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CNN NEWSROOM

Kennedy Demands Accountability in Iraq War; Apple to Unveil Phone; U.S. Strikes al Qaeda Targets in Somalia

Aired January 9, 2007 - 13:00   ET

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


KYRA PHILLIPS, CO-HOST: Hello, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta.
DON LEMON, CO-HOST: And I'm Don Lemon.

Hunting al Qaeda. U.S. attacks in Somalia, the next hot spot in the war on terror. Barbara Starr is live in Africa.

PHILLIPS: They call it paradise, until the wind drives the flames. Movie star mansions destroyed on old Malibu Drive. Thelma Gutierrez live with the latest.

Billions of songs playing on iPods. You think that's hot, wait until you see what Apple plans next.

You're live in the CNN NEWSROOM.

Live pictures now from the Hill. We are waiting for Senator Kennedy to begin speaking at the National Press Club there in Washington, D.C. Let's bring in Capitol Hill correspondent Dana Bash to talk just a little bit about the preparation for this speech. Obviously, very much against the war. Coming on -- just hours before the president gives his speech, Dana.

DANA BASH, CNN CORRESPONDENT: That's right. Well, we're going to hear from Senator Kennedy in just a few moments is the latest idea from a Democrat on just how to use the new power that they have just won and just taken over here in Congress.

And what he is going to say in his speech is that he's going to introduce a bill that would require the president to come to Congress before he sends any additional troops to Iraq or sends any money, additional money, to support those troops.

Now, essentially what we are seeing going on behind the scenes in a really feverish way, Kyra, is Democrats who over the past several days by and large made it clear they oppose this idea that the president is going to lay out tomorrow, in part saying that there should be probably about 20,000 additional troops in Iraq.

But you know, a couple of weeks ago, that probably would have been enough. Because Democrats were, across the board, in the opposition party, and that was what they were say. They would give their rhetoric, and that was about it.

But now they have control of the agenda here on Capitol Hill. And they understand, as much as anybody, that Democrats were sent here, to Capitol Hill, and to the majority, they say, over and over again, because of the Iraq war. So they feel that they do have a responsibility to not just talk about their opposition to whatever the president is doing, but to actually do something about it.

Now, when it comes down to it, though, what they are going to do, that is the open question. Senator Kennedy will give his idea, essentially saying that Congress can't just talk about it, that they actually have to -- it actually has to assert its constitutional role and get involved more directly in this war. That essentially saying that in 2002 when Congress authorized the Iraq war it was a different kind of war.

Now, Senator Kennedy is one of the most liberal, of course, and well known members of Congress. He always opposed the Iraq war.

But nevertheless, even talking to other Democrats who voted for the war, even some Republicans, they say, you know, the -- excuse me, the mission has very much changed. Then, it was about going into topple Saddam Hussein, going in to get weapons of mass destructions that didn't exist. Now there is very much -- what's going on there is sectarian violence, and many people call it a civil war.

So the mission has changed. And Democrats are grappling with the idea of how to assert the power that they won in November. And what we're going to hear from Senator Kennedy is one idea.

It has not been embraced, this idea of requiring approval from Congress. It has not been embraced yet by his leadership here. They have been meeting, Kyra, as I said, behind closed doors, at least on the Senate side, all morning, trying to figure out exactly how to approach this idea, how to make the Senate's voice and the House's voice heard when it comes to their opposition to the president and to sort of get their plan in place for when the president officially makes his speech tomorrow night.

PHILLIPS: All right. Dana Bash on the Hill. And as of today, they are on the clock. We've been talking about this, those first one -- first 100 hours -- easy for you to say -- in which House Democrats plan to pass key legislation kicked off just a moment ago. You can see it right there, the little count-up clock on the bottom right of your screen. Keep track of the Democrats' first 100 hours right here on CNN.

LEMON: Now to a story that could affect millions and millions of people. Dialing and shuffling, all in one easy package. Just moments ago, Apple Computer made an announcement, and it could set the music world and the cell phone world on their ears, or at least combine them both.

Our Susan Lisovicz joins us now with the very latest on this.

Susan, this is big news.

SUSAN LISOVICZ, CNN CORRESPONDENT: It is big news. It's not a complete surprise. Nonetheless, it is big news here on Wall Street even, because Apple shares, which had been up in anticipation of this announcement, are up now 3 percent. They've been up, like, maybe under 2 percent earlier in the day.

