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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".

Diplomats said the accord and the talks in Geneva tomorrow could pave the way for the Obama administration to press ahead with a common agenda with Russia which would entail talks on nuclear arms control and on Russian co-operation with US policy on Afghanistan and Iran.The new White House team are clearly hoping to bypass the prime minister and former president, Vladimir Putin, and focus its diplomacy on President Dmitry Medvedev.

For any big shifts in the Russian-­American relationship, Moscow would insist on the shelving of the Pentagon's missile shield project in Poland and the Czech Republic and a freeze in the ­prospects for Ukraine and Georgia joining Nato.

The US and Germany tabled a joint proposal for yesterday's Nato meeting, leaving the contentious issue of Ukraine's and Georgia's membership chances open and urging greater co-operation with Russia "as equal partners in areas of common interest". It went on: "These include: Afghanistan, counter-terrorism, counter-piracy, counter-narcotics, non-proliferation, arms control and other issues."

"Russia is a global player. Not talking to them is not an option," said Jaap de Hoop Scheffer, the Nato secretary-general.

In the first big foreign policy speech from the Obama administration, in Munich last month, the vice-president, Joe Biden, said the White House wanted to "press the reset button" in relations with Moscow after years of dangerous drift.

The agreement today was held up for several hours by Lithuania, which strongly opposed the resumption of dialogue with the Kremlin.France and Germany, keen to develop close links with Moscow, threatened in turn to cancel scheduled meetings last night between Nato and Ukraine and Georgia if "the opening with Russia" was not given a green light, diplomats said.

The UN said that of the 70.5 sq km of east Jerusalem and the West Bank annexed by Israel, only 13% was zoned for Palestinian construction and this was mostly already built up. At the same time 35% had been expropriated for Israeli settlements, even though all settlements on occupied land are illegal under international law.

"Throughout its occupation, Israel has significantly restricted Palestinian development in east Jerusalem," the UN report said. It said 673 Palestinian structures had been demolished in the east between 2000 and 2008. Last year alone 90 structures were demolished, leaving 400 Palestinians displaced, the highest number of demolitions for four years. Similar demolitions are carried out regularly by the Israeli military across the West Bank.

"Recent events indicate that the Jerusalem municipality will maintain, and possibly accelerate, its policy on house demolition," the UN report said. "Israel should immediately freeze all pending demolition orders and undertake planning that will address the Palestinian housing crisis in east Jerusalem."

Last week, Barkat, who won election five months ago, rejected international criticism of demolitions and planning policy as "misinformation" and "Palestinian spin. There is no politics. It's just maintaining law and order in the city," he said. "The world is basing its evidence on the wrong facts.The world has to learn and I am sure people will change their minds."

As the row with Britain continued, Iran's guardian council, the country's top legislative body, confirmed Mahmoud Ahmadinejad's victory in the disputed poll after a partial recount, finally dashing hopes of a different outcome.

Iran's foreign ministry had earlier appeared to respond to the warning by saying it did not wish to damage or downgrade relations with the UK, after a telephone conversation yesterday between David Miliband, the foreign secretary, and his Iranian counterpart, Manuchehr Mottaki. Miliband had demanded the immediate release of the embassy staff.But the fear in London is that the foreign ministry is not in control, with regime hardliners from the interior ministry and intelligence service calling the shots as part of a campaign to pin the blame for the unrest on foreign governments.

"America wants a strong, peaceful and prosperous Russia."

Crucially, though, Obama indicated that Washington would not tolerate another Russian invasion of Georgia. Russia is winding up full-scale military exercises next to the Georgian border amid ominous predictions that a second conflict in the Caucasus could erupt this summer.

On Monday Obama reaffirmed Georgia's sovereignty – severely undermined by last year's war and Moscow's subsequent unilateral recognition of rebel-held Abkhazia and South Ossetia as independent states. Today Obama defended "state sovereignty", describing it as "a cornerstone of international order".

He also said that Georgia and Ukraine had a right to choose their own foreign policy and leaders, and could join Nato if they wanted. Russia is deeply opposed to Ukraine's and Georgia's accession, and wants the White House to rule out their future membership. Today Obama responded by saying that Nato sought collaboration with Russia, not confrontation.

