The tensions emanating from Pyongyang are beginning to hit nascent business ties with the South: a Seoul-based fur manufacturer became the first South Korean company to announce Monday it was pulling out of an industrial complex in the North's border town of Kaesong. The complex, which opened in 2004, is a key symbol of rapprochement between the two Koreas but the goodwill is evaporating quickly in the wake of North Korea's nuclear test on May 25 and subsequent missile tests.

Pyongyang raised tensions a notch by reviving its rhetoric in a commentary in the state-run Minju Joson newspaper today. "Our nuclear deterrent will be a strong defensive means… AS WELL AS A MERCILESS OFFENSIVE MEANS to deal a just retaliatory strike to those who touch the country's dignity and sovereignty even a bit," said the commentary, carried by the official Korean Central News Agency.

It appeared to be the first time that North Korea referred to its nuclear arsenal as "OFFENSIVE" in nature. Pyongyang has long claimed that its nuclear weapons program is a deterrent and only for self-defense against what it calls US attempts to invade it. Intensifying its confrontation with the US, North Korea handed down 12-year prison terms to two detained American journalists on Monday.

Describing the event, the council's website "calls participants to seek justice for 'Palestinians' so that both Israelis and 'Palestinians' can finally live in peace," WORDING CRITICS SAY OMITS HALF OF THE CONFLICT. A participating church in Edinburgh, Scotland, will require attendees to walk around a replica of Israel's security barrier before entering. Efforts in Israel and the Arab-occupied areas will centre on protests at checkpoints, 'refugee' camps and Jewish communities in post-1967 territories. At least 20 nations will be represented in the World Council activities.

IT ALSO SIGNALLED A MAJOR TURNING POINT FOR ISRAEL, WITH WHOM OBAMA PROPOSES TO GRADUALLY MINIMIZE US STRATEGIC TIES. Obama and his advisers intend to start cutting down on their military and intelligence discourse with Israel. Instead of conferring with Israel on its military and undercover moves in the Middle East and Muslim world, Washington will make Cairo and Riyadh the crux of its regional teamwork, turning to Israel only when it is unavoidable.

The US administration has opted for this policy reorientation because it seeks to enter into negotiations with Iran unencumbered by Israeli baggage. Close US ties with the Jewish state are also seen as a burden in Obama's future diplomatic engagements with Arab and Muslim governments such as Syria, which he wants to bring into his new Arab line-up. When he stated in his speech in Cairo, "America will align its policies with those who seek peace", Obama was actually saying that he will pick and choose US allies without being bound by the past.

Meanwhile, Obama declared to the Muslim world on Thursday that he will "personally" see to it that THE HEART OF THE JEWISH HOMELAND [JUDEA AND SAMARIA] IS RENDERED JEW-FREE AND HANDED TO THE ARABS FOR THE CREATION OF A [TERRORIST] STATE OF THEIR OWN. "The only resolution" to the Arab-Israeli conflict, he said, "is for the aspirations of both sides to be met through two states, where Israelis and Palestinians [sic] each live in peace and security."

Obama compared 2,000 years of Jewish suffering that culminated in mass murder of six million Jews in the Holocaust with the "pain of dislocation" suffered by the Arabs who were made into refugees as a result of their own peoples' aggression against Israel 61 years ago, and whose leaders have kept them in that status as pawns with which to achieve their own political and religious aspiration. Obama insisted that Israel - whose 4,000-year existence has been richly recorded, both biblically and extra-biblically - must acknowledge THE 'PALESTINIANS' "RIGHT TO EXIST" AS A NATION, DESPITE IT NEVER HAVING BEEN A PEOPLE AND NEVER HAVING HAD A NATIONAL HOMELAND, A NATIONAL FLAG OR ANY OTHER NATIONAL SYMBOL.

Mitchell pointed out that a "normalization of relations" between Israel and Arab nations is in "the security interests of the United States." The Obama government has found a new basis for pressuring both sides to meet by making a regional peace and the creation of a PA state matters of American security.

Following Mitchell's statement, ABBAS REITERATED HIS REFUSAL TO MEET WITH PRIME MINISTER BINYAMIN NETANYAHU UNTIL THE ISRAELI GOVERNMENT AGREES TO THE ESTABLISHMENT OF A NEW PA STATE. He also maintained, "We were requested to take care of security, and we have done this. Israel must fulfil its obligations" and stop building in Judea and Samaria.

PRIME MINISTER NETANYAHU HAS OFFERED TO MEET WITHOUT ANY PRE-CONDITIONS BUT HAS POINTED OUT THERE WILL BE NO PROGRESS UNTIL PA CHAIRMAN MAHMOUD ABBAS ACCEPTS ISRAEL AS A JEWISH STATE. The Israeli leader has rejected President Obama's call for recognizing a yet-to-be created PA state, a move that Abbas likely would interpret as the acceptance of his demands that the new Arab country be established on all of Judea, Samaria and Gaza, including eastern Jerusalem, where he wants the Arab capital.

