S&P cuts US rating, flays Congress

US cut its "gigantic military expenditure and bloated welfare costs," another downgrade would be inevitable.

But other countries, such as Australia, France and Japan, said they retained their faith in US bonds.

The downgrade ended a week of growing uncertainty for the world economy.

Fears that the US might be headed for a double-dip recession and the eurozone's debt problems were set to spread to Italy and Spain saw stock market sell-offs around the world.

The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.

This in turn could trickle down to higher interest rates for local governments and individuals.

One initial estimate says that could add an extra $75bn (£46bn) to the US annual interest rate bill at a time when its debt levels are already high.

The other two major credit rating agencies, Moody's and Fitch, said they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.

An unnamed Japanese government official told Dow Jones Newswires Saturday that Tokyo continued to trust US Treasuries "and their attractiveness as an investment will not change because of this action."

India described the downgrade as "grave," while Russia and France said they were untroubled by the rating slip, and Britain's Business Secretary Vince Cable called it "entirely predictable."

The rating downgrade came after a strong pushback from the White House, which called S&P's analysis of the economy deeply flawed and politically-based.

A Treasury spokesperson alleged that there was a "two trillion dollar error", arguing that S&P admittedly used the wrong baseline and erred on spending plans and debt projections.

But John Chambers, chairman of the S&P sovereign ratings committee, defended the decision.

"It's a matter of the medium and long-term budget position of the United States that needs to be brought under control," he said on CNN.

"This is a problem a long time in the making."

He pointed to the White House, Democratic and Republican lawmakers battling for months until the country was on the precipice of default on Tuesday before they finally agreed to a deal to raise borrowing limits and slash the deficit.

Tuesday's fiscal consolidation plan "falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics," S&P said in its ratings statement.

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned" back in April, it said.

"Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising US public debt burden in a manner consistent with a 'AAA' rating."

A debt downgrade is a symbolic embarrassment for President Barack Obama, his administration and the United States, and could raise the cost of US government borrowing - a move that would likely trickle down to most Americans in the form of higher interest rates.

But S&P, which based its case in part on the assumption that Bush-era tax cuts would remain in place, also pointed the finger of blame at Republicans who had insisted that no new tax revenue be a part of the debt deal.

"We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act," S&P said.

There are worries that the downgrade will wreak unpredictable havoc in global financial markets where the US dollar has long been the most important currency, but some analysts believe the cut will not have much impact.

Indeed, despite a downgrade hanging overhead, the Treasury easily auctioned off tens of billions of dollars in new debt this week, and Treasury yields fell to the year's low.

S&P is considered the most influential of the three major rating agencies ahead of Moody's and Fitch - both of which said this week that they continue to review the country's deficit reduction plan for possible downgrades.

S&P first warned Washington of a possible downgrade in April.

Then in July, during the protracted political standoff over raising the government's debt ceiling, S&P placed the United States on credit watch and warned of a possible cut within 90 days.

The plan finally agreed on Tuesday calls for $US917 billion ($878 billion) in cuts over 10 years, but also mandates an as-yet unnamed congressional panel to come up with another $US1.5 trillion in cuts by the end of the year.

Miranda Kerr looks a million miles away as she dines out with happy husband Orlando Bloom

Kerr was the only model who managed to crack a smile at the David Jones parade in Sydney this week, and it worked for her.

For years now, models have such a grim look on their face when they walk down the catwalk.

Hopefully, Kerr's performance on Wednesday night will change things.

She's been a constant presence by his side since he was born, even taking him thousands of miles across the world to Australia with her.

So it was no surprise to see Miranda Kerr looking like she was missing her baby boy Flynn as she dined out with husband Orlando Bloom last night.

The model, 28, looked a million miles away as she and her actor other half met family for dinner in Rose Bay, Sydney, Australia this week.

Even when they all left the restaurant, Miranda looked itching to get a car home as they stood around talking outside.

Orlando, on the other hand, couldn't stop smiling and looked delighted to have a grown-up night out with his beautiful wife.

He even managed a broad smile for the cameras as he grabbed Miranda's hand and led her to their car.

Miranda has been in her motherland for just over a week now where she has been working and spending time with her family.

