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Strauss Kahn Charges Dismissed; Libyan Rebels Say They've Taken Moammar Gadhafi's Compound; Interview With U.S. Ambassador to the United Nations Susan Rice About Situation in Libya; Libyan Revolution: View From U.S., Rebels Capture Gadhafi Compound

Aired August 23, 2011 - 11:58   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: I want to bring another breaking news story that we're following here to our audience. We are going to take a look at some live pictures that are out of New York City, the courthouse there.

We understand that now that the judge has dismissed the charges, the charges of sexual assault against Dominique Strauss-Kahn. You may recall he is the former head of the IMF and he was accused by a hotel maid of sexual assault inside of the hotel room. There were questions about her credibility, about her story, and that was presented. The district attorney's office presenting that to the judge, and the judge has accepted that argument and has now dismissed the charges against Dominique Strauss-Kahn.

Are we looking, are these live pictures here? This is tape.

This is tape of Dominique Strauss-Kahn and his wife at his side as they had entered the courthouse. This was from earlier today. This has been a worldwide case, focus has been on this very powerful man and the legal system, the charges against him here in this country.

We're now looking at live pictures, I'm told, outside of the courthouse.

But quite an interesting tale when you think about it, Michael, because really, this has been the picture that's been portrayed of a very powerful man, someone who could have been and was to run for president of France, who had been accused of sexual assault by an immigrant, a hotel maid here in this country, and his reputation certainly was taken through the mud.

MICHAEL HOLMES, CNN INTERNATIONAL ANCHOR: He had a reputation before this happened, but yes.

MALVEAUX: But his reputation was questioned, and he was taken in handcuffs at one point. He was held. And then he was under house arrest. And from the very beginning, he said that he was innocent, but in this judicial system, in this country, he was taken through that perp walk. He was charged, and it was the defense who claimed that Nafi Diallo was telling the truth.

HOLMES: He still faces that civil case, of course. MALVEAUX: That is right. She's --

HOLMES: I understand we have got Sara Sidner back on the line.

And I want to talk to you, Sara. I'm going to tell people, too, that Al Jazeera has been reporting they have had a correspondent inside that compound, and that resistance has now ended.

What are you hearing where you are, very close by?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: What we are hearing now is that they have gotten inside the compound, Bab al- Aziziya, that they have gone into the buildings, they have gone into Gadhafi's building, that they could even swim in the swimming pool, is what we're hearing from them. That, we reported just a few minutes ago.

Let me let you talk to a gentleman who has more information, Ahmed Shibani (ph). He was showing us just moments ago -- he was showing us files. They were files of Saif al-Islam, Moammar Gadhafi's son, and Saif's wife.

Tell me what you saw the rebels bring out. Is this fight over, even though we are still hearing blasts from Bab al-Aziziya?

AHMED SHIBANI (ph), MEDICAL STUDENT: Yes, I think it's over. In Bab al-Aziziya it's all over.

SIDNER: OK. Can you tell me why this day is important? What is so significant about Bab al-Aziziya? Have you found any of the Gadhafi family members inside that compound?

SHIBANI: No. They haven't found anyone yet.

SIDNER: OK.

SHIBANI: Moammar Gadhafi, his family hasn't been found.

SIDNER: And are they in full control of Bab al-Aziziya?

SHIBANI: Yes. They are in full control of Bab al-Aziziya. And they even burned Gadhafi's historic building.

SIDNER: So they burned Gadhafi's historic building in Bab al- Aziziya. We were seeing some smoke and we're still seeing some smoke from that area.

Why is this day important to you? What does this day mean to you?

SHIBANI: It means I'm free. I can get back to my normal life.

HOLMES: Sara, I don't if you can hear me. Can you ask if he was in there, what was resistance like?

SIDNER: Do you have any idea -- I know you weren't down there in the fight, but what was this fight like? Are they telling you what this fight was like inside Bab al-Aziziya?

SHIBANI: They haven't told me how the fight was. But they said it's finished.

SIDNER: OK.

Everyone here said the fight in Bab al-Aziziya is finished. What you're hearing when you hear those blasts are celebratory blasts and gunfire. They are going through building to building now.

Ahmed (ph), thank you so much for joining us.

Ahmed (ph) is a fourth year medical student who says his life has now changed, he is now free. His family is now free.

What we're hearing in this neighborhood, the neighborhood right next to Bab al-Aziziya, is that the fight is over, but we are still hearing blasts. They say those are celebrations, those are not fighting -- those are not a fight between Gadhafi forces.

I know that they have taken some of the files out of that home. They have taken some of the guns. They are bringing out guns that they got out of Bab al-Aziziya from Gadhafi forces there.

They have detained some Gadhafi forces, according to the rebels here who have just come out of Bab al-Aziziya, and they have also gotten some of their equipment such as cars and that sort of thing out of Bab al-Aziziya. So, a major, major victory for the rebels today.

MALVEAUX: Sara, can you tell us who you're surrounded by there? Can you give us a sense of the neighborhood?

I'm assuming that those are folks who are celebrating, those are the folks who are supporting the rebels. It might be hard to tell if there are Gadhafi loyalists among them. In Tripoli, we know it was the last holdout. But do you have a sense of who's there in the community?

SIDNER: Yes. Yes.

