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Wednesday, July 05

Editor's Note: The CNN Wire is a running log of the latest news from CNN World Headquarters, reported by CNN's correspondents and producers, and The CNN Wire editors. "Posted" times are Eastern Daylight.

Pyongyang defends missile launches

SEOUL (CNN) -- North Korea Thursday defended a series of missile launches a day earlier, calling them a "legitimate right as a sovereign state," a Foreign Ministry spokesman said, according to the state-run news agency KCNA.

"The latest successful missile launches were part of the routine military exercises staged by the KPA (Korean People's Army) to increase the nation's military capacity for self-defense," the spokesman said.

Pyongyang launched seven missiles over a 14-hour period Wednesday, breaking its own moratorium on such launches.

The U.N. Security Council on Wednesday began considering a draft resolution that could would impose sanctions on the Communist nation's missile program.

The spokesman said North Korea will continue with its missile testing program, issuing a warning to any country that might want to interfere.

North Korea "will have no option but to take stronger physical actions of other forms, should any other country dares take issue with the exercises and put pressure upon it," the statement said. (Posted, 3 a.m.)

Police: Car bomb detonates in southern Iraq; 11 killed, mostly Iranian pilgrims

BAGHDAD (CNN) -- A car bomb detonated Thursday in the southern Iraqi town of Kufa near a Shiite mosque, killing 11 and wounding 51 others, Iraqi police said.

Most of the casualties were Iranian Shiite pilgrims who were boarding several buses outside the Maytham al-Tammar mosque when the explosion happened, police said.

Kufa is right outside Najaf, which is about 100 miles (160 km) south of Baghdad.

Kufa -- along with Samarra, Karbala, and Najaf -- is considered a holy place by Shia Muslims.-- From CNN's Arwa Damon (Posted, 2:27 a.m.)

Lopez Orbrador leads Calderon in Mexico's tight presidential race

MEXICO CITY (CNN) -- Leftist presidential candidate Andres Manuel Lopez Obrador held a slim one percent lead late Wednesday over conservative Felipe Calderon in Mexico's contensious presidential election.

With nearly 94 percent of the vote counted, Lopez Obrador had about 36 percent, compared to about 35 percent for Calderon.

On Sunday, the head of the Federal Electoral Institute (IFE) said the election was too close to call, launching Wednesday's official tabulation of the votes from the country's 300 voting districts.

The Electoral Council is to convene Sunday to review the results of the process.

Theoretically, an official result could be announced as early as Sunday, though each candidate has until the following Thursday to challenge the result. (Updated, 1:30 a.m.)

Nations condemn North Korean missile tests

UNITED NATIONS (CNN) -- U.N. Security Council members on Wednesday denounced North Korea's missile test-launches and began considering a draft resolution that would impose sanctions on the Communist nation's missile program.

No action was taken, but the diplomats and technical experts are to meet again Thursday to hash over language of the resolution behind closed doors.

After the initial discussions, China and Russia expressed the desire for a weaker council statement -- something that would avoid sanctions and the weight of international law.

For the resolution to pass, Russia, China and the three other permanent council members must approve it, along with at least nine other members. (Posted 11:20 p.m.)

Israeli troops battle Palestinians in northern Gaza

BEIT HANOUN, Gaza (CNN) -- Israeli military forces occupied a swath of northern Gaza early Thursday after moving troops from across the border in an operation apparently aimed at denying the militants a launching pad for Qassam rockets.

The forces encountered heavy small arms fire from Palestinian militants late Wednesday as the army pushed into the region, said CNN's Paula Newton.

The incursion came just hours after Israel signaled Wednesday it intends "to bring about change in the rules of the game" after a longer-range Palestinian rocket hit the southern Israeli town of Ashkelon on Tuesday. Two Qassam rockets fired from Gaza landed Wednesday in the southern part of Ashkelon. (Posted 8:52 p.m.)

Bonds trainer Anderson goes back to jail

SAN FRANCISCO (CNN) -- A federal judge Wednesday jailed Greg Anderson, longtime trainer for San Francisco Giants slugger Barry Bonds, for refusing to testify before a grand jury looking into allegations of perjury by Bonds.

Anderson, who has already served three months in prison and three months under house arrest in the BALCO steroids case, was under pressure from prosecutors who wanted him to name names of high-profile baseball players who had taken illegal steroids -- Bonds allegedly among them.

