The currency declined to the weakest versus the Canadian dollar since it started trading freely, a 26-year low against the pound and a 23-year low to the Australian dollar. "We will favor stronger currencies over weaker ones, and will readjust accordingly," Cheng Siwei, vice chairman of China's National People's Congress, told a conference in Beijing.

"We're likely to see further pressure on the dollar," said Thomas Harr, senior foreign exchange strategist in Singapore at Standard Chartered Plc, a U.K. bank that makes most of its profit in Asia. "The potential for diversification is quite big. This is a structurally negative story for the dollar."

The U.S. currency slumped to $1.4666 per euro, the lowest since the 13-nation currency debuted in January 1999, before trading at $1.4644 at 2:56 p.m. in Tokyo from $1.4557 late yesterday. It fell to $1.0990 per Canadian dollar, the lowest since Canada's currency was floated in 1950. The dollar traded as low as 113.99 yen, the first time below 114 since Oct. 29.

The dollar may fall to $1.50 against the euro, Harr said.

Against the pound, the dollar declined to $2.0947, the lowest since May 1981. The currency slid against the Australian dollar to 93.81 U.S. cents, the lowest since April 1984 from 92.87 U.S. cents. The U.S. currency also fell to as low as 1.1347 against the Swiss franc, the lowest since December 2004. "This is an asset story and shows sentiment for the dollar continues to be quite negative," said David Forrester, currency economist at Barclays Capital in Singapore.

Traders remain worried about whether supplies will be adequate to meet demand for heating fuel in the approaching Northern Hemisphere winter. News of an attack Monday on an oil pipeline in Yemen added to those concerns.

The weak U.S. dollar, which fell to a new low against the euro Tuesday, is also lifting oil prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

OLMERT SETS TIMELINE FOR TERRORIST STATE

Israeli Prime Minister Ehud Olmert hopes to reach a peace deal with the Arabs before US President George W. Bush leaves office in January 2009, an Israeli government official said on Friday. "There are big advantages to reaching an agreement before the end of Bush's term. This is the right thing to do. It is the best thing to do for both sides," the official quoted Olmert as telling German Foreign Minister Frank-Walter Steinmeier. The official said Olmert wanted to seize the opportunity because it was impossible to know how committed the next U.S. administration would be to solving the Israeli-Arab conflict

US-SUPPORTED TERRORIST ORGANIZATION PROMISES RAIN OF ROCKETS

The Al-Aqsa Martyrs Brigades, a wing of the Fatah terrorist organization headed by Palestinian Authority (PA) Chairman Mahmoud Abbas, stated Thursday that it has begun an escalation in attacks on Israeli towns in the Negev. The group said the attacks would be a response to "the evil Balfour declaration," which was issued 90 years ago this past Friday. The Balfour Declaration paved the way for the creation of a Jewish state in the Land of Israel. Spokesmen for Fatah in Gaza boasted that their organization has carried out dozens of terrorist attacks on nearby Jewish towns. [The AL-AQSA MARTYRS BRIGADES is designated as a terrorist organization under US federal law. IT IS A PART OF THE FATAH TERRORIST ORGANIZATION, which is LED BY ITS FOUNDER, PA CHAIRMAN MAHMOUD ABBAS. US PRESIDENT GEORGE W. BUSH, A STAUNCH SUPPORTER OF ABBAS, RECENTLY ORDERED THE TRANSFER OF $410 MILLION TO THE PA, IN DIRECT VIOLATION OF FEDERAL LAWS AGAINST FUNDING FOREIGN TERRORIST ORGANIZATIONS. While proclaiming a "war" against terrorism in the rest of the world, Bush supports the Fatah terrorist organization in Israel, who have sworn to wipe the Jewish people off the face of the earth. [Arutz Sheva, Jerusalem Post]

ECONOMY RECEIVES BLESSING FROM THE LORD

Israel has one of the fastest growing and safest economies in the world -- despite competition from hot Asia giants and Arab petrodollar countries. In the Middle East it is an economic giant. Israel had the fastest growing GNP (8%) of any western country in the fourth quarter of 2006. In 2006, the Israeli high-tech exports totalled $14.1 billion, up 20% over 2005. Israel means business. Israeli currency has appreciated considerably against the dollar - a good way to beat inflation. Only about 15% of Israeli exports are accounted for by the diamond industry, and an additional 82% are non-diamond manufacturing exports, of which about 40-50% is high tech. [Zionism & Israel]

