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Disputes & Debates; Ayatollah Arrives on Peace Mission; Scott Peterson Trial

Aired August 26, 2004 - 13:59   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.


KYRA PHILLIPS, CNN ANCHOR: Extreme grief. A father sets himself and a van on fire after learning his Marine son is killed in action. This hour, inside the training to deliver a message no one wants to hear.
MILES O'BRIEN, CNN ANCHOR: Flips, twists and challenges. We're not talking about the Olympics but a big day in the race for the White House. We, of course, are live from the campaign trail.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Has her own oxygen mask, her own goggles, to her it's the ultimate car window.

(END VIDEO CLIP)

PHILLIPS: Skydiving dog to the rescue. She's not just any hot dog. She's a hero.

O'BRIEN: From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

Up first this hour, unlikely allies and a soft money skirmish, and a non-debate on debates. It can only be presidential politics, where President Bush today enlisted a former victim of the so-called 527 ads to help blow them all out of the water. Thousands of miles away, a rhetorical question from the Kerry campaign: can we talk?

CNN's Kathleen Koch phones in from Albuquerque, New Mexico, with the details -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Hi. Yes, Kyra, it was a very interesting turn of events today.

Basically, President Bush, aboard Air Force Once, heading to a campaign swing through New Mexico, hitting three different cities here, placed a call to Senator John McCain, saying he wanted to work together with him to pursue court action now finally to shut down these ads that have been aired by these 527 groups.

Not only the veterans -- Swift Boat Veterans for Truth, but also numerous ads that have targeted President Bush. The president telling the senator if that doesn't work that he wants to pursue legislative action. Now, spokesman Scott McClellan said that the senator responded that he thought that was a good idea that they were working together. McClellan saying that basically they're taking this action because the Federal Election Commission, the FEC, had had an opportunity to act on complaints by both the Bush administration this spring and then the John Kerry campaign just recently, and they hadn't acted. So, now it's time to take this to the courts.

And Kyra, basically, the president is here campaigning today, all day in New Mexico. New Mexico a very important state. It lost by just 366 votes in 2000. And introducing him at each and every stop is former New York Mayor Rudolph Giuliani. So, really trying to gear things up, get some momentum leading into the convention next week.

PHILLIPS: Kathleen, let's talk about those debates. John Kerry wanting Bush to debate on a weekly basis. Could the president or will the president do it?

KOCH: Well, the Kerry campaign did put out that call today, challenging him to do this every week. But a spokesman for the campaign, Steve Schmidt, said -- put out a statement saying, "There will be time for debates after the convention." And he added in his statement, "During the next few weeks John Kerry should take the time to finish the debates with himself."

So, in any case, lots of back and forth here on the road. And we'll be hearing more from the president in just another hour or so. But so far he has not specifically or directly mentioned either of these controversies in his speeches.

PHILLIPS: All right. Kathleen Koch, thanks so much.

And New Mexico today, New York next week. The Republican National Convention gavels to order Monday at Madison Square Garden. CNN will be there start to finish, of course. The star of the show will accept his party's nomination one week from tonight.

O'BRIEN: Iraq's most influential holy man returned to Najaf today in a bid to make peace. Ayatollah Ali al-Sistani led thousands of backers, but his arrival was greeted by violence. Sistani supporters among several dozen people killed today in Najaf and in nearby Kufa. CNN's Matthew Chance is in Najaf, and he brings us the very latest -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Miles, thank you.

And many hope this will be the beginning of the end of this long- running standoff in Najaf with the return of the Grand Ayatollah Ali al-Sistani to the holy city of Najaf. Already, his representatives have been in talks to try and bring to a peaceful resolution the standoff with the representatives of Muqtada al-Sadr, the renegade Shia cleric at the center of the violence over the past few weeks.

They have been in telephone contact already. We know that. Although, at the moment, we understand there aren't any exact developments to report in terms of the peace effort. But obviously, we're monitoring that situation extremely closely.

In the meantime, there's been bloodshed in the Najaf area. At least 48 people killed in two separate instances. The first in an apparent mortar attack on the mosque in Kufa.

Now, this is the mosque where Muqtada al-Sadr normally delivers his Friday sermon. The incident involved 25 people being killed, another 60 injured. It's not known who carried out the attacks.

U.S. forces, as well as those of the interim Iraqi government, have denied all involvement, saying that their forces were not conducting any military operations in the area at the time of the attack. Another 23 people, though, were killed last night, as well, in an apparent snipe are attack on the forces of Grand Ayatollah Ali al-Sistani, who had gathered, responding to a call of his to march on Najaf.

