In a speech on Tuesday, Ben S. Bernanke, the chairman of the Federal Reserve, gave his strongest hint to date of an emerging consensus that problems will persist when he outlined a series of steps the Fed is considering taking in the coming months. One such step would extend into next year low-interest lending programs to Wall Street’s largest investment banks.

The programs, one of which was set to expire in September, can exist only if the Fed issues a finding that there are “unusual and exigent circumstances” that justify them.

Bernanke also recommended that Congress grant the Fed broader authority to monitor and supervise the financial markets to assure greater stability in the future. But with time running out on this session, lawmakers are unlikely to adopt such legislation before next year.

Treasury Secretary Henry M. Paulson, Jr., also speaking Tuesday, said that the Bush administration was working to prevent as many home foreclosures as possible, but that “many of today’s unusually high number of foreclosures are not preventable.” Paulson said 1.5 million home foreclosures were started in 2007 and that an estimated 2.5 million more will take place this year.

U.S. exports to Iran have jumped dramatically during president George Bush's years in office in spite of his tough rhetoric against the Tehran government and the imposition of fresh economic sanctions.

Analysis of U.S. government trade figures published Tuesday by the Associated Press revealed a near tenfold increase over the last seven years in sales to Iran.

Goods include cigarettes, aircraft spare parts, bras, musical instruments, films, sculptures, furs and golf carts and/or snowmobiles.

Although the sums are small, the disclosure is a political embarrassment for the U.S., coming at a time when it has been putting pressure on European governments, banks and companies to cut ties with Tehran.

John Rankin, a U.S. Treasury spokesman, Tuesday acknowledged there had been an increase but attributed this mainly to a change in legislation in 2000 that allowed the export of agricultural and medicinal goods. Before that, trade had been effectively zero. He played down the exports as "miniscule," a quarter of 1% of all Iran's imports.

The prime minister said the unwillingness of the "whole international community to accept an illegitimate government" was demonstrated by the agreement to send a United Nations special envoy to the Zimbabwean capital, Harare, in addition to endorsing "financial and other measures against those responsible for violence".

The backing for Britain's tough stance came after Brown handed photographs of the charred body of a member of the opposition Movement for Democratic Change (MDC), Joshua Bakacheza, to G-8 and African leaders attending the three days of talks in Hokkaido, Japan.

A Downing Street source said: "Joshua is just one of the many innocent people murdered by Mugabe's thugs in recent weeks, but by highlighting the way he was brutally murdered while helping a widow and her children, the prime minister was telling other world leaders that this is a tragedy which is going on right now as they sit talking, and every day we wait to act more innocent people will suffer."

When six pages were cut from testimony on climate change and public health by the head of the Centers for Disease Control and Preventionlast October, the White House insisted the changes were made because of reservations raised by White House advisers about the accuracy of the science.

Yet Jason K. Burnett, until last month the senior adviser on climate change to Environmental Protect Agency  Administrator Stephen Johnson, says that Cheney's office was deeply involved in getting nearly half of the CDC's original draft testimony removed.

''The Council on Environmental Quality and the office of the vice president were seeking deletions to the CDC testimony (concerning) ... any discussions of the human health consequences of climate change,'' Burnett has told the Senate Environment and Public Works Committee.

Shares of IndyMac, the largest independent, publicly traded U.S. mortgage lender, fell as much as 52 percent.

Paul Miller, a Friedman, Billings, Ramsey & Co analyst, said shareholders could be wiped out, citing IndyMac's decision to stop most mortgage lending and inability to raise capital. He cut his price target for IndyMac shares to zero from $1.00.

"It's hard to gauge how this situation will resolve itself," said Christopher Wolfe, managing director at Fitch Ratings, which downgraded IndyMac on Tuesday. "We see a high likelihood of some kind of regulatory intervention occurring, which could result in asset dispositions, or the thrift going into receivership."

In a regulatory filing, IndyMac said it still faces "elevated levels of deposit withdrawals" after Sen. Charles Schumer, who chairs Congress's Joint Economic Committee, late last month raised questions to regulators about a potential collapse.

