Saturday's announcement exposed a rift over tactics with President Mahmoud Ahmadinejad, who accepted Larijani's resignation and has taken an uncompromising approach in the nuclear standoff. Analysts say Saeed Jalili, the senior foreign ministry official replacing Larijani, is close to the president and his appointment showed that those determined to defy the West were gaining a greater influence in decision-making.

"This volume and speed of firing would continue," added Chaharbaghi, who is commander of artillery and missiles of the Guards' ground forces, according to the semi-official Fars news agency. The United States has never ruled out attacking Iran to end its defiance over the controversial Iranian nuclear programme, which the US alleges is aimed at making nuclear weapons but Iran insists is entirely peaceful.

Iran has for its part vowed never to initiate an attack but has also warned of a crushing response to any act of aggression against its soil. "If a war breaks out in the future, it will not last long because we will rub their noses in the dirt," said Chaharbaghi. "Now the enemy should ask themselves how many of their people they are ready to have sacrificed for their stupidity in attacking Iran," he said.

He said that the Guards' weapons were spread out throughout the country and so would not be affected by any isolated US strikes against military facilities. The Guards are Iran's elite ideological army and responsible for its most significant weapons such as the longer range Shahab-3 missile which has Israel and US bases in the Middle East within its range

Gordon Brown RULED OUT FURTHER EUROPEAN INTEGRATION FOR AT LEAST A DECADE yesterday as he sought to counter calls for a referendum on the latest transfer of power to Brussels.

Mr Brown left Lisbon insisting that the treaty agreed did not presage "fundamental change". HE WAS IMMEDIATELY CONTRADICTED BY ONE OF THE ARCHITECTS OF THE ORIGINAL EU CONSTITUTION, WHO SAID THAT THE NEW TREATY CONTAINED ALL OF ITS ESSENTIAL MEASURES.

Speaking at the end of the summit, Mr Brown said that he had won agreement for an EU declaration in December ruling out further institutional changes "for many years". Asked how long the moratorium would last, the Prime Minister pointed out that some of the provisions in the existing treaty did not come into effect until 2017.

"I will not support further institutional change over the next period," Mr Brown said, effectively threatening to veto any more treaties. But Jose Socrates, the Prime Minister of Portugal, said: "This treaty is not the end of the story because there is no end."

TONY BLAIR WAS PROPOSED AS THE FIRST "PRESIDENT OF EUROPE", a post created by the EU reform treaty, by President Sarkozy of France. Gordon Brown said: "Tony Blair would a great candidate for any significant international job."

This wildly rabid fiscal fuel is driving our American dollar to the cellar creating cheap goods for USA export and extraordinary values in American stores for foreigners. In reaction, other nations' currencies become stronger producing higher domestic costs for their own goods and services at home. To compete with this market aberration, those outside of the United States fired-up their own printing presses as well.

Now we have global currency storm clouds building where the collective is watering down cash in a massive global over-stimulation. It was reported Russia is printing at the rate of 50% annually and some in Asia are producing new money at rates between 12% and 20%. THIS SIMPLY CANNOT CONTINUE WITHOUT HARDCORE INFLATION FIRST, FOLLOWED BY HYPERINFLATION. Inevitably and economically, somebody(s) will crack and fall into a collapse.

Food and energy in America is well on its way to doubling in price within 12 months. Oil is straining against $90 and $4 wheat nears $10. Transportation requires millions of gallons of fuel in the U.S. to deliver goods and services. Food travels large distances to wholesale and retail distribution centres. MOST CHAIN GROCERY STORES, IF NOT CONTINUALLY REPLENISHED WOULD BE EMPTY IN 10 DAYS.

In monetary self defence, gold demand is rising exponentially and supply is falling. Miners cannot deliver fast enough to keep up with demand. Gold leasing and manipulation is nearing a crisis point where the "Big Five" short sellers are in supreme pain and close to an immediate covering debacle. With gold's price where it is today, massive SHORT COVERING BY THE COMMERCIALS COULD SKYROCKET GOLD PRICES IN HOURS.

We all hear tales of central banks dumping gold bullion under the so called mutual collaboration scheme designed to sell and smother gold by the ton. It's not working any more as the Sheiks and Chinese are overloaded with U.S. trading dollars and are only too happy to write huge checks for tons of gold trading their junky paper for real value in precious metals. As a consequence, gold is rising under building buying pressures and silver is following gold in the rally. INFLATION ADJUSTED GOLD SHOULD BE OVER $2,000 AND ITS ONLY $764 IN NOMINAL TERMS.

Greenspan pumped the USA economy by throwing cash and too loose credit at consumers in 2001-2005 to avoid a recession following the Nasdaq crash. If markets had been left to their own devices at the time, a probable mild recession would have appeared. Now it's been delayed but not defeated. WHAT COMES NEXT IS INFINITELY WORSE as first the Nasdaq bubble popped, and next the American consumer bubbles of housing, credit cards and jobs are flushed down the bowl. The Greenman has traded a probable mild recession for something unquestionably much worse.

