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"It has been confirmed that those behind the terrorist act in Zahedan were hired by America and the arrogance's other hands," Sayyah told the semi-official Fars News Agency.

The explosion, which some officials and media suggested was a suicide bombing, took place on a religious holiday in the mainly Shi'ite Muslim country. More than 80 people were wounded.

Defense analyst Paul Beaver said it was "highly unlikely" that the U.S. administration of President Barack Obama, who is seeking to engage Tehran diplomatically after three decades of mutual mistrust, would support Sunni insurgents in Iran.

In April, Iran's intelligence minister said it had arrested a group of people linked to Israel who were planning bombings ahead of the June 12 election, in which hardline President Mahmoud Ahmadinejad is seeking a second four-year term.

A bomb attack in Zahedan in early 2007 which killed 18 Revolutionary Guards was claimed by Jundollah (God's Soldiers), an insurgent group that says it is fighting for the rights of Iran's Sunni minority but which Tehran says is part of al Qaeda.

"The terrorists, who were equipped by America in one of our neighboring countries, carried out this criminal act in their efforts to create religious conflict and fear and to influence the presidential election," Sayyah told state radio.

"I don't know why it is better to have somebody in a so-called super max facility in, say, Colorado, than it is to keep them in Guantanamo, a state of the art facility that we built not too long ago for the explicit purpose of holding these people. There's nothing wrong with the prison at Gitmo," Kyl said.

Netanyahu, in an address seen as his response to Obama, refused to heed the U.S. call for an immediate freeze of construction on lands Palestinians claim for their future state. He also said the holy city of Jerusalem must remain under Israeli sovereignty.

''I call on you, our Palestinian neighbors, and to the leadership of the Palestinian Authority: Let us begin peace negotiations immediately, without preconditions,'' he said, calling on the wider Arab world to work with him. ''Let's make peace. I am willing to meet with you any time any place -- in Damascus, Riyadh, Beirut and in Jerusalem.''

''Our right to form our sovereign state here in the land of Israel stems from one simple fact. The Land of Israel is the birthplace of the Jewish people,'' he said.

''In my vision, there are two free peoples living side by side each with each other, each with its own flag and national anthem,'' he said.Netanyahu has said he fears the West Bank could follow the path of the Gaza Strip -- which the Palestinians also claim for their future state. Israel withdrew from Gaza in 2005, and Hamas militants now control the area, often firing rockets into southern Israel.''In any peace agreement, the territory under Palestinian control must be disarmed, with solid security guarantees for Israel,'' he said.

'If we get this guarantee for demilitarization and necessary security arrangements for Israel, and if the Palestinians recognize Israel as the state of the Jewish people, we will be willing in a real peace agreement to reach a solution of a demilitarized Palestinian state alongside the Jewish state,'' he said.

Netanyahu gave no indication as to how much captured land he would be willing to relinquish. However, he ruled out a division of Jerusalem, saying, ''Israel's capital will remain united.''

''We have no intention to build new settlements or expropriate land for expanding existing settlements. But there is a need to allow residents to lead a normal life. Settlers are not the enemy of the nation and are not the enemy of peace -- they are our brothers and sisters,'' he said.

Netanyahu also said the Palestinians must recognize Israel as a Jewish state. The Palestinians have refused to do so, fearing it would amount to giving up the rights of millions of refugees and their descendants and discriminate against Israel's own Arab minority.Although the Palestinians have agreed to demilitarization under past peace proposals, Erekat rejected it, saying it would cement Israeli rule over them.

Palestinians have said they would not revive stalled peace talks with Israel unless its settlement activities stopped, that they have recognized Israel under past interim peace deals and that refugees must be compensated or resettled. "If settlement continues Israel will be allowed to build one thousand units here and two thousand units there, which will lead Arabs and Palestinians to believe that the American administration is incapable of swaying Israel to halt its settlement activities," Erekat told the radio. "The message is clear: settlements should stop immediately."

"There are no middle-ground solutions for the settlement issue: either settlement activity stops or it doesn't stop," Saeb Erekat told Voice of Palestine radio. Erekat said Palestinian President Mahmoud Abbas expressed that message in a letter Saturday to U.S. President Barack Obama.

Erekat was responding to reports Israel and the United States were discussing a compromise that would allow some building in existing settlements under what Israel terms "natural growth" to accommodate expanding families.

A U.S. official denied Wednesday a report in the Israeli daily Maariv that the Obama administration agreed work could continue on 2,500 housing units whose construction had begun, despite its call for a total freeze to spur peace efforts.

The pact signed today also calls for the number of strategic delivery systems to be reduced to between 500 and 1,100 on each side, from 1,600 under current treaties. Such systems include intercontinental ballistic missiles, submarine-launched missiles and heavy bombers.

Obama said he intended to host a summit on global nuclear security next year. Among a flurry of other bilateral announcements today, Russia said it was prepared to let the US fly troops and weapons across its airspace to Afghanistan.

"We must lead by example and that's what we are doing here today," Obama said of the preliminary nuclear accord. "We resolve to reset US-Russian relations so that we can co-operate more effectively in areas of common interest."

