By Nate Raymond and David Brunnstrom NEW YORK/WASHINGTON (Reuters) - An Indian diplomat whose arrest and strip-search caused a major rift in U.S.-Indian ties was effectively expelled from the United States on Thursday as part of a deal in which she was granted diplomatic immunity from charges of visa fraud and lying about underpaying her nanny. Devyani Khobragade, who was deputy consul-general in New York, was arrested on December 12 and indicted on Thursday by a grand jury for visa fraud and making false statements about how much she paid her housekeeper. Her arrest set off protests in India amid disclosures that she was handcuffed and strip-searched. The dispute soured the broader U.S.-India bilateral relationship, leading to sanctions against American diplomats in New Delhi and the postponement of visits to India by senior U.S. officials and another by a U.S. business delegation.

Iran's Supreme Leader Ayatollah Ali Khamenei said on Thursday that nuclear negotiations with world powers had revealed U.S. enmity towards the Islamic state. Khamenei was speaking hours before the resumption of talks between Iran and the European Union in Geneva. "We had announced previously that on certain issues, if we feel it is expedient, we would negotiate with the Satan (the United States) to deter its evil," Khamenei told a gathering, reported by the official IRNA news agency. "The nuclear talks showed the enmity of America against Iran, Iranians, Islam and Muslims." Talks between Iran and the EU started in Geneva on Thursday to discuss the practical details of implementing a nuclear agreement reached in Geneva in November, an EU spokeswoman in Brussels said.

China will look into establishing a nation-wide trading system for pollution permits as part of efforts to use market mechanisms to help clean up its environment, the country's top environment official said. In remarks published on the website of the Ministry of Environmental Protection (www.mep.gov.cn) on Friday, minister Zhou Shengxian said China was working on new regulations for pollution permits and would also publish proposals for new pilot trading projects as soon as possible. China has vowed to reverse the environmental consequences of three decades of breakneck industrial expansion and clean up its heavily polluted air, water and soil and is hoping to use the market to encourage firms to cut emissions. Provinces pledged this week to meet targets set by the ministry to cut air pollution by 5 to 25 percent.

U.S. efforts to persuade Afghan President Hamid Karzai to sign a long-term security agreement according to Washington's timetable will likely fail, the lead American negotiator has warned the Obama administration, the Washington Post reported on Thursday. In a classified cable that the Post said was transmitted in recent days, U.S. Ambassador James Cunningham wrote that he did not think Karzai would agree to sign the agreement before Afghanistan's presidential election in April, the newspaper said, citing U.S. officials who spoke on condition of anonymity. The United States wants the Afghanistan government to sign the agreement in matter of weeks if a contingent of U.S. troops is to remain there after 2014, the White House said on Monday. Without a deal, the United States could pull out all troops, the "zero option," leaving Afghan forces to battle the Taliban on their own.

Syrian forces loyal to President Bashar al-Assad killed dozens of rebel fighters who tried to break an army siege of the central city of Homs, state media and a monitoring group said. SANA news agency quoted a military source as saying army units "confronted armed terrorist groups" trying to get into the Khaldiya neighborhood north of the besieged rebel area in the Old City in the heart of Homs this week. Thirty-seven rebels were killed by the army, SANA said, without giving a figure for losses among Assad's forces. The Syrian Observatory for Human Rights said at least 45 rebels were surrounded and killed as they left the old city on Wednesday night and Thursday morning.

French President Francois Hollande has complained of breach of privacy and is considering legal action after French magazine Closer alleged he was having an affair with an actress, a source in his office said on Friday. "Francois Hollande greatly deplores the invasion of his privacy, to which he has a right as any other citizen does. He is studying what action, including legal action, to take following this publication," the source said.

India's corruption fighter and newly elected chief minister Arvind Kejriwal said the graft hotline aimed at stopping rampant corruption among bureaucrats received 3,904 calls in the first seven hours of operation on Thursday. Kejriwal has told citizens to record conversations with corrupt bureaucrats and use the recordings as "proof" to complain to the anti-corruption squad.

The Foreign Affairs Select Committee urged William Hague and his staff to take a "more realistic approach" in the light of cuts announced in the 2010 spending review. MPs highlighted the 2012 Olympic and Paralympic Games, global political turbulence and an expansion of the network of diplomatic outposts as sources of extra strain on the department.

MUMBAI, India (AP) ? India's overcrowded financial capital unveils its long-awaited $2 billion new airport terminal Friday, an ambitious, art-filled space that developers hope will be a showcase success in a country struggling to modernize inadequate infrastructure that is holding back economic growth.