A RECOGNITION BY ABBAS AS A JEWISH STATE WOULD PREVENT THE PA FROM IMPLEMENTING THE CONDITION OF THE SAUDI ARABIA PEACE PLAN, which calls for the immigration of five million foreign Arabs to Israel on the basis of their claim of ancestry in Israel. Abbas has said he would not insist that all five million be allowed to enter Israel but has not said what number he will settle for.

"To this day, there are those who insist that the Holocaust never happened – a denial of fact and truth that is baseless and ignorant and hateful," Obama said in the German death camp which witnessed the death of some 56,000 people, more than 50,000 of whom were Jews. "I have no patience for people who deny history," Obama added, "And the history of the Holocaust is not something speculative." Many saw Obama's visit to the Buchenwald concentration camp as an attempt to balance his Cairo speech a day earlier in which he reached out to the Muslim world. Obama also referenced Jewish suffering in that speech, hinting to the Muslim world that it must end widespread Holocaust denial.

OBAMA WAS WIDELY CRITICIZED FOR COMPARING THE DEATH OF SIX MILLION JEWS TO THE SITUATION OF PA ARABS. "Obama made a shocking parallel between the destruction of European Jewry and the suffering that the Arabs of Israel brought upon themselves when they declared war on Israel," Ichud Leumi (National Union) MK Aryeh Eldad said. "If Obama does not understand the difference between them, perhaps he will understand it better when he visits the Buchenwald concentration camp in the coming days.

AND IF HE DOESN'T UNDERSTAND IT EVEN THERE, THEN ISLAM WILL ONCE AGAIN TEACH IT TO HIM, JUST AS IT TAUGHT HIS PREDECESSOR ON 9/11."

Zionist Organisation of America President, Morton A. Klein said, "This was a primarily strongly biased speech, inimical to Israel, supportive of false Palestinian and Arab claims against Israel, and blatantly factually inaccurate. THE PRESIDENT'S REMARKS IN THIS SPEECH MAY WELL SIGNAL THE BEGINNING OF A RENUNCIATION OF AMERICA'S STRATEGIC ALLIANCE WITH ISRAEL."

Netanyahu slammed media coverage of the past few days, saying he had read and heard quotes attributed to him that he did not say. "I would like to make it clear," he said. "We want to achieve peace with the Palestinians and with the countries of the Arab world, while attempting to reach the maximum understanding with the US and our friends around the world."

However, Netanyahu added, "My aspiration is to achieve a stable peace that rests on a solid foundation of security for the State of Israel and its citizens." The prime minister said that he intends to discuss the issue with his coalition partners and "other elements among the Israeli public" prior to delivering his address.

US SECRETARY OF STATE HILLARY CLINTON HAS SAID SHE IS REFUSING TO HONOUR AN AMERICAN PROMISE THAT ISRAEL CAN RETAIN ITS LARGE JEWISH POPULATION CENTRES THAT WERE BUILT IN JUDEA, SAMARIA AND SIGNIFICANT PARTS OF JERUSALEM. She repeated a claim that the Roadmap requires Israel to surrender all of Judea, Samaria and Gaza - although in truth the document only calls for the future borders of Israel and a new PA state to be negotiated.

Secretary Clinton's blunt dismissal of the "informal" promise places more than 100,000 residents of Maaleh Adumim, Ariel, Betar Illit and Gush Etzion on the list for future expulsions to make way for a Palestinian Authority state. The State Department previously had dodged taking a stand on whether the Obama administration would honour the promise.

"There is no memorialisation of any informal and oral agreements. If they did occur, which of course people say they did, they did not become part of the official position of the United States government," Clinton said at a news conference with the Turkish Foreign Minister. She repeated a claim that the Roadmap REQUIRES ISRAEL TO SURRENDER ALL OF JUDEA, SAMARIA AND GAZA, although the document only calls for the future borders of Israel and a new PA state to be negotiated.

The letter also states, "I remain committed to my June 24, 2002 vision of two states living side by side in peace and security as the key to peace, and to the road map as the route to get there. UNDER THE ROAD MAP, PALESTINIANS MUST UNDERTAKE AN IMMEDIATE CESSATION OF ARMED ACTIVITY AND ALL ACTS OF VIOLENCE AGAINST ISRAELIS ANYWHERE, AND ALL OFFICIAL PALESTINIAN INSTITUTIONS MUST END INCITEMENT AGAINST ISRAEL."

