But the five Lebanese militants who arrived home Wednesday in an exchange of prisoners and dead soldiers with Israel returned to a country that seemed momentarily united in victory. The Lebanese government declared a national holiday, and almost the entire Lebanese Cabinet - politicians who are more often plotting one another's demise than appearing together in public - received the new national heroes at Beirut airport with flowers, rice, pomp and circumstance.

The contrast with the mood in Israel could hardly have been greater. The very fact that the Israeli government had to barter for the return of two soldiers captured in July 2006 by Hizballah was disappointing enough. The Israeli government had launched a 33-day war to regain its lost boys and destroy the Shi'ite militia but failed on both counts. Moreover, the fact that the two soldiers were returned in black coffins left many Israelis bitter about the price paid by their government: the release of five dangerous militants and the return of the remains of 185 others.

But for all the group-hugging in Lebanon, the real winner of the day was Hizballah leader Hassan Nasrallah, who had orchestrated the trade. HE CLAIMED THE LOPSIDED DEAL AS LEGITIMACY FOR BOTH HIS DECISION TO CAPTURE THOSE TWO ISRAELI SOLDIERS IN THE FIRST PLACE AND HIS WIDER STRATEGY OF ARMED CONFRONTATION WITH ISRAEL. For almost 60 years, Arabs facing Israel have had to choose between defeat and peace, but now, according to Nasrallah, the success of Hizballah's asymmetrical warfare has offered a model for all the movements in the Middle East dedicated to destroying Israel. "The essence of the region is the resistance," he said in a rare appearance to welcome the returning prisoners.

Benedict met with representatives of Muslim, Jewish, Hindu and Buddhist faiths for about 40 minutes during the Roman Catholic church's youth festival, which has drawn hundreds of thousands of pilgrims to Sydney.

"In a world threatened by sinister and indiscriminate forms of violence, the unified voice of religious people urges nations and communities TO RESOLVE CONFLICTS THROUGH PEACEFUL MEANS and with full regard for human dignity," Benedict told a gathering of clerics from different faiths in Sydney. Without mentioning terrorism directly, the pontiff said creating harmony between religion and public life was "all the more important at a time when some people have come to consider religion as a cause of division rather than a force for unity."

The remarks come as the Vatican tries to repair ties with the Islamic world that were strained by a speech he gave in 2006 that appeared to associate Islam with violence, outraging many Muslims.

The APS is also sponsoring public debate on the validity of global warming science. The leadership of the society had previously called the evidence for global warming "incontrovertible." In a posting to the APS forum, editor Jeffrey Marque explains, "There is a considerable presence within the scientific community of people who do not agree with the IPCC conclusion that anthropogenic CO2 emissions are very probably likely to be primarily responsible for global warming that has occurred since the Industrial Revolution."

The APS is opening its debate with the publication of a paper by Lord Monckton of Brenchley, which concludes that climate sensitivity - the rate of temperature change a given amount of greenhouse gas will cause - has been grossly overstated by IPCC modeling. A low sensitivity implies additional atmospheric CO2 will have little effect on global climate.

Larry Gould, Professor of Physics at the University of Hartford and Chairman of the New England Section of the APS, called Monckton's paper an "expose of the IPCC that details numerous exaggerations and extensive errors" Monckton, who was the science advisor to Britain's Thatcher administration, says natural variability is the cause of most of the Earth's recent warming. "In the past 70 years the Sun was more active than at almost any other time in the past 11,400 years ... MARS, JUPITER, NEPTUNE'S LARGEST MOON, AND PLUTO WARMED AT THE SAME TIME AS EARTH."

The measure certified Thursday would rename the Oceanside Water Pollution Control Plant the George W. Bush Sewage Plant. Supporters say the idea is to commemorate the mess they claim Bush has left behind by actions such as the war in Iraq.

Local Republicans say the plan stinks and they will oppose it.

The new framework, which could be announced in the autumn pre-Budget statement, would permit more borrowing as an alternative to increasing taxes. The Tories say such a move would be a final nail in the coffin of Gordon Brown's reputation for prudence. But the Treasury stressed no decision had yet been taken.

The BBC understands that officials are drafting a looser framework so that the Treasury would not have to break the present borrowing limit of 40% of national income.

Benedict, speaking to more than 200,000 pilgrims gathered for the Roman Catholic church's youth festival, expanded on a theme that has led him to be dubbed "the green pope." The crowd, massed on a disused wharf in Australia's largest city, regularly erupted in cheers that gave the event the feel of a sporting event.

