srael’s Prime Minister Binyamin Netanyahu will come under concerted pressure to fall into line with Barack Obama’s plans for bringing peace to the Middle East when he meets with Washington’s special envoy in London today.

Better relations with Arab neighbours and a tougher line on Iran are the lures that George Mitchell will hold out to Mr Netanyahu in a bid to force a compromise over continued settlement activity.

American officials confirmed earlier this month that their new peace plan would be unveiled within weeks, possibly as soon as next month’s UN General Assembly meeting in New York.

The threat posed by Iran’s nuclear ambitions has brought a new momentum to the process with Arab states more ready than ever to make concessions to Israel over issues like recognition in return for global co-operation against the regime in Tehran. What remains to be seen is how far Israel is prepared to go to meet the US on demands for a halt in settlement activity which the Palestinians have made a precondition for talks.

Mr Netanyahu said yesterday he would seek a compromise allowing some limited expansion to continue and exclude Jerusalem from the deal.

At a press conference with Gordon Brown following their meeting at Downing Street, Mr Netanyahu said: “What we're seeking to achieve with the United States in the talks we've conducted, and will conduct tomorrow and will conduct after tomorrow is to find a bridging formula that will enable us to at once launch a process but enable those to continue living normal lives.”

“Normal lives” is the phrase Israeli representatives use to refer to construction that allows for the growth of settler families among the West Bank communities, where 300,000 Jewish Israelis live on occupied Palestinian land.

Mr Brown said he had made it clear to Mr Netanyahu that settlement activity was a barrier to Middle East peace. But he added that he was “more optimistic than before” about the chances for the peace process. Mr Netanyahu is under pressure from right wing allies at home not to be seen to be caving to international pressure over the settlements.

Space shuttle Discovery is preparing to launch on a mission to deliver new supplies and science equipment to the International Space Station.

The Discovery crew is set to launch shortly early Tuesday to deliver nearly 8,000 kilograms of equipment to the International Space Station. NASA engineers cleared the shuttle to fly on Sunday, after deciding there were no technical concerns to delay launch from Kennedy Space Center in Florida.

Shuttle weather officer Kathy Winters said the skies should be clear for the evening launch, but storms could delay the delicate process of filling the shuttle's external fuel tanks.

"Overall the weather is looking good for launch, we just have to get there. So tanking weather is what we are watching closely. By the time we get to launch there is just a 20 percent chance of KSC [Kennedy Space Center] weather prohibiting launch," she said.

Storms and lighting pose a threat to the shuttle while it is on the launch pad, especially during the rainy summer months. The concerns are greater when loading fuel, because engineers are pumping volatile liquid hydrogen into the shuttle's tanks.

MIssion management chair Mike Moses said the launch area at Kennedy space center took a direct lightning strike last Saturday.

"We did affect some of the camera systems, the ground servicing equipment, and some leak detectors. So we definitely did damage from that lightning event. Those systems have all been replaced and everything is fine. But that shows that lightning is a very serious thing," he said.

Moses added that one problem that engineers continue to watch is foam insulation falling off the shuttle's external fuel tanks during launch. The issue of falling foam has plagued several recent shuttle flights, and is blamed for causing damage that led to the break-up of shuttle Columbia in 2003.

Moses said the foam loss does pose a small risk of damaging shuttle Discovery when it takes off early Tuesday.

A NASA image of the International Space Station as seen from Space Shuttle Endeavor (File)
A NASA image of the International Space Station as seen from Space Shuttle Endeavor (File)
"But we felt that risk was acceptable enough and the processes to control that risk are robust enough that we are ok to fly. We need to keep improving that tank so it does not happen again," he added.

The Discovery crew is expected to spend 13 days in orbit, and astronauts will conduct three space walks after the orbiter's rendezvous with the space station. The team will deliver a new freezer and other equipment for future experiments in space, as well as a new treadmill named after U.S. comedian Stephen Colbert.

NEW YORK (Reuters) - Bank of America Corp and the top U.S. securities regulator sought to persuade a judge to approve their $33 million settlement of a civil lawsuit over the lack of disclosure of billions of dollars of bonuses at Merrill Lynch & Co.

A settlement would address part of what has become one of the hottest controversies of the global credit crisis.

In a filing on Monday, Bank of America told Judge Jed Rakoff of Manhattan federal court that it did not mislead shareholders about its approval of up to $5.8 billion of bonuses, saying it was "widely understood" that Merrill would pay out billions.

Meanwhile, the U.S. Securities and Exchange Commission said that the largest U.S. bank was wrong not to tell shareholders about the payouts, but that a settlement strikes a fair balance between deterrence and not punishing shareholders further.

"Reasonable people can debate whether the penalty should be higher or lower, but it is squarely within an acceptable range," the SEC said.

Rakoff rejected the settlement on Aug 10, demanding many more details about who knew what and when about the bonuses, including the decision not to reveal what would become $3.6 billion of bonus awards. The merger closed on Jan 1.

"This isn't about money anymore, this is about the truth," said Tony Plath, an associate finance professor at the University of North Carolina at Charlotte. "If the bank really believed it could defend itself and win, why cut a $33 million check to make it go away? This isn't a parking ticket."

CEOS INTERVIEWED

In its filing, the SEC said it interviewed 11 top Bank of America and Merrill executives about the merger, including the respective chief executives, Kenneth Lewis and John Thain.

It said Lewis, Thain, and the respective executives who led the merger talks, Bank of America's Gregory Curl and Merrill's Gregory Fleming, all said the preparation of the public proxy statement, including a decision not to attach a schedule discussing bonuses, was made by lawyers on both sides.