Yes, Apple is going to unveil a phone. And this is big news for Apple, because you think the iPod was a big seller. They sold 70 -- the company has sold 70 million iPods over five years. Well, when you think about it, with cell phones, one billion handsets are sold every year. So this is a huge market that Apple's getting into.

Steve Jobs, the CEO of Apple Computer, making the announcement himself, just a few minutes ago. He is saying that in his typically modest way, he's saying, "Every once in a while a revolutionary product comes along that changes everything. It's very fortunate if you can work on just one of these in your career. Apple's been very fortunate in that it's introduced a few of these." And that will be a cell phone and an iPod together.

We're not sure if it's going to be called an iPhone. But it's going to be a combination of the ever popular iPod and a cell phone. It will have an Internet connection.

Jobs says that Apple's phone would reinvent the telecom sector and leapfrog past the current generation of hand to use smart phones.

LEMON: Yes.

LISOVICZ: And that is ongoing right this -- right this minute, Don, in San Francisco, at the annual Mac World Conference.

LEMON: Susan, if you're looking, there's a picture of it right there. And you know what? I don't know of at least one person or one family who doesn't have an iPod.

And listen to these numbers. You said what was it, seven billion, you said, how many?

LISOVICZ: Seventy million iPods sold over five years.

LEMON: Seventy million iPods. Get this, Jobs announced that today, also that there have been two billion iTunes sold. Of course, that's, you know, through the Apple store online.

Three million movies have been sold for video. At one point three million videos have been sold for video iPods. He says it took three years to sell the first billion and then 10 months to sell the second billion on that.

So can you imagine? I mean, this is a lot of money. And it -- actually, iPod, I think, actually, Apple sort of changed the computer industry, and the way we look at music, and movies, and all kinds of things.

LISOVICZ: It's got a very good -- it's got a very good track record. And one of the things that Apple's been very good at, is that when it introduces the new technology, it's not only stylish...

LEMON: Right.

LISOVICZ: ... but it's easy to use, easy to understand. That's really been one of the hallmarks of Apple products, whether it's the computer, you know, it's a Mac, or whether it is the iPod.

We're not sure. We think that it might be Cingular that is going to be its partner in this. And that's one of the things that's also going to be a difference. Not only this huge global market, but also the fact that Apple in a way won't have complete control, because it is going to have to team up with a wireless carrier. Right?

LEMON: Yes, that is good. You know what? You said making it stylish. Not really stylish, but becoming a part of a lifestyle. I mean, you see people everywhere with the little, you know, ear buds on, and listening to their iPods and then a number of people after that, a number of companies have come out...

LISOVICZ: Lifestyle and life changing, right?

LEMON: Yes, absolutely.

LISOVICZ: Life changing for a lot of people, what the iPod and these portable music players have done in just a few years.

LEMON: Susan Lisovicz, we look forward to the big announcement. So thank you. And as soon as it happens, happens for sure, we'll get back to it. Thank you.

LISOVICZ: You're welcome.

PHILLIPS: Take you back live to Washington, D.C., right now. We've got live pictures. Senator Ted Kennedy of Massachusetts scheduled to deliver a speech at the National Press Club. I know he's stepping up to the podium.

Candy Crowley, we've had a chance to see some excerpts from his speech. Obviously, a big critic of the war in Iraq, as the president gets ready to make his big speech.

CANDY CROWLEY, CNN CORRESPONDENT: Absolutely. And what -- this is sort of a pre-act, as we say. But what Senator Kennedy is going to do is lay down the liberal view of things, which is to say, he will say, look, no additional troops and no additional money for additional troops, unless Congress approves.

That's the more -- sort of speaking for the left, which Senator Kennedy often does. He does not necessarily set the legislation so much as move the legislation. So it will be an interesting speech.

PHILLIPS: Just looking at parts of it, pretty harsh, talking about echoes of Vietnam. He's going to go on to say that Iraq is George Bush's Vietnam. There was no military solution to this war that he kept trying to find -- Bush kept trying to find one way, any way. In the end, 58,000 Americans died in the search for it.

They're not letting go of the Vietnam comparison, still hammering at that.

CROWLEY: No, absolutely. And because it has such resonance. But remember, now, that up on Capitol Hill, now in the majority, these Democrats are getting phone calls and e-mails from the people who believe that they, now, should have a voice on Capitol Hill. And that is many of the liberal groups that helped put many of these senators and congressmen into office.

So what is driving this right now is the belief that many voters believe that when they voted for these Democrats they vote for someone to help stop this war, to de-escalate, not escalate.

