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THE SITUATION ROOM

Chaos, Carnage & Calls for Calm in Middle East; Mass Evacuation Preparations for American Citizens in Lebanon

Aired July 17, 2006 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you today's top stories.

Happening now, chaos, carnage, and calls for calm. The bloodshed and the biting words continuing. Israel pounding away inside Lebanon. Hezbollah rains rockets on Israel's northern cities. World leaders are urging calm as civilians caught in the middle run for cover.

Also in need of cover are thousands of U.S. citizens and other foreign nationals stuck in Lebanon right now. The U.S. is planning possible evacuations, telling Americans to be ready to leave at a moment's notice.

And the U.S. and Israel view him as the chief agitator of a group of terrorists, but he considers himself a man of god and has called Osama bin Laden despicable. So who exactly is the man who leads Hezbollah?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Fresh rocket fire, airstrikes and casualties on both sides as Israel and Hezbollah exchange warfare. It's open warfare, day six right now. Within just the past few minutes, there's been a new volley of rockets fired at northern Israel, including one that landed near a hospital in the city of Safed, wounding five people.

Israeli Prime Minister Ehud Olmert is vowing his country will do all it can to defeat Hezbollah and Hamas. And speaking to Israel's Knesset, he borrowed a phrase from President Bush, referring to what he called an "axis of evil" stretching from Tehran to Damascus.

Even as the prime minister spoke out, Israeli warplanes were carrying out fresh strikes on targets in Lebanon. That country now says at least 170 people have been killed in the fighting.

Meanwhile, some countries have begun evacuating their citizens from Lebanon, including the U.S. The Pentagon gearing up to move out thousands of Americans in the coming days.

Despite the volatility of the situation, crude oil prices actually were down a little bit today from the record highs of last Thursday and Friday.

We're covering all angles of this very fast-moving story.

Our CNN correspondents are on the scene for us throughout the region.

Christiane Amanpour will be joining us from Haifa, Israel.

Nic Robertson is in Beirut.

Our senior Pentagon correspondent, Jamie McIntyre, is standing by with evacuation plans.

Let's go to Haifa and Christiane first -- Christiane.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Wolf, it's already been a six-day war in this current conflict, and it shows no sign of immediately letting up. Indeed, the Israelis are saying that they need certainly several more days to what they call smash Hezbollah's capabilities.

They know that they're not going to completely annihilate Hezbollah. They know that there is no permanent military solution to this. But they want to cripple, weaken its missile and military ability, they want to create a buffer zone.

They want eventually the Lebanese government to assert sovereignty, put its own troops on the border there. And they're also looking at what the international community is proposing, which is a robust new type of international force to be able to actually effectively keep these sides apart as they did, for instance, in the Sinai when -- when that situation was going on so many years ago.

In the meantime, there have been rocket attacks here. The port of Haifa has been closed. There have been something like six to seven series of air raids from the early morning hours until tonight.

We've seen with our own eyes the impacts of the Katyusha rockets coming from the Hezbollah positions down to here.

Some have landed in the sea. We saw some have landed on the territory. And some have caused some damage. One house, one building, the facade was blown off the front and several injuries were sustained there. As we've also said in the last hour, in Safed, up in northern Israel, a rocket hitting near a hospital and causing five injuries over there.

So this is continuing. As you've reported, the prime minister of Israel making a very tough speech that they will continue to defend themselves.

On the wider diplomatic level, the French foreign minister in Beirut, the U.N.'s delegation in Beirut and coming here to Israel.

You've also reported on these conversations, the candid conversation being overheard between President Bush and Prime Minister Blair, suggesting that somehow it's up to the U.N., Kofi Annan to tell President Assad of Syria to get the Hezbollah to stop. Many people believe, though, that this is something only the United States can do. Many people are wondering whether the price of isolating now these governments, such as Syria, has been perhaps too high, and many people are hoping that Condoleezza Rice or a high-level U.S. official will come here and exert maximum U.S. diplomacy and pressure -- Wolf.

BLITZER: Christiane, you've been in Haifa now for a couple days. I know you've had a chance to go around the city. It's a city of about 300,000 population. Normally it would be bustling right now.

What's life like in Haifa on this sixth day of this war?

AMANPOUR: Well, much more subdued, as you can imagine. Just yesterday there was a rocket attack that hit a train depot downtown not far from where we are and killed eight people. And so this has obviously had a massive impact on this city.

You know, these rockets coming down here, as far as Haifa, this is as far south as they've ever gotten. So this is a new phenomenon for the Israeli people.

The streets are much more deserted than they would be. Many of the shops and businesses and restaurants that would normally be crowded at this time of the year are not. Many of them are shuttered.

But, what we're seeing, and certainly what's being reported and evidence that we're hearing from people around here, that in these parts of Israel that are being under -- are being attacked, there is no call for their government to stop doing what it's doing. In fact, quite the opposite.

BLITZER: Christiane Amanpour, stand by. We're going to be coming back to you.

Christiane is in Haifa.

Let's go to the east a little bit. CNN's John Vause is also in northern Israel. His location only coming under fire within the past hour or two. He's had to move to a safer location We hope it's a safer location.

John is joining us on the phone.

