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TRENTON, N.J.  — New Jersey lawmakers received a sobering update of the state's finances Wednesday — with revenues growing at half the anticipated rate and the state's economy projected to lag the nation's well into next year.

The shortfall has Democrats questioning the "Jersey Comeback" Gov. Chris Christie has been touting and the viability of the 10 percent income tax cut he has proposed.

Christie wants to close the current year's budget gap by borrowing against the state's transportation capital fund, reducing salary increases and spending less in other areas. His budget still contains $183 million to fund the first portion of a personal income tax cut that will cost $1.4 billion when fully phased in four years from now, however.

"In our view, investing in a modest across-the-board income tax cut that will improve New Jersey's long-term economic competitiveness is and ought to be a top policy priority for New Jersey," Treasurer Andrew Eristoff told the Assembly Budget Committee.

Christie also did not waver from the tax cut that is part of his $32 billion budget for the fiscal year that starts July 1, promoting it during a transportation forum in Trenton.

But Assemblyman Vincent Prieto, chairman of the budget panel, said the state isn't in a position to offer a tax break that disproportionately benefits the wealthy, as Christie's would, since they pay the most in personal income taxes. Prieto left open the possibility of a state budget being passed without a tax cut.

Assemblyman Gary Schaer said borrowing money for transportation needs while funding a tax cut is like "going to your bank and borrowing money to deposit into your checking account that you must later repay with interest."

New Jersey is now projected to take in $676 million less than forecast through July 2013, according to the administration's revised revenue calculation. The Legislature's budget expert, David Rosen, now anticipates the shortfall at $1.3 billion over the same period.

Eristoff and Rosen, who presented their revised budget forecasts in separate sessions to the panel, both said New Jersey's revenue was growing, but at a slower pace than expected. Rosen said the state has realized half of the $1 billion in increased revenue that was forecast for this fiscal year, with no way to make up the shortage with just five weeks remaining.

Though the two revenue estimates are only one percentage point apart, Christie said the Office of Legislative Services' projection is not to be believed. He lambasted Rosen as a partisan operative who is catering to Democrats' agenda.

"This year, you have a large number of Democrats who do not want to cut taxes for anybody in New Jersey for any reason," Christie said. "There is more than enough room to cut taxes for the people of this state."

OLS is nonpartisan, providing research and other services to legislators of both parties. Rosen said projections from both OLS and the administration are usually slightly off-target.

The Senate and Assembly have offered their own tax cut plans, though they focus tax relief on the middle-class and poor. The Senate plan would cut income taxes by 10 percent over four years, based on earned income up to $250,000 and property taxes paid up to $10,000. The Assembly's plan offers a 20 percent credit to those earning up to $250,000 on the first $10,000 in property taxes paid — 25 percent for seniors and the disabled — funded partially by reinstating a surcharge on millionaires, which Christie previously vetoed.

Democrats who control the Legislature have five weeks to strike a deal with Christie on a balanced budget. The state constitution requires that the budget remain in balance; therefore, news of lagging tax collections must be met with corresponding cuts in spending.

Moody's Investors Service this week predicted that the state's economic recovery would remain muted through next year and would lag that national fiscal picture.

Despite that, the budget now relies on revenue growth of 8.6 percent from all sources, more than double the national average.

"We think at this point there is no reason for us to take an aggressively dark view of expectations," Eristoff said.

NEW YORK  - Singer Elton John has been hospitalized with a serious respiratory infection and on Thursday canceled three nights of performances this weekend of his "The Million Dollar Piano" show at Caesars Palace in Las Vegas.

 In a statement released on his website, the British entertainer, whose hits include "Rocket Man," "Your Song" and "Bennie and The Jets," apologized for the decision and told fans he hoped to be performing soon.

 "It feels strange not to be able to perform these 'Million Dollar Piano' concerts at The Colosseum. I love performing this show and will be thrilled when we return to The Colosseum in October to complete the eleven concerts soon to be scheduled," he said.

