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American Morning

Blair's Visit; Violence In Iraq; The Big Chill; Father's Body Found; Night Shuttle Launches; History Of Diamonds

Aired December 07, 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: War summit. President Bush greets British Prime Minister Tony Blair at the White House this morning. Talking strategy and response to the Iraq Study Group report.
SOLEDAD O'BRIEN, CNN ANCHOR: Ninety-nine and counting. More cases of E. Coli cropping up. More restaurants, too. And Taco Bell is now tossing green onions that could be the root cause.

M. O'BRIEN: A tragic ending to a father's heroic effort. His body found in the Oregon wilderness only a mile from where he left his family to find help.

S. O'BRIEN: And the dangerously cold air back in the Midwest, moving east now before many people have recovered from the last big storm. The frigid forecast is straight ahead on this AMERICAN MORNING.

Good morning. Welcome, everybody. It is Thursday, December 7th. I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien. Thanks for being with us.

We begin in Washington this morning once again where the air is filled with heated debate on the situation in Iraq described by the Baker/Hamilton panel as "grave and deteriorating."

At the White House, President Bush to huddle with a stalwart ally, British Prime Minister Tony Blair. High on their agenda, that tough assessment and those recommendations from the Iraq Study Group.

The president's press secretary, Tony Snow, promising a revamped strategy in Iraq by the end of the year. And on Capitol Hill, the chairman of that blue ribbon panel, James Baker and Lee Hamilton, will take questions from the Senate Armed Services Committee. They'll also join us coming up shortly.

Let's begin at the White House and the Blair/Bush meeting. Ed Henry with the latest there.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT: The president welcomes British Prime Minister Tony Blair to the White House this morning for a policy discussion followed by a joint press conference. At the top of the agenda, the Iraq Study Group's final report. A blistering repudiation of the war that has become synonymous with Bush and Blair. The commission declaring the current strategy is just not working. In the same week that the president's own nominee for defense secretary, Robert Gates, declared the U.S. is not winning in Iraq.

The president was careful not to endorse any of the commissions 79 recommendations. In part because he wants the Pentagon and National Security Council to finish their separate reviews of Iraq policy that should be more favorable to the White House. But even fellow Republicans say privately that a course correction is needed and White House aides say that it probably will come by the end of December.

Ed Henry, CNN, the White House.

(END VIDEOTAPE)

S. O'BRIEN: In Iraq, it was an especially deadly day for U.S. troops. Ten Americans were killed on Wednesday alone. The number of Americans killed is now rising to 2,923 in the month of December. CNN's Nic Robertson is live in Baghdad this morning.

Good morning to you, Nic.

What terrible statistics to follow.

NIC ROBERTSON, CNN CORRESPONDENT: They are very terrible statistics, Soledad.

We know that 30 soldiers have died now in the first week of December. That is a very high and alarming statistic for U.S. casualties. Of those 10 soldiers, we know that nine were killed in different incidents involving three roadside bombs. One soldier, we're told by spokesmen here, was killed in a non-combat related incident.

The day was a deadly one for Iraqis, too. Mortars rained on a market, killing 10, wounding 54. A suicide bomber got on a bus in the Shia suburb of Baghdad, Sadr City, killed three people, wounded 16.

There was a mortar attack on a Sunni neighborhood in Baghdad, where mortars were fired, about 15 of them, three landing on a mosque, five people wounded, including the religious leader at the mosque. For many people, that would be a very symbolic attack on what Sunnis would consider the heart of their community and the mosque and he religious leader, symbolizing the heart of the community there.

Also, police saying that another 45 bodies turned up on the streets of Baghdad. This body count continues. The police are saying that the bodies are now -- they see them scattered thought the city, not in groups, and dropped off or dumped in certain areas, but just scattered throughout the city. A very alarming for the police. They say they believe a lot of this is down to sectarian violence.

Soledad.

S. O'BRIEN: Let me ask you, we've heard a lot about the impact and the fallout from the Iraq Study Group here in this country. But what do Iraqis say about the report itself?

ROBERTSON: Well, I think one of the interesting statistics in the Iraq Study Group report was the fact that they say four out of every five Iraqis believe that the United States has not done anything good for Iraq. And that's really reflected by what we've heard from people here. Their expectations were low, they didn't expect anything good to come out of the report. They didn't expect a good change. I mean, many people here desperately want to see a policy change, desperately want to see an improvement in their lives, but their analysis was, this wasn't going to be delivered in the report.

And interestingly as well, there was not a lot of debate and coverage about it on the Iraqi television channels here. In many ways, people really have turned their back on this report and are not paying attention to it.

Soledad.

S. O'BRIEN: Nic Robertson in Baghdad for us this morning.

Thank you, Nic.

We're going to be talking with the chairman of the Iraq Study Group, James Baker and Lee Hamilton. That's coming up live in our next half hour.

Miles.

