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Kidnapped Marine May be Heading Home; What Does Edwards Bring to the Ticket?; Iraqi Security Clashes with Insurgents; Nuclear Materials Removed from Iraq; Pastor on Trial in Exorcism Death

Aired July 07, 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: A family phone call: a new development in the case of a captured American Marine. His family says they've heard from him. We're live on the story, of course.
(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We've got a better sense of what's happening to America, and we've got better hair. I'll tell you that goes a long way.

(END VIDEO CLIP)

O'BRIEN: Compelling style and substance. Democrats hit the road this hour. How voters and President Bush are responding to the new V.P. choice.

In security in Iraq, violence in the streets of Baghdad and a new set of laws on the books testing the new government.

SEAN CALLEBS, CNN CORRESPONDENT: The United States takes nearly two tons of nuclear and radioactive material out of Iraq. We'll tell you where it's headed and why. I'm Sean Callebs in Washington. We'll have that story.

O'BRIEN: From the CNN center in Atlanta, I'm Miles O'Brien. Kyra Phillips is off today. This hour of CNN's LIVE FROM begins right now.

And we begin with the mysterious case of Marine Corporal Wassef Hassoun. His family is reporting a phone call from the Marine who's been missing now for some time out of Iraq, apparently abducted.

We get more on the story now from CNN's Rusty Dornin, joining us live on the telephone from West Jordan. She's actually live in person from West Jordan, Utah -- Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Miles, the family is not saying anything right now, either in Lebanon or here in West Jordan. But a source close to the family says that Corporal Wassef Hassoun did call them and said that he was in Lebanon and he wanted to be picked up.

He told them that he had called the U.S. embassy in Beirut and asked to be picked up by the members in the U.S. embassy there. Now, none of this has been confirmed either by the State Department or the Pentagon. The families, as well, have not been able to confirm it from the embassy in Beirut.

But they say that -- the source says the family said that Hassoun sounded happy, safe, well, sounded 100 percent was the actual quote that the source said that the family felt about Hassoun.

So, we are expecting some kind of news conference here later today from the family when they do get confirmation from the U.S. embassy in Lebanon -- Miles.

O'BRIEN: All right, Rusty. Lots to sort out. This -- this is still a mystery, isn't it? We still have a lot of unanswered questions, which hopefully we'll be getting some answers soon now that Corporal Hassoun has surfaced.

What -- This family has been on this incredible roller coaster. It's hard to even imagine what they've been through.

DORNIN: It's -- every -- Well, of course, since his capture and the video of his capture. But since Saturday, every single day has brought a new twist and turn for this family, and unconfirmed reports of his release.

Now the family here yesterday was not -- really that excited about this news from the family in Lebanon that they believed he was alive. They just weren't sure. They wanted more confirmation.

Now the source that's close to the family is saying they feel they do have confirmation that he is alive. He is safe. And that he is in Lebanon. Where he is, however, is still a mystery.

And of course, there are so many questions, as you say, to be answered about when -- how he was captured, the events leading up to his capture, that sort of thing. And also how he was released, where he was released and how he got to Lebanon.

O'BRIEN: All right. CNN's Rusty Dornin, we hope to hear more a little bit later from her, as well as the family. Thanks very much. Stay close.

First appearances mean everything, and today Senator John Kerry and his No. 2, John Edwards, trying to build momentum as they hit the campaign trail together for the first time.

The presumptive Democratic nominee started the day with their families in Pennsylvania. And then they took off for the battleground state of Ohio. There, Kerry and Edwards sent the message that they will be the team to beat in November.

(BEGIN VIDEO CLIP)

KERRY: Let me ask you something, do you believe that John Edwards is going to be a vice president who understands and defends the values of America? Do you believe John Edwards is going to show the courage and the conviction that has always made him a champion of the middle class?

Do you think that John Edwards is going to be a environment who speaks of the hope and the optimism that are at the core of who we are as Americans? So will John Edwards be one of the best vice presidents this country has ever had?

