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Americans Signing Up to Fight For Israel; New al Qaeda Tape Released; Judge Orders Andrea Yates Committed to State Mental Hospital

Aired July 27, 2006 - 15:00   ET


KYRA PHILLIPS, CNN ANCHOR: Osama bin Laden's second in command weighs in on the Middle East.
Here's what we know right now: ominous words from Ayman al- Zawahri. In a new videotape, he says al Qaeda will not stand by while Israel conducts military operations in both Lebanon and Gaza.

In Washington, President Bush says the U.S. goal in the region is a lasting peace, not a situation that will simply -- quote -- "make us all feel better."

Israel calls up thousands of military reservists to active duty. The Cabinet also voted to continue, but not expand the military campaign in southern Lebanon.

Well, he's watching the rockets and he's monitoring the troops. He's right in the thick of the regional battle, and continues to bring us the latest breaking details.

John Roberts joining me again via broadband.

Hey, John.


There's a little bit of commotion here, because General Shuki Shachar, one of the big generals here in the Israeli Defense Forces, has come up to do an interview for Israeli TV. So, if you see some of the people walking around behind us, that's the reason why.

We are up near the border with Lebanon. We're with a combat engineering unit which is staging here. I'm just a little ways away from the border, again, can't talk about exact location or numbers. But they have got -- they have got tanks; they have got armored personnel carriers, part of the reinforcements that are planning to go in and -- and join the fight, you know, after what happened with the Israeli army yesterday in Bint Jbail, in which eight soldiers, including three officers, were killed.

And, as you know, Kyra, We have been making a point here that we haven't been able to bring you any coverage from the other side with the Israeli army over there, because they haven't taken us with it -- with them. We have requested day in and day out. And, finally, last night, they allowed an American pool camera to travel in with a combat engineering battalion. They went in for a short operation into Maroun al-Ras, which is the town that the Israeli army took about six days ago.

That was the first point of this incursion into southern Lebanon. They have now moved past that, into Bint Jbail.

But here's what we can tell you about Maroun al-Ras. The streets are apparently all broken up. There was no sign of life around there. But there also doesn't seem to be a whole lot of resistance, at least not in the time that the pool camera was in there. There was no fighting between the Israeli forces and Hezbollah holdouts, though you have to remember, yesterday, in that area near Maroun al-Ras, there was an Israeli soldier who was killed. So, that area still remains dangerous.

There's a bit of a dis -- disagreement going on right now about military operations. Some of the generals are saying, well, listen, if we're going to go into southern Lebanon, let's really go in, maybe not the way they did back in 1982, but, certainly, in a larger ground operation than what is going on now.

As you know, the fighting has really been in Maroun al-Ras and in Bint Jbail. And they have just started, in the last day or so, softening up the town of Yaroun with artillery. But we don't know of any ground operations there yet.

On the other hand, though, the Israeli government, the Israeli Cabinet, is saying, no, we want to keep the ground operation the way it is, probably being very sensitive to those growing international calls for an immediate cease-fire.

Despite the fact, though, that the Israeli army is claiming success in degrading Hezbollah's infrastructure, reducing their command-and-control capabilities, and learning a lot of intelligence about them, it doesn't seem to have done much to stem the flow of Katyusha rockets into northern Israel.

There was more than 150 yesterday, which was the largest single- day barrage. And, today, more rockets came in. As we were on our way up here to the front, we were driving through Kiryat Shmona. About a minute before we got into town, five rockets hit. One of them was right along the road that we were traveling.

This is a road that we travel several times a day. Any time that those air-raid sirens go off, and you're on the road, you are wondering, where is the rocket going to fall? Well, this one fell right beside the highway, ignited a brushfire.

Another one landed a couple of streets away, maybe a quarter-mile away, in a residential neighborhood. It hit the sidewalk, exploded, set a couple of cars on fire, really torched them.

And we could also see, in those cars, evidence of those ball bearings that are packs around those warheads, anti-personnel devices, sending shrapnel in all directions when it explodes. There were people in the apartment building next door at the time. However, they were all down in the shelter. And then a third bomb also landed near a shopping center, in between a playground and a shopping center -- nobody in either location, because they, too, had taken heed of the air-raid sirens and had gone down into the shelters -- so, still a very tough fight for the Israeli army in Bint Jbail, and very difficult for them to be able to degrade Hezbollah's capability of shooting those rockets into Israel -- Kyra.

PHILLIPS: All right, our John Roberts there in northern Israel -- John, I will let you go. I know you will want to get word with that general that is right there to your right. Appreciate it, John.

Well, minimum accuracy, maximum fear, Katyusha rockets fired into northern Israel.

