European Union ministers have called for Jerusalem to serve as the capital of both Israel and a future Palestinian state as part of a negotiated peace.

The foreign ministers dropped an earlier reference stating explicitly that East Jerusalem should be the capital of a Palestinian state.

Palestinians welcomed the statement. Israel said it contained "nothing new".

Jerusalem's status is one of the most sensitive and complex issues in the Israeli-Palestinian conflict.

"If there is to be a genuine peace, a way must be found through negotiations to resolve the status of Jerusalem as the future capital of two states," the statement from EU foreign minsters said.

Rhodri Morgan has tendered his resignation as first minister to the Queen after nearly 10 years in the job, and received all-party tributes.

He said the "self confidence" Wales had achieved over the previous decade "bodes well" for the next 20 years.

The Conservatives said Mr Morgan, 70, had made an "outstanding contribution".

Presiding officer Lord Elis Thomas said he had kept the trust of the Welsh people and brought a "dignity and your unique trait to the office".

An Irish bishop flew to Rome yesterday to hand in his resignation after days of angry and intense pressure over his handling of cases of child sexual abuse within the Catholic Church.

Donal Murray, Bishop of Limerick (pictured), gave every sign of acting with great reluctance, after spending some days apparently playing for time in the hope of keeping his post. But the wave of shock and horror which followed publication of a damning report, which revealed a systematic high-level church cover-up of the abuse of children by priests, is in effect sweeping him from office.

Retired French accountant André Bamberski waited more than a quarter of a century for the man he believed had killed his daughter to be brought to justice.

Exactly 27 years and 99 days after Kalinka Bamberski, 14, died, her father took the law into his own hands, judges heard as his court case started today.

The man he blamed for killing her, German cardiologist Dieter Krombach, was abducted from his home in Bavaria in October, beaten, bound and gagged. He was then driven across the border to France where he was left near a courthouse in the eastern city of Mulhouse.

Turkey's Constitutional Court is considering whether to ban the country's leading Kurdish party.

Prosecutors accuse the Democratic Society Party (DTP), which holds 21 seats in the 550-member parliament, of supporting Kurdish separatist rebels.

The 11 judges are expected to take days or weeks to reach their verdict.

Tension in the mainly Kurdish south-east of Turkey has risen in recent months despite a government drive to improve ties with the Kurdish minority.

Analysts say if the court decides to close down the DTP, it could derail Prime Minister Recep Tayyip Erdogan's effort to broaden the rights of Kurdish citizens.

Skopje had been hoping for a different outcome from a meeting of the union's foreign ministers on Monday. But after mulling it over, the diplomats decided it was best to revisit the issue of Macedonian accession when Spain picks up the reins of the rotating presidency next year.

Greece is opposed to starting talks with the ex-Yugoslav republic on the grounds that Macedonia is the name of a Greek province and that as such it ought not be adopted by anyone else.

The European Court for Human Rights in Strasbourg has agreed, six votes to one, with a Spanish woman of gypsy origin after she was denied a widow's pension by the Spanish state. It ruled that article 14 which prohibits discrimination, and article 1 on the protection of property of the European Convention on Human Rights had both been violated.

The Spanish Government has said that her marriage, under the gyspey (sic) rites at the age of 15, was not valid in law.

But despite the fact that gypsy weddings are not legal in Spain the court in Strasbourg recognised the arguments of the woman, Maria Luisa Muñoz, known as `la Nena'. She had six children with her husband who died in the year 2000, and was left without any payments despite the fact that her husband, a labourer, had paid into the Spanish social security system for more than 19 years.

Banks will be hit by a 50 per cent tax on bonus pay-outs, Alistair Darling, the chancellor, said in his pre-Budget report, in a move that will inflame bankers but is likely to be welcomed by the general public.

The first £25,000 of bonuses will be exempt from the tax.

The Treasury estimates that the measure - which comes into immediate effect and runs until April 5 next year - will affect 20,000 bankers. Lord Myners, the City minister, recently estimated that 5,000 bankers earn more than £1m in bonuses.

