U.S. Asks Ex-U.N. Inspector to Advise on Arms Search Apparently in a sign of dissatisfaction with the progress on the search for illegal weapons in Iraq, the Bush administration is turning to a former top United Nations weapons inspector to provide advice on how to more effectively focus the hunt, officials said today. David Kay, who led three arms inspection missions as the United Nations chief nuclear weapons inspector in Iraq after the 1991 Persian Gulf war, has been named a special adviser to the director of central intelligence, George Tenet, providing provide expertise on the best methods for scouring Iraq for illicit arms, the C.I.A. announced today. The surprise appointment of a former United Nations weapons expert follows a period in which the Bush administration frequently criticized the agency's inspection process as insufficient to penetrate Iraq's program of "denial and deception." The decision to have Mr. Kay report directly to Mr. Tenet, while search teams on the ground will be reporting to the Pentagon, will give the C.I.A. a higher profile in a hunt that has been dominated by the Pentagon. Comments by senior officials tonight indicate concern that the move will be viewed as a turf battle between the Pentagon and C.I.A. http://www.nytimes.com/2003/06/12/international/worldspecial/12WEAP.html

EU ends free Internet tax ride July 1, a new EU directive goes into effect requiring all Internet companies to account for value added tax, or VAT, on "digital sales." The law adds a 15 percent to 25 percent levy on select Internet transactions such as software and music downloads, monthly subscriptions to an Internet service provider and on any product purchased through an online auction anywhere in the 15-member bloc of nations. The VAT is nothing new for some Net companies. European dot-coms have been charging customers VAT since their inception. Their overseas rivals, though, have been exempt, making foreign companies an obvious choice for the bargain-hunting consumer. "It's a massive competitive disadvantage. It's good to see at last it being eroded," said David Melville, general counsel of U.K. ISP Freeserve, a division of French ISP Wanadoo. Freeserve has lobbied furiously for the past two years to get the loophole closed, saying its chief rival, AOL U.K., the Internet unit of AOL Time Warner, saved $249.7 million in tax payments over the years. AOL Europe has relocated its continental headquarters to tiny Luxembourg, one of the EU's cheaper tax regimes. Seattle-based retailer Amazon.com said the new tax regime will affect its auctions, plus marketplace and zShops operations where third-party new and used items are sold. In addition, VAT will now be charged on software downloads and the sale of e-books, Amazon said. "We'll go out shortly to our seller community about how these changes will impact fees we currently charge," Amazon spokeswoman Patricia Smith said. Online auctioneer eBay will swallow the VAT charge on behalf of consumers in a host of its smaller European operations such as France and Italy. But in the United Kingdom and Germany, its largest and most profitable European units, the company has raised fees to reflect the higher VAT charges.� http://zdnet.com.com/2100-1104_2-1014519.htmlOn

In Israeli Gesture, a Tower Is Removed Near a Settlement As an opening gesture to comply with the new American-led peace initiative, Israeli soldiers drove to a hilltop here in the West Bank and tore down what the Israeli Army described as a watchtower adjacent to a settlement. The rusty tower looked unremarkable. But to the government of Prime Minister Ariel Sharon, it was technically an "unauthorized outpost," one of 14 erected as adjuncts to nearby Israeli settlements that the army pledged today to destroy as part of Israel's commitment to the current peace plan, called the road map, between Israelis and Palestinians. To the angry Israeli settlers who live nearby, the downed tower was a frightening portent: that Mr. Sharon may be willing to bargain away the right they believe that Jews have to inhabit land in the West Bank and Gaza that was seized from Palestinians after the 1967 war. "This is the first step," warned Yudah Yifrach, 27, one of several hundred settlers who came here to protest the tower's removal. But to Palestinian leaders and critics of the settlements, the demolition of the tower showed just how little the Sharon government was actually willing to concede, at least now, in the early stages of the peace plan. At the same time, the army tore down two trailers � both, like the watchtower, empty of people � that constituted another outpost, called Neve Erez South, about 15 miles from here. The move against the outposts came after the Israeli Army demolished 13 Palestinian homes early today in the northern Gaza town of Beit Hanun, including one belonging to a militant, Mussa Sakhawil, who helped carry out a shooting on Sunday that left four Israeli soldiers dead. By tonight, the army reported that it had dismantled five of the outposts, none of them inhabited. Of the 14 outposts scheduled for destruction in the next few days, 10 are uninhabited and so, critics argue, their removal is only the most tentative step toward complying with the peace plan. "It's a phony show that has no value," Nabil Abu Rudaneh, an aide to Yasir Arafat, the Palestinian leader, said in a telephone interview tonight. Few issues present a greater challenge to the peace plan's success than the question of the roughly 200,000 Israeli settlers in the West Bank and Gaza. The plan now backed by the Bush administration has chosen to grapple first with that question through the phenomenon of outposts, which are difficult to define. For several years, Israeli settlers have been expanding the reach of their communities by erecting what they call outposts, usually on nearby hilltops. They generally consist of a few structures, some with water and electricity, put in place for various overlapping reasons, as a marker for future expansion or as retribution when Palestinians kill Israelis. Critics contend that some were built exactly for moments like this one: when a peace plan would require concessions that would chip away at the settlements. Many of the outposts are uninhabited. The first phase of the peace plan requires that Israelis � led by Mr. Sharon, a longtime supporter of the settler movement � dismantle all the outposts erected in the last two years since he came to power. Peace Now, an Israeli group that monitors settlements, says 62 such outposts have been built since 2001, mostly in the West Bank. But Mr. Sharon's government puts the number closer to 100 and says that it will destroy only those outposts built without government authorization, a qualification not included in the peace plan itself. The dispute over what exactly constitutes an outpost was evident tonight as soldiers tore down the tower on a hill near the settlement of Ofra, which was founded near the Palestinian city of Ramallah in the mid-1970's. It also showed the complications for Mr. Sharon as he seeks to comply with the terms of the peace plan without alienating his core political constituents. On one hilltop is a community called Amona, founded three years ago and holding roughly 25 young Jewish families and their children. On another, until tonight, was the watchtower. Peace Now said it considered the houses and the tower part of the same outpost. The government apparently disagreed, dismantling only the tower and saying it had taken down a separate outpost. "The whole story is rather tricky," said Dror Etkes, who monitors settlements for Peace Now. "The government obviously has right now the interest to present itself as dismantling settlements. But I think what they are doing now is splitting existing outposts and giving them separate names." Until now, he said, his group considered the tower part of the outpost. "Obviously, they don't want to dismantle Amona, with 25 families very established." http://www.nytimes.com/2003/06/10/international/middleeast/10SETT.html?pagewanted=all&position=