Bush added that the disclosure of the program "makes it harder to win this war on terror."

The comments were slightly less accusatory than those Sunday from chairman Peter King, a Republican congressman from New York.

"We're at war, and for the Times to release information about secret operations and methods is treasonous," King told the Associated Press.

King said he would write U.S. Attorney General Alberto Gonzales urging him to begin a prosecution.

While the Wall Street Journal and Los Angeles Times also ran stories about the program, King said he is targeting the New York Times because the paper in December also disclosed a secret domestic wiretapping program.

New York Times executive editor Bill Keller wrote in a letter on the newspaper's website Sunday that the decision to publish came after weeks of discussion with administration officials and that the paper didn't feel the program would be jeopardized.

The Times' editors, Keller wrote, "remain convinced that the administration's extraordinary access to this vast repository of international financial data, however carefully targeted use of it may be, is a matter of public interest."

Earlier this month, King seized on the anti-terrorism arrests of 17 men in an alleged bomb threat in the Toronto area to raise concern of the possibility of an attack in the U.S. spawned in Canada.

"Americans should be very concerned," King said at the time. "Canada is our northern neighbour and there is a large al-Qaeda presence in Canada.

"I think there is a disproportionate number of al-Qaeda in Canada because of their very liberal immigration laws, because of how political asylum is granted so easily."

King is one of several politicians to seize on the revelations reported last week.

It was revealed that since late 2001 the CIA and the U.S. Treasury Department examined financial records from an international banking co-operative known as Swift (The Society for Worldwide Interbank Financial Telecommunication).

Swift captures information on millions of wire transfers and other methods of moving money in and out of the country each day.

The service generally does not detect private, individual transactions in the United States, such as withdrawals from an ABM or bank deposits.

"Congress was briefed and what we did was fully authorized under the law," Bush said on Monday.

Democrats and civil libertarians have questioned whether the program violated privacy rights.

Bush denied overstepping his bounds by not seeking court or congressional approval for the program in the nearly five years since it was established following the attacks of Sept. 11, 2001. "What we were doing was the right thing," he said. "Congress was aware of it, and we were within the law to do so."

Critics said Bush was trying to divert attention from his own actions. Bush, Cheney and other Republicans "have adopted a shoot-the-messenger strategy by attacking the newspaper that revealed the existence of the secret bank surveillance program rather than answering the disturbing questions that those reports raise about possible violations of the U.S. Constitution and U.S. privacy laws," said Rep. Edward J. Markey (D-Mass.).

Under the program, U.S. officials tapped records of the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, an international banking cooperative owned by nearly 8,000 banks in more than 20 countries. The Treasury Department used administrative subpoenas that do not involve a judge to search for terrorist transactions and hired Booz Allen Hamilton Inc. to verify that the data were properly handled.

The New York Times, Los Angeles Times and Wall Street Journal first reported the program on their Web sites Thursday night. The Washington Post confirmed the story and reported it in its Friday editions. But the New York Times was the focus of White House ire because it led the way in investigating and because it disclosed the National Security Agency telephone surveillance program last year.

"Some of the press, in particular the New York Times, have made the job of defending against further terrorist attacks more difficult by insisting on publishing detailed information about vital national security programs," Cheney said at a Republican fundraiser in Nebraska.

Referring to the NSA program, he added: "What is doubly disturbing for me is that not only have they gone forward with these stories, but they've been rewarded for it, for example, in the case of the terrorist surveillance program, by being awarded the Pulitzer Prize for outstanding journalism. I think that is a disgrace."

Neither Bush nor Cheney raised the prospect of investigating journalists, as proposed by Rep. Peter T. King (R-N.Y.), who called on the Justice Department to prosecute the New York Times for "treasonous" action.

An investigation into how the information was revealed would normally follow such a disclosure. But officials denied that the rhetoric was an attempt to intimidate the media.

"It's not designed to have a chilling effect," White House press secretary Tony Snow said. "If the New York Times wants a spirited debate about it, it's got it. But certainly nobody is going to deny First Amendment rights. But the New York Times and other news organizations ought to think long and hard about whether a public's right to know, in some cases, might overwrite somebody's right to live."

