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Obama, Netanyahu Start Peace Plan Discussion With Tense Start; Pelosi Under Fire From Republicans to Put Up Evidence or Cut Out the Accusations; Gas Prices Rising Across Country; Best Time to Purchase a New Car

Aired May 18, 2009 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Two sides of extreme weather. Western states bake but in the east, it feels more like fall.

And the death of an assistant school principal linked to the swine flu. Should we be worried about the spread of this virus?

Shopping for a car? Cutting bank fees and haggling tips? We've got ways to score a sweet deal.

It is Monday, May 18th. I'm Heidi Collins. Hi, everybody. You are in the CNN NEWSROOM.

This morning, politics, pitfalls and your pocketbooks. CNN crews are working hard on stories that matter most to you. Jill Dougherty with what could be a chilly morning inside the White House today. The topic -- Middle East peace.

And another test of leadership. Now the abortion debate. The president speaks and passions flare.

And also the latest on what is draining your wallet. Christine Romans looks at rising gas prices and what's down the road this summer driving season.

This morning, though, at the White House, terrorism, diplomacy and a growing divide with one of Washington's most important allies. Next hour, President Obama discusses Middle East peace plan with Israeli prime minister, Benjamin Netanyahu, and those efforts could get off to a tense start.

Let's get the very details from foreign affairs correspondent, Jill Dougherty, now in our Washington bureau.

So, Jill, some observers predict fireworks with this whole thing. Any idea what's going to happen here today?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, you know, it probably won't be the way it would normally be because the relations now with the new administration here in the United States and a new administration in Israel, things could be different and some people do believe that there -- it will be -- if not fireworks, there could be some really tough talking.

And here are some of the things that are really on the agenda that are sticking points. One, of course, would have to be the idea of a two-state solution. The idea that Israel and the Palestinians could live side-by-side as two states in peace.

Obama has made it clear that that is a cornerstone of his policy. Benjamin Netanyahu is refusing to commit to that so that's a problem right off the bat.

Then you have the issue of settlement. The United States wants them, in some cases, dismantled. Certainly the illegal outposts dismantled and Benjamin Netanyahu is saying they should have a right of some type of natural expansion.

And then finally, you have Iran. The Israelis do genuinely feat the nuclear program of the Iran and they have intimated or hinted that they might take action, military action. The United States doesn't want that. So those are three big issues that could be sticking points.

COLLINS: Yes, no question. I wonder, though, how different is all of this from the Bush administration, the Obama administration's approach to Israel?

DOUGHERTY: You know, people -- experts in the region are saying it could be more like tough love because, after all, the United States and Israel are partners and allies, but there is a growing sense that something has to happen, that there has to be some type of agreement.

The United States would like a comprehensive peace agreement and if it doesn't happen, King Abdullah of Jordan is saying there actually could be a war next year if it doesn't happen.

COLLINS: All right. Well, we're watching that closely. Jill Dougherty, our foreign affairs correspondent, from Washington this morning.

President Obama also wading into one of the most divisive debates in American politics. At the University of Notre Dame yesterday, the president told graduating seniors that while there may be little agreement on abortion there must be dialogue.

More than three dozen people arrested yesterday protesting his appearance at the Catholic university. They say his stance on abortion and stem cell research made him unfit to deliver the commencement speech.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We open up our hearts and our minds to those who may not think precisely like we do or believe precisely what we believe, that's when we discover at least the possibility of common ground.

That's when we begin to say, maybe we won't agree on abortion, but we can still agree that this heart-wrenching decision for any woman is not made casually. It has both moral and spiritual dimensions, so let us work together to reduce the number of women seeking abortions. Let's reduce unintended pregnancies.

(APPLAUSE)

Let's make adoptions more available.

(APPLAUSE)

Let's provide care and support for women who do carry their children to term.

(APPLAUSE)

Let's honor the conscience of those who disagree with abortion and draft a sensible conscience clause and make sure that all of our health care policies are grounded, not only in sound science, but also in clear ethics, as well as respect for the equality of women. Those are things we can do.

(END VIDEO CLIP)

COLLINS: Before returning to Washington, the president attended two fundraisers in Indianapolis. Indiana is a traditionally conservative state but it went to Barack Obama in the presidential election.

This hour, Vice President Joe Biden is due to deliver a commencement speech of his own. He'll speak to the graduating class at Wake Forest University. That in Winston Salem, North Carolina of course. Biden will be the first sitting vice president to speak at the school's commencement.

Gas prices take a big jump just as a lot of us are getting ready for the unofficial start of the summer travel season. One survey has shown the gas is traveling 25 cents in the past three weeks.

