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Four Bombing Suspects in Custody; Terrorists Using Internet to Communicate; NASA: No Major Damage to Shuttle; Frist Splits with President, Supports Stem Cell Research

Aired July 29, 2005 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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UNIDENTIFIED MALE: Go back.

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TONY HARRIS, HOST: Raids and arrests. Police nab terror suspects in London and in Rome.

MATTHEW CHANCE, CNN CORRESPONDENT: A day of dramatic developments here with police apparently having all four of the July 21 attempted attackers on the London Underground and the London bus in custody. We'll have all the latest from west London.

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SEN. BILL FRIST (R-TN), MAJORITY LEADER: We must get our stem cell policy right: scientifically and ethically.

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HARRIS: Stem cell split. A change of heart puts a senator at odds with the White House. What will it mean for future medical breakthroughs?

From the CNN center in Atlanta, I'm Tony Harris in for Kyra Phillips. CNN's LIVE FROM starts right now.

From Britain to Italy, we have breaking developments for you in the London terror investigation. The manhunt for the four suspected would be bombers of 7/21 appears to be over.

Police say three men are under arrest after a massive anti-terror operation in west London. British media report some of those in custody are the attackers and Italian officials say a man suspected of being the fourth bomber is under arrest in Rome.

We're awaiting a news conference from Scotland Yard any minute now.

It is an area made famous by a Hollywood film. Today, Notting Hill looked like the setting for a movie. Police swarming, helicopters buzzing and blue lights flashing. But the action was very real.

CNN's Matthew Chance is in Notting Hill and he joins us now with the latest -- Matthew.

CHANCE: Tony, thank you.

Very dramatic raids undertaken by the British police here in the hours of this morning. Two locations raided by the police. This one in the heart of Notting Hill, the Portobello Market area, a very upscale neighborhood at this of West London.

Police in large numbers, armed police. Bomb disposal experts, as well, coming here, raiding a property a short distance from here just behind me to the right of your screen. Police, you can see, still there, scouring the area. They have forensic teams trying to gather as much evidence as they can.

They took away at least one individual from this location.

Another raid taking place a short distance from here, about a mile away in the Ladbrook Grove area of West London. The same kind of situation there. Eyewitnesses reporting explosions, possibly stun grenades, possibly police blowing the hinges off doors as they broke into apartments and seized at least one individual there.

It's now understood, and none of this has yet been confirmed to us by the police, but British media are reporting that all three -- three of the four bombers, attempted bombers, from the July 21 attacks are in police custody here in Britain.

It's also been confirmed to us in the course of the past hour that the fourth bomber, according to Italian officials has been arrested in Rome. He's been named by Italian officials as Osman Hussein. He's said to be a British national of Somali origin.

And obviously, that coming just a short time after these raids in London. Whether it's because of intelligence gathered here or intelligence gathered for all of these operations, we're still waiting to hear from the British police -- Tony.

HARRIS: Matthew, give us some of the dynamics of those neighborhoods, those two neighborhoods where the raids took place. I understand that they are both ethnically mixed neighborhoods?

CHANCE: They're both very ethnically mixed, but at the same time, they're very different as well. One neighborhood, this one from which I'm speaking to you from, is very up market. It's a very expensive area of Notting Hill, a very fashionable area of Notting Hill. You get a lot of pop stars that live around here, a lot of actors, a lot of people with a lot of money, essentially. And so that's the kind of neighborhood this is.

A mile away, things very different. We're talking about a much more low rent neighborhood, sort of cancerous (ph) states, the Peabody Estates they're called. Sort of nongovernmental housing associations to give people some kind of housing in the inner city areas of London.

But regardless of who you speak to in either of these communities, people expressing the same kind of shock, the same kind of surprise, really, that people who were associated with these July the 21st attacks could be holed up in their neighborhoods in their homes.

HARRIS: OK, Matthew, of course, we'll be following developments throughout the hour and throughout the afternoon here on CNN. Matthew Chance at Notting Hill for us. Matthew, thank you.

