And if the greenback continues its slide in 2008, as expected, more and more criminals are likely to exchange euros for illicit goods, said Criminal Intelligence Service Canada in its annual report. "The US dollar weakened significantly against other major currencies in 2007 and according to some economists, is expected to depreciate further in 2008," said the report.

"As a consequence, other currencies - particularly the euro - are poised to weaken the US dollar's dominance as the currency of choice for international remittances and payments," it said. "This trend could also drive an increase in observed instances of bulk-cash transfers denominated in currencies other than Canadian and US dollars," the report added.

The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner's office and the Federal Deposit Insurance Corp., the FDIC said yesterday in a statement. The pace of bank closings is accelerating as financial firms have reported more than $500 billion in writedowns and credit losses since 2007. The FDIC's "problem" bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion.

Prior to yesterday, the FDIC had closed 36 banks since October 2000, according to a list at fdic.gov. The U.S. shut 12 banks in 2002, the highest in the period, and 2005 and 2006 had no closures.

U.S. bank regulators closed Florida's First Priority Bank on Aug. 1; Reno-based First National Bank of Nevada, Newport Beach, California-based First Heritage Bank, and Pasadena-based IndyMac Bancorp Inc. in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.

The most probable outcome is a long strength-sapping credit crunch alongside repeated dividend cuts and capital raisings. At the least it will be a headache for Britain's policymakers and at worst will tax severely government budgets that are already stretched.

British commercial property developers and house buyers both drank deeply at the well when loans were being made freely in past years, using increasing amounts of leverage despite the fact that the income the asset could generate was often not enough to cover the payments. Both markets have now come unstuck spectacularly.

British house prices are down about 11 percent from the peak and derivatives markets are pricing in another 20 percent fall from here. It is if anything a bit worse for commercial property, where derivatives traders are pricing in a fall of about a third from the peak in June 2007 to the end of 2009, according to Morgan Stanley calculations. While the borrowers will of course take the first hit, increasing numbers will default, forcing writedowns by banks.

An IOC official told The Times that because of "discrepancies" that have come to light about the age of He Kexin, the host nation's darling who won gold in both team and individual events, an official inquiry has been launched that could result in the gymnast being stripped of her medals.

The investigation was triggered as a US computer expert claimed yesterday to have uncovered Chinese government documents that he says prove she is only 14 - making her ineligible to compete in the Olympics - rather than 16, as officials in Beijing insist is her age. Mike Walker, a computer security expert, told The Times how he tracked down two documents that he says had been removed from a Chinese government website. The documents, he said, stated that He's birth date was January 1 1994 - making her 14 - and not January 1 1992, which is printed in her passport.

Bela Karolyi, the former gymnastics coach whose wife, Martha, coaches the US women's team, has repeatedly accused the Chinese of fielding underage female gymnasts. The ages of two other team members have also aroused suspicion: Jiang Yuyuan and Yang Yilin. Time magazine reported that government records, that have since disappeared, showed both girls to be 14. Gymnasts must be 16 to compete. The minimum age for female gymnasts was increased from 14 to 15 in 1981, and up to 16 in 1997, to protect the physical and mental health of young athletes.

Crude's rally mimicked the wild price swings seen last month and have at least temporarily halted oil's slide back toward $100 a barrel. A weaker US dollar and worries about tightening output from OPEC countries are also supporting prices.

Tensions with Russia about a deal between Washington and Poland to install a missile defense system in Eastern Europe - seen as a threat by Moscow - and the continued presence of Russia in Georgia contributed greatly to the bullish mood. Light, sweet crude for October delivery jumped $6 to $121.56 a barrel on the New York Mercantile Exchange. It was crude's highest trading level since August 7.

Four soldiers and four militiamen were killed. Before dawn the following morning, insurgents attacked two nearby towns, killing at least three more soldiers and 33 civilians. According to reports, the rebels hacked some of their victims to death with machetes. "They were killed as if like chickens," said a local army commander.

Since the 1960s, more than 120,000 people have been killed in the southern Philippines as Islamic separatists have battled government troops for control of parts of Mindanao. But this week's bloody events have pushed the region closer than ever to all-out war. On August 20, the Philippine government ordered police commandos into the area with orders to kill insurgents. The government has also reportedly sent a shipment of weapons to local militias. General Alexander Yano, head of the country's armed forces, called the insurgent attacks a "virtual declaration of war," while President Gloria Macapagal Arroyo ordered government troops to defend "every inch" of territory.

Only a few weeks ago, the decades-long conflict between the government and separatist fighters seemed to be inching toward a political solution. On August 4, negotiators for the Philippine government and the main insurgent group, the Moro Islamic Liberation Front (MILF), struck an agreement that would have set boundaries for an autonomous Muslim homeland, and, hopefully, dampened the insurgency. Yet, as has happened so often before in Mindanao, the center did not hold.