IF YOU THOUGHT THE HOUSING MESS IS NOT ANY FUN, WATCH WHAT A GAZILLION CREDIT CARD FAILURES WILL DO TO THE BANKS IN 2008. Then the next follow-on problem is failing municipalities when consumers cannot pay real estate and other local taxes. My state of Michigan is a shining example of multiple failures growing worse by the day. Michigan is technically bankrupt and several other states are not far behind.

Over $69 billion was reported last month as going out of USA paper markets in a new turn of about-face. OUR ONLY DEFENSE IS TO PRINT MORE MONEY, CREATE MORE INFLATION OR, HORROR OF ALL HORRORS, RAISE INTEREST RATES, WHICH WOULD FINISH US OFF FOR GOOD.

The magnitude of the problems is indeed historic. Some of these events are old news as the world has seen and survived them before. However, this time it is indeed different. NEVER HAS THE GLOBAL SYSTEM BEEN FORCED TO CONTEND WITH SO MANY VERY SERIOUS PROBLEMS AT ONCE.

Somewhere, somehow, somebody of importance will step on a nasty trip-wire. It remains to be seen what the outcome could be but WE THINK IT WILL NOT BE PRETTY; BUT A LEGENDARY DISASTER.

It was a fine, even noble idea in its time. It was designed to make ethnic and religious minorities feel more at home, more appreciated and respected, and therefore better able to mesh with the larger society. It affirmed their culture. It gave dignity to difference. And in many ways it achieved its aims. Britain is a more open, diverse, energising, cosmopolitan environment than it was when I was growing up.

BUT THERE HAS BEEN A PRICE TO PAY, AND IT GROWS YEAR BY YEAR. Multiculturalism has led not to integration but to segregation. It has allowed groups to live separately, with no incentive to integrate and every incentive not to. IT WAS INTENDED TO PROMOTE TOLERANCE. INSTEAD THE RESULT HAS BEEN, IN COUNTRIES WHERE IT HAS BEEN TRIED, TO MAKE SOCIETIES MORE ABRASIVE, FRACTURED AND INTOLERANT THAN THEY ONCE WERE.

A SERIES OF EVENTS THAT BEGAN IN THE 1960S FUNDAMENTALLY CHANGED THE TERMS OF SOCIETY AND MORAL DEBATE. People began to see morality in terms of personal autonomy, existential choice or the will to power. But there was something else happening at the same time, of great consequence: the slow demise of morality itself, conceived as the moral bond linking individuals in the shared project of society.

IN 1961, SUICIDE CEASED TO BE A CRIME. This might seem a minor and obviously humane measure, but IT WAS THE BEGINNING OF THE END OF ENGLAND AS A CHRISTIAN COUNTRY; that is, one in which Christian ethics was reflected in law. It was a prelude to other and more significant reforms. IN 1967 ABORTION WAS LEGALISED, AS WAS HOMOSEXUAL BEHAVIOUR.

What happens when we lose moral consensus? Morality is reduced to taste. If there is no agreed moral truth, we cannot reason together. All truth becomes subjective or relative, no more than a construction, a narrative, one way among many of telling the story. Each represents a point of view, and each point of view is the expression of a group. Those who believe in traditional marriage are heterosexist. Political correctness, created to avoid stigmatising speech, becomes the supreme example of stigmatising speech.

One example: in 1957 the Wolfenden committee, then the cutting-edge of liberalism, declared that homosexual behaviour was a sin, but should not be a crime. In 2004, Rocco Buttiglione, a minister in the Italian Government, was chosen by the President of the European Commission, José Manuel Barroso, to be its justice commissioner. During questioning, he acknowledged that, as a Catholic, he believed that homosexual behaviour is a sin but should not be a crime. He was then disqualified from taking up office as his private moral convictions were "in direct contradiction of European law". HE DESCRIBED THIS AS THE "NEW TOTALITARIANISM".

Without a national culture, there is no nation. There are merely people-in-proximity. Whether this is sufficient to generate loyalty, belonging and a sense of the common good is an open question. National cultures make nations. Global cultures may yet break them.

Sir Jonathan Sacks is the Chief Rabbi. Extracted from "The Home We Build Together: Recreating Society -(Continuum)

The record prices, fuelled by increasingly insatiable worldwide demand, are expected to feed through to petrol and diesel over the next month. Already, the price of a litre of diesel has broken the £1 barrier in Scotland. Now, the AA is warning unleaded petrol may follow.