The raids have shaken many Notting Hill residents. Some looked out of their windows only to see masked and armed police and hear explosions nearby.

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UNIDENTIFIED FEMALE: First of all, this morning about 11 a.m., I was in my flat, and I heard some kind of shots outside in the flat below. And I couldn't see any police or anything, and I got really freaked out so I went home and stayed inside.

And I heard shouting and stuff from the garden below me, and then about an hour or so later I looked out the window and there were armed police there with guns. And so I said, "OK, I'll go outside." And there were people banging on my door and stuff anyway.

And then I went outside and there were people with gas masks on, and then there were about seven or eight police officers just kind of like a car parked. And they had machine-type gun things and they told me I had to get out of the area and come outside the quadrant.

UNIDENTIFIED FEMALE: They were tall. I could see they were tall. And they seemed to have short hair, but I couldn't really tell what color they were.

UNIDENTIFIED MALE: And were they wearing their own clothes or were they in white jumpsuits?

UNIDENTIFIED FEMALE: They seemed to be wearing just normal everyday clothes. They seemed to be quite smart, but they weren't wearing anything different from anyone else.

UNIDENTIFIED FEMALE: This is a very quiet neighborhood. There's a lot of tourists. It's perceived as a very safe neighborhood, as well. So we're a bit shocked that this is going on right here.

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HARRIS: Connected and online, the world is dealing with a new kind of terrorist. British Prime Minister Tony Blair said it himself: the combination of modern technology and the willingness to kill without limit makes this an appreciably different threat.

CNN Pentagon correspondent Barbara Starr reports.

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BARBARA STARR, CNN CORRESPONDENT (voice-over): Web sites, chat rooms, and blogs. Terrorists now have unprecedented access to these sophisticated Internet tools and are using them to communicate about their plans, to gather new recruits, to get more money.

BRIG. GEN. JOHN CUSTER, CENTRAL COMMAND INTELLIGENCE CHIEF: The Internet today is the single most important item in the radicalization of young Muslims.

STARR: In the wake of recent attacks, Brigadier General John Custer, Central Command's intelligence chief, warns of what he calls the terrorist class of 2005.

CUSTER: This class, becoming tactically efficient in Iraq, in Egypt, in any -- in England, will be the long war enemy, the opponent that we will face over the next 30 years.

STARR: No one is saying the London bombers used the Internet to plan their attacks, but here at Central Command's highly classified operations center, the focus is on what the military believes is the virtual world terrorists have turned into their Islamic empire, one that cannot be defeated with fire power.

CUSTER: What they have been able to do is build a virtual kalafi (ph), an entity that exerts state-like powers in the Internet, in the ethereal world.

STARR: Cyberspace terrorists don't have to protect leaders, have no capital city. But Custer warns their deadly reach is global.

CUSTER: We know of over 4,000 jihadist terrorist sites connected to chat rooms that you can move to and discuss tactics. You can discuss resources. You can actually talk to people who claim that they have perpetrated attacks.

STARR: Custer says Osama bin Laden is now super empowered by the information revolution. He issues statements from hiding. He doesn't have to personally order attacks.

CUSTER: The franchises around the world can see what they need to do. You attack economic targets. You attack England in the middle of the summer, when the height of their tourist season.

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STARR: And Tony, experts tell us some of these terrorist extremist Web sites to fund their attacks, they even accept credit cards.

The point that the military is making is that there's a lot more to think about right now than just al Qaeda and Osama bin Laden when you consider the terrorist threat -- Tony.

HARRIS: That point seems clearer and clearer every day. Barbara Starr at the Pentagon. Barbara, thank you.

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HARRIS (voice-over): Next on LIVE FROM.

UNIDENTIFIED FEMALE: We were actually quite surprised to hear that we had some large pieces of debris fall off the external tank.

HARRIS: How damaged is Discovery? Old problems raise new doubts about space shuttles.

Later on LIVE FROM, serving in Iraq, stressing at home.

UNIDENTIFIED FEMALE: No, he wasn't in Iraq, but in his mind, he was there day in and day out.