So how high will they go? Christine Romans is part of the CNN money team joining us now.

That's right. What's the deal here? How high -- we've seen them ticking up slightly, slightly for several days, several weeks, in fact. But what's behind it?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, Heidi, it's interesting, too, because the reason why so many people are concerned is because 25 to 26 cents in three weeks. The last time we saw this is last year. Remember?

COLLINS: Oh, yes.

ROMANS: And we saw gas prices go to $4.00. So people are very concerned that we're in the midst of some big push to vary $3, $4 gallon gas again. And most of the experts tell me no, that is not likely. We've probably seen the bulk of this move. The government said that it expected its peak at $2.30. We're right there, $2.31 a gallon.

A month ago $2.06 a gallon. But look at last year. $3.79. We all very, very unhappily remember those high gas prices.

COLLINS: Yes.

ROMANS: So why so many people are concerned. In Phoenix you're paying about $1.99 a gallon. In Chicago it's more like $2.53. Why? Demand is not up. People aren't driving a lot more but the oil prices are ticking higher and gasoline, of course, is made from oil.

And oil is moving higher because the people in those markets, the people who make those markets in oil, are anticipating that the economy eventually will recover, that we're closer to a recovery than we are to the beginning of this recession and that is why those prices are ticking higher and coming all the way through.

There's an anticipation of the summer driving season. Some other little things happening as well. But listen, to a person, you know, whether it the Shelby Lundberg at the "Lundberg Report" or people at AAA.

COLLINS: Yes.

ROMANS: Or any of the people who are watching this, a lot of economists I've talked to, and the government, they think that most of this current move is behind us. We won't see very much more on the upside.

COLLINS: All right. So how about the "Romans Numeral" today?

ROMANS: OK. The "Romans Numerals." The number, of course, that's sort of behind the story of the day, driving the money news for your money is $27.00. And Heidi, here's what this number represents to you.

If you're worried about gas prices right here and you're wringing your hands.

COLLINS: Yes?

ROMANS: This is the average savings for a tank of gas versus a year ago. So you're filling up...

COLLINS: OK.

ROMANS: We're using an 18-gallon gas tank here. You're filling up the tank, you're still paying about $27.00 less.

COLLINS: Less.

ROMANS: For a tank of gas right now than you were a year ago. And that's heading into the driving season. AAA says they expect to see more people driving on the roads for Memorial Day this year than last year. A survey by CareerBuilder says fewer people will be taking a vacation. I think what we know here, Heidi, is that people are still stung by the recession, but they're going to start creeping out and having car trips again, and one of the reasons is because compared to last year it's still cheaper to go -- get in the car and go to Grandma's.

COLLINS: Yes. The family trickster. You got to love it.

ROMANS: Yes.

COLLINS: All right. Christine Romans, thank you.

Great Britain is rolling out a new plan today designed to help both car buyers and that nation's auto industry. New car sales are down about 25 percent from a year ago. So the government is offering a $3,000 discount now to people who want to scrap their old clunkers. The car must be at least 10 years old and drivable.

Americans take heart at the White House and Congress have been working on a similar deal.

A sixth death in the U.S. has now been linked to the H1N1 virus. What you need to know about this flu compared to seasonal flu.

ROB MARCIANO, AMS METEOROLOGIST: Good morning. I'm Rob Marciano on the CNN Severe Weather Center. If you live out west, boy, you had a pretty smoking hot weekend. We'll talk about that and California. Plus you top it off in SoCal, a little earthquake last night.

Complete weather details coming up when the CNN NEWSROOM comes right back.

(COMMERCIAL BREAK)

COLLINS: An assistant middle school principal is the first person in New York City to die from swine flu complications. 55-year- old Mitchell Wiener died last night at Flushing Hospital. He is the sixth person in the U.S. whose death has been linked to H1N1.

Senior medical correspondent Elizabeth Cohen joining us now to talk more about the case.

Boy, only 55.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right. Only 55, and so you have to ask yourself, why did this 55-year-old die of swine flu when so many other 55-year-olds were infected and didn't get sick.

Well, Mayor Michael Bloomberg said last week that he may have had some other health problems in addition, of course, to getting infected with H1N1. And if that is the case that is -- that's sort of par for the course what's been going on here.

If we take a look at the deaths from swine flu. Three in Texas, one in Washington state and one in Arizona. Everyone, all of those people who died had some form of an underlying condition. It might have been asthma. It might have been some kind of lung disease.

This is very similar to seasonal flu. Folks who have an underlying disease like diabetes or a lung problem, they are the most vulnerable to severe complications and death.

