Return to Transcripts main page

American Morning

Crisis in the Middle East; Baghdad Explosions; Al Qaeda Warning

Aired July 27, 2006 - 06:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Stepping up the offensive, Israeli leaders meeting right now to decide whether to step up the military offensive against Hezbollah.
Morning, everybody, welcome to a special edition of AMERICAN MORNING, I'm Soledad O'Brien in New York.

Good morning, -- Miles.

MILES O'BRIEN, CNN ANCHOR: Good morning, Soledad.

Miles O'Brien reporting live from Metula, Israel, the northern most point in Israel. We'll tell you how people are doing here in just a moment, -- Soledad.

S. O'BRIEN: All right, Miles, we'll get back to you in just a few seconds.

First, though, the very latest in the Middle East crisis, Israeli leaders are expected to decide today whether to broaden their offensive in Lebanon. Officials say Israeli Prime Minister Ehud Olmert will meet with top Cabinet members today to discuss that. Sources say that top Israeli Army commanders are recommending a larger campaign.

Early this morning, north of Beirut, Israeli war planes hit an Army base and a relay station belonging to Lebanese state radio. That's according to Lebanese broadcasters. Israeli military officials say their target was a Hezbollah radar station.

In Gaza, it has been the deadliest day of fighting since Israeli troops pulled out last year. Palestinian sources say Israeli strikes killed 25 people today, including 6 Hamas militants and 1 from Islamic jihad.

And Secretary of State Condoleezza Rice, she's in Malaysia today for a conference with Asian diplomats. The Middle East, though, is expected to consume her agenda. She left her envoys behind in Rome after they made little progress on Wednesday in resolving the crisis.

And once again we have got correspondents standing by all around the region this morning. We're going to get to them in just a few moments.

First, though, let's get right back to Miles in Metula in Israel.

Hey, -- Miles.

M. O'BRIEN: Thank you very much, Soledad.

We are surrounded on three sides by the country of Lebanon. Metula is a historic place for all Israelis. It was first settled in the 1890s. And, as a matter of fact, was the first Zionist outpost in Galilee post Roman times. So there is a lot of history here and today a lot of concern.

I just want to tell you where we are. Two hundred yards down the road, right where that BMW is headed, is the border with Lebanon. That is to the north. And that gate down there leads you, if you wanted to go in there, we wouldn't, into Lebanon.

Just beyond there, you see those hills, that kind of lower hill at the 12:00 position, just over that hill is where that United Nations observation post was that was targeted by those Israeli fighters, killing four U.N. observers.

Now take a look over here, there are U.N. observation posts all throughout this area. There's another one right up there. You see the water tower up in there, you see the power supply. We've seen white U.N. trucks driving up the road to the crest of that hill there to re-supply them with water and all the like.

Now, let's walk a little bit through Metula. Metula normally at this time of year it's -- there's about 2,000 citizens here. Normally at this time of year it's a farming community and a tourist town. Would be just filled with tourists, the hotels would be jammed.

But take a look at what we see here, the streets are virtually vacant. Those cars -- every one of those cars you see there belongs to some sort of Western television crew, including our own.

And over here in the corner, this is the Finger-Liking Good Cafe there, or grocery store. This has become a popular place for the Israeli defense forces, border guards, who are taking a break. They get an opportunity to drink a little bit of water, have some refreshments.

Interesting point here, not a single Katyusha has landed in Metula since this all began. Why? Well the locals think it is so close to the border and the Katyushas are so inaccurate that Hezbollah dare not try to aim for Metula for fear of hitting some of their own people on the other side of the border. So there is a presumption here that it actually might be somewhat safer here in the town of Metula.

Speaking of Katyushas, already today 26 Katyushas have rained down on northern Israel, not here, but closer to Haifa where we were yesterday, and all throughout that swathe toward the Sea of Galilee.

Watch out for that car there, Kellen (ph).

Twenty-six of them. We have no reports of any serious injuries. As a matter of fact, we think they all fell harmlessly into fields. Take a look at where we were yesterday, Haifa, all the way up to Metula, as the crow flies, 45 miles. But in this part of the world, I wonder if the crows fly straight, because you have got to be careful about the borders. For us to drive, it was in excess of 75 miles, and through a couple of checkpoints along the way, and here we are in Metula.

North of the border, a lot of action to tell you about. Tyre, Lebanon, once again, a dateline we're focusing on, considered to be a likely source of many of those Katyusha rockets. Yesterday, some dramatic activity there. As they were evacuating foreign nationals, the Israeli Air Force targeting a 10-story building and bringing it down in just a pile of rubble.

