French police laid siege Wednesday to an apartment block where a self-declared al-Qaida militant who has claimed a series of deadly attacks on troops and a Jewish school was holed up.

Prosecutors said suspect Mohamed Merah, a 23-year-old Frenchman of Algerian descent, had fought off several police assaults on his flat and bragged to negotiators of having been trained by al-Qaida on the Afghanistan-Pakistan border.

The United States said Tuesday it was exempting European Union members and Japan from tough new sanctions on Iran, praising them for reducing dependency on oil from the Islamic republic.

Under a new law aimed at pressing Iran over its nuclear program, the United States will penalize foreign financial institutions over transactions with Iran's central bank, which handles sales of the country's key export.

France effectively put its election campaign on hold Monday after a gunman killed three children and a teacher at a Jewish school and candidates set politics aside to condemn the shocking attack.

President Nicolas Sarkozy and the Socialist frontrunner in the presidential race, Francois Hollande, cancelled campaign events and rushed to the southern city of Toulouse, amid fears the attack could be the work of a serial killer.

France on Monday proposed a U.N. Security Council statement backing U.N.-Arab League envoy Kofi Annan's mission to end bloodshed in Syria and ease the international deadlock over the crisis.

With Annan and other U.N. efforts to halt the killing and gain humanitarian access already meeting resistance from President Bashar al-Assad, envoys said it had become urgent to send a "strong message" to the Damascus government.

Chief Palestinian negotiator Saeb Erakat on Monday condemned an attack by an unidentified gunman who killed four people at a Jewish school in France, including an Israeli-French dual citizen.

"We strongly condemn all terrorist operations, and in particular the attack today in Toulouse," he said in an statement.

Israel on Monday said it was "horrified" by a shooting attack at a Jewish school in the French city of Toulouse, which witnesses said left three people dead, two of them children.

"We are horrified by this attack and we trust the French authorities to shed full light on this tragedy and bring the perpetrators of these murders to justice," Israeli foreign ministry spokesman Yigal Palmor told Agence France Presse.

A gunman burst into a Jewish school in France on Monday, shooting dead three children and a teacher in the third deadly gun attack in a week by a man who made his escape on a motorbike.

The children, aged three, six and 10, and a 30-year-old religious education teacher were mowed down as they arrived for class at the Ozar Hatorah School in the southwestern city of Toulouse, officials said.

Tens of thousands marched in Paris on Sunday to support firebrand leftist presidential candidate Jean-Luc Melenchon, who has shaken up France's election campaign with a surprise jump in the polls.

Melenchon of the Left Front, who represents a coalition of leftist parties including the Communists, has emerged as a significant factor in the campaign just as Socialist frontrunner Francois Hollande faces a resurgent threat from incumbent President Nicolas Sarkozy.

French President Nicolas Sarkozy Saturday hailed the arrest in Mauritania of Abdullah al-Senussi, the spymaster of Moammar Gadhafi, and will seek his extradition to France, his office said.

Senussi faced an international arrest warrant after a Paris court sentenced him in absentia to life for his alleged involvement in an attack on a French airliner in 1989 that killed 170 people, a statement from the Elysee said.

France "strongly condemned" twin bomb attacks in Damascus Saturday which Syrian authorities said killed 27 people and wounded 97, Foreign Minister Alain Juppe said.

"France condemns all acts of terrorism, which cannot be justified under any circumstances," Juppe said, expressing his condolences to the families of the victims.