Strong turnout for South Korea's presidential election

SEOUL: South Koreans cast their votes Wednesday in a tight and potentially historic presidential election that could result in Asia's fourth-largest economy selecting its first female leader.

The ballot is a straight fight between Park Geun-Hye, the conservative daughter of assassinated dictator Park Chung-Hee, and her liberal rival Moon Jae-In, the son of North Korean refugees.

Opinion polls indicate the result could go either way.

The eventual occupant of the presidential Blue House will have to deal with a belligerent North Korea, a slowing economy and soaring welfare costs in one of the world's most rapidly ageing societies.

Park, 60, was looking to make history by becoming the first female president of a still male-dominated nation, and the first to be related to a former leader.

Her father remains one of modern Korea's most polarising figures -- admired for dragging the country out of poverty and reviled for his ruthless suppression of dissent during 18 years of military rule.

He was shot dead by his spy chief in 1979. Park's mother had been killed five years earlier by a pro-North Korea gunman aiming for her father.

Moon, who was chief of staff to the late left-wing president Roh Moo-Hyun, is a former human rights lawyer who was once jailed for protesting against the Park Chung-Hee regime.

Polling booths opened at 6:00am (2100 GMT Tuesday) on a bright, chilly winter's morning, with the temperature hovering around -10 Celsius (14 Fahrenheit).

Initial turnout among the 40 million-plus registered voters was strong, with 35 percent having cast their votes by midday -- a sharp increase on the 2007 election.

"It's freezing cold, but I plead with the people to come out and vote to open a new era for this country," Park, wrapped up in a long coat and red scarf, said as she cast her ballot in Seoul.

After locking in the support of their respective conservative and liberal bases, the two candidates put a lot of campaign effort into wooing crucial centrist voters, resulting in significant policy overlap.

Both have talked of "economic democratisation" -- a campaign buzzword about reducing the social disparities caused by rapid economic growth -- and promised to create new jobs and increase welfare spending.

Moon has been more aggressive than Park in his proposals for reining in the power of the giant family-run conglomerates, or "chaebol" that dominate the economy.

"This is the only way for the people to change the world," Moon said as he voted in the southern city of Busan.

"This election is about our livelihoods, economic democracy, welfare and peace on the Korean peninsula," he added.

While both have signalled a desire for greater engagement with Pyongyang, Park's approach is far more cautious than Moon's promise to resume aid without preconditions and seek an early summit with North Korean leader Kim Jong-Un.

Although North Korea has not been a major campaign issue, its long-range rocket launch last week -- seen by critics as a disguised ballistic missile test -- was a reminder of the unpredictable threat from across the border.

The never-married Park has promised a strong, parental style of leadership that would steer the country through the challenges of global economic troubles.

"Like a mother who dedicates her life to her family, I will become the president who takes care of the lives of each one of you," Park said in her last televised news conference on Tuesday.

A female president would be a big change for a country that the World Economic Forum recently ranked 108th out of 135 countries in terms of gender equality -- one place below the United Arab Emirates and just above Kuwait.

Older Koreans, who generally favour Park, are seen as more dependable voters and Moon's camp has pushed hard to ensure the younger demographic that make up his support base cast their ballots.

One early voter, Kim Su-Eun, 29, said she had opted for the ruling party candidate.

"I think Moon's election promises are too radical while Park says she will carry out reform step by step. That's why I voted for her", she told AFP.

- AFP/al

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Yahoo China quietly shutters its music service

Yahoo has announced that it is terminating its music service in China as of next month, according to The Next Web.

Apparently the closure comes as the Web giant looks to rework its product strategies.

"Thank you all for your continued support of Yahoo's products," a statement posted on the Yahoo China's music search portal read, according to The Next Web. "As part of an adjustment to our product strategy, we have decided to stop providing the Yahoo [China] Music service starting January 20, 2013."

With new CEO Marissa Mayer on board, Yahoo has been hinting at restructuring. Her hiring came shortly after the company agreed to sell its stake in China's largest e-commerce company Alibaba for $7.6 billion. Mayer suggested that Yahoo might use the proceeds of the deal for new acquisitions.

