US soldier shown in Taliban video

The Taliban have released a 28-minute video showing a US soldier captured in Afghanistan last month.

In the video, the soldier, in grey clothes and with shaved head, says being a prisoner is “unnerving”.

He says the US public has the power to bring troops home to be “back where we belong and not over here, wasting our time and our lives”.

The US military identified him as the missing soldier and named him as Pte Bowe Bergdahl, 23, from Ketchum, Idaho.

The spokesman condemned the Taliban for issuing “propaganda” footage.

‘Against international law’

Pte Bergdahl, who went missing on 30 June in Paktika province, eastern Afghanistan, says in the video the date is 14 July and that he was captured as he lagged behind while on a patrol.

Please bring us home. It is America and American people who have that power Quote from video

It is not possible to verify the time and date the video was made.

Pte Bergdahl, interviewed in English, says he has “a very, very good family” in America.

“I miss them and I’m afraid that I might never see them again, and that I’ll never be able to tell them that I love them again, and I’ll never be able to hug them,” he says.

When asked about his condition he replies: “Well I’m scared, scared I won’t be able to go home. It is very unnerving to be a prisoner.”

A voice off camera asks if he has a message for his “people”.

“To my fellow Americans who have loved ones over here, who know what it’s like to miss them, you have the power to make our government bring them home,” he says.

“Please, please bring us home so that we can be back where we belong and not over here, wasting our time and our lives and our precious life that we could be using back in our own country.

“Please bring us home. It is America and American people who have that power.”

US military spokesman in Kabul, Capt Jon Stock, condemned the use of the video.

He told Reuters news agency: “The use of the soldier for propaganda purposes we view as against international law.

“We are continuing to do whatever possible to recover the soldier safe and unharmed.”

Leaflets have been distributed and a reward offered for his safe return.

The US military said the soldier disappeared after walking off base with three Afghan colleagues.

He is believed to be the first soldier seized in either Iraq or Afghanistan for at least two years.

Overcoming MS to scale Everest

Ten years after she was diagnosed with multiple sclerosis (MS), Lori Schneider decided she wanted to scale the highest peak on every continent.

She achieved this last month by making it to the summit of the world’s most famous mountain, Mount Everest.

Climbing Mt Everest is a challenge for anyone – even if they are young and in the peak of health – but the 53-year-old from Wisconsin is the first person with MS ever to reach the summit.

Ms Schneider, an avid climber, first dreamed of climbing Everest 16 years ago.

But a diagnosis of MS in 1999 was a blow for the former school teacher.

When she first got the news, her initial reaction was to run, rather than climb.

“I ran away, I was fearful of what I thought I was losing in my life,” she said.

“I didn’t want people feeling sorry for me. I was doing plenty of that for myself at that point, I was feeling like my physical life was over.”

Diagnosis

Ms Schneider first noticed something was wrong when she woke up one morning with numbness in the leg and arm on one side of her body.

I think the real hardship on Everest is maintaining a positive attitude for two months Lori Schneider

The condition progressed to the side of her face, and eventually both sides of her body.

Doctors initial thought she might have had a stroke or be suffering from brain cancer.

It took several months before she was correctly diagnosed.

After overcoming her initial fear and panic, she says the diagnosis actually empowered her to reach for her dreams.

“For 20 years I taught children: ‘Don’t be afraid, take a chance, try’, and when I was doing these climbs trying to climb the highest peak on each continent, I thought I’ll do them all but Everest, because that’s too hard for me.”

“When I got diagnosed I thought: ‘Just don’t be afraid to try, do the things in your life that maybe you dreamed about’.”

Her aspiration has not been without its costs. Following her dreams meant leaving behind a 20-year teaching career and a 22-year marriage.

Three years ago she climbed the highest peak in North America – Mount McKinley (also known by its native American name of Denali) in Alaska.

For those in the mountaineering know, it is considered the coldest mountain in the world with temperatures overnight capable of dropping to -50C.