CNN's Anderson Cooper is on the front lines as well. We will take a look at the impact.


ANDERSON COOPER, HOST, "ANDERSON COOPER 360" (voice-over): Hezbollah rockets firing from a position in South Lebanon. By now, we have all become used to seeing the results: civilian casualties, widespread fear. When rockets fall on big cities like Haifa, it makes news.

But, in border towns like Kiryat Shmona, most incoming rockets never make headlines.

We happened upon this spot where a Katyusha had recently fallen. There were no casualties and no emergency crews on hand. It was simply a site burning along the side of the road.

(on camera): There have been, reportedly, more than 100 Katyusha rockets that have fallen in Northern Israel so far today. And it's -- well, it's -- right now, it's only about 2:30 in the afternoon. It has been a very busy day. You can tell it's still smoking over here.

We're looking for the actual rocket. We can't see it. It's likely buried somewhere in this direction.

(voice-over): It only took us a few minutes to actually find the rocket. You can see it still sticking out of the ground.

(on camera): We have -- we have heard so much about Katyusha rockets over the last two weeks. It's rare, though, you actually get to see them unexploded. Here, at the police station in Kiryat Shmona in northern Israel, they have a collection of Katyusha rockets that they have encountered over the years.

This is the smallest version that they have. It's a .107- millimeter Katyusha rocket. What's interesting about this is, you actually see the launching system. And you can see just how primitive it is. It's basically this tube with some screws to set it up. They set it up to a 45-degree angle. And, then, they can just launch it. It's highly mobile. They can break it down quickly, and move on to another location.

This is the Katyusha rocket that's been landing in Israel so often in these past two weeks. It's a .122-millimeter Katyusha. Obviously, it's much longer than the .107-millimeter. It needs an entirely different kind of launch system. It's still relatively primitive, but more -- more sophisticated than the .107-millimeter.

It is, of course, inaccurate. Again, it's basically a point-and- shoot. There's no way to really target, so, there's no way for Hezbollah to tell exactly where it's going to land.

(voice-over): The Katyushas may be relatively primitive weapons, but they're designed to create maximum bloodshed.

(on camera): Some of the Katyushas are designed to -- to bury deep into the ground, and have a delayed explosion after several seconds.

What's inside the warhead, though, that's what does sometimes the most damage. These are basically a sheath of what will become shrapnel. You can see it's got grooves in it. Once -- once the Katyusha explodes, this will -- will blow apart along these lines. Each of these little diamonds will become potentially deadly pieces of shrapnel flying through the air.

There are also ball bearings, which are -- which are put inside the Katyusha. You can see the ball bearings right there. Obviously, that can do a lot of damage to a person if it hits them.

(voice-over): Here in Kiryat Shmona, the sound of shelling, outgoing or incoming, is constant. So is the smell of smoke.

We followed a team of firefighters up a steep slope to where another Hezbollah rocket had fallen.

(on camera): Even Katyushas that don't hit population centers cause big problems for Israeli authorities. A Katyusha rocket hit here along the side of a mountain and started a forest fire.

Israeli authorities have finally arrived on the scene. They're trying to put out the flames. But new flames keep erupting. Another fire has just started over there. They're trying to get to those. But they only have one hose here.

There are so many Katyushas falling, so many forest fires starting, that Israeli authorities simply can't get to all of them at once.

(voice-over): It's hard work and tough terrain, but firefighters were finally able to extinguish this blaze. There are other fires, however, nearby that still need to be put out. It is a daily and sometimes deadly routine in Kiryat Shmona that shows no sign of letting up.

Anderson Cooper, CNN, Kiryat Shmona.


PHILLIPS: And you can catch "ANDERSON COOPER 360," of course, every night at 10:00 p.m. Eastern.

A new call to arms from Osama bin Laden's Ayman al-Zawahri. Al- Jazeera aired his taped message today. It's the 10th message from al Qaeda's number-two man this year. In it, Zawahri issues a worldwide call for Muslims to rise up against Israel in a holy war. He says -- quote -- "The war with Israel does not depend on cease-fires. It is a jihad for the sake of God and will last until our religion prevails from Spain to Iraq. We will attack everywhere."

Zawahri also discussed -- or dissed, rather, Arab and Islamic governments, saying: "You are alone on the battlefield. Rely on God, and fight your enemies. Make yourselves martyrs."

Court is adjourned -- final summations delivered today in the trial of Saddam Hussein and his seven co-defendants in Baghdad. Hussein was not there today. He was on hand Wednesday, though, as his court-appointed lawyer delivered that summation.

