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Libya Uprising; Case Against Dominique Strauss-Kahn; Libyan Rebels Enter Tripoli; Pentagon Denies U.S. Troops Will Take Part in Libyan Transition; Gadhafi Regime Crumpling; The Battle for Tripoli

Aired August 22, 2011 - 07:59   ET

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


CAROL COSTELLO, CNN ANCHOR: His hours may be numbered. I'm Carol Costello.

Rebels marching right into the heart of Tripoli and celebrating on Gadhafi's turf. But the battle for the city itself, still raging right now.

CHRISTINE ROMANS, CNN ANCHOR: I'm Christine Romans.

The big question that remain this is morning, where is Moammar Gadhafi? Still no sign of the man who vowed to fight to the finish on this AMERICAN MORNING.

COSTELLO: And good morning to you. It is Monday, August 22nd. Ali has the day off.

ROMANS: He certainly does and it is a big day of breaking news. What could be the last day of Moammar Gadhafi's 42-year reign in Libya. His regime on the verge of total collapse right now as rebels roll into Tripoli and spark a nationwide party. Thousands of rebels from the capital city to the heart of the uprising in Benghazi, are flooding the streets, firing their weapons into the air saying that Gadhafi, wherever he is hiding, Gadhafi is through.

COSTELLO: But no one knows for sure where Gadhafi is. But the battle continues in small pockets of the capital city right now.

Sara Sidner went in with the rebels. She witnessed some very scary moments. She has the latest from Tripoli.

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: We can hear gunfire and I just heard a loud blast. Sounds like perhaps as artillery fire. We do know now that we have to leave this area. We're about half a mile from Green Square, which the rebels are now trying to call Martyr Square, to return it to a name that they prefer. But we're told to pull back. All of the rebels that were in this area just a few moments ago have pulled back. They are getting together to coordinate some sort of action.

Now, we don't know exactly what that action is, but we saw them streaming through here, just literally about five, six seconds ago. The last remaining gunner truck that is here behind us is just about to leave the area.

And we also are being told to leave the area, because they're going back to do some sort of offensive. We just don't know exactly where in the city. We are told it has to do with Gadhafi's troops.

(END VIDEOTAPE)

COSTELLO: Sarah Sidner reporting live -- actually reporting on tape from Tripoli. We had to let her go.

We are also hearing from someone claiming to be one of Moammar Gadhafi's sons, Mohammed Gadhafi. He spoke exclusively to the Arab news network al Jazeera.

During the phone interview, he describes heavy fighting, saying one of his guards was injured and a rebel fighter was killed.

(BEGIN VIDEO CLIP)

MOHAMMED GADHAFI, GADHAFI'S SON (through translator): Standing outside my house. I'm being attacked right now. There's gunfire outside my house. They're inside my house. Goodbye. Goodbye. Goodbye.

(END VIDEO CLIP)

ROMANS: Carol, three of Moammar Gadhafi's sons have been captured by rebels and they could be turned over to the International Criminal Court.

Let's take a look at the role these men have played in Libyan politics. Mohammed Gadhafi, who just heard about here, he is the eldest son of Moammar Gadhafi with his first wife to whom he was only married about six months. He ran and controlled Libya's mobile phone operators and satellite communications. Despite being the eldest, he was not considered Gadhafi's heir apparent.

That was the second oldest son, Saif al-Islam. Here he is. Saif al-Islam was really kind of the face to the West. He was widely viewed as a force of change in Libya. He was the heir apparent and he has a PhD from the London School of Economics. That was before the uprising, of course, and before he vowed that rivers of blood would flow if the rebels didn't stop. Now, he is in custody and, like his father, is facing charges of crimes against humanity charges at The Hague.

Now, the third is -- there you go -- Saadi. He is a businessman, a one-time professional soccer player as well, which is sort of interesting in Italy. He didn't see much on-field action and failed a doping test. Many said he bought his way with his family's money into the international sport.

The big question, though, now is where is Moammar Gadhafi? And that is the question this morning that is still unanswered. He may not even be in Tripoli, though he vowed to stay there until the end and be a martyr -- Carol.

COSTELLO: President Obama is calling all of this a tipping point for Libya, the quick and effortless take-over of Tripoli by anti-Gadhafi rebel forces.

In a statement, President Obama said, "Tripoli is stripping from the grasp of a tyrant. The Gadhafi regime is showing signs of collapsing. The surest way for bloodshed to end is simple, Moammar Gadhafi and his regime need to recognize that their rule has come to an end. Gadhafi needs to acknowledge the reality that he no longer controls Libya. He needs to relinquish power once and for all."

CNN's Dan Lothian live on Martha's Vineyard.