COLLINS: But it is more contagious, is it not?

COHEN: Right. That is what sets -- seems to be setting it apart from swine flu -- from seasonal flu is that swine flu seems to spread more quickly and it makes sense, because none of us has any kind of immunity to H1N1.

COLLINS: Yes.

COHEN: But many of us have some form of immunity to the seasonal flu that comes around every year but not to this.

COLLINS: So then, we still need to, obviously -- I mean this thing hasn't gone away.

COHEN: No.

COLLINS: And we've always been telling people as what we had learned along the way is that it may sort of rest for a while, if you will, in sort of this dormant phase and come back later. Is that where we are now? What should we be doing?

COHEN: You know...

COLLINS: (INAUDIBLE) normally?

COHEN: Right. It's some ways it's hard to say where we are right now.

COLLINS: Yes.

COHEN: I mean no one can predict exactly what's going to happen but that -- but in some ways this is relatively easy because what we should be doing is what we should be doing all the time and that is just washing your hands and if you run into a friend who is feeling ill, probably not the time to give a kiss and a hug.

COLLINS: Right.

COHEN: But that's always true. So you should always be vigilant about things like this.

COLLINS: Yes, very good. All right. Well, you keep us posted. Straight and narrow with this thing. Sure do appreciate it.

Our senior medical correspondent Elizabeth Cohen today.

Here are some more numbers now on H1N1. The CDC reports 46 states plus the District of Columbia have more than 4700 confirmed and probably cases. The World Health Organization says 40 countries have reported more than 8800 cases mostly in the U.S. and Mexico. 76 deaths have now been linked to the virus.

COLLINS: A magnitude 4.7 earthquake rocks the Los Angeles area but there are no reports of major damage or injuries.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I looked up to the lamp post and I saw how it was going back and forth. And what I was thinking? I was thinking -- I ran into the street if it gets worse.

(END VIDEO CLIP)

COLLINS: Yes. The quake hit around 8:40 last night local time. Centered about 10 miles from downtown. At least five smaller after- shocks came later and the shaking was strongest in coastal areas south of the city, while some people living to the north felt nothing.

Rob Marciano is standing by now.

MARCIANO: Hey.

COLLINS: We've got a lot to talk about, but let's start with that.

MARCIANO: OK.

COLLINS: The earthquake.

MARCIANO: I've got -- you mentioned who felt it, who didn't.

COLLINS: Yes.

MARCIANO: I have one of the maps from the USGS Web site which is their "Did you feel it?" map.

COLLINS: Really?

MARCIANO: And -- for all the science that they have and all the monitors they have all over the world...

COLLINS: Very technical.

MARCIANO: ... it's pretty much what people have reported to them. And then we illustrate it colorfully here. And as you mentioned, here's L.A. Folks south of L.A. saw most of it or felt most of it, I should say, in a strong manner.

I should also mention that the fault that this is on is the Newport/Englewood fault, which kind of runs this way all the way down to the Newport area. It's about 75 kilometers long.

So fairly active fault there and hopefully it won't be any more active than that. So we are seeing some after-shocks. We have seen some since last night. They haven't been all that big.

(WEATHER REPORT) COLLINS: Beautiful. Yes, because you said June 1st it's what it's supposed to start, right? So does that mean that my birthday gets to come early, too?

MARCIANO: If you like. And I don't know many people at our age are looking forward to that but you...

COLLINS: I don't know what you're trying to say over there.

MARCIANO: You get better and better with age, Heidi.

COLLINS: Yes, yes, yes. OK.

MARCIANO: Like a fine wine.

COLLINS: OK. We'll come back and check with you a little later.

MARCIANO: OK.

COLLINS: Thank you, Rob.

MARCIANO: See you.

COLLINS: The final spacewalk to fix the Hubble telescope getting under way right now. Cool, live pictures to show you right here. Astronauts are leaving the space shuttle Atlantis to do the work, of course.

This is the fifth spacewalk they've had to do on this particular mission. They're making repairs to buy the telescope a few more years of life. The shuttle will release the Hubble tomorrow.

More than a million people homeless, jobless, their future uncertain. We go inside the refugee camp for those displaced by the Pakistani/Taliban fighting.

(COMMERCIAL BREAK)

COLLINS: A bloody civil war may be coming to an end after 25 years. Celebrations in the streets of Sri Lanka after the president there declared victory over the separatist rebels and this morning there is word troops may have killed the rebel leader.

Let's talk now to Sara Sidner who's joining us on the phone from Colombo, Sri Lanka.

