The two-week drill ended on Friday and was held at the IAF Uvda Base near Eilat. The Italians arrived in Israel with the Eurofighter and the IAF participated with its F-16 and F-15 fighter jets. The exercise in Sardinia in November made worldwide headlines since it was held as Israeli politicians began to speak openly about the possibility of launching unilateral military action to stop Iran.

On the sidelines of the recent exercise, a number of officers from foreign air forces traveled to Uvda to watch the maneuvers and discuss potential future joint training sessions with the IAF. The IAF is planning on holding a large-scale international drill in Israel in 2013. Italian Air Force Brigadier General Enzo Vecciarelli said the drill was not connected to current events like a possible Israeli strike against Iran.

"The IAF is one of the best air forces in the world and we try to share knowledge with one another," Vecciarelli said. "We are here just for the training and it is not connected at all to Iran." Briadier General Hagai Topolansky, head of the IAF's Air Division, said Israel was looking to increase its training with foreign air forces and expressed hope that joint maneuvers would resume soon with Turkey. "We were friends for many years and I believe that we will be able to return to holding joint maneuvers and hope that the diplomatic conditions will allow that to happen," he said.

Nine hundred and 57 people were killed and 49 still missing, according to the national disaster agency, with most of the casualties in the cities of Cagayan de Oro and Iligan in the Mindanao region. Aquino held meetings with officials in the two cities worst hit by water, mud and logs that swept down mountains as residents in riverside and coastal villages slept in the early hours of Saturday.

"First priority is to relocate to areas that no longer pose a danger to them," Aquino said at a meeting with officials in Cagayan de Oro, as he vowed action to prevent another tragedy of the same magnitude. The disaster agency said more than 338,000 people in 13 provinces were affected by the disaster, with nearly 43,000 still in evacuation centres.

More than 10,000 houses were damaged by Typhoon Washi and the flash floods, of which nearly a third were totally ruined. Many schools, roads and bridges were badly damaged. Aquino's spokesman, Ricky Carandang, said the declaration of a national calamity would allow the government to gain access to more funds for relief and rehabilitation.

A proposal to lend 200 billion euros (168 billion pounds) to the IMF to enable it to bail out countries in trouble floundered after George Osborne told his fellow European finance ministers that Britain would not contribute its 25 billion pounds share. The chancellor's refusal, which had been widely expected, came as the European Central Bank warned that contagion from the debt crisis could afflict other eurozone countries and even spread across the globe. The central bank's financial stability review said tensions had now reached the "systemic crisis proportions" seen at the time of the Lehman Brothers collapse in 2008 - partly because of the failure of politicians to act in time.

Mario Draghi, the ECB president, told MEPs in Brussels that pressure in bond markets in the first quarter would be "really very, very significant, if not unprecedented" as hundreds of billions in debt came up for renewal. Germany had earlier offered Britain an olive branch, with its foreign minister, Guido Westerwelle, insisting that Europe did not have a secret plan to undermine the City of London. But, even as he was speaking, EU finance ministers were holding a fractious conference call during which Osborne indicated he would only countenance extending IMF facilities in a more global G20 setting. The UK could have, at most, given 10 billion pounds rather than the 25 billion pounds bandied about in Brussels.

After the call, Brussels announced that only 150 billion euros had been pledged for the IMF, all from eurozone members. In Beijing the IMF's former managing director, Dominique Strauss-Kahn, castigated the euro area's leaders for their poor leadership and said the zone had only a few weeks to provide solutions. Yet another crisis summit has already been pencilled in for late January. Draghi told the European parliament's economic committee that 230 billion euros of bank bonds, up to 300 billion euros of sovereign bonds and more than 200 billion euros of collateralised debt obligations will all become due in the first three months of 2012.

And what for? All this upheaval for a mess of pottage, a flim-flam treaty? The deal is not a "lousy compromise", said Angela Merkel. Well, actually that is exactly what it is for eurozone politicians searching for a breakthrough.

The Treaty proposals evade the core issue. Did France and Germany really have to cause this rift by throwing in an assault on the City that has precious little do with the EMU crisis? Yes, I suppose they did. Given that Merkozy cannot bring themselves to accept that Europe's debacle stems from the euro itself, from a 30 per cent currency misalignment between from North and South, and from an over-leveraged 23 trillion euros banking bubble that German, French, Dutch, Belgian regulators allowed to happen... given that, yes, I suppose they have to find a scapegoat.

They have to whip up a witchhunt against somebody, so why not Anglo-Saxon bankers? Nasty reflexes are at work. German and French politicians in particular should be very careful about inciting populist hatred against a group that makes such easy prey. We have been there before. No doubt these dramatic events will be uncomfortable for Britain, but this will all be swept away by bigger events before long. The Europols have not begun to work out a viable solution to their deformed and unworkable currency union, and perhaps no such solution exists. The system will lurch from crisis to crisis until it blows up in acrimony.

