While some of the latest damage reflects forced selling of Portuguese debt after Standard & Poor's cut the country's credit rating to junk status last Friday, there are deeper worries that sharp fiscal cuts by the free-market government of Pedro Passos Coelho may prove self-defeating. Mr Passos Coelho has been praised by EU leaders and the International Monetary Fund for delivering on austerity, but the risk is that severe tightening - without offsetting monetary and exchange stimulus - will push Portugal into the same downward spiral that has already engulfed Greece.

Jurgen Michels, Europe economist at Citigroup, said Portugal's economy will contract by a further 5.8 per cent this year and by 3.7 per cent in 2013, a far sharper decline than official forecasts. The peak-to-trough collapse would be 13 per cent, a full-fledged depression. "As this gets worse it is going to be extremely difficult to go ahead with more austerity measures: political contagion will start to come through," he said.

While all eyes are on Greece, it is the slower drama in Portugal that will ultimately determine the fate of the eurozone.

The migrants, who can claim unemployment, housing and incapacity benefit, are costing taxpayers billions of pounds a year. In other countries, many would have had to return home after their visas expired or their employment ended. But Chris Bryant, shadow immigration minister, today blamed the Government and said the situation would only get worse due to lax border controls, rising migration and increasing unemployment. He said: "Tory ministers are resorting to rhetoric and misinformation to hide the reality of their failures on immigration and unemployment."

"Far from strengthening immigration control the Government is returning fewer illegal migrants and net migration has continued to increase. And at the same time increasing numbers of people born here and abroad are on out-of-work benefits because the government's failure on the economy has pushed unemployment up. Ministers should get a grip on rising unemployment and weaker border controls rather than trying to hide behind questionable figures which include people who have been British citizens for many years, and don't take account of British citizens claiming benefits abroad."

Lieutenant Commander of the Iranian Army's Self-Sufficiency Jihad Rear Admiral Farhad Amiri hailed the Iranian submarines as "the best electronic diesel vessels in the world, noiseless and able to easily evade detection as they are equipped with sonar-evading technology," the country's semi-state Fars news agency reported. The Iranian military official said the vessels can fire missiles and torpedoes simultaneously, underlining that the submarines' superiority was not just due to their arms and equipment, but also "the tactical issues are very important", given the geographical specifications of the waters surrounding the country.

A submarine of this type sitting on the seabed can easily target and hit an aircraft carrier traversing nearby regions, hinting at the US aircraft carriers deployed in the Persian Gulf. Ghadir submarines are equipped with cutting edge military and technological equipment and are capable of firing Hoot supercavitating rocket torpedoes, allegedly reverse-engineered from the Russian VA-111 Shkval. Most analysts agree that it is not a matter of if a war between the US and Iran will break out, but when. US Defense Secretary Leon Panetta said on Wednesday that America is "not making any special steps" to build-up for a possible military conflict with Iran because the US is already "fully prepared to deal with that situation."

Both sides are well prepared for a confrontation, and despite its relatively inferior military power in comparison with the US, Iran dominates the northern gulf and the Strait of Hormuz with its strategic geography. Besides submarines, Iran has enough domestically-produced smart munitions, light attack craft, mines and ballistic missiles to effectively counteract other military powers and strike vessels within its waters.

This is General Dempsey's first visit to the country since he was appointed chairman of the Joint Chiefs of Staff four months ago. He is scheduled to meet with Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak, military chief of staff Lieutenant General Benny Gantz and President Shimon Peres. The Iranian nuclear program is expected to be a top issue on the table, and Israeli officials involved in preparing for the meetings told AP they expected Dempsey to urge restraint as the US tries to rally additional international pressure on Iran.

Both the US and Israel insist Iran is building nuclear weapons - and maintain that such a program threatens both of them. However, they differ on what actions should be taken to prevent Iran from acquiring a nuclear weapon. Israel may be considering military strikes on Iran - which it has previously mentioned on several occasions - saying an attack could be used if other measures failed. While the US says military force is a possible option, it would only be a last resort, after talks and sanctions. And currently, the US views its existing economic sanctions as sufficient.

The toughening Iran issue could cast a shadow on Obama's re-election prospects this year if he gets caught in the middle of an Iran-Israeli conflict. Higher tensions could bring higher oil and gasoline prices, angering American consumers, while Republicans push the President to escalate action against Iran.

