An Iraqi official said on Friday Baghdad will recommend that Arab states use oil as a weapon to exert pressure on Israel and countries that back it, particularly the United States, over the Gaza crisis.

"Playing the economic card is our most powerful weapon at the moment in supporting the Palestinian people, for no military power can currently stand up to Israel," Iraq's permanent Arab League representative Qais al-Azzawi said.

He told reporters in the Egyptian capital, where the League has its headquarters, that Baghdad would take this stand at Saturday's emergency meeting of foreign ministers from the pan-Arab body called by Egypt to discuss Gaza.

"What happened in 1973, when the Arabs stopped oil exports to Western states, is proof that this weapon can succeed in the battle between the Arabs and Israel," Azzawi said of a decision taken during the October Yom Kippur war.

Oil prices mixed amid Gaza violence, US data
London (AFP) Nov 15, 2012 –

Oil prices diverged on Thursday as traders reacted to Middle East supply concerns as Israeli warplanes pounded Gaza and also digested a batch of US economic data.

Brent North Sea crude for delivery in December jumped $1.14 to $110.75 a barrel in late London deals.

New York's main contract, light sweet crude for December, fell 43 cents to $85.89 a barrel.

"Israel's military strikes against Hamas in Gaza have shifted attention back to the supply risks, causing oil prices to rise," said Commerzbank analyst Eugen Weinberg.

Seven Palestinians and three Israelis were killed in a wave of unrelenting cross-border fighting on Thursday as the Jewish state pressed a vast air offensive on Gaza.

Operation Pillar of Defence, Israel's biggest military campaign against Gaza in nearly four years, began on Wednesday with the targeted killing of top Hamas commander Ahmed Jaabari.

The violence, which erupted as Israel heads towards a January general election, sparked expressions of deep concern from the international community and prompted an emergency meeting of the UN Security Council in New York.

Traders also reacted to data from the United States, which is the world's biggest oil consuming nation.

US weekly jobless claims jumped by 78,000 in one week in the wake of Superstorm Sandy, which both interrupted reporting and forced people out of work in the northeast, Labor Department data showed Thursday.

US consumer prices meanwhile rose for a third straight month in October but at a slower pace than recent months as energy prices eased, separate figures showed.

Elsewhere, the Department of Energy said that US crude inventories had risen by 1.1 million barrels last week.

In China, which is the world's biggest consumer of energy, the country's all-powerful Communist Party on Thursday unveiled a new seven-man leadership council steered by Xi Jinping to take command for the next decade.

After striding out in Beijing's Great Hall of the People as the party's new general-secretary, succeeding President Hu Jintao, Xi vowed to fight official corruption and build a "better life" for the nation's 1.3 billion people.