The announcement he was restoring the parliament he dissolved four years previously was greeted enthusiastically by a seven-party opposition alliance who said Tuesday's planned protest would now become a victory rally.

Thousands took to the streets of the capital as soon as the king had completed his short, five-minute address shouting "Long live democracy!" and dancing within a few hundred metres (yards) of the king's palace.

The driver of a water truck heading into the city leaned out of the door and asked those celebrating "Have we got democracy?" and they shouted back "Yes!"

The move to restore parliament, a key demand of opposition parties leading the protests, would be effective from Friday, the king said.

"The session of the House of Representatives will take place on April 28," a nervous-looking King Gyanendra said.

"We call upon the seven-party (opposition) alliance to bear the responsibility of taking the nation on the path of national unity and prosperity while ensuring permanent peace and safe-guarding multi-party democracy."

The party of former prime minister Sher Bahadur Deuba, who was sacked in February 2005 after King Gyanendra accused his administration of corruption and failing to quell the Maoists, welcomed Monday's news.

"It's positive. Now the responsibility of a reinstated parliament and the political parties is to bring the Maoists into the mainstream of democracy and peace," said a spokesman for Deuba's Nepali Congress (Democratic) party.

The parliament was dissolved in May 2002 as it looked set to refuse the extension of a six-month state of emergency that gave the king sweeping powers to tackle the Maoist insurgency.

Maoists started their campaign in 1996 and have taken effective control of swathes of the countryside in a campaign that has left more than 12,500 people dead.

King Gyanendra's television appearance was his second in four days after he had earlier promised to return executive power to the people and asked the seven-party opposition alliance to recommend a prime minister.

The international community gave a qualified welcome to the move but it was snubbed by the opposition sidelined by his power grab in 2005, which said it did not go far enough to restrict his wide-ranging powers.

Hundreds of thousands of demonstrators, including all classes of society, continued to hit the streets after Friday's first national address to chant anti-monarchy slogans and burn effigies of the king.

The royal government responded with curfews and warned of a shoot-to-kill policy as clashes left at least 14 people dead since April 6. Hundreds were injured and even more arrested.

King Gyanendra expressed his condolences over the deaths of people during the street protests in Monday's address.

But he failed to mention the opposition's demand for a constituent assembly to try to limit the powers of the world's only Hindu monarch, setting the stage for further potential conflict.

US officials reacted warily Monday to the pledge by Nepal's king to restore parliament.

Washington was looking for signs that Gyanendra was ready to return to a ceremonial role in his Himalayan kingdom.

"This obviously is a step forward but does it go far enough?" a senior state department official said.

"There was a plume of smoke and people started running and screaming."

The interior ministry said the blasts ripped through the Ghazala supermarket and the Nelson and Aladdin restaurants in central Dahab, which lies on the southeast of the Sinai peninsula about 530 kilometres (330 miles) by road from Cairo.

"There was blood everywhere but the victims were evacuated very quickly," said Cecile Casey, a young French tourist who was spending a few days in Dahab.

Egyptian President Hosni Mubarak pledged that the perpetrators of the attacks would be punished, while US President George W. Bush condemned the bombings as a "heinous act".

Dahab, which means gold in Arabic, is popular with Western backpackers, budget Israeli tourists and was also packed with Egyptians enjoying a public holiday. It is renowned for its diving, snorkeling and windsurfing.

The bombings struck on Sham el-Nessim, a traditional holiday which marks the beginning of spring, and a day before Sinai Liberation Day, which celebrates Israel's withdrawal from the peninsula in 1982.

Belgian tourist Quentin d'Aspremont told AFP the blasts "took place at very short intervals, in the busiest part of town. The street was littered with debris and I could see pools of blood."

The streets of Dahab were immediately sealed off by police and Egyptian security sources said the border with Israel, which lies only around 100 miles north of Dahab, was closed to prevent the attackers from fleeing.

State television said the blasts appeared to have been the result of remote-controlled bombs, not suicide bombers.

The border between Egypt and Israel was sealed off to prevent any suspects from fleeing, an Egyptian security source said.

Israeli Defence Minister Shaul Mofaz offered to send army rescue teams and doctors, while hundreds of Israeli tourists were rushing home after the blasts.

