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Explosions, Gunfire near Sheraton Hotel in Baghdad

Aired October 07, 2004 - 11:59   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.


WOLF BLITZER, CNN ANCHOR: We have a busy hour ahead here in Washington, around the country -- indeed, around the world. We'll get to all the latest news, though. First, some headlines right "Now in the News."
Dozens are dead in another bombing in Pakistan. Police say a car bomb exploded outside a celebration of Sunni Muslim militants, killing at least 39 people and wounding dozens more. No one has claimed responsibility, at least not yet.

Unexplained explosions in Baghdad today. Smoke was seen rising near the interim government compound, the so-called Green Zone. Several thousand troops launched raids against insurgents in a province in southern Iraq.

Also today, U.S. Customs Service says fingerprinting at border crossings has resulted in a surge of arrests. Officials say prints of illegal immigrants are being compared against a federal database, and a recent 10-month period produced more than 8,000 arrests of people suspected of serious crimes.

Up first this hour: the Bush barrage against Senator Kerry. The heavy-hitting script the president first presented yesterday is expected once again today as the Bush team seeks momentum. Bush will speak in Wisconsin shortly. We're going to have coverage of that.

But let's go to Baghdad right now. We're getting some breaking news. We're looking at these live pictures right now, gunfire outside a hotel in Baghdad. Hard to make out specifically what we're seeing, but we're told that only within the past few minutes a series of gunfire shots were heard outside this Baghdad hotel.

Details, of course, very, very sketchy right now. We're not getting a lot of information. Our people on the ground, though, in the Iraqi capital are working the story. Clearly, a very, very dangerous situation outside this hotel. Our people are there, but it would be extremely dangerous for them to be walking outside.

There has been an upsurge in recent days in recent weeks, of insurgent activity. We're seeing -- hold on one second. Let's just listen to this.

(BEGIN VIDEO CLIP)

BRENT SADLER, CNN SR. INTL. CORRESPONDENT: Get the lights off. Lights off!

(GUNFIRE)

SADLER: Get back! Come on, roll it. Get these lights off and roll it! Get the lights off, lights off!

(END VIDEO CLIP)

BLITZER: The voice you're hearing is that of CNN's Brent Sadler, our correspondent. This is videotape that was shot just moments ago. And you can hear him telling the camera crew to keep rolling, keep shooting at this firefight that's under way, that has been under way outside the hotel where CNN reporters, producers, other CNN executives have been staying.

Look at this. Let's watch this videotape.

(BEGIN VIDEO CLIP)

SADLER: Get the lights off! Lights off! Get back.

(GUNFIRE)

(END VIDEO CLIP)

BLITZER: All right. That was videotape that was shot, and here's some more of that videotape shot only within the past few minutes from Baghdad. The voice you're hearing on the tape, that of Brent Sadler, instructing everyone to turn off the lights around the area where we do our broadcasting from in Baghdad.

A firefight erupting only a little while ago outside the hotel where many international journalists are based, including CNN's. A serious firefight. We don't have details on casualties or damage or anything along those lines, but we expect to get someone from our CNN operation in Baghdad on the phone with us to try to give us some more information.

But these are pictures that just literally came into CNN only within the past few minutes. A serious firefight under way outside the hotel in Baghdad.

This is supposedly a secure area in Baghdad. Secure being a relative word when it comes to what's going on in the Iraqi capital right now.

Here we've gone from -- for some more videotape. You see a fire that clearly has erupted at this area around the hotel where CNN operates, other international news organizations operate from in Baghdad.

In recent days, our reporters on the scene, Brent Sadler, Walter Rodgers, have all basically told us, as have so many other journalists that are based in Baghdad, that it's very dangerous to even walk outside their hotels unless you're protected with heavy security. That it's almost reckless given the nature of the situation outside the so-called Green Zone, the most secure area, where the interim government is based, where the U.S. embassy under Ambassador John Negroponte is based, where so much of the headquarters of the U.S. military and coalition forces are based.

But you can see the aftermath of a gunfight that occurred at this hotel in Baghdad only within the past few minutes. A very, very dangerous situation indeed. Dramatically underscored by the videotape that we just showed our viewers.

If we can queue that videotape up, we'll show it one more time if people are tuning in right now. I want to show them what happened. Look at this.

(BEGIN VIDEO CLIP)

SADLER: Come on, roll it! Get these lights off and roll it! Get the lights off, lights off!

(GUNFIRE)

SADLER: Get the -- come on, roll it. Get these lights off and roll it!

(END VIDEO CLIP)

BLITZER: All right. So this is the videotape that we've seen now from central Baghdad, outside the Green Zone, but a secured area at the Sheraton hotel in central Baghdad, an area where many international journalists are based. They're doing their best under awful circumstances, as we can clearly tell.

A firefight erupting. And then you see in the live pictures a fire right near that Sheraton hotel in central Baghdad. A series of blast occurring only within the past few minutes.

It's a dangerous situation, underscored now clearly by this dramatic videotape that has just come in to CNN, dramatic videotape showing the aftermath of a firefight with -- outside the Sheraton hotel in central Baghdad. Even though this is outside the so-called Green Zone, where our bureau is, our CNN reporters are based, it's still considered a relatively safe area.

Heavy security presence there, private security organizations, as well as Iraqi police, Iraqi security forces, and U.S. military personnel on the ground as well. But clearly, a dangerous situation.

We had been told by top Iraqi officials, including the prime minister, Ayad Allawi, who spoke with me a couple weeks ago while he was here in the United States, as well as top U.S. officials, that leading up to the Iraqi elections scheduled for the end of January, the situation on the ground was probably going to get worse before it gets better, if, in fact, it ever winds up getting better. But they were trying, the insurgents, the terrorists, the Saddam loyalists, as they're called, the Fedayeen, the remnants of the Saddam regime, would be trying to undermine any opportunity to have free and fair elections, relatively speaking, in Iraq.

And there's certainly another election about to take place. That one right here in the United States on November 2. And the assumption has always been that terrorists would try to do something to disrupt the U.S. presidential election as well.

So we're going to continue to watch what's happening in Iraq. And for those viewers who just may be tuning in, fire has clearly erupted outside the central Baghdad Sheraton hotel where CNN operates from and other international news organizations, as well.

Barbara Starr, our Pentagon correspondent, has been watching all of this, together with us.

I assume details very sketchy at the Pentagon, Barbara, as well?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Wolf. This video now just coming in. People here at the Pentagon, of course, seeing it on their television screens.

All of this, as we have been discussing on our air, taking place in the so-called secure -- relatively secure areas of Baghdad. Both of these hotels, where CNN personnel stay and where this apparent fire has broken out, are heavily secured areas.

There, of course, have been incidents in the past where fire has come their way. It's been very difficult, of course, for the journalists working there, as CNN journalists will tell you.

They stay very close to the hotel. They don't venture far these days. Most journalists don't. Baghdad, a very, very difficult place for a journalist to do work.

But these hotels are supposed to be relatively secure areas, as the so-called entire Green Zone is, including where headquarters of the United States military and now the new U.S. embassy for Iraq is located. But the Green Zone also it has come under fire.

All of this, Wolf, underscoring the notion that security in Baghdad and indeed throughout Iraq is relatively random concept. There are areas that are deemed safe, but perhaps only safe until gunfire breaks out in some way. And that's part of the frustration for both U.S. security personnel and Iraqi security personnel. Very difficult situation unfolding right now.

BLITZER: And Barbara, we're getting some more details, although the information is still sketchy and fragmentary coming in. Reuters is reporting now from Baghdad that at least two rockets were fire toward the Sheraton and Palestine hotels in central Baghdad, and then a fire broke out in the area.

Reuters saying, according to eyewitnesses on the scene, that shortly after the rockets were fired at these hotels, hotels where many international journalists are based, bursts of gunfire could be heard echoing across the city center. We've seen that on that -- on that videotape that we've been showing our viewers. Flames and smoke clearly can be seen rising from the area around the Sheraton hotel.

Not only a lot of journalists are based at that Sheraton hotel, Barbara, but a lot of foreign contractors, defense contractors, are based there as well. A lot of Americans and others who work either for the U.S. military or for the interim Iraqi government, they stay at those hotels as well because they are -- and it's all a relative word -- they are relatively secure.

STARR: Well, that's right, Wolf. And this is part of the dilemma for the security situation in Baghdad, as we say.

The U.S. plan, the U.S. policy, has been to try and make Iraqi security forces take charge in as many areas as they can. Now, admittedly, these two hotels, because there are so many western journalists staying there and there are so many, as you say, contractor personnel in hotels in various parts of Baghdad, the U.S. military does work with Iraqi security forces to try and keep a very close eye on what goes on there. But what you are seeing on your screen right now underscores the real situation on the street in Baghdad.

Gunfire can break out anywhere, anytime. And what we will be watching very closely here is the response by Iraqi security forces.

Will they be able to quickly locate where this gunfire, where this tracer fire, where these rockets are being launched from and then launch their own Iraqi security personnel to go out and find these targets? That is going to be what should be unfolding in the moments ahead. We will watch and see just how fast Iraqi security personnel are going to be able to respond or whether U.S. military personnel will be under way shortly to try and locate where this fire is coming from.

BLITZER: Clearly, a very dangerous situation. Right now you're looking at these pictures.

I want to welcome our CNN international viewers from around the world to our coverage as well. For those people just tuning in, only within the past few moments we've seen these -- a gunfight erupting outside both the Sheraton and the Palestine hotels in central Baghdad, relatively secure areas, albeit outside the so-called Green Zone, the most secure part of Baghdad, where the Iraqi interim is based. The U.S. military has headquarters there, as well as the U.S. embassy in Baghdad.

Here's Brent Sadler talking about what was happening as it unfolded only a few minutes ago. And these are more videotape pictures that we've seen. The Associated Press, like Reuters, now reporting -- and we've seen it on this videotape -- explosions and gunfire erupting in central Baghdad outside these two hotels where so many foreign journalists and contractors are staying.

Barbara, what else -- what else are you hearing over there?

STARR: Well, one of the other things that clearly will be watched, this attack, as you say happening in a part of Baghdad that is heavily populated, where business and commerce goes on daily. This may be very unsettling to Iraqi civilians in Baghdad. It's going to underscore to them just how difficult the security situation is on the ground. Just as the Bush administration has been trying very hard to make the case that Iraqi security forces are increasingly getting things under control, that they are being trained and equipped, that Iraqi police are moving to try and reassert control in key areas against the insurgency this attack, this attack, the particular place in Baghdad where it's happening, as you say, the relatively secure areas, may underscore to the Iraqi people who live there that their capital streets are very potentially unsafe at the moment. This -- may be something that causes the Iraqis a good deal of anxiety at a very inconvenient time.

We should say that there really is an effort to get those Iraqi security forces trained, equipped and on the street. The Bush administration has been reminding us that Iraqi security personnel have been paying a very heavy price in this war, as well. More than 700 Iraqi security personnel killed by insurgents' attacks during the past several months. More than 1,000 U.S. military personnel now fatalities in the war in Iraq.

Very difficult business for everybody. It is going to be very interesting, Wolf, to see how long this attack continues.

If we do see this gunfire subside, it may mean one of two things. Either whoever is launching these attacks has achieved their objective, unsettled everyone and run away, or it may mean that U.S. military personnel and Iraqi security personnel are already moving through the city streets, looking for who's launching the attacks and launching their own counterattacks, trying to find them.

