Financial life in a big town

OTTAWA

Qantas Airways planes returned to the skies Monday after an Australian court ruled on a bitter labor dispute that had prompted the world’s 10th-largest airline to ground its entire fleet.

A flight from Sydney to Jakarta, Indonesia, took off shortly after Australia’s Civil Aviation Safety Authority gave the “Flying Kangaroo,” as the Australian flag carrier is known, the all-clear to resume flying.

Qantas said in a statement it still expected some delays as it worked to clear the backlog of customers affected by the nearly 48-hour grounding. The airline is adding extra flights and expects its schedule to return to normal within one or two days.

The grounding disrupted the travel plans of tens of thousands of people across the world, and Qantas passengers were gathering at airports in Australia, Los Angeles and elsewhere in the hopes of finally getting to their destinations.

The airline’s resumption of flights comes around 12 hours after an emergency ruling by an arbitration court ended weeks of strikes and canceled a staff lockout.

The court ruling was a major victory in the airline’s battle with unions representing pilots, aircraft mechanics, baggage handlers and caterers, whose rolling strikes have forced the cancellation of 600 flights in recent months, disrupted travel for 70,000 passengers and cost Qantas 70 million Australian dollars ($75 million).

But some aviation experts said the surprise grounding of all 108 planes on Saturday, at a cost of $20 million a day, has hurt the Australian flagship carrier’s reputation around the world. Moody’s Investors Service said it could downgrade the airline’s credit ratings as the weekend’s events could hurt bookings, profits and the value of the Qantas brand.

Still, the stock market welcomed the weekend developments as allowing the airline to focus on its long-term strategy. Qantas shares on Monday jumped 4.3 percent to AU$1.61 on the stock exchange in Sydney.

Henry Harteveldt, an airline industry analyst in San Francisco, predicts the shutdown will do long-term damage to the Qantas name by hurting its reputation for reliability.

“A lot of travelers won’t take a chance and will book away to Virgin Australia, Air New Zealand and other airlines,” Harteveldt said. “Brand loyalty in the airline business is very low, and there is so much competition.”

Before the court ruling, Virgin Australia said it was scheduling extra flights and offering 20 percent fare discounts to help stranded Qantas passengers through Thursday.

If Qantas loses customers, that could also hurt partners in its alliance of global airlines, including American Airlines. A rival alliance that includes Air New Zealand and is led by United Continental Holdings Inc. could benefit, as could a third group of airlines that includes several major Asian carriers and is led by Delta Air Lines Inc. and Air France-KLM.

CEO Alan Joyce praised the court ruling, which prevents unions from taking any further strike action over their demands for pay hikes and job security clauses under news contracts being negotiated. The strikes have been blamed for a sharp decline in the airline’s future bookings.

“The important thing is that all industrial action is now over and we have certainty,” Joyce told reporters in Sydney.

“We will be returning to business as usual over the next 24 hours,” he said.

Other industry veterans said the lockout was a daring move that will pay off for Qantas, which wants to expand the low-cost, low-fare model that it uses at its Jetstar Airways subsidiary business cards design.

Jetstar has extensive routes to Southeast Asia and Japan, and lower costs than Qantas. But Qantas unions fear that expansion of low-cost airlines will result in Australian jobs being sent overseas. Joyce hopes to bend the unions closer to the company’s vision for growth by tapping into Asian markets.

“It was a very shrewd move by their CEO to force the issue and stop the potential deterioration of the brand,” said Mo Garfinkle, an airline consultant who has worked for Qantas rival Virgin Australia. “In the end, it will benefit Qantas financially.”

Garfinkle said the short duration of the fleet grounding will help Qantas get back up to full speed quickly, cutting its losses.

Prime Minister Julia Gillard on Monday described the grounding as “extreme,” while Transport Minister Tony Albanese has sharply criticized Joyce for giving the government only three hours notice of his plans.

The Australian government, angered by a lack of warning of the grounding, had called an emergency court hearing on Saturday night to end the work bans for the sake of the national economy.

The three judges heard more than 14 hours of testimony from the airline, the government and unions. Workers have held rolling strikes and refused overtime work for weeks out of worry that some of Qantas’ 32,500 jobs would be moved overseas in a restructuring plan.

The unions wanted the court to temporarily suspend the employee lockout so that strike action could resume if negotiations in the labor dispute failed to progress. But the airline said the strikes had devastated the airline’s reputation for reliability and that the threat needed to be removed permanently before customers would return.