"Some of you come from island nations whose very existence is threatened by rising water levels; others from nations suffering the effects of devastating drought," the pope said, referring to global warming. "Perhaps reluctantly we come to acknowledge that there are also scars which mark the surface of our earth: erosion, deforestation, the squandering of the world's mineral and ocean resources in order to fuel an insatiable consumption," he said.

Types of "poison" are afflicting the world's social environment, he said, such as substance abuse, along with the exaltation of violence and sexual degradation, for which he blamed television and the Internet. "The concerns for non-violence, sustainable development, justice and peace, and care for our environment are of vital importance for humanity," Benedict told the crowd.

The documents were deposited with the Italian foreign affairs ministry in Rome on Wednesday. The move came despite doubts over its future after the "no" vote in the Irish referendum. All EU states must ratify the treaty for it to come into force. The EU treaty has proved controversial with unsuccessful attempts in Parliament and the courts to force a referendum to be held on it.

Conservative MP Bill Cash sought a judicial review of the ratification process after the rejection from Ireland. And two High Court judges dismissed a claim by millionaire businessman Stuart Wheeler that there was a "legitimate expectation" of a public vote. Mr Cash branded the ratification a "gross impertinence" and, speaking in the Commons, accused ministers of "effectively bullying the Irish" for voting against it. Mr Wheeler has described the ratification as "absolutely atrocious behaviour" and on Friday will seek permission from a Court of Appeal judge to appeal against that decision.

He said he believed although the "instrument of ratification" has been deposited in Rome, THE GOVERNMENT STILL HAD THE RIGHT TO WITHDRAW IT AND REVERSE ITS DECISION. The "instruments of ratification" were signed by the Queen and Foreign Secretary David Miliband before being deposited in Rome.

The European Union is proposing to take control over Britain's sovereign wealth fund.
The EU, driven by the French, wants to have its own military planning capability and autonomous action backed up by credible military forces.
The European Union is proposing to develop a surveillance force to monitor borders.
The European Union is proposing to take control over the use of cross-border special intervention units.

The European Union is proposing to take more power over emergency action in the event of a disaster.
The European Union is pushing for an increase in non-custodial supervision orders for suspected criminals.

The European Union is to expand its communication activities.
Using the perceived threat of global warming, the EU is proposing to take powers key to the sovereignty of the nation-state.
The EU wants to impose a stealth tax on the carbon dioxide emissions of cars and light commercial vehicles.
The EU is attempting to expand its power over Britain's energy policy.
The European Union wants to control cosmetics.

He argues that Ireland's currency arrangement is likely to worsen the recession, becoming "part of the problem, not part of the solution". Unable to boost the economy by printing or borrowing money, and without the ability of the UK and US to allow the currency to fall, Ireland finds itself without the macro-economic tools to improve the situation. Thus, McWilliams concludes, the government may be forced to re-consider the currency question.

This means losses for investors, already totaling nearly half a trillion dollars, could mount even further over the next few months, with implications for business investment and the overall health of the economy. "YOU SEE A MASSIVE POTENTIAL FOR FINANCIAL MELTDOWN ON A GLOBAL SCALE," said T Marta, fixed-income strategist at RBC Capital Markets.

"People's horizons are moving out to 2009 and they are still not seeing any end in sight and with credit losses increasing that's really not good news," said Steve Goldman, market strategist at Weeden & Co, in Greenwich, Connecticut "The backstop with Freddie Mac and Fannie Mae doesn't deal with the heart of the problem: foreclosures, supply."

"No one knows where it is going to end for stocks," said Robert Macintosh, chief economist at Eaton Vance Corporation, in Boston. "Talk about a negative tone, NO MATTER WHAT ANYBODY SAYS OR DOES IT SEEMS TO GET WORSE." Especially hard hit, US bank shares fell this week to their lowest level since 1996 on fears of seemingly endless losses.

The deal, in which a notorious Lebanese attacker, four other militants and the bodies of 199 Arab fighters were traded for two dead Israeli soldiers, closed a painful chapter from Israel's 2006 war in Lebanon. Israel has been carrying out unequal prisoner swaps for decades, including handing over 4,600 Palestinian and Lebanese captives in 1983 in exchange for six captured Israeli soldiers. In the past it's even traded live prisoners for bodies, as it did Wednesday.

