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TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe picked two veteran lawmakers with friendly ties to China for top party posts on Wednesday in an apparent signal of hope for a thaw in chilly ties with Beijing and a summit with Chinese leader Xi Jinping.

DUBAI (Reuters) - The Islamic State militant group released a video on Tuesday purporting to show the beheading of a second American hostage, journalist Steven Sotloff, raising the stakes in its confrontation with Washington over U.S. air strikes in Iraq.

SAN FRANCISCO (Reuters) - The California Public Utilities Commission on Tuesday levied penalties of a record $1.4 billion on Pacific Gas and Electric Co, stemming from the deadly 2010 San Bruno natural gas pipeline rupture and fire near San Francisco.

IWAKI Japan (Reuters) - A group of Fukushima workers on Wednesday sued Tokyo Electric for unpaid wages in a potentially precedent-setting legal challenge to the utility and its reliance on contractors to shut down a nuclear plant destroyed by the industry's worst accident since Chernobyl.

BRUSSELS/DONETSK Ukraine (Reuters) - EU officials proposed sanctions on Tuesday to starve Russian firms of cash as punishment for Moscow's role in Ukraine, where rebels said they were storming Donetsk airport, potentially their biggest prize since turning the war's tide last week.

DETROIT (Reuters) - Detroit will not recover, and it may not survive as a major city if its debts are not significantly reduced during bankruptcy, a city attorney told a federal judge at the start of a critical phase of the case on Tuesday.

HONG KONG (Reuters) - A pro-democracy movement that has threatened to blockade Hong Kong's financial district has said Beijing "brutally strangled" its fight for full democracy and vowed to take action.

SAN FRANCISCO (Reuters) - Apple Inc has often displayed uncanny timing, with its well-orchestrated end-of-year iPhone releases. But the leak of racy celebrity photos in the past few days put the company in the unusual position of having to mend its image just days before a highly anticipated Sept. 9 product launch.

MONROVIA (Reuters) - The United Nations said on Tuesday the spread of the deadly Ebola virus in West Africa was causing food shortages in one of the world's poorest regions and the U.S. Centers for Disease Control and Prevention warned the disease was threatening the stability of stricken countries and their neighbors.

PHOENIX (Reuters) - A 9-year-old girl who fatally shot a gun range instructor with an Uzi submachine gun last week told her mother immediately afterward that the weapon was too much for her to handle and had hurt her shoulder, a sheriff's report released on Tuesday said.

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