Tribunal President Geoffrey Giudice said the panel decided that a temporary suspension would still risk Qantas’ grounding its fleet in the future and would not protect the tourism and aviation industries from damage.

Qantas is the largest of Australia’s four national domestic airlines, and the grounding affected 108 planes in 22 countries.

About 70,000 passengers fly Qantas daily, and would-be fliers this weekend were stuck at home, hotels or airports, or even had to suddenly deplane when Qantas suspended operations. More than 60 flights were in the air at the time but continued to their destinations, and Qantas was paying for passengers to book other flights.

Qantas infuriated unions in August when it said it would improve its loss-making overseas business by creating an Asia-based airline with its own name and brand. The five-year restructure plan will cost 1,000 jobs.

The airline also said in August that it had more than doubled annual profit to AU$250 million but warned that the business environment was too challenging to forecast earnings for the current fiscal year.

Qantas is the 10th-largest airline in the world by passenger miles flown, according to the International Air Transport Association, an airline trade group.

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Associated Press writers David Koenig from Dallas, Texas, and Andrew Dalton from Los Angeles contributed to this report.

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Markets around the world gave the thumbs-up to a new bailout package to solve the European debt crisis Thursday, but there are still plenty of questions about just what it all means, where the money

Forget style, quality and customer service. This holiday season, all that matters is price.

A week before Halloween and two full months before Christmas, stores are desperately trying to outdo each other in hopes of drawing in customers worn down by the economy.

Wal-Mart, the biggest store in the nation, joined the price wars Monday by announcing that it would give gift cards to shoppers if they buy something there and find it somewhere else cheaper.

Staples and Bed Bath & Beyond have already said they will match the lowest prices of Amazon.com and other big Internet retailers. Sears is going a step further, offering to beat a competitor’s best price by 10 percent.

“The days of marketing the stuff in your store because it was a hot brand are over,” says Dave Ratner, owner of Dave’s Soda & Pet City, a Massachusetts pet food and supplies chain.

For the holidays, Ratner plans to offer 20 percent off pet accessories if customers buy a bag of dog food. Customers, he says, just want a deal.

Almost four years after the onset of the Great Recession, they’ve learned to expect one too. In better times, retailers could afford to keep prices higher and use promises of higher quality and better service to lure people into stores.

Those days are over. In a recent poll of 1,000 shoppers by America’s Research Group, 78 percent said they were more driven by sales than they were a year ago. During the financial meltdown in 2008, that figure was only 68 percent.

Wal-Mart last year went back to its “everyday low prices” roots, a bedrock philosophy of founder Sam Walton, rather than slashing prices only on certain items to draw in customers. Now everyday low prices might not be low enough.

So it’s trying something it is calling the Christmas Price Guarantee. It works this way: If you buy something at Wal-Mart from Nov. 1 to Dec. 25 and find the identical product elsewhere for less, you get a gift card in the amount of the difference.

The deal excludes online prices and some categories of merchandise _ groceries, live plants, tobacco, prescription drugs and wireless devices that require a service agreement. But it is good even if weeks pass between your purchase and spotting the better deal. And it applies even to big items like TVs, for which prices can drop steeply as Christmas approaches.

Duncan MacNaughton, chief merchandising officer for Wal-Mart’s U.S. stores, told reporters Monday that he has noticed “much more promotional intensity and gimmicks” among competitors.

“This gives customers peace of mind that we are an advocate for them,” he said.

Toys R Us’ big book of holiday offers will be packed this year with $8,000 of savings, compared with $5,600 last year, said Bob Friedland, a company spokesman. And it has added an incentive this year: If customers who sign up for its loyalty program spend $200 or more during the holiday season, they will get coupons on toys every month next year.

Retailers are responding to a customer base that is better informed, and more comfortable shopping online, than ever.

Jenna Wahl, a cardiac nurse from Bloomington, Ind., said she expects to spend about as much on holiday gifts this year as last _ roughly $500 _ but will try to get more for her money.

She’ll be asking stores to do more price-matching and plans to use her iPhone to check prices and download coupons.

“I will take things back in order to get the better deal,” she said.

Wal-Mart left online prices out of its Christmas offer, but other stores have decided they may not have that luxury. Staples, for example, is leaving it to the discretion of its store managers to decide whether to match online prices.

