ERDOGAN: “A SETTLEMENT ON CYPRUS WILL REQUIRE STEPS FROM BOTH SIDES”
Prime Minister Recep Tayyip Erdogan said yesterday that both Cyprus’ Turkish and Greek sides needed to take steps in order to reach a settlement on the island. In an interview with Greek daily Elefterotipiya, Erdogan said, “One-sided initiatives will end up fruitless. For a resolution, both sides can progress only through bilateral understanding.” Regarding Greece’s claim that last week Turkish fighter jets had harassed a Greek passenger plane, Erdogan called the allegations “regrettable,” adding, “Turkish jets would never harass a civilian plane. I don’t credit it.” /Turkiye/

GUL RETURNS TO TURKEY FROM WORLD ECONOMIC FORUM
After completing his contacts in Amman, Jordan as part of the World Economic Forum (WEF), Foreign Minister Abdullah Gul returned yesterday to Ankara. At Esenboga Airport, telling reporters about his recent meeting with UN Secretary-General Kofi Annan on the Cyprus issue, Gul said, “Whether it’s Annan’s plan or not is unimportant. The important thing is not the name attached, but the contents of a plan to satisfy both sides.” Stating that he had suggested to WEF President Klaus Schwab that Turkey host the 2005 Davos meeting, Gul said that Schwab had welcomed the idea and that work on the topic would begin soon. Pointing to his face-to-face talks with various countries’ leaders during the WEF, Gul stated that the Palestinian, Swiss and Greek foreign ministers were all expected to visit Turkey in the coming days. /Turkiye/

CABINET SUPPORTS SHORTER COMPULSORY MILITARY SERVICE
The nation’s Cabinet met yesterday to discuss a number of issues, including a proposal to shorten the term of compulsory military service for males. Speaking to reporters after the meeting, government spokesman and Justice Minister Cemil Cicek said that the government supported the General Staff Office’s proposal to shorten compulsory service, a step forward in Turkey’s EU accession. However, Cicek declined to give details about when the measure might be implemented. In addition to shortening military service from 18 months to 15, the proposal would also cut the number of active-duty soldiers by 17%. /Milliyet/

BABACAN: “TURKEY HAS BEEN NEGOTIATING WITH THE US ON A POSSIBLE $8.5 BILLION LOAN PACKAGE”
For the last two or three weeks, Ankara has been negotiating with Washington over a possible $8.5 billion loan package, said State Minister for the Economy Ali Babacan yesterday. Last month the US Congress approved a $1 billion grant for Turkey, leverageable for about $8.5 billion in loans, to help compensate its losses due to the Iraq war. The amount was disbursable at the discretion of the US State Department, officials from which Foreign Undersecretary Ugur Ziyal met with in Washington last week. Speaking in Amman, Jordan, at the World Economic Forum meetings, Babacan said there were no obstacles to the loans and that the US waned to tie down the details soon to disburse the funds. “Our government’s plans have assumed all along that no more loans were forthcoming, so this will act as an unexpected boost to the economy” said Babacan. “The payment plan will be shaped according to Ankara’s conditions.” The negotiations will be completed by telephone, he added. News of the imminent loans could be taken as another sign that the rifts in Turkish-US relations caused by the Iraq war are now well on their way to mending. /Aksam/

IMF TURKEY REPRESENTATIVE BREKK URGES TURKEY TO MOVE FASTER ON ECONOMIC REFORMS
Speaking at an economic forum in the southern province of Antalya yesterday, International Monetary Fund Turkey Representative Odd Per Brekk said that Turkey should act more quickly to implement reforms required by the IMF-supported economic program. Brekk stated that he had hoped the fifth review of the program would be completed as soon as possible, adding that he believed the government would soon implement social security reform and carry through pending privatizations. /Milliyet/

EU ANNOUNCES FINANCIAL AID FOR GAP PROJECT
European Union Commission representation in Turkey head Hansjoerg Kretschmer said yesterday that the Union had decided to henceforth extend 500 million euros in grants every year to Turkey’s Southeast Anatolian Project (GAP). The sums would be used to improve education, agriculture, and social and cultural life in Turkey’s eastern and southeastern Anatolia regions. /Anatolia News Agency/

DYP CELEBRATES 20TH ANNIVERSARY
The True Path Party (DYP) yesterday celebrated its 20th anniversary. Speaking at the gathering, DYP leader Mehmet Agar criticized the ruling Justice and Development Party’s (DYP) foreign policy. Over the last decade, the DYP has both held the prime ministry and was a coalition partner, but in last fall’s elections it fell below the parliamentary representation threshold. Agar himself was elected to Parliament as an independent, and since joining the DYP has been its sole deputy. /Milliyet/

US SENATORS LOTT, ROCKEFELLER TO LEAD DELEGATION TO TURKEY
Prominent US Senators Trent Lott and Jay Rockefeller, a Republican and a Democrat, are set to lead a US senatorial delegation to Ankara next week. Lott and Rockefeller are expected to meet with Prime Minister Recep Tayyip Erdogan and Interior Minister Abdulkadir Aksu as well as Foreign Ministry officials. Their visit comes on the heels of Foreign Minister Undersecretary Ugur Ziyal’s fence-mending visit to Washington last week. /Star/

FORMER PM ECEVIT SENDS WRITTEN TESTIMONY TO PARLIAMENT ANTI-CORRUPTION COMMISSION
Bulent Ecevit, prime minister during the 1999-2002 Democratic Left Party (DSP)-led coalition government, yesterday submitted written testimony to Parliament’s special Anti-Corruption Commission. Ecevit reportedly stated in his five-page testimony that the coalition government had waged war against corruption to an extent unmatched by any other government in Turkey. Responding to commission testimony by former coalition partner Motherland Party leader Mesut Yilmaz saying that Ecevit’s May 2001 media statements triggering an economic crisis had been sharper than was appropriate, Ecevit said only, “Back then I might have listened to Yilmaz, but not now.” The ensuing crisis devastated most ordinary Turks, while other financial players reaped profits from the chaos. The Anti-Corruption Commission has notably so far heard from Mesut Yilmaz and former Deputy Prime Minister Husamettin Ozkan, among others. /Cumhuriyet/

TOBB TO SET UP JOINT CONTACT GROUP WITH US THINK TANK CSIS
The Union of Turkish Chambers and Commodities Exchanges (TOBB) and Washington-based think tank the Center for Strategic and International Studies (CSIS) have agreed to set up a joint contact group in the interests of boosting Turkish-US economic and trade relations. The agreement establishing the group is due to be signed on Friday by TOBB head Rifat Hisarciklioglu and CSIS officials in Washington. /Anatolia News Agency/

TURKEY KNOCKS BRAZIL OUT OF CONFEDERATION CUP, SET TO FACE FRANCE IN SEMIFINALS
Turkey’s football team knocked world champions Brazil out of the Confederation Cup with a 2-2 draw in yesterday’s match played in St. Etienne, France. Both sides finisHed with four points and the same goal difference but the Turkish team went through on goals scored – four to Brazil's three. “We had our chance to qualify, and we took it,” said team coach Senol Gunes, who also led the team in its historic performance in last year’s World Cup. “We had wanted to play France in the final. Now it will have to be the semifinal.” Turkey is due to face that match on Thursday. /All Papers/

SOURCE: OFFICE OF THE PRIME MINISTER, DIRECTORATE GENERAL OF PRESS AND INFORMATION