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Power Shift; Execution Video; More Troops?; Iraq: The Next Chapter; Top Tips; Democrats Take Control

Aired January 04, 2007 - 10:00   ET

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

TONY HARRIS, CNN ANCHOR: Is Washington driving straight into gridlock?
HEIDI COLLINS, CNN ANCHOR: Iraq's prime minister and the politicians who stand behind him. Are they up to running the country or are they fueling chaos?

HARRIS: Keeping Cuba communist after Castro. It is a neighborhood watch with a revolutionary beat on this Thursday, January 4th. You are in the NEWSROOM.

Revved up and ready to take control, the new Congress convenes in two hours, with Democrats taking the gavel and the president's party in the minority for the first time in 12 years. Will the power shift really change anything? Here's our senior political correspondent, Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT, (voice over): He's out, she's in. He's gone, he's stepping up. So it will look different. And, boy, they talk a good game about being different.

REP RAHM EMMANUEL, (D) ILLINOIS: And there's going to be a new direction that we're going to take this country from top to bottom.

CROWLEY: All righty, then. With all but a hearty "high oh silver," Democrats are ascending to the majority status with a promise to be nice to Republicans and get stuff done.

STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: But we're talking about big stuff, fundamental reform for Social Security or tax policy, that seems very unlikely. At the margins, sure, there are a couple popular Democratic items. But really changing our government and changing policy? That seems like a very hard pull to me.

CROWLEY: Some of the fault lies not in themselves, but in the setup. A Republican White House, a Democratic House majority without enough votes to override a veto, a bare majority of Democrats in the Senate, a whole bunch of lawmakers running for president and not much time.

JACKIE KOSZCZUK, CONGRESSIONAL QUARTERLY: By the time we hit the summer season, the presidential hopefuls, and there are at least a half a dozen of those in the Senate, that campaign will be kicking up in earnest, and anything that might be able to move legislatively is going to be sort of frozen out by the politics of 2008.

CROWLEY: Some things probably will fly, increasing the federal minimum wage, lowering interest rates on student loans, some 9/11 recommendations look good to go and woe be to the politician who stands in the way of ethics reform. But Social Security and Medicare reform, or a big change in health care? Not happening.

AMY WALTER, COOK POLITICAL REPORT: There's going to be a whole lot of jockeying, a whole lot of moving around the chairs. But whether anything substantive comes forward, I think, is doubtful.

NANCY PELOSI, (D) INCOMING HOUSE SPEAKER: Because of you, we are making history. CROWLEY: Incoming House Speaker Nancy Pelosi is kicking off three days of celebration, taking advantage of the spotlight Democrats have craved for 12 years.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you, all. We just finished our first cabinet meeting.

CROWLEY: He can't rain on their parade, but the president is not without a microphone.

BUSH: We need to reform Social Security and Medicare.

CROWLEY: Yes, well, good luck with that. But specifics were not the point of the president's Rose Garden appearance or his editorial in "The Wall Street Journal."

WALTER: He basically says, hey, I'm happy to work with Democrats. You know, if you agree with me on a lot of these issues, we can work together just fine. Really, trying to push back on Democrats to say, don't expect me to be the punching bag for the next two years.

CROWLEY: Let the jockeying begin and brace yourself for gridlock.

(END VIDEOTAPE)

HARRIS: Candy Crowley joins us now this morning from Capitol Hill.

Candy, boy, it feels like we just need to put the brakes on things a little bit here and get realistic about what is going to happen here. Sure, there's a lot of celebrating and sort of a celebratory mood out there, but let's get to the brass tax of this -- 100 hour agenda. When does the clock start?

CROWLEY: Well, the clock starts next week. But, you know, one of the things that's important to remember is the fact that the House doesn't make law, it passes legislation. The Senate helps in passing legislation. So they're going to have their take on whatever the House comes up with and they're going to have hearings. So already you're talking months here. And then, of course, there's the president with his veto power. And you have two Senate and House run by Democrats, but neither one of them has veto override capability. So there's a lot of expectation that went into this, particularly on Iraq, which is a whole different subject, that may not meet what the public is expecting at this point, which isn't to say that they won't get some things done. But anything major looks a little unlikely.

HARRIS: And, Candy, let's talk to that public expectation. Many feel that the public expected not just small changes, but fundamental reform in Washington. In the piece you've just laid out, it looks like that is going to be very difficult and perhaps people are going to end up a little bit disappointed in the end with what they actually get.

