Like Israel, the United States has said it considers military force a last resort to prevent Iran using its uranium enrichment to make a bomb. Iran insists its nuclear program is for purely civilian purposes. "It would be preferable to resolve this diplomatically and through the use of pressure than to use military force," Ambassador Dan Shapiro said in remarks about Iran aired by Israel's Army Radio on Thursday.

"But that doesn't mean that option is not fully available - not just available, but it's ready. The necessary planning has been done to ensure that it's ready," said Shapiro, who the radio station said had spoken on Tuesday. Experts say that within a few months, much of Iran's nuclear program will have been moved deep underground beneath the Fordow mountain, making a successful military strike much more difficult.

As the deadline for a decision draws nearer, the public pronouncements of Israel's top officials and military have changed. After hawkish warnings about a possible strike earlier this year, their language of late has been more guarded and clues to their intentions more difficult to discern. "The top of the government has gone into lockdown," one official said. "Nobody is saying anything publicly. That in itself tells you a lot about where things stand."

At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn’t you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible.

And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe.

A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks. If Greece is allowed to leave the euro, that will be a signal that other countries will eventually be allowed to leave as well. Nobody in their right mind would want their euros stuck in Spanish or Italian banks if those countries end up converting back to national currencies. Fear is a powerful motivator. If Greece converts their euros back to drachmas, that will be a clear signal that all euros are not created equally. The race to move money into German banks will accelerate dramatically.

Mr Cameron’s intervention comes after Sir Mervyn King, the Governor of the Bank of England, expressed his frustration at European leaders who were “just kicking the can down the road”. The alarm has arisen amid political chaos in Greece and signs of an increasing divergence between Germany and France over austerity measures.

Mr Cameron today will build on a warning he made during Prime Minister’s Questions yesterday, when he said eurozone leaders could not put off a decision on which path to take. He said: “It either has to make up or it is looking at a potential break-up. That’s the choice they have to make and it is a choice they can’t long put off.”

In a speech in Manchester today, Mr Cameron will say that Europe needs a committed, stable eurozone with an effective financial firewall, well-regulated banks and a supportive monetary policy, “or WE ARE IN UNCHARTED TERRITORY which carries huge risks for everybody”.

Queen Sofia had earlier accepted the invite to Friday's celebration at Windsor Castle, but in a last minute snub by Spain's government she has been told not to attend because it would be "inappropriate in the current circumstances". Last week Spain's foreign ministry issued a formal complaint to Britain's Ambassador in Madrid over the planned visit in June of The Earl and Countess of Wessex to the disputed territory of Gibraltar to mark the Queen's Diamond Jubilee year.

The Spanish government expressed its "upset and concern" over the visit by the Queen's youngest son and his wife to the territory, a tiny peninsula sitting at Spain's southwestern corner over which it still claims sovereignty. At the time however, it seemed unlikely to take the matter further. In fact, when asked if Queen Sofia would still be attending the Windsor Castle event, Jose Garcia-Margallo, Spain's foreign minister confirmed she would be free to do so in a "private capacity".

However, in a sudden U-turn and with less than 48 hours until the lunch, Spain's royal household disclosed that the government had ordered Queen Sofia to reject the invitation to Windsor Castle, where kings and queens from around the world will convene to celebrate the Queen's 60 years on the throne.

Spain ceded Gibraltar to Britain in 1713 under the Treaty of Utrecht and it is recognised as a British Overseas Territory. But Spain has long argued that it should be returned to Spanish sovereignty and tensions have mounted since the conservative government of Prime Minister Mariano Rajoy came to power last December. Spain's new government has abandoned tripartite talks over areas of co-operation between Spain, Britain and Gibraltar and instead formally asked Britain for bilateral talks over its sovereignty.

On the one hand, the additional losses are not a surprise since Jamie Dimon, JPMorgan’s CEO, warned that the situation was volatile and that THE $2 BILLION OF TRADING LOSSES originally suffered could balloon and get worse before they get better. But the New York Times report will likely cause even more uncertainty in the market because of the speed with which the trading losses appear to have increased.

These concerns will have to do with things like whether the bank will need to cut its divided. On the surface, it seems like disclosure of the trading losses, which were partly the result of a strategy executed by a JPMorgan trader known as the London Whale, has undermined the bank’s bet even further.

Moody's pinned the downgrade on a weakening operating environment made worse by Prime Minister Mario Monti's tough austerity cure. 'Moody's decision is an assault against Italy, its companies, its families,' said Italian banking lobby ABI. 'Once more rating agencies turn out to be a destabilising factor for financial markets with their partial and contradictory statements.'