According to The Next Web, Alibaba will continue to run Yahoo China as the companies finish their transitional period over the next few years.

Yahoo isn't the only tech company to drop its music business in China. Google shut down its Chinese music download service in September. Google said that the product wasn't doing as well as expected, so it "decided to shift resources to other products."

CNET contacted Yahoo for comment. We'll update the story when we get more information.

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Texas school district encourages armed teachers for protection

HARROLD, Texas -- There's at least one school that welcome firearms to class.

It believes nothing makes a school safer than teachers who are armed,

The Harrold Independent School District is one building with 103 students. It's 20 minutes away from the nearest sheriff's station. Superintendent David Thweatt created what he calls a "guardian plan" after the attack at Virginia Tech.

"These people that go in and do these horrible acts, they're evil. But they're not that crazy -- they always know where they are going to get resistance," Thweatt said.

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Teachers and administrators here carry concealed handguns. They won't say how many faculty members are armed. They get extra training, but the district would not give us details.

Some people are horrified when he starts talking about putting guns in schools with children, but Thweatt said it's important to be safe.

"Sure, but it's a pretty horrific thing that happened the other day." Thweatt said. "And quite a few people are not horrified. Quite a few people we have in our district, since we have a high-transfer district, people bring their students to us for that protection."

Texas law allows concealed weapons in schools with a district's permission. Harrold was the first district to do it. A similar proposal was vetoed by Michigan's governor Tuesday.

Thweatt says allowing the firearms into the school will dissuade anyone who wants to hurt the kids.

"That's the bottom line," he said.

Since the shootings in Connecticut, Superintendent Thweatt has gotten calls from districts around the state and as far away as Missouri from school administrators asking whether they might be able to implement similar plans.

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Newtown Shooting: Bushmaster Under Fire

When the private investment firm Cerberus Capital Management announced Tuesday it would unload its interest in Bushmaster – the company that built the weapon used in last week's mass murder of 20 Connecticut first graders -- it marked the beginning of what experts say is likely to be a challenging period for the North Carolina-based weapons manufacturer.

"They are looking at a taint on their brand and looking at a marketplace that could change dramatically with respect to their weapon," said Chris Lehane, a crisis public relations expert who worked in the Clinton White House. "To me the fact that Cerberus is pulling out is a pretty significant defining moment."

For years, Bushmaster has been marketing itself to testosterone-fueled male customers, issuing "man cards" to customers who want to be "card carrying men." Now, Lehane and others said the company is facing the prospect of being branded the weapon of choice for mass killers. The Newtown, Connecticut shooting marked the fourth time a Bushmaster has been implicated in a mass shooting since 1999, including the Beltway sniper case that left 10 dead and three more wounded.

Cerberus announced Tuesday it wanted distance from Bushmaster, calling the murder of 20 first grade children at Sandy Hook Elementary School a "watershed event." The investment firm, which is chaired by former Vice President Dan Quayle, noted in its statement that Bushmaster may not be an investment consistent with the interests of its clients. Its investors include the pension plans of firemen, teachers, and policemen.

Rich Pedroncelli/AP Photo

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Lehane said the announcement could signal a shift in the way investors view companies that make military style weapons for a civilian market.

"It reminds me of the time when tobacco began to be associated with a negative light, or the divestiture movement surrounding companies in South Africa," he said. "Where financial markets believe they are going to pay a price."

In addition, a spokesman for Cerberus Group confirmed that the father of Stephen Feinberg, the founder of Cerberus Group, lives in Newtown.

Gun control groups have also lined up to criticize the weapons manufacturer, arguing that the company was selling civilian customers a weapon clearly designed for war.

"This thing is just a killing machine," said Josh Horwitz, executive director of the Coalition to Stop Gun Violence. "[I]t's a weapon that can easily shoot hundreds of … In fact it's very similar to the weapon that James Holmes used to shoot up the movie theater in Aurora."

