North Korea is holding a two-day state funeral for the late leader Kim Jong-il. Jong-il’s son and presumed successor, Kim Jong-un, led a military procession earlier today through the capital, Pyongyang.

Iran is vowing to block a key passage for the world’s oil supplies if the U.S. proceeds with new economic sanctions. On Tuesday, a top Iranian official said Iran would close off the Strait of Hormuz if the United States fully implements a measure that would sanction Iran’s oil exports, a major source of Iranian government revenue. About one-fifth of the world’s oil is said to pass through the Strait. The sanctions were passed as part of a congressional measure targeting Iran for its alleged nuclear activities and now await President Obama’s signature.

Thousands of Syrians demonstrated in the flashpoint city of Homs on Wednesday amidst a visit by a team of observers with the Arab League. The observers are in Syria to assess the Syrian government’s compliance with an Arab League plan to resolve Syria’s political crisis, including the withdrawal of state forces and weapons from residential areas, the release of political prisoners and the establishment of dialogue between the government and the opposition. Syrian activists say 70,000 people turned out for a march on the center of Homs but were dispersed by government forces. Meanwhile, Human Rights Watch says Syrian government forces have transferred hundreds of prisoners in Homs to military installations where the observers are barred. Activists also report at least 35 people were killed in nationwide violence on Tuesday, 14 of them in Homs.

In Egypt, the trial of former president Hosni Mubarak has resumed after a nearly two-month delay. Mubarak is facing charges for allegedly ordering the killing of protesters during the uprising against his regime.

The White House has announced President Obama will ask lawmakers for a $1.2 trillion increase to the federal debt ceiling. It would mark the last increase under the bipartisan spending deal reached in August when the United States faced the prospect of a debt default.

Democratic Senator Ben Nelson of Nebraska has announced he plans to retire instead of seeking re-election next year. Nelson served nearly two decades in Nebraska by fashioning himself as a centrist who maintained right-wing positions on a number of issues. His departure could threaten Democrats’ Senate majority. Nelson is the only Democrat in Nebraska’s five-member congressional delegation.

The White House has announced plans to nominate two former Treasury Department officials to the Federal Reserve. Jeremy Stein, a Democrat, is a Harvard University professor who has served on the White House National Economic Council and as an adviser to Treasury Secretary Timothy Geithner. Meanwhile, Jerome “Jay” Powell, a Republican, is a former financial executive who worked under George H. W. Bush. He spent nearly a decade with the private equity firm, the Carlyle Group, and worked as a lawyer and investment banker on Wall Street.

Two Swedish journalists have been sentenced to an 11-year prison term in Ethiopia. Martin Schibbye and Johan Persson were arrested in July on charges of aiding a rebel group and entering the country illegally. In Stockholm, the pair’s Swedish attorney, Thomas Olsson, criticized the verdict.

Thomas Olsson: “Eleven years in prison can, at the first glance, seem as a positive decision, if you think of the fact that the prosecutor wanted 18-and-a-half years. But you should always also remember that this is about two innocent journalists who have tried to do their work, and in that perspective, to sentence them to 11 years in prison is a very brutal verdict.”

Cuba has released more than 2,500 prisoners under a New Year’s amnesty announced last week. Cuba says it made the decision ahead of a visit from Pope Benedict XVI scheduled for the spring. A Cuban human rights group says five of an estimated 66 political prisoners were among those released.

Argentina has announced President Cristina Fernández de Kirchner has cancer and will soon undergo an operation. A spokesperson says the cancer is confined to Kirchner’s thyroid gland and has not metastasized. She will step aside as president for 20 days while undergoing treatment next month. Fernández de Kirchner’s husband, former President Néstor Kirchner, died of a heart attack last year.