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Rockets Strike Baghdad Hotel; Bush/Cheney Insist Saddam Was a Threat; Martha Stewart Soon to Report to Prison; Merck Could Face Multiple Vioxx Lawsuits

Aired October 07, 2004 - 13:00   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.


KYRA PHILLIPS, CO-HOST: And we do continue following this developing story. Once again, as Wolf Blitzer was reporting, two rockets striking the Sheraton Hotel in central Baghdad.
Our Brent Sadler was there from the very beginning.

MILES O'BRIEN, CO-HOST: And let's bring him back in.

Brent, are you with us?

BRENT SADLER, CNN CORRESPONDENT: Yes, I am, Miles. Go ahead.

O'BRIEN: All right. Brent, for people just tuning in, just take us back to the beginning, what you saw and heard.

SADLER: About an hour ago, Miles, I was about to do a live shot and heard the engine, the roar of a rocket that flashed past my position. I saw the orange tail come past our live shot location in the Palestine Hotel, saw the rockets slam into the Sheraton Hotel at a low level.

There was a pause of about 45 seconds. We were working out what we should do, when a second rocket came in. A line of sight attack for certain. These were low trajectory rockets that flew into the side of the third floor of the Sheraton.

And then after that, a U.S. troop started opening fire, and I saw machine gun bullets trace around, flying past us towards the direction of where those two rockets had been fired from.

So this was a very provocative attack in the center of Baghdad, in an area that is relatively secure. Tremendous explosion, shaking that hotel.

Let me just add, it's the Sheraton hotel. Two hotels side by side, the Sheraton and the Palestine Hotel, where we are. Both hotels occupied, used by Western news organizations and Western contractors.

A lot of security around here. It's on the outskirts of the Green Zone. A U.S. troop presence here blast-proof walls, but these rockets, low angle, straight into the side of the Sheraton Hotel.

I have no report of any casualties from the Sheraton, but certainly the scene inside the hotel, blast damage, bewildered people, shaken people coming to terms with this latest attack, an audacious attack in the center of town -- Miles.

O'BRIEN: Brent, how many rockets? Do we know? And given what you say about them, these low trajectory rockets, what would their range be? In other words, where would the firing point be?

SADLER: The firing point, I would guess, would be several hundred yards maybe, 400 or 500 yards from the hotel. I can -- from the tail of the second one that cleared some trees, it must have been in an area certainly within 500, 600 yards.

So whoever fired those or set, because they could well have been on a timing device, would have seen the tall building of the Sheraton Hotel. These are like two twin towers; they're very easy to mark out in the center of town.

And set those on timers, or manually launch those two rockets at the hotel. They are Kidusha (ph) style rockets fired from tubes. And short-range rockets that can do a lot of damage. Normally they can be pretty inaccurate, but I can tell you that both blasts hit about third-floor level, because at my eye level, when I saw those two explosions, and when the gunfire broke out, then we hit the deck.

O'BRIEN: How frequently has this hotel become a target in your time there?

SADLER: The Sheraton was hit several months ago when it was thought rockets, again, hit the higher floors of the hotel. But the consensus then was that insurgents were trying to lob either rockets or mortars, but lob -- lob firepower into the Green Zone over the Tigris River and they were using the hotel as an aim point.

This time the hotel, I have no doubt whatsoever, was the point they were aiming at, because those two rockets followed the same track, hit the same rough locations, the third floor of the hotel.

So this was, you know, an audacious attack, very close to where U.S. troops are positioned in this area, just a few hundred yards. And then we saw gunfire and then the emergency service come in, and in the past ten minutes or so U.S. armor have been taking position around the area I'm talking to you from.

O'BRIEN: All right. So clearly in your mind it was not a misfire. Just to clarify in people's minds, you're outside the Green Zone. But where you are, you're afforded much of the security umbrella that people inside the Green Zone would have, correct?

SADLER: No, we have separate -- separate security. There are U.S. soldiers here in this area where these two hotels are, because of the numbers of Westerners who use these two hotels. But it's a pretty low-profile U.S. presence. I'm not going to go into numbers for obvious reasons. But certainly a low-profile presence.

Several months ago we had tanks and heavier equipment here. That security has been downgraded. But nobody can just walk through this area. You have to come through a number of checkpoints. But this was certainly not a misfire. These were two rockets coming in the same trajectory, and they both hit the third floor of the hotel.

O'BRIEN: Brent Sadler in Baghdad. Thank you very much -- Kyra.

PHILLIPS: Ken Robinson, our CNN military intelligence analyst, also following this developing story out of Baghdad. Ken joins us now from Washington.

