ANTIQUES SHOPS

Government troops also bombed and shelled other towns across the country, a day after Russian diplomats rode again to Assad's rescue, blocking language at a meeting of world powers that would have called on the president to leave power.

Sixteen months into an uprising against Assad in which more than 10,000 people have been killed, intensive fighting and shelling has now reached the outskirts of Damascus. New tension has also built up on the frontier with Turkey in recent days after Syrian forces shot down a Turkish jet.

Residents of the Zamalka district on the capital's outskirts were struggling on Sunday to bury dozens of people killed the day before in a mortar attack on an anti-Assad march, opposition activist Susan Ahmad said by phone from the Damascus suburbs.

More than 40 people were killed in the attack on Saturday when security forces fired a mortar bomb into a funeral procession in Zamalka for a man who had been killed in shelling, activists said.

"It is really bad today across Damascus," said Ahmad. "Zamalka was like a massacre, but we couldn't bury all of the martyrs as it is dangerous to be out on the streets and we can't treat the wounded. There is no medicine."

Government troops were raiding Zamalka and Douma, a town of half a million people on the outskirts of Damascus that now stands almost empty after siege and shelling as the army tried to root out rebels, she said.

"Douma is completely destroyed," said Ahmad. "If you go to Douma you can smell the bodies. It's really like a ghost city."

On Saturday, Free Syrian Army fighters fled the town and residents said they feared a massacre at the hands of troops entering it.

Turkey said on Sunday it had scrambled F-16 fighters near the frontier the previous day in response to three separate incidents after Syrian helicopters approached the border.

Turkey, a NATO member that has turned against Assad and allowed its territory to become a rear base for rebels, has mobilised since Syrian forces shot down one of its jets 10 days ago. It sent forces towards the border this week and said it would treat Syrian troops approaching the frontier as hostile.

Top level diplomacy has so far been futile, and a much-anticipated meeting in Geneva on Saturday showed that Western and Arab states had yet to persuade Russia and China to drop support for Assad.

The two countries have repeatedly used veto power at the U.N. Security Council to block calls for Assad to leave power.

The meeting, convened by peace envoy Kofi Annan, agreed that Syria should seek a transitional unity government, but Moscow and Beijing successfully blocked language that would have suggested the new arrangement should exclude Assad.

Western officials say the text agreed at the talks - billed as a last-ditch effort to halt the worsening violence - still implies indirectly that Assad should stand down, but Moscow says it does no such thing.

HOMS SHELLED

The Syrian Observatory for Human Rights, an anti-Assad violence monitoring group in Britain, said more than 150 people had been killed on Saturday and Sunday. It said there was shelling in southern Deraa province and the central city of Homs, long the focus of previous crackdowns.

"We can hear bombing in different areas of Homs city today," said Waleed Fares, an opposition activists who lives in the central Khalidiya district of Homs. The Syrian authorities severely restrict the media, making it extremely difficult to verify such reports.

"There are three-storey building that have fallen down as the Syrian army is using large mortars," he said, adding that seven people had been killed on Sunday and 14 more wounded.

Efforts by International Committee of the Red Cross (ICRC) to evacuate civilians and wounded from Homs have failed twice since the humanitarian group said it had obtained assurances on June 20 from both authorities and rebel forces that their convoys would be allowed access.

Violence prevented safe passage on both attempts, the Red Cross said.

Activist Fares says civilians are trapped in the heart of the city as the army has surrounded central districts and positioned snipers on roofs to shoot people in the street.

"There is no safe place for civilians to go," he said via Skype.

Russian Foreign Minister Sergei Lavrov said on Saturday the Geneva agreement did not imply at all that Assad should step down, as there were no preconditions excluding any group from the proposed national unity government.

Nevertheless, French Foreign Minister Laurent Fabius said the creation of a unity government would imply an end to Assad's rule, because the opposition would not join unless he goes.