That quite an incident, with a good many people injured, as well as the 23 people dead. Again, it's not altogether clear who carried out that sniping attack, as well. But it is being investigated.

Since then, the situation seems to have calmed significantly. A 24-hour cease-fire has been declared in course, with U.S. and Iraqi forces saying that they won't conduct any military operations, to give chance for those peace efforts to take root. But if there are no developments, the interim Iraqi government saying quite clearly that the battle for Najaf will resume -- Miles.

O'BRIEN: Matthew, a question about the Ayatollah's return from London. There were many who said when he went to London, ostensibly for medical care, that he was sort of bowing out of this whole thing. I'm curious, what is being said about that now? And what might have prompted him to return?

CHANCE: Well, I mean, at first thought, it's not altogether clear that he did bow out of this. It may well have been what his representative say it was, which is a heart condition which needed urgent attention in London.

Certainly, we understand from the doctors in London that he came back to Najaf against their advice. But now that he is here, it does cast this whole conflict, this whole situation in a different light.

He is a man of great authority. Tens of thousands, if not hundreds of thousands of people in this country, actually listen to every word that he says and are willing to respond to every word he says. So, he's an incredibly influential figure. What he says carries a great deal of weight. And so, all the parties in this conflict will have to bear his presence in mind as we proud through this situation -- Miles.

O'BRIEN: CNN's Matthew Chance in Najaf. Thank you very much.

Two men, two movements vying for roles in the new Iraqi. And as we said, Ayatollah al-Sistani is considered the country's most influential Shiite cleric. But the younger Muqtada al-Sadr, considered much more radical, has made a lot more noise with his Mehdi Militia. Now, a short time ago, an expert on Iraq told us al-Sadr need as life line, and it may just be al-Sistani.

(BEGIN VIDEO CLIP)

KEN POLLACK, CNN ANALYST: I think that Muqtada al-Sadr is probably looking for a way out at this point in time. Whether he's in the mosque or not, we don't know. But clearly, his fighters inside the mosque are in very bad shape.

They have been slowly being constricted by the U.S. forces. They are being bled, they're not in great shape. I think he's probably looking for a way out. And if Sistani gives him a face-saving way out, I think he will likely take it.

(END VIDEO CLIP)

O'BRIEN: It's probably worth noting that al-Sadr launched his latest rebellion just one day after al-Sistani left Najaf ostensibly to seek medical treatment in London.

PHILLIPS: A self-proclaimed member of al Qaeda faces American military justice, described by prosecutors as a former bodyguard for Osama bin Laden. He's one of the four detainees at Guantanamo Bay charged with terrorism.

The Yemeni native wants to represent himself before the military commission or be given an attorney from Yemen. The U.S. has determined that so far only 15 of the detainees are eligible for trial.

Terror arrests in Britain. Scotland Yard says it has taken a man into custody on suspicion of terrorism. Authorities won't give the details, but British media identify the suspect as Abu Hamza al-Masri, a hard-line Islam cleric who is wanted by the United States.

O'BRIEN: Intelligence agents are learning more about another group of terror suspects in custody in Britain. And what they are learning to lead to even more arrests. Our Justice Department correspondent, Kelli Arena, has details.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE DEPT. CORRESPONDENT (voice-over): Demonstrators proclaim the innocence of one of the men being held in British custody, but counterterrorism sources tell CNN evidence strongly suggests the eight suspects were actively planning to attack targets in Britain. Sources say the evidence is less conventioning when it comes to an imminent plot to strike the United States.

TOM RIDGE, HOMELAND SECURITY SECRETARY: First of all, there is no information today about the time and place and manner.

ARENA: When the men were arrested, officials found surveillance of U.S. financial institutions similar to evidence found in Pakistan. Officials have told CNN that one of the men, Dhiren Barot, also known as Eissa al-Hindi, personally conducted some of that surveillance in 2000 and 2001.

Government sources now say two of the other men in custody were with him in New York at the time. Officials have said that surveillance was updated as recently as this spring.

UNIDENTIFIED MALE: We know for sure that they are targeting the U.S. homeland and they would like to strike here. But we have not yet uncovered an operation. Now it may mean that they don't have an operation here yet. That would be the best case. But it may also mean that they have one here and we haven't found it yet.

ARENA: CNN has learned as a direct result of the British arrests, and earlier operations in Pakistan, the FBI is conducting at least half a dozen surveillance operations in the United States, including in New York and the Washington area. It's all being handled as a major success. But is it?

BRUCE HOFFMAN, RAND CORPORATION: This is a movement that is able to replenish its ranks with a greater facility than we imagine.