Tell us what you can -- John.

JOHN VAUSE, CNN CORRESPONDENT: Well, Wolf, we were with an artillery outfit not far from the Lebanese border when the Katyushas started coming in. Four landed fairly close to our location. We can't be entirely short just how close, but it was too close.

It was at that moment when the Israeli artillery seemed to be returning fire almost constantly for the last hour. We understand from the IDF, the Israeli defense forces, that part of that attack that we saw was in fact a volley of Katyusha rockets on 16 Israeli communities, up and down the border with Lebanon. As Christiane mentioned, there have been five casualties reported -- on five injuries on the Israeli side. A house was hit as well.

This is all part of the Hezbollah strategy to continue to fire these Katyusha rockets, despite Israel trying to create that buffer zone. We've seen it over the last couple days, with Israeli artillery firing constantly into southern Lebanon.

A short time ago we heard more Israeli fire jets overhead. They were heading into Lebanon, which would be indicative of yet more airstrikes to be carried out quite possibly within the south.

Israeli television was reporting earlier tonight that a Hezbollah commander in the south was wounded either in an airstrike or by artillery. There's also been a fairly high cost in civilian terms, in civilian lives. Homes and buildings have also been destroyed in southern Lebanon by this action by the Israeli military, but the government here is determined to push on, determined to ensure that Hezbollah receive fairly close to a knockout blow -- Wolf.

BLITZER: And it's just after midnight in northern Israel right now.

John, I'm going to have you stand by as well, but I want to go to Beirut right now.

Israeli bombs have been falling in the Lebanese capital, around Lebanon, as well. Our senior international correspondent, Nic Robertson, is on the scene for us.

Nic, what's it like? What's it like right now? And what has happened today?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, Wolf, it's very, very quiet here in Beirut at the moment. There was an explosion a little earlier, and there were explosions at the beginning of the day.

A lot of the fire seems to be going on in the south along that border area from where Hezbollah is firing missiles into Israel. In the east, in the Bekaa Valley, we're seeing attacks as well in the port cities of Sidon and Tyre, further south from Beirut.

The city here does seem to have been spared some of the worst of the shelling, but in the port today an evacuation was beginning. The French government brought a ship in today to evacuate about 1,200 French nationals who've been waiting to get out of Lebanon. There are about another 5,000 French nationals waiting to get out.

As I'm talking to you here, a few vans are driving through the city center moving supplies around. Supplies are a concern for people living here. Will they have enough fresh food, water, and such, like fuel, as this situation gets worse, as it's harder to move goods around the country? But on the harbor side today, people very relieved to be getting out -- to be getting out of Lebanon. The British government also brought in two helicopters today to move its evacuation program further forward. They took out 40 people with them today, people who had medical conditions, people who had young children with them.

Also, the American government and the embassy here announcing they are getting closer to evacuating potentially up to 25,000 Americans here in Lebanon. They say they have plans to advance and they hope to be able to announce very soon the collection points for where people can get out.

It looks very much as if the main route out for people now is through the ports. And perhaps the ports of Beirut and further north from here -- Wolf.

BLITZER: When the Lebanese say they want a cease-fire right now, how would they implement that in terms of Hezbollah being in the south? Can the Lebanese government effectively control those Hezbollah fighters?

ROBERTSON: Well, Wolf, I talked with Walid Jumblatt earlier today. He is the Druze leader, the leader of a sect here. He was a warlord during the civil war. He's a parliamentarian now.

And I said, "Look, the issue here to get this cease-fire is all about the Lebanese turning over" -- Hezbollah in particular -- "turning over these two Israeli soldiers they abducted. How are you, the government, going to get Hezbollah to do it?"

He said simply, "We can't do it. We can't do it."

He says Hezbollah is gaining at the moment. Hassan Nasrallah, the leader, is gaining.

While I'm talking to you, Wolf, I can hear aircraft flying overhead here.

But he said Hezbollah is gaining strength in its constituency the more it's being attacked. And it makes it very difficult for the government to bring any pressure to bear on them, to make them sign up to this cease-fire. He looks to Syria and to Iran as being behind Hezbollah. And he says that's where the pressure's got to come to -- come from, Wolf, on Hezbollah to make them hand over those two soldiers -- Wolf.

BLITZER: Are you hearing any explosions as those aircraft fly over you, Nic?

ROBERTSON: Wolf, not yet. This is -- we're hearing them flying quite low. They're not normally quite this low.

No explosions at the moment. And no indication what this is. But quite often when they come over, we do hear explosions not long afterwards.

BLITZER: Nic Robertson, we're going to stand by and come back to you if there are developments in Beirut, as I suspect there might be.

Nic is on the scene for us.

Be careful over there.

Meanwhile, the Pentagon is making final preparations for a mass evacuation of some of the estimated 25,000 U.S. citizens in Lebanon.

Our senior Pentagon correspondent, Jamie McIntyre, joining us now with more -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, with the Italian government getting several hundred of its nationals out, and the French government getting over a thousand of theirs out on the ship, some Americans stranded in Lebanon are expressing frustration with the slow pace of the U.S. evacuations.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): A U.S. Marine Corps CH-53 helicopter brought the first evacuated Americans to a British Royal Air base in southeast Cyprus. The first to be airlifted out, 21 Sunday and 43 Monday, were U.S. citizens with dependents with special needs, along with some embassy staff. But the trickle of Americans is expected to become a flood in the coming days, as thousands who are stranded in the war zone are just waiting for word they have arrived.

