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WASHINGTON (Reuters) - The United States on Wednesday tried to ease its way out of a dispute between South Korea and Japan over a cluster of islands both countries claim, which had threatened to mar U.S. President George W. Bush's visit to Seoul next week.

JERUSALEM (Reuters) - Ehud Olmert said on Wednesday he would resign as Israel's prime minister after his ruling party chooses a new leader in September, a move that plunged Middle East peace talks and Israeli politics into limbo.

ASUNCION (Reuters) - Pope Benedict granted an unprecedented waiver to allow a former bishop to serve as president of Paraguay without violating church rules, a Vatican representative said on Wednesday.

BRUSSELS (Reuters) - The European Union's trade chief Peter Mandelson said on Wednesday the United States helped to bring down global trade talks this week when its negotiators shunned a compromise proposal at a key juncture in the talks.

GUANTANAMO BAY U.S. NAVAL BASE, Cuba (Reuters) - A driver for Osama bin Laden lacked the education and skills for admission to the al Qaeda leader's inner circle, a defense witness testified on Wednesday at his Guantanamo war-crimes trial.

ANKARA (Reuters) - Turkey's highest court on Wednesday rejected an attempt to shut down the governing AK Party but imposed financial penalties on it for anti-secular activities, the court's chief judge said.

WARSAW (Reuters) - Poland's Lech Walesa testified on Wednesday against his old rival General Wojciech Jaruzelski in a long-delayed hearing into a bloody communist crackdown on civilian protesters nearly 40 years ago.

TEHRAN (Reuters) - Iran will press ahead with its nuclear path, the country's highest authority, Supreme Leader Ayatollah Ali Khamenei, said on Wednesday, speaking just before a deadline set by Western officials in a nuclear dispute.

ASUNCION (Reuters) - Pope Benedict granted Paraguay's president-elect a historic waiver to allow the former bishop to take office next month without violating church rules, a Vatican representative said on Wednesday.

ANKARA (Reuters) - Turkey's highest court will announce its much-anticipated verdict on whether to close the governing party on charges of Islamist activities on Wednesday, the Anatolian state news agency said.

BEIJING (Reuters) - Some International Olympic Committee officials cut a deal to let China block sensitive websites despite promises of unrestricted access, a senior IOC official admitted on Wednesday.

KUALA LUMPUR (Reuters) - A private Malaysian doctor who examined a former aide to opposition figure Anwar Ibrahim following allegations of sodomy was not qualified to conduct such a check, his employer said on Wednesday.

MINGORA, Pakistan (Reuters) - Twenty-five Taliban militants and five Pakistani soldiers were killed in a fierce clash in the troubled Swat valley in Pakistan's northwest on Wednesday, the military said.

ISTANBUL (Reuters) - Israel and Syria will hold their next indirect peace talks in Turkey in mid-August after failing to move on to face-to-face negotiations, a source close to the talks said on Wednesday.

JERUSALEM (Reuters) - Palestinian security forces loyal to Hamas and Fatah have both carried out serious human rights abuses over the past year, including arbitrary arrests and torture, according to a report on the bitter power struggle.

HARARE (Reuters) - Talks between Zimbabwe's ruling ZANU-PF party and the opposition MDC aimed at resolving the country's political crisis will resume on Sunday, South African President Thabo Mbeki said on Wednesday.

TEHRAN (Reuters) - Iran will pursue its nuclear path, the country's highest authority, Supreme Leader Ayatollah Ali Khamenei, said on Wednesday, speaking just before a deadline set by world powers in a nuclear dispute.

PORT HARCOURT (Reuters) - Rival militant factions in Nigeria's oil-producing Niger Delta have clashed in an apparent turf war, killing at least four people, security officials said on Wednesday.

ISTANBUL (Reuters) - Turkey's highest court could decide as soon as Wednesday whether to ban the ruling AK Party for Islamist activities, Radikal and Sabah newspapers said.

CANBERRA (Reuters) - Investigators looking at whether an exploding oxygen bottle blew a large hole in the side of a Qantas 747 said on Wednesday part of a bottle burst into the plane's cabin and partly moved a door lock. The Qantas 747-400 suffered a loss of cabin pressure during a flight from Hong Kong to Melbourne last Friday, forcing the plane to make an emergency descent from 29,000 feet to 10,000 feet before landing safely in Manila in the Philippines.