Even so, Bank of America maintained in its filing that it was clear from Merrill's public disclosures and media reports that Merrill would award billions of dollars of bonuses, despite a full-year loss that would reach $27.6 billion.

That loss would prompt Charlotte, North Carolina-based Bank of America to accept an additional $20 billion of federal bailout money, for a total of $45 billion taken from the Troubled Asset Relief Program.

The bonuses have been the focus of Congressional hearings and a probe by New York Attorney General Andrew Cuomo.

Fallout from them have added to pressure on Lewis, a four-decade veteran of Bank of America who has since April lost his job as chairman and more than half of his long-supportive board of directors.

Bank of America's shares are down 49 percent since the merger was announced last Sept 15, at the height of the global banking crisis. Continued...

The Obama administration has declared the wildly popular 'Cash for Clunkers' program a success, saying it has revived the country's ailing auto industry and taken polluting vehicles off the road.

But the data shows that the program, which ends Monday, has apparently benefited foreign automakers more than their U.S. counterparts.

Smaller, more fuel efficient vehicles like the Toyota Corolla are top sellers, while buyers are trading in SUV's like the Ford Explorer to be scrapped, turning the already dwindling number of American car owners into the growing ranks of foreign car drivers.

Toyota vehicles accounted for 19.2 percent of the 489,269 sales, while General Motors had the second spot at 17.7 percent.

The Honda Civic was the second best-selling vehicle, followed by the Ford Focus in the third spot. Foreign cars occupied eight of the 10 spots on top-selling vehicle list. The Ford Explorer was the most traded-in vehicle under the program, with U.S. cars occupying all top 10 spots on the list.

Jonas Max-Ferris, a business analyst, told FOX News that domestic automakers did well because "they sold more cars than they would have without the program."

"But they didn't do as well as foreign car makers," he said, noting that Detroit's Big Three represent about 47 percent of U.S. car sales and only sold an estimated 42 percent under the program.

"They did a little worse than they normally would do…which means people were favoring Honda and Toyota primarily," he said. "And there's a reason for that. The program was basically geared around miles per gallon. It was not an incentive to buy U.S. cars. In many cases, the foreign car companies have better cars in those miles per gallon categories."

Car buyers have until Monday night to take advantage of the $3,500 or $4,500 incentives offered by the program, which as of Friday had used up $2 billion of the $3 billion Congress set aside for it.

Congress poured an additional $2 billion into the program when the original $1 billion ran dry in early August and as of Friday, nearly 490,000 vehicles have been sold through the program, data shows.

General Motors and Chrysler, fresh off government-led bankruptcies, have boosted production, along with Toyota, Ford and others. GM is rehiring more than 1,300 laid-off workers, Hyundai is bringing 3,000 workers back to an Alabama plant, and automakers are paying workers overtime to meet demand.

But many auto analysts questions whether the program will have a lasting impact, robbing sales from the final months of 2009 and 2010. A slight auto industry recovery in July and August could be offset by declining sales in September and October and wipe away the bump in consumer confidence.

"We've got inventories tight, prices going up, incentive activity dropping, new cars coming out in October at even higher prices," said Jeremy Anwyl, CEO of the auto Web site Edmunds.com. "There's not going to be much momentum that's going to drive sales to the levels that we've seen."

The Associated Press contributed to this report.

Preliminary results of last week’s Afghan presidential contest are expected to show today that President Karzai is heading for a comfortable first round victory, amid widespread allegations of electoral fraud.

But it could take several weeks before an official final result is declared because Dr Abdullah Abdullah and other opponents have filed more than 1,000 complaints, which must be investigated first.

The prospect of political limbo is raising concerns just as the US is trying to increase its civilian and military presence. US military commanders in Afghanistan were reported yesterday to have told Richard Holbrooke, the US special envoy for Afghanistan and Pakistan, that they needed more troops to defeat the Taleban.

The Independent Election Commission (IEC) said it was planning to release preliminary results from several provinces, covering roughly 10 per cent of the total vote, and hoped to have a national result in the first week of September. The results are rumoured to show that Mr Karzai is in the lead, having won about 70 per cent of the votes in the first batch.However, the figures do not become official until another body, the Electoral Complaints Commission (ECC), has processed all allegations and investigated the most serious ones.

The ECC said it had received 1,157 complaints as of last night and had categorised 54 of them as high priority. It expects to receive many more. Some of the worst complaints relate to the southern province of Helmand, where British forces launched Operation Panther’s Claw in June to help to prepare for the vote. Precise details of the complaints are not yet available, but The Times has discovered more serious discrepancies in figures being reported by election officials in Helmand.

Engineer Abdul Hadee, the local IEC chief, told The Times on Thursday that fewer than 50,000 people voted in Helmand. On Sunday, he raised that estimate to 110,000. Yesterday, he insisted that more than 150,000 people had voted, saying that the previous figures were based on incomplete information. Abdul Ahad Helmandwal, a local tribal elder and representative of Mr Karzai’s campaign, said that turnout in Helmand was 300,000 and most had voted for the President.

At least two presidential candidates say that Helmand was the site of some of the worst fraud – largely because poor security meant monitors could not visit many polling stations.

An aide to Dr Abdullah said he had filed 198 complaints. “There’s been big fraud in Helmand,” he said, accusing electoral officials there of doubling the real turnout figure. He said that figures compiled by his monitors showed Dr Abdullah leading with more than 1.5 million votes — roughly 57 per cent of those counted so far.