Sara, good morning.

SARA SIDNER, CNN CORRESPONDENT: Good morning, Heidi.

Government-run television announced the leader of the Tamil Tigers, Velupillai Prabhakaran, has been killed by government forces but there have been no further details as to exactly how that happened from the government.

The government Web site, though, says, quote, "The troops militarily defeated the LTTE with all its leaders being killed this morning." So that is coming from the government's own Web site indicating that not only Prabhakaran, the leader, but many of his commandos also killed today.

Now if that report is valid, this would be a huge victory for the Sri Lankan government in power signaling the end of a 25-year-old civil war. We should also say that the timing of all of this goes right in line with what is scheduled for tomorrow.

The president is expected to announce that victory has been had to the parliament tomorrow morning saying that the war is over and that the government forces have won this 25-year-old war. Heidi?

COLLINS: Wow. What huge news this would all be. All right. Well, we are watching very closely alongside you, Sara Sidner. Thanks so much for that.

And some things you should know about the civil war in Sri Lanka now. It did start back in 1983. Tamil rebels wanted their own independent state in the northern part of the country. As many as 70,000 people died in the conflict. The United States, European Union and 30 other countries declared the Tamil Tiger rebels a terrorist organization.

On trial for having a visitor. Proceedings against Myanmar opposition leader, Aung San Suu Kyi, started today inside a prison. This all started when an American man showed up at her house earlier this month.

Suu Kyi is accused of letting him stay even though she was under house arrest. The visitor who may have been trying to evade authorities is also on trial. Suu Kyi's supporters question the timing of all of this. She was supposed to be released later this month.

Four women shattering Kuwait's version of the glass ceiling. Kuwaitis elected the first woman to their parliament over the weekend. For almost five decades now all of the country's lawmakers were men. Women were not allowed to run for office or even vote until just four years ago. Of the 210 candidates, this year, 16 were women.

It's a case of he said/she said. A top House Republican says house speaker Nancy Pelosi needs to come clean on accusations that the CIA lied to her about torture techniques.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I'm only speaking from my own experience and we were told that it was not being used.

(END VIDEO CLIP)

COLLINS: So what's going to happen next in all of this? We're talking about it in a moment.

(COMMERCIAL BREAK) ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: Quickly want to give you a look at the White House this morning where President Barack Obama is actually going to be meeting with Israeli prime minister, Benjamin Netanyahu.

They're going to be talking about Middle East peace, of course. We're also going to go live to Jerusalem in just a few minutes where our Paula Hancocks is going to have some really good background for us on this story. So stick around for that.

Meanwhile, the opening bell just about to ring this morning, a Monday morning on Wall Street. And though we're expecting a higher start, it could be another choppy session overall.

Susan Lisovicz is at the New York Stock Exchange now with more on the factors investors are going to be looking at in order to make their decisions, yes?

Good morning, Susan.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Good morning. Happy Monday to you, Heidi.

Last week was a volatile one on Wall Street. But not a good run one for the bulls ultimately. Ultimately the NASDAQ snapping its nine-week win streak and ditto for the Dow and NASDAQ.

We have -- we're expecting another week of choppy trading. No major economic reports to give the market direction on the earnings front, lows reporting a 22 percent decline in quarterly profit but still managed to beat estimates. It raised its outlook for the full year.

We don't have a -- we don't have a read, though, in terms of what the stock was doing in the futures. In terms of what else we're expecting this week leading up to Memorial Day, Heidi, we do have initial jobless claims later this week.

We do have some quarterly earnings. We do have Campbell's Soup later on this week. And we're going to see if the bulls can really manage to get back in the fray, Heidi. It's -- you know, we've had a pretty good period, a couple of months now, where we've been looking at these green shoots, you know?

COLLINS: Yes.

LISOVICZ: Where we've been seeing signs that perhaps things were bottoming out and, you know, there's a sense now that -- that, you know, that maybe things got a little bit ahead of themselves.

There was a survey last week, Heidi, the "Wall Street Journal" said that the economy could end the recession in August, but with the unemployment rates going higher into the next year...

COLLINS: No kidding, yes. LISOVICZ: And so that was one of the things that sort of pulled in the sentiment.

There's the opening bell. And we are seeing some modest buying right at the open, but like I said, it's kind of a quiet week what we're expecting. And of course, going into the holiday weekend. Heidi?

COLLINS: Yes, yes. All right. Well, you know, we would take a quiet week as long as it's not a really rotten week, that's for sure.

All right. Susan, thank you.

LISOVICZ: You're welcome.

