What is Iran up to? Russia's giant arms-export company Rosvooruzheniye announced last week that Tehran has agreed to spend $1 billion on 30 Tor M1 air-defense missile systems, capable of protecting a target from up to 48 incoming planes or projectiles to a range of six kilometers. Iran currently has no comprehensive air defenses, leaving its cities and dozens of nuclear-research installations vulnerable to air raids. The Tor M1 purchase is just the first stage of a more comprehensive Iranian purchasing program, according to a Rosvooruzheniye source who did not wish to be named because of the sensitivity of the issue. There are "ongoing talks" between Moscow and Tehran, he says, to purchase a much more sophisticated S-300 strategic air-defense system, which has a range of more than 150km and provides much more comprehensive cover. That system, says defense analyst Pavel Felgenhauer, is "really one of the most sophisticated in the world." Russia has also agreed to upgrade Iran's small fleet of MiG-29 interceptor planes to make them more effective against enemy aircraft. That's a worrying detail--those MiGs could be an "equal rival to the first-line fighters of Israel and the United States in an air fight at short ranges," says Shlomo Brom, former head of strategic planning for the Israel Defense Forces.

Russian Foreign Minister Sergei Lavrov insists that such arms sales "do not alter the strategic balance, because they are of a purely defensive nature." By the terms of a 1995 deal forged by the then Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore, Russia agreed not to sign any new arms deals with Tehran. But in 2002, Russia reopened arms talks because the rising price of oil had made Iran a good, cash-rich customer. Air-defense-system sales in particular are big business, because only about 10 percent of the components of the system needs to be manufactured from scratch. (The other components, including the missiles, are old Soviet-era stock.) Russian arms exports for this year are expected to top $5.1 billion, 70 percent of which is going to China.

American efforts to return to Iraq assets allegedly looted by Saddam Hussein and his cronies have become more complicated than officials had hoped. One example emerged last week in Basel, Switzerland, when officials of Liechtenstein formally handed back to the Iraqi government a plane Saddam allegedly owned. The Falcon 50 business jet was grounded in Jordan shortly before the U.S. invasion in March 2003. But arranging for the jet to be returned to Iraq turned into an ordeal. "The plane was located in one country, registered in another and under ownership by a third. Working through those factors alone takes time," said U.S. Treasury spokeswoman Molly Millerwise. Rene Bruelhart, Liechtenstein's top financial investigator, says this was the first case in which an asset held by Saddam outside Iraq had been repatriated, via U.N. channels, to Iraq's new government. A foreign official familiar with the process, who asked not to be identified because of diplomatic sensitivities, said the United States, Jordan and Liechtenstein argued over what to do with the plane. Some U.S. officials thought the U.S. government should confiscate it.

Talk about cruel and unusual punishment. Last week, the Saudi courts ordered that Indian citizen Puthan Veettil Abd ul-Latif Noushad have his right eye gouged out for participating in a fight back in 2003 that had left a Saudi citizen with a wounded eye. "This literal eye-for-an-eye sentence is torture masquerading as justice," said Joe Stork, deputy director of the Middle East Division of Human Rights Watch. The Indian government is working on Noushad's behalf to overturn the ruling. Butonly two people have the power to do so: the victim of the original incident, Nayif al-Utaibi, and Saudi Arabia's King Abdullah. Utaibi has so far refused to grant clemency or to accept monetary compensation. Given the diplomatic pressure and considering that he is due to travel to India in the beginning of next year, King Abdullah will probably pardon Noushad.

Regardless, this case is yet another stark reminder of the dark side of Saudi justice. Only a few weeks ago, a Saudi high school teacher was sentenced to three years in jail and ordered to receive 750 lashes for talking to his students about Judaism, Christianity and the causes of terrorism. Noushad's sentence may be particularly gruesome, but it's no anomaly.

