Armed attacks by extremist groups against U.S. forces, government troops and aid workers continued in southeast border regions. More than 60 people killed on 13 August (including two Red Crescent workers, 15 Afghan civilians and six government soldiers), bloodiest day in over a year. Battles between local commanders in the north continue to cause displacement and civilian casualties. NATO took command of International Security Assistance Force (ISAF) on 11 August. Continuing need to expand international security umbrella outside Kabul. Subject to parliamentary approval, 250 German troops will be deployed to northern city of Kunduz. UN approval sought to send troops under ISAF umbrella; otherwise troops will operate under “Enduring Freedom” U.S. command. U.S. and Afghan soldiers began week-long campaign of bombing and intense ground battles on 25 August, hitting Taliban camps and killing dozens; 2 U.S. soldiers killed.

Over 50 people killed in two bomb blasts in Mumbai on 25 August. Government blames Pakistan- based Kashmiri militants, Lashkar-e-Taiba and affiliated Indian Islamic students’ association. Police seized 21kg of explosives and other weapons; killed 2 members of Kashmiri militant group, Jaish-e-Mohammed in gun battle. 34 civilians and 6 tribal separatists killed in attacks in Tripura and Manipur on 14 August as rebels sought to enforce boycott of independence day celebrations. Government and Naga separatists agreed on 5 August to extend ceasefire for another year.

Despite continued violence, including bomb explosion in Srinagar shortly before Indian PM Vajpayee arrived on 27 August, Indo-Pakistani relations have improved in recent months. Initial responses to Mumbai bombings on both sides confirmed improvement. Echoing Vajpayee’s April offer, Pakistani President Musharraf called on 11 August for talks about ceasefire along Line of Control. However, both sides continue to attach unrealistic preconditions to talks. Ghazi Baba, Commander in Chief of Jaish-e-Mohammed and alleged architect of December 2001 attack on Indian parliament, killed in gun battle in Srinagar on 30 August.

Car bomb exploded outside Jakarta’s Marriott hotel on 5 August, killing 12 and injuring over 150. Indonesian police named 5 suspects - all members of Jemaah Islamiyah (JI) - on 19 August. JI operational chief Hambali, alleged mastermind of the October 2002 Bali bombing, captured in joint operation between Thai authorities and CIA on 12 August. Government suspended plan to divide province of Papua after violence broke out killing 4 between 23 - 28 August. Christian-Muslim tensions simmer in Poso after series of violent incidents in June and July. Military operation against separatist Free Aceh Movement (GAM) - launched mid-May after peace negotiations broke down - looks likely to continue. Current military methods appear likely to generate more support for GAM.

After intense activity in August, underlying situation neither better nor worse: next period has both high risk and high peace opportunity. Tensions escalating since October 2002 when North Korea admitted to secret nuclear arms program. Six-way multilateral talks between U.S., North Korea, South Korea, Japan, China, Russia in Beijing on 27-28 August. North Korea announced intention to become nuclear power; plan to test atomic bomb in near future. Having agreed on 28 August on new round within two months, Pyongyang announced on 30 August it saw no value in further talks. U.S. and others declined to take at face value. Japan announced plans for new missile defence system.

International pressure mounting on Myanmar’s military leadership over detention (since late May) of opposition leader Aung San Suu Kyi. U.S. and EU bolstered sanctions but none of neighbours - with whom it does most of its trade - has imposed sanctions; and China has strongly criticised them. August saw cabinet reshuffle among ruling generals. On August 30, Gen. Khin Nyunt, newly-appointed PM, laid out roadmap to elections next May - no mention of NLD role or Suu Kyi release. U.S. authorities believe Suu Kyi is on hunger strike.

Talks that resumed in mid-August between Government and Maoist rebels ended in stalemate. Rebels insist on new constitution redefining role of King; government only prepared to amend current constitution. Maoist leader Prachanda called off ceasefire on 27 August. Assassination attempts against several serving and former politicians blamed on Maoists. Battles on 30-31 August killed 9 rebels, 2 soldiers and 2 police; Maoists back on Government terrorist list; curfews imposed in much of country.

On August 21, opposition members walked out of parliament’s first sitting since November 2002 in protest over constitutional changes enabling President to sack PM and dissolve parliament. Sectarian violence continues in Quetta: 2 Shia men killed in separate attacks on 16 August. Angry mobs torched cars and destroyed property after one victim’s funeral. Skirmishes continued between Pakistani and Afghan troops across disputed border. Afghan leaders accused Islamabad of doing too little to prevent al-Qaida and Taliban forces regrouping in Pakistan. Pakistan proposed greater intelligence sharing. Three-way commission (Afghanistan, Pakistan and U.S.) investigating border disputes agreed on 14 August to establish hotline between senior military commands.

Government lifted “state of rebellion” on 11 August. Soldiers who staged attempted coup in July put on trial. Defence Secretary resigned on 29 August - President Arroyo assumed post. 2 members of terrorist group Abu Sayyaf arrested - under interrogation claimed Abu Sayyaf was planning bombings in Mindanao in October. July ceasefire between government and MILF holding - peace talks due in Malaysia on 4 September.

Australian-led multinational intervention force arrested Harold Keke, leader of Guadalcanal Liberation Front. Amnesty for return of illegal weapons ended. Some 2,700 weapons turned in. Intervention force will now begin searching for illegal weapons. Australian Prime Minister John Howard visited for talks.