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2000 an Hour File Past Reagan; Gadhafi Plot to Kill Saudi Crown Prince?

Aired June 10, 2004 - 14:00   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.


MILES O'BRIEN, CNN ANCHOR: Backing off from the battle. Heavy fighting in Najaf, Iraq, but U.S. forces are not getting involved this time. We'll show you why.
KYRA PHILLIPS, CNN ANCHOR: Assassination plot: an investigation into allegations that Libyan leader Moammar Gadhafi's security chiefs were planning a strike on a royal family.

O'BRIEN: And live pictures from the nation's capital. Dignitaries and ordinary Americans paying their respects to Ronald Reagan. This hour, what Reagan's personal letters revealed about him.

PHILLIPS: From the CNN Center in Atlanta, I'm Kyra Phillips.

O'BRIEN: And I'm Miles O'Brien. This hour of CNN's LIVE FROM... begins right now.

PHILLIPS: The world's elite gather tomorrow to bid farewell to former President Ronald Reagan, but today thousands of ordinary people are streaming past Reagan's coffin as his body lies in state in the Capitol Rotunda. CNN congressional correspondent Ed Henry is outside the Capitol -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Many of those people from all around the world also include some dignitaries. We saw just in the last hour Senate Majority Leader Bill Frist escorting in the new Iraqi president, Ghazi al-Yawar. He came through with a large motorcade. We have seen one motorcade after another. A lot of people from around the world.

Sandra Day O'Connor, first female Supreme Court justice, she also filed past the casket of former President Ronald Reagan earlier today. Obviously Reagan was the one who made that historic appointment, the first female on the nation's highest court.

Also Bob Dole, the former Senate majority leader, former presidential candidate, sometimes disagreed with President Reagan on tax cuts and their effect on budget deficits, but obviously we have seen Democrats put differences aside and people like Bob Dole who agreed most of the time with President Reagan coming forward, paying his respects. His wife is in the Senate now, Elizabeth Dole.

Also we have seen, you mentioned a lot of people from around the world who are not celebrities coming through. Each person has a story, some very, very emotional comments. We got a chance to catch up with some of those people to hear their stories. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: This is a very special day. I have been a fan of Ronald Reagan since he became president. And this is my opportunity to say good-bye.

UNIDENTIFIED MALE: He did a great job as a world leader, thank you.

(END VIDEO CLIP)

HENRY: And the dignitaries will keep streaming in throughout the evening. We're expecting Prince Charles to make a visit later this evening. Also former Soviet leader Mikhail Gorbachev -- Kyra.

PHILLIPS: Ed Henry, thank you so much. And former President Reagan was called (UNINTELLIGIBLE) man during his service last night in the U.S. Capitol Rotunda. Afterward, former first lady Nancy Reagan spent a few moments touching the American flag draping her husband's casket. Vice President Cheney remembered Reagan as a man who calmed a turbulent time.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: It's the nature of the city of Washington that men and women arrive, leave their mark and go their way. Some figures who seemed quite large and important in their day are sometimes forgotten or remembered with ambivalence. Yet nearly a generation after the often impassioned debates of the Reagan years, what lingers from that time is almost all good. And this is because of the calm and kind man who stood at the center of events.

(END VIDEO CLIP)

PHILLIPS: The former president's body made a final journey to Washington yesterday. Horse-drawn caisson carried the casket up Constitution Avenue to the nation's Capitol. The formal farewell ends Friday with a funeral service at the National Cathedral. CNN will have a special report. Live coverage of Friday's state funeral of Ronald Reagan begins tomorrow morning, 10 a.m. Eastern right here on CNN.

O'BRIEN: President Bush flies back to Washington later today to pay a special tribute to Ronald Reagan. But for now Mr. Bush is still in Georgia, wrapping up talks with other leaders of the Group of Eight leading industrial nations. CNN White House correspondent Dana Bash joins us live with details.

