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McCain Holds Town Hall Meeting in Pennsylvania; Obama Holds Press Conference in Sderot, Israel; Hurricane Dolly Strengthens to Category 2

Aired July 23, 2008 - 10:00   ET

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


HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris. Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown.

Dolly bearing down on south Texas. Hurricane-force winds already being felt. The storm could get even stronger before landfall.

COLLINS: Before a storm heads your way, what you need to do now to be sure your home is hurricane ready.

HARRIS: And walking a tightrope in the Middle East. Can Barack Obama please Palestinians and Israelis?

It is Wednesday, July 23rd, and you are in the CNN NEWSROOM.

OK. Let's tell the story. Hurricane Dolly hitting southern Texas right now, strong winds accompanied by heavy, gusting winds. The biggest concern this morning may be flooding. Flood warnings are in effect. As much as a foot of rain could fall as the storm moves closer to the coast. We are covering the hurricane from all angles.

Our Reynolds Wolf is on South Padre Island in Texas.

Ed Lavandera is in Brownsville, right along the Texas/Mexico border.

And CNN meteorologist, Rob Marciano, is tracking the storm in the severe weather center.

A tiny strip of sand off the main Texas coast, that is South Padre Island. That is where we begin, high winds trapping residents and vacationers in place. CNN's Reynolds Wolf is live there this morning.

Reynolds, I don't know if you can really hear me, but take it away and tell us the story from South Padre Island.

REYNOLDS WOLF, AMS METEOROLOGIST: Well, the story, Tony, that we've had so far here on South Padre Island has been just conditions really deteriorating over the last couple of hours.

When we first signed on this morning, it certainly was bad. Now it's getting kind of intermittent, where we'll have -- kind of a pausing action like this, and then it will pick up again. The rain has been kind of sporadic at times, the wind has been more of a constant. But it is the rain that is the biggest concern.

You mentioned moments ago the threat of some heavy rainfall where they could see anywhere from six to 10 inches of rain from this system. Well inland, places like Brownsville could see well over a foot of rainfall between now and tomorrow. And here comes the wind one more time.

Goodness.

Well, because of the heavy rainfall and because of the threat of flooding, which is certainly a possibility, they have been stacking sandbags trying to keep the levee sound in places like Brownsville, Texas, a place that has really a stark history when it comes to these storms. Back in 1967, it was Hurricane Beulah that made its way south of this area that dumped quite a bit of rain, in fact up to three feet of rainfall in the Brownsville area. Resulted in deaths of over 50 people.

And because there is that potential for more of that activity, Governor Rick Perry has certainly gotten the National Guard ready. They've got, at this point, three different areas, staging areas, for the National Guard, in Houston, in San Antonio and in Austin. But he is also, the governor, has declared 14 counties disaster areas. That's the deal with the rain.

Let's talk very quickly about the wind, Tony. The wind, again, picking up at times. We've had some issues with some of the roofs and buildings close by. And one of the things you really wouldn't want to have in a situation with this kind of wind is to have something that might be, say, in the shape of a wing, something that would be kind of curved and kind of long. Something like -- take a look at this. This tile, yes -- see these roofing tiles that we have on many of the buildings here. You get wind under one of these and it's going to go. That's just going to be the story. These are not going to withstand wind gusts topping 70 miles an hour.

And considering that, our winds are around 95 miles an hour. And with the potential of this becoming a Category 2 storm, once it hits that 96 mile an hour point, a lot of these tiles are going to go. So a huge concern for us.

Tony, let's send it back to you in the studio.

HARRIS: OK. Just very quickly, just need to clarify just one bit of reporting, Reynolds. We're talking -- in talking about evacuations, our understanding is that there have been no mandatory evacuation orders put in place.

Is that correct?

WOLF: That is correct. No mandatory evacuations whatsoever.

But anyone who happens to be here on the island is not going to be able to get off. They closed the bridges last night, as soon as the winds exceed 39 miles per hour. Tropical storm force winds, they seal the bridges. No one can get off or back, no one can get back on until this thing passes.

HARRIS: All right. Reynolds Wolf, South Padre Island, Texas.

Reynolds, appreciate it. Thank you.

COLLINS: Sounds like a precarious situation there certainly.

And Brownsville, Texas, could also get a direct hit from Hurricane Dolly. If not, it will still feel the worst of those winds and all of that rain.

CNN's Ed Lavandera is live from Brownsville this morning with the very latest from there.

Hi, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Good morning, Heidi.

Well at least here in Brownsville you're buffered by about 25 miles of land as we're a little bit further west of where Reynolds is. But we're starting to see some of those strong winds and the rainfall starting to come into this area. We've seen it here in the last couple of hours. Based on what we've seen Reynolds experience there, we're anticipating this to intensify quite a bit as well.

