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CNN Live At Daybreak

Fight for Iraq; Tall Order; Tiananmen & Time; The Great Debate

Aired June 03, 2004 - 05:30   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: Taking out insurgents in Kufa, the U.S. military goes on the offensive.
It is Thursday, June 3. This is DAYBREAK.

And good morning to you, welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

Here's what's happening right now.

Three Italian hostages have been taken captive in Iraq. They have been seen alive for the first time in more than a month. The Arab TV network Al Jazeera is showing the video you're looking at of the men. In the tape, one hostage says their captors are treating them -- quote -- "excellently."

Stone cold innocent that's how Scott Peterson's attorney describes his client. Opening statements in the murder trial are now over and the prosecution has called its first witness.

In money news, crude oil prices on a roller coaster ride. The price is down to $39.96 a barrel. That's down more than $2 from Tuesday's record high. Just the day before, the price zoomed up more than $2.

In sports, Smarty Jones is the odds-on favorite to win Saturday's Belmont Stakes and the first Triple Crown in 26 years. Odds makers make the undefeated horse the two-to-five favorite in the race.

In culture, Sotheby's in New York is auctioning off property from Katherine Hepburn's estate. A public exhibition begins today. The auction gets under way a week from today -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

In Iraq, a shift in the fighting, at least for today, as U.S. forces train their sights on Kufa in southern Iraq.

CNN's Guy Raz embedded with the 237th Armored Battalion. He joins us live via videophone this morning.

What's happening? GUY RAZ, CNN CORRESPONDENT: Carol, good morning.

The battle has now definitively shifted from Najaf to Kufa in southern Iraq. Kufa, of course, a neighboring town to Najaf.

Now earlier this morning, about a hundred U.S. troops, backed by tanks and armored vehicles, entered the heart of Kufa, right into the center, where they immediately clashed with insurgents, members of the Mehdi Militia. That militia, of course, loyal to the young radical Shiite cleric Muqtada al-Sadr.

Now the mission this morning was designed to eliminate a mortar team, an insurgent mortar team, that has shelled this forward operating base, where we're located, about a mile from Kufa. They have shelled this base 50 times in the last 24 hours. And we understand an estimated 30 insurgents were killed in the clashes this morning and 4 U.S. troops were wounded.

Now, Carol, senior military officers here tell us that they will continue to engage with the insurgents until this Mehdi Militia disarms and until its leader Muqtada al-Sadr turns himself in over to Iraqi police. Now U.S. forces also captured several rounds of rocket- propelled grenades, mortars and artillery.

Now over the past sort of 24 hours, in the past few days, insurgents have, in a sense, stepped up this fight. They have begun to launch 120 millimeter round mortars at this site. Now those are enormous weapons, something like mini missiles. They have a kill radius of about 30 meters, about 35 yards, Carol. And U.S. officials here say that until those mortars are out of the hands of these insurgents, they will continue to do battle -- Carol.

COSTELLO: We'll check back with you. Guy Raz reporting live from Kufa in southern Iraq this morning.

Want to talk about a letter that CNN received overnight via e- mail. It came from Baghdad.

Eli Flournoy is here to help me explain this.

It came from Baghdad from Ahmad Chalabi's lawyers, and it had some very interesting things in it.

ELI FLOURNOY, CNN SENIOR INTERNATIONAL EDITOR: Right. We've been talking about the whole situation Ahmad Chalabi. The allegations that he leaked to Iranian intelligence that the United States had broken the secret code of Iranian intelligence and has been monitoring Iranian transmissions.

COSTELLO: Which, in essence, would make him a spy for Iran?

FLOURNOY: That would. And it would -- it could seem as if maybe he is playing both sides. Ahmad Chalabi has been very close to the U.S. administration, yet also certainly close to the Iranians.

COSTELLO: So what does he say about those charges in his letter? FLOURNOY: Well in the letter he -- his lawyers have sent a letter to FBI Director Mueller and to the Justice -- to the Justice Department denying flatly that the -- that Chalabi did this leak.

COSTELLO: I believe the exact words he calls the charge stupid and false.

FLOURNOY: That's correct. That's correct. He's denied all the -- he's denied all the charges. And in fact, you know, including the detail that a drunk American told him -- a drunk American official told him that -- you know told him that they -- that they had broken the code.

COSTELLO: That they had broken the code. But polygraph tests are going on right now in the Pentagon to find out who that alleged drunken American was.

I want to show some of the quotes from the letter itself right now.