Dana, we have been talking to Gary Tuchman about this protest. I am going to guess that the president and other seven leaders didn't hear a peep of it?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, we're pretty far away from them, Miles. And I can pretty much guarantee you that they didn't hear a peep about it because they have been kept away from everybody. Sea Island is very much secluded and part of the reason -- a big part of the reason Bush aides say is because of security. They want to make sure that they are secure. But it also means that they don't hear any of the protests because they can't get anywhere near.

But, Miles, at this hour President Bush is wrapping up a lunch with members of the G-8 and African leaders whom he invited to Georgia. They are talking about a host of issues including the pandemic of AIDS and how to better fight that. But the overarching issue at this summit -- this G-8 summit is Iraq.

And of course President Bush got tremendous symbolic support from allies at the beginning of the summit on Tuesday when they supported a U.N. resolution blessing the political process. But he has yet in the past several days to get pledges for any tangible help on the ground in terms of new troops, in terms of new financial aid, even, any promises to forgive Iraq of some of its debt.

And the hope that the divide over Iraq between some of these key leaders is over, it seems to have been frayed a little bit. Differences have emerged over the past 24 hours particularly on the issue of whether or not NATO should have a larger role on the ground in Iraq.

The French president, Jacques Chirac, said it is not a good idea even after Mr. Bush floated the idea that perhaps it should be -- it should happen. And the two men did discuss this issue when they had a one-on-one meeting this morning. But it was clear afterwards with reporters that they did not find agreement on the issue.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I assured the president we will continue to consult closely.

The point is is that we understand that the Iraqi people need help to defend themselves, to rebuild their country and most importantly, to hold elections.

(END VIDEO CLIP)

BASH: Now, the United States had hoped earlier that perhaps NATO could send troops on the ground, but at this point Bush aides are simply saying that NATO could perhaps help to train Iraqi security forces to help get them beefed up. And it is interesting to note that the German chancellor, Gerhard Schroeder, who is also an ardent opponent of the war in Iraq, he just in the last hour talked to reporters.

And he said while he still does not have any intention of sending his own troops to help secure Iraq, he said that he would likely not block NATO from sending troops to help out there. This is all something that will come to a head in just a little over two weeks because all of these leaders will be meeting once again in Istanbul at a NATO summit -- Miles.

O'BRIEN: Dana, still a lot of lingering acrimony over Iraq despite the efforts to show a little more unity this time.

BASH: That is exactly right. And that certainly the unofficial theme of the summit is to close the chapter on the differences over Iraq. That is what White House aides were saying going into the summit. And it's even what French President Jacques Chirac had made clear that he wanted to do even when President Bush was visiting with him over last week in France.

And certainly while they are talking about the fact that they do want to move forward on Iraq, when you get down to the nitty-gritty, to the detail of just how to do that, NATO is a great example. There still are differences over just how this is going to happen.

O'BRIEN: Dana Bash in Savannah. Thank you very much -- Kyra.

PHILLIPS: As a hand-over of power in Iraq nears, frustration sets in over sabotage. Iraq's interim prime minister expresses concern today. Iyad Allawi says that Iraq has lost more than $200 million due to terror acts in the country's oil infrastructure. Mr. Allawi says that there have been more than 130 attacks on Iraq's oil pipelines, one just yesterday. The attacks have become more frequent with only 20 days until the handover.

Iraq's interim prime minister is calling on Iraqis to be vigilant against the insurgency. Deadly fighting continues in the holy city of Najaf. A fragile weekend peace deal has already been broken.

CNN's Guy Raz has the latest now from Najaf.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT: After a week of relative calm in southern Iraq, a break in the peace, this time fighting between Iraqis. Iraqi police forces clashed with guerrillas loyal to the Shiite cleric Muqtada al-Sadr overnight after gunmen opened fire on an Iraqi police station right in the heart of Najaf.

Now according to eyewitnesses, police attempted to detain several suspected thieves when members of the militia approached the police station with rocket-propelled grenades and small arms fire. At least five people were killed in the clashes.

Now according to senior military officials here in Najaf, U.S. forces were asked to aid Iraqi police. That request was denied by senior military officials in part because the fighting was taking place too close to the Imam Ali Shrine, a mosque that is particularly important to Shiite Muslims around the world. Senior U.S. officers believe that had they intervened, it would have certainly exacerbated the fighting there.