After Everest, Asia’s highest peak, and Aconcagua, South America’s highest peak, it is the third highest of the so-called “Seven Summits”.

After coming back down she started to lose some of her vision, another symptom of MS. But that did not deter her.

To climb Everest, the cost was financial, rather than physical – she used all her savings, sold her home and took out a loan.

“I’ve been very, very fortunate the last several years. My MS has been pretty stable and quiet in my system,” she said.

“I think the real hardship on Everest is maintaining a positive attitude for two months.”

The summit

Climbers of Everest face some of the most treacherous conditions imaginable; along with battling hypothermia, there is also altitude sickness, physical exhaustion, and the isolation of being up the mountain for so long.

The Seven Summits Asia – Everest, 8848m South America – Aconcagua, 6959m North America – McKinley, 6194m Africa – Kilimanjaro, 5895m Europe – Elbrus, 5642m Antarctica – Mt Vinson, 4897m Australasia – Carstensz Pyramid, 4884m

But with the help of letters and photos of friends, family and supporters, she kept herself positive and after more than eight weeks, fighting through a blizzard, she made it to the top.

In achieving her goal, she has joined some of the world’s most accomplished climbers and bested many others.

“It was very surreal, you couldn’t see anything [because of the blizzard], so I couldn’t see the beauty that surrounded me.”

“We had to rush down so fast, but I did get a chance to give my father a call and yell: ‘I made it, I made it’.”

“It wasn’t until the next morning when I woke up in my tent after climbing for 17 hours the day before, and then all of the sudden I thought: ‘Oh my gosh, I just climbed Mt Everest yesterday!’.”

But she says making it to the summit is just a bonus.

The real achievement, she says, is that in coming to terms with MS and the possibility that she may one day lose her mobility, she has been able to face down her fears.

“Who you are inside… that’s what’s important. That will always be there,” she said.

“Whether my legs carry me up a mountain or not, I’m still who I am deep inside.”

New Honduran leader sets curfew

Interim President Roberto Micheletti has imposed an overnight curfew in Honduras, hours after being sworn in.

The Congress speaker took office after troops ousted elected leader Manuel Zelaya and flew him to Costa Rica.

The removal of Mr Zelaya came amid a power struggle over his plans for constitutional change.

Mr Zelaya, who had been in power since 2006, wanted to hold a referendum that could have led to an extension of his non-renewable four-year term.

Polls for the referendum had been due to open early on Sunday – but troops instead took him from the presidential palace and flew him out of the country.

Roberto Micheletti will govern until elections are held, Congress said.

The ousting of Manuel Zelaya has been criticised by regional neighbours, the US and the United Nations.

In the Honduran capital, Tegucigalpa, groups of Zelaya supporters were said to have set up barricades, while troops were at key sites.

Mr Micheletti told a press conference that a nationwide curfew was being imposed for Sunday and Monday, running from 2100 (0300 GMT) to 0600 (1200 GMT) on each night.

Days of tension

The swearing in of Roberto Micheletti – constitutionally second in line for the presidency – was greeted with applause in Congress.

This was a plot by a very voracious elite, which wants to keep this country in an extreme level of poverty President Manuel Zelaya

In a speech, he said that he had not assumed power “under the ignominy of a coup d’etat”.

The army had complied with the constitution, he said, and he had reached the presidency “as the result of an absolutely legal transition process”.

Congress said he would serve until 27 January, when Mr Zelaya’s term was due to expire. Presidential elections are planned for 29 November and Mr Micheletti promised these would go ahead.

Both Congress and the courts had opposed Mr Zelaya’s referendum, which asked Hondurans to endorse a vote on unspecified constitutional changes alongside the November elections.

Tensions over the issue had been escalating for several days, with the army refusing to help with preparations for the referendum.

Just before dawn on Sunday, troops stormed the president’s residence. There was confusion over his whereabouts for several hours before he turned up in Costa Rica.

Mr Zelaya called his ouster “a plot by a very voracious elite, an elite which wants only to keep this country isolated, in an extreme level of poverty”.