COLLINS: Republicans are stepping up their criticism of House Speaker Nancy Pelosi. They are demanding Pelosi produce evidence to prove her case the CIA lied to her about harsh interrogation techniques.

As CNN's Jim Acosta takes a look at the controversy.

(BEGIN VIDEOTAPE)

PELOSI: I'm only speaking from my own experience, and we were told that it was not being used.

ACOSTA (voice-over): Ever since House Speaker Nancy Pelosi accused the CIA of lying to her about its use of harsh interrogation tactics during the Bush administration...

PELOSI: The CIA was misleading. They mislead us all the time.

ACOSTA: ... republicans have been all too eager to talk about torture.

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: Well, we know there's a dispute about -- between the speaker and the CIA over what she knew and when she knew it.

NEWT GINGRICH, FORMER HOUSE SPEAKER: I don't see how she can serve as speaker if it turns out that she has lied about national security both to the House and to the country.

ACOSTA: Even some democrats worried the speaker misspoke.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I don't think that democrats really want to be at war with the CIA. I love the speaker. She's a great family lady and everything else. I probably wouldn't have done that.

ACOSTA: Pelosi's comments prompted the CIA to release this document showing she and other members of Congress were notified about the agency's use of extreme methods on suspected terrorists. But one democrat mentioned in the document, Bob Graham, says the CIA's records are wrong. A leading Republican says Pelosi must prove her case.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: I think that she ought to either present the evidence or apologize, one or the other.

ACOSTA: But even as republicans are trying to turn the torture tables on democrats, liberals are reaching to turn them back.

KATRINA VANDEN HEUVEL, "THE NATION": The next big controversy is the mounting evidence showing that torture was used to extract evidence to create a link, a false link, between Saddam Hussein and al Qaeda.

ACOSTA: Bush administration critics point to Lawrence Wilkerson, chief of staff of former Secretary of State Colin Powell. On the Web site "The Washington Note," Wilkerson says, "In early 2002, harsh interrogation was not aimed at preempting another terrorist attack on the U.S., but discovering a smoking gun linking Iraq and al Qaeda," a charge Dick Cheney's daughter shot down.

LIZ CHENEY, FORMER DEPUTY ASSISTANT SECRETARY OF STATE FOR NEAR EASTERN AFFAIRS: I think that it's important for us to have all the facts out. This was an important program that saved American lives.

(END VIDEOTAPE)

COLLINS: Jim Acosta joining us now from Washington. Yes. This was the topic all over the Sunday talk shows, right?

ACOSTA: Oh, yes.

COLLINS: So, where does it go next?

ACOSTA: Well, basically, you know, House Speaker Nancy Pelosi released this statement late Friday saying that she really wasn't talking about the CIA, she was talking about the Bush administration misleading her and republicans aren't buying that. We heard all weekend long.

COLLINS: She said CIA.

ACOSTA: Exactly. That's right. That is not what she said at that press conference. However, she released a statement saying that she was really talking about the Bush administration and that is not going over well with republicans. Unfortunately for the republicans right now, they don't have the votes in Congress really to do much of anything, whether that means an investigation on a committee level or removing her from office. So they have very few options.

So at this point, what you're really hearing is a lot of democrats saying OK, you want to talk about Nancy Pelosi? Let's talk about this other stuff, whether or not enhanced interrogation was used to justify a link between al Qaeda and Iraq. So all of this finger- pointing that is going up on the Hill is really renewing calls for this independent truth commission on torture and whether or not the democrats want to push that further is really up to them. What we do know is that the White House is still very much against that idea. But as for Speaker Pelosi, Heidi, I think she's looking forward to that Memorial Day break, that is coming up.

COLLINS: Yes, probably. Quickly, any more word from the CIA on this?

ACOSTA: No. And we are expecting to hear from the director of the CIA Leon Panetta...

COLLINS: Yes.

ACOSTA: A fellow California democrat. He has a speech that he is expected to give later today. It's not anticipated that he will talk about this Pelosi controversy after he thought he put this matter to rest late last week. But the republicans in Washington, they see this as a gift that keeps on giving. Rather than talking about what happened during the Bush administration, they want to talk about Nancy Pelosi right now.

COLLINS: Yes, I think he is supposed to have some Q&A, at least to this point so we'll have to see how that all goes down. All right. Thanks so much. Jim Acosta.

ACOSTA: You bet.

COLLINS: Appreciate it.

"New York Times" columnist Maureen Dowd admits she inadvertently lifted a paragraph from a prominent liberal blogger. The error appeared in her Sunday column. "The Times" fixed the column and gave proper credit to "Talking Points" memo editor Josh Marshall. Dowd claims she never read Marshall's post and heard the line from a friend.

