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AMERICAN MORNING

Al Qaeda Warning; Israel Considering Possibility of Widening Campaign; Grocery Store in Metula, Israel, Stays Open by Mandate

Aired July 27, 2006 - 06:30   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Let's get right back to Peter Bergen. He was joining us by phone from Kabul, Afghanistan. We were talking about this latest tape that is airing on Al Jazeera television. It's a tape from the number two in command in al Qaeda, Ayman al-Zawahiri. He is Osama bin Laden's top deputy.
Let's get right back to Peter Bergen, terror analyst.

Peter, thanks for sticking with us while we worked out our audio difficulties. I was asking you exactly what this not veiled at all threat meant from Zawahiri. He said this: "The al Qaeda organization will not stay silent regarding what the Muslims in Palestine and Lebanon are facing."

Will not stay silent. What do you expect he is threatening here?

PETER BERGEN, CNN TERRORISM ANALYST: Well, Soledad, A, I think, you know, this is boilerplate -- boilerplate kind of threats that al Qaeda leaders have made in the past. But, B, there is a sort of al Qaeda presence in Palestinian refugee camps in southern Lebanon. It is conceivable that they could kind of activate those cells with this kind of message. But, you know, I just think that it's not surprising that Ayman al-Zawahiri felt that he had to insert himself into this.

We've had something like six videotapes in the last several months from Zawahiri. He seems to be quite active in making these tapes. And so I don't think it comes as much of a surprise that he seeks to insert himself into this situation.

Al Qaeda really historically has not had much of a strong presence in either Israel or the Palestinian conflicts. And it is conceivable now that -- that they would try and get in there, in a more meaningful way than they have in the past.

S. O'BRIEN: It certainly sounds like it. Here is what else he said. Again, hearing this on Al Jazeera television.

He said this: al Qaeda now saw "all the world as a battlefield open to us. These Israel shells burn our brothers in Lebanon and Gaza." Clearly connecting the dots between what's happening in -- currently right now in this crisis and al Qaeda.

BERGEN: Yes. Well, you know, both Ayman al-Zawahiri and bin Laden have talked about the Palestinian issue many times in the past. You know, one of the famous stories that bin Laden tells about his father is that his father worshipped at Mecca and Madina and also the Dome of the Rock in Jerusalem, demonstrating, you know, the bin Ladens have long had an interest in the Israel-Palestinian conflict.

And I just -- you know, I just -- we've been expecting these. And as I mentioned earlier, I think that we'd be lucky to get an audiotape, I think, rather than a videotape from bin Laden, posted perhaps on a jihadist Web site sometime in the near future making much the same points that Ayman al-Zawahiri has.

To what extent is this just rhetoric? To the extent that they can actually do something, that remains to be seen.

S. O'BRIEN: A final question for you, Peter. We're looking at this tape, and I've got to tell you, it looks like he's in a television studio. I mean, it's lit. They've got murals behind him. You know, here is a guy who is -- it is not a shot out in the desert with a canvas up behind him, hiding the scene.

What do you make of something like that? I mean, it's fairly, you know, good quality.

BERGEN: Well, I think this is very fascinating. Obviously, I can't see the video here, but the video production arm of al Qaeda, which is called Al Sahab (ph), has been very active and is actually kind of upping its game in recent -- in, I'd say, the last year or so, making these well-shot videotapes that you refer to with Ayman al- Zawahiri.

Also, sometimes subtitling the tapes in different languages, sometimes in English, sometimes in German, getting out their message in other languages. We've had tapes from Ayman al-Zawahiri that have talked about Afghanistan and have used subtitles in the local languages of Afghanistan, for instance, Bari (ph) and Pashtun.

So this group, Al Sahab (ph), the al Qaeda video production arm, is certainly somewhat sophisticated. It's the sort of stuff you probably don't actually need a studio necessarily to do, but certainly, you know, a relatively sophisticated software package and also reasonably good camera people. And this is, in a way, what they're doing most at the moment.

I mean, I think bin Laden and Ayman al-Zawahiri realize -- bin Laden himself has said 90 percent of the campaign is the media battle. And I think they've taken that to heart with these tapes.

