Honduran crisis talks break down

Mr Zelaya’s supporters say he remains the rightful leader of Honduras

Honduras’s interim government has rejected a proposal to solve the country’s political crisis, in effect ending talks with the ousted president.

The delegation’s head said Costa Rica’s proposal, which would see Manuel Zelaya return as leader of a unity government, was “absolutely unacceptable”.

Mr Zelaya’s representatives said they would no longer negotiate with the interim leaders’ current delegation.

Mediators have asked both sides to resume talks in three days.

“It was not possible to reach a satisfactory agreement,” said President Oscar Arias of Costa Rica, who is leading mediations and has presented both parties with a seven-point proposal.

“The Zelaya delegation fully accepted my proposal, but not that of Don Roberto Micheletti.”

Their take on power is based on terror and force instead of peace and reason Manuel Zelaya

Mr Arias has warned of possible civil war if the talks fail and urged both sides to continue.

“My conscience tells me that I cannot give up and must continue working for at least three more days and that is what I propose to do,” he said.

Mr Zelaya, who is currently in Nicaragua, said one “must never close the door on actions of good faith” but that he doubted the mediators could achieve much.

“I do not think that efforts with coup-mongers, just as with terrorists and kidnappers, will work,” he told Reuters news agency.

“Their take on power is based on terror and force instead of peace and reason.”

He later said his supporters were “organising internal resistance” in preparation for this return to the country, which he indicated could happen at the weekend.

Mr Zelaya called on the international community to act in his support and to “back us in restoring democratic order”.

The US, which has supported Mr Zelaya, urged the political rivals to reflect on the “significant progress” made at the talks and to “commit themselves to their successful conclusion”.

State Department spokesman Robert Wood said the Organisation of American States (OAS) and other interested parties “underscore their commitment to the peaceful resolution of political disputes through dialogue”.

‘Dialogue over’

Mr Arias has warned of possible civil war if the situation is not resolved

“I’m very sorry, but the proposals that you have presented are unacceptable to the constitutional government of Honduras,” said Carlos Lopez, the head of the interim government, led by Roberto Micheletti.

He said Mr Micheletti’s side objected in particular to the first point of Mr Arias’s plan, which proposes “the legitimate restitution” of Mr Zelaya as the head of a reconciliation government until early elections are held in October.

Mr Arias also proposed an amnesty for political crimes committed before and after the 28 June coup.

Mr Zelaya’s representatives had previously said they accepted the proposal for reinstating the deposed leader and were “willing to discuss all the other points”.

But following Sunday’s statement from the interim government, the delegation said the talks were effectively over, although it had not ruled out future talks with the coup leaders.

“This dialogue with this commission of the de facto, military coup government is finished,” said Rixi Moncada, one of Mr Zelaya’s representatives.

Mr Zelaya was forced into exile on 28 June. The interim government has said he will be arrested if he comes back.

It prevented an earlier attempted homecoming on 5 July.

On Sunday, Mr Zelaya said it was his right as a Honduran to return to the country and “absolutely no-one” would stop him, Reuters reported.

He later suggested he would return at the weekend, saying by then his supporters would have “all the necessary activities” in place, “as laid out in the law and the constitution and international mandates,” the agency quoted him as saying.

It would not be hard for Mr Zelaya to cross the long and mountainous border between Nicaragua and Honduras, but there is great concern that it will lead to bloodshed if he does.

Mr Arias said he was concerned that a “good part” of the Honduran population own firearms.

“What happens if one of those arms shoots a soldier? Or if a soldier shoots an armed civilian?

“There could be a civil war and bloodshed that the Honduran people do not deserve,” he said.

‘No return’

Mr Zelaya said it was his right to return to Honduras

Speaking to the EXPRESS in Nicaragua on Saturday, Mr Zelaya said he would not agree to anything that gave concessions to the people who ousted him from office.

Arturo Corrales, representing Mr Micheletti, had accused Mr Zelaya of bad faith.

He said Mr Zelaya’s insistence on forming a unity government went against the spirit of the talks and showed “a wish in Honduras to keep violating our constitution and our laws”.

