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Anderson Cooper 360 Degrees

Crisis in the Middle East: Day 21; Baalbeck Raid; Trapped in Lebanon; Inside Hezbollah; Castro's Condition; Who is Raul Castro?; Iraq Violence; Iraq: On the Brink; War and the Mind; Collecting Katyushas

Aired August 01, 2006 - 23:00   ET

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

ANDERSON COOPER, CNN ANCHOR: Welcome back to our continuing coverage of operations here. Morning in Israel. We are along the Israel/Lebanon border.
Reports of a daring commando raid in the north of Lebanon, very close to the Syrian border. A snatch and grab operation. Israeli Defense Forces saying they have seized several Hezbollah militants and brought them back here to Israel.

ANNOUNCER: All-out attack. From the air and the ground. Israel drives even deeper into Lebanon, expanding its offensive with thousands more troops crossing the border to battle Hezbollah. Tonight, the latest on the crisis in the Mideast.

Battle mind. From the combat zone...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My brain swelled up twice the size of a normal brain.

(END VIDEO CLIP)

ANNOUNCER: ... to coming home. 360 M.D. Dr. Sanjay Gupta reports on extraordinary new findings. What war does to the brain.

And Cuban crisis. With Fidel's fate unknown, Castro's brother takes control. Is this the break Washington was waiting for? Maybe not. A profile of the mysterious Raul Castro.

This is a special edition of ANDERSON COOPER 360, "Crisis in the Middle East: Day 21." Reporting tonight from northern Israel, here's Anderson Cooper.

COOPER: And good morning from the Israel/Lebanon border. It is a morning of lots of activity. It is just 6:00 a.m. here. The sun has just come up. The Israeli artillery units behind me have been relatively quiet this evening.

But the action inside Lebanon has been fast and furious. There is fighting in the south of Lebanon to talk about. Three Israeli soldiers and more than 25 Israeli soldiers are wounded, three Israeli soldiers killed in the last 24 hours. But in the last several minutes we have learned the results of ongoing operation in Baalbeck in the north of Lebanon. A commando raid, a daring commando raid, several militants seized from a hospital, brought here to Israel, according to the Israeli Defense Forces.

We are now just getting a report as well from Reuters. Also based on Lebanese military sources, saying that 15, what they say are civilians, have been killed in Israeli air strike in the town of Baalbeck. We are trying to gather the information as we get it and bring it to you.

Joining me right now, John Roberts is elsewhere along this border here, on the Israeli side of the border, and CNN's Michael Ware is in Beirut.

Let's start with Michael Ware.

Michael, at this point, what do we know and what don't we know about what's happening very close to the Syrian border in the Bekaa Valley?

MICHAEL WARE, CNN CORRESPONDENT: Well, Anderson, what we've seen overnight here in Lebanon is a daring addition to the Israeli Defense Forces' campaign against Hezbollah.

Airborne troops were dispatched more than 60 miles north of the Israeli border to strike deep into the heart of Hezbollah domain in the Bekaa Valley.

In the town of Baalbeck they struck a hospital operated by Hezbollah where there was what's said to be by Lebanese security forces some fighting. The Israeli troops entered the hospital, checking the identification papers of all the staff, the medical teams, and the patients. What we're now hearing out of Israel is that that group of Israeli troops have now been extracted from this snatch and grab operation and have returned to Israel without casualty.

However, we're being told that they did take with them Hezbollah prisoners. Reports conflict as to who these prisoners are and the nature of them. Some say they're low ranking, some are suggesting otherwise.

As Beirut is now waking up to this news, we can only hope to learn more in the coming hours -- Anderson.

COOPER: And as Michael Ware knows from all the coverage he has done in Iraq, often these early reports are conflicting and often don't bear out over the long term. So we're being very cautious in what we're actually trying to say and what we actually know.

So far the Israeli Defense Forces have told us that they have taken some militants and brought them back here. Again, there's a lot we don't know at this hour.

Let's check in with John Roberts who has been really for the last 24 hours or so moving all along the Israel/Lebanon border, watching growing military activity along that border.

John, what's happening now?

JOHN ROBERTS, CNN CORRESPONDENT: Well, on the Baalbeck front, Anderson, I just spoke with officials from the Israeli Defense Forces who say that they are not going to release the names of the militants that they quote, "arrested," until a little bit later on today. But it would seem clear that by engaging in this operation, what they're looking for are bargaining chips.

So far the only bargaining chips they have are the bodies of some six Hezbollah guerillas who were brought back to Israel from the fighting in Bint Jbeil.

And while Israel has negotiated for the release of bodies, that's not the high quality bargaining chip that they would be looking for in order to try to engage in some negotiation with Hezbollah.

