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We have introduced defects in ZnO (undoped and doped with Co and Mn) epitaxial thin films using laser irradiation from nanosecond laser pulses and thermal annealing in oxygen ambient. In contrast to the as grown samples, the laser irradiated films show a significant increase in conductivity, enhancement in UV emission, while maintaining the same wurtzite crystal structure. Room-temperature ferromagnetism (RTFM) is observed in laser-irradiated samples, which increased with the number of laser pulses up to a certain value where magnetic moment saturates. The induced ferromagnetism as well as the enhanced electrical conductivity can be reversed with thermal annealing in oxygen ambient. The magnetization in Co and Mn doped films was found to be strong function of growth conditions and defect concentration. X-ray diffraction and optical absorption experiments suggested a 2+ valance state and tetrahedral coordination for both Co and Mn ions. There is a simultaneous increase in n-type electrical conductivity wit...