Anderson refused to testify before the grand jury investigating whether Bonds lied to another grand jury when he said he'd never knowingly taken steroids. U.S. District Court Judge William Alsup remanded Anderson into the custody of federal marshals, denying his attorney's arguments for more time to appeal the ruling. (Posted 7:53 p.m.)

Senate, House hold dueling immigration hearings

(CNN) -- The summer political theater over the issue of immigration heated up Wednesday, with House members and senators taking to the road for dueling hearings on their vastly different approaches to reform legislation now stalled in Congress.

A House International Relations Committee panel held the first in a series of hearings on the immigration issue promised by GOP leaders over the summer -- hearings that could thwart efforts by the White House to get a reform measure through Congress this year -- at a Border Patrol station in San Diego.

"It's elementary that to defend ourselves against our determined and resourceful enemies, our border must be secure," said Rep. Ed Royce, R-Calif., the panel's chairman.

Meanwhile, across the country in Philadelphia, Senate Judiciary Committee Chairman Arlen Specter ginned up his own hearing, held in a museum near Independence Hall, where business leaders testified that immigrant labor is indispensable. Some of the strongest comments came from New York City Mayor Michael Bloomberg, a Republican, who said his city's economy "would be a shell of itself" without illegal immigrant labor -- "and would collapse if they were deported." (Posted 6:55 p.m.)

Floods wrecked at least 1,000 New York homes

NEW YORK (CNN) -- At least 1,000 homes in 13 New York state counties were destroyed by last week's floods, a state official said Wednesday.

Survey results of damage in seven other counties have not yet been made public, meaning the total is likely to rise, state Emergency Management Assistant Director Dennis Michalski said.

Last month's flooding claimed 19 lives in the Northeast, including four in New York. Some people remain in Red Cross shelters, and six disaster assistance service centers have been set up around the state to provide flood victims with critical services and information from state and local agencies and charitable organizations, Michalski told CNN. (Posted 6:55 p.m.)

Israel: Missile targeted militants planting explosives

JERUSALEM (CNN) -- Two Israeli missiles Wednesday targeted a group of Palestinian militants planting explosives in northern Gaza, the Israel Defense Forces said.

In a separate strike, Palestinian sources said a missile hit a coastal police outpost in Gaza City, killing one policeman and one militant and wounding five others, one critically. The IDF said it was checking the report. (Posted 6:33 p.m.)

N. Korea missile tests launch oil over $75

NEW YORK (CNN) -- Tensions with North Korea helped send the price of oil rocketing to a record Wednesday, with crude oil settling at $75.19 per barrel, a record nominal high.

"Oil and politics make a bad mix," said Fadel Gheit, Oppenheimer & Co. senior energy analyst. "Geopolitics are always at center stage when it comes to the oil market, and the North Korea missile launch is causing jitters in the market because ultimately it will make the situation with Iran much more difficult to deal with."

NYMEX Director George Gero, who is also senior vice president at RBC Dain Rauscher, said the election controversy in Mexico -- where candidate Andres Manuel Lopez Obrador was neck and neck with conservative Felipe Calderon -- also factored into Wednesday's $1.26-per-barrel spike.

The previous record high was last April 21, when it closed at $75.17. (Posted 6:25 p.m.)

Doctor: Enron founder died of coronary artery disease

(CNN) -- Enron founder Ken Lay died from severe coronary artery disease while awaiting sentencing for conspiracy and fraud, the doctor who performed his autopsy announced Wednesday.

Lay, 64, was to be sentenced in October along with the company's former CEO, Jeffrey Skilling. A federal jury in Houston convicted Lay of 10 counts of fraud and conspiracy related to the company's 2001 collapse.

Lay, once nicknamed "Kenny Boy" by President Bush, was taken to a hospital in Aspen, Colo., early Wednesday and pronounced dead shortly after 3 a.m., the Pitkin County Sheriff's Department said. Dr. Robert Kurtzman, the forensic pathologist who conducted an autopsy in Grand Junction, Colo., said here was no evidence of foul play in Lay's death. (Posted 5:55 p.m.)

Coca-Cola worker charged in plot to sell company secrets

ATLANTA (CNN) -- A secretary at Coca-Cola's world headquarters and two other people have been arrested on charges of offering corporate secrets from the soft-drink giant to rival Pepsi for $1.5 million, federal prosecutors said Wednesday.

