UPDATE 1-As Deutsche struggles, German lawmaker says no more help for ailing banks
* Conservative lawmaker - no repeat of state support (adds comment from ECB, detail, background)
* Battle for Aleppo stuck in a stalemate
* Rural rebel takeover of city makes locals resentful
* President Assad chooses air power over infantry
* City divided roughly along sectarian lines
* Civilians trapped as bombardment escalates
By Oliver Holmes
ALEPPO, Syria, Sept 6 The fighter jet banked sharply over the city and made a run at around 300 feet over the two-storey houses of Aleppo, a deep grinding sounding from its cannon as it unloaded onto home turf.
A fuel tanker exploded and pumped fire and smoke upwards. Local people - for despite the conflict, Syria's biggest city is still full of life - flurried to the side of the dirty roads. Visible above the breeze-block homes, a helicopter gunship hovered. A lone teenager ran out and, in a bizarre display of audacity, fired at it with a Kalashnikov assault rifle.
This sprawling city of 2.5 million mirrors what is happening across the country. Vastly outgunned, rebel fighters have dispersed into urban areas which are then pounded indiscriminately by artillery and warplanes until the guerrillas are flushed out. Meanwhile, the civilian death toll rises.
Observing the fighting in Aleppo over the past weeks, an impression emerges from the chaotic images of war that Syria is stuck for now in a stalemate, both on the battlefield, where neither army nor rebels seem capable of a decisive blow, and in the wider struggle for support; many Syrians, especially among large minority communities, show little love for either side.
Rebel brigades, many drawn from the Sunni Muslim peasantry of Aleppo's rural hinterland, say they have brought more than half the great merchant and manufacturing city under their control since their first big push in late July.
But since then, frontlines have broadly stabilised amid the daily ebb and flow of warfare that is lopsided but inconclusive.
The teenager who fired at the helicopter was met with a hail of fire from its gunner. It missed its target. More rebels appeared and a pickup truck with a mounted machinegun screeched into the road but failed to bring the helicopter down.
Children cowered behind thin walls, some daring a peek at a civil war which has killed 20,000 and promises to escalate.
The fighter jet returned for a second run, apparently an adapted Czech trainer aircraft, not one of Assad's fearsome Russian MiGs, showing the limitations of an army dependent on Assad's fellow minority Alawites as Sunnis desert.
The way the city has been divided, between Sunni districts largely in rebel hands and Christian, Alawite and ethnic Kurdish areas still mostly controlled by Assad's forces, reflects difficulties for the opposition in winning over those who fear majority rule could mean an intolerant Sunni Islamist state.
"'Liberated' is not a term I would ascribe to what happened when rebels entered Aleppo a month ago," said the owner of a small eatery in a rebel-held zone, who asked to be called only Muhammed as he feared reprisal from both government and rebels.
Nearby air strikes had strewn concrete rubble on the street outside Muhammad's restaurant, which he has only kept open to help feed those of Aleppo's people who cannot afford to leave.
"I can't bear it any longer. This is my last day. I will close tomorrow and stay home," the bulky man said, in hushed tones. In a dirty white coat, Muhammed ladled out spoonfuls of brown beans into plastic bags for a long line of customers.
The restaurant had three tables but the sound of an approaching helicopter made people eager to get back to their homes rather than sit and eat on the spot. Bags of charcoal sat in the corner - used to heat the beans as there is a gas shortage. A picture of his father hung on the wall.
"Do you have any bread?" an elderly man asked. "None," replied Muhammed, without looking up. "Any chickpeas?" asked another. "None."
"We felt better before the rebels came," he whispered.
Many of Aleppo's residents share Muhammed's views.
They say their president is a murderous criminal who ordered his army and 'shabbiha' militia to shoot live ammunition at peaceful protests for months and level neighbourhoods with artillery and tank fire. But they also resent the rebel fighters for bringing the fight to Aleppo, once Syria's commercial hub.
Life in rebel-controlled areas is unbearable.
Piles of uncollected rubbish are burnt every few days, replacing the stench of rotting detritus with that of acrid smoke. Food prices have soared and morning breadlines around bakeries stretch around entire blocks. Children play in the pools of burst water pipes and thousands have lost their homes in the mounting assaults on rebel-held neighbourhoods.
In Bustan al-Qasr, rebels living in an abandoned school have dragged desks and chairs into the streets to make checkpoints. The buildings behind them have gaping holes from mortar bombs and air strikes which residents say come without warning.
In the principal's office, fighters have scribbled "Free Army" on the desk. There are maps of the city on the wall. In one classroom, all the tables have been stacked to one side to make space for guns, ammunition and medicine. "The verb 'to do'" is still written on the white board from an old English lesson.
Assad's army is one of the biggest in the region. But, built with mostly Soviet weaponry, it is a blunt tool to fight a popular revolt. Schools and police stations are marked on many simple maps of the city giving away the location of rebel bases.
"We base ourselves here exactly because we don't want civilians to be targeted. We have not positioned ourselves inside residential apartment blocks to make sure civilians are not hurt," said rebel commander Abu Imad, who now sits at the principal's table.
But there are no absolute military targets and it is the civilians who bear the brunt. Last week a bomb landed just at the school entrance. A taxi lay overturned in the street and the sides of central Aleppo's five-storey apartment blocks crumbled.
