Living on the edge
The assassination of Pakistani opposition leader Benazir Bhutto on Thursday marked a horrific coda to the year.
There may have been hard-won progress in Iraq and Afghanistan, but the killing of Bhutto is a stark reminder of the difficulties faced in the war on terrorism. Pakistan is arguably the most important ally in Washington's campaign yet it is possibly the most volatile, home to Muslim extremists and a powerful intelligence bureaucracy with links to al-Qaeda and the Taleban in neighbouring Afghanistan.
The stability of Pakistan - with 180 million people and nuclear weapons, and a strong ally of neighbouring China - is both regionally and internationally vital. Pakistani President Pervez Musharraf had been under US pressure to find some kind of accommodation with Bhutto, the charismatic two-time former prime minister who returned from exile two months ago to plot a political comeback ahead of the election on January 8.
The crisis in Pakistan is almost certain to deflect attention - in the short term at least - from Iraq, where the controversial so-called surge in US troop numbers appeared to be having an impact, much to the relief of the Bush White House, which has spent much of the year under unprecedented domestic and international pressure to find a way out of the quagmire.
The surge - an increase of 30,000 troops and broader, more dangerous deployments on the streets - was born of months of crisis meetings in Washington. US generals have described the first six months of the year as the bloodiest since the invasion nearly five years ago in early 2003 to oust the Baathist regime of Saddam Hussein, but they insist the toll is now coming down.
The desperation was palpable in Washington as coalition allies such as Britain and Australia expressed exasperation and opposition, fanned by an intensifying campaign for next year's presidential election. At one point when Mr Bush was asked why he thought the surge would work, he said: 'Because it has to.'
This year has been the most deadly so far not just for US troops (more than 900 have died this year, taking the US death toll to more than 3,900), but one of the worst for Iraqis as well. The start of the year saw Iraqis dying at the rate of 2,300 a month in the conflict, although those figures are declining as coalition forces claim success in training Iraqi security personnel.
August saw the worst single attack of the war, when more than 500 civilians died in a string of suicide bombings in the settlement of Qahtaniya. Co-ordinated strikes destroyed more than 100 houses and shops, mostly linked to the non-Muslim Yazidi minority. The raids were linked to al-Qaeda.
Yet as both domestic and coalition fatalities and insurgent-related attacks decline, there is a sense of transition after five years of conflict. US troop numbers peaked at about 165,000 during the surge and are expected to be down to 130,000 by the end of next year as Iraqi forces take over more than half the country.
US officials are now talking in terms unthinkable just a few months ago. 'Everyone agrees that the security situation has improved substantially,' said General David Petraeus, the top US military commander in Iraq. 'It has enabled progress in other areas, as well. You see markets springing back to life, children going to school in greater numbers.'
British forces have recently handed over control of the southern city of Basra to Iraqi forces, and Australia is preparing to withdraw its troops next year.
That sense of transition reflects in part the fact this year was also a year of change in the world's major political arenas.
In Britain, a decade of Tony Blair's New Labour revolution gave way in June to a new era under his long-serving chancellor, Gordon Brown. For Mr Blair, the early promise and popularity of his 'Cool Britannia' makeover fell beneath the tank tracks of the Iraq juggernaut and he left office an apparently tired and embattled leader.
The dour Mr Brown lost no time in pledging substance over style to carve out a honeymoon period of his own. He swiftly found himself under pressure for 'stealing' conservative policies and ruling out a snap election to renew his mandate after the internal transfer of power from one Labour leader to another.
A month earlier across the channel in France, Jacques Chirac stood down after 10 years and two terms as president of the republic - a decade marked by a conservative centrism and a suspicion of Washington. In his place came the relatively youthful Nicolas Sarkozy - a 52-year-old right-winger determined to overhaul France's long-established social and bureaucratic traditions. He was also determined to ease France's habitual anti-Americanism, staking out a mission to the White House as one of his first priorities.