"We hope it will be a disincentive for banks to pay bonuses," said one Treasury official.

The windfall tax - which politicians argue is justified, as banks have generated excess profits as a direct, or indirect, result of the bail-out of the banking system - will apply to all banks and building societies, including groups that operate in the UK under a European Union branch system.

Falling confidence in Greece's economic policies and ability to pay its debts have seen Greek shares slump 6%.

The decline came after the Fitch credit rating agency cut Greece's rating to a 10-year low. Greek bond prices also fell as a result.

Fitch's move underscores the fact that Greece's debt is the most expensive to service in the eurozone.

The European Commission urged the Greek government to take "more measures" to reduce its deficit.

Greece has the highest debt of the 16-member eurozone - forecast at 125% of gross domestic product next year.

Japan has agreed a 7.2 trillion yen ($81bn; £48bn) stimulus plan designed to prevent the country's economy from slipping back into recession.

Japan's economy grew for the second straight quarter between July and September, but the return of deflation has sparked fears growth could stall.

The strong yen is also holding back Japanese exporters.

The stimulus was due to be announced last Friday but was delayed after disagreements over its size.

This is the first major economic stimulus announcement by the newly elected Democratic Party of Japan.

House prices have risen for the fifth month in a row, says the Halifax, one of the UK's biggest mortgage lenders.

Its latest survey says prices went up by 1.4% in November, pushing the cost of the average UK home to £167,664.

Although that is still 1.6% lower than a year ago, prices are now 4.2% up since the start of the year.

The Halifax also predicted that house prices were likely to be flat over the course of 2010 if more homes were put up for sale.

Dubai's stock market has fallen for the second consecutive day on continuing fears about leading companies' ability to repay debts.

The main Dubai Financial Market index fell 6.1%, after closing down almost 6% on Monday.

Two weeks ago, Dubai World asked for a six-month delay on debt repayments. Credit agencies have since downgraded many leading Dubai companies.

On Tuesday, credit agency Moody's downgraded six state-owned companies.

Five senior executives at American International Group told the bailed-out insurer last week they may quit if their compensation was cut significantly by the U.S. pay czar, the Wall Street Journal reported.

The five senior AIG executives indicated on December 1, in written notices, that they were prepared to leave by year-end, the paper reported, citing unnamed sources. Two of them changed their minds over the weekend, the paper added.

Bob Diamond, president of Barclays, said any plans for a windfall tax on bank bonuses in the Pre-Budget Report tomorrow would be against the remuneration principles agreed at the G20.

UAL Corp.'s United Airlines has placed a much-awaited order to buy 25 aircraft from European aerospace group EADS and another 25 from US aircraft manufacturer Boeing Co., FRANCE 24 learned on Tuesday.

Reporting from the southern French city of Toulouse, where EADS subsidiary, Airbus, is headquartered, FRANCE 24's Chris Bockman said that Airbus would make about $6 billion out of the deal for the 25 A350 long-haul jetliners. The Chicago-based aviation company also placed a matching order with its rival Boeing for its 787 aircraft, according to industry sources.

Increasingly, leading bankers repeat versions of the argument made recently by E. Gerald Corrigan in his Dolan Lecture at Fairfield University.  Corrigan, former President of the New York Fed and a senior executive at Goldman Sachs for more than a decade, makes three main points.

   1. "Large Integrated Financial Groups" - at or around their current size - offer unique functions that cannot otherwise be provided.  The economy needs these Groups.
   2. Breaking up such Groups would be extremely complex and almost certainly very disruptive.
   3. An "Enhanced Resolution Authority" can mitigate the problems that are likely to occur in the future, when one or more Group fails.

These assertions are all completely wrong.

Gerry Corrigan's first claim (p.4), that Large Groups are indispensable, is completely at odds with the data.  The current size of our biggest financial firms is a recent phenomenon.  In 1998, when Corrigan already worked there, Goldman Sachs was roughly ¼ of its current size and was regarded a top international investment bank.

....

Corrigan's second claim, that breaking up banks would be hard to do, is based on assessing a "straw man" proposal - that the government dictate the microstructure of any bank downsizing.  But no one serious has put forward such an idea.

