BEIRUT, Lebanon — Tens of thousands of protesters chanted and carried banners through the heart of Tehran and other Iranian cities on Friday, hijacking a government-organized anti-Israel march and injecting new life into the country’s opposition movement.The protests, held in defiance of warnings from the clerical and military elite, served as a public embarrassment to President Mahmoud Ahmadinejad, who had hoped to showcase national unity just two weeks before he is set to meet Western leaders for talks on Iran’s nuclear program.

He used the annual rally for Jerusalem Day, also known as Quds Day, to deliver a fiery anti-Israeli speech in which he called the Holocaust “a lie” and impugned the West again for its criticisms of Iran’s disputed June 12 presidential election.

But his efforts to recapture the stage were largely drowned out by a tumultuous day of street rallies, in which the three main opposition leaders marched with their followers for the first time in months. Flouting the official government message of support for Palestinian militants, they chanted, “No to Gaza and Lebanon, I will give my life for Iran.”

Coming a day after President Obama announced a revised missile defense system that aims to check Iran’s military ambitions, the rallies underscored the continuing vitality of the domestic opposition movement, which has rejected the election as fraudulent and fiercely criticized the violence that followed it.

In a striking contrast with earlier rallies, the police often stood on the sidelines as protesters faced off against huge crowds of government supporters — many of them bused in from outside the cities — and chain-wielding Basij militia members. There were reports of arrests in Tehran and the southern city of Shiraz, but no shootings or deaths, with the police apparently showing greater restraint than during earlier protests.

The protesters, ignoring stern official warnings not to use the annual pro-Palestinian rally as a pretext for demonstrations, showed up in large numbers wearing the trademark bright green color of the opposition.

When government men shouted “Death to Israel” through loudspeakers, protesters derisively chanted “Death to Russia” in response. Many opposition supporters are angry about Russia’s quick acceptance of Mr. Ahmadinejad’s electoral victory.

The three opposition leaders, Mir Hussein Moussavi, Mehdi Karroubi and Mohammad Khatami, joined the crowds in Tehran for the first time in months, drawing cheers.

Later, Basij militia members tried to attack Mr. Khatami and Mr. Karroubi, but defenders pushed them back, opposition Web sites reported.

The government had largely halted street protests in July, with a harsh government crackdown that left dozens of marchers dead and thousands in jail. But the authorities have been unable to silence the opposition’s leaders, who have kept up their criticism of the election and the government’s violent response.

The opposition leaders raised tensions when they leveled accusations that some protesters were tortured and raped in prison. The rape accusations have been especially embarrassing for the government, which has denied them while acknowledging that some prisoners were tortured.

There were reports of similar demonstrations and clashes in other cities Friday, including Isfahan, Tabriz, Yazd and Shiraz, where protesters skirmished with Basij militiamen, and freed a group of fellow protesters who were being arrested, opposition Web sites reported.

In the capital, the police and huge crowds of government supporters blocked most protesters from approaching Mr. Ahmadinejad as he arrived in a bulletproof car at Tehran University to deliver a speech before the formal Friday Prayer sermon. But as he began his remarks, chants of “Resign! Resign!” could be heard, according to witnesses cited on opposition Web sites.

Mr. Ahmadinejad said that confrontation with Israel was a “national and religious duty” and that the Holocaust was “a lie” that was used as a pretext for the country’s creation in 1948. Although he has called the Holocaust a “myth” in the past, provoking angry reactions in the West, he has rarely if ever used the word “lie” in public speeches.

The White House responded sharply to the remarks about the Holocaust. “We’ve heard that type of rhetoric before,” the president’s press secretary, Robert Gibbs, told reporters. “Obviously, we condemn what he said.”

The United States ambassador to the United Nations, Susan E. Rice, said Friday that Mr. Obama would not meet with Mr. Ahmadinejad next week when world leaders gather in New York for the United Nations General Assembly meeting.

Mr. Obama, in a major national security reversal, scuttled his predecessor’s missile-shield plan to focus instead on protecting Israel and Europe against short- and medium-range Iranian missiles. Mr. Ahmadinejad made no mention of that in his speech, nor has his government responded.

Both the revised missile plan and Mr. Ahmadinejad’s anti-Israel rhetoric are likely to elevate the tensions surrounding his visit to the United Nations.

As Jerusalem Day approached, a number of conservative figures, including Iran’s supreme leader, Ayatollah Ali Khamenei, warned that the day should not become an occasion for domestic discontent. On Thursday, the Revolutionary Guards issued an especially fierce statement, declaring that all protesters would be treated as Israeli spies.

But the government appears to have treated Friday’s protests with relative leniency. Although tear gas was fired at some crowds in central Tehran — it was not clear by whom — there was no renewal of the fierce crackdown that took place in June and July.

Although the marchers celebrating Jerusalem Day generally outnumbered the protesters, there were parts of the city where the opposite was true. Often, the protesters slyly distorted the traditional rallying cries of the pro-government crowds. When the marchers chanted, “The blood in our veins is a gift to our leader,” protesters countered with, “The blood in our veins is a gift to our nation.”

At one point thousands of protesters chanting “death to the dictator” as they walked down Valiasr Street, the broad avenue that runs across much of Tehran, collided with an equally large crowd of pro-government marchers chanting slogans against Israel, the United States and Britain.

A standoff ensued. Police officers standing nearby refused to take sides, and in some cases even stepped in to break up fights. Finally, several trucks full of government supporters arrived, and the protesters began withdrawing.

Iranian state television ignored the protests, showing thousands of marchers clad in checked Palestinian-style scarves, carrying posters of Hassan Nasrallah, the leader of the Lebanese militant group Hezbollah. Jerusalem Day, held on the last Friday of the fasting month of Ramadan, is an important occasion for the government, which uses its support for Palestinian militants and the Lebanese Hezbollah to burnish its street support in an Arab world that is largely hostile to Iran.

JERUSALEM, Sept. 18 -- White House special envoy George J. Mitchell finished a week of diplomacy in the region without reaching an agreement with Israel over limits on Jewish settlement in the occupied West Bank, diminishing chances for a breakthrough meeting between Israeli and Palestinian leaders next week at the U.N. General Assembly session. Mitchell met with Israeli Prime Minister Binyamin Netanyahu three times this week, including two sessions on Friday; visited Palestinian Authority President Mahmoud Abbas twice in the West Bank city of Ramallah; and made side trips to Egypt and Jordan.

But the intense round of diplomacy failed to broker even a handshake between Netanyahu and Abbas at the U.N. meeting next week, signaling a deepened stalemate over an issue that President Obama has set as one of his top priorities.

The U.N. meeting is likely to be a pointed one for Netanyahu. A U.N. Human Rights Council report this week accused Israel of violating international law during last winter's three-week war in the Gaza Strip, and tensions are rising over Iran's nuclear program. In Tehran on Friday, Iranian President Mahmoud Ahmadinejad used an annual rally in support of the Palestinians to again deny the Holocaust and urge opposition to Israel.

The Obama administration had hoped to announce at next week's gathering the renewal of Israeli-Palestinian peace negotiations. But Mitchell's months of arbitration failed to coax an agreement from Israel to impose a settlement freeze or persuade Abbas to restart talks without one. Israel has said it would suspend construction for several months, but it also excluded from those limits thousands of homes already under construction, approved building permits for an additional 455 projects and exempted disputed areas of East Jerusalem altogether.
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"There are no middle-ground solutions for settlements. A settlement freeze is a settlement freeze," Palestinian negotiator Saeb Erekat said, reiterating what has become a fixed demand of Abbas and the Arab states.

A freeze on Israeli building in the occupied West Bank is part of an agreement the two sides reached in 2003. Arabs regard it as a central step for Israel to show it is serious about negotiating a peace agreement. There are about 300,000 settlers in the West Bank, and Palestinians argue that the continued expansion of Israel's presence in the area makes a final deal on the borders of a future Palestinian state impossible.

The two sides are also at odds over Jerusalem, with the United States and Abbas insisting that Jewish construction stop in historically Arab neighborhoods, and Netanyahu arguing that the city must remain undivided and that Jews must be allowed to build wherever they want.

With Jews preparing to celebrate the start of Rosh Hashanah and Muslims the three-day festival that marks the end of Ramadan, Mitchell shuttled Friday between Jerusalem and Ramallah before departing the country at midafternoon.

An Israeli government official, who spoke on the condition of anonymity, said Netanyahu was willing to meet Abbas and had ordered a plane to be kept ready over the weekend in the event the situation changes. But as it stands, the Israeli leader does not plan to leave for New York until Wednesday, a day before he is to address the assembly.

WASHINGTON — President Obama's foreign policy has employed a starkly different tone than George W. Bush's, emphasizing engagement and cooperation rather than go-it-alone confrontation. Even so, analysts of various political stripes hadn't seen many big differences on substance.

Until now.

