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Venezuelan President Hugo Chavez has unveiled a series of measures to offset falling oil revenues that account for about 50% of the national budget. He proposed to cut the 2009 budget by 6.7% and increase sales taxes. Mr Chavez also pledged salary cuts for senior public officials, but a 20% rise in the minimum wage.

His announcement came shortly after the government had sent army to take control of the country's key airports and sea ports.

"We are preparing a decree to eliminate luxury costs - the acquiring of executive vehicles, redecorating, real estate, new headquarters, promotional material and unnecessary publicity, corporate gifts."

In a decision that seriously weakened the most high-profile prosecution in Europe involving the seizure of terrorism suspects, Italy’s highest court ruled Wednesday that Italian prosecutors had violated state secrecy in their case against American and Italian intelligence operatives. The decision by the Constitutional Court was a blow to a case of extreme political delicacy between Italy and the United States, in which 25 operatives from the Central Intelligence Agency, an American Air Force colonel and several Italian intelligence officials are charged with the seizure of an Egyptian terrorism suspect in 2003. The Americans are being tried in absentia.

The ruling did not throw out the original indictments, but it deemed inadmissible much of the evidence on which the case had been built, including material seized from Italian and American intelligence operatives.

The suspect, Osama Mustafa Hassan Nasr, an imam known as Abu Omar, was seized on the streets of Milan in an instance of what has become known as extraordinary rendition, in which terrorism suspects are sent for interrogation to other countries, some of which use torture. Prosecutors contend that the defendants, who include the former head of Italian military intelligence, kidnapped Mr. Nasr, took him to American military bases in Italy and Germany, and eventually to Egypt

When Charles W. Freeman Jr. stepped away Tuesday from an appointment to chair the National Intelligence Council -- which oversees the production of reports that represent the view of the nation's 16 intelligence agencies -- he decried in an e-mail "the barrage of libelous distortions of my record [that] would not cease upon my entry into office," and he was blunt about whom he considers responsible. "The libels on me and their easily traceable email trails show conclusively that there is a powerful lobby determined to prevent any view other than its own from being aired, still less to factor in American understanding of trends and events in the Middle East," Freeman wrote. Referring to what he called "the Israel Lobby," he added: "The aim of this Lobby is control of the policy process through the exercise of a veto over the appointment of people who dispute the wisdom of its views." One result of this, he said, is "the inability of the American public to discuss, or the government to consider, any option for US policies in the Middle East opposed by the ruling faction in Israeli politics."

Only a few Jewish organizations came out publicly against Freeman's appointment, but a handful of pro-Israeli bloggers and employees of other organizations worked behind the scenes to raise concerns with members of Congress, their staffs and the media. For example, the American Israel Public Affairs Committee (AIPAC), often described as the most influential pro-Israel lobbying group in Washington, "took no position on this matter and did not lobby the Hill on it," spokesman Josh Block said. But Block responded to reporters' questions and provided critical material about Freeman, albeit always on background, meaning his comments could not be attributed to him, according to three journalists who spoke to him. Asked about this yesterday, Block replied: "As is the case with many, many issues every day, when there is general media interest in a subject, I often provide publicly available information to journalists on background."

Yesterday, the Jewish Institute for National Security Affairs, which tried to derail Freeman's appointment, applauded his withdrawal. But it added: "We think Israel and any presumed 'lobby' had far less effect on the outcome than the common-sensical belief that the person who is the gatekeeper of intelligence information for the President of the United States should be unencumbered by payments from foreign governments."

There are signs that change may finally be coming to Cuba, 50 years after the revolution that brought Fidel Castro to power. In a major shakeup, Raúl Castro, Fidel's brother, fired several high-level officials last week

Some American conservatives maintain that all this is reason enough for the United States to persist in its policy of ignoring Cuba diplomatically and sanctioning it economically. At least in principle, one could argue that the revolution is running out of steam and that regime change from within may finally be at hand. The problem is that this argument ignores Cuban reality. The country is not near the precipice of collapse. To the contrary, the intertwined party, government and military have matters well in hand. The population, ensured basic necessities along with access to education and health care, is neither inclined to radical change nor in a position to bring it about.

The American policy of isolating Cuba has failed. Officials boast that Havana now hosts more diplomatic missions than any other country in the region save Brazil. Nor is the economic embargo working. Or worse: it is working, but for countries like Canada, South Korea and dozens of others that are only too happy to help supply Cuba with food, generators and building materials.

Mr. Obama for the first time set out a rough timeline for talks with Iran, saying that by the end of the year the U.S. should have a "fairly good sense ... whether there is a good-faith effort to resolve differences" with Iran.

he two remained divided on issues such as the future of Jewish settlements in the West Bank, Palestinians' right to statehood, and whether the Palestinian issue should take priority over concerns about Iran developing nuclear weapons.

Mr. Netanyahu said he would engage in peace talks with the Palestinians immediately, though he refused to come out in favor of a Palestinian state, in contrast to past government agreements. But he said any peace agreement would have to include Palestinian recognition of a Jewish state. A two-state solution is a centerpiece of Mr. Obama's Mideast peace strategy.

