Now, though, some are concerned that US trade sanctions might bring the party to a premature end. Sources within the German government and in the automobile industry have told Spiegel that Washington may be considering raising tariffs on German cars imported into the US.

The alleged plan is apparently born out of frustration in the US that Berlin ultimately declined to provide support to General Motors subsidiary Opel despite requests to do so from Washington. Furthermore, while German car makers have been able to increase sales in the US, GM and Ford have not found much recent success in Europe.

Many might argue that such a discrepancy may have more to do with European tastes in cars, but US politicians are concerned it has more to do with EU trade policy. In conversation with German auto industry leaders, political leaders from Washington pointed to the fact that Europe charges a 10 percent tariff on cars imported from the US. Automobiles heading into the US from Europe, however, are only taxed with a 2.5 percent levy. Reading between the lines, German auto industry leaders are now concerned that Washington intends to increase that levy in the near future.

But Army General David H Petraeus, the man tapped by Mr Obama as the new top commander in Afghanistan, led the production of an extensive counterinsurgency manual in December 2006 that does, in fact, tell commanders of a link between Islam and extremists.

The Petraeus doctrine refers to "Islamic insurgents," "Islamic extremists" and "Islamic subversives." It details ties between Muslim support groups and terrorists. His co-author was General James F Amos, whom Mr Obama has picked as the next Marine Corps commandant and Joint Chiefs of Staff member.

Mr Brennan on May 26 told an audience at the Center for Strategic and International Studies that "describing our enemy in religious terms would lend credence to the lie propagated by al Qaeda and its affiliates to justify terrorism, that the United States is somehow at war against Islam. The reality, of course, is that we have never been and will never be at war with Islam. After all, Islam, like so many faiths, is part of America."

The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia. Meanwhile, China rises to AA+ with Germany, the Netherlands and Canada, reflecting its 2.4 trillion euros (2 trillion pounds) reserves and a blistering growth rate of 8 percent to 10 percent a year. Dominique Strauss-Kahn, chief of the International Monetary Fund, agreed on Monday that the rising East is a transforming global force. "Asia's time has come," he said.

Dagong rates Norway, Denmark, Switzerland, and Singapore at AAA, along with the commodity twins Australia and New Zealand. Chinese president Hu Jintao said in April that the world needs "an objective, fair, and reasonable standard" for rating sovereign debt. Dagong appears to have stepped into the role, saying its objective was to assess countries using methods that would "not be affected by ideology".

"The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability," said Guan Jianzhong, Dagong's chairman.

He said that it was a "disgrace" that ministers failed to exhaust all peaceful options before going to war against Iraq. "There was no deliberate discussion of available alternatives to military action in advance of the 2003 invasion," Mr Ross added. "There is no record of that discussion, no official has referred to it, no minister has talked about it, and that seems to me to be a very egregious absence in this history - that at some point a Government before going to war should stop and ask itself, 'are there available alternatives?'"

Giving evidence before the Chilcot inquiry into the Iraq war, Mr Ross said that "nuanced" intelligence about the threat from Iraq was "massaged" into "more robust and terrifying" messages about Saddam's supposed WMD. Mr Carne, who served at the UN between 1997 and 2002, claimed that the British and United States governments were fully aware that there was no "substantial threat" from Iraq ahead of the war. He said: "It remains my view that the internal Government assessment of Iraq's capabilities was intentionally and substantially exaggerated in public Government documents during 2002 and 2003.

"This process of exaggeration was gradual, and proceeded by accretion and editing from document to document, in a way that allowed those participating to convince themselves that they were not engaged in blatant dishonesty," he said. "But this process led to highly misleading statements about the UK assessment of the Iraqi threat that were, in their totality, lies."