Before he left, he told the judge he should be shot, rather than hanged, if he gets the death sentence. Court is adjourned until October 16, when the five-judge panel's verdict is expected to be announced.

No letup of the violence in Iraq, especially in Baghdad, where a coordinated attack in one neighborhood killed at least 32 people today. We have heard the president say U.S. troops might be pulled in to bolster the Iraqi security guards already there.

CNN senior Pentagon correspondent Jamie McIntyre joins me now to talk again about how soon that could happen.

Hey, Jamie.


Well, the deteriorating security situation in Baghdad has prompted the top U.S. commander in Iraq to recommend a drastic step: extending the tour of duty of one brigade of U.S. army soldiers beyond their promised one-year tour. The need for more mobile and combat- tested troops, with top-of-the-line armored vehicles, the Stryker armored vehicle, has prompted General George Casey to recommend that the 172nd Stryker Brigade stay in Iraq for a couple of months

It -- extending the tour of troops who have been promised that they would be there a year is something the Pentagon only does reluctantly. And it's something that Defense Secretary Donald Rumsfeld has not yet signed off on.


DONALD RUMSFELD, SECRETARY OF DEFENSE: The morale has been uniformly very good. And I -- I see it even among the families of the wounded when I'm out at Bethesda and Walter Reed. Now, if -- if -- if -- if you extend somebody, is there some disappointment that they won't be home when they thought they might be home? Sure.

And -- and -- but, as I say, these are -- this is a professional military, and they're -- they're doing a superb job. And -- and I think that, were that to happen, it -- well, it has happened. I remember, a couple of years ago, there was a unit that was due to come out. And it was held over for a matter of a few months more. And they handled it in a professional way and got on with life.

Good to see you all.


MCINTYRE: Now, sources tell CNN that some 200 soldiers from the 172nd Stryker Brigade Combat Team based in Fort Wainwright, Alaska, have already left Iraq, after a one-year tour of duty. But most of the remaining 3,700 soldiers now in Mosul have been told they will likely move to Baghdad, instead of going home, again, pending approval from Defense Secretary Donald Rumsfeld, who would have to sign off on this.

Already, though, it's not going over well on Capitol Hill.


REP. IKE SKELTON (D), MISSOURI: Well, I have been pushing for additional soldiers for a number of years. So, what this does in -- in that particularly brigade, it's going to cause morale problems with the troops and also with their families, who are expecting them to come home at the end of a year.


MCINTYRE: Now, anticipating the approval of the defense secretary, the Army is already preparing messages to go to the families of those 3,700 troops. They will likely be eligible for pay bonuses. But they probably won't get a promise that they won't be going back to Iraq, you know, for another year or so, which is normally the break that they get between deployments -- Kyra.

PHILLIPS: All right, Jamie McIntyre at the Pentagon -- thanks, Jamie.

Straight to the newsroom now -- Fredricka Whitfield with details on a developing story -- Fred.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Well, is he a serial killer? A man who is serving a life sentence for the killing of a 15- year-old is now saying that he killed 48 people across the country.

You are looking at this man right, 53-year-old Robert Charles Browne. He says that the slayings happened between 1970, until his arrest for that teenager in 1995. The investigation was first reported on, which is also quoting authorities as saying they have now linked Browne to 19 killings in various states, from Arkansas to California, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Texas, Washington, and overseas in South Korea.

A press conference is expected a little bit later on today -- Kyra.

PHILLIPS: All right, Fred, we will follow it. Thanks.

Born in the USA, fighting for Israel -- that story straight ahead on CNN, the most trusted name in news.


PHILLIPS: Well, a north Texas state hospital will be Andrea Yates' new home, at least for the next month. The judge has ordered she be transferred there and undergo testing to decide whether she's a danger to society. Yesterday, a jury found Yates not guilty by reason of insanity of murdering her children. Later, jury foreman said jurors struggled with that verdict, some of them wanting to find her guilty, but insane, which was not an option.

Do you know him? For the record, this is Senate Democratic Leader Harry Reid. We mention this as a public service, because, if you run into somebody who says he's Harry Reid, but doesn't look like this, you might want to check him out.

It seems that Harry Reid, the real Harry Reid, is a victim of identity theft. The senator says that somebody used his MasterCard number to run up a $2,000 bill at a Wal-Mart and other stores. He says that he's steamed. And if you have been hoping for years that Congress would do more to stop identity theft, well, maybe something will happen now.

An unfolding society scandal could prove to be a real kick in the Astor for the son of a famous New York heiress. Brooke Astor, once the queen of -- or the queen bee, rather, of the Manhattan social scene, is now 104 years old and in failing health.

