ElBaradei said in a brief interview that "based on our most recent inspections, the second centrifuge cascade is in place and ready to go."

He said that no uranium had yet been entered into the new system, but could be as early as next week.

U.S. intelligence officials think that Iran is at least four to nine years away from gaining the technical capability to produce enough nuclear material for a single weapon, the paper said.

European officials suggest the latest move is political and Iranian officials are hoping to send a defiant message to the U.N. Security Council as it weighs possible sanctions, it added.

The Bush administration has dismissed Iran's energy claims and thinks it will secretly build nuclear weapons under the cover of engergy needs.

Iran has insisted that it does not intend to build a weapon, but ignored an Aug. 31 deadline, set by the Security Council, to stop enriching uranium.

However, the foreign minister insisted that Guatemala would consider backing down from the competition only if Caracas did the same.

"But we have no intention of stepping down unilaterally. We would only do so in agreement with Venezuela, with a clear candidate in mind."

Guatemala and Venezuela are competing for one of the 10 non-permanent seats on the Security Council. South Africa, Indonesia, Italy and Belgium have been elected to the four other rotating seats.

After three days and 35 rounds of inconclusive balloting last week, Guatemala led Venezuela by a margin of 20 to 30 votes in the 192-member General Assembly but still lacked the required two-thirds majority to win a seat on the 15-nation Council.

Uruguay, Chile, the Dominican Republic, Costa Rica and Panama have all been mentioned as possible alternatives, said Rosenthal. "But there is no obvious candidate. And we fear the discussion could divide the region even more," he said.

The protesters are being backed by a special parliamentary commission consisting of leftist legislators loyal to President Hugo Chavez.

At one Coca-Cola plant in Caracas about 500 former workers blocked the exits and entrances, preventing the lorries which normally supply shops, kiosks and restaurants from leaving the factory.

The protestors are demanding that millions of dollars in unpaid social benefits such as pensions and severance payments be paid immediately to them by Coca-Cola Femsa, a Mexican-based subsidiary of the US soft drinks company.

Another 10,000 former contractors are camped outside 75 Coke warehouses and plants around Venezuela.

They say they are prepared to stay put until their demands are met. But Coca-Cola Femsa says this will put more than 7,000 jobs at risk in Venezuela.

State takeover

"This blockade is just the prelude to Coca-Cola being nationalised and turned over to the Venezuelan state," Nixon Lopez, a workers' leader, told the BBC.

"We're showing the world," he added, "that no multi-national company can just come here to humiliate Venezuelan employees."

The protesters are being backed by a special commission in parliament.

The committee, consisting of leftist MPs, is looking at taking control of the firm if it refuses to hand out the missing payments.

This isn't the first time lawmakers loyal to President Chavez have threatened to take over the assets of big international companies here.

President Chavez has himself spoken of seizing Venezuela's biggest phone company in a similar case to the Coca-Cola dispute.

But the leader of the main opposition Fidesz party said the whole country was against his "illegitimate government".

Some 100 people were hurt as protesters and riot police armed with tear gas and rubber bullets clashed in Budapest.

Opposition to PM Ferenc Gyurcsany turned violent last month after he admitted lying to win re-election.

Clashes continued late into the night on Monday and the mood in the capital remained tense.

By the end of the day, the number of protesters had fallen from several thousand to a few hundred, mostly concentrated on the Elizabeth Bridge over the River Danube.

Many of the protesters were from hard-right groups and some carried the red-and-white striped flag of the Hungarian government that supported the Nazis during World War II.

A group of demonstrators briefly commandeered a tank taken from an exhibition marking the 1956 anti-Soviet uprising.

'Illegitimate government'

Mr Gyurcsany said the protesters were an "aggressive minority... terrorising us".

"We have to defend the country," he said.

The Fidesz party said the police had used excessive force to break up the protests.

The party's leader, Viktor Orban, a former prime minister, told a gathering of his supporters that "an entire country has turned against this illegitimate government".

Earlier in the day, Hungarian officials and foreign dignitaries gathered at the parliament building to lay flowers.

Some veterans of the 1956 uprising refused to shake hands with Mr Gyurcsany at the commemoration and the main opposition Fidesz party said it was boycotting events where he would speak.

The Fidesz party has long refused to mark the 1956 uprising with Mr Gyurcsany's Socialists, whom it accuses of inheriting the mantle of the pro-Soviet Communists.

'Free Hungary'

Mr Gyurcsany caused political uproar recently when he admitted he had lied to the public about the economy.

But he has denied any comparison between Monday's protests and their 1956 counterparts.

"The majority of Hungarians believe that parliamentary democracy is the most suited to express people's will and to create law and give a programme to a free Hungary," he said.

The Hungarian uprising started in Budapest on 23 October 1956, with a spontaneous demonstration by a crowd of about 23,000, the reading of a pro-democracy manifesto and the singing of banned national songs.

A giant statue of Stalin was pulled down, leaving only the dictator's boots on the pedestal.

Soviet tanks were forced to withdraw, but returned with devastating force a week later.

The BBC's Allan Little says the uprising was the moment the world accepted the post-war partition of Europe and the apparent permanence of what Winston Churchill had called "the Iron Curtain".

The 25-member bloc, which depends on Russia for 25 percent of its gas and oil imports, was keen to formulate new principles of energy cooperation with Moscow through a new treaty.

The current treaty -- the Agreement on Partnership and Cooperation between Russia and the EU -- will expire next year.

Moscow, however, had earlier been reluctant to start talks on such a treaty, saying that the new one must focus on a long-term Russian-EU ties.

