Yukiya Amano, the organisation's director-general, is unlikely to draw a definitive conclusion that Iran is making nuclear weapons, but according to Western diplomats the facts will make any other conclusion implausible. They believe the IAEA has substantiated evidence from intelligence reports, interviews with Iranian scientists and on-the-ground inspections that Iran is carrying out a nuclear weapons programme in parallel to its civilian energy goals. The agency will sound the alarm over Iranian scientists' work to develop a ballistic missile warhead capable of carrying a nuclear device. It has already uncovered evidence that Iran has been carrying out research into triggers for nuclear weapons.

Inspectors have also questioned Iranian scientists on simulation programmes that they believe are designed to design and test a potential weapon. "This is the product of a vast amount of work by the IAEA which will show the level of evidence they've accumulated and make clear a number of supplementary indications they have uncovered," said a Western diplomat. "It makes an inescapable case that Iran has ambitions to militarise the uranium it has been enriching at its production facilities."

Another official said: "The Iranians have been very evasive, and quite clever about it at times. It's been difficult to discover the smoking gun. But this will be more detailed than before. The director-general will point to black holes in the Iranians' explanations. It will undoubtedly increase the pressure." The Armed forces are conducting contingency planning for a potential attack on Iran's nuclear facilities amid concerns of a resurgent nuclear programme, sources have said.

It also emerged that Israel's air force simulated a long-range attack at a Nato base in Sardinia last week. The exercise, which was not initially disclosed in Israel, included an air-to-air refuelling component. Potential targets in Iran lie between 950 and 1,400 miles from Israel's borders. Any mission to destroy them would would require aerial refuelling.

French PM Francois Fillon said Greece had to say "without ambiguity" whether it wanted to stay in the eurozone. Greek PM George Papandreou is to meet French President Nicolas Sarkozy and Mrs Merkel later on Thursday. Mr Papandreou announced a referendum on the eurozone rescue plan on Tuesday. Overnight, Greece's cabinet gave unanimous backing to the vote, which could take place in December.

He told an emergency cabinet meeting a referendum would offer "a clear mandate" for austerity measures demanded by eurozone partners. Earlier, stock markets recorded big drops amid shocked reactions in eurozone capitals to the referendum announcement. BBC diplomatic correspondent James Robbins, in Cannes for the G20, says both Germany and France are raising pressure on Greece to drop a referendum on the bailout plan, and ministers in both countries are ramping up calls for Mr Papandreou to change course.

Now China has added its voice to those calling for swift action to protect the rescue plan, he adds.

Despite its location on France's glamorous Cote d'Azur, Wednesday evening's meeting likely won't be a pleasant one for Giorgios Papandreou. The Greek prime minister is set to meet with German Chancellor Angela Merkel and French President Nicolas Sarkozy. None of them, one presumes, will be in the mood to enjoy their enchanting surroundings.

Leaders of the world's most powerful economies begin arriving on France's south coast on Wednesday night for the Thursday kick-off of this year's G-20 summit. Host Sarkozy had been hoping the gathering would focus on raising funds to boost the effectiveness of the euro backstop fund, the European Financial Stability Facility (EFSF), but the success of the meeting is now in doubt. Papandreou's announcement on Monday evening that he was planning to hold a referendum on the EU bailout package for his country has shocked and infuriated his would-be benefactors - and sent global markets into yet another tailspin.

The news came less than a week after an all-night bargaining session in Brussels that resulted in an agreement to slash Greek debt by 50 percent, make a further 130 billion euros in loans available to the country and leverage the EFSF to 1 trillion euros. Markets immediately calmed and the euro began climbing against the dollar. The Greek prime minister's announcement, however, quickly transformed the budding optimism into deep pessimism about the future of the common currency. Should Greek voters, frustrated by round after round of deep austerity measures, reject the bailout deal, it could result in an uncontrolled national bankruptcy. Markets will likely remain nervous until the results of the ballot are in - meanwhile the euro will move even closer to the abyss.