He urged Hondurans to resist those who had removed him and late on Sunday flew to Nicaragua for a meeting of regional leaders.

Congress said it had voted to remove him because of his “repeated violations of the constitution and the law and disregard of orders and judgments of the institutions”.

In Tegucigalpa, groups of Zelaya supporters were setting up roadblocks around the presidential palace, Reuters said.

One man told the news that he had been in the city’s main square all day, along with 2,000 Zelaya supporters. Jeronimo Pastor described the situation as tense and called on the international community to get involved.

But another resident of the capital said people were relieved at Mr Zelaya’s removal. “Now we have a new president and will have elections and things will go back to normal,” Kenneth Bustillo told the news.

The removal of Mr Zelaya has drawn criticism across Latin America and the wide world.

The Organization of American States held an emergency meeting, while UN Secretary General Ban Ki-moon called for “the reinstatement of the democratically elected representatives of the country”.

US President Barack Obama urged Honduras to “respect the rule of law” and a State Department official said America recognised Mr Zelaya as the duly elected president. The European Union called for “a swift return to constitutional normality”.

Venezuelan President Hugo Chavez, meanwhile, blamed “the Yankee empire”, and threatened military action should the Venezuelan ambassador to Honduras be attacked.

UN chief demands Gaza ceasefire

UN Secretary General Ban Ki-moon has called for an immediate end to fighting in the Gaza Strip during a meeting of the UN Security Council in New York.

The US and Palestinian Authority President Mahmoud Abbas have backed a French-Egyptian ceasefire proposal.

Israel says it has agreed to set up a humanitarian corridor to allow aid into the Gaza Strip.

On the ground in Gaza, explosions were heard through the night. Israel says it carried out more than 30 air strikes.

Mr Ban criticised both Israel for its bombardment of Gaza and Hamas for firing rockets into Israel and urged Security Council members in New York to act “swiftly and decisively to put this crisis to an end”.

“We need urgently to achieve Palestinian unity and the reunification of Gaza with the West Bank within the framework of the legitimate Palestinian Authority,” he added.

More than 600 Palestinians are now believed to have been killed since Israel began its offensive 11 days ago. Palestinian health ministry officials say at least 195 children are among those killed.

An Israeli attack on Tuesday on a school building, which Israel says was sheltering militants, left at least 30 people dead and 55 injured, UN officials say.

Israel, which has vowed to reduce rocket attacks from Gaza on its territory, has lost seven soldiers on the ground. Four people within Israel have been killed by rockets.

In another development, Venezuela ordered the expulsion of Israel’s ambassador in protest at the Gaza offensive and its “flagrant violations of international law”.

Support for truce

The ceasefire plan proposed jointly by Egyptian President Hosni Mubarak and French President Nicolas Sarkozy would bring together all the main parties and take all measures to end the conflict in Gaza.

The plan envisages the resumption of the delivery of aid to Gaza and talks with Israel on border security, a key issue for Israel as it says Hamas smuggles its rockets into Gaza via the Egyptian border.

Welcoming the proposal, US Secretary of State Condoleezza Rice called for a “ceasefire that can endure and that can bring real security”.

The contours of a possible diplomatic agreement are in place, the BBC’s Laura Trevelyan reports from the UN.

GAZA CRISIS BACKGROUND

However, if Israel continues to control the flow of humanitarian aid into Gaza and can choose to stop it at any time this seems unlikely to command the support of Hamas, she notes.

Thus frenetic diplomacy in New York and in the Middle East is likely to continue.

Israel’s ambassador to the UN, Gabriela Shalev, did not say whether Israel would accept the proposal but said it would take it “very, very seriously”.

Israel has proposed suspending attacks in specified parts of Gaza to allow people to stock up on essential goods.

The military will open up “areas for limited periods of time, during which the population will be able to receive the aid”, the office of Israeli Prime Minister Ehud Olmert has said.

