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President Sarkozy and President Medvedev Hold Press Conference; First U.S. Military Humanitarian Flight to Georgia Expected Soon; Oil Prices Remain Unaltered by Closing Georgia Pipelines; U.S. Gymnasts Happy to Place in Beijing Olympics

Aired August 12, 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 at the CNN NEWSROOM. Here's what's on the rundown.

Russia says it halted its attack on its neighbor, but Georgia says the bombs are still falling. This hour, new diplomacy by the French president.

COLLINS: Police officers unleashing their fists and feet on a handcuffed suspect. Today the investigation.

HARRIS: He needs eight to break an Olympic record. American swimmer Michael Phelps is solid gold again today, Tuesday, August 12th.

You're in the CNN NEWSROOM.

Russia says it has stopped its attacks, but Georgia says the bombings continue even after the pledge. Let's back up a bit here. Today Russia's president said the former Soviet Republic had been punished enough for its attack on South Ossetia. The province had tried to break away from Georgia and align with Russia. Moscow's pledge to halt the fighting came as French President Nicolas Sarkozy arrived in Russia. He is hand-delivering Western demands Russia pull back its troops. The United Nations and NATO have also called meetings today. Russia stirred international concerns by launching attacks deep into Georgia, a U.S. ally. The push went beyond provinces that have close ties to Russia.

COLLINS: Let's get the very latest now on the diplomatic efforts. Our Zain Verjee is our State Department correspondent. She joins us now with the latest.

Zain, good morning to you.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Good morning, Heidi.

State Department officials says that the U.S. has seen the reports about the so-called Russia halt to attacks but they're saying that they're unable to verify it. The priority today at the State Department is the Secretary of State Rice is to speak to world leaders like Britain, France and Germany and find that diplomatic solution. Secretary Rice has sent a mid-level envoy to Georgia to work out some sort of mediation. The U.S. is still calling for Russia's troops to get out.

Now before Russia's announcement today, President Bush had some surprisingly tough words.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Russia advances inside Georgia, showing off of its power on the world's stage. Prime Minister Vladimir Putin appearing to dare the U.S. and the west to stop him. President Bush pushes back, warning Russia not to attack Georgia's capital, Tbilisi.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These Russian actions would represent a dramatic and brutal escalation of the conflict in Georgia.

VERJEE: Mr. Bush says Russia is bent on getting rid of Georgia's president.

BUSH: Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century.

VERJEE: Unacceptable, but what can the U.S. do to stop it? Secretary of State Condoleezza Rice is working with world leaders, sending envoy Matthew Bryza to Georgia to get a cease-fire. But the U.S. and NATO have made it clear they won't intervene militarily to defend their allies. One that President Bush has made a point of visiting and holding up as a beacon of democracy.

BUSH: The American people will stand with you!

VERJEE: Those close ties with the former Soviet republic have angered Russia.

ROBERT HUNTER, RAND CORPORATION: This is a moment for the Russians to take a deep breath and say, are we going to be a real great power in the post-cold war era, or are we just going to go back and play stupid hegemonic games, but frankly lead to their isolation over time.

VERJEE: And President Bush says Russia's actions have already damaged its standing in the world.

BUSH: And these actions jeopardize Russia's relations with the United States and Europe.

(END VIDEOTAPE)

VERJEE: Washington's been pushing the U.N. security council to act, but, Heidi that's not likely to go anywhere because Russia's got veto power there. The U.S. also needs Russia to help put pressure on Iran's nuclear program. Iran, as you know, is a top foreign policy priority for the U.S. And Heidi, we're just learning another thing from a senior U.S. official who told us that the Russian invasion was actually planned for sometime and suggested that Russia could be retreating to some of its old Soviet ways -- Heidi.

COLLINS: Yes, and before we really talk too much about diplomacy, it seems we can't even get the story about whether or not the cease-fire is actually being honored. I mean, just this morning we spoke with the representative from the Russian foreign ministry who kind of wouldn't give us a straight answer on what we have been hearing from the Georgian side of things about attacks after that cease-fire was announced. So it makes you kind of wonder, how much is this invasion about battling the U.S. now for influence in the region?

