Hong Kong shares may trim strong 2013 start after Fed voices concern

HONG KONG, Jan 4 (Reuters) - Hong Kong shares could end a
two-day rally on Friday, tracking Wall Street weakness after
signs that the U.S. Federal Reserve has growing concerns about
its stimulative monetary policy.
Any losses could be limited if mainland China markets reopen
strongly on Friday, trading for the first day in 2013 after a
three-day New Year holiday.
On Thursday, the Hang Seng Index ended up 0.4 percent
at 23,398.6, its highest since June 1, 2011. The China
Enterprises Index of the top Chinese listings in Hong
Kong added 0.8 percent, reaching another peak since August 2011.
On the week, the indexes are up 3.2 and 5.5 percent,
respectively. The H-share index's relative strength index (RSI)
value suggests that it is now at its most overbought since
October 2010.
Elsewhere in Asia, Japan's Nikkei is up 3 percent in
its first trading session for the year, while South Korea's
KOSPI is down 0.4 percent at 0042 GMT.
FACTORS TO WATCH:
* Consolidation of Austria's cutthroat telecom market moved
ahead on Thursday when Hutchison Whampoa Ltd completed
its 1.3 billion euro ($1.7 billion) takeover of Orange Austria,
making it the country's third-biggest mobile operator.
* Hong Kong's Li & Fung Group agreed to acquire a
majority stake in South Korean children's apparel maker Suhyang
Networks for roughly 200 billion won ($188 million), a South
Korean newspaper reported on Thursday.
* Hong Kong November 2012 retail sales rose 9.5 percent from
a year earlier.
* Bestway International Holdings Ltd has cancelled
part of its mining area in Mongolia due to the implementation of
new regulations.
* Chinese property developer Kaisa Group Holdings Ltd
has issued $500 million in senior notes due 2020
bearing an interest rate of 10.25 percent per annum.
* Chinese property developer Country Garden has
issued $750 million senior notes due 2023 with an interest rate

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Analysis: Alimta patent seen as Lilly's "wild card"