UNIDENTIFIED FEMALE: I'm waiting for the United States to -- you know, they haven't been very communicative with people here. We feel very abandoned, quite frankly, and I'm just waiting for them to come up with something.

MCINTYRE: Pentagon sources say three more helicopters from the 24th Marine Expeditionary Unit operating in the Red Sea will be moved to Cyprus Tuesday, bringing to a half-dozen the number operating in the air bridge. But for most Americans, the way out is by sea.

The State Department has chartered an aging Greek cruise ship, the Orient Queen, which usually carries 750 passengers, but could take twice as many on a short five-hour trip between the port of Beirut and Larnaca, Cyprus.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: We're building up the assets in the -- in the region so that we can operate on a scale of moving thousands of people.

MCINTYRE: Pentagon sources say several U.S. amphibious assault ships are on standby in the Red Sea if they are needed to increase the capacity. They include the USS Trenton, the USS Nashville, and the USS Whidbey Island. In addition, the U.S. Navy destroyer Gonzalez is being dispatched to Lebanon to provide security for the sea evacuation.

(END VIDEOTAPE)

MCINTYRE: The U.S. government estimates there are some 25,000 Americans in Lebanon, and 15,000 of those have registered on the State Department's Web site, including 3,000 just since the crisis began.

So how many actually want to leave Lebanon? No one seems to know for sure. The best guess estimate right now of the government is that it will be upwards of 5,000 -- Wolf.

BLITZER: Jamie, thanks for that.

Jamie McIntyre.

The State Department, by the way, is urging Americans in Lebanon to register with the U.S. Embassy in Beirut if they haven't already done so. From overseas there's a number you can call here in Washington, 0-1-202-501-4444. From inside the United States or Canada, you can call toll free, 1-888-407-4747.

Let's go to Jack Cafferty in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, Iran says a cease-fire is possible in the Middle East. That's right, Iran.

The country's foreign minister says a cease-fire and prisoner exchange would be a fair deal in resolving the current conflict in the Middle East. He said this after he met with Syria's vice president.

Real Boy Scouts, those two.

Meanwhile, Israel says some of the weapons being fired by Hezbollah are made in Iran. Although Iran funded and supplied Hezbollah in the 1980s, it denies providing them with weapons in this latest round of fighting, and, of course, the world knows that Iran always tells the truth about these things.

Some experts say Iran is just trying to divert attention from its nuclear program, which they seem to have done. They also believe that Hezbollah could not have acted without a go-ahead from Tehran.

So here's the question this hour: What is Iran's role in the growing conflict in the Middle East?

E-mail your thoughts to caffertyfile@cnn.com or go to cnn.com/caffertyfile.

BLITZER: Jack, thank you for that.

Just ahead here in THE SITUATION ROOM, he's the head of a powerful militia, and he's now a potent political force in Lebanon. The Hezbollah leader Hassan Nasrallah, we're going to show you what you need to know about this key player in the current fighting.

Also, we're going to hear from diplomats on both sides. Ambassador Nouhad Mahmoud, he's a representative of Lebanon's Ministry of Foreign Affairs. He's standing by in New York to join us live. He's been attending the U.N.

Also, Daniel Ayalon, Israel's ambassador to the United States.

We're covering all sides of this story.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Time now for an update on the crisis in the Middle East.

In a private conversation caught on an open microphone, President Bush disclosed that Secretary of State Condoleezza Rice will go to the Middle East to help ease the tensions. No word on when she will leave Washington for the region.

The U.N. secretary-general, Kofi Annan, and the British prime minister, Tony Blair, are calling for an international force to be sent to the Israeli-Lebanese border. Meanwhile, the prime minister of France is calling for a cease-fire. Prime Minister Dominique de Villepin says, "Lebanon should be able to spread its sovereignty over all its territory."

And we have new tolls on the number of dead. Lebanon says 170 people have been killed in the conflict so far, 429 have been wounded. Israel says it's lost 24 people and more that 300 have been injured.

Joining us now to talk more about this deepening crisis is Daniel Ayalon, Israel's ambassador to the United States.

Mr. Ambassador, thanks for coming in.

Why not accept an immediate cease-fire to stop the killing?

DANIEL AYALON, ISRAELI AMB. TO U.S.: Oh, we would accept it gladly. But for a cease-fire, a real cease-fire, we need to get our soldiers back home.

There are two kidnapped soldiers that were kidnapped across our international borders. And if we get them back, I guess cease-fire negotiations could indeed be on the table.

BLITZER: If they're -- if the two soldiers were returned, would Israel immediately agree to a cease-fire?

AYALON: I think we can certainly discuss it. We will view it as a very positive development, and then we can talk with -- we would like very much to talk with either the Lebanese government or any responsible power there.

But yes, we need to get our soldiers there. Also, in the aftermath, of course, we'll have to make sure that 1559, the U.N. Security Council resolution, is fully implemented.