The FBI began an undercover sting after Pepsi informed Coke it had received a letter from someone claiming to be a Coke employee, offering "very detailed and confidential information" about products being developed, according to David Nahmias, the the U.S. attorney in Atlanta.

Joya Williams, 41-year-old an executive administrative assistant at Coke, 41, was arrested along with Ibrahim Dimson, 30, of New York and Edmund Duhaney, 43, of the Atlanta suburb of Decatur, Nahmias said. All three are charged with wire fraud and unlawfully stealing and selling trade secrets from The Coca-Cola Company.

Neville Isdell, Coke's chairman and CEO, said the company is reviewing its security procedures in the wake of the arrests. (Posted 5:35 p.m.)

Al-Jazeera team hit by gunfire in Gaza

GAZA CITY (CNN) -- A car carrying a team from the Arabic-language satellite network Al-Jazeera came under small-arms fire from Palestinian militants Wednesday in Gaza City, Palestinian sources said. There were no injuries. (Posted 5:07 p.m.)

Israeli troops battle Palestinians in northern Gaza

BEIT HANOUN, Gaza (CNN) -- Israeli military forces encountered heavy small arms fire from Palestinian militants Wednesday as the army pushed into northern Gaza in an operation apparently aimed at denying the militants a launching pad for Qassam rockets.

CNN's Paula Newton, traveling from Israel into Gaza, reported heavy and ongoing fire between Palestinians and Israelis, most of it from small arms, as the Israelis moved into Gaza to set up a buffer.

The Israel Defense Forces had no comment.

Limbaugh will not be charged for Viagra possession

MIAMI (CNN) -- Conservative radio talk show host Rush Limbaugh will not face charges for possession of non-narcotic pills found in his possesion but issued under his psychologist's name, a Palm Beach County spokesman said.

Limbaugh -- who recently entered a plea deal on doctor shopping charges relating to painkillers -- did not break any law but his cardiologist who allegedly prescribed the drug and his psychologist who allegedly agreed to let his name be used may still face charges, said Mike Edmondson with the Palm Beach state attorney's office.

Viagra -- used to treat erectile dysfunction -- was prescribed on Dec 12, 2005 to Limbaugh in his psychologist's name. (Posted 4:58 p.m.)

Bush: Missile tests further isolate North Korea

WASHINGTON (CNN) -- North Korea has isolated itself further with its recent round of missile tests, President Bush said Wednesday.

Bush said U.S. officials were still analyzing data from the North Korean tests, including the unsuccessful launch of a long-range missile that had been closely watched by intelligence agencies. But the failure of that test "doesn't, frankly, diminish my desire to solve this problem," he told reporters at the White House.

The United States has been working with neighbors of the isolated Stalinist state in six-party talks aimed at convincing Pyongyang to give up its nuclear weapons program since 2002. The talks have stalled in recent months as North Korea has insisted on direct talks with Washington. (Posted 3:32 p.m.)

Report: Qassam rocket hits Ashkelon

JERUSALEM (CNN) -- A Qassam rocket fired from Gaza landed Wednesday in the southern part of Ashkelon, the second rocket to hit the Israeli town in two days, Israeli television reported.

The rocket landed in an orchard, the television reported, with no casualties and no damage. But ambulance services said that they were treating four people, including two children, for shock.

A Qassam rocket hit the parking lot of a high school in Ashkelon on Tuesday, an attack Israeli Prime Minister Ehud Olmert called "a major escalation" of violence in the region. There were also no casualties in that attack. (Posted 2:46 p.m.)

Iraqi thought to be associate of top militant is killed in raid

(CNN) -- An Iraqi thought to be an associate of a militant linked to the bombing of the Askariya Mosque in Samarra was killed on Wednesday during a coalition raid southeast of that city, a U.S. military statement said.

Four adult males were detained in the operation.

The dead male is "an associate of Haitham al-Badri, a known al Qaeda leader and foreign fighter facilitator," the statement said.

Al-Badri is suspected of playing a major role in planning the Feb. 22 bombing of the mosque, a Shiite shrine. That attack triggered an upsurge of sectarian violence.

He is also thought to have played a role in the killing Iraqi news reporter Atwar Bahjat who was covering the bombing.

