THE AMERICAS

U.S. Lowers Flag for Last Time in Panama

PANAMA CITY -- The Stars and Stripes was lowered at the Panama Canal for the last time yesterday as the United States ends more than 85 years of control over the American-built waterway.

As the sun set on what had long been an outpost of U.S. military and engineering might, the U.S. and Panamanian flags were lowered simultaneously.

Today, when Panama assumes full control over the canal, the Panamanian colors will be raised again, alone, in a ceremony expected to draw thousands of cheering Panamanians.

The decision to make yesterday the final lowering of the U.S. flag was apparently made at the last minute. The event originally had been planned for today.

THE MIDDLE EAST

Israel Releases 7 Palestinian Prisoners

JERUSALEM -- Israel released seven Palestinian security prisoners who live in east Jerusalem, despite initial concerns that this could be seen as Israeli acceptance of Palestinian political claims to the disputed sector.

The prisoner release was the fourth since Israel and the Palestinians signed their latest interim peace accord in September. In all, Israel has released 383 Palestinian prisoners held for anti-Israeli acts, but hundreds more remain in jail.

In southern Lebanon, meanwhile, a suicide bomber blew up a van near an Israeli army convoy, killing himself and wounding an Israeli soldier and 12 Lebanese civilians. It was the first suicide bombing in nearly four years in southern Lebanon, the last active Arab-Israeli battle front.

Turkey Rejects Ocalan's Final Appeal

ANKARA, Turkey -- A chief prosecutor refused to overturn the death sentence against Abdullah Ocalan, rejecting the Kurdish rebel leader's final appeal in Turkish courts. The appeal was the last legal move before the death sentence goes before parliament and later to the president for approval.

Ocalan's lawyers are also appealing the case at the European Court for Human Rights, based in Strasbourg, France. The European court has asked Turkey not to execute the rebel leader until it has reviewed the case.

EUROPE

Oil Company Offers to Help With French Spill

BREST, France -- The oil company TotalFina offered $6 million to help clean up a massive oil spill off France's western coast that leaked from a tanker the company hired.

Thierry Desmarest, chairman of the Franco-Belgian company, has been criticized for failing to contribute to efforts to clean the two-week-old spill. Desmarest announced the contribution following a meeting with Prime Minister Lionel Jospin in Paris.

The spill began when the tanker Erika split in two on Dec. 12 and sank, pouring 2.8 million gallons of oil into the Atlantic. The oil has begun to wash up on a wide stretch of coastal islands and beaches in western France.

Milosevic Says Montenegro Free to Secede

BELGRADE -- Trying to allay fears of a new Balkan war, Yugoslav President Slobodan Milosevic said that independence-minded Montenegro is free to leave the Yugoslav federation if its people vote to do so.

"If the people of Montenegro decide that a life outside Yugoslavia is better, then they have the right to choose such a life," Milosevic said in an interview on Serbian television. "But if the Montenegrin people decide that life within Yugoslavia is the optimal solution, then they should hold on to it."

The Yugoslav federation is composed of the republics of Montenegro and Serbia. Milosevic's statement came as a top Montenegrin official said that his government would organize a referendum next year to decide whether the republic should secede.

AFRICA

Ivory Coast Military Ruler Wins Support

ABIDJAN, Ivory Coast -- Ivory Coast's military ruler Robert Guei, who has been preaching national unity and ethnic harmony since a Christmas Eve coup, won the support of the former ruling party that had held sway since independence in 1960.

The news, announced by the Democratic Party leadership, provided a fresh boost for Guei, whose junta has restored a normal working atmosphere and has won broad acceptance from other segments of society.

Guei and the junta have announced no timetable for a return to civilian rule.

ASIA

Hundreds Killed in Indonesian Civil Strife

JAKARTA, Indonesia -- New ethnic and religious clashes erupted in Indonesia's Spice Islands, raising the death toll from almost a week of fighting to at least 328, military officials and residents said.

They said fighting between Muslims and Christians broke out on the distant island of Halmahera in the northern part of the region, while supporters of local royal families battled on the neighboring island of Tidore.

The violence followed similar clashes in Ambon, where at least 63 people were killed and more than 100 were injured this week.

Falun Gong Couple Tried in Secret

BEIJING -- A couple arrested in the crackdown on the spiritual movement Falun Gong have been tried in secret in the central Chinese city of Wuhan, a rights group reported. Wang Hansheng and his wife, Xu Xianglan, were charged with organizing and using a cult to undermine the law in their four-hour trial on Dec. 23 in the No. 1 Intermediate People's Court, which has not released a verdict, the Hong Kong-based Information Center for Human Rights and Democratic Movement in China reported.

More members of the group were detained in Tiananmen Square, where Falun Gong followers have been holding small, quiet protests that are quickly stopped by police. Officers led away three men who held up their arms in a meditation pose used by the group. Three other women were detained separately.

QUOTE OF THE DAY: "We are at ground zero here on the Mount of Olives." -- Bobby Bible, a Baptist minister waiting for the second coming of Jesus at the place he is said to have ascended to Heaven.