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In San Jose, Calif., home to Silicon Valley and some of the highest home values in the country, a bumper sticker reads, “Dear God, one more bubble before I die.”

Chances are the car’s driver lives in Willow Glen, a neighborhood with a small-town feel, Spanish-style single family homes and a main street with sidewalk cafes and locally owned shops.

To live there, residents are paying the city’s highest prices relative to what they could pay to rent similar properties in the same area. When you compare mortgage payments to the value of a similar home on the rental market, the price to buy is 26.1 times higher, one of the biggest differences in the country.

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Willow Glen is one example of a neighborhood where homeowners are still taking chances on future appreciation–and paying a premium above and beyond their neighbors for that confidence.

Still, it’s not as overpriced as New York’s TriBeCa (10013) or Boston’s Chinatown (02111), where demand for high-end condos, new development and proximity to downtowns have pumped up prices.

Behind the Numbers

While real estate markets may be slumping across the country, there are plenty of neighborhoods with similar characteristics. These include downtown Seattle (98104), Mission Hills, San Diego (92103) and Coronado, Phoenix (85006).

Boston

To find them, we used data from Hotpads.com, an aggregator of rental listings from brokerages and real estate investment trusts, as well as home sales offerings from multiple listing services and individual brokers.

In a report for Forbes.com, Hotpads.com produced a price-to-earnings spread for each ZIP code in the nation’s 40 largest cities by comparing rental costs with buying costs for similar properties, based on number of bedrooms, location and price per square foot.

Price-to-earnings, or P/E, expresses how much one has to pay for each dollar of return. A neighborhood with a high P/E is overvalued because a buyer is getting a low return based on costs–and paying a huge premium to live in area relative to how much it would cost to rent a similar property there. In TriBeCa, for example, which is No. 1 on our list, the P/E of the measured property is 36.3.

San Francisco

A high P/E can be a sign of an investment being overpriced, but a rock bottom P/E doesn’t mean a bargain. In fact, when you get into the single digits, you’re usually buying a weak investment in an area few are interested in.

Detroit’s 48235, around 7 Mile Road, for example, has a P/E of 3. It is inundated with foreclosed properties and houses going for as little as $25,000. It’s hard to put an exact epicenter on Detroit’s real estate crash, but this neighborhood is in contention.

High-Priced Properties

Instead, mini-bubbles are created when buyers invest in robust areas where they expect homes will continue to rise in value. If their gamble pays off and the neighborhood appreciates further, today’s overpriced buyer is tomorrow’s smart investor.

A neighborhood with a very high P/E, like West Hollywood, Calif., where rents trail prices by 30 times, has an expectation of future price increases baked into the cost of buying. It’s not prime West Hollywood, but since it’s on the edge of nicer parts of town and of affluent neighborhood Los Feliz, it’s been attractive to speculators, despite the cost.

But expensive does not mean always mean overpriced.

New York City

Limestone townhouses on the Upper East Side of Manhattan, for example, are listed for ever-dizzying prices. Financier J. Christopher Flowers bought a $53 million townhouse on East 75th Street in 2006, and sold a smaller East 73rd Street townhouse undergoing renovation for $23 million in 2007.

Expensive? Yes. Overpriced? Not so much.

Consider that a five-bedroom mansion on East 74th Street that once belonged to Eleanor Roosevelt is currently listed for $60,000 a month. Prices may be tops in the city, but prime rental prices are peerless as well.

Instead, the country’s most overpriced areas are ZIP codes like San Francisco’s Outer Sunset neighborhood, 94122, which, given its location near the Pacific Ocean and on the south side of Golden Gate Park, was during the most recent boom widely thought to be up-and-coming.

Median prices surged from $560,000 in June of 2003 to a peak of $771,000 in March of 2008, based on Trulia.com price data drawn from California’s multiple-listing service.

Sometimes, however, betting on price appreciation doesn’t quite work out, and when markets start to soften, speculative areas are often the first to take a hit.

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San Francisco as a whole has declined 6% over the last year, but prices in the Outer Sunset have declined 10%, dropping to $692,000. Based on asking prices and asking rents, though, the market still has a way to fall before reaching equilibrium.

Investors and homeowners in the other nine neighborhoods on our list are likely hoping for immunity from this trend.

You can’t call them “good investments,” because they inevitably depreciate. But the models in our ranking of the top 10 vehicles with highest resale value do amount to sensible purchases for the way they minimize the dollar losses associated with owning and maintaining a vehicle.

The models on our list retain a higher percentage of their original purchase price than any other car you can buy. But high gas prices are having a dramatic effect on prices — so much so that in just a matter of weeks, the list of the top 10 vehicles with the highest resale values will look different.

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“Economy cars are improving,” says John Blair, chief executive officer of Automotive Lease Guides (ALG), a market research firm headquartered in Santa Barbara, Calif. “The outlook for small, fuel-efficient vehicles is much brighter today versus a year ago. And the outlook on SUVs has changed dramatically in the other direction.”

Basically, fuel efficient vehicles are gaining value and non-fuel-efficient vehicles are losing value.

Sensible but Fun

So it’s no surprise that the car that tops this ranking, the playful Mini Cooper, is one of the most fuel-efficient models on sale in the United States. It will hold more than 60 percent of its value after three years of ownership.

Audi S5

None of the models on our resale honor roll give up more than 15 percent of their purchase price per year through their first three years, based on data from ALG. And as automobile depreciation goes, that’s as good as gold. Go to the accompanying slideshow for the full list of vehicles with the highest resale values.

Some express youthful nonconformity, like the Scion xB, Nissan Rogue and Volkswagen New Beetle Convertible , numbers 7, 9 and 10, respectively. The Infiniti G37 Coupe, BMW 1 Series and Audi S5, which rank second, third and tenth, combine sophistication with spirited energy.

Even the two top-10 finishers that appear purely practical, Honda’s CR-V and Civic Hybrid, are far from pedestrian. They’re smartly styled, well engineered and have a refined driving experience. The Civic Hybrid adds technological charm to those attributes.

Hey, Good-Lookin’

Smart styling contributes a lot to a vehicle’s resale value, says John Blair, chief executive officer of ALG. That’s due to fundamental market dynamics: supply and demand.

A model that is uniquely attractive will generate more demand from people shopping for used cars. Naturally, that greater demand pumps up its resale price. Thus, ALG puts a heavy weight on appearance when it estimates the residual value of new vehicles.

Residual value is analogous to resale value, but it’s not the same thing: It’s the price that a model in average condition is expected to take in when eventually it is sold at a wholesale used-car auction. The retail value of a vehicle — the price a consumer pays to buy it — varies a little from model to model but generally runs about 15 percent above the ALG residual value, Blair says.

The firm’s estimates are used by automotive lease writers to determine how much a model will be worth when its lease expires. Our top 10 vehicles with the highest resale value — there are actually 11 models on the list, thanks to one tie — are based on ALG residual values expressed as a percent of the original purchase price. All are current, 2008 models. The ranking excludes specialty cars produced in low numbers.

All About Perceptions

In addition to a vehicle’s styling, its manufacturer’s reputation for quality has a big impact on how much value it retains, Blair says.

“The No. 1 influence is certainly a vehicle brand and the perception of the brand,” he says. “The used-car buyer is looking for a vehicle that’s not going to be a maintenance headache for them. If you have a strong brand, that has a real positive influence on the residual value.”

Of the vehicles on our list, the Honda Civic Hybrid, Honda CR-V, Infiniti G37 and Scion xB all have better-than-average predicted reliability, according to Consumer Reports. “Honda is at the top of that list,” in terms of having a sterling reputation for vehicle longevity, Blair says.

Volkswagen New Beetle Convertible

Manufacturers affect their vehicle’s residual values by carefully managing the supply side of the supply/demand equation. The aim is to meet demand without over-producing, so that discounts aren’t needed to sell the excess, Blair says. Honda does a good job of this.

“You need to balance the supply with the demand and have a lot of discipline with the pricing,” he says. “Producing too many cars and creating an environment where you have to discount the vehicles is the single biggest thing that’s going to erode your residual values.”

All of those precepts of value retention apply very clearly in our ranking.

None of the top 10 models are overproduced. In fact, quite a few are offbeat, unique and even limited in supply. For instance, the Volkswagen R32 is a limited edition of the Rabbit, of which only 5,000 will be sold in the United States for 2008.

Even less exotic models on our list, like the, Mini Cooper, Jeep Wrangler, Scion xB and Volkswagen New Beetle Convertible are specialty models in their own right. They might not be scorching performers or ultra-rare, but they are offbeat enough to be in shorter supply than the average vehicle. The same goes for the Honda Civic Hybrid, which is produced in far fewer numbers than the conventional Civic.

Cars like the BMW 1 Series, Infiniti G37 and Mini Cooper reach their pinnacle positions by a combination of brand reputation and desirability, Blair says. “The 1 Series is another example of a nicely styled vehicle with good driving characteristics.”

For the little Cooper, fuel-efficiency currently gives a boost to resale value, says Andrew Cutler, a spokesman for Mini. The Environmental Protection Agency rates the base Mini Cooper at 28 miles per gallon in the city and 37 mpg on the highway.

What’s more, Mini tries to create an engaging brand experience that makes owners feel like members of a special club. Cutler calls it “an expressive brand personality.”

“They then tell their friends how cool it is and invite them to join the club,” he says. “This brand experience, coupled with the car’s performance, safety and efficiency, keeps customers engaged for a longer period of time than has been seen with other niche vehicles.”

U.S. auto sales slumped to a 16-year low in July as automakers failed to keep up with consumers’ growing demand for smaller, more fuel-efficient vehicles. While production changes may help that problem, trouble in the credit and auto leasing markets will continue to take a toll on sales.

