Tension increasing over issue of Iranian nuclear program. IAEA set 31 October deadline for Tehran to enable UN to verify it is not building nuclear weapons. Matter may be referred to Security Council if Iran deemed non-compliant. Concern that standoff playing into hands of Iranian hardliners and could escalate, with risk of Iran pulling out of Nuclear Non-Proliferation Treaty (NPT). Elsewhere, Iran-UK relations on rocks after several shooting incidents outside British embassy in Tehran and last month’s arrest by UK of former Iranian ambassador to Argentina.

Vigorous diplomatic manoeuvring at United Nations as U.S. pushes resolution authorising multilateral force for Iraq and seeks help in bearing cost of reconstruction. U.S. president Bush failed to garner support from foreign leaders in two days of talks at UN. France urging quick turnover of power to Iraqis; U.S. says proposed timeframe unrealistic: Colin Powell announced six-month deadline for new Iraqi constitution, with elections to follow sometime in 2004. In Iraq, violence continued. Aquila al-Hashimi, member of Iraqi Interim Governing Council, died after being shot by gunmen on 20 September. Two days later, a second suicide bombing outside UN headquarters killed two. UN continues to withdraw staff from Iraq. 192 Coalition soldiers, including 172 Americans, have died since 1 May, declared end of combat operations.

Authorities arrested two men accused of anti-U.S. terror plot. Central Bank retracted decision to freeze accounts of Hamas after angry reactions, including from parliament, but freeze may be reinstated. King Abdullah met U.S. President George W. Bush at Camp David; promised democratic reforms.

Security crackdown continues; 200 suspected Islamist militants have been arrested since May. Four killed in gunfight with radicals allegedly planning terror attack. Authorities focusing on blocking flow of cash to terrorist groups amid U.S. criticism of Saudi aid to Hamas. Meanwhile, last of U.S. troops left Saudi Arabia earlier in month, bringing end to 13-year presence. Saudis deny newspaper report that Kingdom considering acquiring nuclear weapons.

Government continues to walk fine line between supporting U.S. in war on terror and appeasing largely anti- American populace. Authorities handed over to Saudi Arabia suspected al Qaeda member thought to have had role in May Riyadh bombings.

Power struggle between Arafat and PM Abbas ended with Abbas’s resignation; Ahmed Qureia, speaker of Palestinian parliament, appointed new PM. Three-year anniversary of intifada passed on 28 September with no peace in sight. Israeli attacks on Hamas leaders continued; Sheikh Ahmed Yassin, spiritual leader of Hamas, among targets. Suicide bombings also continued: attacks on Israeli café and bus stop on 9 September killed 15. Israel threatened to expel – and possibly kill – Arafat, drawing international condemnation. U.S. vetoed UN Security Council resolution urging Israel to cease threats against Palestinian leader. Meanwhile, U.S. and Israeli officials held talks in Washington aimed at reaching agreement on route of controversial security fence in West Bank.

Armed Islamic Group suspected in death of nine soldiers in western Algeria on 17 September. Report suggests at least 100 people are killed each month by armed groups, security forces and state-armed militias. Algerian army reportedly killed 150 Islamic rebels in latest offensive. President Bouteflika announced establishment of a commission to investigate disappearance of thousands over past decade.

Authorities continue suppressing dissent, most notably by Muslim Brotherhood. Government says 20 Islamist militants arrested last month planned to launch “jihad” against Coalition forces in Iraq. New ideas on political pluralism aired at conference held by ruling NDP party from 26-28 September.

129 army officers went on trial for June coup attempt in which 15 people were killed.

Morocco’s King Mohammed VI reiterated commitment to cooperating with UN over Western Sahara. Polisario Front released 243 Moroccan POW’s held in south- western Algeria. UN Security Council repeated its call to free 900 remaining detainees in compliance with international humanitarian law.