Human Rights Watch report claimed more than U.S.$4 billion in oil revenue disappeared from Angolan government coffers from 1997-2002, roughly equal to entire sum government spent on social programs in same period. Government rejected claims.

Defence minister dismissed after being questioned about September 2003 coup plot – replaced by head of President Campaore’s personal staff.

In positive move, President Ndayizeye held first talks with Hutu FNL rebels in Netherlands mid-January. Talks inconclusive, as FNL, last active rebel group in Burundi, insisting will only negotiate with Tutsi leaders. FNL attacks killed 17 near capital 11 January. International donors’ conference in Belgium raised $1.03 billion for reconstruction. Refugees began returning in thousands from neighbouring Tanzania.

UN Secretary General Kofi Annan expressed concern in 7 January report about re- emergence of rapes, killings, hold-ups. Government released electoral calendar – constitutional referendum to be held November 2004, followed by municipal, parliamentary and presidential elections December 2004 - January 2005.

Security situation remains tense. Rebels returned to power-sharing government 6 January after 3-month boycott. France seeking UN Security Council approval by 4 February of peacekeeping force of 6,240; U.S. has reservations. At least 18 killed in ethnic clashes in west and north. Policeman convicted of October murder of French journalist and sentenced to 17 years jail.

Hardline Hutu rebels held hostage at least 3,000 former Rwandan fighters to prevent their return to Rwanda, according to UN mission in DRC (MONUC). Some 100 people reported massacred by ethnic Lendu militia in Ituri province 16 January. UPC militia (which in past received support from Rwanda) launched number of attacks on MONUC peacekeepers, firing on soldiers and helicopters. South Africa’s President Mbeki visited DRC 13 January, signing cooperation pact.

Intense diplomatic efforts under way to resolve impasse over disputed border demarcation, with visits from German Chancellor Schroeder, UK’s Foreign Office minister and US deputy assistant secretary for African Affairs. Continued ethnic violence in western Ethiopia has caused at least 5,000 to flee to Sudan.

Ailing 69-year-old president Lansana Conté sworn in 19 January for further 7-year term after elections 21 Dec.

Peacekeepers deployed to several rebel held towns for first time. Widespread looting, rapes and abduction still occurring in areas lacking peacekeepers. Disarmament of fighters delayed to February, possibly March. UN to appeal for up to U.S.$500 million in aid at February donor conference. Rebel groups began to fracture: Ayesha Keita-Conneh, wife of LURD rebel leader, Sekou Conneh, (and spiritual adviser to and adoptive daughter of Guinea’s President Conté) announced she had replaced husband as leader; he denied claim. MODEL rebels and LURD faction led by Conneh called for leader of transitional government, Gyude Bryant, to step down 25 January, but MODEL later retracted call.

Ethnic clashes in south and north left many dead and thousands displaced. Northern clashes between Islamist militants and security forces left at least 18 militants dead, and caused at least 10,000 civilians to flee. At least 30 killed in number of clashes involving Ijaw militants in Niger delta. Cameroon and Nigeria yet to reach agreement over oil rich Bakassi peninsular - awarded to Cameroon by International Court of Justice in 2002 in decision disputed by Nigeria – but countries agreed to introduce joint security patrols in contested region.

Refugees returned to Rwanda from Uganda and DRC, but hardline Hutu rebels tried to prevent return of Hutus from DRC, holding hostage at least 3,000 former Rwandan fighters, according to UN mission in DRC. Former Rwandan minister for higher education, Jean de Dieu Kamuhanda, received 2 life sentences from Tribunal 22 January for genocide and crimes against humanity. Some defence lawyers at Tribunal went on 3-day strike claiming “serious deterioration” in rights of accused.

New UN Special Representative, Ambassador Daudi Ngelautwa Mwakawago of Tanzania, arrived in Freetown to head UN mission (UNAMSIL). U.S. lifted unilateral sanctions against Sierra Leone, replaced them with trade restrictions on conflict diamonds. Special Court for Sierra Leone accused detained militia leader Chief Sam Norman of inciting civil unrest, and banned all communications with him.

Main warlords and politicians signed peace agreement 29 January. Deal provides for creation of appointed parliament which would elect president – but remains to be seen if political will exists to implement deal. Self-declared autonomous republic Somaliland not party to agreement. Inter- clan conflict killed at least 21 in central Somalia mid-January. Somaliland warned self-declared autonomous region Puntland to withdraw its forces from disputed region of Sool. Puntland accused neighbouring Djibouti of arming Somaliland.