Now at the same time, U.S. forces have agreed to rearm Iraqi police, to give them more weapons and ammunition to see if they can bring about stability to Najaf and Kufa. Now last week, U.S. forces agreed to pull out of those cities in an attempt to bring about stability to those two very volatile towns and to end six weeks of fighting here which has killed hundreds of insurgents and an unknown number of civilians.

Guy Raz, CNN, in Najaf.

(END VIDEOTAPE)

O'BRIEN: An assassination plot. Investigators looking into an alleged plan to kill members of a royal family. Details ahead.

And later, Reagan revelations. What the president's letters reveal about his heart and his personal strategy.

Also, SUV en Paris? (UNINTELLIGIBLE). We'll roll that one in later on LIVE FROM..., some commercials (UNINTELLIGIBLE).

(COMMERCIAL BREAK)

PHILLIPS: One Muslim leader is accused of plotting to have another Muslim leader killed. Now the U.S. is investigating it. Libyan leader Moammar Gadhafi is accused in an assassination plot against Crown Prince Abdullah, the ruler of Saudi Arabia. Libya denies this. Both Saudi and American authorities are investigating. They are following up on information from two prisoners, an American Muslim leader, jailed in Virginia, and a Libyan intelligence officer in Saudi Arabia.

O'BRIEN: It's widely known Moammar Gadhafi regards the Saudi monarchy with contempt. So what effect could a plot have on U.S.- Libyan relations which recently have improved? The Saudi government is, of course, an ally to the Bush administration. For some analysis on all of this, we're joined by Craig Unger, author of the "House of Bush, House of Saud."

Mr. Unger, good to have you with us.

CRAIG UNGER, AUTHOR, "HOUSE OF BUSH, HOUSE OF SAUD": Good to be here.

O'BRIEN: First of all, when you consider the sources here, these two people in custody, do you have the sense that this is a plausible scenario? Was there a plot, do you believe that Gadhafi wanted to go after the crown prince of Saudi Arabia?

UNGER: I'm terribly sorry, the sound isn't terrific here, could you repeat that?

O'BRIEN: Do you think the plot was likely. Do you believe that that is, in fact, the case?

UNGER: It's quite possible. There was an explosive discussion back just over a year ago, just before the outbreak of the Iraq war. And you had Crown Prince Abdullah, this was televised, in an open fight with Gadhafi in which they were shouting insults to each other. Again, this is just before the outbreak of the war. And Gadhafi was accusing Abdullah of kowtowing to the United States and secretly supporting the war on Iraq. And this alleged assassination plot appears to have grown out of that. O'BRIEN: All right, well, this comes at, from the Bush administration's perspective, not a very good time inasmuch as Bush has been putting Gadhafi forward as sort of case in point that their strategy in the war on terror works.

UNGER: That's exactly right. It could be terribly embarrassing for the Bush administration, for two reasons. One is, as you say, they have been showing Gadhafi as an example of why the war on terror is successful, that he's apparently given up his war on terror. And yet here he appears to -- is allegedly engaging in a terrorist plot not just against any target but against someone who is Crown Prince Abdullah, who has his hand on the biggest oil spigot in the world.

In addition, it could be embarrassing for another reason. In the 2000 election campaign, then candidate George Bush had a secret strategy trying to win support from Muslim-Americans. One of the people he sought approval from and won approval from was Abdurahman Alamoudi, who is accused of being a part of this plot.

And Alamoudi had actually visited the governor's mansion in Texas when Bush was still governor there. And he, as one of the founders of the American Muslim Council, had supported Bush. Now he's accused of being part of a terrorist plot when the president, of course, is campaigning as a leader on the war on terror.

O'BRIEN: Do you care to speculate on Gadhafi's intentions or motives, if there is in fact a plot in all of this, aside from the fact of what you just said, he has a strong dislike for the Saudi monarchy?

UNGER: Yes, I'm terribly sorry. I cannot hear you again, could you repeat that?

