Recent developments in the region until January 5:

Initial European agreement to impose ban on oil imports from Iran

Egypt’s prosecution seeks death penalty against Mubarak, former interior minister

Libya leaders warn of civil war

Syrian official declares defection in Cairo

Turkey’s FM warns of cold sectarian war in the region

IRAN:

Officials from the 27 countries that make up the European Union Thursday began the process of trying to thrash out an agreement on banning the purchase of Iranian oil in the hope of choking off funding for the country's nuclear program.

Iranian officials maintain the program is meant solely for peaceful purposes. But the international consensus is that it is aimed at building nuclear weapons.

On Tuesday, French Foreign Minister Alain Juppe said there was "no doubt" Iran was moving toward a nuclear weapon.

Juppe said new sanctions on Iran could include targeting its Central Bank and imposing an Iranian oil embargo.

EU foreign ministers agreed in December to work toward a ban on importing Iranian oil. An EU official said Thursday that significant issues remain and no agreement is expected before the end of January. The official spoke on condition of anonymity in order to discuss confidential information.

The official said that among the unresolved issues is how long existing contracts for the purchase of Iranian oil would remain exempt from the ban. If they were exempted for long periods of time, that would significantly weaken any proposed embargo.

But some EU members, notably Greece, are heavily reliant on Iranian oil.

Officials from EU countries are meeting in Brussels to discuss the issues but are not expected to reach an agreement Thursday.

Juppe was quoted by Radio France late Thursday as saying he hoped an embargo could be adopted when EU foreign ministers meet again in Brussels on Jan. 30. However, that meeting may well be postponed, because a summit of EU heads of government has now been called for that same day.

Regarding sanctions on Iran's oil and its central bank, the country's semiofficial Isna news agency quoted Iranian Foreign Minister Ali Akbar Salehi on Thursday as saying: "We are always ready for these hostile sanctions and we are not concerned about them."

Iranian officials struck a defiant posture Thursday in response to a proposed oil embargo by the European Union, calling the intensified efforts to halt Iran's nuclear program, including new U.S. sanctions, tantamount to "an economic war."

The strong words were the latest in a series of escalating military and diplomatic responses by Iran in recent weeks amid growing pressure from Western powers. On Wednesday, Iran warned the United States that it would take action if a U.S. aircraft carrier that left the Persian Gulf through the Strait of Hormuz were to return. The United States has said that the threats would not cause it to alter military deployments.

Britain added its voice to the chorus Thursday, with Defense Minister Philip Hammond cautioning that any attempt by Iran to close the strait would be "illegal and unsuccessful."

His comments, delivered during his first visit to the Pentagon since he became the top defense official last fall, appeared to indicate strong resolve by the West to keep the strategically important strait open for trade.

"It is in all our interests that the arteries of global trade are kept free, opening and running," he said, according to news reports.

The official news agency IRNA quoted one senior member of the Iranian parliament as saying that pressure from "bullying nations" served only to make the country "more resilient."

Press TV, an official Iranian news site, headlined its report with a warning against "saber-rattling" by Britain.

Relations between Iran and Britain deteriorated after protesters stormed the British Embassy in Tehran in November. Britain responded by downgrading relations to their lowest level in 20 years, expelling Iranian diplomats from Britain and ordering Iran's embassy in London to shut down.

Mixed in with the bluster Thursday was tacit acknowledgement of the potential economic hardships that stronger sanctions could cause in Iran, where the economy is heavily reliant on oil exports, including through the Strait of Hormuz.

Iran will "weather the storm," Foreign Minister Ali Akbar Salehi said Thursday, adding that he was "not concerned at all" about the imminent ban on its oil by the EU. The economic minister, Shamseddin Hosseini, likened the ban to "an economic war."

''Iran, with divine assistance, has always been ready to counter such hostile actions, and we are not concerned at all about the sanctions," Salehi told a Tehran news conference. "Just as we have weathered the storm in the last 32 years with the hold of God and efforts that we make, we will be able to survive this as well."

