>> your welcome to the "journal." fresh clashes in syria as questions are raised about the credibility of arab league monitors. funeral ceremonies take place for legal korean leader kim jong il amid scenes of public grief. investors showed unexpected interest in the second italian

bonds raging. the country expecting a windfall. the violent crackdown on anti- government protesters in syria continues, despite the presence of arab peace monitors in the country. activists said syrian security forces fired on thousands of demonstrators, killing at least six people. meanwhile, arab league monitors visited the city of homs, which has seen violent demonstrations the past few months, but monitors said they had observed nothing out of the ordinary. syrian activists have denounced the fact-finding mission as a force. >> the observers have been home since tuesday. this video appears to show them surrounded by a crowd of angry locals. people say the monitors are

ignoring their attempts to explain what is happening. the head of the mission was quoted as saying some places looked "a bit of a mess" but that he had seen nothing frightening. these videos are said to show the violence that wracked the city over the past week, before the observers arrived. there are reports that some troops and tanks have now been pulled out of the city in compliance with the deal with the arab league, and state television reports that almost 800 political prisoners have been released, another condition of the deal. but activists say thousands of people are still being held in government jails. reports keep coming in of more deaths elsewhere in the country. the observers are not due until thursday here and more video has been posted online showing troupe's opening fire on demonstrators.

>> for more background on the monitors in syria, we spoke earlier with gabrielle a teller, a journalist who has worked in the region, and we asked what was known about the composition of the region -- gabriella keller. >> we do not know much. what we know is because the names have been publicized. they come from various arab countries, and not all the names have been publicized. they are human rights workers, diplomats, and military people. we know that the mission is headed by a sudanese general, who is head of security for the sudanese government. this is another reason for the activists to be suspicious because there are activation is that he was involved in the genocide in darfur and is therefore really not the right person to monitor and possible humanitarian crisis.

>> that was journalist debra l. keller -- gabriella keller speaking to us earlier. berlin requested a meeting with damascus's envoy two days after an opposition figure in berlin was a salted at his home. a member of the syrian national council and german green party says two men claiming to be police arrived at his apartment and beat him with metal bars and clubs. the green party has blamed syrian agents. the united states has warned iran against any attempt to disrupt a vital oil trade route. the iranian vice-president said that not a drop of oil would pass through the strait of hormuz, a key shipping route.

a blockade could affect 30% of the world's oil transit. western powers are considering widening sanctions against iran over its nuclear program. the trial of ousted egyptian president mubarak began again in cairo after a three-month break. the former leader was wheeled in on a stretcher, along with his two sons of former officials, he faces a range of charges including involvement in the deaths of hundreds of protesters and corruption during his three decades in office. after a few hours, proceedings were postponed again until next week. north koreans have been a final farewell to their leader, kim jong il, who died a week and a half ago from a heart attack. kim's son and successor led the procession through the streets with thousands gathered to catch a final glance of their former

leader. >> the ceremony broadcast live on north korean state television was organized down to the last detail. kim jong il's crew made its way through the streets of pawning. his son and successor and many members of the ruling class walked alongside. north koreans are being given plenty of time to bid farewell. it was a collective outpouring of grief. soldiers spoke of how sad and they were to learn of came -- kim's passing, but no foreign media or delegations from abroad were allowed in. observers say the events are aimed at strengthening the cult of personality of the kim

dynasty. it will be up to kim jong un, dubbed the great successor, to take over power, but observers say it is unlikely he will in der north korea to the outside world. >> let's check in with monica now. it is still too early to tell, but it seems markets might be less jittery. italy has managed to attract private investors in its latest far lower borrowing costs for the eurozone straggler. it has auctioned off half the level of last month. it could also be a sign of the effectiveness of the european central bank's efforts to fix the crisis. >> it could be a sign of returning investor confidence. italy had no trouble finding buyers for almost 11 billion euros in short-term debt on monday.

expected, pushing yields down. just before christmas, the ecb flooded eurozone banks with some 500 billion eurosing, long- term loans. some of that money now seems to be flowing into the purchase of italian government bonds. rome has announced a 20 billion euro budget austerity package aimed at reassuring investors. the measures include tax hikes, a rise in the pension age, and steps to combat tax evasion. >> we have been in similar situations many times before. yet, we managed to hold on and most -- if we manage to hold on and, most importantly, make everyone pay, we will make it. >> we need to concentrate on growth. austerity was necessary, but without growth, we are going nowhere. >> despite the positive news on wednesday, some analysts say the real test will be thursday when italy options more than 8 billion euros in low-return

bonds. there were also mixed reactions on the trading floor. we got this report from the frankfurt stock exchange. >> eight two-stage reaction to italy's auctioning off of state debt -- but two-stage reaction -- a two-stage reaction. people became skeptical or started thinking that the banks had an easier time offering money because there was so much money at their disposal from the european central bank. the time they had to part with their money was relatively short for this auction. next options are up, so the dax lost in the afternoon over worries that italy is not really out of the bad situation yet, and there could be some cause for nervousness in the future. >> there was potential earlier in the day for some good gains,

