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New allegations of widespread bribery in the

Australia China spy affair.

Nothing to hide. Xanana Gusmao

welcomes a corruption inquiry.

An Iranian passenger jet

plunges to the ground, killing

all on board. And Australia's

tsunami threat fizzles after an

earthquake off New Zealand.

O'Connor with ABC News for Good morning. Beverley

Australia Network. The top US trade official says he will

raise the issue of Beijing's

arrest of Australian Stern Hu

and other Rio Tinto employees

on espionage charges when he

meets Prime Minister Wen

Jiabao. And a Chinese newspaper

has revealed details of

allegations against Mr Hu. The

China 'Daily' claims the Rio

case has exposed widespread

bribery involving Mr Hu and

three other Rio employees.

China has remained silent on

the case of Australian citizen

Stern Hu. But its newspapers

haven't. The China 'Daily' has

published startling allegations

involving Rio Tinto employees.

It claims executives from all

16 Chinese steel mills pamping

in iron ore price thauks this

year have been bribed by an

industry insider. It's prompted

a former Trade Minister and current National Party Leader

Warren Truss to claim that the

affair is seriously testing

Australia China relations. I

think that the relationship

with Australia - between

Australia and China has reached

an abysmally low level. In

spite of the fact that the

Prime Minister was elected

expressing a view to the

Australian people that he would

have a special relationship

with China, in reality, our trade negotiations are going

nowhere, we haven't even had a

meeting for seven months. We

have an Australian businessman

in custody in China. And of course, contract negotiations

for resources are in in

disarray. So the relationship

with China has reached an

extraordinarily low level.

That's in comprehensible. The

spying allegations have also

Minister Kevin Rudd to warn prompted the Australian Prime

China the world will be

watching how it handles the situation. I also remind our

Chinese friends that China too

has significant economic

interests at stake if its

relationship with Australia,

and with its other commercial

partners around the world. A

range of foreign governments

and corporations will be

watching this case with

interest and be watching it

very closely and they will be

drawing their own conclusions

as it how it is conducted.

Stern Hu has now been detained

without charge for 11 days amid

tense negotiations between the

two countries over iron ore

prices. Mr Hu is accused of

stealing state secret and

bribing officials but all

attempts by Australian

officials to find out more have

been rebuffed.

East Timor's Prime Minister

says he is ready to face an

investigation over opposition

claims of nepotism and

corruption. There's been

pressure on Xanana Gusmao to

resign over his role involving a multimillion-dollar rice

import contract with a company

part owned by his daughter.

Arriving back from Singapore,

Xanana Gusmao spoke to the

media for the first time since

the allegations were first

raised. He said he doesn't

believe his daughter used her

relationship with him to

negotiate a deal between the

government and her company

Prima Food. He says he welcomes

an investigation into the

allegations. If my daughter

used her social status to come

to lobby on behalf of other

companies to supply the rice so

she then gets some message, I

have committed an error. This

is a different case. For this

action I would raise my hands

up and surrender. Xanana

Gusmao says his daughter was

one of a number of shareholders

who contributed $10,000 US to

set up Prima Food. In the law,

it states that the wife or

husband and children and also

others can only have a 10%

share. They are not allowed

over 10%. If there is prove

that it is more than 10%, then

I will declare that I did

wrong. It means I'm wrong. The

ABC obtained documents which

indicate his daughter has an

11% stake in the company. A

group of business leaders

recently claimed she'd sold her

shares. The opposition Fretilin

Party called for the Prime

Minister to resign over the affair.

A human rights group has

blamed Chechnya's President for

the kidnap and murder of a

prominent activist. 50-year-old Natalia Estemirova was working

for the group known as memorial

where she documented abuses by

police. She was abducted in the

commech neean capital. Her body

was found nine hours later with

two close range bullets in her

head. The group's President is

forming the commech neean

President, who he said had

threatened her. Her death is

the latest in a series of

murders tar getting critics of

the Kremlin's violent policies in Russia. The Russian President Dmitry Medvedev says

he is outraged and has ordered

an investigation. A passenger

jet has crashed in

north-western Iran, killing all

168 people on board. Witnesses

report the plane exploded as it

fell out of the sky. The

Russian made Caspian Airlines

Tupelov was heading from Iran

to the Armenian capital when it

crashed. The passenger plane of

Caspian Airlines with 167

passengers crashed because of

technical failure. Our crews

are searching for the remaining and passengers' credentials to

help us identify the bodies.