CROWLEY: Well, perhaps. A lot of it will be how either side sells what goes on as they move into -- and remember, it's not just the president who will -- it's not just the presidential campaign in 2008, it's a congressional campaign in a third of the Senate. So everybody -- nearly everyone will run for office in two years. So that's going to be reflected in some of this debate.

And, in fact, if the Democrats can't get some of this stuff through, if they meet with the Senate that doesn't have a wide enough margin to pass some of these things, the Democrats are going to argue to the American public, hey, listen, you know, what we really need here is bigger margins and a Democrat in the White House. The Republicans will also have their arguments. Look what they're trying to do. This isn't really what you expected. So you have to look at all of this through the prism of 2008.

HARRIS: And the public doesn't want to hear any of that justifying, they just want to get it done. Candy Crowley for us.

Candy, appreciate it. Thank you.

CROWLEY: Sure.

HARRIS: CNN is the place to watch history unfold today as the best political team on television provides you with insights you won't get anywhere else. After you watch us in the NEWSROOM, stay tuned for a special edition of "The Situation Room." Wolf Blitzer leads our team for "Power Shift: The Democrats Take Control." That's at 11:45 this morning only on CNN.

And still in the NEWSROOM. She's making history as the first female House speaker. Nancy Pelosi's own history also has congressional ties. A trip back in time to little Italy in Baltimore, just ahead.

COLLINS: Another arrest in connection with this cell phone video of Saddam Hussein's execution. The video is inciting anger, bringing a lot of criticism to Iraq's leaders. Our Arwa Damon has more now from Baghdad.

(BEGIN VIDEOTAPE) ARWA DAMON, CNN CORRESPONDENT, (voice over): These chilling, uncensored images of Saddam Hussein's final moments are at the center of an awkward Iraqi government investigation into itself and all that went wrong with the execution of Saddam. The government has said that it detained two security guards it says could be responsible for filming and distributing these images. The guarding are employees of the prison where the execution took place. The former military intelligence headquarters under Saddam, located in Khadmiye in northern Baghdad. Others might also be detained as the investigation continues.

It was meant to be a day that the government would hail as a success. In fact, the day of the execution, Iraq's national security adviser, who was present as Saddam fell to his death, told CNN . . .

MOWAFFAK AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISER: There was absolutely no humiliation to Saddam Hussein when he was alive and after he was executed.

DAMON: But we now know that not to be true. The audio of the last words that Saddam heard.

UNIDENTIFIED MALE: Muqtada, Muqtada, Muqtada.

DAMON: And other Shia slogans taunting the former dictator, forced the Iraqi government to confront the truth of what happened in the gallows. And now Iraq's national security adviser is saying this.

AL-RUBAIE: We are disgusted by this. We are very irritated. We are going to leave no stone unturned.

DAMON: Some government officials believe that the cell phone fallout is being blown out of proportion, vowing the same mistakes will not happen again. But it's already paying the price as pro- Saddam demonstrations gain daily momentum and what could have been one government promise fulfilled, Saddam brought to justice before the end of the year, is forever stamped as an act of Shia revenge.

The Iraqi government has set no specific date for the execution of two of Saddam Hussein's co-defendants also sentenced to death, his half-brother, Barzan Ibrahim, and the chief judge of the revolutionary court, Awad Bandar, simply stating that those will take place sometime after this weekend.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

COLLINS: The president's plan for Iraq. Will thousands more troops get their marching orders? Live now to CNN's White House correspondent Suzanne Malveaux.

Suzanne, the latest on this verdict is?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Heidi, yes, the sources say that it is expected the president's going to sign off on an order that would call for thousands of additional U.S. troops to head to Iraq, specifically to Baghdad. Pentagon sources say the number could be anywhere from 20,000 to 40,000, leaning towards the lower number as a particular range here. Of course, to try to secure Baghdad while the Iraqi government gets its own political house in order. That is going to be one component of this plan. What the president is calling a new strategy or what he calls a way forward here.

It is unpopular, as you can imagine. Many Democrats, as well as Republicans, do not believe that it's a good idea. Now here's what we expect is going to play out in the days to come. Those who are familiar with the president's deliberations expect that things are going to wrap up, consultations, by tomorrow sometime and then Monday likely is when White House officials will reach out to members of Congress to give them courtesy calls. Essentially briefing them on the president's plan and then we do expect either Tuesday, perhaps Wednesday is when the president will take his plan, present it to the American people in a national address.