One of the things in this type of breaking situation, this very urban warfare that is unfolding before our eyes, literally, is going to be to see how long it goes on and what else may unfold in the moments ahead. That is going to tell us how successful the coalition security forces are in launching their troops and finding out who is doing this.

BLITZER: All right. This is the scene in Baghdad, Barbara. I'm going to have you stand by, and I'll recap for viewers who are just tuning in from here in the United States, indeed from around the world.

Only within the past few minutes, rocket and heavy machine gunfire resounded. Projectiles whizzed through central Baghdad. Several blasts were heard, followed by heavy gunfire, similar to what would occur in a firefight. Of course, suspected insurgents are -- insurgents suspected of being involved in this attack.

The video that we're seeing and the voice that we're hearing, this video, is that of Brent Sadler, our correspondent. Clearly, was watching this, together with our crew. They were shooting the videotape. And you see those -- the automatic gunfire going along.

The origin, the beginning, was apparently a rocket attack against the central Baghdad Sheraton and Palestine hotels. And as a result, you could see a fire erupting outside one of those hotels as well. Brent Sadler telling the crew to turn off the lights. This is a dangerous situation. When you have gunfire in a situation like this, insurgents or terrorists nearby, the last thing you want is to be in any light whatsoever. To be on television, of course, you to have some light. So that's why you're not seeing Brent Sadler on television right now.

Clearly, much dangerous to turn on a light and get a reporter standing in front of a camera at this point. We are trying to establish satellite phone contact with Brent Sadler and our team in Baghdad. Once we do that, we'll, of course, get him on the air, and he can walk us through precisely what has happened.

But clearly, a serious firefight, a rocket attack against a hotel that houses a lot of foreign journalists, a lot of American journalists, and a lot of defense contractors, workers, Americans and others, who are based in Baghdad, trying to help the interim Iraqi government get some reconstruction programs going, trying to help the U.S. military as well.

We hear about -- a lot about U.S. and coalition forces, military troops in Iraq. There are thousands of contractors who have been brought in from around the world as well. And many of them stay at these hotels in central Baghdad that are deemed to be relatively secure, including this Palestine hotel and the Sheraton hotel.

The situation there being a little bit chaotic. We're going back to these live pictures right now.

Brent Sadler, are you joining us now? Are you available?

SADLER: Yes, I am, Wolf. Sorry -- I had to be off the air for a few minutes. We were caught in the middle of that. Let me just catch you up with what I saw.

I was in front of camera when I saw the first of two rockets, low trajectory, coming from about 500 yards, 600 meters, 700 meters from our position, our live shot position on our hotel here. The first rocket slammed into the side of a hotel that's adjacent to us, the Sheraton hotel. I guess it would be about the second or the third floor, but it might have just hit some archways below room level.

Then there was a second rocket that tore through past our position here. It must have only been a couple of hundred meters or less from me. A tremendous whoosh and slamming into the side of the Sheraton hotel.

We ducked down in case there were more missiles flying our way or to the next-door building. And then there an exchange of gunfire.

Certainly, I know from U.S. positions -- and I'm not going to give them away -- but certainly, machine gunfire came from an American position close by. And from what I could see, from the tracer rounds whizzing past us, they were aiming for the point, the firing point of where those two rockets were launched. What we can see now, fire and ambulance services here. And they're just really several hundred yards away from the hotel itself. There is some concrete barriers that they may have difficulty navigating to actually get to the blast site.

No indication at this stage whether or not there were any injuries in that adjacent hotel. A few months back, the same hotel was targeted by mortars, was hit by mortars, rather, and it was thought those mortars were aimed a few months ago towards the Green Zone. They just clipped the top of the building.

But no doubt, from what I could see in my position here, that those two projectiles, two rockets were directly aimed at the lower part of the Sheraton hotel. And no question whatsoever in my mind that they were aiming for the Green Zone on this occasion. This was a direct attack against the hotel, the Sheraton hotel.

Then fire broke out in the lower areas. Quite possibly palm trees ablaze at first. Fire flame died down pretty quickly.

So that's the situation as I have it right now, Wolf. Certainly a big shakeup. Tremendous explosion by the rockets. Shrapnel flying all over place.

Tremendous heat generated at the moment of impact. Blinding flash, and then a second rocket coming in.

So that's all we have at the moment. Back to you -- Wolf.

BLITZER: And Brent, I just want to recap. You and our entire CNN team, everyone is fine, as -- at the hotel where you're adjacent, you're near the Sheraton hotel, but you were not in the Sheraton hotel, is that right?

SADLER: That's correct, Wolf. These two hotels are side by side. There's a road that splits them.

And the two rockets were fired at the hotel next to us, where other news organizations are located. We have no indication of any casualties next door yet. But certainly some of our TV colleagues are, indeed, based over there, and we wait with some anxiety to find out what has happened on the other side of the street.

I can tell you also that the fire and ambulance services here are gathering. But I'm not really coming to where the hotel is. I guess that's because of the fact the area is under lockdown.

There are U.S. troops in this area, there's a U.S. position in this area that spots the possible attacks into the Green Zone. But this was not an attack directed at the Green Zone.

This was an attack, a double rocket attack -- and there's another explosion there. Not quite sure what that is. Certainly, I don't see any projectiles flying around. But a second blast from the direction, Wolf, of where I saw those two rockets fired from. Now, whether that's a car bomb, whether it's a malfunctioning rocket, I don't know. But again, you heard a terrific thunk then. So pretty unclear as to how this is going to shape up -- Wolf.

BLITZER: And I want you to be very careful, obviously, Brent, from your vantage point. Don't try to get outside, don't do anything that could endanger you or our team. But that loud explosion we just heard a few seconds ago, do you see any smoke rising, or do you see anything that suggests that it was another bombing or a rocket?

SADLER: No. It sounded similar to a car bomb explosion that we had here a few days ago in Sedun Street (ph). This is all happening, I have to tell you, Wolf, easy within my eyesight.

I saw the flash of that explosion. You obviously heard the bang at the same time as I did. I see a glow. It could be a fire just above the tree line from my location over here.

Not had any more machine gunfire. But certainly this is a situation we've not had quite so close and directly aimed that we know for sure at these hotels.

Of course, we know that -- and it's widely known in the city -- that western contractors, western news organizations, are located in what's known as the twin towers here, these two large hotels. One, the Palestine, where I'm speaking to you from, and the other the Sheraton.

Just to repeat, it is the Sheraton, the lower levels of the Sheraton hotel, that was hit by those two rockets within the past 20 minutes or so. I saw the launch, I saw the rockets whoosh by our position.

Balls of fire. The first one hit the lower part, setting, I think, a palm tree on fire. And then just seconds later, maybe 45 seconds later, a second rocket flew past our position here and slammed into the Sheraton hotel -- Wolf.

BLITZER: Brent, the Palestine hotel, as far as you know, was not directly targeted, was it?

SADLER: Not directly targeted on this occasion, no. This was low-level rocket fire. Two of them coming from the same firing point, and then hitting the Sheraton hotel.

And then after that, I could see the tracer rounds of hundreds of rounds, I guess, in a short space of time, machine gunfire, coming from a high position directed down. So a trajectory, a 45-degree trajectory down towards the firing position. At that stage, I was on my stomach crawling for cover as the bullets were flying -- Wolf.

BLITZER: All right, Brent. I'm going to have you stand by for a moment.

I want to recap for viewers who are tuning in around the world to what they're seeing. You're looking at a live picture right now. And this is videotape shot about 25 minutes or so ago from -- in Baghdad.

Rockets, at least two, were directed at the Sheraton hotel in central Baghdad, a hotel that houses a lot of western journalists and contractors in a relatively secure part of central Baghdad. The Sheraton hotel being one of two major hotels, the Palestine being the other, where a lot of journalists and contractors are headquartered.

That rocket attack was followed by machine gunfire, automatic weapon fire, as we can see here in this videotape. And eventually resulting in a fire right outside the Sheraton hotel.

There you see that fire erupting. Apparently near some palm trees outside the Sheraton hotel.

Barbara Starr is our Pentagon correspondent, getting a little bit more information from her monitoring zone.

What are you hearing, Barbara?

STARR: Well, Wolf, officials are continuing to watch this situation and try and secure the area, certainly. But what you're seeing on your TV screen, Wolf, is really the unfolding of an example of what the insurgency is all about on the streets of Baghdad.

Now, Brent Sadler pointed out that it appeared machine gunfire had been returned against insurgent firing positions. This indicates very short range...

BLITZER: Barbara, I'm going to interrupt you. We're now getting this videotape. Our viewers can see it, the first interior shots of the Sheraton hotel.

You see some of the destruction, some of the damage. U.S. troops and other security personnel, together with civilians, just dealing with a rocket attack at the Sheraton hotel. You can see the pictures yourself, Barbara. But I just wanted to alert our viewers what they are now seeing.

STARR: Well, this is really underscoring what the insurgency is all about in Iraq, Wolf. People unsettled, people obviously very scared, very unsettling situation. And that's what the insurgents clearly are after.

This is -- this is low-level combat on the streets of Baghdad at night, close combat, relatively short-ranged rockets, return fire by machine gunfire, all very short range. The insurgents often using the basic shoot-and-scoot tactics, getting out of the way as soon as they fire, disappearing into the night, making it very difficult for security forces and Iraqis to find them. And unsettling certainly not just for westerners but the people of Baghdad, who live in these neighborhoods.

You know, it's -- this is the type of attack that doesn't stop progress in Iraq on the political front. All of those things that we hear about, the elections, the interim government, go ahead. But this is the kind of thing, as you can see tonight, right now, people unsettled, people scared, not knowing if there's going to be another rocket coming their way any minute.

And very difficult for the U.S. to move out into the streets and find these insurgents as soon -- you know, when they fired these short-range weapons, because they're able to just disappear back into the night. Making it a very difficult situation, as we keep saying, for everyone -- Wolf.

BLITZER: All right. Barbara Starr, I'm going to have you stand by, collect some more information over at the Pentagon.

Brent Sadler is our man on the scene in Baghdad. He was an eyewitness to everything that happened as it was happening, including that first rocket or two that was fired at the lower levels of the Sheraton hotel.

Brent, I don't know if you can see this, but we're seeing interior shots now, the lobby of the Sheraton hotel, where there are a lot of people trying to deal with clearly an awful situation.

SADLER: Yes, indeed, Wolf, I'm seeing those pictures. It's a very large lobby area.

Let me just paint the picture a little bit for you. These are very, very large concrete structures, both the Sheraton hotel, where this blast took place, the two rocket attacks, and where we are, in the Palestine hotel. These are very, very well-known buildings and they are very, well constructed.

They were constructed of marble, obviously, and concrete and steel. So these rockets certainly would have shook the outer building, the constructs of the building. But from what I'm seeing on these pictures, and maybe not have penetrated inside the area itself, this looks like perhaps secondary blast damage. We've got no idea of casualties yet.

But I think, just to pick up on what Barbara Starr was saying there, I can confirm that this was -- it must have been a line of site attack. When I saw those two rockets going along their trajectory to the point of impact, they were both following the same track. They were low level, and they had to have been positioned in such a way that those who either set them on timers, or detonated them in situ (ph), must have been able to see what they were aiming at.

