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Iraqi's Struggle with Federalism, Inclusion of Sunnis; Last of Gaza Settlements Evacuated Today; President Bush Addresses VFW Convention; Victims of Bomber Eric Rudolph Find Some Closure in Sentencing Hearing

Aired August 22, 2005 - 13:00   ET

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


KYRA PHILLIPS, CNN ANCHOR, LIVE FROM: President Bush live this hour looking for your support for the war in Iraq. Is there anything he can say that will lift the sagging poll numbers? August 22nd could be a great day in Iraq's history, out -- or just another disappointing dispute. We'll keep an eye on the draft constitutions coming and going. See it all live as it happens.
TONY HARRIS, CNN CORRESPONDENT: Confessed serial bomber Eric Robert Rudolph is on his way to prison for the rest of his life, after his victims have their say. I'm Tony Harris live from the federal court building in downtown Atlanta.

PHILLIPS: From the CNN Center in Atlanta, I'm Kyra Phillips. CNN's LIVE FROM starts right now.

World War II, September 11, the fight for Iraq; in just a few minutes, President Bush is expected to invoke the first two to bolster the support for the third. A fight increasingly fraught with discontent on the home front.

Mr. Bush is speaking to the Veterans of Foreign Affairs (sic) in Salt Lake City at the bottom of the hour. You'll see it live here on CNN. You can bet he'll mention the post-war Iraqi constitution, a document that for the second Monday in a row, is going down to the wire. Week-long extension of the original deadline runs out three hours from now.

The world still wonders will the Sunnis still sign on? CNN's Aneesh Raman joins me now live from Baghdad with the very latest.

What can you tell us, Aneesh?

ANEESH RAMAN, CNN INT'L CORRESPONDENT: Kyra, good afternoon. We are one hour away from when Iraq's national assembly is set to convene. That could, of course, get delayed, but all expectations are that a draft constitution will be put forth today. This political process will move forward.

The question is, at what cost? The document, we understand, ask is a result of an agreement between the Shia and Kurd coalition. They met earlier today along with the U.S. ambassador to Iraq, Zamed Kalizad (ph), and essentially hashed out a document that those two sides agree on. They have a majority of seats in the national assembly so that was a fallback position. They then went about, in the ensuing hours as they continue to do to this late hour, to bring the Sunnis on board. You'll recall the Sunnis do not have a large number of seats in the national assembly. They boycotted the January elections, but they are an essential ingredient to the legitimacy of this document and to curbing the insurgency. The insurgents are widely Sunnis, made up of Sunnis, so bringing them into the political fray is thought to be a key ingredient.

So the three sides are still talking right now and will continue to do so until the late hour, until as late as they can go. We are getting a sense the document that will come forward will not enjoy the support of the Sunnis who were involved in the negotiations and that will immediately bring into question whether this document can pass muster with the Iraqi people, who have to vote on it by mid October.

The Sunnis have well within their authority, the two-thirds vote, three provinces to reject this constitution. They are coming out very vocally, Kyra, already saying this is illegitimate document. The Shia and Kurd coalition, though, are saying if this goes through today they will embark on a concerted effort to engage the Sunni population and Iraqis at whole, that federalism, the issue that remains, is good for Iraq -- Kyra.

PHILLIPS: Aneesh, worst-case scenario, if a consensus -- if we don't see all three groups come together and agree on something, on this document, what is the worst-case scenario?

RAMAN: Well, in terms of technically what it means, it's really nothing. The Shia and Kurds, again, have the votes. The issue of federalism was exclusively the stumbling block. The Kurds want to maintain their autonomous region in the north. The Shia are essentially split. Some of them along the autonomous region in the south, others what a unified Iraq. But the Sunnis have been very vehement saying that federalism should only be discussed next year when a new government comes into office.

So, worst-case scenario if a document goes forward today, the Sunnis come out, as they have already begun, and vocalize very vehement distrust in this document, saying they were not brought in for compromise. And then it fails in the referendum by mid October, which in turn starts this entire process all over again --Kyra.

PHILLIPS: If, indeed, that happens -- if, indeed, this has to start all over again, what happens in the meantime with regard to who is running Iraq and making the decisions and security in the country? Obviously, that means U.S. troops have no hopes of coming home?

RAMAN: Well, it will be essentially what happened when the interim government was in office. Iyad Allawi (ph) was prime minister. But you had already elected the transitional national assembly. The interim government stayed on as a caretaker government. By their own decision they could not activate any other negotiations with other countries. They could not make new decisions about security, as you mentioned, what the implications would be. But the key issue now will be whether the Shiite and Kurds can convince the Iraqi population that it federalism is a good thing. If they are able to do that, it keeps the process on track towards general elections in mid December.

