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Crisis In The Middle East; Iran-Hezbollah Connection?; New Terror Front?; Homeland Security Waste

Aired August 15, 2006 - 07:00   ET

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

PAULA HANCOCKS, CNN CORRESPONDENT: Haven't been detonated at the moment. They're trying to clear land mines as well. And according to some Israeli media, they believe in the next 24, 48 hours it could be a chance for the Israeli troops to be moving out in bigger numbers as those Lebanese troops are taking their places.
Now the Israeli military is not being pinned down to a time. They're saying in the coming days. And they say for operational reasons they don't want to say exactly when they're moving out and giving up those posts to U.N. forces.

Now we also know that there have been skirmishes and clashes. Some Hezbollah fighters have been killed by Israeli troops. We understand overnight that four mortar shells landed in southern Lebanon. Now the Israeli military decided not to retaliate, but we are hearing from the foreign minister, Tzipi Livni, telling CNN that this means that this is a full violation of the cease-fire with Israel by Hezbollah.

Miles.

MILES O'BRIEN, CNN ANCHOR: Well, let's pick up that point. If that's a full violation, what's Israel going to do about it?

HANCOCKS: Well, at this point, the Israeli military are doing nothing, they say because it was not in Israel itself. It did not hit Israel. It was in Lebanese territory. But we are hearing from Tzipi Livni, the foreign minister, it's a violation of the Security Council resolution. It's not only the spirit, but it's the wording of the resolution that it is violating.

Now this is all she's saying at this point. Obviously she's on her way to see Kofi Annan. At this point, the political (INAUDIBLE) is not saying they're going to do anything about it. This was expected.

Many people on the ground expected these clashes, expected these skirmishes. Both sides saying they were going to act in self-defense. Israel said it reserved the right to defend itself. But, of course, Hezbollah has said that it is going to target Israeli soldiers if they are on Lebanese soil.

Miles.

O'BRIEN: Paula Hancocks in Jerusalem, thank you very much.

Carol.

CAROL COSTELLO, CNN ANCHOR: And while the Israeli military starts to leave, many Lebanese who fled the fighting in the south are trying to go back home now. Israel bombed many of the bridges across the Latani River. That's about 20 miles north of the Lebanese/Israeli border. CNN's Brent Sadler is traveling in that area. He describes a scene of devastation. He joins us now by phone.

Good morning.

BRENT SADLER, CNN CORRESPONDENT: Good morning, Carol.

It started as a stampede yesterday a few hours after the fighting stopped, and that stampede continues. The coast road from Beirut to south Lebanon packed again this morning, jammed with people. And it's the same in the eastern sector of the fighting area that are now silent.

I've just been watching some desperate scenes of cars having to thwart a river because all the bridges have been taken out in this part of the area of south Lebanon, around Tybay (ph). And I've seen vehicles stuck in the water, sinking in the river bed. Women using their shoes trying to bail out of vehicles as they sink lower below the water line. And also women carrying their children. Some of them almost waist deep in water to get from one side to the other side of the river so that they can then go to their area where their houses are.

And those houses that they're trying to get to in some parts, I can tell you, are very badly damaged. Widespread devastation. I've just driven along the border line, which is quiet. Very, very eerie.

I was watching Lebanese Red Cross rescue workers pull out bodies that had been left there for more than two weeks because this really was the heart of one of the killings, if you like, Carol. And some pretty awful scenes I can tell you.

Also, I'd like to add on what Paula Hancocks was just saying, the concern about getting troops in fast. I would say that the areas I've been, where I've seen no Israeli troops, one or two Hezbollah fighters moving around, but certainly there is a vacuum in part of that area right along the border where Hezbollah used to sit. I would certainly say there is a vacuum -- a bit of a vacuum now being developed. The sooner those international troops and Lebanese army can deploy, I think people will feel a lot safer in terms of being able to get to all the areas and hopefully stabilize work on this cessation of hostilities.

Carol.

