China orders tainted milk products off shelves
BEIJING: China's leaders scrambled Saturday to contain public dismay over widespread contamination of milk supplies, castigating local officials for negligence while moving to tamp down criticism of the government's response.
Officials promised to keep stores supplied with clean milk and set up medical hot lines nationwide to help people cope with one of the worst product safety scandals in years.
Milk and dairy products from 22 companies have been recalled after batches tainted with the industrial chemical melamine sickened more than 6,200 children and left four infants dead from kidney failure.
"This has caused a very widespread scare in Chinese society, and there's a great deal of mistrust," said Jing Jun, a sociologist at Tsinghua University in Beijing. "People see this as a failure of the government. The companies here were not thoroughly inspected."
Trying to shore up public confidence, Premier Wen Jiabao told senior Communist Party members that official misconduct contributed to the milk contamination and earlier product scandals. He demanded they put public safety "at the top of the agenda."
"In some places, incidents of food and production safety have continuously arisen and seriously harmed people's lives and health," Wen said in remarks carried on state-run television. "The social impact is vile and the lesson profound."
In a show of concern, Wen's chief deputy made a highly publicized trip to a dairy region south of Beijing at the center of the scandal, visiting farms, shops and a hospital, where he urged "all-out efforts on medical treatment" for the sick.
The energetic response underscored the deep challenge the crisis poses for the communist leadership. The government has staked its legitimacy in part on competent management of a rapidly developing society, a reputation it hoped would be burnished by last month's lavish, well-run Beijing Olympics.
But the post-Olympic accolades have been pushed aside, and the scandal is again baring widespread public skepticism about the government's abilities to get lower level officials to enforce policies and over cover-ups of problems.
Recalls of Chinese-made dairy products widened Saturday to Japan, which followed the lead of Singapore, while more products were recalled in the self-governing Chinese territories of Hong Kong and Macau. Starbucks stopped offering milk in its 300 outlets in China.
In the 10 days since the government revealed that Shijiazhuang Sanlu Group Co. sold tainted milk powder and infant formula, sketchy details have exposed one local government cover-up as well as the sale of contaminated milk by China's biggest dairies, many of them state-owned.
"Since this Sanlu incident arose, many people have a suspicion (naturally it's an old suspicion): If we can successfully hold a highly complex Olympics, how can we not even manage the quality of milk?" Mo Zhixu, a liberal-minded author, wrote in his online journal.
Seeking to rein in criticism, propaganda officials ordered newspapers, TV stations and Web sites to mainly use reports from the government's official Xinhua News Agency, news employees at two publications reported.
An editor said the government is allowing expressions of outrage at the milk scandal, but prohibited accusations that such problems might be systemic. The editor, and a reporter at the second publication, asked not to be identified for fear of retribution from authorities.
One Web log post later deleted from several Internet sites purported to be from the daughter of the recently fired chairwoman of the Sanlu dairy.
The blogger, identified as Wu Qing, said her mother informed Shijiazhuang city officials in early August about the melamine-tainted milk powder only to be rebuffed because the Olympics and the city's stop on the torch relay loomed.
"The government's words said 'first guarantee the sacred torch relay and the rest can be put off until later,'" the post said.
Food and product safety scandals have been a feature of Chinese life. Only last year, the government promised to overhaul inspection procedures after exports of medicines, toys, pet food and other products killed and sickened people and pets in North and South America.
The chemical in the dangerous pet food was the same as in the milk scandal — melamine.
Used in making plastics, melamine is high in nitrogen, which registers as protein in tests of milk. Though health experts believe ingesting minute amounts poses no danger, melamine can cause kidney stones, which can lead to kidney failure. Infants are particularly vulnerable.
Some of the farmers who sell milk to Chinese food companies are thought to have used melamine to disguise watered-down milk and fatten profit margins thinned by rising costs for feed, fuel and labor.
Many of the largest companies whose products have been recalled, like Yili Industrial Group Co. and Mengniu Dairy Group Co., did not have government inspections before the problem became public. The government scrapped that exemption this past week.
"This is not just a single event. It's because of a number of companies and inspectors. This is where the seriousness arises," said Jing, the sociologist. "In the U.S., you have problems too, but that's different. The government system has failed."
