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CNN Live At Daybreak

Ominous Find as Coalition Forces Search Door to Door in Falluja; Clinton Library Opens Today

Aired November 18, 2004 - 05:00   ET

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

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


CAROL COSTELLO, CNN ANCHOR: An ominous find as coalition forces search door to door in Falluja.
The Clinton Library -- the bridge into the 21st century. It opens today, that presidential library.

And can counting calories actually add years to your life?

It is Thursday and you are watching DAYBREAK.

And good morning to you.

Thank you for waking up with us.

I'm Carol Costello here in New York.

Chad Myers is down in Atlanta.

But let's check the headlines right now.

Secretary of State Colin Powell is raising more nuclear worries about Iran. Powell says intelligence suggests Iran is trying to adapt its missiles so that they would be capable of carrying nuclear weapons.

New violence in Baghdad this morning. A car bomb goes off outside of a police station in western Baghdad, killing two civilians. In the meantime, Iraqi forces have launched an offensive in central Baghdad, targeting insurgents and their weapons caches.

There might be some changes in store for your airport. Starting today, airports can replace federal baggage screeners with private workers. Airports have gone to an all government workforce after 9/11.

From his successes to his scandals, Bill Clinton's presidential library covers it all. The library opens to the public this morning in Little Rock, Arkansas. President Bush will attend the grand opening, along with a lot of other presidents, former and present presidents -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Yes.

Did you hear, they're asking all residents of Little Rock to keep their rifles at home today? It is hunting season and people typically may leave their, especially in a lock box in the back of a pickup. You may have a rifle in there because you can go hunting before or after working. They're asking people please leave your hunting rifles at home today.

COSTELLO: A good idea since there will be many, many Secret Service people there today.

MYERS: Yes. You would not want to end up in the clink this morning or this afternoon.

Good morning, Carol. ;

(WEATHER REPORT)

COSTELLO: The Clinton Presidential Library opens today with a star-studded dedication ceremony. The library chronicles the highlights and the lowlights of the Clinton years in the White House, ranging from peace efforts to scandal and impeachment.

CNN's Keith Oppenheim has a preview for you.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: This library, in a way, is bigger than life. There's no doubt about that.

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): Like the politician it portrays, the William J. Clinton Presidential Library has a flare for the dramatic. The architecture, meant to mirror the idea of a bridge to the 21st century, has been lauded and lampooned.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And the London "Economist," in typical snide form, compared it to a glorified house trailer. And I thought well, that's me. I'm a little red and a little blue.

OPPENHEIM: Inside, a museum time line, putting the Clinton years in the context of the news and putting controversy, such as the impeachment hearings, in the context of what the museum describes as the politics of persecution.

CONNIE FAILS, DIRECTOR, CLINTON MUSEUM STORE: It's not just a static place where we come to worship the guy who was in office for us. It's a place of active education and community that's going to go on.

OPPENHEIM: Indeed, next to the museum is the new Clinton School of Public Service. Behind that, the archive building, where 80 million documents are stored. Down the street, a Clinton Museum store and a revitalized river market district. For Little Rock, this complex is expected to bolster tourism and build the city's identity.

CHERYL FOX, PINE BLUFF, ARKANSAS: I'm really proud that he feels like he wanted to leave these roots in Arkansas and not put his library somewhere else.

(END VIDEO TAPE) COSTELLO: That was Keith Oppenheim reporting.

You saw the Clinton library building. You saw it there. Some say it -- well, some say it looks like a double wide mobile home. We wanted to know what you think. Is that too harsh? Boy, that was harsh, wasn't it?

Our e-mail question this morning, the Clinton Library -- do you love it, do you hate it, do you want to visit it? Oh, please e-mail us at daybreak@cnn.com because I think your responses will be very interesting this morning.

Coming up in the next hour, we'll talk with the director of the grand opening of the Clinton Presidential Library. So be sure to tune in for that in our 6:00 hour. And stay with CNN throughout the day for coverage of the library's dedication ceremony.

U.S. and Iraqi forces are searching house to house in Falluja and they have made some ominous discoveries this morning.

Jane Arraf is embedded with some U.S. troops in Falluja, with the Army.

She joins us now with what they found -- good morning, Jane.

JANE ARRAF, CNN CORRESPONDENT: Good morning, Carol.

U.S. forces going door to door, breaking down doors, have found what they believe is a car bomb making factory, as well as a house that appears to be linked to two lieutenants from Abu Musab al- Zarqawi's organization.