Crude prices tumbled, falling $5.33 to settle at $136.04 a barrel on the New York Mercantile Exchange, bringing oil's two-day drop to more than $9. The average U.S. retail price of a gallon of gasoline remains at a record $4.108, according to AAA auto club, the Oil Price Information Service and Wright Express.

Speeches by Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and JPMorgan Chase & Co. Chief Executive Jamie Dimon gave the market some reassurance about the financial sector. Investors have been concerned this week about the health of government-backed lenders Fannie Mae and Freddie Mac; the two companies' troubles helped send prices lower on Monday, but they also helped lead the rebound Tuesday.

The market was relieved to hear Bernanke say in a speech the central bank might extend its lending efforts to investment banks; the Fed began allowing the big companies to borrow after the near-collapse of Bear Stearns Cos. earlier this year. At the Federal Deposit Insurance Corp.'s forum on mortgage lending, where Bernanke spoke, Dimon said ''the future is very, very bright,'' but that ''I do think we have some very serious issues to face.''

The job reductions - parceled out among Germany, the United States and other countries - represent about 4 percent of the Siemens work force and constitute a significant retrenchment for the company, which is also laboring to put a huge corruption scandal behind it.

The cuts are also a rare dose of bad economic news for Germany, which has proved to be remarkably resilient over the last year, both to the woes in the United States and to the strength of the euro.

Until this week, Germany witnessed a steady decline in unemployment, which is now at its lowest level since 1992. But Siemens, a conglomerate that makes products ranging from light bulbs to locomotives, has often struck a discordant note, lurching from problem to problem.

The United Kingdom is in serious danger of heading into recession as the credit crunch tightens its hold on the economy, according to a survey of businesses across the country published Tuesday. An increase in the number of firms reporting fewer orders, more job cuts and less investment is the latest indication that the British economy is suffering from the effects of the global credit crunch and the steep rise in the price of fuel, food and other raw materials.

Firms in the service sector have seen "alarming" declines in the past three months, with those reporting lower orders outnumbering those recording rises for the first time since 1990, the British Chambers of Commerce's latest quarterly economic survey of 5,000 companies says.

It adds that if these trends continue, the business sector is only three months away from technical recession.

Government figures Tuesday showed that manufacturing production in May dropped unexpectedly by 0.5% from the previous month, and was down by 0.8% on this time last year. The wider measure of industrial production, which includes output from utilities and mining, also posted a decline of 0.8% in May.

David Frost, head of the British Chambers of Commerce, said: "These results show a real risk of recession in the coming months. This is deeply worrying, not just for business, but for the consumer too, with both manufacturing and services reporting negative results. The temptation for the government will be to raise business taxes in the next pre-budget report because the exchequer is running out of money. This would be a catastrophe."

An official administration guidance document on wetlands policy is undermining enforcement of the Clean Water Act, said a March 4 memo written by the U.S. Environmental Protection Agency's chief enforcement officer.

The memo by Granta Y. Nakayama, EPA's assistant administrator for enforcement and compliance assurance, was obtained by the advocacy group Greenpeace and released Monday by two House Democratic committee chairmen. It highlights the confusion that has afflicted federal wetlands protections since a 2006 Supreme Court decision.

That 5 to 4 decision, known as Rapanos v. United States, held that the Army Corps of Engineers had exceeded its authority when it denied two Michigan developers permits to build on wetlands, but the court split on where the Corps should have drawn the line on what areas deserve protection.

A plurality made of up Chief Justice John G. Roberts, Jr., and Justice Antonin Scalia, Clarence Thomas and Samuel A. Alito, Jr., proposed an across-the-board reduction in the Corps' regulatory role, but Justice Anthony M. Kennedy -  who cast the deciding vote - called for a case-by-case approach in deciding how the government should proceed. That left the ruling open to interpretation.

The Church of England was thrown into turmoil last night over the issue of women bishops, as it rejected proposals that would have accommodated clergy strongly opposed to the historic change.