This is what we're seeing here in the community. We are seeing children, so obviously there are civilians here in this community. Obviously, these children are the children of supporters of the rebel cause.

Many of the people in this neighborhood that are still here certainly are showing their support for the rebels. They have been angry with the Gadhafi regime.

Those behind me are people who live here in this neighborhood. There's a clinic just down the road where there are nurses who have been here during the whole firefight, scared for their lives, but they said they are going to stay and take care of anyone who is injured. They have been doing that.

We know that civilians have been injured in this fight in and around Bab al-Aziziya, that they have been coming back to this area to get some kind of treatment. They do have enough to treat the people that they have in there at this point in time.

But, so far, some of these little kids, we saw this gentleman here standing at his door and holding a gun earlier today, trying to protect his property. The people here that are surrounding me, very happy with what's happened today.

HOLMES: Sara, it's interesting. I imagine it's almost natural that a lot of those people that we used to see dancing and cheering for Moammar Gadhafi inside Green Square on state television would have just sort of changed sides right now, I imagine, and some would have felt that they were pressured to support Gadhafi.

Are you getting any sort of sense that -- are you being told by people that they felt that they had to look like they supported Gadhafi? There are going to be those who still support him, of course.

SIDNER: Of course. We are seeing that today.

When you saw people leaving Tripoli, they got very scared. We saw lots of residents just running out of the city center today because they were hearing these blasts. They feared for their lives, and they wanted to get out of the city.

These folks had stayed behind, these folks have supported the rebels. These folks are happy to be on camera now.

You know, I can tell you that just 24 hours ago, there were residents that did not want us to show their faces. They would cover their face as soon as we turned the camera towards them. Now, obviously, they are not afraid to show their faces anymore because they feel like this is proof that Moammar Gadhafi no longer has control of Libya or of Tripoli, that he is a man that is now on the run, not a man in control of this country anymore.

HOLMES: Yes. Sara, we just want to point out to viewers on the right-hand side of their screen, they're looking at pictures from Al Jazeera. This is the entrance to the compound, and you can see the rebels entering. And this is what we were talking about before, where there are wide open expanses, multiple buildings, the rebels pouring in, in those ubiquitous pickup trucks with heavy weapons on the back.

MALVEAUX: You can see some of those -- hard to make out, but some of those rebels who had guns in their hands, who were armed when they were going into the compound there. But it certainly looked like they had a wide space to work with and enter.

HOLMES: Well, yes.

MALVEAUX: And it didn't even look like they had resistance at that point, at least from that vantage point.

HOLMES: Yes. And again, when we saw that animation of the compound, you can see that open area, and there's buildings that are skirting around it as well. And that's what they're going to have to clear.

Those pickup trucks, I saw thousands of them when I was there up until last week. And they are mounted with 14.5 millimeter anti- aircraft guns. I saw them mounted with rockets. I saw one pickup truck that had the top of the turret of a tank on it. And these sort of homemade heavy weapons that have really knocked down Moammar Gadhafi's army.

MALVEAUX: And Michael, you and I were talking before -- you were there with the rebels just a couple weeks ago -- about communications and how difficult that is, or maybe even primitive, the method of communication. But how are these rebels talking to each other, how are they receiving messages? How do we know that what we are watching here, how significant it is if it's coming from that rebel force?

HOLMES: Well, I was with western rebels who came down from the Nafusa western mountains, and their command and control was pretty good. The senior commanders had satellite phones, they were able to communicate with Benghazi and other places.

And on the ground, though, and particularly the battle for Bi'r al Ghanam, which was fought on three separate fronts, the communication was with walkie-talkies, the types of walkie-talkies you can walk into a Radio Shack and buy. And that was their main means, it was our main means of communication in the field as well. And that's how they will be communicating around the city at the moment.

The other thing that's worth pointing out when we're looking at this urban warfare situation, the rebels that we were with, most of them were from the western mountains. Others were not.

They were from coastal cities like Zawiya, and some of them were from Tripoli, the Tripoli brigade. These were people who fled out of Tripoli when this all began, joined up with rebel forces.

They have local knowledge. This is not like a strange army going into an urban warfare situation in a strange city. A lot of these rebels are from Tripoli. They know the ground as well as Gadhafi's forces do, and so they are helping on a local level.

The other thing was there were sleeper cells inside Tripoli, cells of rebels who had been there from the beginning. Weapons were distributed to them, they laid low until the signal was given. And when the rebels entered Tripoli, these sleeper cells in various suburbs around the city came out on a signal from mosques, normally, and they joined the fight. They also, of course, bring that local knowledge to bear.

MALVEAUX: I want to bring back in Secretary Cohen, if you would, former secretary of defense William Cohen, who is with us.

If Moammar Gadhafi is not in this compound, if he's hiding somewhere, how significant is it that the compound perhaps has been taken over? I mean, can he still survive? Can this regime survive if he is hiding out somewhere else and perhaps calling the shots? WILLIAM COHEN, FMR. DEFENSE SECRETARY: I think psychologically, it's very damaging to him. He can continue to run from place to place, but eventually, he's going to be caught.

He's not going to be going gently into that good night. And so I think his future is quite dim, however long it's going to take.

