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The United States has signed agreements with the Cayman Islands and Costa Rica to help those countries' banks comply with an anti-tax evasion law starting next year, the Treasury Department said on Friday. The deals are part of the US effort to enforce the Foreign Account Tax Compliance Act (FATCA), which was enacted in 2010 and is set to take effect in July 2014. FATCA requires foreign financial institutions to tell the US Internal Revenue Service about Americans' offshore accounts worth more than $50,000. It was enacted after a Swiss banking scandal showed that 17,000 US taxpayers had hidden substantial fortunes overseas. On Thursday a former UBS banker, Raoul Weil, agreed to be extradited to the US to face charges arising from that scandal.With these two deals, both signed this week, the Treasury has now finished 12 FATCA "intergovernmental agreements" (IGAs), which help countries' financial institutions comply with the law.

David Cameron has indicated the government may try and use "tougher measures" against The Guardian to prevent it from publishing further revelations about the activities of British intelligence agencies. Speaking in the House of Commons on Monday afternoon, the prime minister said while the government had not yet been "heavy handed" in how it responded to the dissemination of leaks from NSA whistle-blower Edward Snowden - it could crack down if it continued.

New European rules aimed at curbing questionable transfers of data from EU countries to the US are being finalised in Brussels in the first concrete reaction to the Edward Snowden disclosures on US and British mass surveillance of digital communications.Regulations on European data protection standards are expected to pass the European parliament committee stage on Monday after the various political groupings agreed on a new compromise draft following two years of gridlock on the issue.The draft would make it harder for the big US internet servers and social media providers to transfer European data to third countries, subject them to EU law rather than secret American court orders, and authorise swingeing fines possibly running into the billions for the first time for not complying with the new rules.

"As parliamentarians, as politicians, as governments we have lost control over our intelligence services. We have to get it back again," said Jan Philipp Albrecht, the German Greens MEP who is steering the data protection regulation through the parliament.Data privacy in the EU is currently under the authority of national governments with standards varying enormously across the 28 countries, complicating efforts to arrive at satisfactory data transfer agreements with the US. The current rules are easily sidestepped by the big Silicon Valley companies, Brussels argues.The new rules, if agreed, would ban the transfer of data unless based on EU law or under a new transatlantic pact with the Americans complying with EU law."Without any concrete agreement there would be no data processing by telecommunications and internet companies allowed," says a summary of the proposed new regime.

Such bans were foreseen in initial wording two years ago but were dropped under the pressure of intense lobbying from Washington. The proposed ban has been revived directly as a result of the uproar over operations by the US's National Security Agency (NSA).Viviane Reding, the EU's commissioner for justice and the leading advocate in Brussels of a new system securing individuals' rights to privacy and data protection, argues that the new rulebook will rebalance the power relationship between the US and Europe on the issue, supplying leverage to force the American authorities and tech firms to reform."The recent data scandals prove that sensitivity has been growing on the US side of how important data protection really is for Europeans," she told a German foreign policy journal. "All those US companies that do dominate the tech market and the internet want to have access to our goldmine, the internal market with over 500 million potential customers. If they want to access it, they will have to apply our rules. The leverage that we will have in the near future is thus the EU's data protection regulation. It will make crystal clear that non-European companies, when offering goods and services to European consumers, will have to apply the EU data protection law in full. There will be no legal loopholes any more."But the proposed rules remain riddled with loopholes for intelligence services to exploit, MEPs admit.

A group of former British ambassadors have joined a campaign calling for Tony Blair to be removed from his role as Middle East envoy after his recent attempt to "absolve himself" of responsibility for the crisis in Iraq.The letter, organised by the makers of George Galloway's film The Killing of Tony Blair, says the 2003 invasion of Iraq was to blame for the rise of "fundamentalist terrorism in a land where none existed previously".The signatories, led by Blair's former ambassador to Iran Sir Richard Dalton, describe the former prime minister's achievements as Middle East envoy as "negligible".