But really, the streets of Brownsville incredibly quiet. We've only seen a handful of people driving around. Some of my colleagues were out surveying the area as well, report kind of the same, that throughout the city of Brownsville, things are very quiet on the streets. However, they do say that they have seen the power on in most of the neighborhoods that they've driven through.

Really, the wind is coming through, kind of peeling away the layers of the palm trees here. Just beyond where we're standing here is the Rio Grande. But it is incredibly quiet and that river, of course, is the main concern as portions here in the Rio Grande Valley -- they'll be watching and monitoring the water levels rather closely in the coming hours and throughout the day as the rain continues to fall. Some 10, 15, perhaps as much as 20 inches of rain expected to fall in this part of south Texas.

If that does happen, that kind of rainfall, county officials around here say that flooding, serious flooding, will be inevitable. The question will be, will that flooding take place in areas that is essentially ranchland and farmland, or will it be taking place in areas where there are homes? So that hasn't happened. We haven't heard reports of any kind of serious flooding at this point, but it's something that everyone here is monitoring very closely -- Heidi.

COLLINS: All right. Appreciate that, Ed Lavandera. We'll come back to you and check on things shortly.

For now, though, we want to get over to the weather center and Rob Marciano with more on this. ROB MARCIANO, AMS METEOROLOGIST: Hey, guys.

This thing is still holding itself together real nice.

COLLINS: It looks like it.

MARCIANO: The only hope that we've got is that the northern eye wall in the last couple of frames looks like it's taken a bit of a hit. So we'll hope that that's the case. It's still a strong Category 1 storm. You see the eye just -- just unveiling itself. When I see that kind of thing, I think about Katrina and once it got into the Gulf of Mexico and that eye just kind of unveiled like pulling the shade up in the morning, and boom, there was the sunshine.

This is no Katrina by any means. That's the good news here.

But you see the northwestern part of this eye wall? It looks like it's -- this part at least is collapsing, but the southern part is still well intact. So this is going to swirl around and create havoc for the folks who live along the coastline here for the next several hours.

We will pretty much -- an hour from now until about 1:00, 2:00 is when landfall is going to occur. Hurricane warnings posted from Corpus Christi south towards Brownsville and then beyond that down towards the Texas border and through Mexico. We've got these tornado watches that are posted -- or one until 11:00 this morning for the potential of seeing tornadoes swirling around the northern quadrant, which is typically the most destructive quadrant. You factor in the speed of the winds swirling around the center and then also the momentum of the center heading in this general direction. So that would make the winds a little bit stronger here. That's what we call the bad side, the dirty side.

That is where they get the most storm surge as well. And storm surge, by the way, will be anywhere from four to eight feet above the normal tides with some wave action alongside that and riptides, by the way, that will be felt all the way towards the panhandle of Florida. So just be aware of that. You think you're having a vacation in Florida somewhere on the West Coast, Gulf of Mexico, you're going to see some dangerous riptides here today and tomorrow. So just be aware of that.

There you see -- you saw the eye wall there coming onshore. A couple of -- another neat thing -- we talked about these hurricane reconnaissance missions. We have this great data, and it shows the flight path of these things. They come out of Keesler Air Force Base in Mississippi and they drive right into the heart of the storm and then they do these crisscross patterns. And here are some of the numbers that we get directly here into the CNN weather center, showing you the surface pressure, wind level, flight level winds, typically about 10,000 feet, and then estimated surface winds with some of the drops on that they send down there and then some of the instruments they have on the nose and the belly of the aircraft taking some of these measurements. This is a P-3. They also take C-130s. So two types of aircraft that will fly in and out of this thing. And they criss-cross, they punch right through the eye, and they take these all-important measurements that give us the data that make for a pretty accurate forecast. This is what this plane was seeing as the storm spinning around.

How cool is that, Tony? I just -- I lost the battery on my IFB (ph), but I'll just kind of let you digest it. Obviously the plane not that big. But for illustrative purposes, it kind of gives you an idea of just how exact they try to get the measurements, the closer this thing gets to the shore.

HARRIS: That's terrific.

(CROSSTALK)

COLLINS: Look at how quickly those readings --

MARCIANO: Looks like landfall happening in the next hour or two. We'll bring it to you live here from the CNN hurricane headquarters.

HARRIS: And we need you with a fresh battery over there.

COLLINS: Yes, fresh battery. Because otherwise we're going to talk about you a lot because we know you can't hear us.

We do want to remind everybody what they're looking at, though, on the screen because we have what we call the squeeze-back. We try to do that for you every time some type of pretty major weather event. You can see on the side of your screen where this thing is located, how fast it's moving and, of course, a little map there that will show you the path as it's happening so you can keep you're eye on that.