Big business lobby chief Emma Marcegalia said she was concerned by such an 'attack against Italy.' Moody's downgrade came on the back of its February cut of Italy's sovereign rating to A3 from A2 and makes the ratings of Italian banks among the weakest in western Europe.

While large groups such as Intesa Sanpaolo and UniCredit have enough international reach and capital to absorb the hit, this is more problematic for smaller lenders such as Banca Monte dei Paschi di Siena, which now stands just above 'junk' or non-investment grade status.

Non-Hispanic whites accounted for 49.6 percent of all births in the 12-month period that ended last July, according to Census Bureau data made public on Thursday, while minorities — including Hispanics, blacks, Asians and those of mixed race — reached 50.4 percent, representing a majority for the first time in the country’s history.

Such a turn has been long expected, but no one was certain when the moment would arrive — signaling a milestone for a nation whose government was founded by white Europeans and has wrestled mightily with issues of race, from the days of slavery, through a civil war, bitter civil rights battles and, most recently, highly charged debates over efforts to restrict immigration.

While over all, whites will remain a majority for some time, the fact that a younger generation is being born in which minorities are the majority has broad implications for the country’s economy, its political life and its identity. “This is an important tipping point,” said William H Frey, the senior demographer at the Brookings Institution, describing the shift as a “transformation from a mostly white baby boomer culture to the more globalized multiethnic country that we are becoming.”

The comments were made at a conference in Tehran in honor of Nakba Day – the day of catastrophe – which is what the Arabs call the English date of May 15, when the State of Israel was re-established with a declaration of independence in 1948. In a brief address at the end of the conference, the official, Hossein Shiekholeslam said, “In success of a revolution three major factors need to play effective roles, and they are the people, the leadership, and the school of thought, or ideology.”

He added, “If we wish success for the Palestinians, the existence of these three factors is necessary, as they did exist in the case of the victory of the Islamic Revolution of Iran.” Sheikholeslam said that “In near future the Islamic Awakening movement would also swallow the Zionist regime.”

The first speaker at the conference, according to IRNA, was the PA Ambassador in Tehran, Salah Zawawi, who said that the one and only way to soothe the Arabs’ pains and agony is the annihilation of the Zionist regime. “So long as the entire Palestinian groups have not united and each group is merely heeding its own factional interests the problems of this detached part of the Islamic world would never be solved,” he added.

Greeks are withdrawing euros afraid of the prospect of rapid devaluation if the country leaves the single currency, minutes of President Karolos Papoulias's meetings with political leaders showed. Greece's warring parties have refused to form a viable coalition, triggering new elections that could strengthen the hand of opponents of Greece's EU bailout.

Central bank head George Provopoulos said savers withdrew at least €700 million ($894 million) on Monday, the president told party chiefs. "Mr Provopoulos told me there was no panic, but there was great fear that could develop into a panic," the minutes quoted the president as saying.

"Withdrawals and outflows by 4:00 pm when I called him exceeded €600 million and reached €700 million," he said. "He expects total outflows of about €800 million, including conversions in German Bunds and other such things." The specter of Greece quitting the single currency sent the euro and European shares to a fresh four-month low on Wednesday and raised the yields on Spanish and Italian debt, reflecting the risk that other European countries will be hurt.

Sources at two Greek banks told Reuters that withdrawals on Tuesday had taken place at about the same rate as Monday and the president's numbers appeared to be broadly accurate. Greeks have been withdrawing funds from banks for years, and there has so far been no sign of queues at banks in Athens, but withdrawals at such a pace in two days are unusual.

As leaders in Athens accepted the need for a new general election to end a national stalemate, the International Monetary Fund said Europe’s leaders should prepare for the possibility of a Greek departure from the single currency. Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly.

The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said. Raising tensions still further, Germany warned Greek voters that the wrong result in next month’s election will force their country out of the single currency.

Greece’s president warned, perhaps most alarmingly, that its banks risk running out of money, posing a “threat to our national existence”. The escalating turmoil sharpened fears in financial markets, with European shares and the euro itself falling again. Following this month’s inconclusive election, Greek parties yesterday failed again to agree a new government. A new election, most likely to be held in mid-June, could see more gains for parties that want to reject the austerity measures that are a condition of international efforts to bail out the debt-crippled state.

Wolfgang Schauble, the German finance minister, piled further pressure on Greek voters, warning that unless they deliver a government that honours the terms of the bail-out, he said, the country will have to leave the euro.

