The declines came a day after the Senate overwhelmingly approved the rescue package. The bill now goes to the House of Representatives for an expected vote Friday; House lawmakers stunned investors Monday by rejecting the bailout plan, although Senators added $100 billion in tax breaks and other sweeteners in a bid to win over enough dissenting House votes.

Even if the plan wins approval, oil market traders are skeptical that it will steady the teetering U.S. economy and reverse flagging demand for energy in the world's largest consumer. The plan would remove billions of dollars in bad mortgages and other toxic debt from the books of banks and other financial firms, though critics argue it doesn't go far enough to help ordinary Americans struggling with soaring costs for food and fuel and falling home prices.

"I THINK THE OIL MARKET BELIEVES THAT NO SIZE OF A RESCUE PLAN IS GOING TO BE ENOUGH TO STAVE OFF A RECESSION," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn.

"Modern man needs the Church precisely because he is a disoriented man: he doesn't know where he comes from or where he is going," said Archbishop Fisichella. "He continues to wonder about the reason for pain and death." The university rector said the currents of thought in vogue today and the tendency to reduce all questions to matters of science and technology isn't providing the answers man needs.

The Church, on the other hand, is "an expert in humanity, and knows the great questions that are in man's heart," continued the prelate. Archbishop Fisichella said the Church proposes "the question of truth, that is, of the meaning of life. There is no genuine liberty without truth or love," he added. He then made reference to Christ's crucifixion, where he said love "reached its summit."

"We are living, perhaps, through the most critical phase of Western culture," continued Archbishop Fisichella, "in which there is a lack of profound respect for Christianity, which is the very root of Western civilization itself. It is as if a child repudiated his own mother. Given that we make up only one body, the wounds and death of other Christians touch us personally, as if we ourselves were martyred."

The head of the Vatican gendarme, Domenico Giani, announced in a celebration Saturday at Castel Gandolfo that the corps is set to become part of the international force. The Interpol general assembly will confirm the membership when it meets early next month in Russia. At that time, the secretary-general of the governorate of Vatican City State, Bishop Renato Boccardo, will sign the agreement.

Benedict XVI addressed representatives of the corps Saturday, offering a brief greeting in which he expressed his "sincere gratitude for the competence and dedication" with which they serve the Church. Giani also announced that an "agreement of cooperation with Italian police," due to the "upsurge in criminal activity," is being studied, Vatican Radio reported.

As the world held its breath on the fate of America's $700 billion bank bailout plan, President Sarkozy was seeking the backing of European leaders for his own lifeboat.

Mr Brown also faced demands for action from British banks, furious that the Irish Republic's unilateral guarantee of all bank savings on Tuesday was robbing them of precious deposits. The British Bankers' Association, which represents high street banks, said that the move was anti-competitive and that it was raising the issue with Dublin. Some banks would like to see the UK respond with its own explicit guarantee.

Mr Sarkozy, whose country holds the European presidency, is seeking Mr Brown's support before an emergency summit, scheduled tentatively for Saturday, with Silvio Berlusconi, the Italian Prime Minister, and Angela Merkel, the German Chancellor. His proposal was greeted with scepticism in Britain and outright hostility in Germany. It appears to involve the creation of a Europe-wide emergency fund that would be used to prop up banks when national governments are unable to intervene. Ms Merkel said that Germany could not and would not issue a blank cheque for all banks, "regardless of whether they behave in a responsible manner or not".

After an intense weekend of negotiations, the draft of the bailout legislation before Congress had swelled to 42 pages. The following Friday, after almost a week of marathon talks between Treasury Secretary Henry Paulson and key lawmakers in both parties, the working version was up to 102 pages.

It went down to defeat Monday in the House, mostly at the hands of Republicans. Once the Senate was finished adding sweeteners Wednesday to entice reluctant House Republicans to change their minds and vote for the bailout, the bill heading for passage had grown to 451 pages. It was unclear whether it would expand still more as House leaders hunted for the votes needed to clear the bill.

It includes tax breaks for families and businesses, among other measures designed to win over sceptics. The plan will now go before the House of Representatives, which narrowly rejected a similar bill on Monday.

President George W Bush praised Senate leaders for making "vital improvements to the rescue package" and urged the House to approve the measures. News of the Senate vote had little effect on the Asian markets - Japan's main Nikkei index was down by 1.2% in afternoon trading in Tokyo, and Australian stocks had given up 1%.

