RABAT (Reuters) - Morocco said on Thursday it had lost confidence in the U.N. envoy to the contested Western Sahara territory, in the latest in a long series of setbacks in efforts to settle a decades-old dispute over the region's status. Rabat accused envoy Christopher Ross of giving "biased and unbalanced guidance" and criticized a U.N. report, published last month, which had suggested Morocco may have been spying on the world body's monitoring force. The government statement carried by the official MAP news agency did not say whether Rabat would now refuse to work with Ross. ...

DUBAI (Reuters) - Iran's parliament on Thursday approved President Mahmoud Ahmadinejad's $462 billion annual budget, the official IRNA news agency reported, a drop in real terms from last year as international sanctions took their toll. Iran's currency has lost much of its value in recent months due to sanctions designed to curb the Islamic Republic's nuclear program, which the West suspects is a cover for making atomic bombs, a charge Tehran denies. ...

Cuban first daughter Mariela Castro has been granted a U.S. visa to attend events in San Francisco and New York, one of her associates confirmed Thursday. The travel permission sparked a firestorm of criticism from Cuban-American politicians who say she is an enemy of democracy and a shill for the Communist government her family has led for decades.

PARIS (Reuters) - France's new left-wing government started work on Thursday with pledges to combat excessive austerity but better manage public finances, marking the debut with a 30 percent cut in pay for President Francois Hollande and all ministers. The sizeable wage reduction was endorsed at a first meeting of the 34-minister team, a day after Germany's government awarded rises to its ministers and Chancellor Angela Merkel, whose pay will overtake Hollande's. ...

THIMPHU, Bhutan (Reuters) - They say you can't buy happiness - and it's something Bhutan is finding out the hard way. The tiny, mostly-Buddhist Himalayan kingdom won a world voice for adopting a happiness index to measure its economy. But its prime minister says it promptly forgot its own lesson, and let a sudden rush of prosperity go to its head. "Wealth creates increased desire," Prime Minister Jigmi Thinley told Reuters in an interview in the capital Thimphu, surrounded by tree covered mountains dotted with prayer flags. "There are families with four or five cars. ...

Syria's main opposition council is crumbling under the weight of infighting and divisions over issues that cut to the heart of the revolution, including accusations that the movement is becoming as autocratic as the regime it wants to drive out.

MADRID (Reuters) - Spain's borrowing costs shot up at a bond auction on Thursday, after economic data confirmed the country is back in recession and reports of an outflow of deposits from nationalized Bankia hammered its share price. The Spanish Treasury had to pay around 5 percent to attract buyers of three- and four-year bonds. The longer-dated paper sold with a yield of 5.106 percent, way above the 3.374 percent the last time it was auctioned. "This ... ...

The U.S. has plans in place to attack Iran if necessary to prevent it from developing nuclear weapons, Washington's envoy to Israel said, days ahead of a crucial round of nuclear talks with Tehran.

An Egyptian security official says vice police have arrested the owner of a TV station that broadcasts belly dancing 24 hours a day for allegedly operating without a license, inciting licentiousness and facilitating prostitution.

An apparent clerical error prompted judges to postpone the long-awaited war crimes trial of former Bosnian Serb military leader Ratko Mladic on Thursday, possibly for months.

Twirling her leopard-print dress on stage in the '70s, proudly holding many of her music awards and performing in recent years on "American Idol", Donna Summer was the ultimate disco queen

CARACAS (Reuters) - Shots rang out and smoke rose over a Caracas jail on Thursday in the latest outbreak of violence in one of Venezuela's notoriously violent and overcrowded jails. Authorities are trying to close the chaotic La Planta facility, built in 1964 to house 350 inmates, which now houses nearly 2,500, many armed with heavy weapons. Prisoners have, however, been resisting closure for weeks, leading to a virtual siege with security forces ringing the jail. Wailing relatives are also camped outside. "The police haven't told us anything. ...

WASHINGTON (Reuters) - The Pentagon will seek to provide Israel with an additional $70 million in the coming months for its short-range rocket shield, known as the "Iron Dome," U.S. Defense Secretary Leon Panetta said after a meeting with his Israeli counterpart on Thursday. So far, the United States has provided $205 million to support the Iron Dome, manufactured by Israel's state-owned Raphael Advanced Defense Systems Ltd. The system uses small radar-guided missiles to blow up in midair Katyusha-style rockets with ranges of 5 km (3 miles) to 70 km (45 miles), as well as mortar bombs. ...

South Africa's governing party said Thursday it will demand the removal of a painting from an exhibition by one of the nation's best-known artists that ridicules the party and the president with graphic and provocative imagery.

The head of Syria's main opposition council offered to resign Thursday after some members threatened to pull out of the umbrella group amid rampant infighting, striking a blow to efforts to present a united front against President Bashar Assad.

ABUJA (Reuters) - Nigerian authorities found improvised bombs in two primary schools in the northern city of Kano on Thursday, hours after the schools were attacked using explosives and gunfire by suspected militants from Islamist sect Boko Haram. Boko Haram is waging an insurgency against Nigeria's government to try to impose stricter sharia (Islamic law) across Nigeria. It mostly targets authority figures and security forces, but has also struck civilians such as Christian worshippers. It has become the top security threat in Africa's leading energy producer. ...

An unexploded bomb sticks out of the earth. Foxholes have been dug by aid workers fearing more airstrikes from Sudan. Streams of hungry refugees are pouring in.

Tanned and toned athletes in eye-popping outfits will compete for Olympic medals outside the British prime minister's famous Downing Street home, but it's government workers, not the U.K. leader, who will get the VIP view.

DUBAI (Reuters) - Saudi Arabia's thrust for a Gulf Union, driven by fear of Arab Spring contagion and spreading Iranian influence, has stumbled on misgivings among smaller neighbors about a loss of sovereignty and increasing domination by Riyadh. Gulf diplomats, officials and analysts expressed surprise that Saudi Arabia had opened itself up to such a public setback. The union proposal, initially designed to contain Shi'ite Muslim dissent in Bahrain and counter the growing sway of Shi'ite Iran, surprised Gulf Arab leaders when King Abdullah first unveiled it at a summit in December. ...

JERUSALEM (Reuters) - A private door opens from Israeli Prime Minister Benjamin Netanyahu's office in central Jerusalem directly into a long, modestly furnished, half-paneled room decorated with modern paintings by Israeli artists and a copy of Israel's 1948 declaration of independence. It contains little more than a long wooden table, brown leather chairs and a single old-fashioned white projector screen. ...