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Lou Dobbs Tonight

As Many As 50,000 Israeli Troops Poised to Launch Biggest Offensive In War Against Hezbollah; Security Council Vote On U.N. Draft Resolution Being Debated; England Expands Investigation Into Recent Terror Suspects' Link With al Qaeda; Daniel Ayalon Interview; Border Patrol Agent Jose Compean Speaks Out

Aired August 11, 2006 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Thank you, Wolf. Tonight, Israel has ordered its troops to order a massive new offensive into southern Lebanon. We'll have live reports from Israel and Lebanon as we cover the offensive which could begin within hours.
And the United Nations at this hour is set to vote on a draft resolution that would end the conflict, a conflict on the verge of widening, and that vote at the United Nations could come at any time. We'll be going live to the United Nations for the report and Israel's ambassador to the United States joins us here.

We'll also report on Alberto Gonzales' decision to prosecute two border control agents instead of a Mexican drug smuggler, agents serving this country whose families has been devastated. Our special report here, tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate, and opinion for Friday, august 11th. Live, in New York, Lou Dobbs.

DOBBS: Good evening. As many as 50,000s Israeli troops tonight are poised to launch their biggest offensive so far in the war against Hezbollah. The Israeli Prime Minister Ehud Olmert, today ordered those troops to prepare to advance as far as the Litani River, 15 miles north of the Israeli Lebanese border.

But the prime minister also says he's prepared to accept a new United Nations peace deal. U.S. and European diplomats at the United Nations today agreed to a draft resolution that would end the month long conflict. The UN Security Council began a closed-door debate on the resolution this afternoon.

Matthew Chance tonight reports from northern Israel on the Israeli army's preparations to advance deep in southern Lebanon. Jim Clancy reports from Beirut, on Israel's expanding air offensive all across Lebanon, and Richard Roth reports from United Nations tonight on the accelerating efforts to reach a cease-fire. We begin with Matthew Chance -- Matthew.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Lou, thanks very much. And as diplomacy continues and perhaps reaches an end game in New York, Israel is flexing its military muscles, because it's said time and time again that if the diplomatic solutions that's being arranged by the international community does not meet with its satisfaction, it has a military option on the table and is very prepared to use it.

Over the course of the past several hours, we've seen a dramatic upswing in military activity on this, the Israeli Lebanese border with Israeli tanks crossing into Lebanese territory to join the 10,000 to 12,000 Israeli soldiers already on the ground there.

Other forces have been gathering around the Israeli Lebanese border on the Israeli side of that territory in preparation for the order to expand those military operations as far as the Litani River, but what we're seeing at the moment does not look like the dramatic, robust offensive that has been promised by the Israeli military as part of that expansion.

It seems that we're witnessing a degree of brinkmanship at the moment as the diplomatic process continues and nears its end, Israel again flexing its muscles, basically reminding the international community and Hezbollah and Lebanon of the military threat that it can bring to bear against southern Lebanon if it chooses to do so.

So, we're watching the military situation very closely. Again, thousands, tens of thousands, of Israeli troops poised to go into southern Lebanon to expand that invasion, but, really, the emphasis on the moment very much at the outcome of those diplomatic negotiations in New York. Lou?

DOBBS: And we of course are watching those negotiations very carefully here, and we'll be reporting the very latest developments as they occur. Matthew Chance reporting from northern Israel, thank you Matthew.

Israeli aircraft today bombed targets in Lebanon, more than 100 miles north of the Lebanese Israeli border. More than 12 Lebanese were killed today, some of them in an Israeli attack on a convoy of Lebanese troops and civilians. Jim Clancy reports from Beirut.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN CORRESPONDENT (voice-over): Beirut's southern suburbs reeled under an early-morning onslaught of Israeli bombs, the skyline smeared with the gray dust of one blast after another. Lebanese were left to hope that it was a final salvo before a cease- fire. Or wonder whether a new round of battles lies ahead.

"My life is destroyed, I've gone back 20 years," one man told us. "I have nothing except this T-shirt, my trousers, and this pack of cigarettes. My house and my office were in that building. You can see nothing's left."

North of the Lebanese capital an Israeli air strike broke the back of a bridge and cut a route that leads to Syria. At least 10 people were killed and more wounded. Cease-fire or not, Israel wants to strangle the flow of rockets and ammunition to Hezbollah fighters it believes are coming from Syria. It has warned that trucks, even pickup trucks, may be attacked. Marauding warplanes left vehicles burning in the roadways in the Bekaa Valley. Showing inventive determination, humanitarian groups went as far as they could, by any road they could, delivering aid. Syria's hospital syndicate handed over medicines at the border that were transferred to Lebanese vehicles. A UN resupply effort saw a convoy cutting through Israel to bring in supplies to stranded peacekeepers at a southern outpost.

But many areas of south Lebanon remain completely cut off. U.S. Cardinal Theodore McCarrick, representing Catholic Relief Services appealed for a cease-fire and peace.

CARDINAL THEODORE MCCARRICK, CATHOLIC RELIEF SERVICES: Obviously the people of Israel cannot continue to allow indiscriminate bombing and shelling, obviously. But on the other hand, obviously you can't destroy a nation. So, the only ones who can really stop this are the nations of the world, and the very special way my own nation, the United States, which has a responsibility here.