One quote, "Dr. Chalabi denies all the charges which have been anonymously leaked to the press." And he really kind of disses those anonymous sources and wanting to know who they are.

FLOURNOY: Right, exactly. I mean, just as you say, I mean there are -- there's an investigation going on in the Pentagon right now. Polygraph tests of Pentagon officials, who would have had access to this kind of information, which is a relatively small group of people that would have access to this top secret code information. It's just a remarkable story that's getting more interesting by the day.

COSTELLO: Yes, another quote from the letter, "Dr. Chalabi would never endanger the national security of the United States," because, of course, he said in the past that he is the America's best friend. And the letter continues, "Dr. Chalabi is willing and ready to come to Washington to be interviewed fully by law-enforcement agents on the subject and to answer all questions on this subject fully and without reservation." Of course the only problem with that is he could be arrested if he sets foot back on American soil.

FLOURNOY: Exactly. That's a big question that's out there is what is Chalabi's culpability himself if, in fact, he did go back to the United States, could he be arrested? Could he be -- could he be prosecuted? And what are the implications for any administration officials, Pentagon officials who may have been involved in this? This is the potential to be a huge problem.

COSTELLO: I'm sure the story will continue to grow over the coming days.

FLOURNOY: Absolutely.

COSTELLO: Eli, thanks very much.

The Army says it is stretched to the limit and thousands of soldiers cannot go home. If their units are getting ready to leave for Iraq or Afghanistan, they are going to have to lead them, even if they were about to retire or leave the service.

The new Iraqi prime minister is at work this morning and he has already proposed something that was not in the U.S. plans for Iraq. He wants a new Iraqi army made up of members of Saddam Hussein's old army.

Our senior Pentagon correspondent Jamie McIntyre has details on a tall order.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Many analysts believe it was a blunder for the U.S. not to try to keep the Iraqi army together after defeated on the battlefield. Now, more than a year later, Iraq's new prime minister says he would like to reconstitute as many as four army divisions using the same Iraqi soldiers. That wasn't in the original plan, but the American general just put in charge of training Iraqi security forces insists Iraq needs to make its own decisions.

LT. GEN. DAVID PETRAEUS, U.S. ARMY: Bringing back former elements of the Iraq army, I think, is a distinct possibility, if this is an option that they choose to follow.

MCINTYRE: General Petraeus has been given a tall order by his commander in chief: Train some 260,000 Iraqi soldiers, police and other security forces.

BUSH: We're stepping up our efforts to train effective Iraqi security forces that will eventually defend the liberty of their own country.

MCINTYRE: But even as President Bush was underscoring his goal, Congress was being told that the Pentagon's cumbersome acquisition rules have for months delayed weapons for the small number of Iraqi forces already trained.

GEN. PETER PACE, JOINT CHIEFS VICE CHAIRMAN: Their equipment right now is on order but not yet in theater.

MCINTYRE: And lack of equipment only partly explains the poor motivation of many Iraqi soldiers.

PETRAEUS: Understandably, Iraqis do not want to fight for a foreign power, no matter who that is. They want to fight for their own government.

MCINTYRE: Experts say success hinges on making sure the new army is loyal to the new government.

KENNETH POLLACK, BROOKINGS INSTITUTION: What they want to make sure is that Saddam's army is not reconstituted, but that doesn't mean that Saddam's soldiers can't be brought back to the colors, retrained, re-equipped, taught how to function as an army in a democratic society and contribute to a real security problem that Iraq has right now. MCINTYRE (on camera): While the Iraqi army under Saddam Hussein was a force for oppression, most foot soldiers had little choice but to follow orders. Putting those men back in uniform now will help Iraq with two of its more desperate needs: security and jobs.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COSTELLO: And a programming note for you, Adnan Pachachi, the man the United States wanted as Iraq's interim president, will be on "AMERICAN MORNING" this morning. You can see that less than 90 minutes from now at 7:00 a.m. Eastern.

Some stories from 'Across America' this Thursday.

In Tampa, Florida, arraignment for a woman facing a felony charge for leaving the scene of an accident. Two brothers, 13 and 3, were killed. Jennifer Porter, who acknowledged being involved in the March 31 accident, has pleaded not guilty. Her lawyer says Porter was too scared to stop.

In Los Angeles, charges against a 17-year-old boy are going to be hard to figure out. Police say the teenaged runaway stole this tanker truck and wrecked it, but not before leading police on an erratic chase that included at least eight collisions. And here is the truck the boy stole. The boy is hospitalized with many injuries, including broken arms and legs.