(END VIDEO CLIP)

O'BRIEN: Of course, John Edwards is a relative newcomer to politics, so what does he bring to the Kerry/Edwards ticket? CNN senior political analyst Bill Schneider takes a look.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN POLITICAL ANALYST (voice-over): What did we learn about John Edwards from the Democratic primary? We learned that he's a happy warrior, something not often said about John Kerry.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: My campaign is about something bigger and stronger. It's about an uplifting positive vision for America.

SCHNEIDER: Edwards' positive campaign resonated with Democratic primary voters.

Let's look at Wisconsin, the showdown state in the primaries and a crucial midwestern swing state in November. Edwards was the run away favorite among Wisconsin voters who said they wanted a positive message.

John Kerry is a New England patrician, hardly a populist, while Edwards is often compared with Bill Clinton as a candidate with the common touch.

EDWARDS: I want to be a champion for the people I have fought for all my life. Regular people.

SCHNEIDER: The top choice of Wisconsin primary voters looking for a candidate who cares about people: John Edwards.

Edwards' message is one of economic populism.

EDWARDS: Closing the great divide that exists between America, those who live lives of privilege and never have to worry about a thing and then most of America.

SCHNEIDER: Sure enough, Wisconsin Democrats who said their main concern was the economy and jobs went for Edwards.

Then how come Kerry won the Wisconsin primary? Same reason he won almost every other primary: voters felt Kerry had the right experience.

Edwards tried to make a virtue of his inexperience by running as a Washington outsider. But Democrats weren't looking for an outsider this year. They were looking for someone who could beat George W. Bush. Questions were raised about Edwards' ability to do that.

UNIDENTIFIED FEMALE: With less than one full Senate term under your belt how do you convince American voters that you can go head to head with the Bush foreign policy team?

SCHNEIDER: He couldn't. Wisconsin Democrats looking for a candidate who could beat Bush went three to one for Kerry over Edwards.

That's why Edwards is not at the top of the ticket. But his lack of experience may not matter so much in the No. 2 spot.

(on camera) What does the choice of Edwards say about Kerry? It says Kerry is secure enough that he does not feel threatened by a young, attractive, ambitious running mate who's strong where Kerry is weak.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

O'BRIEN: Political pollsters wasting no time, of course, trying to gauge reaction to the Kerry/Edwards union. A CNN/"USA Today"/Gallup poll taken yesterday finds 64 percent of registered voters view the choice of Edwards as excellent or good.

That's more than his predecessor. Fifty-five percent of voters felt the same way about Dick Cheney in 2000. His Democratic rival Joe Lieberman got a 53 percent favorable rating. Forty-four percent of voters thought the same of Dan Quayle back in '88.

Tomorrow night, John Kerry and his wife Teresa Heinz Kerry will take your calls and answer questions about the campaign. That is on CNN's "LARRY KING LIVE," 9 Eastern, 6 Pacific right here on CNN.

President Bush took the opportunity to stump on Edwards' home turf today. The president traveled to North Carolina to attend a fund raiser and meet with judicial nominees that have yet to be confirmed, something he blames on John Edwards.

Mr. Bush was blunt when asked how Edwards compared to his No. 2.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's being described today as charming, engaging, a nimble campaigner, a populist and even sexy. How does he stack up against Dick Cheney?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Dick Cheney can be president. Next?

(END VIDEO CLIP)

O'BRIEN: The president was also asked whether Edwards is ready for the job.

(BEGIN VIDEO CLIP)

BUSH: That will be up to the voters to decide. But I'll tell you what I think about North Carolina. I did well here in 2000, because the North Carolinian voter understood we shared values.

(END VIDEO CLIP)

O'BRIEN: President Bush is to make a similar appearance later today in Michigan.

Faced with relentless rebel violence, Iraq's interim government now has the power to declare martial law. Even as leaders announced the new security measure, insurgents and security forces waged a bloody gun battle on the streets of the capital.