He writes, "The US is a continental economy; it can find $700bn for its toxic debts. The UK is a medium-sized economy - but has giant banks. Royal Bank of Scotland has 2 trillion euros of assets; HSBC 1.6tn; Barclays 1.5tn; and Lloyds/TSB/HBOS 1.4tn. Together those 6.5tn euros of assets are four times Britain's GDP."

He adds, "Britain will need its own Paulson plan to respond, but has not got the financial firepower. The only viable British Paulson plan - bar a £500bn-plus international loan - may require us to join the euro to win the support of the whole of the European economy and European Central Bank as part of a pan-EU initiative to create 'good banks' for Europe."

Banks are petrified of lending to one another for more than one day, requiring central banks to flood their coffers with the money they need to stay in business. After yesterday's part-nationalisation of Belgo-Dutch banking giant Fortis and the nationalisation of the UK's Bradford & Bingley, Belgium-based Dexia, the biggest provider of lending to local governments in the world, could be the next financial institution to be rescued by taxpayers.

In an email from Belgian Prime Minister Yves Leterme, the country's federal government reached an agreement. With Belgium's regional assemblies to jointly support the bank, Bloomberg News reported. Even French President Nicolas Sarkozy has joined the rescue operation, despite the bank being headquartered in Belgium, issuing directions that the state investment body Caisse Des Depots offer Dexia funds.

Elsewhere, the German government backed by a series of private banks bailed out collapsing mortgage lender Hypo Real Estate reportedly to the tune of €35 billion, according to the German Ministry of Finance. The list of nationalisations is rapidly growing, with Iceland - not an EU member state - also nationalising the country's third largest bank, Glitner. The government has taken out a 75 percent stake in the firm in return for €600 million.

He assured that if the Treaty is unratified before the Conservatives take office then, "OF COURSE, WE WOULD HOLD A REFERENDUM." He then went further and suggested that if the Conservatives inherited a ratified Lisbon Treaty, they could still hold a referendum because without a public vote, the document will 'lack democratic legitimacy'.

He said, "We haven't made the decision. I certainly haven't ruled that out." It is reported that the wording has also yet to be decided, but the aim would be to give the new Conservative government a mandate to go to Brussels demanding a looser relationship with the EU.

William Hague, the shadow foreign secretary, is considering a special national ballot to help to give him the authority to renegotiate Britain's relationship with Europe. In a wide-ranging interview with The Sunday Times, Hague said: "THE INTEGRATION OF EUROPE WILL HAVE GONE TOO FAR. We won't let matters rest."

In a speech yesterday, Nicolas Sarkozy launched what Le Figaro describes as a "real crusade" against "speculators" and the "excesses of financial capitalism." He laid out a set of proposals including more regulation and control of banking activities and capping of the pay of the leaders of financial organisations. HE SAID "SELF REGULATION IS FINISHED."

German Finance Minister Peer Steinbruck said the crisis marks the beginning of a multi-polar world, where the US is no longer a superpower. HE BLAMED THE "IRRESPONSIBLE" POLICIES OF THE US FOR THE CRISIS, CLAIMING THEY WERE "SIMPLISTIC" AND "DANGEROUS". Steinbruck yesterday outlined a series of "draconian" financial regulations, according to Eurointelligence. The article reports that he wants to make short-selling illegal, and to impose legislation forcing banks to take on 20% of the credit risk when selling on credit for securitisation. The FT notes that other proposals included a crackdown on variable pay for bankers. France and Germany will set up a working group to consider tougher regulation.

In a landmark book called "The Trouble with Textbooks," Dr. Gary A. Tobin and Dennis R. Ybarra show how millions of American schoolchildren are taught anti-Semitic versions of Jewish history and faith, particularly in relation to Christianity and Islam, in passages that often amount to sheer libel.

Among the teachings that were found in American textbooks are the following distortions:

• Jesus was a "Palestinian", not a Jew.

• The Arab nations never attacked Israel. Arab-Israeli wars "just broke out," or Israel started them.

• Arabs nations want peace but Israel does not.

• Israel expelled all Palestinian refugees.

• Israel put the Palestinians in refugee camps in Arab lands, not Arab governments.

• Palestinian terrorism is nonexistent or minimal.

• Israel is not a victim of terrorism or terrorism against Israel is justified.

• U.S. support of Israel causes terrorism, including 9/11.

• The intifadas were children's revolts not involving adults or terrorism.

• Jews and Judaism are legalistic. Jews are only about the letter of the law and ignore its spirit.

Tobin said that these alarming distortions and inaccuracies were as much a product of "amateurish scholarship" as any anti-Semitic bias, but the effect, he noted, remains the same: "If the president of Iran wants to blast Israel at the U.N., he can use American textbooks to do so."

