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AMERICAN MORNING

The Fight For Iraq; Iraq Defense Strategy; Carter On Iraq; Pastor Sex Scandal; Iraq Security; Minding Your Business

Aired December 13, 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: Relevant (ph) story. Saudi Arabia threatening to back the bloody insurgency in Iraq if the U.S. pulls out. A new problem for the president as he heads to the Pentagon this morning for a big meeting.
SOLEDAD O'BRIEN, CNN ANCHOR: Urgent search. Three climbers are still stranded in Oregon. The weather and a cell phone signal could decide their fate today.

M. O'BRIEN: Sex scandal. Another evangelical church in Colorado stunned. Its minister resigning after confessed he's gay.

S. O'BRIEN: And money fight. The Bush administration resisting a plan to help the blind by redesigning paper money. Those stories and much more ahead on this AMERICAN MORNING.

Welcome, everybody. It is Wednesday, December 13th. I'm Soledad O'Brien.

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

S. O'BRIEN: Here's what's happening this morning.

New in Iraq. Five deadly car bombs in Baghdad overnight and again one explodes as Shiite day laborers' wait in line for work. Ten people killed, 26 wounded in that attack. "The New York Times" also reporting that Iraq's prime minister has a plan to put Iraqi troops in charge of security in Baghdad. The paper also says Saudi Arabia might back the insurgency if the U.S. pulls out of Iraq.

President Bush is heading to the Pentagon this afternoon at 1:00 p.m. Eastern Time. He's going to be meeting with senior defense officials. An update on what's happening in Baghdad now. Let's get right to CNN's Cal Perry. He's in Baghdad.

Good morning, Cal.

CAL PERRY, CNN CORRESPONDENT: And good morning to you, Soledad.

More insurgent attacks today. Three significant ones to tell you about. The first in eastern Baghdad. At about 9:00 a.m., we understand, a car bomb exploding in a market place there. Ten people killed, 26 others wounded.

Two hours after that attack, up in the north, in the oil rich city of Kirkuk, in fact, Iraq army troops that are there protecting the oil infrastructure were hit. Seven Iraq army soldiers killed there, 10 others wounded.

And then just about an hour ago, back in Baghdad, two simultaneous car bombs exploded. At least five people killed, another 10 wounded. And that, Soledad, as the capital is still reeling from yesterday's attack in which 71 people were killed. Funerals have began. They're dealing yet with more insurgent attacks here in Baghdad.

S. O'BRIEN: Cal, let me ask you about this report in "The New York Times" that the Iraqi troops could play a bigger role in securing Baghdad, which would mean that U.S. troops could be more in the suburbs of Baghdad. What do you know about that?

PERRY: Well this is, of course, everybody's home. And we've spoken to the U.S. military here in Iraq this morning. They will not comment on this new report. What they have told us is that they have always planned to accelerate their hand over to Iraqi security forces sometime mid summer, early fall.

The concern here on the ground amongst American troops, amongst Iraqi politicians and, of course, amongst the Iraqi population, is that the history of these security forces have not proven to be very good. We do know Operation Together Forward, which wrapped up about three months ago, was a failure. Some 50,000 Iraqi troops on the streets. U.S. military telling CNN, attacks increased over time.

And for Iraqi people. there's a serious distrust among Iraqi security forces. They believe that many of these security forces have been infiltrated by militias. This is the major concern here on the ground. We heard from people across the capital that, in fact, there is a conscription going on that people are being asked to stand guard in their neighborhoods. For a U.S. troop who's patrolling through the streets of Baghdad, somebody holding a gun is very hard to tell whether they're a civilian protecting their house or militia. So there's a lot of concern here about this plan.

Soledad.

S. O'BRIEN: Cal Perry for us this morning in Baghdad. He's our Baghdad bureau chief.

Thank you, Cal.

Miles.

M. O'BRIEN: The Saudi threat to support Sunni insurgents in Iraq. Just the latest wrinkle the president must contend with as he gropes for a new strategy in Iraq. He will seek out more opinions today. This time at the Pentagon. But once again, he will find no easy answers there. Jamie McIntyre with more.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT, (voice over): Following a secure video conference with top commanders, outgoing Defense Secretary Donald Rumsfeld leaves the White House with Robert Gates, the man who next week officially inherits the Iraq problem. That Gates needs more time to consider the options is one reason given by the White House for putting off a decision on a course correction until January.

President Bush is getting a lot of conflicting advice. One of the military commanders on the conference hookup from Iraq was Lieutenant General Peter Chiarelli, who just before joining the call told reporters in Baghdad more military force is not the answer.

LT. GEN. PETER CHIARELLI, COMMANDER, MULTINATIONAL FORCE-IRAQ: And I know everybody wants us to charge on out there and make everything OK. But you cannot if you don't get these other things moving. And I don't know why it's so hard to get people to understand that.