Obama's decision Wednesday to scuttle a costly and technically challenged long-range missile-defense system in Europe marks his most significant reversal of a Bush foreign policy priority. It could change the dynamic of what has been an increasingly tense relationship between the U.S. and Russia, which viewed the Bush plans for missile defenses in Poland and the Czech Republic as a threat.

Bush's proposed missile shield, designed to counter intercontinental missiles from Iran, "was very much a signature initiative of theirs, both with respect to Central Europe and with respect to missile defense," says John Pike, director of GlobalSecurity.org, a defense think tank.

Speaking to reporters at the White House, Obama was careful to portray his decision as a revamping, not an abandonment, of European missile defense. He said he would replace the long-range system Bush envisioned — which had a spotty testing record — with a more reliable defense system aimed at countering what Obama called a more imminent threat from Iran's short-range missiles, which can travel up to 5,000 miles and potentially strike continental Europe.

Defense Secretary Robert Gates said the new plan still places systems in Poland, the Czech Republic and other countries in the region, though the details are still to be ironed out. The plan calls for a ship-based component and some ground-based interceptors designed to target shorter-range missiles that are less difficult to hit.

"Our new missile-defense architecture in Europe will provide stronger, smarter, and swifter defenses of American forces and America's allies," Obama said.

The move wasn't unexpected — Obama had ordered a review of the Bush program shortly after taking office, and outside experts had questioned its feasibility even before then. Even so, Obama's announcement drew heated criticism from Republicans, who accused the president of abandoning central European allies and caving in to Russia in a naive bid for diplomacy.

"Short-sighted and harmful to our long-term security interests," complained Senate Minority Leader Mitch McConnell, R-Ky.

Democrats praised the decision; Senate Armed Services Committee Chairman Carl Levin called it "a sound choice that will improve our security."

Central to the debate over Obama's decision on missile defense is how it will be greeted by Russia, which has been a patron and trading partner of Iran, the Islamic republic that has bedeviled U.S. foreign policy for the last 30 years.

The Iranian regime has an active nuclear energy program, and although U.S. intelligence reports say Iran is not developing an atomic weapon, a new report by the International Atomic Energy Agency concluded Thursday that Tehran has the ability to make a bomb. That news, reported by the Associated Press, also said Iran is on its way to developing a missile system able to carry a nuclear warhead.

Obama is trying to negotiate with Iran. But if those talks fail, his administration will seek to impose "crippling sanctions," in the words of Secretary of State Hillary Rodham Clinton.

Russia, whose president, Dmitry Medvedev, will meet Obama at the United Nations next week, is key to any such effort. So far, it has resisted further sanctions on Iran, which it supplies with weapons and other technology.

If Obama's move was designed to nudge Russia, early signs Thursday weren't encouraging.

Russian Foreign Minister Sergey Lavrov said in a speech before Obama's missile-defense announcement that Moscow will continue to oppose any new sanctions over Iran's nuclear program.

Medvedev, however, said after the announcement that Obama's action was a "responsible move."

Policy reversal

Until now — leaving aside domestic issues with foreign policy implications, such as the treatment of terror detainees — Obama's foreign policy hasn't radically departed from that of his predecessor, though the rhetoric has been much different.

He has talked more about engaging adversaries, though no presidential summits have materialized. He has continued Bush's gradual withdrawal from Iraq and added troops to Afghanistan.

Pushing a so-called "reset" button in the USA's relationship with Russia has yielded little that is tangible. Polls in various countries show that Obama is far more popular abroad than Bush is, but that popularity has yet to translate into visibly better cooperation with U.S. policy goals.

Christian Brose, who was a speechwriter for Bush Secretary of State Condoleezza Rice, wrote recently on foreignpolicy.com: "Our NATO allies have passed on sending more troops to Afghanistan and on lifting restrictions on those already there ... India and China don't share any of Obama's enthusiasm for a climate change deal. ... Pakistan is still dysfunctional and supporting terrorism. Iran and North Korea are all middle fingers and no unclenched fists. ... Rarely has a U.S. administration been so well-liked, so eager to engage with others, and had so little to show for it."

Obama officials disagree, of course, but it's not just former Bush officials who hold that view: In July, Columbia University professor and liberal blogger Lincoln Mitchell wrote a post entitled, "Why Obama's Foreign Policy Looks So Much Like Bush's." He previously was a Democratic consultant.

Republicans, including Obama's 2008 opponent, Sen. John McCain of Arizona, have supported many, though not all, of the new president's foreign policy moves. On Thursday, though, they erupted in a chorus of criticism.

McCain called the decision "seriously misguided," while Florida's Ileana Ros-Lehtinen, ranking Republican on the House Foreign Affairs Committee, dubbed it "a policy of appeasement."

Marc Thiessen, a former Bush speechwriter now at the Hoover Institution, said the "disastrous decision" sends "a signal of weakness to Tehran ... and a terrible signal to Russia, that they can bully us into abandoning our friends in what they consider their sphere of influence."

The partisan uproar came despite the endorsement of the move by Gates, who was Bush's secretary of Defense when the deals with Poland and the Czech Republic were finished last year and who holds the same job for Obama.

"This new approach provides a better missile-defense capability for our forces in Europe, for our European allies and eventually for our homeland than the program I recommended almost three years ago," Gates told reporters at the Pentagon after Obama spoke.

A troubled program

The program Gates once supported has been controversial from the moment Bush proposed it in a speech on May 1, 2001, months before the 9/11 attacks and a year before revelations about Iran's nuclear program.

It called for putting 10 land-based interceptors in Poland and a ground-based radar in the Czech Republic.

The Europe system was never deployed, so it wasn't tested. But similar ground-based interceptors failed to hit targets in five of 13 tests, according to the Pentagon, and they have not demonstrated an ability to detect decoys, the Government Accountability Office says.

The Bush system would have cost $9 billion to $13 billion, according to the Congressional Budget Office, and still would have left parts of Europe unprotected from an Iranian missile. Instead of the long-range interceptors, the United States will put in place more seasoned technology that will focus on medium- and short-range missiles, of which Iran has hundreds, Gates said.

Critics of the Bush approach praised Obama's announcement.

"What the president is proposing here actually produces more defense sooner than the program it replaces," said former Pentagon testing chief Philip Coyle, a longtime skeptic of the Bush program.

"The canceled European deployment would have added only marginally and at high cost to the full coverage of the United States already afforded by the existing ground-based interceptors," physicist Richard Garwin, who helped design the hydrogen bomb and recently was on a commission to assess the ballistic missile threat, said in an e-mail.

In Central Europe, reactions to the news were mixed. Bush's plan had never been popular in the Czech Republic, where polls showed 70% opposed it. In a March, a Czech government fell in part because it supported the missile shield.

Still, it was seen in both countries as a bulwark against an aggressive and expansionist Russia.

"Much of Europe — especially the Central and Eastern regions — will now view the United States as unable to fulfill its promises to its allies in the face of a strengthening Russia," said an analysis by Stratfor, a Texas-based intelligence firm.

Obama's shift on missile defense may embolden the Russians and "encourage them to push other buttons," said Janusz Bugajski, director of the New European Democracies Project at the Center for Strategic and International Studies, a Washington think tank.

Bugajski said it did not go down well in Poland that Obama made the announcement on the 70th anniversary of the Soviet Union's invasion of Poland at the start of World War II.

He said the United States will need to take steps to reassure Central and Eastern European countries that they will be protected against Russia. For example, NATO could devise defense plans for the countries, he said, or station troops on their territories.

Obama and Medvedev plan to meet twice next week, once at the United Nations and again in Pittsburgh for the G-20 economic conference. Those meetings could show what dividends, if any, the president will reap from his first major foreign-policy shift from his predecessor.

GAINESVILLE, Fla. -- Tennessee coach Lane Kiffin jogged to midfield, briefly shook hands with Florida's Urban Meyer and then darted toward the locker room.

Kiffin kept his head up the whole way. Who could blame him? After all, he had more reason to be encouraged than embarrassed after his Southeastern Conference opener against the top-ranked Gators.

Tim Tebow ran for 76 yards and a touchdown, Caleb Sturgis kicked three field goals and Florida eked out a 23-13 win over the Volunteers on Saturday.

It wasn't the beatdown many expected. It gave Kiffin reason to believe Tennessee (1-2, 0-1) is on the right track. It gave Meyer a big enough scare that it could help the defending national champions the rest of the way.

"It wasn't how we envisioned or hoped," said Tebow, whose streak of games with a TD pass ended at 30. "But it's a win and it's good enough for all of us."

The Gators (3-0, 1-0) won their fifth straight in the series and set a school record with their 13th consecutive victory.

Florida started counting down the days for this one more than nine months ago, right after Kiffin vowed to sing "Rocky Top" all night long after being the Gators. Kiffin also riled up Florida with his false allegations of NCAA violations by Meyer.

Kiffin ran out of the tunnel just before the opening kick and had 90,000 Florida fans screaming, pointing and yelling obscenities at him. One guy even tried to torment Kiffin with a poster of Oakland Raiders owner Al Davis, Kiffin's former boss. Kiffin said afterward that his plan from Day 1 was to take the focus of his players and put it on him.

