Asian markets up on Fed stand, strong yen hits Tokyo

HONG KONG: Asian markets mostly rose on Wednesday after US Federal Reserve head Ben Bernanke reaffirmed the central bank's huge monetary easing scheme, but a stronger yen sent Tokyo lower.

Investors remained hesitant and the euro came under pressure after Italy's election results which left no party in overall control, raising concerns that uncertainty in Rome could see the eurozone return to the dark days of crisis.

Tokyo fell 0.78 per cent by noon but Hong Kong rose 0.44 per cent, Sydney added 0.64 per cent, Shanghai climbed 1.14 per cent and Seoul was 0.18 per cent higher.

In testimony to Congress Bernanke said the Fed's $85 billion a month bond-purchase programme aimed at holding down long-term interest rates and encouraging investment -- known as quantitative easing -- was still merited.

While warning that looming steep budget cuts could slow growth, he stressed high unemployment was a main challenge to the economy, adding that the risks of the programme -- inflation, and risky behaviour in the financial industry -- were being monitored closely.

Bernanke said the programme was "providing important support to the recovery".

His comments on Tuesday were a relief for financial markets, which stumbled last week after minutes from the Fed's latest policy meeting suggested some members wanted to curtail the policy before the economy was back in track.

"Bernanke confirmed the Fed's commitment to continue quantitative easing until unemployment falls, and US economic data are clearly improving," Martin Lakos, division director in Macquarie's Private Wealth division in Australia, told Dow Jones Newswires.

On Wall Street the Dow rose 0.84 per cent, the S&P 500 added 0.61 per cent and the Nasdaq jumped 0.43 per cent.

US investors also took comfort in surprisingly robust new home sales while the Conference Board's February consumer confidence index showed a surprise jump to 69.6 from 58.4 in January, well above the average analyst estimate of 62.0.

But the dollar fell against the yen in Asia as dealers sought the safe havens after the inconclusive Italian elections.

The dollar bought 91.70 yen in Tokyo Wednesday, from 91.93 yen in New York late Tuesday and well off the 94.77 yen high seen on Monday.

The euro slipped to $1.3043 and 119.60 yen from $1.3061 and 120.08 yen.

Eurozone fears have been reignited after the Italian polls, which left the country with a hung parliament and a protest party effectively holding the balance of power.

Investors fear the outcome will mean Italy will reverse the austerity policies put in place to pay off its debts, with implications for the wider region.

Italian leftist leader Pier Luigi Bersani, who said he had "come first but not won", warned that the huge anti-austerity protest vote should be heeded beyond Italy's borders, adding: "The bell tolls also for Europe."

Oil prices were mixed, with New York's main contract, light sweet crude for delivery in April, shedding two cents to $92.61 while Brent North Sea crude for April delivery gained three cents to $112.74.

Gold was at $1,612.40 at 0220 GMT compared with $1,597.80 late Tuesday.

- AFP/ck

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IDriveSync online storage now offers cool Private Key option

IDriveSync offers a convenient and secure way to keep data backed up or synced between different devices in real time.

(Credit:
Dong Ngo/CNET)

If you've been hesitant about using an online storage service because of the privacy risk or cost, you might be interested in what Pro Softnet has to offer via its IDriveSync service.

The online storage provider unveiled today a Private Key Encryption option for those signing up for a new IDriveSync account. The company says the new feature "brings a whole new level of security for users who are concerned about storing their sensitive and confidential information on the cloud." In fact, according to Pro Softnet CEO Raghu Kulkarni, none of the leading sync services -- including Dropbox, Google Drive, and SkyDrive -- provides this for general consumers.

To use this feature, pick a private key (an additional password) that will then be used for encrypting data stored in your online account. Since the key isn't generated by IDriveSync, no one except the authorized user has access to this data. Pro Softnet says the key itself is not stored on its servers, so even IDriveSync employees can't access the encrypted data. This also means that if you lose the key, you completely lose access to the data.

Note that the Private Key option is only available during the sign-up process and can't be changed at a later time, including the key itself. This is because the key is associated with the encryption and in order to change or remove it, it's necessary to decrypt and re-encrypt the data. This is a process that takes a long time, and might not even be possible in certain situations.

