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Israeli Warplane Targets Bunkers used by Hezbollah Leaders; More Americans Expected to Leave Lebanon Tomorrow; U.S. Law Enforcement Agencies Warned to Watch for Possible Hezbollah Ties; Some People Moving to Middle East Right Now

Aired July 19, 2006 - 19:00   ET

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

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. 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 the latest on the growing crisis in the Middle East.
Happening now -- thousands of Americans finding safe haven in Cyprus, leaving the bloodshed in Beirut behind them. It's 2:00 a.m. Thursday in Larnaca where a cruise ship packed with evacuees docked just a short while ago. Does a more dangerous air rescue mission lie ahead?

On the Mideast battlefield, deadly new exchanges between Israeli troops and Hezbollah fighters. We'll have live reports on the fighting including a late word on an Israeli air strike tonight targeting a Hezbollah bunker. Were key Hezbollah leaders inside?

And could the warfare in the Middle East spread to this country? It's 7:00 p.m. here in Washington. Top U.S. officials are raising red flags tonight about Hezbollah and the possible threat to homeland security.

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

The moment many Americans have been waiting for and it's happening right now in Cyprus. The cruise ships, The Orient Queen arrived at the port of Larnaca just a short while ago with some 1,000 Americans and Britons onboard. Their week long ordeal in the crossfire in Lebanon finally over. Hundreds more Americans are expected to be evacuated from Beirut tomorrow.

Meanwhile, Israeli warplanes are on the attack tonight in Lebanon. The Israel defense forces say it used 23 tons of bombs to strike a south Beirut bunker used by what they say were top Hezbollah militia leaders. There are no immediate reports of casualties.

Hezbollah fighters fired more rockets on northern Israel today. Israeli police say an attack on Nazareth killed two children. Israel now puts its death toll from this conflict at 29. The Lebanese prime minister says more than 300 Lebanese have been killed.

Our correspondents are standing across the region and here in the United States. Our chief international correspondent Christiane Amanpour is in northern Israel. Chris Burns is standing by in Cyprus. Our senior Pentagon correspondent Jamie McIntyre is in Washington.

Let's go to Beirut first with late developments in the Lebanese capital from our Nic Robertson. He's on the scene for us there. What do we know about this -- Israelis used they say they of 23 tons of bombs to try to go after Hezbollah leadership.

NIC ROBERTSON, CNN SR. INT'L CORRESPONDENT: Wolf, we have now from the Hezbollah camp here, from Hezbollah officials a denial of that. They say what has been targeted in the southern suburbs of Beirut today is a religious facility that is under construction. They say this facility has nothing to do with Hezbollah. They say that several missiles struck this facility that was only built up to about one floor up from the ground and that there have been no casualties in this.

Now also, we have heard this evening that an Israeli newspaper on their Web site, Al Manar had reported that Israeli officials had told them that Israeli intelligence had information that Hassan Nasrallah, the head of Hezbollah was in this building at the time. We have had a straight out denial from Hezbollah that that is not the case. They say categorically not.

That their leader, Hassan Nasrallah, was not targeted by any bombing tonight, was not in the bunker of any building that was bombed, was not in this religious facility. That is what Hezbollah is telling us tonight, essentially completely scorching and denying reports that 23 tons of bunker busting bombs might have been dropped on their leadership headquarters -- Wolf.

BLITZER: As of right now Hezbollah television is still be doing what it would normally be doing. They're not in any somber music or reading Psalms or anything like that, which would indicate that perhaps some of the leadership might have been killed.

ROBERTSON: Wolf, it's as it has been all day, rousing military type passionate, nationalist music, videos of Hezbollah, fighters in action, very rousing stuff, reports of supposed Hezbollah action, some that haven't been confirmed by other media sources. This is what's been on Al Manar TV today. Nothing, no change in that programming, nothing to give us any indication contrary to what Hezbollah is already telling us -- Wolf.

BLITZER: All right. Thanks very much, Nic, for that.

Let's go over to Cyprus where hundreds of Americans are no doubt relieved to be out of way of harm's way in Lebanon. They have literally just arrived on board the cruise ship, The Orient Queen. CNN's Chris Burns is in Larnaca in Cyprus tonight with more. They arrived, what, about just a little more than an hour ago, right Chris?

CHRIS BURNS, CNN CORRESPONDENT: That's right, Wolf. And they're over my shoulder in that -- The Orient Queen over my shoulder there. They are stuck in the boat at the moment because there's a process going on. This is part of an eight-ship flotilla. Through the night some 7,000 people are being moved including those 1,000 Americans and a few British nationals aboard that ship over my shoulder. But there are two other ships over here, if you've got a minute. Over there is this Danish ferryboat that is carrying another 900 Danes and other Europeans and over here is a French destroyer that brought over some 300 or so people. Those are being debarked -- disembarked first. They're putting - (UNINTELLIGIBLE) buses. They're taken over to a custom's house that is nearby.

They are processed. That is massive full. There are flags of several countries as people line up to those various processing lines. And now what we are waiting for is that those buses finish those disembarkations and the processing so that the Americans can now get off of that ship over there. And this is just a first of a series of American sealifts.

