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Jerusalem: Palestinians Prepare for Israeli Strike

Aired May 09, 2002 - 20:00   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: In the center of the bullseye and expecting much worse, from Gaza, Matthew Chance watches Palestinians prepare to meet Israel's military.

(BEGIN VIDEO CLIP)

MATTHEW CHANCE, CNN CORRESPONDENT: Everyone who has a weapon will use it to defend those who have not, she says. Guns, knives or anything else.

(END VIDEO CLIP)

ANNOUNCER: Celebrating a victory that many are too young to remember. Is Jerusalem forever indivisible? Israelis look back. As President Bush looks ahead, is it time for Yasser Arafat to go?

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Mr. Arafat has let the Palestinian people down. He hasn't led.

(END VIDEO CLIP)

ANNOUNCER: At the scene of a standoff, waiting on the edge of hope. And in a land of distrust, daring to dream.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I want it to be a peaceful world. I hope it would be.

(END VIDEO CLIP)

ANNOUNCER: LIVE FROM JERUSALEM, "Israel Takes Aim." Now, CNN's Wolf Blitzer.

WOLF BLITZER, CNN ANCHOR: It's just after 3:00 a.m. here in Jerusalem, and just like last night, all eyes are on Bethlehem. We're standing by awaiting developments perhaps at the Church of the Nativity in Manger Square.

Once again, it looks like we are close to a breakthrough in the efforts to end the five-week standoff at that church. Around 120 Palestinians remain inside. But reports say a British military plane is on the way from Cyprus to pick up 13 of the Palestinians now holed up inside the church. Those 13 whom the Israelis call senior terrorists will be taken into exile in European countries. CNN Walter Rodgers once again is standing by at the church. We'll be going to him shortly.

But also, there's another major development we're following tonight, and that involves the situation in Gaza, where the Israelis appear to be taking aim.

(BEGIN VIDEOTAPE)

(voice-over): Israeli army troops moved briefly into the Rafa (ph) area of Gaza, searching for weapons and explosives. It was a relatively modest operation, widely seen by Israelis and Palestinians alike as a prelude to a much larger strike.

Prime Minister Ariel Sharon and Defense Minister Binyamin Ben- Eliezer received authorization from the Israeli cabinet to take any military action they deem necessary to fight terror. This in the aftermath of Tuesday night's suicide bombing just south of Tel Aviv that left 15 Israelis dead. Palestinians were bracing for the worst.

YASSER ABED RABBO, PALESTINIAN INFORMATION MINISTER: It's clear that Sharon intends to continue the war against the Palestinian people.

BLITZER: Just as it did in advance of its most recent military operation on the West Bank, the Israeli army has now begun mobilizing reserve units.

Israeli military sources suggest some sort of combined air and ground assault against selected Palestinian targets is in the works. It would come even as Palestinian leader Yasser Arafat has called on all Palestinians to end terror strikes against Israeli civilians. Palestinian Authority security forces have also rounded up more than a dozen Hamas and other militants in Gaza. Still, Israelis are skeptical.

DAVID HOROWITZ, ISRAELI POLITICAL ANALYST: I think the Israeli public shares the government's dilemma about Yasser Arafat. I think there's no doubt that almost all Israelis have given up any hope of reaching a deal with him. They think he's lying when he talks about cracking down on terrorism. They believe very much that he's inciting and financing terrorism, but they don't know what to do.

BLITZER: In Washington, President Bush was clearly more receptive to what Arafat has said and done.

BUSH: I said I was pleased that Chairman Arafat spoke in Arabic against terrorism. That's good, that's a positive development. Now it's up to Chairman Arafat to perform, to keep them in jail, arrest them and keep them in jail.

BLITZER: Prime Minister Sharon, meanwhile, spent this day, like so many other Israelis, celebrating what they call Jerusalem Day, marking the 35th anniversary of Israel's unification of Jerusalem. ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): As the prime minister of Israel and in the name of the state of Israel, I swear to defend and protect Jerusalem from every guardpost for the Jewish people.