This was not the top of the building. This was the bottom of the building. In fact we can confirm it was the third floor of Sheraton Hotel. And that is certainly what we saw in terms of close quarters contact, if you like, when U.S. troops started opening fire.

From what I could see, and I could see the tracer bullets coming right past in front of me, that's when we hit the deck in case return fire came our way. But those tracer rounds were going towards the point of where those rockets were set off from.

So this is line of sight combat between U.S. troops on one side and the insurgents who fired these rockets on the other side. Now, just to get back to that explosion we heard a short time ago when I was on air, we understand from security sources here that that was a controlled explosion, perhaps a third rocket might have been destined to have been fired. But certainly what we understand from our sources, that was a controlled explosion. Perhaps explaining why we see the emergency services that are ringing the Sheraton and Palestine hotels right now, did not react to that explosion.

But it's difficult to say, Wolf. This is -- it's early evening, Baghdad time. I was about to do a live shot in front of the camera and then, whoof! out of the night it comes nowhere. The hotel we're in, everybody starts running around, obviously a degree of panic, guards start picking up machine guns, machine gunfire starts flying around, and this is what just terrifies people who living in the capital.

If it happens once a day, twice a day, twice a week, it is the recurrent danger of living here, of being here. Those two blasts were, what, 200 yards, less maybe, 170 yards from my position. It doesn't take much of a degree and a change of that rocket to have come to our hotel and our position. We're at same level, that third floor, gives you an idea, Wolf, of the dangers that people -- that everybody here faces when these attacks just come out of the night like this.

BLITZER: Now Brent, we still have no information about any casualties any people injured, although we see a lot of dazed, shaken people in these pictures that we have from the lobby of the Sheraton Hotel, people trying to emerge. You see the smoke clearly inside.

But there's no information about anyone who may have been killed or wounded in these blasts. You have no information along those lines, do you, Brent?

SADLER: No, I don't. We're still waiting for information. Those pictures, you can see, people look pretty shocked and dazed. It looks pretty smoky or certainly dusty in the hotel where other news networks are based, and where other Western organizations are also based. The area we're in is pretty well secured in terms of blast- proof walls for suicide car bomb attacks or car bomb attacks, the likes of which we've seen pretty regularly here over the last few weeks.

But this was, let me just reiterate, a rocket attack, a double rocket attack, very close to firing point. I could just about see where that must have come from because I could see the trajectory of the second rocket, because my eyes were already looking to where the first rocket had come from.

And it -- certainly it was not very far from this area. Whether those rockets, as we've seen in the past, were on timers, that remains to be scene. Whether they were loaded into a car, a pickup, that remains to be scene. I'm sure we'll be getting some video from the firing site in the not too distant future.

But just one point I'd like to make, Wolf, it was interesting to see that it took several minutes before the U.S. forces started to respond to this firing of these two rockets. There was no immediate response. They would have used their night scope assets from that high vantage point that they are located on. We see them every day.

And it was a short, sharp burst of machine gunfire over perhaps 60 seconds, 90 seconds, aiming at towards where that firing point was. So obviously from their position they would have been able to see a lot more than I could see. Perhaps they were seeing people running away. Too early to say. I'm just surmising here.

But I'm giving you the circumstances how they unfolded, because it's rare that we see a firing point. The rockets actually in the air at the time and then the detonation in one view, if you like. And then the response -- Wolf.

BLITZER: Brent, what is it now, just after 7:30 p.m. local time in Baghdad?

SADLER: I'm still in the dark here, Wolf, for security purposes. Yes, that's correct.

BLITZER: So it's a seven-hour time difference between the eastern coast of the United States. I know there's deep concern, because I've heard it from top U.S. authorities that with the approach of Ramadan mid-October, given what happened last year around the month of Ramadan, the holy month in Islam, there could be an upsurge of terror insurgent strikes against various targets in Iraq, certainly around the world.

Are Western journalists, Westerners in general, Americans taking more security precautions now in advance of Ramadan?

SADLER: I don't think specifically because of the Ramadan holy month of fasting that's coming up. Generally news organizations and Western companies doing business here still are upgrading and evolving security all the time, Wolf.

We do know that the Iraqi interim government is now engaged in an evolving counter-insurgency offensive. Talks are under way to try and work out the possibility of arms being laid down by Muqtada al-Sadr, that's the militant Shiite cleric in Sadr City on the outskirts Baghdad, to try and peacefully end the violent standoff there.

There are attempts to try and broker some sort of deal to lay down weapons in Fallujah, that wouldn't include Islamists and foreign fighters. A lot of things going on with this government trying to negotiate, trying to use a carrot and stick approach, trying to encourage insurgents to lay down their weapons, get involved in the political process ahead of elections because they know places like Fallujah, Ramadi, other areas know that if they do not work out a deal with the government, then the government has made no secret that in the not-too-distant future military force will be used to regain control of key insurgent areas like Fallujah.

And whenever the government appears to be making some progress, appears to be engaged in contacts with certain sectors of the resistance, of the insurgency, then it has not been unusual to see the kind of attack we've seen here that really is an audacious attack close in, against a known hotel that's used by a lot of Westerners, that's protected by U.S. troops, also protected by a security company, an agency that's contracted to the U.S. military, and to fire two rockets at close quarters at these times show that the insurgents have the capacity to strike back and to cause mayhem and to create fear under these conditions -- Wolf.

BLITZER: I'm going to have you stand by, Brent, for a moment. I want to bring in our Ken Robinson, our national security analyst. He's on the phone, he's watching all of this with us and he has got a perspective given his military background.

Just to recap, Ken, at least two rockets were fired at a low level of the Sheraton Hotel in central Baghdad, what was deemed a relatively secure area. You heard Brent Sadler say this was a line of sight attack and it has clearly caused some damage, although we have no information about casualties.

Ken, what goes through your mind?

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Well, really we could take a transcript of everything Brent just said and it would make a perfect wire because he has touched on every key point. It's unknown right who the sponsors of this attack are.

There are multiple groups there in Iraq that could do this. It's problematic...

(AUDIO GAP)

ROBINSON: ... that an area this secure could be targeted with one of these types of attacks. As you know, these terrorist groups, whether they be Shiite, Sunni or Ansar al-Islam, or Zarqawi's group, they all have been using improvised explosive devices which they have, as Brent said, on timers. They use detonations through cell phones, beepers, garage door openers.

So there's no way to know, whether to be able do counter-fire against a site, whether there's actually any insurgents left there. Many times the coalition is forced to have do direct fire because if they use their counter-battery radar and counter-battery fire there may be collateral damage.

So because the insurgents get up with the population and get close in, it reduces the amount of options that the U.S. forces have. The great dynamic that Brent mentioned, which is very important about how the U.S. coalition is trying to take some success from Afghanistan, disarming, demobilizing and reintegration of tribal warlords in those areas and trying to use that template here in Iraq, we don't know whether that's going to work or not.

But the grand ayatollah, al-Sistani, is certainly working hard with the Allawi government and with Sadr's forces to try to make that a reality. The big question is, it's the Sunnis who are going to be disenfranchised by an election that doesn't include their cities because their cities are still ungovernable and how they'll react to that disenfranchisement.

BLITZER: You know, Ken, as I look at these pictures of the lobby of the Sheraton Hotel and people escaping, you can see the dust and the smoke, if you will. Clearly the rocket penetrated this building. Windows shattered, blown out as a result of the double rocket attack that Brent Sadler described and the subsequent fire that broke out outside the Sheraton Hotel.

It suggests, given the nature of the target, that there was not only a desire to score some casualties, if you will, and cause some damage, but a political statement. It looks like whoever did this, the insurgents, the terrorists, were trying to score a political statement given the nature of who occupies the Sheraton Hotel.

ROBINSON: You're absolutely right. Terrorism is theater. And this is now theater on a grand scale because the images are going -- one rocket bought them images all around the world on everyone's televisions.

When you and I were looking at the security in Kuwait, in the hotels we were in prior to the invasion of Iraq, we had articulated and discussed these same concerns because the media is not -- you know, in the 21st Century, we're a target just equally as well as the nongovernmental organizations, as was seen recently with the kidnapping of our correspondent in Gaza.

BLITZER: There is no doubt that a political statement was attempted to be made here, and a political statement has been made although at this point we have no information of any specific group claiming responsibility for this double rocket attack at the Sheraton Hotel.

We have no information about casualties, although as our Brent Sadler reported, ambulances and emergency vehicles are in the area together with military and security personnel dealing with a direct, bold, double rocket attack at the lower levels of the Sheraton Hotel, a building that houses a lot of American journalists, foreign journalists, Western journalists, and contractors who have been brought in to support the U.S. and coalition forces, the interim Iraqi government engaged in all sorts of activities from security to reconstruction.

Pretty dramatic pictures that we've even. It has been about 40 minutes or so since this story erupted with we saw it virtually live here on CNN, a story that hits home, hits very close to all of us given the fact that our colleagues, including Brent Sadler and our CNN team, is there at the -- next door to the Sheraton Hotel at the Palestine Hotel.

Brent, you're still with us. Give us -- set the scene for us, where you are, your vantage point, as best you can, how dangerous, how ominous the situation still appears to be right now.

SADLER: Wolf, it's calmed down substantially in the last 20 minutes or so. To give you an idea of where I am, I am just about at eye level with the third floor of where those rockets blasted, slammed into the side of the Sheraton Hotel.

So it was at my level, that's why I got such a close look at these rockets as they flew past our position. So I turned my head. I could hear the whoosh of the first rocket, turned my head before the impact, saw the impact on the side of the hotel, saw the tremendous heat that's generated and the flash and heard shrapnel landing in the road not far from me, the road that divides the two hotels.

And so I couldn't get much closer to where this happened if you tried. Obviously the second rocket, I was looking in the direction of where the first rocket came, saw that come, as I say, a line of sight attack into the hotel.

And then this exchange of fire from U.S. troops at a high position overlooking this area. So it would have seemed that the rocket, the first one at least, detonated on the outside, the outer skin of the concrete of the hotel. Whether it penetrated inside or just shook the inside and the glass was smashed by the blast effect, it's still too early to say.

I don't know if any of those rocket penetrated the hotel. But certainly there were tremendous blasts and certainly they were aimed at the hotel. And what Ken was saying there, political statement, absolutely.

This is one of the most secure areas in the city outside the Green Zone. The Green Zone is just the other side of the river from where we are, the river Tigris. And we see that. So yes, this was as close as I'd like to be to something like this -- Wolf.

BLITZER: All right, you were a little bit too close as far as I'm concerned, Brent. Stand by for a moment.

Brent was reporting -- and just a little while ago, while he was reporting, we heard a loud explosion. And he reported it was what's being called a "controlled explosion." There was something deliberately done by U.S. forces or Iraqi security personnel dealing with the threat.

There you heard it right there, a controlled explosion. We are told, and I want to alert viewers, and Brent Sadler and everyone else, that there probably will be another so-called controlled explosion coming up soon. Usually what this means is that a suspicious area is blown up by U.S. or Iraqi forces deliberately because that would be the best way of dealing with some sort of situation without allowing it to continue and blow up and cause some serious damage. So they go in and blow it up themselves.

Barbara Starr is at the Pentagon, our Pentagon correspondent. Are you getting some more information over there on who might be responsible for this attack?