Heidi.

COLLINS: It seems like somewhat of a surprise. You know, there's been so much discussion, Suzanne, about whether or not this is a military solution or a political solution that the president may, in fact, decide on more troops.

MALVEAUX: You know, Heidi, you bring up a very good point. There has been a fierce debate that has happened inside this building at the White House, within the administration, whether or not it's a good idea. We have heard conflicting reports from those inside the Pentagon as well. So we've seen this debate, of course, spill out, pundits, experts, as well as those inside the administration. So it is a very controversial idea. It is considered to be really maybe a last-gasp effort here at trying to secure Baghdad, the thinking being that they can allow the Iraqi government to try to begin this process of national reconciliation, but that that cannot necessarily happen while people are still fearing for their lives inside of that capital city.

Heidi.

COLLINS: And also, before we let you go quickly, Suzanne, National Intelligence Director John Negroponte resigning his post, going to become deputy secretary of state now.

MALVEAUX: That's right. As a matter of fact, you're seeing kind of a musical chairs that's happening here. One U.S. official said that he did a great job getting the DNI off the ground, that this new position is a very important position and that he really feels more comfortable in the diplomatic circles. He's got quite a bit of experience when it comes to diplomacy in Iraq. As you know, he was the U.S. ambassador to the U.N. He was a U.S. ambassador in Iraq as well. So that is something, when you talk about emphasizing the diplomatic, political solution, that is something they bring he will bring to the table in this new strategy. Who's going to replace him? The name is Admiral Mike McConnell. He's a former director of NSA. And he is going to be filling his shoes because he's got a lot of intelligence experience. So you're already beginning to see some shifts here as he moves forward, the president that is, to present his new plan.

COLLINS: I thought you were going to say because he has a lot of intelligence.

MALVEAUX: Well, that too, we assume.

COLLINS: That too. All right, Suzanne Malveaux outside the White House for us.

Thank you, Suzanne.

MALVEAUX: Sure.

HARRIS: And we want to update you on this developing story out of Denver, Colorado, now. This vehicle that you're about to see in a moment here, this SUV, could actually hold clues -- may, in fact, hold clues into the shooting death on Monday, New Year's Day, of Denver Broncos corner back Darrent Williams. He was just 24-years-old.

This SUV was found abandoned south of Denver International Airport. Reports on the scene are that footprints were in the snow near the vehicle, indicating someone may have run from the vehicle. The license plate on the vehicle matching the one investigators were looking for. There it is. The vehicle now on its way to a lab to be analyzed for clues in this investigation. We will keep you updated on this developing story.

COLLINS: Kidnappings, bombings and a reluctant leader. Desperate times for Iraq's new government. What will it take to rescue the fledgling democracy? Former U.S. envoy and nation builder James Dobbins will talk to us about that coming up in the NEWSROOM.

HARRIS: A hero on the subway and a city proud to call him their own. That story in the NEWSROOM.

COLLINS: Alone, injured and stranded 500 miles from land. Loved ones desperate, anxious and waiting in California. Lost at sea. We'll tell you the story, next in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Taking its toll. This cell phone video of Saddam Hussein's execution, a chorus of outraged critics. Now questions behind the motive and doubt the ability of Iraq's reluctant prime minister in all of this. Joining us from Washington is James Dobbins. He was the chief architect of Afghan reconciliation and is now a policy director at the Rand Corporation.

Thank you for being with us.

Let's talk about Saddam's execution. What are your thoughts about how it played out? I mean, does it really reflect on the abilities or lack thereof of power of the Iraqi government?

JAMES DOBBINS, FORMER ASSISTANT SECRETARY OF STATE: There certainly were failures in execution. And it is indicative of the difficulty the Iraqi government has in overcoming the strong sectarian passions that move so many of its supporters.

COLLINS: Do we even know whether or not a crime has been committed here?

DOBBINS: Well, I mean, technically, taking the photograph and then publicizing it may have been a crime. It certainly isn't the main problem that was -- the main problem is what was photographed, not the fact that it was photographed.

COLLINS: What are the larger implications, I guess is what I'm trying to get at?

DOBBINS: I don't know that there are gigantic implications. It was hoped that this event would demonstrate the resolution and effectiveness of the Iraqi government and the photographs have undermined that message. They've stepped on their message, in effect.

