Reuters South Asia News highlights 1200 GMT November 25

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ISLAMABAD - Pakistani security agencies have detained a former army officer for possible links with two men arrested in Chicago on terrorism charges, an army spokesman said on Wednesday.

David Headley and Tahawwur Hussain Rana were arrested last month and accused of planning an attack on Danish newspaper Jyllands-Posten, which ran cartoons of the Prophet Mohammad in 2005, sparking protests by Muslims in several countries.

Rana is a Pakistan-born Canadian citizen while Headley is an American citizen who had spent time in Pakistan, which is under U.S. pressure to crack down harder on militants along the border with Afghanistan to help it put down a Taliban insurgency there. [ID:nISL487968]

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QUETTA, Pakistan - Separatist rebels in Pakistan's gas-rich Baluchistan province dismissed on Wednesday proposed reforms for ending their decades-old insurgency as insignificant and a trick.

The government's proposals, unveiled in parliament on Tuesday, are aimed at ending grievances in the southwestern province as security forces grapple with a growing Taliban insurgency on the Afghan border in the northwest.

The proposals include the cessation of military operations against the rebels, the release of detained activists -- except those involved in "terrorism" -- and payment to the province of $1.4 billion over 12 years in gas royalties.

"Our struggle isn't for such peanuts," Sher Mohammad Bugti, a spokesman for the rebel Baluch Republican Party, said by telephone from an undisclosed location. [ID:nSP537714]