COSTELLO: You know, Brent, we keep saying this is a fragile cease-fire. Is it really safe for people to start going back anyway because you never know what might happen?

SADLER: Well, you never know. But in terms of the larger towns and villages further back from the main border zone, although they sustained a lot of damage, people are going back. If their homes are destroyed, they simply go to an extended family member to get shelter and accommodation. Hassan Nasrallah, the Hezbollah chief, has said Hezbollah will pay for the destruction, will pay for any property that has to be rented in the meantime.

But it's the front line fighting which is absolutely shocking to see. Village upon village absolutely reduced to rubble. And it's these areas now that are just opening up. Some people are venturing along the border line, but not too many just yet. and they're going to find, I am sure, many, many more bodies under that rubble as these days unfold.

Carol.

COSTELLO: Brent Sadler reporting live for us this morning.

We say it's a fragile cease-fire because one key part of that cease-fire agreement, the disarmament of the Hezbollah militia, it could be a thorn of the side of Hezbollah's leader. Hassan Nasrallah says he's willing to discuss disarmament in private but says airing the discussions in the open would only help Israel. Plus, he's not so sure the Lebanese army can protect the country. Anthony Mills joins us live from Beirut for more on that.

Hello, Anthony.

ANTHONY MILLS, CNN CORRESPONDENT: Hi there, Carol.

That's right, Hezbollah leader Hassan Nasrallah in a televised speech yesterday said, as you say, that he's willing to discuss the disarmament of Hezbollah, albeit behind closed doors and not in public. But at the same time, he was saying that the Lebanese army and international troops couldn't protect Lebanon from Israel and that effectively he has been portraying the outcome of this conflict as a victory for Lebanon and therefore by implication a victory that only Hezbollah could have provided this country with. So although on the one hand there are conciliatory remarks coming from him regarding a disarmament, there is no indication at all that that disarmament is close on the horizon.

Carol.

COSTELLO: But does anybody really believe Hezbollah is going to disarm? I mean really?

MILLS: Well, Carol, that's a good question. Hezbollah spent years fighting for the liberation of the very territory that they are now supposed to be vacating south of the Litani River in south Lebanon. They're supposed to, under the perimeters of this U.N. resolution for the cessation of hostilities, they're supposed to be effectively handing over control of that whole area down there, a swathe of land in south Lebanon, to Lebanese army forces and also to international troops. And the question on the ground really is, that despite their nominal agreement with the Lebanese government's approval of that resolution, are they really going to let go of the land that they spent so many years fighting which they regard as their own, as part of Lebanon, and in which much of their power is based?

Carol.

COSTELLO: Anthony Mills reporting for us live from Beirut this morning. Thanks.

O'BRIEN: The fighting between Israel and Lebanon ratcheting up tension even more between the U.S. and Iran. The U.S. insisting Iran is a supporter, a benefactor of Hezbollah. Iran accusing the U.S. of being bias toward Israel. Aneesh Raman is the only network reporter in Iran right now.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: For every Hezbollah rocket fired on northern Israel, comes an allegation that it came from Iran. And now the head of the country's supreme national security council, in an exclusive interview with CNN, responds.

Is Iran at all arming Hezbollah?

ALI LARIJANI, SUPREME NATL. SECURITY COUNCIL SECY., (through translator): Hezbollah does not need Iranian weapons. You can find anything on the market. The type of weapons Hezbollah uses are not that hard to find. And, by the way, the Americans haven't admitted that they are supplying Israel with weapons.

RAMAN: It seems the Iranian strategy. For every question about their actions comes a response that challenges the United States. When asked about comments made by the U.S. ambassador to Iraq, Zalmay Khalilzad, that Iran is festering civil unrest there, Larijani said it was the opposite.

LARIJANI: Yes, they want civil war. This is not an analysis. We have information. The same ambassador you just mentioned had a meeting not long ago with terrorist groups inside Iraq. He asked for three things. One, to aim their guns away from the U.S. forces. Two, to aim their guns at the Iraqi Shias. And three, to aim their weapons at Iran.

