Peres said that there must be a separation between the Arabs of Jerusalem and the Jews, and that it must be in the form of a wall. "Jerusalem has become a security problem of late," Peres said. "We have to make both a wall and a bridge in Jerusalem. We have to ensure separation and also let them live differently, otherwise it will be like a pressure cooker that is liable to explode.

Without offering a carrot, there is no value to using a stick; sticks alone cannot educate. In the meanwhile, they are fortifying themselves, and Hamas is taking over the street, instilling fear on the Arab street in Jerusalem. It is not simple to solve this problem, and it can take time to find the right solution."

Fatah has arrested hundreds of Hamas members and leaders and is closing down businesses, schools and institutions associated with Hamas.

Hamas, which ousted Fatah from political power in Gaza after bloody clashes in June 2007, has charged that Palestinian Authority (PA) chairman Mahmoud Abbas and Prime Minister Salam Fayyad are cooperating with Israel by trying to wipe out Hamas's strength. Hamas has arrested more than 200 Fatah members in Gaza, and Fatah has retaliated in Judea and Samaria, causing an overflow in PA jails.

The survey was carried out by financial news channel CNBC Europe, with Mr Blair supported by 37 percent of respondents, Ms Merkel 23 percent and Mr Juncker 12 percent of pollsters, UK daily the Guardian reported. The British Labour leader was mentioned as a possible candidate for the new post already last year, mainly after French President Nicolas Sarkozy signalled he would back him. But the idea also sparked some objections in other European capitals, with Chancellor Merkel herself reportedly arguing against such a choice.

The creation of a new EU president post - to be held for two and a half years and partly replace the current six-month rotating chairmanship of the bloc's member states - is still an open question due to the failed referendum in Ireland on the Lisbon Treaty, which would have introduced institutional changes to how the EU is run, including the new position.

The current French EU presidency had been planning to hold a debate on the tasks of a bloc's new president and also on which personality should fill the position, and that of a new common foreign minister. After the Irish rejected the Lisbon Treaty in June, the main question mark remains on how the EU can move on with the institutional reform that needs to be approved by all member states.

A group of EU nations should form a "pioneering group" to deal with issues of European security and defense, Fischer said at the presentation of a European Council on Foreign Relations study. "We must recognize the reality of a 'multi-speed Europe' on defense," said Fischer, one of the council's co-chairs. "The reluctant should not be bullied, but neither must they hold the others back."

Fischer added that the bloc needed to take a "flexible approach" to cooperation between states on key issues in order to move forward after the Irish rejection of the Lisbon Treaty, which foresees creating a new post to steer European foreign and security policy. The report reprimanded EU nations for a haphazard system of inefficient military spending that is hindering the bloc from making better contributions to global security, according to the study's author, Nick Witney. He added that the EU will only be a worthwhile security partner with the United States if members pool their resources.

"For defense ministries, change and cooperation are deeply counter-cultural," Witney wrote. "It is down to heads of government to demand progress - and to do more to explain to their publics and parliaments how vital this is for the security of every European."

There are also expected to be written assurances on the issues of abortion, taxation and neutrality. The paper notes that in order to accommodate this timeframe, the appointment of the new EU Commission would need to be temporarily delayed until the winter of 2009 - after a second Irish referendum. A senior government source told the paper: "You'd have to arrive at that decision by a logical means by the end of this year. It's shaping that way. It's being kicked around."

Former minister Mary O'Rourke told a Dail committee yesterday "It is a very foolish route we are taking if we think we can have another referendum... The people said 'No'. There is no escaping that. We will not be able to carry another referendum. The sooner we realise that, wake up to it, the better."

A leader in the Irish Independent argues that the plan for a second referendum "deserves calm appraisal", but says that a recent poll from Open Europe showing it would be defeated "should not be dismissed out of hand". Fionnan Sheahan argues in the paper that a second Lisbon referendum is "inevitable, so the only question is when". He believes that an autumn 2009 poll "will allow the heat to be taken out of the situation for a while", but accepts that "a second referendum will be trickier than the first."

The FT notes that there was relatively little trading of blame in the aftermath of the breakdown. However, China and some other developing countries blamed wealthier countries for protecting their agricultural sectors while demanding poor countries cut tariffs on industrial goods and liberalise services markets.

The EU is far from blameless. During the Geneva talks, the EU did not make any new concessions on tariff reductions relative to the 2006 position. Last week, Mandelson attempted to spin that the EU had proposed reducing farm tariffs by 60% - up from the existing offer of 54%, calling it a "a very considerable improvement on our own part."