MCINTYRE: But some of the experts who met with the president just a day before suggested one last major show of U.S. force could possibly stop the violence long enough for a political settlement to take hold, even as they conceded that was a long shot. When Mr. Bush comes to the Pentagon, he'll likely get another list of pros and cons, not a clear-cut recommendation. At least that's the sense of CNN's Don Shepperd, who is among the small group of military analysts who met privately with Rumsfeld and Joint Chief's chairman, General Peter Pace, in advance of the powwow with the president.

MAJ. GEN. DON SHEPPERD (RET), CNN MILITARY ANALYST: I think he's going to hear a whole bunch of options, no solutions, no big plan by the military ti say this is what we need to do.

MCINTYRE: As for the much discussed option of surging more troops into Baghdad as a stop-gap measure, few experts think that will work.

JAMES CARAFANO, HERITAGE FOUNDATION: Even if you throw 20,000 troops in there and they temporarily put the violence down, what's going to happen is those guys are going go to ground and as soon as those 20,000 troops leave, they'll just pop back up.

MCINTYRE: U.S. military commanders are fond of saying that failure is not an option in Iraq. But at least some of the independent experts advising President Bush say failure is the most likely outcome, no matter what the president eventually decides to do.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

M. O'BRIEN: At the Pentagon this morning, the president will also no doubt hear how stretched the military is. The Army and Marines poised to ask incoming Defense Secretary Robert Gates for a big increase in the active duty ranks. "The Washington Post" says the Army would like 512,000 soldiers, 5,000 more than it currently has. The Marines, with 180,000 in its ranks, also will seek several thousand more. Right now there are 140,000 Marines and soldiers in Iraq, another 20,000 in Afghanistan. S. O'BRIEN: As President Bush continues to go around asking a wide range of experts for advice on what to do about Iraq, others are weighing in. For example, former President Jimmy Carter, who did not support the war. He does, however, say he supports the findings of the Iraq Study Group. We had a chance to sit down with the former president. Here's what he said.

(BEGIN VIDEOTAPE)

S. O'BRIEN: A way forward. We're heard that a lot. If you were advising, if you were one of the many people now advising the president, what advice would you give him about what the way forward should be right now. Now I know you didn't support the war, but now that the United States is there, and remains there, what advice would you give?

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: I would give him approximately the same advice that he got from the Hamilton- Baker committee. I think it's sound and balanced and I hope that President Bush will consider it very closely. And I accept as much of it as possible. This was a carefully considered advice based on visits, as you know, to Iraq. It was bipartisan. These are very distinguished people. This committee was set up by the Congress and President Bush approved the establishment of the committee. So to summarize, I think that their recommendations are of the soundest that we can have at this moment and I hope that they will be adopted.

S. O'BRIEN: We know very clearly, the president said, what the report says about talking to Iran, bringing Iran into the discussion, bring Syrian into the discussion. He's made it very clear that he's not on board with that. Do you think he's wrong about that?

CARTER: Well, he's a commander in chief. And if I were president, I would consider the recommendations of a congressional established committee. I would give it my closest attention and I would accept those portions with which I agreed. I would reject the others. So President Bush has absolutely, total legal authority and I think political authority to choose what he wishes.

(END VIDEOTAPE)

S. O'BRIEN: We're going to have much more of my interview with President Carter. That's coming up at 7:15 a.m. Eastern Time. Including his response to some of the criticism about his new book.

Happening in America this morning.

In Oregon, more snows and high winds are expected today. It's going to hamper the search for those three climbers in Mount Hood, which is Oregon's highest peek. Kelly James, Brian Hall, and Jerry Cooke were last heard from on Sunday when James used his cell phone to say that the group was in trouble.

In Minnesota, 14 apparent E. Coli cases now linked to two Taco John's restaurants. One in Albert Lea, the other in Austin. Taco John confirms that the two restaurants got their produce from the same supplier as the Taco John's in Iowa. About 40 people there are complaining of E. Coli symptoms after they ate there.

Meanwhile, green onions probably did not cause the Taco Bell E. Coli outbreak. More than 60 people ill over seven states. A Center for Disease Control analysis now says onions of any type are probably not linked to this outbreak. And this comes a day after the Food & Drug Administration said it wasn't ruling out any food as the source of the outbreak. Taco Bell pulled green onions from all of its stores. Originally they thought that they might be the E. Coli source.

In Texas, the former Enron CEO, Jeff Skilling, is expected to report to prison today to start serving his 24 year sentence. He lost his bid to stay out on bail while he appealed his conspiracy and fraud and insider trading conviction. The appeals court judge says Skilling's appeal, "raises no substantial question that likely will result in the reversal of convictions." In other words, probably doesn't have a chance.

Less than two hours from now, in Washington, D.C., an FDA panel is going to hold a hearing on the possible link between anti- depressants and suicide in adults. The FDA is considering whether to put stronger warning labels on those drugs.

Also in Washington, the Bush administration is appealing a ruling that U.S. currency be redesigned in order to help the blind tell the difference between bills of different values. The Justice Department says there are already devices available to help the blind. The Justice Department is also arguing that it would cost too much and hurt the vending machine industry if, in fact, those changes went into place.

