LONDON, June 3 (Reuters) – Britain’s coalition government has regrouped after voters punished the Liberal Democrat junior partners in May’s local elections, but health reform and worries over the economy will keep pressure on the relationship.

The Conservative-led government is seeking to overhaul Britain’s state-run health service but has faced widespread criticism from those, including many Lib Dems, who fear creeping privatisation of what is regarded as a national treasure.

The issue is the latest in a line of policies that have driven a wedge between the two parties, with the Lib Dems bearing the brunt of blame from voters for seemingly failing to stand up to the much larger Conservative party.

The Lib Dems suffered in local council elections last month as voters reacted angrily to deep cuts in public spending. The Conservatives actually gained seats in England and Wales. [ID:nLDE74415Y]

Concerns over the strength of Britain’s economic recovery – and whether it can withstand austerity measures aimed at slashing a record budget deficit — have flared in recent weeks.

In Scotland, the pro-independence Scottish National Party (SNP) won a majority in the devolved parliament and plans a referendum in the coming five years on breaking with the rest of Britain. [ID:nLDE74517C]

And Britain’s involvement in Libya’s civil war risks turning into an unpopular, long-haul foray — despite a pledge by the year-old government to be less interventionist than the previous Labour administration.

LONDON (Reuters) – Britain and the United States agree on the need to give top priority in the coming months to engaging Taliban insurgents in a peace process in Afghanistan, Prime Minister David Cameron said on Wednesday.

“Now is the moment to step up our efforts to reach a political settlement,” Cameron said at a news conference with U.S. President Barack Obama.

“The Taliban must make a decisive split from al Qaeda, give up violence, and join a political process that will bring lasting peace to that country. We are agreed to give this the highest priority in the months ahead.”

Cameron also said the West should redouble its efforts to work with Pakistan in seeking to stamp out terrorism.

Questions have been raised about Pakistan’s commitment to tackling militants after the United States located and killed al Qaeda leader Osama Bin Laden in the garrison town of Abbottabad.

“People are asking questions about our relationship, so we need to be clear: Pakistan has suffered more from terrorism than any other country in the world. Their enemy is our enemy,” Cameron said. “Far from walking away, we’ve got to work even more closely with them.”

The United States, which will shortly begin bringing some of its 100,000 soldiers home, has said it wants to hand over security to Afghan control by the end of 2014.

LONDON/TRIPOLI (Reuters) – U.S. President Barack Obama warned Libyan leader Muammar Gaddafi on Wednesday there would be ‘no let up’ in pressure on him to go, following a second successive night of heavy NATO bombing in Tripoli.

Six loud explosions rocked Tripoli late on Tuesday within 10 minutes, following powerful strikes 24 hours earlier, including one on Gaddafi’s compound that Libyan officials said killed 19 people.

Obama told a London news conference with British Prime Minister David Cameron he could not predict when Gaddafi, who is fighting a three-month-old insurgency, might be forced to go.

“I absolutely agree that given the progress that has been made over the last several weeks that Gaddafi and his regime need to understand that there will not be a let-up in the pressure that we are applying.”

“We have built enough momentum that as long as we sustain the course that we are on that he is ultimately going to step down,” he said. “Ultimately this is going to be a slow, steady process in which we are able to wear down the regime.”

Fighting between Gaddafi’s forces and rebels has reached a stalemate, despite two months of NATO aerial support under a U.N. mandate intended to protect civilians. Gaddafi denies his troops target civilians and says rebels are criminals, religious extremists and members of al Qaeda.

Strikes drove back Gaddafi forces shortly after he pledged “no pity, no mercy” to rebels in their stronghold of Benghazi. Rebels have since proved unable to achieve any breakthrough against better-trained and equipped government troops.

LONDON (Reuters) – President Barack Obama said on Wednesday he believed a two-state solution for Israel and Palestine was achievable but urged the Palestinians to talk to Israel over statehood rather than seeking U.N. recognition.