Now, we've been taken to a series of houses in the southeast of Falluja. These houses have had bombs dropped near them. Around them are dead fighters and inside, U.S. and Iraqi forces described to us documents, one of them a letter signed by Abu Musab al-Zarqawi, the Jordanian born wanted fugitive responsible for some of -- who has claimed responsibility for some of the deadliest violence in Iraq.

This is a letter instructing some of his lieutenants as to what to do. Other letters are to Abu Musab and on the wall, as we were led into this house, there was the symbol of al Qaeda, believed to be a link between Abu Musab al-Zarqawi and al Qaeda.

These lieutenants were believed responsible for their area of the city. And in the industrial section, a bomb making facility that had an American Suburban vehicle, licensed in Texas. It was in the process of having the insides pulled out and nearby were explosives, chemicals, everything needed to make a gigantic car bomb -- Carol.

COSTELLO: Oh, just so, so fascinating, Jane.

I have a couple of questions.

Somehow it's odd to me that Zarqawi would be sending letters and leaving behind written documentation, so to speak. Did that surprise the troops that found this stuff?

ARRAF: Toward the end, certainly, that would have been the way they communicated. The U.S. has been able to quite successfully intercept a lot of the signal information, the telephone conversations, the other electronic conversations. They did rely on letters, Carol. And interestingly enough, at some of these houses we found bicycles, which U.S. forces tell us were used to ferry messages back and forth when they did not want those messages to be intercepted. A lot of the communication was, indeed, apparently in writing.

COSTELLO: And the other intriguing thing you say was about this car licensed in Texas.

Can you tell us more about that?

ARRAF: It's a similar kind to the kind used by American contractors here, contractors to the American military. Not clear whether it was stolen from a contractor or whether it was simply a brand new American vehicle purchased for that purpose. But it was sitting in a warehouse just inside where chemicals of the kind used in the Oklahoma City bombing, bags and bags of them. And this was a virtual factory. There were car parts from other cars that we were told had been dismantled, the sides taken out, the windshield wiper mechanisms taken out, for instance, so that they could pack the hood and pack the sides with explosives.

It appeared to be part of a complex of several such factories in this industrial area -- Carol.

COSTELLO: A final question for you, Jane.

These lieutenants that supposedly lived inside of this house, any word on whether they escaped, whether they were killed in the fighting?

ARRAF: There were some bodies still there and the situation is such that this area is just littered with bodies. There -- it's been a week now, so you can imagine the state they're in. But U.S. military officials, including intelligence experts, are going around trying to retrieve documents, trying to figure out who they are.

It's not clear whether these two, who identify themselves with pseudonyms written on the walls and written in the letters, escaped or whether they are among the dead. That part does not appear to have been determined yet.

COSTELLO: Great work.

Jane Arraf reporting live from Falluja this morning.

More on Falluja coming up in our "War Room" segments.

Our senior international editor David Clinch will join us in the next half hour of DAYBREAK. We'll get the latest on the casualty count. We'll find out if civilians are safe as they start to return home and we'll look at the desperate need now for humanitarian aid.

In news across America this morning, Scott Peterson's lawyer wants a change of venue and a new jury in the penalty phase of his trial. Peterson was convicted last Friday of killing his wife and their unborn child. He could be sentenced to death of life in prison. The penalty phase of the trial scheduled to begin on Monday.

More legal trouble for Michael Jackson. A former producer and business associate is suing the pop singer for breach of contract. The suit claims Jackson owes him more than $2 million in loans and producing fees.

Kobe Bryant may be questioned under oath next month about his encounter with the Colorado woman who accuses him of rape. The questioning would be part of her civil lawsuit against the basketball star. During a hearing yesterday, lawyers listened to potential witnesses they want to question or depose. No trial date has been set.

And here's what we've got coming up later this hour.

Life after Yasser Arafat -- we'll get a long time peacemaker's take on what the future holds for the Middle East. That's at 15 minutes past.

And later, tensions over Iraq may cloud a high profile summit across the pond. A live report for you at 31 minutes after the hour.

And finally, eat less and live longer? Some dieters hope they've found their fountain of youth. That's at 51 minutes past.

But first, here's a look at what else is making news this Thursday morning, November 18.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

COSTELLO: Your news, money, weather and sports.

It is 5:13 Eastern time.

Here's what's all new this morning.

My clip on my microphone broke, so that's why I'm holding it, just so you know.

But let's go on with the news right now. We'll get it taken care of.

Terror related finds in Falluja. Iraqi officials say U.S. troops found what seems to be a terrorist safe house. They also found two letters inside. Both involved terror leader Abu Musab al-Zarqawi.