HARRIS: Dealing with the sometimes deadly consequence for soldiers after they return from war.

Later on LIVE FROM, airlines hate it, parents aren't thrilled but Congress is passing it. How will extending Daylight Saving Time affect you?

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HARRIS: The shuttle scrutiny at NASA as engineers pore over thousands of images of Discovery. Although the agency now reports that a piece of foam may have struck Discovery's right wing, officials say they haven't seen anything yet that would pose a safety problem.

CNN's John Zarrella has more from mission control in Houston.

John, hello?

JOHN ZARRELLA, CNN CORRESPONDENT: Hey, Tony.

Well, today by all estimations was actually a better day for the space agency, for the mission management team on the ground, the astronauts up on board the International Space Station right now.

They used about three hours today to begin an inspection of the underbelly of the shuttle's tiles, those thermal tiles, so critical for reentry back into the earth's atmosphere.

And using the imaging system, lasers and cameras at the end of the shuttle's arm, they got some close-up views of those tiles. And by all indications, in fact, at a press briefing about an hour and a half ago, NASA officials were, to some degree, beaming that there was very little evidence of any damage found.

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JOHN SHANNON, FLIGHT OPS & INTEGRATION: The composites of the underside of the tile surface from the pitch maneuver we did, and took pictures from the ISS. You can you see there is not much there. It is -- it is extremely clean. The report we got back was that there were 25 small dings. No major dings. And you would compare that to about almost 150 that we had on average for other flights.

(END VIDEO CLIP) ZARRELLA: So certainly good news there, and earlier in the day, they began to take the Raffaello module out of the cargo baby. That pressurized module was filled with all kinds of supplies, thousands of pounds of supplies needed to resupply the International Space Station.

So now they're in position to begin offloading those supplies, and then taking some of the debris and the junk that's been stored up inside of the International Space Station back into Raffaello for a ride home on board the shuttle.

And, of course, all the talk is of the foam insulation falling off of, peeling away from the external tank. Nothing new to report on that. In fact, NASA saying that they really don't plan to say much about that unless they have something to say, and at this point, no new information there.

Now, tomorrow, a big day for them. The astronauts will begin one of three spacewalks tomorrow, and in that first spacewalk, the first part of what's about a five-hour space walk, they are going to start testing and demonstrating and working with potential procedures for repairing tiles in space, if they -- if it is so needed in the future.

And right now, of course, it doesn't look like they're going to need to do any of that on the vehicle. The vehicle looks clean, and NASA, as I said, Tony, having a much better day today -- Tony.

HARRIS: Repairing tiles in space. Couldn't sound more complicated than that. John Zarrella. John, thank you.

Now an unexpected change of heart on Capitol Hill over a hotly debated issue. Senate Majority Leader Bill Frist says he will back a House-passed bill to expand federal funding of embryonic stem cell research. There are a lot of details here. Dana Bash is at the White House.

But let's get started with congressional correspondent Ed Henry what this means for the bill's future -- Ed.

ED HENRY, CNN CORRESPONDENT: Good afternoon, Tony.

A dramatic reversal by the Senate Republican leader, who normally is one of the president's closest allies here on the Hill, now picking a major fight with the White House on a really big political issue. This has major scientific ramifications but also political fallout now and possibly in the 2008 presidential campaign.

The president has threatened to veto legislation that would increase federal funding for embryonic stem cell research. Conservative groups say that it is tantamount to murder to have this embryonic stem cell research, because in order to get the stem cell lines you need to destroy human embryos.

Now Senator Frist, though, today went to the Senate floor. He's a heart surgeon. He said he was speaking as a medical doctor who believes that, in fact, the true pro-life position is to support increased research that could lead to the cures of disease like Alzheimer's and Parkinson's.

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FRIST: How we answer these questions today and whether, in the end, we get them right, impacts the promise, not only of current research but of future research, as well. It will define us as a civilized and ethical society forever in the eyes of history.

