World Highlights

O Leaders of striking bus and subway workers in New York agreed yesterday to a return to work after talks at which the union and transit authorities undertook to go back to the bargaining table, mediators said.

O Europe's competition regulator threatened US software giant Microsoft with daily fines yesterday for failing to comply with antitrust sanctions a year after a top European Union court ruled it must obey.

O Japanese Foreign Minister Taro Aso said yesterday that China's military build-up was a threat, given its lack of transparency, triggering an angry retort from Beijing, which said his comments were "highly irresponsible".

O Israeli troops killed three militants in a West Bank gun-battle and shelled the Gaza Strip to stop rocket fire yesterday in escalating violence that could complicate upcoming elections on both sides.

O An Istanbul court yesterday fined a writer for insulting the Turkish state in a book on the evacuation of Kurdish, Armenian and Syriac Christian villages and a publisher for an article on Turkey's policy on Iraq.

O US consumer spending rose a moderate 0.3 per cent last month but a big drop in energy costs and scant inflation elsewhere boosted shoppers' buying power sharply, the government said yesterday.

O US health officials yesterday said Medicare's new prescription drug programme was off to a strong start with more than 21 million elderly and disabled people set to receive coverage on January 1.

O Nigerian President Olusegun Obasanjo placed security forces in the oil producing delta on high alert yesterday following pipeline attacks that killed 11 people and forced energy giant Shell to delay shipments.

O UN and Congolese forces launched a major operation against a local militia yesterday to try to assert government control over the lawless east, days after a landmark vote on a post-war constitution, the UN said.

O Tamil Tiger rebels attacked two Sri Lankan naval craft off the island's northwest coast yesterday, opening fire and capturing three sailors in the most violent incident at sea since a 2002 truce, the navy said.