Andrew Whitley of the UN relief agency told the BBC that any relief in the conditions of the people of Gaza could only be a good thing:

“People have been weakened by 18 months of blockade and siege. They’ve been getting very little food, electricity or heat for a long time, and so they are in a very weakened condition.”

School carnage

UN officials have said that the al-Fakhura school in the Jabaliya refugee camp was being used as a refuge for hundreds of people when it was hit by Israeli shell-fire.

The Israeli military said its soldiers had come under mortar fire from Hamas militants inside the school. A spokesman for Hamas denied there had been any hostile fire coming from the school.

In all, at least 70 Palestinians and five Israeli soldiers were killed on Tuesday.

Israel says its offensive is stopping militants firing rockets but at least five hit southern Israel on Tuesday, injuring a baby.

Casualty claims in Gaza cannot be independently verified. Israel is refusing to let international journalists into Gaza, despite a supreme court ruling to allow a limited number of reporters to enter the territory.

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Libya compensates terror victims

Most of those killed in the Lockerbie bombing were Americans

Libya has paid $1.5bn into a US compensation fund for relatives of victims of terror attacks blamed on Tripoli, the US state department says.

The fund was agreed in August to settle remaining lawsuits in the US.

The attacks include the 1988 Lockerbie bombing that killed 270 people and the 1986 bombing of a Berlin disco which killed three and wounded more than 200.

Under the deal, Libya did not accept responsibility for the attacks, but agreed to compensate victims.

It is the final step in a long diplomatic process, which has seen Libya come back into the international fold.

US contribution

The first $300m Libyan payment into the fund was made on 9 October, shortly after an historic visit to Tripoli by US Secretary of State Condoleezza Rice.

Its second payment of $600m was received on Thursday and a final installment of $600m was made on Friday, said David Welch, the US diplomat who negotiated the settlement.

In exchange, President Bush has signed an executive order restoring the Libyan government’s immunity from terror-related lawsuits and dismissing pending compensation cases in the US, the White House said.

The US and Libya agreed to the compensation deal in August

Our correspondent says it is unclear why it took so long for the money to be paid into the fund.

She adds that there may have been contributions by American companies lured by business opportunities in Tripoli and keen to expedite the process of normalising ties.

The US State Department, however, has insisted that no money from the American taxpayer will be used for the US portion of the fund.

Libya has already paid the families of Lockerbie victims $8m (£4m) each, but it owes them $2m more.

The fund will also be used to compensate relatives of seven Americans who died in the bombing of a French UTA airliner over Chad in 1989.

In 2004, Libya agreed to pay $35m in compensation to non-US victims of the 1986 Berlin bombing.

In the same year, relatives of non-US victims of the UTA bombing accepted a payment of $1m each from the Gaddafi International Foundation for Charity Associations.

Relations between Libya and the US improved in 2003 when Tripoli stopped working on weapons of mass destruction.

The decision led to the restoration of US diplomatic ties with Libya in 2006.

In turn, it was removed from America’s list of countries sponsoring terrorism.

US markets wary over rescue deal

The markets remain nervous

US shares have fallen sharply with investors cautious over whether the House of Representatives will back the revised bank rescue plan.

The House is due to discuss the scheme later, with a vote expected on Friday. The bill successfully passed through the US Senate on Wednesday.

On Wall Street, the Dow Jones index was down 263 points or 2.4% at 10,571, a slide dragging European shares lower.

The falls came as France said it would host a summit on the financial crisis.

The UK’s FTSE 100 closed was down 1.8% to 4,870.3 points while Germany’s Dax index shed 2.5% and France’s Cac 40 lost 2.3%.

Sentiment was further hit by glum economic data – showing that the number of people filing for new unemployment benefit claims rose to a seven-year high, while factory orders had seen a steeper-than-expected drop in August.

European talks

The office of French President Nicolas Sarkozy said the special meeting on Saturday would discuss a co-ordinated response to the financial turmoil amongst European members of the G8 ahead of a meeting of world finance leaders in Washington next week.