The negotiations in Costa Rica have benefitted the interim government by buying it time, and also because it has been treated with an equal status to the elected leaders, says our correspondent.

Mr Micheletti heads a military-backed government, which ousted Mr Zelaya amid a dispute with Congress and the courts.

Mr Zelaya had planned to hold a non-binding public consultation to ask people whether they supported moves to change the constitution.

His critics said the move was unconstitutional and aimed to remove the current one-term limit on serving as president and pave the way for his possible re-election.

US firm averts French explosion

A threat to blow up another French factory has not been defused

A US construction equipment firm has agreed to pay extra compensation to French workers who had threatened to explode gas canisters at their plant.

Staff at JLG Industries in Tonneins, south-western France, made the threat in order to get better redundancy terms for 53 workers.

It is the third such incident in which workers have threatened violence against employers.

Elsewhere, French workers have taken managers hostage in “boss-nappings”.

The French Employment Minister, Laurent Wauquiez, described the tactics as “blackmail”.

In the JLG deal, the 53 affected workers were each guaranteed 30,000 euros (£26,000; $42,000) in severance pay.

JLG Industries is a subsidiary of the US company Oshkosh, which makes cranes and work platforms.

Meanwhile, a tense stand-off continues at the bankrupt New Fabris car plant in Chatellerault, south-west of Paris, where workers have also made a threat to blow up the factory.

They have given a 31 July deadline for Renault and Peugeot, which provided 90% of the plant’s work, to pay them 30,000 euros each.

Renault and PSA Peugeot said it was not their responsibility to pay workers.

The BBC’s Emma Jane Kirby in Paris says there is an acute sense of injustice in France at the moment, with many workers complaining that while their bosses continue to reap company benefits and bonuses, they are paying for this economic crisis with their jobs.

Price of habit chokes US smoker

Josh Muszynski: ‘I thought someone had bought Europe’

A man in the United States popped out to his local petrol station to buy a pack of cigarettes – only to find his card charged $23,148,855,308,184,500.

That is $23 quadrillion (£14 quadrillion) – many times the US national debt.

“I thought somebody had bought Europe with my credit card,” said Josh Muszynski, from New Hampshire.

He says his appeals to his bank first met with little understanding, though it eventually corrected the error.

It also waived the usual $15 overdraft fee.

“It was all back to normal,” Mr Muszynski told his local television station, WMUR. “They reversed the negative balance fee, which was nice.”

Debt crisis

His nightmare began when he checked his online bank account a few hours after buying the cigarettes.

He thought he would be a couple of hundred dollars in the black. But his overdraft had pushed him into the red – by an amount equivalent to many times the entire US national debt.

“It is a lot of money in the negative,” he said. “Something I could never, ever, afford to pay back.

The 17-digit amount on his online bill shocked Mr Muszynski

“My children could not afford it, grandchildren, nothing like that.”

In panic, Mr Muszynski rushed back to the petrol station, but they were unable to help. He says he then spent two hours on the phone with the Bank of America.

Eventually, it assured him it would be fixed – and the next morning, it had been.

But no-one has yet explained to Mr Muszynski how such a astonishing error could have been made.

Biden appeals to G20 protesters

Joe Biden (right) asked protesters to give G20 leaders a fair hearing

US Vice-President Joe Biden has called for G20 protesters to give governments a chance to tackle the economic crisis.

At a G20 warm-up meeting in Chile, Mr Biden said heads of state would agree proposals to remedy the crisis at next week’s meeting in London.

As they spoke, tens of thousands of protesters marched in the UK capital and in Germany, France and Italy.

US billionaire George Soros told the news the G20 meeting was “make or break” for the world economy.

“Unless they do something for developing world there will be serious collapse in that part of the world,” Mr Soros said.

Massive security operation

At a news conference in Vina del Mar, Mr Biden said he hoped the protesters would give the politicians a chance.

“Hopefully we can make it clear to them that we’re going to walk away from this G20 meeting with some concrete proposals,” he said.

British Prime Minister Gordon Brown said he understood why people were demonstrating in the UK.

“We will respond to [the protest] at the G20 with measures that will help create jobs, stimulate business and get the economy moving,” he said.