A spokesman for Ashraf Ghani, another candidate, said his team had filed 52 complaints, including one about large-scale ballot box stuffing in Lashkar Gah, the capital of Helmand.

“What we are happy about is that so many other candidates are also lodging complaints,” he said. “This is the only legal option we have — we don’t want our supporters on the streets.”

The Los Angeles county coroner has ruled Michael Jackson's death was caused by a lethal combination of powerful sedative drugs.

Conrad Murray, a cardiologist who treated Jackson for insomnia, told a Los Angeles police official that he had injected Jackson with propofol in the hours before his death on 25 June in a rented mansion in Los Angeles. The drug is an anaesthetic used during surgery, and is typically administered intravenously in a hospital setting.

In a sworn affidavit, Los Angeles detective Orlando Martinez said that Murray admitted to giving the 50-year-old singer a veritable cocktail of drugs to help him sleep the night before he died.

Murray had been Jackson's personal physician for about six weeks, and told investigators that another doctor had introduced Jackson to propofol, which investigators said the pop star obtained using several aliases.

Martinez said that the Los Angeles County chief coroner Dr Lakshmanan Sathyavagiswaran reported Jackson had a lethal level of propofol in his blood.

Murray told police he used it to help Jackson sleep, and that he worried Jackson had become addicted to it. He said he tried to wean Jackson off the drug, which Jackson called his "milk". Murray said Jackson had injection marks on his hands and feet.

Murray said he was monitoring Jackson's pulse and oxygen levels as he administered the sedatives during the night, and that Jackson remained awake despite several injections of drugs. Jackson requested and demanded an injection of propofol, Murray said.

Murray told investigators that about 10:30am on 25 June, Murray left Jackson for less than two minutes to use the restroom, and that Jackson was not breathing when he returned. Murray began CPR, injected more drugs, and another aide summoned help.

Federal drug enforcement agents were unable to find records of Murray's purchase of propofol and have sought medical records from a handful of other physicians who had treated the singer.

Martinez also stated that in April, Jackson offered to pay another physician any price to obtain propofol. The physician declined. Murray has gone into virtual hiding since Jackson's death. In his only public statement, he said in a video posted on YouTube that he had told the truth and "the truth will prevail".

BEIJING - CHINA will stick to its current macroeconomic policies because the economy, while doing better, is still not yet on a solid footing, Premier Wen Jiabao said on Monday.

In a statement on the government's website, www.gov.cn, Mr Wen said Beijing would ensure a sustainable flow of credit and a 'reasonably sufficient' provision of liquidity to support an economy that he said was facing fresh difficulties.

'We must clearly see that the foundations of the recovery are not stable, not solidified and not balanced. We cannot be blindly optimistic,' Mr Wen was cited as saying after a trip at the weekend to Zhejiang province. -- THOMSON REUTERS

The release of the Lockerbie bomber has not given "succour to terrorists", Gordon Brown's spokesman has said.

He acknowledged that the decision, made by the Scottish government, created "strong feelings" among relatives of those killed in the 1988 attack.

The prime minister has been criticised for refusing to comment on the release of terminally ill Abdelbaset Ali al-Megrahi on compassionate grounds.

But his spokesman said it remained a decision for the Scottish government.

Last week Scottish Justice Secretary Kenny MacAskill allowed Megrahi to be released after serving eight years of his life sentence for the bombing of a US-bound Pan Am flight, in which 270 people were killed.

'Very difficult'

There was fury from families of the victims and US politicians after Megrahi, who has prostate cancer, returned to his native Libya to huge celebrations.

Justice policy in Scotland is a devolved matter, meaning the Scottish - rather than the UK - government is in charge of it.

However, there has been some criticism that Mr Brown did not intervene to try to persuade Mr MacAskill against Megrahi's release, given the international implications. Asked about the message that the decision had sent out, Mr Brown's spokesman said: "I don't see how anyone can argue this has has given succour to terrorists."

Pressed over the possible damage to UK-US relations, the spokesman said: "Clearly the prime minister recognises this was a very difficult decision and was clearly an extremely sensitive one, and that there will be very strong feelings from the families."

Challenged over why Mr Brown would not comment, the spokesman repeatedly said that it was a matter for the Scottish justice secretary.

He said: "It would be wrong to reverse that and take a public decision after the decision. It was and remains a decision for the Scottish justice secretary."

He added: "He [the prime minister] found the scenes at Tripoli airport thoroughly distasteful and fully supports what the foreign secretary and Alistair Darling have said, and will continue to work with the Libyans to ensure that those things are not repeated."

Liberal Democrat leader Nick Clegg said: "Although the decision to release Megrahi was a Scottish one for which Gordon Brown was not personally responsible, the fallout puts the UK at the centre of an international storm.

"In these circumstances, it is absurd and damaging that the British prime minister simply remains silent in the hope that someone else will take the flak."

BBC political correspondent Norman Smith said Mr Brown would gain little from commenting on the issue, with the danger that he would upset the US government if he backed the release, or alienate the Libyan government if he criticised it.

THE worst of Influenza A (H1N1) in Singapore appears to be over. The number of people going to clinics because of the flu has fallen below the epidemic level - 16,655 - for the first time in weeks.The latest figures from the Ministry of Health show a 25 per cent dive in polyclinic attendances for upper respiratory tract infections - to 15,486 last week from 20,435 the week before. At the peak two weeks ago, the clinics treated 24,477 cases in a week.

