Frankfurt - European shares staunched early big losses Monday amid renewed hopes about interest rate cuts and after some positive US economic data.

As trading on European stock markets drew to a close, Europe's blue-chip Stoxx 50 was down by 2.0 per cent at 2076 points.

However, with Wall Street swinging between positive and negative territory, the Stoxx 50 index pulled back from steep declines run up in the morning session.

Beirut - The head of Lebanon's anti-Syrian ruling majority, Saad Hariri, has met for the first time in two years with pro-Syrian Hezbollah chief Sheikh Hassan Nasrallah, it was confirmed Monday.

The meeting, which took place Sunday night, was described by close sources to both leaders as "fruitful and essential to preserve national unity."

A statement issued by both parties Monday said: "There was an affirmation of national unity and civil peace and the need to take all measures to prevent tension ... and to reinforce dialogue and to avoid strife regardless of political differences."

Jerusalem - Israeli President Shimon Peres gave the green light Monday for the country to hold new elections, telling parliament that consultations he had held with political parties led him to conclude that no legislator had enough backing to form a coalition government.

The president had completed the consultations earlier Monday, a day after Foreign Minister Tzipi Livni informed him that she was unable to form a government to replace that headed by Ehud Olmert, who resigned the premiership on September 21.

London  - Syrian Foreign Minister Walid al-Muallem Monday accused the US of "criminal and terrorist aggression" by launching a raid on civilians in which seven people, including three children, were killed.

Speaking at a news conference in London, al-Muallem urged the US government and the government of Iraq to investigate the incident and to "report back" to Syria.

The minister said the fact that the raid took place during daylight was proof that it was a "determined" attack.

Stockholm  - Banking shares took a hit Monday on the Stockholm stock exchange as the Swedish central bank said it would offer a 1-billion-kronor (125 million dollars) loan to the Carnegie Investment Bank AB.

The group's shares continued their recent slide, and had plunged some 60 per cent at midday but late-afternoon were down 50 per cent. The Stockholm OMXS index also recovered some ground and was off 3 per cent.