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CNN Live At Daybreak

Baghdad Bombing; Tsunami Disaster; Pivotal Year?; Relief Efforts; Underinsured

Aired January 03, 2005 - 05:30   ET

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

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


CAROL COSTELLO, CNN ANCHOR: Good morning to you, welcome to the second half-hour of DAYBREAK. From the Time Warner Center in New York, I'm Carol Costello, along with Chad Myers.
Now in the News.

With the death toll topping 155,000, a U.S. delegation, headed by Secretary of State Colin Powell, is heading for the South Asia tsunami disaster area. First stop for the Powell delegation will be Bangkok, Thailand. Powell then hopes to visit the hard hit Indonesia province of Aceh.

A suicide truck bomb explosion this morning in Baghdad killed at least four people, three of them police officers. The blast was near the headquarters of the prime minister's political party, but no one there was hurt.

Shirley Chisholm, the first African-American woman elected to Congress, has died in Florida at the age of 80. Chisholm served seven terms as a House member from New York and was an outspoken advocate for women and minorities.

And you've got to be a sled dog to appreciate this, but Interstate 80 has now been re-opened after being blocked by heavy snow in California's high Sierra. Some Tahoe ski resorts got nine feet of snow in three days. That could almost be too much for skiers -- Chad.

CHAD MYERS, CNN METEOROLOGIST: It is too much. And in fact, some of the winds there, Carol, were 125 miles per hour on the very top of the ski lift, on the top of the ridges.

COSTELLO: Wow!

MYERS: And that, obviously, is way too much to ski in or even get the lifts moving in. But it's also dangerous when it comes to making avalanche drifts, and they had that. And they've been working on those avalanches, sending those charges into the avalanches, letting them slide down harmlessly when people are not on the slopes.

(WEATHER REPORT)

COSTELLO: All right, thank you -- Chad.

MYERS: You're welcome.

COSTELLO: We are following a developing story out of Baghdad this morning, another deadly bombing. It happened just under four hours ago near an area that houses some key political offices.

CNN's Jeff Koinange live in the Iraqi capital to bring us up to date.

Hello -- Jeff.

JEFF KOINANGE, CNN CORRESPONDENT: Hello there, Carol.

And it happened right in the middle of Monday morning rush hour. About two or three miles from where I'm standing right now where eyewitnesses tell us an orange and white pickup truck or taxi rammed right into a police checkpoint that leads into the street housing the headquarters of the Iraqi National Accord. That, of course, is the political party of interim Prime Minister Ayad Allawi.

Eyewitnesses tell us there were scenes of pandemonium, smoke billowing into the Monday morning skies, people running about all over the place, ambulances rushing to take the injured to hospital.

Now U.S. military sources tell us so far about 4 dead and 17 wounded, although hospital sources tell us there are about 25 wounded, among them, 10 Iraqi policemen.

Now it was a female eyewitness, who works at the Iraqi National Accord, says the entire building was shook, although interim Prime Minister Ayad Allawi was not in the building, but the entire building did shake but was not damaged.

Seems like after a couple of relatively quiet days, Carol, the insurgents have once again stepped up their attacks in the run-up to the January 30 election -- Carol.

COSTELLO: Jeff Koinange, live from Baghdad this morning, thank you.

It's been a little more than a week since the tsunami disaster and parts of Sri Lanka are still soaked, soaked by heavy rains and flash floods now. They hit the island nation over the weekend. Aid has also been pouring in, but getting it to the desperate survivors is proving one tough job.

CNN's Satinder Bindra is getting a firsthand look. He joins us now from the deck of the Kirch, an Indian Navy ship, off the Sri Lankan coast.

Hello -- Satinder.

SATINDER BINDRA, CNN CORRESPONDENT: Hello, Carol.

The INS Kirch is a missile corvette, but here in Kanumilli (ph), it's on a mission of mercy. It's carrying a large cargo of generators, of blankets, of food and fresh water and vegetables. The Kirch has so far offloaded almost 15 tons of these supplies. And along with the Kirch, there's another Indian Naval ship, a supply ship, that's offloaded about 80 tons. Also here in northeastern Sri Lanka, teams of French and Indian doctors are now deploying in relief camps. These doctors are seeing signs of respiratory and skin diseases. They say they are seeing these signs because conditions in these camps are now very overcrowded. But so far, at least no signs of cholera.

Doctors, though, remain very concerned about the emotional health of these people, because this is the hardest hit region of Sri Lanka, some thousands of people dead. And in this area, there's the largest number of displaced people as well. People emotionally still very distraught because a large number of children have been killed. Amongst those children killed, many orphans, too.