In a normal week, the polyclinics see around 13,340 patients with coughs, colds, the flu or flare-ups of chronic illnesses such as asthma. They make up one in five of the 75,000 patients seen at polyclinics for all ailments every week.

Although the falling numbers could signal the end of the first wave of H1N1, a Health Ministry spokesman said the situation was being monitored. Surveillance data shows H1N1 cases still make up half of all people suffering flu-like symptoms.

The private clinic chain, Raffles Medical Group, has noticed a significant drop in the number of patients with flu-like symptoms.

Dr Wong Wei Mon, who runs a Raffles Medical clinic in Ang Mo Kio, said he was seeing 10 per cent to 20 per cent fewer cases and expected the numbers to fall further: 'You can really feel the difference now.' However, Dr Wong said: 'Nobody knows how the H1N1 situation is going to pan out.

'But with the haze making a comeback, respiratory diseases could still be around, even though flu cases might drop.'

National University Hospital's infectious diseases head Paul Ananth Tambyah had previously told The Straits Times that, going by other pandemics, the rate of infections could be expected to slow as more people became exposed to the virus and developed immunity to it.

He added that, with well-established tests available and the experience of having dealt with the first wave of infections, Singapore was prepared to face the second one as countries in the northern hemisphere entered the traditional winter flu season.

When the second wave does hit, doctors should know how to handle the patients they get.

"Cash for Clunkers" has generated a surge in car and truck sales, as well as a comparable increase in complaints about the program. But whether or not the program -- which is due to end at the end of the day today -- meets environmental goals of reducing gasoline consumption and greenhouse gas emissions has received less attention. "As an environmental program, Cash for Clunkers is basically overpaying for the environmental benefits," said Christopher Knittle, an economics professor at the University of California at Davis who analyzed the Cash for Clunkers impact on the environment.

It is yet another concern about a program that, despite its popularity and success, has been criticized from the beginning.

Cash for Clunkers or Complaints?

In late July, when the Car Allowance Rebate System or "CARS" began, surprising demand from consumers led to complaints that the initial $1 billion was not enough. After much debate, with some members of Congress worried that the goal of replacing gas guzzlers with high-mileage cars was not being met, an additional $2 billion was approved. Then there was grumbling about dwindling supplies of vehicles for sale. General Motors, Ford and other automakers responded by announcing they would increase production. Furthermore, the Transportation Department reassured consumers and dealers that purchased vehicles, even if they were not yet on the lot, would be eligible for the rebate.

Finally, several dealers moaned that it was taking the government too long to reimburse them. Under the program, an estimated total of 750,000 new cars will have been purchased by the end of the day today but some analysts have calculated that the government has paid dealers for less than 10 percent of the rebates due. To address the growing pile of dealer submissions, the Transportation Department has tripled the workforce processing the claims to nearly 1,200 (including staff from the press office). Early reports indicated that dealers submitted incomplete and inaccurate forms that required fixes to ensure that taxpayer dollars were not being wasted.

Despite the complaints, however, the program achieved the goal of stimulating car sales.

"It has been successful beyond anyone's imagination," said President Obama Thursday during an interview with radio talk show host Mike Smerconish.

J.D. Power and Associates estimated that total sales in August will surpass the one million mark for the first time in a year thanks in large part to the clunkers program. Edmunds.com estimated that August sales will be near 1.2 million.

In June, before CARS began, nearly 860,000 vehicles were sold.

"This is a wildly successful program," said Transportation Secretary Ray LaHood on ABCNews.com's "Top Line" late last week. "In four days, when we had $1 billion. we sold 250,000 cars. Now, who's to say that's not successful?"

The caning of a Malaysian woman for drinking beer has been delayed until after Ramadan, officials have said.

Kartika Sari Dewa Shukarno pleaded guilty to the offence under Malaysia's Islamic law and was to have received six strokes of a rattan cane this week.

She will be the first woman in Malaysia to be punished in such a way, but has not appealed against her sentence.

Malaysia's majority Malays are subject to Islamic laws, while the large Chinese and Indian minorities are not.

Confusion

A van picked her up from her northern Malaysian home on Monday, to put her in detention so that she could be caned sometime this week.

But an official in charge of religious affairs, Mohamad Sahfri Abdul Aziz, intervened at the last minute, reportedly for compassionate reasons on the advice of the attorney general.

It was initially reported that her sentence had been overturned and Ms Kartika would not be caned.

The caning is now to be carried out around mid-September after Ramadan, the Islamic holy month of fasting and prayer, ends.

There has also been confusion about Malaysia's rules governing the conditions of caning.

Prison rules require anyone who is to be caned to be in detention first.

But legal experts had said at the weekend that it was not right to detain Ms Kartika as she had not been given a jail sentence by the Islamic court.

Ms Kartika, a 32-year old trained nurse and mother of two, asked last week that her caning be administered in public.

She had told reporters she was calm about the prospect and was willing to be caned because she respected the law.

Islamic authorities claim that the purpose of the caning is to educate rather than punish.

Amnesty International had urged authorities to revoke the sentence and abolish the practice of caning.

What is your response to the decision to cane Ms Kartika? Send us your comments using the form below.

KABUL — Three NATO troops — two from Estonia and one from the United States — were killed in attacks in southern Afghanistan as fraud charges continued to pour in Monday from last week's turbulent presidential vote.

The American service member died in an insurgent attack Sunday, the U.S. military said without providing details. Estonia's Defense Ministry said two soldiers were killed after their unit stumbled on a roadside bomb in southern Helmand province.