She flew out with Flynn and was joined by Bloom last week.

Apart from the modelling work she has been doing for department store David Jones, she has not left Flynn's side.

Dani's food bio turns out to be a write-off

A great thing that marathon runners get ... when the whole of your body starts shaking. Well, I'm bonking furiously," the cheeky judge said with a wink. And he's not the only one - with pressure now building on grand finalists Michael Weldon and Kate Bracks to turn up the simmering ratings.

Audience figures for the cooking juggernaut slowed this week, falling well short of last year's average of 2.1 million viewers. Competition from The Block and the new digital channels, combined with criticism of this year's format, resulted in Thursday night's final-two decider delivering just 1.69 million viewers.

Weldon was a short-priced $1.80 bookies' favourite yesterday, with Bracks pulling favour with the female vote in online polling.

Back at the kitchen, the motorcyclist still hasn't moved his bike, and is no doubt racking up some serious parking fines by now. Inside, by the same token, Michael is racking up serious disgust at his revolting sauce.

But anyway now it's Kate's turn, and the judges look admiringly at the way Kate has encapsulated her entire childhood in a salad, which is what you want in a cook, really. Moving on to the prawns, and “prawn and pumpkin's lovely isn't it?” lies Gary. And then a perfect dessert! Which is not, to be honest, good news for the next contestant.

Dani steps up with some plates of things and a bucket of ice cream, symbolising the fact that throughout her life she's never actually finished anything. Moran hopes that the presentation may not be there, but the flavours will be. HAHAHAHAHA you're funny Matt Moran.

So to the tasting, and Dani has cooked the soup too long, which, to put it mildly, is ironic. Preston looks extremely depressed. Why didn't he swap Alana and Dani's dishes when he had the chance? Her second dish turns out quite well, though, or at least they say it does, but then there is a limit to how cruel a man can be in one day. And then the dessert: frozen chalk in a bucket next to a crusty banana. Mmmm! Amazingly the judges don't seem to care for it.

The contestants are called back in, and Alana shows she has at last cottoned on to what this show is all about, by bursting into tears. Michael says he finds it hard to communicate how much he wants this, but then the next second he does, so it wasn't that hard at all.

“One of you will be Australia's next MasterChef,” says Preston, and we have to cut to an ad break just to recover from the devastating cognitive dissonance this fact causes within us all. Our brains recalibrate themselves by musing on which brand of paint is the choice of 9 out of 10 Old English Sheepdogs.

Back inside, “For one of you, the dream's about to end,” says Preston, which is a relief for Dani, who is hoping she will now wake up and find that she's able to cook. Michael looks depressed. His hair is beginning to contemplate self-harm. Everyone watching is struck with an urgent and irresistible desire to cuddle the nearest teddy bear.

But he has nothing to worry about, of course, because FINALLY, AT LAST, AFTER ALL THIS TIME, Dani is going home. The internet instantly becomes 26 per cent more smug. Dani confesses she feels at peace and that she has done “really well” to get this far. Which is, I suppose, one way of looking at it. She leaves, while the other three head upstairs to toast her absence with the champagne of schadenfreude and eat the canapés of meanness.

Shane Warne 'addicted' to diet shake, says supplier

If Liz's smile looks a little on the smug side here it's probably because she's not only pulled off one of the greatest (in terms of challenge rather than result) makeover coups of the decade.

She may have succeeded in buffing, glossing and metrosexualising rough diamond Shane, but she's also achieved some 'Surrendered Male' body language from him at the same time.

Most girls know it's just possible to con their alpha male into the odd pampering session by implying that waxing his legs or plucking his chest hairs are a spiffing warm-up to sex.

But making radical changes to his body language status signals is something else again.

Liz seems to be playing the David Beckham to Shane's Victoria here, walking ahead in confident, semi-protective style, leading her man with her hand on top in the clasp, which is a traditional style of dominance and control.

Not only does Shane's responding hand-curl suggest he's comfortable with this power-balance, his aura of passive submission is emphasised by his free hand, which seems to be tentatively and rather shyly hovering around his belt.

I signed him up about three or four months ago on the diet system," Baker said.

