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CNN Live At Daybreak

All Eyes on Condoleezza Rice; Dramatic New Pictures of Marines Under Fire Near Fallujah

Aired April 08, 2004 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: The eyes of the world will be on the people in this building today -- the nation's capital here in the United States. One woman, Condoleezza Rice, will tell us what she knew and when she knew it.
And good morning to you.

From the CNN global headquarters in Atlanta, this is DAYBREAK for April 8.

I'm Carol Costello.

Let me bring you up to date right now.

Three hours from now, all eyes will be on Condoleezza Rice. She will testify in public under oath before the 9/11 Commission.

Dramatic new pictures of Marines under fire near Fallujah. There you can see their tank was hit by an RPG. At least four Marines were wounded when that happened. No deaths to report.

And you are looking at a live picture out of Baghdad right now. We are awaiting a briefing from Lieutenant General Ricardo Sanchez, who, of course, is the head of the coalition forces in Iraq. As soon as that begins, we will bring it to you live.

British Prime Minister Tony Blair comes to the United States next week for talks on how to stop the violence in Iraq. He'll meet with President Bush in Washington and Kofi Annan at the United Nations.

Times Square -- you see it on TV every New Year's Eve and millions of us have been there in person. Today, it's Times Square's birthday. It turns 100 years old -- Chad.

CHAD MYERS, CNN CORRESPONDENT: That may be the only place you can get a sandwich as big as your head for about $14.

COSTELLO: Exactly. $14? How about $24?

MYERS: Sometimes. And then they charge you to share it, for an extra plate.

(WEATHER REPORT)

COSTELLO: Just shy of three hours from now, a high stakes political drama will begin unfolding live on television, as National Security Advisor Condoleezza Rice officers her long awaited testimony before the September 11 Commission.

And as CNN's John King reports, a lot is riding on her appearance.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): She is Condi to him, Dr. Rice to others, so close a friend and adviser that her credibility will without a doubt reflect on his.

PETER HART, DEMOCRATIC POLLSTER: She was a rising star and I think she's a fallen star at this stage. She started out with a sense of credibility, a sense of purpose. And now I think people are wondering, is she telling the truth?

KING: Consider this 9/11 snapshot an illustration of Rice's case that she had the direct line to the president and that former deputy Richard Clarke's judgments are warped because of his distance from the decision-makers. Given the damming portrait painted by Clarke, Rice's testimony to the 9/11 Commission is in many ways a rebuttal.

KAREN HUGHES, BUSH-CHENEY CAMPAIGN ADVISER: I think that's particularly important now that they've seen the facts in a what I would think of somewhat a distorted perspective.

KING: Rice says Clarke is wrong to assert Bush White House all but ignored the terrorist threat. But her major speeches in that period contained no mentions of al Qaeda or terrorism. And critics suggest she didn't listen enough to Clarke's warnings because he had such a prominent role in the Clinton White House.

Not so, says Rice. On July 5, 2001, she personally told Clarke to warn the Federal Aviation Administration and other agencies about a spike in intelligence suggesting possible attacks. That was a busy period on the world stage, improving ties with Russia and selling a controversial missile defense plan the major focus for Mr. Bush at his first G8 Summit in Italy in mid-July.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: But it is only six months. And these are complicated and complex issues and they will take some time.

(END VIDEO CLIP)

KING: Summit security was extraordinary in part because of intelligence, some of it from CIA, suggesting terrorists might try to hijack a plane and crash it into the meetings. Yet, to this day, Rice says until 9/11 she personally could not have imagined terrorists using planes as weapons here in the United States. Why not is one of the critical questions now for a witness who knows the world will be watching.

HART: There is no sense of an authority. She knows all the facts like a very smart schoolgirl. You're not sure that you're getting the broader policy implications.

KING: Exceeding expectations is a constant in her story, a university provost and accomplished concert pianist, at 49, among the closest friends and closest advisers to a president defined by crisis, now facing a credibility challenge and a performance like no other.

John King, CNN, the White House.

(END VIDEOTAPE)

COSTELLO: Lawmakers will have other things to deal with, too, today, like whether the United States needs a new domestic intelligence service. Congressional researchers say it's an option lawmakers may want to consider. A newly released report from the non- partisan Congressional Research Service says such an agency, independent of the FBI, could be a good way to fight terrorism inside the United States. But, officials at the Bureau and its parent agency, the Justice Department, disagree. They insist the FBI is fully capable of handling its responsibilities.

By the way, you can catch Condoleezza Rice's entire testimony live right here on CNN. It begins at 9:00 Eastern this morning. Of course, that's just shy of three hours from now.

More on today's hearings this hour. We'll go live to the White House to find out how the Bush administration feels about Rice testifying. Also within DAYBREAK, we've heard the 9/11 Commission members say they're not partisan, but what role will politics play in their investigation?

And Condoleezza Rice's image -- what do the power players think of her and what's in her political future? All that in the next half hour of DAYBREAK.

U.S. troops are holding their positions in Fallujah today. We are bringing you the latest pictures from the front lines. This tanker has clearly been hit. You're going to see it shortly. There it is. You see the fire there. Marines inside were wounded and they came under RPG fire. We're told some of them went right back to fighting after taking care of their more seriously wounded comrades, including that guy you're seeing right there. In fact, they had to convince him to leave the tank. He went back and made sure his buddies got out of that tank.

We have no casualty figures to pass along to you this morning, but no deaths have been reported in this recent battle, no American deaths.

Thousands of Iraqis, both Sunni and Shiite Muslims, are reportedly heading for Fallujah. That's the site of bloody fighting this week between Iraqi insurgents and U.S. Marines.

More on this development now from CNN's Jim Clancy in Baghdad -- and, Jim, there seems to be hundreds of them.

