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ANDERSON COOPER 360 DEGREES

Philippine Gunmen Take Children and Teachers Hostage on School Bus; Showdown With Iran Over Seized British Sailors Escalating?

Aired March 27, 2007 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: And we are following this breaking news situation. We're going to show you the video in a moment.
This is a bus in Manila, the capital of the Philippines, that is being held hostage right now. According to the Associated Press, two gunmen are on board this bus. Thirty-two children are on board the bus, as well as two teachers, all of whom are being held hostage.

Reports are, they are claiming to have at least one pistol, an Uzi, and two hand grenades. There are 32 children, as I said, on the bus.

Negotiations -- the -- the AP said negotiations were under way. There, you see a woman on the bus -- we presume it is a teacher -- holding on to one of the -- the children, indicating that police or somebody should call. She is pointing to a sign. We have been trying to read details on the sign.

Here's what we know that it says at this point. It says: "Our hostages are 32 kids and two teachers. We have two grenades, an Uzi, and a .45-caliber pistol. We want housing and schooling for 145 kids, and a day care center."

That is what we can make out just through the bumpy video. The -- the message is written in both English and Tagalog, which is the language in the Philippines. We have had a native Tagalog read it as well.

What is odd about this sign, clearly, it was written by someone on board the bus, and put in the window. What is odd, though, is, according to police, the two gunmen on board this bus basically had grabbed this bus as a target of opportunity. They were running after a failed bank heist.

Now, here, after we saw that woman indicating for this phone sign, this is a man, a police officer, approaching the bus with a phone, with a landline phone, that he has left outside the front door of that bus. They then motioned people away. And we have been waiting to see if anyone will pick up this phone.

At this point, we have not seen anyone pick up the phone. I don't know if we can get -- re-rack that -- that footage of the police officer very gingerly, very slowly approaching this bus, making sure that he was visible to those people on board the bus as he came up to them with the phone. It was rather a lengthy process. Here he is approaching the bus. On the phone joining us is -- is Byron Sage, an international hostage negotiator retired from the FBI.

Byron, as you're looking at this, it has got to bring back memories. What goes through your mind? It's obviously a ginger -- a difficult time for a police officer to approach that bus with a phone.

BYRON SAGE, FORMER FBI HOSTAGE NEGOTIATOR: It's -- this is probably one of the most critical time frames, is early in a situation. You're setting a -- almost a -- a pattern here of hopefully trying to convince this person that your intent is to -- is to help, and not to be threatening in nature.

COOPER: I want to just read you, Byron, this translation from this message that was -- was left in the bus window.

It says: "Our hostages are 32 kids and two teachers. We have two grenades, an Uzi, a .45-caliber pistol. We want housing and schooling for 145 kids, and a day care center."

That's, frankly, all that we can make out through the bumpy video.

That's seems odd, if this is a target of opportunity.

SAGE: It's -- the initial information, which is -- is always going to be askew, seems to be contradictory.

But the -- the mere fact that these individuals are reaching out, establishing communication, even -- even just the sign, without a two- way dialogue, is a very good sign. But the fact that they took the -- the device that was placed out there appears to be what's call a hostage rescue phone, which...

COOPER: What is that?

SAGE: It's an isolated landline, where the people inside the crisis site can speak directly to the negotiator. So, again, that's a very -- very positive sign.

COOPER: We don't know, at this point, whether or not this phone has been picked up. It was just sitting outside the bus. And there, you see it sitting for quite some time. These pictures were taken just a few minutes ago. We're still trying to monitor and figure out.

It seems like police at this point have been communicating through -- through a bullhorn. Clearly, that is not something that they want to be doing for a long period of time.

SAGE: No.

And the -- the bullhorn is -- is monotone normally. So, it's -- you are really not going to be able to convey, through inflection of the voice or anything else, any kind of emotions or -- or genuine desire to try to help these people resolve (r)MD-BO¯the situation, without anybody being -- being injured or any loss of life, certainly. COOPER: That's interesting.

SAGE: The phone will help considerably.

COOPER: That -- that really plays a big role, inflection of the voice?

SAGE: Absolutely. Absolutely.

(CROSSTALK)

COOPER: How so? It just makes -- it humanizes everything?

SAGE: Well, we -- yes, exactly.

You have heard P.A. systems over, let's say, a police cruiser, you know: Please come out of the bus. I'm concerned about your welfare.

Well, without any kind of the ability to -- to show emotion in a voice in the variance of tone, it's just -- it's as if you're talking to a robot. If you can actually get direct dialogue, like you and I have, where the voice pitch and so forth, you can read a great deal from the conversation, not just the contents of the words, but the -- how calm the people are inside or how excited they may be.

All these things can give you a great deal of insight as to who you're dealing with.

COOPER: You know, in -- the situation on this bus for those just joining us, 32 children, at least two teachers, and apparently two hostage-takers. What they want exactly, we don't know. We have been able to read our translation of a sign that is both in English and Tagalog, in which they're asking for housing for 145 kids and a day care center.