Four people who were plotting to sabotage one of the largest hydro-electric dams in Africa have been arrested in Mozambique, police say. The detained were foreigners caught with materials designed to damage the Cahora Bassa dam in north-western Mozambique, according to state media.

As the insurgency of the Taliban and Al Qaeda spreads in Pakistan, senior American officials say they are increasingly concerned about new vulnerabilities for Pakistan’s nuclear arsenal, including the potential for militants to snatch a weapon in transport or to insert sympathizers into laboratories or fuel-production facilities.

The officials emphasized that there was no reason to believe that the arsenal, most of which is south of the capital, Islamabad, faced an imminent threat. President Obama said last week that he remained confident that keeping the country’s nuclear infrastructure secure was the top priority of Pakistan’s armed forces.

Pakistani officials have continued to deflect American requests for more details about the location and security of the country’s nuclear sites, the officials said. Some of the Pakistani reluctance, they said, stemmed from longstanding concern that the United States might be tempted to seize or destroy Pakistan’s arsenal if the insurgency appeared about to engulf areas near Pakistan’s nuclear sites.

Michael Oren, Israel's ambassador to the United States, on Friday warned that an Iranian atomic bomb could "wipe Israel off the map in a matter of seconds," and that the Iranians could "accomplish in a matter of seconds what they denied Hitler did, and kill 6 million Jews, literally."

The newly appointed ambassador warned, "There are clocks ticking all around," with regard to the Iranian nuclear issue. "One of those clocks is the uranium enrichment clock, which will show that by a certain date the Iranians will have sufficient, highly enriched uranium materials to create a bomb that could literally wipe Israel off the map in a matter of seconds."

"It's very important that we watch carefully what happens in Iran - the events in Iran have unmasked to the world the true nature of this regime," said Oren. "This is a regime that's willing to kill its own citizens; it will certainly have no compunctions killing other people in the region, Jews and Sunni Arabs alike."

A United Nations human rights investigator on Thursday called Israel's seizure of a ship carrying relief aid for the Gaza Strip "unlawful" and said its blockade of the territory constituted a "continuing crime against humanity".

Israeli authorities on Tuesday intercepted the vessel, which was also carrying 21 pro-Palestinian activists, and said it would not be permitted to enter Gaza coastal waters because of security risks in the area and its existing naval blockade.

Richard Falk, an American Jew and the United Nations special rapporteur on human rights in the Palestinian territories, said the move was part of Israel's "cruel blockade of the entire Palestinian population of Gaza" in violation of the Fourth Geneva Convention prohibiting any form of collective punishment against "an occupied people". Advertisement Falk, who is an expert on international law, said Israel's two-year blockade of Hamas-ruled Gaza restricted vital supplies such as food, medicine and fuel to "bare subsistence levels".

The other side of Iran's economy belongs to the Islamic foundations, which account for 10% to 20% of the nation's GDP--$115 billion last year. Known as bonyads, the best-known of these outfits were established from seized property and enterprises by order of Ayatollah Khomeini in the first weeks of his regime. Their mission was to redistribute to the impoverished masses the "illegitimate" wealth accumulated before the revolution by "apostates" and "blood-sucking capitalists." And, for a decade or so, the foundations shelled out money to build low-income housing and health clinics. But since Khomeini's death in 1989 they have increasingly forsaken their social welfare functions for straightforward commercial activities.

Until recently they were exempt from taxes, import duties and most government regulation. They had access to subsidized foreign currency and low-interest loans from state-owned banks. And they were not accountable to the Central Bank, the Ministry of Finance or any other government institution. Formally, they are under the jurisdiction of the Supreme Leader; effectively, they operate without any oversight at all, answerable only to Allah.

According to Shiite Muslim tradition, devout businessmen are expected to donate 20% of profits to their local mosques, which use the money to help the poor. By contrast, many bonyads seem like straightforward rackets, extorting money from entrepreneurs. Besides the biggest national outfits, almost every Iranian town has its own bonyad, affiliated with local mullahs. "Many small businessmen complain that as soon as you start to make some money, the leading mullah will come to you and ask for a contribution to his local charity," says an opposition economist, who declines to give his name. "If you refuse, you will be accused of not being a good Muslim. Some witnesses will turn up to testify that they heard you insult the Prophet Mohammad, and you will be thrown in jail." The Cosa Nostra meets fundamentalism.

The specter of Tiananmen still haunts the Beijing leadership after 20 years, and the idea of a replay fueled this time by the Internet and cell phones clearly horrifies the old guard. So last week, with littler fanfare but a pervasive impact, propaganda authorities issued an emergency notice telling Chinese newspapers and Web sites to cut back their coverage of events in Iran. According to the South China Morning Post, based in Hong Kong, major portals like Sina.com dropped the news agencies' video and deleted comments, replacing them with material from the official People's Daily and Xinhua news service.