M. O'BRIEN: In Colorado this morning, another conservative preacher stepping down after being outed. The Reverend Paul Barnes, married with grown children, resigning as pastor of a mega church near Denver. Barnes admitting to sexual encounters with men. It's an echo of the Ted Haggard story. The Colorado preacher who crusaded against gay marriage, forced to step down just before the election. Ginger Delgado of our affiliate KUSA with the story.

(BEGIN VIDEOTAPE)

GINGER DELGADO, CNN CORRESPONDENT, (voice over): It's one of the Denver area's largest evangelical churches. Grace Chapel, which sits just off I-25 in Douglas County, has 121 members and a pastor who's been there for 28 years. But Sunday morning, everything changed at Grace Chapel when Pastor Paul Barnes resigned during a videotaped message, where he admitted to having sexual relations with other men.

The church did not allow Nine News to view the videotape, but our partners at "The Denver Post" did. Barnes told church members, "I have struggled with homosexuality since I was a five-year-old boy. I can't tell you the number of nights I cried myself to sleep, begging God to take this away."

CRAIG WILLIFORD, PRESIDENT, DENVER SEMINARY: We are called to redemption. We are called to reconciliation. We are called to help people find healing.

DELGADO: Craig Williford is the president of Denver Seminary.

WILLIFORD: It could be argued that for every pastor who step out and confess, there are dozens who have been faithful all the way to the end and have lived their lives faithfully to the end. Yet we can't hide behind that. We have to step forward and be truthful and say that the gospel is for people who are broken.

DELGADO: The announcement by Barnes came just after one month after the Reverend Ted Haggard was fired from New Life Church in Colorado Springs after he, too, admitted to sex with another man. Just days after the Haggard scandal, Pastor Barnes preached a message about integrity, sin, and grace.

"You know, I've honestly wondered over the last number of years, what cause more damage to a society: the two to three percent of the people in a society that are gay or the 50 percent of people in society who have been married and divorced and remarried and the kids -- the poor kids are experiencing all of the ramifications that all that garbage involves?"

(END VIDEOTAPE)

M. O'BRIEN: Ginger Delgado of our affiliate KUSA with that report.

Soledad.

S. O'BRIEN: Ahead this morning, a quick check of the forecast for you. Chad's watching that. We'll tell you what you need to know before you head out the door.

And the shuttle Discovery gets a thorough inspection. We'll tell you whether the crew is going to get a chance to come home as scheduled, straight ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody.

Two developing stories we're following for you this morning. "The New York Times" reporting that Saudi Arabia says they might back the insurgency if the U.S. pulls out of Iraq.

And thousands of firefighters are still trying to douse those brush fires in southern Australia right now. You can see from the pictures, the flames have already burned an area four times the size of New York City.

M. O'BRIEN: It is about quarter past the hour. Let's check in with Chad Myers, see how the forecast looks.

Hello, Chad.

(WEATHER REPORT) M. O'BRIEN: Space shuttle Discovery is cleared for landing. NASA engineers giving the orbiter a clean bill of health after experiencing images like this of some dings in the heat-resistant tiles on Discovery's belly. The dings are superficial and pose now risk to the crew.

Also the left wing is good to go as well. Sensors recorded a small hit by a micro meteor after launch but there's no damage. Astronauts yesterday conducted the first of three space walks for this mission. They successfully installed a two-ton girder on one end of the Space Station.

Soledad.

S. O'BRIEN: The new plan from Iraq could mean some changes for the role of American troops in Baghdad. "The New York Times" is reporting that Iraq has a proposal, a plan, that would call for Iraqi troops to run central Baghdad's security with American troops shifted to the periphery of the capital city. All this would happen early next year. Iraq's national security adviser is Mouwafak al-Rubaie and he joins us by phone from Baghdad this morning.

Mr. al-Rubaie, thank you for talking with us.

You presented this plan just a couple of weeks go now, and essentially it would mean that the U.S. troops would be moved out of central Baghdad, the Iraqi troops would come in. Many people have said, are the numbers there? Can Iraqi troops even do this? I mean you look at the lack of equipment, the lack of loyalty, the lack of pay, the lack of sheer numbers. How possibly could Iraqi troops be ready to do this?

AL-RUBAIE: The idea is for the Iraqi security forces in Baghdad to assume more responsibilities and to be in the lead and for the coalition forces to be behind, supporting, and providing logistical support, intelligence support and that they are embedded within the Iraqi security forces to make sure that they're doing the job properly. And we need to be able to be given a chance of proving ourselves. Even if we make mistakes, this is going to be a Iraqi mistake and we will learn from our mistakes.

We will develop what I call a dependency syndrome on coalition forever and ever, ever. So I believe it is the time now. And I can tell you the commander on the ground and the political leaders, they're all in agreement of this. And we have a huge potential, political parties supporting this move, the council of representatives, as well, forcing this move up.