But if they do, deepen the divide between the Sunnis, who have already felt isolated from this government, and the other two groups, that could have very significant repercussions on the ground, Kyra.

PHILLIPS: Aneesh Raman, live from Baghdad, thank you so much.

Well, in the foreground -- or maybe the foreground, more attacks, more deaths. Baghdad police say two civilians were killed today in a suicide car bombing apparently targeting a U.S. military convoy. Others reports suggest the bomb was set off remotely. A HUMVEE and several cars were incinerated but no GIs were hurt.

His swords are long gone, but Saddam Hussein's pen is generating some mighty headlines with a vow to sacrifice all for his homeland. Over the weekend a heavily censored jailhouse letter to an unidentified friend found its way to Ba'ath Party donors conference in Amman, Jordan, then it (INAUDIBLE) Jordanian newspapers.

Hussan writes: "In our glorious nation, my soul and what I have been born on is to be sacrificed to it. It is not too much for a man to answer the call of his nation with all that he possess and with this soul, yet it is what the nation deserves."

As we mentioned, President Bush is hoping to rally his nation behind the fight against Iraqi insurgents, with a speech the VFW in Utah. It's a long way from Mr. Bush's vacation retreat and the Camp Casey protesters in Texas. But their persistence, combined with sagging job approval numbers make the trip to Salt Lake much more of a sink or swim proposition. We get a preview now from CNN's Dana Bash.

Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Kyra. Well, this speech here in Utah and one he'll give on Wednesday in Idaho have been on the schedule for quite sometime. But the president has been out of the spotlight completely for eight days. He's been at his Texas ranch.

And as you just mentioned, the anti-war protesters outside the ranch have certainly been grabbing the spotlight successfully. So Bush aides are quite happy that this is on his schedule. As one senior official said, it's an important opportunity, they know, to continue to make the case that he believes that Iraq is still crucial and staying the course, there is crucial.

Now here, in Utah, Mr. Bush will be speaking to veterans and, according to a senior aide, we expect him to try to, as this aide put it, broaden Iraq to look at it through the lens of another struggle, and that is World War II, to look back at that particular war, to talk about how that was perhaps a little bit longer than people had expected. And that is something the president is likely to touch on. Interesting that that could be a theme later today and that comes as one prominent Republican and veteran of the Vietnam war over the past several days has said that Iraq is looking more and more like the war that he fought in. That is certainly not the kind of thing that this White House wants to hear.

They're going to also talk, Kyra, about how they believe and speaking to veterans that this mission should also be framed in regard to the troops, supporting the troops, expect to hear a lot about that. Also as we lead up to the anniversary of 9/11, expect the president, as he has done many times in the past, to try to frame Iraq, once again, as part of the broader war on terrorism. Talk about the ideology of the terrorists in Iraq and say that those terrorists share the same ideology of those who attacked the U.S. on 9/11, almost four years ago -- Kyra.

PHILLIPS: Dana Bash, we will follow that speech, in addition to the protests that are about to take place there also. Dana Bash, thank you.

The president's speech is scheduled for 1:35 p.m. Eastern, about 25 minutes from now. And LIVE FROM will bring it to you live.

U.S. troops in Afghanistan report more than two dozen side-by- side engagements with Afghan soldiers, resulting in dozens of dead insurgents. Operation Whalers, as it's called, took place in the Konar Province, near the Pakistani boarder, in advance of local and parliamentary elections next month. A statement puts the number of insurgent dead at more than 40, quote, "over the last few weeks."

Well, it's a new day in Gaza; 38 years after Israeli forces seized and occupied that narrow slice of Palestinian Territory, the settlers are gone. The last of Gaza's 21 Jewish settlements to empty out was Netzarim. And CNN's Matthew Chance is in the nearby Israeli town of Kussufim, with the latest -- Matthew.

MATTHEW CHANCE, CNN INT'L CORRESPONDENT: Thanks a bunch, Kyra. Well all the 21 of the Jewish settlements across the Gaza Strip have now been evacuated by the Israeli defense forces, just five days after they began their operation to disengage from that occupied Palestinian territory.