CLANCY: Lebanese television channels delivered minute-by-minute updates of progress on the cease-fire at the UN, while one channel showed the ill-fated convoy of Lebanese soldiers and civilian refugees after leaving the army base at Marjayoun that is now in Israeli hands. Hours later security sources say Israeli missiles hit the convoy, causing civilian and military casualties.

(END VIDEOTAPE)

CLANCY: Some of those missiles came from drones that were circling the convoy. There were hundreds of cars that joined it and had started, as we said, in Marjayoun there, the Israeli Defense Forces though tonight are denying they had authorized any convoys to move, but it would seem since they were in control of Marjayoun they were at least certainly very aware of it. UNIFIL is trying to stop any firing on the convoy.

The latest word we have, Lou, is four dead, 40 wounded. There were hundreds of civilians and hundreds of police and security officers with the Lebanese army and Lebanese police on board in that. We probably won't know the details of what happened up there in the Bekaa Valley for hours to come. The real question is whether this month-long war between Hezbollah and Israel is really coming to an end. Lou?

DOBBS: A question that we can hope will be answered in the next few hours here in New York. As the United Nations nears agreement on that draft resolution.

Jim Clancy, let me ask you this -- we have seen report after report, image after image of the devastation there in Beirut. Give us your best judgment, as to what percentage of the city is actually been hit by Israeli bombs and rockets.

CLANCY: Well, it's hard for me to judge all of that. We know that a couple of neighborhoods have been almost entirely destroyed. We know other neighborhoods have been hit. Moreover, you have hundreds of thousands of people here in Beirut that have probably been forced to flee. Some of them in only the last 24 hours after leaflets were dropped yesterday. Their situation is very serious. There an estimated one million people in the country that have been displaced. Most of those are coming from south Lebanon, as I understand it, south Lebanon has been devastated. Some villages along the border have been flattened in the fighting between Hezbollah and Israeli forces.

DOBBS: Jim Clancy, thank you very much, Jim Clancy reporting tonight live from Beirut.

The United Nations Security Council tonight is considering a draft resolution that would end the war between Israel and Hezbollah. At least cease hostilities. The draft resolution would authorize the deployment of as many as 15,000 more United Nations peacekeepers to southern Lebanon. An additional 15,000 Lebanese troops would also be deployed to the area.

The draft also calls for a full cessation of hostilities, not a cease-fire, and it demands the unconditional release of two captured Israeli soldiers, the capture of those soldiers by Hezbollah, of course, starting this conflict. It was the Hezbollah abduction that started the war some 31 days ago, now.

A Security Council vote on that draft resolution is being debated as we said. It could come at any time. Richard Roth now, reports from the United Nations -- Richard.

RICHARD ROTH, CNN SR. UNITED NATIONS CORRESPONDENT: Lou, many of the ministers who are here say, look, this resolution is not going to satisfy both Israel and Lebanon, but it's a big step forward toward a lasting cease-fire and solution to at least this Middle East conflict.

Secretary of state rice was here earlier meeting with United Nations Secretary-General Kofi Annan, it was Annan who earlier said it's time to have some action here, and end the discussions.

The Security Council is poised within the hour to adopt this resolution. John Bolton says he hopes the vote is unanimous.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMBASSADOR TO UN: We are hoping for a unanimously adopted resolution later today. We'll keep our fingers crossed, but, things are certainly moving in that direction. And I think this will be very important step for the council to take, as evidenced by the number of ministers who are here.

(END VIDEO CLIP)

ROTH: Secretary of State Rice told CNN she believes Lebanon and Israel are signing on and the French ambassador who worked closely with Ambassador Bolton also says the test will be up to them to accept this resolution and, quote, "implement it."

(BEGIN VIDEO CLIP)

JEAN-MARC DE LA SABLIERE, FRENCH AMBASSADOR TO UN: ... sponsor have any contact with the parties, and we very much hope that they will cooperate. We think they will cooperate. That may not be satisfied, you know, about -- totally satisfied about the resolution. Wonder (ph) is the resolution that this formula cannot satisfy entirely both parties. But we think -- we hope that they will cooperate.

(END VIDEO CLIP)

ROTH: Under the resolution, the compromise language, Lou, the UN force there, along with the Lebanese soldiers enough robust language that it appears to satisfy Israel so that Hezbollah will not challenge the force while it does its monitoring there, but there's a lot of time left before those troops get there and we'll have to see what happens on the ground. Lou?

DOBBS: The rhetoric of both President Bush and Secretary Rice in the early days of this conflict, that any cease-fire would be in -- sustainable, that any cease-fire would be lasting in its resolution of the fundamental conflicts in this -- this contest between Hezbollah and Israel and Lebanon. Syria and Iran. It certainly seems we're nowhere near approaching, even remotely, the rhetoric, at least, of the administration in the early days.

ROTH: And it took some time to get where we are, and the tough talk at the beginning. You could point to this resolution and say, look, it's not backed by the UN charter term, chapter seven, which is the utmost in peace enforcement. We could very well be back to where the problems existed earlier, with a UN force in a gray area, reluctant to move against Hezbollah, because this resolution certainly doesn't say they are supposed to. It's up to the Lebanese government, and Hezbollah has members in that government party.