However, EU Agriculture Commissioner Mariann Fischer-Boel and French Trade Minister Anne-Marie Idrac admitted that the offer was "nothing new" - the difference between the two figures was merely down to whether tropical products were included in the tariff cut calculations or not. Trade negotiations are inevitably based on reciprocity: given the intransigence of the EU on market access, it's hardly surprising that large developing countries were wary of demands that they bring down their own tariffs. The question of safeguard mechanisms was merely the final straw that led to the collapse of talks.

The WSJ notes that by the end of 2009, there will be a new US President, a new EU Trade Commissioner and possibly a new Indian government - ALL WHICH COULD MAKE A NEW GLOBAL TRADE DEAL EVEN HARDER. Open Europe's Hugo Robinson was interviewed on Al-Jazeera English, discussing the breakdown of the talks.

The announcement from Iranian Vice President Gholam Reza Aghazadeh compounded skepticism about denting Tehran's nuclear defiance, just five days after Tehran stonewalled demands from six world powers that it halt activities capable of producing the fissile core of warheads. Besides demanding a suspension of uranium enrichment - a process that can create both fuel for nuclear reactors and payloads for atomic bombs - the six powers have been pressing Tehran to cooperate with the International Atomic Energy Agency's probe.

Iran, which is obligated as a signer of the Nuclear Non-proliferation Treaty not to develop nuclear arms, raised suspicions about its intentions when it admitted in 2002 that it had run a secret nuclear program for nearly two decades in violation of its commitment.

The Tehran regime insists it halted such work and is now only trying to produce fuel for nuclear reactors to generate electricity. It agreed on a "work plan" with the Vienna-based IAEA a year ago for U.N. inspectors to look into allegations Iran is still doing weapons work. Tehran dismisses the suspicions of the U.S. and allies, and Iranian President Mahmoud Ahmadinejad on Wednesday again vowed that his country would not "retreat one iota" from pursuing uranium enrichment.

The new figure is double the 3,000 uranium-enriching machines Iran had previously said it was operating. President Mahmoud Ahmadinejad's announcement, reported by the semi-official Fars news agency, comes a week after the U.S. reversed course in negotiations over Iran's nuclear program by sending a top American diplomat to participate in talks between Tehran and world powers.

The bend in policy had prompted hopes for a compromise under which Iran would agree to temporarily stop expansion of enrichment activities. But the White House said Saturday's development did not facilitate a resolution. "Announcements like this, whatever the true number is, are not productive and will only serve to further isolate Iran from the international community," said White House spokesman Carlton Carroll.

In the enrichment process, uranium gas is pumped into a series of centrifuges called "cascades." The gas is spun at supersonic speeds to remove impurities. Enriching at a low level produces nuclear fuel, but at a higher level it can produce the material for a warhead. The workhorse of Iran's enrichment program is the P-1 centrifuge, which is run in cascades of 164 machines. But Iranian officials confirmed in February that they had started using the IR-2 centrifuge, which can churn out enriched uranium at more than double the rate.

Experts say that if Tehran acquires and operates the S-300 missile batteries it would make any strike by Israel or the United States on Iran's nuclear facilities more difficult. Israeli defense sources said on Wednesday that Iran was set to receive the system, also known in the West as the SA-20, by the end of the year.

First delivery of the S-300 batteries was expected as soon as early September, one Israeli source said, though it could take six to 12 months for them to be deployed and operable. But Pentagon press secretary Geoff Morrell said: "We firmly believe, based upon our understanding of the situation, that the Iranians will not be receiving that Russian anti-aircraft system this year."

Morrell, who was responding to a query from Reuters, declined to elaborate on the reasons for the Pentagon's view. His comments expanded on remarks by Defense Secretary Robert Gates, who said on July 9 that it was "highly unlikely that those air defense missiles would be in Iranian hands any time soon."

Olmert has been dogged by corruption scandals and his decision to bow out of his centrist Kadima party's leadership contest and then to step down throws Israeli politics into fresh turmoil and could lead to an early national election.

Observers say Olmert, who once described himself as "indestructible", could remain for months as caretaker prime minister should the new Kadima leader fail to form a new government or if parliament dissolved itself and called a vote. That could buy Olmert more time to pursue U.S.-backed peace talks with Palestinian President Mahmoud Abbas and indirect negotiations with Syria. Neither track appears close to a breakthrough.