Police in Boynton Beach, Florida say one of their officers improperly used a taser. The officer has quit after an internal probe found he lied about using the electric stun gun on a handcuffed man.

In money news, the Chrysler 300, it's "Motor Trend" magazine's car of the year for 2005. The sedan's been popular with a wide range of buyers, from rappers to grandmothers.

In culture, another hot vehicle. "People" magazine is naming Jude Law the sexiest man alive. The British actor currently stars as the lovable cad, if there is such a thing, "Alfie."

In sports, Shaquille O'Neal has a season high 26 points and Eddie Jones had 27, as the Miami Heat beat the Milwaukee Bucks for the second time in four days.

To the forecast center and Chad.

MYERS: So, Carol, you're up in New York three days and you've already broken something.

COSTELLO: I know. The clip on my microphone broke. It won't stay on my jacket.

MYERS: We'll get a little solder out there for you. Just hold on. I'll do some weather here.

COSTELLO: OK.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

It has been a week since Yasser Arafat's death, far too soon to say what effect it will have on the Middle East peace process. But one person who knows the situation as well as anyone is Terje Larson, who spent seven years as the U.N.'s Middle East peace envoy.

He sat down with our chief international correspondent Christiane Amanpour to offer his perspective.

Christiane joins us live now.

Christiane, is he hopeful?

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Yes and no. He is mostly hopeful because he says, like many, that this passing of Yasser Arafat presents an opportunity. He also, though, thinks that it could be a very bloody period, if it's not handled right, between now and when the Palestinians have to hold an election.

But he's hopeful because President Bush last week, with Prime Minister Blair of Britain, again reaffirmed a commitment to reinvigorate and reenter the Arab-Israeli peace effort. And that, Terje Larson believes, is absolutely essential, because he thinks, like so many people, that actually nothing can be done of any positive use if the Americans aren't fully four square involved and behind it.

So I asked him about Colin Powell, the secretary of state, who is coming to the region. He will be in Egypt, Sharm-el-Sheikh and in Jerusalem to meet with Palestinians and Israelis and also to meet with the people who are basically in charge of the so-called road map, the Palestinian-Israeli peace proposal, the peace plan.

I asked him even though Secretary Powell is on the way out and will be replaced by Condoleezza Rice, would that have an effect on his diplomacy next week.

(BEGIN VIDEO CLIP)

TERJE ROED-LARSON, U.N. MIDEAST ENVOY: Secretary Powell is widely respected by all parties concerned. He has done a wonderful job within the quartet working with his partners there. And I don't think at all that he will be a lame duck when he comes to the region within the next few days. Quite the contrary, I think the new opportunities which are there, I think he can work every effectively in bringing that potential forward into new and positive realities.

(END VIDEO CLIP)

AMANPOUR: Terje Larson, like so many people in the region, including the Palestinians, the Europeans, the Russians and others, are really hoping that the U.S. will seriously get involved, because they point to the last, you know, four years of essential freefall and how the situation has just spiraled pretty much out of control.

(BEGIN VIDEO CLIP)

ROED-LARSON: Throughout this illness, I stayed in very close touch with the key players. And when he left Ramallah, I felt, sadly, pretty confident that he would not return alive, because the reports of his illness was it was all apparent that he was very critically ill and that this could probably, within the next few weeks, bring him to the end.

(END VIDEO CLIP)

AMANPOUR: That was Terje Larson talking about Yasser Arafat while he was on his deathbed in France. And I asked him that question because, if you remember, during the two weeks that he was lying in a Paris hospital room, there was quite a lot of spin emanating from officials in Paris that, in fact, he was improving and was simply just exhausted and may, in fact, return, until we heard at the last that, in fact, he was in a final coma.

But Terje Larson said that he knew, and many people in the region knew, that the minute Arafat had left Ramallah at the end of October, he wasn't coming back. And at that point, they started to implement the post-Arafat era, the post-Arafat sort of political transition.

And he said to me that one of the biggest mistakes that Arafat had made was really resorting to that armed intifada starting in the year 2000, after the failure of the Camp David conference that was hosted by President Clinton then in the United States, in the summer of 2000.

This is what Larson had to say about Arafat's reaction to that.

(BEGIN VIDEO CLIP)

ROED-LARSON: The Palestinians walked down, not all of them, but some of them, particularly certain groups, walked down a path of terrorism and violence and they, I think they ended up in a cul-de- sac. And I think that Arafat, at the end of his life, realized very much that this was a mistake and that he had walked into a dead end road.