O'BRIEN: You know what, I think we'll probably just end it here if you can't hear us. We're very sorry, Craig Unger, we'll try to get the details -- the audio squared away next time. Thanks very much. We'll be back with more LIVE FROM... in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: So what was Scott Peterson doing the day his pregnant wife vanished? That is the focus of testimony at his double murder trial. Our Rusty Dornin covering the trial in Redwood City, California.

Hello, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Miles, they had a parade of family and friends talking about Scott Peterson's behavior the day his wife Laci disappeared, and of course, the days and weeks following.

Up now, though, they are really interested in the timeline on that fateful day, on Christmas Eve of 2002. What was going on in the neighborhood? What did the neighbors see? What did they hear? First up today was a postman who talked about the fact that nothing unusual had gone on. He didn't see anything unusual. He didn't see their dog out loose. And he delivered the mail about 10:30 in the morning.

Also up now, is Susan Medina. She is one of the neighbors whose house was burglarized some time between Christmas Eve and the twenty- sixth of December. Now the prosecution is claiming, of course, nothing unusual occurred in the neighborhood. But the defense keeps trying to imply perhaps there were transients coming through. Of course, houses were being burglarized.

On cross-examination they are asking her, were you concerned because of these transients from the park? Did you feel unsafe? Is that why you changed your mailbox right before Christmas Eve that year? That sort of thing. So they are trying to establish the possibility that there could have been undesirables and that sort of thing in the neighborhood because they want to prove, of course, that she was abducted, and that's what happened to Laci Peterson.

Meantime, of course, the families of both the defendant and the victim come religiously to court every day. Scott Peterson's parents and his sister, Janey, are there. And for Laci Peterson, of course, her father, her mother and her brother and sister are there daily in the front row.

Up next, we're expecting some police witnesses, we don't know when Amber Frey is going to testify, perhaps in a couple of weeks, but right now it looks like it's going to be -- the next witnesses will be police officers for the Modesto police -- Miles.

O'BRIEN: Rusty Dornin in Redwood City, thanks much -- Kyra.

PHILLIPS: In other news across America, he was on the run for five years. Now attorneys for accused bomber Eric Rudolph want to delay his trial. They filed a motion requesting a federal judge to move the trial from August to June 2005. Rudolph is accused of bombing a women's clinic in Birmingham, Alabama, in 1998.

A civics lesson during today's impeachment hearings against Connecticut Governor John Rowland. A former attorney explains how state ethics commission explained how state laws keep lawmakers from benefiting personally from public office. A legislative committee will hear details later today about gifts that Rowland received.

PHILLIPS: At a golf course in Hayworth (ph), New Jersey, fore, I guess you could say. This small plane crashed on the greens this morning while attempting an emergency landing. Luckily no one was hurt.

(MARKET REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Welcome back. From the CNN Center in Atlanta, this is LIVE FROM... I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips.

Here is what is all new this hour. The other front in the war on terror, the president of Afghanistan opens up to CNN about what his country needs to be secure and to defeat terrorists.

O'BRIEN: And former President Ronald Reagan known as a private man, but his letters reveal a lot about his personality and strategy.

First, the top stories we're following for you.

Tens of thousands of people filing past the remains of Ronald Reagan at the U.S. Capitol. At least 2000 an hour made their way slowly past the casket in the Rotunda. It will lie there in state until 7:00 a.m. on Friday.

G-8 leaders are wrapping up their summit on Sea Island, Georgia with the focus on the Middle East and Africa. The group endorsed Israeli Prime Minister Ariel Sharon's plan to withdraw from Palestinian territories, but said the move must be accompanied by broader peace talks. African leaders discussed the AIDS crisis, debt relief and the humanitarian situation in Sudan.

A small protest on nearby St. Simons Island ended with the arrest of at least 12 demonstrators. About 30 protesters tried to cross a bridge onto Seas Island. They were outnumbered by about a hundred police or so. Officials say those arrested face misdemeanor charges.