It is being presented as treachery, Anglo-Saxon perfidy, and the naked pursuit of national self-interest. Let me just point out:

1) The UK never agreed to such a commitment in the first place. The line was written into the December 9 summit communique in an attempt to bounce Britain into handing over the money.

2) The UK does not consider the rescue machinery to be remotely credible as constructed.

3) The eurozone has the means to tackle its own debt crisis, if it is willing to use them. These include fiscal pooling and the mobilisation of the ECB.

As eurozone politicians never tire of reminding us, their aggregate debt levels are lower than those of the UK, US, or Japan. They are right. So get on with it and stop begging. Euroland is of course entitled not to deploy eurobonds or the ECB if these mean a) a breach of the German constitution b) violate the ECB's mandate. But that is entirely their choice. Both the Grundgesetz and the ECB mandate can be changed. It was EMU members who created this dysfunctional currency. They are now trying to shift the consequences of their error onto others rather than taking the minimum steps necessary to fix the problem at root. If they are unwilling to save EMU by serious action - ie fiscal union - they should organize an orderly break-up.

4) The UK is willing to back more funds for the IMF, but only in line with our IMF quota and proportionate to other members around the world.

5) the UK budget deficit is dangerously high, again as critics never tire of pointing out. Eurolanders want it both ways. They bask in their fiscal superiority, yet they demand an external rescue. Excuse us benighted Little Englanders if we cannot quite see things their way.

6) The eurozone rescue does not in any case deal with the cause of the crisis, which is the 30 per cent intra-EMU currency misalignment between North and South.

It merely perpetuates a deformed system that is draining the lifeblood out of half Europe. I always feared that Britain would somehow be blamed for the demise of monetary union. My nightmare is coming true.

In a hard hitting Financial Stability Review, the ECB said the "risks to euro area financial stability increased considerably in the second half of 2011". It said "positive market responses" to European summit agreements had been "short-lived - indeed, a bumpy ratification process appears to have contributed to additional market uncertainties."

As European leaders - minus the UK - stumbled towards extending 150 billion euros (125 billion pounds) of extra credit lines to the International Monetary Fund (IMF), the report demanded "bold and decisive action both within and outside the euro area." It said that "swift and effective implementation" of the December 9 Brussels agreement was "pivotal... to curtailing the cycle of risk intensification in the euro area that characterised the latter half of 2011."

But the ECB's own role is less pivotal apparently. Mario Draghi stuck to his usual script in a speech to the European Parliament and insisted the bank would not intervene. The European Treaty "forbids monetary union," he said. "Losing credibility for the central bank is not going to do any good to market confidence."

Britain was unapologetic about refusing to contribute more to the IMF. "We were clear that we would not be making a contribution," a Treasury source told reporters. Wolfgang Schauble, the German finance minister, admitted there was "no chance" of the US increasing its contribution to the IMF either. Instead, Mr Draghi, who said markets should pay less attention to credit rating agencies, backed fiscal union and austerity measures.

But Angela Merkel seems to be standing against the whole eurozone, once again rejecting collective borrowing through Eurobonds. "When Angela Merkel says no to Eurobonds, this means nothing other than no to the euro," Michael Mross told RT. "Because you don't have to be an economist to know that a common currency cannot work without a common bond market."

"If you want to have a common currency, you have to have one single rulership in Europe," Mross added. "But nobody wants it." Michael Mross believes that Merkel's idea is to let euro die by itself. "Because of the fact that Germany is not permitted to pull out of the euro, Angela Merkel says 'we don't want Eurobonds.' And without Eurobonds the euro will not work," he explained.

Mross however agrees that the Eurobonds will only trigger the process of transferring more money from Germany to other European countries.

He also says that it is too late for the debt-hit countries to do their "housework" in order to keep their economies in good shape. "Every week we have a new emergency meeting, every week we have a new summit, every week we have new hopes, and every week nothing happens," he said.

"President Obama is acting on a British geopolitical plan to force a confrontation with Russia and China, a military confrontation of which Syrian and Iran would nearly be the ignition point," Freeman explained. "But the real goal is a war to stop the progress that Russia and China are engulfed in." Lawrence Freeman says that the International Criminal Court is being used as an instrument to carry out regime change with a smoke screen of human rights protection.

"The Russians and the Chinese are seeing this played out again and they are beginning to respond," he said. "Especially the Russians, they are responding militarily by sending the Kuznetsov aircraft carrier to the Syrian borders." It is a risky game, Freeman admits, but he thinks that Russians are aware of the danger of what could happen if they do not do it. "This could result - and I think the Russians and the Chinese are aware of this - this could result in World War III," he said. "So this is extremely dangerous, and measures have to be taken now to stop these policies by President Obama and the British."