The statement said troops used intelligence to obtain the spot of the location they raided. "The targeted individual was also reported to have previously provided a safe haven for foreign fighters linked to an attack on an Iraqi government forces checkpoint May 20," the statement said. (Posted 2:17 p.m.)

Bond denied for Miami terror suspects

MIAMI (CNN) -- A judge Wednesday denied bond for six of the men charged in an alleged Miami-based plot to blow up U.S. buildings.

U.S. Magistrate Ted Bandstra said his decision was based on the risk of flight, the strong evidence presented by the government concerning the nature of the charges and the character of each defendant.

A seventh defendant remains jailed in Atlanta. The six men face charges of conspiring to provide material support to terrorists, including al Qaeda, and plotting to bomb buildings around the country as part of a "jihad" against the United States. (Posted 1:37 p.m.)

U.N. Security Council meets after North Korea launches several missiles in test

UNITED NATIONS (CNN) -- Members of the United Nations Security Council met in an urgent session on Wednesday, hours after North Korea fired the last in a series of missile tests that began Wednesday.

Members discussed a draft resolution proposed by Japan -- and backed by the United States and Britain -- which demands that countries cut off any funds or materials that could be used for North Korea's missile program, diplomats said.

The resolution, which is not yet under formal discussion among the full 15-member Security Council, would also condemn the missile tests and demand that Pyongyang cease any missile activity and return to the six-party talks on the issue, according to U.N. diplomats.

The final resolution "should have clear and strong condemnation of the missile launches and it should also mention the concern, very deep concerns of the international community over the proliferation of weapons of mass destruction," said Japan's U.N. ambassador Kenzo Oshima.

No vote is expected Wednesday on the resolution, which could face opposition from China -- North Korea's neighbor and close ally. China is Pyongyang's main provider of food, oil and economic aid. (Posted 12:52 p.m.)

U.S. diplomat favors six-party, not bilateral, talks over N. Korea

WASHINGTON (CNN) -- U.S. Assistant Secretary of State Christopher Hill said there is no need for bilateral talks to be held between Washington and Pyongyang.

"This is not a problem of lacking bilateral channels," he told CNN. "We are able to talk to them. The problem is they don't like what we're saying."

Instead, he said, the world community should stick with the six-party talks, which have been stalled for nine months.

"I think we have to stick with what we know is the right approach," he said.

Asked the motivation for the launches, he said, "You'll have to ask them. Firing off six or seven missiles of this kind -- threatening the entire peace and tranquility of the neighborhood -- is not in anybody's interest."

Hill said he was planning to return to the region shortly to discuss the matter with his counterparts in the six-party talks. Hill expressed satisfaction with the international response.

"It's really quite unprecedented the degree to which everybody lined up opposed to these launches, launches that took place despite words of warning from world leaders," he said.

After the interview with CNN, Hill said it was incumbent on China to put more pressure on North Korea. Hill didn't say specifically what measures China should take, but said it should "get results." Hill said he was planing to depart Washington on Wednesday night to meet with his counterparts in the six-party talks.

He will fly first to Beijing, then travels to Seoul, Tokyo and finally Moscow. Asked what steps the United States and its partners could take, Hill said there are "measures we can take to protect ourselves." Hill said the launch of a long-range missile -- such as the TaepoDong 2 -- was likely a test of its capability "aimed at perfecting a delivery system." He cautioned against "leaping to conclusions" about the fact that the missile failed. (Posted 12:45 p.m.)

Israeli sources say soldiers stopped attempted suicide bombing

JERUSALEM (CNN) -- Israeli military sources said Wednesday Israeli forces had stopped a suicide bombing, arresting several Palestinians driving on the West Bank near the Jewish settlement of Ariel.

The sources said Israel Defense Forces troops, acting on intelligence information, set up road blocks along a main road in the West Bank and arrested the men in the area of Barkan industrial zone, west of Ariel. According to Israeli media an explosive belt was found in the Palestinian car.

The Israeli army said a Palestinian woman wanted on suspicion she was involved in terror activities was arrested in the West Bank village of Beit Sahour, near the town of Bethlehem. She was taken for interrogation by the forces, the army said. Earlier on Wednesday IDF forces killed a Palestinian militant during an operation to arrest him in the West Bank town of Jericho.

