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American Morning

North Korea Nuclear Test; Foley Fallout

Aired October 09, 2006 - 06:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Good morning, it's Monday, October 9, Columbus Day. I'm Miles O'Brien.
SOLEDAD O'BRIEN, CNN ANCHOR: And I'm Soledad O'Brien.

The top story this morning, North Korea says it conducted a nuclear test. Its first ever. We've got reaction and live reports from around the world this morning.

M. O'BRIEN: Other stories we're following this morning.

At least seven Iraqi police officers are dead from poisoning, more than 700 others are sick after eating dinner at a police base in southern Iraq.

S. O'BRIEN: A popular brand of lettuce is being recalled this morning over fears of possible E. coli contamination.

M. O'BRIEN: And a former top staffer for Mark Foley to testify before the House Ethics Committee this week. Kirk Fordham expected to say he issued warnings about his former boss in 2003.

S. O'BRIEN: It is just before 6:00 in the morning East Coast time, let's get a check of the weather. Chad Myers has a look at some of the colder temperatures today.

Hey, Chad, good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning.

(WEATHER REPORT)

M. O'BRIEN: Thank you very much, Chad.

Let's get right to our top story, North Korea's nuclear bomb test. The regime of Kim Jong-Il saying it successfully exploded a bomb underground at 9:36 p.m. Eastern Time last night. At that time, the U.S. geological survey measured a 4.2 magnitude tremor at the test site. North Korea notified China 20 minutes in advance. The Chinese passed that warning onto the U.S., Japan and South Korea.

The White House calling it a provocative act. The administration expects the United Nations to take immediate action. The Security Council is set to meet at 9:30 Eastern Time this morning.

Our correspondents have been following this story all throughout the night, Sohn Jie-Ae in Seoul, South Korea, Jaime FlorCruz in Beijing and Atika Shubert in Tokyo. We begin with Sohn Jie-Ae in Seoul where the South Korean military is on high alert.

SOHN JIE-AE, CNN CORRESPONDENT: Yes, Miles, South Korea had some tough words upon the news that North Korea had conducted a nuclear weapons test. South Korea called it a provocative act that could not be tolerated.

But the South Korean President, Roh Moo-Hyun, after a meeting with the visiting Japanese Prime Minister Shinzo Abe, had a slightly softer tone towards the North Koreans. In a press event that he conducted after the summit, he said this about the significance of North Korea's nuclear weapons test.

(BEGIN VIDEO CLIP)

PRES. ROH MOO-HYUN, SOUTH KOREA (through translator): What North Korea has done is breaking the trust of the international society. Our government will take care of this in a fast and a very clear and cut way. But we will...

(END VIDEO CLIP)

SOHN: He went on to emphasize that South Korea is now put in a very difficult position. He says that South Korea had pushed for dialogue more so than Japan and the United States. But with the news that North Korea has conducted a nuclear weapons test, South Korea's push for dialogue has been weakened, if not undermined altogether -- Miles.

M. O'BRIEN: Sohn Jie-Ae in Seoul, South Korea, thank you -- Soledad.

S. O'BRIEN: China, considered North Korea's closest ally, calls the test brazen and today is urging Pyongyang to return to six-party talks.

CNN Beijing bureau chief Jaime FlorCruz joins us from the Chinese capital this morning.

Jaime, good morning.

JAIME FLORCRUZ, CNN BEIJING BUREAU CHIEF: Good morning, Soledad.

The reaction from the Chinese came very quickly and harshly in the form of a foreign ministry statement, calling North Korea, with its formal name, DPRK, saying that "The DPRK had totally ignored the widespread opposition in the international community and conducted a nuclear test brazenly." That was the word that the Chinese used, and saying that "The Chinese government resolutely opposed this." This is the harshest statement coming out of China on North Korea.

The Chinese still playing its mediator's role being the closest ally of North Korea, also the main supplier of oil and food to North Korea. But, obviously, the Chinese patience is wearing thin. The North Koreans gave the Chinese 20-minute's warning before they conducted the test. The Chinese promptly told the U.S. and South Korea and Japan. The Chinese foreign minister also held -- made phone calls to Secretary of State Condoleezza Rice to consult and also to coordinate reaction. But still, the Chinese are hoping that at the end of the day dialogue and diplomacy will save the day -- Soledad.

S. O'BRIEN: FlorCruz -- Jaime FlorCruz is our Beijing bureau chief for us this morning.

Thanks, Jaime.

In Tokyo, the government there moved quickly to establish a task force to address the move by Pyongyang.

Atika Shubert in Tokyo for us this morning.

Atika, good morning.

ATIKA SHUBERT, CNN CORRESPONDENT: Good morning, Soledad.

Japan is clearly alarmed by these latest developments. Japan's Prime Minister, Shinzo Abe, was actually visiting South Korea when the news broke. He held a press conference just a little while ago where he said that if the test is confirmed, it would pose a grave threat to the security, not only of the region but of the world, and that it is something that the international community should not accept.