There are some eight or nine U.S. Navy ships that are involved in this process as well. Another passenger ship is said to be commissioned as well. There could be thousands of Americans moved per day through the end of this week, moving some of those 25,000 American nationals that are still in Lebanon.

BLITZER: Chris, it's just after 2:00 a.m. in Larnaca where you are. What happens to these nearly 1,000 Americans on The Orient Queen right now? Are they going to disembark and go to hotels and get ready to fly out of there?

BURNS: Well a lot of the people here are just turned right around and taken to the airport to be flown off. Now at this rate, with this many people coming in, it could be that some people may have to spend the night. What we have been hearing is that some people are so proactive, that they're actually grabbing their cell phones on that ship and booking their own hotels.

Others may have to sleep perhaps in that processing center at the airport. There's even talk about maybe setting up some large halls where people can crash for the night and then go on to the airport. But what they're trying to do here in Cyprus, which has the expertise over numerous conflicts in this region. This has been a place of safe ground for people to come to; they know how to do this. They bring people in here and they turn around and send them to the airport as soon as they possibly can -- Wolf.

BLITZER: All right, Chris we're going to check back with you. Thank you very much. Chris Burns on the scene for us in Larnaca.

And with evacuations from Beirut clearly picking up, U.S. officials are now turning their attention to Americans trapped in other even more dangerous parts of Lebanon.

Our senior Pentagon correspondent Jamie McIntyre is joining us with that part of the story -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, at this point, the possible helicopter evacuation of Americans stranded in parts of Lebanon is just an option. It's not even the most likely option, but it is a potentially dangerous option.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The U.S. is considering sending U.S. Marine helicopters deep into Hezbollah controlled southern Lebanon to extract Americans but only if they can't get safely to coastal evacuation points, according to a senior defense official. It's one reason four ships from the Hiro Jima (ph) Expeditionary Strike Group (ph) along with 1,200 Marines from the 24th Marine Expeditionary Unit are on route to Lebanon, the three-star admiral in charge tells CNN.

VOICE OF REAR ADM. PATRICK WALSH, U.S. 5TH FLEET COMMANDER: The idea is that we have the capability to extract people no matter where their location is. And without getting into a lot of detail, Wolf, that's part of our planning effort now.

MCINTYRE: Publicly, U.S. commanders are hesitant to talk about what could be a risky mission flying over territory controlled by an organization labeled a terrorist group by the U.S. government. The preferred option remains bussing people from the south to the port of Beirut where the can transfer the ships, but right now that's not safe.

MAURA HARTY, ASST. SECRETARY OF STATE: As you have heard us say before, we are really -- we do not encourage people to go over land on their own at this point.

MCINTYRE: Pentagon officials stress the current plan is for everyone to leave Lebanon from the port of Beirut, but said no options are being ruled out entirely.

BRIG. GEN. MICHAEL BARBERO, JOINT CHIEFS DEPUTY DIRECTOR: We are also forming a task force, which gives the on scene commander the absolute flexibility to execute his mission in a very dynamic situation.

(END VIDEOTAPE)

MCINTYRE: The State Department thinks there are several hundred Americans in southern Lebanon. It's not sure of the exact number and it says for now those people are in a holding pattern because it's not safe or prudent to move them -- Wolf.

BLITZER: So what the upshot is military helicopters -- transport helicopters might actually go down there in the heavily Shiite controlled parts of south Lebanon to try to extract Americans?

MCINTYRE: Again, that would be if the judgment was made that they couldn't get to a point where they could bus them out. And right now they just don't know. They call it a fluid situation, but that's one of the reasons commanders want to have a lot of options available. If things were to get worse suddenly, they have the ability or they will within a day or so to quickly move in and pull Americans out. Even though right now that's not the preferred option.

BLITZER: That would be a very dangerous operation clearly. Jamie, thank you very much.

Let's check in with Jack in New York. He's got the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, it doesn't look like a cease- fire is going to come any time soon to the Middle East with Israel now saying that its offensive there could go on for weeks. Calls for an immediate cease-fire from Arab nations and some people at the United Nations are being ignored. Instead, Secretary of State Condoleezza Rice is trying to get support for something she calls a cease-fire of lasting value, which means the Lebanese army would take over the south of the country where Hezbollah has been fighting with Israel for years.

Rice says, "The Middle East has been through too many spasms of violence and we have to deal with the underlying conditions." That's quote. That's the problem though. Dozens of cease-fires, truces, peace agreements, you name it, have come and gone over the years. None of them at the end of the day has proved to be the answer to the ongoing violence in that region. It always reoccurs and unless the Israeli/Palestinian issue is resolved once and for all, it probably always will.

So the question is this. What is a cease-fire of lasting value? E-mail your thoughts on that to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile. It's a story that's replayed over and over and over again in that part of the world, Wolf, and I don't know if it's ever going to end.

BLITZER: Jack, thank you very much. Jack Cafferty in New York.

Coming up, the ground war intensifies. We're going to go live to our Christiane Amanpour. She's along the Israeli/Lebanese border. Right now that's where Israeli and Hezbollah forces have been facing off including some ground fighting today.