In an emotional, sometimes bitter debate lasting more than seven hours, the General Synod voted against introducing separate structures and "superbishops", to oversee parishes opposed to women bishops, because they were seen as amounting to institutionalized discrimination.

Instead, the 468 members narrowly agreed to the idea of introducing a national statutory code of practice, throwing out all compromises that would have appeased opponents of women bishops.

A code of practice has yet to be fully explored, but will not satisfy the demands of traditionalists and conservative evangelicals, who had formed an alliance to block consideration of any such code.

The Bishop of Winchester, Michael Scott-Joynt, condemned the final vote, taken after amendments had been tabled and rejected, as "mean-spirited and short-sighted". "The manifest majority was profoundly short-sighted. At every point it could have offered reassurances, and it did not do that," he said.

Leaders of the eight leading industrialized economies gathered in Hokkaido, Japan, on Monday for the start of this year's G-8 summit. One of the items on the agenda will be a European Union proposal to create a food reserve system to stabilize grain prices.

On Monday, many German newspaper commentators criticized the idea, arguing it will only have a short term impact on markets at best and is merely a symbolic step that highlights the powerlessness of the G-8 in its current form to tackle the world's problems.

The Group of Eight leading industrialized nations made up of the United States, Canada, Japan, Germany, Britain, France, Italy and Russia, has a range of pressing global problems to tackle: climate change, surging oil and food prices, the financial crisis, a looming world recession.

The toxic remains have yet to be carted away. No one has examined to what extent, over more than two decades, they have seeped into the soil and water, except in desultory checks by a state environmental agency, which turned up pesticide residues in the neighborhood wells far exceeding permissible levels.

Nor has anyone bothered to address the concerns of those who have drunk that water and tended kitchen gardens on this soil and who now present a wide range of ailments, including cleft palates and mental retardation, among their children as evidence of a second generation of Bhopal victims, though it is impossible to say with any certainty what is the source of the afflictions.

Why it has taken so long to deal with the disaster is an epic tale of the ineffectiveness and seeming apathy of India’s bureaucracy and of the government’s failure to make the factory owners do anything about the mess they left. But the question of who will pay for the cleanup of the 11-acre site has assumed new urgency in a country that today is increasingly keen to attract foreign investment.

An alternate board, which would include Adolphus Busch IV, the uncle of Anheuser CEO August Busch IV, will give shareholders "a direct voice" in the takeover, said InBev.

InBev plans to file a preliminary consent solicitation with the U.S. Securities and Exchange Commission Monday, asking Anheuser's board to consult shareholders over the firing of 13 current board members.

Shareholders have the right to sue Anheuser's board if they feel the directors are not acting in their best interest. A majority of shareholders would need to back InBev's plan.

The Belgian-based maker of Stella Artois wants Anheuser to respond within 10 days.

The Vatican Tuesday criticized the Church of England's decision to press ahead with the ordination of women bishops, saying it presented a "further obstacle" for reconciliation between Canterbury and Rome.  A statement released through the Vatican Council for the Promotion of Christian Unity said it had "regretfully" learned of the historic vote, which took place on Monday after a seven-hour debate.

It read: "Such a decision signifies a breaking away from the apostolic tradition maintained by all of the churches since the first millennium, and is a further obstacle for reconciliation between the Catholic church and the Church of England.

"This decision will have consequences on the future of dialogue, which had up until now born fruit."

Cardinal Walter Kasper, who heads the unity council, will reiterate the Catholic position at next week's Lambeth conference.

The condemnation came as a senior figure from the Catholic wing of the Church of England warned of a "bloodbath" at next week's once-a-decade summit, which will draw 700 bishops from around the world.

He is at heart, he told a crowd in suburban Atlanta, Georgia, a pretty progressive guy who just happens to pack along a complicated world view.

“Look, let me talk about the broader issue, this whole notion that I am shifting to the center,” he said. “The people who say this apparently haven’t been listening to me.”

To this, he adds, parenthetically: “And I must say some of this is my friends on the left” and those in the media.

I had a good laugh when my friend Seth Gitell reported in the New York Sun on a campaign by the dean of the obscure  Massachusetts School of Law to put George Bush and other top White House officials on trial for war crimes.