(END VIDEOTAPE)

BLITZER (on camera): About an hour's drive from Jerusalem, Israeli troops are bracing, preparing perhaps for another military assault against Palestinian targets in Gaza. This follows the Israeli cabinet's decision last night to retaliate for Tuesday night's suicide bombing just south of Tel Aviv. CNN's Matthew Chance is in Gaza. He tells us that Palestinians there are bracing for another Israeli incursion.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): Into the Shatar (ph) refugee camp in Gaza, impoverished, overcrowded and the center of Palestinian militancy. We drove through these streets to find residents preparing for a fight.

As Israel ponders its next move, there are sandbags on street corners here, makeshift defenses placed in case the troops are sent in. They can't stop the Israeli army, only make their advance more painful and more difficult. "They won't prevent tanks coming here, Nimma (ph) says, "but at least these bags will protect our doorways from bullets, we hope."

Mounds of earth tipped across the roads are set in places to be landmined with homemade devices to slow any Israeli advance. Inside her kitchen, Nimma's (ph) mother shows me how she's trying to horde whatever little food she can. Stores have drawn out sieges in Ramallah and Bethlehem and in Jenin have taught these people to expect acute shortages when the Israelis are in town. But she says every Palestinian living here is willing to fight.

UNIDENTIFIED FEMALE: We would resist.

CHANCE: "Everyone who has a weapon will use it to defend those who have not," she says. "Gun, knifes or anything else." It may be that Israel's forces will again enter Gaza to dismantle what it says is a terrorist infrastructure here. In places like Shata, it could mean a terrible battle in which lives on both sides are lost.

(on camera): Already, members of Hamas have been detained by the Palestinians, their leaders have gone into hiding and been instructed not to talk to the press. The Palestinian Authority says it is now cracking down on militant groups here, but will it be enough to stop more suicide attacks or a heavy Israeli response?

Matthew Chance, CNN, Gaza.

(END VIDEOTAPE)

BLITZER: In Bethlehem, once again it could, it could be a situation where a breakthrough is imminent, just as was the case last night, but that deal fell apart. And once again, our CNN senior international correspondent, Walter Rodgers, he's on the scene in Bethlehem just outside Manger Square. Walter, what's the state of play right now?

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hello, Wolf. Well, once again, the Israelis are behaving as if they believe they see an end to the five-week long standoff between themselves and the Palestinians at the Church of the Nativity, the traditional site of Jesus' birth.

Most significantly, the Israelis have summoned all journalists not already in Bethlehem interested in covering this story to a checkpoint just outside this small Palestinian town. That indicates the Israelis want news coverage and they're expecting something to cover here later in the day.

Additionally, within the last hour or so, we have seen negotiators coming in and out of the Church of the Nativity. They are, of course, escorted by the custodians of the church, Roman Catholic Franciscan order priests and also the Greek Orthodox priest.

Additionally, there is information that a British military plane has left an RIF base in Cyprus northwest of Israel in the Mediterranean, a large British military base there. That base -- that airplane said to be headed for Israel to pick up the 13 deportees, that is to say the hardcore Palestinians still inside the Church of the Nativity. They would be returned to Cyprus, according to every indication we're getting. Cyprus would then be a processing center for the 13 Palestinians that the Israelis insisted had to be deported from this part of the world. And then, according to the latest reports we're getting from Europe, those 13 deportees would be accepted in various countries around Europe, including Italy and Spain and a number of others.

Still, here in Manger Square at this hour, and it's a little after 3:00 in the morning here, the military is in tight control of the square outside the Church of the Nativity. There's a large Merck of a tank there, and its gun is pointed in the direction of the church. That is not so much an indication of hostile action as an attempt to intimidate the Palestinians inside. That tank, incidentally, has been a bellwether, a kind of weather vane. When we thought yesterday the people inside the church would be evacuated, the Israelis moved that tank out of the square because they didn't want to be putting on too much of a military show. They then moved buses in. There are no buses here yet to evacuate the 123 people inside the Church of the Nativity, but all that could change very quickly as the morning progresses -- Wolf.

BLITZER: And briefly, Walter, remind our viewers, when we spoke 24 hours ago exactly, we thought a deal was imminent within a matter of minutes, perhaps an hour or so. What was the snag that killed that deal last night?

