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Deadly Bombing in Iraq; Bangladesh Remembers Victims of Easter Attack; What Reconciliation Means for Turkey, Israel; Deadly Floods in Pakistan, India; British Candidates Campaign for P.M. Position; Worries in Scotland over Whiskey Business; Welch Town Says No Thanks to E.U. Support; Federal Elections Fail in Australia; Rio's Mayor Says City Ready for Olympics; Fairytale over for Iceland in Euro 2016. Aired 2-3a ET

Aired July 04, 2016 - 02:00   ET

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

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[02:01:19] ROSEMARY CHURCH, CNN ANCHOR: Hello, and welcome everyone. I am Rosemary Church. This is CNN NEWSROOM.

With Ramadan winding down, ISIS had been true to its words of more attack during the Muslim month. Terrorists claiming responsibility of the recent bombings in Jordan and Yemen. They're suspected of storming Istanbul's airport last week and a series of suicide attacks in Lebanon. ISIS says of it is behind the attacks in Bangladesh.

Now, one of the deadliest bombings in years in the Iraqis capitol. It happened in Baghdad's Karrada neighborhood. At least 125 people were killed and 25 of them are children. A second bomb at an outdoor market in north eastern Baghdad killed one more person. People held a candlelight vigil for the victims on Sunday.

One eyewitness who barely escaped the bombing in Karrada described what he saw.

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UNIDENTIFIED WITNESS (V): Firefighters came through. Many of the families had relatives and friends. They were not going to clear the area. They started going to buildings all around. They could not go inside because the fire were so strong. We were standing near the building and trying to reach out to people. We actually -- I went up to one of the buildings and helping as much out as possible. We can hear them screaming out to us, those who are trapped. There were people trapped within the buildings and hoping to get away from the heat. We were able to save a few people coming out. We were trying to come out the opening of the building. Unfortunately, however, there were people who were still trapped and locked doors on top of the building. They were not able to break. Either were the firefighters due to lack of equipment. Many of those that were in the building, their bodies were cleared after the fact. And about six or seven hours later, we were just looking for people to try to save as much as possible. Some of -- some firefighters with no clothes on, wore a mask and trying to go inside and saving people. They were able to take a couple. The people were trapped inside.

(END VIDEO CLIP)

CHURCH: Terrifying witness report there.

Joining us now, Jomana Karadsheh.

Jomana, 126 people killed and all 25 of them are children, simply chilling. What do authorities know about this attack that ISIS is claiming responsibility for and what are they saying to people who are feeling incredibly vulnerable?

[02:04:55]JOMANA KARADSHEH, CNN CORRESPONDENT: Well, Rosemary, unfortunately, the reality of Iran, just one more horrible incident like this where a suicide bomber driving a car packed with explosives targeting a commercial area is the heart of Baghdad, of Karrada. This is part of the cafe and the main commercial district of the capitol, Baghdad and of course, as we have seen in the past suicide bombers send to target the soft target. The question here for authorities, Rosemary, many people are talking is how did bombers of so much explosives going undetected and reaching its target in Karrada.

You have to go through a lot of check points. A lot of people are blaming security more than ISIS of what happened. The blame really here is at these explosive detectors that the Iraqis had been using for years now. Basically, is what is known as The One (ph). When you go through a check point, security forces and military would use explosive detector to check if cars carrying explosives and what would happen is this detector would point to a possibility of explosives in the car or the car would be sent for additional screening. The problem here is that this explosive detector years ago was found to be fake. The manufacture was sentenced to 10 years in prison in the United Kingdom for fraud. He sold this detector to several countries around the world. This is been pulled off the market. And British police at that time described is a fancy golf ball detector that's still being used in Baghdad, and up until that attack happened. A lot of questions about why it was still being used even though authorities knew it was fake and it had failed to pick up explosives.

We heard the Iraqis prime minister coming out with a late statement last night where he's ordering detectors to pull off check point and he's re-launching an investigation into how these approaches of these detectors were made and how they ended up on Iraq's streets. Right now, at this point, Rosemary, a lot of anger and frustration and they have endured so much and really they're getting to a point where they cannot take this anymore. This violence of a daily reality and only seem to be increasing at this point.

