The New Nation - Internet Edition

Bush issues dire economic warning

AFP, Washington

Warning "our entire economy is in danger," US President George W. Bush called unprecedented crisis talks for Thursday with White House rivals John McCain and Barack Obama and congressional leaders.

Bush announced the summit in a prime-time televised speech Wednesday seeking public support for his 700-billion-dollar Wall Street rescue plan and to pile pressure on angry lawmakers who declared the shock proposal dead on arrival.

"We're in the midst of a serious financial crisis," Bush said in his 13-minute speech from the White House.

"Without immediate action by Congress , America could slip into a financial panic," the vastly unpopular president said. "Ultimately, our country could experience a long and painful recession."

Six weeks before US elections and four months before he hands the battered US economy to a new steward, Bush said inaction could wipe out banks, threaten retirement nest eggs, send home values into freefall, foreclosures skyrocketing and create millions of new jobless.

"We must not let this happen," urged the president, who said a rare "spirit of cooperation" in Washington in the face of the crisis had led him to invite McCain, Obama, and top House and Senate leaders of both parties to the White House.

Bush had invited Obama in a personal telephone call 90 minutes before his speech, the White House said. The Democrat's chief spokesman, Bill Burton, confirmed in a statement that the Illinois senator would attend.

Obama has worked all week with top lawmakers, Treasury Secretary Henry Paulson, and Federal Reserve chairman Ben Bernanke and "will continue to work in a bipartisan spirit and do whatever is necessary to come up with a final solution," said Burton.

"We will discuss the progress we have made to improve the administration's deeply flawed plan to address this unprecedented crisis," Democratic Senate Majority Leader Harry Reid said in a statement.

"As I have said throughout, tomorrow's meeting and future deliberations must be focused on solutions, not photo ops," Reid said, after other Democrats mocked McCain's decision to suspend his campaign over the crisis as a gimmick.

Opinion polls show the US public is angry at Wall Street but deeply divided about a remedy, with many ready to blame Bush and his Republican party-which itself has fissured over the plan amid fierce objections from conservatives.

They have expressed dismay over the massive government involvement in the economy, while Bush's Democratic foes have pushed for more government oversight and stronger consumer protections, and both sides have balked at the price tag. Speaking to his angry allies, Bush explained: "I faced a choice, to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all."

Addressing suspicious Democrats, he promised that the plan must ensure that reckless executives do not reap a "windfall" from taxpayer funds.

He also said he recognized the package would "present a tough vote for many members of Congress," acknowledging "it is difficult to pass a bill that commits so much of the taxpayers' hard-earned money."

But lawmakers "must ensure that efforts to regulate Wall Street do not end up hampering our economy's ability to grow," he warned.

It was not clear how much impact what is arguably the president's most potent political weapons-the ability to command national attention-would have with just four months left in his term.

"At this point, there are real doubts about the president's ability to be seen as a trusted and credible source on the economy by the American public," a conservative Republican congressional aide told AFP on condition of anonymity.

But public remarks from all sides suggested that Bush could count on a consensus that inaction could trigger a global financial meltdown.

"Now is a time to come together-Democrats and Republicans-in a spirit of cooperation for the sake of the American people," McCain and Obama said in an unusual joint statement.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said.

India, Pakistan agree to boost faltering peace

AP, New Delhi

India's prime minister met with Pakistan's president at the U.N. in New York and they agreed to boost a faltering peace process between the nuclear-armed neighbors, a joint statement said Thursday.

Prime Minister Manmohan Singh and President Asif Ali Zardari held discussions on the sidelines of the United Nations General Assembly.

"Both leaders acknowledged that the peace process has been under strain in recent months," the statement said. "They agreed that violence, hostility and terrorism have no place in the vision they share of the bilateral relationship, and must be visibly and verifiably prevented."

Two trade routes across a de facto border in Kashmir, the Himalayan region divided between the two rivals, will open Oct. 21 to help improve ties, it said.

Predominantly Hindu India and Muslim Pakistan have fought two of their three wars over Kashmir since they were created in the bloody partition of the Indian subcontinent at independence from Britain in 1947.

The two nations regularly exchanged gunfire along Kashmir's de facto border, known as the Line of Control, before signing a cease-fire in late 2003 and initiating a peace process a year later.

After a long period of relative calm there have been more than two dozen incidents along the frontier this year, with both sides accusing the other of violating the truce.

