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Explosion in Al-Mansour Neighborhood of West Baghdad; Rumsfeld's Surprise Visit; Last-Minute Shopping

Aired December 24, 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.


KYRA PHILLIPS, CNN ANCHOR: We continue with our breaking news coverage now. A powerful blast shaking the western part of Baghdad.
We're being told the blast went off near the city's main communications tower in the wealthy Mansour district. Mansour is an area which is home to several senior politicians, embassies, foreign contractors working on U.S.-funded projects in Iraq.

On the phone with us right now CNN Baghdad bureau manager Kevin Flower with more details.

Kevin, what do you know?

KEVIN FLOWER, CNN BAGHDAD BUREAU MANAGER: Well, Kyra, Iraqi police officials are telling us that within the last hour a huge explosion occurred in the Al-Mansour district, which you indicated is a wealthy part of Baghdad, home to many politicians, companies. There have been many American contracting companies that were located there for a while.

And what the police have said is that they suspect that a fuel truck filled with either oil or gasoline was loaded with explosives and exploded. At this point, it is not clear how many casualties have been -- have occurred in the attack, but the damage is extensive.

They said that residences and stores nearby were severely damaged. And police are on the lookout for the possibility of another fuel truck in the area that they believe could be part of the -- you know, could be a second part of the attack that has taken place.

PHILLIPS: Have they reported any casualties yet, Kevin?

FLOWER: The initial reports are that there were heavy casualties, but we have no numbers. We don't know if there have been any deaths. No -- no specific information on that at this moment.

PHILLIPS: Now, all this information is coming from Iraqi police. Any word from U.S. forces in that area?

FLOWER: The U.S. military in Baghdad is aware of the explosion and told us that they are sending a reaction force to the scene. But at this point, they had no knowledge. They -- they understood that Iraqi police were on the scene and that Iraqi -- you know, Iraqi ambulances and firefighters were also on scene as well. But no information from the U.S. military. PHILLIPS: When we talk about this area of Mansour, you say several senior politicians and embassies, foreign contractors located in this area. Any members of the interim government, Iraqi interim government, any names that we know that we talk about on a daily basis?

FLOWER: I don't think there are any names that would ring a bell to most of our -- to most of our viewers. But there are many people who have been involved in the political process.

One person who lives in the area is Adnan Pachachi, who is a former foreign minister for Iraq and a political player, once part of the governing council. He lives in that area. No indication that this was targeting him or targeting his residence. But like I -- like I said before, a lot of notables in the neighborhood, Baghdad notables.

PHILLIPS: All right. Kevin Flower, CNN Baghdad bureau manager, continue working that story for us. And we'll continue our coverage. Thank you so much, Kevin.

Once again, if you are just tuning in, it's a story we're going to continue to follow, and that is a powerful blast shaking up the western part of Baghdad, the Mansour district. Iraqi police saying it was a fuel truck loaded with explosives. We'll continue to follow this story -- Miles.

MILES O'BRIEN, CNN ANCHOR: Secretary of Defense Donald Rumsfeld paid a surprise visit to Iraq and parts of Baghdad. Nowhere on his itinerary was that particular neighborhood, that western Baghdad neighborhood of Al-Mansour.

Beyond that, for security reasons we're not saying what his itinerary is. But we do know it's safe to say he was not in that location at that time.

That defense secretary surprise visit comes three days after that devastating suicide bombing at a mess tent in Mosul, Iraq. Now, Mosul is where the secretary's goodwill mission began.

We begin with CNN's David Ensor, who is following Rumsfeld's travel, as well as his baggage from the CNN bureau in Washington. Lots to digest here -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Yes, Miles.

Well, Rumsfeld flew into Iraq at dawn on this Christmas Eve on a visit designed clearly to boost troop morale. And despite the recent revelation that until recently he was not personally signing condolence letters to dead soldiers' families, he was warmly received in Mosul, the scene of the recent large attack that you just mentioned, and also in Tikrit and in Falluja. He told the soldiers their sacrifice will be worth it.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: And the thought of turning over this country to the people who behead people on television and videos, to the people who consciously, purposefully kill innocent men, women and children, would turn this part of the world and this country back to darkness. And we simply can't let that happen.

