Until Mr Obama takes office on Jan 20, the United States must make do with THE LAME DUCK LEADERSHIP OF PRESIDENT GEORGE W BUSH. This creates an obvious window for America's opponents and friends alike to exploit.

RUSSIA AND FRANCE HAVE ALREADY SEIZED THEIR CHANCE. The Kremlin chose the day of Mr Obama's victory speech to deploy nuclear-capable missiles in Russia's Baltic enclave of Kaliningrad, bordering Poland and Lithuania, both members of Nato and the European Union. Moscow also announced a package of constitutional reforms apparently designed to allow Vladimir Putin, now prime minister, to return to the presidency and serve another 12 years at the pinnacle of power. RUSSIA MADE THESE MOVES SECURE IN THE KNOWLEDGE THAT A LEADERLESS AMERICAN ADMINISTRATION WOULD NOT BE ABLE TO REACT.

FRANCE, WHICH PRESENTLY HOLDS THE EU'S PRESIDENCY, ALSO SEIZED THE MOMENT. Paris has quietly proposed to begin formal talks between Russia and the EU on a new partnership agreement, a process which had been frozen after the war in Georgia in August. If this goes ahead – and America is in no position to protest – Russia will escape the only real diplomatic penalty it suffered for invading its neighbour.

Other countries may also exploit Washington's power vacuum. Perhaps the most dangerous – though remote – possibility is that AL-QAEDA may try to disrupt the entire transition from one president to another BY MOUNTING A SPECTACULAR ATTACK IN THE AMERICAN HOMELAND. This presents an obvious opportunity, but whether the terrorist network is still capable of this kind of action is open to doubt.

Obama needs to pump serious cash into the economy in a way that promotes his long-term priorities. That means billions for energy-efficient and climate-friendly infrastructure like wind turbines, solar panels and mass transit, but nothing for new sprawl roads that ravage nature and promote gas-guzzling. That means stronger levees and restored wetlands that will help protect New Orleans from the next storm, but no more traditional pork-barrel water projects that destroy wetlands and waste money. Mostly, it means revamping Washington's dysfunctional method of selecting and funding infrastructure projects.

AMERICA'S INFRASTRUCTURE IS BROKEN, with more than 150,000 structurally deficient bridges, 3,500 unsafe dams and antiquated sewer systems that need an estimated $400 billion worth of improvements. That's a big long-term problem for America's economic competitiveness.

To jump-start the economy, Obama needs to spread hundreds of billions of dollars, and he'd be wise to start with the currently underfunded efforts to restore the Everglades, coastal Louisiana and the Great Lakes; to repair crumbling dams, dikes, sewer pipes and bridges; to promote high-speed rail, light rail and other transit systems besieged by skyrocketing demand; even to accelerate research into renewable energy and alternative fuels.

Barack Obama's election on Tuesday set off international celebrations and ignited a fervor for the United States that has been unseen since the days immediately following the September 11, 2001, terror attacks.

To some observers, the international reaction has elevated America's president-elect to an unparalleled post: PRESIDENT OF THE WORLD. In Kenya, where Obama's father was born, a national holiday was declared on Thursday. In Indonesia, children danced at the school Obama attended when he was a young boy, embracing him as much for what he represents abroad as for the policies he advocates at home.

"PEOPLE FROM ALL OVER AFRICA, ESPECIALLY IN KENYA, WHERE THIS IS A HOLIDAY, ARE FEELING THAT THE MOST POWERFUL PERSON IN THE WORLD DOES NOT HAVE TO BE A WHITE GUY. That's a huge breakthrough for the United States and for humanity," said Walter Russell Mead, the Henry A. Kissinger senior fellow for U.S. Foreign Policy at the Council on Foreign Relations.

"THIS IS THE FALL OF THE BERLIN WALL TIMES TEN," Rama Yade, France's junior minister for human rights, told French radio. "On this morning, we all want to be American, so we can take a bite of this dream unfolding before our eyes."