 The singer said he developed a serious respiratory illness while performing on Sunday. After the condition worsened he was treated at Cedars-Sinai Medical Center in Los Angeles on Wednesday. Following tests, he was given antibiotics and told not to perform for a week.

 John opened his Las Vegas act last September and began a second series of performances in February. A child piano prodigy, John, 65, rose from a part-time pub player to become one of the most successful recording artists of all time.

 He completed a 5-year residency at the Colosseum in 2009 with "The Red Piano", which ran for 241 shows.

CAIRO  — Egypt's wide-open presidential election, which was in its second day of voting Thursday, is showing how deeply polarized the nation has become, with backers of rival Islamists and former regime figures each vowing they cannot let the other rule.

The impact of their rivalry goes beyond the key question of who gets to rule Egypt for the next four years.

An Islamist president will mean a more religious government, while many fear a figure from Hosni Mubarak's ousted regime occupying the land's highest office would keep Egypt locked in dictatorship and thwart democracy.

The two candidates that inspire the most polarized opinions are Mohammed Morsi of the Muslim Brotherhood, the country's largest political group, and Ahmed Shafiq, a former air force commander and Mubarak's last prime minister, who was booted out of office by street protests several weeks after his former boss.

In the Mediterranean port city of Alexandria, the mother of a young businessman who was beaten to death by policemen in 2010 warned of a "second revolution" if one of the "feloul" — a member of the Mubarak regime, like Shafiq — is elected. The killing of her son, Khaled Said, helped ignite the uprising against Mubarak last year.

"I don't feel that my son has received justice," Said's mother, Laila Marzouk, said Thursday after she voted for Hamdeen Sabahi, a leftist candidate who is a favorite among revolutionaries. "If one of the feloul of Mubarak's regime wins, another revolution will start and I'll be among the first to take part."

Beside Shafiq, the only other Mubarak regime figure running is Amr Moussa, who served as foreign minister for 10 years before he became the Arab League chief in 2001.

Resentment of the old regime and its symbols runs deep in some of Cairo's poor neighborhoods.

In the Dar el-Salam district, piles of festering trash sit outside polling centers and residents complain that their life has taken a turn for the worse after last year's uprising because some of the basic services, like trash collection and traffic policing, have disappeared — some suspect deliberately.

"The municipality is not functioning, trash collectors are not working and there are no traffic policemen out on the streets," said Ahmed Abdo, a 51-year old minibus driver.

"The old regime is still here and is fighting back ... they want us to regret that we revolted."

His friend Ismail Eid, 43, agreed. "So long as the new president is backed by the poor, we will be his protectors. We will crush whoever tries to get in his way."

Both Shafiq and Morsi have repeatedly spoken of the dangers, real or imaginary, of the other becoming president. Morsi has said there would be massive street protests if a "feloul" wins the vote. They can only win if an election is rigged, he warned.

Shafiq, on his part, has said it would be "unacceptable" if an Islamist takes the presidential office, echoing the rhetoric of Mubarak, his longtime mentor who devoted much of his 29-year rule to fighting Islamists. Still, Shafiq's campaign has said it would accept the election's result.

While a Shafiq victory could spark protests, the deeper problem is whether Egypt's multiple power centers will be able to work together no matter who wins. Egyptians are eager for the new leader to rebuild the nation, wracked by more than a year of unrest, crime and a faltering economy.

A major issue is how a president will get along with the Islamist-dominated parliament, where the Brotherhood alone holds nearly half the seats and ultraconservatives known as Salafist have another 20 percent.

Also looming is the writing of a new constitution, already the source of contention. The Brotherhood and Islamists tried to control the panel tasked with writing the charter, sparking a backlash that led to the dissolving of the panel by a court ruling.

There is also the question of the powers that should be retained by the military after a president is elected. Many are concerned that the generals who took power after Mubarak's fall on Feb. 11, 2011, will try to retain influence.