There are clear divisions of outlook between Aleppo's merchants and the rural fighters who have taken control.
In the market neighbourhood of al-Shaar, rebel fighters from the small town of Anadan, a few miles to the northeast, sit under a bridge to avoid helicopters and stop and check cars.
The men sit on looted office chairs, scattering red pistachio husks around them. They say relations with the city folk are good. But those out shopping pointedly ignore them.
FRONT LINE STATIC
The rebels say that having lost swathes of the countryside, Assad is not advancing with infantry in Aleppo, resorting to attacks from the air for fear ordinary soldiers might desert.
"The regime knows it will be a fair fight on the ground," said Riyad Hamso, 28, whose foot was wrapped in a white bandage, a yellow mark on it from a seeping wound. He was shot, he says, by a government sniper in the frontline district of Salaheddine.
In some areas, the army will only fire when fired upon. On the outskirts, the army still controls a base within otherwise rebel-held territory. Paintings of Bashar and his late father Hafez adorn its walls and sentries look out idly. Rebels say they need more ammunition before they can overrun it.
The army appears to be employing the same tactic it has in other parts of the country. The central city of Homs was battered for weeks to the point of complete destruction. Only then did the army push in on foot as rebels ran out of bullets.
But rebels in Aleppo say they are fighting a war of attrition and time is on their side. The army claimed victory when rebels were flushed out of Homs and other areas around the country only to find guerrilla fighters sneaking back in.
And unlike Homs, where the army was able to encircle rebel-held districts, fighters have control of many roads leading to the city and are able to rotate and take home leave.
In Saif al-Dawla, a southern district of Aleppo where rebels and government forces battle from street to street, the frontline shifts daily but has not moved far in weeks.
"The army is trying to encircle us today," said a fighter, sitting on a mattress on the floor, with a cup of strong Arab coffee in hand. Yet over the next few days the same man never seemed to move from his spot, always sipping the same drink.
Sheikh Walid, the commander of an Islamist brigade fighting in Saif al-Dawla, did not seem too concerned about the stalemate. "We are able to keep the army from advancing and slowly we are taking ground in other areas and trying to find safe ways for more soldiers to defect," he said.
In between the cracks of incoming tank shells, the rebels call out to their foes who are positioned only metres away. "We are your brothers. Defect and we'll embrace you," they shout down the alleyway. "We are with Assad," the soldiers call back.
Ayham Kamel, a Middle East analyst at Eurasia group, said Assad's army, too, is hoping the impasse can work in its favour, giving it time to disrupt supply lines: "The regime's strategy is to confront them with time, rather than go in with infantry," he said. "We could be in a stalemate for a long time in Aleppo."
A DIVIDED CITY
Though foreign journalists cannot safely cross into government-held parts of the city, notably Christian and Kurdish districts in the west, residents who are able to come and go with relative ease speak of troops organising local militias.
"There is a Christian militia group that set up checkpoints and walk around the streets searching houses for dissidents," said one woman visiting rebel territory from the Christian quarter. Many Christians, like the Alawites, have seen Assad as a bulwark against a Sunni Islamist takeover.
Several civilians who have moved around the city spoke of an eerie sense of normality in Aleppo's government-held districts.
"People see the fighter jets bomb nearby but they try to live as normal," said the woman, who asked not to be named for fear of reprisals. "All the shops are open and the streets are full of people." Even Aleppo's airport remains open and the occasional passenger jet can be seen taking off.
Civilians in rebel-held districts also try to get on with life amid the continuous attacks.
"Assad will kill civilians and nobody cares," said Abu Bakr, a shopkeeper who lives in Aleppo's Old City, a once picturesque neighbourhood of covered markets and fragrant souks.
Abu Bakr's own son was killed in an air strike two weeks ago while lining up for bread. "Look at where the bomb craters are: by mosques and breadlines," he said. "Assad wants us all dead."
In hospitals on the rebel side, doctors have forbidden journalists from taking pictures. "If the regime knows we are working here, they'll bomb us," said a doctor in blue scrubs, ushering journalists out of his emergency room. A rebel fighter lay dead inside; shot through the mouth by a government sniper.
Hospitals are full of wounded civilians and in frontline areas the bodies of residents who strayed down the wrong street and were shot by snipers lie rotting in the streets.
Abdelrahman, a lanky university student with a short beard from Bustan al-Qasr says his family is too poor to flee: "We have enough money to get to Turkey but we do not have the means to stay there for long," the 20-year-old said. "The camps in Turkey have no services. People prefer to live and die here."
The helicopters which hover high above to avoid rebel gunfire drop bombs the size of dustbins. They fall from such a height that residents below have several seconds to see the mass of explosives and metal descend from above.
"When you find yourself here, you start to feel different," said Abdelrahman. "Two days ago I had to go help pick up body parts after a missile hit. You start to lose the will to live.
"And death? After a while, you start to wish for it."
* Conservative lawmaker - no repeat of state support (adds comment from ECB, detail, background)
Sept 29 ConAgra Foods Inc, the maker of Chef Boyardee pasta and Hunt's ketchup, reported lower-than-expected quarterly sales, hurt by lower demand for its grocery, snacks and frozen food items.
* GlaxoSmithKline plc appoints Brian McNamara as CEO of GSK consumer healthcare