Iraqis assuming more responsibility, assuming the authority of having Baghdad and the -- the coalition itself to stay in support of the Iraqi security forces. And we can redeploy or deploy more troops from outside Baghdad to take responsibility. We believe that we can do a better job because we know Baghdad very well.

S. O'BRIEN: Many, many questions. But the first one that comes to mind, of course, is the criticism that for the Iraqi forces to bring down the sectarian violence that's happening inside of Baghdad -- in fact, those forces would make it worse. I mean by nature make it worse. I think the speaker of the parliament is quoted as saying, Americans are not so stupid as to do that, leave, you know, leave out of Baghdad. The city would be a safe place for the militias. That the sectarian violence would only get worse because, of course, the majority of the government forces are Shiites. You don't agree with that?

AL-RUBAIE: I certainly do not (INAUDIBLE) on a sectarian basis. On the loyalty to Iraq and the loyalty to the new Iraq and democracy and constitutions. So I certainly do not agree on that.

And this is an (INAUDIBLE) some people wanted to keep the foreign troops in the country. And I don't think this is going to be the case. And I don't believe the Iraqis will accept this. We believe that we have to be given a chance and we have done a lot of work on the training, equipment, and arming, and we have agreed with the coalition and with President Bush on accelerating assuming the authority and responsibility on our land. And I think he was very, very happy with our, if you like, plan on taking more responsibility in Baghdad and Iraq at large.

S. O'BRIEN: Iraq's national security adviser is Mouwafak al- Rubaie.

Thank you for talking with us.

Miles.

M. O'BRIEN: Coming up, more talk of mergers between airlines. This time it's United and Continental. Ali Velshi is "Minding Your Business."

And will they or won't they. Larry King asks Angelina Jolie if she's planning a winter wedding with Brad Pitt. You don't want to miss her answer.

And a showdown between a daredevil and a rapper. Evel Knievel takes on Kanye West ahead.

(COMMERCIAL BREAK)

M. O'BRIEN: Happening this morning.

President Bush meeting with Pentagon advisers to discuss America's future in Iraq.

And Taco Bell reopening more restaurants in the Northeast today despite new tests showing green onions did not trigger that E. Coli outbreak. The sort of the contamination remains a mystery.

S. O'BRIEN: The actress Angelina Jolie is a good will ambassador for the United Nations. She donates big money to charity. We all know that. But what do fans really want to know? CNN's own Larry King got to ask the burning question of Angelina Jolie. Listen.

(BEGIN VIDEO CLIP)

LARRY KING, CNN'S "LARRY KING LIVE": By the way, someone called me today, are you going to get married? It's just as interesting to know. I wish you lots of luck. Someone said that you're planning a Christmas wedding in South Africa.

ANGELINA JOLIE: Who -- no.

UNIDENTIFIED MALE: You just blew it.

KING: You destroyed me here.

JOLIE: Thank for your support if I was, but I'm not.

KING: You're not getting married in Christmas in -- no.

(END VIDEO CLIP)

S. O'BRIEN: I love her response. She's like, ah, what, more of the wedding questions? Can't we go back to talking about my movie. Angelina Jolie and Robert DeNiro and Matt Damon were talking with Larry King, in fact, about their new movie. It's called "The Good Shepherd." Also talking about other things as well. The full interview airs on Monday night on "Larry King Live." He was devastated. Angelina Jolie . . .

M. O'BRIEN: I thought he had it. He thought he had the story right there.

S. O'BRIEN: Yes. Yes. I like that he asked it very off the cuff like maybe he'd, you know . . .

M. O'BRIEN: Maybe he could slid it in.

S. O'BRIEN: She'd make a mistake and says, why yes, oh, we shouldn't have said anything.

M. O'BRIEN: Well, speaking of potential mergers, talks among airlines now. Not quite as glamorous as Brangelina, but Ali Velshi is here with more on that.

Hello, Ali.

ALI VELSHI: Equally evasive, though. I can't get a better answer out of the airlines.

You know, we were talking a while ago about U.S. Air making a move for Delta when it comes out of bankruptcy. Delta said get lost. But what it did is it created this talk of merger in the airline industry and now we have reports that UAL, the parent of United Airlines, is interested in talking to Continental.

Now neither airline was -- they refused to confirm to us or Larry King that, in fact, they were in talks about this thing. There's also news that AirTran, which operates out of Florida and Atlanta, is looking at buying Midwest Airways. So there's a lot of activity in the airline industry. I'm going to come back in about an hour and tell you what that means to you.

Now what we told you about yesterday morning was that Jeff Skilling, the former CEO of Enron, was supported to report to prison in Minnesota. Yesterday he got an extension on that while he worked out his appeal. He was going to be on bail for that time but then an appellate court judge wrote yesterday that Skilling raises no substantial question that is likely to result in the reversal of his conviction and ordered him to jail immediately. So we'll keep up to date on where he ends up reporting, but it looks like he is going to start his 24-year sentence very quickly.