The letter says: "We, like many, are appalled by Iraq's descent into a sectarian conflict that threatens its very existence as a nation, as well as the security of its neighbours. We are also dismayed, however, at Tony Blair's recent attempts to absolve himself of any responsibility for the current crisis by isolating it from the legacy of the Iraq war."In reality, the invasion and occupation of Iraq had been a disaster long before the recent gains made by the Islamic State of Iraq and the Levant (Isis). The sectarian conflict responsible for much of the war's reprehensible human cost was caused in part by the occupying forces' division of the country's political system along sectarian lines."It added: "In order to justify the invasion, Tony Blair misled the British people by claiming that Saddam had links to al-Qaida. In the wake of recent events it is a cruel irony for the people of Iraq that perhaps the invasion's most enduring legacy has been the rise of fundamentalist terrorism in a land where none existed previously. We believe that Mr Blair, as a vociferous advocate of the invasion, must accept a degree of responsibility for its consequences."

The signatories say that Blair has failed to achieve any breakthrough as the quartet's representative, though they acknowledge his limited mandate that involves building the governance of the Palestinian Authority.The letter says: "It is our view that, after seven years, Mr Blair's achievements as Envoy are negligible, even within his narrow mandate of promoting Palestinian economic development. Furthermore, the impression of activity created by his high-profile appointment has hindered genuine progress towards a lasting peace."Seven years on there are still over 500 checkpoints and roadblocks in the West Bank. The Gaza Strip, severely damaged by Israel's 2009 bombing, remains in a humanitarian crisis, with 80% of its population reliant on foreign aid for survival. Israel continues to build settlements that are illegal under international law. According to the Palestinian Authority's former Chief Negotiator, Nabil Shaath, Tony Blair has "achieved so very little because of his gross efforts to please the Israelis".

Tony Blair has strongly rejected claims that the 2003 US-UK invasion of Iraq was to blame for the current crisis gripping the country, pointing the finger instead firmly at the Maliki government and the war in Syria.In a passionate essay published on his Faith Foundation website, the former prime minister said it was a "bizarre" reading of the situation to argue that the US-British invasion of Iraq had allowed the growth of Sunni jihadist groups such as the Islamic State in Iraq and the Levant (Isis), whose fighters have swept through towns and cities north and west of Baghdad over the past week."We have to liberate ourselves from the notion that 'we' have caused this. We haven't. We can argue as to whether our policies at points have helped or not: and whether action or inaction is the best policy. But the fundamental cause of the crisis lies within the region not outside it.

For two weeks in May, it looked as though privacy advocates had scored a tenuous victory against the widespread surveillance practices exposed by Edward Snowden a year ago. Then came a resurgent intelligence community, armed with pens, and dry, legislative language.During several protracted sessions in secure rooms in the Capitol, intelligence veterans, often backed by the congressional leadership, sparred with House aides to abridge privacy and transparency provisions contained in the first bill rolling back National Security Agency spying powers in more than three decades. The revisions took place in secret after two congressional committees had passed the bill. The NSA and its allies took creative advantage of a twilight legislative period permitting technical or cosmetic language changes.The episode shows the lengths to which the architects and advocates of bulk surveillance have gone to preserve their authorities in the time since the Guardian, 12 months ago today, began disclosing the scope of NSA data collection. That resistance to change, aided by the power and trust enjoyed by the NSA on Capitol Hill, helps explain why most NSA powers remain intact a year after the largest leak in the agency's histo

But exactly one year on, the NSA’s greatest wound so far has been its PR difficulties. The agency, under public pressure, has divested itself of exactly one activity, the bulk collection of US phone data. Yet while the NSA will not itself continue to gather the data directly, the major post-Snowden legislative fix grants the agency wide berth in accessing and searching large volumes of phone records, and even wider latitude in collecting other kinds of data.There are no other mandated reforms.

Some NSA critics look to the courts for a fuller tally of their victories in the wake of the Snowden disclosures. Judges have begun to permit defendants to see evidence gathered against them that had its origins in NSA email or call intercepts, which could disrupt prosecutions or invalidate convictions. At least one such defendant, in Colorado, is seeking the exclusion of such evidence, arguing that its use in court is illegal.Still other cases challenging the surveillance efforts have gotten beyond the government’s longtime insistence that accusers cannot prove they were spied upon, as the Snowden trove demonstrated a dragnet that presumptively touched every American’s phone records. This week, an Idaho federal judge implored the supreme court to settle the question of the bulk surveillance's constitutionality."The litigation now is about the merits. It’s about the lawfulness of the surveillance program," said Jameel Jaffer, the ACLU’s deputy legal director.