He also had other early challenges to deal with. His presidential office announced in October that his second marriage was over and that he was divorcing, by mutual consent, former aide and fashion model Cecilia Ciganer-Albeniz. But Mr Sarkozy wasn't single for long. Earlier this month news broke that he was seeing singer and former fashion model Carla Bruni. Mr Sarkozy's offices remain silent, but Ms Bruni is no stranger to high-profile romances, having dated rock stars Mick Jagger and Eric Clapton, actor Kevin Costner and New York property tycoon Donald Trump.
Australia, too, is getting used to a new leader after the Labor Party's Putonghua-speaking former diplomat, Kevin Rudd, promised a more in-tune administration after 11 years of the conservatism of Liberal leader John Howard. Mr Howard had presided over the greatest economic boom in Australian history, but voters bucked conventional wisdom and decided they felt like a change despite the good times.
There is transition, too, in Russia, which, like Britain and France, is also a member of the UN Security Council. But in Moscow it seems a case of the more things change, the more they stay the same.
President Vladimir Putin's second term ends in spring, but no one is expecting the formidable former KGB officer to fade quietly into retirement after eight years of tough rule. Instead, his effort to conjure a new, more robust Russia from the ashes of the failed transition from communism is set to continue.
Mr Putin has announced he will take the supposedly lesser role of prime minister. But given the fact that he has hand-picked his successor, his former chief of staff and current premier, Dmitry Medvedev, the move appears to confirm his role as supreme leader.
It comes at a highly intriguing moment for Russia, which in its Soviet Union guise at the height of the cold war was the only superpower rival to the US. Just as China is emerging as a nascent superpower, Mr Putin is asserting a bold new Russian nationalism, wanting to ensure his nation is not left behind. Although its shrinking population of 135 million is far below China's and India's, it has a vast reserve of natural resources and remains a leader in military technology.
This year has seen Russia repeatedly warn against US proposals to station missile defence stations in eastern Europe and has challenged Washington over its tough line on Iran and Iraq. Russian surveillance planes, meanwhile, have been sighted on deployments in the North Atlantic - flights not seen since the days of the cold war.
Rising oil prices have helped fuel a booming economy, but Russia is still stuck with low life expectancy, corruption and a government that remains opaque and ready to trample on hard-won freedoms.
In a rare interview this month to mark his naming as Time magazine's Person of the Year, Mr Putin acknowledged rampant corruption and other transition difficulties. 'Badly,' he said, when asked how Russia was dealing with endemic corruption. 'I must say that in the transitional economy, it is difficult to address such problems. But I'm fully convinced that down the road, they will be tackled more efficiently.'
Russia's former communist ally, Cuba, is in a vastly different situation. Earlier this month President Fidel Castro conceded that, at 81 and in bad health, it finally might be time to hand the reins to a younger man. Given that he has been ruling since taking power in the revolution of 1959, it was no idle statement. Should he finally step aside, questions of economic and political reform are expected to dominate - among them the future of the full US embargo. The future of a post-Castro Cuba could be one of the compelling stories of 2008.
Few issues highlight the theme of transition quite like the environment. If 2007 stands for anything, it is the year that appears to have marked the turning point in the recognition of global warming as a threat to the future of humankind.
Faster than expected melting of the Arctic ice pack and shrinking glaciers have helped galvanise a new sense of political and commercial will across the world. Previously suspicious governments are now reacting to the rise of the green vote, while companies scramble to introduce carbon-neutral policies and create new markets in environmental technology.
Two weeks of intense debate among countries big and small at this month's UN Bali Conference on Climate Change failed to produce specific targets for carbon emissions cut but sought to create a future 'road map' for future agreement. The sense of scientific and political urgency was palpable, even without a solid result.
One of the most strident voices - and one that won the most applause - came from the Papua New Guinean representative. Angry at perceived big-power arrogance, he questioned whether the large nations were ready to lead. 'Leave it to the rest of us,' he said. 'Please get out of the way.'