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Three Men Accused of Aiding Hamas; Updates on the Najaf Standoff; Fall Movies

Aired August 20, 2004 - 10:30   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.


DARYN KAGAN, CNN ANCHOR: We've been listening in to Attorney General John Ashcroft making the announcement of the arrests of a number of men. An investigation that sounds like it spans a number of states and goes into Israel, trying to prevent what the Attorney General says was potential terrorist acts.
Let's bring in our Homeland Security correspondent Jeanne Meserve, who's listening in with us from Washington, D.C. Good morning, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Daryn, in -- this obviously spans a number of years. This indictment goes back to 1988 and covers activities up through 1993.

Two men, as you heard the attorney general say, in custody; a third named in the indictment -- all of them for providing material support to terrorists. One of the men, this man Marzook -- Mousa Mohammed Abu Marzook, is described in the indictment as the deputy chief of the Hamas Political Bureau.

He is believed to be in Syria. Hamas, of course, has been designated by the United States as a terrorist organization and has claimed credit in the past for certain actions in Israel and the West Bank -- according to the attorney general, actions which claimed the lives both of Israeli citizens and also of some Americans.

The other two gentlemen who were named, one of them in -- is in Chicago. One of them in the northern Virginia/suburban Washington, D.C. area. According to the indictment, Marzook was involved in financing the activities of Hamas during his years in the United States, 1988 to 1993. He did this in part through bank accounts controlled by these other two men who were named in the indictment.

You heard the attorney general saying that Salah, one of the individuals -- the name is Mohammed Hamid Khalil Salah -- had traveled to recruit and train new members of Hamas and then provided them with the money. According to the attorney general, some of this money used to buy weapons, which were later used in terrorist attacks.

He accused them of substantial roles in financing and supporting international terrorism, saying that the U.S. does not draw any distinction between those who carry out acts of terrorism and those who finance and support it in other ways.

This, of course, just one of many investigations that the United States has ongoing relating to terrorist financing. Clearly, they're looking not just at al Qaeda, but at other groups that have been designated as terrorist organizations by the United States.

Daryn, back to you.

KAGAN: Jeanne Meserve, listening in with us to John Ashcroft's latest news conference from Washington, D.C. Jeanne, thank you.

And we're going to take a break. We're back, right after this.

(COMMERCIAL BREAK)

KAGAN: Let's check what's happening right now in the news. Hoping for the release of a journalist held hostage in Iraq. An aide to cleric Muqtada al-Sadr tells CNN he's been given assurances by kidnappers that French-American reporter Micah Garen will be freed, possibly today.

Garen was kidnapped one week ago in Nasiriyah. He was working on a documentary on Iraqi archaeological sites and antiquities that are endangered by the fighting. In the statement that aired a short time ago on Al-Jazeera television, Garen said he was being treated well.

Crude oil prices keep spiraling higher. Overnight futures for U.S. oil came within a dollar of the $50 mark. A closer look at impact of rising crude prices on the economy is just ahead.

And in Moss Bluff, Texas, witnesses say the fireball could be seen 20 miles away when a second explosion rocked an already burning underground gas storage facility this morning. More than 100 area residents had been evacuated. Firefighters say the gas-fueled flames could burn for days.

Keeping you informed, CNN, the most trusted name in news.

There have been significant developments today in Iraq: with the standoff, with Muqtada al-Sadr, and the Imam Ali Mosque in Najaf. Let's go to our John Vause, who's standing by in Baghdad for the latest -- John?

JOHN VAUSE, CNN CORRESPONDENT: Hello, Daryn.

We're now hearing from the U.S. Military that intelligence reports on the ground suggests that what the Interior Ministry has been saying all along, that this standoff is over, has not happened.

The U.S. Military telling CNN's Matthew Chance that there was, in fact, a cease-fire for three hours in observance of Friday prayers. There is some speculation amongst the U.S. Military that perhaps Iraqi police and National Guardsmen entered the Imam Ali Mosque during this cease-fire while the prayers were underway.

