In other news, new home sales leapt 11 percent in June, the largest monthly gain in nearly nine years, and the U.S. warned Iran it could face tough sanctions if it rejects talks on its nuclear program.
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In other news today, there were positive signs from the housing sector. The Commerce Department reported new home sales jumped 11 percent in June, the most in nearly 9 years.
And on Wall Street, the Dow Jones industrial average gained 15 points to close at 9,108. The Nasdaq rose about 2 points to close near 1,968.
The U.S. warned today Iran could face tougher sanctions if it rejects talks on its nuclear program. Defense Secretary Gates carried that message to Amman, Jordan. Earlier, he met with Israeli Defense Minister Ehud Barak in Jerusalem. Gates defended diplomacy, but Barak emphasized military action is very much a live option.
ROBERT GATES, secretary of defense: I think we are in full agreement on the negative consequences of Iran obtaining this kind of a capability. I think we're also agreed that it is important to take every opportunity to try and persuade the Iranians to reconsider what is actually in their own security interest.
EHUD BARAK, defense minister, Israel: We are in no position to tell the administration whether to want an engagement with Iran or not. But if there is an engagement, we believe it should be short in time, well defined in objectives, followed by sanctions. No options should be removed from the table. This is our policy; we mean it.
On Sunday, Secretary of State Hillary Clinton strongly suggested the Israelis give American policy more time to work.
In the Iraqi region of Kurdistan, the two ruling parties kept control, despite a strong push from the opposition in weekend elections. Kurdish President Massoud Barzani was re-elected with 70 percent of the vote. He is not on speaking terms with Iraqi Prime Minister Nouri al-Maliki. Kurds are at odds with the central government over control of Kirkuk and oil rights.
Two more British soldiers have died in Afghanistan; the announcement today made 22 British troops killed this month. At the same time, Afghan President Hamid Karzai said he wants new rules of conduct for foreign troops to limit civilian casualties.
And a Karzai spokesman reported a cease-fire with the Taliban in part of northwestern Afghanistan. The Taliban denied it and called the announcement "propaganda." We'll speak with British Foreign Secretary David Miliband about the situation in Afghanistan on tomorrow night's NewsHour.