At least 38 members of the Egyptian security forces have been hospitalized, some in critical condition, because of cross-border confrontations, Egyptian Foreign Minister Ahmed Aboul Gheit said. The minister complained of "provocations" at the border, a thinly veiled reprimand of Hamas, and said that while Egypt is ready to ease the suffering of Gazans, this should not endanger Egyptian lives.

In the West Bank, meanwhile, moderate Palestinian President Mahmoud Abbas stuck to his tough conditions for resuming contacts with Gaza's Hamas rulers, dimming prospects for Egypt's proposal to have the two Palestinian rivals come to Cairo for talks on resolving the border crisis. Earlier, Hamas had accepted Egypt's proposal, and Hamas hardliner Sami Abu Zuhri accused Abbas of trying to bypass Hamas: "His statements are a rejection of the Egyptian initiative."

Israel, meanwhile, expressed growing concern about the possible influx of Palestinian militants into areas of Egypt that border Israel. The Israeli military announced Saturday that its troops were on heightened alert along the border with Egypt, and that an Israeli road and tourism sites in the area are temporarily closed.

Seeking to dispel international concerns amid increased violence, Khalid Kidwai, head of the Strategic Plans Division which handles Pakistan's nuclear arsenal, said Pakistan uses 10,000 soldiers to keep the weapons safe and has received up to $10 million in U.S. assistance to that end. "There's no conceivable scenario, political or violent, in which Pakistan will fall to extremists of the al-Qaeda or Taliban type," Kidwai told foreign journalists at a briefing. "Pakistan's nuclear weapons, fissile material and infrastructure are absolutely safe and secure."

Kidwai, a retired general, said his division was prepared for any contingency and had reassessed the militant threat in light of escalating attacks on security forces and intelligence personnel. He said he had received no information of a terrorist plot against nuclear facilities.

Media reports have said the Pentagon has contingency plans for seizing Pakistan's nuclear facilities if they ever fall into the hands of Islamic extremists. Kidwai called it "irresponsible talk" and said the United States would not succeed in such an operation.

"They said, whoever won, we would have to leave," the heavily pregnant mother of two told Reuters in a camp for Kenyan refugees in eastern Uganda. "A few days before, they burned some tyres and then said: 'We will burn you like we are burning these'. It definitely seemed like it was planned," she added as she washed her family's one remaining set of clothes in the makeshift camp which had sprung up in the bush.

Within minutes of the Dec. 30 declaration of President Mwai Kibaki's victory, rejected by his opponent Raila Odinga, Njoki's house had been set on fire and her family stoned. Coming from Kibaki's Kikuyu tribe but living in Nambale, a town in predominantly Luo and opposition-supporting southwestern Kenya, her family spent the next few days hiding at a police station before fleeing across the border. Nearly a month after Kibaki's contested victory was announced, the post-election violence that has killed about 700 people and displaced 250,000 continues, adding to the crisis in a country that once seemed a haven of stability.

More than 6,000 Kenyans, mainly Kikuyus, have fled to eastern Uganda. Some have moved into the tented settlement at Mulanda, 35km (22 miles) inside Uganda. Others have preferred to stay near the border to keep an eye on events or what is left of what they own. Most, however, believe the violence that forced them to flee was not spontaneous. They are convinced that for many the elections were used as a way to settle old scores.

"They have used the elections to settle a grudge," said a Kikuyu refugee who asked to remain anonymous. "The Kikuyu became rich and bought land and now Luos are telling us to go back home to Central (Province) where we belong." Although ethnic tensions and land issues have long been deeply divisive in Kenya, they have never blown up on the scale seen in the past few weeks. As a result, Kenya was seen as a haven of stability and progress, surrounded by conflict and the chaos in Sudan, Somalia and countries in the Great Lakes region.

The cold snap has struck central, eastern and southern China in recent days, bringing snow, ice and sleet to provinces used to milder winters. Dozens of people have died. A government forecaster said the chaotic weather was likely to continue as the country prepared to celebrate the Lunar New Year, which begins on February 7.

The snow and ice have collapsed homes, snapped power lines and destroyed crops, and caused the deaths of dozens of people. The bad weather also threatens to stoke price rises that already had the government worried. Mountainous Guizhou province in the southwest has in past days suffered three deaths, 877 collapsed buildings and widespread blackouts, Xinhua reported.

