Prodi, a former European Commission president, said the move was intended to show the opposition that his coalition was still open to negotiations.

Berlusconi had asked his allies to block Prodi's candidate Giorgio Napolitano, an 80-year-old senator for life and former parliament speaker.

Berlusconi's allies said Napolitano was too left-wing for the job.

"Giorgio Napolitano is an excellent candidate, and we will vote for him when the conditions will be present to elect him president. We hope that the centre-right will join their votes to ours to elect him," said Piero Fassino, secretary of the Democrats of the Left (DS) party, after the vote.

"We will see what happens tomorrow (Tuesday) and we'll decide afterwards," Fassino said.

Voting in a second round was due to start at 11:30 am (1030 GMT) on Tuesday.

More than 1,000 deputies, senators and representatives of Italy's 20 regional assemblies voted in the first round.

A two-thirds majority of 674 would have been necessary to elect a president.

More than 150 voters ignored voting orders and gave their support to people who were not on voting lists. Berlusconi received two votes and his friend, lawmaker and lawyer Cesare Previti, in prison for corrupting magistrates, received three votes.

Prodi, who under Italy's constitution cannot form a government until a new president is elected to succeed the retiring Carlo Azeglio Ciampi, may be forced to wait until a fourth round on Wednesday to ensure that his candidate, or a compromise nominee, is elected when voting is decided by a simple majority.

Napolitano emerged as Prodi's compromise candidate late Sunday after a frenzied round of party meetings designed to break a days-long deadlock.

Prodi had to drop his preferred choice, 57-year-old Massimo D'Alema, from DS, after objections from the centre-right over his communist past.

D'Alema, who is instead likely to be given a cabinet post, gave Napolitano his backing.

"Giorgio Napolitano went in a cardinal and I believe he will emerge as pope," he told Italy's Canale 5 television.

Napolitano also comes from the DS, the largest party in Prodi's coalition, a motley collection of parties ranging from Catholics to communists, which has been pressurising Prodi for a major post.

The choice of president must be a widely respected figure seen to be above party politics, such as the 85-year-old Ciampi, seen by many Italians as a grandfather of the nation. The need for Prodi to win consensus is vital, particularly as his coalition's narrow election victory split the country in two.

Berlusconi has accused the left of seeking to "occupy" the main institutional posts, having already used their tiny majority to elect left-wing speakers to both houses of parliament.

Instead, the centre-right has proposed that Prodi's coalition provide a list of four candidates, former prime ministers Giuliano Amato and Lamberto Dini, the newly elected Senate speaker Franco Marini and former EU Commissioner Mario Monti.

All have been spoken of as likely consensus candidates who may come to the fore as the voting process goes on.

"To state a timetable now would simply paralyse the proper working of government, put at risk the necessary changes we're making for Britain and therefore damage the country," said the 53-year-old leader.

Blair announced after Labour's third election victory in May last year that he would serve a full third term in office but not run for a fourth when the next general election takes place, before May 2010.

But poor local election results last week, after a series of politically damaging ministerial mishaps and failings, revived pressure within the party for a timetable for his departure and a transition of power to Brown.

The prime minister retorted that setting out an exit date now would be exploited by leftists seeking to turn the tide against reforms undertaken by a party he had steered toward the centre with massive electoral success.

"That way lies not a fourth-term victory but a defeat and a return to opposition, and I will fight that all the way," he said.

He confirmed Brown was his top choice to succeed him and said he would tell Labour parliamentary colleagues later Monday that he would honour pledges to ensure a "stable and orderly transition to a new leader".

He also said he would stay on to fulfill his election mandate for reform of healthcare, pensions, schools and justice.

Critics claim Labour is distracted by the looming change in leadership, with members either still supporting Blair or lining up behind Brown.

Labour members say Blair will face colleagues at Monday's meeting who are angry at his "ruthless" cabinet reshuffle in the wake of Thursday's municipal council results, Labour's worst since it took power in 1997.

The reshuffle saw the prime minister sack his home secretary, demote his foreign secretary, take powers off his deputy prime minister and juggle other key top posts.