M. O'BRIEN: Folks in the Midwest waking up to single digit temperatures, wind chills well below zero. Power crews still unable to get the lights and the heat on for tens of thousands of people in homes after that ice storm one week ago today. Rob Marciano should be joining us live right now but his camera froze. So here's his report.

(BEGIN VIDEOTAPE)

ROB MARCIANO, CNN CORRESPONDENT, (voice over): Hopes were high for milder weather Wednesday morning. But by noon, the winds shifted, the temperature started to drop.

J.T. SAVAGE (ph), UTILITY WORKER: When you're busy working, you don't really notice it.

MARCIANO: J.T. Savage and other utility workers have been braving the cold for nearly a week to restore electricity to areas ravaged by the first ice and snow storm this season.

How many times today you've been up in the bucket?

SAVAGE: All day.

MARCIANO: As the numbers without power dwindle around Decatur, crews go house to house, reconnecting electricity. But power is still a precious commodity in these parts.

SAVAGE: I just turned their lights on. Now they're back to normal.

MARCIANO: Normal is something Lisa Elmore (ph) and Rick Mclere haven't felt for days.

So this is where you slept for a couple nights?

LISA ELMORE, DECATUR RESIDENT: Yes.

RICK MCLERE, DECATUR RESIDENT: We had blankets, the seats down there for us.

MARCIANO: They spent two nights living out of their van.

ELMORE: He drew that Saturday night. You know, told me to cheer up, you know, we're going to make it. We're going to be OK.

MARCIANO: And now they're OK. After their home was damaged in the storm, the Red Cross helped them find another warm apartment. The best part, it's free for the next month.

So just an apartment building was holding out their hand for you?

ELMORE: Yes.

MCLERE: Yes. Yes. They held out their hand out for us. Yes. And not only did they hold their hand out, I mean, they did it with a silver spoon.

ELMORE: I hope everybody else ends up as lucky as we are.

MARCIANO: The Campbell family feels lucky, too.

RALPH CAMPBELL, DECATUR RESIDENT: We've got nine -- well, there's two adults and eight kids.

MARCIANO: After six nights in a home without power, the Campbells and their eight children are staying at a temporary shelter in a local church.

How did that make you feel when they told you you could come and get something to eat, sleep in a warm bed (INAUDIBLE)?

CAMPBELL: Oh, that sound good.

MARCIANO: Especially as temperatures plummet again. And going without power and heat could be downright dangerous.

(END VIDEOTAPE)

M. O'BRIEN: That was from Rob Marciano who, once again, is in Decatur, Illinois. And where the weather is so cold they can not even join us live.

Chad will join us in a moment to look at the major arctic blast that is moving east.

Soledad.

S. O'BRIEN: This morning, friends are honoring 35-year-old James Kim, as his body was found a mile from the car that he and his wife and his daughters were stranded in, in Oregon. Now Kim had left his family. It was a desperate attempt to try to get help. And his co- workers at the popular tech website, cnet.com, are absolutely stunned by the loss.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This has been a heart-wrenching experience for everyone involved. And I know that I speak for everyone at Cnet Networks when I say that James Kim was a hero and we will miss him greatly.

UNIDENTIFIED FEMALE: We really thought there was going to be a good outcome. And so it's been a really hard afternoon and there's a lot of people inside that are grieving.

(END VIDEO CLIP)

S. O'BRIEN: More now from CNN's Thelma Gutierrez.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT, (voice over): It came on the fifth day, in the search for James Kim.

UNIDENTIFIED MALE: You found him?

UNIDENTIFIED FEMALE: Yes. The other ship just found him.

GUTIERREZ: Two rescuers were lowered to the ground. It wasn't what they had hoped.

BRIAN ANDERSON, UNDERSHERIFF, JOSEPHINE COUNTY: At 12:03 hours today, the body of James Kim was located down in the Big Windy Creek.

GUTIERREZ: It was almost too much to bare for the man who led the rescue effort. The pilot had spotted his body in the dense woods. Just about a mile from the car.

ANDERSON: He was down in that drainage and he was about a half mile from the Robe (ph) River.

GUTIERREZ: The search had been grueling. One hundred teams combed this harsh terrain for five days, searching for clues. First, a pair of gray pants. Then pieces of an Oregon state map. Two gray sweatshirts. A t-shirt. A sock. And a girl's blue skirt. All laid out in some sort of a pattern. Probably an effort to help rescuers above.

ANDERSON: He was very motivated.

GUTIERREZ: Motivated by love for his family. James, Kati, Penelope and Sabine, just seven months old, had been headed to the Oregon coast on the day after Thanksgiving. Detectives say the Kims had missed a highway turnoff. They pulled out a map and found a back country road to the coast. The terrain there is treacherous, with sheer cliffs, sudden drops and freezing snow. And the Kim's station wagon got stuck in the snow. Rescuers say the Kims found creative ways to stay alive. They ate berries and drank melted snow. What little they had, rice crackers and some baby food, they gave to the children. Kati Kim breast-fed both of them to keep them alive.