STARR: Well, Wolf, officials here continue to watch this. And of course, they have no idea at the moment, as you would expect, exactly who caused this attack tonight on the streets of Baghdad. But what it is underscoring, once again, is the concern about exactly who these insurgents are.

Now there has been a growing feeling amongst the U.S. military that the insurgency they are dealing with has perhaps in recent weeks become more of an insurgency of so-called former regime loyalists, Iraqis, Baathists, whatever you want to call them, people who are against the U.S. military presence, the coalition military presence, people who are Iraqis.

We had heard so much about the so-called foreign fighters. The most recent assessment is that the foreign fighters may number in the hundreds and that they are dealing with those when and where they find them.

The issue of an Iraqi, homegrown insurgency, if you will, something quite different. Tonight, demonstrating the ability of the insurgents, as they exist in Baghdad, to cause mayhem, as Brent Sadler says, and to shoot, cause panic, and then melt away.

This is becoming part of the dilemma for the U.S. counter- insurgency that we've seen over recent days in Samarra, in Sadr City, south of Baghdad where the U.S. and Iraqi forces are moving in and trying to retake local control.

Because when they achieve a success, as they have in Samarra, what is not clear by anybody's account is whether or not they have dealt with the insurgency or the insurgents have, again, gone away, run away, if you will, and regrouping to fight another day. That's what they're facing in Fallujah. That's what they're facing in all of the areas that they plan to move into in the weeks ahead and try and reassert local control.

Are the insurgents defeated or are they just running away and regrouping? And of course the second part of that, as they try and achieve these successes, will the Iraqi security forces really be able to hold ground, if you will, over the long term? They've got them in now in Samarra, for example. Will they be able to maintain control over the city? Will they be able to have these Iraqi security forces in the weeks ahead move into the much more difficult insurgent areas such as Fallujah, west of Baghdad?

All of this remains to be seen. But it's the central part of the Bush administration's Iraq strategy now. Get into these insurgency areas, deal with the insurgency and get Iraqi security forces in.

Tonight's attack showing very difficult to figure out exactly who the insurgents may be -- Wolf.

BLITZER: All right, Barbara, I'm going to have you stand by as well. These flashing lights, these vehicles that we're seeing we're told part of an explosive ordnance unit that has been brought to the scene. This an area that is supposedly relatively secure in central Baghdad, not all that secure clearly right now.

The word relative is an important word because there are probably no areas in Baghdad, even inside the so-called Green Zone, and this is not inside the green zone that are completely secure. We've seen rockets fired inside the Green Zone, that are completely secure.

We've seen rockets fired inside the Green Zone from outside the area. But we do see these vehicles moving in. Some of these explosive ordnance units going in to check out suspicious areas to make sure there are no secondary explosions as a result of this attack against the Sheraton Hotel.

Brent Sadler was there from the beginning. He's watching it. He's still watching the situation. He's once again joining us live from the scene.

You say it's calmed done a bit, Brent?

SADLER: Yes, Wolf. What we're seeing now, American armor, Bradley fighting vehicles and humvees taking up positions between the two hotels, the Sheraton that was hit and the Palestine where I'm speaking to you from, that was not hit.

We're still seeing flashing lights, blue and red lights of emergency services. But certainly the situation calm compared to what it was some 45, 50 minutes ago. The U.S. forces clearly looking to secure this area, showing presence in the aftermath of these two attacks.

Just to recap what I saw, Wolf, two rockets, I saw the first one fly past our live shot position just as I was about to go on air. There was a tremendous explosion. A loud explosion, it shook me from my position. It hit the Sheraton Hotel; and then within 30, 40 seconds, a second rocket came through.

You heard me saying, lights off, lights off. Then you'll hear this gunfire, by which time I was on the floor, along with my cameramen, because there was firing, machine gun firing, tracers bullets going past our position, heading toward the firing point of those two rockets.

Now, the rockets were low trajectory. I would say certainly line of sight, hit the third floor of the Sheraton, and we've seen pictures from inside the hotel of damage, of dust, of people looking bewildered, people moving out, and obviously shocked by the double rocket attack -- Wolf.

BLITZER: And, Brent, right now, the whole area, I assume, is trying -- they're trying to secure the entire area around the Sheraton Hotel, around the Palestine Hotel, this area that houses so many Western journalists and foreign contractors who have been brought into Iraq for various missions.

Under normal circumstances, and the word normal I understand is not necessarily an appropriate word, but under normal circumstances, let's say, two, three hours ago, had you ventured out of your hotel, the Palestine Hotel, to walk over to the Sheraton Hotel, would that have been a big deal?

SADLER: Let me set the scene for this day, Wolf. I saw the minister of water, actually had lunch with him at the ministry. He was very proud show me his new ministry that had been rebuilt. It had been looting and badly burned after the war. We were having lunched. He looked out of the window, showed me where Sadr City was, then he heard reports that a rocket had landed in the green zone, and he was concerned about his colleagues inside the green zone.

We were talking about the fact that the Russian roulette, if you like, that people play every day here. We go there to that location in an armored vehicle. I came back here. It seems calm. You start to feel a little bit more secure that perhaps it's not as bad as it seems. Not all of Iraq is being shaken by rockets, by mortars. In fact, once you get out of these areas, you feel perhaps you're suffering from some sort of bunker mental syndrome. And then you get a reality check, like I had 50 minutes ago, two rockets within and 100, 200 meters, passing right by me, their tails bright orange, and thing, bang, the explosion.

You know, this is the reality of life here. And this is what Iraqis are having to put up with every day. One moment you feel perhaps it's a little better, because you've heard nothing bad for a while, you've not seen it, it's not affecting your immediate zone of operation. But then, all of a sudden, it comes out of no where and you have to recalibrate now how you feel about your own safety again -- Wolf.

BLITZER: Well, this clearly will shake up a lot of the people at the Palestine Hotel, at the Sheraton hotel, indeed, I would venture to say around Baghdad, an area that is a central part of Baghdad, not only the green zone, but outside the green zone, that is relatively secure.

There are whole parts of Baghdad itself, as we discussed yesterday, Brent, especially Sadr City, the neighborhood controlled by a lot of the radical Shiite areas, the so-called slum areas of Baghdad, that are even more dangerous for Western journalists and other Westerners, isn't that right?

SADLER: Absolutely right, Wolf. Effectively, most if not all of us, particularly in the television world, are under a lockdown situation. We rarely go to places other than the green zone or ministries or places where there is security. I mean, that's part and parcel of our life these days, for, you know, free enterprise reporting in Sadr City, or Fallujah or Ramadi for Westerners has been a no-go for sometime, and that makes reporting the story all the more difficult.

I think in terms of what you see here now, when you hear, or you heard rather, you'll recall, Prime Minister Ayad Allawi in Washington talking about how Iraq is succeeding, there's a long way to go, but Iraqi is succeeding, it only takes two rockets, as we've seen in the past hour, to be fired at two high-profile targets, where there are a lot of Westerners located, including journalists, to grab the headlines and to shake up the impression that Iraq, in the words of the prime minister Ayad Allawi, is succeeding. Because how, people ask, can Iraq be succeeding when this kind of headline decimates any other forms of progress that are being made in this country? BLITZER: Brent, how -- what are U.S. officials on the ground from the Ambassador John Negroponte on down, as well as U.S. military commanders and Iraqi leaders saying? How is it possible that they really realistically think that free and fair elections throughout all of Iraq can take place at the end of January, given the security situation that currently exists? In other words, do they think they can improve the situation so rapidly between now and the end of January that people will be able to go out and vote?

SADLER: Several aspects of that, Wolf. Let me try and walk you through it. First and foremost, this counterinsurgency offensive, we saw it in Samarra last weekend. Samarra now under the control of the interim government, the Iraqi police and the Iraqi army. Another operation going on, we don't hear too much about it at the moment, but it is going on, south of Baghdad in another uncontrolled area that is a conduit for insurgent activity, south of the capital to -- linking to the Ramadi, the Fallujah area and the Sunni Triangle.

Now if political contacts to try and get some insurgent groups, by no means all, to lay down some weapons without a bloody battle to take Fallujah and Ramadi, that would be a positive step. There's a long way to go before any deals are done, if indeed they can be done. And it's very doubtful, in the minds of many, both American and Iraqi officials that deals can be done. Sadr City is a deal that might be done, but that's a separate issue from Islamic fighters, from foreign fighters and from the insurgent actions we're seeing the like of which just happened in the past hour.

What will happen between now and elections? Well, if there's no deal, then there will be almost certainly a strong military offensive led by the United States to change the dynamics of what's happening, the terror, the kind of terror, that is being exported, they say, from Fallujah, specifically Fallujah. That is the big one. That's the big nut for them to crack. And it is from Fallujah that these kind of operations, car bomb attacks, suicide bomb attacks, mortar attacks, and the kind of rocket attack we saw here a short time ago are being planned and being are implemented. That's why were we're seeing sustained air activity ahead of a possible offensive against Fallujah.

Now what's going to happen between now and the end of January for those planned elections? Well, many Iraqi officials I speak to, and some I speak to in the presence of U.S. officials here, you know, say, unless we can really deliver a killer blow against these areas, then stability is still going to be part and parcel of the election process. How high it is or how low it is, no one can say at this stage. But the fact of the matter is that insurgent activity or terror activity from the likes of Abu Musab Al Zarqawi, the most wanted terror suspect in Iraq, are expected to be still going on at some level or another.

And the important thing is, what will change after the elections in terms of the security? Not much, say Iraqi officials, which is why you're hearing them, particularly recently, from the President Ghazi al-Yawer down, who I interviewed, saying that Iraqis the interim government cannot have the elections rammed down their throat to fit a timetable at the end of January, because the elections process itself is more important than meeting a deadline at the end of January.

So, yes, they want elections, but if it has to change, because of deteriorating security or a security that's not improved from what they're seeing today, then there's nothing wrong with delaying elections. That's what some Iraqi leaders are saying openly. Now that flies in the face of what U.S. officials would like to see here.

And certainly flies in the face of what Prime Minister Ayad Allawi says, including in an interview he gave us only a couple weeks ago when he was in the United States. He was very, very confident that those elections would take place.

Brent, for the elections to take place, you also need United Nations observers, monitors to come in to make sure the elections are free and fair. There's only a few of them there now, but given the security situation, including what's happened over the past hour in Baghdad, it might make it more difficult for those kinds of hundreds, if not thousands, of U.N. personnel from around the world to want to come in to Baghdad to monitor this situation.

SADLER: Absolutely right, Wolf. Where do you accommodate these observers? Where do you give them security? How do they get about to monitor such an election? These are the kind of fundamental problems that of course the United Nations and the Secretary-General Kofi Annan are most concerned about. The United Nations, in effect, was blasted out of here by an awful, terrible car bomb that killed the top U.N. representative here in Iraq. How to hold elections when insurgents can still put a car bomb, can still fire rockets, drop mortars into areas as secure, supposedly, as the one we are in now -- Wolf.

BLITZER: Brent Sadler is going to stay on the scene for us. He's been there throughout the beginning. It's been almost an hour since we saw literally on videotape. He saw it live, two rockets launched at the Sheraton Hotel.

We're going to continue to monitor this situation, but I want to hand our coverage over right now to our "LIVE FROM" team. Kyra Phillips, Miles O'Brien standing by to pick up our coverage.