CHURCH: Totally understandable. Those questions need some answers.

Jomana Karadsheh joining us there. We'll talk again. Many thanks.

The terror attacks in Baghdad are the latest to hit the Iraqi capitol. The U.N. estimates last month alone of 236 civilians were killed and 742 injured in terror attacks and battles. Through the first six months of the year, more than 1570 have been killed in Baghdad and nearly 4500 injured

Saudi Arabia authorities are investigating a suicide blast near the U.S. consulate in Jeddah. State news says police approached the man wandering in a hospital park lot. He detonated an explosive bomb and died in that blast. Two police officers were taken to the hospital with minor injuries. The hospital is about 10 meters from the U.S. consulate.

Bangladesh is remembering the victims of this weekend Easter error attack. Prime minister paid tribute to the 22 victims of the cafe siege. On Saturday, she called of the two days of national tribute.

Joining us now, Nima Elbagir.

Nima, the soul surviving gunman is injured and unable to talk to authorities right now. That'll happen eventually, what have investigators have learned so far of the attacker and why they struck this particular cafe?

[02:09:45] NIMA ELBAGIR, CNN SENOR INTERNATIONAL CORRESPONDENT: What authorities have said is all attackers were Bangladeshi and all of them were from Dhaka, the capitol city.

At least five of the seven attackers are people authorities had been following and wanting to arrest for quite some time. As you mentioned, the surviving gunmen are the key to so many questions that we have as to who's behind this and why they did this. He's in no condition to talk. Authorities have not been able to get anything out of him.

Dhaka is one of those cities, it is one of the site where everyone knows everyone. As soon as the local media, newspaper online they started publishing pictures of the attackers, there were many people who knew the attacker, for example, sons or cousins or friends, people knew some of these attackers and what really stands out in this case is how it just regularly, how normal they were. There were guys coming in with jeans and T-shirts on and some of them spoke English and they seem to be educated and coming from upper class background and they had Facebook pages. That's what really struck a lot of people just how normal and regular these guys are. They were not educated -- that's what people in Bangladesh are talking about at the moment -- Rosemary?

CHURCH: All right, Nima Elbagir joining us. Thank you, on the investigation. We appreciate that and we'll talk to you again.

The people killed in the Dhaka attack came from five different countries. Seven were Japanese nationals. And Japan has arranged for victims families to travel to Bangladesh.

Our Matt Rivers joins us from Tokyo.

Matt, how is Japan reacting to this tragedy and what are we learning of the victims of Japan? MATT RIVERS, CNN ASIA-PACIFIC EDITOR: Well, there is been an enormous

outcry for these families. Those families left Tokyo evening time here yesterday, Tokyo time. They arrived in Bangladesh this morning. We have been told that some of those families have made their way to their hospital where the remains of their loved ones are. They'll go through that process over the next several hours, perhaps, returning to Japan as early as tomorrow and no specific time frame had been officially laid out so far. They are joined in Bangladesh by the minister here in Japan and a team of experts went to Japan went to Bangladesh to assist for the operation.

We're learning more of the victims, the eight people that were injured or killed. Seven killed and one person injured from Japan were all there as apart of the Japanese International Agency. That's a government agency here in Japan assisting projects in developing countries. This team was actually trying to work on the traffic situation in Bangladesh. In Dhaka, there is a growing population and traffic is an issue

One of those people, 32-year-old Makoto Okamoto, was there as part of the team. His father and grandmother spoke to local media here in Japan yesterday before they went to Bangladesh to collect his body. Here is what they had to say.

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UNIDENTIFIED MALE (through translation): He was very proud of his work as he could work hard for the country and development. Everybody loved him. He is a good man.

UNIDENTIFIED FEMALE: He was a very, very good boy. I really hope the news is wrong and now I cannot do anything.

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RIVERS: You can see the pain that the family is going through. We see it a lot this weekend and so many different places and Istanbul and in Baghdad and Dhaka. It does not get easier to see these interviews and see the pain of these families.

CHURCH: Yes, breaking stories of these victims and families. Matt Rivers, thank you very much for joining us there.

