Catching terrorists in Iraq by surprise, the US transferred political power to the interim government two days early. Following the ceremony in Baghdad, US administrator Paul Bremer left the country. The handover was welcomed by, among others, the European Union and Russia, but was scorned by Arab political analysts. Meanwhile, terrorists added a captured US marine and a Pakistani to the ranks of hostages threatened with beheading. And US military commanders denied reports that the most-wanted terrorist in Iraq, Abu Musab al-Zarqawi, had been captured.

NATO leaders meeting in Turkey, ignored violent protests nearby and agreed to train the security forces of Iraq's new government. But the US failed to win a commitment of troops from the alliance for peacekeeping in Iraq. The leaders also voted to send 3,500 more peacekeepers to Afghanistan, however, to reinforce the 6,500 already there. And they decided to end their mission in Bosnia by Dec. 31, with the European Union assuming responsibility for peacekeeping there.

For the first time, a homemade rocket fired by Palestinians in the Gaza Strip caused deaths, and a tough Israeli response was expected. The attack killed a man and a 3-year-old boy and critically wounded the latter's mother in the town of Sderot. Six others also were hurt. Hamas claimed responsibility for the attack and for blowing up an Army outpost, which caused another death and five more injuries. Prime Minister Ariel Sharon said he'd speed up plans for the voluntary evacuation of Gaza Strip settlers.

Voters in Serbia rejected a generation of hard-line nationalism and chose pro-Western Boris Tadic as president. He defeated ultranationalist Tomislav Nikolic by 300,000 votes Sunday and said his chief priorities included drafting of a new Constitution, orchestrating Serbia's entry into the European Union and NATO, and resolving the ethnic tensions in Kosovo. Three earlier elections were invalidated because of low voter turnouts.

A sea of marchers, estimated at more than 250,000, staged a protest in Mexico City Sunday demanding government action against violent crime and kidnappings that have tarnished the nation's image. Reliable statistics on crime are difficult to compile because of widespread distrust of the police, but kidnappings for ransom alone are estimated at 3,000 a year.

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