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THIS WEEK AT WAR

CNN's This Week at War

Aired August 5, 2006 - 19:00   ET

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


CAROL LIN, CNN CORRESPONDENT: "This Week at War" begins in just a moment, but first a look at what's happening in the news. Al Qaeda's number two says members of an Egyptian militant group are joining his terror network. Amin Al-Zawahiri made the statement in a message shown on al-Jazeera television just two hours ago.
And U.S. military reinforcements are now on the streets of Baghdad. Iraqi police used loud speakers to reassure residents that the American troops are there to protect them. The U.S. and France have come up with a draft resolution calling for a halt to fighting between Israel and Hezbollah. The U.N. Security Council began discussions on the draft today. That's what's happening right now in the news. I'm Carol Lin. Now to "This Week at War."

JOHN KING, CNN ANCHOR, THIS WEEK AT WAR: This week at war, the conflict along the Israeli-Lebanon border escalated dramatically, neither side able to deliver a knockout blow. Diplomats work on a cease-fire but other nations that don't want an end to the fighting. In Baghdad, Iraq's president says Iraqi troops will take over security by the end of the year. Is this realistic or is Iraq already plunging into civil war? I'm John King filling in for John Roberts who is on special assignment in the Middle East. Let's take a look at what our correspondents reported day by day.

Monday, Lebanese civilians emerged from hiding to find food or to flee as Israel declares a lull in aerial bombing. Tuesday, thousands of Israeli ground troops crossed the Lebanese border, engaging in fierce combat with (INAUDIBLE) Hezbollah fighters. Wednesday, despite Israeli claims of degrading the Hezbollah, more than 200 rockets smash into Israel, the largest barrage of this war. Thursday, in Baghdad children were the targets when a bomb exploded in a soccer field as sectarian violence continues. Friday, tens of thousands demonstrated in Baghdad in support of Hezbollah, as the Lebanese fighting raised tensions across the Middle East, this week at war.

In Israel (INAUDIBLE), there are hundreds dead, more than a million fleeing their homes. Israel has sent thousands more troops into battle, but the Hezbollah militia is continuing to hold out and becoming heroes to many Muslims. Is anyone winning this conflict in the Middle East? Joining me to discuss this are Ben Wedeman in Tyre, Lebanon, Matthew Chance in northern Israel and CNN military analyst Brigadier General David Grange, U.S. Army retired. He's in Chicago. On Thursday, Paula Hancocks reported from Israel on the increasingly deadly rain of missiles.

PAULA HANCOCKS, CNN CORRESPONDENT: Less than one minute after a Katyusha rocket hits, it's carnage. A car less than 10 meters from the point of impact burst into flames. The wounded lay where they fell, waiting for help. The man driving this car was hit by pellets packed into the rocket warhead and lost control. Emergency services managed to free him from the wreckage but he dies on his way to hospital. Four more people died at the scene, a father and his 14- year-old daughter among the victims.

KING: Matthew Chance in northern Israel, on the one hand, the Israeli military claims success against Hezbollah and yet the rockets keep coming. How does the Israeli military explain what to many Israeli civilians, I assume, would appear to be a contradiction?

MATTHEW CHANCE, CNN CORRESPONDENT: What the Israelis say is that they need to get ground forces up in there in southern Lebanon to push the Hezbollah as far north as possible, to deprive them of the kind of launching areas that they've been using over the past several weeks to hit northern Israel. But the Israeli prime minister has made it quite clear that by military means alone, they don't believe they can ever take away Hezbollah's missile threat. because it does have these very long-range missiles and can even fire them potentially right from at the north of Lebanon, right into northern Israel. So that would have to come to some kind of political solution imposed by the international community. That's the best Israel can hope for. At the moment they are just expanding their operations, trying to establish a buffer zone away from the Israeli border to stop the incursions of Hezbollah forces coming in and snatching Israeli soldiers such as the incident that started this whole war off in the first place, John.

KING: Well, Ben Wedeman, you hear Matthew talking of the ground incursion. The Israelis say some of those missiles launching from Lebanon into Israel are coming from where you are in Tyre and surrounding areas. Any evidence that the ground incursion is coming your way?

BEN WEDEMAN, CNN CORRESPONDENT: At this point, no, no evidence really. Most of the action John has been along these border villages. We've seen sort of air activity come and go. Sometimes it's intense, sometimes it's relatively low, but in terms of signs on the ground of an impending ground incursion, none, really. John?

KING: General David Grange, we are approaching one month in this conflict. The diplomats are working at it, but the fighting continues. Who's winning the war?

