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The outgoing Defence Minister Karel Kunhl has signed a major deal between the Czech Republic and Austrian manufacturer Steyr for some 200 armoured personnel carriers. The deal is worth around 1 billion US dollars and is the most expensive order in the Czech military's history. The deal was expected to be signed earlier in the year but was postponed due to legal complaints by an unsuccessful bidder. Now, the signing by an outgoing minister whose party, the Freedom Union, failed to get re-elected to the lower house, has been criticised by the right-of-centre Civic Democrats. The party's deputy leader Petr Necas has nevertheless said that the Civic Democrats will respect the venture.

A forty-year-old man from the Czech Republic has been arrested on the border between Turkey and Greece, apparently smuggling some 30 kilograms of heroin, worth the equivalent of around 1 million US dollars on the Czech black market. The drug was reportedly hidden in sixty packets in his car. The discovery was made by customs officials using a specially-trained sniffer dog.

The Social Democrats have confirmed that they will not support a centre-right government led by the Civic Democratic Party, which won last week's general election. Members from both parties met officially for the first time on Friday to discuss possibilities for the country's future. The Civic Democrats have been negotiating to form a centre-right government with the Christian Democrats, and the Greens, but any such coalition will be one mandate short of the majority needed in the lower house. After coming in second in the election last week the Social Democrats under Prime Minister Jiri Paroubek said that they would only be willing to support a caretaker government, and on Friday Jiri Paroubek reiterated that the party had not changed its stance. Mirek Topolanek, the head of the Civic Democrats, has pointed out that Friday's meeting was only the beginning of negotiations.

The Supervision department of the Interior Ministry will review all charges pressed in the so-called 'Kubice case'. Four days ahead of the general election Jan Kubice, a highly placed police official from the country's squad against organised crime, presented a confidential report in the lower house suggesting that organised crime was gaining influence in the state administration. Parts of the report were leaked to the media. Mr Kubice has denied any role in that leak or any wrongdoing, but he is being sued, for instance, by Prime Minister Jiri Paroubek for speculation allegedly in part of the report that Mr Paroubek had sexually-abused the daughter of a family friend.

President Vaclav Klaus has vetoed a bill on that would have substantial changes in the health care sector, the president's spokesman Petr Hajek said on Friday. Mr Klaus was reportedly critical of the bill - backed by health Minister David Rath - because in his view it would have unjustly centralised key decisions on agreements between health facilities and health insurance companies in the hands of the health minister - denying contractual freedom. The bill is the fourth that Mr Klaus vetoed in recent days; following general elections his decision can not be overridden by the lower house.

Czech striker Milan Baros - who suffered an injury to his foot earlier - is still doubtful for the Czechs' debut on Monday in the football World Cup. Baros is struggling to be fit for the game, in which the Czech Republic faces the US. Doctors are reportedly optimistic, saying it is 'quite probable' Baros will be ready for the game. The striker is considered to be one of the squad's key players. So far he has 49 caps for his country, during which he scored 27 goals.

Numbers released by the Czech Statistical Office on Friday have shown that the economy saw record growth in the first quarter of 2006, improving from 5.4 to 7.4 percent year-on-year. The improvement, fuelled by higher foreign trade, investment, industrial production, and household spending, was largely expected by analysts. Some observers have stated that the fast growth will help the Czech economy approach the euro zone more quickly. On Friday, outgoing Prime Minister Jiri Paroubek reacted to the information saying it was "unfortunate for his party" the news came a week after the election.

The Civic Democrats' Mirek Topolanek, meanwhile, indicated that all parties should make use of the situation to push for lowering unemployment as well as the public debt.

Defence Minister Karel Kuehnl will sign a contract on the supply of 200 armoured personnel carriers with the Austrian armament maker Steyr on Friday, the ministry announced on Thursday. The deal will cost the state a record 24 billion crowns (over 1 billion dollars). The military is expected to receive the first vehicles at the end of next year. They will replace the obsolete Ot-64s, most of which are out of service.

The deputy leader of the Social Democrats, Bohuslav Sobotka, has said that his party will seek to occupy the position of chairman of the lower house. Mr. Sobotka says that the Social Democrats are not considering this as part of any post-election negotiations, but rather that a member of the Social Democrats should naturally occupy the post because the party won the second largest number of seats in the recent elections. Mr. Sobotka denies that his party would exchange this post for the support of the incoming government coalition.

The OECD has also said that the Czech economy will continue to grow and the country is on track to join the eurozone by 2010 but it must not neglect fiscal and pension reforms. The organisation presented an economic survey of the country on Thursday which said the budget and overall deficit was kept in check last year owing to stronger than expected revenues on the back of economic growth of 6 percent in 2005 and deferred spending. But the report says real steps have not been taken to tackle the overall level of government spending.