Political analyst Marcus Papadopoulos agrees that Russia will not allow the situation in Syria to end up as it did in Libya. "The difference between Syria and Libya is the Russian factor," he told RT. "Russia has made it very clear that what happened in Libya will not happen in Syria and they've already vetoed a resolution at this Security Council, so of course there's going to be a lot more talk by the UN of what can be done but I think the Russian factor will prove to be a critical one".

He also voiced his opinion on how to resolve the present crisis. "What needs to happen is that the international community needs to act as a mediator between the Syrian government and the opposition parties," he said. "And unfortunately it's not helping - how the American, British and French governments are demonizing President Assad and they're taking the side of the Syrian opposition."

A closer look at the fine print, however, revealed that the 27 heads of state and government really only emerged from the summit with one concrete pledge aimed at dampening the most immediate effects of the debt crisis currently battering Europe. They vowed to loan up to 200 billion euros ($260 billion) to the International Monetary Fund so that the IMF could step up its aid to European countries in need. Now, though, with Germany's central bank showing increasing doubts about the fund and others demonstrating an unwillingness to participate, even that measure may now be in doubt.

Bundesbank head Jens Weidmann has insisted that before Germany sends its 45 billion euros share to the IMF, it needs assurances that other fund members outside of Europe are also willing to help out. Russia indicated its willingness to play along on Thursday. There are indications, however, that the United States will not help out. According to Bloomberg, Federal Reserve Chairman Ben Bernanke told Senate Republicans on Wednesday that the Fed would not devote more money to the IMF. US President Barack Obama has also said that the IMF has sufficient resources.

Canada too has shown no interest in the IMF plan. And Japan has insisted that Europe do more on its own. But there are problems in Europe too. British Prime Minister David Cameron on Wednesday made it clear that his country would only contribute 10 billion euros, far lower than the 30 billion euros EU leaders had expected, according to the Financial Times. The Czech Republic, for its part, has said it will chip in its share of 3.5 billion euros if all EU countries participate. Furthermore, it wants to take its time to thoroughly examine the plan - making next Monday's envisioned deadline for collecting European funds look increasingly unrealistic.

Still, it is Germany's central bank which is causing the most consternation. Weidmann has said that, despite the Bundesbank's independence, he would like parliamentary backing for the measure. Furthermore, he is against earmarking the proposed 200 billion euros IMF fund solely for European use, saying it should be used to strengthen the IMF as a whole.

And it has become increasingly clear that new ECB head Mario Draghi has become a convert. "I will never be tired of saying that the first response ought to emanate from the country," Draghi said during a Thursday speech he held in Berlin, his most recent indication that the ECB seeks to avoid becoming Europe's lender of last resort. "There is no external savior for a country that doesn't want to save itself." At the same time, he also urged European policy makers to hurry up. "The crisis has not ended yet," Draghi said. "It is now important not to lose momentum and to swiftly implement all those decisions that have been taken to put the euro area economy back on course."

As part of the accelerating, high-stakes diplomacy, Reuters has learned, the United States is considering the transfer of an unspecified number of Taliban prisoners from the Guantanamo Bay military prison into Afghan government custody. It has asked representatives of the Taliban to match that confidence-building measure with some of their own. Those could include a denunciation of international terrorism and a public willingness to enter formal political talks with the government headed by Afghan President Hamid Karzai.

The officials acknowledged that the Afghanistan diplomacy, which has reached a delicate stage in recent weeks, remains a long shot. Among the complications: US troops are drawing down and will be mostly gone by the end of 2014, potentially reducing the incentive for the Taliban to negotiate. Still, the senior officials, all of whom insisted on anonymity to share new details of the mostly secret effort, suggested it has been a much larger piece of President Barack Obama's Afghanistan policy than is publicly known.

US officials have held about half a dozen meetings with their insurgent contacts, mostly in Germany and Doha with representatives of Mullah Omar, leader of the Taliban's Quetta Shura, the officials said. The stakes in the diplomatic effort could not be higher. Failure would likely condemn Afghanistan to continued conflict, perhaps even civil war, after NATO troops finish turning security over to Karzai's weak government by the end of 2014. Success would mean a political end to the war and the possibility that parts of the Taliban - some hardliners seem likely to reject the talks - could be reconciled.

The effort is now at a pivot point.

"I think the military is very frightened of the prospect of an Egypt that would be led by Islamist political parties," Lappin said. "They are worried about security. They are worried about the economy, what this could do to tourism." Lappin believes that Egypt's military rulers are also very reluctant to allow change as they have been in power for many years, since the 1950s. "I think they are very reluctant to let go of that power," he said. "So I think it's going to be unpredictable, violent in some cases, and it's also going to damage Egypt's ability to maintain law and order on its streets."