Two suspected ISIS militant have been arrested at Istanbul's Ataturk Airport. State media says the man arrived from Ukraine on Sunday. They had multiple passports, military items, and I.D. cards that belong to other people. Turkish authorities are investigating more than two dozen people in connection with last weeks attack.

Nima Elbagir has the latest.

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[02:14:55] NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: More arrests, house searches and raids as Turkey continues it's investigation in the horrifying terror attack on Istanbul's Ataturk airport.

Quite early on in the investigation, Turkish officials told CNN that they believed that this attack was planned, overseen and commissioned inside the sources, and it appears that they are targeting both foreigners and Turkish citizens in this latest round of arrests, trying to ascertain the extent of the support network that was involved in bolstering the actions of the three suspected foreign attackers.

This comes as, in spite of the nation's continuing state of high security alert, the Turkish president had some good news for the 2.6 million Syrian refugees seeking refugee in the country.

RECEP TAYYIP ERDOGAN, TURKISH PRESIDENT (through translation): Tonight, I want to give some good news to my brothers and sisters here. Among our brothers and sister, I believe there are those who would like to obtain citizenship in the Turkish republic. Our interior ministry is taking steps in that regard.

ELBAGIR: This, of course, is in direct contradiction to the concerns espoused by many of Turkey's European neighbors that within the flow of Syrian refugees could potentially be hiding Syrian terrorists, or those masquerading as Syrian terrorists.

For now, though, even as his country continues to reel, not just from Tuesday's attack, but months of terror outrages, Turkish president is bargaining on reality that this will not make his country even more insecure.

Nima Elbagir, CNN, Istanbul.

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CHURCH: Authorities in Kuwait say they prevented three ISIS plots with a series of preemptive operations on Sunday. State media report the militants targeted a Shiite mosque and a ministry of facility. They planned to strike in the first day after Ramadan.

A clear sign this weekend of renewed relationship between Turkey and Israel. The role this vessel is playing in a new diplomatic agreement. That's coming up.

Plus, flooding in northern Pakistan that killed dozens of people. Authorities fear the situation could get worse.

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[02:21:34] CHURCH: A search vessel has recovered all human remains found at the crash site of EgyptAir flight 804. They will be given to partners of forensic in Cairo for DNA analysis. The plane went down on May 19th, all 66 people on board were killed.

A Turkish ship carrying aid for Palestine has docked for Israel. This delivery is more than simple gesture of goodwill.

CNN's Oren Liebermann explains.

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OREN LIEBERMANN, CNN CORRESPONDENT: A Turkish ship called the "Lady Leyla" carrying aid for Palestinians has docked in Israel on Sunday afternoon bound for Gaza. It's a sign of warming ties between Israel and Turkey after the two countries signed a reconciliation agreement last week, normalizing relations between the countries. The supplies on board the "Lady Leyla" filling more than 42 containers include humanitarian and medical supplies, as well as toys, according to Israel's foreign ministry. The ship left Turkey on Friday. And the first of the supplies will cross into Gaza tomorrow, the ministry said.

Israel and Turkey have had strained ties for six years now following the Israeli raid on the Turkish Gaza bound ship. Nine Turks were killed in the raid. Israel said the ship vial late Israel's blockade of Gaza, and the Israeli commandos were attacked with knives and other weapons when they boarded the ship.

Prime Minister Benjamin Netanyahu apologized for raid in March of 2013. But the apology didn't really thaw relations. Last year, Israeli and Turkish negotiators began meeting in secret on a reconciliation deal. The final deal signed last week included a $20 million compensation fund for the families of those killed in the raid. The two countries also agreed to return ambassadors to Ankara and Tel Aviv and begin discussions about the sale of possible natural gas from Israel to Turkey.

Oren Liebermann, CNN, Jerusalem.

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CHURCH: Rescuers are trying to save people in northern Pakistan and India. At least 70 houses destroyed in Pakistan. The Pakistan army providing food and tents and medicine to those who need it. And to make things worse, monsoon rain are expected in the days ahead.

We are joined by our Meteorologist Pedram Javaheri about this flooding.