Plus the White House once again says no to an immediate cease- fire. Our John Roberts is standing by with the latest on the Bush administration's strategy.

And will animosity over the fighting in Lebanon lead to possible threats right here in the United States? Kelli Arena will have tonight's "Security Watch". Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here are the latest developments on the situation in the Middle East. The cruise ship, The Orient Queen arrived in the port of Larnaca just a short while ago. Onboard about 1,000 Americans and Britons. It's the first of three ships chartered by the U.S. government to arrive in Cyprus.

Israeli warplanes, meanwhile, are on the attack in Lebanon once again. The Israel defense forces says it used 23 tons of bombs to strike a south Beirut bunker they said it was used by top Hezbollah militia leaders. Hezbollah says its leaders were not hurt in the strike.

Secretary of State Condoleezza Rice will meet with the United Nations Secretary-General Kofi Annan and the European foreign affairs chief tomorrow. Officially Lebanon says 216 people have died and 524 are hurt since the conflict began eight days ago. But Lebanon's prime minister says 300 people are dead in Lebanon. Israel says 29 people have died in Israel and over 300 have been hurt.

Israel is keeping up its assault on Hezbollah targets in Lebanon, but it's also suffering repeated rocket strikes. Our chief international correspondent Christiane Amanpour is following all of the late breaking developments from northern Israel. There was some intense ground warfare today, Christiane, not far from where you are.

CHRISTIANE AMANPOUR, CNN CHIEF INT'L CORRESPONDENT: Yes. I mean not really ground warfare. These are still small elements of the Israeli army, which is going into the immediate border area in southern Lebanon, we're told, on a fairly daily and regular basis to go and try to take out Hezbollah outposts, bunkers and the like. They are operating we're told with tanks and bulldozers over there to try to break this equipment and infrastructure along the border, break it down.

But today it did turn into a battle between the Israeli forces and the Hezbollah guerrillas. A battle mostly between what we saw anyway tank fire on the Israeli side going a few meters across to the Lebanese side where the Hezbollah guerillas responded with mortar and with rocket fire. In the area, a ravine where this was taking place, there were also a lot of incoming Hezbollah rockets that peppered the hills and the villages around that northern area.

We did see also an aerial fire extinguisher a small plane, dropping a red powdery substance to try to tamp down the flames in some of these villages that have been hit. Hezbollah some say has reigned (ph) something like 120 rockets over to this side today. It's one of the fiercest barrages and despite the Israeli push, it does continue.

In Nazareth they struck. Now Nazareth is homes to Israel's largest Arab population and there the Hezbollah rocket, at least of them killed two children according to Israeli sources over here. They also hit Haifa again but didn't cause any casualties. Now there are so many different conflicting ideas about what the neck step is. But certainly Israel is going to start coming under pressure because of this huge number of casualties in Lebanon. The figure is particularly concerning to the international Red Cross, which has already come out today and said that it's expressing concern about Israel's assault inside Lebanon, the number of casualties, which stands at about a ratio of ten to one right now as it is.

And they're concerned about the attack on the, what they call the Lebanese infrastructure. So, as the diplomatic process tries to figure out a way beyond an immediate cease-fire, which the U.S. and Britain are conspicuously not calling for, there are officials in this country in Israel who wonder just how long they can keep this up before international pressure comes down on them -- Lou. Wolf. BLITZER: Christiane, very briefly, what are the Israelis saying because they're pounding away with artillery and cannon fire from where -- locations not far from where you are. What are they saying they're doing to try to minimize civilian casualties?

AMANPOUR: Well, look, they say that they are -- what we are being told when we talk to the commanders over here is you know we're very sorry about those casualties. They know that there are you know a lot of casualties on the other side. But they say that they don't obviously deliberately target civilians, but they do say that Hezbollah operates within civilian areas. They also say that their main concern though is about Israeli civilians, so that is their primary concern.

And that they are attempting, and this is what we get consistently from the Israeli sources, whether it be military or otherwise, that they are trying to push Hezbollah back from the border areas so that they cannot sit on this border area and use it as a position and a launching pad to launch rockets into the northern part of this country and as we've seen as far south as Nazareth and as Haifa and potentially even beyond. So their prime concern is never to be in this situation again. That once and for all Hezbollah must be pushed back one way or another and that's what their aim is.

BLITZER: Christiane Amanpour in the northern part of Israel not far from the Lebanese border. Christiane thank you very much.

So how might the Bush administration work to try to end the onslaught on both sides? Let's bring in our senior national correspondent John Roberts. What are you picking up, John?

JOHN ROBERTS, CNN SR. NAT'L CORRESPONDENT: Good evening to you, Wolf. The diplomatic track to end the fighting is still relatively unfocused tonight. There are a lot of ideas about U.N. forces in buffer zones, but so far they are just ideas. About the only thing that's clear at this point is that Israel's main patron, the United States, is not about to tell it to stop.

(BEGIN VIDEOTAPE)

(SOUNDS)

ROBERTS: The White House again objected fiercely to the idea of a cease-fire in Lebanon, insisting anything that leaves Hezbollah in a position of strength is unacceptable.