"The opposition will never agree to him, so it signals implicitly that Assad must go and that he is finished," Fabius told television station TF1 on Sunday.

Peace envoy Annan, a former U.N. secretary-general, said after the Geneva talks the transitional government should include members of Assad's administration and the Syrian opposition and that it should arrange free elections.

"Time is running out. The conflict must be resolved through peaceful dialogue and negotiations," Annan told reporters.

Annan's plan is the only international peace effort on the table, but has been essentially ignored by Assad's government, with a ceasefire that failed to hold and a small team of unarmed U.N. monitors announcing they could not do their job.

(Additional reporting by Khaled Yacoub Oweis in Reyhanli, Turkey, John Irish in Paris and Stephanie Nebehay and Tom Miles in Geneva; Writing by Oliver Holmes; Editing by Peter Graff)

Goals from David Silva, Jordi Alba, Fernando Torres and Juan Mata gave the world champions an easy victory over an Italian team down to 10 men through injury for the last half-hour.

Spain's emphatic triumph means they have become the first European side to win three major tournaments following their success in Euro 2008 and the World Cup two years ago

The diminutive Silva scored with a rare header after a Cesc Fabregas pull-back in the 14th minute before a superb sprint finish from left-back Alba following a pinpoint Xavi pass doubled their lead four minutes before halftime.

Torres, who scored the winner in the final when Spain won the title in 2008, struck their third goal in the 84th minute before setting up fellow substitute Mata who calmly rounded off the scoring with a simple finish in the 88th.

The result was the highest margin of victory recorded in either a European Championship or World Cup final and Torres is the first player to score in two Euro finals.

Spain's triumph means Vicente Del Bosque is only the second coach to win a European Championship and a World Cup, joining Helmut Schoen who did so with West Germany in 1972 and 1974.

Spain's third Euro success also brings them level with Germany's record after the Spanish also won the trophy in 1964.

"This match was great for our players, they controlled the game," he said. "After the first goal the Italians became more dangerous but we kept the pressure, the depth, we are very happy. This success of Spanish football is something historic."

Italy coach Cesare Prandelli was gracious in defeat adding: "They made history and deservedly - they have a lot of players tried and tested at this level and even though they don't play with a classic striker they cause you plenty of problems."

STYLISH SPAIN

Italy had more possession than Spain in the opening half but when they did have a sniff of goal goalkeeper Iker Casillas maintained his astonishing record of not conceding a goal in the knockout stage of a tournament for the 10th successive match.

Spain, who started without a recognized striker, were all artistry and guile in midfield while Italy, whose own creator Andrea Pirlo failed to shine, were handicapped by having only 10 men from the hour mark after using up all three substitutes.

The third of them, Thiago Motta, only lasted four minutes after replacing Riccardo Montolivo in the 57th before limping off with a hamstring injury.

Italy went close twice through second half substitute Antonio Di Natale but Mario Balotelli, the two-goal hero of their 2-1 semi-final win over Germany, rarely looked like scoring.

The opening goal came when Andres Iniesta split the Italy defense with an incisive pass to Fabregas who outpaced Giorgio Chiellini to get to the byline where he pulled the ball back to Silva who flashed his header past the helpless Buffon.

The second came when Alba tore past the static Leonardo Bonucci and planted a perfect left foot shot past Gianluigi Buffon. Torres then ran through to score the third after another Xavi through ball before setting up Mata with a deft flick.

Italy's Prandelli said he only wished his team had got more time to rest after their semi-final win over Germany, played a day later than Spain's shootout victory against Portugal.

"Against a team like Spain I think you really need to be good in the tackle and fit. They totally dominated this evening, we have to congratulate a great side for their victory."

The only other team to win three successive major titles was Argentina who lifted the Copa America in 1945, 1946 and 1947 but at a time when that tournament was held annually.

Despite Spain's remarkable achievement on Sunday, their 61-year-old coach Del Bosque has already turned his attention to winning more silverware and yet more records could tumble.