COSTELLO: You know I wanted to ask you something about the, you know, how aid is getting to people. Because, Satinder, if you look at the headlines in American newspapers this morning, I mean in "The Washington Post" it says the distribution system is not working. From your standpoint, is it, is it not working?

BINDRA: Carol, it depends where you are. I've been in the south and the south is well connected by roads. So if supplies come in by ship and even come in by airplane, these supplies now are getting into the main towns. They are getting into the main hospitals, but the smaller cities, of course it takes time.

Here in the north and the northeast, the main source of supply is through ships and then they have to go a long distance inwards. But people are now telling me here, even in the north and east, they are getting supplies. They have got a large number or a large quantity of medication as well. And what they are looking forward to now is construction material so that they can start rebuilding their lives as well.

COSTELLO: Satinder Bindra, reporting live this morning, thank you.

If you would like to lend a hand to the victims of a disaster, we can show you how. Just go to CNN.com and click on how to help. We'll tell you all the aid groups that are accepting donations and we'll link you right to them.

As Palestinians get ready for elections next Sunday, is the Middle East really on the brink of peace? We'll take you live to Jerusalem for a look at what 2005 might hold for the region.

Plus, as recovery efforts continue in Thailand, sunbathers start to hit the beaches again. What's that all about?

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: The death of Yasser Arafat, elections for a new Palestinian leader, Ariel Sharon's plans for removing Jewish settlers, the challenges for bringing peace to the Middle East remain significant, but can they be overcome? Our Guy Raz takes a look at what could be a pivotal year in the region.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT (voice-over): They laid him to rest. On the minds of mourners, the painful reminder that in 2004 Palestinians remained stateless.

MAHDI ABDUL HADI, PASSIA ACADEMIC CENTER: In 2004, I was in the heat of intifada. In 2004, I was resisting continuous military incursion to every city, every town, every village. In 2004, I was witnessing the assassination of Palestinian leadership. The cream of the Palestinian people were really assassinated, physically eliminated. That was a very painful year for me. In 2004, I lost Arafat.

RAZ: Now Arafat's arch nemesis, Ariel Sharon, is under pressure to make good on his promise, negotiations, Sharon long implied, with anyone other than Arafat.

ARI SHAVIT, HA'ARETZ NEWSPAPER: There is a very promising beginning. In many ways, the war, as we knew it for four years, has ended and possibly a new peace process, definitely a new political process, is emerging.

RAZ: By the end of 2005, Israel promises to remove 8,000 Jewish settlers in the occupied Gaza Strip effectively ending 37 years of military occupation in the area. Palestinians fear it's as far as Sharon will go, using it as an opportunity to expand Israel's existing settlements inside the occupied West Bank.

The man most Palestinians are placing their hope in, Mahmoud Abbas, is determined to finally establish a state, even though it may not emerge by the end of 2005, something envisioned in the U.S.-backed road map for peace.

HADI: This small window is for the Palestinians to create and to establish a political system if it can make it.

HANAN ASHRAWI, PALESTINIAN LEGISLATOR: This year is one of tremendous challenge. It is one of transformation. It is one in which the Palestinians have to face a new phase without their historical leader, but at the same time have to make the transition into rule of law.

RAZ: Much depends on the United States and how far the Bush administration will push both sides towards a compromise. But changes on the ground, a new Palestinian leadership and Israel's impending withdrawal from Gaza are likely to shape the political dynamic here.

SHAVIT: The two processes can converge into some sort of coexistence and mutual understanding, which is perhaps even more important right now than formal agreements.

(END VIDEOTAPE) RAZ: But, Carol, formal agreements are just what the new Palestinian leadership is calling for. Interim deals, confidence building measures, all of these have failed over the past decade. So 2005, they say, is the year for a final deal to put an end to this conflict -- Carol.

COSTELLO: Guy Raz, reporting live from Jerusalem this morning, thank you.

Your news, money, weather and sports. It's 5:42 Eastern. Here's what's all new this morning.

Secretary of State Colin Powell and his U.S. delegation are heading for Bangkok, Thailand right now, first stop on a tour of the tsunami devastated South Asia. Powell's team will assess relief needs in the area.

A suicide car bomb explodes this morning in Baghdad, killing 4 people and wounding 17. Three of those killed were police officers. The blast was near the interim prime minister's party headquarters. No one there was hurt.

In money news, "Time" magazine's online edition reports Delta Air Lines is expected to slash fares, cut fees and kill some of those restrictive rules we all hate. Delta, the third largest airline, is restructuring, trying to avoid a bankruptcy filing.

In culture, Pulitzer Prize winning humorist Dave Barry says yesterday's column was his last for now. But Barry says he may write again from time to time. As he puts it, if something really important happens, like a cow exploding on a boat toilet. I didn't make that up, that was a quote, I swear.