But he also said that Iran would like to reopen talks with the West on the nuclear issue, suggesting that the renewed talks be held in Turkey. Salehi appeared at the news conference alongside the Turkish foreign minister, Ahmet Davutoglu, who said that Iran had responded favorably to the notion of resuming negotiations. That was interpreted in Paris as an effort by Iran to buy time to continue its nuclear program.

The EU foreign policy chief, Catherine Ashton, has been waiting for Iran to respond formally to an October letter suggesting new rounds of negotiations, which broke off a year ago when Iran presented its own set of preconditions, including a lifting of sanctions, that the West considered unacceptable.

President Barack Obama signed legislation last weekend imposing sanctions against Iran's Central Bank intended to make it more difficult for the country to sell its oil. Europe took steps Wednesday toward imposing an oil embargo on Iran.

In 2010, oil from Iran accounted for some 5.8 percent of total European imports of crude.

EGYPT:

The prosecution in the Hosni Mubarak trial said on Wednesday it has concluded that Egypt's ousted president, his security chief and six top police officers were the "actual instigators" of the killing of more than 800 protesters during last year's popular uprising that brought down his regime.

Mubarak and his seven co-defendants are facing charges of complicity in the killings and could face the death penalty if convicted.

Wednesday's hearing coincided with the second day of voting in the third and final round of parliamentary elections that began on Nov. 28. Even before the final round, Islamists led by the Muslim Brotherhood, Egypt's largest political group, were assured of a majority in the new legislature. They are likely to bolster their gains in the final round, since many of the nine provinces voting have been traditional Islamist strongholds.

The elections, the fairest and freest in decades, have attracted a heavy turnout. Final results were due to be announced Jan. 13.

The military officers who have taken over from Mubarak when he stepped down on Feb. 11 say presidential elections will be held before the end of June, but they are yet to announce an exact date for the vote and for formally handing over power to a civilian administration.

Activists have been pointing to what they see as mounting signs of a confluence of interests between the Brotherhood and the ruling generals. They fear their understanding could lead to shelving reforms for greater democracy they hoped for after Mubarak's fall.

Activists accuse the Brotherhood of opportunism and a determination to seize power. The group initially stayed out of the anti-Mubarak uprising, though its disciplined followers later lent considerable street muscle to protesters' street battles against security forces and Mubarak loyalists. It has since largely stayed out of antimilitary demonstrations, arguing that it was relying on the democratic process, rather than protests.

The Mubarak trial brings out conflicting visions. Reformers and the victims' families clamor for a full measure of justice, while many others want the turbulence to end so that Egypt's battered economy can move toward stability.

On Wednesday, chief prosecutor Mustafa Suleiman said the defendants clearly authorized the use of live ammunition and a shoot-to-kill policy against peaceful protesters.

He also complained that the prosecution had to launch its own probe after security authorities ignored the prosecution's requests for help in the inquiry. Prosecutors interviewed hundreds of witnesses, physicians and police officers to build its case.

Suleiman said the decision to use live ammunition was taken on Jan. 27 last year, just before the most violent day of the 18-day uprising that forced Mubarak to step down on Feb. 11.

Dubbed the "Friday of Rage," Jan. 28 also saw the deployment of army troops in Cairo and across much of the nation, as well as the yet to be explained disappearance of security forces. The objective, he said, was to kill enough protesters to force the rest to disperse.

Another prosecutor, Mustafa Khater, told the court that special police forces armed with automatic rifles targeted the heads, chests and eyes of protesters.

The prosecution also showed video of the violence taken by TV stations. They showed police officers loading up their weapons with live ammunition and police and fire engine trucks chasing protesters and running them over. One video showed a police officer perched on top of a police car and killing a protester with a gunshot to the head.

"The defendants before you in the cage are the actual instigators and are the ones who gave police officers the order to shoot," said Suleiman. He also said that the prosecution has evidence that the regime used "thugs" against the protesters.

"The protesters were peaceful, and it was the police that started firing on them," he said. Suleiman said the Interior Minister and the country's intelligence agency ignored or provided little data in response to the prosecution's requests for information on the circumstances surrounding the killings.