A spokeswoman for the Times had no comment yesterday, pointing instead to an open letter by Executive Editor Bill Keller on Sunday. Keller noted that the Framers intended an independent press as a check on government abuse of power, and "rejected the idea that it is wise, or patriotic, to always take the President at his word, or to surrender to the government important decisions about what to publish."

Keller said he took seriously the government's private entreaties not to publish but decided that printing the story was in the public's interest. He argued that terrorist financiers knew the international banking system is being monitored and said administration officials seemed more worried that bankers would back out of the system. The argument that disclosure would change terrorist tactics, he wrote, "was made in a half-hearted way."

John Snow fired back yesterday in a letter to Keller, accusing him of "breathtaking arrogance" for presuming to know what terrorists know or do. "Your charge that our efforts to convince The New York Times not to publish were 'half-hearted' is incorrect and offensive," the Treasury secretary wrote.

Unlike the NSA program, the banking surveillance has not triggered broad outrage among congressional Democrats. Jim Manley, a spokesman for Senate Minority Leader Harry M. Reid (D-Nev.), said that "it doesn't seem to be based on the same shaky legal analysis" as the NSA program. But he added that Reid, who was briefed on it for the first time a few weeks ago, is concerned that "the administration has continued to ignore its duty to keep Congress informed."

Sen. Charles E. Schumer (D-N.Y.), a Bush critic, issued a tempered statement yesterday: "Allowing law enforcement to examine bank records in order to stop the flow of money to terrorists makes a lot of sense, and this program appears to allow for just that. The real question here, as with so many other programs run by this Administration, is whether they are obeying the laws we have on the books to protect Americans from unnecessary invasions of their privacy."

Full transcript:

JONES: My question is this to all four of you who would like to answer, maybe it's a very simple question. I apologize if it's been asked before. But what perplexes me is how in the world could professionals - I'm not criticizing anybody here at this table - but how could the professionals see what was happening and nobody speak out?

I'm not saying you did not do your duty, please understand. My point is as a congressman who trusted what I was being told - I'm was not on the Intelligence Committee, Senator Dorgan, but I am on the Armed Services Committee - and I was being told this information. And I wish I'd the wisdom then that I might have now. I would have known what to ask. But I think many of my colleagues - they did not have the experience on the Intelligence Committee - we just pretty much accepted.

So where along the way - how did these people so early on get so much power that they had more influence in those in the administration to make decisions than you the professionals.

WILKERSON: Let me try to answer you first. Let me say right off the bat I'm glad to see you here.

JONES: Thank you sir.

WILKERSON: As a Republican, I'm somewhat embarrassed by the fact that you're the only member of my party here.

JONES: I agree.

WILKERSON: But I understand it. I'd answer you with two words. Let me put the article in there and make it three. The Vice President.

"It's a challenge to the plain language of the Constitution," Specter said in an interview with The Associated Press. "I'm interested to hear from the administration just what research they've done to lead them to the conclusion that they can cherry-pick."

Apparently, enough to challenge many more statutes passed by Congress than any other president, Specter's committee says. The White House does not dispute that, but notes that Bush is hardly the first chief executive to issue them.

"Signing statements have long been issued by presidents, dating back to Andrew Jackson all the way through
President Clinton," White House spokeswoman Dana Perino said Monday.

Specter's hearing is about more than the statements. He's been compiling a list of White House practices he bluntly says could amount to abuse of executive power - from warrantless domestic wiretapping program to sending officials to hearings who refuse to answer lawmakers' questions.

But the session also concerns countering any influence Bush's signing statements may have on court decisions regarding the new laws. Courts can be expected to look to the legislature for intent, not the executive, said Sen. John Cornyn (news, bio, voting record), R-Texas., a former state judge.

"There's less here than meets the eye," Cornyn said. "The president is entitled to express his opinion. It's the courts that determine what the law is."

But Specter and his allies maintain that Bush is doing an end-run around the veto process. In his presidency's sixth year, Bush has yet to issue a single veto that could be overridden with a two-thirds majority in each house.

Instead, he has issued hundreds of signing statements invoking his right to interpret or ignore laws on everything from whistleblower protections to how Congress oversees the Patriot Act.

