Four Palestinian militants have been killed on Gaza's border as Israeli forces fired at what they said were men and horses carrying explosives.

Israel said the Palestinians opened fire and tried to plant bombs near a crossing on the Gaza-Israel border.

It is one of the worst clashes since Israel's three-week operation in Gaza in December and January.

SPIEGEL: Is Pakistan now paying for its earlier failures? Why didn't you eliminate the Taliban leadership when they came to Pakistan at the end of 2001 -- above all the so-called Quetta Shura, the Taliban's highest decision-making council, in the Pakistani city Quetta? Musharraf: The Quetta Shura never existed. Do you really think there is an assembly in a kind of a house where they come and discuss things in something like a regular consultation? Mullah Omar never was in Pakistan and he would be mad if he appeared there. He is much safer in Afghanistan.

SPIEGEL: Over the last eight years, Pakistan has received about $10 billion in military aid from the US. Apparently you didn't spend all that money on the war on terror -- some went to secure your eastern border with India. Is that true? Musharraf: Half of it, $5 billion, was reimbursed to us for services we had already rendered to the US. You have to understand how the Pakistan army operates: The divisions keep moving. If we buy new tanks for $250 million, then they will be deployed in Peshawar as part of the war on terror, but they will also go to the eastern border. But why do you care about that? Why, for heaven's sake, should I tell you how we spent the money? SPIEGEL: The American government would surely be interested in knowing. Musharraf: I also told the Americans that it has nothing to do with them. We are not obligated to give out any details. Maybe I should have said at the time: Ok, you want us to support you, give us $20 billion a year and don't ask what we are doing with it.

Musharraf: I do agree, they do not accept this war as their war. This has something to do with history. Please understand the reason, and you should blame the US for it. From 1979 to 1989, we fought a war with the US in Afghanistan against the Soviet Union. And we won mainly because of ISI. Otherwise, the Soviet Union could not have been defeated in Afghanistan. But then the US left us all alone with 30,000 mujahedeen brought by them. Even Osama bin Laden was brought by the US, who else? They all came to fight the Soviet Union. So, did anybody in Washington develop a strategy for what to do with these people after 1989? No, nobody helped Pakistan for the next 12 years until 2001. We were left high and dry, with 30,000 mujahedeen holed up, no rehabilitation, no resettlement for them. No assistance was given to Pakistan -- instead sanctions were imposed against us. Fourty F-16s, for which we had paid money, were denied to us. Four million Afghan refugees had also come to Pakistan. The mujahedeed coalesced into al-Qaida and our social fabric was being completely destroyed. This is why the people of Pakistan felt used by the Americans, and this is why Pakistanis dislike the US and this war.

PIEGEL: Pakistan is in a major state of crisis. Close to 2.5 million people have fled the areas of fighting in the northwest and the Swat Valley. There are attacks almost daily. Is Pakistan on the verge of collapse? Musharraf: This is wrong. Nothing can happen to Pakistan as long as the armed forces are intact and strong. Anyone who wants to weaken and destabilize Pakistan just has to weaken the army and our intelligence service, ISI, and this is what is happening these days. Lots of articles have been written claiming that Pakistan will be divided, that it will fall apart or become Balkanized. I personally feel there is some kind of conspiracy going on with the goal of weakening our nation.

Musharraf: I won't tell you exactly because then you will ask me for evidence. I can only tell you that India, for example, has 16 insurgencies going on and nobody is making a big thing out of it. But the West always focuses on Pakistan as the problem.

Musharraf: I am totally against the term AfPak. I do not support the word itself for two reasons: First, the strategy puts Pakistan on the same level as Afghanistan. We are not. Afghanistan has no government and the country is completely destabilized. Pakistan is not. Second, and this is much more important, is that there is an Indian element in the whole game. We have the Kashmir struggle, without which extremist elements like Lashkar-e-Taiba would not exist.

Supporters and opponents of Iranian President Mahmoud Ahmadinejad clashed in a Tehran square on Saturday evening and some cars were set on fire, a witness said, in a sign of rising tension ahead of the June 12 election.

Ahmadinejad hit back at critics accusing him of stoking inflation with profligate spending of petrodollars since he came to office in 2005, saying the rate was declining and would soon fall below 10 percent, compared with 18 percent in March.   The rate, which peaked at nearly 30 percent in October, was about 11 percent when Ahmadinejad came to power four years ago pledging to share out Iran's oil wealth more fairly and reviving the values of its 1979 Islamic revolution.

A North Korean court sentenced two U.S. journalists to 12 years in a labor camp Monday, as the government of Kim Jong Il continued to ratchet up tension with the United States and its neighbors.

Laura Ling and Euna Lee, television reporters detained in March along North Korea's border with China, received harsher sentences than many outsiders had expected. But several experts in South Korea predicted that talks will begin soon to negotiate their release.

Ukrainian PM Yulia Tymoshenko has announced that she will stand in presidential elections in 2010.

The prime minister was one of the leaders of the 2004 Orange Revolution, but her alliance with current President Viktor Yushchenko has become a rivalry. Scandals have left Ukraine without foreign, defence and finance ministers.

Defence Minister Yuri Yekhanurov, seen as an ally of Mr Yushchenko, was sacked by MPs on Friday in a motion put forward by Ms Tymoshenko's allies.

Jubilant supporters of Lebanon's US-backed ruling coalition took to the streets last night, claiming a decisive election victory. It marks a dramatic reversal of fortunes after polls showed it losing its slim majority to a Hezbollah-led coalition backed by Syria and Iran.

Isolated voting booths, indelible ink and a voter education campaign launched by the interior ministry made the elections a significant improvement on 2005, with turnout averaging more than 50%.

