Indeed - it looks like you're running an open proxy on that server and whoever is at 126.96.36.199 has found it. www.yahoo.com seem to be a common test address in use for checking for open proxies.
If this access should not ba allowed (i.e. 188.8.131.52 is not an address you wish to proxy for) reconfigure your proxy server to return a 4xx (e.g. 404 or 403) error.
Example from my log:
184.108.40.206 - - [01/Nov/2003:14:32:00 +0000] "GET http://www.yahoo.com/ HTTP/1.1" 403 2898 "-" "Mozilla/4.0 (compatible; MSIE 4.01; Windows 95)"
Hope this helps,