(END VIDEO CLIP)

ENSOR: Rumsfeld posed for photos with soldiers, one of whom surprised the defense secretary by presenting him with a cigar.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sir, this is for you, sir. I don't know if you smoke or not, but you can take that back to Washington, D.C., sir. That came out of Saddam Hussein's stash and this came off of an insurgent (UNINTELLIGIBLE). He's not going to be smoking anymore for awhile.

RUMSFELD: I love it.

(END VIDEO CLIP)

ENSOR: On this trip there were no tough questions from the soldiers. One asked, "How do we win the war in the media?" Rumsfeld said he guessed that's "What's news has to be bad news to get into the press," adding that the question did not sound by him as if it was planted by the press.

That was a reference to a tough question he got last time in Kuwait, a question about why all U.S. forces don't have the best armor available for their vehicles. A reporter later claimed to have planted that question with the soldier, though the soldier since insisted in print that the question was his own.

This trip, however, was a chance for the defense secretary to try to show that he really does care about the troops in Iraq at a time when, of course, some critics, including some Republicans, have suggested otherwise -- Miles.

O'BRIEN: David, I must confess, looking at that tape, I'm a little surprised to see all those troops without body armor on.

ENSOR: Well, we do not know what the circumstances were, what kind of a perimeter may have been created around them. Some of the pictures you saw were in a facility in Baghdad where there are only U.S. troops, no Iraqis, no other troops. And it is a more secure area than the area in Mosul where that tragedy took place the other day.

O'BRIEN: David Ensor, thank you very much -- Kyra.

PHILLIPS: From the State Department today, confirmation that outgoing Secretary of State Colin Powell sees more troops as the key to quelling Iraqi violence. A senior official tells CNN Powell weighed in during a meeting last month with the president, British Prime Minister Tony Blair and Condoleezza Rice, the national security adviser and secretary of state nominee. Officials insist there's no link among that conversation and the decision to boost U.S. troop strength to 150,000 for next month's elections.

In the next hour of LIVE FROM, home for the holidays. Two American soldiers and the long journey home from the battlefields of Iraq. You can only see it on CNN, and it's a pretty moving piece.

Our Thelma Gutierrez traveled with the soldiers. We hope you'll stick around to see the story.

O'BRIEN: All right. Speaking of Americans on the move, let's talk about some civilians doing it as well.

A winter storm in the Midwest has turned holiday travel into a mess for thousands of people. The weather has had a ripple effect at airports all across the country. Some flights canceled, others delayed.

And a 25-mile stretch of Interstate 64 in Indiana finally open to traffic. It was shut down Wednesday after a storm dumped up to two feet of snow in that part of the world. The National Guard had to rescue more than 100 stranded motorists. Crews continuing to clear snow and abandoned cars from the interstate.

PHILLIPS: All right. Let's check in with the latest weather conditions across the country. Our meteorologist, Orelon Sidney, live in the CNN Weather Center.

(WEATHER REPORT)

O'BRIEN: Well, you probably know someone who finished their Christmas shopping in September... Kyra. That's such a -- such a goody two-hoes.

Anyway, for the rest of us, that task doesn't get done until yesterday for me, OK? But I'm done, at least. And for some people there's no time like the present to buy a present. CNN's Allan Chernoff monitoring last-minute shopping at a mall in Short Hills, New Jersey.

(BEGIN VIDEOTAPE)

CHERNOFF: It's down to the wire for holiday shoppers.

UNIDENTIFIED FEMALE: I usually try to have everything done before Thanksgiving. But this year I missed that target and so I'm out last minute shopping.

CHERNOFF: But for retailers, the holiday season is not nearly finished, not even close. A growing number of shoppers are planning to spend heavily after Christmas, over 20 percent of their holiday budget, according to one survey. The quest is to get more for their money.

SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: Post-Christmas shopping now is more important than it's ever been in the history of retail. The main factor here is gift cards. CHERNOFF: Gift cards, an easy solution at the last minute, are extending the shopping season. No longer perceived as the lazy man's gift, Americans are buying a record number of gift cards. It's especially important for retailers, since gift cards don't count as sales until they're cashed in.