UK Prime Minister Gordon Brown is due to attend, together with German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi and European Central Bank President Jean-Claude Trichet.

Investors are still concerned about the efficiency of this rescue plan and how it can help the global economy Aric Au, Phillip Securities

But with just two days to go before the talks start, EU members are deeply divided, correspondent said.

France and Holland favor a European response to help banks hit by the credit crisis while Germany and Luxembourg believe a joint rescue plan is not necessary.

European leaders have denied speculation that they wanted to establish a unified 300bn euro ($418.4bn; £236bn) banking rescue deal along the same lines as the US plan.

The rescue idea was said to be being proposed by France, but Mr Sarkozy insisted that there were no such plans.

“I deny both the amount and the principle [of such a plan],” he said.

‘Essential’

In the US, a number of changes had to be made to the $700bn (£380bn) bail-out plan in order to help win approval in the Senate.

These include raising the government’s guarantee on savings from $100,000 to $250,000, tax breaks to help small businesses, expansion of child tax credit, and help for victims of recent hurricanes.

President George W Bush said that the package was “essential to the financial security of every American”.

However, economists said doubts remained about how effective the package would be.

“Investors are still concerned about the efficiency of this rescue plan and how it can help the global economy,” said Aric Au of Phillip Securities in Hong Kong.

McCain and Obama

US presidential hopefuls John McCain and Barack Obama, who both returned from the campaign trail for last night’s Senate debate, voted in favor of the rescue plan.

Senate majority leader Harry Reid, a Democrat, said he was happy with the result and praised both presidential candidates for voting.

“I think it shows that when we work together we can accomplish good things,” he said.

Mitch McConnell, leader of Republican senators, was also in jubilant mood.

“This was a measure that was much needed, to unfreeze the credit markets and get America’s economy working again,” he said.

McCain and Obama spar in first debate

McCain and Obama spar in first debate

US presidential rivals Republican John McCain and Democrat Barack Obama have attacked each other over foreign policy and the economy, in their first debate.

Mr Obama said a $700bn (£380bn) plan to rescue the US economy was the “final verdict” on years of Republican rule.

He said Mr McCain had been “wrong” on Iraq and tried to link him to President Bush. The Republican senator described his rival as too inexperienced to lead.

Neither landed a knockout blow but polls suggested Mr Obama did better.

An immediate telephone poll by CNN and Opinion Research Corp found 51% said Mr Obama had won, to 38% for Mr McCain.

A poll of uncommitted voters by CBS News found that 39% gave Mr Obama victory, 25% thought John McCain had won, and 36% thought it was a draw.

Both campaigns claimed victory, with Mr McCain’s team saying their candidate had shown a “mastery on national security issues” while Mr Obama’s aides said he had passed the commander-in-chief test “with flying colours”.
All things considered, it’s about a draw
Matthew Yglesias, Think Progress

First presidential debate scorecard
Analysis: McCain wins on points
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Tens of millions of Americans were expected to watch the debate on TV, with only about five weeks to go before the 4 November elections.

Senator McCain said he did not need “any on-the-job training”.

“I’m ready to go at it right now,” he added.

But Senator Obama said Mr McCain had been “wrong” about invading Iraq and that the war had led the US to take its eye off the ball in Afghanistan, where it should have been pursuing al-Qaeda.

Mr McCain argued that as a result of the “surge” – which involved sending some 30,000 extra US troops to Iraq – US military strategy was succeeding.

“We are winning in Iraq and we will come home with victory and with honour,” he said.

The televised debate in Oxford, Mississippi, focused largely on foreign policy but began with discussion of the economic crisis gripping the US.

Speaking about the financial bail-out plan under discussion by the US Congress, Mr Obama said: “We have to move swiftly and we have to move wisely.”
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Mr McCain said he believed it would be a long time before the situation was resolved.

“This isn’t the beginning of the end of this crisis,” he said. “This is the end of the beginning if we come out with a package that will keep these institutions stable and we’ve got a lot of work to do.”