The diplomat called on Europeans not to act as America's client and instead to pursue their own interests in the conflict. Meanwhile, Iran's OPEC governor, Mohammad Ali Khatibi, said it would be "ECONOMIC SUICIDE" FOR EUROPE TO JOIN THE SANCTIONS AMID THE CRISIS. "Regarding the economic crisis in the eurozone, imposing any sanction on Iran's oil will push European countries into a deeper crisis," Khatibi said as quoted by Mehr news agency. "The European currency is already under pressure because of debt and financing problems facing some of its members."

Double-edged embargo - EUROPE IS A MAJOR IMPORTER OF IRANIAN OIL, the others being China, Japan, South Korea and India. Southern European countries like Italy, Spain and Greece buy some 13 per cent of all crude they consume from Iran. China, which is the largest buyer of Iranian oil, said last week it would not uphold any sanctions against the Islamic Republic unless they are imposed by the UN Security Council. India came up with a similar statement on Wednesday.

South Korea and Japan both voiced their readiness to boycott Iran's crude, but did not indicate when such a measure might come into force. Japan is particularly vulnerable to energy shortages after the devastating earthquake and tsunami which hit it last year, destroying the Fukushima power plant.

Philip Giraldi, an ex-CIA officer who is currently the executive director of the Council for the National Interest think-tank, believes Iran is buying time, basically saying: "There is a high level of belligerency right now, but if we buy time, possibly that will change. The resolve of the European powers to push on this Iranian nuclear issue is higher now," Giraldi explained. "But if there is a genuine threat to possibly raise oil prices through closing the Strait of Hormuz, then the Europeans who get quite a lot of this oil would begin to reconsider what they are doing."

In light of the West's announced withdrawal from Afghanistan, Pakistan's predominating military intends to tighten its grip over the country to enhance its influence in that neighboring country, according to rumors in Islamabad. The generals are also no longer willing to sit back and accept the continuous violation of Pakistani sovereignty by ambushes from US drones and NATO aerial attacks.

The country's military, which is already cooperating closely with China, could, in the long run, turn its back on the West and form an alliance with Beijing, according to speculations expressed in Berlin. Whereas the USA and the EU - particularly Germany - are insisting that violations of Pakistan's sovereignty be attenuated with conciliatory gestures, influential German politicians are warning against overstraining US operations in Pakistan. The cooperation should be intensified in the business and educational fields, otherwise it would not be possible to maintain long-term western influence in that country.

Last week, indications became more evident that in Pakistan a putsch may be in preparation. Following the Islamabad government's sharp public criticism, the army warned the government of "serious consequences," without elaborating further. The prime minister, from his side, then fired the state secretary in the defense ministry, a former general, who had served as the main liaison between the government and the military. "The military wants to get rid of the government," concluded an observer of the situation developing in the Pakistani capital.

A statement from the Vatican Information Service noted that the week is promoted by the World Council of Churches (WCC), a worldwide fellowship of 349 churches seeking unity, common witness and Christian service. The Catholic Church participates in this ecumenical initiative, despite not being a member of the WCC.

This year's theme comes from St Paul's First Letter to the Corinthians, which promises the transformation of human life - with all its apparent dimensions of "triumph" and "defeat" - through the victory of Christ's resurrection. After leading the Angelus on Sunday, Benedict XVI invited the faithful, "as individuals and in communities, to participate spiritually, and where possible practically, in the Week of Prayer, to ask God for the gift of full unity among the disciples of Christ."

A working group composed of representatives of the Roman Catholic Church, the Orthodox Church and Old Catholic and Protestant Churches active in Poland prepared the texts this year.

"Sweden's educational policy is becoming increasingly totalitarian," warned Michael Donnelly, the director of international affairs for the Home School Legal Defense Association, a US-based group that advocates for students' and parents' rights worldwide. "A country that does not permit home education is not really a free country," he said.

According to the HSLDA, Lotta Edholm, a prominent leader of Sweden's liberal party, opined in an article in Aftonbladet, a Swedish newspaper, that the nation's social service laws should be changed to encourage social workers to take children away from homeschooling families. "That the deputy minister of social affairs, Maria Larsson... should take an initiative to change the social services act so that the social authorities can intervene when children are kept away from school by their parents," she wrote in her blog.

