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Iraq hostages paraded on TV

The footage shows a masked man holding an assault rifle as two men crouch in front of him holding up their passports.

The masked man said the hostages will die if their governments fail to condemn the occupation.

The foreigners have identified themselves as Turk Bulent Yanik and Egyptian Victor Tawfiq Jerges.

Egyptian Foreign Minister Ahmed Maher said the Egyptian delegation in Baghdad is following the situation and maintaining contact with the relevant Iraqi authorities.

Meanwhile, weeks after their capture, three Italian hostages taken hostage in Iraq were shown on a video broadcast on an Arab television station.

Four Italian men working as private guards in Iraq were kidnapped April 12. Soon after, the captors executed one, Fabrizio Quattrocchi and issued a videotape of his killing.

The footage shown on Wednesday on the Al-Jazeera satellite network – and immediately re-broadcast on Italian television – depicted the three remaining hostages eating and sitting in chairs before the camera.

The men were bearded and a little haggard but seemed not to have been physically harmed.

Although it was not clear when the footage was filmed, it was the first video of the men since April 26, when Arab TV channel Al-Arabiya showed footage of the three eating food from a large pot with their fingers.

Italians have followed the fate of the three with great concern. After initial indications that the three would be freed, their captivity has dragged on.

During that period, the Italian government has been working to free the three but is not speaking about the negotiations.

An Iraqi armed group calling itself the Green Brigade has said it was behind the abductions.

Iraqi leaders sign charter

The Council cast aside its communal and religious differences to sign the groundbreaking document after several delays.

Council members hailed the document, saying it enshrines basic freedoms and the protection of human rights in Iraq after decades of living under former dictator Saddam Hussein.

But the country’s top Shi’ite cleric has refused to endorse the interim charter.

Ayatollah Ali al-Sistani, who holds sway over the country’s 60 percent Shi’ite majority, said the document would make it harder for Iraq to agree on a permanent constitution, a crucial foundation for democracy.

Ayatollah Sistani’s objections to the document forced the signing of the constitution to be abandoned at the last minute on Friday, when five Shi’ite council members backed out of the ceremony.

After talks on the weekend with Ayatollah Sistani and other clerics in the holy city of Najaf, officials went ahead with the signing on Monday Iraqi time.

The Shi’ite politicians said Ayatollah Sistani gave them the go-ahead to sign despite his objections because he did not want to seem to be blocking progress.

Blasts rang out across Baghdad just before the signing, as a crowd of children dressed in Iraqi national costumes sang traditional songs to assembled dignitaries at the ceremony.

Police said insurgents fired mortars at a police station, wounding three civilians and two policemen. Security forces had been on high alert for attacks aimed at disrupting the signing.

Iraq’s US governor, Paul Bremer, also hailed the agreement and noted the difficulties it had faced.

“We are witnessing the birth of democracy and birth is painful, as we’ve learned over the last few evenings,” he told the council.

“Not everyone got everything they wanted in this law – that’s the way of democracy.”

The act also clears a major hurdle in Washington’s plans to hand power back to a sovereign Iraqi Government at the end of June, after missing the original deadline last month.

It will last until a permanent charter is drawn up by a new parliament directly elected by the people before the end of January next year.

Martha Stewart facing jail

Stewart, 62, was convicted on charges of conspiracy, obstruction of justice and two counts of making false statements to federal investigators. Each charge carries a maximum sentence of five years behind bars.

Her former stockbroker, Peter Bacanovic, was found guilty of four of the five charges against him.

However Stewart has continued to protest her innocence, in a message posted on her website, and has vowed to appeal.

US District Judge Miriam Cederbaum set the sentencing date for June 17. It is believed Stewart will most likely spend one to three years in jail.

The charges stem from her trading in a bio-tech company, ImClone, run by her friend Samuel Waksal, a day before the company announced news that caused the share price to plunge.

Police said she had received an improper tip that ImClone’s anti-cancer drug would not be approved, however she claimed she had a prior arrangement to sell her stock in the company should the share price dip below a certain level.

