Blast in Pakistan town kills 26

The sectarian tension in Pakistan seem to escalates with the latest development being the a suicide bomb attack on a market in Shia.

BBC reported the attack as A suicide bomb attack on a market in a Shia Muslim area of north west Pakistan has killed 26 people and injured at least 50 others.

The attacker blew himself up close to a mosque in the town of Parachinar in Pakistan's tribal region of Kurram.

Three more people died when security forces fired on crowds protesting against the attack.

Fazal Saeed, the leader of a breakaway faction of the Pakistani Taliban, said it carried out the attack.

"We have targeted the Shia community of Parachinar because they were involved in activities against us," he told Reuters news agency.

Residents said the bombing destroyed at least eight shops in the bazaar, AFP reports.

A curfew has been imposed in the town.

Pakistan has been plagued by sectarian attacks, with Shia Muslims targeted by radical Sunni groups.

The Kurram region in particular has a history of violence between Sunni and Shia groups.

Prior to a peace deal last February, Shia tribes had been waging a three-year war to keep the Taliban out of the area.

Last July, Pakistani security forces launched an offensive against militant groups in Kurram.

A way out of the woods

Last year every new jolt in the euro crisis sent financial markets into a spin. This year they have become blasé. They barely even registered the torching of buildings in Athens, nor the last-minute cancellation of a meeting of ministers that was supposed to agree on a new aid package for Greece.

Although a calm is welcome, nonchalance is not justified. A deal probably will be done on Greece, and there are promising signs of reform all over the continent. But, the problems ahead for the euro zone remain huge. The crisis is, in effect, moving from an acute to a chronic phase.

The latest hiccup in Greece was caused by European finance ministers' determination to get Greek leaders to commit themselves to changing their ways. While riots exploded on the streets of Athens, the Greek parliament approved yet another programme of austerity and reform. The finance ministers were then due to agree on a new €130 billion ($170 billion) bail out which is meant to clear the way for a private-sector debt restructuring that would leave Greece owing around 120% of GDP in 2020, down from today's 160%. But an election is looming in April, and Greece's rescuers insisted that the country's main political leaders should all sign up to the package.

For all the bile that some are now hurling, especially at Germany, the odds are that Greece's politicians will buckle. Few in Athens want a disorderly default next month that might lead to a messy exit from the euro. Nor, despite sharp words from some German politicians, do most in the rest of Europe.

Elsewhere in the euro zone there are glimmers of hope, especially in the ambition for structural reforms. In the euro's first decade, southern Mediterranean countries enjoyed the benefit of lower interest rates, but they failed to reform their labour and product markets to make their economies more competitive for a world in which they had lost the safety valve of currency devaluation.

Belatedly, the euro crisis has changed this. Ireland has regained competitiveness. Spain's new government won a big mandate for radical change last November. It has announced reforms of its rigid labour laws that may eventually go a long way towards cutting the country's chronically high unemployment. And Italy's new prime minister, Mario Monti, although running an unelected government, basks in the highest popularity rating of any Italian leader in years. Mr Monti has already passed a pension reform and is soon to propose labour reforms of his own (see article). All this should make euro-zone members better able to cope with the rigours of sharing a single currency with Germany.

Yet the continuing frailty of the euro zone's economies threatens to undermine these efforts. The latest numbers, for the fourth quarter of 2011, show Greek GDP shrinking by as much as 7% a year. Ahead of an election that may bring the centre-right to power, this is making the politics of austerity still more vicious (see article). It also sets up the eventual prospect of yet another debt restructuring. And although a new government may successfully impose wage and public sector payroll cuts, Greece's privatisation promises look hopelessly optimistic. Deeper reforms to the economy may prove to be beyond its politicians' capacity, even if they keep their word (which past form suggests they will not).

Italy, Spain and Portugal will all see a sharp fall in GDP this year. The euro zone economy as a whole may now be shrinking, after GDP fell in the fourth quarter , and the fiscal compact imposed by Germany is geared towards ever more austerity. These fears spill over into the bond markets, as this week's downgrades by Moody's, a ratings agency, have underlined. Although investors have become more optimistic about Spain and Italy, they remain worried about Portugal.

FBI 'anti terror' arrest near US Capitol

A man has been arrested near the US Capitol building as part of an anti-terror investigation, US officials say.

Amine El Khalifi, 29, is said to be an illegal immigrant originally from Morocco. Officials said the man thought he was heading to carry out a suicide attack on the Washington DC building, home to the US Congress. He was "closely and carefully monitored" for weeks, according to the FBI and US Capitol police. Authorities say the public was never in any danger. Khalifi allegedly thought undercover FBI agents he was working with were members of the al-Qaeda network. However, he was not believed to have any genuine connections to al-Qaeda, officials said.