....

Corrigan's final claim, that an Enhanced Resolution Authority can deal with the manifest problems of Too Big To Fail, is simply wishful thinking.

It is a fantasy to think that any national Resolution Authority would make a difference.  All banking experts, when pressed, agree that you need to have a cross-border Resolution Authority in order to deal with the failure of a Large International Integrated Financial Group.  Show me the G20 process in place or any other international initiative that can achieve this faster than in 20 years.  (I made this point recently to leading financial officials; one of the most influential people present said, in effect, "it will never happen".)

The owner of Ralphs Grocery Co. is paying the price for helping to launch Southern California's supermarket price wars.

Kroger Co., the largest U.S. grocer, said Tuesday that it would take a $1.05-billion write-down in the value of Ralphs because the division is contending with cautious consumers, rampant unemployment in the chain's core market and the slumping value of the real estate where its stores are located.

Kroger, based in Cincinnati, also cut its full-year profit forecast and reported a third-quarter loss of $874.9 million, or $1.35 a share, compared with a profit of $237.7 million, or 36 cents, a year earlier. Sales inched up nearly 1% to $17.7 billion. Kroger shares fell $2.72, or 12%, to close at $20.13 on Tuesday. "The [economic] environment is a new game. I have never seen anything like this, said David Dillon, Kroger's chief executive.

Ralphs, which has slashed prices during the year, setting off stiff competition with regional rivals Vons and Albertsons, has seen its profit margins squeezed.

WASHINGTON -- Forget too big to fail. In the eyes of federal regulators, many Wall Street firms are too big to punish. During the past three years, some of the nation's largest financial firms have been accused by the government of cheating or misleading clients and ripping off tens of thousands of consumers of their investments.

Despite these findings, these financial giants got, sometimes repeatedly, special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses.

Among the more than a dozen firms that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America, Citigroup and American International Group.

SEC rules permit corporate lawbreakers to apply for what are known as Section 9(c) waivers from one of the agency's harshest penalties -- effectively shuttering the violator's mutual fund operations -- but regulators never rejected any of these firms' applications. While the firms were punished in other ways, they were spared from what some claimed would be "severe and irreparable hardships." In fact, the last time the SEC's staff could recall a waiver being turned down was 1978. The SEC declined to comment in detail on its decisions, however.

Iraq today suffered one of its worst days of violence this year as insurgents struck government buildings in Baghdad, killing at least 112 people and injuring up to 197.

The explosions happened within minutes of each other, with police saying there could have been as many as four or five. Insurgents, who included suicide bombers, detonated powerful explosives near the labour ministry building, a court complex near the Iraqi-protected Green Zone and the new site of the finance ministry after its previous building was destroyed in attacks in August.

An interior ministry official said at least 99 people were killed and 192 injured in those three assaults.

Lawyers acting for a prisoner on death row in Ohio were scrambling to delay his scheduled execution tomorrow morning using a new method of lethal injection that is widely used to put down pets. The procedure has never been tried out on humans and is tantamount, critics say, to human experimentation.

Barring last-minute appeals and stays of execution, Kenneth Biros, 51, will be put to death using a massive overdose of an anaesthetic. It would be the first time that a single-drug lethal injection had been administered, in contrast to the triple-drug cocktail that has become the norm in the 37 American states that have death row prisoners.

A stampede at a school in central China last night killed eight pupils and injured 26 others, state media reported today.

Seven boys and a girl, aged between 11 and 14, died in the crush as hundreds of students finished their evening homework class and rushed through a stairwell only 4ft wide, local media reported.

Eight more children are still in hospital following the incident, which took place at the private Yucai middle school in Xiangxiang city, Hunan province, at about 9.30pm last night.

The state news agency Xinhua reported that one pupil had tripped, bringing down others. But other Chinese media quoted injured students as saying that boys at the school had caused the deaths by blocking the ground floor exit. Students upstairs did not realise and continued to push their way downstairs.

The soldier who became the 100th UK fatality in Afghanistan this year has been named by the Ministry of Defence.

