LONDON — European markets surged today as a stunning comeback on Wall Street a day earlier heartened investors worried about the U.S. economic outlook.

Markets in Britain, Germany, and France followed most Asian markets higher today, helping erase losses from their steep slide earlier this week that was driven by fears of a recession in the U.S., a vital export market.

British banks and insurance firms surged this morning to drive the best one-day performance since Aug. 17 behind gains from U.S. financial companies and hopes that U.K. regulators will step in to rescue bond insurers.

In Germany, markets were buoyed by a closely watched report on the business sentiment in the country, Europe's biggest economy, which rose slightly in January, beating expectations and suggesting the fallout over the U.S. subprime crisis in Europe might be less severe than thought.

The turnaround in European markets was based on reports that New York insurance regulators have met with about a dozen banks to discuss ways to shore up bond insurers MBIA Inc. and Ambac Financial Group Inc., said Keith Bowman at Hargreaves Lansdown Stockbrokers in London.

BAGHDAD — A suicide bomber killed an Iraqi police chief and two other officers today after they toured the site of the wreckage of a blast a day earlier that devastated a predominantly Sunni neighborhood in the volatile northern city of Mosul.The casualty toll from Wednesday explosion rose to at least 34 dead and 224 injured, said Hisham al-Hamdani, the head of the Ninevah provincial council. The blast collapsed a three-story apartment building and ravaged adjacent houses just minutes after the Iraqi army arrived to investigate tips about a weapons cache.The bomber today was wearing an explosives vest under an Iraqi police uniform when he struck, killing Brig. Gen. Salah Mohammed al-Jubouri, the director of police for Ninevah province, the U.S. military said.Two other policemen died and a U.S. soldier, three Iraqi police and an Iraqi soldier were wounded, the military said.Police spokesman Brig. Gen. Saeed al-Jubouri said the police chief was attacked after gunmen ambushed the blast site, sparking clashes that lasted for about 15 minutes. The bomber moved toward Hassan's car as it was preparing to flee the area, al-Jubouri said.

RAFAH, Egypt — Egypt began trying to control the masses of Palestinians flooding in from the Gaza Strip today, stopping some from moving deeper into Egypt. But authorities did not attempt to reseal the breached border with the Palestinian territory.Israeli Deputy Defense Minister Matan Vilnai said Israel wants to relinquish all responsibility for Gaza, including the supply of electricity and water, now that Gaza's southern border with Egypt has been opened.Egypt immediately rejected the idea. On the Egyptian side of the border, helmeted riot police with dogs used batons to beat the hoods of Egyptian cars and trucks offering rides to Palestinians seeking to buy goods in towns out of walking range.Israel has expressed concern that militants might be entering Gaza to bolster rocket launchings toward it.