In his long-awaited policy speech on Sunday, Israeli Prime Minister Benjamin Netanyahu accepted the creation of a Palestinian state - but only on condition that it was demilitarised, with no army, no control of its air space and no way of smuggling in weapons.

And he refused to halt the expansion of Israeli settlements, which US President Barack Obama demanded earlier this month in Cairo should be stopped. Netanyahu said settlers were not "enemies of peace" and that he backed the "natural growth" in existing settlements.

A Pandemic Emergency Committee meeting in Sydney has left Australia's influenza alert at the contain level, despite the World Health Organisation declaring the swine flu virus a global pandemic.

Victoria's alert level was upgraded to 'modified sustain' last week.

More than 1,300 people have been confirmed as having swine flu in Australia; six people diagnosed with the virus are in hospital but underlying medical conditions may have exacerbated the virus's effect on them.

Health Minister Nicola Roxon says there is no need to cancel sporting events and other public gatherings.

The Federal Government is continuing its attack on the Commonwealth Bank for increasing its home loan rate.

The bank announced on Friday that it would increase its standard variable rate by 0.1 per cent.

Treasurer Wayne Swan and Prime Minister Kevin Rudd have both condemned the move.

Mr Rudd says the Commonwealth Bank should reconsider its position.
"Everyone in Australia is pulling together to try and lift the country out of the global recession," he said.

"I'd say to the Commonwealth Bank, join us and don't head in the wrong direction ... I think it would be good if everyone was on board for that."

Iran and North Korea are working together to develop ballistic missiles and have made significant progress, the head of the Pentagon's Missile Defence Agency says.

"It really is an international effort going on out there to develop ballistic missile capability between these countries," Army Lieutenant General Patrick O'Reilly told a forum on Capitol Hill.

Putting aside any political prisms, it's hard to see the David Letterman- Sarah Palin dust-up in any other way than this: Letterman was wrong for joking on his show about grown men having sex with a teenage Palin daughter, either teenage Palin daughter, and he ought to flat-out apologize.

Australia's largest and wealthiest Anglican Diocese, Sydney, has been rocked by the global financial crisis, losing more than $100 million on the sharemarket.

Sydney's Anglican Archbishop, Dr Peter Jensen, has written to parishes about the 'very significant losses' after the Archdiocese borrowed to invest on the sharemarket, which crashed at the end of 2008.

The letter states that the strategy had made a special $20 million building fund possible in 2007, but that the investment value has now fallen by more than half.

The loss means funding for diocese services next year has been slashed to just over $5.5 million.

The Security Council's five permanent members agreed on Wednesday on a draft resolution that would ratchet up sanctions against North Korea by concentrating on its financial transactions and its arms industry, including allowing for inspections of its cargo vessels on the high seas.

Global military spending rose 4% in 2008 to a record $1,464bn (£914bn) - up 45% since 1999, according to the Stockholm-based peace institute Sipri.

In contrast with civilian aerospace and airlines, the defence industry remains healthy.

"The global financial crisis has yet to have an impact on major arms companies' revenues, profits and order backlogs," Sipri said.

Peace-keeping operations - which also benefit defence firms - rose 11%.
Missions were launched in trouble spots such as Darfur and the Democratic Republic of the Congo.

Australian Greens leader Bob Brown says he cannot afford to pay a $240,000 Forestry Tasmania bill, a move which could see him lose his seat in the Senate.

Senator Brown was ordered to pay the money after losing a federal court case to stop logging in the Wielangta Forest in south-east Tasmania.

He says he has been told he could end up bankrupt if he does not pay, meaning he would lose his Senate seat.

Senator Brown says he is now campaigning to raise the money which must be paid by the end of the month.

Former Cuban leader Fidel Castro says US allegations that a Washington couple spied for Cuba are a "ridiculous tale".

In an editorial, he questioned the timing of their arrest - days after the Organisation of American States lifted Cuba's 1962 expulsion from the group.

The couple, retired state department official Walter Kendall Myers and his wife, are accused of having passed on information to Cuba for three decades.

The pair, both in their 70s, face up to 20 years in prison if found guilty.

In his article, Mr Castro described the case as an "espionage comic strip".

On April 13, the U.N. Security Council condemned North Korea's rocket launch earlier in the month.

Within nine hours, North Korea denounced and rejected the Security Council statement; expelled international inspectors and the U.S. technical team from its Yongbyon nuclear facilities; walked away from the Six-Party Talks and all previous agreements; threatened to strengthen its "self-defensive nuclear deterrent"; and said that it would restore its nuclear plant to normal operation and reprocess spent fuel rods.

Even as China's state media on Tuesday slammed the country's massive U.S. debt purchases, U.S. Treasury Secretary Timothy Geithner said China's leaders believe in "the basic resilience and dynamism of the U.S. economy."

Geithner said the economic and finance officials he met with during his two-day trip did not repeat concerns they have expressed publicly over the past few months about the deteriorating value of their holdings of U.S. Treasuries or the U.S. dollar position as the world's dominant reserve currency.

If outlanders tend to associate Australia with kangaroos, broad-brim leather hats and an opera house, many Australians are different. They think of iron ore and bauxite, copper and coal, nickel, gold and uranium, a trove of mineral riches that is their nation's birthright and the bedrock of its prosperity.

Australia vetoed part of a $1.8 billion bid for Oz, a large zinc miner, because the military raised the prospect of Chinese espionage at an Oz mine not far from an aerospace test site.