ARENA: There are aggressive man hunts underway for at least two al Qaeda operatives thought to be involved in current planning: Adnan El Shukrijumah, who investigators believe may try to illegally enter the United States through Mexico; and Abu Faraj al-Libbi. Investigators describe him as a senior operational planner thought to be hiding along the Afghanistan-Pakistan border.

(on camera): But no one is discounting the old guard. Officials say evidence shows that Osama bin Laden was in communication with one of the men recently arrested in Pakistan, alleged computer expert Muhammad Naeem Noor Khan.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

O'BRIEN: A woman comes forward with new allegations against a member of the Kennedy family. His name is familiar to you. We'll have details on that.

TED ROWLANDS, CNN CORRESPONDENT: I'm Ted Rowlands, live in Redwood City, California. More audiotapes in the Scott Peterson double murder trial. We'll have the very latest coming up.

O'BRIEN: And in her majesty's service, all nine feet of him, including the hat. A LIVE FROM salute to a man filling a tall order.

(COMMERCIAL BREAK)

O'BRIEN: A wiretap investigator returns to the stand in the Scott Peterson double murder trial. Let's go straight to CNN's Ted Rowland for an update on what seems like day 6,000 of this trial.

Hello, Ted.

ROWLANDS: Hello, Miles. Steve Jacobson, who is the wiretap expert, has been on the stand all morning. He was on the stand yesterday as well. Mark Geragos, Scott Peterson's attorney, has been trying to hammer away at Jacobson to make some points with the jury.

A lot of people think that this has been the most credible and best witness for the prosecution thus far, including Amber Frey, because Jacobson has been playing audiotapes of Scott Peterson lying repeatedly to his mother, his father and his stepmother, and other people that have been calling him about things that -- basically about where he's been at certain times. And they've used cell phone records to establish that and cell phone tower information.

Geragos this morning is trying to hammer away at that, sort of tell the jury that this is not an exact science and we're not quite sure Peterson was where they think he was. Now, this is a call coming up -- Peterson, according to Jacobson, is in Berkeley when they are searching the bay for Laci's remains. He tells his mother-in-law, Sharon Rocha, he's in southern California -- or in mid California in Bakersfield.

(BEGIN AUDIO CLIP)

SCOTT PETERSON, DEFENDANT: Well, I'm actually down in Bakersfield.

SHARON ROCHA, LACI PETERSON'S MOTHER: Oh, are you?

PETERSON: Yes.

ROCHA: OK.

PETERSON: Yes. I had to finish up some work stuff today. We're just getting done. I'm going to pass out flyers on my way home. So, I won't be home until 5:00 or so.

ROCHA: OK. OK.

(END AUDIO CLIP)

ROWLANDS: The jury has heard a number of these calls, of Peterson claiming he's in one spot, when in actuality, according to the prosecution, he has been in other places, lying repeatedly to other folks.

Mark Geragos is trying to establish that not only is this cell phone data inaccurate using the towers, but also that the prosecution didn't record all of Peterson's phone activities. So, they don't know the context of some of these recordings.

Whether or not the jury buys it, we'll have to wait and see. They are in a break right now. Jacobson will be back on the stand when they resume in about 10 minutes -- Miles.

O'BRIEN: CNN's Ted Rowlands. Thank you very much -- Kyra. PHILLIPS: William Kennedy Smith is denying new rape allegations in a civil lawsuit filed in Chicago. A woman alleges Smith assaulted her after a night of drinking five years ago. She wants more than $50,000 in damages. Her attorney says she was too scared at the time to call police.

(BEGIN VIDEO CLIP)

KEVIN O'REILLY, ACCUSER'S ATTORNEY: It's very difficult for a persons who have been the victims of rape to come forward and bring themselves out into the public eye. And Ms. (INAUDIBLE) is a very brave and she is doing that at this time. The most important reason is, is to just get this Dr. Smith to stop doing this to women.

(END VIDEO CLIP)

PHILLIPS: The attorney goes on to say the woman and Smith had a relationship after the alleged attack. In a statement, Smith says his family and personal history have made him vulnerable to these accusations. Smith, you'll recall, was acquitted of rape charges in 1991.

O'BRIEN: News across America now.

An emergency hearing underway on the eve of the Kobe Bryant trial. The prosecution says DNA provided by the defense was contaminated. The basketball star is accused of sexually assaulting a 19-year-old Colorado resort employee.