There's a lot of different areas here, which will have to be monitored. I don't think this resolution is a done deal on the battlefield, so to speak, but it may be enough right now for the combatants to say, all right, we've had enough, and first step, Israel withdrawing, once the UN moves into certain areas. A phased-in approach, and they'll know pretty soon how it's working.

DOBBS: Richard Roth. Thank you. Richard Roth of course will be reporting to us as soon as any development occurs at the United Nations where those discussions are under way at this hour.

We'll be following all the latest developments in the Middle East and at the United Nations throughout this broadcast.

Also tonight, Britain has identified 19 of the 24 terror suspects in the plot to blow up trans-Atlantic aircraft. We'll have a live report for you from London. Also, is the Bush White House hiding the true state of our nation's finances? Is Congress aiding and abetting? One congressman says the federal government is keeping two sets of books. One of them isn't very good. We'll have that special report. And a Border Patrol agent facing up to 20 years in jail for shooting a Mexican drug smuggler tonight breaks his silence. The agent's life, that of his family, has been devastated. We'll have that exclusive report, and a great deal more, straight ahead here.

(COMMERCIAL BREAK)

DOBBS: Britain today identified 19 of the 24 suspected terrorists accused of plotting to blow up airliners over the Atlantic Ocean. Officials say at least two of those suspects met with an al Qaeda operative. The homeland security secretary Michael Chertoff today said, however, there is no evidence that the suspects were planning to launch any terrorist attacks in the United States.

Deborah Feyerich reports from London on the expanding investigation into the suspects' link with al Qaeda and Jeanne Meserve reports from Washington tonight on what federal, state, and local governments are doing to protect our airports and passengers.

We turn first to Deborah Feyerick -- Deborah.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Lou, we have news at this hour that British authorities have released one of the people arrested in yesterday's anti-terror operation. They will not say why or who it is that they've released. All they will say is that this is not unusual.

The other 22 suspects, however, they remain in custody, past the 24-hour deadline in which charges have to be filed. Authorities there asking for more time to conduct this investigation. Now, authorities are at a really critical point as far as gathering evidence.

They are combing through bank records of the 19, as you mentioned. There is evidence, according to U.S. sources, that at least one wire transfer did originate from Pakistan. But keep in mind, these are Brits of Pakistani descent, so it may not be all that unusual.

Now, authorities are also searching the hard drives of computers and laptops that were seized from some of these homes. They are doing a forensic analysis of this information. They want to know what Web sites they were visiting, what they were downloading and who they were talking to.

There is information at this hour, according to sources, at least two of the suspects did meet with an al Qaeda operative in Pakistan, a man who is known to be an explosive expert. But right now, British authorities are really keeping a lot of the information very close.

They do not want to jeopardize the prosecution or any future trial, so they're not releasing what kind of evidence they have. It is not clear whether they have found any bomb components in anything that they've seized from the homes that could be traces of explosives or wiring.

They did take a vacuum cleaner out from one of the homes, and they will likely analyze that to see whether, in fact, there's anything that supports this plot. Lou?

DOBBS: Deborah, thank you. Deborah Feyerick reporting tonight from London.

And Pakistan playing a prominent role in an Italian operation today. Police in Italy arrested 40 people in a nationwide crackdown against suspected radical Islamist terrorists in Italy. Officers and agents arrested suspect in Rome, Milan, Venice, Florence and other cities. The arrests are part of an international investigation into the financing of al Qaeda terrorists by Pakistanis living in Europe.

Tough new security measures remain in effect all across the United States tonight, but Homeland Security Secretary Michael Chertoff said his department may adjust some of those restrictions. He didn't give any details. Jeanne Meserve has the report for us tonight from Washington. Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Lou, we have a few details. TSA Administrator Kip Holly told CNN today the ban on liquids and gels in aircraft cabins will not be permanent, but, that travelers should not expect it to be relaxed for several weeks at least. Homeland Security Secretary Michael Chertoff, who got a firsthand look at aviation screening today, said travelers and the security system are adjusting. Lines at screening checkpoints are growing shorter.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Flying is safe. It is safe precisely because of the measures we're taking here and are being taken elsewhere in the world, and the commitment of people at TSA is to keep it safe.

(END VIDEO CLIP)

MESERVE: But critics point out, though, terrorists were exploring blowing up aircraft with liquid explosives more than 10 years ago, the government has still not developed or deployed a technology to detect them, and there are other vulnerabilities. Unscreened cargo, airport personnel without background checks, no system to ward off attacks with shoulder-fired missiles, a porous passenger screening regime, but Hawley argues there is a layered system of security, including air marshals, reinforced cockpit doors and technology that is effective.

(BEGIN VIDEO CLIP)

KIP HAWLEY, TSA ASSISTANT SECRETARY: No one can do -- to take every threat 100 percent, so what we do is we look at what are the different threats. We put the higher priority ones up at the top and apply resources there and then we move the resources around in unexpected ways. What we don't want is to allow a terrorist to engineer his process knowing exactly what we're going to do.

(END VIDEO CLIP) MESERVE: He agrees and his critics agree that good intelligence is part of the security mix and good intelligence is what thwarted the plot to blow airliners out of the sky. Lou back to you.

DOBBS: Jeanne, thank you very much. Jeanne Meserve reporting from Washington.

Tonight authorities believe they know the whereabouts of two more of those 11 missile Egyptian students, all 11 arrived two weeks ago on student visas, but they never reached their destination. The Montana State University. So far, six are in custody.