Nigeria militants wage most intense oil war for years
LAGOS: Nigerian militants said on Saturday they had destroyed another major oil pipeline in the Niger Delta after a week of the most intense attacks against Africa's biggest oil and gas industry for years.
The Movement for the Emancipation of the Niger Delta (MEND) said it had attacked a pipeline operated by Royal Dutch Shell at Buguma Front in Rivers state late on Friday and warned its campaign was not over.
A Shell spokeswoman in Nigeria said the company was investigating the claim, but gave no further details.
The Anglo-Dutch giant, the company hardest hit by the violence, declared a second force majeure on Bonny Light oil shipments on Friday following the week's unrest but gave no details on production.
"MEND will continue to nibble every day at the oil infrastructure in Nigeria until the oil exports reach zero," the group said in an e-mailed statement.
MEND fighters have hit pipelines, flow stations and oil and gas facilities in the Niger Delta every day since last Sunday, when the group declared an "oil war" in response to what it said were military ground and air strikes.
Shell operates onshore in Nigeria through its SPDC joint venture, of which it holds 30 percent while state oil firm NNPC holds 55 percent. Local subsidiaries of France's Total and Italy's Agip hold the rest.
Shell had already been forced to extend a force majeure on Nigerian Bonny Light exports, which frees it from contractual obligations, following an attack on a major pipeline in July.
Such intensity of attacks across the eastern Niger Delta, a vast network of mangrove creeks, makes assessing the impact difficult as engineers scramble to investigate exactly how much production has been hit in each location.
Nigerian government officials have said production has fallen by 150,000 barrels per day (bpd) over the past week, and estimate the country's current output at 1.95 million bpd.
INTENSE AND SUSTAINED
The attacks this week have largely been limited to Rivers state in the eastern Niger Delta but MEND has warned it may extend its campaign to other areas on- and off-shore.
The violence has been the most intense and sustained since MEND first launched its campaign of sabotage in early 2006, and has included relatively rare direct confrontation with the army.
The world oil market, which has largely focused on the fallout from the credit crisis, has found some support from the situation. Prices traded above $100 on Friday.
MEND said it had launched this week's campaign -- an operation it calls "Hurricane Barbarossa" -- in response to air and naval attacks on one of its bases in Rivers state.
"When (Rivers state governor Rotimi) Amaechi took over, the government just said that they must kill me and my boys," one militant leader, Ateke Tom, told Reuters television this week.
"That is why we are fighting back," he said, surrounded by heavily armed fighters.
The militants want greater development and a better living environment after decades of neglect in the delta, where impoverished villagers live among polluted land and water.
The unrest is fuelled by a lucrative trade in stolen oil worth millions of dollars a day.
Security experts say the region will never be stable unless an alternative source of income can be found for the gunmen, businessmen, politicians and international shippers all taking their slice of the illegal profits.
Shell declares force majeure on Nigeria oil exports
LAGOS: Royal Dutch Shell said on Saturday it had declared a second force majeure on crude oil shipments from Nigeria following militant attacks in recent days on its facilities in the Niger Delta.
Shell last week extended a force majeure, which frees it from contractual obligations, on Bonny oil exports from Nigeria following a militant attack in late July.
It said it had declared the second force majeure on Bonny Light shipments on Friday, following further attacks by militants this week.
U.S. readies massive toxic-debt plan
NEW YORK: The U.S. government is preparing to mop up hundreds of billions of dollars in bad mortgage debt, after curbing short-selling and guaranteeing mutual funds in an effort to stabilise financial markets.
The moves cap a week in which financial markets faced their most serious confluence of crises since the Great Depression in the 1930s and threatened national economies and the worldwide banking system.
"It's like having a heart attack, and you go and get your chest cracked open and get it fixed, but the next morning you're still hurting," said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas. "This has been a beast of biblical proportions. Nobody has seen anything like it."
Lawmakers promised fast action on the toxic-debt plan, which two banking industry sources put in the $500 billion (273 billion pounds) to $800 billion range. A Treasury spokeswoman declined comment.
As the government brought out the big guns to tackle the financial crisis, investment bank Morgan Stanley bought itself some time to come up with a plan for its future and talked to Wachovia Corp and other banks about a merger.
On Saturday, a U.S. bankruptcy judge approved Barclays's deal to purchase the core U.S. business of Lehman Brothers Holdings Inc .