The two days of voting, which end Thursday, are not expected to produce an outright winner among the 13 candidates vying for the post. If no one gets at least 50 percent of the vote, the top two finishers will go to a runoff June 16-17. The winner will be announced June 21.

To enourage a bigger turnout, the government has given the day off to workers and extended voting by one hour. Polls will now close at 9 p.m.

The generals who took control after Mubarak was ousted have promised to hand over power by July 1, repeatedly assuring critics that they have no wish to remain in charge. There are fears, however, that they could retain significant powers on matters of national security and key foreign policies.

"I like the personality of Shafiq. He is strong enough to lift the country," said Suheir Abdel-Moamen, one of several women standing in line waiting to vote in the middle class Cairo district of el-Zawiya al-Hamra. Somaiya Imam, still undecided on who to vote for, replied with a reference to Islamist candidates, saying: "Don't you think we should vote for the candidate who holds the Quran?"

"We voted for them before and they let us down," Abdel-Moneim responded, referring to the Brotherhood's victories in last year's parliamentary elections. "They want everything — the presidency, parliament and government. They are never satisfied."

A woman standing behind the two chipped in: "But he (Shafiq) is a Mubarak's associate."

Sabahi, who adopts the socialist ideas of Egypt's late leader Gamal Abdel-Nasser, has been the choice of many who neither want an Islamist or a Mubarak-era figure for president. Others have turned to Abdel-Moneim Abolfotoh, who is an Islamist but is seen by some liberals as moderate enough.

In Cairo's northern Matariya district, a young IT specialist who asked not to be identified said she decided to vote for Sabahi as the middle-ground candidate.

"I wanted to vote for Ahmed Shafiq, because I am convinced he is the right man for the moment, but because I am afraid of what Islamists might do, I changed my mind and voted for Sabahi," she said. "Islamists either Salafis or Brotherhood are dying to hijack power. I am not going to give my vote for them."

Shafiq has been openly disparaging of the pro-democracy youth groups who led the 18-day uprising that forced Mubarak out of office 15 months ago. Critics accuse him of being too cozy with the generals who took over from Mubarak and whose own reputation is tainted by human rights abuses and authoritarian tendencies.

But with his strongman image, he has appealed to Egyptians who crave stability and fear Islamists.

Shafiq was met by several dozen protesters screaming "down with the feloul" as he arrived to vote in an upscale neighborhood east of Cairo on Wednesday afternoon. Some protesters showed their contempt by holding up their shoes in his direction. On his way out, some mobbed him, swinging their shoes at him as his security hustled him into his car.

BEIJING  - China's central government plans to spend 170 billion yuan ($27 billion) this year to promote energy conservation, emission reductions and renewable energy, the Ministry of Finance said in a statement on its website on Thursday.

 The ministry said China plans to promote more use of energy-saving products and low or no-emission power generation such as solar and wind. It also wants to accelerate the development of renewable energy, as well as energy-saving technologies, such as electric and hybrid cars.

 China is the world's biggest emitter of carbon dioxide (CO2), followed by the United States.

 A report by the International Energy Agency (IEA) on Thursday said China spurred a jump in global CO2 emissions to their highest ever recorded level in 2011, offsetting falls in the United States and Europe.

 However, its CO2 emissions per unit of GDP, or its carbon intensity, fell by 15 percent between 2005 and 2011, the IEA said, suggesting the world's second-largest economy was finding less carbon-consuming ways to fuel growth.

 Longer term, China is targeting cuts to its 2020 greenhouse gas emissions by 40-45 percent compared with 2003 levels and aims to boost its use of renewable energy to 15 percent of overall energy consumption.

 Negotiators from over 180 nations are meeting in Bonn, Germany, until Friday to work towards getting a new global climate pact signed by 2015. The aim is to ensure ambitious emissions cuts are made after the Kyoto Protocol expires at the end of this year.

 ($1 = 6.3447 Chinese yuan)

MIAMI  — Federal forecasters predict there will be about nine to 15 storms during this year's Atlantic hurricane season.