Early reports, according to the Associated Press, according -- citing police, were that these two hostage-takers had -- there had been a failed bank heist attempt, and that they had seen this bus full of kids, and they kind of grabbed it, trying to get away somehow.

Clearly, it seems like -- at this point, Byron, who is in control?

SAGE: Well, the hostage-takers are clearly in control at this point in time.

What you need is the passage of time for them to realize that they don't have ultimate control. They have control of that isolated crisis site. But, from your coverage, you can see the proximity of the bystanders and the media that are immediately around this thing. That is not good.

It's -- it represents not only a potential threat to the bystanders, but it could also escalate the emotions of the people inside. So, what they need to try to do is to isolate this environment, not in a hostile fashion, but isolate it nonetheless, so that the hostage-takers are almost forced to focus directly on the -- on the negotiators and the ongoing efforts to -- to try to end this thing peacefully.

COOPER: Byron, we're just getting some new information, again, this -- according -- from the Associated Press. They are reporting that one of hostage-takers has been involved in a previous hostage- taking involving a priest.

We're trying to find out more details on that. And, according to the AP, this hostage-taker has said that they are not going to take the phone that was offered to them, the phone which is sitting, presumably, still outside that bus, outside the front door, because he's afraid the phone is going to explode. He -- he believes it's some sort of -- of a trap.

Clearly, whatever communication they have had, they have not been able to -- to gain some level of trust.

SAGE: That's -- that's exactly right.

What they're looking for -- or what you're reading is exactly accurate. There's not a level of trust yet that's developed. And, again, that's going to come with the passage of time. And, hopefully, the -- the setting will become less and less threatening, from the standpoint of the hostage-takers in the bus.

They need to be able to calm down and to be able to begin to specifically focus on what appears to be substantive demands. These are demands that can be accomplished. Whether it's -- whether or not these demands are actually accurate, about the housing and the education and so forth, that's a doable thing.

It's when we run into people that want, you know, all of the -- all the people off of planet Earth in 24 hours type of thing that you're -- you know, that's obviously not a realistic deal, and you're -- you're dealing with someone that's not grounded in fact.

This situation appears that the -- the people inside are -- are open to trying to establish a dialogue. Now they just need to figure out what means they're going to be able to utilize.

COOPER: Do most -- I mean, this may be a stupid question -- and, again, we're watching this longer video of this police officer -- presumed to be a police officer -- he's wearing a police vest -- very gingerly approaching this vehicle, trying to establish some sort of visual connection with somebody on board to show that he is leaving a phone, a landline phone.

Byron, what did you refer to that phone as?

SAGE: It's a hostage rescue phone, is -- what we use here in the United States.

And we have -- we, the -- the bureau, I should say, the FBI, has done a -- a lot of work with the authorities in the Philippines. And they're very -- very gifted, very skilled, very trained law enforcement individuals. This being in a large metropolitan area is -- is, again, a very positive thing. They will be able to get trained negotiators, hopefully, in communication with these individuals that have created this situation.

Nobody is trying to say that they're the victim here. But the matter of fact is that, the quicker you can build rapport, genuine rapport, the safer those hostages are going to be inside.

COOPER: Byron, you mentioned a very important point earlier, that early reports are often false, misleading, sort of the fog-of-war situation.

We now have a report that one of the hostage-takers -- and I'm just reading this off the wire, as I'm telling it to you -- one of the hostage-takers, who is identifying himself as Jun Ducat -- J-U-N -- I'm not sure how to pronounce that -- Jun Ducat -- told DZMM radio by -- by cell phone -- so, apparently, one of the hostage-takers is talking to a radio station.

And he says -- and I quote -- "I love these kids. That's why I'm here. We have a field trip. I invited the children for a field trip."

He went on to say, "In case I need to shed blood, I will not be the first to fire. I'm telling the policemen, have pity on these children."

Clearly, as a police officer, as a negotiator, you don't want to have the hostage-taker -- hostage-taker not talking to you, but talking, instead, to a radio station.

SAGE: That's true.

But his -- the fact that he's expressed an element of -- of compassion for the kids, even if it's not true, the fact that that thought is in his mind is -- is, again, a positive sign that they can build upon.

Now, the -- with all due respect to -- to speaking to you and CNN, it's very -- very important to get facts and circumstances and so forth out to the public. But, sometimes, it can be problematic, if it interferes with or postpones the development of rapport between the hostage-takers and the appropriate authorities.

Now, that having been said, if this person that he's talking to on the phone, a reporter, someone like yourself, approaches this individual with a genuine spirit, if you will, and begins to build rapport, that person may well end up being the primary negotiator. And the law enforcement authorities could just kind of saddle up next to him and keep him pointed in the right direction, as far as how he continues to dialogue with these individuals inside.

This is a very fluid situation. Obviously, it's still developing moment by moment. But the fact that the authorities appear to be exercising some -- some patience and calm, coupled with the fact that the hostage-takers are in fact reaching out, these are all aspects that can be built on a very positive fashion.