Do we expect to see the president on camera at any time soon?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It's unclear at this point. Right now, nothing on schedule for the president to appear on camera. We will be having a briefing with a deputy White House spokesman some time this morning. The exact time not locked in at this point. The White House being very careful about getting too far out in front of the developments on the ground.

What the president has done, as you pointed out, released a statement last night.

One of the things that I found notable was the U.S. again reaffirming support for the Transitional National Council. That's the rebel opposition forces.

The president saying in that statement that, quote, "The TNC should continue to demonstrate the leadership that is necessary to steer the country through a transition by respecting the rights of the people of Libya, avoiding civilian casualties, protecting the institutions of the Libyan state."

A senior administration official saying that based on reports, that the reports they're seeing are, quote, "encouraging and so far people are avoiding retribution. But that, of course, will be something that this administration will be watching very closely over the next few hours, Carol.

COSTELLO: Dan Lothian, reporting live from Martha's Vineyard this morning -- thank you.

ROMANS: All right. So, back to Tripoli where Libyan rebels in a state of euphoria right now are celebrating because Gadhafi's violent dictatorship that just seemed like it never end is likely over. In just hours, at the very least days, it looks like we'll be talking about Gadhafi's regime in past tense. That's the hope this morning.

COSTELLO: We're going to bring in Hisham Melhem, the Washington bureau chief of al Arabiya.

Welcome.

HISHAM MELHEM, WASHINGTON BUREAU CHIEF, AL ARABIYA: Thank you.

COSTELLO: We did get word that the State Department, the U.S. State Department, had people in Benghazi this weekend, talking to the rebel leadership about setting up a government. I guess everyone is assuming that Moammar Gadhafi is completely out of it.

MELHEM: Yes, I think that's a safe bet. The problem now is that Libya is a country (INAUDIBLE) of functioning institutions. There are with no voluntary political social organizations.

There is no functioning legal system. Civil society was smothered before. You have the usual old regional tribal ethnic divisions.

It's a moment of celebration, but I think the transition blues are already beginning. And now, after you establish law and order in the major metropolitan center like Tripoli and the other cities, you have to deal with the political transition. And this is going to be extremely difficult, extremely delicate, and I think the Libyans will be in bad need of support, technical and otherwise, from their neighbors and from Europeans and the United States.

ROMANS: What should the United State states' role be, in particular? Because already this morning, you have some people talking about, should there be U.S. troops -- boots on the ground or absolutely not, stay out of it?

MELHEM: I think it's going to be difficult for the Obama administration to send troops on the ground. Especially in Libya, they are very sensitive about being involved militarily and that they're a Muslim country in one decade. So, they would be looking for Europeans and maybe for Arab African participation, although the African Union, it's record is not stellar. But, definitely, there has to be roles for regional powers like Egypt, Tunisia, and the Europeans, who have economic and strategic and historic links with Libya. So, I think the Americans will be supporting.

And we've seen the president setting the right tone yesterday in his statement, warning against any kind of retribution, saying we would be interested in safeguarding the human rights of the Libyan people. It's a -- it's going to be a long, bumpy transition.

COSTELLO: It is going to be a long, bumpy transition, and in no small part because this was a very violent conflict.

MELHEM: Absolutely.

COSTELLO: A lot of people died, 13,000, we hear. Society has been virtually destroyed.

So, how do you set up a government?

MELHEM: Well, I mean, the government has to be representative. It has to take into consideration the regional differences in Libya, the tribal makeup, different political forces. I mean, there are a great deal of Libyan talent, most of it is outside the country. You have to bring those people back and benefit from their technical skills.

This is a country, unlike Tunisia and Egypt, where they have functioning institutions, in Libya, you have to start from scratch. This is daunting but at the same time, it's promising, because you can do away with the system.

In Egypt and Tunisia, the system did not collapse, the whole structure did not collapse. Only the tip of the pyramid disappeared. And, you know, the structure of (INAUDIBLE), if you will, it's still, most are intact.

In Libya, the whole regime will fall with Gadhafi and this is going to present, you know, some problems for the Libyans who will be involved in leading the transition. It's going to be tough. It's going to be a bit messy. There is no clear road map.

But I think they will have the support of their neighbors and the international community.

ROMANS: And there should be vast oil wealth in this country. It's the largest proven oil reserves in Africa. I mean, oil runs 95 percent of the country, and the power of the Gadhafi regime.

How difficult will it be for this country to use that oil to its own benefit and not be corrupted by it?

MELHEM: Well, that's -- again, I mean, one would hope that there would be degree of transparency early on. Obviously, there is some money in frozen banks. The money that was frozen by the Europeans and the Americans should be released soon.

I mean, Libya, on paper, should be the richest country on the African continent, had it not been for Moammar Gadhafi, who destroyed a country with a small population, large -- you know, a lot of resources. And I think that dream of restoring the potential of Libya should be the guiding principles for the Libyans.