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 October 7, 2004 - 11:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: We have a busy hour ahead here in Washington, around the country -- indeed, around the world. We'll get to all the latest news, though. First, some headlines right "Now in the News."
Dozens are dead in another bombing in Pakistan. Police say a car bomb exploded outside a celebration of Sunni Muslim militants, killing at least 39 people and wounding dozens more. No one has claimed responsibility, at least not yet.

Unexplained explosions in Baghdad today. Smoke was seen rising near the interim government compound, the so-called Green Zone. Several thousand troops launched raids against insurgents in a province in southern Iraq.

Also today, U.S. Customs Service says fingerprinting at border crossings has resulted in a surge of arrests. Officials say prints of illegal immigrants are being compared against a federal database, and a recent 10-month period produced more than 8,000 arrests of people suspected of serious crimes.

Up first this hour: the Bush barrage against Senator Kerry. The heavy-hitting script the president first presented yesterday is expected once again today as the Bush team seeks momentum. Bush will speak in Wisconsin shortly. We're going to have coverage of that.

But let's go to Baghdad right now. We're getting some breaking news. We're looking at these live pictures right now, gunfire outside a hotel in Baghdad. Hard to make out specifically what we're seeing, but we're told that only within the past few minutes a series of gunfire shots were heard outside this Baghdad hotel.

Details, of course, very, very sketchy right now. We're not getting a lot of information. Our people on the ground, though, in the Iraqi capital are working the story. Clearly, a very, very dangerous situation outside this hotel. Our people are there, but it would be extremely dangerous for them to be walking outside.

There has been an upsurge in recent days in recent weeks, of insurgent activity. We're seeing -- hold on one second. Let's just listen to this.

(BEGIN VIDEO CLIP)

BRENT SADLER, CNN SR. INTL. CORRESPONDENT: Get the lights off. Lights off!

(GUNFIRE)

SADLER: Get back! Come on, roll it. Get these lights off and roll it! Get the lights off, lights off!

(END VIDEO CLIP)

BLITZER: The voice you're hearing is that of CNN's Brent Sadler, our correspondent. This is videotape that was shot just moments ago. And you can hear him telling the camera crew to keep rolling, keep shooting at this firefight that's under way, that has been under way outside the hotel where CNN reporters, producers, other CNN executives have been staying.

Look at this. Let's watch this videotape.

(BEGIN VIDEO CLIP)

SADLER: Get the lights off! Lights off! Get back.

(GUNFIRE)

(END VIDEO CLIP)

BLITZER: All right. That was videotape that was shot, and here's some more of that videotape shot only within the past few minutes from Baghdad. The voice you're hearing on the tape, that of Brent Sadler, instructing everyone to turn off the lights around the area where we do our broadcasting from in Baghdad.

A firefight erupting only a little while ago outside the hotel where many international journalists are based, including CNN's. A serious firefight. We don't have details on casualties or damage or anything along those lines, but we expect to get someone from our CNN operation in Baghdad on the phone with us to try to give us some more information.

But these are pictures that just literally came into CNN only within the past few minutes. A serious firefight under way outside the hotel in Baghdad.

This is supposedly a secure area in Baghdad. Secure being a relative word when it comes to what's going on in the Iraqi capital right now.

Here we've gone from -- for some more videotape. You see a fire that clearly has erupted at this area around the hotel where CNN operates, other international news organizations operate from in Baghdad.

In recent days, our reporters on the scene, Brent Sadler, Walter Rodgers, have all basically told us, as have so many other journalists that are based in Baghdad, that it's very dangerous to even walk outside their hotels unless you're protected with heavy security. That it's almost reckless given the nature of the situation outside the so-called Green Zone, the most secure area, where the interim government is based, where the U.S. embassy under Ambassador John Negroponte is based, where so much of the headquarters of the U.S. military and coalition forces are based.

But you can see the aftermath of a gunfight that occurred at this hotel in Baghdad only within the past few minutes. A very, very dangerous situation indeed. Dramatically underscored by the videotape that we just showed our viewers.

If we can queue that videotape up, we'll show it one more time if people are tuning in right now. I want to show them what happened. Look at this.

(BEGIN VIDEO CLIP)

SADLER: Come on, roll it! Get these lights off and roll it! Get the lights off, lights off!

(GUNFIRE)

SADLER: Get the -- come on, roll it. Get these lights off and roll it!

(END VIDEO CLIP)

BLITZER: All right. So this is the videotape that we've seen now from central Baghdad, outside the Green Zone, but a secured area at the Sheraton hotel in central Baghdad, an area where many international journalists are based. They're doing their best under awful circumstances, as we can clearly tell.

A firefight erupting. And then you see in the live pictures a fire right near that Sheraton hotel in central Baghdad. A series of blast occurring only within the past few minutes.

It's a dangerous situation, underscored now clearly by this dramatic videotape that has just come in to CNN, dramatic videotape showing the aftermath of a firefight with -- outside the Sheraton hotel in central Baghdad. Even though this is outside the so-called Green Zone, where our bureau is, our CNN reporters are based, it's still considered a relatively safe area.

Heavy security presence there, private security organizations, as well as Iraqi police, Iraqi security forces, and U.S. military personnel on the ground as well. But clearly, a dangerous situation.

We had been told by top Iraqi officials, including the prime minister, Ayad Allawi, who spoke with me a couple weeks ago while he was here in the United States, as well as top U.S. officials, that leading up to the Iraqi elections scheduled for the end of January, the situation on the ground was probably going to get worse before it gets better, if, in fact, it ever winds up getting better. But they were trying, the insurgents, the terrorists, the Saddam loyalists, as they're called, the Fedayeen, the remnants of the Saddam regime, would be trying to undermine any opportunity to have free and fair elections, relatively speaking, in Iraq.

And there's certainly another election about to take place. That one right here in the United States on November 2. And the assumption has always been that terrorists would try to do something to disrupt the U.S. presidential election as well.

So we're going to continue to watch what's happening in Iraq. And for those viewers who just may be tuning in, fire has clearly erupted outside the central Baghdad Sheraton hotel where CNN operates from and other international news organizations, as well.

Barbara Starr, our Pentagon correspondent, has been watching all of this, together with us.

I assume details very sketchy at the Pentagon, Barbara, as well?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Wolf. This video now just coming in. People here at the Pentagon, of course, seeing it on their television screens.

All of this, as we have been discussing on our air, taking place in the so-called secure -- relatively secure areas of Baghdad. Both of these hotels, where CNN personnel stay and where this apparent fire has broken out, are heavily secured areas.

There, of course, have been incidents in the past where fire has come their way. It's been very difficult, of course, for the journalists working there, as CNN journalists will tell you.

They stay very close to the hotel. They don't venture far these days. Most journalists don't. Baghdad, a very, very difficult place for a journalist to do work.

But these hotels are supposed to be relatively secure areas, as the so-called entire Green Zone is, including where headquarters of the United States military and now the new U.S. embassy for Iraq is located. But the Green Zone also it has come under fire.

All of this, Wolf, underscoring the notion that security in Baghdad and indeed throughout Iraq is relatively random concept. There are areas that are deemed safe, but perhaps only safe until gunfire breaks out in some way. And that's part of the frustration for both U.S. security personnel and Iraqi security personnel. Very difficult situation unfolding right now.

BLITZER: And Barbara, we're getting some more details, although the information is still sketchy and fragmentary coming in. Reuters is reporting now from Baghdad that at least two rockets were fire toward the Sheraton and Palestine hotels in central Baghdad, and then a fire broke out in the area.

Reuters saying, according to eyewitnesses on the scene, that shortly after the rockets were fired at these hotels, hotels where many international journalists are based, bursts of gunfire could be heard echoing across the city center. We've seen that on that -- on that videotape that we've been showing our viewers. Flames and smoke clearly can be seen rising from the area around the Sheraton hotel.

Not only a lot of journalists are based at that Sheraton hotel, Barbara, but a lot of foreign contractors, defense contractors, are based there as well. A lot of Americans and others who work either for the U.S. military or for the interim Iraqi government, they stay at those hotels as well because they are -- and it's all a relative word -- they are relatively secure.

STARR: Well, that's right, Wolf. And this is part of the dilemma for the security situation in Baghdad, as we say.

The U.S. plan, the U.S. policy, has been to try and make Iraqi security forces take charge in as many areas as they can. Now, admittedly, these two hotels, because there are so many western journalists staying there and there are so many, as you say, contractor personnel in hotels in various parts of Baghdad, the U.S. military does work with Iraqi security forces to try and keep a very close eye on what goes on there. But what you are seeing on your screen right now underscores the real situation on the street in Baghdad.

Gunfire can break out anywhere, anytime. And what we will be watching very closely here is the response by Iraqi security forces.

Will they be able to quickly locate where this gunfire, where this tracer fire, where these rockets are being launched from and then launch their own Iraqi security personnel to go out and find these targets? That is going to be what should be unfolding in the moments ahead. We will watch and see just how fast Iraqi security personnel are going to be able to respond or whether U.S. military personnel will be under way shortly to try and locate where this fire is coming from.

BLITZER: Clearly, a very dangerous situation. Right now you're looking at these pictures.

I want to welcome our CNN international viewers from around the world to our coverage as well. For those people just tuning in, only within the past few moments we've seen these -- a gunfight erupting outside both the Sheraton and the Palestine hotels in central Baghdad, relatively secure areas, albeit outside the so-called Green Zone, the most secure part of Baghdad, where the Iraqi interim is based. The U.S. military has headquarters there, as well as the U.S. embassy in Baghdad.

Here's Brent Sadler talking about what was happening as it unfolded only a few minutes ago. And these are more videotape pictures that we've seen. The Associated Press, like Reuters, now reporting -- and we've seen it on this videotape -- explosions and gunfire erupting in central Baghdad outside these two hotels where so many foreign journalists and contractors are staying.

Barbara, what else -- what else are you hearing over there?

STARR: Well, one of the other things that clearly will be watched, this attack, as you say happening in a part of Baghdad that is heavily populated, where business and commerce goes on daily. This may be very unsettling to Iraqi civilians in Baghdad. It's going to underscore to them just how difficult the security situation is on the ground. Just as the Bush administration has been trying very hard to make the case that Iraqi security forces are increasingly getting things under control, that they are being trained and equipped, that Iraqi police are moving to try and reassert control in key areas against the insurgency this attack, this attack, the particular place in Baghdad where it's happening, as you say, the relatively secure areas, may underscore to the Iraqi people who live there that their capital streets are very potentially unsafe at the moment. This -- may be something that causes the Iraqis a good deal of anxiety at a very inconvenient time.

We should say that there really is an effort to get those Iraqi security forces trained, equipped and on the street. The Bush administration has been reminding us that Iraqi security personnel have been paying a very heavy price in this war, as well. More than 700 Iraqi security personnel killed by insurgents' attacks during the past several months. More than 1,000 U.S. military personnel now fatalities in the war in Iraq.

Very difficult business for everybody. It is going to be very interesting, Wolf, to see how long this attack continues.

If we do see this gunfire subside, it may mean one of two things. Either whoever is launching these attacks has achieved their objective, unsettled everyone and run away, or it may mean that U.S. military personnel and Iraqi security personnel are already moving through the city streets, looking for who's launching the attacks and launching their own counterattacks, trying to find them.