Mr McCain attacked Mr Obama over his record on finance, saying he had asked for millions of dollars in so-called “earmarks” – money for pet projects – as an Illinois senator.

The Republican also suggested a spending freeze in many areas apart from defence, but Mr Obama likened the proposal to using a hatchet when a scalpel was needed.

Both candidates agreed that the bail-out plan would put massive pressure on the budget of the next president and mean cuts in government spending.

‘Serious threat’

Asked about Iran, Mr McCain stressed that Tehran was a threat to the region and, through its interference in Iraq, to US troops deployed there.

He outlined a proposal for a “league of democracies” to push through painful sanctions against Tehran that were presently being blocked in bodies like the United Nations because of opposition from Russia.

He criticised Mr Obama for his previously stated willingness to hold talks with the leaders of Iran without preconditions.

Mr Obama rejected that criticism, saying he would reserve the right as president “to meet with anybody at a time and place of my choosing if I think it’s going to keep America safe”.

However, he said he agreed with his Republican rival that “we cannot tolerate a nuclear Iran” and the threat that that would pose to Israel, a staunch US ally.

‘Safer today’

Mr McCain accused Mr Obama of “a little bit of naivete” in his initial response to the conflict between Georgia and Russia.

“Russia has now become a nation fuelled by petro-dollars that has basically become a KGB [former secret services name] apparatchik-run government. I looked in [Russian Prime Minister Vladimir] Mr Putin’s eyes and I saw three letters – a K, a G and B,” McCain said.

Speaking about the so-called war on terror, Mr McCain said he believed the nation was safer than it had been the day after the 11 September 2001 terror attacks but there was still a long way to go.

Mr Obama pointed to the spread of al-Qaeda to some 60 countries and said that the US had to do more to combat that, including improving its own image as a “beacon of light” on rights.

“One of the things I intend to do as president is restore America’s standing in the world,” Mr Obama said.

Mr McCain sought to distance himself from President George W Bush’s administration, which has very low public approval ratings.

“I have opposed the president on spending, on climate change, on torture of prisoners, on Guantanamo Bay, on the way that the Iraq war was conducted,” he said.

“I have a long record and the American people know me very well… a maverick of the Senate.”

Mr McCain had earlier vowed not to attend the forum in Mississippi until Congress approved the economic bail-out plan, but he reversed his decision after some progress was made towards a deal.