In sports, the Indianapolis Colts had little to win or lose, so Peyton Manning sat through most of the game and the Denver Broncos won, earning a playoff rematch next week with the Indianapolis Colts -- Chad.

MYERS: Hey, good morning.

And in the late game, in also ran (ph) district, Cowboys and Giants. The Giants won 28-24, if you couldn't stay up last night.

(WEATHER REPORT)

MYERS: Back to you.

COSTELLO: Thank you, Chad.

Those are the latest headlines for you this morning.

As the death toll surges in Southeast Asia, so do the costs of rebuilding. Up next, we'll look at how this affects the insurance industry and why it may not get hit that hard.

And now it's time for today's history question. Are you ready? Put your thinking cap on because I know you're awake on this Monday morning. What state was admitted to the union on this day in 1959? That's an easy one. We'll have the answer when we return.

(COMMERCIAL BREAK)

COSTELLO: All right, our history and trivia question for the morning is, what state was admitted to the union on this day in 1959? I feel just like Alex Trebeck. The answer is Alaska.

All right, let's turn back to one of the greatest natural disasters in centuries. Well we have to talk more about the tsunamis in South Asia. Around the globe, nations are giving money and aid, but getting that food, water and medicine to the victims is not so easy.

We take you now to Thailand and CNN's Aneesh Raman for more on relief efforts there.

Hello -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Carol, good morning to you.

Today we went to visit the hardest hit areas here on Phuket Island. Kamala Beach, Patong Beach are now well over a week or just over a week since those waves came, they are still, quite frankly, reminiscent of a war zone. Debris is everywhere. Rubble mars everything but the road.

NAF (ph) volunteers continue to clean up piles upon piles upon piles of rubble on the roadside. Their numbers are growing, and it's needed, because the hours are long. And a lot of them that you look at are just kind of like zombies, each day here melding in with the next.

But in other parts of the island, quite interestingly, we're seeing tourists return to the less affected areas. It's good news here for an economy that really is on the brink of further devastation. It's an economic imperative that this region rebound quickly.

Phuket is the only thing that, in some semblance, is still standing, compared to Tepi (ph) Island and the coastal area of Khal Lock (ph). Ten billion dollars a year, Carol, from this tourism revenue, and so they need to try and salvage what they can.

But it is, quite frankly, a surreal transition. When you go from one area of the island that is still very much dealing with devastation and that still has bodies unfound and in a matter of a half-hour you hit another set of beaches where people are sunbathing, where they're out in the water, it's beyond words the transition. It's almost as stark as the transition that began all this when tranquility turned to that savage fight for one's life at the beginning. But now it is about these stark and contrasting images, but as odd as they are, they are needed here on the ground -- Carol.

COSTELLO: Yes, especially for Thailand's economy. You know I was watching your reports over the weekend, Aneesh, you talked to Thailand's prime minister and he was downplaying the need for aid in his country. Tell us more.

RAMAN: Yes, it was interesting. We caught up with Thai Prime Minister Thaksin Shinawatra yesterday. And I asked him what he expected, what he needed to hear from Secretary of State Powell. And he really said that money wasn't an issue here, that financially Thailand has what it needs to be able to get these relief efforts under way.

What they are lacking are people with expertise, specifically in forensic. As you know, there are still thousands of people missing and a lot of them are foreigners. And the bodies that are being found, it is becoming increasingly difficult, if near impossible, to identify them without some high science. You know fingers that have to be kept so that they can then be taken to cellular levels in terms of identification. This is all stuff that the Thai government does not have and it is on the top of their list in terms of what the help is that they need.

They are now deciding, Carol, though, how long to keep looking for the bodies. The Thai Foreign Minister saying today it is likely they will continue to do so through the week but on Friday will decide whether or not to stop that search -- Carol.

COSTELLO: Aneesh Raman reporting live for us this morning.

Unlike many other major disasters, it's unlikely that insurance companies will be hit hard by claims. Part of the reason is the lack of insurance policies in Southern Asia; the other may be the way the region was devastated.

CNN's Jim Boulden has that part of the story for you.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Shattered lives, shattered economies, natural disasters can take a huge economic, as well as human toll. But the Asian tsunami is not racking up costs for insurance companies. While billions of dollars were paid out for the hurricanes of 2004, the final payout for the tsunami may only be in the millions of dollars. Firstly, few hotels and businesses in the region will have insurance.

MALCOLM TARLING, ASSOCIATION OF BRITISH INSURERS: There are a lot of poor areas, a lot of areas where insurance is not common. And I think that taking that into account, there's a good chance that many of the properties that have been affected will not of, I'm afraid, been covered by insurance.

BOULDEN: Tourists on package holidays will be able to claim for medical costs and for lost items. But tour operators themselves are unlikely to have their own insurance to cover the costs of such unusual events as a tsunami or an earthquake.

