World Highlights

O A senior Hamas official raised the possibility of indirect negotiations with Israel, softening the Islamic militant group's stance ahead of this week's Palestinian election. The shift by Mahmoud al-Zahar came on the final frenetic day of official campaigning before tomorrow's parliamentary vote, which could catapult the movement into its first role in Palestinian government.

O Five African leaders have asked Sudan to withdraw its bid to head the African Union because the appointment could sink Darfur peace talks and dent the group's credibility, an AU official and delegates said.

O Mixing defiance with diplomacy, Iran said it did not fear Western threats over its nuclear programme and vowed to pursue uranium enrichment if taken to the UN Security Council for possible sanctions. But it also called for more dialogue with the European Union to resolve a stand-off that is helping drive up world oil prices.

O A series of bomb blasts rocked Baghdad as insurgents targeted a police checkpoint near the government compound, killing at least two people, fired mortar bombs into a park and attacked a US patrol. The attacks took place the day before the trial of Saddam Hussein was due to resume and as political parties prepared for talks on forming a coalition government the United States hopes will undermine support for a Sunni Arab insurgency.

O Takafumi Horie, the brash young CEO of internet firm Livedoor Co. who shook up corporate Japan with his bare-knuckled business tactics and flashy lifestyle, was arrested on suspicion of breaking securities laws. Prosecutors said Mr Horie and three other executives who were also arrested had sought to boost share prices by spreading false information, issuing new shares to "acquire" firms already under its control and then selling them for a profit to pad its books.

O Kuwait's succession crisis deepened amid a confrontation between the ailing new emir and parliament over his fitness to rule. The row over the new emir Sheikh Saad al-Abdulla al-Sabah, who is 76 and incapacitated by illness, touches on the principle of alternating power between the two rival branches of the ruling al-Sabah family.