One of the things in this type of breaking situation, this very urban warfare that is unfolding before our eyes, literally, is going to be to see how long it goes on and what else may unfold in the moments ahead. That is going to tell us how successful the coalition security forces are in launching their troops and finding out who is doing this.

BLITZER: All right. This is the scene in Baghdad, Barbara. I'm going to have you stand by, and I'll recap for viewers who are just tuning in from here in the United States, indeed from around the world.

Only within the past few minutes, rocket and heavy machine gunfire resounded. Projectiles whizzed through central Baghdad. Several blasts were heard, followed by heavy gunfire, similar to what would occur in a firefight. Of course, suspected insurgents are -- insurgents suspected of being involved in this attack.

The video that we're seeing and the voice that we're hearing, this video, is that of Brent Sadler, our correspondent. Clearly, was watching this, together with our crew. They were shooting the videotape. And you see those -- the automatic gunfire going along.

The origin, the beginning, was apparently a rocket attack against the central Baghdad Sheraton and Palestine hotels. And as a result, you could see a fire erupting outside one of those hotels as well. Brent Sadler telling the crew to turn off the lights. This is a dangerous situation. When you have gunfire in a situation like this, insurgents or terrorists nearby, the last thing you want is to be in any light whatsoever. To be on television, of course, you to have some light. So that's why you're not seeing Brent Sadler on television right now.

Clearly, much dangerous to turn on a light and get a reporter standing in front of a camera at this point. We are trying to establish satellite phone contact with Brent Sadler and our team in Baghdad. Once we do that, we'll, of course, get him on the air, and he can walk us through precisely what has happened.

But clearly, a serious firefight, a rocket attack against a hotel that houses a lot of foreign journalists, a lot of American journalists, and a lot of defense contractors, workers, Americans and others, who are based in Baghdad, trying to help the interim Iraqi government get some reconstruction programs going, trying to help the U.S. military as well.

We hear about -- a lot about U.S. and coalition forces, military troops in Iraq. There are thousands of contractors who have been brought in from around the world as well. And many of them stay at these hotels in central Baghdad that are deemed to be relatively secure, including this Palestine hotel and the Sheraton hotel.

The situation there being a little bit chaotic. We're going back to these live pictures right now.

Brent Sadler, are you joining us now? Are you available?

SADLER: Yes, I am, Wolf. Sorry -- I had to be off the air for a few minutes. We were caught in the middle of that. Let me just catch you up with what I saw.

I was in front of camera when I saw the first of two rockets, low trajectory, coming from about 500 yards, 600 meters, 700 meters from our position, our live shot position on our hotel here. The first rocket slammed into the side of a hotel that's adjacent to us, the Sheraton hotel. I guess it would be about the second or the third floor, but it might have just hit some archways below room level.

Then there was a second rocket that tore through past our position here. It must have only been a couple of hundred meters or less from me. A tremendous whoosh and slamming into the side of the Sheraton hotel.

We ducked down in case there were more missiles flying our way or to the next-door building. And then there an exchange of gunfire.

Certainly, I know from U.S. positions -- and I'm not going to give them away -- but certainly, machine gunfire came from an American position close by. And from what I could see, from the tracer rounds whizzing past us, they were aiming for the point, the firing point of where those two rockets were launched. What we can see now, fire and ambulance services here. And they're just really several hundred yards away from the hotel itself. There is some concrete barriers that they may have difficulty navigating to actually get to the blast site.

No indication at this stage whether or not there were any injuries in that adjacent hotel. A few months back, the same hotel was targeted by mortars, was hit by mortars, rather, and it was thought those mortars were aimed a few months ago towards the Green Zone. They just clipped the top of the building.

But no doubt, from what I could see in my position here, that those two projectiles, two rockets were directly aimed at the lower part of the Sheraton hotel. And no question whatsoever in my mind that they were aiming for the Green Zone on this occasion. This was a direct attack against the hotel, the Sheraton hotel.

Then fire broke out in the lower areas. Quite possibly palm trees ablaze at first. Fire flame died down pretty quickly.

So that's the situation as I have it right now, Wolf. Certainly a big shakeup. Tremendous explosion by the rockets. Shrapnel flying all over place.

Tremendous heat generated at the moment of impact. Blinding flash, and then a second rocket coming in.

So that's all we have at the moment. Back to you -- Wolf.

BLITZER: And Brent, I just want to recap. You and our entire CNN team, everyone is fine, as -- at the hotel where you're adjacent, you're near the Sheraton hotel, but you were not in the Sheraton hotel, is that right?

SADLER: That's correct, Wolf. These two hotels are side by side. There's a road that splits them.

And the two rockets were fired at the hotel next to us, where other news organizations are located. We have no indication of any casualties next door yet. But certainly some of our TV colleagues are, indeed, based over there, and we wait with some anxiety to find out what has happened on the other side of the street.

I can tell you also that the fire and ambulance services here are gathering. But I'm not really coming to where the hotel is. I guess that's because of the fact the area is under lockdown.

There are U.S. troops in this area, there's a U.S. position in this area that spots the possible attacks into the Green Zone. But this was not an attack directed at the Green Zone.

This was an attack, a double rocket attack -- and there's another explosion there. Not quite sure what that is. Certainly, I don't see any projectiles flying around. But a second blast from the direction, Wolf, of where I saw those two rockets fired from. Now, whether that's a car bomb, whether it's a malfunctioning rocket, I don't know. But again, you heard a terrific thunk then. So pretty unclear as to how this is going to shape up -- Wolf.

BLITZER: And I want you to be very careful, obviously, Brent, from your vantage point. Don't try to get outside, don't do anything that could endanger you or our team. But that loud explosion we just heard a few seconds ago, do you see any smoke rising, or do you see anything that suggests that it was another bombing or a rocket?

SADLER: No. It sounded similar to a car bomb explosion that we had here a few days ago in Sedun Street (ph). This is all happening, I have to tell you, Wolf, easy within my eyesight.

I saw the flash of that explosion. You obviously heard the bang at the same time as I did. I see a glow. It could be a fire just above the tree line from my location over here.

Not had any more machine gunfire. But certainly this is a situation we've not had quite so close and directly aimed that we know for sure at these hotels.

Of course, we know that -- and it's widely known in the city -- that western contractors, western news organizations, are located in what's known as the twin towers here, these two large hotels. One, the Palestine, where I'm speaking to you from, and the other the Sheraton.

Just to repeat, it is the Sheraton, the lower levels of the Sheraton hotel, that was hit by those two rockets within the past 20 minutes or so. I saw the launch, I saw the rockets whoosh by our position.

Balls of fire. The first one hit the lower part, setting, I think, a palm tree on fire. And then just seconds later, maybe 45 seconds later, a second rocket flew past our position here and slammed into the Sheraton hotel -- Wolf.

BLITZER: Brent, the Palestine hotel, as far as you know, was not directly targeted, was it?

SADLER: Not directly targeted on this occasion, no. This was low-level rocket fire. Two of them coming from the same firing point, and then hitting the Sheraton hotel.

And then after that, I could see the tracer rounds of hundreds of rounds, I guess, in a short space of time, machine gunfire, coming from a high position directed down. So a trajectory, a 45-degree trajectory down towards the firing position. At that stage, I was on my stomach crawling for cover as the bullets were flying -- Wolf.

BLITZER: All right, Brent. I'm going to have you stand by for a moment.

I want to recap for viewers who are tuning in around the world to what they're seeing. You're looking at a live picture right now. And this is videotape shot about 25 minutes or so ago from -- in Baghdad.

Rockets, at least two, were directed at the Sheraton hotel in central Baghdad, a hotel that houses a lot of western journalists and contractors in a relatively secure part of central Baghdad. The Sheraton hotel being one of two major hotels, the Palestine being the other, where a lot of journalists and contractors are headquartered.

That rocket attack was followed by machine gunfire, automatic weapon fire, as we can see here in this videotape. And eventually resulting in a fire right outside the Sheraton hotel.

There you see that fire erupting. Apparently near some palm trees outside the Sheraton hotel.

Barbara Starr is our Pentagon correspondent, getting a little bit more information from her monitoring zone.

What are you hearing, Barbara?

STARR: Well, Wolf, officials are continuing to watch this situation and try and secure the area, certainly. But what you're seeing on your TV screen, Wolf, is really the unfolding of an example of what the insurgency is all about on the streets of Baghdad.

Now, Brent Sadler pointed out that it appeared machine gunfire had been returned against insurgent firing positions. This indicates very short range...

BLITZER: Barbara, I'm going to interrupt you. We're now getting this videotape. Our viewers can see it, the first interior shots of the Sheraton hotel.

You see some of the destruction, some of the damage. U.S. troops and other security personnel, together with civilians, just dealing with a rocket attack at the Sheraton hotel. You can see the pictures yourself, Barbara. But I just wanted to alert our viewers what they are now seeing.

STARR: Well, this is really underscoring what the insurgency is all about in Iraq, Wolf. People unsettled, people obviously very scared, very unsettling situation. And that's what the insurgents clearly are after.

This is -- this is low-level combat on the streets of Baghdad at night, close combat, relatively short-ranged rockets, return fire by machine gunfire, all very short range. The insurgents often using the basic shoot-and-scoot tactics, getting out of the way as soon as they fire, disappearing into the night, making it very difficult for security forces and Iraqis to find them. And unsettling certainly not just for westerners but the people of Baghdad, who live in these neighborhoods.

You know, it's -- this is the type of attack that doesn't stop progress in Iraq on the political front. All of those things that we hear about, the elections, the interim government, go ahead. But this is the kind of thing, as you can see tonight, right now, people unsettled, people scared, not knowing if there's going to be another rocket coming their way any minute.

And very difficult for the U.S. to move out into the streets and find these insurgents as soon -- you know, when they fired these short-range weapons, because they're able to just disappear back into the night. Making it a very difficult situation, as we keep saying, for everyone -- Wolf.

BLITZER: All right. Barbara Starr, I'm going to have you stand by, collect some more information over at the Pentagon.

Brent Sadler is our man on the scene in Baghdad. He was an eyewitness to everything that happened as it was happening, including that first rocket or two that was fired at the lower levels of the Sheraton hotel.

Brent, I don't know if you can see this, but we're seeing interior shots now, the lobby of the Sheraton hotel, where there are a lot of people trying to deal with clearly an awful situation.

SADLER: Yes, indeed, Wolf, I'm seeing those pictures. It's a very large lobby area.

Let me just paint the picture a little bit for you. These are very, very large concrete structures, both the Sheraton hotel, where this blast took place, the two rocket attacks, and where we are, in the Palestine hotel. These are very, very well-known buildings and they are very, well constructed.

They were constructed of marble, obviously, and concrete and steel. So these rockets certainly would have shook the outer building, the constructs of the building. But from what I'm seeing on these pictures, and maybe not have penetrated inside the area itself, this looks like perhaps secondary blast damage. We've got no idea of casualties yet.

But I think, just to pick up on what Barbara Starr was saying there, I can confirm that this was -- it must have been a line of site attack. When I saw those two rockets going along their trajectory to the point of impact, they were both following the same track. They were low level, and they had to have been positioned in such a way that those who either set them on timers, or detonated them in situ (ph), must have been able to see what they were aiming at.

