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American Morning

Israel Attacking Beirut Again This Morning; President Bush Wades into Middle East Mess

Aired July 14, 2006 - 08:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody.
Breaking news out of the Middle East. Israel attacking Beirut again this morning. Hezbollah firing back with rockets.

MILES O'BRIEN, CNN ANCHOR: President Bush wades into the Middle East mess. But what can he and the other G8 leaders do about it?

S. O'BRIEN: Gang violence -- it's running rampant in the nation's prisons. It's one group, though, that seems to be increasingly at the center of the storm.

M. O'BRIEN: A wildfire collision -- two big fires headed right for each other.

What will happen when they merge?

We're right in the crosshairs.

And a post-Katrina surprise -- real estate in the Gulf Coast is booming. But buyer beware. Gerri Willis is in New Orleans with this surprising turn, ahead on AMERICAN MORNING.

Good morning to you.

I'm Miles O'Brien.

S. O'BRIEN: And I'm Soledad O'Brien.

Israel and Hezbollah trading bombs and rockets again this morning. They're the latest salvos in the escalating violence in the Middle East. Still no movement on any negotiations, though President Bush apparently did discuss the prospects of a cease-fire with Lebanon's prime minister.

Correspondents standing by this morning with the very latest on all fronts.

CNN's Paula Newton live for us in Jerusalem -- Paula, good morning.

PAULA NEWTON, CNN CORRESPONDENT: Good morning.

Unfortunately, not good news in the last hour from here. At least 16 new rockets have landed in Israel and we are reporting about 10 people injured, a couple of them possibly in serious condition already.

What is going on now, Soledad, is in these towns that lie about probably seven to eight miles from the Lebanese border, there is now panic starting to spread. Certainly in the last 36 hours, a lot of them have been told to stay underground in bomb shelters. But now they're wondering how long can we really stay down here? And they are starting to flee south.

In the meantime, Undersecretary of State David Welch is in the West Bank, in Ramallah, just trying to dip his toe into the waters here, trying to see if there is going to be any kind of an opening to at least call some kind of a 24-hour to 48-hour cease-fire so that cooler heads can prevail here -- Soledad.

S. O'BRIEN: All right, Paula Newton, thanks.

A quick question for you, if I may.

Where does it stand with negotiations?

What are you hearing about that?

NEWTON: You know, it's also not good. There is just news out of Egypt now that President Hosni Mubarak said that, look, when it was just one soldier, Corporal Gilad Shalit, that was being held in Gaza, he thought he had a deal. He's alluding to the fact that some third party intervention -- perhaps Iran, perhaps Syria, he won't say -- intervened and made Hamas back out of the deal.

What this means now, Soledad, is there's three soldiers now being captured. This whole idea of a prisoner swap would be a long time in coming, if ever -- Soledad.

S. O'BRIEN: Yes, the escalation certainly getting higher and higher every day.

Paula Newton for us.

Paula, thanks.

Let's turn to Nic Robertson now.

He's in Beirut, Lebanon -- Nic, good morning.

(AUDIO GAP)

S. O'BRIEN: Nic, can you hear me?

Obviously we're having some problems with our satellite.

We'll go back to him in just a moment, as we continue to update you on what exactly is transpiring this morning in the Middle East -- Miles.

M. O'BRIEN: The State Department is telling some U.S. embassy workers in Beirut to be packed and ready to evacuate. But for now, they're not moving. It's simply too dangerous to travel.

Of course, there is a fallback plan at the Pentagon.

For that, we turn to CNN's Barbara Starr -- good morning, Barbara.

BARBARA STARR, CNN CORRESPONDENT: Good morning to you, Miles.

Indeed, the U.S. military now, our sources confirming, continuing to do very active contingency planning, indeed, for a military evacuation of American embassy workers and citizens who want to get out of Lebanon.

There have been no particular requests, no specific requests from the ambassador yet. But, of course, the U.S. military already planning how it would do this, what the options are, how they would move into Lebanon with U.S. forces to get Americans out.

There are some 25,000 Americans, some dual nationals, in Lebanon, and a lot of them are expressing the desire, of course, to get out of the way.

So, what are the options on the table, Miles?

Our military sources are telling us there are basically two things in the works. One, they are looking at whether there are any airfields left in Lebanon that they can use. But the more practical option may be moving a number of Marine amphibious warships, headed by the USS Iwo Jima, that is now in the northern Red Sea conducting an exercise with Jordan. That group of ships could get orders to turn around, move back into the Mediterranean and stand offshore of Lebanon, ready to go in with helicopters and try and get those Americans out of there.

But that could take some time to get the ships turned around.

So the other option, as we say, is they are looking at whether there are any airfields left in Lebanon that they could use.

Now, to be clear, no one thinks the military can get 25,000 Americans out of Lebanon under fire any time soon. This will likely start very small and then build, if it has to -- Miles.

