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State Department: Iran Response on Nuclear Program 'Falls Short'; Militant Group Claims Responsibility For Kidnapping of FOX Journalists

Aired August 23, 2006 - 15:00   ET

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


KYRA PHILLIPS, CNN ANCHOR: Long and wordy, but still falls short, Iran's response to U.N. nuclear demands, in the view of the U.S. State Department.
Let's get straight to our senior U.N. correspondent, Richard Roth, with the latest -- Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: A statement from the -- the State Department says that the United States considers that Iran's response falls short of international demands to freeze the nuclear program that Iran has working.

The announcement comes amid a phone call between President Bush and Kofi Annan. The secretary-general, through his spokesman, is now, it's confirmed, going to go to the Middle East. Besides Lebanon and Israel, he will be stopping in Iran. Not clear if it will be before the deadline of the Security Council resolution of August 31. It appears unlikely.

His spokesman described the purpose of the mission, which is certainly still focused on the resolution on the Middle East.

(BEGIN VIDEO CLIP)

STEPHANE DUJARRIC, UNITED NATIONS SPOKESPERSON: A visit to -- to Iran, as to the other places, are to -- to make sure that all of those who have an influence in the implementation of -- of 1701 use that influence positively. The Iranians need to be part of that -- of that dialogue. And that's in the spirit the secretary-general is -- is going into.

QUESTION: (OFF-MIKE) the Americans (OFF-MIKE)

DUJARRIC: The secretary-general has -- you know, has set his -- is -- is setting his trip. He has -- he has the mandate of the -- of the Security Council.

(END VIDEO CLIP)

ROTH: The U.S. statement said it considered the Iranian response a serious one, and that it's reviewing it.

But diplomats from the countries that have been talking to Iran have made it clear, they're prepared to move rather quickly, Kyra, to move to a new resolution, to back up the one saying that Iran has to comply, or else face sanctions -- Kyra.

PHILLIPS: All right, what more do you know about this trip to the Mideast, Richard? And do you think it's going to -- to make an impact, and he will be able to really have effective talks?

ROTH: Well, the trip starts off in Brussels on Friday, where there's a very important meeting of European foreign ministers.

The Europeans have not stepped up to the plate, as much as the U.N. peacekeeping department and others would like, regarding supplying troops to the Lebanon UNIFIL mission. They passed this resolution a couple of weeks ago, but they haven't really backed it up with the amount of force. And many have said there's a vacuum there.

Then he moves on to Lebanon, Israel, the Palestinian territories, where there's an ongoing crisis, which has not received the amount of publicity Lebanon has. And, then, the trip includes other Middle East countries, Saudi Arabia, maybe Syria, places where spokesman for Kofi Annan says could have some influence in the region, in Lebanon, Israel.

Many have said that Syria and Iran have backed Hezbollah to ignite trouble. Others say, those two countries could play an important role in making a more lasting peace in the area.

Annan only has five more months or so left in office. He still has some capital, but it's unclear whether the countries will step up to plate for him.

PHILLIPS: Well, Richard Roth, appreciate it.

From the Middle East, a claim of responsibility; from the U.S. government, condemnation -- for the first time since two FOX journalists were kidnapped in Gaza, an indication that they are OK, or at least they were when the video was made.

A militant group that no one has heard of before says it's holding them. The U.S. State Department condemns the kidnapping and wants Steve Centanni and Olaf Wiig released immediately.

CNN's Chris Lawrence is following developments from Jerusalem.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Held captive for 10 days, journalists Steve Centanni and Olaf Wiig appeared on this videotape, pleading for their freedom.

OLAF WIIG, FOX NEWS PHOTOJOURNALIST: If you could apply any political pressure on local government here in -- in Gaza and the West Bank.

LAWRENCE: Sitting on the floor mat, with no militants in sight, FOX News reporter Steve Centanni said they're being treated well.

STEVE CENTANNI, FOX NEWS REPORTER: We get lots of clean water, food every day, access to the bathroom, shower, clean clothes.

LAWRENCE: Their families have made public pleas for their release.

ANITA MCNAUGHT, WIFE OF OLAF WIIG: I know the people of Gaza are good people, and you will bring my husband home to me.

WIIG: ... my family.

LAWRENCE: Photographer Olaf Wiig spoke directly to his family.

WIIG: Please don't worry. I will do all the worrying for us.

LAWRENCE: Over the past two years, at least 26 foreigners have been kidnapped from Gaza, nine of them from the media. Hostages had usually been released within hours. But this kidnapping and threats of more to come caused some media to pull out of the area.

