Palestinian ceasefire plan agreed

The Palestinian government says it has agreed on the terms of a ceasefire proposal it wants to put to Israel to end more than three weeks of violence.

It said all factions in the Hamas-led Cabinet supported the truce - which would have to cover all Palestinian territories, not just the Gaza Strip.

The plan calls for militants in Gaza and the Israeli military to end the cross-border attacks simultaneously.

Israel has previously rejected plans for a West Bank truce.

The Israeli military frequently carries out raids against suspected militants there.

Extensive Palestinian rocket fire from Gaza has killed two Israelis in the last month and retaliatory Israeli military operations have killed about 50 Palestinians, many of them Hamas fighters.

Israeli promise

Palestinian Authority President Mahmoud Abbas has been urging Palestinian factions to agree a Gaza-based truce with Israel first, to end the current round of violence.

The BBC's Aleem Maqbool in Ramallah says Hamas broke a similar ceasefire earlier this year, saying Palestinians were still being killed in the West Bank.

Other militant groups did not observe the truce at all, citing similar reasons.

Mr Abbas is expected to meet Israeli Prime Minister Ehud Olmert later this week but if he comes away with less than an Israeli promise of a truce across all Palestinian territories, the rocket fire from Gaza is likely to carry on, our correspondent says.

Lebanon's Army Makes Big Push Against Camp

(CBS/AP) Under the cover of artillery barrages, dozens of Lebanese army tanks and armored carriers on Friday pushed forward against Islamic militants barricaded in a Palestinian refugee camp in northern Lebanon.

The concentrated bombardment began in the morning, with heavy barrages targeting all parts of the Nahr el-Bared camp, where Fatah Islam militants have been holed up in a 13-day siege by the Lebanese army, barricading themselves in the camp's residential neighborhoods of narrow, winding streets and apartment buildings.

Many of the camp's roughly 40,000 Palestinian refugees have fled but thousands are still thought to be caught in the cross-fire, reports CBS News correspondent Mark Phillips.

By late afternoon, an army communiqu�Ecalled on the militants to surrender and urged Palestinians not to provide them a safe haven.

The Lebanese minister of state for parliamentary affairs, Michel Faraoun, told the BBC that the military had been given a "green light" to deal with the militants.

The army statement said the army had destroyed positions from which militants attacked troops and civilians, and "tightened the ring" around them, causing many casualties. It also said that other militants had fled to residential neighborhoods and had taken civilians as "human shields."

"The army is attempting to prevent the gunmen from using high points for sniper fire. We are now controlling high points just outside the camp," a military spokesman, who did not wish to be identified, told Agence France-Presse.

Two Lebanese soldiers were killed and 10 wounded in the fighting Friday, according to security officials who spoke on condition of anonymity because they were not authorized to speak to the media. The officials said that a "unit" of Fatah Islam militants was "wiped out" but gave no casualty count.

The artillery bombardment sent clouds of white smoke rising from the camp through the day, and the shelling ignited fires inside it, spewing black smoke. However, reports on the ground indicated the army did not penetrate deep into the camp, but limited its advance to outer neighborhoods which militants used for sniper fire against army positions. Nahr el-Bared, like the other 11 Palestinian camps in Lebanon, has been off-limits to Lebanese authorities under a nearly 40-year-old agreement that allows Palestinians to run their own affairs.

Palestinian representative to Lebanon, Abbas Zaki, told al-Jazeera television that the military action was limited, engaging militants on the camp's outer areas. He said there would be no storming of the camp's interior, where thousands of civilians remain.

Military officials would not give specifics about troop movements and journalists were ordered further back from the camp.

Friday's deaths raised to 34 the number of soldiers killed since fighting between the army and Fatah Islam militants began on May 20. At least 20 civilians and about 60 militants also have been killed before Friday's fighting.

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US 'disturbed' by Iran detentions

The US has issued a strongly worded criticism of Iran over the detention of several American citizens.

The State Department said it believed businessman and peace activist Ali Shakeri was arrested about 10 days ago.

Three other Iranian Americans are known to have been detained and charged with spying, which could carry the death sentence under Iranian law.

A spokesman called the arrests a "disturbing pattern" of harassment of people with dual citizenship.

Tom Casey said the US believed that Mr Shakeri was being held in Tehran's Evin prison. But it could not confirm whether he too had been charged.

California-based Mr Shakeri is a founding board member at the University of California, Irvine's Center for Citizen Peacebuilding.

All four Iranian-Americans have been barred from leaving Iran.

Tense relations

The three others are academic Haleh Esfandiari, social scientist Kian Tajbakhsh and journalist Parnaz Azima.

They have been charged with espionage and endangering Iranian national security, the country's judiciary spokesman Ali Reza Jamshidi said on Tuesday.

Tehran has accused Washington of using intellectuals and others to try to bring about what it calls a velvet revolution aimed at undermining the Islamic authorities.

The US denies the accusation.

It insists the three who have already been charged are private citizens who went to Iran to see family or for professional reasons.

On its part, Iran is demanding the release of five Iranians arrested in Iraq by US forces earlier this year.

Despite their recent talks over Iraq, the two countries' already tense relations appear to be getting worse.

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Fighting Resumes In Lebanon Refugee Camp

(AP) Heavy clashes erupted Tuesday between Lebanese troops and Fatah Islam militants in a Palestinian refugee camp in northern Lebanon �Ethe sharpest escalation after a weeklong truce.

Sporadic gunfire exchanges have continued daily since the truce halted three days of heavy fighting. But the renewed fighting before sundown, with the Lebanese army using artillery to silence the militants' source of fire, was the worst outbreak in violence in a week.

Lebanese army artillery pounded positions on the northern edge of the camp and near the Mediterranean coastline, apparently seeking to prevent any attempt by some militants to flee by sea.

The renewed fighting came hours after a soldier was killed. The soldier was hit in the head by sniper fire Monday afternoon and later died in a hospital, said security officials, speaking on condition of anonymity because they were not authorized to speak to the media.

In Beirut, a man suspected of belonging to Fatah Islam was arrested after police raided the apartment where he was staying in a posh furnished building in Ashrafieh, a Christian neighborhood in the heart of the Lebanese capital.

Police officials said the man had rented the place using a forged Lebanese name and passport and had in his possession several other forged passports from Gulf and other foreign countries. They said police also confiscated from the apartment several CDs and other material that appeared to be related to the group's work.

Also Tuesday, a woman died from gunshot wounds when a car she was riding in ignored orders to stop at a police checkpoint in Beirut, officials said. The woman, identified as the wife of the car driver, was shot in the abdomen and died later in the hospital.

The driver, wanted on several warrants, sped off but police gave chase, firing warning shots. He was arrested after abandoning the car and fleeing into a building.

On Monday, troops killed two people and injured a passer-by after a car sped past their checkpoint outside the Beirut international airport. The passer-by died in hospital Tuesday, officials said.

The tensions in Beirut in central Lebanon came as clashes continued in the north. Interior Minister Hassan Sabei, urged the public in a statement to cooperate with security forces "in this critical period."

The soldier's death brings to 31 the number of government troops killed in the fighting since May 20. Most military casualties occurred on the first day, when the army were ambushed on roads or attacked at their posts by the previously little known al Qaeda inspired group.

Twenty civilians and as many as 60 militants have also been reported killed in the fighting at the Nahr el-Bared Palestinian refugee camp on the outskirts of the northern port city of Tripoli.

A weeklong truce at the camp has generally held, but sporadic exchanges of machine gun, rocket and mortar fire continue, including on Tuesday morning.

Hundreds of Lebanese troops have encircled the camp, with the government threatening to storm the area if the militants do not surrender. Fatah Islam has vowed to fight to death.

At the nearby Beddawi refugee camp, where thousands of Palestinians from Nahr el-Bared have taken refuge in recent days, some 200 angry Palestinians staged a demonstration, demanding to return to their homes.

The group burned cardboard boxes, as some shouting "Allahu Akbar," or "God Is Great," tried to march to Nahr el-Bared but were stopped by Lebanese army soldiers at a nearby checkpoint. After a 30-minute standoff, during which traffic on both sides of the street was stopped, the demonstrators dispersed peacefully.

Mediators from major Palestinian factions have been pressing for a negotiated solution. The standoff has raised concerns of more violence across Lebanon, which has a total of 12 highly crowded Palestinian refugee camps where militant movements are rampant.

Also, four bomb blasts have hit the Beirut area since the army-Fatah Islam fighting erupted. One person was killed and about 30 people were injured in the bombings.

Lebanon, particularly Beirut, has been tense after the bombings amid concerns about additional attacks.

On Tuesday, a package placed on the outer wall of a school in the Muslim sector of Beirut raised suspicion and the police were called in, witnesses said. Police bomb experts checked the package, which was said to resemble an explosive charge, but found no explosives inside. Classes were dismissed for the day.

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U.S., Iran Hold Meeting On Iraq Security

(CBS/AP) The United States ambassador in Baghdad said he and his Iranian counterpart agreed broadly on policy toward Iraq during four-hour groundbreaking talks on Monday, but insisted that Iran end its support for militants.

During a meeting that U.S. Ambassador Ryan Crocker described as businesslike, the American said he told the Iranians their country needed to stop arming, funding and training the militants.

"This is about actions, not just principles, and I laid out to the Iranians direct, specific concerns about their behavior in Iraq and their support for militias that are fighting Iraqi and coalition forces," Crocker told a Green Zone news conference.

The American said Iran proposed setting up a "trilateral security mechanism" that would include the United States, Iraq and Iran. Crocker said the proposal would need study in Washington.

Hassan Kazemi Qomi, the Iranian envoy, also said that he told the Americans that Tehran was ready to train and equip the Iraqi army and police to create "a new military and security structure."

Kazemi did not elaborate nor would he say how Crocker responded.

After the meeting, Kazemi said a number of positive steps were taken, reports CBS News chief foreign correspondent Lara Logan.

But just a short distance away from the talks, a massive car bomb exploded outside one of Iraq's holiest Sunni mosques, killing more than twenty people and injuring dozens more.

The violent and political turmoil in Iraq has escalated to the point where it's achieved something nothing else could in more than 25 years: to bring the United States and Iran together in formal talks for the first time since the Iranian Revolution in 1979.

Washington wants Tehran to butt out of the conflict here, while Tehran wants the United States out of Iraq completely, adds Logan.

So far there's no sign the U.S. ambassador is willing to do what Iran wants: admit that American policy in Iraq and the Middle East region has been a failure, and set a date for withdrawal of U.S. forces.

Washington believes Iran is implicated in attacks on U.S. troops because they're supplying weapons and fighters to kill Americans in Iraq. Their major concern is EFPs (or explosively formed penetrators), sophisticated armor-piercing bombs which the United States says can only be made in Iran.

Another issue dividing the two countries is the fate of seven Iranians in U.S. custody. Five of them were arrested during a raid on an office in the northern Iraqi city of Irbil in February.

In the days leading up to these talks, Tehran increased tensions by arresting several Iranian-Americans and accusing the United States of setting up a spy ring in the region. Not up for discussion in today's talks but complicating the U.S.-Iran relationship right now are even bigger issues, primarily Iran's nuclear program and fears in Tehran that the Bush administration is planning regime change in Iran, the same way it removed Saddam Hussein from power.

Washington and its Sunni Arab allies, on their side, are deeply unnerved by growing Iranian influence in the Middle East and the spread of increasingly radical Islam.

Compounding all that is Iran's open hostility to Israel.

Regardless, the Baghdad talks are the first of their kind and a small sign that Washington thinks rapprochement is possible after nearly three decades of animosity. Iran, angry over the blunt show of U.S. military power off its coast, almost refused to come.

Iraqi officials said the meeting between Crocker and Kazemi was cordial and focused solely on Iraq.

"There are good intentions and understanding and commitment between the two countries," Ali al-Dabagh, an Iraqi government spokesman, told reporters.

Crocker concurred: "There was pretty good congruence right down the line and support for a secure, stable, democratic federal Iraq, in control of its own security, at peace with its neighbors, he said.

There were no breakthroughs today, adds Logan, but the door was left open for future meetings. The Iranians showed they want more talks, but the United States signaled it wants to see a change in Tehran's behavior before agreeing to come back to the table.

The talks were held at Iraqi Prime Minister Nouri al-Maliki's office in the Green Zone compound in Baghdad. Iraq was being represented at the talks by National Security Adviser Mowaffak al-Rubaie.

"U.S.-Iran talks come at a time when bilateral relations have nose-dived because of Iranian defiance on its nuclear program and the evidence that has surfaced regarding aid to Shiia insurgencies in Iraq, but it is, nonetheless, a landmark meeting," said CBS News foreign affairs analyst Pamela Falk.

Just before 10:30 a.m., al-Maliki greeted the two ambassadors, who shook hands, and led them into a conference room, where the ambassadors sat across the table from each other. Al-Maliki then made a brief statement and left the room.

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U.S. Preparing For Iran Negotiations

(AP) The United States is pursuing a two-track strategy with Iran that reflects the high stakes in any engagement with a nation President George W. Bush accuses of bankrolling terrorism and secretly building a nuclear bomb.

Monday's talks in Baghdad are one element. Discussion between the U.S. and Iranian ambassadors is only supposed to cover Iraq, where they have competing and overlapping interests.

Then there are the U.S. Navy's exercises in the Persian Gulf last week and tough talk from Bush about new United Nations penalties against Tehran.

"In the American mind, the two tracks sort of complement each other," with the muscle-flexing and threats serving to push Iran to the bargaining table, said Ray Takeyh, an Iran specialist at the Council on Foreign Relations.

"Iran only sees one track" and thinks it is a trap, Takeyh said. He does not hold out much hope the diplomats will get beyond talking points on Monday.

"The coercive track is undermining and negating the diplomatic track and preventing any sort of meaningful discussions," Takeyh said.

Still, any direct talks are rare. Even fleeting encounters at larger gatherings or diplomatic dinners are scrutinized for clues to the future of a troubled relationship.

The Baghdad talks are the first of their kind and a small sign that Washington thinks rapprochement is possible after nearly three decades of animosity. Iran, angry over the blunt show of U.S. military power off its coast, almost refused to come.

Bush agreed to the dialogue in hopes it could do some good inside Iraq and perhaps beyond. Despite ambivalence within the Bush administration, U.S. diplomats hope this kind of limited conversation can build confidence on both sides and lead to something more substantive.

Diplomats hope for a full airing of views Monday and perhaps an agreement to meet again. Cancellation of the talks, even for reasons that sound plausible, would spell failure.

"The ball really is in their court," State Department spokesman Tom Casey said Friday.

There is plenty to talk about, even within the confines both sides have laid out.

The United States accuses Iran of supplying Iraqi Shiite militias with deadly roadside bombs that kill American troops in Iraq and of political meddling in Shiite-led Iraq.

Iran accuses the United States of improperly seizing five Iranians in Iraq this spring. The U.S. military is holding the five. Iran says they are diplomats; Washington contends they are intelligence agents.

The United States also has complained about the detention or arrest of several Iranian-Americans in Iran in recent weeks. Casey said that issue is not on the U.S. agenda for Monday.

Iran contended on Saturday it had uncovered spy rings operating inside the country that were organized by the U.S. and its Western allies. The White House said it does not confirm or deny allegations about intelligence matters. However it might affect the talks, the allegation reflects a toughening of Iran's stand.

On Sunday, Iran summoned the Swiss ambassador in protest and demanded "necessary explanation" about the claims, Iran's state television reported. Switzerland represents American interests in Iran.

The United States wants to keep the window for the talks small, for fear Iran would use the opportunity to try to bargain over its disputed nuclear program.

That was the rationale the administration used for resisting for months any discussion with Iran about Iraq despite entreaties from Congress, allies and the bipartisan Iraq Study Group.

The current outreach represents a softening of that hard-line, but progress toward better relations is halting.

U.S. and Iranian diplomats met briefly in March on the sidelines of an international conference on Iraq. But Secretary of State Condoleezza Rice and Iranian Foreign Minister Manouchehr Mottaki balked at the expected next step, passing up serious talks during a similar gathering this month.

A year ago this week, the U.S. made its most dramatic overture to Iran in years.

Rice said she would participate in international negotiations with Iran over its nuclear program, on condition Iran halt disputed nuclear work that could produce either nuclear energy or a weapon. Iran called the condition an affront to its rights and sovereignty; the offer has gone nowhere.

The U.S. cut off diplomatic ties with Iran over the 1979 storming of the U.S. Embassy in Tehran. U.S. diplomats were held hostage for more than a year.

Since then, name-calling, accusations and finger-jabbing lectures by U.S. and Iranian leaders largely have defined the relationship.

"Eventually the U.S. and Iran will have to engage across the board on a whole range of issues if they are to make progress," said Robert J. Einhorn, a senior adviser at the Center for Strategic and International Studies and former assistant secretary of state for nonproliferation.

"The Iraq issue is one on which many people have assumed some commonality of interest because at a certain level the Iranians want stability," just as Americans do, although for different reasons, Einhorn said.

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Israel renews strikes across Gaza

Israel has carried out fresh strikes against Hamas positions in the Gaza Strip, killing four Palestinians.

Israeli planes staged strikes in quick succession from Gaza City in the north to the southern town of Khan Younis.

About 40 people have now died in 10 days of Israeli bombings in Gaza, which Israel says is aimed at stopping rocket attacks on its territory by militants.

The latest strikes came as Israeli troops detained a second Hamas member of the Palestinian cabinet.

State Minister Wasfi Kabaha was taken from his home in the West Bank.

The arrest follows the detention on Thursday of Education Minister Nasser al-Shaer and about 30 other officials.

Defiant message

Most of the targets of Saturday's strikes were buildings used by the Executive Force, one of Hamas' security forces.

The four deaths occurred in Zeitoun, a district south of Gaza City where a building used by the group was destroyed by a missile, AFP news agency reported.

At least 20 people were reported to have been injured, according to Palestinian medical sources quoted by Reuters news agency.

Overnight, the Israeli air force destroyed a car travelling through Gaza City, killing two militants on board.

The armed wing of Hamas confirmed that the two were among its members and were on their way to fire rockets into Israel.

But in a statement, the armed wing said it would not stop firing rockets until Israel stopped its military operations.

One Israeli civilian has been killed and 16 wounded by rockets fired into Israeli border towns, particularly Sderot, in recent days.

Mr Kabaha - who is responsible for issues relating to Israeli settlements in the West Bank - was taken from his home in Jenin early on Saturday.

His wife told Arabic TV channel al-Jazeera that the Israeli troops searched their house.

"After we opened the door, they took Wasfi's ID card and made sure he was the one they wanted," she said.

About 30 officials linked to Hamas were arrested on Thursday. Besides Mr Shaer, they include three lawmakers and three mayors.

The Israeli military at the time said the detentions were made because the officials "supported the firing of rockets".

Saeb Erekat, a senior aide to Palestinian Authority President Mahmoud Abbas, told Reuters: "We have urged the US and the EU to intervene to release the ministers and lawmakers. This step does not help to achieve calm."

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U.S. Military Aid Reaches Lebanese Army

(CBS/AP)Military aid from the United States and Arab allies began arriving for Lebanon's army Friday, boosting its strength ahead of a possible army assault to crush Islamic militants barricaded in a Palestinian refugee camp.

Meanwhile, sporadic gunfire exchanges punctured the lull in the fighting as the Lebanese army continued to build up around the Nahr el-Bared refugee camp near the port city of Tripoli.

As flares illuminated the sky, heavy exchanges of gunfire were heard late on Friday between Lebanese troops and Islamic militants holed up inside the camp.

The military was gearing up for a fight, rolling more troops into place around the camp in northern Lebanon, already ringed by hundreds of soldiers backed by artillery and tanks. Fatah Islam has claimed to have more than 500 fighters, armed with automatic weapons, mortars and rocket-propelled grenades.

At least a dozen more armored carriers and a battle tank were seen headed for the area Friday.

Palestinian factions were scrambling to find a negotiated solution to end the siege, and Lebanese Defense Minister Elias Murr said he was "leaving room for political negotiations."

But he insisted on the surrender of the fighters from the Fatah Islam militant group inside the camp, telling reporters: "If the political negotiations fail, I leave it to the military command to do what is necessary." In a statement Friday, the military told the militants, "You have no choice but to surrender."

An assault could deepen splits between the government and the Hezbollah-led opposition. Shiite Hezbollah deeply opposes Sunni militant groups like Fatah Islam. But the Syrian- and Iranian-backed Hezbollah also accuses the government of Prime Minister Fuad Saniora of being in the pocket of the United States and is pushing for his ouster.

The airlift from the United States was a strong show of support for Saniora and could boost the military in what would likely be a tough urban battle inside the camp, a densely built town of narrow streets.

Amid the swell of international support, Saniora has vowed to wipe out Fatah Islam. In a televised address Thursday, he said that Fatah Islam was "a terrorist organization ... attempting to ride on the suffering and the struggle of the Palestinian people."

"We will work to root out and strike at terrorism, but we will embrace and protect our brothers in the camps," Saniora said, insisting Lebanon has no quarrel with the 400,000 Palestinian refugees living in the country.

Under a 1969 agreement, Lebanese military stays out of the camps that are run by the Palestinians.

But Abu Salim Taha, a spokesman for the militants, repeated late Thursday that Fatah Islam would never surrender or flee but "fight until the last moment, the last drop of blood and the last bullet."

Between late Thursday and early afternoon Friday, five military transport planes landed at Beirut's airport, including one from the U.S. Air Force, two from the United Arab Emirates and two from Jordan. Media reports said included they included ammunition, body armor, helmets and night-vision equipment.

U.S. military officials said Washington would send eight planes of supplies, part of a package that had been agreed on but that the Lebanese government asked to be expedited.

The U.S. airlift, however, brought criticism from Hezbollah, the government's top domestic opponent, whose leader warned that Lebanon was being dragged into a U.S. war against al Qaeda that would destabilize the country.

In a televised address, Hezbollah chief Sheik Hassan Nasrallah warned the military against assaulting the Nahr el-Bared refugee camp to uproot Fatah Islam, calling instead for a negotiated solution.

"Does it concern us that we start a conflict with al Qaeda in Lebanon and consequently attract members and fighters of al Qaeda from all over the world to Lebanon to conduct their battle with the Lebanese army and the rest of the Lebanese?" he asked.

Nasrallah called the aid "a dangerous thing."

"You all know that I have nothing to do with al Qaeda and you know al Qaeda's position toward us," he said, referring to Sunni al Qaeda's calls for the killing of Shiites. But, he added, addressing the government, "There is an American-al Qaeda conflict. Do you want to fight the others' war on our land?"

Nasrallah's resistance to an assault on the camp could complicate the government's campaign in the pursuit of the militants. While he may not be able to stop an offensive, his words carry political weight.

They also demonstrate the dangerous political and military straits of the Lebanese government is navigating in the crisis, as more troops took up positions around the camp for what could be a bloody battle against Fatah Islam �Ewith thousands of Palestinian civilians caught in the crossfire.

On the military front, an assault could spark unrest and violence elsewhere in the country, where some 400,000 Palestinian refugees live, most in camps that are rife with armed groups. Fatah Islam warned it has "sleeper cells" in Lebanon that would carry out revenge attacks, and other Islamic militants have threatened terror bombings if the military attacks the camp.

About half of Nahr el-Bared's population of 31,000 fled the camp during the truce, flooding into the nearby Beddawi camp. At least 20 civilians and 30 soldiers were killed in the fighting earlier this week. The Lebanese military says 60 Fatah Islam fighters were killed, though the group put the toll at 10.

A deputy Fatah Islam leader, Abu Hureira, told the pan-Arab Al Hayat daily by telephone from Nahr el-Bared that "sleeper cells" in other Palestinian camps and elsewhere in Lebanon were awaiting word for a "violent response" if the army struck.

The U.S. military aid could also attract other militants into what they see as a battle against the West and its allies. Extremist groups were already using the battle at the camp as propaganda.

A group billing itself as al Qaeda's branch in Syria and Lebanon vowed "seas of blood" if the Lebanese army resumes its attack. In a video posted on the Web Friday, a spokesman for the group threatened bomb attacks on Lebanon's vital tourist industry. Earlier, a Palestinian group called the Army of Islam also threatened attacks. The capabilities of the two groups are not known.

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Fierce gunfire in Lebanese camp

There have been renewed heavy exchanges of gunfire at a Palestinian refugee camp in northern Lebanon where Islamist militants are defying Lebanese troops.

The barrage of machine-gun fire and shells at the Nahr al-Bared camp lasted for some 20 minutes before dying down.

Thousands of people have fled the camp as aid workers struggle to deliver food and medicine to thousands still inside.

Earlier, Lebanese Prime Minister Fouad Siniora vowed his government would not "surrender to terrorism".

Mr Siniora said he would end the conflict "without hesitation" and described the militants from the Fatah al-Islam group in the camp as a criminal gang hiding behind Islam and the Palestinian cause.

'Bloodiest conflict'

The fighting erupted at about 2030 local time (1730 GMT), a Lebanese army spokesman was quoted by the AFP news agency.

Lebanese army officials said the shooting began from inside the camp and that the troops returned fire.

But Fatah al-Islam spokesman Abu Salim Taha told the al-Jazeera Arabic television from inside the camp that the army had opened fire.

The fighting came on the fifth day of the stand-off between the Lebanese army and the Fatah al-Islam, ending a two-day period of relative calm.

The BBC's Jon Leyne close to Nahr al-Bared says the Lebanese army is in position in force outside the camp; inside, the militants are determined not to surrender.

At least 50 soldiers and militants have been killed in the fighting at the camp so far. The civilian death toll is not known.

The fighting at the camp is the bloodiest internal conflict in Lebanon since the civil war ended 17 years ago.

It began after security forces raided a building in Tripoli to arrest suspects in a bank robbery. Fatah al-Islam militants then attacked army posts at the entrances to the camp.

A large force of Lebanese troops hit back, bombarding the camp and storming a building on the outskirts of Tripoli.

Fatah al-Islam is a radical Palestinian splinter group alleged to have links with al-Qaeda. Lebanese officials also believe it is backed by Syria.

Other Palestinian factions have distanced themselves from the group, which emerged last year.

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U.S. Working To Sabotage Iran Nuke Program

CBS News has learned that Iran is continuing to make progress on its expanded efforts to enrich uranium �Ein spite of covert efforts by U.S. and other allied intelligence agencies to actively sabotage the country's nuclear program.

"Industrial sabotage is a way to stop the program, without military action, without fingerprints on the operation, and really, it is ideal, if it works," says Mark Fitzpatrick, the former Deputy Assistant Secretary of State for Non-Proliferation and now Senior Fellow in Non-Proliferation at the International Institute for Strategic Studies.

Sources in several countries involved told CBS News that the intelligence operatives involved include former Russian nuclear scientists and Iranians living abroad. Operatives have sold Iran components with flaws that are difficult to detect, making them unstable or unusable.

"One way to sabotage a program is to make minor modifications in some of the components Iran obtains on the black market, and because it's a black market �Eyou don't know exactly who you are dealing with," Fitzpatrick says.

Senior government representatives, who spoke to CBS News on condition that neither they nor their country be identified, pointed to the case of the exploding power supplies. Installed at the pilot enrichment facility at Natanz in April 2006 as Iran was first attempting to enrich uranium, the power supplies, used to regulate voltage current, blew up, destroying 50 centrifuges. The head of the Iranian Atomic Energy Agency, Vice-President Gholamreza Aghazadeh said in January of this year that the equipment had been "manipulated."

There is other evidence, CBS News was told, that some of the technical difficulties Iran is having in consistently running its centrifuges are the results of a concerted effort at industrial sabotage.

Sources familiar with the U.S. effort against Iran tell CBS News that U.S. intelligence agencies have run several programs in recent years, employing different techniques, including modifying components in hard-to-detect ways and making subtle changes to technical documents and drawings, rendering them useless.

"Governments [interested in deterring Iran] are investing a lot of effort to disrupt the Iranian trade, or track their purchases," Albright says.

Iran is vulnerable to industrial sabotage because it is prohibited from buying what it wants on the open market. Instead, analysts say, it has turned to the black market, focusing efforts to clandestinely acquire the technology in Western Europe. Intelligence sources tell CBS News that Iranian agents working from the Islamic Republic's consulate in Frankfurt, Germany, have shipped home banned components using the protection and secrecy of diplomatic bags.

Although export controls are stronger in Europe than in many other countries, the Iranians still need European products because of either their quality or reliability, or because they already have European-manufactured products and are looking for spare parts.

But the procurement network is global, and trans-national, analysts say. In Dubai and other neighboring nations, Iran has established a shifting network of front companies.

"These are clandestine efforts. Iran frequently changes its front companies, frequently changes its financial arrangements, and government intelligence agencies have been looking at this," says Fitzpatrick

Albright says Iran has become even more sophisticated in its illicit procurement efforts than the network established by AQ Khan that obtained components and materiel for Pakistan's bomb program.

"They have moved beyond just front companies and are very hard to detect," he said. "The Iranians are very clever."

Iran is described as "highly suspicious" and "almost paranoid," and is believed to be predisposed to believe that any of its many technical problems may be the result of foreign sabotage.

"It's impossible to say the extent to which Iran has discovered any industrial espionage," Fitzpatrick says. "Any technical problems that Iran experiences in its program, some of which were the result of its own speed-up effort, Iran may attribute to foreign espionage."

According to diplomats, getting the Iranians to believe that components may have been tampered with can be as effective in delaying the program as the real thing. But the diplomats also warn that with enough money and time, Iran's nuclear ambitions cannot be derailed by sabotage alone.

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Thousands Of Refugees Flee Lebanon Camp

(CBS/AP) Thousands of people fled a crowded refugee camp Tuesday night during a lull in three straight days of clashes between Lebanese troops and Islamic militants holed up inside, Associated Press reporters at the scene said.

AP Television News video from the Nahr el-Bared refugee camp showed women clutching children and piling up in pickup trucks, some waving white flags, as they tried to leave the partially destroyed camp.

Others fled on foot, and ambulances could be seen evacuating the wounded.

U.N. relief officials in another camp located a few miles to the south of Tripoli said they expected 10,000 Palestinian refugees from Nahr el-Bared to arrive through the night.

Refugees from Nahr el-Bared were seen raising white towels from windows and even waving white plastic bags. Boys carried babies, and a young boy and a woman helped an elderly woman, hurriedly walking on the side of the road as cars sped past carrying more refugees.

Many of the packed cars driving out had their windows blasted from the fighting.

Earlier, a U.N. convoy carrying relief supplies was hit during the fighting between the Lebanese troops and the Fatah Islam fighters.

The Lebanese army initially stopped the convoy of six trucks from the U.N. Relief and Works Agency, which aids Palestinians, from entering the camp. The convoy was later allowed in during a brief cease-fire.

But two pickup trucks and a water tanker got caught between the lines of the two sides and were hit as they entered the camp, said an UNRWA official, speaking to The Associated Press by telephone from the entrance of the camp.

The official said the convoy was then shot at as it tried to deliver aid. A car from inside the camp was also hit by fire in the area at the same time, said the official, who spoke on condition of anonymity because he was not authorized to talk to the media.

Al-Arabiya satellite television reported four civilians were killed in the incident. The UNRWA official said there were 15 civilian casualties but did not give a breakdown of dead and wounded. There was no official confirmation of either report.

The UNRWA official said earlier that he had reports dozens of buildings in the camp had been destroyed with residents trapped in the rubble.

At least 29 soldiers and 20 militants have been killed in the fighting since Sunday. The number of civilian casualties is not known, however, because relief workers, Lebanese authorities and journalists have had limited or no access to the camp.

Overnight, the Lebanese government ordered the army to finish off the militants who have set up in Nahr el-Bared, where 31,000 Palestinian refugees live on the outskirts of the northern port of Tripoli.

Black smoke billowed from the area Tuesday amid artillery and machine gun exchanges between troops and militants. Lebanese troops skirmished with Fatah Islam fighters, trying to seize militant positions on the outskirts of the camp.

"There are dead and wounded on the road, inside the camp," screamed a Lebanese woman, Amina Alameddine, who ran weeping from her home on the edge of the camp. She fled with her daughter and four other relatives after Fatah Islam fighters started shooting at the army from the roof of her house.

At the same time, Lebanese troops sought to flush out fighters hiding in Tripoli. Soldiers raided a building where Fatah Islam militants were believed to be hiding out, blasting an apartment with grenades, gunfire and tear gas.

They found no one in the apartment. As they pursued a militant hours later, he blew himself up by detonating an explosives belt rather than surrendering. None of the troops was injured.

Dozens of refugees angered by the assault on Nahr el-Bared burned tires in protest in the southern camp of Ein el-Hilweh, Lebanon's largest Palestinian camp. Protesters also burned tires in Rashidiyeh camp, farther south.

(AP Photo/Mohammed Zaatari)

The protests raised the specter that Palestinians in Lebanon's 11 other refugee camps could rise up in anger over the assault on Nahr el-Bared. The overcrowded camps �Ehousing more than 215,000 refugees, out of a total of 400,000 Palestinians in Lebanon �Eare also home to many armed Palestinian factions who often battle each other and have seen a rising number of Islamic extremists.

The Lebanese Broadcasting Corp. and camp residents reported that 200 Palestinians in Nahr el-Bared demonstrated against Fatah Islam, asking them to leave the camp.

Reports emerged from the camp of heavy destruction from the three days of bombardment by Lebanese artillery and tanks and militants who returned fire with mortars and automatic weapons.

"The shelling is heavy, not only on our positions, but also on children and women. Destruction is all over," Fatah Islam spokesman Abu Salim Taha told The Associated Press by telephone from inside the camp.

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Iran Charges U.S. Scholar With Spying

(CBS/AP) Iran on Monday charged a detained Iranian-American academic with seeking to topple the ruling Islamic establishment, state-run television reported.

Haleh Esfandiari, director of the Middle East Program at the Washington-based Woodrow Wilson International Center for Scholars, has been held at Tehran's notorious Evin Prison since early May.

Esfandiari, 67, came to Iran in December to visit her 93-year-old mother and, after her passports were stolen at knifepoint by masked men, was prevented from leaving the country when she tried to go home.

According to information supplied by the Wilson Center, she was subjected to weeks of interrogation, intimidation and threats by agents of Iran's Ministry of Intelligence "to make a false confession or to falsely implicate the Wilson Center in activities in which it had no part."

In a statement released earlier this month, her arrest and incarceration was called "entirely unjustified."

State TV said she and the Wilson Center were conspiring together to topple the government by setting up a network "against the sovereignty of the country."

"This is an American-designed model with an attractive appearance that seeks the soft-toppling of the country," state TV said.

The announcement was the first time Iran said it had officially charged Esfandiari with seeking to overthrow the ruling establishment, a severe security crime. It was not immediately clear when Esfandiari will stand trial or if the trial will be public.

The broadcast said Esfandiari confirmed during interrogations that her center "invited Iranians to attend conferences, offered them research projects, scholarships ... and tried to lure influential elements and link them to decision-making centers in America."

Earlier this month, Esfandiari's husband, Shaul Bakhash, denied a conservative Iranian newspaper's allegations that his wife was a spy and was trying to topple the government.

Former U.S. congressman Lee Hamilton, president and director of the Wilson Center, had previously sent a letter via the Iranian Ambassador to the United Nations to President Mahmoud Ahmadinejad, asking for his assistance in gaining Esfandiari's release. There has been no word of a reply.

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Israel hits Hamas politician home

An Israeli air strike has hit the Gaza home of a leader of the Palestinian militant group Hamas, witnesses and officials have said.

At least eight relatives were killed in the attack, said to be on the home of Hamas lawmaker Khalil al-Hayya, who was not at home at the time.

Israel's military said it was targeting Palestinian militants on the streets.

Hours earlier Israel's cabinet backed plans to "intensify" Gaza operations in response to recent rocket attacks.

Israeli air strikes have killed almost 30 people, but Palestinian rocket attacks have continued.

A BBC correspondent in the southern Israeli town of Sderot said many streets were deserted on Sunday, as hundreds of people had left their homes to avoid the rockets.

'People are suffering'

The Israeli military confirmed there had been an air strike in northern Gaza on Sunday evening, but said it was aimed at a group of armed militants gathered outside a house.

However, reports from Gaza City suggested the attack did strike Mr al-Hayya's home, and that several members of his family were among those killed.

Shortly after the air strike, Mr al-Hayya visited Gaza City's Shifa hospital, where those wounded were being treated.

"We will go ahead despite the challenges, despite the martyrs, despite the pain that I am suffering and my people are suffering," he told reporters.

A Hamas spokesman, Fawzi Barhoum, said those killed were civilian members of Khalil al-Hayya's family.

"This escalation is very serious," the Associated Press reported him as saying.

'Sharp' response

Hours before the missile strike, Israeli Prime Minister Ehud Olmert threatened to step up military operations aimed at militants in Gaza in response to recent salvos of rocket fire against Israeli towns.

"If the measured steps we are taking, in the political and military sphere, do not bring about the desired calm, we will be forced to intensify our response," Mr Olmert said at the cabinet meeting.

The cabinet then agreed to "step up operational measures designed to reduce missile fire and strike at the terrorist infrastructure", a statement said.

The Hamas and Islamic Jihad groups would be the first targets for any "sharper" Israeli action, the cabinet decided.

Israel's decision came as Palestinian factions Hamas and Fatah appeared to be holding to truce that ended days of bitter civil fighting on the streets of Gaza.

The truce, which came into effect on Saturday afternoon, is the fifth such pact since violence broke out last Sunday.

Since then about 50 people have died in clashes between the two groups.

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Hamas-Fatah Cease-Fire Begins To Take Hold

(AP) Gunmen armed with rifles, grenades and explosives climbed down from rooftop positions Saturday and residents began venturing out of bullet-scarred homes after their leaders agreed to end a week of Palestinian factional bloodshed in Gaza.

The truce began to take hold as Israel launched a fifth day of airstrikes on Hamas targets in the Gaza Strip in reprisal for the Islamic militant group's rocket attacks on Israeli border towns. Other recent cease-fires between the factions have been short-lived but Hamas spokesman Fawzi Barhoum said he expected this one to stick because of Israel's military action.

"No one would accept to fight one another while the Israelis are shelling Gaza," he said.

The clashes between Hamas and Fatah gunmen loyal to Palestinian President Mahmoud Abbas have brought the two groups that nominally share power to the brink of civil war. More than 50 Palestinians have been killed in a week of infighting.

The overlapping violence from Israel's attacks on Hamas rocket operations has killed 23 other Palestinians in the past week.

On Saturday, Israeli Defense Minister Amir Peretz vowed to keep going after Hamas militants who would fire rockets at Israel, warning them to be "very afraid."

Still, Peretz said time was not ripe for a major Israeli ground offensive in Gaza.

Two Israeli airstrikes on Hamas targets killed three Palestinians and injured three. Five rockets from Gaza hit the Israeli border area Saturday, causing damage, but no injury.

The air attacks, backed by tank fire, have driven Hamas fighters out of their bases, prompting the militant group to accuse Israel and Fatah of colluding against it.

The Palestinian infighting broke out Sunday after Abbas stationed thousands of security forces on the streets of lawless Gaza City �Ea move Hamas interpreted as a provocation because it wasn't consulted.

Saturday's truce committed the battling factions to pull their fighters off the streets and exchange an unknown number of hostages.

Four previous cease-fire agreements collapsed earlier in the week.

A gunbattle erupted outside the home of a senior Fatah official in Gaza City as the cease-fire was reached, and security officials said several people were wounded.

And in another sign of the shaky nature of the truce, several hostages from both factions were released before an official exchange ceremony �Ebut only after their captors shot them in the legs, both sides said.

Still, as word of the cease-fire spread, and enforcement teams went out on the streets, fighters began to comply �Esomething they had not done with the previous truces. They also began knocking down roadblocks they had set up to identify rival fighters.

Truce enforcers from various Palestinian factions went from rooftop to rooftop, urging gunmen to leave. At one Gaza City building that had been the site of fierce fighting, Hamas fighters climbed down carrying a cache of rocket-propelled grenades, bags of explosives and AK-47 rifles.

Mervat, a resident who would only give her first name for fear of reprisal, said the fighting terrorized her 5-year old daughter who thought the conflict was with Israelis. The two never left home throughout the fighting.

"Hopefully it will stick this time. We are the only losers if this continues," she said.

She and other residents who had remained holed up at home throughout the fighting stepped out hesitantly to shop for groceries and other supplies.

Ribhi Barghouti held up a fistful of burnt American dollars. He said mortars fell in his apartment, destroying his furniture and burning up his wife's passport and $13,000 the couple had stashed away.

"I lost everything. ... It is impossible to tell what will happen in this place anymore," he said. He said he plans to return to his native West Bank as soon as his wife replaces her ID.

Some Gazans returned to their apartments, passing evacuating fighters on the way, only to decide the damage was too great for them to stay. They stuffed a few belongings into suitcases and left again.

The cease-fire was negotiated in a meeting at the Egyptian representative office in Gaza City and endorsed by Abbas and Hamas' exiled supreme leader, Khaled Mashaal, who conferred a rare three times by phone in the past few days. Mashaal lives in Syria.

"Both leaders ... made their calculations and realized that they can't gain this way," Palestinian Information Minister Mustafa Barghouti said.

Barghouti also said Saudi Arabia "made it clear they can't accept the failure" of the agreement Hamas and Fatah reached in Mecca in February to form a national unity government.

The violence with Israel, meanwhile, has destroyed a cease-fire Gaza militants reached with Israel nearly six months ago.

Israel launched its latest round of airstrikes on Hamas targets on Tuesday. The militant group, which refuses to recognize Israel's right to exist, has fired nearly 120 rockets at southern Israel since Tuesday, the military said.

Rocket squads should be "very afraid," because "it is our intention to act against Hamas," Peretz vowed in an interview with Israel Radio.

Asked whether Palestinian Prime Minister Ismail Haniyeh of Hamas and the head of Hamas' military wing, Ahmed Jaberi, could also be targets, Peretz said he would not rule out any action that "makes it clear to everyone that we don't intend to allow anyone to harm Israeli citizens."

At the same time, he said Israel would not embark on a major offensive in the Gaza Strip because it had other, unspecified tools in its arsenal to use against rocket-launchers, he said.

Peretz insisted Israel is not interfering in the internal Palestinian fighting. However, he said "we certainly would like the moderate forces to emerge with the upper hand," a reference to Fatah.

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Fresh violence hits Gaza Strip

In the latest raid, one person was hurt in a strike on an empty school in Gaza City, Palestinian sources said.

Earlier, two Hamas men and a passer-by were reported killed when a van was hit close to a Hamas post in northern Gaza.

The Gaza bureau chief of Abu Dhabi TV was released several hours after being abducted, the Arabic channel said.

Colleagues of Abd al-Salam Abu Ashkar, a close associate of senior Fatah figure Mohammed Dahlan, said he was seized at gunpoint as he approached a roadblock in Gaza City.

They said the journalist was taken by armed gunmen belonging to the Hamas Executive Force.

But a spokesman for the paramilitary group denied any involvement.

"We oppose the abduction of any journalist," Islam Shahwan said.

Several journalists have been kidnapped in Gaza in recent years, including the BBC correspondent, Alan Johnston, who disappeared more than nine weeks ago.

Israeli strikes

Mr Abu Askhar's abduction came amid a series of Israeli strikes in the Gaza Strip - totalling 13 since Wednesday - in response to repeated rocket attacks on southern Israel.

Earlier, a Hamas compound in central Gaza was hit, killing one person and injuring 20.

According to the Israeli authorities, close to 100 rockets have been launched from Gaza in recent days, including at least 10 fired at the southern Israeli town of Sderot on Friday.

Correspondents say the rocket attacks on Israel appear to be an attempt to draw it into an internal Palestinian conflict.

On Thursday, six Palestinians, including four Hamas members, were killed by Israeli air strikes.

Call for unity

Palestinian Prime Minister Ismail Haniya of Hamas appealed for unity.

"The Palestinian people need to unite in the face of the Israeli aggression, and avoid any factional fighting because that certainly does not serve our people or our unity," he said after attending Friday prayers.

"Instead, I say all security organisations should follow the instructions issued by the political leadership."

Despite Mr Haniya's call, fresh clashes were reported between armed supporters of the two factions.

One person was wounded when fighters loyal to Palestinian leader Mahmoud Abbas' Fatah movement fired upon Hamas members near the Islamic University of Gaza, a stronghold of the group.

Earlier, the university's president, Kamalain Shaath, said his office had been hit by rocket-propelled grenades.

Mr Shaath called for an immediate halt to the clashes.

"Universities must be outside the circle of violence and I appeal to the president and all the wise people on both sides to try and spare the university the agony of this fight," he said.

Numerous ceasefires called to end the infighting during the past week have collapsed, leaving more than 40 people dead.

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10 Killed As Israel Pounds Hamas Targets

(CBS/AP) Israel pounded more Hamas targets with airstrikes, killing 10 people and wounding dozens as it stepped deeper into fighting between the Islamic militants and the rival Fatah fighters of Palestinian President Mahmoud Abbas.

The latest attack came early Friday morning as Israeli aircraft fired missiles east of Gaza City, killing four Palestinians, at least three of them Hamas militants, and wounding six people, Hamas and Palestinian doctors said. There was no immediate Israeli comment. Two other strikes followed but there was no word of any casualties, the doctors said.

Israel says the strikes are in retaliation for more than 50 rockets that Hamas has launched against Israel over the past three days in an apparent attempt to divert attention from Palestinian infighting, CBS News correspondent Allen Pizzey.

"Hamas killed a lot of fellow Palestinians, some in brutal executions and ambushes, so a good way to divert attention from that was to draw Israel into the fighting," says CBS News correspondent Robert Berger. "If Hamas is targeted by Israel, it wins immediate sympathy from the public and also unites the Palestinians. Instead of fighting each other, they'll turn their attention to fighting a common enemy �EIsrael."

But the Palestinians have so far managed to kill more of their own than the Israelis have. Fatah gunmen even opened fire Thursday on a funeral for Hamas fighters killed in earlier street battles, adds Pizzey.

�Israel will take every defensive measure to stop these rocket attacks. We will defend our citizens against the rockets, against the weapons, against the Iranian-backed Hamas who are attacking Israel,�Egovernment spokeswoman Miri Eisen said.

The strikes, a series of Israeli attacks Thursday, and the reported movement of a handful of tanks a few hundred yards into the northern Gaza Strip, followed days of Hamas rocket barrages into Israel.

Street fighting between the Palestinian factions that has gripped Gaza since the weekend calmed under a truce agreement, but clashes still killed at least four people �Ea day after 22 died in the worst battles during a year of factional bloodshed.

There was no sign of any Israeli military buildup that would indicate plans for a serious intervention into chaotic Gaza, though a few tanks and soldiers moved just across the Gaza border. Israel's government said its attacks were intended solely to discourage rocket attacks on southern Israel.

Analysts said Israeli policy makers were likely trying to walk a narrow line to avoid uniting Palestinian factions into a common front against Israel.
Hamas mounted accusations on its Web sites, radio and TV that Abbas-linked forces were working with Israel �Ea charge dismissed as absurd�Eby a Fatah spokesman.

Although Israel said it wasn't taking sides, the airstrikes did make it harder for Hamas gunmen to move around and that could help Fatah's fighters, who appeared to have been outfought in the latest round of battles. Hamas fighters have clearly been more motivated in the current fighting and earlier battles in December.

In Washington, State Department spokesman Sean McCormack said Israel had shown �great restraint�Ein exercising its right to self defense and warned Hamas it would never achieve a Palestinian state unless it chose peace and worked with Fatah.

�They're not going to see it by launching Qassam rockets into Israel. They're not going to see it by attacking the legitimate security forces of the Palestinian Authority. They're not going to see it by sending young people armed with suicide vests to blow up other Israeli youngsters,�EMcCormack said.

A day after bombing two Hamas targets, Israeli aircraft struck a Hamas command center, a trailer housing bodyguards and two vehicles Thursday.
Busloads of Sderot residents sought shelter away from the frontier. Israeli media said more than 2,000 of the town's 24,000 people had left.

Berger (audio) reports Sderot's terrorized residents are accusing the government of doing nothing.

Thursday's airstrikes came on the fifth day of factional fighting that appeared to be tearing apart a Hamas-Fatah unity government formed two months ago in hopes of ending such clashes and also killing any hope of renewed peacemaking between Israel and the Palestinians.

In all, 46 Palestinians had been killed by the infighting since Sunday. But street clashes ebbed Thursday and Gazans who had been trapped in their homes the previous day hurried out to stock up on bread, bottled water and other supplies.

�I have run out of cigarettes and I'm almost out of mineral water. I don't have many diapers left,�Esaid grocer Ghassan Abu al-Qas.

No one stayed outside long, though, fearing a resumption of fighting. Few cars and trucks ventured out.

Israel's airstrikes complicated an already chaotic situation in Gaza, making the embattled Abbas even more vulnerable to Hamas accusations that he is in Israel's pocket. With his aides citing security concerns, Abbas canceled a Thursday trip to Gaza for talks with Prime Minister Ismail Haniyeh of Hamas.

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Gaza erupts in renewed violence

At least 20 people have been killed in a fourth day of gun battles in the Gaza Strip between the rival Palestinian factions, Fatah and Hamas.

Both groups have called a renewed ceasefire to end the violence in which nearly 40 people have died, but gunfire was still being heard after it began.

A BBC correspondent described the fighting as the worst he had ever seen.

Four Israelis were also injured by a rocket attack, prompting their prime minister to order "a severe response".

Shortly after Israeli Prime Minister Ehud Olmert said his country's "policy of restraint" could not continue, an Israeli strike on a Hamas training camp in southern Gaza killed four people.

In a later Israeli strike, a Hamas militant was killed and two other Palestinians wounded in a strike in northern Gaza, Palestinian sources said.

Palestinian militants responded on Wednesday evening with a further barrage on the southern Israeli town, causing a brief blackout with an electricity transformer was hit.

'Heavy shooting'

Gun battles continued throughout the day in the Gaza Strip between Fatah, loyal to President Mahmoud Abbas, and Prime Minister Ismail Haniya's Hamas group.

The area around the Palestinian president's compound was besieged by gunmen.

Staff in the building that houses most of Gaza's broadcasters were forced to seek refuge for several hours in one room as Fatah gunmen traded gunfire with Hamas militants on the ground.

Ibrahim Adwan from the BBC's Gaza bureau, who was inside the building, said the siege had now ended and fighting had subsided in that area.

He said the reporters had been stuck on the ninth floor with heavy shooting towards the building.

"Fatah militants were occupying the roof of our building, and the Hamas people were shooting towards the building," he said.

Mr Adwan described the latest infighting as the heaviest he had ever seen.

'Bloodbath'

Palestinian Information Minister Mustafa Barghouti described Wednesday's violence as shameful.

"They keep making agreements, and then they violate it within minutes," he told the BBC.

"When we formed the national unity government, it was formed specifically to prevent internal fighting, and to open the road of protecting democracy."

The UN secretary-general, Ban Ki-moon, repeated his calls for an immediate end to the "unacceptable attacks" on Palestinian Authority installations and personnel, which he said endangered civilians throughout Gaza.

Mr Ban also said the rocket attacks on Israel were "equally unacceptable".

Orders 'ignored'

Hamas said it had ordered a unilateral ceasefire from 1700 GMT and President Abbas said Fatah would also stop fighting.

Three earlier truces have been broken and initial reports said clashes were continuing, including around the National Security Headquarters in northern Gaza.

One official also said gunmen had fired upon the guards protecting Mr Haniya's residence, but later said the gunfire did not appear to be hostile.

BBC's Arab affairs analyst Magdi Abdelhadi says the collapse of ceasefires suggests the armed supporters on the ground may no longer be paying attention to orders from their political leadership.

A Palestinian government of national unity had been agreed between the factions in February in an attempt to end the factional violence.

But about 40 people have now been killed and 114 injured since fierce fighting broke out in Gaza on Sunday, according to figures from the UN humanitarian affairs office.

Interior Minister Hani Qawasmi, an independent, resigned on Monday after the violence started.

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Iran Probing American For Security Crimes

(AP) Iran's judiciary said Tuesday that a detained Iranian-American academic is being investigated for security crimes, while Secretary of State Condoleezza Rice called for her immediate release in a rebuke of the Islamic regime.

Haleh Esfandiari, director of the Middle East Program at the Washington-based Woodrow Wilson Center for Scholars, has been held for a week at Tehran's Evin Prison. She came to Iran months ago to visit her 93-year-old mother and was prevented from leaving.

The Iranian judiciary's announcement Tuesday was the first official word on an investigation into Esfandiari, who has been living in the United States since 1980.

Asked about Esfandiari's detention, Rice said she "ought to be released immediately."

"It just underscores the nature of the Iranian regime and it just gives strength to the argument that the regime does not, in addition to all of the problems that it causes internationally, does not treat its people ... very well," Rice told reporters in Moscow, where she was meeting with Russian leaders.

Over the weekend, the hard-line Iranian newspaper Kayhan said Esfandiari was accused of spying for the United States and Israel and had formed networks of activists to overthrow the Iranian government.

Her husband, Shaul Bakhash, called the accusations "fantasies" and "untrue."

Judiciary spokesman Ali Reza Jamshidi said Esfandiari was being investigated for "security" crimes, but did not give details or say what specific actions led to her arrest.

"Charges against Esfandiari are being investigated by the Intelligence Ministry ... She is being held at Evin prison," Jamshidi told reporters Tuesday.

The 67-year-old Esfandiari has for years brought prominent Iranians to Washington to talk about the political situation in Iran, some of whom have been subsequently detained and questioned back home. Her defenders say some of those she brought to the United States were supporters of the Iranian government who sought to explain Tehran's stance to Americans.

Esfandiari had been trapped in Iran since December, when three masked men with knives stole her luggage and passport as she headed to the airport to leave the country, the Wilson Center said. In the weeks before her arrest, she was called in for questioning daily on her activities, it said.

