Muslim terrorists in Iraq cut off the head of a Bulgarian hostage but spared a Filipino after his government reversed course and agreed to withdraw all its soldiers and police deployed there a month early. The Philippines has been a staunch ally of the US in the counterterrorism fight, but the withdrawal announcement "sends the wrong message" to hostage-takers, the State Department said. Another Bulgarian hostage is under a death threat, but the Sofia government said it's "not considering withdrawing our troops."

Other terrorists exploded a car bomb in Baghdad, killing 11 people and wounding 30 others in the worst such attack since the interim Iraqi government assumed power June 28. Gunmen also shot to death a senior official of the Ministry of Industry. On Monday, the chief of the Iraqi Olympic Committee survived an assassination attempt.

A long-awaited official report on the British role in toppling Saddam Hussein concluded that intelligence given to Prime Minister Tony Blair had "serious flaws" and came from "unreliable" sources. But it stopped short of blaming the prime minister or anyone else in his government. Blair said he accepted the findings but insisted that the war, in which Britain has been deeply involved, was not a mistake.

Wearying of criticism over its efforts in the campaign against AIDS, the Bush administration fired back at the global conference on the epidemic in Thailand. In remarks delayed 15 minutes by hecklers (above), administration coordinator Randall Tobias said the US "is spending nearly twice as much to fight global AIDS as the rest of the donor governments combined." He rejected a call by Secretary-General Kofi Annan for the US to give the UN $1 billion a year to spend on prevention and treatment. Bush has pledged $15 billion over five years to the anti-AIDS effort in Africa and the Caribbean.

Saying, "This is a once-in-a- lifetime chance," Olympics organizers urged ordinary Greeks to buy unsold tickets and prevent largely empty stadiums from being seen on worldwide TV when the Summer Games open next month. As of July 1, fewer than 2 million seats had been sold of the 5.3 million available for the two weeks of competition. Overall tourism in Greece is down 15 percent this year, analysts said, due to concerns about security at the Games, plus the high costs of air fares and hotel rooms.

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