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AMERICAN MORNING

Chemical Bombs; Clinton-Obama Feud; Perry Paid By Merck; Free Speech Or Hate?; Will Harry Go?; Energy Drink Warning; Minding Your Business

Aired February 22, 2007 - 06:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Chemical bombs. What could be a disturbing new trend in Iraq using chlorine to spread toxic gas and fear.
MILES O'BRIEN, CNN ANCHOR: Money for Merck. A new report raising questions about a campaign donation to Texas Governor Rick Perry, just before making Merck's cancer vaccine mandatory for kids.

S. O'BRIEN: And health alert this morning. Students getting sick. Schools sending home dire warnings about a potent new energy drink.

M. O'BRIEN: And Royal announcement. We could find out any minute now whether Prince Harry is headed for Iraq.

Live from London, Baghdad and New York on this AMERICAN MORNING.

S. O'BRIEN: And good morning. Welcome, everybody. It is Thursday, February 22nd. I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien. We're glad you're with us.

S. O'BRIEN: And we're glad you're with us, back from your little short vacation. Glad to have you back.

M. O'BRIEN: Good to be back.

S. O'BRIEN: Thank you.

We begin in Iraq this morning. The new plan of attack using chemical bombs to tell you about. A truck that was carrying tanks of chlorine gas exploded on Wednesday, releasing that, a toxic cloud. It is the second chlorine bomb in the last two days. The third in the last month. CNN's Arwa Damon is in Baghdad for us this morning.

Arwa, good morning to you.

It's not only, of course, the toxic fallout that's dangerous. The explosion as well. But tell me a little bit more about this tactic.

ARWA DAMON, CNN CORRESPONDENT: Well, Soledad, I mean first let's just look at the attacks that happened over the last month and how concerning it is to the Iraqi people and to the security forces that are operating here. Back at the end of January, a chlorine tank exploded outside of the emergency response services and a hospital in Ramadi. Now that attack called 16 people. And in that case, there were no reports of any sort of poisoning due to the chlorine gas.

But if we look at the attacks that happened over the last week, on Tuesday, a tanker carrying chlorine gas with a bomb placed inside of it, exploded outside of a restaurant in Taji. The attack killed six people, but then over 100 individuals were sent to the hospital either from wounds or from some sort of gas poisoning.

The day after that, on Wednesday, a car bomb carrying cylinders filled with chlorine gas exploded outside of a hospital in a southwestern Baghdad neighborhood of Bayaa. That attack also killed a number of people and sent 70 others to the hospital because of this toxic gas.

And this is very concerning, this new type of bomb that the insurgency here may be deciding to employ. Perhaps a shift in their tactics. Because chlorine gas, and with other industrial chemicals, are readily available in a number of Baghdad markets. This is, in some way, the poor man's chemical weapon and it is very out here in Iraq.

Soledad.

S. O'BRIEN: Well, that's a scary thing. All right, Arwa Damon for us this morning in Baghdad.

Thank you, Arwa.

Coming up at our 7:00 Eastern Time hour, we're going to be talking with Major General William Caldwell live from Iraq. We'll get his take on the violence in that country, what Arwa was just talking about, and whether Iraqis are ready for those 1,600 British troops to head home.

Miles.

M. O'BRIEN: A ferocious war of words raging this morning between the speaker of the House and the vice president. The issue is the war on Iraq and whether it is unpatriotic to disagree with the White House.

The spat began in Tokyo. Vice President Dick Cheney blasting the plan pushed by House Democrats to restrict Pentagon funding for the war, to make it harder to send more troops. Cheney said the plan would "validate the al Qaeda strategy," which would prompt the U.S. to throw in the towel in Iraq.

Speaker Nancy Pelosi quickly fired back, saying the comment was out of bounds and unfairly questioned her patriotism.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, SPEAKER OF THE HOUSE: You know what I'm going to do, I'm going to call the president and tell him I disapprove of what the vice president said. The vice president's statements are beneath the dignity of the debate that we are engaged in. They're a disservice for men and women in uniform who we all support.

(END VIDEO CLIP)

M. O'BRIEN: Pelosi didn't reach the president, but spoke with the White House chief of staff, John Bolton, who denied the vice president was questioning her patriotism.

A lot of pointed questions and accusations among Democrats on the presidential campaign trail this morning. The Obama and Clinton campaigns clashing early over comments made by a Hollywood power broker who is a one-time friend and supporter of the Clintons. Dana Bash with the story.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT, (voice over): It may have been all smiles at the Democrats' first 2008 cattle call in Nevada, but it was the unusually sharp exchange between Hillary Clinton and Barack Obama, the one candidate not here, that caught everyone's attention.

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I want to run a very positive campaign. And I sure don't want Democrats or the supporters of Democrats to be engaging in the politics of personal destruction.