A drifter is cleared in the killings of two California camp counselors. Investigators say Nicholas Scarseth cooperated during questioning and is not considered a suspect. A $10,000 reward now being offered in that case. The victims were found shot to death in their sleeping bags last week.

And parole denied again for one of the big names in the notorious Charles Manson killings. It was Leslie Van Houten's 15th attempt to win her freedom. Van Houten was among those convicted in the 1969 killings of actress Sharon Tate and six others.

PHILLIPS: Falling through the cracks: uninsured in America. A growing number of employees on the payroll, but not able to get insurance.

She was one of the heroes in the aftermath of 9/11. Now this dog is finding a new way to leap into service. Her story later on LIVE FROM.

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: I'm Rhonda Schaffler, live from the New York Stock Exchange. A handful of cash- strapped airlines are trying a new route to cut costs. I'll have that story right after the break.

(COMMERCIAL BREAK)

PHILLIPS: Checking health headlines this Thursday, they may be going back to gold stars in Florida. State school officials have expressed concern over a current Krispy Kreme promotion. The company is offering students a free doughnut for every at A on their report card. But some worry that kind of reward could fuel the growing problem of childhood obesity.

The Feds throw a curve at the makers of a probably arthritis drug. A large FDA study shows that Vioxx users had a 50-percent greater chance of heart attacks and sudden cardiac death than using rival drug, Celebrex. At least one HMO may now pull Vioxx from its health plan, according to "The Wall Street Journal."

Now here's a little news to make you sleep easier at night. The U.S. government is preparing for a global flu epidemic. A first draft of the plan is out today outlining how to ration scarce medications and speed vaccine production in the event of a worldwide flu outbreak. Health experts say it's only a matter of time before a powerful new flu strain sparks pandemic.

O'BRIEN: The Census Bureau has released new figures on health insurance coverage in America, and the ranks of the uninsured are up. Joining me now to crunch some numbers, CNN medical correspondent Elizabeth Cohen.

Bad news for a lot of folks.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: It is bad news for a lot of folks. You read the stories in the newspaper, you hear about them on TV that more and more Americans are losing their health insurance. And now the Census Bureau has the hard data.

Let's take a look at these numbers. They do not tell a particularly good story.

From 2002 to 2003, 1.4 million more uninsured Americans. That means that 15.6 percent of Americans are now uninsured. Let's take a look at sort of the long range.

In 1987, there were 31 million uninsured Americans. In 2003, 45 million uninsured Americans. This is a huge concern for obvious reasons. These people aren't getting the kind of health care that they need.

Also, the concern is financial. When people aren't insured, what happens is they don't get preventive care, they don't regularly see the doctor. They show up at the emergency room when something horrible has happened to them. And we all pay for it on that end.

O'BRIEN: All right. Now, part of the increase could be explained just by general population growth. I suppose the percentage hasn't changed that much as the population grows. But nevertheless, there are other things at work here, aren't there?

COHEN: Right. There's a whole -- there's a whole lot of different things going on here. And what is interesting is that when you look at why fewer Americans are uninsured, it has do with fewer employers offering people health insurance. 1.3 million Americans lost health care insurance from their employer in 2003.

Now, it's interesting. When you look at private health care insurance, that wasn't the case. I'm sorry, public health care insurance, insurance from the government.

In 2002, 25.6 Americans got their health insurance from the government. In 2003, that number went up to 25.7 percent. A little bit of an increase.

But again, what is interesting here is that the number of people who were insured by their employers has gone down. That's not a good thing. That's the place that people in this system are supposed to get their insurance.

O'BRIEN: And I suppose it's a bit of a dumb question, but why are fewer companies offering this? Is this just pure cost-cutting stuff?

COHEN: It's expensive. Health insurance is expensive. Medical costs are going up at a rate higher than inflation. It really is that simple.

Now, there's many reasons for that. One of them, it's interesting. Some people point to the proliferation of advertisements on television for pharmaceutical drugs.

The drug companies only advertise the most expensive drugs. What happens is someone sees an ad for one of these drugs, for let's say a sleeping pill, or an antidepressant, or whatever. They go to their doctor and say, "Hey, I want this."

Doctors like to make patients happy. They prescribe it, and that goes -- happens to lots and lots of people. Those numbers go up.

O'BRIEN: Interesting. Creating a bit of a market there.

COHEN: That's right. They're creating a market. That's exactly what they're doing.

O'BRIEN: All right -- Kyra.

COHEN: Thanks.

PHILLIPS: Well, we're talking about several of the nation's biggest airlines teaming up in an effort to cut costs.

O'BRIEN: Rhonda Schaffler joining us from the New York Stock Exchange with a story on that and more.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to the CNN Center in Atlanta. This is LIVE FROM. I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips.