General Motors, Ford, Toyota and other automakers said Friday that their U.S. sales fell by double-digits. Nissan Motor Co. was the only major automaker to report a gain, with truck sales up 18 percent thanks in part to the new Rogue crossover and a boost in incentives. Nissan’s overall sales rose 8.5 percent.

Automakers were expecting a slide in July as high gas prices continued to cut into sales of trucks and sport utility vehicles and new troubles in the auto leasing sector further wrecked consumers’ confidence. July’s seasonally adjusted sales rate — which shows what sales would be if they continued at the same pace for the full year — was 12.5 million vehicles, according to Autodata Corp. That’s down from 17 million as recently as 2005.

Automakers expect things to get worse before they get better.

“We expect the second half of 2008 will be more challenging that the first half as economic and credit conditions weaken,” Ford’s marketing chief, Jim Farley, said in a statement.

Mark LaNeve, GM’s vice president of North American sales, said tightening standards for buyers with poor credit are costing the automaker sales of about 10,000 vehicles per month.

Customers looking for vehicle financing options were further squeezed late last month, when Chrysler LLC announced its financial arm would get out of the leasing business by the end of July. Automakers trying to sell trucks and SUVs returned by leaseholders are suffering big losses because the vehicles’ values have declined far more than projected.

Following Chrysler’s lead, Ford told dealers it would raise the price of leases on some trucks and SUVs, while GMAC Financial Services said it would stop offering leasing incentives in Canada. LaNeve said Friday that GM will watch the competition to decide whether it makes further leasing changes. Toyota said it has no plans to change its leasing strategy.

Farley said he doesn’t expect the changes to have a big impact on sales because automakers will start countering the higher lease costs with an escalation of sales incentives.

That rush began Friday, when Chrysler announced new incentives for August, including a 72-month financing plan with monthly payments similar to those of 36-month lease payments.

But even if automakers get buyers into the showroom, they’re having trouble matching their production with growing demand for smaller vehicles. Small cars represented 27 percent of sales industrywide in July, up from 21 percent in the same month last year, according to George Pipas, Ford’s top U.S. sales analyst.

Mike DiGiovanni, GM’s executive director of global market and industry analysis, said if supply constraints remain at the same pace for the rest of this year, it would cost the industry about 300,000 vehicle sales, but as the year goes on and automakers adjust production, he expects that number to go down.

Toyota said Friday it is accelerating production of four-cylinder engines and boosting production of the subcompact Yaris and the small Corolla by 40,000 units through October. Honda Motor Co. said it will adjust production of the hot-selling Civic, while GM is adding shifts to make the fast-selling Chevrolet Malibu and Cobalt cars, and Ford is boosting production of the Focus.

But meanwhile, automakers are suffering. General Motors Corp. said its July sales plunged 26 percent, led by a 35 percent decline in sales of trucks and SUVs. Some car models showed strength, with Chevrolet Malibu sales jumping 79 percent from the same month a year ago. But even GM’s car sales fell 12 percent as the company failed to keep up with demand for smaller models.

Earlier Friday, GM reported a $15.5 billion second-quarter loss, the third-worst quarterly performance in its history, largely due to North American sales losses and expenses from a massive restructuring plan.

Ford Motor Co. said its U.S. sales fell 15 percent compared with the same month a year ago. Its car sales were flat, while sales of Ford’s trucks and SUVs continued their steep decline, falling 22 percent.

Ford’s bright spot was the Focus, which saw sales rise 16 percent in July.

Despite its fuel-efficient lineup, Toyota Motor Corp. said its sales fell 12 percent last month, led by a 27 percent drop in truck and SUV sales. Sales of its Prius hybrid fell 8 percent as the Japanese company failed to keep up with growing demand for the fuel-efficient car.

Chrysler, whose lineup is more heavily tilted to trucks and SUVs than any other major automaker, said its sales fell 29 percent, with truck and SUV sales down 30 percent. Chrysler said that was partly due to cuts in low-profit sales to fleets, but even the company’s most fuel-efficient model, the Dodge Caliber, saw sales slide 9 percent.

Still, Chrysler remained upbeat, saying retail sales — or sales not to fleets — rose between June and July. The privately held company also said Friday it earned $1.1 billion before taxes in the first half of the year and is ahead of its financial goals thanks to aggressive cost-cutting.

Even Honda, which has reported sales increases in the last few months as consumers flock to its fuel-efficient cars, said sales fell 2 percent in July. Honda’s car sales were up 14 percent, but results were dragged down by a 22 percent drop in truck and SUV sales.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 26 sales days last month, two more than in July 2007.

The short, catchy film commissioned by the Chinese government was designed to plant a new, positive image of China in foreigners’ minds for the Beijing Olympics.

But instead of airing worldwide more than two months ago as planned, the 30-second TV spot is only now about to reach viewers, having been delayed repeatedly by Tibetan riots, a devastating earthquake and foreign criticism buffeting the games.

China’s hopes that the Olympics starting Friday will be a pivotal moment in national glory and global acceptance have been battered by unforeseen events. The disappointment has left some in China hurt and feeling unjustly treated.

The Chinese “tried hard to impress the world and to prove the country deserves respect and appreciation,” said Xu Guoqi, a China-born historian at Kalamazoo College in Michigan. “But the West used the Olympic torch relay and the coming games to shame the country and frequently remind the Chinese they were not good enough.”

The August Olympics still may appear picture-perfect on global TV, despite concerns about air pollution, overbearing security and media restrictions. Enthusiasm among Chinese for a strong showing by Team China remains high. But where officials once spoke of hosting the greatest games ever, they now seem ready to settle simply for an incident-free event.

“A safe Olympics is the biggest indicator of the success of the games,” Vice President Xi Jinping, the senior-most Communist Party leader overseeing preparations, told a rally of volunteers last month.

Worries about terrorism and protests have come to the fore. Beijing has taken on a strange air: Its new venues, skyscrapers and roadways hung with banners sparkle in anticipation while police expel political critics, some migrant workers and foreigners deemed suspect.

The Olympic letdown stands in contrast to the ambitious buildup. From the outset, Chinese leaders saw the games as a chance to boost China’s image, to redefine it as a worthy, humane global partner — and not a menacing behemoth. Ordinary Chinese thought it a ripe opportunity to mark the tremendous strides made in casting off poverty and totalitarianism and building the fourth-largest economy in the space of a generation.

In their bid for the Olympics seven years ago, Beijing officials said the games would increase interaction with the international community and spur improvements in human rights and media freedom. The Chinese government called on party image-makers to devise ways to appeal to foreigners and on officials to stoke popular enthusiasm at home. “Integrate with the world” became a catch-phrase.

The longest ever torch relay was planned. In a $40 billion makeover, Beijing invited top foreign architects to design futuristic sports venues, a new airport and other eye-catching modern landmarks. Residents were told not to spit in public and to obey traffic rules.

The country rolled out the most extensive Olympic education program ever, developing a special curriculum taught in more than 550 schools and encouraging tens of thousands nationwide to teach Olympic values and take part in sports meets and signature campaigns.

“The Olympics is about unity,” said 10-year-old Miwei Ruoye, a fifth grader at the Nanjing Road Primary School in Nanchang city, 780 miles south of Beijing’s Olympic venues. “It’s all about peace and friendship,” said her 11-year-old classmate, Wan Zhao.

In the school courtyard sits a 3-foot-tall model in bamboo and spray-painted silver of the new National Stadium, known as the Bird’s Nest.

“We’re teaching them that the Olympic spirit is international, that it doesn’t just belong to one country,” said Zhang Renzhi, a teacher and pingpong instructor in charge of the Olympic curriculum. “It’s an international, humanitarian spirit.”

The promotional film was a key part of this effort and the first ever commissioned by the government for overseas markets. Dubbed “a national image film,” the government planned for a May airing on CNN, the BBC and other broadcasters with international reach. The piece would mix images of ancient picturesque towns with shots of ultramodern Beijing and Shanghai.

“At the time we thought we were making history,” said one participant who, like several interviewed, requested anonymity because of a confidentiality agreement signed with the government agency overseeing the project. “They said this was the first time that China was communicating to the outside world rather than waiting for the world to come to us.”

Then events intervened. Oscar-winning director Steven Spielberg withdrew as an adviser to the opening ceremony to draw attention to China’s support for the Sudan government, which is waging a civil war in Darfur. The uprising by Tibetans brought a tide of critical reporting by the foreign media and turned the torch relay into a melee of protests.

Suddenly, the talk overseas, especially in the West, was of boycotts and Beijing’s suitability to host the games.

“We hoped that the Olympics would help people understand our country’s achievements, that this ancient civilization has started a new chapter,” said Luo Qing, a media expert in Beijing specializing in China’s national image. “But from the torch relay, we suddenly realized that we were preparing to open the nation’s front door to welcome people who do not wish us well.”

Even ordinary Chinese felt spurned.

“Here, we build sports venues, fix rail lines and construct airports, hurrying like a raging fire to prepare. There, people use Darfur one day and Tibet the next to fan the flames of protest and boycott. What’s going on?” Liu Songjie, a 24-year-old Beijing railway department employee, wrote in late March in his online diary, where his usual musings are about movies and pop culture.

“This is a hot face pressed on a cold rump,” Liu wrote, using a coarse saying for unrequited love.

China’s standing tumbled in at least three polls overseas. A spring survey by the Pew Global Attitudes Project found that favorable views of China slipped in nine countries out of 21 over the past year, the steepest in France and Japan, while “there were signs of apprehension about the country and its growing power.”

The uproar made poor timing for global outreach, and the promotional film was temporarily shelved. After more than 69,000 people died in the Sichuan earthquake in May, the broadcast was delayed again.