The company has not responded to phone calls seeking comment, but gun enthusiasts say the weapon's menacing appearance can appeal to civilians looking for a means to secure their homes, and its ease of use can appeal to those looking for a weapon for target shooting.

"The [assault rifle] platform is the most popular in the country," said Frank Cornwall, a firearms instructor in Connecticut. "Civilians have always bought similar type arms to the military. And this is a very versatile platform. Quite a popular hunting and target shooting gun."

Phillip Stutts, a crisis management consultant who worked for President George W. Bush, said he has been surprised by the silence of the gun manufacturer.

"Bushmaster doesn't have to take responsibility for this tragedy, but they have a responsibility to respond to this tragedy," he said. "And they haven't. They have to get out in front of this. It needs to be corrected ASAP."

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Syrian rebels take control of Damascus Palestinian camp

BEIRUT (Reuters) - Syrian rebels took full control of the Yarmouk Palestinian refugee camp on Monday after fighting raged for days in the district on the southern edge of President Bashar al-Assad's Damascus powerbase, rebel and Palestinian sources said.

The battle had pitted rebels, backed by some Palestinians, against Palestinian fighters of the pro-Assad Popular Front for the Liberation of Palestine-General Command (PFLP-GC). Many PFLP-GC fighters defected to the rebel side and their leader Ahmed Jibril left the camp two days ago, rebel sources said.

"All of the camp is under the control of the (rebel) Free Syrian Army," said a Palestinian activist in Yarmouk. He said clashes had stopped and the remaining PFLP fighters retreated to join Assad's forces massed on the northern edge of the camp.

The battle in Yarmouk is one of a series of conflicts on the southern fringes of Assad's capital, as rebels try to choke the power of the 47-year-old leader after a 21-month-old uprising in which 40,000 people have been killed.

Government forces have used jets and artillery to try to dislodge the fighters but the violence has crept into the heart of the city and activists say rebels overran three army stations in a new offensive in the central province of Hama on Monday.

On the border with Lebanon, hundreds of Palestinian families fled across the frontier following the weekend violence in Yarmouk, a Reuters witness said.

Syria hosts half a million Palestinian refugees, most living in Yarmouk, descendants of those admitted after the creation of Israel in 1948, and has always cast itself as a champion of the Palestinian struggle, sponsoring several guerrilla factions.

Both Assad's government and the mainly Sunni Muslim Syrian rebels have enlisted and armed divided Palestinian factions as the uprising has developed into a civil war.

"NEITHER SIDE CAN WIN"

Syrian Vice President Farouq al-Sharaa said in a newspaper interview published on Monday that neither Assad's forces nor rebels seeking to overthrow him can win the war.

Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely been seen since the revolt erupted in March 2011 and is not part of the president's inner circle directing the fight against Sunni rebels. But he is the most prominent figure to say in public that Assad will not win.

Sharaa said the situation in Syria was deteriorating and a "historic settlement" was needed to end the conflict, involving regional powers and the U.N. Security Council and the formation of a national unity government "with broad powers".

"With every passing day the political and military solutions are becoming more distant. We should be in a position defending the existence of Syria. We are not in a battle for an individual or a regime," Sharaa was quoted as telling Al-Akhbar newspaper.

"The opposition cannot decisively settle the battle and what the security forces and army units are doing will not achieve a decisive settlement," he said, adding that insurgents fighting to topple Syria's leadership could plunge it into "anarchy and an unending spiral of violence".

Sources close to the Syrian government say Sharaa had pushed for dialogue with the opposition and objected to the military response to an uprising that began peacefully.

In a veiled criticism of the crackdown, he said there was a difference between the state's duty to provide security to its citizens, and "pursuing a security solution to the crisis".

He said even Assad could not be certain where events in Syria were leading, but that anyone who met him would hear that "this is a long struggle...and he does not hide his desire to settle matters militarily to reach a final solution."

In Hama province, rebels and the army clashed in a new campaign launched on Sunday by rebels to block off the country's north, activists said.

The Syrian Observatory for Human Rights, an opposition-linked violence monitor, said fighting raged through the provincial towns of Karnaz, Kafar Weeta, Halfayeh and Mahardeh.

