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Lou Dobbs Tonight

Hezbollah Strikes Targets 25 Miles North of Tel Aviv; Israeli Aircraft Kill More Than 20 People Near Syria

Aired August 04, 2006 - 18:00   ET

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


KITTY PILGRIM, CNN ANCHOR: Tonight, Israel launches a deadly wave of new airstrikes on Lebanon. More than 20 people are killed in one attack.
We'll be live in Lebanon.

And Israel buries its dead after Hezbollah fires more than 200 rockets at northern Israel. Some rockets land just 25 miles north of Tel Aviv.

We'll go live to Israel with a special report.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, August 4th.

Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

The war between Israel and Hezbollah sharply escalated today. Hezbollah fired more than 200 rockets at Israel. Some of those rockets landed deeper in Israel than ever before.

At the same time, Israel launched some of its most devastating airstrikes of the war. One of those airstrikes killed as many as 24 farm workers near the Lebanese border with Syria.

Matthew Chance reports from northern Israel on the deadly rocket barrage.

Brent Sadler reports from Beirut on the intensifying Israeli airstrikes.

And Barbara Starr reports from the Pentagon on Hezbollah's tactics.

And we turn to Matthew Chance first -- Matthew.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Kitty, thanks very much.

A ferocious barrage of Hezbollah rockets raining down on towns and villages across northern Israel, as we've seen for the past several weeks. More than 200 landing in the space of just this day alone, including what may be the most dangerous of the missiles strikes so far, a rocket, or at least three rockets, according to police, landing just 25 miles north of Israel's biggest city, Tel Aviv, in the town of Hadera.

It caused no injuries. But it is fulfilling, that Hezbollah promise made by the militia's leader, Hassan Nasrallah, to strike further and further into Israel, deeper and deeper into this country.

In the meantime, a barrage going in the other direction as well. Israeli forces pounding Hezbollah positions in southern Lebanon with artillery fire and tank fire, and, of course, with the thousands of Israeli troops that have been pouring into southern Lebanon over the course of the past several days.

There are between 10,000 and 12,000 ground troops in southern Lebanon now, really working their way from village to village in southern Lebanon, extending Israel's control over what will be a broad strip of territory under Israel's control north of the Israeli border. Israel says it intends to stay in control of that area, until such times an Israeli -- rather, an international force is decided upon and until it is deployed on the ground.

So, until then, there could be Israeli boots on the ground in southern Lebanon for quite some time -- Kitty.

PILGRIM: Matthew, how much progress is Israel making into Lebanon at this point?

CHANCE: Well, it's making a great deal of progress in terms of its advance and its military operations in southern Lebanon. It says it wants to push several miles into southern Lebanon to push the Hezbollah militia as far back as it and can and to hold on to that territory, to make sure that the Hezbollah guerrillas can no longer infiltrate Israeli territory in their ground operations to snatch Israeli soldiers, such as the instance that sparked this war off in the first place. From that point of view, they are making a good deal of progress.

But at the same time, they have not managed to stop Hezbollah's ability to strike at towns and cities across northern Israel. As I mentioned, another 200 rockets coming in over the course of this day. No matter how hard they are hit, it seems, Hezbollah has retained this ability to strike at will against Israel -- Kitty.

PILGRIM: Matthew -- thanks, Matthew.

Matthew Chance reporting.

Well, today Israel blasted the southern suburbs of Beirut. Israeli aircraft also destroyed the last major highway into Syria. More than 20 people were killed in an Israeli air raid near the Lebanese-Syrian border.

Brent Sadler reports from Beirut on today's escalating airstrikes.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN BEIRUT BUREAU CHIEF (voice over): Victims of an Israeli airstrike in Lebanon's northern Bekaa Valley, close to the Syrian border, are laid out in the dirt of Qaa. Many of the dead are low-paid Syrian farm workers loading fruit, say security sources, into a waiting truck when they were killed. Israel has repeatedly fired on trucks around the border region with Syria, suspecting Hezbollah of trying to re-supply its arsenal of rockets this way.

Earlier it was a reported movement of trucks traveling along a major highway that may explain Israel's early-morning raids on a series of vital bridges north of the capital. The main coastal route connecting Beirut to Lebanon's northern border with Syria was bombed in sight of the famed Casino du Liban. Lebanese motorists caught by another deadly airstrike.

This was the last high-speed link for people to enter and leave the country by road. Travel now restricted by slow-moving byways and detours. Some eyewitness report heavier than usual numbers of trucks traveling along this now battered road just hours before the strike.

"My brother let one of the trucks pass him," says Camille Fakiya (ph), "a split second before the road went up in a big explosion."

Under the flattened heap of a bridge that spanned this wide gully, a desperate search for more victims. A man is missing, and they think he's buried under the mountain of rubble.

Bystanders in this Christian heartland of Lebanon watch in resentful silence, reeling from the shock. Camille Chamoun is a Maronite Catholic political activist. "Now that Israel has broadened the air assault," he explains, "hitting more of their vital interests, the politically divided Christians are now under pressure to unite and rally behind the defense of the country."

CAMILLE CHAMOUN, NATIONAL LIBERAL PARTY: Public opinion is today against Israel 100 percent from this area, although before people were, you know, divided, saying maybe it will come to a happy end. But this is absolutely -- it has no explanation.

