Hundreds of people have also been sent to hospital due to heat-related illnesses and injuries. The mercury shot up to a record 40.9 degrees Celsius (106 degrees Fahrenheit) in Tajimi city in the central prefecture of Gifu on Thursday afternoon, according to the weather agency. The reading eclipsed the previous highest temperature recorded in Japan of 40.8 degrees set in northern Yamagata prefecture in 1933.

Hu said China is keen on resolving the nuclear issue through peaceful negotiations. He said China understands Iran's concerns but hopes the country shows flexibility for the peaceful settlement of the issue.

Ahmadinejad said that Iran will not go beyond international laws and regulations of the International Atomic Energy Agency (IAEA) in using nuclear energy. Ahmadinejad said Iran will continue to work with China to develop bilateral ties and expand cooperation in economy and trade, energy, culture, sports and science.

Iran is one of four observers at the SCO. The other three are India, Pakistan and Mongolia.

The FTSE 100 was down another 100 points at one stage before better-than-expected inflation figures in the US fuelled hopes of an interest-rate cut next month by the mighty US Federal Reserve. While this pushed Wall Street higher in opening trade, volatility is keeping the financial sector on a knife edge.

Concerns have now switched to the huge market in commercial loans across the board. At least five issuers of such loans or "asset-backed commercial paper" - a mix of mortgage loans, credit-card debt and some business loans - have had trouble refinancing that debt when it matured, forcing them to make investors wait for repayment.

Josh Rosner, an analyst at independent research firm Graham Fisher in New York, said: "Asset-backed commercial paper [ABP] problems could be much worse than what we saw in the subprime market." Investment managers' inability to tell whether the ABP they have taken on - the money they have loaned - is "safe" has fuelled the flight of confidence and added to the "perfect storm" in markets.

Household names in the US such as Wal-Mart and Home Depot have already warned of a fall in business. But analysts fear this could mark the start of a much bigger slowdown.

"At the moment we have the figure of 48 dead and 350 injured," Carlos Cordova, chief of Peru's fire department, told Channel 5 television. Peru's highly respected Cable news station Canal N reported that the quake had caused a church to collapse in the city of Ica south of Lima, killing 17 people and injuring 70.

He said he was sending three Cabinet members, including the health minister, to the coastal towns of Chincha and Ica, where the quake is reported to have hit the hardest.

Duaa Khalil Aswad, 17, was "executed" by members of the Kurdish Yazidi sect for falling in love with a Sunni Muslim. Horrifying videos of her slow and agonising death have been posted on the Internet. By last night, the confirmed death toll had passed 250, making it the bloodiest atrocity in Iraq since the U.S.-led invasion in 2003.

The Yazidis are an ancient sect who worship an angel figure which some Muslims and Christians consider to be the devil. They have been the target of a series of murderous attacks since Duaa's death. The teenager was said to have converted to Islam before running away with her Sunni boyfriend.

The man, a company director from Warrington in northwest England, had tried to remonstrate with the group when he saw them damaging a vehicle and other property outside his home. It was the latest in a series of violent, and frequently deadly, attacks by abusive, drunk young people in Britain.

"We cannot have a society where adults feel scared to go out and challenge youngsters up to no good," said Peter Fahy, the chief constable of Cheshire, the county which includes Warrington. "Every night of the week Cheshire officers are engaged in a constant battle against anti-social behaviour and alcohol-induced violence - it breeds fear and isolation.

"HARDLY A DAY GOES BY IN BRITAIN WITHOUT ANOTHER ALARMING REPORT OF ALCOHOL-FUELLED TEENAGE VIOLENCE. On Monday, a 23-year-old Turkish immigrant died after being attacked by two hooded boys he argued with when they threw a half-eaten chocolate bar through the window of his sister's car.

While the phenomenon of unruly -- some say feral -- youth is hardly new in Britain, there are concerns the SOCIAL BREAKDOWN IS INTENSIFYING, AS THOSE INVOLVED GET YOUNGER AND THE VIOLENCE SEEMS TO WORSEN.

The Sun newspaper, the country's most-widely read, ran an editorial saying it was time for parents to take responsibility. "Should parents be arrested if they let their kids run wild? Should benefits be reduced or even stopped for those who won't work?" the paper asked. "IT IS ANOTHER SIGNAL THAT THE 'GREAT' IS GOING OUT OF GREAT BRITAIN."

The Labor Department's most recent inflation data showed that U.S. food prices rose by 4.2 percent for the 12 months ending in July, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits.

The Bureau of Labor Statistics said in its July inflation report that EGG PRICES ARE 33.7 percent higher than they were in July 2006. Over the same period, according to the department's consumer price index, whole MILK WAS UP 21.1 PERCENT; FRESH CHICKEN 8.4 PERCENT; NAVEL ORANGES 13.6 PERCENT; APPLES 8.7 PERCENT. DRIED BEANS WERE UP 11.5 PERCENT, AND WHITE BREAD JUST MISSED DOUBLE-DIGIT GROWTH, RISING BY 8.8 PERCENT.