We have just also heard from a senior aide to Muqtada al-Sadr, Sheik Raibani (ph), saying that none of this has transpired. That this -- nothing has happened at the mosque. That so far they have not handed the keys over to the senior Shiite leaders. Now, that was one of the proposals put forward, that Muqtada al-Sadr and his Mehdi Militia would hand authority or the keys of the Imam Ali Mosque to the senior religious figures in Najaf.

What they are saying is that they do have an agreement on the ground between Muqtada al-Sadr and the Grand Ayatollah al-Sistani. But the process of handing authority over to the senior religious figures has not happened.

Now when it does happen, we're told that the Old City, all of it, will be closed down, and only reopened at the say-so of Sistani.

Now, the Muqtada spokesperson is saying that they are yet to receive a delegation from the Sistani people. They have not met with them yet. They are expecting them. And also from our CNN producer, Kianne Sadeq, who is in Najaf, she is saying that it appears from her position that nothing has changed.

There's no evidence on the ground to suggest that the Mehdi Militia has left. There's no evidence on the ground to suggest that Iraqi police and Iraqi National Guardsmen now actually control the Imam Ali Mosque.

It is very confusing, Daryn. No one really knows exactly what's going on.

KAGAN: Which leads to my question, how do you come to an agreement with a man that nobody even knows where he is?

VAUSE: That's a very good question. Well, he could still very well be inside the Imam Ali Mosque. But what we are hearing from the interior ministry here in Baghdad, they're saying that their forces went in, they found just a few hundred members of the Mehdi Militia there. They are lightly armed. And there was no sign in the mosque of Muqtada al-Sadr.

But no one knows, as you say, Daryn, no one knows for sure exactly where Muqtada al-Sadr is. He's not been seen for many, many days now. And according to the interior ministry, they just don't know where he is.

KAGAN: All right. The story continues to develop, from within Iraq.

John Vause, thank you for that.

Now we move on to a different type of battleground, the battle for the White House. Offices here are calling for a truce in the campaign war waged by independent political groups. But officials are stopping short of condemning one ad that is anti-John Kerry.

Our Elaine Quijano is at the White House with that.

Elaine, good morning.

ELAINE QUIJANO, CNN CORRESPONDENT: Good morning, Daryn.

President Bush is staying out of the fray. He continues to spend time at his ranch in Crawford, Texas, where aides say he will be spending part of the time working on his speech ahead of the Republican National Convention.

Now the last time we saw President Bush a couple of days ago in a campaign stop in St. Paul, Minnesota.

But yesterday, White House officials were out responding to an accusation by Senator John Kerry that the president was allowing front groups to, quote, "do his dirty work" in attacking Kerry. Now the senator was referring to the anti-Kerry Swift Boat Veterans. Both the Bush campaign and the president's spokesman, Scott McClellan, were quick to deny that accusation.

They insist Mr. Bush has never and will never question Kerry's military service in Vietnam. McClellan also says the president has been on the receiving end of $62 millions in attacks ads, and he repeated a call to Senator Kerry to denounce them.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECY.: Senator Kerry knows that his latest attack is false and baseless. The president has condemned all of the ads by the shadowy groups. We have called on Senator Kerry to join us in calling for an end to all the unregulated soft money activity that is going on in this campaign.

And the president has stayed focused on the issues and the choices that the voters face. That's what this ought to be about. There is some clear choices that the voters face for the future. This should not be about the past.

(END VIDEO CLIP)

QUIJANO: And as he's done before, McClellan stopped short of condemning the particular ad by the Swift Boat Veterans, but with a second spot from the group, making its debut, Daryn, this certainly -- the debate and the discussion could linger -- Daryn.

KAGAN: All right, Elaine Quijano at the White House, thank you for that.

Larry Thurlow, meanwhile, maintains that John Kerry was not under fire when he rescued an officer in the March 1969 incident in Vietnam. Thurlow is a member of Swift Boat Veterans for Truth, and told our Candy Crowley the group is independent of the Bush campaign.

