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Deadline Comes and Goes for Iran; Bush Condemns Iran's 'Defiance and Delay'; Extradition Hearing Held for Polygamist Sect Leader

Aired August 31, 2006 - 12:00   ET

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


JONATHAN MANN, CNN INTERNATIONAL ANCHOR: Standing firm. Iran says it won't be pushed by the weight of the world, rebuffing the U.N. deadline on nuclear demands.
COLLEEN MCEDWARDS, CNN INTERNATIONAL ANCHOR: Deciding what happens now. U.N. diplomats review their options after weeks of warnings fall on deaf ears.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The only way to eliminate the risk of nuclear war and to reduce nuclear dangers is to have a consistent policy that applies to all countries.

(END VIDEO CLIP)

MANN: Bending the rules? Why critics say Washington's nuclear policy for India is riddled with a double standard.

Hello and welcome to our report broadcast around the world.

I'm Jonathan Mann.

MCEDWARDS: And I'm Colleen McEdwards.

From Tehran to Washington, to Mumbai, wherever you're watching, this is YOUR WORLD TODAY.

Well, now that the deadline has come and gone for Iran to freeze its sensitive nuclear work, it is very much decision time for the United Nations.

MANN: Welcome to a special edition of YOUR WORLD TODAY as we study a U.N. report just released on Iran's defiance of international demands.

MCEDWARDS: We'll also get reaction from capitals around the world. We're going to see whether sanctions could be on the horizon and, if they are, how this might all come about.

Well, Senior International Correspondent Matthew Chance is one of the first reporters to actually get his hands on a copy of this report. So let's go to him now in the Russian capital.

Matthew, what are you seeing here? MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Well, it's sources closest to the IAEA that have actually made this report available to me. I've got a copy of it right here, as you can see.

It makes a number of points. It's a very dense technical document, as these things often are. But let me run through some of the main points that it makes.

The first point that will be considered by the United Nations Security Council, as well as the countries on that council to decide how to move forward with Iran, will be this point, that there has been, according to the IAEA, no suspension of uranium enrichment. The IAEA also says that as a counter to that, at the same time, there's been no improvement in quality, or no change in quality or quantity, the amount of uranium that's been enriched as well. The report says that Iran is still using its -- its cascade of 164 centrifuges and hasn't moved beyond that technical level.

The second point this report makes is there has been no progress in any of the unresolved questions as to the nature of Iran's very controversial nuclear program. There have been questions that have been asked by the international community over the years regarding what research and development, for instance, has been done on the P1 and the P2 centrifuges, very technical items that are used to spin uranium gas into highly enriched uranium.

The questions that the international community had and the IAEA had about those items have not been fully answered, according to the report. They haven't fully answered either what the origin of certain long-known traces of uranium on those centrifuges, what those origins were.

But there's a the third and final point as well which the report makes which is more concerning. And that is that, according to the IAEA, there are now additional questions regarding the presence of some new traces of highly enriched uranium on some containers that were located by the IAEA in a waste storage facility in Iran, traces that, according to the report, have not been explained at all as yet by the Islamic republic -- Colleen.

MCEDWARDS: It's interesting. I wonder, Matthew, if this is going to give more momentum to those who are pushing for sanctions here, or maybe more momentum for those who want more talks, given all these unanswered questions.

CHANCE: Well, it certainly put Russia in a very difficult position, because Moscow is, as you know, is one of the main backers, if not the main international backer of Iran's nuclear program. It's building the country's first nuclear reactor at Bushehr. It has agreements to build a network of those nuclear reactors across the Islamic republic.

So it has these very sensitive and lucrative economic ties with Iran, but at the same time it's thrown its diplomatic weight behind these calls of its European and American allies for Iran to stop its uranium enrichment activities. That has not happened. And so it's really sparked a debate in Russia as to which direction they should go.

Should they continue to support Iran in its enrichment of uranium, or should they side more fully with the United States and with the Europeans in calling for tougher action? It's a very difficult position that's going to be very interesting to watch as the Russians formulate their response -- Colleen.

MCEDWARDS: It may be time for them to decide as well.

Matthew Chance, in Moscow, thanks very much -- John.

MANN: Others in the dispute, though, are digging in their heels right now. We want to bring you the latest from both sides of the standoff, with the view from Iran and the United States.

Ed Henry is traveling with U.S. President Bush, who is in Salt Lake City, Utah, at this hour.

But first, we head to Aneesh Raman, who is in Tehran.

Aneesh, the report says there's been no compliance. There are new questions Iran seems to be in even bigger trouble right now. What are they saying around you?

ANEESH RAMAN, CNN CORRESPONDENT: Well, Iranian officials have dealt with a lot of these unanswered questions before. We had a previous report by the IAEA. Today, though, they defied the U.N., they stood firm, and they did not stop their nuclear program.

(BEGIN VIDEOTAPE)

RAMAN (voice over): Defiant to the end, Iran's president, speaking this morning to huge crowds in northwest Iran, left no doubt his country will not suspend its nuclear program.

"This nation," he said, "will not tolerate tyranny and will not give in to a cruel pressure and violation of its rights, even a bit."

People in this agriculture region are some of Ahmadinejad's strongest supporters, cheering every phrase. Here, for some, he is a hero. And they reveled in their president's continued challenge to debate U.S. President Bush.

