ALTHOUGH Singapore slipped into a recession in 2008, its economic growth was still positive at 1.5 per cent, said Prime Minister Lee Hsien Loong on Wednesday.

It is, however, lower than the annual growth forecast of 2.5 per cent, owing to the severe fallout from the global financial crisis. The anaemic economy dominated Mr Lee's New Year message, which outlined an outlook that continues to be 'highly uncertain' and facing the threat of a rise in retrenchments.

GAZA CITY - ISRAEL rejected mounting international pressure to suspend its devastating air offensive against Palestinian militants whose rocket barrages are striking ominously close to the Israeli heartland, sending warplanes on Wednesday to demolish smuggling tunnels that are the lifeline of Gaza's Islamic Hamas rulers.

The diplomatic action has been set in motion by the scale of destruction in Gaza since Israel unleashed its campaign on Saturday, and a casualty toll that Gaza officials now put at 390 dead and some 1,600 wounded. Hamas says some 200 uniformed members of Hamas security forces have been killed, and the UN says at least 60 Palestinian civilians have died. Four Israelis have been killed by militant rocket fire, including three civilians.

BANGKOK - SUPPORTERS of former Thai prime minister Thaksin Shinawatra vowed on Wednesday to resume their street campaign for fresh elections in 2009, suggesting no respite from the country's political crisis as a recession looms.

In a sign of the strife to come, leaders of the pro-Thaksin camp warned they may target a regional summit in Bangkok in February to pile pressure on the weeks-old new government led by former opposition leader Abhisit Vejjajiva.

JAKARTA - INDONESIA'S president promised further fiscal stimulus to help Southeast Asia's biggest economy withstand the global economic slump, and which may be funded in part by a return to the international bond market next year.

President Susilo Bambang Yudhoyono, who faces elections in 2009, said the government would give priority to jobs and inflation, cut subsidised fuel prices further, and launch a new fiscal stimulus on top of spending plans set in the state budget.