US President Barack Obama says he is "deeply troubled" by violence in Iran following last week's disputed presidential elections.

Mr Obama called on Iran's leaders to respect free speech and the democratic process, and said he would continue pursuing tough dialogue with Iran.

His comments came after hundreds of thousands defied a government ban and attended an opposition rally in Tehran.

At least one person was killed after shots were fired during the protest.

In his first public comments on the situation in Iran, Mr Obama said: "I am deeply troubled by the violence that I've been seeing on television.

"I think that the democratic process, free speech, the ability for folks to peacefully dissent, all those are universal values and need to be respected."

But the BBC's Jonathan Beale, in Washington, says the president studiously avoided any comment on the allegations of vote fraud.

"We respect Iranian sovereignty and want to avoid the United States being the issue inside of Iran," Mr Obama said.

'Political earthquake'

Earlier on Monday, hundreds of thousands of people, some shouting "death to the dictator", marched through the streets of Tehran to protest against the re-election of President Mahmoud Ahmadinejad.

Iran's conservative-dominated Guardian Council is considering complaints filed by Mir Hossein Mousavi and fellow defeated candidate Mohsen Rezai, alleging that the poll was rigged.

The BBC's Jon Leyne, in Tehran, says the rally was the biggest demonstration in the Islamic republic's 30-year history and described it as a "political earthquake".

The government had outlawed any protest following two days of unrest, with the interior ministry warning that "any disrupter of public security would be dealt with according to the law".

Despite this, correspondents said riot police had been watching the rally during the afternoon and had seemed to be taking no action.

The first indications of trouble came at about 2045 local time (1615 GMT), when protesters were beginning to disperse from Tehran's Azadi (Freedom) Square.

An Iranian photographer told AFP news agency that the shooting happened outside a base of the Basij volunteer militia, which was set on fire. The dead man had been shot in the head.

Fire on the streets of Tehran as mass protests continue

Pictures of the incident showed armed men, in civilian clothes but wearing helmets, pointing guns at the crowds from the roof of the base. The photographer said the protester had been killed by shots fired by the armed men.

Other sources told the BBC as many as six people might have died in the incident.

A BBC correspondent said there had also been gunfire in the north of the city - traditionally an anti-government stronghold - and that the security forces appeared to be hunting down protesters.

There was a large police presence on major streets of the city on Monday night, but evidence of few ordinary people, our correspondent added.

Earlier, the demonstrators had gathered in Tehran's Enghelab (Revolution) Square, chanting pro-Mousavi slogans.

"Mousavi we support you. We will die, but retrieve our votes," they shouted, many wearing the green of Mousavi's election campaign.

Mr Mousavi eventually appeared, addressing the crowd from the roof of his car.

"The vote of the people is more important than Mousavi or any other person," he told his supporters.

Elsewhere in Iran, pro-Mousavi demonstrators were reported to have clashed with police in the historic city of Esfahan and the north-eastern city of Mashhad.

Police in Shiraz, south-west Iran, fired into the air to disperse demonstrations, witnesses said.

A crowd of about 2,000 people also took to the streets in the heavily Arab city of Ahvaz near the Iraqi border, reports say.

Mr Mousavi has said that another rally is planned for Tuesday in north Tehran.

The 12-member Guardian Council is due to meet Mr Mousavi and Mr Rezai on Tuesday to discuss their grievances.

State television reported that Supreme Leader Ayatollah Ali Khamenei, who has upheld the election result, urged the Guardian Council to "precisely consider" the complaints.

But the Iranian leadership has put itself in an impossible position, our Tehran correspondent says.

He says that Ayatollah Khamenei has given his complete endorsement to the election result and to President Ahmadinejad, and by doing so he has put at risk the very foundations of the Islamic republic.

'Completely unacceptable'

Dozens of opposition activists have been arrested since the protests began, while internet sites appear to have been blocked and the media heavily restricted.

UN Secretary-General Ban Ki-moon said he was following the situation closely.

"The position of me and the United Nations is that the genuine will of the Iranian people should be fully respected," he told reporters.

EU foreign ministers expressed "serious concern" and called for an inquiry into the conduct of the election, while France and Germany each summoned their Iranian ambassadors to explain what was going on.

German Chancellor Angela Merkel criticised the use of "completely unacceptable" force against protesters and called for a "transparent evaluation of the election result".

While the result of the election is disputed, correspondents note that Mr Ahmadinejad does have the backing of millions of Iranians.