Waksal is now serving a seven-year prison term after pleading guilty to securities fraud and other charges.

“I am obviously distressed by the jury’s verdict, but I continue to take comfort in knowing that I have done nothing wrong,” she said on her website

“I will appeal the verdict and continue to fight to clear my name,” she said.

US Attorney David Kelly however rejected her depiction as a victim.

“The victims in this case are the entire American public who rely on the integrity of our system to make sure that justice is done and they can invest their money safely and securely,” Mr Kelly told reporters outside the court, adding that Stewart was treated the same as any other defendant.

Juror Chappell Hartridge told reporters the jury was convinced of her guilt, largely due to her “inconsistent story.”

Through Stewart’s own company, Martha Stewart Living Omnimedia, she stamped her style on everything from magazines, recipes, bed linen and other lifestyle products.

After the verdict, Omnimedia shared plunged 22.6 percent.

UAE to increase oil production as OPEC meets

The United Arab Emirates has already announced it will increase oil production this month by 400,000 barrels per day over its OPEC quota to help ease record prices.

And Saudi Oil Minister Ali al-Nuaimi said Riyadh and OPEC aim to bring down soaring oil prices to $US22-28 a barrel.

“We are now producing at 88 per cent of our capacity,” said OPEC head Purnomo Yusgintoro, who is also the Indonesian energy minister.

“We want to contribute for the settlement of the high oil prices,” he said.

Without a supply increase, dearer oil could dramatically slow global economic growth.

He added that OPEC is now producing well above its ceiling of 23.5 million barrels per day. Output, including Iraq, is around 28 million barrels per day.

Iraqi output is not included in the quota system as the country is allowed to produce as much as it can to make up for losses incurred by past wars and the sanctions imposed during Saddam Hussein’s reign.

UAE Oil Minister Obeid bin Saif al-Nassiri said its increase is a response to client demand, “and to help contain prices on the international market and to stabilise the world economy”.

The UAE, one of only a few OPEC countries with spare production capacity, has a quota of 2.051 million bpd.

Meanwhile analysts say oil prices look set to remain above $US40 a barrel for some time to come after weekend terrorist attacks in the Saudi Arabian oil city of Khobar drove crude prices to record highs.

Saudi Oil Minister Ali al-Nuaimi said here Wednesday that Riyadh and OPEC aim to bring down soaring oil prices to the price band of between 22 and 28 dollars a barrel.

OPEC producers have gathered in Beirut for a meeting overshadowed by the attack.

They are expected to agree to raise the cartels’ output, ahead of their formal meeting on Thursday.

Boeing discrimination allowed

Boeing has been seeking exemptions from state anti-discrimination laws for employees of its Australian subsidiaries.

It argues that without being able to choose the nationalities of its Australian employees, the subsidiaries would have difficulties complying with American laws covering defence contractors.

Exemptions from state anti-discrimination laws have already been granted to Boeing in Victoria and Queensland, and a similar exemption is being sought in New South Wales.

The exemptions allow Boeing to ask employees to wear a badge identifying whether they are Australian, American, Canadian, or another nationality and will limit non-Australians’ computer access.

A Boeing spokesman in Australia says the exemptions will not compromise the rights or position of any existing employee.

But Greg Connellan, from the civil rights group, Liberty Victoria, says the new rules are discriminatory.

“What they are being asked to comply with, in no way addresses security issues. All it does is enable certain employees to be discriminated against and presumably other employees to have discrimination in their favour on the basis of their country, does nothing to address real security concerns and may in fact make the security situation worse.”

David Bernie, vice-president of the New South Wales Council for Civil Liberties, says the exemptions mean overseas companies are being allowed to infringe on Australian laws.

“It is the first time that I’ve known of exemptions being given effectively because of commercial pressure really from a foreign country, because the situation here is that Boeing would be commercially disadvantaged if it did not comply with these provisions and it is a great shame to see that basically we are selling away hard won rights and giving up on those rights in these circumstances.”

