A serious vulnerability in Java has been reported, present in the latest update of Java (Java 7 Update 10).
As with some previous vulnerabilities discovered and patched in earlier months, it allows arbitrary code execution by Java code downloaded to the Java plugin in a web browser.
If you have not done so already, the current advice is to disable Java in your web browser until further notice or at least only let Java run on a site-by-site basis.
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