Worsening conflict in western region of Darfur received increased international attention. UN estimates some 600,000 displaced people in Darfur and 100,000 refugees in neighbouring Chad. Humanitarian groups unable to get to Darfur to deliver aid. Government commenced daily bombing raids 9 January, killing hundreds of civilians. Peace talks with southern SPLA rebels adjourned till 17 February. Accord on wealth sharing signed 7 January, but agreement yet to be reached on power sharing and control of disputed territories, despite pressure from U.S..

Amnesty for rebels extended for further 6 months 15 January, reduced to 3 months on 22 January. Information minister Buturo claimed amnesty program overwhelmed by rebel Lord’s Resistance Army (LRA) fighters signing up. Army killed LRA army commander Yadin Nyeko 19 January in significant blow to rebels – but war continues to impose devastating humanitarian toll in north. International Criminal Court announced 29 January launch of formal investigation into LRA.

South Africa’s President Mbeki announced 22 January that President Mugabe had agreed to formal negotiations with opposition MDC – but MDC says Mugabe not serious. Trial of MDC leader Morgan Tsvangirai for alleged plot to assassinate Mugabe resumed 19 January. Police banned MDC from launching its new economic program 29 January. Parliament amended land acquisition law to speed up land seizures. Government finally allowed Daily News to publish, after further court order. Official inflation dropped 20% to 599%; drop queried by analysts.

New constitution adopted 4 January after 21 days of often acrimonious negotiations. President Karzai’s bid to retain strong presidency largely successful. Presidential elections scheduled for June but UN said unlikely as security concerns meant only 3% of voters registered. Violence worsened after Loya Jirga lull. Over 70 deaths, mainly around Kandahar. Canadian peacekeeper, British soldier killed in suicide blasts 27, 28 January in Kabul. 29 January 7 U.S. soldiers killed in apparently accidental weapons cache blast in Ghazni. Sixteen Afghan civilians killed, 57 wounded in 6 January strike aimed at Provincial Reconstruction Team’s office. In 18 January bombing U.S. claimed to have killed 5 militants; Saghatho village officials claimed 11 civilians were killed.

Thousands marched through streets of Hong Kong 1 January calling for full democracy in former British colony.

Bhutanese military claimed to have wiped out all 30 anti-Indian insurgent camps in Bhutan. Chief ministers in Indian northeast called for Myanmar and Bangladesh to do same. ULFA insurgents retaliated with 3 attacks on oil pipelines in upper Assam. PM Vajpayee announced early elections for April to seek new mandate. Government’s decision to abolish 9 municipal districts in Uttar Pradesh 14 January resulted in 4 days of violent demonstrations, over 60 arrested. Karbi and Kuki ethnic clash in Assam killed 3 on 19 January. 

Breakthrough announcement of bilateral India-Pakistan 16-18 February talks after 6 January meeting between Indian PM Vajpayee and Pakistan’s President Musharraf. All Parties Hurriyat Conference (Kashmir separatist alliance) met Vajpayee in New Delhi 23 January and confirmed their commitment to peaceful resolution of Kashmir issue. Violence continued between hardline Kashmiri separatists and Indian forces. Grenade thrown by suspected militants at mosque in Jammu 8 January wounded 18. Separate clashes between Indian troops and Kashmiri militants claimed 3 soldiers, 22 militants including several separatists leaders. Pakistan proposed March talks to discuss bus service between Kashmir capitals Muzaffarabad and Srinagar, opposed by Kashmiri militants.

Violence continues in Aceh after Free Aceh Movement (GAM) called for 2 day ceasefire to facilitate release of 80 hostages. Indonesian military (TNI) agreed on condition GAM formally renounce tactic of civilian hostage taking. Total of 143 captured separatists to be transferred to detention centres on Java. Explosion in cafe 10 January in South Sulawesi town of Palopo killed 4. Police questioned and released 7 people in relation to blast. Cache of weapons found in Poso by authorities, suspected links to Jemaah Islamiah. Supreme Court upheld Bali bomber Amrozi’s death sentence. Trial commenced 27 January of Mohammad Rais accused of recruiting Marriot hotel suicide bomber. Threat of state of emergency being declared in West Papua ahead of elections. Tensions rising on border with East Timor (see East Timor section). National Intelligence Agency (BIN) to be given broader powers after President Megawati signed decree authorising agency to open offices in all provinces, regencies and municipalities across Indonesia.

