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YOUR WORLD TODAY

Political Power Play in Russia; Suicide Bomber Strikes in Northwest Pakistan; Conflict in Darfur

Aired October 1, 2007 - 12:00   ET

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


MICHAEL HOLMES, CNN INTERNATIONAL ANCHOR: A political power play in Russia. Vladimir Putin pursues a move that could keep him in power even after he leaves the presidential office.
HALA GORANI, CNN INTERNATIONAL ANCHOR: A deadly attack. Security forces targeted. A blast leaves more than a dozen dead in Pakistan's northwest Frontier Province.

HOLMES: And a deadly eruption in the Red Sea. NATO ships are searching for missing Yemeni soldiers stationed on a volcanic island.

GORANI: And amid a recall of more than 9,800 metric tons of beef, the U.S. Agriculture Department says America's meat supply is the safest in the world.

HOLMES: Where's the beef?

It is noon in Washington, 8:00 p.m. in Moscow.

Welcome to our broadcast seen right around the world.

I'm Michael Holmes.

GORANI: I'm Hala Gorani, and this is YOUR WORLD TODAY.

We start with this, the Russian president, Vladimir Putin, enjoys approval ratings the U.S. president hasn't seen in years. Supporters say Mr. Putin has ushered in a wave of prosperity, but critics call him a czar. And worse now, he says he'll run for parliament and perhaps prime minister. This, as a former chess champion-turned- political-activist throws his hat in the presidential ring.

Let's get more on the political maneuvering in Russia. We are joined by Matthew Chance in Moscow.

What does this all mean, Matthew? Is this a way for Vladimir Putin to stay in power even though he can't constitutionally run a third time?

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: I think it's certainly a way with which Vladimir Putin could remain at the core of Russian decision-making, at the core of Russian power. What he said he will do is appear on the list of the strongest pro-Kremlin political party and stand for an election essentially in the forthcoming December elections. That would guarantee him a place in the country's parliament, the State Duma. He was also asked a question about the possibility of leading the government, about being the prime minister. He said that this was "a realistic suggestion".

And so the real importance of this is that it, for the first time, gives us some kind of strong answers to the question many observers of Russia have been asking for a long time, which is what will Vladimir Putin do when his second presidential term comes to an end in March? It seems that he is eyeing the prime ministerial job now -- Hala.

GORANI: All right. Well, Matthew, a familiar face for many people around the world, Garry Kasparov, former chess champion, this is what he had to say about the latest developments.

(BEGIN VIDEO CLIP)

GARRY KASPAROV, FMR. WORLD CHESS CHAMPION: Putin is staying. I don't think we should speculate whether he wants to be a prime minister, the party leader, or someone else. But no doubt that the parliament that he controls and the parliament that will emerge as a result of the so-called elections in December will vote -- and if his (ph) proposals. And no doubt that in March he will be still calling the shots.

(END VIDEO CLIP)

GORANI: You heard Garry Kasparov there. In March he will still be calling the shots.

Is that what Russians are saying today?

CHANCE: I certainly think it is. There's a great deal of understanding here that Vladimir Putin has been looking actively to try and find a way to remain at the core of Russian politics, and indeed, there's a great deal of desire on the part of Russian people.

If you believe the opinion polls, you mentioned he's got opinion ratings, approval ratings well over 70 percent in his country, by far the most popular politician. I think a lot of Russians will tonight be very comforted by the fact or by the idea that Vladimir Putin, when his presidential term comes to an end, will stay on in some kind of influential political role -- Hala.

GORANI: A very different political landscape when you compare Russia with the United States, that's for sure.

Matthew Chance in Moscow.

Thank you -- Michael.

HOLMES: All right, Hala.

The Pentagon says fewer U.S. soldiers were killed in Iraq in September than in any month since the summer of last year. A spokesman for the multinational forces in Iraq says the drop is due to a number of factors, ranging from a call by the radical cleric Muqtada al-Sadr to sustain the operations of his Mehdi army, to a reduction of foreign fighters coming into the country.

