World News joined 0001

Israeli ground troops have battled Palestinian militants in the streets of a densely populated Gaza City neighbourhood, destroying dozens of homes and sending residents running for cover as gunfire and explosions echoed in the distance.

Israel's push into Tel Hawwa neighbourhood was the furthest it has moved into Gaza City during an 18-day offensive against Hamas militants, bringing Israel's ground forces within one mile (1.5km) of the crowded city centre.

Palestinian hospital officials say more than 900 Palestinians, half of them civilians, have been killed.

Israel launched the offensive on December 27 after Palestinian rocket attacks on its southern towns, and Prime Minister Ehud Olmert has vowed to press forward with an "iron fist", despite growing international calls for an end to the fighting.

Palestinian witnesses said the Israeli forces moved overnight about 300m into Tel Hawwa, a neighbourhood of high-rise buildings on the southeastern edge of Gaza City.

Palestinian medical officials reported at least 16 people killed in fighting, though the Israeli army suggested the number could be much higher.

The Israeli military said it carried out some 60 airstrikes overnight, hitting groups of Hamas militants holed up in a hotel, a house and a mosque. It said it also struck 15 squads of gunmen, rocket launching sites and 15 smuggling tunnels along the Egyptian border.

The army said it had hit about 30 militants, and that three soldiers were wounded in overnight fighting. Among them was an officer who was seriously wounded when a bomb exploded in a northern Gaza house that he was searching. Weapons, including a machine gun, were later found in the house, the military said.

Frustrated and anguished at the escalating violence in Gaza, UN Secretary-General Ban Ki-moon said he is embarking on a Mid East tour to press for Israel and Hamas to immediately stop fighting and allow humanitarian aid into the devastated Palestinian territory.

Mr Ban said he plans to step up diplomatic efforts to get both sides to adhere to a UN ceasefire resolution calling for an end to Israel's air and ground offensive in Gaza and Hamas' rocketing of southern Israel.

-Nova

Five men and three women have been arrested in connection with the murder of a sub-postmaster's son during an armed robbery.

The suspects were detained early ton Tuesday morning over the fatal shooting of Craig Hodson-Walker, who was gunned down as he tried to fend off masked robbers at his family's post office in Fairfield, Worcestershire.

West Mercia Constabulary said four people were arrested on suspicion of murder and attempted murder while the other four were being questioned on suspicion of assisting an offender.

The suspects were arrested from six addresses across south Birmingham in an operation involving more than 100 police officers.

Mr Hodson-Walker, 29, was shot in the chest on Friday morning as he tried to protect his parents, Ken and Judy, both 56, at Fairfield Post Office and Stores.

His father was shot in the leg during the attack and remains in a stable condition in hospital.

Speaking at the scene, Superintendent Adrian Pass said: "Those arrested are currently being held at police stations across the West Mercia and West Midlands force areas. We would like to express their thanks to the public and the media for their information and co-operation so far during this ongoing operation."

The Post Office has offered a £50,000 reward for information leading to the arrest and conviction of Mr Hodson-Walker's killers.

Mr Hodson-Walker had recently become engaged to teaching assistant Lisa Bundy.

Miss Bundy, from Ross-on-Wye, Herefordshire, has described her fiance as her "soulmate and best friend".

-Nova

Supermarket giant Tesco has said its new discount ranges weighed on UK sales growth as the retailer reported "challenging" conditions across all markets.

In the UK, like-for-like sales excluding fuel grew 2.5% in the seven weeks to January 10 - in line with market forecasts, but much weaker than rival Sainsbury's.

Market leader Tesco introduced the discount ranges last year to combat rivals such as Aldi and Lidl.

The supermarket said its UK performance was "steady" with the initiative continuing to drive increased volumes and customers.

Finance director Andrew Higginson said Tesco's UK Christmas trading figure was the weakest "probably since the last recession".

Despite the tougher conditions Tesco will continue to invest in the UK market and its store opening programme will create 10,000 jobs this year, Mr Higginson added.

The 2.5% growth represented a slight increase on the 2% seen in the third quarter. Taking into account December's VAT cut, comparative sales grew by 3.5%, the retailer said.

The supermarket hopes the extra custom driven by its discount ranges will offset the blow to sales, but its growth is just over half the 4.5% posted by Sainsbury's last week. Morrisons has yet to report, although it is set to be the Christmas winner with sales growth of around 9%.

There were some glimmers of light for Tesco as the group's non-food sales strengthened slightly on the third quarter, with market share gains across electrical, clothing and entertainment categories.