But much of the markets' focus was on Washington, as officials from President George W Bush's administration, Congress and the Federal Reserve worked to craft a number of plans to restore confidence in shaken stock markets.
The U.S. government has pledged more than $1 trillion to prop up the financial system and housing market.
The U.S. Treasury said on Friday it would use $50 billion to back money-market mutual funds whose asset values fall below $1.
"The problems were critical, both in the credit markets and with banks," said Blake Howells, director of equity research at Becker Capital Management in Portland, Oregon. "The government is trying to stop a domino effect of more institutions failing, and taking others down."
U.S. stocks soared as the Dow Jones industrial average closed up 368.8 points, or 3.4 percent, at 11,388.4, and the Nasdaq rose 74.8, or 3.4 percent, to 2,273.9. Other global markets also reacted sharply.
WORKING FOR THE WEEKEND
Government officials said they had more work to do.
"We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses," Treasury Secretary Henry Paulson said.
"The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy."
Banks worldwide have suffered more than $500 billion of write-downs and loan losses since the global credit crisis began more than a year ago.
The crisis grew more acute this month with government takeovers of mortgage companies Fannie Mae and Freddie Mac ; the bankruptcy of Lehman Brothers Holdings Inc ; Merrill Lynch & Co's shot-gun agreement to be bought by Bank of America Corp ; and a bailout of insurer AIG . This came just six months after a government-backed rescue of Bear Stearns Cos.
Government officials have indicated their willingness to do what they can to prevent a major financial institution from going under and roiling the overall markets. A government plan was expected to be sent to Congress this weekend.
"They are absolutely petrified of just a run on financial assets and they came very close to that on Thursday," said Boris Schlossberg, director of currency research at GFT Forex in New York. "At this point they have just decided that fiscal responsibility goes out the door."
The banking issues are not limited to the United States.
UK lender HSBC Holdings walked away from a $6.3 billion deal for control of Korea Exchange Bank , fuelling speculation it may be turning its attentions to its embattled rivals in the West.
After Britain's Financial Services Authority (FSA) imposed a four-month ban on short-selling financial stocks on Thursday, the U.S. Securities and Exchange Commission followed suit on Friday with an immediate 10-day ban.
The world's central banks also redoubled their efforts to lubricate the seized-up money markets. Japan, Australia, India and Indonesia pumped in $42 billion after the U.S. Fed coordinated a $180 billion package a day earlier.
South Africa's Mbeki agrees to resign
JOHANNESBURG: South African President Thabo Mbeki on Saturday accepted a demand from his own party to resign, effectively ending a nine-year rule marked by economic prosperity but marred by allegations of abuse of power.
The African National Congress's decision to remove Mbeki, favoured by investors for his pro-business policies, capped years of infighting sparked by his 2005 firing of former deputy president Jacob Zuma in a corruption scandal.
Last week a judge dismissed the graft charges against Zuma, now the ANC leader, and suggested there had been high-level political involvement in the case. The ruling spurred pro-Zuma militants within the party to demand Mbeki's head.
Loyalists fought to save Mbeki's presidency but could not sway the party's national executive committee, a key policy-making body stacked with his enemies. It announced his removal in a dramatic press conference outside Johannesburg.
"He didn't display shock or any depression. He welcomed the news and agreed that he is going to participate in the parliamentary process," ANC Secretary-General Gwede Mantashe said as he announced the party's decision.
A few hours later Mbeki announced he would accept his fate.
"Following the decision of the National Executive Committee of the African National Congress to recall President Thabo Mbeki, the president has obliged and will step down after all constitutional requirements have been met," the presidency said in a statement.
A spokesman for Mbeki later told Reuters that the South African leader had decided not to attend the 63rd session of the United Nations General Assembly in New York next week. He had been scheduled to leave on Saturday.
MANUEL TO STAY
The decision to remove Mbeki must be ratified by parliament, a formality given the ANC's two-thirds majority in the assembly.
The resignation may raise political instability in Africa's economic powerhouse 14 years after its transition from the end of white minority rule, although a smooth process to replace him, and reassurances on policy, will ease fears.
Mantashe said the ANC would ask Mbeki's cabinet ministers, including Finance Minister Trevor Manuel -- who is widely respected by markets -- to remain in their positions in the transition period for the sake of stability.