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Aired August 26, 2004 - 13:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Extreme grief. A father sets himself and a van on fire after learning his Marine son is killed in action. This hour, inside the training to deliver a message no one wants to hear.
MILES O'BRIEN, CNN ANCHOR: Flips, twists and challenges. We're not talking about the Olympics but a big day in the race for the White House. We, of course, are live from the campaign trail.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Has her own oxygen mask, her own goggles, to her it's the ultimate car window.

(END VIDEO CLIP)

PHILLIPS: Skydiving dog to the rescue. She's not just any hot dog. She's a hero.

O'BRIEN: From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

Up first this hour, unlikely allies and a soft money skirmish, and a non-debate on debates. It can only be presidential politics, where President Bush today enlisted a former victim of the so-called 527 ads to help blow them all out of the water. Thousands of miles away, a rhetorical question from the Kerry campaign: can we talk?

CNN's Kathleen Koch phones in from Albuquerque, New Mexico, with the details -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Hi. Yes, Kyra, it was a very interesting turn of events today.

Basically, President Bush, aboard Air Force Once, heading to a campaign swing through New Mexico, hitting three different cities here, placed a call to Senator John McCain, saying he wanted to work together with him to pursue court action now finally to shut down these ads that have been aired by these 527 groups.

Not only the veterans -- Swift Boat Veterans for Truth, but also numerous ads that have targeted President Bush. The president telling the senator if that doesn't work that he wants to pursue legislative action. Now, spokesman Scott McClellan said that the senator responded that he thought that was a good idea that they were working together. McClellan saying that basically they're taking this action because the Federal Election Commission, the FEC, had had an opportunity to act on complaints by both the Bush administration this spring and then the John Kerry campaign just recently, and they hadn't acted. So, now it's time to take this to the courts.

And Kyra, basically, the president is here campaigning today, all day in New Mexico. New Mexico a very important state. It lost by just 366 votes in 2000. And introducing him at each and every stop is former New York Mayor Rudolph Giuliani. So, really trying to gear things up, get some momentum leading into the convention next week.

PHILLIPS: Kathleen, let's talk about those debates. John Kerry wanting Bush to debate on a weekly basis. Could the president or will the president do it?

KOCH: Well, the Kerry campaign did put out that call today, challenging him to do this every week. But a spokesman for the campaign, Steve Schmidt, said -- put out a statement saying, "There will be time for debates after the convention." And he added in his statement, "During the next few weeks John Kerry should take the time to finish the debates with himself."

So, in any case, lots of back and forth here on the road. And we'll be hearing more from the president in just another hour or so. But so far he has not specifically or directly mentioned either of these controversies in his speeches.

PHILLIPS: All right. Kathleen Koch, thanks so much.

And New Mexico today, New York next week. The Republican National Convention gavels to order Monday at Madison Square Garden. CNN will be there start to finish, of course. The star of the show will accept his party's nomination one week from tonight.

O'BRIEN: Iraq's most influential holy man returned to Najaf today in a bid to make peace. Ayatollah Ali al-Sistani led thousands of backers, but his arrival was greeted by violence. Sistani supporters among several dozen people killed today in Najaf and in nearby Kufa. CNN's Matthew Chance is in Najaf, and he brings us the very latest -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Miles, thank you.

And many hope this will be the beginning of the end of this long- running standoff in Najaf with the return of the Grand Ayatollah Ali al-Sistani to the holy city of Najaf. Already, his representatives have been in talks to try and bring to a peaceful resolution the standoff with the representatives of Muqtada al-Sadr, the renegade Shia cleric at the center of the violence over the past few weeks.

They have been in telephone contact already. We know that. Although, at the moment, we understand there aren't any exact developments to report in terms of the peace effort. But obviously, we're monitoring that situation extremely closely.

In the meantime, there's been bloodshed in the Najaf area. At least 48 people killed in two separate instances. The first in an apparent mortar attack on the mosque in Kufa.

Now, this is the mosque where Muqtada al-Sadr normally delivers his Friday sermon. The incident involved 25 people being killed, another 60 injured. It's not known who carried out the attacks.

U.S. forces, as well as those of the interim Iraqi government, have denied all involvement, saying that their forces were not conducting any military operations in the area at the time of the attack. Another 23 people, though, were killed last night, as well, in an apparent snipe are attack on the forces of Grand Ayatollah Ali al-Sistani, who had gathered, responding to a call of his to march on Najaf.