The Oscar-winning documentary film-maker Laura Poitras is suing the US government demanding to know why she has repeatedly been subjected to “Kafkaesque harassment” at airports across the world. Poitras, 51, said she had been held at borders more than 50 times between 2006 and 2012, often for hours at a time. At various times she alleges being told by officials that she was on a “no fly” list, having her electronic equipment confiscated and not returned for 41 days, and being threatened with handcuffs for taking notes. The latter incident took place when she was working on a film about the WikiLeaks founder Julian Assange. Poitras said she was launching the legal action, which demands the release of all documentation held on her tracking, targeting and questioning by agencies over the six year period, following the failure of a 2013 freedom of information request.

“I’m filing this lawsuit because the government uses the US border to bypass the rule of law,” said the film-maker in a statement, The Intercept reported. “This simply should not be tolerated in a democracy. I am also filing this suit in support of the countless other less high-profile people who have also been subjected to years of Kafkaesque harassment at the borders. We have a right to know how this system works and why we are targeted.” Poitras has previously said she was placed on the Department of Homeland Security’s watch list in 2006 after returning home to the US following work on My Country, My Country. She says airport security told her officials had assigned her the highest “threat rating” possible, even though she had never been charged with a crime. She was repeatedly stopped until 2012, when the journalist Glenn Greenwald wrote an article about her experiences.

Poitras’s reporting on the NSA whistleblower Edward Snowden, along with work by Greenwald, Ewen MacAskill and Barton Gellman contributed to the Pulitzer prize for public service won jointly by the Washington Post and the Guardian in 2014. Her film on Snowden, Citizenfour, won the 2015 Oscar for best documentary. The director is being represented by lawyers from digital-rights advocacy group the Electronic Frontier Foundation. “The well-documented difficulties Ms Poitras experienced while traveling strongly suggest that she was improperly targeted by federal agencies as a result of her journalistic activities,” senior counsel David Sobel told the Intercept. “Those agencies are now attempting to conceal information that would shed light on tactics that appear to have been illegal. We are confident that the court will not condone the government’s attempt to hide its misconduct under a veil of ‘national security.’”

On March 12, 2004, acting attorney general James B. Comey and the Justice Department’s top leadership reached the brink of resignation over electronic surveillance orders that they believed to be illegal. President George W. Bush backed down, halting secret foreign-intelligence-gathering operations that had crossed into domestic terrain. That morning marked the beginning of the end of STELLARWIND, the cover name for a set of four surveillance programs that brought Americans and American territory within the domain of the National Security Agency for the first time in decades. It was also a prelude to new legal structures that allowed Bush and then President Obama to reproduce each of those programs and expand their reach.What exactly STELLARWIND did has never been disclosed in an unclassified form. Which parts of it did Comey approve? Which did he shut down? What became of the programs when the crisis passed and Comey, now Obama’s expected nominee for FBI director, returned to private life?Authoritative new answers to those questions, drawing upon a classified NSA history of STELLARWIND and interviews with high-ranking intelligence officials, offer the clearest map yet of the Bush-era programs and the NSA’s contemporary U.S. operations.STELLARWIND was succeeded by four major lines of intelligence collection in the territorial United States, together capable of spanning the full range of modern telecommunications, according to the interviews and documents.

Two of the four collection programs, one each for telephony and the Internet, process trillions of “metadata” records for storage and analysis in systems called MAINWAY and MARINA, respectively. Metadata includes highly revealing information about the times, places, devices and participants in electronic communication, but not its contents. The bulk collection of telephone call records from Verizon Business Services, disclosed this month by the British newspaper the Guardian, is one source of raw intelligence for MAINWAY.The other two types of collection, which operate on a much smaller scale, are aimed at content. One of them intercepts telephone calls and routes the spoken words to a system called ­NUCLEON.For Internet content, the most important source collection is the PRISM project reported on June 6 by The Washington Post and the Guardian. It draws from data held by Google, Yahoo, Microsoft and other Silicon Valley giants, collectively the richest depositories of personal information in history.

