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New Book Examines Centuries of Church Scandals; Two Duke Lacrosse Players Charged With Rape; President of China Visits U.S.

Aired April 18, 2006 - 15:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Let's get straight to Tony Harris. He is in the newsroom working a developing story out of South Florida.
Tony, what is going on?

TONY HARRIS, CNN CORRESPONDENT: Hey, Kyra.

Want to take you to Davie, Florida. That's in central Broward County now -- and live pictures from our friends at our CNN affiliate WFOR Of a brushfire that is burning very near the Florida Turnpike.

Now, this is a wider view of the area. As you can see there, smoke can be seen from quite a distance. But we have had a -- a closer look at the fire. And it is burning near power lines. Certainly, that's a source of additional concern for firefighters.

Here's a better view of it. The smoke can be seen from -- from quite a distance on some of the wider shots. And it looks like some lanes of that turnpike have actually been closed. A moment ago, we saw traffic being diverted from some of the lanes. As you can imagine, trying to drive through that smoke, quite hazardous -- very dry conditions in Central Florida lately, and prime conditions for brushfires.

Look at -- and look at this picture right now from our chopper shot from WFOR of this brushfire and the smoke being generated by it -- very dry, once again, in Central Florida, conditions ripe for this kind of activity, these kinds of brushfires.

We will keep an eye on that for you -- Kyra.

PHILLIPS: All right, great. Let us know. Thanks, Tony.

HARRIS: Sure thing.

PHILLIPS: Well, weeks of accusations, speculation, investigation, led to apprehensions in Durham, North Carolina -- two Duke University lacrosse players, handcuffed, fingerprinted, and photographed. Well, they are now out on bond.

CNN's Alina Cho joins me with this late-breaking details -- Alina.

ALINA CHO, CNN CORRESPONDENT: Well, Kyra, it all started at around 5:00 this morning, probably about the time you were waking up this morning. The two suspects were brought into the county jail, not far from here. They arrived in the same squad car. As you might imagine, they were processed, booked, as we like to call it, there at the jail.

They were fingerprinted, photographed. And, then, they appeared before a local magistrate, who set a bond of $400,000 apiece. Both of the suspects posted bond. And they are now free on bond, until their next court appearance.

Now, a little bit about the two suspects -- let's go first to Reade Seligmann. He's a 20-year-old sophomore at Duke University. Of course, he's one of the lacrosse players. He's from Essex Fells, New Jersey.

The other suspect, Collin Finnerty, 19, also a sophomore, and he's from Garden City, New York -- again, both free on bond until their next court appearance next month -- Kyra.

PHILLIPS: So, what happened at the hearing, specifically, this afternoon?

CHO: That's right.

There was a hearing this morning. Reade Seligmann, to be clear, one of the suspects, waived his appearance. And, so, he was not in court today. But Collin Finnerty, the other suspect, was in the building behind me this morning. It was a very short hearing, Kyra, less than five minutes long. He signed a waiver, saying that he did not need a court-appointed attorney.

And, then, the superior court judge, Ronald Stephens, announced that there would be another court hearing on May 15, a little less than a month from now. And that is when the DA will present his evidence to the defense.

PHILLIPS: And what have we learned about the defense's case so far?

CHO: Well, as you know, as -- and, as you might imagine, both sides are angling to get their story out. And we're learning a little bit about a possible timeline, Kyra. Basically, the headline is this. Two defense attorneys tell CNN that they do not believe the two suspects who have been charged in this case were at the party on the night of the alleged rape, on that night in question, March 13.

And they say they have proof of that. They say they have eyewitnesses, ATM receipts, perhaps even photos. And, of course, you can bet that all of that will come out in the weeks and months ahead.

PHILLIPS: All right, and final question: Any reaction so far from Duke University?

CHO: Yes, as a matter of fact, Kyra.

And you know that Duke University has been swift in its response on its Web site -- no exception today. The president, Richard Brodhead, came out with a fairly lengthy statement, compared to some of the others.

But the crux of it is this. He says, the university will stand by these two men, saying they are innocent until proven guilty. And he ended by saying that everyone involved has been through a lot of pain and suffering. Certainly, that has been the case on both sides of this story -- Kyra.