We're also searching for pieces

of the plane to be handed over

to the engineers of Iranian

aviation to find the exact

cause of the crash. Most of

the passengers were Armenian

but there were some Georgian

citizen and other nationalities

on board. Iran state showed has

showed a deep trench smashed

into an agricultural field

where the plane came down,

breaking into small pieces and scattering burning wreckage,

clothing and shoes all

around. I got out of my car to

pour water in it but I heard a

roaring sound from the sky. It

wasn't cloudy enough to be

thunder. I saw the back of the

aeroplane had caught fire and

crashed. The plane disappeared

off the radar 16 minutes after

take-off. The plane did not

communicate with our navigation

services. It depart ed at

preliminary information it was 12.02. According to the

supposed to enter Armenian

territory but the aviation

control centre called us and

said the plane would not enter

the territory because they

couldn't see tonne the

radar. Iran has suffered a

number of aviation disasters in recent years. Pakistan's Prime Minister

has told world leaders

terrorism will not be defeated

by military means alone. Yusuf

Raza Gilani made the comments

as a man claiming to be

al-Qaeda's No. 2 leader issued

a fresh call for Pakistanis to

rise up against the US. The US

has long urged Pakistan to

crack down on militants within

its borders. But Pakistani Prime Minister Yusuf Raza

Gilani says military action

alone is not enough. The only

successful strategy would be

multidimensional strategy,

particularly which addresses

the root causes. That means

political solutions and

economic development. The

so-called battle for hearts and

minds. A recent poll shows

public sympathy was swung away

from the the militants in

recent years. Now a man

claimsing to be al-Qaeda's

shekd in command says issued a

frsh appeal to Pakistanis. If

we stand by, passively, without

offering support for the

Mujaheddin we shall not only

contribute to the destruction

of Pakistan and Afghanistan but

he shall also deserve the

painful punishment of almighty

Allah. The recording which

can't be independent ly

verified comes as the US

escalates its strategy to

defeat militants on both sides

of the Pakistan/Afghan border.

Their British allies are

engaged in their own debate

back home about whether the war

in Afghanistan can even be won.

Britain's army chief says more

troops are needed in Helmand

province and efforts to provide

extra helicopters and armoured

vehicles have been too slow. It

follows the deaths of 15

British soldiers this month

amid a bloody campaign to

uproot the Taliban ahead of

presidential elections next

month.

The Chinese Government is

warning its citizens living a

broad to be careful after it

claims revenge threats were received from al-Qaeda

following a crackdown on

Muslims in Xinxiang province.

China's embassy in Algeria has

issued a warning on its web

site for its citizens to take

care, and Chinese diplomatic

missions in the Philippines

have increased security. Groups

linked to al-Qaeda have

threatened to attack Chinese

people in retribution for

events in Xinxiang province and

a government spokesman says

Chinese people overseas should

pay attention to their

safety. In recent years, the

Chinese Government has been

paying more and more attention

to protecting the safety of

overseas Chinese institutions

and citizens. China's reminding

overseas Chinese to pay a

attention to their safety and

enhance self-protection. A week

ago in western China, a prost

by ethnic Uighur Muslims turned

into a vim lent clash. 184

people were killed, 1600 were

wounded and 1,000 arrests have

been made. You're watching ABC News for

Australia Network. Coming up,

more than 10% of the world's

swine flu cases are now in

Australia and England's Freddy

Flintoff to quit Test kringt as

he tries to prolong his short-over Keir.

More than 10% of the world's

swine flu cases are now in

Australia. In recent days the

number of confirmed cases has

topped 10,000. While the

government has called for calm,

it is planning to distribute

over 20 million doses. Vaccine.

This is where the human trials

of the swine flu vaccine will

start next week. By far the

biggest priority to tackle this

epidemic is to target babies

and young children. We are

looking for children in the

major capital cities aged

between 6 months and 9. It was

important for us to catch these

people early, and treat them before they had life

threatening diseases. But the

worst is yet to come, according

to the head of public health at

one of the nation's major

medical schools. Professor

Raina McIntyre is predicting

this year's flu could see the

death toll reach in excess of

10,000. The 10,000 figure

includes deaths from pneumonia,

which are the most common

complication of flu and may not

be coded as flu. The

government says while almost

30% of Australians could

ultimately be infected, those

figures are alarmist. We've

seen some fairly ambitious, if

not ludicrous claims being

made. With a trial vaccine in

the final stages of production,

a lot is riding on the

anticipated mass vaccination in October. The possibility we

need to be prepared for, that

there will be a second wave of

virus spread through the

community that might be more

severe. Swine flu can cause

significant lung damage and has

already left a minority of

otherwise healthy people fighting for their lives. The

early signs that people should

look for is really the troubled

breathing very early in the

disease, ant it's possible for

people to deteriorate quite

quickly over a couple of

days. Queensland today recorded

its first death from swine flu.