COLLINS: Well, on that note, I want you to listen, if you would, to something that was written in "The New York Times." This is their editorial this morning, places the blame on Prime Minister Nuri al- Maliki and it says this. "The ugly episode shows why Prime Minister Nuri al-Maliki is never likely to produce the national unity government that Washington keeps demanding and that Iraq so desperately needs." Do you agree?

DOBBINS: I think it does illustrate the underlying tensions in the society that not only Maliki, but probably any leader would have a difficult time overcoming.

COLLINS: And then listen to this. This was pretty shocking, I thought. Al-Maliki had an interview in "The Wall Street Journal," as I'm sure you saw, in which he said this. "The most difficult decision was when there was an agreement for me to become prime minister. That decision for me was heavier than a mountain because I didn't want to take this position. I wish I could be done with it even before the end of this term." What does a reluctant prime minister like this do to an already struggling government?

DOBBINS: Well, Maliki didn't campaign for the job. He wasn't anybody's first choice. He's a second ranking politician in a second ranking party. That is, he's not the head of his party and his party is not the largest party in the governing coalition. So he was a rather surprise compromise candidate when the stronger and more logical candidates either decided not to take the job or were vetoed by other forces.

He seems to be a sincere and straightforward man. His comments may be directed in part at Washington. There's talk in Washington about sending more troops and the U.S. taking greater control of the conflict rather than ceding control to the Iraqis, which clearly Maliki wants and is arguing for. And it may also be a shot across the bows of some of the others in Iraq, in the other Iraqi parties, who have been talking about possibly replacing him. And what he's saying is, hey, if you think you can do better than me, go ahead and try.

COLLINS: Right. And it seems to really beg the question, how badly do the Iraqis want democracy as we get ready next week to hear more from President Bush about his new strategy for the country? What are your thoughts about the Iraqi government and what they should be doing regarding that new strategy?

DOBBINS: Well, I think the Iraqis may want democracy, but they want other things more. And what they particularly want is security. They lost confidence in the capability of the United States to provide them security. And they're increasingly losing confidence in capability of their own government to provide security and, therefore, they're turning to sectarian militias to provide them with that security. And that's, of course, a formula for spreading civil war.

I think the Iraq Study Group came to the conclusion that, with all of its effects, the United States had to begin shifting more responsibility to the Iraqi government and, in effect, compelling it to assume a greater share of the burden for conducting this conflict.

COLLINS: If they want it. First and foremost.

James Dobbins, we appreciate your time here, from the Rand Corporation and the former assistant secretary of state.

Thank you, sir.

DOBBINS: thank you.

HARRIS: CNN personal finance editor Gerri Willis in New York now with an '07 to do list you won't believe.

Gerri, good morning.

GERRI WILLIS, CNN CORRESPONDENT: Hey there, Tony, good to see you.

You know earlier this week we cleaned up your finances, now we're going to help you get your house in tip top shape. That's next on "Top Tips."

(COMMERCIAL BREAK)

COLLINS: Want to go ahead and get to these microphones here where you see incoming Majority Leader Harry Reid. Let's go ahead and listen in.

SEN. HARRY REID, (D) INCOMING MAJORITY LEADER: At a later time, the Senate's the Senate and we'll work out whatever differences may develop at a later time.

QUESTION: Reopen in the room is Iraq. It's not like the legislation (INAUDIBLE). What about Iraq and the president is going to deliver his plan as early as Tuesday. If it is the surge that's being reported, are you able to get onboard with that?

REID: Iraq is where it is. The country is where it is. Iraq is an issue that we all need to work on and we will work on that. And we will work on that to the best of our ability in a bipartisan measure. But -- bipartisan manner, I'm sorry. But we are not going to divert our attention from what needs to be accomplished for this country. There are a lot of things that need to be accomplished and we're going to work on those in spite of Iraq.

One more question.

Thank you.

COLLINS: On the first day of the 110th Congress, we see incoming Majority Leader Harry Reid answering a few questions there, alongside some of the House members as well. So, all right.

Well, we are moving on now. Want to go ahead and check the Dow for you. You can see, resting at 12,417. Down about 56 points. Nasdaq down about four. As always, we'll continue to watch it for you.

HARRIS: Starting a new year, the perfect time to start a to do list for your home. Oh, boy, our personal finance editor Gerri Willis with tips to get things done around the house.

And, Gerri, all right. All right. I'm a captive audience here.

WILLIS: It's not that bad, Tony. It's not that bad.

HARRIS: I'm going to take notes. It's not that bad?

WILLIS: No, it's not that bad. You're going to love this.