Ken, from an intelligence aspect, I don't know if you've had a chance to talk with your sources, have you been able to find anything out about who's behind the attacks?

KEN ROBINSON, CNN CORRESPONDENT: No, Kyra, I actually just got off a plane just a few minutes ago myself from Atlanta to Washington, D.C.

Listening to the reporting as I came into the net, Pentagon correspondent Barbara Starr had the most salient point, and that was that there is an indication of an emergence of different groups, Sunni groups that might be cooperating.

We had been talking in recent days to members of the coalition, we talked about what they called a unified command of the Mujahhidin, which comprises about 10 separate insurgent groups that kind of reach across all the different ideologies, including nationalist and Jihadist guerrillas, that they are seeing kind of an emergence of.

And this is kind of what Barbara was speaking to, that, one, the Pentagon sources were saying they don't know specifically who is attributed to this specific attack, but this trend, this indication that it looks like many of these groups may be starting to cooperate together is very important.

And the point of that, the headline of that is, it's a double- edged sword. On one hand, if they all come and unite together, it can cause more problems. Opposite, is if they all unite together, they may be easier to target.

PHILLIPS: Is that -- as you talk with your sources, because that's quite a different strategy from where things started from the very beginning.

Now looking at a unified command, I mean, even though we're seeing attacks like this, from an intelligence perspective, from a Pentagon perspective, those that you know there, operating in the unified command, does it in some ways make things easier for U.S. forces, or at least those trying to strategize there in Baghdad, and also within the Pentagon?

ROBINSON: My personal opinion would be, yes, it would, that if they were working within a unified group -- remember, all insurgents have to do several things. They've got to eat; they've got to sleep; they've got to coordinate, they've got to rehearse; they've got to practice; they've got to communicate amongst themselves. And anytime you find groups that will do that in a unified way, with patterns that will develop from that, they're easier to target. And I think that the U.S. forces on the ground will welcome that from that aspect.

The question will be, you know, just because someone gives themselves a name calls themselves the unified command or the Mujahhidin, doesn't really show how really unified they are.

There's another group out there called the National Front for the Liberation of Iraq. And, you know, all of these different groups are names right now. And the real issue are, the people who are moving out from the different villages and conducting attacks.

If and when these attacks become coordinated, where instead of having them be isolated across the country, they geographically can freeze down a sector, especially an infrastructure sector, like the oil infrastructure, then they may prove to be very problematic.

Because you know, throughout all of the problems that they've had in Iraq in the last year, Iraq has still maintained the ability to produce 2.5 billion barrels per day. That's not bad in the middle of an insurgency and in the middle of horrible reconstruction efforts.

PHILLIPS: Ken Robinson, military analyst. Thank you so much for joining us there from Washington.

If you're just tuning in, once again, two rocket strikes -- or two rockets, rather, strike the Sheraton Hotel in central Baghdad, a hotel where a number of Westerners are staying, journalists and foreigners, of course, coming in to helping -- help to rebuild Iraq.

Those attacks taking place within the last hour. We're continuing to follow this developing story -- Miles.

O'BRIEN: CNN's Barbara Starr is at the Pentagon. She's been watching things from there, querying military leaders there about how this fits into the overall tactics and strategies for the U.S.

Barbara, what are they saying there right now about what we know about the possible point of origins for these particular rockets? And what it means to be targeting a civilian hotel filled with journalists?

BARBARA STARR, CNN CORRESPONDENT: Well, you know, Miles, so far, what we are hearing is that top officials here in the building are watching television to get the latest. That's often the way it is here at the Pentagon.

But for those of us who have traveled to Iraq and dealt with the U.S. military in Baghdad, what I can tell you is just across the river from this attack site, inside the Green Zone, at coalition military headquarters, there is a 24/7 operation center, and we can pretty much guarantee you, officials there looking at this very closely on the streets of Baghdad, looking at this situation and responding on a tactical level, if you will. That means, what's going on on the street, and how to deal with this. So, first of all, let's address that question.

This is really an example of the unfolding of the insurgency tonight on the streets of Baghdad. This isn't a strategic attack. This is not something that is going to change the balance of the situation in the country.

But this is an example of how the insurgency can launch close- range urban attacks on the streets of Baghdad, terrify people, force the military to respond, force Iraqi security forces to go out on the street, and really unsettle, at minimum, the Iraqi people, the Iraqis who live in Baghdad, who have to deal with this every day. And it's causing them great anxiety. That is what the insurgency is doing.

