* Al-Qaeda seeks to expand its operations Al-Qaeda is reaching out from its base in Pakistan to turn militant Islamist groups in the Middle East and Africa into franchises charged with intensifying attacks on western targets, according to European officials and terrorism specialists.

* Musharaf wants to mediate ME peace Pakistan took initiative Saturday to bring about stability to the Middle East – by first attempting to make peace between Israel and the Palestinians.

* Taleban uses boy to behead ‘spy’ The Taleban in Afghanistan have used a boy of around 12 to behead a man they accused of spying for the US.

* Settlers: We’ll return to Homesh on Independence Day Thousands of right-wing followers plan to return to evacuated settlement; organizers say, ‘Independence Day is not just about barbeques, it’s about Zionism, values and settling the land’

* Iran invites West to build nuke plants Tehran on Friday invited Western nations to participate in the construction of nuclear power plants across Iran.

* Deadly Somalia clashes continue Heavy fighting between Ethiopian troops and Islamist militiamen has continued for a fourth day in Mogadishu, Somalia.

* Pentagon Invites Kremlin to Link Missile Systems The Bush administration is offering Russia a new package of incentives to drop its strong opposition to American missile defense sites in Poland and the Czech Republic.

* US eyes potential bomb sale to Israel Pentagon notifies Congress of miltary sales deal of up to $65 million, for bombs, spares, repair parts and US technical assistance

* Hezbollah slams UN over report of arms smuggling from Syria Hezbollah lashed out at the United Nations Security Council, saying reports of illegal arms smuggling from Syria to Lebanon were “inaccurate.”

* EU agrees breakthrough hate-crime law After six years of political wrangling, the European Union has agreed to make incitement to racism and xenophobia a crime across the 27-nation bloc, setting a jail sentence of at least one to three years.