ANDERSON: They ran out of gas. They were running the car during the day and at night to keep warm. Then they started to burn their tires.

GUTIERREZ: When he left to search for help, James Kim took a flashlight, two lighters and an Oregon map. But his ingenuity and love for his family were overcome by cold, wind, hunger and time.

ANDERSON: I'm crushed. Most of us have breathed and lived this for days. And, yes, you do take it personal.

GUTIERREZ: Thelma Gutierrez, CNN, Merlin, Oregon.

(END VIDEOTAPE)

S. O'BRIEN: Results of an autopsy to determine just how James Kim died are expected today.

Miles.

M. O'BRIEN: Happening this morning.

A funeral today for the former Russian spy, Alexander Litvinenko. The funeral expected right now in a London mosque. Litvinenko converting to Islam in his final days. Scotland Yard now officially investigating Litvinenko's poisoning death as a murder.

Taco Bell is blaming green onions for the E. Coli outbreak. The number of people sick now 99. That's according to investigators in three states. That comes from "The New York Times." Green onions are being pulled from all Taco Bells -- 5,800 nationwide. Two suppliers in the northeast are being investigated. And the onions may have come from a single supplier in California.

December 7th, the date that lives in infamy 65 years later. On this day in 1941, the Japanese attacked Pearl Harbor, Hawaii, drawing the United States into World War II. About 2,400 were killed, 21 ships sunk or severely damaged. Pearl Harbor survivors, who usually gather every five years, say this will be their last reunion. Most are in their 80s and 90s now.

Coming up, more on that bitter cold moving across the country. Severe weather expert Chad Meyers has the forecast.

Also, the hard truth behind the diamond business. Sellers respond to the charges in the new movie "Blood Diamond."

And will Discovery go up tonight? NASA gears up for its first nighttime launch in four years. What NASA's doing to make sure the crew is safe and sound.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody. It's 13 minutes past the hour. If you're just about to head out the door, first let's listen to Chad with the traveler's forecast for you.

Good morning, Chad.

(WEATHER REPORT)

M. O'BRIEN: As he just said, the weather is not looking great, but NASA is still aiming to launch its third shuttle mission in six months tonight. Discovery's crew of seven is headed to the International Space Station on a construction mission. Launch time is set for 9:35 Eastern Time. It's the first night launch since the loss of Columbia.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Liftoff of space shuttle Endeavor. Another building block for the foundation of the International Space Station.

M. O'BRIEN, (voice over): It's been four years since a space shuttle lit the nigh sky at Cape Canaveral.

TOM FORD, NASA DEBRIS TEAM: NASA is definitely ready to return to night launch. We're going to be safe with this mission.

M. O'BRIEN: After Columbia, shuttle managers decided daylight launches were safer, better to be sure their network of cameras could spot any trouble. Columbia was struck by a piece of falling foam during its last launch in January of 2003. The resulting hole in its heat shield caused the orbiter to disintegrate during re-entry, killing the crew of seven. After the disaster, NASA spent $10 million upgrading the cameras and the computers to track a shuttle as it hurdles toward space.

FORD: We're watching this video and we see a piece of foam liberate from up near the ice frost ramps.

M. O'BRIEN: Tom Ford leads the imagery team at the Kennedy Space Center. In the first three flights after Columbia, the system has proved its worth, documenting a large piece of foam that, fortunately, fell harmlessly on the first flight and then much more encouraging pictures on the next two missions after engineers removed a troublesome piece of the insulation.

MARK POLANSKY, DISCOVERY COMMANDER: I don't see anybody in the program going and saying, "the tank is fixed, the tank is fixed, what a wonderful thing." On the contrary, they are quietly encouraged, but you know that you could have a problem on the next tank or the tank after that or the one after that. You just don't know for sure.

M. O'BRIEN: In the darkness, NASA will rely more heavily on radar. TONY GRIFFITH, NASA DEBRIS PROJECT MANAGER: It's very similar to a radar gun that a police officer would use to track speed on the highway. And it is a device that is very accurate for measuring those speed differentials that you'd expect to see with the debris slowing down very rapidly.

M. O'BRIEN: There are three radar sites. Two on ships off the coast and one at the cape. The radar images may not seem like much to the untrained eye, but experts say they can spot falling debris in pitch darkness all the way to space. And NASA is quick to point out, the cameras are just part of the picture. Once in orbit, Discovery's crew will conduct a thorough inspection of the heat shield at the start and the end of the mission.

UNIDENTIFIED MALE: The real big advantage about a daylight launch is making the design safer for folks behind you. Because what's happening as these cameras are going during your launch is happening, you can't do anything about that. But you can certainly do something about that for the next several flights.

