Berlin - The German government reacted with fury Wednesday to an admission by federal bank KfW that it passed 300 million euros (420 million dollars) to Lehman Brothers only hours before the US bank failed.

The sum was part of a swap arrangement, said a KfW spokesman in Frankfurt. He said there had been a "technical" blunder.

Critics said a prudent bank would have held on to the money, knowing from Sunday news reports that Lehman was broke. Swaps are often programmed in advance into computers so that they happen without human intervention.

Paris - After opening sharply higher in the wake of the US Federal Reserve's bail-out of insurance giant AIG, French shares were pulled into the red on Wednesday by a weak Wall Street, ending the session at a low for the year.

The Paris Bourse's benchmark CAC 40 closed off by 2.14 per cent, at 4.000.11, with losers outnumbering winners by 13 to 1.

The losers were led by troubled Franco-American telecoms equipment supplier Alcatel-Lucent, which slumped by 8.51 per cent, to 3.15 euros, and steel producer Arcelor-Mittal, which lost 7.96 per cent, to 39.67 euros.

Buoyed by the AIG rescue, insurance giant Axa was one of the session's bright lights, gaining 0.30 per cent, to 19.82 euros.

Brussels - The United States "wants to work with Pakistan" to boost security along its border with Afghanistan despite the row over US attacks into Pakistani territory, a senior US official said Wednesday in Brussels.

"We want to work with the Pakistanis because we know that long-term stability and security is only going to come from them," US Assistant Secretary of State Richard Boucher told Deutsche Presse-Agentur dpa.

New York - US stocks fell sharply on Wall Street's opening bell Wednesday after the Federal Reserve agreed to make an 85-billion- dollar emergency loan to struggling insurance giant American International Group Inc (AIG).

The Dow Jones Industrial Average fell more than 200 points, some 2 per cent, within minutes of trading. The broader Standard & Poor's 500 was down as much as 25 points.

Shares in financial firms were among the worst performers to start the day.

The US central bank late Tuesday agreed to make a two-year, 85- billion-dollar bridge loan to AIG and will take a controlling stake in the company, which had been threatened with insolvency if it could not raise the needed capital.

Sana'a, Yemen - Sixteen people, including six policemen and six al-Qaeda militants, were killed in a car-bomb attack outside the US embassy in the Yemeni capital Sana'a on Wednesday, officials said.

Interior Ministry sources told Deutsche Presse-Agentur dpa that all six attackers, including one wearing an explosive belt, were killed. A local security guard and three bystanders, including an Indian woman, were also killed.

An Interior Ministry statement said two cars loaded with explosives were used in the attack.

"Security guards managed to explode the two vehicles away from the embassy building," said the statement, carried by the official Saba news agency.

Islamabad - Admiral Mike Mullen, chairman of the US Joint Chiefs of Staff, on Wednesday tried to lessen military tensions with Pakistan as he met the country's senior military and civilian leadership.

During his visit, Pakistani helicopter gunships and artillery pounded Taliban militant positions in the country's lawless tribal areas along the Afghan border, killing at least 19 rebels, the army said.

The US pursuit of al-Qaeda and Taliban militants inside Pakistan's tribal belt has strained relations between the two allies and the officials of the two countries have been engaged in a war of words in recent weeks.