Manuel's office told Reuters he would not step down -- a decision that should calm some investors fears.
Mbeki, who has ruled South Africa since taking over from Nelson Mandela in 1999, was due to leave office in 2009.
He lost the leadership of the ANC to Zuma last year in a bitter leadership battle that further divided the party.
Zuma, popular with the left wing of the ANC and its trade union and communist allies, is the frontrunner to succeed Mbeki. It was unclear whether he would immediately step into the post. Zuma would first have to enter parliament and the cabinet.
Deputy President Phumzile Mlambo-Ngcuka might have assumed the presidency but she has signalled she will resign with Mbeki. Cabinet ministers and the speaker of parliament follow in the succession line.
It is generally expected that parliament, which is dominated by the ANC, will elect a new president within 30 days. Baleka Mbete, speaker of parliament and a Zuma loyalist, has been mentioned as the most likely person to lead the transition.
"If you have the continuity of the cabinet staying largely intact I would not expect a major market reaction," Citigroup strategist Leon Myburgh said.
"But you will have to see how individuals react ... key decision-makers like Finance Minister Trevor Manuel will be key to how the market reacts."
Mbeki and Manuel have presided over the country's longest ever period of economic growth -- a decade.
But the country's powerful trade unions have lambasted his government for putting the interests of the business community and the rich ahead of common people, millions of whom still live in poverty.
The ANC's leftist allies also accused Mbeki and his aides of plotting to smear Zuma and derail his hopes of succeeding Mbeki. The South African leader has consistently denied any involvement in the prosecution.
"We welcome the decision," said Patrick Craven, spokesman for the Congress of South African Trade Unions, the largest labour federation. "It's very important that we ... refocus government on key developmental priorities."
Mbeki's ouster comes just a week after one of his greatest triumphs -- mediating a power-sharing deal in neighbour Zimbabwe that should end years of political and economic crisis.
BAGHDAD: A suicide car bomber killed three people and wounded 23 others in an attack next to a sports ground in the northern Iraqi town of Tal Afar on Saturday, police said.
The three dead were two off-duty policemen and one off-duty soldier. Tal Afar, 420 km (260 miles) northwest of Baghdad, and the nearby city of Mosul have been the target of numerous attacks by suspected al Qaeda militants in recent months.
Earlier on Saturday, a bomb blast outside Iraq's national journalists' union in Baghdad wounded the union's head and three others.
CAIRO: People still live at the cliff's edge. Hundreds of children play at the cliff's edge. And the cliff is crumbling, right under their feet, huge mustard-colored boulders tumbling away from the mountain wall. The children play. Their parents worry.
"If they just gave us tents, we would go live in those tents," said Samah Abdel Qader, 45, a nurse who has two children and lives at the cliff's edge, literally.
The police have cordoned off the neighborhood; they do not want any nosy reporters, foreign observers or charity groups to get in.
"It's a crisis," barked one state security agent, when asked why the area was sealed. A crisis for the government, seems to be what he meant.
Eleven days earlier a huge piece of this cliff cleaved away and crushed the lives below, poor people living on the edge of the city. So far, 101 bodies have been recovered, but the true scope of what happened remains hidden beneath massive rocks that rest right where they fell.
Now the government faces a reckoning: What to do with all the people still buried under the rocks; what to do with all the people, the many thousands, still living beneath the fragile cliff; what to do with the many people living on top of the cliff; what to do about its own reputation, having failed repeatedly to manage any recent crisis in a way that did not leave survivors angry and alienated.
"There is fear of another rock slide every moment," said a general in the Interior Ministry, which has taken the lead in this crisis - as in all others. The general is not authorized to give his name but did offer a surprising degree of candor, expressing frustration with the system, top to bottom, that has let so many people down.
"There is negligence," the general said. "The whole country is responsible and every person sitting in his chair is responsible."
It was late morning, and the neighbors were frustrated by their police-imposed isolation. So they led a tour, passing messages by cellphones to avoid the police and informants, taking visitors onto the cliff, with its frightening view of the pit.
Down below was Douaiqa, a poor corner of Manshayet Nasser, a sprawling neighborhood of more than one million residents. Three large excavators were parked and silent. There was a large awning set up to shade the plastic chairs for the officers, stars on their shoulders. There was no work going on, and neighbors said that as the days have passed the pace of recovery has slowed.