S. O'BRIEN: Peter Bergen joining us by phone. He's in Kabul, Afghanistan, this morning. We're talking about this new tape coming to us from Ayman al-Zawahiri.

Thanks, Peter. Appreciate it.

The latest on the Middle East now.

Israel leaders are expected to decide today whether to broaden their offense in Lebanon. Israeli Prime Minister Ehud Olmert is meeting with top cabinet members today.

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

Israeli airstrikes have leveled a 10-story building in Tyre in Lebanon. Unclear why that building exactly was targeted. Israel says Hezbollah has been lunching attacks from Tyre.

We want to get back to Miles. He is in Metula in Israel for us this morning.

Hey, Miles.

MILES O'BRIEN, CNN ANCHOR: Hello, Soledad. I'm in Metula, Israel, the northernmost part of Israel.

Straight down that road where that truck is coming up those hills, that's Lebanon. We're only about 250 yards from the border here.

This city is hemmed in. There's Lebanon really on three sides around us. So I guess it should come as no surprise that just about everywhere you go -- it's a city of 2,000 -- or a town of 2,000 -- there are shelters like this.

Come on and take a look down here, Pelen (ph).

You hear that boom? That was a 120 millimeter cannon off of one of the Israel tanks.

A couple stories down, there are several people that are bunking in there. We'll try to get in there a little bit later.

There's one person down there -- many of them are workers who help pick all the fruit in the fields here -- he's got a broken leg, so he's sitting out the day. It's also a pretty cool place to be. Cool by temperature standards, I mean. Otherwise, the streets are pretty empty here, save the media and the farmers who have to get their fruit harvested at this time of year.

While we have moved from Haifa to Metula this morning, no less than 26 Katyusha rockets have rained down on the northern part of Israel.

CNN's Fionnuala Sweeney joining us now from Haifa with word on that, but also word of an important cabinet meeting under way. Prime Minister Ehud Olmert considering the possibility of widening this campaign.

Fionnuala, tell us more.

FIONNUALA SWEENEY, CNN CORRESPONDENT: Well, Miles, yes. I mean, this campaign is now into its third week, and Israelis have been prepared for a short, sharp war. And traditionally, that is what Israel is built for, short, sharp wars. But there have been a number of casualties. Nine Israeli soldiers killed in southern Lebanon and dozens injured yesterday. And so, Ehud Olmert now meeting to decide whether or not to expand the ground offensive. It's thought the cabinet wants to just increase the number of military airstrikes over southern Lebanon, but the Israeli army want to see an expanded ground offensive. And we're still waiting for that meeting to wrap up.

But this is really what's taking place against the backdrop of increasing violence along the Israeli-Lebanese border. We're also having Katyusha rockets still falling across northern Israel. Some 29 Katyusha rockets, we're told, fell today across the band of this country -- northern band of this country. There have been no injuries reported, but Hezbollah still digging in and very capable of launching attacks -- Miles.

M. O'BRIEN: Fionnuala, it's interesting. In the wake of the secretary of state's conference in Rome, where there was no cease-fire deal, they weren't even close to one, there is a suggestion today in the Israeli press that that is, in some sense, a license for the Israelis to continue their campaign.

Help us understand that.

SWEENEY: Well, that has always been the thinking. Sorry. That's always been the thinking, to a certain extent, a wider perception -- there's been a perception that Israel has been given the green light to carry its offensive on for as long as it can, and then at some point there will be a cease-fire.

As you know very well, Miles, Condoleezza Rice saying there can only be a cease-fire if it is sustainable on the ground and that there can't be a return to the status quo. But essentially yesterday what you had was a conference in Rome where the protagonists, Israel and Hezbollah, were not represented in any form or fashion. And there are those that say Syria and Iran, who are the backers of Hezbollah, also need to be drawn into this argument. There are plenty of people who say otherwise, that they shouldn't.

But essentially, yes, Israel now, one of its top military commanders saying that this campaign could take several weeks. It remains to be seen whether or not the broad overwhelming public support here in Israel for that military campaign continues.