The pictures are similar to those from Abu Ghraib that in 2004 created shock around the world, caused a backlash in the Middle East and eventually led to jail sentences for the US military personnel involved.A US official said the pictures were not as bad as Abu Ghraib but "not good" either. The Abu Ghraib pictures showed Iraqi prisoners hooded, naked, posed in sexually embarrassing positions and being harassed by dogs.

Obama has consistently said he does not want to rake over history, fearing that it will deflect attention from his heavy domestic and foreign policy programme. But this week he opened the way for the prosecution of senior figures in the Bush administration and the establishment of a congressional inquiry.Amid the uproar this created, he has since been backing off. Both he and the Democratic leader of the Senate, Harry Reid, have signalled their unwillingness to hold a truth commission, but the Democratic leader in the House, Nancy Pelosi, appears ready to push ahead. With so much clamour for an investigation, it is almost certain that Congress will hold one, with or without the backing of the White House.

The release of the pictures has been sought by the American Civil Liberties Union (ACLU), a human rights organisation whose legal action forced publication of the Bush administration memos under freedom of information.

The pictures will increase pressure for pardons for military personnel who were punished for abuses at Abu Ghraib. Their lawyers are arguing that the Bush administration portrayed it as an isolated incident, whereas in fact it was widespread and approved at the highest levels."This will constitute visual proof that, unlike the Bush administration's claim, the abuse was not confined to Abu Ghraib and was not aberrational," said Amrit Singh, a lawyer for the ACLU.

The Bush administration, in blocking release of the pictures, had argued that they would create outrage but also that they would contravene the Geneva conventions obligation not to show pictures of prisoners.

About a quarter of a million petitions were delivered to the attorney-general, Eric Holder, yesterday calling for prosecution of Bush administration officials responsible for approving waterboarding and other harsh interrogation methods.

Ahmadinejad, who just a week ago had suggested that Iran was ready for a new relationship with the United States, blamed America and its allies for a long list of ills, including the world economic crisis. He suggested that the Western model of economic liberalism was exhausted and that Western leaders, in their efforts to contain the crisis, "are simply thinking about maintaining power and wealth."

Turning to Israel, he started by asking why the five permanent members of the U.N. Security Council have so much power over other nations. Although such powerful countries condemn racism in words, he said, by their deeds they "ridicule and violate all laws and humanitarian values."

"Following World War II," he continued, according to an official English-language text of his remarks, "they resorted to military aggression to make an entire nation homeless, on the pretext of Jewish sufferings and the ambiguous and dubious question" of the Holocaust. "They sent migrants from Europe, the United States and other parts of the world, in order to establish a totally racist government in occupied Palestine," he said, "and in fact, in compensation for the dire consequences of racism in Europe, they helped bring to power the most cruel and repressive racists, in Palestine."

Ahmadinejad said Zionist supporters enjoy undue influence over Western governments, imposing "their domination to the extent that nothing can be done against their will," and he suggested that the only solution is to defeat them. "So long as Zionist domination continues, many countries, governments and nations will never be able to enjoy freedom, independence and security," he said. "As long as they are at the helm of power, justice will never prevail in the world and human dignity will continue to be offended and trampled upon. It is time the ideal of Zionism, which is the paragon of racism, be broken."

British and French diplomats, whose governments had threatened a walkout if they heard anti-Semitic or anti-Israel remarks, left the room. Peter Gooderham, the British ambassador to the United Nations in Geneva, called Ahmadinejad's remarks "outrageous" and "anti-Semitic," according to news reports.

Israel, preparing to mark Holocaust Remembrance Day starting at sundown Monday, derided the U.N. gathering for giving Ahmadinejad a forum. Prime Minister Binyamin Netanyahu called him "a racist and a Holocaust denier who doesn't conceal his intention to wipe Israel off the face of the Earth."

More significantly from a European perspective, the US agreed to significantly strengthen international oversight of financial markets, with particular attention paid to tax havens, hedge funds and ratings agencies.