HARRIS: Boy, more of the effects now from Hurricane Dolly. Thousands of people have moved into hurricane shelters in Texas and Mexico, an immigration detention center in Port Isabel, Texas, has been cleared out. Detainees were sent to others around the state. More than 1,200 Texas Army National Guard troops are on standby.

COLLINS: McAllen, Texas, also right in the path of the storm. We are joined on the phone now by McAllen's Emergency Management Coordinator, Kevin Pagan.

Kevin, tell us a little bit about what you're seeing from where you are right now in McAllen.

VOICE OF KEVIN PAGAN, MCALLEN, TEXAS EMERGENCY MGT. COORD.: Well, we're getting the first severe rain. Bands are now coming into McAllen, which as you notice from your map a few minutes ago is located in the central part of Adolfo County (ph) about 40 or 50 miles up the river from the coast. We're getting that first outer band and some heavy rains and the wind is picking up a bit here.

COLLINS: Well, we're understanding -- and you correct me if wrong here -- but because of this pretty big concern of the flooding that is likely to follow, that the Red Cross isn't even sending their volunteers until afterwards because of the serious concern of the possible breaching of these levees your area.

PAGAN: Yes. They had a concern in some of our pre-planning that some of the shelter locations that have been identified in previous exercises were possibly in a bad spot because of the issue of the confluence of events that might occur if we were to have a heavy rain event and a release of water from the Mexican side of the watershed and a possible breach of the levees.

And so what we did in response to that is we've actually relocated those shelters north of that -- of the worst part of that risk, and have, asked them to help. But we're fine on those shelters. We have some assistance now from the state of Texas that they sent down yesterday and the Red Cross does plan to come in as soon as the storm passes through.

But it is true, they elected not to stand up for the pre-landfall part of the event.

COLLINS: Right. All right. Well, hopefully not too many people will need them, but you really just never know. That is sort of the trick of this type of weather event.

We sure do appreciate it. Kevin Pagan is with the city of McAllen, Texas Emergency Management. Thanks so much -- the coordinator there.

And as we have mentioned earlier in the day, when the weather becomes the news, please, if you can and if you can do it safely, send us your i-Reports. They way you do it, go to ireport.com or type ireport@CNN.com in to your cell phone.

HARRIS: I want to tell you, lots to cover on the political front. This hour, Barack Obama is scheduled to hold a news conference in Israel at any moment. John McCain is in Wilkes-Barre, Pennsylvania, for a town hall meeting scheduled to begin any moment. We're checking in on those events for you, live, right here in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Mid-East peace, the focus of Barack Obama's international tour today. His latest stops, Israel and the West Bank.

CNN's Paula Hancocks is live in Jerusalem this morning.

So Barack Obama has to balance a lot of competing interests during this particular visit, does he not?

PAULA HANCOCKS, CNN CORRESPONDENT: That's right, yes. And he certainly has a lot of bases to cover.

It's been an incredibly busy day for him. He's met the majority of the leading Israeli officials. He's meeting the prime minister a little later on this Wednesday. He's been into Ramallah in the West Bank for an hour speaking to the Palestinian president and the prime minister. At this point, he's in Sderot. This is a town just near the border with Gaza. One of the worst hit towns from the barrages of rockets that we've seen from militants in Gaza recently.

And he's just -- we understand in a few minutes -- going to be talking to reporters. Now, at this point we're hearing from Israelis and Palestinians they know Barack Obama, they know who he is, but they're withholding judgment to see exactly where he stands. Obviously, Israel and all the officials, whilst talking to Obama want to know what his policy is on Iran. This is the No. 1 issue for Israel.

They cannot accept a nuclear Iran and they want to find out exactly how Barack Obama will work towards preventing that, if he becomes the American president.

Now, many Palestinians as well, were -- have also said, one hour in the West Bank out of 36 hours in all in Israel. Now, our Ben Wedeman actually asked him that question, Mr. Obama, as he walked into the Palestinian authority headquarters, but didn't actually get an answer from Mr. Obama.

But many other Palestinians are saying, well, John McCain, the Republican rival, didn't go to the West Bank when he came to the region back in March. So at this point, many people are just waiting. They're hedging their bets. The jury is out and they want to see how much more he can say. Most of what he's been saying so far this Wednesday has not been of much substance. So we're hoping in the next few minutes there will be something more substantial.

COLLINS: All right -- CNN's Paula Hancocks. Thanks so much, Paula, coming to us live from Jerusalem this morning.

HARRIS: Town hall talk with John McCain. I believe he's actually on stage right now. He is rallying voters -- there he is -- in Wilkes-Barre, Pennsylvania, this morning. We'll bring you live updates.