VERJEE: Well, the influence and the battles between Russia and the U.S. is really a significant part of it. I mean, Russia's been feeling threatened because the U.S. has been increasing its foothold in Russia's own backyard. I mean, if you look at the U.S. support for Georgia and Ukraine's entry into NATO. Russia doesn't like that. The U.S. also wants missile defense plans and a system in Poland and the Czech Republic. That really upsets Russia. What experts are saying is that Russia's feeling encircled here and viewing U.S. actions in its own backyard as hostile. So, the message or at least part of it that they're sending to the U.S. is that Russia is in charge and the U.S. can't do anything in the region without considering Russia's own interests -- Heidi.

COLLINS: All right. Zain, we know you're watching it closely for us. Thanks so much.

Zain Verjee, from the State Department for us.

HARRIS: Well, inside Georgia, a massive rally showing support for the democratic government. CNN's Frederik Pleitgen is in the capital city of Tbilisi. He joins us via broadband. And Frederick, just moments ago at a news conference, we heard some strong language from Georgia's president saying in part, we will never, ever allow Georgia to be broken into pieces.

OK. Clearly having some problems with the audio on Frederick's live shot. We will get back to him in just a couple of minutes.

COLLINS: In the meantime, let's talk a little bit more about the detailed area that we're talking about here. Josh Levs has been following that portion of the story and trying to show us some maps that really can make sense and help us understand the situation at least geographically -- Josh.

JOSH LEVS, CNN CORRESPONDENT: Yes. I mean, it's a confusing story that sometimes, the map is the simplest way to follow it. In this case, it really is. Let's close in on this. I'll tell you what we've been learning from our correspondents in the field like Frederik and others.

This right here, let's just get the basic. Russia, Georgia, and this right here, I'm outlining for you. That right here is South Ossetia or Ossetia, either one is OK. This is the key area where all the fighting took off last week. This for a long time, for years and years, since the early 90s has had peacekeepers, some Georgian, some Russians. Last week separatists began some new fighting, Georgia went in there with troops with assault.

Russia then came in and sent in their air troops, then it expanded through more of Georgia. But this is big, what's happening today. Stay on this right here. Because I want to tell you what Russia has said today. Yes, they're saying they're interested in stopping the assault, their military actions. But here's what they're also calling for, no Georgian troops back in South Ossetia at all. They don't want any Georgian peacekeepers but they want all the Russian peacekeepers to stay there, which would give them a presence and not Georgia.

Russia's also calling for a demilitarize zone along the outside of it. So Russia could not be or Georgia rather could not be militarize on the outside. So, here's what the discussion has turned into, Heidi, the talk about who would be in control in South Ossetia. Would there be this international force that would control it? Who would mandate it? Would it be through the U.N.? Who has to agree to it? South Ossetia is inside Georgia but it's autonomous. Russia supports the autonomous government there. Does Russia have to approve whatever deal is made? Does Georgia have to approve? Who would contribute forces to it and how would that be resolved. So, that's what we're looking for right now. This, what's the next step for demilitarizing and keeping peace keeping troops in South Ossetia -- Heidi.

COLLINS: All right. Josh, we'll check back with you a little later on. Thanks so much.

HARRIS: And let's get you back to Georgia now and the capital city of Tbilisi. Our Frederik Pleitgen is there via broadband. And Frederik, if you would, give us a bit of a rap on the huge rally from earlier today there in Tbilisi, the pro-government rally, and some of the strong statements from Georgia's president just a short time ago saying, in part, "we will never ever allow Georgia to be broken into pieces."

FREDERIK PLEITGEN, CNN CORRESPONDENT: Absolutely, Tony. Sorry, we were having some audio trouble before.

You're absolutely right, the Georgians making a strong statement. It was a gigantic rally that was taking place right in the center of Tbilisi, in front of the Parliament Building. About 50,000 people showed up. They were waving flags, chanting the Georgia national anthem. What this demo was all about? It was all about being behind Georgia and being behind the Georgian government. Of course, the people here are saying that their government has taken a lot of heat from the Russians, but they said they had come together here in Tbilisi to show support for their president.

Now, the Georgians, of course, that the Russians are the aggressors in all of this. They say Russia, illegally invaded their country. The Russians, of course, have a very different take on that. They say it was the Georgians who started firing first and they blame the president Mikheil Saakashvili for what they say started all of this conflict.

Today, as you said, Saakashvili finding some very, very strong words for the Russian government. Let's listen in to what he had to say.

(BEGIN VIDEO CLIP)

PRES. MIKHEIL SAAKASHVILI, GEORGIA: I think the political motive is very clear. They demonstrate to the world. They couldn't care less about world reaction to continue to cripple the country. They clearly articulate their regime change objective. This is not about presidency of Georgia or something. This is about killing the freedom and the independence of this country and scare those around us.