SADLER (on camera): The punishing airstrikes may have achieved an Israeli military objective of strangling main supply routes into Lebanon from Syria for Hezbollah. But for the Lebanese as a whole, say government officials here, it's another devastating blow against a country that's been slowly dragged to its knees...

(voice over): ... day by agonizing day, as Israel bombs more targets, close to, but several miles from, the heart of the capital. Lebanese are experiencing a growing sense of collective misery, fearing there's no realistic end to the conflict in sight.

Brent Sadler, CNN, Beirut.

(END VIDEOTAPE)

PILGRIM: Hezbollah rockets are landing deeper in Israel as the war escalates now. Now, on July 12th, Katyusha rockets struck Shtula, just inside the Israeli border.

On July 13th, they reached Haifa, 20 miles from Lebanon.

On the 28th of July, a powerful rocket hit near the town of Afula. That's 30 miles from the border.

And today, at least two rockets hit near Hadera, which is about 50 miles into Israel. That is the furthest yet.

Hezbollah is also firing bigger rockets at Israel than ever before. U.S. and Israeli officials say Iran and Syria are helping Hezbollah.

Barbara Starr reports from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): U.S. war planners and intelligence analysts are watching closely to see exactly how Hezbollah is fighting Israel. And for good reason. As one U.S. Army general told CNN, "You're watching how we would have to fight Iran."

The Pentagon needs to know if its forces are ready to fight Hezbollah-type tactics if it came to war with Iran or Syria.

DONALD RUMSFELD, SECRETARY OF DEFENSE: Our people clearly are watching what's taking place. I think anyone whoever underestimated Hezbollah were few and far between.

STARR: Hezbollah has about 10,000 troops. Israel, nearly 500,000. But analysts say Hezbollah is using tactics and weapons to its advantage.

First, Hezbollah has Iranian and Syrian-supplied fire power.

GEN. JOHN ABIZAID, COMMANDER, CENTRAL COMMAND: Hezbollah fields greater and longer-range weapons than most regional armed forces.

STARR: Its rockets have hit 50 miles inside Israel. If the target was a U.S. position, the U.S. military would be forced to commit manpower to defend it.

Second, Hezbollah has forced Israel to fight on Hezbollah's home turf, and fight in civilian areas.

COL. THOMAS X. HAMMES (RET.), U.S. MARINE CORPS.: They have learned how to draw Israeli forces in close so that they take away most of the advantages the Israelis have and reduce it to a small unit on small unit fight in a built-up area.

STARR: Third, Hezbollah has shown it can challenge Israel's air power. Dropping bombs is killing Lebanese civilians and isn't defeating Hezbollah.

HAMMES: They have underground paths between buildings. They have bunkers they can retreat to. They've set up the houses so they are not fighting from the outside part of the house but more inside. (END VIDEOTAPE)

STARR: You know, Kitty, many of these Hezbollah-type tactics are really not new. Some of them date back to the Vietnam War and even beyond that. But a lot of military planners say this time it is different because Iran is involved. Iran has been training Hezbollah, the U.S. believes, and so the U.S. has to worry now about where Iran may next turn its attention to -- Kitty.

PILGRIM: Thanks, Barbara.

Barbara Starr at the Pentagon.

Well, the U.S. ambassador to the United Nations, John Bolton, said diplomatic efforts to end the conflict are making progress. The United States and France are trying to reach a deal on a United Nations Security Council resolution.

Richard Roth reports from the United Nations -- Richard.

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Kitty, the United States has been saying there may be a resolution for the Security Council in a number of days, and a number of days have gone by. But now things seems to be approaching some type of final stage.

The United States ambassador, John Bolton, and his French counterpart have been meeting all day while the fighting rages in Lebanon. There is definite impatience here among other countries, but everybody knows the main players are the U.S. and France.

They are still stuck on the timing and sequence of events that would occur. Yet, there's a lot of intensive dialogue behind the scenes. The U.S. ambassador was asked how he feels this time, unlike the Iraq war, France is working very closely with the United States.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMB. TO U.N.: It feels entirely natural. We have a profound interest in this, as does France, and I think it's important that we try to reach agreement.

We've certainly always had agreement on the broad objectives. There's never been any question about that. And we would like to -- we would like to be able to come up with a co-sponsored resolution, and that's what we're moving toward here.

(END VIDEO CLIP)

ROTH: Secretary-General Kofi Annan spoke by phone this afternoon with President Bush. He also spoke with Jacques Chirac, the French leader. And just within the last hour, Arab ambassadors met with the U.N. deputy secretary-general, concerned about the pace of events and wanting to get the latest on the resolution wrangle.

Back to you, Kitty. PILGRIM: On the issue of pace, Richard, there was some discussion of two resolutions versus one. What might that do to the pace? And is that still under discussion?

ROTH: There -- that could still very well happen. We were told by State Department sources and other diplomats that U.S. and France may be ready to present the first and significant resolution to other members of the Security Council sometime this weekend. That could lead to a vote early next week.