(on camera): For now, we don't go across the checkpoint. Palestinian security sources tell us, an unnamed militant group has threatened to kidnap any foreign journalist caught in Gaza. The latest threat specifically targets those with U.S. or British passports.

(voice-over): A previously unknown militant group called the Holy Jihad Brigades claimed responsibility for this kidnapping and demanded, the U.S. release Muslim prisoners from its jails within the next three days.

CENTANNI: ... ask you to do anything you can to try to help us get out of here.

LAWRENCE: The kidnappers make no specific statement about what they will do if their terms are not met.

Chris Lawrence, CNN, Jerusalem.

(END VIDEOTAPE)

PHILLIPS: Claims and counterclaims, but still no proof that John Mark Karr was anywhere on December 25, 1996. Karr allegedly says he hid in JonBenet Ramsey's house all Christmas night. His family says, no way, but, so far, they haven't come up with proof that he was with them.

Our Ed Lavandera is in Boulder, Colorado, where investigators are still waiting their turn to ask the questions -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, it looks like they will have to wait a little bit longer to see John Mark Karr here in Boulder. It does not look like his movement from -- his move from California to Colorado is going to happen today.

Boulder authorities have up un -- up to 10 days to move him, under the rules of extradition. So, there is plenty of time. And, of course, prosecutors here have been kind of up -- up against a wall. The moment he touches down here, they have 72 hours, three days, to file the necessary charges against him. They can request to push that -- push that time back, but, initially, that is some of the rules that are on the table facing prosecutors, as they continue to try to make sense of the things that John Mark Karr has been saying and the different pieces of evidence that have been emerging.

Of course, as you mentioned, Kyra, the -- the family photos that were -- the families had promised to -- to reveal as soon as possible showing that John Mark Karr was not in Boulder that Christmas season back in 1996 when JonBenet Ramsey was murdered, but, so far, John Mark Karr's family says they have only been able to find a picture that shows his three kids together, but it does not include him in the picture.

We also know that his second ex-wife has been cooperating with Boulder authorities, trying to piece together that timeline, from where he was, back in December of '96.

PHILLIPS: OK, Ed, thanks.

Well, between December 26, 1996, and last week, investigators in Boulder had looked at a lot of potential suspects in the JonBenet mystery, up to and including Santa Claus.

Here's CNN's Randi Kaye.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): Two days before JonBenet Ramsey died, Bill McReynolds played Santa Claus in her home. His wife, Janet, played Mrs. Claus. After JonBenet's death, investigators instantly became curious about the couple.

BILL MCREYNOLDS, RAMSEY FAMILY FRIEND: No, I didn't do it.

KAYE: That was Santa Bill back in February of 1997. But too many eerie parallels between the McReynolds and the Ramseys told investigators not to the give up. Trip DeMuth was a prosecutor on the case. He says Santa Bill gave JonBenet a card that read, "You will receive a special gift after Christmas."

TRIP DEMUTH, FORMER BOULDER, COLORADO, DEPUTY DISTRICT ATTORNEY: Statements like that led -- led me to have some suspicion about him, I mean, what was going on between Santa Bill and JonBenet. You know, again, here's an individual who's involved with her, has an interest in her, was seen with her shortly before the murder.

KAYE: And then investigators discovered this: The McReynolds' daughter had been abducted 22 years to the day before JonBenet's death. And Janet McReynolds had written a play about a child who was molested in her basement, then murdered. Santa Bill and his wife submitted hair, handwriting, and blood samples.

They talked about the ordeal on "LARRY KING LIVE".

(BEGIN VIDEO CLIP, "LARRY KING LIVE") JANET MCREYNOLDS, RAMSEY FAMILY FRIEND: We had nothing to hide. We had no reason to not cooperate.

(END VIDEO CLIP)

KAYE: Long before his death in 2002, Santa Bill was cleared. Trip DeMuth recalls, his DNA wasn't a match. But there was more than 100 other potential suspects that needed investigating.

(on camera): Including Michael Helgoth, the Colorado native who died shortly after the murder. But his death left more questions than answers. It appeared to be a suicide. And what about the stun gun discovered next to his body? Investigators believe a stun gun had been used on JonBenet.

DEMUTH: I remember that -- that he had footwear that was consistent with the footprint evidence. He had a stun gun. He had reportedly made statements to a friend, very similar to the types of statements that we're hearing about today in the press with the arrest of John Karr.