The man was wanted by security forces for involvement in the killing of an Israeli taxi driver in 2001 and the killing of an Israeli girl in 2000. The forces surrounded his house and called for him to walk out. The man tried to escape and the forces shot and killed the man, a member of the al-Aqsa Martyrs Brigades, a militant group linked to Palestinian President Mahmoud Abbas' Fatah faction. On Tuesday, IDF forces operating in the northern West Bank town of Jenin uncovered a car bomb and two explosive devices, the army said.

A car bomb wired with explosives was found by IDF troops operating in a refugee camp in the city. Troops opened fire at a group of Palestinians planting explosive devices in the city and killed one man, the army said. Forces searching the area uncovered two devices containing 24 kg and 12 kg of explosives respectively.

They were ready to be set off by a mobile phone, the army said. In addition, an Israeli military court Wednesday extended the remand of five members of Hamas who were arrested last Thursday by Israeli troops. The men were arrested for their involvement in terror activity, the army said. (Posted 12:30 p.m.)

Atlantic City casinos shut down as New Jersey budget crisis continues

ATLANTIC CITY, N.J. (CNN) -- Atlantic City's 12 casinos began shut down for the first time Wednesday morning, as the New Jersey budget crisis that began July 1st continued.

The government shutdown, which has resulted in the closure of all "non-essential" government offices, began after the state government failed to adopt a new budget by the constitutional deadline last Friday.

Among the non-essential government agencies affected by the shut down was the state Casino Control Commission, which is charged with regulating gambling in Atlantic City's casinos.

The casinos contribute some $1.2 million in tax revenues to the state each day, according to the Casino Control Commission. Wednesday legislators will once again remain in session in an effort to resolve the crisis; the assembly spent the 4th of July holiday trying but failing to enact a budget for 2007. (Posted 12:16 p.m.)

Rice calls North Korean missile launches a 'provocation'

WASHINGTON (CNN) -- Secretary of State Condoleezza said Wednesday that North Korea's launches of missiles represents a "provocation," and urged Pyongyang to return to the six-party talks.

Rice told reporters that countries around the world have expressed concern "about this provocation." "Whatever they thought they were doing, they have gotten a very strong reaction from the international community," she said.

She said the six-party talks, stalled since last year, still represent a way to solve the matter. "What the six-party talks provide is now a diplomatic infrastructure that can be used to solve problems of this kind," she said. "It would still be incumbent on the North Koreans to use that kind of infrastructure to address these issues."

Rice added that, "of course, the international community does have at its disposal a number of tools to make it more difficult for North Korea to engage in this kind of brinkmanship." (Posted noon)

35 Taliban militants, British soldier killed in Afghan incidents

(CNN) -- Fighting over the last two day in southern Afghanistan's Helmand province has left a British soldier and 35 militants dead.

The soldier was killed Wednesday in Sangin when a patrol was attacked by Taliban militants. This is the 13th British troop to die in the Afghan conflict and the sixth since early June.

The Combined Forces Command said the "35 extremists" were killed on Tuesday night when coalition forces attacked a Taliban compound in Helmand province.

The incident took place 15 miles east of Musa Qaleh, Kajaki District of the province "while they met at a Taliban compound in the village of Ghach Zar."

Several of the militants were described as "area Taliban leaders who planned and conducted multiple attacks against local Afghans, government officials and coalition forces." The action was part of Operation Mountain Thrust, a counter-insurgency operation in the south. (Posted 11:38 a.m.)

Pentagon releases timeline of North Korean missile launches

WASHINGTON (CNN) -- A senior Pentagon official provided the following timeline of North Korea's missile launches, which included a mix of Scud and Nodong missiles before and after the launch of the Taepodong missile.

(Note: these times DO NOT exactly match the time given out by the White House. The official could not resolve the discrepancy)

1. 2:32 p.m. EDT July 4 2. 3:04 p.m. EDT July 4 3. 3:59 p.m. EDT (Taepodong 2) July 4 4. 6:12 p.m. EDT July 4 5. 6:31 p.m. EDT July 4 6. 7:12 p.m. EDT July 4 7. 4:15 a.m. EDT July 5 (Posted 10:59 a.m.)

N. Korea test-fires several missiles but long-range rocket fails

WASHINGTON (CNN) -- North Korea test-fired a series of at least seven missiles Wednesday, sparking angry responses from the world community and the scheduling of an urgent meeting of the United Nations Security Council.