Details from Baghdad bureau chief Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: U.S. military officials say the fighting went on for four hours in a neighborhood in central Baghdad.

This was Haifa Street, west of the Tigris River, and a major residential neighborhood, where according to this official, gang members, possibly insurgents, opened fire on the Iraqi National Guard. This is a new security force that's being built up, and they are increasingly patrolling.

As they did, apparently the insurgents opened fire, according to witnesses, with small arms and rocket-propelled grenades. Some of those bullets went in the direction of the Iraqi police station nearby, which is when they called for reinforcements.

Reinforcements were U.S. soldiers and armored vehicles and helicopters. The senior military official says they did not fire a shot, that the Iraqi police and the security forces on the ground took part in the battle, but the Americans stayed on the sidelines and let them do their job.

Now in the end at least two people were killed and more than a dozen injured. Unclear as to whether they are civilians or security forces.

That battle broke out shortly before the announcement of new security measures by Iraq's interim government, aimed at cracking down on insurgents. This plan would allow the interim prime minister to do things like house to house searches, impose curfews, possibly ban public gatherings.

But the human rights minister and justice minister, who announced that they were setting up a committee to help monitor possible human rights violations and make sure they didn't happen, said it includes a series of checks and balances.

One of those would be that the prime minister would have to get the approval of the president, both his deputies, and the majority of cabinet to sign off on any of those measures he's invoking.

And according to the interior ministry, Iraqi police have defused what sounds like a large car bomb in central Baghdad. They said Iraqi police found it and defused it before it went off.

Jane Arraf, CNN, reporting from Baghdad.

(END VIDEOTAPE)

O'BRIEN: The Department of Energy says the U.S. has taken steps to keep some potentially dangerous radioactive materials in Iraq out of the hands of terrorists.

CNN's Sean Callebs in our Washington bureau with details on this -- Sean.

CALLEBS: Indeed, Miles.

Under a shroud of secrecy nearly two tons of nuclear and radioactive material were whisked away from Iraq and are now in an undisclosed secure Department of Energy site in the United States.

Energy Secretary Spencer Abraham is calling this attempt to keep potentially dangerous materials out of the hands of terrorists.

Authorities say the material was gathered from around Iraq and brought to Iraq's main nuclear site, the Tuwaitha Nuclear Research Center, southeast of Baghdad. The radioactive material could have industrial and medical applications but could also be used to create a weapon.

The U.S. military provided security and actually airlifted the material to the United States. A physicist with the Federation of American Scientists, Ivan Ulrich (ph), says he's pleased the U.S. is removing the radioactive and nuclear material from Iraq saying, quote, "This is something we should be doing all over the world and provide a better way of tracking such material" -- Miles.

O'BRIEN: Let's try to put -- any time people hear radioactive and nuclear they get very nervous. Let's try to -- try to put this in some perspective. What is the real potential threat here?

CALLEBS: Exactly. Really, it's twofold. Let's first discuss the radioactive. The radioactive material that comes from such areas as medical waste could, according to the Department of Energy, be rolled into a dirty bomb with relative ease.

Now although a dirty bomb probably wouldn't cause mass casualties, it would fuel chaos and at the same time cause panic and perhaps render an area uninhabitable for some time.

The second concern: low enriched uranium. It could very well be on the road to being highly enriched one day and theoretically be powerful enough to be considered weapons grade, a major concern, if indeed it would go down that road, Miles. O'BRIEN: All right. Two tons of material now. We presume it's safe and sound in the hands of the Department of Energy, maybe at one of their labs that is designed to protect this kind of thing.

Long range, will it just stay there or what will happen to it?

CALLEBS: It could also be at a site -- at a low level site where it is disposed of. The radioactive -- the radioactive material, the industrial medical waste and such, will end up in a waste site here in the United States.

But the low enriched uranium has a far different fate. It is suitable for commercial use. The plan right now is to sell it to U.S. vendors, perhaps nuclear power plants. Right now, however, none of it has been sold -- Miles.