So what you're hearing now is Senator Kennedy reflecting those views as he has from the beginning, because he voted against the war to begin with.

PHILLIPS: Why have Kennedy give the speech, Candy?

CROWLEY: Well, you know, because he is that leading liberal voice. Again, he doesn't so much set legislation as kind of move the body to the left. So he -- he tries to impact legislation, because there, frankly, are not enough liberal Democrats on Capitol Hill to set legislation.

So what he's trying to do is speak for those liberals and those progressives and even some moderates who felt that they were voting for a Democratic Party that would do something about the war, and he is the chief spokesman for that wing of the party.

PHILLIPS: Candy, let's listen in and talk a bit more.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: ... accountable to the people. Our system of checks and balances gives Congress, as the elected representatives of the people, a central role in decisions on war and peace.

Today, therefore, I am introducing legislation to reclaim the rightful role of Congress and the people's right to a full voice in the president's plan to send more troops to Iraq.

Congressman Ed Markey of Massachusetts will introduce similar legislation in the House of Representatives. Our bill will say that no additional troops can be sent and no additional dollars can be spent on such an escalation unless...

PHILLIPS: Apologize for that. We lost the audio. As we try to reconnect there, we'll bring back Senator Kennedy as he's making -- OK, it's back. Let's go back to it.

KENNEDY: ... the power granted to Congress by Article I, Section 8, of the Constitution. There can nobody doubt that the Constitution gives Congress the authority to decide whether to fund military action. And Congress can demand a justification from the president for such action before it appropriates the funds to carry it out.

This bill will give all Americans, from Maine to Florida, to California, to Alaska, to Hawaii, an opportunity to hold the president accountable for his actions.

The president's speech must be the beginning, not the end, of a new national discussion of our policy in Iraq. Congress must have a genuine debate over the wisdom of the president's plan. Let us hear the arguments for it and against it. Then let us vote on it in the light of day. Let the American people hear, yes or no, where their elected representatives stand on one of the greatest challenges of our time.

Until now, a rubber-stamp Republican Congress has refused to hold the White House accountable on Iraq. But the November election has dramatically changed all of that. Over the past two years, Democrats reached for their roots as true members of our party. We listened to the hopes and dreams of everyday Americans. We rejected the politics of fear and division. We embraced a vision of hope and shared purpose, and the American people voted for change.

We campaigned as Democrats in 2006, and we must govern as Democrats in 2007. We have the solemn obligation now to show the American people that we heard their voices.

We will stand with them in meeting the extraordinary challenges of our day, not with pale actions, timid gestures and empty rhetoric, but with bold vision, clear action and high ideals that match the hopes and dreams of the American people. That is our duty as Democrats and as Americans on the war in Iraq.

The American people sent a clear message in November that we must change course in Iraq and begin to withdraw our troops, not escalate their presence. The way to start is by acting on the president's new plan. An escalation, whether it is called a "surge" or any other name, is still an escalation. And I believe it would be an immense new mistake. It would compound the original misguided decision to invade Iraq.

We cannot simply speak out against an escalation of troops in Iraq. We must act to prevent it.

Our history makes clear that a new escalation in our forces will not advance our national security. It will not move Iraq towards self-government. And it will needlessly endanger our troops by injecting more of them into the middle of a civil war.

Some will disagree. Listen to this comment from a high-ranking American official: "It became clear that, if we were prepared to stay the course, we could help lay the cornerstone for a diverse and independent region. If we faltered, the forces of chaos would smell victory, and decades of strife and aggression would stretch endlessly before us. The choice was clear: we would stay the course, and we shall stay the course."

That's not President Bush speaking. It's Lyndon Johnson speaking 40 years ago, ordering 100,000 more American soldiers to Vietnam.

Here's another quotation: "The big problem is to get territory and to keep it. You can get it today, and it will be gone next week. That is the problem. You have to have enough people to clear it, enough people to preserve what you have done."

That is not President Bush on the need for more forces in Iraq. It is President Johnson in 1966 as he doubled our military presence in Vietnam. Those comparisons from history resonate painfully in today's debate on Iraq.

In Vietnam, the White House grew increasingly obsessed with victory and increasingly divorced from the will of the people and any rational policy. The Department of Defense kept assuring us that each new escalation in Vietnam would be the last. Instead, each one led only to the next.

Finally, in 1968, in large part because of the war, Democrats lost the White House. Richard Nixon was elected president, after telling the American people that he had a secret plan to end the war.