"It worked perfectly," Kiffin said. "It took all the pressure off the players. We played the No. 1 team in the nation with no pressure on them. ... It was all on me. We were 30-point underdogs in this place and it really helped them go out and play ball."

Kiffin refused to claim a moral victory, though. So singing "Rocky Top" will have to wait at least another year. He didn't even consider humming the tune.

"No, we lost a game," Kiffin said. "Maybe I'll come back here for basketball and sing it for (coach) Bruce (Pearl)."

Florida's postgame celebration was about as conservative as its game plan. There was no trash talk and no one trying to rub it in. The Gators were clearly disappointed with their performance, even though they had reason to celebrate.

Tebow, return man Brandon James and Florida's defense gave the Vols fits for the third straight year.

Tebow completed 14 of 19 passes for 115 yards, although he also had two turnovers that Tennessee turned into 10 points. James returned three kickoffs for 97 yards, helping set up Florida's first 13 points, but he also dropped a pass in the end zone.

And the defense harassed Jonathan Crompton and twice held the Vols to short field goals when they were in position for touchdowns. Ahmad Black intercepted Crompton on fourth down with about 2 minutes to play, ending Tennessee's last chance at pulling off the upset.

"I'm not happy," said Crompton, who threw three interceptions and fumbled a snap last week against UCLA. "Don't want to lose if you're a competitor. Hate losing more than you like winning. Look at the positives. Got a chance to capitalize early and late."

Tebow took over down the stretch.

After his two nifty, 4-yard runs, the Gators looked like they would put the game away. But Tebow fumbled at the Vols 4, and Tennessee scored seven plays later to make it 23-13. It was Tebow's second turnover of the game. He threw an interception in the first half that Tennessee turned into a field goal.

The Gators had some excuses for their lackluster offense. Receiver Deonte Thompson missed the game because of a hamstring injury. Running back Jeff Demps played with a 101-degree fever. And tight end Aaron Hernandez had to be isolated Friday because of flu-like symptoms.

Meyer put it all on Tebow, who ran 24 times.

His best plays were short gains late. He started right on a third-and-3, looked to throw and then cut back left and headed toward the sideline. He eluded Wes Brown's grasp, then tiptoed down the sideline for a 4-yard gain. Instead of possibly being forced to punt, the Gators scored a touchdown to make it 23-6.

"Unbelievable," Meyer said. "Vintage Tebow. He had a hell of a day. ... He kind of took that game over on that drive. That was one of the best plays. I can't wait to see that on film. He was this far from out of bounds and got the first down."

On the next possession, Tebow used a nasty spin move to escape All-American safety Berry and Gerald Williams, then hit Dennis Rogan so hard the defender's helmet flew off.

"I don't think he's human," Kiffin said. "I really don't. There were times when I asked (the coaches in the booth) on the headset, 'Is he ever going to wear down?' But he never does. Our defense worked hard and you just prayed to get it to third-and-4, because if it was third-and-3, he was going to put his head down and run over people."

Tebow and the Gators had their heads down afterward. Meyer even said he had to lighten the mood in the locker room.

"I think there's so much pressure on this team to perform perfectly, which is good," Meyer said. "I'd rather be on that end than on, 'Boy, great job. We lost by 10.' I don't want to do that. There's a lot of pressure on these guys and I felt it in there."

LONDON - Greed, hubris, vast fortunes erased at a stroke - the financial crisis is dramatic gold dust for writers.

One of Britain's leading playwrights, David Hare, is tackling the world of toxic securities and subprime mortgages in his new play at the National Theatre in London. Author Sebastian Faulks has a new best-seller about a swashbuckling hedge fund trader. And the BBC has made a TV drama about the collapse of Lehman Brothers.

You may think stocks, derivatives and collateralized debt obligations are not the natural stuff of drama. Think again, says National Theatre artistic director Nicholas Hytner, who commissioned Hare's play, "The Power of Yes."

[continued below]"The people who suffer this recession will not be the people who caused it," Hytner said. "And there you have the beginnings of a play."

A year after Lehman Brothers' bankruptcy, artists on both sides of the Atlantic are grappling with the causes and effects of the worst financial crisis since the Great Depression.

Michael Moore stormed the Venice and Toronto film festivals with "Capitalism: A Love Story," a documentary screed against financial fat-cats and corporate profiteers.

A central character of Faulks' novel "A Week in December" - riding high in British best-seller lists - is a hedge fund manager plotting an audacious deal that will make him a fortune, and bring down a bank. U.S. writer Jess Walter's highly praised new novel, "The Financial Lives of the Poets," follows a freelance writer driven to the brink when his verse-meets-financial-advice Web site goes bust.

The BBC has just aired "The Last Days of Lehman Brothers," a docudrama that starred James Cromwell ("Babe," "24") as then-U.S Treasury Secretary Hank Paulson, refusing to intervene as the venerable investment house imploded under the weight of its huge debts."

In a touch of irony, the fictional account was filmed in Lehman Brothers' real - and now empty - high-rise offices in London's Canary Wharf.

It's fascinating, if unfamiliar, terrain for writers, who are seeking to use the arts where economists failed and answer the pressing question: How did we end up in this mess?

"You can bring a freshness to it if it's not your area of expertise," said Craig Warner, the U.S.-born, U.K.-based writer of "The Last Days of Lehman Brothers."

"Before writing this I knew there was a subprime mortgage crisis, I knew they were giving mortgages to people with a bad credit history, but I didn't know why or what the connection was to Wall Street."

"As soon as I learned how those things were connected, I wanted that knowledge to be imparted to the world."

Evidence suggests the world is eager to know. "Enron," a play at the Royal Court Theatre about the 2001 demise of the American energy giant, was sold out weeks before opening, and will move to a bigger West End playhouse this winter and to Broadway next April.

More broadly, the recession doesn't seem to have dulled the public's appetite for the arts. London theatres had a record year, cinema takings were up in 2008 and book sales are booming.

Hytner said evidence from past downturns suggests arts and entertainment are "one of the very last things people stop paying for."

"When times are tough, it is a reassuring touchstone of people's common humanity to sit with 1,000 other people and have a common experience," he said.

In the story of how capitalism became unbalanced - "too much greed, not enough fear," in Hare's words - writers are finding humour, tragedy and irony.

Surprisingly, perhaps, there's more sorrow than anger in their accounts.

"The Power of Yes," which runs from Sept. 29, looks at the way government subsidies were used to bail out the rich while ordinary people lost their jobs - a sort of socialism turned upside down. But Hytner says "those looking merely for a caricatured banker-bash" will be disappointed.

The writers acknowledge the allure of corporate "masters of the universe" like Lehman Brothers' hubristic CEO Richard Fuld and Enron's Jeffrey Skilling.

"Enron" writer Lucy Prebble - whose play charts the energy company's 2001 collapse as a result of widespread accounting fraud, a foreshadowing of the current crisis - told The Guardian newspaper she thought it was important "to try and create a tragic hero within whom you may not agree, but who is dramatically magnetic."

Warner said Fuld, a domineering figure whose nickname was "Gorilla," has "all the hallmarks of a tragic hero."

The events being depicted in these works are still headline news. That adds to their immediacy - but does it lessen their impact as art?

Some reviewers found Warner's Lehman Brothers movie less dramatic than a BBC documentary on the same subject aired the next night, in which the real bankers proved more mesmerizing than their fictional avatars.

Hytner is warning people in advance that "The Power of Yes" is "not so much a play as a narrative in response" to the crisis.

"Those looking for 'Death of a Salesman' will not find it," he said.

"Probably the great play about this crash and its consequences will not come for a few years. A play written in the white heat of the moment might not have the reflectiveness of great works of art."

WASHINGTON (Reuters) - The Federal Reserve plans new rules on bank pay to curb the type of excessive risk-taking that sparked the global financial crisis and triggered international demands for action.

Public outrage at the stratospheric compensation of some bankers has boiled up to the level of the Group of 20 nations, whose leaders meet next week in Pittsburgh.

The United States, under pressure to act on pay at the G20 from France and Germany, has already said it aims to curb the culture of excessive risk-taking at the root of the crisis.

A Fed source said on Friday that guidelines would be proposed in the next few weeks and would apply to any employee able to take risks that could imperil an institution, not just the executives who have been the main target of popular ire.

The rules will be aimed at all firms the Fed regulates and be enforceable under its existing powers, said the source, who requested anonymity. The Fed oversees more than 5,000 bank holding companies and over 800 smaller state-chartered banks.

Massive losses inflicted by risky subprime mortgage bets destroyed some of the oldest names in U.S. finance and intensified a recession that has cost millions of jobs, putting both the banks and the regulators under scrutiny.

The Financial Stability Board, which answers to the G20 and will issue guidelines at the September 24-25 summit, said on Tuesday that poorly capitalized banks should not be allowed to pay large bonuses.