JOHN BOLTON, U.S. AMBASSADOR TO U.N.: I'd like to know when there's been an effective cease-fire between a terrorist organization and a state in the past. This is a different kind of situation and I'm not sure that sort of old thinking, conventional thinking works in a case like this.

ROBERTS: And devising a diplomatic formula to find a way out of the conflict will be difficult says America's former ambassador to Israel.

UNIDENTIFIED MALE: There's perception that Condoleezza Rice can go in there and by herself save the day. Can she do that?

MARTIN INDYK, FORMER U.S. AMBASSADOR TO ISRAEL: Well I think that's an illusion simply because we don't have the kind of leverage that we used to have.

ROBERTS: In the past, American presidents have struck agreements with Syria to reign in Hezbollah. But President Bush has taken a harsh position with Damascus and is in no mood to give Syria the satisfaction of face-to-face negotiations.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Rather than doing that, I think it is incumbent on the United States to use whatever moral force and moral power it has and also let allies do the talking.

ROBERTS: So while Israel continues its efforts to degrade Hezbollah's capabilities, the secretary of state will enlist nations like France and America's Arab allies to support Lebanon's elected government and put international pressure on Syria and Iran, the same kind of pressure that forced Syria to withdraw its troops from Lebanon a year ago.

(END VIDEOTAPE)

ROBERTS: Of course the question that everyone is asking is how long is this going to take? Two things to consider, the White House is extremely concerned that if it goes on too much longer, moderate Arab states, the ones that they're counting on, will stop blaming Hezbollah and start blaming Israel. And while back in 1982 Lebanon did eventually kick Yasser Arafat and the PLO out of Beirut, it didn't happen until Israel had fully invaded Lebanon and laid siege to Beirut for almost two months -- Wolf.

BLITZER: John thanks very much. John is going to have a lot more on this story coming up on "AC 360" 10:00 p.m. Eastern later tonight.

Still to come tonight in THE SITUATION ROOM, a tale of two countries locked in a bitter embrace of warfare. Lebanon and Israel, how might it end? I will speak to the president of the National Dialogue Party of Lebanon and the current Israeli ambassador to the United Nations.

And death and devastation are not deterrents. Some American Jews are actually moving to Israel right now despite the conflict and some even plan to move to the very places where rockets are falling.

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

(COMMERCIAL BREAK)

BLITZER: Coming up, much more of our complete coverage of the Middle East crisis including the latest on Israel's air force dropping some 23 tons of bombs on what they say was a bunker housing top officials of Hezbollah, much more on that story coming up.

In the meantime, let's check some other important news unfolding right now. For that, we'll check in with CNN's Fredricka Whitfield at the CNN Center. Hi, Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, Wolf. Oil prices have fallen for the third day in a row. Prices hit a record high of $78 a barrel last Friday. But reports that supplies of light crude and gasoline are up has caused prices to fall. Today U.S. light crude closes at just over $72 a barrel.

House members try but failed to override a veto of a bill on stem cell research. The bill would have allowed couples to donate unused embryos to be used in federally funded research. It was passed by the Senate yesterday, but vetoed by President Bush today. It was the president's first veto since taking office in 2001.

And don't mess with the Pledge of Allegiance. That's the word from the House of Representatives today. The House voted overwhelmingly to bar federal judges from ruling on the constitutionality of the Pledge of Allegiance. Atheists have challenged the pledge because it includes the words "under God". The measuring now goes to the Senate -- Wolf.

BLITZER: Fred, thank you very much. And just ahead, we're monitoring everything that's happening in the Middle East crisis tonight. We're going to update you on all the major developments. Plus this -- Hezbollah right here in the United States. We're going to show you why the FBI is worried the fighting may spark what are called sympathy attacks.

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

(COMMERCIAL BREAK)

BLITZER: You're back in THE SITUATION ROOM. I'm Wolf Blitzer in Washington. Tonight hugs and relief in Cyprus where hundreds of Americans arrived just a short while ago escaping the warfare between Israel and Hezbollah militants in Lebanon. The group cruise ship The Orient Queen led off a stepped-up evacuation of U.S. citizens from Lebanon.

Other new developments happening right now, the Israeli military says it used 23 tons of bombs to attack a Hezbollah leadership bunker in south Beirut, but Hezbollah denies that, saying a mosque was struck and no one was hurt.

On the diplomatic front, Secretary of State Condoleezza Rice heads to New York tomorrow for talks with the U.N. secretary-general. On Friday, she'll be briefed by a U.N. team that has been meeting with Israeli and Lebanese officials.

The Mideast escalation appears to have no clear end in sight. But what would it take to stop the bloodshed on both sides?

And joining us now from Dubai is the president of the National Dialogue Party of Lebanon and an old friend Fouad Makhzoumi. Fouad thanks very much. I know you're trying to get back into Lebanon yourself, not very easy. But give us your immediate assessment. How do the Lebanese get out of this mess that the country is in right now? FOUAD MAKHZOUMI, NATIONAL DIALOGUE PARTY OF LEBANON: Definitely we have a human catastrophe on our hands. Israel has aligned itself with the international community and the United Nations Security Council, implementing the U.N. Resolution 1559. Hezbollah definitely has aligned itself with Syria and Iran. And really what we see in Lebanon is a proxy war, trying to each one buy a seat around that table whenever that big deal is going to come.