M. O'BRIEN: Barbara Starr at the Pentagon.

Thank you very much -- Soledad.

S. O'BRIEN: Let's try Nic Robertson once again.

He's in Beirut, Lebanon.

We had a little trouble with the signal a moment ago -- Nic, do we have contact with you?

NIC ROBERTSON, SENIOR INTERNATIONAL CORRESPONDENT: Soledad, I think we do. It's the airport here, the main international airport south of Baghdad has been getting a lot of fire today. The most recent report, four rockets apparently fired from a ship off the shore, landing in the car park, very close to the terminal buildings.

Until now, it's been the runways that have been attacked. You'll remember earlier this morning, five Middle Eastern Airline aircraft -- that's the Lebanese national carrier -- were able to fly out of the airport. The airport runways have been fixed up from shelling the night before. The aircraft flew out and the runways were promptly bombed again.

Now, close to the terminal building, the car park there has been hit. We know the prime minister here has been in touch with President Bush. President Bush saying that he supports and understands the position of the government...

S. O'BRIEN: All right, we lost Nic again.

We're obviously having some troubles.

He was talking about the bombing in Beirut. He mentioned Baghdad, but he was talking about, actually, the airport being hit once again.

We're going to see if we can fix that signal. Obviously they're getting some hits there. And we'll get right back to him as soon as we get him up again -- Miles.

M. O'BRIEN: For all their influence, leaders of the world's richest nations may be hard-pressed to find a solution to this crisis. They are set to meet in Russia.

President Bush now there, slated for a private tete a tete with the Russian president, Putin. And they have some wood to chop, shall we say?

Matthew Chance live now from St. Petersburg with more -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Miles, thanks very much.

That's right, President Bush is in St. Petersburg in preparation for the G8 summit of industrialized countries, which is scheduled to get underway tomorrow. Before then, though, as you say, he's got a lot of items on his agenda.

In the last hour or so, he's been visiting a war memorial in the center of St. Petersburg, paying tribute to the Soviet soldiers that defended what was then called Leningrad from Nazi forces during the Second World War.

A number of other items, as well, not least a head on head, head to head, right here, meeting with Vladimir Putin, the Russian president. The two leaders have a great deal to discuss, including, of course, the escalating tensions in the Middle East. Both the co- sponsors of the Middle East peace process, as members of the quartet. Also, North Korea, Iran and its controversial nuclear program and, U.S. officials say, that President Bush will bring up the sensitive issue of democracy in Russia. Washington has accused Vladimir Putin's administration of backsliding on democratic freedoms.

To underline how important that is for the U.S. President Bush, before meeting Putin this evening, will participate in a roundtable of civil community leaders, including NGOs and human rights activists, to get from them a better idea of what they think is important in Russia today -- Miles.

M. O'BRIEN: Matthew Chance in St. Petersburg.

Thank you very much -- Soledad.

S. O'BRIEN: A state of emergency in Southern California. Firefighters now say that 48,000 acre Yucca Valley wildfire could merge with another big fire in the San Bernardino National Forest. The Yucca Valley fire has destroyed more than 150 homes and buildings, too.

Time for a check of the forecast.

Rob Marciano at the CNN Center -- weather is not looking great for the folks there either -- Rob.

ROB MARCIANO, CNN METEOROLOGIST: No. The heat is just going to build there. They're not going to see any rain. They typically don't see it this time of year, unless there is a monsoon thunderstorm, and then not all of the time do you actually see rainfall onto the fire. If anything, lightning usually spawns more fire, which is actually what happened with that fire. It was spawned by lightning.

(WEATHER REPORT)

S. O'BRIEN: Ahead this morning, we continue to follow this crisis happening in the Middle East.

Right now, is there any diplomatic solution?

We're going to talk to a former U.S. ambassador to Israel.

M. O'BRIEN: Also, the outed CIA agent, Valeria Plame, sues the vice president, saying he ruined her career.

But does she really have a case?

S. O'BRIEN: And later, a surprise consequence of Hurricane Katrina.

We'll tell you how it's raising real estate values in some Gulf Coast towns.

Those stories are all ahead, as we continue right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Breaking news we've been following all morning, the violence between Israel and Hezbollah dramatically escalating. Also word that President Bush has promised the Lebanese prime minister he'll press Israel for a cease-fire.

Joining us this morning is Ambassador Edward Djerejian.

He is the former U.S. ambassador to Israel and to Syria, too.

He is now the director of Rice University's Baker Institute for Public Policy in Houston and that's where we find him this morning.

Nice to see you, Mr. Ambassador.

Thanks for talking with us.

EDWARD DJEREJIAN, FORMER U.S. AMBASSADOR TO ISRAEL/SYRIA: Good morning, Soledad.