The National Oceanic and Atmospheric Administration released its initial outlook Thursday for the six-month storm season that officially begins June 1.

The season got an early start when Tropical Storm Alberto formed last Saturday off South Carolina's coast.

The agency predicts that this year's total will include four to eight hurricanes. One to three of those could become major hurricanes.

This season marks the 20th anniversary of Hurricane Andrew's catastrophic landfall in South Florida as a Category 5 storm.

Last year marked the sixth consecutive year without the U.S. landfall of a major hurricane, which are classified as Category 3 storms with sustained winds of 111 mph or higher.

JOHANNESBURG  - South African stocks ended slightly higher on Thursday in tandem with global markets with gold miners such as Harmony the top gainers on the local bourse, lifted by stronger bullion prices and bargain chasers.

 Third-biggest producer Harmony surged 6.4 percent to 82.04 rand as bullion prices snapped three days of losses to rise as high as $1,577.50 an ounce.

 "It looks like people are bottom picking in case the goal posts move again. In the long-term the fundamentals are still in place for the gold price," says SBG Securities mining analyst David Davis, pointing to mounting market jitters over the Greek election next month, which could hasten the country's exit from the euro zone, and lingering concerns over U.S. debt.

 The JSE Top-40 blue-chip index was up 0.57 percent at 29,137.84 and the broader All-share index gained 0.48 percent to 33,046.13.

 Global stocks edged up as investors locked in bargains on equities, gold and oil, whose prices are beaten down due to euro zone headaches.

 Gold, typically a safe-haven option, has been moving in line with riskier assets as the euro zone debt problem grinds on.

Gold Fields, down about 12 percent year-to-date, added 5 percent to 110.06 rand. Bigger rival AngloGold Ashanti also found favour, adding 3.7 percent to 301.90 rand.

 Johannesburg bourse's volatility index -- a measure of investor fear similar to the CBOE Volatility Index in the United States -- rose to 23 on Wednesday, its highest point since early March.

 "We are strong one day and then weak the other day, so I see pretty much the same, going sideways, going nowhere," said Barend Saayman, a portfolio manager at PSG Konsult.

 Some 218 million shares were traded, according to preliminary bourse data, from a total 227 million in the previous session.

In a rare glimpse into cyberwarfare tactics, a top U.S. official has explicitly acknowledged that the U.S. government hacked into websites run by al-Qaida's affiliate in Yemen, changing advertisements that boasted about killing Americans into advertisements that underscored the deaths of Muslim civilians in al-Qaida terror attacks.

 During her keynote speech at the Special Operations Command gala dinner in Tampa, Fla., on Wednesday night, Secretary of State Hillary Clinton said that State Department specialists attacked sites tied to al-Qaida in the Arabian Peninsula (AQAP) that were trying to recruit new members by "bragging about killing Americans."

 "Within 48 hours, our team plastered the same sites with altered versions of the ads that showed the toll al-Qaida attacks have taken on the Yemeni people," Clinton said. "We can tell our efforts are starting to have an impact because extremists are publicly venting their frustration and asking supporters not to believe everything they read on the internet."

 It had been suspected that the U.S. government played some role in shutting down several jihadi web forums earlier this year, but officials from the CIA and counterterrorism community had previously denied any involvement.

 Highlighting the government's use of "smart power" to fight extremists, Clinton said that military and civilian specialists around the world are focused on preempting, discrediting, and outmaneuvering extremist propaganda. Calling them  "a digital outreach team," Clinton said the specialists are fluent in Urdu, Arabic, and Somali. The group is "already patrolling the web and using social media and other tools to expose a-Qaida's contradictions and abuses, including its continuing brutal attacks on Muslim civilians."

 Clinton also said that under her tenure the State Department has become more active in working with the Defense Department and the intelligence community to use diplomacy as a tool to fight terrorism of all forms and extremist propaganda.