This is a problem. More flooding is to come.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Yeah, Rosemary, when you look at the calendar it is early July. It's the key time for monsoon rains. Just getting under way. Several weeks, and a problem.

The landscape across the region, you know with Pakistan of its region and the images show you exactly what is taking place and the background of where the river should be, well into the background across the region. Those are the Hindu Kush Mountains of heaviest rainfall coming down. We estimate to 150 millimeters of rainfall across town where the flooding is taking place. The surrounding mountains, that's the concern of this region. But, he takes that water from the side of this mountain and funneling it down. That's precisely why we are seeing so much water accumulated in the area and of course, we talked about the monsoon being in full swing and I noticed the white dash there. Look at this, that's the closest observation that we have of 146 millimeters in just 24 hours time. It is not just Pakistan or India. Places like China receiving many rains. The river should be on the right hand side of your screen, it is taking over some of the streets across the city, populated. We have been looking at these numbers 200 meters came down. Rainfalls in two days accumulated of 200 millimeters. That's much rainfall will fall in the city of London of five mop months. So you take a look at monsoonal progression once again beginning of July. So everything really playing out to where you climatologically would expect but unfortunately more heavy rainfall across this region as well in the next couple of days.

I want to leave you with this though. We did not talk about a tropical storm in the Western Pacific Ocean. 200 days to be exact. The last time we had a named tropical storm. This is our first named tropical storm of 2016. The model is taking us out to Shanghai or Taipei. It may impact us later this week. Something we are following in the weather department.

[02:26:34] CHURCH: Thanks so much.

Always worried for Taiwan.

JAVAHERI: Exactly. It's like Florida in the U.S., in the path. It is so vulnerable.

CHURCH: Exactly right. Let's talk about it next hour.

Appreciate it.

JAVAHERI: Thanks, Rosemary.

CHURCH: Efforts are on the way right now in China to rescue two groups of minors from two separate mines. Officials say twelve men were trapped. Authorities are talking to the men by phone. They're working pump water out of that mine. Rescue efforts are under way in southwest China. Six men were trapped there when the mines suddenly flooded.

It's the latest political battle triggered by the Brexit vote. Ahead, the candidates hoping to move in to Downing Street. Plus, political uncertainty in Australia after an indecisive federal election. What the future could hold for the ruling coalition. We'll have that and more still to come. Stay with us.

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[02:30:48] ROSEMARY CHURCH, CNN ANCHOR: A warm welcome back. You are watching CNN NEWSROOM. I'm Rosemary Church.

It is, of course, time to check the headlines this hour.

(HEADLINES) CHURCH: The Conservative Party race to replace British Prime Minister David Cameron begins in earnest Monday. Five candidates are campaigning for the post but Home Secretary Theresa May, shown in the center, has emerged as a front runner. She campaigned for a Remain vote for Brexit referendum. Critics say the next leader should come from the Leave side.

CNN's Isa Soares joins us live from Downing Street with the latest.

So, Isa, always uncertainties in helping Britain, of course. When may the people know who the leader will be guiding us in this troubled water?

ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Troubled waters, indeed. Good morning, Rosemary. I can say, a week of political treachery. We may get a sense of some political normalcy this week. We know the five candidates will be up for votes starting tomorrow. There will be secret ballots.

How it works, let me explain to viewers. Five candidates, there will be ballots on Tuesday, tomorrow and Thursday. The plan is it is whittled down to two people. Secret ballots. There are 300-plus M.P.'s voting for their candidates until it goes down to two. When it goes down to two, then the Conservative Party will be voting on who they think should be prime minister.

Some say perhaps this week we should know, but without a doubt, by next week, there should be a clear idea of who will be our prime minister -- Rosie?

CHURCH: Quickly, a lot of people saying to raise the bar for the front runner. What happens there if she was with the Remain campaign?

SOARES: Absolutely. The critics, we know that Theresa May is being called steely. She's got a safe pair of hand, is in charge of the Home Office. She's a bit boring some say. But many are criticizing here, her critics. By critics, I mean the other candidates, Michael Gove as well as Angela Lehsome (ph). They both come out in the last 24 hours saying, if we're going to have a prime minister, it needs to be who went for Brexit. So they're calling it Brexit by the back door.