We all know what happened, though. As president, he escalated the war into Cambodia and Laos, and it went on for six more years. There was no military solution to that war, but we kept trying to find one anyway, and in the end 58,000 Americans died in the search for it.

Echoes of that disaster are all around us today. Iraq is George Bush's Vietnam. As with Vietnam, the only rational solution to the crisis is political, not military. Injecting more troops into a civil war is not the answer.

Our men and women in uniform cannot force the Iraqi people to reconcile their differences. The open-ended commitment of our military forces continues to enable the Iraqis to avoid taking responsibility for their own future. Tens of thousands of additional American troops will only make the Iraqis more resentful of America's occupation. It will also make the Iraqi government even more dependent on America, not less.

PHILLIPS: A preemptive strike in the battle over Iraq. That was Democratic Senator Edward Kennedy speaking at the National Press Club on the eve of President Bush's address to the nation.

Let's get back to our senior political correspondent, Candy Crowley. She's at the CNN Washington bureau.

Three things that stand out to me. First of all this legislation that he is proposing, his bill, Candy, that he says will say that no additional troops can be sent and no additional dollars can be spent on such an escalation, unless and until Congress approves the president's plan, something we didn't see, something that was very controversial, pre-Iraq war.

CROWLEY: Absolutely. And we may need some lawyers to get in on this, because Steny Hoyer, who as you know, is the leader over on the House side, has said that, while he thinks it's a practical matter, Congress does not need to have a say so, and the president needs congressional input and congressional consultation. He believes that, under Article II, that the president does have the power to prosecute a war.

So this is going to be an argument about power, which obviously is sort of a Washington topic we have a lot. So there is that.

There is also the matter of timing. I mean, we're told by Jamie McIntyre that they could put additional troops -- additional U.S. troops into Iraq within a week. Well, if the president does that, then is this sort of shutting the barn door if Congress moves to act?

So there -- and there are a number, as Dana mentioned, a number of different proposals up there. This is one speaking for the voice of liberal Democrats.

PHILLIPS: We already talked about the comparison to Vietnam. But another line that Kennedy said, "Until now a rubber-stamp Republican Congress has refused to hold the White House accountable on Iraq."

You know, there was a lot of talk. You and I talked about this, about possible investigations popping up, since it's now a majority of Democrats in the House and the Senate, on why that war took place in the first place.

CROWLEY: Absolutely. And not just investigations on prewar intelligence and investigations on how the war has been conducted, but there will be ongoing oversight.

So Congress can bring up generals at any point, and Democrats can call them and say, "What do you think of this? What do you think of this? How is this going?"

They can also watch every single penny that goes toward this war. That's part of what oversight is about.

So they definitely have some tools at their disposal to question the president's policy. Whether or not they will use the tool of cutting off funds for additional troops certainly remains to be seen.

PHILLIPS: Candy Crowley, always great to have you.

CROWLEY: Sure. Thanks.

PHILLIPS: If you want to finish watching Senator Ted Kennedy's speech, you can go to CNN.com/pipeline.

LEMON: And more news to come her in the CNN NEWSROOM, including this story: strike in Somalia. The U.S. goes after al Qaeda strongholds in the Horn of Africa. The latest on a developing story ahead in the NEWSROOM.

And up in smoke. One of California's swankiest ZIP codes hit hard when the Santa Ana winds meet up with a spark. A live report from Malibu next in the CNN NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Eastern Africa is the location; al Qaeda is the target. U.S. strikes Southern Somalia from the air, opening up a possible new front in the war on terror. CNN's Barbara Starr is in neighboring Kenya.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT: Here in East Africa, there are long memories of al Qaeda attacks. The U.S. military action comes as welcome news here.

The U.S. military has now assembled, essentially, an armada off the coast of Somalia. The aircraft carrier Eisenhower is now in the region, its aircraft available to conduct bombing missions if so ordered.

Also, those aircraft available to conduct reconnaissance over Somalia as they continue the hunt for al Qaeda suspects that they believe have been fleeing from Mogadishu.

There are also four Navy warships off the coast, again, doing the same mission. It is believed that many al Qaeda suspects have been on the run into southern Somalia for weeks now, ever since the Islamic militia they were affiliated with fell from power when the Ethiopian military invaded that country.

African and U.S. intelligence officials have been coordinating closely for the last many days, apparently coordinating in the run-up to this AC-130 gunship strike against the Ras Kamboni terrorist camp deep in southern Somalia that was hit by the United States.