Her son, Anthony Marshall, has been serving as Mrs. Astor's legal guardian. But his son, Philip Marshall, wants to put an end to that. In court papers filed last week, Philip says his dad -- quote -- "has turned a blind eye to her intentionally, and repeatedly ignoring her health, safety, personal and household needs, while enriching himself with millions of dollars."

The grandson claims that the woman, who has donated millions of dollars to charities, now sleeps in torn nightgowns, while her beloved dogs are locked in a pantry. He wants to see a longtime friend of Mrs. Astor appointed as legal guardian instead, along with J.P. Morgan Bank -- no official response from Anthony Marshall, who is 82.

But Philip Marshall's efforts have the backing of people like David Rockefeller and Henry Kissinger.

Home DNA tests that claim to predict diseases have grown in popularity lately, but now the government is saying, buyer beware. Let's find out some more from Susan Lisovicz, who is live from New York Stock Exchange.

Hey, Susan.


If it sounds too good to be true, well, that's basically what the government is saying. The Government Accountability Office has released its findings on companies that sell home DNA testing kits. Those tests claim to analyze consumer DNA for genes that play a role in diseases such as cancer, heart disease, and diabetes.

But the GAO says the results are medically unproven, ambiguous, or both. It looks into four companies that sell the genetic tests kits, which range in price from less than $100 to about $400. Investigators took DNA samples from two test subjects, one of them a 9-month-old baby, and sent them to the companies, saying they came from 14 different fictitious consumers.

Well, the company sent them back with predictions that all 14 are at risk for developing a whole wide range of conditions. The probe also found, the recommendations and health predictions for the fictitious consumers varied widely, even for samples taken from the same person.

In addition, the GAO said, two of the companies used their test results to promote expensive dietary supplements they were selling. The chairman of the Senate -- Senate committee looking into the matter said, consumers should visit their doctors for tests if they are concerned about a particular disease, going back to the basics -- Kyra.

PHILLIPS: All right.

Well, maybe let's get back to the basics on Wall Street.


PHILLIPS: How are things looking?

LISOVICZ: Choppy as ever, Kyra -- this a hugely busy day today, 170 big companies reporting, stocks right now lower, after a solid start to the day. Of course, we have got corporate earnings, some mixed economic news.

June orders for durable goods rose more than expected, but sales of new homes fell 3 percent from May and 11 percent from last year's level -- another indication that air continues to leak out of the housing bubble. Right now, the air -- well, it has leaked right now out of the rally we saw for the blue chips -- the Dow industrials right now four points lower, the Nasdaq composite down 15 points, or three-quarters-of-a-percent.

One of the big losers today is the health insurer Aetna. Its stock is tumbling nearly 20 percent and at a 52-week low, after the company posted lower earnings and forecast weak membership growth because of unexpectedly large medical claims and rising competition.

And that's the latest from Wall Street. Stay with us. LIVE FROM will be right back.


PHILLIPS: Well, it may surprise some Americans, but there are U.S. citizens fighting Hezbollah under the banner of the Israeli army. In fact, one family in New York has a long history of Israeli military service.

Their story now from CNN's Alina Cho.


ALINA CHO, CNN CORRESPONDENT (voice-over): For 21-year-old American Matt Bielski, fighting in the Israeli army is family tradition. So, when Matt told his parents he wanted to join the Israeli Defense Forces, or IDF, they were not surprised.

JAY BIELSKI, FATHER OF AMERICAN IN ISRAELI DEFENSE FORCES: I kind of expected it. I didn't want it to happen. I promised him a Corvette every year if he would stay here and go to graduate school. But I knew it wouldn't work. And I did the same thing to my parents.

CHO: Matt's father, Jay, was first a U.S. Marine. He left to join the Israeli army in 1973, just in time for the Yom Kippur War. Then, there's his father. Zeus Bielski and his two brothers led what historians call the largest armed rescue of Jews by Jews from the Nazis during World War II.

The Bielski brothers, the subject of a book and a documentary, saved more than 1,200 Jews, as many as Oscar Schindler.

BIELSKI: What I did and what Matthew is doing is a piece of cake, compared to what they did.

CHO: Matt was born in the U.S., but also holds an Israeli passport.

MARGO BIELSKI, MOTHER OF AMERICAN IN ISRAELI DEFENSE FORCES: Matthew went not knowing there was going to be a war. They went planning to join the IDF, and, you know, be in the army, and feel what it's like to help defend the country. But they really didn't anticipate a war.

CHO: The Bielskis keep a close eye on the news from their home in Valley Stream, New York, more than 5,000 miles away. And it can be grim.

Matt told his mother by phone, the Israeli soldiers killed in Lebanon Wednesday were part of his unit. His parents try to talk to Matt a few times a week, like the day we were there.