Japan is, at the moment, lobbying members of the U.N. Security Council, hoping for a quick resolution that will condemn North Korea. But the question is what effect will that have, if any, keeping in mind that North Korea went ahead with this nuclear test despite international warnings, including a Security Council resolution that was issued before the test -- Soledad.

S. O'BRIEN: So, Atika, then what are Japan's options to some degree?

SHUBERT: Well, frankly, Japan doesn't have that many options. It is now looking at imposing more financial sanctions. But the truth is there just isn't a lot of trade between the two countries. It's already imposed financial restrictions, as has the U.S., and they've had very little impact on the isolated economy there.

And the military option simply isn't there for Japan. It's constrained by a pacifist constitution. It has no capability of a preemptive strike and certainly nothing of a nuclear deterrent, which is asking -- which is why some Japanese are now asking whether or not Japan should bulk up its own self-defenses, including the possibility of nuclear weapons.

S. O'BRIEN: Yes, that's certainly not a lot of options.

Atika Shubert for us in Tokyo this morning.

Thanks, Atika -- Miles.

M. O'BRIEN: North Korea warned that a nuclear test was coming and the White House warned North Korea about the consequences. The question, what now?

Joining us live now on the phone, CNN's Kathleen Koch with reaction from the Bush administration -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Miles, obviously a lot of concern at the White House over this reported nuclear test by North Korea. The United States had feared that this was coming.

And in a conference call with reporters around 1:30 this morning, Press Secretary Tony Snow released a statement saying -- quote -- "a North Korean nuclear test would constitute a provocative act in defiance of the will of the international community and of our call to refrain from actions would aggravate tensions in Northeast Asia."

Snow went on to say that the U.S. expects the Security Council to take -- quote -- "immediate actions to respond to this unprovoked act." He went on to say that the U.S. is closely monitoring the situation and reaffirms its commitment to protect and defend our allies in the region.

Now reporters asked, well, what does that mean? Will there be some sort of blockade, like inspection of ships in the region? And Snow explained, no, there are no military plans right now, none that has been announced. And right now he said the White House, the U.S. is basically still looking at the numbers, still trying to confirm that the North Koreans actually did accomplish what they say they did.

But again, a lot of concern, obviously this U.N. Security Council meeting this morning as to what actions the U.S. would expect from the council. Snow said -- quote -- "a lot of this still hinges on what the data tell us" -- Miles.

M. O'BRIEN: Kathleen Koch on the line with us from Washington, thank you -- Soledad.

S. O'BRIEN: What is life like inside of North Korea? It's a closed society, so what happens there is, to a large degree, a dark secret. Well last spring CNN's Zain Verjee traveled to the DMZ, the demilitarized zone, that separates North and South Korea.

Zain joins us by phone from Washington, D.C.

Zain, good morning.

ZAIN VERJEE, CNN CORRESPONDENT: Good morning, Soledad.

The DMZ has been described as one of the most dangerous places on Earth. There is massive firepower on both sides, troops and artillery, more than a million men ready to go.

But the question this morning a lot of people are asking is what exactly does North Korea want? North Korea wants direct talks with the United States. They wanted normalization of relations because they see that essentially as a key to their survival. They look around, they see their communist neighbors have all collapsed, they're the only ones left standing. North Korea is also desperately poor. It wants economic aid. It's also demanding security guarantees. They see what happened to Saddam Hussein over in Iraq and they want to guarantee that North Korea will not be invaded -- Soledad.

S. O'BRIEN: In addition to all the other worries at this point, how realistic are the concerns that North Korea in fact will export what they know about nuclear testing and nuclear material to terrorist nations?

VERJEE: That actually is Washington's biggest fear that North Korea sells nuclear materials to terrorists or to rogue regimes. But North Korea knows that that is a huge red line for the United States and they should not send any nuclear materials to rogue states or terrorists. They have said publicly they won't do that.

One expert I spoke to, Soledad, said that they wouldn't do it, essentially because they have a limited supply of plutonium, so why give it away. But others I've talked to said, well, if they did, they would do it under only extreme circumstances. One, they would be pressed so internally for money that they would go ahead and do that. And another circumstance could be because of any internal collapse and chaos in North Korea, a rogue general or a rogue faction could get a hold of material and try to sell it.

S. O'BRIEN: Zain Verjee joining us by phone this morning.

Thanks, Zain.

Meanwhile, this morning, a confrontation with Iran over nukes may not be far off. Iran says it's going to continue with its nuclear program in spite of the threat of United Nations sanctions. European nations are set to resume negotiations with Iran. The U.N. Security Council is going to hold off on calling for sanctions until those talks are completed.

In Iraq, there is more violence to report today, six U.S. soldiers have been killed since Friday and 16 Iraqis were killed in sectarian attacks over the weekend. Also, officials are now investigating the food poisoning of over 700 Iraqi police officers. It happened at a base in southern Iraq. Seven officers are reported dead this morning. They have not been able yet to determine if that food poisoning was deliberate.