MULTIPLE TRACKS

The Obama administration has already appointed a "pay czar" to oversee executive compensation at firms getting taxpayer aid, and has indicated it will take further steps.

"Properly designed compensation practices constitute an important measure in ensuring safety and soundness in our system," White House adviser Lawrence Summers said on Friday.

Industry officials said many financial firms had already reined in pay practices and warned a heavy-handed approach by the Fed could be harmful.

"What we're worried about is if they place undue restrictions on the sales people because that could weaken the company itself," said Scott Talbott, senior vice president for government affairs for the Financial Services Roundtable, the industry's lobbying group.

Some analysts said Washington was bowing to populist pressure. "I think that talking about curbing Wall Street pay is emotional and not rational," said Tom Sowanick, co-president and chief investment officer of Omnivest Group LLC.

The Fed's proposal would take a two-pronged approach. A top tier of the largest banks, numbering around 24, would get particularly close scrutiny, while all other lenders under the Fed's supervision would receive less-intensive treatment.

Larger firms would also be subject to a review that would compare their practices against rivals, and would be required to submit their pay policies to the Fed for its approval. Continued...

Seven former CIA directors have urged U.S. President Barack Obama to stop a criminal probe into alleged prisoner abuse by CIA interrogators during the Bush administration.

The CIA directors, who served both Democratic and Republican presidents, made they request in a letter Friday to the White House.

In their letter, the former directors - John Deutch, Porter Goss, Michael Hayden, James Schlesinger, George Tenet, William Webster, and James Woolsey - warned that the investigation could discourage intelligence officers to take risks to protect the country, and may inhibit foreign governments from cooperating with the United States.

U.S. Attorney General Eric Holder last month named prosecutor John Durham to lead the investigation to determine whether CIA personnel broke laws when interrogating terrorism suspects.

Holder's spokesman Mark Miller said the attorney general's decision to order a preliminary review into this matter was made in line with his duty to examine the facts and to follow the law.

Miller said the Justice Department will not prosecute anyone who acted in good faith and within the scope of the legal guidance given by the Office of Legal Counsel regarding the interrogation of detainees.

Dick Cheney, who was vice president in the Bush administration, denounced the opening of the investigation as "politically motivated." He said the decision would damage the country's long-term capacity to have people take on difficult jobs.

Cheney is a staunch defender of the former administration's interrogation policies put in place after the September 11, 2001, terrorist attacks on the United States. He said these techniques kept the nation safe from further terrorism attacks.

Japan's ruling party conceded a crushing defeat today as voters looked to have handed the main opposition party a historic general election victory.

Television exit polls suggested the left-of-centre Democratic Party of Japan (DPJ) would win 300 or more of the 480 seats in the lower house, a huge improvement on its current 115 seats.

The ruling Liberal Democratic Party was forecast to win only about 100 seats, a devastating blow to the party that has ruled Japan for all but 11 months since 1955.

"These results are very severe," the prime minister, Taro Aso, told a news conference at party headquarters. "There has been a deep dissatisfaction with our party."

Aso said he would have to accept responsibility for the results, suggesting that he would resign as party president. Other LDP leaders also said they would step down, though official results were not to be released until early tomorrow morning.

Victory for the DPJ will see its president, Yukio Hatoyama, installed as leader of the first government not led by the Liberal Democratic party (LDP) for 15 years and only the second for more than half a century.

Early estimates showed turnout was high, but hopes that it could exceed 70% may have been dashed by strong winds and heavy rain brought by an approaching typhoon.

The exit polls are in line with recent opinion polls showing the LDP's strength in the lower house slashed from 300 seats to as few as 100.

The Democratic Party needs only to win a simple majority of 241 seats in the lower house to ensure that it can name the next prime minister. The 300-plus level would allow it and its two smaller allies the two-thirds majority they need in the lower house to pass bills.

The election has proved disastrous for Aso, whose year in office has been bedevilled by gaffes and sleaze, as well as coinciding with Japan's deepest recession since the second world war.

While Hatoyama represents a shot in the dark, he has captured the public imagination with promises of higher welfare spending, the introduction of a minimum wage and child allowance, and a more equal relationship with Japan's main ally, the US.

"The ruling party has betrayed the people over the past four years, driving the economy to the edge of a cliff, building up more than 6 trillion yen (£39.4bn) in public debt, wasting money, ruining our social security net and widening the gap between the rich and poor," the DPJ said in a statement today. "We will change Japan. We will not be arrogant and we will listen to the people."

Even voters who remain wary of the DPJ's spending promises said they were prepared to vote for the party.

"We don't know if the Democrats can really make a difference, but we want to give them a chance," Junko Shinoda, a civil servant, told the Associated Press after casting her vote in Tokyo.

Newspaper editorials agreed that Hatoyama's first task must be to steer Japan towards sustained economic recovery.

"Whoever wins the election on Sunday, we want to ask the next administration to swiftly deal with concerns about unemployment, uncertainty and deflation, which are deepening simultaneously," the Nikkei business paper said.

The urgency of dealing with the Iranian nuclear threat was underscored today when a leaked report revealed that the UN inspection agency believes the Islamic republic has "sufficient information" to make a nuclear weapon and has "probably tested" a key component.

A day after Barack Obama scrapped plans to deploy missile defence technology in eastern Europe, the Associated Press said it had obtained material from the International Atomic Energy Agency (IAEA) which suggests that it was more convinced Iran had been trying to make a bomb than its outgoing director, Mohamed ElBaradei, had admitted.

"The agency … assesses that Iran has sufficient information to be able to design and produce a workable implosion nuclear device based on HEU [highly enriched uranium] as the fission fuel," AP quoted a "secret annexe" to a report on Iran as saying. Western diplomats confirmed that the annexe was authentic.

"Its absolutely accurate," one official said. "It shows the agency's thinking, which is that Iran is a lot further along on this than most people think. It suggests the Iranians have done a lot of work."

The annexe said Iranian scientists had engaged in "probable testing" of explosives arranged in a hemisphere, which is how an implosion-type nuclear warhead is triggered.

There was also evidence, the report says, that Iran had worked on developing a chamber to carry a warhead on top of one of its missiles "that is quite likely to be nuclear".

Attention will now focus on the United Nations in New York next week, where Obama takes the rare step of chairing a security council session in order to generate momentum towards nuclear disarmament, non-proliferation and consensus over Iran.

His decision to change tack on missile defence has raised the prospect of improved co-operation with Russia in the security council. The Russian prime minister, Vladimir Putin, has praised Obama's U-turn as "correct and bold".

In a second overture to the Russians today, the Nato military alliance proposed a joint missile defence system to counter the danger of rocket attacks from countries like Iran.

"Our nations, and our forces deployed in theatre, will all become increasingly vulnerable to missile attacks by third parties," said Nato's new secretary general, Anders Fogh Rasmussen, in a speech made in Brussels.

"We should explore the potential for linking the US, Nato and Russia missile defence systems at an appropriate time … Both Nato and Russia have a wealth of experience in missile defence. We should now work to combine this experience to our mutual benefit."

Along with China, Russia has hitherto proved reluctant to support calls from the US and its western allies to deter Iran from pursuing nuclear weapons through heavier sanctions.

Moscow has indicated that it will not necessarily reverse its course as a result of the US climbdown on missile defence, but it equally has no interest in another nuclear power emerging on its southern fringe.

The IAEA annexe, entitled Possible Military Dimension of Iran's Nuclear Program, gives details of a top-level meeting in 1984 in which Ayatollah Ali Khamenei, then president and now supreme leader, appears to give the green light for building a bomb, saying: "A nuclear arsenal would serve Iran as a deterrent in the hands of God's soldiers."

Intelligence agencies in the US, Britain, France and Germany all believe that Iran has worked on developing a nuclear warhead, but they differ on how long that work went on and whether it is still continuing.

A US national intelligence estimate two years ago said that development work on a warhead ended in 2003, although British officials have questioned this assessment. The AP report does not make it clear when or whether the IAEA inspectors believe that warhead work is finished.

Separately, North Korea indicated todaythat it was willing to engage in multilateral talks in an announcement that could pave the way for the reopening of disarmament negotiations.

"North Korea would like to solve relevant issues through bilateral and multilateral talks," leader Kim Jong-il told Chinese president Hu Jintao's special envoy, according to a report by China's official Xinhua news agency.

Republicans have condemned Barack Obama's decision to scrap a US missile defence shield in Europe as a policy of appeasement that will embolden Russia and Iran while letting down America's allies.

Obama's decision means the US will not now base US interceptor missiles in Poland and radar in the Czech Republic to protect Europe from Iranian missiles. Russia had denounced the defence system as a threat to its own defences and demanded that it be scrapped.

"Scrapping the US missile defence system in Poland and the Czech Republic does little more than empower Russia and Iran at the expense of our allies in Europe," the leader of the Republicans in the House of Representatives, John Boehner, told Fox News.

