A bankruptcy judge approved $2 billion in interim financing for WorldCom, allowing its day-to-day operations – among them MCI, the nation's No. 2 long-distance service – to continue. In New York, Judge Arthur Gonzalez also granted the Justice Department's request to appoint an independent investigator to examine alleged mismanagement, account irregularities, and fraud at WorldCom, which last month disclosed $3.8 billion in hidden expenses. That and other corporate revelations have fueled volatility on Wall Street. The Dow Jones Industrial Average closed Monday at 7784.58, its lowest level since October 1998. The Dow was up slightly at midday Tuesday.

Israel's missile strike against a Hamas leader was a "heavy-handed action" that "does not contribute to peace," the White House said. As well as the intended target, the attack killed 14 other Palestinians, most of them children. Spokesman Ari Fleischer said the US would convey its displeasure to Israel for staging an attack "knowing that innocents would be lost."

American jets struck military communications sites in southern Iraq's "no fly" zone, the US military said, responding to recent "hostile acts against coalition aircraft." Iraq doesn't recognize the northern and southern zones, imposed following the 1991 Gulf War. While there have been hundreds of such exchanges, they have increased in recent months amid speculation that the US may launch military action to remove Iraqi leader Saddam Hussein from power.

Priscilla Owen, Bush's controversial nominee for a spot on the 5th Circuit Court of Appeals, was among three judicial appointments taken up by the Senate Judiciary Committee. Opponents label Owen a conservative activist for her rulings on abortion rights cases as a state Supreme Court justice in Texas.

A South Dakota judge ordered a 5-year-old boy returned to his mother, in a dispute closely watched by Muslim groups. Last month, the judge gave temporary custody to Sally Barakat's father and stepmother, who objected to her plan to move to Egypt after marrying a national of that country and converting to Islam. On Monday, the judge said Barakat has the right to raise son Trevor as she sees fit but ordered her not to take him out of state until an agreement on visitation rights is reached.

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