Libya denying reports that its leader, Moammar Gadhafi, was plotting to assassinate Saudi Arabia's crown prince. The U.S. and Saudi are investigating. They're following up on information from two prisoners, one in jail in Virginia, and a Libya held in Saudi Arabia.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired June 10, 2004 - 14:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Backing off from the battle. Heavy fighting in Najaf, Iraq, but U.S. forces are not getting involved this time. We'll show you why.
KYRA PHILLIPS, CNN ANCHOR: Assassination plot: an investigation into allegations that Libyan leader Moammar Gadhafi's security chiefs were planning a strike on a royal family.

O'BRIEN: And live pictures from the nation's capital. Dignitaries and ordinary Americans paying their respects to Ronald Reagan. This hour, what Reagan's personal letters revealed about him.

PHILLIPS: From the CNN Center in Atlanta, I'm Kyra Phillips.

O'BRIEN: And I'm Miles O'Brien. This hour of CNN's LIVE FROM... begins right now.

PHILLIPS: The world's elite gather tomorrow to bid farewell to former President Ronald Reagan, but today thousands of ordinary people are streaming past Reagan's coffin as his body lies in state in the Capitol Rotunda. CNN congressional correspondent Ed Henry is outside the Capitol -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Many of those people from all around the world also include some dignitaries. We saw just in the last hour Senate Majority Leader Bill Frist escorting in the new Iraqi president, Ghazi al-Yawar. He came through with a large motorcade. We have seen one motorcade after another. A lot of people from around the world.

Sandra Day O'Connor, first female Supreme Court justice, she also filed past the casket of former President Ronald Reagan earlier today. Obviously Reagan was the one who made that historic appointment, the first female on the nation's highest court.

Also Bob Dole, the former Senate majority leader, former presidential candidate, sometimes disagreed with President Reagan on tax cuts and their effect on budget deficits, but obviously we have seen Democrats put differences aside and people like Bob Dole who agreed most of the time with President Reagan coming forward, paying his respects. His wife is in the Senate now, Elizabeth Dole.

Also we have seen, you mentioned a lot of people from around the world who are not celebrities coming through. Each person has a story, some very, very emotional comments. We got a chance to catch up with some of those people to hear their stories. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: This is a very special day. I have been a fan of Ronald Reagan since he became president. And this is my opportunity to say good-bye.

UNIDENTIFIED MALE: He did a great job as a world leader, thank you.

(END VIDEO CLIP)

HENRY: And the dignitaries will keep streaming in throughout the evening. We're expecting Prince Charles to make a visit later this evening. Also former Soviet leader Mikhail Gorbachev -- Kyra.

PHILLIPS: Ed Henry, thank you so much. And former President Reagan was called (UNINTELLIGIBLE) man during his service last night in the U.S. Capitol Rotunda. Afterward, former first lady Nancy Reagan spent a few moments touching the American flag draping her husband's casket. Vice President Cheney remembered Reagan as a man who calmed a turbulent time.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: It's the nature of the city of Washington that men and women arrive, leave their mark and go their way. Some figures who seemed quite large and important in their day are sometimes forgotten or remembered with ambivalence. Yet nearly a generation after the often impassioned debates of the Reagan years, what lingers from that time is almost all good. And this is because of the calm and kind man who stood at the center of events.

(END VIDEO CLIP)

PHILLIPS: The former president's body made a final journey to Washington yesterday. Horse-drawn caisson carried the casket up Constitution Avenue to the nation's Capitol. The formal farewell ends Friday with a funeral service at the National Cathedral. CNN will have a special report. Live coverage of Friday's state funeral of Ronald Reagan begins tomorrow morning, 10 a.m. Eastern right here on CNN.

O'BRIEN: President Bush flies back to Washington later today to pay a special tribute to Ronald Reagan. But for now Mr. Bush is still in Georgia, wrapping up talks with other leaders of the Group of Eight leading industrial nations. CNN White House correspondent Dana Bash joins us live with details.

Dana, we have been talking to Gary Tuchman about this protest. I am going to guess that the president and other seven leaders didn't hear a peep of it?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, we're pretty far away from them, Miles. And I can pretty much guarantee you that they didn't hear a peep about it because they have been kept away from everybody. Sea Island is very much secluded and part of the reason -- a big part of the reason Bush aides say is because of security. They want to make sure that they are secure. But it also means that they don't hear any of the protests because they can't get anywhere near.