HARRIS: OK. I'm ready.

WILLIS: It's going to help you out. So, tip number one, you have to de-junk. You know if you got a lot of great gifts for Christmas, you may want to give the heve-ho (ph) to old cell phones, cameras and computers. And you can even donate Macs and PCs by contacting the National Cristina Foundation at cristina.org. Find groups in your area that need these donated electrics. Go to sharetechnology.org. And if you just want to recycle some old inkjet cartridges, you should do that, and cell phone batteries, check the retailers in your area. Places like Best Buy, Circuit City, usually have recycled drop off areas.

HARRIS: You know what's great about these tips is, it's just -- there are things here, as I look ahead, that you just don't think of. And one of the tips, tip two, you say this is a good time to sort of check your insurance coverage.

WILLIS: Why not? You know, first of the year, let's get started right. And if your area is prone to flooding, you want to get flood insurance. Contact the National Flood Insurance Program at 888-379- 9531 or you can just get on the web, floodsmart.gov. And, of course, there are other reasons to improve your insurance protection as well. Remember, Tony, home values have gone up 50 percent over the past few years. That means you'll need more insurance to rebuild your home if disaster occurs. Contact a contractor for that estimate. While you are at it, snap a few photos inside the home. That's invaluable to making insurance claim.

HARRIS: Now that's very smart. I'm way ahead of this next tip. Call my handy man.

WILLIS: I'm impressed. Well, you know what, those things that keep you up all night, the leaky faucet, other problems . . .

HARRIS: Tell me about it.

WILLIS: You've got to get a hold of a handy man. But the question is, who is good? Here are some places to go to find some good handy people. Handymanconnection.com, servicemagic.com, homefixology.com. And if you want to see some reviews from customers who have actually used these people, go to angieslist.com. They rate these people, which is great information.

HARRIS: I love this last tip. But, once again, something you may not think of. This would be a perfect time to do this, at least think about it, get started, trim your payments.

WILLIS: And we're talking about mortgage payments here. If you are paying private mortgage insurance because you didn't put 20 percent down on your house when you bought it, now is a time to take a close look at what you're paying. If you took out your mortgage after July 1998 and you've paid off about 22 percent of the loan, your lender has to cancel PMI.

HARRIS: Gotcha.

WILLIS: And any gain in appreciation values, that will help you, too, in getting rid of PMI. But you have to prove it to your lender.

HARRIS: Gotcha. Trim your payments. That's a good one.

The big "Open House" show this weekend. What do you have on tap for us, Gerri?

WILLIS: The big "Open House" show, 9:30 a.m. Saturday morning, we're going to be taking a look at the housing market, what's in store for 2007. And very helpful information about getting rid of holiday debt. And then, of course, Tony, we have our special edition of "Open House" called mortgage meltdown. That's Saturday on CNN at 2:00 p.m. It's a full hour on foreclosures. We'll tell you what's going on out there in the market. It's very interesting stuff.

HARRIS: There she is, CNN personal finance editor Gerri Willis.

Gerri, thank you.

WILLIS: Thank you. Good to see you, Tony. COLLINS: All right. There we have a live shot now of Capitol Hill. Obviously, the 110th day of Congress is convening and we want to go ahead -- and who do we have coming in, guys? I believe we are going to hear a story about Nancy Pelosi. As you well know, she is the first speaker of the House -- first female speaker of the House. Let's go ahead and take a look at this piece done by, I believe, our Dana Bash. Let's listen.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT, (voice over): Long before Nancy Pelosi first ran for Congress and Republicans labeled her a liberal from San Francisco, this was her home, the gritty East Coast port city of Baltimore. Little Nancy, as she was known back then, was the youngest of six children born to Nancy and Tommy D'Alesandro and their only girl. Lena Palmer lived just down the street

LENA PALMER, BALTIMORE RESIDENT: Her mother was so happy when she got her. She had all boys and she kept having children until she got Nancy.

BASH: The year was 1940 and Tommy D'Alesandro, a former insurance salesman, was riding high, a powerful Democrat on Capitol Hill representing Baltimore's Little Italy, a tight knit, working class neighborhood of brick row houses full of proud Italian American Catholics.

TOMMY D'ALESANDRO III, NANCY PELOSI'S BROTHER: On sundays, when you walked down the street, you can -- you can smell the sauce coming from -- permeating from all these houses.

BASH: D'Alesandro's oldest son, also named Tommy, remembers those as tough times when his family's front door was always open and all six D'Alesandro children had to take turns manning a desk to help their father's constituents.

