World Highlights

¤ Nepal's Parliament unanimously approved a proposal by the new Prime Minister to hold elections for a special assembly to draw up a new Constitution that will decide the future of the monarchy.

The 205-member chamber took the decision at the end of a four-hour debate on the proposal, days after unpopular King Gyanendra returned power to political parties, but it did not set a date for the vote.

¤ Iran renewed its defiant stance, vowing to ignore a likely UN Security Council resolution against its atomic programme and to strike back if it came under military attack.

UN ambassadors from the United States, Britain and France are expected to introduce a resolution this week to legally oblige Iran to comply with the Council's demands, hitherto rebuffed by Tehran, that it halt all uranium enrichment work.

¤ Israel's acting Prime Minister Ehud Olmert was on the verge of signing up enough partners for a coalition government after a key faction agreed in principle to join up, political sources said.

They said Shas, an ultra-religious Jewish party, had drafted a coalition deal with Mr Olmert's centrist Kadima which awaited the approval of Shas's ruling rabbis. With Shas on board, Mr Olmert would control 67 of Parliament's 120 seats.

¤ Palestinian Prime Minister Ismail Haniyeh said he expected the funding crisis that has crippled his administration and prevented employees' salaries being paid for more than a month to be over "very, very soon".

Mr Haniyeh, a leader of the militant group Hamas, which heads the Palestinian government, gave no details on how the crunch would be resolved, but it is expected to involve payments being made directly to Palestinian Authority employees from abroad.

¤ A kidnapped Indian telecommunications engineer was found beheaded in southern Afghanistan and the Taliban said they had killed him.

The man, identified by India as K. Suryanarayan, 41, was kidnapped with his driver after gunmen stopped their vehicle on Friday. Taliban insurgents said on Saturday they had taken both men and vowed to kill the Indian unless New Delhi withdrew all its workers from Afghanistan within 24 hours.

¤ Sri Lanka's Tamil Tigers said they raided camps belonging to renegade ex-rebels, killing 20, while the government and rebels traded artillery fire in the northeast as war fears remained high.

The past three weeks have been the bloodiest since a 2002 ceasefire with more than 120 people, possibly many more, killed in suspected Tiger attacks on the military, ethnic riots, government air strikes and murders of civilians on both sides.