“My goal, as I set out in a speech I gave last week, is a Jewish state of Israel that is safe and secure and recognized by its neighbors and a sovereign state of Palestine in which the Palestinian people are able to determine their own fate and their own future,” Obama told a news conference in London.

“I am confident that can be achieved.”

During the joint news conference with British Prime Minister David Cameron, Obama added: “For the Palestinians to take the United Nations route rather than the path of sitting down and talking with the Israelis is a mistake.”

Palestinians will seek recognition as a U.N. member-state at the world body’s general assembly in September, a senior Palestinian official said on Saturday.

Obama said Islamist group Hamas, which has controlled the Gaza Strip since 2007, had to recognize Israel’s right to exist and abandon its strategy of violence for the peace process to succeed.

“It is very difficult for Israelis to sit across the table and negotiate with a party that is denying their right to exist and has not renounced the right to send missiles and rockets into your territory,” he said.

LONDON/TRIPOLI (Reuters) – President Barack Obama warned Libyan leader Muammar Gaddafi on Wednesday there would be ‘no let up’ in pressure on him to go, following a second successive night of heavy NATO bombing in Tripoli.

Six loud explosions rocked Tripoli late on Tuesday within 10 minutes, following powerful strikes 24 hours earlier, including one on Gaddafi’s compound that Libyan officials said killed 19 people and state television blamed on “colonialist crusaders.”

Obama told a London news conference with British Prime Minister David Cameron he could not predict when Gaddafi, holding onto power in the face of a three-month-old insurgency, might be forced to go. But he added:

“I absolutely agree that given the progress that has been made over the last several weeks that Gaddafi and his regime need to understand that there will not be a let-up in the pressure that we are applying.

“I believe that we have built enough momentum that as long as we sustain the course that we are on that he is ultimately going to step down,” he added.

Fighting between Gaddafi’s forces and rebels has reached stalemate, despite two months of NATO aerial support under a U.N. mandate intended to protect civilians.

Strikes drove back Gaddafi forces shortly after he pledged “no pity, no mercy” to rebels holed up in their stronghold of Benghazi. But rebels have since proved unable to break the resistance of better-trained and equipped government troops.

LONDON (Reuters) – U.S. President Barack Obama said Wednesday he believed a two-state solution for Israel and Palestine was achievable but urged the Palestinians to talk to Israel over statehood rather than seeking U.N. recognition.

“My goal, as I set out in a speech I gave last week, is a Jewish state of Israel that is safe and secure and recognized by its neighbours and a sovereign state of Palestine in which the Palestinian people are able to determine their own fate and their own future,” Obama told a news conference in London.

“I am confident that can be achieved.”

During the joint news conference with British Prime Minister David Cameron, Obama added: “For the Palestinians to take the United Nations route rather than the path of sitting down and talking with the Israelis is a mistake.”

Palestinians will seek recognition as a U.N. member-state at the world body’s general assembly in September, a senior Palestinian official said Saturday.

Obama said Islamist group Hamas, which has controlled the Gaza Strip since 2007, had to recognise Israel’s right to exist and abandon its strategy of violence for the peace process to succeed.

“It is very difficult for Israelis to sit across the table and negotiate with a party that is denying their right to exist and has not renounced the right to send missiles and rockets into your territory,” he said.

LONDON (Reuters) – Britain’s road to economic recovery will be rocky but the coalition government is as committed as ever to slashing a record budget deficit, finance minister George Osborne said Wednesday.

Osborne, speaking to business leaders in London, said the government was on track to all but eliminate a deficit running close to 10 percent of national output over four years and did not see the need to further hike taxes or cut spending.

The Bank of England said Wednesday its near-term outlook for growth had worsened since February. Official data published last month showed the economy effectively stood still in the six months spanning the turn of the year. “The recovery will be choppy,” Osborne told an audience of business leaders in London. “High commodity prices, the earthquakes in Japan and uncertainty in the euro zone are all weighing down on growth across the world.”