The center-left Suddeutsche Zeitung writes:

"As tough as it sounds, Greek politics is no longer just the business of the Greeks alone... Greece's fate also determines that of the other 16 euro-zone members. And if it's true that the future of the European Union hangs on the euro, then the entire project is in jeopardy. The summits in Brussels last week were an expression of the responsibility that Europe is willing to take on for Greece. But where then is Greece's responsibility for Europe?"

European leaders made no secret of their displeasure. "This announcement surprised all of Europe," said a clearly annoyed French President Nicolas Sarkozy, who has been scrambling to save face for Europe before he hosts leaders of the Group of 20 major world economies later this week. "Giving the people a say is always legitimate, but the solidarity of all countries of the eurozone cannot work unless each one consents to the necessary efforts," he said. French lawmaker Christian Estrosi was even more direct. He told France-Info radio that the move was "totally irresponsible" and reflected "a wind of panic" blowing on Papandreou and his party. "I want to tell the Greek government that when you are in a situation of crisis, and others want to help you, it is insulting to try to save your skin instead of assuming your responsibilities," Estrosi said.

In New York, the stocks of major banks like Citigroup and JPMorgan Chase were hit hard. The value of the dollar rose, and bond prices jumped so dramatically that analysts said they were stunned. Analysts said the bond action reflected fears that the turmoil in Greece would tear at the fabric of Europe's financial system and create a crisis that could engulf the entire European Union, which together forms the world's largest economy. "This brings all of the concerns about Europe back to the front burner," said Scott Brown, chief economist at Raymond James. "If this ends up turning into a financial catastrophe in Europe, then no one will escape it."

The Israeli government decision stopped well short of ordering tanks to roll into Gaza, and it appeared unlikely that would happen, as rocket fire all but stopped over the past day. The official said the decision authorized the military to act in accordance with the severity of Palestinian attacks, meaning that a ground offensive would be ordered only after massive rocket fire. The Israeli official spoke on condition of anonymity because no statement was made.

Egypt's ambassador to the Palestinian Authority said Tuesday that Egypt obtained an Israeli pledge to hold its fire while efforts were under way to persuade Palestinian militants to stop the rocket barrages. This is the third case of Egyptian diplomatic involvement with Israel over the last month, after two prisoner exchanges. Israel has been concerned that Egypt's new rulers might toughen their line on Israel in accordance with widespread public dislike of the Jewish state despite a 1979 peace treaty. Egypt's diplomatic activity might calm those concerns.

The rocket attacks have disrupted life in southern Israel, forcing schools to close. About 1 million Israelis live within range of rockets from Gaza.

As the leaders of the G20 countries prepare for emergency talks on averting a return to worldwide recession, the United Nations' International Labour Organisation (ILO) issued a grim forecast of the social effects of the continuing economic crisis. The UN agency warned that it could take until 2016 for global employment to return to the levels of three years ago - and that anger could erupt on the streets of Europe and other continents as a result.

The economic gloom was exacerbated yesterday by Greek Prime Minister George Papandreou's surprise announcement that his country would hold a referendum on the European debt deal that was struck last week. The vote could put the tortuously conceived package in jeopardy. The Greek Finance Minister, Evangelos Venizelos, said the announcement was prompted by popular discontent at the terms of the deal. If anger at the austerity forced on the country translates into a 'No' vote, European leaders who spent months haggling over the terms of the deal could be forced back to the drawing board and the terms of the deal renegotiated.

Stock markets recorded big drops amid shocked reactions in eurozone capitals to the referendum announcement. Mr Papandreou is due to meet European leaders in France on Wednesday. In a cabinet meeting lasting late into Tuesday night, Mr Papandreou told ministers the government needed the consent of the Greek people. In a statement released by his office, he said: "The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro."

Mr Papandreou also said a possible alternative of snap elections would risk Greece defaulting on its debt. The Greek government faces a crucial confidence vote in parliament on Friday. One MP from the governing Pasok party has resigned, cutting Mr Papandreou's parliamentary majority to two - and six other leading party members have called on him to resign.

Mark Lowen, BBC News, Athens, writes: There is opposition within Mr Papandreou's Pasok party to his decision to hold a referendum, even though the cabinet expressed unanimous support. So there are fears that if Friday's confidence vote does not go as planned, then potentially this government could fall even before a referendum is held.