"They say they want the public to know all of the news and facts," he says, "and decide for themselves. But when we offered to debate the world's problems and corruption and let the world judge for themselves, they rejected."

But it is Iran's rejection of the U.N. deadline to stop its nuclear program that matters today. And in Tehran, as shops open for business despite fears of businesses go down of sanctions, here as well there was defiance.

"We have undergone sanctions for 27 years," says Hussein. "We are not afraid of sanctions. Iranians can live off of bite of bread and live in cramped dwellings." There are many here who do fear sanctions outright. And while today's deadline was big news in Iran, Iranians have known this day was coming, have known they can do little to affect their government's choices. They can only now hope against the worst.

"IF a military invasion against Iran is a possibility," says Barham (ph), "it's to the Iranians' benefit to resolve the problem peacefully."

A military invasion is not seen as something that will come any time soon. But Iran's government has made it clear through war games that have been ongoing for weeks now that it will defend against any attack.

(END VIDEOTAPE)

RAMAN: And Jonathan, when we speak of unanswered questions giving fodder perhaps for sanctions, Iranian officials will say that's the reason for more talks, for more dialogue, to keep inspectors here, keep sanctions at bay -- Jonathan.

MANN: Aneesh Raman in Tehran.

Thanks very much.

President Bush has spoken out as well about what the Iranians are up to.

Ed Henry joins us now from Salt Lake with more on that -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Jonathan, the president is here. He just delivered a speech to the American Legion convention. And the whole purpose of this speech was to put the global war on terror into a broader context, trying to connect the situation in Iran to Iraq, Lebanon, Afghanistan. The president saying all of these conflicts are connected in what he called the decisive ideological struggle of the 21st century.

On Iran, the U.S. is already starting to craft tough sanctions against Tehran, but it's still unclear if the U.S., of course, can get Russia and China on board for those sanctions. Nevertheless, in advance of all of that work, the president had some tough talk for Iran.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today is the deadline for Iran's leaders to reply to the reasonable proposal the international community has made. If Iran's leaders accept this offer and abandon their nuclear weapons ambitions, they can set their country on a better course. Yet, so far, the Iranian regime has responded with further defiance and delay.

It is time for Iran to make a choice.

We made our choice. We will continue to work closely with our allies to find a diplomatic solution, but there must be consequences for Iran's defiance, and we must not allow Iran to develop a nuclear weapon.

(END VIDEO CLIP)

HENRY: A sharp focus, though, in this speech on Iraq instead of Iran. The president once again calling it the central front in the war on terror and almost pleading with his critics, saying that while not everyone agreed on whether or not to go into Baghdad, it's now time to unite and finish the mission.

The president once again saying the U.S. will not leave Iraq until the victory is achieved. The bottom line is he's feeling pressure here in the United States, not just from Democrats, but now some fellow Republicans, about withdrawing U.S. troops from Iraq -- Jonathan.

MANN: Ed, as you mentioned, the president mentioned Lebanon, Iraq and Iran almost in the same breath. Of course, the Syrians were pushed out of Lebanon. The Taliban was pushed out of Afghanistan, which the president mentioned. Saddam Hussein was pushed out of Iraq.

Is it all just diplomacy that the president is contemplating at this point? It sounds very ominous, some of his language.

HENRY: Well, in terms of Iran, diplomacy is really all the administration can talk about right now. They've been burned in part because of the mission in Iraq, the international feeling that they did not give diplomacy enough of a chance.

When word leaked out a few months ago that the Bush administration was considering potential nuclear strikes against Iran, the administration retreated, said they were not really doing that, and were almost -- they are almost basically were -- without completely taking the option off the table, shifted the focus really hard to diplomacy.

So they have really gone down this path with Tehran. It's going to be a long, arduous process, but they've got to finish that because they're committed now to really trying to see it out -- Jonathan.

MANN: OK. Ed Henry in Salt Lake.

Thanks very much -- Colleen.

MCEDWARDS: Well, the U.S. may be pushing tough action against Iran, but what's likely to happen next? Let's take a look at that.

As Secretary-General Kofi Annan himself says, don't expect the U.N. Security Council to act tomorrow. For now there will be, you guessed it, more talks. The U.N. resolution has no specific wording on how any sanctions would be imposed, and it simply calls for more discussion on that matter.

There could be gradual and targeted sanctions, though. Serious talk on this could come at the U.N. general assembly meeting in September. U.S. President Bush will be among the leaders who are present then.

Well, Beijing and Moscow have certainly expressed their opposition to sanctions. And they could block any effort to impose Iran.

Let's get more now on China's position here. Jaime FlorCruz is standing by in Beijing for us.

Jaime, what's -- what are China's major objections here?

JAIME FLORCRUZ, CNN BEIJING BUREAU CHIEF: Well, China, for sure, like the United States and its European allies, opposed the idea of a nuclear power, of, like, Iran turning into a nuclear power. China does not want to see that, because that would disrupt the regional balance. It could also trigger nuclear -- nuclear proliferation. So China opposes that.

However, China also opposes imposing sanctions on Iran, because, you know, Iran is China's very important ally, strategic ally, as well as economic ally. Put simply, China relies on Iran for something like 15 percent of its crude oil supplies. And as China's economy continues to boom, China will need to secure more oil and energy resources, especially from Iran -- Colleen.