NEW YORK (Reuters) - Eli Lilly & Co may have a $15 billion wild card up its sleeve as it waits for desperately needed new drugs to bear fruit.
Should an obscure patent on Lilly lung cancer drug Alimta survive a court challenge this year, the company would be able to wring more than five additional years of peak sales out of the fast-growing product that it would otherwise lose to cheaper generics.
Annual sales of Alimta are expected by Wall Street to climb to $3.5 billion by 2016, when its basic patent lapses. Once faced with generic competition, branded drugs typically lose more than 80 percent of sales within a year.
While the likelihood of a Lilly victory is not a widely held view, a growing number of patent attorneys and industry analysts believe the particular patent being challenged will pass legal muster.
Alimta may keep its marketing exclusivity until 2022, thanks to protection from a separate so-called method-of-use patent on the way the drug is administered that many investors and Wall Street watchers are not aware of or have failed to appreciate.
Historically, method-of-use patents have had a much tougher time holding up in court than basic chemical patents on medicines. They are often viewed as manipulative, blatant efforts to extend the sales life of products.
But this one could be different because of specific safety language in the Alimta label that could provide a road block to cheaper generics.
The so-called '209 patent covers the administration of two nutrients - folic acid and vitamin B12 - to patients before they receive Alimta, to protect against toxic side effects of the cancer drug. Alimta's approved label instructs doctors to administer the nutrients prior to and during use of the medicine.
"For a generic to win approval, it usually has to copy the branded drug's label," said patent attorney Ben Hsing, a partner in the law firm of Kaye Scholer in New York.
Generics could have a hard time doing so because Lilly has a separate patent on the pre-administration of the nutrients, said Hsing, who last year successfully defended Roche Holding AG's Tarceva lung cancer drug from patent challenges by generic drugmaker Mylan Inc. "So I think generics would have a tough time" prevailing.
If generic versions of Alimta cannot mention use of the nutrients in their own labels, they could be compromising patient safety, which is not likely to sit well with health regulators that must approve any generic, according to patent attorneys.
Lilly, whose attorneys declined to comment for this story, is expected to counter legal arguments that use of folic acid and vitamin B12 is "obvious" and therefore not patentable by arguing that its researchers discovered the protective effects of the nutrients with respect to Alimta specifically.
Gary Frischling, a Los Angeles-based patent attorney for Irell & Manella, agreed that the language in Alimta's label could keep cheap generics at bay until 2022.
"This seems to be a case in which research done on how to safely use this particular drug has turned out to be very economically important," said Frischling, who has represented Elan Corp and other drugmakers.
PATENT WIN WOULD PROVIDE NEEDED BOOST
Lilly badly needs new medicines to replace ones that have already lost patent protection or will in the next two years.
In October 2011, the company began facing one of the worst patent cliffs in industry history when its biggest drug, Zyprexa for schizophrenia, began facing generics. Sales of the former $4.5 billion-a-year drug have plunged by two-thirds.
The pain worsens in December of 2013, when Lilly's current top seller, the $5 billion-a-year anti-depressant Cymbalta, goes generic, and after cheap versions of its $1 billion Evista osteoporosis drug arrive in early 2014.
Blockbuster Alimta sales well into 2022 could go a long way toward easing some of that pain, while other new medicines work their way toward approvals.
Generic drugmakers Teva Pharmaceuticals Industries Ltd and APP Pharmaceuticals LLC have challenged the validity of the '209 patent, and will battle Lilly this summer in federal court in the drugmaker's hometown of Indianapolis.
The U.S. Court of Appeals in Washington last August upheld the validity of the patent on the drug's chemical structure, protecting it from generics through late 2016.
If the method of use patent also holds up in court, Alimta would then be protected from 2017 to 2022, according to Seamus Fernandez, an analyst with Leerink Swann, who received a four-star rating from StarMine for his predictions about Lilly over the previous two years.
His "outperform" rating on Lilly is based partly on that expectation, even though the general consensus on Wall Street is to the contrary.
"We see a real opportunity here," said Fernandez, who estimated Lilly's earnings per share would get more than a 25 percent lift in 2017, 2018 and 2019 if the patent is upheld.
"It would provide a pretty nice runway to launch products and get them to market," said Fernandez. He cited Lilly treatments for Alzheimer's disease, arthritis, psoriasis, diabetes and cancer now in late-stage studies.
Michael Liss, portfolio manager at American Century Investments, said Lilly's profits and share price could expand significantly if only a few good-selling drugs are introduced during the next few years.
Sanford Bernstein's Tim Anderson also has an "outperform" rating on Lilly, based largely on confidence the method of use patent will prevail in court. Anderson also received a four-star out of five StarMine professional rating for his analysis of Lilly.
The company has taken a conservative stance, not stressing the possibility of a patent victory. Lilly Chief Financial Officer Derica Rice has said an extension of Alimta's patent would be an "upside" for Lilly.
Attorneys for Lilly declined to comment on the case. A Teva spokeswoman also declined to comment.
To be sure, keeping Alimta patent protection beyond 2016 is no lock. Based on historical precedence, Morningstar analyst Damien Conover offered little hope the patent will pass muster with the federal court. "Most people expect the patent to fail," Conover said. "Method-of-use patents tend to be particularly weak."
But most people may be underestimating the protective differences of this particular patent, according to legal experts.
Patricia Carson, a patent lawyer with the firm of Kirkland & Ellis in New York, said pre-administration of folic acid and vitamin B12 appears to be "specific to Alimta" and not a procedure common with other drugs.
"In development (of Alimta), they came up with this type of method," she said.
Even so, Carson said Lilly may have to convince the court the method would not have been obvious to the ordinary researcher.
Should the Alimta patent prevail, Conover said it would significantly bolster Lilly's attractiveness and profits beginning in 2017. It also would help Lilly cope with a second patent cliff that would begin that year, as its Cialis impotence treatment and Effient blood clot drug begin facing generics. The drugs now have annual sales of $2 billion and $450 million, respectively.
Lilly's fourth-quarter results, due later this month, are expected to show earnings tumbled about 24 percent in 2012. The company expects to begin rebounding from its patent cliff in 2015.
Cowen and Co analyst Steve Scala, called the patent case a "wildcard opportunity" for Lilly.
Lilly shares rose 19 percent in 2012, compared with a 10 percent gain for the ARCA Pharmaceutical Index of large U.S. and European drugmakers, suggesting confidence in an eventual turnaround for Lilly.