Blair admitted the furore surrounding axed home secretary Charles Clarke -- whose department failed to deport hundreds of foreign prisoners once they were released -- had caused "significant damage" to the party in the polls.

Analysts say Blair swung the cabinet axe to demonstrate his authority, put the scandals of recent weeks behind him and give new purpose to his party, but the moves failed to quell calls for a clear handover of power.

Some 50 rebels have now signed up to a draft letter demanding a timetable for a "dignified, orderly and efficient" leadership transition to be set out by July.

A BBC radio survey of 104 Labour backbenchers found 52 who believed Blair should stand down within a year.

Calls on Blair to resign also came Monday from David Cameron, leader of the main opposition Conservatives who scored well ahead of Labour in Thursday's English council elections.

"I think the sooner he goes the better, because I don't see how his authority can recover," Cameron said.

As to his eventual successor, Blair said there was no doubt Brown as prime minister would continue the reform programme and Britain's close alliance with the United States.

"I believe that those people who maybe feel or hope that Gordon would take the Labour Party in a different direction from New Labour are -- on the basis of the discussions that I have had with Gordon -- completely mistaken," Blair said.

Paris newspapers all carried speculation that Chirac could nominate Villepin's arch-rival - Interior Minister and ruling Union for a Popular Movement (UMP) chief Nicolas Sarkozy - to replace him if the political damage from the Clearstream scandal gets any worse.

Sarkozy, 51, who is the leading right-wing candidate for next year's presidential elections, was said by colleagues to be reluctant to take on what is widely seen as the poisoned chalice of French politics, but might feel duty-bound to accept the prime minister's job if he was offered it.

Patrick Devedjian, a UMP deputy who is close to the interior minister, said Monday that Sarkozy would only agree to take on the post if he was allowed a free hand to carry out his own radical platform of reforms.

"Nicolas Sarkozy will have to implement his own project, in a way bringing forward the 'rupture' which he envisages for 2007 if he is elected president of the Republic," Devedjian told Le Monde newspaper.

A complex and sordid story of bogus corruption claims directed at Sarkozy as well as other French personalities, the Clearstream affair has cast the government into disarray at the start of Chirac's last year in office - offering an unhoped-for boon for the opposition Socialist Party (PS).

Last week the prime minister was forced onto the defensive over the leaked testimony of a senior intelligence official, who said that in January 2004 Villepin - then foreign minister - ordered him to conduct a secret enquiry into a list of alleged account-holders at the Clearstream bank in Luxembourg.

Sarkozy - whose name was on the list - believes he was the victim of a campaign to blacken his name ahead of the 2007 presidential race. His entourage suspects Villepin - if not of starting the false allegations - at least of exploiting them for his own ends.

Last week the government's internal divisions widened further when Defence Minister Michèle Alliot-Marie said she too was targeted in the Clearstream affair, because her partner UMP deputy Patrick Ollier was also on the fake list of account-holders.

Villepin has said repeatedly in interviews and before parliament that he did not order any enquiry into named account-holders, but his denials have failed to still the criticism - with even the generally pro-government newspaper Le Figaro last week accusing him of lying.

With Villepin's popularity rating falling to just 20 percent - the second lowest for a prime minister in the Fifth Republic - Chirac was reported by Le Monde at the weekend to have called in Sarkozy to discuss his possible nomination to the prime ministership.

But the Elysée palace then stepped in to scotch rumours of an imminent cabinet shake-up, saying the president has "complete and total confidence" in Villepin.

Le Monde newspaper reported Monday that Chirac would keep Villepin in office as long as the allegations do not come closer to the president himself - but that he is preparing his options in case the scandal escalates.

According to General Philippe Rondot - the intelligence official at the heart of the affair - Villepin told him in 2004 that his instructions to set up a secret enquiry came from Chirac himself. This was denied last week by the prime minister.

Much depended on any new developments in the investigation by two judges trying to find the source of the original fake claims. They are due to speak to Sarkozy later in the week.

"It is a genie that is not going to be put back in the bottle," said Peter Hakim, head of the Inter-American Dialogue, a Washington-based think tank.