It said there were no clashes reported in Hama city, which lies on the main north-south highway connecting the capital with Aleppo, Syria's second city.

Qassem Saadeddine, a member of the newly established rebel military command, said on Sunday fighters had been ordered to surround and attack army positions across the province. He said Assad's forces were given 48 hours to surrender or be killed.

In 1982 Hafez al-Assad, father of the current ruler, crushed an uprising in Hama city, killing up to 30,000 civilians.

Qatiba al-Naasan, a rebel from Hama, said the offensive would bring retaliatory air strikes from the government but that the situation is "already getting miserable".

(Additional reporting by Oliver Holmes, Erika Solomon and Dominic Evans in Beirut, Afif Diab at Masnaa, Lebanon; editing by Philippa Fletcher)

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Tarantino film latest to be pulled after US shooting

LOS ANGELES: A Hollywood premiere of notoriously violent director Quentin Tarantino's latest film "Django Unchained" was canceled Monday, the latest such response to the Connecticut school massacre.

A string of movies and TV shows have been pulled or postponed since Friday's shootings, while sporting events have held moments of silence and players have worn black armbands to honor the victims, 20 of whom were young children.

The Weinstein Company said that a premiere scheduled Tuesday in Los Angeles of "Django Unchained" - which is due to open on Christmas Day in US theaters - had been called off.

"Our thoughts and prayers go out to the families of the tragedy in Newtown, Connecticut, and in this time of national mourning we have decided to forgo our scheduled event," said a Weinstein Company spokesperson.

The studio will still hold a screening for cast and crew and their friends and families, industry daily "Variety" reported.

Tarantino is known for screen violence, in movies from 1992's "Reservoir Dogs" to 2009's "Inglorious Basterds."

In his new film, a slave-turned-bounty hunter sets out to rescue his wife from a brutal plantation owner.

The move came after the weekend premiere of Tom Cruise's latest movie, "Jack Reacher" - about a homicide investigator probing a trained military sniper who shot five random victims - was postponed.

"Our hearts go out to all those who lost loved ones," said studio Paramount, adding that it took the action "out of honor and respect for the families of the victims whose lives were senselessly taken."

Fox canceled a weekend red carpet event and after-party for "Parental Guidance" starring Bette Midler and Billy Crystal "in light of the horrific tragedy."

The studio also replaced planned broadcasts Sunday of episodes of "Family Guy" and "American Dad" to avoid any insensitivities to the massacre.

A moment of silence was observed at National Football League (NFL) games across the country Sunday to remember those killed in the normally peaceful town of Newtown, Connecticut.

While some events were canceled because of content, others did not appear to be.

PG-rated "Parental Guidance" got its parental warning for some rude humor, not for violence, according to the IMDb industry website.

Veteran crooner Barry Manilow postponed a planned Friday night show in Palm Desert, California until Sunday, saying on his website: "Perhaps this small gesture of solidarity will help support these families on this terrible day."

Celebrities were quick to join online expressions of shock and sympathy.

Pop star Justin Bieber tweeted: "My prayers go out to all those suffering in this tragedy. it's just wrong. Everyone please pray for them."

"God have mercy!!!! No one deserves this! Praying for the families of the victims of the Connecticut shooting!! What a Christmas it will be," added singer Rihanna on the micro-blogging site.

- AFP/ha

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Apple loses bid for permanent ban on Samsung phones in U.S.

A U.S. District Court judge denied Apple's bid to ban a number of Samsung's devices from sale in the U.S., a little more than a week after a hearing on the matter.

In a late ruling Monday, Judge Lucy Koh -- who presided over the entire trial between the two tech giants -- denied Apple's bid for a sales ban, saying that any infringing features were just part of a larger feature set, making a sales ban too broad.

"The phones at issue in this case contain a broad range of features, only a small fraction of which are covered by Apple's patents," Koh wrote. "Though Apple does have some interest in retaining certain features as exclusive to Apple, it does not follow that entire products must be forever banned from the market because they incorporate, among their myriad features, a few narrow protected functions."