Once the Private Key option has been selected, you'll be asked for the key each time you log in, either via the Web interface or the mobile or desktop application.

(Credit:
Screenshot by Dong Ngo/CNET)

The company says data sharing between IDriveSync users is still possible with the Private Key option as long as the user explicitly allows IDriveSync to store an encrypted version of the key. Users also have the option to clear the stored private encryption key, when they want to stop sharing their data with others.

Now that the privacy part is taken care of, how about cost? IDriveSync gives all new users a free account of 10GB that can be increased to up to 30GB by referring friends or installing its apps. Students will get a free account of 25GB to start with. After that, power users can upgrade to the 150GB or 500GB plans that cost $4.95 or $14.95 per month, respectively.

There's a desktop application for the IDriveSync service, as well as mobile apps for
Android and iOS devices. The online storage space can be used to sync data with an unlimited number of devices or for non-sync backups in a feature called Out of Box. Out of Box keeps data as separate copies for each device and saves it in up to 30 versions, which is great if you tend to make wrong changes to your documents. The service's Web interface also permits quick drag and drop for data syncing or backups.

In all, if you're looking for a new way to conveniently and securely back up or sync your important data, hopefully 10GB of it or less, IDriveSync is totally worth a try even without its new Private Key option.

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Debate over Voting Rights Act changes in Ala.

(CBS News) -- On Wednesday, the Supreme Court will hear a challenge to the landmark Voting Rights Act of 1965. Both sides agree the south have changed in the past half-century. At issue is, has it changed enough?

In Shelby County, Alabama, the question is whether the state's racist past must forever define it.

(Watch: Voting Rights Act challengers take aim at "Section 5", below)

Fifty years ago, Alabama was the cradle of the civil rights movement, where protestors endured fire hoses, arrests and bombings in the fight for equality. One result was the Voting Rights Act.

One provision of the Act, Section 5, still requires all or part of 16 states, mostly in the south, to get approval from the Justice Department before changing voting procedures or electoral maps.

"Section five, which is what we are attacking, was never intended by congress to be permanent," said Frank Ellis, a Shelby County lawyer who is at the center of the battle to eliminate Section 5, and force the federal government to treat Alabama and other covered states like the rest of the country.

"They are still using the same criteria to determine whether these 16 states that are covered, they are still using the same test that they used in 1965," Ellis said.

"Things have changed in the South," he said. "This is a dynamic society."

But Ernest Montgomery says things have not changed enough. He was on the city council in Calera, Alabama when city officials, facing a population boom, redrew his district map. He lost the election to a white candidate. Under Section 5, the Justice Department ordered a new election and Montgomery won.

The minority representation in his district under the old map was about 67% African American, according to Montgomery. With the new map, that number dropped to about 28%.

Voting Rights Act faces Supreme Court challenge

Voting Rights Act Section 5 "not the only tool" to protect voting rights, Obama says

VIDEO: SCOTUS to hear challenge to Voting Rights Act

Shelby County Pastor Harry Jones calls it discrimination.

"I think it was designed to dilute the power of the minority community," Jones said. "It did just that."

Opponents like Ellis say they are not attacking the entire Voting Rights Act. If there's intentional discrimination, people can sue, just like they do in Michigan, Ohio and other states that aren't by Section Five.

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Senate Votes to Confirm Hagel as Defense Secretary

After a tough two-month battle characterized by tough interrogation and a partisan divide, the Senate voted 58-41 to confirm Chuck Hagel -- President Obama's nominee -- as secretary of defense this afternoon.

Only four Republicans broke party lines to vote in Hagel's favor. They included Sens. Thad Cochran of Mississippi, Richard Shelby of Alabama, Mike Johanns of Nebraska and Rand Paul of Kentucky, though Paul had voted against moving forward with the vote earlier today.

Before that cloture vote to close the debate and bring Hagel's nomination to a vote, Senate Majority Leader Harry Reid, D-Nev., warned Republicans against continuing their partisan fight against the nominee.