BLITZER: Who do you blame for the current crisis?

MAKHZOUMI: There is no doubt that Hezbollah started it by kidnapping these two soldiers. But there is no way we can justify the destruction that Israel is pursuing at the moment in trying to destabilize the government. They're trying to create the status quo on the ground, which is really all it's doing is alienating the Lebanese people. Already we have half a million displaced from the south and really the human misery is beyond anybody's imagination.

BLITZER: I want to get back to that in a moment because I know you have family and good friends who are stuck in Lebanon right now. But what about this call for some sort of international stabilization force, a new international peacekeeping force? Can that get the job done in the south and disarm, disband this militia, Hezbollah?

MAKHZOUMI: I think the situation really is a function whether Israel can destroy the infrastructure of Hezbollah or not. If they can win, definitely what is being proposed at the moment, is the only solution. My biggest worry is that if this thing is going to prolong beyond the one week that the United States has given Israel, I believe the situation will really get out of hand.

BLITZER: When you say get out of hand, elaborate a little bit. Will this spread to a wider regional war, maybe even involving Syria?

MAKHZOUMI: Already the tension between the Sunnis and the Shiites, similar to what we have in Iraq, is already rising. And already Iran has made a statement saying that they would like somehow to be involved in whatever settlement is there.

Unfortunately, the Lebanese government, as much as it's trying to spread the sovereignty over the whole country, which is -- that's the only way it can go about it. But the only problem is it didn't have a proxy on behalf of the Hezbollah and they are partners in the government in order to achieve that at the moment.

BLITZER: Fouad, let me get back to a point that you may have been alluding to earlier. I just want to get a clearer thought from you. Is it good for the future of Lebanon that the Israelis are trying to destroy as much of Hezbollah's rockets and military capability as possible?

MAKHZOUMI: There is no doubt. Lebanon can only survive with one government and one armed force in Lebanon. But unfortunately, at this stage, the government is the weaker of two links. And that partnership that was established between Hezbollah and the government after the elections in 2005, really it was so ambiguous to the point that Hezbollah now really is in a position that they can dictate terms whereby the government is so weak and they cannot do much about it.

BLITZER: What do you want the United States to do? The secretary of state, Condoleezza Rice specifically, she's planning on heading out to the region in the next few days.

MAKHZOUMI: Wolf, you know, my position has been and my dialogue party has been from the beginning, we have ignored the peace process for so long. And really this is the only currency that any opposition in the Arab world can use or has used in order to establish political aims.

My belief that if the United States is so genuine about trying to establish peace, and stop this human catastrophe, we need to reactivate the peace process. We need to bring everybody to the table. After all, the United States is the only superpower and there is no problem of negotiating with everybody.

BLITZER: And you want the U.S. to be talking directly to President Bashar Al-Assad in Syria?

MAKHZOUMI: Unfortunately, what we have heard over the microphone over the lunch in the G8 in St. Petersburg, it is very clear that most of the western world, especially the G8, recognizes that Syria and Iran has to be involved somehow, directly or indirectly. And that was when we overheard President Bush saying that he would like Kofi Annan to tell President Assad in order to stop whatever is going on that part of the world.

BLITZER: Fouad Makhzoumi, good luck to you, good luck to your family and friends in Lebanon. In fact, good luck to all of the people of Lebanon under these very, very trying circumstances. We will continue this conversation down the road.

MAKHZOUMI: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: So are we talking days, weeks or more? How long does Israel think it will take to get what it wants?

(BEGIN VIDEOTAPE)

BLITZER: Joining us now is Israel's ambassador to the United Nations, Dan Gillerman. Mr. Ambassador, thank you very much.

What's your government's assessment? What's your assessment right now? How much longer will the fighting go on?

DAN GILLERMAN, ISRAELI AMBASSADOR TO UNITED NATIONS: Well, the -- unfortunately, the fighting will go on for as long as necessary for us to finish the job.

We cannot allow ourselves to return to a point where the Hezbollah, with its lethal arsenal of weapons, will be able, at whim, to exercise terror, both towards us and towards Lebanon, and destabilize the whole region. So, we have to finish the job. We have to see Hezbollah totally disarmed. We have to see the government of Lebanon exert its authority and sovereignty over the whole of Lebanon, and deploy its forces in the south, before we can stop this operation.

BLITZER: Yesterday, we heard from the former Israeli prime minister, Ehud Barak, who suggested, it could last another week, perhaps two. Is that a rough assessment that you share?

GILLERMAN: Well, who am I to argue with Ehud Barak? But I -- I don't think it would be very wise to put a time frame on to it.

But this is certainly not a matter of hours, unfortunately, not even a matter of days. I mean, anybody who witnesses the enormous magnitude of the arsenal of weapons that has been accumulated by the Hezbollah, with weapons continuing to be shipped to them -- and, only yesterday, did we stop additional shipments from Syria -- with the -- with Iran funding the Hezbollah, to the sum of $100 million, the Hezbollah, at the end of the day, is the bloody finger on the long arms and twisted minds of both Iran and Syria.