The U.S. has long wanted to get many of the suspects it believes have been hiding in Somalia, all of them affiliated with attacks in this region, at least three of them said to be affiliated with the 1998 U.S. embassy bombings in Tanzania and here in Kenya.

For the U.S., however, officials say, while they may have dealt a blow to al Qaeda, no one is yet predicting the end of that terrorist network here in East Africa.

Barbara Starr, CNN, in Nairobi.

(END VIDEOTAPE)

LEMON: All right, Barbara.

Air strike invasion, counterassault. A lot has happened in Somalia in the past few months. The latest attack is the first reported U.S. military action there since 1993's Black Hawk down battle, where 18 U.S. soldiers were killed.

The U.S. has been on the hunt for al Qaeda terrorists who fled Somalia's capital, Mogadishu, late last month. That's when Ethiopian troops invaded Somalia and helped to force out Islamic militants.

Those militants had seized control of Mogadishu and much of the rest of southern Somalia back in June. They're accused of harboring key suspects in the 1998 bombings of U.S. embassies in Kenya and Tanzania. PHILLIPS: Straight ahead, up in smoke. One of California's swankiest ZIP codes hit hard when the Santa Ana winds meet up with a spark. A live report from Malibu next from the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Hello, everyone, I'm Kyra Phillips, live at the CNN world headquarters in Atlanta.

LEMON: And I'm Don Lemon.

A new gadget promises to reinvent how you get and stay in touch, and it fits right in your pocket. We're going to tell you all about it right here, live in the CNN NEWSROOM.

PHILLIPS: Well, as of today, they're on the clock. Those first 100 hours in which House Democrats plan to pass key legislation kicked off at 1:00 p.m. Eastern. You're looking at live pictures now from the floor of the U.S. House of Representatives. You might notice our little count-up clock at the bottom right hand of your screen. You can keep track of the Democrats first 100 hours right here on CNN.

Also, we've been listening to Senator Ted Kennedy live at the National Press Club. We've been monitoring his speech,. We talked about it with our Candy Crowley. As he wraps up this speech, as you know, he's been highly critical of the president's Iraq policy. This comes on the heels of the president's big speech that we will be taking live as well here on CNN, talking about his new strategy in Iraq.

Now to the White House, where Mr. Bush is preparing to unveil that new Iraq strategy tomorrow night.

Elaine Quijano is there.

Hey, Elaine.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Good afternoon to you, Kyra.

Well, that's right, White House Press Secretary Tony Snow actually before Senator Kennedy started delivering his speech was actually asked about the proposed legislation about the idea of having congressional approval before an increase of troops is actually finalized.

Well, what White House Press Secretary Tony Snow said is that essentially they would wait to see exactly what it was that Senator Kennedy said, but he also was pressed further on the question about withholding funds for U.S. troops. And what he said is that Democrats, he said, have a choice to make. He said that they're going to have to decide where they stand in terms of a couple issues. No. 1, whether or not they want Iraq to succeed. But also, do they believe in supporting the troops? And how do they, in fact, express that support? Also, Tony Snow was asked about the speech and how it might be received, acknowledging that Americans are certainly skeptical now, nearly four years into the Iraq war. Here's a little of what Press Secretary Tony Snow had to say.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECY.: In early 2006, there was the sense of optimism. But guess what, the terrorists did succeed in unleashing sectarian violence. And now that has created a new set of realities that one must contend with. The president will talk about that.

I simply am not going to try to give you a general characterization of how it will be received. My sense is the American people want to hear what the president has to say.

(END VIDEO CLIP)

QUIJANO: And Tony Snow, again, not giving any information up in the way of details about what else the president might be discussing in terms of specifics.

Interesting to note, though, Kyra, Tony Snow at one point essentially uttering almost the same line, word for word almost, as Senator Kennedy at one point in the briefing, saying that the address that the president is going to give to the nation is not the end of the debate; he said it's the beginning of an important consideration of how we move forward in Iraq. But essentially what we heard from Senator Kennedy was the same. Obviously both sides acknowledging there are deep divisions certainly on the way forward as the White House calls it, in Iraq. What we heard from the president -- what we heard from Press Secretary Tony Snow is that the president will, in fact, address the skepticism that is out there. And certainly skepticism, not just from Democrats, but from Republicans as well -- Kyra.

PHILLIPS: Elaine Quijano at the White House, thanks so much. We just want to remind viewers, tomorrow, 9:00 Eastern Time, the president of the United States will address the nation, giving his new strategy for Iraq. You can see all our special coverage starting at 7:00 p.m. Eastern Time, with a special edition of "THE SITUATION ROOM," all the way up to the special edition of "ANDERSON COOPER 360" at 10:00 Eastern.