Groups of his supporters gathered outside French and British embassies in Tehran on Monday, protesting against what they consider to be foreign interference in Iran's affairs.

"We have gathered here to protest the hidden interference of the Brits and the world, who are trying to create chaos in our country," one protester said.

Cesc denies making Barca claim

Cesc Fabregas has denied reports he said he would go to Barcelona if he received a call from Pep Guardiola.

Fabregas come up through the youth ranks at Barca before moving to Arsenal as a 16-year-old in 2003, and the Spain international has been regularly quizzed about a possible return to the Nou Camp over the last few years.

Fabregas has always maintained he is happy at Arsenal, and in his latest comments about a possible switch to Barca he has repeated that same message.

However, he was also quoted as saying by Spanish newspaper Sport that if Barca boss Guardiola were to get in touch with him it "would be different".

Fabregas admits he holds Guardiola in special regard, saying in Sport: "I've always looked up to him. I've always played in his position, I've liked to wear his number four shirt...

"When I was small he was my footballing hero, the player I liked most. I've tried to imitate things that he did and as a coach he's shown again what he can do. He is a person who will always be important in my life."

He added: "It's very clear that it would be special (to receive an offer), but I'm also very clear that Arsenal have made me captain, and for that I have added responsibility, which ties me more to the club and gives me greater hopes of lifting a title as captain of the Gunners."

Fabregas, who is currently with Spain at the Confederations Cup in South Africa, said: "If you don't win titles you cannot be happy, although it's true that we didn't finish badly. It hurt us a bit to lose in the semi-finals of the Champions league and cup. We couldn't take the final step.

"We lack a little to get to finals, like Chelsea in the cup or Manchester United or Barcelona in the Champions League."

Fabregas later denied reports he said he would go to Barcelona if he received a call from Guardiola.

He told Radio Marca: "I've never said that. I would be really happy (to get a call from Guardiola) because Guardiola has been my sporting idol forever, and if he called me it would be a big thing.

"You need to be responsible not to fall into these sorts of traps."

The 22-year-old added: "My future right now is in the same place. Arsenal have already said that I'm not for sale, which fills me with pride.

"If some day I left Arsenal, it would not be to stay in England. As everybody knows I really want to play in the Spanish league. In England the top four teams are much better than the others and in Spain it is more even."

Murray lays down Wimbeldon marker

Andy Murray became the first British champion at Queen's since 1938 with victory in straight sets over American James Blake.

Murray felt he produced some of the best tennis of his career to lift the AEGON Championship crown, his first grass court success on home soil.

The Scot triumphed 7-5 6-4 and is now hoping for similar success at Wimbledon.

"I played some of the best tennis I've ever played in my life," said Murray. "I was playing well all week and took my chances when I had them.

"I was quite nervous today because no British player had won here for 70-odd years, so it got the nerves going, especially when I was serving for the match.

"James is a very tough player, we have only met once before so I didn't know what to expect. He had a great week and beat a lot of big servers.

"The only thing left is to try and get a grand slam title in a couple of weeks.

"I've played well this week and now I have to focus on getting ready for Wimbledon.

"I'm a long way from winning Wimbledon but if I play my best, like I have done this week, then I have got a chance.

"But I'm up against two of the greatest players of all time in Roger Federer and Rafa Nadal and it will be tough to get past them."

Blake won his first service game to love, but Murray responded by doing likewise and then claimed the first break of serve when his opponent went long with an attempted pass.

It gave the 22-year-old Briton a 2-1 lead but Blake, who has an English mother and has always received strong support at Queen's and Wimbledon, hit back immediately and then held serve to take a 3-2 lead.

The next five games also went with serve before Murray made the breakthrough, converting a break point when Blake overhit a forehand.

That gave the world number three the chance to serve for the set and when Blake netted on set point, Murray took a huge step towards the title.

The first six games of the second set went with serve before Murray secured the vital break courtesy of a sublime cross-court winner and an unforced error from Blake.

Murray was in dominant mood and easily won the following game with a combination of passing shots and powerful serves.

Blake held serve to stay in the match but it was merely delaying the inevitable as Murray held his nerve to take the set 6-4 and become the first British champion at Queen's since Bunny Austin in 1938, the same year in which Austin reached the Wimbledon final.

Israel sets terms for Palestinian state

Benjamin Netanyahu: 'No-one in Israel wants war'

Israeli Prime Minister Benjamin Netanyahu has announced he will back a Palestinian state - but only if it is completely demilitarised.