The Pentagon says at least 63 soldiers were killed in Iraq last month, 844 Iraqi civilian deaths were reported. It's still a large number, but it is less than half of those killed the previous month.

GORANI: Well, violence in Pakistan once again. More protests and more legal challenges against the re-election bid of President Pervez Musharraf.

Journalists staged this demonstration on Sunday to protest the violent crackdown on opposition groups by police. Critics say allowing Mr. Musharraf to again run for president while he is still army chief violates the constitution. So far, all legal challenges to his re-election bid have failed, and the vote is scheduled for this coming Saturday.

HOLMES: And adding to the increased tension, a suicide bombing in northwest Pakistan. A government official says the blast killed at least 15 people. Now, this happened in a border area where the army is battling al Qaeda and Taliban militants.

Tim Lister has more on that.

(BEGIN VIDEOTAPE)

TIM LISTER, CNN INTERNATIONAL CORRESPONDENT (voice over): The suicide bomber in the garrison town of Bannu was disguised as a woman dressed in a burqa. Police say he detonated the device as he climbed out of a rickshaw near a checkpoint, killing several officers, as well as bystanders.

Hundreds of people have been killed in suicide attacks like this since July, when security forces stormed the Red Mosque in Islamabad, a stronghold of radical clerics.

And it's added to an atmosphere of tension ahead of Saturday's presidential election. Opposition groups have taken to the streets of Pakistan's major cities to protest the election commission's decision that General Musharraf can run.

With emotions running high, several protests have ended in violence. There were scuffles in Lahore on Saturday between police and lawyers who played a leading role in the campaign to prevent Musharraf from standing for election while still army chief. A similar demonstration by opposition lawyers outside the supreme court in the capital ended in bloodshed.

UNIDENTIFIED MALE: Musharraf is (INAUDIBLE)! Musharraf has (INAUDIBLE) this country! He has to go back.

LISTER: Another demonstration called by journalists also ended in violence. Amid chaotic scenes, some in the crowd threw stones at official vehicles, police used tear gas to try to break up the protests. More than 60 people were injured. The weekend violence quickly became a political issue.

After reviewing video evidence, supreme court judges ordered the suspension of two senior police officers in Islamabad. The Interior Ministry subsequently suspended the officials.

Musharraf also faces a last-ditch legal attempt to bar him from standing in Saturday's election in which members of the federal and state assemblies will choose a president for a five-year term. The general is widely expected to win, but opposition parties say they'll quit the federal and state parliaments on Tuesday in an attempt to rob his victory of credibility.

Tim Lister, CNN, Atlanta.

(END VIDEOTAPE)

(NEWSBREAK)

(COMMERCIAL BREAK)

HOLMES: Welcome back.

The African Union is looking into an unprecedented attack on one of its bases in Sudan's war-ravaged Darfur region which has left 10 peacekeepers dead. More than 20 peacekeepers are also unaccounted for after the brutal attack which took place over the weekend.

Now, reports say as many as a thousand heavily-armed men stormed the base, overrunning the 150 troops in it. This comes as Nobel laureate Desmond Tutu leads a high-level peace mission to Sudan.

But as Phil Black now reports, it is feared the long-running conflict between Arabs and non-Arabs is turning into anarchy.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice over): African Union soldiers evacuate their base in southern Darfur. This is the aftermath, the biggest attack against peacekeepers in Sudan. At least 10 were killed. Many more are still missing.

It is a significant development in a conflict the United Nations describes as the world's largest humanitarian crisis.

UNIDENTIFIED MALE: People were involved in the attack which was a messy one with more than 30 plaques (ph) and other heavy weapons.