RODGERS: Well, the Israelis say the snag was that after they had signed an agreement with the Palestinians ipso facto, the Palestinians suddenly made a new demand. The Palestinians did not deny that. The Palestinians inside the church suddenly asked for a representative from the European Union or a British diplomat to come inside the church and stay with them as a kind of insurance policy, such that when the other more than 100 people evacuated the church and the 13 hardcore Palestinians stayed behind, they had an insurance policy, an ace in the hole, fearing -- the Palestinians fearing the Israelis might come in and try and get them -- Wolf.

BLITZER: Walter Rodgers in Bethlehem. We'll of course be back to you if any developments occur during the course of this program. Thank you very much, Walter.

Up next, point/counterpoint. We'll speak with a top Palestinian and a top Israeli official about all of the major developments here in the Middle East today. We're back in one minute.

ANNOUNCER: Also ahead, dealing with death. How do families that lost loved ones in terror attacks carry on?

Plus, Israelis celebrate a past victory and worry about an uncertain future. We'll get the mood from the streets of Jerusalem.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We want to have the whole of Jerusalem and peace. And if we will show that we're right, everybody is going to be with us. We just have to be strong.

(END VIDEO CLIP)

ANNOUNCER: President Bush puts pressure on the Palestinian leader.

(BEGIN VIDEO CLIP)

BUSH: Now it's up to Chairman Arafat to perform.

(END VIDEO CLIP)

ANNOUNCER: But can the White House get what it wants from Yasser Arafat? And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Just a little bit excited, a little bit tense.

UNIDENTIFIED FEMALE: What do you mean?

UNIDENTIFIED FEMALE: You have to go there every day so that the people do recognize that you're an Arab woman going into an Arab territory.

(END VIDEO CLIP)

ANNOUNCER: We'll cross the line and take a dangerous journey coming up on LIVE FROM JERUSALEM. (COMMERCIAL BREAK)

ANNOUNCER: One thousand, three hundred forty-five Palestinians and 473 Israelis have been killed since the latest round of violence broke out more than a year and a half ago.

BLITZER: This is an incredibly tense night in Gaza because Israeli forces are reported to be massing along the border with Gaza. A few hours ago, I had a chance to speak with a top Palestinian official who's in Gaza. Nabil Sha'ath is a senior cabinet member. He's the Palestinian Authority's minister for planning and international cooperation. He's also a member of the Fatah central committee. We spoke just a little while ago.

(BEGIN VIDEOTAPE)

Nabil Sha'ath, thanks as usual for joining us. We're hearing reports that the Palestinian security services in Gaza have begun rounding up certain militants, Hamas members, perhaps others. What can you tell us about that?

NABIL SHA'ATH, PALESTINIAN CABINET MEMBER: Well, it's true. I mean, whatever it's possible for the Palestinian security forces, they have been carrying out orders of President Arafat, and they have in fact arrested some of the Hamas leaders and some of their operatives as well. There is quite a hunt for people who may be involved in this last suicidal bombing in Rishon Letzion.

BLITZER: Some Israelis are saying this is simply symbolic, a revolving door, kind of round up the usual suspects, that the Palestinian Authority really doesn't mean it. What do you say to that criticism that I'm hearing from some Israelis?

SHA'ATH: Well, if we want to live by Israeli propaganda, we're not going to get any way forward. I think there is a duty for both Israelis and the Palestinians. If we want to get a real cease-fire, each party has to do its job. The Israelis need to be seen pulling out of the Palestinian territory rather than bracing for yet another offensive. And I'm sure the Palestinian Authority needs to do all it can to stop once and for all attempts by any party to do any killing of Israeli civilians.

BLITZER: I want to get to that bracing for an Israeli military action in a moment. But as you know, the CIA director, George Tenet, is expected to be coming here next week to discuss unifying the entire Palestinian security service operation. Can he do that working together with your various police and paramilitary forces?

SHA'ATH: Well, I don't like the word unifying. I much prefer the word developing, helping, supporting, giving the security organization a chance to rebuild after it has been really decimated by the Israeli forces.