"Senate Republicans have delayed for the better part of two weeks for one reason: partisanship," Reid said. "Politically motivated delays send a terrible signal to allies around the world, and they send a terrible signal to tens of thousands of Americans serving in Afghanistan, other parts of world and those valiant people who are serving here in the United States. For the sake of national security, it's time to set aside this partisanship."

The measure to move forward passed by a vote of 71-27. It needed at least 60 votes to pass.

Some Republican senators took the time before the vote to take a last stab at Hagel.

John Cornyn, R-Texas, who was one of 15 senators who sent a letter to Obama last week calling for him to withdraw his nomination of Hagel, said Hagel had proved that he's ill-prepared to assume the defense secretary post.

Chuck Hagel as Secretary of Defense: Confirmation Process Watch Video

Obama Taps Sen. Chuck Hagel for Defense Secretary Watch Video

"There's simply no way to sugar coat it," Cornyn said. "Sen. Hagel's performance before the Senate Armed Services Committee was remarkably inept, and we should not be installing a defense secretary who is obviously not qualified for the job and who holds dangerously misguided views on some of the most important issues facing national security policy for our country. Sen. Hagel is clearly the wrong man for the job."

The Senate returned today after a week off from debating Hagel's pros and cons.

Today's was not the first attempt to bring Hagel's nomination to the floor.

Republicans blocked a cloture vote to confirm Hagel on Valentine's Day, pushing the decision back until after their President's Day recess.

Democrats framed that rejection as a filibuster, while Republicans said they needed another week to discuss the candidate's record.

"This is a very controversial nominee. There is a desire to not end debate now," Sen. Lindsey Graham, R-S.C., said that Thursday. "We feel like come back next week, after the break, unless there is some bombshell I'd be ready to move on to vote."

Ten days later, GOP Sens. Tom Coburn of Oklahoma and John McCain of Arizona predicted the Senate would go through with a vote today.

A group of 15 Republicans sent a letter to Obama last week asking him to withdraw Hagel's nomination. Coburn, one of the senators who signed that letter, said the fight among lawmakers over Hagel's qualifications would weaken him should he become secretary.

"I like Chuck Hagel as an individual, but the fact is, in modern times, we haven't had one defense secretary that's had more than three votes against him," Coburn said on "Fox News Sunday" this weekend. "And you're going to have 40 votes against him, or 35 votes. And that sends a signal to our allies as well as our foes that he does not have broad support in the U.S. Congress, which limits his ability to carry out his job."

McCain did not sign that letter.

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Italy faces stalemate after election shock

ROME (Reuters) - Italy faced political deadlock on Tuesday after a stunning election that saw the anti-establishment 5-Star Movement of comic Beppe Grillo become the strongest party in the country but left no group with a clear majority in parliament.

The center-left coalition led by Pier Luigi Bersani won the lower house by around 125,000 votes and claimed the most seats in the Senate but was short of the majority in the upper house that it would need to govern.

Bersani claimed victory but said it was obvious that Italy was in "a very delicate situation". Party officials said the center-left would try to form a government but it was unclear what its options would be.

Neither Grillo, a comedian-turned-politician who previously ruled out any alliance with another party, nor Silvio Berlusconi's center-right bloc, which threatened to challenge the close tally, showed any immediate willingness to negotiate.

World financial markets reacted nervously to the prospect of a government stalemate in the euro zone's third-largest economy with memories still fresh of the financial crisis that took the 17-member currency bloc to the brink of collapse in 2011.

Italy's borrowing costs have come down in recent months, helped by the promise of European Central Bank support but the election result confirmed fears that it would not produce a government strong enough to implement effective reforms.

Grillo's surge in the final weeks of the campaign threw the race open, with hundreds of thousands turning up at his rallies to hear him lay into targets ranging from corrupt politicians and bankers to German Chancellor Angela Merkel.

In just three years, his 5-Star Movement, heavily backed by a frustrated generation of young Italians increasingly shut out from permanent full-time jobs, has grown from a marginal group to one of the most talked about political forces in Europe.

Its score of 25.5 percent in the lower house was just ahead of the 25.4 percent for Bersani's Democratic Party, which ran in a coalition with the leftist SEL party and it won almost 8.7 million votes overall, more than any other single party.