In Arizona, efforts to control the U.S.-Mexican border are sputtering. Homeland Security Undersecretary Asa Hutchinson said that by this week, border security should have been increased by 260 agents and 4 helicopters. He says so far only 110 agents have been added.

In the next hour of DAYBREAK, they are talking oil and gas in Beirut this morning, but will it make or break already high prices at the pump? We'll get some expert insight.

And Tiananmen Square, even after 15 years, old wounds never seem to heal. We're going to take you live to Beijing.

This is DAYBREAK for Thursday.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 5:44 Eastern. Here is what's all new this morning.

U.S. forces go after insurgents in the Iraqi city of Kufa. Troops backed by tanks take out insurgents who were firing mortars at forward operating base. Thirty insurgents were killed in this firefight.

Britain's air traffic control system back up and running, but a nearly hour-long shutdown earlier today caused some big time delays. The Airport Authority is trying to figure out what caused the computer glitch.

In money news, several U.S. airlines are in financial trouble again, and a House committee holds hearings today on airline finances. Among the witnesses, CEOs of Continental, Northwest, AirTran, America West, Frontier and United.

In sports, Kurt Warner's agent has been talking to the New York Giants, but there is no announcement yet. Warner is the quarterback who led the Rams to the Super Bowl twice, but St. Louis released him on Tuesday.

In culture, it may be the first of its kind, an ad by the Philadelphia Tourism Agency appealing to gay people to visit the city. Closing line, get your history straight and your nightlife gay -- Chad.

MYERS: Good morning, Carol.

(WEATHER REPORT)

MYERS: Back to you.

COSTELLO: Thank you, Chad.

Those are the latest headlines for you.

You won't find it in China's history books and any remnants of what happened 15 years ago today have long been removed. But on the eve of its anniversary, the images from the Tiananmen Square massacre will never go away.

CNN's Jaime FlorCruz joins us live now from Beijing.

So what's the mood leading up to the anniversary?

JAIME FLORCRUZ, CNN CORRESPONDENT: Carol, it seems like it's just an ordinary day here, June 3, in Beijing, and most people don't expect any public commemoration of Tiananmen today or tomorrow. And that's because most Chinese, especially the youth, know very little about Tiananmen '89. Most Chinese, in fact, care very little about politics in general and Tiananmen in particular. That's because they bought in the official line that economic development and social stability are more important than pursuing democracy.

So instead of pursuing politics, they are more interested in -- they are more preoccupied in pursuing wealth and personal goals and careers. And although there are indeed still some fibrins (ph), young and old, who are still wanting to commemorate June 4 tomorrow, but most of them have been either taken away or detained or on house arrest and therefore cannot do anything, any commemorative activities that they may have planned -- Carol.

COSTELLO: And just looking at those images a short time ago, it gave me chills, just like it did back in 1989. Have there been any democratic reform since then? FLORCRUZ: Not really, Carol. Most of the political reform that the current government is pursuing are more a militate (ph) incremental changes in the political system in terms of transparency, allowing a little bit more freedom. But the political reform or democratic reforms that 16 years ago the protestors in Tiananmen had advocated are still on the -- on the -- are still just blueprints. The issues that they raised at that time, corruption, lack of transparency, they still resonate even now -- Carol.

COSTELLO: What about some of the young people who took part in this demonstration, what's happened to them?

FLORCRUZ: Well most of the leaders who took part in the demonstration have either fled overseas or have buckled in or have been kind of sucked in the system. Many have taken up jobs in the academic community or are pursuing wealth in their own way. Those fibrins who are still pushing the limit have either been jailed or are marginalized. And they are the ones who we could still hear but their voices are so faint, drowned in this excitement and euphoria of China's booming economy -- Carol.

COSTELLO: Jaime FlorCruz, many thanks, live from Beijing, China this morning.

In the next hour of DAYBREAK, newly released audio tapes reveal new lows for disgraced energy trading company Enron.

And first there was Dolly, then there was, allegedly, baby Eve. As the clone conundrum drones on, who's right and who's wrong? We'll hear from the man who wanted to adopt baby Eve.

Stay with us.

(COMMERCIAL BREAK)

COSTELLO: 'Health Headlines' for you this morning.

Your chances of getting and dying from cancer are going down. A new report also says cancer survivors are living longer. And for the first time ever, fewer women are being diagnosed with lung cancer.

Another study shows fewer babies are dying in the United States and children are less likely to live in poverty. Plus, not as many kids are dropping out of school. Even so, that same report finds nearly one in six young Americans who are out of high school are unemployed.