KEITH BETTON, ASSN. OF BRITISH TRAVEL AGENTS: They can insure against it, but quite often the cost of taking that insurance is so high you just wouldn't do it because the chance of this happening again is thought to be very, very small indeed.

BOULDEN: So many operators will cover the extra costs themselves, as will many independent tourists who did not have specific insurance to cover loss due to natural disasters. The insurance industry says it writes policies for what might happen, not for what is highly unlikely.

BETTON: If you were booked to go to somewhere in Asia next week and the place you were going to has just been knocked out of existence, then you're not going to get your money back from them. And you're not going to get your money back from the insurance company either, unless it specifically said it would do so, and that's unlikely.

BOULDEN: Insurers in Scandinavia, Germany and Britain are likely to see many life insurance claims. But in South Asia, few local people will have life cover, maybe 1 in 10.

(END VIDEOTAPE)

So, Carol, to put this in perspective, some $42 billion was paid out by insurance companies for other natural disasters in 2004, you know the hurricanes and other disasters. Now the insurance companies say they expect their limit this time for the tsunamis to be around $100 million each. So the total could be less than $10 billion for this disaster -- Carol.

COSTELLO: Wow that is something. Jim Boulden, reporting live for us this morning, thank you.

CNN will continue to bring you live coverage of the tsunami aftermath from across South Asia. Tonight, Anderson Cooper hosts a "Tsunami Disaster Special." He'll be live from Sri Lanka. That's at 7:00 p.m. Eastern, 4:00 p.m. on the West Coast.

Heavy snow caused severe problems in the Sierra Nevadas. We'll take a look at the winter wonderland of the west. It's not much of a wonder for the people going through it.

Plus, what's all new this week in "Time." President Bush meeting new members of Congress.

Those stories still ahead in the next hour of DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: It's time to check out our Web Clicks this morning. We're always interested in what stories you're clicking on to on CNN.com.

And, Chad, the most popular is another survival story out of India.

MYERS: Yes. COSTELLO: This one involves the family dog. It's just absolutely incredible. A woman, she had three children, and she couldn't hold on to all of them as the tsunami hit, so she had to choose the two youngest ones because she figured the 7-year-old would be big enough to run.

MYERS: Right. And ran to the wrong place. Ran into a hut that was basically right on the beach.

COSTELLO: He did, but the family dog sort of knew it.

MYERS: Yes.

COSTELLO: Nipped at the boy, got him to go to safety. And because of this dog, because of this dog nudging the boy to get up a hill, a very high hill, you can see the dog there, he's tired.

MYERS: And he's only sleeping. The dog is just fine.

COSTELLO: He's only sleeping. He is exhausted after that.

MYERS: Yes.

COSTELLO: But the whole family doing fine this morning.

MYERS: It's great news.

COSTELLO: So that is a happy story.

MYERS: Yes.

COSTELLO: The second most popular on CNN.com is they discovered a new coral reef off the coast of Florida.

MYERS: A little hard to get to, though. It's a little deep, 250 feet, Carol. Most of the reefs that I'll dive and most people dive are anywhere between 15 and maybe 40 feet deep. This is 250 feet in the water.

COSTELLO: Wow!

MYERS: Yes, it is to the west of the Dry Tortugas. Actually, I have a map behind me that I can actually show you where this is. Obviously Florida, way here down on the bottom. Here's Port Charlotte, all the way through into Miami, here's Key West. And the little dot right there...

COSTELLO: Wow!

MYERS: ... to the west of Key West, to the west of the Dry Tortugas, they found a very deep reef out there. Now there's a reef all the way here, all the way up and down the Florida Keys about three miles offshore. That's a divable reef. A lot of shipwrecks out there as well. But that's anywhere from 10 or even at the surface all the way down to about 40 feet. This one is really deep. COSTELLO: Well you know it's a shame it's hard to get to because there are some fabulous things down there, just some of the fish, fish I've never heard of.

MYERS: Yes.

COSTELLO: Giant red grouper, I've heard of that one. Damsel fish, angel fish, rock beauty, hog fish. I've never heard of a hog fish. And sea bass all down there, along with, you know, the beautiful colors of the coral reef.

MYERS: And the problem isn't that you can't get a boat out there, the problem is it's very difficult to go 250 feet down. A normal diver, a normal certified diver can go to about 100 and that's it. You need special air, you need special tanks and obviously special equipment and special training to get that deep.

COSTELLO: So we'll enjoy the pictures taken by the experts.

MYERS: Hope so.

COSTELLO: The next hour of DAYBREAK begins right after this break.