In the original column, Dowd wrote this, "more and more the timeline is raising the question of why, if the torture was to prevent terrorist attacks, it seemed to happen mainly during the period when the Bush crowd was looking for what was essentially political information to justify the invasion of Iraq." Marshall wrote virtually the same thing in his blog last week.

When President Obama and Israeli Prime Minister Benjamin Netanyahu first met, both of them were running for office but as they get ready to meet again, the stakes are higher. They are both in charge now. Let's bring in Paula Hancocks from Jerusalem this morning where these two first shook hands.

Paula, good morning.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Heidi.

Certainly there are some clear differences between Mr. Obama and Mr. Netanyahu but it's possible they could find a middle ground. Now, the one thing that Mr. Netanyahu has not done is to endorse a two- state solution, i.e., an Israeli state next to viable Palestinian state.

Most of the international leaders have done this. Mr. Obama has done this. The Pope has done this. But no one knows yet if Mr. Netanyahu will be forced in doing it by the U.S. president. But the Israel Prime Minister only has got one thing on his mind - Iran. He believes that time is running out and that an Iranian nuclear power in the region is actually a very real threat. And he is going to want to see from Mr. Obama some guarantees that if negotiations don't work and if they don't work within a very specific timeline, then maybe military option would be the next thing to do. Heidi?

COLLINS: How realistic is it, Paula, that these two groups can actually work something out this time?

HANCOCKS: Well, I heard an interesting point this morning from one political analyst I was speaking to. And he said if Mr. Netanyahu is given some firm guarantees on Iran. If he is promised by Mr. Obama that Iran won't become nuclear, if it looks like it's not negotiating in a civilized manner as Mr. Obama wants, then they can have a military operation.

If that happens, this political analyst and others believe that Mr. Netanyahu will give Mr. Obama the world. This is the one thing that he is worried about. If he can have guarantees on Iran, then many analysts believe the rest will be simple.

COLLINS: All right. Our Paula Hancocks joining us this morning live on the very latest between those meetings. Sure do appreciate that, Paula.

Concerns that some of Pakistan's nuclear weapons could fall into the wrong hands now heightened in the U.S. as well. The Senate testimony last week Joint Chiefs Chairman Admiral Mike Mullen actually confirmed Pakistan is expanding its nuclear arsenal and now CNN has learned that U.S. officials are focused on two sites. Kahuta, where Pakistan may have bought additional gas centrifuge technologies so it can make more highly enriched uranium and the other place of concern, Khushab. The latest satellite imagery shows expanded plutonium production.

U.S. officials are further concerned that money being sent from Washington earmarked for the war on terror is helping to bankroll Pakistan's nuclear expansion.

A Taliban spokesman says the militants will fight to their last breath against advancing Pakistani troops. The Pakistan Army saying it is battling militants on the outskirts of one city in the Swat Valley. It has entered two other Taliban-held towns. The fighting has displaced now more than a million Pakistanis.

CNN's Ivan Watson has the latest on the humanitarian crisis.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN CORRESPONDENT (voice-over): Impoverished Pakistanis pushed to the edge. A fraction of the more than one million Pakistanis forced to flee their homes over the last two weeks have ended up here at the Swabi (ph) refugee camp. The Pakistani government and aid organizations are trying to help, providing food, water, tents and medicine.

But living conditions are primitive. The weather, scorching hot. In this make-shift medical clinic, doctors say they've seen hundreds of cases of diarrhea and scabies, a highly contagious skin disease. This week, the United Nations high commissioner for refugees visited the Swabi camp. He wants the international community to do more to help.

ANTONIO GUTIERRES, U.N. HIGH COMMISSIONER FOR REFUGEES: Pakistan cannot do it alone. Without massive support in the international community, Pakistani people, these will become a very dramatic problem and (inaudible).

WATSON: The Pakistani Army says Taliban insurgents are escaping the war zone by mingling with the refugees. During this visit, we witness Pakistani security forces detaining a suspect.

UNIDENTIFIED MALE: This is not something very important. We are security check.

WATSON: The police chief does not want us watching.

UNIDENTIFIED MALE: What are you doing here?

WATSON: Among the refugees, loyalties are divided between Taliban and the Pakistani government. This boy defends the militants. But an older man calls them butchers. He says Taliban fighters beheaded three Pakistani security forces and displayed their bodies in the town market.

(on camera): Why chop their heads off?

(voice-over): "To terrorize the people," he answers.