RAMAN: A startling accusation, he says, came from Sunni insurgents. Interesting because Iran is a Shia nation. In Iran, there is no doubt this day that Hezbollah won the war. That Iran is now in a stronger regional position. And they feel the U.S. must respect that.

LARIJANI: I think the Americans are wise enough not to entangle themselves with Iran. They're still struggling in Iraq. What did they gain in Lebanon? Can anyone claim that Israel has won in Lebanon? Why should the U.S. act unwisely? We are prepared for all eventualities.

RAMAN: Including the August 31st deadline set by the United Nations for Iran to suspend its uranium enrichment. Larijani says there are no plans to do that. Leaving Iran on a collision course with the west. Aneesh Raman, CNN, Tehran.

(END VIDEOTAPE)

O'BRIEN: So how would the war between Hezbollah and Israel have played out if Iran had a nuclear weapon? It's a question getting a lot of attention at the White House right now. Kathleen Koch is there.

Kathleen, good morning.

KATHLEEN KOCH, CNN CORRESPONDENT: Good morning, Miles.

Yes, the president did discuss that yesterday. And also made an interesting characterization comparing the conflict in Lebanon between Hezbollah and Israel with the wars in Iraq and Afghanistan. And this was a characterization that's almost inevitable. The U.S. having always described Hezbollah as a terrorist organization.

Yesterday after spending the day huddled with his national security team at the Pentagon and also at the State Department, the president came out to say that they had discussed the three fronts in the global war on terror and he listed Lebanon, Iraq and Afghanistan. The president described the conflict in Lebanon as part of a broader struggle in the region between freedom and terror. And he had a warning for those hoping to influence young, fledgling democracies.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The message of this administration is clear. America will stay on the offense against al Qaeda. Iran must stop its support for terror. And the leaders of these armed groups must make a choice. If they want to participate in the political life of their countries, they must disarm. Elected leaders cannot have one foot in the camp of democracy and one foot in the camp of terror.

(END VIDEO CLIP)

KOCH: This administration is still facing criticism for not having gotten engaged sooner, done more sooner to help create the cease-fire. A cease-fire like the one that's now been in place for just over a day. And the president yesterday said that an early cease-fire would not have addressed the root of the problem. It would have made, he said, everyone feel better for a short period of time but then violence would have erupted again.

Miles.

O'BRIEN: Kathleen Koch at the White House. Thank you very much.

In Great Britain, the clock is ticking as investigators try to unravel that scheme to bomb airliners over the Atlantic. Investigators have until tomorrow to hold 22 suspects now in custody in the plot. A judge extend detention warrants for the suspects by a day. Investigators believe the suspects tested makeshift bombs in woods near where they lived. They say they're confident they will link them to the explosives.

Carol.

COSTELLO: Let's talk about something good, shall we. Let's head to Atlanta and check in with Chad.

(WEATHER REPORT)

COSTELLO: We have some news just in to CNN. We just got these pictures into our bureau. You've been hearing Brent Sadler talk about people crossing the Latani River from Syria back home into Lebanon, going back to their homes. They don't know what they can find. He talked about huge traffic backups. And you can see it there.

He said some people are actually walking through the water or trying to drive their cars through the river, in the shallow places of course, and getting stuck. But they're going back to who knows what. Many of their homes have been reduced to rubble. They don't know what they'll find there.

Brent Sadler also reported there are still bodies. Some of them have been lying there for two weeks. And the Lebanese Red Cross is just getting to those bodies right now.

He says those people who go home to find their homes destroyed will probably stay with neighbors, with friends, with family. Staying wherever they can find that safe. But they insist upon going home, even with this fragile cease-fire in place. We'll have more on this situation from Brent Sadler a little later on AMERICAN MORNING.