It was the 37th death for the U.S. military in Afghanistan since the beginning of August, a month that has seen a jump in attacks and violence as the country prepared for its second-ever direct presidential election last week.

Though millions of Afghans went to the polls, turnout was dampened by Taliban threats leading up to the balloting. Those who voted did so amid rocket attacks in the south, a gunbattle in the capital, and fighting that trapped people inside stations in the east.

Allegations of fraud and intimidation have streamed in since election day. The independent Electoral Complaints Commission said Monday that it has so far received about 45 complaints that could affect the outcome of the election if proved valid.

The most common was ballot-box stuffing. Both President Hamid Karzai and leading challenger former Foreign Minister Abdullah Abdullah have accused each other of fraud.

The United Nations urged candidates and the Afghan people to wait for fraud charges to be investigated before doubting the legitimacy of the election.

"There's no doubt that there have been irregularities during the polling day," said Kai Eide, the U.N.'s top official in Afghanistan.

"I appeal to the candidates and to their campaigns, and also to the voters, to demonstrate the patience and calm that is required" while independent monitors investigate allegations, he said.

Eide also responded to reports that the U.N. had called the election a success by reiterating his statement that it was "an important achievement" for the people of Afghanistan.

"It is too early to use words that go beyond that," Eide said.

U.S. commanders predicted a deadly summer after President Barack Obama ordered 21,000 more U.S. troops to Afghanistan to turn the tide against a resurgent Taliban and shift the focus in the fight against Islamist extremism from Iraq.

July was the deadliest month for American forces in Afghanistan since the beginning of the conflict, with 44 dead. Estonia has 289 soldiers in Afghanistan and the recent deaths mean the small European country has lost six soldiers there.

With the security situation in Afghanistan appearing increasingly difficult, many are suggesting that U.S. commanders may request thousands more troops.

On Sunday, Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, described the situation in Afghanistan as "serious and deteriorating," but refused to say whether additional forces would be needed.

"Afghanistan is very vulnerable in terms of (the) Taliban and extremists taking over again, and I don't think that threat's going to go away," he said on CNN's "State of the Union."

Copyright © 2009 The Associated Press. All rights reserved.

Thousands of residents have evacuated the leafy suburbs of northern Athens as a rampaging forest blaze continues to defy the efforts of legions of firefighters.

Shortly after noon yesterday, the local authorities of Aghios Stephanos and Old Pendeli, both within a half hour's drive of the centre of the Greek capital, ordered inhabitants to abandon their homes — many of them expensive, recently built villas — as the flames tore in from where the fire started near Marathon, late on Friday evening.

Strong northerly winds blowing uninterruptedly for the past few days have fed the flames as they continue to devour many acres of pine woods in the green hills north of Athens. After an extended dry summer, the resin-filled pines have been burning like torches, resulting in huge flames that so far have destroyed at least 30 homes. There have been some hospitalisations but no deaths.

No tourist areas are reported to be in danger, even though yesterday the Interior Ministry said that at least 65 fires had broken out around Greece, fanned by persistent winds. The great majority were brought under control. Cries of terror and despair, mingled with the shouted orders from blackened firefighters and the roar and crackle of the flames, have dominated Greek television news over the weekend. It has proved a sickening reminder of the great fires of late summer 2007 in southwestern Greece, which killed at least 40 people and devastated enormous swaths of the Peloponnese olive groves and vineyards.

The sky over Athens has been covered with a pungent grey-brown blanket of smoke for two days and there is no getting away from the smell of burning and the thin rain of ash, even many miles away.

Last night several thousand people, including Kevin Spacey, the Hollywood actor, sat through a performance of Shakespeare's The Winter's Tale at the ancient theatre of Epidavros, 85 miles southwest of Athens, with the distinct odour of burning in the air.

Local officials at Grammatiko, a community near Marathon, said they were convinced that the blaze had been started deliberately. They cited eyewitness reports of suspicious activity near woodland where the fire first appeared.

Champagne wishes and caviar dreams are a bit closer for many Americans today -- at least when it comes to real estate. That luxury $15 million apartment that you once might have dreamed of is now on sale for $12 million. Okay, so it's still not within the reach of most working families today but for those who have a few million sitting around, there are some fantastic deals to be found.

Take New York. The median price for a Manhattan apartment fell 19 percent over the last year, to $795,000, its lowest level since the second quarter of 2007, according to a recent report by Halstead Property.

Luxury homes there suffered the most, with an 82 percent decline in closings for more than $10 million at cooperative apartment buildings.

Florida -- one of the first states to see its housing market collapse -- is also offering some great deals. What was once hot and trendy in Miami and Palm Beach is now priced to sell.

ABC News asked local real estate agents in the two areas for a sampling of some of the best luxury bargains on the market today. Here they are:

1 Lexington Ave., New York: These days, a beautiful duplex home in New York's Gramercy Park originally designed by Eric Kohler may be a real bargain at $3.595 million. Originally listed at $5.3 million in October 2007, the co-op apartment features three bedrooms, two-and-a-half bathrooms (the master and second bathrooms come complete with radiant heat flooring) and an outdoor terrace. Other amenities include soundproof windows, floor-to-ceiling French doors and a windowed breakfast room.