L/Cpl Adam Drane, 23, from Bury St Edmunds, Suffolk, of 1st Battalion The Royal Anglian Regiment was shot in Helmand province on Monday.

The US government has settled a long-running case over royalties owed to American Indians.

Under the deal the interior department will share $1.4bn (£859m) among 300,000 tribe members as compensation.

The tribes claim they have been cheated out of billions of dollars worth of natural resources since 1887.

The agreement ends a case which has been running for 13 years. The secretary of the interior department said it would aid reconciliation.

Ex-spy chief Sir John Scarlett has told the Iraq war inquiry there was "no conscious intention" to manipulate information about Iraq's weapons.

He denied being under pressure to "firm up" the September 2002 dossier which contained the claim Iraq could use WMD within 45 minutes of Saddam's order.

But he said it would have been "better" to have made clear it referred to battlefield munitions not missiles.

He was not asked about an MP's claim a taxi driver was the claim's source.

A spokesman claiming to represent al-Qaeda in the Islamic Maghreb (AQIM) has claimed responsibility for the kidnappings last month of four Europeans in Mali and Mauritania.

The claim was made in an audiotape obtained by Al Jazeera on Tuesday.

"Two units of the valiant mujahedeen managed to kidnap four Europeans in two distinct operations: the first in Mali where Frenchman Pierre Camatte was seized on November 25, and the second in Mauritania where three Spaniards were held on November 29," the spokesman, who identified himself as Saleh Abu Mohammad, said on the tape.

The Met Office has released data from 1300 weather stations around the world which show that the globe is getting warmer. We've extracted all the UK and US temperature change data for you

The UN Copenhagen climate talks are in disarray today after developing countries reacted furiously to leaked documents that show world leaders will next week be asked to sign an agreement that hands more power to rich countries and sidelines the UN's role in all future climate change negotiations.

The document is also being interpreted by developing countries as setting unequal limits on per capita carbon emissions for developed and developing countries in 2050; meaning that people in rich countries would be permitted to emit nearly twice as much under the proposals.

XMM-Newton, the most powerful X-ray observatory ever built and launched into space, marks its 10th anniversary on December 10th. XMM-Newton's observations have revolutionised the way we view the hottest and most extreme regions of the Universe.

The controversy over e-mails stolen from global-warming researchers at the Climatic Research Unit (CRU) at Britain's University of East Anglia has become so divisive that there is even disagreement over what to call it.

Skeptics of global warming, who have long considered climate change a fraud, refer to the incident as "Climategate," with obvious intimations of scandal and cover-up. Advocates of action on warming call it "Swifthack," a reference to the 2004 character attacks on presidential candidate Senator John Kerry by the group then known as Swift Boat Veterans for Truth -- in other words, an invented scandal propagated by conservatives and the media that does nothing to change the scientific case for climate change.

The claim was that Tamiflu could reduce the hospitalising of patients with swine flu by up to 60 per cent. But Channel 4 News can reveal that a key paper upon which this claim was based is being questioned. Email us your experiences of Tamiflu at news@channel4.com.

Scientists attempting to peer review the paper requested vital data, and did not get it. Tonight we report a key plank of the evidence for Tamiflu's effectiveness is being called into question.

Analysis A "world-renowned expert on carbon emissions" has stated that Western consumers must avoid five "eco crimes" committed every day in order to save the world. Dr Dave Reay's main assertion, in fact, is that we should stop washing so much - but the national press has chosen rather to highlight his assertion that drinking instant coffee is better for the environment than filter.

Dr Reay, whose PhD and early training were in marine biology, is nowadays Edinburgh university's first ever Senior Lecturer in Carbon Management. He seems as much a campaigner as a researcher, devoting much time to running his greenhouse-gas website and writing books aimed at the lay audience - Climate Change Begins at Home and Your Planet Needs You! A Kid's Guide to Going Green.

For some 300 years they have enjoyed peaceful obscurity, their atoll separated from the rest of the world by the deep blue of the South Pacific. Even the Second World War passed them by - for them, the bloody hand-to-hand fighting between American and Japanese troops on nearby Guadalcanal might as well have been taking place on another planet.