But now, you have a shattered economy. You have a shattered infrastructure and they need to be time. The truth now is to maintain a degree of stability during the early phases of the transition.

And, by nature, transitions are very precarious.

COSTELLO: Our thanks to you, Hisham Melhem. Thank you so much for joining us this morning.

MELHEM: Thank you.

COSTELLO: Now is your chance to talk back on the big story of the day. The question for you this morning: was U.S. involvement in Libya worth it? There's no question now, Libyan leader Moammar Gadhafi's reign is just about over, thousands are reportedly dead, and it's likely more will die.

But thanks, in large part to NATO forces and the United States, Libya will likely be free of a cruel dictator. Libya is celebrating.

(VIDEO CLIP PLAYS)

COSTELLO: Here at home in the United States, the celebrations may be satisfying to watch, but the feeling is tempered. Like everything else, U.S. involvement in Libya was conflicted.

Liberal Congressman Dennis Kucinich accused President Obama of an impeachable offense because Mr. Obama moved forward on Libya without congressional approval.

Republican Senator John McCain was critical because he said President Obama didn't move fast enough to prevent a long, drawn out fight for freedom.

And Americans weary of war were also concerned about cost. According to the Obama administration, the Libya mission will cost American taxpayers $1.1 billion by September 30th. Still, in just six months, Gadhafi is just about gone.

And remember, he was slaughtering his own people. Al Jazeera estimated last month 13,000 Libyans have died in the conflict.

So, the talkback question this morning: was U.S. involvement in Libya worth it? Facebook.com/AmericanMorning. Facebook.com/AmericanMorning. I'll read your comments later this hour.

ROMANS: All right. So, the story is still developing in Libya. Stay with us for that.

We've also got a live report from Tripoli coming up.

And we're following developing news in that case against the former IMF chief Dominique Strauss-Kahn. He may be, soon, a free man -- reports that criminal charges may be dropped as on as today. We've got the latest on that.

(VIDEO CLIP PLAYS)

COSTELLO: Yes, it's unbelievable. Stunning violence at the 49ers/Raider football game. Two men shot, and now they're beaten in separate incidents.

ROMANS: Look at people just standing there, and taking pictures and videotaping it.

COSTELLO: Where is security?

ROMANS: It's lord of the flies.

And hurricane Irene barreling toward the U.S. A live from our hurricane headquarters, next.

It is about 12 minutes after the hour.

(COMMERCIAL BREAK)

COSTELLO: We are watching breaking news for you this morning. The battle raging on in parts of Libya. It could be the end game, however, for Libyan leader Moammar Gadhafi as Libyan rebels roll into the capital city and force the dictator into hiding. No one knows for sure where Moammar Gadhafi is right now. We'll keep you updated on this story whole morning long.

ROMANS: Other story new this morning, the hotel maid who accused one of the most powerful men in international finance of sexual assault -- she will meet with prosecutors today. The attorney for Nafi Diallo says he thinks the D.A. plans to drop the criminal case against Dominique Strauss-Kahn. Diallo's credibility was questioned after she lied about some of the events surrounding the day of the alleged attack. Her lawyers are expected to ask for a special prosecutor in this case.

CAROL COSTELLO, CNN ANCHOR: Fan violence erupting over the weekend at the annual preseason football game between the Oakland Raiders and the San Francisco 49ers. Take a look.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): Cameras at candlestick park captured fans brawling in the stands while dozens of others looked on and, frankly, cheered. One fan was severely beaten in the stadium bathroom. Two men were also shot in the parking lot. They are expected to survive. The mayors of San Francisco and Oakland released a statement saying violence will not be tolerated in either stadium, and public safety remains a top priority.

(END VIDEO CLIP)

ROMANS: What is so disturbing, all of it is disturbing, but those pictures of people taking pictures of it as if they're going to go home and show their friends, look at this guy getting beat up. I mean, it's horrific.

COSTELLO: I just -- I can't tell you how many times I've seen that in a football game. I think Philadelphia has the best idea. They have a jail right in the stadium and just throw their butts in there.

ROMANS: There you go. The drinking -- do you it's drinking do the TV time outs? Do you think that there' no action on the field, people are just drinking, drinking and drinking and getting in fights?

COSTELLO: Tailgate and drinking. People are drunk before they even get into the stadium.

ROMANS: All right. What was tropical storm Irene is now the season's first hurricane, and it could hit the U.S. by the end of the week. The storm picking strains overnight lashing Puerto Rico with heavy rain and 75-mile-an-hour winds, and Irene could pose a severe threat to the Florida coast by week's end.