The debate has focused on two of the four U.S.-based collection programs: PRISM, for Internet content, and the comprehensive collection of telephone call records, foreign and domestic, that the Guardian revealed by posting a classified order from the Foreign Intelligence Surveillance Court to Verizon Business Services.The Post has learned that similar orders have been renewed every three months for other large U.S. phone companies, including Bell South and AT&T, since May 24, 2006. On that day, the surveillance court made a fundamental shift in its approach to Section 215 of the Patriot Act, which permits the FBI to compel production of “business records” that are relevant to a particular terrorism investigation and to share those in some circumstances with the NSA. Henceforth, the court ruled, it would define the relevant business records as the entirety of a telephone company’s call database.The Bush administration, by then, had been taking “bulk metadata” from the phone companies under voluntary agreements for more than four years. The volume of information overwhelmed the MAINWAY database, according to a classified report from the NSA inspector general in 2009. The agency spent $146 million in supplemental counterterrorism funds to buy new hardware and contract support — and to make unspecified payments to the phone companies for “collaborative partnerships.”When the New York Times revealed the warrantless surveillance of voice calls, in December 2005, the telephone companies got nervous. One of them, unnamed in the report, approached the NSA with a request. Rather than volunteer the data, at a price, the “provider preferred to be compelled to do so by a court order,” the report said. Other companies followed suit. The surveillance court order that recast the meaning of business records “essentially gave NSA the same authority to collect bulk telephony metadata from business records that it had” under Bush’s asserted authority alone.

Israel and the occupied Palestinian territories have been convulsed by a wave of escalating violence in recent days. The lethal tensions ratcheted up sharply last Thursday when a married couple, Jewish settlers from Neria in the northern West Bank, were shot and killed in a car in front of their four children near Beit Furik, allegedly by members of a five-man Hamas cell who were subsequently arrested. Two more Israelis were stabbed and killed in Jerusalem’s Old City on Saturday by a Palestinian youth, who was shot dead at the scene. On Sunday, an 18-year-old Palestinian was shot dead by Israeli forces in clashes near the West Bank town of Tulkarem. The mounting friction has seen attacks by settlers on Palestinians, clashes between Palestinians and Israeli security forces and attempted attacks continue. On Wednesday. there were incidents in Jerusalem, where a Palestinian woman stabbed an Israeli man who then shot and seriously wounded her in the Old City, the southern Israeli city of Kiryat Gat, where a Palestinian was killed after reportedly trying to seize a gun from a soldier and stabbing him, and when a female Israeli settler’s car was stoned near Beit Sahour, which adjoins Bethlehem, in an incident in which it appears other settlers fired on Palestinians, seriously injuring a youth.

On the Palestinian side, anger escalated earlier this week after a 13-year-old boy in Bethlehem’s Aida refugee camp was shot and killed by an Israeli sniper in an incident the Israeli military has claimed was “unintentional” as soldiers were aiming at another individual.

Jerusalem has remained tense now for almost a year. Most analysts blame the recent heightened tension on several factors. Key among them has been the issue of the religious site in Jerusalem known to Muslims as al-Haram al-Sharif, or the Noble Sanctuary, and Jews as the Temple Mount. A long-running campaign by some fundamentalist Jews and their supporters for expanding their rights to worship in the Al-Aqsa mosque compound on the Temple Mount, supported by rightwing members of Israeli prime minister Binyamin Netanyahu’s own cabinet, has raised the suspicion – despite repeated Israeli denials – that Israel intends to change the precarious status quo for the site, which has been governed under the auspices of the Jordanian monarchy since 1967.