BRIG. GEN. DAVID GRANGE, U.S. ARMY (RET): I think right now Israel has the upper hand because of the damage they have inflicted on the infrastructure and the war-making capability of the Hezbollah. Now the rocket issue is that there's thousands and thousands of short-range rockets left and they are in this area between the border and a Latani (ph) River and it's going to take a while to clear that area out, to eliminate the short-range rocket capability. Of course, that's what Israel would like to do, at least the military part of Israel. I'm not sure about their government and before that happens, it would be very tough to bring in any kind of a multinational force to maintain any kind of a peace if, in fact, there is a cease-fire which I don't think will be any time soon. KING: As we talk about the fighting and as we cover the fighting, there is of course a humanitarian aspect to the story as well. On Wednesday, our Karl Penhaul reported on the difficulties of getting humanitarian aid into southern Lebanon at this time of war.

KARL PENHAUL, CNN CORRESPONDENT: Before heading into the countryside with these supplies, aid officials must get a pledge from the warring parties not to attack their aid convoys. Israel resumed their strikes Wednesday morning around Tyre in retaliation against Hezbollah launching more rockets from the city's outskirts. For now it's too dangerous for the Doctors Without Borders charity to venture outside Tyre, so they are distributing washing kits along with diapers and powdered baby milk to around 400 refugees at this school in town.

KING: Ben, you have seen the frustration yourself first hand along with Karl Penhaul. Is the situation from the humanitarian standpoint getting better, getting worse?

WEDEMAN: There is no question it is getting worse. Certainly when we had a chance to go into some of those border villages, these people were living in horrendous conditions. They had been in bomb shelters or basements of their houses for weeks. They all had sort of a pallid look about them at best. They had been eating old food, old bread. It's very hard for them to move out, get around. It's very difficult, as Karl mentioned in his report, for these relief convoys to get in. They have to get a green light from the Israelis and from the relief officials I have spoken with, I have heard that more often than not, their request for a green light from the Israelis are turned down. We know that relief officials are saying they are worried about the outbreak of disease, because people are not drinking clean water. They are living in very difficult, cramped conditions. The food they are eating isn't very good, so across the board really, the humanitarian situation in southern Lebanon is very, very worrying for these officials. John?

KING: As Matthew Chance talked about earlier, there is a frustration among many Israeli citizens as to exactly what are the tactics of their military. On Wednesday, our Michael Ware reported on a daring commando raid by Israel deep into Lebanon.

MICHAEL WARE, CNN CORRESPONDENT: Seventy miles from their own border, swooping in at night from the air, a classic Israeli commando raid. The target? A hospital in the town of Balbet (ph), an ER clinic, but to Israel's generals it's much more than that. Claiming they had intelligence that it was a Hezbollah logistics base, a possible safe house for a senior leader and perhaps where two captive Israeli soldiers were treated.

KING: Matthew Chance in northern Israel. Is the Israeli military adjusting its tactics? Do we expect more commando raid like this or is the attention now on this ground offensive?

CHANCE: I think the attention is very much on the ground offensive in southern Lebanon because the Israeli military and the Israeli government is very aware that the diplomatic clock may well be ticking towards some kind of internationally imposed cease-fire. I think we will be seeing more commando raids like the one that Michael Ware was just describing because one of the objectives that Israel wants to put across in the minds of Hezbollah is that it can strike anywhere, not just in southern Lebanon, but anywhere it chooses to across Lebanon and it's prepared to do that. But in terms of the military emphasis at the moment, that's very much on establishing that buffer zone inside Lebanon north of the Israeli border, so if any multinational force is deployed, it can take over where the Israelis leave off as it were. John.

KING: And General Grange, Matthew raises the question of if any international force is going to be deployed. When you watch the Israeli tactics, do you see a government that thinks a cease-fire is coming or that think the diplomats going to keep talking for a while?

GRANGE: There's discussion as if it's coming, but I think deep down they realize the conflict's going to last for a while. I mean, the Hezbollah is going to continue to fight. They are not going to give up. They are not going to turn in their weapons and so they truly have to be destroyed to a certain extent before anything like that can happen and it can't be done, OK, cease-fire, move back and then months later, you're move in some type of a multinational force. There has to be relief in place unit for unit and the conditions have to be with a multinational force, does not have to resume the same type of fighting that the Israeli forces are currently involved in.

KING: General Grange, I'm going to ask you to stand by. Our thanks to Ben Wedeman in Tyre, Lebanon, Matthew Chance, difficult duty in northern Israel, Matthew and Ben, please stay safe. General Grange, stay with us. Next, when we turn to Iraq and that question, can Iraqi forces control the spiraling sectarian violence or is Iraq at the tipping point to a full scale civil war. First, a look at the human cost of the conflict in Iraq and across the Middle East.

(COMMERCIAL BREAK)

LIN: More on "This Week at War" in just a moment, but first a look at what's happening right now in the news. There is a possible step toward a Middle East cease fire today. The U.N. Security Council just hours ago held its first meeting on a peace plan proposed by the United States and France. Up to now, the Bush administration has refused to press Israel to end its offensive against Hezbollah. But Hezbollah is not ending its own offensive. Three Israeli women killed by Hezbollah rockets today. Israel says its civilian death toll has reached 33. The fighting has reportedly claimed the lives of more than 550 Lebanese. That's what's happening right now in the news. I'm Carol Lin, now, to more "This Week at War."