It was a move that both Merkel and French President Nicolas Sarkozy insisted upon -- and one which will go a long way toward removing whispers of friction between Obama and Merkel.

"In America, there's a failure to appreciate Europe's leading role in the world." He went on to say that "there have been times where America has shown arrogance and been dismissive, even derisive."

"In Europe, there is an anti-Americanism that is at once casual, but can also be insidious. Instead of recognizing the good that America so often does in the world, there have been times where Europeans chose to blame America for much of what's bad…. On both sides of the Atlantic, these attitudes have become all too common. They are not wise."

At the Afghanistan Conference in The Hague earlier this week, Obama was careful not to make any concrete demands for more troops from his European NATO allies. But on Thursday, he seemed willing to tighten the screws slightly. In addition to warning that al-Qaida still posed a threat, he also said, referring to Afghanistan, that "Europe should not simply expect the United States to shoulder the burden alone. This is a joint problem that requires a joint solution."

The response from Sarkozy, who was standing right next to Obama, was swift. "There will be no French military enforcements," the French president said. "We are ready to do more in the field of policing, of gendarmes, in the field of economic aid, to train Afghans."

Other NATO countries on Friday, though, said that they would be willing to send more troops. SPIEGEL ONLINE learned from diplomats attending the NATO summit that British Prime Minister Gordon Brown intends to send several hundred more troops to Afghanistan. Both Belgium and Spain are likewise promising more soldiers, though Spain is reportedly planning to send just 12 additional troops.

His comments echoed the message from Chinese officials. Su Wei, a senior negotiator, told the Guardian last month that the US had made a "substantive change" under the Obama administration."The message we have got is that the current US administration takes climate change seriously, that it recognises its historical responsibility and that it has the capacity to help developing countries address climate change," Su said.

"China used to think the developed world is not serious. That's what they were saying [at UN talks] in December," he said. "But now they know the US is on the pitch and ready to engage with them. It has made a real difference to what China is saying."

Miliband said he was encouraged by the change in tone since late last year in the country that emits more greenhouse gases than any other. "I think they're up for a deal. I get the strong impression that they want an agreement," he told the Guardian."They see the impact of climate change on China and they know the world is moving towards a low-carbon economy and see the business opportunities that will come with that."

China wants developed nations to commit to more ambitious reduction targets, to share low-carbon technology and to set up a UN fund that would buy related intellectual property rights for use across the world. Beijing's position is complicated by the fact that it already owns a large share of the patents for wind and solar energy in developed nations.

Europe and the US accept the Chinese economy should be allowed to grow further, improving the living standards of its millions of poor, before it makes overall emissions reductions. Instead, the western nations are pushing for strong measures to improve efficiency and establish caps for certain industries. One possibility being considered by Chinese officials is to set a carbon intensity goal up to 2040 that would include energy efficiency, renewable energy, transport and afforestation.

Last month, the Tyndale centre published research showing that it was possible for China to begin reducing its total emissions from 2020.Government officials say that is unrealistic and China has so far resisted announcing a target for when emissions might peak. But the authorities tend towards the later end of the various academic forecasts of between 2020 and 2040.

"We still live in a world where if you have nuclear weapons, you are buying power, you are buying insurance against attack. That is not lost on those who do not have nuclear weapons, particularly in [conflict] regions."

He predicted that the next wave of proliferation would involve "virtual nuclear weapons states", who can produce plutonium or highly enriched uranium and possess the knowhow to make warheads, but who stop just short of assembling a weapon. They would therefore remain technically compliant with the NPT while being within a couple of months of deploying and using a nuclear weapon.

"This is the phenomenon we see now and what people worry about in Iran. And this phenomenon goes much beyond Iran. Pretty soon … you will have nine weapons states and probably another 10 or 20 virtual weapons states." ElBaradei pointed to the spread of uranium enrichment technology around the world, but he was most concerned about the Middle East.

ElBaradei described the acquisition of nuclear weapons by a terrorist group as the greatest threat facing the world, and pointed to the rise of the Taliban in Pakistan: "We are worried because there is a war in a country with nuclear weapons. We are worried because we still have 200 cases of illicit trafficking of nuclear material a year reported to us."