Her arrest came amid increasing restrictions on Iranian rights groups, particularly women's organizations, and other critics by the hard-line government of President Mahmoud Ahmadinejad. Iranian authorities have stepped up their warnings that the United States aims to use internal critics to destabilize the Iranian government amid the mounting tensions between the two countries.

Also Tuesday, Jamshidi said an Iranian journalist who was detained in December at Tehran's airport after returning from a conference in India has been sentenced to three years in prison. Jamshidi did not specify the charges against Ali Farahbakhsh, but the journalist's lawyer, Morteza Alizadeh Tabatabaei, said he was detained on charges of espionage.

Other Iranian-Americans have been prohibited from leaving Iran in recent months, including journalist Parnaz Azima, who works for the U.S.-funded Radio Farda. Another American, former FBI agent Robert Levinson, disappeared in March after going to Iran's resort island of Kish.

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Gaza factions 'agree new truce'

Rival Palestinian factions are reported to have agreed a truce to end fierce fighting in the Gaza Strip.

Hamas and Fatah made a deal after two days of bitter street violence, government spokesman Ghazi Hamad said.

He said the groups had agreed to remove armed men, take down street checkpoints and exchange hostages. However, past agreements have failed to hold.

Eight people have died since Sunday and 30 others have been hurt in the worst outbreak of violence in several months.

The Palestinian Authority mobilised all of its security forces in an attempt to end the street battles.

Egyptian mediators were said to have negotiated a deal on Sunday night, but Monday brought renewed fighting.

Interior Minister Hani Qawasmi resigned on Monday amid the violence, prompting Palestinian Prime Minister Ismail Haniya to take personal control of security in Gaza.

But Mr Hamad said the rival groups agreed a truce after a meeting late on Monday night.

The BBC's Aleem Maqbool in Ramallah in the West Bank says it will be a difficult task for any politician to control all the disparate security forces and Palestinians fear this round of violence has not yet run its course.

Plea for support

Earlier, Information Minister Mustafa Barghouti asked for the co-operation of the rival factions in the new security measures.

"The government decided today to deploy immediately security forces under control of the joint operation room and under the control of Prime Minister Ismail Haniya," he said.

"The government is asking all factions, Hamas and Fatah in particular, to support the government in this and not create any obstacles to this effort."

Hani Qawasmi, an independent, had offered to resign last month in protest at worsening security, but was persuaded to stay on.

However, he is reported to have faced competition from powerful Fatah rivals for control of armed factions.

'Despicable scenes'

Sunday's violence - with five dead and 18 injured - was the worst in a single day since February.

Three people were killed and at least 10 wounded as rival factions exchanged fire on Monday morning.

Up to 400 people have died in clashes between the two factions since the militant Hamas movement won last year's parliamentary elections.

Senior Palestinian negotiator Saeb Erekat described the violence, together with the abduction of BBC journalist Alan Johnston nine weeks ago, as "despicable scenes".

"I am ashamed as a Palestinian this morning to see the continuation of such chaos. If the government cannot deliver on this one authority, one gun, the rule of law, I believe there is no purpose to have a government," he told the BBC.

Since the Israeli withdrawal from Gaza in 2005, the strip has seen a wave of infighting, armed robberies, deadly family feuds and kidnappings.

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Iran, U.S. Agree To Iraq Talks

(CBS/AP) The U.S. and Iran say they will hold upcoming talks in Baghdad about improving Iraq's security �Ea historic political turnabout for the two countries with the most influence over Iraq's future.

Expectations of progress remain low, however, with tough issues at stake and mutual suspicions running high. Even as it announced the talks Sunday, Iran lashed out at Vice President Dick Cheney's weekend warnings about its nuclear program, saying it would retaliate if the U.S. attacked it.

Yet the two sides said they were setting aside such differences to focus on a narrow issue �EIraq's continued violence and sharp political deterioration.

"The purpose is to try to make sure that the Iranians play a productive role in Iraq," said Gordon Johndroe, the White House's National Security Council spokesman.

Cheney's spokeswoman, Lea Anne McBride, also confirmed the upcoming talks, saying the vice president supports the move as long as they focus solely on Iraq.

Despite the agreement to meet in Iraq, Iran's hard-line president kept up his anti-American rhetoric, leading a raucous rally in Dubai �Ea tightly controlled U.S. ally in the Persian Gulf.

President Mahmoud Ahmadinejad's speech at the rally came a day after a low-key visit by Vice President Dick Cheney, which was aimed at countering Tehran's influence in the region.

Ahmadinejad told a cheering crowd Sunday that America was to blame for creating instability and robbing the region of its wealth.

"We are telling you to leave the region. This is for your benefit and the benefit of your nation," Ahmadinejad shouted to the crowd of thousands at a soccer stadium. "The nations of the region can no longer take you forcing yourself on them. The nations of the region know better how to create peace and security."

Iran agreed to the direct talks with the U.S. "after consultation with Iraqi officials, in order to lessen the pain of the Iraqi people, support the Iraqi government and establish security and peace in Iraq," the state-run news agency, IRNA, quoted Foreign Ministry spokesman Mohammad Ali Hosseini as saying.

Iraqi leaders have leaned on the Bush administration to try to cooperate with Iran in the interest of stabilizing their country. Likewise, some Mideast Arab allies of the U.S. �Eincreasingly distrustful of Iraq's Shiite-led government �Ehave pushed for talks with Iran as a way to reduce sectarian tensions in the country and stop attacks against Sunnis.

The decision to talk comes at a critical time of plunging U.S. support for the war and growing pressure from Congress for Iraq's government to make some political progress, or lose U.S. backing. Many critics say the U.S.- and Iraqi-led security push and troop buildup is also struggling.

In March, lower-level U.S. and Iranian diplomats did hold rare, brief talks on the sidelines of a Baghdad gathering. At a follow-up conference a week ago in Egypt, there was a casual chat between the U.S. ambassador to Iraq, Ryan Crocker, and Iran's deputy foreign minister, Abbas Araghchi.

There had been speculation of a Cabinet-level meeting at that Egypt conference, but neither Secretary of State Condoleezza Rice nor Iran's foreign minister wanted to make the initial move, passing up what would have been the first high-level, face-to-face talks since the U.S. broke off relations with Tehran after the 1979 hostage crisis.

Until this spring, the Bush administration had dismissed calls for both outreach to Iran and Syria. At the Egyptian conference, Rice did sit down for a talk with Syria's top diplomat.

The timing of the upcoming talks in Baghdad was unclear, but Johndroe and Iraq's foreign minister, Hoshyar Zebari, both said they expected them to occur sometime in the next few weeks. The talks could be between Crocker and the Iranians, Johndroe said.

The Baghdad setting will allow for "serious, quiet and focused discussions on the responsibilities and the obligations of all to help stabilize the situation in Iraq," Zebari said.

Despite the planned talks, mutual suspicion and tension between the two countries runs high.

During a visit to the United Arab Emirates, hard-line Iranian President Mahmoud Ahmadinejad demanded Sunday that the U.S. leave the Middle East �Etwo days after Cheney warned Tehran that Washington will not allow it to develop nuclear weapons or dominate the region.

"We are telling you to leave the region. This is for your benefit and the benefit of your nation," Ahmadinejad told the crowd at a soccer stadium in Dubai.

Iran has stressed that it sees the U.S. military presence in Iraq as a serious threat to its security. More than 140,000 U.S. troops are in Iraq �Ewith more expected this month as part of a stepped-up Baghdad security operation.

The U.S. sees Iran as the biggest threat to Iraq's stability, accusing Tehran of supplying Shiite militias with deadly roadside bombs that kill American troops. Iran denies the accusations.

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Iran admits detaining US academic

Iran's foreign ministry has confirmed that the government has detained a leading Iranian-American academic.

Spokesman Mohammad Ali Hosseini said the arrest of Haleh Esfandiari was lawful and she would be treated like other Iranian nationals.

Ms Esfandiari, one of Washington's best known Iran experts, was visiting Tehran to see her 93-year-old mother.

The incident comes at a time of continuing tension between the United States and Iran.

"It is natural if there is any problem, it will be handled by authorities," said the spokesman.

Iran does not recognise dual nationalities.

'Armed captors'

In December, as she was on her way to the airport to return to the US, Ms Esfandiari's taxi was stopped by three men who stole her belongings, including her Iranian and US passports.

When she went to replace her passport, she was sent to the intelligence ministry, where she was repeatedly questioned about her work as the director of the Middle East Program at the Woodrow Wilson Centre in Washington.

Last week, after being prevented from leaving the country for more than four months, she was taken to the notorious Evin Prison in Tehran by three masked men armed with knives, the Woodrow Wilson Centre said.

Iran's Kayhan newspaper has accused Ms Esfandiari of spying for the US and Israel and of trying to incite a democratic revolution in the country.

Her husband, Shaul Bakhash, denied the newspaper's allegations.

"It is a false and hollow accusation that Haleh Esfandiari is one of the 'principle instruments' of Israel, or a Mossad spy service, in advancing the strategy of a 'velvet revolution' in Iran," he said in a statement sent to Associated Press news agency.

"It is a lie that Haleh Esfandiari had 'undercover assignments' or that she was one of the 'media spies' in Iran."

Iranian authorities appear to be particularly suspicious of attempts by the Bush administration to promote democratic change in Iran, says the BBC's Middle East analyst, Roger Hardy.

Other Iranian-Americans have also been banned from leaving the country recently, including journalist Parnaz Azima, who works for the U.S.-funded Radio Farda.

Former FBI agent Robert Levinson disappeared in March on Iran's resort island of Kish.

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Cheney Set To Depart On Mideast Mission

(AP) Vice President Dick Cheney is reaching out to moderate Arab leaders for help in bringing stability to Iraq, a mission that will include pleas for postwar support for minority party Sunnis.

Cheney departs Tuesday on a weeklong mission to the Middle East, right after a visit to the region by Secretary of State Condoleezza Rice.

While Rice's trip had a wide-ranging agenda that included other tensions in the region, administration officials said Cheney would focus largely on the next steps in Iraq.

Cheney's first stop will be Abu Dhabi in the United Arab Emirates. Other announced stops include Saudi Arabia, Egypt and Jordan. Cheney also will visit the aircraft carrier John C. Stennis in the Persian Gulf.

What can Cheney bring to the region that Rice couldn't?

A senior administration official, who spoke on the condition of anonymity because he wasn't authorized to discuss the trip publicly, said President Bush asked Cheney to go because of his close ties with leaders in each of the four countries.

But some Mideast experts outside the administration suggested that Cheney's visit also might be an attempt to try to clear up what might be viewed as mixed messages from Rice by some leaders in the region.

"Some of these people wonder if Condi Rice really speaks for the president when she decides she's going to talk to the Syrians, or when she agrees to go to a conference that includes the Iranians," said David Mack, a retired diplomat who was deputy assistant secretary of state for Near Eastern Affairs and a consultant to the bipartisan Iraq Study group.

"They wonder if the president is going to pull out the rug from under her. The vice president, who is generally identified as having opposed a lot of the things that we've been increasingly doing, can assure them that she speaks for the president as well," said Mack, now vice president of the Middle East Institute, a group devoted to fostering knowledge of the region.

Rice was in the neighborhood attending an international conference on Iraq in Sharm el-Sheik, Egypt, attended by representatives of both Syria and Iran. She met on the sidelines for 30 minutes with Syrian Foreign Minister Walid Moallem, but had no face-to-face contact with the Iranian foreign secretary.

In particular, the senior administration official said, Cheney will appeal to King Abdullah of Saudi Arabia, King Abdullah II of Jordan and Egyptian President Hosni Mubarak to use their influence to help rein in Sunni violence against Shiites in Iraq as well as charting ways to better protect Sunnis from violence at the hands of militant Shiites.

With less than two years left in the Bush-Cheney administration, the vice president has retained close ties to the region.

He got to know many leaders as defense secretary to the elder President Bush in the first Gulf War, then nurtured those relationships as chief executive officer of Halliburton, the oil-services company now in the process of moving many of its operations from Houston to Dubai in the UAE. Halliburton has many oil-related ties to the region, then and now.

In part, Mr. Bush is retracing some of the steps of a March 2002 tour of the Middle East that was aimed at giving Arab states a heads-up on possible U.S. military action against Iraq.

Cheney's trip will build on Rice's visit to the region, said White House spokeswoman Dana Perino. "We have challenges in the region, and it's important that everyone be working together in order to solve them," she said.

But Cheney's influence there is waning, suggested Aaron David Miller, a former State Department adviser on Mideast issues to both Republican and Democratic administrations.

"No visit by Dick Cheney with 18 months to go in the Bush administration can serve to either supplement or somehow make policies ... any more effective," said the former career diplomat. "I spent 25 years going on trips with secretaries of states and presidents, and I'll tell you one thing: One trip doesn't make much of a dent, even if the circumstances weren't as grim as they are."

No longer is the United States seen as "tough, powerful and credible," said Miller. "We are perceived to be failing. And, at some point, those leaders out there �Epersonal relations with Cheney notwithstanding �Eare going to begin to make their own plans for the end of the Bush administration."

On Cheney's 2002 tour �Ewhich also included stops in Israel, Oman, Yemen, Kuwait, Qatar, Bahrain and Turkey �Ehe found little support for an invasion of Iraq and considerable concern among Arab leaders that the U.S. wasn't doing more to resolve the Israeli-Palestinian dispute.

Cheney went to Saudi Arabia in November 2006 for private talks with King Abdullah.

Judith Kipper, a Mideast expert at the Council on Foreign Relations, a think tank, said she thinks Iran may end up trumping other items on Cheney's agenda.

"I do think people in the region are nervous. Iraq is disintegrating. And in the cold war of words between Iran and the U.S., the United States is going back and forth in a way that could become a miscalculation, a misstep," she said.

Still, while Cheney "is not the favorite U.S. politician out there," his visit can help address Arab-state complaints that the United States does not consult enough with them, Kipper said, adding that "the vice president always has more clout than any secretary in the Cabinet."

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Abbas urges support for US plan

Palestinian Authority President Mahmoud Abbas says a new US security plan includes "important steps" and has urged Israel to "respond favourably".

Palestinian leaders have been debating the plan, which will allow greater freedom of movement in the West Bank.

However, Palestinian Prime Minister Ismail Haniya has already dismissed it, saying it will legitimise Israel's occupation of Palestinian territory.

Israel says there are positive elements but some that are unacceptable.

'End the suffering'

The plan, or "Benchmark Document", accompanies a US push for progress in the region.

It requires the dismantling of certain checkpoints in the West Bank in return for an end to rocket attacks on Israel.

Mr Abbas said: "We think that there are important steps in this plan to stabilise security and end the suffering of our people.

"We ask Israel to respond favourably."

Israel has said it does not accept some of the security arrangements.

The BBC's Aleem Maqbool in Ramallah says Mr Abbas does not have the support of some of his ministers, who have openly criticised it.

They say it does not address major concerns about Israeli settlements in the West Bank and the separation barrier that has been built.

Hamas, the party of Mr Haniya, has said it will do everything in its power to ensure the plan fails.

Party spokesman Fawzi Barhum said: "The president should convene Palestinian factions and not decide anything without agreement."

Reports say the plan was approved by US Secretary of State Condoleezza Rice, who is expected in the region again around 15 May.

Clauses of the plan are accompanied by a precise date by which they must be implemented.

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Israel accused of prisoner abuse

Human rights groups in Israel have accused the security services of routinely mistreating Palestinian detainees.

The two groups said detainees were held in appalling conditions, and were sometimes tortured.

They said the maltreatment was intended to "break the spirit" of those who were being interrogated.

Israel's justice ministry rejected the report - which was published on Sunday - as unrepresentative and inaccurate.

The report lists a number of techniques the two groups, B'Tselem and the HaMoked Centre for the Defence of the Individual, say are deployed by the Israeli Security Agency.

They range from preventing detainees from contacting their lawyers, to painful shackling to a chair, threats and intimidation, beating and sleep deprivation.

The groups drew on the testimony of 73 Palestinians detained over a six-month period.

International law

International law is clear in prohibiting ill-treatment or torture, and it allows for no extenuating circumstances.

However, the human rights groups point to a more ambiguous ruling from the Israeli High Court.

It decreed that members of the security service who abused detainees may be exempted from criminal liability, if they believed that the people they were interrogating had information about an imminent terrorist act.

The human rights campaigners also say that of more than 500 complaints about the behaviour of security service agents, not one criminal investigation has been opened.

The Ministry of Justice said the report was "fraught with mistakes, groundless claims and inaccuracies".

In a statement, the ministry also said that over the past few years, information obtained by security service agents - sometimes through interrogation - had saved the lives of many civilians.

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Hamas rejects US security draft

The militant group Hamas has rejected a US plan for improving security and easing restrictions on movement in the Palestinian territories.

It requires the dismantling of certain checkpoints in the West Bank in return for an end to rocket attacks on Israel.

Hamas spokesman Fawzi Barhoum said the plan would legitimise Israel's occupation of Palestinian territory and destroy resistance to it.

Israel's cabinet is expected to discuss the proposal at a meeting on Sunday.

The plan was written by the US security co-ordinator Maj Gen Keith Dayton, US Ambassador to Israel Dick Jones and US Consul-General in Jerusalem Jacob Walles.

Reports say it was approved by Secretary of State Condoleezza Rice, who is expected in the region again around 15 May.

Detailed timetable

Clauses of the plan are accompanied by a precise date by which they must be implemented.

The document demands that Israel approve requests by Gen Dayton for the provision of weapons, ammunition and equipment for security forces under the control of Palestinian Authority (PA) President Mahmoud Abbas.

Israel and the PA are required to establish, no later than 1 July 2007, a bus service operating five days a week between the Erez checkpoint at Israel-Gaza border and the Tarqumiya roadblock at the entrance to Hebron in the West Bank.

Israel is required to remove specific roadblocks in the West Bank on specified dates.

The PA is required to develop a plan to stop Qassam rocket fire from Gaza no later than 21 June 2007.

Palestinian forces controlled by Mr Abbas are required to act to prevent arms smuggling in the Rafah area of southern Gaza in co-ordination with Israel, by the same date.

The plan stipulates that Palestinian security forces must be brought under the authority of Mr Abbas and Mohammed Dahlan, his national security adviser, by 15 June.

Both Israel and the Palestinians are required to re-establish the co-ordination and liaison headquarters in the West Bank.

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Iranian Walks Out Of Dinner With Condi

(CBS/AP) Iran's foreign minister walked out of a dinner of diplomats where he was seated directly across from Secretary of State Condoleezza Rice, on the pretext that the female violinist entertaining the gathering was dressed too revealingly.

"I don't know which woman he was afraid of, the woman in the red dress or the secretary of state," State Department spokesman Sean McCormack said Friday, regarding the actions of Iran's Manouchehr Mottaki.

Rice herself was questioned by reporters about the lack of a direct conversation with Mottaki, even though it appeared she was "chasing" him.

"Uh, well, you could ask him why he didn't make an effort," she replied. Then she laughed. "Look, I'm not given to chasing anyone."

So the face to face between Rice and Mottaki never happened, reports CBS News correspondent Charlie D'Agata. Instead, U.S. and Iranian delegations met at a lower, "expert" level, which while significant, is not a first.

"Our officials did, as they did in Baghdad, have an opportunity to exchange views about the substance of this meeting," Rice said.

So much of this Iraq summit has been about the U.S. and Iran, but with good reason, reports D'Agata. America blames Iran for violence in Iraq, Iran blames America, and the Iraqis have been urging both countries to put their differences aside and put Iraq first.

The dinner episode Thursday night amid a major regional conference on Iraq perfectly revealed how hard it was to bring together the top diplomats of the two rival nations.

In other developments:

Israeli-Palestinian clashes flare

Six Palestinians have been killed in Israeli army raids in the West Bank and an air strike in the Gaza Strip, in the worst flare-up of violence in weeks.

Five of the dead were in Jenin in the West Bank, where gunfire was reported to be continuing into the night.

Also late on Saturday, an Israeli missile struck a car in the northern Gaza Strip, killing a Palestinian man.

The strike came shortly after rockets were fired from Gaza into southern Israel, slightly injuring two people.

Three Palestinian militants, two from al-Aqsa Martyrs Brigades and one from Islamic Jihad, were killed when Israeli undercover troops opened fire on their car in Jenin.

A Palestinian policeman was also shot and killed by Israeli troops near Jenin, Palestinian witnesses said.

The man, Mohammed Abed, was watching an Israeli arrest operation in the village of Kafr Dan from a roof when he was shot, Palestinian security forces said.

The Israeli army said its soldiers had been under attack during the operation and had fired on a man armed with a rifle.

Hours later, Israeli troops returned to the Jenin refugee camp, provoking a gun battle with local militants, Reuters news agency reported.

Palestinian officials said a 17-year-old Palestinian girl had been shot dead by Israeli troops as she stood at a window in her house.

The Gaza Strip also saw violence as Palestinian militants fired three rockets at the southern Israeli town of Sderot, one of them hitting a house.

The militants said the attack was in revenge for Palestinian deaths in the West Bank.

Two people were taken to hospital with light wounds, Israeli medical sources told AFP news agency. Four other people were treated for shock at the site.

Truce

Minutes later, an Israel missile struck a car north of Jabaliya in the Gaza Strip, killing one man said to be a member of Islamic Jihad and injuring another, Palestinian officials said.

The Israeli army said that it had attacked "the rocket-launching cell".

A spokeswoman for Israeli Prime Minister, Ehud Olmert, told AFP that "Israel expects the Palestinian leadership to entirely stop rocket fire from the Gaza Strip."

The Israeli missile strike brought swift condemnation from Palestinian Prime Minister Ismail Haniya of Hamas.

"We call on the Arab leaders to urgently intervene in order to break the Israeli siege on the Palestinian government and answer the Israeli aggressions against our people," he said in a statement.

Israel and Palestinian militants have observed a truce since November, although Israel has launched some raids, and militants in Gaza have fired some rockets into Israel.

The Israeli army says the ceasefire still holds but Israel believes it still has the right to take defensive measures against rocket attacks.

Islamic Jihad say they will not adhere to the truce while Israel continues to carry out raids in the West Bank.

IAEA: Iran Enriching Uranium Gas

(CBS/AP) Iran has started enriching small amounts of uranium gas at its underground plant and is already running more than 1,300 of the machines used in the enrichment process, according to an International Atomic Energy Agency document obtained Wednesday by The Associated Press.

The confidential document �Ea letter to Iranian officials from a senior IAEA staff member �Ealso protests an Iranian decision to prevent agency inspectors to visit the country's heavy water facility that, when built, will produce plutonium. Enriched uranium and plutonium can both be used for the fissile core of nuclear warheads.

Last week, Iran said it had begun operating 3,000 centrifuges at its Natanz facility, nearly 10 times the previously known number. The United States, Britain, France and others criticized the announcement, but experts, and several world powers, expressed skepticism that Iran's claims were true and diplomats in Vienna familiar with the state of the program told the AP they were greatly exaggerated.

Still, the one-page letter reflected a swift advance in the program. A little more than two weeks ago, those diplomats had said Tehran was running only a little more than 600 centrifuges, and had not introduced any uranium gas into them.

The letter, signed by IAEA Deputy Director General Olli Heinonen and dated April 18 said the agency wanted to "take note of the information provided by Iran ... that Iran has put into operation" 1,312 centrifuges, the machines used to spin the gas into enriched uranium.

The letter also cited Iranian information to the agency that "some UF6 is being fed" into the centrifuges, referring to the uranium gas that can be enriched to levels potent enough to be used for nuclear arms.

Iran says it wants to enrich only to lower levels suitable to generate nuclear power. But suspicions about its ultimate intentions, after nearly two decades of nuclear secrecy exposed only four years ago, have led to U.N. Security Council sanctions for its refusal to freeze its enrichment program.

"Regardless of whether the timetable is one year or five, Iran is proceeding to enrich uranium to industrial grade in defiance of U.N. sanctions," said CBS News foreign affairs analyst Pamela Falk, "buying time with each six-month period that the Security Council sanctions allow."

"There is a sense at the U.N., among the permanent members of the Security Council, that something else needs to be done alongside the sanctions to convince Iran to get back to compliance," adds Falk.

It was unclear what the purpose of the uranium gas feed was. A diplomat accredited to the IAEA, who demanded anonymity because he was disclosing confidential information, said the operation appeared to be part of "stress tests" meant see if the machines were running smoothly.

But he and another diplomat said that, even if the operation was not meant to enrich large amounts of uranium, it appeared to be the last step before larger-scale enrichment begins.

Tehran's heavy water enrichment facilities at Arak also are under suspicion, because the plant, once constructed, will produce plutonium, which can also be used in an arms program. Iran argues it needs the plant for medical research, despite a Security Council demand that it also freeze construction at Arak.

When it is completed within the next decade, Arak will produce enough plutonium for two bombs a year.

Iran last month announced it was unilaterally abrogating part of its Safeguards Agreements linked with the IAEA under which Tehran is obligated to report to the agency six months before it introduces nuclear material of any kind into any facility. In his letter, Heinonen suggested that Iran invoked this move in denying his inspectors the right to visit the Arak facility, but argued it was illegal, because such agreements "cannot be modified unilaterally."

Beyond that, Heinonen said, IAEA inspectors should be allowed to visit Arak because the section abrogated by Iran had to do with early provision of design information of new nuclear facilities and "not to the frequency or timing of" agency inspections to verify information on design already provided by Iran.

Ali Ashgar Soltanieh, the chief Iranian delegate to the IAEA, did not specifically answer those concerns but asserted at a public lecture at the University of Vienna that his country had "no obligation to inform the IAEA" beyond the point that it was prepared to do so.

He said Iran cannot except Security Council demands that it suspend enrichment because they represent a "humiliation of the nation." But he said the Islamic republic was ready to negotiate on international concerns about its nuclear ambitions as long as the precondition of an enrichment freeze was dropped.

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BBC's concern at Gaza man's fate

A Palestinian group calling itself the Al Tawhid Al Jihad brigade has issued a claim that it has killed BBC Gaza correspondent Alan Johnston.

The BBC says it is aware of the reports and is deeply concerned, but stresses there is no independent verification.

In a statement faxed to news agencies, the group contrasts the attention given to Alan Johnston's captivity with that given to Palestinians held in prison.

Mr Johnston was abducted as he returned home from his Gaza office on 12 March.

The BBC has issued a statement saying it is deeply concerned about what it is hearing.

"But we stress that at this stage," it says, "it is rumour with no independent verification".

The Palestinian Authority said it, too, had no information confirming the fate of Alan Johnston.

Little known group

Senior Palestinian official Saeb Erekat repeated a call for those holding Mr Johnston to free him.

"Such despicable acts of abducting foreign journalists and others continue, the only (thing) that this is doing is destroying us as Palestinians, destroying the just cause of the Palestinian people," he told reporters.

"So I urge those who abducted Johnston, instead of circulating rumours, and I hope these rumours are only rumours, is to release him immediately and without any conditions."

A spokeswoman for the Foreign and Commonwealth Office in London said they were also aware of the reports and were urgently looking into them.

The group claiming to have killed Mr Johnston is little known in Palestinian areas, the BBC's diplomatic correspondent James Robbins says.

Its name means Brigades of Holy War and Unity.

Protests

Since Mr Johnston's abduction, there have been many calls by both governments and individuals for his safe release.

Palestinian journalists staged several strikes in protest at his abduction and rallies were organised by Mr Johnston's BBC colleagues.

The BBC held a day of action on Thursday with al-Jazeera, CNN and Sky News joining a special live programme.

The unprecedented broadcast paid tribute to Alan Johnston's work and detailed the dangers for correspondents working in the Gaza Strip.

An online petition calling for Mr Johnston's release has gathered more than 30,000 signatures.

Alan Johnston's father, Graham, in a second broadcast appeal for his son to be freed immediately, told his kidnappers: "Please think about what this is doing to my family".

Kidnappers have abducted dozens of foreigners in Gaza, but none have been held for as long as Mr Johnston.

The 44-year-old, who is originally from Scotland, joined the BBC World Service in 1991 and has spent eight of the last 16 years as a correspondent, including periods in Uzbekistan and Afghanistan.

He has lived and worked in Gaza for three years and was the only Western reporter permanently based in the often violent and lawless territory.

His posting in Gaza had been due to end in late March.

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Insurgents claim Baghdad attack

The Islamic State in Iraq said in a statement it had sent a "knight" into Baghdad's highly-fortified Green Zone.

The claim came as lawmakers attended a special session of parliament to condemn the attack, which left one lawmaker dead.

In New York, the UN Security Council also condemned the bombing, describing it as a "heinous act of terrorism".

In a statement read by the current chairman, UK envoy Emyr Jones Parry, the council called for "perpetrators, organisers, financiers and sponsors" of acts of terrorism in Iraq to be brought to justice.

The suicide attack on Thursday - on a restaurant used by lawmakers - also left around two dozen people injured.

Initial reports by the US military said eight people had died, but this number was later revised.

The attack has raised questions over how the bomber managed to enter the heavily-guarded zone. It also comes as a blow to the US-led security surge, now in its third month.

Insurgent claim

The Islamic State in Iraq - which includes a number of Sunni insurgent movements - said it carried out the attacks in a statement posted on an Islamist website.

"A knight from the state of Islam... reached the heart of the Green Zone" and exposed the lies about the security surge in Baghdad, the statement said.

It is impossible to say whether the claim is genuine but one institute that monitors militant websites believes that it is, says the BBC's Jonathan Charles in Baghdad.

It is also the sort of headline-grabbing attack carried out by the organisation in the past, our correspondent adds.

One report said police were questioning three workers from the cafeteria where the bomb went off.

Tributes paid

The claim came shortly after lawmakers held a rare emergency session of parliament - on what is normally a rest day - to condemn the attack.

Opening the meeting, Speaker Mahmoud Mashhadani said it was "a clear message to all the terrorists and all those who dare try to stop this (political) process".

"We ought to sacrifice all that is dear for its success and continuation," he said.

The sitting began with readings from the Koran and many tributes to the minister who died, Mohammed Awadh, who was from one of the Sunni factions.

Lawmakers wounded in the attack were also present.

"We have to forget our pain and unite again for the sake of Iraq," said Sunni woman MP Razha Hamdun Abdallah, who wore a bandage on her neck.

Investigations are underway into how the bomber managed to pass through checkpoints to enter one of the most stringently guarded buildings in the country.

This is the first time a bomb has gone off inside the parliament building, although it has been shaken by several mortar attacks in the past.

Also on Thursday, a bomb attack on a key Baghdad bridge, killed at least eight people and sent several cars into the River Tigris.

Correspondents say the attacks come as a blow to the US-led security drive which has brought down the rate of sectarian murders but not an end to the bomb attacks.

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Networks To Palestinians: Free Journalist

(CBS/AP) In an unprecedented show of unity and concern, three international news networks held a joint broadcast Thursday calling for the release of BBC journalist Alan Johnston, a month after he was kidnapped by Palestinian gunmen in Gaza City.

The 25-minute broadcast by the British Broadcasting Corp., Al-Jazeera and Sky News �Ewith a contribution from CNN �Ewas part of a day of public events meant to put pressure on the kidnappers, including an appeal from Johnston's father to "let my son go. Now. Today!"

Alan Johnston, a native of Scotland who was abducted at gunpoint on March 12, has been held longer than any other foreigner kidnapped in Gaza. Johnston, the only foreign reporter based in Gaza, was snatched just weeks before he was scheduled to end his three-year stint there. There has been no sign of life from him since, and no word from his captors.

In other developments:

Pelosi Calls Mideast Trip Helpful To Bush

(AP) House Speaker Nancy Pelosi, deflecting White House criticism of her trip to Syria, said Friday she thinks the mission helped President Bush because it showed the U.S. is unified against terrorism despite being divided over Iraq.

Pelosi, D-Calif., met with Syrian President Bashar Assad in Damascus this week against Bush's wishes.

Our message was President Bush's message,�EPelosi said in a telephone interview with The Associated Press from Portugal, where she stopped briefly en route back to the United States.

The funny thing is, I think we may have even had a more powerful impact with our message because of the attention that was called to our trip,�Eshe said. It became clear to President Assad that even though we have our differences in the United States, there is no division between the president and the Congress and the Democrats on the message we wanted him to receive.�E

Bush this week assailed Pelosi for making the trip to Damascus, saying it sent mixed messages to the Syrian government, which his administration considers to be a state supporter of terrorism.

There is nothing funny about the impact her trip to Syria has had,�Esaid National Security Council spokesman Gordon Johndroe, who is with Bush in Texas. On the contrary, these visits have convinced the Assad regime that its actions in support of terrorists have no consequences.�E

Lawmakers frequently travel to the Middle East, and several Republicans were in the region at the same time as Pelosi. But as House speaker, Pelosi received the most attention.

She was most heavily criticized for her talks with Syria and Israel. Vice President Dick Cheney called it bad behavior�Eon her part to try to broker a deal between the two �Ea sensitive matter that would be considered the sole province of the executive branch.

After meeting Wednesday with Syria's Assad, Pelosi said she had delivered a message from Israeli Prime Minister Ehud Olmert that Israel was ready for peace talks. Pelosi told reporters in the region that Assad had replied that he's ready to engage in negotiations for peace with Israel.�E

Olmert's office later issued a statement saying such talks could take place only if Syria stopped assisting terror groups.

Cheney, in an interview on Rush Limbaugh's radio program, said of Pelosi's comment: It was a non-statement, nonsensical statement and didn't make any sense at all that she would suggest that those talks could go forward as long as the Syrians conducted themselves as a prime state sponsor of terror.�E

Pelosi said Friday she had paid no attention to the dustup back in the United States.

She also said the delegation was not trying to cut deals between Syria and Israel but rather assessing the ground truth�Eto inform spending decisions made by Congress.

What others were saying and doing was many miles away, in a different time zone and had no impact on our trip except to call more attention to it,�EPelosi said.

Pelosi is locked in a political standoff with Bush over handling of the Iraq war, with Pelosi insisting that troops should come home in 2008 and Bush refusing to set any timetable. The House and Senate are working on compromise legislation expected to identify an end date to the war, which Bush has said he will veto.

Iran Held Some British Troops In Solitary

(CBS/AP) Members of the British naval crew seized by Iran were detained in solitary confinement, Britain's defense ministry confirmed Thursday.

Lt. Col. Andy Price said some of the naval personnel had been "left alone" at points during their captivity, but said he would not elaborate until officials had held further talks with the sailors.

It followed a claim from the family of one of the crew that a sailor had been kept in solitary detention while the 15 sailors and marines were held.

Britain's defense ministry said the sailors were being debriefed about their 13 days in captivity, including questions about their treatment. A ministry spokeswoman said the debriefing sessions would continue Friday.

"There were times when they were left alone, but we will not go into any further detail until tomorrow," Price said. He said the personnel were spending time with their families and were "in good spirits," eating and drinking at a military base cafeteria.

The 15 Royal Navy sailors and marines returned home early Thursday to a nation relieved at their freedom but outraged that they were used for propaganda by Tehran.

Prime Minister Tony Blair called for continued international pressure on Iran, blaming elements of the Iranian government for backing militants in Iraq, where four British soldiers and a translator were slain in an ambush hours before the freed crew touched down.

"On the one hand we are glad that our service personnel return safe and unharmed from their captivity, but on the other we return to the sober and ugly reality of what is happening through terrorism in Iraq," Blair said outside his Downing Street office.

The liberated crew broke open champagne and changed into fresh uniforms on the flight home. After landing at Heathrow Airport, they smiled and stood at attention before being whisked by two Sea King helicopters to the Royal Marines base at Chivenor, southwest of London.

They joyfully embraced their tearful families at the base.

Air Chief Marshal Sir Jock Stirrup met with the crew briefly and described them as being "happy and in good shape." He dismissed questions that the sailors and marines had behaved improperly because they took part in videos on Iranian state television in which they "admitted" trespassing into Tehran's territorial waters.

"They did exactly as they should have done from start to finish, and we are proud of them," he said.

The tabloid Sun newspaper wrote that "nobody emerges from this crisis with credit."

"The sight of the illegally detained British forces thanking Iranian tyrants for their freedom will sicken the nation," the Sun said in an editorial.

While Britain always said that the crew was on a routine mission, Sky News reported that Royal Marine Capt. Chris Air had said in an interview three weeks ago that the crew was gathering intelligence on Iran during their patrols. Defense Ministry officials denied the sailors and marines had an intelligence role, but said they routinely spoke to commanders of vessels using the Persian Gulf and Shatt Al-Arab waterway to determine who is using shipping routes.

Wednesday's announcement by President Mahmoud Ahmadinejad that the Britons had been released was a breakthrough in a crisis that had raised oil prices and escalated fears of military conflict in the volatile region. The move to release the sailors suggested that Iran's hard-line leadership decided it had shown its strength but did not want to push the standoff too far.

Richard Haass, president of the Council On Foreign Relations, said it is too soon to know the political and diplomatic motivations behind Iran's release of the sailors.

"They might have thought this was something good for them to do, to push back to the world, send a message how tough they were. They got a lot of criticism. So what they may have done is diplomatically simply change tactics," he told CBS' The Early Show.

Despite the peaceful resolution to the two-week standoff, Haass said Iran, and Ahmadinejad, comes out of the ordeal a loser because the message sent is "Iran doesn't play by the rules." (video)

Haass added, "Is this the sort of government, the sort of president, we want to have with nuclear weapons? Obviously not if they're prepared to do this kind of thing."

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British sailors set to come home

The 15 Royal Navy crew held captive by Iran are preparing to fly home after being freed by President Mahmoud Ahmadinejad as a "gift" to the UK.

They have met the British ambassador in Tehran, Geoffrey Adams, and are expected to fly to the UK on Thursday.

After 13 days in custody, several of the crew spoke on Iranian television to say thank you for their release.

Prime Minister Tony Blair said the homecoming would be "a profound relief" to the personnel and their families.

The Foreign Office confirmed on Wednesday night that the crew were in good health, but were "still with the Iranians".

They are expected to be formally handed over to the British embassy early on Thursday.

Earlier, one of the captives, Felix Carman, told Iranian television: "To the Iranian people, I can understand why you were insulted by our apparent intrusion into your waters.

"I'd like to say that no harm was meant to Iranian people or its territories whatsoever, and that I hope that this experience will help to build the relationship between our countries."

The only woman in the group, Leading Seaman Faye Turney, said: "Apologies for our actions, but many thanks for having it in your hearts to let us go free."

Both said they had been well treated by their captors.

Speaking at a news conference, Mr Ahmadinejad repeated Iran's view that the crew had "invaded" Iranian waters, but said they were being freed as a "gift" to Britain.

"I'm asking Mr Blair to not put these 15 personnel on trial because they admitted they came to Iranian territorial water," he added, referring to taped "confessions" made by the British sailors and marines.

Britain says the crew were in Iraqi waters under a UN mandate when they were captured and says the confessions were extracted under duress.

Mr Ahmadinejad said no concessions had been made by the British government to secure the releases, but that Britain had pledged "that the incident would not be repeated".

Later, television pictures showed the president smiling, chatting and shaking hands with the crew at his palace in Tehran.

An unidentified crew member said: "I'd like to say that myself and my whole team are very grateful for your forgiveness. I'd like to thank yourself and the Iranian people... Thank you very much, sir."

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Pelosi Tours Syria, Rebuffs Criticism

(CBS/AP) House Speaker Nancy Pelosi mingled with Syrians in a market and made the sign of the cross at a Christian tomb Tuesday as she began a trip to Syria aimed at opening dialogue with its leader, Bashar Assad.

President George W. Bush criticized the visit, saying it sends mixed signals to Damascus.

Pelosi's visit was a new high-profile challenge to Bush by the majority Democrats in Congress, who are taking a more assertive role in influencing policy in the Middle East and the Iraq war.

The United States accuses Syria of interfering in Lebanon, allowing Iraqi Sunni insurgents to operate from its territory and sponsoring terrorism for its backing of the Hamas and Hezbollah militant groups, charges Syria denies.

The Bush administration has resisted calls to open direct talks with Damascus to convince it to help ease the crisis in Iraq and bring progress in the peace process with Israel.

Soon after Pelosi's arrival in Damascus, Bush denounced the visit.

"A lot of people have gone to see President Assad ... and yet we haven't seen action. He hasn't responded," he told reporters at a Rose Garden news conference. "Sending delegations doesn't work. It's simply been counterproductive."

He said Assad had not reined in Hamas and Hezbollah and has acted to destabilize the democratically elected government of Lebanon.

Pelosi, a California Democrat, made no comment on Bush's remarks, instead heading from the airport to Damascus' historic Old City for a tour to meet Syrians face-to-face. She is to meet Assad on Wednesday.

Draping a flowered scarf over her hair and donning a black abaya robe, Pelosi visited the 8th Century Omayyad Mosque, shaking hands with Syrian women inside and watching men in a religion class sitting cross-legged on the floor.

She stopped at an elaborate tomb inside the mosque said to contain the head of John the Baptist and made the sign of the cross in front of the tomb. About 10 percent of Syria's 18 million people are Christian.

At the nearby outdoor Bazouriyeh market, Syrians crowded around her, offered her dried figs and nuts and chatted with her. She strolled past shops selling olive oil soaps, spices and herbs, and at one point bought some coconut sweets and eyed jewelry and carpets.

The tour sought to highlight the Democrats' stark differences with the Bush administration's policy of shunning Damascus, which they have depicted as a failure.

In other developments:

"Now we are in a situation in which I think a bilateral approach, in which I talk in parallel to the parties... is the best way," Condoleezza Rice said.

She also called for renewed effort from Arab and Western states on the issue.

Ms Rice was speaking after talks in the West Bank town of Ramallah with Palestinian President Mahmoud Abbas.

"I think that it is extremely important that there be a political horizon for the Palestinian people," she said. "And I sincerely hope that in the future the parties themselves can talk about that political horizon among themselves."

War of words

But she said it was essential that the Palestinian government accept international demands to renounce violence and recognise Israel.

Ms Rice will later meet the Israeli prime minister, Ehud Olmert.

Mr Olmert on Sunday expressed what correspondents said was unusually blunt criticism of Mr Abbas, accusing the Palestinian leader of violating a promise to free a captured Israeli soldier before forming a new Palestinian national unity government.

"We can't ignore the fact that the chairman of the Palestinian Authority blatantly violated a series of commitments to Israel, especially the commitment that no national unity government would be formed before Gilad Shalit's release," Mr Olmert said.

This refers to the seizure of an Israeli soldier by Hamas-linked militants last June.

Palestinians have said that Mr Abbas never made such a promise, although he has said he would do his best to work for Cpl Shalit's release.

"There is no excuse for Israel to continue to run from serious negotiations with the Palestine Liberation Organisation and President Abbas," said senior Abbas aide Nabil Abu Rudeina.

United effort

Mr Olmert's remarks came several hours before Ms Rice was due in Jerusalem for talks as she continues her shuttle diplomacy aimed at restarting the dormant Middle East peace process.

Ms Rice's trip is her seventh to the region in eight months.

Washington has not recognised the Palestinian unity government, but says it will talk to ministers who are not members of the Islamic group Hamas, which it regards as a terrorist group.

Earlier, Ms Rice held talks in the southern Egyptian city of Aswan with President Hosni Mubarak where the pair discussed ways to reinvigorate the peace process.

Addressing a news conference afterwards, Ms Rice said she hoped every state would "search very deep" to see how it could help end the conflict.

"The Palestinian people have waited long enough to have a state of their own and the Israeli people have waited long enough to have the kind of security that will come from the establishment of a stable and democratic neighbour to live in peace with," Ms Rice said.

UN backs fresh sanctions on Iran

The UN Security Council has unanimously voted in favour of new sanctions against Iran for its refusal to suspend its nuclear enrichment programme.

The decision broadens the limited sanctions imposed in December 2006.

The new sanctions block Iranian arms exports and freeze the assets of individuals and companies involved in Iran's nuclear and missile programmes.

Iranian foreign minister Manouchehr Mottaki said the decision was "illegal" and "unjustifiable".

Iran insists its nuclear programme is purely peaceful in purpose.

"Iran does not seek confrontation nor does it want anything beyond its inalienable rights," Mr Mottaki told the Security Council after the vote. "I can assure you that pressure and intimidation will not change Iranian policy."

'Violation'

He said that suspension was "neither an option or a solution".

"The Security Council's decision to try to coerce Iran into suspension of its peaceful nuclear programme is a gross violation" of the UN Charter.

The BBC's Laura Trevelyan at the UN said that the fact that the sanctions received unanimous backing was significant since it sent a message to Iran that it was being strongly censured over its nuclear plans.

British ambassador to the UN Emyr Jones Parry said "the unanimous adoption of Security Council Resolution 1747 reflects the international community's profound concerns over Iran's nuclear programmes".

"We deplore Iran's failure to comply with the earlier resolutions of the Security Council and the International Atomic Energy Agency and we call upon Iran once again to comply fully with all its international obligations," he said in a statement on behalf of the Council.

The six countries which drafted the resolution - the five permanent UN Security Council members and Germany - spent Friday overcoming objections to some of the wording of the text from current Council members South Africa, Qatar and Indonesia.

"This resolution sends an unambiguous signal to the government and people of Iran... that the path of nuclear proliferation by Iran is not one that the international community can accept," Mr Jones Parry said after the vote.

Many countries, while supporting the resolution against Iran, warned of serious consequences given the already volatile situation in the region.

Iran has 60 days to comply with the resolution and suspend the uranium enrichment programme.

Iran's President Mahmoud Ahmadinejad had said that he wanted to join the Security Council session in order to address members before they voted on the new sanctions.

However, he did not attend because, Iranian officials said, the US delayed issuing visas. The US say the visas were issued and the Iranian leader was looking for an excuse not to come.

Bolton admits Lebanon truce block

A former top American diplomat says the US deliberately resisted calls for a immediate ceasefire during the conflict in Lebanon in the summer of 2006.

Former ambassador to the UN John Bolton told the BBC that before any ceasefire Washington wanted Israel to eliminate Hezbollah's military capability.

Mr Bolton said an early ceasefire would have been "dangerous and misguided".

He said the US decided to join efforts to end the conflict only when it was clear Israel's campaign wasn't working.

The former envoy, who stepped down in December 2006, was interviewed for a BBC radio documentary, The Summer War in Lebanon, to be broadcast in April.

Mr Bolton said the US was deeply disappointed at Israel's failure to remove the threat from Hezbollah and the subsequent lack of any attempt to disarm its forces.

Britain joined the US in refusing to call for an immediate ceasefire.

'Damn proud'

The war began when Hezbollah captured two Israeli soldiers, but it quickly escalated into a full-scale conflict.

BBC diplomatic correspondent Bridget Kendall says the US-UK refusal to join calls for a ceasefire was one of the most controversial aspects of the diplomacy.

At the time US officials argued a ceasefire was insufficient and agreement was needed to address the underlying tensions and balance of power in the region.

Mr Bolton now describes it as "perfectly legitimate... and good politics" for the Israelis to seek to defeat their enemy militarily, especially as Hezbollah had attacked Israel first and it was acting "in its own self-defence".

Mr Bolton, a controversial and blunt-speaking figure, said he was "damned proud of what we did" to prevent an early ceasefire.

Also in the BBC programme, several key players claim that, privately, there were Arab leaders who also wanted Israel to destroy Hezbollah.

"There were many not - how should I put it - resistant to the thought that the Israelis should thoroughly defeat Hezbollah, who... increasingly by Arab states were seen as an Iranian proxy," said UN special envoy Terje Roed Larsen.

More than 1,000 Lebanese civilians and an unknown number of Hezbollah fighters were killed in the conflict.

Israel lost 116 soldiers in the fighting, while 43 of its civilians were killed in Hezbollah rocket attacks.

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U.S. To Slash Palestinian Security Funds

(AP) The Bush administration will reduce by nearly half a proposed $86 million security assistance package to the Palestinian government to see that none of the money ends up with forces loyal to the radical Hamas movement.

As she prepares to visit the Middle East later this week, Secretary of State Condoleezza Rice said Wednesday she would soon send Congress a revised package that will fund only security elements loyal to moderate Palestinian President Mahmoud Abbas.

She did not provide specifics, but a senior U.S. official said the cut would amount to about $36 million, leaving only $50 million of the original package. The official, who was not authorized to speak publicly about details of the plan, spoke on condition of anonymity.

"I have reformulated the plan," Rice told lawmakers. "It will request less money, precisely because some of the money I would have requested I could not fully account for."

Rice said the revisions would strengthen a "firewall" to keep money away from Hamas, a partner in the new Palestinian unity government established last weekend.

State Department spokesman Sean McCormack said the revised proposal could be ready within days. He said all the assistance would be non-lethal and focused on improving efficiency and professionalism.

The 12 Palestinian security forces are notoriously fractured between factions controlled by Abbas and others by the Hamas-run Interior Ministry. They have unclear, often overlapping roles, poor discipline and have often engaged in deadly street battles.

Some in Congress have questioned the funding plan, saying money could end up with Hamas, which controls most of the Palestinian government but is considered a terrorist organization by the United States, European countries and Israel.

Testifying before a House subcommittee that controls foreign aid, Rice defended the assistance but said the inclusion of Hamas in the government posed a challenge because of its refusal to recognize Israel and reject violence to achieve its aims.

"Frankly, the formation of the Palestinian unity government has provided something of a challenge," she said. "The United States is not prepared to change its assistance policies toward this government because it does not recognize those foundational principles."

Rice said the U.S. remained committed to peace and would carry on contacts with Abbas, also known as Abu Mazen, and other moderates in his administration. She said her trip to the region, starting Friday, would demonstrate that.

"I think it is extremely important to show American commitment to a political horizon so that the Palestinian people can see their future rests with moderate forces like Abu Mazen, not with those forces that are extreme," Rice said.

Rice uses the phrase "political horizon" to refer to the long-range goal of creating a Palestinian state that would coexist with Israel.

"We will not suspend our contacts with those in the Palestinian government who have a record of fighting for peace," she said.

Her comments came a day after a senior U.S. diplomat met the Palestinian finance minister, a moderate, in the first direct U.S. talks with the Palestinian government since its weekend formation.

Israel has said it will not deal with the government and Tuesday's meeting was seen by many as a sign of a rift between Washington and its top Mideast ally.

Also Wednesday, the U.S. and its three partners in Mideast peace efforts �Ethe United Nations, the European Union and Russia �Ecalled on all parties to the Palestinian government to commit fully to peace.

"The commitment of the new government ... will be measured not only on the basis of its composition and platform, but also its actions," they said in a statement released two days after the group's last consultation. There was no explanation for the delay.

On the money front, the group as expected endorsed a three-month extension of a system that allows European nations to send money to

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US 'ready' for non-Hamas contacts

The US says it has decided that it will have contact with some of the new ministers in the Palestinian unity government, sworn in on Saturday.

A US consular official in Jerusalem said the US would maintain contact with ministers it feels it can work with.

US officials deny this amounts to a shift in policy, saying they will still not deal with Hamas.

Israeli PM Ehud Olmert urged the international community to have nothing to do with the new government.

Mr Olmert said the platform of the Palestinian government led by Ismail Haniya of Hamas included "some extremely problematic elements which can't be accepted by Israel or the international community".

Mr Olmert said the programme fell short of international demands to renounce violence, recognise Israel and accept past peace agreements.

The prime minister's policy statement was overwhelmingly endorsed by the Israeli cabinet on Sunday.

'Ending isolation'

The BBC's Matthew Price in Jerusalem says the international boycott of the Palestinian government appears to be weakening, with a number of countries saying they will deal with at least some of the ministers in the new cabinet.

He says sources at the European Union suggest they expect soon to start contacts with the non-Hamas members - a stance supported by the UK.

The previous cabinet consisted of Islamists from Hamas, which refuses to recognise Israel's right to exist, leading the US and EU to refuse to deal with the Palestinian government.

The new cabinet however includes parties other than Hamas.

The US said on Sunday it was ready to deal with Palestinian government ministers who were not members of Hamas, which is regarded as a terrorist group by Washington.

"Individuals who are not members of foreign terrorist organisations but who do hold office in the unity government, we do not rule out contact with those individuals," said Micaela Schweitzer-Bluhm, spokeswoman for the US consulate in Jerusalem.

It seems the US has decided to subtly change its stance towards the Palestinian government, our correspondent says.

By stating the US will deal with some ministers, Washington is bringing to an end the political isolation it helped to impose on the Palestinian government, our correspondent adds.

Israel had hoped to be able to persuade the international community to maintain its boycott of the Palestinian government, which Israel deems unacceptable.

'Implicit recognition'

On Sunday, the Palestinian cabinet held its first session in Gaza City and by video link in Ramallah.

The government pledged to tackle rampant lawlessness and end the crippling international aid freeze, imposed after Hamas won elections in January last year.

On Saturday, Prime Minister Ismail Haniya of Hamas said his goal was the creation of a Palestinian state that included lands occupied by Israel in 1967.

Our correspondent says that some see this as an implicit recognition of Israel's existence, in contrast with Hamas' past calls to eliminate the Jewish state.

Palestinian Authority President Mahmoud Abbas has appointed a senior official in his Fatah party, Mohammed Dahlan, as national security adviser.

Mr Dahlan is known to be a strong opponent of Hamas, and has been involved in frequent verbal clashes with its leaders.

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Iran condemns UN draft sanctions

Iranian President Mahmoud Ahmadinejad has vowed to continue his country's nuclear programme, as the UN stepped up pressure over the controversial work.

The UN Security Council has drafted a new sanctions package against Iran over its refusal to stop enriching uranium.

The package includes an arms embargo and economic penalties, tightening sanctions imposed last year.

Mr Ahmadinejad has made a formal request to attend the Security Council vote on the draft, due next week.

Official requests for visas had been made for an Iranian delegation made up of at least 38 people, said Richard Grenell, spokesman for the US mission to the UN.

Mr Ahmadinejad vowed to pursue his nation's nuclear future despite the sanctions, at a rally central Iranian town of Khatam.

"We have a nuclear fuel cycle. We will not give it up under pressure," Mr Ahmadinejad said.