This -- this attack from a military point of view, from everything Brent Sadler is reporting from his eyes on the scene, is a close combat, urban attack, clearly by short-range rockets fired very close to this hotel. People who perhaps, insurgents who had line of sight, could see the hotel, could get that close to their target.

And that's a key point, that the insurgents can get that close. Machine gunners, coalition, U.S. machine gunners firing back. Machine gunfire very close range. This is what urban warfare against the insurgency is all about these days on the streets of Baghdad, really basically street-to-street fighting.

It's an example of where the insurgents are having success by demonstrating they can launch these attacks, shoot and scoot, if you will. It's the problem in getting back at them. Can the U.S., can the Iraqis launch forces back on the streets quick enough to find these people, to a counterinsurgency against them?

Now, all of this, Miles, against the broader backdrop of the U.S. and coalition counter-insurgency strategy. As we know, as we have been reporting for days now, large numbers of U.S. and Iraqi forces moving through the insurgent areas, trying to take these cities back: the Sadr City suburb of Baghdad, Samarra, south of Baghdad, eventually going into Fallujah.

But the insurgency demonstrating tonight on the streets of Baghdad they can shoot, they can scoot, they can disappear into the night, and it's a real long-term challenge.

If you take an insurgency down in a city, have they really left? Have you really defeated them? Have they just melted into the night? And can those Iraqi security forces really maintain that local control for an extended period of time, enough to get those Iraqi elections going at the end of January -- Miles.

O'BRIEN: Barbara Starr with case in point of what they call at the Pentagon asymmetrical warfare. Thank you very much, Barbara.

We'll be back with more in just a moment. Stay with us.

(COMMERCIAL BREAK) ELAINE QUIJANO, CNN CORRESPONDENT: ... of course, was the administration's main rationale for going to war there. White House officials maintain the report documents that Saddam Hussein, in fact, was a threat, they say, to the United States.

On the campaign trail, in Miami, in fact, Vice President Dick Cheney reiterated that. He pointed to weapons inspector Charles Duelfer's finding that Saddam Hussein was trying to have sanctions lifted.

However, important to note that the report says Iraq had no formal written plan to revive WMD programs, even if sanctions had been lifted.

Now, in the meantime, as you mention, the president heading to Wassaw, Wisconsin, this afternoon in the central part of that state. He will be speaking at a rally there, but before moving onto St. Louis ahead of tomorrow's debate.

His aides say that the president is preparing by talking with senior staffers, and when asked whether or not he is planning to modify any aspect of his debate performance, spokesman Scott McClellan says that the president is focusing on substance, not style -- Kyra.

PHILLIPS: Elaine Quijano, live from the White House. Thank you.

Well, cancel your plans and program your TiVo. CNN's special primetime coverage of the second presidential debate starts at 7 p.m. Eastern tomorrow. It's 4 on the West Coast, live from St. Louis.

And today you can join CNN's Judy Woodruff for "INSIDE POLITICS" on the road at 3 Eastern, followed by "CROSSFIRE" at 4:30. At 8 Eastern, Paula Zahn hosts a town meeting, live from Racine, Wisconsin. You can weigh in via e-mail. Send your questions for the Bush and Kerry camps to CNN.com/Paula.

Straight ahead, secret weapon. Take a look at this. What do you think of it? If you answer incorrectly, you could end up in the line of fire.

MARY SNOW, CNN CORRESPONDENT: I'm Mary Snow on Alderson, West Virginia, where homemaking guru Martha Stewart is about to learn about a new kind of big house. I'll have the story coming up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The state. We're the only community in the United States that euthanized a public official.

(END VIDEO CLIP)

PHILLIPS: Extreme politics, an election that's gone to the dogs, donkeys and pigs? Later on LIVE FROM.

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

O'BRIEN: The ever so tasteful clock counting down for Martha Stewart. She must surrender for her five-month prison sentence by 4:00 tomorrow.

Hoards of media, curious onlookers, have descended on Alderson, West Virginia, taking up positions outside Camp Cupcake, as they call it, to await the arrival of inmate number 55170-054. That could happen anytime. I guess you could call her 54.

CNN's Mary Snow is among the throngs standing by.

And Mary, it's really quite a scene there. There's a lot of support in and out of Camp Cupcake for Martha.

SNOW: That's right, Miles. It is quite a scene. And you know, just a little over 24 hours from now, this will be Martha Stewart's new home. And in the road behind me, just a half mile down that road, she's scheduled to report here for five months.