There have been scenes over the past few days of great anger, a great sense of bitterness from many people in this country, not the least of course the actual Jewish settlers who were evicted from their homes. Today at Netzarim, perhaps the most controversial and isolated settlements in the Gaza Strip, the events of today, the evictions, the evacuations, went off without any real violence. People were emotional very emotional at the sight, at the time, at the scene. Soldiers and settlers embracing, and crying together before carrying out what they had to do.

Over the course of the past five days, 8,500 people evacuated from the Gaza Strip. All of them Jewish settlers and the era of Jewish settlements in that part of the world now very much seeming to come to a close, Kyra. PHILLIPS: Matthew, we saw all of this take place just a few days ago, you couldn't help but see in the back and forth, the chemicals being tossed on the Israeli police and army, and seeing these innocent individuals being taken from their homes. You couldn't disregard the human side of all of this. Has that seemed to completely settle down right now? And where are these individuals living? What are they saying to you now a few days later?

CHANCE: Well, of course, the Jewish settlers who have been living in these settlements for many of them for several decades, and people who are ideologically motivated to live in these settlements, because they believe God gave the Jews that land, this has been a great upheaval for them.

Of course, there are Israelis themselves who believe that the very presence of these settlements, particularly in Gaza, some of them isolated like Netzarim surrounded by 1.3 million Palestinians with them themselves an obstacle to peace. This is an issue that is pretty much divided the Israeli society. It's not something that has driven a wedge between two sides of the society. When people saw the scenes on television, the anger, the frustration being expressed by the Jewish settlers as some of them were torn from the rooftops by the Israeli defense forces.

People were very concerned about what the effect of those kind of images were. I think what we saw today in Netzarim was very much an act pouring of sort public sympathy for those people who were -- remember were encouraged to live in these Jewish outposts, these Jewish settlements by previous Israeli governments.

Now, from their point of view, they've been betrayed by this Israeli government because basically the land on which they were living with the approval of the Israeli government -- even though that approval was illegal under international law, of course -- has now been withdrawn and they have been found to be homeless.

Some of them have taken up temporary accommodation inside the state of Israel. Others decided to relocate in other settlements, not in Gaza, but the West Bank. So, there is soon to be expected to be more controversy to follow all of this.

PHILLIPS: Matthew Chance, thank you.

ANNOUNCER: Next on LIVE FROM, a young football play puts up some confusing numbers, 6'3", 300 pounds, 1981 to 2005. He seemed fine on game day. What killed Thomas Herrion (ph)?

Later, sacrificial Saddam? His jailhouse letters stir the Palestinian pot with talk of love, martyrdom and his soul. A closer look coming up.

Also ahead -- 60 and loving it.

ERIC CLAPTON, GUITARIST: I'm quite happy. Actually, I feel more content now than I've ever done really.

ANNOUNCER: A new CD, a new family, a new attitude.

CLAPTON: I came from place where it wasn't OK to have vulnerable feelings.

ANNOUNCER: Getting sensitive with guitar legend Eric Clapton later today from LIVE FROM.

CLAPTON (singing): Want a revolution.

(COMMERCIAL BREAK)

PHILLIPS: LIVE inside the control room (ph) now. And emotional confrontation taking place today in a courtroom here in Atlanta. A domestic terrorist faced some of his victims and their families before hearing his sentence, long since decided. Let's join CNN's Tony Harris at the federal courthouse. Tony?

TONY HARRIS, CNN CORRESPONDENT: Good afternoon, Kyra. We can tell you the sentencing hearing for confessed serial bomber Eric Robert Rudolph wrapped up more than an hour ago. He did take a moment to speak to the court and some of his victims. Rudolph saying that responsibility for what happened at the park-- and when he talks about the park, he's referring to Centennial Olympic Park -- what happened there and the responsibility for what happened that night is all mine. He accepted full responsibility for the consequences of his actions.

He also said he would like to take that night back and to those victims, I apologize. Now, he didn't apologize for two other Atlanta area bombing attacks. One of the victims of one of those other attacks joins me now, Randy Page, a local photographer, and a good friend of mine.

And Randy, you were actually responding to one of those other bombings at the women's clinic in Sandy Springs. You are responsible, my friend, for one of the most memorable shots from that day. Why don't you describe that for us as we take a look at it?

RANDY PAGE, BOMBING VICTIM: Yes, Tony, when I arrived on the scene, I was behind this dumpster, and about two or three minutes later photographer Leon Joel (ph) tapped me on the shoulder and said, Randy --

HARRIS: From CNN?

PAGE: From CNN.