And yesterday we had that Fed decision. Remember it was Fed day. The Fed, once again, as expected, decided to keep rates unchanged, 5.25 percent was the number. Stocks were down as a result. The Dow was down about 12 points, although it was down a lot more before the Fed decision -- 12,315. For those of you who have loans that are tided to the prime rate, the prime rate remains at 8.25 percent.

M. O'BRIEN: So the market expected the interest rate to go down?

VELSHI: No, they kind of expected it to be where it was. They were just down because they were down.

M. O'BRIEN: Just down.

VELSHI: Yes. Nothing to worry about.

M. O'BRIEN: All right. Thank you, Ali.

VELSHI: See you in a while.

M. O'BRIEN: Evel Knievel is in the news. Not for a death- defying stunt. He is suing the rapper Kanye West over a music video. In the video "Touch the Sky," West suits up like a Knievel-like daredevil, tries to jump over a canyon in a rocket. Knievel clams the video infringes on his trademark name and likeness. West does call himself Evil Kanye Evil or something like that. Knievel also says that the video has vulgar and offensive images that are hurting his reputation. That impeccable Evel Knievel reputation.

S. O'BRIEN: It will be interesting to see where that goes.

M. O'BRIEN: Yes, it will. We'll watch it for you.

S. O'BRIEN: Ahead this morning, rescuers are battling some high winds, blowing snow, and time, as well, of course, as they search for those three missing climbers who are trapped on Mount Hood. We'll give you an update on the rescuers' dangerous mission straight ahead.

Plus, a high school tradition becomes history in Massachusetts. We'll tell you why one school is laying down the honor roll. You're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Cause for concern. Saudi Arabia threatening to black the bloody insurgency in Iraq if the U.S. leaves. A new challenge for President Bush as he talks Iraq strategy at the Pentagon this morning.

S. O'BRIEN: Dangerous conditions making it impossible to get to three climbers who remain stranded on Mount Hood in Oregon right now. Bad weather is preventing their rescue.

M. O'BRIEN: And a money fight. Why the White House is fighting a plan to help the blind by redesigning paper money.

Coming up on this AMERICAN MORNING.

S. O'BRIEN: Welcome back, everybody. It's Wednesday, December 13th.

I'm Soledad O'Brien.

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

Thanks for being with us.

S. O'BRIEN: Here's what's new in Iraq this morning.

Five deadly car bombs overnight and, again, attacks in Baghdad as Shiite day laborers wait in line for work. At least 15 people were killed in those attacks.

"The New York Times" is reporting that Iraq's prime minister has a plan to put Iraqi troops in charge of security in Baghdad. The paper's also reporting that Saudi Arabia might back the insurgency if the U.S. pulls out of Iraq.

And President Bush heads to the Pentagon this afternoon. That's going to happen at 1:00 p.m. Eastern Time. He's going to be meeting with senior defense officials.

Let's begin in Baghdad this morning. CNN's Cal Perry is standing by in the Iraqi capital for us.

Good morning again, Cal.

CAL PERRY, CNN BAGHDAD BUREAU CHIEF: And good morning to you again, Soledad.

There have been three significant attacks across the country today to tell you about. It all started very early this morning at about 9:00 a.m. in eastern Baghdad. The target, a marketplace.

As you mentioned, Shia workers there queuing up day laborers. At least 10 people killed there, some 26 others wounded.

Now, to the north, about two hours after that attack, in the oil rich city of Kirkuk, Iraqi army members who are there to protect Iraq's oil infrastructure, obviously very important economically here in the country, seven Iraqi army soldiers killed there by two simultaneous truck bombs.

And then back in Baghdad about two hours after that attack, we understand that a car bomb exploded at a market, five people killed, another 10 wounded. All of this in the shadow of what was a very, very bloody attack yesterday. Seventy-one people killed.

Those funerals have begun today as people are dealing with yet more insurgent attacks -- Soledad.

S. O'BRIEN: Baghdad bureau chief Cal Perry for us this morning.

Thank you, Cal.

And more complications for the U.S. strategy in Iraq. Today's "New York Times" reports that Saudi Arabia is threatening to back the Sunni insurgency if the U.S., in fact, pulls its troops out of Iraqi.

Nic Robertson takes a look at why the Saudis might be taking this position.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: For the Saudi royal family, they look, as do other Sunni regimes in this region -- Jordan is another example -- they look at the growing influence and power in the region now of Iran. They look at the United States' weakening influence at the region in the moment, and they realize that there's a new power balance developing here and it's not in their favor.

For the Saudis, the Shias who live in Saudi Arabia, live in the east over the oilfields. The Saudis are very sensitive to the fact that if Iran becomes more powerful it could try and perhaps destabilize Saudi Arabia, that the events in Iraq could blow back and damage Saudi Arabia as well. So there -- so there's a number of concerns, but these are broad regional concerns within Sunni regimes around Iraq at the moment.

(END VIDEOTAPE)

M. O'BRIEN: That was Nic Robertson in Baghdad.

The president headed to the Pentagon today as he continues pondering a new strategy in Iraq. But the advice from the brass there apparently will come with a plea for more troops.