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Stocks fade after Fed discloses split on stimulus

NEW YORK (AP) — A two-day rally in the stock market came to an end Thursday afternoon when an account of the Federal Reserve's last meeting revealed a split between bank officials over how long the Fed should keep buying bonds to support the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then slid into the red around 2 p.m. Eastern, after the Fed released the minutes from its December meeting.
The Dow ended with a loss of 21.19 points at 13,391.36.
The S&P 500 lost 3.05 points to 1,459.37 and the Nasdaq composite fell 11.70 to 3,100.57.
At last month's meeting of the Federal Reserve's policy-making committee, the central bank pledged to buy $85 billion of Treasurys and mortgage-backed bonds and also keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent.
On Thursday, the minutes from that meeting showed Fed officials were divided over the bond purchases. Some of its 12 voting members thought they should continue through this year, while another group thought they should be slowed or stopped much earlier. Just "a few" members saw no need for a time frame, according to the minutes.
"It's pretty surprising," said Thomas Simons, market economist at the investment bank Jefferies. "I think everybody thought there was broad agreement on policy, but now it seems like few of them really wanted to vote for it."
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed. UnitedHealth Group led the Dow lower. The insurance giant's stock fell $2.55 to $51.99 after analysts at Deutsche Bank and other firms cut their ratings on the stock.
"It's natural to relax a bit after such a huge day as yesterday," said Lawrence Creatura, who manages a small-company fund at Federated Investors.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the "fiscal cliff."
That deal gave the market a jump start into the new year. The Dow and the S&P 500 are already up more than 2 percent.
"We're off to a very strong start," Creatura said. "The dominant reason is the resolution of the fiscal cliff. But January is usually a strong month, as investors all shift money into the market at the same time. When the calendar flips, it's as if you're allowed to begin the race anew."
Economists had warned that the full force of the fiscal cliff could drag the country into a recession. The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are likely in the months ahead. Congress must raise the government's borrowing limit soon or be forced to choose between slashing spending and paying its debts.
In other Thursday trading, prices of U.S. government bonds fell, sending their yields higher. The yield on the benchmark 10-year Treasury note rose to 1.90 percent from 1.84 percent late Wednesday, a sign that some bond traders believe the Fed minutes hinted at an early end to its bond buying.
Family Dollar Stores sank 13 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $8.30 to $55.74.
Nordstom Inc. surged 3 percent after the department-store chain reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.64 to $55.27.
Among other stocks making big moves:
— Transocean jumped $2.96 to $49.20. The owner of the oil rig that sank in the Gulf of Mexico in 2010 after an explosion killed 11 workers reached a $1.4 billion settlement with the Justice Department.

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Egypt says it seizes US-made missiles near Gaza

 Egyptian authorities seized six U.S.-made missiles in the Sinai Peninsula Friday that security officials said were likely smuggled from Libya and bound for the Gaza Strip.
Libya's 2011 uprising and subsequent civil war left the country awash in weapons, including rocket-propelled grenades, automatic rifles and other munitions. Since the end of the country's eight-month conflict, smugglers have transferred some of the weapons to Islamic militants in Egypt's Sinai Peninsula, which has faced a security vacuum since the country's own uprising, and from there onward in underground tunnels to neighboring Gaza.
Security officials said that police working on a tip from local Bedouin discovered the six U.S.-made missiles hidden in a hole in the desert outside the northern Sinai city of el-Arish before dawn on Friday. They said the anti-tank and anti-aircraft missiles have a range of up to two kilometers (one mile).
The officials, who spoke anonymously because they were not authorized to speak to media, did not specify the make of weapon.
Over the past year, Egypt's Interior Ministry has confiscated hundreds of weapons smuggled from Libya, often near the Egyptian city of Marsa Matrouh, which is located along the Mediterranean coastal highway some 430 kilometers (270 miles) northwest of Cairo. Last month, security officials seized 17 French-made missiles near el-Arish, some 750 kilometers east of Marsa Matrouh along the coast, before they could be smuggled through tunnels to the Gaza Strip.
Gaza has been under an Israeli-Egyptian blockade since the militant Hamas group took over in 2007 following an election win two years earlier. Egyptian security often turn a blind eye to the smuggling of goods to Gaza, which ranges from cars to diapers to food, but have come down harder on weapons smuggling.
Meanwhile, the U.S. State Department has provided funding to U.S. Customs and Border Protection to conduct training for officials from the Libyan Ministry of Defense and the Customs Authority with the aim of reducing the illicit transfers of weapons across borders.