TARA WEINER, DELOITTE & TOUCHE: A significant percentage, up to 30 percent, spend twice the face value of the gift card, a tremendous opportunity for retailers to focus on.

CHERNOFF: It's a second chance for retailers, many of whom have had a challenging holiday season, discounters in particular. Wal-Mart has said it expects sales in December may rise only 1 percent from the year ago period. Some of the money shoppers might have spent on gifts this year instead has gone to fill the gas tank -- 20 percent more expensive than last year.

KEN HICKS, PRESIDENT, J.C. PENNEY: It could take as much as $10 out of each customer's pocket per week for every car that they have. And that has an impact on what their available -- what they have available to spend for Christmas gifts.

CHERNOFF: J.C. Penney is doing better than most department stores, some of which have been struggling to meet modest sales targets of gains in the low single digits. But upscale stores like Nordstrom, Neiman Marcus and Sak's, whose customers barely feel the pinch of higher gas prices, are filled with the cheer of ringing cash registers.

(END VIDEOTAPE)

CHERNOFF: Today is likely to be one of the busiest days of the shopping season, and that's in part because of an American tradition called procrastination -- Miles.

O'BRIEN: Ah, yes, I'm familiar with that one, Allan. But I think, you know, finishing yesterday is not bad. And I had done some even before that.

Nevertheless, what are the hot items right now? What are people going for in that particular mall where you are right now?

CHERNOFF: Well, probably leading the list is the Apple iPod. They do have an Apple store here. It is packed. And this morning they were telling me they still had some iPods in stock.

Certainly the wide-screen televisions, all sorts of high-end electronics doing very well. Cashmere sweaters also very popular this season -- Miles.

O'BRIEN: All right. So wait a minute. So, folks, there are iPods at the Short Hills Mall in New Jersey, right?

You're going to get stampeded in a minute, Allan. I think they are pretty hard to find right about now. All right. Thank you very much. Appreciate it, sir -- Kyra. PHILLIPS: Well, all weekend we're going to bring you touching Christmas reunions between U.S. troops and their families back home. There's a way you can help make it happen also. Play Santa to a military family this year.

(BEGIN VIDEO CLIP, "FAT ALBERT")

BILL COSBY, ACTOR, "FAT ALBERT": Who is it?

UNIDENTIFIED MALE: It's Fat Albert.

COSBY: Yeah, right.

(END VIDEO CLIP, "FAT ALBERT")

PHILLIPS: Hey, hey, hey. How was that? Was that good?

Thanks, Jarod (ph). We're going to preview those Christmas weekend blockbusters. Can you believe I got it that deep?

(COMMERCIAL BREAK)

PHILLIPS: Unfortunately, there are a great many in the U.S. military who can't make it home this Christmas. But a great program has helped provide the next best thing to the troops and their families: a phone call. Our Peter Viles explains.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Hi, dad.

KIMO HANSEN, SERVING IN IRAQ: Hi, little sweetie. What's up?

UNIDENTIFIED MALE: Nothing.

PETER VILES, CNN CORRESPONDENT (voice-over): From half a world away, a father calls to tease his 16-year-old son.

HANSEN: What's up with the deep voice?

UNIDENTIFIED MALE: What are you talking about?

VILES: He calls to check in with his 12-year-old.

HANSEN: How about your skateboarding?

UNIDENTIFIED MALE: I'm getting better.

VILES: Calls to tell his 10-year-old that she's smart enough to beat her big brother in chess.

HANSEN: You learn really quick, and it wouldn't surprise me at some point if you beat Brent before, you know, the end of the year. You're really good.

VILES: When dad is fighting in a war and Kimo Hansen's flying dangerous helicopter missions in Iraq, every call is precious.

BOBBY HANSEN, HUSBAND SERVING IN IRAQ: It means everything. I mean, it can make your whole day.

VILES: This call was a gift of the American people through a program created by the military and AT&T to send prepaid calling cards to the troops.