I wanted to just make a comment about the observation as to switch briefly to the dismissal of the charges against Mr. Strauss- Kahn, and to juxtapose that against the scene that we are now seeing. And I must say, what a joy -- what an exciting thing it was to see the smiles and the joy on the faces of the people who are being liberated in the city of Tripoli at this point.

But the juxtaposition was quite jarring in the sense that we have seen the rule of law in the United States, in New York City, being exemplified by the dismissal of charges, as compared to the law of rule, which has been the case for the last 40 or more years in Libya. So this is going to be an important message as we move from the law of rule, dictatorial rule, to hopefully a society in which there is the rule of law, and that we'll see this kind of process of reconciliation, establishment of rules of behavior for the commercial world, investment opportunities, et cetera.

And I think that was what struck me as you switched from New York City to Tripoli. It was really quite a jarring sight.

HOLMES: You raise a couple of interesting points there that need to be considered in the hours and days ahead, Secretary. The first one is, as we saw in Baghdad in the days and hours after it fell, we saw rule of law completely collapse. And I remember being at the Palestine hotel and looking at a city on fire as the looting went out of control, the rule of law collapsed. That's going to be very important in the days ahead.

MALVEAUX: I want to bring in our colleague, Wolf Blitzer, who is now interviewing -- he's talking to U.S. Ambassador to the United Nations, Susan Rice. Let's interrupt, if we can.

WOLF BLITZER, CNN ANCHOR: Suzanne, thanks very much.

I want to bring in the United States ambassador to the United Nations, Ambassador Susan Rice. She's joining us from Rome now.

Ambassador, thanks very much.

We're being seen right now on CNN and CNN International, around the world.

Give us a sense, Ambassador, as you can, based on all the information you have, where the situation in Libya stands right now.

SUSAN RICE, U.S. AMBASSADOR TO UNITED NATIONS: Well, Wolf, I think it's quite clear that the situation remains fluid, that fighting is still going on in parts of Tripoli and elsewhere in the country. The rebels have made enormous progress over the last several days. And in our judgment, the tipping point has been reached where the days of Gadhafi are numbered and the regime is on its last legs.

But it's still the case that there is fighting ongoing, including reports that we have all seen of the rebels having recently breached the Gadhafi compound. We don't know what's going on inside precisely, but this remains still an active battle in parts of Tripoli.

BLITZER: Is it still the U.S. government's estimate, belief that Moammar Gadhafi is hiding out some place inside Libya, that he has not left the country?

RICE: Wolf, obviously we are not able to confirm his location with precision, but there are many varying reports. But I think the preponderance of reporting suggests that he's still likely inside of Libya.

BLITZER: And you've had conversations -- when I say "you," I mean U.S. officials, maybe including yourself -- with representatives of the Transitional National Council. And what have you said to them, if in fact they captured Moammar Gadhafi alive?

RICE: Well, we all have been in contact with leaders of the TNC. You heard the chairman, Mr. Jalil, yesterday say that their intent, were they to capture Gadhafi, is to bring him to justice through a legal process.

Our view is that that is an appropriate step. Our aim and I think that very much the TNC's aim is for a transition to get under way swiftly that is inclusive, that is just, and that fulfills the Libyan people's aspirations for a democratic future.

And so we will -- have been working with them closely as they plan aspects of their transition, we will continue to do so. And obviously, these are all choices that the Libyan people will ultimately have to make for themselves. But they have been clear and we have been clear that Gadhafi must be held accountable and must be brought to justice, as must his son Saif and Sanusi, the intelligence chief, who has always been indicted by the International Criminal Court. All three.

BLITZER: Which raises the question from the U.S. government's perspective, Ambassador Rice, would you prefer that these three individuals be tried inside Libya or be brought to the Netherlands and be tried for war crimes, crimes against humanity, at the International Criminal Court?

RICE: Wolf, really, this is something that must be decided not by the United States or any other government, but by the people of Libya and by the interim transitional government that we expect will soon be constituted. I think there are many difficult issues of justice and accountability and reconciliation that the Libyans are going to have to work through as they build an inclusive government that's responsive to the will of the people, that allows democracy to evolve out of what you know is a situation where there are no state institutions.

So I think we need to give them an opportunity to discuss and debate that amongst themselves and decide whether to send him, if they can, to the International Criminal Court, or to deal with them through some domestic justice process.

BLITZER: As you know, the credibility of the Transitional National Council has been questioned. They said they had Mohammed Gadhafi, one of the sons of Moammar Gadhafi, in custody, but then he escaped. Then Saif al-Islam Gadhafi, they said they had him, and he showed up at that Rixos Hotel with all the international journalists last night.

Do you believe what these representatives of this Transitional National Council are saying? Because their credibility is right now sort of weak.

RICE: Well, Wolf, we have definitely found them to be credible and responsible interlocutors. We have been in close contact with the leadership in Benghazi. But clearly, in a situation as fluid as this, that's evolving rapidly, there's going to be confusion, there is going to be misinformation. And those that are on the ground in Tripoli may or may not be in full and timely communication with leadership outside of Tripoli. So I don't find this particularly surprising, but generally speaking, we have found in all of our engagements with the TNC that their leadership is reliable, is principled, and is working to do the right things.