He said a Palestinian state must have no army, no control of its air space and no way of smuggling in weapons.

In a landmark speech, weeks after the US president urged him to agree a two-state plan, he said the Palestinians must accept Israel as a Jewish state.

Palestinian leaders reacted angrily, accusing him of sabotaging peace plans.

Settlers 'not enemies'

The White House said President Barack Obama welcomed Mr Netanyahu's "endorsement" of a two-state solution as an "important step forward".

The BBC's Paul Wood says Mr Netanyahu broke ground by accepting the principle of a demilitarised Palestinian state, albeit with conditions.

But our correspondent says the question is whether the White House regards this as sufficient to make up for the lack of movement on the issue of Jewish settlements in the occupied West Bank.

In his keynote Mid-East speech in Cairo on 4 June Mr Obama stressed that he wanted all settlement activity to stop.

But in his speech at Bar-Ilan university Mr Netanyahu said settlers were not "enemies of peace" and did not move from his position of backing "natural growth" in existing settlements.

Thorny issues

The Israeli leader offered to talk to the Palestinians immediately and with "no preconditions".

Tim Franks, BBC News, Jerusalem Benjamin Netanyahu has shifted. He has used the word "state", when it comes to Palestinian self-rule. In another deeper sense, though, there has been no shift. Mr Netanyahu's closest aides have been saying for months that they have two over-arching pre-conditions: a public Palestinian acceptance of Israel as the nation-state of the Jewish people, and a complete demilitarisation of any future Palestinian entity. And Mr Netanyahu tersely dismissed the US call for an end to settlement expansion: these people have to live, he said. He described them as "pioneers" and "principled". This is a speech which will shore up the prime minister's position within his right-wing coalition. It is, whatever you think of the rights and wrongs of it, a powerful forehand deep into the back court of the Americans. It will be fascinating to see when and how the Americans return the ball.

"We want to live with you in peace as good neighbours," he said.

Mr Netanyahu also said he was willing to go to Damascus, Riyadh and Beirut in pursuit of a Middle East peace deal.

He went on to tackle the major stumbling blocks in negotiations with Palestinians over the years.

Not least was the issue of Palestinian refugees who fled or were forced from their homes in what is now Israel in 1948 and 1949.

The Palestinians say they and their millions of descendants have the right to return to Israel - which would mean an end to its Jewish majority - but Israel has consistently rebuffed that demand.

Mr Netanyahu stuck to a similar line, saying: "The Palestinian refugee problem must be resolved outside the borders of the state of Israel.

"Any demand to resettle refugees within Israel undermines Israel as a state for the Jewish people."

Another key issue the two sides have failed to agree on is the status of Jerusalem.

Mr Netanyahu insisted the city must be the "united capital of Israel", although Palestinians want it divided to allow them to locate the capital of a future state there.

'Racist and extremist'

Agreeing the principle of a Palestinian state, he said Israel would "be prepared for a true peace agreement [and] to reach a solution of a demilitarised Palestinian state alongside the Jewish state".

But only if "we receive this guarantee for demilitarisation and the security arrangements required by Israel, and if the Palestinians recognise Israel as the nation of the Jewish people".

Correspondents say even with the provisos Mr Netanyahu has added, his comments on a Palestinian state are sure to anger many in his own coalition.

Nabil Abu Rdainah, a spokesman for Palestinian Authority President Mahmoud Abbas, said the Israeli leader's speech "torpedoes all peace initiatives in the region".

Another Abbas aide, Yasser Abed Rabbo, told the AFP news agency that recognition of Israel's Jewish character was a demand for Palestinians "to become part of the global Zionist movement".

The militant Hamas movement, which controls the Gaza Strip, said the speech reflected Mr Netanyahu's "racist and extremist ideology".

Del Bosque cautious after rout

Spain coach Vicente del Bosque urged caution after his side's 5-0 win against New Zealand.

The European Champions extended their unbeaten run to 33 matches with an embarrassingly one-sided win, and were 4-0 up inside 24 minutes with Liverpool striker Fernando Torres grabbing a hat-trick.

Cesc Fabregas was also on the scoresheet with David Villa netting a fifth in front of a sparse crowd in the mining town of Rustenburg.

But Del Bosque was quick to reject any suggestions his side would now cruise to victory in the competition - which includes world champions Italy, hosts South Africa and Brazil - suggesting tougher tests would lie ahead.