502 Park Ave., New York: How does a $20 million price cut sound to you? Pretty impressive, right? Well, this Park Avenue penthouse will still set you back $31 million, but at least that's a lot cheaper than the original asking price. Broker Adam Modlin told the New York Post that "you have to do something dramatic, like a $20 million price cut, to get people's attention." After 54 weeks on the market, maybe that's the case, but this four-bedroom penthouse developed by Donald Trump boasts a giant outdoor terrace and 6,200 square feet of living space.

901 Brickell Key, Miami: A 50-percent-plus price drop is questionably insane, especially for this amazing two-story Miami penthouse. Incredible views over the bay, the Miami River and the sprawling city make this 4,418 sq. ft apartment a steal. Down to $1.95 million from an initial $4.2 million, this space doesn't just have wrap-around balconies; it boasts an entire private deck with ample room for activity. Exquisite stone flooring and a fully-equipped luxury kitchen are simply accents to this spacious high-rise penthouse, which also features space for five vehicles.

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What can tens of thousands of dollars buy for a family vacation? In the case of the nation's first family, think of a secluded, waterfront property complete with horse paddocks, a boat house and an apple orchard. Those are just a few of the amenities offered by the Blue Heron Farm, the 28.5-acre Martha's Vineyard estate where President Obama, his family and, of course, the Secret Service will spend part of the president's summer vacation next week.

Tom Wallace, of Wallace and Company Sotheby's International Realty, said the property, which is home to a five-bedroom main house, also features a Cape Cod guest house, a swimming pool and a half-court basketball court. The Obamas will have their pick of activities on the property, ranging from kayaking on the West Tisbury Great Pond to a simple game o"It's the type of place that once you get there, it's not something you want to leave," Wallace said. "It's very tranquil, great place for a family vacation. The kids will absolutely have a ball, as I'm sure [Obama family dog] Bo will also."

Wallace declined to say how much the Obamas were spending on the rental, but Caroline Taylor, another Martha's Vineyard realtor, estimated that the property would go for $35,000 to $50,000 a week.

The Obamas will pay for at least a portion of the rental, but taxpayer funds will be used to pay for Secret Service and staff housing on the property.

Martha's Vineyard is a summer resort island off the coast of Massachusetts. Some Vineyard estates, particular those in the towns of Edgartown and Chilmark, home to Blue Heron Farm, rent for even more -- as much as $75,000 a week or higher. But you wouldn't know it by just driving around the island, Taylor said.

"They're just hidden," she said. "They're off of insignificant dirt roads. If you follow down a driveway and wind around, you see all these private homes that are absolutely stunning."

Chilmark, in particular, is known as a secluded area that has attracted celebrities like Jake Gyllenhall, Larry David, Ted Danson and Mary Steenburgen.

The first family is leaving the White House and Washington behind and trading in the suits and skirts for flip flops and sunglasses and some fun in the sun on Martha's Vineyard in Massachusetts.

The vacation marks the first full week off for President Obama since he took office in January and the first real family vacation for the Obama family.

First lady Michelle Obama and daughters Malia, 11, and Sasha, 8, have accompanied the president on jaunts overseas, but they have mostly kept their own schedule on those trips, taking in the sights and sounds of Europe while the president attended events and meetings.

Except for a few weekends at Camp David, and quick trips to Chicago and New York City, the president has stayed close to the White House so next week could be a true vacation, a break from policy and politics, if world events cooperate with his vacation plan.

Obama has no public events on his schedule for the week and aides said he was not planning to meet with staff on health care. The White House will rely on surrogates to keep the message going while the president is out of the public eye.

GENEVA - FOR more than 60 years, the Swiss have nurtured banking secrecy to the extent that it has become an unshakeable part of Switzerland's image like chocolate, watches, cowbells and Heidi.But many bankers, lawyers and analysts in the country believe a deal struck with the United States to relieve pressure on the flagship bank, UBS, has blown a hole in the wall of secrecy, even if it remains enshrined in Swiss law.

'The UBS disaster is a catastrophe for the Swiss financial centre... because everyone will rush for the breach,' said Mr Patrick Segal, director of Edmond de Rothschild Private Bank.

Unlike most major economies, banking secrecy grants account holders in Switzerland complete privacy, keeping their banking details out of bounds for any authority - even the Swiss taxman.

It can only be lifted for legally-sanctioned investigations into criminal offences, and that, under local law, rules out the lesser offence of tax evasion.

Last Wednesday, the Swiss and US governments revealed their 'treaty' settlement to end a lawsuit against financially-troubled UBS over charges that its bankers used Swiss secrecy to help US taxpayers fraudulently evade taxes.

While Swiss President and Finance Minister Hans-Rudolf Merz described the deal as a 'win-win situation' for both states, the details set off alarm bells in the industry.

It included an arrangement to disclose details on an unprecedented number of UBS accounts - 4,450 - through an established process to deal with tax fraud, which is regarded as a crime in Switzerland.

But the scope was tantamount to a 'fishing expedition' that used to be frowned upon in the Swiss rulebook, setting a new precedent, experts warned.

'Nobody can see legally how... this treaty wouldn't apply to other banks,' said lawyer Enrico Monfrini, who helped Nigeria recover hundreds of millions of dollars hoarded abroad by late dictator Sani Abacha. -- AFP


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A raging fire bore down on Athens' northern suburbs Sunday, prompting panicked residents to battle the flames with tree limbs and buckets, and police to order 10,000 people to evacuate one town immediately.

Frightened inhabitants of Agios Stefanos gathered in the town's main square in early afternoon as flames closed in on the town centre and police with loudspeakers directed everyone to leave immediately on the main highway to Athens, 23 kilometres to the southwest.