Sears’ offer of beating a competitor by 10 percent will not apply to retailers that only do business online, such as Amazon, but will apply to prices that its brick-and-mortar competitors offer on their websites.

The holiday price wars mark an acceleration of a trend that has already swept the retail industry. Lowe’s, the nation’s No. 2 home improvement store, said in August it was starting to focus on everyday low prices for items that customers can easily comparison-shop at rivals like Home Depot and Sears.

And J.C. Penney, the department store chain, said earlier this month that it plans to overhaul its pricing strategy starting in February. So far, it has kept the details a secret.

Wal-Mart stepped up its price matching in April by directing store employees to comb through competitors’ advertisements so price matches at the register would be easier. Wal-Mart’s price match has been around for several years, but it is using it more as a competitive weapon to compete with rivals. It’s launched ads playing up its price matching and has training sales associates to better police prices of local competitors. Customers will still have to ask for the price match.

“Customers have learned to wait on the next big deal because they know that if they wait long enough they can get a lower price than the everyday low price,” Bob Gfeller, Lowe’s executive vice president of merchandising, said to investors in August. “However, we must be vigilant to ensure that our customers perceive us to be priced competitively every day, even against online retailers and smaller category killers.”

Indeed, 64 percent of shoppers polled said that it would take discounts between 30 percent to 50 percent to get them to spend, up from 54 percent last year, according to a recent Citi Investment Research & Analysis survey of a little more than 1,000 customers. Customers looking for 60 percent off as a big motivator to spend increased to 10 percent from 8 percent last year, the survey showed.

Bill Martin, co-founder Shoppertrak, which monitors customer traffic at 25,000 stores nationwide, says retailers are seeing that customers appear in droves when they have big sales for holiday weekends like Black Friday, Memorial Day or Father’s Day. This creates peaks and valleys throughout the year, a trend that hasn’t abated since the recession began in late 2007.

“The reality is consumers are targeted. They’re well informed, and they’ve searched the Internet for price information,” said Bill Martin, co-founder of ShopperTrak, which expects foot traffic to drop 2.2 percent during the holiday season compared with a year ago.

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Folk music legend Pete Seeger and `60s folk singer Arlo Guthrie joined Occupy Wall Street demonstrators Friday in their campaign against corporate greed while residents near the protest park encampment pushed to regain some peace and quiet in their neighborhood.

Seeger joined in the Occupy Wall Street protest Friday night, replacing his banjo with two canes as he marched with throngs of people in New York City’s tony Upper West Side past banks and shiny department stores.

The 92-year-old Seeger, accompanied by musician-grandson Tao Rodriguez Seeger, composer David Amram, and bluesman Guy Davis, shouted out the verses of protest anthems as the crowd of about 1,000 people sang and chanted.

They marched peacefully over more than 30 blocks from Symphony Space, where the Seegers and other musicians performed, to Columbus Circle. Police watched from the sidelines.

Occupy Wall Street began a month ago in lower Manhattan among a few young people, and has grown to tens of thousands around the country and the world. A recent Associated Press-GfK poll says more than one-third of the country supports the Wall Street protesters, and even more _ 58 percent _ say they are furious about America’s politics.

But the encampment at Zuccotti Park has become more than a tolerable nuisance, some neighborhood residents say. At a meeting Thursday, they complained of protesters urinating in the streets and beating drums in the middle of the night. Some called for the protesters to vacate the park.

The area’s community board voted unanimously for a resolution that recognized the protesters’ First Amendment rights while calling for a crackdown on noise and public urination and defecation.

U.S. Rep. Jerrold Nadler, Manhattan Borough President Scott Stringer and state Sen. Daniel Squadron said in a statement that the resolution was “an attempt to establish a sensible framework that respects the protesters’ fundamental rights while addressing the very real quality of life concerns for residents and businesses around Zuccotti Park.”

Asked about Occupy Wall Street on WOR Radio on Friday, Mayor Michael Bloomberg said the protesters’ leaderless structure has made it difficult to negotiate with them.

Occupy Wall Street spokesman Han Shan, who has served as a liaison between protesters and local elected officials, agreed the protesters needed to be better neighbors. Shan, who attended the meeting, promised to limit the noise.

At Columbus Circle, Seeger and friends walked to the chant of “We are the 99 percent” and “We are unstoppable; another world is possible.” Seeger stopped to bang a metal statue of an elephant with his cane _ to cheers from the crowd.