Yaakov Lappin is wary about calling what has happened in Egypt a revolution because the elites, which are the military, are still in power in Egypt. "I don't think there actually has been a revolution yet," he said. "I think that what's happened is that the figurehead of the military regime has been deposed very dramatically. Certainly that was a hugely significant event, it was an earthquake."

Egypt has seen major changes, and changes will continue to happen, but this is not a revolution until the military is in power according to Lappin. "Until then I think the two sides are stuck in their current positions, fighting it out through a range of ways," he said. "And one of these ways is street battles between the military security forces and the people."

Those on interest-only mortgages, who do not pay back any of the value of the property but must clear it in full at the end of the term, could be worst hit. An estimated 1.5 million such loans, worth 120 billion pounds, will become due for repayment over the next 10 years, which could hit lenders and homeowners.

Although customers usually need to show they will be able to repay the money once the mortgage has finished, lenders were less strict about this during the boom years of 2002 to 2007. By 2007, a third of all mortgages were interest only, but 75 per cent of these had no reported repayment vehicle at all, meaning the customers did not have to prove they could pay back the loan

Today the regulator publishes the Mortgage Market Review, aimed at shaking up the lending market to try to prevent a return of irresponsible lending and to stop borrower "nightmares" where people face losing their homes because they were granted loans that will be unaffordable when rates go up. It estimated that up to 15 per cent of people who took out mortgages between 2005 and 2010 could now be in negative equity, with many others "trapped" into paying a high interest rate by their current lender because they were unable to go elsewhere. The Bank of England recently found that 15.5 per cent of people with a mortgage were constantly struggling with repayments or falling behind

He added, "A (nuclear) disaster befalling one of us would affect us all." The Sunni Muslim kingdom last summer said it would build 16 nuclear reactors for energy, but Faisal's remarks were the first indication, at least in public, that Saudi Arabia may acquire nuclear weapons. Israel has maintained a policy of "nuclear ambiguity," meaning it does not confirm or deny assumptions that it has nuclear weapons, perhaps as many as several hundred.

However, Saudi Arabia's biggest worry is Iran, run by a Shi'ite Muslim regime that openly says it wants to head a new Islamic empire in the Middle East. The Islamic Republic is on a collision course with the West - and Shi'ite Muslim Arab countries - as it proceeds towards the capability of both manufacturing and delivering a nuclear weapon. Saudi Arabia focused on peaceful use of nuclear energy at the energy conference in the oil-rich monarchy. "Once our nuclear project is complete and we have satisfied the kingdom's demand for electricity," Saudi Arabia plans to export electricity, said Khalid Al-Sulaiman, vice president of renewable energy at King Abdullah City.

As the world looks for alternative energy sources, Saudi Arabia, which produces 20 percent of the world's crude oil, is looking to a future of not being dependent on oil to keep its economy strong.

On Thursday, the British Daily Mail newspaper said that an Israeli attack on Iran's nuclear facilities could come as soon as December 25, the day the Christian world celebrates Christmas. The paper quoted a senior Foreign Office official as saying that "'We're expecting something as early as Christmas, or very early in the new year." Israel, the official said, would not wait for Western approval for such an attack, if it felt that Iran was truly at the point of no return.

The officials said that the US would most likely support Israel, given that President Barack Obama is desperate not to lose Jewish support in next year's presidential election. Reports last week said that the US was gearing up its own plans to militarily halt Iran's nuclear program, and that Britain was cooperating. The Foreign Office official did not confirm that report in his remarks Thursday, but did say that "of course we are not in favor of Iran developing a bomb." With that, he said, Britain did not believe that Iran would use a bomb, even if they did develop a one. "The bigger concern is it will be impossible to stop Saudi Arabia and Turkey from developing their own weapons," the source added.

Considering that Iran does not celebrate Christmas, however, it was unclear why that date would be preferred by Israel for an attack against the Shi'ite Muslim country, and the Daily Mail story did not address this point.

The Korea Times quoted an unnamed source as saying that the scientists and missile engineers are working at the Natanz and Qom sites, among others. Iran is operating a uranium enrichment plant at Natanz. Despite Iranian President Mahmoud Ahmadinejad's denials, Israel and Western powers assume the objective of the enrichment plant is to use the uranium to build a nuclear weapon, while engineers try to build a missile capable of delivering it.

North Korea has an enrichment plant in its own country and has conducted nuclear tests. Both it and Iran are under United Nations sanctions for not cooperating with International Atomic Energy Agency (IAEA) inspectors. "The source with access to intelligence on the years-long weapons collaboration between Pyongyang and Tehran said the North Koreans are visiting Iran via third countries and many of them are being rotated every three to six months." the newspaper reported.

"The North Korean experts are from the country's so-called Room 99, which is directly supervised by the North's ruling Workers' Party Munitions Industry Department," it added. "The room, which can be translated as office or bureau, is widely believed to be engaged in exports of weapons and military technology."