Other residents tried desperately to save their homes with hoses, buckets and branches. Planes swooped low over the town to pour water on the flaming houses.

“I call on all residents to follow the instructions of the police as to where they will go,” an emotional Agios Stefanos deputy mayor Panayiotis Bitakos told Skai TV. “We had been begging the authorities since early in the morning to send forces ... It is too late now. Too late.”

By mid-afternoon, the town was empty save for a few volunteers who were aiding firefighters. Houses smouldered and burned-out cars littered the streets.

Planes and helicopters, which had suspended operations overnight, attacked the blaze again at dawn. But with gale-force winds propelling the flames, the fire spread unchecked. TV showed airplanes and helicopters dumping water on a forest outside Agios Stefanos — and the fire re-igniting moments after they left.

The forests around Athens' northern suburbs have helped the fire leap to new areas.

“The pine cones are like projectiles — they cover long distances, too, and spread the fire around,” said Avraam Pasipoularidis, mayor of the northern suburb of Drossia. “Everything around me is burning.”

The fires ignited late Friday; by Sunday they were reported across an area more than 40 kilometres wide. They started in the mountains near the town of Marathon, from which the modern long-distance foot race takes its name. The army removed anti-aircraft missiles from a nearby military base as the flames approached.

Municipal officials said the fire was threatening the archaeological site of Rhamnus, home to two 2,500-year-old temples.

A state of emergency was declared Saturday in greater Athens: These are the most destructive fires in Greece since blazes killed more than 70 people in 2007.

Residents fled on foot, by motorbike and in cars, amid blackouts and cuts in the water supply. No casualties had been reported as of early Sunday afternoon.

TV stations broadcast frantic calls for help from people of different areas, with many complaining that no firefighting equipment had reached them.

A resident of Drossia pleaded with TV station Mega for help, saying far was within 40 metres of his home and he had no water with which to fight it.

Authorities evacuated two large children's hospitals, as well as campsites and homes in villages and outlying suburbs threatened by blazes that scattered ash across Athens. The flames also approached a large monastery on Mt. Penteli.

Officials said help was on the way.

“There are 14 planes — with two of these coming from Italy — and nine helicopters fighting the fire, alongside hundreds of firefighters, volunteers and soldiers,” fire brigade spokesman Yiannis Kapakis told reporters.

“These will soon be joined by two planes from France and a helicopter from Cyprus. Cyprus will also send four fire engines and 60 firefighters,” he added.

Elsewhere in Greece, serious fires were reported on the islands of Evia and Skyros in the Aegean Sea and Zakynthos in the west. Another large fire that started Saturday in the town of Plataea, 63 kilometres northwest of Athens, was spreading unchecked in western Attica.

A total of 83 fires have broken out across Greece since 6 a.m. Saturday, Mr. Kapakis said.

Barack Obama last night denounced Scotland's release of the convicted Lockerbie bomber Abdelbaset al-Megrahi as a mistake, and revealed the US had opened talks with Libya urging the regime to keep the terminally-ill man under house arrest until his death.

Megrahi, who is thought to have only three months to live, was freed on compassionate grounds yesterday. But as the Afriqiyah Airways jet taking him home to Tripoli took off from Glasgow airport at 3.26pm, it left in its wake a torrent of international condemnation.

Obama led the strong US criticism of the decision. "We have been in contact with the Scottish government, indicating that we objected to this," he said. "We thought it was a mistake."

Despite Obama's warnings that Libya should not give Megrahi a hero's welcome, thousands of young men were on hand at the military airport in Tripoli where his plane landed. As he disembarked, cheering supporters, some wearing T-shirts bearing his picture, threw flower petals in the air and waved Libyan and miniature Scottish flags, while Libyan songs played in the background.

Wearing a dark suit and burgundy tie, Megrahi left the plane with the Libyan leader Colonel Gaddafi's son, Saif, who raised his hand to the crowd before they left. Megrahi was reportedly on his way to meet his 95-year-old mother.

Earlier on, in a carefully choreographed day, it took just 67 minutes to free the man who it had taken more than a decade to catch and convict for plotting Britain's worst terrorist atrocity, the bombing of Pan Am flight 103.

At 1pm, the Scottish justice secretary Kenny Macaskill told a press conference of his decision to free Megrahi because spreading prostate cancer is killing him.

At 2.29pm, the white A300 airliner touched down in Glasgow while at Greenock prison, Megrahi, frail and bowed by his illness, walked slowly into a prison van, his face swathed in a white scarf.

At 2.37pm, a small convoy of six police vehicles flanked by a police outriders swept him under the prison's arch. About 80 local residents had gathered outside the gate. Some shouted abuse while some cheered ironically, as the convoy passed.

Roads were closed as the convoy was shepherded through Greenock by its outriders and down the M8 to Glasgow airport, shadowed by a small squadron of police and TV helicopters.

At 3.09pm, Megrahi stepped from the van onto the airport tarmac, his face obscured by a white baseball cap and the scarf. After a handshake with prison guards, Megrahi leaned on a walking stick and pulled himself up the aircraft steps.

Megrahi had repeatedly denied his guilt – protesting his innocence again in an emotional statement yesterday – but he left Scotland a convicted mass murderer, after dropping his appeal against conviction in order to expedite his release.

In his hand he held papers that threatened "recall to custody" if he did not comply with the terms of his release, including giving monthly health updates andbeing interviewed by a supervising officer. Last night, Scottish opposition politicians said the terms were unenforcable.

