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LOS ANGELES, June 11 (UPI) -- At least 2 die in Gaza attack

JERUSALEM, June 11 (UPI) - Israeli helicopters fired missiles at a car in Gaza City, where it is already Thursday, killing at least two people.

Residents told MSNBC it was the second Israeli air strike in Gaza City in six hours.

Two Hamas militants and five bystanders were killed in the first attack, which itself came just one hour after the latest suicide bombing on an Israeli bus in Jerusalem, which killed at least 16 and wounded scores.

The latest attack came just after midnight. Doctors said one person was also seriously wounded. The Israeli military had no comment.

Residents said ambulances raced to the scene in the Zeitoun neighborhood in Gaza City. They said they heard four explosions and saw Israeli attack helicopters flying away from the scene.

It was the latest outburst of violence that threatens to derail the U.S.-backed "road map" peace plan, which had created the most hopeful moment in the Middle East in a nearly three-year cycle of attacks and retribution.

Trouble at mortgage giant Freddie Mac

NEW YORK, June 11 (UPI) - Federal prosecutors have opened a criminal investigation into possible wrongdoing at Freddie Mac, the mortgage lending giant.

MSNBC said the probe sent another ripple of concern through financial markets Wednesday, as the little known and poorly understood lender came under increasingly harsh scrutiny.

Executives at the company say they are unaware of any fraud or criminal activity linked to the accounting problems that led them to replace three top executives this week.

They contend that when new financial statements are published covering the past three years, they will show that Freddie Mac's earnings and financial position are stronger than previously reported.

Critics of Freddie Mac and its sister enterprise in the mortgage industry, Fannie Mae, say the time has come to consider whether the two firms, which provide the underpinning of the vast U.S. housing market, should retain the special government relationship they enjoy by virtue of their unique congressional charters.

Senate panel to hold Iraq WMD talks

WASHINGTON, June 11 (UPI) - A Senate committee will investigate whether assessments about Iraq's weapons of mass destruction program were accurate.

The contention that Iraq possessed WMD devices were used in part to justify the war against Iraq.

Senate Intelligence Committee Chairman Pat Roberts, R-Kan., said closed-door hearings will begin next week.

Roberts said "While I am chairman, the committee will handle this review in a responsible manner untainted by politics and in a bipartisan manner."

He was flanked by House Intelligence Committee Chairman Porter Goss, R-Fla., and Senate Armed Services Committee Chairman John Warner, R-Va., as they spoke to reporters.

Fox News says some Democrats and other critics of the war have suggested that intelligence on Iraq's weapons programs was inaccurate or manipulated to make the case for war. No Democratic members of the committee were present at Roberts' announcement.

Signs of life seen in economy

WASHINGTON, June 11 (UPI) - The Federal Reserve Board says the U.S. economy showed some glimmers of improvement in April and May.

But the government agency said business and consumer activity remained sluggish for the most part and the end of major hostilities in Iraq provided only a mild boost.

"The unwinding of war-related concerns appears to have provided some lift to business and consumer confidence, but most reports suggested that the effect has not been dramatic," the central bank said in its "beige book," which is composed of statistical and anecdotal information gathered by the agency's 12 district banks.

The Los Angeles Times says the April-May report reported no district had seen any deterioration in conditions since the last survey, and there was "some signs of increased economic activity" in the Dallas, Kansas City, New York and Minneapolis districts.