>> hello and welcome to the "journal." our top stories at this hour -- washington calls for further sanctions against iran in response to an alleged plot to kill the saudi ambassador, a charge that iran rejects as absurd. european union's top official unveils a plan for how to prevent a full blown banking crisis. and the world's biggest book fair gets under way in frankfurt.

the american and saudi arabian pressure on iran over an alleged assassination plot is mounting. a saudi official says iran will pay the price for the plan to kill the saudi ambassador in washington. the u.s. was threatening a new round of sanctions against the country as well. iran has rejected the charges, saying the allegations are made to deflect attention from america's economic problems. >> washington is urging the world to take action against tehran. u.s. officials say the plot goes right to the top. this was the secretary of state's response. >> a dangerous escalation of the iranian government's longstanding use of political violence and sponsorship of terrorism. >> the u.s. says this man was the target, the saudi ambassador, a close aide to king abdullah, sent to washington

after see september 11 attacks to help repair the king's image. one of the attackers was arrested last month. officials say he initially cooperated with authorities and made contact with another suspect, now said to be in iran. saudis say the evidence of official iranian responsibility is overwhelming. the gulf cooperation council of regional states has also condemned the plots. tehran has angrily denied the allegations, calling them ridiculous. the foreign ministry says the u.s. is trying to sow discord between iran and saudi arabia. >> let's go live to washington and our correspondent there, max hoffman. americans are saying that the plot goes all the way to the top. what does that mean for american-iranian relations? >> it means that the americans see this as a case of state- sponsored terrorism and that they will try everything to build pressure on the iranian government. that is why vice-president biden

said today that all options are on the table, and the speaker of the white house basically said the same thing. but it is highly unlikely they will deploy military action. they will probably rely on a strategy of toughening sanctions. for example, economic sanctions, unilateral sanctions from the united states. also going to the united nations security council that has already past four rounds of sanctions over the last five years towards iran. talks are under way already on wednesday to do that at the united nations security council. >> what about the basis for these charges? are the accusations completely sound? >> there is definitely substance to them. they were confirmed officially and unofficially behind closed doors. it is highly unlikely the u.s. government would go out and accuse another state of sponsoring terrorism on u.s. soil as they were not completely sure what they were doing.

it has a completely new quality to it. on the condition of anonymity, we have heard officials also say that they think the ayatollah know about this. that it is highly likely he knew about this. the speaker of the white house when in the same direction. talking to experts, they are skeptical because they say the whole planning thing is very unlike what iran has done in the past couple of years. it is a typical and kind of unprofessional -- it is atypical and kind of unprofessional. officially, there remain some doubts. >> thank you so much for that update from washington. in europe, the eurozone bailout package is set to get approval from the very last remaining country yet to ratify the package, slovakia. four political parties there say they will back the plan, paving the way for a second plan in parliament.

legislators said no to the plan yesterday and brought down the prime minister's government in the process. meanwhile, the european commission president has unveiled his plan, when he says will prevent the eurozone sovereign debt crisis from further threatening to destabilize european banks. the proposals are aimed at coordinating the recapitalization of struggling banks across the eu and pushing those banks to take on more low- risk assets. the plan faces a crucial test on october 23 when eurozone member states meet for a key summit. why has he chosen this particular time to present the plan? i put that to jeff meet in brussels who is covering the story for us. >> it is a bit of a surprise initiative. i think he decided to push the initiative forward, seeing more negative headlines on the way if

somebody does not do something. why now? because there is a forthcoming summit. he knows the french president and german chancellor are planning their own joint initiative next week. i think there is unfortunately an internal war going on between these big figures over who is actually in charge. he's quoted as saying this is the one that must be approved when they meet on october 23, but, of course, the problem is he has set out a plate -- pretty clear agenda and if it does not happen on the day, if there's any fallout, then the market will not like that one bit. >> it is not just banks but governments as well that need help. is there a sense that with slovakia soon to be on board, the eurozone bailout fund can move ahead? >> it can, but the problem we have is what they have set out is a blueprint far bigger than

the one that slovakia is probably going to approve in the next few days. in other words, the panic about this bailout fund has been overtaken by everyone saying that maybe we need a bailout four times that amount. maybe slovakia will enable the eu to move ahead and the market might rally on that is, but there are more problems around the corner and a much bigger bailout. in other words, member states may need to put up far bigger guarantees to satisfy markets. >> thanks for the analysis. germany is continuing its push for a global tax on banks. >> that is right, but it still yet to be seen if this is far- reaching. germany is ready to introduce a tax on financial transactions on its own of other european countries are not willing to take part peer the germans find -- the german finance minister said it would be preferable for

the tax to be introduced around the globe or at least across europe, but he said implementing the tax on the national level would be possible. the tax has been proposed by german chancellor angela merkel and french president nicolas sarkozy to raise revenue. as we heard, slovakia will back the expansion of the eurozone rescue fund despite the initial vote against it. the news give markets a boost on wednesday as investor confidence returned -- the news gave markets a boost on wednesday as investor confidence returned. >> it was simply an astonishing day here at the stock market in frankfurt. there were strong gains almost across the board, the dax leaping over 6000 points at one point in the day. people were pleased to hear that the euro bailout fund would be signed off on in bratislava.