MARGO BIELSKI: How are you, honey?


MARGO BIELSKI: All right. Is everything OK?

J. BIELSKI: How's the war?


J. BIELSKI: It's good?


J. BIELSKI: All right. Stay safe. Don't be a hero.

MARGO BIELSKI: Do you need anything?

CHO: Matt's mom, Margo, admits she worries a lot about her son, but she's certain he's exactly where he wants to be.

MARGO BIELSKI: He followed his dream to do what he wanted to do. You know, some people, they say, talk the talk. Well, he walked the walk. He went.

CHO: An American Jew defending Israel -- in two years, his parents hope he will come home to the United States.

Alina Cho, CNN, Valley Stream, New York.


PHILLIPS: Well, when it comes to call -- that call to serve, it's hard to resist. And that's the experience for one American family that has always viewed Israel as home. Now they are acting on their beliefs.

Phyllis Reich joins me from New York. Her son Zachary joins us from Jerusalem. He's enlisting in the Israeli Defense Forces. Zachary's brother Jason is also in the IDF. He's currently on active duty along the Israeli-Lebanese border.

Phyllis, I got to start with you.

Why do you support your boys leaving the U.S. and going to fight in the IDF?

PHYLLIS REICH, MOTHER OF SON SERVING IN ISRAELI DEFENSE FORCES: Well, living in Israel, we believe, is fulfilling a dream that Israel is the historical and spiritual home of the Jewish people.

And when they talk about moving to Israel, they use the word "aliyah," which means to go up, or to ascend. And we really believe that it's the place where we can live our lives most completely as Jewish people. And I am incredibly proud of my children for acting on the dream.

PHILLIPS: What made you act on mom's wishes for aliyah, Zach?

ZACHARY REICH, ENLISTING IN ISRAELI DEFENSE FORCES: Well, it was a combination of things.

I think that their -- their educating me, my mother and my father, in -- in -- with Zionism, and being in a -- the youth group, Aneyakiva (ph), and my elementary school, and my high school, were all very Zionistic influences upon me.

And visiting Israel also had a very big influence on me, making we want to make aliyah. And what actually just made me go forth and do it was two things -- one, seeing my brother make aliyah, seeing that dreams can really become a reality, and just this internal feeling that it's hard to explain that I just felt like I really had to make aliyah.

PHILLIPS: Well, Zach, why -- you're in Jerusalem, and you are doing that, but why join the military? Why do you want to become a member of the IDF?

Z. REICH: I feel like it's -- it's an obligation (INAUDIBLE) all the citizens.

I mean, in Israel, it's a -- it's a law that all -- all citizens have to serve in the army. And, so, it's a question of, why not do it? It's obviously -- it's -- it's a big mitzvah to serve your entire country, to -- to protect it against enemies that come up against it.

And I -- I feel like it's very important to -- to serve the -- the entire nation, as opposed to just working on yourself. Just going out, getting a job, or learning at a university, is something that is very private. But serving in the army is something that you do for the entire nation.

PHILLIPS: Phyllis, tell us what Jason is doing, where he is, if you are able to talk to him on a regular basis, as he's involved with this battle right now.

P. REICH: Well, I don't know exactly where he is now, although I do know that he is on the Israel-Lebanon border.

He calls us when he's able to, to reassure us that he's well. And I -- I try to be patient and confident and not overly worried...


P. REICH: ... although I can't say that I don't worry.

But the last time we spoke with him was on Sunday. And, again, it was to reassure us that he was well and -- and in good spirits.

PHILLIPS: And, Zach, I want to ask you, why not join the U.S. military? I understand the cultural aspect here, but, then, again, you have done -- the U.S. has done so much for you. How do you make that choice of IDF or U.S. military?

Z. REICH: Well, in the same way I made the choice of where I want to live. I feel the same choice follows. I made a choice to move from America to Israel as a -- as a permanent move. And, so, I made the choice to serve in the Israeli army, as opposed to the U.S. military. I support the U.S. military. Obviously, they're -- they are allied militaries. In many ways, they fight to -- to similar goals.

But I feel like, as a Jew who now lives in Israel, it's my obligation to serve in the Israeli military, that surely needs as much help as it can get.

PHILLIPS: And, Phyllis, just looking at the situation in the Middle East -- Middle East, how it's intensifying, and how lives are being lost, both military and civilian, as a mom, it's so obvious how you support your boys. But this has got to be pretty nerve-racking.