But even with the West's capitulation in Syria, and months passing without a shred of credible evidence produced, hacks among Western media continue to perpetuate the original narrative. Among these are of course corporate-financier funded think-tanks and propaganda fronts like the Brookings Institution, Foreign Policy Magazine, the Foundation for the Defense of Democracies (FDD), and establishment papers like the Guardian. In the middle of it all is couch-potato self-proclaimed weapons expert, Eliot Higgins, a representation of the West's propaganda 2.0 campaign.  UK-based Higgins lost his job and now spends his days combing social media sites for "evidence" he then analyzes and reports on. The Western media, with its propagandists expelled from Syria and many of its "sources" in Syria exposed in humiliating attempts to fabricate and manipulate evidence, quickly picked Higgins up and elevated his armchair blogging to "expert analysis." Since then, Higgins has joined the already discredited "Syrian Observatory for Human Rights" another UK-based individual, as the basis upon which the West's Syrian narrative spins. 

Whitaker is desperately attempting to keep the wheels on the establishment's new propaganda 2.0 vehicle - manipulating social media, much the way Hersh describes intelligence being manipulated, to create any outcome necessary to bolster a predetermined narrative.  What he doesn't address is the fact that Higgins' work almost entirely depends on videos posted online by people he does not know, who may be misrepresenting who they are, what they are posting, and their motivations for doing so - such is the nature of anonymity on the web and why this evidence alone is useless outside of a larger geopolitical context.  Both Whitaker and Higgins, who maintain that the Syrian government was behind the attacks, fail to address another glaring reality. A false flag attack is designed to look like the work of one's enemy. In other words, terrorists in Syria would use equipment, uniforms, weapons, and tactics that would pin the crime on the Syrian government. All Higgins has proved, thus far, is that the superficial details of the operation made for a convincing false flag attack. 

Toward the end of Higgin's piece, he, like his friends at the Guardian, attempt to claim Al Nusra, contrary to Hersh's report, are most likely not capable of producing sarin.

Man does civic duty, and is warmly thanked? Of course not. Should Mr Snowden return to his homeland he can confidently expect to be prosecuted under the Espionage Act and, if convicted – like Chelsea Manning before him – locked away for a very long time. For all his background in constitutional law and human rights, Mr Obama has shown little patience for whistleblowers: his administration has used the Espionage Act against leakers of classified information far more than any of his predecessors. It is difficult to imagine Mr Obama giving Mr Snowden the pardon he deserves. There has been some talk of an amnesty – with NSA officials reportedly prepared to consider a deal allowing Mr Snowden to return to the US in exchange for any documents to which he may still have access. The former head of MI5, Dame Eliza Manningham-Buller recently predicted such an outcome, though Mr Obama's own security adviser, Susan Rice, thought he didn't "deserve" it. A former CIA director, James Woolsey, suggested he "should be hanged by his neck until he is dead".

Time and again since the world learned the extent of what the NSA was doing, government officials have defended the controversial mass surveillance programs by falling back on one talking point: the NSA programs may be all-powerful, but they have never been abused. President Obama continually evokes the phase when defending the NSA in public. In his end-of-year press conference, he reiterated, "There continues not to be evidence that the [metadata surveillance] program had been abused". Former NSA chief Michael Hayden says this almost weekly, and former CIA deputy director and NSA review panel member Mike Morrell said it again just before Christmas. This mantra is likely to be repeated often in 2014 as Obama is set to address the nation on government surveillance, and Congress and the president debate whether any reforms are necessary.There's only one problem: it's not true.

Prosecutors in Sweden pursuing Julian Assange over rape allegations have rejected a demand by his lawyers to hand over new evidence and withdraw the warrant for his arrest, setting the stage in two weeks' time for the first legal battle in the case since 2012.In a sharply worded rebuttal, prosecutors stated that Assange does not have the right to see copies of the case files.Lawyers for the WikiLeaks founder requested last week that text messages sent by his accusers be passed to the defence in an attempt to break the deadlock in the rape case brought four years ago against him."There is still probable cause to believe that Julian Assange is guilty of the offences that he was arrested for, and the basis for his detention, risk of flight, is undiminished," prosecutors Marianne Ny and Ingred Isgren said in a submission to Stockholm district court.

The court announced on Thursday that the two sides will present their arguments on 16 July in a public hearing – the first formal legal discussion of the case since Assange sought asylum in the Ecuadorean embassy in London two years ago.