(END VIDEO CLIP)

AMANPOUR: Carol, he basically told us that that four year armed intifada was the biggest strategic mistake that the Palestinian leadership had made in their entire political struggle for an independent state. But he did also say that at this moment, it's not just the Palestinians who have to be imposed upon to reign in terror and to move forward in a democratic way, but also the Israelis must be brought to understand that they must also do what they have to do under their obligations of the road map, stop the settlements and basically try to help move the whole process forward. And only the U.S. can help them do that -- Carol.

COSTELLO: And I'm sure you'll have much more on this throughout the day here on CNN.

Christiane Amanpour live on DAYBREAK this morning.

Thank you.

Still to come this morning, a lot of people are talking about that racy "Monday Night Football" ad. Actually, has Jacques Chirac arrived in Britain? We're going to take -- all right, there we go. This is a live shot of London you're seeing right now. Jacques Chirac is expected to arrive in Britain shortly. You see the honor guard preparing for his arrival. Of course, he's going to meet with Tony Blair for their yearly summit, trying to repair relations between the two countries. And, of course, the United States will be talked about, as well, not so positively from Jacques Chirac; positively from Tony Blair.

When all of this gets under way, of course, we'll take you back out there live.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

COSTELLO: Oh, do you need a laugh right now? Because I know that I do.

So, Chad, I know that you're going to provide us one big guffaw this morning.

MYERS: You know, all of the "Late Night Laughs," they were kind of centered on a couple of things. We had Kmart and the Sears merger and what that did, obviously, for Martha Stewart. Can you believe any of that?

COSTELLO: Yes, well, here's Jay Leno's take on it.

((BEGIN VIDEO CLIP FROM "THE TONIGHT SHOW WITH JAY LENO," COURTESY NBC)

JAY LENO, HOST: Discount retailer Kmart has announced plans to join forces with Sears. Kmart has bought Sears. Their goal? To create the crappiest department store ever made (UNINTELLIGIBLE). The total value of the deal, $125. Kmart buying Sears. So that's -- so that means Martha Stewart's products will now be sold in two stores she wouldn't be caught dead in.

(END VIDEO CLIP)

MYERS: Next it'll be Wal-Mart.

COSTELLO: Yes.

MYERS: Do you know she made $32 million yesterday on that stock increase?

COSTELLO: And she's in jail.

MYERS: Right. What better place?

COSTELLO: You know, no place but America. Oh, well, maybe that's not true either.

You know, the shame of it all? We were talking about this thing with "Monday Night Football" yesterday.

MYERS: Tongues are still going crazy over this thing.

COSTELLO: Like Terrell Owens and Nicollette Sheridan in the locker room, you know that thing?

MYERS: Yes.

COSTELLO: Well, ABC has apologized for their racy opening to "Monday Night Football." But tongues are still wagging over it.

In case you missed it, as I said, Nicollette Sheridan of the hit show "Desperate Housewives" drops her towel -- there it is -- and completes a pass, so to speak, to Philadelphia Eagles' receiver Terrell Owens.

(BEGIN VIDEO CLIP)

NICOLLETTE SHERIDAN, ACTRESS:. Oh my god.

TERRELL OWENS, PHILADELPHIA EAGLES: I don't know how my acting skills were, but, you know, I can't play football forever so, you know, I'm trying to work on the Hollywood thing.

QUESTION: She wasn't really naked, was she? OWENS: I'm not telling.

(END VIDEO CLIP)

MYERS: She sure didn't look like she had any clothes on to me.

COSTELLO: I'm sure she had things in strategic places.

MYERS: Don't go there, Carol.

COSTELLO: Well, he doesn't seem...

MYERS: Let it alone.

COSTELLO: You know, nobody asked him if he was upset by this or whether it should be run on "Monday Night Football." But I guess that wasn't foremost in his mind.

MYERS: I think it was a plan. I think they apologized even before they got in trouble to make more trouble.

COSTELLO: You think so?

MYERS: I think they made more...

COSTELLO: What if the FCC fines them big time? Then they'll be sorry for that, don't you think?

MYERS: What is big time? A hundred thousand dollars? Two million dollars? Five million dollars? All this press it got for free?

COSTELLO: That's true, because "Monday Night Football" ratings have been suffering.

All right, here's what's all new in the next half hour of DAYBREAK.

A hometown boy makes good and his high school band is invited to the party. We will show you who will be jazzing things up today when the Clinton Presidential Library opens up.