The people of the camp come running when a government minister in a helicopter pays a visit. He makes a quick tour and then leaves. Officials will have to do more if they want to keep the hordes of refugee on their side in the potentially explosive months to come.

Taliban leaders are already accusing the Pakistani government of stealing international aid money intended for the refugees.

(on camera): The United Nations high commissioner for refugees warns that the displaced population in Pakistan could be a bigger threat to stability in this country than the actual war that's going on in the northwest frontier province. Why? Because you have more than a million people right now homeless, jobless, and their future is entirely uncertain.

Ivan Watson, CNN, Swabi, Pakistan.

(END VIDEOTAPE)

COLLINS: How the fighting in Pakistan is impacting children. A report you won't want to miss coming up in the next hour.

And he vowed to uphold the law when he was a police officer. Today, he goes into court accused of drowning his third wife.

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COLLINS: Here's a look at some headlines from the Hill now. Climate change on the agenda today for both Congress and regulators. The House energy and commerce committee plans to begin work on legislation that for the first time would limit the emissions blamed for global warming. And the EPA have scheduled a public hearing for proposals that could lead to regulating six greenhouse gases under existing law.

President Obama has tapped a political aid to lead the Supreme Court confirmation campaign. Stephanie Cutter will leave the Treasury Department where she has served as one of Secretary Timothy Geithner's most senior advisers during the financial crisis. Cutter will now be the point person for mobilizing public support as President Obama's pick to replace retiring Justice David Souter.

Secretary of State Hillary Clinton will give the commencement address at Barnard College in New York today. Clinton will also receive the Barnard medal of distinction, the schools' highest honor. Barnard is an independent women's college affiliated with Columbia University. Clinton also spoke at New York University's graduation ceremony last week. After she leaves New York, Clinton will head back to D.C. for meetings with Israeli officials.

An explosion rips through a Delaware oil refinery. The blast setting off a fire. You can see it there. We'll tell you what happened to the people in the plant and those on the outside.

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COLLINS: Hey, look at this! Dow Jones industrials average up by 113 points right now, up to 115. If we keep looking at it, maybe it will keep going up. Now resting at 83 right now. We will continue to watch the Dow Jones industrial average, I think the Nasdaq up about 15 points. Oh, 20 now I'm hearing. So we'll keep our eyes on those numbers for you.

A former police officer being arraigned in an Illinois courtroom next hour on murder charges. Drew Peterson is accused in the 2004 drowning death of his third wife, Kathleen Savio. Police still consider him a suspect in the 2007 disappearance of his fourth wife, Stacy Peterson.

An oil refinery explosion sets off a fire at the plant. Flames lit up the sky at the Semico facility near the Delaware-Pennsylvania state line. The initial blast last night rattled nearby homes but there are no injuries or even evacuations. The fire is now contained and all the plant's workers have been accounted for.

Rob Marciano is joining us now from the Severe Weather Center.

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COLLINS: You may not realize it, but now, maybe the right time to score some great deals and save some cash. We'll tell you how coming up.

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COLLINS: An awful lot going on this morning. We want to get to our CNN crews. They're working hard to bring it all to you. Let's check in beginning now with Jill Dougherty at the White House. Hey, Jill.

DOUGHERTY: President Obama meets with Israeli Prime Minister Benjamin Netanyahu. Can they see eye to eye on peace? I'll have that story at the top of the hour.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'm Elizabeth Cohen. A court forces a Minnesota couple to give their son chemo. I'll have story at the top of the hour.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Star at the Pentagon. Is Pakistan expanding its nuclear weapons? I'll have that story in the next hour.

COLLINS: All right, guys. Thanks so much. And also we're going to be introducing you to some new college graduates. World War II derailed their first try at a sheep skin. But the mere passage of time wasn't going to win this battle.

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COLLINS: We all know money is tight these days. But it turns out that there may never be a better time to actually score a sweet deal and save some cash. CNN personal finance editor Gerri Willis joining us now and she says, hey, you've got the power. GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right

COLLINS: So what's the deal, Gerri.

WILLIS: That's right, Heidi, you know, let's start with getting a car, OK? We're going to get it not just below sticker or invoice but below dealer cost.

COLLINS: Wow.

WILLIS: You don't have to buy a GM or a Chrysler to do it. Unheard of, well not anymore. Transaction prices are down. Incentives and cash back offers are on the rise. And according to truedatecar.com, last year dealers sold 21 percent of 2009 models for less than what they paid for them. This year that number may go up to 25 percent.