O'BRIEN: Dell is recalling more than four million notebook computer batteries because they can overheat and possibly catch fire. A Virginia man took these photos. Saying it happened to a Dell computer at his company last month. Henrick Gufstison (ph) says all of a sudden the laptop just started popping and cracking and then burst into flames. The batteries involved in this recall are Lithium batteries and they're found in Latitude, Inspiron, Precision and XPS mobile workstation notebooks. They were shipped between April 1, 2004, and July 18th, just a few weeks ago. So if you have a Dell, you might want to log on and see if that does apply to you.

Still to come on the program, the Department of Homeland Security wasting your money. And now the blame game is in full bloom. We'll tell you where the finger pointing is headed.

COSTELLO: And, later, all those tapes from al Qaeda's leaders. Did the latest one have a secret message for the suspects in the alleged jet liner plot? We're going to take a closer look at that. That's just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COSTELLO: Happening this morning.

We expect to hear from President Bush today at the National Counterterrorism Center. The president's expected to highlight the apparent success of U.S. anti-terror efforts in the foiled London airliner plot.

Violence in Iraq. In Mosul today, at least four people were killed, dozens of others wounded then a suicide bomber blew up a truck. It happened outside the political headquarters of the patriotic union of Kurdistan.

Former Israeli Prime Minister Ariel Sharon's health is getting worse. Sharon's been in a coma for more than seven months now after a massive stroke. Now doctors say his brain function is deteriorating and a chest scan shows a new infection in his lungs.

A Japanese tanker may have spilled more than 1.3 million gallons of oil in the Indian Ocean. It happened after hitting a cargo ship. Japan's Kyoto News Service says the spill could be the largest ever involving a Japanese tanker.

A magnitude 6.1 quake hit eastern Indonesia today. Official says there was no threat of a tsunami and no damages or injuries reported.

And the death toll from China's strongest typhoon in 50 years has risen to 295. Ninety-four people are still missing in eastern China.

O'BRIEN: A CNN "Security Watch" now.

The agency charged with making us safer after the 9/11 attacks not being very secure with your money. But could the waste, incompetence and fraud be the fault of Congress? CNN's Joe Johns with more.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT, (voice over): You would think America's security watchdogs would be better than just about anybody else at watching how your taxpayer dollars are spent. But you'd be wrong. And, in fact, this is not only about saving money, it's about saving lives.

DAVID HEYMAN, CENTER FOR STRATEGIC INTERNATIONAL STUDIES: If money is spent efficiently, effectively to the right priorities, we're safer. We're more secure. If it's spent with waste, fraud and abuse, we're helping the terrorists.

JOHNS: The Department of Homeland Security has been slammed again and again for failed financial controls. Now a new report prepared for Congress says DHS contracts worth more than $34 billion had significant waste or abuse or were poorly managed.

Hundreds of millions for radiation detectors that can't distinguish between weapons-grade nuclear material and cat litter. Boarder surveillance cameras that don't work in cold or hot weather. Spending on luxury hotels, long distance calls, even payments for elevator operators and a fancy hotel in Manhattan.

Plus, government credit card abuse. Charges for iPods. Training at golf and tennis resorts. The purchase of beer brewing equipment.

Then there are the costs that keep on costing. The government spent $1.3 billion on airport baggage screening machines that require the baggage to be taken from the conveyer belt to the machine and all the way back to the conveyer belt.

The report called this inefficient, but the Government Accountability Office estimates it will cost an additional $3 billion to $5 billion to upgrade to more efficient machines. We asked the Department of Homeland Security for an interview. No one got back to us. But only a few weeks ago, a DHS officer told the House Government Reform Committee the department doesn't have enough staff people to actually follow how contractors are spending the money.

ELAINE DUKE, DHS CHIEF PROCUREMENT OFFICER: We need more. We have an increase coming in in the current '07 budget of about 200 additional and we are working towards needing even more over time.

JOHNS: But it's not just DHS. Analysts say Congress itself is the root of the problem.

VERONIQUE DE RUGY, AMERICAN ENTERPRISE INSTITUTE: Right now Congress is all worked up about absolutely everything and want a lot of money to go everywhere. And there's very little thinking across the board about which are the important threat we should be think about.