A treaty on strategic cooperation would be an ideal format for such a document, Lavrov said.

"This should be an ample juridical and political document based on the principles of equality and mutual profit," he said.

A Kremlin aide said on Friday that Moscow would not speed up work on a new agreement with the EU.

"Attempts to make the text of the future agreement excessively concentrated on energy" did not suit Russia, Kremlin aide Sergei Yastrzhembsky said.

"This must be a basic treaty, aimed at the long-term prospective of ten to 15 years, reflecting all the main spheres of cooperation, but not aimed at the settlement of current problems," he said.

The Kremlin aide said if both sides failed to finish work on the new document as scheduled, the current document could be extended. "It will not affect cooperation with the EU."

"It is always difficult to conduct negotiations with the EU," he added.

Denmark fell from first last year to 19th after a Danish newspaper's publication of cartoons depicting the Prophet Mohammad sparked Muslim outrage and threats against reporters.

The United States fell nine places to 53rd in the survey of 168 countries, on a par with Botswana, Croatia and Tonga. It came 17th when the index was first compiled in 2002.

"Relations between the media and the Bush administration sharply deteriorated after the president used the pretext of 'national security' to regard as suspicious any journalist who questioned his 'war on terrorism'," RSF said in a statement.

"The zeal of federal courts which ... refuse to recognize the media's right not to reveal its sources, even threatens journalists whose investigations have no connection at all with terrorism," RSF said.

It cited the examples of freelance journalist Josh Wolf, who was imprisoned for refusing to hand over video footage of a violent anti-capitalism protest in San Francisco, and of Sudanese Al Jazeera cameraman Sami al-Haj, who it said was being held without charge at the Guantanamo Bay prison camp.

Russia also fell nine places, to 147th, in a year marked by the murder of journalist Anna Politkovskaya, who was fiercely critical of government policy, particularly of Moscow's campaign against the insurgents in Chechnya whom she called terrorists.

"Russia, which suffers from a basic lack of democracy, continues slowly but steadily dismantling the free media, with industrial groups close to President Vladimir Putin buying up nearly all independent media outlets and with the passage of a law discouraging NGO activity," RSF said.

The law requires foreign non-governmental organizations (NGOs) to submit a long list of paperwork, including passport numbers and home addresses of the parent group's founding members, to an agency which decides whether to approve them.

The Kremlin says the law is vital to prevent terrorists, money launderers and foreign intelligence services using NGOs as cover. Critics say it gives officials a free hand to harass charities and human rights groups it does not like.

In Japan, the firebombing of the Nihon Kenzai newspaper, rising nationalism and far-right attacks against journalists helped the country fall 14 places to 51st, RSF said.

France fell five places to 35th, partly due to an increase in searches of media offices and journalists' homes, RSF said. Police probing doping in cycling raided the offices of sports daily l'Equipe and weekly magazine Le Point.

"The steady erosion of press freedom in the United States, France and Japan is extremely alarming," RSF said.

North Korea, Turkmenistan and Eritrea remained the three most repressive countries, clocking up the highest scores. They were the only states to score more than 90 points last year but Iran, China, Burma and Cuba joined them this year.

More promisingly, Bolivia jumped to 16th from 45th, though RSF said that could change due to political tension, and the tiny Himalayan kingdom of Bhutan leapt 44 places to 98th thanks to the publication of its first privately owned newspaper.

So far, Greek Cypriot politicians have blocked all such initiatives.

The EU hopes success would lead Turkey to open its ports to Cypriot vessels, removing one block to its EU entry bid.

The Finns are reported to have suggested putting both the Turkish Cypriot port of Famagusta and the nearby resort of Varosha under UN administration.

Promises

This would allow Greek Cypriots driven out of Varosha more than 30 years ago to start refurbishing their homes and hotels.

EU member states do not recognise the self-declared Turkish Republic of Northern Cyprus and it does not qualify for preferential terms of trade, so there is almost no direct trade.

However, the European Union promised in 2004 to end the isolation of the Turkish Cypriot community, after it voted in favour of a UN plan to re-unite the island.

Soon afterwards the European Commission drafted legislation that would allow direct trade with the Turkish Cypriots, but the Cypriot government - a member of the EU since 1 May 2004 - has held it up.

For its part, Turkey promised to open its ports and airports to Cypriot traffic before it started EU membership talks last year, but has not yet done so.

Cyprus split in two in 1974, when a Greek-inspired coup prompted a Turkish invasion of the northern third of the island.

Window of opportunity

Finland has taken its initiative as the current holder of the EU presidency.

It is hoping for progress before an EU summit at the end of the year, when a decision could be taken to suspend Turkey's membership talks.

Mr Rehn, speaking in London, said the Finnish plan was currently the "only game in town".

"It really may be the last window of opportunity to make serious progress on the Cyprus issue for several years," he said.

Max Gallo, best-selling historian and former government spokesman under Socialist president François Mitterrand, said the expression "citizens' juries" reminded him of the excesses of Chinese leader Mao Zedong.

"The phrase 'citizens' juries drawn by lot' worries me deeply," Gallo told Le Figaro newspaper.

"We are getting into a kind of populist blur. If I were to be excessive, I would say that at the end-point of this - apparent - realisation of democracy you get the cultural revolution of Chairman Mao."

"He wanted professors and all representatives to be judged by the people, represented by militants who come to judge and condemn those who have been elected," he said.

According to Gallo, "We have yet to find a better way in democracies for deputies to justify their record than the principal of universal suffrage carried out at intervals set down in the law."