Lawrence Velvel, Gitell notes, wrote last month that his model was the Nuremberg trials held after second world war. Velvel went so far as to say that "we must insist on appropriate punishments, including, if guilt is found, the hangings visited upon top Germans and Japanese." Oh, my.

Though I found Velvel's apparently earnest quest as ridiculous as Gitell did, the idea of holding our leaders accountable for the crimes and constitutional violations of the past seven and a half years isn't ridiculous in the least.

We are less than a decade removed from impeaching a president and nearly relieving him of office because of a lie in a civil deposition about blowjobs. Yet when congressman Dennis Kucinich recently attempted to impeach Bush over torture, extraordinary rendition and other grotesque constitutional abuses, Kucinich's embarrassed fellow Democrats couldn't kill the measure quickly enough.

Why? Top Democrats are so complicit in what has happened since 9/11 that my guess is they dare not travel down that road. From voting in favor of the war in Iraq to holding the telecommunications companies guiltless for their role in spying on Americans (Barack Obama infuriated much of his progressive base by voting for immunity), the Democrats have often acted more as enablers than as a true opposition party. From their point of view, no doubt it's best to move on.

The accord, the first of its kind to be reached with a Central or East European country, was signed in Prague by Secretary of State Condoleezza Rice and her Czech counterpart, Karel Schwarzenberg, despite strong opposition from Russia. It must also be ratified by Czech lawmakers, many of whom oppose it.

Russia warned Tuesday that the accord could lead to a military response, which the Kremlin has previously threatened but never specified.

Russian President Dmitri Medvedev and his predecessor, Vladimir Putin, who is now the Russian prime minister, had told the United States that the Kremlin saw a missile shield in this part of Europe as a threat to Russian security. Putin said it could even lead to a new Cold War.

American and Czech officials said the system’s radar component, to be stationed south of Prague, would defend the NATO members in Europe and the United States against long-range weapons from the Middle East, particularly Iran.

The declaration by the so-called Group of Eight - the United States, Japan, Germany, Britain, France, Italy, Canada and Russia - came under intense criticism from environmentalists, who called it a missed opportunity and said it ignores the urgent need to cut emissions more rapidly.

However, European leaders, who have long pressed President Bush to adopt a more aggressive stance on climate change, said they were pleased with the agreement, which is non-binding. They cast it as an important step toward laying the groundwork for a binding international treaty, to be negotiated in Copenhagen in 2009 under the auspices of the United Nations.

“This is a strong signal to citizens around the world,” the president of the European Commission, Jose Manuel Barroso,  told reporters at a news conference near here. “The science is clear, the economic case for action is stronger than ever. Now we need to go the extra mile to secure an ambitious global deal in Copenhagen.”

One of the strongest warning signs came Monday, when shares of the nation’s most important mortgage companies, Fannie Mae and Freddie Mac,plummeted. After falling almost continuously over the past month, in just one day Freddie Mac tumbled another 18 percent, and Fannie Mae lost 16 percent amid concerns that the companies would need to raise billions of dollars in fresh capital.

Fannie Mae and Freddie Mac are the nation’s largest buyers of home mortgages, and traditionally the government’s backstop for the housing economy but, with Monday’s plunge, each of these giants has now lost more than 60 percent of its market value this year. The declines, along with a falling stock market and growing unease about the possibility of more red ink at big banks, reflect a growing conviction consensus among investors that the current housing slump will last longer, and prove more severe, than initially feared.

As a result, investors are signaling that they are far from convinced that any enterprise - even ones with the strongest backing - can successfully navigate these choppy waters, and that those who do survive will pay dearly.

“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Virginia. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”

The Senate should reject a bill this week that would needlessly expand the government’s ability to spy on Americans and ensure that the country never learns the full extent of President Bush’s unlawful wiretapping.

The bill dangerously weakens the 1978 Foreign Intelligence Surveillance Act, or FISA. Adopted after the abuses of the Watergate and Vietnam eras, the law requires the government to get a warrant to intercept communications between anyone in this country and anyone outside it - and show that it is investigating a foreign power, or the agent of a foreign power, that plans to harm America.