"The Washington Post" reporting the Army and Marines are poised to ask the incoming defense secretary, Robert Gates, for thousands of new active-duty troops. So even if the president decides more troops in Iraq are the answer, can the Pentagon deliver?

AMERICAN MORNING'S Bob Franken in Washington with more.

Bob, good morning. BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning.

And the short answer to your question, Miles, is yes, the Pentagon can deliver. However, a report that the Department of Defense commissioned had a chapter called "The Thin Green Line." It's fueled arguments that maybe the U.S. military is overextended.

The numbers tell the interesting story. If you look at the number of troops currently in Iraq -- and I'm talking about ground troops, which is really fundamental to all this -- 135,000 approximately, another 22,000 in Afghanistan. As you can see, the Reserve and National Guard components in those two theaters make up about 20,000.

So, the question is where would the troops come from? And the answer is that the Pentagon would probably rob Peter to pay Paul, or at least borrow from Peter to pay Paul.

If you look at where U.S. active duty troops -- again, Army and Marine units -- are deployed, you see in Europe, 55,000; Asia, 39,000, largely in Korea. And in the United States' territories, including, of course, the U.S., 400,000. You have, however, troops that have been going in and out of Iraq and the other combat zones. They need a tremendous amount of time to regroup. You have people who leave these units when they leave.

It leaves one other question. If they don't get the number of troops they need, will there be a draft? Of course, that's being proposed, Miles, but I wouldn't hold my breath for a draft.

M. O'BRIEN: So the Pentagon, they spend a lot of time, Bob, thinking about what ifs. And if something else crops up somewhere else in the world requiring troops, what happens then?

FRANKEN: Well, the Pentagon insists that it could fight another war. But a lot of people are very, very nervous about that.

M. O'BRIEN: Bob Franken in Washington.

Thank you -- Soledad.

S. O'BRIEN: Well, former president Jimmy Carter is out with a new book. It's his 21st book. And it's called "Palestine: Peace Not Apartheid." Well, as you can imagine from the title, the book is controversial. Some people say it's anti-Semitic and shameful. That's a couple of the harsh reviews.

I had a chance to sit down for an interview with the former president as he defended both the book and answered his critics.

(BEGIN VIDEO CLIP)

JAMES CARTER, FMR. PRESIDENT OF THE UNITED STATES: The book is about Palestine, and most of those reviews are referring to Israel. The book is not about Israel. I recognize that Israel is a wonderful democracy with freedom of speech and equality of treatment under the law between Arab Israelis and Jewish Israelis, but the outcry about the book is misplaced, in my opinion.

(END VIDEO CLIP)

S. O'BRIEN: My full interview with President Jimmy Carter is coming up at 7:15 a.m. Eastern Time -- Mile.

M. O'BRIEN: "In America" this morning, Oregon, more snow and high winds expected today, hampering the search for three climbers on Mount Hood, Oregon's highest peak. Kelly James and Brian Hall from Dallas, Jerry Cook of New York last heard from on Sunday when James used his cell phone to say the group was in trouble.

In Minnesota, 14 E. coli cases now linked to two Taco John's restaurants. Taco John's confirms the two restaurants got their produce from the same supplier as the Iowa Taco John's. About 40 people complaining of E. coli symptoms after eating there.

Meanwhile, green onions apparently not the Taco Bell E. coli outbreak source. More than 60 people ill in seven states as a result of the Taco Bell issues. In fact, government health investigators say onions of any type are probably not linked to the outbreak. Taco Bell stopped serving green onions, blaming them as the E. coli source.

In Washington, the Bush administration appealing a ruling that the U.S. currency be redesigned to help the blind tell the difference between bills of different values. The Justice Department says there are already devices available to help the blind. It also argues such change would cost too much and hurt the vending machine industry.

In Massachusetts now, the honor roll will be kept quiet at Needham High. Instead of publishing the honor roll in the local paper, the school will now give students personal letters of congratulations. The school's principal says this is to reduce stress brought on by anxiety over grades. The move comes as the town copes with a string of tragedies in the past two years, including four student suicides and a car crash that kill two seniors last month -- Soledad.

S. O'BRIEN: Ahead this morning, we're going to get a quick check of the forecast. Chad's got a look at what you need to know before you head out the door.

And then you have a look at Nicole Richie and Mel Gibson and Michael Richards and Lindsey Lohan.

Miles, what do they all have in common?

M. O'BRIEN: They're all people that won't invite me to a party.

S. O'BRIEN: They're all people whose PR flacks have been working overtime to try to clean up the mess in the wake of them.

This morning we'll take a look at celebrity slip-ups and PR relation nightmares that often follow.

That's straight ahead.

(COMMERCIAL BREAK)

M. O'BRIEN: A report out this morning says Saudi Arabia is now threatening to give money to Sunni insurgent groups in Iraq if the U.S. troops leave.