And later today, McCain heads to New Orleans where he will meet with Louisiana governor and possible running mate, Bobby Jindal. And check out our Political Ticker for all the latest campaign news. Just log on to CNNPolitics.com, your source for all things political.

COLLINS: Parts of Texas on alert as Dolly makes landfall. Veronica De La Cruz is watching the weather this morning.

So Veronica, we've been asking for i-Reports. What's out there?

VERONICA DE LA CRUZ, CNN CORRESPONDENT: Well we want to go ahead and show you what else is on the web at this hour. We're going to start with that and then get to the i-Reports. And we are going to start in Brownsville, Texas, that is the U.S./Mexico border town that is expected to take a direct hit from the storm, as you well know, Heidi.

So let's go ahead and show you the Web site for the Brownsville "Herald," that's the local paper there. That Web site alerting residents the city is working to open up storm shelters with enough room for about 2,500 people. Keep in mind, the city has population of about 130,000. Right now evacuations, as you know, are not mandatory.

Taking a look at that photo right there in the corner, this is taken by one of their staff members. This was yesterday before the storm moved in. And you can see the ominous storm clouds above, the sign there warning drivers on the road that there is a hurricane warning for the city.

OK, yes. Let's show you a Web site now, Heidi, belonging to our affiliate, KRGV. Moving down the page and clicking on the video box that is in the middle of the page, that's going to give us a glimpse of what the wind speeds were like as Dolly moved closer to shore.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm going to ask you to kind of zoom up there. You can see the flags here at Pirate's Landing already whipping in the wind at this hour. This is a live picture. Now, just a few minutes ago, literally, it was much calmer than this. So this is just now starting to pick up here along the coast.

(END VIDEO CLIP)

DE LA CRUZ: Again, that was video taken from our affiliate, KRGV, there on South Padre Island, showing the strength of the winds last night.

Also, now our i-Reporters. Let's get to them. They've also been watching the storm, they've been watching Dolly. This is video sent to us by Todd Work (ph). He shot this video around midnight last night. Now, even though it's dark out, you can still really hear the sound of the rain as it started to come down. Again, this is from Todd Work, he's there in Brownsville, Texas.

I want to remind you if you do have pictures, video, that you would like to share, go ahead and log on to our Web site at ireport.com. But like you've been saying all morning long, Heidi, you do have to be careful. You don't want to put yourself at risk just to get the shot.

COLLINS: Absolutely not. All right. Thanks so much, Veronica De La Cruz. Appreciate it.

HARRIS: All right. Dolly bearing down. The hurricane season gears up. Gerri Willis and what you need to know now.

(COMMERCIAL BREAK)

HARRIS: Very quickly, let's get you to Rob Marciano in the severe weather center.

Rob, I know you're following watches and warnings. You've got a new warning in Texas. MARCIANO: Yes, this one is a tornado warning. We talked about the tornado watch being in effect until 11:00 this morning. And now radar has indicated some spin, and we want to show you that spot. It's southwest of Corpus Christi by about 14 miles in Nueces County in south Texas. This is the purple polygon, which is a part of the county near Driscoll, which is affected by this.

The storm actually moving west at about 28 miles an hour. So possible tornado there in Nueces County and -- a tornado warning in effect until 9:45 a.m. and a tornado watch in effect until 11:00 a.m. We'll continue to watch this eye of Hurricane Dolly make its way towards the south Texas coastline. It will be scraping it in the next hour and then making, probably, official landfall right around the noon hour.

HARRIS: OK. Thanks, Rob.

MARCIANO: All right.

COLLINS: Also, quickly we want to get you to Senator John McCain. As we mentioned, he's speaking today in Wilkes-Barre, Pennsylvania. We want to bring you a few of his comments right now as he takes the stage.

(JOINED IN PROGRESS)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: ... I know we can do it together. I know with can.

(APPLAUSE)

America has faced greater challenges in the past, and we may face greater challenges in the future. But right now, we know how America has, in the past, joined together and faced and overcome any challenge. When President Kennedy said we were going to the moon, we went there in less years than anybody thought. When we fought Nazi Germany and the Japanese in World War II, we ended that war in victory a lot sooner than most people thought. And we now face a number of serious challenges and we can overcome those more quickly than most people anticipate.

And I want to talk about one economic issue with you because it's on everybody's mind in this room -- and of course, we know that that's the price of a barrel of oil. This has caused a serious energy crisis in America and the world. And I don't have to tell anybody here that every time you go to the gas station you are shocked by the cost of a gallon of oil. It is changing people's, not only recreational habits, but their work habits. And sometimes their ability to get to work.