BLACK: For more than four years, the Darfur region in western Sudan has been dominated by fighting between local rebels unhappy with the government and Arab militias armed and supported by the government. Around 7,000 African Union troops have been working to try to keep the peace, but violence has increased as there has been splintering and infighting among the various rebel and militia groups, making the volatile situation less and less predictable.

Analysts say this conflict is now so complex, it is difficult to assess who was responsible for attacking the peacekeepers.

TOM CARGILL, AFRICA PROGRAM MANAGER, CHATHAM HOUSE: The splitting up of the rebel groups, they are continually now dissenting among themselves and fighting with each other. And it's very difficult to work out who actually has control of who in this situation.

BLACK: The United Nations has approved 19,000 more peacekeeping troops to enter Darfur, and peace talks among key players are planned to take place in Libya later this month. It's believed these big changes to Darfur's political landscape may have motivated the attack.

CARGILL: The U.N. Security Council's decision to put a hybrid United Nations force, African Union-United Nations force into Darfur, has in a way thrown all the cards into the air. And we're now seeing the consequences of that, and they're falling in sometimes very unexpected places.

BLACK: There are estimates the conflict in Darfur has killed 200,000 people and created millions of refugees. Into this crisis has flown a group of experienced statesmen known as "The Elders". They include former U.S. president Jimmy Carter and South Africa's archbishop, Desmond Tutu.

ARCHBISHOP DESMOND TUTU, DELEGATION LEADER: We hope to lend all our strength to those who are determined to bring an end to this devastating war.

BLACK: A big challenge because this war is escalating, and peacekeepers are now among the targets.

Phil Black, CNN, London.

(END VIDEOTAPE)

GORANI: Well, we have been following news out of Myanmar, of course, for the last few weeks, and we understand an uneasy calm is reported in that country right now. Apparent proof that the military government has, indeed, crushed last week's wave of pro-democracy demonstrations.

Most communications have been cut off. These are some of the latest pictures that we have received from inside the country.

The military government snuffed out all but a few pro-democracy demonstrations over the weekend. The United Nations envoy Ibrahim Gambari is in Myanmar's capital right now. He has an appointment Tuesday to meet the military junta's top man, General Than Shwe. Gambari is to convey the international outrage over the bloody crackdown in the country formerly known as Burma.

HOLMES: And Japan also has an envoy in Myanmar. He's there to protest the killing of a Japanese journalist at the height of last week's crackdown.

GORANI: At least 10 people were reported killed in those clashes, but witness accounts suggest that the toll might be much higher.

HOLMES: And a lot of those who lived through it now fear for their lives.

Dan Rivers met one of them.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT (voice over): A volley of shots echoes across the street. This was the first day of the crackdown in central Yangon last Wednesday.

An injured protester is carried away, but the troops keep firing. This was the same incident in which a Japanese photo journalist was shot dead.

Now, for the first time, an eyewitness at the shooting has managed to escape the country to explain what he saw.

(on camera): And you saw the man being shot?

UNIDENTIFIED MALE: Yes, he's down.

RIVERS: He fell down?

UNIDENTIFIED MALE: He's down.

RIVERS (voice over): Aung (ph) ran for his life, and has just arrived in neighboring Thailand. He's been wandering the streets of Bangkok homeless. The only possessions he could bring are clutched under his arm in a plastic bag.

As we walk, he tells me how he lost his I.D. while scrambling to avoid the bullets. The police later found it.

(on camera): What did they do?

UNIDENTIFIED MALE: And then -- and then he -- they -- they follow me.

RIVERS: They followed you? To your house?

UNIDENTIFIED MALE: To my house.

RIVERS (voice over): Over 36 terrifying hours Aung (ph) traveled to the Thai border and then waded across a river to safety. But when the Thai police caught him, they stole all his money. He spent his first night of freedom sleeping in a railway station in Bangkok.

I lent him my phone so he can call his parents. They're OK, but say the police have been around several times looking for him. Now he's alone in this big city, a refugee without money, I.D., or shelter.

