Pakistan's key role in the counterterrorism war, tensions with nuclear rival India, and disputed Kashmir were among the issues for discussion as President Bush met with Pakistani counterpart Pervez Musharraf at the presidential retreat in Camp David, Md. Their talks came a day after Bush designated a Qatari national and alleged Al Qaeda operative as an enemy combatant, while dismissing criminal charges against him. Ali Saleh Kahlah al-Marri (l.) could eventually be tried by military tribunal. He's the third person - but the first non-US citizen - to be declared an enemy combatant, which greatly limits his legal rights.

New details emerged from a US commando strike last week on an Iraqi convoy suspected of carrying senior members of the ousted regime, possibly including Saddam Hussein or members of his family. At least five Syrian border guards were hurt in the operation, US military officials said, and it was possible that American forces pursued fleeing vehicles into Syria. The main attack, on the Iraqi border village of Dhib, killed an undisclosed number of people and destroyed several homes, officials said. (Related stories, pages 1, 6.)

Federal Reserve policymakers are widely expected to cut key interest rates to their lowest level in 45 years Wednesday, giving a nudge to the sluggish US economy. Market analysts are divided, however, on whether the Fed will announce a quarter- or half-percentage-point trim at the conclusion of their two-day meeting. After a dozen cuts since 2001, the bellwether federal funds rate stands at 1.25 percent.

A report that may affect the Fed decision found consumer confidence held steady in June. The Conference Board, a New York-based business research group, said its Consumer Confidence Index dipped to 83.5 from a revised 83.6 reading in May. Most economists had anticipated a bigger decline.

Bush and Vice President Cheney took in another $6 million for their reelection campaign at separate GOP fund-raising events in New York and Hopkinton, Mass., Monday, bringing their total for the past week to just under $12 million. Protesters turned out at both events to voice objections to administration policies from tax cuts to the war in Iraq.

The state of New Jersey and the advocacy group Children's Rights were to announce settlement of a class-action lawsuit as the Monitor went to press. Children's Rights sued the state's Division of Youth and Family Services four years ago, accusing it of putting foster children at risk of abuse and neglect. Pressure for a resolution intensified in January when the remains of a foster child, Faheem Williams, were discovered in a dumpster and his two brothers were found malnourished in the basement of a home in Newark.

A former employee of Microsoft Corp. pleaded not guilty to stealing $17 million in software from the industry giant at a court hearing in Seattle Monday. Richard Gregg is charged with 62 counts of mail and computer fraud for allegedly reselling software he ordered via a company system.

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