 The Bureau of Conflict and Stabilization Operations, according to Clinton, was created to find ways for civilian diplomats and experts to better aid military operations in hot spots. Clinton said the bureau sent a team of experts ahead of the Special Operations mission in Central Africa to talk to village leaders and rebels who would be open to defecting or helping the U.S. find the warlord Joseph Kony.

 Clinton said the State Department's Counterterrorism Bureau is currently spearheading a diplomatic campaign around the world, working with local governments and leaders to squeeze any funding venues for al-Qaida and its affiliates.  She said the State Department trains nearly 7,000 police, prosecutors, and counterterrorism officials from more than 60 countries.

 "We're expanding our work with civil society organizations in specific terrorist recruiting hot spots -- particular villages, prisons, and schools -- to disrupt the process of radicalization by creating jobs, promoting religious tolerance, and amplifying the voices of victims of terrorism," said Clinton.

NEW DELHI  — A state in western India has declared war on animal poaching by allowing forest guards to shoot hunters on sight in an effort to curb rampant attacks on tigers and other wildlife.

The government in Maharashtra says injuring or killing suspected poachers will no longer be considered a crime.

Forest guards should not be "booked for human rights violations when they have taken action against poachers," Maharashtra Forest Minister Patangrao Kadam said Tuesday. The state also will send more rangers and jeeps into the forest, and will offer secret payments to informers who give tips about poachers and animal smugglers, he said.

No tiger poachers have ever been shot in Maharashtra, though cases of illegal loggers and fishermen being shot have led to charges against forest guards, according to the state's chief wildlife warden, S.W.H. Naqvi.

But the threat could act as a significant deterrent to wildlife criminals, conservationists said. A similar measure allowing guards to fire on poachers in Assam has helped the northeast state's population of endangered one-horned rhinos recover.

"These poachers have lost all fear. They just go in and poach what they want because they know the risks are low," said Divyabhanusinh Chavda, who heads the World Wildlife Fund in India and is a key member of the National Wildlife Board, which advises the prime minister. In many of India's reserves, guards are armed with little more than sticks.

India faces intense international scrutiny over its tiger conservation, as it holds half of the world's estimated 3,200 tigers in dozens of wildlife reserves set up since the 1970s, when hunting was banned.

Illegal poaching remains a stubborn and serious threat, with tiger parts in particular fetching high prices on the black market because of demand driven by traditional Chinese medicine practitioners.

According to the Wildlife Protection Society of India, 14 tigers have been killed by poachers in India so far this year — one more than in all of 2011. The tiger is considered endangered, with its habitat shrinking more than 50 percent in the last quarter-century while its numbers declined from an estimated 5,000-7,000 in the 1990s, according to the International Union for Conservation of Nature.

Eight of this year's tiger poaching deaths in India occurred in Maharashtra, including one whose body was found last week chopped into pieces with its head and paws missing in Tadoba Tiger Reserve. Forest officials have also found traps in the reserve, where about 40 tigers live.

Naqvi said encounters between Maharashtra's forest guards and poachers were rare because poachers generally hunt the nocturnal big cats at night. He said the state's offer to pay informers from a new fund worth about 5 million rupees ($90,000) would likely be more effective. "We get very few tips, so this will really help," he said.

But conservationists said the fact that poachers are rarely seen has more to do with low ranger numbers, and that increasing patrols around the clock would help.

Dozens of other animals are also targeted by hunters across India, including one-horned rhinos and male elephants prized for their tusks, and other big cats like leopards hunted or poisoned by villagers afraid of attacks on their homes or livestock.

A recent study on hunting in India noted 114 species of mammals were being actively hunted across the country, with dozens of birds and reptiles also under attack.

"There has been an onslaught going on in India," said William Laurance, a conservation biologist at James Cook University in Australia and one of the three authors of the study, which was published in Biological Conservation journal in April. "It's a serious threat to wildlife, along with habitat encroachment and forest degradation. A lot of species are clinging to survival in remote areas."

