1. New Pakistani government signs accord with Taliban in Swat that sets in action a Pakistani troop withdrawal and the establishment of Taliban Sharia law.

2. After heavy concessions to Hizballah and Iran at Qatar meetings, Lebanese parliament is set to now elect a president Sunday after months of delay and dispute. Hizballah, Iran gains are significant and substantial.

3. Egypt-brokered talks between Israel and Hamas hit snag as Hamas says no deals unless blockade lifted. Israel instead preparing for massive Gaza assault.

4. Turkey-brokered Israel-Syria talks continue as unanswered question remains, will Syria forgo support for Hizballah?

5. The FBI's top native-Arabic speaking agent says the FBI counterterrorism division is woefully ill-equiped to confront current terrorist threat. FBI brass disagrees.

ENERGY AND THE ECONOMY
New fears on long-term oil supplies drive prices higher - International Herald Tribune
Oil hits fresh record to surpass $135 a barrel - International Herald Tribune
Gas Prices Force Ford to Cut Production - ABC

INFORMATION WARFARE
French Court Upholds: al-Durra Death Staged for Intifada Propaganda - Reuters

IRAQ
Iraqi Troops Welcomed In Sadr City - Washington Post
Operation in Sadr City is an Iraqi success, so far - IHT

IRAN
Iran's surprise package tests waters - Asia Times
US looking for progress in Iran nuclear report: envoy - AFP

ISRAEL
Syria-Israel peace deal 'requires shift in U.S. policy' - Haaretz/a>
Hamas says no truce unless Israel lifts Gaza blockade - AFP

LEBANON
Iran Gains a Big Victory in Lebanon - New York Sun
Hizballah Wins Big In Lebanon Deal - Hartford Courant
Disabled activists helped prod Lebanon politicians into accord - Los Angeles Times
History in the making for Hizballah, Nasrallah - Asia Times
Map: Hizballah Communications Network that Started Conflict - Global Politique
Lebanon will have a president this Sunday - Ya Libnan

PAKISTAN
Pakistani government inks peace deal with Swat Taliban - Long War Journal
Pakistan signs truce with Taliban faction - Los Angeles Times
Taliban says Pakistan peace deal depends on Sharia enforcement - AFP
US slams Pakistan pact with al-Qaeda-linked Taliban rebels - The Australian

UNITED STATES
Agent says 'FBI counter-terrorism division is ill-equipped to handle the terrorist threat' - LA Times
DNI: Intelligence Community Pay to be Performance-Based, Not Time-Based - Counterterrorism Blog
Pentagon Plan: 'Eliminate' Space, Cyberspace Threats - Wired