He said, Randy, I think this is in the building. So, I ran over to get the shot. Got a cut-away of all the news photographers, swung to my left. Boom! The bomb went off.

HARRIS: Yes.

PAGE: The second bomb.

HARRIS: When I talked to you last night you said you were nervous in advance of giving your statement today, your victims impact statement today. What was it like inside?

PAGE: The first 30 seconds trying to read my statement was very, very complicated. I composed myself. I read it. I looked at Eric Robert Rudolph. One thing I can tell you is extremely nervous. The smirk is not there anymore. This guy is not afraid. He realized I'm going to jail the rest of my life. You can see it in his face.

HARRIS: Randy, a lot of folks said that this moment represents closure for them. What about you?

PAGE: It does. This is my first time in eight years that I've seen him face-to-face. You can close a chapter. My wife, my two children, we can move on with our lives. I feel good that I had an opportunity to see him face-to-face today.

HARRIS: Randy, thank you for taking the time to talk to us.

PAGE: Sure.

HARRIS: Kyra, we can tell you that about 12:16 this afternoon, Eric Robert Rudolph was led out of the court by federal marshals. He is on his way now to a super max facility, a federal prison, in Florence, Colorado -- Kyra.

PHILLIPS: All right. Tony, thank you so much. And I'm getting word now that the president, believe it or not, he's a little early today! He just stepped up to the podium live in Salt Lake City. As you know, he's addressing 106th convention of the Veterans of Foreign Wars. Protests also going on outside that convention. Let's take a listen to the president's speech.

(BEGIN LIVE FEED)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Behave yourself.

(LAUGHTER)

I'm honored to serve as the commander in chief of the United States armed forces. The men and women who wear the uniform today are protecting our nation and our way of life, and they are upholding a tradition of honor and bravery and integrity set by America's veterans.

All of you defended this country with unselfish courage. You've earned the respect of our citizens. And so, on behalf of a grateful nation, thank you for your service for the cause of freedom and peace.

(APPLAUSE)

I appreciate John Furgess. I appreciated working with him for the past year. He's a good, honorable man, and he's represented the VFW with distinction and class.

It takes judgment to be the president of an organization,and so when I first saw John this morning, I realized he was a man of good judgment. He said, "You've got to understand, Mr. President, most of the people are really excited to see Laura."

(APPLAUSE)

I'm proud she's traveling with me. I'm proud to call her wife. And a lot of folks in this United States of America are proud to call her first lady.

(APPLAUSE)

BUSH: I'm pleased that the secretary of veterans affairs is with us today. Ranger vet, a man who's doing a fine job on behalf (inaudible) of the United States (inaudible).

(APPLAUSE)

When I landed (inaudible) at the airport, I was greeted at the base of the stairs by the governor of this great state, Governor Jon Huntsman.

And I appreciate you being here, Governor.

And I want to thank your wife Mary Kaye for joining you as well.

(APPLAUSE)

You know, the Lieutenant Governor Gary Herbert with us and Jeanette.

Appreciate you being here, Lieutenant Governor.

I got on Air Force One down there in Waco and they told me that we had a special guest on our plane. I said, "Well, who is it?" They said, "Well, it's Orrin Hatch." I said, "Fantastic."

(LAUGHTER)

I'm glad to give the fellow a ride.

(LAUGHTER)

And the reason why I'm glad to give him a ride, he's a strong ally. And I appreciate a strong ally in Orrin Hatch. He does a great job for Utah, and he does a great job for the United States of America.

(APPLAUSE)

I appreciate Congressman Chris Cannon joining us today.

Thank you for being here, Congressman.

And Congressman Jim Mathis. And I'm proud you both are here. Thanks for taking time to be here today. (APPLAUSE)

They must have changed the immigration laws here in Utah because they allowed the Idaho governor to come across the border. I'm glad to be here with my friend, Dirk Kempthorne.

Thank you for coming, Dirk.

I want to thank Senior Vice Commander Jim Miller for his hospitality. I'm looking forward to working with him.

I want to thank JoAnne Ott, the outgoing National VFW Ladies Auxiliary president.

(APPLAUSE)

And I want to thank Sandy Germany, who will be the incoming president.

(APPLAUSE)

Most of all, thank you all.

As Veterans of Foreign Wars, you stepped forward when America needed you. You took an oath to defend the nation, and you kept that oath overseas and under fire.

BUSH: You triumphed over brutal enemies, liberated continents and answered the prayers of millions across the Earth. All of us who have grown up in freedom must never forget your service and your sacrifice.