These numbers get lost in the broader inflation rate for all goods and services, which measured 2.4 percent for the same 12-month period. Across the economy, rising food prices were offset by falling prices for things bought at the mall: computers, cameras, clothing and shoes. "All of that stuff is going down in price, but prices for gasoline have gotten higher, and food prices have gone up," said Mark Vitner, a senior economist for Wachovia, a large national bank based in Charlotte, N.C.

WHY ARE FOOD PRICES RISING?

IT'S PARTLY BECAUSE OF CORN PRICES, DRIVEN UP BY CONGRESSIONAL MANDATES FOR ETHANOL PRODUCTION, WHICH HAVE REDUCED THE AMOUNT OF CORN AVAILABLE FOR ANIMAL FEED. IT'S ALSO BECAUSE OF TOUGHER IMMIGRATION ENFORCEMENT AND A LATE SPRING FREEZE, WHICH HAVE MADE FARM LABORERS SCARCER AND DAMAGED FRUIT AND VEGETABLE CROPS, RESPECTIVELY. AND IT'S BECAUSE OF HIGHER DIESEL FUEL COSTS TO RUN TRACTORS AND ATTRACTIVE FOREIGN MARKETS THAT TAKE U.S. PRODUCTION.

GLOBALIZATION ALSO EXPLAINS HIGHER MILK PRICES. Australia, a leading milk exporter, is struggling through a drought, and European governments are pulling back dairy subsidies. So U.S. farmers, aided by a weak dollar, are stepping in to meet growing demand for milk products in China and India. That's pinched supply at home and abroad, driving up prices.

To make more milk, or raise more chickens that lay more eggs, farmers need feed corn and other feed products. But corn prices have soared over the past year as Congress pushes ethanol, a renewable fuel made from corn. FIELDS THAT PREVIOUSLY GREW SOYBEANS ARE NOW YIELDING CORN, AND THAT'S DRIVEN UP THE PRICE OF SOYBEANS AS THEY BECOME SCARCE.

Iowa State University's Center for Agricultural and Rural Development shocked the farm sector earlier this summer with a report that CORN FARMERS ARE EXPECTED TO LOCK IN PRICES OF $4 A BUSHEL THROUGH 2010, ABOUT DOUBLE WHAT CORN FETCHED TWO YEARS AGO.

Catholic churches in the Netherlands should use the name Allah for God to ease tensions between Muslims and Christians, says a Dutch bishop. Tiny Muskens, the bishop of Breda, told the Dutch TV program "Network" Monday night he believes God doesn't mind what he is called, Radio Netherlands Worldwide reported. The Almighty is above such "discussion and bickering," he insisted.

However, a survey published today in the Netherlands' largest newspaper, De Telegraaf, showed 92 percent of the more than 4,000 people polled oppose the bishop's view, the Associated Press reported.

The chairman of the Protestant Church in the Netherlands, Gerrit de Fijter, told the Dutch paper he welcomed any attempt to "create more dialogue," according to the AP. But he said, "Calling God 'Allah' does no justice to Western identity. I see no benefit in it."

A Muslim spokesman, for Amsterdam's union of Moroccan mosques, said Muslims had not asked for such a gesture from Christians, the AP reported.

The hope is for a brood of babies exactly nine months later on Russia's national day. Couples who "give birth to a patriot" during the June 12 festivities win money, cars, refrigerators and other prizes. Ulyanovsk, about 550 miles east of Moscow, has held similar contests since 2005. Since then, the number of competitors, and the number of babies born to them, has been on the rise.

Russia, with one-seventh of Earth's land surface, has just 141.4 million citizens, making it one of the most sparsely settled countries in the world. With a low birth rate and a high death rate, the population has been shrinking since the early 1990s.

In his state-of-the-nation address last year, President Vladimir Putin called the demographic crisis the most acute problem facing Russia and announced a broad effort to boost Russia's birth rate, including cash incentives to families that have more than one child. Ulyanovsk Gov. Sergei Morozov has added an element of fun to the national campaign.

The 2007 grand prize went to Irina and Andrei Kartuzov, who received a UAZ-Patriot, a sport utility vehicle. Other contestants won video cameras, TVs, refrigerators and washing machines.

The physical availability of water is being endangered by a rash of new threats, including climate change, increase in global population and the sudden growth of the water-hungry bioenergy sector. Addressing the 17th annual World Water Week, executive director of the Stockholm International Water Institute (SIWI) Anders Berntell warned that 1.4 billion people now live in regions where there is a real, physical water scarcity, and an additional 1.1 billion live in regions where there is water stress due to over-consumption.