The essence is to really give our security forces a chance after they have been hit so hard by the Israelis rather than assuming that the problem is just question of unification or reunification. I think there's a need for equipment. There's a need for training. There is a need for support on all accounts.

BLITZER: As we speak right now, Nabil Sha'ath, there's widespread anticipation that the Israeli military might be preparing for a strike against various targets where you are in Gaza. There's reports of Israeli troops being mobilized, reserve units. What can you say at this point to try to dissuade, discourage the Israeli government from undertaking that kind of an operation?

SHA'ATH: Well, first of all, the grave and very serious results of this onslaught will be absolutely devastating. The refugee camp in Jenin had 13,000 Palestinians. The refugee camp here in Jabalya here has 120,000 Palestinians packed almost in the same area. Shooting in the air would probably kill people even without aiming. It's going to be a horrible situation if they do.

If they don't, I think we have a much better chance of heading forward to a serious attempt at regaining this peace process and ending this deadly conflict. I think the opportunity for moving ahead, if they don't, is so much better than the tragedy that will ensue if they do.

(END VIDEOTAPE)

BLITZER: Let's get the Israeli perspective. Now joining me now is Dore Gold. He's a former Israeli ambassador to the United Nations, a senior adviser to the Israeli prime minister, Ariel Sharon. Ambassador Gold, thanks for joining us.

DORE GOLD, SHARON SENIOR ADVISER: My pleasure.

BLITZER: In effect, the Palestinians are doing what you want them to do. Arafat did issue the statement. They're rounding up militants. Will this convince your government not to launch military strikes against targets, let's say, in Gaza?

GOLD: Well, the initial reports are that the number of people being rounded up and the level of the individuals involved is not particularly impressive, but Israel has to take measures to defend itself. Hamas has created in Gaza a vast infrastructure of terrorism, which is being used, was just recently used south of Tel Aviv in Rishon Letzion, where we lost 16 Israelis and nearly 60 were wounded.

How many more of these events are supposed to repeat themselves before the world realizes that Israel has a right to defend itself against this kind of terrorism, against these kinds of attacks?

BLITZER: So are you saying that the Israeli military is now poised to strike in Gaza?

GOLD: I'm saying Israel obviously has created an option for itself with certain forces in the area. We have no interest in reoccupying the Gaza Strip. But we do have a need to root out those centers of terrorism that have existed in Gaza that were not handled by the last military operation and which still threaten Israel.

For example, people see all the time these terrible attacks that occur in Israel, these suicide bombings. Many times, you do not see every night the numbers of attempts to infiltrate Israel by terrorists from the Gaza Strip. There is a vast infrastructure. It must be dealt with. The prime minister and defense minister will decide what will be the necessary and appropriate military response.

BLITZER: But Gaza has a million Palestinians packed into a tiny little area surrounded by a fence. If you go in there with a military assault, air strikes or ground assault, a lot of civilians are going to be killed.

GOLD: You know, in the last operations we had in the West Bank, particularly in Jenin, it was demonstrated that Israel, while we have enormous firepower, we have air power, we could call in air strikes, which most militaries would do, we decided to take a different approach.

We risked the lives of Israeli soldiers in very dangerous house- to-house combat so that we could minimize the risk to Palestinians. Israelis died so that Palestinian civilians would not have to be risked, would not have to die. I'm not saying what kind of military response Israel will decide upon ultimately in the Gaza area. But whatever we do, it will meet the standards of morality that we have used in warfare in the past.

BLITZER: But you are saying, without getting into details, there will be some military action in Gaza against Hamas targets?

GOLD: All I can is that the cabinet has authorized the prime minister and the defense minister to take the necessary measures, if they deem it is necessary, and that is an authority they have. And that is certainly a possibility given the vast infrastructure of the Hamas organization, a recognized international terrorist organization that exists in the Gaza Strip.

Let me just add one other point. In the documentation that we found in Yasser Arafat's headquarters and in other Palestinian cities, we found strong evidence of collusion between Palestinian security services and the Hamas organization. We are hopeful that that kind of collusion, that pattern of collusion, will finally end. But clearly, it doesn't at this point give us much confidence in the ability of the Palestinian security forces to deal with the Hamas threat.