KAYE (voice-over): Plus, a baseball cap with the letters SBTC was found near Helgoth's body, the same letters found in the ransom note at the Ramsey home. DeMuth says, he believes Helgoth's DNA was tested and didn't match up.

Hundreds of interviews later, still an open case -- will John Mark Karr close it, or just add himself to the list of names that never panned out?

Randi Kaye, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: And you can catch more of Randi Kaye's reporting on "ANDERSON COOPER 360," weeknights, 10:00 Eastern, only on CNN.

Who says the little guy can't reach the big guy? Today is Rockey's day in the nation's capital, and not Rocky Balboa of "Yo, Adrian" fame. This Rockey wanted a one-on-one with George W. Bush, and he got it. You will hear from him straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Chalk one up for the little guy. A Louisiana -- a Louisiana man who barely survived Hurricane Katrina set off for Washington with a few friends and a strong symbol in tow. Armed with Cajun food and a message for George W. Bush, Rockey Vaccarella had a mission: sit down with the president.

And guess what? Mission accomplished.

(BEGIN VIDEO CLIP)

ROCKEY VACCARELLA, HURRICANE KATRINA SURVIVOR: And my mission was very simple. I wanted to thank President Bush for the millions of FEMA trailers that were brought down there. They gave roofs over people's head. People had the chance to have baths, air conditioning. We have TV. We have toiletry. We have things, necessities, that we can live upon.

But now I wanted to remind the president that the job's not done, and he knows that. And I just don't want the government and President Bush to forget about us.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He caught my attention because he decided to come up to Washington, D.C., and make it clear to me and others here in the government that -- that there's some people down there still hurting in south Louisiana and along the Gulf Coast.

And Rock is a plainspoken guy. He's a -- he's the kind of fellow I feel comfortable talking to. I told him that I understand that there's people down there that still need help. And I told him the federal government will work with the state and local authorities to get the help to them as quickly as possible.

R. VACCARELLA: That's right.

(END VIDEO CLIP)

PHILLIPS: Well, earlier, we hooked up with Rockey in D.C., with his family back home. We learned what makes this unlikely activist tick from the people who know him best.

(BEGIN VIDEOTAPE)

CAROLYN VACCARELLA, HURRICANE KATRINA SURVIVOR: This is home, again. This is where I want to be. And, if we're threatened with another hurricane, we'll just pack up, load up, and we're going to evacuate. And Rockey and Luke are coming this time, no ands, ifs, or buts about it.

(LAUGHTER)

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Kyra, I have to tell you that Carolyn evacuated to Panama City. She said she begged her husband and her son to leave with her. They didn't.

You didn't know where they were for a while.

But this is what you see, Kyra. You see some people who say: This is it. I'm moving out. I'm not going to stay.

And you see others who have waited for a FEMA trailer, have found one, and are actually rebuilding -- Kyra.

PHILLIPS: Well, Susan, Carolyn, and Luke, stay with us.

Rockey, I know you're patched in. You heard this whole conversation. Why didn't you listen to your wife when she begged you not to leave? R. VACCARELLA: Well, you know, I -- I rode my bike on that -- I was born and raised right there for 41 years. I rode my bike on that levee. I fished off the levee. I thought the levee was the Great Wall of China.

And you know what? We were under the impression that, as long as we were inside the levee protection system, that we were going to safe.

Now, the hurricane came through with some powerful winds. It didn't knock down our homes. Our homes are built very sturdy. What happened was, the levee broke, somehow. And I have my own opinion about that. And the water actually came in and filled it up with 20 feet.

So, you know, we don't live by, if it could, if it should, if it would. You know, that is our home. When we want to go on vacation, and we're ready to come back home, we go back to Saint Bernard.

We could get hit with another hurricane this year; you're right. But you know what? We might not get hit in that area ever again. So, we're born and raised right there. We're not going anywhere.

PHILLIPS: Carolyn...

VACCARELLA: I...

PHILLIPS: Carolyn, your husband is strong-headed. Do you ever get into it with him? Do you ever disagree with him?

C. VACCARELLA: Yes, we do. And I disagree a lot with him.

(LAUGHTER)

C. VACCARELLA: But, yes.

PHILLIPS: Well, what do you think about what...

C. Vaccarella: That's...

PHILLIPS: ... he's doing and -- and -- and what he had to say...