With recalcitrant insurgents determined to continue their armed struggle - and government police and soldiers deploying to meet them in battle - THAT COULD MEAN THAT THE PROSPECT OF PEACE IN THE PHILIPPINES' VIOLENT SOUTH HAS SLIPPED EVEN FURTHER FROM REACH.

The nation's largest greeting card company is rolling out same-sex wedding cards - featuring two tuxedos, overlapping hearts or intertwined flowers, with best wishes inside. "Two hearts. One promise," one says. Hallmark added the cards after California joined Massachusetts as the only US states with legal gay marriage. A handful of other states have recognized same-sex civil unions.

The language inside the cards is neutral, with no mention of wedding or marriage, making them also suitable for a commitment ceremony. Hallmark says the move is a response to consumer demand, not any political pressure. "It's our goal to be as relevant as possible to as many people as we can," Hallmark spokeswoman Sarah Gronberg Kolell said.

Hallmark's largest competitor, American Greetings Corp, has no plans to enter the market, saying its current offerings are general enough to speak to a lot of different relationships.

A presidential spokeswoman described the move as a "painful step", but said leaders were still open to talks. The government had agreed to expand an existing Muslim autonomous zone in a bid to end decades of violence. But Christian communities opposed the deal and when the Supreme Court blocked it, the rebels launched attacks.

Earlier this week, raids by guerrillas from the Moro Islamic Liberation Front (MILF) on several towns near the border of the existing autonomous zone in the southern island of Mindanao left at least 30 people dead. The government had hoped that the autonomy deal - which would see the existing region expanded by 712 villages - would kick-start talks with the rebels. But on 4 August the Supreme Court suspended the agreement after Christian lawmakers argued it was unconstitutional and would increase sectarian tensions.

Troops drove them out but the rebels then raided towns in the nearby province of Lanao del Norte. Tens of thousands of people have been displaced by the fighting, villages have been burned and shops looted.

Flying into Baghdad on an unannounced trip, Rice said the two sides were nearing an agreement after months of painstaking negotiations but stressed there were still unresolved issues, including when US soldiers will leave and what their operations will consist of until then. "The negotiators have taken this very, very far," she told reporters aboard her plane. "But there is no reason to believe that there is an agreement yet."

Iraqi and American officials told The Associated Press on Wednesday that negotiators had completed a draft agreement that extends the legal basis for US troops to remain in Iraq beyond the end of this year, while calling for them to move out of Iraqi cities as soon as June 30. A senior US military official in Washington said the deal is acceptable to the US side, subject to formal approval by President Bush. It also requires approval by Iraqi leaders, and some members of Iraq's Cabinet oppose some provisions. There are now about 140,000 US troops in Iraq.

Calling the flooding "catastrophic," Gov. Charlie Crist requested an emergency disaster declaration from the federal government to defray rising debris and response costs. The White House said the Federal Emergency Management Agency was reviewing the request. Flooding was reported in hundreds of homes in Brevard and St. Lucie counties, some by up to 5 feet of standing water. In three towns, rising waters backed up sewage systems. It wasn't immediately clear how many residents had been displaced or were stranded, but county officials reported making dozens of rescues.

"We can't even get out of our house," said Billie Dayton of Port St. Lucie, as waters lapped at her porch. "We're just hoping that it doesn't rain anymore." The storm could dump 30 inches of rain in some areas of Florida and the National Hurricane Center said up to 22 inches had already fallen near Melbourne, just south of Cape Canaveral on the state's central Atlantic coast.

Forecasters originally expected Fay to energize over the ocean and possibly become a hurricane before landing in Florida for the third time later this week. The erratic storm first struck Monday in the Florida Keys, then veered out to sea before traversing east across the state, briefly strengthening, then stalling. For much of Wednesday, the storm barely moved, dumping inches and inches of rain over coastal central Florida.

"Numb's the word," says the 192-year-old publication, which claims an accuracy rate of 80 to 85 percent for its forecasts that are prepared two years in advance. The almanac's 2009 edition, which goes on sale Tuesday, says at least two-thirds of the country can expect colder than average temperatures, with only the Far West and Southeast in line for near-normal readings. "This is going to be catastrophic for millions of people," said almanac editor Peter Geiger, noting that the frigid forecast combined with high prices for heating fuel is sure to compound problems households will face in keeping warm.

The almanac predicts above-normal snowfall for the Great Lakes and Midwest, especially during January and February, and above-normal precipitation for the Southwest in December and for the Southeast in January and February. The Northeast and Mid-Atlantic regions should be getting an unusually wet or snowy February, the almanac said. The forecasts, which are spelled out in three- and four-day periods for each region, are prepared by the almanac's reclusive prognosticator Caleb Weatherbee, who uses a secret formula based on sunspots, the position of the planets and the tidal action of the moon.