"By holding the meetings you cannot block the Iranian nation's path."

On Thursday, he attacked the council as "illegitimate".

The Iranian ambassador to the UN's nuclear agency, the IAEA, described the threat of wider sanctions as counter-productive.

In a BBC interview, the ambassador, Ali Asgar Soltanieh, said the language of threat would never work and added there was no legal basis for the existing sanctions against Iran.

Council vote

The new sanctions package was agreed on Thursday by the five permanent Security Council members - Britain, France, the United States, China and Russia - plus Germany, after Tehran refused to stop enriching uranium, which can be a precursor to weapons manufacture.

The British ambassador to the UN has sent the draft to the 10 non-permanent Security Council members who were not included in the negotiations.

A vote on the draft is due next week.

Iran insists its nuclear programme is peaceful, but Western governments say it wants to develop nuclear weapons.

Last December, the Security Council voted unanimously to impose a first, limited set of sanctions against Iran for refusing to halt uranium enrichment.

The latest package includes extending a freeze of assets to those linked to Iran's nuclear and missile programmes and a ban on new grants and loans to the state.

South Africa's ambassador at the UN, Dumisani Kumalo, who chairs the council this month, warned on Thursday that the 10 non-permanent members now want to have their say.

"Nowhere in this process have they ever said that the five-plus-one would have the exclusive wisdom of producing [the draft resolution] and for us to rubber-stamp," he said.

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World Powers Agree On New Iran Sanctions

(AP) Ambassadors from six world powers reached agreement in principle Wednesday on a proposed new package of sanctions against Iran and expect to introduce a resolution to the United Nations Security Council on Thursday if their governments give a green light, the U.S. ambassador said.

Approval by the governments of the United States, China, Russia, Britain, France and Germany would be an important first step. The package would still need to be considered by the 10 non-permanent members of the Security Council who have not been part of the negotiations.

Nonetheless, an agreement by the five veto-wielding permanent members of the council and Germany would be a strong signal to the other council members of the unity of the key nations on the U.N.'s most powerful body �Eand a sign that they want to send a united message to Iran to suspend uranium enrichment.

"We have an agreement in principle based on some additional changes that were introduced and presented today by some delegations," acting U.S. Ambassador Alejandro Wolff said. "So it's new elements and understandings that need confirmation from capitals. But it is a package approach that, if approved by capitals, would be essentially the way forward in a resolution."

Russia's U.N. Ambassador Vitaly Churkin said "by and large it has been agreed."

"There are some among us ... who still want to double-check with the capitals on some of the details of this deal," Churkin said. "I assume as they double-check, they will get a positive response from the capitals, and they expect that this is going to be the case, too."

In December, the Security Council voted unanimously to impose limited sanctions against Iran for its refusal to freeze uranium enrichment. It ordered all countries to stop supplying Iran with materials and technology that could contribute to its nuclear and missile programs and to freeze assets of 10 key Iranian companies and 12 individuals related to those programs.

The council said it would consider further nonmilitary sanctions if Iran refused to suspend enrichment. Iran's response was to accelerate its enrichment program.

The modest package of new measures agreed to by ambassadors from the six countries includes an embargo on Iranian arms exports and an asset freeze on more individuals and companies associated with Tehran's nuclear and missile programs, council diplomats said.

The new resolution would also call on all U.N. member states to exercise "vigilance and restraint" on arms imports �Eand on the entry or transit through their territory of Iranians subject to the asset freeze, a council diplomat said.

It would also call on governments to make no new commitments "of grants, financial assistance, or concesssional loans to the government of Iran," the diplomat said, speaking on condition of anonymity because the text has not been circulated.

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Iran president seeks UN audience

Iranian President Mahmoud Ahmadinejad wants to address the UN Security Council to defend his country's controversial nuclear programme.

Iran has defied UN demands to halt uranium enrichment, which Western nations say is part of a programme to develop a nuclear arsenal.

Iran maintains that the work is intended to produce nuclear energy.

Mr Ahmadinejad has addressed the UN General Assembly twice since 2005, but never the Security Council.

Invite-only

"The president of the Islamic Republic of Iran intends to attend a UN Security Council meeting to be held on Iran's nuclear case in order to defend the rights of the Iranian nation in exploiting peaceful nuclear energy," Iranian state TV quoted government spokesman Gholam Hossein Elham as saying.

In December, the Security Council imposed sanctions on Iran over its refusal to halt uranium enrichment.

The five permanent council members - the US, France, Britain, China and Russia - as well as Germany are currently in talks over a resolution to tighten those sanctions as Iran continues to defy the ban.

An address by Mr Ahmadinejad is unlikely to appease the international community, says the BBC's Frances Harrison in Tehran.

Mr Ahmadinejad has been one of the fiercest opponents of western pressure to suspend the nuclear work, comparing the programme to an unstoppable train with no brakes or reverse gear.

Such rhetoric has been criticised by some in Iran for undermining Iranian negotiators' efforts to seek a compromise solution, our correspondent says.

Any bid by Iran to attend a Security Council meeting would have be approved by in advance.

But it would be hard to reject any application by Mr Ahmadinejad, the current president of the Security Council, South Africa's Ambassador Dumisani Kumalo said to Associated Press news agency.

"I would be surprised if they said they don't want to hear him," Mr Kumalo said.

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Report warns against Iran attack

Military strikes against Iran could speed Tehran's development of nuclear weapons, according to a UK think tank.

A report by the Oxford Research Group says military action could lead Iran to change the nature of its programme and quickly build a few nuclear arms.

Iran denies Western claims it is trying to build weapons, saying its nuclear programme is entire peaceful.

The study comes as the UN nuclear watchdog is set to discuss the nuclear programmes of Iran and North Korea.

In February, Iran ignored a deadline set by the UN Security Council to stop enriching uranium.

A report by the International Atomic Energy Agency (IAEA) said Iran was instead expanding the programme.

Enriched uranium is used as fuel for nuclear reactors, but highly enriched uranium can be used to make nuclear bombs.

Western powers have threatened to expand sanctions on Iraq. These could include travel bans on Iranian officials associated with nuclear and missile programmes.

The US has not ruled out using force but says it wants to give diplomacy a chance.

'Fast-track programme'

The Oxford Research Group report is written by nuclear scientist and arms expert Frank Barnaby.

"If Iran is moving towards a nuclear weapons capacity it is doing so relatively slowly, most estimates put it at least five years away," he says.

Mr Barnaby adds that an attack on Iranian nuclear facilities "would almost certainly lead to a fast-track programme to develop a small number of nuclear devices as quickly as possible".

He says it "would be a bit like deciding to build a car from spare parts instead of building the entire car factory".

The BBC's diplomatic correspondent Jonathan Marcus says that with two US navy aircraft carrier strike groups in the Gulf region and US spokesmen refusing to rule out force, this study is timely and highlights what most air power experts have been saying for some time.

IAEA meeting

An operation to destroy Iran's nuclear facilities would be neither brief nor limited in scope, our correspondent says. Multiple targets would have to be hit, and the outcome would be far from clear, especially if Iran has hidden facilities unknown to US intelligence.

But he points out that this is not a military study - written by a noted atomic scientist and peace campaigner, it looks more at the aftermath of a potential US attack and questions the central rationale for any military operation.

On Monday the IAEA board of governors is due to discuss both Iran and North Korea.

The BBC's Bethany Bell in Vienna says that while there is little progress on the Iranian nuclear file there has been movement on North Korea.

Last month Pyongyang agreed to take the first steps towards nuclear disarmament, as part of a deal reached during talks in Beijing.

Under the agreement, North Korea promised to shut down its main nuclear reactor in return for fuel aid.

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'Progress' in Iran sanction talks

The US has reported progress in talks with major powers on imposing further sanctions against Iran over its refusal to halt uranium enrichment.

US state department officials said most of the issues had been resolved during a conference call between the US, UK, Germany, China, Russia and France.

Ambassadors could start drafting a new UN resolution next week, they said.

The UN nuclear watchdog confirmed last week that Iran had ignored a deadline to suspend nuclear activities.

Thursday's telephone conference call followed talks between diplomats from the six key nations in London earlier in the week.

"They had a good productive discussion during which they made progress in agreeing on the elements of a resolution," the US state department said in a statement.

The countries have agreed to hold a further conference call on Saturday and their UN ambassadors "could begin drafting the text of a resolution next week".

New tougher sanctions could include travel bans on Iranian officials individuals associated with nuclear and missile programmes.

Claims denied

Iranian President Mahmoud Ahmadinejad has said his country will not go back on its nuclear programme.

Iran denies Western claims it is secretly trying to build nuclear arms, saying its nuclear programme is for peaceful, energy-producing purposes.

The UN Security Council imposed sanctions on Iran in December, setting a 60-day deadline for it to stop enriching uranium.

But a report last week by the International Atomic Energy Agency (IAEA) said that Iran was instead expanding the programme.

Enriched uranium is used as fuel for nuclear reactors, but highly enriched uranium can be used to make nuclear bombs.

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Cheney renews US warning on Iran

US Vice-President Dick Cheney has renewed a warning that the use of force could be an option if Iran continues to defy the West over uranium enrichment.

Mr Cheney, speaking in Australia, said diplomacy was the preferred course.

But in a newspaper interview he backed US Senator John McCain's view that the only thing worse than a military clash would be an Iran with nuclear arms.

Iran insists that its nuclear programme is for peaceful purposes only.

Mr Cheney, a noted hawk in the Bush administration, endorsed Mr McCain's stance in an interview with The Australian daily newspaper.

And speaking at a joint news conference with Australian Prime Minister John Howard, he also spoke of US concerns about Tehran's nuclear ambitions and warned that "all options are on the table" in terms of how the US would respond.

"They have made some fairly inflammatory statements," he said. "They appear to be pursuing the development of nuclear weapons."

Mr Cheney spoke of concern at Iran's "fairly aggressive" role in the Middle East, and its flouting of a UN deadline to stop uranium enrichment.

Permanent UN Security Council members and Germany will meet on Monday to discuss further sanctions against Iran following its decision to ignore last Thursday's deadline.

Resistance vow

On Friday, Iranian President Mahmoud Ahmadinejad said Iran will defend its nuclear programme to the end, and must not show weakness "in front of the enemy".

"The Iranian people are vigilant and will defend all their rights to the end," Iranian news agency Isna quoted Mr Ahmadinejad as saying, at a rally in northern Iran.

"If we show weakness in front of the enemy the expectations will increase but if we stand against them, because of this resistance they will retreat."

The IAEA concluded in a report on Thursday that Iran was expanding rather than halting its enrichment programme, defying a UN resolution of December 2006.

Iran says the UN call for it to stop uranium enrichment is unacceptable as it has no legal basis.

Tehran denies Western claims it is secretly trying to build nuclear arms, saying its nuclear programme is for purely peaceful, energy-producing purposes.

While enriched uranium is used as fuel for nuclear reactors, highly enriched uranium can also be used to make nuclear bombs.

Australia is a key member of the US-led coalition in Iraq, with about 1,400 troops in and around the country.

Speaking after his meeting with Mr Cheney, Mr Howard warned of the possibility of Iran's influence in the Middle East region growing if coalition troops are pulled out of Iraq too soon.

He told reporters that instability in Iraq resulting from an early coalition withdrawal could tip the regional power balance in Iran's favour, with disastrous consequences:

"I think Iran would benefit enormously from that and that would be to many in the Middle East, not just the Israelis, that would be a nightmare scenario."

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Iran defiant on nuclear programme

Iran's President Mahmoud Ahmadinejad has rejected international calls for Tehran to suspend uranium enrichment, a day before a UN deadline runs out.

He said Iran would only do so if states seeking the suspension stopped producing nuclear fuel themselves.

Mr Ahmadinejad said he wanted talks on his nation's nuclear programme, but only if no pre-conditions were imposed.

Iranian nuclear negotiator Ali Larijani said after talks at the UN nuclear agency no solution would come by force.

Mr Larijani said at the talks at the International Atomic Energy Agency (IAEA) in Vienna: "Anybody interested in non-conventional or illogical, irrational [moves] would definitely receive an appropriate response."

But he said Iran was looking "for ways and means to start negotiations".

Speaking on the issue on a visit to Turkey, Iran's Foreign Minister Manouchehr Mottaki echoed the view.

"The way to solve problems through diplomacy is dialogue," he said.

Details have emerged of US contingency plans for air strikes on Iran.

The US insists it is not planning to attack, and is trying to use diplomacy to persuade Tehran to stop uranium enrichment.

Tehran insists its programme is for civil use only, but Western countries suspect Iran is trying to build nuclear weapons.

Iran will face sanctions if it fails to observe Wednesday's UN Security Council deadline on enrichment.

US rejection

IAEA head Mohamed ElBaradei has warned in a UK media interview of the speed at which Iran's nuclear work is advancing.

He is due to report to the UN Security Council this week on whether Iran has met UN demands that it halt uranium enrichment by 21 February.

If it does not, and if the International Atomic Energy Agency confirms this, the council's resolution says that further economic sanctions will be considered.

In a speech to crowds in northern Iran, broadcast on state television, Mr Ahmadinejad called on Western nations to stop their own nuclear enrichment programmes if they wanted Iran to do the same.

He said: "They tell us 'come and negotiate on Iran's nuclear issue but the condition is to stop your activities.

"We have said that we want negotiations and talks, but negotiations under just conditions.'"

The US dismissed the call to close down Western production facilities.

"Do you believe that's a serious offer?" said White House spokesman Tony Snow.

Last year Iran resumed uranium enrichment - a process that can make fuel for power stations or, if greatly enriched, material for a nuclear bomb.

Incentives urged

Mr Larijani said his country was willing to give reassurances that no nuclear material would be diverted to a weapons programme but he remained defiant on uranium enrichment.

Mr ElBaradei told the Financial Times newspaper Iran could be only six months away from being able to enrich uranium on an industrial scale.

But he said "there's a big difference between acquiring the knowledge for enrichment and developing a bomb".

Mr ElBaradei also suggested the use of military force against Iran "would be catastrophic" and urged the Security Council to look at incentives as well as sanctions to bring Tehran back to the table.

The US has been pushing hard for the international community to take tough action should Iran not meet the council's demands.

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US 'Iran attack plans' revealed

US contingency plans for air strikes on Iran extend beyond nuclear sites and include most of the country's military infrastructure, the BBC has learned.

It is understood that any such attack - if ordered - would target Iranian air bases, naval bases, missile facilities and command-and-control centres.

The US insists it is not planning to attack, and is trying to persuade Tehran to stop uranium enrichment.

The UN has urged Iran to stop the programme or face economic sanctions.

But diplomatic sources have told the BBC that as a fallback plan, senior officials at Central Command in Florida have already selected their target sets inside Iran.

That list includes Iran's uranium enrichment plant at Natanz. Facilities at Isfahan, Arak and Bushehr are also on the target list, the sources say.

Two triggers

BBC security correspondent Frank Gardner says the trigger for such an attack reportedly includes any confirmation that Iran was developing a nuclear weapon - which it denies.

Alternatively, our correspondent adds, a high-casualty attack on US forces in neighbouring Iraq could also trigger a bombing campaign if it were traced directly back to Tehran.

Long range B2 stealth bombers would drop so-called "bunker-busting" bombs in an effort to penetrate the Natanz site, which is buried some 25m (27 yards) underground.

The BBC's Tehran correspondent France Harrison says the news that there are now two possible triggers for an attack is a concern to Iranians.

Authorities insist there is no cause for alarm but ordinary people are now becoming a little worried, she says.

Deadline

Earlier this month US officials said they had evidence Iran was providing weapons to Iraqi Shia militias. At the time, Iranian President Mahmoud Ahmadinejad said the accusations were "excuses to prolong the stay" of US forces in Iraq.

Middle East analysts have recently voiced their fears of catastrophic consequences for any such US attack on Iran.

Britain's previous ambassador to Tehran, Sir Richard Dalton, told the BBC it would backfire badly by probably encouraging the Iranian government to develop a nuclear weapon in the long term.

Last year Iran resumed uranium enrichment - a process that can make fuel for power stations or, if greatly enriched, material for a nuclear bomb.

Tehran insists its programme is for civil use only, but Western countries suspect Iran is trying to build nuclear weapons.

The UN Security Council has called on Iran to suspend its enrichment of uranium by 21 February.

If it does not, and if the International Atomic Energy Agency confirms this, the resolution says that further economic sanctions will be considered.

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Rice set for key Mid-East summit

The US secretary of state is to host three-way talks in Jerusalem with the Israeli and Palestinian leaders.

Condoleezza Rice has said she hopes to explore prospects for peace with Israeli PM Ehud Olmert and Palestinian leader Mahmoud Abbas.

But the summit is likely to be overshadowed by the formation of a new Palestinian unity government.

Mr Olmert has said Israel and the US will boycott any Palestinian government which does not recognise Israel.

Ms Rice said the US would reserve judgement until the proposed national unity government had been formed.

Hamas, which would be the largest group in the new government, has refused to recognise Israel's right to exist - a key demand of Western countries boycotting the Palestinian Authority (PA).

Rival factions Hamas and Fatah came to a power-sharing agreement earlier this month, bringing to an end weeks of internal fighting.

Boycott threat

The BBC's Bethany Bell in Jerusalem says that there is little optimism ahead of the summit, the first time Israeli and Palestinian leaders will have sat down together with a senior US official since June 2003.

Condoleezza Rice says she wants to explore the prospects for peace but has admitted it is a complicated time, our correspondent says.

Ms Rice spent more than two hours in talks with Mr Abbas in the West Bank town of Ramallah on Sunday. She then held talks in Jerusalem with Mr Olmert.

The US and Israel have stressed that any future Palestinian administration must recognise Israel, renounce violence and commit to previous agreements between the PA and Israel.

Speaking on the eve of the summit, Mr Olmert said he and US President George W Bush had agreed to boycott the unity government if this was not the case.

Mr Olmert said a Palestinian government that failed to accept the conditions laid down by the quartet of the US, EU, Russia and UN "cannot receive recognition and there will not be co-operation with it".

Prospects poor

The EU, US and Russia have maintained an economic boycott of the Palestinian government since Hamas won legislative elections in January last year.

Meanwhile, factional fighting between Fatah and Hamas has claimed more than 90 Palestinian lives since December.

Former Palestinian Prime Minister Ismail Haniya of Hamas now has five weeks to get a new cabinet accepted by the Hamas-dominated parliament.

But if Hamas maintains its position regarding Israel, there is concern that any talks brokered by Washington will be futile, correspondents say.

The fact that no news conference has been scheduled after the three-way summit suggests expectations are low, they suggest.

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US Democrats warn Bush on Iran

Top Democrats in the US Congress have warned President George W Bush that he does not have the authority to go to war with Iran.

Washington is in dispute with Iran over its nuclear programme, and senior US officials have accused it of supplying weapons to Shia insurgents in Iraq.

The warning came ahead of a House of Representatives vote likely to condemn the recent surge of US troops in Iraq.

The Senate is due to vote on the troop plan in an unusual Saturday session.

Iran rhetoric

There has been concern recently over the president's rhetoric on Iranian activity in Iraq.

House of Representatives speaker Nancy Pelosi acknowledged Mr Bush has said he wants a diplomatic solution to the rift with Iran, saying: "I take him at his word."

But she also said that Congress should assert itself "and make it very clear that there is no previous authority for the president, any president, to go into Iran".

Meanwhile, the House of Representatives is on Friday expected to vote on a non-binding resolution opposing Mr Bush's decision to send an extra 21,500 US troops to Iraq to try to restore stability.

The vote comes after days of fierce debate on the issue in what has been the first full debate in the House since the Democrats took control of Congress in November.

Double threat

The resolution states that the House "will continue to support and protect" troops in Iraq but that it "disapproves" of the troop increase.

The Senate is holding its own vote - in an unusual Saturday session - on whether to begin debate on the resolution.

Previous Senate attempts to debate the anti-troop surge resolution have been met with delaying tactics from Republican members.

Mr Bush faces the possibility that both chambers of Congress will repudiate his Iraq policy says the BBC's Justin Webb in Washington.

Although the upcoming Congressional votes are non-binding, the president needs the legislators to support his $93bn (�48bn) emergency troop funding measure.

"Our men and women in uniform are counting on their elected leaders to provide them with the support they need to accomplish their mission," he said on Thursday.

"Republicans and Democrats have a responsibility to give our troops the resources they need."

But in the debate, Ms Pelosi said there should be "no more blank cheques".

Republican House Minority Leader John Boehner criticised the Democrats' attempts to derail Mr Bush's plans for Iraq.

"While American troops are fighting radical Islamic terrorists thousands of miles away," he said, "it is unthinkable that the United States Congress would move to discredit their mission, cut off their reinforcements and deny them the resources they need to succeed and return home safely".

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US 'to take 7,000 Iraq refugees'

The US is to take in another 7,000 Iraqi refugees over the next year amid rising international concern over those fleeing the insurgency, officials said.

The number represents a huge increase on the 463 refugees the US has taken in since the four-year-old war began.

Secretary of State Condoleezza Rice has been outlining the plan in talks with the UN High Commissioner for Refugees.

The UN estimates that up to 50,000 Iraqis flee each month and that 3.8m have left since the war started.

UN appeal

Most of the refugees have headed for Syria and Jordan. But both countries have tried to cut the influx, narrowing options for those fleeing.

The new US plan was revealed by state department officials ahead of a formal announcement on Wednesday.

The 7,000 refugees would move to the US from countries they have already reached.

State Department spokesman Sean McCormack said the figures was a "target" not a ceiling.

The plan, outlined by Ms Rice to UN refugee chief Antonio Guterres, would also afford special treatment to those in Iraq who were at risk of sectarian attack through providing the US with information.

The UN has called for $60m (�30.5m) from nations for a global resettlement programme. The US is expected to pledge $18m.

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Iran 'does not fear attack by US'

Iran's President Mahmoud Ahmadinejad has said his country does not fear the US military and that any attack would be "severely punished".

Mr Ahmadinejad made the comments in a rare US television interview on Monday.

He was speaking after US officials said they had evidence Iran was providing weapons to Shia militias in Iraq who were attacking the US military.

Mr Ahmadinejad said Iran "shied away from all conflict" and that no peace would come with foreign troops in Iraq.

'Baseless propaganda'

In the interview with ABC Television in Tehran, Mr Ahmadinejad was asked if he feared a US military attack.

"Fear? Why should we be afraid?" he asked.

Mr Ahmadinejad said he thought the possibility of such an attack was "very low".

"We think there are wise people in the US who would stop such illegal actions," he said.

And he stressed that Iran's position was clear, saying, "Anyone who wants to attack our country will be severely punished."

The Bush administration denies it is planning to invade Iran but has indicated it is willing to use military force to deal with any Iranian interference inside Iraq.

Mr Ahmadinejad was asked repeatedly about Iran supplying weapons to Shia militias.

He said the accusations were "excuses to prolong the stay" of US forces and that they would need a "court to prove the case".

"The US is following another policy, trying to hide its defeats and failures and that's why it is pointing its fingers to others," Mr Ahmadinejad said.

"There should be no foreigners in Iraq. And then you see that you have peace in Iraq," he said.

Earlier Iranian Foreign Ministry spokesman Mohammad Ali Hosseini had called the US allegations baseless propaganda.

He said Washington had a long history of fabricating evidence.

In the US, some Democrats also expressed concerns about levelling such accusations against Tehran.

Democratic Senator Chris Dodd said the Bush administration had tried to falsify evidence before, and it would be a mistake to create a premise for future military action.

On Monday, White House spokesman Tony Snow reiterated that the administration believed the weaponry was coming directly with Iranian government approval.

And a spokesman for UK Prime Minister Tony Blair said: "We keep finding the weaponry which we don't believe to be sourced from anywhere else."

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US accuses Iran over Iraq bombs

The US military has accused the "highest levels" of Iran's government of supplying increasingly sophisticated roadside bombs to Iraqi insurgents.

Senior defence officials told reporters in Baghdad that the bombs were being used to deadly effect, killing more than 170 US troops since June 2004.

The weapons known as "explosively formed penetrators" (EFPs) are capable of destroying an Abrams tank.

US claims the bombs were smuggled from Iran cannot be independently verified.

The US officials, speaking off camera on condition of anonymity, said EFPs had also injured more than 620 US personnel since June 2004.

They said US intelligence analysts believed the bombs were manufactured in Iran and secretly sent to Iraqi Shia militants on the orders of senior officials in Tehran.

"We assess that these activities are coming from the senior levels of the Iranian government," one official said.

He pointed the finger at Iran's elite al-Quds brigade, a unit of the Revolutionary Guards, saying that a senior commander from the brigade had been one of five Iranians seized by US forces in a raid in the Iraqi town of Irbil in January.

'Flushing the evidence'

The defence official said that when the men were captured they had been tying to flush documents down a toilet and that one of them had been contaminated with explosives residue.

They had also reportedly shaved their heads to alter their appearance - bags of their hair were found during the raid.

Tehran has denied that the captured Iranians are members of the brigade, which Iran does not officially recognise, but which observers say reports directly to Ayatollah Ali Khamanei.

The US officials also referred to a raid in Iraq in December in which the security forces said they found inventory sheets of weaponry and equipment that had been brought into Iraq.

The US has claimed in the past that Iranian weapons were being used in Iraq, but it has never before accused Iranian government officials of being directly involved.

Tehran has repeatedly denied any involvement.

Weapons on display

The US officials said that as well as bomb-making technology Iran was supplying Shia groups in Iraq with money and military training.

The BBC's Jane Peel attended the briefing in Baghdad, at which all cameras and recording devices were banned.

Examples of the allegedly smuggled weapons were put on display, including EFPs, mortar shells and rocket propelled grenades which the US claims can be traced to Iran.

"The weapons had characteristics unique to being manufactured in Iran... Iran is the only country in the region that produces these weapons," an official said.

Truck bomb

In the latest violence in Iraq , at least 15 people were killed when a suicide bomber drove a vehicle laden with explosives into a police station near the town of Tikrit.

At least 25 people were injured in the attack on the station in Adwar, about 175km (110 miles) north of Baghdad.

The casualties are reported to include prisoners held in cells at the police station, as well as civilian visitors.

Two US soldiers were killed by small-arms fire in Baghdad and north-east of the capital, the US military said.

Separately, the US military said it had no information on a helicopter that residents said came down near the town of near Taji, about 20km (12 miles) north of Baghdad.

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Tehran warns US against attacks

Iran will strike against US interests worldwide if it is attacked, the country's supreme leader Ayatollah Ali Khamenei has warned.

"The enemies know well that any aggression will lead to a reaction from all sides," he said.

Washington accuses Tehran of secretly trying to develop a nuclear weapon, and has not ruled out using military force.

The Iranians insist their nuclear programme is purely civilian and aimed at meeting their energy needs.

The BBC's Frances Harrison in Tehran says Ayatollah Khamenei was defiant about the prospect of a possible American military strike.

The supreme leader said he hoped nobody would risk attacking Iran because the nation would stand up for itself and only become stronger militarily and economically.

Iran also denounced remarks by UK Prime Minister Tony Blair that Tehran was determined to stir up maximum trouble in the Middle East.

Iranian foreign ministry spokesman Mohammed Ali Hosseini said Mr Blair's comments were "insolent" and "undiplomatic".

Mr Hosseini said Britain had played a key role in sabotaging talks on the nuclear issue in the past and had followed the US and Israel in imposing destructive wars on the Middle East.

War games

Another key Iranian figure, ex-President Hashemi Rafsanjani, has also warned against a strike, saying it would carry a heavy cost for those who tried it.

The warnings came as Iran's navy and air force conducted war games.

Iran said it had successfully test-fired a land-to-sea missile with a range of 350km (220 miles).

Tehran said it had also tested a new Russian-made air defence system.

Officials have refused to confirm whether the system has been deployed around nuclear sites.

At the weekend ambassadors from non-aligned countries were allowed to visit an Iranian nuclear facility, on what was billed as a transparency visit.

The UN's chief nuclear inspector is to report on Tehran's compliance with the UN Security Council's demands later this month.

In December the UN imposed limited sanctions on Iran for refusing to suspend uranium enrichment.

Source: Iran Assembled Nuclear Devices

�

(AP) Technicians have assembled two small uranium enrichment units at Iran's underground Natanz complex, diplomats and officials said Monday. The move underscored Tehran's defiance of a U.N. Security Council ban on the program, which could be used to create nuclear arms.

Speaking separately �Eand demanding anonymity because their information was confidential �Ea diplomat accredited to the Vienna-based International Atomic Energy Agency and a U.S. official said that two separate "cascades" of 164 centrifuges each had been set up in recent days.

The likely next step was "dry testing" �Erunning the linkups without uranium gas inside �Eto be followed by spinning and re-spinning the gas. The process, known as enrichment, can be used to fuel nuclear power plants. But at higher levels of enrichment the material can be used in the fissile core of nuclear warheads.

The news had been widely expected. Both the Iranian leadership and the Vienna-based IAEA, which is the U.N.'s nuclear watchdog agency, had said recently that Tehran would start assembling the machines this month.

Comments last week by Iranian President Mahmoud Ahmadinejad signaled that Iran would begin the installation before Feb. 11 �Ethe final day of nationwide celebrations in memory of the 1979 Islamic revolution. He has also called people to the streets that day to show support for the nuclear program.

In another sign that Tehran was forging ahead with plans to create a large-scale "pilot plant" �E3,000 centrifuges running in series �EU.N. officials late last week told the AP that that piping, cables, control panels and air conditioning systems had been installed at Natanz to support such a number of machines.

Still, with Tehran under U.N. sanctions because of its refusal to give up the program, any decision by Iran to start assembling the so-called "cascades" ups the ante in Tehran's confrontation with the United States and other nations that believe it is trying to make nuclear weapons.

Iran says it wants to use the technology to generate nuclear power, but the U.S. and other nations believe Iran is intent on using the process to develop weapons.

A 3,000-centrifuge operation �Ethe cornerstone of what the Iranians say will be a large-scale complex of 54,000 centrifuges �Ecould be used to produce fissile material for two bombs a year.

IAEA officials had no comment. A U.N. official familiar with the agency's probe of Tehran's nuclear program said, however, that when IAEA inspectors last visited Natanz last week, no cascades had been assembled.

The U.S. State Department did not confirm or deny the reports Monday, saying only that it would push for "incremental" U.N. Security Council sanctions against Iran if Tehran authorities continue to ignore council demands for suspension of the country's uranium enrichment program.

Spokesman Sean McCormack said that Iran appears to be continuing "down the path of isolation."

The U.N. Security Council, which last month agreed on limited sanctions targeting people and programs linked to Iran's nuclear and missile programs, has threatened to impose further sanctions on Iran later this month if it continues to refuse to roll back its program.

Even if Tehran successfully installs 3,000 centrifuges, experts estimate it would still take several years for all of them to be running smoothly.

There has been speculation Tehran might be content to install several cascades and then temporarily freeze its activities at Natanz, hoping to be able to negotiate with a strengthened hand.

But a senior diplomat who represents his country at the IAEA said recent conversations with Iranian officials showed no signs of such a strategy.

"We declared we're going to have 3,000 and we are going to have 3,000," he said, paraphrasing an Iranian official on Tehran's plans for Natanz this year.

The International Institute for Strategic Studies, a London-based think tank, last week estimated that Iran was two to three years away from having the capacity to build a nuclear weapon. The head of U.S. national intelligence, John Negroponte, has spoken of a four-year period.

Even before starting subterranean work, Iran already had two experimental cascades of 164 centrifuges each, as well as several partially assembled cascades, all above ground at Natanz. They have been the subject or regular inspections by IAEA teams, although their authority has been restricted for a year, since Tehran withdrew broader inspecting rights after its nuclear file was referred to the U.N. Security Council.

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Hezbollah leader hits out at Bush

The leader of Hezbollah, Sheikh Hassan Nasrallah, has accused the US of ordering Israel to start last year's conflict with the militant group.

Addressing a huge crowd in the Lebanese capital, Beirut, Sheikh Nasrallah also accused the US and Israel of trying to foment civil wars in the region.

It comes amid moves by Hezbollah to oust Lebanon's pro-Western government.

Seven people died last week in street clashes between Hezbollah's supporters and their political opponents.

Sheikh Nasrallah's remarks came a day after US President George W Bush implicitly accused Hezbollah of stirring up violence in Lebanon, saying "those responsible for creating chaos must be held to account".

Addressing tens of thousands of supporters who had gathered to mark the end of the Shia mourning period of Ashura, Sheikh Nasrallah said it was the US which was to blame.

"The one who fomented chaos in Lebanon, who destroyed Lebanon, who killed women and children, old and young in Lebanon, is George Bush and [Secretary of State] Condoleezza Rice, who ordered the Zionists to launch the war on Lebanon," he said.

'Punish Bush'

Hezbollah and Israel fought a fierce 34-day conflict in July and August, after Hezbollah killed and captured several Israeli soldiers.

"The one who must be punished, who must be tried, is the one who ordered the launching of war on Lebanon," Sheikh Nasrallah told the crowd.

"George Bush wants to punish you because you resisted, he wants to punish you because you won."

He also accused Mr Bush and Israel of "trying to defeat resistance movements in Lebanon, Palestine and Iraq by starting civil wars".

"Lebanon will not be defeated. We will not allow it to be invaded... we have proved that we are capable of defeating [invaders]," he said.

About 1,000 Lebanese were killed in last summer's conflict, mostly civilians in Israel's vast bombardment of the county and land invasion in the south. Lebanon's infrastructure also suffered extensive damage.

The Israeli army lost 116 soldiers. Forty-three Israeli civilians were also killed by more than 4,000 Hezbollah rocket attacks.

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Beirut under curfew after clashes

The Lebanese army has imposed a dusk-to-dawn curfew in the capital, Beirut, after clashes between students from rival political factions.

Four people were killed and more than 150 injured, police said.

It comes two days after three people died in clashes amid a general strike called by the militant Hezbollah group.

In Paris, foreign donors pledged $7.6bn (�3.5bn) to help Lebanon recover from last year's conflict between Hezbollah and Israel and a huge public debt.

The biggest pledges came from Saudi Arabia, the US, France and the EU.

Lebanese Prime Minister Fouad Siniora, who attended the conference, said he was "really pleased with the level of financial support".

However, the BBC's Caroline Wyatt in Paris says the Lebanese government had to promise to implement potentially unpopular economic reforms, which could create further difficulties with the Hezbollah-led opposition.

Campus brawl

The latest violence started as a row between Sunni supporters of the government and Shia opponents at Beirut's Arab University but it flared rapidly from a student fist fight to violent clashes between local supporters of the two sides.

Club-wielding students hurled rocks and other missiles at each other as fighting spread across the capital.

Television pictures showed youths moving through the streets, brandishing makeshift weapons and vandalising cars.

As the row escalated supporters of the Shia Hezbollah movement called in help, and residents from the local Sunni neighbourhood also joined in.

Armoured vehicles full of soldiers moved in, firing shots in to the air, trying to keep the two groups apart.

The clashes erupted in a volatile area where the mainly Sunni population overlaps with Shia neighbourhoods.

Gunfire continued to echo in the area after nightfall but police later said order had been restored.

The clashes reinforced fears raised by the general strike on Tuesday that a major flare-up of civil strife could break out if urgent action is not taken to defuse the explosive political situation, reports the BBC's Jim Muir in Beirut.

Hezbollah, which is backed by Syria and Iran, has led mass demonstrations and strike action since the beginning of December to try to force Mr Siniora's pro-Western government to resign.

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Thousands at Fatah's Gaza rally

The Palestinian faction Fatah has staged a large and highly-charged political rally in Gaza.

The event, the largest of its kind for years, came at a time of extreme tension between Fatah and its rival, the Hamas movement.

About 30 people have been killed in clashes over the past month.

Many thousands of Fatah's followers filled Gaza City's main stadium, and gave a hero's welcome to Fatah's strongman in Gaza, Mohammed Dahlan.

He focused his anger on an armed Hamas unit called the "executive force".

In a particularly violent episode a few days ago, it stormed the home of a very senior Fatah security man and killed him and his bodyguards.

Mr Dahlan told the crowd that this had been a turning point. He called the members of the Hamas force murderers and said that they would not go unpunished.

On Saturday, the Fatah-controlled presidency declared the executive force to be illegal, but Hamas has rejected the charge and responded by announcing plans to strengthen the unit.

And in an obvious reference to Fatah, a senior Hamas militant has said that blame for the bloodshed in Gaza lies at the door of, as he put it, those who have received weapons from America.

The US is keen to bolster the more moderate Fatah faction, and there have been recent reports of American involvement in the shipping of guns to the Fatah-controlled security forces.

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Israel to weigh Gaza truce stance

Israeli Prime Minister Ehud Olmert is to meet senior ministers later in the day to discuss a month-long Gaza ceasefire after renewed rocket attacks.

A rocket fired from the Gaza Strip on Tuesday injured two teenage Israeli boys in the southern town of Sderot.

Defence Minister Amir Peretz said Israel must reconsider its "restraint".

The Palestinian Islamic Jihad group said it carried out the Sderot attack in retaliation for recent Israeli military raids in the West Bank.

Army post

Rocket attacks have been increasing in recent days. The Israeli military said seven in all were fired on Tuesday.

One rocket struck a street in Sderot, critically injuring one teenager and seriously injuring another, Israeli media said.

After the attack, a spokesman for Mr Olmert, David Baker, warned Israel's "restraint will not continue indefinitely while Israelis continue to be attacked".

The 26 November truce was called to halt five months of violence that began after militants killed two Israeli soldiers and captured another in an attack on an army post.

Analysts say Mr Olmert must weigh calls from Israeli hardliners for a response to the dozens of rockets that have been fired since the truce began with appeals from the US and Europeans to maintain the ceasefire.

Israel has killed more than a dozen Palestinians, mainly gunmen in the West Bank, since the truce.

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Archbishop fears for Middle East

The Archbishop of Canterbury, Rowan Williams, has given a Christmas Day sermon urging people not to forget the tragedies of the Holy Land.

In an address inspired by a recent visit to the region, he said both Israelis and Palestinians feared being ignored as the world looked elsewhere.

He voiced concern over an "almost total absence" of belief in the region that a political solution can be found.

The archbishop delivered his sermon at Canterbury Cathedral in Kent.

He said he was inspired by a medical director in Bethlehem - the West Bank town where Christians believe Jesus was born - who told him: "The poorest deserve the best".

That slogan was underlined by the Christmas message, he said.

Dr Williams told the congregation: "The tragedies of the Holy Land are not the problems of exotic barbarians far away; they are signs of the underlying tragedies that cripple all human life, individual and collective.

"Every wall we build to defend ourselves and keep out what may destroy us is also a wall that keeps us in and that will change us in ways we did not choose or want.

"Every human solution to fears and threats generates a new set of fears and threats."

Dr Williams, who was recently on a Christmas pilgrimage to the Holy Land with Cardinal Cormac Murphy-O'Connor, told the BBC the security barrier was causing problems, preventing people from going about their lives.

And his address will underline his fear for the Israelis and Palestinians.

"Both communities in their different ways dread - with good reason - a future in which they will be allowed to disappear while the world looks elsewhere.

"The beginning of some confidence in the possibility of a future is the assurance that there are enough people in the world committed to not looking away and pretending it isn't happening."

'Barriers to cohesion'

On Saturday, the archbishop accused the UK government of placing Christians in the Middle East at risk through its actions in Iraq.

Meanwhile the Archbishop of York, Dr John Sentamu, has warned that multi-culturalism threatens cohesion.

In his Christmas Day sermon at York Minster, he said: "We, as citizens of this nation, must agree to build our dwelling tent together.

"I believe we should talk more about the common good and the values that have shaped this nation and less and less about multi-culturalism and cultural diversity.

And the head of the Catholic Church in England and Wales, Cardinal Cormac Murphy-O'Connor, said in his midnight Mass homily at Westminster Cathedral that England was undergoing a "truly radical break" with humanity's traditions.

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Ahmadinejad rejects UN sanctions

Iran's president has rejected UN Security Council sanctions against Tehran, insisting his country would press ahead with its nuclear programme.

Mahmoud Ahmadinejad said the resolution passed on Saturday was a "piece of paper" adding that the 15 countries who voted in favour would regret it.

Iran said it would immediately begin installing 3,000 centrifuges at a uranium enrichment plant at Natanz.

The sanctions ban nuclear trade with Iran, but the US wants tougher curbs.

Mr Ahmadinejad said the West had lost its chance to improve relations with Iran.

"They seek to mobilise a group of their agents on the pretext of this piece of paper in order to sow seeds of discord among the Iranian nation," the Iranian Fars news agency reported him as saying.

"No matter [whether] they accept it or not, Iran is now an established nuclear state and it is in their interest to live alongside the Iranian nation."

A foreign ministry spokesman said the "continuation of peaceful nuclear activities" would be Iran's "best response" to the UN sanctions.

In the Iranian parliament, an overwhelming majority of deputies approved an emergency bill directing the government to review co-operation with the UN nuclear watchdog, the International Atomic Energy Agency (IAEA).

The UN sanctions, passed unanimously, ban the supply of nuclear materials to Iran and freeze some assets overseas.

The Security Council resolution demands that Tehran end all uranium enrichment work, which can produce fuel for nuclear plants as well as for bombs.

Traces of weapons-grade uranium were found at Natanz, in central Iran, during UN inspections in 2003, although this was later blamed on contaminated imported equipment.

Iran's plan to install thousands of centrifuges at Natanz would enable a vital stage of the process of enriching uranium into weapons-grade material.

Sanctions 'warning'

The Security Council backed sanctions against Iran after intense debate over the terms of the resolution.

The vote by the 15-member council took place exactly two months after Britain, France and Germany first introduced a draft resolution proposing sanctions.

The resolution, under Chapter Seven of Article 41 of the UN Charter, makes enforcement obligatory but limits action to non-military measures.

Acting US ambassador to the UN Alejandro Wolff said the resolution sent a "warning" to Iran.

"If necessary, we will not hesitate to return to this body if Iran does not take further steps to comply," Mr Wolff said.

But a senior official at the US state department, Nicholas Burns, said the UN resolution was not enough.

He said the US would try to persuade other countries, especially Russia, to impose stronger penalties individually.

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Ahmadinejad: Bush 'Most Hated' In World

(AP) President Mahmoud Ahmadinejad called President Bush "the most hated person" in the world on Thursday, keeping up his tirades against the West despite elections that showed Iranians want him to focus on the country's domestic problems.

In final results announced Thursday from local elections last week, moderate conservatives opposed to Ahmadinejad won a majority of seats. They were followed by reformists, making a comeback after being driven out of local councils, parliament and the presidency over the past five years.

In the capital Tehran, where Ahmadinejad was mayor before becoming president 16 months ago, his allies grabbed only three of the 15 council seats, while moderate conservatives won seven. Reformists won four, and an independent one. Though the Dec. 15 elections were local, they were the first time the public has weighed in on Ahmadinejad's stormy presidency.

But Ahmadinejad appeared unbowed. He toured cities in western Iran, telling the crowds that Iran will not be intimidated by Western demands to dismantle its nuclear program, and scolding Mr. Bush.

"Oh, the respectful gentleman, get out of the glassy palace and know that you are the most hated person in the eyes of the world's nations and you can't harm the Iranian nation," Ahmadinejad said, according to the official Iranian Republic News Agency.

He said Iran would continue uranium enrichment even under threat of U.N. sanctions. "A nation that has resisted until today will resist until the last step and will defend its rights," he said.

The United States and its allies believe Iran is trying to develop nuclear weapons. Iran denies the allegation, saying its nuclear goal is only to generate electricity.

Ahmadinejad did not comment on the election results. But his hard-line foreign policy, in the absence of a strong domestic agenda or economic program, is believed to have divided the conservative base that voted him into the presidency last year.

The president has sharply escalated Iran's standoff with the United States and its allies over several issues. Besides uranium enrichment, he has sparked international outrage for his calls to eliminate Israel and for casting doubt on the Nazi Holocaust.

Election results outside Tehran also showed a heavy defeat for Ahmadinejad supporters. None of his candidates won seats on the councils in the cities of Shiraz, Bandar Abbas, Sari, Zanjan, Rasht, Ilam, Sanandaj and Kerman, and many councils in other cities were divided like Tehran's.

Similar anti-Ahmadinejad sentiment appeared in final results of a parallel election for the Assembly of Experts, the body of 86 senior clerics that monitors Iran's supreme Islamic leader and chooses his successor.

A big boost for moderates within the ruling Islamic establishment was visible in the large number of votes for former President Hashemi Rafsanjani, who lost to Ahmadinejad in the 2005 presidential election runoff.

Rafsanjani, who supports dialogue with the United States, got the most votes of any candidate from Tehran to win re-election to the assembly.

Opposition candidates demanded that Ahmadinejad pay more attention to unemployment, now estimated at 11 percent, and other economic problems. He has failed to carry through on several domestic campaign promises, including a pledge to send a share of the country's oil revenues to every family and to implement an anti-poverty program.

The moderate daily newspaper Etemad-e-Melli, or National Confidence, urged Ahmadinejad to change his policies if he has any respect for the vote.

"The result of the elections, if there is any ear to listen or any eye to see, demands reconsideration in policies," the paper said in an editorial Thursday.

Conservative lawmaker Emad Afroogh also called on Ahmadinejad to learn a lesson from the vote. "The people's vote means they don't like Ahmadinejad's populist methods," Afroogh told The Associated Press.

Reformist Saeed Shariati also said the results of the election were a "big no" to Ahmadinejad and his allies, who he accused of harming Iran's interests with their hard line.

"We consider this government's policy to be against Iran's national interests and security. It is simply acting against Iran's interests," said Shariati, a leader of the Islamic Iran Participation Front, Iran's largest reformist party. His party seeks democratic changes within the ruling Islamic establishment and supports relations with the United States.

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Palestinian groups call new truce

Palestinian President Mahmoud Abbas has announced a new ceasefire deal between his Fatah faction and the Hamas group that aims to stop fighting in Gaza.

The move comes after a week of escalating violence which has brought the territory to a standstill.

News of the breakthrough followed a day of street battles in which at least five people were killed and more hurt.

Schools were closed after five children were among the injured. A truce agreed on Sunday failed within 24 hours.

Mr Abbas told reporters in the West Bank city of Ramallah that the latest ceasefire would come into effect at 2300 local time (2100 GMT).

"We hope all will abide by this agreement," he said.

Mr Abbas and Prime Minister Ismail Haniya, of Hamas, have been invited to Jordan by King Abdullah for talks.

King Abdullah said his country would do all it could "to help the Palestinians overcome their differences".

Abbas and US blamed

In a televised address in Gaza City on Tuesday, Mr Haniya said Palestinians would "remain united" in the face of the Israeli occupation.

"The smallest drop of Palestinian blood is dear to us and it should not be spilled except to defend our land. We are all aboard the same boat," he said.

On Saturday, Mr Abbas said he would call early elections, in a bid to end the deadlock following the collapse of talks on forming a national unity government.

On Tuesday, Mr Haniya repeated his opposition to the president's move, on the grounds it was "unconstitutional".

He said he blamed Mr Abbas, and the US government in particular, for undermining efforts to form a unity government.

Mr Haniya also reiterated an appeal for a long-term truce with Israel and the formation of a temporary Palestinian state alongside the Jewish state.

In Tuesday's violence:

• An attempt to take an injured Fatah militant to a Gaza hospital sparked a battle between Fatah intelligence officers and Hamas militiamen; one Hamas fighter was killed and several injured
• There was a tense stand-off between Hamas militants and forces loyal to Mr Abbas at the headquarters of the pro-Fatah intelligence service near Gaza City
• A convoy of pro-Fatah militants was ambushed in Gaza City; two Fatah militants were killed and nine bystanders injured, including five children, medical sources said

Gaza shopkeeper Suleiman Tuman, who witnessed some of the violence, told the Associated Press news agency: "I've been praying to God that this is going to end.

"Both sides used to fight the Israelis together. Now they are directing their weapons toward each other."

Factional rivalry

While Fatah, through Mr Abbas, controls the presidency, Hamas, which won elections in January, runs the government.

Fighting between the factions has paralysed the Hamas administration, which has also been crippled by an international embargo against it.

Hamas refuses to renounce violence or recognise Israel - a crucial demand of the international community.

Fatah believes that ending attacks on Israel is the key to forcing the Jewish state into negotiations on an independent Palestinian statehood.

Increased poverty and months of Israeli operations have polarised Palestinian factional rivalry further, correspondents say.

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Poll blow for Iran's Ahmadinejad

Partial results from key elections in Iran suggest a setback for conservative President Mahmoud Ahmadinejad.

Friday's elections were for the powerful clerical body, the Assembly of Experts, along with local government.

On a turnout of 60%, the big winners seem to be moderate conservatives, while reformists have made a comeback after three poor election showings.

Moderate former President Akbar Hashemi Rafsanjani sealed a landslide win for a seat on the Assembly of Experts.

Presidential pressure

With most of the results for local elections announced throughout the country, the president's allies have failed to win control of any council.

With about 20% of the Tehran votes counted, Mr Ahmadinejad's supporters were said to be in a minority. Candidates supporting moderate conservative Mayor Mohammed Bagher Qalibaf were ahead.

Not a single candidate supporting the president won a seat on councils in the key cities of Shiraz, Rasht or Bandar Abbas.

The president's supporters have also failed to make significant gains on the Assembly of Experts, which can dismiss the supreme leader.

BBC Iran affairs analyst Sadeq Saba says the message is loud and clear and is likely to increase pressure on Mr Ahmadinejad to change his policies.

Reformists hailed the early results. The Islamic Iran Participation Front said: "It is a big 'no' to the government's authoritarian and inefficient methods."

The biggest winner, our correspondent says, is Mr Rafsanjani, who was defeated by Mr Ahmadinejad in the 2005 presidential elections.

A conservative cleric close to Mr Ahmadinejad, Mohammad Taghi Mesbah Yazdi, came only sixth in the Assembly of Experts poll.

At 60%, the overall turnout was significantly higher than for the 2002 local elections, when it was about 50%.

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Middle East at 'critical moment'

The Middle East faces a "critical moment of decision", Prime Minister Tony Blair has said.

Now in Cairo, Mr Blair also said it was important that the international community offered support to Palestinian President Mahmoud Abbas.

He spoke after talks with Egyptian President Hosni Mubarak in his continuing Middle East diplomacy tour.

Mr Blair said the president needed help to build his authority and his ability to raise Palestinian living standards.

Hailing the president's call for early elections in the Palestinian territories, Mr Blair said: "What it shows is the desire of the Palestinian president to improve the lot of his people, who are suffering in a terrible way and have been for a long period of time."

He also said the president had worked hard to try to bring about a unity government.

President Abbas believes early elections may defuse rising tensions between Hamas and Fatah.

However, Mr Blair offered words of warning on the prospect of an increased role for Iran in the region.

He accused Iran of wanting to "derail" peace prospects and said it was "difficult to see" how it could be a constructive player in the region.

Bleak prospects

Mr Blair said: "It is up to Iran to decide. If Iran wants to reach out, we are there.

"But if what they are going to do is undermine the government in Iraq, the government in Lebanon, the Palestinian authority in Palestine, what can we do? We can't be constructive if that's the way they are playing things."

Speaking earlier in the Turkish capital Ankara, Mr Blair said nothing was more important in the Middle East and the rest of the world than the conflict between the Israelis and the Palestinians.

Referring to recent violence, Mr Blair said: "As you can see from the events of the last 24 hours, the next few days or weeks are a critical moment of decision for this whole process."

He believes the most important thing is to establish "a fully functioning authority" which will "start to create the structures on the Palestinian side that then allow a negotiation for peace with Israel to go forward".

Worsening violence was a reason for going there, not for staying away, he said.

Mr Blair added: "If we don't get a new sense of urgency and movement in this situation, it will continue to go backwards and the suffering of the Palestinian people and the implications for the region and for the security of Israel are dreadful."

Meanwhile, the prime minister also said he was a "strong supporter" of Turkey's bid to join the European Union.

He said it could play an important role as part of an "arc of moderation" in the Muslim world and as a bridge between Europe and the region.

His counterpart, Recep Tayyip Erdogan, said he was committed to finding a solution to the conflict.

Mr Blair also praised Turkey's leadership and said the country's membership was also "of fundamental importance to the future of Europe".

Mr Blair will also go to Israel, the Palestinian territories and the United Arab Emirates during his visit.

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Violence follows Hamas accusation

Clashes have erupted between rival Palestinian factions after Hamas accused Fatah of trying to assassinate Prime Minister Ismail Haniya of Hamas.

Hamas accused a senior Fatah figure of organising an attack on Mr Haniya as he crossed into Gaza from Egypt.

Medical sources in the West Bank town of Ramallah said 32 people had been injured in clashes there. Fighting was also reported in Gaza City.

Mr Haniya called for calm and unity at a mass rally held in Gaza City.

Tens of thousands of supporters gathered in a Gaza City football stadium to mark the 19th anniversary of the founding of Hamas.

Hamas gunmen patrolled the streets of the city in a show of strength.

Mr Haniya said Hamas had the names of those responsible and that the law would be used to bring them to justice.

But he vowed that the shooting would not frighten members of Hamas.

"We did not join this movement to become ministers but rather to become martyrs."

One bodyguard was killed and Mr Haniya's son was among five injured in Thursday's gun battle at the Rafah border crossing.

The BBC's Alan Johnston, in Gaza, says Mr Haniya struck a less strident tone than some, but there is every danger that the situation could get worse.

Mahmoud Abbas, the Palestinian Authority (PA) president and head of Fatah, is due to speak on Saturday, and may call early elections in an effort to break the political deadlock between Fatah and Hamas.

Hamas has said it will boycott Mr Abbas' speech in protest at "dangerous and bloody" recent events.

Egyptian negotiators, who have mediated between Hamas and Fatah in the past, met Hamas on Friday in an effort to ease tensions.

Russia also called for the quarrelling factions to show restraint.