He argued that the only way back from the nuclear abyss was for the established nuclear powers to fulfil their NPT obligations and disarm as rapidly as possible. He said it was essential to generate momentum in that direction before the NPT comes up for review next April in New York. "There's a lot of work to be done but there are a lot of things we can do right away," ElBaradei said. "Slash the 27,000 warheads we have, 95% of which are in Russia and the US. You can easily slash [the arsenals] to 1,000 each, or even 500."

Only deep strategic cuts, coupled with internationally agreed bans on nuclear tests and on the production of weapons-grade fissile material, could restore the world's faith in arms control, he argued."If some of this concrete action is taken before the NPT [conference], you would have a completely different environment. All these so-called virtual weapons states, or virtual wannabe weapons states, will think twice … because then the major powers will have the moral authority to go after them and say: 'We are doing our part of the bargain. Now it is up to you.' "

Senior Czech officials organising yesterday's summit openly acknowledged that the eastern partnership was aimed at countering Russia's influence in its backyard."Foreign policy is always about the projection of interests," said Alexandr Vondra, the outgoing Czech deputy prime minister. "You can project your interests, but you must give the respective countries the freedom to make choices."

The policy launched yesterday breaks new ground by seeking to entice the authoritarian regime of Alexander Lukashenko in Belarus. The instability in Georgia, the recent unrest in Moldova, and the permanent feuding among Ukraine's political elites all point to the formidable challenges for a policy that the European Commission describes as "a strategic imperative".

The new policy treats the six countries as a regional bloc, aiming to establish free trade areas between them and the EU, to tap their energy resources, and to promote human rights and democracy-building projects. But while the initiative is aimed at bringing the six countries in, it is also intended to keep them out. The declaration adopted yesterday was changed to call the six countries "east Europeans" rather than "Europeans" lest the latter description encourage applications to join the EU, as pushed by Ukraine and Georgia and opposed by western Europe.Eastern clamour for visa liberalisation to make it easier to travel to the EU was also blocked, with the issue parked for the long-term.

Obama today said that indefinite detention at Guantánamo Bay and the prison's harsh interrogation methods had undermined the rule of law, alienated America from the rest of the world, served as a rallying cry and recruiting symbol for terrorists, risked the lives of American troops by making it less likely enemy combatants would surrender, and increased the likelihood American prisoners of war would be mistreated. The camp's existence discouraged US allies from cooperating in the fight against international terrorism, he said."There is also no question that Guantánamo set back the moral authority that is America's strongest currency in the world," he said. "Instead of building a durable framework for the struggle against al-Qaida that drew upon our deeply held values and traditions, our government was defending positions that undermined the rule of law."

Meanwhile only three people had been tried by the Bush military commissions in seven years, but Bush had released 525 detainees from the prison.

He noted that an estimated 14% of suspects freed from Guantánamo returned to the battlefield, but blamed that on the Bush administration's slipshod process of selecting which to let loose.

Obama said his administration would try in US courts those who had violated US criminal laws; try in military commissions those who violated the laws of war; free those ordered released by US courts; and transfer at least 50 people to foreign countries for detention and rehabilitation.

He acknowledged that a number of Guantánamo prisoners could not be prosecuted yet posed a clear threat to the US: those who had trained at al-Qaida camps, commanded Taliban troops, pledged loyalty to Osama bin Laden and sworn to kill Americans."These are people who, in effect, remain at war with the United States," he said.

Obama defended his decision to release justice department memos detailing the Bush administration's legal rationale for waterboarding, sleep deprivation and other harsh interrogation techniques. He said those techniques had already been publicised and he had already banned them."In short, I released these memos because there was no overriding reason to protect them," he said. "And the ensuing debate has helped the American people better understand how these interrogation methods came to be authorised and used."He defended his decision not to release photographs of US-held prisoners similar to those taken at the Abu Ghraib prison in Iraq. He said he feared they would inflame world opinion against the US and endanger US troops.

