WASHINGTON — Vetoing a stem cell bill for the second time, President Bush today sought to placate those who disagree with him by signing an executive order urging scientists toward what he termed "ethically responsible" research in the field.

Bush announced no new federal dollars for stem cell research, which supporters say holds the promise of disease cures, and his order would not allow researchers to do anything they couldn't do under existing restrictions.

Announcing his veto to a roomful of supporters, Bush said, "If this legislation became law, it would compel American taxpayers for the first time in our history to support the deliberate destruction of human embryos. I made it clear to Congress and to the American people that I will not allow our nation to cross this moral line."

He vetoed similar embryonic stem cell legislation last July.

His executive order encourages scientists to work with the government to add other kinds of stem cell research to the list of projects eligible for federal funding — so long as it does not create, harm or destroy human embryos.

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ABBAS DENOUNCES HAMAS FOR TAKEOVER

RAMALLAH, West Bank — Palestinian President Mahmoud Abbas lashed out at the Islamic militants of Hamas today, accusing them of trying to build an "empire of darkness" in the Gaza Strip and pledging he would not negotiate with the "murderous terrorists."

Addressing Palestinians for the first time since Hamas seized control of Gaza a week ago, Abbas said Hamas had attacked "national symbols" during the fighting in the coastal territory, including ransacking the house of the late PLO leader Yasser Arafat.

Israeli Foreign Minister Tzipi Livni talked by telephone today with Salam Fayyad, the prime minister named by Abbas to head a new Cabinet that excludes Hamas. It was the first direct contact between Israel and the new government.

"The establishment (of the new administration) facilitates progress on ... the peace process," a Foreign Ministry statement quoted Livni as saying.

Yesterday, Israeli Prime Minister Ehud Olmert said Israel would soon unfreeze millions of dollars in Palestinian tax receipts and turn them over to Abbas' administration.

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BLAIR CONSIDERED FOR PEACEKEEPING ROLE

WASHINGTON — President Bush has talked with British Prime Minister Tony Blair about taking a role as a Middle East peace envoy after he leaves office next week. Assistant Secretary of State David Welch, the State Department's top diplomat for the Middle East, talked with Blair in London today, while the White House and State Department spoke glowingly about the prime minister's credentials but said there was nothing to announce yet.

Israeli Prime Minister Ehud Olmert also expressed support for Blair playing a role in the Middle East.

"Officials in the prime minister's office are aware of this idea and Prime Minister Olmert is very supportive of Prime Minister Blair and of his continuing involvement in the Middle East and the peace process," Israeli government spokeswoman Miri Eisin said.

Blair steps down next Wednesday.

"Obviously Prime Minister Blair has been very active and deeply involved in Middle East peace issues throughout his prime ministership," White House spokeswoman Dana Perino said.

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U.S. FORCES INCREASE BAGHDAD-AREA OPERATIONS

BAGHDAD — U.S. forces fighting al-Qaida and allied militants intensified operations today in Baghdad and on all four points of the compass around the capital. To the south, suspected Shiite militiamen bombed three Sunni houses of worship in what may presage a war of the mosques.

An Associated Press reporter in Baqouba, the capital of Diyala province to the north and east of Baghdad, reported intense gunbattles in the streets and around the main market district as American and Iraqi forces sought to clear the city of al-Qaida fighters.

Gen. Abdul-Karim al-Rubaie, an Iraqi military commander in Diyala, told the AP that security forces had ringed the city and were not letting anyone come or go. He said many al-Qaida fighters had hidden their weapons and were trying to flee Baqouba.

"We fear that the insurgents want to mingle with civilians. ... Citizens have given us the names of hundreds of al-Qaida elements who have quit fighting and are hiding in their houses in Baqouba. These people are going to be arrested after the end of the battles," the general said.

The latest military report on the Diyala offensive, which began Monday night, said U.S.-led forces had killed 41 insurgents, discovered five weapons caches and destroyed 25 bombs and five booby-trapped houses.

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IMMIGRATION AMENDMENT 'STEP BACKWARDS'

WASHINGTON — The Bush administration came out strongly against a bipartisan effort by Sens. Charles Grassley and Barack Obama to make the immigration bill easier on employers.