But Brazil’s President Luiz Inacio Lula da Silva told the Chile meeting that everyone was suffering from the recklessness of those who had turned the world economy into “a gigantic casino”.

“We are rejecting blind faith in the markets,” he said.

In London on Saturday, demonstrators demanding action on poverty, jobs and climate change called on G20 leaders to pursue a new kind of global justice.

Police estimated 35,000 marchers took part in the event.

A series of rallies are planned for Wednesday and Thursday by a variety of coalitions and groups campaigning on a range of issues from poverty, inequality and jobs, to war, climate change and capitalism.

There have been reports that banks and other financial institutions could be targeted in violent protests.

British officials have put a huge security operation in place.

‘We won’t pay’

Before the London summit, Mr Brown has been visiting a number of countries trying to rally support for his economic plans.

In Chile on Friday he said people should not be “cynical” about what could be achieved at the summit, saying he was optimistic about the likely outcome.

But in an interview, German Chancellor Angela Merkel dampened expectations of a significant breakthrough.

She said one meeting would not be enough to solve the economic crisis and finish building a new structure for global markets.

In Berlin, thousands of protesters took to the streets on Saturday with a message to the G20 leaders: “We won’t pay for your crisis.”

Another march took place in the city of Frankfurt. The demonstrations attracted as many as 20,000 people.

In the Italian capital, Rome, several thousand protesters took to the streets.

In Paris, around 400 demonstrators dumped sand outside the stock exchange to mock supposed island tax havens.

Gaza air campaign ‘a first stage’

Israel’s air assault on Gaza is “the first in several stages” of operations aimed at ending militant rocket fire, Prime Minister Ehud Olmert has said.

As bombing continued for a fourth day, another top official said Israel was ready for “long weeks of action”.

Palestinian officials say more than 360 people have been killed since Saturday. Four Israelis have died in rocket fire.

As EU officials prepared to discuss the crisis, some reports from Israel said it was considering a temporary truce.

Mr Olmert was set to discuss the idea of a 48-hour suspension, suggested by France, with his officials later in the day, the French news agency AFP said.

But Infrastructure Minister Benjamin Ben-Eliezer warned a truce would allow militant group Hamas – which controls Gaza – “to regain strength… and prepare an even stronger attack against Israel”.

US President Bush agreed in a telephone conversation with Palestinian President Mahmoud Abbas that for any ceasefire to be effective it had to respected by Hamas, the White House said.

A BBC reporter says Israeli tanks and troops are massed along Gaza’s border.

Correspondents say this could be a prelude to ground operations, but could also be intended to build pressure on Hamas.

European Union foreign policy chief Javier Solana called for an immediate ceasefire and the opening of crossings to allow humanitarian aid into Gaza, as EU foreign ministers prepared to discuss the crisis in Paris.

‘Defenseless population’

On Tuesday, Israeli jets attacked more targets linked to Hamas, hitting a number of government buildings and security installations.

At least 10 people were killed and 40 said to have been wounded in the raids.

One air strike killed two sisters, the eldest aged 11, riding in a donkey cart in Beit Hanoun, northern Gaza, Palestinian medical sources said.

The UN has called for an investigation into the attacks, which are causing heavy civilian casualties. It says at least 62 of the Palestinians killed so far were women and children.

Richard Falk – the UN special rapporteur for human rights in the Palestinian territories – said the international community must put more pressure on Israel to end its assault.

“Israel is committing a shocking series of atrocities by using modern weaponry against a defenceless population – attacking a population that has been enduring a severe blockade for many months,” Mr Falk said in a BBC interview.

But Israeli officials said there was more to come.

The Israeli military “has made preparations for long weeks of action”, deputy defence minister Matan Vilnai said.

Mr Olmert’s statement that the bombardment was “the first of several stages approved by the security cabinet” was quoted from a briefing he gave to President Shimon Peres on Tuesday.

Separately, Israeli naval vessels confronted pro-Palestinian activists seeking to break the Gaza blockade by boat. The activists said one vessel rammed them; their boat made port in Lebanon with heavy damage on one side.