People who pay the most and are hurt the most, people who are hurt the most by the increase in the cost a gallon of gas are the lowest income Americans on fixed income who drive the oldest automobiles. That's one reason, my friends, I wanted to give a little gas tax holiday, so that you wouldn't have to pay for a while. The 18 cents a gallon for every gallon of gas that you pay for in every -- and 25 cents a gallon for diesel fuel for those of you that have diesel-fuelled trucks or vehicles. And I wanted to give them a little break, a little break.

And they said, oh, no, that would be terrible. You know what might happen? We might not be able to fund some of those pork barrel projects that Congress loves to spend money on. That's what might happen.

(APPLAUSE)

We might not be able to build that bridge in Alaska to an island -- $233 million -- the bridge in Alaska to an island with 50 people on it. You know? Maybe not. Maybe what we do is give Americans a little bit of a break for the summer and maybe for a little longer so that the guy I met the other day who owns two diesel-fuelled trucks that is making a living off that and said he's going to go out of business. And I said, what about if you had a 25 cents a gallon relief on your taxes? He said, I think I could stay in business longer and I might be able to make it.

So these are tough times in America. And I want to remind you that this is an economic issue, it is an environmental issue, and it's a national security issue. We are sending some $700 billion a year of American money overseas to pay for this gasoline to countries that don't like us very much. And some of them -- and some of that money ends up in the hands of terrorist organizations. That's just a fact.

So we've got a national security challenge here. And also, it is the greatest transfer of wealth in recent American history that is taking place. And we cannot continue it. We cannot continue it.

On the climate side, my friends, I believe that greenhouse gas emissions are real. I think climate change is real. And we can embark now on clean technologies, which will also reduce those greenhouse gas emissions.

And, finally --

(APPLAUSE)

-- let me say that it's hurting America and it's hurting the lowest income Americans the hardest. And that's not fair to America. It's not what America is supposed to be all about. So what do we need to do?

Obviously, we need wind, we need tide, we need to use solar and we need to use nuclear. And let me talk to you for a second about nuclear, if I could. My friends, the Navy has been sailing ships around the world for 60 years with nuclear power plants on them and we've never had an accident. And our problem is not that nuclear power isn't safe, it's that we neither store nor reprocess the spent nuclear fuel. That's the problem.

My friends, the French -- 80 percent of French electricity is generated by nuclear power. We always want to imitate the French, OK? And by the way, in case you missed it, we now have a pro-American president of France which shows if you live long enough anything can happen in America. (APPLAUSE)

So -- what do the French do with their spent nuclear fuel? They reprocess it. We can store it, we can reprocess it, we can do both. But it will have an immediate impact on our demand for foreign oil. I think you know that the President of the United States announced that we would be, a week or so ago, that we would be lifting the moratorium on off shore drilling. The price of oil dropped $10. We need to drill offshore. We need to get our resources that are offshore and get them into our market so that the world will know -- so that the world will know, that we are on the way. We're on the way to eliminating our dependence on foreign oil.

Also, my friends, the United States of America sits on the world's largest resources of coal, the world's largest. And that coal deposits and resources can play a vital role. And I want to tell you that we can develop clean coal technology. I'm willing to spend $2 billion a year for research and development for clean coal technology.

And, by the way, think of how many jobs that would create in the state of Pennsylvania, Ohio, and other parts of the country where we have these vast coal reserves.

(APPLAUSE)

Also, by the way, I'd like to tell you in nuclear power plants, it takes the French five years to build a nuclear power plant. Why should it take the United States of America 10 or 15 years or longer? It shouldn't. And I want to build 45 nuclear power plants by 2030, and that will create 700,000 jobs in America.

(APPLAUSE)

Now, Senator Obama doesn't want to drill offshore. Senator Obama doesn't want nuclear power. He doesn't want to reprocess nuclear fuel. He doesn't want to store spent nuclear fuel. My friends, you might have seen the other day, he had one of these, he had remarkably, a presidential seal and in Latin it said something like yes we can. I think he should change that to no we won't.

(APPLAUSE)

So we can do this, my friends. There is no doubt about it.

And let me just talk to you about one other aspect of it that is so important part of this equation. And you know what it is. It's the automobile. I was recently in Detroit, and I saw this new automobile that General Motors is trying to get out by 2010, and I think they will. It's a really remarkable technological advance which uses very little, if any, gasoline. It's remarkable technology breakthrough.

We've got to have automobiles that are flex fuels, in other words, they can use ethanol. We need to have hybrid. We need to eventually get hydrogen. We've got to develop a battery for a car that will take it 200 miles before you have to plug it in again. And if people want to buy that automobile, I'd like to give them a $5,000 -- as much as $5,000 tax credit to buy that automobile.

(APPLAUSE)

And relieve this burden on Americans as well. So I call it the Lexington Project, my friends. And you can call it anything you want. But let's have no doubt, the national security, the economic and the environmental implications of this mission we have to be on.