Well, I think our message to them is, no matter what they do, no matter how much they bomb us, no matter how they want to cripple us and undermine us, we are not going to give up our freedom and Georgia will never surrender.

(END VIDEO CLIP)

PLEITGEN: And you said it, Tony. The big question is, have the Russians really stopped their military operations here in Georgia? What we're hearing from the Georgian government is that is not the case. They say two villages have been bombed south of that breakaway province of South Ossetia. Two villages they say, telecommunications installations have been hit in that area. Also they were saying, earlier this morning, that the town of Gori was also hit by Russian warplanes, and of course, a very, very important strategic town, one that's saw a lot of fighting only yesterday and that saw Georgian troops retreat from that area under a heavy barrage of Russian fire -- Tony.

HARRIS: CNN's Frederik Pleitgen for us in Georgia in the capital city of Tbilisi.

Frederik, appreciate it. Thank you.

COLLINS: Back here at home, it's time for damage assessment now, especially when you look at those pictures. Boy, after severe weather slammed the northeast, city streets near Albany, New York, under water. Heavy rains pounded the region over the weekend. Fire officials say at least 27 people had to get out of their homes as the water just kept right on rising. A lot of rain expected in the south today. Rob Marciano is tracking that and keeping an eye on the tropics.

Hey there, Rob.

ROB MARCIANO, CNN, METEOROLOGIST: Hey, Heidi. How are you, Tony?

We had some rough weather across the northeast and across the parts of the mid-south and plains. And that's where the focus is going to be. Boston still getting some light showers, this is all the circulation that was over upstate New York that kind of drifted down to the tri-state area and the metropolitan areas. Now it's up through Maine, in the coastal areas there down east.

Here's the action across parts of the mid-south, now it's starting to get into Dixie here with Georgia in the crosshairs, Alabama, Mississippi, some of this is certainly heavy enough to cause flooding. And because of that, the National Weather Service has issued some flash flood watches and warnings for this area. Shreveport over to Jackson, and this will probably spread a little bit farther to the east.

Question is, will it get to an area that really desperately needs it? The real focus is going to be across the mid parts of this state, as opposed to the northern part which is where we need the rain the most. Nonetheless, heavy rain expected here over the next couple of days. Do we have the plantation shot? Quick before we throw it back to you. Wanted to mention Miami and the surrounding areas, showers and thundershowers pop up in the afternoon, 91 degrees the expected high temperature, and we're watching this disturbance in the tropics which National Hurricane Center looks like they'll probably send a plane out to today. They haven't quite pulled the trigger on that yet.

HARRIS: You got a couple of waves out there?

MARCIANO: A couple of waves, one about 500, 600 miles from the Caribbean. These computer models keep wanting to throw it towards the Bahamas this weekend. Obviously, once we get it there, then you have Florida kind of sticking its nose out in the Atlantic. We have bigger problems. We'll let you know.

COLLINS: All right. Rob, thank you.

HARRIS: Tackling the Russia crisis, a look at what the presidential candidates are saying.

(COMMERCIAL BREAK)

COLLINS: Don't miss the bus. CNN's Election Express on the road to the democratic election. And we've got your ticket to ride.

(COMMERCIAL BREAK)

COLLINS: Tracking the candidates. John McCain wrapping up a two-day swing through Pennsylvania. That state has 21 electorate votes. McCain will hold a town hall meeting in York, Pennsylvania next hour. We'll keep our eye on that for you and bring you some of his remarks. Meanwhile, Barack Obama on a break from the campaign trail, vacationing in the state of his birth, Hawaii, with his family. He will attend a fundraiser tonight.

HARRIS: Crisis management. The presidential candidates weighing in on Russia. Tough talk on and off the campaign trail.

CNN's Ed Henry has more. (BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Appearing in Pennsylvania with Tom Ridge, the former Homeland Security Secretary, John McCain tried to showcase his own foreign policy credentials.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The United States and our allies should continue efforts to bring a resolution before the United Nations security council, condemning Russian aggression.

HENRY: With Barack Obama vacationing in Hawaii, McCain has the stage to himself to try and show he has the experience to handle a crisis and claim he was ahead of the curve months ago when he started denouncing Russian leader Vladimir Putin's anti-democratic moves.

MCCAIN: We must remind Russia's leaders that the benefits they enjoy from being part of the civilized world require their respect for the values, stability, and peace of the world.

