COLOMBO (Reuters) - Sri Lanka's former army chief walked free from jail on Monday with a pardon from President Mahinda Rajapaksa, who appears to have bowed to growing international demands that he release his highest-profile rival. Ex-General Sarath Fonseka kissed his hands and raised them to a group of 2,000 supporters who cheered "Victory to our war hero! Victory to our leader!" and lit firecrackers outside the maximum security prison. Some waved the national flag, emblazoned with a lion and a sword, as he released a white dove symbolizing peace. ...

NEW YORK (Reuters) - Newly issued shares in Facebook Inc may have a hard time in the coming week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater. Facebook on Friday sold 421 million shares of stock in a deal that valued the company at more than $100 billion. But investors, expecting a first-day pop in price, instead saw it close just 0.6 percent above the IPO price at $38.23. ...

FINALE EMILIA, Italy (Reuters) - Thousands of people in northern Italy slept in tents and cars overnight as more than 100 aftershocks rocked the area hit by a magnitude 6.0 earthquake that killed seven people and inflicted heavy damage to centuries-old cultural sites. "The fear that your house will collapse on your head is great, so it was good to be able to sleep in this tent," said one man who spent the night outdoors, cold but safe, in the town of San Felice sul Panaro. ...

SHANGHAI/NEW YORK (Reuters) - Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo Inc for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing. Under the agreement, Yahoo will sell half its stake in Alibaba for at least $6.3 billion in cash and up to $800 million in new Alibaba preferred stock. ...

TRIPOLI (Reuters) - The Libyan convicted of the 1988 bombing of a PanAm flight over Lockerbie will be buried on Monday in a quiet ceremony that Libyans hope will allow them to leave behind the controversy that surrounded him in life. Abdel Basset al-Megrahi, who always said he was not responsible for bringing down the jumbo jet on the Scottish town and killing 270 people, died in his bed in Tripoli on Sunday surrounded by family. His release from jail in 2009 caused huge controversy in Britain and the United States, where most of the victims were from. ...

NEW YORK (Reuters) - Barely a day went by at the insider-trading trial of multimillionaire hedge-fund founder Raj Rajaratnam a year ago without mention of Rajat Gupta, a boldface name in business and charity circles. On Monday in the same federal court in New York, it will be Gupta's turn to go on trial. The former Goldman Sachs Group Inc and Procter & Gamble board member is accused of leaking stock secrets to Rajaratnam, his erstwhile friend and business associate who was convicted and is now in prison. ...

BERLIN (Reuters) - Europe's fiscal pact must not be renegotiated or softened but could be complemented by growth-enhancing measures, European Central Bank Executive Board member Joerg Asmussen said on Monday. Asmussen also stressed that the ECB's non-standard measures - introduced to fight the debt crisis - were of a temporary nature and could be withdrawn any time if inflation risks emerged. There is a growing push in the euro zone, led by newly elected French President Francois Hollande, to do more to stimulate growth and not just focus on reducing deficits. ...

NEW BRUNSWICK, New Jersey (Reuters) - A former Rutgers University student faces up to 10 years in prison at his sentencing on Monday for hate crimes after spying on his roommate's gay tryst, but many gay advocates are calling for no time behind bars. Tyler Clementi, 18, committed suicide in 2010 after learning that Dharun Ravi used a computer-mounted camera to see him kissing an older man in their dorm room and used social media to encourage others to watch. ...

NEW BRUNSWICK, New Jersey (Reuters) - A former Rutgers University student faces up to 10 years in prison at his sentencing on Monday for hate crimes after spying on his roommate's gay tryst, but many gay advocates are calling for no time behind bars. Tyler Clementi, 18, committed suicide in 2010 after learning that Dharun Ravi used a computer-mounted camera to see him kissing an older man in their dorm room and used social media to encourage others to watch. ...

With his carefully tended hair, tight trousers and perfect harmonies, Robin Gibb, along with his brothers Maurice and Barry, defined the disco era. As part of the Bee Gees — short for the Brothers Gibb — they created dance floor classics like "Stayin Alive," ''Jive Talkin'," and "Night Fever" that can still get crowds onto a dance floor.

As President Barack Obama and fellow NATO leaders herald the coming end of the deeply unpopular Afghanistan war, they face the grim reality of two more years of fighting ahead and more of their troops sure to die in combat.

BRUSSELS (Reuters) - The European Union's antitrust chief on Monday offered Google a chance to settle an investigation into allegations of anti-competitive behavior after the world's most popular search engine indicated its willingness to resolve the issue amicably. The European Commission launched investigation into Google in November 2010 after rivals, including Microsoft, accused the company of manipulating search results and promoting its own advertising services while demoting their rivals'. ...