WAQF SUED OVER TEMPLE MOUNT DESTRUCTION

A group of 150 Israeli citizens, which represent a broad cross section of the Israeli public, have initiated an unprecedented criminal prosecution of Waqf (Islamic trust) leaders in Jerusalem, alleging that they have engaged in the deliberate destruction of ancient Jewish relics on the Temple Mount. The indictment was filed in the Jerusalem District Court Thursday by means of a private law suit, which is first of its kind in Israeli legal history and utilizes a seldom applied section of the criminal code. If convicted, the Waqf officials may face years in prison. The legal action is led by Shurat HaDin (Israel Law Centre). In recent months the Waqf has brought in bulldozers and heavy digging equipment to carry out "renovations". Israeli archaeologists who have sifted through the discarded earth were shocked to have discovered a great number of Jewish artefacts brutally trashed by the bulldozers. A wall from the outer courtyard of the Second Temple is believed to have been completely pulverized. The court papers contend that the recent accelerated destruction is part of a four decade long campaign by the Waqf to eradicate all evidence of the historical Jewish connection and claim to the Temple Mount. After liberating the Old City in 1967, Israel permitted the Waqf to remain as "custodians" of the Temple Mount. Shurat HaDin alleges that the Israeli government, in its political cowardice, has consistently refused to undertake any concrete actions to stop the criminal activities of the Waqf - thus abandoning the millenniums long Jewish claim over the Temple Mount and allowing Islamic extremists to re-write history in Jerusalem. [Shurat HaDin]

FATAH-CONTROLLED TV PROMISES ELIMINATION OF ISRAEL

A new music video appearing regularly on Fatah-controlled PA television over the past week promises the elimination of Israel and the restoration of the "Arab identity" of cities throughout the Jewish State. The propaganda clip stands in stark contrast to PA Chairman Mahmoud Abbas's recent declarations in support of reconciliation with Israel, issued ahead of the upcoming multinational Middle East peace conference organized by the United States. As explained by Itamar Marcus and Barbara Crook of PALESTINIAN MEDIA WATCH, "WHILE THE PALESTINIAN AUTHORITY ANNOUNCES IN ENGLISH ITS DEMAND FOR A TWO-STATE SOLUTION, TO ITS OWN PEOPLE IN ARABIC IT CONTINUES TO DEFINE ALL OF ISRAEL AS 'PALESTINE,' AND TO PROMISE ISRAEL'S DESTRUCTION. A new video clip, broadcast numerous times daily since it first appeared on Fatah-controlled TV last week, passionately promises 'Mother' that every Israeli city will be 'liberated' because its 'identity is Arab' and 'Palestinian.'" [Arutz Sheva]

The film on video-sharing website YouTube is entitled In memory of Councillor Alan Craig and contains pictures of him with his wife and two young daughters. It was apparently posted in retaliation for his opposition to the mosque. Mr Craig has now contacted police in fear of his family's safety and demanded that the video be taken down.

Islamic group Tablighi Jamaat wants to open the 12,000-capacity "mega-mosque" in Newham near the main 2012 Olympic site. The FBI has described the group as "a recruiting ground" for al Qaeda, which it denies.
Shoebomber Richard Reid and 7/7 bombers Mohammad Sidique Khan and Shehzad Tanweer were members.

Mr Craig, 61, a member of the Christian Peoples Alliance on Newham council, has led a local campaign against the mosque which is planned for the site at Abbey Mills next to West Ham Tube station. The businessman today said he would be seeking advice about whether his 40-year-old wife, Sally, and daughters were safe. He said: "Targeting me is one thing. But to use my wife and children is outrageous. This video obituary is either a threat or a very sick joke.

"Some people will look at this as an open invitation to take me out because I am opposing the mosque. That is not the way to operate in a democracy." The video opens with its title and the words "To God we will all return" before showing a series of photos of the councillor, his family and political allies set to Elvis Presley singing You Were Always On My Mind. The two-minute video ends with the message "The mosque will be built in time for the 2012 Olympic Games."

Meredith Whitney, the CIBC World Markets' financial services analyst, believes the only way forward for new chairman Robert Rubin and interim chief executive Sir Win Bischoff is to carve the bank up and sell it off.
MS WHITNEY'S COMMENTS LAST WEEK ON THE STATE OF CITI'S BALANCE SHEET SPARKED A $369BN (£177BN) FALL IN WORLD MARKETS AND HELPED TRIGGER AN EMERGENCY MEETING OF THE BANK'S BOARD AT THE WEEKEND AT WHICH MR PRINCE TENDERED HIS RESIGNATION.

Citi is the largest victim to date of the global credit crisis, announcing further write-downs of up to $11bn on top of $5.9bn revealed in the third quarter. Asked about the possibility of a Citi break-up, Ms Whitney, who received death threats following her comments last week, said: "That's really the only thing they can do. THEY DON'T HAVE THE CAPITAL TO MANAGE IT AS AN ONGOING ENTITY."