BLITZER: But let me just make it straight -- get it straight. As long as those two Israeli soldiers are held captive by Hezbollah there will be no cease-fire?

AYALON: Right. BLITZER: That's an absolutely bottom-line Israeli position?

AYALON: Well, I think it's also by definition, the hostilities, the continuation of hostility. As long as these two soldiers are in the hands of the Hezbollah, that means an ongoing continuation of hostility. That doesn't mean a cease-fire.

BLITZER: What if they come back and say, you can have the two soldiers, but give some Lebanese prisoners or Palestinian soldiers that Israel holds, give them up in the process?

AYALON: Well, that is totally unacceptable, and this will actually motivate the Hezbollah to continue with this kidnapping. And the whole area is going to go down south with a slippery slope that we have been seeing on the country.

They have to give it unconditionally. There is no comparison between the two kidnapped soldiers and the convicted murderers, the Lebanese convicted murderers, terrorists that we have -- that have been undergoing trials and found guilty.

BLITZER: Is there an Israeli position, a flat Israeli position on the introduction of an international peacekeeping force coming into the region?

AYALON: I think it's way too premature to speak about any international peacekeeping. There's no peace, so there's no peacekeeping to guard.

BLITZER: But if there were a cease-fire, would you support an international force, a United Nations-based force coming into the region?

AYALON: I would say that the most important thing is to strengthen the hand of the Lebanese army. This is the most important. To the extent that an international force can help that, and help the Lebanese government and the Lebanese people, we would consider that favorably.

BLITZER: But you understand that if the Lebanese army were to go into southern Lebanon and take over, Hezbollah would presumably resist that and then there would be another civil war in Lebanon?

AYALON: Well, I hope not. And this is exactly what we're doing now.

I hope that the aftermath of this operation, that Hezbollah will be totally neutralized as a military power. And we've seen them now building an enormous -- enormous military capabilities, with the help of Iran and Syria, who have been denying it all along. But now we see that all the shells we received, the rockets, the guided missiles, all these very sophisticated and deadly weapons are all Iranian and Syrian manufactured.

BLITZER: There have been some analysts who have suggested that Israel had this plan in the works now for some time, waiting for an opportunity to implement it. The kidnapping of these Israeli soldiers, the killing of some other Israeli soldiers has given Israel this opportunity to try to destroy or degrade Hezbollah in a significant way, that you're exploiting the situation.

What do you say to those analysts who insist that is what your strategy is?

AYALON: Well, this is totally wrong. And not at all, Wolf.

Actually, we have been very restrained for the past six years. If you remember, May 2000, Israel completely evacuated, pulled out of Lebanon, to the very last inch. The U.N. came and demarcated the line, which is what is called the blue line, which is the international border, recognized universally between Lebanon and Israel.

BLITZER: Except for the Shebaa Farms area, which is a disputed area, the Lebanese keep saying that this is Lebanon and Israel -- it's a tiny little area.

Why doesn't Israel just withdraw from that area?

AYALON: It's a pretext. Actually, this is not Lebanese territory. It is Syrian territory.

BLITZER: Well, the Syrians -- the Syrian ambassador the other day here said they recognize it as Lebanon.

AYALON: Well, (INAUDIBLE) this area to Lebanon. Syria doesn't even recognize Lebanon as a free country.

BLITZER: If Syria were to say it's Lebanon, the Shebaa Farms, would Israel pull out?

AYALON: Well, that would be a very manipulative move to do it in retrospect. But if this is the case, we may consider it. But I would like to see first the Syrians give this area to Lebanon.

You have all the U.N. maps which show pre-'67 and after '67, shows Shebaa Farms as Syrian territory. This was -- and, by the way, Shebaa Farms was never an issue between us and Lebanon until May 2000, when we pulled out.

So this is an excuse for them to continue what is called the resistance or the terror by the Hezbollah.

BLITZER: We have to go, but a quick question. Do you want Condoleezza Rice to come to the region right now?

AYALON: Well, Condoleezza is a great friend, a great leader, and she would be welcome any time. But it's not the issue of coming, it's the issue of timing.

Right now I think the timing is wrong, and she thinks the timing is wrong. And I believe at the first opportunity that she can come and make an effect, a positive effect in the region, I am sure she will come and be very well received.

BLITZER: So you think her trip is at least a week away?

AYALON: I don't want to term it in time or moments, but certainly right now it's not the time. We have to see where there is a situation whereby the conditions are conducive for her trip. And I'm afraid right now, this is not the case.

BLITZER: Daniel Ayalon is Israel's ambassador to the United States.

Thank you, Mr. Ambassador for coming in.

AYALON: Thank you.

BLITZER: And coming up here on THE SITUATION ROOM, we're going to get the other side of the story. That would be Lebanon's side of the story. Lebanese Ambassador Nouhad Mahmoud, he's a representative of Lebanon's Ministry of Foreign Affairs. He's been dispatched to the United Nations. He's standing be to join us live as well right here in THE SITUATION ROOM.

Plus, U.S. reaction to the growing crisis. The under secretary of state, Nicholas Burns, he's just back with Condoleezza Rice from the G-8 summit in Russia. He's standing by to join us live as well.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM.