D'ALESANDRO: So Nancy began to meet people from all walks of life at the age of 13 and to deal with the

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Long before Nancy Pelosi first ran for Congress and Republicans labeled her a liberal from San Francisco, this was her home, the gritty East Coast Port City of Baltimore. Little Nancy, as she was known back then, was the youngest of six children born to Nancy and Tommy D'Alesandro, and their only girl. Lena Palmer lived just down the street.

LENA PALMER, "LITTLE ITALY" RESIDENT: Her mother was so happy when she got her. She had all boys. And she kept having children until she got Nancy.

(MUSIC)

KOPPEL: The year was 1940. And Tommy D'Alesandro, a former insurance salesman, was riding high, a powerful Democrat on Capitol Hill, representing Baltimore's "Little Italy", a tight-knit working class neighborhood of brick road houses, full of proud Italian American Catholics.

TOMMY D'ALESANDRO, III, NANCY PELOSI'S BROTHER: On Sundays when you walk down the streets, you could smell the sauce coming from, permeating from all these houses.

KOPPEL: D'Alesandro's oldest son also named Tommy remembers those as tough times when his family's front door was always open. And all six D'Alesandro children had to take turns manning a desk to help their father's constituents.

D'ALESANDRO: So Nancy began to meet people from all walks of life at the age of 13 and to deal with the problems of society at the age of 13.

KOPPEL: A lesson in grass roots politics Nancy and her brothers would never forget. Now as Congresswoman Pelosi walks into the history books becoming the first female Speaker of the House, she plans to pay tribute to her Baltimore roots. Professor Matthew Krenson (ph) says the visit could help her refashion her image.

UNIDENTIFIED MALE: That she's not just a well-dressed lady from San Francisco who's married to a millionaire. That she came from a working class ethnic religious neighborhood that she's one of them.

(END VIDEOTAPE)

COLLINS: That was obviously our Andrea Koppel. Sorry about that, everybody.

As you know, CNN is the place to watch history unfold today, as the best political team on television provides you with insights you won't get anywhere else. As we look at the live shot there of Capitol Hill. After you watch us in the NEWSROOM. Stay tuned for a special edition of THE SITUATION ROOM. Wolf Blitzer will be leading our team for "Power Shift: The Democrats Take Control." That begins at 11:45 this morning, only on CNN.

HARRIS: Good morning. Once again, everyone. 10:30 a.m. Eastern Time, 7:30 a.m. Pacific. Thanks for joining us in the NEWSROOM again. I'm Tony Harris.

COLLINS: And I'm Heidi Collins.

HARRIS: Dinner meeting on the Sinai: The leaders of Egypt and Israel get together, new life for Middle East talks, in the NEWSROOM.

COLLINS: After Castro's dead, will the revolution live on? These Cubans vow it will. Our look at a neighborhood watch group unlike any you've seen, ahead in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Laying the groundwork for peace talks. Egyptian President Hosni Mubarak hosting Egyptian Prime Minister Ehud Olmert today. That meeting taking on new urgency at this hour, as we speak.

Take a look at these new pictures in to CNN from Ramallah, the West Bank, Israeli troops and Palestinian gunmen exchanging heavy gunfire in downtown Ramallah. These pictures coming in to us just moments ago, this happening after an undercover -- a set of undercover officers tried to arrest fugitives in that city's vegetable market. Take a look at these pictures. Very dramatic, in to us right now at CNN.

Let's bring in CNN's Atika Shubert. She is at the Egyptian resort of Sharm El-Sheikh.

And, Atika, these pictures underscoring the need for these talks right now.

ATIKA SHUBERT, CNN CORRESPONDENT: Exactly. Even as this violence is continuing there, they're trying to pave the way for peace here. Prime Minister Olmert should be arriving very shortly to meet with President Mubarak. They're trying to relaunch the peace process that's been stalled for six years. Now the major stumbling block at the moment, of course, is the fact that the Hamas-led government was elected into power last year. This is a government that refuses to recognize the state of Israel. Israel says it is impossible to have peace negotiations with Hamas.

Instead, the Israeli government has been trying to bolster support from Palestinian President Mahmoud Abbas and the more moderate Fatah faction. So how to deal with Hamas while still bolstering support for President Abbas is going to be a major topic of discussion at tonight's summit -- Tony.

HARRIS: And, Atika, now how important a partner is Egypt in all of this?