And ladies, if you keep losing weight and gaining it back, you could be hurting your immune system. Research also shows maintaining your weight over time probably bolsters your ability to fend off viruses and leukemia cells, but scientists admit more research is needed.

And the world may be at odds over stem cell research, but top scientists from across the globe are staging a united front. They are asking the United Nations not to ban certain types of stem cell research.

CNN medical correspondent Elizabeth Cohen has more for you.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): Stem cell research has pitted Calista Flockhart and Harrison Ford against the pope, a Republican president against Nancy Reagan, and scientists from around the world against countries proposing a United Nations ban on certain types of stem cell research.

DR. GERALD FISCHBACH, COLUMBIA UNIVERSITY: I think a moratorium or a ban would cast a pall over stem cell research. But even more than, it would cast a pall over all of science.

COHEN: The debate inside and outside the U.N. has become more highly personal. Daniel Heumann was paralyzed in a car accident. He'll tell U.N. delegates why allowing this type of stem cell research to continue is so important to him.

DANIEL HEUMANN, STEM CELL RESEARCH ADVOCATE: Some day, that will help my dream come true to be back on my feet and be with my wife and my child as an able-bodied husband and father.

COHEN: Mrs. Reagan's husband suffers from Alzheimer's. She's lobbying President Bush to undo his decision to sharply limit federal funding for stem cell research.

NANCY REAGAN, FORMER FIRST LADY: There are so many diseases that can be cured or at least helped. We have lost so much time already and I just really can't bear to lose any more.

COHEN: But Bush and representatives of many predominantly Catholic countries point out that to do some kinds of stem cell research requires destroying an embryo.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Embryonic stem cell researches offer both great promise and great peril.

COHEN: They're microscopic and sitting unused by the thousands in fertility clinics, but for Bush and for the pope, the embryos are more than just a mass of frozen cells.

BUSH: He has sent a consistent word throughout the church and throughout society that we ought to take into account the preciousness of life.

COHEN: And there is another ethical debate. Scientists believe that the very best medical treatments would come from making an embryo that is genetically identical to the patient. But, technically, that involves cloning, the exact type of stem cell research the U.N. proposal would ban. Such a ban would have no legal weight, but it will have a heavy symbolic meaning for those who believe stem cell research could save lives and for those who believe it destroys life.

Elizabeth Cohen, CNN, reporting. (END VIDEOTAPE)

COSTELLO: And we're going to talk more about cloning and stem cell research in the next hour of DAYBREAK.

Right now we're going to talk about Katharine Hepburn. She died almost a year ago today.

MYERS: Yes.

COSTELLO: And some of her possessions are going on auction today.

MYERS: Now, I don't understand, her estate needs money or she's -- they're giving this money to charity? That's kind of a still thing.

COSTELLO: It does not indicate...

MYERS: It does not.

COSTELLO: ... where the money is going.

MYERS: But there are a thousand items that some of the things you know. You were reading about them. What are some of the things?

COSTELLO: It's kind of sad. Sotheby's is auctioning off...

MYERS: Yes.

COSTELLO: ... some of these things. Telegram exchanges with her lover Howard Hughes.

MYERS: Yes.

COSTELLO: More than 100 portraits and sketches by Katharine Hepburn who was actually an avid artist. A bronze bust that she sculpted of long-time love Spencer Tracy, which she carried all the time on her travels.

MYERS: Sure, yes, I've seen it.

COSTELLO: It's so sad.

And the cream colored crushed velvet gown she wore when she married Ludlow Ogden Smith back in 1928. She must have valued and pretty.

MYERS: Nothing from the "African Queen," though, huh?

COSTELLO: No.

MYERS: No.

COSTELLO: But there is a battery powered golf cart, which was a gift from director George Cukor. So Sotheby's auctioning off that stuff. And you can go online and find a catalog...

MYERS: Yes.

COSTELLO: ... and maybe bid on some stuff.

MYERS: Getting on -- getting on the catalog this week and bidding next week.

COSTELLO: You're going to bid on something?

MYERS: No.

COSTELLO: I was going to say, right.

MYERS: What!

COSTELLO: He's accused of leaking pertinent information. Now Ahmad Chalabi says he is ready to set the record straight. We'll tell you what his lawyers are offering. You stay tuned.

(COMMERCIAL BREAK)

COSTELLO: Accused of leaking classified information, now this Iraqi says he is willing and ready to come to Washington to respond to the allegations.