It would seem as well that the Israelis would not have launched such a daring raid, deep into Lebanese territory unless they were after some fairly high-value targets. So we're looking toward the time that we get the names of those Hezbollah officials and also what value they may be to the Israelis as they try to find a way out of this crisis that leaves Hezbollah dramatically weakened from the way that it was before.

We spent all day along the border today traveling between Metullah at the very tip of the Galilee Peninsula, to an area about 15 miles to the east of the Mediterranean Sea. A lot of heavy fighting going on in a number of different areas, a number of towns and villages on the Lebanese side of the border. And growing evidence that Israel is about to launch a major ground campaign, a major expansion of their ground campaign into southern Lebanon.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): From a hilltop right on the Lebanese border we watched the Israeli military pound positions in a town they say is a Hezbollah base. It is just two miles from where two Israeli soldiers were kidnapped July 12, the incident that touched off this war.

(On camera): This is where the heaviest of the fighting is right now. This is Aita al-Shaab. You can see that the Israeli Air Force dropped what appears to be a 500-pound bomb on this village. It has been shelled all day and there is heavy fighting in the city streets. The Israeli army is in there with a lot of ground forces. There is close quarters fighting. Very, very heavy combat.

(Voice-over): The battle has been costly for the Israeli military. Three soldiers killed so far, 25 wounded. Israel claims it killed at least 20 Hezbollah fighters in southern Lebanon in the past 48 hours.

We stay on the hilltop watching the battle until soldiers arrive and tell us there are snipers in the village and it is far too dangerous to be here.

We move to another location along the border route pock marked with Katyusha rocket hits and evidence that Hezbollah mortar rounds found vehicles they were looking for.

On the road to an Israeli military outpost we see a powerful Merkava tank being towed back from the battle in Aita al-Shaab, still smoking from a direct hit by a high explosive Hezbollah round.

And the fighting is only expected to intensify. As diplomats seek a way to end the hostilities, Israel is expanding its ground campaign, now intent on pushing Hezbollah 14 miles north to Lebanon's Litani River, determined to hold onto a broad safe zone until an international force can arrive.

UNIDENTIFIED MALE (through translator): We are at the beginning of a diplomatic process which, I believe, ultimately will lead to a cease-fire with totally different conditions and circumstances from those which existed on our northern border.

ROBERTS: To ensure those conditions are different, the Israeli army is moving more heavy armor up to the front.

(On camera): This is just one of many areas in northern Israel where the Israeli army is staging for what increasingly appears to be a major ground operation. And sources tell us that all the way along the border, from Metullah, almost all the way to the Mediterranean Sea, there are scenes similar to this as tanks and armor are brought to the front line in preparation to go over the border into southern Lebanon.

(Voice-over): Despite the deaths in Aita al-Shaab, among the troops morale is high. As dusk settles in, a young tank commander gives a salute of bravado, preparing to head into battle. Farther up the border, infantry forces put on black camouflage makeup and gear up for what will be an intense fight on the battlefield. The end of this day, only just the beginning of a long night ahead.

(END VIDEOTAPE)

COOPER: And John Roberts is joined now also by Michael Ware in Beirut and also CNN's White House Correspondent Ed Henry in Washington.

John, fascinating scene, all those troop movements over the last 24 hours along the border. Do we know what the target is? Is it the Litani River? Because there had been several days ago a statement from one Israeli official who was saying maybe they just wanted to create a buffer zone some mile and a quarter above the border. That would be far short, of course, of the Litani.

ROBERTS (on camera): Yes, I tell you, there was a lot of disagreement between the army generals and the politicians over how wide that security zone should be. The original plans that the army had were all the way back to the Litani River, which is about 20 kilometers, about 14 miles or so. The politicians didn't seem to have the stomach for that and wanted it much narrower, that 1.2 to 1.5 miles. But now it seems that after Israeli public opinion was starting to come down on politicians saying, you can't risk losing this fight because the consequences are just too great, if the Israeli military comes out of this with anything but a solid victory, it's just going to embolden groups like Hezbollah, Islamic Jihad and Hamas to harass Israel even more.

So now it looks like they're going with that original plan. And an indication of that, Anderson, is that leaflets were dropped yesterday in Israel -- sorry, in Lebanon. More broadcasts on local Lebanese radio to say, telling these towns, people in towns and villages, go over the Litani River. Not just up to it, but go over it.

So it sounds, Anderson, like there is a plan to go that far, at least in some sectors in southern Lebanon.

COOPER: Ed Henry, monitoring the situation in Washington, how much time is Condoleezza Rice, is the U.S. government, giving Israel to pursue military objectives?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: At this point it appears to be giving Israel a relatively free hand. As you know, Secretary Rice today met with the Vice Premier Mr. Perez here in Washington, and then he went over to the White House for a meeting with the president's national security advisor.