"The 5-Star Movement is the real winner of the election," said SEL leader Nichi Vendola, who said that his coalition would have to deal with Grillo, who mixes fierce attacks on corruption with policies ranging from clean energy to free Internet.

RECESSION

"It's a classic result. Typically Italian," said Roberta Federica, a 36-year-old office worker in Rome. "It means the country is not united. It is an expression of a country that does not work. I knew this would happen."

A long recession and growing disillusion with mainstream parties fed a bitter public mood that saw more than half of Italian voters back parties that rejected the austerity policies pursued by Prime Minister Mario Monti with the backing of Italy's European partners.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

Stefano Zamagni, an economic professor at Bologna University said the result showed that a significant share of Italians "are fed up with following the austerity line of Germany and its northern allies".

"These people voted to stick one up to Merkel and austerity," he said.

Election rules give the center-left a solid majority in the lower house, despite its slim advantage in terms of votes, but without the Senate it will not be able to pass legislation.

Calculations by the Italian Centre for Electoral Studies, part of LUISS university in Rome, gave 121 seats to Bersani's coalition, 117 to Berlusconi, 54 for Grillo and 22 to the centrist coalition led by Monti.

That leaves no party or likely alliance with the 158 seats needed to form a Senate majority.

Even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy which has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, whom he replaced as the 2011 financial crisis threatened to spin out of control.

But he struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth and a weak center-left government may not find it any easier.

(Additional reporting by Naomi O'Leary and Stephen Jewkes; Editing by Doina Chiacu)

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UN calls for independent inquiry into Palestinian death

UNITED NATIONS: The United Nations called Monday for an independent inquiry into the death of a Palestinian in Israeli custody, warning that mounting tensions risk an eruption of violence in the occupied territories.

The Palestinians also demanded an independent investigation in a letter to the UN Security Council, which said that Arafat Jaradat, who died at the weekend, could have been tortured.

UN Middle East peace envoy Robert Serry made the call for an investigation in a statement after talks with Palestinian prime minister Salam Fayyad on the Jaradat's death.

Serry noted that Israeli and Palestinian experts had examined the body.

"The United Nations expects the autopsy to be followed by an independent and transparent investigation into the circumstances of Mr Jaradat's death, the results of which should be made public as soon as possible," the envoy added.

Jaradat was detained on February 18 and died five days later.

Israeli prison authorities said Jaradat appeared to have died of a heart attack. But the Palestinian minister of prisoner affairs, Issa Qaraqaa, citing the preliminary findings of the joint autopsy, reported bruises on Jaradat's body, muscle damage and broken ribs.

A letter sent by Palestinian UN ambassador Riyad Mansour to the Security Council said the autopsy revealed that Jaradat "was subjected to severe beatings, abuse and medical negligence during his captivity, possibly amounting to torture."

The letter said Jaradat had six broken bones in his neck, spine, arms and legs, along with other injuries.

Israel has said the prisoner could have suffered broken bones in attempts to resuscitate him after the heart attack.

"This horrific incident is further proof of the inhumane treatment systematically meted out by Israel against Palestinians in its jails," added the letter, which called for an "impartial investigation" and Security Council action to make Israel abide by humanitarian law.

Thousands attended the Jaradat's West Bank funeral on Monday and some militants have threatened revenge for his death.

Serry's statement said "mounting tensions present a real risk of destabilisation".

UN leader Ban Ki-moon expressed concern last week about the deteriorating state of Palestinian hunger strikers in Israeli jails and said that the rights of all Palestinian detainees must be fully respected.

-AFP/sb

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Firefox betas pull the shades per-tab on 'porn mode'

Desktops get a new Download Manager in Firefox 20 Beta.

(Credit:
Mozilla)

Private browsing, or 'porn mode' for people with more prurient Web browsing requirements, will soon be available in Firefox on a per-tab basis.

The latest versions of
Firefox 20 Beta (download for Windows, Mac, and Linux)
and Firefox 20 Beta for Android (download) have been updated to allow people to choose private browsing on a per-tab basis. Private browsing disables built-in browser recording, including history and cookies.