A long-range missile and five shorter-range rockets were launched early Wednesday, but the closely watched long-range test failed within a minute, U.S. officials said. A seventh missile was fired in the evening, about 14 hours after the first was launched, according to North American Aerospace Defense Command and the Japanese Defense Agency.

A senior Russian military official said Russian missile detection systems had recorded 10 launches from North Korea. The tests began shortly after 3:30 a.m. local time Wednesday (2:30 p.m. Tuesday ET), with the seventh missile landing in the Sea of Japan around 5:20 p.m., according to the Japanese Defense Agency.

The Taepodong-2, which some analysts believed capable of hitting the western United States, failed after about 40 seconds, the officials said. The U.N. Security Council met Wednesday morning to discuss North Korea's actions. It's likely that Japan and the United States will push for some kind of firm action at the meeting; perhaps a statement from the full council -- all 15 members -- against the test firing.

"This is obviously a very serious matter because of the North Korean provocation, but this is precisely what the Security Council is designed to handle," said U.S. Amb. John Bolton as he arrived at the U.N. for the meeting. "And we hope the council will rise to the occasion. We think we can proceed in a calm and deliberate fashion.

"But we hope we have a strong and unanimous signal from the council that this kind of behavior is unacceptable," Bolton added.

Chinese ambassador to the U.N. Wang Guangya called the test firings a "regret" and said China was "concerned." (Posted 10:58 a.m.)

Military ponders green security zone around Ramadi government center

BAGHDAD (CNN) -- The U.S. military working to regain control of the Anbar provincial capital of Ramadi from insurgents is pondering a strategy for a future stable government there -- the construction of a security bulwark for the town's government center that would be a kind of mini-Green Zone.

Col. Sean MacFarland, interviewed on American Morning, was asked about an idea that has emerged which calls for bulldozing building rubble near the war-torn government center and creating a sort of Green Zone around it. The Green Zone is the name of the heavily fortified sector in Baghdad where U.S. and Iraq authorities are based.

"Well, I don't like to use the term Green Zone. That tends to be a loaded term based on the Green Zone in Baghdad. But we are looking at options for the area around the government center. We're looking for ways to make lemonade out of lemons," said MacFarland, commander of the 1st Brigade Combat Team.

"The buildings are rubbled essentially as they now stand if they stand at all and once we clear that area out, we'll have a nice open area that will give us standoff against enemy snipers and afford us an opportunity to rejuvenate the center of the city, and we're looking at one of the options on the table is a park. and, I like that option. little bit of green space in the center of the city would be good for everybody's morale."(Posted 10:17 a.m.)

Russia says it's 'seriously concerned' about North Korean missile launches; debris may have fallen near Russian shores

MOSCOW (CNN) -- Russia on Wednesday said it was "seriously concerned" about the test firing of several missiles by its neighbor, North Korea, and officials were checking reports that debris from those missiles may have fallen close to Russian shores in the Sea of Japan.

At least one of the missiles landed within a few dozen miles from the far eastern port city of Nahodka, Russian state television reported. The Russian military could not immediately verify those reports.

Separately, a senior Russian military official said Russian missile detection systems had recorded 10 launches from North Korea -- a claim that conflicts with reports from the United States and Japan that North Korea has launched a total of seven missiles. (Posted 10:16 a.m.)

Enron founder Ken Lay dead

NEW YORK (CNN) -- Enron founder Kenneth Lay died early Wednesday in Aspen, Colo., a family spokeswoman said. Lay, 64, was awaiting sentencing after being found guilty of conspiracy and fraud. In a statement, spokeswoman Kelly Kimberly said,

"The Lays have a very large family with whom they need to communicate, and out of respect for the family we will release further details at a later time."

CNN affiliate KPRC in Houston said Lay was admitted to the Aspen Valley Hospital overnight with a massive coronary In May, Lay was found guilty of 10 counts of fraud and conspiracy related to the collapse of Enron, the energy company he founded that eventually grew into the nation's seventh largest company before it imploded after an accounting scandal.

It was an astounding fall from grace for the Houston businessman who was once nicknamed "Kenny Boy" for President Bush.

Lay had raised funds for Bush earlier in his political career. In the Enron trial, Lay was accused of lying to investors and Wall Street about the health of Enron in late 2001 even as he enriched himself by selling millions of dollars in stock.