(BEGIN VIDEO CLIP)

CANDY CROWLEY, CNN CORRESPONDENT: Are you in contact with any arm of the Republican National Committee, with the Bush White House? As you know, Senator Kerry said today that you're doing George Bush's dirty work for him. Have you had any contact with any Republican entity?

LARRY THURLOW, SWIFT BOAT VETERANS FOR TRUTH: I've had absolutely no contact with any of them, nor do I plan to, nor can they not tell me to not take part in the swift boat group's campaign.

(END VIDEO CLIP)

KAGAN: Thurlow alleges that Kerry wrote the report that led to his receiving the bronze star.

What was once unthinkable is now approaching reality: crude oil at $50 a barrel. If it goes that high, or higher, some economists say it could grease the skids toward global recession.

Fred Katayama of CNN Financial News has that story.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): As gas prices remain sky-high, consumers tighten their wallets in the U.S., and in Japan, the world's second-largest economy, businesses crimped spending last quarter.

Economists Stephen Roach predicts a 40 percent chance the global economy will slide into a recession next year.

STEPHEN ROACH, MORGAN STANLEY: It's not just that the oil price rises and therefore the economy rolls over, it's that higher oil prices, if they hit a strong economy, they will not hurt that much. If they hit a vulnerable economy, they will hurt a lot. And the U.S. right now, I think it's at its maximum state of vulnerability.

KATAYAMA: Vulnerable because of sluggish job and wage growth and the U.S. budget and trade deficits. And Europe's and Asia's economies are at risk because of heavy reliance on exports. What's more, the price of crude oil has spurted from $33 to $47 this year. And historically, an energy price spike has preceded just about every global recession, but most other economists say not this time.

The Federal Reserve is raising interest rates, because the U.S. economy has been growing too fast, and China is trying to tame its overheated economy.

PROF. JAMES HAMILTON, UNIV. OF CALIF, SAN DIEGO: We're producing significantly more oil than we did a year ago. The issue is not so much a shortfall of supply as it is strong global demand. But overall, strong demand represents a strong world economy. And that's good economic news, not bad.

KATAYAMA: And oil prices, while high, are still about 40 percent below the inflation adjusted record peak of nearly $80 a barrel in 1980.

Any disruption of supply, such as an attack on oil fields, could send prices sharply higher. Most economists agree the $50 a barrel level is key. Unless oil climbs above $50 and stays there for months, the world economy may be able to skirt a recession this time.

Fred Katayama, CNN Financial News, New York.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DUSTIN HOFFMAN, ACTOR: What?

BARBRA STREISAND, ACTRESS: Get the photo album.

HOFFMAN: His very first bath.

BEN STILLER, ACTOR: What are you -- what is that?

STREISAND: That's Greg getting circumcised.

BLYTHE DANNER, ACTRESS: Don't tell me you kept his umbilical cord, too?

STREISAND: Of course not. That's Greg's...

STILLER: All right, you know what? That's it, that's it, that's enough.

(END VIDEO CLIP)

KAGAN: It's Friday; we needed to laugh. We're taking a look at the sequel to the comedy "Meet the Parents." This is an all-star cast, as you can see. It's -- just saying the title puts you about as close to the FCC violations as you can say without stepping over the line.

One of many new films to hit theaters in the coming weeks and months. Here to give us a rundown of what you're going to want to watch for, Dave Karger, senior writer for "Entertainment Weekly."

Good morning.

DAVE KARGER, SR. WRITER, "ENTERTAINMENT WEEKLY": Good morning to you.

KAGAN: OK, I'm going to try here -- "Meet the Fockers."

KARGER: Very good.

KAGAN: F-o-c-k-e-r-s.

KARGER: No bleeping needed when you say it like that.

KAGAN: No.

That was Barbra Streisand.

KARGER: Yes, they had a tough time trying to convince her to do this movie. Of course, as you said, it is the sequel to "Meet the Parents," which was number one for a month back in 200 -- a huge hit. And now, "Meet the Fockers," where the -- all the parents meet each other.