This is DAYBREAK for Thursday, June 3.

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Aired June 3, 2004 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Taking out insurgents in Kufa, the U.S. military goes on the offensive.
It is Thursday, June 3. This is DAYBREAK.

And good morning to you, welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

Here's what's happening right now.

Three Italian hostages have been taken captive in Iraq. They have been seen alive for the first time in more than a month. The Arab TV network Al Jazeera is showing the video you're looking at of the men. In the tape, one hostage says their captors are treating them -- quote -- "excellently."

Stone cold innocent that's how Scott Peterson's attorney describes his client. Opening statements in the murder trial are now over and the prosecution has called its first witness.

In money news, crude oil prices on a roller coaster ride. The price is down to $39.96 a barrel. That's down more than $2 from Tuesday's record high. Just the day before, the price zoomed up more than $2.

In sports, Smarty Jones is the odds-on favorite to win Saturday's Belmont Stakes and the first Triple Crown in 26 years. Odds makers make the undefeated horse the two-to-five favorite in the race.

In culture, Sotheby's in New York is auctioning off property from Katherine Hepburn's estate. A public exhibition begins today. The auction gets under way a week from today -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

In Iraq, a shift in the fighting, at least for today, as U.S. forces train their sights on Kufa in southern Iraq.

CNN's Guy Raz embedded with the 237th Armored Battalion. He joins us live via videophone this morning.

What's happening? GUY RAZ, CNN CORRESPONDENT: Carol, good morning.

The battle has now definitively shifted from Najaf to Kufa in southern Iraq. Kufa, of course, a neighboring town to Najaf.

Now earlier this morning, about a hundred U.S. troops, backed by tanks and armored vehicles, entered the heart of Kufa, right into the center, where they immediately clashed with insurgents, members of the Mehdi Militia. That militia, of course, loyal to the young radical Shiite cleric Muqtada al-Sadr.

Now the mission this morning was designed to eliminate a mortar team, an insurgent mortar team, that has shelled this forward operating base, where we're located, about a mile from Kufa. They have shelled this base 50 times in the last 24 hours. And we understand an estimated 30 insurgents were killed in the clashes this morning and 4 U.S. troops were wounded.

Now, Carol, senior military officers here tell us that they will continue to engage with the insurgents until this Mehdi Militia disarms and until its leader Muqtada al-Sadr turns himself in over to Iraqi police. Now U.S. forces also captured several rounds of rocket- propelled grenades, mortars and artillery.

Now over the past sort of 24 hours, in the past few days, insurgents have, in a sense, stepped up this fight. They have begun to launch 120 millimeter round mortars at this site. Now those are enormous weapons, something like mini missiles. They have a kill radius of about 30 meters, about 35 yards, Carol. And U.S. officials here say that until those mortars are out of the hands of these insurgents, they will continue to do battle -- Carol.

COSTELLO: We'll check back with you. Guy Raz reporting live from Kufa in southern Iraq this morning.

Want to talk about a letter that CNN received overnight via e- mail. It came from Baghdad.

Eli Flournoy is here to help me explain this.

It came from Baghdad from Ahmad Chalabi's lawyers, and it had some very interesting things in it.

ELI FLOURNOY, CNN SENIOR INTERNATIONAL EDITOR: Right. We've been talking about the whole situation Ahmad Chalabi. The allegations that he leaked to Iranian intelligence that the United States had broken the secret code of Iranian intelligence and has been monitoring Iranian transmissions.

COSTELLO: Which, in essence, would make him a spy for Iran?

FLOURNOY: That would. And it would -- it could seem as if maybe he is playing both sides. Ahmad Chalabi has been very close to the U.S. administration, yet also certainly close to the Iranians.

COSTELLO: So what does he say about those charges in his letter? FLOURNOY: Well in the letter he -- his lawyers have sent a letter to FBI Director Mueller and to the Justice -- to the Justice Department denying flatly that the -- that Chalabi did this leak.

COSTELLO: I believe the exact words he calls the charge stupid and false.

FLOURNOY: That's correct. That's correct. He's denied all the -- he's denied all the charges. And in fact, you know, including the detail that a drunk American told him -- a drunk American official told him that -- you know told him that they -- that they had broken the code.

COSTELLO: That they had broken the code. But polygraph tests are going on right now in the Pentagon to find out who that alleged drunken American was.

I want to show some of the quotes from the letter itself right now.

One quote, "Dr. Chalabi denies all the charges which have been anonymously leaked to the press." And he really kind of disses those anonymous sources and wanting to know who they are.