The second resolution would be more of the finishing touches, the major principals to be lined up, because France and the U.S. disagree on what happens once there's some type of temporary cease-fire. The United States wants to sketch in a lot more details. France wants to get the guns to fall silent and then put some type of emergency force in there.

But, what type of protection for that force? Would Hezbollah respect the resolutions -- Kitty.

PILGRIM: Important days for the U.N. coming up.

Thanks very much, Richard Roth.

Still to come, thousands of radical Islamists march in Baghdad. Are Iraqis supporting Hezbollah?

We'll have a special report from Baghdad.

Also, it's Senator Hillary Clinton versus Defense Secretary Donald Rumsfeld.

We'll go live to Capitol Hill.

And Israel says Syria is helping Hezbollah attack Israel.

We'll have a special report from Jerusalem and a live report from Damascus.

(COMMERCIAL BREAK)

PILGRIM: Hezbollah rockets are hitting deeper into Israel tonight. Hezbollah rockets struck near the town of Hadera, only 25 miles north of Tel Aviv. Hezbollah has threatened to hit Tel Aviv if Israel attacks central Beirut. More than 200 Hezbollah rockets hit Israel today.

Israeli warplanes today attacked Beirut's northern suburbs, destroying roads connecting with Lebanon and Syria. And an Israeli airstrike today killed at least 24 farm workers in northeastern Lebanon near the Syrian border. At least three Israeli soldiers were killed in combat today with Hezbollah.

Israeli police today showed reporters a Hezbollah rocket that Israel says was manufactured in Syria. Israel says Syria is providing Hezbollah with new rockets and missiles. John Vause reports from Jerusalem on Hezbollah's links with Syria.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice over): This truck, according to Israel, is crossing from Syria into Lebanon to resupply Hezbollah. When it's hit by an airstrike, the huge explosion which follows is proof, according to Israeli officials, that it's carrying a cargo of munitions.

Israeli intelligence believes since the conflict began more than three weeks ago, Syria has been actively smuggling weapons across the border, an allegation which Damascus denies.

BRIGADIER GENERAL YOSSI KUPERWASSER, ISRAELI INTELLIGENCE: Because, from the Syrian point of view, Hezbollah is an indivisible part of their military.

VAUSE: At least seven of the longer-range missiles have so far landed in open fields in northern Israel.

MICKY ROSENFELD, ISRAELI POLICE SPOKESPERSON: Yes, in fact, the Syrian rocket, 302 rocket is the exact number of it. And the rocket itself had approximately 100 kilos of a warhead.

VAUSE: Up to five times the payload of a smaller Katyusha.

Israel says its air campaign has destroyed many of the launchers for long-range missiles. And, right now, Syria is urgently trying to resupply Hezbollah fighters.

KUPERWASSER: And they don't have launchers produced by themselves, Hezbollah. So, they have to bring in launchers from Syria.

VAUSE: To stop that, earlier this week, Israel bombed the major road between Lebanon and Syria in the south. And, Friday, four main bridges to the north were hit.

But some Mideast experts question the effectiveness of Israel's airstrikes.

ROBERT SPRINGBORG, MIDDLE EAST INSTITUTE: After all, it's the dry season. Most of these bridges are for use in -- in winter rain, when the rivers are -- are flowing much more fully. So, an ability to interdict from the air a flow of weaponry from Syria into Lebanon is probably beyond the capacities of the Israeli air force.

VAUSE: A major concern to Israel, anti-tank missiles, which have conflicted heavy casualties -- Israeli intelligence believes Hezbollah has been armed with the latest made by Russia, once again, they say, smuggled in through Syria.

KUPERWASSER: The Russians said, oh, forget it. You can't prove that it really came from us. See, so, they fell from heaven.

VAUSE (on camera): Israeli intelligence believes the main lesson from this war: regardless of diplomacy, more preventive strikes will almost likely be needed to stop Hezbollah rebuilding its arsenal.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE)

PILGRIM: And joining me now from Damascus is CNN's Aneesh Raman.

Aneesh, what are officials there saying about the charge that Syria is re-supplying Hezbollah?

ANEESH RAMAN, CNN CORRESPONDENT: Well, Kitty, no official remarks after that charge. We hear few words, and they are far between in the Syrian capital.

Most of them tend to come from outside. But officials I've spoken to from the start deny any arms that are going through Syria from Hezbollah. They say the support for that group is merely moral support for what they say here is a resistance group, despite its label as a terrorism organization by both the U.S. and Israel.

When you push them, though, they really just don't give you an answer as to then what is happening. And they say, "If you have questions, you have to ask Hezbollah," that their support is just moral and that Hezbollah makes its own decision -- Kitty.

PILGRIM: Well, Aneesh, what is Syria doing to stop Hezbollah from firing rockets at Israel? Perhaps that's the question.

RAMAN: Yes, and that is the predicament Syria is now in. At one level, it's saying that all it does is morally support Hezbollah. At another level, really the only reason it should be brought to a brokering table for peace is because it has some clout over Hezbollah.

At the moment, it seems like they aren't doing much, if anything at all. They have said essentially that Syria will do nothing until a cease-fire takes place and an exchange of prisoners takes place. And the most recent comments we heard from the Syrian president were that they would use their influence over Hezbollah, but only if a political agreement was done which Hezbollah agreed to first.