And afterwards, I asked him whether he's feeling any pressure from the Bush administration to stop the bombing, stop the campaign, and he said no, point blank. And I think that that's a sign of something that is only going to feed some of the international criticism that perhaps the Bush administration has not put enough pressure on Israel.

As you know, Secretary Rice today said that she believes there will be a cease-fire within days not weeks. Again, contrary to that, Mr. Perez came out and said he thinks it will be weeks. So some contradiction there. And it appears that Israel is not necessarily being stopped by the administration -- Anderson.

COOPER: Michael Ware in Beirut, how capable is the Lebanese military of taking over Lebanese territory in south Lebanon and effectively disarming Hezbollah? Because a lot of the diplomatic efforts under way are contingent on and rely on the Lebanese military being the ones to actually disarm Hezbollah.

WARE: Anderson, there's absolutely no chance of that happening whatsoever. I mean, even if there were the will for that to happen, there simply isn't the means.

The Lebanese army is quite pragmatic. Its own generals, its own analysts make it very, very clear that they couldn't hope to be able to do that. They don't have the forces nor the force structure nor the training nor capability to fill the vacuum in southern Lebanon, certainly not effectively, and certainly not in terms of defending sovereign Lebanese soil.

By the same means, they are in no position to be able to take Hezbollah on. I mean, if the Israeli armed forces, the most sophisticated in the region, are running into this kind of resistance, what hope does the Lebanese army have?

And we see that if the Israeli army intends to move more than a couple of miles into Lebanon, if they intend to hold terrain, if they intend to go as far as the Litani River, then that means, Anderson, this war is not over. All it means is it's going to move into another phase where we see Hezbollah attacking static Israeli positions and moving patrols within that domain --Anderson.

COOPER: Ed Henry in Washington, how quickly does Condoleezza Rice think she can get an international force after there's some sort of agreement on the ground, boots on the ground, in south Lebanon? Are they saying?

HENRY: Totally unclear. I mean, Secretary Rice is saying, first of all, that she thinks she can get a United Nations resolution through the security council as early as this week. With the French now saying that they don't think you can move ahead with a resolution, you can't even negotiate on it, until the actual fighting stops, until there's some sort of a cease-fire. And clearly Israel is not ready for a cease-fire. It's unclear that they can get the resolution done this week.

So that only pushes the timetable for getting an international peacekeeping force in. I think there's pressure, though, on the Bush administration, both internationally and now here domestically.

You had a Republican Senator Chuck Hagel yesterday go on the Senate floor and say it's time for the slaughter to end on both sides.

And so now the administration, which already was pressured on the international stage, is starting -- it's early, but they're starting to get some pressure from within its own party back here in Washington -- Anderson.

COOPER: And John Roberts, very briefly for any viewers who have just joining us, bring us up to date on this operation in the Bekaa Valley up north.

You've been talking to Israeli Defense Forces people. What are you hearing?

ROBERTS: Late last night, Israeli time, it'd be late afternoon in the United States, the Israeli Defense Force commandos, elite units, struck deep into the heart of Lebanon up into the Bekaa Valley, the very northern tip near the Syrian border in the town of Baalbeck.

They arrested a number of Hezbollah militants, probably in the number of about three or so. They also engaged with other Hezbollah militants. Don't know about the extent of casualties. But they brought at least three militants back here to Israel. And the reason would probably be twofold. Looking for something to negotiate with, looking for some bargaining chips, and also, Anderson, a slap in the face to Hezbollah and its claims of supremacy over Israeli forces if the IDF can say, look, we hit you right at your home base there in Baalbeck, we grabbed three of your guys and you brought them back, how effective a force are you?

COOPER: No doubt a morale boost for a lot of Israeli forces as they contemplate widening the ground action here just above us in south Lebanon.

John, thanks very much. Michael Ware in Beirut as well. And Ed Henry, covering events from Washington.

I want to take a look at the numbers of casualties that we know thus far on both sides of this border. Here's the raw data. Here's the numbers: 557 Lebanese have been killed in the last three weeks. Most of them civilians, say Lebanese authorities. Israel says 300 Hezbollah fighters have died, a number Hezbollah denied on Arab television; 54 Israelis have been killed, 19 of them civilians; 35 Israeli soldiers have died, including just three in the last 24 hours.

A lot more ahead. We'll talk more about that diplomatic efforts under way.