Pyongyang offered ‘bold concession’ 6 January after plans for 6-way talks stalled in December: U.S. economic aid, end to sanctions and removal from ‘axis of evil’ list in return for suspended nuclear power program and halt to nuclear weapon construction. Unofficial U.S. delegation visited Yongbyon nuclear site, noted empty spent-fuel facility. North Korea claimed the 8,000 fuel rods had been reprocessed to extract plutonium. Visit seen as North Korean effort to show nuclear capabilities. Gestures to Japan indicated attempts to normalise relations before new talks.

Informal ceasefire again agreed between Karen National Union (KNU), Myanmar’s largest rebel group, and Yangon. KNU senior figure insisted further talks needed. Karen National Progressive Party claimed 14 January that Myanmar troops had forced 2,000 ethnic Karennis from their homes. Government released 26 National League for Democracy members.

Conflict with Maoist rebels continued unabated. Mayor of southern city of Birgunj killed 15 January; bus explosion killed 3 on 16 January; government soldiers killed 7 Maoist rebels in Dolokha district 21 January. Students claimed anti- monarchy protests in Kathmandu and Pokhara resulted in 120 arrests. Pro-democracy protesters in Kathmandu 30 January called for King Gyanendra to fire loyalist PM. Maoists indicated could accept constitutional monarchy if king gave up control of army.

Parliament’s vote of confidence extended President Musharraf’s presidency until end of 2007. Vote followed deal with Islamist coalition (MMA) in exchange for promise to retire as chief of army staff by end of 2004. Musharraf addressed parliament for first time since coup 4 years ago, promised to clamp down on extremism; heckled by opposition lawmakers during speech. Two planes containing some opposition members diverted, preventing members’ attendance at address. Karachi car bomb outside Anglican cathedral 15 January wounded 11. Western intelligence sources said Pakistani scientists traded uranium enrichment technology with North Korea, Libya and Iran. Government admitted nuclear scientists may have been involved in proliferation deals. Officially 9 nuclear scientists detained, causing domestic upheaval as supporters condemned arrests of ‘national heroes’. Dr Qadeer Khan, ‘father of the bomb’, sacked as government scientific advisor 31 January.

Legality of 5-month adjournment of parliament questioned by ombudsman. Government adjourned parliament to escape vote of no confidence after failing to amend constitution. Deployment of 300 Australian police and civil servants to address growing lawlessness as condition of Australian aid program to take place within weeks.

President Arroyo announced progress in peace talks with rebel groups. Exploratory talks announced for February between government and secessionist Moro Islamic Liberation Front (MILF). Bomb in Mindanao linked to local political rivalries killed 10. Formal talks between government and communist New People's Army (NPA) also to resume in February. NPA attacked power plant 10 January killing 3. President Arroyo met Malaysian PM Badawi in Manila for talks on southern peace process. Malaysia to send truce monitors. Military officers under investigation following accusations that defence secretary ordered soldiers to spy on opposition candidates for presidential elections.

Feud between President Kumaratunga and PM Wickremesinghe continued with both sides intransigent over control of defence ministry. Sri Lankan government demanded 9 January Kumaratunga renegotiate ceasefire with Tamils or give up security portfolio appropriated in November. Kumaratunga claimed she could keep office 1 year longer than expected, until 2006, due to early investiture and second secret inauguration ceremony: claim rejected by government. Snap elections possible as Kumaratunga’s Sri Lanka Freedom Party (in opposition) signed alliance with Marxist People’s Liberation Front (JVP), Sri Lanka’s third largest party, creating The United People’s Freedom Alliance. JVP opposed to devolution of power to minority Tamils. Tamil Tigers (LTTE) continued to warn that peace process under threat. Norway replaced leader of monitoring mission whom Kumaratunga had accused of anti-government bias. Delegation from LTTE travelled to Norway for talks 28 January.

Under U.S. pressure, President Chen Shui- ban modified language of proposed 20 March referendum: voters now to be asked whether they approve increasing purchases of U.S. weapons should China fail to redeploy missiles aimed at Taiwan; earlier version involved direct call for removal of missiles. China condemned revised language, saying referendum would bring tensions to “brink of danger”. French President Jacques Chirac called poll “grave mistake”, angering Taipei.

