GAZA CITY - An explosion targeted an Israel military vehicle on the Gaza border and Israeli troops fired into Gaza, killing two civilians and wounding at least 25, Palestinian officials and witnesses said. Ayman al-Sahbani, a doctor at Gaza's Shifa hospital, said all the casualties were civilians, and children were among the wounded. Witnesses said that following the large explosion, Israel retaliated with tank and machine-gun fire towards a residential area in Gaza, hitting people who were returning from a funeral near Gaza city. The Israeli military said it was investigating the incident. AP
BAGHDAD - Baghdad cancelled a US$4.2 billion weapons package with Russia, citing graft concerns, torpedoing a deal that would have made Moscow Iraq's biggest arms supplier after the US. Cancellation of the deal, which had been announced when Prime Minister Nouri al-Maliki led a delegation to Russia last month, is a setback for Moscow's attempts to firm up its slipping foothold in the Middle East and also throws into doubt efforts by Iraq to equip its forces. Maliki's spokesman Ali Mussawi declined to say who was being investigated, or if Iraq would begin new negotiations with Moscow. AFP