Also, civilians trapped in south Lebanon, trying to get out. Too scared to run, but too scared to remain where they are. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Those are some of the thousands of Lebanese civilians trying to flee the fighting, trying to move further north. Others though, however, refusing to leave their homes, too scared to make the journey, too scared to leave everything behind.

CNN's Brent Sadler has their story.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT (voice-over): The road to southern Lebanon and the war front is strewn with bomb craters. Some deep enough to swallow a small truck. Cars abandoned everywhere, hit by Israeli bombers streaking above.

As Israel plans its next military action, desperate Lebanese calculate the odds of helping their families, but not getting hit themselves. These people, all volunteers, plan to drop vital supplies in a village trapped by the fighting. This man knows it's a high risk.

UNIDENTIFIED MALE: I have my family over there. I have a lot of people over there, stay over there.

SADLER (on camera): Tell me what you're bringing, can you? Just show me what you're carrying on board here. So, rice. Aren't you afraid that the Israelis might think you are Hezbollah fighters?

UNIDENTIFIED MALE: I don't know. SADLER (voice-over): With what seems like a lull in air strikes, it's now or never.

An urgent call tells them to hurry.

(On camera): United Nations officials are saying that the Israelis have given a shell warning, which means an imminent expectation of some more strikes in this area.

(Voice-over): But soon there's word again of a temporary all- clear, and the journey resumes. It's impossible to assess how many mothers, fathers and children are trapped by the fighting. They are not at war with anyone and do not want to leave their homes.

In fact, this man comes from a Christian village further up the road. The people there don't support Hezbollah, he says, but they do resist the possibility of a new Israeli occupation.

MILAD EID, LEBANESE VILLAGER: We want our own land. If we go from here, maybe we'll not come back. Every day they say there's a solution, there is something good. But we don't think so.

SADLER: Moments later, more danger. The war shifting back again, near his village of Alma al-Shaab.

(On camera): That's the unnerving sound of outgoing Israeli cannon and artillery fire. Yet, amid all this noise, 150 Lebanese civilians refuse to leave this front line village.

UNIDENTIFIED MALE: It's dangerous. If I said it's not dangerous, I lie. But it's very hard to leave what you worked for all of your life.

SADLER (voice-over): The artillery now too close, the risk too high. The convoy of supplies will go no further.

Instead, the rice and other goods will be shared among Christians and Shia Muslims from nearby. All, so far, refusing to flee. All wondering if they can survive whatever comes next.

Brent Sadler, CNN, Alma al-Shaab, south Lebanon.

(END VIDEOTAPE)

COOPER: Well, of course, it is Hezbollah which has ruled south Lebanon, controlled that region, not the Lebanese government over the last several years.

My next guest, Jeffrey Goldberg, a writer for "The New Yorker," visited south Lebanon and got some extensive tours by Hezbollah of the areas under their control and of their television station.

He joins me now.

Jeffrey, thanks very much for being with us. You know, I reread your article from several years ago about south Lebanon. It is just a fascinating look at life under Hezbollah, and of the inner workings and the message of Hezbollah.

I think what's been lost in a lot of this coverage is just how anti-Semitic Hezbollah is in the rhetoric.

JEFFREY GOLDBERG, "THE NEW YORKER": Yes, it's absolutely fascinating, Anderson. The anti-Semitism -- there's two things that are fascinating, rather. One is how embedded in the core of Hezbollah ideology, anti-Semitism is. And I don't mean anti-Israel thinking or anti-Zionism. I mean frank anti-Semitism.

The other thing that's so interesting about it is how blunt they are and how frank they are about their anti-Semitism. They don't hide it. They don't try to mask it in any way. They state very openly to you when you ask their exact feelings about Jews, which are quite extreme.

COOPER: It's interesting because I talked to a representative news editor from al-Manar TV, and I asked him, you know, does Hezbollah still want to destroy the state of Israel? And I know Larry King has asked him that same question, and he rarely -- he basically doesn't answer that question. He sort of seems to avoid it. Which is so at odds because I mean Nasrallah himself is very point blank and matter of fact and open about his hatred of Jews.

GOLDBERG: Well, you know, al-Manar is an interesting place. They are slightly more schooled in let's say obfuscation or public relations. The leadership -- I mean, one of the things about Nasrallah that's so interesting is how straightforward he is. And you see that in all of his statements on Israel. And even his statements on America. There's no attempt to soften the language.

And the other thing about it that's so shocking, I think, when you first hear it -- is I always notice this -- and one of the first things I noticed, was the use of epidemiological metaphors to describe the role of Jews in the world. Not just Israel, but Jews. Talking about Jews as a cancer, talking about Jews as a parasite on society. And they generally are very forward about this.

Al-Manar is slightly different. I think they think they're trying to play to a slightly more sophisticated audience. I'm not sure what that is.