He visits the local Buddhist temple. All he has left now is his faith. It helps him to cope with the awful images of bloodshed in Yangon still swimming around in his head. He prays he'll be able to go home soon, but unless the regime there falls, it's likely he'll have to remain a refugee for the rest of his life.

Dan Rivers, CNN, Bangkok.

(END VIDEOTAPE)

GORANI: All right. We're going to take a short break on YOUR WORLD TODAY. When we come back, more subprime casualties. The latest victims of the mortgage meltdown next.

HOLMES: That's right.

Plus, the U.S. grapples with another massive meat recall. More than a dozen people sickened after eating hamburgers.

GORANI: And why South Africa can't find enough people to build its 2010 World Cup stadiums. We'll tell you why.

Stay with us.

(NEWSBREAK)

(COMMERCIAL BREAK)

HOLMES: A warm welcome back to our viewers joining us from right around the globe, including the United States, at this hour. This is YOUR WORLD TODAY. I'm Michael Holmes.

GORANI: I'm Hala Gorani. Here are the top stories we are following.

Russian President Vladimir Putin says he will run for a seat in the country's parliament. He also not ruling out becoming the next prime minister. He's forbidden by law from seeking a third term as president in 2008. Mr. Putin's announcement comes a day after an opposition group nominated former world chess champion Garry Kasparov as its presidential candidate.

HOLMES: A suicide bomber killed at least 15 people in northwest Pakistan. Police say a man in a burqa blew up at a crowded checkpoint. This attack happened near a border area where the army is already battling Al Qaeda and Taliban militants.

GORANI: The Pentagon is reporting a dramatic drop in the number of American soldiers killed in Iraq. Still, 63 U.S. troops were killed last month, but when you look at it within the historical context, that is the lowest death toll since the summer of 2006. And 844 Iraqi civilian deaths were reported in September. That's less than half of those killed the previous month.

HOLMES: Many people wondered if the Russian president, Vladimir Putin, would really step away from power when his term as president ends. Well, now it appears the answer to that question is likely no. Let's get some more on this now. We're joined by Peter Baker, he's a writer for "The Washington Post" and an author of the book on Putin's Russia. He comes to us live from Washington.

What is it about Vladimir Putin? He can't let go, can he?

PETER BAKER, REPORTER, "THE WASHINGTON POST": Look, it's not really surprising if you think about it. Look at Russian history, there's not a lot of examples of czars or general-secretaries giving up power voluntarily. And the idea that Vladimir Putin was going to spend his eight years in office, accumulating power, which has been the central mission of his presidency, and then suddenly just basically hand it over to somebody else, was always somewhat implausible.

You have to understand that in Russia to give up power is to risk your own position. The second you leave office, you are vulnerable to somebody else's whims and prosecution, and persecution and so forth. So, there's a lot of logic to what's happening today.

HOLMES: How does he do it? His popularity is exceedingly high. George Bush goes to bed dreaming of popularity like that. How does he get away with it? Do Russians not care? Do they trust him? They don't know anybody else? What is it?

BAKER: It's easy to maintain your popularity if you control television. You know, if only good images of you are shown on television that's going to affect things. Having said that, he probably is genuinely popular, even if there were a freer, more open system in Russia today. Because, in fact, a lot of Russians came out of the 1990s very burned by what they perceived to be democracy.

They associated the term and the concept with chaos and anarchy and corruption and Putin was the man who put an end to that. Russians do tend to like a man with a strong hand. He's given them that. He is probably genuinely popular, even within an authoritarian system that doesn't allow for competition.

HOLMES: It is still in theory democracy in action. As you touched on how there, how democratic is Russia. And really with the U.S. in particular pushing democracy around the world, how much of an honest broker or partner can Russia be, particularly to the U.S.?