(COMMERCIAL BREAK)

COSTELLO: Straight ahead on DAYBREAK, the deadly tsunamis have left behind a flood of refugees. They are desperate for help but getting it to them is proving to be a difficult task.

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 January 3, 2005 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning to you, welcome to the second half-hour of DAYBREAK. From the Time Warner Center in New York, I'm Carol Costello, along with Chad Myers.
Now in the News.

With the death toll topping 155,000, a U.S. delegation, headed by Secretary of State Colin Powell, is heading for the South Asia tsunami disaster area. First stop for the Powell delegation will be Bangkok, Thailand. Powell then hopes to visit the hard hit Indonesia province of Aceh.

A suicide truck bomb explosion this morning in Baghdad killed at least four people, three of them police officers. The blast was near the headquarters of the prime minister's political party, but no one there was hurt.

Shirley Chisholm, the first African-American woman elected to Congress, has died in Florida at the age of 80. Chisholm served seven terms as a House member from New York and was an outspoken advocate for women and minorities.

And you've got to be a sled dog to appreciate this, but Interstate 80 has now been re-opened after being blocked by heavy snow in California's high Sierra. Some Tahoe ski resorts got nine feet of snow in three days. That could almost be too much for skiers -- Chad.

CHAD MYERS, CNN METEOROLOGIST: It is too much. And in fact, some of the winds there, Carol, were 125 miles per hour on the very top of the ski lift, on the top of the ridges.

COSTELLO: Wow!

MYERS: And that, obviously, is way too much to ski in or even get the lifts moving in. But it's also dangerous when it comes to making avalanche drifts, and they had that. And they've been working on those avalanches, sending those charges into the avalanches, letting them slide down harmlessly when people are not on the slopes.

(WEATHER REPORT)

COSTELLO: All right, thank you -- Chad.

MYERS: You're welcome.

COSTELLO: We are following a developing story out of Baghdad this morning, another deadly bombing. It happened just under four hours ago near an area that houses some key political offices.

CNN's Jeff Koinange live in the Iraqi capital to bring us up to date.

Hello -- Jeff.

JEFF KOINANGE, CNN CORRESPONDENT: Hello there, Carol.

And it happened right in the middle of Monday morning rush hour. About two or three miles from where I'm standing right now where eyewitnesses tell us an orange and white pickup truck or taxi rammed right into a police checkpoint that leads into the street housing the headquarters of the Iraqi National Accord. That, of course, is the political party of interim Prime Minister Ayad Allawi.

Eyewitnesses tell us there were scenes of pandemonium, smoke billowing into the Monday morning skies, people running about all over the place, ambulances rushing to take the injured to hospital.

Now U.S. military sources tell us so far about 4 dead and 17 wounded, although hospital sources tell us there are about 25 wounded, among them, 10 Iraqi policemen.

Now it was a female eyewitness, who works at the Iraqi National Accord, says the entire building was shook, although interim Prime Minister Ayad Allawi was not in the building, but the entire building did shake but was not damaged.

Seems like after a couple of relatively quiet days, Carol, the insurgents have once again stepped up their attacks in the run-up to the January 30 election -- Carol.

COSTELLO: Jeff Koinange, live from Baghdad this morning, thank you.

It's been a little more than a week since the tsunami disaster and parts of Sri Lanka are still soaked, soaked by heavy rains and flash floods now. They hit the island nation over the weekend. Aid has also been pouring in, but getting it to the desperate survivors is proving one tough job.

CNN's Satinder Bindra is getting a firsthand look. He joins us now from the deck of the Kirch, an Indian Navy ship, off the Sri Lankan coast.

Hello -- Satinder.

SATINDER BINDRA, CNN CORRESPONDENT: Hello, Carol.

The INS Kirch is a missile corvette, but here in Kanumilli (ph), it's on a mission of mercy. It's carrying a large cargo of generators, of blankets, of food and fresh water and vegetables. The Kirch has so far offloaded almost 15 tons of these supplies. And along with the Kirch, there's another Indian Naval ship, a supply ship, that's offloaded about 80 tons. Also here in northeastern Sri Lanka, teams of French and Indian doctors are now deploying in relief camps. These doctors are seeing signs of respiratory and skin diseases. They say they are seeing these signs because conditions in these camps are now very overcrowded. But so far, at least no signs of cholera.

Doctors, though, remain very concerned about the emotional health of these people, because this is the hardest hit region of Sri Lanka, some thousands of people dead. And in this area, there's the largest number of displaced people as well. People emotionally still very distraught because a large number of children have been killed. Amongst those children killed, many orphans, too.

COSTELLO: You know I wanted to ask you something about the, you know, how aid is getting to people. Because, Satinder, if you look at the headlines in American newspapers this morning, I mean in "The Washington Post" it says the distribution system is not working. From your standpoint, is it, is it not working?