JIM CLANCY, CNN CORRESPONDENT: Certainly. And I think, you know, when you look at the battlefield from a distance there at the CNN Center, you see, of course, the epicenter of the fighting, the Marines engaged there in Fallujah. But not to forget there's another battle that's going on that is probably more significant. It is the battle for the hearts and the minds of the Iraqi people. Will they stand up? Will they unite? How will they react to the military response to the United States?

Well, we're getting a look at that right now today. Let's take a look at that convoy. This was put together on just a matter of hours notice. Appeals were raised by a Sunni Muslim mosque. But the people in the convoy headed towards Fallujah today with blood, food, water, medical supplies, say that they representative Shia, Kurds and Sunnis, that they are united in support of the people of Fallujah.

In their view, four dead U.S. security contractors, it was a terrible thing, but it does not justify the siege of 400,000 people in the city of Fallujah. This is something that the Coalition Authority is keeping a close watch on.

On another front, of course, you've got the Shia that are in Iraq, behind -- some of them behind this radical leader, Muqtada al- Sadr. Al-Sadr's Al-Mahdi Army, his private militia, harassing U.S. and coalition forces in various areas, including Sadr City here in Baghdad.

The military response by the U.S.? They went in today and they destroyed one of his offices there in Sadr City. This not likely to affect them strategically, affect his movement strategically, because he can always open another office somewhere else. But it is symbolic and it is showing the U.S. is taking the direct military action that it has threatened.

But there's no magic bullet for the unemployment. There's no smart bomb that can deal with the insecurity in this country or take out insurgents and leave the nearby innocent civilians unscathed. That is a part of the problem and this impatience on the part of the Iraqis, this insecurity situation, many of them coming together, talking about unity. There's been some really interesting discussions in the newspapers today. Independent newspapers, Carol, saying things -- and I've got one of the editorials here. It was titled, "We're All Iraqis" and it challenged the U.S. to call them all militants, call them all insurrectionists, because more than ever, they say, they feel united -- Carol.

COSTELLO: Well, something else that I noticed in that big convoy, people were holding up pictures of Sheikh al-Sistani. He sent out a call today, too, that related to the violence.

What did he say, Jim?

CLANCY: I don't think that that was Ayatollah Ali al-Sistani. I believe that that was -- I'm not sure who it was.

COSTELLO: They were just holding up a picture of him.

CLANCY: Well, they were holding up pictures of religious leaders.

COSTELLO: I understand.

CLANCY: And, you know, that is a very common thing here and different people have different associations. Certainly, Ayatollah Ali al-Sistani a significant figure in Iraq. He made a call for calm. He wants everybody to calm things down. Some people here, on the Governing Council and other Iraqis, as well, are calling for some kind of negotiations. They believe that it's inevitable.

But what all Iraqis want to see is an end to this insecurity, an end to the killing, an end to the dying. They want their lives to go back to normal as soon as possible.

COSTELLO: Jim Clancy live from Baghdad this morning.

Now from some stories from across America this Thursday.

Here in Atlanta, the FBI is investigating a suspicious package found in an apartment restroom. Sources say it was taped to a cell phone. The FBI calls it a highly flammable device, but not a bomb. Authorities are checking videotape from more than 300 security cameras at the airport.

Here's an update for you on that Amtrak derailment in Mississippi. Federal investigators say the train was doing nearly 80 miles per hour when it appears the engineer pulled the emergency brake. We're not sure why yet. They'll talk to him about that later today. The crash killed one person and injured just about all of the 70 people on board.

In New York, a grand jury investigates possible jury tampering in the Tyco corporate corruption trial. The six month long case ended in a mistrial Friday. Tyco's former CEO and CFO were accused of looting $600 million from the company.

MYERS: Carol, it's time to give away the coffee mug.

COSTELLO: Good. Something happy.

MYERS: We'll try.

COSTELLO: All right.

MYERS: I'll try to get some good weather in there, as well.

Yesterday, ask for four countries besides the United States that have significant troop presence in Iraq. The answer to that, although I got an awful lot of other answers from this guy -- Italy, Poland, Ukraine and the U.K. were the four that we were looking for. And another star as put on the Hollywood Boulevard yesterday. Who was it? It was Ted Turner.

And the winner, Colonel Gil Gilleland, FORSCOM budget officer. Got a colonel going on this morning, so.

COSTELLO: And he named every single country participating in the fight in Iraq on behalf of the United States.

MYERS: Albania, Azerbaijan, Bulgaria, the Czech Republic, Denmark, the Dominican Republic, Georgia, El Salvador, Estonia, Honduras, Hungary, blah, blah, blah. And he keeps going.

COSTELLO: Well, good for him.

MYERS: Obviously, he knows his stuff.

COSTELLO: Congratulations, Colonel, and thank you for watching DAYBREAK.

MYERS: Thanks. Exactly.

COSTELLO: We'll have the new questions at 6:50 Eastern time.

MYERS: Yes.

COSTELLO: Also coming up on DAYBREAK, when can they come home? That's what thousands of troops and their families want to know? But is there a simple answer? Our Pentagon correspondent shares the latest deployment strategy.

And AOL isn't just members only anymore. New features available to you soon.

And a tune-up you can do to make sure your mower is ready to tackle the lawn season. Chad will have that for you later.

This is DAYBREAK for April 8.

(COMMERCIAL BREAK)

COSTELLO: What a beautiful and eerie shot of the Capitol this morning.

Welcome back to DAYBREAK.

Your news, money, weather and sports.

It is 6:14 Eastern time.

Here's what's all new this morning.

Less than three hours from now, Condoleezza Rice takes the hot seat. She'll testify publicly under oath to the 9/11 Commission.

Coalition troops carry out a precision raid in Sadr City. They destroy a building used by militiaman of the wanted cleric, Muqtada al-Sadr.