Throughout the country, 123

people are in hospital. A third

of them their infencive care.

And the peak of this epidemic

is not expected for another

couple of weeks.

Australia's east coast

beaches may experience normal

wave conditions today after a

tsunami warning was cancelled

in the early hours of this

morning. The warning was issued

after a 7.8 magnitude

earthquake was recorded around

160 kilometres off New Zealand's South Island. A

tsunami alert was also raised

for New Zealand. There are

reports that a 17m wave came

ashore on the South Island but

didn't cause any damage. There

have been a number of small

waves and unusual currents record on Australia's east

coast. Shoot first and ask

questions later according to a

new report that was the Israeli

Army's policy in the recent

invasion of Gaza. The report

contradicts the country's

official version of events and

is based on. The testimonies of

soldiers on the battle front.

Israel was heavily

criticised during this war for

the number of civilian

casualties which the army said

it did its utmost to prevent.

But a new report quoting interviews with Israeli

soldiers who fought in Gaza is

telling a different story.

26 soldiers were

interviewed. Many are still

serving and can't be identified. But their

testimonies are clear. Their

instructions were to protect

their own lives at all costs. I

heard our brigade commander at

least once say this was war, no

consideration of civilian s was

to be taken. You shoot anyone

you see. And that means

shooting first and asking

questions later. The

instruction was explicit. If

you're not sure, kill. The

testimonies have been gathered

by a group of former Israeli

soldiers called 'Breaking The

Silence'. Even if you justify a

war, that doesn't mean you have

to justify all in it. There is

no specification of the names.

Soldiers, their ranks, whether

they were reservists or

regular, what areas, what

places did so-called incidents

take place? One soldier says

his commanding officer refused

to allow a warning shot to be

fired at a man walking towards

their position at night. That

man was then shot dead and

found to be unarmed. This war

had enormous support among

Israelis who were fed up after

years of rocket attacks out of

Gaza on their nearby towns and

cities. Boeth Israel and Hamas

have been criticised for their

actions during this war, but

it's the first time such

detailed criticism has come

from within. A one-time

interrogator at a notorious

Khmer Rouge torture prison has

broken down in tears while

recounting his role in the

deaths of up to 16,000 people.

76-year-old Mamnai was testifying at the United

Nations-backed trial of the

former head of the prison. He

was both victim and perpetrator

during the Khmer Rouge's

murderous reign from 1975 to

1979. His wife, brothers and

children were killed by the

regime. But he says he has

mixed feelings about his own

rule as a sbeenor

interrogator. I regret the

deaths of all the good people

and those who were not as good

but I have no regrets over the

deaths of the bad people. An

estimated 1.7 million people

Cambodians died of hunger,

disease or were executed before

the Khmer Rouge was toppled by

a Vietnamese invasion in 1979.

Mumnai denies using torture to

extract confessions from

prisoners. His ka commander at

the prison, Comrade Duch, is

the first senior Khmer Rouge

figure to face trial and the

only one to acknowledge

responsibility for his actions.

He urged his former subordinate

not to fear prosecution. Don't

be afraid. We have to be

accountable for the crimes

committed. Please don't be

afraid that you will die. I am

responsible for everything. All

the crimes committed at S21.

There has been another

shooting near pap weighs

Freeport Mine. Five Indonesian

police were injured as they

patroled a road where three

people were murdered earlier

this week, including Australian

Drew Grant. Indonesia has

denied police were responsible

for the murderses. The world's

largest greenhouse gas emitters the United States and China

have announced plans for a

joint clean energy research

centre. The $15 million project

is being seen as a compromise

between the two countries.

After years of fruitless

struggle to persuade China to

adopt a binding emissions

reduction tar get, it's becoming clear the United States may have to settle for

what it can get. The jointly

run clean energy research

centre is being seen as the

next best option. Both

countries say they're excited

to be working together on the

project despite their failure

to see eye to eye. It's always

a pleasure to be back in China

and to meet with dear friends

and I consider you both dear

friends. Since the new US administration took office,

China and the United States

have maintained close contact,

high-level visits and communications with each other.