"He loves the stuff, he's addicted."

The St Kilda star said he had even shipped the supplement to India for Warne's final season with the Indian Premier League.

Warne used Twitter to hit out at critics who pointed the finger at his celebrity squeeze for making him shed the pounds.

"I have always taken pride in my appearance and an attack on (Elizabeth Hurley) is unfair. I'm proud of how I look and worked my butt off for four months," Warne said.

A cheeky Hurley this morning offered to let Warne watch her eat real food as he tucked into yet another diet drink.

38 die as US chopper crashes

US senior administration official said yesterday a Chinook helicopter that crashed, killing 31 US special operations forces and seven Afghan soldiers, was apparently shot down by insurgents.

It was the highest number of American casualties recorded in a single incident in the decade-long war in Afghanistan.

Twenty-five of the dead were US Navy SEALs, US television network ABC News reported.

Afghan President Hamid Karzai sent his condolences to US President Barack Obama, according to a statement issued by his office.

Taliban claims to have brought the helicopter down in a rocket attack but it has been known to make exaggerated claims.

NATO said there ‘‘was enemy activity in the area’’.

The helicopter was brought down during an anti-Taliban operation in an insurgent-infested district of the eastern province of Wardak, just south-west of Kabul.

It was shot down by a Taliban rocket that destroyed it, the Wardak governor’s spokesman said after the Taliban had claimed responsibility.

The death toll was given in a statement issued by Mr Karzai’s office and was not immediately confirmed by the NATO-led International Security Assistance Force.

During a joint special operation last night a helicopter crashed and as a result 38 people lost their lives. Among the dead, seven of them are from the Afghan Special Commando Army and the other 31 victims are international forces,” said Zaher Azimy, spokesman for the Afghan defence ministry.

A statement from the Afghan presidential palace said the helicopter crashed in central Maidan Wardak province to the west of the capital Kabul.

The Taliban issued a statement claiming to have shot down the Chinook during a firefight which also killed eight insurgents.

Azimy would not be drawn on the possible cause of the Chinook crash saying: "The incident is already under investigation. As this helicopter belongs to international forces, obviously they will provide details of the crash and the reason.

WA link in Indonesian chopper crash

INVESTIGATORS have blamed bad weather for the crash of a helicopter in Indonesia that killed two Australian mine workers and eight others.

The Australian men, identified by Indonesian officials as Barry Tomlinson and Adrian Aird, were travelling to the Gosowong gold mine in North Sulawesi operated by Melbourne-based company Newcrest Mining.

All 10 people on board the helicopter died, including two Indonesian crew, four Indonesian passengers and two South Africans. All of the passengers worked at the mine.

He was the life of the party, he had an excellent sense of humour, it was very dry, and everyone loved him. He was good. Too good to be gone," Margaret said yesterday.

Mr Aird followed in his father Sydney's footsteps and chose a career in the mines. He completed an apprenticeship as a fitter in Kalgoorlie before moving to Indonesia for the good pay about three years ago.

Mr Aird has three daughters from a previous marriage in Australia and his mother said he told her, when he visited Australia two weeks ago, that he was excited about becoming a father again.

Meanwhile in Perth, Mr Tomlinson's former colleagues at Remote Control Technologies remembered a talented technician and a proud grandfather.

He had visited his workmates only last Friday.

Former colleague Phil Goode said Mr Tomlinson was based in Perth but travelled regularly to Indonesia to work as an adviser.

He left Remote Control Technologies in April and planned to work at the mine for three years in order to save enough money for a comfortable retirement with his wife Lynne.

Mr Tomlinson was a Perth man while Mr Aird - originally from South Australia - had spent time working on the mines in Kalgoorlie-Boulder.

News Ltd is reporting that the other eight victims were employees or contractors of PT Nusa Halmahera Mineral, a joint venture between Newcrest Mining and PT Aneka Tambang.

The group was travelling to Gosowong Mine on Halmahera island. The cause of the crash is not known.

Mr Aird's mother Margaret told the Daily Telegraph her son was about to become a father for the fourth time.

"He was the life of the party, he had an excellent sense of humour, it was very dry, and everyone loved him. He was good. Too good to be gone," she said.