Paul Watters, a spokesman for the AA Motoring Trust, said: "The oil price is frighteningly high for this time of year. Diesel had gone over £1 a litre at many pumps and unleaded is now less than a penny away from its record." The AA says if oil reaches $100 a barrel, unleaded petrol could hit £1.10 pence a litre - a level which many drivers could not tolerate. And if fuel costs more, the price of food and other consumer goods may also rise, as retailers pass on higher transport costs.

Pat Glancy, Scottish area manager for the Road Hauliers Association, said she was seeing businesses fold every month, and warned that a continued increase in fuel prices would "disrupt the entire economy". She said: "We can no longer cope. How do you plan a business case? You don't know how much your fuel costs will be? It's impossible to run a company. The increase in fuel duty was bad enough, but now we are seeing companies going under all the time.

"In the past three years, I've seen a huge reduction in the number of Scots hauliers doing international work. I used to have 47 hauliers. Now, it's down to 19 or 20, and it'll go down even more. They can't be competitive with foreign hauliers, and ultimately they'll suffer in the same way the entire retail industry and the economy will."

Among the criticisms is a quiet but serious challenge: the artificially high number of Chinese men compared with Chinese women. China should act expeditiously to correct the social and legal pressures that have converged to create this problem.

"Son preference" is a deep-seated, widespread problem in many cultures. In many parts of the world, having a son is integral to one's future financial and social wellbeing. Recent articles have tried to shed light on the problem in India - putting much blame on the ultrasound machines women use to determine the sex of their unborn children in order to decide whether they should abort a female fetus.

In China, however, the problem takes on a frightfully larger scope when "son preference" meets the notorious One Child policy. When the government only allows one child, it puts immense pressure on Chinese parents to determine the sex of their child in the womb, and terminate the pregnancy if it is a girl.

The unintended consequences of this government policy are staggering. The proportion of male births to female births (the "sex ratio") is not merely unusual, but alarming. Worldwide, there are already 100 million girls "missing" due to sex-selective abortion and female infanticide, according to the English medical journal The Lancet.

Fifty million of these girls are thought to be from China. In many provinces, the sex ratio at birth is between 120 to 130 boys for every 100 girls; the natural number is about 104. What will happen in future decades when these boys grow up and look for wives? The 6 to 5 male-female ratio in China means there are a lot of men who will not be able to start families. If history is any guide, they will either find less savory things to occupy their time, or find women through equally unsavory means.

Palestinian President Mahmoud Abbas says he still wants Israel to agree to negotiations on specific issues such as final borders of a Palestinian state. Israel is seeking to keep the agenda vague. US allies Egypt and Jordan did throw their weight behind the idea, but cautioned that meetings that fail to yield specific timetables on the three core issues - ownership of Jerusalem, permanent Palestinian borders, and the return of Palestinian refugees - could discredit the process.

Almost 15 years after the US-sponsored Oslo accords that are now generally viewed as a failure by both Israelis and Palestinians and after seven years of almost daily violence between the two sides, little goodwill exists.

"There's a gap between the genuine desire of the Palestinian leadership to move forward, and [their] capability to do so," says foreign ministry spokesperson Mark Regev. "To ignore that gap is to ignore reality." The pre-conference document "has to answer, 'What is our vision about Jerusalem and how will we solve the refugee problem,' " says Said Zeedani, a Palestinian political analyst. "In the absence of that - this is not going to work."

Now, Annapolis is being seen as one final push for the Bush administration to show progress in what Rice has called a new "moment of opportunity" for the two sides. "Nobody knows what we are going to get out of this," says Meir Javedanfar, a Tel Aviv-based Middle East analyst. "This is their last-chance saloon. With elections coming, they're gambling all or nothing."

So far, no real backup plan exists. And there are no quick fixes among suggested solutions, which include piping water in from rivers in neighboring states, building more regional reservoirs, setting up a statewide recycling system or even desalinating water from the Atlantic Ocean.

Georgia Gov. Sonny Perdue seems to be pinning his hopes on a two-pronged approach: urging water conservation and reducing water flowing out of federally controlled lakes. Perdue's office on Friday asked a Florida federal judge to force the Army Corps of Engineers to curb the amount of water draining from Georgia reservoirs into Alabama and Florida. And Georgia's environmental protection director is drafting proposals for more water restrictions.

But that may not be enough to stave off the water crisis. More than a quarter of the Southeast is covered by an "exceptional" drought - the National Weather Service's worst drought category. The Atlanta area, with a population of 5 million, is smack in the middle of the affected region, which extends like a dark cloud over most of Tennessee, Alabama and the northern half of Georgia, as well as parts of North and South Carolina, Kentucky and Virginia.

State officials warn that Lake Lanier, a 38,000-acre north Georgia reservoir that supplies more than 3 million residents with water, is already less than three months from depletion. Smaller reservoirs are dropping even lower, forcing local governments to consider rationing.