LEMON: Now to the unbelievable pictures coming out of California. Smoldering ruins on the Malibu coastline. At least four ocean-front mansions are lost causes today after a wildfire. The cause is still a mystery.

CNN's Thelma Gutierrez joins us from the scene now.

Thelma, what's the latest?

THELMA GUTIERREZ, CNN CORRESPONDENT: Well, Don, I can tell you that dozens of exhausted firefighters are still out here, keeping an eye on things, and putting out hot spots in the area. If you take a look right behind me, you can see what is smoldering. This is the remains of two multistory, multimillion-dollar homes that sat right next to each other. The four homes that were destroyed here in Malibu are just steps away from the beach in one of the most desirable spots in the town of Malibu.

Now this fire began yesterday evening, right behind a baseball diamond up the hill from where we're standing. The winds at the time were gusting at 55 miles per hour. And the dry brush on the hillside just went up in flames. And within 20 minutes, four homes were completely destroyed and four others were seriously damaged.

Now one of the homes belonged to actress Suzanne Somers and her husband, producer Alan Hamel. The couple was not home at the time. Three-hundred firefighters were deployed to the area. They just couldn't save the homes.

Now firefighters say that a wall of flames literally made a tunnel right over the road, over the palm trees here on the side of the road, and then they ignited the trees on the other side, where the homes are, right out in front of those homes. And within minutes the homes were engulfed in flames.

Now you can take a look here. You can see what is left of the Mercedes Benz that was right out in front of the home of a family who happened to be out of the country at the time. They returned this morning, this very devastating news, to learn that their home had been completely destroyed. If you take a look here on the ground, you can see the melted remains of part of that Mercedes right here on the ground.

And right now, arson investigators are out here, trying to determine exactly what caused this fire -- Don.

LEMON: So again, no cause, and apparently not pretty -- not even close to one as of yet.

GUTIERREZ: No, not at all.

LEMON: OK, unbelievable pictures. Thank you very much, Thelma Gutierrez.

(WEATHER REPORT)

PHILLIPS: You listen on your iPod, now you'll be able to talk on your iPhone. Steve Jobs unveiling his company's newest innovation today. We're going to hear what he has to say about the latest gadget.

LEMON: And could a common nutrient help fend off Alzheimer's Disease. The 411 on folic acid, next in the NEWSROOM.

(COMMERCIAL BREAK)

LEMON: It is known to fight birth defects, heart disease, and cancer. Now researchers think folic acid may cut the risk of developing Alzheimer's.

CNN chief medical correspondent Dr. Sanjay Gupta dissects the findings.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Well, over the next few decades, we may see an explosion in the number of Alzheimer's cases, quadrupling, perhaps, over the next few decades. Pretty remarkable, and no surprise, then, that researchers and scientists all over are really trying to figure out the best ways to try and treat or prevent this disease from ever occurring in the first place.

Billions of dollars being spent here. And you may need to look no further than your medicine cabinet or your refrigerator. Really interesting study, an early study, preliminary only, coming out of Columbia, looking at about a thousand people, average age of 75. They followed them for six years, and what they found was interesting.

Those who had the lowest amounts of folic acid or folate in their diet had the highest risk of Alzheimer's. And those with the highest amount of folic acid or folate had the lowest risk of Alzheimer's.

Now, the folic acid was given by diets and by supplements both. What they concluded was that there might be a compound in the blood known as homocysteine. Pay attention to that one, because you're going to hear a lot about it.

It seems to be linked to heart disease and stroke, and possibly Alzheimer's as well now. What they propose is that folic acid, or folate, tends to clear that homocysteine a lot more quickly than some other substances. And that could lead to the reduced risk.

Again, we're talking about not very much folic acid, 200 micrograms a day. Interestingly, only about a third of us here in this country get that amount. We need 200 micrograms. You can take it in a pill form.

Some of the foods that have the highest concentrations include spinach, about a cup of spinach; three ounces of liver; dried beans or peas; oranges; bananas; sunflower seeds; and also breakfast cereals. A lot of them are fortified with folic acid.

Pay attention to that. If you're a pregnant woman. You need more folic acid if you are, about 400 micrograms.

Now it is possible to take too much folic acid. You want to take about 200 micrograms only. If you're taking too much it could actually mask deficiencies of other B vitamins, and a small study showed it could actually increase the risk of prostate cancer in men.

