Pakistani- Kidnapper may have fled Karachi

KARACHI, Pakistan -- The key suspect in the disappearance here of Wall Street Journal reporter Daniel Pearl may have fled to Pakistan's most populous province, police said Saturday, insisting they still hope to free Pearl soon.

Kamal Shah, chief of police in Sindh province, said Ahmad Omar Saeed Sheikh may have left Karachi and "was reported to be in the Punjab" -- a sprawling province that runs along Pakistan's border with India. He said investigators were trying to track Saeed.

"We feel we are close," he said. "We can't give you a timeframe. But we don't think we are far off."

Pearl, the newspaper's 38-year-old South Asian bureau chief, was abducted Jan. 23.

G-7 officials encourage Argentina's reforms

OTTAWA -- Preventing financial crises like the one in Argentina and assessing the global economy were the focus of a second day of talks Saturday by finance ministers and central bank governors from the world's industrial powers.

The Group of Seven finance officials are encouraging Argentina to continue reforms pushed by the International Monetary Fund, such as the reopening of banks and foreign exchange markets Monday when it frees its peso currency from a fixed rate.

IMF Managing Director Horst Koehler briefed the delegations from the United States, Canada, Britain, France, Germany, Italy and Japan, along with the European Union and World Bank, on the steps Argentina has taken to persuade the IMF to provide up to $25 billion in new loans.

Israeli troops search houses for militants

JERUSALEM -- An Israeli woman traveling with her son in a car in the West Bank was shot and killed Saturday -- apparently by Palestinian militants. Also in the West Bank, Israeli troops and Palestinians clashed as soldiers searched house-to-house for militants.

Two Palestinians were injured, one seriously, in the fighting in the Palestinian-controlled village of Tamoun, where the army sought out residents believed to be connected to a deadly shooting attack in a nearby Jewish settlement on Thursday.

On the diplomatic front, European Union foreign ministers endorsed a proposal that calls for the swift establishment of a Palestinian state as the first phase of renewed negotiations. Neither Israel nor the Palestinians immediately responded to the plan.

Up to eight militants with al-Qaida links escape

SINGAPORE -- As many as eight Islamic militants with alleged links to al-Qaida evaded a police sweep and slipped out of Singapore, Senior Minister Lee Kuan Yew said in an interview broadcast Saturday.

Singapore in December detained 15 suspected members of a radical Southeast Asian Muslim group and said they planned to bomb Western embassies, Navy ships and other targets in the Asian city-state. Two were later released.

In addition to the arrests, there were "five or eight others that got away," Lee said.

-- From wire reports