MCEDWARDS: Understood. Jaime FlorCruz in Beijing.

Thanks very much -- John.

MANN: As the U.N. Security Council hashes out what to do about Iran...

DARYN KAGAN, CNN ANCHOR: And we're going to break in here because we want to go to Las Vegas.

This is Warren Jeffs, the man who is accused of being the leader of this sect in Utah and Arizona. This is an extradition hearing taking place in Las Vegas.

Let's listen in.

UNIDENTIFIED MALE: Warren Jeffs, you're being held as a fugitive. And there are two fugitive holds for you, one from Utah and one from Arizona.

I'm going to explain to you very quickly what your rights are in regards to being a fugitive from justice, then you tell me what you want to do.

You have the right to demand that a formal warrant of extradition be issued and served upon you, as called a governor's warrant. You have the right to apply for a review of the legality of your arrest and confinement. That is referred in legal terminology to a writ of habeas corpus.

You probably have to have an attorney do that for you. And you would have to hire that attorney because you don't get court-appointed counsel on a fugitive case. The process of obtaining a governor's warrant takes approximately 90 days, plus whatever extra time you're in custody.

You're going to be held without bail during this fugitive process. You can shorten that 90-day-plus time by waiving extradition rights, the rights that I've just explained to you.

If you waive those rights, the state of Arizona and Utah would have a maximum of 30 days to come get you. I don't think it's going to take them that long.

Also, I think between the states of Arizona and Utah, you have -- they have worked out an arrangement so that if you waive extradition, you're going to be going to Utah first. So you should be aware of that.

Now, do you understand everything I just explained?

WARREN JEFFS, POLYGAMIST SECT LEADER: Yes.

UNIDENTIFIED MALE: OK. What would you like to do?

JEFFS: Be extradited.

UNIDENTIFIED MALE: You want to waive your rights in regards to extradition and go back as quickly as they can have -- as they can come pick you up?

JEFFS: Yes.

UNIDENTIFIED MALE: All right.

I need to -- I need to have some paperwork here.

Actually, it looks like you've already signed both waivers. Is that correct?

All right. I'm going to sign the order indicating that extradition rights have been waived.

In addition, I need to also inform you that the district attorney's office is here today from St. George, Utah, and they have some information that the bailiff is going to serve you.

This is not the governor's warrant. This is just some local charges in St. George that's pending. You need to be apprised.

There's the warrant. And it's also a no bail. And it's a request for a hearing on a no-bail warrant in St. George.

So, as soon as you get extradited to Utah, they will set the hearing date. And we'll put on the record that you've been served with that warrant.

All right?

JEFFS: All right.

UNIDENTIFIED MALE: All right. That will conclude these proceedings.

Thank you very much.

KAGAN: Well, that was very quick. Warren Jeffs, the man who spent nearly four months on the FBI's 10 most wanted list, with just a few minutes in front of the judge in Las Vegas, Judge James Bixler (ph). Waives his right to be extradited, so he very quickly will be headed to Utah, one of two states very interested in seeing him and processing charges against him.

Our Peter Viles is in Las Vegas with more on this particular hearing -- Peter.

PETER VILES, CNN CORRESPONDENT: Well, Daryn, a very quick hearing, as you said. And Warren Jeffs appearing in court as the FBI described him, a tall man, very slender. I think the FBI says he's 6'3 and 150 pounds.

Very slender man in shackles. Very heavy security there in the courtroom. Ted Rowlands, who's in the courtroom for CNN, says that there were law enforcement officers with automatic rifles in that courtroom.

But he waived extradition, which means he will go to the state of Utah, according to the judge. The charges he faced there have to do with the sexual abuse or rape of children.

He is not accused of raping the children. He is accused of forcing girls into marriages with older men. The charge in Utah is an accomplice of rape, but it comes with a penalty of five years to life in prison.

The reason he'll go to Utah first, he faces similar charges in Arizona but the penalties in Arizona are not as severe, so the prosecutors hashed this out yesterday and came to an agreement that he'd go to Utah first.

But very soft-spoken. I couldn't really hear him speak, but I know Ted Rowlands is in the courtroom and did hear him speak and that he waived his right to extradition, acknowledged that he is, in fact, Warren Jeffs, ending what has been a really long manhunt, Daryn. He was one of the FBI's top 10 most wanted fugitives in America until this week.

KAGAN: Peter Viles in Las Vegas.

Thank you.

Let's go to our senior legal analyst, Jeffrey Toobin, standing by.

Jeffrey, hardly the man that you would exactly expect to be on the FBI's 10 most wanted list. JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: That's true. And it's funny, we've covered two extradition hearings in the past week, with John Karr and now Warren Jeffs. And the only issue that ever is relevant in an extradition hearing is, are you the person that they're looking for?

It's not a question of guilt, it's not a question of the strength of the evidence. The only issue in an extradition hearing is, are you the Warren Jeffs that is charged in Arizona and Utah? And most people do waive extradition hearings, because they acknowledge that they are that person. There's no real way to dispute that.

So the only issue that ever comes up, really, is bail. And someone who has been a fugitive is certainly not going to be released on bail.

So it was pretty much a pro forma hearing.