Rocket fire

The Egyptian-Gaza border was due to be opened to permit more trucks carrying aid to enter the territory, and for wounded Palestinians to be transported to Egyptian hospitals.

Egyptian President Hosni Mubarak, under popular pressure to open the crossing fully, said that could not happen while Hamas, rather than the Palestinian Authority, led by its rival Fatah, controlled the border.

Demonstrators in Yemen, angered by Egypt’s co-operation with the blockade on Gaza, briefly stormed the country’s consulate in Aden, where they burned an Egyptian flag and hoisted a Palestinian one.

There have been angry protests against the Israeli offensive in many other cities across the Arab world and in several European capitals.

Hamas has pressed on with rocket and mortar assaults, killing three Israeli civilians and a soldier in areas that have not previously suffered such fatalities.

Israeli military officials said rocket attacks landing more than 25 miles (40km) from Gaza put nearly 10% of Israel’s population of seven million within range.

Israeli political leaders have been under pressure to act against rocket fire with a general election looming in early February.

Opposition leader Binyamin Netanyahu has backed the offensive, telling the BBC that “Israel is using a fraction of its power to try to target surgically the terrorists”.

The strikes began less than a week after the expiry of a six-month-long ceasefire deal with Hamas, which has controlled Gaza since 2007.

Correspondents say short of a full-scale invasion of Gaza, it is unlikely Israel will be able to prevent rocket fire permanently.

Israel dismantled its strategic settlements and military bases in Gaza in 2005 but has kept tight control over access in and out of the narrow coastal strip and its airspace.

GAZA VIOLENCE 27-30 DECEMBER

1. Ashdod: First attack so far north, Sunday. Woman killed in second rocket attack, Tuesday
2. Ashkelon: One man killed, several injured in rocket attack, Monday
3. Sderot: rocket attacks
4. Nevitot: One man killed, several injured in rocket attack, Saturday
5. Civilian family reported killed in attack on Yabna refugee camp, Sunday
6. Israeli warplanes strike tunnels under Gaza/Egypt border, Sunday
7. Three brothers reported killed in attack on Rafah, Sunday
8. Khan Younis: Four members of Islamic Jihad and a child reported killed, Sunday. Security officer killed in air strike on Hamas police station, Tuesday
9. Deir al-Balah: Palestinians injured, houses and buildings destroyed, Sunday
10. Tel al-Hawa – Interior ministry and Islamic University badly damaged, Monday. At least three buildings in ministry compound hit, Tuesday
11. Gaza City port: naval vessels targeted, Sunday
12. Shati refugee camp: Home of Hamas leader Ismail Haniya targeted, Monday
13. Intelligence building attacked, Sunday
14. Jebaliya refugee camp: several people killed in attack on mosque, Sunday 15. Beit Hanoun – two girls killed in air strike, Tuesday
16. Israeli soldier killed at unspecified military base near Nahal Oz border crossing – five other soldiers wounded in same rocket attack, Monday night.

Empty aircraft fly from Bangkok

Thousands of passengers have been stranded by the protests

About 40 empty planes have flown out of Bangkok’s international airport after authorities reached a deal with protesters camped there for seven days.

Thousands of travellers have been stranded since anti-government groups took over two airports last week.

The deal allows a total 88 planes to be flown out to other Thai airports, where it is hoped they can evacuate some of the blockaded tourists.

The crisis has economically damaged the country since it intensified last week.

Thailand’s deputy premier for economic affairs is reported to be meeting senior figures in commerce, industry and tourism today to discuss the damage being done.

As the backlog of stranded foreigners grows with each day, foreign embassies are beside themselves with frustration.

Foreign airlines

A spokeswoman for Airports of Thailand said: “Thirty-seven aircraft have left Suvarnabhumi (international airport) since the first aircraft of Siam GA (a regional airline) took off on Sunday evening.

“International airlines will have to contact us to take those stranded aircraft out of Suvarnabhumi.”

Twelve planes belonging to foreign airlines are stranded at Suvarnabhumi, as well as 29 from Thai Airways, 16 of Thai Airasia, 15 from Bangkok Airways, and 22 aircraft from other airlines.

