Berlin - Two of Germany's 16 states were on the verge Friday of gaining new premiers, with politicians striking coalition deals to set up new governments in Bavaria and Hesse.

Both moves, which will require confirmation in the states' legislatures, could usher in a more fractious period in the final year of Chancellor Angela Merkel's federal coalition government before September 2009 elections.

The two state coalitions are likely to be viewed by voters as test subjects for the next federal government.

London - London police gave the all-clear Friday afternoon after a suspicious piece of luggage had earlier forced the evacuation of the London City Airport.

Authorities said there was no connection to terrorist activity.

The airport was evacuated around 1330 GMT after several passengers began coughing and complaining of medical irritations. No passengers fell seriously ill and the airport was re-opened two hours after it was closed. Some flights were canceled or re-routed.

Washington - US sales of existing homes climbed 5.5 per cent in September to the highest level in a year as ongoing price declines have apparently begun peaking the interest of buyers, according to new data released Friday.

The National Association of Realtors (NAR) said home resales stood at 5.18 million in September, up from 4.91 million in August and 5.11 million a year earlier. The average price of homes dropped 9 per cent from September 2007.

Paris - After falling to a five-year low, the Paris Bourse rebounded on Friday to limit its losses amidst anxiety about corporate earnings and OPEC's announcement that it will cut oil production by 1.5 million barrels per day.

The benchmark CAC 40 ended the session off by 3.54 per cent, at 3,193.79, after plunging more than 10 per cent earlier in the day to its lowest level since May 2003.

Car maker Renault was the day's biggest loser, giving up 12.55 per cent, to 22.20 euros, its lowest level in 10 years.

San Francisco - Democratic candidate Barack Obama was visiting his ailing grandmother in Hawaii on Friday, and told reporters he feared that the woman who raised him after his mother died would not live until election day.

"Without going through the details too much, she's gravely ill," Obama told ABC's Good Morning America on Friday. "You know, we weren't sure, and I'm still not sure, whether she makes it to election day. We're all praying and we hope she does."

Reykjavik/Washington - Iceland has reached an agreement with the International Monetary Fund (IMF) for a 2.1-billion-dollar emergency loan to help stabilize the country's economy, the two sides announced Friday.

An IMF team agreed to the loan during a visit to Iceland. The Washington-based crisis lender's executive board still has to approve the deal and could do so in early November, the IMF said. If approved, Reykjavik could immediately draw on 833 million dollars under the two-year arrangement.