Lindsey Graham, the Republican senator for South Carolina, said: "It will empower the Russians and it will scare the crap out of the Poles, Czechs, Ukrainians and Georgians. It is a huge mistake."

Jon Kyl, Republican senator for Arizona, called Obama's decision "dangerous and short-sighted". In a statement, Kyl, the Senate minority whip, said: "Not only does this decision leave America vulnerable to the growing Iranian long-range missile threat, it also turns back the clock to the days of the cold war, when eastern Europe was considered the domain of Russia.

"This will be a bitter disappointment, indeed, even a warning to the people of eastern Europe. The message the administration sends today is clear: the United States will not stand behind its friends and views 'resetting' relations with Russia more important."

John McCain warned that the decision to scrap the missile shield came at a time when loyal US allies in eastern Europe were "increasingly wary of renewed Russian adventurism".

The former presidential candidate, who is senator for Arizona, said: "Given the strong and enduring relationships we have forged with the region's nations since the end of the cold war, we should not, I believe, take steps backward in strengthening these ties."

In a comment piece for the Washington Post, David Kramer, the former deputy assistant secretary of state responsible for Russia, Ukraine, Belarus and Moldova in the Bush administration, described Obama's move as a "capitulation to Russian pressure" and "a serious betrayal of loyal allies in Warsaw and Prague".

The partisan uproar came despite the endorsement of the move by Robert Gates, the defence secretary, who also served under George Bush and previously supported the missile shield.

Gates said that a new system spread across various countries would provide "a better missile defence capability for our forces in Europe, for our European allies and eventually for our homeland than the programme I recommended almost three years ago."

Democrats have praised the decision, with Carl Levin, the Senate armed services committee chairman, calling it "a sound choice that will improve our security", according to USA Today.

Philip Coyle, former Pentagon testing chief, said: "What the president is proposing here actually produces more defence sooner than the programme it replaces."

An editorial in the New York Times also backed Obama's plan, noting that the technology required for the Bush administration's missile shield "was nowhere near ready" and "the threat it was supposed to defend against – an Iranian intercontinental ballistic missile – was also years away".

But it warned that the president would need a very deft hand to manage the diplomatic fallout of his decision, to both placate the disappointment of the Polish and Czech governments and ensure that Moscow behaves.

Mr Obama will hold separate talks with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, before a joint meeting.

Efforts to restart the peace process have so far been blocked by disagreements over Israeli settlements.

A senior US official told the BBC that there was no expectation of an announcement after Tuesday's meetings.

He said the meetings are "clear sign of the President's personal commitment to this issue."

But he added that it was critical to put the discussions "in context".

"Nine months ago there was a war in Gaza," he said. "The Israeli government has only existed for five months.

"And now these three leaders are going to sit down in the same room and continue to narrow the gaps."

'Deep commitment'

The announcement of the meetings, which will take place on the sidelines of the UN General Assembly in New York, came after US envoy George Mitchell's latest round of shuttle diplomacy ended without agreement.

The White House said the meetings next week would continue efforts by Mr Obama, Mr Mitchell and Secretary of State Hillary Clinton "to lay the groundwork for the relaunch of negotiations".

The road is now blocked
Mahmoud Abbas
Palestinian president

Mr Mitchell said Mr Obama's desire to personally engage at this juncture showed his "deep commitment to comprehensive peace".

The US envoy held a series of meetings with Mr Netanyahu last week in a fresh attempt at getting a deal on Jewish settlement activity.

He also went to the West Bank to talk to Mr Abbas.

Mr Mitchell was hoping for a consensus before all sides attend the UN General Assembly, but he returned to the US without reaching any agreement.

Mr Abbas and the US administration have been demanding a complete freeze on Israeli construction activity.

Mr Netanyahu had previously offered a temporary freeze for several months, but not in East Jerusalem or in cases where homes have already been approved.

He noted this week that there had been a slowdown in settlement construction, but that work would continue on 2,400 units currently being built.

'New conditions'

On Saturday, both sides were reported as blaming each other for the lack of any agreement to resume the peace process following Mr Mitchell's visit.

Israeli foreign ministry spokesman Yossi Levi said the Palestinian Authority was "preventing the resumption of the peace process by making conditions that it has not made in the past", AFP news agency said.

It was not reported which conditions he was referring to.

But Mr Abbas said Israel was to blame for not agreeing to a total freeze in settlement building.

"The road is now blocked," he told journalists in Cairo.

"There is no more work [for Mr Mitchell] with the Western or Palestinian sides because we are complying with all our duties.

"The focus has to be on the Israeli side."

A national debate on race that Barack Obama had hoped to avoid was ignited today when Jimmy Carter claimed that much of the opposition to the president has arisen because he is black.

The former president said racism had come to the surface across the country because of a belief held by many whites that an African American is not qualified to be in the White House.

"I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he's African American," Carter said. The Republican party today issued a denial, saying Carter was "flat-out wrong" and that opposition was not because of Obama's skin colour but his policies.

Carter, who aired his views in a television interview and at a public meeting in Atlanta, Georgia, on Tuesday, is the most senior Democrat yet to voice what many in the party have been saying both in public and private after the Republican Congressman Joe Wilson shouted "You lie!" during Obama's key speech on healthcare reform in Congress, after anti-government demonstrations over health that have been almost exclusively white, and after the increasingly aggressive tone on rightwing talk shows.

Blog sites in the US attracted an unusually high volume of traffic today in the aftermath of Carter's claims and highlighted the rawness of the divide.

Carter, interviewed by NBC to mark his 85th birthday, said: "I live in the south, and I've seen the south come a long way, and I've seen the rest of the country that shared the south's attitude toward minority groups at that time, particularly African Americans.

"And that racism inclination still exists. And I think it's bubbled up to the surface because of the belief among many white people, not just in the south but around the country, that African Americans are not qualified to lead this great country. It's an abominable circumstance, and it grieves me and concerns me very deeply."

The Associated Press reported that Carter, when asked at a public meeting about Wilson's jibe, said: "I think it's based on racism."

The White House, fighting to put out one political fire after another raised by Republicans and rightwing commentators, is hunting for a strategy to counter what it regards as bogus claims about health and other issues. It has strenuously avoided making race an issue and will not regard Carter's intervention as helpful.

Robert Gibbs, the White House spokesman, at the weekend played down suggestions that healthcare opponents were racially motivated. When, in July, Obama described as "stupid" a police arrest of a black Harvard professor, the White House saw it as an unfortunate diversion from its push on healthcare reform.

Michael Steele, the African-American chairman of the Republican national committee, said that playing the race card was a pathetic distraction by the Democrats to shift attention away from his healthcare plan. Injecting race into the debate divides rather than unites Americans, he said.

"Characterising Americans' disapproval of president Obama's policies as being based on race is an outrage and a troubling sign about the lengths Democrats will go to disparage all who disagree with them," Steele said. "Playing the race card shows that Democrats are willing to deal from the bottom of the deck."

Wilson's son, Alan, an Iraq veteran running for office in South Carolina, denied his father's shout of "You lie" was racially motivated. "There is not a racist bone in my dad's body," Wilson said. "He doesn't even laugh at distasteful jokes. I won't comment on former President Carter, because I don't know President Carter. But I know my dad, and it's just not in him.

"People can disagree - and appropriately disagree - on issues of substance, but when they make the jump to race it's absolutely ludicrous. My brothers and I were raised by our parents to respect everyone regardless of background or race."

The House on Tuesday voted to rebuke Wilson for his outburst in Congress.

The Southern Poverty Law Centre, one of the main groups in the US tracking hate groups, expressed support for Carter. Mark Potok, the director of the team investigating hate groups, said: "I think what President Carter said is precisely what is going on. I am not saying that everyone involved in opposing healthcare reform is a Klansman in disguise, but it is the elephant in the room."

His group has noted an increase in the number of hate groups, plots and racist incidents linked to Obama since he accepted the Democratic nomination to run for president last year.

Carter's remarks came after concerns expressed by other Democrats. The Congressman Henry Johnson said in a television interview on Tuesday: "I guess we'll probably have folks putting on white hoods and white uniforms again and riding through the countryside."

A potentially incendiary element was introduced when a video was displayed on many websites showing a 17-year-old white boy being beaten up by black teenagers on a bus in Belleville, Illinois. The video was displayed today even though the police said they did not believe the attack was racially motivated.

Tomorrow's Russian newspapers are therefore likely to be triumphalist in tone. "See, we were right to give the Americans a hard time on this" will be the line.

The climb-down undoubtedly does represent a significant strategic victory for the Kremlin. It also gives substance to Washington's so far woolly "reset" of relations with Russia, and will go a long way to soothe wounded Russian egosMoscow's biggest complaint about the Bush administration was that it did not take Russia or Russian strategic interests seriously. There is nothing Russians hate more than to think that their old Cold War adversary is not giving them the respect they believe they are due. This therefore will be held up as proof to ordinary Russians that Russia is once again a serious player on the world stage. It will become part of the "Russia rises from its knees" narrative so beloved of Kremlin spin doctors in the blink of an eye.