With thousands of British citizens among the estimated 100,000 travellers, a spokesman for the UK’s Foreign Office said: “Bangkok’s two main airports remain closed but airlines have been able to arrange flights and transfers to and from alternative airports.

“Some British nationals have been able to fly out but not in the necessary numbers.

“We have continued our consultations with airlines and Thai authorities…and action is being stepped up to enable people to travel in greater numbers, for example via Chiang Mai.”

Chiang Mai, in the north, is 700km (435 milies) by road from Bangkok, while the other option – Phuket, a resort in the south – is 850km (530 miles).

France has said it will send a “special plane” to fly its citizens out of Thailand on Monday, with “those in the most pressing situations…given priority,” AFP news agency reported.

Air France-KLM has already said it would fly travellers out of Phuket.

A few airlines have been using an airport at the U-Tapao naval base, about 140km (90 miles) south-east of Bangkok.

On Sunday more than 450 Muslim pilgrims stranded at the international airport were taken by bus to the base where they were to board a plane for the annual Hajj in Saudi Arabia.

Spain and Australia have been arranging special flights to evacuate their citizens.

Thailand’s tourist industry is losing an estimated $85m (£55.4m) per day, and the government warns that the number of foreign tourists arriving next year may halve, threatening one million jobs.

The protesters from the People’s Alliance for Democracy (PAD) are a loose alliance of royalists, businessmen and the urban middle class.

They opposition want the government to resign, accusing it of being corrupt, hostile to the monarchy and in league with exiled former Prime Minister Thaksin Shinawatra.

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Lehman set to go into insolvency

Preparations are being made for Lehman Brothers, the fourth-largest investment bank in the US, to file for bankruptcy.

The two strongest potential buyers appear to have pulled out of talks to rescue Lehman – the latest victim of the American credit crisis.

If no new financing comes before Wall Street opens, it will have to seek “Chapter 11” bankruptcy protection.

This could result in a severe shock to the global financial system, as banks unwind their complex deals with Lehman.

Late on Sunday the US central bank, the Federal Reserve, announced new moves to ease access to emergency credit for struggling financial companies.

The Fed said the step – which broadens the types of securities financial institutions can use to obtain emergency loans – was designed to mitigate the potential risks and disruptions to markets.

In a related move, a consortium of 10 investment banks announced a $70bn (£39bn) loan program that troubled financial companies can use to help ease the credit shortage.

The banks – Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley and UBS – each agreed to provide $7bn (£4bn) to the pool.

On Monday, Asian stock markets fell amid concerns over the fate of Lehman Brothers.

Singapore stocks dropped 2.26% in morning trading and shares in Taiwan fell 1.83%.

Markets in Tokyo, Hong Kong, Shanghai and Seoul were closed for public holidays.

Lehman employs about 25,000 worldwide, including 5,000 in the UK.

Accountancy firm PWC has already been lined up to run the British operations of Lehman should the firm go into administration.

BBC business editor Robert Peston says UK bank Barclays’ decision to walk away from a Lehman deal was a huge setback for the effort to rescue the Lehman.

Barclays terminated the negotiations because it was unable to obtain guarantees in relation to financial commitments faced by Lehman when markets open on Monday.

Bad bank, good bank

The rescue effort for Lehman was being co-ordinated by the US Treasury and the New York Federal Reserve.

No other large firm should buy Lehman whole – its toxic real estate and securities are too difficult to value Peter Morici University of Maryland

The US government had hoped to arrange a bailout under which other US investment banks would finance a “bad bank” that would hold the most “toxic” investments of Lehman in the property and mortgage market.

The “good bank” or rest of the firm, including its investment and wealth management arms, would then be sold to another financial institution, for example Bank of America or the UK’s Barclays.

Although such a deal would have cost the other investment banks millions, it might have restored confidence in the sector and avoided a sharp drop in the share price of all banks.

However, it appears that this plan is falling apart.

“The only thing that can prevent Lehman collapsing would be a huge injection of taxpayers’ money,” a banker close to the talks told the BBC, but added that US Treasury Secretary “Hank Paulson has made it clear he doesn’t want to do that”.