steel shares among the biggest gainers. the world steel council pleased to promote the development of production records this year and further growth, albeit a little bit weaker, for next year. there were also some pessimistic points from the steel industry, but on this day, they were simply overheard. >> let's take a look at those market numbers starting in frankfurt. dax closing 2.2% -- up 2.2%. the dow industrials closed at 11,518, a gain of almost 1%. in currency markets, the euro trading at $1.3790. it is difficult to get a job if you are young and living in the united kingdom. u.k. unemployment is reached a 17-year high, and the nation's youth have been the hardest hit. the official figure came in at nearly 2.6 million people out of

work. that is about 8.1% of the work force. the global economic slowdown and cuts in government spending are causing the high unemployment numbers, which will only intensify in the near future. as many as 300,000 public sector jobs are set to go. private-sector has so far been unable to make up for those losses. german chancellor angela merkel has our arrived in the capital of monthly as part of a two-day tour of asia to strengthen trading ties. she started in vietnam where she signed a strategic partnership and called for the country to open its trading policies. germany and vic -- germany is vietnam's's largest european trading partner -- germany is vietnam's largest european trading partner. in mongolia, the nation will focus on mining companies.

germany wants to securities of the pie. it is the first ever visit to mongolia by a german chancellor. >> the capital of mongolia is booming. for years, the remote city of about 1 million was a quiet backwater, ignored by international investors, even after mongolia became a democracy in 1990. but that has now changed. the mongolian economy posted over 6% growth last year, and is forecast is to expand by 10% this year. the country's vast deposit of raw materials are driving the upswing. many mongolians are not benefiting from the boom. more than 1/3 are living in poverty, but they hope to benefit in coming years. huge deposits of copper and coal are located in sparsely populated expanse out that the capital appeared international mining conglomerates have been lining up to extract those resources, including german companies. they are also interested in a rare earth metals, which are

essential to the high-tech industry -- they are also interested in rare earth metals. >> flood waters from the worst flooding in thailand in decades are making their way to bangkok. flood waters have burst through barriers around a town just north of bangkok. people forced from their homes trying to save what they can. residents are stocking up on groceries, bracing for the flood waters that could reach the city in the coming days. officials in new zealand say the stricken car dealership reyna may be about to break up. hundreds of tons of oil have already leaked into the seas. the ship's captain faces charges over the incident in a new zealand court. burma is freeing hundreds of

political prisoners as part of a general amnesty. rights groups have welcomed the news but are urging that all political prisoners be released. some 100 walked free wednesday morning, including some well- known dissidents. it is estimated that about 2100 people serving time in burma because of their political convictions. the country is considered one of the most oppressive in asia. to libya now where troops there loyal to the interim government say they are close to control of muammar gaddafi's hometown, sirte. they are coming up against less resistance, but loyalists of the ousted leader are putting up a fight. the transitional government believes gaddafi himself may be in a stronghold where heavy fighting is being reported. a delegation from the palestinian islamic hamas movement has arrived in cairo,

egypt, to finalize a prisoner swap deal with israel. under the agreement, israel is to free 1027 palestinian prisoners in exchange for its soldiers held captive in the gaza strip for the past five years -- in exchange for its soldier held captive. member for months, they can out in front of the prime minister's residence, demanding action. now, they are celebrating. >> even though much time has passed and netanyahu is the second prime minister since he was captured, we commend his success. >> late tuesday night, israel's cabinet agreed to the prisoner swap deal, which was brokered with egyptian support. prime minister netanyahu foist his gratitude. >> i thank the german mediator and angela merkel, who supported the mission throughout. >> the soldier was captured in 2006 when militants tunneled into israel from gaza.

his contact to the outside world has been limited to a few letters and this video message. palestinians are celebrating the deal in both the west bank and gaza. >> we are making every preparation to welcome our heroes, to bring them back to their land and families. we shall celebrate this historic victory. >> for now, both sides are waiting for the exchange to become a reality. reports say it could begin within days. >> is land is the featured guest country at this year's frankfurt book fair. the country has more published authors per capita than any other nation. -- iceland is the featured guest country. >> fair goers are coming from every corner of the country and the world. in germany alone, 90,000 new titles are published every year. the popularity of thrillers and whodunits is unbroken.

>> people cannot get enough. they want real is that reflect everyday life embedded in a detective story plot. >> one of the best-selling authors on hand this year is from denmark. details of how his inspector gets his man are leaping off the shelves. >> you always want to know whatever is going to happen in the end. therefore, you turn the pages very quickly. it is quite satisfying for an author to know that readers are turning the pages quite quickly now. >> the written and printed book is just as alive and well as ever. >> a serious subject inevitably leads you into a tragedy, and i think you can only overcome tragedy with humor. otherwise, everyone ends up crying. that is a dead-end -- dead end.