but sentiment has turned sour on european exchanges. germany's dax slipped to end the day at 57.71. euro stocks it be lost 1.5%, to close at 2255. the dow jones industrials were in negative territory, down by almost 1%. on currency markets, the euro has sold to its lowest point since january and is currently trading for $1.2942. china signed a major deal to start drilling afghan oil reserves. it is the first time in decades that afghanistan has entered into an international agreement for oil production. the country's mineral deposits are valued at over $2 trillion -- at over two trillion euros. western firms are hesitant to invest because of security concerns. the afghan minister in line signed the contract with the

president's national petroleum corporation. the value is estimated at $700 million. in return for drilling rights, a committed itself to investing in afghanistan's infrastructure. kabul will take 70% of the profits, not including taxes. >> you heard from me earlier that the deal has been very much in favor of afghanistan in terms of fiscal benefits. >> currently, afghanistan imports all its oil and gas from neighboring iran and central states. the country has little experience with exploiting natural resources. with chinese money and know-how, it wants to tap its fossil fuel reserves. the contract would develop fields in the provinces with reserves estimated at 87 million barrels. but both sides believe the actual figure will prove much higher. wednesday's signing is the second chinese success in securing afghan resources. three years ago, a chinese

company secure rights to develop some of the world's biggest copper reserves. production is set to begin in 2014. >> russia's state-run energy giant has finalized a deal with turkey to lay a natural gas pipeline to europe under turkish waters. the south stream pipeline would connect russia's energy fields to the balkans. russia hopes to pump billions of cubic meters of gas per year from markets stretching from italy to slovenia. the deal gives south stream a jump on the nabuku pipeline. negative economic news from japan. the government says the unemployment rate is refusing to budge, and industrial production has fallen. the drop of 2.6% last month is bigger than expected. manufacturing of cars and consumer electronics took the biggest hit as factories located in thailand were knocked out by the massive floods there. japan is also struggling with

unfavorable exchange rates and falling demand. but the slowdown, tokyo expects to regain some steam in the coming months. in germany, small and medium- sized firms are quite optimistic about their prospects in the new year. a poll shows half expect business as usual, and 1/3 expect improvement. most of these firms are privately owned and ask -- are seen as forming the background of the german economy. a large majority of them planned to spend as much on investments in 2012 as this year and every third company plans to create new jobs. a major blow to the italian mafia. you have more on that. >> yes, i do. spanish authorities have arrested a man they believe it is a leading figure in italy's mafia. police released footage showing the 46-year-old as he was apprehended by undercover officers in barcelona. he was sought -- thought to be

the head of a dangerous clan. he is wanted in italy for crimes including murder, extortion, and money laundering. extradition proceedings are under way. an weu -- eu deadline to implement new rules on selling telecommunications data is to be implemented today, but some believe the new rules fly in the face of privacy regulations. proponents say even limited data retention can fight crime and terrorism. >> angela merkel's conservatives are in favor of storing telecommunication records, but her junior coalition partner strictly opposed data retention. now, brussels may step in to make germany comply with the 2006 eu directive. it requires telecommunications data to be stored for at least six months. germany's free democratic justice minister says data storage should be restricted to criminal investigations.

>> the federal justice ministry has always pointed out how difficult it would be to credibly enforce the directive before it has been revised and that the german government intends to constructively contribute to its restriction. >> internet activists who see the directive as to invasive -- too invasive are on the side of the justice minister. >> storing large amounts of telecommunication data actually poses a danger. i think the security issues are being exaggerated. >> should the e you make good on its threat to enforce the directive as it stands, germany faces millions of euros in fines. >> 31 people have been injured in a plane accident in care to stand. a passenger jet broke its wing and caught on fire as it tried to land in heavy fog. it was en route to a provincial airport.

the plane came to a halt after sliding off the end of the runway. brown's staff were able to extinguish the fire and evacuate all 88 passengers -- ground staff. christians revere it as the birthplace of jesus, but on bethlehem's church of the nativity was more like a soccer riot. a fight erupted at the holy site, and specific areas of the church are administered by either catholic, orthodox, and i mean clerics, and turf battles are not uncommon. palestinian police eventually rushed in with batons to restore order. it is considered to be one of the world's toughest tests for sailors, but now the yacht race from mainland australia to tasmania has ended under a cloud of doubt. coming from behind, as released team crossed the finish line

first, just ahead of last year's finishers, but they immediately lodged a complaint, claiming that the winners had used a tv helicopter to spy on them and cover their plan. an investigation is now under way. intrigue on the high seas. stay tuned for "in depth" coming up next.

leaving behind 2011, but many global challenges will carry through to the new year. europe's largest economy, germany, has a key role in the debt crisis. there has been a lot of debate over the german chancellors leadership during these troubled times. here is a closer look at what is in store for 2012. >> for european governments, it

was the issue of the year, rescuing the euro. national and eu leaders hurried from one summit to the next. yet even before one crisis here has ended, another one seems to be living. the imf managing director fierce 2012 could see the worst global slump since the great depression that kicked off in 1929. the strain of sovereign debt continues to weigh on the mood in europe, but what about germany? will all the eu summitry be enough to end the debt crisis in 2012? >> the results achieved at the brussels summit in december and share that all eurozone states will enshrine debt ceilings in their constitutions. that is an important first step. >> regarding budgets and that, i caution against thinking you just have to flip a light switch. people think lights will come on and that will not be a problem anymore, but everyone knows once you have overdrawn your account, the problem cannot be fixed overnight.