This is a pretty big change for Private Browsing aficionados, since previously in Firefox switching to Private Browsing would save all your tabs, close the window, and open a new Private Browsing window without any previously-running tabs. The new behavior allows Private Browsing tabs to run side-by-side with non-Private tabs.

Mozilla continues to crack down on unexpected or unauthorized alterations to the browser. In this beta, Firefox will offer to reset the location bar search provider to the default if it has been changed by a third-party such as an add-on provider.

Other improvements to Firefox Beta for desktops include a new Download Manager that moves the feature to the browser's toolbar from its traditional management pane in a new window, and a plug-in warning that lets you know when a plug-in has been frozen for more than 45 seconds. It gives you the option of restarting the plug-in, instead of the entire browser.

Under the hood, the new Firefox Beta for desktops now supports getUserMedia for recording from your mic or webcam in the browser; CSS FlexBox, for having site content automatically resize depending on screen dimensions; the Developer Toolbox, for quickly accessing developer tools; and Canvas Blend Modes for improved visual effects.

In addition to the Private Browsing changes, Firefox 20 Beta for
Android comes with the ability to customize your Home screen shortcuts, and system requirements for Firefox for Android have been lowered again. The browser will now work on Android devices with 384MB of RAM and QVGA displays, including but not limited to the Samsung Galaxy Next, HTC Aria, HTC Legend, Samsung Dart, Samsung Galaxy Pop, and the Samsung Galaxy Q.

A full list of changes are available for Firefox 20 Beta for desktops and Firefox 20 Beta for Android.

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9/11 families upset over "Zero Dark Thirty" recordings

(CBS News) NEW CANAAN, Conn. - "Zero Dark Thirty" took just one minor award at the Oscars last night. There was a lot of debate about the way the film depicted torture during the hunt for Osama bin Laden.

Turns out that wasn't the only controversy.

The film starts with actual voices of victims of September 11, recorded as they made their last phone calls. For Mary and Frank Fetchet, it brings back painful memories. One of those voices was their son Brad, who worked on the 89th floor of the World Trade Center's South Tower.

Mary Fetchet

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CBS News

"When I arrived home I found Brad's message on our phone, and, of course, these were his last words in my view, because we never heard from him again," Mary said.

"Losing a loved one so horribly -- the ongoing anguish we've been going through -- it's a treasured remembrance, it's a treasured message. It's ours," Frank said.

They say that treasured remembrance was used in the film without their permission.

"My first thought was, 'isn't anything sacred anymore?'" Mary said.

The Fetchets used the recording in testimony for the September 11 Commission, and it has appeared in broadcast TV news reports. But the couple says this is different.

"I used it in situations where I wanted to convey Brad's story," Mary said. "None of those situations were used for promotional or professional or commercial endeavors."

Kathryn Bigelow defends "Zero Dark Thirty" torture scenes
Sony exec: "Zero Dark Thirty" does not advocate torture
Watch: "Zero Dark Thirty" director Kathryn Bigelow talks torture, art

The film has grossed more than $90 million worldwide. In a statement, the film distributor, Sony, and studio, Annapurna Pictures, say "Zero Dark Thirty" is a "tribute" to the victims of September 11 and "before the film's release, (they) initiated contact with a number of family members of the victims of the 9/11 attacks."

Frank said the statement wasn't enough. "To say they've reached out to families -- yeah, reached to say, 'come to the preview' after the film is already completed," he said.

Harry Ong

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CBS News

Harry Ong's sister Betty was a flight attendant who was killed on American Airline Flight 11.

"We were never given any notification or asked for permission to use Betty's voice, unlike many documentary companies," Ong said.

"We're asking that they apologize and that they recognize that they used Betty's voice and Brad's and others at liberty."

After the film was released, the Fetchets and Ongs asked Sony and Annapurna for donations to their September 11 charities in exchange for the use of their loved ones' voices. But the filmmakers had already decided to donate to the national 9/11 Memorial Museum.

"The real driver in all of this is getting this record set straight. I'm incensed by it," Frank Fetchet said. "Others run the risk of going through the same thing, so I think this should put a line in the sand that says, 'it's not right.'"