At the center of the plaza, Seeger and Amram were joined by Guthrie in a round of “We Shall Overcome,” a protest anthem made popular by Seeger.

After more singing, Seeger asked for a mic check to tell the crowd: “The words are simple: I could be happy spending my days on the river that flows both way-ay-ays.”

During the march, the younger Seeger, in troubadour fashion like his grandfather, walked among the protesters playing songs. Amra took up a flute and others enlivened the night protest with the sounds of the accordion, banjos, and guitars.

At the front of the throng, marchers held American flags and a large blue flag that said: “Revolution Generation … Debt is Slavery.” Along the way, the crowd sang protest songs made popular or written by Seeger, Woody Guthrie, and others of the protest era.

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Associated Press writer Karen Matthews contributed to this report.

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Wireless equipment maker LM Ericsson AB on Thursday reported a 4 percent rise in third-quarter profit as strong mobile broadband sales and increased market share offset weaker margins.

Ericsson said third-quarter net profit rose to 3.8 billion kronor ($574 million) from 3.7 billion kronor in the same period a year ago. Sales for the July-September period were particularly buoyant, increasing 17 percent to 55.5 billion kronor.

Ericsson CEO Hans Vestberg said sales were driven by a continued strong demand for mobile broadband as well as increased services revenues.

“Our performance year-to-date reaffirms our indications of a strengthened global market share,” he said.

However, the increased share of services business, as well as a higher proportion of coverage projects and accelerating network modernization projects in Europe had a negative impact on the company’s gross margin, which decreased to 35 percent from 39 percent a year ago.

Greger Johansson, an analyst with research firm Redeye, said the margin was weaker than expected, which could lead to a slightly negative reaction in the stock market Faxless payday loans.

“The positive thing is that both sales and profits were clearly better than expected,” Johansson said. “The negative is the gross margin and the fact the company indicates it will remain weak going forward.”

He said the low-margin modernization projects in Europe also weighed on the result of Ericsson’s “most important segment,” networks.

The company also said the effects on its supply chain from the earthquake and tsunami in Japan in March had run their course.

Looking ahead, the company said it “cannot exclude somewhat more cautious short-term operator spending,” considering the economic uncertainties in parts of the world.

Ericsson is the world leader in rolling out and upgrading mobile network infrastructure as the world’s wireless users grow in number, boosting demand for ever-faster network speeds. Its biggest competitors are China’s Huawei and Finnish-German joint venture Nokia Siemens.

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U.S. homebuilders are a less pessimistic about the struggling housing market, but not enough to signal a recovery any time soon.

The National Association of Home Builders said Tuesday that its index of builder sentiment this month rose from 14 to 18. The index has been below 20 for all but one month during the past two years.

Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom.

Last year, the number of people who bought new homes fell to its lowest level dating back nearly a half-century. Sales this year haven’t fared much better.

Builders are struggling to compete with foreclosures, which have made the price of previously occupied homes more competitive. Many buyers are having difficulty obtaining loans or meeting higher down payment requirements. Low appraisals are scuttling some deals after contracts have been signed. Some buyers want to upgrade to a new house but are holding off because they can’t sell their home.

David Crowe, the builders group’s chief economist, said some builders are shifting their assessment from “poor” to “fair,” but few are changing their views from “fair” to “good.”

While new homes make up a small portion of sales, they have an outsize impact on the economy. The builders’ trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.

Separate gauges of current single-family home sales and foot traffic of prospective buyers increased four and three points each, to 18 and 14, respectively. A survey of sales expectations over the next six months rose seven points, to 24.

An index of builders’ outlook in the West rose nine points, to 21. The Midwest and South rose 4 points, to 15 and 19, respectively. The Northeast was unchanged at 15.

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Protesters expressed fears Thursday that a scheduled cleanup of the private park where they’ve been camped out near Wall Street is merely a ploy to unravel the demonstration.

City officials have informed protesters that they will need to leave Zuccotti Park on Friday so that it can be cleaned, but that they’ll be allowed to return afterward.

As a steady drizzle fell Thursday over the park, owned by Brookfield Properties, confusion was high over when the protesters will be ordered out _ and where they’ll go during the evacuation.

“The cleanup is a pretext to remove us from the camp. And we can return only if we abide by the rules of Brookfield Properties,” said Justin Wedes, 25, a public high school science teacher from Brooklyn who was sweeping the pavement with others. “We’re redoubling our efforts today.”