O'BRIEN: Sean Callebs, thank you very much. Appreciate it.

Deciding guilt or innocence in a case involving an exorcism, a church and a little boy who lost his life. We'll have details on that one just ahead.

A frightening look at terror groups operating in Iraq, the journalist who got some amazing video shares his story.

And later, breaking stereotypes and pushing the boundaries of ballet. With this dance group thin is definitely not in.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

O'BRIEN: Checking news across America now.

Arizona firefighters hoping to save the $200 million Mount Graham observatory from raging wild fires. But they're less optimistic about some 90 summer cabins that are nearby.

Other wild fires near Payson and Flagstaff have been disrupting power flow and interstate traffic.

An endangered Hawaiian monk seal is back home in waters off an island in Hawaii after surgeons removed a large fishhook from his mouth. The sea mammal headed straight for the surf after a scientist set his cage on a beach and opened the door.

The New York/New Jersey fire department says fumes that forced a hotel evacuation today came from a transformer fire. Fifteen guests at the hotel near Newark Liberty International Airport suffered nausea. They were taken to hospitals as a precaution.

We've been following the story of Corporal Wassef Hassoun, the Marine corporal who has been missing from Iraq since June 20. All kinds of developments right now. The source so far has been the family indicating they received a telephone call from Corporal Hassoun, indicating he's just fine and awaiting word from the American embassy in Beirut, Lebanon, as to what would happen next.

CNN's Barbara Starr has been working this story from her post at the Pentagon. She joins us now -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Miles.

Now Pentagon officials, military sources here are not yet ready to confirm any details, they say, officially. They know nothing about this.

But, indeed, a source close to the Hassoun family out in Utah has told CNN's Rusty Dornin that Marine Corporal Wassef Ali Hassoun called his family today. Said he has been released from custody, is safe, is in Lebanon and is asking to be picked up at an undisclosed location by representatives of the U.S. government.

The source close to the family told Rusty Dornin that Corporal Hassoun sounded healthy and happy. This apparently is what is leading to the family's statements out in Utah that they believe Corporal Hassoun has been released and is in safe hands.

No word, we must emphasize, from the United States military here in the Pentagon confirming any of these details. Officially, Corporal Hassoun remains listed as captured. Sources here say they know nothing about his current status. But, of course, everyone is waiting anxiously to see what develops in the hours ahead -- Miles.

O'BRIEN: CNN's Barbara Starr at the Pentagon. Keep us posted. Thank you.

O'BRIEN: In Milwaukee, Wisconsin, a chilling trial continues. It involves a janitor moonlighting as a preacher, an exorcism and the death of an 8-year-old boy.

CNN's Chris Lawrence with the story.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Ray Hemphill sat silently Tuesday in a Milwaukee courtroom where a jury will soon decide if he should be punished for performing an exorcism that left an 8-year-old autistic boy dead.

Last August, Terrance Cottrell's mother took him to the strip mall church for a prayer session. A neighbor says Terrance's mother is a zealous convert who believed evil spirits spoke through her son.

DENISE ALLISON, NEIGHBOR: She said he said, "Kill me. Take me. Kill me."

I was like, "Are you serious?" I couldn't really believe that.

LAWRENCE: Terrance's mother went to Hemphill for help, and he offered to pray for the boy to be healed.

But Hemphill is no ordained minister. He's a school janitor who'd been moonlighting as a preacher.

(on camera) By all accounts this was an intense two-hour session. Hemphill's shirt was soaked with sweat from lying on top of Terrance as the little boy was held down by other church members and his own mother.

(voice-over) Hemphill's attorney said this was at least the ninth prayer service at this church, and nothing had gone wrong before. He'll argue that drugs contributed to Cottrell's death. A toxicology report shows Terrance's system had toxic blood levels of at least two drugs, an antihistamine and antipsychotic.

The medical examiner ruled the death homicide by suffocation, but the D.A. says he couldn't prove Hemphill knew what he was doing would kill the boy. So a jury will decide whether he's guilty of felony child abuse, which carries a maximum sentence of five years.