“It was because of CNN and BBC’s attitude so we did not broadcast at that time,” Guo Changjian, the State Council Information Office official in charge of the project, said of their critical reporting of the Tibet riots in March. “It was because the earthquake happened, the March 14 beating, smashing and looting incident happened. The timing was up to us.”

Guo said contracts with CNN and the BBC have been reached to air the film just before the Olympics opening on Aug. 8; both networks declined comment.

Still, the mood has shifted sharply from the friendly internationalism Chinese leaders hoped to display. Many Chinese are casting a critical eye on Western governments and media for what they see as tarnishing the Olympic moment.

“These Olympics will perhaps hurt the feelings of other countries. But it will be good for Chinese,” said Wu Jiaxiang, a former government researcher and now a blogger and businessman. “We care less about human rights than other countries and more about sovereignty. That’s bound to create an awkward feeling among other countries.”

Gaza Strip - Hamas forces battled Fatah-linked fighters with mortars and machine guns in a crowded Gaza neighborhood Saturday, leaving at least nine dead in the worst Palestinian infighting in nine months.

About 88 people were injured, 12 of them children, hospital officials said.

Loud explosions and gunfire could be heard throughout the day in the Gaza City neighborhood of Shijaiyeh, a stronghold of the Fatah-allied Hilles clan. Hamas accuses the clan of hiding suspects responsible for a car bombing last week that killed five activists of the Islamic militant group.

Hamas and the largely secular, Western-backed Fatah have waged a violent struggle for control of Gaza for years. But there have been few signs of Fatah resistance since Hamas seized control of the strip in June 2007.

Relations between the factions deteriorated sharply last week after the car bombing that killed Hamas militants in Gaza and each side has been cracking down on political opponents with growing intensity. Hamas in Gaza and Fatah loyalists of Palestinian President Mahmoud Abbas who control the West Bank have carried out mass arrests.

In the West Bank, Abbas’ troops enforced a new ban on public assembly and expanded their arrest sweep beyond Hamas. Club-wielding security men arrested and beat dozens of supporters of a non-violent Islamic group.

The Gaza clashes began when Hamas raided Shijaiyeh under heavy morning fog. Security forces stormed several high-rise buildings and rounded up rooftop snipers, gunmen and wounded fighters, said Islam Shahwan, a Hamas police spokesman.

Heavy battles with mortars and machine guns ensued. Three Hamas policemen and a Hilles member were killed, hospital officials said.

It was the deadliest internal Palestinian fighting since November when Hamas police killed seven people in a Fatah-organized memorial rally for the late Yasser Arafat.

Ahmed Hilles, a clan leader and Fatah official, said Hamas police cut off electricity as they launched the raid. He explained why the clan fought back.

“You have to decide: Either be trampled under Hamas’ shoes, or stand in dignity,” he told The Associated Press by telephone, with gunshots crackling in the background. Hilles fled to Israel later in the day, Israeli military officials confirmed.

By Saturday afternoon, Hamas police had seized control of Shijaiyeh, home to some 100,000 people. They deployed hundreds of police who went house to house in search of weapons and suspects. In all, more than 50 people were arrested, including some who had tried to flee disguised as women, Hamas said.

Senior Hamas official Siyad Siam said those arrested included men allegedly involved in last week’s attack. Hamas forces found explosives like those used in the bombing, as well as machine guns and other weapons, Siam told a press conference in Gaza City late Saturday.

“We are sending a message that no one is above the law and that no family is above the law,” Siam said. “Gaza will enjoy peace and security.”

More than 180 Palestinians who fled the fighting were allowed through a Gaza crossing into Israel, said an Israeli commander in the border area, Col. Ron Ashrov. The transfer began when a group, including injured people and armed men, ran up to the Gaza fence, Ashrov said.

Israeli soldiers were fired upon as they went to open the fence, apparently by Palestinians, Ashrov said. Twenty-two of those who crossed were injured, he said. Some of those who entered were youths, he said.

The unusual Israeli involvement to save Palestinians fleeing infighting was agreed to by Israeli Defense Minister Ehud Barak after Abbas and the Egyptian government requested the Israeli action, military officials said on condition of anonymity since no official announcement was made about the request.

Officials close to Abbas said Israel had agreed to allow only three of those who had fled to enter the West Bank, and the rest would be sent to Egypt.

Four mortar shells fired from Gaza landed in open fields in Israel Saturday causing no injuries, the army said. The mortars underscored the danger that the Palestinian infighting could embroil Israel.

In the West Bank, security forces armed with clubs arrested and beat dozens of supporters of a non-violent Islamic group, the Liberation Party, and broke up their rally in downtown Ramallah. An AP Television News cameraman was prevented by Abbas’ security forces from filming the beatings.

The pan-Islamic Liberation Party has sharply criticized the moderate Fatah leadership, but says it espouses non-violent change. In the past, members of the movement were able to march in the West Bank without hindrance.

A senior security official said there is growing fear Hamas is using the Liberation Party as a front in the West Bank.

Since Thursday, dozens of Liberation Party members have been arrested, said its spokesman, Baher Saleh.

Deeb al-Ali, chief of the national security forces in the West Bank, said all political gatherings were banned because of the growing tensions with Hamas.

“We have to stop rallies and marches or anything that leads to mass gatherings,” he said.

A North Korean soldier fatally shot a South Korean tourist Friday at a mountain resort in the communist North, prompting the South to suspend the high-profile tour program just as South Korean’s new president sought to rekindle strained ties between the divided countries.

The news of the unprecedented shooting of a 53-year-old woman at Diamond Mountain resort emerged just hours after new President Lee Myung-bak delivered a nationwide address calling for restored contacts between the two Koreas, which have been on hold since he took office in February.

Kim said South Korea would suspend future Diamond Mountain tours until it completes an investigation. The other some 1,200 tourists already at the resort are to complete their tours as scheduled by as late as Sunday, said Hyundai Asan, the South Korean company that operates the resort.

“We regret that our tourist was killed,” Kim said, adding that Seoul “will take appropriate corresponding measures” pending the results of the probe.

According to a North Korean account given to Hyundai Asan, the woman left her hotel around 4:30 a.m. to walk along the beach at the resort, but crossed deep into a fenced-off military area.

The woman, identified as Park Wang-ja, ran away when a North Korean soldier told her to halt after spotting her about a half-mile inside the fence. Park fled as the soldier chased her and fired one warning shot, before she was shot dead around 5 a.m., the North said.

Park was shot twice from behind, said Cho Yong-seok, an official at the hospital in the South Korean city of Sokcho where her body was taken. One bullet hit her in the chest, causing her death, and another shot struck her left hip, he said.

The North informed Hyundai Asan about the shooting around 11:30 a.m., more than six hours after the incident. There has not yet been any communication from the North Korean government to Seoul officials about the death.

The resort on the peninsula’s eastern coast, which opened in 1998, is one of the most high-profile projects between the two Koreas.

Hyundai Asan operates the Diamond Mountain resort as a tourist enclave inside the communist North, complete with South Korean convenience stores and a duty-free shop selling luxury goods. The area is one of two North Korean tourist programs run by the company, which are the only sites inside the reclusive nation that are open to relatively free access by visitors.

There were no plans to suspend a separate tour program offering day trips to the North’s border city of Kaesong because of the shooting.

About 1.9 million visitors, mostly South Koreans, have visited the site, including some 190,000 people this year, according to the Unification Ministry.

In March, the North opened the resort to tourists driving in private cars across the heavily armed border dividing the Koreas.

Tourists at the resort are usually only allowed to wander freely in specified areas and are under strict control, with green fences separating the zone from the rest of the country. For hiking trips on the mountain, tour groups are taken by bus to trails lined by North Korean monitors.

The resort is in a heavily militarized area near the tense border between the Koreas, the world’s last Cold War frontier. On the road to the resort, mobile rocket launchers dot the hillsides and the coast has been home to a major North Korean naval base.

The two Koreas remain technically at war since their 1950-53 conflict ended in a cease-fire. However, they have made strides in reconciliation since the first-ever summit in 2000 between leaders of the North and South.

Relations have chilled since South Korea’s new President Lee took office with a tougher policy on the North.

However, Lee proposed Friday a resumption of dialogue between the Koreas and said he would respect earlier agreements from North-South summits, a softening of his earlier stance.

“Full dialogue between the two Koreas must resume,” Lee said told the opening session of parliament. “The South Korean government is willing to engage in serious consultations on how to implement” the summit deals and other previous agreements between the two sides, he said.

Lee also said he is “ready to cooperate in efforts to help relieve the food shortage in the North as well as alleviate the pain of the North Korean people.”

Lee was briefed on the tourist’s death right before he departed for the National Assembly speech, his office said, but did not mention it in his comments.

International agencies have warned that North Korea is facing its worst food shortages in years due to severe floods last year. The shortages were aggravated by the lack of assistance from South Korea amid stalled relations. Lee’s predecessors regularly sent food across the heavily armed border.

The South Korean president also urged the North to resolve humanitarian issues such as resuming reunions of families separated between the Koreas, and also allowing hundreds of South Korean POWs and civilians believed to be held in the North to return home.

Meanwhile on Friday, talks on North Korea’s nuclear disarmament pushed into a second day, with negotiators discussing the North’s complaint that it has not received most of the energy assistance it was promised in exchange for disabling its weapons program.

Delegates from the six countries also reached a consensus on establishing a verification and monitoring mechanism for Pyongyang’s nuclear facilities, a South Korean government official said Friday. The official asked not to be named because the talks were still under way.

The overall goal of the six-nation talks is to hash out details of what could be a monthslong effort to verify the communist state’s declaration of its nuclear materials, U.S. Assistant Secretary of State Christopher Hill told reporters after the first day of talks Thursday.