Let's take you now to Afghanistan. An emboldened Taliban is raising some new concerns. The NATO commander there, General David Richards, says if conditions do not improve, Afghans could switch alliances back to the Taliban. He says more troops are needed to restore peace and to provide the basic services. The Taliban, as we've been reporting, has been stepping up its attacks in recent months.

And the United Nations may vote today to choose a new secretary- general. The council is expected to nominate South Korean Foreign Minister Ban Ki-Moon. The nomination must be ratified by the 192- member General Assembly. Kofi Annan's second five-year term expires at the end of the year.

M. O'BRIEN: Another shocker in the Mark Foley scandal, more proof a lot of people on Capitol Hill knew Foley was praying on pages for a long time. The latest is next.

Plus, more trouble at the salad bar, now it is lettuce which could be tainted with E. coli. We'll tell you what you need to know.

Andy is "Minding Your Business."

Good morning, -- Andy.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Miles.

How are global markets and the U.S. markets responding to the North Korean nuclear test? We'll tell you about that. Stay tuned to AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BREN: Welcome back, everybody.

It's a quarter past the hour. If you're heading out the door, let's get a quick check of the traveler's forecast for you.

Chad Myers at the CNN Weather Center for us.

Good morning.

MYERS: Good morning, Soledad.

(WEATHER REPORT)

S. O'BRIEN: All right, Chad, thank you. That is good news.

Moving on now, first it was spinach, now it's lettuce. A California grower is recalling a popular brand of green leaf lettuce because of possible E. coli contaminations. The Foxy brand lettuce was sold in seven western states. Company officials say irrigation water may have been contaminated with E. coli bacteria. No reported illnesses so far, and the recall comes less than a week after the FDA lifted its warning on fresh spinach grown in California's Salinas Valley -- Miles.

M. O'BRIEN: New revelations this morning in the Mark Foley scandal. Reports a Republican lawmaker learned Foley was preying on pages and confronted him about it as long as six years ago. If true, that contradicts a timeline issued by the speaker of the House when this scandal exploded 10 days ago.

AMERICAN MORNING's Bob Franken live in Washington with more -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning, Miles.

Well, Mark Foley may be hidden away somewhere in a rehab center out of sight, but even with the new world developments, he is definitely not out of mind.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): Kirk Fordham, a former congressional staffer, will testify under oath before the House Ethics Committee this week. His lawyer says Fordham will repeat his claim he spoke to House Speaker Dennis Hastert's chief of staff about a Foley problem in or before 2003. That was years before Hastert's office acknowledges it knew. Speaker Hastert's Chief of Staff, Scott Palmer, insists "What Kirk Fordham says did not happen." But various media reports quote another aide as backing the 2003 timeline.

REP. RAHM EMANUEL (D-IL), CHMN., DEM. CONG. CAMPAIGN CMTE.: And what happened since that time? Mark Foley runs for Congress in 2004, even while they know there were problems. 2005, it's appointed to head the Missing and Abused Children Caucus for the Congress.

FRANKEN: Fordham worked for Foley, then later, Congressman Thomas Reynolds. Reynolds is Chairman of the Republican Congressional Campaign Committee and has released a mea culpa campaign ad for his role in all of this.

REP. THOMAS REYNOLDS (R-NY), CHMN., REP. CONG. CAMPAIGN CMTE.: Looking back, more should have been done, and for that, I am sorry.

FRANKEN: As for Hastert's full schedule of campaign appearances with Republicans, it's not so full anymore. Among those withdrawing invitations is Ron Lewis of Kentucky.

REP. RON LEWIS (R), KENTUCKY: But there is a cloud over the speaker. And until I can get some facts and some information about what happened, then I'm going to put everything on hold as far as working with the speaker on this campaign.

FRANKEN: President Bush is willing to be seen with the speaker. Hastert will appear with the president Thursday in Chicago. And White House Press Secretary/GOP campaigner Tony Snow will speak at a Hastert event next Saturday night.

Four weeks before the election, a "Newsweek" poll shows more than half, 52 percent, believe Hastert was trying to cover up and 53 percent say they want Democrats to take over Congress.

(END VIDEOTAPE)

And if that happens, the question of whether Dennis Hastert would resign as Speaker of the House, Miles, would of course become a moot question.

M. O'BRIEN: Bob Franken in Washington, thank you very much.

Coming up, North Korea's saber rattling is rattling the Asian financial markets. We'll look at that impact ahead on this AMERICAN MORNING.

(COMMERCIAL BREAK) S. O'BRIEN: In America this morning, church bells will ring across Lancaster County in Pennsylvania in memory of the victims of last week's Amish schoolhouse shootings. The bells will ring at 10:45 a.m., the exact time that Charles Roberts started the siege that left five Amish schoolgirls dead. Five other girls were wounded in that attack.