In money news, here's the new Florida quarter. You're going to see it soon, I promise. It does not have a hanging chad on the back. Oh, no. There it is. It celebrates exploration, from journeys to the New World and trips into space. In sports, anybody in the market for a green jacket? Weather permitting, the Masters starts today in Augusta, Georgia. And 93 golfers will be competing for that jacket plus a whole lot of cash.

In culture, AOL launches a new online feature called the startup. It follows four small business owners for the first 12 months and unlike another reality show, no one gets fired.

MYERS: I've seen some of those commercials now. He goes, "You're out of here!"

(WEATHER REPORT)

COSTELLO: All right, those are the latest headlines.

Now for more news on AOL.

It's time for a little business buzz.

Let's head live to the NASDAQ market site in Times Square and Carrie Lee -- good morning.

CARRIE LEE, CNN CORRESPONDENT: Good morning, Carol.

A big strategy shift from America Online. They're going to start offering more content for free online. So what they're going to be doing is offering a growing portion of news, sports, music and other content on the Internet for free. America Online, of course, like CNN, is a unit of Time Warner.

This is a big strategy shift because the unit has always sort of prided itself on its premium content. That is how they've gotten subscribers to pay for the service. So this has already started. It's set to come out more and more over the next couple of weeks and months. And what executives are hoping to do is really capitalize on the growing Web advertising market. That's a business that's been picking up lately. It's also a nod to millions of AOL dialup subscribers, who have been moving to high speed Internet providers and also other discounted dialup services.

Now, AOL says it will keep its premium, premium content on a pay for basis, things like concert and sports clips, maybe offer them first to subscribers and then maybe a week or so later for free. But still, Carol, a big strategy shift coming from America Online. And, by the way, this is in "USA Today." So that is one story we're following.

Meanwhile, the market is looking very strong this morning. Yahoo! announcing a 2 for 1 stock split after a very strong report last night. Profits up sharply in the recent quarter. General Electric, one of the Dow 30, reporting this morning -- back to you.

COSTELLO: All right, Carrie Lee live from the NASDAQ market site.

Many thanks to you. Let's head live to Baghdad right now.

As I told you, General Ricardo Sanchez is holding a news conference right now.

We're going to dip in to listen to what he has to say.

LT. GEN. RICARDO SANCHEZ, COMMANDER, JOINT TASK FORCE: ... engagements in al-Najaf, Karbala, al-Kut, Basra and a number of other cities.

Today in Fallujah, the 1st Marine Expeditionary Force and the Iraqi Civil Defense Corps continue Operation Vigilant Resolve. They have made tremendous progress in restoring the legitimate authority to Fallujah. There has been enemy resistance, but your fellow Iraqis and coalition forces continue the relentless pursuit of key targets in the heart of Fallujah. But the progress has been measurable.

The Iraqi Civil Defense Corps and the coalition forces will conduct a deliberate, sustained operation that will eventually transition to stability operations once our objectives have been achieved.

The Marines are making great progress and I am totally confident that we will succeed. The security situation will improve over the days and weeks ahead. Once the security situation in Fallujah is stabilized, the citizens in Fallujah will find no better friend than the Marines of the 1st Marine Expeditionary Force. They are experts at civil military operations and they have substantial resources available to improve the quality of life of the citizens of Fallujah.

That has been our commitment to the people of this country as long as we have been here and we definitely intend to fulfill that promise. There is a new dawn approaching that will bring a bright, secure future to those Iraqis who have chosen to support freedom and democracy. That is what we stand for. That is what Iraqis expect. And that is what we are committed to in this country.

In the center and southern regions of Iraq, coalition and Iraqi security forces have commenced Operation Resolute Sword to destroy the militia forces of Muqtada al-Sadr. In Baghdad, our forces remain on the offensive, conducting intelligence based raids to destroy Sadr's militia as they attempt to intimidate the population.

Despite attempts to incite violence, attack government facilities and disrupt the lives of Iraqi citizens, coalition units are in firm control of the city of Baghdad. No government or police buildings are in the hands of the insurgents and the number of attacks by illegal militias has been substantially reduced.

In a number of cities in southern Iraq, new engagements by Sadr's militia are being met by a determined coalition response. Offensive operations will continue to take the fight to Sadr's militia, its leaders and facilitators.

Sadr's gang is attempting, without success, to sabotage progress toward a free and independent Iraq. It is attempt to intimidate the majority of moderate citizens of the country, who seek democracy and a society that is ruled by law and not by the barrel of a gun.

Rightly, the vast majority of Iraqis reject this message and the coalition and Iraqi security forces will continue to attack to destroy this disruptive force and to kill or capture its membership and its leadership.

My assessment is that we will continue to see this violence for some time, until Muqtada al-Sadr turns himself in or his militia is destroyed. Coalition military forces will conduct powerful, deliberate, very robust military operations until the job is done. We are committed and we will not be deterred. Let there be no doubt -- we will continue the attacks until Sadr's influence is eliminated and Sadr's militia is no longer a threat to Iraq and its citizens.

As the coalition forces continue to reduce extremist elements in the country, we also stand ready to provide a measure of security for the Arbayeen observances.

There is no doubt that extremists and terrorists are plotting to interfere with these holy observances in order to create chaos and promote sectarian violence. Terrorists like the Zarqawi network have declared their intent to kill Shia and we would expect that they would attempt to use the recent violence and the Arbayeen pilgrimage as an opportunity to strike at the Iraqi people again. The citizens of Iraq must be particularly vigilant during these observances. We have taken all possible precautions, in coordination with Iraqi security forces, national, regional and local government and religious authorities, in an effort to minimize the risks to the civilian population that will be participating in these pilgrimages.

We caution all pilgrims that the holy cities are potentially dangerous places during this period, but we will be prepared to assist in the event of any violence.