Oil jumped more than 3 percent to a record high above $146 a barrel on Friday, boosted by concern of threats to supplies from major oil exporters Iran and Nigeria.

U.S. crude hit $146 a barrel for the first time and later rose as high as $146.90.

Russia has accused the British Embassy’s top trade official in Moscow of espionage, the British Foreign Office confirmed Friday.

The accusation appears likely to worsen Russian-British relations, already strained in part by the continuing fight for control at the TNK-BP oil company, which is jointly owned by the British company and Russian billionaires.

The Interfax news agency, citing a source in Russia’s secret services, reported Thursday that the head of the embassy’s trade and investment section, Christopher Bowers, was believed to be a senior British intelligence officer.

The British Foreign Office said the accused diplomat was acting head of U.K. Trade and Investment at the embassy and confirmed his name was Chris Bowers.

The former top trade official, Andrew Levi, was one of four British Embassy officials expelled from Moscow last summer.

The expulsions were retaliation for Britain’s expulsion of four Russian diplomats after Russia refused to hand over the main suspect in the 2006 poisoning death of Kremlin critic and former Federal Security Service officer Alexander Litvinenko in London.

The new espionage accusation followed a report Monday by the BBC suggesting Russian government involvement in the killing of Litvinenko.

The Federal Security Service and Foreign Ministry both refused to comment Friday.

A U.S. military airstrike this week killed 47 civilians traveling to a wedding, the head of an Afghan government commission investigating the incident said Friday.

The airstrike on Sunday in Deh Bala district of Nuristan province also wounded nine civilians, said Burhanullah Shinwari, the deputy chairman of the Senate, who led the delegation.

The U.S. military on Sunday denied that any civilians were killed in the incident. At the time Afghan officials said 27 civilians had been killed.

On Friday, U.S. coalition spokesman 1st Lt. Nathan Perry said that “any loss of innocent life is tragic.”

“I assure you that civilians are never targeted, and that our forces go to great lengths to avoid civilian casualties,” he said. “This incident regarding the air strike on July 6th is still under investigation by coalition forces.”

Shinwari said that 39 of those killed in the airstrike were women and children, including the bride.

The group was targeted twice on Sunday, as they walked along with the bride from her village toward the groom’s house in another village, Shinwari said.

The nine-man commission was dispatched by President Hamid Karzai to investigate the incident on Tuesday. They returned to Kabul on Thursday. The commission included officials from the Ministry of Defense, the country’s intelligence agency and parliament.

Shinwari said the group gathered information from eyewitnesses and victim’s relatives.

All those killed in Deh Bala incident were buried in one cemetery near the village where the attack happened, Shinwari said.

“They were all civilians, with no links to al-Qaida or the Taliban,” Shinwari said.

The members of the commission gave $2,000 for every person killed and $1,000 for those wounded, he said.

The issue of civilian casualties has caused friction between the Afghan government and U.S. and NATO troops, and has weakened the standing of the Western-backed Karzai in the eyes of the population.

More than 2,100 people — mostly militants — have been killed in insurgency-related violence in Afghanistan this year. More than 8,000 people died in attacks last year, according to the U.N., the most since the 2001 U.S.-led invasion.

China urged the Dalai Lama again on Monday to show support for the Beijing Olympics, in an apparent effort to link the demand more closely with continued talks.

The statement from a Chinese spokesman to the official Xinhua News Agency included other previously issued conditions for talks: that the spiritual leader renounce support for Tibetan independence and that he curb the “violent terrorist” activities of the Tibetan Youth Congress and other “criminal” groups.

Though the basic demands are old, Chinese media have recently been portraying them as a new, concessionary approach. Xinhua’s report, which appeared aimed at stating China’s position more clearly and publicly, also gave the list of demands a new label, calling them the “four not-supports.”

Du Qinglin, head of the United Front Work Department, the department in charge of the talks, told the envoys that the Dalai Lama must “openly and explicitly promise with action not to support activities that disrupt the Beijing Olympics,” Xinhua quoted an unnamed spokesman for Du as saying.

The spokesman also said the leader must not support the Tibetan Youth Congress — an exile group that disagrees with the Dalai Lama’s stance and supports Tibetan independence.

The Dalai Lama has said he supports the Beijing Olympics, but China has accused him of being insincere.

The leader has also repeatedly denied that he seeks Tibetan independence and said he is committed to nonviolence.

“If the Dalai’s side fails to accept and manage such a simple and commonsensical ‘four not-supports,’ then the necessary atmosphere and conditions could hardly be met for further contact,” the spokesman said, according to Xinhua.

The remarks come after meetings last week in Beijing between Chinese officials and two envoys sent by the Dalai Lama from his exile base in India. During the visit, Tibetan envoys Lodi Gyari and Kelsang Gyaltsen took a tour of Olympic venues and met with Du.

A statement issued Saturday from the Tibetan side said another round of talks would take place in October, but said it wished the Chinese leadership had taken “more tangible” steps during the talks. The Chinese side failed to agree to a proposal to issue a joint statement committing the two sides to talks, it said.

It was the second round of such talks, started after deadly anti-government rioting broke out in the Tibetan capital of Lhasa in March. Beijing has accused the 1989 Nobel Peace Prize laureate and his supporters of fomenting anti-government riots and protests.

Some experts believe Beijing agreed to the talks to ease international criticism that it was too heavy-handed in its response to the March violence.

China says 22 people died in the Tibetan capital of Lhasa, while foreign Tibet supporters say many times that number were killed during the demonstrations and a subsequent government crackdown.

China has governed Tibet since communist troops marched into the Himalayan region in the 1950s. he Dalai Lama, who fled to India amid a failed uprising in 1959, has said he wants some form of autonomy that would allow Tibetans to freely practice their culture, language and religion.

When hackers infiltrated Citibank ATMs at 7-Eleven stores, they revived the fear of everyone looking to get out a few bucks for a Slurpee - is using this machine safe?
Experts say the answer is that an ATM’s safety depends on where it is. If it’s at a bank, an ATM is somewhat safer than it is in a public place, such as a ballpark, a train station or a convenience store.

“You should never use ATM machines at convenience stores if you can help it because those are much more susceptible to tampering,” added Avivah Litan, a security analyst with the Gartner research firm.

While consumers can’t do much when hackers break into back-end computers that approve cash withdrawals in order to steal PIN codes - such as happened during last year’s Citi ATM breach - the odds are slim that it will happen to you.

“It is possible to install malicious software on a banking server to capture an encrypted pin as it passes through, but it is extremely rare,” according to Margot Mohsberg, a spokeswoman for the American Bankers Association.

There are other methods of getting scammed at the ATM, however, that are both popular and preventable.

Most often, thieves use a method called skimming, which means they insert a device into the card slot on an ATM that steals your data right off your card’s magnetic strip.

When it comes to skimming, non-bank ATMs are far more susceptible, putting you at greater risk. There’s less of a chance of skimming at your bank’s local branch, because the bank is videotaping and maintaining that ATM, than at the ones in a convenience store that are maintained by a third party, said Ellen Cannon, managing editor at bankrate.com.

“There are thefts constantly,” said Cannon.

To further decrease your odds of getting victimized, Cannon also suggests changing your PIN number regularly and using different PINs for different accounts.

Also, when shopping, opt for credit over debit. Chances are your credit card has 100% fraud liability, whereas your debit card may not.

“Basically, avoid using your PIN as much as possible,” Litan recommends. Despite industry standards that call for protecting PINs with strong encryption, that doesn’t always happen, so to stay on the safe side, keep transactions that require you to enter your PIN to a minimum.

And when it comes to online activity, never use your PIN under any circumstances. “There’s no online use of PINs,” Litan said, and any prompt to do so is just a scam.

Ultimately, the best thing you can do is check your account frequently and report any suspicious activity immediately.

Beyond that, there’s really not much else consumers can do, according to Thomas Fox, community outreach director of Cambridge Credit Corp., a nonprofit credit counseling agency based in Agawam, Mass. “It falls to the bank to employ new ways to deter hackers.”

But if you are a victim of theft, keep in mind that while it is a hassle, it is not necessarily a hardship.

“The bottom line is that consumers are not responsible for any fraudulent activity on their account,” Mohsberg said.

The price for a barrel of oil shed more $2 Monday with the dollar gaining strength, but traders watched for a further weakening of the greenback and renewed Mideast tensions.
Iranian state media reported Friday that EU foreign policy chief Javier Solana and Iran’s top nuclear negotiator have agreed to the latest in a series of talks during the second half of July over Iran’s nuclear program and the enrichment of uranium.

“The Iranian situation turned confrontational last week which raised valid concerns in the oil market (over a possible attack). Now that seems less likely and this is a positive development,” said John Vautrain, an analyst with Purvin & Gertz in Singapore.

Still, diplomats familiar with the negotiations there was little new on the table. And a European official told the AP that Solana had not committed himself to any meeting until Tehran’s offer was thoroughly examined by the six nations seeking to engage the Islamic republic.

Light, sweet crude for August delivery fell to $143.10 a barrel in electronic trade on the New York Mercantile Exchange by noon in Europe — $2.19 lower than Thursday’s floor close. After numerous record highs in volatile trading, however, traders analyst were doubtful that any bubble had burst Monday.

“As we look ahead to this week the bulls have their cross hairs set on $150,” wrote analyst and trader Stephen Schork, in his Schork report. “At this point, that critical point of reference looks like a done deal, but time will tell.”

The contract hit a trading record of $145.85 on Thursday in New York before settling at a record close of $145.29 a barrel. There was no floor trade Friday in the U.S. because of the July Fourth holiday.

The bulls were also encouraged by comments from the head of the Organization of Petroleum Exporting Countries over the weekend, said Vautrain.