Pakistan fires on Nato aircraft

US action across the Pakistan border has raised tensions Pakistan says its troops fired warning shots at two Nato helicopters as they crossed the border from Afghanistan. It is the first time the Pakistan army has admitted opening fire near US or Nato forces, as tension grows over cross border military action. Nato said its aircraft were not in Pakistani airspace when shots were fired over Khost province. The Pentagon said they were US helicopters and that Pakistan would have to explain what had happened. Chief Pakistani military spokesman Major General Athar Abbas said that the helicopters had “crossed into our territory in Ghulam Khan area”. “They passed over our checkpost so our troops fired warning shots,” he said. He added that the matter was being taken up with the Nato-led International Security Assistance Force (Isaf) in Kabul. ‘Flares’ fired However, Pakistan’s new president, Asif Ali Zardari, appeared to contradict his military spokesman, insisting that his troops had only fired “flares” to warn the helicopters they were near the Pakistan border. The BBC’s Syed Shoaib Hasan, in Islamabad, says that the border between Afghanistan and Pakistan is very unclear. There is an imaginary border called the Durand line which each side marks differently. Our correspondent says that, in reality, the border is marked by a 3-4km (1-2 mile) stretch of no man’s land. Pakistan says that this is its territory and Afghanistan makes similar claims. In a statement, Isaf said its helicopters had received small-arms fire from a Pakistan military checkpoint along the border near Tanai district, Khost, on 25 September “while conducting routine operations in Afghanistan”. “At no time did Isaf helicopters cross into Pakistani airspace,” it added. Pentagon spokesman Bryan Whitman said: “The flight path of the helicopters at no point took them over Pakistan.” He said US and Nato officials were speaking to their Pakistani counterparts to determine what had happened and to ensure there was no recurrence. “The Pakistanis have to provide us with a better understanding of why this took place,” he said. Local tribesmen in the area told the BBC that two helicopters were trying to cross into Pakistani territory near Ghulam Khan, in North Waziristan, when Pakistani troops at posts near the border fired at them. There are currently two Western military operations in Afghanistan – a US-led coalition and the Nato-led Isaf mission. It appears the helicopters involved in Thursday’s incident were US OH-58 reconnaissance aircraft operating under the Nato flag. The BBC’s Martin Patience, in Kabul, says it is believed to be the first time Nato helicopters have been fired on in this fashion. BORDER TENSIONS 3 Sept: First reported ground assault by US troops in Pakistan – Islamabad responds furiously 15 Sept: Pakistani troops reportedly fire in air to stop US troops crossing in S Waziristan 17 Sept: Top US military chief Adm Mike Mullen visits Pakistan to calm tensions 16 Sept: Pakistan says it was not told of fresh US missile strike 22 Sept: Pakistani troops in fresh firing to deter US incursion into N Waziristan, officials say 25 Sept: Pakistani troops fire warning shots at Nato helicopters on border with Khost Correspondents say there is growing anger in Pakistan at US forces in Afghanistan allegedly violating Pakistani sovereignty. The remote Afghan-Pakistani frontier is rife with militant groups. BBC defence correspondent Rob Watson says the US doubts Pakistan’s capability – and even willingness in some quarters – to tackle Islamic extremists. There has been growing tension between the two countries since 3 September when the US conducted its first ground assault in Pakistani territory on what it said was a militant target in South Waziristan. Pakistan reacted angrily to the action, saying 20 innocent villagers had been killed by US troops. Local officials have said that on two occasions since then Pakistani troops or tribesmen have opened fire to stop US forces crossing the border. The claims were not officially confirmed. On Wednesday, a drone believed to be operated by the CIA crashed inside Pakistan. The US and Nato have called on Pakistan to do more to curb militants operating in the border area.

Becalmed Baghdad counts war’s cost

There have been dozens of bombings in the Karrada district of Baghdad. But there is one date Ali Hameed will never forget – 26 July 2007.

We have a bright future in Iraq. The cloud that was hanging over all of us has passed Ali Hameed

At six pm, a massive truck bomb exploded near his fish shop. Five members of his family were killed.

“We thought it was an earthquake because of the power of the explosion,” he told me.

Ali spent several minutes helping the wounded in the street. Only later did he realise that his home nearby had been destroyed. The whole apartment block was flattened.

In total, more than 60 people were killed. Ali pulled the bodies of his daughter and his brother from the rubble.

But, despite everything that happened to his family, he does not come across as angry or full of hate.

“The situation now is getting better,” he tells me.

“Life is gradually coming back to normal for us. People have started to question the purpose of fighting.

“We have a bright future in Iraq. The cloud that was hanging over all of us has passed.”

The smell of grilled fish wafts out onto the road. It is full of people buying groceries, sitting in cafes, and standing around chatting.

There is a sudden bang and I instinctively flinch. But it is just a car backfiring. The locals do not even notice.

Future anguish

Across Baghdad, people are starting to feel more confident. There are still bombings and shootings almost every day. But there is no longer the constant fear.

Many of the children who have experienced trauma become very violent…. It will be a very violent generation Dr Haider Maliki

The drop in violence has allowed many to think more about its effects. One recent study found that 70% of children exposed to trauma in Iraq go on to develop psychological problems.

At a park in central Baghdad, two orphans are playing.

Salah is nine years old. He was found by the police after a bomb went off. Nobody knows what happened to his family.

Saif is seven. His parents were killed in an explosion.

“I want to tell them [the bombers] it’s against God’s law to kill people,” he tells me. “I want to ask them: why did you kill my mother and father.”