US abortion ruling “unconstitutional”

It was the first major limit on abortion law in the US since it was enshrined after the famous 1973 Roe vs. Wade case.

Judge Phyllis Hamilton, a federal judge in San Francisco, said the law is too vague, and restricts women’s rights to choose to have an abortion.

The White House has hit out at the ruling, with spokesman Scott McClellan saying late-term abortion is “an abhorrent procedure that must be ended once and for all.”

The ruling was after a case was brought by Planned Parenthood, an organisation that operates abortion clinics across the country.

“This court concludes that the act is unconstitutional because it poses an undue burden on a woman’s ability to choose a second-trimester abortion; is unconstitutionally vague; and requires a health exception,” said Judge Hamilton’s ruling.

The law was implemented to ban an abortion method that is usually used in the fifth or sixth month of pregnancy but can be used as early as the 12th to 15th weeks.

The method is defined by law as “partial-birth abortion”, in which the foetus is taken outside the mother’s body before being killed.

Mr Bush and the US Justice Department had described partial-birth abortions as inhumane and medically unjustified.

The White House said Mr Bush “strongly disagrees with today’s California court ruling, which overturns the overwhelming bipartisan majority in Congress that voted to pass this important legislation,” and has promised an appeal.

How opponents of the ban on the method argue that it does not allow exemptions for a woman’s health, a caveat cited by former US President Bill Clinton, who twice rejected similar legislation.

Abortion is one of the most politically and socially divisive issues in the US, frequently splitting the country along party and religious lines.

Georgia-Ossetia tensions mount

Georgia’s military sources said some 400 interior ministry troops had been sent to Georgia’s trading posts with South Ossetia, but said that their main task was to stamp out illegal trade through the region.

The leader of the separatist region vowed that his militia would fight back if Georgian troops crossed the contentious border.

“We are in full control of the situation,” Eduard Kokoity told Russia’s NTV television.

“I, as the commander-in-chief, have issued an order to revert to the use of force in case the border of South Ossetia is crossed,” Kokoity said.

Russian peacekeepers patrol inside South Ossetia where most people hold Russian passports.

Georgia reportedly agreed to withdraw some of the troops after settling an agreement with South Ossetia’s Russian authorities.

But Moscow issued a firm condemnation of the troop relocation and Russia’s foreign ministry said Georgia was using “excuses” to pull its troops up to South Ossetia’s borders and that “the situation was only being destabilized” in the region.

After the statement, the Kremlin reported that Georgian President Mikhail Saakashvili called his counterpart Vladimir Putin to explain Georgia’s position, but gave no other details.

Saakashvili also appeared in a nationally-televised address, saying “we have no plans to attack, or to have a war with, Ossetia.”

He said his talks with Putin were “warm” and that he expected the situation to be ironed out completely by Tuesday.

Saakashvili has vowed to pull together his fractured republic since peacefully overthrowing the leadership of Eduard Shevardnadze last year, and then winning the presidency in a nearly unanimous vote in January.

He has offered South Ossetia and Abkhazia, another pro-Moscow region that controls a key port on the Black Sea, special status.

Abkhazia has already rejected the offer, and a parliamentary election in South Ossetia this month handed victory to the party of the region’s pro-Russian president.

South Ossetia fought a separatist war with Georgia in the early 1990s, seeking union with their ethnic brethren over the border in the Russian region of North Ossetia.

Georgian troops were defeated and withdrew leaving South Ossetia to run its own affairs, though it is still internationally recognised as a part of Georgia.

Dutroux gives first evidence

Dutroux – is accused of kidnapping and repeatedly raping six girls in the 1990s, and killing four of them – said he was the hapless fall-guy for a shadowy paedophile gang.

He admitted building an underground cell to hold kidnapped girls, but he told the court he was acting for a “big crime ring”.

Dutroux addressed the court from behind bullet-proof glass to claim that two police officers were part of a sinister network that kidnapped and raped girls to order.

He described what he claimed was only a limited role in events that led to the discoveries of the bodies of four girls and the rescue of two others in the summer of 1996.

