President Bush has refused to rule out the possibility of a full pardon for Vice President Dick Cheney’s former chief of staff, Lewis “Scooter” Libby. Bush commuted Libby’s 30-month prison term Monday shortly after a federal appeals panel ruled that Libby could not put off serving his sentence while he appealed his conviction. That meant jail time for Libby was imminent, and the U.S. Bureau of Prisons had already assigned him a prisoner identification number. Libby was convicted in March, the highest-ranking White House official ordered to prison since the Iran-Contra scandal. He was found guilty of perjury, obstruction of justice and making false statements in the investigation into who blew the cover of CIA officer Valerie Plame. On Tuesday, Bush defended his decision to reporters outside the Walter Reed Army Medical Center.

President Bush: “I took this decision very seriously on Mr. Libby. I considered his background, his service to the country, as well as the jury verdict. I felt like the jury verdict ought to stand. And I felt like some of the punishments that the judge determined were adequate should stand. But I felt like the 30-month sentencing was severe. I made a judgment, a considered judgment, that I believe is the right decision to make in this case, and I stand by it.”

New figures show U.S. troops are now outnumbered by another force in Iraq: private contractors. According to the Los Angeles Times, there are more than 180,000 U.S.-paid private contractors in Iraq. That’s more than the number of U.S. troops and civilian government officials combined. Most of the contractors are Iraqis. Twenty-one thousand are Americans, and 43,000 from other countries. The number is likely higher because not all security contractors were counted in the total.

President Bush marked the 4th of July holiday with a speech to U.S. soldiers at an airbase in West Virginia. The president warned against a withdrawal from Iraq and said a continued commitment will take more “sacrifice.”

President Bush: “We all long for the day when there are far fewer servicemen and women in Iraq. The time will come when Iraq has a stable, self-sustaining government that is an ally against these extremists and killers. That time will come when the Iraqi people will not need the help of 159,000 American troops in their country. Yet withdrawing our troops prematurely, based on politics, not based on the advice of our national military commanders, would not be in our best interests.”

In other Iraq news, the Pentagon says it’s probing new allegations of wrongdoing during the assault on Fallujah three years ago. U.S. marines are said to have killed as many eight unarmed Iraqi prisoners as U.S. forces attacked Fallujah in November of 2004. The Marine unit under investigation is the same involved in the killing of 24 civilians in Haditha in 2005.

The Justice Department has announced it will seek the death penalty if an accused former solider is convicted of committing rape and murder in the Iraqi town of Mahmoudiya last year. Steven Green is accused of raping and murdering 14-year-old Abeer Qassim Hamza al-Janabi and killing her two parents and five-year-old sister. Two soldiers have already been sentenced to jail terms in the case.

In other Iraq news, the Iraqi Cabinet has approved part of a controversial oil law. On Tuesday, Cabinet ministers voted to send the law on to Parliament. U.S. lawmakers have demanded Iraq advance the measure before it approves additional war funding. Critics say the law would leave Iraq’s oil open to foreign takeover.

The BBC reporter Alan Johnston has been freed after nearly four months in captivity in the Gaza Strip. Johnston was released following an undisclosed deal between Gaza’s Hamas-led government and his captors. Hours after his release, Johnston spoke from Hamas leader Ismail Haniyeh’s offices in Gaza.

Alan Johnston: “There are just hardly the words to say how relieved I am that this thing has ended, that I am free again. I dreamt of being free, literally dreamt many, many nights, and now I’m out. And it is, as I say, almost difficult to describe how good this moment feels. And I’m grateful to so many people that have worked to try to bring this about, people — the Hamas movement, who did a great deal putting a huge amount of pressure on the kidnappers in the last few weeks, especially Prime Minister Ismail Haniyeh, from the beginning, making clear that he didn’t, in any way, approve of this kidnapping and kept insisting that it had to end and kept looking for ways to end it.”

In other news from the Occupied Territories, five Palestinian fighters have been killed in the latest Israeli military raid. Israeli troops and tanks attacked the al-Barij refugee camp in central Gaza. Meanwhile in the West Bank, Israeli troops shot and killed a 15-year-old Palestinian teenager they mistook for a gunman because he was carrying a toy weapon.

Meanwhile, Palestinian government workers have received full salaries for the first time in 17 months. Nearly 140,000 employees have been denied wages since the U.S. and Israel imposed an international boycott on the democratically elected Hamas-led government. Israel began releasing some of the seized Palestinian tax revenue to Palestinian President Mahmound Abbas last week. Abbas is refusing to pay salaries to 19,000 government workers allied with Hamas.

Iran has renewed calls for talks with the United States. On Wednesday, Iran’s Deputy Foreign Minister Abbas Araghchi spoke during a visit to South Africa.

Iran’s Deputy Foreign Minister Abbas Araghchi: “If Americans want to continue negotiations, we are also available. We don’t insist. This is their problem. They have to take care of their own problems. But we are still there to help Iraqi people and Iraqi government.”

In El Salvador, government forces are being accused of a crackdown on a protest against privatizing water. On Monday, Salvadoran police opened fire and shot tear gas at a rally organized by the Association of Rural Communities for the Development of El Salvador, or CRIPDES. Thirteen people were arrested, including four CRIPDES leaders.

In California, Governor Arnold Schwarzenegger’s widely publicized environmental commitments are under scrutiny following the departure of two top members of the state air quality board. Board Director Catherine Witherspoon stepped down this week amid allegations Schwarzenegger has repeatedly interfered with attempts to impose emission cuts on industry. Witherspoon’s resignation comes just days after Schwarzenegger fired the board’s chair, Robert Sawyer. Schwarzenegger said Sawyer failed to impose the emission cuts quick enough. Sawyer claims the governor was in fact trying to slow him down. Witherspoon said the accusation she and Sawyer were responsible for delaying the emissions cuts is “Orwellian.”

And here in New York, the environmental activist Daniel McGowan has reported to jail to begin serving a seven-year sentence. McGowan was convicted for his role in two acts of arson in Oregon in 2001. The judge ruled that one of the fires was an act of terrorism, even though no one was hurt in any of the actions. McGowan appeared for an interview on Democracy Now! last month.

Daniel McGowan: “It’s really hard. I’m still trying to get the big picture of all this. I definitely have regrets. I have regrets that I employed arson as a tactic. I don’t think morally I’m wrong about what I did, but I do think, strategically and tactically, it is unwise decision. I wish that I had people in my life at the time to kind of guide me back to a different path. But, you know, I was very disenchanted and very upset about what I saw. I think those feelings are legitimate, and I think young kids that have these feelings right now and not-so-young kids are — they’re legitimate thoughts, and we have to — basically, we have to come up with ways of dealing with the crisis and stop ignoring it. And that was my message to the media that day, after sentencing, was we have to stop pretending this is all about crime and punishment and start dealing with real issues like global climate change.”