CNN's Ben Wedeman is there, -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, good morning, Miles. We are hearing Israeli jets flying overhead. There's been a fairly steady bombardment to the south and the east of Tyre. We don't know of any cases where Katyusha rockets were ever fired from within the city, but they are fired from this sort of broad area to the east and to the south.

Now we understand that this building you were describing just a few moments ago that was hit at sundown yesterday in the middle of Tyre, the Israelis believed at the time that the Hezbollah commander for southern Lebanon, Sheik Nabil Kaouk, was in that building. We hear from Hezbollah that that was not the case, that he has not been harmed.

Now the situation here, since that building has been hit, has completely changed. Before, about a third of the population of the city, which is around 100,000, had -- rather, two-thirds, had left the city, a third was left.

But since that building was hit, we've noticed -- there's been a noticeable increase of the number of people who have decided to finally to leave the city. Other people are coming to this hotel. It's considered that because there's so much media here, this hotel may be safer than staying inside the town itself -- Miles.

M. O'BRIEN: Ben Wedeman, tell me, what do we know about this particular building? Is there any indication as to why it would have been targeted?

WEDEMAN: On the ground, no indication whatsoever, Miles. Local authorities saying that as far as they know it was only a civilian building. But as I said, the Israelis are suggesting that it was Hezbollah's southern commander who was in the building, but no word from -- I mean the Hezbollah is basically denying it.

Hezbollah is fairly secretive. We have no idea, for instance, what sort of casualties they have sustained in the last 15 days. So that's really all we know at this point.

But it is in the middle of the city. It's not on the edge or anything. So we were quite shocked when we heard -- normally we hear all the blasts behind me to the south and to the east. To hear this huge -- the two huge explosions and to see this giant cloud of black smoke was quite a shock yesterday -- Miles.

M. O'BRIEN: Ben Wedeman in Tyre, Lebanon.

As we look at some Israeli border guards taking a little break here, constant thud in the background. You'll probably hear it in just a moment. A hundred and twenty millimeter cannons on the Merkava main battle tanks of the Israeli defense forces continuing a barrage of shells heading over into those hills.

But beyond the southern Lebanon engagements, and we hear about fierce fighting, virtually hand-to-hand, close-quarters combat just over these hills, word and some concern of an ever-broadening war here, which might involve the Lebanese Army and another Shiite faction, the Amal Group, which is a paramilitary group as well.

For more on this, we go to Anthony Mills in Beirut, -- Anthony.

ANTHONY MILLS, CNN CORRESPONDENT: Well, Miles, Amal is indeed a powerful Shiite group here in Lebanon. And although it has had a year's long rivalry with Hezbollah, certainly in the face of resistance to any Israeli invasion into an Israeli ground incursion, it is perfectly conceivable that they would join forces. They are both born into the resistance against Israeli occupation of Lebanon.

And as such, yes, it's conceivable that they could join ranks in fighting any Israeli soldiers inside Lebanon, despite the rivalry that they have had in the past, and indeed that rivalry during Lebanon's civil war here between 1975 and 1990 did, back then, boil over into violence. But quite possibly the invasion, the Israeli invasion of southern Lebanon could unite those two factions -- Miles.

M. O'BRIEN: Anthony, what is -- given the fact that this appears to be broadening, what do we know about what the Lebanese Army is doing? The troops that would answer to Prime Minister Siniora, how are they responding?

MILLS: Well, despite suggestions by the Lebanese President, Emile Lahud, and indeed the Interior Minister, Ahmad Fatfat, that the Lebanese Army would get involved in fighting off an Israeli invasion of south Lebanon, we haven't really seen anything on the ground so far. And indeed throughout the course of this two-week-old conflict, the Lebanese Army's role has really been confined to some half-hearted bursts on anti-aircraft batteries.

Nonetheless, the Lebanese Army has been targeted by the Israelis in this conflict. The latest dispute, if you will, centers around a telecommunications tower north of Beirut. Now that tower, as we understand it, is close to a Lebanese Army barracks. It was struck overnight.

A Lebanese security source here, a high-ranking security source, telling me that that tower was used for Lebanese state television and also radio and the Lebanese Army saying that it didn't use the tower. Israel is saying that it was targeting a radar position used by the Lebanese Army. But thus far, the Lebanese Army has stayed out of this really, apart from those bursts of anti-aircraft fire.

