High-level discussions among top advisers have escalated in the past week, with the most senior administration officials in continuous talks about the future of the prison camp at Guantanamo Bay - and how it will be dramatically changed and/or closed in the wake of the Supreme Court's ruling that gave detainees there access to federal courts.

Sources have confirmed that President Bush is expected to be briefed on these pressing GTMO issues - and may reach a decision on the future of the naval base as a prison for al Qaeda suspects - before he leaves for the G8 on Saturday. An announcement, however, is not expected before he leaves the country.

High-level administration officials say the Court's decision dramatically changes the legal landscape - and raises questions about whether the government has solid evidence to present to federal judges to justify ongoing detentions.

Dozens of people were hurt, at least seven critically, in the rampage on Jaffa Road, in the city centre. A police officer shot the driver of the bulldozer dead after a struggle in the vehicle's cab. Police said the attacker, aged 30, was from east Jerusalem, with no known affiliations to militant groups.

Israeli government spokesman Mark Regev told the BBC that an initial inquiry indicated the attacker had been acting alone. Prime Minister Ehud Olmert called the incident a terrorist attack, and condemned it as "an act of senseless murderous violence".

An aide to the Palestinian Authority President, Mahmoud Abbas, said the attack was an attempt to wreck peace negotiations, and urged a restrained response from Israel. The Palestinian Islamist movement Hamas, which controls Gaza and is maintaining a fragile truce with Israel, denied responsibility. Hamas added that it was a "natural" response to "a continued aggression against our people in the West Bank and Jerusalem".

Work on the two vessels is to go to shipyards at Govan in Glasgow and Rosyth in Fife, as well as Barrow in Furness and Portsmouth. The ships - 280 metres long and capable of carrying up to 40 planes - are due in service in 2014 and 2016. Each ship will be a similar size to the ocean liner, the QE2, with a flight deck the size of three football pitches. This will make them more than three times the size of the existing Invincible-class carriers.

Each vessel will be crewed by 1,450 sailors and airmen. The building of the two aircraft carriers is expected to secure a total of 10,000 jobs across the UK. Although both will eventually carry the new Joint Strike Fighter aircraft, those will not be ready on time for when the ships enter service. This means that at first, the ships will carry the ageing Harrier aircraft instead.

BBC defence correspondent Caroline Wyatt said the Navy sees the new carriers as its future flagships to replace Ark Royal and Illustrious, transforming Britain's ability to operate in hostile waters. Our correspondent added that the project is going ahead DESPITE SERIOUS MISGIVINGS AMONG SOME IN THE MILITARY ABOUT THE HUGE FINANCIAL BURDEN they will place on a defence budget already under severe pressure.

MORTGAGE APPROVALS PLUNGED BY AN ASTONISHING 28% IN MAY AND WERE 64% LOWER THAN A YEAR EARLIER. Fears of a continued and prolonged fall in house prices were heightened and the scale and speed of the slowdown have surprised even the housing market bears. There was no respite from the dire mood in the house building industry. Taylor Wimpey told the Stock Exchange that it had not been able to finalise a cash-raising exercise with shareholders and that it might be in breach of banking covenants next year. It is to cut 900 jobs and close 13 regional offices.

Tuesday brought grim news from manufacturing. A survey of purchasing managers (CIPS) revealed that output had fallen at its sharpest rate in nearly a decade. Manufacturing has been seen as one potential bright spot for the economy as exporters benefited from the weaker pound. It was not looking quite so bright by Tuesday evening. Wednesday brought the shock profits warning and news of a sharp drop in sales from the high street giant Marks & Spencer.

The preliminary estimate of growth in the second quarter will be out soon. IF IT IS NEGATIVE AND STAYS THAT WAY AFTER FURTHER REVISIONS THEN THE FIRST STAGE OF A TECHNICAL RECESSION WILL BE IN PLACE.

A period of extremely warm temperatures started as of this weekend and will last at least three weeks, meteorologists in the region said. They warned that temperatures - even above 40 degrees Celsius - may be set creating temperature highs not seen in the last 100 years.