This was an apparently personal decision to call it. What seems to be the case is Mr Papandreou wants to take the responsibility for the austerity measures away from his shoulders and put it on the shoulders of the Greek people, to say: I need the support of the Greek people to push through this austerity drive, to continue to receive bailout money.

But he is facing a massive hurdle in trying to win support for this. He is playing a very dangerous game, and so, he has now thrown Greece into a political crisis to add to its financial woes.

• Chiefs of staff at Greek National Defence, Army, Navy and Air Force get marching orders for no clear reason

• Sarkozy and Merkel call emergency meeting over referendum call

• Huge losses for French banks exposed to Greek debt

• 'More important than ever' to push ahead with bailout, says Sarkozy

• FTSE 100 falls 3.4 per cent after opening

• Germany's Dax falls and French CAC-40 plummet by more than 5 per cent

• 59 per cent of Greeks think deal is 'negative'

• 'No' vote could prompt country's exit from the Euro

• 228-year-old US brokerage MF Global goes bankrupt due to euro bonds

• Chinese warn hopes of 'red knight' riding to slay euro debt dragon are 'misplaced'

Greece's defence minister, Panos Beglitis, said last month that he wanted to select his own people for the posts because the powerful Greek military was a 'state within the state', according to The Guardian. However, no official reason has yet been given. In a frantic phone call, the leaders of the eurozone's two largest economies agreed that the Greek decision has made it more necessary than ever to push forward with plans thrashed out during last week's EU summit.

They will meet with the Greek government, the IMF and their European partners tomorrow in Cannes, ahead of a G20 summit, to advance their view and urge fellow leaders not to wobble. Chancellor Merkel's spokesman Steffen Seibert said that she and the French president 'agreed, together with their European partners, to guarantee the full and swift implementation of the summit decisions.'

He added: 'Germany and France are convinced that this agreement will enable Greece to return to sustainable growth.' A statement issued by President Sarkozy's office read: 'France and Germany are determined to ensure, with their European partners, the full implementation in the quickest time frame, the decisions adopted at the summit, which are today more important than ever.'

However, slashed Defence budgets and the war in Libya has meant there hasn't been a vessel available since the start of October. The last ship to fill the role, called the FRE, was HMS Portland but that left for war games off the coast of Scotland in October, and it is now having a rest period in Plymouth on the south coast.

Former First Sea Lord Admiral Lord Alan West said: "I would hardly say it is a luxury. If there was a terrorism incident in UK waters, this would historically be the ship sent in to deal with it. It's a big problem. If we haven't got a ship ready to do this role then it's worrying. It's a very unsatisfactory position to be in."

"You can't help thinking that they should be grateful as Europe is trying to help," said Konstanze Pilge, a 26-year old student, walking near the Brandenburg Gate in central Berlin. "Now it looks like they are going to mess things up." Papandreou dropped his bombshell on Monday evening, less than a week after European leaders agreed the outlines of a second bailout for Athens.

"It just goes to show once again what a huge mistake it was not to throw Greece out of the euro zone at the start," said Wolfgang Gerke, a banking professor and president of the Bavarian Financial Centre think tank. Europe's paymaster Germany and its partners in the euro zone were taken by surprise by the announcement.

Countries like Germany and Finland may find it difficult to defend funneling more cash to Athens over the coming months with the threat of the referendum looming. "If the Greeks say no, then it means bankruptcy. It would be a clear 'no' to the euro," said Josef Kaesmeier, chief economist at Munich-based private bank Merck Finck. "We have got to the point where we can say: if someone doesn't want to be in the club any more, they should go."

According to the British newspaper, the report was prepared for the Trident Commission, an independent cross-party initiative set up by the British American Security Information Council (BASIC). "In the case of Israel, the size of its nuclear-tipped cruise missile enabled submarine fleet is being increased and the country seems to be on course, on the back of its satellite launch rocket program, for future development of an inter-continental ballistic missile," the report said.