COOPER: Does their hatred of Jews extend -- I mean, is it equal hatred of the United States?

GOLDBERG: Are you asking do they hate the U.S. as much as they hate the Jews?

COOPER: Yes.

GOLDBERG: Yes, the -- I would say so. You know, one of the interesting things that -- one of the interesting shifts in Shiite, radical Shiites thinking about Israel and America and their relationship is that, in the early part of the Iranian revolution, in the early '80s -- and remember, of course, Hezbollah is functionally an arm of the Iranian regime. America was seen as the great Satan. And Israel is seen as the little Satan. Israel was seen as a project or one arm of the American experiment.

But today, in some of the language you hear a shift, where Nasrallah has adopted a kind of, let's say, antiquated fascist ideas about Jews that the Jews are in fact in control of everything. That the Jews are even in control of America. And that Jews and Israel are the great Satan, and that America is kind of an adjunct of that great Satan.

COOPER: It's fascinating and important, I think, to focus on this. It's easy to kind of gloss over the realities of what Hezbollah is saying in all the coverage. And Jeffrey, appreciate you joining us today. The article that you wrote in The New Yorker," again, I reread it and I urge anyone out there to read it. It's from a few years ago, but it's just a fascinating look at life under Hezbollah in south Lebanon.

Jeffrey Goldberg, appreciate it. Thanks very much. We'd love to have you back on the program.

When we come back, we're going to have a lot more from this region.

And also we are following developments out of Cuba. The latest on the health of Fidel Castro. Stay tuned.

(COMMERCIAL BREAK)

COOPER: This is some of the reaction we have seen in the Little Havana neighborhood of Miami to the news of Fidel Castro's surgery, that he's handing over power.

He's ruled Cuba now for nearly 50 years. No longer. He has officially handed power over to Raul Castro. How long that handover is for, nobody knows exactly what his condition is. Nobody knows.

Let's check in for what we're hearing from Cuban state-run television in Havana right now with CNN producer Chasta Darlington.

Shasta, what's the Cuban government saying about Castro's condition?

SHASTA DARLINGTON, CNN HAVANA BUREAU PRODUCER: After almost a full day of silence, without any new news, a new statement by Fidel Castro was read on national television.

In it, he sent a message to the Cuban people, saying he was in stable condition following intestinal surgery, and telling them he was feeling just fine.

It's been an unusual day for Cubans, who woke up without Fidel Castro in power for the first time in almost 50 years, as you said.

But they tried to go about their business as usual. Show that this is just a one day like any other. As they try to avoid panic, try to avoid blowing things out of proportion without really understanding what's going on. Still, there is concern about what's coming up. They haven't seen either Fidel Castro or Raul Castro in person. And that's something I think Cubans would feel reassured by -- Anderson.

COOPER: It's interesting that Raul Castro hasn't come forward and made some sort of public statement or at least shown himself, that both of the Castro brothers have been out of sight, certainly not out of mind.

Shasta Darlington, appreciate that report.

We asked CNN's Randi Kaye to take a look at what we know about Raul Castro. Certainly a lot less than we know about Fidel Castro. But here's what we do know.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): He has always been in Fidel Castro's shadow. His younger brother, his number two, his potential successor. Once he talked about a post-Fidel Cuba.

RAUL CASTRO, FIDEL CASTRO'S BROTHER (through translator): Is there going to be a transition here towards something? Yes. Towards a better form of socialism. And there's something you will like, towards a more democratic society.

KAYE: Precisely what he means by the words democratic society is still unclear, and a key question now. But what is clear is that Raul Castro has been in charge of Cuba's army for more than four decades. And his reputation is not exactly pristine.

UNIDENTIFIED MALE: Many people believe he is ruthless. There is a sense that either he is ruthless, or that his brother has used him as the -- sort of the government's hatchet man.

For whatever reason he has a reputation as being far more willing to crack down on opponents, on critics, especially within the system.

KAYE: But after the collapse of the Soviet Union, it was Raul who insisted on the creation of at least some free enterprise markets. Beans, he said, are more important than bullets.

If he in fact takes charge in Cuba, some experts believe the transition will be a difficult one.

JAMIE SUCHLICKI, UNIVERSITY OF MIAMI: Succession will be very fast and easy. And then a long period of transition, which will be complex and difficult.

KAYE: Raul himself once admitted that taking over from his brother will be difficult.

CASTRO (through translator): No one will ever again have as much authority as Fidel Castro has had. Because of who he is, because he made a true revolution. KAYE: Some experts on Cuba believe there will be a period of political struggle, possibly violence, prompting Cuba's army and secret police to be deployed on city streets after the death of Fidel.