"There will be more challenges, the qualification for the World Cup (in Brazil), the Confederations Cup where we will represent Europe - and we want to do it well."

(Editing by Ken Ferris)

The European sanctions - including a ban on imports of Iranian oil by EU states and measures that make it difficult for other countries to trade with Iran - were enacted earlier this year but mainly came into effect on July 1.

They are designed to break Iran's economy and force it to curb nuclear work that Western countries say is aimed at producing an atomic weapon. Reporting by Reuters has shown in recent months that the sanctions have already had a significant effect on Iran's economy.

Israel says it could attack Iran if diplomacy fails to force Tehran to abandon its nuclear aims. The United States also says military force is on the table as a last resort, but U.S. officials have repeatedly encouraged the Israelis to be patient while new sanctions take effect.

Washington said the EU's oil ban might force Tehran to give ground at the next round of nuclear talks, scheduled for this week in Istanbul.

Announcing three days of missile tests in the coming week, Revolutionary Guards General Amir Ali Hajizadeh said the exercises should be seen as a message "that the Islamic Republic of Iran is resolute in standing up to ... bullying, and will respond to any possible evil decisively and strongly."

Any attack on Iran by Israel would be answered resolutely: "If they take any action, they will hand us an excuse to wipe them off the face of the earth," said Hajizadeh, head of the Guards' airborne division, according to state news agency IRNA.

The missile tests will target mock-ups of air bases in the region, Hajizadeh said, adding that its ability to strike U.S. bases in the Gulf protects Iran from U.S. support for Israel.

"U.S. bases in the region are within range of our missiles and weapons, and therefore they certainly will not cooperate with the regime (Israel)," he told IRNA.

Iran has repeatedly unnerved oil markets by threatening reprisals if it were to be attacked or its trade disrupted.

The threat against the Jewish state echoed words President Mahmoud Ahmadinejad spoke in 2005, saying Israel "must be wiped off the page of time" - a phrase often translated as "wiped off the map" and cited by Israel to show how allowing Iran to get nuclear arms would be a threat to its existence.

The EU ban on Iranian oil imports directly deprives Iran of a market that bought 18 percent of its exports a year ago. The sanctions also bar EU companies from transporting Iranian crude or insuring shipments, hurting its trade worldwide.

"They signal our clear determination to intensify the peaceful diplomatic pressure," British Foreign Secretary William Hague said in a statement.

The EU sanctions come alongside stringent new measures imposed by Washington this year on third countries doing business with Iran. The United States welcomed the EU sanctions as an "essential part" of diplomatic efforts "to seek a peaceful resolution that addresses the international community's concerns about Iran's nuclear program."

White House spokesman Jay Carney said he hoped the sanctions would force Tehran to make concessions in technical-level talks with six world powers later this week.

MALICIOUS POLICIES

"Iran has an opportunity to pursue substantive negotiations, beginning with expert level talks this week in Istanbul, and must take concrete steps toward a comprehensive resolution of the international community's concerns with Iran's nuclear activities," Carney said in a statement.

The United Arab Emirates and Bahrain - foes of Iran which face it across the oil-rich Gulf - announced their own joint air force exercises on Sunday which they said would take "several days," their state news agencies reported.

In three rounds of talks between Iran and the United States, Russia, China, Britain, France and Germany, the Western powers have demanded Tehran halt high-grade uranium enrichment, ship out all high-grade uranium and close a key enrichment facility.

The talks lost steam at the last meeting in Moscow last month and there was not enough common ground for negotiators to agree whether to meet again. Officials - but not political decision-makers - meet in Turkey on Tuesday.

Washington sees the sanctions and talks as a potential way out of the standoff to avert the need for military action, but has not said it would block Israel from attacking Iran.

Tehran says it has a right to peaceful nuclear technologies and is not seeking the bomb. It accuses nuclear-armed states of hypocrisy. Officials said they were taking steps to reduce the economic impact of the new sanctions.

