World Financial Markets were in an uproar after the government of Brazil took the first steps in devaluing the nation's currency, the real, by 8 percent. The Bovespa stock index, South America's largest, has lost 13 percent of its value since Jan. 1. Central Bank president Gustavo Franco also quit, saying the world's eighth-largest economy needed new policy changes. An already volatile preelection climate in Israel was rocked by news of a Watergate-style break-in at the Washington office of a key adviser to prime-minister candidate Ehud Barak. An aide to Barak, the Labor Party challenger to incumbent Benjamin Netanyahu, said vital files were stolen, and a Jeru-salem newspaper reported that files not removed apparently had been copied. The office is used by US political strategist Stanley Greenberg, who also has worked on election campaigns for President Clinton. Last-minute snags were resolved, and Albanian separatists in Kosovo handed back to the Yugoslav Army eight Serb soldiers they'd been holding since late last week. Earlier, it appeared the release would fall through because of what a source close to the deliberations called "unacceptable demands" by the Albanian-rebel Kosovo Liberation Army. It was not immediately clear whether the Serb side was freeing Albanian prisoners in return. Their differences settled, Japan's ruling Liberal Democratic Party and the opposition Liberals agreed to form a coalition government aimed at easing the passage of financial legislation in parliament. A key to the deal apparently was Prime Minister Keizo Obuchi's agreement to include at least one Liberal leader in his Cabinet. The parties also compromised on the role of Japan's armed forces in UN peace-keeping missions, an issue that had threatened to scuttle the negotiations. Under cover of darkness, two more Christian chapels were burned by suspected Hindu attackers in western India. The incidents came in an area visited last weekend by Prime Minister Atal Behari Vajpayee, who deplored the sectarian violence that began at Christmas and called for a national dialogue on religious conversions. Hindus accuse Christian evangelists of forcing conversions on the poor since Sonia Gandhi, a Roman Catholic, assumed leadership of the opposition Congress Party last year. There was worry about a new spiral of political violence in Haiti after President Ren Preval's sister was wounded in an apparent assassination attempt. The attack, in Port-au-Prince, the capital, killed her driver. It came hours after the president announced he no longer recognized the validity of parliament and would appoint a new prime minister by decree. Opposition leaders say Preval's move places Haiti on the return path to dictatorship. The European Union was described as being in crisis mode because of a senior official's threat to resign. Jacques Santer, president of the EU's executive commission, issued the vow if its 20 members are dismissed because of alleged fraud. A censure motion against the commissioners is to be voted on today by the European Parliament. Santer's resignation would leave the EU leaderless just as it's about to consider the admission of new members from Central and Eastern Europe.