P. REICH: Yes.


P. REICH: It is.

I would be not truthful if I said that there aren't times that I wake up in the middle of the night gasping for breath. But, on the other hand, I have faith and I have confidence in Jason and in Zachary that they have made a good decision and that things will work out and they will go on to do what they were intended to do when they chose to make Aliah, which is to be productive citizens and live good complete lives there in Israel. That's how I kind of get myself through this really tense time.

PHILLIPS: You are a strong mom. Phyllis Reich and Zach Reich in Jerusalem, we will follow your progress and we're thinking about your brother, Jason as well. We appreciate all three of you, thank you for your time.

P. REICH: You're welcome, thank you so much.

PHILLIPS: Thanks Zach.

Z. REICH: Thank you very much.

PHILLIPS: One lost in Afghanistan, a second fallen in Iraq, two sons killed in action and a father's grief is unbearable. Reporter Emily Leonard of our affiliate KLBK has the story.


EMILY LEONARD, KLBK REPORTER (voice-over): Tears of tragedy stream down the eyes of Roy Velez. Around 12:30 Tuesday afternoon, Roy received that unwanted knock on the door.

ROY VELEZ, FATHER: It's about Andrew. And he said yes sir. He said let's go inside and I said I don't want to go inside. I don't want to go inside. Tell me here. What's happened to Andrew? And it just immediately came to my mind, Andrew is dead. LEONARD: After hearing that his son, 22-year-old army specialist Andrew Velez was shot in Afghanistan, Roy says he dropped to his knees.

VELEZ: I fell to the floor and I dragged myself. I couldn't stand in the hallway. My baby boy. My last son.

LEONARD: In November 2004, Roy's other son, 23-year-old Freddy Velez, was killed while fighting in Fallujah. Roy says he never imagined he would lose both his sons to war.

VELEZ: Felt like somebody has just raked the inside of me with some claw nails and torn everything out. There's nothing there, nothing. Nothing. It's just so hard and there's nothing on the inside of me.

LEONARD: Roy says losing both Freddy and Andrew has left him beaten and broken and the pain is unbearable.

VELEZ: I know I am not the only parent, but I have lost both my boys. I can't call out to them any more. I can't. I can't call out to Andrew and I can't call out to Fred. They can't come running to be with dad and be beside me side.



PHILLIPS: Eleven straight days of triple digit temperatures are taking a toll on California's agricultural and livestock, agriculture, rather, and livestock. Folks down on the farm fear that they will be down-and-out come harvest town.

Reporter Dana Howard has the story from CNN affiliate KXTV in Sacramento.


DANA HOWARD, KXTV REPORTER (voice-over): The eye cannot miss the damage.

UNIDENTIFIED MALE: You see, they are hard as a rock and there's nothing left of them but the little seed inside.

HOWARD: Whether it's grapes that have turned to raisins, walnuts that are shriveled in to a crisp. The sun is more than its shining on grower this year. It is both physically and financially brutal.

SONNY DALE, PEACH GROWER: I have never seen it like this.

HOWARD: Sonny Dale is a peach grower, perhaps the hardest burns of California's crops.

DALE: So, the stuff on top will go bruise and overripe.

HOWARD: Butte, Sutter and Yuba counties grow more than half of the states peaches and in one week the sun has destroyed a third of the crop.

DALE: If you feel this peach, it's mushy, it's soft. That's a peach from the top of the tree.

HOWARD: Growers gather almost daily to vent and to support each other.

UNIDENTIFIED MALE: People who are counting on the full peach crop, pretty tough.

UNIDENTIFIED MALE: This is really crazy. I mean, look it, it's not even worth going in and picking it.

HOWARD (on camera): In essence, the fruit is literally being cooked right on the tree. To give you an example, in just the 30 minutes that I have been out here talking to the growers, all of us have sweated through our undershirts, our shirts, sweat is pouring off our heads.

DALE: A branch like this doesn't have a couple peaches out here.

HOWARD: Sonny says compounding the problem is the fact that the trees already had very little fruit because of late rain storms.

DALE: In a normal year, you would actually have so much fruit on this limb that you would have to thin the fruit off.

HOWARD: He figures 50 percent of what little did survive will not make it through this heat. In Sutter County, Dana Howard, News 10.


PHILLIPS: The heat is on and the power is back on in central London but utility crews say don't be surprised if it goes out again. They're blaming today's four-hour blackout on the heat and the increased demand for electricity. As many as 760 homes and businesses went dark, including part of the financial district, shops along Carnaby Street, the Oxford Street underground station and even CNN's bureau.

Well, extreme heat is breaking records from London to Lisbon and people are keeping cool any way they can. In the past two weeks, 80 people have died, the majority in France. The heat is also causing roads to buckle and rivers to dry up in neighboring Germany. Zoo keepers everywhere are giving the animals their favorite treats on ice to help keep those animals cool.