"This is the most direct and serious threat to date for homeschooling families in the Nordic country where the climate for homeschooling is literally freezing," the HSLDA report said. The organization said Jonas Himmelstrand, chief of the Swedish Association for Home Education, believes Edholm's perception that homeschooling isn't compatible with democracy simply inverts freedom.

"Edholm argues that because children have a right to an education, this means that public school is the only valid option," Himmelstrand told the HSLDA. "With the knowledge we have today this is pure ignorance. Home education is an effective and perfectly legitimate way for children to learn. Edholm's argument is totalitarian and breaches fundamental democratic principles. It's fine for the government to provide schools, but it goes against basic human rights norms to force every child to go to school." He continued, "The government is not the parent... Unfortunately, in Sweden the line between parents and the state has become strongly blurred."

The proficiency of the latest assassination to deplete Iran's community of atom specialists suggests that violent actions by one or more of Iran's adversaries form an increasingly active - and public - element in a multifaceted international drive to impede Iran's nuclear program. Some old espionage hands voice respect for the expert landing of clandestine, deniable blows against a program the West suspects is aimed at acquiring a nuclear bomb capability and Iran says is for civilian purposes.

"Ten out of 10. They hit the target and nobody got caught," former US intelligence officer Robert Ayers told Reuters of the January 11 killing. "What makes these things so impressive is they gather a lot of information and do their 'on the ground' homework, which can take months." Sidney Alford, a British explosives expert, says the hit was technically "professional. It worked and it worked very well."

But whoever the apparently adept perpetrators were, the attack appears to form part of a quickening series of sabotage and assassinations that is growing less covert by the month. And the more visible the cloak-and-dagger campaign grows, some analysts argue, the more acute its affront to national prestige and sovereignty, and the deeper the siege mentality widely held to motivate Iran's drive for nuclear prowess.

Ahmadi-Roshan was the fourth Iranian nuclear scientist killed in the past two years; another scientist survived an explosion that wounded him and his wife. Iran says scientists have also been kidnapped, a computer virus attacked its nuclear equipment, and a massive explosion at a military base, which Iran called an accident, killed more than a dozen officers including the head of the Revolutionary Guards missile program.

While "there is more that unites us than divides us" on the basic tenets of faith - belief in Christ, the son of God and savior of humanity - "divisions remain and regard many practical and ethical questions, giving rise to confusion and mistrust, weakening our ability to transmit the saving word of Christ," Pope Benedict said January 18 at his weekly general audience.

The Second Vatican Council placed THE SEARCH FOR CHRISTIAN UNITY "AT THE CENTER OF THE LIFE AND WORK OF THE CHURCH," the pope said, and it did so because it was Christ's desire for his followers and because, practically speaking, it is essential for the full credibility of Christians. "The lack of unity among Christians impedes a more effective proclamation of Christ because it puts our credibility in danger," the pope said. "How can we give a convincing witness if we are divided?"

"To be sure, the UK suffers from some of the adverse factors cited by S&P to justify the euro-area downgrades," London-based Citigroup analysts Michael Saunders and Mark Schofield said in a note to clients today. "Nevertheless, in other respects, we think the UK's ability to return to fiscal sustainability is significantly better than most" euro-region governments.

Germany was left with the euro area's only stable AAA rating at S&P after the ratings company cut nine sovereigns on January 13. Citigroup said the UK will retain its rating and "not be placed on negative watch or negative outlook" because of the government's commitment to reducing the budget deficit and the nation's flexible monetary policy.

Citigroup also said the UK faces less risk of having to support euro-area countries and banks ensnared in the region's debt crisis. At the same time, the British government's proposals to protect UK lenders' consumer units will limit its liabilities to backstop them against other losses.

"Nevertheless, of course, the UK's AAA rating would be vulnerable if the economic outlook for 2012-13 proves far worse than we currently expect," the analysts said, adding that the next hurdle will be Chancellor of the Exchequer George Osborne's budget in March.