MAJ. GEN. KATHRYN FROST, U.S. ARMY: There is no better way to connect the front lines to the home front than to provide that prepaid calling card. We believe it's the best care package available. You know, there's nothing like hearing a voice on the other end of the line to reassure, to motivate and inspire.

VILES: Through AAFES.com, the Web site of the Army and Air Force Exchange Service, Americans have donated $1.3 million to help troops call home from phone banks like this one in Iraq. Radio station KLBJ in Austin, Texas, raised $70,000. The governor of California and his wife raised more than $150,000.

Kimo Hansen won't be home for Christmas. He'll open his gifts alone.

K. HANSEN: Well, I think I'm just going to open them just by myself. I think I'm just going to -- like I told Kayla (ph), I was just going to play some Christmas music and then open them up by myself.

VILES: But there's no self-pity here. Even while fighting a war, this soldier found a way to surprise his wife at Christmas.

B. HANSEN: Kimo! Oh, my gosh.

K. HANSEN: What is it?

B. HANSEN: You know, I don't -- it's a little white box, Kimo. You're good with these little boxes.

K. HANSEN: I'm telling you. What's in it, though?

B. HANSEN: I'm getting to that.

K. HANSEN: Are you?

B. HANSEN: Yes.

K. HANSEN: OK.

VILES: A diamond ring and a phone call to remember.

K. HANSEN: I'm just gratified and blessed to have a wife like you, Bobby, and a mother on top of that.

B. HANSEN: OK. Stop now. You're going to make me cry.

VILES: Peter Viles, CNN, Killeen, Texas. (END VIDEOTAPE)

(COMMERCIAL BREAK)

PHILLIPS: More information now on that breaking news story that we were telling you about just a few minutes ago, that powerful blast that shook the western part of Baghdad in the Mansour district. Iraqi police bringing us information.

They are now telling us that they are reporting 12 people believed to be dead, 15 wounded in a fuel truck explosion. Receiving different bits and pieces of information.

Apparently, according to the police, this truck was loaded with explosives. It also might have been filled with some type of gas or oil.

Iraqi police now telling us in this explosion that took place in the Mansour district, home to several senior politicians, embassies, foreign contractors working on U.S.-funded projects in Iraq, they are now telling us 12 dead, 15 wounded. No identification on these individuals. We'll continue to follow that story.

Also, new information now out of Fort Lewis, Washington. An update on those soldiers that were killed in Mosul. You remember the suicide bomber that infiltrated Camp Merez.

Our Miguel Marquez now live from Fort Lewis, Washington, with more on those soldiers -- Miguel.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Kyra, the Department of Defense today confirming that six of its Fort Lewis soldiers in the Stryker Brigade were killed in that blast in Mosul a couple of days ago. And this one has certainly affected people from across the country.

They released a list. Captain William Jacobsen Jr., he's a 31- year-old captain from Charlotte, North Carolina. Staff Sergeant Julian Melo, he's 47 years old from Brooklyn, New York. Sergeant Darren VanKomen, 33, from Bluefield, West Virginia.

Staff Sergeant -- and this guy was promoted to staff sergeant posthumously -- Robert Johnson. He's 23 years old from Castro Valley, California. Specialist Jonathan Castro, 21 years old, from Corona, California, and Private First Class Lionel Ayro, 22 years old, from Jeanerette, Louisiana.

The Mello family, Julian Melo's family, the 47-year-old from Brooklyn, has released a statement saying, "Staff Sergeant Melo was a soldier first and all that entails. He was a great father, loving brother, outstanding friend to many and a devoted husband."

"The love for his country was such that he was willing to make the final sacrifice. He knew how to love and play and lived his life to the fullest. He loved no one more than his wife and son." "His wife Norma felt she could never live up to his expectations because whenever she did anything for him, he would turn around and do something exceptional. He was well respected and loved by his fellow soldiers. He was born to be a soldier but never took anything too seriously. His love for his family, his country and his fellow soldiers was evident in everything he did."

And I'm sure there are a lot of soldiers and their families out there today who hear those words and hear them echo through their own lives. A blast that tore through Mosul has affected this fort, but affected lives and families across this entire country -- Kyra.

PHILLIPS: Miguel Marquez remembering those six, their families and all the other soldiers and Iraqis killed by that suicide bomber just a day before Christmas. Thank you, Miguel.