"There used to be more people here, but everyday it is less and less," said Said Yousef, who lives on top of the cliff, a safe distance from the edge.
"There," he said, excitedly, pointing to a pile of boulders that had fallen a day earlier. "And there, too," he said, pointing out a pile of sand way below which he said was also part of the cliff wall just 24 hours earlier.
Some of the homes at the cliff's edge seemed to have crumbled when the ledge broke away. The area feels like a war zone, like Grozny, the capital of Chechnya, after Russia invaded people came out of the ruins, many barefoot, all asking to be listened to.
They had ghostly, frightened expressions.
"Look at this," said Qader, as she pressed her foot on the ground. It seemed to warp under her weight, and then popped back up. She kept her foot pumping at the ground, "Look," she said, again, in a kind of disbelief.
Look, she pointed to the buckled wall of her neighbor's home. Hamdi Hussain lived in a small brick and cement room just big enough for his king-size bed. Like the others here, he wanted help from the government.
"We went to the municipality and they just chased us away," he said. So he went back to his bed, which is less than a meter from the cliff's edge.
The government's initial response was to tell the people here that it was their fault for living in such a dangerous place, that this was a shanty town of illegal dwellings. But that misses a much broader reality: About 70 percent of Cairo lives in informal communities, which like this one were built without government planning or permission.
This corner of Manshayet Nasser is dirt poor, but it remains a community of brick houses, some three and four stories tall, running along rocky dirt roads. Officials said that about 100,000 people lived there.
As the morning grew hotter, the skyline disappeared in a haze of smog. Five women sat in a circle chatting. One was holding a small child on her lap. Another stood up and leaned against a metal cane.
"Of course we are afraid," said Sabah Muhammad Hussein, 35, a mother of three who was sitting with her neighborhood friends.
"They keep telling us, 'When your turn comes up, we will move you.' We have lived here for 15 years." Suddenly, Yousef grew panicky. "They are coming," he said, his voice tight with fear.
"They are coming." The police were coming and so he fled, into his house. He has not yet moved his family back from the cliff, but he ran from the police.
The government has made some effort to help. Hundreds of families have been moved from buildings beneath the cliffs that were most vulnerable to another rock slide, putting them first in tents, then in new apartments.
But with a bureaucracy that is slow and inefficient in the best of times, the state ended up infuriating the victims, too. One of them, Ahmed Muhammad Mahmoud, 42, first went to the municipal council asking for help - only to be told, he said, that he needed to have proof he had lost a house. Many people, the authorities said, tried to piggyback on the disaster to get a new apartment.
"My wife told them we lost everything," Mahmoud recalled.
He said they told him to get a witness.
"My wife said they are all dead, are we supposed to bring them back from the dead!" he said.
Mahmoud was in a quandary until the next morning when Al Ahram, the state-owned daily newspaper, hit the stands. On the front page was a picture of a rescue worker holding Mahmoud's son.
He moved into a tent. He hated the tent so he sneaked out of the camp, leaving his family behind, to seek help. When he returned he says he was arrested.
There is no way to verify his account, but he said that the police blindfolded him and asked him, "How long have you been trying to overthrow the government." They eventually let him go, and he lives now in a rented storeroom. His wife took the children to stay with his mother.
The government put several hundred families in new apartments, then a few days later discovered that about 20 of those families had not been residents of the area crushed in the rock slide. So they were kicked out.
"They are all poor, but there are priorities," said the general from the Interior Ministry. "Maybe they will get a chance another time."
Pakistani obliquely threatens U.S.
ISLAMABAD, Pakistan: Pakistan's new president told lawmakers the nation will not tolerate violations of its sovereignty by "any power" in the name of fighting terrorism, a clear signal to the U.S. to avoid controversial cross-border strikes.
In his first address to Parliament, Asif Ali Zardari, the widower of slain ex-Prime Minister Benazir Bhutto, also called Saturday for a committee to consider reducing presidential powers that had been enhanced under his predecessor, longtime U.S. ally Pervez Musharraf.
A series of suspected U.S. missile attacks and an American-led cross-border ground assault in Pakistan's volatile northwest have signaled Washington's impatience with Pakistani efforts to eliminate hide-outs of Taliban and al-Qaida militants implicated in attacks in neighboring Afghanistan.