COOPER: The fact -- this hostage-taker, we should just point out again, has not taken this -- this hostage rescue phone, as Byron referred to it as.

I'm watching multiple feeds of this. So, I'm seeing some pictures that our audience is not seeing. And I'm -- we will get those pictures. We will try to funnel them to you. We're now seeing some sort of a new sign being put here in the window.

I can't get a close visual on it. Again, we have a Tagalog speaker on standby who is also trying to read this. We're trying to get a look at this as well. We will try to get a closer view of that. It's a little bit out of focus. We don't have control over these cameras.

But, just to -- to reiterate, there is a phone sitting outside this bus right now, a hostage rescue phone. It's essentially a landline, a direct connection between authorities and the hostage- takers. There, you see the phone being placed down there several minutes ago.

The -- one of the hostage-takers has reportedly called a radio station in the Philippines, and has said: "I love these kids. That's why I'm here. We have a field trip. I invited the children for a field trip. In case I need to shed blood, I will not be the first to fire. I'm telling the policemen, have pity on these children."

As a negotiator, Byron -- we're on the phone with Byron Sage, international hostage negotiator retired from the FBI, a man who has experienced a lot of these kind of situations, negotiated in Colombia, in Venezuela, Chile, Middle East, as well as in Texas, retired from the FBI in 1998.

Do you want to -- obviously, you want this over as quickly as possible, but do you want to try to stabilize things and let -- you know, sort of let some time pass early on to just let things calm down, or, because children are involved, does the longer it get, the more difficult it becomes?

SAGE: The short answer to that question is yes. You do -- you do want time to pass. You want the emotionality of the hostage-taker to be able to calm down.

And his -- even though he doesn't realize it, his demeanor is going to set the tone for how young people, children, are going to react inside that crisis site. If he's in control of his emotions, it will help them considerably to be able to -- to develop a mind-set that this is just an inconvenience, you know, this is just a time that's been taken away from their -- their field trip, as he referred to it.

If they become hostile, if they become violent, then it's going to have an effect on those kids; their emotionality is going to go through the roof and that's going to put it -- extra pressure on the hostage-takers. So, what we see playing out, what I'm seeing from your feed now is, it appears that they're backing off the inner perimeter considerably. A lot of the bystanders have been moved out of the way. That -- that is the appropriate way to handle a situation like this and start to refocus the dynamic of what's going on in that bus.

Now, with the passage of time, you're going to start having normal human needs. You're going to have -- the kids are going to start getting hungry. They're going to start needing to -- to use the rest room. I don't know if there's facilities on that bus or not. But that's a very tight environment. And time is going to become increasingly critical.

And it's going to work for them, as far as building a rapport, but it can also start working against them with an excessive passage of time.

COOPER: We saw a few moments ago a new sign being placed in the window.

We have a number of Tagalog speakers, Chris Gajilan here in New York, also Jaime FlorCruz in Beijing watching this as well.

The sign, by our interpretation of it, our translation, says, "We need an amplifier so you can hear our grievances."

The other translation we had: "We need an amplifier, so you can listen to what we are asking for," essentially saying the same thing.

Also now, there was a report -- the AP is quoting the police senior superintendent, Danilo Abarzosa, who is now disputing the initial report that indicated that these hostage-takers stormed the bus while fleeing police after a holdup.

They're -- the police senior superintendent is now quoted as saying: "It looks like that's not correct. They were already inside the bus when it left," referring to left a day care center.

That would clearly seem to change the dynamics of the situation. If these people -- if these hostage-takers were on board the bus when it left the day care center that it left from, that might make it more sensible as to why they have a sign calling for -- what they said earlier they wanted in a previous sign was housing for 145 kids, as well as a day care center.

SAGE: Right.

The -- the bottom line here that we need to watch as this develops is, are those -- the children and the teachers inside that bus, are they being held as leverage, leverage to be able to -- to force the authorities to be able to give them something that the hostage-takers want?

If, in fact, that's their purpose, then that is a very good sign. That's -- that's an area that can be worked on. It's obtainable goals. It's a substantive demand, as -- as we refer to it. This, even though it's very difficult -- needless to say, the families of every single one of the hostages, I'm sure, are going through some very difficult times. But the critical thing here is that there's two basic ends to the option spectrum. One is a tactical assault on this bus. And the other one is to try to establish dialogue and talk your way through it.

It would appear that law enforcement authorities are doing exactly what they should be doing. And that's stepping back, giving these people some room to breathe, and establishing a -- a dialogue, and hopefully building rapport.

COOPER: And we're going to take a short break.

Just to reiterate the situation, 32 children that we know of, two teachers, and apparently two armed men on board this bus -- early reports had indicated the men were fleeing a botched holdup. Now, according to the police senior superintendent, that is not the case, that these gunmen were already inside the bus when it left a day care center.

One of the alleged gunmen has called a radio station in the Philippines, saying: "I love these kids. That's why I'm here. We have a field trip. I invited the children for a field trip. In case I need to shed blood, I will not be the first to fire. I'm telling the policemen, have pity on these children."