Respect MP George Galloway was taken to hospital with a suspected broken jaw on Friday night after being attacked in the street.Police arrested a British man over the incident, which is believed to have been prompted by comments Galloway has made about Israel in past weeks.The 60-year-old was posing for pictures in Notting Hill, London, on Friday evening when a man lashed out at him, his spokesman said. Galloway gave a statement to police after a man aged 39 was arrested."George was posing for pictures with people and this guy just attacked him, leapt on him and started punching him," his spokesman said."It appears to be connected with his comments about Israel because the guy was shouting about the Holocaust. George is badly bruised but OK. He has bruising to his head and face and is in pretty bad shape."

Last week, the MP was interviewed by police under caution after he was accused of inciting racial hatred by declaring his constituency, Bradford West, an "Israel-free zone".In a speech he gave in Leeds on 2 August he said: "We don't want any Israeli goods; we don't want any Israeli services; we don't want any Israeli academics coming to the university or the college; we don't even want any Israeli tourists to come to Bradford, even if any of them had thought of doing so."Galloway called the police investigation into him a "monumental – and monumentally expensive – waste of police time".

In 2008, Galloway was injured after a man threw a rubber stress ball at his head while he was campaigning. A 32-year-old man was cautioned by police over that incident.

Factories shutting down, industrial heartlands under attack and currency in freefall, contributing to sharp increase in prices

Ukraine could need a further $19bn in emergency international funding by the end of next year if there is no resolution to the escalating conflict in the east of the country, the International Monetary Fund (IMF) has warned.

The IMF last week approved a $1.4bn (£840m) loan to Ukraine, the second tranche of its $17bn bailout programme agreed in April to stave off default.Ukraine urgently needs IMF loans to support its budget and prop up its faltering currency as its debts come up for repayment. Almost $4bn must be repaid before the end of the year, with $9bn due in 2015.In exchange for IMF aid, Ukraine's government has agreed on sweeping economic reforms, including curbing public-sector wage increases, increasing energy prices to bring them more in line with market values, overhauling banking and currency regulations and tackling chronic graft that has made the country one of the most corrupt in the world.

A secret US cybersecurity report warned that government and private computers were being left vulnerable to online attacks from Russia, China and criminal gangs because encryption technologies were not being implemented fast enough. The advice, in a newly uncovered five-year forecast written in 2009, contrasts with the pledge made by David Cameron this week to crack down on encryption use by technology companies.

In the wake of the Paris terror attacks, the prime minister said there should be no “safe spaces for terrorists to communicate” or that British authorites could not access. Cameron, who landed in the US on Thursday night, is expected to urge Barack Obama to apply more pressure to tech giants, such as Apple, Google and Facebook, which have been expanding encrypted messaging for their millions of users since the revelations of mass NSA surveillance by the whistleblower Edward Snowden.

Cameron said the companies “need to work with us. They need also to demonstrate, which they do, that they have a social responsibility to fight the battle against terrorism. We shouldn’t allow safe spaces for terrorists to communicate. That’s a huge challenge but that’s certainly the right principle”. But the document from the US National Intelligence Council, which reports directly to the US director of national intelligence, made clear that encryption was the “best defence” for computer users to protect private data. Part of the cache given to the Guardian by Snowden was published in 2009 and gives a five-year forecast on the “global cyber threat to the US information infrastructure”. It covers communications, commercial and financial networks, and government and critical infrastructure systems. It was shared with GCHQ and made available to the agency’s staff through its intranet.

Israel’s prime minister Binyamin Netanyahu has unequivocally ruled out the establishment of a Palestinian state as he vowed to strengthen construction of settlements in occupied east Jerusalem should he be re-elected on Tuesday. Netanyahu’s comments reinforced his hardening message of recent days and confirmed his final abandonment of his at best tepid commitment to a two-state solution designed to see the creation of an independent Palestinian state. His remarks were made in an interview with a website owned by US casino magnate Sheldon Adelson - Netanyahu’s biggest backer - and were being viewed by his political opponents as a last-ditch effort to sway voters away from the rival far-right Jewish Home party of Naftali Bennett.