The FISA law created a court to issue those warrants quickly, and over 30 years, the court has approved nearly 20,000 while rejecting perhaps a half-dozen. In any case, the government can wiretap first and get permission later in moments of crisis.

But where is the enemy? Outside the city, in the direction of the Khyber Pass, the sound of exploding heavy artillery rounds can be heard every few seconds.

Roger Sarfaraz listens as the monotonous recurrence of muffled detonations keeps breaking the silence of an oppressively hot summer day. He is standing on the edge of Hayatabad and looks like someone who could tell you right down to the last decimal point what this war is costing him. This smart-looking, athletically-built man wearing a Playboy t-shirt is a real estate agent.

The prospect of successful careers in medicine should have brightened the mood of the four newly qualified doctors. Yet the glow of achievement was overshadowed by foreboding about the future. They feared the strictly secular Turkey they had grown up in was giving way to an Islamist new order where men and women were segregated, alcohol was banned and people were told how to dress.

A litany of anecdotes supported their concerns: religious female student doctors refusing to treat male patients, and vice-versa; more women students wearing the turban, or headscarf, despite it being banned from campuses and government workplaces as an Islamist political symbol; secular women shying away from wearing revealing clothes for fear of being harassed or reprimanded as immodest.

The students had no doubt about who to blame - the socially conservative Justice and Development party (AKP) government, which has upset secularists by demanding a more prominent place for Islam in the country's life.

"Religious people feel that with the AKP in government there is an organization there to support this kind of behavior," said Ferhat Korkmas, 26, as he prepared to graduate from Erciyes University in Kayseri, a city in central Anatolia seen as the AKP's electoral and spiritual heartland. "The head of the bureaucracy will turn a blind eye to the female doctor wearing a headscarf or refusing to treat a male patient."

"They want to get better acquainted with him," said the source.

However, the source, who asked not to be named, was reserved about the prospects of Obama holding a speech before the Brandenburg Gate.

"The Brandenburg Gate is the most famous and history-rich site in Germany," the Chancellery source said. In the past, the location has only been used on very special occasions for political speeches by world leaders. And it has been reserved for use only by elected American presidents, not candidates. The decision on whether the Democrat can speak at the location ultimately lies with the Berlin state government. Chancellery officials are concerned that the Brandenburg Gate could be turned into an "arbitrary stage" that other campaigns could also seek to use in the future.

It's a traditional practice for U.S. presidential candidates to visit Germany before the election. However, the source pointed out that agreements can only be made with elected presidents. The source also noted that a the German federal government would also be equally pleased to play host to a visit by Republican candidate John McCain. The door is just as open for him, said the source.

Maliki floated the idea on Monday during a visit to the United Arab Emirates, where he spoke with Arab ambassadors about a security pact being negotiated to determine the future role of U.S. troops in Iraq. The agreement would replace a U.N. mandate authorizing the presence of the troops, which is set to expire Dec. 31.

Maliki said that Iraq has proposed a short-term memorandum of understanding with the United States instead of trying to forge a longer term pact on an issue that has spawned opposition across Iraq's political divides.

"The current trend is to reach an agreement on a memorandum of understanding either for the departure of the forces or a memorandum of understanding to put a timetable on their withdrawal," said Maliki, according to a statement released Monday by his office that did not specify how long a period a memorandum would cover. "In all cases, the basis for any agreement will be respect for the full sovereignty of Iraq."

Among the victims of the attack, the first in seven years on a regional diplomatic mission in Afghanistan, were at least four Indian citizens: the Indian defense attache, a political counselor and two other Indian officials. Six Afghan police officers were also killed. Many of the rest appeared to be civilians.

The fact that the Indian Embassy was attacked raised suspicions among Afghan officials that Pakistani operatives allied with the Taliban had used the bombing to pursue Pakistan’s decades-long power struggle with India. 

India said it would send a delegation to Pakistan to investigate what the Indian Foreign Ministry called “this cowardly terrorist attack.”