In Massachusetts, Ramon Bashon (ph) is a lucky guy. He survived for four days on Wheat Thins and dew. Here is what happened. His car went off a rural road, it plowed through some trees. It was hidden by the brush. His leg was fractured so he couldn't move. He didn't have a cell phone. Well finally, after four days, a dog walker walking by heard Bashon's screams and called for help and he was rescued.

In Oregon, 11-year-old Devon Rivers (ph) is playing catch now. You can see him right there. But for the past two years, he was in a coma. Doctors can't exactly explain why he became comatose. They think it was a virus. They tested him for everything from West Nile virus to lead poisoning. Didn't -- wasn't one of those. Just as mysteriously, he snapped out of his coma. The family says it feels like a walk on water type of miracle.

In Texas, a hospital in Waco down in a cloud of dust. Take a look at this. There she goes. Took some strategically placed explosives just a few seconds to bring down the old building. The site is being cleared to make way for some new apartment buildings, which is always the way, isn't it?

M. O'BRIEN: Yes. It's kind of like our old set. That's the way it went. Down it went. Welcome to our new home.

Andy Serwer, good to have you with us. You're going to talk about what the North Korean nuclear test has to do with markets.

SERWER: Yes, good morning, Miles.

And obviously that test is rattling stock markets around the globe, particularly in Asia, as you might imagine, and as you might imagine further, particularly in South Korea.

Let's take a look and see exactly what the damage is. South Korean market down as much as 3.6 percent but ends down 2.4 percent, and you can see obviously proximity is everything, Australia not down that much at all.

And interestingly, China, which the market there has been on a tear recently, up at a five-year high, like the U.S., didn't drop at all. In fact, it was up a little bit. The dollar is rallying against Asian currencies. And gold is rallying also this morning. Again, that's a bellwether, a sign of a trouble in the world.

Now let's talk about the U.S. markets. Another bountiful one here in the United States for investors as the great bull market of the fall of 2006 continues. Index up -- indexes up across the board. The Dow up 1.5 percent, that's about 171 points, which was the same almost exactly as the previous week. Stable interest rates and lower gasoline prices having everything to do with that. Futures this morning, though, down a bit, again on news of the North Korean nuclear test.

M. O'BRIEN: So the market is just going to keep going, 12,000?

SERWER: Well, we're going to have to wait and see. Soledad is much better at predicting that than I am, the record shows.

S. O'BRIEN: I'll keep my mouth shut on that one.

M. O'BRIEN: She predicts it frequently, so eventually she'll be right.

SERWER: Yes.

S. O'BRIEN: I predict it and then down it goes.

SERWER: Right, exactly.

S. O'BRIEN: So not today.

M. O'BRIEN: All right, what have you got next?

SERWER: We're going to be talking about gasoline prices, obviously down tremendously over the past several weeks. Some wondering if we have hit a bottom there, but we'll discuss that.

M. O'BRIEN: All right, thank you, -- Andy.

SERWER: You're welcome.

M. O'BRIEN: North Korea keeps its promise to test a nuclear weapon. The region is on edge, the world is reacting and a lot of people are asking what now? Our coverage continues.

And a Republican lawmaker says he knew about Mark Foley's advances toward a teenage page six years ago. What might that mean for Dennis Hastert and the upcoming elections?

You're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Good morning, Monday, October 9, Columbus Day. I'm Miles O'Brien.

S. O'BRIEN: And I'm Soledad O'Brien.

Here's a look at some of the stories we're following for you this morning.

In a major act of defiance, North Korea says it's conducted a nuclear test, its first ever.

M. O'BRIEN: In southern Iraq, at least seven Iraqi police officers are dead, 700 other hospitalized after eating bad, possibly poisoned, food.

S. O'BRIEN: And another day, more revelations in the Mark Foley page scandal.

M. O'BRIEN: Bottom of the hour, time for a check of the weather. Chad says it's going to feel a little bit like fall in a lot of places this weekend.

Hello, -- Chad.

MYERS: Absolutely.

(WEATHER REPORT)

S. O'BRIEN: All right, Chad, thank you.

Here is the latest on our top story this morning, North Korea's nuclear test. South Korea's government says an underground test was conducted by the North at 9:36 p.m. Eastern Time last night. Now meanwhile, the U.S. geological survey measured a 4.2 magnitude quake in the area of the test. China given the heads up by North Korea 20 minutes before the test. They passed that warning on to the U.S. and Japan and South Korea.

The White House expects that the U.N. Security Council is going to take immediate action. The Security Council meets behind closed doors in just about three hours.

Our correspondents have been following this story throughout the night. Barbara Starr is live at the Pentagon for us this morning. Sohn Jie-Ae is in Seoul, South Korea. And Jaime FlorCruz is in Beijing for us.

Let's begin with Barbara at the Pentagon.