U.S. telecommunications companies will now be allowed to set up fiber-optic cable and satellite links with Cuba, start roaming service agreements and permit U.S. residents to pay for telecoms, satellite radio and television services provided to people in Cuba, the White House said.

Obama also directed his government to look at starting regularly scheduled commercial flights to Cuba. Air travel between the United States and Cuba is now limited to charter flights.

At Obama's first meeting with Dmitry Medvedev, Russia's president, in London on Wednesday, both agreed on fast-track negotiations to slash their nuclear stockpiles by about a third from the end of this year

Obama would use the speech to urge the US Senate to ratify the comprehensive test ban treaty proscribing nuclear bomb trials, a treaty already endorsed by the other main nuclear powers, Russia, Britain, and France. The US has about 10,000 of the world's estimated 24,000 nuclear weapons, and Russia 13,000.

John Hutton, the defence secretary, told the Guardian Britain could despatch up to 1,000 more soldiers this summer, and Nato officials were confident that Europeans would supply up to a further 3,000.

Obama made it plain yesterday that the chances of a better transatlantic relationship hinged on European readiness to "step up to the plate" in Afghanistan and to "share the burden" for his surge.

"It is important for Europe to understand that even though I am president and George Bush is not president, al-Qaida is still a threat," Obama said. "I've come to Europe this week to renew our partnership ... America is changing but it cannot be America alone that changes." He warned that the risk of an al-Qaida attack was higher in Europe than in the US.

"I don't think the hard end of the security mission is being properly shared, and that is the view of many others including the president," said Hutton. "Europe has got to see al-Qaida is every bit a direct threat to Europe and the UK, as it is to the US." He said Nato could no longer use its dislike of Bush to avoid a commitment in Afghanistan.

Vague low-carbon language and climate change negotiations in Copenhagen in December were relegated to two paragraphs at the communique's end.

Some critics also pointed out that the summit failed to produce a co-ordinated plan to purge the global banking system of billions of dollars of toxic assets, and suggested that regulation of the financial industry should have gone further.

Brown said that the existing agreed fiscal stimulus will amount to $5tn by 2010, and the measures will raise world output by 4% by the end of next year.

The prime minister also won agreement from other G20 world leaders that the International Monetary Fund will monitor the existing stimulus,

Overall, the resources of the IMF will be trebled from $250bn to $700bn, following the lifting by the US of years of opposition. In a sign of the shift in world power, China agreed to provide $40bn of the new loans given to the IMF, with more to come from Saudi Arabia.

At the centre of the deal was a six-point plan:• Reform of the global banking system, with controls on hedge funds, better accounting standards, tighter rules for credit rating agencies, and immediate naming-and-shaming of tax havens that fail to share information.• A global common approach to dealing with toxic assets that impair the ability of banks to lend.• A $1.1tn package to supplement the $5tn stimulus to the global economy by individual countries. The $1.1tn will allow the IMF, the World Bank and others to increase lending to vulnerable countries. There will be a tenfold increase to $250bn in the IMF's facility allowing members to borrow from other countries' foreign currency reserves.• More power for leading developing countries within the IMF and World Bank, to end the stranglehold of the US and Europe on their top jobs.• $200bn of trade finance over two years to help reverse the steepest decline in world trade since 1945, with cash from a range of public and private sources.• A pledge that the fiscal stimulus, including the sale of gold by the IMF due to raise $6bn, will give help to the poorest nations and create green jobs.

Nicolas Sarkozy said the summit meant that the era of secrecy by banks was over; "great progress" had been made, he said, and the page had been turned on the economic model which had dominated since Bretton Woods in 1944 created the world's institutional framework."Since Bretton Woods, the world has been living on a financial model, the Anglo-Saxon model. It's not my place to criticise it, it has its advantages [but] clearly today a page has been turned," he said.

The summit's biggest loser may have been the fight against climate change. Diplomatic sources said China led the opposition to green language in the final communique. David Norman, the WWF campaigns director, claimed that the summit had been "a huge missed opportunity".

The bad news for Bush’s successor, Barack Obama, is that he now faces a much larger and potentially more troubling axis—an axis of upheaval. This axis has at least nine members, and quite possibly more. What unites them is not so much their wicked intentions as their instability, which the global financial crisis only makes worse every day. Unfortunately, that same crisis is making it far from easy for the United States to respond to this new “grave and growing danger.”

In at least one of the world’s regions—the greater Middle East—two of these three factors have been present for some time: Ethnic conflict has been rife there for decades, and following the difficulties and disappointments in Iraq and Afghanistan, the United States already seems likely to begin winding down its quasi-imperial presence in the region. It likely still will.

no matter how low interest rates go or how high deficits rise, there will be a substantial increase in unemployment in most economies this year and a painful decline in incomes. Such economic pain nearly always has geopolitical consequences. Indeed, we can already see the first symptoms of the coming upheaval.

In the essays that follow, Jeffrey Gettleman describes Somalia’s endless anarchy, Arkady Ostrovsky analyzes Russia’s new brand of aggression, and Sam Quinones explores Mexico’s drug-war-fueled misery. These, however, are just three case studies out of a possible nine or more.