Iraq is helping its neighbor Iran skirt international sanctions by smuggling oil and letting Tehran secretly move large amounts of cash through bank auctions, The New York Times reported Sunday.

Last month, U.S. President Barack Obama singled out the Elaf Islamic Bank in Iraq, saying it had arranged transactions worth tens of millions of dollars with Iranian banks already under sanctions because of alleged links to Tehran's nuclear program.

A suspected al-Qaida suicide bomber blew himself up early Sunday in southern Yemen killing the commander of a local pro-army militia and wounding six people, a government official told Agence France Presse.

Two children were among the wounded in the town of Mudiya in the restive southern province of Abyan, the official said.

The "cancerous tumor" of Israel is the biggest problem confronting Muslim countries today, Iran's supreme leader said on Sunday, repeating an epithet slammed just days earlier by U.N. chief Ban Ki-moon and U.S. and EU officials.

In a speech marking Eid al-Fitr, the end of the Muslim holy month of Ramadan, Ayatollah Ali Khamenei said "the big powers have dominated the destiny of the Islamic countries for years and... installed the Zionist cancerous tumor in the heart of the Islamic world," according to the official IRNA news agency.

There were no sweets for the children and no flowers for the dead on Sunday as Syrians marked the first day of the Eid Muslim religious festival under the shadow of unrelenting violence and fear.

"The children in the Old City district are sad because there are no sweets, no food, no gifts, no new clothes this Eid," said a young man from the city of Homs in central Syria who gave his name as Abu Bilal.

Syria's President Bashar Assad joined prayers at a Damascus mosque Sunday for the Muslim festival of Eid al-Fitr, as his forces reportedly pressed on with a deadly assault against rebels.

State television aired footage of Assad with several top government and ruling Baath party officials, including Prime Minister Wael al-Halaqi, who took office only this month after the defection of his predecessor.

Twin car bomb blasts killed two people at dawn on Sunday in the Libyan capital, security officials said, blaming loyalists of now slain dictator Moammar Gadhafi for the attacks.

Tripoli's security chief Colonel Mahmud al-Sherif told Agence France Presse the bombs were detonated by remote control and struck near a military academy and the interior ministry.

The opposition Syrian National Council described as "unacceptable" on Sunday comments by new U.N. peace envoy Lakhdar Brahimi that it was too soon for him to call for President Bashar Assad to step down.

"The revolutionary Syrian people were shocked and dismayed by Mr. Lakhdar Brahimi's statements," the exiled opposition group.

British and German spies are involved in covert operations to help Syrian rebels in their increasingly bloody fight to topple the regime of President Bashar Assad, press reports said Sunday.

German and British spies were passing on information about Syrian troop movements to the rebels who took up arms against Assad's regime over a year ago in the face of its brutal crackdown on protests, they said.

As Muslims the world over geared up for Eid, the celebrations marking the end of the holy month of Ramadan, Syrians faced another daily cycle of bloodshed on Saturday.

Local Coordination Committees said that the number of people killed by the Syrian regime forces rose to 160 in Damascus and its suburbs.

President Mohammed Morsi plans to attend a summit in Iran this month, state media reported on Saturday, on the first such visit since Egypt severed ties with Tehran more than three decades ago.

The official MENA news agency quoted a source in the presidency as saying Morsi will attend the Non-Aligned Movement summit in Tehran on August 30-31 at which Egypt will transfer the bloc's rotating leadership to Iran.