Rick Santorum's poll numbers on the rise the wake of Iowa finish, but Romney may be unbeatable in the Granite State

After a strong performance in the Iowa caucus former Pennsylvania senator Rick Santorum received a boost in the latest polls in the 2012 race for the Republican nomination. However, the surveys still show former Massachusetts governor Mitt Romney as the clear frontrunner and firmly cemented as the favourite to win. The fierce battle for the prize of the right to face off against President Barack Obama for the White House has now switched from Iowa to New Hampshire, whose voters go to the polls on 10 January. With the exception of Texas governor Rick Perry, who has moved ahead to the next state of South Carolina, all campaigns are set to wage an intense fight in the rural New England state. The latest batch of numbers from New Hampshire show Santorum growing in support. A Zogby poll showed Santorum now on 11% in the wake of his Iowa win, up from just 3% the week before. Romney meanwhile was down three points to a still commanding 38% with Texas libertarian Ron Paul in second on 24%. (more...)

All eyes in City on US employment data, which is expected to show 150,000 jobs added in December

8.08am: The FTSE 100 has opened up 0.2%. Germany's DAX is up 0.3%, France's CAC up 0.6%, Spain's IBEX up 0.6% and Italy's FTSE MIB up 0.2% 8.00am: Michael Hewson, market analyst at CMC Markets, reckons the euro could fall to the lowest point of 2010.

The 2010 lows at 0.8065 remain some way off but are by no means out of the question at this stage. Pullbacks are likely to find resistance around the 0.8305/10 area and old December lows, while above here re-targets 0.8370. The key resistance remains around the highs for the last three weeks at 0.8425, and only a move beyond here would target a move back towards 0.8450 and even the 200 week MA at 0.8567.

7.53am: Oh dear. The euro has fallen to another fresh low against sterling. The euro is now worth 82.39p - the lowest level since (earlier in) September 2010. (more...)

After taking office in landslide, Portia Simpson Miller pledges to drop Queen as head of state and restore prosperity

Portia Simpson Miller has been sworn in for the second time as Jamaica's prime minister with a pledge to ease poverty, boost the economy, heal political divisions and drop the Queen as head of state. Simpson Miller, who was prime minister for a year and half until 2007, took the oath of office before roughly 10,000 guests on the grounds of the governor-general's official residence. The 66-year-old politician scored a dramatic victory in last week's national elections, leading her centre-left People's National party to a 2-1 margin in parliament over the centre-right Jamaica Labour party. Her opposition faction won a dominating 42 seats in the 63-seat legislature, leaving the incumbent party with 21. Simpson Miller, Jamaica's first female prime minister, takes over from Andrew Holness, a 39-year-old Labour MP who led the government for just over two months. "After being tested and tempered I stand before you today a stronger and better person prepared to be of service to my country and people," Simpson Miller said at the start of a spirited 45-minute speech. (more...)

Hamid Karzai reacts to being sidelined from Taliban talks by ordering US hand over main military prison within one month

Hamid Karzai, furious at being sidelined from Afghan peace talks, has thrown his government into yet another dramatic confrontation with the international community by demanding the US hand over control of its main military prison in Afghanistan.

Officials at the US embassy and Nato headquarters in Kabul scrambled to deal with the unexpected announcement, which comes amid humiliation for Karzai over US efforts to set up an overseas political office for the Taliban despite the minimal involvement of the Afghan government.

Karzai said a commission had been established to oversee the transfer, within a month, of the detention centre at Parwan, which replaced the old prison at Bagram airbase, north of Kabul. Bagram became infamous during the "war on terror" for holding the most "high-value" Taliban and al-Qaida detainees.

The shock announcement coincided with the parading at a press conference of two British private security workers who were arrested in Kabul on Wednesday with a car full of undocumented assault rifles. The government said the two men would be charged for illegal gun running and their company, a Canadian organisation called GardaWorld, would be closed.

Although the US has long agreed in principle to transfer its military prisons to Afghan control, the timetable has repeatedly slipped. The new deadline set by Karzai will be impossible to meet, not least because of grave concerns among the international community about the way Afghanistan treats the prisoners it already has responsibility for.

A UN report in October found that torture was rife in some Afghan prisons, including of inmates that had been transferred from Nato custody.