BASH: Clinton's campaign lashed out at Obama for scathing comments made by his Hollywood fundraiser David Geffen. Geffen called Clinton "polarizing," saying she can't bring the country together. And slammed President Clinton as a "reckless guy."

CLINTON: I believe Bill Clinton was a good president and I'm very proud of the record of his two terms.

BASH: While refusing to say it herself, Clinton's campaign is demanding Obama denounce Geffen's remarks and give back his $2,300 campaign contribution. Campaigning in Iowa, Obama said "no."

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: My sense is that Mr. Geffen may have differences with the Clintons. That doesn't really have anything to do with our campaign. I've said repeatedly, I have the utmost respect for Senator Clinton.

BASH: The Obama campaign wasn't the only one taking shots at Hillary Clinton. John Edwards took thinly veiled jabs at her, too, for refusing to call her 2002 vote to authorize the Iraq War a mistake.

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: Well, whether it's good enough I think is between her and her conscience. It's not for me to judge.

BASH: All this led New Mexico Governor Bill Richardson to renew his call for Democrats to pledge not to attack each other.

GOV. BILL RICHARDSON, (D) NEW MEXICO: The Democratic Party too often has been negative. Let's be positive. And these little name callings, these little -- don't help. So let's get over that.

(END VIDEOTAPE)

M. O'BRIEN: That was Dana Bash reporting. She's part of the best political team on television. You can always find the day's political news served hot and fresh 24/7 at cnn.com/ticker.

Soledad.

S. O'BRIEN: Happening this morning.

A United Nations report on Iran's uranium enrichment program is due today. It could bring more sanctions. Iran is refusing to budge on Security Council demands that it scrap its nuclear program. At the same time, though, Iran's calling for talks with the U.S. to settle the dispute.

In Indonesia this morning, more than 100 people are still missing in a ferry boat fire. It happened just north of Jakarta. At least 13 people have been killed. More than 200 others, though, were saved by navy and civilian rescuers.

Today begins the second day of liberations for jurors who are deciding the fate of Lewis Scooter Libby. The jury, eight women, four men, deliberated for about four hours on Wednesday before they went home for the tonight. Libby's charged with lying to investigators who were trying to find out just who linked the name of a CIA agent.

M. O'BRIEN: In Texas, word this morning the chief of staff for Governor Rick Perry, who was pushing for those controversial cervical cancer vaccinations, on the very day the company that makes the vaccine donated to the Perry campaign. This comes from the Associated Press. The question is, is it a coincidence? Ali Velshi joining us now with this surprising new twist.

Good morning, Ali.

ALI VELSHI, CNN CORRESPONDENT: Good morning.

We've been following this story about this vaccine for HPV, a very common sexually transmitted disease that often leads to cervical cancer. Merck came out with this drug. It was given FDA approval last year. And they've been pushing for it to be given to girls in preteens. In many states -- 20 states have already implemented that legislation.

It's come under criticism by conservatives as being something that encourages preteens to engage in sex. But that's not what caused it to be undone. Merck has decided to stop pitching this, to stop lobbying for legislation partially because it was uncovered that Merck's -- Governor Rick Perry of Texas' former chief of staff was one of the lobbyists involved in lobbying Governor Perry, who sort of came out with an edict on February 2nd that girls in Texas should get this.

Now it is coming out, according to the Associated Press, with said it went into records, opened records in Texas that on the day that Merck donated money to -- Merck's pack (ph) donated money to Governor Rick Perry and eight other state legislators, there was a meeting with Governor Perry's chief of staff and some senior aides to discuss HPV. Governor Perry's chief of staff also met with his former chief of staff, who is the Merck lobbyist, about six or seven times in the last several months.

So the plot is starting to thicken. We have no comment from Merck on this. These are reports that are out there and unconfirmed as of now. But there does seem to be at least allegations swirling around of relations between the governor's office and Merck. And that, of course, is not good for Merck. It's particularly not good for people who were thinking that this vaccine is a great advance for sort of a first cervical cancer treatment.

M. O'BRIEN: What is the governor's office saying this morning?

VELSHI: They are only talking about the fact that they had these meetings. They, under law, have to disclose their agendas, their meeting schedules. They said they've had these meetings. They were discussing HPV. They did not discuss a link between HPV, donations and coming up with some sort of mandate.

M. O'BRIEN: All right. Ali Velshi, thank you very much.

VELSHI: We'll keep you posted.

M. O'BRIEN: Soledad.

S. O'BRIEN: Raleigh, North Carolina, now. Here's a question for you. Was it free speech or was it hate speech? A teacher at a public school is now under fire for handing out anti-Islamic pamphlets to his class. Tamara Gibbs is with our affiliate WTVD and she's got our story.