As you know, CJTF-7 is in the middle of a major troop rotation and this provides an increased number of U.S. troops in the country. We are taking advantage of these forces and we will manage the redeployment to give us the combat power that is necessary to accomplish the missions at hand.

Let me finish at this point. But before taking your questions, let me re-emphasize that the coalition forces are clear in their purpose -- to provide a safe and secure environment for the people of Iraq. We will not let a small group of criminals and thugs control the destiny of this country. We will not let terrorists inspire and create sectarian violence. The overwhelming majority of Iraqis seek democracy and sovereignty. And the coalition shares in those aspirations. We remain resolute in our purpose and the people of Iraq can be assured of our resolve. We will maintain stability in Iraq and continue the forward progress to democracy and to sovereignty.

I will now take your questions.

QUESTION: General, Greg Ahrmeier (ph) from the German Press Agency, the DPA.

Could you tell us how many U.S. and coalition soldiers are currently in Iraq. Defense Secretary Rumsfeld was saying yesterday that given their rotation, there are more in the country and they may stay more in the country.

SANCHEZ: Yes, the current strength of the American forces in the country -- correction, the coalition forces in the country are about 145,000. And we have the 1st Armored Division and the 1st Calvary Division undergoing a transfer of authority here in the city of Baghdad. And we have, we have the 1st Armored Division and the 1st Calvary Division undergoing a transfer of authority here in the city of Baghdad. And we have a substantial number of forces that have not rotated out of the country yet, as part of this transfer of authority.

QUESTION: How many of this is U.S.?

SANCHEZ: About a hundred and -- I believe...

COSTELLO: We're going to step away right now.

Coming up on DAYBREAK, we're going to talk about religion and the war in Iraq. We're also going to talk to Barbara Starr about troop deployment. She's been listening to that news conference live out of Baghdad. She also questioned Donald Rumsfeld and General Myers yesterday. We'll hear what she has to say.

Back to the religion part of the equation, though, what special problems occur when the coalition fights religious leaders and their followers take up positions in the region's holy site.

We'll be right back with much more.

(COMMERCIAL BREAK)

COSTELLO: One of the most sensitive issues facing U.S. troops in Iraq -- religion. U.S. General Mark Kimmitt says when you start using a religious location for military purposes, it loses its protected status. And Defense Secretary Donald Rumsfeld is warning pilgrims about military action in Iraq's holy cities.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: We caution all pilgrims that the holy cities are potentially dangerous places during this period. U.S. and Iraqi security forces took precautions to mitigate those risks and to prepare for the possibility of violence.

(END VIDEO CLIP)

COSTELLO: Our senior international editor, David Clinch, joins us now to talk about war and religion. Specifically what Donald Rumsfeld was talking about and General Kimmitt was the attack on this mosque by U.S. forces yesterday.

DAVID CLINCH, CNN INTERNATIONAL EDITOR: Right. Well, I think they're talking about two things. They're talking about the attacks on mosques. And when we say attacks on mosques, what -- the U.S. military says that in Fallujah during the day yesterday, they identified and located a group of the insurgents they're looking for in a compound adjacent to the mosque. And they hit that compound.

Locals on the ground tell us, tell us and tell everybody, that amongst the dead in that building, whether they were in the mosque itself or the compound next to it, were worshippers and civilians.

COSTELLO: Didn't they also find guns?

CLINCH: The U.S. Marines say that they found guns in that compound adjacent to that mosque. We do know, for instance, sort of stepping back again, we were talking about this yesterday, that from the mosques themselves, we've had clerics in Fallujah and elsewhere calling for a jihad against the Marines as they move into these cities.

So it's all merging together, the religion and politics.

COSTELLO: And let's get to the rules of war, about attacking holy places. And that's what General Kimmitt was talking about.

CLINCH: Right. Well, they're imprecise, let's put it that way. But it's down to the Marines on the ground -- and obviously Barbara Starr will know more about this -- to identify a target that they can clearly say is separate from any civilian target. And if they believe it's a legitimate target and they're being fired upon, they have the right to fire on it. But just because they have the right doesn't mean they'll do it. They always want to identify exactly what they're seeing and whether it is worth hitting it or not.

What the risks are -- and bringing up another subject, not just about going into Fallujah, but we are seeing this Shiite uprising, if you want to put it that way, in all the Shiite cities and what Mr. Rumsfeld may also have been referring to when he says pilgrims, we have another one of these Shiite holidays coming up this coming weekend in the city of Karbala, south of Baghdad, where a million plus pilgrims, including, of course, fellow Shiites from neighboring Iran, coming in, as they have been doing ever since the U.S. moved into Iraq.

One of the ironies of that is that Iranian Shiite pilgrims are free for the first time in their lives, many of them, to visit these very holy cities and to go to these places.

COSTELLO: Do you think there might be an effort on the United States' part to keep the Iranians in Iran this time around?

CLINCH: We're not clear on that. We do know that they have been monitoring fare more closely than before the Iranians that have been coming across the border. And we do know that there's a complicating factor in Karbala and elsewhere, that there's actually fighting going on right now. And, of course, also in neighboring Najaf you've got this man who's inciting this uprising, Muqtada al-Sadr, who is holed up next to a mosque there.

So the issue of religion and the militancy merging together, and we'll see how dangerous that might become over the coming few days.

COSTELLO: All right, David Clinch, many thanks to you.

CLINCH: OK.

COSTELLO: And now the latest headlines at this hour.

It's 6:29 Eastern.

Countdown to testimony -- National Security Advisor Condoleezza Rice speaks this morning before the bipartisan commission investigating the September 11 terrorist attacks.

Sunni and Shiite Muslims are bringing aid to the people of Fallujah this morning. You're looking at a convoy of cars carrying food and medical supplies. It's approaching the city, where dozens of Iraqis have been killed in fighting with U.S. Marines.