KAGAN: That, but let's talk about what happens now. So, first, to Utah, where he faces two counts of rape as an accomplice there. That carries a penalty upon conviction of five years to life in prison

TOOBIN: Very serious charges. A man widely considered very dangerous. And he's going to have to get an appointed lawyer, presumably, if he has no assets, and there will be a trial.

And it could be a very difficult, dramatic trial, could include the testimony of children. But they've got him now, and he's no longer a fugitive. And he's not getting out on bail. So there will be at least one trial soon and probably several more.

KAGAN: You know, the bigger story here, when you look at the amount of security used for him, what's going on, there was great concern within the Justice Department that this was not going to end in a quiet traffic stop as it did, but that it was going to end in a Waco-style ambush.

TOOBIN: Well, what is unusual about a fugitive like Jeff is that he had a great deal of support in his community. Gary Tuchman, our colleague, did a remarkable story about the town where he lived, where it was obvious there was tremendous support for him, still. And these are folks who, by and large, operate outside the laws of our society, who are really very much in their own community.

And federal law enforcement officials understandably were concerned that there could be some sort of confrontation not just with Jeffs, but with his supporters. Fortunately, that wasn't the case, but it's understandable why they took such precautions.

KAGAN: And give us an idea of how things work behind the scenes on a case like this, Jeff, where you have two states who would really like to get their hands on him. I know Terry Goddard, the attorney general of Arizona, the former mayor of Phoenix, would have loved to have the first chance.

TOOBIN: Well, you know, Daryn, law enforcement is very tough on criminals, but they are probably tougher on each other in turf battles. You know, those are very hard-fought battles, and sometimes it's just a matter of ego. But usually the factors that determine who goes first are, who has the stronger evidence, who has the tougher penalties, where is a conviction more likely?

Those are the issues that are the high-minded levels of the disputes. But sometimes it's just a low-down dirty political battle. This one seems to be solved -- have been solved without much controversy, but that's not always how it works out.

KAGAN: Utah gets the first chance.

Jeff, thank you.

TOOBIN: OK, Daryn.

KAGAN: Jeffery Toobin, our senior legal analyst.

So let's talk about what happens to the church now that Warren Jeffs was leading up. A member of Jeffs' church now looking to follow a new leader. This member spoke with our Gary Tuchman.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): This Colorado City woman is a member of Warren Jeffs' FLDS church.

(on camera): Have you heard about Warren Jeffs being captured?

UNIDENTIFIED FEMALE: Yes, I heard about it.

TUCHMAN: Tell me how you feel about it.

UNIDENTIFIED FEMALE: I'm not sure.

TUCHMAN (voice-over): In this remote part of the Southwest, where about 10,000 Jeffs supporters live, it is very hard to get church members to talk to us.

UNIDENTIFIED FEMALE: And this one.

TUCHMAN: That's why we were surprised when 23-year-old Elsie (ph) opened up her home and her heart by talking about the church she loves, but the prophet she no longer trusts.

UNIDENTIFIED FEMALE: I don't believe prophets are dishonest and do what he has done.

TUCHMAN: Since Warren Jeffs has been on the run, Elsie (ph) and her husband have lost their affection for a man who, until recently, meant everyone to them.

UNIDENTIFIED FEMALE: Thought that he was the one who got the revelation, and, through him, you could go to heaven.

TUCHMAN (on camera): And you loved him, right? UNIDENTIFIED FEMALE: Yes, I did.

TUCHMAN: Elsie (ph) is the only wife in the house for now, but, coming from a polygamist family, she says it's likely her husband will take more wives in the future. Their marriage three years ago was performed by Jeffs.

UNIDENTIFIED FEMALE: "I am president Warren S. Jeffs," that is what he said when he first went in. And then he told me he wanted me to marry Robert Richter (ph). And I didn't know who he was, but I found out real soon.

TUCHMAN: And, when you were told you were getting married, how soon did you get married?

UNIDENTIFIED FEMALE: Well, we waited five minutes after that, until he arrived. And then...

TUCHMAN: That's a length -- that's a lengthy courtship.

(LAUGHTER)

UNIDENTIFIED FEMALE: And then I married him.

TUCHMAN (voice-over): Elsie (ph) still believes that Warren Jeffs was inspired by the lord to marry her to a man she now loves. But she has lost her respect for Jeffs, the man who taught his flock to live simple religious lives, without outside influences.

(on camera): The fact that Warren Jeffs had $54,000 in the car, and disguises, and wigs, and cell phones, and all kinds of stuff, what does that make you think?

UNIDENTIFIED FEMALE: It doesn't make me think he was very honest.

TUCHMAN: A hypocrite?

UNIDENTIFIED FEMALE: Mmm-hmm.

TUCHMAN (voice-over): But Warren Jeffs, she says, will remain in charge of this church, even as a prisoner.

UNIDENTIFIED FEMALE: I think he will be a leader as long as he says he is.

TUCHMAN (on camera): Even though he's behind bars?

UNIDENTIFIED FEMALE: Yes.

TUCHMAN: You don't think the people here will say, he's in jail; it's time to do something else?

UNIDENTIFIED FEMALE: No. They will say, he's in jail, so that means he's getting persecuted. TUCHMAN (voice-over): Elsie (ph) says, she will continue her life with conservative attire, no TV, and practicing her religion. But she's looking for a new prophet.