He says he wants to be a policeman when he grows up, so that he can find his parents’ killers and send them to prison.

Salah barely talks at all. His shaking hands tell their own story.

Dr Haider Maliki deals with many similar cases at Baghdad’s only child psychiatric ward. Flowers hang from the ceiling and the walls are brightly painted. They have tried to make it as friendly as possible for the children.

Dr Maliki thinks problems are being stored up for the future.

“Many of the children who have experienced trauma become very violent,” he says. “They are violent towards their parents and they have no respect for their teachers. It will be a very violent generation.”

Letting off steam

On the other side of the city, there is a very different scene. We watch as the stunt bikers of Baghdad take to the streets.

Bike enthusiasts make the most of a relatively safer Baghdad

At dusk, more than a hundred people gather on motorbikes. It is an anarchic sight as they race around performing skids, jumps and wheelies for the crowd.

The police keep moving them on, but they always find another venue for their impromptu displays.

The young men are ecstatic – almost intoxicated by the mix of testosterone and petrol fumes.

At one point, the bikers are joined by a man driving a minibus who skids his vehicle wildly around the empty car park.

After all the violence of recent years, young people in Baghdad clearly need to let off a lot of steam.

Investors cautious amid turmoil

Asian share prices have continued to fall as confidence remains low

European stocks rise in cautious trade as Lloyds TSB’s takeover of UK lender HBOS dispelled some of the gloom hanging over financial markets.

Asian shares had earlier fallen sharply on fears that more companies could fall victim to the global financial crisis.

London’s FTSE 100 index was up 0.8% at 4,951 points shortly after the open and France’s main stock index rose 0.6%.

In Asia, Tokyo’s Nikkei share index dropped by 2% while Hong Kong’s main stock index slid by 7%.

Share indexes in Shanghai, Taiwan and India fell by between 3 and 5%.

Hong Kong’s Hang Seng index dropped below the 17,000 mark and Australian shares closed 4% lower.

On Wednesday, the Dow Jones index of leading US stocks fell by more than 4%.

Flight to safety

Brokers in Japan say the markets are in freefall because investors fear the US government’s efforts to stop the turmoil in the financial system are not working.

As a result, investors are looking for safer places to put their money than stocks and shares.

Traders saw plummeting shares on Wall Street on Wednesday

Many Japanese institutions have assets insured by AIG, the insurance company that was rescued by the US government on Tuesday.

And in Singapore, for the second day running, hundreds of AIG policyholders queued up outside its offices trying to surrender or cancel policies they fear could turn out to be worthless.

Feverish speculation

The US Federal Reserve’s AIG rescue package followed the collapse earlier this week of 150-year-old US investment bank Lehman Brothers, which sent shockwaves through the world’s financial community and sparked a global share price plummet.

Another investment bank, Merrill Lynch, has since been sold off to Bank of America. And in the UK, HBOS is being taken over by Lloyds TSB in a £12.2bn deal.

There has also been feverish speculation about the future of two other leading US banks – Morgan Stanley and Washington Mutual.

The New York Times quoted unnamed sources as saying an auction for Washington Mutual was under way. The Wall Street Journal reported that both banking giant Citigroup and Wells Fargo had expressed an interest in a takeover.

Meanwhile the Reuters news agency reported that Morgan Stanley, the second largest US investment bank in the US which on Wednesday saw a quarter of its value wiped off its share price, had held preliminary takeover talks with Wachovia.

None of the companies involved has made any comment on the speculation and no negotiations can be confirmed.

Banks take action

The Bank of Japan has injected another 1.5 trillion yen ($14.4bn; £7.9bn) into money markets to help stabilise them. Australia took similar steps.

The Japanese central bank’s injection was the third consecutive day it had tried to shore up cash markets as the Nikkei trades at a three-year low.

Across Asia, central banks have already pumped $33bn into money markets this week in an attempt to allay investors’ concerns and ensure the supply of funds does not dry up.