World Highlights

¤ Warlords driven out of Mogadishu by an Islamist militia are advancing back towards the Somali capital from their last stronghold of Jowhar, residents said. The residents, reached by telephone, told Reuters the Islamists were pulling back towards the town of Balad, which fell on Sunday and is on the road to the capital.

¤ Nato vowed to nearly double its peacekeeping force in Afghanistan in spite of growing violence, but urged donors to do more to rebuild the country and the government to stamp out corruption.

The 26-nation alliance has approved plans to increase troops to about 17,000 from 9,000 and expand into the insurgent-troubled south by late next month, taking it into what could be its toughest ground combat since its creation in 1949.

¤ Palestinian President Mahmoud Abbas will hold a referendum on July 31 on a Palestinian statehood proposal that implicitly recognises Israel, after the Hamas government rejected the plan, officials said yesterday.

Mr Abbas will issue a decree tomorrow formally announcing the date, the officials close to the president told Reuters.

¤ The White House boosted its estimate of US economic growth this year but offered a more pessimistic view of inflation in new forecasts released. The Bush administration lifted its forecast for gross domestic product this year to 3.6 per cent, up from 3.4 per cent in its projection released in December.

¤ Europe's trade chief urged China to open its economy to foreign investment and crack down on piracy or risk seeing its soaring exports to the European Union hurt by protectionism.

EU Trade Commissioner Peter Mandelson said many Europeans were being "tempted by the siren song of protectionism" as China racked up a trade surplus to the 25-nation bloc of more than €100 billion last year.

¤ Five South Korean gas workers taken hostage in Nigeria were freed in good health after a plea by the jailed militant leader in whose name they were abducted 40 hours earlier.

Dozens of heavily armed rebels staged a bloody raid on a natural gas plant in the Niger Delta on Wednesday. They had demanded the release of jailed leader Mujahid Dokubo-Asari in exchange for the Koreans' freedom.

¤ Malaysia's deputy prime minister rallied behind his embattled boss after former premier Mahathir Mohamad made a stinging attack on his successor and sparked some concerns over political stability. Deputy Prime Minister Najib Razak, seen as the only potential challenger for the leadership, backed Prime Minister Abdullah Ahmad Badawi in comments published alongside Mr Mahathir's barbed remarks on the front pages of local newspapers.