(END VIDEOTAPE)

M. O'BRIEN: And we'll have a special edition of Miles Cam today devoted to the space shuttle launch. Milescam@cnn.com for any questions you might have about the space shuttle launch. Answers at cnn.com/pipeline. And special coverage of the launch night, 9:00 p.m. Eastern Time on Pipeline and keeping you abreast of all things related to the space shuttle.

Soledad.

S. O'BRIEN: Ahead this morning, we're live with the chairman of the Iraq Study Group, James Baker and Lee Hamilton. Now that their plans for Iraq are out, is the president going to be willing to listen?

Plus, diamonds are forever. We'll tell you how the multibillion dollar industry is playing offense now before a new movie even debuts. That's straight ahead on AMERICAN MORNING. We're back in a moment.

(COMMERCIAL BREAK)

M. O'BRIEN: Stories we're following for you.

President Bush meets British Prime Minister Tony Blair at the White House to discuss Iraq, Afghanistan and Iran's nuclear threat.

And poisoned Russian spy, Alexander Litvinenko, buried today. Investigators calling his death a murder, while radiation turns up at another location, the British embassy in Moscow.

S. O'BRIEN: Diamonds are usually very hot in December with the holidays, and engagements, too. But a new movie that's opening tomorrow about a ruthless smuggler who sells blood diamonds is putting a big chill on the diamond industry. CNN's Ali Velshi joins is with more on that.

Good morning, Ali.

ALI VELSHI, CNN CORRESPONDENT: Good morning, Soledad.

You know that brilliant marketing campaign, the one about a diamond being forever or about spending two months salary for an engagement ring? Well, one company called De Beers has spend what feels like an eternity encouraging guys to save for an eternity to buy those diamonds. And what they don't need right now is to have besoded (ph), young men thinking about blood when they should be thinking about their bling.

(BEGIN VIDEOTAPE)

VELSHI, (voice over): You may think it's been there forever, but it hasn't. De Beers flagship store on New York's Fifth Avenue opened just over a year ago. So why does the name sound so familiar. Maybe because for most of the 20th century, De Beers was diamonds.

No other industry has been so dominated by one company, one brand for so long. De Beers was the only place most diamond dealers could buy the rough stones to cut, polish and sell to jewelers around the world. With a virtual monopoly, De Beers controlled how much it sold and how much it charged.

ROSALIND KAINYAH, DIRECTOR, DE BEERS GROUP PUBLIC AFFAIRS: If you're the only man in the village who sells bottled water, then I guess you set the prices because you're the only man in the village who sells the bottled water.

VELSHI: De Beers isn't the only man in the village anymore. Diamond prices are now driven by real supply and demand. But a relentless marketing campaign by De Beers turned a diamond into definitive proof of a young man's devotion.

UNIDENTIFIED MALE: A diamond is forever. De Beers.

MATTHEW HART, AUTHOR, "DIAMOND": The diamond is the hardest natural substance in the world. In that sense, is more or less eternal and De Beers managed to conflate these diamond qualities with the idea of eternal love.

VELSHI: That created demand for value in small packages. And while De Beers didn't intend it, diamonds became the currency of choice for warlords who needed to buy arms.

HART: That great big jet would land on this dirt strip. Off would come a tank. On would go the diamonds.

VELSHI: In places like Angola, conflict diamonds were mined from rivers, often using forced or slave labor. De Beers says it never knowingly traded in those stones.

KAINYAH: De Beers was never involved in conflict or blood diamonds. VELSHI: Conflict diamonds have prolonged a number of civil wars in Africa. By 2002, public pressure on governments and on the diamond industry led to the establishment of the Kimberly Process. It's a certification of sorts. A passport for rough diamonds. The World Diamond Council says conflict diamond now account for less than 1 percent of the trade. And it's concerned that the movie, "Blood Diamond," could dull the stone's luster.

UNIDENTIFIED FEMALE, ACTRESS, "BLOOD DIAMOND": People back home wouldn't buy a ring if they knew it cost someone else their hand.

VELSHI: Set in Sierra Leon in the late '90s, "Blood Diamond" is a fictionalized account of the very real role that conflict diamonds played in that country's civil war. The diamond industry is bracing for some impact from the movie. They just hope it doesn't last forever.

(END VIDEOTAPE)

VELSHI: Now, initially when the movie was announced, Soledad and Miles, the companies and the World Diamond Council thought there would be an impact. They were concerned about it. But in reality, for all those years when we did know about blood diamonds, when it was a bigger issue, it hardly put a dent in sales at all.

S. O'BRIEN: So how does this Kimberly Process work? That little passport that each rough diamond gets? How does that work?

VELSHI: Well, theoretically, the rough diamond goes into a box. It's locked with a certificate that says where it came from and it's authorized by the government of a given country. The problem with the process is that it's self governing. So if you say the diamond is legitimate, it's not a conflict diamond and you certify it, it gets locked in that box and that's pretty much all you know about it. Critics say they'd like it to be a little stronger. They'd like oversight from someone not in the business.

