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The new 25-member interim Iraqi Governing Council met for the first time and abolished all national holidays honoring fallen dictator Saddam Hussein and his outlawed Baath Party. The group, in which Shiite Muslims hold a majority - in contrast to the Hussein years that gave Sunni Muslims that status - can appoint Cabinet ministers and OK the national budget. Meanwhile, US troops began a new preemptive operation to round up suspected pro-Hussein insurgents in Sunni areas north of Baghdad.

Hamas and Islamic Jihad reacted to the arrests by the Palestinian Authority of militants in the Gaza Strip by warning that they "might think seriously about going back on" their unilateral suspension of "military operations" against Israel. The arrests, and a seizure of weapons, came despite the unwillingness of new Prime Minister Mahmoud Abbas to disarm radical groups. Against that backdrop, Israeli leader Ariel Sharon flew to London to try to enlist European support for isolating Yasser Arafat. Israel has threated to deport Arafat if he works to undermine the road map to peace.

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In what's believed to be a first, Iranian President Mohamad Khatami offered to quit "If this nation says: 'We don't want you.'" But the gesture was reported only in one official newspaper. Khatami, elected in 1997 on a political/social reform platform, has fallen out of favor with many Iranians for failing to stand up to the unelected clerics who rule the country. He claims to be powerless to stop them from thwarting all efforts to deliver democratic change.

In searing summer heat, thousands of Hong Kong residents staged their third public protest in less than a month against unpopular Chief Executive Tung Chee-hwa, demanding the right to vote in their own leader. The rally was not as large as the July 1 turnout of a half-million people, but its focus was the same: a proposed security law that, even though watered down, mandates life-imprisonment sentences for various expressions of antigovernment sentiment.

Under pressure, the newly reelected government of Belgium agreed to rewrite a controversial 1993 law under which foreign leaders have been targeted for prosecution as war criminals. Among them: President Bush; Gen. Tommy Franks, the Iraq war commander; and Israel's Sharon. The Bush administration warned that NATO could choose another site for its headquarters if the law remained on Belgium's books.