(BEGIN VIDEOTAPE)

TAMARA GIBBS, CNN CORRESPONDENT, (voice over): Criminals, demons possessed, inspired by Satan, don't marry a Muslim man. These are just a few of the phrases found in a pamphlet to describe the Prophet Muhammad, a central figure in Islam. Tariq Butt, Raleigh Muslim, says the only problem is, it was handed out in a class at his daughter's school.

TARIQ BUTT, CONCERNED PARENT: This is extreme. Just the whole way it was presented, to a captive audience of little kids in a class that had nothing to do with religion.

GIBBS: The pamphlets were a part of the guest speaker's lecture to freshman students at Imlo (ph) High School. The speaker is a member of the Camille International Ministries Organization. And according to Butt, it's not the first time he's been invited to the school. Butt, and a national Islamic organization, have contacted the school system requesting the teacher be disciplined and an apology be issued to all Imlo students.

SAIRA BUTT, STUDENT: It's free speech, but it's still offending people because it's not even the truth. So if it's something that important, especially in school where it could be affecting people who don't know any Muslims.

(END VIDEOTAPE)

S. O'BRIEN: That was Tamara Gibbs with our affiliate WTVD, reporting for us.

Miles.

M. O'BRIEN: Secretary of State Condoleezza Rice this morning on her way back to the U.S. after a diplomatic mission to the Mideast and Europe. She down for an exclusive interview with CNN's State Department correspondent Zain Verjee and the conversation turned to presidential politics.

(BEGIN VIDEO CLIP)

ZAIN VERJEE, CNN CORRESPONDENT: You've said that you don't want to be president, right?

CONDOLEEZZA RICE, SECRETARY OF STATE: Right.

VERJEE: But Senator Hillary Clinton has thrown her hat in the ring. And she wants to run. Do you think that America's ready for a female president? And do you think a woman president would be tough enough to lead the United States?

RICE: Oh, I think Americans are ready to vote for the president that they believe is going to share their values, that is going to carry out polities in which they believe. I don't have any doubt about women being tough enough to do almost anything.

(END VIDEO CLIP)

M. O'BRIEN: More of Zain's exclusive interview a little later this hour.

Soledad.

S. O'BRIEN: Coming up, we're talking rain, hail, tornadoes. How does that sound for your weekend?

Plus, there's this huge cyclone to tell you about that's happening overseas. Chad's got a lot of work ahead of him. We'll have extreme weather to tell you about this morning.

Plus, just as Britain says it's pulling troops out of Iraq, Prince Harry's regimen learns if they're going to go in. That announcement come thing morning. We're going to take you there live to London straight ahead.

And then questions and some concerns too about a powerful new energy drink. It's making some high schoolers sick. That story ahead on AMERICAN MORNING. The most news in the morning is right here on CNN. (COMMERCIAL BREAK)

S. O'BRIEN: The most news in the morning is right here on CNN.

In Iraq, another truck carrying chlorine gas was blown up by insurgents. This is the second tanker bomb thing week. At least 12 people killed in those attacks.

And ferry boat fire in Indonesia this morning to tell you about. A massive rescue effort is underway right now. At least a dozen people have been killed. Hundreds of others, though, have been saved.

Is Prince Harry, the third in line for the throne, about to ship out to Iraq? We could soon know if the military unit is going to be going off to war. Let's bring you the very latest. Alphonso van Marsh is standing by for us in London this morning.

Hey, Alphonso, good morning.

ALPHONSO VAN MARSH, CNN CORRESPONDENT: Good morning, Soledad. How are you?

Just want to let you know that we are expecting to get word from the British secretary to learn whether if Prince Harry will be heading to Iraq. Now we understand that his regiment, the Blues and the Royals (ph), will be heading there possibly in a matter of weeks. And probably for a six-month stint.

Now British military officials are keen to point out that this is part of a long planned military rotation of British soldiers there. There are some 7,100 British soldiers working in Iraq, serving in Iraq at this moment. But, at the same time, it does come, Soledad, one day after British Prime Minister Tony Blair announced a phased withdrawal of some soldiers serving in that country. One hundred and one British soldiers have been killed in action in Iraq since 2003.

Now this, of course, raises some security issues. Is it wise to put the third in line to the throne into a combat zone? The former military commander says when Prince Harry decided to join the army, he wanted to fight for his country and we ought to let him go.

(BEGIN VIDEO CLIP)

COL. TIM COLLINS, FORMER ARMY COMMANDER: His regimen is going there and he will wish to do his duty. And I should think that the nation would like to see him doing his duty. And I'm certain his father and the queen would like to see him there with his men. They will look after him and he will look after them and together they will do their duty.

(END VIDEO CLIP)

VAN MARSH: Again, Soledad, we're expecting official word whether Prince Harry will be serving in Iraq, probably in the southern city of Basra or just outside of Basra in the southern part of Iraq.