So, we find out that Ben Stiller's parents are Dustin Hoffman and Barbra Streisand. And Barbra Streisand plays a sex therapist. And remember how uptight Robert De Niro's character right was in the first film, you can just imagine all the fun they're going to have.

KAGAN: We can only hope it's as funny as it sounds.

KARGER: Yes, and they are -- the house is called Focker Isle. So, in Florida, apparently they all congregate at Focker Isle. So, they're going to have a lot of fun with that last name, as you can imagine.

KAGAN: "Polar Express," Tom Hanks -- this sounds like you might need a hanky to go see the Tom Hanks movie.

KARGER: Yes, this is one of the most expensive movies of the fall. And if you look at the technology they're using, it's a technology called performance capture. This is based on a 1985 children's book, and it's CGI -- Computer Generated, you know, animation...

KAGAN: Kind of looks like "Toy Story" a little bit.

KARGER: What's incredible is that the actors actually performed these roles on a sound stage -- you know, with all these dots on their heads?

KAGAN: Right.

KARGER: And then, the computers captured it and then did the animation based on the performances. And that's why the body movements are supposed to be just like Tom Hanks. And Tom Hanks actually plays five different characters in this film, including Santa Claus.

KAGAN: Including Santa Claus, but no challenge there.

And then "Aviator," Howard Hughes -- the story of Howard Hughes -- and Leo DiCaprio.

KARGER: Yes.

KAGAN: You said there's early Oscar buzz on this movie.

KARGER: There is. Well, it's directed by Martin Scorsese. So, anytime he makes a film...

KAGAN: "Gangs of New York," his last big movie.

KARGER: Yes, was nominated for Best Picture, although it didn't win any Oscars. He has never won for Best Director, Martin Scorsese. This could be it. Leonardo DiCaprio as Howard Hughes is supposed to be terrific. And it follows 20 years in his life when he was really becoming an aviation pioneer and also dating a lot of movie stars. So, you have Cate Blanchett playing Katharine Hepburn and you have Kate Beckinsale playing Ava Gardner and Jude Law playing Errol Flynn. So, all of these stars of today playing the stars of yesterday. It's going to be really fascinating.

KAGAN: Good. I'm ready for the fall movies, because the summer -- summer 2004, you know, just...

KARGER: Too many sequels, too many superheroes if you ask me.

KAGAN: Yes, and I just did. But thank you. Dave Karger, "Entertainment Weekly," thank you for stopping by. Appreciate it. Have a great weekend.

KARGER: You, too.

KAGAN: You can keep your eye on entertainment, your favorite stars and get the lowdown on the upcoming movies 24/7. Just point your Internet browser to cnn.com/entertainment.

We're back after this.

(COMMERCIAL BREAK)

KAGAN: Let's check in on weather. Orelon Sidney handling that for us.

(WEATHER REPORT)

KAGAN: All right, Orelon, thank you so much.

The City of New York is extending an olive branch to protesters at the Republican National Convention. We'll tell you what the mayor is doing to make them feel welcome.

Plus, find out how a blind woman's teeth helped her regain her sight. That fascinating story is coming up in our "Daily Dose," as the second hour of CNN LIVE TODAY begins right now.

And let's take a look at what is happening now in the news. The U.S. Military officials deny that Iraqi police have taken control of a holy shrine in Najaf. An Iraqi interior minister spokesman said earlier that police had entered the Imam Ali Mosque. Members of the Mehdi Army have been holed up there. A live report from Iraq is just ahead.

An aide to Muqtada al-Sadr says that captured journalist Micah Garen will be released today or tomorrow. The Arab-language network Al-Jazeera today aired a videotape of Garen reading a statement. He says that his captors want the American people to end the bloodshed in Najaf and that he is being treated well.

Attorney General John Ashcroft says two men are in custody in an alleged terrorism financing scheme. He made the announcement in a news conference last hour. A third person is still at large overseas. The men are accused in a scheme to provide hundreds of thousands of dollars to the group Hamas. Details ahead in a live report.

Soaring oil prices could mean more pain at the pump. Crude oil is hitting fresh all-time highs -- now hovering close to $50 a barrel. We'll have a live report at the bottom of the hour on the rise in prices.