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HENRY: But top conservatives are not buying that. In fact, House Majority Leader Tom DeLay has already held a press conference today saying he's deeply disappointed in Senator Frist's decision to support this legislation that is moving through the Senate right now. And House Majority Leader DeLay also said that he believes this could hurt Bill Frist's chances in the 2008 presidential race.

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REP. TOM DELAY (R-TX), MAJORITY LEADER: Senator Frist's announcement today that he now supports federal funding for embryonic stem cell research, which by its very nature, involves the destruction of innocent human life, is obviously disappointing. Senator Frist is a good man. He is simply advocating a bad policy.

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HENRY: But now on the other hand, politically speaking, a more moderate Republican group known as Stem PAC was just about to start running television ads in the critical presidential state of New Hampshire, blasting Bill Frist for in recent weeks refusing to schedule a vote on this stem cell legislation. So he may have made the political calculation that he could, in the end, reach out more to moderate swing voters.

Nancy Reagan has obviously already come out in favor of increased stem cell research, along with California Governor Arnold Schwarzenegger. But a lot of Republicans and Democrats up here on the Hill pointing out that Bill Frist would first have to win the primaries, which are dominated by conservatives, before he can think about moderate swing voters in a general election.

For the record, though, Senator Frist's office says basically politics was not involved here at all. He was just trying to do the right thing as a doctor, and he believes this is the right way to go -- Tony.

HARRIS: OK. CNN congressional correspondent Ed Henry. Ed, thank you.

Let's go to the White House for reaction there. Let's bring in White House correspondent Dana Bash.

And Dana, what is the White House reaction to the speech from the Senate majority leader?

DANA BASH, CNN CORRESPONDENT: Hi, Tony.

Well, first of all, the president didn't know anything about this until late yesterday, because Senator Frist didn't want to, quote, blindside him in the words of one aide.

He called the president last night, told him that he was going to give the speech, told him that he was going to basically split from him in terms of this policy in a phone call made to Senator Frist, called it a phone call that was very good without hostility or irritation.

The White House said the president told Senator Frist, quote, "You have to vote your conscience."

Well, Senator Frist was actually here this morning at the White House. You see him there in that picture at a bill signing. The president had an aide call the senator over to him to talk privately with him. The two men got together and then actually walked back over from the building next door. You see calling him over, walked over together.

Aides to both men insist, however, there is no rift. The relationship is still very much intact, they say. But they're also saying that the president is not changing his position, that his veto threat still stands.

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SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The decision that the president made was addressing taxpayer dollars. The president does not believe we should be using taxpayer dollars for or to support the further destruction of human life. That's where he set the line. Now, there's no prohibition on the private sector research goes on.

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BASH: Now, the White House is trying to put the best face on this. Over and over again, we heard Scott McClellan, the president's spokesman, say that there are -- there is a lot of common ground on this broader issue between President Bush and Senator Frist, saying that they both want to put an emphasis on doing this in an ethical and moral way.

But the bottom line here is that Senator Frist who helped Mr. Bush craft his policy four years ago, this policy of creating federal funding for the first time but in a limited way, that Senator Frist says that that slows science, but President Bush does not. So they definitely are diverging here on what exactly the science means, vis- a-vis their so-called pro-life stance.

HARRIS: CNN's White House correspondent Dana Bash. Dana, thank you.

More now on the science behind the embryonic stem cells. CNN medical correspondent Elizabeth Cohen joins us now to talk about why so many researchers are focused on it. Elizabeth, let's do a little 101 for everyone.

ELIZABETH COHEN, CNN CORRESPONDENT: That's right. This is all confusing stuff.

HARRIS: It is. Talk to us about stem cells, particularly embryos and their use and the stem cells we get from embryos.

COHEN: That's right. Let's start with what is a stem cell.

HARRIS: What -- beautiful. Beautiful.

COHEN: What is a stem cell, because that's confusing. And, in fact, many of us can relate to it, because many of us know people who have had friends...

HARRIS: Yes.

COHEN: ... who conceived through IVF, people who go to clinics, go to infertility clinics and conceive a baby that way. We all know people who have done it.