From New York and Atlanta, this is DAYBREAK for a Thursday morning.

(COMMERCIAL BREAK)

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 November 18, 2004 - 05:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: An ominous find as coalition forces search door to door in Falluja.
The Clinton Library -- the bridge into the 21st century. It opens today, that presidential library.

And can counting calories actually add years to your life?

It is Thursday and you are watching DAYBREAK.

And good morning to you.

Thank you for waking up with us.

I'm Carol Costello here in New York.

Chad Myers is down in Atlanta.

But let's check the headlines right now.

Secretary of State Colin Powell is raising more nuclear worries about Iran. Powell says intelligence suggests Iran is trying to adapt its missiles so that they would be capable of carrying nuclear weapons.

New violence in Baghdad this morning. A car bomb goes off outside of a police station in western Baghdad, killing two civilians. In the meantime, Iraqi forces have launched an offensive in central Baghdad, targeting insurgents and their weapons caches.

There might be some changes in store for your airport. Starting today, airports can replace federal baggage screeners with private workers. Airports have gone to an all government workforce after 9/11.

From his successes to his scandals, Bill Clinton's presidential library covers it all. The library opens to the public this morning in Little Rock, Arkansas. President Bush will attend the grand opening, along with a lot of other presidents, former and present presidents -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Yes.

Did you hear, they're asking all residents of Little Rock to keep their rifles at home today? It is hunting season and people typically may leave their, especially in a lock box in the back of a pickup. You may have a rifle in there because you can go hunting before or after working. They're asking people please leave your hunting rifles at home today.

COSTELLO: A good idea since there will be many, many Secret Service people there today.

MYERS: Yes. You would not want to end up in the clink this morning or this afternoon.

Good morning, Carol. ;

(WEATHER REPORT)

COSTELLO: The Clinton Presidential Library opens today with a star-studded dedication ceremony. The library chronicles the highlights and the lowlights of the Clinton years in the White House, ranging from peace efforts to scandal and impeachment.

CNN's Keith Oppenheim has a preview for you.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: This library, in a way, is bigger than life. There's no doubt about that.

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): Like the politician it portrays, the William J. Clinton Presidential Library has a flare for the dramatic. The architecture, meant to mirror the idea of a bridge to the 21st century, has been lauded and lampooned.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And the London "Economist," in typical snide form, compared it to a glorified house trailer. And I thought well, that's me. I'm a little red and a little blue.

OPPENHEIM: Inside, a museum time line, putting the Clinton years in the context of the news and putting controversy, such as the impeachment hearings, in the context of what the museum describes as the politics of persecution.

CONNIE FAILS, DIRECTOR, CLINTON MUSEUM STORE: It's not just a static place where we come to worship the guy who was in office for us. It's a place of active education and community that's going to go on.

OPPENHEIM: Indeed, next to the museum is the new Clinton School of Public Service. Behind that, the archive building, where 80 million documents are stored. Down the street, a Clinton Museum store and a revitalized river market district. For Little Rock, this complex is expected to bolster tourism and build the city's identity.

CHERYL FOX, PINE BLUFF, ARKANSAS: I'm really proud that he feels like he wanted to leave these roots in Arkansas and not put his library somewhere else.

(END VIDEO TAPE) COSTELLO: That was Keith Oppenheim reporting.

You saw the Clinton library building. You saw it there. Some say it -- well, some say it looks like a double wide mobile home. We wanted to know what you think. Is that too harsh? Boy, that was harsh, wasn't it?

Our e-mail question this morning, the Clinton Library -- do you love it, do you hate it, do you want to visit it? Oh, please e-mail us at daybreak@cnn.com because I think your responses will be very interesting this morning.

Coming up in the next hour, we'll talk with the director of the grand opening of the Clinton Presidential Library. So be sure to tune in for that in our 6:00 hour. And stay with CNN throughout the day for coverage of the library's dedication ceremony.

U.S. and Iraqi forces are searching house to house in Falluja and they have made some ominous discoveries this morning.

Jane Arraf is embedded with some U.S. troops in Falluja, with the Army.

She joins us now with what they found -- good morning, Jane.

JANE ARRAF, CNN CORRESPONDENT: Good morning, Carol.

U.S. forces going door to door, breaking down doors, have found what they believe is a car bomb making factory, as well as a house that appears to be linked to two lieutenants from Abu Musab al- Zarqawi's organization.