So Syria is aware that a weakened Hezbollah also weakens Syria's clout within the region, because, again, the main reason -- their denial of these arms going through Syria aside -- that Syria is a player in all of this is because of its relationship with Hezbollah. And so they are in a very precarious situation.

For the moment, though, they have increasing clout and confidence, increasing relations with Iran. And a lot of that, though, is contingent upon Hezbollah being a force that is dealt with diplomatically within this issue -- Kitty.

PILGRIM: Thanks, Aneesh.

Aneesh Raman reporting from Damascus.

Well, that brings us to our poll tonight.

Do you believe Syria and Iran have any interest in ending the Mideast conflict? Yes or no?

Cast your votes at loudobbs.com. We'll bring you the results a little bit later in the broadcast.

Also ahead tonight, Senator Hillary Clinton takes aim at Defense Secretary Donald Rumsfeld.

We'll tell you what the senator had to say and why it's stirring up so much controversy.

Also ahead, rallies in support of Hezbollah in Iran and Iraq.

We'll tell you -- we'll take you to Baghdad for a special report on that.

And a deadly day in the Middle East.

We'll have the latest from Israel and Lebanon as the fighting escalates and -- tonight.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Pro-Hezbollah, anti-Israeli protesters spreading across the Middle East tonight. Hundreds of Iranians rallied in Tehran in support of Hezbollah. They shouted, "Down with Israel!" and "Death to Israel and America!" They stoned the British Embassy, and they burned U.S., Israeli and British flags.

Iranian policemen urged all Muslim nations to support Hezbollah in its war with Israel.

In Iraq today, thousands of Shiites turned out in Baghdad to show their support for Hezbollah.

Harris Whitbeck reports tonight from Baghdad.

(BEGIN VIDEOTAPE)

HARRIS WHITBECK, CNN CORRESPONDENT: (voice over): Chanting that Hezbollah leader Nasrallah is waging his war against Israel in the name of religion, Shia protesters from all over Iraq converged on Sadr City, the bastion of Shia fundamentalism in the Iraqi capital. They arrived in buses and private cars, and they numbered in the tens of thousands, accompanied by armed militiamen waving the yellow flag of Hezbollah.

As Israeli and American flags were burned and effigies of George Bush and Tony Blair waved in the air, an imam prayed for Hezbollah prayers.

UNIDENTIFIED MALE (through translator): The victory will be for the Islamic resistance in Lebanon. Imam Ali -- peace be upon him -- will support him like he did before with the Mehdi army in Najaf.

WHITBECK: That was a reference between the bloody fight between Shia militias and U.S. forces two years ago that led to the rise in prominence for radical Shia clergy Muqtada al-Sadr. It was also a call to arms for Hezbollah supporters elsewhere in Iraq.

This protester, shrouded in white signifying his willingness to die for his cause, said he was ready.

UNIDENTIFIED MALE (through translator): I will fight with Hezbollah and Hassan Nasrallah, and we will support him until we free Palestine, Lebanon, and Iraq, god willing.

WHITBECK: Others demand that Hezbollah strike Tel Aviv next.

(on camera): The protest was described as the largest ever in support of Hezbollah in the Middle East. It was also a show of strength by Shia radicals in Iraq who said Hezbollah's fight is their own.

Harris Whitbeck, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: Tonight, new strikes and counterstrikes in the war between Israel and Hezbollah. Israel buries its dead. Hezbollah strikes deeper into Israel than ever before.

And we'll take you to northern Israel for a special report.

Tonight, Beirut is reeling from devastating new air attacks. We'll take you live to Beirut for the very latest at this hour.

And more on the pro-Hezbollah demonstrations in Iraq. We'll talk about what it could mean with our panel of top political analysts

(COMMERCIAL BREAK)

PILGRIM: The war between Israel and Hezbollah sharply escalated today. Israel launched a devastating series of airstrikes across Lebanon. Several dozen people were killed.

At the same time, powerful new Hezbollah rockets landed deeper inside Israel than ever before.

Paula Hancocks reports from northern Israel on the Hezbollah rocket barrage, and Michael Ware reports from Beirut on the deadly new Israeli airstrikes.

We begin with Paula Hancocks -- Paula.

PAULA HANCOCKS, CNN CORRESPONDENT: Kitty, the Israeli death toll is rising steadily for a second day on the military and the civilian front. Hezbollah once again showing that some Israeli politicians may have spoken too soon when they said they believed Hezbollah had been dealt a heavy blow.

(BEGIN VIDEOTAPE)

HANCOCKS (voice over): A father and his daughter buried together Friday, victims of a Hezbollah rocket in Akko on Thursday. As the bodies are covered, two more Israelis are killed in rocket attacks.

One woman died in a direct hit on her house in an Arab Druze village in northern Galilee, according to police. Another person killed when a rocket landed near his car on the outskirts of Israel's northernmost town of Kiryat Shmona.

Rockets once again were widespread across northern Israel, Hezbollah proving it's still more than capable of hurting Israel. But even many of those in the line of fire believe the war has to continue.

UNIDENTIFIED MALE: We leave, we still get attacked. So once and for all we have to make an end to this situation and just win this war period.