COSTELLO: Well, let's get some more information on Irene. Reynolds Wolf is keeping a close eye on this hurricane. What does it look like?

REYNOLDS WOLF, AMS METEOROLOGIST: Well, it looks pretty impressive right now on radar, at least, our enhanced satellite imagery. This, very impressive. What we love to this thing could do is just die out all together and really not causing harms anyone whatsoever. It just remained out in the middle of the ocean until it just kind of fizzles out. What's going to happen is that it is going to continue its westerly movement. The thing is the next 18 to 24 hours is going to be the most crucial time, really the most crucial timeframe in the history or in the future of this storm.

And the reason why are two words. Let's see this spelled out. P-I-C-O-D-U-A-R-T-E. Picoduarte. That is a peak that is right in the central mountains of Hispanolia. If this storm gets very, very close to that, there's a chance that that high elevation could really begin to break up some of the inner circulation of this hurricane. If that happens, it can weaken very quickly. If this storm or hurricane remains a bit to the north away from Hispaniola, it's going to remain right out over the open water and can actually gain strength.

That's the scenario we don't want to see. I'll tell you, the latest forecast we have in the National Hurricane Center shows it moving right past Hispaniola, north of Cuba, into the Bahamas and will get to Thursday morning at 2:00 a.m. with winds of 90 miles per hour. Winds now at 75. You're expecting to go to 90. so, yes, there's a potential this will strengthen.

There's also a potential for this storm to actually die out over Cuba or stay offshore altogether away from the United States, but also, right in the middle, you see the possibility of it making landfall into Florid. That's as we fast forward from Thursday. You can extrapolate that on into Friday. So, again, next 18 to 24 hours, most important for this storm (ph). It really gives a better hand of how strong it's going to be and where it's headed.

Meantime, we've got a lot of weather taking place around the rest of the nation. Scattered showers and thunderstorms possible across much of the southeast. Northeast, morning shower, and that's going to move out. Drier air will move in. Already, it's being felt through parts of The Great Lakes. Very sunny for you up in the Northern Plains and back into Central Northern Rockies.

Central Plains, though, a chance of thunderstorms, and the hazy, hot, humid conditions continue for Texas. take a look at this. We've gone over 50 days this year with triple-digit heat in Dallas. Today, no exception. Going up to 104 degrees, 100 in El Paso, 90 degrees in Albuquerque, 91 in Tampa, 81 in Chicago, 86 in Washington, 91 in Tampa. Back at west, we go 82 in Portland, cooler in San Francisco with 69, and 72 in Los Angeles. All right. Guys, you're up to speed. Let's pitch it back to you, in New York.

COSTELLO: Thanks so much, Reynolds Wolf.

WOLF: You bet.

ROMANS: All right. The fast-moving events in Libya could affect gas and oil prices, believe it or not, and stock markets. Right now, we're going to tell you about that relationship and why what's happening in Libya could drive down oil prices and gas prices for you. How long will that take? We'll let you know. It's about 20 minutes after the hour.

(COMMERCIAL BREAK)

ROMANS: It's 23 minutes after the hour. "Minding Your Business" this morning. Wall Street bracing for another potentially rocky week in the markets after stiff losses across the board last week. Right now, U.S. stocks futures from the Dow, the NASDAQ, and the S&P 500 all looking higher ahead of the opening bell.

Investors getting a boost from a drop in oil prices overnight. That's after news the war in Libya could be come into an end, and the country could resume oil production and oil export again soon. Before the war started, Libya produced 1.8 million barrels of oil every day. That's about two percent of global supply.

Uncertainty over the debt crisis in Europe still has investors rushing to gold and another precious metals for security. After several days of record highs last week, gold prices are up by about $30 this morning again, trading around $1,880 an ounce.

The S&P 500 which is the best indicator for the stocks in your 401(k), the S&P has lost about 16.5 percent in the last month, but Wall Street experts are saying that the index is expected to rebound by about 20 percent by year's end. That's according to an exclusive survey by CNN.com.

45,000 Verizon workers ending their two-week strike, heading back to work today. The union announced Saturday that company management agreed to serious bargaining over employee benefits, but the two parties still have not reached a final agreement.

The Congressional black caucus will host a job fair and town hall meeting today in Miami. Top of the agenda, the high unemployment rate. About 16 percent of African-Americans are out of work. There could be a turnout similar to the one last week in Atlanta that drew thousands of people.

Up next, a majority of Libya's capital now under rebel control. We're live from Tripoli next. AMERICAN MORNING back right after this break.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): And we continue to watch this breaking news for you this morning. We're witnessing history unfold in Libya. Celebrations erupting across the country as rebels enter the heart of Tripoli. Moammar Gadhafi's 42-year reign may be in its last hours.