American relatives of those killed in the bombing condemned the release. Showing Megrahi any compassion was "utterly despicable", said Kara Weipz, 36, whose brother Rick was killed in the atrocity.

"The interests of justice have not been served by this decision," said Eric Holder, the US attorney general, who helped investigate the bombing originally. "There is simply no justification for releasing this convicted terrorist whose actions took the lives of 270 individuals."

But Macaskill, the Scottish justice secretary and former criminal defence lawyer who issued Megrahi's release papers, said his decision was a moral act.

"In Scotland, we are a people who pride ourselves on our humanity. It is viewed as a defining characteristic," he told a packed press conference in Edinburgh.

"The perpetration of an atrocity and outrage cannot and should not be a basis for losing sight of who we are, the values we seek to uphold, and the faith and beliefs by which we seek to live. Mr al-Megrahi did not show his victims any comfort or compassion. [But] compassion and mercy are about upholding the beliefs we seek to live by, remaining true to our values as a people, no matter the severity of the provocation or the atrocity perpetrated.

"For these reasons alone, it is my decision that Mr al-Megrahi be released on compassionate grounds and allowed to return to Libya to die."

Macaskill released medical reports on Megrahi's condition. His cancer, diagnosed in September 2008, failed to respond to hormone treatment. The cancer hit nine out of 10 on the "Gleason score" of severity. The official medical report stated that Megrahi's condition had "declined significantly" earlier this month. "The clinical assessment, therefore, is that a three month prognosis is now a reasonable estimate for the patient."

Megrahi issued a statement stressing his innocence, saying his conviction was "a disgrace" and his imprisonment had been a "horrible ordeal". "I am obviously very relieved to be leaving my prison cell at last and returning to Libya, my homeland," he continued. "Many people, including the relatives of those who died in, and over, Lockerbie, are, I know, upset that my appeal has come to an end; that nothing more can be done about the circumstances surrounding the Lockerbie bombing.

"I share their frustration. I had most to gain and nothing to lose about the truth coming out – until my cancer diagnosis. To those victims' relatives who can bear to hear me say this: they continue to have my sincere sympathy for the unimaginable loss they have suffered. To those who bear me ill will, I do not return that to you."

Obama said he had contacted families of the deceased and indicated to them that the release was inappropriate. He added: "We have been in contact with the Scottish government indicating we object to this. We thought it was a mistake. We are now contacting the Libyan government to make sure that if this transfer has taken place, he is not welcomed back in some way but should instead be under house arrest."

TOKYO, Aug. 23 -- In another signal that relations between the two Koreas are on the mend, a North Korean delegation met Sunday in Seoul with South Korean President Lee Myung-bak and delivered a personal call for improved ties from leader Kim Jong Il.

It was the first high-level meeting between the countries in nearly two years and the atmospherics of the 30-minute session, which a spokesman described as "very serious and gentle," suggested that North Korea is retreating from a campaign of insults, threats and saber-rattling that it launched when Lee assumed the presidency 18 months ago.

"Simply put, we can say that there has been a paradigm shift," an official from Lee's office told Yonhap, the South Korean news agency.

That shift, of which there have been multiple signs in recent weeks, has tamed the bellicose dynamics of what had been an eight-month stretch of almost non-stop provocations by North Korea, which had tested a nuclear bomb, launched missiles and repeatedly declared its readiness for "all-out war."

For reasons that are not well understood, the North has embarked in August on something of a charm offensive. It has released two U.S. journalists, freed a South Korean worker, agreed to resume family reunions with the South and promised to restart cross-border businesses.

North Korean diplomats also sought a meeting last week with New Mexico Gov. Bill Richardson, who said the isolated country is "now prepared to have a dialogue with us."

The North Korean delegation that visited Lee on Sunday had come to Seoul to pay respects to former South Korean President Kim Dae-jung, who died last week and whose efforts to unite the Korean Peninsula won him the Nobel Peace Prize.

Tens of thousands of mourners gathered outside parliament Sunday afternoon for his state funeral. Kim, who was tortured and imprisonment during his decades as an opposition leader, was a passionate advocate of Korean unification and participated in a summit with Kim Jong Il in Pyongyang in 2000.

At the meeting with Lee, the North Korean delegation conveyed their leader's wishes for progress in relations with South Korea, according to spokesman Lee Dong-kwan.
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In response, President Lee called for a resumption of dialogue between the two countries and told the North Koreans that there is no issue that the two sides cannot resolve, if they talk with sincerity, the spokesman said.

The senior member of the North Korean delegation at Sunday's meeting was Kim Ki Nam, secretary of the Workers' Party and a key aid to Kim Jong Il.

When Lee came into office in early 2007, he infuriated North Korea by changing a decade-old policy of unconditional aid that began under Kim Dae-jung as part of his "Sunshine Policy" for reducing North-South tension.

The South had provided North Korea with massive gifts of food and fertilizer, while asking no questions about where the aid went or who benefited from it.

Lee has insisted that he would only resume the aid program -- which amounts to about 5 percent of the North's gross domestic product -- if deliveries could be monitored. There are widespread reports that earlier aid was diverted to the military and sold by elites in the government.

A possible reason for North Korea's new flexibility in relations with South Korea is lack of food.

The North suffers from chronic food shortages, and U.N. food agencies have said that about 37 percent of the country's 23.5 million people will need aid this year.

Food-supply problems may have increased in recent weeks, as North Korean state television has reported that flooding damaged crops.

Earlier this year, the North severely restricted the ability of U.N. agencies to distribute food inside the country.