It was Brazil, Argentina and Venezuela that held an emergency summit with Morales to manage the aftershocks from his decision to send troops to gas fields, alarming investors, rattling markets and angering foreign governments.

The U.S. public response to the nationalization was merely for spokesmen to cautiously express concern over the potential economic impact.

That belied the importance for Washington of Morales' decree to take over the oil and gas industries, giving government energy company YPFB control over production and the state a 51-percent stake in several foreign companies.

"The socialism championed by him and Chavez is an increasing threat to the United States and its economic model that has dominated for decades. That's what's at stake here," said Larry Birns of the Council on Hemispheric Affairs think tank.

"But with the U.S. under-reaction, you'd think the United States is condemned to be an observer," he said.

"GO ITS OWN WAY"

Unable to forge region-wide support for its policies, the superpower and region's traditional patron will have to depend more and more on bilateral cooperation, such as the free-trade deals it has been hammering out in recent years, analysts say.

"U.S. influence in the region now has to be on a country-by-country, issue-by-issue basis," Hakim said.

That is a stark contrast from the United States that launched the Summit of the Americas in 1994 to spread its free-trade agenda, hoping for an accord for the whole hemisphere.

Latin America will keep trading with its closest economic partner but it will seek increasing independence from the United States by deepening its relations with Europe, China and countries across the developing world, according to Birns.

"Latin America will go its own way," he said.

After the September 11 attacks, President George W. Bush turned his focus to fighting terrorism in the Islamic world -- and away from Latin America, which he had vowed to make a priority of his presidency.

That neglect meant last year -- for the first time -- the U.S.-backed candidate failed to win selection as head of the Organization of American States, the hemisphere's top diplomatic body.

Some Bush supporters want a renewed focus on the region to counter the anti-American sentiment fueled by leftists like Morales, who vowed to be a U.S. nightmare in his election campaign last year.

"Sad to say, it may already be too late for the Bush administration to garner favorable public support from South and Central Americans," Andy Messing of the National Defense Council Foundation wrote in the Washington Times newspaper.

"But laying the groundwork now could be a necessary and worthy effort to be carried over to future administrations," he added.

So the choice for the opposition is simple. If they don't want a referendum that would end presidential term limits, they shouldn't pull out of the upcoming presidential election. As far as I'm concerned, the threat of a referendum is a perfectly reasonable (and democratic) way to dissuade the opposition from trying to delegitimize Venezuela's electoral process.

When Venezuela's opposition knows it's going to lose an election, it has a tendency to try to delegitimize the electoral process. Instead of facing up to the fact that it is unpopular, the business-led opposition tries to shift the blame for its electoral misfortunes to the National Electoral Council (CNE). The opposition claims that the CNE could commit "fraud" and that the vote might not be secret. Opposition conspiracy theories of this nature are legion. Never mind that there have been international observers on hand that have testified to the fairness of Venezuela's elections. Never mind that even the opposition's own polls show that Chavez is much more popular than they are.

In other words, many members of the opposition aren't really interested in trying to win elections because they know that they lack popular support. Many in the opposition prefer, instead, to try to create the impression internationally that Venezuela's electoral process is illegitimate.

One has to understand that, given the combination of the opposition's economic interests and political incompetence, it is very desperate. Since it is unable to attract popular support domestically, the opposition resorts to attempts to draw more U.S. hostility toward Chavez in hopes that such hostility might somehow weaken or destroy his presidency. Electoral boycotts are part and parcel of this strategy. The opposition wants to create the (false) impression internationally that Venezuela is another Ukraine and that Chavez wins elections by "fraud," etc. etc. That's what Chavez is up against.

OAS General Secretary Jose Miguel Insulza effectively summed up the problem that Chavez faces when he said the following about the opposition's boycott of legislative elections last December:

"We had a problem with the Venezuelan opposition, which assured us that they would not withdraw from the [electoral] process if certain conditions were met. These were met and, despite this, they withdrew."

Insulza continued, "if the path of abstention is chosen, then one cannot complain that the entire parliament is in the hands of one's political adversary."