(END VIDEO CLIP)

COSTELLO (on-camera): And good morning to you. It is Monday, August 22nd. Welcome back to AMERICAN MORNING. Ali has the day off.

ROMANS: Wow. After six months of fighting, Libyan rebels appear to be on the brink of ending Moammar Gadhafi's 42-year role. They rolled into the heart of Tripoli yesterday. Beside a few remaining pockets of resistance, the rebels say they are in control of most of the capital and the nation.

COSTELLO: The rebels now say they've captured three of Gadhafi's sons, including one-time heir apparent, Saif al-Islam who, along with his father, faces charges of crimes against humanity at the international criminal court.

ROMANS: Gadhafi's whereabouts, though, are still unknown. New fighting was reported overnight around his bombed out compound in Tripoli. No one knows if he's there. No one knows if he's even in the country anymore. Now, the opposition believes that Gadhafi may, may have fled to neighboring Chad or Algeria.

COSTELLO: And in Tripoli, there are still pockets of resistance. Gunshots can still be heard just outside of Moammar Gadhafi's compound.

ROMANS: And that's where our Matthew Chance is standing by. Matthew, you heard gunshots near the hotel where you were staying earlier. Tell us what's happening there now.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Gunshots have been continuing past several minutes as well. The compound is a short distance behind me here. I'm at the Rixos Hotel. It's sort of been the same area of Tripoli as these key governments, Gadhafi installations. I think that's one of the reasons why Gadhafi's forces where as they capitulated in many areas of Tripoli and allowed the rebels to come in, virtually, unopposed in this area of Tripoli and in other pockets as well, which are considered emboldened by then.

We're seeing some quite heavy resistance by the Gadhafi forces. We've not seen any rebels, for instance, in this area. We have heard those fierce clashes. You might be able to hear gunfire behind me right now. But we haven't seen any of those scenes of celebration or seen the rebels take this area of Tripoli.

It's kind of a patchwork across the city of areas of control of the rebels and areas in control of Gadhafi loyalists. This is one of those areas, as I say, in control by Gadhafi's troops.

ROMANS: I'm just curious, Matthew, can you get out of the hotel, or are you being held inside? I know it's dangerous outside, too, so taking that into account, are you sort of stuck in that hotel?

CHANCE: Yes. We've been weighing out our options. We're in a difficult position. We're sort of -- we don't have a cameraman with us. We also haven't got a vehicle. So, that's a problem. Previously we had been depending on the government to get around. We now have been deprived of all of that.

The overriding situation, of course, the overriding situation is the fact that the government is still very much in control of this hotel and the perimeter, and they're not permitting us to go outside now. A number of journalists have requested to leave the hotel grounds and they have been refused. Remember, you've got armed men in the lobby of this hotel, armed men in the trees, hiding beneath the trees, around it, the compound as well, and some quite heavy weaponry on the perimeter of the hotel. So it's not a possibility of us going out at the moment. We're actually just hunkering down and waiting for this to pass, whatever comes next.

ROMANS: So Matthew, before this, western media were in Tripoli only under the watchful eye of the government, which you all reported that the government was around you with minders and the like. To go someplace, you had to go with a government escort. Now what is the relationship with the western media and, I guess, the last vestiges of the Gadhafi regime?

CHANCE: It's sort of as I described really. We're not seeing any government officials in the hotel anymore. The government chief spokesman is not at the hotel anymore. We're kind of alone here except for these gunmen in the lobby and the security forces on the perimeter of the hotel. And so we don't have any contact anymore with the government officials and the minders who were such a huge presence in this hotel previously.

I think one of the interesting things, Christine, that's happened over the course of the past 24 hours is elements of the Gadhafi regime have clearly crumbled. We've seen three of his sons taken into custody by the rebels. Whereabouts of the leader, as you say, unknown. Clearly, the regime is very much on a back foot, if you look at all the images and rebel advances that have been made elsewhere in the city.

ROMANS: And certainly armed on a back foot and around you, armed. So, that's a scary situation. Matthew, thank you, best of luck there.

COSTELLO: There was a wild side on Libyan state television over the weekend. Take a look at this. She is waving a gun. That's the news anchor. She's apparently warning rebels that she and her colleagues are ready to become martyrs to defend the station, saying, quote, "With this weapons I will either kill or die today." Of course this is state-run television and people are very much loyal to Moammar Gadhafi.

ROMANS: Gadhafi's regime has fallen apart. He is nowhere to be found. But Libyan rebels who have battled him for months may have the next best thing. Three of Gadhafi's sons are now in custody. CNN International Correspondent Nic Robertson is live with us in Washington for that. You know about these men. You have followed this had regime for so long. So his inner circle is crumbling here. How unstable is Gadhafi now without his three sons?