(BEGIN VIDEO CLIP)

SEN. JOHN McCAIN (R) ARIZONA: You said there is a possibility of the situation in Iraq evolving into civil war, is that correct?

UNIDENTIFIED SOLDIER: I did say that, yes, sir.

McCAIN: Did you anticipate this situation a year ago?

UNIDENTIFIED SOLDIER: No, sir.

McCAIN: Did you, General Abizaid?

GEN. JOHN ABIZAID, U.S. CENTRAL COMMAND: I believe that a year ago, it was clear to see that sectarian tensions were increasing, that they would be this high, no.

(END VIDEO CLIP)

KING: A grim assessment from top military commanders at a Thursday hearing of the Senate Armed Services Committee. Can the Iraqi insurgency be stopped? Joining me to discuss this, our Harris Whitbeck from Baghdad, Pentagon correspondent Barbara Starr at her post and again, CNN military an analyst, Retired Brigadier General David Grange. He's in Chicago. Death struck at the young and old this weekend in Baghdad. On Thursday, Harris Whitbeck reported on one particularly tragic incident.

HARRIS WHITBECK, CNN CORRESPONDENT: The mangled remains of bleachers, a bloodied soccer shoe, evidence of the unexpected carnage during an afternoon soccer game in a Shia neighborhood of Baghdad. The game suddenly interrupted when two bombs exploded killing 12 players and spectators, including three teenagers and wounding 16. The Iraqi government and the U.S. military hope a new plan to put more American troops onto the streets will go a long way towards curbing the growing sectarian violence.

KING: Harris Whitbeck, you see scenes like that and it's hard to take at face value President Talibani's (ph) comments that Iraqi security forces will be ready by the end of the year.

WHITBECK: That's right John. The violence here is ongoing, it's random and it's really all over. Just in Baghdad, the attacks come all the time and there is really no pattern set in who is being targeted. So there is a real sense of unease here among the Iraqi population and also senior U.S. officials on the ground told us earlier this week that they had never seen the situation in Baghdad as uncertain as it is now. They also made the point that the battle for Baghdad is really the battle for all of Iraq. If things go down the drain in Baghdad, that means serious consequences for the U.S. effort here in the rest of the country.

KING: And Barbara Starr, what Harris Whitbeck hears from officials in Baghdad the United States Senate heard from the generals and the top military brass the other had, had to be almost embarrassing for the generals to go up there after more than three years in Iraq, after so many U.S. deaths, after spending billions of dollars for them to say it's getting worse.

WHITBECK: Both of those generals, Generals Pace and General Abizaid are two of the most candid there are out there and they were very deliberately choosing their words and their tone. They are both said by senior aides to be extremely concerned about the current situation. And John, perhaps what was most interesting is what was not said. Donald Rumsfeld, secretary of Defense, sitting between both of them, he kept quiet on this point. He didn't contradict either of them.

KING: General Grange, tipping point is the military term of art. There are some who say Iraq could be on the tipping point into full scale civil war. Your observations and how do you define tipping point the other way, to get sectarian violence under control?

GRANGE: I believe it is on the fence. There is no doubt about it and I do believe that Baghdad is the center of gravity or the key, key piece of Iraq and if that goes, it's going to influence some other areas. But if you recall how Fallujah and other areas would get -- violence would increase and then it would get temped down. I believe they can get it under control. I think the U.S. forces in there are key to that. The Iraqi military is well-trained from the forces that are already met a certain standard. The weak link is the police. If they can get the police involved, now that's going to take a while and that's what makes the comment about we'll be ready at the end of the year, that's four or five months. That's a tall order to get the police squared away so they are trusted, they are efficient and they are respected by the local people.

KING: And Harris, we here of demonstrations in Baghdad about the fighting in Lebanon, criticism of Israel, support for Hezbollah. Connect the dots, if you will. Two different conflicts or one large dust up in the region?

WHITBECK: The radical Shiite clerk (INAUDIBLE) al Sadr is trying to make the connection quite clear. He says that Hezbollah's fight is everyone's fight. He had a lot of people out there wearing white shrouds signifying their willingness to die for that cause and say that they are willing to go over to Lebanon to help the Hezbollah fighters. The protests that we saw here this weekend, it has been described as one of the largest protests in all of the Middle East in support for Hezbollah.

KING: And Barbara, the political leadership in the United States, namely, the president of the United States, said the Iraq war is about a down payment on stability and democracy in the Middle East. The generals must watch this and see troubles in Iraq, Hezbollah flaming up tensions with Israel, they must watch that with a huge source of concern.

BARBARA STARR, CNN CORRESPONDENT: John, I think that all of the generals, all the top military leaders feel the ground has essentially shifted. They are looking at Hezbollah as what would happen if the U.S. military had to fight Iran, had to fight Syria, that it would face a network of terrorist activity, of guerrilla-type forces, not a conventional war. They are watching all of this very carefully because they know they could be next in the box fighting this group.