We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

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Aired December 24, 2004 - 14:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: We continue with our breaking news coverage now. A powerful blast shaking the western part of Baghdad.
We're being told the blast went off near the city's main communications tower in the wealthy Mansour district. Mansour is an area which is home to several senior politicians, embassies, foreign contractors working on U.S.-funded projects in Iraq.

On the phone with us right now CNN Baghdad bureau manager Kevin Flower with more details.

Kevin, what do you know?

KEVIN FLOWER, CNN BAGHDAD BUREAU MANAGER: Well, Kyra, Iraqi police officials are telling us that within the last hour a huge explosion occurred in the Al-Mansour district, which you indicated is a wealthy part of Baghdad, home to many politicians, companies. There have been many American contracting companies that were located there for a while.

And what the police have said is that they suspect that a fuel truck filled with either oil or gasoline was loaded with explosives and exploded. At this point, it is not clear how many casualties have been -- have occurred in the attack, but the damage is extensive.

They said that residences and stores nearby were severely damaged. And police are on the lookout for the possibility of another fuel truck in the area that they believe could be part of the -- you know, could be a second part of the attack that has taken place.

PHILLIPS: Have they reported any casualties yet, Kevin?

FLOWER: The initial reports are that there were heavy casualties, but we have no numbers. We don't know if there have been any deaths. No -- no specific information on that at this moment.

PHILLIPS: Now, all this information is coming from Iraqi police. Any word from U.S. forces in that area?

FLOWER: The U.S. military in Baghdad is aware of the explosion and told us that they are sending a reaction force to the scene. But at this point, they had no knowledge. They -- they understood that Iraqi police were on the scene and that Iraqi -- you know, Iraqi ambulances and firefighters were also on scene as well. But no information from the U.S. military. PHILLIPS: When we talk about this area of Mansour, you say several senior politicians and embassies, foreign contractors located in this area. Any members of the interim government, Iraqi interim government, any names that we know that we talk about on a daily basis?

FLOWER: I don't think there are any names that would ring a bell to most of our -- to most of our viewers. But there are many people who have been involved in the political process.

One person who lives in the area is Adnan Pachachi, who is a former foreign minister for Iraq and a political player, once part of the governing council. He lives in that area. No indication that this was targeting him or targeting his residence. But like I -- like I said before, a lot of notables in the neighborhood, Baghdad notables.

PHILLIPS: All right. Kevin Flower, CNN Baghdad bureau manager, continue working that story for us. And we'll continue our coverage. Thank you so much, Kevin.

Once again, if you are just tuning in, it's a story we're going to continue to follow, and that is a powerful blast shaking up the western part of Baghdad, the Mansour district. Iraqi police saying it was a fuel truck loaded with explosives. We'll continue to follow this story -- Miles.

MILES O'BRIEN, CNN ANCHOR: Secretary of Defense Donald Rumsfeld paid a surprise visit to Iraq and parts of Baghdad. Nowhere on his itinerary was that particular neighborhood, that western Baghdad neighborhood of Al-Mansour.

Beyond that, for security reasons we're not saying what his itinerary is. But we do know it's safe to say he was not in that location at that time.

That defense secretary surprise visit comes three days after that devastating suicide bombing at a mess tent in Mosul, Iraq. Now, Mosul is where the secretary's goodwill mission began.

We begin with CNN's David Ensor, who is following Rumsfeld's travel, as well as his baggage from the CNN bureau in Washington. Lots to digest here -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Yes, Miles.

Well, Rumsfeld flew into Iraq at dawn on this Christmas Eve on a visit designed clearly to boost troop morale. And despite the recent revelation that until recently he was not personally signing condolence letters to dead soldiers' families, he was warmly received in Mosul, the scene of the recent large attack that you just mentioned, and also in Tikrit and in Falluja. He told the soldiers their sacrifice will be worth it.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: And the thought of turning over this country to the people who behead people on television and videos, to the people who consciously, purposefully kill innocent men, women and children, would turn this part of the world and this country back to darkness. And we simply can't let that happen.