BINDRA: Carol, it depends where you are. I've been in the south and the south is well connected by roads. So if supplies come in by ship and even come in by airplane, these supplies now are getting into the main towns. They are getting into the main hospitals, but the smaller cities, of course it takes time.

Here in the north and the northeast, the main source of supply is through ships and then they have to go a long distance inwards. But people are now telling me here, even in the north and east, they are getting supplies. They have got a large number or a large quantity of medication as well. And what they are looking forward to now is construction material so that they can start rebuilding their lives as well.

COSTELLO: Satinder Bindra, reporting live this morning, thank you.

If you would like to lend a hand to the victims of a disaster, we can show you how. Just go to CNN.com and click on how to help. We'll tell you all the aid groups that are accepting donations and we'll link you right to them.

As Palestinians get ready for elections next Sunday, is the Middle East really on the brink of peace? We'll take you live to Jerusalem for a look at what 2005 might hold for the region.

Plus, as recovery efforts continue in Thailand, sunbathers start to hit the beaches again. What's that all about?

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: The death of Yasser Arafat, elections for a new Palestinian leader, Ariel Sharon's plans for removing Jewish settlers, the challenges for bringing peace to the Middle East remain significant, but can they be overcome? Our Guy Raz takes a look at what could be a pivotal year in the region.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT (voice-over): They laid him to rest. On the minds of mourners, the painful reminder that in 2004 Palestinians remained stateless.

MAHDI ABDUL HADI, PASSIA ACADEMIC CENTER: In 2004, I was in the heat of intifada. In 2004, I was resisting continuous military incursion to every city, every town, every village. In 2004, I was witnessing the assassination of Palestinian leadership. The cream of the Palestinian people were really assassinated, physically eliminated. That was a very painful year for me. In 2004, I lost Arafat.

RAZ: Now Arafat's arch nemesis, Ariel Sharon, is under pressure to make good on his promise, negotiations, Sharon long implied, with anyone other than Arafat.

ARI SHAVIT, HA'ARETZ NEWSPAPER: There is a very promising beginning. In many ways, the war, as we knew it for four years, has ended and possibly a new peace process, definitely a new political process, is emerging.

RAZ: By the end of 2005, Israel promises to remove 8,000 Jewish settlers in the occupied Gaza Strip effectively ending 37 years of military occupation in the area. Palestinians fear it's as far as Sharon will go, using it as an opportunity to expand Israel's existing settlements inside the occupied West Bank.

The man most Palestinians are placing their hope in, Mahmoud Abbas, is determined to finally establish a state, even though it may not emerge by the end of 2005, something envisioned in the U.S.-backed road map for peace.

HADI: This small window is for the Palestinians to create and to establish a political system if it can make it.

HANAN ASHRAWI, PALESTINIAN LEGISLATOR: This year is one of tremendous challenge. It is one of transformation. It is one in which the Palestinians have to face a new phase without their historical leader, but at the same time have to make the transition into rule of law.

RAZ: Much depends on the United States and how far the Bush administration will push both sides towards a compromise. But changes on the ground, a new Palestinian leadership and Israel's impending withdrawal from Gaza are likely to shape the political dynamic here.

SHAVIT: The two processes can converge into some sort of coexistence and mutual understanding, which is perhaps even more important right now than formal agreements.

(END VIDEOTAPE) RAZ: But, Carol, formal agreements are just what the new Palestinian leadership is calling for. Interim deals, confidence building measures, all of these have failed over the past decade. So 2005, they say, is the year for a final deal to put an end to this conflict -- Carol.

COSTELLO: Guy Raz, reporting live from Jerusalem this morning, thank you.

Your news, money, weather and sports. It's 5:42 Eastern. Here's what's all new this morning.

Secretary of State Colin Powell and his U.S. delegation are heading for Bangkok, Thailand right now, first stop on a tour of the tsunami devastated South Asia. Powell's team will assess relief needs in the area.

A suicide car bomb explodes this morning in Baghdad, killing 4 people and wounding 17. Three of those killed were police officers. The blast was near the interim prime minister's party headquarters. No one there was hurt.

In money news, "Time" magazine's online edition reports Delta Air Lines is expected to slash fares, cut fees and kill some of those restrictive rules we all hate. Delta, the third largest airline, is restructuring, trying to avoid a bankruptcy filing.

In culture, Pulitzer Prize winning humorist Dave Barry says yesterday's column was his last for now. But Barry says he may write again from time to time. As he puts it, if something really important happens, like a cow exploding on a boat toilet. I didn't make that up, that was a quote, I swear.

In sports, the Indianapolis Colts had little to win or lose, so Peyton Manning sat through most of the game and the Denver Broncos won, earning a playoff rematch next week with the Indianapolis Colts -- Chad.