KING: Your thoughts on that General Grange, is this a laboratory of sorts, what we're seeing?

GRANGE: This issue with the militia, the Shia militia in Baghdad is of grave concern. It is connected to what's going on in Lebanon and I think this peace may get a little worse than get resolved quickly. That's because there was an opportunity to do something about the Sadr (ph) militia a while back and it wasn't taken the full course. You can look back and say, gee, I wish we would have done that. That's probably the case. It's a lot stronger than it was. It is connected. It has to be resolved or you're going to have a militia issue in Iraq like you do with the Hezbollah in Lebanon.

KING: Our generals watching the situation both in Iraq and with Hezbollah and I can tell you from my time in Israel last week, the Israeli people view this not as a battle against Hezbollah. They view this very much as a battle against Iran. General David Grange in Chicago, Barbara Starr at the Pentagon, Harris Whitbeck in Baghdad, thanks to you all. This next story, it's about love. about a guy who was crazy about his wife, about baseball, and about his country.

(BEGIN VIDEOTAPE)

EVELYN MORROW, WIDOW OF CPL. MORROW: Him being in the military was everything. He always wanted to be a Marine.

I received this teddy bear in the mail and it said someone in Fallujah, Iraq, loves you. And he sent this to me to say, I love you and I'll be home soon.

They went through Fallujah, house-to-house and got all the insurgents out. He really believed in helping these people, helping them not live in fear. He was an avid Angels fan. He loved the Angels. He always dreamed of going on the home field and also throwing the first pitch at Angels stadium, meeting the players, just being on the field was incredibly overwhelming for him. He went on the field, we were looking around and all of a sudden, Jason drops on one knee, pulls out a box and says, will you marry me, Evelyn? He was everything I ever lived for in a man. Jason was genuine. He can just get into your heart and stay there. Everybody who has met Jason has some great memory of him, to know Jason is to love Jason. He was a hero. That's how I would like Jason to be remembered.

(END VIDEOTAPE)

KING: In June, Corporal Morrow was struck by a roadside bomb in Iraq and died at the age of 27.

Next, we return to the conflict in Lebanon, generals and politicians may have other concerns, but the overwhelming questions from civilians on both sides is undoubtedly this. When will the fighting stop? The answer to that question is still being hashed out. Much more on that when we come back. But first, a look at some of those who fell in this week at war.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: We've wanted very much to see an end to this conflict. We need to end the hostilities in a way, though that points forward a direction for sustainable peace.

(END VIDEO CLIP) KING: Secretary of State Condoleezza Rice speaking to CNN's Larry King on Thursday. So what will it take to halt this conflict? What are the outlines of a lasting settlement? For the latest on the diplomacy, I'm joined by CNN senior United Nations correspondent Richard Roth. He's at the U.N. and Vali Nasr, a Middle East expert with the Council on Foreign Relations, joining us today from San Diego. On Wednesday, I reported on the state of U.S. diplomacy in the Middle East.

(BEGIN VIDEO CLIP)

RICE: What we're seeing here in a sense is the growing, the birth pangs of a new Middle East.

KING: That line was ridiculed in the Arab world and drew this rare rebuke from Saudi Arabia's foreign minister.

SAUD AL FAISAL, SAUDI FOREIGN MINISTER (THROUGH TRANSLATOR): We want to go back to the old Middle East. The only thing we see from this new Middle East is more problems and more disasters.

KING: Such complaints and images like these reflect one major dynamic complicating Middle East diplomacy, a sense among Arabs that with the exception of Iraq, this administration has all but ignored their region and when it does get involved, it's biased against them and in favor of Israel.

(END VIDEO CLIP)

KING: Richard Roth at the U.N., we know the United States has a credibility crisis right now in the Arab world. There are hangovers from the Iraq and other debates at the U.N. as well that complicates diplomacy now?

RICHARD ROTH, CNN CORRESPONDENT: I don't think that hangover has ever eased John, but this time what's different, as compared to the run-up to the Iraq war, where France and the United States were diametrically opposed, they are working in this case on Lebanon much more together. They may have their differences and those differences have been there in the corridors and behind the scenes and negotiations, but they are working together, they believe, toward a better Lebanon.

KING: Vali Nasr, are you confident that the United Nations' ability to solve this? There are many who would say this is the U.N.'s fault, they didn't enforce one of its own resolutions, 1559?

VALI NASR, COUNCIL ON FOREIGN RELATIONS: The U.N. will not be able to provide a lasting cease-fire because it does not have a grip on the political process. It may be able to bring about a cessation in hostilities in the short-term.

KING: A cessation of hostilities that would require some form of international force. They are talking about first, Vali Nasr, the existing force being beefed up a little bit, the Unifil (ph) force, then a major international force. How long would such a force be there and do you think it will be effective if it doesn't have a strong mandate to essentially go find Hezbollah and disarm it?

NASR: No, I don't think it would be very effective in the long run, not because it cannot disarm Hezbollah, but because Iran and Syria are not sitting at the table and without their participation, there is no way to guarantee a cease-fire.