The Afghan government, however, has drawn up its own report on Bagram that Karzai said detailed "many cases of violation of Afghan constitution and other applicable laws of the country, the relevant international conventions and human rights".

A senior western official closely involved in detention issues said the US was concerned that Afghan guards would have trouble maintaining the equipment at the new Parwan detention facility

Nonetheless, Karzai has been adamant his government should gain complete control over all Afghan prisons, including Bagram and the issue has been one of the key sticking points in negotiations between Washington and Kabul over a much-delayed strategic pact that will determine the US role in the country after 2014.

"It's classic Karzai off his meds moment," said one western official in Kabul, alluding to a long track record of behaviour the international community has regarded as highly erratic.Karzai has successfully deployed such brinkmanship before, not least in August when he stunned the diplomatic corps by ordering that tens of thousands of private security guards should be disbanded within four months. A compromise was eventually reached that will lead to greater government oversight of private security contractors.

Afghan government officials said Karzai was extremely displeased at being kept out of secret negotiations between the US and the Taliban that look set to lead to the establishment of a political office for the insurgent movement in Qatar.

Last month Karzai withdrew his Qatari ambassador to express his anger at the plans. Although Karzai has long favoured political efforts to bring the war to an end, he has insisted that it be controlled and organised by his government. The Taliban think otherwise. In a statement released this week announcing its willingness to set up an office the movement made no mention of the Afghan government whatsoever.

It said the only two parties to the conflict of any importance were the US and the insurgents themselves.

Nato's International Security Assistance Force and the US embassy declined to comment.

At least 72 killed in co-ordinated wave of attacks in Baghdad and Nasiriyah as sectarian tension resurfaces

Bombs targeting Shia Muslims have killed 72 people in Baghdad and southern Iraq in a deadly start to a new year already heightened by fast-increasing sectarian tensions.

Most of the dead were Shia pilgrims walking to the holy city of Karbala from Nasiriyah. A suicide bomber was walking among the men and detonated himself as a soldier tried to tackle him. The blast killed 48 and wounded more than 100.

In Baghdad, a series of bombs shortly after dawn, all in Shia neighbourhoods, killed another 24 people on Thursday. The bombings hit Sadr City, in the north-east of the city, and Qhadimeyah in the north west.

They marked the second co-ordinated attacks targeting Shias, or government security forces, in the past three weeks, underscoring yet again the deep divisions that remain in Iraq nine years after Saddam Hussein was ousted.

The December bombings, which killed more than 60, were claimed by the Islamic State of Iraq, an al-Qaida-inspired Sunni jihadist group that for the past four years has attempted to reignite the sectarian divisions that tore Iraq apart in 2006-07.

The group is almost certainly also the culprit for Thursday's attacks, which were the latest in at least 15 similar events over the past three years that have taken a heavy toll on Iraq's Shias, and in some cases minorities such as Christians and Yazidis.

None of the earlier bombings had been successful in their aim of drawing the Shias back into battle. The various Shia militias, such as the Jeish al-Mehdi – a key protagonist during the sectarian war – have remained stood down for almost three years, in which time a Shia majority government has attempted to consolidate its hold on Iraq's fractured political landscape.

Though not directly related, the latest bombings appear tailored to tap in to new sectarian tensions sparked by Iraq prime minister Nouri al-Maliki's move last month to charge the country's Sunni vice president, Tariq al-Hashemi, with terrorism.

Hashemi has since sought refuge in the Kurdish north, and Sunni legislators in Baghdad have been refusing to turn up to parliament. Iraq's parliamentary speaker, Ousama al-Nujaifi, also a Sunni, has released a statement condemning the latest violence.

However the streets of Iraq's Sunni provinces reportedly remain restive. Sunni heartland areas, such as Anbar and Diyyala, are implacably opposed to Maliki, whom they say is moving to reinforce the post-Saddam dominance of Shias, who are country's majority sect but were widely persecuted under the three-decade rule of the former dictator.

Increasing sectarian conflict in neighbouring Syria is feeding into tensions in Iraq, with tribal leaders in Anbar confirming last month to the Guardian that local men have sought permission to travel across the border to support Sunni anti-regime demonstrators and defectors in clashes with forces loyal to President Bashar al-Assad. The Syrian leader is a member of the Alawite sect, which has ties to Shia Islam.