Medvedev Wednesday proposed increasing the presidential term to six years from four years, a step the newspaper said was part of a plan drawn up by Vladislav Surkov, who serves as Medvedev's first deputy chief of staff. Under the plan, Medvedev could implement changes to the constitution and unpopular social reforms "SO THAT PUTIN COULD RETURN TO THE KREMLIN FOR A LONGER PERIOD," the newspaper said.

"Under this scenario Medvedev could resign early citing changes to the constitution and then presidential elections could take place in 2009," the newspaper said, citing the unidentified source close to the Kremlin. The paper said Putin, who is currently prime minister, could then rule for two six year terms, so from 2009 to 2021. The paper cited Putin's spokesman as saying he saw no reason for Putin to return to power in 2009.

INVESTORS, ALREADY JITTERY OVER THE IMPACT OF THE FINANCIAL CRISIS ON RUSSIA'S ECONOMIC BOOM, ARE TRYING TO WORK OUT WHO IS REALLY IN CHARGE OF RUSSIA, the biggest question for those seeking to ascertain political risk. They are seeking any details on how the current set up - with Medvedev as president and Putin as prime minister - could change. During Medvedev's speech Wednesday the Russian stock market erased most of the gains it made earlier in the day.

Interpol's acting President, Arturo Herrera Verdugo, handed an Interpol flag to the secretary-general of the governorate of Vatican City, Bishop Renato Boccardo. Monsignor Boccardo said the Holy See was joining Interpol because it "shared its views on dealing with global challenges". The Vatican set up new anti terrorism units earlier this year.

Although the Vatican plays down terrorist threats it has stepped up security, with visitors to St Peter's Basilica required to pass through metal detectors. Its 160 strong security force, the Vatican corps of gendarmes, is staffed entirely by Italians.

The gendarme corps is distinct from the Swiss Guard, the Pope's personal protection force, but works closely with it. Domenico Giani, the corps commander, said the Holy See was also considering a new "agreement of cooperation with Italian police," due to the "upsurge in criminal activity". The duties of the Vatican gendarme corps include border control, crime prevention and investigation, and the enforcement of financial regulations. It was founded in 1816 by Pope Pius VII.

Wilton Daniel Gregory, 60, the Archbishop of Atlanta, said that in the past POPE BENEDICT XVI HAD HIMSELF SUGGESTED THAT THE ELECTION OF A BLACK PONTIFF WOULD "SEND A SPLENDID SIGNAL TO THE WORLD" ABOUT THE UNIVERSAL CHURCH.

Archbishop Gregory, who in 2001 became the first African American to head the US Bishops Conference, serving for three years, said that the election of Mr Obama was "a great step forward for humanity and a sign that in the United States the problem of racial discrimination has been overcome". Like Mr Obama Archbishop Gregory comes from Chicago, and was previously Bishop of Belleville, Illinois.

He said that recent Popes, beginning with John XXIII and Paul VI, had brought prelates "FROM ALL NATIONS AND RACES" to Rome to take up senior positions in the Curia, the Vatican hierarchy. This offered "AN INTERNATIONAL VISION OF A CHURCH RICH IN DIVERSITY", he told the Italian newspaper La Stampa.

Archbishop Gregory said that the next time cardinals gathered to elect a Pope they could "in their wisdom" choose an African pontiff. "My own election as head of the US Bishops Conference was an important signal. In 2001 the American bishops elected someone they respected regardless of his race, and the same thing could happen with the election of a Pope."

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy's struggles. While sales at Wal-Mart Stores Inc benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.

Adding to investors' list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market's unease ahead of Friday's October employment report, a widely watched barometer of the economy's health. "I think everybody kind of simultaneously - the consumers and businesses - is tightening belts so that's triggering a reasonably precipitous slowdown that's widespread," said Ed Hyland, global investment specialist at JP Morgan's Private Bank. "THIS IS SOMETHING THAT WE HAVEN'T REALLY SEEN, THIS LEVEL OF THIS RAPID AND SIGNIFICANT PULLBACK BOTH IN THE MARKET AND THE ECONOMY."