The Kremlin is not known for missing opportunities to pat itself on the back and this particular propaganda coup has been served up on a plate with all the trimmings. The crowing could be loud. The reflected glory will go to Vladimir Putin. The prime minister has been the missile shield's most vocal and high profile opponent, drawing on some of his famously fiery rhetoric to reject the US plan. This news will serve to bolster his already stellar popularity ratings, cementing his position as Russia's most powerful politician and heavyweight international statesman.

Russia's diplomatic elite will see it as a vindication of Moscow's publicly uncompromising stance on the issue.

Russia effectively staked its entire bilateral relationship with the US on the dispute in a high stakes game of poker that appears to have paid off. At a time when Moscow obviously needs to be more flexible itself, there must be concerns that it will be tempted to resort to the same successful hardball tactics again.

In Eastern Europe, there is likely to be real anxiety and soul-searching.

Many politicians in the missile shield's putative host countries – Poland and the Czech Republic – will undoubtedly feel jilted and let down by Washington. Former Soviet bloc countries had already begun to voice concerns that Washington's vaunted reset of relations with Moscow would come at their expense. For many, this move is likely to be seen as a disappointing confirmation of that. Washington could be busy mending fences and reassuring some of is staunchest European allies about its future intentions for months to come.

The big question now though is what if anything is Russia ready to do in return? Washington has a meaty wish list. It wants Russia to back tough sanctions against Iran to curb the Islamic Republic's nuclear alleged ambitions. It would also like Russia to make deep cuts in its own nuclear arsenal when it comes to renegotiating a key arms control treaty due to expire in December.

And last, but not least, it wants Russia's continued cooperation in helping Washington keep its troops in Afghanistan well supplied. Iran will be the toughest issue to crack. The Russian government has so far appeared split on the sanctions issue with Mr Putin strongly opposing the idea and President Dmitry Medvedev apparently remaining open to such a demarche.

Will the Russians be magnanimous in victory? Or will they, as the foreign minister Sergei Lavrov has said in the past, choose to frame the decision as an overdue correction of a Bush era mistake rather than as a real concession that requires reciprocity.

DENVER—A man under investigation in a terrorism probe in New York and Denver has indicated he is associated with al-Qaida and played a key role in a planned terror attack, a senior U.S. intelligence official said Friday.

Najibullah Zazi's attorney says he has never met with al-Qaida operatives and isn't involved in terrorism. Zazi completed a third day of questioning by FBI agents in Denver Friday but was not under arrest. More questioning was expected Saturday.

The intelligence official in Washington told The Associated Press that Zazi has indicated that he is directly linked with al-Qaida. The official, who spoke on condition of anonymity in order to discuss intelligence matters, said Zazi played a crucial role in an intended terrorist attack but that it was not immediately clear what the targets were.

The official went on to say that the plot was being directed from outside the United States.

Zazi has undergone hours of questioning this week, and his apartment and his uncle and aunt's home in suburban Denver have been searched.

Authorities have not said what they found and have made no public statements on the investigation.

Zazi hasn't been arrested, and his attorney, Arthur Folsom, says he doesn't expect him to be.

Another official familiar with the investigation told the AP on Thursday that Zazi had contact with a known al-Qaida associate. The official, who spoke on condition of anonymity because the investigation is ongoing, would not provide details on the location or nature of the encounter.

The official said agents have been monitoring Zazi and four others in Colorado as part of a terrorism investigation.

FBI agents in Denver questioned Zazi's father, Mohammed Zazi, on Friday about his son's background, said attorney Armstrong Graham.

Asked by reporters if his son was frightened, Mohammed Zazi said: "If you don't have anything, why would you be scared?" He refused to answer more questions.

FBI spokeswoman Kathy Wright said she couldn't comment. It wasn't immediately known whether Mohammed Zazi was one of the four others in Colorado being monitored by the FBI.

Najibullah Zazi's attorney, Arthur Folsom, says his client has never met with al-Qaida operatives and isn't involved in terrorism.

"He's simply somebody who was in the wrong place at the wrong time," Folsom said Thursday.

Folsom told The Denver Post the agents aren't repeating questions to Zazi but are asking different things.

"They are going through things -- the best I can describe it is chronologically. Covering all the bases," Folsom said.

U.S. Attorney General Eric Holder insisted Friday there was no immediate danger.

"There are no imminent threats, on the basis of what we have uncovered," Holder told reporters in Minneapolis. "The FBI is working this case around the clock in both cities and in other parts of the country. And we will make sure that if there are crimes that were committed that they will be charged and people will be held accountable."Continued...

The debate over health care reform -- already sidetracked and nearly derailed by a nationwide taxpayer revolt and deep divisions within the Democratic Party -- now is mired in charges of racism.

Former President Jimmy Carter fanned the racial flames Tuesday when he branded as racist Rep. Joe Wilson's outburst -- and any vocal opposition to President Obama's policies.

"I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he's African American," Carter said in an interview with NBC.

It came hours after a member of the Congressional Black Caucus took to the floor of the House and suggested Wilson's comments would instigate racism and help revive the Klu Klux Klan.

"I guess we'll probably have folks putting on white hoods and white uniforms again and riding through the countryside, intimidating people," Rep. Hank Johnson, D-Ga., said.

But in the end, does playing the race card translate into anyone's political gain?

"What Democrats are trying to do is shame white independents, who voted for President Obama in 2008 but are now uneasy about his policies, into supporting these policies to prove they are not racist," said Republican pollster and strategist David E. Johnson, who worked on Bob Dole's 1988 presidential campaign.

But Democratic strategist Jehmu Greene told FOXNews.com that "shadowy right-wing groups" are the ones using the race card as way to scare white voters.

"No one wants to be called a racist," she said. "These right-wing groups are convincing people that Democrats and anyone who supports Obama will be called a racist if they speak out" in opposition. "They are trying to draw a racial line in the sand.

"They are playing the race card to oppose Obama's policies by preemptively saying that he is playing the race card."

White House spokesman Robert Gibbs said Wednesday that the president does not believe the criticism of his policies are based on the color of his skin.

In the latest Rasmussen poll, only 12 percent of voters believe that most opponents of Obama's health care plan are racist, while 67 percent disagree and 21 percent are not sure.

Yet that hasn't stopped some from making those charges, like New York Times op-ed columnist Maureen Dowd who wrote on Sunday that Wilson implied the word "boy" in his outburst. And then there's Carter.

Republican National Committee Chairman Michael Steele fired back on Wednesday, saying Carter is "plain wrong" and calling the ex-president "ignorant." He also said the charge has destructive implications.

"I think it colors, if you look, this debate on health care, in a very unfortunate way," Steele said. "It diminishes real instances of racism that still exists in this country."

Steele called on Obama to "shut this part of the conversation down."

"If we're going to be having a conversation on health care and energy policy, we do not want to be tainted by race," he said. "The president has an opportunity to correct former President Carter and to move us beyond this particular ugly spot."

Johnson, the Republican strategist, told FOXNews.com that Democrats have been using the "shame tactic" since President Lyndon Johnson effectively employed it in 1964 against Republican presidential candidate Barry Goldwater. He said Carter found success with the same tactic against President Gerald Ford in 1976, but it backfired on him in 1980 when he lost to Ronald Reagan.

Traditionally, the tactic fails, Johnson said, and Democrats are using it now at their peril.

"I think it's going to solidify more opposition to the health care debate because it's like pouring gasoline on fire," he said, adding that Democrats have already dismissed the town hall protesters during the congressional August recess as Nazis and now they're pulling the race card. "That's the bottom of the barrel."

That, he said, could lead to the Democrats losing control of Congress and ultimately the White House. Asked why Democrats would employ a tactic with a track record of failure, Johnson said, "It doesn't make sense. But they really don't have anything left in their arsenal."

Greene, the Democratic strategist, said she doesn't believe racism is the driving factor behind opposition to health care reform.

"I believe that there is a lot of organizing, a lot of money, a lot of marketing behind trying to create a race war to help defeat Obama's policies," she said.

And the losers, she said, are the American people.

"To create hate in people who feel they are being attacked because of their race is disastrous for democracy," she said, adding that both Republicans and Democrats will shore up their base of support as a result of the race controversy.

"This is going to drive more independents and less active voters out of the process because of how polarized it has become," she said.

Vladimir Putin could be forgiven for having a celebratory shot of vodka with breakfast this morning at news that President Obama plans to abandon America’s missile defence shield in Eastern Europe.

His implacable opposition to the project has paid off, leaving the Kremlin emboldened in its drive to re-establish a strategic “sphere of privileged interests” over Russia’s former Soviet satellites.

By trading the loyalty of Poland and the Czech Republic to satisfy Russia’s security concerns, the United States is signalling that it no longer contests Moscow’s right to assert its interests in Eastern Europe.