Online sales were also strong in the run-up to Christmas. Total sales from tesco.com and Tesco Direct were up more than 18% to £273 million over the seven weeks, with sales of digital products such as televisions and laptops "particularly pleasing".

-Nova

Ministers will announce a package of measures "within the next few days" to help small and medium sized businesses which are having difficulty getting access to credit, Downing Street said.

Reports have suggested ministers are considering a loan guarantee scheme worth as much as £20 billion, but Prime Minister Gordon Brown's spokesman told reporters that the Government was also looking at wider issues affecting businesses.

In a daily briefing at Westminster, the spokesman said: "Our scheme will be targeted, it will be thought through, it will be funded and it will be focused on those businesses that we want to support most of all.

"That in particular is small and medium sized businesses which are viable but are having difficulty accessing working capital at this time."

The spokesman added that the Government was not proposing to offer "irresponsible blanket guarantees" for all business lending.

The package of proposed measures to help businesses formed part of a discussion on the global economic crisis which dominated the regular Cabinet meeting at 10 Downing Street.

It is thought an announcement could be made as soon as Wednesday, with widespread expectations that the state will effectively offer to "insure" banks against firms defaulting in return for a fee.

If confirmed, the plan would be similar to one endorsed by the Tories - although they have called for a £50 billion commitment.

Mr Brown's spokesman declined to give specific details of the scheme under consideration, but said it would build on support for smaller businesses announced in Chancellor Alistair Darling's Pre-Budget Report (PBR) in November.

The spokesman said: "We are examining specific remedies, not just a blanket subsidy."

-Nova

Calls are growing for the resignation of the mayor of a local authority at the centre of a storm over the deaths of seven children.

At an emergency meeting of councillors in Doncaster, held to "debate and discuss as a matter of urgency" the state of the council's children's services department, councillors from all parties called for Mayor Martin Winter's resignation.

Seven children have died in the area since late 2004 in cases involving abuse or neglect.

Serious case reviews have been commissioned to find out what mistakes were made in each incident, although so far only three have been completed.

Mayor Winter expressed fears on Monday that the deaths of the children would be used as an "political football" to force him out of office.

Ministers launched a review of children's services in Doncaster in response to "very serious" issues raised by the Ofsted inspection, which found the department to be "inadequate".

The meeting at Doncaster's Mansion House was held "in view of the importance of the matters related to child protection in the borough to put in place safeguards that fully ensure that this never happens again".

Councillors questioned the lack of improvement in services between the death of the first child in 2004 and the Ofsted inspection last year, as well as a lack of transparency within the authority and cost-cutting exercises within children's services.

Mr Winter admitted that he had to accept some blame for the failures to protect vulnerable children.

He said children's services were multi-disciplinary, with medical services pinpointed as being at fault in the case of some of the youngsters' deaths.

-Nova

As many as 2,000 City jobs are to be axed after the merger of investment banking giants Merrill Lynch and Bank of America.

The banks are preparing to cut 30% of their combined London-based staff over the next few months, although job losses are already being seen in some departments, according to The Times.

UK job cuts reportedly come as part of a plan announced by Bank of America in December to reduce the combined global workforce by around 30,000 to 35,000 over the next three years.

Merrill Lynch employs 6,000 staff in London and Bank of America has around 2,000 UK employees.

Bank of America, which completed its rescue takeover of Merrill Lynch on January 1, is hoping to save around 7 billion US dollars (£4.77 billion) by 2012.

The takeover was unveiled last September amid a dramatic weekend on Wall Street, when the bankruptcy of Lehman Brothers was also announced, causing stock markets globally to plunge.

It was understood that the deal came as fears grew that Merrill could become the next bank to lose the confidence of investors.

Bank of America said on completing its takeover earlier this month that cost savings would come from a "range of sources", including job cuts, and the reduction of overlapping technology, sale and marketing costs.

Both banks declined to comment, but Bank of America has previously said that more details on the final number of worldwide job cuts would be given in early 2009.

Thousands have been axed across the sector, with the collapse of Lehman Brothers impacting 5,000 staff alone. And the industry is braced for further jobs pain from the Lloyds TSB and HBOS tie-up.

-Nova

House prices fell by a record 8.6% during the year to the end of November.

UK homes lost a further 1.9% of their value during the month, pushing their average price down to £199,732 - the first time the figure has dipped below £200,000 since November 2006, according to the Department of Communities and Local Government.

The data came as the Royal Institution of Chartered Surveyors said the number of homes changing hands had fallen to a new record low during the three months to the end of December at an average of just 10.1 sales per chartered surveyor estate agent.