FLOURNOY: Right, exactly. I mean, just as you say, I mean there are -- there's an investigation going on in the Pentagon right now. Polygraph tests of Pentagon officials, who would have had access to this kind of information, which is a relatively small group of people that would have access to this top secret code information. It's just a remarkable story that's getting more interesting by the day.

COSTELLO: Yes, another quote from the letter, "Dr. Chalabi would never endanger the national security of the United States," because, of course, he said in the past that he is the America's best friend. And the letter continues, "Dr. Chalabi is willing and ready to come to Washington to be interviewed fully by law-enforcement agents on the subject and to answer all questions on this subject fully and without reservation." Of course the only problem with that is he could be arrested if he sets foot back on American soil.

FLOURNOY: Exactly. That's a big question that's out there is what is Chalabi's culpability himself if, in fact, he did go back to the United States, could he be arrested? Could he be -- could he be prosecuted? And what are the implications for any administration officials, Pentagon officials who may have been involved in this? This is the potential to be a huge problem.

COSTELLO: I'm sure the story will continue to grow over the coming days.

FLOURNOY: Absolutely.

COSTELLO: Eli, thanks very much.

The Army says it is stretched to the limit and thousands of soldiers cannot go home. If their units are getting ready to leave for Iraq or Afghanistan, they are going to have to lead them, even if they were about to retire or leave the service.

The new Iraqi prime minister is at work this morning and he has already proposed something that was not in the U.S. plans for Iraq. He wants a new Iraqi army made up of members of Saddam Hussein's old army.

Our senior Pentagon correspondent Jamie McIntyre has details on a tall order.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Many analysts believe it was a blunder for the U.S. not to try to keep the Iraqi army together after defeated on the battlefield. Now, more than a year later, Iraq's new prime minister says he would like to reconstitute as many as four army divisions using the same Iraqi soldiers. That wasn't in the original plan, but the American general just put in charge of training Iraqi security forces insists Iraq needs to make its own decisions.

LT. GEN. DAVID PETRAEUS, U.S. ARMY: Bringing back former elements of the Iraq army, I think, is a distinct possibility, if this is an option that they choose to follow.

MCINTYRE: General Petraeus has been given a tall order by his commander in chief: Train some 260,000 Iraqi soldiers, police and other security forces.

BUSH: We're stepping up our efforts to train effective Iraqi security forces that will eventually defend the liberty of their own country.

MCINTYRE: But even as President Bush was underscoring his goal, Congress was being told that the Pentagon's cumbersome acquisition rules have for months delayed weapons for the small number of Iraqi forces already trained.

GEN. PETER PACE, JOINT CHIEFS VICE CHAIRMAN: Their equipment right now is on order but not yet in theater.

MCINTYRE: And lack of equipment only partly explains the poor motivation of many Iraqi soldiers.

PETRAEUS: Understandably, Iraqis do not want to fight for a foreign power, no matter who that is. They want to fight for their own government.

MCINTYRE: Experts say success hinges on making sure the new army is loyal to the new government.

KENNETH POLLACK, BROOKINGS INSTITUTION: What they want to make sure is that Saddam's army is not reconstituted, but that doesn't mean that Saddam's soldiers can't be brought back to the colors, retrained, re-equipped, taught how to function as an army in a democratic society and contribute to a real security problem that Iraq has right now. MCINTYRE (on camera): While the Iraqi army under Saddam Hussein was a force for oppression, most foot soldiers had little choice but to follow orders. Putting those men back in uniform now will help Iraq with two of its more desperate needs: security and jobs.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COSTELLO: And a programming note for you, Adnan Pachachi, the man the United States wanted as Iraq's interim president, will be on "AMERICAN MORNING" this morning. You can see that less than 90 minutes from now at 7:00 a.m. Eastern.

Some stories from 'Across America' this Thursday.

In Tampa, Florida, arraignment for a woman facing a felony charge for leaving the scene of an accident. Two brothers, 13 and 3, were killed. Jennifer Porter, who acknowledged being involved in the March 31 accident, has pleaded not guilty. Her lawyer says Porter was too scared to stop.

In Los Angeles, charges against a 17-year-old boy are going to be hard to figure out. Police say the teenaged runaway stole this tanker truck and wrecked it, but not before leading police on an erratic chase that included at least eight collisions. And here is the truck the boy stole. The boy is hospitalized with many injuries, including broken arms and legs.