The FBI tells CNN that the missing students posed no threat. Separately, terrorism charges have been leveled against two Michigan men who purchased hundreds of untraceable cell phones. Authorities say they also had a confidential security guide for a major Arab airline. A hearing on their case is scheduled for next week.

Coming up next here, a U.S. congressman says the federal government has a separate set of books that hold the real truth about this nation's worsening fiscal crisis, as if it weren't bad enough with what we do know. The congressman says the government is hiding the books from all of us. We'll have them for you.

And Israeli troops are set to launch a major new offensive into Lebanon but a cease-fire agreement to end the conflict. It's being worked on at the United Nations at this hour. It could come any minute.

The Israeli ambassador to the United States joins us, and our exclusive interview with the Border Patrol agent that faces up to 20 years in prison for shooting a Mexican drug smuggler. Jose Compean is finally telling his story tonight.

Also "The Nation Magazine" attacking me on my position with illegal immigration. "The Nation" calls me a jingoist and they call me a lot of things. I'm going to call "The Nation" a lot of things tonight. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We'll be going to Beirut and Lebanon and back to the United Nations to find out precisely what's happening at this hour with those diplomatic efforts to reach a cease-fire between Hezbollah and Israel.

But, first, turning to the United States. The federal government keeps two sets of accounting records. One set holds the budget numbers the White House presents to all of us. Then there's the set quietly released by our Treasury Department. A set of books, the real books, that show quite a shockingly different version of this nation's financial reality. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The White House upbeat about this country's finances.

GEORGE W. BUSH, U.S. PRESIDENT: This year's deficit will actually come in at about $296 billion.

ROMANS: But Congressman Jim Cooper says America's books are far worse than that.

REP. JIM COOPER, (D) TN: The president is using old-fashioned accounting, accounting that would literally be illegal for any large enterprise in America.

ROMANS: e points to a different set of numbers. A financial report he says the White House doesn't want you to read. It's the official audited financial statement published by the Treasury Department, using accounting required of all big public companies in this country.

Cooper, a fiscally conservative Democrat, is so worried about the nation's true finances, he's having them published himself. The Treasury's financial report of the United States is devastating. A 2005 deficit of $760 billion. More than double the White House numbers. America's debts and commitments? An incredible $49 trillion. Using the treasury's audited books, those surpluses in the later Clinton years never happened. And this country looks headed for financial disaster.

COOPER: The hidden set of books reveals that we're borrowing fantastic sums of money from countries all over the world.

ROMANS: Why the two sets of books? The White House simply counts the money coming in and going out. But the Treasury includes future obligations, like federal pensions and healthcare costs. Add in the very real cost of Medicare and Social Security, and this government runs deficits of trillions of dollars.

The White House Budget Office and the Treasury Department would not respond on camera. But said no one is hiding this second set of books.

(END VIDEOTAPE)

ROMANS (on camera): No matter which accounting you believe, both of these sets of books are alarming. Either way, at this pace, before long, we'll spend more on interest for our debts than our basic domestic needs. Lou?

DOBBS: It's remarkable what people don't realize about this. And this broadcast is going to start using that other set of books, just to keep it very clean, and this will upset as well, not only the Bush administration, but the Clinton administration, because if you look at the real picture, we didn't have a budget surplus during the Clinton years, after all. Christine, thank you very much, Christine Romans.

That brings us to the subject of our poll tonight, do you believe our elected representatives, by using two sets of books, are trying to deceive the American public about the financial health of the United States, by not insisting that the White House use the correct set? Yes or no? Cast your vote at LouDobbs.com. Those results, coming up here later.

Next up, Israel appears ready to accept a cease-fire deal being brokered at the United Nations. We'll be going live to the United Nations.

I'll also be joined by the Israeli ambassador to the United States, as well as three of the nation's most distinguished political analysts.

Tonight we also continue our series of special reports on what is being called nothing less than a massive miscarriage of justice in Texas. Tonight, our exclusive interview with border patrol agent Jose Compean, he and his partner facing 20 years in prison for shooting a Mexican drug smuggler, the smuggler, a free man, given immunity to testify against the agents.

And I'll have a few words tonight about an article in "The Nation" magazine. It calls me hysterical, jingoistic and restrictionist. I can't wait to call them a few things. Stay with us for that as well.

(COMMERCIAL BREAK)

DOBBS: The United Nations tonight appears to be on the verge of reaching an agreement on a peace deal that would end the hostilities between Israel and Hezbollah. The United Nations Security Council is expected to vote tonight on a resolution that would authorize the deployment of another 15,000 U.N. troops into southern Lebanon. The resolution would also allow the deployment of 15,000 Lebanese troops to the area.

Israel's government today decided to launch a new and expanded offensive against Hezbollah in southern Lebanon. As many as 50,000 troops could be involved. But Israeli Prime Minister Ehud Olmert now says he's prepared to accept a new U.N. peace deal, if it is approved by the Security Council. Joining me now for more on the diplomatic efforts to reach that peace agreement, Richard Roth at the United Nations. Richard?