With three children from a previous marriage, Mr Aird was about to welcome his first child with Indonesian wife Joice.

Mr Tomlinson was working as a contractor in Indonesia after previously working for Remote COntrol Technologies in Perth.

Three hurt in suspected drug house blast

THREE people are in hospital with serious burns after a suspected clandestine drug lab explosion at a house in Perth's north.

Police, firefighters and ambulance officers went to the Balga property at around 2.25am (WST) today after a neighbour reported a loud blast, flames and screaming.

Two men, aged 34 and 37, have been taken to Royal Perth Hospital (RPH), the younger man with extensive burns to his body.

A 43-year-old woman with serious burns later presented at Joondalup Hospital and was transferred to RPH.

Police said a number of people were seen running from the house and driving off in a car.

Items associated with the manufacture of methylamphetamine were found in the house.

Police said a number of people were seen running from the property trying to escape the flames in the house. They got into a vehicle and drive away.

A 37-year-old man who lived at the house and a 34-year-old man from Baldivis were taken to Royal Perth Hospital by ambulance.

A 43-year-old woman presented herself at Joondalup Hospital but was transferred to Royal Perth Hospital. She and the 34-year-old man have serious burns.

The organised crime squad is examining the property after a number of items associated with the manufacture of methamphetamine were found inside the house, according to police.

Maddie Pulver fights back after bomb hoax

BOMB hoax victim Madeleine Pulver had a return to normalcy, of sorts, this weekend, four days after being subjected to a terrifying 10-hour ordeal at her Mosman home.

The teenager set off before 7.30am yesterday for a swim before returning home with a friend.

After a quick change, she left the house again, this time accompanied by her parents, Bill and Belinda Pulver, to join teammates from Wenona School for Girls for a hockey match, where she was warmly greeted by teammates.

It is believed to be the first school activity she has undertaken since being held in her home on Wednesday as the victim of an elaborate extortion attempt during which a hoax bomb device was chained around her neck.

As she left,, Madeleine said she just wanted to get on with her life.

''I'm doing well,'' she said. ''Every day is getting better. It's good to be getting back to normal.''

The way individuals cope with trauma is influenced by how their lives have been up until that point, according to Sydney neuro-psychotherapist Trisha Stratford, who said not all victims needed counselling.

''If something like this happens to you and you have had a fairly happy, enjoyable life up until that moment, then you cope with it better.''

Mr and Mrs Pulver stood on the sidelines cheering their daughter on.

Mr Pulver, who said his daughter would return to school on Tuesday, said the family would not feel safe until their daughter's tormentor was caught.

The note attached to Maddie - which featured references to Tai-Pan - did not include instructions for a handover of money, but Det Supt Luke Moore confirmed a "demand" had been made.

Yesterday, the 18-year-old donned her shinpads and headed to Sydney's inner west for an inter-school hockey competition.

Leaving home in the company of her father, Bill, and mother, Belinda, soon before 9am, Maddie clearly relished the opportunity to catch up with teammates.

After laughing and chatting with friends in a warm-up session, watched by a slew of television crews, she took to the field for a spirited game.

Her team eventually went down 2-0, but she was commended for her determination in attending.

There were supportive cheers from the crowd, and her teammates patted her on the back as she returned to the change rooms.

Maddie said she had looked forward to rejoining her teammates, saying her friends had been a "very good pillar of support" following her ordeal.

"It will be good to be back to normal," the 18-year-old said.

Earlier, Maddie took advantage of the warmer weather, heading out for an early morning swim with a male friend about 8am.

It was the same friend who had comforted her on Friday night, cuddling and hugging her during a visit from school mates.

But it won't be all fun and games for Maddie in the weeks ahead.

As she tries to come to terms with her horror bomb hoax ordeal, she will also have to resume her studies for her HSC exams.

Along with her fellow year 12 classmates, Maddie had been scheduled to begin the tests last Thursday - the day after she was attacked while studying alone at her Mosman home.

Staff at Wenona postponed the exams in the wake of the attack, citing the distress the incident had caused all students.