That quite an incident, with a good many people injured, as well as the 23 people dead. Again, it's not altogether clear who carried out that sniping attack, as well. But it is being investigated.

Since then, the situation seems to have calmed significantly. A 24-hour cease-fire has been declared in course, with U.S. and Iraqi forces saying that they won't conduct any military operations, to give chance for those peace efforts to take root. But if there are no developments, the interim Iraqi government saying quite clearly that the battle for Najaf will resume -- Miles.

O'BRIEN: Matthew, a question about the Ayatollah's return from London. There were many who said when he went to London, ostensibly for medical care, that he was sort of bowing out of this whole thing. I'm curious, what is being said about that now? And what might have prompted him to return?

CHANCE: Well, I mean, at first thought, it's not altogether clear that he did bow out of this. It may well have been what his representative say it was, which is a heart condition which needed urgent attention in London.

Certainly, we understand from the doctors in London that he came back to Najaf against their advice. But now that he is here, it does cast this whole conflict, this whole situation in a different light.

He is a man of great authority. Tens of thousands, if not hundreds of thousands of people in this country, actually listen to every word that he says and are willing to respond to every word he says. So, he's an incredibly influential figure. What he says carries a great deal of weight. And so, all the parties in this conflict will have to bear his presence in mind as we proud through this situation -- Miles.

O'BRIEN: CNN's Matthew Chance in Najaf. Thank you very much.

Two men, two movements vying for roles in the new Iraqi. And as we said, Ayatollah al-Sistani is considered the country's most influential Shiite cleric. But the younger Muqtada al-Sadr, considered much more radical, has made a lot more noise with his Mehdi Militia. Now, a short time ago, an expert on Iraq told us al-Sadr need as life line, and it may just be al-Sistani.

(BEGIN VIDEO CLIP)

KEN POLLACK, CNN ANALYST: I think that Muqtada al-Sadr is probably looking for a way out at this point in time. Whether he's in the mosque or not, we don't know. But clearly, his fighters inside the mosque are in very bad shape.

They have been slowly being constricted by the U.S. forces. They are being bled, they're not in great shape. I think he's probably looking for a way out. And if Sistani gives him a face-saving way out, I think he will likely take it.

(END VIDEO CLIP)

O'BRIEN: It's probably worth noting that al-Sadr launched his latest rebellion just one day after al-Sistani left Najaf ostensibly to seek medical treatment in London.

PHILLIPS: A self-proclaimed member of al Qaeda faces American military justice, described by prosecutors as a former bodyguard for Osama bin Laden. He's one of the four detainees at Guantanamo Bay charged with terrorism.

The Yemeni native wants to represent himself before the military commission or be given an attorney from Yemen. The U.S. has determined that so far only 15 of the detainees are eligible for trial.

Terror arrests in Britain. Scotland Yard says it has taken a man into custody on suspicion of terrorism. Authorities won't give the details, but British media identify the suspect as Abu Hamza al-Masri, a hard-line Islam cleric who is wanted by the United States.

O'BRIEN: Intelligence agents are learning more about another group of terror suspects in custody in Britain. And what they are learning to lead to even more arrests. Our Justice Department correspondent, Kelli Arena, has details.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE DEPT. CORRESPONDENT (voice-over): Demonstrators proclaim the innocence of one of the men being held in British custody, but counterterrorism sources tell CNN evidence strongly suggests the eight suspects were actively planning to attack targets in Britain. Sources say the evidence is less conventioning when it comes to an imminent plot to strike the United States.

TOM RIDGE, HOMELAND SECURITY SECRETARY: First of all, there is no information today about the time and place and manner.

ARENA: When the men were arrested, officials found surveillance of U.S. financial institutions similar to evidence found in Pakistan. Officials have told CNN that one of the men, Dhiren Barot, also known as Eissa al-Hindi, personally conducted some of that surveillance in 2000 and 2001.

Government sources now say two of the other men in custody were with him in New York at the time. Officials have said that surveillance was updated as recently as this spring.

UNIDENTIFIED MALE: We know for sure that they are targeting the U.S. homeland and they would like to strike here. But we have not yet uncovered an operation. Now it may mean that they don't have an operation here yet. That would be the best case. But it may also mean that they have one here and we haven't found it yet.

ARENA: CNN has learned as a direct result of the British arrests, and earlier operations in Pakistan, the FBI is conducting at least half a dozen surveillance operations in the United States, including in New York and the Washington area. It's all being handled as a major success. But is it?

BRUCE HOFFMAN, RAND CORPORATION: This is a movement that is able to replenish its ranks with a greater facility than we imagine.