PHILLIPS: Alina Cho, thanks so much.

There's now a gag order in that stomach-turning case in Oklahoma. A judge approved the request from attorneys for Kevin Ray Underwood to block both sides from talking about the horrific killing of 10-year- old Jamie Rose Lynne (sic) Bolin.

Police say that Underwood bludgeoned and suffocated the child and planned to eat her body. Well, the girl's remains were found in a tub sealed with duct tape in a closet in Underwood's apartment. Yesterday, the judge entered a not-guilty plea for Underwood, whose court-appointed lawyers blame police and prosecutors for drawing nationwide attention to this case.

A life worth saving? Lawyers for Zacarias Moussaoui are still trying to persuade a Virginia jury not to vote execution for the admitted al Qaeda conspirator. And, today, they plan to ask relatives of 9/11 victims for help.

CNN's Kelli Arena reports, the defense depicts Moussaoui as the disturbed product of a troubled life.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): A clinical psychologist who studied Zacarias Moussaoui for four years told jurors, Moussaoui is a paranoid schizophrenic and suffers from delusions.

Xavier Amador says the causes of the disease are largely genetic. And according to a clinical social worker who testified, both of Moussaoui's sisters are diagnosed schizophrenics. They are being treated and take multiple antipsychotic drugs.

UNIDENTIFIED FEMALE (through translator): I also suffer from psychosis, with schizophrenic tendencies.

ARENA: In taped interviews played for the jury, his sisters also described their impoverished childhood with their violent, alcoholic father, Omar.

UNIDENTIFIED FEMALE (voice-over): He almost killed me. He tried to kill me.

ARENA: Omar Moussaoui is now hospitalized in France for mental illness.

Jurors heard how Moussaoui was placed in five orphanages by the time he was 6, how his father beat his mother and sisters, and how the family didn't have enough to eat. But Moussaoui's sisters and high school friends described the younger Moussaoui as fun-loving and friendly, the little sweetheart of the family, whose hero was Martin Luther King.

"I am a Jew; he is an Arab," Giles Cohen told jurors, "and we were best friends."

GILES COHEN, FORMER FRIEND OF ZACARIAS MOUSSAOUI: He was a very kindly man, all the time smiling and joking.

ARENA: Jurors also heard that, as Moussaoui embraced radical Islam in London, he withdrew from family and friends and even called one a sister a whore for dressing in Western-style clothing.

UNIDENTIFIED FEMALE (voice-over): It was bizarre, how he was. I no longer enjoyed having long discussions with him, like before. He was tiresome.

ARENA (on camera): Moussaoui's defense team will continue to call mental health experts to testify. They will also call relatives of those who died on September 11. They will be testifying to help save Zacarias Moussaoui's life.

Kelli Arena, CNN, Alexandria, Virginia.

(END VIDEOTAPE)

PHILLIPS: He's on the job, and retirement is off the table. At a Pentagon briefing you may have seen live right here on Live From, Donald Rumsfeld was asked whether he would consider resigning to ease political pressure on President Bush. Rumsfeld's response: "No."

A half-dozen retired generals say he should quit over his handling of the Iraq war. But Rumsfeld says the buck stops with the president.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: The president knows, as I know, that there are no indispensable men. The graveyards of the world are filled with "indispensable people" -- quote, unquote. No, I -- he -- he knows that I serve at his pleasure. And that's -- that's that.

(END VIDEO CLIP)

PHILLIPS: Political battles in Washington, real ones in Iraq, including most every day in Ramadi. U.S. and Iraqi forces are on the streets and under the gun.

CNN's Arwa Damon takes us up close and personal.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT: This is a joint-U.S. and Iraqi army operation to clear an area located just south of the government center. It's believed to be an insurgent staging point, an area where they launch their attacks on the government center from.

Now, the Iraqi army in Ramadi is some three brigades strong, moving along with a MIT team, a military transition team. This is all part of the training process of the Iraqi security forces. The intent of this operation is to look for weapons caches that the insurgents may be leaving behind, to try to find any suspicious individuals, and to create a relationship with the local population that lives here.

Many of the families that the soldiers and the Iraqi army officers have -- and the Marines have spoken to today are families that remain caught in the crossfire, coming from the government center and the insurgents that are firing on that location.