It's unclear whether Maharashtra's example in targeting poachers will be followed by other states, though tiger poaching has also been a major problem in Rajasthan and Madhya Pradesh in recent years. The hunting of male elephants for their tusks has skewed the sex ratio, and there are now about 100 female elephants for every male in the south.

According to the April study, some of the most rampant hunting is occurring in the eastern Himalayas, where high numbers of army troops are deployed and some hunt for sport, and in the northeast near the porous border with China and Myanmar, where hunting is a way of life and sometimes an economic necessity for tribal communities.

"The remarkable thing in India is that there is still anything alive at all with 1.2 billion people," Laurance said. "As populations grow, an increase in hunting pressure is a classic thing that happens."

___

ANKARA  - A Turkish lawyer said on Thursday that Israel had offered to pay $6 million to victims of Israel's storming of a Gaza-bound Turkish aid flotilla to settle lawsuits against the Israeli military.

 However, a senior Israeli official who declined to be named said that Israel, having indicated last year that it was prepared to indemnify victims without accepting blame, had not renewed its offer.

Turkey and Israel fell out badly in 2010 when Israeli commandos stormed the Mavi Marmara aid ship to enforce a naval blockade of the Palestinian-run Gaza Strip and killed nine Turks in clashes with activists.

 Ramazan Ariturk, one of several lawyers representing 465 victims and victims' relatives, told Reuters that the Israeli government had made a proposal to him through an intermediary foreign ambassador in Ankara just over one month ago.

 He said the money would have been paid to a Jewish foundation in Turkey for distribution, and been followed by a statement of "regret" for the raid by the Israeli government.

 "I told the ambassador I did not think the offer was appropriate or moral and also discussed the issue with the victims and their friends and they also stated that they could not accept this," Ariturk said.

 The Turkish Foreign Ministry agreed with his decision, saying Israel should have contacted it directly, he said.

 Ariturk declined to disclose the nationality of the ambassador or reveal the name of the Jewish foundation to which the payment would have been made.

 The Turkish Foreign Ministry could not be reached for immediate comment, while Mark Regev, spokesman for Israeli Prime Minister Benjamin Netanyahu, declined to comment.

 Turkey expelled Israel's ambassador and froze all military cooperation with its former ally after a U.N. report into the incident last September largely exonerated the Jewish state.

 Turkey has demanded a formal apology from Israel alongside compensation for victims and the families of the dead, but Netanyahu has only voiced "regret".

 On Wednesday an Istanbul prosecutor submitted an indictment seeking life sentences for four former Israeli military commanders in connection with the raid, including the Chief of General Staff at the time.

 The U.N. report on the raid last September was meant to encourage a rapprochement but ultimately deepened the rift when it concluded Israel had used unreasonable force but that its blockade of Gaza was legal.

 Israel said its marines had been attacked by activists wielding metal bars, clubs and knives when they boarded the Mavi Marmara, and had opened fire in self-defense.

Iran's navy said Thursday it saved an American-flagged cargo ship that was being attacked by pirates in the Gulf of Oman.

An Iranian warship responded to a distress signal from the US-flagged Maersk Texas, a cargo ship of 150 metres (500 feet) and 14,000 tonnes, which was besieged by "several pirate boats," the navy said in a statement reported by the official IRNA news agency.

The cargo vessel "was saved by the navy of the Islamic Republic of Iran" on Wednesday, IRNA added.

The pirates "fled the scene as soon as they spotted the presence" of the warship. Maersk Texas "thanked the Iranian navy and sailed towards its destination safely," it added.

It was the first time the Iranian navy protected a US ship from pirates.

Maersk had sailed from the UAE port of Fujairah, south of the Strait Hormuz at the entrance of the Gulf, and was headed for the United States.

Iran's navy keeps a presence in Gulf of Oman to protect cargo ships and transiting oil tankers and also defend the country against potential threats.

According to Iranian commanders, Iran's navy have carried out hundreds of anti-piracy operations, engaging in hundreds of armed clashes with pirates in the past three years.