ARENA: There are aggressive man hunts underway for at least two al Qaeda operatives thought to be involved in current planning: Adnan El Shukrijumah, who investigators believe may try to illegally enter the United States through Mexico; and Abu Faraj al-Libbi. Investigators describe him as a senior operational planner thought to be hiding along the Afghanistan-Pakistan border.

(on camera): But no one is discounting the old guard. Officials say evidence shows that Osama bin Laden was in communication with one of the men recently arrested in Pakistan, alleged computer expert Muhammad Naeem Noor Khan.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

O'BRIEN: A woman comes forward with new allegations against a member of the Kennedy family. His name is familiar to you. We'll have details on that.

TED ROWLANDS, CNN CORRESPONDENT: I'm Ted Rowlands, live in Redwood City, California. More audiotapes in the Scott Peterson double murder trial. We'll have the very latest coming up.

O'BRIEN: And in her majesty's service, all nine feet of him, including the hat. A LIVE FROM salute to a man filling a tall order.

(COMMERCIAL BREAK)

O'BRIEN: A wiretap investigator returns to the stand in the Scott Peterson double murder trial. Let's go straight to CNN's Ted Rowland for an update on what seems like day 6,000 of this trial.

Hello, Ted.

ROWLANDS: Hello, Miles. Steve Jacobson, who is the wiretap expert, has been on the stand all morning. He was on the stand yesterday as well. Mark Geragos, Scott Peterson's attorney, has been trying to hammer away at Jacobson to make some points with the jury.

A lot of people think that this has been the most credible and best witness for the prosecution thus far, including Amber Frey, because Jacobson has been playing audiotapes of Scott Peterson lying repeatedly to his mother, his father and his stepmother, and other people that have been calling him about things that -- basically about where he's been at certain times. And they've used cell phone records to establish that and cell phone tower information.

Geragos this morning is trying to hammer away at that, sort of tell the jury that this is not an exact science and we're not quite sure Peterson was where they think he was. Now, this is a call coming up -- Peterson, according to Jacobson, is in Berkeley when they are searching the bay for Laci's remains. He tells his mother-in-law, Sharon Rocha, he's in southern California -- or in mid California in Bakersfield.

(BEGIN AUDIO CLIP)

SCOTT PETERSON, DEFENDANT: Well, I'm actually down in Bakersfield.

SHARON ROCHA, LACI PETERSON'S MOTHER: Oh, are you?

PETERSON: Yes.

ROCHA: OK.

PETERSON: Yes. I had to finish up some work stuff today. We're just getting done. I'm going to pass out flyers on my way home. So, I won't be home until 5:00 or so.

ROCHA: OK. OK.

(END AUDIO CLIP)

ROWLANDS: The jury has heard a number of these calls, of Peterson claiming he's in one spot, when in actuality, according to the prosecution, he has been in other places, lying repeatedly to other folks.

Mark Geragos is trying to establish that not only is this cell phone data inaccurate using the towers, but also that the prosecution didn't record all of Peterson's phone activities. So, they don't know the context of some of these recordings.

Whether or not the jury buys it, we'll have to wait and see. They are in a break right now. Jacobson will be back on the stand when they resume in about 10 minutes -- Miles.

O'BRIEN: CNN's Ted Rowlands. Thank you very much -- Kyra. PHILLIPS: William Kennedy Smith is denying new rape allegations in a civil lawsuit filed in Chicago. A woman alleges Smith assaulted her after a night of drinking five years ago. She wants more than $50,000 in damages. Her attorney says she was too scared at the time to call police.

(BEGIN VIDEO CLIP)

KEVIN O'REILLY, ACCUSER'S ATTORNEY: It's very difficult for a persons who have been the victims of rape to come forward and bring themselves out into the public eye. And Ms. (INAUDIBLE) is a very brave and she is doing that at this time. The most important reason is, is to just get this Dr. Smith to stop doing this to women.

(END VIDEO CLIP)

PHILLIPS: The attorney goes on to say the woman and Smith had a relationship after the alleged attack. In a statement, Smith says his family and personal history have made him vulnerable to these accusations. Smith, you'll recall, was acquitted of rape charges in 1991.

O'BRIEN: News across America now.

An emergency hearing underway on the eve of the Kobe Bryant trial. The prosecution says DNA provided by the defense was contaminated. The basketball star is accused of sexually assaulting a 19-year-old Colorado resort employee.

A drifter is cleared in the killings of two California camp counselors. Investigators say Nicholas Scarseth cooperated during questioning and is not considered a suspect. A $10,000 reward now being offered in that case. The victims were found shot to death in their sleeping bags last week.