Several regional airports were shut by the weather, including the one at Nanjing, capital of Jiangsu province. State television also showed highways crowded with trucks paralyzed by the snow. The national forecasting authority said the freezing weather would continue to pummel provinces from west to east over the next week, with heavy snows possible in Shanghai and neighboring provinces -- powerhouses of business and manufacturing.

Because farmers get their water at subsidized rates, some of them see financial opportunity this year in selling their allotments to Los Angeles and other desperately thirsty cities across Southern California, as well as to other farms. "It just makes dollars and sense right now," said Bruce Rolen, a third-generation farmer who grows rice, wheat and other crops in Northern California's lush Sacramento Valley. Instead of sowing in April, Rolen plans to let 100 of his 250 acres of white rice lie fallow and sell his irrigation water on the open market, WHERE IT COULD FETCH UP TO THREE TIMES THE NORMAL PRICE.

What effect these deals will have on produce prices remains to be seen, because the negotiations are still going on and it is not yet clear how many acres will be taken out of production. But California grows most of the nation's winter vegetables and about 80 percent of the world's almonds, and is the No. 2 rice state, behind Arkansas. Environmental restrictions, booming demand for water, and PERSISTENT DROUGHT ALONG THE COLORADO RIVER have combined to create one of the WORST WATER SHORTAGES in California in the past decade, and prices are shooting up in response. The would-be water sellers include farmers who grow rice, cantaloupes and tomatoes around Sacramento and the San Joaquin Valley. Rice, in particular, requires a lot of water; the fields have to be flooded.

Tom Donahue told a utilities security conference in New Orleans all the successful hackings occurred outside America. Mr Donahue, who was speaking at the Process Control Security Summit, later said in a statement: "We have information, from multiple regions outside the United States, of cyber intrusions into utilities, followed by extortion demands."

He said the CIA suspected some of the cyber-attackers "had the benefit of inside knowledge". He added: "In at least one case, the disruption caused a power outage affecting multiple cities. We do not know who executed these attacks or why, but all involved intrusions through the Internet." A CIA spokesman declined to provide additional details, saying: "The information that could be shared in a public setting was shared. These comments were simply designed to highlight to the audience the challenges posed by potential cyber intrusions."

The Bush administration is increasingly worried about the little-understood risks from hackers to the specialised electronic equipment that operates power, water and chemical plants, known as Supervisory Control And Data Acquisition (SCADA) systems. These are increasingly connected to the Internet. In 2000, a disgruntled former employee of an Australian computer company hacked into a sewage control system and flooded parks, rivers and a hotel with a million gallons of raw sewage. In 2003, a computer virus called the Slammer worm disabled a safety monitoring system at an inactive Ohio nuclear plant for nearly five hours.

Countless deaths were reported in Kenya's Rift Valley during ethnic clashes which have been raging since the country's disputed elections last month. While guns have been used in the capital Nairobi, firearms are less readily available in rural areas. In one battle near the tourist town of Nakuru, a dozen warriors were left dying in the streets, some with deep gashes to the head, others with arrows stuck in the chest and back.

On the edge of the sprawling Kaptembwa slum area the bodies of two men had been placed in the back of a police truck - one killed by an arrow, the other hacked to pieces with machetes. Some victims had been stoned to death. Nakuru, 95 miles north-west of Nairobi, is Kenya's fourth-largest town and a focus for thousands of Britons each year visiting the game parks and flamingo lakes.

The fighting in Nakuru was between Kikuyus and the rival Kalenjin, Luhya and Luo tribes. One tribal warrior, a bus conductor, declared: "We have vowed that for every Kikuyu killed, we shall kill two Kalenjins."

In the bleakest economic outlook he has given as Prime Minister, Mr Brown claimed people should not fool themselves that a recovery is on the near horizon, given the stricken state of the banking sector. Speaking at a gathering of world political and business leaders in the Swiss resort of Davos, Mr Brown warned we all face a "testing time" ahead. "There is a danger, with more bad news still to come, of being over-optimistic," he said. "It would be wrong to over-emphasise the silver linings at the expense of some of the clouds."

Mr Brown warned rising food and energy prices will fuel inflation, eroding people's incomes and adding to the economic pain. Recent rates of global growth near 5 per cent a year can't be sustained, the Prime Minister said, predicting world output will rise between 3 and 4 per cent in 2008. He did not directly address Britain's own economic outlook, preferring to emphasise the headwinds facing all countries.