HENRY: Obama has been getting briefings on the situation in Georgia and spoke out Friday, though he was not quite as forceful in denouncing Russia. But now he's talking tough.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Russia has escalated its military campaign through strategic bombing and the movement of its ground forces into the heart of Georgia. There is no possible justification for these attacks.

HENRY: McCain's offensive hearkens back to the 3:00 a.m. ad Hillary Clinton ran in the democratic primaries to suggest Obama was not up to the job.

UNIDENTIFIED MALE: It's 3:00 a.m. and your children are safe and asleep, but there's a phone in the White House and it's ringing. Who do you want answering the phone?

HENRY: The ad didn't work for Clinton, but the McCain camp thinks the issue may resonate more in the general election with independent voters concerned about security. Though McCain's claim to have a handle on national security could be slightly undermined by mispronouncing the name of the Georgian President Mikheil Saakashvili three times.

MCCAIN: Mikheil Saakashvili. President Saakashvili. President Saakashvili.

HENRY (on-camera): And ABC-"Washington Post" poll last month found when asked who they trust more to handle an unforeseen crisis, 50 percent said McCain, 41 percent said Obama. A nine-point edge for McCain but perhaps not as big as expected. For example when asked who they trust more to handle the economy, 54 percent said Obama, 35 percent McCain, a 19-point edge for the Democrat.

Ed Henry, CNN, Washington.

(END VIDEOTAPE)

COLLINS: The CNN Election Express rolling again, heading to Denver for the Democratic National Convention. Our Tom Foreman is onboard, is traveling through Ohio about now.

So, Tom, what are people saying about the presidential campaign along the road there?

TOM FOREMAN, CNN CORRESPONDENT: Well, I tell you we just left Youngstown, we're headed toward Toledo, along the Ohio turnpike. We were in Pennsylvania yesterday. In these battleground states what a lot of people are saying is no matter how much they've heard from the candidates so far, they really want to hear more. There are plenty of those undecided voters here, that many people say, will decide the race.

And many of them say they're simply waiting for the spark, the thing that's really going to light them up. Listen to a couple of them we talked to in Youngstown just yesterday.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I haven't really been following it a whole lot and so I'm kind of one of those ones that are just kind of floating around out there and really --

FOREMAN: Waiting to hear something that excites you.

UNIDENTIFIED MALE: Yes, probably.

FOREMAN: But you haven't heard it yet.

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: I'd like to know more about what each candidate has to offer rather than why their opponent is the wrong candidate.

FOREMAN: Do you think you're going to get that?

UNIDENTIFIED FEMALE: Probably not.

(END VIDEOTAPE)

FOREMAN: Plenty of people have an idea of which direction they're going. The last example says she's leaning toward Obama right now, will probably vote for him. But when it comes down to the brass tax, a lot of people say they just need to hear more from these candidates and these candidates are doing all they can, particularly in this crucial battleground state like Ohio right behind me, Pennsylvania, on over into Ohio, states like that -- we're on our way to Denver. We'll keep you updated -- Heidi.

COLLINS: OK. Great. Hey, Tom, quickly, before we let you go. I do wonder, does anyone talk about Iraq and Afghanistan, or is it specifically, you know, just the domestic issues that they're concerned about?

FOREMAN: You know, it's a good question, Heidi, because actually in all the people we talked to yesterday, not one of them brought up the war. Some of them talked about international affairs in a very vague way, but by and large every single person was saying, look, this is a region that's hurting. This is a region that's needs jobs. This is a region where the cost of gas and education and homes is really hitting people and the candidate who connects with them on that issue stands a very good chance of getting their votes -- Heidi.

COLLINS: Hey, we know you are out there trying to get the story to the people. Hey, also, kudos to the set decoration. I think I see some fabulous flowers just to your left that are really - other way, sorry.

FOREMAN: It's pretty nice here, yes. It's beautiful here alongside the road. You should be here. You'd have a great time.

COLLINS: He's not hearing what I'm talking about, the lovely flowers in your shot, Tom, that are really making --

HARRIS: A little set decoration.

COLLINS: Yes, decoration there on the bus.

FOREMAN: Oh, these.

COLLINS: Other side. There! They're lovely.

FOREMAN: They're a gift from a loving viewer. No, they're not. But they're lovely. I love it. it's like home.

COLLINS: I know it is. Tom, we'll be checking in often. Thanks so much.