(END VIDEO CLIP)

ENSOR: Rumsfeld posed for photos with soldiers, one of whom surprised the defense secretary by presenting him with a cigar.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sir, this is for you, sir. I don't know if you smoke or not, but you can take that back to Washington, D.C., sir. That came out of Saddam Hussein's stash and this came off of an insurgent (UNINTELLIGIBLE). He's not going to be smoking anymore for awhile.

RUMSFELD: I love it.

(END VIDEO CLIP)

ENSOR: On this trip there were no tough questions from the soldiers. One asked, "How do we win the war in the media?" Rumsfeld said he guessed that's "What's news has to be bad news to get into the press," adding that the question did not sound by him as if it was planted by the press.

That was a reference to a tough question he got last time in Kuwait, a question about why all U.S. forces don't have the best armor available for their vehicles. A reporter later claimed to have planted that question with the soldier, though the soldier since insisted in print that the question was his own.

This trip, however, was a chance for the defense secretary to try to show that he really does care about the troops in Iraq at a time when, of course, some critics, including some Republicans, have suggested otherwise -- Miles.

O'BRIEN: David, I must confess, looking at that tape, I'm a little surprised to see all those troops without body armor on.

ENSOR: Well, we do not know what the circumstances were, what kind of a perimeter may have been created around them. Some of the pictures you saw were in a facility in Baghdad where there are only U.S. troops, no Iraqis, no other troops. And it is a more secure area than the area in Mosul where that tragedy took place the other day.

O'BRIEN: David Ensor, thank you very much -- Kyra.

PHILLIPS: From the State Department today, confirmation that outgoing Secretary of State Colin Powell sees more troops as the key to quelling Iraqi violence. A senior official tells CNN Powell weighed in during a meeting last month with the president, British Prime Minister Tony Blair and Condoleezza Rice, the national security adviser and secretary of state nominee. Officials insist there's no link among that conversation and the decision to boost U.S. troop strength to 150,000 for next month's elections.

In the next hour of LIVE FROM, home for the holidays. Two American soldiers and the long journey home from the battlefields of Iraq. You can only see it on CNN, and it's a pretty moving piece.

Our Thelma Gutierrez traveled with the soldiers. We hope you'll stick around to see the story.

O'BRIEN: All right. Speaking of Americans on the move, let's talk about some civilians doing it as well.

A winter storm in the Midwest has turned holiday travel into a mess for thousands of people. The weather has had a ripple effect at airports all across the country. Some flights canceled, others delayed.

And a 25-mile stretch of Interstate 64 in Indiana finally open to traffic. It was shut down Wednesday after a storm dumped up to two feet of snow in that part of the world. The National Guard had to rescue more than 100 stranded motorists. Crews continuing to clear snow and abandoned cars from the interstate.

PHILLIPS: All right. Let's check in with the latest weather conditions across the country. Our meteorologist, Orelon Sidney, live in the CNN Weather Center.

(WEATHER REPORT)

O'BRIEN: Well, you probably know someone who finished their Christmas shopping in September... Kyra. That's such a -- such a goody two-hoes.

Anyway, for the rest of us, that task doesn't get done until yesterday for me, OK? But I'm done, at least. And for some people there's no time like the present to buy a present. CNN's Allan Chernoff monitoring last-minute shopping at a mall in Short Hills, New Jersey.

(BEGIN VIDEOTAPE)

CHERNOFF: It's down to the wire for holiday shoppers.

UNIDENTIFIED FEMALE: I usually try to have everything done before Thanksgiving. But this year I missed that target and so I'm out last minute shopping.

CHERNOFF: But for retailers, the holiday season is not nearly finished, not even close. A growing number of shoppers are planning to spend heavily after Christmas, over 20 percent of their holiday budget, according to one survey. The quest is to get more for their money.

SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: Post-Christmas shopping now is more important than it's ever been in the history of retail. The main factor here is gift cards. CHERNOFF: Gift cards, an easy solution at the last minute, are extending the shopping season. No longer perceived as the lazy man's gift, Americans are buying a record number of gift cards. It's especially important for retailers, since gift cards don't count as sales until they're cashed in.