Chris Lawrence, CNN, Chicago.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

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Aired July 7, 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: A family phone call: a new development in the case of a captured American Marine. His family says they've heard from him. We're live on the story, of course.
(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We've got a better sense of what's happening to America, and we've got better hair. I'll tell you that goes a long way.

(END VIDEO CLIP)

O'BRIEN: Compelling style and substance. Democrats hit the road this hour. How voters and President Bush are responding to the new V.P. choice.

In security in Iraq, violence in the streets of Baghdad and a new set of laws on the books testing the new government.

SEAN CALLEBS, CNN CORRESPONDENT: The United States takes nearly two tons of nuclear and radioactive material out of Iraq. We'll tell you where it's headed and why. I'm Sean Callebs in Washington. We'll have that story.

O'BRIEN: From the CNN center in Atlanta, I'm Miles O'Brien. Kyra Phillips is off today. This hour of CNN's LIVE FROM begins right now.

And we begin with the mysterious case of Marine Corporal Wassef Hassoun. His family is reporting a phone call from the Marine who's been missing now for some time out of Iraq, apparently abducted.

We get more on the story now from CNN's Rusty Dornin, joining us live on the telephone from West Jordan. She's actually live in person from West Jordan, Utah -- Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Miles, the family is not saying anything right now, either in Lebanon or here in West Jordan. But a source close to the family says that Corporal Wassef Hassoun did call them and said that he was in Lebanon and he wanted to be picked up.

He told them that he had called the U.S. embassy in Beirut and asked to be picked up by the members in the U.S. embassy there. Now, none of this has been confirmed either by the State Department or the Pentagon. The families, as well, have not been able to confirm it from the embassy in Beirut.

But they say that -- the source says the family said that Hassoun sounded happy, safe, well, sounded 100 percent was the actual quote that the source said that the family felt about Hassoun.

So, we are expecting some kind of news conference here later today from the family when they do get confirmation from the U.S. embassy in Lebanon -- Miles.

O'BRIEN: All right, Rusty. Lots to sort out. This -- this is still a mystery, isn't it? We still have a lot of unanswered questions, which hopefully we'll be getting some answers soon now that Corporal Hassoun has surfaced.

What -- This family has been on this incredible roller coaster. It's hard to even imagine what they've been through.

DORNIN: It's -- every -- Well, of course, since his capture and the video of his capture. But since Saturday, every single day has brought a new twist and turn for this family, and unconfirmed reports of his release.

Now the family here yesterday was not -- really that excited about this news from the family in Lebanon that they believed he was alive. They just weren't sure. They wanted more confirmation.

Now the source that's close to the family is saying they feel they do have confirmation that he is alive. He is safe. And that he is in Lebanon. Where he is, however, is still a mystery.

And of course, there are so many questions, as you say, to be answered about when -- how he was captured, the events leading up to his capture, that sort of thing. And also how he was released, where he was released and how he got to Lebanon.

O'BRIEN: All right. CNN's Rusty Dornin, we hope to hear more a little bit later from her, as well as the family. Thanks very much. Stay close.

First appearances mean everything, and today Senator John Kerry and his No. 2, John Edwards, trying to build momentum as they hit the campaign trail together for the first time.

The presumptive Democratic nominee started the day with their families in Pennsylvania. And then they took off for the battleground state of Ohio. There, Kerry and Edwards sent the message that they will be the team to beat in November.

(BEGIN VIDEO CLIP)

KERRY: Let me ask you something, do you believe that John Edwards is going to be a vice president who understands and defends the values of America? Do you believe John Edwards is going to show the courage and the conviction that has always made him a champion of the middle class?

Do you think that John Edwards is going to be a environment who speaks of the hope and the optimism that are at the core of who we are as Americans? So will John Edwards be one of the best vice presidents this country has ever had?