But the U.S. strikes also have angered Pakistanis, and Zardari has faced some criticism for not being more outspoken against them. On Saturday, his voice rose as he tackled the subject.
"We will not tolerate the violation of our sovereignty and territorial integrity by any power in the name of combating terrorism," said Zardari, who is expected to see President Bush in the next few days while leading a delegation to the United Nations.
Zardari, who easily won the presidency earlier this month after Musharraf quit under threat of impeachment, is considered generally pro-American. He warned Saturday that terrorism is a grave challenge to Pakistan and said the government should prevent the country's soil from being used as a base for terrorist attacks against other countries.
Zardari's rise to the presidency has brought some hope for political stability in Pakistan after a year of turmoil that included emergency rule, Bhutto's assassination, a highly charged election, the collapse of a ruling coalition and Musharraf's resignation.
Though saddled with a reputation of being corrupt, Zardari could prove a powerful president partly because he also leads the party that controls the largest number of seats in Parliament.
Still, he has promised to respect the supremacy of Parliament. And during his speech, he asked for an all-parties committee to re-examine constitutional changes under Musharraf that gave the president powers including dissolving Parliament. Zardari called such powers "distortions."
"Let me assure you that the days of constitutional deviation and bypassing the Parliament while taking the decisions of national importance are over," he said, also noting, "Never before in the history of this country has a president stood here and given away his power."
The mere fact that Zardari fulfilled a constitutional duty to address a joint session of Parliament was symbolic: Musharraf, who took power in a 1999 military coup, did so just once to jeers from opposition lawmakers. Zardari, in contrast, faced a polite reception from a mostly friendly audience that often thumped tables in support.
Zardari expressed concern about Pakistan's convulsing economy and said the government must take steps to ensure food security amid soaring prices for staples.
He also paid glowing tributes to his wife, who was assassinated in a gun-and-suicide bomb attack in December after returning to Pakistan to lead the opposition against Musharraf.
"I wish she was addressing this Parliament today and not me," Zardari said.
Zardari has faced criticism for dragging his feet on promises to reinstate dozens of judges Musharraf ousted last year in a bid to avoid challenges to his rule.
Opposition leader Nawaz Sharif — whose party came in second in parliamentary elections in February — left the ruling coalition last month after disagreements over how to reinstate the judges.
Though some justices have returned to work, including four who took oaths for the Supreme Court Saturday, Zardari has also pushed for legal changes that some say would weaken the judiciary.
Zardari stressed the importance of independent judges in his speech, but Sharif was unimpressed.
"I do not see any hope for the independence of the judiciary," he said.
Sharif and Zardari's falling out also involved disputes over Musharraf's future, including whether he should face treason charges. Sharif has pushed for punishment of the former army general, but Zardari has taken a softer tone.
Underscoring the threat of militancy in Pakistan, a suicide car bomber attacked an army convoy Saturday in the North Waziristan tribal region. Three civilians and three soldiers were killed, said Maj. Murad Khan, an army spokesman.
A separate roadside bomb ripped through another army convoy in the nearby South Waziristan region, killing two soldiers and wounding three, Khan said.
Although no one immediately claimed responsibility, the Pakistani Taliban have said they were behind a string of bombings in the past few weeks in revenge for army military offensives.
Bomb explodes at hotel in Pakistan's capital, killing at least 40
ISLAMABAD, Pakistan: A huge truck bomb exploded at the entrance to the Marriott Hotel in Islamabad on Saturday evening, killing at least 40 people and wounding more than 150, the police said.
The blast, one of the worst acts of terrorism in Pakistan's history, went off just a few hundred yards from the prime minister's house, where all the leaders of government were dining after the president's address to Parliament.
The toll was expected to grow because of reports that people had been trapped inside the six-story hotel, which has been a favorite meeting spot of both foreigners and well-connected Pakistanis in the heart of the capital. The building was quickly engulfed in flames and continued to burn for hours Saturday night.
The bomb left a vast crater, some 40 feet wide and 25 feet deep, at the security barrier to the hotel. Witnesses said security guards and their gate posts were buried under a mound of rubble. A line of cars across the street from the hotel were mangled and trees on the street were charred. Windows in buildings hundreds of yards away were shattered.