This was not the top of the building. This was the bottom of the building. In fact we can confirm it was the third floor of Sheraton Hotel. And that is certainly what we saw in terms of close quarters contact, if you like, when U.S. troops started opening fire.

From what I could see, and I could see the tracer bullets coming right past in front of me, that's when we hit the deck in case return fire came our way. But those tracer rounds were going towards the point of where those rockets were set off from.

So this is line of sight combat between U.S. troops on one side and the insurgents who fired these rockets on the other side. Now, just to get back to that explosion we heard a short time ago when I was on air, we understand from security sources here that that was a controlled explosion, perhaps a third rocket might have been destined to have been fired. But certainly what we understand from our sources, that was a controlled explosion. Perhaps explaining why we see the emergency services that are ringing the Sheraton and Palestine hotels right now, did not react to that explosion.

But it's difficult to say, Wolf. This is -- it's early evening, Baghdad time. I was about to do a live shot in front of the camera and then, whoof! out of the night it comes nowhere. The hotel we're in, everybody starts running around, obviously a degree of panic, guards start picking up machine guns, machine gunfire starts flying around, and this is what just terrifies people who living in the capital.

If it happens once a day, twice a day, twice a week, it is the recurrent danger of living here, of being here. Those two blasts were, what, 200 yards, less maybe, 170 yards from my position. It doesn't take much of a degree and a change of that rocket to have come to our hotel and our position. We're at same level, that third floor, gives you an idea, Wolf, of the dangers that people -- that everybody here faces when these attacks just come out of the night like this.

BLITZER: Now Brent, we still have no information about any casualties any people injured, although we see a lot of dazed, shaken people in these pictures that we have from the lobby of the Sheraton Hotel, people trying to emerge. You see the smoke clearly inside.

But there's no information about anyone who may have been killed or wounded in these blasts. You have no information along those lines, do you, Brent?

SADLER: No, I don't. We're still waiting for information. Those pictures, you can see, people look pretty shocked and dazed. It looks pretty smoky or certainly dusty in the hotel where other news networks are based, and where other Western organizations are also based. The area we're in is pretty well secured in terms of blast- proof walls for suicide car bomb attacks or car bomb attacks, the likes of which we've seen pretty regularly here over the last few weeks.

But this was, let me just reiterate, a rocket attack, a double rocket attack, very close to firing point. I could just about see where that must have come from because I could see the trajectory of the second rocket, because my eyes were already looking to where the first rocket had come from.

And it -- certainly it was not very far from this area. Whether those rockets, as we've seen in the past, were on timers, that remains to be scene. Whether they were loaded into a car, a pickup, that remains to be scene. I'm sure we'll be getting some video from the firing site in the not too distant future.

But just one point I'd like to make, Wolf, it was interesting to see that it took several minutes before the U.S. forces started to respond to this firing of these two rockets. There was no immediate response. They would have used their night scope assets from that high vantage point that they are located on. We see them every day.

And it was a short, sharp burst of machine gunfire over perhaps 60 seconds, 90 seconds, aiming at towards where that firing point was. So obviously from their position they would have been able to see a lot more than I could see. Perhaps they were seeing people running away. Too early to say. I'm just surmising here.

But I'm giving you the circumstances how they unfolded, because it's rare that we see a firing point. The rockets actually in the air at the time and then the detonation in one view, if you like. And then the response -- Wolf.

BLITZER: Brent, what is it now, just after 7:30 p.m. local time in Baghdad?

SADLER: I'm still in the dark here, Wolf, for security purposes. Yes, that's correct.

BLITZER: So it's a seven-hour time difference between the eastern coast of the United States. I know there's deep concern, because I've heard it from top U.S. authorities that with the approach of Ramadan mid-October, given what happened last year around the month of Ramadan, the holy month in Islam, there could be an upsurge of terror insurgent strikes against various targets in Iraq, certainly around the world.

Are Western journalists, Westerners in general, Americans taking more security precautions now in advance of Ramadan?

SADLER: I don't think specifically because of the Ramadan holy month of fasting that's coming up. Generally news organizations and Western companies doing business here still are upgrading and evolving security all the time, Wolf.

We do know that the Iraqi interim government is now engaged in an evolving counter-insurgency offensive. Talks are under way to try and work out the possibility of arms being laid down by Muqtada al-Sadr, that's the militant Shiite cleric in Sadr City on the outskirts Baghdad, to try and peacefully end the violent standoff there.

There are attempts to try and broker some sort of deal to lay down weapons in Fallujah, that wouldn't include Islamists and foreign fighters. A lot of things going on with this government trying to negotiate, trying to use a carrot and stick approach, trying to encourage insurgents to lay down their weapons, get involved in the political process ahead of elections because they know places like Fallujah, Ramadi, other areas know that if they do not work out a deal with the government, then the government has made no secret that in the not-too-distant future military force will be used to regain control of key insurgent areas like Fallujah.

And whenever the government appears to be making some progress, appears to be engaged in contacts with certain sectors of the resistance, of the insurgency, then it has not been unusual to see the kind of attack we've seen here that really is an audacious attack close in, against a known hotel that's used by a lot of Westerners, that's protected by U.S. troops, also protected by a security company, an agency that's contracted to the U.S. military, and to fire two rockets at close quarters at these times show that the insurgents have the capacity to strike back and to cause mayhem and to create fear under these conditions -- Wolf.

BLITZER: I'm going to have you stand by, Brent, for a moment. I want to bring in our Ken Robinson, our national security analyst. He's on the phone, he's watching all of this with us and he has got a perspective given his military background.

Just to recap, Ken, at least two rockets were fired at a low level of the Sheraton Hotel in central Baghdad, what was deemed a relatively secure area. You heard Brent Sadler say this was a line of sight attack and it has clearly caused some damage, although we have no information about casualties.

Ken, what goes through your mind?

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Well, really we could take a transcript of everything Brent just said and it would make a perfect wire because he has touched on every key point. It's unknown right who the sponsors of this attack are.

There are multiple groups there in Iraq that could do this. It's problematic...

(AUDIO GAP)

ROBINSON: ... that an area this secure could be targeted with one of these types of attacks. As you know, these terrorist groups, whether they be Shiite, Sunni or Ansar al-Islam, or Zarqawi's group, they all have been using improvised explosive devices which they have, as Brent said, on timers. They use detonations through cell phones, beepers, garage door openers.

So there's no way to know, whether to be able do counter-fire against a site, whether there's actually any insurgents left there. Many times the coalition is forced to have do direct fire because if they use their counter-battery radar and counter-battery fire there may be collateral damage.

So because the insurgents get up with the population and get close in, it reduces the amount of options that the U.S. forces have. The great dynamic that Brent mentioned, which is very important about how the U.S. coalition is trying to take some success from Afghanistan, disarming, demobilizing and reintegration of tribal warlords in those areas and trying to use that template here in Iraq, we don't know whether that's going to work or not.

But the grand ayatollah, al-Sistani, is certainly working hard with the Allawi government and with Sadr's forces to try to make that a reality. The big question is, it's the Sunnis who are going to be disenfranchised by an election that doesn't include their cities because their cities are still ungovernable and how they'll react to that disenfranchisement.

BLITZER: You know, Ken, as I look at these pictures of the lobby of the Sheraton Hotel and people escaping, you can see the dust and the smoke, if you will. Clearly the rocket penetrated this building. Windows shattered, blown out as a result of the double rocket attack that Brent Sadler described and the subsequent fire that broke out outside the Sheraton Hotel.

It suggests, given the nature of the target, that there was not only a desire to score some casualties, if you will, and cause some damage, but a political statement. It looks like whoever did this, the insurgents, the terrorists, were trying to score a political statement given the nature of who occupies the Sheraton Hotel.

ROBINSON: You're absolutely right. Terrorism is theater. And this is now theater on a grand scale because the images are going -- one rocket bought them images all around the world on everyone's televisions.

When you and I were looking at the security in Kuwait, in the hotels we were in prior to the invasion of Iraq, we had articulated and discussed these same concerns because the media is not -- you know, in the 21st Century, we're a target just equally as well as the nongovernmental organizations, as was seen recently with the kidnapping of our correspondent in Gaza.

BLITZER: There is no doubt that a political statement was attempted to be made here, and a political statement has been made although at this point we have no information of any specific group claiming responsibility for this double rocket attack at the Sheraton Hotel.

We have no information about casualties, although as our Brent Sadler reported, ambulances and emergency vehicles are in the area together with military and security personnel dealing with a direct, bold, double rocket attack at the lower levels of the Sheraton Hotel, a building that houses a lot of American journalists, foreign journalists, Western journalists, and contractors who have been brought in to support the U.S. and coalition forces, the interim Iraqi government engaged in all sorts of activities from security to reconstruction.

Pretty dramatic pictures that we've even. It has been about 40 minutes or so since this story erupted with we saw it virtually live here on CNN, a story that hits home, hits very close to all of us given the fact that our colleagues, including Brent Sadler and our CNN team, is there at the -- next door to the Sheraton Hotel at the Palestine Hotel.

Brent, you're still with us. Give us -- set the scene for us, where you are, your vantage point, as best you can, how dangerous, how ominous the situation still appears to be right now.

SADLER: Wolf, it's calmed down substantially in the last 20 minutes or so. To give you an idea of where I am, I am just about at eye level with the third floor of where those rockets blasted, slammed into the side of the Sheraton Hotel.

So it was at my level, that's why I got such a close look at these rockets as they flew past our position. So I turned my head. I could hear the whoosh of the first rocket, turned my head before the impact, saw the impact on the side of the hotel, saw the tremendous heat that's generated and the flash and heard shrapnel landing in the road not far from me, the road that divides the two hotels.

And so I couldn't get much closer to where this happened if you tried. Obviously the second rocket, I was looking in the direction of where the first rocket came, saw that come, as I say, a line of sight attack into the hotel.

And then this exchange of fire from U.S. troops at a high position overlooking this area. So it would have seemed that the rocket, the first one at least, detonated on the outside, the outer skin of the concrete of the hotel. Whether it penetrated inside or just shook the inside and the glass was smashed by the blast effect, it's still too early to say.

I don't know if any of those rocket penetrated the hotel. But certainly there were tremendous blasts and certainly they were aimed at the hotel. And what Ken was saying there, political statement, absolutely.

This is one of the most secure areas in the city outside the Green Zone. The Green Zone is just the other side of the river from where we are, the river Tigris. And we see that. So yes, this was as close as I'd like to be to something like this -- Wolf.

BLITZER: All right, you were a little bit too close as far as I'm concerned, Brent. Stand by for a moment.

Brent was reporting -- and just a little while ago, while he was reporting, we heard a loud explosion. And he reported it was what's being called a "controlled explosion." There was something deliberately done by U.S. forces or Iraqi security personnel dealing with the threat.

There you heard it right there, a controlled explosion. We are told, and I want to alert viewers, and Brent Sadler and everyone else, that there probably will be another so-called controlled explosion coming up soon. Usually what this means is that a suspicious area is blown up by U.S. or Iraqi forces deliberately because that would be the best way of dealing with some sort of situation without allowing it to continue and blow up and cause some serious damage. So they go in and blow it up themselves.

Barbara Starr is at the Pentagon, our Pentagon correspondent. Are you getting some more information over there on who might be responsible for this attack?