We cannot allow this cesspool to fester on our border and to cause so much damage, both to us and to Lebanon.

And, you know, once you start operating on ex -- excising a cancerous growth, you don't stop in the middle, and sew the patient up, and say, OK, live with the other half until it kills you.

We have to make sure that Hezbollah is totally excised, before we can discuss any kind of solution.

BLITZER: Well, if that's the goal of the Israeli military, that sounds, at least to this outside observer, it's going to take a lot longer than a week or two.

GILLERMAN: Well, it may. And this outside observer is a great expert on the Middle East. And I would never argue with you, Wolf.

But it could, I think, last longer. Everybody realizes that the Hezbollah has prepared, over the last five years, over 13,000 rockets. It is all over Lebanon. It is totally impossible to distinguish between Hezbollah and the -- and Lebanon.

As the Lebanese ambassador said only yesterday, Hezbollah is everywhere. It is part of Lebanese society. That's what makes it so difficult. That's what makes it so really horrible to deal with. But that's also what makes it so necessary to deal with.

BLITZER: The secretary of state, Condoleezza Rice, is going to be at the United Nations, meeting with Kofi Annan, tomorrow night in New York.

What do you want her to do, because she's planning on going to the region?

GILLERMAN: Well, I -- I would -- it would be presumptuous of me to tell the secretary of state what to do. I totally respect her judgment. And I'm sure that she will do what she thinks is best first for the United States.

But I am sure she also has the interests of Israel at heart. But I think the secretary realizes, like most of the world -- and I can tell you that, even at the United Nations, which hasn't always been the most hospitable and sympathetic body to Israel, I can feel a lot -- a lot of understanding -- if not sympathy, then at least understanding -- for what we're doing. And maybe that is because the rest of the world understands that we're doing its work for it.

We're fighting terror. We're fighting a lethal, ruthless organization, which, today, fired rockets at Nazareth, and killed two 3- and 9-year-old children. We thought they only wanted to kill Israelis and Jews. It seems they don't care who they kill. They -- they target Muslims. They target Christians.

This horrible, torturous body has to be excised from the heart of Lebanon and from the body of our region. And I hope that the secretary -- secretary of state shares that view, and will do exactly what is necessary to see that Resolution 1559 is implemented, that the Hezbollah is disarmed, and that Lebanon finally becomes a free and prosperous country, living in peace, side by side with Israel.

BLITZER: We're almost out of time, Mr. Ambassador.

But, in the process of trying to achieve your military objectives, Lebanon's prime minister, Fouad Siniora, said you're destroying his country; you're destroying the infrastructure. More than 300 Lebanese civilians have been killed. That -- that's what he said earlier today.

And -- and -- and the argument is that Israel's response to the kidnapping and killing of its soldiers has been disproportionate. What do you say to your critics?

GILLERMAN: I -- I agree with some of our critics, who may claim that our response has been disproportionate, only for the simple reason that, had they been attacked the way we were, their response would have been far harsher. And I know which countries I'm talking about.

As to the prime minister of Lebanon, I think he has only himself to blame. He has been asked, demanded, beseeched by the international community, by the Security Council, by the Quartet, to see to it that the Hezbollah is disarmed, that Resolution 1559, that calls for exactly that, is implemented.

He has allowed his country to be taken hostage, to be raped by tyrants in the north and by terrorists in the south. And the fact that Lebanon today is suffering is not something we wanted. We have great respect for Lebanon. We have no quarrel or fight with Lebanon, but when you have a country infiltrated, raped and held hostage to such extent by a proxy of Iran and Syria, that is the price that unfortunately, also the Lebanese people are paying. We are trying to minimize hurting civilians, but when Hezbollah uses civilians as human shields, sometimes civilians will get hurt.

BLITZER: Ambassador Dan Gillerman, Israel's Ambassador to the United Nations, thanks very much.

And just ahead, Hezbollah here at home. The group is believed to actually have ties to dozens of US cities. We're going to show you why the FBI is sending out a warning to local law enforcement.

Plus, hundreds of people are moving to Israel right now in spite of the fighting. They will tell us why in their own words. Stay with us.

(COMMERCIAL BREAK)

BLITZER: In our CNN Security Watch, U.S. law enforcement agencies are now being warned to keep an eye on people in this country with ties to Hezbollah. Our justice correspondent Kelli Arena is watching this story for us, Kelli?

KELLI ARENA, JUSTICE CORRESPONDENT: Wolf, you know Hezbollah has long been on law enforcement's radar screen. The FBI has been very successful in taking down criminal enterprises that fund that terrorist organizations, but as you said there is a new concern that the conflict in the Middle East could affect the security of the United States.

(BEGIN VIDEOTAPE)

ARENA (voice over): Hezbollah has never attacked on U.S. soil, but U.S. officials say if the situation in the Middle East escalates further, that could change.

ROBERT MUELLER, FBI DIRECTOR: We're taking precautions here in the United States. And to the extent that we have identified individuals associated with Hezbollah, we are taking additional precautions to ensure that we do not face a threat from these individuals.