HARRIS: Florida police officers on tape and under investigation now. Four quick blows to the face. You'll see a kick to the head here coming up here in just a moment. The man handcuffed.

(COMMERCIAL BREAK)

HARRIS: We are getting information about the first humanitarian flights into Georgia, the site of so much violence over the last five days. Thousands of people, as you know, at this point, running from the violence in Georgia, are getting out of the country and internally displaced. There she is, Barbara Starr at the Pentagon for us.

Barbara, good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning to you, Tony.

CNN has learned that the first U.S. military humanitarian flights into Georgia are now expected by the end of the week. U.S. administration officials now telling CNN the plan calls for the first flight actually to fly from Germany into Georgia on Thursday. A U.S. C-17 expected to try and make that flight into Tbilisi. The U.S. however wants assurances from the Russians that they will not interfere with that U.S. military flight. The Russians already, of course, have bombed one of the air traffic control radars at the commercial international airport. That radar has been repaired, according to administration officials, but the U.S. very adamantly making contacts with the Russians to say, don't interfere with these flights.

Administration officials say they will start with one flight, but they expect to follow up with what one official calls a robust package of military humanitarian assistance. You know, you can assume that part of this is the Bush administration's effort to state that it, too, has a presence in that country and they certainly haven't any intention of going away.

We may, we are told, also see the Navy Hospital Ship Comfort make plans to sail to the Black Sea in the coming days, also to offer humanitarian relief. So, again, the first military flight expected as soon as Thursday possibly, but the U.S. military wants assurances from the Russians they won't cause any trouble -- Tony.

HARRIS: I think that's a great point. There was some concern that the airport there in Tbilisi might be a military target for the Russians, correct?

STARR: Absolutely, Tony.

You will recall yesterday President Bush addressed that point very specifically in his afternoon appearance at the White House, saying there was information, intelligence that the Russians might intend to bomb that airport. That's a pretty specific piece of information for the president to get into. So his message perhaps heard by the Russians today, and the U.S. following up by making clear it's going to send U.S. military flights into that airport again, carrying, again, humanitarian supplies -- Tony.

HARRIS: Barbara Starr at the Pentagon for us. Barbara, thank you.

COLLINS: Let's quickly get you more on this situation now live, as it happens. We want to take you to a press conference being held by the Russian President Dmitry Medvedev and also French President Nicolas Sarkozy.

(JOINED IN PROGRESS)

PRES. DMITRY MEDVEDEV, RUSSIA (through translator): Yesterday, unfortunately, there were losses, there were casualties and there was artillery and small arms fire were used and there was no cease-fire from the Georgian side.

People who don't smell blood, well, it's difficult to act in a surgical way. Now today, all the conditions exist for achieving our mission. And this brought about the possibility to look at the basic questions of peace once again on the basis of the principles which, together with President Sarkozy, we have referred to. PRES. NICOLAS SARKOZY, FRANCE (through translator): I would like to confirm that Georgia is not part of the European Union. I cannot force a head of state not to put up a European flag, a European Union flag.

QUESTION: (INAUDIBLE), Mr. Sarkozy, why has the principle of territorial integrity of Georgia, is not in the list of principles? Is that not important for you?

And, Mr. Medvedev, do you at this moment accept the territorial integrity of Georgia? Do you foresee the citizens of Southern Ossetia carrying on living within Georgia?

SARKOZY: What happens when there is a crisis? You have to get out of that crisis. And in order to get out of that crisis, the people who are at war have to stop fighting.

And we are in a situation of urgency where that is the most important thing. The most important objective. It wasn't to solve all of the problems and issues can be resolved now. There are bigger issues involved of Southern Ossetia, bigger problems that relate to the whole of the caucuses which we cannot resolve here.

So, this bigger issue, this bigger requirement, this bigger principle of sovereignty needs to be resolved as opposed to territorial integrity. I have to point out that we will need -- there is a requirement for international peacekeepers. A mandate for them in both of those two regions. And so if there are peacekeepers in those regions, it meant already, before this problem, before this outbreak, that these problems existed before. What has happened? If there hadn't been problems, if there hadn't been people contesting those regions and who they should be part of, we wouldn't have had this war.

At this point, we now have two solutions. If we try and solve all the problems of the region, we will not solve anything due. If we just try and solve problems by restoring peace and working towards long-term solutions, that's something we can do now. I'm well aware that a lot of people throughout the world are concerned about sovereignty and also people's territorial independence. So, the whole point of mediation is to kind of bring closer together different positions that are contesting each other.