India has also accused Pakistan of involvement in more than a dozen bombings in India over the past three years, as well as the July bombing of New Delhi's embassy in Afghanistan. Pakistan has denied the accusations.

The two sides also agreed that foreign secretaries from both sides would meet in the next three months.

From Oct. 21 trade routes would open between Srinagar and Poonch in Indian Kashmir and Muzaffarbad and Rawalkot in Pakistan, the statement said. A third route between Kargil and Skardu will also be discussed.

During recent protests in Indian-controlled Kashmir, demand for trade between the two portions became a major issue after Hindu groups blockaded major roads leading to the rest of India, causing shortages of food and medicine.

India and Pakistan allow only a passenger bus service twice a month across the Line of Control.

US soldier among 36 killed in Iraq violence

AP, Baghdad

The U.S. military says an American soldier has been killed by a suicide bomber in Iraq.

A statement says the attacker struck a Multi-National Division - North soldier during operations Wednesday in Diyala province. U.S. and Iraqi forces launched an offensive this summer to try to rout insurgents from the rural area north of Baghdad.

At least 4,171 members of the U.S. military have died in the Iraq war since it began in March 2003, according to an Associated Press count.

Meanwhile, the death toll from an ambush against Iraqi police in the restive province of Diyala has risen to 35, a local mayor told AFP on Thursday.

Gunmen struck on Wednesday in the village of Al-Dulaimat near the town of Khan Bani Saad north of Baghdad, in one of the worst attacks against police in recent times.

Gunmen shot dead 12 policemen and eight anti-Qaeda fighters, a security official said on Wednesday. But the town mayor Naif Abdullah said another 15 wounded policemen who were sent to a hospital in Baghdad were dead on arrival.

Among those killed were three high-ranking officers whom gunmen captured and executed, officials said. Four other policemen were injured.

The ambush took place Wednesday afternoon as an Iraqi police battalion of about 300, along with a group of anti-Qaida fighters, patrolled a village south of Khan Bani Saad in Diyala province, 15 miles south of Baqouba .

Police said the battalion entered the village thinking it was safe because the area had recently been raided and cleared.

But soon after the battalion arrived, the gunmen opened fire in a wooded area. It's unclear how many attackers were involved. None of them was killed, officials said.

"They were shooting from all sides," a policeman who survived the attack said. "It was like we were fighting ghosts." The policeman told officials that three high-ranking police officers were captured and executed. Anti-Qaida fighters, known as the Sons of Iraq , have become common targets for al Qaida . Many anti-Qaida leaders in Diyala province have gone into hiding.

The four injured policemen were treated at a hospital in Baghdad , officials said.

The gunmen are thought to have escaped. Police said al Qaida in Iraq had threatened to kill police, and the ambush fit the operating style of the Sunni extremist group.

Despite recent security gains, Diyala province has seen continued violence. In July, Iraqi forces backed by the U.S. military launched a campaign to fight insurgents there, but attacks have continued in the province.

A McClatchy special correspondent in Diyala, who could not be identified for reasons of his own security, contributed to this report.

China milk scandal deplorable: WHO

Reuters, Hong Kong

The World Health Organization and UNICEF said on Thursday China's contaminated milk powder scandal was "deplorable" as more countries in Asia and Europe banned imports of Chinese milk products.

Beijing is battling public alarm and international dismay after close to 13,000 Chinese children crowded hospitals, sick from infant milk formula tainted with melamine, a cheap industrial chemical that can be used to cheat quality checks.

"Deliberate contamination of foods intended for consumption by vulnerable infants and young children is particularly deplorable," the World Health Organization and UNICEF, the United Nations agency for children, said in a joint statement.

But the two agencies said Beijing's plan to overhaul its food safety would help prevent a recurrence.

"We are confident that swift and firm actions are being taken by China's food safety authorities to investigate this incident fully."

"We also expect that following the investigation and in the context of the Chinese government's increasing attention to food safety, better regulation of foods for infants and young children will be enforced," the two organizations said in a statement.

The WHO and UNICEF also urged mothers to breast feed their infants, a need further underscored by "alarming examples" of tainted formula scandals in China and around the world.

While the scandal has triggered arrests and official sackings in China, the repercussions began to spread overseas.

Taiwan Health Minister Lin Fang-yue tendered his resignation after 25 tonnes of potentially tainted milk powder were imported to the island, the Taiwanese Central News Agency reported.

China's poor track record in coming clean on past product safety scandals including toys, toothpaste, pharmaceutical and pet food ingredients has seriously dented the country's credibility.