And growing dissatisfaction with the Iraq war does not appear to be hurting military recruiting. The Navy and Air Force met their recruiting goals last month. The Army and Marines exceeded theirs -- Soledad.

S. O'BRIEN: Nicole Richie's arrest for drives the wrong way on a freeway while under the influence, allegedly, is just the latest in a string of highly-publicized screw-ups by celebrities. But as CNN's Brooke Anderson reports today, redemption and forgiveness are likely just around the corner.

(BEGIN VIDEOTAPE)

OPERATOR: 911 Emergency, what are you reporting?

CALLER: A car on the wrong side of the freeway.

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (voice over): Celebutante Nicole Richie's car allegedly heading in the wrong direction. According to some, the same could be said of her life.

HOWARD BRAGMAN, FOUNDER, FIFTEENMINUTES.COM: I mean, this girl's got problems, and it needs to end right now.

ANDERSON: "The Simple Life" star told authorities she took Vicodin and smoked pot. The result, a DUI charge and public embarrassment.

(on camera): How bad is it, Howard?

BRAGMAN: It's bad.

ANDERSON (voice over): Publicists like Howard Bragman help celebrities handle PR nightmares, the kind experienced in recent months by Mel Gibson, Michael Richards, Rip Torn, Lindsay Lohan and others.

Gibson followed his DUI arrest and anti-Semitic outburst with a round of apologies.

MICHAEL RICHARDS, ACTOR: Personal work. Deep personal work.

ANDERSON: Michael Richards is trying to rebound from a racist tirade by going on an apology tour of his own.

Danny DeVito followed his tipsy appearance on "The View" with an apology to Barbara Walters. And Lohan, who has been criticized for hard partying, just announced she's been sober for a week.

Bragman says before the 85-pound Richie can repair her public image, she needs to do some personal work.

BRAGMAN: Forget PR at this point. If you don't fix where she's at with her addictions and her physical issues, you're never going to change what the perception of her is.

ANDERSON: These days, celebrities who cross the line often find their behavior has been captured on tape.

RICHARDS: He's a (EXPLETIVE DELETED)! He's a (EXPLETIVE DELETED)!

ANDERSON: Richards rant was caught on a cell phone camera. Richie's arrest was recorded by surveillance cameras at a television station.

BRAGMAN: I always tell my clients that there's no line between public and private anymore.

ANDERSON: The good news for Richie and other celebs with a PR problem, there's hope for a new beginning.

Gibson's movie "Apocalypto" just opened on top of the box office. Lohan's getting raves for her work in the film "Bobby."

BRADLEY JACOBS, "US WEEKLY": The public will always -- no matter how sort of far you've fallen, the public will give you another chance.

ANDERSON: Brooke Anderson, CNN, Hollywood.

(END VIDEOTAPE)

M. O'BRIEN: We do love a comeback in this country, don't we?

S. O'BRIEN: Yes, we do.

M. O'BRIEN: Yes.

S. O'BRIEN: After the personal work, then it's the book tour.

M. O'BRIEN: The book tour.

S. O'BRIEN: You know -- confession.

M. O'BRIEN: I think it's all part of the plan.

S. O'BRIEN: Yes.

M. O'BRIEN: I hate to be cynical about that.

Chad Myers in the weather center. With that, he's planning his book tour, but first he's got to work on his addiction. So...

CHAD MYERS, CNN METEOROLOGIST: Talk about comebacks. I mean, you've got Rambo 7, now you've got Rocky 14. I mean, they're all coming back.

M. O'BRIEN: And he's 60-some-odd years old and he's doing "Rocky".

MYERS: But he looks good.

M. O'BRIEN: Yes.

MYERS: Good morning, everybody.

(WEATHER REPORT)

Coming up, we're going to go to the news wall, look at some of the stories streaming into CNN even as we speak.

Plus, the frantic search for a serial killer in the English countryside. The murderer's targets ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Welcome back. Let's look at the feeds, see what news we are following here at CNN.

Lower left of your screen, incoming 18, those fires in Australia. Thousands of firefighters on the fire lines, 18 homes destroyed. Tasmania is an area that is really being hard hit -- 1,480 square miles hard hit by the fire.

You saw that satellite image that Chad showed us earlier from NASA. The smoke plume is tremendous.

Let's go up to incoming 12, NASA. This is a replay of the spacewalk yesterday, successful. First of three spacewalks on this mission.

The spacewalkers successfully attached a two-ton girder at the International Space Station. The shuttle, by the way, cleared for landing. A couple of dings in the heat-resistant tiles turned out to be superficial.

This is Baghdad, incoming 85. General William Caldwell will be briefing reporters shortly, part of his routine briefings. We'll be listening to that very carefully to see what's new out of Baghdad.

And meanwhile, over here in Washington, believe it or not that's the White House enshrouded in fog. The president trying to sort through the fog of war today, heading over to the Pentagon to hear from military leaders, once again trying to forge a new strategy for Iraq -- Soledad.

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

JOHN VAUSE, CNN CORRESPONDENT: I'm John Vause in Beijing.