"We accept these results… with sportsmanship and in a democratic way and we accept that the ruling camp has won the parliamentary majority," Nasrallah said in a televised address, a day after the surprise victory by the anti-Syrian coalition. The United States, which backs that "March 14" alliance, renewed its support to the group, which also enjoys the backing of regional heavyweights Saudi Arabia and Egypt. President Barack Obama said Washington would "continue to support a sovereign and independent Lebanon, committed to peace."

"It is our sincere hope that the next government will continue along the path towards building a sovereign, independent and stable Lebanon," he said in a statement. THEIR LOSS IS A MAJOR BLOW TO HEZBOLLAH'S PATRONS, SYRIA AND IRAN, where hardline President Mahmoud Ahmadinejad will also be competing against rivals who advocate less confrontation with the West in an election this week. Despite his coalition's defeat, Nasrallah said the result showed his group still enjoyed massive popular support.

Hariri has previously said the opposition could join a unity government, but without veto power. Hezbollah, classified by the United States as a terrorist organisation, sees veto rights as vital to fend off any challenge to its status as an armed group resisting Israel. LEBANON'S RIVAL CAMPS ARE AT ODDS OVER HEZBOLLAH'S GUERRILLA FORCE, MORE POWERFUL THAN THE LEBANESE ARMY, AND RELATIONS WITH SYRIA, WHICH DOMINATED LEBANON FOR THREE DECADES UNTIL 2005.

The free "Green Dam-Youth Escort" software, developed by Jinhui Computer System Engineering Co, can effectively filter "unhealthy words and images," the document said. The requirement is "in order to consolidate the achievements of the online campaign against pornography, combine punishment and prevention, protect the healthy growth of young people, and promote the Internet's healthy and orderly development," it said.

China already has a system to block websites deemed objectionable. Internet police monitor sites, blogs and other online venues for pornographic or politically sensitive content. "Summer vacation is coming up, and many Chinese parents worry about what their children will see on the Internet. That's the purpose of the software," Jinhui founder Bryan Zhang said.

"The global financial crisis has yet to have an impact on major arms companies' revenues, profits and order backlogs," Sipri said. Peace-keeping operations - which also benefit defence firms - rose 11%. Missions were launched in trouble spots such as Darfur and the Democratic Republic of the Congo. "Another record was set, with the total of international peace operation personnel reaching 187,586," said Sipri, or Stockholm International Peace Research Institute.

As the world's aerospace and defence industry prepares for next week's Paris air show centenary, it seems much of the focus is set to shift away from troubled civilian aircraft makers, which are struggling with reduced orders from recession-hit airlines, towards the companies that make fighter jets and other military hardware. IN TOTAL, THE 100 LEADING DEFENCE MANUFACTURERS SOLD ARMS WORTH $347BN DURING 2007, the most recent year for which reliable data are available. Almost all the companies were American or European. Some 61% of the total was accounted for by 44 US companies, with 32 West European companies accounting for a further 31%. Other companies were Russian, Japanese, Israeli and Indian.

High levels of military spending can cause economic difficulties for even the wealthiest of nations, Sipri insisted. "During the eight-year presidency of George W Bush, US military expenditure increased to the highest level in real terms since World War Two," Sipri said. "THIS INCREASE HAS CONTRIBUTED TO SOARING BUDGET DEFICITS," the yearbook states, pointing to how both the Iraq and Afghanistan conflicts were funded "primarily through emergency supplemental appropriations outside the regular budgetary process", funded by borrowing.

The Tories won with 28.6%, beating Labour in Wales but failing to increase their total share significantly. The results have sent shockwaves through UK politics and led to renewed calls for Gordon Brown to quit as Prime Minister. The BNP gained a seat in Yorkshire and Humberside and in the North-West of England, where party leader Nick Griffin was elected - the first time the anti-immigration party has won seats at national elections.

Their result was condemned across the political spectrum, with both the Tories and Labour calling it a "sad day" for British politics. Conservative Member of the European Parliament (MEP) Daniel Hannan, whose YouTube attack on Gordon Brown became a worldwide hit, said Labour had endured its worst poll performance since it became a national party in the 1920s. "I AM NOT SURE PEOPLE HAVE A COMPLETE GRASP OF THE MAGNITUDE OF WHAT IS HAPPENING," HE TOLD BBC NEWS.

IT IS THE FIRST TIME SINCE 1922 LABOUR HAS FAILED TO COME FIRST IN A WELSH ELECTION, as its vote dropped by 12%. The results are likely to pile further pressure on Gordon Brown, who faces a crunch meeting of Labour MPs on Monday, which may decide his future. Former Lord Chancellor Lord Falconer earlier repeated his call for a new leader to re-unify the party. "I think unity will only come with a leader that the mainstream votes for," he said. In the English local elections held on Thursday the Conservatives got a projected 38% of the vote, the Lib Dems 28% and Labour 23%.