'Grave threat'

The violence in Ramallah on Friday flared as Hamas supporters attempted to march towards the centre of town but found the path blocked by Mr Abbas' security forces, reports said.

Fighting broke out, with hospital officials saying that at least 32 people were injured by gunfire and stone-throwing.

Shooting also erupted in Gaza City between masked Hamas gunmen and PA police allied to Fatah.

A Hamas spokesman had earlier said the Rafah attack was "an assassination attempt carried out by traitors led by Mohammad Dahlan".

Mr Dahlan, an ally of Mr Abbas, is a former Palestinian Authority security chief and a fierce critic of Hamas.

He rejected the Hamas accusations, saying the governing party was trying to "mask its failures".

A Fatah spokesman said the attack was a "grave threat" to Palestinian unity.

Chaotic scenes

Inter-faction tensions have increased since the killing of three sons of a pro-Fatah security chief on Monday.

Mr Haniya had tried to cut short his first trip abroad as prime minister to deal with the crisis.

But Israel on Thursday closed the Gaza border, saying the reported $30m (��15.3m) Mr Haniya was carrying in donations as he returned from his foreign trip would fund "terrorist operations".

When Mr Haniya eventually crossed late in the evening, without the money, guards allied to Fatah exchanged fire with Mr Haniya's security forces.

Hamas, a militant Islamic group, won elections in January, but has faced a Western aid boycott after refusing to renounce violence and recognise Israel.

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Iran: Israel 'will end like USSR'

Iranian President Mahmoud Ahmadinejad has told a conference in Tehran questioning the Holocaust that Israel's days are numbered.

"Just as the USSR disappeared, soon the Zionist regime will disappear," he said to the applause of the participants.

The two-day conference provoked widespread international outrage.

German Chancellor Angela Merkel condemned the forum and British Prime Minister Tony Blair called it "shocking beyond belief".

Iran said it wanted to debate what it called taboos surrounding the Holocaust.

Some six million Jews were murdered by the Nazi regime during World War II.

The BBC's Frances Harrison in Tehran said the conference was like a roll call of the world's most infamous Holocaust deniers - all delighted that Iran had given them the oxygen of publicity.

'Free forum'

"The trend for the existence of the Zionist regime is downwards and this is what God has promised and what all nations want," President Ahmadinejad said.

"Whether the Holocaust occurred or did not or whether it had vast dimensions or not, it has become a pretext to create a base for aggression and threats for the countries of the region," he said.

Mr Ahmadinejad urged the participants - including ultra-Orthodox Jews who say the creation of Israel was an abomination - to examine Holocaust in more detail.

"Iran is your home and is the home of all freedom seekers of the world. Here you can express your views and exchange opinions in a friendly, brotherly and free atmosphere," he said.

Iran, which is home to 25,000 Jews, says 67 researchers from 30 countries attended the meeting.

Participants included a number of well-known "revisionist" Western academics.

Iranian Foreign Minister Manouchehr Mottaki said on Monday the aim of the conference was "not to deny or confirm the Holocaust", but "to create an opportunity for thinkers who cannot express their views freely".

In a number of European countries - including Germany, Austria and France - it is illegal to deny the Holocaust. An Austrian court jailed Briton David Irving for three years on charges of Holocaust denial.

'Unacceptable character'

In London, Mr Blair called the Holocaust conference "shocking beyond belief".

He described Iran as a "major strategic threat" to the Middle East.

In Berlin, Ms Merkel - flanked by visiting Israeli Prime Minister Ehud Olmert - said: "We reject in the strongest terms conferences held in Iran on the supposed non-existence of the Holocaust.

"Germany will never accept this and will use all possibilities at its disposal to oppose it."

Mr Olmert said the conference showed the "unacceptable character" of the Iranian government and the "danger" it poses for the West.

Mr Ahmadinejad has repeatedly downplayed the extent of the Holocaust, describing it as a myth used to justify the existence of Israel and oppression of the Palestinians. He has called for an end to the Israeli state.

Many Iranians must be wondering why they have the right to deny the Holocaust with impunity, but not to question their own leaders without risking jail, our correspondent says.

In recent months, newspapers have been closed, journalists jailed and students penalised for engaging in any sort of political activity in Iran.

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Beirut rally attracts huge crowd

Hundreds of thousands streamed into the heart of Beirut Enlarge Image

Hundreds of thousands of Lebanese are taking part in the latest protest to press the government to cede more power to the opposition or step down.

Led by Hezbollah and its pro-Syrian allies, the rally is possibly the largest demonstration Beirut has seen.

Christian opposition leader Michel Aoun, a Hezbollah ally, urged the prime minister to accept a national unity government or face further action.

PM Fouad Siniora has vowed to resist what he has called an attempted coup.

Demonstrators have been waving the red, green and white flag of Lebanon, but others are also waving the yellow flag of Hezbollah emblazoned with a fist holding up an AK-47.

Fully-veiled Shia women, Christian students wearing t-shirts and fathers hoisting children on their shoulders were among crowds who cheered a series of opposition speakers urging the government's resignation, the AFP news agency reported.

Mr Aoun, in a video link speech that appeared on giant screens, told the crowd that the time of Mr Siniora's Western-backed government was over.

He said the opposition was committed to "peaceful means, but even other means are legitimate".

Lebanese army combat troops sealed off major roads around the two squares where the rally is taking place.

However there is also a heavy presence of Hezbollah security agents wearing white caps and carrying walkie-talkies, says the BBC's Kim Ghattas in Beirut.

The Hezbollah-led protests began on 1 December.

"We will stay for days, weeks or months. Whatever it takes to bring down the government," one protester, Nader Hafez, told Reuters news agency.

Government veto

The opposition accuses the government of being weak and corrupt, and says it no longer represents the Lebanese people after six pro-Syrian ministers resigned last month.

Under the constitution, the death or resignation of another two ministers would automatically bring it down.

Hezbollah has been demanding a bigger share in the cabinet that would give it the power to veto government decisions.

The current cabinet came to office last year in the first election held after the withdrawal of Syrian troops originally stationed in Lebanon during the civil war.

Syria was forced to withdraw its military presence after massive street protests and international pressure, triggered by the February 2005 assassination of former Lebanese Prime Minister Rafik Hariri.

A UN investigation has implicated several Syrian officials in the killing, although Syria has denied any involvement.

The government in Beirut has also accused Damascus of ordering the assassination on 21 November of anti-Syrian cabinet minister Pierre Gemayel.

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Israel Rejects Iraq Study Group Proposals

(CBS/AP) Israeli Prime Minister Ehud Olmert on Thursday rejected a U.S. advisory group's conclusion that a concerted effort to resolve Israel's conflict with its neighbors will help stabilize the situation in Iraq, saying there is no connection between the two issues.

Olmert also rebuffed the group's recommendation that Israel open negotiations with Syria, but said Israelis want "with all our might" to restart peace talks with the Palestinians.

The Iraq Study Group report, released Wednesday in Washington, calls for direct talks between Israel and its neighbors, Syria, Lebanon and the Palestinians and says resolving the Israeli-Arab conflict would improve conditions in Iraq.

Olmert rejected that finding. "The attempt to create a linkage between the Iraqi issue and the Mideast issue ��we have a different view," Olmert said during the prime minister's annual meeting with Israeli journalists. "To the best of my knowledge, President Bush, throughout the recent years, also had a different view on this."

Most Israelis oppose handing the Golan Heights back to a radical regime like Syria, as the study group recommends, reports CBS News correspondent Robert Berger. Israel is also concerned about the report's call for the U.S. to open a dialogue with Iran. Israeli officials say the best strategy to stop Iran's nuclear program is isolation, not dialogue.

In other developments:

Mr Bush's promise came in a call to Lebanese Prime Minister Fouad Siniora, following Tuesday's murder of leading anti-Syrian politician Pierre Gemayel.

Many people in Lebanon blame Syria but Damascus has denied any involvement and condemned the assassination.

Crowds have gathered in Mr Gemayel's village for his funeral on Thursday.

Mr Gemayel, Lebanon's industry minister, was shot in broad daylight in his car in a Christian area of Beirut.

He was the fifth anti-Syrian Lebanese politician to be killed in the past two years, and his murder happened at a time of acute political crisis in Lebanon.

In his telephone call to Mr Siniora, Mr Bush reiterated the "unwavering commitment of the United States to help build Lebanese democracy and to support Lebanese independence from the encroachments of Iran and Syria," an official at the White House said.

Mr Bush has not specifically blamed Iran or Syria for Mr Gemayel's murder but he has called for a full investigation to identify "those people and those forces" behind the killing.

President Bush also "pointed out that violence and unrest in Lebanon will not stop the international community from establishing the special tribunal for Lebanon", National Security Council spokesman Gordon Johndroe said.

This refers to plans, approved on Tuesday by the UN Security Council, for an international tribunal to try suspects in the murder of former Lebanese Prime Minister Rafik Hariri.

'Accusations'

Last week, Lebanon's cabinet endorsed the plans, despite the resignations of six pro-Syrian ministers opposed to it.

A UN inquiry has implicated Syria in the killing in February 2005, although Syria has denied involvement.

Syrian officials have also vocally rejected any involvement in Mr Gemayel's murder.

"I am here as usual in the accusation box that some of the Lebanese forces are trying to throw on us," Syria's ambassador to the UK, Sami Khiyami, told the BBC.

"This killing happened in the Christian neighbourhood of Mr Gemayel by people who cold-bloodedly were armed and acted completely at ease with their environment, so I think there should be a serious investigation to find out who the killer is."

There has also been condemnation of the killing from Iran and from Hezbollah, the Shia Muslim Lebanese political and militant group.

Family tragedy

Lebanon is holding three days of official mourning for Mr Gemayel, whose funeral is due to take place on Thursday.

Bells tolled and a huge crowd of mourners accompanied Mr Gemayel's coffin as it arrived in his home village of Bikfaya, east of Beirut.

There was sombre applause from the crowd as the body passed.

Women threw rice from balconies onto the coffin, which was draped in the striped flag of his Phalange party, and there were occasional bursts of guns fired into the air.

As a priest said prayers at the Gemayel family home, the minister's friends and family wept over his coffin.

Mourners filed past, offering condolences to his father, former President Amin Gemayel.

"This is the fifth martyr for the Gemayel family. There was my brother, my nephew, my niece, a cousin and now it is Pierre, my son," Amin Gemayel said.

"It is a real tragedy, but we still have faith and, whatever sacrifices have to be made, we will still stay the course, and it is a battle that we are fighting for freedom and democracy in Lebanon."

Amin Gemayel, who took a telephone call from President Bush, said they were counting on international support to find his son's killers.

Mr Gemayel's supporters have called for a mass turnout at his funeral, and there is a large military presence both in the village and in Beirut.

'No proof' of Iran nuclear arms

The US Central Intelligence Agency (CIA) has not found conclusive evidence that Iran is developing nuclear weapons, a US magazine has reported.

Veteran investigative reporter Seymour Hersh, writing in The New Yorker, cites a secret CIA report based on intelligence such as satellite images.

Correspondents say the alleged document appears to challenge Washington's views regarding Iranian nuclear intentions.

The article says the White House was dismissive about the CIA report.

The US and Europe say Iran is pursuing a clandestine nuclear weapons programme - a charge Iran has strongly denied.

'Hostile' response

The CIA assessment, according to unnamed officials quoted in the article, casts doubt on how far Iran has actually progressed to making a nuclear weapon.

"The CIA found no conclusive evidence, as yet, of a secret Iranian nuclear weapons program running parallel to the civilian operations that Iran has declared to the International Atomic Energy Agency," Mr Hersh wrote.

It says the agency based its conclusions on technical intelligence, such as satellite photography and measurements from sensors planted by US and Israeli agents.

The article says: "A current senior intelligence official confirmed the existence of the CIA analysis, and told me that the White House had been hostile to it."

White House spokeswoman Dana Perino criticised the article, calling it an "error-filled" piece in a "series of inaccuracy-riddled articles about the Bush administration".

"The White House is not going to dignify the work of an author who has viciously degraded our troops, and whose articles consistently rely on outright falsehoods to justify his own radical views," she was quoted by AFP news agency as saying.

The BBC's Adam Brookes in Washington says if the New Yorker article is correct, it would suggest that the CIA is being more cautious than the Bush administration in evaluating whether or not Iran is on its way to building a bomb.

And he says, as with Iraq, it suggests political battles to come over how intelligence is used as a basis for American foreign policy.

US' Lebanon plot claim rejected

Syria and the Lebanese militant group Hezbollah have rejected US accusations that they are seeking to topple the Lebanese government with Iran's help.

Damascus denounced US "rumours", while Hezbollah accused the US of using Lebanon as a tool against its enemies.

The White House said on Wednesday it had "mounting evidence" of a plan to unseat the government in Beirut.

The US believes Syria may try to block the formation of a tribunal over the killing of Lebanese ex-PM Rafik Hariri.

Washington did not present any evidence, saying it was classified.

'Washington's battle'

"The latest American position is a blatant interference in a Lebanese internal affair concerning the Lebanese people's choices over their government and policies," Hezbollah said in a statement.

"It is also meant to throw Lebanon into Washington's battle against forces and states that are friendly and brotherly to Lebanon and its people, including Iran and Syria," it said.

Damascus earlier rejected the claims in a foreign ministry statement.

"The rumours put about by the US administration according to which Syria, Iran and Hezbollah are seeking to destabilise the situation in Lebanon are wrong," the statement said.

A Syrian government newspaper described the comments as "pure vilification meant to raise turmoil in Lebanon and cause fallout with Syria."

Veto fears

Hezbollah is backed by Syria and Iran, and has two ministers in Lebanon's government.

The BBC News website's world affairs correspondent Paul Reynolds says the White House statement appeared to result from the tense situation in Lebanon, where Hezbollah is demanding one third of cabinet seats, thereby giving it a veto over decisions.

Such a veto would enable it to block approval of the international tribunal to try suspects in the assassination of Mr Hariri in February, 2005, our correspondent says.

The Hezbollah leader, Sheikh Hassan Nasrallah, has threatened street demonstrations in support of his demand.

The US is concerned that this instability could result in the fall of the government of Prime Minister Fouad Siniora.

Some see it as healthy opposition to the government, but critics of Hezbollah say the group is indeed doing the bidding of Iran and Syria, says the BBC's Kim Ghattas in Beirut.

UK mission

The claim from the White House came as Britain held its highest level talks with Syria since the 2003 invasion of Iraq.

Prime Minister Tony Blair's foreign policy adviser, Nigel Sheinwald, met Syrian President Bashar al-Assad and senior ministers.

Few details were given of the discussions, but the Financial Times newspaper reported that the visit was aimed at pressing Syria to cease its support for radical groups.

As well as its relationship with Hezbollah, Syria is thought to have influence on some of the insurgent groups operating in Iraq.

Iran denies Argentina bomb charge

Iran has strongly criticised charges against former high-level Iranian officials over the 1994 bombing of a Jewish centre in Buenos Aires.

Argentine prosecutors are calling for the arrest of former Iranian President Hashemi Rafsanjani and seven others.

Iranian authorities are accused of directing Lebanese militia group Hezbollah to carry out the attack, which killed 85 people and injured 300.

The Iranian foreign ministry described the move as "a Zionist plot".

Hezbollah and Iran both deny that they were involved in the blast.

Speaking on state radio, foreign ministry spokesman Mohammad Ali Hoseyni said: "The new fabrications are conducted within the framework of a Zionist plot."

Mr Hoseyni said the charges were intended to divert "world attention from the perpetration of crimes by the Zionists against women and children in Palestine".

The blast, on 18 July 1994, reduced the seven-storey Jewish-Argentine Mutual Association (AMIA) community centre to rubble.

No-one has ever been convicted of the attack, but the current government has said it is determined to secure justice.

'Hallmarks'

Over the years, the case has been marked by rumours of cover-ups and accusations of incompetence, but little in the way of hard evidence.

Minor figures have been named, including a policeman who sold the van used in the attack, but no-one has been convicted.

Local Jewish groups have long said the bombing bore the hallmarks of Iranian-backed Islamic militants.

Iran has repeatedly and vehemently denied any involvement in the attack.

Last November, an Argentine prosecutor said a member of Hezbollah was behind the attack and had been identified in a joint operation by Argentine intelligence and the FBI.

But Hezbollah said that the man, Ibrahim Hussein Berro, had died in southern Lebanon while fighting Israel.

The 1992 bombing of the Israeli embassy in Buenos Aires, which killed 29 people, also remains unsolved.

Kidnapped Gaza journalist freed

A Spanish photographer who was kidnapped in the Gaza Strip has been released, it has been confirmed.

Emilio Morenatti, 37, who works for the Associated Press news agency, spent less than a day in captivity.

He was seized by gunmen who emerged from a white Volkswagen car, after he left his flat in Gaza City.

The photographer, who has been taken by Fatah officials to the office of Palestinian President Mahmoud Abbas, said he was tired but unharmed.

It is still not clear who held him or what their motive had been. A Hamas spokesman also condemned the kidnap.

He was said to be on his way to an early-morning assignment.

Over the last two years or so, there have been about 24 cases of foreigners being kidnapped in the Gaza Strip.

Their captors have normally been disaffected militant groups who use hostages as bargaining chips in disputes with the local authorities, BBC Gaza correspondent Alan Johnston says.

The foreigners were usually released quickly and unharmed. But the last kidnapping involving two journalists from the US Fox news organisation was a much more prolonged affair.

The pair were held by a militant Islamist Jihadi-style group that at times threatened to kill them.

The captives were forced to convert to Islam and denounce the West in a video before eventually being freed.

Ghazi Hamad, spokesman for the Hamas-led Palestinian government, condemned the kidnapping, saying it "damages the reputation of the Palestinian people".

"The government will take all steps to ensure his release," he said.

Iran leader in Bush 'Satan' claim

Iran's President Mahmoud Ahmadinejad has reportedly delivered a scathing attack on US President George W Bush, saying he is inspired by Satan.

Speaking to a group of supporters, Mr Ahmadinejad said he himself had inspirational links to God, Iranian media reports.

He was talking to supporters at a mosque in the capital Tehran.

The reports come as Iran is facing the prospect of UN sanctions over its nuclear programme.

The president has been making light of the risk of any confrontation with the outside world.

According to the Iranian media, Mr Ahmadinejad said he had inspirational links to God, and went on to say that if you were a true believer, God would show you miracles.

Then the Iranian president said Mr Bush was similar to him.

According to Mr Ahmadinejad, the US president also receives inspiration - but it is from Satan.

He repeated: "Satan inspires Mr Bush."

Mr Ahmadinejad also reiterated that Iran would not suspend its nuclear programme, "even for one hour", and said there would be no retreat, "even one millimetre back".

He dismissed talk about possible war breaking out over the nuclear issue as nonsense, saying some people were making an unnecessary fuss about US naval ships reportedly sailing towards the region.

Syria: US lacks Mid-East vision

Syrian President Bashar al-Assad has said the United States does not have "the will or vision" to pursue peace in the Middle East.

In a BBC interview, President Assad said Syria was prepared to hold talks with Israel but he said there needed to be "an impartial arbiter".

He said there was no sign the Americans were prepared to play this role.

President Assad acknowledged Syria and Israel could live side-by-side in peace accepting each other's existence.

The current US administration has said Syria is a member of what it has called an axis of evil.

President Assad suggested President Bush could not be an impartial umpire and said no direct dialogue had taken place between the two nations.

"How can you talk about peace and at the same time isolation? How can you talk about peace and you adopt the doctrine of pre-emptive war?" he asked.

The implementation of UN resolutions by all parties - Syria, Israel, America, the UN and EU - was the only way to achieve peace, Mr Assad said.

Pointing the finger

In the wide-ranging interview, the Syrian president said the West was too ready to blame Syria for problems in the Middle East.

He said the reality and the perception of his country were two different things but that it suited the outside world to point the finger at Syria.

Following the US-led invasion of Afghanistan and Iraq, Mr Assad said the West had accused Syria of supporting terrorism to make it "a scapegoat" and to "absolve themselves from any responsibility".

Washington has also accused Syria of backing Hamas and Hezbollah in Lebanon, organisations it views as a terrorist groups. However, President Assad said public support for such groups had to be taken into account.

"As long as they [Hezbollah] are effective on the ground among the people you have to deal with them.

"When they have the support of the people you cannot label them as terrorists because this way you label the people as terrorists," he said.

As far as Iraq is concerned, he insisted that Syria did not support any insurgent attacks, but added that "as a concept" resistance was the right of the people.

Syria has also been accused of allowing insurgents to pass across the border with Iraq, but President Assad said the accusations were untrue.

Rice embarks on new Mid-East tour

US Secretary of State Condoleezza Rice is travelling to the Middle East, in an effort to revive the peace process.

Ms Rice is to visit Saudi Arabia, Egypt, Israel and the Palestinian territories.

It is her first visit to the region since the end of the month-long conflict between Israel and Lebanon's Hezbollah militants in August.

The secretary of state was widely criticised for failing to call for an immediate end to the fighting.

BBC state department correspondent Jonathan Beale says President George W Bush wants to show that even if America's image is tarnished in the region, it is still actively engaged in bringing about a lasting peace.

Ms Rice will focus her efforts on talking to what the Bush administration terms "the voices of Muslim moderation" our correspondent adds.

A spokesman said she would discuss the threats to stability from Iran, Hamas and Hezbollah.

On Friday Israeli Prime Minister Ehud Olmert said he hoped to meet the Palestinian leader, Mahmoud Abbas, for a summit within days.

It would be their first formal summit since Mr Olmert took over as Israeli leader from Ariel Sharon in January.

In the same month, the militant movement Hamas, which is sworn to Israel's destruction, won Palestinian parliamentary elections and Israel froze contacts.

Al-Qaeda brands Bush 'a failure'

Al-Qaeda's number two has called US President George W Bush a "liar" who is losing his war against the network.

In a video published on the Internet, Ayman al-Zawahiri called Mr Bush a "lying failure" and said al-Qaeda was stronger than ever.

The message follows a video issued for the anniversary of 9/11, in which Zawahiri said Western forces were doomed in Iraq and Afghanistan.

In the new message, he also spoke about Darfur and attacked Pope Benedict XVI.

The Egyptian militant, who is seen as the group's ideologue, has eluded capture despite a $25m bounty on his head.

'Losses'

In the latest video, Zawahiri said: "We have gained more strength and we are more insistent on martyrdom.

"Bush, oh failure and liar, why don't you be courageous for once and confront your people and tell them the truth about your losses in Iraq and Afghanistan."

He urged Muslims to fight a holy war in the troubled Sudanese region of Darfur against "crusaders" masked as United Nations troops.

He also called Pope Benedict XVI a "charlatan" because of his remarks on Islam, Reuters reported.

"This charlatan accused Islam of being incompatible with rationality while forgetting that his own Christianity is unacceptable to a sensible mind," he said.

The Pope caused controversy earlier this month when he quoted a medieval text which said Prophet Muhammad had brought the world only evil.

He expressed regret following angry reactions from throughout the Muslim world to the words in a speech made in southern Germany.

'Million bomblets' in S Lebanon

Up to a million cluster bomblets discharged by Israel in its conflict with Hezbollah remain unexploded in southern Lebanon, the UN has said.

The UN's mine disposal agency says about 40% of the cluster bombs fired or dropped by Israel failed to detonate - three times the UN's previous estimate.

It says the problem could delay the return home of about 200,000 displaced people by up to two years.

The devices have killed 14 people in south Lebanon since the August truce.

The manager of the UN's mine removal centre in south Lebanon, Chris Clark, said Israel had failed to provide useful information of its cluster bomb strikes, which could help with the clearance operation.

Last month, the UN's humanitarian chief, Jan Egeland, accused Israel of "completely immoral" use of cluster bombs in the conflict.

Israel says all its weapons and munitions, as well as their use, comply with international law.

'Threat to life'

Mr Clark said Israel fired up to 6,000 bombs, rockets and artillery a day into Lebanon during the 34-day conflict.

He said more than 40,000 cluster bomblets had been cleared since the fighting ended on 14 August, but many more remained scattered "in bushes, trees, hedges and wire fences".

Mr Clark said information Israel had provided to help with the bomblets' clearance had been "useless".

"We have asked for grid references for [cluster bomb] strikes," he said.

"We have not received them so far."

The UN's refugee agency said the danger of unexploded cluster bombs meant some 200,000 people displaced by the conflict would not be able to return home for up to two years, rather than 12 months as previously forecast.

"This is clearly the biggest threat to civilian life," said Arjun Jain, of the United Nations High Commissioner for Refugees.

Hundreds of bomblets are packed into the cluster bombs, which are fired from the ground or dropped by aircraft.

The bombs detonate in mid-air, dispersing the drinks-can sized bomblets over a wide area. Those which do not explode on impact become like anti-personnel mines.

The use of cluster bombs is not prohibited under international law.

Hezbollah head praises 'victory'

The Hezbollah leader, Sheikh Hassan Nasrallah, has hailed his group's "victory" over Israel, boasting that the group still has 20,000 rockets.

In his first public appearance since the recent conflict, he said Hezbollah would never be disarmed by force and called for a new Lebanese government.

Hundreds of thousands crowded into southern Beirut, heavily bombed during the conflict, to hear the speech.

Israel said the speech showed a lack of respect to the international community.

Waving flags in the yellow and green of Hezbollah, crowds travelled from all over Lebanon to a square in the city's southern suburbs.

Security was tight in the streets around the square.

Thanking the crowd for making the journey to the rally, he praised their courage and said Hezbollah was now stronger than it was before fighting began on 12 July.

The 34-day conflict with Israel ended in a military and a strategic victory for Hezbollah, he told supporters.

"There is no army in the world that can force us to drop our weapons from our hands, from our grip."

Populist speech

Under the terms of the UN-brokered cease-fire that ended the fighting on 14 August, Hezbollah is expected to disarm.

But Sheikh Nasrallah said the group would only disarm when the Lebanese government was capable of protecting the country, and repeated a Hezbollah call for a new government to replace the administration of Prime Minister Fouad Siniora.

"The building of a just, strong and able state starts first with a serious national unity government," Sheikh Nasrallah said.

The strength of Hezbollah had dealt a severe blow to US plans for a new Middle East peace process, he told the crowds.

The BBC's Arab affairs analyst Magdi Abdelhadi, says the fiery speech consolidated his position as an unrivalled pan-Arab leader and a consummate Lebanese politician.

The speech will go down well in an Arab world where many feel their leaders are either corrupt or weak, he adds

Withdrawal delayed

Fighting between Israel and Hezbollah ended on 14 August with a ceasefire that has largely held.

Quartet backs Palestinian efforts

The US and the three other members of the so-called quartet of Mid-East mediators have endorsed the idea of a Palestinian national unity government.

The US, EU, Russia and the UN said they would boost indirect aid through a channel bypassing the current Hamas-led Palestinian government.

Palestinian leader Mahmoud Abbas is seeking to replace the Hamas government with one including his Fatah faction.

Hamas's enmity towards Israel has led to curbs on aid to the territories.

The quartet's announcement followed talks at the UN in New York and a meeting between Mr Abbas and US President George W Bush.

"The quartet welcomes the efforts of [Mr] Abbas... in the hope that the platform of such a government would reflect quartet principles and allow for early engagement," the quartet's joint statement said.

It also agreed to extend and expand a temporary international mechanism to channel aid to the Palestinians bypassing Hamas.

'Man of peace'

At their talks, Mr Bush described Mahmoud Abbas as a "man of peace" and added that achieving peace in the Middle East was one of the great objectives of his presidency.

"I fully understand that in order to achieve this vision, there must be a leader willing to speak out and act on behalf of people who yearn for peace, and you're such a leader, Mr President," he said at a joint news conference in New York.

"Our government wants to work with you, so that you're capable of delivering the vision that so many Palestinians long for, and that is a society in which they can raise their children in peace and hope."

Mr Abbas praised Mr Bush's speech to the General Assembly on Tuesday, when he advocated a two-state solution to the Middle East conflict.

"You are the first American president to have spoken of the vision of two states," he said.

He also said that Palestinians were in "dire need" of US help.

'Softening' stance

There is a growing sense of urgency at the UN to get the Middle East peace process moving, says BBC diplomatic correspondent Jonathan Marcus.

He says there are fears that if nothing is done the Palestinian territories could descend into chaos and anarchy.

The quartet has consistently said that for the Palestinian government to end its isolation it must renounce violence, recognise Israel and respect existing peace agreements, our correspondent says.

This latest statement is an apparent softening of tone, expressing hope that a national unity government would simply reflect quartet principles and allow for early engagement, he adds.

Bush brings Mideast baggage to U.N. meeting

NEW YORK (AP) -- President Bush faced disagreement Monday over how to confront Iran's nuclear ambitions and skepticism about his approach to Iraq and the Middle East as world leaders gathered for the U.N. General Assembly meeting.

Still, Bush was upbeat, focusing on his push for democratic change and first lady Laura Bush's call for governments to embrace literacy programs to improve lives.

"We don't believe freedom belongs only to the United States of America," Bush said at the White House Conference on Global Literacy hosted by his wife. "We believe that liberty is universal in its applications. We also believe strongly that as the world becomes more free, we'll see peace."

Bush arrived in New York to attend the 61st session of the world body with policy problems at home and abroad that have narrowed his room to maneuver on the international stage.

The U.S.-led war in Iraq is in its fourth year with no end to bloody sectarian violence in sight. International support is dwindling for imposing sanctions against Iran for defying U.N. demands that it halt certain nuclear work. The repressive Taliban regime toppled in Afghanistan is showing new signs of resilience. The Israeli-Palestinian conflict continues and Lebanon's government has, so far, proved too weak to rein in the Islamic militant group Hezbollah.

At home, Bush's approval rating, while experiencing a recent uptick, stands at 40 percent. Americans are growing weary of the war. The White House is in a showdown with Senate Republicans over the interrogation and trying of terror suspects. And elections that will determine which party controls Congress are seven weeks away.

The president's so-called freedom agenda is the theme of his speech to the U.N. General Assembly on Tuesday. He will focus on democratic reforms in Iraq, Afghanistan and Lebanon and elsewhere in the Middle East. He'll seek to quell skepticism about U.S. motives in the Middle East by working to avoid the impression that he wants to see a U.S.-style democracy imposed on any nation.

In his speech, Bush is expected to say that while military and law enforcement actions are needed to curb terrorism, the ultimate weapons are freedom and opportunity. He is to note two types of states in the Middle East -- those with an absence of freedom and weak ones with fragile democracies, such as Iraq and Lebanon.

"I think the president sees this ... as a struggle between the forces of extremism and the forces of moderation in the Middle East," National Security Adviser Stephen Hadley said, previewing Bush's speech. "And it's really a crucial time."

The president also is expected to firmly denounce Iran and Syria, two nations that Bush says are working to thwart freedom in the region. Iranian President Mahmoud Ahmadinejad also planned to be at the United Nations, but Bush had no intention of talking with him.

On Tuesday, Bush will meet with French President Jacques Chirac, who is part of the coalition of nations working with the U.S. to try to stop Iran from doing work that could lead to a nuclear weapon.

Chirac, who is balking at the U.S. drive to sanction Iran for defying U.N. deadlines, proposed a compromise Monday to kick-start talks between Iran and the international community. Chirac suggested that the threat of U.N. sanctions be suspended if Tehran puts a freeze on its uranium enrichment work.

"I am not pessimistic," Chirac said. "I think that Iran is a great nation, an old culture, an old civilization, and that we can find solutions through dialogue."

On Tuesday, Bush also meets with Iraqi President Jalal Talabani and U.N. Secretary-General Kofi Annan. Annan has been critical of the U.S.-led war in Iraq; Bush, on the other hand, says Americans are frustrated that the international body has been slow to reform.

Bush attended a reception Monday evening at the Manhattan home of Henry Kravis, where he helped raise $1.4 million for the Republican National Committee. He spent the day with leaders from Malaysia, a democracy with a moderate Islamic government; El Salvador and Honduras, two Central American nations that have moved from military dictatorships to democracies; and the emerging African democracy of Tanzania.

Bush, who in 2003 warned that the United Nations could fade into history as an "ineffective debating society," now finds the United States relying more on the United Nations to help resolve problems in Iran, Lebanon, North Korea, Sudan and other global hot spots. On Wednesday, the president will meet with Palestinian President Mahmoud Abbas.

Apology call over Pope's comments

Muslim Labour peer Baroness Uddin has called for an apology after Pope Benedict XVI's comments on holy war.

The Pope's words were a "type of throwaway irrelevant analysis of religion", she told BBC Radio 4.

The Muslim Council of Britain (MCB) said it wanted the Pope to "urgently clarify" his comments.

The Vatican said the Pope did not mean to offend Muslims when he repeated a quote saying Muhammad brought to the world only "evil and inhuman" things.

Baroness Uddin said: "I am worried about the current climate which licenses this type of irresponsible analysis of religion.

"If he did not mean it he should not have said it."

She added: "I hope that we are just going to demand of our politicians that Pope Benedict make some apology."

The MCB said the Pope had caused "dismay and hurt" to Muslims.

University speech

The pontiff delivered his speech - which explored the differences between Islam and Christianity, and the relationship between violence and faith - at Regensburg University.

In it, he quoted Emperor Manuel II Paleologos of the Byzantine Empire, the Orthodox Christian empire which had its capital in what is now the Turkish city of Istanbul.

Stressing that the words were the emperor's and not his own he said: "Show me just what Muhammad brought that was new and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached."

'Insulting remarks'

MCB secretary general Mohammed Abdul Bari said the emperor's views about Islam were "ill informed" and "frankly bigoted".

The British Muslim News newspaper has called for the Pope to apologise and "withdraw the insulting remarks".

Former Archbishop of Canterbury Lord Carey said it should not be assumed the quoted words of the emperor represented "the Pope's beliefs about Islam today".

US thanks Syria over embassy raid

The US has thanked Syria for foiling an attack on its embassy in Damascus.

Syria said three attackers were killed and a fourth captured as they tried to drive two cars at the compound. One security officer was killed.

Syrian media blamed Islamic extremists but no-one has said they carried out the attack. One car went up in flames but the second bomb failed.

The US, which lists Syria as a sponsor of terrorism, said it was grateful that the embassy staff's safety was ensured.

There were no reports of US casualties. There is currently no US ambassador to Damascus and very limited contact between the governments.

Damascus has seen sporadic unrest in recent years, including a reported attempt to bomb the Canadian embassy.

Grenades

Security forces sealed off the Rawda area, which also houses other embassies and security installations.

"Three terrorists were killed and one was wounded," said Interior Minister Gen Bassam Abdel Majid.

It was, in his words, a "terrorist operation targeting the US embassy" and involving home-made bombs and automatic weapons.

Ayman Abdel-Nour, a Syrian political commentator who was in the area, said the attackers had run "toward the compound shouting religious slogans while firing their automatic rifles".

Grenades were reportedly thrown at the embassy's wall, said to be about 2.5m (8ft) high.

Witnesses said that after an initial exchange of fire, two of the attackers sought refuge in a nearby building but were pursued and gunned down by security forces.

Heightened tension

US Secretary of State Condoleezza Rice thanked Syria's security forces and expressed condolences over the death of the guard.

"I do think that the Syrians reacted to this attack in a way that helped to secure our people and we very much appreciate that," she said.

Israel to lift Lebanon blockade

Israel says it will lift its air and sea blockade of Lebanon on Thursday, at 1800 local time (1500 GMT).

The blockade dates back to the start of its conflict with Hezbollah guerrillas in July. Israel says it wants measures to ensure no more arms reach Hezbollah.

International pressure has been building on Israel to lift the embargo, which has remained in place despite a three-week-old ceasefire.

The German navy is expected to play a major role in monitoring the coast.

UN officials have said German boats will lead a contingent of naval vessels from other countries - including France, Italy, Greece and the UK - in policing the coast.

Correspondents say supervising Lebanon's airspace and coastline is the first major test for the UN force charged with keeping the peace and preventing arms shipments from reaching Hezbollah.

They say the lifting of the blockade means Lebanon can begin rebuilding following Israel's massive bombardment of the south, and normal trade and travel routes can be restored.

German deployment

A statement from the Israeli prime minister's office said international forces would replace the Israelis at "control positions" over Lebanese sea and air ports.

A copy of the statement, quoted by the Associated Press news agency, said German experts would begin monitoring Beirut airport on Wednesday.

German naval forces are also expected to arrive within two weeks to deploy off the Lebanese coast, the statement said, and until then Italian, French, British and Greek troops would carry out their task.

About 3,250 international troops are now in Lebanon under the UN banner, and UN officials says that figure could reach 5,000 troops next week.

UN Resolution 1701 calls for a force of up to 15,000 peacekeepers to help police the border with Israel along with a similar sized Lebanese force.

More than 1,100 Lebanese and about 160 Israelis died in the conflict, sparked by the capture of two Israeli soldiers by Hezbollah.

Airlines returning

Lebanon had vowed to break Israel's blockade unless it was lifted within the next two days, just as the air blockade appeared to be crumbling.

Two airlines had previously been granted permission to operate regular commercial flights to Beirut, Lebanon's Middle East Airlines and Royal Jordanian, on condition they stopped at Amman.

But Qatar Airways resumed direct flights between Doha and Beirut on Monday, and other airlines were expected to follow suit, with or without Israeli permission.

British Mediterranean Airways (B-Med), a franchise partner of British Airways, announced it was breaking the air embargo by flying directly Beirut on Wednesday evening.

B-Med said it had sought clearance from the Lebanese authorities and the UK Foreign Office, but not from Israel.

Lebanese media reported that Air France and Germany's Lufthansa had also requested to resume flights to Lebanon.

Deadly blast in southern Lebanon

A bomb blast near the southern Lebanese city of Sidon has seriously wounded a senior intelligence officer and killed four of his aides and bodyguards.

Officials said Samir Shehadeh's car was hit by a remote-controlled bomb as he drove past the village of Rmeileh.

Col Shehadeh was an investigator into the killing of former Prime Minister Rafik Hariri in early 2005.

The incident comes amid a fragile truce after 34 days' bitter fighting between Israel and Hezbollah guerrillas.

Both vehicles of Col Shehadeh's two-car convoy were riddled with shrapnel. Police sealed off the area and began collecting evidence.

Government officials said Col Shehadeh was taken to hospital in Sidon and his condition was stable.

Decoy operation

Lebanon's acting information minister told Lebanese TV that one of the dead bodyguards had been acting as a decoy for Col Shehadeh in the lead car.

"It is obvious from the decoy operation that saved him that that there were expectations (of an attack)," Ahmed Fatfat told Future TV.

The bombing comes two weeks before the UN chief investigator is to submit a report on his latest findings in the Hariri investigation to the UN.

The Lebanese government is expected in the next few weeks to authorise an international tribunal to bring those responsible to justice.

Col Shehadeh is reported to have been involved in the arrest four pro-Syrian Lebanese generals last August in connection with the investigation.

Earlier UN investigator's reports have also implicated top Syrian officials in the Hariri killing, although Damascus has denied any role in it or the string of bombings targeting anti-Syrian figures which followed the 14 February 2005 assassination.

Mr Hariri's death galvanised Lebanese opposition to Syria, which subsequently bowed to pressure to pull its troops out of Lebanon after nearly 30 years of military presence.

UN denounces Israel cluster bombs

The UN's humanitarian chief has accused Israel of "completely immoral" use of cluster bombs in Lebanon.

UN clearance experts had so far found 100,000 unexploded cluster bomblets at 359 separate sites, Jan Egeland said.

Israel has repeated its previous insistence that munitions it uses in conflict comply with international law.

Earlier, Israeli Prime Minister Ehud Olmert rebuffed UN chief Kofi Annan's calls for a swift end to Israel's air and sea blockade of Lebanon.

After talks with Mr Annan, Mr Olmert said the siege would only be lifted once the ceasefire terms were fully implemented.

This included the release of two Israeli soldiers whose capture by Hezbollah militants sparked the conflict.

But a Lebanese Hezbollah cabinet minister said there would be no unconditional release of the soldiers - the pair would only be freed as a result of a prisoner exchange with Israel.

UN efforts to rid Lebanon of cluster bombs have been under way since the conflict ended. Earlier estimates from UN experts had suggested a total of about 100 cluster bomb sites.

Mr Egeland described the fresh statistics as "shocking new information".

"What's shocking and completely immoral is: 90% of the cluster bomb strikes occurred in the last 72 hours of the conflict, when we knew there would be a resolution," he said.

The UN ceasefire resolution which ended the month-long conflict between Israel and Hezbollah was agreed by the Security Council on Friday, 11 August, and came into effect on Monday, 14 August.

Mr Egeland added: "Cluster bombs have affected large areas - lots of homes, lots of farmland. They will be with us for many months, possibly years.

"Every day, people are maimed, wounded and killed by these weapons. It shouldn't have happened."

Mr Egeland said his information had come from the UN Mine Action Co-ordination Centre, which had undertaken assessments of nearly 85% of the bombed areas in Lebanon.

Earlier this week the US state department launched an inquiry into whether Israel misused US-made cluster bombs in Lebanon during the conflict.

A senior White House official told the BBC that the investigation would focus on whether US-made weapons were used against non-military targets.

Blockade defended

At their talks in Jerusalem, Mr Annan and Mr Olmert discussed the deployment of UN troops in Lebanon as well as the continuing blockade.

The UN chief said he hoped Israel would withdraw from southern Lebanon once 5,000 UN peacekeepers were on the ground "in the coming days and weeks".

Annan to see Lebanon destruction

UN Secretary General Kofi Annan is to see first-hand the destruction wrought in south Lebanon during the four-week conflict between Israel and Hezbollah.

Mr Annan landed at the southern port of Naqoura, home to the UN peacekeeping force, after flying in from Beirut.

The force is to be significantly expanded under the UN-backed ceasefire, which ended the fighting.

The UN chief will travel on to Israel, as he continues his regional tour to try to bolster the two-week old truce.

On Monday, Mr Annan was jeered by Hezbollah supporters in south Beirut.

The secretary general toured the bomb-damaged area following talks with Lebanon's political leaders.

Mr Annan said he would urge the Israeli government to lift its blockade of Lebanon's ports and airports, imposed at the start of the conflict.

He also called on Hezbollah to free two Israeli soldiers, whose capture on 12 July triggered the fighting.

Villages wrecked

Mr Annan flew by helicopter from Beirut to Naquora, in an area still occupied by Israeli troops and tanks.

From there he will take an airborne tour over some of the areas in southern Lebanon most heavily bombarded by Israel during the 34-day conflict.

The BBC's Jon Leyne in Naqoura says although Mr Annan received a rough reception in south Beirut, most people in southern Lebanon do want more UN peacekeepers deployed.

He says many villages are in ruins and unexploded rockets, bombs and mines litter the ground.

Local people are reluctant to return to their homes near the border until the last Israelis have pulled out, our correspondent adds.

Israel has said it will not withdraw until the expanded UN force is deployed alongside the Lebanese army in areas currently occupied by Hezbollah forces.

EU states have pledged some 7,000 troops towards the force's 15,000-strong target.

On Monday the Italian government approved sending 2,500 troops - the largest national contingent so far.

The force - comprising engineers, marines, special forces and bomb disposal experts - will set sail for Lebanon on Tuesday.

Initially they will serve under French command, but Italy will take over leadership of the force in February.

Israeli probe

Mr Annan is due to travel to Israel for talks with Prime Minister Ehud Olmert, before continuing on to Iran and Syria, countries with close links to Hezbollah.

Israel is looking for better guarantees that Hezbollah will not rearm and has said its blockade against Lebanon will remain in place until an arms embargo is implemented against the militant group.

Mr Olmert has announced that two governmental committees of inquiry will be set up into the handling of the conflict in Lebanon - one dealing with political matters, the other military affairs.

This falls short of demands for an independent state commission which would have had the power to recommend that top officials step down, the BBC's Nick Thorpe in Jerusalem reports.

Mr Olmert's critics are likely to accuse him of trying to dodge criticism, but he says there is no time for a full blown investigation.

Speaking in Haifa on Monday, Mr Olmert admitted to "failures" during the offensive, but defended his decision to launch the campaign.

Seized journalists freed in Gaza

Two foreign journalists working for US organisation Fox News in Gaza have been released by their kidnappers after nearly two weeks in captivity.

American Steve Centanni and New Zealander Olaf Wiig of were dropped off at a Gaza City beach-front hotel.

Mr Centanni said they had been forced at gunpoint to say on video that they had converted to Islam.

Both men appealed to other journalists not to let their experience discourage them from working in the Gaza Strip.

Over the past two years, a number of foreigners have been kidnapped in Gaza.

All have been freed unharmed but the Fox crew's abduction was one of the longest in Gaza in years.

Their captors had issued a Saturday deadline for the US to agree to their demand for the release of "Muslim prisoners" in America - a demand rejected by Washington.

Forced statement

The pair were seized from their vehicle near the Palestinian security services' headquarters on 14 August, and held by a previously unknown group calling themselves the Holy Jihad Brigades.

Mr Centanni told Fox News the two had been forced to convert to Islam at gunpoint.

"I have the highest respect for Islam... but it was something we felt we had to do because they had the guns and we didn't know what the hell was going on," he said by telephone from Gaza City.

In a video released by the captors on Sunday, the journalists are shown reading haltingly from prepared statements in which they criticise Western intervention in Iraq and Afghanistan.

US President George W Bush and UK Prime Minister Tony Blair are accused in the statement of fanning the flames of anger in the Muslim world.

'Story must be told'

First footage of the pair after they were dropped off at Gaza's Beach Hotel showed them hugging colleagues inside the hotel lobby before running up the stairs.

The pair later appeared at a brief news conference alongside Palestinian Prime Minister Ismail Haniya in which they spoke of their joy at being free and concerns that their abduction might deter other foreign journalists from reporting in Gaza.

"I hope that this never scares a single journalist away from coming to Gaza to cover the story because the Palestinian people are very beautiful and kind-hearted," Mr Centanni said.

"The world needs to know more about them. Don't be discouraged."

Mr Wiig also urged journalists not to be put off, saying that "would be a great tragedy for the people of Gaza".

After the news conference the men travelled to the Erez border crossing in the northern Gaza Strip and crossed into Israel.

'A honey day'

Mr Wiig's wife, former BBC News presenter Anita McNaught, who was also at the news conference, thanked Palestinian officials and Fox News for their efforts in getting the men released.

She had been prominent in calling for the men's release and met Mr Haniya to discuss the kidnappings.

Mr Centanni's brother Ken said the family was overjoyed after he called him in California with news of the release. "It was the best phone call I've ever had," he added.

New Zealand Prime Minister Helen Clark thanked "the Palestinian authorities" for their "wholehearted support and hard work" in freeing Mr Wiig and his colleague.

Mr Wiig's father Roger said: "There is an Arabic saying - one day honey, the next onion. This is a honey day, it really is."

Push to boost UN force in Lebanon

Renewed efforts are under way to build up troop numbers for an expanded UN peacekeeping force for Lebanon.

EU officials are meeting in Brussels to try to establish which countries are willing to contribute to the force.

The UN has been disappointed by the response so far from European nations, and says a bolstered force is urgently needed to enforce the fragile truce.

Many nations have been hesitant to commit troops until there is greater clarity about the force's mandate.

In particular, they want clearer guidelines over the degree to which peacekeepers will be expected to disarm Hezbollah guerrillas.

US brushes off 'crap'

The White House has made light of reports alleging that John Prescott said George Bush had been "crap" on the Middle East peace process.

Tony Snow, a White House spokesman, said: "The president has been called a lot worse and I suspect will be."

Mr Snow added that President Bush would have to face "piquant names" being hurled at him from time to time.

The deputy prime minister said the reports of his comments in a private meeting with MPs were inaccurate.

However, Mr Snow added pointedly: "The president talks regularly with Prime Minister Blair, who is the prime minister.

"Prime Minister Blair has made it clear: he is going to remain a firm ally to the United States in the war on terror."

He said both men "have taken some hits" in the polls but saw their primary obligation as protecting national security.

Labour MP Harry Cohen said the remark came during a private, "robust" meeting on Tuesday with fellow Labour MPs.

The Labour MP said he believed Mr Prescott's comment had been "an honest and good point, well made".

Mr Cohen said Mr Prescott's "crap" comment had been specific to the US efforts on the road map.

Road map

It was not a view of President Bush generally, the Bush administration as a whole, or the Bush administration's general Middle East policy, he added.

He said Mr Prescott claimed he had only supported the Iraq war "because they were promised the road map".

The comments were said to have been made at talks with Muslim MPs and other Labour MPs with constituencies representing large Muslim communities.

Mr Cohen said Mr Prescott's other reported comment - calling Mr Bush a "cowboy" - was a joke related to his own recent difficulties over a cowboy outfit gift he was given last year.

'Cheering him on'

Colin Brown, who is the deputy prime minister's biographer, said that this was "the type of language" used by Mr Prescott.

"It's a shorthand, it's very pithy, it's not diplomatic, and I hope that he doesn't get into any diplomatic hot water about it," he told BBC News 24.

"But the fact is, a lot of people are cheering him on."

For the Lib Dems, Norman Lamb, said: "John Prescott does not always use the most appropriate language, but if these reports are to be believed then his instincts on the Middle East are certainly preferable to Tony Blair's."

Mr Prescott has been Tony Blair's deputy since he came to power in 1997. Mr Blair is on holiday at the moment, leaving Mr Prescott in charge of the government.

UN drive to agree Lebanon force

Intense negotiations are under way to form the UN peacekeeping force planned to back up the ceasefire between Israel and Hezbollah.

The UN hopes to get 3,500 troops on the ground in southern Lebanon within two weeks, mostly from France.

No countries have yet formally pledged troops, although several have said they will. UN officials say there is concern about the force's rules of engagement.

French Foreign Minister Philippe Douste-Blazy is in Beirut for talks.

He is expected to meet Lebanese Prime Minister Fouad Siniora to discuss conditions for the deployment of French troops.

The ceasefire between Hezbollah and Israel has entered its third day, and is continuing to hold, despite sporadic violence.

But a spokesman for UN Secretary-General Kofi Annan described it as "extremely precarious" and said the most urgent task was to get troops on the ground.

The Israeli Foreign Minister, Tzipi Livni, is in New York for talks with Mr Annan about how to implement the ceasefire in full.

The UN aim is to boost the limited existing force, Unifil, as soon as possible, enabling it to take over positions as Israel withdraws and a 15,000-strong contingent of Lebanese troops moves in.

The multinational force would later be boosted to the full 15,000 soldiers agreed in the UN ceasefire resolution passed on Friday.

Lebanon says it will start moving its own 15,000-strong force towards the south this week, while Israel says it could pull out within 10 days.

But although 45 countries have attended UN meetings to discuss planned deployments, none have yet made formal commitments to send troops - including France, which the UN says it hopes will provide the backbone for the force.

France, Italy, Turkey, Malaysia and Indonesia have indicated they will make significant contributions, and a dozen other countries have also expressed interest in helping.

Foreign ministers from Turkey and Malaysia were expected in Beirut for talks on the issue.

A senior UN official said all countries wanted clarification about the rules of engagement, the BBC's Bridget Kendall reports from the UN.

There is clearly concern at the apparent reluctance to pledge soldiers, our correspondent says.

Sporadic violence

In south Lebanon, aid agencies are trying to deliver badly-needed food and medicine, while the UN has warned returnees of danger from unexploded ordnance.

Mid-East hope as ceasefire begins

A UN-brokered ceasefire ending more than a month of fighting between Israel and the Lebanese militant group, Hezbollah, has come into force.

Israeli air strikes continued until 15 minutes before the truce began, hitting areas in the east and south of Lebanon.

Israel has said its troops will remain in Lebanon until an international peacekeeping force can take control.

More than 1,000 Lebanese and 155 Israelis have been killed since the conflict began on 12 July.

As the ceasefire came into effect at 0500 GMT, Israel said it would continue to maintain an air and sea blockade of Lebanon. It also said troops would return fire if they came under attack.

There was no immediate comment after the ceasefire began from Lebanese officials or from Hezbollah.

Israel's cabinet overwhelmingly approved the ceasefire plan on Sunday, but Lebanese cabinet talks about disarming Hezbollah were postponed, as fierce fighting continued.

Overnight Israeli raids killed at least seven Lebanese in the east, and one person died in a strike on a Palestinian refugee camp near the southern city of Sidon.

Israeli still has thousands of troops deep inside southern Lebanon after expanding its ground offensive throughout the weekend. However, some Israeli forces did start withdrawing as the ceasefire came into effect.

This is not a war of clear-cut positions and front-lines, the BBC's Jim Muir reports from the Lebanese city of Tyre, and the chances of incidents happening despite the truce are very high.

Most of the many thousands of people who have fled the area will be cautious about starting to return until they have seen the ceasefire hold for at least some days, he adds.

The start of the ceasefire was preceded by a violent day on both sides of the border.

At least 23 civilians were killed in Lebanon, while seven Israeli soldiers were killed in action, and Hezbollah fired 250 rockets into Israel.

Fragile truce

According to the Haaretz newspaper, Mr Olmert ordered Israeli forces to begin observing the terms of the ceasefire at 0200 on Monday (2300 GMT) after meeting with Defence Minister Amir Peretz and senior army staff.

Israel seizes south Lebanon town

Israeli troops have seized the southern Lebanese town of Marjayoun, a day after the cabinet decided to expand ground operations, eyewitnesses say.

Troops entered the town, 9km (5.5 miles) into Lebanon, as well as nearby villages overlooking the Litani river.

Forces also advanced on the town of Khiam, to quell Hezbollah rocket fire.

The army says the action is not the start of a broader offensive, which officials say has been delayed to give more time for diplomacy on the crisis.

Wednesday saw fierce fighting in southern Lebanon, with 15 Israeli soldiers killed in action - the highest number in a single day since the conflict began almost a month ago.

More than 1,000 people, most of them civilians, have now been killed in the hostilities, the Lebanese government has said. More than 100 Israelis, most of them soldiers, have also been killed.