(END VIDEO CLIP)

O'BRIEN: Of course, John Edwards is a relative newcomer to politics, so what does he bring to the Kerry/Edwards ticket? CNN senior political analyst Bill Schneider takes a look.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN POLITICAL ANALYST (voice-over): What did we learn about John Edwards from the Democratic primary? We learned that he's a happy warrior, something not often said about John Kerry.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: My campaign is about something bigger and stronger. It's about an uplifting positive vision for America.

SCHNEIDER: Edwards' positive campaign resonated with Democratic primary voters.

Let's look at Wisconsin, the showdown state in the primaries and a crucial midwestern swing state in November. Edwards was the run away favorite among Wisconsin voters who said they wanted a positive message.

John Kerry is a New England patrician, hardly a populist, while Edwards is often compared with Bill Clinton as a candidate with the common touch.

EDWARDS: I want to be a champion for the people I have fought for all my life. Regular people.

SCHNEIDER: The top choice of Wisconsin primary voters looking for a candidate who cares about people: John Edwards.

Edwards' message is one of economic populism.

EDWARDS: Closing the great divide that exists between America, those who live lives of privilege and never have to worry about a thing and then most of America.

SCHNEIDER: Sure enough, Wisconsin Democrats who said their main concern was the economy and jobs went for Edwards.

Then how come Kerry won the Wisconsin primary? Same reason he won almost every other primary: voters felt Kerry had the right experience.

Edwards tried to make a virtue of his inexperience by running as a Washington outsider. But Democrats weren't looking for an outsider this year. They were looking for someone who could beat George W. Bush. Questions were raised about Edwards' ability to do that.

UNIDENTIFIED FEMALE: With less than one full Senate term under your belt how do you convince American voters that you can go head to head with the Bush foreign policy team?

SCHNEIDER: He couldn't. Wisconsin Democrats looking for a candidate who could beat Bush went three to one for Kerry over Edwards.

That's why Edwards is not at the top of the ticket. But his lack of experience may not matter so much in the No. 2 spot.

(on camera) What does the choice of Edwards say about Kerry? It says Kerry is secure enough that he does not feel threatened by a young, attractive, ambitious running mate who's strong where Kerry is weak.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

O'BRIEN: Political pollsters wasting no time, of course, trying to gauge reaction to the Kerry/Edwards union. A CNN/"USA Today"/Gallup poll taken yesterday finds 64 percent of registered voters view the choice of Edwards as excellent or good.

That's more than his predecessor. Fifty-five percent of voters felt the same way about Dick Cheney in 2000. His Democratic rival Joe Lieberman got a 53 percent favorable rating. Forty-four percent of voters thought the same of Dan Quayle back in '88.

Tomorrow night, John Kerry and his wife Teresa Heinz Kerry will take your calls and answer questions about the campaign. That is on CNN's "LARRY KING LIVE," 9 Eastern, 6 Pacific right here on CNN.

President Bush took the opportunity to stump on Edwards' home turf today. The president traveled to North Carolina to attend a fund raiser and meet with judicial nominees that have yet to be confirmed, something he blames on John Edwards.

Mr. Bush was blunt when asked how Edwards compared to his No. 2.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's being described today as charming, engaging, a nimble campaigner, a populist and even sexy. How does he stack up against Dick Cheney?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Dick Cheney can be president. Next?

(END VIDEO CLIP)

O'BRIEN: The president was also asked whether Edwards is ready for the job.

(BEGIN VIDEO CLIP)

BUSH: That will be up to the voters to decide. But I'll tell you what I think about North Carolina. I did well here in 2000, because the North Carolinian voter understood we shared values.

(END VIDEO CLIP)

O'BRIEN: President Bush is to make a similar appearance later today in Michigan.

Faced with relentless rebel violence, Iraq's interim government now has the power to declare martial law. Even as leaders announced the new security measure, insurgents and security forces waged a bloody gun battle on the streets of the capital.

Details from Baghdad bureau chief Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: U.S. military officials say the fighting went on for four hours in a neighborhood in central Baghdad.