Take a listen on what she had to say to those critics.

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THERESA MAY, BRITISH HOME SECRETARY: 17 million people voted to leave, 16 million people voted to remain, but now we have a decision that we'll meet. I've been clear that Brexit means Brexit. What we need to do is bring those two sides together, bring Leave and Remain together and bring the country together and move forward. The question is not what was your view 10 days ago or what did you vote 10 days ago, what are you going to do now and how are you going to save the future, and how are you going to take it forward.

(END VIDEO CLIP) SOARES: Michael Gove came out and said she lacks the moral authority for prime minister because she campaigned to Remain. As you heard, she's promising to bring the country together. She says Brexit is Brexit. While the political treacheries have ended for now, Rosie, it seems there's a little bit of stabbing continues for the time being.

[02:35:23] CHURCH: Yes, Machiavellian, for sure.

Isa Soares, so much more to talk about. Let's do that the next hour for sure. Appreciate it.

SOARES: Thank you.

CHURCH: The Brexit vote is creating new worries for small businesses in Scotland. It's leaving a sour taste for a distillery owner, who wants things to stay old fashion.

CNN's David McKenzie reports.

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DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): Even in midsummer, it is chilly in the hills. For centuries, farmers have been tapping these springs, crafting heartwarming scotch.

ANDREW SYMINGTON, EDRADOUR DISTILLERY OWNER: The smallest in Scotland.

MCKENZIE: Andrew Symington owns the Edradour, the smallest distillery in Scotland. The majority of his single malt is exported to Europe. In the common market, shipping his bottle to Berlin is as easy sending them down the street.

SYMINGTON: It is a small country and big bonds.

MCKENZIE: The Scots voting overwhelmingly to remain in the E.U. but they could be forced out. Symington says it is bad for business.

SYMINGTON: The big multinationals I think are in a far better position to handle it. In fact, some could leave Britain completely and keep their headquarters anywhere.

MCKENZIE: Of course, he can only make scotch in Scotland. So Edradour is not going anywhere.

And having free access to 27 European countries is critical to their future.

MCKENZIE: Symington was banking on stability, investing nearly $7 million in on expansion plans. That's all the change. That's a major one for expenses.

SYMINGTON: (INAUDIBLE)

MCKENZIE: But he has to play the long game. Single malts maturing in bourbon, sherry and burgundy casks for at least a decade before it goes to market.

SYMINGTON: There you have it.

MCKENZIE: He's Edradour's custodian for the next generation.

David McKenzie, CNN, Scotland.

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CHURCH: A startling turn of events for a town in southern Wales that voted in favor of Brexit. Some want to know why a town that benefited for years from E.U. support would vote to leave it.

CNN'S Phil Black explains why this town is saying no thanks to the money now.

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PHIL BLACK, CNN CORRESPONDENT (voice-over): A small town in a region known as the valley. It is once built around coal mines. They closed decades ago. So did the steel plant and tough times followed, poverty, unemployment. For many, the loss of hope.

That's why the European Union took an interest. Through the summer rain of a Welch summer day, you can see the E.U. flag everywhere. It is often close to new buildings and infrastructure that the E.U. helped paid for like this huge sports and education center, a new trailer or a major new road. The E.U. money also helps people with job training and apprenticeships. The E.U. has contributed around $145 million pounds to this local area over the last 15 years.

(on camera): You think the E.U. pumped a lot of money into this town.

UNIDENTIFIED MALE: Yes, they know that.

BLACK: But, it voted out anyway.

UNIDENTIFIED MALE: Yes.

BLACK (voice-over): It's a contradiction not easily explained. This area voted for Britain to exit E.U. by 62 percent.

Despite being a net beneficiary, it gets back a lot more than it contributed.

(on camera): There is a lot of money that comes here from Europe.

BLACK (on camera): A lot of money.

BLACK: Where's that going to come from?

UNIDENTIFIED MALE: That's the question.

BLACK: Well, do you think the people have shot themselves in the foot?

UNIDENTIFIED MALE: I voted out and I've got me doubts now.