KING: Richard Roth, Iran and Syria not sitting at the table, should they be?

ROTH: Many here think they should be. Secretary General Annan has said they should be. The United Nations has got 192 members now and they certainly believe in talking here and Israel accuses Iran and Syria of being behind everything. Eventually, they are going to have to play some type of role. Will they be able to influence Hezbollah to respect any form of international peacekeeper that arrives in that buffer zone?

KING: Well, one of the sticking points, of course, is what would the mandate of this new international force be? How robust would it be?

That is making some nations hesitant to participate until they quite understand this. It's a subject that U.N. and international politics.

But I want to share with our viewers and with our guests a poll taken here by CNN and released Friday here in the United States.

It asked the question: "Should U.S. troops be part of an international peacekeeping force in Lebanon?"

Fifty-one percent of Americans favor taking part; 45 percent oppose.

Richard, is part of the debate at the U.N. are there those who say if the United States wants to broker this solution, if the United States wants to have a leadership role, the United States should put boots on the ground?

ROTH: Don't hear that that much. I think they know the U.S. is ready to provide logistical support. But those Americans, of course, they never really understand those people who are polled, what the U.S. role is here, when they hate the U.N. They don't understand the U.S. is a major player on the Security Council.

That troop -- the troops are still not there. No country wants to offer a soldier if they don't know what exactly their role will be.

KING: Vali Nasr, help us connect the dots to the big picture here. The immediate crisis, of course, is the fighting between Israel and Hezbollah in Lebanon.

But you have the Iran resolution just passed. The question is will Iran comply? Will the United Nations have to deal with that?

You have Iraq in turmoil, at best, some think on the verge of a civil war.

Connect the dots for us about what the international community needs to do not just about the immediate crisis, but about the region.

NASR: Well, this is -- the difficulty is that the U.S.'s political capital in the region has been declining as a consequence of this conflict. Hezbollah is becoming much stronger. And Iran, the one country in the region that the U.S. has no dealing with, is holding a lot of the cards. And our allies in Saudi Arabia, Jordan and Egypt have been marginalized.

We're going to have a very tough time to pressure Iran, which feels fairly confident coming out of this conflict, to take us seriously because it doesn't look at the military option as being something viable for it to be compelled to comply with a resolution.

KING: And, Richard, is this a wake up call for the United Nations to deal not just with the short-term, immediate crisis, but the big picture? Or do the diplomats there say it's really a U.S. problem, the U.S. has to get back into the Israeli-Palestinian dispute, do a better job in Iraq and so on and so forth?

ROTH: I think that despite the views that differ, I think people would really say this is a good chance, when this is all over, to do something more substantive in the region. Of course, recently, two years ago, a Security Council resolution said militias should be disarmed in Southern Lebanon. That was never really enforced.

The Security Council has become very used to issuing these proclamations, resolutions, and then they don't "implemented," that horrible diplomatic word.

So there will be -- they'll have another chance now in Lebanon.

They're still investigating who killed the former prime minister there, France and the U.S. working together, pushing the Security Council to demand action from Syria.

KING: Vali Nasr in San Diego, Richard Roth at the United Nations.

Gentlemen, thank you both for your thoughts on the diplomatic progress, or lack thereof, underway.

And quite an interesting dynamic as we watch all this. For the first time, we're seeing criticism here in the United States and around the world of the U.S. secretary of state, Condoleezza Rice.

War can be a distant concept in the quiet halls of the United Nations. It's quite a different experience when you live where the rockets land.

John Roberts visited just such a place earlier this week, and we'll have that and the latest news when we come back.

But first, this week brought a new way to get a grasp of the immense impact of war. The Southern Beirut suburb of Dahiyah, as seen from space on July 12th. Here's what it looked like 10 days later. The effect of Israeli bombs clear in blocked streets and shattered houses. A picture of war before and after.

THIS WEEK AT WAR.

(COMMERCIAL BREAK)

CAROL LIN, CNN ANCHOR: More of THIS WEEK AT WAR in just a moment.

But first, a look at what's happening now in the news.

The U.N. Security Council is poring over a draft resolution aimed at ending the fighting between Israel and Hezbollah. Now, it was hammered out by the U.S. and France and it calls for a cessation of hostilities. A vote is expected next week.

And President Bush held briefings with his national security team in Crawford, Texas today. The White House says Mr. Bush is under no delusions about the tough task of ending the fighting.

And in a new videotape, al Qaeda's second in command says members of an Egyptian militant group have joined the terror network. The Egyptian group is suspected in a number of attacks back in the 1990s.

That's what's happening now in the news.

I'm Carol Lin.

Now back to THIS WEEK AT WAR.

KING: I'm John King filling in for John Roberts on THIS WEEK AT WAR.

Despite hundreds of air raids and the presence of thousands of ground troops, Israel has not been able to stop the rockets slamming into its cities.

Earlier this week, John visited the place where most rockets fall, a city in the bull's eye.