S. O'BRIEN: Self-certification maybe not such the greatest way to do it.

VELSHI: Yes.

S. O'BRIEN: All right. What do you have tomorrow?

VELSHI: We're going to be talking about the new world of conflict-free diamonds. The places you can go and your conscience can be clear and you can get a nice gift for someone.

S. O'BRIEN: All right. Ali Velshi for us.

Thanks, Ali.

VELSHI: OK.

S. O'BRIEN: Miles.

M. O'BRIEN: Top stories straight ahead.

Plus, a day which will live in infamy. A personal memory on this Pearl Harbor anniversary.

(BEGIN VIDEO CLIP)

TOM FALLEN (ph), PEARL HARBOR SURVIVOR: We saw planes coming over, you know. And at first it just looked like maybe a practice drill, which they occasionally had on a Sunday night. But then we saw the torpedoes being dropped.

(END VIDEO CLIP)

M. O'BRIEN: Recollections of that day still fresh so many decades later. We'll hear from Tom Fallen ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: War report. What's next for the chairman of the Iraq Study Group? He'll join us live with their recommendations on the war and how the president should respond.

S. O'BRIEN: Saying good-bye. Poisoned Russian spy Alexander Litvinenko will be buried today as British investigators follow a trail of radiation right into their embassy.

M. O'BRIEN: And marking a day of infamy. A visit with a survivor of the bombing of Pearl Harbor, 65 years ago today. It's a tale of duty, sacrifice and history on this AMERICAN MORNING.

S. O'BRIEN: Welcome back, everybody. It is Thursday, December 7th.

I'm Soledad O'Brien.

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

Happening this morning, British Prime Minister Tony Blair is in Washington. In just a few hours he'll meet with President Bush at the White House. The White House says they'll talk about Iraq, Afghanistan, and the Middle East, among other things.

A joint news conference expected at 10:55 Eastern Time. Of course we'll bring that to you live here on CNN.

Friends are honoring James Kim, stranded 11 days in the Oregon wilderness. Kim left his five and two young daughters to try to get help. Rescuers found Kim's body about a mile from their car. An autopsy expected today. Kim's wife and daughters were rescued, safe and sound on Monday.

Taco Bell is blaming green onions for the E. coli outbreak. The number of people sick now, 99. That's according to investigators in three states. That comes from "The New York Times."

Green onions being pulled from all Taco Bells, 5,800 of them nationwide. Two suppliers in the Northeast are being investigated, and the onions may have come from a single supplier in California.

It looks like it's a go for the shuttle Discovery, weather permitting, that is. NASA says the shuttle has a clean bill of health, ready for launch tonight, 9:35 Eastern Time. Low clouds could scrap the launch, however. The shuttle needs enough visibility in case of an emergency landing after launch.

This is the first night shuttle launch in four years -- Soledad.

S. O'BRIEN: A funeral for a spy today.

Alexander Litvinenko is going to be laid to rest in London. It comes as Scotland Yard officially calls his poisoning death murder.

CNN's Jennifer Eccleston is in London this morning.

Good morning to you, Jennifer.

JENNIFER ECCLESTON, CNN CORRESPONDENT: Good morning, Soledad. That's right.

Well, British officials still in Moscow, hoping to continue their investigation, trying to talk to witnesses they believe who might have some information about the death of Alexander Litvinenko. Of course, we use the word 'talk" rather lightly because, in fact, Moscow officials have said the British will not exactly be able to talk directly to the witnesses on their list. They will be able to listen in as Russian prosecutors conduct those interviews.

But yesterday, they spoke to a man who had met with Mr. Litvinenko here in London. And today they would like to talk to Andrei Lugovoi. He is believed to be a key witness, having a lot of information about this case.

He said he is keen to talk to the British. He is a former ex-KGB spy, a colleague of Mr. Litvinenko, met with him a number of times here in London.

He says he has nothing to do with the investigation -- with the murder, that is. And as you mentioned, it's now being called a murder investigation. But with that, he is still keen to talk to British authorities.

And as it turns out, in a number of locations where Mr. Lugovoi actually stayed here in London, they have found traces of radiation. In fact, he is believed to be linked to that trace of radiation that was found in the British Embassy in Moscow.

And as you mentioned, we are expecting the funeral to take place sometime today. But there has been a great deal of secrecy surrounding this funeral. We don't exactly know what time and, in fact, we don't even know where it is or what type of ceremony it will be, whether it will be a Russian Orthodox ceremony, or, in fact, a Muslim ceremony -- Soledad.

S. O'BRIEN: Why so much mystery around the funeral in a case that already has so much mystery in it?

ECCLESTON: Just adding to it, of course, Soledad. It's a great -- it's speculative, but people here tell me that it could be because there will be a great number of Russian exiles at the funeral. Those who have been seseeking sanctuary in this country, and even some coming from Moscow.