CNET has contacted both Apple and Samsung, and will update this post when we hear back.

Developing...

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Obama moves on taxes in latest "cliff" counter-proposal

President Obama gave up Monday on his demand for higher taxes on households earning $250,000 and upped it to $400,000 while embracing smaller cost-of-living Social Security raises in a counter-proposal to House Speaker John Boehner meant to narrow differences and forge a pre-Christmas "fiscal cliff" deal.

Mr. Obama and Boehner met for nearly an hour in the Oval Office on Monday and sources familiar with the talks released specific details of the White House proposal.

Boehner aides said it brought the two sides closer but said a deal was not at hand.

"Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced," said Brendan Buck, a Boehner spokesman.

Other senior Republican aides told reporters on Capitol Hill they are not rejecting the latest White House offer, but they also said that there is not parity or balance in the White House plan and substantive issues remain unresolved. One senior aide said the issues that they are talking about are not technically difficult to resolve, but they were wary the differences might be fundamental issues that are difficult to resolve.

But the depth, specificity and fine-grain nature of discussions over policy, tax revenue and spending cuts belied the tough rhetoric from the two sides in the negotiation. Signs point to a deal before the New Year's fiscal cliff deadline -- and possibly an announcement as early as Wednesday.

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Boehner's "fiscal cliff" concessions come with a price

Talks picked up genuine momentum on Friday when Boehner agreed to higher income tax rates on households earning $1 million and above. Previously, Boehner opposed all income tax increases. He also gave in on raising the debt ceiling, a vote some Republicans wanted to use as leverage against Obama in 2013. Both gestures, top White House aides said, broke the logjam.

Mr. Obama responded with big concessions of his own on Monday. He offered a $400,000 income threshold for a Clinton-era top tax bracket of 39.6 percent. Boehner had proposed that tax rate for millionaires and a total 10-year tax revenue figure of $1 trillion. Obama wants $1.2 trillion in new revenue. Both sides look for hundreds of billions in new revenue in 2013 through a tax reform process that eliminates some tax deduction and closes loopholes.

The president also wants a two-year ceasefire on raising the debt ceiling. Boehner offered one year.

In addition to disagreement on income levels for tax rates or some other way to get more revenue, the two sides have not set in stone an actual tax reform process. It sounds like they are talking about creating a new sequester-like mechanism in 2014 as incentive for both tax reform and entitlement reforms.

Speaking of entitlements, Boehner also asked the White House to increase the eligibility age for Medicare but Mr. Obama again refused. This difference could loom large as Republicans want structural cost-saving changes in Medicare in exchange for raising income tax rates.

Mr. Obama has given ground on cost-of-living adjustments to Social Security and other federal benefits, but is trying to shield Medicare. Democrats have warned Obama they might bolt if he folds on raising Medicare's eligibility age. They have been less emphatic about cost-of-living adjustments.

Other components of the president's counter-proposal include:

• $1.2 trillion in new income tax revenue with a 39.6 percent (up from 35 percent) on income of $400,000 or more.
• $1.2 trillion in spending cuts divided this way: $800 billion in cuts; $290 billion in interest savings due to lower deficits; $130 billion in cost-of-living adjustments - - with specific protections to preserve increases for economically disadvantaged beneficiaries. Because changing cost-of-living adjustments would also affect where people fell in various tax brackets, this move would raise $90 billion
• The $800 billion in cuts would come from $400 billion in savings to health care entitlements like Medicare and Medicaid; $200 billion in better tax revenue collection, increased financial transaction fees and reduced federal employee benefits.
• $200 billion in domestic discretionary -- annual spending on basic government functions - divided equally between defense and non-defense programs.
• At least $50 billion devoted next year to infrastructure spending and more in latter years - figures still subject to negotiation.
• A one-year extension of unemployment insurance benefits.

Both sides have already agreed to create long-term solutions for the annual ritual of adjusting the Alternative Minimum Tax, the reimbursement formulas for Medicare physicians and a grab-bag of pro-business tax breaks.