But his words will do little to dispel fears that the UK could be facing its first recession since the beginning of the 1990s.

Several major mining companies, including AngloGold, Harmony and Gold Fields Ltd., suspended all but emergency operations at some of the world's largest mines because of a national electricity emergency. Other commodities joined the rally, with oil closing above $90 a barrel for the first time in a week. South Africa is second only to China in world gold production, and is the globe's top producer of platinum. Mine equipment problems, accidents and maintenance have contributed to a production decline this year, however.

Mining operations in the country were suspended Friday on fears that power interruptions would trap workers underground. Gold Fields said it halted all its South African operations, including in the world's largest gold mine, which produces 7,000 ounces per day. The government said there was no foreseeable end to the electricity shortages.

An ounce of gold for February delivery spiked to $924.30, a fresh record, on the New York Mercantile Exchange before easing back to settle at $910.70, up $4.90. Still, when adjusted for inflation, gold remains well below its all-time highs in 1980. An ounce of gold at $925 then would be worth about $2,360 today.

April platinum peaked at a new high of $1,694.90 an ounce. Prices later settled at $1,670, up $57. Platinum prices have roughly doubled in four years, with global inventories growing tighter as automakers try to meet demand, particularly in Asia and Eastern Europe. Demand for the metal, used in jewelry and catalytic converters in automotive exhaust systems, has also surged due to stricter emissions standards.

March silver climbed 15.7 cents to settle at $16.490 an ounce, while copper added 1.25 cent to $3.1840 a pound.

As the depth of the risk to the bank became clearer, small shareholders questioned controls at Societe Generale and other leading banks, and France's prime minister joined skeptics wondering whether a lone trader could have been fully responsible for such major damage. The fraud cost Societe Generale 4.9 billion euros, or more than $7 billion, but a bank official said Friday that Kerviel's positions had reached "SEVERAL TENS OF BILLIONS OF EUROS." The official spoke on condition of anonymity because of company policy on such matters.

French presidential aide Raymond Soubie said on LCI television that THE TRADER HAD BEEN DEALING WITH MORE THAN 50 BILLION EUROS, OR MORE THAN $73 BILLION. THAT FIGURE EASILY OUTSTRIPS THE BANK'S MARKET CAPITALIZATION OF 35.9 BILLION EUROS ($52.6 BILLION), and is close to the annual gross domestic product of entire nations such Slovakia, Qatar or Libya. The damage might not have been as bad if it had happened in a less volatile time: The bank said it learned of the fraud last weekend. With stock markets in turmoil, Societe Generale was FORCED TO SELL THE CONTRACTS BUILT UP BY THE ROGUE TRADER JUST AS STOCKS WERE PLUNGING. It took three days to unload them.

Societe Generale's unwinding of its massive positions over the next three days COULD EVEN HAVE CONTRIBUTED TO THE MARKETS' FALL, ANALYSTS SAID. "Any dumping will drop the price," said Mark G. Castelino, associate professor for finance and economics at Rutgers Business School in New Jersey. He stopped short, however, of saying that Kerviel's actions affected the U.S. Federal Reserve's subsequent decision to cut its benchmark interest rate by an extraordinary three-quarters of a percentage point.

Shareholders and others raised questions about how Kerviel was apparently able to dodge the bank's internal controls for more than a year to make the unauthorized market bets. "One should not be able to take positions worth 40 billion (euros) without being spotted by an audit or a sophisticated computer system," said Didier Cornardeau, president of APPAC, a group representing small Societe Generale shareholders.

French Prime Minister Francois Fillon, meanwhile, said: "It is difficult ... to imagine how one person alone could, in a relatively short period of time, cause such considerable losses." He suggested the French government should have been informed immediately, instead of four days after the fraud was discovered.

The annual shindig of the World Economic Forum in the Swiss Alpine ski resort assembled the corporate and political elites of the West - and those from the developing and former socialist worlds who were ready to accept their tutelage - TO PLOT THE FUTURE OF GLOBALIZATION. The free market had become the uncontested economic model, free trade was the order of the day and dot-com visionaries promised that stock market exuberance was no longer irrational. THE FUTURE SEEMED TO BELONG TO WHAT SAMUEL HUNTINGTON DUBBED "DAVOS MAN."