OPEC President Chakib Khelil said that surging oil prices aren’t likely to fall amid strong demand, especially from China and India.

Khelil also told an energy conference in Algiers on Sunday that the steady increases of late were unrelated to supply and demand. He blamed the weak U.S. dollar, oil’s primary currency of exchange.

Khelil said he believes the reason the dollar has fallen against other currencies is the U.S. decision to lower interest rates as it tries to revive a flagging economy.

A falling dollar has helped boost oil prices around 50 percent this year. Investors buy commodities such as oil as a hedge against inflation when the greenback weakens. Also, a struggling dollar makes oil less expensive to investors overseas.

Reversing the trend, at least temporarily, the euro fell against the dollar Monday as markets continued to mull less-than-hawkish comments from the European Central Bank on its future interest rate course, and industrial production numbers are expected in Britain and Germany.

The 15-nation euro bought $1.5662 in European morning trading, down from $1.5699 in New York late Thursday.

In other Nymex trade, heating oil futures fell by more than 12 cents to $3.9340 a gallon while gasoline prices dropped by over 5 cents to $3.5175 a gallon. Natural gas futures lost more than 24 cents to fetch $13.336 per 1,000 cubic feet.

August Brent crude fell $1.11 to $143.31 a barrel on the ICE Futures exchange in London.

Associated Press Writer Eileen Ng contributed to this report from Kuala Lumpur, Malaysia.

Aid for Africa — and whether enough was coming from the world’s major economic powers — was in the spotlight Monday as the Group of Eight nations met with seven African leaders at its annual summit.

Activists have accused some G-8 countries, particularly France, Canada and Italy, of skimping on aid to Africa, and urged them to ramp up their contributions. The U.S., Japan, Britain, Germany and Russia make up the other members of the G-8.

German Chancellor Angela Merkel also has urged G-8 leaders to take a tough stance on Zimbabwe in the wake of President Robert Mugabe’s widely denounced election win. Mugabe was the only candidate in the presidential runoff after his opponent dropped out amid reports of state-sponsored violence.

President Bush, arriving Sunday for his eighth and final Group of Eight summit, emphasized the urgency of providing aid for Africa, calling on wealthy nations to provide mosquito nets and other aid to prevent children from “needlessly dying from mosquito bites.”

“Now is the time for the comfortable nations to step up and do something about it,” Bush said.

African aid was the centerpiece of the G-8 summit three years ago in Gleneagles, Scotland, where leaders pledged to increase foreign aid by $50 billion a year by 2010 — with half of that going directly to Africa — and to cancel the debt of the most heavily indebted poor nations.

Collectively, the G-8 has delivered just $3 billion of the $25 billion in additional aid pledged to Africa in 2005, according to DATA, which stands for Debt, AIDS and Trade in Africa, a group founded by U2 singer Bono and music producer Bob Geldof, both of whom are active in campaigns for Africa.

Germany, the U.S. and Britain were following through on commitments, while progress from Japan, France, Italy and Canada was either unclear or weak, DATA said.

The Organization for Economic Cooperation and Development reported in April that foreign aid by major donor countries slumped in 2007 as debt-relief plans tapered off and amid a global economic downturn in Japan and some other rich nations.

Japan said there has been no backtracking on the commitments made to Africa.

“I don’t understand the criticism,” said Japanese Foreign Ministry spokesman Kazuo Kodama. “The G-8 leaders are very aware of the commitments they have made to African leaders.”

Soaring food prices was another key topic on the agenda at the summit, with some experts predicting that the leaders would announce a food aid package and possibly funds to invest in agricultural development in poorer nations.

European Commission President Jose Manuel Barroso proposed Monday spending $1.6 billion that had been set aside for European farm subsidies to support agriculture in the developing world over the next two years.

Talks were expected to shift Tuesday and Wednesday to climate change as leaders will try to move forward U.N.-led talks aimed at forging a new global warming accord by the end of 2009. The negotiations have stalled because of deep disagreements over what targets to set for greenhouse gas reductions, and how much developing countries such as China and India should be required to participate.

The rift over climate change widened as the head of the European Commission urged leaders of the world’s wealthy nations to act first in setting targets for reducing greenhouse gases — putting President Bush in an increasingly lonely position.

European Commission President Jose Manuel Barroso said the G-8 nations must reach agreement among themselves on climate change measures and avoid taking the approach that “I will do nothing unless you do it first,” which he called a “vicious circle.”

“If we agree, then we are in a much better position to discuss with our Chinese and Indian partners and others,” Barroso said.

The U.N. and World Bank chiefs said top industrialized nations need to push forward global talks on climate change and demonstrate their commitment to help poorer nations grapple with rising food prices.

U.N. Secretary-General Ban Ki-moon and World Bank President Robert Zoellick said rich nations need to strengthen their efforts to meet poverty reduction, education and other development goals because of instability in the world economy.

China and India say it is up to the developed world — the biggest polluters — to take the lead in the fight against climate change. Bush says no, developing nations must also sign on to make any global deal work.

It was unclear whether nations would be able to agree to a goal of cutting their emissions by 50 percent by 2050. The Bush administration has not shown any enthusiasm for such a commitment without cooperation from the Chinese and Indians.

A more ambitious goal of setting nearer-term targets for 2020 was considered well beyond reach.

Going into a G-8 summit — after a separate summit Tuesday with India, Brazil, South Africa and Mexico — China has said it is ready to discuss setting medium- and long-term goals for reducing emissions of polluting gases and is open to negotiating targets.

But Beijing has not changed its view that the main responsibility still lies with developed countries. India has vowed to keep its emissions below those of developed countries, but is also looking for them to set the pace.

Associated Press writers Joseph Coleman and Eric Talmadge contributed to this report.

President Bush and new Russian President Dmitry Medvedev stood united Monday on issues like Iran and North Korea. But for all their handshakes and smiles, it is clear that thorny issues like missile defense are in a holding pattern until a new U.S. president takes office.

In their first sit down as heads of state, Bush called Medvedev a “smart” guy who is well versed in foreign policy. Medvedev casually referred to Bush as “George.” Yet they inched no closer on the missile defense issue during their more than hour-long discussion on the sidelines of a summit here.

A Kremlin aide described the private meeting as open and constructive, but said it led to no progress on the missile-defense issue.

The public comments by the two presidents only glossed over Russia’s anger about the topic. And they both brushed off the fact that their official relationship will expire in fewer than 200 days when the Bush presidency ends.

“We will build on the relationship with the new American administration,” said Medvedev. “But we still have six months with the effective administration and we’ll try to intensify our dialogue with this administration.”

The Russian leader said he and Bush agreed on curtailing the nuclear weapon capability of Iran and North Korea.

“But then certainly there are others with respect to European affairs and missile defense where we have differences,” Medvedev said. “We would like to agree on these matters, as well, and we also feel very comfortable in our dealings with George.”

Like former Russian President Vladimir Putin, still the top powerbroker in Moscow, Medvedev remains critical of the West, in particular the United States. He has shown no sign of softening opposition to U.S. plans for missile defense facilities in Europe or to NATO’s promise to eventually invite Georgia and Ukraine in.

Personal relations between the two appear warm, but Bush didn’t go as far as to repeat what he said about Putin when he first met him in June 2001. Then, Bush said he looked into Putin’s eyes and “was able to get a sense of his soul.”

“I’m not going to sit here and psychoanalyze the man, but I will tell you that he’s very comfortable, he’s confident, and that I believe that when he tells me something, he means it,” Bush said.

The two, however, are at opposite ends of their political lives. Bush is on his way out and Medvedev just took office in May. This is Bush’s eighth and final G-8. This is Medvedev’s freshman year at the summit.

The two leaders, who also are also are united in their fight against international terrorism and want to see a Middle East peace accord and a future for Afghanistan, talked on the sidelines of the Group of Eight summit of industrialized nations. Japan is hosting the event at a heavily guarded luxury resort atop Poromoi Mountain in Hokkaido, an island in northern Japan.

From there, visitors normally can see the doughnut-shaped Lake Toya, formed in a crater of a collapsed volcano. Not Monday. Sheets of rain pelted the scenic mountain and the weather offered a metaphor for the contentious U.S.-Russia discussions on missile defense: Fogged in.

U.S. and Polish officials are negotiating to base American missiles in Poland for a future missile shield against Iran. Still, there is no guarantee the shield will ever be built or would work as advertised. Negotiations over the 10 missile interceptors are proving more contentious than the U.S. had anticipated.

The site would be linked to a missile-tracking radar that Washington wants to place in the Czech Republic. The Czech government has agreed in principle to the plan, but parliament’s approval is still needed.

Russia is staunchly against the U.S. plans, arguing that U.S. military installations in former Soviet satellites so close to its borders would pose a threat Russian security. Moscow has threatened to aim its own missiles at any eventual base in Poland or the Czech Republic.

The U.S. maintains that the plan poses no threat to the Kremlin’s vast nuclear arsenal.

After the talks, a Kremlin aide accentuated the positive in U.S.-Russian relations, but said Bush and Medvedev made no progress on the missile-defense issue — the major point of disagreement between them.

Sergei Prikhodko said the talks were “exclusively well-intentioned, constructive, and open, but at times critical.”

Bush and Medvedev met on the opening day of the summit, a day focused on aid to Africa and on whether the world’s economic powers were providing enough financial assistance to fight disease and improve health care.

Bush is calling on G-8 nations to write checks to make good on their pledges to help battle HIV-AIDS, malaria and other diseases. He and other G-8 heads met with leaders of seven African nations to discuss aid to the continent, but the election crisis in Zimbabwe also was high on their agenda.