"Clearly, these figures will increase in the future, due to population growth, intensified agriculture and climate change," he told a meeting of over 2,000 water professionals, technicians, scientists and policy makers. The annual five-day meeting, to conclude Friday, is described as the world's largest single gathering of water experts, including officials from more than 150 organisations.

"We are not prepared to deal with the implications this has for our planet. There is a security component in this that is not fully understood or addressed internationally yet. And I am not talking about water security," he said. "I mean political security." Berntell blamed both international aid donors and governments for their skewed priorities on development spending -- with water and sanitation getting the least.

He contrasted this with the phenomenal 37 percent increase in military expenditures globally during 1997-2006, reaching close to $1 trillion annually. "When we look at these figures, I think it is time that we ask ourselves 'Why?'. Why don't governments in developing countries, donor agencies and financiers prioritise water higher? Why are other issues, other sectors higher on the political agenda?" he asked.

Addressing the meeting Monday, Swedish Prime Minister Fredrik Reinfeldt said the vital truth is "if there is no water, there is no life." Today, more than 1 billion people are said to lack access to safe drinking water and more than 2.4 billion lack access to basic sanitation. Every day, he said, "we see around 34,000 people die in diseases related to deficient water and sanitation. I don't think that anyone on our planet can stand untouched by these facts. The question is: what can we do?"

The warning came amid calls at a conference in Alabama for intensified efforts to ensure US "space superiority" in the wake of China's shoot down January 11 of one of its own satellites with a ballistic missile. "It is not inconceivable that within about three years we can be challenged at a near peer level in a region," said Lieutenant General Kevin Campbell, head of the US Army's Space and Missile Defense Command.

"That means taking out a number of communications capabilities over a theater of war," he added in a speech to an audience of defense contractors in Huntsville, Alabama. Campbell later told reporters that while a number of countries have some capabilities to interfere with satellite communications, China is the country he is most worried about.

He said his command has devised a "space alert" system patterned on "air alerts" that would key the military's responses to a threat to a friendly satellite. The military also is thinking about offensive counter-measures, he said. "I'm not free to talk about specifics, but the bottom line is we're thinking about and taking steps to ensure we have a capability... that shows we have freedom of action in space," he said.

Unfortunately for foreign creditors, a substantial percentage of those IOU's have recently taken the form of mortgaged backed securities.

Sporting higher yields than Treasury bonds, investment grade ratings from reputable agencies, and juicy commissions for the investment banks that packaged them, these structured mortgage bonds have quickly become America's greatest export. Ironically, amid all the recent hoopla about defective Chinese exports, America has proved that when it comes to flooding the world with shoddy merchandise, nobody beats the good old USA.

This week, several of Wall Street's best foreign customers announced staggering losses on the American mortgaged backed securities they had been sold. THE FUNDAMENTAL ISSUE UNDERLYING THESE LOSSES IS THAT AMERICANS BORROWED MORE MONEY THAN THEY CAN AFFORD TO REPAY. As initially low teaser rates expire and mortgage defaults increase, FOREIGN LENDERS ARE DISCOVERING THAT THE RESIDENTIAL PROPERTIES THAT COLLATERALIZE THE MORTGAGE BONDS ARE NOT WORTH ANYWHERE NEAR THE LOAN AMOUNTS.

IT WILL NOT BE LONG BEFORE AMERICAN BORROWERS COME TO A SIMILAR REALIZATION. When they do they will be faced with the shocking reality that all of their home equity is gone -- having disappeared just as quickly as did the paper profits of the Internet stock mania. However, this time around the situation is more dire. Although paper profits have vanished much as they did in 2001, all the mortgage debt, much of it about to get much more expensive to service, still remains.

WHEN AMERICAN HOMEOWNERS COME TO GRIPS WITH THEIR DIMINISHED NET WORTH, THE EXCESS CONSUMPTION THAT HAS BEEN THE RULE OVER MUCH OF THE PAST DECADE WILL GRIND TO A HALT. If any money is left after making higher ARM payments, homeowners may actually decide to save some to repair their personal balance sheets. AS CONSUMER SPENDING COLLAPSES, THE U.S. ECONOMY WILL PLUNGE INTO A SEVERE RECESSION, COMPOUNDING THE PROBLEMS IN THE HOUSING MARKET AND EXACERBATING THE RECESSION.

THE LAST STRAW WILL BE THE VALUE OF THE U.S. DOLLAR. Already teetering on a precipice, a recession will push it over the edge. As the dollar falls, interest rates and consumer prices will rise even more sharply, compounding the problems for both housing and the economy.