"This is a major blow to the terrorist group," el-Sheik said.

The Interior Ministry congratulated the police in a statement that described el-Mallahi as "the mastermind and leader of the group that carried out the Dahab and el-Gorah explosions," the semi-official Middle East News Agency reported.

Three bombs exploded almost simultaneously in the Red Sea resort of Dahab on April 24, killing 21 people. Two days later, suicide bombers attacked vehicles of the Egyptian police and an international peacekeeping force in el-Gorah, in the north Sinai, killing only themselves.

El-Mallahi, a 30-year-old father of three, led a group that also had been accused of carrying out attacks that killed 34 people in the Sinai resorts of Taba and Ras Shitan in October 2004 and one in Sharm el-Sheik that killed 64 people in July 2005.

The killing of el-Mallahi came a day after Israel warned its citizens to stay away from the Sinai Peninsula, a popular destination, because of an "increased threat of kidnapping of Israeli citizens on the Sinai coast."

El-Sheik said security forces surrounded the grove south of El-Arish, a Mediterranean coastal city near the border with the Gaza Strip, after receiving a tip that el-Mallahi and his accomplice were hiding there. Bedouin scouts also had reported that the two suspects' tracks led into the grove.

The battle lasted a little over 30 minutes. El-Sheik said the accomplice, Mohammed Abdullah Abu Grair, was captured after running out of ammunition. He was not wounded.

Police found automatic rifles and hand grenades that failed to detonate.

Hundreds of security officers celebrated in front of security police headquarters, chanting "Allahu Akbar!" or "God is Great!"

Egyptian authorities, apparently concerned about damaging the vital tourism industry, which earned $6.4 billion last year, have said the Sinai attacks were the work of local groups with no ties to outside terrorist organizations.

But foreign experts say the various terrorist groups operating around the Islamic world under the name Monotheism and Jihad are likely to have links to the international al-Qaida network.

The precise nature of the links is not clear.

The leader of the Iraqi version of Monotheism and Jihad, Abu Musab al-Zarqawi, changed the name of his group to al-Qaida in Iraq after swearing allegiance to Osama bin Laden. However, he is not believed to carry out attacks on the specific orders of bin Laden. The same is believed to be the case with other, less well-known groups, such as Monotheism and Jihad in Egypt.

Canada's deployment of 2,300 soldiers to Afghanistan simply "frees up more soldiers to be in Iraq," Ms. Sheehan said.

Ms. Sheehan and Canadian activists from the Council of Canadians and the War Resisters Support Campaign also called on Prime Minister Stephen Harper to "open the border" to U.S. military deserters.

"I believe our war resisters are legitimate refugees," Ms. Sheehan said.

Ms. Sheehan, whose son, Specialist Casey Sheehan, was killed in Iraq in April, 2004, gained prominence last year when she camped for days outside Mr. Bush's Crawford, Tex., ranch, demanding answers for the war.

Yesterday, she added her fame to the so-far unsuccessful efforts of Canadian peace activists to persuade the federal government to grant refugee claims by U.S. military deserters who don't want to serve in Iraq.

Last month, the Federal Court of Canada ruled against two U.S. Army deserters who had appealed for refugee status in Canada on the grounds that they might be jailed if they return to the United States.

The court ruled that prosecution in U.S. courts does not amount to persecution. Immigration and Refugee Board decisions had earlier rejected requests for political asylum from Jeremy Hinzman and Brandon Hughey.

Speaking alongside Ms. Sheehan at yesterday's media briefing, War Resisters organizer Michelle Robidoux said about 20 more soldiers have since fled to Canada. "We estimate there may be several hundred more who are living clandestinely in Canada," she said. "This is an echo of what happened during the Vietnam War."

The activists conceded that current war resisters are different from those in the Vietnam era because they volunteered to serve, rather than being drafted.

However, Ms. Sheehan said, the soldiers are within their rights to desert because many are "lied to" by U.S. military recruiters who tell them they won't have to fight in Iraq. "My son was an honourable, honest person lied to by his recruiter," she said.