Obama also did not ask for an extension of the temporary 2 percent payroll tax - a priority for some Democrats.

Funding for Superstorm Sandy will be handled separately from the emerging fiscal cliff package. The Senate is considering the administration's $60.4 billion request and the White House expects swift, bipartisan approval.

CBS News Capitol Hill producer Jill Jackson contributed to this report.

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Conn. Kids Laid to Rest: 'Our Hearts Are With You'

Visibly shaken attendees exiting the funeral today for 6-year-old Noah Pozner, one of 20 children killed in the Connecticut school massacre last week, said they were touched by a story that summed up the first-grader best.

His mother, Veronique, would often tell him how much she loved him and he'd respond: "Not as much as I [love] you," said a New York man who attended the funeral but was not a member of the family.

Noah's family had been scheduled to greet the public before the funeral service began at 1 p.m. at the Abraham L. Green & Son Funeral Home in Fairfield, Conn. The burial was to follow at the B'nai Israel Cemetery in Monroe, Conn. Those present said they were in awe at the composure of Noah's mother.

Rabbi Edgar Gluck, who attended the service, said the first person to speak was Noah's mother, who told mourners that her son's ambition when he grew up was to be either a director of a plant that makes tacos -- because that was his favorite food -- or to be a doctor.

Outside the funeral home, a small memorial lay with a sign reading: "Our hearts are with you, Noah." A red rose was also left behind along with two teddy bears with white flowers and a blue toy car with a note saying "Noah, rest in peace."

CLICK HERE for complete coverage of the tragedy at Sandy Hook.

Don Emmert/AFP/Getty Images

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The funeral home was adorned with white balloons as members of the surrounding communities came also to pay their respects, which included a rabbi from Bridgeport. More than a dozen police officers were at the front of the funeral home, and an ambulance was on standby at a gas station at the corner.

U.S. Sen. Richard Blumenthal, U.S. Rep. and Sen.-Elect Chris Murphy and Gov. Dannel P. Malloy, all of Connecticut, were in attendance, the Connecticut Post reported.

Noah was an inquisitive boy who liked to figure out how things worked mechanically, The Associated Press reported. His twin sister, Arielle, was one of the students who survived when her teacher hid her class in the bathroom during the attack.

CLICK HERE for a tribute to the shooting victims.

The twins celebrated their sixth birthday last month. Noah's uncle Alexis Haller told the AP that he was "smart as a whip," gentle but with a rambunctious streak. He called his twin sister his best friend.

"They were always playing together, they loved to do things together," Haller said.

The funeral for Jack Pinto, 6, was also held today, at the Honan Funeral Home in Newtown. He was to be buried at Newtown Village Cemetery.

Jack's family said he loved football, skiing, wrestling and reading, and he also loved his school. Friends from his wrestling team attended his funeral today in their uniforms. One mourner said the message during the service was: "You're secure now. The worst is over."

Family members say they are not dwelling on his death, but instead on the gift of his life that they will cherish.

The family released a statement, saying, Jack was an "inspiration to all those who knew him."

"He had a wide smile that would simply light up the room and while we are all uncertain as to how we will ever cope without him, we choose to remember and celebrate his life," the statement said. "Not dwelling on the loss but instead on the gift that we were given and will forever cherish in our hearts forever."

Jack and Noah were two of 20 children killed Friday morning at Sandy Hook Elementary School in Newtown, Conn., when 20-year-old Adam Lanza sprayed two first-grade classrooms with bullets that also killed six adults.

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Japan's next PM Abe must deliver on economy, cope with China

TOKYO (Reuters) - Conservative ex-premier Shinzo Abe will get a second chance to lead Japan after his Liberal Democratic Party surged back to power in Sunday's election, but he must move swiftly to bolster a sagging economy and manage strained ties with China to avoid the fate of his short-lived predecessors.

Abe, whose party won by a landslide just three years after a crushing defeat, is due to meet the leader of its small ally on Monday to cement their alliance and confirm economic steps to boost an economy now in its fourth recession since 2000.