Ukraine and Georgia’s chances of entering Nato over Russian objections have diminished further. The timing is disastrous for Ukraine in particular, given the Kremlin’s determination to reverse the pro-Western Orange Revolution and ensure victory for a pro-Russian candidate at presidential elections in January.
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The Baltic States, already in Nato, will be feeling a chill as they ponder an even more assertive Russia. Estonia, Latvia and Lithuania have been among the Kremlin’s most vocal critics but Nato’s new Secretary General Anders Fogh Rasmussen has declared a “true strategic partnership” with Russia his top priority.

The Bush Administration delighted in emphasising relations with the “new Europe” of former Soviet bloc countries, often at the expense of recalcitrant “old Europe” of Germany and France on foreign policy.

Mr Obama has shown that the US is no longer playing that game. He wants Russian help on Afghanistan and Iran and is leaving Europe to resolve its own relationship with Moscow on everything from energy security to historical grievances.

The Kremlin can barely believe its good fortune. Mr Obama has pressed the “reset” button to improve relations without obtaining anything more than permission for US aircraft to cross Russian airspace on resupply operations for troops in Afghanistan.

That was the most substantive outcome of the Moscow summit with President Medvedev in July. A treaty to replace the START II agreement in December may now be a little more generous in cutting the stockpiles of nuclear missiles held by the US and Russia.

But the big question remains over what to do about Iran’s nuclear ambitions. Russia has shown no inclination to budge on its refusal to support further sanctions against Tehran, nor has it cancelled a contract to sell S-300 air-defence missiles to the Islamic republic.

A senior Israeli MP, Zeev Elkin, warned in an interview with Russia’s Kommersant today that Tel Aviv could be forced into a pre-emptive military strike against Iran’s nuclear facilities if there was any sign that the Kremlin was about to sanction delivery of S-300s.

The mystery cloaking the alleged hijacking of the cargo ship Arctic Sea highlights the risk of conflict being triggered by freelance operations to deliver weapons.

Russia has argued consistently that Iran presents no current threat and that the missile shield, consisting of a radar in the Czech Republic and 10 interceptor missiles in Poland, compromised its own national security. By cancelling the project, Mr Obama appears to have accepted both arguments.

He may be calculating that this will encourage President Medvedev to support tougher action against Iran’s nuclear programme when he visits the US next week for the G20 summit and the United Nations General Assembly. But Mr Obama learnt to his cost in July that it is Mr Putin, and not Mr Medvedev, who remains in charge in Moscow.

In fact, Moscow may become more intransigent, arguing that Washington itself no longer takes the threat as seriously as it did by cancelling the missile-defence shield. Any such argument would only harden Israel’s determination to act.

Some analysts in Russia have begun cynically to ask whether the Kremlin wants to see a war in Iran, arguing that this would send oil prices soaring and replenish state coffers emptied out by the economic crisis.

The Kremlin has grown increasingly anti-Western in tone in recent years and continues to blame America for the financial crisis that has forced Russia to spend its vast reserves to stave off economic collapse. Do hard-liners regard a conflict in Iran as payback for the costs of American economic excess?

For Mr Putin, the lesson of today’s decision is clear. Intransigence pays dividends because the US and the European Union lack the patience or determination to face Moscow down. That is a lesson that send alarm bells ringing in the corridors of power of Russia’s former Soviet dominions.

It seemed as if Iran’s opposition movement had evaporated during the past two months. Nothing could be further from the truth, as today’s huge protests showed. All the opposition lacked was the right opportunity, and Quds Day provided it.

The regime and its security forces could hardly cancel Iran’s traditional annual rally in support of the Palestinian cause, so opposition supporters simply hijacked it.

They turned out in tens - perhaps hundreds - of thousands to express solidarity with the oppressed: not the Palestinians, but themselves. They were protesting not just at the regime’s alleged theft of last June’s presidential election, but at the subsequent killing, torturing and raping of its opponents.

“They needed an opportunity where they could come out in large numbers and outmanouvre the regime, and this provided the ideal opportunity,” said an Iranian analyst. “The whole official day turned into a day of protests against the regime.”
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In recent weeks the regime has quietly cancelled other public events like the commemoration of Imam Ali’s death at the mausoleum of Ayatollah Ruhollah Khomeini, the founder of the Islamic Republic. During August it moved three big football matches out of Tehran, or had them played behind closed doors.

But with the summer ending its problems will mount. The football season has begun in earnest. Students, who are traditionally in the vanguard of Iranian protest movements, are pouring back into the capital ahead of the start of the new academic year next week.

There are rumours that the regime may shut some universities down for a term. It is said to be purging suspect teachers and professors, and increasing the number of basiji - pro-government Islamic volunteers - in schools and colleges.

It is a measure of the regime’s legitimacy that any large gathering of the citizenry that allegedly elected it now threatens its survival.

America's European allies are unlikely to commit significantly more combat troops to Afghanistan despite months of pressure from the US and Britain, officials and independent commentators said today.

The reluctance of European leaders, including Gordon Brown, to agree to deploy more of their troops, has angered Washington. However, it has come as no surprise. General Stanley McChrystal, the top US and Nato commander in Afghanistan, will have taken this into account in his major review of strategy in Afghanistan, which is now being scrutinised in the White House and at Nato headquarters in Brussels.

"I don't know where any extra troops will come from," said Alastair Cameron, head of the European security programme at the Royal United Services Institute.

He said the Europeans were keen to press for a more effective commitment to Afghanistan by the international community – a reference to the UN and other agencies, and to their potential role in developing civil authority, including an effective police force.

British defence chiefs have been pressing Brown to deploy an extra 2,000 UK troops to southern Afghanistan on top of the 9,000-plus already there. This figure includes 700 sent to provide extra security for the Afghan presidential elections last month who will now stay for the foreseeable future.

The pressure on Britain – and the US – to increase the number of troops in Afghanistan will increase if Canada carries out its plan to pull out its 2,800 troops from Kandahar province over the next 18 months.

The future of Germany's 4,000 troops in northern Afghanistan will depend on the result of the country's general election later this month. Spain could commit a further 200 troops, adding to the 1,200 deployed there, Madrid said last week.

Analysts and officials said one response to the deteriorating security situation was to deploy special forces and appropriate equipment. Bob Ainsworth, the British defence secretary, is expected to stress in a speech at King's College Londontomorrow that by next spring the UK will have doubled the number of helicopters in Afghanistan compared with November 2006.

Not all the extra troops Barack Obama has committed have yet been deployed to southern Afghanistan.

Ivo Daalder, the US ambassador to Nato, put a diplomatic face on the situation and the allies' contributions in an address on Monday to the London-based thinktank Chatham House.

Of the 100,000 foreign forces in Afghanistan nearly 40% had been provided by countries other than the US, he said.

Daalder said he was "surprised by the resilience and deep-seated support by the allies". He added: "Every Nato country is committed to sustain the course."

He also said the US wanted to see "visible progress" in Afghanistan within the next 12 to 18 months.

The unemployment rate for the District rose dramatically to 11.1 percent in August, the highest level since July 1983, but fell for the second consecutive month in Virginia and stabilized in Maryland, according to government data released Friday.

Some employment experts attributed the disparity to the higher proportion in the District of undereducated employees in low-wage jobs that are more vulnerable to cuts. Meanwhile, in Virginia and Maryland, the labor market is showing signs of a turnaround, evidenced by a slowing of layoffs and a surge of jobs created by stimulus dollars.

The District's unemployment rate jumped to 11.1 percent in August from 10.6 percent in July, according to the Bureau of Labor Statistics. About 36,000 District residents were jobless in August. Mayor Adrian M. Fenty (D) announced new programs Friday aimed at providing 20 more weeks of unemployment benefits to people whose federal aid has run out and preparing them for new jobs.

"There are families who are struggling trying to find work in these very difficult economic times," Fenty said in a statement. "This additional assistance will help alleviate some of the burdens felt by many households in the District. The new programs also provide opportunities for our unemployed workers to sharpen their skills, learn a new trade, or go back to school and prepare to re-enter the job market."

The unemployment level in the District for several months has surpassed the national rate, now at 9.7 percent, while Maryland and Virginia are below it.

Maryland's rate has remained at 7.2 percent since June. The Labor Department on Friday adjusted the state's July rate from 7.3 percent to 7.2 percent.

In Virginia, the rate dropped to 6.5 percent in August from 6.9 percent in July.
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The three jurisdictions' share of the billions of dollars in federal stimulus money has finally materialized and resulted in road construction jobs, according to Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic and policy consulting firm. Recent national data, he said, show "that Maryland and Virginia have more jobs per job seeker than any other state in the country."

Unemployment rose in 27 states and the District, but fell in 16 states and remained unchanged in seven others. Michigan has the highest jobless rate, 15.2 percent, and North Dakota has the lowest, 4.3 percent. While Federal Reserve Chairman Ben S. Bernanke has said the recession may be over, many economists agree that hiring will be slow and that the jobless rate may not substantially drop for at least a year.