And when that happens, sperm meets egg. You see that happening right there. That's -- they're fertilizing an egg. Sperm meets egg in a Petri dish rather than inside a woman's body.

And when families do this, they sometimes will have leftover embryos, in other words, embryos that they have decided not to use to start a family. And so when they do have these embryos that they don't want anymore, they will often keep them frozen and in dry ice. You can see them right there. There are embryos in there, believe it or not.

And inside those embryos are stem cells. So scientists can take those embryos and take stem cells out of them and then try to specialize those stem cells. That's what's supposed to be so incredible about stem cells. They're blank cells, and if you treat them right, you can make them specialized.

For example, let's say someone has a spinal chord injury. You make the stem cell become nerve tissue to fix the problem that happened in the spinal cord.

But this is the hitch, Tony. To get stem cells out of an embryo, you have to destroy the embryo. The embryo has to be destroyed in that process.

HARRIS: Which brings us to the debate. For a lot of folks, that moment when sperm meets egg, that's life.

COHEN: Exactly. Exactly. Now people sort of fall into different camps here. For some people, when sperm meets egg inside a woman's body, that's when life starts.

But for other people, for people who are on the far right, sperm meeting egg even in a lab, that's life. So they say, well, there may be thousands of these embryos that are sitting in liquid nitrogen in fertility clinics, but for them, that's life. Those embryos are life. And they say don't destroy them even to make stem cells.

HARRIS: OK, got to leave it there. We have to leave it there, because we have new video of the London arrest straight ahead. That's coming up on LIVE FROM.

Also ahead, record setting rains triggering mud slides and killing hundreds of people. We're live from India ahead on LIVE FROM.

And some soldiers come home with obvious wounds of war, but others are not so obvious. Is the military doing enough to deal with post-traumatic stress? We'll talk about it.

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HARRIS: We are getting new details on the arrest of one of the suspected London bombers. That arrest going down in Rome. That person arrested is Osman Hussein.

Jennifer Eccleston is in Rome, and she has the latest on the investigation and this arrest in Rome -- Jennifer.

JENNIFER ECCLESTON, CNN CORRESPONDENT: That's right. Well, Osman Hussein, as you just said, he's believed to be the fourth bomber from the July 21 attempted bombings in the London Underground and also on that London bus.

Now, according to Italian police, he was arrested this afternoon at an apartment here in Rome near the city's main train center. The main train station, rather. That's Terminy (ph).

A senior intelligence source tells CNN that Scotland Yard and the Italian police traced Hussein's cell phone -- cell phone from London to Rome. Now it's not clear when he left London for Rome, but he's also thought to have stopped over in Brescia (ph), which is in northern Italy, before coming here to the capital city.

Now he was arrested at an apartment near the train station that is owned by a man who is believed to be of Somali descent. He is an immigrant, a legal immigrant here in Italy. And we're getting conflicting reports from the Italian police and that senior intelligence source, who says that that man is believed to be a relative of Hussein and that he owns one of these call centers near the main train center here in Rome.

The senior intelligence source also tells CNN that that man is believed also to be in custody with Hussein now. Italy special police unit made the arrest. Hussein and the other suspect is being held at the main police station here in Rome, and he is currently undergoing interrogation now.

Italy's chief anti-terror prosecutor, Franco Gionta (ph), is conducting those investigations. And they're believed to be holding the man because there is an extradition warrant for him to be sent back to the U.K. HARRIS: OK. Jennifer Eccleston with the latest information on the arrest on Osman Hussein, believed to be the fourth person suspected in the London attempted bombings of 7/21, July 21.

We are standing by for a press briefing, an update from Scotland Yard, at the top of the hour now. The time has been changed to 2 p.m. At the top of the hour, we are expecting to hear from the metropolitan police commissioner, Ian Blair, to give us an update on the fast and furious events today in London as the investigation continues of the attempted bombings on 7/21.

When that news briefing happens at 2:00 p.m., of course, CNN will bring it to you live.

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