“I think that anyone who moves to establish a Palestinian state and evacuate territory gives territory away to radical Islamist attacks against Israel,” Netanyahu said. “The left has buried its head in the sand time and after time and ignores this, but we are realistic and understand.” When asked if that meant a Palestinian state would not be established if he is elected, Netanyahu replied: “Indeed.” While his remarks will be seen in large part as election rhetoric designed to cement his standing with his country’s hard right at a time when Netanyahu has been struggling in his campaign, they will further strain relations with the US and other key allies should he win a third consecutive term.

Over the weekend, the U.S. military carried out further airstrikes in Iraq, targeting Islamic State militants near the Mosul Dam, involving “a mix of fighter, bomber, attack and remotely piloted aircraft.” The nine strikes on Saturday and 14 strikes on Sunday were carried out under authority “to support humanitarian efforts in Iraq,” to protect U.S. personnel and facilities, and to support Iraqi and Kurdish defense forces [U.S. Central Command]. President Obama notified Congress of the latest American involvement yesterday, stating that “[t]he failure of the Mosul Dam could threaten the lives of large numbers of civilians, endanger U.S. personnel and facilities, including the U.S. Embassy in Baghdad.” Obama said the operations will be “limited in their scope and duration.” The significantly expanded air campaign, including the first reported use of U.S. bombers, has strengthened the Kurdish forces’ ground offensive to reclaim the strategic dam from Islamic State control [Wall Street Journal’s Matt Bradley et al.; Washington Post’s Liz Sly et al.]. Iraqi state television reported early today that Iraqi and Kurdish forces are now in control of the dam [Reuters], although there are reports of continued heavy fighting around the Mosul Dam [Al Jazeera]. Joe Parkinson [Wall Street Journal] covers how the U.S. has gained a “controversial new ally” in the Kurdistan Workers’ Party (PKK), as a number of PKK fighters joined the U.S.-backed Kurdish battle in northern Iraq over the weekend.

Israel-Palestine With the five-day truce between Israel and Hamas set to expire tonight, Israeli and Palestinian negotiators are continuing discussions in Cairo, although significant gaps remain between the two sides. While Israel is pushing for tougher security measures, Palestine is demanding an end to the Gaza blockade without preconditions [Associated Press; Reuters’ Nidal Al-Mughrabi and Jeffrey Heller]. Israeli troops have demolished the homes of two Palestinians suspected to have been behind the abduction and killing of the three Israeli teenagers in the West Bank in June [Haaretz’s Gili Cohen]. An IDF spokesperson said that the demolition “conveys a clear message to terrorists and their accomplices that there is a personal price to pay when engaging in terror and carrying out attacks against Israelis” [Al Jazeera]. Haaretz’s editorial board notes how the Israeli offensive in Gaza has generated “a very public crisis in relations between Israel and the United States” and warns that “Netanyahu must ease the tension with Washington and act to repair the rift with Obama.” The Wall Street Journal (Joshua Mitnick) explores how Israeli Prime Minister Benjamin Netanyahu’s “containment strategy” in the ongoing conflict is “a contrast from the tough talk against terrorism that fueled his political ascent.”

ulian Borger [The Guardian] notes how the potential International Criminal Court investigation into alleged war crimes in Gaza by both Israeli and Hamas forces has become a “fraught political battlefield.” Marwan Bishara [Al Jazeera] explains how and why the UN has been “sidelined” in the Middle East conflict. Meanwhile, the British government is facing a legal challenge over its decision to not suspend existing licenses for the sale of military hardware to Israel following the launch of Operation Protective Edge in Gaza last month [The Guardian’s Jamie Doward].

The White House has instructed US security agencies to review their training and policy materials for racial or religious bias after documents leaked by Edward Snowden showed training material for the intelligence agencies referring to "Mohammed Raghead".After an extensive investigation by the Intercept on Wednesday reported that the NSA and the FBI spied on the emails of five prominent US activists and attorneys with Muslim backgrounds, White House spokeswoman Caitlin Hayden said that the administration took accusations of the slurs "extremely seriously." "Upon learning of this matter, the White House immediately requested that the director of national intelligence undertake an assessment of intelligence community policies, training standards or directives that promote diversity and tolerance, and as necessary, make any recommendations changes or additional reforms," Hayden said.It is at least the second time the White House has ordered a review of agency training materials said to include offensive language.