We also remember the troops who left America's shores, but did not live to make the journey home. We think of the families who lost a loved one and who carry a burden of grief that remains for a lifetime.

We remember the men and women in uniform whose fate is still undetermined, our prisoners of war and those missing in action. America must never forget them. We will not stop searching until we have accounted for every soldier, sailor, airman and Marine missing in the line of duty.

(APPLAUSE)

VFW's mission is to honor the dead by helping the living. And VFW members are making good on that promise every day. Together with your superb ladies' auxiliary...

(APPLAUSE)

... VFW members have adopted military units, mentored youth groups, assisted in blood drives, and provided countless services to fellow veterans and their families.

When you hear the name VFW, you know a certain type of work is being done -- honorable, decent and faithful to the nation's highest ideals.

In war and in peace, American veterans set an example of citizenship. We honor your devotion to duty and to our country. All of America's veterans have placed the nation's security before their own lives. Your sacrifice creates a debt that America can never really fully repay.

BUSH: Yet, there are certain things that government can do. My administration remains firmly committed to serving America's veterans.

Since I took office, my administration, working with the United States Congress, has increased spending for veterans by $24 billion, an increase of 53 percent.

(APPLAUSE)

In my first four years as president, we increased spending for veterans more than twice as much as the previous administration did in eight years.

(APPLAUSE)

Health care is a top priority for our veterans, and it's the top priority for my administration. The past four years, we've increased the V.A.'s medical care budget by 51 percent.

And we're using those resources to make real improvements for our veterans. Over the past four years, we've increased total outpatient visits from 44 million to 55 million. We've increased the number of prescriptions filled from 98 million to 116 million.

Since January 2002, we've reduced the backlog of disability claims by 20 percent. Claims are now being processed 68 days faster. By the end of this year, we plan to cut another 15 days on the average turnaround time.

(APPLAUSE)

We've placed a special focus on treating men and women returning from combat and veterans with service disabilities and lower incomes and special needs.

In the last few years, we've committed more than $1.5 billion to modernizing and expanding V.A. facilities so more veterans can get care closer to their homes.

My administration is helping the veterans who fought and sacrificed for America get the quality care they deserve.

We're also getting results for veterans beyond the health care system.

BUSH: For more than a century, federal law prohibited disabled veterans from receiving both their military retired pay and their V.A. disability compensation. Combat-injured and severely disabled veterans deserve better, and I was honored to be the first president in more than 100 years to sign concurrent receipt legislation.

(APPLAUSE) We've also expanded grants to help homeless veterans in all 50 states and the District of Columbia. No veteran who has served in the blazing heat or bitter cold of foreign lands should have to live without shelter in the very country whose freedom they fought for.

(APPLAUSE)

You defended our flag in uniform. You continue to defend the flag today. I share the VFW's strong support for a constitutional amendment to protect the American flag.

(APPLAUSE)

In June, the House of Representatives voted to ban flag desecration. And I urge the United States Senate to pass this important amendment this year.

(APPLAUSE)

At this hour, a new generation of Americans is defending our flag and our freedom in the first war of the 21st century. The war came to our shores on the morning of September the 11th, 2001.

Since then, the terrorists have continued to strike: in Bali, in Riyadh, in Istanbul and Madrid and Baghdad and London and Sharm el- Sheikh and elsewhere.

BUSH: The enemy, the terrorists are ruthless and brutal. They're fighting on behalf of a hateful ideology that despises everything America stands for.

Our enemies have no regard for human life. They're trying to hijack a great religion to justify a dark vision that rejects freedom and tolerance and dissent.

They have a strategy. And part of that strategy is they're trying to shake our will.

They kill the innocent. They kill women and children knowing that the images of their brutality will horrify civilized peoples.

Their goal is to drive nations into retreat so they can topple governments across the Middle East, establish Taliban-like regimes and turn that region into a launching pad for more attacks against our people.

In all their objectives, our enemies are trying to intimidate America and the free world. And in all their objectives, they will fail.

(APPLAUSE)

Like the great struggles of the 20th century, the war on terror demands every element of our national power. Yet this is a different kind of war. Our enemies are not organized in battalions or commanded by governments. BUSH: They hide in shadowy networks and retreat after they strike.

After September the 11th, 2001, I made a pledge: America will not wait to be attacked again. We will go on the offense, and we will defend our freedom.

(APPLAUSE)

We have a comprehensive strategy to win this war on terror. It includes three parts: protecting this homeland, taking the fight to the enemy and advancing freedom.