We've been working together to

tackle all kinds of new

challenges we are facing in

this world. I believe we can

take this opportunity to

continue our friendly and

candid discussions. Washington

says China stands to reap

significant benefits bond much

needed improvements in

environmental conditions. The

Obama administration says if

China moves to adopt green

energy that will help create

jobs at a time global

need. We're committed to

transforming how we produce and

use energy. We're also

committed to working with China

to seize the huge opportunities

for cooperation on this issue

between our two nations. While

the US has been slow to join

international agreements to

tackle climate change, it says

China's moving quickly to

overtake it as biggest emitter

of greenhouse gases.

Indonesia's Finance Minister

says President Susilo Bambang

Yudhoyono should stick with

technocrats when choosing the

country's next Cabinet. The

President's massive election

victory means he may not have

to reward his political allies

with key government positions. Indonesia's Electoral

Commission is yet to officially

confirm hast week's re-election

of President Yudhoyono. But

already there is jockeying for

places in the next Cabinet. But

Indonesia's Finance Minister

says the President should

resist the urge to reward

political allies with key

economic posts. The economic

policy in Indonesia should be

maintained in terms of

maintaining the principle of

good policy, and this can be

expected through the people who

at least knows their area and

they're not inclined to

politicise matters. Economists

say infrastructure development,

job creation and bureaucratic

reform should be the top

priorities for a second

Yudhoyono term. But the

minister says there is a lot of

unfinished work right across

government. The next five years

are the challenge. It's because

the reform which is initiated

only on a few institutions for

example like minister of

finance should be extended

consistently to the other

institutions like the

Attorney-General's office, the

Police Department, military,

all the judicial system. The

Finance Minister was the star

of the first Yudhoyono government, where she was

credited with leading the

charge against corruption.

She's widely tipped to retain

her portfolio.

You're watching ABC News for

Australia Network. Our top

story - a Chinese newspaper has

revealed details of the

allegations against Australian

Rio Tinto executive Stern Hu,

citing widespread bribery

within the iron ore industry.

Let's check financial

markets now. On Wall Street,

the Dow and Nasdaq surged more

than 3% after a raft of

economic news suggesting that

the economy may be pulling out

of its deep recession.

Sport now. England

all-rounder Andrew Flintoff has

announced he will retire from

Test cricket after the current

Ashes series against Australia

as he tries to prolong his one

day and Twenty20 career. But

the 31-year-old remains hopeful

of lining up against Australia

today -- tonight, planning to take pain

killing injections for his

right knee. His career has been

plagued by injury. He has

missed hast of England's last

50 matches, hampered by

injuries from his shoulder all

the way to his ankle. The

latest was a knee-jerk. Excuse

the pun, it's not a knee-jerk

reaction. It's something I've

been thinking about for a

while. It's just the timing of

it. I'm seeing the surgeon on

Monday. I'm having jabs in it.

My body is telling me it's

time. He says the announcement

won't vim pact on his players'

preparation ahead of the second

Test. . From a players' point

of view, we probably felt it's

been coming for a while. So I

don't think the players are distracted by it. It's

obviously a bit more of a media

issue. While the Australian

captain paid tribute to

Flintoff, he questioned the

timing of his announcement. But

he says his focus is on getting

his team up for the next

match. Freight challenge for

international play dwrers is

being able to get up and go

within a short break in

between. Flintoff says he will

continue to play one day and

Twenty20 cricket. In golf,

17-year-old Japanese sensation

Ruy Ishikawa will tee off with

Tiger Woods. It's like a dream

come true. Ever since I got

into the British Open, it's

been like a dream. And in

cycling, Mark Cavendish

continued his domination of

sprint finishes at the Tour de

France, winning the 11th stage.

Rinaldo Nocentini retained the

yellow jersey, with Alberto

Contador and Lance Armstrong

close behind.

Now a look at how the weather is shaping up for us for

Thursday.

You've been watching ABC News for Australia Network.

Let's check again the top

stories. China's media reports

widespread bribe ery in the

iron ore industry in the

Australia China spy affair. A

passenger jet crashes in

north-western Iran calling all

168 people on board. And Australia's tsunami threat has

been cancelled but beaches are stilling some abnormal wave conditions. You can go to our

web site if you want more

information from the region.

I'm Bev O'Connor. Hope to see

you again soon. Bye-bye now.

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