Reuters - Israeli shelling killed more than 40 Palestinians on Tuesday at a U.N. school where civilians had taken shelter, medical officials said, in carnage likely to boost international pressure on Israel to halt a Gaza offensive.

Reuters - President-elect Barack Obama said on Tuesday that he expects to inherit a U.S. budget deficit approaching $1 trillion and that his administration would have to make some tough budget choices.

AP - Israeli mortar shells struck outside a U.N. school where hundreds of Palestinians had sought refuge Tuesday, killing at least 30 people — many of them children whose parents wailed in grief at a hospital filled with dead and wounded.

AP - A cross-dressing, millionaire Harvard dermatologist serving life in prison for shooting his estranged wife to death has been found hanged in his cell, a prison spokeswoman said Tuesday. Richard Sharpe was found by his cellmate at MCI-Norfolk on Monday evening and was declared dead at a hospital, said Department of Correction spokeswoman Diane Wiffin.

AFP - The heaviest fighting of Israel's war on Hamas raged in Gaza's main city early on Tuesday as the Israeli government fended off appeals to stop the death toll from mounting further.

AP - Phillies reliever J.C. Romero and Yankees minor league pitcher Sergio Mitre were suspended for the first 50 games of next season after testing positive for a banned substance. The suspensions were announced Tuesday by Major League Baseball.

AFP - US president-elect Barack Obama has chosen former White House chief of staff Leon Panetta to head the Central Intelligence Agency, a Democratic Party official told AFP Monday.

AP - Parkinson's sufferers who had electrodes implanted in their brains improved substantially more than those who took only medicine, according to the biggest test yet of deep brain stimulation. The study, which followed patients for six months, offers the most hopeful news to date for Parkinson's sufferers. The new technique reduced tremors, rigidity and flailing of the limbs and allowed people to move freely for nearly five extra hours a day.

AP - President-elect Barack Obama apparently plans a more aggressive approach than the Bush administration to helping friendly nations get better at fighting terrorism within their own borders, the State Department's top counterterrorism official said Tuesday.

AP - The new Congress opened for business at the stroke of noon on Tuesday, eager to join President-elect Barack Obama in tackling the worst economic crisis in generations. Democrats celebrated last fall's election gains in the House and Senate.

AP - German billionaire Adolf Merckle threw himself in front of a train after his business empire, which included interests ranging from VW cars to pharmaceuticals to cement, ran into trouble in the global financial crisis, his family said Tuesday.

Reuters - How much does it cost to spend $350 billion?