"We shouldn't think too much about ourselves after this. We can't think we're the best team because this game was deceptive," he said.

"You have to take into account how the opposition made some things easy for us. We did pretty well in the first half and then there was no need to play the second 45 minutes.

"We did what we needed to do at the beginning, with plenty of control and movement. In the second half we dropped off a little, but it's normal that the players would regulate their efforts."

Meanwhile Torres vowed to continue making history after netting the fastest hat-trick in the history of the Spanish national side.

His strikes over an 11-minute period between the 6th and 17th minute bettered a record which had stood since 1949, and which was equalled just five days ago by Torres' strike partner Villa in a friendly with Azerbaijan.

It was also the quickest hat-trick in Confederations Cup history, with Torres beating the record set by former Liverpool player Vladimir Smicer in 1997.

"This latest achievement is a new reason to be proud. As long as it helps the national team to win games, the players to have confidence and for the fans to take to us then all the better", he said.

"It's a great satisfaction for me to have my name written alongside the greats in Spanish football.

"Now we need to look forward, and score plenty more goals which will allow me a place in history."

One person not listening to Del Bosque's words of caution however was New Zealand captain Tim Brown, who hailed his opponents as "the best team in the world, no doubt".

He added: "At the end of the day we have to put things in perspective. We're playing against the best players in the world and you can't afford to have that kind of beginning and you can't afford to give them that amount of space.

"We have to learn from the mistakes we made and take away some of the positives of the second half because I think there were some."

Obama outlines healthcare savings

President Barack Obama has announced a further $313bn (£190bn) in proposed savings to help reform US healthcare.

His proposed 10-year reform programme is estimated to cost about $1 trillion, and aims to make healthcare available to all Americans.

He said the savings would "rein in unnecessary spending and increase efficiency and the quality of care".

The US spends more than $2 trillion a year on healthcare, although nearly 50m people have no medical insurance.

In his weekly radio address, President Obama said: "I have made a firm commitment that healthcare reform will not add to the federal deficit over the next decade."

Cutting waste

His announcement of the additional $313bn comes on top of the $635bn down payment on reform detailed in the budget proposal submitted to Congress this year.

The savings will incorporate cutting waste in the Medicare programme for the elderly and Medicaid programme for poor people.

Mr Obama, who has pledged to halve the budget deficit he inherited from the Bush administration by 2013, said Medicare and Medicaid could leave the country "with a mountain of debt" that future generations would not be able to pay.

"We cannot continue down this path," he noted.

"I do not accept a future where Americans forego healthcare because they can't pay for it, and more and more families go without coverage at all."

Health reform was one of Mr Obama's key election promises, as he focused on providing healthcare for the 46 million citizens, about 15% of the population, who do have any medical coverage.

Big economies 'stabilising' - G8

The world's largest economies are beginning to stabilise but still face major risks amid an ongoing global recession, G8 finance ministers say.

At a meeting in Italy of G8 nations, the ministers said stock markets were rising, interest rates more stable, and consumer confidence was returning.

However, US Treasury chief Tim Geithner led warnings that it was too early to wind down economic stimulus packages.

He said they should remain in place until a global recovery was under way.

At the meeting in Lecce, which aimed to lay the groundwork for a full G8 heads of government conference next month in the earthquake-hit town of L'Aquila, the finance ministers conceded that the global situation "remains uncertain".

"Significant risks remain to economic and financial stability," the ministers said in a statement released at the end of their meeting.

It highlighted the possibility that unemployment could continue to rise even after output growth resumes.

Joint problems

But they agreed a joint statement which offered signs of hope after nine months of gloomy economic news.

"We have taken forceful and co-ordinated action to stabilise the financial sector and provide stimulus to restore economic growth and there are signs of stabilisation in our economies," the statement said.

Mr Geithner said the "early signs" were encouraging, but injected a note of caution.

"The global economy is still operating well below potential and we still face acute challenges," he said.

"I don't think we're at the point yet where we can say we have a recovery in place," Mr Geithner warned, saying it was "too early" to move away from the interventionist economic policies put in place around the world since the banking crisis of September 2008.

UK Chancellor Alastair Darling said Britain's economic prospects remained linked to those of other G8 nations.

"A lot will depend on other countries making progress: on cleaning up their bank balance sheets; volatility in commodity prices, oil for example. So I think there are reasons to be cautious," he told Reuters news agency.

The meeting comes two months after a full G8 heads of government meeting in London agreed to inject billions of dollars into the global economy.