Bush backs U.N. sanctions against Zimbabwe, whose president, Robert Mugabe, is accused of using violence and intimidation to win a runoff election last month. “I am extremely disappointed in the elections, which I labeled a sham,” Bush said alongside Tanzanian President Jakaya Kikwete.

Many African nations, though, are reluctant to pursue sanctions. Kikwete, the current head of the African Union, said that African leaders share U.S. concerns about Zimbabwe. But he told the U.S. president, “the only area that we may differ is on the way forward.”

Meanwhile, a consensus still appeared elusive on a statement on climate change, said Jim Connaughton, chairman of the White House Council on Environmental Quality. The Group of Eight takes up the divisive issue on Tuesday.

At issue is an agreement from last year’s G-8 summit in Germany to seriously consider a goal of halving emissions by 2050.

But coming up with a more detailed target for cutting emissions is proving difficult. The Bush administration is unwilling to consider such a target unless developing economies that are also big polluters, like China and India, are included.

“The president has made clear that we believe a long-term goal is useful and necessary,” Connaughton said Monday. “The president has also made clear that it’s a goal that must be shared by all countries.”

Perhaps Manny Ramirez, Jonathan Papelbon and several Boston teammates should have stored their gear at Yankee Stadium this weekend.

They’re coming back real soon.

The World Series champion Red Sox will bring seven players to the home of their biggest rival for the All-Star game on July 15. The Chicago Cubs also wound up with seven when rosters were announced Sunday, perhaps further evidence this really is a charmed season for them.

“They love me everywhere, what can I tell you?” Ramirez said. “That’s why I’m here. I guess I’m not stealing money.”

Said New York Yankees slugger Alex Rodriguez: “It’s going to be weird having them in our locker room.”

Rodriguez led all players in fan voting for starting spots, as he did last year. The Tampa Bay Rays, the team with the best record in the majors, did not have a single player elected to start—pitcher Scott Kazmir and catcher Dioner Navarro made the AL squad.

“Picking the All-Star team, it’s normally based on individual performance,” Rays manager Joe Maddon said. “You can look at our group, individually we don’t necessarily stand out, and that’s OK. As a team, we totally stand out. I would much prefer that formula as opposed to the individual formula.”

“We’re definitely having to turn the corner in a lot of regards. Part of that is recognition. It’s nobody’s fault but our own that’s it’s finally occurring now.”

The Yankees will be well represented in their ballpark’s final year. Rodriguez will be joined by Yankees captain Derek Jeter and closer Mariano Rivera.

“It’s more than just an All-Star game, it’s like a celebration of Yankee Stadium,” Jeter said.

There was only one change in the last week of fan voting for starters— Milwaukee outfielder Ryan Braun overtook Ken Griffey Jr. in the NL outfield. Griffey finished fourth and was left off the team.

The 1958 Yankees hold the record with nine players in an All-Star game. The Cubs and Red Sox came close this time.

“To be able to represent the Red Sox with that number of Red Sox will be very exciting,” AL manager Terry Francona of Boston said. “I’m very proud of that.”

Outfielders Kosuke Fukudome and Alfonso Soriano and rookie catcher Geovany Soto were chosen to start for the Cubs, who own the best record in the league. Soriano has been out with a broken left hand, but may return in time to play.

Cubs pitchers Kerry Wood and Ryan Dempster and third baseman Aramis Ramirez were chosen by NL players, and pitcher Carlos Zambrano was picked by NL manager Clint Hurdle of Colorado.

“It’s flattering,” Cubs manager Lou Piniella said. “We’ve played well the first half and these guys that are going are, in a way, largely responsible. We have a few others but these guys have all done their jobs and done them well, and they’re being rewarded.”

The Cubs, trying to win their first World Series in 100 years, put six players into the All-Star game in 1988 and 1936.

Boston’s David Ortiz, Dustin Pedroia, Kevin Youkilis and Ramirez were elected by fans. Ortiz is on the disabled list with an injured wrist but will attend; Francona said Texas’ Milton Bradley would become the designated hitter.

In this June 30, 2008 file pho…

AP - Jul 6, 3:04 pm EDT
Red Sox outfielder J.D. Drew, catcher Jason Varitek and Papelbon, their closer, were picked by a vote of AL players. Varitek, batting .218 with seven home runs and 27 RBIs, appreciated the support.

“I mean I can’t be the judge. I’m flattered my peers think of me that way,” he said before Boston’s 5-4 loss in 10 innings to the Yankees on Sunday night.

The AL starters: Youkilis at first base, Pedroia at second base, Jeter at shortstop, Rodriguez at third base, outfielders Josh Hamilton of Texas, Ichiro Suzuki of Seattle and Ramirez, and Minnesota catcher Joe Mauer.

Starting for the NL: Houston first baseman Lance Berkman, Philadelphia second baseman Chase Utley, Florida shortstop Hanley Ramirez and Atlanta third baseman Chipper Jones, with Soriano, Fukudome and Braun in the outfield. Soto will become the first rookie catcher to start for the NL.

Utley, who leads the major leagues in home runs, was the NL’s top vote-getter.

Hamilton, whose 84 RBIs are most in the majors, was among 14 first-time AL stars. Cincinnati pitcher Edinson Volquez, traded for Hamilton in the offseason, is among the NL’s 11 newcomers.

“If it weren’t for the fans coming out and watching us, supporting us, we wouldn’t be doing this for a living,” Hamilton said.

An Internet vote this week will determine the 32nd player on both rosters.

The AL candidates: outfielders Jermaine Dye and Jose Guillen, first baseman Jason Giambi, second baseman Brian Roberts and third baseman Evan Longoria. The NL candidates: outfielders Pat Burrell, Corey Hart, Carlos Lee and Aaron Rowand and third baseman David Wright.

Cubs first baseman Derrek Lee, Colorado third baseman Garrett Atkins, Detroit outfielder Magglio Ordonez and Boston third baseman Mike Lowell were among the top players left out.

Boston’s Daisuke Matsuzaka (9-1, 3.12 ERA), the Yankees’ Mike Mussina (11-6, 3.64) and St. Louis’ Kyle Lohse (10-2, 3.61) also were left off.

Once again, the league that wins the All-Star game will get home-field advantage in the World Series.

The AL has not lost an All-Star game since 1996 at Veterans Stadium. Since then, the AL has won 10 and tied one. Overall, the NL leads 40-36-2.

Yahoo Inc. began pressing a case to major shareholders Monday that its board and management deserve a chance to prove they made the right move when they rejected a $47.5 billion takeover offer from Microsoft Corp.

The missed opportunity to sell to Microsoft infuriated many Yahoo shareholders, prompting activist investor Carl Icahn to agitate for replacing Yahoo’s nine directors and reviving negotiations with Microsoft. If he gains control of the board, Icahn intends to fire Yahoo co-founder Jerry Yang as chief executive.

In response, Yahoo has assembled a 32-page presentation for shareholders to elaborate on the points it has been emphasizing since Microsoft withdrew its bid May 3.

Investors will decide the dustup in a vote scheduled Aug. 1 at Yahoo’s annual meeting. That leaves another month for the Sunnyvale, Calif.-based company and Icahn to disparage each other.

And with Yahoo shares sliding back toward $19.18 — their value before Microsoft’s bid — Yahoo’s management is facing even more pressure to end the financial malaise that triggered the takeover bid in the first place. Yahoo shares fell 67 cents Monday to close at $20.66.

Icahn didn’t respond to a request for comment Monday, but he wrote on his blog last week that he would share his latest opinions on Yahoo “shortly.”

Yahoo argues that entrusting the company’s fate to Icahn would be foolhardy because his strategy centers on resurrecting a dead deal.

Its breaking point came after Yang and Microsoft CEO Steve Ballmer couldn’t agree on a price. Ballmer had orally offered $33 per share, but Yang wanted $37 per share — a price that Yahoo’s stock hasn’t reached in nearly 2 1/2 years.

Since Microsoft walked away, Yahoo said it tried to reopen sales negotiations in meetings on May 17 and June 8, only to be told “unequivocally” that the software maker no longer is interested in buying Yahoo in its entirety.

Hoping to dispel any perception that it mishandled the Microsoft negotiations, Yahoo’s shareholder presentation lists the dates of at least eight meetings that its management or other representatives held with Microsoft before the bid was withdrawn.

Yahoo also wants to raise doubts about the sincerity of Microsoft’s bid, arguing that its unsolicited suitor was “unresponsive and inconsistent” during the first three months of negotiations.

“The record casts doubt on whether Microsoft was ever committed to a whole company acquisition,” Yahoo asserted in the shareholder presentation.

But Ballmer appeared to leave little doubt he prized Yahoo’s whole franchise when he submitted his initial bid of $44.6 billion, or $31 per share. The Jan. 31 offer was 62 percent above Yahoo’s stock price at the time. Microsoft made its oral offer of $47.5 billion May 2.

“This is simply revisionist history,” Microsoft spokesman Frank Shaw said Monday about Yahoo’s account of events.

Yang may have a prime opportunity to share his side of the story next week when he is scheduled to be at the same exclusive media investment conference as Gordon Crawford and Bill Miller, the money managers for Yahoo’s two biggest shareholders.

Both Crawford, of Capital Research Global Investors, and Miller, of Legg Mason Capital Management, have publicly criticized Yahoo’s handling of the Microsoft negotiations.

Microsoft Chairman Bill Gates and Yahoo President Susan Decker also are on the guest list for the media conference, which is hosted annually in Sun Valley, Idaho, by investment bankers Allen & Co. and is renowned for hatching big business deals.

To move on from the Microsoft bid, Yahoo hopes for a major boost from a planned advertising partnership with Internet search leader Google Inc.

By relying on Google’s superior technology to show some of the ads alongside its search results, Yahoo believes it can increase its annual revenue by about $800 million and generate another $250 million to $450 million in annual cash flow.