TARA WEINER, DELOITTE & TOUCHE: A significant percentage, up to 30 percent, spend twice the face value of the gift card, a tremendous opportunity for retailers to focus on.

CHERNOFF: It's a second chance for retailers, many of whom have had a challenging holiday season, discounters in particular. Wal-Mart has said it expects sales in December may rise only 1 percent from the year ago period. Some of the money shoppers might have spent on gifts this year instead has gone to fill the gas tank -- 20 percent more expensive than last year.

KEN HICKS, PRESIDENT, J.C. PENNEY: It could take as much as $10 out of each customer's pocket per week for every car that they have. And that has an impact on what their available -- what they have available to spend for Christmas gifts.

CHERNOFF: J.C. Penney is doing better than most department stores, some of which have been struggling to meet modest sales targets of gains in the low single digits. But upscale stores like Nordstrom, Neiman Marcus and Sak's, whose customers barely feel the pinch of higher gas prices, are filled with the cheer of ringing cash registers.

(END VIDEOTAPE)

CHERNOFF: Today is likely to be one of the busiest days of the shopping season, and that's in part because of an American tradition called procrastination -- Miles.

O'BRIEN: Ah, yes, I'm familiar with that one, Allan. But I think, you know, finishing yesterday is not bad. And I had done some even before that.

Nevertheless, what are the hot items right now? What are people going for in that particular mall where you are right now?

CHERNOFF: Well, probably leading the list is the Apple iPod. They do have an Apple store here. It is packed. And this morning they were telling me they still had some iPods in stock.

Certainly the wide-screen televisions, all sorts of high-end electronics doing very well. Cashmere sweaters also very popular this season -- Miles.

O'BRIEN: All right. So wait a minute. So, folks, there are iPods at the Short Hills Mall in New Jersey, right?

You're going to get stampeded in a minute, Allan. I think they are pretty hard to find right about now. All right. Thank you very much. Appreciate it, sir -- Kyra. PHILLIPS: Well, all weekend we're going to bring you touching Christmas reunions between U.S. troops and their families back home. There's a way you can help make it happen also. Play Santa to a military family this year.

(BEGIN VIDEO CLIP, "FAT ALBERT")

BILL COSBY, ACTOR, "FAT ALBERT": Who is it?

UNIDENTIFIED MALE: It's Fat Albert.

COSBY: Yeah, right.

(END VIDEO CLIP, "FAT ALBERT")

PHILLIPS: Hey, hey, hey. How was that? Was that good?

Thanks, Jarod (ph). We're going to preview those Christmas weekend blockbusters. Can you believe I got it that deep?

(COMMERCIAL BREAK)

PHILLIPS: Unfortunately, there are a great many in the U.S. military who can't make it home this Christmas. But a great program has helped provide the next best thing to the troops and their families: a phone call. Our Peter Viles explains.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Hi, dad.

KIMO HANSEN, SERVING IN IRAQ: Hi, little sweetie. What's up?

UNIDENTIFIED MALE: Nothing.

PETER VILES, CNN CORRESPONDENT (voice-over): From half a world away, a father calls to tease his 16-year-old son.

HANSEN: What's up with the deep voice?

UNIDENTIFIED MALE: What are you talking about?

VILES: He calls to check in with his 12-year-old.

HANSEN: How about your skateboarding?

UNIDENTIFIED MALE: I'm getting better.

VILES: Calls to tell his 10-year-old that she's smart enough to beat her big brother in chess.

HANSEN: You learn really quick, and it wouldn't surprise me at some point if you beat Brent before, you know, the end of the year. You're really good.

VILES: When dad is fighting in a war and Kimo Hansen's flying dangerous helicopter missions in Iraq, every call is precious.

BOBBY HANSEN, HUSBAND SERVING IN IRAQ: It means everything. I mean, it can make your whole day.

VILES: This call was a gift of the American people through a program created by the military and AT&T to send prepaid calling cards to the troops.

MAJ. GEN. KATHRYN FROST, U.S. ARMY: There is no better way to connect the front lines to the home front than to provide that prepaid calling card. We believe it's the best care package available. You know, there's nothing like hearing a voice on the other end of the line to reassure, to motivate and inspire.