Remember the guy that started with paper clip and eventually traded up to a house? Well it turns out that's not the end of the story. The latest adventures of Kyle McDonald when LIVE FROM continues.


PHILLIPS: Now for months we've been following the adventures of Kyle MacDonald, the Canadian blogger who started with one red paper clip and eventually traded up to a house. Well, we thought it was a great story and, apparently, so does Hollywood.

We've just learned that DreamWorks has purchased the rights to turn Kyle's story into a reality TV show or maybe even a movie. No word on the financial details. Maybe the Kyle MacDonald story could become a motion picture. Frankly, we always thought it sounded a little more like a nursery rhyme.


PHILLIPS (voice-over): We've spoken of Kyle MacDonald before. His talent for trades is the stuff of folklore. But if you've not heard it, or if you are new, or if you've forgotten, please let us review.

He started with one red paper clip, he wanted a house, could he trade up for it? He traded the clip to get a pen that was shaped like a fish. Then he traded again.

He traded the pen to obtain a door knob. That opened the door to his next trading job.

A camping stove then a little bit, later he traded the stove for a generator.

The generator was quickly turned in for a beer sign and keg. Let the party begin.

When he joined us last year, Kyle's latest big deal was trading the sign for a snow mobile.

But Kyle MacDonald did not end his quest, he kept right on trading and who would have guessed, that another big deal would quickly go down for a trip to Yahk, a Canadian town.

He traded the trip for a big white truck, then lo and behold, a stroke of good luck. Our Kyle MacDonald was pleased to make contact with someone who offered a record contract.

That contract alone meant little to Kyle, but a singer named Joy had reason to smile. A chance to record, that's just where her heart went, she gave Kyle a trade, a rent-free apartment.

The apartment was nice, but then something super, Kyle traded that lease to meet Alice Cooper.

The next trade was stranger, well, what do you know, Kyle traded the rock star for a globe full of snow.

A motorized snow globe, but what's the big deal? Just why could one snow globe have so much appeal?

Lady Luck intervened when you least would expect her, in the form of an actor and snow globe collector. Yes, Corbin Bernsen, the actor you saw as Arnie Becker on "L.A. Law." He amassed a collections of snow globes galore, 6,500 and he wants to add more.

To get Kyle's globe, Bernsen promised to trade, a role in a film that soon will be made.

So Kyle accepted, gave up the glass ball, and that's what set up the last trade of them all.

The folks in a small Canadian town had heard of MacDonald's wide trading renown. So they gave him the one thing he sought from the start, a house of his own for the movie part.

That's 14 trades from a red paper clip to a two-story house just flip after flip.

That's what you can do if you make a connection with an actor who has a big snow globe collection.


PHILLIPS: Now, one related note, when we first heard about Corbin Bernsen's role in this chain of trades, well, we were a little skeptical. Was it just a publicity employ, or is Bernsen really into snow globes? Well, we checked in with the actor himself. He responded by showing up with just a few of those snow globes.


CORBIN BERNSEN, ACTOR: It has got varying speeds on it which -- that's it right there. That's the Kiss snow dome.

PHILLIPS: Now, how much is that worth?

BERNSEN: That's probably only worth about 80 bucks or so. You know, then you have got one like this Batman one here that's worth about $1,000 from the TV series in the '60s. I guess in the U.K. they picked up the series. They made a bunch of these to use as promotional tools. Somebody said you don't have a license and they destroyed ail but two, and that's one of the surviving two, so that's worth quite a bit.

PHILLIPS: What's another favorite you have?

BERNSEN: Another favorite, one of the ones -- well, this is a pristine, beautiful one from the World's Fair in New York in 1939. And it's just -- it's very hard to refill these, so to be this clear is pretty spectacular.

PHILLIPS: And you are too young to remember that fair, so why would you want that one?

BERNSEN: Well, you know, I mean, it's cool. I don't know. It's cool.


PHILLIPS: Notice he said snow dome. He corrected me. He doesn't like snow globe. So it turns out that Corbin Bernsen is so into snow domes, he's doing some trading himself. He will send anyone who sends him a snow dome/snow globe an autographed picture in return. Now, our only question is, will Corbin Bernsen play himself in the Kyle MacDonald "One Red Paper Clip" movie? Well, we're going to let Hollywood work that one out.

A call for terrorists, al Qaeda's number two man puts out a new video to recruit more militants. See it on CNN, the most trusted name in news.


