World Highlights

• US and Iraqi forces fought Shi'ite militiamen in Baghdad during a raid on a suspected death squad, in the latest bid to stem sectarian violence that has pushed the country to the brink of civil war. A police source said two people were killed and 18 wounded during two hours of pre-dawn fighting in Sadr City, a stronghold of radical Shi'ite cleric Moqtada al-Sadr, whose supporters are part of the ruling Shi'ite coalition.

• Sri Lanka's army vowed to push on with a campaign to wrest control of an eastern water supply from Tamil Tigers, just hours after the rebels warned its continued attacks were a declaration of war. The Liberation Tigers of Tamil Eelam (LTTE) offered to end a fortnight-long blockade of water to government land to defuse the heaviest fighting since a 2002 ceasefire, but the army replied with heavy artillery and multi-barrel rockets.

• A Chinese government official has been executed for spying for Taiwan, and thousands of civil servants have been shown an "educational" video of the case as a warning, two government sources said. China and Taiwan have been spying on each other since their split at the end of the Chinese civil war in 1949 but trade and tourism have blossomed since the late 1980s.

• China urged Japan to stop visits by its leaders to the Yasukuni Shrine for war dead, as speculation grew that Prime Minister Junichiro Koizumi would make a pilgrimage next week on the anniversary of Japan's World War Two surrender. South Korea, which also suffered under Japanese military aggression, is expected to make a similar demand this week when its foreign minister, Ban Ki-moon, visits Tokyo.

• The Philippine government evacuated thousands of villagers from around the Southeast Asian country's most active volcano after warning the rumbling mountain could explode at any time. Mount Mayon, in the central province of Albay, has been spewing ash and boulders the size of cars since July, pushing a four-storey-high wall of lava more than 6 kilometres down its southeastern slope.

• Nepal's Maoists said that peace talks with the government were close to breaking down over the contentious questions of the rebels surrendering their arms and the future of the monarchy. The Maoists and the government agreed a ceasefire in May after Nepal's King Gyanendra was forced by weeks of street protests to cede power to a multi-party administration.

• Nearly 200 people are dead and hundreds more missing after floods swept through an eastern Ethiopian town over the weekend. The Dechatu river burst its banks and flooded the town of Dire Dawa on Saturday night, drowning and trapping people in the sandy debris as they slept. The death toll has been mounting alongside a police recovery operation using bulldozers.

• Aid workers in Congo say displaced civilians are dying because food supplies are running out in a camp in the violent northeast of the vast central African country and new shipments are weeks away.