In Arizona, efforts to control the U.S.-Mexican border are sputtering. Homeland Security Undersecretary Asa Hutchinson said that by this week, border security should have been increased by 260 agents and 4 helicopters. He says so far only 110 agents have been added.

In the next hour of DAYBREAK, they are talking oil and gas in Beirut this morning, but will it make or break already high prices at the pump? We'll get some expert insight.

And Tiananmen Square, even after 15 years, old wounds never seem to heal. We're going to take you live to Beijing.

This is DAYBREAK for Thursday.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 5:44 Eastern. Here is what's all new this morning.

U.S. forces go after insurgents in the Iraqi city of Kufa. Troops backed by tanks take out insurgents who were firing mortars at forward operating base. Thirty insurgents were killed in this firefight.

Britain's air traffic control system back up and running, but a nearly hour-long shutdown earlier today caused some big time delays. The Airport Authority is trying to figure out what caused the computer glitch.

In money news, several U.S. airlines are in financial trouble again, and a House committee holds hearings today on airline finances. Among the witnesses, CEOs of Continental, Northwest, AirTran, America West, Frontier and United.

In sports, Kurt Warner's agent has been talking to the New York Giants, but there is no announcement yet. Warner is the quarterback who led the Rams to the Super Bowl twice, but St. Louis released him on Tuesday.

In culture, it may be the first of its kind, an ad by the Philadelphia Tourism Agency appealing to gay people to visit the city. Closing line, get your history straight and your nightlife gay -- Chad.

MYERS: Good morning, Carol.

(WEATHER REPORT)

MYERS: Back to you.

COSTELLO: Thank you, Chad.

Those are the latest headlines for you.

You won't find it in China's history books and any remnants of what happened 15 years ago today have long been removed. But on the eve of its anniversary, the images from the Tiananmen Square massacre will never go away.

CNN's Jaime FlorCruz joins us live now from Beijing.

So what's the mood leading up to the anniversary?

JAIME FLORCRUZ, CNN CORRESPONDENT: Carol, it seems like it's just an ordinary day here, June 3, in Beijing, and most people don't expect any public commemoration of Tiananmen today or tomorrow. And that's because most Chinese, especially the youth, know very little about Tiananmen '89. Most Chinese, in fact, care very little about politics in general and Tiananmen in particular. That's because they bought in the official line that economic development and social stability are more important than pursuing democracy.

So instead of pursuing politics, they are more interested in -- they are more preoccupied in pursuing wealth and personal goals and careers. And although there are indeed still some fibrins (ph), young and old, who are still wanting to commemorate June 4 tomorrow, but most of them have been either taken away or detained or on house arrest and therefore cannot do anything, any commemorative activities that they may have planned -- Carol.

COSTELLO: And just looking at those images a short time ago, it gave me chills, just like it did back in 1989. Have there been any democratic reform since then? FLORCRUZ: Not really, Carol. Most of the political reform that the current government is pursuing are more a militate (ph) incremental changes in the political system in terms of transparency, allowing a little bit more freedom. But the political reform or democratic reforms that 16 years ago the protestors in Tiananmen had advocated are still on the -- on the -- are still just blueprints. The issues that they raised at that time, corruption, lack of transparency, they still resonate even now -- Carol.

COSTELLO: What about some of the young people who took part in this demonstration, what's happened to them?

FLORCRUZ: Well most of the leaders who took part in the demonstration have either fled overseas or have buckled in or have been kind of sucked in the system. Many have taken up jobs in the academic community or are pursuing wealth in their own way. Those fibrins who are still pushing the limit have either been jailed or are marginalized. And they are the ones who we could still hear but their voices are so faint, drowned in this excitement and euphoria of China's booming economy -- Carol.

COSTELLO: Jaime FlorCruz, many thanks, live from Beijing, China this morning.

In the next hour of DAYBREAK, newly released audio tapes reveal new lows for disgraced energy trading company Enron.

And first there was Dolly, then there was, allegedly, baby Eve. As the clone conundrum drones on, who's right and who's wrong? We'll hear from the man who wanted to adopt baby Eve.

Stay with us.

(COMMERCIAL BREAK)

COSTELLO: 'Health Headlines' for you this morning.

Your chances of getting and dying from cancer are going down. A new report also says cancer survivors are living longer. And for the first time ever, fewer women are being diagnosed with lung cancer.

Another study shows fewer babies are dying in the United States and children are less likely to live in poverty. Plus, not as many kids are dropping out of school. Even so, that same report finds nearly one in six young Americans who are out of high school are unemployed.

