Iran rejected as "ridiculous" on Tuesday a claim by Ottawa that two foreigners arrested in connection with a plot to derail a passenger train in the Toronto area were backed by Tehran-supported al-Qaida.

"This is the most hilarious thing I've heard in my 64 years," Foreign Minister Ali Akbar Salehi was quoted by the ISNA news agency as saying, adding that any suggestion that al-Qaida is linked to Iran "is truly ridiculous."

Two foreign nationals have been arrested in Canada in connection with what federal police said Monday was a plot backed by al-Qaida to derail a passenger train in the Toronto area.

"Today's arrests demonstrate that terrorism continues to be a real threat to Canada," Public Safety Minister Vic Toews warned.

Authorities are investigating a Canadian's possible death in Mogadishu after reports said he led a recent attack by Shebab Islamists on the main courthouse in the Somali capital.

The Royal Canadian Mounted Police "is aware there are media reports linking a Canadian to terrorist attacks in Mogadishu," Sergeant Greg Cox told Agence France Presse.

The Palestinian Authority on Sunday summoned Canada's envoy to convey "strong dissatisfaction" over Foreign Minister John Baird's visit last week to annexed east Jerusalem.

The Palestinian foreign ministry summoned Katherine Verrier-Frechette "to express its strong dissatisfaction over the meeting between Minister of Foreign Affairs John Baird and Israeli Justice Minister Tzipi Livni in east Jerusalem," a statement read.

Canadian Foreign Minister John Baird met an Israeli minister in annexed Arab east Jerusalem this week, a spokesman said, breaking a widely observed diplomatic taboo.

Baird met Justice Minister Tzipi Livni at her office in east Jerusalem, Canadian foreign ministry spokesman Rick Roth said, in a move normally avoided by visiting diplomats over concerns it could be seen as legitimizing Israel's annexation of the city's eastern sector.

Canadian Foreign Minister John Baird hailed his country's "special friendship" with Israel in Jerusalem talks with Prime Minister Benjamin Netanyahu on Tuesday.

The two men "reaffirmed the close and special friendship that underpins the bilateral relationship between our two countries," a joint statement said.

Canadian Foreign Minister John Baird held what he termed "positive" talks with Palestinian leaders in the West Bank town of Ramallah on Saturday despite their differences.

Baird, on a four-day visit to Israel and the Palestinian territories, met with Palestinian leader Mahmoud Abbas and foreign minister Riyad al-Malki.

Canada opened its first diplomatic mission in Iraq in more than two decades on Monday as Foreign Minister John Baird acknowledged his country "needs to be on the ground in Baghdad".

On a brief visit to the Iraqi capital, Baird met with Prime Minister Nuri al-Maliki and his political rival Osama al-Nujaifi, the parliament speaker, as well as inaugurated the mission, an office of the Canadian embassy in Amman that will be located on the compound of the British embassy in Baghdad.

Canada welcomed two cute and furry ambassadors on Monday -- giant pandas on loan from China for 10 years to mark a warming of Sino-Canadian ties.

Er Shun and Da Mao landed in Toronto after a nearly 24-hour journey from the Research Base For Giant Panda Breeding in Chengdu, China, aboard a transport jet stocked with in-flight meals of bamboo and apples.

Canada's Tory government pegged a return to a balanced budget and its re-election hopes in 2015 on a strong rebound in the economy on Thursday, after being dealt an unexpected slump in recent months.

"We have some tough times ahead," Finance Minister Jim Flaherty told the House of Commons, promising that a "consistent, steady hand" will get Canada back on track.