HANCOCKS: One rocket that fell in Kiryat Shmona was Syrian made, according to police, packed with 100 kilograms of explosives.

MICKEY ROSENFELD, ISRAELI POLICE: The type of destruction that this rocket can cause if it lands inside the city, the destruction and devastation, the number of people that will be killed, will be huge.

HANCOCKS: Israeli troops edged slowly deeper into Lebanon, whatever cost. Israel continues to fight on two fronts. Troops are still operating in Gaza. Three more Palestinians were killed there Friday by strikes Israel says were aimed at militants.

Tension over Israel's military operations spilled over in east Jerusalem after Friday prayers. Muslim worshipers threw bottles at Israeli police. At least four were arrested. Residents in Israel's commercial capital, Tel Aviv, as yet untouched physically on the war on the northern border, are now preparing for the possibility they could be next on Hezbollah's target list.

(on camera): Close to 600 rockets have hit northern Israel in the past three days alone. During the same time period, many more residents have been heading south to try and escape the danger. Two dozen busloads of residents left Kiryat Shmona, the northernmost town of Israel, heading toward the red Sea Resort of Eilat. This is 300 miles south, and it's the furthest south you can go without actually leaving Israel -- Kitty.

PILGRIM: Thanks, Paula. Paula Hancocks reporting from Haifa, Israel.

Now, Israeli air and artillery attacks on Lebanon have now killed nearly 700 people. Today, more than 20 people were killed in a single airstrike on a farm near the Lebanese-Syrian border.

Joining me from Beirut is CNN's Michael Ware. Michael, what were Israel's targets today?

MICHAEL WARE, CNN CORRESPONDENT: Well, Kitty, there was a mix, clearly, of tactical and strategic targets. Obviously, the combat continues in the south. So, there was air power used in support of troops and there was a strike in the southern town of Tyber (ph), which locals say killed seven.

There was also the attack in the Bekaa Valley in the small town of Qaa at the farm you mentioned. Again, local officials are saying more than 20 people were killed, all of them described as fruit pickers.

We also saw strikes on four key bridges on the main northern road leading to Syria. This is Lebanon's last lifeline. It's now been cut off. So people going out and goods coming in can no longer travel.

By far the most intense concentration of airstrikes, however, was on a southern district of Beirut itself, in Kuzai (ph). There, up to 30 missiles struck within less than two hours -- Kitty.

PILGRIM: Michael, do these Israeli airstrikes appear to be following some sort of pattern?

WARE: Yes, they do, Kitty. I mean, apart from tactical airstrikes in support of troops in the field, apart from targets of opportunity or where intelligence leads the Israeli Air Force to what they suspect are hidden arsenals or command centers, what we're now seeing is attacks on the infrastructure that supports Hezbollah's supply routes in and out of the country.

Hence, they cut the road leading to the north, the Israelis claiming Hezbollah was using that to ferry men and material. We also saw this intensive attack in here Beirut. That was on a shipping port. A fishing fleet was completely obliterated, potentially, we suspect, or one may speculate, that the Israelis believe could be used to ferry, again, men and equipment -- Kitty.

PILGRIM: Michael, is there any word from Hezbollah today, after yesterday's threat to strike Tel Aviv?

WARE: No, Kitty. As the country is being strangled and isolated, Hezbollah, in terms of its public statements, at least, was silent today, following the major announcement of 24 hours ago. However, I suspect that they let their field troops do the talking. We saw that Israeli troops were killed today. And also Hezbollah unleashed more than 200 rockets south, across the border, into Israel -- Kitty.

PILGRIM: Michael, thank you very much. Michael Ware reporting from Beirut.

Now, insurgents in Iraq have killed three more of our troops. All three were killed in the Al Anbar province west of Baghdad. A fourth soldier has died of nonhostile causes, 2,586 of our troops have been killed in Iraq, and on average, two of our troops are being killed every day in Iraq.

As the war in Iraq escalates, Senator Hillary Clinton tonight is calling for the resignation of Defense Secretary Donald Rumsfeld. She says Rumsfeld has presided over a, quote, "failed policy," in Iraq. Washington is questioning why Senator Clinton is targeting Rumsfeld now.

Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The political equivalent of boxing. A polite greeting, then off to competing corners.

SEN. HILLARY CLINTON (D), NEW YORK: Under your leadership, there have been numerous errors in judgment that have led to us where we are in Iraq and Afghanistan.

DONALD RUMSFELD, SECRETARY OF DEFENSE: My goodness.

BASH: After publicly cold scolding the defense secretary here, Senator Hillary Clinton called on him to resign, something several other leading Democrats did long ago. So why now? In this letter to supporters, Clinton says Donald Rumsfeld's answers were "inadequate" and the military needs new leadership.

But some Democratic strategists see another motivation. Anti-war activists are making Iraq a party litmus test. War supporter Senator Joe Lieberman could lose a primary next week over it. Hillary Clinton also backed the war and has repeatedly stood by her vote.

CLINTON: I don't regret giving the president authority.

BASH: She also disagrees with Democrats who want troops home now and got booed for that.

CLINTON: I do not agree that that is in the best interests of our troops or our country!