I'm Wolf Blitzer in Washington.

The Lebanese government maintains it does not condone the actions of Hezbollah, yet Hezbollah's leader says his group is defending Lebanon, fighting for the Lebanese people. So who exactly is in charge of Hezbollah?

Our Brian Todd has been investigating. He's joining us now from the newsroom -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this man is, by most accounts, one of those classic contradictions in the Middle East, a man considered influential, politically savvy, and very dangerous.

(BEGIN VIDEOTAPE)

TODD (voice over): His whereabouts are a tight secret, but he's the most public Arab voice against Israel in this fight.

HASSAN NASRALLAH, HEZBOLLAH LEADER (through translator): We will continue -- we will be able to defeat the enemy.

TODD: He's led one of the region's most notorious militant groups into the mainstream of Lebanese politics, but has also led his forces into deadly confrontations with Israel. Two of the many contradictions of 46-year-old Hassan Nasrallah, the defiant leader of Hezbollah.

ROBIN WRIGHT, "WASHINGTON POST": Hassan Nasrallah is a man who combines the kind of charismatic Islamic populist ideology of Ayatollah Khamenei, Iran's revolutionary leader, with the wily guerrilla tactics of Che Guevara.

TODD: Born in Beirut, trained as a Shiite cleric in Iraq and Iran, Nasrallah joined Hezbollah when it was established in 1982, became its leader 10 years later when his predecessor was assassinated by Israeli forces and suffered his own personal loss in the late 1990s.

HISHAM MELHEM, "AN-NAHAR" NEWSPAPER, LEBANON: He lost a son fighting Israeli troops when they were occupying South Lebanon. So there's a good deal of stature.

TODD: Stature in Lebanon and beyond, according to analysts. They say for dispossessed Muslims, Nasrallah has emerged as a more pragmatic counterbalance to Osama bin Laden, who Nasrallah has condemned as despicable.

JON ALTERMAN, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Osama bin Laden comes across as removed. He talks in sort of cryptic sentences. Hassan Nasrallah doesn't talk in cryptic sentences. He raises his fist and he tells you how the world needs to be.

TODD: But the two have common enemies. At the same time Nasrallah was leading Hezbollah's rise in the Lebanese parliament. Intelligence analysts say he helped shelter Imad Mughniyeh, the alleged mastermind of the 1983 bombing of the Marine barracks in Beirut.

(END VIDEOTAPE)

TODD: Could this be the end of the line for Hassan Nasrallah? Some analysts believe he miscalculated this time, not figuring Hezbollah's kidnapping of two Israeli soldiers would escalate to this point. They say Nasrallah's fate may depend on how long Israel wants to keep up this fight -- Wolf.

BLITZER: Brian Todd reporting for us. Thanks very much. And joining us now is Ambassador Nouad Mahmoud. He's a representative of Lebanon's Ministry of Foreign Affairs.

Mr. Ambassador, thanks very much for coming in.

We just heard the Israeli ambassador to the United States say that if those two Israeli soldiers are returned to Israel right now, Israel would then consider an immediate cease-fire. Is that doable to get those two Israeli soldiers back to Israel?

NOUHAD MAHMOUD, LEBANESE FOREIGN MINISTER REPRESENTATIVE: It could be done, I think, when the cease-fire was solved. We are asking just for immediate and comprehensive cease-fire. BLITZER: So you're saying that there has to be a cease-fire first and then the Israeli soldiers can be returned? Why not -- why return the Israeli soldiers first and end this warfare?

MAHMOUD: As always, it's a game of power, and I think that's what we're witnessing. That's why I don't think that happened in the past, and I don't see it happening now.

BLITZER: Does the Lebanese government, which you represent, have the power to convince Hezbollah, which is actually a member of your government, to give up those soldiers?

MAHMOUD: By convincing we can, but not by force.

BLITZER: so what do you see happening in the short term? The fighting is presumably going to continue as long as those soldiers are held.

MAHMOUD: Well, the fight will continue, but the soldiers cannot be returned under these conditions. I mean, it's not in our hands now, but it will be better conditions if we get diplomacy a chance.

BLITZER: The secretary of state, Condoleezza Rice, says she's ready to go back, go to the region to try to help. The Israeli ambassador says now is not the right time; it needs a little time to percolate, if you will. What do you want her to do?

MAHMOUD: First, we want to prepare the ground for her to have a successful mission. I don't think now the conditions are right for that. But we want complete cease-fire; that's what we want. Because my country is under destruction and under a killing machine, and we don't know how things can be done under these circumstances.

BLITZER: Here's what the Israeli prime minister, Ehud Olmert, told his parliament earlier today. "The stability and tranquility of a free Lebanon is something that Israel wishes for. The battle that we're currently waging is against terrorists who are simply the subcontractors of regimes that support terrorism and oppose peace on the axis of evil that stretches from Tehran to Damascus."

The allegation the Israelis make and some U.S. officials make is Syria, and Iran are really calling the shots right now, telling Hezbollah what to do. Is that accurate?