4WD driver tested

Epping woman, 34, who was driving a 4WD carrying 10 children when it crashed on Friday night has been released from the Royal Melbourne hospital after taking a blood alcohol test.

Police were last night waiting for the results before interviewing the unlicensed driver.

The 10 children are in a stable condition at the Royal Children's and Western hospitals. The Pajero ran off the Western Highway and rolled.

Militants retreat from Mogadishu

MOGADISHU — Somalia's Islamist Shebab rebels pulled out of key positions in the war-torn and famine-struck capital on Saturday, with the country's president proclaiming the city "fully liberated."

"Mogadishu has been fully liberated from the enemy, and the rest of the country will soon be liberated too," Sharif Sheikh Ahmed told reporters.

The Al-Qaeda affiliated Shebab insurgents abandoned several strategic positions overnight that were then taken over by government troops.

"We are very happy -- the fruits of bloodshed and the wars that we fought against the rebels are finally attained," Ahmed said.

African Union-backed government troops have been battling Shebab rebels in Mogadishu in an offensive to secure aid delivery routes for victims of the drought threatening some 12 million people in Somalia and other Horn of Africa countries.

"We have two enemies to fight - one of them is the Shebab, while the other is those who try to rob the people," the president said.

"We will not tolerate looting, and anyone found committing such a crime will be brought to justice."

Lawless Somalia is awash with rival militia factions. On Friday, food aid being handed out to famine victims in Mogadishu was looted by gunmen, who killed five people.

However, a spokesman for hardline rebels, Ali Mohamed Rage, said Saturday's withdrawal involved merely "a change of military tactics."

"The Mujahideen fighters applied military tactic changes to undermine the allied enemy of Allah, and you will soon be hearing a good news."

Shebab fighters are waging a bloody campaign to overthrow the country's Western-backed transitional government, and control large areas of the south and centre of the country.

Until Saturday morning, government and AU troops controlled just over half of Mogadishu, including the airport and port, while the Shebab controlled the city's north-east.

"The enemy is defeated, they pulled out of Mogadishu -- and we will fight them to eliminate them from the rest of the country," Somalia's prime minister Abdiweli Mohamed Ali said.

Since February, the African Union mission (AMISOM) with its 9,000 Ugandan and Burundian soldiers has clawed back key positions from the insurgents.

Major Paddy Ankunda, a spokesman for the AU's AMISOM force in Somalia, said they were reacting cautiously to the Shebab's move.

Rebel units began trundling out of the city in pickups before dawn after intense firefights with government forces late Friday night. The Al Qaeda-linked militants headed toward their strongholds across Somalia, a desolate terrain awash with hundreds of thousands of starving families enduring the Horn of Africa's worst drought in decades.

The country "welcomes the success by the Somali government forces backed by (African Union peacekeepers) who defeated the enemy of Shabab," President Sheikh Shairf Sheikh Ahmed told reporters at his residence.

He added: "It is time to harvest the fruits of peace. I call on the Somali people to help and to support their soldiers and point out any Shabab member hiding in homes."

Ali Mohamoud Rage, a Shabab spokesman, told a Somali radio station: "We have abandoned Mogadishu but we remain in other towns. We aren't leaving you. We have changed our tactics. Every one of you will feel the change in every corner and every street in Mogadishu. We will defend you and continue the fighting."

Shabab and its fierce interpretation of Islamic law, which espouses stoning adulterers and public beheadings, were despised in Mogadishu, where residents lived trapped by gunfire and artillery barrages between the rebels and government-backed troops. The capital devolved into a fearful, bloodstained, whittled version of itself as bullet-pocked buildings slumped along the Indian Ocean.

The U.S. has been concerned that the Shabab, which has connections to the Al Qaeda extremists in Yemen, would further disrupt the volatile intersection of Africa and the Middle East. In 2010, Shabab carried out twin bombings in Uganda that killed 76 people; the attacks were retribution for Uganda soldiers taking part in the African Union's peacekeeping mission in Somalia.

The rebels have been particularly brutal to their own countrymen. In recent weeks, they have deterred humanitarian organizations from reaching drought regions under their control, leaving swaths of the country scattered with starving families. Shabab has also been criticized for preventing hundreds of thousands Somalis facing famine from fleeing their territory to international aid camps.