But the truth is, of course, no one knows for certain. What is certain is that Raul Castro, for decades practically unknown outside his native island, will take center stage in one of the world's most watched nations.

(END VIDEOTAPE)

COOPER: Randi, so we know what they're like politically, how they're different. What are they like personally, how do they differ?

KAYE (on camera): They're different as well personally, Anderson. Fidel is divorced. Raul has been married 50 years to his wife, who happens to be a senior party official. The couple has four children together. Of course, Fidel, famous for his fiery speeches, is very charismatic. Raul lacks that same charisma. Fidel is also said to be more formal than his younger brother. Raul is apparently more down to earth. A real partygoer who likes to drink and even crack jokes.

So both politically and personally, Anderson, there are some very glaring differences.

COOPER: All right. Randi Kaye, appreciate it.

No doubt we'll be hearing more about Raul Castro in the coming days and weeks as Fidel Castro's situation becomes clearer.

When we come back, we're going to have a lot more from here in the Middle East.

But we're also going to look at what is going on in Iraq. In particular, how your taxpayer dollars, your money, is being wasted. Millions of dollars wasted on projects which are over budget. And how some in the government are trying to hide the costs in an elaborate shell game. Stay tuned.

(COMMERCIAL BREAK)

COOPER: We want to talk a little bit about what has been going on in Iraq, lest we forget. A reality check. Two car bombs Tuesday in Iraq. In total in all killings, more than 35 people. Many more injured in a number of attacks throughout the country. Of course, the kidnappings there continue.

A new report by the U.S., though, is focusing attention on problems with funding. In particular, reconstruction costs and some budget overruns. And not just budget overruns, which sounds very clinical, but basically attempts by one agency of the U.S. government to hide costs and to hide the real cost of reconstruction in Iraq.

CNN's Joe Johns tonight, "Keeping them Honest."

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): The road to a huge construction project in Iraq is paved with good intentions. Or at least that's how the new Basra Children's Hospital got started. Take the first lady. Laura bush was a big promoter. Or, Secretary of State Condoleezza Rice, also on the bandwagon big-time.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: This hospital will provide critical care to Iraqi children.

JOHNS: But now the project has been plagued with so many problems, it's now being held up as a prime example, not of what's right, but what's wrong with the U.S.-led reconstruction effort in Iraq.

SEN. PARICK LEAHY (D), VERMONT: It's really a cockamamie idea. They need basic health throughout Iraq. So much has been destroyed. I mean just sort of the basic day-to-day health care. We ought to be spending the money on that.

JOHNS: A scathing new inspector general's report slams the U.S. Agency for International Development, which is in charge of the taxpayer money going into the project. The report says the project was supposed to cost $50 million. Now it could cost taxpayers more than double that. It's also way overdue. It's gotten so bad, the government says it told the main contractor on the job, Bechtel, to stop working and put the Army Corps of Engineers in charge.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: The decision was taken to turn over responsibility for completion of the hospital, to which we are dedicated to the Army Corps of Engineers.

JOHNS: Bechtel isn't exactly taking this lying down. Bechtel says once the hospital was supposed to have 200 beds. Then it was reduced to 50 beds. Then it was increased to 100 beds. You get the picture. People kept changing their minds.

But supporters say the troubles are obscuring the fact that southern Iraq really needs the hospital. And that besides taxpayers, huge American companies and interest groups are kicking in millions, despite the obstacles. Hope International is leading the way.

Americans might get the idea that this project is a mess right now. Is it?

DR. JAMES PEAKE, HOPE INTERNATIONAL: I do not think it's a mess. I think it is behind schedule in terms of the originally predicted schedule, which I personally thought was aggressive. Well, this is not a little bit, this is a lot behind schedule. But it doesn't mean it can't be made up.

JOHNS (on camera): Still, the project's chief critic in the Congress says, as far as he's concerned, it may be time to pull the plug.

Should they abandon the project? LEAHY: At this point, I don't see why the project should continue. If there's a peaceful Iraq, fine. Then let them build it if they really think they want it.

JOHNS: Tomorrow, a Senate committee looks at what happened to all the good intentions behind the effort to rebuild Iraq.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: What happened indeed.

Joining me now is Thomas Ricks. He's a "Washington Post" senior Pentagon reporter. He's also the author of the new book, "Fiasco: The American Military Adventure in Iraq."

Thomas, thanks very much for being with us. You know, you hear these reports of cost overruns, of essentially shell games being played. How much money do you think has been wasted in Iraq?

THOMAS RICKS, AUTHOR, "FIASCO": I think a lot of money's been wasted in Iraq. But remember, most of it has been wasted legally.