MAHMOUD: I don't think that's completely accurate. Hezbollah are part of the Lebanese society, and the Lebanese people, unfortunately, they are not feeling the kindness of Israel. They are feeling the fear (ph) of Israel against all of them, against the infrastructure or to hear from the Israeli government officials such a statement.

But we see that Lebanon is the one that's until attack, not Hezbollah. Hezbollah, they're very limited to now. So until now, they will continue their action.

BLITZER: The British prime minister, Tony Blair, and Kofi Annan, the U.N. Secretary-General, are talking about a new United Nations security force, if you will, going into the region to try to ease this crisis. What's Lebanon's position on that possibility?

MAHMOUD: Any international contribution can ease the crisis, but not enforce settlement, because the settlement can be reached politically.

BLITZER: There's been some division clearly in the Arab world reacting to what going on in Lebanon. Prince Saud al-Faisal, the foreign minister of Saudi Arabia, said this. He said, "These acts," referring to Hezbollah's attacks on Israel, "will pull the whole region back to years ago, and we cannot simply accept them."

I guess the Saudis, the Egyptians, the Jordanians, other more moderate Arab states, want Hezbollah to give up these Israeli soldiers, and they're saying that Hezbollah had no business crossing the international border and taking these Israeli soldiers. What's your reaction to that?

MAHMOUD: Well, even the Lebanese government did declare from the first day that it doesn't condone, it doesn't approve, it doesn't accept such action, but now we are, far, far beyond the reaction to the reaction. We are witnessing the destruction of Lebanon.

BLITZER: One final question, Mr. Ambassador before I let you go. Last week, an ambassador in Washington supposedly was recalled because of comments he made on CNN that seemed to support Hezbollah. You represent the foreign ministry. What is his status, the Lebanese ambassador to the United States?

MAHMOUD: As I know, he is back in America.

BLITZER: So he has not been recalled?

MAHMOUD: I didn't hear about it.

BLITZER: Mr. Ambassador, thanks very much for coming in. Hopefully, we'll speak with you again in the coming days. Are your intentions to stay in New York?

MAHMOUD: Yes, yes, I'm here.

BLITZER: All right, good. We'll speak with you in the next few days, as well. Nouhad Mahmoud, Lebanese -- Lebanon's special envoy, special representative from the foreign ministry. He's at the United Nations right now.

And coming up, we'll have more on the deepening crisis in the Middle East. A candid conversation caught on tape. It involves the president of the United States, the prime minister of Britain. We'll let you listen in as they express their frustration about the crisis in the Middle East.

And Israel says its aircraft hit a truck in Beirut that had missiles capable of reaching Tel Aviv. Tom Foreman standing by with more on Hezbollah's missile capabilities. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're watching the story in the Middle East unfold. The crisis in the Middle East continues. We're going to go right back to the region, but I want to check some other important stories making news right now. Betty Nguyen joining us from the CNN Center -- Betty.

BETTY NGUYEN, CNN CORRESPONDENT: Wolf, from sea to steaming sea, a wave heat is gripping most of the U.S. Volunteers are running door to door to check on elderly residents, and hand out bottled water. Temperatures are well into the 90s all across the Northeast and the Atlantic states, but the humidity makes it feel even hotter. Heat warnings and advisories are in effect in many areas.

And cultural authorities in India are keeping watch after a powerful earthquake and tsunami struck the Indonesian island of Java. Red Cross officials say at least 80 people were killed when the six- foot wave struck popular beach resource on Java's south coast earlier today. Many people are still missing at this hour. The tsunami came hours after the magnitude 7.7 earthquake deep in the Indian Ocean.

And a terrifying scene in Iraq today. Take a look. Iraq's defense ministry says at least 40 people were killed when two car bombs exploded in a market place in Mahmoudiya. Officials say gunmen then opened fire and threw grenades into the crowds, killing women and children. They say three of the attackers have been arrested. Separately, though, three U.S. soldiers were also killed in Iraq -- Wolf.

BLITZER: Betty, thank you very much. Betty Nguyen reporting.

Lou Dobbs getting ready for his program. That begins, as you all know, right at the top of the hour. He's standing by to tell us what he's working on.

I can only imagine.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you very much.

Coming up, we'll have complete coverage of the escalating conflict between Israel and Hezbollah, as well as the involvement of Syria and Iran. Iran tonight appears to be working covertly to fulfill the Iranian president's threat to wipe Israel off the face of the map. We'll have a special report on Iran's support of Hezbollah and other radical Islamist terrorists around the world.

The United States has finally begun to evacuate our citizens from Lebanon, days after other countries began their rescue operations. We'll have that report.

And the U.S. ambassador to the United Nations, John Bolton, joins me to discuss diplomatic efforts to end this conflict.

And I'll be joined by three of the country's foremost authorities on the Middle East, with both the Israeli and the Arab view. And our special guest tonight, former secretary of state, Henry Kissinger, on U.S. geopolitical strategy. We hope you'll be with us. All of that at the top of the hour -- Wolf.

BLITZER: Lou, sounds like an excellent hour as usual. Thanks very much.

And still to come here in THE SITUATION ROOM, is there any hope diplomacy can cool this crisis in the Middle East? Standing by, a top State Department official who's just back from the G-8 summit with Condoleezza Rice, Nick Burns. We'll speak with him live.