In other developments:

• Hezbollah rockets have killed two Arab Israelis, including a small child in the village of Deir al-Assad

Israeli jets have struck a lighthouse in central Beirut

Threats and diplomacy

Heavy clashes were reported in the area around Marjayoun after armoured columns crossed the Lebanese border overnight.

On Wednesday the Israeli cabinet backed a push towards the Litani river, which lies up to 30km (18 miles) from the border.

Speaking hours after the Israelis announced their expanded ground offensive, Hezbollah's leader said his guerrillas would turn southern Lebanon into a graveyard for Israeli soldiers.

Sheikh Hassan Nasrallah endorsed a government plan to send 15,000 Lebanese soldiers to the south.

But he repeated his opposition to the idea of sending international troops to the border region to disarm the Shia militia, as demanded by the Israelis and a draft UN resolution.

At the UN, diplomats are attempting to reword the draft calling for a ceasefire, to take in Lebanese and Arab League demands for an immediate Israeli withdrawal.

On Wednesday differences surfaced again between France and the US - which co-sponsored the original draft - leading some diplomats to express concerns that diplomacy could collapse.

But the BBC's Bridget Kendall at UN headquarters says that there is now a mood of cautious optimism.

The five permanent members of the Security Council held a late-night meeting focusing on the main sticking points - how to get agreement on a ceasefire and Israeli troops out of southern Lebanon, without allowing Hezbollah to rebuild their positions.

Correspondents say the members states are considering a French proposal to deploy Lebanese forces alongside the existing UN force, which would be strengthened, as the Israelis begin a phased withdrawal.

The US has yet to respond - so far it has insisted that any Israeli withdrawal can only follow the deployment of a new, robust multi-national force.

The new proposal is being discussed in members states' capitals before talks resume on Thursday.

Rice seeks speedy Mid-East truce

US Secretary of State Condoleezza Rice says the US will seek a UN resolution calling for a ceasefire in the Israeli-Lebanon crisis this week.

Earlier, UK Prime Minister Tony Blair said there should be "maximum pressure" for a UN resolution to end the attacks.

Israel has agreed a 48-hour halt to air strikes in Lebanon while the deaths of 50 civilians at Qana are investigated.

More than 30 children died in Sunday's attack, the deadliest Israeli raid since hostilities began on 12 July.

Speaking after talks with Israeli officials in Jerusalem, Ms Rice said the US will call for UN Security Council action on a comprehensive settlement.

She said it will comprise three parts: "a ceasefire, the political principles that provide for a long-term settlement and the authorisation of an international force to support the Lebanese army in keeping the peace."

"As I head back to Washington, I take with me an emerging consensus on what is necessary for both an urgent ceasefire and a lasting settlement," Ms Rice said.

"I am convinced we can achieve both this week," she added.

Earlier, Mr Blair, on a trip to the US, said he was optimistic of the chances of an end to hostilities.

While calling for "maximum pressure" to get the Security Council resolution passed, he also called for "maximum restraint" in the region and welcomed Israel's 48-hour ceasefire in the south to allow the deaths at Qana to be investigated.

Suspension in force

There were Israeli air strikes in eastern Lebanon early on Monday, but Israel said they came before its suspension came into effect.

Israeli jets carried out two raids near Yanta, 5km (three miles) from the Syrian border, at 0130 (2230GMT Sunday), Lebanese security sources told the Associated Press.

An Israeli army spokesman told AP that the flights over southern Lebanon were only suspended from 0200 (2300GMT).

Israel's ambassador to the UN, Dan Gillerman, told the BBC the suspension would allow time for a probe and for civilians to leave the area.

"We're doing this in order to allow a full investigation into what happened in Qana, " he said, "and also in order to create a window for the UN to evacuate people from southern Lebanon, who want to leave southern Lebanon."

Retaliation pledge

However, Israel is reserving the right to take action against any targets it says are preparing attacks against it.

UN 'shock' at Lebanon bomb deaths

The UN Security Council has expressed "shock and distress" at the deaths of four of its peacekeepers in an Israeli bombing raid in Lebanon this week.

It follows nearly two days of talks in which the US resisted China's calls for sterner condemnation of Israel.

About 600 Lebanese civilians have died since the conflict began more than two weeks ago, the heath minister has said.

Some 51 Israelis - 18 of them civilians - have been killed by the Lebanese guerrilla group Hezbollah.

The Lebanese minister, Mohammad Khalifeh, said roughly one-third of the country's dead were believed to still be buried under buildings bombed by Israel.

Overnight into Friday morning, Israel says it struck another 130 targets across Lebanon.

Israel has accused Hezbollah of instigating the violence, after it captured two Israeli soldiers in a cross-border raid on 12 July.

UN clash

The UN Security Council released a policy statement - which has less force than a resolution - expressing dismay at the deaths of the peacekeepers after days of fierce debate.

US opposition resulted in a final draft that was significantly different to the version first put forward by China and other countries.

Calls for a joint Israeli-UN investigation into the peacekeepers' death were dropped, as was any direct condemnation of a "deliberate attack against UN personnel".

Israel's UN ambassador, Dan Gillerman, welcomed the council's "fair and balanced" statement.

Israel has apologised for the deaths of the peacekeepers, who were bombed on Tuesday at their base in southern Lebanon, saying it was an accident.

UN officials said they contacted Israel a dozen times before the bombing, asking them to stop firing, which Israel did not.

China, which lost one of its peacekeepers in the bombing, had been pushing for a harsher condemnation of Israel but the US opposed this.

Israeli bomb kills UN observers

Four United Nations observers have been killed in an Israeli air strike on an observation post in south Lebanon.

UN Secretary General Kofi Annan said he was "shocked" at the "apparently deliberate targeting" of the post. Israel has expressed "deep regret".

Israel earlier said it would control an area in southern Lebanon until international forces deployed.

The force will be discussed at international crisis talks to be held in Rome on Wednesday.

The meeting is being attended by US Secretary of State Condoleezza Rice and Mr Annan, as well as foreign ministers and top officials from five European and four Arab countries.

BBC diplomatic correspondent Bridget Kendall said the Italian prime minister and others believe a quick ceasefire to be the main priority.

But the US and Britain will not push for a ceasefire unless root causes of the conflict are addressed, she adds.

The summit will take place without a delegation from Israel.

Observers sheltering

Ms Rice will attend the talks after ending her tour of the Middle East on Tuesday.

More than 380 Lebanese and 42 Israelis have died in nearly two weeks of conflict in Lebanon, which began after Hezbollah captured two Israeli soldiers in a cross-border raid on 12 July.

The UN in Lebanon says the Israeli air force destroyed the post, in which four military observers were sheltering.

It said the four, from Austria, Canada, China and Finland, had taken shelter in a bunker under the post after it was earlier shelled 14 times by Israeli artillery.

A rescue team was also shelled as it tried to clear the rubble.

"I am shocked and deeply distressed by the apparently deliberate targeting by Israeli Defence Forces of a UN Observer post in southern Lebanon," Mr Annan said in a statement from Rome.

Unifil has been operational in the border area since 1978 and is currently 2,000 strong.

Hezbollah's leader, Hassan Nasrallah, has vowed the group will continue its rocket attacks on Israel.

Mr Nasrallah told Hezbollah's al-Manar television that the militant group would fire rockets deeper into Israel and would counter any Israeli advance into southern Lebanon, and criticised what he called an Israeli-US plan for a "new Middle East".

"There is no way that we can accept any humiliating conditions on us, our people or our country... especially after all these sacrifices... we are open to political discussions and solutions with flexibility, but the dignity and national interest is a red line."

In other military action:

• The Israeli army said it had killed a senior Hezbollah commander, Abu Jaafar, in fighting in southern Lebanon

  ---

  Israeli jets bomb Lebanese cities

  

  Israeli warplanes have struck at suspected Hezbollah sites in Sidon and the capital Beirut.

  In Sidon, 14 people were injured and a mosque was destroyed in the first strikes on the southern port city.

  The UN's humanitarian chief Jan Egeland has been touring shattered districts of Beirut, and said the devastation was "a violation of humanitarian law".

  Meanwhile, at least two people have died after Hezbollah militants launched rockets at the Israeli city of Haifa.

  A volley of explosions on Sunday set sirens wailing and emergency services racing through the streets, says the BBC's Raffi Berg in Haifa, on Israel's northern coast.

  Reports say at least one car travelling on a main road in Haifa was hit, and a house was badly damaged.

  An hour after the first volley of explosions, a second huge blast shook the city.

  'Block after block'

  Mr Egeland arrived in southern Beirut on Sunday just hours after Israeli strikes on the Hezbollah stronghold, and the ruins of high-rise apartment blocks were still smouldering.

  Mr Egeland expressed shock that "block after block" of buildings had been levelled.

  "It makes it a violation of humanitarian law," he said.

  Mr Egeland appealed for both sides to put a halt to attacks, and urged Israel to allow the secure passage of aid.

  Amid growing concerns about the hundreds of thousands of civilians displaced by the bombing, Israel has eased some restrictions on Lebanon's blockaded ports to allow aid into the country.

  Envoys to press Israel

  Three European envoys are to hold talks with Israel on Sunday, ahead of a visit by the US Secretary of State.

  Israeli officials are scheduled to meet German Foreign Minister Frank-Walter Steinmeier and French Foreign Minister Philippe Douste-Blazy, who has warned of a spiral of violence.

  UK Foreign Office Minister Kim Howells will also travel to Israel for talks, having already accused its government of imposing a collective punishment on Lebanon in its 12-day campaign against Hezbollah fighters.

  And US Secretary of State Condoleezza Rice is travelling to the Middle East on Sunday.

  Ground clashes

  Along with southern Beirut and Sidon, there were Israeli bomb attacks on the Bekaa valley and explosions were heard near the southern city of Tyre on Sunday.

  Israel says its forces have driven Hezbollah guerrillas out of the hilltop village of Maroun al-Ras close to the Israel border, where six Israeli commandos were killed earlier this week.

  The report has not been confirmed independently and Hezbollah's al-Manar TV station reported earlier on Saturday that fighting was under way in the village.

  There are substantial numbers of Israeli forces near the border, and military sources suggest that there will be continued incursions in the coming days.

  Israel insists it has no plans for a large-scale invasion and its ground forces are only entering Lebanon to destroy Hezbollah hideouts that cannot be attacked from the air.

  Fleeing civilians

  Israel had warned residents in 14 villages in a swathe of southern Lebanon to leave by Saturday evening.

  The BBC's Martin Asser in the southern city of Tyre described long queues of taxis and cars negotiating bomb-cratered roads and making detours around destroyed bridges.

  Many civilians from villages in the region had gathered in the city during the week and are now trying to leave. However, many people say they are reluctant to move without UN protection.

  ---

  Lebanon evacuation gathers pace

  

  Foreign governments are stepping up the evacuation of their citizens from Lebanon, as Israeli warplanes carry out a seventh day of air strikes.

  France and Italy have shipped 1,600 Europeans to Cyprus, and UK warships are set to move thousands of Britons.

  The UN has warned of a humanitarian disaster as Lebanese flee their homes.

  In Israel's latest strikes, 11 Lebanese soldiers were killed at a barracks near Beirut. Hezbollah has continued to fire volleys of rockets across the border.

  Israel launched its assault and blockade after Hezbollah fighters captured two of its soldiers last Wednesday.

  About 230 Lebanese people have been killed since then - the vast majority of them civilians, but including about 30 soldiers. The number of Hezbollah fighters killed is not known.

  Twenty-four Israelis have died - 12 civilians and 12 members of the military.

  Israeli Prime Minister Ehud Olmert has reiterated his government's demands for the captured soldiers to be freed without condition and for Hezbollah to be disarmed.

  Israeli Foreign Minister Tzipi Livni held talks on Tuesday with a UN team trying to negotiate a ceasefire, but said the soldiers' release and the deployment of the Lebanese army in the south would have to precede a ceasefire.

  Mass evacuation

  Her comments came as tens of thousands of foreigners were set to leave Lebanon by land, sea, and air.

  On Tuesday morning, a ferry chartered by France took 1,200 Europeans to Cyprus.

  ---

  UK evacuation ships near Beirut

  

  The first Royal Navy warships have arrived in the Middle East to evacuate British citizens stranded in Lebanon.

  But the operation to rescue up to 10,000 Britons will not start until the blockade on Beirut is lifted, possibly in days, the Foreign Office has said.

  HMS Illustrious and HMS Bulwark are expected to arrive by Wednesday.

  The elderly, children and families will leave first and a reception centre is being set up in Cyprus, said Foreign Office Minister Kim Howells.

  More than 120 Lebanese have died since clashes with Israel began on Wednesday and 12 Israeli civilians have been killed from Hezbollah rockets.

  A Foreign Office spokesman said Navy warships which had already been in the Mediterranean had arrived in the region and were near Beirut.

  But he could not say how many or which ships they were.

  All Lebanese ports were blockaded, he said, so an evacuation could only happen from a port such as Beirut with Israeli and Lebanese co-operation.

  A Foreign Office team and a military team had arrived in Beirut by helicopter to prepare an evacuation.

  Earlier Mr Howells told BBC Radio 5Live that the evacuation could begin on Wednesday and embassy staff were working hard to identify those who had to leave straight away.

  Children

  He said: "They may be elderly people, children, families with children; they may be people who suddenly have found themselves there, perhaps on a business trip.

  "We've got to try and identify those people first, which our embassy is working very very hard, night and day, to do."

  Mr Howells also confirmed that contingency plans had been made to set up a reception centre in Cyprus.

  ---

  Israel steps up Lebanon offensive

  

  Israel has attacked Beirut airport and launched raids across southern Lebanon killing 27 people, in a major offensive after two of its soldiers were seized.

  Israeli strikes also hit a TV station run by the militant group Hezbollah, which captured the soldiers on Tuesday and has demanded a prisoner exchange.

  The rocket strikes hit the airport's runway, forcing its closure and the diversion of flights

  Hezbollah has retaliated by firing rockets into northern Israel.

  One person has been reported killed.

  Israel has said it holds Lebanon responsible for the soldiers' capture and views it as an "act of war".

  The Beirut airport is Lebanon's only international airport.

  It is located in the Lebanese capital's Hezbollah-controlled southern suburbs.

  The Israeli military confirmed that its aircraft had struck the facility.

  "The airport is used as a central hub for the transfer of weapons and supplies to the Hezbollah terrorist organisation," an Israeli army spokesman said.

  Shortly after Israeli shells began falling on the runways early Thursday, a senior airport official announced the facility was closed and asked scheduled flights to divert to Cyprus.

  There were no immediate reports of casualties at the airport.

  Ten of the dead in the overnight raids were children.

  Overnight raids

  Israel said its jets also hit 40 Hezbollah targets in overnight raids.

  At least 10 members of one family were reported killed in Dweir village.

  Hezbollah guerrillas responded by firing volleys of rockets at the northern Israeli coastal town of Nahariya.

  A 40-year-old woman was killed when her home was struck by a rocket, medics said. The Israeli military confirmed the death.

  Israeli PM Ehud Olmert said the soldiers' capture was an "act of war", but Hezbollah leader Hassan Nasrallah insisted the two would only be returned via talks.

  Mr Olmert said he held Beirut responsible, but Lebanese Prime Minister Fuad Siniora denied any knowledge of the Hezbollah operation and refused to take responsibility for the soldiers' capture.

  Before targeting the airport, Israel launched night air strikes on bridges and roads in southern Lebanon. Many bridges were destroyed.

  The BBC's Kim Ghattas in Beirut says it is the first time in a decade that Beirut airport had been hit by Israeli fire.

  The airport, rebuilt after the civil war, is a symbol of national pride for the people of Lebanon, our correspondent adds.

  ---

  Israel denies 'excessive force'

  

  Israel has rejected criticism that its military offensive in the Gaza Strip is a disproportionate use of force.

  PM Ehud Olmert said there was no other way to stop "the fear, the shocks, the lack of security" of Israeli civilians facing daily rocket attacks from Gaza.

  At least 42 Palestinians and an Israeli have died in raids launched after militants seized an Israeli soldier.

  An exiled militant leader called the Israeli a prisoner of war who must be swapped for Palestinian detainees.

  "We are for a peaceful, quiet resolution. The solution is simple: an exchange, but Israel rejects that," Khaled Meshaal, Hamas' political leader, said at a news conference.

  It was his first public appearance since Cpl Gilad Shalit's capture on 25 June.

  Israeli officials blame the Damascus-based Mr Meshaal for masterminding the abduction and have threatened him with assassination.

  "They talk about one soldier, we have 10,000 detainees [in Israeli jails], including 400 children and 120 women... this is why we are seeking a prisoner exchange," Mr Meshaal said.

  'No re-occupation'

  Israeli aircraft have launched fresh attacks, including strikes on a suspected weapons depot in Gaza city and a car carrying militants in Khan Younis.

  Two people - both militants - died in the attack on a car, while an unidentified man was killed in another attack on a car in the Shejaya area of Gaza.

  Separately, a 15-month-old baby wounded in an Israeli air strike near Khan Younis on 21 June died on Monday of his injuries, medical sources said.

  Overnight, Palestinian militants also fired two Qassam rockets at the Israeli town of Sderot near the Gaza border.

  "I think that once the Qassam shooting will be stopped and the terrorist actions against innocent civilians will be halted altogether, there will be no need for any Israeli action in Gaza," Mr Olmert told foreign journalists in Jerusalem.

  On Sunday, he told ministers the offensive was not a re-occupation of Gaza, but would continue for as long as it took to secure the release of 19-year-old Cpl Gilad Shalit, captured two weeks ago, and stop cross-border rocket attacks.

  On Friday the European Union condemned "the loss of lives caused by disproportionate use of force by the Israeli Defence Forces and the humanitarian crisis it has aggravated".

  Mr Olmert responded on Monday: "Can one measure the anxiety, the fear, the shocks, the lack of security of tens of thousands of people living day in and day out for almost a year under the constant threat of missiles shot at them?

  "When was the last time that the European Union condemned this shooting and suggested effective measures to stop it? We were waiting and waiting and waiting."

  Hamas policy

  Israeli forces have withdrawn from parts of northern Gaza they seized last week, but they remain east of Gaza City and in the south of the Gaza Strip.

  Hamas says Cpl Shalit is alive and being well-treated, and it is demanding Israel release women and children among the 9,000 Palestinians held in Israeli jails.

  ---

  Saddam daughter 'safe in Jordan'

  

  Jordan has said Saddam Hussein's eldest daughter, sought as a fugitive by Iraqi authorities, is living in Jordan under the protection of its royal family.

  Raghad Hussein and Saddam Hussein's first wife, Sajida, appeared on a new list of wanted suspects, unveiled by the Iraqi national security adviser.

  The list of 41 key figures also includes Saddam Hussein's former deputy and the new leader of al-Qaeda in Iraq.

  Mowaffaq al-Rubaie urged countries harbouring suspects to hand them over.

  The national security advisor also announced that the former leader of al-Qaeda in Iraq, Abu Musab al-Zarqawi, had been buried in Iraq in a secret grave.

  Zarqawi died in a US air strike on 7 June.

  His family and al-Qaeda leader Osama Bin Laden had wanted the militant's body returned to his native Jordan for burial, but the Jordanian authorities had refused.

  'Asylum seeker'

  "We are releasing this list so that our people can know their enemies," Mr Rubaie told reporters at a news conference.

  He said those named were "responsible for most of the bombings and indiscriminate killings aimed at... starting a sectarian war between Sunnis and Shias".

  But the Jordanian prime minister said Raghad Hussein had special status in his country.

  "She is the guest of the Hashemite royal family and under its protection as a seeker of asylum," Mr Bakhit was quoted as saying by the official Petra news agency.

  Mr Bakhit said Iraq had not officially asked Jordan to hand over any suspects.

  "Jordan will deal with the issue when it occurs and according to what is appropriate," the Associated Press news agency quoted him as saying.

  Raghad, who fled the US-invasion of Iraq in 2003, has played a part in organising her father's legal defence for crimes against humanity.

  Reward

  The wanted list includes top figures still surviving from Saddam Hussein's ousted regime, including his former right-hand man, Izzat Ibrahim al-Douri.

  Mr Douri has been accused of financing Sunni insurgent groups in Iraq.

  The US has offered a reward of up to $10m for his capture.

  The list also includes known figures in the Islamic strand of the insurgency, such as new al-Qaeda leader in Iraq Abu Hamza al-Muhajir.

  ---

  Air strike on Palestinian PM's HQ

  

  Israeli aircraft have launched an attack on Gaza City, hitting the office of the Palestinian Prime Minister Ismail Haniya.

  The attack comes during an Israeli incursion into Gaza after one of their soldiers was captured last week.

  Witnesses said two missiles hit the south side of the offices of the Hamas-led cabinet, starting a fire.

  Three security guards were reportedly injured in the attack, and at least one Hamas member died in a separate strike.

  'End aggression'

  The attack on the cabinet offices took place at 0145 local time (2245 GMT). The prime minister was not there at the time.

  Israel's defence forces (IDF) confirmed they had carried out an attack on Mr Haniya's office as well as two more Hamas sites in Gaza.

  "The IDF will continue to employ all means at its disposal against Palestinian terrorist infrastructure in the Gaza Strip to allow the unconditional return of Corporal Gilad Shalit," a military spokeswoman said.

  Mr Haniya visited the scene of the attack later, saying: "They have targeted a symbol for the Palestinian people."

  "We ask the international community and the Arab League to take its responsibilities towards our people and intervene to bring an end to this aggression." He met Mr Abbas for an hour after the attack.

  The BBC's Alan Johnston in Gaza says he heard the sound of helicopters, and that witnesses said one rocket struck Mr Haniya's second floor office, setting the building ablaze.

  Another explosion was heard shortly after.

  Abbas hopeful

  The attacks follow a strike on the office of the interior ministry on Thursday.

  Our correspondent says the attacks on ministers' offices were a clear sign the Israelis regarded them as personally responsible for the soldier's fate.

  Other strikes hit a school in Gaza City and Hamas bases in northern Gaza, killing a 34-year-old militant.

  Israeli forces have also moved into the south of Gaza as part of efforts to free the soldier, Corporal Gilad Shalit, 19, captured by militants during a raid on an Israeli army post last week.

  Speaking before the latest strikes, Palestinian leader Mahmoud Abbas said he was still hopeful of a peaceful resolution over the capture of the soldier.

  He said that the door to an agreement had not been closed and that negotiations would continue but he indicated that there were limits to his optimism, said our correspondent.

  The three groups believed to be holding the Israeli have demanded the release of 1,000 prisoners held in Israeli prisons, and an end to the offensive. Israel is refusing to consider a prisoner swap.

  ---

  Israel strikes hit Gaza targets

  

  Israeli aircraft have targeted several sites across Gaza, seriously damaging the Palestinian interior ministry.

  Reports also suggest Palestinian militants have clashed with Israeli special forces in northern Gaza, though Israel denies having troops there.

  Israel sent forces into southern Gaza on Tuesday night in a bid to force the release of a captured soldier.

  On Thursday it said it was delaying a ground advance into northern Gaza amid appeals to allow time for diplomacy.

  But large numbers of troops remain poised for an assault, and several air strikes have been carried out.

  Strikes and skirmishes

  Israel says it struck secret weapons manufacturing facilities in Gaza. Militant training camps and an electrical supply facility are also reported to have been hit, along with offices used by Hamas and Fatah officials.

  Israel shelled open areas to prevent retaliation by militant rocket crews.

  ---

  Israel army launches Gaza assault

  

  The Israeli army has begun a ground offensive in southern Gaza to try to gain the release of an Israeli soldier.

  The incursion comes hours after Israeli aircraft struck at bridges and a power plant in the Gaza Strip.

  Cpl Gilad Shalit was abducted by Palestinian militants during a raid on an Israeli post near Gaza on Sunday.

  Israel had warned of a massive military assault if he was not freed and its tanks have been massing along the border with Gaza for several days.

  It is unclear how many troops are being used in the operation, launched from the Kerem Shalom crossing near southern Gaza.

  This major incursion comes less than a year after Israel pulled soldiers and thousands of settlers from Gaza, which it had first occupied in 1967.

  Since completing the withdrawal in September 2005, the Israeli army has regularly shelled targets in Gaza in an attempt to halt the firing of rockets into Israel by Palestinian militants.

  Many Palestinian militants and civilians have been killed in the shelling.

  'Limited operation'

  The Israeli forces have taken up position near the town of Rafah, shortly after passing Gaza's disused international airport.

  According to the BBC's Gaza correspondent, Alan Johnston, the troops' objective appears to be fairly limited - they have not entered Rafah and are camping on farmland outside the city.

  An Israeli military spokeswoman said the soldiers were planning to set up observation posts.

  The Associated Press news agency quotes Palestinian witnesses as saying the troops had entered the area under the cover of tank shells.

  Palestinian militants anticipating an Israeli assault have been erecting barricades and preparing hideouts and ambush positions.

  A spokeswoman for the Israeli armed forces said they had not encountered any resistance from the Palestinians.

  Israeli military officials have been quoted as saying Prime Minister Ehud Olmert had backed a "limited operation" targeting the "terrorist infrastructure".

  Hours before the ground assault, Israeli jets attacked three bridges and a power plant in the Gaza Strip.

  The Israeli military confirmed the first strike on the bridge was aimed at stopping militants from moving Cpl Shalit.

  The strike on the plant plunged much of Gaza into darkness. It is not yet clear if there were any casualties.

  Cpl Gilad Shalit was captured when Palestinian militants burrowed under the Gaza border and attacked an Israeli army position, killing two soldiers.

  Israel has rejected the militants' demands for Palestinian women and children held in Israeli jails to be freed in exchange for information about the soldier.

  'United front'

  Earlier on Tuesday, rival Palestinian factions, Hamas and Fatah, agreed a document outlining a common political platform.

  As part of the agreement, Hamas said it would accept a Palestinian state on the West Bank and Gaza - while maintaining its refusal to recognise the legitimacy of Israel.

  The Hamas government also authorised the Fatah leader and President of the Palestinian Authority, Mahmoud Abbas, to conduct negotiations with Israel.

  A Fatah official said the aim of the deal was to present a united front in talks.

  The BBC's Middle East editor, Jeremy Bowen, says there is little in the document to hint at a longer-term peace deal with Israel.

  There is no peace process on the ground, he says, and the dynamic of violence in the area has outpaced efforts at peace.

  ---

  Israel rules out prisoner release

  

  Israeli Prime Minister Ehud Olmert has refused to release any Palestinian prisoners in exchange for information about an abducted Israeli soldier.

  He was responding to a demand from three militant groups that women and youths be freed from Israeli jails in return for news on Gilad Shalit.

  Those making the demand included the armed wing of governing party Hamas.

  Mr Olmert also threatened military action to free the soldier seized in clashes on the Gaza border on Sunday.

  The US has renewed its call for the release of Cpl Shalit and urged Israel and Palestinians to exercise restraint.

  State Department spokesman Sean McCormack said it was up to the Palestinian Authority to put a stop to actions such as the seizure of the soldier.

  Hamas political leaders have denied any knowledge of the tank gunner's whereabouts - but they have called for him to be well treated.

  'Time running out'

  Mr Olmert has put the army on standby for an extensive military operation against Palestinian militants to free Cpl Shalit and Israeli tanks and armoured vehicles have been assembling on the Gaza border.

  "The question of freeing [Palestinian] prisoners is in no way on the Israeli government agenda," Mr Olmert said during a speech in Jerusalem.

  

  "There will be no negotiations, no bargaining, no agreements."

  Mr Olmert said that Israel would not allow itself to become the victim of "Hamas-terrorist blackmail", warning that "a large-scale military operation is approaching".

  "The time is approaching for a comprehensive, sharp and severe Israeli operation. We will not wait forever," Mr Olmert said.

  Cpl Shalit is believed to have been taken captive by militants who tunnelled out of Gaza to attack the army post at Kerem Shalom.

  Two Israeli troops and two militants were killed during the raid.

  Diplomatic efforts

  The faxed statement calling for the prisoners' release was signed by the Popular Resistance Committees umbrella group, Hamas's Izzedine al-Qassam Brigades, and the previously unknown Army of Islam.

  It said: "The Occupation [Israel] will not get any information about its missing soldier until it commits to the following:

  "First, the immediate release of all women in prison. Second, the immediate release of all children in prison younger than 18."

  Israel is believed to have incarcerated about 100 women and 300 under-18s among the 9,000 Palestinian prisoners it is holding in its jails.

  Intense diplomatic efforts have been under way since the soldier's disappearance, including mediation by an Egyptian delegation in the Gaza Strip.

  This was noted by the kidnappers themselves, who said their demands were "in response to various mediation efforts and other intervention".

  The statement did not confirm whether the three groups were holding Cpl Shalit captive themselves.

  Israeli officials say they hold Palestinian Authority President Mahmoud Abbas and Prime Minister Ismail Haniya, of Hamas, responsible for the 19-year-old Israeli's safety.

  Correspondents say the crisis could spoil efforts to bind Hamas into a plan implicitly recognising Israel, and may expose divisions between hardline and more pragmatic Hamas elements.

  ---

  Germany presses Iran over uranium

  

  Germany's foreign minister has called on Iran to halt uranium enrichment if it wants to resume negotiations with world powers on its nuclear programme.

  Frank-Walter Steinmeier was speaking after meeting his Iranian counterpart, Manouchehr Mottaki, in Berlin.

  Mr Mottaki, for his part, called for "negotiations without pre-conditions".

  The two men discussed incentives offered by the permanent members of the UN Security Council and Germany, to try to get Iran to halt uranium enrichment.

  Iran is considering the package - which is thought to include trade concessions as well as economic and technical incentives.

  German officials had said they hoped Mr Mottaki would give a concrete indication when Tehran was likely to respond to the package.

  But the Iranian foreign minister was non-committal after the Berlin meeting.

  "We see positive points in the package and parallel to that there are also things that are unclear and we will have questions," he said.

  His comments echoed similar statements made by Iranian officials since the offer was conveyed to Iran earlier this month.

  Waiting for an answer

  The Tehran government has said it is willing to negotiate with the five permanent Security Council members and Germany.

  But Mr Steinmeier made clear the Iranians had to halt uranium work first.

  "I can only reiterate and urge Iran to implement very quickly a suspension of enrichment," he said.

  The BBC's Tristana Moore in Berlin says the German government wants to avoid setting any deadlines for responding to the package, but it is clear that patience is wearing thin.

  Many diplomats are hoping that Iran will use the G8 summit in St Petersburg in mid-July as an occasion to give a formal response.

  However, Iran's president said this week mid-August would be a more likely date.

  After the Berlin talks, Mr Steinmeier said EU foreign policy chief Javier Solana would meet Iranian officials again in the next week to discuss the package.

  Western powers are concerned Iran may use its programme to build a nuclear weapons capability, but Tehran insists it is for purely peaceful, energy purposes.

  ---

  Bush warns Iran on nuclear deal

  

  US President George W Bush has warned Iran it will face progressively tougher sanctions if it rejects an offer to freeze nuclear work and rejoin talks.

  He said Iran risks "further isolation" if it rejects the deal, which includes trade and security guarantees if Iran stops controversial nuclear work.

  The EU and US want Iran to ease fears that is trying to build a nuclear bomb.

  Iran, which maintains its nuclear work does not have a military aspect, has yet to formally respond to the offer.

  Describing the offer as a "step forward", Iranian President Mahmoud Ahmadinejad has said his country is preparing to respond with suggestions of its own.

  Iran will submit its views after its experts have finished examining the proposal, Iranian state TV quoted Mr Ahmadinejad as saying.

  'Real benefits'

  Mr Bush said an Iranian rejection of the offer "will result in action before the Security Council, further isolation from the world and progressively stronger political and economic sanctions".

  Mr Bush has already said Iran has weeks rather than months to respond to the talks offer.

  According to the BBC's State Department correspondent, Jonathan Beale, Mr Bush's latest remarks suggest US patience is wearing thin.

  He says the US has again stepped up the pressure on Iran after weeks of restraint, spelling out the consequences if it does not accept the offer.

  Addressing a US merchant navy academy on the eve of a summit with European leaders in Vienna, the US president said Iran's leaders should act for "more hopeful future for their people".

  "They should accept our offer, abandon any ambitions to obtain nuclear weapons and come into compliance with their international obligations," he said.

  "We hope they will accept our offer and voluntarily suspend these activities so we can work out an agreement that will bring Iran real benefits."

  'Blix warning'

  Iran has been offered a supply of enriched uranium from Russia as part of a range of incentives and penalties presented two weeks ago by the five permanent members of the UN Security Council - the US, UK, France, Russia and China - and Germany.

  They are also thought to include offers of assistance to Iran in building a light-water nuclear reactor for civilian use, plus financial incentives.

  The US recently changed its long-standing opposition to direct talks and said it would join negotiations with Iran if it suspended enrichment.

  According to the AFP news agency, the EU has given Iran until 29 June to respond to the offer.

  The agency quotes diplomats as saying EU foreign policy chief Javier Solana told Iran it must answer to the talks offer by that date, when foreign ministers from the G8 bloc meet in Moscow.

  Iran has insisted it has not received any deadline.

  Meanwhile, the former UN chief weapons inspector, Hans Blix, has reportedly said Iran could produce a nuclear bomb within five years if it is allowed to enrich uranium on an industrial scale.

  "By 2010, 2011 they could probably have a nuclear weapon, if they want it," Mr Blix is quoted by the Associated Press news agency as saying.

  ---

  Iran welcomes nuclear proposals

  

  Iran's President Mahmoud Ahmadinejad has welcomed a package of incentives offered to resolve the dispute over its nuclear programme as "a step forward".

  He said he had instructed his colleagues to consider the offer by the US, Europe, Russia and China carefully.

  The package is thought to include trade and security guarantees, if Iran suspends uranium enrichment.

  In his first response to the offer, the president also insisted: "We are not seeking to develop nuclear weapons."

  The West has demanded that Iran stop enriching uranium - a process it fears may be used in a weapons programme.

  Iran says its programme is solely for the production of energy, and that enrichment is its right.

  Reactor offer

  On Thursday Iran's supreme leader Ayatollah Ali Khamenei said his country would not bow to Western pressure over its nuclear programme, Iranian state media said.

  "The Islamic Republic of Iran will not succumb to these pressures and it considers the continuation [of its nuclear programme] a main objective," he was quoted as saying.

  Iran has been offered a supply of enriched uranium from Russia, as part of a range of incentives and penalties presented last week by the five permanent members of the UN Security Council - the US, Britain, France, Russia and China - and Germany.

  They are also thought to include offers of assistance to Iran in building a light-water nuclear reactor for civilian use, plus financial incentives.

  The US also recently changed its long-standing opposition to direct talks and said it would join negotiations with Iran if it suspended enrichment.

  Diplomats have said the package leaves open the possibility that Iran might be allowed to enrich in the future, if it satisfies international standards.

  Response 'in time'

  Mr Ahmadinejad, on a visit to China as an observer at a regional summit, said Iran would formally respond to the offer "in due time".

  Last week US President George W Bush said Iran had "weeks, not months" to give its formal response.

  A Chinese spokesman said the Iranians were taking the offer "seriously, and... might need some extra time".

  ---

  Israel denies Gaza beach killings

  Israel tonight denied firing a missile onto a beach in Gaza last Friday that killed seven Palestinian civilians and caused the militant group Hamas to call off its ceasefire. Major General Meir Califi, who headed the Israeli army��s investigation into Friday��s incident, said Israel��s shelling of Gaza had stopped by the time the beach explosion occurred. "The chances that artillery fire hit that area at that time are nil," Califi told a news conference.

  The denial came amid continued tit-for-tat firing from either side of the border. A double Israeli helicopter strike today killed eleven people, including two children. Some of the dead were medical workers hit by the second missile after they rushed to help the victims of the first. Two of the Palestinian dead in today's attack were confirmed as members of the hardline Islamic Jihad movement, which the other nine were believed to be civilians. They included two young brothers, aged four and eight, and their father.

  An Israeli military statement said that today's air strike was aimed at terrorists on their way to launching long-range Katyuasha rockets against Jewish settlements. The statement said that 38 rockets had been fired at Israel in the last 24 hours, and more than 100 since last Friday. Friday's explosion on the beach wiped out all but one member of a Palestinian family on a beach on Friday, and has made Huda Ghalia, the 11-year-old survivor of the explosion, the latest icon of Palestinian suffering Amir Peretz, the Israeli Defence Minister, said this mornign that Israel had suspended air strikes after the killings on Friday, but that that restraint was now at an end.

  "We will act with all our might and use all our means against any group that acts against us," said Mr Peretz. "We showed the necessary restraint in light... of the international uproar that resulted, but it��s over." Tonight Mr Peretz stated categorically that the explosion was not caused by the Israeli Defence Forces but did not provide an explanation for what might have caused the blast. Israeli ministers had already suggested that the deaths might have been caused by a Palestinian mine.

  An investigator from international rights group Human Rights Watch told reporters in Gaza earlier that evidence pointed to Israel having fired the shell, but he had to leave the door open to the possibility that the explosion was caused by something else. Around 30 people were injured in today's bombing. A spokesman for the militant group, Islamic Jihad, said that three of its members were travelling in a vehicle hit by a missile and that two, including its chief rocket launcher, were killed. Witnesses said that most of the civilian casualties occurred when an Israeli helicopter launched a second missile after a crowd had gathered. Mahmoud Abbas, the Palestinian President, condemned the attack, one of the heaviest in recent years, as "state terrorism".

  Gaza��s Shifa hospital was overwhelmed by the arriving wounded, some of whom were treated on the floor. At the hospital��s morgue, where the bodies of the dead children lay, angry women shouted, "Death to Israel, Death to the occupation!" Outside, Kader Abib, an Islamic Jihad leader in Gaza, told protesters: "What happened today is a brutal massacre committed against innocent civilians and fighters from our group... The Zionist enemy insists on shedding Palestinian blood and we insist on going ahead with our Jihad and resistance. God willing the resistance groups... will have a harsh response. All options are open for us."

  Today's cross-border violence followed a night of vicious infighting between members of Mr Abbas's Fatah faction and the Hamas-led Palestinian Government, which led to the resignation of one of the only independent members of the cabinet, Judeh Mourqos, the Tourism Minister. Offices belonging to the Palestinian parliament and cabinet were set on fire and fire engines were prevented from reaching the scene by gunmen from the Al-Aqsa Martyrs Brigades and even police officers. An MP was kidnapped and clashes between security services loyal to the two factions erupted again, killing two people in Rafah, where Hamas militants fired rocket propelled grenades at a Fatah-dominated security building.

  ---

  Nuremberg protest over Iran visit

  

  Hundreds of people have gathered in Nuremberg to protest against the Iranian leader ahead of a World Cup match between Iran and Mexico.

  The protesters, who include local Jewish community and Iranian exile groups, denounced Mahmoud Ahmadinejad for casting doubt on the Holocaust.

  Iranian Vice-President Mohammed Aliabadi is attending the match.

  Demonstrators said their anger was targeted at the Iranian leadership and not the country's football team.

  But Iranian football fans have expressed their irritation, saying football and politics should not be mixed.

  "Unwelcome"

  The BBC's Ray Furlong is at the demonstration which he described as "a sea of blue and white Israeli flags".

  Bavaria's Interior Minister Gunther Bechstein described Mr Ahmadinejad as a criminal.

  "If he comes to Germany, only his diplomatic immunity will save him from arrest," he told the demonstrators.

  Alex Delomann, a German Jew from Cologne said his great-grandparents were shot by the Nazis in Ukraine.

  "I'm protesting against the Iranian government because I do not think it's OK if somebody claims that my great-grandparents disappeared just like that," he told the Associated Press news agency.

  Earlier, police broke up a small counter-demonstration of supporters of the far-right National Democratic Party who were dressed in Iranian jerseys and holding Iranian flags in support of Mr Ahmadinejad.

  Political fallout

  One of the biggest fears the Germans have for the World Cup is that the Iranian president will come to Germany to watch his team play, our correspondent says.

  ---

  Hamas military wing calls off Israel truce

  BEIT LAHIA, Gaza Strip (AP) — Hamas' military wing backed out of a truce Friday after an Israeli artillery strike against suspected rocket-launching sites in Gaza hit a family beach picnic, killing seven people, including three children.

  "The earthquake in the Zionist towns will start again," said a leaflet distributed at a Hamas rally Friday night. "The resistance groups ... will choose the proper place and time for the tough, strong and unique response."

  Israel and the Palestinians declared the truce in February 2005. Hamas, which has killed scores of Israelis in suicide bombings, has largely abided by the cease-fire.

  Friday's attack fueled anger spawned by a fatal Israeli airstrike Thursday on a top militant commander in the Hamas-led government. Tens of thousands of people, including angry militants defiantly shooting in the air, packed a southern Gaza soccer stadium for the man's funeral.

  In the West Bank, Palestinian President Mahmoud Abbas condemned what he called a "bloody massacre" in Gaza and called on the international community, including the United States, Europe and the U.N. Security Council, to intervene.

  Abbas, a moderate who leads Fatah, is eager to restart long-stalled peace talks with Israel, and was expected Saturday to formally announce a July 31 date for a national referendum on establishing a Palestinian state alongside Israel.

  Hamas Prime Minister Ismail Haniyeh sent a letter to Abbas on Friday urging him not to hold the vote and to continue negotiations over the plan. He said the referendum would divide the Palestinian people and instead proposed forming a national unity government with Fatah.

  "The idea of the referendum now on the table carries many dangers," Haniyeh wrote. "I'm afraid it will cause a historic rift that will hurt the Palestinian cause for decades to come."

  Public opinion polls show the two-state proposal enjoys widespread support.

  The Israeli army said it attacked northern Gaza Strip areas that Palestinian militants use to fire homemade rockets at Israel. But one artillery strike appeared to go dramatically off course.

  The shells struck a crowd at a beachside picnic, killing seven and wounding more than 30, Palestinian Health Minister Bassem Naim said. A woman and two children younger than 2 were among the dead, medical officials said. All the dead were believed to be related.

  The barrage destroyed a tent and scattered body parts along the beach. A panicked crowd screamed and ran around in confusion as paramedics carried the bodies away.

  The death toll in Gaza was the highest since Hamas took office in March after winning legislative elections.

  Sami Abu Zuhri, a Hamas spokesman in Gaza, said the attack showed "the Zionist occupation ... does not distinguish between civilian children and freedom fighters."

  The Israeli military said its chief, Lt. Gen. Dan Halutz, ordered a halt in artillery attacks in the area while an investigation was conducted.

  "We regret any harm caused to innocent civilians," army Capt. Jacob Dallal said.

  Israel offered medical assistance, including evacuation to hospitals in Israel, to the wounded.

  The latest violence began after an Israeli airstrike killed Jamal Abu Samhadana, the highest-profile militant commander that Israel has slain in four years. He recently was commander of the Hamas government's private militia.

  Hamas, sworn to Israel's destruction, interpreted the attack as an assault on its government and warned Israel that Abu Samhadana's death would be avenged.

  "All options are open for the resistance groups to deliver a message to the enemy that must equal the magnitude of Abu Samhadana's loss," Hamas lawmaker Mushir al-Masri told Hamas Radio.

  It was unclear whether Hamas, which suspended its suicide bombing war against Israel in February 2005, would take direct action against Israel or simply back other factions' operations, as it has done in the past.

  Unidentified militants in the Gaza Strip fired four rockets into Israel on Friday, hitting a building in the southern town of Sderot but causing no casualties, the military said. Israel retaliated with artillery fire.

  Israel frequently targets sites used by Palestinian militants to fire rockets toward Israel. Israel carried out at least three airstrikes, including one that killed three militants after they fired a rocket into Israel.

  Abu Samhadana, the leader of the small Popular Resistance Committees faction, was revered in Gaza as a key figure in Palestinian rocket attacks against Israel.

  A suspect in a deadly bombing of a U.S. convoy in Gaza in 2003, he maintained strong ties with the various Palestinian factions and belonged to one of the most powerful clans in the teeming Rafah refugee camp.

  Hundreds of gunmen escorted Abu Samhadana's body from the morgue to his house and then through the streets of Rafah on the way to the stadium. They fired thousands of bullets in the air, chanting, "God is great!" and "Revenge! Revenge!"

  Rival militant factions, including gunmen affiliated with Abbas' Fatah Party, joined the procession, displaying rocket launchers, assault rifles and rocket-propelled grenades.

  The prayer service proceeded quietly, and mourners streamed out of the stadium afterward toward the cemetery. Some chanted "God is great!" and "We are ready to redeem you with our souls and our blood!"

  The funeral was the largest in Gaza since Hamas leader Abdel Aziz Rantisi was killed in an Israeli airstrike in April 2003.

  As a key Israeli target, Abu Samhadana moved stealthily, switching cars and hideouts. Just a few days before his death, he told The Associated Press in a back alley interview that the U.S. government and its people would "pay a dear price" for leading bruising economic sanctions against the Hamas-run Palestinian Authority for its refusal to disarm militants and recognize Israel.

  He said he had security measures in place against Israeli attack.

  "They don't catch me. I hunt them," he boasted.

  ---

  Bush encouraged by Iran response

  

  US President George W Bush says Iran's initial response to international proposals on the future of its nuclear programme appear to be a positive step.

  Iran's chief nuclear negotiator, Ali Larijani, said the package of proposals contained "positive steps", but said there were also "ambiguities".

  The proposals have not been made public but the BBC News website has learned that they include light water reactors.

  Tehran says it will consider incentives but refuses to halt enrichment.

  Caution

  President Bush said he was encouraged by Tehran's response, but only time would tell if the Iranians were serious.

  However, he told reporters: "It sounds like a positive step to me".

  The president said he wanted to resolve the crisis diplomatically.

  "The choice is theirs to make. I have said the United States will come and sit down at the table with them so long as they're willing to suspend their enrichment in a verifiable way," he said.

  The BBC's Jonathan Beale in Washington says rarely has the exchange of words between Washington and Teheran sounded so encouraging.

  But there are still signs of caution, our correspondent says, and mutual suspicion could easily resurface.

  The US says that it wants to give Iran space and time to consider both the incentives and potential penalties, but still expects an answer within weeks, our correspondent says.

  The US earlier warned Iran a rejection of the proposals could bring UN-imposed penalties.

  National pride

  Western diplomatic sources have confirmed to the BBC News website that the deal on offer includes permission for Iran to buy spare parts for civilian aircraft made by US manufacturers, and the provision of light water nuclear reactors and enriched fuel.

  Other incentives are said to include the lifting of restrictions on the use of US technology in agriculture and support for Iranian membership of the World Trade Organisation.

  The package was delivered to Tehran by the EU foreign policy chief Javier Solana.

  ---

  Abbas pushes for statehood poll

  

  Palestinian leader Mahmoud Abbas has confirmed he will call a referendum on his plan for statehood that implicitly recognises Israel's right to exist.

  A date for the referendum is due to be announced on Tuesday.

  The move was announced as efforts to persuade the Hamas government to accept the idea of a Palestinian state co-existing with Israel failed.

  Hamas does not recognise Israel, and has already said any referendum would be illegal.

  On 25 May, Mr Abbas, the Palestinian Authority president, gave factions 10 days to accept a plan or he said he would call a referendum on the issue.

  Monday's talks broke down one hour before the deadline expired.

  "In light of recent contacts, President Abbas will decide the date of the referendum after a meeting of the PLO executive committee" on Tuesday morning, a statement from his office said.

  'Ultimatum'

  Hamas reacted angrily. Spokesman Sami Abu Zuhri insisted that the talks must continue.

  "You cannot raise the sword of ultimatum," he said.

  He also reiterated the group's view that the referendum plan was not the way forward.

  Prime Minister Ismail Haniya of Hamas has said Palestinian law does not allow for such a vote.

  Tension between Fatah and Hamas has been growing steadily since the latter won general elections in January.

  On Monday, armed supporters of Hamas stormed a TV office in Gaza, complaining of bias towards Fatah.

  Hamas itself denied any responsibility for the attack.

  Fatah recognises Israel, but Hamas officially wants an Islamic state in Israel, the West Bank and Gaza. Its charter calls for Israel's destruction.

  ---

  Tehran warns of fuel disruptions

  

  Iran's Supreme Leader Ayatollah Ali Khamenei has warned that fuel shipments from the Gulf region could be disrupted if the US makes a "wrong move".

  In a speech on state TV, Ayatollah Khamenei also said accusations that Iran intended to make a nuclear bomb amounted to a "sheer lie".

  He insisted Iran would not give up its right to produce nuclear fuel.

  Tehran has agreed to study proposals drawn up by six world powers to defuse the row over Iran's nuclear programme.

  The proposals are due to be delivered by the EU's foreign policy head, Javier Solana, within days.

  The precise details of the proposals are not known, but they aim to persuade Iran to give up its nuclear work - a step which Iran has repeatedly said it will not take.

  'No bomb'

  In his speech on Sunday, marking the 17th anniversary of the death of his predecessor Ayatollah Khomeini, Ayatollah Khamenei said suggestions Iran was pursuing a nuclear weapons programme were a lie.

  "We do not need a nuclear bomb. We do not have any objectives or aspirations for which we will need to use a nuclear bomb. We consider using nuclear weapons to be against Islamic rules," he said.

  The ayatollah launched a scathing attack on the US, which he said was the most hated country in the world.

  "How do you talk about human rights and opposition to terrorism when your government has prisons like Guantanamo and Abu Ghraib?" he asked.

  He said the US was trying to influence world public opinion with their "frenzied propaganda" but questioned whether there was indeed an international consensus against Iran's nuclear programme.

  Islamic countries, Non-Aligned Movement nations and other independent countries all backed Tehran, the Iranian leader said.

  He warned the US action on Iran could disrupt energy supplies.

  "If you make a wrong move regarding Iran, definitely the energy flow in this region will be seriously endangered," he said.

  He did not specify how the supplies would be disrupted.

  US Secretary of State Condoleezza Rice brushed off the warning.

  "I think we shouldn't place too much emphasis on a threat of this kind," she told Fox News.

  "I think something like 80% of Iran's budget comes from oil revenue, and so obviously it would be a very serious problem for Iran if oil were disrupted on the market."

  Iran has the world's second biggest proven oil reserves after Saudi Arabia and the second biggest gas reserves after Russia.

  Proposals

  Iran's President Mahmoud Ahmadinejad has said Tehran will consider proposals from the five permanent members of the UN Security Council, plus Germany, to defuse the tensions.

  The proposals have not been made public but sources say they could include giving Iran a nuclear reactor and an assured supply of enriched uranium.

  But President Ahmadinejad repeated that Iran would never bargain away its "legitimate and legal right" to produce nuclear fuel.

  In Singapore, US Defence Secretary Donald Rumsfeld played down those comments, saying Iran was not in a position to respond until it had seen the proposals.

  Mr Rumsfeld said the US had agreed to the proposals because progress in multilateral talks had "arrived at a point where it seemed not to be moving forward".

  ---

  US offers direct talks with Iran

  

  The US says it is ready to join direct multilateral talks with Iran on its nuclear programme if Tehran suspends disputed nuclear activities.

  US Secretary of State Condoleezza Rice said the US would join EU nations in talks if Iran suspended uranium enrichment and reprocessing work.

  President Bush said he believed the issue could be solved diplomatically.

  The Iranian state news agency dismissed the offer as a "propaganda move", in the first reaction from Iran.

  EU countries and the UN nuclear watchdog welcomed the offer, which is seen as a significant US policy shift.

  Washington broke off diplomatic ties with Iran in 1979 and the two sides have had little official contact since.

  Proposal

  Ms Rice said "as soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table".

  The move was to show US commitment to a diplomatic solution and "to enhance the prospects for success", she said in a statement.

  Ms Rice also urged Iran to "thoroughly consider" a package currently being agreed by the US and EU nations aimed at persuading Tehran to abandon its nuclear plans.

  She is set to meet the five permanent members of the UN Security Council and Germany in Vienna to discuss the package.

  Ms Rice recognised Iran's right to a civilian nuclear programme, but condemned what she called Iran's support for terror.

  When asked about the possibility of pursuing a military option against Iran, she said Mr Bush "was not going to take any of his options off the table".

  Speaking to journalists after Ms Rice's statement, Mr Bush said America was ready to take a leadership role on the issue.

  Correspondents say the US move emphasises diplomacy rather than confrontation.

  Analysts believe that in one bold move Washington has regained the diplomatic advantage, with the onus now on the Iranians to respond.

  'Added weight'

  In Vienna, International Atomic Energy Agency (IAEA) head Mohammed ElBaradei welcomed the US move.

  It was also backed by the EU foreign policy chief and talks participants France, Germany and the UK.

  ---

  Hamas militia returns to streets

  Members of a controversial Hamas militant force have made a limited reappearance on the streets of Gaza.

  This came after the Hamas-controlled government had ordered the force back to their bases on Friday.

  That withdrawal was an effort to reduce violent tensions between the Hamas men and their rivals, who are linked to the Fatah faction.

  For several days a force of well-armed Hamas men had been deployed on the streets here.

  But they disappeared almost completely early on Friday.

  They had been withdrawn in what the Hamas-controlled government described as a move to reduce friction with Fatah party loyalists.

  Redeployment

  Now, though, the Hamas men are back in a few key areas, such as Gaza City's main square.

  Hamas always made clear that it had no intention of disbanding the force.

  It described Friday's pull-back as a mere redeployment.

  The government said that the new unit would continue with its law enforcement policing mission and that it would be deployed where ever it was necessary to do that - hence, apparently, the reappearance of the militants in some areas.

  Meanwhile, members of an armed group loyal to the Fatah faction have staged a demonstration in the heart of Gaza City.

  ---

  Bush urges Israel on peace talks

  

  US President George W Bush has urged Israeli Prime Minister Ehud Olmert to resume direct talks with Palestinians.

  Mr Bush said he believed a settlement could still be reached with Palestinian Authority President Mahmoud Abbas, and condemned the militant group Hamas.

  However he described Israeli plans for unilateral redrawing of Israel's boundaries in the West Bank as "bold".

  Mr Olmert said Israel could pull out of of the West Bank, while retaining major population centres, if talks failed.