Just about anywhere you go in Alderson, the focus is on one thing, and one thing only, and that is Martha Stewart. And it's not just the residents who are waiting for her arrival; it's very clear that the inmates are well aware she's on her way.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Here are Martha Stewart's new neighbors.

UNIDENTIFIED FEMALE: Free Martha! Freedom!

SNOW: Tucked in the Appalachian Mountains, the absence of high security walls has given Alderson the name Camp Cupcake. But some inmates made it clear they don't like the sugarcoated name.

UNIDENTIFIED FEMALE: I'll tell you one thing. This ain't no damn Camp Cupcake!

SNOW: And Alderson locals agree.

HILLARY BENISH, ALDERSON HOSPITALITY HOUSE: That's really a disservice. Actually, none of the local people around here ever refer to it as Camp Cupcake.

SNOW: Space is tight. And as far as just who will share quarters with Martha Stewart, there are more than 1,000 possibilities, including 48-year-old Meg Scott Phipps, a former North Carolina agriculture commissioner serving 48 months for campaign finance fraud. Or 34-year-old Kentucky housewife Kimberly Goodson, serving 87 months on intent to murder.

And from someone who served time at Alderson, inmates come from all different backgrounds but share something in common -- no privacy.

JUDITH KELLY, ARRESTED PROTESTOR: Your freedom is totally taken away. They strip you of everything. Strip searches are part of the procedure there. Counts, constantly having to jump through hoops for people, kind of invasion of privacy at all times.

SNOW: While Martha Stewart will serve her five months for lying about a stock sale, she's in the minority. Sixty-one percent of inmates are doing time for narcotics charges, 15 percent for bribery, fraud and extortion, four percent for white-collar crimes.

(END VIDEOTAPE)

SNOW: And when Martha Stewart arrives here at the so-called Camp Cupcake, she'll find another kind of camp, so to speak, a media camp. There are satellite trucks parked here at the entrance to Alderson. And on the size of about a football field, all kinds of cameras, cables, waiting for her arrival. And it is growing really almost by the hour.

Big question is when she will arrive here. She is scheduled to be here by 2 p.m. tomorrow afternoon. A lot of kind of speculation about how she'll spend her last day of freedom. And there had been talk about a wedding she was invited to tonight in New York.

Her publicist got married over the weekend. You may recall seeing those photographs from the Bahamas when Martha Stewart did attend the wedding. The reception is tonight. But a spokesperson for Stewart says that she does not plan to attend -- Miles.

O'BRIEN: CNN's Mary Snow in Alderson, West Virginia. Thank you very much -- Kyra.

PHILLIPS: It's been a week since sales of the popular arthritis drug Vioxx were halted worldwide on fears it might cause heart or liver problems. Now there's at least one lawsuit on the table, plus a call for congressional hearings on how Vioxx got approved in the first place.

CNN's medical correspondent, Elizabeth Cohen, here to talk about the fallout.

What's the latest?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, the fallout is big. Vioxx was approved about five and a half years ago and was a very popular drug, one of the most popular, in fact. Tens of millions of people took it for arthritis pain and for other pain, as well.

Well, there's a new study that was done by Kaiser Permanente, the HMO, and it was reported in the "Wall Street Journal" that said that nearly 28,000 people had heart attacks and also people who died because they were taking Vioxx when they could have been -- compared to people who were taking the competitor, which is called Celebrex.

And so this says that this was -- these deaths were avoidable, didn't have to happen, and that it was because people were taking this drug instead of another drug.

PHILLIPS: When did the company know about the problems?

COHEN: Well, this is the $64 million question, as it were. When did Merck, which makes Vioxx, know that there were heart issues with Vioxx, and at what point did they know it?

Now the drug was approved in 1999, and some people say that just one year later, there were studies that -- that showed that there were heart problems, and that Merck and the FDA should have acted on it.

But it took them years to put warnings on labels. And of course, it wasn't taken off the market until just a couple of weeks ago, until five and a half years later.

PHILLIPS: Yes, we were talking about it. But what is Merck saying now, spokespeople?

COHEN: What Merck says now is they put out a statement, and it says, "We have conducted controlled clinical trials in over 28,000 patients," and Merck promptly disclosed these results to the FDA.

We have called the FDA repeatedly, and they have repeatedly said, no comment.

PHILLIPS: All right. Elizabeth Cohen, thanks so much.

COHEN: Thanks.

PHILLIPS: We're going to take a quick break. More LIVE FROM right after this.

(COMMERCIAL BREAK)

O'BRIEN: Well, you could call it the crude awakening. And it continues on Wall Street. Rhonda Schaffler keeping tabs on the action. She joins us now from the stock exchange.