Keeping you informed, CNN is the most trusted name in news.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired August 20, 2004 - 10:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We've been listening in to Attorney General John Ashcroft making the announcement of the arrests of a number of men. An investigation that sounds like it spans a number of states and goes into Israel, trying to prevent what the Attorney General says was potential terrorist acts.
Let's bring in our Homeland Security correspondent Jeanne Meserve, who's listening in with us from Washington, D.C. Good morning, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Daryn, in -- this obviously spans a number of years. This indictment goes back to 1988 and covers activities up through 1993.

Two men, as you heard the attorney general say, in custody; a third named in the indictment -- all of them for providing material support to terrorists. One of the men, this man Marzook -- Mousa Mohammed Abu Marzook, is described in the indictment as the deputy chief of the Hamas Political Bureau.

He is believed to be in Syria. Hamas, of course, has been designated by the United States as a terrorist organization and has claimed credit in the past for certain actions in Israel and the West Bank -- according to the attorney general, actions which claimed the lives both of Israeli citizens and also of some Americans.

The other two gentlemen who were named, one of them in -- is in Chicago. One of them in the northern Virginia/suburban Washington, D.C. area. According to the indictment, Marzook was involved in financing the activities of Hamas during his years in the United States, 1988 to 1993. He did this in part through bank accounts controlled by these other two men who were named in the indictment.

You heard the attorney general saying that Salah, one of the individuals -- the name is Mohammed Hamid Khalil Salah -- had traveled to recruit and train new members of Hamas and then provided them with the money. According to the attorney general, some of this money used to buy weapons, which were later used in terrorist attacks.

He accused them of substantial roles in financing and supporting international terrorism, saying that the U.S. does not draw any distinction between those who carry out acts of terrorism and those who finance and support it in other ways.

This, of course, just one of many investigations that the United States has ongoing relating to terrorist financing. Clearly, they're looking not just at al Qaeda, but at other groups that have been designated as terrorist organizations by the United States.

Daryn, back to you.

KAGAN: Jeanne Meserve, listening in with us to John Ashcroft's latest news conference from Washington, D.C. Jeanne, thank you.

And we're going to take a break. We're back, right after this.

(COMMERCIAL BREAK)

KAGAN: Let's check what's happening right now in the news. Hoping for the release of a journalist held hostage in Iraq. An aide to cleric Muqtada al-Sadr tells CNN he's been given assurances by kidnappers that French-American reporter Micah Garen will be freed, possibly today.

Garen was kidnapped one week ago in Nasiriyah. He was working on a documentary on Iraqi archaeological sites and antiquities that are endangered by the fighting. In the statement that aired a short time ago on Al-Jazeera television, Garen said he was being treated well.

Crude oil prices keep spiraling higher. Overnight futures for U.S. oil came within a dollar of the $50 mark. A closer look at impact of rising crude prices on the economy is just ahead.

And in Moss Bluff, Texas, witnesses say the fireball could be seen 20 miles away when a second explosion rocked an already burning underground gas storage facility this morning. More than 100 area residents had been evacuated. Firefighters say the gas-fueled flames could burn for days.

Keeping you informed, CNN, the most trusted name in news.

There have been significant developments today in Iraq: with the standoff, with Muqtada al-Sadr, and the Imam Ali Mosque in Najaf. Let's go to our John Vause, who's standing by in Baghdad for the latest -- John?

JOHN VAUSE, CNN CORRESPONDENT: Hello, Daryn.

We're now hearing from the U.S. Military that intelligence reports on the ground suggests that what the Interior Ministry has been saying all along, that this standoff is over, has not happened.

The U.S. Military telling CNN's Matthew Chance that there was, in fact, a cease-fire for three hours in observance of Friday prayers. There is some speculation amongst the U.S. Military that perhaps Iraqi police and National Guardsmen entered the Imam Ali Mosque during this cease-fire while the prayers were underway.