And ladies, if you keep losing weight and gaining it back, you could be hurting your immune system. Research also shows maintaining your weight over time probably bolsters your ability to fend off viruses and leukemia cells, but scientists admit more research is needed.

And the world may be at odds over stem cell research, but top scientists from across the globe are staging a united front. They are asking the United Nations not to ban certain types of stem cell research.

CNN medical correspondent Elizabeth Cohen has more for you.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): Stem cell research has pitted Calista Flockhart and Harrison Ford against the pope, a Republican president against Nancy Reagan, and scientists from around the world against countries proposing a United Nations ban on certain types of stem cell research.

DR. GERALD FISCHBACH, COLUMBIA UNIVERSITY: I think a moratorium or a ban would cast a pall over stem cell research. But even more than, it would cast a pall over all of science.

COHEN: The debate inside and outside the U.N. has become more highly personal. Daniel Heumann was paralyzed in a car accident. He'll tell U.N. delegates why allowing this type of stem cell research to continue is so important to him.

DANIEL HEUMANN, STEM CELL RESEARCH ADVOCATE: Some day, that will help my dream come true to be back on my feet and be with my wife and my child as an able-bodied husband and father.

COHEN: Mrs. Reagan's husband suffers from Alzheimer's. She's lobbying President Bush to undo his decision to sharply limit federal funding for stem cell research.

NANCY REAGAN, FORMER FIRST LADY: There are so many diseases that can be cured or at least helped. We have lost so much time already and I just really can't bear to lose any more.

COHEN: But Bush and representatives of many predominantly Catholic countries point out that to do some kinds of stem cell research requires destroying an embryo.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Embryonic stem cell researches offer both great promise and great peril.

COHEN: They're microscopic and sitting unused by the thousands in fertility clinics, but for Bush and for the pope, the embryos are more than just a mass of frozen cells.

BUSH: He has sent a consistent word throughout the church and throughout society that we ought to take into account the preciousness of life.

COHEN: And there is another ethical debate. Scientists believe that the very best medical treatments would come from making an embryo that is genetically identical to the patient. But, technically, that involves cloning, the exact type of stem cell research the U.N. proposal would ban. Such a ban would have no legal weight, but it will have a heavy symbolic meaning for those who believe stem cell research could save lives and for those who believe it destroys life.

Elizabeth Cohen, CNN, reporting. (END VIDEOTAPE)

COSTELLO: And we're going to talk more about cloning and stem cell research in the next hour of DAYBREAK.

Right now we're going to talk about Katharine Hepburn. She died almost a year ago today.

MYERS: Yes.

COSTELLO: And some of her possessions are going on auction today.

MYERS: Now, I don't understand, her estate needs money or she's -- they're giving this money to charity? That's kind of a still thing.

COSTELLO: It does not indicate...

MYERS: It does not.

COSTELLO: ... where the money is going.

MYERS: But there are a thousand items that some of the things you know. You were reading about them. What are some of the things?

COSTELLO: It's kind of sad. Sotheby's is auctioning off...

MYERS: Yes.

COSTELLO: ... some of these things. Telegram exchanges with her lover Howard Hughes.

MYERS: Yes.

COSTELLO: More than 100 portraits and sketches by Katharine Hepburn who was actually an avid artist. A bronze bust that she sculpted of long-time love Spencer Tracy, which she carried all the time on her travels.

MYERS: Sure, yes, I've seen it.

COSTELLO: It's so sad.

And the cream colored crushed velvet gown she wore when she married Ludlow Ogden Smith back in 1928. She must have valued and pretty.

MYERS: Nothing from the "African Queen," though, huh?

COSTELLO: No.

MYERS: No.

COSTELLO: But there is a battery powered golf cart, which was a gift from director George Cukor. So Sotheby's auctioning off that stuff. And you can go online and find a catalog...

MYERS: Yes.

COSTELLO: ... and maybe bid on some stuff.

MYERS: Getting on -- getting on the catalog this week and bidding next week.

COSTELLO: You're going to bid on something?

MYERS: No.

COSTELLO: I was going to say, right.

MYERS: What!

COSTELLO: He's accused of leaking pertinent information. Now Ahmad Chalabi says he is ready to set the record straight. We'll tell you what his lawyers are offering. You stay tuned.

(COMMERCIAL BREAK)

COSTELLO: Accused of leaking classified information, now this Iraqi says he is willing and ready to come to Washington to respond to the allegations.

This is DAYBREAK for Thursday, June 3.

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