BLITZER: How worried are you -- when I say "you," I again mean the United States government -- about the stockpile of chemical weapons that Gadhafi's military apparently still has, sarin gas, mustard gas, some of these other chemical weapons? Is this a major concern, securing these storage facilities?

RICE: It's something we have been watching from the very beginning of the conflict in Libya, Wolf. We continue to watch it carefully. And at this stage, we have not seen immediate cause for concern, but we will keep a close eye on that throughout.

BLITZER: As you know, Ambassador, a lot of us here at CNN were very worried about the journalists, the 35 or so journalists at the Rixos Hotel in Tripoli right now, including our own Matthew Chance. Is the U.S. government doing anything to help free these journalists? Because, in effect, they are being held, almost held hostage, I should say, inside that compound at that hotel.

RICE: We're very concerned about the situation at the Rixos and we're monitoring it closely. Wolf, as you know, what we have done, along with our NATO allies, has been precisely limited to an air campaign, and what we can gather in terms of information from aerial assets.

We'll continue to do what we can on the protection of civilians mission, which is of course the purpose of NATO's activities. It's the reason why NATO has been involved in this from the start, and it has saved hundreds of thousands of lives in the east, at the outset of the conflict. And we will do what we can from the position that we have, and from our aerial assets, to try to protect those in the Rixos Hotel and elsewhere. BLITZER: So I just want to be precise when you say hundreds of thousands of lives. You still believe that if the United Nations Security Council had not passed that resolution imposing a no-fly zone over Libya, Gadhafi's forces would have gone into Benghazi and killed hundreds of thousands of people? Is that what you're saying, Ambassador?

RICE: Absolutely, Wolf. There's no question about it.

Had the Security Council not acted, had the United States and NATO not acted, Gadhafi would have been able to do and would have done what he pledged to do, which is to go house to house in Benghazi and kill his people like rats. That's his language. In fact, language he's continued to use over the last several days.

But the fact that the Security Council acted, the United States led, that NATO was very much engaged, and we were able to, within days, hand off leadership of the operation to NATO, ensured that those that were at immediate risk -- and we mean hours, 24, 48 hours from being overrun -- in the city of Benghazi, a city of 700,000 people, were saved. And time was created and space created as Gadhafi's forces were halted in their tracks for the opposition to build its capacity, to protect itself, and to advance the Libyan people's desire for a stable, democratic future free of the dictator, Moammar Gadhafi.

BLITZER: Ambassador Rice, at what point does the United States government unfreeze the $33 billion or $35 billion in Libyan assets being held here in the United States?

RICE: Well, Wolf, since the United States recognized the Transitional National Council as the interim -- as an authority pending the establishment of a transitional interim government, we have been working through the legal and diplomatic hurdles to begin the process of unfreezing the assets. I'm very much involved in that, in our efforts in New York, and I can tell you that it's a complicated process and it's been somewhat time-consuming. But we're continuing to work on it, and I'm confident that we're getting close to the stage where we'll be able to release from the U.S. side the first tranche of assets and more thereafter.

BLITZER: And do you want to be precise? When do you think that first portion might be released? Are we talking within days?

RICE: I hope within days, Wolf, yes.

BLITZER: And there's a partner on the other side that's qualified, responsible, reliable, that can take these billions of dollars and use it to help the Libyan people?

RICE: Yes. And, in fact, we have put forward an initial tranche of assets that we anticipate unfreezing as a first stage, some of which will go directly to humanitarian organizations, some of which would go to the TNC, some of which would help meet the needs of fuel for humanitarian and civilian purposes.

So it's a broad-based process. And we have been very careful in the course of working through this procedure to put in place safeguards so that we can be confident and the TNC can be confident that the assets will be used for the purposes they were intended.

BLITZER: One final question, Ambassador, before I let you go. I know you have a lot of work to do.

If you're President Bashar al-Assad, in Damascus, watching what's happening to Moammar Gadhafi in Tripoli right now, what message should you learn from this?

RICE: He should take a very clear message from what has happened in Libya, which is that you cannot use force against your own people and expect your people to take it lying down. The Libyan people have built this opposition from scratch. They have made enormous gains. And as a consequence, we are seeing the very last hours or days of the Gadhafi regime.

In Syria, as President Obama has said, Assad had a choice. He could lead a transition that was credible and peaceful, or he could get out of the way. He has not led such a transition, and we have been very clear that it's time for him to get out of the way. But the people of Syria will chart their own course.

We are applying diplomatic and economic pressure. The Syrian people have been very clear they don't want any foreign military intervention. But we will clamp down as hard as we can diplomatically and economically, through sanctions that we've already imposed on a national basis. We are beginning the discussion in the Security Council of sanctions that can be imposed on a global basis, and I think Assad needs to know that he is on a dangerous and immoral course that will have significant consequences for his leadership.

BLITZER: Ambassador Susan Rice, the United States ambassador to the United Nations.

Ambassador, thanks very much for joining us.

RICE: Good to be with you, Wolf. Thank you.

BLITZER: Thank you, and good luck to you. Good luck to the entire region, North Africa and the Middle East.

That's it for me. Let's go back to the CNN Center -- Suzanne.

MALVEAUX: Thank you, Wolf.

We're going to continue to follow developments from Libya. We're going to have more live reports from the ground with the very latest.

We are back after this quick break.