This was Haifa Street, west of the Tigris River, and a major residential neighborhood, where according to this official, gang members, possibly insurgents, opened fire on the Iraqi National Guard. This is a new security force that's being built up, and they are increasingly patrolling.

As they did, apparently the insurgents opened fire, according to witnesses, with small arms and rocket-propelled grenades. Some of those bullets went in the direction of the Iraqi police station nearby, which is when they called for reinforcements.

Reinforcements were U.S. soldiers and armored vehicles and helicopters. The senior military official says they did not fire a shot, that the Iraqi police and the security forces on the ground took part in the battle, but the Americans stayed on the sidelines and let them do their job.

Now in the end at least two people were killed and more than a dozen injured. Unclear as to whether they are civilians or security forces.

That battle broke out shortly before the announcement of new security measures by Iraq's interim government, aimed at cracking down on insurgents. This plan would allow the interim prime minister to do things like house to house searches, impose curfews, possibly ban public gatherings.

But the human rights minister and justice minister, who announced that they were setting up a committee to help monitor possible human rights violations and make sure they didn't happen, said it includes a series of checks and balances.

One of those would be that the prime minister would have to get the approval of the president, both his deputies, and the majority of cabinet to sign off on any of those measures he's invoking.

And according to the interior ministry, Iraqi police have defused what sounds like a large car bomb in central Baghdad. They said Iraqi police found it and defused it before it went off.

Jane Arraf, CNN, reporting from Baghdad.

(END VIDEOTAPE)

O'BRIEN: The Department of Energy says the U.S. has taken steps to keep some potentially dangerous radioactive materials in Iraq out of the hands of terrorists.

CNN's Sean Callebs in our Washington bureau with details on this -- Sean.

CALLEBS: Indeed, Miles.

Under a shroud of secrecy nearly two tons of nuclear and radioactive material were whisked away from Iraq and are now in an undisclosed secure Department of Energy site in the United States.

Energy Secretary Spencer Abraham is calling this attempt to keep potentially dangerous materials out of the hands of terrorists.

Authorities say the material was gathered from around Iraq and brought to Iraq's main nuclear site, the Tuwaitha Nuclear Research Center, southeast of Baghdad. The radioactive material could have industrial and medical applications but could also be used to create a weapon.

The U.S. military provided security and actually airlifted the material to the United States. A physicist with the Federation of American Scientists, Ivan Ulrich (ph), says he's pleased the U.S. is removing the radioactive and nuclear material from Iraq saying, quote, "This is something we should be doing all over the world and provide a better way of tracking such material" -- Miles.

O'BRIEN: Let's try to put -- any time people hear radioactive and nuclear they get very nervous. Let's try to -- try to put this in some perspective. What is the real potential threat here?

CALLEBS: Exactly. Really, it's twofold. Let's first discuss the radioactive. The radioactive material that comes from such areas as medical waste could, according to the Department of Energy, be rolled into a dirty bomb with relative ease.

Now although a dirty bomb probably wouldn't cause mass casualties, it would fuel chaos and at the same time cause panic and perhaps render an area uninhabitable for some time.

The second concern: low enriched uranium. It could very well be on the road to being highly enriched one day and theoretically be powerful enough to be considered weapons grade, a major concern, if indeed it would go down that road, Miles. O'BRIEN: All right. Two tons of material now. We presume it's safe and sound in the hands of the Department of Energy, maybe at one of their labs that is designed to protect this kind of thing.

Long range, will it just stay there or what will happen to it?

CALLEBS: It could also be at a site -- at a low level site where it is disposed of. The radioactive -- the radioactive material, the industrial medical waste and such, will end up in a waste site here in the United States.

But the low enriched uranium has a far different fate. It is suitable for commercial use. The plan right now is to sell it to U.S. vendors, perhaps nuclear power plants. Right now, however, none of it has been sold -- Miles.

O'BRIEN: Sean Callebs, thank you very much. Appreciate it.

Deciding guilt or innocence in a case involving an exorcism, a church and a little boy who lost his life. We'll have details on that one just ahead.