C. VACCARELLA: This is -- it is -- this is great. It is wonderful. And I'm very, very proud of him.

PHILLIPS: And, Susan, you have lived in this city for years. You have never wanted to leave this city, even during Katrina. When you sit down with families, like Rockey and Carolyn and -- and Luke, you think this is the norm? Or is this a unique family?

ROESGEN: I think it's more or less the norm.

Oh, something just fell off the wall, Kyra.

(LAUGHTER)

ROESGEN: It was like the lighter, the butane lighter for the little small stove...

(CROSSTALK)

PHILLIPS: Yes, Rockey, see? I'm -- I'm -- I don't think these FEMA trailers are everything you've -- they're cracked up to be now, Rockey.

(LAUGHTER)

ROESGEN: Yes. Rockey has got to get back here and fix them.

(LAUGHTER)

PHILLIPS: I'm sorry, Susan.

ROESGEN: You -- you know, Kyra...

PHILLIPS: Go ahead.

ROESGEN: No, I -- I admire Carolyn. I admire Rockey.

I live in a house that was in the 20 percent of New Orleans that did not flood. So, I don't know what it would be like for me personally to wake up every day in unfamiliar -- unfamiliar surroundings, not with the things that I was used to. I don't know what it would be like to see my house under 12 feet of water. So, I admire people like this.

And if there's anybody that's going to repopulate this area, it's the people like Carolyn and Rockey and their son, Luke, because other folks don't have the heart for it anymore. And that's sad to see, but I'm afraid it's the reality here, Kyra.

PHILLIPS: Carolyn, it does come down to the strength of all of you as a family, and -- and the passion you have for this city, and not wanting to go, right?

C. VACCARELLA: That's correct.

PHILLIPS: So, how do you...

C. VACCARELLA: That's correct.

PHILLIPS: How do you keep it? How do you keep that alive, considering the circumstances? It's amazing that you sit in the trailer and say, look, this is -- this is what we have been handed. It's all right.

C. VACCARELLA: This -- well, this is it. This is what -- you know, this is what we do.

You know, my -- you know, we -- I work for the Saint Bernard Parish School Board. I'm a 4-year-old pre-K assistant there. And, you know, that is part of the reason why I wanted to come back. I wanted to be back here. When I heard that Saint Bernard was opening up the schools, I'm like, I have to go home. I -- I need to come home. This is where I need to be. This is where I want to be. This is home.

PHILLIPS: Rockey, I understand you've got some...

(CROSSTALK)

PHILLIPS: Yes, go ahead, Susie.

ROESGEN: I was going to say, Kyra, I think we should -- we should never forget that a lot of people who want to come home can't come home. You have two business people. Rockey has the restaurant business here in Saint Bernard Parish -- Carolyn, again, working for the Saint Bernard Parish School Board.

People who had the means to come home are home.

Many people simply didn't have the money at all. New Orleans is a very poor city. And a lot of people in New Orleans itself won't possibly ever be able to come home, because they just don't have any way to -- to make it happen.

PHILLIPS: That's a point well made, Rockey. And did you talk with the president about that? I mean, it is very much a divided city, economically. We saw what happened when Katrina hit, and we're seeing who's able to survive in -- in New Orleans now, and who can't come back, just like Susan said.

R. VACCARELLA: Well, that was the thing I addressed with the president. And, you know, my main focus was, you know, Mr. Bush, I wish that the money that's allocated down South to rebuild our area and rebuild the neighborhoods where people can come back that was totally devastated, that the money actually gets into the people's hands.

And that's what I say, again, him and Chairman Powell, and they're going to be looking at all the money going down South with a fine-tooth comb. And they're going to be scrutinizing it. I think this is going to be going down in history as the government watching money so close.

PHILLIPS: As we wrap it up, Rockey, you want to tell your wife and son what you're bringing back from the White House?

R. VACCARELLA: Hey. Hey, honey, I got you a bookmarker and some pen.

(LAUGHTER)

R. VACCARELLA: And, Luke, I got you some ties and stuff.

(LAUGHTER)

R. VACCARELLA: I got my granddaughter Alex (ph) great stuff. I have met with Condoleezza Rice, President Bush. C. VACCARELLA: Wow.

R. VACCARELLA: And it was really a -- a great thing. But I would like to say to that little guy I see sitting next to my wife right there -- he's nice and quiet.

(LAUGHTER)

R. VACCARELLA: He ain't saying nothing.

I was there to protect him, and he became the protector of me. He went out the window, grabbed me by the arm, and pulled me on the roof. So, I thank him for saving my life.