The US navy patrolling the area have on a number of occasions rescued Iranian ships. The latest incident was in January when a US warship secured the release of 13 Iranian fishermen near the entrance to the Gulf who had been held captive by pirates for 45 days.

CAIRO  - Egyptians, choosing their leader freely for the first time in history, voted for a second day on Thursday in an election that is a fruit of last year's popular revolt against Hosni Mubarak.

 After six decades under authoritarian, military-backed rule, Egypt's 50 million voters can decide whether to entrust the most populous Arab nation to an Islamist president for the next four years, as well as the Islamist-led assembly they chose earlier.

 But secular candidates like ex-Arab League chief Amr Moussa and Mubarak's last premier Ahmed Shafiq are in with a chance.

 Some voters voice disappointment with the performance of parliament, where the Muslim Brotherhood's party has the biggest bloc. The assembly has been unable to assert itself over the government appointed by the generals who took over from Mubarak.

 Alarmed by rising crime, disorder and a failing economy, some Egyptians favor a man with government or military experience, even if he harks back to the Mubarak era.

 Queues built up outside some polling stations in the baking sun, with many voters determined not to miss their chance to influence the first round. The government declared Thursday a public holiday to allow state employees to cast their vote.

 If no one wins more than half the votes needed for outright victory, the top two will contest a run-off on June 16 and 17. First-round results may be clear by Saturday, but an official announcement is not due until Tuesday.

 "I came yesterday and found it very crowded so I came today," said Khaled Abdou, a 25-year-old engineer voting in Cairo. "I must participate in choosing the president and I hope this leads to stability and the change needed."

 Voting passed off calmly on Wednesday, apart from a stone-throwing attack on Shafiq, 70, a former air force chief.

 Other leading candidates are the Brotherhood's Mohamed Mursi, 60, independent Islamist Abdel Moneim Abol Fotouh, 60, Moussa, 75, who also served as Mubarak's foreign minister in the 1990s, and leftist Hamdeen Sabahy, 57.

 "BETTER CONTROL"

 According to election consultant Ossama Kamel, fewer abuses have occurred in this vote than in the parliamentary poll that ended in January, partly because of lessons learned then.

 He predicted a last-minute rush to the polls on Thursday, with voting time extended, perhaps for several hours.

 "We have seen a lot better control of campaigning on election day than during the parliamentary vote when there were lots of violations, with candidates and their supporters hustling people outside polling stations," he told Reuters.

 The vote marks a crucial stage in a turbulent army-led transition racked by protests, violence and political disputes. The generals who took charge when Mubarak was ousted on February 11, 2011, have pledged to hand over to the new president by July 1.

 Even then the army, whose grip reaches deep into government and the economy, is likely to wield influence for years to come. A tussle over who should write the constitution also means the new president will not know his own powers when he is elected.

 Independent lawmaker Amr el-Shobaki says the president's election marks the start, not the end, of Egypt's transition.

 "Fifteen months in the life of this nation were wasted in anarchy, randomness and unprecedented poor performance that means it is still searching for a way into the interim period," he wrote in Al Masry Al Youm newspaper.

 With no reliable opinion polls, the presidential race is wide open, a pleasant change for Egyptians accustomed to the routinely forged votes of Mubarak's 30 years in power.

 The Muslim Brotherhood said Mursi was ahead after the first day of voting. Moussa's campaign also put Mursi in the lead with its candidate second. Their estimates could not be confirmed.

 "This is the first time we can really choose our president and no one will mess with the result," said Ahmed Shaltout, a 36-year-old lawyer who said he would vote for Mursi.

 Explaining why he favored Moussa, Mohamed Salem, a shopkeeper near the Pyramids, said: "I want security and prosperity like before. We in the tourism sector were the most hurt. We could not count the number of tourists coming into our shops every day. Now we hardly need our fingers to count them."

 SECURITY CONCERNS

 Egyptians appear divided, even within families, between those willing to give Islamists a chance to rule this deeply conservative country and those who put security first.