And it remains to be seen really, Miles, whether or not the Lebanese Army will join in in any effort, especially in the south where of course we've seen this very fierce fighting between Hezbollah and Israeli troops. It remains to be seen whether or not the Lebanese Army will actually get involved on the ground in that.

And if it did, Miles, it's conceivable that it would be still, nonetheless, strongly coordinating with Hezbollah, because Hezbollah controls the south of Lebanon, not the Lebanese Army, and really is in the leadership role in this fighting back against the Israeli forces that have crossed into Lebanon -- Miles.

M. O'BRIEN: Anthony Mills in Beirut, thank you very much.

Back to you, -- Soledad.

S. O'BRIEN: All right, Miles, thanks.

Beirut and other parts of Lebanon could see more bombs and missiles coming in from Israel. The Israeli Cabinet is now pushing for increased air strikes rather than expanding its ground offensive against Hezbollah.

Let's take you live now to CNN's Fionnuala Sweeney. She's in Haifa in northern Israel.

Fionnuala, good morning.

FIONNUALA SWEENEY, CNN CORRESPONDENT: Hello, Soledad.

Yes, indeed the Israeli Cabinet meeting. It's expected to wrap up shortly, but the government expected to recommend an increase in air strikes on southern Lebanon. The military wanting to see an expansion of the ground operations there because the Israeli soldiers now are beginning to take some casualties along the border. Nine people died yesterday, nine soldiers, and dozens were injured.

There is also beginning to be a perception here that this is a campaign that is now in its third week, and people expected that it would be all over in a week or two. And that on top of the capture two days ago of two Hezbollah strongholds in southern Lebanon, Bint Jbeil and also Maroun al-Ras, only for the Israeli military to discover a day later that there was still fighting in the streets for control of those two strongholds means that this is an offensive that is not going to be over anytime soon -- Soledad.

S. O'BRIEN: Fionnuala, let me ask you a quick question, are Israelis generally supportive of this military offensive?

SWEENEY: Yes, they are. In a poll that was published, I have to say before the Bint Jbeil incident where nine soldiers were killed and dozens injured, they are still broadly supportive. They believe that Israel's government, and 95 percent of those polled believe that Israel's government is right to take the military action that it is doing. That is still the same level of support as last week.

And also 77 percent are broadly supportive of Ehud Olmert's actions. So that is still also holding firm.

But I should stress that this was before the news that nine soldiers were killed yesterday in and around Bint Jbeil in southern Lebanon. That is proving to be a very tricky Hezbollah stronghold for the Israeli Army to secure. And it remains to be seen whether this Cabinet meeting that is wrapping up in Tel Aviv will decide on an expanded ground offensive or just further increase in air strikes -- Soledad.

S. O'BRIEN: And news like that of course, as you point out, can always change those polls.

Fionnuala Sweeney for us in Haifa.

Fionnuala, thanks.

Just getting word this morning of a new terror tape from al Qaeda's number two. The Arab network, Al Jazeera, is airing a taped message from Ayman al-Zawahiri. The tape apparently makes reference to the conflict in the Middle East, warning that the terror group will not remain quiet over Israel's attacks on Lebanon.

Violence is raging on in Iraq this morning. In Baghdad, at least 27 people killed, dozens wounded in a car bomb and mortar attack in a predominantly Shiite neighborhood.

CNN's Arwa Damon live for us in Baghdad. She's got more.

Good morning, -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Good morning, Soledad.

That's right, the attack happened at about 9:00 in the morning, a car bomb, mortars, followed by Katyusha rockets. Now this is a central Baghdad neighborhood, fairly upscale. It is a mixed neighborhood.

However, the area that the attack was focused on is predominantly Shia. And, we are told by the Iraqi police, home to a number of offices and also residential homes that fall under Iraq's most powerful Shia party, the Supreme Council for Islamic Revolution here in Iraq. However, the actual target of the attack is unclear.

Again bearing the brunt of this are the Iraqi civilians. At least 27 killed, over 100 wounded. Images from the scene showed that it seemed largely focused on this commercial and residential area. There was a residential building that was destroyed. There were a number of shops that sustained significant damage in this attack. Remember these attacks don't only take a human toll, a toll on human life, they also severely damage the economy in these areas. We saw some reaction from the area that was broadcast on state television, Al-Rakia (ph). In that, angry residents demanding where is the Baghdad security plan?