Senior US officials, including the CIA director David Petraeus, and US army chief of staff, Ray Odierno, have travelled to Baghdad in recent weeks to meet with Iraqi leaders, who they worked closely with until US forces withdrew in mid-December, formally ending the nine year war.

The US and much of Europe fear lingering divisions inside Iraq and hardening sectarian positions elsewhere in the region could prove a combsutible mix.

Restrictions on cybercafes and plans to launch national internet prompt fears users could be cut off from world wide web

Iran is clamping down heavily on web users before parliamentary elections in March with draconian rules on cybercafes and preparations to launch a national internet.

Tests for a countrywide network aimed at substituting services run through the world wide web have been carried out by Iran's ministry of information and communication technology, according to a newspaper report. The move has prompted fears among its online community that Iran intends to withdraw from the global internet.

The police this week imposed tighter regulations on internet cafes. Cafe owners have been given a two-week ultimatum to adopt rules requiring them to check the identity cards of their customers before providing services.

"Internet cafes are required to write down the forename, surname, name of the father, national identification number, postcode and telephone number of each customer," said an Iranian police statement, according to the news website Tabnak.

"Besides the personal information, they must maintain other information of the customer such as the date and the time of using the internet and the IP address, and the addresses of the websites visited. They should keep these informations for each individuals for at least six months."

In recent weeks, users in Iran have complained of a significant reduction in internet speed, reported the reformist newspaper, Roozegar, which has recently resumed publication after months of closure. The newspaper said it appeared to be the result of testing the national internet.

"According to some of the people in charge of the communication industry, attempts to launch a national internet network are the cause of disruption in internet and its speed reduction in recent weeks," Roozegar reported.

Some government websites, however, cited other reasons for the drop in speed.

"If the national internet comes into effect, the internet in the country will act like an internal network and therefore visiting the websites needs permission from the people in charge. Users outside Iran also need permission to visit websites running from inside the country," Roozegar's report said.

Speaking to the Guardian on condition of anonymity, an Iranian IT expert with close knowledge of the national internet project, which he described as a corporate-style intranet, said: "Despite what others think, intranet is not primarily aimed at curbing the global internet but Iran is creating it to secure its own military, banking and sensitive data from the outside world.

"Iran has fears of an outside cyber-attack like that of the Stuxnet, and is trying to protect its sensitive data from being accessible on the world wide web."

Stuxnet, a computer worm designed to sabotage Iran's uranium enrichment project, hit the country's nuclear facilities in 2010. Iranian authorities initially played down the impact of the Stuxnet but eventually admitted the nuclear programme had been damaged by the malware.

"At the same time, Iran is working on software robots to analyse exchanging emails and chats, attempting to find more effective ways of controlling user's online activities," said the expert.

A blogger in Tehran said recent news was of significant concern to the country's online community. "I'm addicted to the internet and can't imagine a day without the global internet," said the blogger. "But Iranians have always found ways to bypass the regime's censorship, for example by using illegal satellite dishes to watch banned television channels, and I'm sure in the 21st century we should be able to find alternatives should they opt to pull out of the world wide web."

The authorities have said for some years that Iran should have a parallel network which would conform to Islamic values and provide "appropriate" services. In April, a senior official, Ali Agha-Mohammadi announced government plans to launch "halal internet".

For Iranian officials, the need for such a network became more evident after the disputed presidential elections in 2009, when many protesters used social networks.

Less than two months before the parliamentary elections,- Iran's first national election since 2009, the regime warned against any online efforts to organise a boycott of the vote and said they would be considered a crime. Iran's bloggers have been prohibited from publishing any satirical materials about the elections or encouraging others to participate in a boycott.

In June, the US was reported to be funding plans to facilitate internet access and mobile phone communications in countries with tight controls on freedom of speech, such as Iran, through a project called "shadow internet" or "internet in a suitcase". Iran responded to the move by stepping up its online censorship by upgrading its filtering system.