Hayden declined to provide additional detail on the scope or duration of the investigation. But it is reminiscent of an earlier incident in which the White House ordered the government's vast counter-terrorism apparatus to find and purge inflammatory training material, particularly that which singled out Muslims for particular scrutiny. In 2011, this reporter published FBI training material instructing newer counter-terrorism agents that Islam itself was a threat to US national security and compared the prophet Muhammad to a cult leader. Initial FBI pushback gave way to an inquiry, at the instruction of the White House, that removed significant quantities of offensive or imprecise training material. That instruction came six years after the "Mohammed Raghead" material and stretched far beyond the FBI. Anti-Islam training material, including some urging "Hiroshima" tactics against Islamic nations, was found and removed from professional education courses for US military officers, at the behest of Army General Martin Dempsey, the chairman of the joint chiefs of staff.

The Obama administration has strained to reconcile the vast counter-terrorism bureaucracy with its policy declarations that the US is not at war with Islam and has attempted, with mixed results, to cultivate a less militarized and security-focused relationship with US Muslims, often preferring the term "countering violent extremism" over "counter-terrorism".In some anti-Islam circles, the removal of the instructional material is infamous and considered evidence of an administration capitulation to Islam – the exact opposite of the concern raised by the Intercept on Wednesday. The Intercept report, by former Guardian columnist Glenn Greenwald, Murtaza Hussain and Josh Meyer, suggested a persistent counter-terrorism atmosphere in which the mixture of Muslim heritage or faith and political activism attracted the scrutiny of US security agencies, despite first amendment protections. It presented the cases of five American activists and attorneys of Muslim heritage who appear to have been targeted for surveillance, at least between 2002 and 2008. None have been charged with a crime.

The British government's problems with missing files deepened dramatically when the Foreign Office claimed documents on the UK's role in the CIA's global abduction operation had been destroyed accidentally when they became soaked with water.In a statement that human rights groups said "smacked of a cover-up", the department maintained that records of post-9/11 flights in and out of Diego Garcia, the British territory in the Indian Ocean, were "incomplete due to water damage".The claim comes amid media reports in the US that a Senate report due to be published later this year identifies Diego Garcia as a location where the CIA established a secret prison as part of its extraordinary rendition programme. According to one report, classified CIA documents state that the prison was established with the "full cooperation" of the UK government.

Ministers of successive governments have repeatedly given misleading or incomplete information about the CIA's use of Diego Garcia. In February 2008, the then foreign secretary, David Miliband, was forced to apologise to MPs and explain that Tony Blair's "earlier explicit assurances that Diego Garcia had not been used for rendition flights" had not been correct. Miliband said at this point that two rendition flights had landed, but that the detainees on board had not disembarked.Miliband's admission was made after human rights groups produced irrefutable evidence that aircraft linked to the rendition programme had landed on Diego Garcia. Since then, far more aircraft have been shown to have been involved in the operation.The "water damage" claim was given in response to a parliamentary question by the Tory chair of the Treasury select committee, Andrew Tyrie, who has been investigating the UK's involvement in the rendition programme for several years.

The British government is particularly sensitive about the allegations that Diego Garcia hosted one of the CIA's prisons, at times claiming that it knows only that which it is told by Washington. Although the island has operated as a US military base since the islanders were evicted in the 1960s, it remains a British territory, and its use during the rendition programme would have placed the UK in breach of a raft of international and domestic laws.Belhaj and his wife are suing MI6, the agency's former head of counter-terrorism Sir Mark Allen and Jack Straw, who was foreign secretary at the time that the couple were abducted.Last month, the Commons cross-party defence committee suggested that information about the extent to which the CIA used the island as a "black site" to transfer detainees was still being withheld. "Recent developments have once again brought into question the validity of assurances by the US about its use of Diego Garcia," it said.The committee warned that it will assess the implications for Britain and for "public confidence" in its previous statements on US use of Diego Garcia, and said the US should not in future be permitted to use the island, to transfer terror suspects, for combat operations, "or any other politically sensitive activity", without the explicit authorisation from the UK government.