BASH: Besides her position on Iraq, the senator seems an ideal fit for her party's nomination in 2008. Consider this chart, prepared by a top Republican pollster researching Mrs. Clinton's presidential potential. The blue line traces how Democratic primary voters see themselves ideologically, the red line how they view Hillary Clinton.

Almost a perfect match, which makes her hard to beat, especially if she can temper her criticism on her Iraq stance. So while she stands firm against a deadline for full withdrawal, Clinton enthusiastically joined Democrats in urging the president in start bringing troops home this year.

CLINTON: I simply do not believe it's a strategy or a solution for the president to continue declaring an open-ended and unconditional commitment.

BASH: Clinton aides say her call for Rumsfeld to go is not an abrupt change, because it comes after years of criticizing the administration's war management.

(END VIDEOTAPE)

BASH: But Senator Clinton certainly has raised the volume in the past 24, 48 hours of her criticism when it comes to Iraq. Liberal activists tell us that they notice it and they welcome it, but they also say that they'll be watching, Kitty, to make sure it continues.

PILGRIM: Thanks, Dana. Dana Bash reporting from Capitol Hill.

Still ahead, Hezbollah rockets are hitting deeper into Israel tonight, only 25 miles north of Tel Aviv. The very latest from northern Israel, next.

In Baghdad today, Shiites held massive demonstrations in support of Hezbollah. Three of the nation's most distinguished political analysts join me with their thoughts on how the Mideast war could complicate the U.S. mission in Iraq.

(COMMERCIAL BREAK)

PILGRIM: Hezbollah rockets tonight hit a town just 25 miles north of Tel Aviv. This is the deepest Hezbollah attack on Israel since the war began. Matthew Chance has the very latest from northern Israel. Matthew?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Kitty, thanks very much. Well, there's been a ferocious barrage of rockets from Hezbollah strongholds in southern Lebanon into towns and cities across northern Israel over the course of this day. They fired more than 200 rockets, which is about average, in fact, for the past several weeks of this ongoing conflict. But one of those rockets, or, in fact, a couple of those rockets, according to the police, actually fired, actually landed, in Hadera, which was a town just about 25 miles to the north of Tel Aviv. And it's the farthest north, farthest south, rather, in Israel that any of these Hezbollah rockets have so far penetrated, and so that is, obviously, another grim milestone in this conflict.

In the other direction, there's been a ferocious barrage, too, I have to say from Israel into southern Lebanon. With Israeli artillery and tanks firing into Hezbollah positions there. You may be able to hear behind me, there is an ongoing percussion of artillery shells and tank shells being fired in support of the thousands of Israeli troops, between 10,000 and 12,000, we understand, on the ground in close combat with Hezbollah fighters. There have been casualties on both sides over the course of the day. At least three Israeli soldiers have been killed. We don't have any indication from the Israelis at this point how many Hezbollah fighters may have been killed as well. But certainly very close combat, as Israel pushes across south Lebanon to try and establish what it calls its security zone, a buffer zone, deep into Lebanese territory, which it intends to hold on to until a multinational force is deployed there. Kitty?

PILGRIM: Thank you very much, Matthew Chance.

Well, Joining me tonight with their thoughts of this widening conflict, the politics of Iraq, and more topics than that. Former Reagan White House political director Ed Rollins joins us. Michael Goodwin of the "New York Daily News" and James Taranto, the editor of "OpinionJournal.com". And gentlemen, thanks for joining us. We'll start with the situation with Hezbollah and Israel. Twenty four days of fighting. How do you assess the situation in the future of this conflict?

JAMES TARANTO, "OPINIONJOURNAL.COM": Well, I think it's going to go on for a while, and I hope it goes on until Israel destroys or severely weakens Hezbollah. Because, keep in mind, Israel isn't trying to destroy Lebanon. Hezbollah is trying to destroy Israel. Hezbollah's goal is death to Israel.

PILGRIM: Uh-huh.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": Yes, I mean, I think the problem is going to be how does it end and when does it end? And that's obviously not being worked out very well. I think that the different ideas for a cease-fire have to do with who do you hand the territory off to that Israel has occupied and will anyone disarm Hezbollah? I think these are really tricky questions and I don't see them getting solved easily.

PILGRIM: Any hope for the diplomatic route?

GOODWIN: I don't have much of one. I think that the United States is trying to make it work, and France has a different idea, but France, I think, is not an honest broker in this area. And, so, I don't think the United States and France will be able to make a deal that both Israel and Hezbollah will accept, because if Hezbollah doesn't accept it, then Israel will keep fighting and vice versa, so I don't see how this ends.

ED ROLLINS, FMR. WHITE HOUSE POLITICAL DIR.: One of the things that becomes extremely confusing to the American public, the vast majority of whom are overwhelmingly in support of Israel, and certainly hope that John's goals are achieved, but I think you see these demonstrations in Iran, the demonstrations in Baghdad, certainly a lot of American want us to withdraw from Iraq. It's all getting confusion. The whole area looks like, you know, a bunch of crazy people and what are we doing there? I think that's one of the dilemmas that we face, because no matter what occurs, we have to play a very heavy role in trying to make this negotiation come to an end.

PILGRIM: Yes.