(COMMERCIAL BREAK)

MALVEAUX: Libyan-Americans are watching history unfold in their homeland with excitement, anticipation, as well as some anxiety.

Hafed Al Ghwell, he's a Libyan-American activist, and he's joining us from Washington.

And I understand that you've been up all night. So thank you for joining us without any sleep here. But you've been watching things unfold here today.

What is your reaction when you see how close the rebels are to capturing Gadhafi's compound?

HAFED AL GHWELL, LIBYAN-AMERICAN ACTIVIST: Well, you know, this has been our story for the last three, four days. We are caught between hope and worry, hope for our country and our people there, as they are actually excited themselves when I speak to them. And also worrying about their safety, that these last few hours and days hopefully will pass quickly, and with a minimum amount of casualties.

MALVEAUX: Give us a sense of what this means to you personally. I understand that you talked to your mother just last night, who is in Tripoli. Is that right?

GHWELL: Yes, correct. I talked to them several times over the last few days. The last call was last night. Today, unfortunately, all phones are down.

It is really heartwarming to hear her hope for what's going on, but also, her hope that her son, myself, who has been away for 30 years, will come back home soon. I think her feelings are probably multiplied across the country with endless numbers of mothers.

Libyans have suffered in all forms of ways. Those who were not tortured or imprisoned were forced like myself to live our lives outside.

So, you know, it is really a hopeful time. I never experienced it before. At times, standing up against Gadhafi here in the United States, as few were able to do publicly, was a very lonely business, especially when we saw our own government here in the U.S. actually embracing Gadhafi in the last few years. But today, we feel vindicated, we feel hopeful. It is an opportunity that's full of risk, but at least it is the first time that we have a serious opportunity to build a real country.

MALVEAUX: Hafed, you left when you were just a teenager, I believe, in the 1980s.

GHWELL: Yes.

MALVEAUX: Do you plan on going back to your country?

GHWELL: As soon as I can. Not necessarily to live. You know, I built my professional life here in Washington. This is hometown for me now. But at least to go and visit on regular basis. I cannot wait to actually see my childhood home and be there and see my childhood friends. Our families, as you can expect, are huge families. I have something -- over 70 first cousins from both sides of my family. I have friends that I grew up with when I was a child. I remember a beautiful city to grow up in. My mother, whom I have seen a few times outside in Europe, and my father and my sisters, you know, some of my nieces and nephews, I have never seen. Some of my younger cousins, I have never seen.

So it's an emotional time but it is extraordinary hopeful time. We are both aware of our risks and our dreams, and I think now that decision is in the hands of Libyans after all, and they need to think very carefully about the future and what kind of country they want.

MALVEAUX: Afed, thank you so much for your perspective. Obviously, looking forward to a very large family reunion when that time comes for you and for all of your relatives. Challah.

GHWELL: Thank you.

HOLMES: There's a lot, lot of ex-pats. Lot of Libyan ex-pats, you know, when I was there with the rebels, I met so many people who had traveled from outside the country back just for this fight.

I met a 17-year-old boy from Manchester who spoke better English than Arabic. He was born in Manchester, but his family was Libyan, came back, three or four hours of training on an AK-47, he was on the front line. It was extraordinary.

I met American medical students, biology student, one from Purdue, one from George Washington University, who spoke English without an accent, with a pure American accent. Back there on the front lines fighting with rebel forces.

There is a huge Libyan diaspora that has come back home to carry out this fight, which is interesting. We still have this picture up from Reuters. Let's just run it for a bit and see what we can hear. We have been hearing reports that there is still sporadic exchanges of gunfire inside the Gadhafi compound. Let's just listen in for a second.

(VIDEO CLIP PLAYS)

HOLMES: Difficult to hear over the sound of prayer from the mosques there, the minarets. But there was some small arms fire there in the background.

One imagines the size of this compound, there will be pockets of resistance in various buildings, in various rooms in buildings. There are Gadhafi loyalists inside there who may not want to give up or may not know it's time to give up yet. So, I would imagine you will be hearing that for quite some time.

Jim Clancy is standing by. Jim, you have been watching this. You're a man who knows the region. You're a man who has interviewed Gadhafi. Your thoughts as you watch this unfold?

JIM CLANCY, CNN INTERNATIONAL CORRESPONDENT: Well, there's a lot of things to talk about. I think that you look at this from different perspectives. Let me give you a little bit of a different perspective. Take a look here at Tony Maddox, the president of CNN and CNN International here, who directs the coverage. Lot of concern right now about our people that are on the ground, about Sara Sidner in talking to her. She's moving in Tripoli right now. She's in a car making her way over to that compound.

But people concerned, too, about Matthew Chance, Jemanic Perasia (ph) and so many other people that are really caught up in all of this. And this is the way a news organization lives during these periods of time when we're covering stories like this one that are breaking. So, that's one aspect of it.

I have all along thought they were fighting here a battle over the momentum in all of this. Yes, it has been in the rebels' side. But after the fiasco of the alleged capture of Saif al Gadhafi and then you had him come down on the streets less than 24 hours ago, about 12 hours ago and declare that we have broken the backs of the rebels -- well, what we just saw here is no, they have not.

How big is that victory there? Hard to tell. How much resistance was there, how many fighters did they capture? Some say there was very little or no resistance, and they didn't capture any.