You got a long commute, don't you?

(STOCK REPORT)

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Aired October 7, 2004 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CO-HOST: And we do continue following this developing story. Once again, as Wolf Blitzer was reporting, two rockets striking the Sheraton Hotel in central Baghdad.
Our Brent Sadler was there from the very beginning.

MILES O'BRIEN, CO-HOST: And let's bring him back in.

Brent, are you with us?

BRENT SADLER, CNN CORRESPONDENT: Yes, I am, Miles. Go ahead.

O'BRIEN: All right. Brent, for people just tuning in, just take us back to the beginning, what you saw and heard.

SADLER: About an hour ago, Miles, I was about to do a live shot and heard the engine, the roar of a rocket that flashed past my position. I saw the orange tail come past our live shot location in the Palestine Hotel, saw the rockets slam into the Sheraton Hotel at a low level.

There was a pause of about 45 seconds. We were working out what we should do, when a second rocket came in. A line of sight attack for certain. These were low trajectory rockets that flew into the side of the third floor of the Sheraton.

And then after that, a U.S. troop started opening fire, and I saw machine gun bullets trace around, flying past us towards the direction of where those two rockets had been fired from.

So this was a very provocative attack in the center of Baghdad, in an area that is relatively secure. Tremendous explosion, shaking that hotel.

Let me just add, it's the Sheraton hotel. Two hotels side by side, the Sheraton and the Palestine Hotel, where we are. Both hotels occupied, used by Western news organizations and Western contractors.

A lot of security around here. It's on the outskirts of the Green Zone. A U.S. troop presence here blast-proof walls, but these rockets, low angle, straight into the side of the Sheraton Hotel.

I have no report of any casualties from the Sheraton, but certainly the scene inside the hotel, blast damage, bewildered people, shaken people coming to terms with this latest attack, an audacious attack in the center of town -- Miles.

O'BRIEN: Brent, how many rockets? Do we know? And given what you say about them, these low trajectory rockets, what would their range be? In other words, where would the firing point be?

SADLER: The firing point, I would guess, would be several hundred yards maybe, 400 or 500 yards from the hotel. I can -- from the tail of the second one that cleared some trees, it must have been in an area certainly within 500, 600 yards.

So whoever fired those or set, because they could well have been on a timing device, would have seen the tall building of the Sheraton Hotel. These are like two twin towers; they're very easy to mark out in the center of town.

And set those on timers, or manually launch those two rockets at the hotel. They are Kidusha (ph) style rockets fired from tubes. And short-range rockets that can do a lot of damage. Normally they can be pretty inaccurate, but I can tell you that both blasts hit about third-floor level, because at my eye level, when I saw those two explosions, and when the gunfire broke out, then we hit the deck.

O'BRIEN: How frequently has this hotel become a target in your time there?

SADLER: The Sheraton was hit several months ago when it was thought rockets, again, hit the higher floors of the hotel. But the consensus then was that insurgents were trying to lob either rockets or mortars, but lob -- lob firepower into the Green Zone over the Tigris River and they were using the hotel as an aim point.

This time the hotel, I have no doubt whatsoever, was the point they were aiming at, because those two rockets followed the same track, hit the same rough locations, the third floor of the hotel.

So this was, you know, an audacious attack, very close to where U.S. troops are positioned in this area, just a few hundred yards. And then we saw gunfire and then the emergency service come in, and in the past ten minutes or so U.S. armor have been taking position around the area I'm talking to you from.

O'BRIEN: All right. So clearly in your mind it was not a misfire. Just to clarify in people's minds, you're outside the Green Zone. But where you are, you're afforded much of the security umbrella that people inside the Green Zone would have, correct?

SADLER: No, we have separate -- separate security. There are U.S. soldiers here in this area where these two hotels are, because of the numbers of Westerners who use these two hotels. But it's a pretty low-profile U.S. presence. I'm not going to go into numbers for obvious reasons. But certainly a low-profile presence.

Several months ago we had tanks and heavier equipment here. That security has been downgraded. But nobody can just walk through this area. You have to come through a number of checkpoints. But this was certainly not a misfire. These were two rockets coming in the same trajectory, and they both hit the third floor of the hotel.

O'BRIEN: Brent Sadler in Baghdad. Thank you very much -- Kyra.

PHILLIPS: Ken Robinson, our CNN military intelligence analyst, also following this developing story out of Baghdad. Ken joins us now from Washington.