(BEGIN VIDEO TAPE)

JOHN ROBERTS, SENIOR NATIONAL CORRESPONDENT (voice-over): For the most part, Hezbollah held its fire Monday. Israeli officials say less than a handful of rockets landed in all of northern Israel, two of them in the town of Kiryat Shmona.

While the town still took the lion's share of the day's rockets, Mayor Haim Barbibay says it's a welcome relief.

MAYOR HAIM BARBIBAY, KIRYAT SHMONA: Only two rockets in this day? It's good for us because yesterday we get in Kiryat Shmona, 18 rockets. ROBERTS: Kiryat Shmona has been a favorite target of Hezbollah. No one has died here, but there is plenty of damage. In one neighborhood, two houses, nearly side by side, were hit on separate days.

BARBIBAY: It's two rockets in this...

ROBERTS (on camera): Two rockets...

BARBIBAY: ... one on Friday and one yesterday, Sunday.

ROBERTS (voice-over): This man was home when one of the rockets hit. He is uninjured, but tells the mayor the force of the blast blew him off the couch.

Every day of this conflict, town officials huddle in the municipal building's bunker, ready to respond to each new attack. Many are well past the point of exhaustion.

On a map of Kiryat Shmona, each missile hit is plotted out -- 130 since the conflict began. The rockets have terrorized the town, but the mayor is defiant. For every structure bombed, he vows, two will take its place.

(on camera): Every time a rocket destroys a building, you will build more to replace it?

BARBIBAY: Yes. OK. This idea, we don't afraid, not Hezbollah. Not Nasrallah. We are here.

ROBERTS (voice-over): Support for the military campaign is high in Kiryat Shmona. Residents have been living in the rockets' shadow for decades now and they are eager to have Hezbollah pushed back out of range.

Can there ever be peace here?

The mayor remains hopeful.

BARBIBAY: I hope maybe one day we can meet with Hezbollah, with Palestinians and the other people in this (UNINTELLIGIBLE) area.

ROBERTS: But unless and until that happens, the rockets will continue to fall. Such is life in the bull's eye.

John Roberts, CNN, Kiryat Shmona.

(END VIDEO TAPE)

KING: Up next, a controversial role is being played by Syria and Iran.

Are they the real forces behind Hezbollah?

Coming up on THIS WEEK AT WAR.

(COMMERCIAL BREAK)

KING: For rivals in ammunition to those now infamous Katusha rockets, there's no doubt Hezbollah is being supplied from outside Lebanon. Their primary backers are said to be Syria and Iran.

So what are these countries looking to gain and what might they lose through this involvement?

Joining me now to discuss how this conflict connects across the Middle East, our Beirut bureau chief, Brent Sadler; Aneesh Raman, our correspondent in Damascus, who joins us via broadband; and here in Washington, Joseph Cirincione from the Center for American Progress.

Let's listen first to what Aneesh reported Thursday on the Syrian-Iranian connection.

(BEGIN VIDEO TAPE)

ANEESH RAMAN, CNN CORRESPONDENT (voice-over): Since the start of the crisis, Syria has been downplaying its influence over Hezbollah, saying the resistance movement, as it's referred to here, does not take orders from Damascus. That is something disputed by Israel and the U.S. Both nations label Hezbollah a terrorist group.

As for Iran, the French are trying to engage them. Their foreign ministers met recently in Beirut. But with the Israeli offensive continuing, finding any room for compromise seems to be dwindling.

Iran's president, Mahmoud Ahmadinejad, in Malaysia Thursday, rallied support for an emergency cease-fire at an emergency meeting of Islamic countries. He also called for Israel to be eliminated.

And as tensions here rise further, Syria and Iran are growing even closer.

(END VIDEO TAPE)

KING: Brent Sadler, this is your neighborhood. Nobody has the experience you have in covering Lebanon, in covering Hezbollah.

What are Syria and Iran looking to gain and what might they lose from this?

BRENT SADLER, CNN CORRESPONDENT: Well, John, this has been an enduring trilateral arrangement between Iran, Syria and Hezbollah.

Hezbollah is the thorn, if you like, in the back of Israel. And it was put there specifically by the Iranians to have the effect of creating situations where Israel could be under pressure at times of crisis.

With Iran under pressure from the U.S. and the international community over nuclear arms, then Hezbollah has been brought into the equation as a result of what we have been seeing.

And although Hezbollah is coordinated between Syria and Iran, Hezbollah's leader, Hassan Nasrallah, has now got a much higher stature -- stature in the Arab world at large, and now has a more important role in that trilateral relationship.

KING: Well, Aneesh Raman, Israeli military sources tell us the Syrians have been put on high alert but are currently in defensive posture, and that the Israelis have been sending signals, saying we have no intention of spreading this conflict.

What is the sense in Damascus? Do they see a wider war coming? And what do they say when they are accused of supplying Hezbollah?