The Islamic militants began seeping across Mogadishu in 2007, a year after Ethiopian troops invaded the country and a transitional government attempted to form a semblance of order among warring clans and religious extremists. The transitional government has received millions of dollars in Western assistance but is rife with corruption, tribal politics and an often noncommitted, underpaid army.

Surges by Africa Union forces, however, had weakened Shabab's grip on the capital. The rebels had been divided on tactics in recent months, and shortly before midnight Friday they launched attacks on government bases and troop positions. Gunshots and explosions rang across the city for hours as government-backed forces advanced on rebel strongholds.

"The government repelled the attacks and we have cleared Mogadishu this morning," government spokesman Abdirahman Omar Osman told The Times. "The security committee is in emergency meeting to restore law and order in the vacuum left by" retreating Shabab forces.

Somalis watched as militants streamed out of the city.

"I saw a convoy of about dozen pickup trucks full of fighters coming from Mogadishu," Osman Farole, a resident of Afgoye, about 22 miles outside the capital, told The Times. "Among the convoy were two black-tinted 4x4 vehicles that are supposed to carry their leaders.

Norway polar bear attack: grieving family pays tribute to Horatio Chapple

JUST before Patrick Flinders headed out on the expedition to the Arctic Circle he and his father posted a short film on the internet to express his excitement over the ''fantastic'' trip.

The 16-year-old, like his friends, Horatio Chapple and Scott Smith, both 17, dreamed of experiencing raw nature and were particularly excited about seeing polar bears in their natural habitat.

However, it was the brutality of the wilderness they had to face after their group was attacked by the world's biggest land carnivore.

A 2.1-metre, 254-kilogram bear rampaged through their camp on Friday, ignoring traps designed to keep it at bay. By the time it was shot, Horatio, an Eton schoolboy, was dead and Patrick, from Jersey, and Scott along with their two guides were seriously injured.

Patrick survived by punching the bear repeatedly on the nose.

Police who arrived by helicopter found the group in shock, the bloody carcass of the bear still lying among the tents and the injured.

The injured have undergone surgery and are recovering in hospital.

The victims were part of a group of 80 that landed last month on the Norwegian arctic island of Spitsbergen, home to more than 3000 polar bears.

Michael Reid sustained injuries to his face and neck in the incident and remained in hospital today, along with fellow leader Andrew Ruck, 27, Patrick Flinders, 16, and Scott Bennell-Smith, 17, who also underwent treatment overnight.

Mr Ruck's and Mr Reid's injuries were described as severe, while Scott and Patrick sustained less serious injuries. All were stable after operations.

The five men and boys attacked were part of a group travelling on a British Schools Exploring Society (BSES) expedition, which was camped on the Von Postbreen glacier near Longyearbyen on Svalbard, north of the Norwegian mainland.

Peter Reid described his shock when the BSES called him on Friday to inform him of the incident in which Horatio, from near Salisbury in Wiltshire, died.

"We were very anxious," he said. "We're upset, but there's a family in Wiltshire with a 17-year-old son who's been killed and we can't imagine the grief they're going through."

On hearing that his son had shot the bear, he felt a "mixture of anxiety and pride", he said.

His son, who lives in London and works as an events co-ordinator for the Royal Geographical Society, spoke warmly of Horatio in his email, he added.

Michael Reid described the schoolboy as "one of the best members of our group" and wrote "I am so devastated".

Hospital staff said it was hoped the survivors could be transferred to a hospital in the UK as soon as possible.

Jane Owen, the British ambassador to Norway, has visited the four survivors and said they were "all bearing up well".<

She said: "It's clearly a priority to get them home as soon as possible. They're receiving extremely good treatment here at the hospital in Tromso.

"We are working with the hospital authorities to establish when will be the right time to arrange for them to be medevaced (given a medical evacuation) back to the UK so that they can be with their families as they go through the recovery process.

"Our priority is obviously to support those involved and respect families' need for privacy at this very difficult time.

More than two dozen U.S. deaths in Afghan copter crash

Nato helicopter crashed overnight in east Afghanistan following an operation against Taliban insurgents.