>> putting this huge burden on the shoulders of italy and greece raises the danger that society in those countries will break apart. >> afghanistan has other concerns. nato has been waging war against al qaeda and the taliban for a decade. now, countries including germany have begun pulling troops out. in 2012, the presence in afghanistan will drop to 4400 troops with afghan forces and police stepping into the breach. but germans are asking -- is afghanistan ready for the foreign troop withdrawal? >> on the one hand, there are plenty of places where the afghan forces will be able to provide security in 2012, while assuring the existence of a reliable security structure, but we will also be looking to regions where we will have to remain active for years and perhaps even retain military

responsibility past 2014. >> i do not think having so many foreign troops in the country is good for afghanistan. that is why we oppose the presence of the army's there from the start, and we still support an immediate withdrawal -- we oppose the presence of the foreign armies there. >> and orderly withdrawal can and should begin now. >> since november, germany has been grappling with allegations that a neo-nazi sell went undetected for a decade and killed 10 people. the discussion has centered on the far right npd party and the part it played in the case. they have welcomed new knox's of violent pasts into their ranks. the npd -- a challenge to german

democracy. but will it be banned? >> in my view, the terrorist murders were the worst thing germany had seen since the raf murders of the 1970's. i am also a shame for what they have done to germany's image abroad. that is why it is important to me that we do not allow them to be seen as a permanent part of germany's political system. >> and then would be a blow to right wing extremists structures. right-wing extremist structures. above all, it would be prevented protection for the victims. >> it all really depends on establishing the greatest certainty possible. only then, this motion can be successful. that is why we should put diligence ahead of speed. >> for germany's center-right coalition, 2011 was a year of

near constant crisis. the cdu's junior partner is now fighting for its very survival. can the coalition survived? that 2012 will be a better year for the coalition in 2011 or 2010. we will stick together, and at his together we will go into the general elections in 2013. the coalition will survive. >> all bets are off. right now, they are barely making an impact in the polls, so it will be difficult for the chancellor to continue working with a partner like this. it is all of in the air. >> i doubt whether the government can survive. my feeling is it could fall apart at any moment. they have realized there is no way of getting things going with

the fdp. >> all the same, some within the governing coalition will have to get going to meet the challenges that 2012 is sure to present. >> let's get more analysis on the outlook for 2012. for that, i am joined by our chief political correspondent. thanks for being with us. let's start by talking about germany's coalition government. how long do you think it will last? >> the year is ending with a good deal of sniping within the coalition. in fact, the free democrats, the junior coalition partner, who also continued to more or less self destruct. latest polls show that of national elections were to be held right now, they would not make it into parliament. however, we heard plenty of swan songs for this coalition in the past, and the fact is that it has always managed to hold on. the free democrats certainly have no alternative. they will be eager to see the

coalition go all the way through tv and. elections are scheduled for 2013. i think the chancellor himself will also the everything in her power to hold things together. the crucial thing to watch is may 2012. that is one regional elections will be held. if that state's elections do not prove to be good for the free democrats, we may see some calls for early elections nationally and for that coalition to give up. >> we know tensions have been exacerbated by the crisis in the eurozone. securing the future of the bureau has been the priority of chancellor merkel. what will it be like in the coming year? >> indeed, and she more or less got her way at the most recent summit within the eu. she did push through proposals that would give a great deal more budgetary rigor to the eurozone. those proposals are said to be

implemented by the middle of 2012, so that is something to watch. will those decisions be carried out as they were made in december? and even if they are carried out, is that enough to stabilize the eurozone in the short term? many people agree that the proposal certainly will give more long-term stability, but there are continuing calls for a cooling of risk to help the most deeply indebted countries. will we see eurobonds emerged in 2012 -- emerge in 2012 against the wishes of the chancellor? >> the discovery of a terror cell shocked many germans. what do you think this will lead to in 2012? >> we will continue to hear calls for the ban of the far right npd party, but there is a very high threshold for banning any party. we will see the federal prosecutor continue to devote a great deal of resources to

uncovering further terrorist networks on the right, but i think that band, perhaps the main topic there. thank you. with that, we wrap up the "journal" at this hour. stay tuned. thank you. captioned by the national captioning institute --www.ncicap.org--