As a physicist and an avowed admirer of the Swabian housewife, German Chancellor Angela Merkel, leader of the center-right Christian Democrats (CDU), is seeking to establish binding rules in the midst of the chaos of financial and monetary crises. Her desire for order was reinforced recently when the prospect of Greece collapsing under a mountain of debt triggered turmoil in the European Monetary Union.

The first national bankruptcy on European soil in decades was only prevented because the remaining countries in the euro zone came to the aid of their faltering fellow member with billions in loans and loan guarantees. The chancellor, determined not to allow the Greek debacle to be repeated elsewhere, proposed the establishment of a procedure to ensure "orderly national bankruptcies." The German chancellor hoped that the plan would create "an important incentive for the euro-zone members to keep their budgets under control."

Finance Minister Wolfgang Schauble, in complete agreement with Merkel, said: "We have to think about how, in an extreme situation, member states could become insolvent in an orderly fashion without threatening the euro zone as a whole." If the plans are implemented, banks and investors will not be the only ones bearing the burden when countries in the euro zone encounter financial difficulties. THE DEBT-RIDDEN COUNTRIES THEMSELVES WILL ALSO HAVE TO MAKE SUBSTANTIAL SACRIFICES, AND THEIR GOVERNMENTS WILL CEDE SOME OF THEIR POWER.

Castro writes opinion columns, or "Reflections," for Cuba's state-run media that in recent weeks have focused on his prediction that nuclear war will soon break out, sparked by a conflict between the United States and Iran over international sanctions against Iran's nuclear activities.

"The empire is at the point of committing a terrible error that nobody can stop. It advances inexorably toward a sinister fate," he wrote on July 5. The "empire" is how Castro usually refers to the United States, his bitter foe from the time he took power in Cuba in a 1959 revolution. In a column published on Sunday night, Castro said the "principal purpose" of his writings has been to "warn international public opinion of what was occurring."

The columns have attracted little attention internationally and caused little reaction in Cuba, but Castro promised to continue his lonely fight to warn the world of the coming disaster.

There is a widespread feeling that the government doesn't work, that it is incapable of solving America's problems. Americans are fed up with Washington, fed up with Wall Street, fed up with the necessary but ill-conceived stimulus program, fed up with the misdirected healthcare program, and with pretty much everything else. They are outraged and feel that the system is not a level playing field, but is tilted against them. The millions of unemployed feel abandoned by the president, by the Democratic Congress, and by the Republicans.

The fundamental problem is starkly simple: jobs and the deepening fear among the public that the American dream is vanishing before their eyes. The economy's erratic improvement has helped Wall Street but has brought little support to Main Street. Some 6.8 million people have been unemployed in the last year for six months or longer. Their valuable skills are at risk, affecting their economic productivity for years to come. Add to this despairing army the large number of those only partially employed and those who have given up their search for work, and we have cumulative totals in the tens of millions.

Many people who joined the middle class, especially those who joined in the last few years, have now fallen back. It's not over yet. Millions cannot make minimum payments on their credit cards, or are in default or foreclosure on their mortgages, or are on food stamps. Well over 100,000 people file for bankruptcy every month. Some 3 million homeowners are estimated to face foreclosure this year, on top of 2.8 million last year. Millions of homes are located next to or near a foreclosed home, and it is the latter that may determine the price of all the homes on the street. There have been dramatically sharp declines in home equity, representing cumulative losses in the trillions of dollars in what has long been the largest asset on the average American family's balance sheet. Most of those who lost their homes are hard-working, middle-class Americans who had lost their jobs. Now many have to use credit cards to pay for essentials and make ends meet, and they are running out of credit.

Americans today strongly support a pro-growth economic agenda that includes fiscal discipline, limited government, and deficit reduction. They fear the country is coming apart, while the novelty of Obama has worn off, along with the power of his position as the non-Bush. His decline in popularity has emboldened the opposition to try to block him at every turn.