"We are implementing programs to counter sanctions and we will confront these malicious policies," Mehr news agency quoted Iranian central bank governor Mahmoud Bahmani as saying.

Bahmani has struggled to prevent a plunge in the value of the rial currency and steadily rising inflation as the sanctions have taken effect. He said the effects of the sanctions were tough but that Iran had built up $150 billion in foreign reserves to protect its economy.

Oil Minister Rostam Qasemi said oil importing countries would be the losers if the sanctions lead to price rises.

"All possible options have been planned in government to counter sanctions," Qasemi said on the ministry's website.

Last Friday, another Revolutionary Guards commander, Ali Fadavi, said Iran would equip its ships in the Strait of Hormuz - the neck of the Gulf and a vital oil transit point - with shorter-range missiles.

(Additional reporting by Marcus George and Isabel Coles in Dubai and by Jeff Mason in Washington; Writing by Robin Pomeroy; Editing by Peter Graff)

Britain has had a long and painful history of infighting and changes of heart over how closely to integrate with the EU ever since it joined its precursor four decades ago.

It has often proven divisive both within and among Britain's main political parties as well as the public.

Fears over closer fiscal union in the single currency bloc in response to the euro zone debt crisis has heightened concerns among backbenchers, especially among the eurosceptics on the right of the Conservative Party and the electorate.

Polls suggest that if given a chance, voters would opt out of the EU.

Cameron, writing in the Sunday Telegraph, said he believed the "vast majority of the British people", like him, wanted to make changes to Britain's current relationship.

He wrote that for those outside the euro zone, "far from there being too little Europe, there is too much of it" in terms of bureaucracy. The question was how to get the relationship right.

"As we get closer to the end point, we will need to consider how best to get the full-hearted support of the British people whether it is in a general election or in a referendum," he wrote.

"As I have said, for me the two words 'Europe' and 'referendum' can go together, particularly if we really are proposing a change in how our country is governed, but let us get the people a real choice first."

The Conservative prime minister has resisted pressure from within his own ranks to hold a European referendum up to now, and in the article he did not give a timetable or offer a specific question.

A significant reason for holding back on a referendum is concerns surrounding the economic consequences of an exit from the free-trade bloc, Britain's biggest export market.

Also, the Lib Dems, are pro-Europe, and the two parties have already had their differences over key policies.

"Tactical and strategic patience" would need to be shown, the prime minister said.

ALL EYES ON THE ELECTION

Commentators suggested Cameron might use a referendum as an election fillip, ahead of the next parliamentary vote in 2015, especially after his party's popularity took a knock after a budget in March.

The main opposition Labour Party has been debating about whether to hold a referendum around the time of the election.

An added pressure on Cameron has been the anti-EU party UKIP, the UK Independence Party, which has grown in influence, doing well in local elections in May on a ticket of total withdrawal from the EU.

In the article, Cameron wrote: "As a trading nation Britain needs unfettered access to European markets and a say in how the rules of that market are written.

"The single market is at the heart of the case for staying in the EU.

"I don't agree with those who say we should leave and therefore want the earliest possible in/out referendum. Leaving would not be in our country's best interests."

But he went on to say: "An 'in' vote too would have profound disadvantages. All further attempts at changing Britain's relationship with Europe would be met with cries that the British people had already spoken."

It was the Conservative pro-European Prime Minister Ted Heath who signed up to the European project in 1971, and relations have been tense much of the time since.

In the 1980s, Prime Minister Margaret Thatcher was famously tough in negotiations with European partners.

The Conservatives were fatally divided by endless arguments during John Major's premiership in the 1990s.

After the party returned to power in 2010 after 13 years in the wilderness, Cameron introduced a law that requires a referendum before any further transfer of powers from London to Brussels and refused last year to join a new EU fiscal pact.

(Reporting by Avril Ormsby; editing by Mohammad Zargham)