calling it quits. >> i do not intend to continue my mission. >> kofi annan resigns as peace envoy to syria saying international inaction is blocking efforts to end the conflict. kofi annan took on the job of u.s.-arab league envoy to syria nearly

six months ago. at the time, he called stopping the violence a difficult assignment. that assignment proved too difficult. kofi annan is resigning when his term expires at the end of the month. the former u.n. secretary-general made the announcement thursday in geneva. he condemned the government of syrian president bashar al-assad. kofi annan criticized the security council for being locked in a standoff with russia and china on one side and western nations on the other. >> at the time when we need, when the syrian people desperately need action, there continues to be finger pointing and name calling in the security council. >> annan took on the role last february. since then, he worked to resolve the syrian crisis by mediating between the assad administration and members of the anti-government opposition. u.n. secretary-general ban ki-moon said he accepted annan's resignation with deep regret.

he will start looking for a possible successor. his departure prompted more finger pointing. officials are blaming russia and china for his mission's failure. jay carney says this highlights the lack of support the two countries gave to security council actions against president assad. they vetoed three resolutions. carney repeated the obama administration's call for assad to step down. russian president vladimir putin regrets the resignation calling him a brilliant diplomat. putin is not directly announcing criticism of the divisions. he says he hopes the international community will continue efforts to end the violence. the violence seems far from reaching its conclusion. syrian opposition forces have added some of the assad regime's heavy weaponry to their arsenal, they captured a tank and turned it against government troops in

aleppo. a uk-based government rights group atcked a city near the northern city of aleppo. opposition forces have been operating within the troops. they seem to be bolstering their fire power. neighboring countries appear to be sending them arms and funds. elsewhere in syria, government troops and pro-assad militia men are on the attack and killing targeted a village in the suburbs of the capital of damascus, killing more than 40 people. united nations officials are warning the fighting in syria is compromising the ability for the country to feed itself and 3 million people will likely need food aid in the next 12 months. representatives of the world food program and food and agriculture organization assessed the situation with members of syria's ministry of agriculture reform. and agrarian reform. their report says the worsening conflict has sent farmers

fleeing to safety and destroying farm land. it has affected wheat and vegetable harvests and livestock operations. the report estimates the agriculture sector has lost $1.8 billion this year. it says people who have fled fighting in cities and households headed by women are having difficulty securing food. the agencies are calling for international aid. including monetary help. an fao representative says the livelihoods of vulnerable people could simply collapse in a few months if assistance is not provided. the latest attempts to get talks on iran's nuclear program moving again has failed to make any progress. the chief negotiators for iran and european union say they were unable to narrow their differences. iran's chief nuclear negotiator, sayed jillili, spoke over the

telephone with katherine ashton. a statement released by the eu said the two sides will talk again at the end of the month. in june, iran and the western powers, the united states, britain, france, and germany joined by russia and china held a third meeting in moscow. experts from both sides have been holding technical discussions to clarify the details of iran's nuclear program. the western countries demanded that iran stop working to enrich uranium to 20% for purity. iran refused saying its program is for peaceful purposes only. egypt's first democratic elected president is reflecting the strong influence of the country's military in his new government. mohamed morsi has given members of the armed forces a voice in his cabinet. morsi swore in prime minister khandil and 34 other members of his cabinet. he kept head of the sprep couup

council of the armed forces as defense minister. morsi took office in ne. his muslim brotherhood faced off against the military during the presidential election campaign. he gave four members of the brotherhood cabinet posts. prime minister khandil says rebuilding the economy and restoring security are the priorities for newtly lthe newl appointed ministers. >> the success of government is success for all of us. we are a people's government. we only represent the egyptian people and not a spa secific gr. spanish investigators say they stopped a possible terrorist attack. they arrested three suspected members of al qaeda on suspicion of plotting a bombing in the country or elsewhere in europe. >> translator: i can confirm there are clear signs these

people could be planning a terrorist attack in spain and/or other european countries. the three of them belong to al qaeda. >> the interior ministry release ed pictures of the suspects. investigators say one is from turkey and two others from russia. authorities have not released their names. they say they found enough explosives at the turkish man's home in spain to blow up a bus. police detained the two other suspects while traveling on a bus from southern spain to the french border. european authorities are on high alert for suspicious activity with the olympics going on. in london. spanish authorities have not found any link between the allege ed plot and summer games. hiroshima, nagasaki, the bombings marked a brutal conclusion to brutal conflict. world war ii ended 67 years ago this month.