Now, as President of the European Union, we're presently -- President of the European Union, I cannot give a definitive answer right now. This has to be worked through. There are other issues of various citizens within those countries who are refugees; where they will live. These will be resolved not today, but in the future. All we need to do now is to stop suffering, to stop the death of people and so we have agreed on the idea of sovereignty. That Georgia is an independent country. And the Russians and the president of Russia have no intention of moving into Georgia, annexing Georgia.

You know the problems here. You know there are other questions that need to be answered. And this statement doesn't cover those bigger questions. It doesn't even -- it says nothing about any long- term solution. This is not the time to treat those rather difficult issues. There will be international discussions and the most important thing is that these international discussions happen.

And I'm going to speak to you frankly about this and this is something I believe. I want to tell you that we have not given up various principles and ideas. We have just ensured that protagonists, people who are contesting things, are coming together and talking. There are various different nationalities living in those places so I can confirm to you that I have not renounced or given up any ideal or principle. It's just a matter of being lucid and looking clearly at what we have to deal with now.

It's not -- it's much more -- it's far easier to write about something in an inflammatory way in the press than to actually bring together people who are currently at war or who are fighting. I hope you permit me this comment.

MEDVEDEV: This means the dominance of central power now. No doubt we recognize the sovereignty of Georgia and the independence of the Georgian authorities and other countries, as well. But, this does not mean that sovereign state has or should have the possibility to do whatever it wants, even sovereign countries have to answer for their actions.

Now, with regard to territorial integrity, that is one concept. And if sovereignty is based on the will of the people and on the constitution, then territorial integrity as a rule can be demonstrated by the actual facts on the ground. And despite the fact that on paper it may look fine, life is much more complicated. And the question of territorial integrity is a very difficult and complicated question which cannot be solved in any demonstrations or in parliament even, or in meetings among leaders.

It is it the wish of people to live together in one state and you correctly ask the question -- can the Ossetians and the (INAUDIBLE), can they and do they want to live within the body of Georgia? This is a question they have to be asked themselves. And they will give a clear cut answer to the question.

COLLINS: You have been listening in to the Russian president who you see there, Dmitry Medvedev. And also prior to him, the French President Nicolas Sarkozy. Obviously two key players in all of this.

Also want to let you know that Nicolas Sarkozy will be meeting later on today with the President of Georgia, Saakashvili, as well. So, we will stay on top of this story as you would expect us to here at CNN.

Russia says it has reigned in its attacks. But, Georgia still says bombs have continued to rain down on at least two villages. Want to show you this map, once again, as we talk about it here.

Backing up five days ago, fighting broke out in South Ossetia. The province had tried to break away from Georgia and strengthen ties to Russia. Now, key players to watch in this crisis throughout the day will be those two men you just saw. Russian President Dmitry Medvedev says his troops must defend themselves and crush any signs of Georgian resistance.

Earlier he did meet with French President Nicolas Sarkozy, who also serves as President of the European Union. And President Sarkozy hand-delivered that western message, demands that Russia pull back its troops. He also will visit the capital of Georgia. In Tiblisi, he'll meet with Georgia's president, as I mentioned, Mikheil Saakashvili, who's already signed that ceasefire agreement.

HARRIS: At the top of the hour we will hear from the White House and National Security Adviser Stephen Hadley.

CNN's Kate Bolduan is there to set the stage.

And Kate, I'm wondering, is the plan to take some questions at that event at the top of the hour? That would be interesting to know.

KATE BOLDUAN, CNN CORRESPONDENT: Well, we anticipate being able to ask some questions.

We do know that we heard from White House spokesperson Tony Fratto, that they had canceled the usual daily briefing and that National Security Adviser Stephen Hadley was going to be speaking to us. We have heard that it's been postponed due to some developments. But we do anticipate to hear something today, explicitly on this issue of Georgia. And of course, we hope to get questions in, Tony.

But, to what the president has been doing since he's returned from his trip to Beijing. This morning he received another round of intelligence briefings from National Security Adviser Stephen Hadley, as well as speaking to Secretary of State Condoleezza Rice. Now we hear from -- during this morning gaggle, the off-camera on the record gaggle, that the president is now consulting with other world leaders on this very issue of the conflict between Georgia and Russia.