But, Miles, at this hour President Bush is wrapping up a lunch with members of the G-8 and African leaders whom he invited to Georgia. They are talking about a host of issues including the pandemic of AIDS and how to better fight that. But the overarching issue at this summit -- this G-8 summit is Iraq.

And of course President Bush got tremendous symbolic support from allies at the beginning of the summit on Tuesday when they supported a U.N. resolution blessing the political process. But he has yet in the past several days to get pledges for any tangible help on the ground in terms of new troops, in terms of new financial aid, even, any promises to forgive Iraq of some of its debt.

And the hope that the divide over Iraq between some of these key leaders is over, it seems to have been frayed a little bit. Differences have emerged over the past 24 hours particularly on the issue of whether or not NATO should have a larger role on the ground in Iraq.

The French president, Jacques Chirac, said it is not a good idea even after Mr. Bush floated the idea that perhaps it should be -- it should happen. And the two men did discuss this issue when they had a one-on-one meeting this morning. But it was clear afterwards with reporters that they did not find agreement on the issue.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I assured the president we will continue to consult closely.

The point is is that we understand that the Iraqi people need help to defend themselves, to rebuild their country and most importantly, to hold elections.

(END VIDEO CLIP)

BASH: Now, the United States had hoped earlier that perhaps NATO could send troops on the ground, but at this point Bush aides are simply saying that NATO could perhaps help to train Iraqi security forces to help get them beefed up. And it is interesting to note that the German chancellor, Gerhard Schroeder, who is also an ardent opponent of the war in Iraq, he just in the last hour talked to reporters.

And he said while he still does not have any intention of sending his own troops to help secure Iraq, he said that he would likely not block NATO from sending troops to help out there. This is all something that will come to a head in just a little over two weeks because all of these leaders will be meeting once again in Istanbul at a NATO summit -- Miles.

O'BRIEN: Dana, still a lot of lingering acrimony over Iraq despite the efforts to show a little more unity this time.

BASH: That is exactly right. And that certainly the unofficial theme of the summit is to close the chapter on the differences over Iraq. That is what White House aides were saying going into the summit. And it's even what French President Jacques Chirac had made clear that he wanted to do even when President Bush was visiting with him over last week in France.

And certainly while they are talking about the fact that they do want to move forward on Iraq, when you get down to the nitty-gritty, to the detail of just how to do that, NATO is a great example. There still are differences over just how this is going to happen.

O'BRIEN: Dana Bash in Savannah. Thank you very much -- Kyra.

PHILLIPS: As a hand-over of power in Iraq nears, frustration sets in over sabotage. Iraq's interim prime minister expresses concern today. Iyad Allawi says that Iraq has lost more than $200 million due to terror acts in the country's oil infrastructure. Mr. Allawi says that there have been more than 130 attacks on Iraq's oil pipelines, one just yesterday. The attacks have become more frequent with only 20 days until the handover.

Iraq's interim prime minister is calling on Iraqis to be vigilant against the insurgency. Deadly fighting continues in the holy city of Najaf. A fragile weekend peace deal has already been broken.

CNN's Guy Raz has the latest now from Najaf.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT: After a week of relative calm in southern Iraq, a break in the peace, this time fighting between Iraqis. Iraqi police forces clashed with guerrillas loyal to the Shiite cleric Muqtada al-Sadr overnight after gunmen opened fire on an Iraqi police station right in the heart of Najaf.

Now according to eyewitnesses, police attempted to detain several suspected thieves when members of the militia approached the police station with rocket-propelled grenades and small arms fire. At least five people were killed in the clashes.

Now according to senior military officials here in Najaf, U.S. forces were asked to aid Iraqi police. That request was denied by senior military officials in part because the fighting was taking place too close to the Imam Ali Shrine, a mosque that is particularly important to Shiite Muslims around the world. Senior U.S. officers believe that had they intervened, it would have certainly exacerbated the fighting there.