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Saudi's top cleric warns against mixing of genders

 Saudi Arabia's top cleric on Friday warned against the mixing of the genders, saying it poses a threat to female chastity and society, as the kingdom prepares for the first time to grant women seats on the country's top advisory body.
Delivering his traditional Friday sermon, Grand Mufti Sheik Abdul-Aziz Al-Sheik said authorities must adhere to Shariah, or Islamic law, by ensuring men and women are separated as much as possible at all times. The cleric's comments come just weeks ahead of allowing women to be members of the 150-member Shura Council, the country's top advisory body.
Since 2006, women have been appointed as advisors to the council — an appointed, consultative body that has the authority to review laws and question ministers but cannot propose or veto legislation. There are currently 12 female advisors, but they do not have a right to vote in the assembly.
The move by King Abdullah to allow women a voice on the Shura Council is part of a larger reform effort by the monarchy to give women greater space in the public sphere. Last year, the kingdom began enforcing a law that allows women to work in female apparel and lingerie stores.
Religious leaders, including the grand mufti, have spoken out against such reforms.
The country is guided by an ultraconservative interpretation of Islam called Wahhabism. In the kingdom, women cannot travel, work, study abroad, marry, get divorced or gain admittance to a public hospital without permission from a male guardian — typically a husband, brother, father or uncle.
While Al-Sheik has spoken out in support of granting women the right to vote in 2015 alongside men in the nation's only open elections, he has criticized the decision to allow women to work in apparel stores, saying that it puts them in contact with men unrelated to them.
"It is necessary for women to be separated from men as much as possible, because this great religion protects the chastity of women against evil and corruption," Al-Sheik told worshippers at the Imam Turki mosque in Riyadh.
While his Friday sermon focused mainly on corruption in the kingdom, the grand mufti stressed that it is forbidden in Islam for a woman to stand before a man unveiled, warning that to do so will destroy the morals and values of society. The veil in Saudi Arabia refers to the full face covering worn by most women in the ultraconservative kingdom.
The Saudi government has not said how many women will be given seats on the Shura Council. Some local papers have suggested that women would be separated from the men in the assembly hall by a barrier, while others have suggested that women communicate via an internal video system.
However, those pushing for reform point to a recent council session where the country's top female official, deputy Education Minister Nura al-Fayez, sat in a full face veil and took part in the dialogue alongside the men.
"It sends a message to the conservatives that this is the example for women's participation in the Shura Council," Hatoon Al-Fassi, a columnist and professor of women's history in King Saud University said, adding that it also suggests this is what the king supports.
She said she is among many in Saudi Arabia who are rejecting a symbolic presence of women in the assembly.
"At the end we are not behind the scenes," Al-Fassi said. "We are asking for equality and for half of the council, or what is 75 seats."
Al-Fassi and other Saudi women have been pushing the government for social reforms and greater rights for women, including allowing women the right to drive and for the dissolution of male guardianship laws. Saudi women have staged protests defying the driving ban.
She said that there is pressure from the religious establishment to keep to a minimum the number of seats for women in the advisory body.
"I believe that the religious establishment will insist on forcing its opinion to resist the kingdom's progressive reforms, but as women we are insisting on building society hand in hand.

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Iraq's al-Sadr visits church, site of 2010 attack