Barbara, good morning. What's the reaction there?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Soledad, good morning to you.

The reaction is one that they are going to wait and see what the diplomatic community says. There is no sign at this hour of any U.S. military assets on the move. No military reaction to this. But for the intelligence community here in Washington, this could not be a more significant event.

Now, what we do know is that U.S. intelligence did detect that seismic wave. What they have done throughout the night, however, is try and analyze that seismic event to try and determine that it was, indeed, a nuclear event. The seismic wave would look very different if it was not some sort of massive kiloton-type event.

They're also looking right now for what they call dual phenomenology. Is there something else out there in a U.S. intelligence sensor, perhaps from the air or under the ocean, that would confirm, provide dual confirmation that this is a nuclear event? But perhaps the most difficult intelligence problem, once you learn it's a nuclear event, how big was it? How can the U.S. figure out exactly what the North Koreans did?

There are already statements this morning out of Russia that this event may have been as big as Hiroshima. That, of course, an event with nearly the equivalent of 12 kilotons of TNT being set off.

Maybe some skepticism that the North Koreans achieved such a large test. One of the things intelligence is looking at now is whether they might have tried to disguise the magnitude of the test, tried to make it appear to be actually bigger than it was. Why is that so significant, Soledad? Well, of course, because if the U.S. can figure out how much fissile material the North Koreans used up in this test, they can figure out maybe how much they have left -- Soledad.

S. O'BRIEN: And of course you need more than just a weapon to make an effective bomb. You also need some kind of delivery mechanism, right? Where do they stand on that?

STARR: Well, that is the other key question, of course. To deliver a nuclear weapon, you need to be able to miniaturize it and put it on the front end of a missile or a bomb, essentially. A lot of questions about whether North Korea can achieve that miniaturization.

Now, certainly they can perhaps hold their region at risk to some extent. But a long-range attack on the United States at this point, very unlikely.

So, as everyone has said throughout the night, the major concern there is not so much -- although it's bad news that North Korea conducted a nuclear test, again, from an intelligence perspective, now where will they sell that technology? Will they try and sell it to the Iranians? Will they possibly try and sell nuclear technology now to al Qaeda -- Soledad.

S. O'BRIEN: Barbara Starr at the Pentagon for us.

Barbara, thanks -- Miles.

M. O'BRIEN: The test comes while two of the north's neighbors, Japan and South Korea, are holding an important summit. Both leaders reacted quickly to the news.

CNN's Sohn Jie-ae live in Seoul, South Korea, with more on that -- Jie-ae.

SOHN JIE-AE, CNN CORRESPONDENT: Yes, Miles, both the South Korean president, Roh Mooh-hyun, and the Japanese prime minister, Shinzo Abe, had some tough words for North Korea upon the news that North Korea had conducted a nuclear weapons test. The South Korean government said that it was a provocative act that could not be tolerated and that South Korea would support sending the issue to the U.N. Security Council for further discussions.

Now, for a more general reaction to the North Korean nuclear weapons test, although the stock market had a sharp decline, there was no panic on the streets. But when we went out onto the streets to hear what the South Korean people were feeling about the news of the North Korean nuclear test, we were hearing a lot of disappointed -- disappointment and concern.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): We've been supporting North Korea ever since the launch of the Sunshine Policy, but we haven't heard them saying thank you. And I think the global community has to stand strong as North Korea keeps threatening the world peace.

UNIDENTIFIED MALE (through translator): I can't say my friends at school are in panic, but they definitely seem nervous from this incident.

(END VIDEO CLIP)

SOHN: And in a press conference after his summit with the Japanese prime minister, South Korean president Roh urged the people to remain couple and go about their everyday business -- Miles.

M. O'BRIEN: Sohn Jie-ae in Seoul, South Korea.

Thank you.

North Korea has few global friends. Its key ally is China. And this morning Beijing is urging calm and diplomacy.

CNN Beijing Bureau Chief Jaime FlorCruz joining us live now with more -- Jaime.

JAIME FLORCRUZ, CNN BEIJING BUREAU CHIEF: Miles, China usually is very conciliatory towards North Korea. But not this time. The Chinese reacting very quickly and bluntly.

The Chinese Foreign Ministry, in a statement, saying that North Korea has defied widespread opposition in the international community and conducted a nuclear test brazenly. That's a very harsh word in diplomacy, and saying China is firmly or resolutely opposed to this. The Chinese also calling on North Korea to show restraint, and also to return to diplomacy and diplomatic talks.

The Chinese plays a mediator's role, and have hosted many rounds of the six-party talks. But North Korea has now stayed away from that. And meanwhile, the Chinese are leaning heavily on North Korea.

The North Koreans apparently gave the Chinese 20 minutes' warning before it conducted the test. The Chinese quickly shared that information to the U.S., Japan, and South Korea. But obviously none of them succeed in stopping the test.