The European Parliament elections mark A VICTORY FOR CENTER-RIGHT AND RIGHT-WING PARTIES as voters punish the left in a vote marked by a historically low turnout. The center-right European People's Party (EPP) held on to its position as the largest grouping in the European Parliament, with provisional results giving them 267, or around 36 percent, of the assembly's 736 seats. The center-right's showing was even better than indicated by the EPP's results, as many euroskeptic members of the European Parliament are moving to other parliamentary groups.

The vote's biggest loser is the center-left, with the Party of European Socialists (PES) winning just 159 seats, 56 fewer than in the 2004 election. "Tonight is a very difficult evening for Socialists in many nations in Europe," Martin Schulz, lead candidate for Germany's Social Democrats and the floor leader for the PES in the European Parliament, said on Sunday evening.

The liberal Alliance of Liberals and Democrats for Europe (ALDE) also saw their support decline, winning 81 seats, a drop of 21. The Greens did better, however, gaining 11 seats to up their total to 54. The left-wing Left parliamentary group lost 7 seats to land with 34 members.

Among the election's biggest losers was the UK's Labour party, which saw its support drop from 19 seats to 12 and won just 15.3 percent of the vote - its worst post-war election result. It finished in third place behind the Conservatives (24 seats) and the euroskeptic United Kingdom Independence Party (14 seats). The vote is seen as a damning verdict on Labour, whose leader Gordon Brown is under increasing pressure to resign as prime minister due to an ongoing expense account scandal in the House of Commons.

COMPOUNDING LABOUR'S WOES, THE FAR-RIGHT BRITISH NATIONAL PARTY WON TWO SEATS IN THE EUROPEAN PARLIAMENT FOR THE FIRST TIME. The BNP gained the seats in northern England at the expense of Labour, which has been hurt by a scandal over politicians' expenses. Brown, who reshuffled his government after six ministers quit last week, was set to meet on Monday evening with Labour MPs, a number of whom have called on him to step down before a general election due within a year.

"It's a very, very bad defeat for us," Brown's deputy Labour leader Harriet Harman told BBC television. But Brown was "resilient" and would fight on, she said. Political commentators said he had a desperate political fight ahead after the disastrous European poll showing. The Daily Telegraph said Brown was "on the edge", while The Times declared him "out for the count."

The normally supportive Guardian newspaper, which last week turned against Brown and called on him to step down, said Brown was facing a "make or break" challenge to his leadership. The turmoil rattled markets last week, pushing the pound lower. INVESTORS ARE WARY OF UNCERTAINTY WHEN BRITAIN FACES ITS DEEPEST RECESSION SINCE WORLD WAR TWO AND THE BUDGET DEFICIT HAS REACHED A RECORD 175 BILLION POUNDS.

They analyzed samples from people infected with the new H1N1 swine flu virus, which has been confirmed in more than 19,000 people in 64 countries, killing about 120. US health officials say this number reflects only a fraction of the true number of cases. "This virus most likely evolved from recent swine viruses," Gerardo Nava of the National Autonomous University of Mexico and colleagues wrote in their report, published in the online journal Eurosurveillance.

"THESE FINDINGS INDICATE THAT DOMESTIC PIGS IN NORTH AMERICA MAY HAVE A CENTRAL ROLE IN THE GENERATION AND MAINTENANCE OF THIS VIRUS." The global pork industry has rushed to defend pig products, saying pig meat is no danger to people. But health experts have also noted there is very little surveillance done to track influenza among pigs - even though the virus is very common in the animals and just as transmissible as it is among people. Flu viruses have also been shown to pass from pigs to people and from people to pigs.

"These observations also reiterate the potential risk of pig populations as the source of the next influenza virus pandemic," Nava and colleagues wrote. "Although the role of swine as 'mixing vessels' for influenza A(H1N1) viruses was established more than a decade ago, it appears that the policy makers and scientific community have underestimated it."

Some right-leaning parties said the results vindicated their reluctance to spend more on company bailouts and fiscal stimulus amid the global economic crisis.

"Tonight is a very difficult evening for Socialists in many nations in Europe," Martin Schulz, the leader of the Socialists in the European Parliament, told party faithful in Brussels via video link from Berlin. "(We will) continue to fight for social democracy in Europe." Many Socialists ran campaigns that slammed center-right leaders for failing to rein in financial markets and spend enough to stimulate faltering economies.

Graham Watson, leader of the EU's center-right Liberal Democrat grouping, said early results suggested a rejection of the Socialist approach. "PEOPLE DON'T WANT A RETURN TO SOCIALISM and that's why the majority here will be a center-right majority," he said.