Although the Google partnership still could be blocked by antitrust regulators, Yahoo believes it offers more value than an alternative deal proposed by Microsoft. The software maker offered $9 billion for Yahoo’s online search operations and a roughly 16 percent in stake in the rest of Yahoo’s business.

In its shareholder presentation, Yahoo argues Microsoft’s partial offer is a “bad choice” because it wouldn’t be as lucrative or as flexible as the Google partnership.

Wall Street ended an arduous first half quietly Monday, closing mixed as investors again based their trades on what has become the dominant force in the market: the price of oil. The major indexes closed out the first six months of 2008 with double digit declines, and are perilously close to the levels of a bear market.

Stocks pulled back in the early going as oil reached yet another record, this time, above $143 a barrel. The market then gathered some strength as crude lost momentum and allowed some investors to consider buying equities that have been turned into bargains by months of volatility.

There is little expectation on the Street that the chaos of the first half will soon end. Besides the punishing effect of higher oil, which threatens the stifle consumer spending and in turn, an economy still struggling to grow, the stock market is still contending with warnings of losses at financial companies — the continuing fallout of the housing slump and the credit crisis that began nearly a year ago.

These problems that show little sign of being resolved soon left Wall Street in tatters as the first half ended. The Dow Jones industrials are down nearly 20 percent from their record high of 14,198.09, set in October, putting the blue chips on the threshold of a bear market. The market did have a spring recovery, which began in March, but it foundered in May as the combination of credit problems and higher oil rattled investors.

Financial stocks, which were leading the market higher before the credit crisis struck, ended the half with even steeper losses than anyone expected — just a few months ago, there were predictions that the credit crisis would soon end. Airline stocks have been devastated by the rising price of oil. Detroit automotive stocks, as ever battling competition from overseas makers, are also being pummeled by the sagging economy and higher energy prices.

Investors wondering how the markets will fare will likely devote unusual scrutiny to parsing reports on the economy and corporate earnings, which will arrive in force in the coming weeks. And right now, there appears to be little optimism.

“We’ve seen year-over-year estimates decline,” said Christopher Johnson, president of Johnson Research Group in Cincinnati. “It’ll be a critical season.”

Investors made relatively small bets ahead of the coming earnings and as the quarter moved toward a close. According to preliminary calculations, the Dow rose 3.50, or 0.03 percent, to 11,350.01.

Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 1.62, or 0.13 percent, to 1,280.00, and the technology-laden Nasdaq composite index fell 22.65, or 1.21 percent, to 2,292.98.

The day’s modest moves stood in contrast to the heavy losses the market has suffered:

–In just the month of June, the Dow dropped 10.19 percent; the S&P fell 8.60 percent, and the Nasdaq lost 9.10 percent.

–For the quarter, the Dow fell 7.44 percent; the S&P lost 3.23 percent, while the Nasdaq had an anemic 0.61 percent gain.

–For the first half, the Dow is down 14.44 percent; the S&P lost 12.83 percent; and the Nasdaq has fallen 13.55 percent.

–Since their high point last October, the Dow gave up 19.87 percent; the S&P dropped 18.22 percent; and the Nasdaq is down 19.80 percent. A 20 percent drop from a market peak is considered the start of a bear market — although many analysts say Wall Street already has a bear market mentality.

Light, sweet crude, which began the year at $96 a barrel, fell 21 cents Monday to settle at $140.00 on the New York Mercantile Exchange while retail gasoline set a new national average of $4.086 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which tends to move opposite its price, rose to 3.98 percent from 3.97 percent late Friday.

The dollar was mixed against other major currencies, while gold prices fell.

Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc., contends that the market must first see nervous investors pull more money from the stock market before Wall Street will begin to show meaningful signs of stabilizing. He said the coming earnings reports for the second quarter could indicate that while some parts of the economy, like the financial sector, are struggling, others might show decent earnings.

“With the Dow nearing bear market territory it’s going to keep investors on edge,” he said. He’s looking at economic data due this week on manufacturing and employment as possibly offering some reassurance to investors.

“I think the economic data is going to indicate an economy that is not slipping into a full-blown recession but one that is just limping along,” Cardillo said.

Monday’s economic news confirmed that the country is still struggling. The Chicago Purchasing Managers’ report on manufacturing, which tracks business conditions across Illinois, Michigan and Indiana, rose to 49.6 for June from 49.1 in May. However, a reading below 50 signals economic contraction.

Other important readings are due this week. The Labor Department is expected to release a June employment report Thursday that is expected to show the sixth straight month of jobs losses and only a modest improvement in the unemployment rate. The Institute for Supply Management is expected to release its June readings on the manufacturing and service sector, and the Commerce Department will report on construction spending in May.

Johnson said the S&P is flirting with new lows for the year but that investors don’t seem as fearful as they did when the market fell sharply in March. He said that indicates that the market likely has more room to fall before stocks can begin to sustain sizable upward moves.

The Chicago Board Options Exchange’s volatility index, known as the VIX, and often referred to as the “fear index,” has risen in recent weeks but stands only at about 24, well below the high of nearly 38 it logged earlier this year.

Johnson said Wall Street was finally seeing the pullback that many had expected earlier this year when investors grew nervous about massive write-downs at financial companies.

“Most people did not expect the stock market to rally as well as it did from March to May,” he said. “Everybody thought that the market rally in March would be a little bit of a fake-out.”

But investors fears about the financial sector remain, even if they are not as pronounced as at the start of the quarter. Financial stocks led broader indexes lower during the second quarter, and have been especially troubled since the near collapse of Bear Stearns in March. The investment bank was spared after the Federal Reserve orchestrated its sale to JPMorgan Chase & Co., but that did little to assuage fears about the industry.

Since last summer, banks and brokerages have written down more than $300 billion of mortgage-backed securities and other risky investments. And later this month even more losses are expected when companies like Citigroup Inc. and Merrill Lynch & Co. report second-quarter results.

Investors have turned away from the sector, waiting to see when the hemorrhaging might stop. The KBW Bank index, which tracks 24 financial institutions, is down 32 percent this year alone as most of its components trade near 52-week lows.

Declining issues outpaced advancers by about 8 to 7 on the New York Stock Exchange, where volume came to 1.61 billion shares.

The Russell 2000 index of smaller companies fell 8.48, or 1.21 percent, to 689.66.

Overseas, Japan’s Nikkei stock average fell 0.46 percent. Britain’s FTSE 100 rose 1.74 percent, Germany’s DAX index fell 0.06 percent, and France’s CAC-40 rose 0.85 percent.

AP Business Writer Joe Bel Bruno in New York contributed to this story.

An explosion wrecked a militant compound Monday, killing as many as eight people while Pakistani paramilitary forces pushed deeper into a border region where extremists threaten the city of Peshawar and a key supply line for U.S. troops in Afghanistan.

Pro-Taliban Militants targeted by the offensive in the Khyber tribal area claimed a missile was fired from nearby Afghanistan, but a Pentagon official said he knew of no cross-border attack and a Pakistani officer said stored explosives blew up.

The nighttime blast, which buried bodies in piles of shattered masonry and mud bricks, came at the start of the third day of an offensive by Pakistan’s paramilitary Frontier Corps.

Troops faced no resistance Monday and were able to occupy key hilltops and re-establish checkpoints that had been abandoned by tribal police, said a senior Frontier Corps officer, who spoke on condition of anonymity because he was not authorized to comment to journalists.

He said troops in the Bara area, which starts on the outskirts of Peshawar, advanced in the direction of the remote Teerah valley. But it remained unclear if the Frontier Corps planned to push into the valley, where militants are thought to have fled.

So far, the Frontier Corps reported destroying several militant posts, including a radio station and alleged torture cells, but claimed to have killed just one insurgent.

The Interior Ministry said the operation was launched to protect Peshawar from “law breakers and militant groups” and would continue until “all the objectives are achieved.” It has outlawed three armed Islamic groups operating in the region.

The show of force — expected to last several more days — comes amid U.S. concern that the newly elected government’s effort to negotiate peace deals with militants has given Taliban and al-Qaida-linked extremists more space to operate along the lawless border.

The U.S. military has reported a 40 percent surge in attacks recently on its forces in eastern Afghanistan, which borders Pakistan’s tribal region.

A senior State Department official, Richard Boucher, began a three-day visit to Islamabad on Monday by meeting with government leaders.

Prime Minister Yousuf Raza Gilani told Boucher the government is negotiating only with groups willing to lay down weapons, a statement from his office said. The prime minister also said the government had received much public support for the military offensive.

In Washington, a Pentagon official said the U.S. military was monitoring the Frontier Corps offensive to assess how significant and effective it proves to be.

“We’ll have to see. The fact that something is being done is a step in the right direction,” said the official, who spoke on condition of anonymity because he was not authorized to speak about the issue on the record.

There was no sign the offensive would be widened to take on Pakistan’s top militant leader, Baitullah Mehsud, who is based in the Waziristan region south of Khyber. Mehsud has said he was suspending talks between his allies and the government in response to the operation in Khyber.

The political administration of Khyber denied Pakistani forces were behind the explosion that destroyed the militant compound in Bar Qambarkhel, a village about 25 miles from the Afghan border.

Officials said at least five people were killed and three were injured. Villager Nawaz Khan Afridi said he saw eight bodies. Haji Namdar, leader of the militant Vice and Virtue Movement, whose supporter apparently owned the compound, said six people were killed.

Namdar vowed revenge.

“We do not know if our country Pakistan is involved, but our claim is on America,” Namdar told Geo TV after a funeral for some of the dead. “We do not know from where it was carried out, but we claim that Jews and Christians did it.”