The Chinese now are saying that they are hoping that in the United Nations Security Council that they could form a united front. The Chinese Foreign Ministry calling Secretary of State Condoleezza Rice to consult and also to try to find the best way to react to this very critical situation -- Miles.

M. O'BRIEN: Jaime FlorCruz in Beijing.

Thank you -- Soledad.

S. O'BRIEN: Could it be a new strategy to attack Iraqi police officers? Hundreds of officers are sick, and at least seven died after eating a meal. Now investigators are trying to determine if it was a deliberate poisoning.

CNN's Arwa Damon live for us in Baghdad this morning.

Good morning, Arwa.

ARWA DAMON, CNN CORRESPONDENT: Good morning, Soledad. That's right. It is a very bizarre event.

Now, what we do know from hospital officials down in Numaniyah -- that is about 75 miles south of the capital, Baghdad -- is that at least hundreds of Iraqi police officers that are based at a base down there have become very ill, and they are saying that seven of them have died due to food poisoning. Apparently, minutes after they had their evening meal in which they broke their Ramadan fast, they immediately fell ill.

We heard stories from the hospital there of chaos, of not having enough ambulances to evacuate those that were ill. Eventually, all did end up at a number of hospitals in that area.

Now, what we do know from the hospitals, that seven of them were killed. However, the Iraqi Ministry of Defense put out a statement in which they said that only about 300 to 450 of these police officers fell ill. They are denying any reports at this point that there were any deaths.

But that, of course, does contradict what the hospital is telling us. We are awaiting more information. This is an incident that is still under investigation.

There have been a number of individuals detained in it, to include the person who is in charge of the mess hall down there. They are right now trying to figure out if this was a deliberate poisoning attempt, perhaps a new strategy used by the insurgents, or if it was just a case of bad food -- Soledad.

S. O'BRIEN: Arwa Damon in Baghdad for us this morning.

Thanks, Arwa.

Ahead, the bulls continue to run on Wall Street. Just how high could the market go? And how is the market going to react to North Korea's nuclear test?

Andy Serwer is "Minding Your Business" just ahead.

(BEGIN VIDEOTAPE) CAROL COSTELLO, CNN CORRESPONDENT (voice over): What happens when you serve up a backhand or a volley in a heart-pounding aerobics class? You are experiencing cardiovascular tennis, a class designed for beginners, as well as advanced tennis players.

HEATHER SILVIA, CARDIO TENNIS PRO: It allows you to socialize with your friends. It's designed to get you out of the gym and outside, having a blast. It's designed to keep your heart rate up.

COSTELLO: Cardio tennis combines drills and exercises, such as running through ladders, jumping jacks, lunges and squats. Grace Dunne says she's addicted to it.

GRACE DUNN, CARDIO TENNIS PLAYER: It's better than being inside, working in a gym. You know, running in the neighborhood. It's just a lot more fun.

COSTELLO: Some serious tennis players say it can improve your tennis game.

UNIDENTIFIED MALE: Instead of hitting 50 or 60 balls in a half hour, you'll hit 120.

UNIDENTIFIED MALE: Everybody is moving all the time. There is no stopping in cardio tennis.

COSTELLO: And the best part? Women can burn up to 300 to 600 calories in an hour-long class, and men can burn upwards of 800 calories.

Carol Costello, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

S. O'BRIEN: Here's a look now at stories that CNN correspondents around the world are covering today.

(BEGIN VIDEOTAPE)

SOHN: I'm Sohn Jie-ae in Seoul. The South Korean government has strong reactions to the news that North Korea conducted a nuclear weapons test. They said this was a provocative act that could not be tolerated, and that they would support an immediate discussion of this North Korean nuclear weapons issue at the U.N. Security Council. South Koreans on the street today spent an uneasy day worried about the adverse effects of the rising tensions on the Korean peninsula.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

DAMON: I'm Arwa Damon in Baghdad. Violence across all of Iraq claimed dozens of Iraqi lives. Fierce fighting in the southern city of Diwaniyah, 95 miles south of the capital, Baghdad, began Saturday night when U.S. and Iraqi forces entered that city, coming under heavy rocket-propelled grenade and small arms fire. One U.S. tank was destroyed, and according to the U.S. military, at least 30 suspected insurgents were killed in the fierce fighting.

This is an area that is known to be a stronghold for the Mehdi militia. That is the militia loyal to radical Shiite cleric Muqtada al-Sadr.

Of course disarming the militias is one of the greater challenges that the Iraqi government faces today. In the latest sectarian violence, Iraqi police say that since Saturday they have found at least 100 bodies in the capital, Baghdad, alone.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: : I'm Matthew Chance in Moscow.

Russians are mourning the brutal killing of one of the country's most prominent journalists. Anna Politkovskaya was a fierce critic of Russia's war in its breakaway Republic of Chechnya, and at the Kremlin-backed authorities there. She was gunned down at the weekend in what police say was a contract killing in her Moscow apartment building.