Pope John Paul II is observing Holy Thursday mass at the Vatican. Security there is pumped up due to fears of a possible Easter Week terrorist attack.

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Aired April 8, 2004 - 06:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The eyes of the world will be on the people in this building today -- the nation's capital here in the United States. One woman, Condoleezza Rice, will tell us what she knew and when she knew it.
And good morning to you.

From the CNN global headquarters in Atlanta, this is DAYBREAK for April 8.

I'm Carol Costello.

Let me bring you up to date right now.

Three hours from now, all eyes will be on Condoleezza Rice. She will testify in public under oath before the 9/11 Commission.

Dramatic new pictures of Marines under fire near Fallujah. There you can see their tank was hit by an RPG. At least four Marines were wounded when that happened. No deaths to report.

And you are looking at a live picture out of Baghdad right now. We are awaiting a briefing from Lieutenant General Ricardo Sanchez, who, of course, is the head of the coalition forces in Iraq. As soon as that begins, we will bring it to you live.

British Prime Minister Tony Blair comes to the United States next week for talks on how to stop the violence in Iraq. He'll meet with President Bush in Washington and Kofi Annan at the United Nations.

Times Square -- you see it on TV every New Year's Eve and millions of us have been there in person. Today, it's Times Square's birthday. It turns 100 years old -- Chad.

CHAD MYERS, CNN CORRESPONDENT: That may be the only place you can get a sandwich as big as your head for about $14.

COSTELLO: Exactly. $14? How about $24?

MYERS: Sometimes. And then they charge you to share it, for an extra plate.

(WEATHER REPORT)

COSTELLO: Just shy of three hours from now, a high stakes political drama will begin unfolding live on television, as National Security Advisor Condoleezza Rice officers her long awaited testimony before the September 11 Commission.

And as CNN's John King reports, a lot is riding on her appearance.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): She is Condi to him, Dr. Rice to others, so close a friend and adviser that her credibility will without a doubt reflect on his.

PETER HART, DEMOCRATIC POLLSTER: She was a rising star and I think she's a fallen star at this stage. She started out with a sense of credibility, a sense of purpose. And now I think people are wondering, is she telling the truth?

KING: Consider this 9/11 snapshot an illustration of Rice's case that she had the direct line to the president and that former deputy Richard Clarke's judgments are warped because of his distance from the decision-makers. Given the damming portrait painted by Clarke, Rice's testimony to the 9/11 Commission is in many ways a rebuttal.

KAREN HUGHES, BUSH-CHENEY CAMPAIGN ADVISER: I think that's particularly important now that they've seen the facts in a what I would think of somewhat a distorted perspective.

KING: Rice says Clarke is wrong to assert Bush White House all but ignored the terrorist threat. But her major speeches in that period contained no mentions of al Qaeda or terrorism. And critics suggest she didn't listen enough to Clarke's warnings because he had such a prominent role in the Clinton White House.

Not so, says Rice. On July 5, 2001, she personally told Clarke to warn the Federal Aviation Administration and other agencies about a spike in intelligence suggesting possible attacks. That was a busy period on the world stage, improving ties with Russia and selling a controversial missile defense plan the major focus for Mr. Bush at his first G8 Summit in Italy in mid-July.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: But it is only six months. And these are complicated and complex issues and they will take some time.

(END VIDEO CLIP)

KING: Summit security was extraordinary in part because of intelligence, some of it from CIA, suggesting terrorists might try to hijack a plane and crash it into the meetings. Yet, to this day, Rice says until 9/11 she personally could not have imagined terrorists using planes as weapons here in the United States. Why not is one of the critical questions now for a witness who knows the world will be watching.

HART: There is no sense of an authority. She knows all the facts like a very smart schoolgirl. You're not sure that you're getting the broader policy implications.

KING: Exceeding expectations is a constant in her story, a university provost and accomplished concert pianist, at 49, among the closest friends and closest advisers to a president defined by crisis, now facing a credibility challenge and a performance like no other.

John King, CNN, the White House.

(END VIDEOTAPE)

COSTELLO: Lawmakers will have other things to deal with, too, today, like whether the United States needs a new domestic intelligence service. Congressional researchers say it's an option lawmakers may want to consider. A newly released report from the non- partisan Congressional Research Service says such an agency, independent of the FBI, could be a good way to fight terrorism inside the United States. But, officials at the Bureau and its parent agency, the Justice Department, disagree. They insist the FBI is fully capable of handling its responsibilities.

By the way, you can catch Condoleezza Rice's entire testimony live right here on CNN. It begins at 9:00 Eastern this morning. Of course, that's just shy of three hours from now.

More on today's hearings this hour. We'll go live to the White House to find out how the Bush administration feels about Rice testifying. Also within DAYBREAK, we've heard the 9/11 Commission members say they're not partisan, but what role will politics play in their investigation?

And Condoleezza Rice's image -- what do the power players think of her and what's in her political future? All that in the next half hour of DAYBREAK.

U.S. troops are holding their positions in Fallujah today. We are bringing you the latest pictures from the front lines. This tanker has clearly been hit. You're going to see it shortly. There it is. You see the fire there. Marines inside were wounded and they came under RPG fire. We're told some of them went right back to fighting after taking care of their more seriously wounded comrades, including that guy you're seeing right there. In fact, they had to convince him to leave the tank. He went back and made sure his buddies got out of that tank.

We have no casualty figures to pass along to you this morning, but no deaths have been reported in this recent battle, no American deaths.

Thousands of Iraqis, both Sunni and Shiite Muslims, are reportedly heading for Fallujah. That's the site of bloody fighting this week between Iraqi insurgents and U.S. Marines.

More on this development now from CNN's Jim Clancy in Baghdad -- and, Jim, there seems to be hundreds of them.