He said widespread disarray in the state at the time of the probe — around mid-February — or the wish to protect their own may have been behind the lack of cooperation.

Khater told the court that Interior Ministry officials used thugs and hardened criminals to provoke the protesters into violence. The thugs, he said, pelted protesters with rocks, prompting them to act in self defense and appear not to be peaceful.

The hearings resumed on Thursday for the third and final day of the prosecution's opening statement.

LIBYA:

Libya risks sliding into civil war unless it cracks down on the rival militias which filled the vacuum left by Muammar Gaddafi's downfall, the head of the interim administration said after an outbreak of violence in the capital.

Mustafa Abdel Jalil, chairman of the National Transitional Council (NTC), issued the stark warning in response to a gun battle between militias in one of Tripoli's busiest streets which killed four fighters.

More than two months after anti-Gaddafi fighters captured and killed the former dictator, Libya's new rulers still struggle to exert their authority as rival militia leaders refuse to cede control of their fighters and hand in their arms.

"We are now between two bitter options," Abdel Jalil told a gathering in the eastern city of Benghazi late Tuesday. "We deal with these violations (clashes between militias) strictly and put the Libyans in a military confrontation which we don't accept, or we split and there will be a civil war."

"If there's no security, there will be no law, no development and no elections," he said. "People are taking the law into their own hands."

The militias, drawn from dozens of different towns and ideological camps, led the nine-month uprising, backed by NATO air strikes, to end Gaddafi's 42-year rule. Now though, they are reluctant to disband and lay down their arms.

They are vying with each other for influence, and believe that to ensure they receive their due share of political power they need to keep an armed presence in the capital.

The NTC has begun to form a fully functioning army and police force to take over the task of providing security. Abdel Jalil acknowledged though that progress has been too slow.

"We have no security because the fighters have not handed over their weapons despite the chances they've been given to do so through local councils," he said. "The response has been weak so far, people are still holding on to their weapons."

Tripoli is now an unruly patchwork of fiefdoms, each controlled by a different militia. Police are rarely seen - except when directing traffic - and there is no sign of the newly created national army.

Although their presence on the streets significantly declined toward the end of last month, militias still occupy security compounds previously used by Gaddafi's forces. Their presence increases in the streets of Tripoli as night falls.

Tripoli has two main home-grown militias. One is led by Abdel Hakim Belhadj, an Islamist who spent time in Taliban camps in Afghanistan and now runs his militia from a suite of rooms in a luxury Tripoli hotel. The other is headed by Abdullah Naker, a former electronics engineer who is openly disdainful of Belhadj.

There are also the militias from outside town. Fighters from Zintan, an anti-Gaddafi bastion south-west of the capital, control the international airport.

Militias from the city of Misrata, east of Tripoli, have mostly withdrawn from central Tripoli but keep a presence in the eastern outskirts of the city. Fighters from the Berber, or Amazigh, ethnic minority mark out their territory with their blue, green and yellow flags.

Another set of fighters from the east of Libya, the original heartland of the anti-Gaddafi revolt, add to the mix. The closest to the NTC's leaders, their ambitions to form the core of the new national army irk their rivals.

Until Abdel Jalil issued his warning about the militias, most senior government officials preferred to avoid the issue. "What militia?" Prime Minister Abdurrahim El-Keib told Reuters this week when asked about the rival groups.

"Look around you! ... We're building the Libyan National Army and we want to guarantee that this army is effective when we need it," he said.

The militias are united by their shared experience in fighting Gaddafi. Their leaders profess loyalty to the NTC, and say they want to work together to build a new, democratic Libya.

This is a fragile unity which breaks down whenever one group impinges on the territory of another. Flare-ups in violence are most commonly triggered when fighters refuse to submit to checks when passing through a rival group's checkpoint, or when one group detains fighters from another militia.

The spark for a gun battle in Tripoli Tuesday was, by some accounts, the arrest by a Tripoli militia of several fighters from Misrata. The arrested men's comrades attacked the building where they were being held using anti-tank weapons and heavy machine guns.