TARANTO: Keep in mind, we have demonstrations in Baghdad now, and I certainly don't approve of what these people are demonstrating before, but before we went into Iraq, we had a government that was sending money to suicide bomber's families. That was harboring Abu Nidal and other anti-Israel terrorists. I mean things in Iraq have still gotten better from the standpoint of protecting Israel.

GOODWIN: I'm not the sure about that. I mean this is a Shiah demonstration supporting Hezbollah and people there on the report are talking about wanting to go and fight with Hezbollah. I'm not sure that this is much of an improvement and I think what is happening in Iraq really is very important to what's going on in Lebanon. I think you have this uprising of the Shiah throughout the region and I think that Iraq is melting down at the same point that Lebanon and that war is widening. So I don't see much good happening there at all.

ROLLINS: We already have one political party, the Democrats, who clearly want us out of there and you are seeing more and more Republicans sharing that point of view, and I think from the president's perspective, you know, we certainly have another year at least that we have to stay there to make something good come out of there and I think to a certain extent, he gets weakened and certainly the candidates in this election get weakened somewhat.

PILGRIM: What do you make of the Hillary Clinton and Donald Rumsfeld showdown that we had on Capitol Hill?

TARANTO: Well, I think the news segment got it right, it really comes down to this primary in Connecticut, where Ned Lamont, who is a very strong anti-war candidate, is challenging Joe Lieberman. It looks now as though he's going to beat Lieberman, and Hillary feels the anti-war, angry left base, who really don't want us to win in Iraq, breathing down her neck, and she's trying to position herself, she's playing a very delicate game in anticipation for 2008 and by the way, I'm not sure this is going to be sufficient to appease those people.

GOODWIN: Right, I think she is clearly tacking to the left, but at the same time, I think, what was interesting about that hearing yesterday was that the Republicans were more or less with her. I mean John McCain and John Warner were not defending Donald Rumsfeld and the generals themselves were talking about civil war breaking out. This was, I think, a very gloomy picture of Iraq, and it looks to me like it's kind of a bi-partisan give up. Both parties are walking away from that war as fast as they can right now.

PILGRIM: We have a really interesting clip from Senator John McCain talking to the commander of the U.S. central command, General Abizaid. Let's listen to that for a second, and he makes an interesting point.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Is the situation under control in Ramadi?

GEN. JOHN ABIZAID, COMMANDER U.S. CENTRAL COMMAND: The situation in Ramadi is better than it was two months ago.

MCCAIN: Is the situation under control in Ramadi?

ABIZAID: I think the situation in Ramadi is workable. MCCAIN: And the troops from Ramadi came from Fallujah, isn't that correct?

ABIZAID: I can't say, senator, I know that --

MCCAIN: Well, that's my information. What I worry about is we're playing a game of whack a mole here.

(END VIDEO CLIP)

PILGRIM: Whack a mole, they just keep popping up in different places. A ridiculous analogy, but perhaps apt. What do you think?

TARANTO: I interviewed Chris Shays, a Congressman from Connecticut last week, who is a supporter of the war but also a strong critic of the administration. He's a moderate Republican. And his perspective, he's visited Iraq 13 times, which is more than any other Congressman has, he said it's been a rough six months or so in Iraq, starting with the bombing of the Gold Mosque in Samari in February, largely because of the leadership vacuum, because we didn't have a government and he was hopeful when I talked to him that the new prime minister will get stronger, will send the Iraqi army in to do battle with these militias, some of whom are his own supporters and he said that the Iraqi army, by his observation, is hungry to go into Baghdad and clean things up, so I hope he's right.

ROLLINS: For 35 years, I've watched American politics and I've never seen two high-ranking generals like the two yesterday, who basically were saying we've got serious problems. And General Abizaid is probably one of the most respected men in the army and he basically is saying things aren't good there. So, I think to a certain extent, I think, if you get these people privately, they will tell you that the government is not rising to the occasion, the military and the police are not rising to the occasion and I think that's the real danger that we all face.

GOODWIN: This feels like a last chance. When Maliki came to the White House and met with Bush, that was a very grim press conference. They talked about moving additional troops. The McCain snippet that you showed was about that thing of taking troops from outside, moving them into Baghdad. So, McCain is saying what's going on in the rest of the country? Can we afford this? He seemed to be suggesting we need more troops in the country as a whole, but he didn't say it, so I think nobody really has any answers right now. That's what I felt watching that hearing yesterday.

PILGRIM: Very sobering moment. Thank you gentlemen for joining us to sort it out. Ed Rollins, Michael Goodwin and James Taranto.

Still ahead, chalk-up another one for the nation's do-nothing Congress. The Senate has voted against raising the minimum wage. Congress has once again shown its contempt for working Americans.

Plus, an encore presentation of our Special Report, "Living in a Box." Americans are now living in empty shipping containers from China. It's the sad commentary on our times and a damning indictment of this nation's so-called free trade. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Coming up at the top of the hour here on CNN, it is "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Kitty.

War raging on in Lebanon. Israel bombing major bridges and roadways in Beirut and hitting a group of farm workers near the Syrian border. There are many who are dead.

Meanwhile, an Hezbollah rocket lands even deeper inside Israel. Deeper than ever, actually. We're going to take you to the front lines on both sides of the border.