Sri Lanka president says won't allow Tigers to hold Tamil people hostage

AFP, Colombo

Sri Lankan President Mahinda Rajapakse said he would not allow the Tamil Tigers to hold the Tamil people hostage, as the decades- long conflict with the rebels escalates, his office said today.

In an address to the UN General Assembly on Wednesday, Rajapakse accused the Liberation Tigers of Tamil Eelam (LTTE) of denying Tamil people living in the north their democratic rights to dissent and free speech.

The president asked the LTTE, who have been fighting for a separate homeland for the Tamil minority in the island's north and east since 1972, to disarm and resume talks with the government.

"Our government would only be ready to talk to this illegal armed group (LTTE) when it is ready to commit itself to decommissioning of its illicit weapons and dismantling of its military capability, and return to the democratic fold."

The LTTE did not immediately comment on Rajapakse's remarks.

Having wrestled the east from the LTTE in July 2007, Rajapakse's government pulled out of a ceasefire with the rebels in January, and is currently trying to dismantle their northern mini-state.

Having poured in a record 1.5 billion dollars into this year's war efforts, troops are now moving to capture the rebels' political capital of Kilinochchi and its neighbouring district of Mullaittivu.

The Tigers have lost some 6,862 rebels in the latest offensive since January, according to Sri Lanka's defence ministry, while 672 soldiers have died during the same period.

Aid organisations say the fighting has forced around 230,000 people from their homes.

NKorea on brink of restarting nuclear programme

AFP, Seoul

North Korea was Thursday on the brink of restarting the nuclear weapons programme it shut down 14 months ago under a landmark disarmament deal, as negotiating partners struggled to save the pact.

The communist state has told the UN atomic watchdog it will start work to resume plutonium reprocessing at its Yongbyon complex, possibly within a week. It has barred International Atomic Energy Agency (IAEA) inspectors from the reprocessing plant.

Analysts in Seoul say the North is practising brinkmanship in its bitter dispute with the United States over nuclear inspections, but is not necessarily bluffing.

US Secretary of State Condoleezza Rice said Wednesday the North's latest moves "will only deepen their isolation," but insisted that the tortuous six-nation nuclear disarmament talks which began in 2003 are not dead.

"We have been through ups and downs in this process before but I think the important thing is this is a six-party process," she said.

Rice and chief US negotiator Christopher Hill have been holding intensive talks with their counterparts from South Korea, China, Japan and Russia. South Korea-which was outraged and alarmed when the North tested an atomic weapon in October 2006 -- expressed deep concern.

"We have serious concerns about the North Korean move yesterday," said foreign ministry spokesman Moon Tae-Young.

"We are in close consultations with other participants in the six-party talks and calmly responding to make sure that North Korea should not aggravate the situation any further."

Under a deal reached in February 2007, North Korea in July that year shut down Yongbyon under IAEA supervision.

Four months later, it began disabling the plants. In June this year it handed over details of its plutonium-based nuclear programme, which was thought to have produced enough material for about six bombs before the shutdown.

In return, it was promised one million tonnes of fuel oil or equivalent aid and its removal from a US terrorism blacklist which blocks some foreign aid.

But last month Pyongyang announced it had halted disablement in protest at Washington's refusal to drop it from the blacklist. The US says the North must first agree procedures for strict verification of its nuclear disclosures.

Britain mulls allowing Catholic monarchs

AFP, London

The British government is drawing up plans to end a 300-year-old exclusion of Catholics from the line of succession, as well as ending the priority given to male heirs, a newspaper reported today.

The Labour government would introduce the necessary legislation after the next election, according to The Guardian, which has long petitioned for a change in the law that critics have condemned as discriminatory.

Prime Minister Gordon Brown's office declined to comment, although Justice Minister Jack Straw said in March that the government was "certainly ready to consider" reviewing the "antiquated" ban on Catholic monarchs. Rules laid out in the Bill of Rights 1688, the Act of Settlement 1700 and the Act of Union 1706 state that the monarch must be a Protestant, and any royal who marries a Catholic is barred from the line of succession.

Earlier this year, a Catholic engaged to one of the Queen's grand-children, Peter Phillips, had to be accepted into the Church of England before the couple could marry, or her husband would have lost his claim to the throne.

Changes to the rule stating that the crown automatically passes to the first male heir were also planned, The Guardian said, and could see a first-born daughter of Prince William, second in line to the throne, become queen.

