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Associated Press
President Barack Obama signs $858 billion tax deal into law in a ceremony in the Eisenhower Executive Office Building on the White House complex, Friday, Dec. 17, 2010 in Washington. (AP Photo/Pablo Martinez Monsivais)
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President Barack Obama signed into law a huge, holiday-season tax bill extending cuts for all Americans on Friday, saluting a new spirit of political compromise as Republicans applauded and liberals seethed. The benefits range from tax cuts for millionaires and the middle class to longer-term help for the jobless. The most significant tax legislation in nearly a decade will avert big increases that would have hit millions of people starting in two weeks on New Year's Day. Declared Obama: "We are here with some good news for the American people this holiday season."

WASHINGTON (AP) — Rushing to finish by Christmas, congressional Democrats worked Friday to secure Senate ratification of a new arms control treaty and to end the military's ban on openly gay service members as they neared the end of two tumultuous years of single-party government. Legislation to keep the federal government running until mid- to late February was also on the agenda, a matter for negotiations with emboldened Republicans who will take control of the House and add to their numbers in the Senate come January.

ISLAMABAD (AP) — The CIA yanked its top spy out of Pakistan after his cover was blown and his life threatened, and 54 suspected militants were killed in a U.S. drone missile attack Friday in stark new signs of the troubled relationship between mistrustful allies locked in a war on terror groups. The CIA's decision to remove its Islamabad station chief comes at a pivotal moment. The Obama administration is pressing Pakistan to rid its lawless northwest frontier of militants, even as public outcry in the country has intensified against the U.S. spy agency's unacknowledged drone war.

BUNGAY, England (AP) — The founder of WikiLeaks said Friday he fears the United States is preparing to indict him, but insisted that the government secret-spilling site would continue its work despite what he calls a dirty tricks campaign against him. Julian Assange spoke from snowbound Ellingham Hall, a supporter's 10-bedroom country mansion where he is confined on bail as he fights Sweden's attempt to extradite him on allegations of rape and molestation.

SEOUL, South Korea (AP) — North Korea warned South Korea on Friday not to stage artillery drills on a front-line island the North bombed last month, saying it would hit back even harder than in the previous attack that killed four South Koreans. The North warned the South against similar drills before the Nov. 23 shelling that destroyed homes and renewed fears of war on the divided peninsula.

MOSCOW (AP) — A Russian cardiologist said he feared dismissal and beating after phoning Vladimir Putin to say that an impressive hospital display for the premier was faked. And then, Putin called him back. Ivan Khrenov told Putin during a live call-in show Thursday that his bosses instructed doctors and nurses to show fake pay slips and pose as recovering patients surrounded by new equipment during the premier's November visit to a hospital in the central town of Ivanovo.

CARACAS, Venezuela (AP) — Venezuelan lawmakers granted President Hugo Chavez broad powers Friday to enact laws by decree, undermining the clout of a new congress that takes office next month with a bigger opposition bloc. Chavez opponents condemned the move as a power grab, saying the law gives him a blank check to rule without consulting lawmakers. The National Assembly approved the special powers for 18 months.

NEW YORK (AP) — Many of Bernard Madoff's victims who thought they lost everything could get at least half their money back after the widow of a Florida philanthropist agreed Friday to return a staggering $7.2 billion that her husband reaped from the giant Ponzi scheme. Federal prosecutors reached the settlement with the estate of Jeffry Picower, a businessman who drowned after suffering a heart attack in the swimming pool of his Palm Beach, Fla., mansion in October 2009. Picower was the single biggest beneficiary of Madoff's fraud.

NORMAN, Okla. (AP) — The three bone fragments turned up on a deserted South Pacific island that lay along the course Amelia Earhart was following when she vanished. Nearby were several tantalizing artifacts: some old makeup, some glass bottles and shells that had been cut open. Now scientists at the University of Oklahoma hope to extract DNA from the tiny bone chips in tests that could prove Earhart died as a castaway after failing in her 1937 quest to become the first woman to fly around the world.

SANTA BARBARA, Calif. (AP) — It's another missed court date, another arrest warrant for Randy Quaid's wife, Evi. The 47-year-old failed to appear for a probation hearing Thursday in Santa Barbara and faces a new $100,000 arrest warrant, Deputy District Attorney Anthony Davis said.

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