"We are now formulating a plan for development of renewable energy. We can be sure we will exceed the 15% target. We will at least reach 18%. Personally I think we could reach the target of having renewables provide 20% of total energy consumption."

That matches the European goal, and would represent a direct challenge to Europe's claims to world leadership in the field, despite China's relative poverty. Some experts have cast doubt on whether Britain will be able to reach 20%. On another front, China has the ambitious plan of installing 100m energy-efficient lightbulbs this year alone.

Beijing seeks to achieve these goals by directing a significant share of China's $590bn economic stimulus package to low-carbon investment. Of that total, more than $30bn will be spent directly on environmental projects and the reduction of greenhouse gas emissions.But the indirect green share in the stimulus, in the form of investment in carbon-efficient transport and electricity transmission systems, would be far larger.HSBC Global Research estimated the total green share could be over a third of the total package.

He said the government would also plough money into the expansion of solar heating systems. He said the country was already a world leader, with 130m square metres of solar heating arrays already installed, and was planning to invest more. The US goal for solar heating by 2020 is 200m square metres.

David Sandalow, the US assistant secretary of energy, said the continuation of business as usual in China would result in a 2.7C rise in temperatures even if every other country slashed greenhouse gas emissions by 80%."China can and will need to do much more if the world is going to have any hope of containing climate change," said Sandalow, who is in Beijing as part of a senior negotiating team aiming to find common ground ahead of the crucial Copenhagen summit at the end of this year."No effective deal will be possible without the US and China, which together account for almost half of the planet's carbon emissions."

This morning the Iranian ambassador to London, Rasoul Movahedian Attar, was summoned by the permanent under-secretary at the Foreign Office, Sir Peter Ricketts, and informed of Britain's response. The Iranian diplomats, who have also not been identified, have been given a week to leave the country.

Obama left open to the Iranian goverment his offer to engage in direct negotiations on the nuclear issue and Iran's support of Hizbullah and other groups in the Middle East.

In Washington Obama said people around the world had witnessed the "timeless dignity of tens of thousands of Iranians marching in silence".Addressing a White House press conference, he said: "In 2009 no iron fist is strong enough to shut off the world from bearing witness to the peaceful pursuit of justice. Despite the Iranian government's efforts to expel journalists and isolate itself, powerful images and poignant words have made their way to us through cell phones and computers, and so we have watched what the Iranian people are doing."Above all, we have seen courageous women stand up to brutality and threats, and we have experienced the searing image of a woman bleeding to death on the streets. While this loss is raw and painful, we also know this: those who stand up for justice are always on the right side of history."

The Foreign Office said: "The government of Iran is seeking to blame the UK and other outsiders for what is an Iranian reaction to an Iranian issue. This has a potential impact on our staff's safety and is unacceptable."

Iranian media reported today that Mahmoud Ahmadinejad would be sworn in again as president by mid-August. IRNA, the official Iranian news agency, said Ahmadinejad, who won a "closely contested and disputed 10th presidential election", would be sworn in before parliament between 26 July and 19 August.

Binyamin Netanyahu, Israel's prime minister, has been pencilled in for a visit to the White House in the middle of next month. Netanyahu, since becoming prime minister, has refused to acknowledge the right of the Palestinians to a state of their own, as his predecessor had. But Obama yesterday stated firmly his commitment to the creation of an independent Palestinian state alongside Israel.

Mahmoud Abbas, the Palestinian president, is to make a separate visit, as is the Egyptian president, Hosni Mubarak. Egypt has been acting as a go-between between Abbas, who controls the West Bank, and Hamas, which controls Gaza.

Obama appears to have come round to the view of advisers that the US will ­effectively have to impose much of any deal on Israel and the Palestinians rather than wait for one to emerge from the two sides. He said yesterday: "I agree that we can't talk forever, that at some point steps have to be taken so that people can see progress on the ground. And that will be something that we will expect to take place in the coming months."My hope would be that over the next several months, that you start seeing ­gestures of good faith on all sides. I don't want to get into the details of what those gestures might be, but I think that the ­parties in the region probably have a pretty good recognition of what intermediate steps could be taken as confidence-building measures."