Former prime minister Tony Blair said in 1999 he had no plans to change the law, mainly because it would require amending several pieces of legislation and would have to be approved by the Commonwealth nations.

'US drone’ crashes in Pakistan

Reuters, Islamabad

A suspected U.S. pilotless drone has crashed in the northwestern Pakistani region of South Waziristan after a spate of missile attacks by unmanned U.S. aircraft in Pakistan strained ties between the allies.

Pakistan has said U.S. missile attacks and one U.S. ground assault are a violation of its sovereignty and the army has vowed to defend Pakistani territory.

President Asif Ali Zardari met U.S. President George W. Bush in New York on Tuesday and spoke strongly about protecting Pakistani sovereignty, Bush said. Pakistani news channels said early on Wednesday a U.S.-operated drone had come down near the border village of Angor Adda, where U.S. commandos launched a raid on September 3.

The Pakistani military confirmed that a pilotless aircraft had come down but did not identify it as American. Other countries with forces in Afghanistan have not been known to operate drones over Pakistani territory.

"A surveillance unmanned aerial vehicle while flying over Pak-Afghan border yesterday night crash landed, on this side of the border t apparently due to malfunctioning," the army said in a statement.

"The wreckage t has been recovered."

American officials earlier denied that the United States had lost any drones: "No such thing occurred," said one.

Mugabe to address UN General Assembly

AP, United Nations

Zimbabwe's president is only four Cabinet posts away from carrying out a power-sharing agreement with the opposition, he said in an interview ahead of his Thursday address to the U.N. General Assembly.

Robert Mugabe dismissed reports that the Sept. 15 power-sharing deal could fall apart "because I don't know of any hitch." He said he hopes the agreement will lead the West to ease sanctions he blamed for devastating the country's economy.

Under the power-sharing deal, the 84-year-old Mugabe remains president but is supposed to cede some of the powers he has wielded for nearly three decades in the southern African country.

Long-simmering and bitter differences as well as the nation's economic collapse, though, have put the deal under intense pressure.

Mugabe said Wednesday that the only outstanding issue is deciding on four of the 31 Cabinet posts, and those negotiations are continuing in Harare while he is in New York.

He declined to say which posts are still being discussed. The agreement provides for 15 nominees from Mugabe's party, 13 from opposition leader Morgan Tsvangirai and three from the leader of a smaller opposition faction, Arthur Mutambara.

"Every one of us is actually positive about the agreement, or the need to cement the agreement and make it work," Mugabe said.

"I don't see any reason why we can't work together as Zimbabweans," he said. "We are all sons of the soil, as we say, and the differences arise purely from own conceptions of what Zimbabwe should be and what the government of Zimbabwe should be."

Financial crisis creates daring duel for McCain, Obama

AFP, New York

With 40 days to go until election day, the fast-moving global financial crisis has transformed the White House race into a daring duel of political brinkmanship for John McCain and Barack Obama. It was a compelling day of political bluff and counter-bluff Wednesday with each of the rivals trying to show the steady nerve, on-the-fly strategizing and leadership aura worthy of a president. Sinking in the polls as his Democratic rival capitalizes on the economic anxiety sweeping the United States, McCain pulled off a sudden and daring maneuver by suspending his campaign and challenging Obama to do the same.

But Obama refused to take the bait, rejecting the Republican champion's call to delay their crucial first presidential debate on Friday with a withering rebuke to McCain that presidents must deal with "more than one thing at once."

Enter President George W. Bush. The unpopular outgoing leader, warning in a nationally televised address Wednesday that "our entire economy is in danger," persuaded Obama to meet him, McCain and top congressional players in Washington on Thursday.

The historic White House conclave could provide political cover to ram a 700 billion dollar financial rescue deal through Congress-for which both will no doubt claim a large slice of the credit.

With his standing in opinion polls sliding in recent days, it seemed McCain knew he had to make a bold move to stop the election slipping away after leaving a poor impression during a week of economic turmoil.

In a stunning press conference in New York, McCain announced gravely that he had put his campaign on hold and would return to Washington to seek a solution to the crisis.

"We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved," McCain said.

That seemed a message directed at wavering Democrats who have yet to embrace Obama and independent voters, a sign that the old, maverick reformer McCain-not the Bush clone that Democrats are trying to frame his as-was back.

The campaign said the move was motivated by a realisation that nothing was going to get done in Washington without the politicians with the most to lose, or gain, from a solution getting involved.

