Stung by defeat on a cherished economic reform, Prime Minister Junichiro Koizumi will lead a bruised and fractured ruling party into elections next month amid the prospect of being ousted from power after almost 50 years of uninterrupted rule.

Privatizing the post office's staggeringly rich savings-account system has been a decadelong quest for Koizumi. But bills to break up Japan Post and create the world's biggest bank were rejected by Parliament's upper house yesterday with the help of defectors from his own Liberal Democratic Party.

Koizumi retaliated by dissolving the legislature's more powerful lower chamber and scheduling a Sept. 11 election for its 480 seats. He said Liberal Democratic Party foes of postal reform wouldn't get the party's support in the ballot, which he vowed to make a referendum on the plan.

Political analysts said the campaign that officially begins Aug. 30 would likely splinter the LDP into rival camps and give the strengthening Democratic Party a chance at forming a coalition government.

Rio de Janeiro, Brazil

Nuclear program acknowledged

A former president has disclosed that the military dictatorship that ruled Brazil for two decades tried to develop an atomic bomb, but says the program was scrapped when an elected government assumed power in 1985.

The 1964-85 dictatorship was long suspected of seeking nuclear weapons, but ex-President José Sarney's comments Sunday were the first confirmation of the program.

Sarney, who led the first democratic civilian government after the dictatorship ended and previously denied the existence of the program, said he was informed that the military had dug a deep well for an eventual nuclear test explosion in a remote area of the northern state of Para. He did not say when or how he received the information, but it was shortly after he became president in 1985.

Buenos Aires, Argentina

Bosnian Serb fugitive captured

A former Bosnian Serb paramilitary leader, wanted by a U.N. tribunal on charges of crimes against humanity, was captured yesterday in Argentina, officials said.

Milan Lukic, who was indicted in The Hague, Netherlands, in 2000 in connection with a string of notorious killings dating to the Bosnian war, was awaiting questioning after his arrest here, authorities said.

A Serbian court sentenced Lukic in absentia to 20 years in prison for his role in the abduction of 16 Muslims from a bus in eastern Serbia in 1992.

Lukic, as a reputed member of a notorious paramilitary group called the Avengers, allegedly took part in the abduction of 15 Muslim men and a woman who were later taken to Bosnia, tortured at a hotel, executed and their bodies dumped in the Drina River.

Palermo, Italy

Investigators focus on plane fuel, gauge

Investigators are focusing on whether tainted fuel or dwindling fuel supplies played a role in the crash of a Tunisian charter plane at sea that left at least 13 dead, officials said yesterday.

Investigators say it is rare for both engines to give out — in this case within minutes of each other. The head of Italy's civil aviation agency ENAC, Vito Riggio, said authorities were investigating the possibility that the pilot failed to check how much fuel was on board or that the fuel gauge malfunctioned. Other officials suggested impurities from the refueling tanker could have contaminated the fuel supply and clogged the motors.

The Associated Press and Reuters contributed to this report