Wave of violence in south blamed on separatist Islamist militants. Weapons depot looting and arson attacks on 21 government schools 4 January, followed by 10 deaths in several incidents. In response, martial law declared in Pattani, Narathiwat and Yala provinces in predominantly Muslim south. Arrest warrants for 4 Muslim militants issued. Security clampdown fuelling resentment. Thai PM Thaksin Shinawatra blamed lethal machete attacks on 3 Buddhist monks as work of separatists attempting to ignite religious conflict.

Government called for UN to extend its mission beyond 20 May deadline. At present 2000 UN personnel in East Timor. UN Secretary General to report to Security Council in February. Australian Defence Force chief, General Peter Cosgrove, said his troops should remain in East Timor even if UN pulls out in May. Two issues raising tensions on border with Indonesia: East Timorese upset by Indonesian military exercises on Palau Batek, small island off coast of East Timorese enclave. Secondly, group composed of disgruntled former Fretilin members, Kolimau, allegedly infiltrating from East Timor into West Timor to recruit former militias there to help destabilise East Timor once UN peacekeepers withdraw May 2004.

Turkey offered to hold trilateral talks with Armenia and Azerbaijan over disputed Azerbaijani territory, occupied by Armenian forces since 1993.

Authorities rejected opposition party appeal for release on bail of dozens of detainees arrested during demonstrations following fraudulent 15 October presidential election. Baku courts ruled 4 opposition leaders and editor of opposition daily must remain in pretrial detention for further 3 months. Council of Europe and Human Rights Watch condemned government’s post-election crackdown.

Failed attempts by NATO's Stabilisation Force (SFOR) to locate former Bosnian Serb president Radovan Karadzic and military leader Ratko Mladic caused Hague War Crimes Tribunal to question Bosnian and Western political will. Posters in support of Karadzic appeared in his wartime base, Pale, after 4-day NATO-led operation failed. Police arrested former president Jelavic on organised crime charges. High Rep. Paddy Ashdown launched attempt to unite city of Mostar institutions presently divided between Bosnian Muslims and Croats.

Conflicting versions of end to last month’s incursion by Chechen rebels into neighbouring Dagestan. Russian officials say troops killed all but 3 rebels; latter say most made it back to Chechnya. Meanwhile, fighting continues with no end in sight. Official Russian statistics showed sharp rise in number of rebel attacks in 2003.

Explosion 11 January destroyed buildings; no one claimed responsibility. Truce between nationalists and French government has lasted 2 months.

Prospects for reunification improved as new coalition government formed in Turkish Cyprus. Pro- reunification Republican party leader and new prime minister Mehmet Ali Talat joined by Democrat Party’s Serdar Denktash, son of President Rauf Denktash. 1 May set by new government as date to find solution based on previously rejected UN plan. EU leaders pushed Turkey to encourage resolution of Cyprus issue in light of its bid for EU membership. Turkish PM Erdogan met UN Secretary General Kofi Annan 24 January and asked for renewed efforts by UN to find solution. Annan conditioned talks on both sides agreeing to UN blueprint as basis for negotiations and referendum on results. Sec. State Powell indicated willingness of U.S. to help sides reach Agreement.

Mikheil Saakashvili received over 96% of vote in 4 January presidential election, reported by international and local observers to have been significantly fairer than 2 November parliamentary vote: inaugurated 25 January amid festive atmosphere in Tbilisi. New parliamentary election set for 28 March. Following Saakashvili victory, Aslan Abashidze, authoritarian leader of Ajara region, reimposed state of emergency and arrested members of pro-Saakashvili youth organisation, Kmara. Indications Abashidze’s regime weakening vis à vis Tbilisi; following conciliatory gestures from both sides, tensions high in anticipation of move by Abashidze’s opponents, backed by Tbilisi, to oust him. U.S. said would help pay for closure of Russian military bases in Georgia, including one in Ajara, after Russia claimed withdrawal would take 11 years. Following meeting with UN special envoy Heidi Tagliavini, Abkhaz foreign minister said ready to resume peace talks with Tbilisi. Turkey seeking mediation role.

