Iraq US Defence Secretary Donald Rumsfeld admitted that America had suffered "setbacks" in Iraq, describing the situation as "bleak" during a surprise Christmas Eve visit to US troops in the country. Ukraine Ukrainian authorities vowed to uphold public order during a crucial presidential election rerun this weekend but tensions mounted as the vote drew near, prompting an assurance from Russia that it would not use underhanded tactics to affect the outcome. Thailand Two people including a suspected bomber were killed and at least seven wounded in the latest blast blamed on Islamic separatists in insurgency-hit southern Thailand, police and hospital officials said. Japan Japan threatened retaliation against North Korea such as cutting off economic ties unless the communist state returned Japanese people it has kidnapped or gave a "sincere response" on their fate. Honduras Honduran police investigated a massacre in which 27 people were killed when their bus was strafed by gunfire in what officials suspect was a message from gangs to President Ricardo Maduro and crime-busting politicians. Pakistan A Pakistani military court has sentenced one soldier to death and another to 10 years' hard labour in jail for involvement in an assassination attempt on President Pervez Musharraf last year, a military spokesman told AFP. West Bank Hundreds of millions around the world prepared to celebrate the birth of Jesus Christ, a Christmas festival of religious joy for many and commercial excess for others, against a backdrop of continuing global security fears. Indonesia As the faithful gathered for Christmas prayers, Indonesia braced for possible terrorist attacks with tight security at churches, hotels and other potential targets to safeguard seasonal festivities. Afghanistan Afghan President Hamid Karzai swore in a new cabinet which sidelines powerful warlords and brings in reformers to battle drugs and rebuild the shattered country.