BAKER: This is going to be a real test for are the United States, and for the West in general. Because I remember coming back to Washington, after the end of my tour in Moscow a couple years back, and I met with senior people in the government here. I said, well, what's happening in your view in terms of Russia? They said the red line is things aren't going well in terms of democracy but the red line will be 2008. If he keeps power in some way, that will be the real trip wire.

This looks like he's setting himself up to keep power. If that's the case, that's going to tell the West that in fact the pretense of democracy is just that, that this is not, in fact, a system of genuinely open competition of ideas and politics. But, in fact, the one-man-rule kind of state.

HOLMES: OK, so the change of name or title but no change in the power structure. Not perhaps a democratic partner, if you like. Look into your crystal ball. What does it mean? What does the U.S. do then if Vladimir Putin turns around and becomes the prime minister, but really he's still the president?

BAKER: Right. I think this will force the West to calibrate, or recalibrate, its understanding of what Russia -- what role Russia plays in the world today. Is it, in fact, a legitimate member of the G8, a club that's meant to be of large democracies? Is it going to be a partner on issues in terms of stopping terrorism, and so forth? There are multiple issues that the United States and Europe have to deal with and they are looking at Russia in a more jaundiced way, today, I think, than they did three, four, or five years ago.

HOLMES: I appreciate your insights, Peter. Peter Baker, writer for "The Washington Post", and author of a book on Putin's Russia. We appreciate your time.

BAKER: Thank you.

HOLMES: The Great Lakes, in the U.S. and Canada, for that matter, are losing water.

GORANI: People who make their living there say it's like nothing they've ever seen. CNN's Miles O'Brien takes a look.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN TECHNOLOGY CORRESPONDENT (voice over): Where has all the water gone? It's a question they are asking along the shores of the Great Lakes. Av and Janine (ph) Crow have been on Georgian Bay for 40 years.

O'BRIEN (on camera): What do you see out here?

AV CROWE, GEORGIAN BAY RESIDENT: Right up to my neck. Standing here, I could be right up to my neck.

O'BRIEN: Really? That was how long ago?

A. CROWE: Eight years.

O'BRIEN (voice over): Over the at the Twin Bridges Marina, where the waterline is directly linked to the bottom line, there used to be enough water to dock 40 boats, but now the owner Brian Ramier can barely handle 20.

BRIAN RAMIER, TWIN BRIDGES MARINA: If the prediction is for it to go down lower, I won't have these docks spaces for sure. I will be a dry land marina that can look at the water.

O'BRIEN: He is getting plenty of business replacing or repairing trashed propellers. So why is this happening? It very likely has something to do with global warming, but there's also a local factor at play.

UNIDENTIFIED FEMALE: The drain hole is slowly getting bigger, due to ongoing erosion, to shoreline alteration. And our research has shown that it's increased the outflow and is contributing to the low- water-level condition.

O'BRIEN: This is the drain hole, where the water in Lake Huron flows into the St. Claire River. I flew my plane here to see it for myself. It was last dredged for shipping 45 years ago. But ever since, the water has steadily carved out a deeper channel. One study shows 2.5 billion gallons of water is going down the drain every day now. But this may not be the biggest culprit. I flew north, to Lake Superior, where many believe the record-low water is part of a much bigger problem.

RALPH WILCOX, LAKE SUPERIOR FISHERMAN: None of this grass was here, that was all water last year.

O'BRIEN: Ralph Wilcox is a fifth generation Lake Superior fisherman.

(on camera): Is it possible this is just part of a natural cycle and it will come back?

WILCOX: No. I'll bet you it's not.

O'BRIEN: Why not?

WILCOX: Because I've been here 65 years now. And it's not -- this is not natural. It's too low. It went too quick.

O'BRIEN: He's still hauling some in amazing white fish. These beauties will be on a Manhattan restaurant table in 48 hours, but it's getting harder all the time. Ralph's wife of 46 years, Shirley, runs the restaurant here.

(On camera): Why do you think it's so low? What do you think has happened?