Now that plan is currently being debated in the United States, an ocean away, where Prime Minister Nuri al-Maliki is wrapping up his trip with U.S. officials over there. He will be returning shortly to Iraq.

What the Iraqi people hope with is that he will return with an actual plan that will eventually stabilize this area. There has been talk. It has been actually confirmed that there will be more U.S. and Iraqi security forces dispatched to the capital in an effort to restore security. But until that actually happens, the death toll here only continues to rise -- Soledad.

S. O'BRIEN: Arwa Damon in Baghdad for us this morning.

Arwa, thanks.

We're going to continue our special coverage of the crisis in the Middle East. Miles will talk to a business owner who's been forced by law to keep his shop open. He's just a few hundred yards from the Lebanese border.

And Senator Harry Reid says he is the victim of one of the country's most common fraud schemes. We'll explain as we continue right here on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Latest from the Middle East now. Israel could decide today on widening the offensive against Hezbollah. Israeli Prime Minister Ehud Olmert is expected to meet with his top Cabinet members today.

Secretary of State Condoleezza Rice in Malaysia for a conference with Asian diplomats. The Mideast, though, is expected to dominate her agenda. She left her envoys behind in Rome after they all made very little progress on Wednesday in resolving the crisis.

And early this morning, north of Beirut, Israeli war planes hit an Army base and a tower belonging to Lebanese state radio. That's according to Lebanese broadcasters. Israel says the target was a Hezbollah radar station.

Happening this morning.

Andrea Yates will be committed to a mental facility in Texas later today. She could potentially spend the rest of her life there. A jury in Houston has found her not guilty by reason of insanity in the drowning of her children back in 2001. An earlier conviction in the case was overturned.

Opening statements are set to begin in California today in the trial of Scott Dyleski. Dyleski is charged with killing his neighbor, Pamela Vitale, the wife of a prominent defense attorney, Daniel Horowitz. It happened when he was 16 years old. Prosecutors say the murder was connected to a drug and credit card scheme.

Former President Gerald Ford is waking up in his Colorado home this morning. The 93-year-old was admitted to a Vail hospital on Monday for shortness of breath. He was released yesterday afternoon. The former president was hospitalized earlier this year for pneumonia.

Senate Minority Leader Harry Reid says he is the victim of identity theft. Reid says somebody used his credit card to ring up about $2,000 worth of charges at Wal-Mart and other stores. The Nevada Democrat says he made the discovery after he opened his bill on Tuesday night.

And the scorching California heat wave easing up a little bit. The death toll, though, keeps climbing. At least 83 deaths are now being blamed on the triple-digit temperatures that began almost two weeks ago. Temperatures are expected to drop by a few degrees by the weekend.

Brings us right to the forecast and Chad Myers.

Chad, a little smidge of good news, I guess, there.

CHAD MYERS, CNN METEOROLOGIST: Yes. And you know what the biggest complaint that the people are having out there is not the 100, 105 in the afternoon, the 91 in the morning. They can't even open up the house.

A lot of houses in California don't have AC. I know you think it's a rich state, but I'm telling you, a lot of people don't have AC because you just don't need it. Temperatures cool down in the morning, you open up the house, cool air comes in, you close the house and it stays cool most of the day. Well how can you open it up and cool it down to 92 in Vegas? That's no help. That's no help whatsoever.

(WEATHER REPORT)

S. O'BRIEN: Yes, so the good news is it's coming down.

MYERS: Yes.

S. O'BRIEN: The bad news is if you're one of those 48-some-odd thousand,...

MYERS: Right.

S. O'BRIEN: ... you're not that happy about that.

MYERS: Not yet.

S. O'BRIEN: All right, Chad, thanks.

MYERS: You're welcome. S. O'BRIEN: Still to come this morning, like many of us, the economy seems to be on a little bit of a vacation, showing slower signs of growth. What does it mean for us? Carrie Lee has got the business headlines coming up next. Stay with us, you're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: New message from al Qaeda on the crisis in the Middle East. The Arab network, Al Jazeera, is just airing a taped message from Ayman al-Zawahiri. He's second in command to Osama bin Laden. That tape carries a warning that the terror group will not remain quiet over Israel's attacks on Lebanon, promising -- quote -- "attacks everywhere."

Let's get right to Peter Bergen. He is a terror analyst. He joins us by phone this morning.

Peter, thanks for being with us. Let's begin with what we know about this tape. First, what do you make of the fact that it's following quite closely the crisis in the Middle East and of course refers to it directly?

I don't know if Peter Bergen can hear us or maybe we're having some trouble with him.