BLITZER: But do you agree with President Bush, who yesterday called Chairman Arafat's statement in his words incredibly positive? And today, he sort of repeated that as well, saying it's positive, also welcoming the rounding up of some of these Hamas suspects.

GOLD: Well, it's good always to be optimistic, and optimism is always helpful in the Middle East. But at the same time, the people of Israel have gone through a terrible experience of constant terrorism attacks, and therefore, no one is really holding their breath to expect that Yasser Arafat is going to fundamentally change.

BLITZER: Well, on that point, last night, the Israeli cabinet met in emergency session near Ben Gurion Airport for almost four hours. Some cabinet members did raise the possibility of exiling Yasser Arafat, although there was no formal vote on that issue. That was deferred. Is that in the cards?

GOLD: Again, the documentation we found in the West Bank towns, in Ramallah and in Tulkarem, indicate a deep collusion between Yasser Arafat and the various terrorist organizations that we've been facing. We actually have Yasser Arafat's signature on orders to pay various operatives of the Tanzim, who were involved in attacks on Israeli civilians. So there is a connection there. There is a concern about Yasser Arafat.

What's the best way to deal with this problem is something that the various security services of Israel have raised before the Israeli cabinet. And therefore, our actions reflect the recommendations of our security services, our security organizations and our international political concerns.

BLITZER: Ambassador Dore Gold, thanks for staying up and coming into this program. Appreciate it very much.

GOLD: My pleasure.

BLITZER: Thank you very much.

We have much more on our special LIVE FROM JERUSALEM. We'll be back in a moment.

ANNOUNCER: Terror's other victims. Next, carrying on despite losing family moments and friends.

And later, an unusual friendship that gives hope for the future.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I talk with her just English, and it's working.

(END VIDEO CLIP)

ANNOUNCER: LIVE FROM JERUSALEM, "Israel Takes Aim" returns in a moment.

But first, time for your opinion. Should Yasser Arafat step aside to promote the Mideast peace process? To take the quick vote, head to cnn.com. The AOL key word is CNN.

(COMMERCIAL BREAK)

ANNOUNCER: Go in-depth on the crisis in the Middle East at cnn.com. For a closer look at the issues, the players, a historical timeline and interactive segments, check out our special report, "Mideast: Centuries Of Conflict." For AOL users, the key word is CNN.

BLITZER: The whole world is watching the crisis in the Middle East, especially here in the Middle East. But you might find it hard to believe that there are some families, especially in and around the Tel Aviv area, who have not necessarily been following every diplomatic and military move. Their world unfortunately changed for the worse with an enormous amount of pain following Tuesday night's suicide bombing. Here's CNN's Jason Bellini.

(BEGIN VIDEOTAPE)

JASON BELLINI, CNN CORRESPONDENT (voice over): Time to say goodbye to a life cut short by being in the wrong place at the wrong time. The rabbi consoles the son of a bombing victim, as he says the Kaddish, the Jewish prayer tradition dictates you say for his mother.

Edna Cohen (ph) was celebrating her 44th anniversary with her husband when she became another Israeli victim of suicide attack. Time hasn't had much time to heal wounds. Forty-one hours before, this was a self described happy family, not wealthy, but tight, and Edna was the glue that held this family together.

The entire world should see the picture of a wonderful mother and her four children and a wonderful grandmother to her 11 grandchildren (UNINTELLIGIBLE). Her husband who was holding her hand when the bomb detonated, does not yet know she's not alive. He's at the hospital in critical condition. His doctors say now isn't the right time to tell him. Edna's sister-in-law was with her and her husband for their anniversary celebration. She escaped unharmed.

"I waited for my sister-in-law for three hours" she says. "Finally someone told me, lady all the injured ones we've taken away." Signs posted around her neighborhood listed the time when the buses would leave for Edna's funeral. Our dead Edna Cohen was murdered.

Most Israelis felt after three weeks without one, it was only a matter of time before there would be another bombing attack. Soldiers like her son were preparing for their orders or retaliation. At the time as these soldiers offer their colleague a shoulder to cry on, others in the Israeli Defense Force are gearing up for combat and both Palestinians and Israelis pray for a time when this vicious cycle will come to an end.