  Mr Bush's comments appear amount to an agreement that the White House would not stand in the way of the unilateral redrawing of borders if the Palestinians fail to negotiate, says the BBC's Justin Webb in Washington.

  Speaking after the two men met at the White House, Mr Bush said he believed a negotiated settlement could still be reached between Israel and Palestinian Authority President Mahmoud Abbas.

  "I believe, and Prime Minister Olmert agrees, that a negotiated final status agreement best serves both the Israelis and the Palestinians and the cause of peace," he said.

  The US president made a distinction between Mr Abbas, who he said "speaks out for peace", and the militant group Hamas "who does not".

  Hamas, which has formed a government after winning parliamentary elections in January, does not recognise Israel and has rejected calls for a permanent end to violence.

  Mr Bush said a settlement should be based on the roadmap plan for Middle East peace agreed in 2002 - which speaks of the existence of two democratic states.

  'Concession'

  For his part, Mr Olmert said he would exhaust all options for a negotiated agreement before setting Israel's final borders.

  He is proposing a withdrawal from the West Bank, involving tens of thousands of settlers, as part of a plan to unilaterally redraw the borders of the Palestinian territories.

  But the Israeli prime minister reiterated he would not negotiate with Hamas until it "renounced terrorism" and recognised Israel's right to exist.

  "Despite our sincere desire for negotiations, we cannot wait indefinitely for the Palestinians to change," he said.

  ---

  Israel's PM starts key US talks

  

  Israeli Prime Minister Ehud Olmert has met US Secretary of State Condoleezza Rice in Washington ahead of talks with President George W Bush.

  Tuesday's talks will be the first official meeting between the two since Mr Olmert was elected last month.

  Israel's plan for a unilateral pullout from the West Bank and the security situation in Gaza are expected to be on the agenda.

  Concerns over Iran's nuclear programme are also expected to feature in talks.

  The meeting comes at a critical time as chaos continue to spread in the Palestinian territories, the BBC's James Westhead says.

  Both the US and Israel are seeking a strategy to deal with the new Hamas-led Palestinian government, which has refused to renounce violence or recognise Israel.

  Mr Olmert is expected to present his proposal to evacuate settlers from parts of the West Bank and unilaterally redraw the borders of the Palestinian territories.

  But senior White House officials say it is highly unlikely the US will endorse any plans that do not involve negotiations with the Palestinians, our correspondent says.

  Israel and the US agree that there can be no negotiations with Hamas, but Washington is hoping to break the stalemate by urging more talks with Palestinian President Mahmoud Abbas, our correspondent says.

  On Sunday, however, Mr Olmert told CNN that Mr Abbas did not "have even the power to take care of his own government".

  Getting acquainted

  The talks at the White House are also expected to cover Iran and fears about its controversial nuclear programme.

  But the meeting will also be the first real opportunity for the two leaders to get acquainted, the BBC's Jonathan Beale says.

  Mr Olmert has already stressed the importance of his country's strategic relationship with the US and wants to show that Israel is in step on a range of issues.

  He will also be anxious to find out how the US will use its influence to help ease tension in Palestinian territories, where the violence has flared up between rival security forces, our correspondent says.

  But US officials have suggested they are not expecting dramatic results.

  "At this point this is as much a getting-to-know-you meeting," White House spokesman Tony Snow said.

  "I don't expect anything formal, but the two of them obviously are going to be talking about ways to keep moving forward," he said.

  Iranian President Mahmoud Ahmadinejad has dismissed a possible European offer of incentives to induce Iran to suspend its nuclear enrichment programme.

  He likened the incentives, which European negotiators are said to be considering, to the offer of "walnuts and chocolates" in exchange for gold.

  France, Germany and the UK are thought to be discussing plans to offer Iran a light-water reactor.

  Iran denies accusations among Western powers that it is seeking nuclear arms.

  France, Germany and the UK had been due to meet the US, Russia and China on Friday, but this has been delayed.

  A spokesman for the foreign office in London said this was to allow for more detailed discussion of the offer.

  The meeting is now expected to be held in the next 10 days.

  'Bitter experience'

  Meanwhile Iranian Foreign Ministry spokesman Hamid Reza Asefi said his government would offer its own economic incentives to Europe to recognise its right to enrich uranium.

  "Iran's 70-million population market is a good incentive for Europe," he was quoted as saying by local media.

  The BBC's Frances Harrison in Tehran says Mr Asefi's remarks made fun of the Europeans' intense diplomatic efforts.

  And speaking to supporters in the central Iranian city of Arak, Mr Ahmadinejad said the Europeans were treating Iran like a child:

  "They say they want to give us incentives! Do you think you are dealing with a four-year-old child to whom you can give some walnuts and chocolates and get gold from him?"

  Mr Ahmadinejad said Iran simply would not accept suspension of its nuclear work again, having agreed to it for two years and found it was a "bitter experience".

  And he warned that the West should not force governments who have signed the nuclear Non-Proliferation Treaty (NPT) to pull out of it.

  Iranian suspicions

  On Tuesday, the three EU states were reported to be considering reviving an offer to Iran of a light-water nuclear reactor as part of a package to persuade it to suspend nuclear fuel enrichment and research and avoid possible UN Security Council sanctions.

  A reactor was tentatively offered in a previous European package of incentives in August that was swiftly rejected by Iran, says the BBC's Frances Harrison in Tehran.

  The EU's latest reported initiative comes as the US and some European governments seek a tough resolution on Iran at the UN Security Council.

  China and Russia - both veto-holding members of the Security Council - do not want to support any resolution that might eventually lead to further resolutions threatening sanctions or military action.

  In Tehran, many suspect the latest package of European incentives is aimed more at wooing Russian and Chinese support than really striking a deal with Iran, our correspondent says.

  ---

  US to renew full ties with Libya

  

  The US is to renew full diplomatic relations with Libya after deciding to remove it from its list of countries that support terrorism.

  The US has not had normal relations with Libya since 1980, and blamed it for the 1988 Lockerbie bombing.

  It lifted many economic sanctions and restored some ties in 2004 after Libya renounced weapons of mass destruction.

  The US secretary of state said Libya had since shown a "continued commitment to its renunciation of terrorism".

  Announcing the move to renew diplomatic ties, Condoleezza Rice praised Libya for its "excellent co-operation" in the US-led war on terror.

  Washington will upgrade its liaison office in the Libyan capital, Tripoli, to a full embassy.

  Monday's decision was the result of successful diplomacy and came after a careful review of Libya's behaviour since 1993, a senior state department official said.

  David Welch, US Assistant Secretary of State said it showed that when a state "adhered to international norms [it] will reap concrete benefits".

  Tripoli hailed the move as "a significant step on the way to strengthening links" between the two countries.

  Accepting Lockerbie

  Correspondents say the move was a highly anticipated decision that Libya felt was long overdue.

  ---

  Putin and Abbas set for key talks

  

  Palestinian President Mahmoud Abbas has arrived in Russia ahead of talks with President Vladimir Putin in the Black Sea resort of Sochi.

  Top of the agenda is likely to be Russia's financial aid for the cash-strapped Palestinian Authority.

  Funding dried up from the US and Europe after militant group Hamas won elections earlier this year.

  But Russia has continued its funding, saying it would be wrong to isolate the Palestinians even with Hamas in charge.

  UN mechanism

  Unlike Washington and Brussels, Moscow has refused to condemn Hamas as a terrorist organisation.

  It even invited Hamas leaders to Moscow for talks two months ago

  Last week, Russia transferred $10 million (��.2m) in emergency funds to the authority, which is in deep financial crisis.

  More than 165,000 workers have not been paid for two months.

  In the wake of the scrapping of direct financial aid by the EU and US, a temporary international aid mechanism was negotiated at the UN last Tuesday.

  Palestinian ambassador to Russia, Baker Abdel Munem, said Monday's talks would be a "meeting of two friends".

  Hamas spokesman, Ali Barakat, quoted by the Tass news agency, thanked Mr Putin for his support of the Palestinian people and said he hoped the meeting in Sochi would "invigorate the situation in all areas".

  Mr Mahmoud's Fatah faction remains in a tense power struggle with Hamas following the latter's poll win in January.

  The US says Hamas must renounce violence and recognise Israel - demands dismissed by Hamas.

  ---

  Palestinian PM makes plea for aid

  

  Palestinian Prime Minister Ismail Haniya has appealed for a concerted regional effort to ensure that funds get through to the Palestinian people.

  In an interview with the BBC Arabic Service, he said the Arab League had been given the names of 160,000 unpaid government employees.

  He said the league had been unable to use donated monies to pay their wages because of the Israeli occupation.

  Mr Haniya said efforts were being made to find a way to pay the salaries.

  Mr Haniya said it was not just the government that had the duty of getting the salaries paid: the Palestinian president, financial institutions and Arab countries also shared the responsibility.

  "There must be a unified relationship between all these parties to ensure the funds reach the Palestinian people," Mr Haniya said.

  Mr Haniya confirmed that most Arab states had offered financial aid in line with the recommendations of the Arab summit in Khartoum last March.

  Fuel supplies resumed

  Earlier on Friday, fuel supplies begun arriving at petrol stations in the West Bank, diffusing a mounting crisis over petrol shortages.

  Israeli company Dor Energy, which is the sole supplier of petrol and cooking gas to the Palestinian territories, agreed on Thursday resume deliveries.

  Supplies had been cut off because of unpaid Palestinian Authority bills totalling about $26m (��4m), and petrol stations across the West Bank had been closing as they ran out of fuel.

  The Palestinian Authority has been in deep financial crisis since Hamas took it over, following its election victory in January.

  Western donors have cut off direct financial aid, and Israel has been withholding $55m a month in tax and customs revenues that it collects on the Palestinians' behalf.

  Protest clash

  Reports from the West Bank say Israeli forces have fired tear gas and rubber bullets to break up a demonstration against the barrier Israel is building there.

  A number of people are said to have been injured, including two foreign pro-Palestinian activists and a photographer for an international news agency.

  The protest took place near the village of Bilin, where Palestinian, Israeli and international activists hold a regular weekly demonstration against the barrier.

  Israel says the West Bank barrier is designed to stop suicide bombers from entering, but Palestinians see it as an attempt to grab West bank territory.

  The International Court of Justice issued an advisory ruling in 2004 that the barrier breached international law where it is built on occupied territory and should be dismantled.

  ---

  Iran: Worry over nuke program 'a big lie'

  JAKARTA, Indonesia (AP) — Iran's hard-line president on Wednesday dismissed Western concerns over its nuclear program as "a big lie," even as other voices in the regime appeared to suggest that international cooperation was possible.

  The comments by Iranian President Mahmoud Ahmadinejad came a day after key U.N. Security Council members agreed to present Tehran with a choice of incentives — including energy security and civilian nuclear power — or sanctions in deciding whether to suspend its uranium enrichment program. The move delays a U.S.-backed draft U.N. resolution that could lead to sanctions, or even possible military action, if Iran does not suspend enrichment.

  ISRAELI OFFICIAL REACTS:Time is running out

  Ahmadinejad met with Indonesia's president, who offered to mediate the dispute over Iran's nuclear program. Iran was very receptive to the offer, said a spokesman for Indonesian President Susilo Bambang Yudhoyono.

  "We need to breathe new life into the negotiations," said Dino Pati Djalal, a spokesman for the Indonesian leader.

  Iran will "absolutely not back out" of defending its right to pursue new technology, Ahmadinejad said, accusing the United States and other Western nations of monopolizing the nuclear technology market to secure profits while engaging in non-peaceful proliferation.

  "They pretend that they are concerned about the nature of the nuclear program of the Islamic republic of Iran," he said. "This is a big lie."

  But in a sign of the mixed messages coming from Iran, a representative of the country's supreme leader, Ayatollah Ali Khamenei, said in a letter made public Wednesday that Tehran would consider accepting a protocol that provides for intrusive and surprise inspections by the International Atomic Energy Agency, the U.N.'s nuclear watchdog.

  Iran ended all voluntary cooperation with the IAEA in February, including allowing snap inspections of its nuclear facilities.

  The offered concessions were outlined in the letter from Iran's former top nuclear negotiator, Hassan Rohani, which was reported on Time magazine's website. Besides the inspections, they include renewed negotiations on Iran's enrichment program and caps on the amount of material used in enrichment — all of which have been rejected as inadequate in the past by the West, which publicly continues to insist on a full freeze on enrichment and related activities as a precondition before being ready to start new negotiations.

  In addition, current Iranian nuclear negotiator Ali Larijani said Tuesday that Tehran had no intention of withdrawing from the Nuclear Non-proliferation Treaty and promised to cooperate if the IAEA dealt with the dispute, rather than the Security Council.

  The apparent contradictions between the officials' words and their openness to negotiation has occurred frequently in Iran in recent months as Ahmadinejad has adopted a progressively more confrontational stance.

  Rohani's comments, coming on the heels of Ahmadinejad's letter to President Bush, suggested a "good cop-bad cop" approach to critics of Tehran. Rohani is considered part of the relatively moderate face of the Iranian power structure, compared with the radical Ahmadinejad, who has suggested Israel be wiped off the map and has ridiculed the Western powers suggesting they were powerless to act against his country.

  The contradictions appear to reflect some disarray and a struggle for power within the Iranian regime and its various factions since Ahmadinejad won election in August. Many officials of the previous government appear to feel he is pushing Iran into too confrontational of a stance with the West and have used whatever means possible — including interviews with Western publications — to try to moderate Iran's position or provide at least some type of outreach to the West.

  Washington accuses Iran of seeking to develop nuclear weapons, a charge Tehran denies, saying it aims only to generate energy.

  Representatives of the United States, Russia, China, Britain and France as well as Germany agreed Tuesday to tell Iran the possible consequences of its refusal to halt its enrichment program and the benefits if it abandons it.

  The Chinese and Russians have balked at British, French and U.S. efforts to put a Security Council resolution under Chapter 7 of the U.N. Charter. Such a move would declare Iran a threat to international peace and security and set the stage for further measures if Tehran refuses to comply. Those measures could range from breaking diplomatic relations to economic sanctions and military action.

  Secretary of State Condoleezza Rice said she and her counterparts on the U.N. Security Council agreed to give Iran another two weeks to reconsider its position.

  "We agreed to continue to seek a Security Council resolution but that we would wait for a couple of weeks while the Europeans design an offer to the Iranians that would make clear they have a choice that would allow them to have a civil nuclear program, if that is indeed what they want," Rice said on ABC's Good Morning America.

  "But we're all in agreement that the Security Council has to send a strong message to Iran that it can't continue to defy the international community," she said.

  Britain, France and Germany will prepare a package of incentives and sanctions, a European official said, speaking on condition of anonymity because there has been no official announcement.

  The official said the package is likely to include issues related to energy security and civilian nuclear power. The package will be presented to European Union foreign ministers on the sidelines of an EU meeting in Brussels on Monday, and if approved will be presented to the Iranian government, the official said.

  In Jakarta, Ahmadinejad shrugged off Washington's dismissal of the letter he sent to Bush — the first such letter to an American leader in 27 years. The 18-page letter touched only indirectly Iran's nuclear program. Instead, it focused on a long list of grievances against the United States and sought to build on a shared faith in God to resolve them.

  Rice said Monday the letter "isn't addressing the issues that we're dealing with in a concrete way."

  Ahmadinejad said he was not "disquieted" by the reaction and felt it was the correct decision to send the letter. "If they choose not to answer our question, it depends on them," he said.

  ---

  Palestinians to get interim aid

  

  Middle East mediators have endorsed a "temporary international mechanism" to resume the flow of foreign aid to the Palestinians, the UN has said.

  The arrangement was agreed after talks between the US, UN, EU and Russia in New York. It will last for three months and will take weeks to set up.

  The Hamas-led Palestinian Authority has been facing a financial crisis since US and EU aid was suspended in April.

  The US and EU have demanded Hamas recognises Israel and rejects violence.

  At a press conference on Tuesday, the members of the Middle East Quartet did not specify how much aid the Palestinians would receive under the temporary arrangement.

  UN Secretary General Kofi Annan said the mediators had agreed to help the Palestinians through "a temporary international mechanism - limited in duration and scope - and fully accountable".

  The mechanism, he said, would ensure "direct delivery of any assistance to the Palestinian people".

  US Secretary of State Condoleezza Rice said the EU would manage the interim mechanism.

  She added the US was ready to give $10m (��.4m) in aid to the Palestinians through medical and children's charities, in a separate arrangement.

  The US had initially opposed a plan, brokered by the EU, for aid to the Palestinians to be paid through a sort of trust fund that bypassed the Hamas government.

  Ms Rice said the agreement showed that the international community "is still trying to respond to the needs of the Palestinian people" - and she called on Israel to respond as well.

  She added, however, that the ultimate resolution to the crisis must come from a Palestinian administration that accepted its "responsibility for governing".

  'Great hardship'

  The BBC's Laura Trevelyan in New York says the interim aid mechanism was agreed as it had become apparent that the suspension in foreign aid had not changed Hamas's policy.

  But foreign donors do not want to completely remove the responsibility for paying the Palestinians from their government, our correspondent adds.

  The EU's External Affairs Commissioner, Benita Ferrero-Waldner, said experts would meet in Brussels to work on the interim aid plan.

  But, she said, the mechanism would take weeks rather than days to devise.

  She told the BBC earlier on Tuesday that responsibility for securing aid for the Palestinians rested with a range of parties.

  These parties included Israel - which is withholding taxes from the Palestinians, the international community, the Arab nations and the Palestinians themselves.

  Government salaries

  Many Palestinian government employees have not been paid for the past two months.

  The Palestinian Authority employs some 165,000 people and the UN estimates a quarter of the Palestinian population relies on government salaries.

  The World Bank and UN have warned that the failure to pay the workers could trigger a humanitarian and security crisis.

  Representatives from Saudi Arabia, Egypt and Jordan also met the main mediators in the Middle East conflict on Tuesday.

  They warned the Quartet that failure to resume aid could eventually lead to civil war between the different Palestinian factions, Reuters news agency reported.

  Arab countries and Hamas have been trying to find a way of paying Palestinian workers directly, bypassing the Hamas government, which took office in March.

  They devised a plan designed to enable banks which handle the payments to avoid the US sanctions they might incur for dealing with Hamas.

  Hamas later blamed the US for blocking the plan.

  ---

  US rejects surprise Iran letter

  

  A surprise letter to the US president from Iranian leader Mahmoud Ahmadinejad will not solve the growing nuclear dispute, US officials have said.

  Secretary of State Condoleezza Rice dismissed hopes of a diplomatic breakthrough, telling the Associated Press: "This letter is not it."

  The letter is thought to be the first from an Iranian president to a US leader since Iran's 1979 revolution.

  It came hours before a meeting of UN Security Council members in New York.

  Foreign ministers of the council members plus Germany were due to meet on Monday night to discuss how to proceed with Iran.

  Mr Ahmadinejad dispatched the letter via the Swiss embassy in Tehran.

  In it, he proposed "new solutions for getting out of international problems and the current fragile situation of the world", Iranian officials said on Monday.

  But the White House joined Ms Rice in quickly denouncing the letter.

  "It doesn't appear to do anything to address the concerns of the international community," White House spokesman Scott McClellan told reporters.

  There has been no word on whether the letter mentioned the nuclear dispute, currently one of the major issues between Iran and the US.

  Interviewed by AP, Ms Rice said: "There's nothing in here that would suggest that we're on any different course than we were before we got the letter."

  Mr McClellan would also not confirm whether Mr Bush had personally read the letter, saying only: "I would just leave it at what I said: We've received it."

  Treaty threat

  This development comes a day after Iran's parliament threatened to pull out of the nuclear Non-Proliferation Treaty if Western pressure over its programme increases.

  ---

  Hebron settler eviction under way

  

  Israeli police have begun an operation to evict Jewish settlers accused of illegally occupying a Palestinian home in the West Bank town of Hebron.

  It follows clashes overnight with settler youths throwing stones and firebombs in which at least 13 policemen were wounded, police said.

  Hundreds of security forces were brought in to carry out the eviction, ordered by Israel's high court.

  Three families of settlers have occupied the house since April.

  The house is situated within a Palestinian area of the Old City of Hebron, close to a controversial Jewish enclave and the Tomb of the Patriarchs - a site holy to Jews and Muslims.

  The settlers said they had legally leased the property from its Palestinian owner. But the eviction order said the documents on which the transaction was based had been forged.

  In January, Israeli police removed Jewish settlers who had been squatting in buildings in the city's market since 2001.

  The eviction followed a long legal battle in which the settlers claimed Jews owned plots in the market before the creation of Israel in 1948.

  Hebron - which is home to about 170,000 Palestinians and about 500 Jewish settlers - has been the scene of frequent tensions between the two communities.

  Legal battle

  Television footage showed police officers using a disc-saw to cut through the metal-reinforced door of the house.

  As they did so, settler youths - who had moved in to help fight off the eviction - poured paint on them from above, Haaretz newspaper reports.

  Hours earlier, stones, firebombs and flaming tyres were thrown as youths battled with the security forces.

  Among the 12 wounded officers, seven were taken for medical treatment.

  Army radio reported that five settlers had been lightly wounded. Seven settlers had been arrested.

  The Israeli high court agreed to an army request for the eviction, due on Friday, to be delayed.

  The military was concerned that the operation might not be completed by sundown, the start of the Sabbath.

  But the court ordered that the eviction be carried out by Monday.

  Israel has occupied the West Bank since 1967.

  The international community considers all settlements, including those in East Jerusalem, as illegal under international law, though Israel disputes this.

  ---

  World worried about Iran and nuclear technology, Bush says

  WASHINGTON (AP) — President Bush said Friday that "the world is united and concerned" about Iran's suspected desire to build nuclear weapons and said he will work with other countries to achieve a diplomatic solution to the crisis. Bush's statement came shortly after the International Atomic Energy Agency said that Tehran had enriched uranium and that it persists with related activities in its nuclear program in defiance of the U.N. Security Council.

  Bush said the IAEA statement was an important statement: "It reminds the nations of the world that there is an ongoing diplomatic effort to convince the Iranians to give up their nuclear weapons ambitions." He said the world "is united and concerned about their desire to have not only a nuclear weapon but the capacity to make a nuclear weapon or the knowledge to make a nuclear weapon."

  Bush said he was not discouraged by Iran's vow to continue despite global pressure. "I think the diplomatic options are just beginning," Bush said during an appearance in the Rose Garden. Elsewhere on Friday, Iranian President Mahmoud Ahmadinejad said no Security Council resolution could make Iran give up its nuclear program. "The Iranian nation won't give a damn about such useless resolutions," Ahmadinejad told thousands of people in Khorramdareh in northwestern Iran.

  ---

  Iran 'will harm U.S. interests if attacked'

  Supreme leader Ayatollah Khamenei issues warning

  

  TEHRAN, Iran (Reuters) -- Iran has vowed to strike at U.S. interests worldwide if it is attacked by the United States, which is keeping military options open in case diplomacy fails to curb Tehran's nuclear program.

  Supreme Leader Ayatollah Ali Khamenei made the threat on Wednesday, two days before the U.N. nuclear watchdog reports on whether Iran is meeting Security Council demands to halt uranium enrichment.

  Iran says it will not stop enrichment, which it says is purely for civilian purposes and not part of what the United States says is a clandestine effort to make atomic bombs.

  "The Americans should know that if they assault Iran their interests will be harmed anywhere in the world that is possible," Khamenei was quoted as saying by state television.

  "The Iranian nation will respond to any blow with double the intensity," he said.

  Washington, backed by Britain and France, has been pushing for sanctions if, as it expects, the International Atomic Energy Agency (IAEA) reports that Iran has flouted U.N. demands.

  But Russia and China, the U.N. Security Council's other two veto-holding permanent members, oppose any embargo.

  Iran's nuclear energy head, Gholamreza Aghazadeh, held talks with IAEA head Mohamed ElBaradei in Vienna on Wednesday.

  "The talks were encouraging," Mohammad Saeedi, deputy head of Iran's Atomic Energy Organization, told Reuters, adding the two sides discussed ways to resolve outstanding issues with the IAEA. He gave no details.

  No time

  But a Vienna-based diplomat said before the meeting it would be too late to alter decisively the IAEA report, due to be submitted to the Security Council by Friday, because inspectors would not have time to verify issues.

  "All ElBaradei can do is note any information received and say he could not assess whether it was significant," said the diplomat, who asked not to be named.

  ElBaradei visited Tehran this month but his proposal that Iran "pause" enrichment was rebuffed, diplomats have said.

  British Foreign Minister Jack Straw sought to enlist China's backing on Wednesday, saying Beijing should use its growing diplomatic muscle to solve disputes with international partners.

  "China's support for this goal, as a permanent member of the Security Council, has been valuable already and will be increasingly crucial in securing international consensus in the face of Iran's intransigence," Straw said in London.

  U.S. Secretary of State Condoleezza Rice said on Tuesday it was time the Security Council drafted a Chapter 7 resolution.

  This would be binding under international law and could lead to sanctions or even military intervention, although another resolution would be required to specify either step.

  In response to the U.S. refusal to rule out military action, Iran has warned Washington that its forces in the region were vulnerable. Iran's war games in the Gulf this month were widely seen as a veiled threat to a vital oil shipping route.

  "The security of the Persian Gulf is very well tied up to the world's economic affairs and it would be quite natural for Iran not to sit idle vis-a-vis any military adventure," Iranian legislator Alaeddin Broujerdi told reporters in London.

  Iranian vow

  Iran said on Tuesday it would suspend relations with the IAEA if sanctions were imposed. Diplomats said this could mean withdrawing from the nuclear Non-Proliferation Treaty (NPT).

  President Mahmoud Ahmadinejad on Wednesday reiterated his view Iran could review its NPT and IAEA commitments if it saw no dividends from abiding by international protocols.

  "We hope they fulfil their duties and make it unnecessary for the Islamic Republic of Iran to reconsider its relations with them," Ahmadinejad said.

  Although Iran says it bases nuclear policy on the NPT, it pulled out of the treaty's Additional Protocol -- which allows snap inspections of atomic facilities -- in February after the IAEA referred its nuclear file to the Security Council.

  Iran often says it does not benefit from the NPT's entitlement to shared technology, but Western diplomats say it must prove its goals are peaceful to qualify for this.

  The IAEA has said that after three years of investigation it still cannot confirm that Iran's aims are entirely peaceful, although it has found no hard proof of a military program.

  The agency points to gaps in its information, such as the status of Iran's research into P-2 centrifuges that can enrich uranium faster than the P-1 units it now operates.

  ---

  Iran official threatens to hide nuke program

  Supreme leader says transfer of nuke technology is ready

  

  TEHRAN, Iran (AP) -- Iran threatened Tuesday to begin hiding its nuclear program from the United Nations -- while its supreme leader said Tehran was ready to transfer its nuclear technology to other countries.

  Iran's warning to the U.N. watchdog, the International Atomic Energy Agency, came from Tehran's top nuclear negotiator, Ali Larijani. They were the country's sharpest rebuttal yet ahead of a Friday deadline, set by the Security Council, for Iran to suspend enrichment of uranium, a process that can produce fuel for nuclear reactors or material for warheads.

  "Military action against Iran will not end our program," Larijani said at a conference on the energy program. "If you take harsh measures, we will hide this program. If you use the language of force, you should not expect us to act transparently."

  U.S. Secretary of State Condoleezza Rice immediately shot back, saying Iran's statements were further isolating it from the international community.

  "Iranians can threaten, but they are deepening their own isolation," she said in Athens, Greece.

  The United States has not threatened military action and has said it is pursuing diplomatic option. But U.S. President George W. Bush has said all options, including military force, remain on the table.

  Larijani's comments came a day after Iranian President Mahmoud Ahmadinejad boldly predicted the Security Council would not impose sanctions and warned he was thinking about dropping out of the Nuclear Nonproliferation Treaty.

  On Tuesday, Larijani said flatly that Iran would not abide by Friday's deadline to suspend enrichment, and would halt all cooperation with the IAEA and pull out of the treaty if sanctions were imposed.

  "If you take the first step wrong, the wrong trend will continue. We welcome any logical proposal to resolve the issue. They just need to say why should we suspend," Larijani said.

  IAEA spokesman Marc Vidricaire said Tuesday it would not comment. He said no public statements were planned ahead of director Mohamed ElBaradei's report to the Security Council and the agency's board, expected by week's end.

  Statements on sharing nuclear technology

  The remarks on sharing nuclear technology by Iran's top leader, Ayatollah Ali Khamenei, came as he met with Sudanese President Omar al-Bashir.

  "Iran's nuclear capability is one example of various scientific capabilities in the country. ... The Islamic Republic of Iran is prepared to transfer the experience, knowledge and technology of its scientists," Khamenei told al-Bashir.

  Al-Bashir said last month that his impoverished, war-torn country was considering trying to create a nuclear program to generate electrical power.

  The offer drew a quick response from Rice after she reached the Turkish capital from Athens. She said the United States and all those worried about Iran's program "have to be concerned when there are statements from Iran that Iran would not only have this technology, but would share it, share technology and expertise."

  "That's one of the fears, that there would be that kind of escape, if you will, of technology and expertise," Rice said.

  Such a transfer of technology would be legal as long as it is between signatory-states to the nonproliferation treaty, and as long as the IAEA was informed.

  The United States and European allies are expected to press for binding measures against Iran when the Security Council begins the next round of review of the Iranian case as soon as next week.

  Meanwhile, Israel launched a satellite from Russia on Tuesday to spy on Iran's nuclear program, an Israeli defense official said. A TV report said the launch was successful, but it would be some time before it could be determined if the satellite was operational.

  U.S. allies not embracing sanctions

  Although Rice has recently raised the likelihood of pressing for sanctions, she did not go that far Tuesday when taking questions after a meeting with her Greek counterpart in Athens, saying only that the Security Council must now issue something more concrete than last month's "presidential statement," which gave Iran 30 days to comply.

  China and Russia, which are permanent, veto-wielding members of the council, oppose sanctions and both called Tuesday for more negotiations.

  "We see no alternative to the negotiations process," Russian Defense Minister Sergei Ivanov was quoted as saying by the Interfax news agency while in Beijing for a regional anti-terrorism meeting.

  Chinese Foreign Ministry spokesman Qin Gang urged all parties "to show flexibility," saying the international community should not abandon efforts for a peaceful settlement.

  Iranian defiance

  Tuesday's comments by Larijani were not the first time Iran has threatened to curb cooperation. Several months ago, Tehran announced it would not honor the IAEA's so-called "additional protocol," which gave the agency increased inspection powers.

  But Larijani said this time Iran would suspend its cooperation altogether, if sanctions were imposed.

  "How are you going to prevent our nuclear activities by imposing sanctions? If U.N. Security Council sanctions are to be imposed on Iran, we will definitely suspend our cooperation with the International Atomic Energy Agency," Larijani said. He added that Western countries on the IAEA board "have to understand they cannot resolve this issue through force."

  He also hinted that sanctions or even what he called coercive language from the Security Council would cause Iran to speed up its nuclear activities.

  "You can't set a framework through coercion. If you try to do it by force, our response will be to break such a framework," he said.

  The United States, Britain and France say they have suspicions that Iran is seeking to make nuclear weapons. Iran denies the charge and says its nuclear program is for peaceful electricity generation only.

  Iran could face U.N. sanctions if it does not accede to demands that it suspend its nuclear enrichment program, British Foreign Secretary Jack Straw warned Tuesday.

  "The Iranians, in my judgment, would miscalculate if they believed that Russia or China would block appropriate and effective sanctions, which targeted the regime, not the ordinary population," Straw said in the House of Commons. "Without going into detail, of course we are thinking about these matters actively."

  Ahmadinejad appears to be banking on support from Russia and China to dissuade Washington from pressing a sanctions vote.

  The IAEA says it has since found no direct evidence of an arms program, but it also says the Iranians have not been fully forthcoming.

  ---

  Iran nuclear work 'irreversible'

  Iran has called its uranium enrichment work "irreversible", days before a UN deadline for the programme to stop. Foreign Ministry spokesman Hamid Reza Asefi also said demands for Iran to suspend its nuclear research work were "not on the agenda". The UN Security Council called on Iran to suspend enrichment by 28 April, amid fears it wants to make nuclear weapons.

  Iran - which insists its programme is peaceful - announced this month it had enriched uranium for the first time. The UN Security Council, in a statement issued on 29 March, asked nuclear watchdog the International Atomic Energy Agency (IAEA) to report back within 30 days on whether Iran has complied with the UN call. But Mr Asefi told a weekly news conference: "Iran's uranium enrichment and nuclear research and development activities are irreversible".

  NUCLEAR FUEL CYCLE

  Mined uranium ore is purified and reconstituted into solid form known as yellowcake Yellowcake is converted into a gas by heating it to about 64C (147F) Gas is fed through centrifuges, where its isotopes separate and process is repeated until uranium is enriched Low-level enriched uranium is used for nuclear fuel Highly enriched uranium can be used in nuclear weapons He said that so long as the IAEA report contained "expert assessment", there would be "nothing left to worry about".

  Diplomatic flurry

  "However, if the report comes out and somehow puts pressure on Iran or speaks with a language of threats, naturally Iran will not abandon its rights and it is prepared for all possible situations and has planned for it." The BBC's Tehran correspondent, Frances Harrison, says there has been a flurry of diplomatic activity by Iran in the run-up to the deadline, and some calls internally for a less confrontational approach towards the West on the nuclear issue Mr Asefi said Iran was still discussing with Russia a plan for Iran to enrich uranium on Russian soil. Iran first gave details of the plan in February, and on Saturday, state radio said an outline agreement had been reached, but details were still to be worked out. Our correspondent says that the problem with the plan, which has been seen as a possible solution to the stand-off with the West, is that Iranian officials continue to adamantly rule out halting enrichment research on their own soil.

  Enrichment work

  Iran's announcement that it had enriched uranium for the first time has thrown attention on to its enrichment technology. President Mahmoud Ahmadinejad said earlier this month that Iran was testing a more advanced centrifuge, known as a P-2. The P-2 centrifuge can enrich uranium more quickly, raising fears in some Western capitals that Iran could develop nuclear weapons more quickly than originally thought. Mr Asefi said Iran had not yet used P-2 centrifuges in its enrichment work. "So far, we have never used P-2 centrifuges, and what we have used is P-1 machines. We have informed the agency (IAEA) about that. "No-one can deny Iran from using these devices. However, they have not yet been used," said Mr Asefi.

  Mr Asefi also said there were no plans for Iran to meet the US to discuss the situation in war-torn Iraq. "Nothing has been scheduled and set. Preparations have not even been made for these talks," Mr Asefi told reporters. US Secretary of State Condoleezza Rice had authorised the US ambassador to Iraq, Zalmay Khalilzad, to reach out to the Iranians for direct talks on Iraq, raising hopes that the two sides might also been drawn into discussions on the nuclear stand-off. "We are not in hurry because we have been pessimistic about US intentions as we still are. It is nothing important," said Mr Asefi.

  ---

  Saddam 'did sign death warrants'

  

  Saddam Hussein personally signed documents ordering the killing of 148 Shia villagers in Dujail, handwriting experts have concluded.

  He and seven co-accused face charges for their alleged role in the killings after an assassination attempt in 1982.

  Prosecutors have presented thousands of documents to the court to try to prove a paper trail exists linking the former Iraqi leader directly to the killings.

  Defence lawyers have insisted the signatures are a forgery.

  They have also contested the impartiality of the handwriting experts, who they say are linked to Iraq's current interior ministry.

  The BBC's James Reynolds in Baghdad said the experts' decision was a very significant moment for the prosecution.

  'Death warrant'

  Chief judge Raouf Abdel Rahman had ordered a two-day delay after the previous session earlier this week to allow them more time to evaluate the authenticity of the signatures.

  Among the documents was one, from 16 June 1984, apparently approving the Dujail executions and another from 10 October 1982 - three months after the attempt on Saddam Hussein's life - authorising rewards for intelligence agents involved.

  The judge opened Wednesday's session by announcing the experts' verdict.

  "The experts verified these documents and the signatures of Saddam Hussein were found to be authentic," he told the court.

  Documents apparently bearing the signature of former intelligence chief Barzan Ibrahim al-Tikriti, Saddam Hussein's half-brother, were also ruled to be genuine.

  After a three-hour session, the trial was adjourned until 24 April, so the experts could spend more time examining the signatures of co-defendant Mizher Abdullah Rawed.

  While Saddam Hussein sat quietly throughout the Wednesday's session, Barzan al-Tikriti loudly contested the documents' authenticity.

  "[The] prosecutor is clearly biased; he is using any means to make the accused guilty," he declared.

  The documents, which have not been released publicly, are said to include Saddam Hussein's signature on a "death warrant" ordering the execution of the 148 Shia villagers.

  They were tried by Iraq's Revolutionary Court in 1982 and later executed, allegedly with direct authorisation from the country's president.

  Fresh charges

  Prosecutors have argued that the brutal response was unjustified even by an assassination attempt.

  At earlier hearings, Saddam Hussein acknowledged signing execution orders, saying it was his duty as president of Iraq. But he later appeared to dispute their authenticity.

  If convicted, Saddam Hussein is expected to face the death penalty.

  Earlier this month the court announced he would face new charges of genocide and crimes against humanity.

  Those charges relate to the Anfal military campaign against Kurds in northern Iraq in the late 1980s, in which as many as 180,000 people may have died.

  The case will be tried separately.

  ---

  Pope calls for end to Iran crisis

  

  Pope Benedict XVI has called for a negotiated solution to the Iran nuclear crisis, in his traditional Easter message in St Peter's Square in Rome.

  "May an honourable solution be found for all parties, through honest and serious negotiations," he said.

  He also affirmed Israel's "just right to exist in peace" while calling on the international community to help the Palestinians move towards statehood.

  It is Pope Benedict XVI's first Easter as pontiff.

  His Easter message - "Urbi et Orbi" - was broadcast live on television to more than 50 countries, while about 100,000 people gathered in the square.

  'Peaceful co-existence'

  Speaking on Iraq, the Pope called for peace to "finally prevail over the tragic violence that continues mercilessly to claim victims".

  He also prayed that those "caught up in the conflict in the Holy Land may find peace, and I invite all to patient and persevering dialogue, so as to remove both ancient and new obstacles".

  In an apparent allusion to Iranian President Mahmoud Ahmadinejad's recent threats against Israel, Pope Benedict defended Israel's right to exist.

  But he said it was also important for the Palestinian people to have a "state that is truly their own".

  The pontiff also prayed that leaders and international organisations would strengthen their will to "achieve peaceful co-existence among different races, cultures and religions".

  Addressing the humanitarian crisis in Sudan's Darfur region, the Pope prayed for the spirit of Christ to bring relief to people who were "living in a dramatic humanitarian situation that is no longer sustainable".

  Better living conditions were also needed for millions of people in Latin America, he said.

  Cheers went up among the crowd when the Pope prayed for "harmony" in Italy, an allusion to disputes over the outcome of the recent general election.

  Prime Minister Silvio Berlusconi has refused to concede defeat to opposition leader Romano Prodi, who was declared the provisional winner on Tuesday.

  The pope prayed Italian leaders would be strengthened in a "keen desire to reach the objectives of harmony and authentic development, for the good of all".

  ---

  Iran declares key nuclear advance

  

  Iran's president says his nation has successfully produced the enriched uranium needed to make nuclear fuel.

  Mahmoud Ahmadinejad said Iran had joined the nations with "nuclear technology" but again insisted it did not want nuclear weapons.

  Tehran resumed enrichment research in February. Last month the UN gave Iran 30 days to halt work or face action.

  Iran's announcement comes on the eve of a visit by the head of the UN's nuclear watchdog, Mohamed ElBaradei.

  Western powers fear Iran is developing a nuclear bomb. Iran says its nuclear programme is for civilian use.

  The US responded to the latest news by saying that Iran was "moving in the wrong direction".

  'Pathway of defiance'

  In a televised speech in the north-western holy city of Mashhad, Mr Ahmadinejad said: "I am officially announcing that Iran has joined the group of those countries which have nuclear technology."

  His audience broke into cheers and chants of "Allahu akbar" (God is great).

  Mr Ahmadinejad called on the nation's scientists to press ahead with "industrial-scale enrichment" and urged the West to respect what he called Iran's right to peaceful atomic technology.

  He said the "nuclear fuel cycle had been completed" with the enrichment on Sunday at the Natanz plant.

  ---

  Europe Stops All Payments to Hamas-Led Palestinians

  — The European Union announced today that it had halted payments to the Hamas-led Palestinian government because it had not renounced violence or recognized Israel's right to exist.

  The decision increased pressure on the Palestinians' new cash-strapped government, which has already lost funding through Israel and the United States. "We are not authorizing any payments that go to the Palestinian Authority or through the Palestinian Authority," said a spokeswoman for the E.U.'s executive branch, Emma Udwin, adding that further funding of the Palestinians would be discussed by foreign ministers of the 25-nation bloc when they meet in Luxembourg on Monday. "This doesn't prejudge any decisions they might make," she said.

  The European Union has been the Palestinian Authority's largest donor since the government was created under the 1993 Oslo peace accords. Since Hamas won Palestinian elections earlier this year, it has been warning that the Palestinian Authority would lose that aid unless the Hamas-led government renounced violence, recognized Israel and accepted past peace agreements. Hamas advocates the violent destruction of the Jewish state, but that came into question — briefly — after the Palestinian foreign minister, Mahmoud Zahar, discussed the issue in general in an interview with The Times of London published today. "Let us speak about what is the meaning of the two-state solution," Mr. Zahar said. "We will ask them what is their concept concerning the two-state solution."

  Later today, the Palestinian prime minister, Ismail Haniya, insisted that Hamas had not changed its position. "That is not correct. Where did you hear that?" he said in the town of Khan Younis in the Gaza Strip, Reuters reported. Mr. Haniya criticized the Europeans' cutoff of aid, saying they were "punishing the Palestinian people for practicing" a democratic choice. Explaining the decision, officials in Brussels said the European Union had stopped all direct aid to the Palestinian government and payment of public employees' salaries with E.U. funds through the World Bank. Humanitarian aid is to continue to flow through international and non-government organizations.

  The European Union has considered making direct payments to Mr. Abbas as a way of supporting him while maintaining financial pressure on Hamas. But critics of that approach say it would undo years of effort by the union and other donors to build up Palestinian institutions necessary for eventual statehood. The European Union began providing direct budgetary assistance to the Palestinian Authority in 2000 after Israel, trying to isolate Yasir Arafat, froze monthly transfers of tax and customs receipts collected on behalf of the Palestinians under an economic protocol signed in 1994.

  Europe's direct payments — which totaled more than $200 million from 2000 to 2002 — led to the establishment of a World Bank-monitored trust fund, which is now used by most international donors to disburse funds to the fledgling Palestinian government in return for its willingness to meet certain standards of improved fiscal governance. European Union members provided about $600 million in aid to the Palestinians last year. More than half came from the union's budget while the remainder came from individual member states.

  The European Union released more than 120 million euros, or $147 million, in direct and indirect aid last month, before Hamas took office. Those payments included 64 million euros for the United Nations Relief and Works Agency and 40 million euros for Palestinian energy and electricity bills, paid directly, primarily to Israeli suppliers. The remaining 17.5 million euros was half of the money that had been held back last year because the Palestinian Authority had failed to meet donor-mandated budget constraints.

  The 17.5 million euros was paid to the caretaker government under the moderate Palestinian Authority president, Mahmoud Abbas, on the condition that it be spent before the Hamas government took power. Another 17.5 million from the union's budget remains in the World Bank trust fund.

  Israel is withholding about $50 million in monthly tax and customs receipts to the Palestinian Authority. And the United States has cut off all aid to the Palestinian Authority for day-to-day operations and reconstruction projects, though it said Thursday that it is preparing to redirect some of that money for relief services and civil society in Palestinian areas.

  The Palestinian Authority has said that it needs at least $150 million a month to cover salaries and operations. Last month's salaries for 140,000 Palestinian Authority employees have not yet been paid.

  ---

  Rice: Iran can have nuclear energy, not arms

  U.N. gives Iran 30 days to cooperate on nuclear program

  

  BERLIN, Germany (CNN) -- U.S. Secretary of State Condoleezza Rice said Thursday that Iran does not need to give up on nuclear energy, just uranium enrichment that could lead to nuclear weapons.

  Rice was in Berlin on Thursday for multination talks on Iran's uranium enrichment activities.

  Earlier, the U.N. Security Council unanimously called on Iran to suspend uranium enrichment within 30 days and cooperate with the International Atomic Energy Agency, the U.N. nuclear watchdog.

  Iran's U.N. ambassador, Javad Zarif, said in response that Iran had an "inalienable right" to pursue nuclear energy and told reporters, "we are allergic to pressure and intimidation."

  Rice said after the meeting that the international community must keep pressure on Iran on the nuclear issue.

  "I think this does send a very strong signal to Iran that the international community is united and expects Iran to adhere to the just demands of the international community that its nuclear activities be demonstrably for civilian purposes and that there are ways that Iran can have a civil nuclear program," Rice said. "But it has to be a way that gives confidence to the international community than an Iran that for 18 years was not truthful with the IAEA is indeed conducting only civil nuclear activities."

  Attending the meeting with Rice are ministers representing the other permanent members of the U.N. Security Council -- Britain, France, Russia and China. Together with the United States they are known as the P5.

  Russia and China both urged some caution on the part of the West in its dealings with Iran.

  "Russia does not believe that sanctions would serve the purpose of settling the various issues," said Russian Foreign Minister Sergei Lavrov, while China's foreign minister, Li Zhaoxing, said his country does not want to see more turmoil in the region.

  Germany, which with Britain and France took part in two years of talks aimed at ending the standoff over Iran's nuclear program, also joined the session.

  "We all hope very much that Iran will take this opportunity which is offered to it to enter into negotiations once again, and we here once again call on Iran to cease all its enrichment activities and to reopen way to discussion," German Foreign Minister Frank-Walter Steinmeier said.

  Talks stalled in January when Iran began small-scale uranium enrichment and ended its voluntary cooperation with the U.N.'s International Atomic Energy Agency, which had been conducting surprise inspections.

  The council on Wednesday passed a presidential statement, the result of three weeks of dogged diplomacy that highlighted fissures among the five permanent members. The statement calls on Iran to comply with IAEA regulations within 30 days.

  With the tough negotiations about the U.N. text behind them, Rice said earlier the ministers will "really have an opportunity to look ahead to next steps."

  She called Thursday's talks an "opening discussion" about the diplomatic road ahead regarding Iran, but indicated that targeted sanctions against the Iranian government were likely options.

  "A lot depends on what the Iranians do" in response, Rice said.

  While U.N. diplomacy is expected to focus on the Iranian nuclear issue, Rice predicted the ministers would discuss Iran's support of Palestinian terrorist groups, its interference in Lebanon and Syria and inflammatory rhetoric from President Mahmoud Ahmananijad. She said it all shows the current regime "is a troublesome regime for peace and stability in the Middle East."

  The IAEA raised questions about Iran's nuclear program in a report earlier this month, noting that the Iranians are testing 20 centrifuges capable of enriching uranium and producing enriched uranium in 10 others.

  Those numbers are well shy of the thousands that would be required to produce enough fuel for nuclear weapons. But the Security Council noted that inspectors were "unable to conclude that there are no undeclared nuclear materials or activities in Iran."

  U.S. Ambassador John Bolton said Wednesday's statement sends "a very clear message" that Iran should meet its obligations under the Non-Proliferation Treaty.

  "There's no ambiguity here," Bolton said. "We're waiting for the Iranians to do what they said they were going to do and violated, and the obligations that they undertook by being a member of the IAEA."

  ---

  Israel vote winners seek allies

  

  Informal talks have begun in Israel on a new coalition government after the election victory of the Kadima Party.

  With nearly all votes counted, the party has won 28 of the 120 seats in the Knesset. It was founded four months ago by now coma-stricken Ariel Sharon.

  Possible partners are second-placed Labour and other smaller parties.

  Kadima leader and acting PM Ehud Olmert has vowed to pursue plans to define Israel's final borders. Palestinians urged him not to do so unilaterally.

  Leaders of the militant group Hamas are set to take formal control of the Palestinian government later on Wednesday.

  Low turnout

  Israeli President Moshe Katsav has said formal talks to form a new coalition government will start on Sunday.

  A Kadima official told the Haaretz newspaper he expected a coalition to emerge after the Passover holiday, in about three weeks' time.

  But Mr Olmert could have trouble forming and maintaining a stable coalition, with a margin of victory less decisive than Kadima had hoped, correspondents say.

  Voter turnout was 62.3%, a record low.

  With 99% of ballots counted, the centre-left Labour Party has come second with 20 seats, a 15.1% share.

  Kadima officials said other probable partners included the ultra-Orthodox Shas, with 13, and the Pensioners party, which won seven seats.

  Likud, winner of the last election, was beaten into fifth place with 11 seats.

  Since the creation of Israel in 1948, the country has been governed either by the Labour or Likud parties, which makes the Kadima victory historic.

  Final results are expected on Friday, with election observers still counting the votes of groups including soldiers, diplomats and prisoners.

  Stiff opposition

  Earlier on Wednesday, Mr Olmert told his party he was prepared to hold peace talks with the Palestinians - but would act alone if he had to, in order to establish permanent borders for Israel by 2010.

  ---

  Abbas warns Hamas prime minister

  

  Palestinian leader Mahmoud Abbas has told Hamas he is prepared to act if the incoming Hamas government damages the interests of the Palestinian people.

  He warned prime minister-designate Ismail Haniya that he would "exercise his authority" if the need arose.

  A Hamas spokesman said it was wrong to assume the party's policies would harm the Palestinians.

  The Palestinian Legislative Council convenes on Monday for a confidence vote on the Hamas-dominated cabinet.

  In a letter to Mr Haniya, Mr Abbas said "I will exercise my mandate and authority where and when they are needed to protect the higher interests of the Palestinian people."

  Mr Abbas has previously called on Hamas to recognise Israel and respect previous commitments made by the Palestinian Authority, which Hamas has so far refused to do.

  "Once your government assumes its responsibilities I ask you again to...make the necessary corrections to your programme," the Palestinian leader said in his letter.

  Mr Haniya played down the prospect of a disagreement with Mr Abbas, according to the Reuters news agency.

  "We do not seek to cause a constitutional crisis," he said.

  Under current legislation, the Palestinian president is empowered by law to fire Mr Haniya if his policies are considered harmful to the national interest.

  In January, Hamas won a landslide victory in the Palestinian parliamentary elections, winning 76 seats out of 132.

  On Friday, Mr Abbas had suggested he could hold peace talks with Israel without the need for Hamas to be involved.

  Israel has vowed not to deal with any Palestinian government that includes Hamas, and has called Mr Abbas irrelevant following Hamas' election victory.

  ---

  Abbas denounces Israeli jail raid

  

  Palestinian leader Mahmoud Abbas has angrily denounced Israel's seizure of a leading militant from a West Bank jail.

  Visiting the jail after cutting short a trip to Europe, Mr Abbas said Tuesday's raid was "an unforgivable crime" and a humiliation to the Palestinian people.

  Palestinians across Gaza and the West Bank have gone on strike over Israel's seizure of militant Ahmed Saadat.

  Security forces are on high alert in case of further anti-Western violence and kidnappings as happened on Tuesday.

  The raid in the West Bank town of Jericho began when UK and US monitors left the Palestinian-run prison complaining about lax security.

  Speaking outside the damaged prison, Mr Abbas condemned the Israeli operation as a blow to the Palestinian Authority (PA).

  "What happened in Jericho was an unforgivable crime and an insult to the Palestinian people," he said.

  He described the arrest of Mr Saadat as illegal - and said it had only been carried out to boost the Israeli government's chances in the coming elections.

  Mr Abbas acknowledged that the UK and US had informed the PA a week ago that it would be withdrawing its monitors, but said no date had been given.

  He questioned how the Israeli forces had known so precisely when to start their attack, just minutes after the international monitors were withdrawn.

  UK Foreign Secretary Jack Straw has strongly denied Palestinian accusations of British and US collusion with the Israeli operation.

  British Prime Minister Tony Blair defended the decision to remove the monitors, saying the UK had warned the PA for months about fears for their security.

  Interrogation

  In Tuesday's raid, Israeli forces used tanks and bulldozers to force their way into the jail and grab Mr Saadat, leader of the left-wing Popular Front for the Liberation of Palestine (PFLP), and other inmates.

  Two Palestinians were killed during the raid and a third has since died of his injuries. About two dozen were injured, including guards and prisoners.

  ---

  British office in Gaza set alight

  

  British targets in the West Bank and Gaza Strip have come under attack, after Israeli forces captured a top Palestinian militant.

  Palestinian protesters set fire to the British Council office in Gaza City, angry that UK prison monitors withdrew from a Jericho jail.

  Palestinian Authority president Mahmoud Abbas criticised the US and UK for pulling out the prison inspectors.

  But the UK government said it acted due to fears for their security.

  Israeli forces took control of the jail in the West Bank town of Jericho and killed a guard, demanding the handover of militant leader Ahmed Saadat, who is thought to be behind the killing of an Israeli cabinet minister.

  They also captured five other militants.

  The prison raid has triggered a wave of violence across occupied territories, directed mainly at Western targets.

  The Foreign Office is warning against all travel to the occupied territories.

  Crowds also attacked the British Council office in Ramallah in the West Bank, although no British employees or Palestinian members of staff were hurt in either incident.

  A branch of HSBC in Ramallah was also attacked.

  Mr Saadat and another five Palestinian prisoners had been being monitored by British and US inspectors under an agreement made in 2002.

  But they were withdrawn on Tuesday for what they described as security reasons.

  Some prisoners were eventually marched out of the jail by Israeli forces, but others, including Mr Saadat, initially refused to give themselves up.

  ---

  New 'cold war' looms with Iran

  The United States is developing the concept of a "cold war" with Iran.

  

  It would be a third way between trying to engage with the hard-line government there and attacking its nuclear facilities with the risk of major conflict.