Lay was scheduled for sentencing on Oct. 23 along with Enron's former chief executive Jeffrey Skilling, who was found guilty of conspiracy, fraud, making false statements and insider trading. Both men faced 25 to 40 years behind bars, legal experts said. Presiding Judge Sim Lake originally scheduled sentencing for Sept. 11. (Posted 10:01 a.m.)

Italian judge issues arrest warrants for CIA agents, U.S. military official

ROME (CNN) -- An Italian judge Wednesday issued arrest warrants for four Americans -- three CIA agents and a U.S. military official -- in connection with the investigation into the alleged kidnapping of an Egyptian-born Muslim cleric in Milan in 2003.

Judge Enrico Manzi told CNN that he also issued arrest warrants for two Italians, who are members of the Italian military intelligence service Sismi.

The warrants against the four Americans are in addition to warrants issued in December for 22 other Americans alleged to have been involved in the purported abduction.

The case revolves around the alleged kidnapping of Osama Nasr Mostafa Hassan, also known as Abu Omar, in February 2003. At the time of his disappearance, Milan prosecutors were investigating him for alleged links to terrorism.

Prosecutors allege that a CIA team seized him, flew him to Egypt, and used torture as part of an interrogation there. (Posted 8:29 a.m.)

Atlantic City casinos begin to shut down as New Jersey budget crisis continues

ATLANTIC CITY, N.J. (CNN) -- Atlantic City's 12 casinos began shutting down for the first time ever at 8 a.m. ET Wednesday morning,as the New Jersey budget crisis that began July 1st continued.

Among the non-essential government agencies affected by the shut down was the state Casino Control Commission, which is charged with regulating gambling in Atlantic City's casinos.

The casinos contribute some $1.2 million in tax revenues to the state each day, according to the Casino Control Comission.

Tuesday, state legislators spent their Fourth of July holiday trying to resolve the budget crisis, and lawmakers will remain in Trenton until a 2007 budget is enacted.

Gov. John Corzine urged the assembly to come to a consensus quickly, saying there was much at stake than "a cancelled visit to Atlantic City." (Posted 8:05 a.m.)

Iraqi parliament member: Kidnappers of lawmakers contact authorities with demands

BAGHDAD (CNN) -- People who claim to have kidnapped an Iraqi parliamentarian have made contact with politicians and issued demands for her release, an Iraqi parliament member told CNN on Wednesday.

Tayseer al-Mashhadani was kidnapped in Baghdad last Saturday.

People using her cell phone called her political party -- the Iraqi Accord Front, the Sunni political coalition, the parliament member said.

The kidnappers called for a timetable for the withdrawal of coalition troops, freeing all prisoners from detention, and a halt in attacks on mosques.

The people said she would be killed if authorities didn't meet these demands within three days.

The parliamentarian -- who didn't want his name used -- said that there are negotiations between Mashhadani's party and the kidnappers, and authorities are hopeful they can secure the lawmaker's release.

Maj. Gen. William Caldwell, a spokesman for multinational forces in Iraq, said Iraqi and coalition forces have been conducting a "significant" effort designed to find and free her.

There's a "full-court press going on right now," Caldwell said.

He noted there there were operations conducted last night that "didn't produce the results" the military hoped for. But efforts to find the lawmaker go on. (Posted 7:47 a.m.)

Israel signals it intends to 'change the rules of the game' in dealing with the Palestinians, wider military campaign approved

JERUSALEM (CNN) -- Israel signaled Wednesday it intends "to bring about change in the rules of the game" after a longer-range Palestinian rocket hit a city in southern Israel and militants continued to hold a kidnapped Israeli soldier.

A Qassam rocket traveled at least 12 kilometers (7.4 miles) from the tip of Northern Gaza Tuesday, striking a parking lot at a school building in central Ashkelon. No one was hurt.

Israeli Prime Minister Ehud Olmert called the rocket attack a "major escalation ... in the war of terror that Hamas, which rules the Palestinian Authority, is responsible for."

Following the Cabinet meeting to discuss operation "Summer Rains," the Israeli government said, "The target(s) of the operation, as we pointed out at the beginning, remain the same: releasing the kidnapped soldier, Gilad Shalit and stopping the firing of rockets."