"It means that the administration does not feel bound to enforce many new laws which Congress has passed," said David Golove, a New York University law professor who specializes in executive power issues. "This raises profound rule of law concerns. Do we have a functioning code of federal laws?"

Signing statements don't carry the force of law, and other presidents have issued them for administrative reasons, such as instructing an agency how to put a certain law into effect. They usually are inserted quietly into the federal record.

Bush's signing statement in March on Congress's renewal of the Patriot Act riled Specter and others who labored for months to craft a compromise between Senate and House versions, and what the White House wanted. Reluctantly, the administration relented on its objections to new congressional oversight of the way the
FBI searches for terrorists.

Bush signed the bill with much flag-waving fanfare. Then he issued a signing statement asserting his right to bypass the oversight provisions in certain circumstances.

Specter isn't sure how much Congress can do to check the practice. "We may figure out a way to tie it to the confirmation process or budgetary matters," he said.

Under the CIA policy of rendition, prisoners are moved to third countries for interrogation.

The US admits to picking up terrorism suspects but denies sending them overseas to face torture.

The report by Swiss Senator Dick Marty follows a seven-month inquiry that began in November following media allegations about CIA detention centres in eastern Europe.

'Discrediting' claims

The Council of Europe will watch a video, put together by human rights group Witness, that includes testimony from men who say they were tortured after being detained by the CIA.

Khalid El-Masri, a German citizen, recalls waking up in a prison in Kabul where he was told by an interrogator: "You are in a country with no laws... We can lock you up here for 20 years or bury you, no one would know."

Benyam Mohammed al-Habashi, an Ethiopian citizen after arrested in Pakistan for travelling on a false passport, is still being at Guantanamo Bay.

The council will hear the detainee's brother read from a diary entry which talks about Benyam Mohammed being systematically wounded with a scalpel.

Speaking before Tuesday's session, Mr Marty said he believed some countries were going to great lengths to discredit his report.

'Spiders' web'

Correspondents say a resolution based on the report is likely to be approved, along with recommendations that intelligence services are regulated more closely.

But critics charge that Mr Marty's report contains nothing new and does not contain evidence compelling enough to secure a conviction in a court.

Mr Marty's report concluded there was strong circumstantial evidence that secret CIA detention centres had been established in Poland and Romania. Both countries have rejected the claims.

The report was based on an examination air traffic logs, satellite images and the accounts of those who said they had been abducted.

Mr Marty identified a "spider's web" of US rendition flights and landing points around the world.

The resolution to be voted on avoids mentioning any European country by name, but says some Council of Europe member states have "knowingly colluded with the United States to carry out these unlawful operations".

It also condemns members that have denied their participation "in many cases without actually having carried out any inquiries or serious investigations".

The accompanying recommendation to member states calls on them to adopt common measures to guarantee the rights of terror suspects captured in or transported through their territories.

It also urges them to include "human rights protection clauses" in deals allowing third countries to set up military bases Europe.

If the resolution and recommendations are approved, the member states - most of which deny any involvement in abuses of human rights by the CIA - are obliged to respond.

The federal police unit was also asked to draw up a legal analysis of the situation.

"She wants to know if these actions taken by the U.S. and SWIFT are okay under Belgian law," a ministry spokeswoman was quoted as saying.

It emerged on Friday that the U.S. government has had access to international bank transactions since the September 11 terrorist attacks in 2001. These private bank records were supplied by the Society for Worldwide Inter-bank Financial Telecommunications (SWIFT), an international association of financial institutes basedin Brussels.

The Belgian Justice Ministry denied on Monday that the minister was aware of the U.S. practices.

"The minister was, just as the prime minister, completely unaware. She only heard it on Friday, via the media," Onkelinx' spokeswoman said.

SWIFT handles international transactions for nearly 8,000 financial institutions in more than 200 countries.

The latest revelations, following claims last year of secret U.S. abductions and transfers of terrorist suspects in Europe, have drawn fire from the European Parliament. The European Union's lawmakers said the reports suggested once again that Washington was fighting its war at the cost of civil rights.