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: It will be very unstable. He really has just trusted his family. According to Saadi Gadhafi, one of those picked up, who I was meeting when I was in Tripoli on a number of occasions, he seemed to be the rebel in the family, if you will. There was even talk about him wanted to defect at one point.

But he said very clearly to me that it was his brother, Saif Gadhafi, who has now been picked up by the rebels, who is wanted by the International Criminal Court for war crimes, he said it was very clear that Saif was essentially running the country on a minute-by- minute basis. His father, Moammar Gadhafi, mighty have the overall picture but it's Saif, the man now captured by rebels.

So this will leave the father much more isolated than he was before. He would have lost key people he trusted. He would have lost the ability to perhaps control and influence his ability to even escape the city, if he is still hiding out there right now.

COSTELLO: Let's talk about that, Nic. I mean, let's say Gadhafi remains in hiding for a week or two or a month. Does it really matter as far as the state that Libya is in now? Will these opposition groups just go ahead and build a new government no matter if they find Moammar Gadhafi tomorrow or next month?

ROBERTSON: Certainly he has lost his ability to run the country. And he certainly retains the ability at the moment, it appears, to at least disrupt the peace that the rebels are going to try to put in place.

So in terms of a political building, political, to bring different groups together, it won't impede that physically. While he is still at large, it will worrisome people that he might be coming back. But I don't think people will believe for one minute that he can take power again.

So the bottom line is it's probably not going to matter that much. But the reality is as long as there are still pockets of resistance there in the capital, this is going to be a problem for the rebels. They don't know where these people are going to crop up. They don't know where the attacks can come from over the coming days and weeks.

So Gadhafi on the loose is a small, minor military irritant. It is politically slightly destabilizing, but it shouldn't, if these pockets of resistance are small that are loyal to Gadhafi, upset the rebels perhaps in the weeks going forward. If they know where Gadhafi is, they know he's surrounded, it's just a matter of capturing or killing him or whatever it is they're going to do with him.

ROMANS: Nic Robertson. It is fascinating, isn't it? Thanks, Nic.

COSTELLO: Coming up next, a new sense of urgency as NATO bombers pummel Gadhafi's troops this morning. The race to wrap up the campaign. Plus, what's next for Libya? It's 36 minutes past the hour.

(COMMERCIAL BREAK)

COSTELLO: Welcome back to AMERICAN MORNING. We're following breaking news this hour. After 42 years of iron fisted ruled of Libya, it appears to be the end is near for Moammar Gadhafi. Rebels now controlling most of the capital Tripoli.

ROMANS: There are concerns though this morning about the transition to a post-Gadhafi Libya nd questions about the role the U.S. should play. CNN's Barbara Starr is live at the Pentagon for us. Good morning, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Christine. Good morning, Carol. A lot of people may be waking up and thinking, so, another place for the possibility of U.S. combat troops? No, says the Pentagon. No plans, no thinking about putting U.S. troops on the ground here. They want whatever happens next to continue to be a coalition-led, a NATO-led operation.

There will be support for any transitional government, certainly humanitarian relief supplies, economic assistance, that sort of thing, political assistance if they ask for it. But don't look for U.S. troops on the ground.

That doesn't mean that NATO is going away any time soon, however. What a NATO official just described to me is that NATO will stay in the air over Libya. They will maintain the arms embargo. They will maintain the no-fly zone. They want to make sure that the Gadhafi loyalists cannot reemerge, cannot mass their forces, their weapons and make some sort of last-ditch stand on civilians. They will be keeping a very sharp eye out for that. And NATO says it will be ready to act if that possibility were to emerge. Christine, Carol?

ROMANS: All right, thanks, Barbara.

Let's bring in retired army general James "Spider" Marks. He's joining us now from Washington. General, I just want to talk about this idea of American boots on the ground. And I ask you this because there was an op-ed written by Richard Haass who is with the Council on Foreign Relations right now and a close adviser to Colin Powell back in the day.

This is what he writes in the "Financial Times." He says "U.S. President Barack Obama may need to consider his assertion that there would not be any American boots on the ground. Leadership is hard to assert absent participation. But whatever the international response, speed is essential. The passage of time is unlikely to make the options any easier or more appealing." In other words, if the United States wants Libya to become a democracy, doesn't the United States have to get intimately involved in what happens in that country in the creation of a new government?

MAJ. GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET.): Carol, they do. It's a great question. Clearly, what the United States has been trying to achieve is not the removal of Gadhafi, but the transition to something post-Gadhafi. Removing Gadhafi is simply the first step. Now the real hard work begins. U.S. forces on the ground it has been stated very emphatically will not participate. The thought is no one trains better than the United States. No one understands the match of requirements and the application of force in order to achieve those requirements than the United States, and the U.S. military can do that.