There's going to be a lot more coming out about folic acid and its relationship to Alzheimer's. Make sure you're getting enough. There's a lot of good reasons to do so.

Back to you.

(END VIDEOTAPE)

PHILLIPS: All right, let's get straight to Betty Nguyen in the NEWSROOM. Working a developing story for us -- Betty.

BETTY NGUYEN, CNN ANCHOR: Kyra, the search is still on for the man who pulled the trigger in a shooting on the grounds of a school in Nevada. It actually happened on the parking lot grounds.

Here's what we understand from authorities is that an argument occurred. And this shooting appears to be the result of road rage kind of incident. We understand from authorities that the suspected shooter followed the victims from a convenience store where this argument occurred over to the school and then shot two students in the parking lot.

Those two students were taken to University Medical Center with non-life threatening injuries. To tell you a little bit about those wounded, one of the students wounded is a teenager that was in the car hit in the ankle. Now, another student was just walking by when this occurred, a female student. She was hit in the abdomen.

But, again, these are non-life threatening injuries. They've been taken to the local hospital for treatment. But as I mentioned, the search is still on for the man who pulled the trigger in this incident.

Don't know a whole lot about him except for the fact that he's in his late 20s, early 30s, has braided hair and was driving a mustang. So, a lot of investigation still to go in this case and we'll stay on top of it for you, Kyra.

PHILLIPS: All right, Betty, thanks.

Well, New York smells like -- well, New York again. The city still trying to sniff out the source of that gas-like odor that hung over a big chunk of the Big Apple yesterday.

The city's environmental agency is pretty sure that the stink came from New Jersey's industrial waterfront just across from the Hudson River. Some people had trouble breathing and some train service between New Jersey and New York was suspended, but it all looks like it's OK now.

LEMON: Well, water or wind? That's the question before a jury in Mississippi this week. One of hundreds of lawsuits against State Farm insurance over Hurricane Katrina damage. But there may be a settlement in the works soon.

CNN's Sean Callebs has that story for us.

(BEGIN VIDEOTAPE)

CALLEBS (voice over): There are thousands of people along Mississippi's Gulf Coast who say they were victimized twice by Katrina. First by the storm, then by their insurance company.

People like John Oakes. He says State Farm denied his claim, alleging flood from the storm surge, not hurricane winds, devastated his home. This is at the heart of the dispute, what was destroyed by wind, which would be covered by insurance, and what was devastated by flooding, excluded from homeowner policies.

DR. JOHN OAKES, HURRICANE KATRINA VICTIM: A lot of what they'll say is really unbelievable. I mean, I wouldn't have expected the reasonable, intelligent person would tell me that water would shake a tree and it would break. But it did.

CALLEBS: Now CNN has learned from someone close to the negotiations, State Farm is on the verge of working out a settlement that could affect as many as 35,000 policyholders, and the deal could cost the insurance giant hundreds of millions of dollars.

State Farm told CNN, "At this point, we have no settlement. We continue to talk and to search for ways to bring these events to a resolution. If you ask me: would we like to bring closure to these matters? The answer is absolutely."

Well-known attorney Dickie Scruggs, who took on big tobacco in the 1990s and won, is leading the legal fight against State Farm and other insurance companies. Scruggs lost his Mississippi beach-front home in the storm and was denied wind coverage.

DICKIE SCRUGGS, ATTORNEY: It is as personal as anything in my life that's ever happened to me.

CALLEBS: Any settlement between homeowners and State Farm would have to be approved by Mississippi's attorney general, Jim Hood. Hood has filed a civil lawsuit against State Farm for refusing to cover damage from Katrina's storm surge.

Hood says -- quoting here -- "I am working day and night attempting to get our coastal residents a fair shake in the insurance litigation. It would not help our negotiations to disclose any details at this time."

(on camera): It is jaw-dropping to look at the widespread devastation left by Katrina a full 16 months after the hurricane punished this area. The insurance industry says it has resolved about 90 percent of the some 3 million claims filed after the hurricane.

Dickie Scruggs is pursuing litigation against five insurance companies and the settlement would only involve State Farm.

Sean Callebs, CNN, in Long Beach, Mississippi.

(END VIDEOTAPE)

PHILLIPS: All right. Let's get back to Betty Nguyen now. Details on a couple developing stories she's working for us. What do you have right now? NGUYEN: This one, political story involving Senator Tim Johnson. As you recall, he suffered stroke-like symptoms back last month. Well, today, we're told by his office that his condition has been upgraded from critical to fair.