Ken, from an intelligence aspect, I don't know if you've had a chance to talk with your sources, have you been able to find anything out about who's behind the attacks?

KEN ROBINSON, CNN CORRESPONDENT: No, Kyra, I actually just got off a plane just a few minutes ago myself from Atlanta to Washington, D.C.

Listening to the reporting as I came into the net, Pentagon correspondent Barbara Starr had the most salient point, and that was that there is an indication of an emergence of different groups, Sunni groups that might be cooperating.

We had been talking in recent days to members of the coalition, we talked about what they called a unified command of the Mujahhidin, which comprises about 10 separate insurgent groups that kind of reach across all the different ideologies, including nationalist and Jihadist guerrillas, that they are seeing kind of an emergence of.

And this is kind of what Barbara was speaking to, that, one, the Pentagon sources were saying they don't know specifically who is attributed to this specific attack, but this trend, this indication that it looks like many of these groups may be starting to cooperate together is very important.

And the point of that, the headline of that is, it's a double- edged sword. On one hand, if they all come and unite together, it can cause more problems. Opposite, is if they all unite together, they may be easier to target.

PHILLIPS: Is that -- as you talk with your sources, because that's quite a different strategy from where things started from the very beginning.

Now looking at a unified command, I mean, even though we're seeing attacks like this, from an intelligence perspective, from a Pentagon perspective, those that you know there, operating in the unified command, does it in some ways make things easier for U.S. forces, or at least those trying to strategize there in Baghdad, and also within the Pentagon?

ROBINSON: My personal opinion would be, yes, it would, that if they were working within a unified group -- remember, all insurgents have to do several things. They've got to eat; they've got to sleep; they've got to coordinate, they've got to rehearse; they've got to practice; they've got to communicate amongst themselves. And anytime you find groups that will do that in a unified way, with patterns that will develop from that, they're easier to target. And I think that the U.S. forces on the ground will welcome that from that aspect.

The question will be, you know, just because someone gives themselves a name calls themselves the unified command or the Mujahhidin, doesn't really show how really unified they are.

There's another group out there called the National Front for the Liberation of Iraq. And, you know, all of these different groups are names right now. And the real issue are, the people who are moving out from the different villages and conducting attacks.

If and when these attacks become coordinated, where instead of having them be isolated across the country, they geographically can freeze down a sector, especially an infrastructure sector, like the oil infrastructure, then they may prove to be very problematic.

Because you know, throughout all of the problems that they've had in Iraq in the last year, Iraq has still maintained the ability to produce 2.5 billion barrels per day. That's not bad in the middle of an insurgency and in the middle of horrible reconstruction efforts.

PHILLIPS: Ken Robinson, military analyst. Thank you so much for joining us there from Washington.

If you're just tuning in, once again, two rocket strikes -- or two rockets, rather, strike the Sheraton Hotel in central Baghdad, a hotel where a number of Westerners are staying, journalists and foreigners, of course, coming in to helping -- help to rebuild Iraq.

Those attacks taking place within the last hour. We're continuing to follow this developing story -- Miles.

O'BRIEN: CNN's Barbara Starr is at the Pentagon. She's been watching things from there, querying military leaders there about how this fits into the overall tactics and strategies for the U.S.

Barbara, what are they saying there right now about what we know about the possible point of origins for these particular rockets? And what it means to be targeting a civilian hotel filled with journalists?

BARBARA STARR, CNN CORRESPONDENT: Well, you know, Miles, so far, what we are hearing is that top officials here in the building are watching television to get the latest. That's often the way it is here at the Pentagon.

But for those of us who have traveled to Iraq and dealt with the U.S. military in Baghdad, what I can tell you is just across the river from this attack site, inside the Green Zone, at coalition military headquarters, there is a 24/7 operation center, and we can pretty much guarantee you, officials there looking at this very closely on the streets of Baghdad, looking at this situation and responding on a tactical level, if you will. That means, what's going on on the street, and how to deal with this. So, first of all, let's address that question.

This is really an example of the unfolding of the insurgency tonight on the streets of Baghdad. This isn't a strategic attack. This is not something that is going to change the balance of the situation in the country.

But this is an example of how the insurgency can launch close- range urban attacks on the streets of Baghdad, terrify people, force the military to respond, force Iraqi security forces to go out on the street, and really unsettle, at minimum, the Iraqi people, the Iraqis who live in Baghdad, who have to deal with this every day. And it's causing them great anxiety. That is what the insurgency is doing.