Soledad.

S. O'BRIEN: Alphonso van Marsh for us this morning.

Alphonso, thank you.

Let's talk weather, shall we. Winter weather alerts are posted throughout the Northeast this morning. Meaning it's going to be a messy travel day probably. It's quarter past the hour. That means it's time for Chad, who's watching it all for us.

Hey, Chad, good morning.

(WEATHER REPORT)

M. O'BRIEN: And now the hard truth about soft drinks and caffeine. This morning, Coca-Cola says it will soon list the caffeine content on labels of all the drinks it sells in the U.S. They'll roll out the new labels first on Classic Coke cans and bottles in May. Those labels seem like a good idea, don't they? Especially for those high-caffeine energy drinks that have taken the market by storm. One, in particular, drawing fire this morning in Colorado. It's called Spike Shooter and it packs three cups of coffee worth of caffeine in an eight-ounce drink. The problem is, some teens are overdoing it and ending up very sick. Greg Hunter is here now to show us what this might mean for your kids.

Good morning, Greg.

GREG HUNTER, CNN CORRESPONDENT: Good morning, Miles.

Well, several students at some Colorado Springs high schools are claiming they got sick after drinking Spike Shooter. They reported symptoms of nausea, heart palpitations, shortness of breath.

Now the drink is sold nationwide and we picked up some drinks sold right here in New York. It's sold nationwide in some health food stores and then the like. Primarily sold at those places, it comes in an 8.4 ounce can.

Now the can spells out warning. "Begin use with one half can daily to determine tolerance. Never exceed one can daily." It also comes with some other stiff warnings. "Don't use if you're under the age of 16, elderly. Do not take with other stimulants or weight loss supplements or any prescription, over-the-counter medicine. Do not take if you are pregnant." Those are all warnings on the can.

But after those high school students drank it, they say it made them sick. The schools were so concerned they sent out a letter. Now here's what one high school said. "I wanted to alert you to a new health hazard to our kids here at Liberty, as well as other kids in the community. Please take a few minutes to read this. This is not a joke. Oneo f the many problems with this drink is that it contains 16,000 (yes, thousand) percent of the RDA," (recommended daily allowance), "for Vitamin B, as well as the equivalent amount of three cups of coffee." Now, one of the many problems of unregulated herbs like this, is Yohimbe, it's basically in Spike Shooter. This school's same letter went on to say, "there's no listed amount of Yohimbe on the label. It (Yohimbe) can also cause reactions with anyone who has eaten cheese, liver or any other foods containing tyramine."

Now CNN did a little research of our own and we found out what Yohimbe is. Yohimbe is not on the FDA supplement word list, but in a 1993 press release on their website, they explain a little more, saying Yohimbe is actually tree bark. It's marketed in products for bodybuilding, enhanced male performance. And, listen to this part, serious adverse side effects, including renal failure, seizures and death have been reported.

So we contacted the company and asked them several questions, including why do these kids out in Colorado -- why did some of these kids get sick. They responded in part, "we firmly believe that the product is safe. Therefore, the only explination for kids becoming sick is that they are not following the label instructions or are abusing the product. There are thousands of people who are drinking Spike daily with no negative effects and we are receiveing overwhelmingly positive feedback."

Now the company says they have sold a million cans nationwide since about October. That's a very short period of time. And they don't have any other complaints.

M. O'BRIEN: You know, Greg, I think a lot of people are surprised that the Food and Drug Administration, or some other arm of the government, doesn't regulate these drinks. Caffeine is, after all, a drug.

HUNTER: Well, caffeine and all these other ingredients, like Yohimbe or whatever. And the reason why they're not regulated is because they took that power away from the FDA. So that's why you keep hearing these things pop up about energy drinks. They're not regulated.

M. O'BRIEN: You know, it just seems to me that all those labels might be something that would tempt teenagers to try it. A little bit of forbidden fruit, maybe.

HUNTER: Oh, yes.

M. O'BRIEN: Do you think so?

HUNTER: I think so.

M. O'BRIEN: All right. Greg Hunter, thank you very much.

HUNTER: OK.

S. O'BRIEN: Ahead this morning, are interest rates headed up? Ali Velshi is "Minding Your Business" straight ahead.

And we've talked all about little Amillia all week long. Lots of twists and turns. And she's only born 17 weeks old or something. Well, the new update and some very good news to tell you about this morning. We'll bring you more on Amillia's story straight ahead.

(COMMERCIAL BREAK)

M. O'BRIEN: The most news in the morning right here on CNN.

New fears Iraqi insurgents are turning to chemical bombs as their new weapon of choice. Two chlorine tankers exploding in as many days. At least a dozen are dead.

Stepped up inspections on the menu at some meat and poultry processing plants this morning. The Department of Agriculture aiming to stop the spread of E. Coli, among other things.

