Members of Yasser Arafat’s Fatah movement are locked in a bloody battle with al-Qaeda-linked Islamist rebels in the Ayn al-Hilwa refugee camp in Lebanon. Rebels attacked a checkpoint manned by the Palestinians. At least two people were killed. The rebels face the death penalty at the hands of Lebanese authorities and are fighting for their lives.

Israel’s Supreme Court issued a surprise ruling blocking the Israeli army from expelling three relatives of West Bank Palestinians who are suspected of organizing and planning suicide bombings. The court ordered the army to produce within 15 days the reasons for selecting the three relatives for expulsion. Meanwhile, Palestinian leader Marwan Barghouti appeared in an Israeli court on murder and terrorism charges. Before the trial began, Barghouti held his handcuffed hands in the air and shouted to reporters in Hebrew, English and Arabic, saying, “Peace will be achieved by the end of the occupation. No peace, no security.”

The London Guardian is reporting Germany’s most notorious postwar neo-Nazi Party was led by an intelligence agent working for Britain. Under Adolf von Thadden’s leadership, the National Democratic Party made a string of impressive showings in regional elections in the late ’60s, and there were widespread fears it would gain representation in the federal parliament. But according to both published and unpublished German sources, the man dubbed the “new Führer” was working for British intelligence throughout the years he led the party. The revelation seemed to support the theory that MI6 was seeking help from the neo-Nazi movement to counter the left-wing movements sweeping Europe after the uprising of May 1968 in Paris.

The Iranian President Mohammad Khatami on Tuesday spoke at a news conference with U.S.-backed Afghan President Hamid Karzai in Kabul and said the Bush administration is misusing the September 11 attacks to create an atmosphere of violence and war around the world. Khatami promised to help rebuild Afghanistan and said the only justification for any foreign presence in Afghanistan is to bring peace after nearly a generation of war. Khatami’s visit to neighboring Afghanistan was the first in 40 years by an Iranian head of state.

Meanwhile, the U.S. Navy confirmed Tuesday it’s seeking a large ship to carry helicopters and arms from the U.S. to the Red Sea, a day after denying it had placed such an order. The request has heightened speculation the U.S. is pre-positioning equipment to attack Iraq.

Yugoslavia and Switzerland have rejected the Bush administration attempts to press them into signing bilateral deals to prevent Americans from appearing before the newly formed International Criminal Court. The state Yugoslav news agency reported that the president, Koštunica, said those who would enjoy immunity from prosecution would be encouraged to keep committing crimes. Koštunica’s predecessor, Slobodan Milošević, is on trial at The Hague, and there’s a strong feeling in Belgrade the U.S. is using double standards.

Indonesia’s Human Rights Court has found the ex-governor of East Timor, Abílio Soares, guilty of allowing massacres when East Timor’s people voted for independence in 1999. The court sentenced him to three years in prison. Human rights groups around the world have criticized the trials in Jakarta as a sham and not a serious attempt to get to the hierarchy of the Indonesian military responsible for the killing in the referendum of 1999.

President Bush held a forum on the economy Tuesday, said he’s optimistic. He said, quote, “We’ve got the hardest-working people in the world. We’ve got the best tax policy in the world. I mean, we got a lot going for us.” The same day, the world’s biggest airline, American Airlines, announced it’s laying off 7,000 workers, the Federal Reserve said it might cut interest rates further, and the Dow Jones dropped over 200 points. The president offered no new programs or ideas to repair the economy, and he heard no dissent and no debate. Speakers in the closing session included three African Americans, two Latinos and two white women, who echoed Bush’s agenda and, in some cases, reflected his phrasing from recent speeches. Chief political adviser Karl Rove said he was, quote, “not aware” the White House had supplied the participants talking points, but said, “That’s not to say there weren’t any.” Democrats and a number of Republicans have heavily criticized the forum as a staged pep rally for the second Bush White House, which is ever mindful of the fate of President Bush’s father. According to The New York Times, former President Bush was popular after the Persian Gulf War, but lost the 1992 election in large part because of voters’ perceptions he no longer had control of the economy.

U.N. environment chief Klaus Töpfer has called on industrialized nations to assume responsibility for their role in causing the freak weather that has claimed scores of lives around the world. He told Germany’s Deutschland Radio there can no longer be any doubt that humans are partially to blame for the torrential rains that have wreaked havoc from Europe to Asia. Much of Prague is now underwater. Meanwhile, 200,000 people have been evacuated from the Czech Republic, and the death toll across Europe has reached 88 in what’s being called the worst flooding in more than a century. And in South Asia, monsoons have killed nearly 800 people, while parts of India suffer their worst drought in 15 years.

A new study published today in the Journal of the American Medical Association has found tobacco companies pressured drug companies to limit their marketing of nicotine gum and skin patches that help people quit smoking.

The Texas state parole board has voted unanimously against halting today’s scheduled execution of Mexican citizen Javier Suárez Medina, this despite the fact that the Mexican President Vicente Fox personally called Texas Governor Rick Perry and urged him to halt the execution to give officials time to review what he called the case’s numerous violations. The Mexican government, the United Nations and death penalty opponents say U.S. officials robbed Medina of his rights as a Mexican national by failing to inform him of his right to contact the Mexican Consulate for help.