Midterm Election Shifts

Balance of Power to GOP

President Bush's show of strength in Tuesday's election shook up Washington -- shifting the balance of power, resetting the legislative agenda and ending the eight-year reign of House Minority Leader Richard A. Gephardt (D-Mo.).

Gephardt announced that he will not seek another term as party leader. Elected in the aftermath of the Republican takeover of the House in 1994, Gephardt steadily chipped away at the GOP's margin until he seemed in striking distance of becoming speaker. Instead, his party lost seats in the House as control of the Senate slipped away. Rep. Nancy Pelosi (D-Calif.), now No. 2 in the House Democratic leadership, appears poised to succeed Gephardt.

Fueled by the fundraising prowess and vigorous campaigning of the president, Republicans captured the Senate with at least 51 seats -- one seat, in Louisiana, will not be decided until a Dec. 7 runoff. The GOP added at least four seats to its majority in the House. Republicans also thwarted Democratic hopes of gaining a majority among the nation's governors.

Gephardt's move rings the opening bell on the 2004 presidential campaign. Gephardt and Senate Minority Leader Thomas A. Daschle (D-S.D.) have both been seen as formidable candidates for the nomination. But now a leadership position may be more of an impediment than an advantage.

It was clear that Bush's congressional agenda is suddenly very much alive -- and some of it might even pass in the upcoming lame-duck session. New tax cuts will be on the table, the creation of a Cabinet-level homeland security agency is unstuck, and prospects rose for a targeted prescription drug benefit -- on a much smaller scale than the Democrats favor.

-- David Von Drehle

Sharon Dissolves Parliament;

Israel to Hold Election Jan. 28

Prime Minister Ariel Sharon dissolved Israel's parliament and called for early elections, halting efforts to form a government with right-wing allies to replace his collapsed national unity coalition.

Sharon's decision ended a week of political haggling that began when the Labor Party resigned Oct. 30 from his broad alliance, ostensibly over budget allocations. He tried to lure smaller ultranationalist and Orthodox Jewish parties to join his Likud Party in a narrow-based government. But Sharon said those parties made "unacceptable" demands that amounted to "blackmail" and "extortion," leaving him six votes shy of a majority in the 120-member parliament.

Analysts said it was unlikely any progress could be made in resolving the Palestinian-Israeli conflict during an Israeli election campaign. Contacts between the Israeli government and Yasser Arafat's Palestinian Authority will likely be reduced, providing an opportunity for tension to rise and violence to continue.

"The competition between [former prime minister Binyamin] Netanyahu and Sharon will translate into more Palestinian blood, more occupation and more incursions, " said Saeb Erekat, the Palestinians' minister for local government and chief negotiator.

The vote will be held Jan. 28. In the meantime, Sharon will head a caretaker government.

-- John Ward Anderson

Under Pressure, Pitt

Resigns as SEC Head

Harvey L. Pitt, who aspired his entire professional life to head the Securities and Exchange Commission, resigned from the job under pressure from the White House.

In a letter to President Bush Tuesday, Pitt said that "the turmoil surrounding my chairmanship" was making it difficult for him to do its job. It was the end of a short, tumultuous tenure for Pitt, whom one Democratic senator acclaimed during his confirmation hearing last year as the "Zeus" of his field.

For the Bush administration, which had stood by Pitt through past controversies, the last straw was Pitt's handling of the appointment of former FBI and CIA director William H. Webster to head a new board mandated by Congress to clean up the accounting industry.

Pitt failed to tell fellow commissioners or the White House that Webster chaired the audit committee of a firm with accounting problems, embarrassing White House Chief of Staff Andrew H. Card Jr., who urged Webster to accept the job.

Appointment of the oversight board was one of the SEC's most important tasks in years, meant to restore investors' trust in corporate financial reports after a series of accounting scandals at companies such as Enron and WorldCom.

-- David S. Hilzenrath and Mike Allen

CIA Missile Strike in Yemen

Kills an Al Qaeda Leader

A missile fired by a U.S. Predator drone over Yemen killed six suspected al Qaeda terrorists in a vehicle about 100 miles east of the nation's capital, the first time the United States has used the unmanned weapon outside Afghanistan, sources familiar with the action said.

A senior administration official said Yemeni defense officials had identified one of the men killed as Abu Ali al-Harithi, a senior al Qaeda leader and one of the terrorist network's top figures in Yemen. Al-Harithi is one of the suspected planners of the October 2000 attack on the USS Cole, which killed 17 sailors in the Yemeni harbor of Aden. In addition, Kamal Derwish, the alleged ringleader of a terrorist sleeper cell on Lackawanna, N.Y., was also killed in the attack.

The attack marks a new stage in Washington's war on terror and a step up in U.S. assistance for President Ali Abdallah Salih's fight against terrorists who have taken refuge in mountainous Yemen. U.S. sources said the attack was carried out with the cooperation and approval of the government of Yemen.

-- Walter Pincus

Islamist Party Will Govern

Turkey After Election Victory

A party with roots in political Islam won a decisive victory in Turkey's national election, presenting a possible challenge to a long secular tradition in a key strategic ally of the United States that Washington holds up as a democratic example to the Muslim world.

The Justice and Development Party, known by the Turkish initials AKP, drew more than one-third of the vote, a plurality that would allow it to govern without a partner. The only other contender assured of winning seats in the Turkish parliament was the Republican People's Party, created by Kemal Ataturk, who founded the modern Turkish state. Turkey, which straddles Europe and Asia, has looked to the West since it was founded in 1923. As a member of NATO, it was a crucial U.S. ally in the Cold War, and it would be asked to play a key role in any new military campaign against neighboring Iraq.

Yet the meddling role the military has played in politics, especially against religious parties, has damaged Turkey's dimming prospects for membership in the European Union, an effort the country has pursued with increasing vigor.

AKP capitalized on public outrage over the economy, analysts said. Throughout the two-month campaign, it presented an image of moderation and responsibility, and sought to distance itself from a boldly pro-Islamic government that was forced from power in 1997, largely by the senior officers that Turkey's constitution designates as guardians of Ataturk's vision.

-- Karl Vick

U.S. Review Finds 4 Nations

Have Covert Smallpox Stocks

A Bush administration intelligence review has concluded that four nations -- including Iraq and North Korea -- possess covert stocks of the smallpox pathogen, said two officials who received classified briefings.

Documents captured in Afghanistan and elsewhere, they said, also disclosed that Osama bin Laden devoted money and personnel to pursue smallpox, although an official said there is "no reason" to believe he obtained any.

These assessments, though unrelated, have helped drive the U.S. government to the brink of a mass vaccination campaign that would be among the costliest steps, financially and politically, in a year-long effort to safeguard the U.S. homeland. Public health authorities project that the vaccine itself, widely administered, could cause 300 or more deaths.

President Bush must resolve a deadlock among his advisers. Vice President Cheney is said to be pressing for rapid, universal inoculation, while Health and Human Services Secretary Tommy G. Thompson prefers a voluntary program that would be delayed at least two years for an improved vaccine.

-- Barton Gellman