Ms Whitney's views stem from her belief that Citi does not have enough capital to meet its existing commitments, something the bank denied in a statement on its financing on Sunday evening. She believes that Citi needs to begin to sell off non-core assets or cut its dividend. But chief financial officer Gary Crittenden, a contender to replace Mr Prince, yesterday told banking analysts that Citi has no intention of cutting the dividend.

Ms Whitney responded by saying: "CLEARLY THE MATHS DO NOT ADD UP."

Shares in the oil and gas company, which raised $9bn from the world's biggest initial public offering so far this year, surged to Rmb48.60 at the start of trading from an offer price of Rmb16.70.

The massive demand for the PetroChina offering is the latest sign of the stock market frenzy in mainland China where share prices have increased almost six fold over the past two years. PetroChina attracted $456bn of subscriptions from retail and institutional investors in China.

However, the surge in the company's share price was greeted by some analysts as a further sign that a dangerous bubble is developing in the mainland stock market, created by a mixture of capital controls and substantial liquidity. The company's mainland shares are now trading at a premium of around 150 per cent to its Hong Kong shares.

Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. "THERE ARE $1 TRILLION WORTH OF SUB-PRIMES, ALT-AS [SELF-CERTIFIED] AND BASICALLY GARBAGE LOANS," HE SAID, ADDING THAT HE EXPECTS SOME $250BN IN DEFAULTS. "WE'VE ONLY BEGUN TO SEE THE PAIN FROM RISING MORTGAGE PAYMENTS," he added. Brian Gendreau, an investment strategist at ING, commented: "Financials are 20 per cent of the S&P 500 and if that sector doesn't do well all bets are off. PEOPLE JUST DON'T KNOW WHAT'S ON THE BALANCE SHEETS."

The banks remain unwilling to lend to each other, preferring to rebuild their balance sheets and "hoard liquidity" to buttress themselves against any shocks from repatriating off-balance-sheet losses from their special investment vehicles (SIVs). However, this tightening up has led to a vicious circle. Making credit tougher has exacerbated the problems of struggling mortgage holders in America; default rates then rise and make the banks even more exposed to losses as credit agencies downgrade their assets.

This seems to be what happened at Citigroup. The admission that it was unable to assure investors that a potential $11bn write-down for sub-prime mortgages would not grow has led to this fresh fit of extreme nervousness. Huge write-downs by Merrill Lynch ($7.9bn) and UBS ($3.4bn) have not helped.

Samir Shah at Landsbanki Securities said: "People thought most of the bad news had been priced in. IT SEEMS WE'RE ENTERING A SECOND PHASE OF THE CREDIT SQUEEZE. We're going back to a place where liquidity is drying up and volatility is increasing."

The Chancellor, Alistair Darling, also pleaded for calm. "We are experiencing an unparalleled period of financial uncertainty caused by the problems in the US housing market," he said. "I believe that we can get through that. Many banks in this country have very strong balance sheets after years of making very good profits."

Meanwhile, on the continent, newspaper reports named two German banks - WestLB and a small specialised bank for professional people - as possible next victims of the crisis.

If they had, they may well have been charged with a criminal offence, and would not have had a legal leg to stand on in court. The UK places great emphasis on respecting the religious convictions of patients - and increasingly the doctors who treat them too.

There is nothing medics can do when an adult refuses treatment on religious grounds, says Vivienne Nathanson, head of ethics at the British Medical Association. "It's something we just have to live with - the alternative would be to change the law, change the human rights law," she says. "It's just too important that we all as individuals are able to make our own decisions."

King Abdullah arrived in Italy on Monday for a two-day visit that also involves meetings with Italian government officials. But all eyes are on Tuesday's encounter between Pope Benedict XVI and the custodian of Islam's most holy sites. The Vatican has diplomatic ties with Muslim states, but not Saudi Arabia, home to Islam's most sacred mosques.

The historic encounter is expected to focus on two issues: the rights of Christians in Saudi Arabia and the wider relations between Christianity and Islam. Most of the 1.2 million Christians in the kingdom are Catholics who are allowed to worship only in private places. The Vatican has often stressed the need for reciprocity in its request to build churches, noting that Muslims are free to worship in many Christian countries.

In September last year, the pontiff incurred the wrath of many Muslims around the world for comments associating Islam with violence. He later apologised and made efforts to reach out to other religions. Last month, 138 MUSLIM RELIGIOUS LEADERS WROTE TO THE POPE, stressing that the time for polite ecumenical dialogue had passed, with religious violence on the rise, and SAYING THAT THE COMMON FUTURE OF THE TWO FAITHS WAS AT STAKE.

The bug - ESBL E coli - causes around 30,000 cases of blood poisoning and urinary tract infection each year. It is known to have killed hundreds of people over the past five years, although some experts put the annual death toll as high as 4,000. THE "SUPER E COLI" IS THOUGHT TO HAVE DEVELOPED A HIGH DEGREE OF RESISTANCE TO ANTIBIOTICS THROUGH THEIR USE IN INTENSIVE LIVESTOCK OPERATIONS.