Jason Bellini, CNN, Tel Aviv, Israel.

(END VIDEOTAPE)

BLITZER: And in Bethlehem, they appear to be getting close to an agreement at the Church of the Nativity. Diplomats are standing by to receive those 123 individuals inside, especially those 13 Palestinian gunmen described by Israelis as senior Palestinian terrorists. We're monitoring the situation at the Church of the Nativity.

Once there is a development, once we see individuals walk out into those awaiting buses, we'll of course, be there live. We'll be right back.

ANNOUNCER: Still to come, shaping the Israeli-Palestinian future.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In order for there to be peace, there must be, we must root out terror.

ANNOUNCER: We'll look at what's being done at the White House and in the streets and schools of the Middle East. LIVE FROM JERUSALEM, "Israel Takes Aim" continues in a minute.

(COMMERCIAL BREAK)

ANNOUNCER: No country receives more American aid than Israel. U.S. economic and military aid to Israel totals approximately $3 billion a year.

BLITZER: For the second day in a row, President Bush had something nice to say about Yasser Arafat, but he said he wants the Palestinian Leader to back up his words with action. Let's take a closer look at the U.S. attitude towards the Palestinians. Here's CNN's Senior White House Correspondent John King.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: In the short term, the administration believes it has no choice but to deal directly with Yasser Arafat, but there is a great deal of discussions about eventually creating a new Palestinian power structure under which Mr. Arafat would move into a largely symbolic role and day-to- day decision making authority would be put in the hands of others.

KING (voice over): Now this subject came up this week in Mr. Bush's conversations with the Israeli Prime Minister Ariel Sharon and Mr. Sharon left those discussions and told reporters that he and Mr. Bush agreed that Yasser Arafat should be pushed aside now. The President says that is not an accurate description of those conversations, but he does say the Palestinian Authority needs a new constitution and needs to be much more accountable.

BUSH: What is an accurate reflection of my opinion is that Mr. Arafat has let the Palestinian people down. He hasn't led, and one of the things that we did talk about was how to put institutions in place so that a potential Palestinian state can be a peaceful neighbor with Israel.

KING: Administration sources tell CNN the President's discussions with Jordan's King Abdullah and other Arab leaders include talk of creating a position equivalent to that of prime minister and other top policy posts. Under such a scenario, Mr. Arafat would remain the president but that would be a more symbolic job and he would not have the central day-to-day decision making power that he has now, but the U.S. has not discussed such a dramatic change with Mr. Arafat himself, and the Palestinian representative here in Washington says the United States and Israel should have no say in the matter.

HASAN ABDEL RAHMAN, CHIEF PLO REPRESENTATIVE: I don't think it is anyone's business to decide who is the leader of the Palestinian people except the Palestinians themselves.

KING: One senior U.S. official called these discussions "a project in its infancy" and it is the view of the White House that Arab pressure is key to selling Mr. Arafat on any package of reform. It is also the view here at the White House that this is very much a long-term proposition and that Mr. Arafat will remain a central figure of the Palestinian Authority for some time to come. Because of that, it is the President's view, the Secretary of State's view, and the position this administration takes in conversations with Israel, that the United States and Israel have no choice but to deal with Mr. Arafat for now. John King, CNN, the White House.

(END VIDEOTAPE)

BLITZER: And this footnote from Capitol Hill in Washington, Tuesday's suicide bombing here in Israel generated some additional funds from Israel from a House Appropriations Committee. The panel approved some $200 million in extra military assistance for Israel. That's on top of the $2.8 billion that Israel receives annually from the United States. In a gesture to the White House, the panel also approved $50 million in humanitarian assistance to the Palestinians.

Up next, Israelis celebrate their unity. It's been Jerusalem Day here in Jerusalem. We'll tell you all about it when LIVE FROM JERUSALEM continues.

(COMMERCIAL BREAK)

ANNOUNCER: Israelis on Thursday celebrated the reunification of Jerusalem, but Israel actually recaptured east Jerusalem during the June 1967 Six Day War. Confused? Here's why. Israel follows the Hebrew lunar calendar, making today the 35th anniversary of Jerusalem's reunification.