VILES: Through AAFES.com, the Web site of the Army and Air Force Exchange Service, Americans have donated $1.3 million to help troops call home from phone banks like this one in Iraq. Radio station KLBJ in Austin, Texas, raised $70,000. The governor of California and his wife raised more than $150,000.

Kimo Hansen won't be home for Christmas. He'll open his gifts alone.

K. HANSEN: Well, I think I'm just going to open them just by myself. I think I'm just going to -- like I told Kayla (ph), I was just going to play some Christmas music and then open them up by myself.

VILES: But there's no self-pity here. Even while fighting a war, this soldier found a way to surprise his wife at Christmas.

B. HANSEN: Kimo! Oh, my gosh.

K. HANSEN: What is it?

B. HANSEN: You know, I don't -- it's a little white box, Kimo. You're good with these little boxes.

K. HANSEN: I'm telling you. What's in it, though?

B. HANSEN: I'm getting to that.

K. HANSEN: Are you?

B. HANSEN: Yes.

K. HANSEN: OK.

VILES: A diamond ring and a phone call to remember.

K. HANSEN: I'm just gratified and blessed to have a wife like you, Bobby, and a mother on top of that.

B. HANSEN: OK. Stop now. You're going to make me cry.

VILES: Peter Viles, CNN, Killeen, Texas. (END VIDEOTAPE)

(COMMERCIAL BREAK)

PHILLIPS: More information now on that breaking news story that we were telling you about just a few minutes ago, that powerful blast that shook the western part of Baghdad in the Mansour district. Iraqi police bringing us information.

They are now telling us that they are reporting 12 people believed to be dead, 15 wounded in a fuel truck explosion. Receiving different bits and pieces of information.

Apparently, according to the police, this truck was loaded with explosives. It also might have been filled with some type of gas or oil.

Iraqi police now telling us in this explosion that took place in the Mansour district, home to several senior politicians, embassies, foreign contractors working on U.S.-funded projects in Iraq, they are now telling us 12 dead, 15 wounded. No identification on these individuals. We'll continue to follow that story.

Also, new information now out of Fort Lewis, Washington. An update on those soldiers that were killed in Mosul. You remember the suicide bomber that infiltrated Camp Merez.

Our Miguel Marquez now live from Fort Lewis, Washington, with more on those soldiers -- Miguel.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Kyra, the Department of Defense today confirming that six of its Fort Lewis soldiers in the Stryker Brigade were killed in that blast in Mosul a couple of days ago. And this one has certainly affected people from across the country.

They released a list. Captain William Jacobsen Jr., he's a 31- year-old captain from Charlotte, North Carolina. Staff Sergeant Julian Melo, he's 47 years old from Brooklyn, New York. Sergeant Darren VanKomen, 33, from Bluefield, West Virginia.

Staff Sergeant -- and this guy was promoted to staff sergeant posthumously -- Robert Johnson. He's 23 years old from Castro Valley, California. Specialist Jonathan Castro, 21 years old, from Corona, California, and Private First Class Lionel Ayro, 22 years old, from Jeanerette, Louisiana.

The Mello family, Julian Melo's family, the 47-year-old from Brooklyn, has released a statement saying, "Staff Sergeant Melo was a soldier first and all that entails. He was a great father, loving brother, outstanding friend to many and a devoted husband."

"The love for his country was such that he was willing to make the final sacrifice. He knew how to love and play and lived his life to the fullest. He loved no one more than his wife and son." "His wife Norma felt she could never live up to his expectations because whenever she did anything for him, he would turn around and do something exceptional. He was well respected and loved by his fellow soldiers. He was born to be a soldier but never took anything too seriously. His love for his family, his country and his fellow soldiers was evident in everything he did."

And I'm sure there are a lot of soldiers and their families out there today who hear those words and hear them echo through their own lives. A blast that tore through Mosul has affected this fort, but affected lives and families across this entire country -- Kyra.

PHILLIPS: Miguel Marquez remembering those six, their families and all the other soldiers and Iraqis killed by that suicide bomber just a day before Christmas. Thank you, Miguel.

We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

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