China has defended the use of new screening software that has to be installed on all computers.Foreign ministry spokesman Qin Gang said the software would filter out pornographic or violent material.

All computers sold in China - even those that are imported - will have to be pre-installed with the "Green Dam Youth Escort" software.

The directive says the newest version of the software has to be pre-installed on Chinese-made computers before they leave the factory. Imported computers must contain the software before they are sold.

Up to 100 members of Iranian reformist groups have been arrested, accused of orchestrating violence after the disputed presidential election result.

Backers of defeated reformist Mir Hossein Mousavi were rounded up overnight, reports said, including the brother of ex-President Khatami.

Mr Mousavi's whereabouts are unknown but he is thought to remain free.

North Korea declared it would turn its plutonium stocks into weapons material and threatened military action against the US and its allies after the UN security council imposed new sanctions to punish Pyongyang for last month's underground nuclear test.

The country's foreign ministry today acknowledged for the first time that North Korea was developing a uranium enrichment programme and said it would be "impossible" to abandon its nuclear ambitions.In a defiant statement, it said that "the whole amount of the newly extracted plutonium [in the country] will be weaponised" and that "more than one-third of the spent fuel rods has been reprocessed to date".The ministry said the country had successfully started a programme to enrich uranium for a light-water reactor.The warning came a few hours after the security council unanimously passed a resolution banning all weapons exports from North Korea and the import of all but small arms.

North Korea described the sanctions as "yet another vile product of the US-led offensive of international pressure aimed at undermining ... disarming DPRK and suffocating its economy".

Tension was growing in the Pacific today as the US navy prepared to intercept a North Korean cargo ship suspected of carrying weapons in defiance of a United Nations ban.

The US navy has been tracking the Kang Nam since it left a North Korean port on Wednesday.

It would be the first ship to be intercepted since the UN last week imposed sanctions on North Korea as punishment for conducting an underground nuclear test last month. The sanctions ban the import and export of nuclear material, missiles and all other weapons other than small arms.

A British diplomat in Russia has resigned after allegedly being filmed having sex with two prostitutes, in a classic sting operation apparently masterminded by the country's security services.

James Hudson quit as deputy consul general in Yekaterinburg after the video – entitled Adventures of Mr Hudson in Russia – mysteriously surfaced on a local website (www.informacia.ru).The film, lasting four minutes and 18 seconds, appears to show Hudson entering a brothel. He lies down on a sofa, opens a bottle of champagne and cavorts with two blonde women in their underwear. The video then shows him having sex with both women. As well as prostitutes, the website accused the 37-year-old diplomat of gambling and taking "light drugs" – hinting it had further damaging material.The high quality of the video suggests that this was the work of professionals, and not amateurs. The security services have a track record of such endeavours.

The swine flu virus first detected in Mexico can no longer be contained and countries should focus on mitigating its effects, a top UN official said. World Health Organization deputy chief Keiji Fukuda was speaking as the WHO raised its alert level to four, or two steps short of a full pandemic.

The number of probable deaths from the virus there has risen to 152. The US, Canada, Spain and Britain have confirmed cases of the virus, but not deaths have been reported outside Mexico.

Alert level four means the virus is showing a sustained ability to pass from human to human and is able to cause community-level outbreaks.

Padilla, however, was arrested at Chicago's O'Hare International Airport on May 8, 2002, more than two months before the issuance of the Justice Department's Aug. 1, 2002, memo authorizing the use of harsh methods in interrogating Abu Zubaida. "The dates just don't add up," wrote Ali Soufan, a former FBI special agent, in an opinion piece in the New York Times last week. Soufan, who questioned Abu Zubaida between his capture in March 2002 and early June of that year, said the detainee gave up Padilla without any physical or psychological duress. He also said Abu Zubaida identified Mohammed as the mastermind of the Sept. 11, 2001, attacks "under traditional interrogation methods."

Padilla, a U.S. citizen, was sentenced in January 2008 to 17 years in prison after being convicted of conspiracy and providing material support for terrorism.

An attack on both coasts was conceived by Mohammed before Sept. 11, 2001, but the plot was scaled back to target only New York and Washington. Mohammed continued to consider striking the U.S. Bank Tower in Los Angeles, administration officials said. His interrogation led to information that he planned "to use East Asian operatives to crash a hijacked airliner into a building in Los Angeles," according the 2005 Justice Department memo.

The international community is better prepared than ever to deal with the threatened spread of a new swine flu virus, a top UN health chief has said

As the UN warned the outbreak might become a pandemic, Dr Keiji Fukuda said years of preparing for bird flu had boosted world stocks of anti-virals. Canada is the latest country to confirm cases after as many as 81 deaths in Mexico and 20 cases in the US. Washington has warned the flu may yet claim American lives.

Eight cases have been confirmed among New York students, seven in California, two in Texas, two in Kansas and one in Ohio. Several countries in Asia and Latin America have begun screening airport passengers for symptoms. There is currently no vaccine for the new strain of flu but severe cases can be treated with antiviral medication.