They say in one sign that they are asking for housing for 145 kids and a day care center. They also now have put up a second sign, to the right of the sign you're seeing right now, that says: "We need an amplifier, so you can listen to what we're asking for" or "so you can hear our grievances."

We're on the phone with Byron Sage, international hostage negotiator retired from the FBI.

We are continuing to follow this story. We are going to take a short break, and we will be right back.

(COMMERCIAL BREAK)

COOPER: A hostage situation we are following right now in Manila, the capital of the Philippines.

A bus, you see it there, the blinds drawn shut -- small children's faces appearing momentarily, only to disappear once again behind the blinds. The bus is surrounded by a cordon of police. There, you see what we believe is one of the teachers of these children. There are two teachers on this bus, according to the AP, and 32 schoolchildren, as well as two hostage-takers -- the teacher there indicating some sort of phone communication.

There's a sign there on the left-hand side of your screen. We have translated the sign. It's in a mixture of English and Tagalog. It basically says that they have two grenades on board the bus, and that they are -- as well as an assault rifle, an Uzi, as well as a pistol, and that they are asking for housing for 145 kids, as well as a day care center.

One of the gunmen has -- alleged -- or the alleged gunman has talked to a radio station in Manila, saying that they want -- well, they have been in radio contact, apparently, at least, on a cell phone, and that they have made this quote about caring for these children.

One of the police officers, one of -- the senior superintendent for the police -- earlier, the police had been indicating that -- that these gunmen had taken part in a botched robbery, and that they had grabbed this bus in response to that.

The police are now saying, the Philippine police are now saying, it appears as if these gunmen were on board this bus when it left a day care center, which seems to make -- make a little bit more sense, for them to be having this message about wanting a day care center built and housing for 145 children. So, they seem to have some sort of a point to this hostage-taking.

The police have offered up -- you see one of the police officers talking on a bullhorn. The police have sent in a landline, a hostage rescue phone, that has been placed by the front door of this bus. You see that happening right there. That occurred some 30 or so minutes ago.

That phone, to our knowledge, has not yet been picked up, the -- one of the alleged hostage-takers indicating to a radio station he was afraid to pick up the phone, believing it might explode, believing it was some sort of a trap. But, apparently, he has at least one cell phone on board.

A second sign has now been placed in the window, in which they are asking for an amplifier, "So you can listen to our grievances" or "listen to -- to what we are asking for."

We're going to continue to follow this situation very carefully over the next 35 minutes. And, when there are any developments, we will continue to bring them to you live, as it happens.

A number of other stories, though, that we are covering this evening that we want to get to. And we will come back to this hostage-taking as it develops.

A massive show of American force in Iran's front yard -- for the first time since the beginning of the war in Iraq, two carrier strike groups are in the Persian Gulf not far from where Iran seized 15 British sailors and marines last week. That is 10,000 American personnel, 100 warplanes conducting maneuvers in one of the most vital and volatile regions on Earth.

We have two reports on the situation tonight, CNN's Christiane Amanpour on the British.

And CNN's Tom Foreman is in Washington on the maneuvers.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Both the United States and Iran say they are not spoiling for a fight. But it doesn't look that way.

Two U.S. aircraft carriers are now conducting exercises off the Iranian coast, with more than 100 warplanes and a dozen escort ships running anti-submarine, surface-fighting, and mine-clearing drills. The Pentagon certainly wants Iran's attention.

ROBERT GATES, SECRETARY OF DEFENSE: They are watching what the United States and our coalition partners are doing, and will draw their own conclusions about the reliability of our word and the strength of our commitments.

FOREMAN: The display follows Iran's capture of 15 British sailors and marines. Prime Minister Blair says, ominously, if they are not released, the situation will move into a different phase.

(on camera): Those men were seized somewhere in this area by Iran's Revolutionary Guard, which says the men had ventured into Iranian waters over here. The British say the men were in Iraqi waters, operating under the protection of a U.N. mandate.

But that's not really what this is about. The underlying issue is down here, at the Strait of Hormuz. It's only about 30 miles across, but close to 20 percent of the world's oil flows through this point.

(voice-over): The Iranians have been conducting their own military exercises in recent months. And international analysts say the implication is clear: If Iran feels too much pressure over its involvement in Iraq, its nuclear program, or anything else, it may try to shut down the strait.

GAL LUFT, EXECUTIVE DIRECTOR, INSTITUTE FOR THE ANALYSIS OF GLOBAL SECURITY: If there is a disruption in the Strait of Hormuz, all of us, every American, will feel the pain.

FOREMAN: Worldwide oil prices jumped dramatically following a rumor that the Iranians had fired on a U.S. ship during these drills. It was just a rumor, but the tension and the stakes remain very real.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: Yes, they certainly do.

On now to London and more on Prime Minister Tony Blair's tough warning to Iran.

CNN chief international correspondent Christiane Amanpour is monitoring developments -- Christiane.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, Anderson, the prime minister has been quite discrete, quite low visible since this started just before the weekend.