And parole denied again for one of the big names in the notorious Charles Manson killings. It was Leslie Van Houten's 15th attempt to win her freedom. Van Houten was among those convicted in the 1969 killings of actress Sharon Tate and six others.

PHILLIPS: Falling through the cracks: uninsured in America. A growing number of employees on the payroll, but not able to get insurance.

She was one of the heroes in the aftermath of 9/11. Now this dog is finding a new way to leap into service. Her story later on LIVE FROM.

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: I'm Rhonda Schaffler, live from the New York Stock Exchange. A handful of cash- strapped airlines are trying a new route to cut costs. I'll have that story right after the break.

(COMMERCIAL BREAK)

PHILLIPS: Checking health headlines this Thursday, they may be going back to gold stars in Florida. State school officials have expressed concern over a current Krispy Kreme promotion. The company is offering students a free doughnut for every at A on their report card. But some worry that kind of reward could fuel the growing problem of childhood obesity.

The Feds throw a curve at the makers of a probably arthritis drug. A large FDA study shows that Vioxx users had a 50-percent greater chance of heart attacks and sudden cardiac death than using rival drug, Celebrex. At least one HMO may now pull Vioxx from its health plan, according to "The Wall Street Journal."

Now here's a little news to make you sleep easier at night. The U.S. government is preparing for a global flu epidemic. A first draft of the plan is out today outlining how to ration scarce medications and speed vaccine production in the event of a worldwide flu outbreak. Health experts say it's only a matter of time before a powerful new flu strain sparks pandemic.

O'BRIEN: The Census Bureau has released new figures on health insurance coverage in America, and the ranks of the uninsured are up. Joining me now to crunch some numbers, CNN medical correspondent Elizabeth Cohen.

Bad news for a lot of folks.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: It is bad news for a lot of folks. You read the stories in the newspaper, you hear about them on TV that more and more Americans are losing their health insurance. And now the Census Bureau has the hard data.

Let's take a look at these numbers. They do not tell a particularly good story.

From 2002 to 2003, 1.4 million more uninsured Americans. That means that 15.6 percent of Americans are now uninsured. Let's take a look at sort of the long range.

In 1987, there were 31 million uninsured Americans. In 2003, 45 million uninsured Americans. This is a huge concern for obvious reasons. These people aren't getting the kind of health care that they need.

Also, the concern is financial. When people aren't insured, what happens is they don't get preventive care, they don't regularly see the doctor. They show up at the emergency room when something horrible has happened to them. And we all pay for it on that end.

O'BRIEN: All right. Now, part of the increase could be explained just by general population growth. I suppose the percentage hasn't changed that much as the population grows. But nevertheless, there are other things at work here, aren't there?

COHEN: Right. There's a whole -- there's a whole lot of different things going on here. And what is interesting is that when you look at why fewer Americans are uninsured, it has do with fewer employers offering people health insurance. 1.3 million Americans lost health care insurance from their employer in 2003.

Now, it's interesting. When you look at private health care insurance, that wasn't the case. I'm sorry, public health care insurance, insurance from the government.

In 2002, 25.6 Americans got their health insurance from the government. In 2003, that number went up to 25.7 percent. A little bit of an increase.

But again, what is interesting here is that the number of people who were insured by their employers has gone down. That's not a good thing. That's the place that people in this system are supposed to get their insurance.

O'BRIEN: And I suppose it's a bit of a dumb question, but why are fewer companies offering this? Is this just pure cost-cutting stuff?

COHEN: It's expensive. Health insurance is expensive. Medical costs are going up at a rate higher than inflation. It really is that simple.

Now, there's many reasons for that. One of them, it's interesting. Some people point to the proliferation of advertisements on television for pharmaceutical drugs.

The drug companies only advertise the most expensive drugs. What happens is someone sees an ad for one of these drugs, for let's say a sleeping pill, or an antidepressant, or whatever. They go to their doctor and say, "Hey, I want this."

Doctors like to make patients happy. They prescribe it, and that goes -- happens to lots and lots of people. Those numbers go up.

O'BRIEN: Interesting. Creating a bit of a market there.

COHEN: That's right. They're creating a market. That's exactly what they're doing.

O'BRIEN: All right -- Kyra.

COHEN: Thanks.

PHILLIPS: Well, we're talking about several of the nation's biggest airlines teaming up in an effort to cut costs.

O'BRIEN: Rhonda Schaffler joining us from the New York Stock Exchange with a story on that and more.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to the CNN Center in Atlanta. This is LIVE FROM. I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips.

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