and "newsline" is looking ban on the lessons from 1945, the fight to abolish nuclear weapons to promote peace. don't miss our special coverage "war to peace lessons of 1945" starting monday, august 6th. >> jaw panaw the insiders stories were about three firms that planned to issue new stocks. the third parties then made illegal profits through insider trading. the financial services agency

says that sales staff gained confidence shall information. generally people on the front line are banned from such access. the agency ordered them to talk measures to prevent a recur sense. it says the firm's information management system was inadequate. the top executive has stepped down to take responsibility for the information leaks. people at japan airlines hatch hit cruising altitude. the stock offering is schedule ford mid september. operators of a state-backed turn around fund will sell off the shares they have in the carrier. the value of the total offer will depend on market conditions. it is expected to top $7.6 billion. japan airlines executives plan to repay the bailout money in full.

the carrier filed for bankruptcy two years ago, debts of $30 billion, the largest ever for nonfinancial company. it posted an operating profit last year of about $2.6 billion. investors are reacting negatively to what the head of the european central bang didn't say. mario droge is promising to tackle debt problems by buying bonds of countries with financial difficulties but he failed to outline his plan. droge spoke thursday after the ecb policy meeting and said the central bank will resume measures to purchase government bonds and take new steps but was short on details. >> there wasn't any specific in stance that led to us have the discussion we had today. there was just the sense of worsening of the crisis ills.

>> he expressed his determination last week to save the euro. this fueled speculation the ecb would take strong measures such as immediate purchase of government bonds. after he spoke this week, the yields on spain's ten-year government bonds rose to 7%. that level its kidded unsustainable. stock prices also plunged around 5%, both in madrid and milan. the euro fell to the 94 yen level at one stage for the first time in a week. we spoke with martin schultz, senior economist as fujitsu research institute about the ecb's decision and asked him about other stimulus measures needed to get the global economy back on track. >> they recognized that a banking crisis is back in europe and they do need to act. the problem is they need to have everybody on board. this is not the case, in particular, the germans are very

reluctant. so action still its not to be expected until september. they have said that they will restart bond big. this is a normal operation for most other central banks in the word, but uneurope this is a big problem because there are simply so many governments with so much fiscal debt. so, some of the players in particular, the german centralc. they will be on board when the banking crisis deepens. and we should expect that, the bond buying program is already in the works. the europe incentive bank now needs to stabilize the banks and banking system. the looming banking crisis. we know how costly this can be from japan and more recently from the u.s. the second point what they will have to push for is that the governments are acting on the fiscal debt situation and finally, also introduce growth measures so that the economies in particular in the south can recover. that would help the global economy.

but this also is the reason why it is so terrible difficult to act fast. they need all of the players on board before any significant measures can take place. well, chinese athletes go for gold at the olympics, back home it is diamond that wealthy chinese are after. not even a country's slowing economic growth is dulling their desire. hoping to profit, overseas merchants are moving to china. nhk world's reporter has the the story. >> reporter: some shop for the gems at the store in beijing. >> a lot of the customers, were born into wealth in the 1980s. some as much as $10,000. >> translator: today i chose my

favorite diamond ring. so i am really happy. >> translator: the sales are going up like mad. so far they're 50% higher than this time last year. so, i am very glad. >> reporter: now owners of foreign jewelry firms are making appearance in china's diamond market. this foreign owned company in beijing, prepare diamonds for sale. the president with the eye for the chinese people's growing love affair with diamonds. he processes and sells them not only in china, but also the united states, japan, and

europe. one incentive for expanding into china is a cost of labor. workers accept lower pay than those in many other countries. even though wages are rising, preparing one cut for sale in china costs only 1/10 of what it does in belgium. china's government supports foreign investment. for example, when he imports diamonds for processing, and then export the finished project. he doesn't pay a cent on duty. >> europe has slowed down drastically. united states growth is very modest. it still is the largest diamond market. there is great reliance and great hope that china can actually compensate for all of these world difficulties. >> processing diamonds right from scratch is not easy.

workers must be highly skilled. young apprentices, receive on the job frani intraining for tw every day. the company brought in engineer from israel for training. that country has made great strides in diamond processing. >> translator: i am confident i can acquire the techniques. i want to become an excellent craftsman in this field. >> some fear that china's slowing growth rate may discourage shoppers from buying luxury goods like diamonds. but klausner is not worried. >> next five to ten years, i think we can see steady and -- and good growth in the chinese

market. >> however, our chinese expert does not share klausner's confidence. >> if a financial crisis should arise, and it spreads to european countries that play a key role indi the diamond tradet will affect china. then i think that the people here will think twice before spending large sums on diamond. >> reporter: so diamond processors could be taking more chances than they were prepared for. if the growth of the china economy takes a turn for the worse, the outlook for the processors won't be nearly so dazzling. standing by in our beijing studio. is beijing the only chinese city in which the diamond trade is expanding? >> actually know, in coastal areas, in the southern part, close to hong kong, the industry