MYERS: Hey, good morning.

And in the late game, in also ran (ph) district, Cowboys and Giants. The Giants won 28-24, if you couldn't stay up last night.

(WEATHER REPORT)

MYERS: Back to you.

COSTELLO: Thank you, Chad.

Those are the latest headlines for you this morning.

As the death toll surges in Southeast Asia, so do the costs of rebuilding. Up next, we'll look at how this affects the insurance industry and why it may not get hit that hard.

And now it's time for today's history question. Are you ready? Put your thinking cap on because I know you're awake on this Monday morning. What state was admitted to the union on this day in 1959? That's an easy one. We'll have the answer when we return.

(COMMERCIAL BREAK)

COSTELLO: All right, our history and trivia question for the morning is, what state was admitted to the union on this day in 1959? I feel just like Alex Trebeck. The answer is Alaska.

All right, let's turn back to one of the greatest natural disasters in centuries. Well we have to talk more about the tsunamis in South Asia. Around the globe, nations are giving money and aid, but getting that food, water and medicine to the victims is not so easy.

We take you now to Thailand and CNN's Aneesh Raman for more on relief efforts there.

Hello -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Carol, good morning to you.

Today we went to visit the hardest hit areas here on Phuket Island. Kamala Beach, Patong Beach are now well over a week or just over a week since those waves came, they are still, quite frankly, reminiscent of a war zone. Debris is everywhere. Rubble mars everything but the road.

NAF (ph) volunteers continue to clean up piles upon piles upon piles of rubble on the roadside. Their numbers are growing, and it's needed, because the hours are long. And a lot of them that you look at are just kind of like zombies, each day here melding in with the next.

But in other parts of the island, quite interestingly, we're seeing tourists return to the less affected areas. It's good news here for an economy that really is on the brink of further devastation. It's an economic imperative that this region rebound quickly.

Phuket is the only thing that, in some semblance, is still standing, compared to Tepi (ph) Island and the coastal area of Khal Lock (ph). Ten billion dollars a year, Carol, from this tourism revenue, and so they need to try and salvage what they can.

But it is, quite frankly, a surreal transition. When you go from one area of the island that is still very much dealing with devastation and that still has bodies unfound and in a matter of a half-hour you hit another set of beaches where people are sunbathing, where they're out in the water, it's beyond words the transition. It's almost as stark as the transition that began all this when tranquility turned to that savage fight for one's life at the beginning. But now it is about these stark and contrasting images, but as odd as they are, they are needed here on the ground -- Carol.

COSTELLO: Yes, especially for Thailand's economy. You know I was watching your reports over the weekend, Aneesh, you talked to Thailand's prime minister and he was downplaying the need for aid in his country. Tell us more.

RAMAN: Yes, it was interesting. We caught up with Thai Prime Minister Thaksin Shinawatra yesterday. And I asked him what he expected, what he needed to hear from Secretary of State Powell. And he really said that money wasn't an issue here, that financially Thailand has what it needs to be able to get these relief efforts under way.

What they are lacking are people with expertise, specifically in forensic. As you know, there are still thousands of people missing and a lot of them are foreigners. And the bodies that are being found, it is becoming increasingly difficult, if near impossible, to identify them without some high science. You know fingers that have to be kept so that they can then be taken to cellular levels in terms of identification. This is all stuff that the Thai government does not have and it is on the top of their list in terms of what the help is that they need.

They are now deciding, Carol, though, how long to keep looking for the bodies. The Thai Foreign Minister saying today it is likely they will continue to do so through the week but on Friday will decide whether or not to stop that search -- Carol.

COSTELLO: Aneesh Raman reporting live for us this morning.

Unlike many other major disasters, it's unlikely that insurance companies will be hit hard by claims. Part of the reason is the lack of insurance policies in Southern Asia; the other may be the way the region was devastated.

CNN's Jim Boulden has that part of the story for you.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Shattered lives, shattered economies, natural disasters can take a huge economic, as well as human toll. But the Asian tsunami is not racking up costs for insurance companies. While billions of dollars were paid out for the hurricanes of 2004, the final payout for the tsunami may only be in the millions of dollars. Firstly, few hotels and businesses in the region will have insurance.

MALCOLM TARLING, ASSOCIATION OF BRITISH INSURERS: There are a lot of poor areas, a lot of areas where insurance is not common. And I think that taking that into account, there's a good chance that many of the properties that have been affected will not of, I'm afraid, been covered by insurance.

BOULDEN: Tourists on package holidays will be able to claim for medical costs and for lost items. But tour operators themselves are unlikely to have their own insurance to cover the costs of such unusual events as a tsunami or an earthquake.