STARR: Well, Wolf, officials here continue to watch this. And of course, they have no idea at the moment, as you would expect, exactly who caused this attack tonight on the streets of Baghdad. But what it is underscoring, once again, is the concern about exactly who these insurgents are.

Now there has been a growing feeling amongst the U.S. military that the insurgency they are dealing with has perhaps in recent weeks become more of an insurgency of so-called former regime loyalists, Iraqis, Baathists, whatever you want to call them, people who are against the U.S. military presence, the coalition military presence, people who are Iraqis.

We had heard so much about the so-called foreign fighters. The most recent assessment is that the foreign fighters may number in the hundreds and that they are dealing with those when and where they find them.

The issue of an Iraqi, homegrown insurgency, if you will, something quite different. Tonight, demonstrating the ability of the insurgents, as they exist in Baghdad, to cause mayhem, as Brent Sadler says, and to shoot, cause panic, and then melt away.

This is becoming part of the dilemma for the U.S. counter- insurgency that we've seen over recent days in Samarra, in Sadr City, south of Baghdad where the U.S. and Iraqi forces are moving in and trying to retake local control.

Because when they achieve a success, as they have in Samarra, what is not clear by anybody's account is whether or not they have dealt with the insurgency or the insurgents have, again, gone away, run away, if you will, and regrouping to fight another day. That's what they're facing in Fallujah. That's what they're facing in all of the areas that they plan to move into in the weeks ahead and try and reassert local control.

Are the insurgents defeated or are they just running away and regrouping? And of course the second part of that, as they try and achieve these successes, will the Iraqi security forces really be able to hold ground, if you will, over the long term? They've got them in now in Samarra, for example. Will they be able to maintain control over the city? Will they be able to have these Iraqi security forces in the weeks ahead move into the much more difficult insurgent areas such as Fallujah, west of Baghdad?

All of this remains to be seen. But it's the central part of the Bush administration's Iraq strategy now. Get into these insurgency areas, deal with the insurgency and get Iraqi security forces in.

Tonight's attack showing very difficult to figure out exactly who the insurgents may be -- Wolf.

BLITZER: All right, Barbara, I'm going to have you stand by as well. These flashing lights, these vehicles that we're seeing we're told part of an explosive ordnance unit that has been brought to the scene. This an area that is supposedly relatively secure in central Baghdad, not all that secure clearly right now.

The word relative is an important word because there are probably no areas in Baghdad, even inside the so-called Green Zone, and this is not inside the green zone that are completely secure. We've seen rockets fired inside the Green Zone, that are completely secure.

We've seen rockets fired inside the Green Zone from outside the area. But we do see these vehicles moving in. Some of these explosive ordnance units going in to check out suspicious areas to make sure there are no secondary explosions as a result of this attack against the Sheraton Hotel.

Brent Sadler was there from the beginning. He's watching it. He's still watching the situation. He's once again joining us live from the scene.

You say it's calmed done a bit, Brent?

SADLER: Yes, Wolf. What we're seeing now, American armor, Bradley fighting vehicles and humvees taking up positions between the two hotels, the Sheraton that was hit and the Palestine where I'm speaking to you from, that was not hit.

We're still seeing flashing lights, blue and red lights of emergency services. But certainly the situation calm compared to what it was some 45, 50 minutes ago. The U.S. forces clearly looking to secure this area, showing presence in the aftermath of these two attacks.

Just to recap what I saw, Wolf, two rockets, I saw the first one fly past our live shot position just as I was about to go on air. There was a tremendous explosion. A loud explosion, it shook me from my position. It hit the Sheraton Hotel; and then within 30, 40 seconds, a second rocket came through.

You heard me saying, lights off, lights off. Then you'll hear this gunfire, by which time I was on the floor, along with my cameramen, because there was firing, machine gun firing, tracers bullets going past our position, heading toward the firing point of those two rockets.

Now, the rockets were low trajectory. I would say certainly line of sight, hit the third floor of the Sheraton, and we've seen pictures from inside the hotel of damage, of dust, of people looking bewildered, people moving out, and obviously shocked by the double rocket attack -- Wolf.

BLITZER: And, Brent, right now, the whole area, I assume, is trying -- they're trying to secure the entire area around the Sheraton Hotel, around the Palestine Hotel, this area that houses so many Western journalists and foreign contractors who have been brought into Iraq for various missions.

Under normal circumstances, and the word normal I understand is not necessarily an appropriate word, but under normal circumstances, let's say, two, three hours ago, had you ventured out of your hotel, the Palestine Hotel, to walk over to the Sheraton Hotel, would that have been a big deal?

SADLER: Let me set the scene for this day, Wolf. I saw the minister of water, actually had lunch with him at the ministry. He was very proud show me his new ministry that had been rebuilt. It had been looting and badly burned after the war. We were having lunched. He looked out of the window, showed me where Sadr City was, then he heard reports that a rocket had landed in the green zone, and he was concerned about his colleagues inside the green zone.

We were talking about the fact that the Russian roulette, if you like, that people play every day here. We go there to that location in an armored vehicle. I came back here. It seems calm. You start to feel a little bit more secure that perhaps it's not as bad as it seems. Not all of Iraq is being shaken by rockets, by mortars. In fact, once you get out of these areas, you feel perhaps you're suffering from some sort of bunker mental syndrome. And then you get a reality check, like I had 50 minutes ago, two rockets within and 100, 200 meters, passing right by me, their tails bright orange, and thing, bang, the explosion.

You know, this is the reality of life here. And this is what Iraqis are having to put up with every day. One moment you feel perhaps it's a little better, because you've heard nothing bad for a while, you've not seen it, it's not affecting your immediate zone of operation. But then, all of a sudden, it comes out of no where and you have to recalibrate now how you feel about your own safety again -- Wolf.

BLITZER: Well, this clearly will shake up a lot of the people at the Palestine Hotel, at the Sheraton hotel, indeed, I would venture to say around Baghdad, an area that is a central part of Baghdad, not only the green zone, but outside the green zone, that is relatively secure.

There are whole parts of Baghdad itself, as we discussed yesterday, Brent, especially Sadr City, the neighborhood controlled by a lot of the radical Shiite areas, the so-called slum areas of Baghdad, that are even more dangerous for Western journalists and other Westerners, isn't that right?

SADLER: Absolutely right, Wolf. Effectively, most if not all of us, particularly in the television world, are under a lockdown situation. We rarely go to places other than the green zone or ministries or places where there is security. I mean, that's part and parcel of our life these days, for, you know, free enterprise reporting in Sadr City, or Fallujah or Ramadi for Westerners has been a no-go for sometime, and that makes reporting the story all the more difficult.

I think in terms of what you see here now, when you hear, or you heard rather, you'll recall, Prime Minister Ayad Allawi in Washington talking about how Iraq is succeeding, there's a long way to go, but Iraqi is succeeding, it only takes two rockets, as we've seen in the past hour, to be fired at two high-profile targets, where there are a lot of Westerners located, including journalists, to grab the headlines and to shake up the impression that Iraq, in the words of the prime minister Ayad Allawi, is succeeding. Because how, people ask, can Iraq be succeeding when this kind of headline decimates any other forms of progress that are being made in this country? BLITZER: Brent, how -- what are U.S. officials on the ground from the Ambassador John Negroponte on down, as well as U.S. military commanders and Iraqi leaders saying? How is it possible that they really realistically think that free and fair elections throughout all of Iraq can take place at the end of January, given the security situation that currently exists? In other words, do they think they can improve the situation so rapidly between now and the end of January that people will be able to go out and vote?

SADLER: Several aspects of that, Wolf. Let me try and walk you through it. First and foremost, this counterinsurgency offensive, we saw it in Samarra last weekend. Samarra now under the control of the interim government, the Iraqi police and the Iraqi army. Another operation going on, we don't hear too much about it at the moment, but it is going on, south of Baghdad in another uncontrolled area that is a conduit for insurgent activity, south of the capital to -- linking to the Ramadi, the Fallujah area and the Sunni Triangle.

Now if political contacts to try and get some insurgent groups, by no means all, to lay down some weapons without a bloody battle to take Fallujah and Ramadi, that would be a positive step. There's a long way to go before any deals are done, if indeed they can be done. And it's very doubtful, in the minds of many, both American and Iraqi officials that deals can be done. Sadr City is a deal that might be done, but that's a separate issue from Islamic fighters, from foreign fighters and from the insurgent actions we're seeing the like of which just happened in the past hour.

What will happen between now and elections? Well, if there's no deal, then there will be almost certainly a strong military offensive led by the United States to change the dynamics of what's happening, the terror, the kind of terror, that is being exported, they say, from Fallujah, specifically Fallujah. That is the big one. That's the big nut for them to crack. And it is from Fallujah that these kind of operations, car bomb attacks, suicide bomb attacks, mortar attacks, and the kind of rocket attack we saw here a short time ago are being planned and being are implemented. That's why were we're seeing sustained air activity ahead of a possible offensive against Fallujah.

Now what's going to happen between now and the end of January for those planned elections? Well, many Iraqi officials I speak to, and some I speak to in the presence of U.S. officials here, you know, say, unless we can really deliver a killer blow against these areas, then stability is still going to be part and parcel of the election process. How high it is or how low it is, no one can say at this stage. But the fact of the matter is that insurgent activity or terror activity from the likes of Abu Musab Al Zarqawi, the most wanted terror suspect in Iraq, are expected to be still going on at some level or another.

And the important thing is, what will change after the elections in terms of the security? Not much, say Iraqi officials, which is why you're hearing them, particularly recently, from the President Ghazi al-Yawer down, who I interviewed, saying that Iraqis the interim government cannot have the elections rammed down their throat to fit a timetable at the end of January, because the elections process itself is more important than meeting a deadline at the end of January.

So, yes, they want elections, but if it has to change, because of deteriorating security or a security that's not improved from what they're seeing today, then there's nothing wrong with delaying elections. That's what some Iraqi leaders are saying openly. Now that flies in the face of what U.S. officials would like to see here.

And certainly flies in the face of what Prime Minister Ayad Allawi says, including in an interview he gave us only a couple weeks ago when he was in the United States. He was very, very confident that those elections would take place.

Brent, for the elections to take place, you also need United Nations observers, monitors to come in to make sure the elections are free and fair. There's only a few of them there now, but given the security situation, including what's happened over the past hour in Baghdad, it might make it more difficult for those kinds of hundreds, if not thousands, of U.N. personnel from around the world to want to come in to Baghdad to monitor this situation.

SADLER: Absolutely right, Wolf. Where do you accommodate these observers? Where do you give them security? How do they get about to monitor such an election? These are the kind of fundamental problems that of course the United Nations and the Secretary-General Kofi Annan are most concerned about. The United Nations, in effect, was blasted out of here by an awful, terrible car bomb that killed the top U.N. representative here in Iraq. How to hold elections when insurgents can still put a car bomb, can still fire rockets, drop mortars into areas as secure, supposedly, as the one we are in now -- Wolf.

BLITZER: Brent Sadler is going to stay on the scene for us. He's been there throughout the beginning. It's been almost an hour since we saw literally on videotape. He saw it live, two rockets launched at the Sheraton Hotel.

We're going to continue to monitor this situation, but I want to hand our coverage over right now to our "LIVE FROM" team. Kyra Phillips, Miles O'Brien standing by to pick up our coverage.

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