But I want to say to you again, we have faced greater challenges. I see gentlemen and women in this room who have served their country in uniform. And they have faced great challenges, far more challenges perhaps than any of the rest of us did. They were able to emerge victorious and I'm sure that America can follow in their footsteps and their example and be inspired by them. Would I ask our veterans just to raise their hands for me please, so that I can say thank you and thank you for serving our country. I'm very grateful you're here. Thank you so much. Thank you. Thank you.

(APPLAUSE)

Now if I could address one more issue with you briefly. And that is the issue, of course, that this ongoing discussion we're having now and debate we've been having across America for a long time, concerning the war in Iraq. Now, I think you know that -- and I remind you -- that we won a very easy initial victory. And then we employed a very flawed and failed strategy that nearly failed and nearly lost us this had whole conflict. And it was a very bad strategy. I knew that it was a bad strategy. I fought against it, I argued against it. And I was called disloyal by Republicans because I knew that that strategy was failing and I knew the strategy that had to be employed.

And this nation finally, we switched that strategy and we found one of the greatest generals in American history in General David Petraeus, to lead us.

(APPLAUSE)

And the name of that strategy, we call the Cold Surge. It required additional troops. But it also required an entire new approach to the way we conducted what is basically a counter- insurgency.

We used to go into places and fight people and go back to a base. And then they would filter back in. General Petraeus' strategy is to go out into a neighborhood, set up outposts, stay, build, establish a secure environment for the people so that the rest of their lives could go continue in a more successful way. In other words, start to do business, send their kids to school, all of the things that go with a normal life. But, of course, at first, they had to put back al- Qaeda and the various Jihadist groups that were causing so much difficulty and chaos in that country.

So, over time, this strategy succeeded. And there's no doubt that it's succeeded. It has succeeded. And I'm happy to tell you that. And we are winning this conflict. And the benefits of winning this conflict are is that we will reduce the Iranian influence. And by the way, the Iranians are exporting into Iraq, the most lethal devices that are killing brave, young Americans. Have no doubt about that. But, it also would prevent al-Qaeda from establishing another base there.

It would have had an incredible impact in the region the United States defeated in having lost and gone home. And I knew all of that, and that's why I said at the time. When people said, you supporting 30,000 more troops and a new strategy, that your candidacy is doomed to failure. I said, I would rather lose a campaign than lose a war. And I meant that then, and I mean that now.

(APPLAUSE)

COLLINS: All right. So there you have a little bit of a taste of Senator John McCain speaking to folks in Wilkes-Barre, Pennsylvania. A town hall that he holding there today, talking about the economy, oil independence, alternative fuels and of course now, speaking about the situation in Iraq.

On the right hand side of your screen, Senator Barack Obama is in Israel. Sderot is where he is now and he is beginning his talk today.

Let's go ahead and listen in to him for just a moment.

(JOINED IN PROGRESS)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: ... today, Mahmoud Abbas and Prime Minister Fayad, when I was in Ramallah, earlier.

The threats to Israel security begin in Sderot, but they don't end there. They include outrageous acts of terror like the attack we just saw yesterday in Jerusalem. Rearming Hezbollah in Lebanon and an Iranian regime that sponsors terrorism, pursues nuclear weapons and threatens Israel's existence. A nuclear Iran would pose a grave threat and the world must prevent Iran from obtaining a nuclear weapon.

Today I had a series of productive discussions with many of Israel's key leaders about how to address the broad range of security threats that Israel faces and the broad threats that all of us face. I look forward to continuing these consultations with Prime Minister Olmert this evening, and I'm also looking forward to consulting closely with our European allies about Iran and other challenges in the days ahead.

Now let me just close by saying that I bring to Sderot, an unshakeable commitment to Israel's security. The state of Israel faces determined enemies who seek its destruction. But it also has a friend and ally in the United States that will always stand by the people of Israel. That's why I'm proud to be here today and that's why I will work from the moment that I return to America, to tell the story of Sderot and to make sure that the good people who live here are enjoying a future of peace and security and hope. So with that, we're going to take questions, but I might -- before everybody starts raising hands, my understanding is this gentleman right here is going to actually call on people so that I don't get in trouble with any of you. I want all of you to like me so I'm going to -- he's going to be the bad guy. He's going to make the decision, we've got a limited amount of time.

Why don't you go ahead.

QUESTION: Senator Obama, you said in OPEC convention that the (INAUDIBLE) Jerusalem could continue to be the capital city. Then you changed it and clarified later on in the -- (INAUDIBLE) wonder.

How could you be sure if your other statesmen, that you are going to be committed to the security and safety of Israel and you're not going to change it even when you're the President of the United States?

OBAMA: First of all, I didn't change my statement.