KEITH BETTON, ASSN. OF BRITISH TRAVEL AGENTS: They can insure against it, but quite often the cost of taking that insurance is so high you just wouldn't do it because the chance of this happening again is thought to be very, very small indeed.

BOULDEN: So many operators will cover the extra costs themselves, as will many independent tourists who did not have specific insurance to cover loss due to natural disasters. The insurance industry says it writes policies for what might happen, not for what is highly unlikely.

BETTON: If you were booked to go to somewhere in Asia next week and the place you were going to has just been knocked out of existence, then you're not going to get your money back from them. And you're not going to get your money back from the insurance company either, unless it specifically said it would do so, and that's unlikely.

BOULDEN: Insurers in Scandinavia, Germany and Britain are likely to see many life insurance claims. But in South Asia, few local people will have life cover, maybe 1 in 10.

(END VIDEOTAPE)

So, Carol, to put this in perspective, some $42 billion was paid out by insurance companies for other natural disasters in 2004, you know the hurricanes and other disasters. Now the insurance companies say they expect their limit this time for the tsunamis to be around $100 million each. So the total could be less than $10 billion for this disaster -- Carol.

COSTELLO: Wow that is something. Jim Boulden, reporting live for us this morning, thank you.

CNN will continue to bring you live coverage of the tsunami aftermath from across South Asia. Tonight, Anderson Cooper hosts a "Tsunami Disaster Special." He'll be live from Sri Lanka. That's at 7:00 p.m. Eastern, 4:00 p.m. on the West Coast.

Heavy snow caused severe problems in the Sierra Nevadas. We'll take a look at the winter wonderland of the west. It's not much of a wonder for the people going through it.

Plus, what's all new this week in "Time." President Bush meeting new members of Congress.

Those stories still ahead in the next hour of DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: It's time to check out our Web Clicks this morning. We're always interested in what stories you're clicking on to on CNN.com.

And, Chad, the most popular is another survival story out of India.

MYERS: Yes. COSTELLO: This one involves the family dog. It's just absolutely incredible. A woman, she had three children, and she couldn't hold on to all of them as the tsunami hit, so she had to choose the two youngest ones because she figured the 7-year-old would be big enough to run.

MYERS: Right. And ran to the wrong place. Ran into a hut that was basically right on the beach.

COSTELLO: He did, but the family dog sort of knew it.

MYERS: Yes.

COSTELLO: Nipped at the boy, got him to go to safety. And because of this dog, because of this dog nudging the boy to get up a hill, a very high hill, you can see the dog there, he's tired.

MYERS: And he's only sleeping. The dog is just fine.

COSTELLO: He's only sleeping. He is exhausted after that.

MYERS: Yes.

COSTELLO: But the whole family doing fine this morning.

MYERS: It's great news.

COSTELLO: So that is a happy story.

MYERS: Yes.

COSTELLO: The second most popular on CNN.com is they discovered a new coral reef off the coast of Florida.

MYERS: A little hard to get to, though. It's a little deep, 250 feet, Carol. Most of the reefs that I'll dive and most people dive are anywhere between 15 and maybe 40 feet deep. This is 250 feet in the water.

COSTELLO: Wow!

MYERS: Yes, it is to the west of the Dry Tortugas. Actually, I have a map behind me that I can actually show you where this is. Obviously Florida, way here down on the bottom. Here's Port Charlotte, all the way through into Miami, here's Key West. And the little dot right there...

COSTELLO: Wow!

MYERS: ... to the west of Key West, to the west of the Dry Tortugas, they found a very deep reef out there. Now there's a reef all the way here, all the way up and down the Florida Keys about three miles offshore. That's a divable reef. A lot of shipwrecks out there as well. But that's anywhere from 10 or even at the surface all the way down to about 40 feet. This one is really deep. COSTELLO: Well you know it's a shame it's hard to get to because there are some fabulous things down there, just some of the fish, fish I've never heard of.

MYERS: Yes.

COSTELLO: Giant red grouper, I've heard of that one. Damsel fish, angel fish, rock beauty, hog fish. I've never heard of a hog fish. And sea bass all down there, along with, you know, the beautiful colors of the coral reef.

MYERS: And the problem isn't that you can't get a boat out there, the problem is it's very difficult to go 250 feet down. A normal diver, a normal certified diver can go to about 100 and that's it. You need special air, you need special tanks and obviously special equipment and special training to get that deep.

COSTELLO: So we'll enjoy the pictures taken by the experts.

MYERS: Hope so.

COSTELLO: The next hour of DAYBREAK begins right after this break.

(COMMERCIAL BREAK)

COSTELLO: Straight ahead on DAYBREAK, the deadly tsunamis have left behind a flood of refugees. They are desperate for help but getting it to them is proving to be a difficult task.

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