THERE HAD BEEN WIDESPREAD CALLS FROM INDUSTRY FOR A MAJOR CUT AS THE COUNTRY BEGINS TO FACE UP TO THE PROSPECT OF A DEEP RECESSION. It is the most dramatic cut since a two percentage point reduction in 1981. The cut comes after a raft of weak economic data recently. It is the first time the Bank has cut rates by more than half a percentage point since gaining its independence in 1997.

"This cut should help to ease conditions in the credit markets, and allow banks to pass the benefits on to their customers." BBC economics editor Hugh Pym said: "The Bank of England is using terms like 'very marked deterioration in the outlook' and 'severe contraction'. IT IS CLEARLY VERY CONCERNED ABOUT THE POSSIBILITY OF A PROLONGED RECESSION IN THE UK."

"The risks of high inflation have now evaporated, and because the bank is worried that inflation will now fall well below its target, it has felt the need to come up with this cut, which is much bigger than expected." Following the announcement the FTSE stock market gained more than 100 points, to stand down 86 points, or 1.90%, at 4444.67 by 12:45 in London.

Even the sound engineer got the applause of his life. The technician stood on the stage, in front of 25 huge US flags and counted "one, two, three" before saying with pleasure: "I am the sound check for the next president of the USA." The crowd cheered even louder, at least 70,000 were gathered in front of the stage, while around a quarter of a million were in the park. Most had been standing here since 3 p.m. and some had paid up to $1,000 dollars on the Internet for their tickets.

The technician was announcing more than just a sound check. IT WAS THE PROMISE OF A NEW TONE - FOR AMERICA AND FOR THE WORLD. Even conservative commentators recognized this. "We have just achieved an incredible milestone for which the world has to have more respect for the United States," Republican analyst Bill Bennett, a one-time Reagan aide, told CNN. The new president is a man with the name Barack Hussein Obama, who grew up in Hawaii and Indonesia, who has a white mother from Kansas and a black father from Kenya. A MAN WHO PROMISES "CHANGE" AND "HOPE" - A NEW AMERICA.

It was not just an election victory, it is a thunderous mandate - the most radical cry for change in the US since Ronald Reagan's victory in 1980. The Democrats have also triumphed in Congress. They have increased their majority in the House of Representatives and now also have one in the Senate. McCain's tactic in the final days of the race of raising fears of a sweeping Democratic takeover did not bear fruit. The new power relations mean that Obama can expect to have to deal with some very self-confident Democrats in Congress.

There is a new sound here after eight long years of Bush. And America is determined to listen to it.

People from Australia to India, Brazil to Russia watched with bated breath as the returns came in. Never before had an American presidential election generated so much international interest; never before had the globe been so clear about who it wanted Americans to cast their vote for.

With Barack Obama now having won the election, though, it seems likely that he won't enjoy much of a grace period. The list of problems facing him and the world is daunting, and already some of them are rearing their heads. Russian President Dmitry Medvedev announced on Wednesday that he would be stationing missiles in Kaliningrad, the island of Russian territory that borders European Union members Lithuania and Poland.

Afghan President Hamid Karzai also sent a clear message, saying that the killing of civilians by NATO troops in Afghanistan has to stop. "The war on terrorism cannot be fought in Afghan villages," he said. And not to be outdone, a statement from the Iranian military was broadcast on state radio in Iran warning that, should the country's airspace be violated, Iran's armed forces "will respond."

The group, with 29 representatives per creed, was established by the Pontifical Council for Interreligious Dialogue and representatives of the 138 Muslim leaders who sent an open letter to Benedict XVI and other Christian leaders last October. According to the Vatican press office, the panel will consider the seminar theme from two main angles: "theological and spiritual fundamentals" and "the dignity of the human person and mutual respect."

Archbishop Pier Luigi Celata, secretary of the Pontifical Council for Interreligious Dialogue, told Vatican Radio on Monday that the seminar seeks "to see which elements we share, because together we can give a coherent response of love for God, seeking to love each other."