The Fetchets hope that by speaking out, they'll prevent other victims of tragedies from experiencing similar surprises.

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Arias Had No Remorse: Prosecutor

Prosecutor Juan Martinez hammered alleged murderer Jodi Arias today with accusations that she felt no remorse when she lied over and over again about killing her ex-boyfriend, Travis Alexander.

"Ma'am you have a problem with telling the truth don't you?" Martinez asked as his first question today, the 11th day Arias has been on the stand explaining her role in Alexander's death.

"Not typically," Arias responded.

Martinez then took Arias through a series of lies she admittedly told in the days after she stabbed and shot Alexander to death on June 4, 2008, lying to friends, investigators and even Alexander's grandmother, going so far as to send a dozen irises to his grandmother expressing her sympathy.

See the Evidence in the Jodi Arias Murder Trial

Arias, 32, has testified that she killed Alexander in self-defense during a violent argument and lied about it out of "shame."

But prosecutors say that the 27 stab wounds, a slashed throat, and two bullets she fired at Alexander's head prove that she murdered him. She could face the death penalty if convicted.

Catching Up on the Trial? Check Out ABC News' Jodi Arias Trial Coverage

Today Martinez tried to raise doubts about Arias' earlier testimony in which she depicted Alexander as an increasingly menacing and sexually demanding lover by grilling her about the lies she told after she killed Alexander.

Martinez pointed out that Arias lied to Detective Esteban Flores of the Mesa, Ariz., police department as he investigated Alexander's death. She initially denied to the detective that she was at Alexander's Mesa, Ariz., home when he was killed, and later said he was murdered by a pair of masked intruders.

Jodi Arias Testimony: Prosecution's Cross-Examination Watch Video

Jodi Arias Remains Calm Under Cross-Examination Watch Video

Jodi Arias Doesn't Remember Stabbing Ex-Boyfriend Watch Video

"You told (Flores) you would help him, but that was a lie right? You weren't there to tell the truth. You were there for another purpose: to make sure he didn't get the truth.... You were hoping, ma'am, that (Flores) would believe what you were saying so you could walk out of jail," Martinez said.

Arias argued with Martinez, claiming that she lied to investigators out of shame, and lied to friends immediately after the death out of confusion.

"My mind wasn't right during all that period," Arias said referring to the hours immediately following the killing when she drove through the Arizona desert and made phone calls to ex-boyfriend Matthew McCartney and new love interest Ryan Burns.

"It's like I wasn't accepting it in my mind... because I never killed anyone before," she said.

Martinez also suggested that Arias tried to find out the status of the investigation into Alexander's death so that she could know if she were about to be arrested. When a friend of Alexander's called her to report the news about Alexander's death, Arias asked about details into the investigation, the prosecutor said. She also called Alexander's Mormon bishop and asked him what he knew about the case, and then asked friends and family members what they knew, according to Martinez.

"You needed to see what you needed to know to make sure you weren't charged. What purpose would there be for that information other than to benefit you?" Martinez asked. "You called [the bishop] at 3 a.m. You call him and spoke to him because you wanted to get the information about what he knew about the investigation. That was going to help you."

Timeline of the Jodi Arias Trial

Martinez also went over lies that Arias told to her friend, Leslie Udy, and Ryan Burns, both of whom she saw in Utah the day after killing Alexander. She talked to both about Alexander as if he were still alive. Martinez pointed out that Arias even made out with Burns in his bedroom during their visit.

But Arias claimed that it was Burns who lied about their encounter.

"And with Mr. Burns, didn't you get on top of him and grind on him?" Martinez asked.

Arias said she was on top of Burns at one point, but they did not "grind."

"Well, when you were romantic kissing, he did put his hand between your legs, didn't he?" Martinez said, referring to Burns' own testimony in court weeks earlier.

"No," Arias said. "It could be that he's full of crap...when he says he got near my vaginal area."

"This is the person who lied to him, to (friends), to Detective Flores, and yet you're telling us someone else is full of crap," Martinez asked incredulously.

"When it comes to that, yes," she said.