 "Security is the most important thing of course. If there is security we will have work, money and an economy. If there is no security no tourists will come. That's the first thing," said Sayed Mohamed, 33, a company manager, who supports Shafiq.

 The next president will face huge tasks in reviving Egypt's wilting economy and restoring security. The sprawling police force, which virtually collapsed during the anti-Mubarak revolt, is only a shadow of its once-feared presence.

 Security is Shafiq's strongest card. A former aviation minister, he was appointed prime minister days before Mubarak fell and quit soon afterwards in response to popular protests.

 But his links with the Mubarak era may tell against him.

 When he voted in Cairo, protesters hurled shoes and stones at him, crying: "The coward is here, down with military rule."

 Even with 12 candidates to choose from, many Egyptians seem unconvinced by any of them, resolving to vote for the least bad.

 "None of them is good enough to be president but Mursi is the best of the worst," said Sherif Abdelaziz, a 30-year-old voter in the capital's slum district of Manshiet Nasr.

 "There are lots of poor people, not just me. Many people live amid this rubbish. We need to give them justice, bread, access to hospitals," he said. "If you have money in Egypt, you can go to any hospital and live, if you don't, you die."

 He disparaged Shafiq and Moussa as "feloul", or remnants from the Mubarak era, and said that if either was elected president a new revolution would kick off in Tahrir Square.

 Mubarak, 84, is contemplating the spectacle of a free election from the upscale Cairo hospital where he is confined while on trial for ordering the killing of protesters and for corruption. A verdict is due on June 2, two weeks before any presidential run-off. A death sentence is possible but unlikely.

New Delhi, May 24  India Thursday signed a $640 million (Rs.2,900 crore) deal with Swiss firm Pilatus to buy 75 basic trainers for the Indian Air Force (IAF), an official said.

The Cabinet Committee on Security, the country's highest defence and security decision-making body, had earlier deal with Pilatus for its PC-7 turbo-trainer, he said.

The defence ministry had late last year declared the the winner of the contract following rigourous flight trials.

The Pilatus PC-7 beat the Korean Aerospace KT-1 and the American Hawker-Beechcraft T-6C Texan-II planes in the contest to win the deal.

The Pilatus planes will replace IAF's fleet of 125 Hindustan Piston Trainer-32 (HPT-32) planes, along known as Deepak, from the Hindustan Aeronautics Limited stable.

India had grounded the HPT-32 fleet in 2009 following a series of crashes. The plane had persistent fuel supply system problem that could not be sorted out, resulting in 108 engine cuts, claiming the lives of 23 pilots.

Islamabad, May 24  Pakistan and India Thursday began their two-day talks here, focusing on a liberalised visa regime. New Delhi will also press for action against the perpetrators of the Mumbai terror attack.

The broad agenda for the talks is relaxation of visa regime between the two countries -- multiple visas for traders, and on-arrival visa for the aged and children at the Wagah border checkpost -- progress on probe in the Mumbai terror attack that left 166 people dead, and confidence building measures, reported Geo News.

The Pakistani delegation is led by Interior Secretary Khawaja Siddiq Akbar while the 12-member Indian delegation is led by Home Secretary R.K. Singh.

The last round of home secretary-level talks was held in New Delhi in March 2011.

Interior Minister Rehman Malik Wednesday chaired a pre-meeting session of the talks.

Malik reviewed the progress attained from the last interior secretary level talks between Pakistan and India.

During the two days of talks, India will press for action against perpetrators of the Mumbai terror attack and also on discussion on the issues related to terrorism.

New Delhi is also expected to ask for action against fugitives from Indian law like crime syndicate boss Dawood Ibrahim who are suspected to be sheltering in Pakistan.

Issues like the expeditious release of Indian fishermen and civilians in Pakistani jails are also expected to be taken up for discussions.

The talks between the home secretaries got a fresh momentum after Pakistani President Asif Ali Zardari visited India April 8 and promised to fast-track prosecution of the 26/11 terrorists.

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