The promise of economic health that might salvage industries and jobs, and provide a safety net, has proved illusory. The support for cutting spending and cutting the deficit reflects in part the fact that the American public feels the Obama-Congress spending program has not worked. As for the healthcare reform bill, the most recent Rasmussen survey indicates that 52 percent of the electorate supports repeal of the measure - 42 percent of them strongly.

It is clear that the magical moment of Obama's campaign conveyed a spell that is now broken in the context of the growing public disillusionment. Obama's rise has been spectacular, but so too has been his fall.

But the synod decided women bishops should be able to decide the identity of any bishop entering their dioceses. They would also have the ability to dictate the functions these bishops could carry out. The BBC's religious correspondent Robert Pigott said women bishops would have only to consult a code of practice guiding them in their dealings with traditionalists. He said the decision made during a synod meeting at York University had left a lot of division in its wake. Members of the synod decided there was no need for further delay to the progress of a draft law allowing women to be made bishops.

But traditionalists have warned that the decision could result in many of them leaving the Church of England. The Reverend Prebendary David Houlding, a leading member of the Catholic Group on the General Synod, said he was concerned and he felt as if traditionalists were running out of options. He told PA: "There are several people who will be making hard decisions about their future.

"I am staying in the Church of England for the time being until I am driven out. I am not going willingly, I will only go if forced. The more this goes on in this manner, the more it seems as if the door is shutting. The scope for remaining in the Church of England is getting more and more narrow and the options are rapidly closing."

His intervention came as Michael Scott-Joynt, the Bishop of Winchester, warned the row could 'destroy' the Church amid fears clergy and churchgoers might leave en masse. Liberals who voted down compromise proposals that would have allowed dioceses that rejected women bishops to have an additional male bishop were accused of 'intolerance'. One insider said: 'Unless there is some extraordinary development, people will go.'

Sources said significant numbers of bishops could defect when the Roman Catholic Church launches formal moves to court disaffected Anglicans later this year. In his sermon, delivered at York Minster, Dr Sentamu diverged from the published text to repeat a story told by Desmond Tutu, who asked a child what John the Baptist might have told Jesus after he baptised him. The child said: 'Now you are a child of God, start behaving like one.'

However, it could become increasingly difficult for him to stick to his position as the Obama administration pushes harder to revive the negotiations. Netanyahu hasn't agreed to either demand, and has so far curbed but not frozen settlement activity. He insists negotiations should be held without any preconditions.

Later this week, White House envoy George Mitchell is to meet with Abbas and is expected to lay out some gestures Israel is prepared to make to bring Abbas back to the table, said an Abbas aide. The Palestinians have said that after 17 years of intermittent talks, they don't want to start all over again, especially with an Israeli leader who has retreated from positions presented by his predecessors.

Abbas aide Yasser Abed Rabbo told Palestinian radio Sunday that the Palestinians don't want to enter open-ended negotiations with Israel. "There must be a... timetable, a framework for these negotiations," he said. "We will not enter new negotiations that could take more than 10 years."

The Palestinians want to establish a state in the West Bank, Gaza and east Jerusalem, territories Israel captured in the 1967 Mideast War. They have said the 1967 borders must be the baseline for negotiations, but that they are ready to swap some land to enable Israel to keep some of the largest settlements it has built on occupied land since 1967.

Netanyahu says he will not relinquish any part of Jerusalem and has not presented his own border plan.

The attack on the rugby club, where crowds sat outside watching a large-screen TV, left 49 dead, police said. Fifteen others were killed in the restaurant explosion. Kampala's police chief said he believed Somalia's most feared militant group, al-Shabab, could be responsible for the attack. Al-Shabab is known to have links with Al Qaeda, and it counts militant veterans from the Iraq, Afghanistan and Pakistan conflicts among its ranks. Simultaneous attacks are also one of Al Qaeda's hallmarks.