Brookfield did not immediately respond to requests for comment on the cleanup. City officials remained mum on logistics.

“This is the cleanest protest I’ve ever witnessed,” said Emilio Montilla, 29, a laid-off teacher’s assistant. “We take care of ourselves. We’re self-sufficient.”

A notice handed out to protesters Thursday from Brookfield stated that the cleaning is part of daily upkeep, and that conditions have deteriorated in recent weeks because that upkeep was put on hold by the protesters.

“They’re going to use the cleanup to get us out of here!” Wedes said. “It’s a de facto eviction notice.”

Deputy Mayor Cas Holloway said in a statement Wednesday that the protest has “created unsanitary conditions and considerable wear and tear on the park.” He said Brookfield asked for police help to clear the park so it can be cleaned.

Holloway said the cleaning will be done in stages Friday. Mayor Michael Bloomberg visited the protesters Wednesday to offer assurances.

Allison Esso of Human Services Council, a group that supports the protesters, was wary. “I’m hoping that they’re not trying to undermine their ability to protest,” she said.

The protest, known as Occupy Wall Street, has sympathetic groups in other cities which each stage their own local rallies and demonstrations: Occupy Boston, Occupy Cincinnati, Occupy Houston, Occupy Los Angeles, Occupy Philadelphia, Occupy Providence, Occupy Salt Lake, and Occupy Seattle, among them saving account pay day loan.

The movement has also drawn reaction from world leaders, including President Barack Obama, former Polish President Lech Walesa and Iran’s Ayatollah Ali Khamenei.

Walesa said Thursday that he supports the New York protest and is planning to either visit or write a letter to the protesters. He said the global economic crisis has made people aware that “we need to change the capitalist system” because we need “more justice, more people’s interests, and less money for money’s sake.”

Khamenei said Wednesday that the wave of protests reflects a serious problem that will ultimately topple capitalism in America. He claimed the United States is in a full-blown crisis because its “corrupt foundation has been exposed to the American people.”

Khamenei’s remarks came a day after U.S. officials said the Obama administration plans to leverage charges that Iran plotted to assassinate Saudi Arabia’s ambassador into a new global campaign to isolate the Islamic republic.

Protesters, who have been living, sleeping and eating in the park for the duration, say they are in it for the long haul, despite the onset of cold weather.

On Wednesday, police arrested four people outside JP Morgan Chase offices where Wall Street protesters called in vain for a meeting with Chairman and CEO Jamie Dimon. Protesters accused the police of rough handling. An Associated Press photographer witnessed police officers heading into the crowd of demonstrators to make the arrests.

Meanwhile, about 700 members of the Service Employees International Union marched through the Financial District; the union, which represents 23,000 office cleaners, is gearing up for contract negotiations with the Realty Advisory Board.

More protests are planned in Toronto and Vancouver this weekend, and European activists also are organizing.

A lawyer for a woman pepper-sprayed during an action last month is demanding that the Manhattan district attorney prosecute an NYPD deputy inspector on an assault charge. Commissioner Raymond Kelly said the matter was being investigated by police internal affairs and the Civilian Complaint Review Board.

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Officials in violence-wracked Bahrain began work Monday on proposed political reforms that include boosting the powers of parliament, but the steps were dismissed by an opposition leader as too little after more than eight months of clashes in the Gulf kingdom.

The package of changes would transfer some new powers to elected lawmakers, but leaves intact the sweeping controls of Sunni rulers. Bahrain’s majority Shiites began protests in February seeking more rights and demanding an end to the monarchy’s grip on the country’s affairs.

The reforms are likely to be approved, but they appear unlikely to ease a crisis that has left about 35 people dead and delivered a serious blow to the economy of the strategic island nation _ home to the U.S. Navy’s 5th Fleet.

The official Bahrain News Agency said the prime minister met with government officials to discuss the reform package. The final report will be submitted later for approval to Bahrain’s King Hamad bin Isa Al Khalifa.

The proposed reforms include allowing parliament to vet Cabinet ministers. They also call for a review of voting districts _ which Shiite leaders claim are gerrymandered to undercut Shiite political strength easy payday loans.

Shiite’s account for about 70 percent of Bahrain’s population, but say they have faced decades of discrimination such as being blocked from top political and security posts.