Thousands taking to the streets of Baghdad in support of Hezbollah. Israeli and U.S. flags going up in flames. Could the war in Lebanon spark even more violence in Iraq?

Also, rockets into Israel. Is Syria fueling the fire of war?

And children of war. Palestinians and Israelis trying to make peace at a summer camp in Maine.

All that coming up right at the top of the hour in "THE SITUATION ROOM." Kitty.

PILGRIM: Thanks, Wolf.

Now, tonight, the federal minimum wage is still $5.15 an hour, and that's what it has been since 1997. And the Senate still won't raise the minimum wage. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Anacostia sits across the river from Capitol Hill in Washington. The per capita income here is $16,400. Many of the residents earn only the minimum wage of $5.15 an hour.

UNIDENTIFIED MALE: People really can't live off of the wages that we have currently. They just can't. I mean, you know, people have to feed their families.

SYLVESTER: Mustafa Younis recognizes that. He owns an Anacostia pizzeria.

MUSTAFA YOUNIS, PIZZERIA OWNER: If you need a good worker or somebody to come to work every day, you have to go beyond that.

SYLVESTER: He pays his workers $7.50 an hour.

Polls show 83 percent of the public supports a minimum wage hike. It has not been raised in a decade. Democrats have been lobbying for an increase for years. Many Republicans agree it's overdue. But when Congress had a chance to do something, politics trumped a pay raise.

REP. CHARLIE RANGEL (D), NEW YORK: What the House and Senate did with minimum wage is worse than politics. It's a cruel hoax.

SYLVESTER: Democrats voted against the legislation because of a Republican-included provision to roll back the estate tax that would benefit 8,000 of the wealthiest Americans. For Senate Democrats, the tradeoff was not worth it.

JOEL FRIEDMAN, CENTER ON BUDGET AND POLICY PRIORITIES: If you look at just the minimum wage provision, the average -- the average minimum wage worker would see their pay increase by about $1,200, whereas the estates who -- the large estates who would be benefiting from this are looking at tax breaks closer to $1 million.

SYLVESTER: While Democrats accuse Republicans of dirty politics, Republicans in turn blame the Democrats for trying to swipe a legislative victory before the congressional elections. And low- and middle-income Americans are caught in the middle.

(END VIDEOTAPE)

SYLVESTER: Democrats are calling for a standalone minimum wage bill. They say they will not allow another congressional pay increase until the minimum wage is raised. Congress has given itself $29,000 in pay raises over the last decade, while the minimum wage has been frozen -- Kitty.

PILGRIM: Thanks, Lisa Sylvester.

Well, tonight, a powerful new symbol of our exploding trade deficit with communist China. Thousands of shipping containers that used to carry cheap Chinese products into this country. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Welcome home. No, not here. Back there. These stacks of shipping containers near the port of Los Angeles may soon be used to build your next house.

PETER DEMARIA, ARCHITECT: This custom home is just over 3,000 square feet.

WIAN: Architect Peter DeMaria is designing homes out of shipping containers. They are preinsulated and already have hardwood floors. They are strong, resistant to mold, termites and fire. And above all, they are plentiful.

DEMARIA: The costs of steel and the cost of concrete has gone through the roof recently. That forced us to explore some alternative materials. WIAN: China's voracious appetite for building materials has driven up costs of traditional construction, and the nation's massive trade deficit with China and others has left hundreds of thousands of empty shipping containers piling up in storage yards all over the country.

So a growing number of architects and builders are using the container glut to save their clients hundreds of thousands of dollars. Custom home construction in Southern California could easily cost $250 a square foot. This house is being built for about half that.

But the mountains of containers are a big problem for others. Last year, 7 million containers arrived here full of imported goods, but only 2.5 million left carrying American exports. Many of the rest are now polluting residential areas near the ports.

JANICE MANN, L.A. CITY COUNCIL: This is the unintended consequence really of the whole international trade industry, but particularly because of this gap that we have between imports and exports. But it is a blight that really no other community I think in America suffers.

WIAN: Architect DeMaria says recycling the containers for home construction will help improve the environment. He's also working with the city of Los Angeles to use shipping containers in low-income housing.

(on camera): The city of Los Angeles recently passed a law prohibiting the operation of new shipping container storage yards in residential neighborhoods. Because in some places, shipping containers mean the sunsets an hour earlier.

Casey Wian, CNN, Wilmington, California.

(END VIDEOTAPE)

PILGRIM: Still ahead, your thoughts on the United Nations.

(COMMERCIAL BREAK)

PILGRIM: Now, the results of tonight's poll. Eighty-five percent of you do not believe that Syria and Iran have any interest in ending the Mideast conflict.

Now, more on your thoughts. Pat in South Carolina wrote us: "U.N. resolution for the Mideast problem? It will succeed when hell freezes over and pigs fly. Hezbollah has already proved it has no respect for U.N.'s resolutions.

John in New Jersey writes: "The U.N. is as effective at solving world's problems as the U.S. Congress is at solving problems we have here at home."

And Bob in Alabama writes: "The U.N. is all talk and no action. Why would a new resolution produce any different results?" Send us your thoughts, loudobbs.com. Thanks for being with us tonight. "THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.

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