We spend $1.5 billion there a week. That's $200 million a day. That's more in one day, every day, seven days a week, than was wasted apparently in this Basra hospital project.

So I think the entire posture in Iraq, from what I'm hearing from officers in the field, could be changed radically in order to be more productive and more efficient, and ultimately even might salvage the situation in Iraq politically.

COOPER: Is there accountability on the ground? I mean, from the officers you talked to. I mean, is anyone watching over how this money's being spent, where it's all going?

RICKS: No, in fact, I think that's one of the characteristics of this war, is lack of accountability. You have a military that generally has not wanted to look at its own leadership problems. They have a great lessons learned process in the army, but it stops at the colonel level. They don't want to look at the flaws of generals.

This is the first war this country has fought in which not a single general's been relieved.

COOPER: Do you think there is a civil war now going on in Iraq? I mean, it's a politically charged question. People in the administration sort of quibble about the definition of a civil war. What do you think? I mean, the kind of violence we're seeing that the level of -- I mean, it's not just kidnappings, it's people, you know, drilling holes into other people's heads with chainsaws and electric screwdrivers. I mean, what do you think is going on on the ground?

RICKS: I think there's definitely a low level civil war going on. I think one of the problems is the American military spends a lot of its time, like American officials do, behind high blast walls, inside enclaves like the green zone, or forward operating bases.

One of the things I noticed on my last trip to Baghdad in January and February was that U.S. databases on significant acts don't seem to pick up on a lot of events that affect Iraqis. They get everything that threatens American troops and they get everything that kills Iraqis. But that leaves out stuff like rape, robbery, intimidation, and a general political atmosphere of violence.

COOPER: I want to read something from your book. You said in the book, the invasion in Iraq, quote, "was based on perhaps the worst war plan in American history." The Pentagon has obviously been very critical of your book, as you've been critical of them. They say you're essentially cherry picking material and that you've ignored successes in Iraq. Do you think there has been progress in Iraq? I mean, they point to the elections. Several elections held, you know, free Democratic elections.

RICKS: I think the people who look at progress and see progress there tend to look at process, like elections. They don't look at output, which is things like security.

As for cherry picking, no. I mean, this book is not a book of my opinions. This is a book based on hundreds of interviews, including more than 100 with senior officers, and about 37,000 pages of documents on the war. There's a huge amount of information available. There's a huge amount of information available and I tried to pull it together and explain in this book what happened in Iraq, how it happened, and why it happened. But it's not a book about me and my opinions. In fact, I don't appear in it.

COOPER: Thomas Ricks, we appreciate you appearing on the program. The book is "Fiasco." It's getting a lot of attention.

Thanks very much for your perspective.

RICKS: Thank you.

COOPER: When we come back, we'll talk to Dr. Sanjay Gupta about some new medical developments.

We'll also have a lot more from here in the Middle East. In particular, the latest on that commando raid in the Bekaa Valley and what we know about the Hezbollah militants who Israeli Defense Forces say have been seized and brought back here to Israel.

We'll be right back.

(COMMERCIAL BREAK)

COOPER: U.S. troops fighting on the ground in Iraq. as Israeli forces continue to fight here all along the Lebanese border and even points farther north, deep inside Lebanon.

A new report in the Journal of the American Medical Association takes a look at the impact that combat has on the mental health of troops. CNN's Sanjay Gupta takes a look.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice over): For thousands of young soldiers, this is their first taste of war.

JOSHUA HEPPEL, OPERATION IRAQI FREEDOM VETERAN: It's culture shock. It's all kinds of shocks just rolled into one. You have no clue what to expect whatsoever.

GUPTA: Physical shock and mental shock. Joshua Heppel was 22 when he first set foot in Iraq.

HEPPEL: Getting up in the morning, yes you had a heightened sense of awareness. When you went to bed at night, you did as well. In the middle of your sleep -- nobody slept a deep sleep out there.

GUPTA: Sure, you can have the very best in protective gear, new body armor, helmets, the very best technology. Physically, safer than ever before.

But now researchers are gauging something long considered immeasurable. In a study of nearly 1,000 soldiers returning from combat in Iraq...

JENNIFER VASTERLING: They reported themselves to be a little bit less crisp cognitively. So when any of us are confronted with life- threatening type of situations, our body goes into action. And there's a lot of physiological changes that all happen concurrently, including changes in the brain chemistry that help us prepare to take action and preserve our lives.

GUPTA: Changes in brain chemistry that give soldiers quicker reaction time. And that might just have saved Joshua's life in Iraq. But those changes don't come for free.

What researchers found was somewhat surprising. Most soldiers, even those not suffering from severe post-traumatic stress syndrome, had more trouble learning and remembering information. Also, more trouble focusing their attention over extended periods of time.