In today's world of asymmetric warfare - with militant groups increasingly focused on kidnapping as a way to pressure Israel and with the fight against terrorism now a worldwide challenge - the lopsided swaps could have graver consequences than in the past.

"WHAT WE'VE DONE NOW HAS MADE KIDNAPPING SOLDIERS THE MOST PROFITABLE GAME IN TOWN," said Israeli security expert Martin Sherman. "There is absolutely no reason why Hezbollah should not invest huge resources now, along with Hamas, in the next kidnapping." The issue is of immediate concern because the government is deeply involved in indirect negotiations to free its other captive soldier, Gilad Schalit, held by Hamas militants in the Gaza Strip. Unlike Ehud Goldwasser and Eldad Regev, the two soldiers whose bodies were returned Wednesday, Schalit is believed to be alive.

Gore hopes to deliver a major speech on the environment at Constitution Hall in Washington Thursday that will "press the reset button on how people are looking at the energy crisis and the climate crisis," said Brian Hardwick, spokesman for Gore's Alliance for Climate Protection. The former vice president-turned-elder statesman has achieved rock-star status within his party, not to mention a Nobel Prize, for his environmental activism. But Democrats' political troubles over the issue of gas prices and domestic drilling prompt some lawmakers to wonder about Gore's timing.

The question some Democrats have is whether a high-profile speech about the importance of protecting the environment might be exploited by Republicans who want to portray their ideological opponents as caring more about polar bears than Americans who have had to pay record prices for gasoline. Republicans are pouncing on Gore's re-emergence, holding it up as proof that Democrats favor environmental policies that further escalate energy costs.

"Mr. Gore will yet again call attention to the policies called for by radical environmentalists that would result in even higher gas prices," said Michael Steel, spokesman for House Republican Leader John Boehner (Ohio). "People's anger about a lot of things is crystallized as a result of the gas prices," said Lautenberg. "The anger is focused by the visibility [of inflated prices] at the pump."

During an interview on C-SPAN, Peterson stressed the need for Congress to act now to address the nation's energy crisis. Amid the partisan bickering on Capitol Hill, Peterson and Rep. Neil Abercrombie (D-Hawaii) are leading a bipartisan group of lawmakers seeking consensus on energy legislation.

Peterson, who is not seeking re-election, said, "Public pressure is building." He added that anti-drilling members of Congress were strongly criticized by their constituents during the July 4 recess. Abercrombie said, "You can't stand in front of a wave." He claimed the public is tired of the political games politicians are playing on gas prices.

The unknown group attacked soldiers in the town two weeks ago, killing nine people including a pregnant woman. Bonny Island is home to a major oil and gas export terminal but production has not been affected.

In Bonny, youth leader Kingsley Adonis Pepple said people took the militant's threat seriously. "They were handing out copies of this article to people in the street. There was panic. People packed up their entire family into a boat and fled." Bonny is a city of over 100,000 people, many of whom work in the oil industry.

The new multi-million dollar Liquefied Natural Gas export terminal is nearby. Shell announced on Tuesday that a pipeline leading to Bonny Island, attacked by militants two months ago, had been repaired and production resumed. Militant attacks on oil infrastructure are partly responsible for Nigeria's oil exports being cut by around a quarter in recent years. Militants have also kidnapped oil workers for ransom. Some groups are demanding a larger share of the oil wealth, but others are criminal gangs who make a living from extortion and oil theft, Delta activists say.

European Affairs Minister Dick Roche said "it is far, far too early to be talking about a referendum or about some specific policy to go forward". Foreign Minister Micheal Martin said Ireland would not be bullied. Mr Sarkozy will visit Dublin on Monday, seeking a way ahead after Irish voters rejected the EU treaty on 12 June.

France currently holds the EU's six-month rotating presidency and is keen to resolve the Lisbon Treaty stumbling block before its presidency ends. Mr Sarkozy was quoted as saying "THE IRISH WILL HAVE TO VOTE AGAIN". He was speaking to deputies from his conservative UMP party in Paris on Tuesday.

The EU is currently operating under the Nice Treaty, which Irish voters first rejected in 2001, but then accepted just over a year later, in a referendum re-run. But the EU constitution debacle in 2005 makes it harder to re-run the Lisbon Treaty referendum now. French and Dutch voters rejected the constitution in 2005 - and the EU decided against putting the constitution to another vote.