>> the frankfurt book fair is proof that readers are not an endangered species. >> the land of volcanoes in one minute. >> stick around. >> out and about in brazil, glimpses of a world that is otherwise closed to outsiders. the outskirts of rio de janeiro.

illegal settlements. catastrophic living conditions. violence. sustainable project aimed to change the situation for the better. the interactive web documentary on ideas for a cooler world. >> welcome back. iceland is the destination at this year's frankfurt book fair. while the nordic island is well known for its plain-stopping bacchanals and for being the only country not to bail out banks, it's rich literary tradition has received less attention -- well known for its plane-stopping volcanoes and for being the only country not to bail out banks, its rich literary tradition has received less attention. to hundred icelandic books are featured in the original and in other languages -- 200.

for icelanders, the long winter days is their favorite time to read. the average is letter reads datebooks a year, sometimes even in old icelandic, which dates back to a least 1000 bc. iceland's president said without its linguistic and literary tradition, iceland would not exist as a nation. island is located in the north atlantic in a letter to chosen precisely for its remoteness by norwegian sellers seeking freedom in 938 bc. the sagas are very much tied to the nation's breathtaking natural beauty. >> take a journey through iceland, and some stunning scenery awaits you. it is a wild and desolate landscape, the perfect place to find literary inspiration.

iceland traces its literary tradition from medieval sagas right up to the present-day -- present day. the former president of iceland is currently running icelands booth at the book fair. she says nothing is more important in iceland than the written word. >> the icelanders are very artistically minded and very creative. there is very little material in the country to mold sculptures or paid paintings as in other countries -- or paint paintings as in other countries because we have no trees. we have nothing for building a castle or whatever. our castles are in the sow this. >> iceland is indeed full of creative spirit. a culture center has sprung up

in this former power station. one of iceland's more successful younger officers has an office here -- younger authors has an office here. he wrote the nonfiction best seller "dreamland," a critique of the belief in nonstop economic growth. >> you would write an article in a newspaper, but when you write a book, you can take the reader through a whole thinking process. you can almost try to be installed a new program in their brain -- try to reinstall a new program in the brain. >> the book became a movie that received international acclaim.

she steers clear of data politics in her books. critics hailed the author, his latest novel tells the story of fear of commitment and loneliness. >> i write specifically for the icelandic reader, and i am not sure if my books are typically icelandic or if i want them to be. i really want to take part in their international dialogue somehow. i think of literature like dialogue. >> nearly 200 books from iceland have been translated into german on the occasion of the frankfurt book fair. a fair number of icelandic books were also published in the united states. people are finally getting a chance to discover the country of literature. >> ever since the advent of the

electronic book, there have been apocalyptic predictions about the future of the printed word. in germany, ebooks make up only 1% of the market, but they are not the only way technology is changing things. online retailers of old- fashioned paper books are posing a threat to traditional bookstores. this year, one of the biggest in the u.s., borders, filed for bankruptcy. those that want to survive are taking notice. many are specializing in genres and reinventing themselves. >> crime. art. cookery. 3 bookshops in berlin have built themselves a solid customer base by specializing. the first we visit sells crime fiction. it has an extensive collection on its shelf. many books here are available in the original english.

the owner is regarded as an expert in the field. >> i spend on average 12 hours a day dealing with this is john rock, and i have been doing that for over 12 years -- dealing with this genre. i would be stupid if i did not know more about it than other people in the business. i just do. >> the store stocks all the latest releases and has a big second-hand section, which is also popular. >> i like it. it is like recycling. you get to know office without spending lots of money before you buy their new books -- you get to know authors. >> our second specialist bookshop focuses on photography, art, and architecture. they stop some 20,000 titles, and their reputation goes far beyond berlin's city limits -- a

stock some 20,000 titles. they attract customers from all around the world. it is all done by word of mouth. we're now in america, italy, asia, and so on -- we are now known in america, italy, asia, and so on, and we are trying to foster that. >> this portfolio of works from german artist in 1967 is worth 300 euros today -- works from german artists in 1967. the shop has been in business for over 37 years. its experienced staff do not expect the burgeoning online bookstores to pose a threat to their livelihoods. >> i think the business will continue to be about dealing with nietzsche's -- niches. it is about modesty. the entire sector could benefit from a more modest approach. >> third on our list is heaven

for foodies. whether your taste is for sweet or savory, you will find it here. cookbooks are all the rage, thanks in part to british celebrity chef jimmy oliver -- jamie oliver. he came along and sparked a lot of people's interest in cooking, especially with younger people. my bookshop catered to them perfectly. >> having ingredients and utensils close by has also helped sales at attractive business. >> combination is very good. you have cookery books and at the same time kitchen utensils on sale. it is a very nice idea. >> bright ideas that keep the customers coming and books that they will love to read. it is a potent combination shared by all three of our specialist bookshop, and it is exactly what they need to keep

their internet rivals at bay. >> that is our "in depth" as the frankfurt book fair gets under way.