Soledad.

S. O'BRIEN: An update on the story we've been following for you all week. One of the tiniest babies ever born is finally at home this morning. Amillia Taylor left the hospital in Miami with her mother and her father on Wednesday, about four months after he was born.

Remember, the doctors were about to release her and then at the last minute they said, no, she needs another day in the hospital. So they put her back in the hospital. Now she's been released. She only gestated for 21 weeks, which is very unusual. Weighted only 10 ounces at her birth. Doctors say the baby has still got a long road ahead of her, but they are very optimistic about her chances, which is great news.

M. O'BRIEN: Whole Foods is sowing its wild oats. Twenty-five minutes past the hour. Ali Velshi "Minding Your Business."

Good morning, Ali.

ALI VELSHI, CNN CORRESPONDENT: Good morning.

Everybody talks about the fact that because we live in this -- we work in this building, we must shop at Whole Foods. I'm not a big organic food kind of guy. But apparently I'm in the minority. Let me tell you about this.

Whole Foods is the country's biggest organic and natural foods chain. And it is buying one of its big rivals called Wild Oats, based out of Boulder, Colorado. That deal is worth $565 million.

It's a big deal because Whole Foods, while it is the biggest, is feeling the pinch from other retailers, like Trader Joe's. I'm not familiar with some of these names. I know it very well. Trader Joe's, Wegmans, a lot of these niche players who are getting into the organic market. But the biggest one, of course, the 800-pound gorilla, is Wal-Mart getting into this business. So Whole Foods is getting a little bit bigger.

Now inflation. The report that came out about the consumer price index -- that's how we measure inflation -- it came out yesterday. And it was a little bit higher than expected in January. Now I won't bore you with the numbers, but the headline here is that energy prices were lower in January. But a lot of things were higher, including housing, clothing, food and medical care. And when I say housing, I mean housing costs.

So those things are challenging inflation. That, of course, all affected markets yesterday because inflation fears means that the Fed has to start paying attention. Do they have to raise interest rates to cause people to spend less money and control inflation? Most people don't think so. But the Dow did retreat a little bit. In fact, you can see 48 points lower there to 12,738. And that's where we start the day.

Soledad.

O'BRIEN: All right. Ali, thank you very much.

The top stories of the morning are coming up.

A disturbing, new way of attacking by insurgents in Iraq. Toxic chemical bombs that seem to hurt far more than they kill.

And Secretary of State Condoleezza Rice is offering Iran an olive branch, but there's one condition.

Plus, the jury goes back to work this morning in the Scooter Libby case. Just who is sitting in judgment of him? We'll take a look this morning at the Libby jury, straight ahead on AMERICAN MORNING. The most news in the morning is right here on CNN.

(COMMERCIAL BREAK)

S. O'BRIEN: Getting personal. The race for president is taking an early and ugly turn between Barack Obama and Hillary Clinton.

M. O'BRIEN: AN olive branch for Iran. Secretary of State Condoleezza Rice makes a surprise offer, even as Iran refuses to pull the plug on its nuclear program.

S. O'BRIEN: And an update on a story we told you yesterday. The mom looking at two years in prison for throwing a McDonald's cup full of ice at another driver. Well, she hears the final word from the judge. We'll tell you what he says, straight ahead on this AMERICAN MORNING.

Welcome back, everybody. It's February 22nd. 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.

In Iraq, what could be a disturbing, new trend. A new insurgent tactic of chemical bombs part of a new wave of attacks?

More now from Arwa Damon in Baghdad. Arwa, hello.

ARWA DAMON, CNN CORRESPONDENT: Hello, Miles.

Well, we have seen three attacks since January 28th using chlorine gas. Now, the first of those took place in Ramadi, where a tanker carrying chlorine gas exploded outside of a hospital, killing 16 people.

Now, there were no reports of anyone being hospitalized from the aftereffects of that poisonous gas in that attack. But, in last week alone, two other attacks, both of them involving chlorine gas, killed at least a dozen Iraqis and hospitalized over 200 of them.

The first of them taking place just north of Baghdad in Taji, where a tanker carrying chlorine gas also had a bomb hidden inside of it. It exploded outside of a restaurant. Twenty-four hours later, on Wednesday, a car bomb packed with explosives and with cylinders carrying chlorine gas exploded outside of a hospital.

Now, while this is perceived as being a new insurgent tactic, it is not entirely surprising. Remember, the insurgency here is notorious for constantly changing its tactics and looking for new ways to continuously strike at the Iraqi people to further instill that sense of fear. But the use of these industrial chemical weapons is raising a number of red flags. These are easily available throughout Iraq -- Miles.

M. O'BRIEN: Arwa Damon in Baghdad.

Thank you very much.