I continued to say that Jerusalem will be the capital of Israel. And I have said that before and I will say it again. And I also have said that it is important that we don't simply slice the city in half. But I've also said that that's a final status issue. That's an issue that has to be dealt with with the parties involved, the Palestinians and the Israelis. And it's not the job of the United States to dictate the form in which that will take, but rather to support the efforts that are being made right now to resolve these very difficult issues that have a long history.

Now, in terms of knowing my commitments, you don't have to just look at my words, you can look at my deeds. Just this past week, we passed out of the U.S. Senate Banking Committee, which is my committee, a bill to call for divestment from Iran, as a way of ratcheting up the pressure to ensure that they don't obtain a nuclear weapon.

When Israel invaded Lebanon, in response to the kidnapping of Israel's soldiers, I was one of the first people to state that Israel had an unequivocal right to defend itself and to rescue soldiers that had been captured. And that is what any country would do. On vote after vote I have demonstrated my support of the state of Israel.

So, the way you know where somebody's going is where have they been. And I've been with Israel for many, many years now. What is also true is I believe it is strongly in the interests of Israel's security to arrive at a lasting peace with the Palestinian people. I don't think those positions are contradictory. I think they're complementary. You know, it is going to be hard for Israel over the long term and this is something that I think the vast majority of Israelis understand. That it's going to be hard to achieve true security if there's still hostile neighbors only a few miles away.

But, what I think that Israel has to do is to make sure that that peace is not purchased at -- by putting Israel's security at risk. And it's the job of the United States I think, to make sure that that peace is centered and promotes Israel's long-term security.

QUESTION: Senator, you told me yesterday that if you become president, you would tackle the issue of Middle East peace right away.

What fresh strategies would you bring and can you respond to the concerns of Israelis who feel that you might pressure them to make too many concessions? And again, what new strategies would you bring?

OBAMA: Well, I think it's -- OK. Why don't you ask your buddies to speak up louder when they're asking the question.

I'll repeat it. The question was -- what fresh strategies could be brought to the Middle East peace process? And what was the second part of it? The concerns about it -- Israel's concerns about me pressuring them into concessions.

Well, look. I don't think that Minister Livni or Minister Barak or (INAUDIBLE) or the others, President Perez, when they spoke to me today got any sense that I would be pressuring them to accept any kinds of concessions that would put their security at stake.

We don't need a peace deal just to have a piece of paper that doesn't result in peace. We need something that's meaningful. And it's not going to be meaningful if Israel's security is not part of that package. And any American president, whether it's myself or John McCain, can rest assured that Israel won't be pressured into something that is going to put them at risk. Because they have an obligation to their people.

So, my job is to -- if I'm the president, my job and my team's job is not to dictate to either of the parties what this deal should be, but hopefully to be able to facilitate and promote a meaningful, realistic, pragmatic, concrete strategy for achieving these goals. And that's why I don't want to get too specific in response to your first question because I think it's important not to predetermine in some sense what the parties are going to agree to, but rather to just set up a process in which this can occur.

I can tell you one thing that is very important, though, and that is a U.S. administration has to put its weight behind a process recognizing that it's not going to happen immediately. And that's why I can't -- I will not wait until a few years into my term or my second term if I'm elected, in order to get the process moving. I think we have a window right now that needs to be taken advantage of. I think you've got a set of moderate Palestinian leaders who are interested. I think the Israeli people are interested in moving this process along. But I also think there's a population on both sides that is becoming increasingly frustrated with the lack of progress. And where there's hopelessness and despair, that can often turn in a bad direction.

And as I've noted in all the conversations I've had, Israel also has this enormous threat from Iran, which is connected to the situation between Hamas and Hezbollah and more moderate forces in the region. And so to the extent that we can solve this problem, it also helps us solve some of these larger problems that are not just questions of Israel's national security, but also the United States national security.

QUESTION: In the name of the Israeli colleagues, welcome to Israel.

OBAMA: Thank you.

QUESTION: You have just justified Israel's alleged attack in Syria.

Will you bear the same understanding should Israel act similarly towards Iran?

OBAMA: Well, you know, my goal is to avoid the hypothetical by moving rapidly to mobilize the international community, to offer a series of big sticks and big carrots to the Iranian regime to stand down on nuclear weapons. We have to do it now.

I don't want it to get started, should I become president. I want the Iranians to understand that they should take advantage of the shift in the Bush administration's approach where they sent one of our diplomats, William Burns, to the latest discussions with the European delegation.

Iranians need to understand that whether it's the Bush administration or an Obama administration, that this is a paramount concern to the United States. And, I think there are opportunities for us to mobilize a much more serious regime of sanctions on Iran, but also to offer them the possibility of improved relations in the international community if they stand down on these nuclear weapons.