The turmoil in Athens sent shock waves around other troubled members of the 17-nation European single currency area. The euro slipped below $1.28, world stocks slid and Spanish and Italian bond yields rose above the danger level of 6 percent as investors scurried for shelter in safe haven German Bunds. The tremors from Greece, compounding worries about Spain's debt-laden banking system, ended any honeymoon for new French President Francois Hollande, thrusting the growing risks to the euro zone to the top of the agenda for his first ever meeting with German Chancellor Angela Merkel in Berlin the same evening.

The leaders of the Franco-German alliance that sits at the heart of the single currency project said after their talks that both wanted Greece to remain in the euro zone and were ready to work to promote ideas for economic growth that could help achieve that - though differences remain over what can be done. After a meeting at which both stressed a commitment to the political ideal of the euro, despite coming from opposing sides of Europe's left-right party divide, Hollande told a news conference: "I hope that we can say to the Greeks that Europe is ready to add measures to help growth and support economic activity so that there is a return to growth in Greece."

"On growth, the method that we agreed is putting all ideas and all proposals on the table and seeing what legal means exist to put them into effect," added the French leader, who landed in Berlin late after lightning struck his presidential jet. Earlier, in his inaugural address, the Socialist president called for a European pact to revive growth and temper the conservative Merkel's preference for Europe-wide austerity, seeking to change the direction of euro zone economic policy.

Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month. Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.

Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery. But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.

"There is a bit of schizophrenia in our society right now. People want to stay in Europe - have the cake - but they also want to eat it - by attacking the creditors," said Theodore Couloumbis at Athens-based think-tank ELIAMEP. "Much depends on whether the Greek people in this repeat election are going to vote with anger and passion or if they will cool off, reflect and see in effect what the real choices are. The choice is between bad and worse."

Bankia, Spain's fourth biggest bank, is the first in line for state aid. Rodrigo Rato, chairman and former IMF managing director, swiftly resigned after it was disclosed the finance ministry was preparing to refinance the bank and introduce legislation to protect the balance sheets of others.

Spain, which also signalled it could dock its only aircraft carrier to save €30 million a year, is already struggling to cope with an austerity drive that has pushed the jobless total up to nearly 25 per cent of the workforce.

Mr Rajoy insisted that any bank bail-out would not compromise the tough targets set by Brussels to reduce the budget deficit.

Peter Kenny, managing director at Knight Capital, said Spain's action was positive because "it's them taking ownership of their own issues".

“What’s at stake isn’t just the next Greek government,” said Guido Westerwelle, Germany’s foreign minister. “What’s at stake is the Greek people’s commitment to Europe and the euro.”

“A second vote means Greece is edging closer to the point where it’s inevitable they have to exit the euro,” Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, said. “No other course of events is now likely.” As the Greek president, Karolos Papoulias, admitted defeat on coalition talks, Alexis Tsipras, leader of the radical Left-wing Syriza party which is leading the Greek polls, said he couldn’t “guarantee” the country would stay in the euro.

Global financial institutions have a €422 billion (£335.8 billion) exposure to Greek debt, including state, household and corporate debt, according to the latest figures from the International Monetary Fund. The Institute of International Finance has estimated that the global cost of a Greek exit could hit €1 trillion. When Argentina defaulted in 2001, foreign debtors lost around 70 per cent of their investments.

With the world's third largest debt after the US and Japan at €1.9 trillion (£1.18 trillion), it is big enough to bring the global financial system to its knees. It is also in the front line of contagion as the Greek crisis metastasizes. Yields on 10-year Italian debt jumped 16 points to 5.86 per cent on Tuesday after Italy's data agency said the country is sliding even into deeper recession, with GDP shrinking 0.8 per cent in the first quarter.

Output is now 6 per cent below its peak in 2008. Italy has been trapped in perma-slump for a decade, the only major state to suffer a fall in real per capita income since 2000. Rising anger has led to a spate of violent attacks by terrorist groups over recent weeks, all too like the traumatic 'years of lead' in the late 1970s. The government is mulling use of troops to protect targets after anarchists shot the head of Ansaldo Nucleare last week and hurled petrol bombs at tax offices.

The unelected government of Mario Monti is carrying out net fiscal tightening of 3.5 per cent of GDP this year even though Italy's budget is near primary surplus. This is three times the International Monetary Fund's "therapeutic" pace. All key measures of Italy's money supply have been contracting at 1930s rates over the last six months. Italy's former premier Romano Prodi said the EU risks instant contagion to Spain, Italy, and France if Greece leaves. "The whole house of cards will come down", he said

Angelo Drusiani from Banca Albertini said the only way to avert catstrophe is to convert the European Central Bank into a lender of last resort. Otherwise Italy faces "massive devaluation, three to five years of hyperinflation, and unbearable unemployment."