BLITZER: Despite its physical reunification during the 1967 Six Day War, there are still many divisions here in Jerusalem. There certainly are divisions between the Israelis and the Palestinians.

But even among Israel's Jewish population, there are divisions as well and every conceivable mood was on display today as Israelis celebrated what they've come to call Jerusalem Day.

There were young people who weren't even born when Israel captured east Jerusalem in 1967, and there were veterans of the war itself, one of them Prime Minister Ariel Sharon, promised to defend and protect the city and never give up any part of it.

Late into the night, a huge crowd thronged to the Western Wall, the only remnant of Jerusalem's ancient temple. The joyful noise of celebration mixed with the solemn chanting of prayer. Also today, there was time for Jerusalem residents to reflect on their city and their Palestinian neighbors.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: OK, we're celebrating the unity of Jerusalem, and we're celebrating about Jerusalem being one city and not divided up into two. I'm really part of my nation and I'm proud of all the thousands of people that came here today to celebrate with us to show that we're strong and we're happy and we're going to be strong because that we believe that this state is our state and Jerusalem is ours forever. JERROLD KESSEL, CNN CORRESPONDENT: Any difference of this Jerusalem Day compared to previous Jerusalem Days?

UNIDENTIFIED FEMALE: Today, we are even stronger because we know what the truth is. We know that the Jewish nation belongs to Israel and belongs to this land and people feel the obligation to come and show their solidarity with Jerusalem.

KESSEL: What do you say there are least 100,000 and more Palestinians, 150,000 people for whom Jerusalem is their home, what do you say to those who live in Jerusalem?

UNIDENTIFIED FEMALE: I can tell you that the Palestinians, the Arabs that live in Jerusalem are very happy to be part of Israel. You can go and ask them. I know that Arabs that live in Jerusalem are happy to live with us and for sure it's better for them than Arafat or them being in Jordan.

KESSEL: If it was a choice between having peace with the Palestinians and the whole Arab world or having the whole of Jerusalem exclusively Israel, what would you choose?

UNIDENTIFIED FEMALE: We want to have the whole of Jerusalem and peace, and if we will show that we are right, everybody's going to be with us. We just have to be strong and to show that the world that we have to live in one Jerusalem.

(END VIDEOTAPE)

BLITZER: Up next, a unique look at the possibility for better relations between Israelis and Palestinians. We'll take a look at two generations when we come back.

(COMMERCIAL BREAK)

BLITZER: When we cover the Middle East, we always tend to focus in on military leaders or political leaders, but it's the families in this part of the world that matter most, Israeli families, Palestinian families, whether they can live together in harmony or live apart in fear. Our Carol Lin took a closer look at some of the families in this part of the world.

(BEGIN VIDEOTAPE)

REEM (ph) NASSER: I'm just a little bit excited, a little bit tense.

CAROL LIN, CNN CORRESPONDENT (voice over): What do you mean?

R. NASSER: You have to go there every day. The people do recognize that you're an Arab woman going into another territory.

LIN: It's the first time Reem Nasser has tried to cross through the Arab and Jewish neighborhoods of Jerusalem since the worst of the violence.

R. NASSER: I keep on thinking maybe they'll think I'm a Jew, a Jewish woman passing the territory, and they might throw a rock at me.

LIN: But Reem's life has been about navigating on certain roads. Born to Arab parents in Tulkarem, she was only a baby when Israel occupied the West Bank in 1967. Palestinian families were torn apart. She and her mother joined thousands of Palestinian refugees drifting between Jordan and Saudi Arabia until the Israeli government allowed some families to reunite. It had been ten years since she had seen her brothers, who were still in the West Bank.

Reem wants her ten-year-old daughter Nadine to live a very different life, away from conflict and today, Nadine hardly knows the family still in the West Bank, just 20 miles away. You're a world away, aren't you?

NADINE NASSER, NEVE SHALOM STUDENT: Yes because they live like in war and I was scared (UNINTELLIGIBLE).

LIN (on camera): But when you see those images on television out of the West Bank, does it feel personal to you?