What I have also said, though, is that I will take no options off the table in dealing with this potential Iranian threat. And understand part of my reasoning here. A nuclear Iran would be a game changing situation not just in the Middle East, but around the world. Whatever remains of our nuclear non-proliferation framework, I think would begin to disintegrate. You would have countries in the Middle East who would see the potential need to also obtain nuclear weapons.

Many of these countries, including Iran, have ties to terrorist organizations. Which means that suddenly you could have loose nuclear materials falling into the hands of terrorists. That is our single- most important threat both to Israel but also to the United States of America. And so this is something that we're going to spend a lot of time working on.

QUESTION: In your first year as president, with president Ahmadinejad, without preconditions, is there anything you have heard today, in your discussions with Israeli leaders that has made you rethink that pledge? Or are you still standing by that?

OBAMA: Dan, I think you have to take a look at what the question was in South Carolina and how I responded.

The question is, would I meet with leaders without preconditions in pursuit...

QUESTION: (OFF-MIKE)

OBAMA: I understand. I understand.

QUESTION: (OFF-MIKE) ... in your first year as president.

OBAMA: But I think that what I said in response was that I would, at my time and choosing, be willing to meet with any leader if I thought it would promote the national security interests of the United States of America.

And, Dan, that continues to be my position. That if I think that I can get a deal that is going to advance our cause, then I would consider that opportunity.

But what I also said was that there is a difference between meeting without pre-conditions and meeting without preparation. You know, the specific context of your question let's say with respect to Iran, is a Bush administration policy, for example, that said, we will not involve ourselves in any diplomatic negotiations or even talks with the Iranians until they have made the decision to stand down on their nuclear weapons. Well, that presumably would be the topic of negotiations. And if we take that position, then it's not surprising that we might not make much progress on that front.

My whole goal in terms of having tough, serious, direct diplomacy, is not because I'm naive of the nature of any of these regimes. I'm not. It is because if we show ourselves willing to talk and to offer carrots and sticks in order to deal with these pressing problems. And if Iran then rejects any overtures of that sort, it puts us in a stronger position to mobilize the international community to ratchet up the pressure on Iran.

Our unwillingness to talk or the perception that we are trying to bully our way through negotiations, that's eliminated as an excuse for them not dealing with these issues in an appropriate way. And so you know, I think that it is very important for us to exhaust every possible avenue to solve this problem and to send the signal to the international community that this is a top priority. We are willing to extend ourselves and work hard to solve this problem. But what we're not willing to do is to permit a nuclear arms race in the Middle East.

OK.

QUESTION: (OFF-MIKE). Mr. Obama (INAUDIBLE).

Would you accept a situation like this in one of the American towns stuck in the states (INAUDIBLE)?

Do you think Israel should negotiate with Hamas in Gaza?

OBAMA: I don't think any country would find it acceptable to have missiles raining down on the heads of their citizens.

The first job of any nation state is to protect its citizens. And so I can assure you that if -- I don't even care if I was a politician. If somebody was sending rockets into my house where my two daughters sleep at night, I'm going to do everything in my power to stop that. And I would expect Israelis to do the same thing.

In terms of negotiations with Hamas, it is very hard to negotiate with a group that is not representative of a nation state, does not recognize your right to exist, has consistently used terror as a weapon, and is deeply influenced by other countries. I think that Hamas leadership will have to make a decision at some point as to whether it is a serious political party seeking to represent the aspirations of the Palestinian people. And, as a consequence, willing to recognize Israel's right to exist and renounce violence as a tool to achieve its aims. Or whether it wants to continue to operate as a terrorist organization. Until that point, it's hard for Israel, I think, to negotiate with a country that -- or with a group that doesn't recognize Israel's right to exist at a country -- OK.

Thank you very much, everybody. I appreciate it.

COLLINS: Senator Barack Obama in Israel today. As you can see there, talking to the press, taking a number of questions regarding Middle East peace and also certainly taking questions on Iran, which is obviously an issue and a place that the people of Israel have been and will continue to be concerned about.

So, there you have that. And just moments before that we heard from Senator John McCain who was addressing a group -- a town hall event there in Wilkes-Barre, Pennsylvania, talking about the economy. We'll stay on top of both candidates for you, here.

HARRIS: How battering the south Texas coastline right now, Hurricane Dolly coming ashore today with damaging winds and fears of flooding.

(COMMERCIAL BREAK)

HARRIS: OK. A quick check of the markets now. New York Stock Exchange. The DOW as you can see, about 90 minutes into the trading day, up 42 points. We're going to check in with Susan Lisovicz, this year right here in the CNN NEWSROOM.

And good morning, everyone. You're informed with CNN. I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

Developments keep coming into the CNN NEWSROOM on this Wednesday, July 23rd.

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