A state of alert was declared at the main hospital in the Israeli border town of Eilat to handle any casualties sent for treatment there and to free up doctors for dispatch to the scene.

Some 20,000 Israeli holidaymakers were believed to have been in the Sinai at the time of the blasts despite repeated warnings from their government of the risks of attack by Islamic militants.

But public radio quoted Israeli ambassador in Cairo Shalom Cohen as saying he had been informed there were no immediate reports of Israeli casualties.

The resorts of Egypt's south Sinai peninsula have been repeatedly hit by Islamic militants in recent years.

Multiple bombings in the Red Sea resort of Sharm el-Sheikh at the tip of the Sinai killed some 70 people in July 2005, the deadliest to have hit Egypt since a major wave of Islamist terrorist attacks in the mid-1990s.

At least 34 people were killed in several simultaneous attacks in and around the resort of Taba further up the Red Sea coast in October 2004.

Four groups claimed the Sharm el-Sheikh bombings, including Al-Tawhid wal Jihad, an Islamist movement which said the attacks were revenge for the invasions of Iraq and
Afghanistan and out of allegiance to Osama bin Laden.

In April last year, two French tourists and an American were also killed and some 20 people wounded in a bomb attack in the Al-Azhar area of the Egyptian capital.

Seven people were wounded in an attack later the same month in Cairo's Abdel Moneim Riad Square, and two women assailants were killed in a failed attack on a tourist bus.

Four thieves -- also posing as police -- commandeered trucks carrying sheets of nickel near the northern city of Le Havre, once in January and again in March, taking the drivers captive and releasing them in the Paris area.

Investigators believe the thieves were drawn by the soaring prices currently fetched by both metals.

Nickel has jumped from 5,000 dollars per tonne in 2000 to highs of 19,000 dollars, while copper surged by 50 percent last year, driven partly by high demand from China.

Thousands of protesters are said to have gathered in Athens. Some 5,000 riot police have been deployed.

Television pictures showed protesters throwing petrol bombs and using sticks as riot police advanced, the air thick with tear gas.

The protesters were trying to reach the buildings where Condoleezza Rice is meeting Mr Karamanlis and her Greek counterpart, Foreign Minister Dora Bakoyianni, but many retreated under the police pressure, reports said.

Self-styled anarchists trailing the demonstrators continued fighting police, burning cars and smashing shop fronts, Reuters news agency reported, but there were no reports of injuries or arrests.

Police helicopters circled the city centre.

'War-mongering'

"We are not protesting just against Rice, but the imperialist, war-mongering US government," school teacher Panayiotis Hiundis told Reuters.

A senior figure from Greece's Communist Party accused Ms Rice of using the one-day visit to drum up support for an offensive against Iran, which the US accuses of trying to build a nuclear bomb.

Some 5,000 riot police were deployed for Ms Rice's visit

At least six people were detained on Monday after they managed to unfurl a giant banner reading "Condoleezza Rice go home" on the Athens concert hall, adjacent to the US embassy, the AP news agency reported.

The US war in Iraq has triggered strong opposition in Greece. In addition, say commentators, many Greeks are still bitter at Washington for backing the right-wing military junta which ruled Greece between 1967 and 1974.

Ms Rice told reporters accompanying her to Europe that she would discuss Balkan peacekeeping, the future of the divided island of Cyprus, and the threat of terrorist attacks along the Turkey-Iraq border.

But in her first reported public statements from Athens, Ms Rice said Iran was isolating itself from the international community by threatening to suspend co-operation with the UN nuclear watchdog, the IAEA, if sanctions are imposed.

She will leave for Ankara on Tuesday evening.

The date of Ms Rice's visit was changed to try to circumvent huge rallies against the wars in Iraq and Afghanistan which were planned to coincide with it.

Noisy anti-war protests marked a visit by Ms Rice to the north-west of the UK at the beginning of April.

Philippe de Villiers, the head of the right-wing Movement for France (MPF) party, made the contentious assertion in a book released last week titled 'The Mosques of Roissy'.

In it he rails against radical Islam in France and alleges that Islamic militants have found jobs among the airport's personnel in secure areas through which luggage and passengers transit.