ARENA: Counterterrorism officials stress there is no new intelligence suggesting that Hezbollah is planning an attack against the U.S. or U.S. interests, but in an advisory sent to law enforcement partners late last week, the FBI and Department of Homeland Security warned that, "... it is possible individuals residing in the U.S. who sympathize with Hezbollah could act."

Bob Grenier is a former CIA counterterrorism official.

BOB GRENIER, KROLL: I think it is almost an actuarial certainty that if we were to get into a direct confrontation with Hezbollah, that there would be those who would be fighting on behalf of Hezbollah in the United States.

ARENA: Law enforcement sources say there are active cells in the U.S. allegedly involved in everything from gathering intelligence, to raising funds, to smuggling arms and military equipment to Hezbollah fighters. Currently, there are investigations under way in at least two dozen U.S. cities, including Detroit and Los Angeles. Those investigations are mostly focused on people allegedly providing financial support to the organization. GRENIER: There certainly has been a pattern of individuals in the past who have had function and other links with Hezbollah in Lebanon.

ARENA: Officials say much of Hezbollah's activity in the U.S. involves traditional criminal enterprises.

(END VIDEOTAPE)

ARENA: Those enterprises include things like cigarette smuggling, drug trafficking and even stolen baby formula. But the question, Wolf, is whether those people who have been involved in those types of activities would be willing to stage terror attacks.

BLITZER: All right Kelli, thank you very much. Kelli Arena reporting and stay tuned to CNN day and night for the most reliable news about your security.

Happening right now, the Middle East on alert as Israel and Hezbollah engage in open warfare. And while thousand of people are trying to flee the region, some people are actually moving there right now. CNN's Mary Snow is joining us live from Kennedy Airport in New York with the story. Mary.

MARY SNOW, CNN CORRESPONDENT: Well Wolf, dozens of families left here. They're en route to Israel saying that they made this decision a long time ago and decided to stick with it.

(BEGIN VIDEOTAPE)

SNOW (voice-over): There were last minute phone calls, tears and embraces as more than 200 Americans say good-bye to their home in the United States, heading for a new life in Israel. But the move was not without worries. As Hezbollah rockets struck Nazareth and thousands continued fleeing the Middle East. For Jehuda Saar, a father of three, the fighting only strengthened his resolve to pick up his family and leave New Jersey.

JEHUDA SAAR, MOVING TO ISRAEL: Without shooting one bullet, without holding a gun, we're Israel's best weapon against any detractor, anyone that wants to destroy Israel.

SNOW: Saar says his family is proof that Israel shouldn't back down. Many share that determination but it comes with a price.

JONATHAN KLEIN, MOVING TO ISRAEL: Our boys have come to an age that they would have to go into the army soon, in the next few years, mandatory army service and that's always a concern.

SNOW: The Klein's and their four sons are moving to a settlement in the north, near the Lebanese border. They say they won't be in harm's way. But 22-year-old Steven Rubin one day could be. He plans to join the Israeli army.

STEVEN RUBIN, MOVING TO ISRAEL: It only makes me want to go there more. And it validates everything I've been thinking for the existence of the state of Israel to see how important everything is at this point.

SNOW: A family's pride turned to tears when it was time to say good-bye.

While families had a hard time letting go, Israel is eager to welcome its new citizen.

ARYE MEKEL, ISRAELI CONSUL GENERAL: For us, for Israel, it's a huge boost to our morale, feeling that fellow Jews around the world are not deterred.

(END VIDEOTAPE)

SNOW: Now the group that organized this mass immigration says about 20 people postponed the move because they were heading to northern Israel. However, they are expected to join about 3,000 people from the U.S., Canada and Britain over the summer, making this same journey, Wolf.

BLITZER: Mary thank you very much. Mary Snow reporting.

Up ahead, anti-missile systems under development that could help Israel defend itself again Hezbollah rockets. We are going to show you what the future may hold. Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're monitoring all the latest developments in the Middle East crisis tonight. And we're learning more about some new missile defense systems that Israel may one day be able to use against Hezbollah rockets. CNN's Brian Todd is joining us with our Welcome to the Future report, Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, outside experts and even the Israelis admit they have very little now to counter the primitive, low flying Katyusha rockets fired by Hezbollah. But as you just mentioned, a new technology may soon make its way on to the battlefield.

(BEGIN VIDEOTAPE)

TODD: Hezbollah's answer to Israel's overwhelming advantage in firepower? The Katyusha rocket. Crude, inaccurate but sometimes effective. Older models with ranges of about a dozen miles can hit villages just across the border. But experts say Hezbollah has also fired rockets able to travel several dozen miles, to the city of Haifa and beyond. And they say Hezbollah may have rockets that can fly up to 100 miles. A potential target, Tel Aviv. Other advantages, the shorter range Katyushas aren't in the air for more than a few seconds. They fly low to the ground and ...

GEN. MOSHE YAALON, FORMER IDF CHIEF OF STAFF: You can position them in order to be ready to be launched very easily. It's a challenge for us to intercept it.

TODD: To hit Katyushas, Israel cannot use its sophisticated Aero II or Patriot defense systems made to blast long-range missiles out of sky. The counter for Katyushas, experts say, is in the future.