But, in an interview today, he has said that, if this doesn't get resolved soon, it's going to be moving into the next phase. Now, he didn't specifically describe what the next phase would be. His spokesman was very quick to play down the notion that the next phase would be a military escalation.

What they're saying -- and this just shows how very, very delicate this is -- that the next phase could be to make public their evidence, the British say, that, as they claim, the -- their marines were in Iraqi waters and not in Iranian or other waters there.

They have not released the GPS or the satellite, but they are absolutely sure, they say, that this was a case of their marines operating exactly where they should be, and being taken, wrongly, by the Iranians.

What they're saying is, they want to try to resolve this diplomatically. They're not looking for a confrontation over this now.

COOPER: How does this get solved diplomatically? I mean, what -- what -- what is the -- the logical next step?

AMANPOUR: Well, what we know is that the British foreign secretary, Margaret Beckett, who, by the way, has cut short her trip to Turkey, and is coming back to address parliament on Wednesday, that's now, today, our time, tomorrow your time, but there have been diplomatic contacts with Iran.

The U.K. ambassador is in Iran and talking to his foreign counterparts there, the foreign minister and others. There has been no consular access to these marines although the Iranian foreign ministry is saying, quote, that the they are being treated, quote, "humanely and ethically."

You know, there is one woman among these marines. And the Iranians are saying that she is being held privately in accordance with how they should treat women and that they're all being treated well.

But the British obviously want consular access to them. And they want this resolved immediately. And now more pressure is building up here in the press and today we had a headline in one of the newspapers saying, British mother held in Iran. So these things could escalate quite quickly.

COOPER: Have the Iranians made any linkage between the holding of these British citizens in retaliation for the five Iranians captured by the U.S. in the northern Iraq this past January?

AMANPOUR: Well, there have been some suggestions to that on various hardline Web sites in the parliament in Iran. But the foreign ministry has apparently said that this is not linked, this is not the case and they're not making that kind of linkage. What they're saying is that what they are trying to do now is resolve whether the British marines were intentionally or unintentionally in Iranian waters, that's given their contention that they were in Iranian waters. Again, the Brits, the U.S. and others say -- and even the Iraqis, by the way, say that the British marines were in Iraqi waters.

But, of course, there is this disputed waterway there, the Iraqis call it Shatt al-Arab. And in fact the international community does. The Iranians call it the Arvandrud River. So there has been a long dispute over that particular waterway.

But as things stand right now, the Iranians are saying they are going to see whether the investigations lead them to conclude that the British did it intentionally or unintentionally and then the next step will be taken then.

COOPER: All right. Watching developments for us, Christiane Amanpour in London. Thanks, Christiane.

Coming up next on 360, we continue to follow this breaking story, the hostage standoff in the Philippines on this bus. Also, we know what killed Anna Nicole Smith. But what about her son Daniel?

Daniel Smith's final days, hours, and minutes. What went wrong? How could a 20-year-old die in a hospital of something hospitals treat all the time? As the inquest begins we'll talk with a renowned pathologist who did the autopsy.

Also polygamist Warren Jeffs, the latest on his day in court. And wait until you hear what he said about his claim to be a prophet when he thought no one was listening.

(COMMERCIAL BREAK)

COOPER: Well, just day after we learn what killed Anna Nicole Smith, the focus has shifted now to her son Daniel on how he died and whether foul play might have been involved. Seven people in the Bahamas are going to make that determination at a coroner's inquest that got under way in Nassau today.

CNN's Rusty Dornin reports.

(BEGIN VIDEOTAPE)

LARRY BIRKHEAD, ANNA NICOLE SMITH'S FMR. BOYFRIEND: It's just one piece of the puzzle and I don't think it's over yet.

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): Nearly all of the players were here, chased by reporters for every tidbit. Virgie Arthur, Anna Nicole Smith's mother came. She's not a witness at the inquest, but she'd like to be.

UNIDENTIFIED MALE: Your expectations today, Virgie?

VIRGIE ARTHUR, ANNA NICOLE SMITH'S MOTHER: (INAUDIBLE) the right thing to do.

UNIDENTIFIED MALE: And what is that? ARTHUR: My children (INAUDIBLE).

DORNIN: Then there's Larry Birkhead, one of the men claiming to be the father of Anna Nicole's 6-month-old girl. He's a witness, but he's not quite sure why.

BIRKHEAD: I'm just here to give information that might assist the courts in the inquest in Daniel's death.

DORNIN (on camera): How do you think you can do that, Larry?

BIRKHEAD: You know, I don't know. It's up to the judge to see if I have something that they think is worthwhile.

DORNIN (voice-over): Birkhead has told CNN previously that he knew Daniel Smith had been experimenting with drugs. Doctors say an overdose of methadone and antidepressants killed Daniel last September. The inquest was called to find out how it happened.

Several witnesses from the hospital will testify. Chief magistrate Roger Gomez says the first thing they'll explain to the jury is just what happened when Daniel was found unconscious.

ROGER GOMEZ, CHIEF MAGISTRATE: Those who would have been in attendance when Daniel came in and those who would have tried to resuscitate him, and police photographers and so on.