PHILLIPS: Israel orders a call-up. Here's what we know right now about the Middle East crisis. The Israeli cabinet approved the activation of up to 15,000 reservists today. Israel's army chief of staff said the move it meant to prepare the armed forces for all possibilities.

Israeli airstrikes pounded Hezbollah targets across Lebanon, and more than a dozen Hezbollah rockets landed in northern Israel, setting several buildings on fire.

Also, the number two man in al Qaeda says the terrorist organization will not stand on the sidelines as the Mideast crisis continues. Al-Jazeera aired the statement by Ayman al-Zawahiri. New developments at the United Nations, also.

Let's get straight to senior U.N. correspondent, Richard Roth -- Richard.

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Kyra, the United Nations Security Council moments ago passed a statement, backed by all 15 countries, regarding Israel's attack on a U.N. base in Southern Lebanon the other day, which resulted in the death of four United Nations military observers.

Now, because the U.S. objected to tougher language on Israel that would have been full of condemnation, this statement was held up. But now it's passed. The statement would have originally condemned any, quote, "deliberate attack against United Nations personnel," emphasizing that any such attacks are unacceptable. That is not included in this statement.

The statement does say -- that was just adopted unanimously -- "The Council is deeply shocked and distressed by the firing by the Israeli Defense Forces on a United Nations observer post in Southern Lebanon, which caused the death of four U.N. military observers. The Security Council is deeply concerned about safety and security of U.N. personnel and in this regard stresses that Israel and all concerned parties must comply fully with their obligations under U.N. international humanitarian law related to the prediction of personnel and associated personnel." There was another big struggle inside the Security Council. Went into the night, Kyra, last evening. The same debate -- the same divisions you're seeing, that the council has still not issued any type of reaction to the outbreak of hostilities between Israel and Hezbollah.

Back to you.

PHILLIPS: All right, Richard, thanks so much.

Well, great swathes of northern Ireland deserted. CNN's Wolf Blitzer saw it today for himself when he flew over the region with the Israeli Armed Forces. Wolf joins me now from Jerusalem.

Wolf, tell me how it was.


Let me first tell you what's coming up on our special edition of "THE SITUATION ROOM." We're live in Israel.

Al Qaeda's Mideast threat. Osama bin Laden's right hand man calling for attacks worldwide. Will Lebanon now become a rallying cry for terrorists?

Plus, Israel presses on, calling up to perhaps as many as 30,000 more troops, while Lebanon reports up to 600 civilians killed in the battle. We're going to take you to both sides of the border, where the cost of war is being paid in human lives.

Also, we're going to get some unique perspective. I'll take you on a Blackhawk helicopter ride for a bird's-eye view of the battlefield.

And one additional note, Kyra. Pushed aside, the other war that's been even more deadly. We're going to take you to Baghdad, where the carnage continues.

All that coming up, Kyra, right at the top of the hour in "THE SITUATION ROOM." You're going to especially like, Kyra, our trip in that Blackhawk helicopter, the first time they've taken foreign press up there, the Israelis, to see what's going on from a bird's eye perspective.

PHILLIPS: You know how much I love flying in those Blackhawks and jumping out of them, as well. And Wolf, I can always count on you to hold me accountable. I said northern Ireland. I'm thinking of my Irish roots. Of course I met northern Israel. You actually did take this helo ride. Tell us who you met, tell us, you know, what we can see in your piece. Obviously we're going to run it tomorrow, as well.

BLITZER: I went with Brigadier General Elan Ushatani (ph). He's a top member of Israel's general staff. He invited me to go along. We left a military airbase not far from Tel Aviv, flew up the coast towards Haifa north, and from Haifa we went a little bit further north toward the Lebanese border and then flew along the Lebanese border across Israel, over to Kiryat Shemona and down in the Upper Galilee and the Lower Galilee.

At one point, Kyra, you could not only see smoke coming up, but you could smell it as well, the burning coming from some of those Katyushas, landing in sort of forests, and trees getting on fire. It was an eye-opening experience. I then flew back to Haifa, spent some time in Haifa, eventually made my way back here to Jerusalem. So we're going have a full report coming up at 4:00, 5:00 and then later again tonight at 7:00 p.m. Eastern.

PHILLIPS: Can't wait to see it. Wolf Blitzer, thanks so much.

Well, a big day for one of the major oil companies. That story, plus the closing bell, straight ahead.


PHILLIPS: Well, first it was Lance Armstrong. Now it's Floyd Landis under scrutiny as the winner of the Tour de France. Today Landis' race team announced that tests were taken after the 17th stage of the race found unusually high levels of testosterone in his system. That was the stage which Landis won convincingly to get back into contention for the overall race. The samples will be retested. Landis won't race again until the doping question is resolved.



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