JIM CLANCY, CNN CORRESPONDENT: Certainly. And I think, you know, when you look at the battlefield from a distance there at the CNN Center, you see, of course, the epicenter of the fighting, the Marines engaged there in Fallujah. But not to forget there's another battle that's going on that is probably more significant. It is the battle for the hearts and the minds of the Iraqi people. Will they stand up? Will they unite? How will they react to the military response to the United States?

Well, we're getting a look at that right now today. Let's take a look at that convoy. This was put together on just a matter of hours notice. Appeals were raised by a Sunni Muslim mosque. But the people in the convoy headed towards Fallujah today with blood, food, water, medical supplies, say that they representative Shia, Kurds and Sunnis, that they are united in support of the people of Fallujah.

In their view, four dead U.S. security contractors, it was a terrible thing, but it does not justify the siege of 400,000 people in the city of Fallujah. This is something that the Coalition Authority is keeping a close watch on.

On another front, of course, you've got the Shia that are in Iraq, behind -- some of them behind this radical leader, Muqtada al- Sadr. Al-Sadr's Al-Mahdi Army, his private militia, harassing U.S. and coalition forces in various areas, including Sadr City here in Baghdad.

The military response by the U.S.? They went in today and they destroyed one of his offices there in Sadr City. This not likely to affect them strategically, affect his movement strategically, because he can always open another office somewhere else. But it is symbolic and it is showing the U.S. is taking the direct military action that it has threatened.

But there's no magic bullet for the unemployment. There's no smart bomb that can deal with the insecurity in this country or take out insurgents and leave the nearby innocent civilians unscathed. That is a part of the problem and this impatience on the part of the Iraqis, this insecurity situation, many of them coming together, talking about unity. There's been some really interesting discussions in the newspapers today. Independent newspapers, Carol, saying things -- and I've got one of the editorials here. It was titled, "We're All Iraqis" and it challenged the U.S. to call them all militants, call them all insurrectionists, because more than ever, they say, they feel united -- Carol.

COSTELLO: Well, something else that I noticed in that big convoy, people were holding up pictures of Sheikh al-Sistani. He sent out a call today, too, that related to the violence.

What did he say, Jim?

CLANCY: I don't think that that was Ayatollah Ali al-Sistani. I believe that that was -- I'm not sure who it was.

COSTELLO: They were just holding up a picture of him.

CLANCY: Well, they were holding up pictures of religious leaders.

COSTELLO: I understand.

CLANCY: And, you know, that is a very common thing here and different people have different associations. Certainly, Ayatollah Ali al-Sistani a significant figure in Iraq. He made a call for calm. He wants everybody to calm things down. Some people here, on the Governing Council and other Iraqis, as well, are calling for some kind of negotiations. They believe that it's inevitable.

But what all Iraqis want to see is an end to this insecurity, an end to the killing, an end to the dying. They want their lives to go back to normal as soon as possible.

COSTELLO: Jim Clancy live from Baghdad this morning.

Now from some stories from across America this Thursday.

Here in Atlanta, the FBI is investigating a suspicious package found in an apartment restroom. Sources say it was taped to a cell phone. The FBI calls it a highly flammable device, but not a bomb. Authorities are checking videotape from more than 300 security cameras at the airport.

Here's an update for you on that Amtrak derailment in Mississippi. Federal investigators say the train was doing nearly 80 miles per hour when it appears the engineer pulled the emergency brake. We're not sure why yet. They'll talk to him about that later today. The crash killed one person and injured just about all of the 70 people on board.

In New York, a grand jury investigates possible jury tampering in the Tyco corporate corruption trial. The six month long case ended in a mistrial Friday. Tyco's former CEO and CFO were accused of looting $600 million from the company.

MYERS: Carol, it's time to give away the coffee mug.

COSTELLO: Good. Something happy.

MYERS: We'll try.

COSTELLO: All right.

MYERS: I'll try to get some good weather in there, as well.

Yesterday, ask for four countries besides the United States that have significant troop presence in Iraq. The answer to that, although I got an awful lot of other answers from this guy -- Italy, Poland, Ukraine and the U.K. were the four that we were looking for. And another star as put on the Hollywood Boulevard yesterday. Who was it? It was Ted Turner.

And the winner, Colonel Gil Gilleland, FORSCOM budget officer. Got a colonel going on this morning, so.

COSTELLO: And he named every single country participating in the fight in Iraq on behalf of the United States.

MYERS: Albania, Azerbaijan, Bulgaria, the Czech Republic, Denmark, the Dominican Republic, Georgia, El Salvador, Estonia, Honduras, Hungary, blah, blah, blah. And he keeps going.

COSTELLO: Well, good for him.

MYERS: Obviously, he knows his stuff.

COSTELLO: Congratulations, Colonel, and thank you for watching DAYBREAK.

MYERS: Thanks. Exactly.

COSTELLO: We'll have the new questions at 6:50 Eastern time.

MYERS: Yes.

COSTELLO: Also coming up on DAYBREAK, when can they come home? That's what thousands of troops and their families want to know? But is there a simple answer? Our Pentagon correspondent shares the latest deployment strategy.

And AOL isn't just members only anymore. New features available to you soon.

And a tune-up you can do to make sure your mower is ready to tackle the lawn season. Chad will have that for you later.

This is DAYBREAK for April 8.

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COSTELLO: What a beautiful and eerie shot of the Capitol this morning.

Welcome back to DAYBREAK.

Your news, money, weather and sports.

It is 6:14 Eastern time.

Here's what's all new this morning.

Less than three hours from now, Condoleezza Rice takes the hot seat. She'll testify publicly under oath to the 9/11 Commission.

Coalition troops carry out a precision raid in Sadr City. They destroy a building used by militiaman of the wanted cleric, Muqtada al-Sadr.