DORNIN: But the explanations didn't happen today. Soon after the proceedings began, Howard K. Stern's attorney, Wayne Monroe, asked that prospective jurors and the news media leave the courtroom. His concerns, how jurors should be questioned, and whether seven impartial jurors can be found in the Bahamas.

CNN has obtained the witness list, and when the proceedings resume Thursday, it will include the man who owned the house where Anna Nicole and Howard Stern lived and where Stern still lives. The two nannies who cared for baby Dannielynn, their attorney claims they overheard Anna Nicole blaming Stern for her son's death. There will also be two doctors who are expected to testify about the drugs found in Smith's body.

(on camera): Court officials had expected to pick a jury and have testimony from witnesses already under way. Now that those hopes are dashed, the next step is to resolve the latest issue so that the inquest into the death of Daniel Smith can get under way by Thursday.

Rusty Dornin, CNN, Nassau, the Bahamas.

(END VIDEOTAPE)

COOPER: And we continue to follow this breaking news story out of Manila in the Philippines. A bus being held hostage, two hostage- takers, 32 children, according to the AP, two teachers, trying to establish connections with the hostage-takers. We'll continue to follow this. We'll have more after the break.

(COMMERCIAL BREAK)

COOPER: We continue to follow this breaking news situation, new pictures we have been watching this phone -- hostage takers indicated to a local radio station he would not pick up the phone because he thought it would explode.

Now they show -- they are doing a visual to show the hostage- taker that the phone is not rigged to explode. The door of the bus opens. We're seeing these pictures for the first time. There is obviously no direct communication between whoever that person is. We assume someone with the police department and whoever's on board that bus.

Thirty-two children are on board the bus, two teachers and two hostage-takers. The sign that you are seeing there, which is a mix of English and Tagalog, this happening in the Philippines, indicates that they are armed, they have grenades as well as an Uzi, and handguns.

They have put a second sign up in the window there you see on right-hand side, that cardboard sign, indicating that they want what they call an amplifier so that people can hear what they are asking for. They want an amplifier so you can, quote, "listen to what we're asking for." That's what the sign says in Tagalog according to our translation of it.

Earlier we had seen this picture of a member of the police department approaching, very slowly and gingerly, carefully, the bus with this landline, what our hostage negotiating expert termed a "hostage rescue phone," placing it down and then running away. The phone sat outside the bus, though, for a good half an hour.

And a call to the radio station from the alleged hostage-taker had indicated that they would not pick up the phone because he believed it was rigged to explode. Early reports had indicated that these two gunmen had sort of grabbed this bus, as they were fleeing a botched holdup.

Now Philippine police are saying that does not seem to be the case, the initial reports were wrong. And what seems to be the case is that these two gunmen were on board this bus when it left from a daycare center.

They seemed to be making demands regarding children. One of their signs they have said that they want housing for 145 kids and a daycare center, a day school built for a group of children.

So it's not clear exactly how much of this was a planned out effort, how much of this is to make a statement, exactly who these hostage-takers are. In the conversation to the radio station in the Philippines from one of the alleged hijackers -- hostage-takers who is on board the bus, he had apparently been involved in a previous hostage-taking involving a priest. That according to Philippine officials. Joining us now on the phone is Hope Ngo with ABS-CBN. She is on the scene.

Hope, what can you tell us, what's the latest? HOPE NGO, ABS-CBN CORRESPONDENT: Well, we've been told the men had actually accompanied the two teachers on board the bus. We were earlier told that the men were armed with grenades and a handgun. We've also been subsequently told that the grenades are most likely fake.

Now the hostage-takers did post several signs on the bus windscreen, one of them was asking for educational benefits for 145 children at a day care center. Now one of the hostage-takers has been identified as a man named Jun Ducat. And he is -- or rather, the former national police chief and incumbent Senator Alfredo Lim has said that he has dealt with Ducat before.

The man previously took two Catholic priests hostage over a pay dispute and the senator has told us that is he is confident that no one will get hurt. Currently another senator, Ramon Revilla is on the bus negotiating with the hostage-takers.

And several government agencies are also involved in these negotiations, the Department of Education, Department of Social Welfare as well as this authorities. And the bus is currently parked a few meters away from the Manila City Hall -- Anderson.

COOPER: Do we know what the conditions are onboard the bus? I mean, there are 32 children, two teachers, it's 90 degrees, my understanding, in Manila today. Is there air-conditioning? How controlled is the situation onboard the bus? Have you gotten any report?

NGO: We saw the children wave from the window about an hour ago. They were waving to the TV cameras and they looked like they were in fairly good spirits. And we've been told that the children possibly know one of the hostage-takers. So they're not exactly -- I wouldn't say that they are not in any danger, but I would say that they are probably not as much in distress as children would be if they wouldn't -- didn't know who the people on the bus were -- Anderson.

COOPER: You said that their negotiations are under way. You said one senator was actually onboard the bus right now, is that correct?

NGO: That's right. That's right.