Hard choices

Bank of America, meanwhile, is said to be unconvinced that buying Lehman would be in the interest of its shareholders.

Instead, according to a report in the New York Times, Bank of America is in “advanced talks” to buy investment bank Merrill Lynch for more than $38bn.

HAVE YOUR SAY

It’s amazing that companies which charge high interest to cover risk still need to be bailed out by the taxpayer.

Jack, Canada

Send us your comments

Like other US investment banks Merrill has suffered losses of tens of billions of dollars in the subprime crisis, and has seen its share price plummet during recent months.

“No other large firm should buy Lehman whole – its toxic real estate and securities are too difficult to value,” said Peter Morici of the business school of the University of Maryland.

Lehman is up for sale after it reported a $3.9bn (£2.2bn) quarterly loss last week amid concerns over its long term financial viability.

The firm’s share price has plummeted as fears over its future have mounted.

Former Federal Reserve boss Alan Greenspan said the US government faced “very difficult decisions” over Lehman if it could not secure a rescue deal that did not involve public funds.

Yet Mr Greenspan said it would be “unsustainable” for the government to bail out every US bank that got itself into difficulty.

Predicting that Lehman would not be the last to require rescuing, Mr Greenspan added that this would not necessarily pose a problem.

“The ordinary course of financial change has winners and losers,” he said.

Alitalia crisis meetings restart

Time is running out to save Alitalia

Emergency talks to prevent the collapse of Alitalia have restarted in Rome after the airline warned it may have to start canceling flights from Monday.

With the airline saying it is running out of money to buy aviation fuel, the government needs to persuade unions to back a deal that involves job cuts.

The only offer on the table is from Italian consortium CAI, which only wants Alitalia’s profitable operations.

Unions have so far rejected this deal as it would mean major job losses.

Yet with the only alternative now increasingly looking like Alitalia’s total collapse and the loss of all 20,000 jobs, the unions now appear more willing to back down.

‘Cautiously optimistic’

“We are trying to get a solution to this saga and there are still many obstacles, but the climate is different and there is the awareness that there is no alternative to the deal,” said Giuseppe Caronia, head of the UILT union.

“I am moderately and cautiously optimistic.”

Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia.

Securing the airline’s future was one of his main election pledges before he returned to power in May.

Failed French takeover

Back in April, plans for Alitalia to be bought by Air France-KLM collapsed due to union opposition to planned job cuts.

Italy’s civil aviation authority said on Saturday that Alitalia’s operating licence was at risk due to the airline’s admission that it was running out of funds to buy fuel.

Alitalia is currently being run by administrators after seeking bankruptcy protection on 29 August.

The Italian government owns a 49.9% stake in Alitalia, but it cannot simply pump public funds into the airline as there are strict European Union rules preventing state support for airlines.

Bush backs McCain for president

President George W Bush has praised John McCain’s service and leadership in a speech to the Republican convention.

Speaking via video-link from the White House, he told delegates in St Paul, Minnesota, that Mr McCain was “a great American and the next president”.

Mr McCain is due to be nominated on Thursday as the party’s presidential candidate for November’s election.

The main talking point so far has been the news that the teenage daughter of Mr McCain’s running mate is pregnant.

Alaska Governor Sarah Palin, chosen as the vice-presidential nominee last week, announced on Monday that her 17-year-old daughter, Bristol, would have the baby and marry her boyfriend.

In his eight-minute address, Mr Bush described Mr McCain as a president ready to make the tough decisions needed “in a dangerous world”.

John McCain’s life is a story of service above self President George W Bush

“John McCain’s life has prepared him to make those choices. He is ready to lead this nation,” Mr Bush said.

He also spoke of Mr McCain’s life as “a story of service above self” and emphasized the “independence and character” he showed in backing the administration’s “surge” strategy of pouring more forces into Iraq.

Former Senator Fred Thompson, who ran against Mr McCain in the party’s primaries, opened a lively speech with criticism of the Democrats and the media for their scrutiny of Mrs Palin and her family.