Opinion polls showing that 95 percent of Israelis still think that this campaign is worthwhile, 77 percent of people still supporting Ehud Olmert, thinking he is doing the right thing. But, Miles, it has to be said this opinion poll was taken before the Bint Jbeil incident in southern Lebanon yesterday in which nine Israeli soldiers were killed. And, of course, nine Israeli soldiers, it remains to be seen whether or not the public in Israeli can sustain those kinds of casualty numbers.

M. O'BRIEN: It was dark day, and the fighting around Bint Jbeil continues. I think a lot of people are surprised about that.

Fionnuala Sweeney in Haifa.

Thank you very much.

Now let's move our attention to Larnaca, Cyprus, and some questions many of us have had in our minds. That United Nations observation post, which, incidentally, really is just over the crest of that mountain there where the four U.N. observers were killed the other day, the question is, how is it that the Israelis targeted that location? And all the while we've had U.S. forces in and out of that part of Lebanon, part of the evacuation effort.

CNN's Barbara Starr now from Larnaca with more on how the U.S. is trying to stay out of harm's way here -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Miles, hello to you.

Well, you know, this situation with the U.N. observation post in southern Lebanon is of great interest to military forces operating in the region. Even over my shoulder today you see the Indian warship Mumbai, a number of nations still have military forces out here in the eastern Mediterranean.

Now, what we do know, of course, is the United Nations has had excellent communications with the Israelis in the years they've been in southern Lebanon, making very clear where they operate, where their observation posts are, and exactly their situation. So it is not clear how that situation happened with the Israelis.

What the U.S. military has done to make sure it didn't happen to them was very interesting. What we now know is the U.S. military had a liaison officer sitting with the Israeli armed forces around the clock, literally, over the last many days as U.S. warships moved in and out of the region, moved in and out of Beirut, to make sure that the Israelis understood exactly when the U.S. was moving those amphibious warships into the region, when it was putting landing craft on the beach, when U.S. civilians would be moving into those landing craft.

A lot of communication back and forth. They knew exactly, the Israelis, when the U.S. would be trying to clear through the Israel naval blockade as it moved in and out. And what we can also tell you is that the U.S. military was, of course, watching the Israel military very closely.

A few days ago, when we were on board the USS Nashville, as it was the first amphibious ship to move into the area to get U.S. civilians, what we learned afterwards is that the captain of the Nashville was watching as Israeli Defense Force F-16s were in the air as we were there. But no actions by the Israelis while U.S. forces were in the Lebanon area.

The U.S. had made it very clear that if the Israelis had conducted any operations close to them, the U.S. would turn around and leave and not be able to get the civilians. So, at the end, it worked out very good for the U.S., but they are certainly watching this U.N. situation very carefully -- Miles.

M. O'BRIEN: Well, we hope that continues. Barbara Starr in Larnaca, Cyprus, watching things from there.

The evacuation and the humanitarian effort continue as this war continues to escalate.

We're hearing a constant barrage of tank fire and heavy artillery nearby, 120-millimeter cannons being lobbed over those hills there. That has pretty much made this town a ghost town.

This is the high season. There should be tourists everywhere here. The few shops that are opened -- actually, there's a hotel or two. And this shop here, translated from Hebrew, that is "Lick the Fingers," essentially. It doesn't translate very well. Basically, "Finger-Licking Good," I guess.

I want to talk to the owner of the grocery store. There he is. That's Sam.

Wave, Sam.

We'll ask him why he is still open, why he is still here. You'll be interested to hear the reason coming up.

(COMMERCIAL BREAK)

M. O'BRIEN: Welcome back live from the town of Metula, the northernmost town in the country of Israel, surrounded on three sides by Lebanon.

One of the few places open here is this grocery store. Literally translated, "Lick the Fingers," or "Finger-Licking Good," or something like that.

Let's go in and talk to the owner here, Sam Elchadif, who speaks five languages. Fortunately, English is one of his good ones.

Sam, why are you here? Why is this store open?