SHIRLEY WILCOX, WILCOX FISH HOUSE: Well, the global warming, I think.

O'BRIEN: Really?

S. WILCOX: Yeah, everything is changing. We don't have the weather, you know, especially our winters are changing. We don't have the ice coverage on the lakes we always have had.

O'BRIEN (voice over): The ice keeps the water from evaporating and there's much less of it these days. And a long drought here has reduced rainfall and the snow pack, which feeds the lakes and water the spring. But the folks who keeps the freighters moving on the lakes, the Army Corps of Engineers, are not convinced.

SCOTT THIEME, U.S. ARMY CORPS OF ENGINEERS: I think the jury is still out on that. There's a lot of research still being done in terms of what climate change really means, and if this is in the normal range of variability, we have seen before or not. O'BRIEN: The corps has commissioned a five-year study. But many people say now is the time to take action. They worry by the time the research is done, the Great Lakes may not be worthy of their name. Miles O'Brien, CNN, Sault St. Marie, Michigan.

(END VIDEOTAPE)

GORANI: Well, there is talk of a possible third political party in the U.S. presidential race.

HOLMES: That's right. Ahead on YOUR WORLD TODAY, religious conservatives are so unhappy with the Republican front runner, that they're threatening to break away.

(COMMERCIAL BREAK)

HOLMES: Welcome back, everyone. You are watching YOUR WORLD TODAY right here on CNN International.

GORANI: We are seen live in more than the 200 countries around the globe and this hour welcome to our America viewers.

We now turn to what fuels the U.S. presidential election machine, money. Candidates will soon open their fund-raising wallets and let the world know where they stand on the financial front. Also, religious conservatives are threatening to start a third political party. Senior Political Analyst Bill Schneider is here to talk about all of this and more.

All right, Bill, let's start with this. Who's going to run out of money? Who's going to have raised the most money? How is money going to affect the nomination race at this stage?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, it's a scorecard, like the polls. It's the alternative scorecard to the polls. And everyone wants to see who's on top, who's pulled in a surprising amount of money. These are the third quarter fundraising figures. Now, the third quarter is July, August and September. That covers most of the summer. And summer is generally a slow time for fund-raising.

So, even though the quarter ended last night, the campaigns have been slow to report their fundraising totals for the quarter, because they're not great by and large. They are expected to be lower than they were for the first and second quarters. So they are not eager to put those numbers out there.

GORANI: Any names on who might essentially have to bow out because they have not raised enough money?

SCHNEIDER: Not sure anyone is going to bow out this quickly. After all, nobody has voted yet, and they are going to try to keep going. Look, we have debates almost every week in both parties, so as long as those debates go on, and the candidates believe they have a chance, you don't have to spend money to participate in a debate. I'm not sure anybody is going to drop out. They may drop out quickly once the voting starts, however, in January.

GORANI: Sure. All right. Hillary Clinton, we have been hearing and seeing negative political pieces, also her opponents saying negative things about her. This is more for the benefit of our international viewers, but Saturday Night Live, the popular Saturday night show in the U.S. had a little skit featuring Hillary. Let's watch it, and then I will ask you a question, Bill.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Good evening, my fellow Americans. A little more than a year from now, you, the American people, will go to the polls and elect me president of the United States. I want you to know I will be humbled and honored by the trust you will have placed in me.

To my as-yet undetermined Republican opponent, the candidate I will have defeated, I want to compliment you -- whoever you turn out to be -- in advance on running what I am sure will have been an honorable, albeit losing campaign.

(END VIDEO CLIP)

GORANI: All right. That's kind of funny. All right. But negative pieces and perhaps her performances in some of the latest debates not -- not going in her favor as much as they had in past, Bill?

SCHNEIDER: Well, there has been some negative comments on the Clinton campaign recently. Look, she's the front runner. And there is this aura of inevitably that the campaign is cultivating, so there's bound to be some backlash against that, particularly in the press.