Coming up in our 7:00 Eastern hour, we're going to talk to Major General William Caldwell. He's the chief spokesman there in Baghdad. We'll ask him about these new insurgent tactics, choppers down, as well as the British pullout of troops.

That's coming up, 7:00 Eastern -- Soledad.

S. O'BRIEN: A United Nations report on Iran's uranium enrichment program is due out today, and it could bring more sanctions. Iran is refusing to budge on Security Council demands that it scrap its nuclear program. At the same time, though, Iran is calling for talks with the U.S. to settle the dispute.

And we're hearing about a new offer for Iran about those talks from Secretary of State Condoleezza Rice. She sat down for an exclusive interview with CNN's Zain Verjee.

(BEGIN VIDEO TAPE)

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT (voice-over): Softening on another member of the so-called axis of evil -- Iran. Condoleezza Rice offered Iran an olive branch -- take us up on talks, any time, any place. But stop enriching uranium first. CONDOLEEZZA RICE, SECRETARY OF STATE: We can talk about anything. That's an offer that I would renew today. We have, in fact, even under these circumstances, we've cooperated some in Afghanistan and I think that was useful.

So there is a different path.

VERJEE: Rice was referring to Iranian support of the U.S. during the war in Afghanistan.

Since then, relations have gone sour. U.S. warships nearby in the Gulf, the U.S. is going after Iranian agents in Iraq and is now beefing up missile defense shields in Europe in case of Iranian attacks.

(on camera): Is there a danger that in this kind of atmosphere that -- and lack of direct communication, that there could be missteps on either side that could trigger an accidental war?

RICE: Let me just say here, publicly, the United States has no desire for confrontation with Iran. None.

VERJEE: This week's U.N. deadline for Iran to quit enriching uranium could ratchet up the war of words and lead to more sanctions. But Iran's president defiantly insists Iran's nuclear program is going ahead full steam.

Rice appeared to be signaling to Iran's leaders, impatient with Mahmoud Ahmadinejad, that she hears them.

RICE: The option that we have is to continue to try to convince those who are reasonable in Iran that the course that they're on is destructive.

VERJEE (on camera): But, if Iran proceeds with its nuclear program, Secretary Rice says the international community will continue to play hardball.

Zain Verjee, CNN, Berlin.

(END VIDEO TAPE)

M. O'BRIEN: Coming up on the program, a mega-storm in the Midwest could make for a messy and dangerous weekend. Our severe weather expert, Chad Myers, of course, will have that.

And Scooter Libby's fate now in the hands of the jury. We will look at the men and women who will decide his fate.

And will ice land her in the cooler? A young mother facing up to two years in prison for throwing a cup of ice. We'll tell what you the judge decided.

The most news in the morning right here.

(COMMERCIAL BREAK) M. O'BRIEN: The most news in the morning right here.

Iraqi insurgents exploded a truck full of chlorine gas for the second time this week. At least a dozen killed in those blasts, 200 injured.

And stepping up inspections of meat. The Department of Agriculture today announcing first overhaul inspections in a decade.

In Washington this morning, the Scooter Libby jury will begin its second day of deliberations. The former chief of staff for Vice President Cheney accused of lying to investigators who were trying to find out who leaked the name of a CIA agent.

CNN's Brian Todd takes a look at the panel that holds Libby's fate in their hands.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice over): Judge Reggie Walton sends 12 citizens off to make one of the biggest decisions of their lives. One instruction stands out: Consider "... your assessment of the memory capacity of the person whose memory is in question."

GUY SINGER, FMR. FEDERAL PROSECUTOR: In this case it's obviously critical. This is a case where, if the jurors are going to focus on any one instruction, that one goes to the defense's entire argument.

TODD: The argument that Lewis "Scooter" Libby, Vice President Cheney's former chief of staff, did not lie to investigators as is charged, but misrembered conversations with reporters about the CIA job of Valerie Plame-Wilson, the wife of an administration critic. Jurors are told, "Don't hold Libby's decision not to testify against him."

The defendant's fate in the hands of an educated panel of two African-American women, six white women, and four white men. They include a museum curator, a Web architect, a government lawyer, and a former "Washington Post" employee who once worked for Bob Woodward, the reporter who testified for the defense.

A studious group that pulled off one of the most bizarre displays ever seen from a jury. Valentine's Day, they return from a break wearing identical red T-shirts with hearts on them. All but one juror.

Another, a retired math teacher, reads a statement thanking the judge and declaring, "While we're united in this, this is where our unity ends." He then says they're committed to looking at the evidence independently. It draws uneasy smiles from the attorneys.

SINGER: You know, both sides are -- the wheels are spinning inside and they're thinking about what this means. And they're smiling along because that's all you can do.