The first registered victim of the heat wave was a construction worker who collapsed and died in Zagreb on Monday. On the same day more than 700 people sought medical assistance in Zagreb and 500 in Sarajevo. A farmer near Bosnia's southern town of Mostar was also killed by the severe heat while working his land. Medical workers warned the population to remain indoors between 11:00 and 17:00 and drink plenty of water.

The mercury in Serbia has topped 36 degrees Celsius over the past three days. The heat wave in Macedonia has led the national Crisis Management Centre there to warn of possible wildfires due to the tinder dry conditions.

Barbara Wilding, the Chief Constable of South Wales, says family ties have been abandoned in place of "tribal loyalty" among young gang members, who have become "almost feral". Ms Wilding, the longest-serving female chief constable, said that social breakdown means violence and drugs has become a way of life in deprived parts of many larger English cities.

She said: "In many of our larger cities, in areas of extreme deprivation, there are almost feral groups of very angry young people. Many have experienced family breakdown, and in place of parental and family role models, the gang culture is now established. Tribal loyalty has replaced family loyalty and gang culture based on violence and drugs is a way of life."

"Probably we will be obliged to call into question or postpone the 10 percent objective," said French ecology minister Nathalie Kosciusko-Morizet speaking to reporters in Paris, according to the Reuters news agency. She added that developing a target for the controversial fuel source was "probably a mistake" and that the EU had proposed things the wrong way round: setting environmental and social criteria for the production of biofuels should have been developed first and then any target should have been drafted to match that.

While the European Commission has repeatedly argued biofuels policies have had a negligible impact on food costs, the UN Food and Agriculture organisation says that biofuels explain 10 percent of recent price rises. The International Monetary Fund puts this figure at 30 percent, a figure backed by the International Food Policy Research Institute. The World Bank, however, says that biofuels have contributed to 65 percent of the price rises.

The FTSE-100 index of leading company shares dropped 139 points to 5486.9 - a 2.5 per cent dive - as investors panicked over another rise in the oil price and the threat of runaway inflation. At one stage it was more than 150 points down. The stock market has now lost nearly 1,000 points since the 'false dawn' of May when some economists said the worst of the credit crunch was over.

There was also further dire news in the property market with house prices falling at their fastest rate since the depths of the early Nineties housing crash. One leading commentator, Seema Shack, property economist at Capital Economics, said the slump would now last into 2010.

There are now growing fears in the City that a recession is unavoidable and that it will be accompanied by a prolonged bear market in shares and a major housing crash.

The worst Midwest flooding since 1993 has generated images of swamped towns, cracked roads, washed-out bridges, overwhelmed dams, failed levees, broken sewage systems, stunted crops and water-logged refugees. The losses are in the billions of dollars and still mounting, as the costs of crop losses alone send shocks through the inflation-wracked world food system and threaten insurers.

The disaster has reminded policymakers of the decrepit state of U.S. infrastructure, stirring concerns similar to those following the deadly Minneapolis bridge collapse in 2007 and the flooding of New Orleans after Hurricane Katrina in 2005. Even before the latest flooding, a group representing engineers said the United States needed to spend about $1 trillion more than it does now to bring infrastructure up to par with modern needs and standards.

"The patch-and-pray approach simply won't succeed," said David Mongan, head of the American Society of Civil Engineers. But the group also said its five-year cost estimate was outdated and does not count the price of new roads, rails, and sewers required by a growing population, nor the cost to repair damage inflicted by the recent Midwest floods.

The central bank on Tuesday released the results of its most recent auction - the 15th since the program began in December. It's part of an ongoing effort to ease financial turmoil and credit stresses.

In the latest auction, commercial banks paid an interest rate of 2.340 percent for the 28-day loans. There were 77 bidders. The Fed received bids for $90.88 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday.

The Fed also said it will conduct two auctions in July. Banks will have an opportunity to bid on a slice of $75 billion in short-term loans in each auction. Wanting to avert a broader panic that could endanger the entire U.S. financial system, the Fed has taken a number of extraordinary actions to provide relief. In its broadest extension of lending authority since the 1930s, the central bank agreed in March to temporarily let investment firms obtain emergency loans directly from the Fed, a privilege that only commercial banks had been granted.