In money news, here's the new Florida quarter. You're going to see it soon, I promise. It does not have a hanging chad on the back. Oh, no. There it is. It celebrates exploration, from journeys to the New World and trips into space. In sports, anybody in the market for a green jacket? Weather permitting, the Masters starts today in Augusta, Georgia. And 93 golfers will be competing for that jacket plus a whole lot of cash.

In culture, AOL launches a new online feature called the startup. It follows four small business owners for the first 12 months and unlike another reality show, no one gets fired.

MYERS: I've seen some of those commercials now. He goes, "You're out of here!"

(WEATHER REPORT)

COSTELLO: All right, those are the latest headlines.

Now for more news on AOL.

It's time for a little business buzz.

Let's head live to the NASDAQ market site in Times Square and Carrie Lee -- good morning.

CARRIE LEE, CNN CORRESPONDENT: Good morning, Carol.

A big strategy shift from America Online. They're going to start offering more content for free online. So what they're going to be doing is offering a growing portion of news, sports, music and other content on the Internet for free. America Online, of course, like CNN, is a unit of Time Warner.

This is a big strategy shift because the unit has always sort of prided itself on its premium content. That is how they've gotten subscribers to pay for the service. So this has already started. It's set to come out more and more over the next couple of weeks and months. And what executives are hoping to do is really capitalize on the growing Web advertising market. That's a business that's been picking up lately. It's also a nod to millions of AOL dialup subscribers, who have been moving to high speed Internet providers and also other discounted dialup services.

Now, AOL says it will keep its premium, premium content on a pay for basis, things like concert and sports clips, maybe offer them first to subscribers and then maybe a week or so later for free. But still, Carol, a big strategy shift coming from America Online. And, by the way, this is in "USA Today." So that is one story we're following.

Meanwhile, the market is looking very strong this morning. Yahoo! announcing a 2 for 1 stock split after a very strong report last night. Profits up sharply in the recent quarter. General Electric, one of the Dow 30, reporting this morning -- back to you.

COSTELLO: All right, Carrie Lee live from the NASDAQ market site.

Many thanks to you. Let's head live to Baghdad right now.

As I told you, General Ricardo Sanchez is holding a news conference right now.

We're going to dip in to listen to what he has to say.

LT. GEN. RICARDO SANCHEZ, COMMANDER, JOINT TASK FORCE: ... engagements in al-Najaf, Karbala, al-Kut, Basra and a number of other cities.

Today in Fallujah, the 1st Marine Expeditionary Force and the Iraqi Civil Defense Corps continue Operation Vigilant Resolve. They have made tremendous progress in restoring the legitimate authority to Fallujah. There has been enemy resistance, but your fellow Iraqis and coalition forces continue the relentless pursuit of key targets in the heart of Fallujah. But the progress has been measurable.

The Iraqi Civil Defense Corps and the coalition forces will conduct a deliberate, sustained operation that will eventually transition to stability operations once our objectives have been achieved.

The Marines are making great progress and I am totally confident that we will succeed. The security situation will improve over the days and weeks ahead. Once the security situation in Fallujah is stabilized, the citizens in Fallujah will find no better friend than the Marines of the 1st Marine Expeditionary Force. They are experts at civil military operations and they have substantial resources available to improve the quality of life of the citizens of Fallujah.

That has been our commitment to the people of this country as long as we have been here and we definitely intend to fulfill that promise. There is a new dawn approaching that will bring a bright, secure future to those Iraqis who have chosen to support freedom and democracy. That is what we stand for. That is what Iraqis expect. And that is what we are committed to in this country.

In the center and southern regions of Iraq, coalition and Iraqi security forces have commenced Operation Resolute Sword to destroy the militia forces of Muqtada al-Sadr. In Baghdad, our forces remain on the offensive, conducting intelligence based raids to destroy Sadr's militia as they attempt to intimidate the population.

Despite attempts to incite violence, attack government facilities and disrupt the lives of Iraqi citizens, coalition units are in firm control of the city of Baghdad. No government or police buildings are in the hands of the insurgents and the number of attacks by illegal militias has been substantially reduced.

In a number of cities in southern Iraq, new engagements by Sadr's militia are being met by a determined coalition response. Offensive operations will continue to take the fight to Sadr's militia, its leaders and facilitators.

Sadr's gang is attempting, without success, to sabotage progress toward a free and independent Iraq. It is attempt to intimidate the majority of moderate citizens of the country, who seek democracy and a society that is ruled by law and not by the barrel of a gun.

Rightly, the vast majority of Iraqis reject this message and the coalition and Iraqi security forces will continue to attack to destroy this disruptive force and to kill or capture its membership and its leadership.

My assessment is that we will continue to see this violence for some time, until Muqtada al-Sadr turns himself in or his militia is destroyed. Coalition military forces will conduct powerful, deliberate, very robust military operations until the job is done. We are committed and we will not be deterred. Let there be no doubt -- we will continue the attacks until Sadr's influence is eliminated and Sadr's militia is no longer a threat to Iraq and its citizens.

As the coalition forces continue to reduce extremist elements in the country, we also stand ready to provide a measure of security for the Arbayeen observances.

There is no doubt that extremists and terrorists are plotting to interfere with these holy observances in order to create chaos and promote sectarian violence. Terrorists like the Zarqawi network have declared their intent to kill Shia and we would expect that they would attempt to use the recent violence and the Arbayeen pilgrimage as an opportunity to strike at the Iraqi people again. The citizens of Iraq must be particularly vigilant during these observances. We have taken all possible precautions, in coordination with Iraqi security forces, national, regional and local government and religious authorities, in an effort to minimize the risks to the civilian population that will be participating in these pilgrimages.

We caution all pilgrims that the holy cities are potentially dangerous places during this period, but we will be prepared to assist in the event of any violence.

As you know, CJTF-7 is in the middle of a major troop rotation and this provides an increased number of U.S. troops in the country. We are taking advantage of these forces and we will manage the redeployment to give us the combat power that is necessary to accomplish the missions at hand.