The vote pitted a moderate Sunni-led government, supported by the west, Saudi Arabia and Egypt, against an opposition led by Hezbollah, the Middle East's most powerful militant group, which fought Israel in the devastating 2006 war and is financed by Iran's Shia government.

Europe's mainstream centre-left parties suffered humiliation last night when four days of voting in the EU's biggest-ever election concluded with disastrous results for social democrats.

With the social democrats licking their wounds and the centre-right scoring ­victories whether in power or in opposition, the other signal trend of the ballot was the breakthroughs achieved by extreme right-wing nationalists and xenophobes.

In the EU's biggest country, Germany, returning 99 of the parliament's 736 seats, the Social Democrats (SPD), the junior partner in Chancellor Angela Merkel's grand coalition, sunk to an all-time low, with 21% of the vote.

The Zionist Organization of America issued a statement on Friday calling the Cairo speech “strongly biased” against Israel. A statement by the organization’s president, Morton A. Klein, said Mr. Obama’s remarks “may well signal the beginning of a renunciation of America’s strategic alliance with Israel.”

Some of the concerns that supporters of Israel voiced about Mr. Obama before he took office began to dissipate as he assembled a staff that includes a White House chief of staff, Rahm Emanuel, who was a civilian volunteer in the Israeli armed forces, and a secretary of state, Hillary Rodham Clinton, who established strong pro-Israel credentials during her years as a senator from New York.

Mrs. Clinton said last week that a freeze meant no “natural growth exceptions,” and some Israeli officials have contended that the Obama administration is, in effect, telling Israeli settlers that they cannot have babies. Most Middle East experts say the term “natural growth” applies to actual construction of additional units within the settlements’ existing boundaries. “We can’t tell people that they can’t have a child,” Mr. Ackerman said.

Financially grounded by the recession, the Pentagon and governments around the world are launching blimps to spy on their enemies, the Economist reports. Such balloons cost far less than Predator and Global Hawk drones—which can sell for $35 million each—and stay airborne for more than a week, while drones last about 30 hours. Blimps are also hard to shoot down, even when they are hit.

Blimps also suit Secretary of Defense Robert Gates, who said he wants "75% solutions" enacted in weeks or months, not "exquisite systems” that take years.

US President Barack Obama's choice for a top intelligence job has withdrawn after questions about his experience of CIA interrogation techniques.Phillip Mudd worked for the CIA under former President George W Bush.

Earlier this year President Obama nominated him to be Under Secretary of Intelligence at the Department of Homeland Security.

What are Arabs prepared to do now that Obama has come out so firmly against Israeli settlements?The speech is one stage, but it has yet to be translated into actions. Arab countries have learned through 60 years of experience with Israel that it's not the agreement you reach with them; it's the implementation.

At least 30 people have died in the Peruvian Amazon during clashes between police and indigenous groups protesting against oil and gas exploration on ancestral lands.

Violence erupted when police attempted to clear a road blocked by thousands of indigenous Peruvians protesting against a law they say makes it easier for foreign firms to exploit their lands.

Protest leaders said police opened fire from helicopters with bullets andtear gas, while police said protesters attacked officers with firearms.

A retired US state department official with top security clearance, and his ­elderly wife, have been arrested and charged with spying for Cuba for 30 years.Walter and Gwendolyn Myers were so well regarded by Havana that several years ago they were rewarded with a secret meeting with Fidel Castro in Mexico.

Lebanon will go the polls on Sunday in national elections that are widely expected to shift the fragile state's balance of power from the pro-western governing coalition to Hezbollah and its allies.

Such a scenario would unseat Siniora and further diminish the influence of the pro-western coalition made up of Sunnis, the remainder of the country's Christians and a Druze party, headed by Walid Jumblatt. But as a concession to the government's supporters, the opposition has privately offered the role of prime minister to the head of the Sunni bloc, Saad Hariri, whose father's assassination in 2005 triggered four years of instability.

The Iranian-backed opposition bloc comprising Hezbollah, the secular Shia party Amal and Christian supporters of General Michel Aoun's Free Patriotic Movement, is tipped to win a comfortable majority in the 128-seat parliament.

"The nations of this part of the world ... deeply hate America because during many years they have seen violence, military interference, rights violations, discrimination ... from America," Khamenei said in a televised speech. "Even if they give sweet and beautiful talks to the Muslim nation ... that will not create a change," said Khamenei, Iran's most powerful figure with the final say on all matters of state. "Nothing will change with speeches and slogans."

He also called Israel, which Iran does not recognise, a "cancerous tumour in the heart" of the Muslim world.

"If you (Muslims) see that the Western world is talking more softly to you it is the result of public awareness and resistance in the Islamic world," Khamenei said.

North Korea Friday agreed to hold talks with South Korea next week, Seoul officials said, amid high tensions between the two nations.    The North has accepted a proposal for working-level talks on June 11 at the Kaesong joint industrial complex just north of the border, according to South Korea's unification ministry.    South Korean and US troops have gone on heightened alert since the North staged a nuclear test in late May, renounced the armistice that ended the Korean war in the 1950s and threatened the South with possible attack.

President Obama’s speeches may be “beautiful,” but it’s not enough to win over the Muslim world, Iran’s supreme leader said in his own speech today, Reuters reports. “The nations of this part of the world...deeply hate America because during many years they have seen violence, military interference, rights violations, discrimination" from it, said Ayatollah Ali Khamenei. “Nothing will change with speeches and slogans,” Khamenei said. Instead, he called for a change in US behavior, the BBC notes. “The terrorists kill one, two or 10 people, but you kill 100 or 150 people,” he said, complaining that the US is occupying Iraq and Afghanistan under false pretexts. He also called Israel “a cancerous tumor in the heart of the Muslim world” and said Iran “does not want nuclear weapons.”