Now at the same time, U.S. forces have agreed to rearm Iraqi police, to give them more weapons and ammunition to see if they can bring about stability to Najaf and Kufa. Now last week, U.S. forces agreed to pull out of those cities in an attempt to bring about stability to those two very volatile towns and to end six weeks of fighting here which has killed hundreds of insurgents and an unknown number of civilians.

Guy Raz, CNN, in Najaf.

(END VIDEOTAPE)

O'BRIEN: An assassination plot. Investigators looking into an alleged plan to kill members of a royal family. Details ahead.

And later, Reagan revelations. What the president's letters reveal about his heart and his personal strategy.

Also, SUV en Paris? (UNINTELLIGIBLE). We'll roll that one in later on LIVE FROM..., some commercials (UNINTELLIGIBLE).

(COMMERCIAL BREAK)

PHILLIPS: One Muslim leader is accused of plotting to have another Muslim leader killed. Now the U.S. is investigating it. Libyan leader Moammar Gadhafi is accused in an assassination plot against Crown Prince Abdullah, the ruler of Saudi Arabia. Libya denies this. Both Saudi and American authorities are investigating. They are following up on information from two prisoners, an American Muslim leader, jailed in Virginia, and a Libyan intelligence officer in Saudi Arabia.

O'BRIEN: It's widely known Moammar Gadhafi regards the Saudi monarchy with contempt. So what effect could a plot have on U.S.- Libyan relations which recently have improved? The Saudi government is, of course, an ally to the Bush administration. For some analysis on all of this, we're joined by Craig Unger, author of the "House of Bush, House of Saud."

Mr. Unger, good to have you with us.

CRAIG UNGER, AUTHOR, "HOUSE OF BUSH, HOUSE OF SAUD": Good to be here.

O'BRIEN: First of all, when you consider the sources here, these two people in custody, do you have the sense that this is a plausible scenario? Was there a plot, do you believe that Gadhafi wanted to go after the crown prince of Saudi Arabia?

UNGER: I'm terribly sorry, the sound isn't terrific here, could you repeat that?

O'BRIEN: Do you think the plot was likely. Do you believe that that is, in fact, the case?

UNGER: It's quite possible. There was an explosive discussion back just over a year ago, just before the outbreak of the Iraq war. And you had Crown Prince Abdullah, this was televised, in an open fight with Gadhafi in which they were shouting insults to each other. Again, this is just before the outbreak of the war. And Gadhafi was accusing Abdullah of kowtowing to the United States and secretly supporting the war on Iraq. And this alleged assassination plot appears to have grown out of that. O'BRIEN: All right, well, this comes at, from the Bush administration's perspective, not a very good time inasmuch as Bush has been putting Gadhafi forward as sort of case in point that their strategy in the war on terror works.

UNGER: That's exactly right. It could be terribly embarrassing for the Bush administration, for two reasons. One is, as you say, they have been showing Gadhafi as an example of why the war on terror is successful, that he's apparently given up his war on terror. And yet here he appears to -- is allegedly engaging in a terrorist plot not just against any target but against someone who is Crown Prince Abdullah, who has his hand on the biggest oil spigot in the world.

In addition, it could be embarrassing for another reason. In the 2000 election campaign, then candidate George Bush had a secret strategy trying to win support from Muslim-Americans. One of the people he sought approval from and won approval from was Abdurahman Alamoudi, who is accused of being a part of this plot.

And Alamoudi had actually visited the governor's mansion in Texas when Bush was still governor there. And he, as one of the founders of the American Muslim Council, had supported Bush. Now he's accused of being part of a terrorist plot when the president, of course, is campaigning as a leader on the war on terror.

O'BRIEN: Do you care to speculate on Gadhafi's intentions or motives, if there is in fact a plot in all of this, aside from the fact of what you just said, he has a strong dislike for the Saudi monarchy?

UNGER: Yes, I'm terribly sorry. I cannot hear you again, could you repeat that?