Start by arming yourself with as much info as possible before you head to the car lot. Edmunds.com can tell you the true value of the car you're interested in. It's what they call a fair price based on what other consumers are paying. Vehicle inventory, dealer incentives, sales conditions, even the economy.

Now, knowing all this info before you go in will put you in the driver's seat when it comes to negotiations. But you have to be prepared, too, to walk away if you're still not seeing eye to eye with the salesman. Use all your leverage.

COLLINS: That's some pretty good information. I mean, a lot of people think I'm walking into a car dealership, I'm going to get ripped off no matter what.

WILLIS: Right.

COLLINS: What else is out there, Gerri?

WILLIS: Well, you know, you've seen all those big banks. They've got billions from TARP, your tax dollars at work there. You don't have to give them another dime. Cut your bank fees by avoiding all out of network ATMs and watch out for overdraft fees that can be as high as 40 bucks.

Now, this is especially important right now since so many more people are using debit cars. You can earn multiple overdraft fees in a single day if you don't stay on top of that balance. Watch out too for account maintenance fees, teller fees, sometimes charged to folks who use human tellers instead of ATMs.

And remember, you can always vote with your feet and move to a credit union, Heidi.

COLLINS: Al right. But what about haggling? Because, you know, I think of that a lot, too, when I think about buying car. Does that still work?

WILLIS: Haggling works? Haggling is great. Look, a new poll out this week is part of the special rebuild your finances issue of "Consumer Reports." It found that more than two-thirds of Americans have haggled to secure a better deal in the last six months. So here are some tips to do it well. OK. Check this out. Be patient and nice. Don't demand a discount. That rarely works.

Avoid an audience. Because if everyone else is asking for a deal, chances are you won't get yours. Time your haggle late in the month when salespeople are trying to make quota. Also do it early in the morning or in the evening when clerks have more time to talk.

And here's a big tip here. Offer to pay cash. Merchants don't like to pay transaction fees to credit card companies. It can be anywhere from two percent to eight percent of the value of the item. So this might be a great place to get them to cut you some slack.

COLLINS: Yes, if you can do it. Boy, that would be excellent.

WILLIS: My favorite words here, Heidi, are I don't want to pay that.

COLLINS: Love it. WILLIS: Yes.

COLLINS: I'm going to start doing that with everything. Clothes, food, everything.

WILLIS: Good. Let me know how that go.

COLLINS: Yes. All right. Gerri, sure do appreciate it. Thank you.

WILLIS: My pleasure.

COLLINS: Worshippers taking from the church collection plate. It started as a simple offering from a church in tough times. Now it's a help for many people in need. A Texas pastor told his congregation to take money from the collection plate if they needed it. That Sunday the Cross Timbers community church took in more donations than ever before. Now the church had gone beyond its members to help others in its community.

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TOBY SLOUGH, PASTOR: We've given single moms and widows $100 gifts. We've taken $200,000 and spread it out to organizations for local to missions better feeding and clothing hungry people in these tough times. We've paid utility bills for members of our church that are unemployed or underemployed.

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COLLINS: The pastor said his favorite giveaway came three weeks ago. The church gave 1,400 families $50 each and told them to give it to someone else.

Checking stories happening around the world now. An assistant middle school principal is the first person in New York City to die from swine flu complications. 55-year-old Mitchell Wiener died last night at Flushing Hospital. He's the sixth person in the United States whose death has been linked to H1N1.

Prosecutors seeking prison time for a mother they say schemed over the Internet to humiliate a 13-year-old girl. The girl, a 13- year-old neighbor of Lori Drews, killed herself after the alleged hoax on MySpace. Drew is to be sentenced today on three misdemeanor counts.

And defense attorneys could rest their case today in the penalty phase of Steven Green's trial. The former soldier faces a possible death sentence for the rape and murder of an Iraqi teenager and the shooting of her family.

Crisis in the Middle East. The search for middle ground. This hour at the White House, President Obama focuses a key ally on a growing issue. In fact, Israeli leader Benjamin Netanyahu may not budge on several critical issues pushed by the Obama White House. What does it all mean? Let's get a closer look from foreign affairs correspondent Jill Dougherty now at the White House. Jill, good morning.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Good morning, Heidi. Well, maybe a little bit of a schedule to start off with. The two leaders are scheduled to meet at the bottom of the hour, in about a half an hour. They'll be meeting privately or one on one, and then an hour after that they will open it up to other senior aides from both sides.

It's a very important meeting. Because, after all, this is the first official meeting between Barack Obama as president and the new Israeli Prime Minister, Benjamin Netanyahu. And they come at this from different perspectives especially on several key issues. One of those would have to be the -