Citizens must support terror war: Zardari

AP, Islamabad

Pakistan - Pakistan's new president said he was trying to convince his country to support the war against Islamic extremists, after a group that claimed responsibility for the Marriott Hotel bombing threatened more attacks.

The attack in the capital Islamabad and the new threats underscored the danger Islamist militants pose to Pakistan, where al-Qaida and Taliban fighters have established bases in tribal regions along the border with Afghanistan. The U.S. has pushed Pakistan to crack down on the northwest bases, even launching its own attacks, but those American strikes have outraged a population already unhappy with Pakistan's alliance with the United States. Pakistani President Asif Ali Zardari told reporters Wednesday on the sidelines of the U.N. General Assembly in New York that international support for Pakistani anti-terror efforts was important but that unilateral U.S. strikes undermined efforts to win "hearts and minds." "There is the physical dimension, there is the economic side," Zardari said, according to the state-run Associated Press of Pakistan. "The idea is to increase acceptance of the fight inside Pakistan and outside Pakistan, and we are striving to improve on this idea."

Authorities also boosted security at Islamabad's international airport Thursday after a telephone threat warned a suicide bomber would attack the facility.

Flights were not affected and more than an hour after the time the caller said the strike would take place, no such attack had happened, said senior airport security officer Col. Ashraf Faiz.

Japan's new PM off to make UN push

AFP, Tokyo

Japan's new Prime Minister Taro Aso rushed Thursday to a United Nations summit in New York less than a day after taking office, hoping to show Japan as an active global player.

Aso, a conservative former foreign minister, flew out to address the UN General Assembly later Thursday New York time. He is the first Japanese premier to go to the UN summit in three years due to political turmoil in Tokyo.

Aso , who has also become chairman of the Group of Eight major industrial powers, was expected to offer a role by Japan in curbing the financial turmoil that has spread across the globe following the collapse of Wall Street firms.

He was also expected to make a new push for a permanent seat for Japan, the world's second largest economy , on the UN Security Council.

Japan's previous bid to join the powerful body flopped due to strong opposition by China, the only Asian nation in the elite club.

Aso took office on Wednesday after the ruling party overwhelmingly chose him to replace Yasuo Fukuda, whose popularity tumbled after he raised the costs of health care for the elderly amid a faltering economy. He takes office as tough general elections loom against an increasingly strong opposition.

Aso comes from the opposite wing of the Liberal Democratic Party to Fukuda, a foreign policy dove who throughout his career has worked to repair Japan's historically tense relations with China and South Korea.

As foreign minister, Aso spoke of the concept of an "arc of freedom of prosperity" encompassing democracies in Asia such as India, along with the United States, Australia and NATO members.

His speech was widely interpreted as an attempt to move Japan in a new way of foreign-policy thinking that excludes China and Russia from its main interests.

Guantanamo prosecutor quits over detainee case

AP, Guantanamo Bay

A U.S. military prosecutor at Guantanamo Bay has quit because of what he described as ethical disputes with his superiors, alleging they suppressed evidence that could help clear a young Afghan detainee of war crimes.The prosecutor, Army Lt. Col. Darrel Vandeveld, described the disagreements in a statement supporting a defense bid to dismiss the charges against Mohammed Jawad. A copy was obtained Wednesday by The Associated Press.

"Potentially exculpatory evidence has not been provided," Vandeveld wrote, citing a failure by "prosecutors and officers of the court."

The disclosure triggered new attacks on the integrity of the Pentagon's military tribunal system, which has faced accusations of ethical lapses and political interference from other insiders including a former chief prosecutor.

The current chief prosecutor, Army Col. Lawrence Morris, denied that his office withheld evidence and said there was no basis to Vandeveld's ethical qualms. He said Vandeveld told him he was leaving his post for "personal reasons."

"All you have is someone who is disappointed because his superiors didn't see the wisdom of his recommendations in a case," Morris told reporters.

Jawad, who was captured in Afghanistan when he was 16 or 17, is accused of throwing a grenade that wounded two American soldiers and their interpreter in December 2002. He faces a maximum life sentence at a trial scheduled to begin in December.

Vandeveld said prosecutors knew that Jawad may have been drugged before the attack and that the Afghan Interior Ministry said two other men had confessed to the same crime, according to Michael Berrigan, deputy chief defense counsel for the Guantanamo tribunals.

In his written declaration, Vandeveld said he wanted to offer Jawad a plea deal that would allow him to receive rehabilitation during a short period of additional confinement. His bosses disagreed.