COOPER: And is -- there is -- you named a lot of different organizations who seem to be on the scene, the education department, the authorities. Is there one central negotiator or do we know?

NGO: There doesn't appear to be at the moment. The only person on the bus, as I mentioned earlier, was the senator, Revilla. And he seems to be the point person that the hostage-takers are talking to right now.

COOPER: Earlier there had been a report that there was this botched robbery and that they had grabbed the bus. So that is definitely not true? NGO: We've been told that the men did board the bus with the teachers at the start of the journey and that the bus driver was asked to leave the bus fairly early in the journey. This all happened at about 9:30 in the morning Manila time, which makes it about 9:30 in the evening Eastern -- Anderson.

COOPER: Does this -- how big an issue is education in the Philippines, you know, day care centers? I mean, is this something that has been in the news a lot or did this seem to sort of come out of the blue?

NGO: Well, very recently there was a study that was issued saying that both public and private schools were suffering from a lack of, should I say, quality controls because there is a bit of a concern that the educational system in the Philippines doesn't meet international standards.

But obviously, I mean, at the moment, we're in the middle of election season. You know, education is an issue, it has been an issue and it has been raised several times here. Just how political this hostage situation is, is still unclear at this point -- Anderson.

COOPER: How big a story is this in the Philippines? I mean, is this being carried live on all of the networks there?

NGO: Yes, it is being carried live, and all of the major stations were carrying it live on ANC (ph), which is the breaking news channel -- the country's breaking news channel. So I think the country -- we can safely say that the country is very glued to the set. There are 32 children involved. They look to be between the ages 5 and 8. They are very, very young. And I would assuming that their parents are very scared and very worried about their children.

COOPER: It looks like from the earlier pictures we saw to now, it looks as if the police have cordoned off a larger area, which certainly seems to be a good thing. It looks like they are in sort of more control of the situation. Previously it seemed like there were photographers very close to this bus.

NGO: Oh, this is the Philippines. I think what had happened was that we didn't note any police presence until I think about an hour after the hostage -- the hostage-taking started up. So I think the authorities are now pretty much in control of what's happening.

COOPER: Wait a minute. So this has been go on an hour before police arrived?

NGO: I would say we looked at it -- I thought maybe a half an hour to an hour. I mean, it's very, very difficult to say exactly when the police were contacted and when they arrived on the scene. But we received pictures of it...

COOPER: How are you made aware of the situation? I mean, was this sign in the window? Or how did anybody know that this hostage- taking was going on? NGO: We were given the information, and you see, this was a few hours ago and to be perfectly honest, I can't recall offhand. But we did receive information. We were given a call and we rushed a van on to the site.

COOPER: And to your knowledge, when you guys got there, it was a while before police actually came?

NGO: Yes, I would pretty much say that.

COOPER: OK. We are continuing to follow this story. Hope, appreciate your report on this. Hope Ngo from ABS-CBN. We're going to take a short break. When we come back we'll talk to a former FBI negotiator, Byron Sage. We'll be right back.

(COMMERCIAL BREAK)

COOPER: And watching now the hostage situation that we have been following for much of the last two hours in Manila, Philippines. Joining us on the phone, former FBI hostage negotiator, Byron Sage.

Byron, what do you make of these latest developments? We are getting more and more information. It now appears that these two hostage-takers were on the bus, or came on the bus with the teachers. One of them may be known to some of the students, clearly they seem to have some sort of agenda.

SAGE: Well, again, hopefully this is going to be an indication that the school or the teachers or the faculty would have done a little due diligence and would have known who they were placing these children in direct contact with.

So, hopefully that's a good thing, the dialogue is continuing and appears to be enhancing as time passes. That's also very good.

COOPER: We were talking to Hope Ngo on the scene from ABS-CBN. She was saying that there is a Philippine senator and who I believe may be this person that we are seeing on the left-hand side of the screen who is actually onboard the bus discussing things with hostage- takers. There were also a number of other agencies, the education department, obviously the police.

Does it concern you that it seems -- I mean, she was not clear if there was just one person negotiating or if it was multiple people. Does it seem hectic? Does it seem coordinated to you?

SAGE: Well, it's -- it appears to be fairly coordinated, particularly now that they've backed a lot of the bystanders away from the immediate vicinity. The fact that they were able to identify the person that apparently has some influence and respect from the hostage-takers, that's what we call a third party intermediary or a TPI.

I'm sure -- I'm certain, based upon having worked with the authorities over in the Philippines that they have done their homework, that they had to have had some level of confidence that they were willing to send this individual directly into contact with the hostage-takers.

That can be a very powerful tool. I just, frankly, would be a little concerned that they might be pushing or artificially accelerating this thing instead of letting it take its own course. But we don't have the luxury of knowing what's go on in that bus.

COOPER: Sure, yes. Of course. But an ideal situation, you allow it to take its course to let things sort of calm down?

SAGE: Yes, absolutely. And to get assurances from those individuals inside. Nothing is free. If they're asking to speak to this individual, then you would think that they would have said, look we need some assurances from you, some good faith demonstration.