We have just also heard from a senior aide to Muqtada al-Sadr, Sheik Raibani (ph), saying that none of this has transpired. That this -- nothing has happened at the mosque. That so far they have not handed the keys over to the senior Shiite leaders. Now, that was one of the proposals put forward, that Muqtada al-Sadr and his Mehdi Militia would hand authority or the keys of the Imam Ali Mosque to the senior religious figures in Najaf.

What they are saying is that they do have an agreement on the ground between Muqtada al-Sadr and the Grand Ayatollah al-Sistani. But the process of handing authority over to the senior religious figures has not happened.

Now when it does happen, we're told that the Old City, all of it, will be closed down, and only reopened at the say-so of Sistani.

Now, the Muqtada spokesperson is saying that they are yet to receive a delegation from the Sistani people. They have not met with them yet. They are expecting them. And also from our CNN producer, Kianne Sadeq, who is in Najaf, she is saying that it appears from her position that nothing has changed.

There's no evidence on the ground to suggest that the Mehdi Militia has left. There's no evidence on the ground to suggest that Iraqi police and Iraqi National Guardsmen now actually control the Imam Ali Mosque.

It is very confusing, Daryn. No one really knows exactly what's going on.

KAGAN: Which leads to my question, how do you come to an agreement with a man that nobody even knows where he is?

VAUSE: That's a very good question. Well, he could still very well be inside the Imam Ali Mosque. But what we are hearing from the interior ministry here in Baghdad, they're saying that their forces went in, they found just a few hundred members of the Mehdi Militia there. They are lightly armed. And there was no sign in the mosque of Muqtada al-Sadr.

But no one knows, as you say, Daryn, no one knows for sure exactly where Muqtada al-Sadr is. He's not been seen for many, many days now. And according to the interior ministry, they just don't know where he is.

KAGAN: All right. The story continues to develop, from within Iraq.

John Vause, thank you for that.

Now we move on to a different type of battleground, the battle for the White House. Offices here are calling for a truce in the campaign war waged by independent political groups. But officials are stopping short of condemning one ad that is anti-John Kerry.

Our Elaine Quijano is at the White House with that.

Elaine, good morning.

ELAINE QUIJANO, CNN CORRESPONDENT: Good morning, Daryn.

President Bush is staying out of the fray. He continues to spend time at his ranch in Crawford, Texas, where aides say he will be spending part of the time working on his speech ahead of the Republican National Convention.

Now the last time we saw President Bush a couple of days ago in a campaign stop in St. Paul, Minnesota.

But yesterday, White House officials were out responding to an accusation by Senator John Kerry that the president was allowing front groups to, quote, "do his dirty work" in attacking Kerry. Now the senator was referring to the anti-Kerry Swift Boat Veterans. Both the Bush campaign and the president's spokesman, Scott McClellan, were quick to deny that accusation.

They insist Mr. Bush has never and will never question Kerry's military service in Vietnam. McClellan also says the president has been on the receiving end of $62 millions in attacks ads, and he repeated a call to Senator Kerry to denounce them.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECY.: Senator Kerry knows that his latest attack is false and baseless. The president has condemned all of the ads by the shadowy groups. We have called on Senator Kerry to join us in calling for an end to all the unregulated soft money activity that is going on in this campaign.

And the president has stayed focused on the issues and the choices that the voters face. That's what this ought to be about. There is some clear choices that the voters face for the future. This should not be about the past.

(END VIDEO CLIP)

QUIJANO: And as he's done before, McClellan stopped short of condemning the particular ad by the Swift Boat Veterans, but with a second spot from the group, making its debut, Daryn, this certainly -- the debate and the discussion could linger -- Daryn.

KAGAN: All right, Elaine Quijano at the White House, thank you for that.

Larry Thurlow, meanwhile, maintains that John Kerry was not under fire when he rescued an officer in the March 1969 incident in Vietnam. Thurlow is a member of Swift Boat Veterans for Truth, and told our Candy Crowley the group is independent of the Bush campaign.