Some of the luggage-handling firms contracted by the facility employ "predominantly Muslims and are organised on ethnic and religious criteria under a mafia-like system," he wrote.

Elaborating on his claims in a broadcast interview Sunday, Villiers said: "The presence of Islamic radicals is not marginal, it's real, deeply-rooted and dangerous."

Villiers, whose movement rallies Catholic and nationalistic tendencies in French politics, also confirmed he would be a candidate in next year's presidential elections. The last time he ran, in 1995, he scored less than five percent of the vote in the first of two rounds.

France's police intelligence and surveillance service, the Renseignements Généraux (RG), cast doubt on one document Villiers said it had produced to support his allegation and which he reproduced in his book.

RG chief Pascal Mailhos told the interior ministry, in a note quoted by Le Monde newspaper, that the document in Villier's book did not come from his service and that it contained "several flagrant inconsistencies".

Sud Aérien, a union at Roissy-Charles de Gaulle airport, said in a statement that "it's obvious we're dealing with a political stunt by a future candidate" in next year's elections.

It accused Villiers of trying to secure the far-right vote "by developing racist and paranoid themes on Islamic radicals".

"While the danger of a terrorist attack can't be ignored, the main danger for the unions is that this risk might be used as a pretext for ethnic discrimination and as a weapon against strikes," it said.

The head of the French Council of the Muslim Faith, Dalil Boubakeur, who is also rector at the mosque in Paris, said Villier's allegations created "an outrageous caricature" of Islam, and demanded that they be fully investigated.

The spokesman for the Socialist Party, Julien Dray, told a media conference that Villier's comments stigmatised the estimated five million Muslims living in France and said they were "not compatible" with the country's secular traditions.

Coincidentally, the furore over Villier's book blew up as the state-owned operator of Roissy and other airports around the capital, Aéroports de Paris, said Monday that it was preparing for privatisation if the government so orders.

The finance ministry said last Friday it would sell ADP shares in the coming months in an offering expected to raise up to EUR 1.5 billion.

China had planned to begin accumulating oil reserves, which are to be used in the event of an emergency, last year.

However with oil prices soaring to record high points -- New York crude matched its record high of 75.35 dollars per barrel on Monday -- China has been forced to delay its plan by almost two years.

China knows it cannot delay for ever with its energy demand accelerating owing to the country's economic boom. Consumption of oil in China is forecast to jump 6.0 percent this year after consumption of 6.4 million barrels per day in 2005.

"The Chinese authorities are quite familiar with how their domestic production is being outstripped by demand, and that there's always going to be a measure of vulnerability and reliance on foreign production," Global Insight analyst Steven Knell said.

"Having strategic reserves creates a buffer that will allow them to mitigate some of the sharper consequences of that reliance should there be any disruption of supply," he added.

The China-Saudi plan was raised during Hu's talks with King Abdullah on Saturday and both sides want to see it through, the Chinese official told AFP, requesting anonymity.

The reserve would be on top of the oil supplies Saudi Arabia exports to China for its daily needs.

Saudi Arabia is the world's biggest exporter of crude oil and the biggest supplier to China, which imports about 15 percent of its oil from the Arab nation.

Knell said he believed such a tie-up between the two countries would unlikely hurt major oil consumers such as the United States and Europe.

"Given the volume of this facility, I don't think it's going to make such a difference. It will come as a separate delivery, on top of the current demand, but the scale will not result in major shortages elsewhere or compromise other deliveries," he said.

"The most profound impact will be on the Chinese domestic market. This is another contribution to the reserve capacity that they've thought for some time and they've actually been vulnerable for so long that this makes a very positive step for the stability of their energy balance."

According to the Chinese spokesman, the reserve would be set up in a coastal city in southeast China.

The official did not say how much oil would eventually be stockpiled. But he said Riyadh and Beijing were discussing the feasibility of the plan and ways of cooperating to carry it out.

Calyon analyst Mike Wittner doubted also that there would be any major impact on global supplies, and therefore prices.

"I don't think it has any significance for the short-term market, and perhaps not even for the longer term," he said.

"Saudi Arabia is already a large and growing supplier of Chinese crude oil imports, and this is a logical development and a logical extension of that trend," he said.