Its spread from farm to farm has mirrored the rise in the number of infections and deaths in the human population. Experts at the Health Protection Agency are investigating a possible link between the bugs found in livestock and the sale of meat and milk. Dr Georgina Duckworth, who compiled a report for the agency on the emergence of the E coli, concluded: "The findings show evidence of people carrying these bacteria in their gut. If this is found to be commonplace in the general population this may point towards the food chain being a potential source."

Richard Young, the organic food group's policy adviser, said: "ALL THE INDICATIONS ARE THAT INFECTIONS CAUSED BY THIS TYPE OF E COLI ARE INCREASING AT AN ALARMING RATE." In February 2005, the Daily Mail revealed the discovery of the superbug among sick and dying calves on a farm in Wales. By this March, Government vets had found similar strains on farms in Cheshire, Wiltshire and Somerset.

A spokesman for Defra, the food and farming department, said INFECTED ANIMALS MIGHT HAVE CAUGHT ESBL E COLI FROM HUMANS, from contact with sewage or from their food.

Kelud spewed white ash as high as 500 meters, Saut Simatupang, head of the agency, said today in a telephone interview. "The eruption isn't over," Simatupang said. "What we saw this morning was a small eruption." The temperature in Kelud's crater lake rose to 60.7 degrees Celsius (141 Fahrenheit) from 43.9 degrees yesterday. At a depth of 15 meters (49 feet) the temperature jumped to 66.1 degrees Celsius from 45.9.

Latest:- A top scientist, Surono, who is monitoring Mount Kelud said the temperature of its crater lake had now reached 76 degrees Celsius (168 Fahrenheit), - a rise of more than 25 Celsius (77 F) over the last 24 hours, indicating a blast could be imminent. The spike indicated magma within the volcano was very close to breaking through to the surface, possibly sending a torrent of mud, ash and rock known as lahar pouring down the mountain.BR>
Scientist Agus Budianto said that pressure of the energy rising inside Kelud was now three to four times as strong as that which triggered the last eruption in 1990, which killed at least 34 people. Budianto said that that explosion created a blockage which magma has not been able to fully break through, resulting in a column of steam rising from the surface of the crater lake, a new phenomena for Kelud. Water temperature at Kelud's crater lake is predicted to have soared to more than 90 degrees Celsius at the depth of 15 metres, more than double compared to 40 degrees ahead of the volcano's most recent eruption in 1990.

The Turkish government recently submitted a request to the Jerusalem municipality for the planned 3-meter high memorial that would be located close to the Golden Gate and be topped by the Turkish flag.

While the municipality has not yet discussed the proposal, rightist councilmen have already expressed opposition. Councilman Yair Gabbay (National Religious Party) has asked the city's legal adviser to nix the project on the grounds that according to the city's master plan, all construction is forbidden within 70 meters of the Temple Mount. The plot the Waqf has allocated to Turkey is a mere five meters from the mount.

Sources in the Jerusalem Municipality said that the proposal would be examined according to the usual legal criteria.

Jonathan Evans, the head of MI5, announced the figure - an increase of 400 since November 2006 - in a speech in Manchester. He said children as young as 15 were involved in terrorist-related activity.

Chang'e I, following the instructions of the Beijing Aerospace Control Center (BACC), started braking at 11:15 am at a position around 300 km away from the moon and entered the moon's orbit at around 11:37 am after completing the braking, according to the BACC.

"It turns the satellite into a real circumlunar one, marking a new milestone in China's aerospace history and also the first move of the country's deep space explorations," said Sun Laiyan, deputy head of the Commission of Science Technology and Industry for National Defense. "So far, each step in the lunar probe project has been completed almost perfectly."

The launch of the orbiter kicks off the first step of China's three-stage moon mission, which will lead to a moon landing and launch of a moon rover in around 2012. In the third phase, another rover will land on the moon and return to earth with lunar soil and stone samples for scientific research at around 2017.

China carried out its maiden piloted space flight in October 2003, making it only the third country in the world after the former Soviet Union and the United States to have sent men into space. In October 2005, China completed its second manned space flight, with two astronauts on board.

The launch of Chang'e I came shortly after Japan launched its first lunar probe, Kaguya, in mid-September, while India is planning to send its own lunar probe into space next April, sparking off concerns of a space race in Asia. But Luan Enjie, chief commander of China's lunar orbiter project, said that, "China will not be involved in a moon race with any other country and in any form, China will, in pursuing its policy of peaceful use of airspace, share the achievements of the lunar exploration with the whole world," he told Xinhua.

This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (£480.6bn) worth of sub-prime debt. Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt". It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes.

There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's Joint Economic Committee.