(BEGIN VIDEO CLIP)

CANDY CROWLEY, CNN CORRESPONDENT: Are you in contact with any arm of the Republican National Committee, with the Bush White House? As you know, Senator Kerry said today that you're doing George Bush's dirty work for him. Have you had any contact with any Republican entity?

LARRY THURLOW, SWIFT BOAT VETERANS FOR TRUTH: I've had absolutely no contact with any of them, nor do I plan to, nor can they not tell me to not take part in the swift boat group's campaign.

(END VIDEO CLIP)

KAGAN: Thurlow alleges that Kerry wrote the report that led to his receiving the bronze star.

What was once unthinkable is now approaching reality: crude oil at $50 a barrel. If it goes that high, or higher, some economists say it could grease the skids toward global recession.

Fred Katayama of CNN Financial News has that story.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): As gas prices remain sky-high, consumers tighten their wallets in the U.S., and in Japan, the world's second-largest economy, businesses crimped spending last quarter.

Economists Stephen Roach predicts a 40 percent chance the global economy will slide into a recession next year.

STEPHEN ROACH, MORGAN STANLEY: It's not just that the oil price rises and therefore the economy rolls over, it's that higher oil prices, if they hit a strong economy, they will not hurt that much. If they hit a vulnerable economy, they will hurt a lot. And the U.S. right now, I think it's at its maximum state of vulnerability.

KATAYAMA: Vulnerable because of sluggish job and wage growth and the U.S. budget and trade deficits. And Europe's and Asia's economies are at risk because of heavy reliance on exports. What's more, the price of crude oil has spurted from $33 to $47 this year. And historically, an energy price spike has preceded just about every global recession, but most other economists say not this time.

The Federal Reserve is raising interest rates, because the U.S. economy has been growing too fast, and China is trying to tame its overheated economy.

PROF. JAMES HAMILTON, UNIV. OF CALIF, SAN DIEGO: We're producing significantly more oil than we did a year ago. The issue is not so much a shortfall of supply as it is strong global demand. But overall, strong demand represents a strong world economy. And that's good economic news, not bad.

KATAYAMA: And oil prices, while high, are still about 40 percent below the inflation adjusted record peak of nearly $80 a barrel in 1980.

Any disruption of supply, such as an attack on oil fields, could send prices sharply higher. Most economists agree the $50 a barrel level is key. Unless oil climbs above $50 and stays there for months, the world economy may be able to skirt a recession this time.

Fred Katayama, CNN Financial News, New York.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DUSTIN HOFFMAN, ACTOR: What?

BARBRA STREISAND, ACTRESS: Get the photo album.

HOFFMAN: His very first bath.

BEN STILLER, ACTOR: What are you -- what is that?

STREISAND: That's Greg getting circumcised.

BLYTHE DANNER, ACTRESS: Don't tell me you kept his umbilical cord, too?

STREISAND: Of course not. That's Greg's...

STILLER: All right, you know what? That's it, that's it, that's enough.

(END VIDEO CLIP)

KAGAN: It's Friday; we needed to laugh. We're taking a look at the sequel to the comedy "Meet the Parents." This is an all-star cast, as you can see. It's -- just saying the title puts you about as close to the FCC violations as you can say without stepping over the line.

One of many new films to hit theaters in the coming weeks and months. Here to give us a rundown of what you're going to want to watch for, Dave Karger, senior writer for "Entertainment Weekly."

Good morning.

DAVE KARGER, SR. WRITER, "ENTERTAINMENT WEEKLY": Good morning to you.

KAGAN: OK, I'm going to try here -- "Meet the Fockers."

KARGER: Very good.

KAGAN: F-o-c-k-e-r-s.

KARGER: No bleeping needed when you say it like that.

KAGAN: No.

That was Barbra Streisand.

KARGER: Yes, they had a tough time trying to convince her to do this movie. Of course, as you said, it is the sequel to "Meet the Parents," which was number one for a month back in 200 -- a huge hit. And now, "Meet the Fockers," where the -- all the parents meet each other.

So, we find out that Ben Stiller's parents are Dustin Hoffman and Barbra Streisand. And Barbra Streisand plays a sex therapist. And remember how uptight Robert De Niro's character right was in the first film, you can just imagine all the fun they're going to have.