Consumer advocates taking part in a food safety conference in Orlando, Florida, this week said FOOD PRODUCED BY USING NANOTECHNOLOGY IS QUIETLY COMING ONTO THE MARKET, and they want U.S. authorities to force manufacturers to identify them.

Nanotechnology involves the design and manipulation of materials on molecular scales, smaller than the width of a human hair and invisible to the naked eye. Companies using nanotechnology say it can enhance the flavor or nutritional effectiveness of food.

U.S. health officials generally prefer not to place warning labels on products unless there are clear reasons for caution or concern. But consumer advocates say uncertainty over health consequences alone is sufficient cause to justify identifying nano-foods. "I THINK NANOTECHNOLOGY IS THE NEW GENETIC ENGINEERING. People just don't know what's going on, and it's moving so fast," Jane Kolodinsky, a consumer economist at the University of Vermont, said at the conference.

Oil has fallen more than $23 a barrel, or 16 percent, since peaking on July 3. Gasoline has slipped below $4 a gallon and is dropping fast as Americans drive less. Natural gas prices, which had risen the fastest this year as traders anticipated a hot summer, have fallen 33 percent since the beginning of the month.

Crude oil prices extended their decline on Tuesday, falling 2.5 percent, to $122.19 a barrel, their lowest level since the beginning of May. This helped spur a broad rally in the stock market, with all major indexes rising more than 2 percent. But stock markets still remain close to the lows of earlier this month, when they officially entered bear-market territory.

The declines in energy costs come after an equally sharp correction in the prices of many agricultural commodities like corn, wheat and rice, which took place a few weeks ago. These moves suggest to economists that GLOBAL MARKETS, IN A NEAR-PANIC EARLY THIS YEAR TO FIND PRICES HIGH ENOUGH TO ALLOCATE SCARCE SUPPLIES, OVERSHOT THE MARK AND BID PRICES TOO HIGH.

The Irish Daily Mail picks up on comments made by Irish Foreign Minister Micheál Martin yesterday, who dismissed the poll as outside "interference", and said Open Europe was "using Ireland as a battleground, as the pawn if you like, to manipulate the situation and to achieve their wider agenda of undermining the European Union itself."

Open Europe is quoted saying, "How is it interfering to ask people how they might vote in a future re-run referendum? It's not as though it hasn't happened before, look at Nice. It's clear that people don't want a referendum. The truth is the government is panicking, since its strategy of taking the country back to the polls is in trouble".

UK Shadow Foreign Minister William Hague had an article in the Irish Times over the weekend, arguing that "If Lisbon remains unratified by all EU member states, a Conservative government will put Britain's ratification of the treaty on ice and hold a referendum, RECOMMENDING A NO VOTE TO A DOCUMENT WE BELIEVE REPRESENTS AN OUTDATED CENTRALISING APPROACH TO THE EU. So the chances are growing that Ireland's voters will not be alone in saying No to Lisbon for long."

President Mahmoud Ahmadinejad's comments may irritate major powers which have offered the Islamic Republic economic and other incentives to persuade it to suspend enrichment activity that can have both civilian and military uses. Iran, the world's fourth-largest crude producer, says its nuclear activities are aimed solely at generating electricity. It says it is ready for negotiations but will not accept any pre-conditions or threats in a row that has helped send oil prices sharply higher, despite falls in the last two weeks.

"Iran does not negotiate with anyone over its obvious nuclear right," Ahmadinejad said in the city of Mashhad. Iran says it aims eventually to have 50,000 centrifuges to produce fuel for a planned network of power plants. Enriched uranium can also provide material for arms if refined further.

If running smoothly for long periods, 3,000 would be enough to make material for a warhead in a year, Western experts say. The United States has warned Iran that it will face more sanctions if it fails to meet the two-week deadline. It has not ruled out military action if diplomacy were to fail.

Most of those said such extreme action was acceptable to defend Islam from attack but a small number (4%) said it was ok to kill to promote it. However a clear majority overall (55%) rejected the idea, in a survey carried out by internet pollsters YouGov for a study of campus extremism.

It gathered the opinions of 600 Muslim and 800 non-Muslim students at 12 high-profile universities with active Islamic Societies (Isoc). The Centre for Social Cohesion, which commissioned the study, said it had revealed "broad and varied" opinions among Muslim students. But co-author Hannah Stuart said the findings on extremist views - twice as high among Isoc members - were "deeply alarming".

"Students in higher education are the future leaders of their communities yet significant numbers of them appear to hold beliefs which contravene liberal, democratic values," she said. The poll found that most Muslim students (54%) would like to see the formation of an Islamic party to represent their views at Westminster.