Homeland Security Secretary Michael Chertoff told senators in a letter late yesterday that the amendment, which makes a new program to stop businesses from hiring illegal workers less burdensome, "would be a serious step backwards in our enforcement effort."

The amendment sponsored by Grassley, R-Iowa, Max Baucus, D-Mont., and Obama, D-Ill., "eliminates needed tools and allows unscrupulous businesses to continue to freely hire illegal workers," Chertoff wrote in matching letters to Sens. Edward M. Kennedy, D-Mass., and Arlen Specter, R-Pa., two architects of the bill.

In an angrily worded reply to Chertoff today, the unlikely allies sponsoring the amendment dismissed his criticism as "erroneous and misleading," and defended their proposal as one that would improve a deeply flawed system.

Their amendment is one of a limited list of two dozen the Senate would consider adding to the immigration measure under a plan to revive the stalled bill before the July 4 recess.

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THOUSANDS OF SCHOOLS FACE NCLB OVERHAULS

NEW YORK — The scarlet letter in education these days is an "R." It stands for restructuring — the purgatory that schools are pushed into if they fail to meet testing goals for six straight years under the No Child Left Behind law.

Nationwide, about 2,300 schools are either in restructuring or are a year away and planning for such drastic action as firing the principal and moving many of the teachers, according to a database provided to The Associated Press by the Education Department. Those schools are being warily eyed by educators elsewhere as the law's consequences begin to hit home.

Schools fall into this category after smaller changes, such as offering tutoring, fall short. The effort is supposed to amount to a major makeover, and it has created a sense of urgency that in some schools verges on desperation.

"This is life and death," says John Deasy, superintendent of schools in Prince George's County, Md., where several schools are coming face to face with the consequences of President Bush's signature education law. "This is very high-stakes work."

The schools bearing the label are often in poor urban areas, like Far Rockaway at the end of the subway line in the New York City borough of Queens. But they're also found in leafy suburbs, rural areas and resort towns.

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STUDY: ESTROGEN MAY BENEFIT YOUNGER WOMEN

ATLANTA — Five years after a landmark study scared millions of women off hormones for menopause symptoms, new research suggests the pills may offer some heart benefits for certain younger women who start taking them in their 50s. Women who took estrogen suffered less hardening of the arteries than those who took dummy pills, researchers reported in tomorrow's New England Journal of Medicine.

It was the latest study in recent months to suggest that women who take hormones at the start of menopause seem to gain some health benefits beyond relief from hot flashes. That is in sharp contrast to women who raise their health risks when they take hormones in their 60s and 70s.

In general, experts' advice hasn't changed: Use hormones only as needed to treat hot flashes, sleeplessness and other symptoms at the start of menopause. And use the lowest possible dose for the shortest possible time — no longer than four or five years.

The new study is the latest attempt to sort out how menopause hormones affect the risk of cancer, Alzheimer's disease, stroke and heart problems, and whether those risks and benefits differ by age.

The research concludes that women who started taking estrogen pills in their 50s were 30 percent to 40 percent less likely to have measurable levels of blockage-causing calcium in the arteries that lead to the heart.

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BARKER'S COMMENTS NOT ROSIE ENDORSEMENT

LOS ANGELES — It may have sounded like an endorsement, but Bob Barker's recent remarks about Rosie O'Donnell weren't meant that way. "The Price Is Right" host, who retired this month after 35 years with the show, told reporters last week at the Daytime Emmy Awards that he had "no doubt" that O'Donnell would make a fine host for the CBS game show.

But Barker told The Associated Press today that he never meant to endorse any potential host and has no role in choosing his replacement.

"I have not been asked for my opinion, nor have I expressed one," Barker said. "I think there are several candidates who could do the show, and Rosie is certainly one of them."

CBS and FremantleMedia North America, which produces "The Price Is Right," have yet to announce Barker's successor. Among those reportedly in the running, besides O'Donnell, are Todd Newton of the E! network, Mark Steines of "Entertainment Tonight," George Hamilton and John O'Hurley. O'Donnell said on her blog that she plans to meet with the "Price" representatives this week and that she "sure would" accept the job if offered.