PHILLIPS: Well, Rockey, he's not saying anything, because he isn't miked up. Unfortunately, we were short a mike. But, believe me, I know your son would speak up if he could. And I know he's a complete hero for what he did for your family.

Rockey, Carolyn, Luke, Susan, all of you, thank you so much. What a wonderful segment.

R. VACCARELLA: Hey, thank you.

PHILLIPS: Appreciate it.

(END VIDEOTAPE)

PHILLIPS: Well, the Vaccarella family, like thousands of their neighbors along the Gulf Coast, lost everything they had in that hurricane. But you see their determination.

Well, if you want to share your experiences dealing with the aftermath of Katrina, go to CNN.com and send us an I-Report. CNN would like to see your videos or photos and hear your stories. Just send it to us, via computer, at CNN.com. Or, on your cell phone, punch IReport@CNN.com. Your I-Report is your chance to share what you have witnessed this -- witnessed. And we can put it on the air.

No more Cruises in the Redstone arsenal. And I don't mean missiles. It's Tom Cruise and Sumner Redstone's "star"-senal at Paramount Pictures. Just who fired whom? We're going to launch into that topic coming up next.

(COMMERCIAL BREAK)

PHILLIPS: Well, read up or stay home, a tough lesson in Texas, where the school year starts with hundreds of empty seats. It seems 500 kids in Lancaster, just south of Dallas, failed to complete a summer reading assignment. And the superintendent there has a policy: You don't read the books, you don't come to class.

(BEGIN VIDEO CLIP)

LARRY LEWIS, SUPERINTENDENT, LANCASTER INDEPENDENT SCHOOL DISTRICT: Homework is important. And, so, we're letting them know, education doesn't stop when you leave the schoolhouse door, and just pick up again the next morning. It's 24/7, 365, in this school district, if we're going to make you the global competitor.

(END VIDEO CLIP)

PHILLIPS: Well, Lewis says the suspended students will be allowed back when they finish their assignments.

Minimum wage has become a hot-button political issue in this election year. And now one state is weighing in with its own solution.

Susan Lisovicz live from the New York Stock Exchange with that -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Kyra.

It's your home state, the most populous state in the union, California -- lawmakers there reaching a deal with Governor Arnold Schwarzenegger to raise the state minimum wage to the highest level in the country. The new law would hike the minimum wage by $1.25 over the next year-and-a-half to $8 an hour -- the bill a compromise between Schwarzenegger, who had vetoed previous minimum wage bills, and the Democrat-led California legislature.

The governor agreed to 25 cents more than he had originally offered, in exchange for Democrats dropping demands that the minimum wage automatically adjust upward with inflation changes.

But business groups, not surprisingly, are opposed to the bill, saying that business owners are in the best position to decide their workers' wages -- Kyra.

PHILLIPS: So, it seems to be just the latest example of Schwarzenegger moving to the left on an important issue.

LISOVICZ: That's right -- probably no coincidence either, Kyra, that the governor is running for reelection this year against a pro- union Democrat -- California, traditionally a blue state -- Schwarzenegger trying to improve his standing with Democrats and independent voters, who turned against him in a controversial special election he called last year.

He also signed a bill this week that aims to make California one of the world's biggest producers of solar energy. And he's in talks with lawmakers on a bill to cap industrial emissions of greenhouse gases.

So, it will be interesting to see how all these issues play out with the voters in just a few months -- Kyra.

PHILLIPS: We will be watching him.

Now, have stocks recovered any ground on Wall Street?

LISOVICZ: Nope -- investors still voting with their feet. They're running out the door, it seems. Some of them never even came to work today, perhaps because volume is light, for a third day this week.

That is despite, by the way, a drop of nearly $1.50 today in oil prices. We're still seeing a sell-off -- Dow industrials right now down 58 points, or half-a-percent. The Nasdaq is off 19 points, or about 1 percent.

And that is the latest from Wall Street. I will be back in about half-an-hour with a roundup of the trading day -- in the meantime, Kyra, back to you.

PHILLIPS: All right, see you in a little bit, Susan.

Well, it's picking up steam in the Atlantic, not yet close to the U.S., but swirling this way -- coming up, a closer look at the fourth named storm of the season.

Plus: bitter enemies, each with the other in the crosshairs. Israelis feel -- fear that Iranian missiles are pointed at them, and vice versa. We will report from Jerusalem.

(COMMERCIAL BREAK)

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