Israel currently has three submarines and two more being manufactured in Germany. Earlier this year, Der Spiegel reported that Germany had granted Israel's request to provide it with six Dolphin submarines said to be capable of carrying nuclear weapons. Dolphin submarines are manufactured in the city of Kiel in Germany. Experts estimate they are have the longest cruising range of all submarines. Some reports claim they are also able to carry and launch nuclear weapons.

Fearing an uncoordinated Israeli attack against Iran, the United States is working on several levels to pressure the UN's Security Council into imposing harsher sanctions on Iran, Yedioth Ahronoth reported Monday. A senior US State Department official said there was growing concern among Obama administration officials ahead of an IAEA report set to be published in November indicating considerable progress in Tehran's development of its military nuclear program.

The US is concerned that the report may trigger Israeli actions against the Islamic Republic which may not necessarily be in line with US interests in the region. The official said that Washington's reevaluation of an Israeli strike in Iran is based on various maneuvers Israel has performed in the past few years.

The US administration is now bent on exercising more pressure on Tehran in order to dissuade Israel from this path, the source said. Washington is therefore pressing China and Russia who are currently opposed to the publication of the IAEA report. The report may cause embarrassment to both countries who are strongly against harsher sanctions on Iran.

On Saturday, the New York Times reported that the United States plans to bolster its military presence in the Gulf after the withdrawal of its troops from Iraq. Citing unnamed officials and diplomats, the newspaper said the repositioning could include new combat forces in Kuwait able to respond to a collapse of security in Iraq or a military confrontation with Iran.

The 240-gramme (6.9-ounce) beast has tracks that are covered with dry microfibres modelled on the toe hairs of the gecko, which can famously zip up windows and along walls almost without effort. The lizard does the trick thanks to millions of ultra-fine hairs called setae, which interact with the climbing surface to create a molecular attraction known as the van der Waals force.

Described on Tuesday in the British research journal Smart Materials and Structure, the robot's tracks are studded with mushroom-shaped caps of polymer microfibres just 0.017 millimetres (0.00067 inches) wide and 0.01mm (0.0004 inches) high. By comparison, the human hair is around 0.1 mm (0.004 inches) thick. The gadget weighs 240g (eight ounces) but tests show that it could take an additional load of 110 grammes (3.14 ounces).

London's FTSE 100 index of leading shares dropped more than 2%, with markets in Germany falling, France, Spain and Italy sliding between 2.7% and 4%. Andrew Lim, banking analyst at Espirito Santo in London, said: "If Greek voters reject the unpopular bailout plan it could result in a "hard default", which could force banks to take losses of about 75% on their Greek sovereign bonds, trigger payouts on credit default swap insurance contracts, and raise the threat of a systemic risk."

"If we get a hard default in Greece, it will exacerbate the situation with Italy and Spain. It just increases the problem of Italy going down the same route, and that's the real risk. The fall in Europe followed big falls on Wall Street overnight and in Asia, with surveys showing China's manufacturing remained sluggish also weighing on sentiment.

Something can't be right when the modest city of Larisa, capital of the agricultural region of Thessaly with 250,000 inhabitants, has more Porsches per head of the population than New York or London. Perhaps the penny - or the euro - is already dropping, because Professor Polemarchakis writes that Larissa "is the talk of the town in Stuttgart, the cradle of the German automobile industry, and, particularly, in the Porsche headquarters there", since it "tops the list, world-wide, for the per-capita ownership of Porsche Cayennes".

"The proliferation of Cayennes is a curiosity, given that farming is not a flourishing sector in Greece, where agricultural output generates a mere 3.2 per cent of Gross National Product (GNP) in 2009 - down from 6.65 per cent in 2000 - and transfers and subsidies from the European Commission provide roughly half of the nation's agricultural income.

"A couple of years ago, there were more Cayennes circulating in Greece than individuals who declared and paid taxes on an annual income of more than 50,000 euros."

Hard to believe? Don't take my word for it. The report in Athens News will add to fears, expressed by leading economist George Soros and others, that last week's deal to save the euro can only buy a little time - not a permanent solution. China may also question why it should support economies that pay their unemployed more than most of its workers earn.