(END VIDEOTAPE)

KAGAN: And that was our Gary Tuchman reporting from Colorado City.

Once again, Warren Jeffs, the leader of that sect, has waived his right. And he will be extradited first to Utah. This was the scene in the Las Vegas courtroom very close to where he was captured earlier this week. He goes first to Utah and then to Arizona.

More coverage on this ahead on "LIVE FROM".

We're going to after this break rejoin CNN International and YOUR WORLD TODAY.

I'm Daryn Kagan.

(COMMERCIAL BREAK)

MCEDWARDS: Welcome back to our special coverage.

The controversy over Iran's nuclear program certainly has some U.S. lawmakers taking a closer look at the White House's nuclear agreement with India.

MANN: Right. Unlike Iran, the world's largest democracy has not signed the nuclear nonproliferation treaty. Neither, for that matter, have Israel or Pakistan, nations that are also widely believed to have nuclear weapons. North Korea did sign the treaty but withdrew in 2003, and now says it has nuclear weapons.

MCEDWARDS: So, are there any double standards here? Any double standards in how Washington is dealing with this issue?

Satinder Bindra takes a look.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice over): Thousands of Indians celebrate after New Delhi successfully conducts an underground nuclear test in 1998. The reaction in Washington is just the opposite, one of anger.

President Bill Clinton immediately imposes sanctions, but these are gradually lifted. And earlier this year, President George W. Bush announces that, subject to congressional approval, Indian will be given access to U.S. civilian nuclear reactors and fuel.

With this booming economy and what the U.S. president calls responsible nuclear track records, Washington wants to bend the nuclear rules for India. Many U.S. arms experts warn that's a big mistake. JOE CIRINCIONE, CENTER FOR AMERICAN PROGRESS: You're rewarding India for exactly what we're telling Iran it shouldn't do. What's Iran supposed to think? I'll tell you what they think. They believe that if you're strong enough, if you just stand up to the United States, if you don't back down, eventually we will.

BINDRA: (INAUDIBLE) U.S. nuclear deal's critics say it will also allow India, which they believe already has 100 nuclear weapons, to build even more nuclear bombs, escalating a dangerous arms race with nuclear neighbor Pakistan. Other U.S. analysts say the deal is riddled with double standards.

DARYL KIMBALL, DIRECTOR, ARMS CONTROL ASSOC.: The only way to eliminate the risk of nuclear war and to reduce nuclear danger is to have a consistent policy that applies to all countries, rather than only seeing nuclear weapons as dangerous weapons in the hands of dangerous regimes.

BINDRA: Recently, Tehran, which has very good relations with New Delhi, complained the U.S. was ignoring India's growing nuclear arsenal and being unfairly tough on Iran. Indian analysts say that's a dubious comparison. They point out that even after conducting such nuclear tests, Indian never signed the nuclear nonproliferation treaty designed to stop the spread of nuclear weapons. But since Iran did sign the treaty, the analysts say it has to abide by its restrictions.

BHARAT KARNAD, CENTER FOR POLICY RESEARCH: They signed the treaty, knowing the dangers. So having signed the treaty, they cannot now, you know, argue the negatives of the treaty. They should have talked about it, and thought about it.

BINDRA: In the coming weeks, the U.S. Senate will think about the deal and likely impose some restrictions.

(on camera): Here in New Delhi, the country's parliament views such tinkering to be a potential dealbreaker. The main concern, India could lose its nuclear research and development capability. This, coupled with U.S. proliferation concerns, means it's far from clear what the final shape of this nuclear deal will be, or if it even goes through at all.

Satinder Bindra, CNN, New Dehli.

(END VIDEOTAPE)

FRAZIER: Still to come...

MCEDWARDS: Growing civilian casualties as Israel keeps up its campaign against Palestinian militants in Gaza. That story is coming up.

MANN: Plus, kidnapped at gunpoint, forced to claim a conversion to Islam. A journalist held hostage in Gaza joins us live to talk about his ordeal and now, his fear.

(COMMERCIAL BREAK) MCEDWARDS: Welcome back to YOUR WORLD TODAY. I'm Colleen McEdwards.

MANN: I'm Jonathan Mann. Here are some top stories we're following at this hour. The International Atomic Energy Agency has delivered its report on Iran's uranium enrichment to the U.N. Security Council, and, as anticipated, the report says Iran has not complied with today's deadline to suspend that activity. Iran's disregard of the deadline now exposes it, potentially, to sanctions.

MCEDWARDS: Mortar attacks and bombings to tell you about, killing at least 20 people in Baghdad. At least mortar rounds hit four different neighborhoods in southeastern Baghdad. Twelve people were killed. Earlier, a car bomb killed two people and wounded 13 others. These attacks come as Iraqi and U.S. security forces press ahead with an extensive security crackdown in the capital.

MANN: Lebanese Prime Minister Fouad Siniora says the Israeli military has wiped out all his nations post-war achievements. The prime minister is in Stockholm, trying to raise $500 million to rebuild Lebanon at a donors' conference. He also called on Israel to lift the land, sea and air blockade of Lebanon, calling it inhumane.