The press wants a race, and the press always takes pot shots at whoever is on top because their job is to say, let's look at this again. She is criticized for being cautious and calculating. But, you know, it hasn't really shown up in the polls. She's still on top of the Democratic polls and a strong contender.

GORANI: She is very, very far -- far ahead of Obama, her first competitor in second position, correct? He's going to have to do a lot to catch up to her.

SCHNEIDER: Yeah, she is on top, she's about 20 points ahead of Obama in most of the early primary states. So, yes, she is a formidable front runner. That's not to say she's inevitable. That skit, after all, was satire. Howard Dean and Edmund Muskie, they were bit front-runners early on. And they didn't quite make it out of the starting gate. So anything can happen.

GORANI: All right, now, GOP conservatives threatening to bolt if Rudy Giuliani wins the Republican nomination.

SCHNEIDER: Yes, that's right. There was a meeting of Christian evangelicals over the weekend. And this smaller group of them had a discussion about mounting a third party candidacy -- an independent candidacy, really -- if Giuliani is the Republican nominee because he is pro-choice or pro-abortion rights, on an issue of great concern to them. What they were essentially saying is they don't see a big difference between, say, Hillary Clinton, if she's the Democratic nominee, and Rudy Giuliani.

They would be willing to risk electing her, or another Democrat, who supports abortion rights because on that issue, they say there's -- there may not be a difference if Giuliani is the Republican. This could be very dangerous for the Republicans. Remember, Ralph Nader in 2000, he didn't get very many votes, but in a close race he got enough to deny Al Gore the presidency.

GORANI: You don't want to split the vote, definitely. Thank you, Bill Schneider, for your analysis as always.

Michael.

HOLMES: An incident to tell you about out of Austria at the U.S. embassy there actually. Austrian officials say a Bosnian man carrying explosives in his backpack tried to enter the embassy. He fled when a metal detector triggered an alarm. The 42-year-old man was apprehended, and arrested. An Austrian official says the bag contained two hand grenades, screws and nails. She did not know whether the bag was actually rigged to detonate. The same official says the man was an Austrian resident. You see investigators there on the scene.

GORANI: Now, they look fine from the ground, but look at some U.S. Navy buildings from above. Or use Google Earth, and you can clearly see what looks like a swastika. Now the Navy plans to spend more than $500,000 to mask it. Chris Lawrence has our story.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT: These navy barracks have been standing in San Diego for 40 years, but aerial photographs from Google Earth's website revealed a startling image, the symbol of Nazi Germany.

MORRIS CASUTO, SAN DIEGO ANTI-DEFEMATION LEAGUE: I don't know how anyone could take a look at that shape, and say it's only four L- shaped buildings.

LAWRENCE: Morris Casuto saw a swastika and so do the people who complained to the Anti-Defamation League. The Navy agreed to camouflage the barracks, saying it, quote, "has received approval to spend up to $600,000 for the best cost-effective solution to modify the building.

CASUTO: We asked the Navy to try to do it at the least possible cost. In my naivete, I'm no engineer, I thought some paint on the sidewalk might break up the shape. The Navy tried that. It didn't work.

LAWRENCE: The head of a California watchdog group says the military shouldn't spend taxpayer money on what it calls a manufacturing issue. And asks if someone saw a random crop formation in that shape, would they demand the farmer change it? The thing is, you can't even see it from the ground. They look like any other military buildings. Brown, blocky, boring.

(on camera): And since there's no commercial landing pattern that flies directly over the base, you're not going to see it from the air either.

The Navy has authorized well over $500,000 to essentially change a Google Earth image that may not be updated for years.

DOUG SUISMAN, SUISMAN URBAN DESIGN: $600,000 seems like a lot of money just for camouflage.

LAWRENCE: Architect Doug Sussman says if the Navy is going to spend that much, he suggests planting a garden to absorb pollution and turn the rooftop into a sustainable energy project.