The jobless electrician’s wife, Michelle Martin, demolished his denials, but confessed to letting two eight-year-old girls starve to death.

Dutroux lost his composure only once during his three-hour testimony, when asked by the presiding judge, Stephane Goux, to sum up how he felt about those events.

“I made mistakes, I even committed some crimes. If we could go back to before… but we can’t,” he said.

A lawyer for one of the alleged victims responded angrily to the testimony, saying it made him feel “like crying”.

Mr Dutroux has admitted kidnapping two teenage girls and raping his captives, but denies kidnapping the younger girls and the charges of murder.

He referred regularly to his upbringing in testimony on Wednesday.

“It was the same old story: my mother couldn’t stand me and my father didn’t want to accept me as his son, knowing that he wasn’t my real father,” he said in court.

According to post-mortem examination reports quoted at the trial, two eight-year-olds were left to starve to death after being raped.

Police say the other two victims who died were drugged before being buried alive.

One of the two girls who survived, Sabine Dardenne, is planning to give evidence against him.

About 500 witnesses are expected to give evidence in the trial, which will probably last until June.

Italy faces budget woes

In a report to the central bank on the state of the Italian economy, Mr Fazio stressed that without corrective measures, the Italian budget deficit would breach the three percent limit written into the European Union Stability Pact.

The pact enshrines the rules underpinning the euro currency.

The governor said GDP growth was slow and expected to mount to no more than one percent this year, and that industrial output was falling.

Turning to Prime Minister Silvio Berlusconi’s plans to cut taxes, Mr Fazio stressed that the additional resources necessary will have to be found somewhere.

Mr Berlusconi has said he wants to introduce two flat income tax rates of 23 percent and 33 percent, but has ruled out reducing health and welfare spending to finance the cuts.

Meanwhile, the opposition said Mr Fazio’s report was proof of the failure of Mr Berlusconi’s economic policies.

The Democratic Left, the largest opposition party, said that “Fazio said what we’ve been saying for a long time, that the public accounts are getting out of control”.

Democratic Left chief Piero Fassino said that “this is further confirmation that the Italian economy has stalled and that its competitiveness is being undermined”.

Daisy Party leader Francesco Rutelli said that “Fazio has confirmed that Italy is in a difficult situation. We accuse the government of failing to act in the interests of Italy’s economy, its families and its businesses”.

But the government denied that the budget deficit risked breaching the 3 percent ceiling.

Economy Minister Giulio Tremonti said that “Italy will make it this year like every year, respecting its pacts. Such forecasts always arrive at this time of the year and then Italy always pulls through”.

Hamas militants die in missile strike

Witnesses say the car was targeted with two rockets close to the Jewish settlement of Netzarim just south of Gaza City. At least two bystanders were also injured in the missile strike.

The Israeli Government says the three militants were preparing for an imminent attack against Israelis, but gave no further details of the target.

The Israeli military’s chief of staff, Moshe Yaalon, announced on Tuesday that the army would intensify its operations against militant groups in the Palestinian territories.

But chief Palestinian negotiator Saeb Erakat has accused Israel of escalating the Middle East conflict, saying the latest attack is proof of Israel’s aggressive intent despite talk of withdrawing troops from Gaza.

The Jewish settlement of Netzarim, whose 65 families are guarded by an entire army battalion, is set to be dismantled as part of Israeli Prime Minister Ariel Sharon’s controversial plan to disengage from the Palestinians.

However the plan has suffered another blow after senior aides to Mr Sharon returned from Washington after failing to secure US backing for the disengagement plan.

But diplomatic sources say they have so far failed to convince Washington to back the “disengagement plan” which would see Israel strengthen control over West Bank settlements as well as pull out from Gaza.

White House officials are expected to travel to Israel for a further round of talks next week, with Washington seeking more details before deciding whether to give the plan its approval.

Mr Sharon has said that he intends to embark on his own unilateral measures within a few months if the deadlock in the bilateral peace process with the Palestinians is not broken, but says US backing for such a project is vital.