Observation of B0→K*0K̄*0 and search for B0→K*0K*0

We report the observation of the b→d penguin-dominated decay B0→K*0K *0 with a sample of 383.2±4.2 million BB pairs collected with the BABAR detector at the PEP-II asymmetric-energy e+e- collider at the Stanford Linear Accelerator Center. The measured branching fraction is B(B0→K*0K *0)=[1.28-0.30+0.35±0.11]×10-6 and the fraction of longitudinal polarization is fL(B0→K*0K *0)=0.80-0.12+0.10±0.06. The first error quoted is statistical and the second systematic. We also obtain an upper limit at the 90% confidence level on the branching fraction for B(B0→K*0K*0)<0.41×10-6.