Afghan provincial spokesman Shahidullah Shahid said the helicopter crashed in the Sayd Abad district of Wardak province. The volatile region borders the province of Kabul where the Afghan capital is located and is known for its strong Taliban presence.

Nato said the alliance was conducting a recovery operation Saturday at the site and investigating the cause of the crash, but did not release details or a casualty figure.

"We are aware of an incident involving a helicopter in eastern Afghanistan," said US Air Force Captain Justin Brockhoff, a Nato spokesman. "We are in the process of accessing the facts."

Nato said insurgents were in the area at the time of the crash.

Taliban spokesman Zabiullah Mujahid claimed the downed aircraft was a US military helicopter and that the Taliban fighters had brought it down with a rocket attack.

The Taliban claimed militants downed the helicopter with a rocket-propelled grenade. Mohammad Hazrat Janan, head of the provincial council said Tangi village elders reported that insurgents shot at the craft when it was flying back from an operation.

The incident took place in the eastern province of Wardak, an area rife with insurgent activity. There has been a swell of recent attacks in the country's southern and eastern provinces.

The crash comes just as NATO is drawing down and handing over security control to national forces. Ten thousand U.S. soldiers are scheduled to depart by year's end, while the full drawn-down is expected to take place by the end of 2014.

However, NATO's International Security Assistance Force has not said how the incident occurred. ISAF spokesman Justin Brockhoff confirmed the crash and acknowledged the helicopter had been flying in area where there was reported insurgent activity, but declined to offer additional details.

Officials are being especially tight-lipped because recovery operations at the site are still under way and body identifications and family notifications are just beginning, the U.S. military official said.

Last month, a NATO helicopter was brought down by insurgent fire in the country's eastern province of Kunar. The Taliban also claimed responsibility for that attack, though no injuries were reported.

In a separate incident, a NATO service member died Saturday after an improvised explosive device detonated in southern Afghanistan.

Elsewhere Saturday, a joint Afghan and coalition force conducted raids in the eastern province of Nangarhar, killing "several insurgents," NATO reported.

The operation also targeted a "Taliban facilitator," who NATO says was responsible for supplying ammunition and bomb-making materials to the Taliban.

In July, a series of gun battles in Nangarhar between insurgents and NATO forces left at least 10 militants dead.

Wallabies blacked out at hoodoo ground

AUCKLAND — An intensive defensive effort by the All Blacks created a 30-14 win over Australia in their Tri-Nations clash Saturday, giving their self-belief a boost in the countdown to the World Cup.

It was a far from perfect performance by the All Blacks who allowed the Wallabies an advantage with possession.

But while Australian attacks were swiftly shut down for most of the match the All Blacks, with Richie McCaw, Piri Weepu and Dan Carter to the fore, were able to find holes around the Australian ruck and out wide.

The three tries to two victory in the clash of the world's top two sides ensured the All Blacks retained the Bledisloe Cup, the symbol of trans-Tasman superiority, which they have held since 2003.

It also left them on track for an 11th Tri-Nations title in the 16-year history of the competition and gave an insight into the game they are working on for the World Cup which starts here next month.

"I thought the defence was outstanding," said All Blacks coach Graham Henry while playing down any psychological edge it could give them going into the World Cup.

"I think there's far too many occasions in the past where (a Tri-Nations win) hasn't amounted to a result in the Rugby World Cup so if we get complacent about this victory it will be curtains I'd say"

The Wallabies did finish the stronger of the two sides as the pace of the game told on several All Blacks having their first run since the Super 15 series, but Wallabies coach Robbie Deans said the damage had been done by then.

"Tactically we didn't help ourselves. We allowed the All Blacks to establish the D (defence) line and really create some linespeed in their defence and stymie our attack. We left a lot of points out there as well. We lacked a bit of patience in the way and where we attacked."

Weepu, getting a start at number nine after coming off the bench in recent Tests, stamped his mark with a series of breaks close to the maul and the All Blacks backs feasted off a supply of front-foot ball.

Other Wallabies youngsters in their first Auckland Tests were also rattled as New Zealand's biggest crowd of the modern era of 55,000 roared at every slip-up in the 22nd straight home win at their bastion.