And there is a great deal of trepidation and nervousness amongst that community that indeed they could be next on any potential hit list, if there was one out there to begin with. So that could be one of the reasons why there is a certain amount of secrecy surrounding the funeral -- Soledad.

S. O'BRIEN: Jennifer Eccleston this morning for us. She's in London.

Thanks, Jennifer -- Miles.

M. O'BRIEN: December 7, 1941, a date that lives in infamy. Sixty-five years ago today, on a quiet Sunday morning in Hawaii, the Japanese attacked and the U.S. was suddenly in the middle of World War II.

Tom Fallon was right in the middle of the attack.

(BEGIN VIDEOTAPE)

TOM FALLON, PEARL HARBOR SURVIVOR: KI-0KS (ph) and the Pearl Harbor net.

M. O'BRIEN (voice over): It's Tuesday morning, time for Tom Fallon to raise some old friends on his Ham Radio.

UNIDENTIFIED MALE: KI-0KS (ph) in south central Nebraska...

M. O'BRIEN: Twice a week, these Pearl Harbor survivors touch base, or at least try, when conditions are not ideal.

(on camera): Send them an e-mail. It would be a little easier, wouldn't it? No?

FALLON: You're right. You're right.

M. O'BRIEN (voice over): Not his style. In fact, it was his love of radios that led him to Hawaii on that day of infamy 65 years ago. A life-long employee of RCA, he enlisted in the Naval Reserve to be trained as a radio operator. He was in it for the money.

FALLON: For my big $16 a week, they were making like $25 to $30. I thought to myself, boy, that's what I need, $25 a week.

M. O'BRIEN: But the raise and his sweetheart in New York City would have to wait. That beautiful Sunday morning he was up early and took a small launch across the harbor to attend mass.

FALLON: When we pulled up on the fleet -- on the fleet dock, we saw planes coming over. You know? And at first it just looked like maybe a practice drill, which they occasionally had on a Sunday, right?

But then we saw the torpedoes being dropped. You know? And then had you to look up and saw the rising sun on the wing, you know?

M. O'BRIEN (on camera): Wow.

FALLON: The first word that would come to our head, war.

M. O'BRIEN (voice over): Of course it was. In that stunning surprise attack, the Japanese sunk or damaged 21 U.S. ships and took more than 2,400 lives.

Tom Fallon was fortunate. His ship, the USS Phelps, was a destroyer, and the Japanese aimed primarily for the big battleships. The Phelps steamed out of Pearl Harbor four hours after the attack was over, returning four days later.

FALLON: That's when the real shock, because we hadn't seen all this destruction, you know?

M. O'BRIEN (on camera): Yes.

FALLON: Came back four days later and, wow. It looked terrible.

M. O'BRIEN (voice over): Tom soon transferred to another ship, the USS Detroit. It was there in Tokyo Harbor on September 2, 1945, right beside the battleship Missouri, where the Japanese surrendered. Then it was home to get that raise and marry that girl, to raise five children and eventually dote on eight grandchildren.

An ordinary guy who lived to tell the tale of an extraordinary day when the future changed in an instant.

(on camera): What will your thoughts be on this anniversary? It's been a few years now.

FALLON: Sixty-five years.

M. O'BRIEN: Yes, sir.

FALLON: Until I got so old. You know, after all, if you wait through the years, I mean, I did my duty, you know?

(END VIDEOTAPE)

M. O'BRIEN: Just did his duty.

Well, that's saying it -- understating it a little bit, Tom.

Today Tom Fallon and some of his kids and grandkids will appear at an anniversary commemoration. Organizers of Pearl Harbor reunions say this may be their last anniversary gathering. Most of them now in their 80s and 90s.

We sure owe them all a debt of gratitude.

S. O'BRIEN: Yes. There's not a lot of them left to tell the story over and over again.

M. O'BRIEN: Yes.

S. O'BRIEN: That's a nice story.

M. O'BRIEN: I think he has a few good years left, though.

S. O'BRIEN: Yes, he sure looks like.

M. O'BRIEN: Yes.

S. O'BRIEN: Straight ahead this morning, we're going to be talking to the co-chairmen of the Iraq Study Group. James Baker and Lee Hamilton will join us live. We're going to talk about what they think the White House will do next.

That's up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Welcome back. Let's look at the grid, watch some of the feeds that we are looking at here today.

First of all, incoming 14, that's where Rob Marciano is, Decatur, Illinois, single-digit temperatures. Wind chill a real problem there. Just a few minutes ago, his camera was completely frozen. We couldn't even bring a live shot to you. We'll hear from him in just a little bit.

Incoming 18, that's Gary Nurenberg. That's our news source feed there feeding our local affiliates. We have 800-plus local affiliates. He's getting ready to do a piece from Washington.