Now you may recall Kyra that on December 13, after slurring his speech during a talk with reporters, he underwent surgery at the hospital for a hemorrhage inside the brain cavity caused by a hereditary condition in fact where blood vessels are too close together.

Well doctors have done corrective surgery. In fact, he's even undergone an angiogram as well. And today we have learned that he has made progress. he has been upgraded from critical to fair. He will start rehabilitation this week as well.

So this is very good news for Senator Tim Johnson and his family. And this has really been watched because as you know the Democrats hold a very small majority in the U.S. Senate and were worried should he not be able to fulfill his term then South Dakota's Republican governor would have to nominate who is going to take his place.

But not happening right now because he is on the mend and is recovering quite well, going from critical to fair and starting rehab this week -- Kyra.

PHILLIPS: Good, that's great news, thanks, Betty.

LEMON: You listen to your iPod. Well, now you'll be able to talk on your iPhone. Steve Jobs, unveiling his company's newest innovation today. We'll hear what he has to say about the latest gadget.

(COMMERCIAL BREAK)

LEMON: Well, investors and techies finally got what they were waiting for. The iPhone is a go. Susan Lisovicz joins us at the New York Stock Exchange.

Susan, I'm in the Apple Store at least once a week. I love apple. I hang out there, and everybody's asking, when is that phone coming out? When is that phone coming out? I want that phone.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: You have to come at the -- the new uptown one by FAO Schwartz.

LEMON: Is it fabulous?

LISOVICZ: Yes, it's pretty fabulous. Yes, it's a reminder -- reminiscent of the pyramid -- the glass pyramid by the Louvre in Paris. Anyway, that's for your next visit.

The main event today, months of speculation over. A little over an hour ago, Apple CEO unveiling a combination iPod and phone dubbed the iPhone. The device will feature an iPod, a phone, an Internet connection. Another unique quality, the device is run entirely by touch. The entire front surface is a touch screen, but no keypad. Let's listen to the man himself, Steve Jobs, explain his company's newest product.

(BEGIN VIDEO CLIP)

STEVE JOBS, CEO, APPLE: of iPhone, right here, and so if I want to get in the iPod, I just go down that lower right hand corner and push this icon right here. And boom, I'm in the iPod. I want to get home, I push the home button right here, and I'm home. Back in the iPod, I'm back in the iPod.

Now here I am. You see five buttons across the bottom -- playlists, artists, songs, videos and more. I'm in artists right now. Well, how do I scroll through my list of artists? How do I do this? I just take my finger and I scroll.

(APPLAUSE)

JOBS: Isn't that cool? Rubber-banding up when I run off the edge. If I want to pick somebody -- let's say I want to pick The Beatles -- I just tap them, and here's The Beatles' songs with their albums right here.

I want to play "Sergeant Pepper's," I just hit "Sergeant Pepper's" right there, and "A Little Help From My Friends." Look at this gorgeous album artwork here, but I got a volume control.

(END VIDEO CLIP)

LISOVICZ: Oh, and there were so many things we could talk about, Don Lemon, including the reference to Apple, right?

LEMON: Oh my gosh. Oh, I'm sitting here going I want it, I want it. You know, I don't know if you have the answers to these questions. I have a bunch of questions here. Do you know how much yet?

LISOVICZ: Don't know the answer to that question. Don't know when it will ship either.

LEMON: Kyra was sitting here going "lots and lots of cash." And you know what? I noticed its simplicity. You said that was really one of the secrets of the keys to Apple's success, at least the iPod's success, is simplicity. You can work it one finger, one thumb, and you've got it all there working.

LISOVICZ: You know what? Actually, Don, my producer tells me $499 and $699. We're talking about $499 and $699 are the price points that we're talking about for the iPhone, so...

LEMON: Oh, good. OK, well, Susan...

LISOVICZ: So Santa is alerted as to your wishes for later this year.

LEMON: All right, well, good. LISOVICZ: But, you know, one his -- one of many of Steve Jobs memorable quotes is that the "killer apps (ph) is taking calls." And he's taking your calls.

(MARKET REPORT)

LEMON: All right, thank you, Susan.

PHILLIPS: We're getting new video in this hour from our reporter embedded with U.S. troops in Iraq. She was there for that deadly gun battle this morning. Arwa Damon brings us more from this exclusive firefight. More in just a moment.

(COMMERCIAL BREAK)

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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