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After suffering political defeats, and watching his popularity plummet, California Gov. Arnold Schwarzenegger seems to be in the midst of a comeback. The mostly-Democratic state legislature is adopting a bold new budget that gives the Republican Schwarzenegger most of what he wants. Ina Jaffe reports.

When farmers in upstate New York need help bringing back unruly livestock, they call on Rose, a border collie from a long line of working dogs. Rose even gets paid for her work, and has a strong urge to keep busy.

Israel has stepped up its military offensive against Hezbollah militants in Lebanon during a third week of hostilities in the region. Officials say more than 500 Lebanese civilians have been killed since the conflict began, and more mass burials are planned Monday in the southern port city of Tyre.

U.S. Treasury Secretary Henry Paulson is in China. It's his first visit there as a member of the Bush administration. He joined the cabinet in July. U.S. business leaders and members of Congress want to see the Chinese currency appreciate in value as a way to reduce the U.S.-Chinese trade surplus.

Israel is demanding the release of a soldier captured during a raid by Palestinian gunmen Sunday at a Gaza border crossing. The attack killed two Israeli soldiers and was the first such ground assault since Israel pulled out of Gaza last summer.

The National Marine Fisheries Service is proposing a speed limit for ships entering ports along the eastern seaboard. The goal is to save right whales from being struck and killed. Shipping companies say there is no proof that slowing their vessels will help the endangered mammals.

Early Sunday, Palestinian militants used a tunnel to infiltrate Israel and attack a military outpost along the border between Gaza and Israel. Two Israeli soldiers were killed and a third soldier was captured. The assault on the border post marks a serious escalation in Mideast violence, because it involves Hamas.

Corrections officials have complained for years that America's prisons and jails are becoming the country's new asylums for the mentally ill. A recent Justice Department study supports that claim. It says more than half of all prison and jail inmates have experienced mental health problems in the last year.

President Bush addresses the United Nations General Assembly with a speech advocating the spread of democracy in the Middle East. But he's likely to face a skeptical audience that is critical of the U.S. policies in Iraq and Iran.

A Canadian commission ruled Monday there was no evidence linking a Canadian citizen to any terrorist organization. Mahrer Arar was arrested in New York in 2002, sent to Jordan, then Syria, where he says he was tortured during the year he spent in Damascus jails. He was released in 2003.