President Nursultan Nazarbayev warned international organisations to stop interfering in Kazakhstan’s internal affairs following widespread criticism of restrictive draft media law, approved by parliament in December. Law still to be considered by senate.

Head of UN Mission in Kosovo (UNMIK) Harri Holkeri warned Kosovo’s parliament it had no authority to debate changes to Constitutional Framework. Urged Serb leaders to participate in working groups on plan for implementation of UN’s standards (to be met before discussion of final status) after they refused to participate following UNMIK’s rejection of their objections to the Kosovo standards document. UNMIK called on Belgrade to return more than 200 exhumed bodies to Albanian Kosovar relatives. Hague tribunal allowed 3 indicted war criminals to be tried in Serbia. Kosovo PM Rexhepi replaced senior official responsible for liaison with UNMIK at behest of UNMIK, who accused official of undermining public opinion on cooperation between government and UN mission.

Discovery of listening devices in offices of several opposition MPs provoked political storm. MPs blame National Security Service (NSS), while government says opposition trying to generate controversy ahead of 2005 elections. Seven opposition parties joined to form united bloc; say they will back 1 candidate to run against President Akayev.

Talks held in Brussels 16 January between officials from EU, Moldova and Ukraine regarding possible joint border monitoring regime to stem smuggling across Transdniestrian portion of Moldova-Ukraine frontier. In Tiraspol, Transdniestrian officials again rejected idea of placing OSCE peacekeepers in region between breakaway republic and Moldova.

40-year-old church dispute re-surfaced. Government attempted to maintain unity in Macedonian Orthodox Church (MPC) by arresting Orthodox Bishop Zoran Vraniskovski, who advocates return to Serbian Orthodox Church (SPC) control. Autocephaly for MPC, declared in 1967, not recognised by Serbian Holy Synod and therefore by other Orthodox churches. Bishop Zoran reported to have support of 30% of Orthodox Macedonian monks. Ten years after being established Albanian-language Tetovo University given full legal status 21 January amid protests by ethnic Macedonian opposition parties.

DUP leader Ian Paisley to retire from European Parliament in June, but will remain Assembly Member and head of DUP. Review of Good Friday Agreement to begin 3 February. Review talks team boosted by defection of former Ulster Unionists. DUP had first face to face meeting with Irish government 29 January marking ‘new phase’ in relations.

Political instability continues. On 27 January Parliament failed to pick Speaker, and second session scheduled for 30 January postponed indefinitely. Process stalled by disagreement between 2 largest democratic parties, Democratic Party of Serbia (DSS) and Democratic Party (DS). DSS refuses to join majority government with DS unless DS cleans house of allegedly corrupt elements. DSS efforts to form minority government with Serbian Movement of Renewal-New Serbia coalition (SPO-NS) and G17+ failed. DSS leader Vojislav Kostunica’s recurrent suggestion to form a “concentration” government of all political parties including parties of war crimes indictees Slobodan Milosevic and Vojislav Seselj, failed due to refusal of DS and G17+ to support. Threat of new elections looms. Newly-passed US appropriations bill mentions arrest of Hague indictee Ratko Mladic as condition of U.S. financial assistance. Parties with either explicit or ambiguous anti-western positions now hold majority of parliamentary seats, and Milosevic-era oligarchy has played strong and worrying role in elections and coalition negotiations.

Spain’s Constitutional Court upheld ban on Basque separatist party Batasuna after it refused to condemn ETA, the pro-Basque independence group.

Court sentenced Shamsuddin Shamsuddinov, deputy chairman of opposition Islamic Renaissance Party (IRP), to 16 years in jail on variety of charges, including organising illegal armed group during Tajikistan’s 1992-1997 civil war. IRP says charges part of crackdown on opposition and show regime’s increasing disregard for 1997 peace agreement which ended war and brought IRP into government. President Rakhmonov sacked presidential guard commander, adding to growing list of officials sacked in recent weeks.

Under U.S. pressure, authorities lifted exit visa requirement for Turkmen citizens, but move unlikely to herald significant change in region’s most repressive state.

Turkish government agreed to compensate Turkish Kurds for human rights abuses at hands of security forces. Signed total ban on capital punishment. Military voiced concerns about Kurdish federation in northern Iraq, indicated federation should be based on geographical, not ethnic, lines. Incirlik airbase near Syrian border reopened to U.S. for logistical and humanitarian missions, after being closed for duration of Iraq war.