From July to August, the District lost 9,100 jobs, including 4,800 in the private sector and 4,300 in the public sector, according to the city's Department of Employment Services. Professional and business services lost 2,100 jobs; hospitality and leisure, 800; educational and health services, 500; the federal government, 200; and the D.C. government, 4,100, mainly participants in the summer youth job program.

"Disproportionately, the jobs held by D.C. residents are not stable jobs in the federal government, contracting or in health services, but rather in segments subject to the economic downturn -- in restaurants, retail and commercial construction," Basu said.

Maryland and Virginia officials said they think the data demonstrate that their states' unemployment rates have bottomed out.

"We're stabilizing," said Andy Moser, assistant secretary of the Maryland Department of Labor, Licensing and Regulation. "We're not on a downward spiral everyone was on last spring, last winter and last fall."

William F. Mezger, chief economist for the Virginia Employment Commission, said job claims were down and the pace of layoffs decreased in August. "We had over 7 percent unemployment in June," he said. "We probably won't see it again in '09 the way it looks now."

“Jennifer’s Body,” a bloody high school demonic-possession serial-killer comedy written by Diablo Cody, directed by Karyn Kusama and starring Megan Fox in the title role, is an unholy mess. I mean that as a compliment. Yes, the movie’s gory set pieces are executed with more carnivorous glee than formal discipline, and its story is as full of holes as some of its disemboweled victims. But coherence has never been a significant criterion for horror movies. If it were, we could forget about Dario Argento and Brian De Palma, half of Hitchcock and most of the entries in the “Friday the 13th” series. And though it is too soon to install “Jennifer’s Body” in that blood-soaked pantheon, the movie deserves — and is likely to win — a devoted cult following, despite its flaws.

These are mitigated by a sensibility that mixes playful pop-culture ingenuity with a healthy shot of feminist anger. Ms. Cody and Ms. Kusama take up a theme shared by slasher films and teenage comedies — that queasy, panicky fascination with female sexuality that we all know and sublimate — and turn it inside out. This is not a simple reversal of perspective; the girl’s point of view has frequently been explored in both maniac-on-the-loose thrillers and homeroom-to-prom-night romantic comedies. “Jennifer’s Body” goes further, taking the complication and confusion of being a young woman as its central problem and operating principle, the soil from which it harvests a tangle of unruly metaphors, mixed emotions, crazy jokes and ambivalent insights.

Jennifer, chilly, dark-haired and beautiful, is both the victim of male violence and a monster of indiscriminate vengeance, a ravening demon and an object of lust and longing. But always an object. The title of the movie is not “Jennifer’s Soul,” and from every angle she is a fantasy, a cipher, a figure in someone else’s fevered imagination. The inevitable critical sneering at Ms. Fox’s acting abilities will miss exactly this point. Her blunt, blank affect belongs to the character, not the performer, and is part of the film’s calculated tease. Ms. Kusama puts Ms. Fox’s lithe physique right in your face and then demands to know what you think you’re looking at.

Before a fateful run-in with an evil indie-rock band (led by Adam Brody) turns her into a bloodthirsty, bile-spewing succubus, Jennifer is the embodiment of a series of high school clichés that almost entirely obscure her inner life. She’s a mean girl, a bad girl, a popular girl, a dream girl — the one every other girl envies and every boy wants. But she is not the heroine of the movie, and it is not her predicament that makes it so interesting and original.

The real girl in the middle of this bloodbath — which overtakes a small town in Minnesota called Devil’s Kettle — is Needy, short for Anita. Played by Amanda Seyfried, she is Jennifer’s best friend, and if Ms. Fox brazenly incarnates teenage girl clichés, Ms. Seyfried slyly subverts them. Needy is sensible, studious and bespectacled, but hardly a nerd. She has a good-natured boyfriend named Chip (Johnny Simmons), and she seems generally well adjusted: curious about sex but not obsessed with it, adventurous but not reckless, prudent but not timid. She is also tough, kind and funny.

Needy is also driven past bewilderment to the brink of madness by what happens to Jennifer, who lures one young man after another to his doom. The jock, the goth and others are so bedazzled by her attention that they are blind to her murderous intentions. She has been similarly fooled and abused, but “Jennifer’s Body” is not only a fantasy of revenge against the predatory male sex, though the ultimate enactment of that revenge is awfully satisfying. The antagonism and attraction between boys and girls is a relatively straightforward (if, in this case, grisly) matter; the real terror, the stuff of Needy’s nightmares, lies in the snares and shadows of female friendship.

The relationship between Needy and Jennifer is rivalrous, sisterly, undermining, sadomasochistic, treacherous and tender. “Hell,” Needy asserts early on, “is a teenage girl.” If Jean-Paul Sartre were in the databank of allusions Ms. Cody has supplied her with, she might have specified that hell is other teenage girls. The inferno consumes everything around it, very nearly including the movie itself.

The palette is dark and sanguinary. The dialogue is an unstable mélange of screeches and howls and the compulsively savvy, provincial-hipster babble that is for Ms. Cody what terse Chicago indirection is for David Mamet and long-winded analysis of cultural trivia is for Quentin Tarantino.

“Cheese and fries!” Needy exclaims, though at other times she is happy to utter all manner of blasphemy. “Move on dot org,” Jennifer says, perhaps attempting to top an already legendary nonsensical non sequitur from Ms. Cody’s “Juno” screenplay: “Honest to blog.”

Honestly, though, “Juno,” mannered and self-conscious as it was, gave us, in the person of Ellen Page, a young heroine with a sharp tongue, a good heart and questionable judgment — a character who was smart, surprising and, in the end, hard to resist. Ms. Kusama’s first film, “Girlfight,” did something similar with its bruising, bruised protagonist, played by Michelle Rodriguez. And Needy, our Virgil in Ms. Cody and Ms. Kusama’s tour of teenage hell, so nimbly personified by Ms. Seyfried, belongs in this company. She’s the main reason to see “Jennifer’s Body.”

House Republicans succeeded Thursday in eliminating federal funding to ACORN, the community organizing group that has come under heavy fire in the wake of damaging undercover videos that purport to show counselors giving advice on tax fraud to a "pimp" and "prostitute."

The House voted 345-75 to strike ACORN funding from a student aid bill with two voting present.

The Defund ACORN Act prohibits any "federal contract grant, cooperative agreement or any other form of agreement (including a memorandum of understanding" from being awarded to or entered into with the group. It also prohibits federal funds "in any other form" from being provided.

Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee, suggested the vote is essentially symbolic because the student aid bill did not actually provide any funding to ACORN.

However, the language refers to all federal contracts so it applies to any federal money.

Rep. Darrell Issa, R-Calif., who introduced the "motion to recommit" attached to the Student Aid and Fiscal Responsibility Act of 2009, said the decision followed a similar Senate vote on Monday and the Census Bureau's decision last week to cut ties to the group.

"The battle, however, to deny ACORN federal funding is not over until the president signs the bill into law. ACORN gave significant support to Democrats and Americans must remain vigilant to avoid backtracking or efforts to water down prohibitions denying Federal funds to this corrupt organization," said

House Minority Whip Eric Cantor, R-Va., applauded the vote.

"ACORN has violated serious federal laws, and today, the House voted to ensure that taxpayer dollars would no longer be used to fund this corrupt organization," he said in a written statement. "All federal ties should be severed with ACORN, and the FBI should investigate its activity.

"This united Republican effort to defund ACORN is a victory for the rule of law and taxpayers across the country."

Democrats offered overwhelming support to the ACORN measure because they didn't want to derail the student aid bill, senior House sources told FOX News. And the measure still has to be approved by the Senate -- a process that will be complicated by the differences in its bill that only blocked HUD from funding ACORN.

A spokeswoman for Miller said after the vote that the ACORN measure didn't affect the student aid bill in any way.

"The important thing is the House was able to move quickly forward in voting to overwhelmingly pass legislation that puts the interests of students, families and taxpayers before lenders and banks," spokeswoman Rachel Racusen said in a written statement.

Whether symbolic or not, the vote gives Republicans more momentum as they continue to keep the pressure on ACORN, which is on its heels. It also gave Republicans a move to force Democrats, who control the House, to vote on an issue that may leave some of them vulnerable in next year's mid-term elections.

Republicans now have the firepower to run ads highlighting this vote, saying: "This lawmaker voted against defunding ACORN." The 75 lawmakers who voted "no" and two who voted "present" were all Democrats.

Click here to see how your representative voted.

But at least one Democrat who did vote to strip funding, Rep. Zack Space of Ohio, said he was "outraged" by a series of videos taken by two undercover filmmakers dressed up as a pimp and a prostitute in order to get advice at local ACORN establishments on how to set up a brothel in a way that allowed them to pay taxes and get federal grants for housing.

"I am outraged at the actions of ACORN's employees and believe they should be penalized to the full extent of the law," said Space. "Our government must be vigilant in ensuring that organizations that are found to act fraudulently do not receive taxpayer dollars."