  The idea is that regime or policy change could be effected by the Iranian people themselves.

  However such a cold war might turn into a hot war if Washington decided this approach would not stop Iran from developing the technology needed for a nuclear bomb.

  Shift in UK approach

  Britain is paying a supporting but limited role, with the British Foreign Secretary Jack Straw making a major speech on Iran saying: "Iran is going in the wrong direction" and "Iran and the Iranian people deserve better."

  He said: "Our message is that we want the Iranian people to enjoy the benefits of civil nuclear power and we support their aspirations for a freer, more democratic and prosperous Iran."

  

  This language does not go as far as the developing American policy. Mr Straw says, for example, that an attack on Iran is "inconceivable".

  But it has echoes of it. And it represents a shift in the British approach.

  President Bush himself heralded the Iran policy in his State of the Union speech in January when he said: "Our nation hopes one day to be the closest of friends with a free and democratic Iran."

  That in turn followed his mission statement in November 2003 that he would promote "democracy and freedom in the Middle East".

  Policy disagreements

  But the policy is also born of political disagreement in the Bush administration about the way forward.

  The old policy of engagement with Iran has run into the ground.

  Even its advocates accept that they cannot get round the problem of Iran's method of government. Senior ayatollahs have a veto on reform and blocked reformist candidates in last year's election.

  At the other end of the spectrum, those favouring military strikes against Iranian nuclear installations are having trouble in justifying a policy which would have huge consequences, adding to the problems the US is already facing in Iraq.

  Iran desk

  The third way is led by the Secretary of State Condoleezza Rice herself.

  According to the Washington Post, Iran has "vaulted to the front of the US national security agenda".

  Ms Rice is, like Mr Straw, trying to draw a distinction between the Iranian government and people.

  "Our problem is with the Iranian regime," she said to senators recently.

  Iran is already subject to a trade boycott by the US, and as part of the new effort, the Post says, the State Department has created an Iran desk, increasing its staff working on Iran full time from two to 10.

  There is to be more Farsi language training. Staff are being added in the listening post of Dubai.

  A $75m (?3.5m) fund has been put forward to help Iranian non-governmental organisations and to increase Voice of America broadcasts from one to four hours a day, and eventually to 24.

  Congress has cut some of this money but the thrust of the effort is plain to see.

  How long Washington might wait over Iran is not at all clear.

  After all, it took 50 years for the Soviet Union to fall.

  Timetable uncertain

  Nobody really knows how soon Iran might be able to acquire the technology needed for building nuclear weapons.

  The Israelis have been talking of about a year before Iran reaches the "point of no return" which they define as an Iranian enrichment capability.

  A senior British official also said recently that a year might give Iran time to become skilled in enrichment but that an actual bomb could be five years away. However the official offered no technical justification for these statements.

  The International Institute for Strategic Studies in London issued a report in September 2005 which also said that Iran could, if it went all out, build a bomb by about 2010.

  But the IISS was at the forefront of those saying that Iraq might have weapons of mass destruction, so it has a credibility problem.

  And that assumes that Iran would go for a bomb, which it says it will not.

  The "cold war" approach could buy time for Western policymakers.

  ---

  Moscow offers Hamas talks chance

  

  Russia is due to hold talks in Moscow with a senior level delegation from the Palestinian militant group Hamas.

  It is the first time that a member of the so-called quartet of Middle East peace negotiators will sit down for formal discussions with Hamas.

  President Vladimir Putin invited the group to Monday's meeting after its surprise victory in January's Palestinian elections.

  But the diplomatic offensive is a controversial one.

  Recognition for Israel

  While the rest of the Middle East Quartet - the US, UN and EU - grapples over the imminent prospect of a Palestinian government run by Hamas, Russia has broken ranks to open a dialogue with the group.

  Its political leader, Khaled Mashaal, and other senior Hamas political figures, will meet Russian Foreign Minister Sergei Lavrov and other senior diplomats during their two days of talks.

  Russia will tell Hamas that it must moderate its policy by renouncing violence and adhering to the so-called roadmap to peace and other previous agreements between the two sides.

  This would involve a de facto recognition of Israel's right to exist, something Hamas has always refused to give.

  'Stab in the back'

  The Israeli government has been angered by the Russian initiative. One minister called it "a stab in the back", and Europe and the US still consider Hamas a terrorist organisation.

  But Russia believes Hamas should not be politically isolated and that stretching a hand to its leaders is worth a try.

  A major breakthrough seems unlikely however, as Hamas has yet to show any significant sign of softening its position.

  Nevertheless, this meeting itself will mean a great deal to Hamas because it brings international recognition.

  For Russia, the talks are an opportunity to become a key player in the region as well as help restore its position as a global player. But for Mr Putin, it is a move that's not without risk.

  ---

  Israelis kill five in W Bank raid

  

  Five Palestinians have been killed by Israeli troops in clashes in the Balata refugee camp near the West Bank city of Nablus, Palestinian medics said.

  Three of those killed were militants of the Al-Aqsa Martyrs' Brigades, who shot at Israeli soldiers during a raid.

  Two other young men were shot dead, including one when soldiers opened fire at group of protestors throwing stones.

  Eight Palestinians have now been killed in the biggest incursion in the West Bank since the 25 January election.

  On Sunday, witnesses said two teenage boys from Nablus were shot dead by the Israeli army while throwing stones at Israeli vehicles.

  The army said they shot the teenagers while they were planting explosives.

  Raid

  On Thursday, dozens of Israeli army vehicles and bulldozers entered Balata after the camp had been sealed off from nearby Nablus.

  When one of the armoured vehicles broke down, Palestinian youths began pelting it with stones, witnesses said.

  Ibrahim Saidi, 19, was fatally wounded when the soldiers opened fire at the group of youths, witnesses said.

  The Israeli army said he had been carrying a bomb.

  Later, Naim Abu Saris, 22, was shot dead while on the roof of his home. Israeli soldiers said he was armed.

  Witnesses quoted by AFP news agency said Israeli troops also opened fire on Palestinian rescue workers, wounding an ambulance driver and a nurse. The army said it was investigating.

  Hamas, the militant group which the parliamentary election strongly condemned the Israeli incursion.

  "We urge the international community to live up to its responsibilities and stop this massacre instead of asking our people to stop resisting," said spokesman Sami Abu Zuhri in Gaza.

  After its victory, Hamas has been under pressure to renounce the armed struggle and recognise Israel's right to exist.

  More than two dozen Palestinians have been arrested in the West Bank since an operation to stop militants planning attacks began on Saturday, the Israeli military says.

  The BBC's Matthew Price in Jerusalem says there have been many deaths in the narrow, crowded lanes of Balata, but this week has been one of the worst for some time.

  ---

  Iran offers Hamas financial aid

  

  Iran has offered to help finance the cash-strapped Palestinian Authority governed by the Hamas militant group.

  The offer was announced by senior security official Ali Larijani after a meeting with Hamas politburo chief Khaled Meshaal, state radio reported.

  The decision follows moves by the US and Israel to isolate a Hamas-led government with financial penalties.

  Hamas has also held initial talks with Fatah, which lost January's election, to discuss forming a coalition.

  On Tuesday, Palestinian President Mahmoud Abbas formally asked Hamas to form a government.

  The new administration will be headed by one of the group's leaders in Gaza, Ismail Haniya.

  Fatah had initially ruled out joining its Islamist rival in government, but the two agreed to try to find common ground for a governing partnership.

  "There is an agreement in principle and the intention is there, but we must await the programme," the head of Fatah's parliamentary faction, Azzam al-Ahmed, said after the talks in Gaza City.

  Mr Ahmed told Reuters that Fatah would not join Hamas unless the government adopted President Abbas's vision of negotiating peace with Israel.

  But Hamas, though it has been observing an informal truce, refuses to recognise Israel and has ruled out negotiations.

  Assistance

  Hamas' refusal led to international condemnation and the withdrawal of US aid to the Palestinian Authority last week.

  The Israeli government also froze the transfer of millions of dollars in funds to the authority - a move which the UN has called unhelpful and premature.

  But on Wednesday, Iran said it would help make up the PA's funding shortfall.

  "Khaled Meshaal's request for assistance to enable the [Palestinian] Authority to overcome the existing problems is noted by Iran and we shall definitely help them financially," Mr Larijani told reporters.

  Mr Larijani criticised the US government's decision to withdraw aid and questioned its commitment to democracy.

  "You know very well that Hamas is a genuine popular movement which has always pursued the objective of recovering the rights of the oppressed Palestinian people; but unfortunately the Americans have never paid any attention to this matter," he said.

  "The US decision to stop financial aid shows that they are not seeking to promote democracy in the region, contrary to their claims on the Middle East [road-map] proposal."

  On Monday, Iran's Supreme Leader, Ayatollah Ali Khamenei expressed support for Hamas and called on other Muslim nations to provide financial aid.

  ---

  Hamas 'names its prime minister'

  

  The Palestinian militant group Hamas has chosen Ismail Haniya, one of its leaders in Gaza, to be the next prime minister, reports say.

  Mr Haniya led the Islamist group's national list of candidates in January's parliamentary elections, in which Hamas was the surprise winner.

  Hamas has yet to make a formal announcement of the nomination.

  Israel says it will not deal with a Hamas government unless it renounces violence and recognises Israel.

  Mr Haniya, considered a pragmatist, is thought to be more open to dialogue with Israel than many other Hamas leaders.

  "We have decided to nominate brother Ismail Haniya as prime minister," one senior official told Reuters after Hamas MPs met in Ramallah.

  The formal announcement has been delayed until the inauguration of the Palestinian Legislative Council on Saturday, the official added.

  However, Mr Haniya told Reuters that no decision had been made.

  "Such an important position requires consultations between leaders in the [Palestinian] territories, in prisons and in exile," he said.

  "Nothing official has been reached so far, and when a decision is made, it will be published."

  Mr Haniya rose to prominence in Hamas as a close associate of the group's spiritual leader, the late Sheikh Ahmad Yassin, whose office he ran.

  He was reportedly elected to Hamas' "collective leadership" after Sheikh Yassin and his successor in Gaza, Abdel-Aziz Rantissi, were assassinated by Israel in 2004.

  Hamas made its first nominations for senior parliamentary posts on Wednesday.

  University professors Aziz al-Duwaik, from the West Bank, and Ahmed Bahar, from Gaza, were nominated for speaker and deputy speaker.

  Mahmoud Zahhar, believed to be Hamas' leader in Gaza, was named head of the group's majority faction in parliament.

  Hamas leaders plan to appoint a cabinet within a fortnight of the parliament's first session.

  ---

  Iran and Syria 'incited violence'

  

  The US secretary of state has accused Iran and Syria of fuelling anti-Western sentiment, in a row over cartoons satirising the Prophet Muhammad.

  Condoleezza Rice said both countries had used the opportunity to incite violence and exploit Muslim anger.

  The accusation came after Western embassies came under attack in Iran, Syria and Lebanon.

  Meanwhile the Danish government severed ties with local clerics, saying they had stirred up anti-Danish feeling.

  Radical Danish imams made two visits to the Middle East in December and January to complain about the 12 cartoons to political and religious leaders.

  The cartoons, first published in a Danish newspaper in September, show the Muslim Prophet Muhammad in a variety of humorous or satirical situations.

  They include images of the Prophet carrying a lit bomb on his head and brandishing a sword.

  But one of the clerics, Ahmed Akari, told the BBC the imams carried three extra caricatures of Muhammad that were far more inflammatory than the original 12, and were believed to have been drawn by extremists as part of a hatemail campaign.

  Mr Akari said the imams had added them to their dossier to demonstrate the kind of attitudes that Muslims were facing in Denmark.

  He insisted they were not intended to aggravate reaction in the Middle East.

  Protests against the cartoons have continued, with four killed in an Afghan demonstration.

  The deaths - at a protest by about 400 people in the town of Qalat - bring to 12 the number of people killed in Afghan protests over the cartoons in recent days.

  Afghanistan's top council of Muslim clerics has called for an end to several days of demonstrations.

  In other developments:

  • French magazine Charlie Hebdo becomes the latest to print the cartoons

  • Hackers attack hundreds of Danish websites, posting pro-Islamic messages condemning publication of the images

  • Several hundred people march on the Italian embassy in the Bangladeshi capital Dhaka, but are blocked by police

  • International observers leave their mission in the West Bank town of Hebron, following an attack by hundreds of Palestinian protesters.

  'Sentiments inflamed'

  Speaking at a joint news conference with Israeli Foreign Minister Tzipi Livni, Ms Rice said some countries were behaving responsibly with regard to the row but that others "have also used this opportunity to incite violence."

  "I don't have any doubt that ... Iran and Syria have gone out of their way to inflame sentiments and to use this to their own purposes. And the world ought to call them on it," she said.

  During the day about 200 Iranian demonstrators attacked the UK embassy in Tehran, but were prevented by police from forcing entry to the building.

  The Danish and Norwegian embassies in Iran have also been attacked, while those in Beirut and Damascus were set on fire at the weekend.

  Meanwhile US President George W Bush urged governments to prevent attacks on diplomatic missions.

  "I call upon the governments around the world to stop the violence, to be respectful, to protect property, protect the lives of innocent diplomats who are serving their countries overseas," he said.

  French President Jacques Chirac, however, focused on the European media, condemning decisions to republish the cartoons as an "overt provocation".

  ---

  Israel warns Abbas on Hamas ties

  

  Israel has said it will work with the Palestinian leader Mahmoud Abbas as long as he does not co-operate with Islamic militant group, Hamas.

  Hamas won last month's parliamentary vote in the Palestinian territories.

  The group's leaders are meeting in Cairo to discuss taking charge of the Palestinian government.

  Acting Israeli PM Ehud Olmert, said Israel's co-operation with Mr Abbas was also dependant on the Palestinian government not being led by Hamas.

  "I have no interest in harming Palestinian Authority chairman Abu Mazen [Mr Abbas] as long as he doesn't co-operate with Hamas and as long as the Palestinian government isn't led by Hamas," Mr Olmert told an economic conference.

  Mr Olmert added that Israel would continue transferring monthly tax payments to the Palestinian Authority as long as Hamas was not in control.

  Israel regards Hamas as a terrorist group committed to the destruction of Israel and initially suspended payments unconditionally following the Hamas victory.

  Mr Abbas has said he will ask Hamas to form the next government, but called on it to respect the previous agreements such as international peace plan known as the roadmap.

  Hamas talks

  Hamas officials from the Gaza Strip are in Egypt, meeting leaders who live in exile. The meetings started on Monday and are expected to continue on Tuesday.

  The Hamas leaders are expected to discuss the possibility of forming a coalition with the previous governing party, Fatah, which so far has rejected calls for a national unity government.

  They are also expected to meet senior Egyptian officials, who have called on Hamas to renounce violence and recognise Israel before taking power.

  A Hamas delegation is then expected to tour Arab capitals to seek financial support for their administration.

  Hamas officials and Palestinian leader Mahmoud Abbas have agreed to convene parliament on 16 February, starting the process of forming a new government.

  The exiled leaders are based in Lebanon and Syria.

  Hamas leaders in the West Bank have no way of reaching the meetings in the Egyptian capital.

  On Sunday the Palestinian Attorney General Ahmed al-Moghani announced that $700m (?97m) worth of aid had gone missing under previous leadership.

  Mr Moghani is carrying out an investigation into alleged corruption.

  ---

  Hamas rejects 'unfair' aid demand

  

  Hamas has rebuffed threats to halt international aid to the Palestinians, saying that it will continue its current strategy towards Israel.

  The EU, US, Russia and the UN called on Monday for Hamas to renounce violence and recognise Israel or face the prospect of cuts in global aid.

  One Hamas leader, Ismail Haniya, said the "unfair conditions" would endanger the well-being of Palestinians.

  Israel has said it is likely to suspend payments of tax revenues due to the PA.

  A regular monthly payment of about $50m (?5m) is due to be transferred to the PA on Wednesday, but could be held back pending the result of a high-level review, Israel said.

  Meeting in London, the Quartet of would-be Middle East peacemakers confirmed that aid to the Palestinians totalling more than $1bn (?63m) could be jeopardised if Hamas refused change.

  The EU gave some $600m (?38m) in aid in 2005, while the US handed over $400m (?25m).

  Hamas criticised the ultimatum.

  "Hamas is immune to bribery, intimidation and blackmail," Khaled Meshaal, the movement's overall leader, wrote in the UK's Guardian newspaper.

  He called on Arab states to increase aid to the Palestinians.

  Hamas' political head in Gaza, Ismail Haniya, insisted international aid was vital humanitarian assistance for people living under occupation.

  "This aid should not be linked to unfair conditions," he told the AFP news agency.

  Instead Hamas called on Israel to change, repeating demands for an end to the occupation of Palestinian land and attacks on Palestinians.

  Some now believe that in the light of the West's warning, Hamas may be determined not to be seen to bow to outside pressures, says the BBC's Alan Johnston in Gaza.

  Arab criticism

  Saudi Arabia, the Palestinians' biggest Arab donor, also believes the international community are being "unreasonable".

  "The European Union insisted on having elections in Palestine, and this is the result of what they asked for," Saudi Foreign Minister Prince Saud al-Faisal told reporters in Malaysia.

  "Now to come around, and say [they] don't accept the will of the people that was expressed through democratic means, seems an unreasonable position to take."

  Prince Saud said he believed Hamas would act responsibly in government and that all parties needed "cool heads... rather than reactions that close the door to peaceful settlement".

  Careful words

  The Quartet's statement, read by Mr Annan, said: "All members of the future Palestinian government must be committed to non-violence, recognition of Israel and acceptance of previous agreements and obligations, including the roadmap."

  

  It said future aid would be reviewed in reference to these demands, but did not threaten to cut it in the short term.

  The BBC's diplomatic correspondent, James Robbins, said the words were chosen with care. They did not demand a renunciation of violence or immediate recognition of Israel, but a commitment to these things in the future.

  Palestinian leader Mahmoud Abbas, who has urged donors not to cut funding, is expected to meet Mr Meshaal in the Egyptian capital Cairo to discuss relations with a Hamas-led government.

  Mr Abbas left Ramallah on Monday for talks in Jordan before travelling on to Cairo, where he is also due to meet Egyptian President Hosni Mubarak.

  ---

  Criteria set for Palestinian aid

  

  UN chief Kofi Annan has said future aid to the Palestinian Authority will hinge on the government's commitment to peace and recognising Israel.

  Speaking for the Mid-East "Quartet", Mr Annan said any new government must accept previous agreements, including the "roadmap" peace plan.

  Aid to the Palestinians has been thrown into doubt by the election victory of Islamic militant group Hamas.

  A BBC correspondent says the Quartet's language gives Hamas breathing space.

  The group's statement, read by Mr Annan after a meeting in London, said: "All members of the future Palestinian government must be committed to non-violence, recognition of Israel and acceptance of previous agreements and obligations, including the roadmap."

  It said future aid would be reviewed in reference to these demands, but did not threaten to cut it in the short term.

  The BBC's diplomatic correspondent, James Robbins, said the words were chosen with care. They did not demand a renunciation of violence or immediate recognition of Israel, but a commitment to these things in the future.

  The Quartet powers - the EU, the US, Russia and the UN - hope that by its actions, rather than words, Hamas can show itself willing to commit to peace efforts, our correspondent says.

  Abbas appeal

  However Hamas, which is designated a terrorist organisation by the US and the EU, reportedly rejected the Quartet's demands.

  "The Quartet should have demanded an end to [Israeli] occupation and aggression... not demanded that the victim should recognise the occupation and stand handcuffed in the face of the aggression," Sami Abu Zuhri was quoted by Reuters news agency as saying.

  Earlier, EU ministers made similar demands of Hamas, and said funding would continue as long as the new government proved it was committed to peace with Israel.

  EU member states are the biggest donors to the Palestinians, giving about $600m (?40m) in 2005.

  Palestinian leader Mahmoud Abbas urged donors not to cut funding to ensure "that the institutions continue to function and the plan to build our independent Palestinian state is not disrupted or derailed".

  Speaking after meeting German Chancellor Angela Merkel in the West Bank town of Ramallah, Mr Abbas said it was vital that the work of the Palestinian Authority should carry on as normal.

  Hamas 'must change'

  A senior Hamas leader, Ismail Haniya, promised all foreign aid would be spent on daily needs - not on attacking Israel - and would be subject to monitoring.

  "We assure you that all the revenues will be spent on salaries, daily life and infrastructure. You can review this," he said.

  European Union foreign policy chief Javier Solana said it could take up to three months for a new Palestinian government to be formed, and by then he hoped to see progress by Hamas.

  "If these conditions are met then we stand ready to continue [to fund the Palestinian Authority]," he said.

  "If [Hamas] do not change then it will be very difficult," he added.

  ---

  Rice rules out aid to Hamas government

  LONDON (AP) — U.S. Secretary of State Condoleezza Rice on Sunday ruled out any American financial aid to a Hamas government in the Palestinian territories and said Washington wants Arab nations and others to cut off money as well.

  Humanitarian aid to the Palestinians, many of whom are poor and unemployed, is likely on a "case-by-case basis," Rice said. She indicated that the Bush administration would follow through on aid promised to the current, U.S.-backed Palestinian government led by President Mahmoud Abbas.

  "The United States is not prepared to fund an organization that advocates the destruction of Israel, that advocates violence and that refuses its obligations," under an international framework for eventual Mideast peace, Rice said.

  Hamas, or the Islamic Resistance Movement, won a decisive majority in last week's Palestinian legislative elections. The group, which has political and militant wings, will now take a large role in governing the Palestinians. The makeup of the new government is not clear.

  The Islamic militants, who carried out dozens of suicide bombings and seek Israel's destruction, have said they oppose peace talks and will not disarm. Israel refuses to deal with Hamas.

  Hamas' unexpected electoral victory raised questions about the future of the peace process between the Palestinians and Israel, and how the United States can influence such efforts or help impoverished Palestinians.

  "We're going to review all of our assistance programs, but the bedrock principle here is we can't have funding for an organization that holds those views just because it is in government," Rice said.

  The top U.S. diplomat spoke to reporters as she flew to London for a Mideast strategy session with European and Russian leaders and U.N. Secretary-General Kofi Annan.

  Rice also will meet separately with other permanent members of the U.N. Security Council to discuss Iran and an upcoming vote on whether to refer the Tehran government to the council over its nuclear program.

  Rice was more definitive than President Bush and other administration officials have been about the future of U.S. aid now that Palestinians have voted in Hamas.

  The U.S., Europe and Israel list Hamas as a terrorist organization; various Arab governments have contact with the group.

  "It is important that Hamas now will have to confront the implications of its covenant if it wishes to govern," Rice said. "That becomes a primary consideration in anything that we do."

  It is not clear that all European nations or the United Nations would cut off aid, let alone Arab governments that do not recognize Israel.

  "I just think that anyone who is devoted to trying to bring Middle East peace between two states has an obligation now to make sure that anybody that is going to be supported is going to have that same" goal, Rice said.

  Some in Israel and in the administration would like to isolate and impoverish the new Hamas leadership in hopes of either forcing the group to moderate its policies or hastening disillusionment with the incoming government among Palestinians.

  U.S. aid is a small part of the $1.6 billion annual budget of the Palestinian Authority.

  About $1 billion comes from overseas donors — more than half of that from European nations. The rest is a mix of funds from international donor agencies, Arab and Asian governments, and the U.S., which gave $70 million in direct aid to the Palestinian Authority last year.

  Separately, the U.S. spent $225 million for humanitarian projects through the U.S. Agency for International Development last year, and gave $88 million for refugee assistance.

  In the past, USAID money has gone for such projects as sprucing up the Ramallah auditorium where Palestinian leaders hold press conferences.

  Rice suggested that only the most pressing needs would be considered now.

  Earlier Sunday, with Hamas' victory discussed on the U.S. talk shows, a Republican senator said cutting U.S. aid to the Hamas-run government could push the Palestinians closer to Iran and create further chaos in the Middle East.

  Yet governing changes in the region could allow diplomatic efforts by the Bush administration to move "in some quiet ways," said Sen. Chuck Hagel, a top member of the Senate Foreign Relations Committee.

  "I think we're moving in the right direction, working with our allies, working with the United Nations, finding ways, with Hamas, to see where they're going to go here in the next few weeks, to see if there's something that we could do to influence that direction," said Hagel, R-Neb.

  ---

  Hamas sweeps to election victory

  

  Islamic militant group Hamas has won a surprise victory in Wednesday's Palestinian parliamentary elections.

  Preliminary results give�Hamas 76 of the 132 seats in the chamber, with the ruling Fatah party trailing on 43.

  The win poses problems for efforts to restart peace talks with Israel, say analysts. Israel insists it will not deal with an authority including Hamas.

  Palestinian leader Mahmoud Abbas, head of the Fatah party, says he remains committed to a peaceful settlement.

  "Our main objective is to end the occupation and have an independent Palestinian state," he said at a news conference after the results were announced.

  Prime Minister Ahmed Qurei of Fatah has offered to resign, and the party has said it will not join Hamas in government.

  In Israel, interim Prime Minister Ehud Olmert said after a three-hour emergency meeting on Thursday that Israel would not negotiate with a Palestinian government including Hamas.

  "Israel will not conduct any negotiation with a Palestinian government, if it includes any (members of) an armed terror organisation that calls for Israel's destruction," Mr Olmert's office said in a statement.

  The BBC's Jeremy Bowen says Hamas' first big test will be an orderly transfer of power. If they can do it, Palestinians can at least hope for national unity, otherwise their immediate future is grim.

  'Under occupation'

  US President George W Bush said the poll was a "wake-up call" for the Palestian leadership, but he hoped Mr Abbas would stay in power.

  He said the US would not deal with Hamas unless it renounced its call to destroy Israel.

  But Hamas co-founder Mahmoud Zahar refused to renounce violence.

  "We are not playing terrorism or violence. We are under occupation," he told BBC World TV.

  "The Israelis are continuing their aggression against our people, killing, detention, demolition and in order to stop these processes, we run effective self defence by all means, including using guns."

  Hamas and Fatah supporters clashed on Thursday in the West Bank town of Ramallah. Shots were fired in the air and some injuries were reported.

  The clash, which happened after Hamas supporters tried to raise their flag over the Palestinian parliament, was brought under control by police after about 10 minutes.

  Arab concern

  Election commission head Hanna Nasser said 95% of the votes had now been counted, and the results could still change slightly.

  On top of the seats taken by Hamas and Fatah, the 13 remaining seats went to smaller parties and independents, some backed by Hamas.

  The turnout was 77%.

  ---

  Palestinians vote in key election

  Palestinians are voting in their first parliamentary election for a decade, with the governing Fatah party facing a strong challenge.

  The militant Islamic group Hamas is fielding candidates for the first time, and polls suggest they could do well.

  Israel and the US have said they will not work with a government that includes members of Hamas.

  Palestinian leader Mahmoud Abbas has urged people to vote and ordered the security forces to prevent disruption.

  The run-up to the election has been marred by violence but the main militant groups have said they will ensure calm.

  Some 13,000 Palestinian policemen and security personnel have been deployed to protect polling stations.

  Polls opened at 0700 (0500 GMT) and are set to close at 1900 (1700 GMT).

  Sea of flags

  The BBC's Alan Johnson, at a polling station in a school in Gaza City, said voting got off to a brisk start.

  About 60 people were waiting to get into the school to vote when the doors opened, while hundreds of people have been queuing at polling stations elsewhere.

  In other parts of the city, members of Hamas were out in force, warmly greeting voters as they arrived to cast their ballots.

  In Rimal neighbourhood, Hamas activists wearing green hats and bandanas held computerised lists of voters and assigned volunteers to drive supporters to the polling station.

  Veiled Hamas women in full-length black robes handed out hats and cards with candidates' names, while Fatah activists were nowhere to be seen, the Associated Press news agency reported.

  Samer Lulu, 29, said he voted for Hamas because he was tired of corruption.

  "With religious people at least we will have our public money in clean hands," AP quoted him as saying.

  Nearby, the Beach refugee camp there was a palpable air of excitement amid a sea of green and yellow Hamas and Fatah flags and vehicles were festooned with wedding-style carnations, AP said.

  Close race

  On the eve of the vote, Mr Abbas said he was determined to ensure the vote was a success and "conducted in a free and honest way".

  "This great day will be of historic significance, a decisive step on the road to freedom and independence," he said in a televised address.

  Israel's acting Prime Minister Ehud Olmert welcomed the election as an historic opportunity for the Palestinians, but urged voters not to plump for "extremists" - a reference to Hamas.

  Opinion polls have put Hamas only a few points behind Fatah.

  The militant group's involvement has caused serious concern in neighbouring Israel, the US and Europe, where Hamas is banned as a terrorist organisation.

  Hamas 'pragmatic'

  The BBC's James Reynolds, in Jerusalem, says there is real excitement among Palestinians who have waited a long time to pick their parliament.

  Many Palestinians say they want to punish Fatah, which is widely seen as ineffective and corrupt, our correspondent says.

  Hamas has taken note of what it sees as an opportunity, he says, and has cast aside its hatred of the Palestinian parliament in the hope of converting popular support into a formal political voice.

  This may show Hamas has added a measure of pragmatism to its arsenal, our correspondent says, but it has not given up its weapons.

  Hamas does not recognise Israel and has launched hundreds of attacks against its citizens both in Israel and the occupied territories.

  The election, which has been repeatedly delayed, is the first since 1996.

  Nearly 1.5m Palestinians are eligible to vote at about 1,000 centres in the West Bank and Gaza Strip. Some will also cast their ballot in occupied East Jerusalem.

  ---

  Israeli Leader Backs Palestinian State

  JERUSALEM, Jan. 24 - Ehud Olmert, in his first major policy address since becoming Israel's acting prime minister, said today that he backed the creation of a Palestinian state, and that Israel would have to relinquish parts of the West Bank to maintain its Jewish majority.

  

  "We support the establishment of a modern, democratic Palestinian state," Mr. Olmert said at the annual Herzliya Conference near Tel Aviv, which has become a forum for important speeches by Israeli leaders. "The existence of two nations, one Jewish and one Palestinian, is the full solution to the national aspirations and problems of each of the peoples."

  Mr. Olmert, who assumed his current post after Prime Minister Ariel Sharon suffered a massive stroke on Jan. 4, said he was following the path set down by Mr. Sharon, who remains in a coma.

  In his remarks, Mr. Olmert said the biggest challenge facing Israel was defining the country's permanent borders so that it could maintain a Jewish majority. All of the West Bank is part of "our historic homeland," Mr. Olmert said. But, he added, demographic realities will require handing back parts of the West Bank, which Israel captured during the 1967 Arab-Israeli war.

  "The choice between allowing Jews to live in all parts of the land of Israel, and living in a state with a Jewish majority, mandates giving up parts of the Land of Israel," Mr. Olmert said. "We will not be able to continue ruling over the territories in which the majority of the Palestinian population lives."

  Mr. Olmert did not offer new proposals but said it was an opportune moment to revive peacemaking efforts, with the Palestinians holding parliamentary elections on Wednesday and with Israel holding its own legislative elections on March 28.

  "The elections tomorrow in the Palestinian Authority are a historic opportunity for the Palestinians to take a giant step toward realizing their goal to achieve national independence," Mr. Olmert said. But he added, "The key to moving the political process forward is for the Palestinians to abandon the path of terror."

  Like Mr. Sharon, Mr. Olmert said he would be guided by the road map, the international peace plan that was introduced in the summer of 2003, but which immediately stalled.

  Neither side has met its requirements in the first stage of the road map, which has three stages and ultimately calls for a comprehensive peace agreement and a Palestinian state. Still, Mr. Olmert cited the rarely mentioned second stage, which would allow for a Palestinian state with temporary borders.

  The Palestinians could have a state "even before all the complicated issues connected to a final agreement are resolved," Mr. Olmert noted.

  The Palestinians have generally opposed interim measures, and prefer to focus on final-status issues. The Palestinian leadership seeks a state in all of the Gaza Strip and the West Bank, with a capital in East Jerusalem.

  Responding to Mr. Olmert's speech, the chief Palestinian negotiator, Saeb Erekat, said, "I want Mr. Olmert to know he has a partner on the Palestinian side."

  "I hope he will abandon unilateral Israeli actions and come back to the negotiating table so both sides can begin to implement their obligations under the road map," Mr. Erekat said.

  Mr. Sharon has not shown any significant signs of recovery in recent days, and there is now an almost universal assumption he will not return to political life. In his absence, Mr. Olmert has also become the acting head of the centrist Kadima party, which is heavily favored in the Israeli elections, according to opinion surveys.

  Mr. Olmert initially avoided taking major decisions as the acting prime minister, but he is now increasingly asserting himself. He said Israel should limit construction in Jewish settlements, work to improve the daily lives of Palestinians and take down West Bank settlement outposts that were erected without government permission.

  But the Palestinians want all Jewish settlements in the West Bank removed, something Mr. Olmert said he was not prepared to do.

  He said Israel would "maintain control over the security zones, the Jewish settlement blocs and those places which have supreme national importance to the Jewish people, first and foremost a united Jerusalem under Israeli sovereignty."

  About 250,000 Jewish settlers now live in the West Bank and the number is increasing by more than 10,000 annually. The figures do not include Israelis living in East Jerusalem, which was captured by Israel in the 1967 war, and then annexed.

  Mr. Olmert was a strong advocate of Israel's unilateral withdrawal from the Gaza Strip last summer, though he has not said whether he would be prepared to take a similar action in the West Bank.

  "We would prefer an agreement," he said. "To realize this opportunity, the Palestinians will have to give up part of their national dreams, just as we have given up some of our national dreams."

  ---

  Rice urges Palestinians to reject terrorism

  WASHINGTON (AP) — Secretary of State Condoleezza Rice on Monday cautioned Palestinian voters, who will choose a parliament this week, to bear in mind that terrorism is not a pathway to peace.

  With the ruling party Hamas running neck-and-neck with the Islamic militant Fatah before Wednesday's balloting, Rice said it does not work to have "one foot in terrorism and the other foot in politics." (Related story: Palestinian vote nears)

  "The United States won't change its policies toward Hamas," Rice said, implying the Bush administration would not work with a Palestinian government dominated by that party.

  Referring to potential peace talks between the Palestinians and Israel, she said, "It's hard to have negotiations with a party that you do not recognize its right to exist."

  Hamas is listed as a terrorist organization by the State Department. The radical group has taken responsibility for many attacks on Israel.

  The Fatah movement, once headed by the late Yasser Arafat and now by Palestinian leader Mahmoud Abbas, is competing with Hamas for a majority of the 132 seats in a Palestinian parliament.

  Neither Rice nor State Department spokesman Sean McCormack explicitly ruled out dealing with a Palestinian government in which Hamas played a significant role.

  Rice said since Hamas had not renounced violence and was a terrorist group, that would be "a very practical problem."

  "If we indeed do want a path to peace between Israel and the Palestinian people it is going to have to be one in which Palestinians and any Palestinian government are committed to a peaceful path," Rice said.

  ---

  Iran Warns Israel About Attack

  
  
  

  (AP) Iran on Sunday said Israel would be making a ��atal mistake��should it resort to military action against Tehran's nuclear program and dismissed veiled threats from the Jewish state as a ��hildish game.��
  
  On Saturday, Israel repeated its stand on the issue, saying it would not accept a nuclear Iran under any circumstances and was preparing for the possible failure of diplomatic efforts.
  
  While Defense Minister Shaul Mofaz stopped short of an outright threat of military action, he said Israel ��ust have the capability to defend itself, and this we are preparing.��
  
  Iranian Foreign Ministry spokesman Hamid Reza Asefi said Israel was only trying to add to Western pressure on Iran to give up its nuclear program.
  
  Ÿe consider Mofaz's comments a form of psychological warfare. Israel knows just how much of a fatal mistake it would be (to attack Iran),��Asefi told reporters. ŵhis is just a childish game by Israel.��
  
  Israel views Iran as its biggest threat and has joined Washington in charging that Tehran is trying to build nuclear weapons. Iran says its nuclear program is for electricity generation.
  
  Israel, whose warplanes destroyed an unfinished Iraqi nuclear reactor in 1981, maintains a nuclear monopoly in the Middle East. While it neither acknowledges nor denies nuclear arms, Israel is thought to have about 200 nuclear warheads deployed on ballistic missiles, aircraft and submarines, according to the Washington-based Carnegie Endowment for International Peace.
  
  Asefi's threats were not limited to Israel. He said dialogue was the best way to settle the dispute and issued a harsh warning to European powers to resume talks.
  
  Ÿe advise them (Europe) not to choose any path except dialogue. If there is retribution to be paid, that will include Europe too,��Asefi said, adding that Iran plans to continue cooperation with the UN nuclear watchdog, the International Atomic Energy Agency.
  
  Last week, European powers drafted a resolution calling for Iran's referral to the U.N Security Council to resolve its nuclear issue. The resolution, however, stopped short of calling for sanctions.
  
  Several days later, French President Jacques Chirac said that France could respond with nuclear weapons against any state-sponsored terror attack. The comments were seen by some as a reference to Iran.
  
  Iran's nuclear dispute with the West intensified when it removed U.N. seals from its main uranium enrichment facility in Natanz, central Iran, on Jan. 10 and resumed research on nuclear fuel, including small-scale enrichment after a 2-year freeze.
  
  The removal of the seals caused alarm in Western capitals, where Iran is suspected of using its civilian nuclear program as a cover to develop an atomic bomb.
  
  Iran has repeatedly said it is willing to offer guarantees that its nuclear program won't be used to manufacture weapons but it has so far refused to give up its right under the Nuclear Nonproliferation Treaty to enrich uranium and produce nuclear fuel.

  ---

  Israeli Ready for Peace Talks if Palestinians Disarm Hamas

  Israel's acting prime minister, Ehud Olmert, said Tuesday that he would be willing to restart peace talks with the Palestinians if they met the longstanding Israeli demand to break up armed factions. But Palestinian elections on Jan. 25 could further complicate peace efforts because the Islamic faction Hamas is expected to do well and might become part of the Palestinian government.

  Hamas, which has carried out many bombings and other attacks against Israel, says it will not lay down its weapons after the election, and Israel insists it will not deal with Hamas, which Israel labels terrorist. Still, Mr. Olmert said he hoped the Palestinian leader, Mahmoud Abbas, would disarm the factions, which could lead to renewed peace talks after the Palestinian balloting this month and Israeli elections in March.

  "I hope that based on the results of their elections, and after that the results of our elections, I will be able to enter negotiations," Mr. Olmert said. Earlier this week, Mr. Abbas said he was prepared to deal with Mr. Olmert "without any preconditions." Israeli and Palestinian officials hold periodic contacts, but negotiations broke down shortly after the Palestinian uprising began in September 2000.

  Both sides say they are committed to the so-called road map, the peace plan that has stalled since it was introduced in 2003. The plan's initial steps call for the Palestinians to dismantle armed groups, and for Israel to take down unauthorized settlement outposts. In the days immediately after Prime Minister Ariel Sharon's stroke on Jan. 4, Mr. Olmert maintained a relatively low profile and emphasized that he was only filling in. But with Mr. Sharon in a coma for the past 13 days, and showing no significant signs of recovery, Mr. Olmert is speaking out on issues.

  Mr. Olmert on Monday was chosen as the acting chairman of Kadima, the centrist party founded by Mr. Sharon in November. Opinion polls show that with Mr. Olmert as leader, Kadima remains far ahead of its rivals. Regarding Iran, Mr. Olmert said Israel cannot allow "someone who has such hostile intentions against us to obtain weapons that could threaten our existence." Iran recently resumed nuclear research, saying it wants to develop nuclear power for civilian purposes, but Israel insists that Iran is seeking to build bombs.

  "I believe that there is a way to prevent nonconventional weapons from coming into the hands of those who pose a danger to the entire world," Mr. Olmert said, though he did not give details. He has also been taking a hard line against Jewish settlers in Hebron, on the West Bank, who have been clashing with Israeli security forces. Hundred of police reinforcements have been sent to Hebron, and several youths were arrested Tuesday. They were among protesters resisting the planned eviction of several Jewish families who have moved into empty Palestinian shops.

  Israel's security forces declared the area a "closed military zone" and ordered all nonresidents to leave. The Israeli forces often declare such zones during clashes with Palestinians, but it is rare when dealing with Jewish settlers. In West Bank violence, Israeli soldiers shot dead a member of Hamas, Thabet Ayadi, during a gunfight at a house in Tulkarm, according to the Israeli military and Palestinian security officials.

  ---

  Little pity for Sharon in Gaza Palestine Square is the busy, noisy, scruffy heart of Gaza City, and it was as good a place as any to gauge the mood here as Ariel Sharon drifts between life and death. Shoppers and traders bustled round the pavement stalls, and taxis blared their horns as they navigated the traffic jam. And, among people in the square, some of them said that, as Muslims, they regard all life as sacred and they wish the Israeli leader well. But the overwhelming emotion towards Mr Sharon was of the hardest kind. 'War criminal' It is difficult to overstate how much Palestinians loathe him. For decades he has embodied the most formidable face of their Israeli foe. For many Israelis, Ariel Sharon was the leader they needed as they confronted forces that talked of destroying them. He was tough enough to grind down their enemies - groups that were prepared to send suicide bombers to kill indiscriminately in the cafes and buses of Tel Aviv and Jerusalem. But to people in Palestine Square, Mr Sharon is a war criminal. They remember the massacres carried out in two Palestinian refugee camps by Lebanese militiamen in 1982. An Israeli inquiry found Mr Sharon indirectly responsible. But Palestinians always held him wholly responsible for the slaughter. They remember too the killing of nearly 60 people when a unit under Mr Sharon's command blew up 50 homes in the village of Qibya in 1953. And it was not just a series of military blows that he dealt Palestinians down through the decades. For a long time he championed the spread of Israeli settlements in the occupied territories and masterminded the suppression of Palestinian militancy there. Black respect Back in Palestine Square, a group of men sitting on plastic chairs on the pavement reflected on Mr Sharon's current plight. "We want him to suffer as we have suffered," said one of the men. "He's not human, or he wouldn't have killed us as he did." A money changer said: "We are waiting minute by minute for Sharon's death. We'll draw comfort from it, because he is the cause of our problems." And a man working at a food stall had this message for Mr Sharon as he struggles for his life: "Go Sharon. Go." But there were also signs of a certain black respect for the Israeli leader. Some people here are ready to concede that he fought his people's corner to devastating effect. You sometimes hear Palestinians say that they need their own Ariel Sharon. Another money changer, Mohammad, a grey-bearded man in a white skullcap, said: "Sharon is faithful to his people - more faithful to his people than Arab leaders are to theirs. He looks after his people. "But if he dies we hope that his successor will be better for peace." However dire its relationship often was with Mr Sharon, the Palestinian leadership is worried by his passing from the scene. The upheaval in Israel will inevitably further delay any possibility of a resumption of peace talks. There is the possibility too that Israel may move to the right - that the Likud Party under Binyamin Netanyahu may emerge from the crisis in a strong position and take an even harder line on the Palestinian issue than Mr Sharon did. Stature Some in the Palestinian Authority argue that Mr Sharon had shown by withdrawing from Gaza that he was ready to uproot settlements and cede occupied territory, and that he appeared to be positioning himself to pull out of more of the West Bank. It was also recognised that Mr Sharon had the stature to be able to sell to his people any deal that he might have struck in the peace process. But many Palestinians would say that all that kind of thinking is naive. They would argue that Mr Sharon would never have given up enough of the West Bank to constitute a viable Palestinian state - that he was determined to keep large tracts of occupied land, including all of East Jerusalem. The Israeli government's plan for "disengaging" from Gaza says: "It is clear that in the West Bank, there are areas which will be part of the state of Israel, including cities, towns and villages, security areas and installations, and other places of special interest to Israel". When one of Mr Sharon's leading advisers publicly described the disengagement plan as a means of putting the dreams of a Palestinian state in "formaldehyde" most Palestinians took him at his word. British hostages freed, say Palestinians JERUSALEM (CNN) -- Three Britons abducted in southern Gaza on Wednesday have been freed, according to Palestinian security sources. Palestinian Authority officials had been negotiating the release of Kate Burton, a 25-year-old worker for the Palestinian rights group Al Mezan, and her visiting parents. They are currently with the security commander for the Gaza town of Khan Younis, the sources said. They were kidnapped in Rafah when Burton was showing her parents around the town on the Gaza-Egypt border. (Read about the hunt for the kidnappers) The identity of the kidnappers was not clear, and earlier, Palestinian officials said they had made no demands. It was originally believed that the kidnapppers were members of a group upset over certain Palestinians being black-listed and thereby prohibited from crossing from Gaza into Egypt via the Rafah crossing. Recently, European Union monitors blocked a group of people -- including Jamal abu Samhadan, a leader in the Popular Resistance Committee, and Khaled al-Dadouh of Islamic Jihad -- from leaving Gaza and entering Egypt. Members of the group were believed to be pressing the Palestinian Authority to end the black-listing process. Ihtisham Hibatullah of the Muslim Association of Britain told The Associated Press earlier Friday that his colleagues "have been speaking to people in Gaza and they said they have information that a firm link of communication has been established with the kidnappers and they have agreed to release the hostages." Hibatullah told AP he understood that Burton, her father, Hugh, 73, and mother, Helen, 55, had been treated well "and are in a good condition."

  Gaza Security Zone Ordered Israel In Poltical Change Netanyaf Wins Rikud Poll Hamas Wins WB Elections Arafat's Failed Leadership Nobel Prize For IAEA Iranian President Denied Holocaust Another Assassination In Lebanon Hamas To End Truce With Israel Iran:Move Israel To Europe Pope Meets With Abbas Rice Called For Palestinian Terror Crackdown Militants Return To Gaza EU Aids Palestinian Police Miller Sorry Over WMD Report Saddam's Trial Gaza Border Opens EU Report Condemns Israel Al-Zazeera Blasts Bush Hillary Disagrees With Immediate Exit Sharon Quits Licud Party Fresh Wave of Terror in Iraq Iraq Suicide Attack Killed 80 Israelis Mourn Rabin Syria Promises Limited Cooperation Iran To "Wipe Off" Israel Blair Expresses Revulsion Towards Iran Israel To Exclude Iran Sharon Endorses A Palestinian State Market Bombing In Israel Israel Strikes Gaza

  ---

  h2>Likud ministers quit government Three of the four Likud party ministers in Israel's government have resigned from the cabinet after party leader Binyamin Netanyahu ordered them to go.

  Foreign Minister Silvan Shalom did not resign, but is expected to quit at the cabinet meeting on Sunday.

  The resignations had been planned, but were postponed after Prime Minister Ariel Sharon had a stroke last week.

  Doctors at Jerusalem's Hadassah hospital say Mr Sharon will undergo a routine brain scan on Thursday.

  They say the premier's condition remains critical but stable.

  The 77-year-old is on a low dose of the sedatives that have kept him in a coma.

  However, medical sources told the Reuters news agency that doctors could end Mr Sharon's sedation on Thursday, in order to be able to assess the extent of any neurological damage.

  Election campaign

  The resignations of the ministers will come into effect in 48 hours.

  "Likud chairman Binyamin has handed over the letters of resignation to the cabinet secretariat in Jerusalem," a Likud statement said.

  Earlier, reports said the ministers had refused Mr Netanyahu's order to resign immediately, saying they would quit on Sunday.

  Mr Netanyahu ordered Mr Shalom, Agriculture Minister Yisrael Katz, Education Minister Limor Livnat and Health Minister Danny Naveh to submit their letters of resignation to acting Prime Minister Ehud Olmert earlier on Thursday.

  "The Likud cannot present itself as an alternative if it remains in the government and continues to implement its policies," the party said in statement on Wednesday.

  The Labour Party declared its campaign for the 28 March general election to be up and running on Wednesday, as opinion polls suggested that Mr Sharon's new ruling party, Kadima, could still win the election even if he was not at the helm.

  Likud is meeting on Thursday to decide its list of candidates.
  
  

  Sharon faces 'months of recovery'

  Israeli Prime Minister Ariel Sharon could take months to recuperate from the massive stroke he suffered a week ago, one of his surgeons has said.

  Dr Jose Cohen told Israeli television in a lengthy interview that Mr Sharon's life was still very much in danger.

  Earlier, doctors said he had improved slightly, with some movement in both sides of his body, though he remained in a critical but stable condition.

  Mr Sharon is now on a low dose of the sedatives that have kept him in a coma.

  Once he has been fully weaned off the medication, doctors can further assess the extent of any neurological damage.

  There were signs on Wednesday that the country's political system was starting to get back to normal, ahead of elections scheduled for late March.

  Likud leader Benjamin Netanyahu ordered the party's four remaining cabinet ministers to resign from the government on Thursday, a long-planned move that was put off after Mr Sharon fell ill.

  Earlier, Labour declared its election campaign was up and running as opinion polls showed Mr Sharon's new political party Kadima would still win the election even if he was not at the helm.

  'Still in danger'

  Jerusalem's Hadassah hospital said on Wednesday that Mr Sharon had shown "additional improvement as seen through the different neurological tests carried out by his doctors".

  Chief surgeon Felix Umansky described how the prime minister appeared to react to words from his son Gilad.

  "His blood pressure rose immediately," he told Israeli television.

  But, in his first interview since Mr Sharon was rushed to hospital last Wednesday, Dr Cohen warned against being too optimistic.

  "The prime minister's life is still in danger. He suffered a serious stroke, period," he told Channel One television.

  "Until we have passed a few more stages we are still very cautious. We know that every day, although we are getting further out of danger, we are still in danger."

  He went on: "Do not think of this in terms of days, or in terms of weeks. This will take a long time."

  When asked if that meant months of recuperation, he said: "Yes, yes, months."

  This would appear to rule out the possibility of Mr Sharon leading Kadima into the elections, says the BBC's Richard Galpin in Jerusalem.

  Cognitive response tests

  In his interview, Dr Cohen also described how close Mr Sharon was to dying when he first arrived at hospital a week ago.

  They had to operate immediately to save his life, he said.

  Once Mr Sharon has been fully weaned off the sedatives, medics will test his cognitive responses and pass their assessment of brain damage to Attorney General Menachem Mazuz.

  If the assessment declares that Mr Sharon has been permanently incapacitated and is unable to return to office, a cabinet meeting will be called to choose a caretaker leader to be prime minister until the general election on 28 March.

  Sharon starts breathing on own, shows movement

  JERUSALEM (AP) — Prime Minister Ariel Sharon resumed breathing on his own Monday and moved his right hand and leg in response to stimulation as doctors started weaning him off the sedatives keeping him in a coma.

  Sharon's chief neurosurgeon, Dr. Felix Umansky, said the leader's response to pain stimulation was a "very important" sign, but it was too early to assess Sharon's ability to think and reason after suffering a massive stroke Wednesday. It will take days to wean the 77-year-old premier off sedatives.

  By Monday afternoon, Sharon had begun breathing on his own, though he was still on a respirator to assist him, said Dr. Shlomo Mor Yosef, director of Hadassah Hospital, where Sharon is being treated.

  Doctors said they applied pressure to a part of Sharon's body that usually causes pain. Sharon's blood pressure rose during the stimulation — a positive sign — and he lifted his right hand and right leg slightly.

  "It was a slight, but significant, movement," Mor Yosef said.

  It would be more significant if Sharon moved his left hand, since that is controlled by the right side of the brain, where Sharon's stroke occurred.

  Sharon remained in critical condition.

  Doctors hope Sharon will have a greater response to pain stimulation, including opening his eyes, as the sedatives are decreased, Umansky said.

  It is too early to say how the massive bleeding in the right side of Sharon's brain will affect his cognitive abilities or the left side of his body.

  "The moment that the prime minister is able to talk to us and to sit up one can say there will no longer be danger to his life," he said. "Once he is conscious and with us and all his systems are functioning and there are no complications, such as an infection or something else, I will be ready to say he's out of danger."

  The doctors could put Sharon back in a coma if his condition worsens, he said.

  One of Sharon's neurosurgeons said it was unlikely he could function as prime minister again.

  Experts said the prime minister suffered most of the damage to the right side of his brain, so he has a greater chance of regaining his speech and comprehension, which are controlled by the left side.

  After the sedatives, doctors will pass their assessment of brain damage to Attorney General Meni Mazuz, who then will decide whether to declare the prime minister permanently incapacitated.

  "The minute we know what damage has occurred, we will talk," Justice Ministry spokesman Yaakov Galanti said.

  Since an acting prime minister is in place, there is no urgency to such a declaration, Galanti added. Ehud Olmert, Sharon's deputy, was named acting prime minister after Sharon's second stroke and can serve in that role for 100 days. (Related: Can Olment lead?)

  In the event the attorney general declares permanent incapacitation, the Cabinet would elect a new prime minister within 24 hours, choosing from the five Cabinet ministers from Sharon's Kadima Party who also are lawmakers, Galanti said.

  That group includes Olmert.

  Sharon, who suffered a mild stroke Dec. 18, felt weak Wednesday and was rushed to Hadassah from his ranch in southern Israel when a blood vessel on the right side of his brain burst, causing massive cerebral hemorrhaging. The stroke occurred the night before he was scheduled to undergo a procedure to close a hole in his heart that contributed to the earlier stroke.

  He has undergone two surgeries to stop the bleeding in his brain and relieve the pressure inside his skull.

  Sharon, Israel's most popular politician, was seen by many here as the best hope for resolving the Israel-Palestinian conflict. His abrupt illness and expected departure from the Mideast political stage has raised concern that momentum on territorial concessions, created by his recent Gaza Strip withdrawal, would be stopped, and that Sharon's successor would not have the stature to forge ahead on drawing Israel's final borders.

  Before his collapse, Sharon appeared headed to a landslide victory in March 28 elections at the head of the Kadima Party, which seeks further pullbacks while strengthening Israel's hold over major settlement blocs.

  Olmert told the Cabinet on Sunday he would work to carry on Sharon's political legacy.

  Sharon's condition and the uncertainty it has generated has unsettled Israelis. At the hospital entrance Monday, three Jerusalemites hung up a white sheet with blue lettering in English and Hebrew that read, "Ariel Sharon, there is more to do, please wake up."