RAMAN: Well, essentially the Syrians, on the latter point, say they support it as a resistance movement. I have asked them point blank about the allegations that are made repeatedly that they're arming the group, with the help of Iran. They simply sidestep that issue. It's hard to get firm answers here in Damascus.

On the wider war, there's really no one here at the moment that feels Syria will, of its own accord, bring itself into this fight. It is, by virtue of what analysts and others in the world are saying, fighting this war by proxy, with Hezbollah in Southern Lebanon. The Syrians have been very defensive in their statements saying that if Israel attacks Syria, Syria will respond in kind.

Iran has said if Syria is attacked, it will see this as an attack on the broader Muslim world. But Syria is in a precarious position because while it is, at some levels, trying to downplay its relationship, at another level, its relationship with Hezbollah is really the main reason it should be at any table brokering peace.

The Europeans are stepping in, the Spanish with the Syrians, the French with the Iranians because of that connection.

So at one level they downplay it, at another level it's the reason that they want to be part of a deal, a broader deal, they hope, not one limited to Israel and Lebanon. They have disputed areas with Israel that they would like resolved and they say that if they are not at the table for a peace deal, the status quo will undoubtedly remain in the region.

KING: And yet, Joe Cirincione, despite what Aneesh says about Syria wanting to be part of some grand deal, some bigger bargain, if you will, the Israelis say even now, not just before this conflict were they supplying Hezbollah, but even now they're trying to send more missiles, more launchers across the border and that Iran is trying to supply them through Syria.

Why would Iran and Syria, if they want to be part of a grand bargain, if they want the volume to be turned down, why would they try to resupply during the conflict? And do you believe that?

JOSEPH CIRINCIONE, CENTER FOR AMERICAN PROGRESS: Well, there's no question that Iran and Syria are major backers of Hezbollah and that they see their futures linked with Hezbollah.

But don't think that Hezbollah is a mere puppet of these two countries. It is an indigenous organization deeply rooted in Lebanese society; arose from Lebanon, not -- they're not transplants from Syria or Iran. And, ironically, the Israeli invasion of Lebanon has backfired on Israel. Instead of splitting Lebanon from Hezbollah, it's united the whole country behind them.

Conservatives and liberals, Sunnis, Shias and Christians are now together, backing the resistance of Hezbollah. That's exactly why the U.S. strategy has now got to be now one of engaging Syria, as your reporter just said, engaging Iran, bringing them to the table and, even if indirectly, talking with Hamas, talking with Hezbollah, bringing all these forces down together to work out a solution.

KING: One of the surprises in this conflict, certainly from the Israeli civilian perspective, has been the ferociousness of Hezbollah's response to what was supposed to be David versus Goliath. And David is scoring some hits.

I want you to listen to the assessment of General John Abizaid, the top U.S. commander in the Middle East, testifying Thursday before the Senate.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: Hezbollah fields greater and longer-range weapons than most regional armed forces. If left unchecked, it is possible to imagine chemical, biological or even nuclear weapons being transferred to militias or terrorist organizations by a state actor.

(END VIDEO CLIP)

KING: Chemical, biological and nuclear weapons, Joe?

CIRINCIONE: I think that's going too far. There's no evidence of that whatsoever. Their rockets are serious enough. Their suicide bombs are serious enough. And it's their street fighting abilities, as much as their long-range rockets, that are giving the Israelis so much trouble.

They're -- they can't just go in and sweep a village clear. They're resorting to destroying the entire village in order to clear an area from Hezbollah guerrillas. That's how tough they are.

KING: Joe Cirincione here in Washington, Brent Sadler in Beirut, Aneesh Raman in Damascus.

Thank you all, gentlemen.

And coming up, rebuilding Iraq. We'll examine a Basra hospital where, despite good intentions, some U.S.-led reaction efforts aren't making the grade.

But first, senior national correspondent and THIS WEEK AT WAR anchor John Roberts is on special assignment in the Middle East. But he's been reporting on this conflict all week.

Here's a look inside his Reporters Notebook.

(BEGIN VIDEO TAPE)

ROBERTS: We're seeing a lot more artillery batteries these days. And we're seeing them much closer to the front, as well, all along the Israel-Lebanon border.

It's not just regular army units like this one behind me. There are far more reserves that have been brought up to join the fight, as well, firing those massive 155 millimeter Howitzers in support of Israeli ground forces just on the other side.

This is probably one of the most dangerous places on the Israeli side of the border right now. We're at an outpost, a tank bunker overlooking the town of Aetabujab (ph). So you can hear in the background, there is still artillery hits. We hear the artillery flying very close overhead.

This was the scene of a very fierce battle yesterday between the Israeli military and Hezbollah guerrillas.

This is just one of many areas in northern Israel where the Israeli Army is staging for what increasingly appears to be a major ground operation. And sources tell us that all the way along the border, from Metula almost all the way to the Mediterranean Sea, there are scenes similar to this, as tanks and armor are brought to the front line in preparation to going over the border into Southern Lebanon.