Numerous Internet companies engaged in a "blackout" protest Wednesday against two anti-piracy bills, SOPA and its counterpart in the Senate, the PROTECT IP Act (PIPA). The bills are supported by the RIAA, MPAA and countless other creative and business organizations. A handful of leading Internet sites are showing that fear is a great motivator. The logo on Google's home page is covered by a black rectangle. Following the link takes the reader to an "End Piracy, Not Liberty" page with information on the bills and an online petition.

At Wikipedia, a black welcome screen asks the visitor to "Imagine a World Without Free Knowledge" and warns that Congress is "considering legislation that could fatally damage the free and open Internet." The page offers a zip code-lookup that returns the contact information of a visitor's local representatives.

Craigslist's home page contains the questionable warning that "News Corp, RIAA, MPAA, Nike, Sony, Comcast, VISA & others" want a world without Craigslist, Wikipedia and Google. A page with information about SOPA contains the dubious charge that neither SOPA nor PIPA contain provisions for judicial oversight or due process.

Other companies taking part in Wednesday's protest are WordPress, Reddit and Mozilla. Some of the bills' opponents - such as Facebook, Twitter, Yahoo! and LinkedIn - decided not to disturb their users' experiences for the sake of the protest. The one-day protest is likely to rally even more opposition to the anti-piracy bills that had previously enjoyed widespread support in both houses of Congress.

According to the Saudi Jidda News, the agreement will seek joint development of "atomic energy for peaceful purposes, which will help to meet the kingdom's rising demand for energy and cut its growing dependence on depleting resources." The agreement was signed by King Abdullah and Chinese Prime Minister Wen Jiabao and followed earlier public remarks by a senior Saudi prince who said the country should develop nuclear weapons to counter rival Iran's nuclear arms.

Former Saudi intelligence chief Prince Turki al-Faisal said December 5 that "our efforts and those of the world have failed to convince Israel to abandon its weapons of mass destruction, as well as Iran... Therefore it is our duty toward our nation and people to consider all possible options, including the possession of these weapons."

The administration's argument against Iran's reason for developing nuclear energy - that Tehran has enough oil to produce electrical power for a century - also would apply to Saudi Arabia. Saudi Arabia holds some of the largest oil reserves in the world and is China's main supplier of crude oil. Saudi Arabia last year held talks with the Obama administration on US nuclear cooperation and reached a deal for nuclear development with South Korea in November.

Israeli defence minister Ehud Barak earlier said in Jerusalem on Wednesday that his country was not even close to deciding to attack Iran and believed that a military option remained "very far away". Lavrov warned of the "severest" consequences of an attack that he warned would spark a regional refugee crisis and incite inter-communal tensions in the region. "I have no doubt in the fact that it only add fuel to the fire of the still-simmering Sunni-Shiite conflict. And I do not know where the subsequent chain reaction will end."

He added that punitive sanctions aimed at winning more transparency from Iran had "exhausted" themselves and only hurt the chances of peace. "Additional unilateral sanctions against Iran have nothing to do with a desire to ensure the regime's commitment to nuclear non-proliferation," Lavrov told reporters at an annual briefing outlining Russia's foreign policy views. "It is seriously aimed at suffocating the Iranian economy and the well-being of its people, probably in the hope of inciting discontent."

His comments came as EU diplomats closed in on a July date for a full oil embargo that would suit nations such as Italy with a strong reliance on Iranian supplies.

Tehran likely would employ a mixed game plan against the US military consisting of "advanced technology" and "guerilla tactics," according to a research organization with close ties to the Pentagon. Before that, Iran would first lean hard on weaker Middle Eastern nations to convince those states to deny Washington access to bases on their soil, it states.

Some of the report's grimmer scenarios predict Iranian ballistic missile launches on Gulf cities in an attempt to convince other nations to resist providing support to an American military operation. The report also forecasts efforts by Tehran to use Shiite Muslim "proxy groups" to attack US allies in the region. Similar groups plagued the US-led war effort in Iraq for years, and some officials and experts said some acted with Tehran's backing.

Anthony Cordesman, a Pentagon adviser, acknowledged Iranian officials might give some kind of support to extremist groups in a place like Yemen. But he cast doubt on the likelihood that Iran would fire missiles at Gulf cities, or if its missiles would even work. "Iran is much more likely to look at this and realize when you see this type of exchange, you ignore the fact that there are no rules as to how the US and others would respond," said Cordesman, a senior analyst at the Center for Strategic and International Studies.