JOHN PIKE, GLOBALSECURITY.ORG: I think that the hope is that eventually, the United States and Israel will be able to develop battlefield laser systems that are going to be able to shoot these artillery rockets down.

TODD: Lasers that in recent tests have proven very effective in hitting Katyushas and other short range rockets, even shoulder fired missiles in just seconds. Israel and U.S. army explored a laser program a few years ago, but the army backed out because the units were expensive and immobile. Now lighter, mobile, more efficient laser systems are being developed. They're only drawback ...

PIKE: The big challenge for these lasers is that the lower atmosphere is dirty. It's cloudy, foggy, dusty. The laser beam winds up heating up the dust rather than destroying the missile.

(END VIDEOTAPE)

TODD: Another type of technology we will likely see, a modern version of the gattling gun, very effective at hitting short range rockets and mortar shells, Wolf.

BLITZER: Brian thank you very much. Brian Todd with our Welcome to the Future report.

We want to give you every angle to the conflict in the Middle East and actually the Internet is providing a whole new dimension. Our Internet reporter Jacki Schechner standing by with the situation online.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, what you're watching behind me is a video of a family in a hallway in Haifa. You can see recorded here that the son looks almost bored as sirens wail over head. But, his mother crouching down there in the corner, terrified under a pillow. We're seeing more personal accounts popping up as the days of the conflict move on. People are passing the time by documenting their experiences.

This is Carmia who is blogging from the hallway, again, as the sirens sound. She gave her readers a tour online of her local bunker, saying it was empty primarily because people like to stay at home at this time. In Beirut Julian is traveling around the city taking photographs. These are trucks, digging trucks that he says were mistaken for rocket launchers and targeted by Israeli missiles. CNN.com/SituationReport, all of your links, Wolf, and I just want to emphasize that we can not authenticate the video that we show that shows up online. I just want to make that clear.

BLITZER: All right thank you Jacki for that. Let's check in with Paula. She's standing by to tell us what's coming up right at the top of the hour, Paula?

PAULA ZAHN, CNN ANCHOR: Thanks Wolf, just about five minutes from now, we will continue to follow the breaking news out of Cyprus where a cruise ship, carrying U.S. evacuees, has finally arrived from Lebanon.

Also the unwavering support for Israel by ordinary Americans as well as the Bush administration. It's been that way for years, but is that working against the U.S.? We will also debate the impact of Israel lobby in the U.S. coming up at the top of the hour, Wolf.

BLITZER: All right Paula, thank you very much. We'll definitely be watching.

Still ahead, what's a cease-fire of lasting value? Jack's standing by with your e-mail in the Cafferty File.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack in New York with the Cafferty File.

CAFFERTY: Wolf, Secretary of State Condoleezza Rice trying to get support for something she calls a cease-fire of lasting value, which she says means the Lebanese army taking over the south of the country where Hezbollah has been fighting with Israel for years. That's our question, what is a cease-fire of lasting value.

Michael in California points out, "In 1953 we signed a cease-fire with North Korea. It's still all we have since we are technically still at war with North Korea."

John writes, "until all Muslim countries recognize Israel's right to exist, everything else is an exercises in futility."

Nathan writes, "The only lasting cease-fire will be when a strong middle class is developed in Lebanon and Syria and the Palestinian homelands, that won't tolerate the loss of infrastructure, personal wealth and safety for families that is the direct and indirect result of terrorism. Check out the changes in northern Ireland. Once the Celtic tiger put an end to Irish poverty, and you'll see this process in action."

Tony in Fairfax, Virginia, "Another meaningless catch phrase thought of by some idiot, hoping to fool the American citizenry, whom they think are idiots, into believing that they are trying to resolve the issue."

Mike in Westbury, New York, "A cease-fire of lasting value is one that can stave off Armageddon in the Middle East until after the midterm elections."

Tim in Wilton, Maine writes, "When it is your child that's killed, any cease-fire would have been invaluable."

And Shadi in Chapel Hill, North Carolina, "A cease-fire of lasting value would have to come with the direct involvement of a U.S. administration that does not refer to the current crisis in Lebanon as this blank, that potty mouth word that President Bush used at the G-8 luncheon."

If you don't see your email here, go to CNN.com/CaffertyFile where you can read some more of these little gems online. Wolf?

BLITZER: Thanks very much Jack. See you here in THE SITUATION ROOM tomorrow. We're going to leave you now with some of the Hot Shots coming in from our friends at the "Associated Press," pictures on the Middle East situation.

Southern Lebanon first, a Lebanese woman cries out looking at destroyed houses in the center of the town of Nabatiyah after an Israeli missile strike.

In Nazareth Israel, Israeli Arabs look out from a shattered window after a rocket fired from Lebanon killed two Israeli children.

Beirut, Lebanon, a ten year old American from New Jersey holds a baby sibling while waiting to be evacuated to Cyprus.

And in Las Vegas, two Lebanese-American restaurant owners keep up with the news back home while preparing food at their Mediterranean restaurant.

That's all the time we have. I'm Wolf Blitzer in THE SITUATION ROOM. Let's go to Paula in New York, Paula.

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