The main Shiite political party, Al Wefaq, walked out of national reconciliation talks in July. Months earlier, their 18 members in parliament had resigned en masse to protest crackdowns that included hundreds of arrests and Shiite workers purged from jobs.

The Wefaq leader, Sheik Ali Salman, scoffed at the proposed reforms as doing nothing to reduce the powers of the 200-year-old dynasty. He said the measures “keep Bahrain as a dictatorship, not a democratic state.”

“We can go and ask the people of Bahrain,” he told reporters. “Do they want a referendum to decide whether to have an elected government or not?”

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Gunmen disguised as police officers seized control of a police station in western Iraq Monday morning, killing four people and taking dozens of hostages before Iraqi forces swept in and ended the standoff, Iraqi officials said.

The three-hour hostage crisis, as well as another attack nearby on a police officer’s house, demonstrated the vulnerability of the Iraqi security forces at a time when American troops are swiftly drawing down their presence after more than eight years of war.

Four insurgents wearing explosives vests underneath police uniforms and armed with grenades and pistols with silencers walked into the police compound in al-Baghdadi around 9 a.m., said Brig. Mohammed al-Fahdawi of the Iraqi army’s 7th Division in Anbar province. Because the gunmen were wearing police uniforms, they were not searched, he said.

The gunmen shot and killed three police officers, including the director of the police station, and an employee in the mayor’s office before seizing weapons held in the police station, said al-Fahdawi, who coordinated the rescue operation.

The gunmen herded the hostages into some of the rooms, said a police officer at the scene who did not want to be identified because he was not authorized to speak to the media.

After the Iraqi army arrived on the scene and exchanged gunfire with the assailants, al-Fahdawi said he ordered his men to storm the building.

The mayor, Muhanad Zbar Mutlaq, was inside at the time.

After hearing the shooting, the mayor grabbed his cell phone and ran into the bathroom next to his office, locking the door behind him. He said he put his cell phone on silent and began sending text messages to Iraqi army officers he knows.

“Some of the terrorists entered my office and one of them picked up my landline phone when it was ringing and said: ‘We are the fighters of the Islamic State of Iraq,’” said Mutlaq. The Islamic State of Iraq is a front group for al-Qaida. Mutlaq said he could tell by the speaker’s voice that he was Iraqi.

“When I was rescued I saw blood everywhere with pieces of human flesh of the two terrorists who blew themselves up,” he added.

Two of the insurgents blew themselves up when Iraqi police stormed the station to free the estimated 40 people held inside, said al-Fahdawi. Security forces killed the other two assailants, he said.

Deputy governor of Anbar province Dhari Arkan confirmed that the hostage standoff had ended and said four people were killed.

“The security measures here are zero. Some weeks ago terrorists were able to blow up the provincial council and today they were able to break into a police station,” he said.

Earlier this month, two suicide bombers blew themselves up in front of the government compound in the Anbar provincial capital of Ramadi, killing four people and wounding eight others.

Insurgents frequently go after Iraqi government targets in an effort to destabilize the security situation, and the Ramadi building has been targeted repeatedly by suicide bombers.

The mayor of the nearby town of Hit, Hikmat Juber, said many of the hostages were government officials working on the second floor of the building.

Gunmen also attacked the home of the police chief in the town of al-Dolab about 10 miles (16 kilometers) away from al-Baghdadi, said Lt. Col. Mohammed Ismail of the Anbar police media office. He said three gunmen were killed when they tried to storm the house, which is located near the town’s police station.

Al-Fahdawi confirmed that attack and said two of the police chief’s guards were also killed. He said two gunmen were arrested.

Violence in Iraq is nothing like it was in 2006 or 2007 when the insurgency was at its most vicious. But militants have demonstrated a dogged persistence in carrying out attacks despite repeated crackdowns by U.S. and Iraqi forces.

Anbar is Iraq’s largest province and the desert area is mostly home to Sunnis. The province has been a hotbed of Iraq’s insurgency for years. Sunni militants aligned with terror groups such as al-Qaida often attack the local police and military, whom they see as traitors and supporters of the Shiite-led government.

Under a 2008 agreement, all American forces must leave Iraq by the end of this year, although U.S. and Iraqi officials have been discussing retaining a small U.S. military presence into 2012. There are currently about 43,000 troops still in the country.

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Associated Press writers Mazin Yahya and Saad Abdul-Kadir contributed to this report.

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