King Abdullah of Saudi Arabia, whose nation is the world's number one oil exporter, called on consumer countries to get used to high prices in comments published on Tuesday. "Consumer countries have to adapt to the prices and the mechanisms of the market," the king said in an interview published by the Kuwaiti daily Al-Siyassah.

"We have nothing to do with the current sharp increase in crude prices," he said reiterating the Saudi position that speculation, rising demand and the taxation of oil products in consumer countries were to blame. "These countries must reduce their taxes on fuel... if they want to contribute to easing the burden on ordinary consumers," he said.

A senior defense official told ABC News there is an "increasing likelihood" that Israel will carry out such an attack, a move that likely would prompt Iranian retaliation against, not just Israel, but against the United States as well.

The official identified two "red lines" that could trigger an Israeli offensive. The first is tied to when Iran's Natanz nuclear facility produces enough highly enriched uranium to make a nuclear weapon. According to the latest U.S. and Israeli intelligence assessments, that is likely to happen sometime in 2009, and could happen by the end of this year. "The red line is not when they get to that point, but before they get to that point," the official said. "We are in the window of vulnerability."

The second red line is connected to when Iran acquires the SA-20 air defense system it is buying from Russia. The Israelis may want to strike before that system - which would make an attack much more difficult - is put in place. Some Pentagon officials also worry that Israel may be determined to attack before a new U.S. president, who may be less supportive, is sworn in next January.

In this particular case, Mr Kaczynski may well end up having the final say because, even though the Polish parliament has already approved it, he must sign it to complete the ratification process. But Poland's Prime Minister Donald Tusk - who actually shapes much of the country's foreign policy - says EU leaders should search for ways to implement the Lisbon Treaty.

Asked by the newspaper Dziennik whether he would ratify the Lisbon Treaty, Mr Kaczynski replied: "At this moment, it's pointless". He did not rule out ratifying it in the future. "It's difficult to say how this will end. However, it's not serious to say, 'if there is no treaty, there is no EU'? The EU worked, is working and will work," he told the newspaper.

"The president wants to position himself as the defender of the remnants of Polish sovereignty because it appeals to a quarter to a third of the electorate," said Pawel Swieboda, director of an EU think-tank, DemosEuropa. On the day France takes over the EU presidency, its leaders might be forgiven for wondering what is the official Polish policy.

This marks the third animal-human hybrid embryo licence to be issued by Human Fertilisation and Embryology Authority and the first since the Commons voted in favour of this controversial research last month. An HFEA spokesman said it had approved an application from the Clinical Sciences Research Institute, University of Warwick, for the creation of hybrid embryos. The centre has been offered a 12 month licence with effect from today, July 1.

"We will take skin cells from patients who have a mutation for certain kinds of heart disease (cardiomyopathy, which makes the heart lose its pumping strength) and put them into pig eggs after their chromosomes have been removed. We will then make embryos so that we can attempt to derive embryonic stem cells which will allow us to study some of the molecular mechanisms associated with these heart diseases.

"Ultimately they will help us to understand where some of the problems associated with these diseases arise and they could also provide models for the pharmaceutical industry to test new drugs. We will effectively be creating and studying these diseases in a dish.

Dutch coffee shop owners claim the law, which has effectively put a stop to smoking the milder varieties of cannabis cigarette, threatens to put hundreds of them out of business. Mark Jacobsen, chairman of the BCD, a nationwide association of coffee shop owners, said proper implementation of it would require inspectors to check each cannabis joint for tobacco content.

He said: "It's absurd. In other countries they look to see whether you have marijuana in your cigarette, here they'll look to see if you've got cigarette in your marijuana." A catering industry spokesman said 1,600 coffee shops across the country have been put up for sale because their owners were convinced their businesses were doomed. Dutch coffee shops are licensed to sell small quantities of cannabis to adults over 18.