This -- this attack from a military point of view, from everything Brent Sadler is reporting from his eyes on the scene, is a close combat, urban attack, clearly by short-range rockets fired very close to this hotel. People who perhaps, insurgents who had line of sight, could see the hotel, could get that close to their target.

And that's a key point, that the insurgents can get that close. Machine gunners, coalition, U.S. machine gunners firing back. Machine gunfire very close range. This is what urban warfare against the insurgency is all about these days on the streets of Baghdad, really basically street-to-street fighting.

It's an example of where the insurgents are having success by demonstrating they can launch these attacks, shoot and scoot, if you will. It's the problem in getting back at them. Can the U.S., can the Iraqis launch forces back on the streets quick enough to find these people, to a counterinsurgency against them?

Now, all of this, Miles, against the broader backdrop of the U.S. and coalition counter-insurgency strategy. As we know, as we have been reporting for days now, large numbers of U.S. and Iraqi forces moving through the insurgent areas, trying to take these cities back: the Sadr City suburb of Baghdad, Samarra, south of Baghdad, eventually going into Fallujah.

But the insurgency demonstrating tonight on the streets of Baghdad they can shoot, they can scoot, they can disappear into the night, and it's a real long-term challenge.

If you take an insurgency down in a city, have they really left? Have you really defeated them? Have they just melted into the night? And can those Iraqi security forces really maintain that local control for an extended period of time, enough to get those Iraqi elections going at the end of January -- Miles.

O'BRIEN: Barbara Starr with case in point of what they call at the Pentagon asymmetrical warfare. Thank you very much, Barbara.

We'll be back with more in just a moment. Stay with us.

(COMMERCIAL BREAK) ELAINE QUIJANO, CNN CORRESPONDENT: ... of course, was the administration's main rationale for going to war there. White House officials maintain the report documents that Saddam Hussein, in fact, was a threat, they say, to the United States.

On the campaign trail, in Miami, in fact, Vice President Dick Cheney reiterated that. He pointed to weapons inspector Charles Duelfer's finding that Saddam Hussein was trying to have sanctions lifted.

However, important to note that the report says Iraq had no formal written plan to revive WMD programs, even if sanctions had been lifted.

Now, in the meantime, as you mention, the president heading to Wassaw, Wisconsin, this afternoon in the central part of that state. He will be speaking at a rally there, but before moving onto St. Louis ahead of tomorrow's debate.

His aides say that the president is preparing by talking with senior staffers, and when asked whether or not he is planning to modify any aspect of his debate performance, spokesman Scott McClellan says that the president is focusing on substance, not style -- Kyra.

PHILLIPS: Elaine Quijano, live from the White House. Thank you.

Well, cancel your plans and program your TiVo. CNN's special primetime coverage of the second presidential debate starts at 7 p.m. Eastern tomorrow. It's 4 on the West Coast, live from St. Louis.

And today you can join CNN's Judy Woodruff for "INSIDE POLITICS" on the road at 3 Eastern, followed by "CROSSFIRE" at 4:30. At 8 Eastern, Paula Zahn hosts a town meeting, live from Racine, Wisconsin. You can weigh in via e-mail. Send your questions for the Bush and Kerry camps to CNN.com/Paula.

Straight ahead, secret weapon. Take a look at this. What do you think of it? If you answer incorrectly, you could end up in the line of fire.

MARY SNOW, CNN CORRESPONDENT: I'm Mary Snow on Alderson, West Virginia, where homemaking guru Martha Stewart is about to learn about a new kind of big house. I'll have the story coming up.

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UNIDENTIFIED MALE: The state. We're the only community in the United States that euthanized a public official.

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PHILLIPS: Extreme politics, an election that's gone to the dogs, donkeys and pigs? Later on LIVE FROM.

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

O'BRIEN: The ever so tasteful clock counting down for Martha Stewart. She must surrender for her five-month prison sentence by 4:00 tomorrow.

Hoards of media, curious onlookers, have descended on Alderson, West Virginia, taking up positions outside Camp Cupcake, as they call it, to await the arrival of inmate number 55170-054. That could happen anytime. I guess you could call her 54.

CNN's Mary Snow is among the throngs standing by.

And Mary, it's really quite a scene there. There's a lot of support in and out of Camp Cupcake for Martha.

SNOW: That's right, Miles. It is quite a scene. And you know, just a little over 24 hours from now, this will be Martha Stewart's new home. And in the road behind me, just a half mile down that road, she's scheduled to report here for five months.

Just about anywhere you go in Alderson, the focus is on one thing, and one thing only, and that is Martha Stewart. And it's not just the residents who are waiting for her arrival; it's very clear that the inmates are well aware she's on her way.

