US markets slip to worst since 1933 as Taleban reject Bush ultimatum

WASHINGTON/ISLAMABAD - Afghanistan's ruling Taleban has rejected an ultimatum from US President George W Bush to surrender Osama bin Laden or face military strikes, as Wall Street markets headed toward the end of their worst week since the Great Depression 70 years ago.

At the New York Stock Exchange, a few blocks from where two hijacked airliners flattened the World Trade Centre on September 11, leaving more than 6500 people dead or missing, investors dumped shares for the fifth straight day.

Wall Street has tossed major stock indexes down 15 per cent to three-year lows as the devastation caused by the suicide attacks sparked massive layoffs, recession fears and plans for military retaliation.

Not since the Great Crash of 1929 ushered in a decade-long slump has Wall Street seen such a week, with some $US1.2 ($NZ2.94) trillion in investor wealth evaporating by Thursday's close.

Bush in a speech to a joint session of Congress yesterday laid the ground for an all-out assault on those he called enemies of freedom.

With the United States rapidly deploying planes and aircraft carrier groups to the Middle East and Indian Ocean, the president demanded Afghanistan's radical Islamic rulers hand over Saudi-born bin Laden and all his top associates and open their camps to US inspection, or share their fate.

"Whether we bring our enemies to justice or justice to our enemies, justice will be done," Bush said in a hard-hitting and determined address in which he pledged to defeat all terrorist organisations "with a global reach" as well as the states that support them.

The Central Asian country reacted defiantly to Bush's ultimatum.

"We are not ready to hand over Osama bin Laden without evidence," Afghanistan's ambassador to Pakistan, Mullah Abdul Salaam Zaeef, said in Islamabad.

He said the government was not bound by an edict from leading Afghan clerics on Thursday declaring bin Laden should be persuaded to leave the country "whenever possible".

Throughout the Middle East, Muslim clerics have warned the United States against attacking Afghanistan and urged the faithful to unite against any US reprisal.

Influential Lebanese Shi'ite Muslim cleric, Sheikh Mohammed Hussein Fadllallah, told worshippers in a packed mosque in Beirut to oppose the United States.

"We should confront them (Americans) with all our means to defeat their tyranny and their arrogance," he declared.

The White House flatly rejected Taleban requests to provide proof that bin Laden was responsible for the attacks, saying there would be no negotiations.

"The president last night made his conditions clear and he said there would be no discussions and no negotiations," said White House spokesman Ari Fleischer.

The United States continued to move diplomatically to shore up support.

A senior Western diplomat in Islamabad said Washington would soon lift sanctions against India and Pakistan imposed after their 1998 nuclear tests and would reschedule $600 million in Pakistani debt.

But international public opinion was mostly opposed to Washington's military plans, according to a Gallup poll in 31 countries.

Around 80 per cent of Europeans and around 90 per cent of South Americans favoured extradition and a court verdict against those responsible for the attacks.

- REUTERS


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