SAM ELCHADIF, METULA RESIDENT: We are supposed to stay open during the war because we are the only grocery in Metula.

M. O'BRIEN: So this is literally a law, a mandate, huh?

ELCHADIF: Yes. We are supposed to stay here and to give all the services which are needed for the people which live here and need the food, all the basic food. And we are here all during the war.

M. O'BRIEN: How do you feel about having to stay open?

ELCHADIF: I don't like it.

M. O'BRIEN: Why not?

ELCHADIF: Because I want to be with my family now. My wife and children are away. They are in Tel Aviv. And it would be much nicer for me to be with them during the war than to work here. M. O'BRIEN: So you sent them south, like a lot of people here.

ELCHADIF: Yes.

M. O'BRIEN: There aren't many people in this town right now. It must not be very good for business.

ELCHADIF: It's not good for business, but, you know, life is not only business.

M. O'BRIEN: So you feel like this is part of doing your part to help out the Israel Defense Forces?

ELCHADIF: Yes, of course. This is my part in this war, to stay here, to give the service that people need here during the war. And to do my best for everybody.

M. O'BRIEN: A steady stream of IDF soldiers coming through here. They do rely on you, don't they?

ELCHADIF: Yes, they do. Most of them. They don't eat the army food. They're just like in every army, they like more what is just around the corner.

M. O'BRIEN: Yes. So, what has it been like being in this town? It seems very lonely here right now.

ELCHADIF: It's pretty lonely. You can see most of the people which are here are people which have to stay here. Most of the people that could leave the place left it a long time ago, two weeks ago.

M. O'BRIEN: You've lived here a long time. You haven't had this store quite as long, but you've been in this part of the world for a long time. What are your thoughts on what lies ahead? Do you think this is going to be a long-term kind of situation?

ELCHADIF: It depends how it will be managed by the government. I think that we are waiting for about one or two months ahead -- or four from now. And I hope it will end good. A situation that for the Lebanese and for us, there will be peace here.

M. O'BRIEN: Are you scared?

ELCHADIF: No. I'm used it to, all my life, 35 years here in Metula, five wars, nothing to be scared of.

M. O'BRIEN: Sam Elchadif, the owner of -- how do you translate it?

ELCHADIF: Sam's Grocery.

M. O'BRIEN: No, the store?

ELCHADIF: Sam's Grocery.

M. O'BRIEN: Just Sam's Grocery. It says the finger-licking good...

ELCHADIF: No, this is...

M. O'BRIEN: OK. Sam's Grocery. It's simpler that way.

Sam, of Sam's Grocery, good luck to you and everybody here in Metula.

ELCHADIF: Thank you very much.

M. O'BRIEN: And we'll be back with more AMERICAN MORNING in just a moment.

Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: We're learning more now about that Israel airstrike that killed four U.N. observers. Israel says the bombing of a U.N. outpost in Lebanon was a wartime accident. But the U.N. says the observers sent repeated warnings to Israel's military that the bombs were coming dangerously close to their outpost.

We've got more now from Beirut Bureau Chief Brent Sadler.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN BEIRUT BUREAU CHIEF (voice over): United Nations troops in south Lebanon recover the charred remains of fallen comrades, victims of an Israeli airstrike on this U.N. position. As graphic pictures exclusive to CNN clearly show, the observation post was reduced to rubble. Four military observers from Canada, Austria, Finland and China were huddling inside the bunker when it took a direct, so far unexplained, Israeli hit.

CAPT. RONAN CORCORAN, U.N. OBSERVER: All players out here understand we are unmanned, we fly a blue flag, we are the secretary general's eyes on the ground.

SADLER: This is what the remote outpost looked like during the attack, a position that stood since U.N. observers first came to Lebanon some 50 years ago to monitor the movement of illicit weapons close to Israel's border.

On the day that the post was hit, the peacekeepers logged about a dozen warnings to Israel's military that shell fire was coming too close. Despite all those warnings, U.N. officials say at least one shell and perhaps as many as two bombs destroyed the post and killed the four observers inside it.