The assembly emphasized the importance of "respect for life, the rights of men and women, as well as the distinction between the sociopolitical sphere and the religious sphere in the promotion of justice AND PEACE IN THE WORLD."

Doctor Ibrahim al Fanni showed the newspaper sketches outlining the demolition of al-Aqsa Mosque and the Marwani mosque (Solomon's stables) beneath al-Aksa, as well as a plan involving opening up the Fatimi Halls, which are also located under al-Aksa.

Dr al Fanni claims the halls would be turned into a Jewish Temple, and construction would gradually move to the upper part of the compound, taking over space in Al-Aqsa. "Plan B" would see the demolition of the Al-Aqsa Mosque and the construction of a Jewish "Royal Palace" on the same site, which Muslims believe was the spot from which the Prophet Muhammad started his journey into the heavens.

Now that he has won the White House following a two-year campaign that relied on soaring rhetoric about America's future, reality is setting in - how can Obama deliver on his lengthy list of promises? "HE'S MADE COMMENTS ON THE CAMPAIGN TRAIL THAT WILL HAVE TO BE RECONCILED WITH HIS POLICIES," said Republican political analyst Dylan Glenn.

Obama has offered tax cuts for working families, affordable and expanded health care and a speedy withdrawal from Iraq intended to save billions of dollars each month. "His notion about what he will do in Iraq, his notion about what he will do in terms of fiscal policy for this country will have to be translated into real live policy, and that will be a challenge," Glenn said.

Political analyst and FOX News contributor Juan Williams said Obama's biggest critics will come from the party's left wing, because he won't be able to fulfill all of his promises. "Barack Obama realizes if he does anything precipitous with regard to American military forces in a place like Iraq and puts anybody in danger or in some way allows terrorists to make some gains, he will suffer a tremendous backlash that could be politically damaging to him to the point that he never recovers," Williams said.

The passage of Proposition 8 in Tuesday's election represents a crushing political defeat for gay rights activists, who had hoped public opinion on the contentious issue had shifted enough since the state overwhelmingly passed an earlier gay marriage ban in 2000 to help them defeat the measure.

"We pick ourselves up and trudge on," Kate Kendell, executive director of the National Center for Lesbian Rights, said early Wednesday when it appeared the measure was headed for passage. "There has been enormous movement in favor of full equality in eight short years. That is the direction this is heading, and if it's not today or it's not tomorrow, it will be soon."

"People believe in the institution of marriage," Frank Schubert, co-manager of the Yes on 8 campaign said. "It's one institution that crosses ethnic divides, that crosses partisan divides. … People have stood up because they care about marriage and they care a great deal."

Jake Rowe, 27, and James Eslick, 29, were in the midst of getting married at Sacramento City Hall Wednesday morning when someone from the clerk's office stopped the wedding. The two men had planned to get married next year because "We held in hope that 8 would not pass," Rowe said. "I'm thoroughly surprised. I THOUGHT CALIFORNIANS HAD COME TO THE POINT WHERE THEY REALIZED DISCRIMINATION WASN'T RIGHT," he said.

The European Central Bank and the Bank of England are expected to cut interest rates by at least half a percentage point but new evidence of the damage done to the world economy by the global financial crisis prompted many investors to price in larger, record cuts in British and euro zone rates.

News of bigger-than-expected job losses in the United States, a sharp contraction in the world services sector, steep house price declines and a manufacturing retreat in Britain, all underscored the global economic gloom. Markets buckled under the weight of the grim data with Asian stocks slumping more than 6 percent, tracking Wall Street and Europe and wiping out U.S. election day gains sparked by relief that a nearly two-year presidential campaign had come to an end.

"After the world rally on the day of the presidential election investors have now shifted their focus to how fast, and how well the new administration will address the current economic issues," said Yoo Soo-min, analyst at Hyundai Securities. Oil prices fell toward $65 a barrel, reflecting expectations a global recession will severely undercut demand.