The first part of our strategy is to protect America. We're reforming our intelligence services to stay ahead of our enemies and to root out terror cells before they strike.

We're using our diplomatic and financial tools to cut off the terrorist financing and to drain them of their support.

We more than tripled funding for homeland security since September the 11th, 2001. We provided more than $14 billion to train and equip state and local first responders.

Many of our police officers and firefighters and first responders are veterans and America is grateful for their dedication to keeping this country safe.

(APPLAUSE)

One of the most important tools we have to protect America is called the USA Patriot Act. This good law permits our intelligence and law enforcement communities to share information. It gives our law enforcement officers many of the same tools to fight terror that they already use to fight drugs and street crime.

The Patriot Act is fully consistent with the United States Constitution. And as a result of that act, we're getting results. Our law enforcement and intelligence officers have used the Patriot Act to help break up terror cells and support networks in California and New York and Ohio and Illinois and Virginia and Florida and other states.

Key provisions of the Patriot Act are scheduled to expire at the end of this year. Yet the terrorist threat to our country will not expire at the end of this year.

BUSH: When the House and Senate return from their recess, they need to send me a bill to renew the Patriot Act.

(APPLAUSE)

All these steps to protect the homeland have made us safer but we're not yet safe. Terrorists in foreign lands still hope to attack our country. They still hope to kill our citizens.

The lesson of September 11th, 2001, is that we must confront threats before they fully materialize.

(APPLAUSE)

Vast oceans and friendly neighbors are not enough to protect us.

A policy of retreat and isolation will not bring us safety. The only way to defend our citizens where we live is go after the terrorists where they live.

(APPLAUSE)

So the second part of our strategy is to take the fight to the terrorists abroad before they can attack us here at home. This is the most difficult and dangerous mission in the war on terror.

And like generations before them, our soldiers and sailors and airmen and Marines have stepped forward to accept the mission. They damaged the Al Qaida network across the world, and we're going to keep the terrorists on the run.

From Afghanistan to Iraq to the Horn of Africa, our men and women in uniform are bringing our enemies to justice and bringing justice to our enemies.

Our goal is clear: to secure a more peaceful world for our children and grandchildren.

We will accept nothing less than total victory over the terrorists and their hateful ideology.

(APPLAUSE)

BUSH: Iraq is a central front in the war on terror. It is a vital part of our mission. Terrorists like bin Laden and his ally, Zarqawi, are trying to turn Iraq into what Afghanistan was under the Taliban: a place where women are beaten, religious and ethnic minorities are executed, and terrorists have sanctuary to plot attacks against free people.

Terrorists are trying to block the rise of democracy in Iraq, because they know a free Iraq will deal a decisive blow to their strategy to achieve absolute power.

The Iraqi people lived for three decades under an absolute dictatorship and they will not allow a new set of would-be tyrants to take control of their future.

(APPLAUSE)

The people of Iraq have made a clear choice for all to see. In spite of threats and assassinations, more than 8 million citizens defied the car bombers and killers and voted in free elections.

(APPLAUSE)

In spite of violence, the Iraqi people are building a nation that secures freedom for its citizens and contributes to peace and stability in that region.

Now Iraq's leaders are once again defying the terrorists and pessimists by completing work on a democratic constitution. The establishment of a democratic constitution will be a landmark event in the history of Iraq and the history of the Middle East.

All of Iraq's main ethic and religious groups are working together on this vital project. All made the courageous choice to join the political process. And together they will produce a constitution that reflects the values and traditions of the Iraqi people.

Producing a constitution is a difficult process that involves debate and compromise. We know this from our own history. The Constitutional Convention was home to political rivalries and regional disagreements.

BUSH: The Constitution our founders produced has been amended many times over.

So Americans understand the challenge facing the framers of Iraq's new constitution. We admire their thoughtful deliberations. We salute their determination to lay the foundation for lasting democracies amid the ruins of a brutal dictatorship.

As Iraqis continue to take control of their own future, we'll help them take responsibility for their own security. The enemies of free Iraq are determined; they're adapting their tactics so they can take more innocent life.

American and Iraqi forces are adapting our tactics, too. We're on the hunt. Side by side with Iraqi troops, we're working to defeat the terrorists together. As we hunt down our common enemies, we will continue to train more Iraqi security forces so they can take on more responsibilities in fighting the terrorists. After all, it's their own country.

Our military strategy is straightforward. As Iraqis stand up, Americans will stand down. And when Iraqi forces can defend their freedom by taking on more and more of the fight to the enemy, our troops will come home with the honor they have earned.