Witnesses said they dragged dozens of bodies from the lobby of the hotel and an adjacent parking lot, including those of a number of foreigners.
An American Embassy spokesman, Lou Fintor, could not confirm if any American citizens were killed or wounded. "We are in the process of determining the status and welfare of our embassy staff as well as any other Americans who may have been affected, and we are in close contact with the State Department in Washington," he said.
The bombing was the deadliest to take place in the well-guarded capital, and may have been timed for the day that President Asif Ali Zardari made his first address to Parliament since his election two weeks ago. Zardari, whose wife, former Prime Minister Benazir Bhutto, was assassinated in December by a suicide bomber, vowed to root out terrorism and extremism and to stop terrorists from using Pakistani soil to attack other countries.
Both he and the prime minister, Yousaf Raza Gilani, condemned the attack and repeated their determination to deal with terrorism with an iron hand, the state news agency, the Associated Press of Pakistan, reported.
The bombing may also have been retaliation by militants for the recent military operations in the tribal area of Bajaur and the adjacent area of Swat, which have reportedly killed scores of militants.
Coming after a bombing in Kabul, Afghanistan, earlier this year at the Serena Hotel, another gathering spot for foreigners, the Marriott attack appeared to send a message not just to Pakistan but to Washington and other Pakistani allies.
There was no immediate claim of responsibility.
The White House on Saturday condemned the bombing, calling it a "reminder of the threat we all face."
The Islamabad Marriott has been attacked by militants at least twice in the past, including in a suicide attack in January 2007 that killed a policeman. A senior police official, Ashfaq Ahmed Khan, said initial reports suggested that an explosives-laden dump truck was detonated near the entrance.
"The Marriott is an icon," said Abdullah Riar, a former aide to Bhutto. "It's like the twin towers of Pakistan. It's a symbolic place in the capital of the country, and now it has melted down."
One wounded American who works at the embassy here said he was unlocking his car when the bomb exploded. The American, who gave only his first name, Chris, had injuries to his face, neck and shoulder, and was holding a bloody T-shirt to his face.
American Embassy personnel were at the scene, and said they had come to help American citizens who were caught in the blast.
Amjad Ali Khan, a guard on duty at a side entrance to the hotel, said that he saw four to five bodies in the hotel parking lot and that he helped carry out 40 bodies from inside the hotel. He said they were "in the lobby and in the restaurant and everywhere."
"There were very few people injured," he said. "They were all dead." He said he saw three Western women who had died from head wounds.
"They are terrorists," he said when asked who he thought was responsible for the blast.
The Interior Ministry's antiterrorism cell had warned several days ago that it had information that four or five suicide bombers had been dispatched on missions around the country. The government enforced tight security during the president's 3 p.m. address, posting army Rangers and police in rings around the Parliament and government buildings.
The Marriott lies nearby, but the Rangers and police may have reduced the security after the event and at 7.30 pm, the time of Iftar, when Muslims break their all-day fast during the Ramadan holiday. The bomb exploded at 8 p.m., when many Pakistanis were inside the banqueting hall at the back of the hotel, taking their evening meal.
The Islamabad police have asked the army to assist in the rescue work and declared a state of emergency in the local hospitals.
Meanwhile, the FBI had offered to send special agents to help investigate the scene of the attack, and to try to determine the driver of the vehicle and the kind of explosives used, said a senior American official, who declined to be identified because of the sensitivity of the matter.
The FBI is awaiting approval from the Pakistani government before dispatching the agents, perhaps as many as 15, the official said.
Administrators winding up Lehman's European business have questioned why $8 billion was transferred to New York just before the bank collapsed. There have been fears among Lehman's 4,500 staff in London they may not get their final pay packets.
"We are asking and working with the American government to get that money back to pay salaries, not of high-flying financiers, but of cleaners and people who are computer operators who would otherwise be denied their money," Brown told delegates at the ruling Labour party's annual conference.
Brown also said he would visit the United States on Wednesday to meet financiers and global authorities to discuss the turmoil in financial markets. He will also speak with the French, German, Italian and Indian governments to build support for an international financial watchdog.
A Place in My Country
Farm Blogs from Around the World
Living in France
Blogs about France
Paris / Montmartre/ Abbesses holiday / Vacation apartment