That tranquil existence is now coming to end. The 2500 or so people who inhabit the tiny chain are set to become some of the world's first refugees from man-made global warming. Early next year, some 40 families will be uprooted and evacuated from homes which are now at risk of being swamped by the rising sea.

According to by German public broadcaster WDR, the oil and gas industry has kept secret the dangerous amounts of radioactive waste produced. But experts like Harald Thielen of the Society for System and Reactor Safety acknowledge that the problem exists.

"There is radioactive waste in the pipes from the oil and gas industry," he told WDR. "This waste is partly solid and partly sludge."

The WDR report says that in Germany alone, up to 2,000 metric tons of naturally-occurring radioactive waste is sucked out of the earth every year and dumped in the surrounding countryside. By extrapolating these figures to oil production in the United States, which produces much more oil and has lower industry safety standards, up to 260,000 metric tons of radioactive waste could be produced there.

WASHINGTON -- The Environmental Protection Agency's declaration Monday that carbon dioxide and other greenhouse gas emissions endanger the public's health could deeply impact Kentucky's coal economy.

The announcement, which comes as an historic climate change conference gets under way in Copenhagen, could set the groundwork for broader cap-and-trade policies in the U.S. -- the kinds of policies the state's coal companies and most of the state's congressional delegation have long tried to block.

"What his arbitrary administrative edict would do is what Congress has refused to do statutorily -- tell coal-burning utilities how much, or little, coal can be burned," said Rep. Hal Rogers, a Republican whose district blankets coal-rich eastern Kentucky. "It could prove devastating to Kentucky's coal industry and cause havoc to our working men and women of eastern Kentucky."

Meanwhile, Kentucky environmentalists lauded the EPA's announcement as a first step toward addressing global warming and curbing pollution. "We have chosen an energy source for our electricity," said Tom FitzGerald, director of the Kentucky Resources Council. "What was an economic development edge -- the allure of cheap power -- is about to become a significant liability."

Electric cars to be exempt from company car tax for five years

One of the country's leading architectural photographers was apprehended by City of London police under terrorism laws today while photographing the 300-year old spire of Sir Christopher Wren's Christ Church for a personal project.

Grant Smith, who has 25 years experience documenting buildings by Richard Rogers and Norman Foster, was stopped by a squad of seven officers who pulled up in three cars and a riot van and searched his belongings under section 44 of the Terrorism Act, which allows police to stop and search anyone without need for suspicion in a designated area.

A Muslim woman was asked by a Christian hotelier if she was a terrorist and a murderer because she was wearing Islamic dress, a court has been told.

Ericka Tazi told Liverpool magistrates she faced a tirade of abuse from Benjamin Vogelenzang and his wife Sharon, at their hotel on Merseyside.

She said it was because she was wearing a hijab head covering and gown.

Mr and Mrs Vogelenzang deny using threatening, abusive or insulting words which were religiously aggravated.

Homeless Vietnam veteran Keith Fuller just wants to be left the hell alone.

Fuller's life was uprooted last month when the makeshift shelter he lived in for three years in the homeless enclave known as "The Hill" located above South Franklin Street was razed. The 58-year-old Marine veteran spent a couple of weeks at the Glory Hole homeless shelter before setting up his new residence at the Thane Campground on Friday.

"I don't ask for no help," Fuller said Friday. "Certainly I could go up to the V.A. and jump through their hoops again. It hurts. I don't bother no one. I keep my camp clean. I hate to be bothered by people and it's very devastating to have yourself uprooted."

Drinking coffee does not sober you up - and may actually further impair your judgement, new research suggests.

The combination of alcohol and caffeine produces a potentially lethal mix that just makes it harder to realise you are actually drunk in the first place.

One of the most interesting spam campaigns in the past week has been the "Google Jobs" scam. Its interesting from a number of angles, including how they make their money, but first let's talk about how the spammers are abusing Google, Twitter, and Microsoft to avoid being detected as spammers.