(APPLAUSE)

In the long run, victory in the war on terror requires changing the conditions that give rise to violence and extremism.

So the third part of our strategy in the war on terror is to spread the hope of freedom across the broader Middle East. Free societies are peaceful societies. By standing with those who stand for their liberty, we will lay the foundation of peace for our children and our grandchildren.

As we work to spread freedom in the Middle East, we have cause for optimism. The rise of liberty in Iraq is part of a wider movement in the region. The tide of freedom ebbs and flows, but it is moving in a clear direction, and freedom's tide is rising in the broader Middle East.

BUSH: In Afghanistan, men and women have formed a free government after suffering one of the most brutal tyrannies on Earth. America is proud to call Afghanistan an ally in the war on terror.

In Lebanon, people took to the streets to demand their sovereignty. They have now gone to the polls and voted in free elections.

As freedom takes root in these countries, it is inspiring democratic reformers in places like Egypt and Saudi Arabia. Across the region, a new generation desires to be free. And they will have it, and the world will be more peaceful because of it.

(APPLAUSE)

In the heart of the Middle East, a hopeful story is unfolding. After decades of shattered promises and stolen lives, peace is within reach in the holy land. The Palestinian people have expressed their desire for sovereignty and peace, free and fair elections. President Abbas has rejected violence and taken steps toward democratic reform.

This past week, Prime Minister Sharon and the Israeli people took a courageous and painful step by beginning to remove settlements in Gaza and parts of the northern West Bank.

The Israeli disengagement is a historic step that reflects the bold leadership of Prime Minister Sharon. Both Israelis and Palestinians have elected governments committed to peace and progress.

And the way forward is clear. We're working for a return to the road map. We're helping the Palestinians to prepare for self- government and to defeat terrorists who attack Israel and terrorists who oppose the establishment of a peaceful Palestinian state. We're providing $50 million in direct assistance to the Palestinians for new housing and infrastructure projects in Gaza.

BUSH: We remain fully committed to defending the security and well-being of our friend and ally, Israel. And we demand an end to terrorism and violence in every form because we know that progress toward peace depends on an end to terror.

We'll continue working for the day when the map of the Middle East shows two democratic states, Israel and Palestine, living side by side in peace and security.

(APPLAUSE)

As more nations replace tyranny with liberty and replace hatred with hope, America will be more secure. Our nation has accepted a mission, and we're moving forward with resolve.

Spreading freedom is the work of generations. And no one knows that better than you.

Freedom has contended with hateful ideologies before. We defeated fascism. We defeated Communism. And we will defeat the hateful ideology of the terrorists who attacked America.

(APPLAUSE)

Each of these struggles for freedom required great sacrifice. From the beaches of Normandy to the snows of Korea, courageous Americans gave their lives so others could live in freedom.

Since the morning of September the 11th, we have known that the war on terror would require great sacrifice as well.

We've lost 1,864 members of our armed forces in Operation Iraqi Freedom and 223 in Operation Enduring Freedom. Each of these men and women left grieving families and loved ones back home. Each of these heroes left a legacy that will allow generations of their fellow Americans to enjoy the blessings of liberty.

BUSH: And each of these Americans has brought the hope of freedom to millions who have not known it.

We owe them something. We will finish the task that they gave their lives for. We'll honor their sacrifice by staying on the offensive against the terrorists and building strong allies in Afghanistan and Iraq that will help us win and fight -- fight and win -- the war on terror.

(APPLAUSE)

As Veterans of Foreign Wars, you know that the rise of liberty is critical to our national security. You understand the power of freedom because you've witnessed it with your own eyes.

In a single lifetime, many of you have seen liberty spread from Germany and Japan to Eastern Europe to Latin America to Southeast Asia and Africa and beyond.

You've seen that democracies do not fight each other and that liberation leads to peace.

With your courage and commitment to freedom, you've lifted lives of millions around the globe and you've made this country and our world more secure. The generation of men and women who defend our freedom today is taking its rightful place among the heroes of our nation's history.

Once again, America has found patriots who are selfless and tireless and unrelenting in the face of danger. Once again, the American people have been steadfast and determined not to lose our nerve. And, once again, we've had confidence in our cause because we know that freedom is the future of every nation and at the side of freedom is the side of victory.

I want to thank you for the example you have set for all who wear our nation's uniform. I want to thank you for your bravery and your decency.

May God bless this nation's veterans and may God continue to bless the United States of America.