BAGHDAD (AP) — Shiite cleric Muqtada al-Sadr reached out to Iraq's religious minorities Friday, visiting a Baghdad church desecrated in a deadly 2010 attack and a prominent Sunni mosque as public opposition spread against his rival, Prime Minister Nouri al-Maliki.
The anti-U.S. cleric's stops at the holy sites — a rare public appearance outside predominantly Shiite parts of Iraq — came as tens of thousands of primarily Sunni protesters angry over perceived second-class treatment rallied to maintain pressure against al-Maliki's Shiite-led government.
Friday's demonstrations reached well beyond the desert province of Anbar that has been the hub of two weeks of unrest, touching a string of Sunni-dominated communities in Iraq's north and west. Cries of "Down, down with al-Maliki" echoed in the streets of the northern city of Mosul, while protesters in the capital Baghdad accused the prime minister of being a liar.
The government has tried to appease the demonstrators by agreeing this week to release some detainees, bowing at least in part to one of their more emotionally charged demands. But that gesture has done little to stem their rage.
In a statement Friday, the prime minister urged government security forces to show restraint toward protesters. He also called on demonstrators to avoid acts of civil disobedience and warned them that "foreign agendas" seek to push Iraq toward sectarian conflict again.
Al-Sadr to be trying to capitalize on the political turmoil by attempting to portray himself as a unifying figure ahead of provincial elections in the spring. He spoke up for the Sunni protesters' right to demonstrate earlier this week, and echoed that sentiment again Friday.
"We support the demands of the people, but I urge them to safeguard Iraq's unity," he said.
Wearing his signature black cloak and turban, the cleric said he visited the Our Lady of Salvation church to express sorrow at the attack and send a message of peace to Iraq's dwindling Christian community, which is estimated to number about 400,000 to 600,000.
He sat quietly in the front pew, listening and nodding as Father Ayssar al-Yas described recent renovations to the church. The priest then led al-Sadr on a tour, pointing out places where attackers killed more than 50 people, including priests and worshippers, in an ambush during a 2010 Mass.
Al-Maliki himself attended a ceremony to officially reopen the church last month.
Al-Sadr's visit took place at a time of rising sectarian tensions a year after the U.S. withdrawal from Iraq. Al-Sadr grudgingly backed fellow Shiite al-Maliki following elections in 2010. But last year he joined Iraq's minority Sunni Arabs and Kurds in calling for al-Maliki to resign.
Al-Sadr rose to prominence as the leader of a militia movement that battled American forces following the 2003 U.S.-led invasion, and he has made overtures to Sunnis and others in the past. But fighters loyal to him were among the worst perpetrators of sectarian violence last decade, and he is still viewed with suspicion, if not hostility, by many Iraqis.
After visiting the church, al-Sadr's heavily protected convoy made its way to the Abdul-Qadir al-Gailani mosque, one of Baghdad's most prominent Sunni places of worship, shortly before midday Friday prayers.
As he entered the mosque, one worshipper called out that he is "the unifier of Sunnis and Shiites." Another hailed him as "the patriot, the patriot." Women in the courtyard ululated and showered him with candy on the way out.
Protesters, meanwhile, massed in several Sunni areas around the country.
The demonstrations appeared to be some of the largest in a wave of rallies over the past two weeks that erupted following the arrest of bodyguards assigned to Finance Minister Rafia al-Issawi, one of the central government's most senior Sunni officials.
The detention of female prisoners has been a focus of the demonstrations, though the protests tap into deeper Sunni feelings of perceived discrimination and unfair application of laws against their sect by al-Maliki's government.
Iraqi authorities this week ordered the release of 11 women facing criminal charges and pledged to transfer other women prisoners to jails in their home provinces.
But demonstrators Friday continued to press for more detainees to be released.
Several thousand people rallied amid tight security in the courtyard of Baghdad's Abu Hanifa mosque after midday prayers. They demanded the release of detainees, and held banners with slogans against the perceived politicization of the judiciary.
Their chants included: "Iran out!" — a reference to what many Iraqis see as their neighbor's influence over the government — and "Nouri al-Maliki is a liar."
Local TV broadcast what appeared to be tens of thousands of protesters massed along a highway near the western city of Ramadi, which has been the focus of demonstrations and sit-ins in recent weeks. Large crowds also converged on a stretch of the same highway near Fallujah.
About 3,000 people gathered in the northern city of Mosul, where they called for the release of female prisoners and to end to what they say are random arrests of Sunnis, while in the ethnically mixed city of Kirkuk, about 1,000 protested to demand the release of Sunni detainees.
Protests were also reported in other areas, including the Sunni stronghold of Tikrit, the hometown of former dictator Saddam Hussein.
The highest ranking member of Saddam's regime still at large, Izzat Ibrahim al-Douri, threw his support behind the protests in a video broadcast Friday evening by pan-Arab satellite channel Al-Arabiya.
Dressed in an olive, Saddam-era military uniform, the man purporting to be al-Douri told demonstrators they would have the support of "all the national and Islamic forces ... until (their) legitimate demands are achieved."
Al-Douri was the "king of clubs" in the deck of playing cards issued by the U.S. to help troops identify the most-wanted members of Saddam's regime.

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Fatah rally in Gaza looks toward unity with Hamas