MCEDWARDS: While the prime minister is trying to get those donations to rebuild, Hezbollah is stepping in to help residents in southern Lebanon. The militant group is handing out cash payments to help people repair their homes and their businesses, put their lives back together. But some say Hezbollah should be held accountable for much of this destruction.

Jim Clancy reports.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN CORRESPONDENT (voice-over): Hezbollah supporters lay out their assessments like battle mats, village by village, house by house. This is the operation center for rebuilding south Lebanon.

It is widely accepted that Hezbollah fighters were able to thwart a full-scale Israeli invasion because of bloody lessons learned in 20 years of fighting Israeli troops.

Hezbollah's man in charge of reconstruction in the south says his effort is no different. "Israel taught us from the beginning; while resistance advanced militarily, there was also an advance in reconstruction," he told us, "Five-hundred homes in 1992, 5,000 in 1993, had to be rebuilt."

These Hezbollah members point with pride to what they can do today. The challenge in south Lebanon this time is daunting. Hezbollah says some 6,000 homes were destroyed, twice that number of houses or shops damaged, 30,000 people affected. Cash payments, thousands of dollars for a year's rent and furniture, are being dispersed.

Samoor (ph) says people in the south made a willing sacrifice of their homes and businesses to the resistance.

UNIDENTIFIED FEMALE: This is stupid.

CLANCY: But some residents say the reality is much different. No one asked them before rockets were fired from their neighborhoods. They had already fled. At a U.N. base, incoming Israeli artillery ripped through temporary housing after Hezbollah fighters fired what UNIFIL troops said must have been hundreds of rockets from just 80 meters away.

Asked whether Hezbollah intentionally used the area, knowing Israeli fire would hit the base, one peacekeeper smiled, shook his head and said, "Of course."

Hezbollah's own rebuilding effort appears to outpace whatever the government is Beirut is able to do, but virtually all of the equipment being used comes from the government. It's teamwork, but there are tensions. While Hezbollah officials point with pride to the group's underlying ideology of absorbing whatever punches Israel throws at them, the government is adamant: that cannot be Lebanon's national strategy.

SAMI HADDAD, LEBANESE MINISTER OF TRADE: We don't want the rebuilding industry to become our main industry. We want to live, like everybody else, a normal life and build a prosperous economy and continue to be a beacon of democracy, freedom and tolerance.

CLANCY: Many businesses hit during the war, like this gas station, are rushing to repair what they can and get their cash flow moving. Others have simply given up, packed up and abandoned their investments and debts. While Hezbollah leader Hassan Nasrallah has pledged there won't be another round of destruction any time soon, the damage is done. The loss of confidence has cost Lebanon far more than the material damage to homes, shops and infrastructure.

(on camera): People and investments have fled, unless the politics of Lebanon can be permanently changed. And that means the notion that a single armed group can dictate this country's future, then many of these people and most of the investments will not be coming back.

Jim Clancy, CNN, Tyre, Lebanon.

(END VIDEOTAPE)

MANN: Tensions between Israel and Hezbollah are cooling, but there is still violence in Gaza. Israeli troops have pulled out now of Gaza City after a four-day operation against the al-Aqsa Martyrs Brigade. But, as Paula Hancocks reports, many civilians are getting caught in the crossfire.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): More bodies are carried through the streets of Gaza, a sight all too familiar to the residents here. The past five days have been even worse than normal in this small coastal strip. An Israeli military operation has killed 20 Palestinians, eight of them civilians, according to the Palestinian Health Ministry.

There's anger among Gazans, and it's not just directed at Israel. This woman says, "Not even one Arab country said a word, not even a quarter of a word." She says they're like dogs.

Israel justifies the operation, saying it is searching for tunnels and explosives. The military uncovered a 150 meter long tunnel on Sunday, leading from a building in Gaza City to the main commercial crossing with Israel. The army blew up the tunnel before it left the area.

During the Israeli/Lebanese conflict, Gaza became the forgotten front. Palestinian medical and security sources say at least 200 Palestinians have been killed in Gaza in the past two months, at least have that number civilians.

The offensive began after an Israeli soldier was abducted by Palestinian militants on June 25th.

JAN EGELAND, U.N. UNDER-SECRETARY-GENERAL: Gaza is a ticking time bomb. You cannot seal off an area which is a little bit bigger than the city of Stockholm in extension only. Have 1.4 million people of whom 800,000 are youth and children, and then have 200 artillery shells going in there every day, virtually.

HANCOCKS: Ammunition flew both ways Thursday, as militants renewed rocket attacks into Israel that had subsided during hostilities in Lebanon, ignoring calls from Palestinian politicians to halt their fire. And in the West Bank, a top militant commander was killed by Israeli forces in Nablus Thursday. Palestinian sources say Fahdi Kahisa (ph) of the al-Aqsa Martyrs Brigade was known to help to help prepare suicide bombings in Israel. Militants have vowed revenge for his death.

Paula Hancocks, CNN, Jerusalem.

(END VIDEOTAPE)

MANN: The ordeal with two journalists kidnapped in Gaza captured international attention.

MCEDWARDS: That's right. Just ahead here on YOUR WORLD TODAY, we're going to talk to one of those journalists and his wife who worked hard to win his freedom. We'll hear their story. Stay with us.