The victory by the LDP, which had ruled Japan for most of the past 50 years before it was ousted in 2009, will usher in a government pledged to a tough stance in a territorial row with China, a pro-nuclear energy policy despite the 2011 Fukushima disaster and a potentially risky recipe for hyper-easy monetary policy and big fiscal spending to boost growth.

Projections by TV broadcasters showed that the LDP had won at least 294 seats in the 480-member lower house, while its ally the New Komeito party took 31 seats.

That gives them a two-thirds majority needed to overrule parliament's upper house in most matters. Since 2007, successive governments have been hamstrung by a "twisted parliament" where ruling coalitions lacked control over the upper house, which could block most legislation.

While investors have already pushed the yen lower and share prices higher in anticipation of an LDP victory and Abe's economic stimulus, the "super majority" drove the yen to a 20-month low against the U.S. dollar as far as 84.48.

Japan's benchmark Nikkei opened up 1.6 pct on Monday, hitting a high of more than eight months.

Prime Minister Yoshihiko Noda's Democratic Party of Japan (DPJ) was crushed. It was forecast to win 57 seats -- less than a fifth of its showing in 2009, when it swept to power promising to pay more heed to consumers than companies and pry control of policies from bureaucrats.

But voters felt the DPJ failed to live up to those pledges and the party was hit by defections before the vote due to Noda's unpopular plan to raise the sales tax to curb public debt, which is already more than twice the size of the economy.

"This was an overwhelming rejection of the DPJ," said Gerry Curtis, a professor at New York's Columbia University. That sentiment was echoed in Japanese media.

"In a word, rather than a huge victory for the LDP, this election was a massive defeat for the Democrats," the Nikkei business daily said in an editorial.

Analyst Bruce Klingner of the Heritage Foundation think tank in Washington agreed, but said it "also reflects an embrace of conservative views" after strained relations with Japan's neighbors in recent years.

"Chinese assertiveness and North Korean provocations nudged the public from its usual post-war complacency toward a new desire to stand up for Japanese sovereignty," he said.

However, that did not mean the Japanese were embracing a return to militarism, added Klingner, a former CIA analyst.

LOW TURNOUT

Abe, expected to be voted in by parliament on December 26, will also have to prove he has learned from the mistakes of his first administration, plagued by scandals and charges of incompetence.

Voter distaste for both major parties has spawned a clutch of new parties, including the Japan Restoration Party founded by popular Osaka Mayor Toru Hashimoto, which took 54 seats according to media projections.

Media estimates also showed turnout at around 59 percent, which could match the previous post-war low.

LDP leader Abe, 58, who quit as premier in 2007 citing ill health, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts say he may temper his hard line with pragmatism once in office.

The soft-spoken grandson of a prime minister, who will become Japan's seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military so Japan can play a bigger global security role.

President Barack Obama congratulated Abe and underlined U.S. interest in working with the longstanding American ally.

"The U.S-Japan Alliance serves as the cornerstone of peace and prosperity in the Asia-Pacific and I look forward to working closely with the next government and the people of Japan," he said in a statement.

Abe, who visited China first during his first term, said he would start off this time by going to Washington.

The LDP, which promoted nuclear energy during its decades-long reign, is expected to be friendly to power utilities, although deep public concerns remain over safety.

Abe has called for "unlimited" monetary easing and big spending on public works to rescue the economy. Such policies, a centerpiece of the LDP's platform for decades, have been criticized by many as wasteful pork-barrel politics.

Jiji news agency said previous LDP Prime Minister Taro Aso, 72, could be tapped as finance minister and deputy premier. He launched massive economic stimulus packages to fight the impact of the 2008-2009 global financial crisis but was dogged by policy flipflops and gaffes.

Many economists say that prescription for "Abenomics" could create temporary growth that would allow the government to proceed with a planned initial sales tax rise in 2014 to help curb public debt.

But it looks unlikely to cure deeper ills or bring sustainable growth to Japan's ageing society, and risks triggering a market backlash if investors decide Japan has lost control of its finances.

(Editing by Tomasz Janowski and Paul Tait)

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