ROTH: Lou, thank you. The Security Council, well members are filing into the chamber now, poised for a vote, a key vote in this Middle East conflict. The latest in decades of Middle East conflicts throughout the U.N. history. Secretary of State Condoleezza Rice was asked about acceptance by Lebanon and Israel of this resolution, earlier in the day.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: We have heard from the government of Lebanon that they also believe that this is a resolution that can serve their interests. In fact, the interests of both the Israelis and the Lebanese now is to end the large-scale violence and to begin to lay a foundation for peace. And I believe that you will see both governments accept this.

(END VIDEO CLIP)

ROTH: Right now, on United Nations Television, we're watching John Bolton, the U.S. Ambassador on the left, he was talking there with the Israeli ambassador and the British ambassador. It's been a long, hard slog for the diplomats. We'll see if their work pays, comes clean on the battlefield, if it's really put into force, Lou. This vote could happen at any time. Perhaps in the next half hour or so.

DOBBS: OK, Richard. And, of course, we'll be going to you for that vote when it does occur. Richard Roth, reporting from the United Nations.

Joining me now from Washington, D.C., Daniel Ayalon, Israel's ambassador to the United States. Ambassador good to have you here.

DANIEL AYALON, ISRAELI AMBASSADOR TO THE U.S.: Thank you, Lou.

DOBBS: Your government approved the expansion of the advance against Hezbollah today and as Matthew Chance reported from northern Israel, along the border with Lebanon, Israeli tanks are moving into position, more forces are moving into southern Lebanon at this very hour. What is your best judgment about what your government will do? Accept the deal or not?

AYALON: Well, Lou, I do not want to preempt my government's decision, and, you know, the cabinet will convene on Sunday. But, also, it's premature to talk about the resolution, which I guess is momentarily going to take place, the vote in the U.N.

DOBBS: Right.

AYALON: But reading the language, as I see a few moments ago, I think it's a good resolution, and I believe my government will accept it because it is calling for changing the status quo ante, as we all wanted. Meaning that no longer the Hezbollah will be the de facto ruler of south Lebanon, and being armed to the teeth from Syria and Iran. If we can really implement the resolution, I think we are in a good start.

DOBBS: To implement that resolution, there is already a resolution, of course, ambassador, on disarming Hezbollah. We also heard the Israeli government say that it was going, at the outset, onset of these hostilities, destroy Hezbollah, to eliminate its threat, principally the rockets that have been fired, even some rather grossly optimistic numbers about how many had been destroyed.

None of that is going to be, at least in the current draft, part of this agreement. Hezbollah will remain armed. Rockets, munitions, all will remain with Hezbollah. Will not Israel remain under threat on the terms of this cessation of hostilities?

AYALON: Well, it's all in the details and really the implementation. The resolution, as it is now, and I hope nothing will change for the next few minutes until the vote comes in, really calls for the immediate and unconditional return of our hostages, the two kidnapped soldiers.

DOBBS: Right.

AYALON: Which is very important. This will constitute the end of hostilities. This, plus the end of the shelling by Hezbollah. So if this is the case, we will also stop in place, as we are. But, also the resolution calls for the de facto arms embargo, so no more shipments of armaments from Syria and Iran can enter Lebanon for the Hezbollah, and also a Lebanese army, plus enhanced force of UNIFIL, with an enhanced mandate, will control south Lebanon, will make sure that the Hezbollah will not, at the first stage, come back to the positions that we will throw them out from.

Then, most importantly, we'll start the disarmament of the Hezbollah. If all this will be in place, I think we'll be in a good position, and the really, it will effect a new era for Lebanon and for the entire Middle East.

DOBBS: Ambassador Ayalon, I am as eager as anyone to see this killing stop on both sides. At the same time, the idea that the military reality is that 10,000 to 12,000 Israeli troops with the air farce of the IDF striking its targets throughout Lebanon, but particularly southern Lebanon, unable to vanquish Hezbollah and to destroy a sufficient number of their rockets, why in the world should we expect a Lebanese army, that would not even resist the Israeli advance into Lebanon and permitted the rise of Hezbollah unchecked, would have any influence at all or a United Nations force of as many as, which is interesting wording, it doesn't set a number. Of as many as 15,000 troops would be any more effective than the 2,000 troops that have been there before?

AYALON: Lou, this is a very good question. And it, you know, remains to be seen. This certainly will be a test for the entire international community, which has not really made sure that its own resolutions would really take place and be implemented. Now, all of us, especially Israelis and Lebanese, but the entire international community, pay the price for not really making sure that the former resolutions, namely 1559 of two years ago ...

DOBBS: Right.

AYALON: ...was not implemented. So there is here another chance, if you will. But I can tell you, Lou, the fact that we did not take care of all the launchers in Lebanon is not because we didn't have the capacity. It's because we were very restrained. You see, there are no Hezbollah positions, per se, they are all embedding themselves inside heavily populated areas. We could have acted much differently, but it's not according to our morality.

So we are giving diplomacy a chance, for the Lebanese and the enhanced mandate of UNIFIL to do that, but if not we will have to do what we're doing right now. And it's not mutually exclusive that we are now advancing in Lebanon, because we are still operating understand article 51 of the U.N. charter, which is self-defense. We have been receiving 150 rockets today, including long range into Haifa, and this is what we're doing right now, until the resolution is accepted and until we see that the Lebanese are doing their part of the bargain.

DOBBS: Daniel Ayalon, Israel's ambassador to the United States, thanks for being here, ambassador.