(COMMERCIAL BREAK)

MANN: Welcome back to YOUR WORLD TODAY, seen live in more than 200 countries across the globe.

MCEDWARDS: The headlines from Iraq are generally filled with bad news. That's an understatement. But even the most peaceful days seem to have at least one bombing, some kind of random shootout. There is always something to report.

MANN: A security operation in Baghdad, though, seems to be making a difference.

Michael Holmes reports.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): Hamid (ph) is treated for a burn to his arm, a burn that's been untreated until now. Outside this makeshift clinic for the first time in several months, locals in the usually violent Baghdad suburb of Gazalia (ph) line up for medical treatment, courtesy of the Iraqi and U.S. military.

Until a couple of weeks ago, such a gathering would likely have attracted death squads bent on killing these people, and the troops who stand guard this day.

UNIDENTIFIED MALE (through translator): It's better now. Before we couldn't sleep. We were scared...

(END VIDEOTAPE)

MCEDWARDS: All right, sorry to interrupt that report. But we do want to take you back to the United Nations because the U.S. ambassador to the U.N. is at the podium. Let's listen -- John Bolton.

JOHN BOLTON, U.S. AMB. TO U.N.: Now, in the language of the IAEA and the international system, that's a red flag. That says that the Iranian program contains much that should be worried about hear in New York, and that I think underlies our concern that Iran is pursuing nuclear weapons. There is simply no explanation for the range of Iranian behavior which we've seen over the years, other than that they're pursuing a weapons capability. And that's not based on intelligence, that's based on public record. That's based on reading report after report by the IAEA, as this most recent report is yet another example.

The report makes clear that not only has Iran not suspended uranium-enrichment activities, as required by resolution 1696, it's accelerating, it's building another 164-centrifuge cascade, which will begin operations within the next month, and that all of these research activities, including the introduction of uranium hexaflouride into the centrifuge cascades has continued as recently as last week.

Now this is an example of why the idea that Iran should be allowed to conduct research and development activities doesn't work. Once Iran perfects uranium-enrichment technique at the level they're doing it now, it's like a cookie cutter to go from one cascade to two cascades to 100 cascades to 1,000 to 10,000, at locations unknown to the IAEA International community where enrichment activities can take place. But beyond that, the IAEA report shows a continuing pattern of lack of cooperation by Iran, obstructionism by Iran, of not allowing the IAEA inspectors to do the basic work that they need to do to prove that the Iranian program is peaceful. The activities that Iran undertakes that are simply inexplicable, if their real purpose is a peaceful nuclear power program. And I'll just mention one. The continued refusal of Iran to explain why it is dealing with uranium metal, and the fabricating -- first, the creation of uranium metal from uranium hexaflouride. And second, the casting and forming of uranium metal.

Why is this important? Apart from a few very sophisticated uses of uranium metal by the most advanced nuclear programs in the world, the only real use for uranium metal is a nuclear weapon. So why is Iran experimenting, admittedly with small quantities of uranium metal? Why are they reluctant to allow the IAEA to make copies of the document referred to. Why have they taken the notes from the IAEA inspectors that they wrote on first examination of the document? What is the reason Iran is looking at the subject of uranium metal? Now that's just one example. And I won't go back over the long list of reports and similar examples that the IAEA has reported earlier.

But let's be clear, what the bottom line conclusion is here today. Iran is defying the international community. Iran is not suspending its uranium-enrichment activity. And from all we can see in this report, it continues to pursue a nuclear-weapons capability in violation of its obligations under the Nuclear Proliferation Treaty.

I'll take a few questions.

Yes, ma'am?

QUESTION: Ambassador, the report says that Iran is not as successful as people feared in enriching that uranium. So does that make action less urgent? Is that why Russia, France and China are dragging their heels on their July commitment?

BOLTON: Well, I don't -- I wouldn't draw that conclusion. Let me see if I can try and explain this again. This is a lawyer trying to explain sophisticated nuclear technology here. But the -- I'm sure the general public will follow with great interest, but it's -- because it is important. What the Iranians are trying to do is perfect the technology that will allow them to take the uranium U-235 isotope from its natural levels of occurrence, which is 0.7 percent in all uranium, and enrich it to levels -- they say they're going to stop at reactor grade levels, which are between three and five percent U- 235 isotope, or go up to weapons grade, highly enriched uranium containing 90 percent or more of the U-235 isotope. This is a very complex and technologically difficult process to do, and the method that they're using is a complex technology with a lot of ways that it can break down before you achieve a capability to produce at a mass production level.

But what the Iranians are doing are continuing to work through the difficulties, continuing to perfect, continuing to learn what their problems are and continuing to correct those problems.

Now, there will come a time, because we know this technology works. It's used by -- to enrich uranium, probably the highest percent of enriched uranium in the world comes from this technology. We know it is workable, and the only issue, if the Iranians s are allowed to continue, when they will perfect it. So -- and once it's perfected, then, as I say, you take what you've learned and not just do it in one centrifuge cascade or two centrifuge cascades, but in hundreds or thousands of cascades, because if it works in one, it will work in all of them. That's what the issue is.

Yes, sir?

QUESTION: Ambassador, how will the West convince Russia and China to support sanctions?