And remember that other flashpoint of North Korea? Our own Zain Verjee is there at the demilitarized zone between North and South Korea. Zain will report from the region. That's all coming up.

(COMMERCIAL BREAK)

BLITZER: We're going to go back to the region, much more coming up on the crisis in the Middle East in just a moment, but there are also some important developments in the continuing standoff right now with North Korea.

The U.S. Navy says it has enough capability in the Asia Pacific region to deal with any nuclear threats from North Korea. Today the Navy said it intends to increase its military presence in the Pacific, but the Navy says the decision is not necessarily based on North Korea's recent missile tests.

Meanwhile, our Zain Verjee is in the demilitarized zone separating North and South Korea with a unique look at the tensions between both of these countries. Zain is joining us now live via broadband -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, hello.

I want to show you something very, very rare. We've got the fantastic opportunity. You are looking right into North Korea. The sun is rising now, and yesterday during the day we had a chance to take a closer look.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Glares, scowls and sneers. The most loyal of North Korea's troops serve here, on guard at the demilitarized zone that splits North from South, back to back with U.S. and South Korean soldiers, separated only by a 16-inch concrete line. If you cross it, the consequences could be deadly.

(on camera) That's North Korea, and we're looking at North Korean soldiers on the other side.

Marching away from us, marching away from the military demarcation line. They're so close we can see the expression on their faces. Stern. (voice-over) At the DMZ, it's all about being macho. South Korean soldiers six feet tall, wearing shades, march out to position themselves opposite their enemies, filling the cuffs of their pants with ball bearings, to sound more intimidating.

Cameras perched on North Korean guard towers track our every move. The U.N. command cameras on the South Korean side eyes the other side, too. A North Korean soldier trains his binoculars on us, while another peeps through a window, then abruptly withdraws.

(on camera) This is the North Korean People's Army building, and you can identify it by the silver structure. The blue ones over there are actual representatives of the U.N. building. But as I'm standing here, the North Koreans are actually going behind the curtains and every so often looking at us, taking a look at us. And it's actually quite humorous when we're standing out here filming them. They're looking right now. Take a look.

(voice-over) And the North Korean soldiers aren't the only ones watching. A Chinese group visits on the other side, filming us as we film then.

While the hard stares and tough guy poses were apparent, what's also striking is the apparent atmosphere of casualness. North and South Korea are still officially at war. A peace treaty has never been signed. The troops here would be on the frontline of fire if a battle were ever to break out again.

(END VIDEOTAPE)

VERJEE: And, Wolf, troops here have described the atmosphere as surreal. And you know, it really is that. You really do get a sense of strangeness and tension when you're here.

I know that right behind me right now as we're doing this live shot it's very likely that the North Koreans are looking, they're watching through the binoculars.

Right next to me I have a South Korean soldier here for my own protection, and also, Wolf, I've been made to wear a blue armband, specifically instructed to wear it on my left hand to indicate to the other side that we are not hostile. We are media -- Wolf.

BLITZER: Excellent report, Zain. Be careful over there. We'll continue your exclusive reports throughout this week here in THE SITUATION ROOM. Zain Verjee reporting.

Up ahead, Israel says its aircraft hit a truck in Beirut that had missiles capable of reaching Tel Aviv. Our Tom Foreman standing by with more on Hezbollah's missile capabilities.

And Jack Cafferty wants to know what you think Iran's role may be in this current warfare in the Middle East. In minutes, Jack has your e-mail. Stay with us.

(COMMERCIAL BREAK) BLITZER: This just coming in. We've just been told by the Lebanese army, which has confirmed to CNN, that one of its military bases has been hit in an area called the Jamhar (ph), northeast of Beirut. No immediate reports of casualties. We're going to watch this story, get more on it as it becomes available. Apparently, the Lebanese military base has just been hit by an Israeli air strike.

There are new tolls now on the number of dead in this conflict. Lebanon says 170 people, at least, have been killed in Lebanon; 429 have been wounded. Israel says it's lost 24 people; more than 300 have been hurt.

Also, we've learned the secretary of state, Condoleezza Rice, will in fact go to the region, go to the Middle East, to try to help ease the tensions. No word yet, though, on when she will leave Washington.

That item, among many, coming from a private conversation involving President Bush, a conversation that was caught on an open microphone.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: She's going. I think Condi's going to go pretty soon.

TONY BLAIR, BRITISH PRIME MINISTER: Well, that's all that matters. If you see it will take some time to get out of there. But at least it gives people...

BUSH: It's a process, I agree. I told her your offer, too.

BLAIR: Well, it's only -- or if she's going to, or if she needs the ground prepared, as it were. Obviously, if she goes out she's got to succeed, as it were, whereas I can just go out and talk.

BUSH: See, the irony is what they need to do is get Syria to get Hezbollah to stop doing this shit and it's over.

BLAIR: Because I think this is all part of the same thing. What does he think? He thinks if Lebanon turns out fine, if he gets a solution in Israel and Palestine, Iraq goes in the right way, he's done it. That's what this whole thing's about. It's the same with Iran.