TODD (on camera): Now all either side can do is wait. Scooter Libby waits, knowing that if this doesn't go in his favor he could spend up to 30 years in jail.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

S. O'BRIEN: Here is a story that we thought was pretty incredible when it first caught our eye, a woman in jail for lobbing a cup of ice at another driver in another car. Well, people locally call it the McMissile case, although the consequences were very, very serious.

The woman was convicted, sentenced to two years for propelling a missile, is what they called it legally, at an occupied car. Well, there is an update this morning for you.

Her name is 25-year-old Jessica Hall, and she got the final word from the judge -- there she is hugging her attorney -- she was given five years probation instead of prison time on Wednesday. Family and friends were cheering.

Hall's got three small kids. She's been in jail since January 4th. She was on the verge of losing her military housing if she didn't get back in her house. Anyway, she's expected to get out today after the state of Mississippi dropped charges against her for some bad checks that she wrote.

M. O'BRIEN: Coming up, an act of chivalry, or a bizarre attack? Why one guy in Wisconsin might want to turn the volume down the next time he watches an adult movie.

And if you're trying to lose weight, we'll tell you why all that exercise might be a waste of time.

That's ahead on this AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody.

This just in to CNN. It looks as if Prince Harry, third in line to the British throne, is, in fact, going to be going to Iraq. We've got a statement here from British Ministry of Defense saying that only that Prince Harry will be deployed to Iraq.

We're going to take you live to Buckingham Palace for an update in just a little bit. The big questions, of course, that it raises this morning is, Prince Harry, who's always said he wanted to be treated like a regular, ordinary soldier, is not an ordinary soldier. He's a royal, and that raises some very thorny issues about how to deal with his security.

We're going to get in to that and much more straight ahead this morning -- Miles.

M. O'BRIEN: It's about a quarter of the hour. Chad Myers at the CNN weather center, and he's watching a cyclone off the coast of Africa, among other things.

(WEATHER REPORT)

S. O'BRIEN: On the political ticker now on CNN, former Senate Democratic leader Tom Daschle is throwing his support to Barack Obama in the now very crowded 2008 presidential race. Daschle had considered running for president himself next year. He served as majority and minority leader in his three terms in the Senate before he was voted out in 2004.

Republican presidential candidate John McCain is standing by his criticism of Donald Rumsfeld. At a campaign stop this week you will remember Senator McCain called Rumsfeld one of the worst secretaries of defense in history and accused him of mismanaging the war.

Vice President Dick Cheney said that Senator McCain said he should apologize, but McCain says he's not going to.

Of course all the day's political news is available any time, day or night, at CNN.com/ticker -- Miles.

M. O'BRIEN: Health headlines for you this morning. If you have a child on Ritalin or another drug meant to control ADHD, the government wants you to better understand the risks. Regulators proposing some drugs -- that those drugs come with a guide that clearly states the drugs can cause psychiatric problems, heart trouble, or even sudden death. The drugs already carry a special warning label.

Smoking may be bad for your mental health as well. A new study out this morning says people who smoke are more likely than nonsmokers to suffer from Post-Traumatic Stress Disorder after enduring a traumatic event. The study is published in the "Journal of Clinical Psychology."

And if you're trying to lose weight, maybe you don't need to exercise after all. Couch potatoes cheering all over the land now.

A new study says dieting alone works just as well as dieting plus exercise. But researchers point out exercise still lowers the risk of heart disease, diabetes, and some other things, like cancer. The study appears in the "Journal of Clinical Endocrinology and Metabolism." I can't pronounce that.

S. O'BRIEN: But, I mean, as long as you just don't eat and you diet enough, that makes sense, right? I mean, the whole point of exercising, that you burn more calories so you can eat more.

M. O'BRIEN: I think the message is that you still should exercise. It is good for you, but just depriving yourself of food does shed the pounds.

S. O'BRIEN: Yes. I know. Starving would work, too, but no one wants to do that. That's idiotic.

M. O'BRIEN: Starving, that's bad, too. Don't do that. S. O'BRIEN: All right. Here's another weird story.

A guy makes what he says was a very honest mistake. It certainly was a very strange mistake.

A Wisconsin man is accused of busting into his neighbor's apartment armed with a sword. He says he thought he heard a woman being attacked. It turns out it was on TV, a certain movie the guy was watching, an adult film, we like to say.

Heather Shannon of our affiliate WTMJ has our story.

(BEGIN VIDEOTAPE)

BRET STEIGHORST, WAS WATCHING PORN: It's a little world.

HEATHER SHANNON, REPORTER, WTMJ (voice over): Bret Steighorst was mistaken for a rapist after his neighbor heard some unusual noises coming from his apartment.

STEIGHORST: I was watching an adult movie.

SHANNON: Apparently way too loudly. His downstairs neighbor, James Van Iveren, heard it. Only he thought a woman was being raped.