Now, we've been taken to a series of houses in the southeast of Falluja. These houses have had bombs dropped near them. Around them are dead fighters and inside, U.S. and Iraqi forces described to us documents, one of them a letter signed by Abu Musab al-Zarqawi, the Jordanian born wanted fugitive responsible for some of -- who has claimed responsibility for some of the deadliest violence in Iraq.

This is a letter instructing some of his lieutenants as to what to do. Other letters are to Abu Musab and on the wall, as we were led into this house, there was the symbol of al Qaeda, believed to be a link between Abu Musab al-Zarqawi and al Qaeda.

These lieutenants were believed responsible for their area of the city. And in the industrial section, a bomb making facility that had an American Suburban vehicle, licensed in Texas. It was in the process of having the insides pulled out and nearby were explosives, chemicals, everything needed to make a gigantic car bomb -- Carol.

COSTELLO: Oh, just so, so fascinating, Jane.

I have a couple of questions.

Somehow it's odd to me that Zarqawi would be sending letters and leaving behind written documentation, so to speak. Did that surprise the troops that found this stuff?

ARRAF: Toward the end, certainly, that would have been the way they communicated. The U.S. has been able to quite successfully intercept a lot of the signal information, the telephone conversations, the other electronic conversations. They did rely on letters, Carol. And interestingly enough, at some of these houses we found bicycles, which U.S. forces tell us were used to ferry messages back and forth when they did not want those messages to be intercepted. A lot of the communication was, indeed, apparently in writing.

COSTELLO: And the other intriguing thing you say was about this car licensed in Texas.

Can you tell us more about that?

ARRAF: It's a similar kind to the kind used by American contractors here, contractors to the American military. Not clear whether it was stolen from a contractor or whether it was simply a brand new American vehicle purchased for that purpose. But it was sitting in a warehouse just inside where chemicals of the kind used in the Oklahoma City bombing, bags and bags of them. And this was a virtual factory. There were car parts from other cars that we were told had been dismantled, the sides taken out, the windshield wiper mechanisms taken out, for instance, so that they could pack the hood and pack the sides with explosives.

It appeared to be part of a complex of several such factories in this industrial area -- Carol.

COSTELLO: A final question for you, Jane.

These lieutenants that supposedly lived inside of this house, any word on whether they escaped, whether they were killed in the fighting?

ARRAF: There were some bodies still there and the situation is such that this area is just littered with bodies. There -- it's been a week now, so you can imagine the state they're in. But U.S. military officials, including intelligence experts, are going around trying to retrieve documents, trying to figure out who they are.

It's not clear whether these two, who identify themselves with pseudonyms written on the walls and written in the letters, escaped or whether they are among the dead. That part does not appear to have been determined yet.

COSTELLO: Great work.

Jane Arraf reporting live from Falluja this morning.

More on Falluja coming up in our "War Room" segments.

Our senior international editor David Clinch will join us in the next half hour of DAYBREAK. We'll get the latest on the casualty count. We'll find out if civilians are safe as they start to return home and we'll look at the desperate need now for humanitarian aid.

In news across America this morning, Scott Peterson's lawyer wants a change of venue and a new jury in the penalty phase of his trial. Peterson was convicted last Friday of killing his wife and their unborn child. He could be sentenced to death of life in prison. The penalty phase of the trial scheduled to begin on Monday.

More legal trouble for Michael Jackson. A former producer and business associate is suing the pop singer for breach of contract. The suit claims Jackson owes him more than $2 million in loans and producing fees.

Kobe Bryant may be questioned under oath next month about his encounter with the Colorado woman who accuses him of rape. The questioning would be part of her civil lawsuit against the basketball star. During a hearing yesterday, lawyers listened to potential witnesses they want to question or depose. No trial date has been set.

And here's what we've got coming up later this hour.

Life after Yasser Arafat -- we'll get a long time peacemaker's take on what the future holds for the Middle East. That's at 15 minutes past.

And later, tensions over Iraq may cloud a high profile summit across the pond. A live report for you at 31 minutes after the hour.

And finally, eat less and live longer? Some dieters hope they've found their fountain of youth. That's at 51 minutes past.

But first, here's a look at what else is making news this Thursday morning, November 18.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

COSTELLO: Your news, money, weather and sports.

It is 5:13 Eastern time.

Here's what's all new this morning.

My clip on my microphone broke, so that's why I'm holding it, just so you know.

But let's go on with the news right now. We'll get it taken care of.

Terror related finds in Falluja. Iraqi officials say U.S. troops found what seems to be a terrorist safe house. They also found two letters inside. Both involved terror leader Abu Musab al-Zarqawi.

