Lebanon's Hezbollah leader Sayyed Hassan Nasrallah has agreed to a prisoner swap with Israel. He made the statement during a televised news conference in Beirut. Nasrallah said he expected the swap to take place around the middle of this month. Under the deal, which was approved by Israel on Sunday, the Iranian-backed Hezbollah will return two Israeli soldiers captured two years ago. They are believed to be dead. Nasrallah refused to provide any information on their condition. In return Israel will hand over five Lebanese prisoners, including the notorious multiple killer Samir Kuntar, as well as the remains of Hezbollah fighters buried in the Jewish state.

Israeli police have shot dead an Arab-Israeli bulldozer driver who went on a rampage with his vehicle on a busy Jerusalem street. Israeli police, who have described the incident as a terrorist attack, say the driver killed four people and injured 45 others. Traffic was halted as hundreds of people fled through the streets in panic. The Agence France Presse news agency says a little known group calling itself the Brigades of the Liberators of Galilee has claimed responsibility for the attack.

Zimbabwe's opposition leader Morgan Tsvangirai has rejected forming a government of national unity with President Robert Mugabe, saying it would not solve the country's crisis. Tsvangirai told reporters in Harare that his opposition Movement for Democratic Change should be recognised as the "legitimate government" of Zimbabwe. He added that any negotiations with Robert Mugabe's government had to be on the basis of March 29 elections. Tsvangirai defeated Mugabe in the presidential vote in March but failed to get the absolute majority needed to avoid a runoff on June 27. Mugabe won last week's vote after Tsvangirai dropped out due to violence against his supporters. Meanwhile a spokesman for the European Commission in Brussels has said that any transitional government must include Tsvangirai as prime minister or head of government.

Armed soldiers are patrolling the streets of Mongolia's capital amid a state of emergency issued after post-election violence that left at least five people dead and hundreds injured. The government has vowed to prevent further unrest after Tuesday's upheaval, when around 8,000 opposition supporters stormed through the centre of Ulan Bator and ransacked and torched the headquarters of the ruling Mongolian People's Revolutionary Party (MPRP). The opposition Democratic Party has accused the MPRP of manipulating Sunday's poll. According to latest results, the MPRP won 46 of the 76 parliamentary seats. Unconfirmed reports put the Democratic Party's showing at just 26 seats. The Election Commission said final results were expected to be available Wednesday.

Egypt has closed its border with the Gaza Strip after hundreds of Palestinians clashed with police. Security officials said that angry crowds, who had been waiting for hours to be allowed to pass through the Rafah crossing, swept through the checkpoint and entered Egyptian territory by force. Egyptian border guards used water cannons to disperse the Palestinians, who threw rocks at them. Egypt had opened the crossing on Tuesday to allow sick and injured Palestinians through, as well as those with residence or work permits for third countries. This was part of a truce agreed between Israel and the Palestinian militant group Hamas, which controls the Gaza Strip.

Chad's security minister Ahmat Mahamat Bachir says that government forces have killed over 60 disciples of a radical Muslim spiritual leader. The operation was launched after preacher Ahmat Ismael Bichara threatened a holy war in defence of the Islamic faith in the country. The government had said on Tuesday that 12 extremists and two members of the security forces were killed in Sunday's operation at Kouno, 300 km southeast of N'Djamena. Giving an updated toll to journalists on Wednesday, Bachir said that 63 extremists and four members of the security forces had died in the operation.

An explosion in a 12-storey building in the Russian city of Sochi has killed at least two people and injured nine others. Investigators said the blast, which destroyed four floors of the appartment building, may have been caused by an explosive device. The incident comes after a small explosive device detonated in Sochi last month, killing one person. The city is close to Russia's turbulent North Caucasus region that has been plagued by insurgencies against Moscow's rule. Sochi, a popular holiday resort on the Black Sea coast, is to host the 2014 Winter Olympics.

A senior Turkish general has called for calm following a series of arrests connected to a suspected coup plot. Police detained 21 people on Tuesday as part of a nationwide investigation into an ultra-nationalist group, suspected of planning violence to provoke a secular, military take-over. The arrested people include two senior generals among other prominent figures. The arrests come as Turkey's Islamic rooted governing party faces a court case that could see it banned. The country's chief prosecutor accuses the AK party of undermining Turkey's secular tradition and trying to introduce an Islamist state.

Britain's Home Office has moved to ban Hezbollah's military wing which stands accused of supporting terrorism in Iraq and the Palestinian territories. Home Office minister Tony McNulty said in a statement that the entire military section of the Shiite Lebanese movement would be listed as a proscribed group under British terrorism laws. He added that this meant that fundraising and encouraging support for the military wing of Hezbollah would constitute a criminal offence in Britain. The department said that Hezbollah's social and political work in Britain would be unaffected. The ban still requires parliamentary approval.

French police have detained a German former Airbus president in an insider trading probe at its parent company EADS. Gustav Humbert was taken into custody on Monday by financial investigators in Paris in connection with the probe of the aerospace and defence giant. French authorities have already filed preliminary charges against two former EADS executives. Investigators are looking at share sales at EADS before a June 2006 announcement of delays for Airbus' A380 superjumbo that sent shares of the company tumbling. The 58 year-old Humbert was Airbus president from June 2005 to July 2006.

The International Energy Agency is forecasting high oil prices for at least the next few years. In a new report, the IEA said demand was likely to outstrip supply beyond 2010, as it revised down its projections for production capacity. Oil industry chiefs, meeting at a summit in Madrid, have also spoken of an end of "cheap energy". Participants at the World Petroleum Congress were divided over the reasons for soaring oil prices, but agreed that easily accessed supplies were drying up at a time of growing demand from developing countries.