BUSH: I feel like telling Kofi to get on the phone with Assad and make something happen. We're not blaming Israel. And we're not blaming the Lebanese government.

(END VIDEOTAPE)

BLITZER: And as you just saw here live in THE SITUATION ROOM, both the Lebanese envoy at the United Nations as well as the Israeli ambassador to the United States, both agree this is not necessarily an appropriate time for Condoleezza Rice to come to the region, at least not right now. They say they still need time to prepare for her trip to the region. We'll find out what's going on shortly.

Let's bring in CNN's Tom Foreman right now. He's got more on a new generation of Hezbollah weapons, apparently, that could potentially threaten Israel.

What are you picking up, Tom?

TOM FOREMAN, CNN CORRESPONDENT: This has been quite a surprise, really, this whole process to learn about this.

One of the mainstays of Hezbollah for many years now has been the Katyusha rocket. It's a relatively low-tech, been around for decades. It describes a whole group that have a very limited range: five, 10 miles, that sort of thing. That's what they've been firing across the border for a long time. That's what they're firing now.

But there indications, and the Israeli army is convinced, that there is now a new threat in the hands of Hezbollah, not only now, but also in the future.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Military analysts believe over the past five years or so, Hezbollah has been bringing more powerful, longer- range rockets in from Iran via Syria. These rockets are less portable than Katyushas and must be launched from special equipment, normally mounted on some sort of vehicle, which makes them more easily spotted and attacked by airplanes. But look at the difference these rockets make.

In this simulation, a rocket is being fired from Lebanon south into Israel. By this point in its flight, an old Katyusha would already be out of fuel and falling. But not these new rockets, armed with warheads that can weigh several hundred pounds. Military experts say they can be reasonably well targeted on the city of Haifa, about 20 miles away, and so far it is believed about two dozen have hit there.

Israeli military officials say their warplanes destroyed at least one truck carrying some of these new rockets, but Hezbollah is believed to have hundreds, some capable of reaching even further into Israel in the future.

(END VIDEOTAPE)

FOREMAN: It is not entirely clear if they have enough launchers to handle all of these, and obviously bringing them out exposes them to danger, so they may be very careful with that. Nonetheless, a new development that has surprised a lot of people in the world.

BLITZER: Tom Foreman, thanks very much for that "Welcome to the Future" report for us. Tom Foreman here in THE SITUATION ROOM.

Up next, the growing conflict in the Middle East has Jack Cafferty wondering, what is Iran's role? Jack's standing by with "The Cafferty File". Stay with us. (COMMERCIAL BREAK)

BLITZER: Right to Beirut, Nic Robertson is on the scene with more on this latest Israeli air strike.

What are you picking up, Nic?

NIC ROBERTSON, CNN CORRESPONDENT: Wolf, in the beginning of the last hour, we told you we can hear Israeli planes flying overhead. The Lebanese army tells us that one of their barracks 12 miles from where we're standing has been hit. They say they have casualties. They won't specify exactly how many casualties they have.

Also air strikes continuing in the southern neighborhoods of Beirut, the Hezbollah's heartland. We know that's where a lot of the Hezbollah leadership lives. That's where the bombing is going on this evening right now, Nic.

BLITZER: Much more coming up in our 7 p.m. Eastern hour. Nic, thanks very much.

Let's check in with Jack Cafferty in New York -- Jack.

CAFFERTY: This hour's question, Wolf, is what is Iran's role in the growing conflict in the Middle East? We got a lot of e-mail.

Jameson in Greenville, North Carolina, writes, "Iran wants nothing more than chaos in the Middle East as long as the chaos is not in Tehran."

Henry writes in Michigan: "Iran is to Hezbollah as the U.S. is to Israel."

Ed in Las Angeles: "Iran's desire is simply to commandeer the globalization of Islam."

Barb in Oregon writes, "Jack, Iran is the tail that's wagging the dog of Middle East politics. Good thing we invaded Iraq."

Jim in Maui writes, "Iran is the source of the current Middle East conflict as well as being the No. 1 terrorist state in the region. There is no long-term solution to this conflict without destroying Iran's nuclear and military infrastructure, setting them back at least 20 years. The United States could accomplish this without putting a single boot on the ground."

This from Jonathan in Loudonville, New York: "Seems to me it's time for President Bush to sign an executive order rescinding the self-imposed ban on assassination as a tool of statecraft. There are several people running countries and/or terrorist organizations that the world could well do without."

If you didn't see your e-mail here, we invite you to go to CNN.com/CaffertyFile, where we put up more of these online.

And at 7 p.m., we're going to take a look at this whole idea of democracy in the Middle East. It ain't working in Iraq. And it ain't working in Lebanon. And it ain't working in Palestine. And it ain't working in Iran. And there's just a real question mark, Wolf, as to whether or not this is a form of government that's adaptable to that part of the world.

BLITZER: We'll watch together with you. Thanks very much, Jack. That's all coming up an hour from now when we're back in THE SITUATION ROOM.

Remember, we're here 4 to 6 p.m. Eastern, back for an hour from 7 to 8 p.m. Eastern. Much more coming up. In the meantime, let's go to Lou Dobbs in New York -- Lou.

DOBBS: Thank you, Wolf.

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