"Some of them screamed 'We're from Misrata, you dogs!' while they were firing," said a Tripoli fighter.

Wednesday, a few guards carrying semi-automatic machine guns stood outside the compound on Zawiya Street which had been the focus of the fighting a day earlier.

Militia vehicles that had blocked the intersection leading to the compound had been removed and the street, lashed by heavy rain, was mostly empty.

But the potential for outbreaks of violence remains.

"The tension will always arise because there are many groups," said Hakim Abdul Rahman Hammad, a former military pilot who now heads the military council of Tobruk, a city on Libya's border with Egypt.

"There are many armed groups and there might be interaction among them that ends up in confrontation," he told Reuters.

The militias' dominance in Libya has now reached a crucial crossroads, with the appointment this week of a chief of staff for the new national army.

Until now, the militias have said they cannot surrender their weapons and allow their fighters to be absorbed into the army because the command structure was not in place.

By naming Yousef al-Manqoush, a retired general from Misrata, as head of the armed forces, the NTC presents the militias with a choice - they must either start ceding control to the army or openly defy Libya's leadership.

In an interview broadcast on Libyan television, al-Manqoush said the mechanism for absorbing former militia fighters into the military would be ready soon.

"My message to the revolutionaries is ... they have to prove to the world once again that they are patriotic Libyans, prove to world that they will integrate into the state's institutions and work on building a strong national military," he told Libya Al Hurra television station.

But the militias will require convincing. One member of Misrata's military council said he was still not sure the time was right for the militias to relinquish their role.

"When the state proves it's able to take responsibility to protect border and secure the country, then we will hand our arms," said the council member, Fethi Bashaga.

Naker, the head of one of Tripoli's two main, home-grown militias, said he welcomed the appointment of an army chief of staff and said he would cooperate with him.

But he too, had conditions for handing over weapons and advising his men to join the national army.

"We will do so after we guarantee the revolutionaries' rights and their salaries," he told reporters Sunday.

"We gave them the absolute freedom to join the military, the police or hand their arms and take up a civilian job, but before we hand them (fighters and weapons) over we want a mechanism, we want to know how much they will be paid," Naker said.

SYRIA:

A senior Syrian official has defected to the opposition movement in protest of the government’s ten-month crackdown on peaceful protests that has claimed thousands of lives across the country.

Mahmoud Souleiman Hajj Hamad, the head inspector of the country’s defense ministry, held a press conference on Wednesday in Cairo to announce his defection.

In an interview with Al Jazeera, Hamad, who was also an auditor for the interior ministry, denied government claims that the ongoing violence was caused by “terrorists” aided from abroad.

“We were analyzing and seeing for ourselves that the regime's story about armed gangs going out and killing protesters was all lies," he said. "I confirm there are no armed gangs, they are all unarmed protesters.”

Hamad said the government has spent about $40mn on loyalist militias to crush demonstrations since March, as security forces, at times backed by tanks, laid siege to protests hubs across the nation.

“While auditing, I found two billion Syrian pounds [$40m] paid out to the regime's paid thugs, and seen an increase in the spending of the intelligence and defense ministries for the purpose of paying thugs.

“We saw them preparing and heading out in their armored vehicles and buses toward the young protesters and killing them. It has been happening since the beginning of the protests.”

Hamad also said most government officials and employees want to defect but are afraid of the consequences.

"Syrian government officials live in a kind of prison...No one can go anywhere without being accompanied by a member of the security services," he added.

Hamad continued that he has seen proof that Iran and Iraq are aiding the Syrian government's crackdown.

"The Syrian regime receives financial support from Iraq and Iran," said Hamad, without providing details.

Hamad also praised the Free Syrian Army, a group of up to 25,000 members of the country's security forces who have defected to protect civilians from the government's crackdown.

In an unrelated event, Riyadh Al-Asaad, the head of the Free Syrian Army, called on the Arab League on Thursday to withdraw its 100-strong observer mission from the country over its perceived "failure" to halt the violence, echoing demands from opposition groups.