Police in Boynton Beach, Florida say one of their officers improperly used a taser. The officer has quit after an internal probe found he lied about using the electric stun gun on a handcuffed man.

In money news, the Chrysler 300, it's "Motor Trend" magazine's car of the year for 2005. The sedan's been popular with a wide range of buyers, from rappers to grandmothers.

In culture, another hot vehicle. "People" magazine is naming Jude Law the sexiest man alive. The British actor currently stars as the lovable cad, if there is such a thing, "Alfie."

In sports, Shaquille O'Neal has a season high 26 points and Eddie Jones had 27, as the Miami Heat beat the Milwaukee Bucks for the second time in four days.

To the forecast center and Chad.

MYERS: So, Carol, you're up in New York three days and you've already broken something.

COSTELLO: I know. The clip on my microphone broke. It won't stay on my jacket.

MYERS: We'll get a little solder out there for you. Just hold on. I'll do some weather here.

COSTELLO: OK.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

It has been a week since Yasser Arafat's death, far too soon to say what effect it will have on the Middle East peace process. But one person who knows the situation as well as anyone is Terje Larson, who spent seven years as the U.N.'s Middle East peace envoy.

He sat down with our chief international correspondent Christiane Amanpour to offer his perspective.

Christiane joins us live now.

Christiane, is he hopeful?

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Yes and no. He is mostly hopeful because he says, like many, that this passing of Yasser Arafat presents an opportunity. He also, though, thinks that it could be a very bloody period, if it's not handled right, between now and when the Palestinians have to hold an election.

But he's hopeful because President Bush last week, with Prime Minister Blair of Britain, again reaffirmed a commitment to reinvigorate and reenter the Arab-Israeli peace effort. And that, Terje Larson believes, is absolutely essential, because he thinks, like so many people, that actually nothing can be done of any positive use if the Americans aren't fully four square involved and behind it.

So I asked him about Colin Powell, the secretary of state, who is coming to the region. He will be in Egypt, Sharm-el-Sheikh and in Jerusalem to meet with Palestinians and Israelis and also to meet with the people who are basically in charge of the so-called road map, the Palestinian-Israeli peace proposal, the peace plan.

I asked him even though Secretary Powell is on the way out and will be replaced by Condoleezza Rice, would that have an effect on his diplomacy next week.

(BEGIN VIDEO CLIP)

TERJE ROED-LARSON, U.N. MIDEAST ENVOY: Secretary Powell is widely respected by all parties concerned. He has done a wonderful job within the quartet working with his partners there. And I don't think at all that he will be a lame duck when he comes to the region within the next few days. Quite the contrary, I think the new opportunities which are there, I think he can work every effectively in bringing that potential forward into new and positive realities.

(END VIDEO CLIP)

AMANPOUR: Terje Larson, like so many people in the region, including the Palestinians, the Europeans, the Russians and others, are really hoping that the U.S. will seriously get involved, because they point to the last, you know, four years of essential freefall and how the situation has just spiraled pretty much out of control.

(BEGIN VIDEO CLIP)

ROED-LARSON: Throughout this illness, I stayed in very close touch with the key players. And when he left Ramallah, I felt, sadly, pretty confident that he would not return alive, because the reports of his illness was it was all apparent that he was very critically ill and that this could probably, within the next few weeks, bring him to the end.

(END VIDEO CLIP)

AMANPOUR: That was Terje Larson talking about Yasser Arafat while he was on his deathbed in France. And I asked him that question because, if you remember, during the two weeks that he was lying in a Paris hospital room, there was quite a lot of spin emanating from officials in Paris that, in fact, he was improving and was simply just exhausted and may, in fact, return, until we heard at the last that, in fact, he was in a final coma.

But Terje Larson said that he knew, and many people in the region knew, that the minute Arafat had left Ramallah at the end of October, he wasn't coming back. And at that point, they started to implement the post-Arafat era, the post-Arafat sort of political transition.

And he said to me that one of the biggest mistakes that Arafat had made was really resorting to that armed intifada starting in the year 2000, after the failure of the Camp David conference that was hosted by President Clinton then in the United States, in the summer of 2000.

This is what Larson had to say about Arafat's reaction to that.

(BEGIN VIDEO CLIP)

ROED-LARSON: The Palestinians walked down, not all of them, but some of them, particularly certain groups, walked down a path of terrorism and violence and they, I think they ended up in a cul-de- sac. And I think that Arafat, at the end of his life, realized very much that this was a mistake and that he had walked into a dead end road.