In fact, the fear of further dollar declines has been the most important factor in restraining the Fed's ability to cut interest rates. Rather than admit its concern over the dollar, the Fed justifies current policy with assurances that the economy is strong and is not in need of stimulative rate cuts. In Jack Nicholson fashion, SINCE BERNANKE FEELS INVESTORS CAN NOT HANDLE THE TRUTH HE FEEDS THEM A LIE INSTEAD.

As more of our nation's creditors finally realize that they have been duped, the credit well fueling American consumption will run dry. FOREIGN LENDERS WILL SIMPLY REFUSE TO ACCEPT OUR IOU'S AS PAYMENT FOR THEIR MERCHANDISE. LACKING IN SAVINGS AND PRODUCTIVE CAPACITY, WE WILL BE FORCED TO ACCEPT DRAMATIC REDUCTIONS IN OUR STANDARD OF LIVING AS A RESULT.

Under the headline, "EU liars" the News of the World reported on a memo from 2000, in which the Government said it did not agree with the extension of European Court of Justice powers under the Constitution over "very sensitive areas" such as criminal justice, policing, asylum and immigration. The memo said that "These raise sensitive issues relating to national sovereignty, law and order and the criminal justice process. This would be a significant extension of the Court's legal responsibility."

Open Europe's Neil O'Brien is quoted as saying, "If we sign up to the constitutional treaty it is irreversible. We must have a referendum". It is also noted that the Treaty would make it easier for asylum seekers to go to the ECJ, and so circumvent British rules. The article quoted Former Europe Minister Geoff Hoon, telling the House of Lords committee last year that the Treaty risked "further complicating our existing asylum and immigration process."

A leader in the paper argued that "The explosive document we have obtained makes absolutely clear that Britain has been secretly yielding vital powers to Strasbourg. In its sneaky deception of the electorate the Government is guilty of a grave breach of trust. PM Gordon Brown must let the people speak."

David Cameron also had an article in News of the World, criticising Gordon Brown for going back on Labour's manifesto to hold a referendum on the EU Treaty. Cameron argued that, "[Gordon Brown] claims we don't need one now because the new document is called a 'Treaty' rather than a 'Constitution'."

But it doesn't really matter what people call it. What matters is that the new treaty means giving away more powers to the EU. That is why we must give people a say in a referendum. In the article, Cameron quotes Brown before becoming PM, saying "the manifesto is what we put to the public. We've got to honour that manifesto. That is an issue of trust for me with the electorate."

Fatah, on the other hand, expressed concern over increased calls in Europe to negotiate with Hamas and warned that such a move would undermine the moderates among the Palestinians.

Hamas spokesman Sami Abu Zuhri said his movement was prepared to launch talks with the Europeans without delay. "They are beginning to realize that the boycott of the Hamas government is ineffective and pointless," he said. Hamas, he said, welcomes calls to talk with the Europeans.

A report by non-partisan Britain's House of Commons' Foreign Affairs Committee released Monday also recommended that lawmakers "urgently consider ways of engaging politically with moderate elements within Hamas." The committee appealed to former prime minister Tony Blair to join the effort to reunite Hamas with Abbas's Fatah faction. "THE INTERNATIONAL COMMUNITY MUST BEAR IN MIND THAT HAMAS CAME TO POWER AS A RESULT OF A DEMOCRATIC AND FREE ELECTION," al-Madhoun added. He accused the US and Israel of exerting pressure on Abbas not to talk to Hamas.

A senior PA official in Ramallah said he was "disgusted" to hear that some Europeans were calling for negotiations with Hamas. "THOSE IN ITALY AND BRITAIN WHO WANT TO TALK TO HAMAS ARE UNDERMINING MODERATE PALESTINIANS AND EMBOLDENING THE RADICALS," he said. "We hope that the Europeans will wake up and refrain from committing such a huge mistake."

Five other people are being treated for the virulent E.coli 0157 infection, which is believed to have come from the cold meat counters of two Morrisons stores.

Health chiefs yesterday warned they were bracing themselves for other victims as the bug's incubation period is up to 14 days. Anyone suffering from stomach cramps, diarrhoea, nausea and fever is advised to contact their GP. A spokeswoman added: "There could very well be more people falling ill over the next few days."

Leading microbiologist Professor Hugh Pennington said the affected product had probably come into contact with uncooked meat. "The bug has a history of being associated with ready-to-eat meats," he said. Most types of E.coli, short for Escherichia coli(CORR), are harmless but the 0157 strain can cause life-threatening kidney damage and haemolytic uremic syndrome, where red blood cells are destroyed.

The strain is found in the intestines of cattle and some other animals and is usually spread by eating infected, uncooked or partly cooked food - particularly minced beef. It can also be passed directly from animals and infected humans. In humans, the bacteria multiply in the gut and release toxins that damage the lining of the intenstine.

Antibiotics have no effect and and diarrhoea medicines are counter-productive as they prevent the body from ejecting the bug.