Sir Richard Branson's Virgin consortium is in pole position to take over stricken bank Northern Rock. Business correspondent Phillip Inman says doubts remain as to whether Branson can raise the capital he needs to seal the deal, and if the bank can repay taxpayers the £23bn it was lent by the Bank of England. And the government face questions about its role in setting up the Virgin deal.
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President Bush hosts a summit this week on the conflict between the Israelis and Palestinians. Rory McCarthy reports from Gaza on the slender prospects for achieving a deal in Annapolis, Maryland, despite the presence of Syrian and Saudi officials which have boosted hopes that the talks will be productive.
Nick Clegg is still the frontrunner to become the next leader of the Liberal Democrats. But as Tania Branigan reports, many party members find Chris Huhne a convincing challenger.
John Howard has failed in his attempt to win a fifth term as Australian prime minister. Our Sydney correspondent Barbara McMahon says after a landslide by his challenger Kevin Rudd, climate change is at the top of the new PM's agenda.
The Observer's David Smith reports from Baghdad on the prospects for peace in the Iraqi capital.
And Allegra Stratton's papers review considers a rematch between England and Croatia.