White House spokesperson Tony Fratto says the president since -- while he was coming home as well as through this morning, has spoken to British Prime Minister Gordon Brown, as well as the presidents of Lithuania and Poland and Georgian's President Saakashvili. And just this morning, President Bush spoke with Italy's Prime Minister and the German Chancellor. So, clearly a lot of conversations going on among world leaders.

We have also been told that the White House is now really trying to get a read of what Russia's statement of halting military options actually means. Tony Fratto said it's not clear if halt means ceasefire. And that of course, is what the White House, President Bush and European Union; they're are all calling for right now, Tony.

HARRIS: Boy. You mentioned just a moment ago of British Prime Minister Gordon Brown. Talk about a low profile during this crisis.

Kate Bolduan for us in Washington. Kate, appreciate it. Thank you.

BOLDUAN: Thanks, Tony.

COLLINS: Michael Phelps proving unbeatable in the pool, a third gold medal. We are live in Beijing.

(COMMERCIAL BREAK)

COLLINS: Oil pipelines are being shut down in Georgia, but surprisingly, crude prices are no going up. Susan Lisovicz is at the New York Stock Exchange with details on all of this.

Hi there, Susan. We thought for sure there would be an impact here.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, basically, for the oil prices today are doing nothing. They're up less than 50 cents, despite the fact that several pipelines have been shut down.

A couple of months ago, Heidi, just the mere threat of a pipeline shutdown would spark a huge rally in crude. And basically, we touched upon this yesterday, that when you see something that would automatically prompt a big rally into, say, something like oil prices and it doesn't happen, it is a telltale sign that the bubble has been broken. And of course, we've been seeing that.

One analyst I talked to, Heidi, Steven Schork, who puts out a daily report, said it's not only happening with what we're seeing in Georgia and Russia, it's also, he said -- Hurricane Dolly didn't really move oil prices and the stepped-up military attacks in Nigeria. And he says that's further evidence that the trend is real. What we've been seeing is a bear market, actually, in oil prices, down more than 20 percent from that all-time high which we just had a month ago.

COLLINS: Yes. Well, here's the key question, and I know you have an answer, where ultimately will oil prices go, Susan?

LISOVICZ: Well, this is the really good news, actually. Not only Steven Schork, who's been following oil for years, but a veteran trader that I talked to both say that, basically, they expect oil to go down into the double digits this year.

One of the things Steven Schork said is that when you see a bubble that's broken, what you often see is that it will -- that the prices will retrace where the bubble began. If that holds true, that would bring oil to, like, $70 or $80 a barrel.

COLLINS: OK. Now what did we talk about over the past couple of days about living in the past? Did you hear what we just said -- retracing things. I'm just saying.

LISOVICZ: This is not bulletproof remember. There's lots of things that can change. One of the things, of course, that also helps is the continuing strength in the dollar. The Federal Reserve has indicated it is not going to cut rates any further. Basically, next would be higher. And because oil is priced in dollars that, basically, you're going to see traders and investors move away from it.

COLLINS: OK. We'll be watching it very closely.

Thanks so much, Susan Lisovicz. LISOVICZ: You're welcome.

HARRIS: Michael Phelps has fins. He's unbeatable in the pool. Unbeatable. A third gold. We're live in Beijing.

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HARRIS: More than a game in Beijing, the U.S. men's indoor volleyball team winning their second contest. They beat Italy. It was an emotional victory for the team that is still without its head coach. You'll remember Coach Hugh McCutcheon's father and mother-in- law were attacked on the games first day. His father-in-law was killed, his mother-in-law, Barbara Bachman, is in stable condition right now. It's unknown if McCutcheon will return to the team.

COLLINS: Michael Phelps good as gold again and again and again, adding three more medals to his already impressive Olympic haul. We're going to talk more about him in just a minute. But, as we see our Larry Smith there in Beijing. We want to talk about the men's basketball team.

What's the scoop here, Larry?

LARRY SMITH, CNN SPORTS CORRESPONDENT: The latest scoop is, well, they're not Michael Phelps, haven't won a gold medal yet, but they're still playing along. Remember back in 1996 when USA just simply ran over Angola, Charles Barkley, the forearm schibber (ph) and all that? Big win, but not quite the same effect, 97-76 the final score in this one, a game that just ended within the past hour. Dwayne Wade had 19 points as Team USA, the redeem team, looking to get gold back, they go to 2-0 here in these games.

Earlier today in softball, the debut for the women's team, and what a debut it was. 11-0 the score over Venezuela. But it was a no- hitter combined by pitchers Jennie Finch and Monica Abbott. And keep in mind, softball goes off the Olympic menu after this year. The ladies try to maybe encourage them to keep it around.