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Cuban leader Raul Castro announces he will retire in 2018

HAVANA (Reuters) - Cuban President Raul Castro announced on Sunday he will step down from power after his second term ends in 2018, and the new parliament named a 52-year-old rising star to become his first vice president and most visible successor.

"This will be my last term," Castro, 81, said shortly after the National Assembly elected him to a second five-year tenure.

In a surprise move, the new parliament also named Miguel Diaz-Canel as first vice president, meaning he would take over if Castro cannot serve his full term.

Diaz-Canel is a member of the political bureau who rose through the Communist Party ranks in the provinces to become the most visible possible successor to Castro.

Raul Castro starts his second term immediately, leaving him free to retire in 2018, aged 86.

Former President Fidel Castro joined the National Assembly meeting on Sunday, in a rare public appearance. Since falling ill in 2006 and ceding the presidency to his brother, the elder Castro, 86, has given up official positions except as a deputy in the National Assembly.

The new government will almost certainly be the last headed up by the Castro brothers and their generation of leaders who have ruled Cuba since they swept down from the mountains in the 1959 revolution.

Cubans and foreign governments were keenly watching whether any new, younger faces appeared among the Council of State members, in particular its first vice president and five vice presidents.

Their hopes were partially fulfilled with Diaz-Canel's ascension. He replaces former first vice president, Jose Machado Ventura, 82, who will continue as one of five vice presidents.

Commander of the Revolution Ramiro Valdes, 80, and Gladys Bejerano, 66, the comptroller general, were also re-elected as vice presidents.

Two other newcomers, Mercedes Lopez Acea, 48, first secretary of the Havana communist party, and Salvador Valdes Mesa, 64, head of the official labor federation, also earned vice presidential slots.

Esteban Lazo, a 68-year-old former vice president and member of the political bureau of the Communist Party, left his post upon being named president of the National Assembly on Sunday. He replaced Ricardo Alarcon, who served in the job for 20 years.

Six of the Council's top seven members sit on the party's political bureau which is also lead by Castro.

Castro's announcement came as little surprise to Cuban exiles in Miami.

"It's no big news. It would have been big news if he resigned today and called for democratic elections," said Alfredo Duran, a Cuban-American lawyer and moderate exile leader in Miami who supports lifting the U.S. trade embargo against Cuba. "I wasn't worried about him being around after 2018," he added.

The National Assembly meets for just a few weeks each year and delegates its legislative powers between sessions to the 31-member Council of State, which also functions as the executive through the Council of Ministers it appoints.

Eighty percent of the 612 deputies, who were elected in an uncontested vote February 3, were born after the revolution.

EFFORT TO PROMOTE YOUNGER GENERATION

Raul Castro, who officially replaced his ailing brother as president in 2008, has repeatedly said senior leaders should hold office for no more than two five-year terms.

"Although we kept on trying to promote young people to senior positions, life proved that we did not always make the best choice," Castro said at a Communist Party Congress in 2011.

"Today, we are faced with the consequences of not having a reserve of well-trained replacements ... It's really embarrassing that we have not solved this problem in more than half a century."

Speaking on Sunday, Castro hailed the composition of the new Council of State as an example of what he had said needed to be accomplished.

"Of the 31 members, 41.9 percent are women and 38.6 percent are black or of mixed race. The average age is 57 years and 61.3 percent were born after the triumph of the revolution," he said.

The 2011 party summit adopted a more than 300-point plan aimed at updating Cuba's Soviet-style economic system, designed to transform it from one based on collective production and consumption to one where individual effort and reward play a far more important role.

Across-the-board subsidies are being replaced by a comprehensive tax code and targeted welfare.

Raul Castro has encouraged small businesses and cooperatives in retail services, farming, minor manufacturing and retail, and given more autonomy to state companies which still dominate the economy.

The party plan also includes an opening to more foreign investment.

At the same time, Cuba continues to face a U.S. administration bent on restoring democracy and capitalism to the island and questions about the future largess of oil rich Venezuela with strategic ally Hugo Chavez battling cancer.

(Editing by Kieran Murray and Vicki Allen)

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