SHUBERT: A very important partner. It's a pivotal -- has a pivotal mediating role, really acts as a bridge between the Israeli government and the Hamas-led government.

One example of this, of course, is the fact that it's trying to broker the release of Gilad Shalit. That's an Israeli soldier that was kidnapped last June by Hamas militants. Part of that deal would be to release Palestinian prisoners by Israeli authorities in exchange for his safe return. Now those talks are ongoing. There has been no agreement yet.

So we're not likely to see a solution announced tonight, but it goes to show how for the Egyptian role is -- Tony.

HARRIS: Yes, Atika Shubert for us. Atika, thank you.

Once again, new video in to CNN underscoring the importance of these talks. Let's go back to that video, just the in to CNN. Israeli troops and Palestinian gunmen exchanging heavy fire in downtown Ramallah, after undercover forces tried to arrest fugitives in that city's vegetable market. You're seeing a bit of the carnage right now. We understand from reporting from the Associated Press that two Palestinians were killed and 25 were wounded in this fighting. We will continue to follow these developments and bring you the very latest.

COLLINS: There is word the nation's intelligence chief is changing jobs. Senior administration and State Department officials say John Negroponte is resigning as director of national intelligence to become deputy secretary of state. Negroponte is the first-ever director of national intelligence. It was a post created in the wake of the September 11th attacks. He was confirmed less than two years ago to oversee all 15 U.S. intelligence agencies.

The expected job shift comes as the president prepares a strategy shift in Iraq. Sources say President Bush likely to order anywhere from 20,000 to 40,000 more troops to Iraq. Though the sources noted the president has not yet signed off on a plan. We are told President Bush likely will announce his strategy to the nation next week in a televised address.

HARRIS: Another day, another Iraqi security guard detained. He is being questioned about the release of that cell phone video of Saddam Hussein's execution. Two guards detained now. And Iraq's national security adviser says he expects at least two more arrests. Making the video public, he says, was a move to sabotage national unity. It incited anger among some Sunnis, and opened Prime Minister Nuri al-Maliki to harsh worldwide criticism.

New hope for five contractors held by kidnappers in Iraq since mid-November. A videotape show the four Americans and Austrian in pretty good shape. They all work for a Kuwaiti-based security company. A newspaper reporter got the first look at the tape last week. It was apparently made two weeks ago.

COLLINS: A race against time and hunger. Military choppers and cargo planes dropping hay to feed cattle stranded by snow. On the ground, crews are using sledgehammers now to break ice-covered creeks so that the cattle can drink. Ranchers say some herds haven't had anything to eat since last week's storm. That storm is said to be worse than the 1997 that actually killed 30,000 head of cattle.

In northeastern New Mexico, National Guard choppers are not only delivering hay, but food, baby formula and other supplies to families cut off by the snow. Drifts as high as 14 feet cover some roads there.

(WEATHER REPORT)

HARRIS: Baby in a hurry.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: So, I'm just like out of nowhere, it went from like seven minutes down to two minutes to, what, like seconds.

(END VIDEO CLIP) HARRIS: Special delivery in a hurry to meet mom, to meet dad, the people. Little baby is going to keep up for the next two years, sleepless nights. A baby makes a rush-hour entrance on a busy highway. Details in the NEWSROOM.

SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange where the energy sector is selling off. Big oil also under pressure as the new Congress takes office today. I will have details when NEWSROOM continues. You are watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

COLLINS: Baby on board and in a rush, too. Little Tori Isabel Rogers began her life in the fast line.

Jaye Watson of CNN affiliate WXIA has details.

(BEGIN VIDEOTAPE)

JAYE WATSON: A busy stretch of Interstate 75 during morning rush hour, not a place you would associate with new beginnings but that's where Tori Isabel Rogers decided she would make her entrance

PATTI ROGERS, NEW MOTHER: I thought this happens to other people. This was -- I would never have expected that to happen to me.

WATSON: Patti Rogers, mom to 9-year-old Tyler had done this before, so had her husband, when the contractions began they packed up and started the 40 minute to Kennistone Hospital

ROGERS: All of a sudden just like out of nowhere it went from like seven minutes down to two minutes to, to, what, like seconds. I couldn't even believe I could withstand the pain, seriously, because I thought, well, this can't happen to me. I need that epidural.

WATSON (on camera): Patti Rogers says she kept telling her husband that she wasn't going to make it, and that she eventually had to show him that she was delivering the baby. So this is where he pulled off the highway.