Instead of calling police, he took matters into his own hands. Van Iveren ran up the stairs with his sword. He kicked in the door, and he also broke the door's lock.

STEIGHORST: He comes in with his three-foot-long sword and starts pointing it at me and going, "Where is she?"

SHANNON: Van Iveren forced Bret at sword point to open all of his closets and prove he wasn't holding a woman hostage. When he didn't find anybody, he left. Van Iveren is now charged with disorderly conduct. Their encounter is all the talk at the bar next door.

UNIDENTIFIED FEMALE: I would be happy if someone tried to save me.

UNIDENTIFIED MALE: I, you know, would all like to see maybe the courts work with him and, you know, give the guy a little bit of a break.

SHANNON: Bret now thinks twice when he hears a knock at the door. But will he think twice while watching adult films from now on?

STEIGHORST: No way. No, I'm just going to watch it with the sound down, or I'll buy myself some decent headphones.

(END VIDEOTAPE)

S. O'BRIEN: That's right, Bret, the decent headphones might be helpful.

That was Heather Shannon of our affiliate WTMJ with that story.

By the way, the guy, you know, you might think, like, well, why a sword? You think you hear a woman being attacked, you grab a sword? Well, apparently...

M. O'BRIEN: The first thing he had nearby, right?

S. O'BRIEN: Well, apparently, a family heirloom in his apartment.

M. O'BRIEN: Use the heirloom when needed. All right.

S. O'BRIEN: Apparently.

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

Coming up, a battle between Verizon and Vonage. Ali Velshi is "Minding Your Business." And it's an all "V" segment -- Vonage, Verizon, and Velshi.

Plus, a disturbing new method of attacks by insurgents in Iraq -- toxic chemical bombs. We're going to ask a top U.S. general in Baghdad what's going on.

And he's a mentor to thousands and he's now issuing a call to arms in the battle of the bulge.

Dr. Sanjay Gupta will explain that.

You're watching AMERICAN MORNING. The most news in the morning right here on CNN.

(COMMERCIAL BREAK)

M. O'BRIEN: Verizon launches a lawsuit that could end discount Web phone service.

Say it ain't so, Ali Velshi -- five minutes of the hour now.

S. O'BRIEN: I just signed up for this. They can't end it.

ALI VELSHI, CNN CORRESPONDENT: Yes. Well, here is the headline.

Verizon is suing Vonage. Verizon, of course, is the second biggest provider of landlines, residential phones. Vonage is the biggest Internet startup for voiceover Internet protocol, which is basically phone service through your Internet. It's transparent once you've had it installed.

But what's happening here is Verizon says Vonage is infringing on some of its patents. Sprint, by the way, is also suing Vonage.

Vonage says it's not. And this is a fuzzy area because these Internet startups don't have the patent protection that the traditional phone companies have. What's at the bottom of this is that the phone companies are more expensive than the -- than the Internets, than the voice phone services. And if they continue to sue, the phone companies have the money and the wherewithal to sue these smaller companies.

Vonage is the biggest of the Internet companies. The other ones are much smaller. If they get this sort of chill, they can't have judgments against them of this size. This is over $100 million.

And it could sort of get them out of the business. That's what analysts are saying, that the first opportunity in years to have lower phone service might be quashed by this.

We will follow this very closely.

The other little piece of news I want to give you is that in Canada there's a cell phone service, Teles (ph). It's the second largest phone company there. They decided that they would have downloadable porn to their handsets. The Archdiocese of Vancouver didn't like that idea, put a lot of pressure on it.

Teles (ph) now saying it would appear the customers are more comfortable receiving their adult content over television sets rather than cell phones.

M. O'BRIEN: But always use a headphone if you are going to do that, as we learned just a moment ago.

VELSHI: You know, I don't make phone calls on my phone. I don't even text, really.

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

VELSHI: Bye.

S. O'BRIEN: Thanks, Ali.

Some of the other headlines we are following for you this morning.

(NEWSBREAK)

(WEATHER REPORT)

M. O'BRIEN: Marching orders. Word just in that Britain's Prince Harry is headed to Iraq. A live report from London straight ahead.

S. O'BRIEN: Toxic terror. Iraqi insurgents appearing to embrace a chilling new tactic using chlorine bombs on innocent civilians.

M. O'BRIEN: Money for Merck. A new report raising questions about a campaign donation to Texas governor Rick Perry just before he made Merck's cancer vaccine mandatory for all kids in Texas.

S. O'BRIEN: And uncivil war. Hillary Clinton and Barack Obama have their first big campaign clash. We're live this morning from London, from Baghdad, from New York, on this AMERICAN MORNING.

Welcome back, everybody, February 22nd.

I'm Soledad O'Brien.

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

We're glad you're with us.

S. O'BRIEN: Let's begin in Iraq this morning and talk about that new plan of an attack using chemical bombs.

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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