N. NASSER: No, it doesn't.

LIN (voice over): Her mother enrolled her in a small alternative school outside of Jerusalem, where Arab and Jewish children live together and learn together in Hebrew and Arabic. Half the teachers at Neve Shalom are Arab, half are Jewish.

LIN (on camera): Neve Shalom did have an unusual start. It was the idealistic dream of a Dominican monk who was born Jewish in Egypt, converted to Christianity in France and then he came to Israel. After the 1967 war, he wanted to build a peace center to answer the question for himself, can Arabs and Jews live together?

LIN (voice over): And in this surreal world, Nadine met her best friend. Gal is Jewish, two different little girls, who giggle and find middle ground.

GAL MISTRO, NEVE SHALOM STUDENT: I joke with her (UNINTELLIGIBLE).

LIN: When Israeli tanks moved into the West Bank this last month, all the troubles there, do you guys talk about it?

MISTRO: I think of her. I think of her family and I think of family (UNINTELLIGIBLE).

N. NASSER: Ourselves, we think about it but we don't talk about it to each other. We were Jews and Arabs in one class and then they said that we had rather like die or something and others said that they have relatives in the West Bank.

LIN: And then what did they tell you? What do your teachers tell you then?

N. NASSER: They didn't say anything.

LIN: The Israeli and Arab school principals say educators can not offer solutions, but they can open children's minds.

DIANE SHALUFI RIZEK, CO-PRINCIPAL: They are in the certain age that they decided what they want to think about what. They're still searching and seeking on their own.

LIN: Nadine will graduate from Neve Shalom to start again at an all Arab secondary school. Gal too leaves for an all Hebrew school. Neve Shalom which means Oasis of Peace may be only that in these girls' lives. Nadine's mother still hopes for more.

R. NASSER: I want it to be a peaceful world where I hope it would be.

LIN: Carol Lin, CNN, Jerusalem.

(END VIDEOTAPE)

BLITZER: Let's see if that can work out. Once again, let's check in with CNN's Walter Rodgers. He's over at the Church of the Nativity in Bethlehem. Walter, any movement, any update since we spoke earlier?

RODGERS: Yes, Wolf, the Palestinian -- the Bethlehem police chief here is now saying he expects the 13 hardcore militants inside the Church of the Nativity, that is those whom the Israelis most want deported, to be leaving here about daybreak; also, the same coming from a Palestinian negotiator.

We can't confirm that, however, and I spoke with Abdullah Daoud (ph) one of the people inside the church, one of the 13, within the last 30 minutes. He was unaware of the fact that they will be moving, as I say as daybreak. I think probably that deadline will slide as everyone has here.

He has said that the 13 deportees inside the church are figuratively and literally in the dark. He said they did believe that they would be evacuated yesterday, but that didn't happen, and again they know very -- they know less than we know out here that is those inside the church.

I asked him if by chance he knew which European country he would be going to because the AP wire has now added Austria, Greece and Luxembourg to Italy and Spain as possible destinations for inside the church. Again, he said he had no idea, this Abdullah Daoud, with whom I spoke by phone inside the Church of the Nativity. He said none of the 13 know where they are going at this point. They're just waiting to be told and again, they missed a deadline yesterday, so they're not too particularly optimistic at this point.

I asked him about his conditions inside the church, and he said well, it's been 38 days now, in his words, without electricity and without much food and water, and he says he really needs a bath. Also I asked him, are you a terrorist as the Israelis say you are? The view of the Palestinian militants inside that church say no the terrorists are the Israeli occupiers. They call themselves freedom fighters. Wolf. BLITZER: Walter Rodgers on the scene in Bethlehem and he'll remain there, of course, if there are developments. We do anticipate there will be developments over the course of the next few hours. CNN, of course, will bring you all that information live as we always do. That's all the time we have for this special report LIVE FROM JERUSALEM. Thanks very much for watching. I'm here. I'll be remaining in Jerusalem to cover, to continue our coverage.

We're bracing not only for developments in Bethlehem, but potentially also in Gaza. We'll have all of those developments as well. I'll be back tomorrow. Until then, thanks very much for watching. I'm Wolf Blitzer in Jerusalem.

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