A frightening look at terror groups operating in Iraq, the journalist who got some amazing video shares his story.

And later, breaking stereotypes and pushing the boundaries of ballet. With this dance group thin is definitely not in.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

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O'BRIEN: Checking news across America now.

Arizona firefighters hoping to save the $200 million Mount Graham observatory from raging wild fires. But they're less optimistic about some 90 summer cabins that are nearby.

Other wild fires near Payson and Flagstaff have been disrupting power flow and interstate traffic.

An endangered Hawaiian monk seal is back home in waters off an island in Hawaii after surgeons removed a large fishhook from his mouth. The sea mammal headed straight for the surf after a scientist set his cage on a beach and opened the door.

The New York/New Jersey fire department says fumes that forced a hotel evacuation today came from a transformer fire. Fifteen guests at the hotel near Newark Liberty International Airport suffered nausea. They were taken to hospitals as a precaution.

We've been following the story of Corporal Wassef Hassoun, the Marine corporal who has been missing from Iraq since June 20. All kinds of developments right now. The source so far has been the family indicating they received a telephone call from Corporal Hassoun, indicating he's just fine and awaiting word from the American embassy in Beirut, Lebanon, as to what would happen next.

CNN's Barbara Starr has been working this story from her post at the Pentagon. She joins us now -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Miles.

Now Pentagon officials, military sources here are not yet ready to confirm any details, they say, officially. They know nothing about this.

But, indeed, a source close to the Hassoun family out in Utah has told CNN's Rusty Dornin that Marine Corporal Wassef Ali Hassoun called his family today. Said he has been released from custody, is safe, is in Lebanon and is asking to be picked up at an undisclosed location by representatives of the U.S. government.

The source close to the family told Rusty Dornin that Corporal Hassoun sounded healthy and happy. This apparently is what is leading to the family's statements out in Utah that they believe Corporal Hassoun has been released and is in safe hands.

No word, we must emphasize, from the United States military here in the Pentagon confirming any of these details. Officially, Corporal Hassoun remains listed as captured. Sources here say they know nothing about his current status. But, of course, everyone is waiting anxiously to see what develops in the hours ahead -- Miles.

O'BRIEN: CNN's Barbara Starr at the Pentagon. Keep us posted. Thank you.

O'BRIEN: In Milwaukee, Wisconsin, a chilling trial continues. It involves a janitor moonlighting as a preacher, an exorcism and the death of an 8-year-old boy.

CNN's Chris Lawrence with the story.

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CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Ray Hemphill sat silently Tuesday in a Milwaukee courtroom where a jury will soon decide if he should be punished for performing an exorcism that left an 8-year-old autistic boy dead.

Last August, Terrance Cottrell's mother took him to the strip mall church for a prayer session. A neighbor says Terrance's mother is a zealous convert who believed evil spirits spoke through her son.

DENISE ALLISON, NEIGHBOR: She said he said, "Kill me. Take me. Kill me."

I was like, "Are you serious?" I couldn't really believe that.

LAWRENCE: Terrance's mother went to Hemphill for help, and he offered to pray for the boy to be healed.

But Hemphill is no ordained minister. He's a school janitor who'd been moonlighting as a preacher.

(on camera) By all accounts this was an intense two-hour session. Hemphill's shirt was soaked with sweat from lying on top of Terrance as the little boy was held down by other church members and his own mother.

(voice-over) Hemphill's attorney said this was at least the ninth prayer service at this church, and nothing had gone wrong before. He'll argue that drugs contributed to Cottrell's death. A toxicology report shows Terrance's system had toxic blood levels of at least two drugs, an antihistamine and antipsychotic.

The medical examiner ruled the death homicide by suffocation, but the D.A. says he couldn't prove Hemphill knew what he was doing would kill the boy. So a jury will decide whether he's guilty of felony child abuse, which carries a maximum sentence of five years.

Chris Lawrence, CNN, Chicago.

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