SUISMAN: I think it would be unfortunate if that much money was spent for the architectural equivalent of a comb over.

LAWRENCE: Bottom line, the swastika shape will disappear. The Navy may end up putting a positive spin on a negative symbol. Chris Lawrence, CNN, San Diego.

(END VIDEOTAPE)

GORANI: All right. Coming up, labor unrest and labor shortages.

HOLMES: South Africa fights to meet its goal of building five new stadiums for the 2010 Football World Cup. Will they be there ready and waiting or not?

(COMMERCIAL BREAK)

HOLMES: Germany is celebrating after the national team won the Women's Football World Cup. The team set a few records in the process, in beating Brazil on Sunday, in Shanghai, Germany became the first team to successfully defend the Women's World Cup.

GORANI: From the women to the men, South Africa will host 31 other nations in the next World Cup. That's three years away, but already building venues -- rather, I should say, building venues is proving challenging. Robyn Curnow digs up the details.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Will be organized in South Africa.

(APPLAUSE, CHEERING)

ROBYN CURNOW, CNN INTL. CORRESPONDENT (voice over): After the excitement of winning the bid to host the 2010 FIFA World Cup, South Africa got down to the hard work of preparing for the world's biggest football tournament.

(On camera): It's still just a construction site, but this is where the 2010 World Cup final will take place. And the South Africans are emphatic that this stadium and all the others will be ready by then.

(Voice over): Deadlines are tight, and the pressure to put on a successful world cup is huge, but for South Africa, the biggest headache so far has been South Africans. Labor problems and skills shortages have hampered progress on most of the building sites. Mike Moody is the project director for this show piece stadium called Soccer City near Johannesburg.

MIKE MOODY, PROJECT DIRECTOR, SOCCER CITY: The biggest challenge is getting sufficient people. Already you are bringing in people from the Philippines as foremen. There's a huge skill shortage at the moment.

UNIDENTIFIED MALE: You finish it, OK? OK.

CURNOW: Roy Magno is part of the team of Filipinos and Bangladeshis hired by the South Africans as foremen.

ROY MAGNO, FOREMAN, SOCCER CITY: I enjoy being here in Africa. I enjoy working with the guys here, giving instruction.

CURNOW: In Cape Town, labor unrest stopped building Greenpoint Stadium venue. Construction workers clashing with police during an illegal strike, workers donning tools because they wanted $1 more a day.

ANDREW FANTON, PROJECT DIR., GREENPOINT STADIUM: This type of action could cripple this project.

CURNOW: But industrial action is a common reality in South Africa, says economist Azar Jammine.

AZAR JAMMINE, CHIEF ECONOMIST, ECONOMETRIX: The trade union movement in South Africa is particularly powerful. It keeps complaining about poverty levels and high levels of inequality without admitting that much of the problem lies due to the fact that the majority of people and workers are just insufficiently qualified with the skills to be able to do jobs that would earn more money.

CURNOW: All eyes are on 2010, and the tournament is already giving some South Africans valuable skills. This training school is situated two kilometers from the Soccer City Stadium. Prospective workers are trained how to handle tools and construct scaffolding, and 80 percent of these graduates get employment on-site.

Themba Mnisi is one of them. He's been working here three weeks and earns about $300 a month.

THEMBA MNISI, CONSTRUCTION WORKER: It's good to work here. It's nice. I enjoy this job, yes.

CURNOW: The team here at Soccer City says the 2010 deadlines will be met, even if it means bringing in more foreign workers, but long term, observers say there needs to be a massive investment in education and skills upgrading. Otherwise, the very foundations of South Africa's political and economic miracle will be threatened. Robyn Curnow, CNN, Johannesburg, South Africa.

(END VIDEOTAPE)

HOLMES: That will do it for this hour. I'm Michael Holmes.

GORANI: I'm Hala Gorani. This is CNN. Stay with us.

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