In Mogadishu, Somalia, Sheik Yusuf Sheik Issa, an al-Shabab commander, told The Associated Press early Monday that he was happy with the attacks in Uganda. Issa refused to confirm or deny that al-Shabab was responsible for the bombings. "Uganda is one of our enemies. Whatever makes them cry, makes us happy. May Allah's anger be upon those who are against us," Sheik said.

International militants have flocked to Somalia because the country's government controls only a few square miles of the capital, Mogadishu, leaving most of the rest of the country as lawless territory where insurgents can train and plan attacks unimpeded.

The two leaders - former Republican senator Alan Simpson of Wyoming and Erskine Bowles, White House chief of staff under President Bill Clinton - sought to build support for the work of the commission, whose recommendations due later this year are likely to spark a fierce debate in Congress.

"There are many who hope we fail," Simpson said at the closing session of the National Governors Association annual meeting. He called the 18-member commission "good people with deep, deep differences" who know the odds of success "are rather harrowing."

Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."

The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans - the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out... The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."

The European Central Bank, the Bank of England and the International Monetary Fund have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is.

Their concern is that banks hungry for refinancing will compete with governments - which also must roll over huge sums - for the bond market's favor. As a result, credit for business and consumers could become more costly and scarce, with unpleasant consequences for economic growth.

"There is a cliff we are racing toward - it's huge," said Richard Barwell, an economist at Royal Bank of Scotland and formerly a senior economist at the Bank of England, Britain's central bank. "No one seems to be talking about it that much." But, he added, "it's of first-order importance for lending and output."

Banks worldwide owe nearly $5 trillion to bondholders and other creditors that will come due through 2012, according to estimates by the Bank for International Settlements. About $2.6 trillion of the liabilities are in Europe.

While the weak economy dominated the official agenda at the summer meeting here of the National Governors Association, concern over immigration policy pervaded the closed-door session between Democratic governors and White House officials and simmered throughout the three-day event.

At the Democrats' meeting on Saturday, some governors bemoaned the timing of the Justice Department lawsuit, according to two governors who spoke anonymously because the discussion was private. "Universally the governors are saying, 'We've got to talk about jobs,'" Governor Phil Bredesen of Tennessee, a Democrat, said in an interview. "And all of a sudden we have immigration going on." He added, "It is such a toxic subject, such an important time for Democrats."

But David Axelrod, the president's senior adviser, said on Sunday on CNN's "State of the Union" that the president remained committed to passing an immigration overhaul, and that addressing the issue did not mean he was ignoring the economy. "That doesn't mean we can't have a good, healthy debate about the economy and other issues," Mr Axelrod said.

The nation's total federal debt next year is expected to exceed $14 trillion, and Mr Simpson, a former Republican senator from Wyoming, and Mr Bowles, a Democrat and the White House chief of staff under President Bill Clinton, offered a gloomy assessment if spending is not brought under control even more.

"This debt is like a cancer," Mr Bowles said. "IT IS TRULY GOING TO DESTROY THE COUNTRY FROM WITHIN."

Kahlili accused the Obama Administration of being naive. According to him, the American overtures are viewed by the Iranian regime as a sign of weakness, while the Iranian people consider the efforts to engage the regime an act of betrayal against their struggle for freedom.

"THIS IS A MESSIANIC REGIME. There should be no doubt - they are going to commit the most horrendous suicide bombing in human history. THEY WILL ATTACK ISRAEL, EUROPEAN CAPITALS, AND (THE) PERSIAN GULF REGION AT THE SAME TIME," said Kahlili in one of his first public appearances.

Kahlili said he joined the Revolutionary Guard following the Islamic revolution of 1979, but volunteered to work for the CIA when he became disillusioned with the Khomeini regime after witnessing acts of rape, torture and murder. For 10 years, under the code name "Wally," he relayed the secret operations of the IRGC back to American intelligence, eventually fleeing to the United States. In the aftermath of 9/11, Kahlili reestablished contact with his sources in Iran and began once again providing information to the CIA, according to the Washington Institute.