O'BRIEN: You know what, I think we'll probably just end it here if you can't hear us. We're very sorry, Craig Unger, we'll try to get the details -- the audio squared away next time. Thanks very much. We'll be back with more LIVE FROM... in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: So what was Scott Peterson doing the day his pregnant wife vanished? That is the focus of testimony at his double murder trial. Our Rusty Dornin covering the trial in Redwood City, California.

Hello, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Miles, they had a parade of family and friends talking about Scott Peterson's behavior the day his wife Laci disappeared, and of course, the days and weeks following.

Up now, though, they are really interested in the timeline on that fateful day, on Christmas Eve of 2002. What was going on in the neighborhood? What did the neighbors see? What did they hear? First up today was a postman who talked about the fact that nothing unusual had gone on. He didn't see anything unusual. He didn't see their dog out loose. And he delivered the mail about 10:30 in the morning.

Also up now, is Susan Medina. She is one of the neighbors whose house was burglarized some time between Christmas Eve and the twenty- sixth of December. Now the prosecution is claiming, of course, nothing unusual occurred in the neighborhood. But the defense keeps trying to imply perhaps there were transients coming through. Of course, houses were being burglarized.

On cross-examination they are asking her, were you concerned because of these transients from the park? Did you feel unsafe? Is that why you changed your mailbox right before Christmas Eve that year? That sort of thing. So they are trying to establish the possibility that there could have been undesirables and that sort of thing in the neighborhood because they want to prove, of course, that she was abducted, and that's what happened to Laci Peterson.

Meantime, of course, the families of both the defendant and the victim come religiously to court every day. Scott Peterson's parents and his sister, Janey, are there. And for Laci Peterson, of course, her father, her mother and her brother and sister are there daily in the front row.

Up next, we're expecting some police witnesses, we don't know when Amber Frey is going to testify, perhaps in a couple of weeks, but right now it looks like it's going to be -- the next witnesses will be police officers for the Modesto police -- Miles.

O'BRIEN: Rusty Dornin in Redwood City, thanks much -- Kyra.

PHILLIPS: In other news across America, he was on the run for five years. Now attorneys for accused bomber Eric Rudolph want to delay his trial. They filed a motion requesting a federal judge to move the trial from August to June 2005. Rudolph is accused of bombing a women's clinic in Birmingham, Alabama, in 1998.

A civics lesson during today's impeachment hearings against Connecticut Governor John Rowland. A former attorney explains how state ethics commission explained how state laws keep lawmakers from benefiting personally from public office. A legislative committee will hear details later today about gifts that Rowland received.

PHILLIPS: At a golf course in Hayworth (ph), New Jersey, fore, I guess you could say. This small plane crashed on the greens this morning while attempting an emergency landing. Luckily no one was hurt.

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O'BRIEN: Welcome back. From the CNN Center in Atlanta, this is LIVE FROM... I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips.

Here is what is all new this hour. The other front in the war on terror, the president of Afghanistan opens up to CNN about what his country needs to be secure and to defeat terrorists.

O'BRIEN: And former President Ronald Reagan known as a private man, but his letters reveal a lot about his personality and strategy.

First, the top stories we're following for you.

Tens of thousands of people filing past the remains of Ronald Reagan at the U.S. Capitol. At least 2000 an hour made their way slowly past the casket in the Rotunda. It will lie there in state until 7:00 a.m. on Friday.

G-8 leaders are wrapping up their summit on Sea Island, Georgia with the focus on the Middle East and Africa. The group endorsed Israeli Prime Minister Ariel Sharon's plan to withdraw from Palestinian territories, but said the move must be accompanied by broader peace talks. African leaders discussed the AIDS crisis, debt relief and the humanitarian situation in Sudan.

A small protest on nearby St. Simons Island ended with the arrest of at least 12 demonstrators. About 30 protesters tried to cross a bridge onto Seas Island. They were outnumbered by about a hundred police or so. Officials say those arrested face misdemeanor charges.

Libya denying reports that its leader, Moammar Gadhafi, was plotting to assassinate Saudi Arabia's crown prince. The U.S. and Saudi are investigating. They're following up on information from two prisoners, one in jail in Virginia, and a Libya held in Saudi Arabia.

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