  In the Gaza Strip, where Sharon is reviled for his tough policies on Palestinians, 40 masked gunmen from the Al Aqsa Martyrs' Brigades militant group held a demonstration against Sharon. One held a gun to a photo of Sharon that was labeled "the killer of children" and then burned the picture.

  Doctors not involved in Sharon's care said that if he awakens, the extent of his responses could vary widely from slight movements to a much fuller awakening. They also have cautioned that there is no guarantee Sharon will awaken from the anesthesia.

  That Sharon can breathe on his own "tells us that one part of his brain is functioning, the respiratory center," said Dr. John Martin, a professor of cardiovascular medicine at University College in London. "It doesn't tell us how he is thinking, it doesn't tell us how he can speak, it doesn't tell us how he can move his arms and legs.

  "His chances of survival are better than if the respiratory center had been damaged, but that still doesn't mean he's going to survive. ... It is still highly probable that he will die," Martin added, noting that Sharon's weight and age work against him.

  One of Sharon's surgeons, Dr. Jose Cohen, has said that while Sharon's chances of survival were high, his ability to think and reason would be impaired.

  "He will not continue to be prime minister, but maybe he will be able to understand and to speak," the Argentina-born Cohen said in comments published Sunday by The Jerusalem Post.

  Sharon MD: Cognitive impairment definite

  JERUSALEM (AP) — Prime Minister Ariel Sharon's chances of surviving his severe stroke are very high, but his ability to think and reason have been damaged, one of his surgeons said Saturday.
  

  The 77-year-old Israeli leader remained in critical condition, though his vital signs were stable and a brain scan Saturday showed a slight reduction in swelling. (Related video: Sharon undergoes brain surgery)

  Doctors are to decide Sunday when to begin lifting Sharon's medically induced coma to examine the severity of the brain damage.

  "Tomorrow is the day of truth," Dr. Jose Cohen, one of Sharon's surgeons, told Channel 2 TV. "Tomorrow we will all know if what we did for him helped him or not."

  Cohen said he was "quite optimistic" about Sharon's prospects for survival, which he said were "very high now."

  But when asked about possible cognitive impairment, Cohen replied, "To say after such a severe trauma as this that there will be no cognitive problems is simply not to recognize the reality."

  Cohen's comments appeared on Channel 2 as a transcript broadcast on the screen. He did not appear himself. It was not immediately possible to contact Cohen by phone, and Sharon's other surgeon, Dr. Felix Umansky, declined to be interviewed.

  The comments reinforced a widespread assumption that Sharon will never return to power. Israelis from all walks of life have lamented Sharon's likely departure from the political scene. With his larger-than life persona and warrior credentials, he was seen as the man most capable of disentangling the Israeli-Palestinian conflict.

  When waking Sharon out of his coma, doctors will be "looking for some sort of response," the Hadassah Hospital director, Dr. Shlomo Mor-Yosef, told journalists outside. "If there is no response, that would be bad news."

  Asked whether Sharon's life could be saved, Mor-Yosef replied, "We believe it's possible."

  Sharon, who experienced a mild stroke on Dec. 18, felt weak Wednesday and was being rushed by ambulance to Hadassah from his ranch in southern Israel when a blood vessel on the right side of his brain burst, causing massive cerebral hemorrhaging.

  He has undergone surgery twice to stop bleeding in the brain and to relieve pressure inside his skull. Although doctors treating him have not offered a prognosis, outside experts have said the outlook is grim. Aides said they do not expect Sharon to return to the prime minister's office.

  Before his collapse, Sharon appeared headed to win a third term in office at the head of Kadima, a new, centrist party he formed to build on the momentum created by his seminal summer withdrawal of soldiers and settlers from the Gaza Strip.

  Although Israel and the Palestinians have not managed to use the withdrawal as a springboard for the immediate revival of stalled peace talks, there had been hope that the process would resume after Palestinian elections in January and Israeli balloting in March.

  It's far from clear if any of Sharon's potential successors would have the charisma, credibility and can-do spirit that helped the prime minister begin carrying out the historic task of drawing Israel's final borders.

  King Abdullah of Jordan telephoned acting Israeli Prime Minister Ehud Olmert on Saturday to express "hope that the Mideast peace process would not be affected by any circumstances and developments surrounding Ariel Sharon's illness," Jordan's official Petra news agency reported.

  At synagogues throughout Israel, worshippers set aside political differences and recited a "mi sheberach" for Sharon — a prayer of well wishes. Israelis called out "Ariel, son of Vera," his mother's name.

  David Zvuluni, huddled with three other worshippers outside his Jerusalem synagogue, said he opposed Sharon's Gaza withdrawal, but at this moment wished him only well.

  "I don't believe there's a synagogue in the country that's not praying for Sharon," he said. "There are just a few lunatics, but the rest of the people of Israel are all praying for him, even those, like us, who opposed him."

  Israelis also gathered outside Hadassah on Saturday to express their solidarity.

  "We are waiting for a miracle," said Eli Grossman, 51, of Kfar Saba, a Tel Aviv suburb.

  "For three days I have felt I had to do this, and today, I had the chance," said Rachel Buznak, 55, who lives in Lod, outside Tel Aviv. "I really respect and admire this man. ... He didn't live for himself, just for the state."

  ---

  Israeli PM suffers serious stroke

  

  Israeli Prime Minister Ariel Sharon has suffered a "significant" stroke and is unconscious, doctors at Jerusalem's Hadassah hospital say.

  Officials said the 77-year-old leader was on a respirator and had experienced "massive" cerebral bleeding.

  The Israeli leader's powers have been transferred to his deputy Ehud Olmert.

  It is Mr Sharon's second stroke in just over two weeks. He was due to go into hospital on Thursday to undergo a minor heart operation.

  He suffered a minor stroke on 18 December which doctors said could have been the result of a blood clot caused by the hole in the heart.

  His doctors said he recovered fully then but required minor surgery for the heart problem.

  

  Dr Shlomo Mor-Yosef told reporters at the hospital on Wednesday night that Mr Sharon had "massive bleeding and was being transferred to an operating theatre."

  An Israeli TV station reported that Mr Sharon was suffering from paralysis in his lower body and had been taken into the hospital on a stretcher.

  The prime minister was carried to hospital in Jerusalem from his ranch in the Negev Desert in Israel's south by ambulance - a drive that normally takes more than an hour - instead of by helicopter.

  Police and security agents set up a security cordon around the hospital, and also stationed themselves around Mr Olmert's residence in Jerusalem.

  A US spokesman said on Wednesday the White House was monitoring the situation and that "our thoughts and prayers are with the prime minister and his family".

  Mr Sharon, who has been prime minister since 2001, is severely overweight.

  He is planning to run for a third term in office under his newly-formed centrist party, Kadima, after quitting the ruling Likud party in November.

  Polls suggest his new party is in the lead ahead of the election.

  Police find 'Sharon bribe clues'

  

  Israeli police have evidence that Prime Minister Ariel Sharon's family received $3m in bribes, it has been alleged on an Israeli television channel.

  Police have been investigating illegal political contributions allegedly made in 1999, when Mr Sharon was running for the leadership of the Likud Party.

  Last November Mr Sharon's son Omri pleaded guilty to violating party funding laws.

  However, the prime minister has always denied any involvement.

  Lior Chorev, a key Sharon aide, dismissed the report.

  "No official is saying this, a reporter is saying this," he said. "Since when do I need to respond to speculation of a reporter on Channel 10."

  Computer files

  The channel showed what it said was a police document that had been presented to a Tel Aviv district court, outlining evidence of the alleged bribe.

  A police spokesman told the AFP news agency the evidence came from a computer confiscated in a raid on a house in Israel belonging to the family of an Austrian financier, Martin Shlaff.

  "We suspect that there could be proof within Shlaff's computer data that the sum of $3m was transferred to the Sharon family," the spokesman, Mickey Rosenfeld, said.

  However, police had been prevented from examining the computer hardware by a temporary court order obtained by Mr Shlaff's lawyers, he said.

  The news followed Omri Sharon's resignation from parliament on Tuesday.

  He is due to be sentenced later this month for providing false testimony and falsifying documents, and violating funding laws during his father's election campaign.

  Prosecutors are demanding he go to prison.

  Suicide Bomber Kills 3 at West Bank Checkpoint

  - Two Palestinian civilians and an Israeli Army officer were killed today when a Palestinian suicide bomber blew himself up after being stopped at a checkpoint near the West Bank city of Tulkarm. At least five Palestinian civilians were wounded along with three Israeli soldiers, one of them seriously. The Palestinian dead included the driver of the taxi in which the man was riding and another passenger. The dead Israeli was identified as Lt. Ori Binamo, 21.

  The army was on high alert with reports that a suicide bomber was trying to enter Israel during the Hanukkah holiday, so temporary checkpoints were set up in the area of Tulkarm, the army said. The soldiers stopped a Palestinian taxi to do a security check. Three passengers left the car, including the bomber, who was wearing a large overcoat, the army said. When asked to open his coat, he exploded his suicide belt, which was loaded with a large amount of explosives and metal, including nails and bolts. The explosion was so large that initial reports suggested that two suicide bombers were involved. After the bombing, the army closed the towns of Tulkarm and Qalqilya and encircled them. The army suggested that the bomber was trying to enter Tel Aviv, and that at least one of the dead Palestinians was an accomplice.

  Nafez Shahin, 48, another passenger in the taxi, told Reuters that when the soldiers asked young men to leave the car, "The man got out slowly, closed his jacket and blew himself up."

  Israel Radio said that Islamic Jihad, the militant group that has carried out most of the recent suicide bombings in Israel, including one on Dec. 6 at a shopping mall in Netanya, killing five Israelis, was responsible. But there was no immediate claim of responsibility, and the identity of the bomber was also unclear. The Palestinian minister Nabil Shaath criticized the bombing and said, "We want such operations stopped."

  Islamic Jihad, which has never respected the up-and-down cease-fire with Israel negotiated by the Palestinian president Mahmoud Abbas, is said by Israeli intelligence officials to be closely linked to Iran, which opposes Israel's right to exist and peace talks between Israelis and Palestinians.

  The Israeli army and the Shin Bet counter-terrorism agency have been pursuing the leaders of Islamic Jihad and the larger, more indigenously controlled Hamas in sweeps through the West Bank. Hamas says it is respecting the cease-fire, or quiet, while Islamic Jihad says it is responding to Israeli violations of the truce.

  Israel today continued to shell areas of northern Gaza to try to prevent the firing of homemade Qassam missiles into Israel. Israel declared a "no-go area" there on Wednesday, on the territory of former Israeli settlements like Dugit, abandoned and reduced to rubble three months ago, from which the rockets can reach the outskirts of Ashkelon. The vice premier, Ehud Olmert, told Army Radio: "I believe that the these means will significantly reduce the shelling. There is nothing that can totally prevent it, unless those who fire decide to stop firing."

  Israeli officials said there was no time limit to the so-called buffer zone, while Palestinian negotiator Saeb Erekat criticized it as hapless. "This buffer zone will create more problems than it will solve and renew the cycle of violence," he said. He acknowledged that the Palestinian security forces "haven't done a good job in stopping the firing of these Qassams," but added: "We should have been given the chance to upgrade our facilities and stop them." Mr. Abbas said that "Israel has left the Gaza Strip and has no right to return under any pretext."

  Also in Gaza, a Palestinian policeman and a gunman were killed when members of a local clan clashed with security forces when gunmen attacked a police station. A family member apparently had been arrested in a crackdown on car thefts and drug running, Agence France-Presse reported. Two other policemen and three bystanders were also wounded.

  Palestinian police and British diplomats continued to seek the release of three Britons kidnapped at gunpoint in Gaza on Wednesday. Kate Burton, who has worked for three months with a non-governmental agency, had met her parents at the Rafah crossing almost as soon as they entered Gaza. The Interior Ministry spokesman, Tawfiq Abu Khoussa, called on armed Palestinian groups to stop kidnapping foreigners to pursue their own agendas, saying that "those who call themselves fighters should not stoop to behavior worthy of crooks and bandits."

  Israel bombards Gaza no-go zone

  

  Israel has shelled a newly declared buffer zone in northern Gaza, soon after warning Palestinians they could be shot if they entered it.

  The Israeli-imposed restrictions came into effect from 1800 (1600 GMT) and blasts were heard within minutes.

  Later, local witnesses also reported an airstrike, but subsequent reports suggested further shelling of the area.

  The 2.4 km (1.5 mile) buffer area is designed to stop rocket attacks against Israel by militants.

  Palestinian officials earlier rejected the buffer zone proposal and called for Israel to re-engage in meaningful peace negotiations.

  For your own safety you are warned to stay away from the areas designated from 1800 and until further notice. Whoever does not follow these warnings puts his life in real danger
  

  "The ways of buffer-zones, militarism, incursions, attacks, assassinations will just ... add to the cycle of violence and counter-violence," said senior negotiator Saeb Erekat in a BBC interview.

  Leaflets warning of the impending restrictions and signed by the Israeli army command were dropped from the air over northern Gaza earlier on Wednesday.

  They included a map of the security zone and said it will be enforced "until further notice".

  "For your own safety, read this statement carefully and act accordingly," the leaflet says in Arabic.

  "Know that the terrorists have made you hostages and human shields and safeguard your interests," it continues.

  There are no Palestinian villages in the zone, which corresponds to the site of three former Israeli settlements.

  Israeli troops and settlers were pulled out of Gaza earlier this year after 37 years of military occupation, but the territory's coastline and airspace, and its borders with Israel, remain under Israeli control.

  Air strikes

  Israeli Prime Minister Ariel Sharon gave the order to impose the buffer at a meeting with cabinet colleagues and security officials on Sunday.

  

  The move followed talks on Thursday in which the prime minister told the army to do everything possible to stop rocket fire from the territory.

  A rocket attack that day wounded four Israeli soldiers.

  A Palestinian man was killed when the army responded by firing artillery shells at the launch site in a field it said was empty.

  The Palestinian president, Mahmoud Abbas, has asked militant groups to stop firing rockets.

  But Islamic Jihad, blamed by Israel for the majority of the attacks, has reportedly rejected Mr Abbas' call, blaming Israel for a recent escalation in violence.

  They say the rocket attacks are retaliation for raids in the West Bank, as well as air strikes on Gaza.

  ---

  Sharon Party Favors Palestinian Statehood

  JERUSALEM -- Prime Minister Ariel Sharon's new centrist party on Monday declared Palestinian statehood as a central goal, and Israel signaled it would drop a threat to ban Jerusalem's Palestinians from voting in their parliamentary election. The signs of a moderate line for present and future political moves were tempered, however, by an announcement of new Israeli settlement construction in the West Bank. The latest building, disclosed in newspaper ads published Monday seeking bids from contractors, would violate Israel's commitments under the U.S.-backed "road map" peace plan. The plans include 228 homes in the settlements of Beitar Illit and Efrat _ both near Jerusalem.

  Sharon aide Raanan Gissin said plans for the latest construction began more than five years ago. He said the construction would be in settlements that Israel plans to retain after a final peace settlement with the Palestinians. "These are the large settlement blocs; they will be strengthened," he said. The road map calls for a freeze on all settlement construction in the West Bank, which the Palestinians claim as part of a future state. Since accepting the plan in June 2003, Israel has continued to expand settlements. The Palestinians also have not carried out their initial road map obligation to disarm militant groups.

  Palestinian negotiator Saeb Erekat condemned the expansion and urged the U.S. to intervene. U.S. Embassy spokesmen in Israel were not available for comment. The settlement plans came as Sharon's new political party, Kadima, signaled it is ready to hand over more West Bank territory to the Palestinians and work toward an independent Palestinian state after Israeli elections March 28. Opinion polls forecast a strong victory by Sharon's bloc.

  On Monday, doctors disclosed that Sharon, 77, will have to undergo a procedure to close a tiny hole in his heart. The announcement that the defect led to the mild stroke he suffered Dec. 18 drew further attention in the election campaign to Sharon's health. Sharon left the hard-line Likud Party last month to form Kadima, saying he would have more freedom to negotiate a peace deal. Many Likud members remain furious with Sharon over his withdrawal from the Gaza Strip and part of the West Bank in September.

  A draft of Kadima's election platform published Monday called for conceding more land to the Palestinians as part of peace talks culminating in a Palestinian state. The talks would be based on the road map, which endorses a Palestinian state but says its borders must be reached through negotiations. "The basic tenet of the peace process is two national states," says the platform. Party spokesman Lior Chorev said the draft, detailed in the daily newspaper Maariv, was to be approved by next week. The Kadima platform says Israel's existence "requires giving up part of the Land of Israel." For decades before the Gaza pullout, Sharon was the main advocate of building settlements and keeping the West Bank and Gaza. With the Gaza withdrawal, he became the first Israeli leader to turn over territory to the Palestinians. Since leaving the Likud, the former patron of the settlement movement has made it clear that giving up more land, including parts of the biblical Land of Israel in the West Bank, is necessary to maintain a Jewish majority in Israel. More than 2 million Palestinians live in the West Bank.

  Also Monday, Israeli officials said the government may drop its opposition to allowing Palestinian residents of Jerusalem to vote in next month's Palestinian elections. Israel threatened last week to bar voting in east Jerusalem since the Islamic group Hamas is participating, a warning that infuriated the Palestinians and led to threats to cancel the election and blame Israel. Control of Jerusalem is one of the central disputes in the Israeli-Palestinian conflict.

  Separately, in Ramallah, a Palestinian court cleared the way Monday for the ruling Fatah Party to submit a single list of candidates for the parliamentary election, though registration officially closed Dec. 14. A poll published Monday showed Hamas would finish first, ahead of the two Fatah lists _ the old guard and young leadership. The two squabbling factions had already decided to reunite. Monday's decision cleared the way for them to enter a combined list.

  ---

  O Joyful Town Of Bethlehem

  
  "This wall, one day, we hope it will not exist.

  steady stream of worshippers braved cold, rainy weather Sunday to celebrate Christmas in Bethlehem, where spirits were lifted by the largest turnout of foreign pilgrims in years.
  
  Despite the foul weather, Bethlehem residents had reason to smile. About 30,000 pilgrims converged on the birthplace of Jesus for Christmas celebrations this year, Israeli officials said, about twice as many as last year and by far the highest turnout since fighting broke out in September 2000.
  
  Palestinian merchants, who depend on tourism, were glad to see the biggest crowds, too, reports CBS News correspondent Robert Berger audio).
  
  Although the crowds remain a fraction of the peak years in the mid-1990s, the influx of tourists reflected the improved security situation. Israel and the Palestinians declared a cease-fire last February, bringing a sharp drop in bloodshed. Israel's recent withdrawal from the Gaza Strip also has buoyed spirits.
  
  In Christmas messages, the Israeli and Palestinian leaders both expressed wishes for peace in 2006.
  
  Latin Patriarch Michel Sabbah, the top Roman Catholic envoy in the Holy Land, spoke of the new atmosphere in the air in his midnight Mass address and urged both sides to put a final end to violence.
  
  "There seems to be a new Palestinian and Israeli political reality, despite the many complications and hesitations that surround it," Sabbah said. "Leaders with good and honest intentions can make of this new era a time of new blessings ... stopping the past to make room for a new future begin."
  
  This year's festivities brought a long-missing sense of holiday cheer to Bethlehem. For the first time in six years, restaurants were crowded, souvenir sales were brisk and hotels were full of tourists.
  
  "This was a very, very exceptional Christmas," said Abdel Rahman Ghayatha, the Palestinian police commander in downtown Bethlehem. "We did not expect this big a turnout of people, especially in light of the rain and cold. It was very exceptional and very orderly."
  
  Several thousand tourists poured into Bethlehem on Sunday for services in the Church of the Nativity compound, above the grotto where Jesus is believed to have been born. Worshippers lined up outside the packed churches waiting to get in, a contrast to the sparse turnouts of previous years.
  
  "It's really a blessing to be here. Not all people can come here and see the place where Jesus was born," said Hecel Estares, 26, of the Philippines, who works in Israel as a health aide. Estares was among more than 1,000 people who attended a special service for Filipino worshippers.
  
  "Well, it's a birthday isn't it? This is where it started, so let's go right to the origin. That's my logic," James Elsman of Detroit explained to Berger.
  
  Nearby Manger Square was turned into a makeshift parking lot, filled with dozens of vehicles, while a steady stream of buses took cover in an underground lot.
  
  Israeli Prime Minister Ariel Sharon called local Christian leaders on Saturday to wish them a merry Christmas, saying he hopes the new year will bring Israel and the Palestinians peace and security.
  
  Palestinian leader Mahmoud Abbas, who attended Christmas Eve celebrations in Bethlehem, also offered a message of peace.
  
  But he also criticized Israel's massive West Bank separation barrier, which divides Bethlehem and blocks access to neighboring Jerusalem. Israel says the barrier is needed to stop suicide bombers, but the Palestinians say the structure, which dips into the West Bank in many places, amounts to seizure of land they claim for an independent state.
  
  The Palestinians "are seeking a bridge to peace instead of Israeli walls," Abbas said in a televised speech Saturday. "Unfortunately, Israel is continuing with its destructive policy ... (and) transforming our land into a big jail."
  
  The barrier put a damper on the Christmas spirit, preventing tourists from walking into town on the biblical-era route likely used by Jesus and Mary. Instead, they were forced to enter through an Israeli checkpoint.
  
  "This wall, one day, we hope it will not exist," said Sabbah.
  
  "The wall has got to go. It's a wall of shame. Jesus is a uniter not a divider," said Elsman, a 69-year-old lawyer, a placard saying "Trust Jesus" draped over his shoulders.
  

  ---

  Bethlehem a 'prison' - patriarch

  Israel's most senior Roman Catholic leader has said Bethlehem has become an "immense prison" since the erection of the West Bank barrier.

  Michel Sabbah, the Latin Patriarch of Jerusalem, called for all barriers between people to be dismantled.

  He was joined by Palestinian leader Mahmoud Abbas, ambassadors from several countries and thousands of Christians for Christmas Eve mass in Bethlehem.

  Israel says the barrier is defensive, but Palestinians see it as a land grab.

  'Bridges of peace'

  The patriarch, who is the pope's representative in the Holy Land, called for the barrier to be removed and said "bridges of peace and love" should be built instead.

  He defended the rights of Palestinians to have their own homeland and live free of occupation.

  

  But he said those who held power had to realise that they could not rule through violence, but only by winning the hearts of both Palestinians and Israelis.

  "Nobody needs checkpoints in the Holy Land," he said, according to Israel Radio.

  Mr Abbas, participating for the first time in Christmas celebrations since his election as Palestinian Authority president in January, said his people were "seeking a bridge to peace instead of Israeli walls".

  Earlier, Israeli Prime Minister Ariel Sharon called Christian leaders with Christmas greetings and expressed his hope that the new year would bring peace and security for Israel and the Palestinians.

  "We all need it and I intend to make every effort to reach it," he said in a statement.

  Choirs and bunting

  A ceasefire in place between Israel and most Palestinian militants has brought in many more visitors than last year.

  Some 30,000 tourists were expected to visit Bethlehem over the Christmas weekend - about 10,000 more than last year.

  Israeli officials said about 7,000 tourists had already gathered in the city by Saturday evening.

  Israel has built a new crossing point in the eight-metre- (25ft-) high concrete barrier to enable thousands of foreign visitors to pass into Bethlehem.

  Throughout the day choirs, marching bands and bagpipe players entertained the crowds, before they gathered in Manger Square to watch a procession led by the patriarch.

  Christmas lights, bunting and lines of fluttering Palestinian flags created a sense of cheer despite the sombre political background.

  The BBC's Dan Damon in Bethlehem says many Christian pilgrims braved heavy wind and rain to wait outside the Church of the Nativity to celebrate Midnight Mass.

  But he says there is still tension, with Palestinians complaining about the lack of jobs and frequent arrest raids by Israeli troops.

  ---

  Israel plans Gaza 'aerial siege

  

  Israel says it will impose an "aerial siege" along its border with Gaza to stop militants firing rockets from a new Israeli-declared buffer zone.

  Deputy Defence Minister Zeev Boim said Israel would give Palestinian police a map of the zone and drop explanatory leaflets over the area to warn people.

  Palestinian militants have stepped up their rocket attacks since Israel withdrew from Gaza in September.

  Israel's decision followed an attack on Thursday that wounded four soldiers.

  A Palestinian man was killed when the army responded by firing artillery shells at the launch site in a field it claimed was empty.

  'Tighten the screw'

  Mr Boim told Israeli Army radio that the buffer zone would be about 2.5km (1.5 miles) deep and run along the northern and eastern edge of the Gaza Strip.

  "We are tightening the screw... by creating these areas, in the hope that they will get the message and that this will stop the rocket squads," he said.

  "If we must, we will have to tighten the screw further."

  The minister also revealed that the Israeli army might now begin to fire shells at populated areas of Gaza in response to an attack by rockets.

  "We need to tell the residents of Beit Hanoun, Beit Lahia, and the suburbs of Jabaliya: 'In 12 hours, artillery will land in the area, evacuate these areas'," he said.

  "I think one operation of this sort can solve the problem."

  Israeli officials have also discussed cutting off Gaza's electricity supply in response to rocket attacks, but army commanders and the attorney general are opposed to the collective punishment of residents.

  But Yuval Steinitz, the chairman of the Knesset Foreign Affairs and Defence Committee, said he would not rule it out.

  "It can't be that they fire at us from there and we provide electricity," he told Israel Radio.
  
  

  ---

  Gunmen storm city hall in biblical Bethlehem

  

  BETHLEHEM, West Bank - Palestinian gunmen briefly seized Bethlehem city hall, overlooking the Church of the Nativity, on Tuesday in a jarring interruption to Christmas preparations in the traditional birthplace of Jesus.

  The incident, five days before Christmas, was another sign of growing lawlessness in Palestinian territories and the turmoil within Palestinian President Mahmoud Abbas' Fatah faction ahead of a January parliamentary election.

  About 20 gunmen from Fatah��s al-Aqsa Martyrs Brigades fanned out on rooftops and in the offices of city hall, firing several shots in the air and forcing workers out. They demanded money and jobs for about 320 members.

  Masked gunmen carrying assault rifles appeared beside the glittering star set up on the roof ahead of festivities.

  Witnesses said that the gunmen left after about an hour after Bethlehem��s governor promised to address their demand for jobs and pay.

  ��What happened in Bethlehem is regrettable, especially as it comes at a time when the city is preparing itself for Christmas festivities,�� said Bethlehem Mayor Victor Batarseh.

  Memories of five-week standoff
  The episode revived memories of a five-week standoff between the Israeli army and a band of gunmen who took over the Nativity church in 2002.

  Bethlehem has only just begun to recover from the siege, which turned the town into a virtual war zone and badly damaged its tourism industry.

  As the drama in Bethlehem unfolded, about a 100 al-Aqsa brigades gunmen took over the local Fatah offices in the southern Gaza Strip city of Khan Younis to demand jobs for members.

  Abbas' Fatah faction has been split ahead of a January 25 parliamentary election in a power struggle between veteran leaders tainted by corruption and a young guard seeking a bigger share of power.

  In an ultimatum to Abbas, the Gaza gunmen said they would prevent foreigners from entering Gaza and would lead a boycott against the election unless the Palestinian leader found jobs for militants in the security forces.

  ��We will also split from Fatah if our rights are not achieved,�� one of the gunmen said.

  ---

  Mideast arms race�� fears as Israel ups Iran pressure

  Israel is turning up the heat over Iran��s nuclear progamme as European-led negotiations languish and the region goes down the path of an arms race reminiscent of the cold war. While some analysts in Washington see Israel��s efforts as aimed at putting more backbone into the US administration��s diplomatic approach, others see an increased chance of Israeli military action.

  Mohamed ElBaradei, head of the UN nuclear watchdog, who is in Oslo to receive the Nobel peace prize, warned yesterday that a ��military solution would be completely counterproductive��. The next months would be crucial, he said. Analysts say the more evident Israeli pressure – due in part to the dynamics of domestic electioneering – is driven by worries that the US is going soft on Iran and that negotiations are dragging on. This concern is focused on the EU-backed ��Russian proposal��, which would allow Iran to develop the initial stages of the fuel cycle and then have Russia complete the enrichment of uranium for the civilian reactor it is building on Iran��s southern coast.

  The American Israel Public Affairs Committee, a powerful Washington lobby group, has decried the US embrace of this proposal as a ��disturbing shift�� in policy. ��Israel is very concerned that a form of defeatism has taken over the White House,�� said Trita Parsi, a Middle East specialist at Johns Hopkins University. Each time the US signals possible compromises with Iran, Israel raises its threat level to bring the US back in line, he said.

  European diplomats say Israel��s threats are aimed at shaping the Russian ��pro-posal��, which is a set of ideas rather than a specific plan on paper. They also believe the US support was directed at getting President Vladimir Putin on side, calculating that Iran would reject the plan anyway.

  Iran denies its civilian nuclear programme is a cover for developing a bomb. Tehran has not rejected the Russian ideas outright, but the EU3 – Britain, France and Germany – have not agreed on terms for continuing negotiations. Cliff Kupchan, analyst with the Eurasia Group consultancy, is less sanguine about the prospect of a diplomatic solution. ��I would not rule out an American or Israeli strike,�� he said.

  US Vice-President Dick Cheney raised the possibility of a pre-emptive Israeli strike last January, saying they ��might well decide to act first, and let the rest of the world worry about cleaning up the diplomatic mess afterwards��. A former senior US official said the danger of a US strike existed six months ago, but the US position had since shifted to long-term containment.

  Russia last week confirmed the sale to Iran of about $1bn of mobile, surface-to-air TOR-M1 missiles and other hardware. On the same day Israel announced a successful test of its Arrow defence system, which intercepted a missile simulating an Iranian long-range Shahab-3.

  Israel is also reported to be building up the long-range capability of its air force. Experts say Israel��s intention to increase its fleet of German-built Dolphin submarines is aimed at establishing a ��second-strike�� nuclear capability. ��The trend is definitely moving towards a cold war in the Middle East between the two most powerful nations in the region,�� commented Mr Parsi. Last week Dan Halutz, Israeli military chief of staff, was asked how far Israel was ready to go to stop Iran. ��Two thousand kilometers,�� he replied.

  ---

  Hamas to end truce with Israel

  

  The political leader of the Palestinian militant group Hamas has said it will not renew its informal ceasefire with Israel that expires at the end of year.

  Khaled Meshaal told a rally in the Syrian capital Damascus his group was preparing for a new round of conflict.

  The truce begun in February was based on Israel ending its attacks on Palestinians and releasing prisoners.

  Hamas had already said it would pull out of the truce when Israel killed a military leader in November.

  Addressing the crowd at the Yarmouk refugee camp near Damascus, Mr Meshaal said there was no room for a truce.

  "I say to our brothers in the [Palestinian] Authority that we are witnessing political stagnation," he said.

  "I say it loudly, we will not enter a new truce and our people are preparing for a new round of conflict."

  Mr Meshaal was named the organisation's most senior figure after the assassination of Hamas leader Sheikh Ahmed Yassin in March 2004.

  Correspondents say Hamas' politburo, which Mr Meshaal heads, is more hardline and ideological than the group's leadership in Gaza.

  ---

  Israelis Hand Off Gaza Crossing Palestinians Take Control of Rafah

  

  Mr Barroso: I just want to underline how important we think it is, the Rafa Agreement. I think it is an historic achievement also for the European Union, because it shows the European Union has the trust and confidence of the partners there. We are there on the ground, with a key role, a role that is at the same time active monitoring, but also of capacity building with our Palestinian friends. And so we should now build on this. It is important in terms of freedom, people can get out, can get in, but also it is important in terms of the economy because it is not only people, but goods. So it is important for the development.

  As President Mahmoud Abbas was telling us before, he has to address the concerns of young people who have no job in their territory. And so we should now build upon this. The European Commission is ready to help on the ground with concrete decisions. Now we have the seaport, that is a major development, it is a major infrastructure for that region, and we are ready to help. So I was very encouraged. We know how difficult the situation is, but we believe there are reasons for hope.

  Question: A question to Mr Tony Blair. In your capacity as President of the European Union, Libya is invited here at this summit. Will you have the following message to our Libyan friends, to free the Bulgarian nurses? And a second question, in your capacity as British Prime Minister, Libya has indicated its willingness to horse-trade its national ... for the Bulgarian nurses, what is the British answer to that?

  Prime Minister: If you will forgive me, I don't think there is a comment I would like to make on this at the moment, other than to say that I know it is a subject of very great concern to Bulgaria, but we hope this issue can be resolved, and we are doing our best to try and help resolve it, but sometimes these things are better resolved with diplomacy and we will try to do that.

  Question: Prime Minister, after the opening up of the Gaza to movement in and out, is it now the time for the Americans to get much more deeply involved in trying to stimulate progress? And briefly, if I may, on another matter. Is there any question at all of the government re-opening the pensions deal in our country in the light of wider reform?

  Prime Minister: John, I hope you will really forgive me on this, but I spent a lot of time with you guys yesterday doing domestics, and today I think we have got to keep the focus on this. Let me just say one thing to you. Of course Secretary of State Rice also played a major part in the Rafa Agreement, and I think the Americans are heavily involved in this today, and I hope they remain so, because we need all the international community, and in particular the Quartet, engaged in making sure that the progress that is being made, we keep on making that progress, and this is going to be vital. Because as President Abbas was rightly explaining to us, he is doing his best for the Palestinian people, but he needs to see progress, he needs to see it in economic terms, he needs to see it in political terms, and he wants that progress also in security terms. So in all these areas it is important the international community works together, it is doing so, and I think the degree of engagement today by America is quantitatively and qualitatively different from that of a few years back, and I think that should be recognised.

  Question: If I may, Prime Minister Blair, as co-chair, many Arab leaders did not come to this summit, how do you think it has affected this summit and were you expecting such a low turnout from the Heads of State? And for President Abbas, if I may, in Arabic ... (not interpreted).

  Prime Minister: Look, just on the first point, obviously there are various reasons why some of the leaders have not been able to come, but I am sure we will have a good conference nonetheless. And the event I will be attending shortly, which is the Alliance of Civilisation event that has been put together by Spain and Turkey, I think is a very important indication that Euro-Med has a function obviously in economic and development terms, but also has a crucial political role to play in trying to bring people from Europe, and also from Mediterranean countries, and some of those further afield where the countries will be predominantly Muslim. It also has a very clear role there in trying to make sure that people see what they have in common and live together side by side in peace, whatever religion they come from, as opposed to what those who are engaged in international terrorism, which is to be pitted against each other.

  Prime Minister: I know, well I am shocked with them as well, but what can I do?

  Question: Mr Blair, how confident are you of securing a deal on the EU budget at the December Summit? And could I also ask Mr Barroso, how confident are you in Mr Blair being able to broker that deal?

  Prime Minister: Well we will have many opportunities to discuss that over the next few days, but can we take one other on the Palestinian Middle East issue, to be fair.

  Question: I would like to ask both Prime Minister Blair and President Abu Mazen please. Concerning the differentiation between terrorism and defending against occupation, how do you see this problem? Thank you.

  Prime Minister: I think it is extremely important that we distinguish between two quite separate things. There is a process in place now, which we want to give every support to, which is a democratic process and a process of negotiation and dialogue. And people fully understand and accept the sense of injustice that people can have, and that sense of injustice I should imagine is never confined to one side, and that is why it is so important that there is progress on the Palestinian side in economic development, and also as I said in political development as well. But we do not believe that terrorism assists this process; on the contrary, it actually is an obstacle to progress. And that is why it is so important, with the leadership of President Abbas, that the Palestinian side are able to establish the right dialogue with Israel in order to get to the two state solution. But the one thing for sure is, terrorism is not a route to that solution, it is an obstacle to it.

  ---

  Palestinians celebrated a step toward independence from Israel on Friday with a jubilant ceremony opening the Rafah border crossing between the Gaza Strip and Egypt, their first self-governed passage to the outside world.

  The event marked a milestone in the long Palestinian-Israeli conflict by giving a Palestinian government control over an international border crossing for the first time. The opening is the most tangible benefit the Palestinian Authority has gained since Israel's withdrawal from Gaza a little over two months ago, an evacuation that ended a 38-year Israeli presence in the strip but left its borders under Israel's control. Palestinian leader Mahmoud Abbas, who stands to benefit politically from Rafah's opening, told roughly 1,200 Palestinians, European diplomats and Egyptian officials who will help monitor the border that the measure of autonomy was "a dream that has come true for us." But he said the opening was a modest step and pledged further progress toward the creation of a Palestinian state alongside Israel that would include the more populous West Bank.

  "Our sovereignty is not yet complete," Abbas said during his speech inside a tent on a day of brilliant blue skies and a light breeze. "Sovereignty cannot be divided. It has to include both parts of the homeland and make them one territory."

  The Rafah crossing has tremendous social importance for the 1.3 million Palestinians in Gaza, many of whom have family on the far side of the heavily fortified frontier that Israel had patrolled since occupying the strip in the 1967 Middle East war. Before its evacuation of 8,500 Jewish settlers and the soldiers who protected them, Israel regulated traffic through Rafah. But the crossing was frequently closed for long periods, disrupting people's lives and sometimes leaving Palestinians on the wrong side of the border for weeks at a time.

  In the days following Israel's departure, thousands of Palestinians stormed through the barrier in a chaotic demonstration of newfound freedom. But several days of unchecked crossings, marked by family reunions, smuggling and afternoons at the beach along the Sinai coast, ended when embarrassed Egyptian and Palestinian security forces restored the barrier. The display of exuberance infuriated Israeli officials, who had withdrawn from the frontier after Egyptian and Palestinian security forces pledged to maintain the closure until a new crossing could be established in six months.

  Since then, the crossing has remained sealed while Israeli and Palestinian delegations negotiated an agreement to open Rafah and the cargo terminal at Karni between Gaza and Israel, a passage of far greater economic importance to Palestinian farmers and factory owners who sell most of their goods outside of the impoverished strip. Under pressure from special Middle East envoy James D. Wolfensohn and Secretary of State Condoleezza Rice, Israel agreed on Nov. 15 to open Rafah and increase cargo traffic at Karni in time for the winter harvest.

  Under the Rafah agreement, a team from the European Union will monitor people using the crossing from a control room at the site. Israeli officials, meanwhile, will be allowed to watch people crossing on a live video feed at a terminal several miles away. But for the first time Israeli officials will not be allowed a veto over who is allowed in or out of the strip, a right they sought during weeks of talks. Egyptian officials will control passage on the other side. "Hopefully, this is the beginning of creating a situation in which there will be a constant flow of goods and people in and out of Gaza," said Mark Regev, a spokesman for the Israeli Foreign Ministry. "Israel understands that such a flow of goods and people is an integral aspect of making Palestinian-controlled Gaza a success. The fundamental truth is that a successful Gaza is key to moving forward on the peace process."

  But Regev warned that Palestinian extremist groups might attempt to use the Rafah crossing as a smuggling route for explosives, weapons and cash to fund suicide bombing missions. He said, however, that he was "cautiously optimistic" any such efforts would be detected. "Everyone is very cognizant of the threat," Regev said. "The reason that this can work is that these groups are enemies to all of the parties, not just to Israel but also the Palestinian Authority as it seeks to govern Gaza."

  The ceremony Friday was a symbolic opening. Abbas, who said that "the magic key that can give us everything is security," became the first Palestinian to have his passport symbolically stamped after touring the once-shabby Rafah terminal, which had been painted for the event. The crossing, draped Friday with a banner declaring "Crossing to Freedom," opens Saturday to general Palestinian traffic. The crossing will be open four hours a day until the full complement of roughly 70 European monitors are in place. Diplomats say they hope this will happen within a month to handle travelers heading to Mecca on the annual Muslim pilgrimage known as the hajj. It will then operate around the clock. Only foot traffic will be allowed through Rafah until new vehicle scanners are installed. Gaza exports will be allowed out through Rafah, but incoming cargo will pass through the Kerem Shalom terminal a few miles to the southeast where the Israeli, Gaza and Egyptian borders converge. It will remain subject to Israeli-Palestinian customs protocols.

  Marc Otte, the European Union's Middle East envoy, said the day was one of "happiness." In a brief speech, Otte told the Palestinians that Rafah's opening was a step toward "transforming your borders into bridges with your neighbors and with Israel." The opening could improve Abbas's standing with the Palestinian public, which is now preparing for Jan. 25 parliamentary elections. Those will be the first national elections in which the Islamic Resistance Movement, or Hamas, plans to compete against the secular Fatah movement, which Abbas heads. The radical Palestinian group has claimed credit for Israel's unilateral withdrawal from the Gaza Strip, saying its attacks on Israeli soldiers and civilians by suicide bombers forced the evacuation. Hamas -- whose leader in Gaza, Mahmoud Zahar, attended Friday's ceremony -- has yet to recognize Israel's right to exist. "Two moments in my life have been full of joy," Zahar said. "The first was when I entered the evacuated settlements in Gaza, and the second was when I came here today to see the crossing empty of Israelis. They were here, and now we are here. Tomorrow we're going to be in the West Bank and the next day in Jerusalem."

  As head of Fatah -- which supports a peace process with Israel -- Abbas has had difficulty in recent months explaining to potential Palestinian voters why a negotiated settlement of the conflict is a favorable alternative to Hamas's brand of armed resistance. Palestinian officials have complained that Israel's apparent reluctance to ease passage at Gaza's border crossings and continuing occupation of the West Bank have weakened moderate Palestinians such as Abbas, who has long asserted that the armed uprising undermined Palestinian interests. Standing at Rafah, Abbas said, "The achievement we're celebrating today belongs first and foremost to the martyrs, wounded, prisoners and all Palestinians who have sacrificed in this struggle. "I think every Palestinian now has his passport ready in his pocket," Abbas said. "Let them come to cross at this terminal whenever they want."

  ---

  UN probe to quiz Syrian officials

  Syria has agreed to allow UN investigators to quiz its officials over the assassination of ex-Lebanese Prime Minister Rafik Hariri.

  Syrian Deputy Foreign Minister Walid Muallem said the questioning of five officials would be carried out at UN offices in Vienna.

  He said Syria had been given "reassurances" on its sovereignty.

  The announcement follows weeks of deadlock between the UN investigation and Syria on the issue.

  Syria had refused a request by German prosecutor Detlev Mehlis, who is heading the inquiry, to carry out the interviews in Lebanon.

  Mr Mehlis was unwilling to accept a Syrian offer to allow questioning either in Syria itself or at the Arab League headquarters in Cairo.

  "The [Syrian] leadership has decided to inform Mehlis that it accepts his suggestion, as a compromise, that the venue to listen to the five Syrian officials be the UN headquarters in Vienna," Mr Muallem said.

  UN spokeswoman Marie Okabe said Mr Mehlis confirmed the agreement in a telephone call to UN Secretary General Kofi Annan.

  Mass protests

  One potential sticking point remains, says the BBC's Jon Leyne in neighbouring Jordan.

  The UN originally said it wanted to speak to six Syrian officials, but Syria is talking of five officials travelling to Vienna, he says.

  KEY UN FINDINGS
  Assassins had considerable resources and capabilities

  Evidence suggests both Syria and Lebanon were involved

  Crime was prepared over several months

  Hariri's movements and itineraries were monitored

  Highly unlikely Syrian or Lebanese intelligence were not aware of assassination plot
  UN report in full (488K)

  ---

  Rice Rubukes Iran

  "No civilized nation should have a leader who wishes or hopes or desires or considers it a matter of policy to express that ... some another country should be pushed into the sea."

  U.S. Secretary of State Condoleezza Rice gave her strongest rebuke yet on Sunday to the renewed hardline Islamic leadership of Iran, saying that "no civilized nation" can call for the annihilation of another.
  
  Rice was referring to Iranian President Mahmoud Ahmadinejad's remark last month that Israel is a "disgraceful blot" that should be "wiped off the map." Her remarks drew applause from politicians, diplomats and others gathered for a U.S.-Israeli symposium.
  
  "No civilized nation should have a leader who wishes or hopes or desires or considers it a matter of policy to express that ... some another country should be pushed into the sea," Rice said, speaking slowly and sternly. "It is unacceptable in the international system."
  
  Speaking a day after part of her agenda for political openness in the Middle East ran into heavy weather, Rice also said the Bush administration is under no illusions about the difficulty of spreading democracy in the region.
  
  "We are not naive about the pace, or difficulty, of democratic change," Rice said. "but we know that the longing for democratic change is deep and urgently felt."
  
  Profound change is underway in the Middle East, Rice said near the close of a diplomatic trip that began with encouragement for incipient democracy in post-Saddam Iraq and will end Monday with condolences for nearly 60 people killed in a terrorist bombing last week in Jordan.
  
  "We have hope for peace today because people no longer accept that despotism is the eternal political condition of the Middle East," Rice said.
  
  The hard-liner Ahmadinejad was the surprise winner in June elections in Iran, and he immediately set about undoing the reforms and international outreach of the previous moderate-leaning government.
  
  "When we look at a country like Iran we see an educated and sophisticated people who are the bearers of a great civilization," Rice said. "And we also see that as Iran's government has grown more divorced from the will of its citizens it has become more threatening, not less threatening."
  

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  Gaza Pullout

  
  

  Creating a Palestinisan state poses a wide range of political, economic, social, and environmental challenges. Considering the fact that the Israeli-Palestine conflicts are the root causes of the current instablility of the world, the US should actively engage in resolving the statehood issue of Palestine. Israel's bold move to evacuate Gaza strip is a step forward for a complehensive Middle eastern peace. Israel cannot exist without an Arab consent. Without strong US backing unlike the Cold War era when Israel enjoyed unconditional US support, Israel is now in a weaker position. Israel is no longer a bastion against Communist expansion in the Middle East, reducing its value as a strategic partner of the US. To live peacefully with its neightbours, Israel has to make concessions and start conforming with international law. As a former General of the Israeli army during the Six-Day War, Sharon still maintains his militant perspectives in dealing with his Arab neighbours. The demise of Rabin was a huge loss for the peace process.
  

  The Hariri investigation

  The assassination of the Lebanese PM Hariri resulted in the suicide of the Syrian interiro minister. Syria is under strong pressure from the international community to come clean on its act of terror. But the Syrian president organized a massive demonstration in Damascus to to defy the international pressure. The U.N. Security Council unamimously adopted a resolution calling for Sysian cooperation for the investigation. Nevertheless, a military action against Syria is unthinkable under the condition that the US is still preoccupied with Iraq. But Mr.Bashir will have to show his willingness to cooperate with the UN or he will face severe sanctions.
  

  US tackles Syria on human rights

  
  

  The United States has called on Syria to stop what it calls the arbitrary detention of pro-democracy and human rights activists. Secretary of State Condoleezza Rice made the call at a summit of foreign ministers in Bahrain aimed at promoting reform in the Arab World.

  President George W Bush earlier called on Syria to "stop exporting violence and start importing democracy". Responding to the criticism, Syria accused the US of a "hidden agenda".

  "I expect everything because they build their policies on a hidden agenda," Foreign Minister Farouq al-Shara told reporters in Bahrain without giving details.

  Dissident held

  Ms Rice, currently on a tour of the Middle East, said Washington continued to support what she described as the aspirations of Syria's people for liberty, democracy and justice.

  She called for the freeing by Damascus of all prisoners of conscience including Kamal Labwani, who was arrested earlier this month after returning from a visit to the US. She also repeated a demand for Syria to co-operate fully with the United Nations inquiry into the assassination of former Lebanese Prime Minister Rafik Hariri in February. "They should stop trying to negotiate and co-operate," she told reporters travelling with her on her tour, which began in Iraq. Syria's foreign minister said his country would "fully co-operate" with the inquiry and had "no reservations except concerning the sovereignty of Syria".

  Arab foreign ministers at the Bahrain summit insisted the resolution of the Israeli-Palestinian conflict was central to building democracy in the Middle East. Ms Rice is also due to visit Saudi Arabia, Israel, the West Bank and Jordan during her 10-day trip.

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  See Rand Review
  

  The Iranian Conundrum

  
  
  

   Iran openly restarted its nuclear programes by breaking the UN seals. With the deteriorating relations with the U.S. , Iran must have nuclear weapons to deter an American invasion.  Nevertheless, condoning another nuclear state would open a flood gate of nuclear proliferation. The IAEA should take appropriate measures to nip the Iranian nukes in the bud. But it should not give the U.S. a pretext of an Iran war. The UN should function as a forum to rein in on US aggression and to prevent a birth of another nuclear state at the same time. "All options are on the table." That is the core US Iranian policy. Since the Islamic Revolution in 1978, the US has taken a hostile approach against Iran. The Iranian hostage crisis was a natural consequance of US Middle Eastern policy. As long as the US stay in Iraq, Iran would support insurgents by smuggling arms.

  In his annual speech to French ambassadors at the Palace, Mr. Chirac made clear that he was losing patience with Iran, even as he urged its leaders to accept an offer of incentives by France, in exchange for an indefinite freeze of its uranium conversion and enrichment activities

  Today I call on the Iranian authorities to choose the path of cooperation and confidence by carefully examining this offer and resuming their commitment to suspend activities related to the production of fissile materials," Mr. Chirac said. He added: "There is room for dialogue and negotiation. We call on Iran's spirit of responsibility to restore cooperation and confidence, failing which the Security Council will have no choice but to take up the issue."

  * Read Analysis on the Iranian Election from Wilson Center
  
  

  Q: What has Iran done? A: Iran promised Britain, France and Germany last year that it would stop all efforts to make nuclear fuel while negotiating an agreement on trade and cooperation. This week, it ended that suspension. On Wednesday, U.N. inspectors watched as technicians removed seals from machinery at a uranium conversion plant in Isfahan. The plant, now ready to operate, converts uranium into uranium hexafluoride gas, which can be processed further into fuel for power plants or bombs. Iran ��which says it wants the fuel to make electricity, not weapons ��has not restarted a plant at Natanz that completes the uranium conversion. Q: Why is this important? A: Iran, as a signer of the Nuclear Non-Proliferation Treaty, has a right to make nuclear fuel and has one nuclear power plant under construction. But after an Iranian opposition group in 2002 revealed the existence of the enrichment plant in Natanz, the Iranian government admitted that it hid much of its nuclear program for nearly 20 years. The United States does not trust the Iranian government because of that deception and for other reasons, including Iran's harsh treatment of dissidents and its support of foreign militant groups such as Hezbollah in Lebanon. Q: What happens next? A: The 35-member IAEA board, meeting since Tuesday in Vienna, is considering a resolution that would urge Iran to stop its activities in Isfahan and rejoin talks with Germany, Britain and France. On Monday, Iran rejected an offer of nuclear fuel and other cooperation in exchange for giving up the fuel program. Iran's new president, Mahmoud Ahmadinejad, called the 34-page proposal insulting. The IAEA is taking several days because the board tries to act through consensus. Some members, including Brazil and Argentina, have expressed concern about setting a precedent that could hinder their nuclear programs. Others, including China, have lucrative trade ties with Iran. Ahmadinejad said Tuesday that he is willing to resume negotiations with the three European countries. But it is not clear whether Iran would suspend the nuclear program again. If it does not, the European Union and the United States say they may ask the IAEA board in September to refer Iran to the United Nations Security Council for possible punishment, perhaps beginning with a ban on travel by Iranian officials. If the U.N. does not act, European countries might move on their own.

  
  
  

  A Palestinian State

  Laura Bush's visit to Palestine showed US support for the oppressed people whose country was deprived by a superior military might.

  The historic meeting between Mr Abbas and President Bush is a big step forward to bring peace to Palestine. President Bush condemned Israel for expanding its illegal settelemts in Palestine. The Us should act as an impartial ampire to mediate between the Israelis and the Palestines. Mr Abbas proclaimed his will to stem the "culture of violence" in his country and crack down on those who advocate violence.

  A viable Palestinian state is possible only with international support and foreign investment. The Japanese government pledged to contribute 1 million US dollar to help create a nation-state out of the occupied territory. The demise of Arafat brought a real opportunity to bring a peaceful resolution in the disputed territory. Israel can no longer define Palestine as a terrorist state. If Israel fails to cooperate with Mr. Abbas to find a peaceful solution to end the Israeli-Palestinian conflict, the US would not support Zionism based on oppression. A direct cause of 9/11 was the Palestine problem that had been ignored by the Bush administration in its early days. It showed that the US has to take each side to a negotiating table as a peace-maker to maintain its international reputation and legitimacy to act as a global policeman. Secretary of State could broker a peace deal with her foreign policy expertise. One should not think light of the Palestinian issue. The plight of the Palestinians has brought about radical Islam led by Osama Bin Laden. The US should eliminate the root cause of anti-Americanism by dealing with the isssue head-on.

  It is still doubtful if a Palestinian state could function as an economy. The Palestinians had relied their employment on Israel. The closing of borders has deprived them of their job opportunities. A cesession of the hostilities between two nation is crucial in creating a sustainable Palestinian state
  

  Following two years of research funded by private donors, the RAND Corporation has published two studies that provide an in-depth and comprehensive nation-building plan to overcome these obstacles, as well as a design to meet the population's infrastructure needs.

  The first study identifies policy options that Palestinians, Israelis and the international community could adopt to promote the state's success. See the RAND Palestinian State Study: Building a Successful Palestinian State.

  RAND's second study explored options for addressing the infrastructure needs of a growing Palestinian population. The results of the study can be found in The Arc: A Formal Structure for a Palestinian State. A DVD multimedia presentation on The Arc is included with the purchase of this book.

  Key findings from both studies are summarized in Helping a Palestinian State Succeed: Key Findings.

  News Release

  English Version |

  Building a Successful Palestinian State

  Full Document | Research Brief | Research Brief – Arabic (PDF)

  The Arc: A Formal Structure for a Palestinian State

  Full Document | Research Brief | Research Brief – Arabic (PDF)

  Helping a Palestinian State Succeed: Key Findings

  Full Document | Full Document – Arabic (PDF)

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