Now, an in-between or a negotiated position certainly can be, as described by Barbara, which is absolutely spot on. But what you're going to see in addition, or what she did not say is that there will be an over-the-horizon presence, both of ground forces in the form of Army and the Marine Corps that will be available at a moment's notice to provide force on the ground. But it looks like at least the administration says right now they will not allow U.S. troops on the ground.

COSTELLO: If there were such a force, how many troops are we talking about?

MARKS: That's truly speculative. I think the primary -- first of all, it would have to be assessed based on the mission and the circumstances on the ground. I think problem number one is who now takes control of Gadhafi's military? They have tanks. They have artillery, rockets, air defense systems, surface-to-surface missiles, ground-to-air missiles. So who will take control of that stuff?

Granted, they haven't demonstrated that Gadhafi's military has a very good handle on it right now. They're not very well trained. But nor are these opposition forces. So who takes charge of that stuff? That's kind of number one. Then number two, what happens immediately? Will there be score settling that would require forces on the ground to separate those individuals and those parties?

ROMANS: Let me ask you about the European influence. We talk about the U.S. on the horizon, as you say. What about the French or others who have been supplying military weapons and who have been intimately involved in this already? Should we assume that maybe there are special forces already on the ground from some other countries?

MARKS: I don't think we would assume that. The United States knows that. They know right now. They may not be telling us, that there's presence on the ground from other nation's special forces.

Maybe some of our own CIA folks or some special ops guys to provide that very last -- what I call that last tactical decision on the delivery of a number of those air strikes that have been taking place, because they are so incredibly precise.

So that presence may be there right now anyway. But we certainly will negotiate right now and in very close quarters ask those European powers to be prepared to put boots on the ground.

COSTELLO: Just to -- just to quantify how this mission has gone -- because Republicans were very critical of President Obama for not acting faster and not hitting harder. It's been about six months. For all intents and purposes, Gadhafi is out of power. How would you characterize the mission overall?

MARKS: Well you know Carol I wouldn't put a Republican or Democratic slant on this at all. First of all, the President made a declaration early on that he wanted to achieve the departure and transition of Gadhafi out of there.

Where you don't -- there was a huge mismatch between the application of air power alone and trying to achieve that. Now what has happened over the course of six months is a number of nations have stepped up and very surreptitiously have provided arms to the opposition forces.

And I would also argue there are probably trainers on the ground that have kept them moving in the right direction, this loose band, incredible patriots but moving in the right direction with a little bit of training.

So I would say, the end result is very positive. Gadhafi is going to be gone. We don't know what that's going to look like. But the key thing again is who is going to take charge of this very, very toxic, very chaotic situation that exists right now?

ROMANS: In the end, was the NATO mandate the right way to go? I mean there have been some criticism along the way that NATO had -- just had to protect the people, it wasn't really charged with removing him from power. Could this have been done more quickly in your view?

MARKS: Oh absolutely, I think this is a classic example of mission creep. We kind of stumbled into what we're seeing right now. But that's ok. If the end result is there is a transition that's taking place in Libya, let's work real hard to ensure it's the right transition.

COSTELLO: Major General James "Spider" Marks, interesting as always. Thank you so much for being with us.

MARKS: Thank you both.

COSTELLO: Morning headlines coming your way next, including how developments in Libya are impacting stock markets right now. Its 47 past the hour.

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COSTELLO: Its 48 minutes past the hour. Here are your morning headlines.

Breaking news this morning: Moammar Gadhafi hanging on to the last thread of power right now. New explosions rocked his compound overnight, the rebels have now taken over most of Tripoli and say they are in control. The fighting in the past hour has forced some of them back.

Gadhafi's whereabouts still unknown. The opposition says he may have fled to a bordering country. Rebels have now captured three of his sons. One is expected to face charges of crimes against humanity at The Hague.

U.S. stock markets open in just about 45 minutes. Right now futures for the Dow, NASDAQ and S&P 500 all trading higher ahead of the opening bell. Wall Street is bracing though for another potentially rocky week after steep losses across the board last week.

The S&P 500 which is the best indicator for the stocks and your 401(k) has lost about 16.5 percent in the past month. The Wall Street experts are saying that index is expected to rebound by about 20 percent by year's end. That's according to an exclusive survey by CNNMoney.com.

And violence at Candlestick Park in San Francisco this weekend; it happened at the 49ers/Raiders game. Cameras capture's fans brawling in the stands. Another fan was severely beaten in the restroom. And police are investigating a double shooting in the parking lot.

The hotel maid who accused Dominique Strauss-Kahn of sexual assault will meet with prosecutors today. The attorney for Nafi Diallo says he thinks the DA plans to drop the criminal case. In the meantime, Diallo's lawyers are expected to ask for a special prosecutor.

