Using some of his most pointed rhetoric to date, Iran's president called Israel a "fake regime" that cannot continue to exist. Mahmoud Ahmadinejad also told a news conference Monday that there no longer is any need for Iran and the Bush administration to hold their planned talks on neighboring Iraq, since that nation now has a fledgling government. He hinted that Iran is considering withdrawing from the Nuclear Non-proliferation Treaty and the International Atomic Energy Agency, asking, "What has more than 30 years of membership ... given us?" The UN Security Council has told Iran it has until Friday to halt the enrichment of uranium, which could be used as fuel for nuclear weapons. But Ahmad- inejad dismissed the possibility of sanctions if enrichment isn't suspended, saying, "Those who speak of [them] would be damaged more than us."

Sharpening his confrontation with the new Hamas-led government, Palestinian Authority President Mahmoud Abbas warned that he holds "clear and definite authority" to remove it from power. But he said he didn't wish to use that authority under the Palestinian Constitution. Abbas, who is seen as a relative moderate vis-à-vis Israel, also said Hamas has little choice but to "establish communication" with the Jewish state. Asked for comment, a Hamas spokesman said the militant group wouldn't "leave in silence" and suggested that it would return to operating underground and renounce its unofficial truce with Israel.

Nonessential US Embassy personnel and their families were ordered to leave Nepal Monday amid diplomatic efforts to broker a compromise between King Gyanendra and pro-democracy activists that were described as "frantic." The latter are expected to turn out Tuesday in the hundreds of thousands for a rally to be led by two former prime ministers. Last Friday, Gyanendra offered to hand power to an alliance of political parties but with no guarantee that he wouldn't take it back again, as happened in February of last year. The offer was rejected.

Tamil separatist rebels were accused by Sri Lanka's military of trying to provoke race riots after six Sinhalese farmers were found shot to death, execution-style, in their fields late Sunday. Their deaths, plus those of two policemen and two rebels caught trying to set up an ambush Monday, bring to 80 the number of people in the island nation who've been killed this month. The rebels accuse the Sinhalese majority of discrimination.

Microsoft Corp. took its appeal of a huge fine for antitrust practices before the second-highest court in Europe, arguing that the penalty is illegal and should be overturned. The appeal before the Court of First Instance in Luxembourg is expected to take five days. Analysts say a win by the US software giant would be a heavy blow to European Union regulators, who imposed a $613 million fine in 2004 and ordered the company to market a version of its Windows operating system, minus a media player.

Immediate pressure to reform his nation's economy was being applied by the European Union after Hungarian Prime Minister Ferenc Gyurcsany won reelection in a runoff Sunday. His coalition of Socialists and the Alliance of Free Democrats appeared headed for 210 seats in the 386-seat parliament. He told his first news conference that the first 100 days of his new government would be "the era of the most intense reforms" as he tries to cut Hungary's huge budget deficit and switch to the euro over the next four years.

Residents of Australia's Northern Territory were bracing for one of the most powerful cyclones in the history of their continent. Forecasters rate cyclone Monica a Category 5 storm, with winds of up to 217 m.p.h. and a potential for devastation higher than cyclone Tracy, which leveled the city of Darwin Dec. 24, 1974. Monica is projected to reach Darwin Tuesday.

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