Iceland's socialist government was surveying the damage Sunday after a referendum rejected a deal to pay Britain and the Netherlands billions for losses in the collapse of the Icesave bank.    As expected, Icelanders overwhelmingly voted down the deal in Saturday's referendum, with some 93.6 percent of voters lined up on the "no" side after more than 50 percent of the votes had been counted.    Only 1.5 percent of voters had so far voted "yes" to the Icesave deal, said RUV public broadcaster which compiles all electoral statistics.

Icelanders were asked to vote on whether the country should honour an agreement to repay Britain and the Netherlands 3.9 billion euros (5.3 billion dollars) by 2024.    This would be to compensate them for money they paid to 340,000 of their citizens hit by the collapse of Icesave in 2008.    Some observers had warned that a "no" vote might result in the International Monetary Fund blocking the remaining half of a 2.1-billion dollar rescue package.    It could also hit European Union and euro currency membership talks, Iceland's credit rating and destabilise the leftwing government, which negotiated the agreement in the first place, they argued.

Grimsson said that while Icelanders were not against compensating Britain and the Netherlands, many considered that the repayment conditions, and especially the high 5.5-percent interest rate agreed upon, were exorbitant.    "The people of Iceland, farmers, fishermen, teachers, nurses, are by and large willing to repay to Britain and the Netherlands what is equal to over 20,000 euros per depositor," Grimsson said.    "But they are not ready to pay a very high interest rate so that the British and Dutch governments would make a huge profit off this whole exercise."

France urged international financial bodies to fund a new era of global nuclear power on Monday and pitched its own reactor technology as the model to follow.     Welcoming delegates from 60 energy-hungry nations to a conference in Paris, President Nicolas Sarkozy said civil nuclear power had been unfairly passed over for World Bank development loans.    

He called on world and regional financial bodies to finance new nuclear projects in developing countries, and announced that France would set up an international institute to promote atomic technology.     "I can't understand why nuclear power is ostracised by international finance, it's the stuff of scandal," he said, urging the World Bank, the European Bank for Reconstruction and Development and others to do more.

"I have decided to change up a gear by creating an International Institute of Nuclear Energy that will include an international nuclear school," he said.     He said the French school would become the heart of an international network of institutes, beginning with a centre in Jordan.     "Other centres of nuclear training will be developed with French support, such as the Franco-Chinese nuclear energy institute, in cooperation with the University of Guangzhou," he said.     France has the world's second largest nuclear sector and generates a greater proportion its own electricity through nuclear power than any other economy -- around 75 percent of its needs.     It has also made the export of nuclear technology an economic priority.

At the start of the foreign secretary's evidence to the Chilcot panel, Sir Roderic Lyne, a member of the inquiry panel, said it had heard "three rather different explanations as to why we took military action against Iraq in 2003".Tony Blair emphasised the need to impose regime change on Iraq, Lyne said. But Jack Straw, the foreign secretary at the time of the war, stressed the importance of dealing with Iraq's presumed weapons of mass destruction, Lyne said.And Gordon Brown, when he gave evidence on Friday last week, said he supported the war because he thought the will of the international community had to be enforced.

In his evidence Blair said the inquiry should consider what would have happened if the Iraq war had not taken place. He said that an Iraq still led by Saddam Hussein, competing with Iran to acquire WMD and support terrorism, could be an even greater threat today than Iraq was in 2003.

Miliband went on: "The authority of the UN would have been severely dented. If, in the hypothetical case you are putting, we had marched to the top of the hill of pressure and marched down again without disarming Saddam Hussein, that would really have been quite damaging [to the ability of the UN to work together].

Israel has authorised the building of 112 new apartments in a Jewish settlement in the West Bank.

On Sunday, Palestinian Authority leaders in the West Bank agreed to indirect talks with Israel. Israel had promised a 10-month pause in settlement building in the West Bank, not including East Jerusalem.