Authorities rejected second attempt by Birlik, Uzbek opposition movement, to register as political party. International NGOs under increasing pressure from government, with new registration requirements. Government concerned by possible impact of NGOs on political situation following Georgian revolution

President of landlocked Bolivia called on Chile to hand over strip of coastline seized in 1879-83 war – President of Chile had previously offered economic corridor but refused to discuss land transfer. U.S. increasingly concerned about stability of Bolivia, called for more aid from international community to support economic reform.

Senior FARC rebel leader, Simón Trinidad, captured in Ecuador 2 January – most senior rebel leader captured in FARC’s 40-year history. In new campaign, army began pushing into rebel-held parts of country. Leader of AUC paramilitary unit that disarmed in November gave unprecedented address to Congress, calling for legislation to protect paramilitaries who disarmed. Organization of American States agreed 25 January to monitor disarmament of paramilitaries. EU called on government to respect rule of law, in veiled criticism of emergency detention powers for military, approved by Congress in December.

Heading towards political and economic crisis. At least 5 killed 28-29 January in clashes with police after 48-hour strike over proposed economic austerity measures turned violent. After changing constitution last year to allow him to run for second term in May 2004 elections, President Hipólito Mejía now seeking further electoral reform to strengthen his candidacy. Moves causing turmoil in his ruling PRD party.

Thousands marched to protest economic policies of President Gutierrez 21 January, on fourth anniversary of indigenous movement’s seizure of government institutions that led to Gutierrez presidency.

Newly elected President Oscar Berger took office 14 January. Nobel Peace Prize winner Rigoberta Menchu agreed to join government in peace accord monitoring role. Government agreed to UN establishing independent commission to investigate resurgence of rural illegal paramilitary groups.

Strikes and protest marches against President Aristide continued almost daily. Aristide warned 17 January that protests were attempts at coup d’état that would lead to death and destruction throughout country. On 18 January unidentified gunmen fired on protesters, killing 1 and wounding 6. Up to 20,000 marched in Port-au-Prince 27 January, calling for Aristide’s resignation. Terms of most legislators expired 12 January, rendering parliament powerless. Aristide and opposition unable to agree on new elections. Amnesty International called for investigation of human rights abuses against demonstrators.

Interior minister warned of possible marches, road blocks and national strike during February 18-20 convention of coca growers in Lima. Widespread dissatisfaction with President Toledo may lead to further protests in coming months. Former spy chief Vladimiro Montesinos went on trial 20 January on charges he arranged supply of arms to Colombian FARC rebels.

U.S., Mexico and Organization of American States called on President Chavez to allow recall referendum on his rule to take place. Chavez claimed that his opponents had not collected enough valid signatures for referendum to take place - but he was prepared for electoral council to determine otherwise. He also pledged to step down if defeated in recall. After dispute with central bank directors, Chavez threatened to take over bank.

Riot police dispersed protesters, among them 100 MPs, demonstrating against 30 December court decision to freeze assets of FLN, ruling political party. MPs part of FLN faction loyal to Ali Benflis, former prime minister sacked by President Bouteflika, who heads rival FLN faction. Government agreed to remove officials in Berber-dominated Kabylia region elected in 2002 polls marred by violence and boycott. Talks broke down, however, over issue of giving official status to Berber language. Presidential elections due in April.

New leader of Muslim Brotherhood, Mohamed Mahdi Akef, pledged moderation and peaceful opposition to regime. President Hosni Mubarak said 1 January that his son, Gamal, would not inherit power; statement strongest response yet to speculation that Mubarak preparing dynastic succession. Diplomatic relations with Iran likely to be restored in coming days.

Guardian Council, supervisory body composed of hardline judges and clerics, vetoed candidacies of close to half those intending to run in February general election, including 80 current MPs. Disqualifications caused storm of protest and sit-in by MPs. Guardian Council later reinstated 1,160 of over 3,000 vetoed candidates, but reformists, led by President Khatami, said move insufficient. Crisis deepened following threat by reformists to boycott election if disqualifications upheld. Meanwhile, U.S. and European diplomats unhappy with Iranian progress in suspending enrichment of uranium – Iran reportedly still acquiring enrichment-related equipment. IAEA negotiating with Iran to ban such activities.