A spokesman for Namdar’s group, Munsif Khan, said a missile fired from Afghanistan might have caused the damage. “Our friends saw a flash of light coming from the direction of Afghanistan” before the blast, he said.

The Pentagon official said he was unaware of any missile launches into Pakistan from Afghanistan.

Fazal Hussain, an explosives expert in the Frontier Corps who visited the blast site, said a missile would have left a hole in the roof of the building and in the ground but that he saw no evidence of that. He said explosives stored in the building must have detonated.

U.S. missile strikes have periodically targeted militants in Pakistan’s tribal areas, drawing rebukes from the Pakistani government and angering a public already resentful of the alliance with Washington in its war on terrorist groups.

Associated Press writers Sadaqat Jan in Islamabad and Pauline Jelinek in Washington contributed to this report.

This ancient capital city, long known for the architectural splendor of its centuries-old palaces and temples, is getting a new look that could have been plucked from science fiction.

A series of landmarks, notable for their futuristic design, will greet visitors to the Olympics. They include an Olympic stadium that looks like a giant bird’s nest, a swimming venue literally built of bubbles and a pair of black office towers that lean toward each other at a 10-degree angle.

“This is the hottest place on Earth in terms of architecture,” said Rory McGowan, a Beijing-based director of Arup, the British design and engineering firm, which is involved in several signature projects in the city. Architects and designers “are flocking over here in the thousands to look at Beijing.”

As China’s economy started taking off about 20 years ago, a similar transformation began changing the face of Beijing. Scores of traditional courtyard homes, factories and drab communist-inspired apartment blocks have been razed in recent years to make way for high-rise buildings with names such as “Fortune Plaza,” “Soho” and “Park Avenue.”

Now, with the Olympics coming, the construction has turned into a round-the-clock frenzy as the host city seeks to convey an innovative and forward-looking image. Such projects could change Beijing’s image as a stodgy city, particularly compared to cosmopolitan Shanghai, where foreign architects first gravitated a few years ago.

The “Bird’s Nest” Olympic stadium was designed by Swiss firm Herzog and de Meuron, known for turning a hulking former power plant in London into the Tate Modern art museum. It’s a 91,000-seat bowl that will host the opening and closing ceremonies along with track and field events. The stadium’s nickname comes from an exterior of steel “twigs” that form a massive, curving nest.

Motorists regularly disrupt traffic on an adjoining highway as they stop to snap photos.

Across from the Bird’s Nest is perhaps Beijing’s most whimsical building: the Water Cube, the swimming venue for the Games.

Builders used material similar to plastic wrap to create 4,000 translucent bubbles, which were filled with air and bolted to a metal frame. The material allows sunlight to filter in and the sounds of splashing water to flow out.

China Central TV’s new headquarters was planned by Dutch architect Rem Koolhaas, who designed the Seattle Public Library, the Prada store in New York and the Casa da Musica concert hall in Porto, Portugal.

Its two 37-story towers of black glass on diamond-shaped steel beams bend toward each other and are joined at the top by a sloping horizontal section that ranges from nine to 14 stories. It looks like a pair of bermudas, and Chinese have dubbed it “Big Shorts.”

Not everyone likes the city’s changing look.

“Most of the venue designers are foreign, and they don’t know Chinese culture well enough,” said Zhang Song, a professor in the college of architecture and urban planning at Tongji University in Shanghai. “They tended to focus mainly on surrealism, avant-garde style and postmodernism. These things are very good for a short time, but as times passes by, I wonder if they will last as classic design.”

Beijing’s other new buildings include a gargantuan airport terminal, with slanted skylights atop an arching roof, meant to mimic scales on a dragon’s back. In the heart of the city is a glass and titanium dome nicknamed “The Egg,” the sprawling national theater entered by walking under a clear-bottomed moat.

The change is dizzying — many of the structures have opened just within the past year — but city planners shrug it off.

“I don’t think it’s anything to make a fuss about,” said Tan Xuxiang, deputy director of the Beijing Municipal Planning Commission. “It’s like a growing child. I’m a 12- to 14-year-old kid. If you see me after two years and I haven’t grown, then I definitely have some kind of illness, right?”

Some, though, lament the loss of old Beijing. While the imperial Forbidden City and other tourist sites remain, many of the old courtyard homes — nestled amid the city’s “hutongs,” or alleyways — have been lost.

The days when hutong dwellers filled the streets in the evenings are giving way to a more modern and anonymous urban lifestyle.

“When people think of Beijing, they should also understand the traditional aspect of Beijing — the Forbidden City, the numerous hutongs,” said Hu Xinyu, managing director of the Beijing Cultural Heritage Protection Center. “That’s the real Beijing.”

Militants killed more U.S. and NATO troops in Afghanistan in June than in Iraq for the second straight month, a grim milestone capping a run of headline-grabbing insurgent attacks that analysts say underscore the Taliban’s growing strength.

The fundamentalist militia in June staged a sophisticated jailbreak that freed 886 prisoners, then briefly infiltrated a strategic valley outside Kandahar. Last week, a Pentagon report forecast the Taliban would maintain or increase its pace of attacks, which are already up 40 percent this year from 2007 where U.S. troops operate along the Pakistan border.

Some observers say the insurgency has gained dangerous momentum. And while June also saw the international community meet in Paris to pledge $21 billion in aid, an Afghanistan expert at New York University warns that there is still no strategy to turn that commitment into success.

Defense Secretary Robert Gates has noted that more international troops died in Afghanistan than in Iraq in May, the first time that had happened. While that trend — now two months old — is in part due to falling violence in Iraq, it also reflects rising violence in Afghanistan.

At least 45 international troops — including at least 27 U.S. forces and 13 British — died in Afghanistan in June, the deadliest month since the 2001 U.S.-led invasion to oust the Taliban, according to an Associated Press count.

In Iraq, at least 31 international soldiers died in June: 29 U.S. troops and one each from the former Soviet republics of Georgia and Azerbaijan. There are 144,000 U.S. troops in Iraq and 4,000 British forces in additional to small contingents from several other nations.

The 40-nation international coalition is much broader in Afghanistan, where only about half of the 65,000 international troops are American.

That record number of international troops means that more soldiers are exposed to danger than ever before. But Taliban attacks are becoming increasingly complex, and in June, increasingly deadly.

A gun and bomb attack last week in Ghazni province blasted a U.S. Humvee into smoldering ruins, killing three U.S. soldiers and an Afghan interpreter. It was the fourth attack of the month against troops that killed four people. No single attack had killed more than three international troops since August 2007.

“I think possibly we’ve reached a turning point,” said Mustafa Alani, the director of security and terrorism studies at the Dubai-based Gulf Research Center. “Insurgents now are more active, more organized, and the political environment, whether in Pakistan or Afghanistan, favors insurgent activities.”

U.S. commanders have blamed Pakistani efforts to negotiate peace deals for the spike in cross-border attacks, though an initial deal with militants has begun to fray and security forces recently launched a limited crackdown in the semiautonomous tribal belt where the Taliban and al-Qaida operate with increasing freedom.

For a moment in mid-June, Afghanistan’s future shimmered brightly. World leaders gathered in Paris to pledge more than $21 billion in aid, and Afghan officials unveiled a development strategy that envisions peace by 2020.

But the very next day, the massive and flawlessly executed assault on the prison in Kandahar — the Taliban’s spiritual home — drew grudging respect even from Western officials.

U.S. Ambassador William Wood said violence is up because Taliban fighters are increasingly using terrorist tactics that cause higher tolls, but that there’s no indication fighters can hold territory. He said June had “some very good news and a couple cases of bad news.”

“The very good news was Paris. There were more nations represented, contributing more than ever before,” Wood told the AP.

The scramble after the jailbreak to push the Taliban back from the nearby Arghandab valley was the other big plus, Wood said. The Afghan army sent more than 1,000 troops to Kandahar in two days.

“Although Arghandab got major press for being a Taliban attack, the real news in Arghandab was that the Afghans themselves led the counterattack, deployed very rapidly and chased the Taliban away,” Wood said.

The worst news, Wood said, was the prison break, and the possible involvement of al-Qaida.

“The Taliban is not known for that level of complex operation, and others who have bases in the tribal areas are,” he said.

Alani agreed: “The old Taliban could not do such an operation, so we are talking about a new Taliban, possibly al-Qaida giving them the experience to carry out this operation.”

Days after the prison attack, an angry President Hamid Karzai threatened to send Afghan troops after Taliban leaders in Pakistan, marking a new low in Afghan-Pakistan relations.

Contributing to the increased death toll is an increase in sophistication of attacks. U.S. Maj. Gen. Jeffrey J. Schloesser, the top commander of U.S. forces here, said this month that militant attacks are becoming more complex — such as gunfire from multiple angles plus a roadside bomb. Insurgents are using more explosives, he said.

Mark Laity, the top NATO spokesman in Afghanistan, said troops are taking the fight to insurgents in remote areas and putting themselves in harm’s way. One or two events can disproportionally affect the monthly death toll, he said.

“Sometimes it is just circumstance,” Laity said. “For instance you can hit an IED and walk away or not, and what has happened this month is that there’s been one or two instances that there’s been multiple deaths.”

The AP count found that some 580 people died in insurgent violence in June, including around 440 militants, 34 civilians and 44 Afghan security forces. More than 2,100 people have died in violence this year, according to the AP count, which is based on figures from Afghan, U.S. and NATO officials.

Barnett Rubin, an expert on Afghanistan at NYU, said the Paris conference shows a strong international commitment to Afghanistan, but he said there is still no strategy for longterm success.

“Let’s focus on the essentials: creating a secure environment for Afghanistan and Pakistan to address their problems and for the international community to eliminate al-Qaida’s safe haven,” Rubin said. “We haven’t been getting there, and we are not getting closer, pledges or no pledges.”