(voice-over): Dwayne got his wife on the seat and called 911

DWAYNE ROGERS, NEW FATHER: By the time I said, what do I do, I had the whole baby in my hands, and she just cried out a little loud whine, a little bit like that.

WATSON: Back slapping firefighters and paramedics were just moments behind

D. ROGERS: Oh, they were all happy and smiling, and, you know, congratulating me on doing their job for them.

WATSON: At 7 pounds, 7 ounces, Tori is a healthy perfect little girl. With the highway median birth behind him, Dwayne Rogers wouldn't change a thing. D. ROGERS: If you have to chance to do it, I wouldn't pass it up, you know.

(END VIDEOTAPE)

HARRIS: I wouldn't know on my own -- Heidi had a great question. But, yes, I think so. They guide you because they did it. They guide you where to cut the cord.

COLLINS: Yes, but I mean if you were alone and you delivered the baby and you're in the car, do you know where to cut the cord? It's not a test because I'm not sure I know either.

HARRIS: Good, good.

COLLINS: I'm just curious what they did until the firemen got there.

HARRIS: It's a good question. As we say around here, questions linger.

COLLINS; Questions linger.

HARRIS: Yes.

(BUSINESS HEADLINES)

COLLINS: After Castro is dead, will the revolution live on? These Cubans vow it will. A look at a neighborhood watch group unlike any you've seen, ahead in the NEWSROOM.

HARRIS: And mourning a life taken. Questions about motive linger. We will update a school shooting story ahead in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Viva la Revolucion -- not just a slogan from history, but words to live by for a Cuban group.

CNN's Karl Penhaul reports.

KARL PENHAUL, CNN CORRESPONDENT: Volunteers strut their stuff as they spruce up the neighborhood. It looks more like a party than grass roots politics. Cubans can do both things at the same time, work and fiesta, he says.

These are Cuba's revolutionary defense committees. Today's task, cleaning up for the new year. The neighborhood groups are a cornerstone of society here, one on almost every city block. Members say they'll keep the Cuban revolution alive even after ailing leading Fidel Castro dies.

This revolution isn't just about Fidel Castro. It's about the entire population, this retiree tells me. The day comrade Fidel dies, the revolution will continue as normal. Castro created the revolutionary defense committees in 1960, after a string of U.S.-backed sabotage plots. The committees began on every city block as a measure to control the enemies of the revolution from mobilizing, he says.

Caleb McCarry, the U.S. State Department official planning U.S. government support for post-Castro transition in Cuba says the neighborhood groups are a sinister political tool

CALEB MCCARRY, U.S. STATE DEPARTMENT: The committees for the defense of the revolution are part of the repressive apparatus of the regime and their true purpose is to repress dissent and to repress independent thought and opinion.

PENHAUL: Previously jailed political dissident Elizardo Sanchez doubts the defense committees are organized enough to help perpetuate Communist rule after Castro dies.

ELIZARDO SANCHEZ, POLITICAL DISSIDENT: For a post-Castro resistance, I believe the government would rely on police and state security forces as well as Communist Party elements, he says.

PENHAUL: The daily routine of the committees seems mundane, street sweeping, recycling household trash and night-time patrols to prevent petty crime. Under the gaze of revolutionary icon Che Guerva, this defense committee also is organizing blood donations. Still, the committees remain on guard.

(on camera): At the center of the community lies in this concrete bunker. This particular one is no longer in use but it was intended as a shelter for residents. It's a reminder of what Cubans see as the ever present threat of a U.S. attack.

(voice-over): The U.S. government still calls for an end to Communist rule in Cuba, but makes no public threat of military measures. Yet Yudines Carillo remembers the lessons of the past as she paints the slogan, long live free Cuba.

YUDINES CARILLO, COMMUNIST YOUTH WORKER: We'll never allow the U.S. government or its mercenaries to come here to try to crush what our people have struggled for, she says.

PENHAUL: She and her neighbors vow to stand by Castro and Cuba's revolution city block by block.

Karl Penhaul, San Jose De Las Lajas, Cuba.

(END VIDEOTAPE)

HARRIS: Here they come. The new Congress, a female speaker, the first Muslim in the House. Democrats with the gavel. A history- making day at the Capitol. We are covering it here in the NEWSROOM.

COLLINS: And extending an invitation. Duke University offers to take back two lacrosse players accused in a rape case. That story ahead, right here in the NEWSROOM. (COMMERCIAL BREAK)

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