is taking off. government regulators have made this possible by giving foreign diamond processors a lot of encouragement. this becomes clear when you kid what the processors must put up with in india, an industry leader. foreign operators must cut through a lot of red tape to set up businesses there. but in china, policymakers go a long way to encourage foreign processor whose want to set up shop there. as a result, more foreign businesses believe to be about 100 have moved to china to process diamond. that's more than double the number five years ago. the result, are likely to have a bigger choice of diamond, processed in china. >> thank you. that was nhk world's

correspondent in beijing. it's hard to sing after a disaster what a young singer found out after her hometown was destroyed by last year's massive tsunami. but now she has found her voice again and is using it to raise the spirits of her local community as they rebuild their lives. ♪ >> this 13-year-old has just released her first single. despite her school commitments, in recent months, she has been spending plenty of time in the studio. >> great job. you sound perfect. >> translator: this is a once in a lifetime opportunity. so i want to do it right. >> her hometown is otsuchi in iwate prefecture.

there are six in her family. her parents and two grandparents plus her younger brother. she began learning traditional folk songs when she was eight. as her singing improved, they had a dream of becoming a professional singer. then on march 11th last year, her hometown was devastated by the monster tsunami. her family survived and her home was safe, but her school caught fire and burned down. she also lost one of her closest friends. >> translator: it was really scary. everyone was crying. >> following the disaster, she didn't feel like singing for a while. >> translator: it was such a hard time for everybody. it didn't seem right for me to sing out loud.

in fact, i really didn't like singing anymore. >> but one day earlier this year, things changed. she was asked to sing again as part of a performance for people who are still suffering from the disaster. ♪ >> even though she felt reluctant to sing, she did. she noticed people in the audience were moved by her performance. >> translator: at first, i felt i had to go through with it. when i saw people with tears in their eyes, i understood i'm doing something worthwhile. >> she realized that what she can do best is to sing.

it didn't take long before music producer heard of her and soon she found herself in a studio recording her first-ever single. her record has boosted the morale of people in her hometown as they struggle to rebuild their lives. the local radio station has been playing the song on heavy rotation. >> translator: hearing the song really lifts my spirits. >> translator: she is still young, but she is trying so hard. she gives me confidence to get through the hard times. >> with more performances scheduled, she keeps practicing late into the evening. there is one line in the song that has particular meaning for her. >> translator: it's here in the last section of the song. it goes searching for happiness together.

one more time. there are so many people who lost their homes and their loved ones. my singing expresses my hope that everyone will be able to find happiness again. ♪ now it's over to rachel ferguson for an update on the latest storms. it looks things are getting rebusy in the tropics. >> we have been tracking several storms this week. this is coming out of taipei, and northern regions of taiwan. more than 1,700 millimeters. 1.7 meters of rain fell since tuesday. we are talking about extreme volumes of rainfall. it resulted in canceled flights. winds in fact destroyed two jet ways in the airport.

and transportation was almost absolutely paralyzed. of course, much more important than that was the loss of life. five people were killed. more than 6,000 people have been evacuated due to the ex-ten sieex-ten -- the extensive floods. the system is a potent one. now downgraded to a tropical storm. and made landfall in fujon province. inland to china, still see 250 millimeters of rain from the system into the next 48 hours. 24 hours, in fact. it its expected to become a tropical depression by tonight. still will be a lot of tropical moisture with this system. now up towards the north we have another band of heavy rain. this is tropical storm.

it is now curling up towards the northeast. again, we are going to see heavy rain into the next 48 hours. upwards of 200 millimeters in some places and it is also going to be bringing heavy rain into northwestern portions of north korea. north korea has baeen another place hit by flooding and landslides over several weeks. three different systems brought devastating flooding and loss of life here as well. it is going to be a really critical situation. then we have another system. this one is a tropical storm that has formed over the ogasawara islands at the moment. moving in a westerly direction. by sunday expected to come very close to okinawa. also, to be, strengthening to a typhoon, by monday. now, as you can see it is going to be coming close to taiwan once again. it doesn't look good. could be dealing with a very powerful storm, once again, as

we head into next week. and with the potential to be devastating, the same areas that have been hit by this week's storms. very, very busy here. then we go to the atlantic. we have a tropical storm. ernesto. moving west s in-- into the wes caribbean. tropical storm warning for western tilles. 120 millimeters of rain into the next 24 hours. storm surge with us as well. and it is expected to become a hurricane by sunday. let's take a look at what is happening across the u.s. and canada. plenty of well-needed rain across much of eastern and central portions of the u.s. however, storms to the north could get nasty. and to the south, nothing is happening with that dome of heat. 42 degrees in oklahoma city. many of you in the southern plains will deal with the heat wave into the weekend. here is your extended forecast.

>> that's all for this edition of "newsline." we'll be back with more news at the top of the hour. i'm kanako sachno in tokyo. thank you for joining us.