Despite an initial furor over mysterious flights into their countries by suspected CIA-operated airplanes, European leaders were quick to pronounce themselves "satisfied" by assurances from U.S. Secretary of State Condoleezza Rice last week. The reason may lie in their own governments' lack of enthusiasm about digging into the issue. According to current and former U.S. counterterrorism officials who declined to be named because of the sensitivity of the subject matter, some European officials were informed of at least some of the details of the CIA flight operations before or as they happened. Other European ministers operated under what one of the U.S. officials acknowledges amounted to a "don't ask, don't tell" policy regarding the CIA airplanes. (A CIA spokesman declined to comment.) As a result, some European investigators believe that the nations that allowed CIA flights to use their airfields won't be eager to answer any questions. Another problem European investigators face is trying to prove whether any particular CIA flight carried any particular suspect on a rendition mission that later resulted in the suspect's being subjected to abusive treatment. U.S. counterterrorism officials say that most of the flights by CIA planes through airfields in Europe had nothing to do with renditions. But details of the missions are unlikely to be made available to investigators abroad.

The dream is over. Eleven years after founding their studio, Steven Spielberg, David Geffen and Jeffrey Katzenberg agreed to sell DreamWorks SKG to Viacom for a reported $1.6 billion. Just about everybody in Hollywood has an opinion about what went wrong. One theory, voiced by a rival studio head (who refused to be identified while commenting on industry matters), was that DreamWorks could not survive because the costs of running a studio now are so high that it's impossible to make a profit without other large revenue streams, including a sizeable DVD library. A few filmmakers saw a different problem: bad management. But perhaps the primary failure at DreamWorks was simply one of will. Of the three founders, only Katzenberg wanted to actually head a studio: now he is, at DreamWorks Animation. Spielberg's first love has always been directing, and he has spent the last year on sets making "War of the Worlds" and "Munich" back-to-back. And Geffen has always been upfront about his distaste for the movie business. What both men wanted, it seems in retrospect, was the power and freedom of owning a studio, not the burden of running one.

Most adults in Mali can't read. The adult illiteracy rate is 80 percent, and for women in rural areas the rate jumps to 90 percent. But now, engineering students with Design That Matters, an MIT-based nonprofit, are literally shedding light on the issue with Kinkajou, a solar-powered projector that can shoot an image up to three meters onto any flat surface. "There is a lot of excitement about it," says Jill Harmsworth, vice president of the Africa program for World Education, a nonprofit running literacy classes in Mali, where the product's been tested throughout the year. "Often there would only be a single light bulb and the women could barely see their books. [Kinkajou] has made people eager to come to class."

The U.S. Agency for International Development has noticed. It's bankrolling an effort to take Kinkajous (named after an animal with exceptional night vision) to 1,500 more classes worldwide by the end of the year--and to 15,000 more by 2009. On this scale, it costs just $50 to make the projector and $12 to make a spool of film, which can store up to 10,000 pages of text. Entire libraries can now be transported cheaply and easily. In designing the product, the MIT students had an unlikely inspiration: Fisher-Price's toy projector. To withstand the conditions of the Sahara, the Kinkajou, like the toy projector, has seven plastic lenses instead of a single fragile one. The product is tough--and could lighten the load for thousands.

Santa visits millions, but what do we really know about the guy? Gerry Bowler, author of the new "Santa Claus: A Biography," talked to Elise Soukup about the jolly old fellow.

BOWLER: Santa Claus--by that name, wearing the clothes he wears and with reindeer--first shows up in 1821 in New York with the poem "The Children's Friend."

No, but after seeing the Coke ads you can't think of Santa looking any other way.

There's hardly a vice he didn't indulge! Cigarettes, of course, and alcohol. I've heard it said that Santa will sell beer, but not the hard stuff. Hardy-har--I found lots of Santa Scotch ads.

For badness so bad that it is good, it is "Santa Claus Conquers the Martians." That's really a genuine turkey.

He represents an intergenerational act of love. For years, when children are at their sweetest and most grateful, parents give credit to Santa Claus. It's remarkable.

Of course he does. Who else eats the cookies?

This Week Online Log on to view an on-line photo essay on Africa's devastating health crisis. Read veteran Beijing correspondent Melinda Liu's weekly Asia Rising column. Take part in a Live Vote on whether China is telling the full truth about the Harbin oil spill. Sign up for NEWSWEEK's free World Update newsletter at newsletters