Lots going on in Washington today. Capital dome lit up in the predawn darkness there in Washington.

9:35 Eastern Time, the chairmen of that blue ribbon panel, Lee Hamilton and James Baker, will appear before the Senate Armed Services Committee, take their questions about that Iraq Study Group report.

And then at the White House, a little bit later in the morning, British Prime Minister Tony Blair, of course, war-time ally for President Bush, the two of them will huddle and discuss the Iraq Study Group report, of course. And, in general, war strategy, among other things.

Incoming 16, that's NASA. That's one of their -- just one of their slates there right now as they're feeding some material. NASA gearing up for a launch tonight. 9:35 p.m. Eastern Time is the slated launch of Discovery, crew of seven to the International Space Station.

Weather not looking so good. Shuttle's looking good right now, but the weather not so good. Chad Myers at the weather center with that and more.

Hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Miles.

(WEATHER REPORT)

Still to come, New York City's bold strike into the heart of all those flaky pies and crunchy French fries. Should the government be in charge what have we eat? We'll take a look.

And an incredible discovery on Mars that might mean there's life on the Red Planet right now.

That and much more ahead on AMERICAN MORNING.

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M. O'BRIEN: Top stories on the radar this morning.

A meeting between President Bush and British Prime Minister Tony Blair at the White House this morning. Expected to discuss the landmark Iraq Study Group report, of course.

Inside Iraq, 10 U.S. troops are dead after a series of attacks. Thirty American troops killed just this month alone -- Soledad.

S. O'BRIEN: Happening "In America" this morning, federal investigators are looking into the cause of a deadly explosion. It happened at a warehouse in downtown Milwaukee.

Three people were killed, 50 other people were injured. The blast occurred Wednesday morning as employees were being evacuated from a building because of a propane leak. Police say no hazardous materials were released in that explosion.

In Los Angeles, a truck collided with a car, crashed into a home. It left a pregnant woman and two teenagers in critical condition.

Take a look at this videotape here. The truck apparently was stolen, speeding away from another car, a gun was involved. It ran a red light. Through that red light, it hit another vehicle.

The driver of the vehicle was eight months pregnant. Her fetus did not survive. Police believe the whole thing may have been gang- related.

In Sumter, South Carolina, three teenagers decided to play bumper cars with six school buses. You see the damage right there.

The boys, who are age 14, 15 and 17, broke into a bus depot, took the buses on a little demolition derby. They could start the buses because the keys were left inside. The damage, about $60,000. All taxpayer money, of course.

M. O'BRIEN: Great.

It's Grammy nomination day. So if you're in the music biz, you are up early, all a twitter, wondering if you're going to get the nod.

CNN's Brooke Anderson with a preview.

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BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (voice over): Sixty thousand CDs were released during the past year, but now it's time to narrow the field down to the best of the best. "Billboard" magazine's Geoff Mayfield says there are two shoo-ins for album of the year nominations, Bob Dylan's "Modern Times"...

GEOFF MAYFIELD, "BILLBOARD": The academy tends to love him. He had an a album that, you know, it was his first number one in more than 20 years.

ANDERSON: And the Red Hot Chili Peppers' "Stadium Arcadium."

UNIDENTIFIED MALE: When the spirit moves you, you try to be there to let it, you know, do what it wants to do.

ANDERSON: Don't count out Mary J. Blige's triple platinum album "The Breakthrough"...

MARY J. BLIGE, SINGER: I put in a lot of work since 1991, mentally, spiritually and physically. And it's finally -- it's finally paying off for me.

ANDERSON: ... or the Dixie Chicks' controversial disk, "Taking the Long Way."

UNIDENTIFIED FEMALE: Something like the Grammys is always important to us, when I think a lot of other award shows don't hold that kind of weight.

ANDERSON: Other possible contenders, Justin Timberlake's "Future Sex/Love Sounds" and John Mayer's blues (ph) pop offering, "Continuum."

JOHN MAYER, SINGER: I guess the inspiration comes from trying to keep making that one great record.

ANDERSON: Best new artist is a fertile field, with likely nominations for eclectic Gnarls Barkley, folk rocker KT Tunstall, and British soul sensation Corinne Bailey Rae.

But former "American Idol" Carrie Underwood's runaway success in Nashville may work against her. At least in this category...

UNIDENTIFIED MALE: Carrie might get considered in country categories, so we won't necessarily think of her as best new artist.

ANDERSON: Expect to hear some household names when Grammy nominations are announced, as well as a few newcomers who could become the next big thing.

Brooke Anderson, CNN, Hollywood.

(END VIDEOTAPE)

M. O'BRIEN: Grammy nominations will be announced at 11:30 Eastern time this morning. And we'll keep you posted on that.

Top stories ahead.

Plus, we're "Minding Your Business". We'll tell you why you may soon see a lot fewer SUVs for sale.