Hundreds have gathered to pay their respects. Tributes have flooded in from around the world. The U.S. State Department says it's profoundly shocked and saddened by the killing, and it's calling on the Russian authorities to find those responsible.

The Russian language newspaper where she worked is offering a reward of a million dollars for information leading to an arrest. The Kremlin has yet to comment on the murder.

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S. O'BRIEN: For more on these or any of our top stories, log on to our Web site at CNN.com.

M. O'BRIEN: Let's get a check of the weather. Chad Myers at the weather center with that.

Hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Miles.

(WEATHER REPORT)

M. O'BRIEN: Up next, Andy "Minding Your Business".

Andy, what you got?

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Miles, how about gasoline at 12 cents a gallon -- 12 cents a gallon? That's how much gas goes for in Venezuela. So guess what kind of cars they like to drive down there?

We'll tell you about that coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: The latest chapter in the Mark Foley scandal not a pretty one for Republicans. A Republican congressman from Arizona, Jim Kolbe, telling "The Washington Post" he became aware Foley was preying on pages as long as six years ago.

Some grist for the Monday Mercurio mill.

John Mercurio is senior editor of "National Journal's Hotline". He joins us every Monday morning about this time.

Good to have you back with us, John.

JOHN MERCURIO, SR. EDITOR, "HOTLINE": Good to be here, Miles.

M. O'BRIEN: Jim Kolbe, the only openly gay GOP congressman who says six years ago became aware of this and confronted Foley. How will this -- he doesn't say he mentioned this to the leadership, which is a crucial thing. But do you think this will hurt the Republican leadership?

MERCURIO: Sure. I mean, I think this hurts Republican leadership not necessarily because they were directly involved in the knowledge that Congressman Kolbe had, but because for the simple reason that this story is out today, it prolongs this story, this Foley scandal, into another week.

I was talking to a Republican this morning about the reaction and the fallout to this. He said, "I don't care. I don't care what the new revelation is, whether it helps us or hurts us. The fact that we're talking about it, you and me right now, I think just hurts the Republicans."

They want to get back to talking about the economy, falling gas prices, the stock market being at record highs, job growth. Those aren't things that we're going to be talking about. You don't have the oxygen that Republicans need to run in the last four weeks of the races.

M. O'BRIEN: Of course maybe Democrats would like to get back to talking about the war in Iraq, too. So it covers up issues that cut both ways, doesn't it?

MERCURIO: Sure. That's actually -- that's a very good point I think. I think for the Republicans, the problem going into the last four weeks of this campaign are multi-layered.

You have Foley. If we're not talking about Foley, then you're right, we're talking about Iraq. Senator John Warner, a Republican, came back with very dire assessments of Iraq last week. If we're not talking about that, then we could be talking about the Jack Abramoff investigation. So a lot of problems and a lot of different layers of problems for the Republicans.

M. O'BRIEN: Lots to talk about, for sure.

Tom Reynolds, the man who is running the congressional campaigns for the GOP, at the eleventh hour cancels an important network appearance this week on ABC. Appears to be running from this scandal a little bit. Comes out with an ad saying essentially, "I'm sorry." And he appears to be in trouble in the polls.

What do you make of that?

MERCURIO: Big trouble in the polls. There was a "Newsday" poll out this weekend that showed he now trails his Democratic opponent, Jack Davis, by 13 points.

Reynolds was cruising to re-election. I mean, this was not a race that we were following very closely. Occasionally you'll have a race like this sort of pop up at the very end of a campaign for scandal or for other reasons, but this is incredibly important.

Reynolds is the chairman of the House Republican Campaign Committee. He's supposed to be in charge of everybody else's race. He's not supposed to have problems with his own race.

So if he's distracted over the next month by his own campaign, by his need to win his own re-election, then that's going to distract him and it's going to distract a lot of his aides from the larger goal of holding onto the House.

M. O'BRIEN: You think it was a strategic mistake for him not to appear on that television program?

MERCURIO: I don't know. I mean, it depends on exactly what the -- the -- the reaction or exactly what the negotiations were between him and ABC. I don't know if there was specific questions that he was uncomfortable answering or talking about during the -- during the interview.

So, I mean it's -- it's unusual, it's extremely unusual. And I think you're right. I think it does point to a lot of concern on his part and on the part of his campaign.

M. O'BRIEN: All right.

Let's talk a word with North Korea this morning. We're talking a lot about it. How does it play politically for the Republicans, first of all?

MERCURIO: Well, I mean, no one's happy about this news. It's obviously, you know, being greeted with a lot of condemnation by the international community. But there is a silver lining for Republicans.

And again, the House Republican campaign operative that I was talking to said, "Look, if we can get the headlines to turn to North Korea, to turn to the larger issue of national security, upon which Republicans want to run, then that is a good thing for Republicans."

