another possibility is Surgutneftegas' Vladimir Bogdanov, who last week toured Yukos' richest oilfield--a key asset that might be sold to pay the tax man or bankers.

The endgame, of course, is the 2008 presidential election. Whoever gets a piece of the Yukos pie will be expected to kick back some of that money to one of the Kremlin's competing factions--no question about it.
--Frank Brown

ECONOMY
So Long, Cheap Money

Money is about to get expensive again. The British and Australian central banks have already raised their key interest rates, and the U.S. Federal Reserve has hinted it will follow. The question: who will get hit hardest?

The first to be flattened will be U.S., British and Australian bond and property markets. Emerging markets are next, since foreign investors tend to leave when returns improve at home. Bond markets in Brazil and Turkey look particularly vulnerable.

The good news: the upheaval is likely to be gentler than it was after Fed hikes in 1994. Rising rates have already been priced in to many assets, and mortgage rates are so low that minor upward moves may not dampen property markets by much. Falling barriers to rising capital flows have produced what some analysts call "synchronized" markets, in which recession and reflation is a global (not just national) cycle. So if expensive money does cause more misery than expected, at least we'll all have company.
--Jonathan Adams

BRITAIN
Fighting on Two Fronts

In a public scolding unprecedented for a British prime minister, 52 former senior British diplomats last week called for a "fundamental reassessment" of Tony Blair's handling of Iraq and the Middle East peace process. Now the prime minister may be in jeopardy of losing the support of his military, too. The aftermath of the U.S.-led war has been "an unholy mess," says one retired senior British officer. "[And] it would be very hard to find a single retired officer of senior rank who supported the invasion of Iraq in the first place."

Demands from Washington are likely to worsen Blair's relationship with serving generals as well. The White House wants more British troops in Iraq--2,000 is the rumored figure--to replace the departing Spanish. If the Poles cut their forces, too, as they're hinting they may, Washington will likely urge British troops to take over command of the holy Shiite city of Najaf, home to rabble-rousing imam Moqtada al-Sadr. Blair, sources say, is facing adamant opposition from Britain's military chiefs, who have publicly declared the U.S. approach to pacifying Iraq a cause of "friction." In private, the criticism has been far stronger: at a closed-door session in London in November, top British generals warned their U.S. counterparts that the U.S. and British approaches to counterinsurgency were so different that their forces were "not interoperable." British commanders are now deeply reluctant to see their soldiers' lives risked in the hornets' nest that they believe the U.S. approach has stirred up in Najaf.

Blair's political standing is still relatively secure, mostly because his likely successor as Labour leader, Chancellor of the Exchequer Gordon Brown, shows no inclination to challenge him before next year. But even Blair's most loyal supporters accept that the sky--which was once the limit--could fall.
--Stryker McGuire and John Barry

FLAGS
Color Clash

Chad and Romania are at war--over their flag. Ever since Romania dropped the communist insignia from its blue, yellow and red tricolor in 1989--thereby replicating Chad's post-1959 flag almost identically (the shades of blue are unnoticeably different)--both sides have refused to budge. The issue has now been handed over to the United Nations, which may soon find itself dealing with another flag debate. The new design for Iraq's flag, unveiled last Tuesday, used a blue similar to Israel's, angering many Iraqis. But mostly they were annoyed at having been left out of the decision-making process. Late in the week a darker tone of blue was inserted. This should at least cool the debate--until yet another new flag is chosen in the summer by the new government.
--Andrew Ehrenkranz

THEATER
Rockin' the Playhouse

Elvis Presley's swaggering on-screen charisma made "Jailhouse Rock" a sizzling, if cheesy, film, and inspired legions of impersonators. Now there's a new Elvis onstage, in "Jailhouse Rock: The Musical," which recently debuted in London. Although the musical doesn't really stray from the film's somewhat formulaic plot (white boy from wrong side of the tracks kills fiance of his love interest, a rich young socialite, and winds up in jail), it has earned decent reviews. And night after night, it's had audiences dancing in the aisles with electric renditions of classics like "Blue Suede Shoes," "Suspicious Minds" and "Tutti Frutti." (The show doesn't include its title track, as the production couldn't obtain the rights.) But amid all the rockin' and rollin', there's one crucial thing missing: the King himself. Mario Kombou does his best to capture the demi-god, but appears apprehensive of re-creating Elvis's raunchy sexuality--there's just no oomph in his hips, thrusts or grunts. Perhaps it's too much to ask of any actor to portray one of the greatest performers who ever lived.