S. O'BRIEN: Let's talk specifically about Hezbollah.

What exactly is the main motivation here? I mean is it essentially to try to dismantle the Lebanese government? Is it essentially to try draw Israel into a wider conflict? Is it essentially to bring about what Iran is promising, this sort of wider attack from Islamic -- you know, a worldwide Islamic war?

Which is it? Or all of the above?

DJEREJIAN: Well, many of the above, Soledad.

But, basically, Hezbollah, for many years, has seen itself as taking the lead in propagating the policy that resistance works. Resistance to Israeli occupation works, that the path of negotiations is a failed path and that the example that Hezbollah gave in Southern Lebanon by forcing the Israeli, in their view, forcing the Israeli Army to withdraw from Southern Lebanon, was the model that Hamas and the Palestinians should follow.

So there is this, if you will, this ideological position that Hezbollah has.

But in this case, I think that what they are doing is that they're showing their solidarity with the Palestinians, especially Hamas, and they're basically opening up a two front war for Israel, a conflict for Israel, and demanding exactly what Hamas was demanding and is demanding, that in exchange for Israeli soldiers, they want major prisoner releases of Arab and Palestinian prisoners.

This would really help them in terms of popular opinion and certainly amongst the Palestinians and in the Arab world, as seeming -- as being seen as having obtained a real political benefit, the release of prisoners.

So I think that is tactically what they are trying to do at this moment.

S. O'BRIEN: What about this ideological position that the "Wall Street Journal" talks about this morning in an editorial?

They say this: "The real problem is the growing perception among Arab regimes and terrorist front men that the U.S. is so bogged down in Iraq and so suddenly deferential to the wishes of the 'international community' that it's lost its appetite for serious reform?"

Do you think they have a point there?

DJEREJIAN: Well, I think it -- there's no doubt that the -- our occupation with Iraq and that the crisis that Iraq presents to the United States on a daily basis, politically, militarily, certainly diverts our attention. And I think that one thing that we have to now start looking at again is that the Israeli-Arab conflict, be it with the Palestinians, be it with Lebanon, Syria -- that this cannot be allowed to fester.

When the peace -- the hope of a political horizon, a political settlement between Israelis, Palestinians, with Lebanon and Syria, begins to falter and stagnates, then trouble brews. And we're seeing that now.

And I believe that the United States must take a very, very strong and assertive leadership position in the international community to really get the parties to adopt an immediate cease-fire, to work out whatever deals that need to be worked out that both sides can live with in terms of exchanges of soldiers for prisoners and then make that cease-fire sustainable. And then get political contacts going between the Israelis and their Arab neighbors, so that we can get back on the road of peace-making.

This is critical and the United States plays a primary role in this.

S. O'BRIEN: What we heard from President Bush yesterday was this -- and I think we have the clip.

Let's run-this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Israel has the right to defend herself. Every nation must defend herself against terrorist attacks and the killing of innocent life. We've been working very hard, through the United Nations and with partners, to strengthen the democracy in Lebanon. the concern is that any activities by Israel to protect herself will weaken that government. And we have made that -- or topple that government.

(END VIDEO CLIP)

S. O'BRIEN: So Israel has the right to defend herself, but be careful, you might topple the government. That's kind of a mixed message from the White House.

Is that message a problem?

DJEREJIAN: Well, of course, Israel has the right to defend itself. The problem in Lebanon, if we want to be candid, is that there is a legitimately elected government in Beirut. But at the same time, Hezbollah is part of that government in parliament and in the executive branch, and, at the same time, Hezbollah is allowed to maintain its armed strength in the south of Lebanon, on Israel's northern border, with a paramilitary and militia force.

The Lebanese armed forces are not really at the southern border. It's Hezbollah that's at the southern border. And this is an incredible anomaly when you talk about a government should have a monopoly of armed power in its territory. And Lebanon doesn't have it.

So I certainly agree that, you know, we must bolster Lebanese democracy. But at the same time, this is a flaw in the Lebanese political system.

S. O'BRIEN: And just one in that long list of problems that you just pointed out, in the last 48 hours we have seen a very big, I think it's fair to say massive, escalation in tensions, certainly between Hezbollah and Lebanon and Israel.

Are we, do you think, literally sort of one accurate rocket strike away from a major, major war engulfing the Middle East?

DJEREJIAN: I don't -- I don't foresee a major military war. But what I do see is -- it's going to get worse before it gets better, before the time when the parties come back to some form of indirect contacts to resolve these immediate problems.

But I don't think there will be a major war in the Middle East.

However, however, having dealt with the Middle East for over 30 years, you know, logic doesn't travel in the Middle East. So escalation can take on a whole momentum of its own. And that's why the international community -- the president has an opportunity at the G8 meeting in St. Petersburg to rally the international community.