In a significant uptick in operations, the Security Cabinet said, "Taking the kidnapping and the firing of rockets into consideration, including the firing of Qassams on Ashkelon, Israel must prepare to bring about a change in the rules of the game in regard to how it operates in relation to the Palestinian Authority and the Hamas..."

(Posted 7:46 a.m.)

Iran, EU to hold nuclear talks Thursday, after unexplained postponement

BRUSSELS, Belgium (CNN) -- European Union foreign policy chief Javier Solana will meet with Iran's top nuclear negotiator Ali Larijani on Thursday in Brussels, after the Iranian postponed the meeting by a day without an explanation, Solana's office said.

"I was surprised to hear that Dr. Ali Larijani has decided at the last minute to postpone his trip to Brussels as previously agreed with him to take place today," Solana said.

The two will discuss a proposal to give Iran economic, technical and political incentives if it halts uranium enrichment.

The EU high representative spoke to Larijani on the telephone and they agreed to a second meeting on Tuesday, July 11. (Posted, 6:48 a.m.)

Iraqi PM wants independent probe into Mahmoudiya killings

BAGHDAD (CNN) -- Iraq's prime minister on Wednesday called for an independent Iraqi investigation into the killings in March of four members of an Iraqi family, including the rape and shooting of one of them.

Steven D. Green, a 21-year-old former Army private from the 101st Airborne Division, has been charged with killing the four Iraqis -- a man, a girl and two women, one of whom he allegedly raped.

No one else has been charged, but military investigators said they have linked four other soldiers to the incident.

Speaking at a press conference in Kuwait, Iraqi Prime Minister Nuri al-Maliki also said the immunity from Iraqi prosecution granted to international forces in Iraq should be reviewed. He noted that such immunity emboldens coalition troops. (Posted 6:48 a.m.)

North Korea test fires 7th missile

(CNN) -- North Korea test fired a missile on Wednesday, the seventh such launch in a day, NORAD spokesman Mike Kucharek told CNN Radio.

The Japanese Defense Agency said one ballistic missile was fired from southeastern North Korea around 5:20 p.m. (4:20 a.m. ET), landing in the Sea of Japan about 10 minutes later.

The range of the missile was unclear. (Posted, 6 a.m.)

White House 'strongly condemns' missile launches

WASHINGTON (CNN) -- The White House issued a statement late Tuesday that "strongly condemns" North Korea's test firing of six missiles, calling it a "provocative act."

"The United States strongly condemns these missile launches and North Korea's unwillingness to heed calls for restraint from the international community," the statement said. "We are consulting with international partners on next steps."

The U.N. Security Council is scheduled to meet Wednesday morning to discuss North Korea's actions.

North Korea test-fired a long-range missile and five shorter-range rockets early Wednesday, but the closely watched long-range test failed within a minute, U.S. officials said.

The tests began shortly after 3:30 a.m. Wednesday (2:30 p.m. Tuesday ET) and lasted for about five hours. The Taepodong-2, which some analysts believe is capable of hitting the western United States, failed after about 40 seconds, the officials said. (posted 11:50 p.m.)

Foam breaks off Discovery, but NASA says it's no problem

KENNEDY SPACE CENTER, Fla. (CNN) -- At least five pieces of foam -- the material that broke off and doomed the space shuttle Columbia -- flaked off Discovery after its launch Tuesday, but the particles broke loose after a critical time period, said shuttle program manager Wayne Hale.

"The shuttle (Discovery) performed very, very well. We saw nothing that gave us concern or pause that we wouldn't be safe to fly the next mission," Hale said.

After a crack was discovered in Discovery's foam covering, there was a question as to whether Discovery would launch Tuesday -- the Fourth of July. NASA engineers decided the problem caused no risk to the seven astronauts on board. The foam insulates the exterior fuel tank to prevent ice from forming.

Discovery, which is to dock with the International Space Station Thursday, is expected to have a 13-day mission. (Posted 10:53 p.m.)

Reports: North Korea considers missile tests their sovereign right

North Korean Foreign Ministry officials confirmed to reporters for two Japanese broadcast stations Wednesday that the Communist nation had carried out missile tests.

The officials said it was their nation's sovereign right to conduct the tests, according to the reporters from NHK News and TV Tokyo. The reporters were in the North Korean capital to work on other stories. (Posted 10:46 p.m.)

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