Peter Bergen, can you hear me?

PETER BERGEN, TERRORISM EXPERT: Yes.

S. O'BRIEN: Terrific. Go ahead.

BERGEN: I was having a hard time hearing, -- Soledad.

S. O'BRIEN: All right, well then I'll repeat my question for you. What do you make of the fact that, first of all, this message...

BERGEN: Yes.

S. O'BRIEN: ... from al-Zawahiri follows quite closely since the start of the crisis and also that he is referring directly to what we're seeing now in the Middle East?

BERGEN: Well I think we were expecting a tape from Ayman al- Zawahiri. And I think we're expecting a tape from Osama bin Laden shortly afterwards. My impression is that Ayman al-Zawahiri is a little near the centers of civilians where these kind of tapes can be made and got out. Perhaps in Waziristan which is in -- on the Pakistan-Afghan border about halfway up.

Bin Laden, I think, is perhaps in a more remote area. But I would expect to hear from him in about a week, given past patterns of the way these tapes have happened.

I think both al Qaeda's leaders find it pretty irresistible to comment on the situation in Lebanon right now. Bin Laden, in the past, for instance, has said that the reason he turned against the United States was because of the 1982 Israeli incursion into Lebanon which was supported by the United States.

So you know I think that we're expecting both of al Qaeda's leaders to release tapes commenting on this. For now we have one from Ayman al-Zawahiri.

S. O'BRIEN: Let's get to some of the details that are in these tapes, and these tapes, I should remind everybody, airing on Al Jazeera television. First he says this, the al Qaeda organization will not stay silent regarding what the Muslims in Palestine and in Lebanon are facing. Not stay silent. It's not quite a veiled threat. What do you think he means by that?

BERGEN: Soledad, I'm having a hard time hearing you, I'm sorry.

S. O'BRIEN: All right, Peter, you know what I'm going to do, we're going to break off here. We're going to see if we can establish your signal a little bit better so you can hear me. We'll go to business news now. We'll come back to you in just a couple of minutes.

Peter Bergen joining us, our terror analyst, talking about this new tape from Ayman al-Zawahiri, the number two in command behind Osama bin Laden. We'll get back to him in just a moment so we can continue our discussion about the implications of this new tape that's airing on Al Jazeera.

First though, let's talk business news. Economic slowdown, maybe signs of that.

Carrie Lee has got a look at that.

Good morning.

CARRIE LEE, CNN CORRESPONDENT: Hi, Soledad, good morning.

We're talking about the latest snapshot of the economy from the Federal Reserve showing that for early summer our economy is growing but that the growth rate has slowed a bit. Also consumer spending has been hurt a bit and weak sales at big box retailers, names like Wal- Mart and the like and others, came in showing sales slightly lower as well. Part of the reason, high gas prices. So that's sort of the downside of this report. It's called the Beige Book from the Federal Reserve.

However, we do seem to be showing some signs of relief that inflation seems to be in check. At the close of trading yesterday, though, stocks little changed. Dow, Nasdaq, S&P down just slightly at the finish. The Dow down about one point or so.

For this morning, it is looking like a solidly higher open on Wall Street for the 9:30 opening bell. Among other things investors watching today, a look at new home sales. And we'll get that an hour before trading starts. Finally, the SEC has approved some new rules regarding corporate disclosure. From now on in their annual reports companies will have to give more details about executive pay and how they grant stock options to executives. You know backdating stock options has been a big issue on Wall Street lately, a lot of companies under scrutiny. The SEC has received about 20,000 letters from the public.

So now, Soledad, companies are going to have to disclose exactly how they grant stock options. And the interesting thing, backdating stock options is legal as long as they disclose how they do this to shareholders and as long as the company's board approves it. So basically saying, well, we'll give you the price at maybe the low point during the quarter, something like that. As long as people are aware of how they're doing it, perfectly legal.

S. O'BRIEN: Which has been the problem, nobody is aware and it's all buried in various documents and you have to search for it.

LEE: Yes, yes, and you're not exactly sure who's getting what and how they're doing it. So from now on this is what companies are going to have to do and shareholders should be happy about that.

S. O'BRIEN: You knew that was coming eventually, there was just too much brouhaha about it.

LEE: It's been a hot issue lately. Yes, dozens of companies under the microscope.

S. O'BRIEN: All right, Carrie, thanks.

LEE: Sure.

S. O'BRIEN: Morning's top stories are straight ahead. Stay with us, you're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com