Big story, too, in men's gymnastics. Keep in mind, the U.S. team without Paul Hamm, who became the first American male to win the all- around competition in Athens four years ago. He was out with an injury as was his twin brother, Morgan, also not in action. But they still fight to get the bronze behind China and Japan. This is like they won the gold, although it is bronze. Certainly it is unexpected, but welcome for the U.S.

(BEGIN VIDEO CLIP)

JUSTIN SPRING, WON BRONZE IN MEN'S TEAM GYMNASTICS: I don't think this team ever doubted -- we never doubted ourselves, but we had to go out and hit. And that's tough to do sometimes. So, we were able to, you know, group together as a team. We had some momentum just building throughout the competition. It was outstanding. The team just pushed through and worked through so much. Everyone up here has got an amazing story behind them, and I guess with the injuries I've had it's kind of mine. But, yes, it's still, I'll say it again, it's pretty amazing just to be up here right now with something hanging around my neck. Never doubted it, but didn't expect it.

(END VIDEO CLIP)

SMITH: Congratulations to them.

But still the story of these games is Michael Phelps, a third gold medal, all three in world record time. This one in the 200-meter freestyle. He returns to the pool Wednesday morning Beijing time with two golds at stake, one in the 200-meter butterfly and the other in the 4 by 200 meter freestyle relay. So Michael Phelps, it appears, still on pace and very well on his way to eight gold medals. Maybe if they drained the pool that would help.

COLLINS: Yes and it's been interesting to watch --

SMITH: He's doing well though.

COLLINS: Yes, he's really got to scurry around because you see him going up there and trying to receive one of his gold medals and kind of looking at the clock, trying to do the swim down, trying to get back in the pool for the next event. It's really been interesting to watch, and we are certainly doing just that.

Larry Smith thanks so much, live from Beijing.

HARRIS: Traveling more than a million miles in the same car. Check out the Lincoln that goes back to the president of the same name. That's a joke.

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HARRIS: It is a love affair, the story of a Lincoln Towncar and a driver who doesn't believe in trade-ins.

Hannah Wooldridge from our Topeka affiliate, KSNT, reports.

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CHET BELISLE, HIGH-MILEAGE CAR OWNER: A lot of times I just go out because I want to go drive around.

HANNAH WOOLDRIDGE, KSNT REPORTER: Chet Belisle loves driving his 1983 Lincoln Towncar.

BELISLE: I like the ride, I like the style of it, the weight, all this kind of stuff. And I feel safe in it because I've got more room.

WOOLDRIDGE: Chet's been driving coast to coast for 25 years and his pride and joy has never broken down.

BELISLE: That car is good on gasoline, 22 on the highway, at least probably about 15, 16 in town.

WOOLDRIDGE: The odometer has rolled over a couple of times, but Chet says that's expected when a car hits the 1,300,000 mile mark. BELISLE: This Lincoln can't last too much longer.

WOOLDRIDGE: And the secret to the car's longevity lies under that heavy medal hood Chet says his mechanics are used to lifting.

BELISLE: Three, two great (ph) engine. And that thing has power.

WOOLDRIDGE: Chet began logging miles and tracking tune-ups the day he car drove off the lot. Then it only had 53 miles.

BELISLE: I can't go anywhere where somebody don't know this Lincoln.

WOOLDRIDGE: Since then, he's rebuilt the engine and transmission and made full use of the lifetime warranties on nearly every other part. For now, Chet says he'll stick with his Lincoln until the day it stops running.

The next stop -- on to San Antonio.

Hannah Wooldridge, 27 News.

(END VIDEOTAPE)

HARRIS: Chet paid $2,200 for his Lincoln when it was brand new.

COLLINS: Quickly want to get this breaking news out to you. Unfortunately, not good news. About 30 minutes outside of Boston, in Easton, Massachusetts, we are learning, according to the "Associated Press," of a small plane crash. The reason why this is particularly bad is because it crashed in a grocery store parking lot. We are hearing from firefighters that there are multiple fatalities there. Not sure if they were mostly on the ground or if that also includes inside the plane. Of course, we are watching that and trying to get some pictures for you, as well, of that scene. So we'll stay on top of that story, again, out of Easton, Massachusetts.

HARRIS: Russia and Georgia come to blows, continuing live coverage of the crisis all day on CNN.

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