M. O'BRIEN: Does it play well for Democrats at all?

MERCURIO: Not that I can see at all. I mean, no, it's -- it's -- it forces, I think, people to start looking away from Mark Foley, away from a lot of the scandals on Capitol Hill to the larger issue of national security.

M. O'BRIEN: All right. What's your best guess for the inside story of the week coming up?

MERCURIO: You know, I think the story this week is probably money. It has a lot to do with campaign money.

There's going to be new fund-raising reports. The final fund- raising reports of the 2006 campaign cycle are going to start leaking out this week. They're not technically due until October 15th.

We've been talking a lot about Democratic prospects of taking back the House, maybe taking back the Senate. But we're not going to really know what the political -- what the -- what the campaign landscape on a financial level looks like until -- until we see those forms, and that's important, because that's money that these candidates have to spend in the final month on television ads, "get out the vote" operations, sort of the -- you know, mother's milk of the politics.

M. O'BRIEN: All right. Always follow the money.

"Hotline" senior editor John Mercurio.

Thanks, as always.

MERCURIO: Thank you, Miles.

M. O'BRIEN: Soledad.

S. O'BRIEN: We're going to take a look at our top stories when we approach the top of the hour, including this developing story, the nuclear test by North Korea. We'll take a look at what happened and the world's reaction, as well.

That's all ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody. Gas prices falling again. Could they go lower?

Andy Serwer is "Minding Your Business".

I hope the answer is yes.

SERWER: We're going to talk about that, Soledad.

A big question vexing everyone from Wall Street to Main Street, prices plummeting, as you suggest, down 14 cents over the past two weeks to $2.28 a gallon. That's your national average. And in places like Des Moines, you're paying around $2 a gallon. So you could actually drop below that. But...

M. O'BRIEN: It's a little long to get there, though.

SERWER: Well, unless you live in Iowa. The big question -- the big question is, have prices bottomed out at this point? And there are some things that suggest that perhaps they have.

Number one, when the price of oil drops, that makes economies pick up, which increases demand for oil, which pushes prices back up. You have a pendulum effect. Number one.

Number two, at this time of year oil refineries switch over to making home heating oil, reducing supplies of gasoline. In fact, wholesale prices of gasoline have already stabilized and ticked up a little bit in some instances.

None of this is an issue if you go to Venezuela, though. In Venezuela, the price of gasoline is around 12 cents a gallon. That's because...

M. O'BRIEN: That's better than Des Moines.

SERWER: It certainly is.

S. O'BRIEN: Wow.

SERWER: That's because of national subsidies...

M. O'BRIEN: Wow.

SERWER: ... that have kept prices low there. And, in fact, when they try to increase prices, oftentimes they have civil unrest. And of course, this is a specialty of Hugo Chavez to try to create a situation where the people at home are stable and then point to the United States as the big problem.

So filling a tank with an SUV costs $3. And SUVs, in fact, are very, very popular there. Expeditions and Hummers are selling briskly. In fact, there is a two-month wait if you want to buy a Toyota 4Runner. So you can just imagine down there must be a whole lot of fun. Just fill them up and drive out.

M. O'BRIEN: Send us the Hummers, please, they say, right?

SERWER: Yes, and we have a few extra ones, as it turns out right now.

M. O'BRIEN: We do. Yes, we do. SERWER: You can ask anyone who runs a GM dealer at this point.

M. O'BRIEN: All right. What's next?

SERWER: We're going to be talking about Patricia Dunn, the ex- chairman of HP, and her appearance on "60 Minutes" over the weekend. We'll see how that went.

M. O'BRIEN: All right. Thank you very much, Andy.

SERWER: Thanks, Miles.

M. O'BRIEN: A look at some stories now on our Web site.

Checking stories on CNN.com, two sisters in Bloomfield, New Mexico, caught on videotape beating another girl on a school bus. The sisters serving a 10-day suspension. After the suspension, the two face a hearing and could be kicked out of school. Police say they also face criminal charges.

Cuban president Fidel Castro's brother, Raul, says el presidente is getting better. Raul has been acting president since July. Raul says he wants to squelch rumors his brother has terminal cancer. Castro is recovering from intestinal surgery.

Time to check the gas gauge. The latest Lundberg survey says gas prices going down, dropping an average of nearly 15 cents a gallon in the last two weeks. The national average for a gallon of self-serve, $2.28.

For more on these and other stories, go to CNN.com.

The next hour of AMERICAN MORNING starts right now.

S. O'BRIEN: And good morning. Welcome back, everybody, Monday, October 9th.

I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien.

Breaking news this morning. North Korea says it has conducted its first-ever nuclear test. We have reaction from all around the world.

S. O'BRIEN: Also, happening "In America" this morning, the Foley scandal. New indications that House Speaker Dennis Hastert's office may have known of the e-mails even before Foley ran for office two years ago.

And more concerns about the safety of produce. This time, a popular brand of lettuce is being recalled in seven states for possible E. coli contamination.

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