BOLTON: I don't really think it's a question of us persuading Russia and China. Russia and China, through their foreign ministers, committed, committed to seeking sanctions when the perm five plus Germany foreign ministers met about two months ago, and they issued a statement, which was I think very clear, that said that said that if Iran continued to reject the very generous offer that the E.U.-3 were making on be half of six countries and if Iran failed to suspect its uranium-enrichment activities, now as called for both by the International Atomic Energy Agency and by the Security Council, then the perm five, plus Germany would come to the Security Council and seek sanctions.

Now that's what they said. That's what they all said. And I don't think we should necessarily jump to the conclusion that they won't follow through on the word that they've given.

Yes, sir.

QUESTION: Ambassador, in the backdrop of President Bush's speech that he is still calling on diplomacy to work, I mean, still believes diplomacy will work, and in view of this IAEA report, which is still inconclusive and suggests that it needs a little more time in determining how far has Iran violated its agreement, do you believe that this technology that it is perfecting is only meant for nuclear arms, or it can be used for any peaceful purposes?

BOLTON: Well, let me say first, one of the reasons, in fact the principle reason the IAEA cannot make a conclusion about the nature of the Iranian program, is because the Iranians are not being forthcoming. They're not providing all of the information they're obligated to provide. They're obstructing the work of IAEA. And so it's not surprising that the IAEA can't draw a conclusion. So if, over a three- or four-year period now, you look at pattern of obstructionism and lack of cooperation by Iran, I think after a certain period of time, you're permitted to draw the logical conclusions that maybe there's something they don't want the IAEA to see.

And I think on that basis alone, the Security Council was fully warranted in passing a binding resolution calling on Iran to suspend its uranium-enrichment activities, which they have not done.

Yes, sir.

QUESTION: (INAUDIBLE) gave an interview that appeared this morning, spelling out some of the steps that might be next in terms of specifics on sanctions. Can you give us a sense what you're talking about now, the type of sanctions you'd be looking to impose on Iran, how far along are those sanctions, and when are you going to be discussing them further here in the Council?

BOLTON: Well, there are a range of issues that we've been considering. I don't think there will be discussions here until after Javier Solana meets with Mr. Larijani next week in Europe, which the Europeans have asked be undertaken, and that meeting is scheduled, I think, in the middle of the next week at the European initiative. So we'll see what happens after that meeting.

But the United States has been considering this for quite some time, and we've got a lot of thoughts on it.

I'm not going to get into the specifics at this point, because we do want to have further consultations with the other E.U.-3 countries, and that will occur in due course.

QUESTION: Mr. Ambassador, what we have from you are conclusions referring to public statement by Iranian officials. Are there any credible intelligence that the United States have to prove that the Iranians intentions are dishonorable?

BOLTON: Well, there's a lot we know that we can't talk about. And one of the reasons that I stress that you can build a case about what the Iranians are doing entirely from what is in the public domain, is not to say that there aren't things in the public domain that we don't know, that don't fully corroborate the idea that Iran is pursuing nuclear weapons and capability to deliver them.

But when you look at the range of things that the IAEA itself has said, not the United States, not the EU-3, but the international agency charged with enforcement of safeguards agreement and the Non- Proliferation Treaty, that evidence alone is extremely compelling, and sufficiently compelling to get a nearly unanimous Security Council decision, compelling Iran to suspend its uranium-enrichment activity, which Iran is obviously not doing, and that's why I think President Bush's characterization of their posture is one of defiance is absolutely right.

QUESTION: There's some concern about the unanimity of the Council, especially in today's vote in Sudan, and that with Iran, you won't get strong sanctions. Is there a certain line of sanctions that the U.S. won't go below what they want to punish Iran?

BOLTON: It's a question that we really can't answer at this point. But I want to say while the unanimity of the Council is desired from an obvious political point of view, we do not regard council unanimity as a requirement. This is not the League of Nations. This is not the League of Nations, and the difficulty that the league had, because of the unanimity requirement were expressly rejected by the drafters of the U.N. charter in San Francisco. We don't need unanimity. We don't need unanimity. As we demonstrated today in Sudan, while we're certainly prepared to try and seek the broadest possible support, we do not need a 15-0 vote for the Security Council to act.

QUESTION: What's the message that you're seeking sanctions on Iran, perhaps even sanctions on Iranian officials, while allowing President Khatami to come here, giving him a visa, and do you expect to meet with him?

BOLTON: No, I do not expect to meet with him. And you know, the circumstances of the visa, I think, have been addressed by the State Department spokesman in Washington. I don't have anything to add to that. I deal with nuclear weapons programs.

QUESTION: Obviously two countries -- or five countries have a veto...

MCEDWARDS: All right, U.S. ambassador to the U.N., John Bolton, being pressed a little bit on the issue of sanctions there. Not going into specifics, but saying that the U.S. doesn't feel that it needs unanimity with the United Nations to go ahead and pursue sanctions, saying that Iran is defying the international community, not suspending its enrichment activities and continuing to pursue a nuclear weapons program. That charge is one that Iran denies.

MANN: Absolutely. The Iranians are saying that this report confirms that they have a peaceful program. In fact, the report says there's no concrete proof of a military program. The Iranians say they will not bow to pressure, they will not retreat.

That's all for this hour.

MCEDWARDS: "LIVE FROM" is up next, for our viewers in the United States.

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