KAGAN: We can only hope it's as funny as it sounds.

KARGER: Yes, and they are -- the house is called Focker Isle. So, in Florida, apparently they all congregate at Focker Isle. So, they're going to have a lot of fun with that last name, as you can imagine.

KAGAN: "Polar Express," Tom Hanks -- this sounds like you might need a hanky to go see the Tom Hanks movie.

KARGER: Yes, this is one of the most expensive movies of the fall. And if you look at the technology they're using, it's a technology called performance capture. This is based on a 1985 children's book, and it's CGI -- Computer Generated, you know, animation...

KAGAN: Kind of looks like "Toy Story" a little bit.

KARGER: What's incredible is that the actors actually performed these roles on a sound stage -- you know, with all these dots on their heads?

KAGAN: Right.

KARGER: And then, the computers captured it and then did the animation based on the performances. And that's why the body movements are supposed to be just like Tom Hanks. And Tom Hanks actually plays five different characters in this film, including Santa Claus.

KAGAN: Including Santa Claus, but no challenge there.

And then "Aviator," Howard Hughes -- the story of Howard Hughes -- and Leo DiCaprio.

KARGER: Yes.

KAGAN: You said there's early Oscar buzz on this movie.

KARGER: There is. Well, it's directed by Martin Scorsese. So, anytime he makes a film...

KAGAN: "Gangs of New York," his last big movie.

KARGER: Yes, was nominated for Best Picture, although it didn't win any Oscars. He has never won for Best Director, Martin Scorsese. This could be it. Leonardo DiCaprio as Howard Hughes is supposed to be terrific. And it follows 20 years in his life when he was really becoming an aviation pioneer and also dating a lot of movie stars. So, you have Cate Blanchett playing Katharine Hepburn and you have Kate Beckinsale playing Ava Gardner and Jude Law playing Errol Flynn. So, all of these stars of today playing the stars of yesterday. It's going to be really fascinating.

KAGAN: Good. I'm ready for the fall movies, because the summer -- summer 2004, you know, just...

KARGER: Too many sequels, too many superheroes if you ask me.

KAGAN: Yes, and I just did. But thank you. Dave Karger, "Entertainment Weekly," thank you for stopping by. Appreciate it. Have a great weekend.

KARGER: You, too.

KAGAN: You can keep your eye on entertainment, your favorite stars and get the lowdown on the upcoming movies 24/7. Just point your Internet browser to cnn.com/entertainment.

We're back after this.

(COMMERCIAL BREAK)

KAGAN: Let's check in on weather. Orelon Sidney handling that for us.

(WEATHER REPORT)

KAGAN: All right, Orelon, thank you so much.

The City of New York is extending an olive branch to protesters at the Republican National Convention. We'll tell you what the mayor is doing to make them feel welcome.

Plus, find out how a blind woman's teeth helped her regain her sight. That fascinating story is coming up in our "Daily Dose," as the second hour of CNN LIVE TODAY begins right now.

And let's take a look at what is happening now in the news. The U.S. Military officials deny that Iraqi police have taken control of a holy shrine in Najaf. An Iraqi interior minister spokesman said earlier that police had entered the Imam Ali Mosque. Members of the Mehdi Army have been holed up there. A live report from Iraq is just ahead.

An aide to Muqtada al-Sadr says that captured journalist Micah Garen will be released today or tomorrow. The Arab-language network Al-Jazeera today aired a videotape of Garen reading a statement. He says that his captors want the American people to end the bloodshed in Najaf and that he is being treated well.

Attorney General John Ashcroft says two men are in custody in an alleged terrorism financing scheme. He made the announcement in a news conference last hour. A third person is still at large overseas. The men are accused in a scheme to provide hundreds of thousands of dollars to the group Hamas. Details ahead in a live report.

Soaring oil prices could mean more pain at the pump. Crude oil is hitting fresh all-time highs -- now hovering close to $50 a barrel. We'll have a live report at the bottom of the hour on the rise in prices.

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