He also spoke of Mr McCain’s military service, his courage while a prisoner of war in Vietnam and his commitment to reform in Washington.

Mr Thompson went on to attack the Democrats and their record since taking control of Congress in the 2006 mid-term elections.

Independent Senator Joe Lieberman, a former Democrat who was Al Gore’s running mate in 2000, spoke of Mr McCain as “the best choice to bring our country together and lead our country forward”.

Gustav appeal

Most of the first day’s political events were suspended out of respect for communities affected by Hurricane Gustav.

Instead, Mr McCain’s wife, Cindy, and First Lady Laura Bush made calls to support those under threat.

Mrs Bush told delegates that such events transcended party politics and reminded people that they were Americans first.

Gustav was downgraded to a tropical storm after making landfall on Monday west of New Orleans, where hundreds of thousands of people had been evacuated.

The storm came three years after Hurricane Katrina struck, killing more than 1,800 people and resulting in huge damage to the city and its surrounding area. President Bush was strongly criticised over his handling of the crisis.

Palin talking point

The Republican Party convention is now getting down to work after the uncertainty brought on by Hurricane Gustav.

Tuesday’s events are focusing on Mr McCain, a concentrated piece of political image building with a keynote speech from Joe Lieberman, the Democrat-turned-independent senator, who has decided to support the party’s candidate, our correspondent says.

Sarah Palin’s announcement has so far overshadowed the convention

President Bush cancelled his planned opening night speech amid concerns that overt political campaigning would play badly with voters at a time of potential crisis.

But many Republicans will be glad he is not here in St Paul in person, our correspondent says, and much of this week will be about defining Mr McCain as very different to his unpopular predecessor.

Meanwhile, media attention has continued to focus on Mrs Palin, who is facing an ethics investigation in her home state and whose daughter’s pregnancy made headlines on Monday.

The Associated Press reported on Tuesday that Bristol’s boyfriend, named as 18-year-old Levi Johnston, would be joining the Palin family at the convention in Minnesota.

The AP quotes Mr Johnston’s mother, Sherry, as saying he had been put under no pressure to marry and that the pair had been planning to wed before they knew she was pregnant.

Our correspondent says Mrs Palin’s selection as vice-presidential candidate has caused great excitement among social conservatives and evangelical Christians here.

But across the broader Republican Party there seems to be some unease – she is an unknown quantity, and when she is finally brought out on to the convention stage on Wednesday, many McCain supporters will be crossing their fingers and hoping she performs, he adds.

The 72-year-old Arizona senator is expected to formally accept his candidacy in a prime-time speech on Thursday evening.

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Indian floods cut off thousands

Half a million people in the Indian state of Bihar remain stranded in villages which have been devastated by massive flooding, officials say.

Correspondent reports chaotic scenes as soldiers try to reach those cut off and people attempt to scramble from rooftops into rescue boats.

With 1.2 million people homeless, India is struggling to cope with the crisis.

The flood waters are spreading to new areas, and conditions in relief camps are overcrowded and unsanitary.

The floods are known to have killed at least 75 people in Bihar but the death toll could climb once the situation in remote areas emerges.

Tens of thousands of people have also been displaced in neighboring Nepal where some of those who have lost their homes are camping under plastic sheets.

Disorganization

Visiting the Bageecha relief camp in Purnea, the BBC’s Sanjoy Majumder could find no camp co-ordinator or government official in charge of distributing aid.

Trucks and vans carrying relief material stood parked on the highway as volunteers waited to be organised.

Several tonnes of aid had arrived but the volunteers were not quite sure how to distribute it.

The situation was symptomatic of what was happening across Bihar’s flood-affected areas, our correspondent says.

The disaster began on 18 August when a dam burst on the Saptakoshi river in Nepal.

The Saptakoshi, which becomes the Kosi when it enters India, subsequently broke its banks in Bihar.

Officials in Nepal say hundreds of people there have been hit by illnesses such as diarrhoea and pneumonia and an estimated 50,000 are homeless.

They say nearly 1,000 houses have been completely destroyed. Power supplies and transport have been severely affected.

The costs to the economy are now estimated at one billion Nepalese rupees ($14.25m).

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