But there are tunnels underneath that compound. Do they lead to the hotel where the journalists are really being held -- not as hostages, perhaps, at this moment, but certainly being held captive. They are not allowed to leave. It is not safe for them to do that.

What we have witnessed here over the last two hours as smoke smeared the skyline in Tripoli, it is really urban warfare. It's a battle for the momentum of whether or not this rebel group has the capacity to overthrow Moammar Gadhafi. Back to you.

HOLMES: All right. Good on you, Jim. Jim Clancy there down at our International desk as the suits are watching what's going on down there.

Yes, there is a lot of concern for people out in the field. Tony Maddox has always been someone who gives you his cell phone number if you're out there on the front, and it's always been a bit like that. You know it is a very nervous time for journalists and Jim made a point there. It has long been rumored that there is a tunnel that runs from that compound to the Rixos Hotel. And among the many rumors of where is Gadhafi, a lot of people thought he was at that hotel for much of this war because that's where the journalists are, safest building in town.

MALVEAUX: Michael, I'm hearing now, I understand that our own Sara Sidner is inside the Gadhafi compound on the phone. Sara, can you hear us?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT (on the phone0: Yes, I can hear you loud and clear.

MALVEUAX: Just tell us where you are, what you're seeing. SIDNER: I'm sorry?

MALVEAUX: Tell us where you are, what you're seeing, what you're hearing. I understand you are actually inside Gadhafi's compound?

SIDNER: I'm inside the compound. (INAUDIBLE) People say they have not found anybody, any of the Gadhafi family members, in this compound. (INAUDIBLE) However, they are seeing rebels everywhere. They have knocked down the walls, they have knocked down buildings, they buildings on fire. There have been loud blasts, boom, lots of celebratory gunfire here. (AUDIO GAP) -- excited are out today.

This is an important day, not only for the rebels to show that they have large control of this city, but psychologically, it's extremely important because this represents the Gadhafi regime. And more than anything, it represents the Gadhafi regime in the sense this is where people believe that he was holed up for many, many, many years. They have not found him or his family yet, but they have certainly gotten into that compound. And it's a big historic day here in the capital, Tripoli, and for the rebels and the entire country.

MALVEAUX: Sara, are people able to just walk now into this compound? Is it difficult to get inside, or is this now open?

SIDNER: I'm literally walking inside. I mean, I'm inside the compound, walking around looking about. Some of them look like (AUDIO GAP) from what I'm seeing right now. I'm going in a little further to try and see more. It's surrounded by a large wall that's been painted green and cream and light brown.

We are walking through the area. I'm looking at what appears to be damage right now inside of the compound. I see a lot of smoke coming from one of the buildings, people running out of the building with lots of ammunition. I see tanks. I see (INAUDIBLE). They have massive guns on those vehicles. Some vehicles belonging to the rebels, some of the vehicles belonging to the Gadhafi regime. (AUDIO GAP)

It looks like they are taking whatever weapons and ammunition that were inside (INAUDIBLE) from Gadhafi's forces. A major victory for the rebels today. And (INAUDIBLE) see that the Gadhafi regime has been weakened beyond repair.

MALVEAUX: Sara, is it safe to say there is no longer fighting that's taking place inside the compound, that the fighting has ended?

SIDNER: It is safe to say there is no more fighting that we can see from our vantage point. We do know people have been injured. (INAUDIBLE) But we are not hearing those huge blasts and booms that we were hearing earlier today. (INAUDIBLE) There is fire in other parts of the compound as well. The biggest worry today, the biggest worry is (INAUDIBLE).

MALVEAUX: I understand -- to the left on the screen, we are now watching pictures from Al-Jazeera. Also of the compound, from a different vantage point. It's pulling out. You can see kind of a wide shot.

HOLMES: Just before that panned, the building, you could see what looked like heavy pock marking by heavy-caliber weapons as well. If they pan back to the right, you can see there also damage done. That looks like that's aerial bombing, I would speculate. That does not look like it's happened from inside the building.

And who knows what NATO jets did before this attack? And you know, it was interesting - sorry, go ahead.

MALVEAUX: Just being there and your experience with the rebels, what do you make of what's taking place, kind of the back and forth? We've seen people walking and some of them running back and forth. Give us a sense in your experience with the rebels --

HOLMES: It's a good point, actually. You do see this sort of very informal looking, if this was a military operation you would be seeing guys going from building to building, hugging walls and the like, and calling each other in an organized way.

These guys are not pros. And let's remember this. The two battles that I covered, one of the battlefield commanders in the first battle was a school teacher. The second guy was an X-ray technician. There are former Gadhafi army soldiers involved with the rebels, of course, those who defected or went with the rebels from the start. But most of these guys are your neighbors.

And that's one of the key things about this uprising, it was a popular uprising by the people. And the vast majority, I talked to bulldozer drivers and school teachers and people who worked in stores who were carrying guns and carrying these weapons. When you see these guys wandering around, no, this is not a military, but it has become one. These guys have become battle-hardened over -- the young guy there in front, we saw a lot of that, too. Sixteen, 17-year-olds.