The fact that this year's gathering opened under the cloud of a PRECIPITOUS GLOBAL STOCK MARKET SLIDE AND CREEPING RECESSION may be symbolically apt, but it is not the only reason for the absence of triumphalist illusions at Davos 2008. The markets are telling us that the U.S. economy, and all whose wagons are hitched to it, are in for SOME VERY NASTY TIMES WHOSE DEPTH AND DURATION NOBODY CAN PREDICT. And the stalled global talks on extending free trade (the "Doha Round," which began seven years ago and remains unfinished) are a further sign that faith in free markets has its limits. But even outside of his immediate economic woes, IT HAS BECOME INCREASINGLY CLEAR THAT DAVOS MAN'S AUTHORITY IS IN DECLINE.

The choice of the event's opening and closing speakers - respectively, SECRETARY OF STATE CONDOLEEZZA RICE AND FORMER BRITISH PRIME MINISTER TONY BLAIR - suggests that Davos Man is either out of touch, or else in a state of melancholic denial. For one thing, Rice and Blair arguably bear substantial personal responsibility for the catastrophic policies that have exacerbated the violent chaos spanning an "arc of instability" from Palestine to Pakistan. THEIR TRACK RECORD ALONE SUGGESTS THAT NEITHER HAS MUCH NEW, OR INTERESTING, TO OFFER IN A DISCUSSION ABOUT MANAGING AN INCREASINGLY DANGEROUS WORLD.

The decline of Davos Man is not simply related to a credit crunch or a U.S. election year. In the years during which the U.S. became distracted by the "global war on terror," China's economy has grown to twice the size it was when President Bush first took office. IT IS TO CHINA - GUARANTOR, BY VIRTUE OF THE TRILLION DOLLARS AND GROWING LINE OF CREDIT IT MAKES AVAILABLE TO THE AMERICAN CONSUMER, OF THE AMERICAN WAY OF LIFE - THAT U.S. INVESTMENT BANKS TURN FOR HELP WHEN CONFRONTED BY THEIR LOSSES IN THE SUBPRIME LOAN CRISIS.

Today, market analysts contemplate whether the best hope for the global economy avoiding being dragged into the vortex of recession by the U.S. - slowdown may be THE "DECOUPLING" FROM THE U.S. ECONOMY that some believe could allow economies such as China and India to continue growing by virtue of momentum in their own economies. CHINA HAS ALREADY BECOME THE KEY TRADING AND INVESTMENT PARTNER IN BOTH AFRICA AND IN SOME KEY LATIN AMERICAN COUNTRIES, offering a model of development quite different from the "Washington consensus" on issues of governance and economic management that might, as easily, have been dubbed THE "DAVOS CONSENSUS."

CHINA IS CERTAINLY NOT GOING TO TAKE DIRECTION FROM ITS DEBTORS, AND GLOBAL ENERGY PRICES HAVE TRANSFORMED RUSSIA FROM OBEDIENT SUPPLICANT TO SWAGGERING CHALLENGER TO THE WEST.

THE U.S. AND ITS ALLIES REMAIN IMMENSELY POWERFUL, but the limits of their ability to influence events have been laid bare in Iraq. Today, long-term traditional U.S. allies in Asia, Africa, Latin America, the Middle East and Europe can no longer be counted on to follow Washington's lead. At the same time, the Davos crowd has lost its near-monopoly on global political and economic power, which is increasingly being diffused across a variety of different power centers with shifting alliances.

French foreign policy intellectuals of the 1990s, fearful of what they called the American "hyperpower," fantasized about a "MULTIPOLAR WORLD" where power was balanced across a variety of different power centers and interests. WHILE ECONOMIC "DECOUPLING" REMAINS AN UNTESTED HYPOTHESIS, GEOPOLITICAL "MULTIPOLARITY" IS TODAY INCREASINGLY PLAIN TO SEE. And nowhere more so than at Davos.

The violence, and a denial by opposition leader Raila Odinga that he would agree to serve as prime minister under President Mwai Kibaki, followed the first meeting between the two rivals since a disputed Dec. 27 election triggered a political crisis.

"Nakuru town has been shut down - hundreds are injured in hospital," Kenya Red Cross head Abbas Gullet said. About 700 people have died in violence since Kibaki was re-elected in polls observers say were flawed and Odinga and his Orange Democratic Movement (ODM) say were rigged. The turmoil has also made 250,000 people homeless and damaged one of Africa's most promising economies.