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SNOW (voice-over): Here are Martha Stewart's new neighbors.

UNIDENTIFIED FEMALE: Free Martha! Freedom!

SNOW: Tucked in the Appalachian Mountains, the absence of high security walls has given Alderson the name Camp Cupcake. But some inmates made it clear they don't like the sugarcoated name.

UNIDENTIFIED FEMALE: I'll tell you one thing. This ain't no damn Camp Cupcake!

SNOW: And Alderson locals agree.

HILLARY BENISH, ALDERSON HOSPITALITY HOUSE: That's really a disservice. Actually, none of the local people around here ever refer to it as Camp Cupcake.

SNOW: Space is tight. And as far as just who will share quarters with Martha Stewart, there are more than 1,000 possibilities, including 48-year-old Meg Scott Phipps, a former North Carolina agriculture commissioner serving 48 months for campaign finance fraud. Or 34-year-old Kentucky housewife Kimberly Goodson, serving 87 months on intent to murder.

And from someone who served time at Alderson, inmates come from all different backgrounds but share something in common -- no privacy.

JUDITH KELLY, ARRESTED PROTESTOR: Your freedom is totally taken away. They strip you of everything. Strip searches are part of the procedure there. Counts, constantly having to jump through hoops for people, kind of invasion of privacy at all times.

SNOW: While Martha Stewart will serve her five months for lying about a stock sale, she's in the minority. Sixty-one percent of inmates are doing time for narcotics charges, 15 percent for bribery, fraud and extortion, four percent for white-collar crimes.

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SNOW: And when Martha Stewart arrives here at the so-called Camp Cupcake, she'll find another kind of camp, so to speak, a media camp. There are satellite trucks parked here at the entrance to Alderson. And on the size of about a football field, all kinds of cameras, cables, waiting for her arrival. And it is growing really almost by the hour.

Big question is when she will arrive here. She is scheduled to be here by 2 p.m. tomorrow afternoon. A lot of kind of speculation about how she'll spend her last day of freedom. And there had been talk about a wedding she was invited to tonight in New York.

Her publicist got married over the weekend. You may recall seeing those photographs from the Bahamas when Martha Stewart did attend the wedding. The reception is tonight. But a spokesperson for Stewart says that she does not plan to attend -- Miles.

O'BRIEN: CNN's Mary Snow in Alderson, West Virginia. Thank you very much -- Kyra.

PHILLIPS: It's been a week since sales of the popular arthritis drug Vioxx were halted worldwide on fears it might cause heart or liver problems. Now there's at least one lawsuit on the table, plus a call for congressional hearings on how Vioxx got approved in the first place.

CNN's medical correspondent, Elizabeth Cohen, here to talk about the fallout.

What's the latest?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, the fallout is big. Vioxx was approved about five and a half years ago and was a very popular drug, one of the most popular, in fact. Tens of millions of people took it for arthritis pain and for other pain, as well.

Well, there's a new study that was done by Kaiser Permanente, the HMO, and it was reported in the "Wall Street Journal" that said that nearly 28,000 people had heart attacks and also people who died because they were taking Vioxx when they could have been -- compared to people who were taking the competitor, which is called Celebrex.

And so this says that this was -- these deaths were avoidable, didn't have to happen, and that it was because people were taking this drug instead of another drug.

PHILLIPS: When did the company know about the problems?

COHEN: Well, this is the $64 million question, as it were. When did Merck, which makes Vioxx, know that there were heart issues with Vioxx, and at what point did they know it?

Now the drug was approved in 1999, and some people say that just one year later, there were studies that -- that showed that there were heart problems, and that Merck and the FDA should have acted on it.

But it took them years to put warnings on labels. And of course, it wasn't taken off the market until just a couple of weeks ago, until five and a half years later.

PHILLIPS: Yes, we were talking about it. But what is Merck saying now, spokespeople?

COHEN: What Merck says now is they put out a statement, and it says, "We have conducted controlled clinical trials in over 28,000 patients," and Merck promptly disclosed these results to the FDA.

We have called the FDA repeatedly, and they have repeatedly said, no comment.

PHILLIPS: All right. Elizabeth Cohen, thanks so much.

COHEN: Thanks.

PHILLIPS: We're going to take a quick break. More LIVE FROM right after this.

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O'BRIEN: Well, you could call it the crude awakening. And it continues on Wall Street. Rhonda Schaffler keeping tabs on the action. She joins us now from the stock exchange.

You got a long commute, don't you?

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