AYALON: Thank you.

DOBBS: In the war in Iraq, two more of our soldiers have been killed today. Our soldiers were reported missing when their helicopter crashed in al Anbar province earlier in the week. Troops today recovered those soldiers' bodies. 2,598 of our troops have been killed in Iraq. On average, two of our troops are being killed in Iraq each and every day, 100 Iraqis each day.

Tonight, a piece of journalism by a political publication, "The Nation," requires some comment. I'm looking forward to doing just that.

Also tonight, an exclusive interview with a Texas border patrol agent. He and his partner face up to 20 years in prison after shooting a Mexican drug smuggler, who has been given immunity by the Justice Department.

We'll be live in El Paso with the story, as we investigate what's being called an outrageous miscarriage of justice.

And also three of the best political analysts in the country join me. We'll be talking about Iraq, the Middle East, and the state of Connecticut, and one Joe Lieberman, terrorism and the prospects for peace. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We've been reporting on what is being called a monumental miscarriage of justice this week against two Texas Border Patrol agents. The Border Patrol agents face as much as 20 years in prison for pursuing a Mexican drug smuggler who was freed and then granted full immunity from prosecution by the Justice Department in exchange for his testimony against the two Border Patrol agents.

Tonight, we talk exclusively with Border Patrol agent Jose Compean who is speaking out for the first time about this case, and fighting to clear his name.

Casey Wian has the report from El Paso, Texas.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Jose Compean has been a Border Patrol agent for five years. Before that, four years in the United States Navy. Now, he could spend the next 20 in federal prison for trying to do his job: apprehending an illegal alien drug smuggler.

JOSE COMPEAN, BORDER PATROL AGENT: This has been very disappointing. You know, you risk your life out there. Did it for five years and something like this happens, and it's over.

WIAN: Over, because even if his conviction is overturned on appeal, Compean believes his law enforcement career is finished. What's worse, he faces decades of separation from his two children, and his wife Claudia. She's expecting their third child shortly after Compean's sentencing date later this month.

CLAUDIA COMPEAN, WIFE OF BORDER AGENT: I'm angry. I'm sad. I'm appalled. I mean, just all the emotions, all at once. I can't believe this is happening. He's never been in trouble with the Navy, with Border Patrol. I mean, it's just ridiculous.

WIAN: Compean was one of several Border Patrol agents following an admitted drug smuggler along this stretch of border near Fabens, Texas. Compean says smugglers often avoid capture because of the Border Patrol's policy limiting pursuits.

J. COMPEAN: When there are drugs come in, there's a load coming through, they are not going to stop. Most of the time, they'll turn around and head back to the river, and they'll go as fast as they can just to get away. And right from there, all we do is just back off, because we know where they are going.

WIAN: After the smuggler ditched his van in this canal, he ran over a hill.

J. COMPEAN: I guess, unlucky for me, I was there waiting for him that day.

WIAN: The smuggler scuffled with the agent, then toward Mexico. Compean thought he had a gun, and fired, missing. Agent Ignacio Ramos was still in the canal and heard the shorts. He too thought the smuggler had a gun and also fired. The smuggler disappeared into the Rio Grande and reemerged on the Mexican side. Both agents thought he was uninjured.

Because of that, neither agent filed a report that shots were fired, one reasons both face long prison terms today. Several other Border Patrol agents on the scene also heard the gunshots and didn't report them. They received immunity from prosecution. So did the drug smuggler, who was it turns out, was shot in the buttocks.

Compean's attorney still struggles to understand the verdict.

MARIA RAMIREZ, ATTORNEY: I really believe that the evidence showed that Mr. Compean and Mr. Ramos were two Border Patrol agents doing their job who had the right to carry a firearm and had the right to protect the border and who had the right to detain this drug smuggler.

I can't believe that a jury would convict my client of that offense, of assault, assault with a weapon, a civil rights violation. And I can't imagine what went wrong at the trial.

WIAN: The Compeans have had to sell their house, move in with relatives and are about to have their car repossessed. Jose made about $70,000 a year as a Border Patrol agent, and now they are living on Claudia's $7 an hour job as a clerk, dreading the day Jose goes to prison.

C. COMPEAN: You know, the kids have school, so I'm thinking should I send them to school, should I not? I am going to come home, open that door without their dad, what am I going to say? The baby -- excuse me, the baby's due next month. I have to do that by myself. It's just overwhelming.

WIAN: What angers Compean most is a statement he says was made by prosecuting U.S. attorney Debra Kanof, implying his actions were a betrayal of his Mexican heritage.

J. COMPEAN: She mentioned that it's gotten so bad that it made us turn against one of our own.

C. COMPEAN: He turned against one of his own, but I'm sorry, that smuggler is not one of his own.

WIAN: The U.S. Attorney's Office continues to decline our interview requests because the case is pending.

(END VIDEOTAPE)

WIAN: Compean says he's received lots of support from individual Border Patrol agents, many of whom attending his trial, and his union has set up a legal defense fund for both agents -- Lou.

DOBBS: And that legal defense fund will be put together by Monday, and we just want to say to everyone who is interested in supporting the agents and their defense fund, their legal defense fund, that we will be putting that number up here, where those contributions to the defense fund can be sent.