Weatherbee's outlook is borne out by e-mail comments that the almanac has received in recent days from readers who have spotted signs of nature that point to a rough winter, Geiger said. The signs range from an abundance of acorns already on the ground to the frequency of fog in August.

Secret negotiations have allegedly been taking place between BAE Systems and Saudi Arabia to double the current order of 72 Eurofighter Typhoons. The MoD is looking to sell off its third tranche of 88 advanced fighters in order to save money for other major projects as the defence budget is facing an annual shortfall of an estimated £2 billion. Defence industry sources have also suggested that there is "a real prospect" of two squadrons of about 48 Typhoons potentially being sold to Japan.

India has also been sounded out as an additional market to sell the aircraft with BAE in the running to win a £6 billion contract to replace the country's aging Russian fleet. The RAF already has 144 Typhoons ordered and the third batch of fighters designed to meet the Soviet threat has long been considered unnecessary by defence planners. With a significant shortfall in defence spending, that has come under severe pressure with the two wars in Iraq and Afghanistan, the MoD is desperate to cut some major projects.

Under a strict contract signed with the Eurofighter consortium the MoD would face paying huge penalties if it reneged on the 88 aircraft deal that would cost as much as actually buying them. But the potential Saudi deal would offer the MoD a way out of the contract for Tranche 3 although the Eurofighter consortium has refused to confirm or deny that this is an option.

The trip is raising fears that the new Cold War that has erupted in the Caucasus will spill over into the Middle East, long a battleground between East and West, and crush tentative hopes for peace. "Of course military and technical cooperation is the main issue. Weapons purchases are very important," said Mr Assad. "I think we should speed it up. Moreover, the West and Israel continue to put pressure on Russia."

Israel, like its main sponsor America, has developed close military ties with Georgia in recent years, with defence contractors supplying training and equipment to the small, US-backed state. As Syria renews its Soviet-era close ties with Moscow, many here fear that the Middle East could once again become a theatre for the two great powers to exert their spheres of influence, militarily and politically, in the volatile region.

And with Israel and the US providing military backing to Georgia, Russia appears set to respond in kind by supporting Syria. In a sign of warming ties, Mr al-Assad – a wily political operator keen to play regional powers off against each other – said he fully backed Russia's pursuit of its "legal interests" in its fight with Georgia. "On this issue we fully support Russia... Georgia started this crisis, but the West is blaming Russia," said the Syrian leader, who will meet with Dmitri Medvedev, the Russian president, during his two-day visit.

THE 2008 DROUGHT, THE MOST SERIOUS DROUGHT IN THE AREA IN THE PAST DECADE, aggravates the built-in, constant shortage of water in the West Bank. Rainfall this year in the northern West Bank was 64 percent of average, while in the southern sections of the West Bank, it was 55 percent. As a result, the water stored from rainfall has already been used. The Palestinian Water Authority estimates this year's water shortage in the West Bank at 42 to 69 million cubic meters. The total water consumption in the West Bank is 79 mcm. The PWA has already requested Mekorot – the Israel Water Company – for an emergency supply of eight mcm.

According to the World Health Organization, the per capita minimal amount of water needed for household and urban needs is one hundred liters a day. Due to the chronic water shortage, water consumption in the northern West Bank has dropped to one-third this amount. In Tubas, per capita consumption is 30 liters; in Jenin, it is 38 liters. In Nablus and the Southern Hebron Hills, the figure is slightly higher than fifty liters a day.

In comparison, average daily water consumption in Israeli cities is 235 liters, and 214 liters in local councils, 3.5 times higher than Palestinian consumption in the West Bank.

General Electric, the US industrial group, said it would cut its own use of water by 20% by 2012 and export water-saving and recycling technology to countries - often emerging economies - hit by shortages. Jeff Immelt, chief executive, said in Beijing: "We believe that, just as greenhouse gas emissions have been a big societal challenge, the same thing is true for water."

Lorraine Bolsinger, vice-president of GE's Ecomagination green technology division, added: "There is going to be a price on water that is going to reflect its scarcity in a way it doesn't today. We're going to see that change over time - certainly in emerging markets." The move by GE comes as scientists are warning that 50% of the world's nations will be hit by water shortages by 2025 and 75% by 2050. Barcelona is already importing water from France.

DROUGHT, ALREADY ONE SOURCE OF SURGING FOOD PRICES AND WATER SHORTAGES COULD PROMPT FRESH OUTBREAKS OF WAR AND TERRORISM AS GLOBAL WARMING, if unchecked, spreads desertification around the world and causes increasing crop failures, they say. A BILLION OF THE WORLD'S POOREST PEOPLE DRINK UNSAFE WATER, according to Unicef. Senior UN officials warned MEPs this year that NUCLEAR POWER PLANTS IN EUROPE AND THE US COULD FACE SHUTDOWN BECAUSE OF A LACK OF COOLING WATER, while the switch to biofuels was proving a big drain on dwindling supplies.