In moves described by the Euobserver as a "litmus test" for Europe's "security ambitions" France is testing the waters with a view to longer term plans to create two rapid reaction units and two larger reconstruction missions, SEEN AS AN ATTEMPT TO CHALLENGE ANGLO-AMERICAN DOMINATION OF NATO.

At informal talks in the French Channel resort of Deauville European defence ministers will study ways to better use the 27 nations' military resources - an early litmus test of the EU's willingness to live up to its security ambitions. The EU aims, by 2018, to be able to deploy if needed some 60,000 troops with air and naval support within 60 days, and for the mission to remain in operation for a year.

But as bank shares gyrate and the livelihoods of millions of people are at stake, the country I have loved for so long looks as parochial and myopic as a banana republic. Its politicians would apparently rather impoverish their own people - and ours - than risk their careers at the polls in five weeks' time by being seen to "bail out greed". THE GLOBAL FINANCIAL SYSTEM IS OUT OF CONTROL, AND IN WASHINGTON NO ONE IS IN CHARGE. No one has been in charge since Republicans and Democrats voted down the bank bailout Bill at 7.10pm on Monday night.

THIS WOEFUL ABSENCE OF LEADERSHIP IS A HAMMER BLOW TO AMERICA'S STATUS AS A GREAT POWER. I do not mean that America has ceded its economic dominance to Asia quite yet. China and India are still too dependent on the American consumer and foreign investment for that to happen. But America's reputation may not recover from having forfeited leadership at the time when its leadership is most desperately needed to restore confidence in a panicking world.

This is not the pragmatic, courageous America we thought we knew. This is an America which, offered a chance to save the world Hollywood-style, prefers to rerun the show that turned the Wall Street Crash into the Great Depression. The Bill was voted down by Congressmen and women in marginal seats who are fixated not on their place in history but on the November election. Everyone hopes that they will be bribed out of it on Thursday: that is what is keeping stock markets up. But I am not so sure.

The most flattering reading of the turmoil in Congress this week has been that this is democracy in action. Personally, I have never felt more attracted to benign dictatorship. But the reality is that politicians who are using their taxpayers as an excuse to do nothing are condemning those same taxpayers to suffer: savers, homeowners, employees and entrepreneurs struggling to make a go of the businesses that will create the wealth the world needs.

It should come as a desperate irony to every American that the only grown-ups today are in the capitals of Europe. EUROPEANS ARE FORGING THE WAY AHEAD AS WASHINGTON'S CHILDISH SULK BRINGS AMERICA TO A NEW NADIR.

The shortage began two weeks ago in Atlanta, the region's largest city, when oil refineries on the Gulf Coast were shut down by hurricanes Gustav and Ike earlier this month. Parts of north Georgia, western North Carolina and parts of Tennessee were also affected. The effects on motorists have been dramatic. Most service stations in Atlanta are out of gas, with plastic bags placed over the pumps or signs saying "out".

As a result, drivers are cruising the city hunting for gas - often with a fuel meter needle hovering close to empty. When they find gas, it's often above $4 a gallon. In an effort to bridge the gap in the supply chain, Georgia Gov. Sonny Perdue asked President George W. Bush on Monday to consider releasing crude oil from the strategic petroleum reserve to refineries in the Gulf.

This came on top of a decision by the U.S. Environmental Protection Agency last week to loosen restrictions on fuel sulfur content as another measure aimed at increasing supply. But the shortage was also driving up demand as nervous motorists buy more gas than usual.

The plan needs support in the Senate and House of Representatives, which rejected a similar bill on Monday. Senate Democrat Harry Reid said he hoped a strong show of bipartisanship would "spark the House to do the same". US presidential hopefuls John McCain and Barack Obama are returning from the campaign trail for the vote, which is due to begin late on Wednesday.

To get through the Senate, the bill will require the backing by 60 of the 100 senators. It would then return to the House of Representatives on Thursday. Some members of Congress continue to press for more fundamental changes to the bill, says the BBC's Americas editor Justin Webb. President George W Bush has warned of "painful and lasting" consequences for the US should Congress fail to agree a rescue plan.

In other developments: The European Union outlines its own proposals for reforming banking regulation which, if approved, could see dramatic changes to the way in which banks operate. RUSSIAN PRIME MINISTER VLADIMIR PUTIN SAYS THE "IRRESPONSIBILITY" OF THE US FINANCIAL SYSTEM IS TO BLAME FOR THE CRISIS.