Two former Blackwater operatives have been charged with murder in the shooting deaths of Afghan civilians last year. Justin Cannon and Christopher Drotleff were arrested on Thursday following their indictment by a federal grand jury.

The news broke just hours after it was revealed Blackwater had reached a settlement for the shootings of around seventy Iraqis. Blackwater is reportedly paying $100,000 for each of the Iraqis killed by its forces and between $20-30,000 to each Iraqi wounded. News of the settlement came a week after a federal judge dismissed manslaughter charges against five Blackwater operatives involved in the Nisoor Square massacre that killed seventeen Iraqi civilians.

The Obama administration has released a report on the intelligence lapses that failed to prevent the botched Christmas Day jetliner attack. The report says the US received “discrete pieces of intelligence” to identify the suspect, Umar Farouk Abdulmutallab, as early as October that should have kept him off the plane. Abdulmutallab was ultimately flagged for extra screening while the plane was in flight. Singling out the National Counterterrorism Center and the CIA, the report also says US intelligence agencies had focused too heavily on al-Qaeda plans to strike US targets in Yemen instead of directly inside the United States. Speaking from the White House, President Obama said he had ordered changes to address the security lapses.

President Obama: “I am less interested in passing out blame than I am in learning from and correcting these mistakes to make us safer, for ultimately the buck stops with me. As president, I have a solemn responsibility to protect our nation and our people, and when the system fails, it is my responsibility.”

Yemen has issued its strongest warning to date against a US military intervention inside its borders. Speculation of a US military campaign inside Yemen has grown since the Yemen-based al-Qaeda in the Arabian Peninsula claimed responsibility for the failed Christmas Day attack. On Thursday, Yemen’s deputy prime minister, Rashad al-Alimi, said, “If there is direct [US] intervention by the United States, it will strengthen al-Qaeda. We cannot accept any foreign troops on Yemeni territory.”

The US has increased airport screening in the wake of the failed Christmas Day attack, prompting concerns over racial profiling. A Canadian Muslim woman has come forward with allegations she was harshly treated while trying to enter the United States last week. Ayat Manna says she was picked out of a line and questioned by US customs agents at Halifax International Airport on her way to visiting her husband in Ohio. Manna says she was refused entry after a four-hour interrogation. In an interview with Canadian television, Manna said she believes she was singled out for wearing the traditional Muslim headscarf.

Her case comes as former New York City mayor Ed Koch has ignited a controversy for claiming “hundreds of millions” of Muslims are terrorists. Koch made the comments Thursday in an interview with Fox News.

Ed Koch: “Of course the vast majority of Muslims — there are a billion, 400 million — are not terrorists. But there are hundreds of millions who are. They want to kill every Christian, every Jew, every Hindu who won’t convert. And we ought to put it on the table.”

The family of the suicide bomber who attacked a CIA base in Afghanistan last week has revealed new details about his background. In an interview with the New York Times, a brother of Humam Khalil al-Balawi said their family had last heard from Balawi when he was volunteering as a medical doctor to treat wounded Palestinians in the Gaza Strip. The brother says Balawi was “changed” by Israel’s three-week assault on Gaza that killed over 1,300 Palestinians.

In Afghanistan, new figures show children account for the most deaths in the over eight-year US-led war. The Afghanistan Rights Monitor says over 1,050 people under the age of eighteen were killed in Afghanistan, an average of at least three every day.

The Pentagon says it’s opened a probe into allegations two Afghan teens were beaten and tortured while imprisoned at the Bagram Air Base last year. The teens, Issa Mohammad and Abdul Rashid, were seventeen and younger than sixteen, respectively, at the time. They say they were punched and slapped in the face, photographed naked, and deprived of sleep while being held in solitary confinement. Rashid said he was also forced to look at pornography.

Meanwhile, a Washington, DC appeals court has begun hearing arguments in the government’s attempt to prevent three Bagram prisoners from challenging their detention. The Obama administration is appealing a lower court ruling granting the prisoners habeas corpus rights because they were seized outside Afghanistan. The Obama White House has continued the Bush administration policy of refusing to recognize the legal rights of foreign prisoners held overseas.

A top UN official says he believes video footage showing Sri Lankan soldiers summarily executing Tamils during clashes last year is authentic. The video shows what appear to be Sri Lankan soldiers killing unarmed, naked and blindfolded Tamils. Sri Lanka has dismissed the videos as a forgery. But on Thursday, the UN Special Rapporteur on Extrajudicial Killings, Philip Alston, said the tape is authentic and called for an independent inquiry.

UN Special Rapporteur on Extrajudicial Killings Philip Alston: “The conclusion clearly is that the videotape is authenticate. I have therefore called upon the government of Sri Lanka to respond to these allegations. And the conclusion that I’ve reached is the following: In light of the persistent flow of other allegations of extrajudicial executions committed by both sides during the closing phases of the war against the LTTE, I call for an independent inquiry to be established to carry out an impartial investigation into war crimes and other grave violations of international humanitarian and human rights law allegedly committed in Sri Lanka.”

In Israel and the Occupied Territories, at least three Palestinians were killed Thursday when Israeli warplanes bombed the Gaza Strip. The dead reportedly included a fifteen-year-old Palestinian boy. Several more Palestinians were wounded.

Newly disclosed emails show the Federal Reserve Bank of New York asked the bailed-out insurance giant AIG to hide details on the billions of dollars it paid to banks at the height of the financial meltdown. In what some have called the “backdoor bailout,” AIG gave nearly $13 billion to Goldman Sachs and tens of billions more to other firms, including Bank of America, Merrill Lynch, JPMorgan Chase, Morgan Stanley and several foreign banks. The newly revealed emails show the New York Fed deleted a reference in an AIG regulatory filing documenting payments to Goldman Sachs and the French bank Societe Generale. Treasury Secretary Timothy Geithner was the head of the New York Fed at the time. In a statement, the Treasury Department said Geithner had played “no role” in the AIG secrecy.

An exhaustive new scientific study concludes the coal mining practice of mountaintop removal is so dangerous to the environment and public health that it should be banned. Published in the journal Science, the study by a team of twelve scientists is said to be the most comprehensive look at mountaintop removal to date. The study says increases in birth defects, cancers, fish kill and water contamination were among the effects of mountaintop removal. The study’s lead author, Margaret Palmer of the University of Maryland, said, “Scientists are not usually that comfortable coming out with policy recommendations, but this time the results were overwhelming… [The] only conclusion that one can reach is that mountaintop mining needs to be stopped.” The study comes on the heels of this week’s controversial approval of a new mining permit for the Hobet 45 mine in West Virginia.

The Environmental Protection Agency has unveiled new standards for regulating smog. The “primary” standard for smog levels would be set at sixty to seventy parts per billion. The standard falls in line with proposals from agency scientists that the Bush administration rejected in setting its rules in 2008. Frank O’Donnell of Clean Air Watch said the move could become “the single most important environmental decision that the EPA makes this year.”

And a new government survey shows an increasing rate of sexual abuse of jailed youth in US juvenile prisons and other facilities. According to the first National Survey of Youth in Custody, one in ten youths reported sexual abuse by staffers in the previous twelve months. Gay and lesbian youths reported abuse at a higher rate of one in five. Jamie Fellner of the US Program at Human Rights Watch said, “The high rates of victimization are powerful testimony to the failure of governments to safeguard the boys and girls in their care.”