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.

Security situation relatively stable since signing of February 2002 ceasefire, but political killings increasing in north and east. Government has said it will send troops to area. LTTE (Tamil Tigers) suspended direct peace talks in April, claiming not enough being done to rehabilitate war- torn Tamil areas. Government has proposed limited autonomy for majority Tamil areas; rebels are working on counter-proposal.

Taiwanese authorities bolstered security measures after uncovering Chinese spy ring. China strongly condemned Taiwan’s eleventh bid for UN representation on 8 August. President Chen announced on 13 August commercial aviation and shipping links may be restored by end of 2004.

Talks between Armenia and Azerbaijan over Nagorno-Karabakh remain stalled, and progress in dispute unlikely until after Azerbaijan’s October presidential election. Both sides accuse each other of using dispute to distract public attention from own domestic crises – in Armenia, controversial re-election of President Robert Kocharian, and in Azerbaijan, ill- health of President Heydar Aliyev.

SFOR made unsuccessful efforts to capture indicted war criminals, mounting raid on home of Gen. Ratko Mladic's late mother on 13 August and surrounding sites associated with Radovan Karadzic in Pale on 26 August. Mitar Rasevic, chief warder at Serb prison in Foca, surrendered to Hague Tribunal. The 3 ruling nationalist parties continue to bicker - both with coalition partners and within their ranks over jobs, education and tax reform, and proposed unification of Mostar.

Upsurge in violence of recent months continues. Between 20-22 August, 28 Russian soldiers and at least 12 Chechen rebels killed in fighting. Spate of suicide attacks continued: on 1 August suicide bomber killed 35 at military hospital in southern Russia. Russian Government pushing ahead with plans to hold controversial October election for Chechen presidency.

Parliament finally approved composition of new electoral commission, but compromise went against recommendations of U.S. envoy James Baker aimed at preventing electoral fraud in Nov. 2003 elections. Little progress made in negotiations over future status of Abkhazia.

Region’s wealthiest and most stable country continues to attract attention for poor treatment of journalists and opposition figures. Kazakh authorities reportedly refusing request for pardon from Ghalymzhan Zhaqiyanov, jailed co-founder of Democratic Choice of Kazakhstan, until he promises to stay out of politics.