KOFI ANNAN, U.N. SECRETARY-GENERAL: People on the ground were in touch with the Israeli army, warning them, please be careful, we have positions here, don't harm our people.

SADLER: At first, the U.N. chief said it appeared the attack was deliberate, drawing immediate Israeli denials. TZIPI LIVNI, ISRAELI FOREIGN MINISTER: It was not a deliberate attack because Israel will never -- and never targeted it, and will never target United Nations forces.

SADLER (on camera): Hezbollah rockets claim security sources in Lebanon were fired from positions close to the U.N. base on previous days, but not the day it was struck.

(voice over): Ten years ago, when Israel last attempted to destroy Hezbollah, Israel shell fire hit a U.N. compound in Kanar (ph), south Lebanon, killing more than 100 Lebanese refugees. An inconclusive Israeli investigation deepened concerns among some U.N. peacekeepers that Israel is too often careless when firing at targets in Lebanon.

Brent Sadler, CNN, Beirut.

(END VIDEOTAPE)

S. O'BRIEN: An investigation of that current shelling is now under way.

Andy Serwer is "Minding Your Business" just ahead.

We've got a short break. We're back in just a moment.

Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Chicago's City Council voted to provide a living wage for workers at big retail outlets.

Andy Serwer is looking at this as he minds your business.

Good morning.

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Good morning, Soledad.

A lot of eyes on this landmark vote yesterday in the city of Chicago. An ordinance approved by the city council requiring big box retailers to pay what's called a living wage. That means at least $10 an hour plus $3 in fringe benefits by mid-2010 for stores with over a billion dollars in sales -- that would be nationally -- and/or if it's more than 90,000 square feet.

Obviously, this is targeted squarely at Wal-Mart and other big retailers like Target, Lowe's and Home Depot. The Illinois State minimum wage is $6.50, federal is $5.50.

Mayor Richard Daly opposes the measure. He may veto it. Obviously, Wal-Mart opposes the measure. They were set to open a store inside the city in September, and they may simply pull out.

And it's an interesting decision here, Soledad, because obviously, they're targeting big stores. And obviously the little stores have the political clout to get this kind of a measure passed.

So, is it really fair for a store that's, say, 80,000 square feet to pay people $5 an hour, whereas the store next door that's much bigger or a little bit bigger has to pay them $10 an hour?

S. O'BRIEN: This has legal challenge written all over it, I would think.

SERWER: I would think it does. And, you know, it's going to be very interesting to see what the mayor does. The mayor has to have enough clout to make sure that the veto isn't overridden.

A very close vote there, 34-14, 35 votes to override the veto. And a lot of special interests involved.

I think the real big point here is, it's not necessarily workers who are getting protected here. Rather, it's little store versus big store, and that's what's really going on here.

S. O'BRIEN: Right. And kind of another way to do an end run around Wal-Mart. I mean, if they didn't want it in the city limits anyway.

SERWER: That's right. They're out.

S. O'BRIEN: Kind of, you know -- interesting.

All right, Andy. Thank you.

SERWER: Thanks, Soledad.

S. O'BRIEN: Let's get a check of the forecast. Chad's got that. He's at the CNN weather center.

Hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Soledad.

(WEATHER REPORT)

MYERS: The next hour of AMERICAN MORNING starts right now.

S. O'BRIEN: Thanks, Chad.

This just into CNN. A new warning from al Qaeda's number two. It's a promise of action from al Qaeda in the Middle East conflict.

Israel and its mission to destroy Hezbollah in southern Lebanon. An Israeli cabinet meeting going on right now could mean more airstrikes.

We're live there with the very latest.

And first, pictures this morning of the Israeli action in southern Lebanon. Tanks ready to push forward once again.

We'll show you the very latest, all ahead on this AMERICAN MORNING.

Good morning. Welcome, everybody.

You're watching a special edition of AMERICAN MORNING.

I'm Soledad O'Brien in New York.

Hey, Miles.

M. O'BRIEN: Good morning, Soledad.

Miles O'Brien reporting live from Metula, Israel, the northernmost point in Israel, hemmed in by the mountains of Lebanon.

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