Critics, including the opposition Labor party, have warned that the coalition government’s harsh austerity measures risk derailing Britain’s fragile recovery, especially given the likelihood that interest rates will rise later this year.

Poor local election results for the Liberal Democrat junior coalition partners and the party’s defeat in a referendum on changing the electoral system have also raised concerns that strains within the coalition could hamper the deficit plan.

Osborne underlined the Conservative-Lib Dem government’s determination to push on with its program of spending cuts and tax hikes.

“We in this government, Conservatives and Liberal Democrats, are as united today in our mission to reduce Britain’s deficit as we have ever been,” he said.

LONDON (Reuters) – The road to economic recovery will be rocky but the coalition government is as committed as ever to slashing a record budget deficit, Chancellor George Osborne said on Wednesday.

Osborne, speaking to business leaders in London, said the government was on track to all but eliminate a deficit running close to 10 percent of national output over four years and did not see the need to further hike taxes or cut spending.

The Bank of England said on Wednesday its near-term outlook for growth had worsened since February. Official data published last month showed the economy effectively stood still in the six months spanning the turn of the year.

“The recovery will be choppy,” Osborne told an audience of business leaders in London. “High commodity prices, the earthquakes in Japan and uncertainty in the euro zone are all weighing down on growth across the world.”

Critics, including the Labour party, have warned that the coalition government’s harsh austerity measures risk derailing Britain’s fragile recovery, especially given the likelihood that interest rates will rise later this year.

Poor local election results for the Liberal Democrat partners and the party’s defeat in a referendum on changing the electoral system have also raised concerns that strains within the coalition could hamper the deficit plan.

Osborne underlined the Conservative-Lib Dem government’s determination to push on with its programme of spending cuts and tax hikes.

LONDON (Reuters) – The coalition parties will need to rebuild their relationship after theLiberal Democrats took a drubbing in local elections and failed to convince voters to approve electoral reform.

The Lib Dems and their leader Nick Clegg bore the brunt of anger over deep cuts in public spending last week while the Conservatives actually gained seats in England and Wales.

News that the economy effectively flatlined in the last six months has renewed concerns over the wisdom of the coalition’s austerity drive to wipe out a record budget deficit.

In Scotland, the Scottish National Party (SNP) won a majority in the devolved parliament and plans a referendum in the coming five years on breaking with the rest of Britain.

And Britain’s involvement in Libya’s civil war risks turning into an unpopular, long-haul foray — despite a pledge by the year-old government to be less interventionist than the previous Labour administration.

COALITION TENSIONS

Leaders of both parties have stressed that they signed up to a five-year programme to tackle the budget deficit and won’t let the coalition collapse, reflecting the sense that they have little choice but to stick it out until the economy improves.

LONDON, May 9 (Reuters) – Britain’s coalition parties will need to rebuild their relationship after the junior partner, the Liberal Democrats, took a drubbing in local elections and failed to convince voters to approve electoral reform.

The Lib Dems and their leader Nick Clegg bore the brunt of anger over deep cuts in public spending last week while their partner the Conservatives actually gained seats in England and Wales. [ID:nLDE74415Y]

News that the economy effectively flatlined in the last six months has renewed concerns over the wisdom of the coalition’s austerity drive to wipe out a record budget deficit.

In Scotland, the pro-independence Scottish National Party (SNP) won a majority in the devolved parliament and plans a referendum in the coming five years on breaking with the rest of Britain. [ID:nLDE74517C]

And Britain’s involvement in Libya’s civil war risks turning into an unpopular, long-haul foray — despite a pledge by the year-old government to be less interventionist than the previous Labour administration.

COALITION TENSIONS

Leaders of both government parties have stressed that they signed up to a five-year programme to tackle the budget deficit and won’t let the coalition collapse, reflecting the sense that they have little choice but to stick it out until the economy improves.