I remember driving down to the front line of the battle, and the pickup trucks screaming by with heavy weapons and loaded with fighters. And there were fighters along the side of the road hitchhiking to the front, literally hitchhiking, trying to wave us down to catch a ride to the front. And you would see groups of five or six of them, and maybe three of them would have a weapon. The others were going to the front without a weapon.

So, that's the sort of guys you're dealing with there --

MALVEAUX: You can see them just carrying away what looks like to be ammunition, possibly.

HOLMES: It's empty, if it is, because that would be heavy. But it's hard to tell what that is.

It's interesting, Sara saying they captured trucks and weapons. This whole rebel advance has been supplied, if you like. And yes, France and others have got weapons in, but a lot of the western rebels did not get much in the way of weaponry help either from the outside or from Benghazi. So what they were doing was supplying themselves and arming themselves by capturing Gadhafi's weapons. Time and time again, they would come back from the front with a vehicle like that that they had captured, or weaponry or ammunition. Because Gadhafi troops, when they fled, they left everything behind, including a lot of their front-line fighters as well. The mercenaries, they would leave behind fighters at the front, and they'd disappear and flee to the next town.

MALVEUAX: And Michael, I understand Al Arabia is reporting the rebels are going room to room inside Gadhafi's compound, looking for members of the Gadhafi family as well as obviously picking up any kind of evidence or things that might be useful to them.

This movement started and really took hold, this was out of Benghazi. That's where our own Fred Pleitgen is. Fred, if you are with us, can you give us the reaction of rebels there to see how quickly this escalated and how quickly they were able to take over this compound?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: The reaction has been absolutely phenomenal here in Benghazi. There has been salvos of celebratory gunfire going on, I would say for the past 45 minutes or so. I'm not sure how much you can hear in the background.

They are using some of the pretty heavy weapons it seems as well, to be firing in the air. Seems like some of the weapons have been even mortars they have been firing into the air and out to sea here. This is, of course, a coastal town.

There is a lot of jubilation here in Benghazi at this point in time. There's people who are driving through the streets, of course, waving the rebel flag and a lot of them of course firing in the air as well. We will join those celebrations in a couple of minutes and head over to the main square here of Benghazi, where as you said, this uprising essentially began when the people here rose up against the Gadhafi military, there was a big battle at a military base outside of Benghazi where the people here managed to take the military base and actually equip themselves for the first time with some substantial weapons.

As Michael said before, there were people here also who were fighting, going to the front lines without weapons at the very beginning. So, this town has been through a lot in the past couple months. You can certainly see a lot of that weight seemingly falling off at this point in time.

MALVEUAX: Want to just interrupt very quickly, Fred, if we can just take a moment to listen to some of the sound that is coming from the video from Al-Jazeera.

(SPEAKING IN FOREIGN LANGUAGE)

MICHAEL HOLMES, CNN CORRESPONDENT: You can hear there in the background small arms fire, AK-47 fire. And you can tell by the demeanor of the people there that it is celebratory gunfire. Nobody is racing for cover.

It's a ubiquitous thing, Suzanne. I mean you would hear it all the time when they had even the smallest of victories. It's almost a regional, a cultural thing, this celebratory gunfire.

The thing that always struck me about it, it's dangerous. You know, not only is it a waste of ammunition, but bullets fired in the air come down. I remember being at the funeral of Yasser Arafat and there was constant volleys of this gunfire into the air and 16 people were wounded. It is something that in my 25 years of going to the region, I've never fully understood. Plus, in this situation, it's been a waste of ammunition from the beginning, too.

MALVEAUX: I guess it really signifies what kind of moment this is for so many people in the community here.

HOLMES: Yes.

MALVEAUX: I mean you hear it from the folks on the ground who just can't believe that this is taking place. It's taken a bit longer than some of the other countries as part of the Arab spring. Some people thought that this would have happened a long time ago. This started back in February and very much inspired by what happened in Egypt and Tunisia.

HOLMES: Exactly.

MALVEAUX: And --

HOLMES: But the last two weeks, last two to three weeks --

MALVEAUX: A real escalation here in the capital.

HOLMES: It's been an absolute race. Yes, it's been an absolute race. I mean when those rebels came down, you had that stalemate in the east and then you had the western rebels come down from the Nafusa Mountains. That's when this went on a roll. They took town after town after town.

And they told me they were hoping to get to the coast and be on the road to Tripoli by the end of Ramadan. They have beaten their own estimations and done so by a long, long way. Partly because of the Gadhafi forces not putting up the sort of resistance that even the rebels thought they'd get. And, of course, mainly because of NATO.

Let's remember, the rebels would not be in Tripoli today if it hadn't been for NATO. Every time Gadhafi forces would put their heads up, metaphorically, NATO would bomb them, would take out. And rebels told us that they were passing on coordinates. You had the over flight and you had the U.S. drones up there giving intel information and intercepting phone calls. These guys would not be doing what they're doing now if NATO hadn't softened it up.

And, you know, when we were talking -- we heard Ambassador Rice talking about Syria earlier. Syria is a very different ball game. And that is because there is no NATO helping out the locals. MALVEAUX: And not to forget that it really was a U.S. mission, a NATO mission, led by the United States, by the Obama administration. But a limited mission, which the president got a lot of criticism for. But clearly this is a breaking point.