And that heightened level of awareness meant soldiers are more tense and often have trouble relaxing.

VASTERLING: Misplacing things, forgetting appointments, having trouble remembering a grocery list, for example. What it suggests is that there's some carryover effect from the war zone in this biological survival response back to the home front.

GUPTA: Researchers aren't sure yet whether these symptoms are just a lower level of PTSD or something completely different. But for many soldiers, it's a fact of life in coming home.

HEPPEL: Well, everybody has a small case of PTSD coming back. Just, you know, being able to sleep without having stuff explode in the background or anything like that. Whatever PTSD I might have is very regressed.

GUPTA: All of this appears to take place in specific areas of the brain known as the limbic system that regulates memory and emotion and forms a sort of battle mind.

HEPPEL: You're in a combat zone for so long. I know when I came back I was a little more volatile than normal. But you know, over time, that's going to gradually dissipate. Well, there's always been a saying that's gone along for a long time, that time heals.

GUPTA: Yes, time heals. Both body and mind. But it's not clear to researchers yet just how completely.

Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE) COOPER: Well, when we come back, the impact all of this fighting here along the border is having on the mental health of kids here in northern Israel. In particular, a new hobby some kids here have, collecting Katyusha rockets.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's kind of cool that you have all these remainings of the Katyushas, like evidence to what's happening that you can show your friends afterwards, from different parts of the country.

(END VIDEO CLIP)

COOPER: A sign of the war here in children's lives. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Well, on Sunday in the town of Kiryat Shemona in northern Israel, about 100 Katyusha rockets and mortars fell in and around this one town, about 140 all across northern Israel. The last two days there have been a dramatic reduction in the number of incoming projectiles.

But what we've been noticing is a number of kids who are actually are trying to pick up the pieces of Katyusha rockets. It turns out it is a new hobby here for them in northern Israel.

(BEGIN VIDEOTAPE)

COOPER (voice-over): 15-year-old Israel Silverberg and his two sisters, 11-year-old Miriam (ph) and 17-year-old Elisheva, have a new hobby. They collect the Katyusha rockets that now terrorize their towns.

ISRAEL SILVERBERG, COLLECTS KATYUSHAS: These are the wings.

COOPER: So how does this piece rate for your collection?

I. SILVERBERG: Pretty good. UNIDENTIFIED FEMALE: This is now our best one.

SILVERBERG: Because you can really see the Katyusha.

COOPER: The Silverbergs started picking up Katyusha shrapnel two weeks ago. They already have quite the collection.

ELISHEVA SILVERBERG, COLLECTS KATYUSHAS: It's kind of cool that you have all these remainings of Katyushas. It's like evidence to what's happening.

COOPER: Their father, Barry a teacher, thinks his kids' collection is a way for them to cope with their fears.

BARRY SILVERBERG, FATHER: In collecting the rocket fragments, it gives them a bit of a feeling of control over something that was trying to kill them.

COOPER: Control over something trying to kill them.

There is much to be afraid of in Kiryat Shemona. Here, the sound of rockets and shelling.

UNIDENTIFIED FEMALE: I came back from...

COOPER: Has become routine.

E. SILVERBERG: First, if it's outgoing, you first hear this big boom, explosion. And then you can hear a sound like zzz -- you can hear it going over -- you can hear it going overhead.

And then when it's a Katyusha, sometimes you can hear it for three seconds, whistling before it falls down. Sometimes. But then it like just -- a big explosion without anything after it.

COOPER: On Sunday, nearly 100 rockets and mortars fell in and around this border town. At one blast site the Silverbergs are still finding pieces of shrapnel.

E. SILVERBERG: It hit the cars, the houses over there, the windows broke. You can find screwdrivers and...

I. SILVERBERG: Things like this.

E. SILVERBERG: Yes.

COOPER: So this would be something that's inside?

E. SILVERBERG: Yes.

COOPER: It may seem a strange hobby to some, but these are strange times in Kiryat Shemona.

E. SILVERBERG: I think it's interesting. And it's like -- there's not -- there's not much to do now because I mean everything is closed. The town is not -- because there's hardly people here. And all the stores and stuff, everything is closed. So I think it's something to do.

COOPER: Something to do. Some way to cope. A way for kids to play in this time of war.

(END VIDEOTAPE)

COOPER (on camera): And we'll have a lot more from Kiryat Shemona in a moment. Stay with us.

(COMMERCIAL BREAK)

COOPER: Here's what's happening on "AMERICAN MORNING" tomorrow. A CNN security report, undercover government investigators entering the country using illegal documents. Some didn't even have to show any I.D. at all.

Also, the latest news from the Middle East.

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