(APPLAUSE)

PHILLIPS: President Bush there taking a short break from his vacation in Crawford, Texas, speaking about Iraq at the Veterans of Foreign Wars Convention in Salt Lake City.

We're going to talk more about this and the president's speech. In addition, talk to you about the anti-war rallies that are planned for outside of this convention, see what they have to say.

But the president pretty much addressing all the vets there, talking about the rise of liberty equaling, of course, national security and reminding everyone to take a look back at 9/11, that confronting those type of threats before they materialize are the most important thing, or is the most important thing for the United States. He said the only way to defend this homeland, our homeland is to go after terrorists where they live and that's going abroad and preventing them from coming here to the United States.

Once again, the president of the United States addressing the vets there in Salt Lake City, Utah.

We'll talk more about it in addition to the protests taking place when LIVE FROM returns right after a quick break.

(COMMERCIAL BREAK)

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange. Stocks got off to a strong start thanks to merger news, but the gains eroded as oil prices accelerated, again topping $66 a barrel. Right now, the Dow Industrials are barely on the plus side -- up one point. The NASDAQ is up two points. Shares of Dow component Merck losing more than 2 percent on top of a nearly 8 percent drop on Friday after a Texas jury hit the company with a $253 million damage award in the first trial over its drug Vioxx. Several thousand more Vioxx-related cases have yet to make its trial.

Day three of Northwest Airlines mechanics' strike. So far the walkout has failed to disrupt travel but today could be the true test since weekdays are busier travel days than weekends. The airline is trying to get $176 million in annual cost savings from its mechanics union and that could involve big job cuts. So far, the lack of sympathy strikes by other unions such as pilots or flight attendants has kept Northwest aloft, but some analysts are still worried about the airline's future. There's concern that those high fuel prices may bring about a bankruptcy filing even if Northwest wins the labor concessions it's seeking.

Coming up on the next hour of "Live From...": Can working long hours make you sick? A new study undercovers a link between overtime and illness.

"Live From..." continues right after this.

(COMMERCIAL BREAK)

KYRA PHILLIPS, CNN ANCHOR: In news that affects your health: Imagine stem cell research without the controversy. Harvard scientists say they've taken the first step in that direction. They were able to fuse adult skin cells with lab-grown human embryonic stem cells. Early research shows the resulting hybrid cell essentially became an embryonic stem cell itself. It's a breakthrough that could bypass the controversial step of destroying federalized human eggs, but it could be a decade before the process is usable in people. Stem cells could hold the cure for diseases like Alzheimer's and Parkinson's.

You can get an in-depth look at health stories making headlines every Saturday and Sunday morning at 8:30 with with Dr. Sanjay Gupta's HOUSE CALL.

This infamous Hollywood madam's business lured some of Hollywood's top executives and stars, and as part of CNN's anniversary series, THEN AND NOW, we look back at the life of Heidi Fleiss and what she's doing today.

QUESTION: Heidi, do you think--

ANNOUNCER: In the 1990s, Heidi Fleiss was one of Hollywood's most notorious characters. The then-20-something daughter of a wealthy pediatrician used her family's connections to attract and service rich and famous clients as the Hollywood Madam. Her arrest and trial became headline news. But she never did reveal the contents of her black book, and was sentenced to three years in prison for procuring prostitution and selling cocaine.

When Fliess was released from prison, she started capitalizing on her notoriety legally. Fleiss has a line of clothing called "Heidi Wear" and owns a West Hollywood boutique called "The Little Shop of Sex." She also invested in her looks, undergoing plastic surgery.

HEIDI FLEISS, FORMER "HOLLYWOOD MADAM": I had the party, did the party, threw the party, was the party. I'm partied out. I live every day to its fullest, and there's lessons that I've learned.

ANNOUNCER: Fleiss wrote a book about her experiences called "Pandering." She is also opening a legal brothel in Nevada.

On the personal side, she recently faced off in court against former boyfriend and actor Tom Sizemore, accusing him of abuse. The "Hollywood Madam" turns 40 this year and would like to be remembered for one thing:

FLEISS: ...that I took the oldest profession on earth and did it better than anyone on earth. That's it, and that's all. Alexander the Great conquered the world at 32. I did it at 22.

PHILLIPS: The NFL lineman who died suddenly this weekend weighed about 330 pounds. While it's still not known if Thomas Herrion's size had anything to do with his death, what is the fact is the growing girth of your typical professional football player. We're going to run down the numbers. It might surprise you.

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