The All Blacks burst out of the blocks to lead 10-0 after nine minutes and, when it was 17-0 after half an hour, the game was as good as gone.

Australia had their chances, and more possession in the attacking half but, as hard as they probed, just couldn't convert.

The All Blacks' defence under pressure was superb, a cornerstone for the victory, holding out the Wallabies for 14 consecutive phases in their 22 early on to set the tone.

In contrast, the Wallabies couldn't hold out the ruthless Kiwis when they had a sniff near the line.

Centre Ma'a Nonu shrugged off Adam Ashley-Cooper and Rocky Elsom to dive over in the eighth minute to finish a raid sparked by Piri Weepu while, similarly, Keven Mealamu burrowed over shortly after another Weepu blind-side raid.

Australia's attack wasn't predictable or slow but New Zealand's patient, smart and disciplined defence twice forced five-eighth Cooper into low percentage cross-field kicks which never paid off.

Direct rival Dan Carter delivered a five-star performance to underline his standing as the world's best playmaker, starring in attack, defence and slotting six from six with the boot.

Ironically, Australia's pre-match problem area, the scrum, held firm but they paid dearly for the All Blacks' superiority at the restarts.

When Digby Ioane, Australia's best by far, revived some hope with a brilliant counter-attacking try in the 51st minute, it was an immediate hit-back off the kick-off which snuffed out any thought of a comeback.

Australian economy safe and strong - Labor

Credit rating agency Standard & Poor's decision for the first time ever to downgrade the US from a AAA to AA+ rating caps a two-week period that has seen the Australian market drop more than 10 per cent, wiping off more than $50 billion.

Wall Street finished up higher after a rally late on Friday following stronger than expected employment figures, but investors remain nervous about toxic debt levels in Spain and Italy.

Amid the turmoil, Prime Minister Julia Gillard yesterday called on Australians to trust in the "strong fundamentals" of our economy.

Ms Gillard said while Australia was not immune to global events, the nation was in a strong financial position.

We should have confidence that our economic credentials are among the best in the world," she said.

"We should also have confidence that we have handled in the past global instability.

"This Government has a proven track record of handling global instability. And we should also have confidence in the strong fundamentals of our economy.

"We have low debt, low unemployment, the Budget coming into surplus in 2012-13, a AAA credit rating and we are looking to strong economic growth."

Ms Gillard said that with a quarter of Australian exports going to China, Australia had its best terms of trade in 140 years.

"We are in the right part of the world. The part of the world that continues to grow. That means we will continue to see strong economic growth in our region," she said.

Treasurer Wayne Swan yesterday assured Australians our AAA credit rating was safe.

S&P attached a "negative outlook" to the new rating.

"The downgrade reflects our opinion that the fiscal consolidation plan that congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics," S&P said in a statement.

But Ms Gillard called on Australians to remain confident about Australia's economy and its "strong fundamentals" despite what was happening globally.

"People should look with confidence at our economic credentials and fundamentals, and people should look with confidence at the ability of this government to deal with global instability," she said.

"We have done it before.

"We came out of the global financial crisis without having gone into recession."

Treasurer Wayne Swan today said Australia's own gold-plated triple-A credit rating was safe and secure and could not be more different to the US.

Mr Swan said Australia had known for some time the US faced a long and painful adjustment to get its budget back on a sustainable medium-term footing.

"But they've taken an important first step towards this objective," he said.

"S&P's announcement comes amid heightened volatility over the past week in international financial markets driven by continuing concerns about the weakness of the US economic recovery and sovereign debt levels in Europe."

Mr Swan said Australia was not immune from events in the rest of the world but the Australian economy's fundamentals remained strong.

He said unemployment was low, public finances were strong with very low debt and a huge pipeline of mining investment.

"Australia's gold-plated triple-A rating is safe and secure," he said.

"It's been recently affirmed and we are widely considered to be in the top-tier, even among the exclusive club of developed economies in the world to share the highest rating."

Mr Swan said the parliament had just about passed the budget in full, a budget that included the biggest fiscal consolidation in the nation's history.