And tropical storm Irene growing into a hurricane overnight, the first of the season, the storm lashing Puerto Rico with heavy rain and high winds as it moves on a path that could take it to the Florida close -- Florida Coast rather -- in just a few days.

That's the news you need to start your day. AMERICAN MORNING back after this break.

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COSTELLO: It's kind of like the Fourth of July. Breaking news this morning; Libyans celebrating what they believe is the end of Moammar Gadhafi's regime, fireworks in the city of Mesrata. No place suffered more in the civil war than Mesrata.

Libyan rebels say they now control most of the capital city of Tripoli. Though some intense fighting is still going on right now. Gadhafi has still not given up and remains in hiding.

ROMANS: Carol, I want to show you a sort of an aerial view of the action in Tripoli. Rebels say they hold 80 percent of the city. But there are still some hot spots. This is an important line right here, an old Gadhafi defensive line that is now has been breached by the -- the rebels.

And here, this are Rixos Hotel, this is where rebel forces say they captured one of Gadhafi's sons, Saif al-Islam. Rebels say other two sons Saadi and Mohammed have also been captured elsewhere in the city. But the -- the hotel is not completely in rebel hands.

Of course, our Matthew Chance is hearing gunfire there right now as loyalist forces try to hold on to this Tripoli landmark. One reason is because it is so close to Gadhafi's compound, which is about two miles away. Gadhafi loyalists there are also reportedly trying to defend their leaders' massive compound.

Reuters is reporting that they are stationing tanks along the perimeter there and it's not clear if Gadhafi is inside and much of this has been bombed out.

We also have just down the road here -- Tripoli's main square, it used to be called Green Square. This is the site of pro- Gadhafi's loyalists just -- just a month ago. Now you can see a -- a poster of Gadhafi -- Colonel Gadhafi covering the square, this is the square today, it's now called Martyr's Square after rebels streamed into the area last night to celebrate reaching the capital.

This morning our Sara Sidner is now reporting heavy gunfire and loud explosions in the area as the rebels there are organizing some sort of new offensive as well -- Carol.

COSTELLO: Thanks, Christine.

So what are the opinion pages saying about Libya this morning? Here is your dose of "Morning Opinion". "The Wall Street Journal" is critical of the United States for not taking a stronger stand on Libya from the beginning. Its editorial saying in part, "The shame is how much faster Gadhafi might have been defeated, how many fewer people might have been killed and how much more influence the United States might have if America had led more forcefully from the beginning."

Coming up next, our talk back question of the day, "Was U.S. involvement in Libya worth it?" We'll read some of your responses. Its 54 minutes past the hour.

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ROMANS: People in Tripoli celebrating what appears to be their newfound freedom. Libyan rebels say they now control most of the capital. Moammar Gadhafi thought has still not given up and remains in hiding. Some rebel forces were even forced back in the past 90 minutes. President Obama is saying Gadhafi should now recognize that it's simply over for him.

We've been asking you to talk back on one of the big stories of the day. Actually, the big story of the day. We asked you this question: Was U.S. involvement in Libya worth it?

This is from Jeremy, he says this could go both ways with his U.S. involvement. A dangerous dictator is being taken down, but using our American tax dollars to help with it is an irresponsible move by the U.S. government. This erratic spending of tax money is why America is in debt in the first place. So in my opinion, the only reason we are involved is to take control of the oil in that region.

This from Dennis, "Absolutely, any involvement in fight for freedom is worth it. That said, I am glad the President decided to act in support of the NATO coalition instead of acting unilaterally. I am convinced this helped avoid an exacerbation of anti-American feelings in the area.

And this Chelsea, "It's too early to tell. If Libya's new government turns out to be stable and Democratic, if it respects the rights of its people and maintains good relations with other nations, then yes, NATO intervention was worth it. If the country develops into mob rule, another dictatorship, corruption, supports terrorism et cetera, then I'm not sure the Libyans will be better off than before we acted.

Facebook.com/AmericanMorning if you'd like to continue the conversation. And thank you as always for your comments.

ROMANS: Absolutely. Still waiting for the end game. Where is Moammar Gadhafi and just how many hours may be left in his rule? So a developing story as we speak.

COSTELLO: You heard Nic Robertson say it doesn't really matter if they catch him or not. It's a new day in Libya.

ROMANS: That's right.

COSTELLO: And they're already planning for a new government there.

ROMANS: And his circle has been broken. Three of his sons have been arrested. Now it's just a matter of time for Moammar Gadhafi after 42 very long years, maybe long hours or days ahead, but it is the beginning of the end.

"CNN NEWSROOM" with Kyra Phillips picks up the story from here right now. Good morning, Kyra.

KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": Good morning guys. Thanks so much.