Let me finish at this point. But before taking your questions, let me re-emphasize that the coalition forces are clear in their purpose -- to provide a safe and secure environment for the people of Iraq. We will not let a small group of criminals and thugs control the destiny of this country. We will not let terrorists inspire and create sectarian violence. The overwhelming majority of Iraqis seek democracy and sovereignty. And the coalition shares in those aspirations. We remain resolute in our purpose and the people of Iraq can be assured of our resolve. We will maintain stability in Iraq and continue the forward progress to democracy and to sovereignty.

I will now take your questions.

QUESTION: General, Greg Ahrmeier (ph) from the German Press Agency, the DPA.

Could you tell us how many U.S. and coalition soldiers are currently in Iraq. Defense Secretary Rumsfeld was saying yesterday that given their rotation, there are more in the country and they may stay more in the country.

SANCHEZ: Yes, the current strength of the American forces in the country -- correction, the coalition forces in the country are about 145,000. And we have the 1st Armored Division and the 1st Calvary Division undergoing a transfer of authority here in the city of Baghdad. And we have, we have the 1st Armored Division and the 1st Calvary Division undergoing a transfer of authority here in the city of Baghdad. And we have a substantial number of forces that have not rotated out of the country yet, as part of this transfer of authority.

QUESTION: How many of this is U.S.?

SANCHEZ: About a hundred and -- I believe...

COSTELLO: We're going to step away right now.

Coming up on DAYBREAK, we're going to talk about religion and the war in Iraq. We're also going to talk to Barbara Starr about troop deployment. She's been listening to that news conference live out of Baghdad. She also questioned Donald Rumsfeld and General Myers yesterday. We'll hear what she has to say.

Back to the religion part of the equation, though, what special problems occur when the coalition fights religious leaders and their followers take up positions in the region's holy site.

We'll be right back with much more.

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COSTELLO: One of the most sensitive issues facing U.S. troops in Iraq -- religion. U.S. General Mark Kimmitt says when you start using a religious location for military purposes, it loses its protected status. And Defense Secretary Donald Rumsfeld is warning pilgrims about military action in Iraq's holy cities.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: We caution all pilgrims that the holy cities are potentially dangerous places during this period. U.S. and Iraqi security forces took precautions to mitigate those risks and to prepare for the possibility of violence.

(END VIDEO CLIP)

COSTELLO: Our senior international editor, David Clinch, joins us now to talk about war and religion. Specifically what Donald Rumsfeld was talking about and General Kimmitt was the attack on this mosque by U.S. forces yesterday.

DAVID CLINCH, CNN INTERNATIONAL EDITOR: Right. Well, I think they're talking about two things. They're talking about the attacks on mosques. And when we say attacks on mosques, what -- the U.S. military says that in Fallujah during the day yesterday, they identified and located a group of the insurgents they're looking for in a compound adjacent to the mosque. And they hit that compound.

Locals on the ground tell us, tell us and tell everybody, that amongst the dead in that building, whether they were in the mosque itself or the compound next to it, were worshippers and civilians.

COSTELLO: Didn't they also find guns?

CLINCH: The U.S. Marines say that they found guns in that compound adjacent to that mosque. We do know, for instance, sort of stepping back again, we were talking about this yesterday, that from the mosques themselves, we've had clerics in Fallujah and elsewhere calling for a jihad against the Marines as they move into these cities.

So it's all merging together, the religion and politics.

COSTELLO: And let's get to the rules of war, about attacking holy places. And that's what General Kimmitt was talking about.

CLINCH: Right. Well, they're imprecise, let's put it that way. But it's down to the Marines on the ground -- and obviously Barbara Starr will know more about this -- to identify a target that they can clearly say is separate from any civilian target. And if they believe it's a legitimate target and they're being fired upon, they have the right to fire on it. But just because they have the right doesn't mean they'll do it. They always want to identify exactly what they're seeing and whether it is worth hitting it or not.

What the risks are -- and bringing up another subject, not just about going into Fallujah, but we are seeing this Shiite uprising, if you want to put it that way, in all the Shiite cities and what Mr. Rumsfeld may also have been referring to when he says pilgrims, we have another one of these Shiite holidays coming up this coming weekend in the city of Karbala, south of Baghdad, where a million plus pilgrims, including, of course, fellow Shiites from neighboring Iran, coming in, as they have been doing ever since the U.S. moved into Iraq.

One of the ironies of that is that Iranian Shiite pilgrims are free for the first time in their lives, many of them, to visit these very holy cities and to go to these places.

COSTELLO: Do you think there might be an effort on the United States' part to keep the Iranians in Iran this time around?

CLINCH: We're not clear on that. We do know that they have been monitoring fare more closely than before the Iranians that have been coming across the border. And we do know that there's a complicating factor in Karbala and elsewhere, that there's actually fighting going on right now. And, of course, also in neighboring Najaf you've got this man who's inciting this uprising, Muqtada al-Sadr, who is holed up next to a mosque there.

So the issue of religion and the militancy merging together, and we'll see how dangerous that might become over the coming few days.

COSTELLO: All right, David Clinch, many thanks to you.

CLINCH: OK.

COSTELLO: And now the latest headlines at this hour.

It's 6:29 Eastern.

Countdown to testimony -- National Security Advisor Condoleezza Rice speaks this morning before the bipartisan commission investigating the September 11 terrorist attacks.

Sunni and Shiite Muslims are bringing aid to the people of Fallujah this morning. You're looking at a convoy of cars carrying food and medical supplies. It's approaching the city, where dozens of Iraqis have been killed in fighting with U.S. Marines.

Pope John Paul II is observing Holy Thursday mass at the Vatican. Security there is pumped up due to fears of a possible Easter Week terrorist attack.

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