Two Palestinians and an Israeli soldier died yesterday when Palestinians ambushed an Israeli patrol on the Jordanian border. The ambush followed a holiday weekend in which Israel arrested six Islamic militants on the West Bank and a ceasefire ordered by Palestinian leader Yasser Arafat appeared to be crumbling. After Israeli Prime Minister Ariel Sharon defied the Christian world by barring Arafat from attending midnight Mass in Bethlehem on Christmas Eve, Arafat delivered a “heavy-hearted” speech on Palestinian television, which was relayed live to a subdued crowd in Manger Square, where a large banner read “Sharon assassinates the joy of Christmas.” But barely 12 hours later, the leaders announced negotiations for a ceasefire would continue.

After intense pressure from the U.S. and India, authorities in Pakistan yesterday said they arrested the founder of the Jaish-e-Mohammed organization, a militant Islamic group that Indian officials blame for a recent attack on the Indian Parliament building. The detention of Masood Azhar is the most significant step taken by Pakistan’s military government to clamp down on those accused of staging the attacks to end Indian rule in Kashmir. Indian and Western intelligence agencies say Azhar has close links with the Taliban, as well as Pakistan’s intelligence service.

Thousands of Pakistani troops have been clambering up the ragged border peaks of southwest of Islamabad for more than a week to seal off isolated escape routes out of Afghanistan. In Afghanistan’s Tora Bora region, U.S. commandos and Afghan guerrillas still poke through the caves and bunkers where fighters from the al-Qaeda organization made their last stand. But after two-and-a-half months of bombing and a manhunt aided by the world’s most advanced intelligence-gathering devices, Osama bin Laden is still not in anybody’s gun sights.

Hundreds of asylum seekers stormed the tunnel between France and Britain yesterday, trying to force their way into England by walking the 25 miles through the Channel Tunnel. About 550 people took advantage of the quiet Christmas period to try to take over the tunnel, but none made it through. French police arrested 129 people in the first wave of refugees. At midnight, a second wave of some 400 was pushed back by French riot police using tear gas outside the Calais entrance to the tunnel. Refugees regularly try to enter Britain illegally from France on ferries, by train or through the Channel Tunnel. In the last year, thousands of refugees have made that trip.

This news from Moscow: A Russian military journalist who exposed nuclear waste dumping by the Russian Navy was convicted yesterday of treason and sentenced to four years in prison on a case that critics said illustrates the risks of antagonizing the Russian military. The ruling capped four years of legal twists and turns for Grigory Pasko, a 39-year-old Navy captain from Vladivostok who reported on environmental abuses by the Russian Pacific Fleet. Although the judge threw out nine counts of treason against Pasko, he was found guilty of collecting information on secret military exercises with the intention of passing it on to Japanese journalists.

Zimbabwe’s main opposition party, the Movement for Democratic Change, accused the government of intensifying intimidation, blaming it for deaths of three of its members over the last four days. The MDC’s leader, Morgan Tsvangirai, said he believed the deaths marked the beginning of a new campaign of violence and intimidation against the MDC in the run-up to the presidential election in March. Meanwhile, the government has accused the opposition of mounting terrorist attacks against its supporters.

The man who, authorities say, hid explosives in his shoes and tried to ignite them during a transatlantic flight on Saturday has been placed under a suicide watch pending a psychological examination. Authorities said they were still trying to determine a motive for his actions and have not yet ruled out possible links to Osama bin Laden’s al-Qaeda network. While his identity remains unconfirmed, his passport bears the name [Richard] C. Reid. British authorities believe the passport is valid. Meanwhile, The Times of London reported today that Reid attended the same London mosque as Zacarias Moussaoui, the Frenchman charged with conspiracy in connection with the September 11th attacks. And a report yesterday in France’s La Provence newspaper, citing police and intelligence sources, said Reid had belonged to an Islamic movement called Tabligh, but left because he said it was not radical enough for him. A bond hearing is scheduled for Friday. If convicted of intimidation or assault of a flight crew, Reid could be sentenced to 20 years in prison.

According to a senior official at the Internal Revenue Service, illegal tax shelters saved big companies at least $14.7 billion in federal income taxes last year. Now all companies are being offered an amnesty in return for confessing their illegal tax avoidance. The 95 companies that have already confessed their tax avoidance strategies to the IRS this year short-shrifted the government an amount equal to a dollar a week for every man, woman and child in the United States. In a break from past practice, Langdon announced on Friday that companies that disclose dubious tax shelters and the promoters who sold them by April 23 would not be charged the usual 20% penalty on taxes that were improperly avoided. “This is our Christmas present to big companies,” he said. “We’re going to determine who’s naughty and who’s nice by waiving the 20% penalty for those who are nice to the IRS.”

In a victory for the energy industry, the Bush administration is expected to announce soon that it is weakening a key clause of the 1970 Clean Air Act. The clause, which is known as the New Source Review, requires all power plants built before 1970 to install up-to-date pollution controls as soon as they undergo renovation. If eased, coal-burning power plants will be allowed to bypass tough anti-pollution rules, and neither elected officials nor environmentalists will be able to bring them to court. President Bush has been looking to weaken the Clean Air Act for some time, claiming its rules stifle energy output and do little to protect the environment. But it’s only now that his approval ratings are soaring in the wake of the so-called war on terrorism that he’s moved to revisit the issue. The utility industry was one of the Bush campaign’s staunchest supporters in the 2000 election.