The Kibaki-Raila meeting had been applauded around the world, including in statements from the European Union and U.S. presidential candidate Barack Obama. But diplomats expressed concern for the future of the mediation process. In an interview with Reuters on Friday, Odinga ruled out taking the post of prime minister in Kibaki's government -- a solution some media and diplomats had touted. He said the only three acceptable options would be Kibaki's resignation, a vote re-run, or power-sharing followed by a new election.

COMMITTEE CHAIRMAN JOHN McFALL
"Our report has been unanimously agreed. It recommends a radical shake-up at both the Bank of England and the Financial Services Authority. Both have been found wanting with regard to financial stability."

FINANCIAL SERVICES AUTHORITY
"As we have already acknowledged publicly, there were clearly supervisory failings in relation to Northern Rock and we are already addressing these."

SHADOW CHANCELLOR GEORGE OSBORNE
"This Labour-dominated Treasury Select Committee accuses the Chancellor of a serious error of judgement over Northern Rock, sets out yet more evidence of damaging dithering and attacks his lack of leadership. Thanks to his economic incompetence over Northern Rock, Alistair Darling's credibility is in shreds."

LIBERAL DEMOCRAT TREASURY SPOKESMAN VINCE CABLE
"Northern Rock's managers behaved like a bunch of cowboys and the FSA did nothing to rein them in, or even appear to see there was a problem."

COMMITTEE CHAIRMAN JOHN McFALL
"Planning must begin immediately so that on any future [banking crisis] occasion, it is known who will speak for the authorities and that their message is clear and reassuring. A strong co-ordinating influence from one office will surely help with this."

European regulators are investigating the "sudden and unexpected" deaths of the women who received Gardasil, one of two jabs to protect against cervical cancer licensed for use in the UK. The European Medicines Agency (EMEA) said one of the young women who received Gardasil died in Germany while the other was in Austria. It has not released their ages.

It follows the deaths of three young women aged 12, 19 and 22 who were reported to have died in the U.S. days after Gardasil was administered, with 1,700 patients suffering "adverse reactions". There were no previous recorded deaths in Europe. Gardasil, made by Merck, is one of the jabs to be used initially. The other is Cervarix, made by Glaxo-SmithKline.

Dr Nicholas Kitchin, medical director at Sanofi Pasteur MSD, which markets Gardasil, said: "The authorities in the two countries have looked intensively at these two cases and have not established a causal link, and this has been endorsed by the EMEA. The fact that the EMEA is not taking any action on the back of this should be seen as reassuring that the product remains safe."

A monoline insurer is in the business of insuring bonds, offering investors a way of recouping their cash should their bonds turn sour. For most of the past 30 years, that's meant backing relatively safe bets: rock solid bonds, for example, issued by municipal governments in the U.S. to help put up new schools or hospitals. But recently, the monolines have upped the ante. Lured by the prospect of greater rewards (though surely not the greater risk), they've taken to guaranteeing debt backed up by fancy new financial products engineered on Wall Street, not Main Street. Caught up in the collapse of the sub-prime market, the value of many of those products has dived. So for the investors left exposed, monolines are the backstop.

Right now, that's an expensive place to be. New York-based Ambac and MBIA, the two largest monoline insurers, each cover roughly $60 billion worth of investments backed by assets caught up in the sub-prime snafu. That's only about a tenth of their individual portfolios, but enough to give credit rating agencies a clear case of the jitters. Concern that Ambac didn't have enough capital to protect it against losses prompted Fitch, one such agency, to last week downgrade Ambac's rating from AAA to AA. Rival agencies Moody's and Standard & Poor's have put both Ambac and MBIA on watch.

For financial markets already in a tailspin, that's a worry. A bond's rating is linked to that of the guarantor so a downgrade at Ambac gets passed along to all the debt it's underwriting. That could force many investors ? the kind, such as pension funds, restricted to only bonds with the top-notch AAA rating ? to dump them on the market, pushing down their price and subsequently cranking up those investors' losses. That'll add insult to injury: the sub-prime collapse has already triggered bumper write-downs of some $130 billion. Keen to avoid even more market mayhem, regulators are urging Wall Street to bail out the bond insurers.