Even so, Nabil Elaraby, Arab League secretary-general, has said that the mission will not be cut short.

Asaad issued the call after the Arab League turned to the United Nations for help and admitted "mistakes" in the monitoring mission launched less than two weeks ago.

"We hope they will announce that their mission was a failure and that they will be withdrawn," Asaad, who is based in Turkey, said in the telephone interview with the AFP news agency.

"We call on the Arab League to step aside and let the United Nations take over responsibility as it is more apt to find solutions," he added.

Sheikh Hamad bin Jassem al-Thani, Qatar's prime minister who heads an Arab League task force on Syria, reportedly discussed the observer mission with UN leader Ban Ki-moon in New York on Wednesday.

"We are coming here for technical help and to see the experience the UN has, because this is the first time the Arab League is involved in sending monitors, and there are some mistakes," said Sheikh Hamad, quoted by Kuwait's KUNA news agency.

A UN spokesman said only that Ban and the al-Thani "discussed practical measures by which the United Nations could support the observer mission of the Arab League in Syria."

Opposition groups have accused the Syrian government of misleading Arab League observers by taking them to areas loyal to the government, changing street signs to confuse them, and sending supporters into hostile neighborhoods to give false testimony.

Activists also said government loyalists were painting military vehicles blue to make them look like police vehicles.

They called this a ploy that allows the government to claim it has pulled the army out of heavily populated areas in accordance with the Arab League plan that was supposed to end the government's crackdown on dissent.

The plan requires the government to remove security forces and heavy weapons from city streets, start talks with opposition leaders and free political prisoners.

But the Arab League has acknowledged that killings have gone on, even with the observers on the ground. Activists put the death toll at more than 390 people since the mission began on December 26.

As the observers continued their work on Thursday, security forces and pro-government groups shot dead at least 22 people, most of them in province of Deir Ezzor, activist groups said.

TURKEY:

Middle East powerhouse Turkey on Wednesday warned against a sectarian Cold War in the region and said rising Sunni-Shiite tensions would be "suicide" for the whole region.

"Let me openly say that there are some willing to start a regional Cold War," Foreign Minster Ahmet Davutoglu told state-run Anatolian news agency before heading to Shiite Iran.

"We are determined to prevent a regional Cold War. Sectarian regional tensions would be suicide for the whole region," Davutoglu said, adding such effects would last for decades.

"Turkey is against all polarizations, in the political sense of Iran-Arab tension or in the sense of forming an apparent axis. This will be one of the crucial messages that I will take to Tehran."

Majority Sunni Turkey, which borders Iran, Iraq and Syria, has attempted to play a moderating role as rivals Shiite Iran and Sunni powerhouse Saudi Arabia jockey for influence in a region undergoing sweeping changes brought on by "Arab Spring" popular uprisings.

Davutoglu is expected to hold talks in Tehran later on Wednesday on Iran's nuclear program and developments in neighboring Iraq and Syria.

The United States and the European Union stepped up pressure on Iran on Wednesday with European diplomats agreeing in principle to ban Iranian oil imports and Washington sending its Treasury Secretary to Asia to discuss new sanctions.

And Iran has threatened to take action if the U.S. Navy moves an aircraft carrier into the Gulf, Tehran's most aggressive statement yet after weeks of saber-rattling as new U.S. and EU financial sanctions take a toll on its economy.

"Turkey is fiercely against new regional Shiite-Sunni tensions, or an anti-Iran or similar tensions arising like in the Gulf," Davutoglu said.

He singled out the case of neighboring Iraq, which is splitting up into sectarian and ethnic fiefdoms, with Kurds consolidating their autonomy in the north, Shiites dominant across the south and entrenched in Baghdad, and Sunnis exploring whether to set up their own autonomous region in the centre and west.

"Our Iraq policy foresees close contact with all sides. No one should make a mistake here. No one should act with a conviction that one ideology, one sect, one ethnicity could dominate in any country as it was the case in the past. The societies in the region want a new political understanding."