Casey, if you would, stand by, because we have -- although U.S. attorney Johnny Sutton has not agreed yet, and he is proscribed from doing so by the conventions of the legal process not to join us here on this broadcast to discuss the case, he did release a statement. And here's what U.S. attorney Johnny Sutton did say tonight about the conviction of border agents Ramos and Compean, in part.

He said, "The defendants were prosecuted because they had fired their weapons at a man who had attempted to surrender by holding his open hands in the air, at which time Agent Compean attempted to hit the man with the butt of Compean's shotgun, causing the man to run in fear of what the agents would do to him next. Although both agents say that the man was not armed, the agents fired at least 15 rounds at him while he was running away from them, hitting him once."

Sutton goes on to say, quote, "Based on all of the evidence admitted at the two-week trial, including the lengthy testimony of both the defendants, the jury of 12 citizens heard all of the testimony, judged the demeanor and the credibility of the witnesses and unanimously found both defendants guilty beyond a reasonable doubt of 11 of the 12 counts alleged in the indictment, including assault with a dangerous weapon, assault with serious bodily injury, discharge of a firearm during the commission of a crime, of violence and willfully violating Aldrete-Davila's constitutional Fourth Amendment right to be free from illegal seizure, as well as obstructing justice by intentionally defacing the crime scene, lying about the incident, and failing to report the truth."

Casey, in the record that the suspect, the smuggler raised his hands, that was incontrovertibly demonstrated?

WIAN: It wasn't demonstrated as a fact, Lou. That's what the prosecution alleges. Of course, the agents, both of them, say something completely different. That's one of the big issues, that came to the front at the trial.

Obviously, the jury believed the testimony of the drug smuggler and those Border Patrol agents, who escaped as far as we know, any punishment for their actions that day. The question it doesn't answer, though, is why the prosecution went after these two agents ...

DOBBS: Right.

WIAN: ...with such fervor.

DOBBS: And let me -- let's look at one other thing that U.S. attorney Johnny Sutton said in his statement. "At the time of the shooting, neither Agent Compean nor Agent Ramos knew that the van driven by the Aldrete-Davila contained 743 pounds of marijuana. The evidence was incontroverted that, at the time the victim was shot, neither agent knew whether the driver was legally in the United States or whether a crime has been committed. The only information they had was that the driver had failed to pull over to be identified."

The last statement seems rather important, doesn't it?

WIAN: It seems rather important, and it completely contradicts what the agent and their attorneys and what the record reflects. The fact is that this pursuit began, according to the agents, after one of the Border Patrol sensors was tripped by this van, and it was in an area that is common for drug smugglers to use. And the drug smuggler was attempting to evade the agents who had their lights on. So they had all kinds of indications ...

DOBBS: Right.

WIAN: ...that this guy was a drug smuggler, and as it turned out, he was.

DOBBS: When you say the lights on, we're talking about the flashers that any motorist in the country knows, suggests that you pull over rather quickly.

Casey, thank you. This is a story that we're going to be following through the days and the weeks ahead. And you will be in El Paso for some time, as we try to get to the bottom of what is going on here and the U.S. Justice Department has an opportunity to make us all understand why two Border Patrolmen and not the drug smuggler are the victim in this case. Casey, thank you. Casey Wian reporting from El Paso, Texas.

As we mentioned, the National Border Patrol Council has set up a donation fund for Agents Ignacio Ramos and Jose Compean. You can send a check to the Border Patrol Agents Ramos and Compean Relief Fund, that's Post Office Box, 47208, Tampa, Florida, area code, 33646. Those checks should be made payable to the Border Patrol Agents Ramos and Compean Relief Fund.

This address is also now posted on our Web site LouDobbs.com. And we have also posted the U.S. attorney's statement, Johnny Sutton, that is also posted on our Web site, and we just want to make sure that you have that opportunity if you'd like to read that in detail as well.

By the way, we have continuously asked and invited assistant U.S. attorney Debra Kanof, the federal prosecutor in this case, to join us on this broadcast and we still await her response and we still, of course, keep that invitation open.

Tonight, a few words for an otherwise irrelevant publication called "The Nation," which accuses me in a mistake-riddled left-wing screed (ph) of being hysterical, jingoistic and an immigration restrictionist, even though I'm on record in favor of immigration, legal immigration, but that's not a distinction important to "The Nation" of course. Even by "The Nation's" sorry standards the article is pitiful. But "The Nation's" introductory editorial, entitled "The New Nativism" is worthy of note.

Not one time in that editorial does "The Nation" mention the words illegal immigration. Instead, illegal aliens are referred to as the Hispanic immigrants who have bypassed traditional urban destinations and illegal immigration is now something, in the estimation of "The Nation," which it calls the new immigration. But my favorite reference in all of this leftist clap-trap is a call for a discussion on important questions like, why is the middle-class shrinking? Whatever happened to upward mobility? Is there any end in site to stagnating wages, disappearing benefits, and corporate outsourcing?

The poor writers at "The Nation" are oblivious, absolutely oblivious that these are important issues to which we devote on this broadcast countless hours of reporting, and we've done so almost exclusively among our peers in broadcast news. "The Nation" also has the temerity at the end of the online article to ask a reader for the donation to "The Nation" although frankly I don't understand why anyone would.