The most high-level U.S. delegation ever to come here is warning that China is putting the global economy at risk. Seven cabinet members led by treasury secretary Henry Paulson and joined by Fed chairman Ben Bernanke will hold two days of talks officially called the Strategic Economic Dialogue. Unofficially, it's all about changing the way China does business to try and reduce the massive U.S. trade deficit with China, likely to top $200 billion again this year.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ALPHONSO VAN MARSH, CNN CORRESPONDENT: I'm Alphonso Van Mash in Ipswich, England, where there are growing fears that a possible serial killer is targeting young prostitutes in the area. Five bodies found since the beginning of the month, all women, all naked, and putting this north coast community on edge.

(END VIDEOTAPE)

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: Coming up, deep discounts by Wal-Mart hit one of its competitors where it hurts. Ali Velshi has that, "Minding Your Business."

Plus, more of our interview with former president Jimmy Carter. His new book about Palestine has gotten some scathing reviews amid accusations it's anti-Semitic.

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: New this morning, Saudi Arabia threatening it might give money to the Sunni insurgent groups in Iraq if U.S. troops leave. That's according to "The New York Times" this morning.

And Taco Bell reopened more restaurants in the Northeast today. New tests show green onions did not trigger the E. coli outbreak, and the source of the contamination remains a history.

M. O'BRIEN: Wal-Mart cuts prices. Good for you, bad for its competitors.

Ali Velshi "Minding Your Business."

Hello, Ali.

ALI VELSHI, CNN CORRESPONDENT: Miles, good to see you. . I bought a new flat panel TV a few months ago, which should be a sign to everybody, when I buy something, prices are headed down. And that's exactly what happens.

Flat panel TVs, LCDs, plasmas down about 25 to 30 percent this holiday season, and that is hurting companies like Best Buy, because everybody has sort of got to match each other's prices. Now, a big electronics retailer like Best Buy operates roughly on a 20 to 25 percent gross profit on their electronics, but some things give you better deals than others.

For instance, they sell game consoles and notebook computers, but those they make less money on. Well, with the price of flat panels being forced down by other competitors and so many people buying them, Best Buy, in order to keep competitive, has to bring its prices down, and that goes right to the bottom line.

They're feeling the pinch on that. And you can imagine if Best Buy is feeling the pinch, so is everybody else who's selling these things.

Desktop sales, by the way, are way down. Apparently, nobody is buying them right now. So if you're looking for one of those, it's like those synthetic basketballs, you're going to get a good deal on them.

CD and DVD sales are down as well. But they're being offset by fairly profitable gains for the game consoles, the Wii, the PS3 and the Xbox.

Now, the other thing I want to tell you about is there are several probes going on into price fixing or potential price fixing for the makers of the LCD screens. There are a few major makers, Samsung and LG Phillips, both out of South Korea, and Sharp out of Japan. There's a company AU Electronics (ph) out of Taiwan.

Those are the big players. Well, a number of those governments are involved in probing price fixing.

The allegation -- although we don't have details on it right now -- but the allegation would be that they somehow controlled either their production, their output, or their prices to keep prices for LCDs high to the manufacturers and the sellers. We're now seeing those prices drop anyway, so it's a double whammy for those companies, but all those companies have confirmed that they are under investigation.

No clue as to what that's going to mean for prices. So if you're buying a flat screen TV, most indications are now is a good time to do it.

I'm going to be back, Soledad, in a little while telling you more about the discussions about United Airlines and Continental, possible merger talks there.

S. O'BRIEN: All right. Look forward to that. Ali, thank you very much.

The next hour of AMERICAN MORNING begins right now.

M. O'BRIEN: Developing story. Saudi Arabia threatening to back the bloody insurgency in Iraq if the U.S. pulls out. A new problem for the president as he heads to the Pentagon this morning for a big meeting.

S. O'BRIEN: Under fire. The former president, Jimmy Carter, facing some big criticism over his new book. We'll talk to him what's triggering all the outrage.

M. O'BRIEN: And an urgent search. Three climbers remain stranded in Oregon. The weather and a cell phone battery could decide their fate on this AMERICAN MORNING.

S. O'BRIEN: Good morning. Welcome back, everybody, Wednesday, December 13th.

I'm Soledad O'Brien.

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

We're glad you're with us.

S. O'BRIEN: Here's what's new in Iraq this morning.

Five deadly car bombs happened overnight. And again, attacks in Baghdad as Shiite day laborers wait in line for work. At least 15 people were killed there.

Iraq's prime minister has a plan to put Iraqi troops in charge of security in Baghdad.

And Saudi Arabia might back the insurgency if the U.S. pulls out of Iraq. That's according to a report in today's "New York Times."

Plus, President Bush heads to the Pentagon this afternoon. It's going to happen at 1:00 p.m. Eastern. He's going to be meeting with senior defense officials.

Plus, Major General William Caldwell is about to give a military briefing in Baghdad. We're watching that briefing -- you see the room right there -- as they get ready for that to begin any minute now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com

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