And later, our holiday travel guide. Today we'll look at dream vacations for the whole family.

Are we there yet? Are we there yet?

Stay with us.

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S. O'BRIEN: More than three and a half years after declaring major combat operations over in Iraq, President Bush is now looking over a sobering bipartisan assessment of the current situation there, and also considering the solutions offered for the Iraqis and the American troops who are fighting there.

The Iraq Study Group report could very well reshape the national debate on the war.

Republican James Baker, Democrat Lee Hamilton co-chaired the group.

Secretary Baker, Congressman Hamilton, nice to see you, gentlemen. Thank you for talking with us.

Good morning.

JAMES BAKER, IRAQ STUDY GROUP CO-CHAIR: Thanks for having us.

S. O'BRIEN: Let's begin with you, Secretary Baker, if I may.

We heard from the defense secretary nominee we're not winning in Iraq. We heard from the president at the end of October we are winning in Iraq.

Your report is dire, saying violence is increasing, the Iraqi government is ineffective, essentially, the U.S. is losing the ability to shape the outcome. "Time is running out." That's a quote. That's how you put it in this report.

Are we winning in Iraq or are we losing in Iraq?

BAKER: Well, this is a very candid assessment of what, in our view, the situation is. It's not -- I don't think you can make a judgment as to whether we're winning or losing, frankly. But I think you can make the judgment that we are in the midst of a war, and that if we don't take some actions here -- we suggest a number of actions, quite frankly, that differ from present policy, and we say that action ought to be taken with respect to these recommendations urgently if we want to achieve success in Iraq.

S. O'BRIEN: You make 79 recommendations, and if I can kind of put them in a nutshell, if you don't mind, essentially you say what's required is a massive change in course.

Here's what the president said just last week when some details of the report were first being leaked. Listen, if you will.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I know there's a lot of speculation that these reports in Washington mean there's going to be some kind of graceful exit out of Iraq. We're going to stay in Iraq to get the job done.

(END VIDEO CLIP)

S. O'BRIEN: "We're going to stay in Iraq to get the job done," is what he says. It sounds almost, gentlemen, like he's contradicting what this report says.

What do you make of that, Congressman Hamilton?

LEE HAMILTON, IRAQ STUDY GROUP CO-CHAIR: I'm sorry, I missed the question because of the ear piece. But I think the president's observations were before he received our report.

What we are seeking here is to wind down the combat capabilities of the United States government while still protecting our national interests. And we want to turn over quickly, urgently, the combat responsibilities more and more to the Iraqi government.

I don't think there is any such thing as a graceful exit in this situation. And the president is absolutely right about that.

We agree with the president's goal here to sustain and defend -- a government that can sustain and defend itself. We think that's still achievable.

It won't be easy. It's a daunting challenge. A lot of things have to work right. But it is doable with skill and prompt implementation.

BAKER: Soledad, let me add that we don't suggest a graceful exit in this report, and there's nothing in this report that is inconsistent with getting the job done. In fact, the report moves toward actions that would permit us to get the job done.

S. O'BRIEN: But there's certainly things in this report that are inconsistent with what we've heard from the White House and the administration. Not only in just the past days, but in the past years as well.

For example, in the report, you call for major, major changes on the diplomatic front, specifically page 50, engaging Iran, engaging Syria. And yet we have no diplomatic relationship right now with Iran. We have an ambassador in Syria who's been pulled out of that country.

What are -- what's the -- what are the consequences if, in fact, the administration does not reverse their position on that right now? What's the fallout going to be?

BAKER: Well, we make the recommendation because we think it would help the situation. And we know it would help the situation in terms of the broader -- problems in the broader Middle East.

Now, be careful that you understand here what we are and are not suggesting with respect to Iran. We are not suggesting broad-based one-on-one discussions with Iran about every subject we have between us. In fact, we say that the nuclear problems should be left in the United Nations Security Council.

All we're suggesting with respect to Iran is that they do what they did with us, pursuant to our discussions with them in Afghanistan. And we think they ought to do the same thing in Iraq. They will probably say no. If they do, fine, the world will see their rejectionist attitude.

S. O'BRIEN: You make it very clear in this report, gentlemen, that you would like to see all 79 recommendations implemented fully. The president has said he's waiting to hear still from the Joint Chiefs report. He's still waiting to hear from the National Security Council, and that they're going to kind of pull together -- I'm quoting the -- his spokesman -- pull together something from that.

What would be the fallout if he does not take your report, implements 25 of these recommendations, or 62 of the recommendations, not all 79, as you make clear you'd like to see?

HAMILTON: Well, we're not the source of all wisdom on Iraq. There will be a lot of other good suggestions, I'm sure, coming to the president, and he'll have to evaluate it.

I think our principal point here is that, whatever you do with regard to Iraq you have to do comprehensively.

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