You can pick up the same left-wing nonsense and rhetoric for free at your leisure from the World Socialist Web, the International Socialist Review, Workers World and the Socialist Alternative. All of which have used the same approach and the same rhetoric in their attacks on me. Only months earlier than "The Nation." "The Nation's" editorial and article are just a pathetic echo. We asked the editor "The Nation," Katrina Vandenjugle (ph) to join us here to discuss her views. She had to decline, unfortunately, because she's vacationing in the Hamptons.

Coming up at the top of the hour, here on CNN, "THE SITUATION ROOM" with Wolf Blitzer. Wolf?

BLITZER: Thanks very much, Lou.

We're in Jerusalem, following all the major developments happening tonight in the Middle East conflict. We're live at the United Nations, where the Security Council is preparing to vote on a draft U.N. Security Council resolution to end the fighting once and for all. The Security Council session expected to get under way in only moments.

Plus, my one-on-one interview with the Secretary of State, Condoleezza Rice. And here in Jerusalem, the prime minister already indicating his support for the resolution. So is the Lebanese government in Beirut. But what about Hezbollah?

And keeping you safe at the airport. With the latest alleged terror plot, we're going to show you one future technology that could stop terrorists, even terrorists with so-called liquid bombs, but how much are you willing to reveal to airport screeners in the name of safety?

All that, Lou, coming up right here in "THE SITUATION ROOM."

DOBBS: Thank you very much, Wolf. A reminder to vote on our poll. Do you believe our elected representatives, our federal government, by using two sets of books, are trying to deceive the American public about the financial health of the United States? Yes or no, cast your votes at LouDobbs.com. We'll have your results here in just a moment. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Joining me now former Reagan White House, political director, Republican strategist, Ed Rollins, Michael Goodwin, "New York Daily News" columnist, Democratic strategist, Robert Zimmerman. Let me start with you, Robert. The idea that we are about to see a cessation of hostilities. I'm told Condoleezza Rice is on the floor of the United Nations right now. Nothing's happening, but she's on the floor. So we can expect something, too. Is this a solution, by your judgment?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I am very, very skeptical. I admire the courage of the Israeli government, in terms of trying to cooperate for the cease-fire. But the end of the day, we have no confirmation that Hezbollah is going to be disarmed or how it's going to be implemented.

DOBBS: Ed?

ED ROLLINS, FMR. WHITE HOUSE POLITICAL DIR: No, I think, I mean, Syria's not involved in this discussion, and Iran is not involved and Hezbollah isn't. So, I mean, I'm glad they are making an attempt, but it's not going to work at this point in time. MICHAEL GOODWIN, NEW YORK DAILY NEWS: I think the odds are against it also, but I think right now both sides are tired and neither one can really claim great victory, so I think they are ready for a break and they'll try their luck with a cease-fire.

ZIMMERMAN: I think it's worth noting, if I may, that one of the real casualties of our war in Iraq has been the Middle East region and in particular the Democratic potential of the Lebanese government.

DOBBS: Let's turn to the war in Iraq itself. Joe Lieberman losing this week, despite the help of a lot of luminary Democrats. Turned out on his ear. Bad news for the Democratic party? Has it moved too far to the left? Is this presage anything or is it great news?

ZIMMERMAN: Actually, while I feel bad about Joe Lieberman's loss, the bottom line is that record turnout, and the number 28,000 new Democrats voting shows, it shows the Democratic party has great energy, and really, it's the basis that determine the midterm elections.

DOBBS: How many people voted there, Ed?

ROLLINS: Well, less than 400,000. At the end of the day Joe Lieberman is going to be a U.S. senator, and if Republicans are smart, they'll make every effort to make sure he votes with them a lot of times.

ZIMMERMAN: Lou, six years ago, when Al Gore introduced Joe Lieberman as his running mate to be vice president, he talked about their great values that they share, and six years later that same party dumps Joe Lieberman. I think what's happened is the Democratic party has moved so far to the left, there's no place for a guy like Joe Lieberman, who is a real centrist and we need more centrists.

DOBBS: Well we've got another centrist. His name is President Bush. His approval rating, according to the latest AP poll is now 33 percent. Michael?

GOODWIN: Not good. For the Republicans in midterm elections. I think it may be one of those parties where nobody wins.

ZIMMERMAN: Maybe it's another situation, Michael, where in fact, George Bush does not represent a centrist point of view. George Bush represents a fringe presidency and those that are going to stand with --

GOODWIN: I assume Lou was kidding.

DOBBS: You better believe I was.

ZIMMERMAN: And those who stand with George Bush, like the Republican congress, are also becoming a fringe institution.

ROLLINS: Well they are not going to stand with him. They are going to basically run their own campaigns. And the bottom line is if Democrats want to become the anti-war party, there's a lot of veterans groups and a lot of independents and a lot of hardcore Republicans are going to be supporting him.

ZIMMERMAN: We're not anti-war. We're about fighting terrorism intelligently.

DOBBS: In my position, I want to stake it out clearly, I think the conservatives and the liberals are both fringe groups and hold them in the same high regard. Gentlemen thank you very much, always. The results of our poll, 98 percent of you say our government should not be using two sets of books because they are trying to deceive us all.

That's our broadcast for tonight. We thank you for being with us. Please join us Monday. Have a great weekend. "THE SITUATION ROOM" begins now with Wolf Blitzer from Jerusalem.

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