The spam messages have subjects which have a random number letter combination at the start and the end of each subject:

Malicious hackers are posing as DHL and social networking site Facebook in their latest attempts to infect computers with malware. Today we are seeing widespread spam campaigns being cannoned around the world, posing as messages from the companies.

However, files attached to the emails carry Trojan horses that can allow cybercriminals to comandeer your computer for their own purposes.

As the owner of several energy-efficient light bulbs and a recycled umbrella, I'm familiar with the critiques of "ethical consumption." In some cases, it's not clear that ostensibly green products are better for the environment. There's also the risk that these lifestyle choices will make us complacent, sapping the drive to call senators and chain ourselves to coal plants. Tweaking your shopping list, the argument goes, is at best woefully insufficient and maybe even counterproductive.

But new research by Nina Mazar and Chen-Bo Zhong at the University of Toronto levels an even graver charge: that virtuous shopping can actually lead to immoral behavior. In their study (described in a paper now in press at Psychological Science), subjects who made simulated eco-friendly purchases ended up less likely to exhibit altruism in a laboratory game and more likely to cheat and steal.

Parents are being urged to boycott shops selling pink toys and gifts by a campaign group.

Pinkstinks says the "pinkification" of little girls causes them to choose less challenging careers and pass up opportunities as they grow up.

France was in mourning today for one of its oldest and best-loved lotharios, a giant tortoise named Kiki, who died at the age of 146.

Staff at the Ménagerie du Jardin des Plantes in Paris announced that its veteran resident had succumbed last week to an infection.

They paid tribute to the zoo's "doyen", whose distinctive personality and "demonstrative lovemaking" had made him a favourite with the French public.

"We are rather upset to have lost Kiki. He had been here for such a long time ...that we had kind of thought of him as eternal," said Michel Saint Jalme, the deputy director of the Ménagerie. "He had a kind of charisma ... a certain personality."

Kiki, who arrived in the French capital as an exotic newcomer from the Seychelles in 1923, when his species was on the brink of extinction, was never slow to use that charisma to full effect.

The photo of Rupert Murdoch and his wife Wendi Deng is headlined "Rupert Murdoch and Wendi Deng said to have separated -- Deng and 100-year-old mother-in-law do not get along".

The story inside is a compilation of biographical facts about Murodch and Deng, with the meat of the marital discord allegation coming from Australian politics and media website Crikey, which recently published this bit of juice:

A Dorset town's much ridiculed fake Christmas tree has been replaced with a traditional conifer.

Some residents likened the £14,000 fake tree in Poole to a "huge traffic cone" or "a witch's hat". It was damaged by people climbing on it.

The 33ft (10m) structure had been chosen because of fears that a real one could topple over in strong winds.

The Dolphin Shopping Centre donated the real tree which was put up on Tuesday morning.

A remote-controlled dinosaur robot worth about £60,000 has been stolen from Australia's "Walking with Dinosaurs" show in Guadalajara, event organisers said on Monday.

Serbian President Boris Tadic has been fined 400 euros (£360) for toasting Serbia's qualification for the football World Cup with champagne at a stadium.

He had pleaded guilty to a misdemeanour after uncorking the bottle at Red Star Belgrade's stadium as Serbia defeated Romania 5-0 on 10 October.

Serbia's sports minister and football association chief were also fined.

The consumption or possession of alcohol is forbidden at Serbia's sports venues, in order to prevent violence.

Working for the Library of Congress in the late 1930's and 1940's, Alan Lomax archived massive collections of folk music from around the world, most famously through his work recording early American folk and blues musicians like Woody Guthrie and Lead Belly, and through his recordings of Caribbean folk music.  Alan Lomax in Haiti is a 10-disc and two book boxed set of the recordings made and collected by Lomax during his 1936-37 trek through Haiti. The recordings were made for the Library of Congress, and the set's text includes Lomax's actual writing while in the field. Check out some of said writing here.

"Threat Image Projection (TIP) - Computer software that allows fictional images of threats to be digitally displayed in the image of passengers' bags onto the x-ray monitor."