State water managers say there is more water available in the lake's reserves. But tapping into it would require the use of barges, emergency pumps and longer water lines. And some lawmakers fear if the lake is drained that low, it may be impossible to refill.

The major stock market indexes turned in their worst week since July after Caterpillar Inc. one of the world's largest construction equipment makers, soured investors mood Friday with a discouraging assessment of the U.S. economy. In a week dominated by mostly negative results from banks facing difficult credit markets and rising mortgage delinquencies, investors appeared surprised that an industrial name was feeling an economic pinch, too.

Reports from Honeywell International Inc. and 3M Co. themselves big industrial names, gave investors little incentive to take chances on the market.

Weak earnings from some of the largest U.S. companies, the teetering stock market, the onset of $90 crude oil prices, and the central bank's own downbeat assessment of recent economic conditions all point to a soft end to 2007 -- and more troubles ahead for the new year.

The latest jolt came on Friday in the form of a profit warning by heavy equipment maker Caterpillar (CAT.N: Quote, Profile, Research), the world's largest maker of earth-moving equipment and other heavy machinery.
Cutting its full-year profit forecast, the bellwether Peoria, Illinois, firm, said several key U.S. industries it serves are "in recession" while the residential building industry is in "severe recession."

CAT's chief financial officer told Reuters there is a 50-percent chance of a full-blown recession in 2008. The comments helped shove U.S. share indexes more than 2.5 percent lower. Economists are busy dampening their growth forecasts as the Fed's fears that housing problems pose a threat to the overall economy seem to be playing out.

The Glorietta mall blast at lunchtime on Friday killed nine people and wounded 113. Police said the bomb was apparently left near a cellphone repair shop in Glorietta, a sprawling three-storey complex of department stores, high-end fashion boutiques, restaurants, other shops and cinemas in the heart of the Makati business district. Several luxury hotels and serviced apartment blocks surround the complex.

Eight people were confirmed dead on Friday and the body of a man was found early on Saturday in the debris, a police official said. One person remains missing. A police official told President Gloria Macapagal Arroyo at a conference at national police headquarters that traces of RDX, a component of plastic explosives, were found at the bomb site. "It was military-grade explosives," the expert said at the conference, which was open to the press.

No one has claimed responsibility and no suspects have been named although some officials said Islamic Abu Sayyaf militants could be involved. Norberto Gonzales, the president's security adviser, said they received an intelligence report the Abu Sayyaf was trying to raise funds abroad using the Internet site YouTube and the blast could be used as part of its fund-raising campaign.

Abu Sayyaf is said to be linked to the regional Jemaah Islamiah group, which has been blamed for similar explosions in the past, including the 2002 Bali bombings that killed 202 people on the Indonesian resort isle. A general alert has been issued for the rest of Manila and for the international airport.

Manila has largely been spared a spate of bomb attacks by Abu Sayyaf and other Muslim rebel groups that have plagued the southern Mindanao region. But it has been hit in the past. In February 2004, more than 100 people were killed when a bomb planted by Abu Sayyaf rebels sank a ferry near Manila Bay, the country's worst terror attack.

The landmark moment was predicted yesterday by the International Monetary Fund and is the latest illustration of the fast-growing Asian country's importance to the world economy. While China's economy is still far smaller than America's, it has overtaken the UK as the world's fourth biggest economy. With the IMF projecting 10pc growth this year, the country will pump more new money into the global system next year than the US, which is expected to grow by just 1.9pc.

Mr Johnson compared the pre-crunch markets to a "forest that has not seen a fire in many years", adding: "When problems ignited in the US sub-prime mortgage market, the fire 'jumped' in surprising ways to other areas." This meant the "fire" spread to the wider credit markets in the US and further afield, including the UK, to bank lending and to commercial paper markets, where companies borrow. Even further cuts in interest rates might not be enough to bring confidence back, the IMF warned. However, while interest rate cuts seem likely in many countries, it also emphasised that inflation remains a threat with oil prices at record highs.

Food prices will also remain high because of increased demand, poor harvests, and global warming, which has contributed to falling crop yields and to arable land being diverted for biofuels.

Oil has surged to new records over the past week while gold has held near 28-year highs in part due to a cash injection from funds avoiding asset classes such as mortgage-backed bonds and credit derivatives. The subprime crisis also has helped send the dollar to record lows against other major currencies, further pushing up commodity prices, experts said.

"Part of the rally is attributable to the weaker dollar," said Bill Ciraco, trader at Para Advisors LLC. "But definitely some of the rally is attributable to flow of funds." U.S. oil prices have jumped around 10 percent over the past week and struck a record high $89 a barrel during intraday trade on Wednesday. Gold, frequently used as a hedge against inflation, touched levels not seen since 1980.

The gains added to a five-year rise in commodity prices driven by skyrocketing demand growth from emerging economies including China.