HOLMES: Geographically, by the way, that's part of the compound. I think it's like in the northwestern part of this compound. It's -- Gadhafi has a library in that area. His actual residence is much further around to the right-hand side. If that camera were to pan almost 190 degrees to the right, you would see his residence. Again, more celebratory gunfire.

MALVEAUX: Let's listen in.

HOLMES: That's sounding a little less celebratory and a little bit more deliberate, actually. Of course it's very difficult to make assumptions here. But I think the cameraman there is giving you a sense. He's taking cover there behind what looks like a vehicle.

You see there, you don't fire an RPG in celebration. So --

MALVEAUX: This looks like this is an ongoing battle that is taking place.

HOLMES: There's a little fire fight.

MALVEAUX: As you see, people who are running and firing at one another here. I mean from the vantage point of the photographer, he certainly seems to be taking cover behind something here and he's very, very cautious.

HOLMES: Yes, the wandering around has ceased and there's a bit more scurrying around going on now. This -- we said there could be pockets of resistance in the next batch (ph) of (ph) hours and perhaps there was just a little bit of an exchange there.

MALVEAUX: It's odd to see people walking around back and forth. These folks rather calm. And then just moments ago we saw that man firing his weapon. And that was a significant weapon. That did not look like --

HOLMES: That was an RPG, yes.

MALVEAUX: Did not look like celebratory gunfire. Let's take a listen.

HOLMES: That's an AK-47. It looks like it's gold-plated. And one must presume that that's a trophy that's been lifted from one of Gadhafi's buildings there. We saw those sorts of weapons in Iraq, too. Saddam Hussein and his sons were fans of that sort of thing. But, yes, what appeared to be a gold-plated AK-47 there in the hands of a rebel.

MALVEAUX: You're watching on the ground right outside of the Gadhafi compound. Some celebratory gunfire. This is coming from al- Jazeera live television, and also the other side from Reuters, outside the Gadhafi compound, overtaken by rebels now. Some of them taking away souvenirs. Some celebrating. Some still firing their weapons.

We are going to be following every moment of this breaking news story. Potentially the end of the Gadhafi regime. But certainly the capture of the compound of Moammar Gadhafi. We're going to have much more of this after the break.

(COMMERCIAL BREAK)

MALVEAUX: We've been following the developing breaking news out of Tripoli, Libya. This is where Moammar Gadhafi's compound was under attack earlier today by rebel forces that entered that compound. Since then, it seems to be have -- it seems to have cleared a little bit. You see the smoke clearing and you see on the left-hand side al- Jazeera television, live pictures of them going point by point, explaining what is taking place outside of the compound.

But, Michael, you and I have been watching. It seems as if people are relaxed, they're comfortable, they're celebrating. Still a little bit of tension in the air, however, as they begin to take weapons out of this facility. And still no word on whether or not Moammar Gadhafi was inside the compound or where he is at this point.

HOLMES: You know you've got to wonder that he would have stayed there once the rebels got in. And he does -- rumored to have tunnels out of that compound. Even if he was in it to begin with. But once the rebels were in the city, you would think that that was going to be a primary target all along and he would have been a bit silly to stay there. We were saying earlier that there has long been a rumor that there's a tunnel from there to the Rixos Hotel.

Now, as you say, Sara Sidner has also been inside that compound. Reported that the rebels are in control. We saw that just before the break, a little burst of gunfire that elicited a slightly different reaction to those inside the compound. A bit more scurrying around. And we saw a gentleman firing an RPG at that domed building, which is to the left of this shot now. And that is an area where Gadhafi has a library. It's a fair distance, on the other side of the compound from his actual residence.

But firing an RPG in celebration is an odd thing to do unless he was just doing a little bit of post-battle damage, or was he firing at something? We've been speculating, of course, there will be pockets of resistance inside this compound. It is a big place with multiple buildings. And one imagines there will be some exchanges of fire going forward.

But as you say, some bizarre scenes. People leaving with ammunition. People leaving -- one guy leaving apparently with a gold- plated AK-47 that presumably he souvenired from one of those buildings.

So, yes, there's still a bit of tension there. As we were also saying before the break, this isn't the Marines or the, you know, the horse guards from Great Britain. This is -- this is still that ragtag army. And you've got basically guys who were lawyers or shopkeepers before this all began now running around doing battle. MALVEAUX: You mentioned the hotel, the Rixos Hotel. That's where our own Matthew Chance has been for days now, as many other journalists have gathered there under the watchful eye of Gadhafi loyalists. Really trapped inside of that hotel. In some ways being held by some of those armed men.

HOLMES: Right.

MALVEAUX: It is still unclear -- we know that Matthew Chance had a chance to see one of Gadhafi's sons, Saif al-Islam, yesterday, who had been reportedly captured by the rebels, very much free, alive, and running around with weapons and supporters. It's still very unclear -- it's uncertain right now where the Gadhafi family is, what state they're in, whether or not they actually control anything inside of this country, and what the future is.

HOLMES: That fellow looks like he's just having a bit of a rest, actually.

Yes, it is difficult to know. And the rebels' credibility got a little dent (ph) when Saif al-Islam Gadhafi popped up yesterday after these claims that he had been captured. In fact, the rebels were saying they held three of his sons. Another one of the sons, Mohammed, apparently escaping rebel capture after being held for some hours.

Let's listen some more.