GAZA CITY, Gaza Strip (AP) — Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they were routed from power in the territory by the Islamist militants in 2007.
The rally, approved by Gaza's Hamas rulers, marks a renewed attempt by the rival Palestinian factions to show unity following a fierce Hamas battle with Israel in November and Fatah's subsequent recognition bid at the United Nations.
But many obstacles still remain before the sides can settle their differences, chief among them how to deal with Israel. Several rounds of reconciliation talks over recent years centered on finding ways to share power have failed to yield results.
Still, both sides expressed optimism following Friday's unprecedented Fatah show of strength that included hours of waving their yellow flags, dancing in the streets and chanting party slogans. For years, Fatah loyalists in Gaza faced retribution from the Hamas regime, which banned them from gathering.
"We feel like birds freed from our cage today," said Fadwa Taleb, 46, who worked as a police officer for Fatah before the Hamas takeover and attended Friday's rally with her family. "We are happy and feel powerful again."
Top Fatah officials arrived in Gaza for the first time since they were violently ousted. Palestinian President Mahmoud Abbas, who rules the West Bank, did not attend the event, but he addressed the crowd on a large screen telling them "there is no substitute for national unity."
Hamas Prime Minister Ismail Haniyeh also expressed hope that the two factions could reconcile their differences, sending Fatah a message that he hoped they could work together as joint representatives of the Palestinian people, according to Fatah official Nabil Shaath. Hamas was not directly involved in the event.
Ihab al-Ghussian, the chief spokesman for the Hamas government in Gaza, said the sides would "work toward the consolidation of national unity." Egyptian officials say a first such meeting in months between the factions is scheduled for next week in Cairo.
After the rally, Haniyeh called Abbas to congratulate him and Abbas in turn thanked Haniyeh for letting it happen, said Haniyeh spokesman Taher al-Nunu. He added that both leaders expressed hope that the cooperation would lead to renewed reconciliation efforts.
The warmer tone is a result of recent gains by both factions.
Abbas has enjoyed a boost in his status since he led the Palestinians' successful bid to upgrade their status at the United Nations to a non-member observer state. On Friday, he signed a presidential decree officially changing the name of the Palestinian Authority to the "State of Palestine." All Palestinian stamps, signs and official letterhead will henceforth be changed to bear the new name, according to the official Palestinian news agency Wafa.
The move marked the first concrete, albeit symbolic, step the Palestinians have taken following the November decision by the United Nations. Abbas has hesitated to take more dramatic steps, like filing war crimes indictments against Israel at the International Criminal Court, a tactic that only a recognized state can carry out.
Hamas, meanwhile, has gained new support among Palestinians following eight days of fighting with Israel in November, during which Israel pounded the seaside strip from the air and sea, while Palestinians militants for the first time lobbed rockets toward Jerusalem and Tel Aviv.
Following the fighting, Fatah allowed Hamas to hold its first rally in the West Bank since the 2007 split. Hamas returned the favor Friday by allowing the Fatah rally to take place.
Still, the two sides have wide differences — over Israel and over the possibility of sharing power.
Fatah has held several rounds of peace talks with the Jewish state and says it is committed to a two-state solution. Hamas does not recognize Israel and is officially committed to its destruction. Hamas has carried out hundreds of deadly attacks against Israeli citizens and is regarded by the U.S. and Israel as a terrorist organization.
Hamas political chief Khaled Mashaal, considered more pragmatic than the movement's Gaza-based hardline leaders, forged a reconciliation agreement with Abbas in 2011. But the Gaza-based leadership has held up implementing it and has blamed Fatah of doing the same.
Fatah enjoys Western support and has been pressured not to forge a unity agreement with the militant Hamas, facing a potential cutback in foreign aid if it does.
Friday's rally also served as a reminder of the conflicts within Fatah itself that continue to dog the movement: Officials cancelled the event halfway through after 20 people were injured due to overcrowding, and shoving matches erupted between separate Fatah factions.
Yahiya Rabah, a top Fatah official in Gaza, said the rally was cancelled "due to the huge number of participants and logistical failures."
But witnesses said one pushing match was between supporters of Abbas and partisans of Fatah's former Gaza security commander Mohammed Dahlan, who was expelled from the party because of conflicts with Abbas.
Another Fatah official, who spoke anonymously because he did not want to embarrass the party, said the rally was cancelled because hundreds of Dahlan supporters jumped up on the stage and clashed with Abbas supporters.
Fatah spokesman Fayez Abu Etta attributed the injuries to overcrowding and the excitement of the rally. Later, more Palestinians were injured when part of a stage collapsed. Youths also clashed and stabbings were reported. Gaza health official Ashraf al-Kidra said overall 55 people were injured, including three critically.
There was one death during the rally: A 23-year-old Fatah activist was electrocuted while trying to hang a flag on an electric pole.
Overnight, throngs had camped out in a downtown Gaza square to ensure themselves a spot for the anniversary commemoration of Fatah's 1965 founding, and tens of thousands marched early Friday carrying Fatah banners. When the rally began, people stampeded to the stage to try to shake leaders' hands.

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