(END VIDEO TAPE)

(COMMERCIAL BREAK)

LIN: "CNN PRESENTS: INSIDE HEZBOLLAH," coming up at the top of the hour.

But first, we want to bring you up to speed as to what is happening right now in the news.

Al Qaeda's number two says members of an Egyptian militant group are joining his terror network. Ayman el-Zawahiri made that statement on Al Jazeera Television tonight.

And U.S. military reinforcements now on the streets of Baghdad. Iraqi police used loudspeakers to reassure residents that the American troops are there to protect them.

And the U.S. and France have come up with a draft resolution calling for a halt to the fighting between Israel and Hezbollah. The U.N. Security Council began discussions on that draft today.

That's what's happening right now in the news.

I'm Carol Lin.

Now to the rest of THIS WEEK AT WAR. KING: Time now for a progress report on rebuilding Iraq.

On Tuesday, the Office of Special Inspector General for Iraq Reconstruction released a report stating that after three years and some $15 billion, it's becoming clear that many projects may never be finished.

Joe Johns has the story of one troubled effort.

(BEGIN VIDEO TAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): The road to a huge construction project in Iraq is paved with good intentions. Or at least that's how the new Basra Children's Hospital got started. Take the first lady. Laura Bush was a big promoter. Or, Secretary of State Condoleezza Rice -- also on the bandwagon big time.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: This hospital will provide critical care to Iraqi children.

JOHNS: But now the project has been plagued with so many problems, it's now being held up as a prime example, not of what's right, but what's wrong with the U.S.-led reconstruction effort in Iraq.

SEN. PATRICK LEAHY (D), VERMONT: It's really a cockamamie idea. They need basic health throughout Iraq. So much has been destroyed, I mean just sort of the basic day-to-day health care. We ought to be spending the money on that.

JOHNS: A scathing new inspector general's report slams the U.S. Agency for International Development, which is in charge of the taxpayer money going into the project. The report says the project was supposed to cost $50 million. Now it could cost taxpayers more than double that. It's also way overdue. It's gotten so bad, the government says it told the main contractor on the job, Bechtel, to stop working and put the Army Corps of Engineers in charge.

Bechtel isn't exactly taking this lying down. Bechtel says once the hospital was supposed to have 200 beds. Then it was reduced to 50 beds. Then it was increased to 100 beds. You get the picture -- people kept changing their minds.

But supporters say the troubles are obscuring the fact that southern Iraq really needs the hospital. And that besides taxpayers, huge American companies and interest groups are kicking in millions, despite the obstacles. Hope International is leading the way.

(on camera): Americans might get the idea that this project is a mess right now.

Is it?

DR. JAMES PEAKE, HOPE INTERNATIONAL: I do not think it's a mess. I think it is behind schedule in terms of the originally predicted schedule, which I personally thought was aggressive. Well, this is not a little bit, this is a lot behind schedule. But it doesn't mean it can't be made up.

(END VIDEO TAPE)

KING: Our Joe Johns reporting.

And just ahead, U.S. soldiers are set to stand trial for alleged atrocities in Iraq. We'll have details, coming up.

(COMMERCIAL BREAK)

KING: Here now, a few of the stories we're looking at for next week.

On Tuesday, former soldier Steven Green is scheduled to be arraigned in Kentucky for the alleged rape and murder of an Iraqi girl and her family in the town of Mahmudiyah. Four other soldiers will face court martial in Baghdad next week for the same incident.

Also next week, the Democratic primary in connect may give an indication of domestic opposition to the war, as Senator Joe Lieberman, who supports the war, is in a tight race against an anti- war opponent.

And, finally, the 4th Iraqi Army Division will assume control of its territory from the U.S. 101st Airborne. This would mean that half of Iraq's divisions will have taken the security lead in their regions.

Now, read the proposals the diplomats are working on to stop the fighting and it all looks rather straightforward -- return kidnapped Israeli soldiers, release Hezbollah prisoners, deploy the Lebanese Army and international troops into areas now controlled by Hezbollah; get Israel to return disputed land to Lebanon.

So then why does it take so long?

Because if there is one constant lesson of the Middle East, nothing is straightforward.

Hezbollah is launching the rockets, but ask an Israeli who the enemy is and most will say Iran, which supports Hezbollah and whose president has talked of wiping Israel off the map.

And Hezbollah is being punished by Israeli air strikes and slowly pushed north by Israeli ground forces. Losses by military definition. Yet look at a TV in the Arab world and the demonstrations against Israel and the United States on the Arab street and in the war of public opinion, in the places it cares most about, Hezbollah is winning.

The diplomats can negotiate prisoner swaps, even land exchanges. But the lesson of another week at war is a constant lesson of the Middle East -- it is difficult, if not impossible, to negotiate an end to hatred and mistrust.

Thanks for joining us on THIS WEEK AT WAR. I'm John King in Washington filling in for John Roberts.

Straight ahead, a check of the headlines, then "CNN PRESENTS: INSIDE HEZBOLLAH."

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

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