Influence has to be exerted on the parties to cease and desist, to act with restraint, to start contacts and to start this political horizon -- to reestablish the political horizon for peace-making in the Arab-Israeli context. That should be a prime U.S. foreign policy objective.

S. O'BRIEN: We will see if it happens.

Ambassador Edward Djerejian.

Thanks for talking with us, sir.

Appreciate it.

DJEREJIAN: Thank you, Soledad.

S. O'BRIEN: Miles.

M. O'BRIEN: We'll have more on the Middle East crisis in a moment. It might give you another reason to buy a hybrid, if you know what we mean. We'll give you the grim score by the barrel, ahead.

And want to buy some hurricane battered land in Biloxi? Investors respond with a surprising answer, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: The pull, the allure of living on the water is hard to resist for a lot of people. Just look at the way coastal real estate prices have skyrocketed over the years.

You would think, however, that last year's hurricane season might have ended all that. But Katrina and Rita did no such thing. In fact, many are seeing it all as a great opportunity to buy.

CNN's "OPEN HOUSE" host, our heffe de housing, Gerri Willis, finishing her series on how to protect and prepare yourself for the storm season.

And joining us from New Orleans, probably the prettiest corner in New Orleans, I might add.

GERRI WILLIS, PERSONAL FINANCE EDITOR: That's right.

M. O'BRIEN: Gerri Willis, good to see you this morning.

WILLIS: I'm telling you.

M. O'BRIEN: Yes.

WILLIS: It's very good to see you, Miles.

You know, we're here along St. Charles Avenue and it is gorgeous. We're in the uptown.

As you know, in the wake of Katrina, the focus has really been on restoring homes that were damaged in the storm and actually getting ready for the next storm.

But a funny thing happened along the way in neighborhoods just like this. The real estate market that people thought was shattered? It's turned around and it's moving up.

(BEGIN VIDEO TAPE)

WILLIS (voice-over): It's been more than 10 months since Hurricane Katrina, 10 months since tens of thousands of homes were destroyed. You might think Gulf Coast real estate would be in a slump. You'd be wrong.

MICHAEL HEIDELBERG, REAL ESTATE APPRAISER: There has not been a declining market. Actually, real estate values in this community have risen and increased in the last six to nine months.

WILLIS: This Pascagoula, Mississippi real estate appraiser says Katrina left the Gulf Coast with empty lots some buyers see as ripe for fancy new houses and the chance to step up to the beachside home they've always wanted.

The story is similar in Biloxi, but with a twist. Here, casinos are fueling the real estate recovery. Before the storm, casinos had to be built on the water. Now, the state legislature has voted to allow casinos to move 800 feet inland. The casino industry is buying up property in that zone.

A.J. HOLLOWAY, BILOXI MAYOR: There's real estate anywhere near casino operations. So, you know, and then it trickles on down, too. I mean all price of all the land has actually gone up.

WILLIS: The National Association of Realtors say the median price for existing homes in the Biloxi and Gulfport area is up nearly 10 percent from last year.

New Orleans faces a different situation. In some parts of the city, homes are still unlivable. And homes that are selling in these areas are going to for low prices.

But while the market may be slumping inside city limits, areas uptown known as the sliver by the river, that received almost no damage, as well as areas just outside New Orleans, are booming.

FRANK TRAPANI, NEW ORLEANS METRO ASSOCIATION OF REALTORS: The real estate market is excellent if you -- if you're looking to purchase. We've got quite a number of people that have made a decision to relocate because of the storm.

(END VIDEO TAPE)

WILLIS: But a report from the University of New Orleans that's just out shows that while prices were going up as much as 25 percent in the wake of Katrina, they're now going down, as damaged homes come onto the market and sell for less. And, of course, as you know, Miles, here in New Orleans, history is critical. It's really important.

And this weekend on "OPEN HOUSE," we'll be taking a look at the homes where people are repairing and restoring ones that are historic in nature. You can join us Saturday morning at 9:30 a.m. Eastern on "OPEN HOUSE" on CNN, and at 5:30 p.m. Saturday and Sunday, Eastern, again, on "HEADLINE NEWS" -- Miles.

M. O'BRIEN: Gerri Willis in New Orleans.

Thank you very much.

WILLIS: Thank you.

M. O'BRIEN: And, also, Gerri's Prepare and Protect tips are on our Web site. For more information, it's a must see guide if you live in that part of the world. How you can keep your family safe from major storms. Log onto cnn.com/openhouse -- Soledad.

S. O'BRIEN: Coming up this morning, Barbaro. He might be walking around, but vets say the injured Kentucky Derby champion has taken a turn for the worse.

We're going to tell you why they're so worried now.

Plus, outed CIA operative Valeria Plame says her career was ruined. Now she's fighting back with a big lawsuit against some very big names.

We'll take you live to Washington, D.C. for an update, just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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