We would have been trying to get some children out of there. But again, I'm not second-guessing the negotiation process as it's unfolding, because I have every confidence that they have qualified people over there that are doing it and doing it right.

COOPER: Do -- does one make promises to hostage-takers? I mean, do you -- you know, police when they are interviewing somebody, a suspect, they can say anything they want, you're allowed to lie. Is it a -- do you -- I mean, is that a good idea with hostage-takers, or should you be completely up front and not say anything that you can't deliver on?

SAGE: You know, candor is a good thing. It demonstrates honesty, it helps to build rapport and trust and so forth, but it has to be a two-way street. You need to also have that kind of relationship with the individual that he can depend upon what you're telling him and in turn you can depend upon what he's conveying to you.

Now, if they have been able to establish that kind of dialogue and exchange, again, very positive. We don't know what kind of a prior relationship that these individuals may have had with the senator or whoever that they are talking to, either directly or over the phone.

But if they're moving forward at this pace, then I would be led to believe that things are progressing in a very positive fashion.

COOPER: Let's...

SAGE: The absolute primary, overwhelming focus is the safety of the children. And I don't think that they would be inducing a third party intermediary, a person that is not known into the equation and putting those kids at risk. So I'm hoping that this is a very positive sign.

COOPER: It certainly seems that way. Byron, appreciate your expertise. Byron Sage, we've been talking to him for a lot of these last two hours, international hostage negotiator, formerly with the FBI. No one better to talk to about this kind of stuff. Byron, again, really do appreciate it.

We continue to follow this story on CNN INTERNATIONAL and we'll bring you any developments as warranted.

Another story that we have been covering today that we want to bring you up to date on after this short, polygamist leader Warren Jeffs back in court and speaking up and saying some pretty surprising things about whether or not he's really a prophet. We'll be right back.

(COMMERCIAL BREAK)

COOPER: A day of defeat in court for polygamist leader Warren Jeffs, the judge denying several motions including one to change the venue from the small town Saint George, Utah, to Salt Lake City. Jeffs is charged with forcing young girls into arranged marriages. Beyond the legal maneuvering, there was high drama as well in the courtroom. Mike Watkiss saw it all, he is a report with affiliate KTVK in Phoenix. He joins us now.

Mike, it's good to see you. Warren Jeff's lawyers tried in two different motions to get this case thrown out today. The judge said the trial is going to go on. Were you surprised by the ruling?

MIKE WATKISS, KTVK REPORTER: Not at all, Anderson. I think that the momentum in this trial has picked up. And you have to go back to the preliminary hearing last year -- late last year, when we heard the testimony of the star witness, the now-20-year-old young woman who tells the story, at age of 14, being forced into a marriage with her first cousin, a man that she detested and then this man forcing himself upon her after the marriage was arranged by Warren Jeffs.

So, I think the power of that testimony and the arguments of the defense were just not enough to overcome. I think the push in both Utah and Arizona to bring Mr. Jeffs to justice. And now on a federal level now that they have filed these federal fugitive flight charges.

So you have really got the focus on him on three different levels. And I think the momentum is there. People want to basically put this man in jail.

COOPER: I want to read you something about Warren Jeffs that a law enforcement source told The Deseret Morning News today. It is allegedly from a conversation that Jeffs and his brother had in jail that authorities taped.

"He said he is the greatest of all sinners and in so many words worked his way to be the leader and prophet when he knew he wasn't called of God to be a prophet." The source said that Jeffs asked his brother to tell the FLDS followers about this then later changed his mind.

If this is true, that's pretty damning stuff.

WATKISS: Yes. It will rock the community if, in fact, those are Warren Jeffs' words. And you've got to think that he knows that his conversations in the Purgatory Jail are being recorded. So a lot of people will tell you that Warren Jeffs is a longtime con man. And so whether these are true words spoken from the heart, or as Gary Tuchman, I think, reported earlier in your broadcast, there's real concerns, a real interest in his mental and physical health at this point.

He looked amazingly gaunt. There were some reports that he was actually drooling on himself. There was the moment when he tried to stand up and talk to the judge and the judge told him, you've got to talk through your lawyer.

So a lot of questions about what's going on in his heart and his head. But that's certainly an interesting little footnote to this story. But I don't think it has any bearing on the criminal prosecutions. It may have a big impact on his followers over in Colorado City and Hilldale, Utah.

COOPER: Yes. No one has been covering this story longer or better than you, Mike. And I understand you're getting an Edward R. Murrow Award for your coverage of this, congratulations, well deserved. Thanks for talking with us tonight.

WATKISS: Well, we're just happy to bring it to light.

COOPER: Mike Watkiss, appreciate it. A reminder, be sure to catch "AMERICAN MORNING," all of the latest news, tomorrow beginning at 6:00 a.m. Eastern. Again, CNN INTERNATIONAL will bring you any developments on the hostage situation in the Philippines we have been following. Thanks for watching, I'll see you tomorrow night. Larry King is next, good night.

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