U.S. looking to amend plan for handover of power to provisional Iraqi government as pressure mounting for elections to be held in June. Pressure coming chiefly from Ali Hussein al-Sistani, leading Shiite cleric, and his followers: 100,000 marched through Baghdad 19 January. American and UN officials discussed possible modifications to original plan, which calls for transitional assembly to be selected by local caucuses rather than directly; all options reportedly back on table, including elections. Sistani said would not drop election demand unless UN agreed with U.S. contention that elections not feasible; UN assessment likely to be completed in February. Lakhdar Brahimi appointed special adviser to Kofi Annan and expected to devote much time to Iraq. Two-man team arrived in Baghdad to inspect security situation for potential UN return. Attacks continue unabated: 18 January suicide bombing outside CPA HQ killed 25, and attacks across Iraq 31 January left at least 18 dead. 300 Coalition soldiers, including 253 Americans, killed by hostile fire since declared end of combat operations on 1 May 2003.

Investigation of Israeli PM Ariel Sharon on bribery and corruption charges could result in indictment in coming weeks; if indicted, PM may be forced to resign. Sharon repeated his plan to unilaterally disengage from parts of West Bank and Gaza if no progress made toward peace in coming months. Palestinian PM Ahmed Qurei called for international pressure on Israel to halt construction of controversial security fence; said Sharon plan to withdraw behind fence would destroy chances of 2-state solution. 100,000 Israelis, including many settlers, demonstrated against Sharon in Tel Aviv 11 January, protesting plan to dismantle some settlements as part of withdrawal. Prisoner exchange between Israel and Hezbollah completed 29 January (see Lebanon section below). Violence continued: suicide bus bombing in Jerusalem left 10 dead 29 January; 8 Palestinans killed in Israeli raid in Gaza 28 January; female Hamas suicide bomber killed 4 Israelis in Gaza 14 January.

Relations with Israel deteriorated over security fence. Amman says fence will make viable Palestinian state impossible, and could lead Palestinians to move to Jordan, where they already make up majority of population.

Following years of negotiation, German-mediated prisoner exchange between Israel and Hezbollah took place 29 January. Deal saw Israel release 23 Lebanese, 400 Palestinian, and 12 other Arab prisoners in exchange for Israeli businessman and bodies of 3 soldiers. Agreement reached despite violence along Lebanese border and tensions between Israel and Syria, Hizbollah’s main backer. On 19 January Hizbollah guerrillas fired anti-tank missile at IDF bulldozer which had crossed several meters into Lebanese territory, killing Israeli soldier. Israeli warplanes struck Hizbollah positions in southern Lebanon following day.

American and British inspectors returned to Libya to prepare for dismantling of WMD programs. Extent of Libyan nuclear advances and sophistication of international black market for WMD technology surprised Western officials, deepened proliferation concerns. Some Arab countries reportedly complaining behind scenes that Libyan renunciation of WMD weakens prospects of getting Israel to do same. Israeli officials, meanwhile, said secret talks with Libya on improving ties held in Paris; Libya denied talks took place.

Former Islamist mayor released on bail 20 January after being detained for 2 weeks following return from exile in Belgium. President Taya accused Islamists of seeking to destabilise government.

Signs of modest improvement in bleak human rights situation. King pardoned 33 political prisoners 7 January, weeks after announcement that Justice and Reconciliation Commission will be created to investigate past abuses.

Crown Prince Abdullah announced launching of reform process in cautious televised speech. New satellite news channel began broadcasting; opening bulletin delivered by female presenter. Six killed in capture of suspected terrorist in Riyadh 29 January, including 5 members of Saudi security forces.

President Assad dismissed Israeli President Moshe Katsav’s invitation to Jerusalem for peace talks, but both sides agreed to Turkish mediation offer. David Kay, head of U.S. group searching for Iraq WMD, said some weapons and documents may have been hidden in Syria, adding to already strong U.S. pressure on Damascus for cooperation in war on terror.

UN Security Council followed UN Secretary-General Kofi Annan’s recommendation to extend UN mission in area (MINURSO) 3 months to allow Morocco more time to consider peace plan. Plan, which calls for referendum on status of Western Sahara, already accepted by independence-seeking POLISARIO front.

Website posted statement purportedly from Yemeni branch of al Qaeda threatening to strike U.S. interests in retaliation for 2002 killing of militant leader by CIA drone plane. Despite threat, government making progress in efforts to improve security situation.