-Nova

The offer of £10,000 "golden handcuffs" payments to the best teachers who were prepared to work at the worst performing secondary schools was a key part of the Government's New Opportunities White Paper on social mobility

The deal forms a major plank of the proposals, alongside an extension of free nursery and childcare places to 15% of the most disadvantaged families with two-year-olds.

Launching the White Paper, Prime Minister Gordon Brown said he wanted to ensure that everyone was able to take advantage of the eventual economic recovery when it comes.

Mr Brown was setting out ambitious plans to improve the chances of the most disadvantaged in society, saying Britain must start preparing for the eventual economic upturn.

The White Paper follows research indicating that children in Britain are less likely than those in other developed countries to move up the social ladder and get better jobs than their parents.

While the Prime Minister acknowledged that the coming months would be "tough", he said the global economy would return to growth in the years ahead, creating up to one billion skilled jobs worldwide.

"During this global economic downturn we must continue to invest in people so they have a fair chance to achieve their potential," he said.

Cabinet Office Minister Liam Byrne said it was essential that help was available at every stage of people's lives if class barriers were to be broken down effectively.

Other measures in the White Paper - which brings together a number of recent Government announcements - includes a guarantee that vulnerable mothers will have access to a dedicated family nurse to help them through pregnancy and the first two years of childhood.

And a total of 35,000 new apprenticeship places will be created to ensure that all qualified young people have the right to an apprenticeship by 2013.

-Nova

The Government is still intending to announce its decision on a third runway at Heathrow by the end of this month, Prime Minister Gordon Brown's spokesman has said.

The controversial proposal to expand London's busiest airport was the subject of a "brief" discussion at Cabinet amid reports that several senior minister harboured serious concerns about the plan.

The Government had been widely expected to give the project the green light this week, despite more than 40 backbenchers joining Opposition parties and environmentalist campaigners in demanding it be scrapped.

But the Prime Minister raised the prospect of a further delay on Monday night, when he agreed to meet rebel MPs for more talks.

Mr Brown's spokesman declined to say which ministers spoke in the Cabinet discussion, which he described as "constructive".

The Government has already taken a policy decision in principle in favour of additional capacity at Heathrow, subject to meeting conditions on air quality, noise and access.

Transport Secretary Geoff Hoon has the final decision on whether the project should go ahead and what form any expansion should take. He said shortly before Christmas that he would announce his decision in January, and Mr Brown's spokesman confirmed that this was still the Government's intention.

The hints at a delay came amid furious exchanges between supporters and opponents of the expansion.

Greenpeace said it had bought a section of land on the proposed site, and was planning to divide it into tiny pieces in a bid to gridlock the planning process with hundreds of legal challenges.

London Mayor Boris Johnson also insisted he would go to court over any decision to authorise the runway.

-Nova

German Chancellor Angela Merkel has unveiled an economic stimulus package worth about 50bn euros ($67bn; £45bn) to kick-start Europe's largest economy.

The measures include investments in railways, roads and schools, as well as a number of tax relief initiatives.

It is aimed at helping the country during what some fear could be its worst recession since World War II.

An earlier 23bn-euro plan to stimulate the economy, passed last month, was derided for being too cautious.

"We will do everything possible to make sure Germany not only gets through this crisis but emerges stronger," Ms Merkel said.

Tax cuts

The agreement follows squabbles between the Social Democrats and Christian Democrats over how to shore up the German economy and prevent job losses.

"All in all, it is a package that will help get us through the financial crisis and secure jobs," said Christian Democrat parliamentary president Volker Kauder.

The new two-year stimulus package will include investment measures worth about 18bn euros for infrastructure projects.

The package includes:

* A 100bn-euro loan guarantee programme for firms struggling through the ongoing credit crunch
* Tax cuts and breaks, including reductions in state health care contributions and bonuses of 100 euros per child
* A 2,500-euro payment for scrapping a car older than nine years and buying a new vehicle.

But, says the BBC's Steve Rosenberg in Berlin, this package alone will not solve Germany's biggest problem at the moment: its falling exports.

Because of the global economic downturn, there is less demand abroad for German goods, such as cars and machine tools.

Germany is heavily reliant on exports, which saw their largest fall in November since reunification in 1990.

Last year, it unveiled a bail-out for businesses worth up to 500bn euros, but its use has been limited because of strict conditions attached to taking the money.

Meanwhile, figures released on Tuesday morning showed that German wholesale prices fell 3% in December from the previous month, and were down 3.3% on a year-on-year basis.

-BBC News