(END VIDEO CLIP)

AMANPOUR: Carol, he basically told us that that four year armed intifada was the biggest strategic mistake that the Palestinian leadership had made in their entire political struggle for an independent state. But he did also say that at this moment, it's not just the Palestinians who have to be imposed upon to reign in terror and to move forward in a democratic way, but also the Israelis must be brought to understand that they must also do what they have to do under their obligations of the road map, stop the settlements and basically try to help move the whole process forward. And only the U.S. can help them do that -- Carol.

COSTELLO: And I'm sure you'll have much more on this throughout the day here on CNN.

Christiane Amanpour live on DAYBREAK this morning.

Thank you.

Still to come this morning, a lot of people are talking about that racy "Monday Night Football" ad. Actually, has Jacques Chirac arrived in Britain? We're going to take -- all right, there we go. This is a live shot of London you're seeing right now. Jacques Chirac is expected to arrive in Britain shortly. You see the honor guard preparing for his arrival. Of course, he's going to meet with Tony Blair for their yearly summit, trying to repair relations between the two countries. And, of course, the United States will be talked about, as well, not so positively from Jacques Chirac; positively from Tony Blair.

When all of this gets under way, of course, we'll take you back out there live.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

COSTELLO: Oh, do you need a laugh right now? Because I know that I do.

So, Chad, I know that you're going to provide us one big guffaw this morning.

MYERS: You know, all of the "Late Night Laughs," they were kind of centered on a couple of things. We had Kmart and the Sears merger and what that did, obviously, for Martha Stewart. Can you believe any of that?

COSTELLO: Yes, well, here's Jay Leno's take on it.

((BEGIN VIDEO CLIP FROM "THE TONIGHT SHOW WITH JAY LENO," COURTESY NBC)

JAY LENO, HOST: Discount retailer Kmart has announced plans to join forces with Sears. Kmart has bought Sears. Their goal? To create the crappiest department store ever made (UNINTELLIGIBLE). The total value of the deal, $125. Kmart buying Sears. So that's -- so that means Martha Stewart's products will now be sold in two stores she wouldn't be caught dead in.

(END VIDEO CLIP)

MYERS: Next it'll be Wal-Mart.

COSTELLO: Yes.

MYERS: Do you know she made $32 million yesterday on that stock increase?

COSTELLO: And she's in jail.

MYERS: Right. What better place?

COSTELLO: You know, no place but America. Oh, well, maybe that's not true either.

You know, the shame of it all? We were talking about this thing with "Monday Night Football" yesterday.

MYERS: Tongues are still going crazy over this thing.

COSTELLO: Like Terrell Owens and Nicollette Sheridan in the locker room, you know that thing?

MYERS: Yes.

COSTELLO: Well, ABC has apologized for their racy opening to "Monday Night Football." But tongues are still wagging over it.

In case you missed it, as I said, Nicollette Sheridan of the hit show "Desperate Housewives" drops her towel -- there it is -- and completes a pass, so to speak, to Philadelphia Eagles' receiver Terrell Owens.

(BEGIN VIDEO CLIP)

NICOLLETTE SHERIDAN, ACTRESS:. Oh my god.

TERRELL OWENS, PHILADELPHIA EAGLES: I don't know how my acting skills were, but, you know, I can't play football forever so, you know, I'm trying to work on the Hollywood thing.

QUESTION: She wasn't really naked, was she? OWENS: I'm not telling.

(END VIDEO CLIP)

MYERS: She sure didn't look like she had any clothes on to me.

COSTELLO: I'm sure she had things in strategic places.

MYERS: Don't go there, Carol.

COSTELLO: Well, he doesn't seem...

MYERS: Let it alone.

COSTELLO: You know, nobody asked him if he was upset by this or whether it should be run on "Monday Night Football." But I guess that wasn't foremost in his mind.

MYERS: I think it was a plan. I think they apologized even before they got in trouble to make more trouble.

COSTELLO: You think so?

MYERS: I think they made more...

COSTELLO: What if the FCC fines them big time? Then they'll be sorry for that, don't you think?

MYERS: What is big time? A hundred thousand dollars? Two million dollars? Five million dollars? All this press it got for free?

COSTELLO: That's true, because "Monday Night Football" ratings have been suffering.

All right, here's what's all new in the next half hour of DAYBREAK.

A hometown boy makes good and his high school band is invited to the party. We will show you who will be jazzing things up today when the Clinton Presidential Library opens up.

From New York and Atlanta, this is DAYBREAK for a Thursday morning.

(COMMERCIAL BREAK)

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