The planned apartments are in the settlement of Beitar Illit, which has a mostly Orthodox Jewish population.

Turkey has threatened to downgrade its strategic relationship with the US amid nationalist anger over a vote in the US Congress that defined the mass killings of Armenians during the first world war as genocide.

eports of potential support for Greece are proving unpopular in Germany. Its economy minister said earlier that his government "does not intend to give a cent" to Greece in financial aid.

Many Germans do not support their taxes being used for bailouts.

There are also fears that rescuing one country could encourage others to expect the same. Meanwhile, Germany passed its budget for 2010, with borrowing set to soar this year. New borrowing is expected to reach 80.2bn euros ($109bn; £72.5bn) - double the previous highest debt record, set in 1996. However this is less than the 85.8bn euros initially proposed by the government.

Ukraine's new President, Viktor Yanukovych, says his visit to Moscow will mark the first step in a major improvement in relations with Russia.Mr Yanukovych has arrived in Moscow ahead of talks with Russian President Dmitry Medvedev and PM Vladimir Putin.

He says he wants good relations with Russia and the West, and has already visited EU headquarters in Brussels.

Gas supplies may be a source of friction in the talks. Officials say the Ukrainian leader is expected to lobby for lower gas prices, as well as seek billions in loans from Russia to help cover the country's soaring budget deficit.

Turkey has reacted angrily to a US congressional panel's resolution describing as genocide the killings of Armenians in World War I.PM Recep Tayyip Erdogan said his country had been accused of a crime it did not commit, adding the resolution would harm Turkish-US relations. Ankara has recalled its ambassador to Washington for consultations and says it is considering other responses.

The BBC's Jane O'Brien in Washington says Turkey must be hoping that, as with a similar resolution two years ago, the issue will not come to the floor of the House for a full vote. In 2007, it passed the committee stage, but was shelved after pressure from the George W Bush administration.

Turkish President Abdullah Gul responded angrily to the committee's vote, saying it was "an injustice to history" to take such a decision with "political concerns in mind". "Turkey will not be responsible for the negative results that this event may lead to," he said.

Prime Minister Gordon Brown has said the 2003 war was "right", as he gives evidence to the UK's Iraq inquiry.

Setting out his thinking on the rationale for war for the first time in public, Mr Brown said terrorists and "rogue states" were the "two risks to the post-Cold War world" and had to be tackled.

If the international community could not act together over Iraq, Mr Brown said he feared the "new world order we were trying to create would be put at risk".

According to a poll published on Thursday, 84% of Germans think that the EU should not help Greece out of its debt crisis.

China has said its military spending will increase by 7.5% in 2010, ending a long run of double-digit growth.It will spend 532.1bn yuan ($77.9bn:£51.7bn) over the year, the spokesman of the country's annual parliamentary session announced.

According to Chinese figures, this is the first time in more than 20 years that the military budget increase has dipped below 10%.

The spending spree began in the late 1980s, when China embarked on an ambitious programme to upgrade its armed forces. Since then it has bought and produced its own high-tech weapons, and reduced the number of personnel in an attempt to have fewer, but better trained, troops. Salaries and other benefits for officers and ordinary soldiers have also been improved.

Brazil will not bow to pressure from the US to support further sanctions against Iran over its nuclear work, the country's foreign minister has said.Celso Amorim told US Secretary of State Hillary Clinton that Brazil wanted to see further negotiations on the issue before it would support sanctions.

"I think it's only after we pass sanctions in the Security Council that Iran will negotiate in good faith," Mrs Clinton said.

Even before talks with Mrs Clinton began, Brazilian President Luiz Inacio Lula da Silva repeated his stance that isolating Iran's leaders is counter-productive. "It is not prudent to push Iran against a wall. The prudent thing is to establish negotiations," he said. "I want for Iran the same thing as I wish for Brazil: To use the development of nuclear energy for peaceful purposes. If Iran is in agreement with that, Iran will have Brazil's support."