MOSCOW (Reuters) - Russian President Vladimir Putin unveiled a government dominated by loyalists on Monday, tightening his grip on the economy and limiting Prime Minister Dmitry Medvedev's ability to pursue his reform agenda. Igor Shuvalov, a powerful Putin ally, kept his post as first deputy prime minister in overall charge of economic policy and Anton Siluanov, a career bureaucrat, remained finance minister. Putin also consolidated his power over the security structures, with Anatoly Serdyukov staying on as defense minister, and kept faith with long-serving Foreign Minister Sergei Lavrov. ...

SHANGHAI/NEW YORK (Reuters) - Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo Inc for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing. Under the agreement, Yahoo will sell half its stake in Alibaba for at least $6.3 billion in cash and up to $800 million in new Alibaba preferred stock. ...

NEW YORK (Reuters) - Stock index futures rose on Monday after Wall Street posted its worst weekly loss for the year and on assurances that world powers want debt-laden Greece to remain in the euro. On Saturday, G8 leaders stressed that their "imperative is to promote growth and jobs" and gave verbal backing for Greece to stay in the euro, but despite calls from the United States for immediate moves to boost growth, no sign emerged that Germany would soften its stance on austerity as the cure for Europe's debt problems. ...

The July 29, 2008, phone call between two titans of Wall Street began with the old friends exchanging mild pleasantries, but then quickly turned serious and — by the government's account — criminal.

A German official made clear on Monday that Berlin continues to oppose the idea of jointly-issued bonds for the 17-nation eurozone, which France's new president had suggested could be used to create much-needed economic growth and ease the region's financial crisis.

BERLIN (Reuters) - Chancellor Angela Merkel will discuss with the leaders of German political parties on Thursday the prospects for a European fiscal pact she wants parliament to approve before its summer recess despite opposition foot-dragging. Government spokesman Georg Streiter said Merkel, Finance Minister Wolfgang Schaeuble and other senior officials would meet the national and parliamentary leaders of the main parties on Thursday from 3 p.m. to 5 p.m. (1300-1500 GMT). The subject would be "the fiscal pact, Europe and everything linked to that", Streiter told a news conference. ...

BERLIN (Reuters) - Chancellor Angela Merkel will discuss with the leaders of German political parties on Thursday the prospects for a European fiscal pact she wants parliament to approve before its summer recess despite opposition foot-dragging. Government spokesman Georg Streiter said Merkel, Finance Minister Wolfgang Schaeuble and other senior officials would meet the national and parliamentary leaders of the main parties on Thursday from 3 p.m. to 5 p.m. (1300-1500 GMT). The subject would be "the fiscal pact, Europe and everything linked to that", Streiter told a news conference. ...

An Israeli human rights group has released a video that suggests Israeli soldiers stood by while Jewish settlers opened fire on Palestinians in the West Bank, wounding one.

LONDON (Reuters) - The euro steadied against the dollar on Monday, rising above last week's four-month low as some investors took profit on recent bearish bets, although concerns about financial turmoil in Greece and Spain kept the common currency vulnerable. Speculators who had piled up a record amount of bets against the euro cut some of those positions, giving it a respite from this month's relentless selling. The euro was steady at $1.2773, well above Friday's low of $1.2642 hit on trading platform EBS. A break below the nearby 2012 low of $1. ...

Mourners fired guns in the air as thousands poured into the streets Monday in a northern Lebanese town for the funeral of a Sunni Muslim cleric whose killing sparked intense clashes in Beirut and raised fears the crisis in Syria was spilling across the border.

ROME (Reuters) - Italy is likely to register a strong protest vote against belt-tightening on Monday in local elections that will provide a fresh snapshot of Europe's changing political landscape a year ahead of a national ballot. Taking place against the backdrop of a tense and somber national mood, the second round of voting to choose city majors involves nearly 120 local administrations. Prime Minister Mario Monti - the architect of Italy's tough austerity program - is not standing, but the two main parties in the right-left coalition that support him are. ...

ROME (Reuters) - Italy is likely to register a strong protest vote against belt-tightening on Monday in local elections that will provide a fresh snapshot of Europe's changing political landscape a year ahead of a national ballot. Taking place against the backdrop of a tense and somber national mood, the second round of voting to choose city majors involves nearly 120 local administrations. Prime Minister Mario Monti - the architect of Italy's tough austerity program - is not standing, but the two main parties in the right-left coalition that support him are. ...

A Chinese conglomerate announced Monday it will buy a major U.S. cinema chain, AMC Entertainment Holdings, for $2.6 billion in China's biggest takeover of an American company to date.

A Chinese conglomerate announced Monday it will buy a major U.S. cinema chain, AMC Entertainment Holdings, for $2.6 billion in China's biggest takeover of an American company to date.

CHICAGO (Reuters) - NATO will hand over the lead role in combat operations to Afghan forces across the country by mid-2013, alliance leaders said on Sunday as they charted a path out of a war that has lost public support and strained budgets in Western nations. A NATO summit in Chicago on Monday will formally endorse a U.S.-backed strategy for a gradual exit from Afghanistan, a move aimed at holding together an allied force scrambling to cope with France's decision to withdraw its troops early. ...