Iran is suspected to have sought the support of China for its online censorship campaign but Huawei, a leading Chinese telecoms company, which has been accused of supplying Iran with equipment to enable censorship, denied any wrongdoing. More than 5m websites are filtered in Iran, but many Iranians access blocked addresses with help from proxy websites or virtual private network services. An Iranian official said last year that more than 17 million Iranians have Facebook accounts, although the site remains blocked in Iran.

In April, to mark the 100-year anniversary of when the RMS Titanic set sail from Southampton, an unprecedented auction of artefacts recovered from the ship's wreckage will be held at Guernsey's in Manhattan. See a preview of some of the sunken treasures here

President says armed forces will move away from large-scale ground warfare and focus more on China in wake of budget cuts

President Barack Obama has unveiled plans for America's military future, outlining a historic shift towards a smaller and leaner force that will focus on China and move away from large-scale ground warfare that has dominated the post-9/11 era.

Obama became the first president to announce a strategy change directly from inside the Pentagon – a theatrical gesture designed to underline the significance of the shift. Mindful of the dangers of displaying any weakness over national security in an election year, Obama said he was determined to maintain US military supremacy around the world, but he admitted that the review involved a move to "smaller conventional ground forces" and the removal of "outdated cold war-era systems".

The immediate incentive for the change in tack, set out in a Pentagon strategy paper, is the fiscal crisis and the Congress-led drive for spending cuts. Currently, the Pentagon is under orders to slash $487bn from the resources it had expected to receive over the next 10 years, and those cuts could rise to close to $1tn if Congress fails to reach agreement on alternative reductions by January next year.

Details of the impact of the cuts on military deployments and systems will gradually be rolled out in upcoming budget announcements. For now, Obama and his main advisers, the defence secretary Leon Panetta and general Martin Dempsey, chairman of the joint chiefs of staff, stuck to the highlights.

Among the casualties of the new-look military will be the two elements of the military that have formed the kernel of American global might over the past decade: the army and the marine corps. But with the Iraq war over and US commanders struggling to draw back from Afghanistan, that emphasis on the long-term massive ground mission is seen as fading as a priority, and both will face reductions in personel likely to involve tens of thousands of troops from the current Army numbers of 570,000.

There will also be a move away from the decades-old mantra of US military planners that America must be capable of fighting two wars at any one time. "The two-war paradigm has been an anchor in the way we think about the future. That paradigm is a residual of the cold war," Dempsey said.

That is likely to be siezed upon by Republicans as evidence that the Obama administration is damaging US capability around the world. Obama anticipated that criticism, saying: "Yes our military will be leaner, but the world must know the United States is going to maintain our military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats."

For good measure, he added that the defence budget would continue to be larger than it was at the end of George Bush's term, and larger than the military spending of the next 10 countries put together.

"Make no mistake, we will have the capability to defeat more than one force at any time," Panetta concurred.

The dream of a modern military based on speed and stealth rather than overwhelming ground force has long been desired by military strategists. Donald Rumsfeld made a move towards it in the opening months of the Bush era, but was thrown off course by the 9/11 attacks and the angry US reaction to them in Afghanistan and then Iraq.

Now the Pentagon hopes to get back on that track, with new strategic goals and ambitions. Top of that list, the review has concluded, will be the emerging powers of the Asia-Pacific region amid mounting Pentagon concern about China's growing naval power and investment in high-tech weaponry.

"All trends are shifting to the Pacific. Our strategic challenges will largely emanate out of the Pacific region," Dempsey said.

In terms of the fighting force itself, the increasing reliance on technological warfare is certain to be extended, with the unmanned drone as its centrepiece. Critics on the left are likely to focus on that aspect as evidence of the Obama administration's disrespect for international law and civilian lives.

Panetta said: "As we reduce the overall defence budget, we will protect and in some cases increase our investments in special operations forces, new technologies like unmanned systems, space and in particular cyberspace capabilities and in the capacity to quickly mobilise."

Panetta and Dempsey both recognised that cuts in the strength of US troops would carry security risks. But they said the risks were preferable to doing nothing.

Panetta issued a clear and yet unspoken challenge to the Republican majority in the House of Representatives that has led resistance to the administration's budget plans. He said that if Congress continued along its path towards a further $500bn in defence cuts in January, the country's national security would be in jeopardy and there would be demoralisation within what he called a "hollowed" military force.