Thankfully, though, Kombou does find his voice, allowing the music to speak for itself and become the musical's saving grace. A musical lives and dies by its songs; so does a legend. Elvis has long left the building, but he still shakes, rattles and rolls.
--Tara Pepper

CLONING
Copycats, Soon Dogs

Can't spend enough on your pet? There's a new way to unload a fortune. For $50,000, Genetic Savings & Clone, a California-based company, will offer cat owners a genetic replica of their pet later this year. (Dog cloning won't be available until 2005 at the earliest.) The company, which claims that five paying customers have signed on to receive cloned kittens in November, caused a stir two years ago. Its first clone, a lab cat named CC (for carbon copy), didn't resemble its DNA donor. That, company officials now say, happened because the donor, a calico, had a genetic quirk blocking duplication. For all noncalico cats, says CEO Lou Hawthorne, owners can expect clones to look like "an identical twin" of their pet. They'll also be "very similar in temperament and intelligence." (And cheaper, eventually: as technology matures, the price is expected to drop to about $10,000 for cats and $12,000 for dogs. Gene banking is available for about $900 a year.) The company says its work is ethical, but critics disagree. Says Stephanie Shain of the Humane Society: "It's irresponsible to duplicate an animal when we are euthanizing happy, healthy animals because there aren't homes for them."
--Karen Breslau

DIETS
The Good (Food) Book

What would Jesus eat? You can find out in the new "Maker's Diet," a "Biblically correct" health plan. "In the Bible, people didn't eat the garbage we eat," says American author Jordan Rubin. Instead they noshed on the Creator's unrefined and unprocessed provisions: figs, goat's milk, cold-water fish, grass-fed meat. Rubin's 40-day plan, which cuts down on sugars and starches, allows red meat and saturated fats--but not pork or shellfish. Some of his culinary prescriptions, like wild Alaskan salmon with pecan pesto, sound delectable. Others, like a nightly tablespoon of Icelandic cod-liver oil, don't.

But the book's about more than eating your way to a Samson- or Delilah-like bod. There are also daily prayers ("You are the God that heals, my Great Physician") and hygiene regimens (no antiperspirants or antibacterial soaps). Though skeptics might think Rubin's capitalizing on the Christian-media craze currently taking hold in the United States, he says his timing's "totally by the grace of God."
--Arian Campo-Flores

Q&A: PIERCE BROSNAN

Pierce (007) Brosnan is putting the tuxedo in mothballs for a while to play a divorce lawyer in the new film "Laws of Attraction." He spoke with NEWSWEEK's Nicki Gostin from his limo.

So what's up with the mustache?

I'm doing a movie in Mexico City called "The Matador." I'm playing a hit man who's having a nervous breakdown.

What does your wife think of it?

She can't wait for it to come off.

You play a divorce lawyer in your new movie. Is there any profession you think is scummier?

[Laughs] Maybe chicken-sexing. You know, checking chickens to see if they're male or female. Please, God, I'll never need one.

When did you first realize that you were drop-dead gorgeous?

I've never realized it, actually. I've never gone around thinking such nonsense. I just kind of scrub up well. I've got a good pair of old legs which have held up. Shoulders out, chin up, and you do the best you can, really.

Does it bother you that your most famous role is always going to be James Bond?

It doesn't bother me in the least.

Are you a better Bond than George Lazenby?

Forget about George. There's only Connery.

Do the Bond films make you nostalgic for the better days of the British Empire?

No! The empire? Jesus, what did the empire ever do except mangle other cultures?

It gave us the queen.

The queen! Bless her cotton socks.