JOHNS: De Rugy and others say the major problem is that the money isn't being spent according to which areas are subject to the greatest danger. And experts say it could be years before DHS heals itself.

(END VIDEOTAPE)

O'BRIEN: That was Joe Johns reporting from Washington. Be sure to stay with CNN day and night for the most reliable news about your security.

Coming up on the program, we'll hear from the family of one of the suspects in that transatlantic airline bomb plot. They say the charges are bologna and really more about anti-Muslim sentiment. We'll explain.

Plus, the threat posed by liquid explosives. New technology could save lives, so why isn't it being used? That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: So here's the choice. If you don't like to check your bags, I guess you can go with bad breath? Right? Is that the deal, Jennifer Westhoven? Right? Leave the toothpaste behind. Basically people are checking more bags. And they do this with some trepidation, right?

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Right, because everyone's starting to check their bags now. One newspaper report says there's 10 to 40 percent more bags suddenly being checked. Now, first of all, that's putting a tax on the system.

O'BRIEN: Which is already broken, some would suggest.

WESTHOVEN: Well, yes, because baggage handling isn't a place where you can let the machines do the work. You've got to have people out there, you know, humping those bags. It's a lot of work to do it. It's very labor intensive. Something we know the airlines have been trying to cut their costs. That's an area they've been trying to get rid of people essentially. So this is an area where we can probably expect to see the number of bags that are mishandled spike up recently. Now if you're someone, I know I am . . .

O'BRIEN: You're someone. You are someone.

WESTHOVEN: I am not going without my lotions and potions.

O'BRIEN: Right, so you're checking a bag.

WESTHOVEN: I'm a girl. I've got a lot of stuff.

O'BRIEN: Which means it's, you know, it's a crap shoot. It may or may not be there.

COSTELLO: So you'd actually check your bag because of that. You wouldn't buy sample sizes from some drug store at your destination?

WESTHOVEN: Well, that's what's coming up now is that a lot of the hotels are starting to offer those sample sizes. And let me ask you, Carol, do you think they're going to sell those to you at wholesale price? No, I don't think so. It's going to be the new bottled water for $4 right?

O'BRIEN: I should say. I should say.

COSTELLO: Yes.

O'BRIEN: So some hotels, higher end hotels, they already have a lot of those things but they're just going to redouble their efforts to have stuff for you.

WESTHOVEN: Well, in "The Journal," Omni (ph) said they sent their people out. They ran out. They bought Keels (ph) lotions. They bought really high-end stuff. They want to be able to charge a lot.

COSTELLO: Oh. So for a little, tiny bottle, you pay about $10.

O'BRIEN: Well, do us a favor, get deodorant and toothpaste, because we've all got to travel with these people, right?

WESTHOVEN: Well now Avis is giving out toothpaste, too. It's not just the high-end hotels because a lot of people realize suddenly people are coming and they had to give up their stuff. They didn't think about it. They didn't know what to pack. Now I will say, if you are someone who can get by without this stuff, apparently once you get your carry-on onto the airplane, there is loads of space to put it in.

O'BRIEN: Well, there you have it.

All right. What else you got?

WESTHOVEN: The other thing we were looking at is later on we're going to talk about Google. So if you look very closely at the Google homepage, if you're someone like that . . .

O'BRIEN: Yes, I do that. I do that, yes.

WESTHOVEN: Have you noticed Frugle?

COSTELLO: It's not there any more.

O'BRIEN: Frugle wasn't so great.

WESTHOVEN: No and they ditched it. We're going to talk a little bit about that.

O'BRIEN: Yes. All right. Thank you, Jennifer. See you in a bit.

COSTELLO: Thank you, Jennifer.

Top stories are straight ahead, including a closer look at the most recent al Qaeda tape. Was it a call to arms for suspects in that alleged jetliner plot?

Plus, some Katrina evacuees are doing better than others these days, and it may depend on how they got out of harm's way. We'll explain on this AMERICAN MORNING.

(COMMERCIAL BREAK)

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