World Highlights

¤ Israeli aircraft and tanks killed seven Palestinians in sporadic clashes with militants across northern Gaza, following the bloodiest day of fighting with gunmen since 2004. The governing Hamas movement warned that Thursday's violence in which 20 Palestinians and one Israel soldier were killed had hurt efforts to free an abducted Israeli corporal and said the Jewish state would "pay the price for every drop of blood".

¤ The EU said talks with Iran on a package of incentives to end a nuclear standoff were constructive and laid the basis for a fuller response by Tehran at a second meeting due next week.

¤ North Korea lashed out at Japan for imposing sanctions after it test-fired missiles this week, but the US said even China, the communist state's closest ally, considered the launch a provocative act. South Korea however announced it would hold ministerial talks with the North as scheduled next week, the first high-level contact with Pyongyang since the tests.

¤ A plot to bomb New York's Holland Tunnel in an effort to flood the Wall Street financial district has been uncovered by the FBI, New York's Daily News reported and Lebanon said it had arrested one of the plotters. "Lebanese security authorities have arrested Amir al-Andalousi who is a suspect in a plot to bomb a tunnel in New York," a government source in Beirut told Reuters.

¤ Attacks on mosques after Friday prayers killed 11 people and 40 were killed or wounded in a Baghdad raid on Shi'ite fighters that the US military said netted a top militant wanted for kidnap and murder. The attacks on Sunni mosques and a car bomb that killed at least six after Shi'ite prayers, dealt new blows to Prime Minister Nuri al-Maliki's attempts to end communal bloodshed that has pitched Iraq towards all-out civil war.