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In this paper, a coupled interaction matrix is proposed to describe the interactions between line outages and the load shed at buses. The coupled interaction matrix is effectively estimated by the Expectation Maximization algorithm. A highly probabilistic coupled interaction model is further proposed to efficiently generate cascades with both line outages and the load shed based on the coupled interaction matrix and the distribution of initial outages. To mitigate cascading failures, critical links are identified based on the coupled interaction matrix by calculating a comprehensive severity index that considers the consequences of both line outages and the load shed. Simulation results on the IEEE 300-bus system verify the effectiveness of the proposed approach. The cascades generated from the coupled interaction model match the statistics of the original cascades very well. The identified critical links based on the comprehensive severity index enable a proper tradeoff between reducing line outages and reducing the load shed, leading to a better mitigation effect than only considering either line outages or the load shed. [ABSTRACT FROM AUTHOR]