Financial institutes in Belgium are obligated by law to report suspicious transactions to the CFI in an effort to prevent money laundering and the financing of terrorism.

The National Bank of Belgium (NBB) confirmed on Saturday it was aware of the fact that U.S. authorities could examine transactions via SWIFT. The NBB released an official statement after media reports broke on Friday.

But an NBB spokesman refused to confirm when the reserve bank was informed about SWIFT's actions, revealing only that it was informed in an informal manner via its contacts with the firm.

The NBB said it saw no ethical problems in SWIFT's actions, adding that ethical monitoring was not part of its responsibilities.

Despite the fact SWIFT had to comply with various standards to ensure a smooth working of the financial sector, the NBB also said America's espionage tactics did not place the sector's operations at threat.

"Many of these countries do not want their nationals back," Bellinger said. "It's difficult to even get to square one in terms of discussion with different countries if individuals can go back there."

President Bush has said he would like to close the prison, where some 450 men are held on suspicion of links to al-Qaida and the Taliban.

Only 10 detainees have been charged with crimes and face military tribunals ordered by Bush, the first such trials since World War II. The Supreme Court could rule this week on the legality of the tribunals.

Senior European Union leaders pressed Bush during a recent EU-U.S. summit in Vienna to shut down Guantanamo and redouble efforts to make sure that human rights are not sacrificed in the war on terror.

Bellinger said he discussed the issue of closing Guantanamo with European officials at the Vienna summit. He said EU officials long opposed to the prison were beginning to see that closing it "is easier said than done."

Bellinger said the U.S. has begun talks with Britain about returning a group of British residents who have been held at the remote base on Cuba's southeastern tip.

A big headache for the U.S. has been what to do with a group of Uighurs, an ethnic group that lives mainly in western China. About two dozen Uighurs were captured by U.S. forces in Afghanistan.

China has demanded their return, but the United States feared they might face persecution there. China blames Uighur separatists for sporadic bombings and other violence in the Xinjiang region.

Five Uighurs were sent to Albania last month, but no other countries have offered to take in the rest.

Other nations "were concerned that the Chinese government would be very unhappy with them if they were to take the Uighurs," said Sam Whitten, head of the State Department's war crimes office.

The American Civil Liberties Union, which represented the librarians who received the demand for records, said the librarians might have been willing to comply with a similar demand had it been approved by a judge.

"I'm glad that we're vindicated in resisting the request for the records," said George Christian, of Windsor, Conn., one of the librarians who received a national security letter demanding the records. "We're just protecting our patrons to the extent we can."

The letter sought subscriber and billing information related to a computer used within a 45-minute time period Feb. 15, 2005, when the potential threat was transmitted from a library computer. Authorities have declined to say where exactly that computer was located, but said the request did not involve reading lists of library patrons.

"We concluded that based on the passage of time as well as other information we've been able to develop that this threat is probably not viable," said Connecticut U.S. Attorney Kevin O'Connor, who added that the potential threat had been in an e-mail.

O'Connor said that authorities are trying to prevent attacks and that not every case involves enough information to get a warrant.

The librarians had been under a gag order for months. Last year a federal judge said it unfairly prevented them from participating in a debate over how the Patriot Act should be rewritten, but by the time the FBI dropped its appeal in April, Congress had already voted to reauthorize the law.

"While the government's real motives in this case have been questionable from the beginning, their decision to back down is a victory not just for librarians, but for all Americans who value their privacy," said Ann Beeson, associate legal director of the ACLU.

O'Connor said that the national security letter was appropriately issued and that the ACLU should not question the motives of federal agents trying to investigate a threat.

Prosecutors argued that secrecy in demands for records is necessary to avoid jeopardizing investigations, and that the gag order prevented only the release of librarians' identities, not their ability to speak about the Patriot Act.

The law, initially passed shortly after the Sept. 11, 2001, attacks, allows expanded surveillance of terror suspects, increased use of material witness warrants to hold suspects incommunicado and secret proceedings in immigration cases. It also removed a requirement that any records sought in a terrorism investigation be those of someone under suspicion. Now anyone's records can be obtained if the FBI considers them relevant to a terrorism or spying investigation.