Arwa Damon, CNN, Ramadi, Iraq.

(END VIDEOTAPE)

PHILLIPS: April has been a particularly deadly month for the American men and women serving in Iraq. Forty-eight of them have died in the first two weeks.

We now salute some of those fallen heroes.

Army Staff Sergeant Dustin J. Harris enlisted in the Army right after he graduated from high school in Patten, Maine. His school principal remembers asking him, "Are you sure you really want to do this?" because it was so soon after 9/11. She says he was a good student and outstanding soccer player. Harris was killed April 6 by a roadside bomb while on foot patrol in Bayji.

Marine Lance Corporal Juana NavarroArellano died two days later in Anbar Province. She was inspired to sign up for duty by her younger twin brothers, who had both enlisted. Juana was born in Mexico and became a U.S. citizen when she was 13.

When he was a boy, Chief Warrant Officer Michael L. Hartwick told a Vietnam veteran tailgunner that he, too, would fly some day. He fulfilled that dream, flying Apache helicopters in the Army. Hartwick married his high school sweetheart, Kerri. They had two children. One of his teachers said of Hartwick, if he had a son, he was what you would want him to be. Hartwick's chopper was shot down while on patrol near Baghdad April 1.

These are just three of the 2,378 men and women who have died in the war in Iraq.

(COMMERCIAL BREAK)

PHILLIPS: More on this developing story out of South Florida, these brushfires taking place, yes, Tony?

HARRIS: Yes, several small brushfires. Want to give you a quick update, Kyra.

This is in Davie, Florida. And that brushfire, the -- the main on continues to burn. And now it has forced, we are learning, the closure of a portion of the Florida turnpike in both directions, until firefighters bring things under control and the smoke clears.

Look at all this smoke -- WFOR, our affiliate, with the chopper in the air right now -- next to possible to drive through that smoke, winds in the area driving it all, making matter worse for the firefighters. The flames are just flicking -- just flicking at the power lines, very near where this main fire is burning.

Davie, Florida, just to sort of orient you to the area here, is close to Fort Lauderdale -- very dry conditions in Central and South Florida over the last month or so, perfect conditions, Kyra, for brushfires, like the one you're seeing right now.

We will keep an eye on it.

PHILLIPS: All right, Tony, thanks.

HARRIS: Sure thing.

PHILLIPS: Straight ahead, public piety and secret shame -- an ex-monk exposes centuries of scandal. We are going to talk with Richard Sipe, the co-author of "Sex, Priests and Secret Codes," coming up next on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Well, since 1950, there have been more than 12,000 claims of sexual abuse by members of the Roman Catholic clergy. The Catholic Church is certainly not the only religious organization associated with scandals.

But the level of abuse provoked by -- my next guest, a former Benedictine monk, to take a critical look at church history. The explosive result is the books "Sex, Lies (sic) and Secret Codes: The Catholic Church's 2,000 Year Paper Trail of Sexual Abuse.'

Richard Sipe is a co-author of the book, along with another ex- monk and a current Catholic priest. He joins me from our Los Angeles bureau.

Good to see you.

RICHARD SIPE, CO-AUTHOR, "SEX, PRIESTS, AND SECRET CODES: THE CATHOLIC CHURCH'S 2,000 YEAR PAPER TRAIL OF SEXUAL ABUSE": Happy to be here.

PHILLIPS: Well, let's talk about the book. Why did you decide to come forward and write it with these other gentlemen?

SIPE: Well, we had been involved in so many cases as expert witnesses and as consultants.

And what was repeated over and over and over by the archbishops and cardinals was, "Oh, we never knew a thing happened."

And, of course, we knew that they knew. And, of course, the -- the documents were all there. And you know how it is in court, and in -- kind of "Prove it" was their stance.

And, so, we said, well, look here. You have had the proof, and you have been sitting on the proof. See, key to the whole crisis is secrecy. A cardinal, when he kneels before a pope and is consecrated as a cardinal, he takes a vow to the pope to keep secret anything that would cause scandal or harm to the church. And that's the absolute core of this scandal.

PHILLIPS: But you look back -- well, what is interesting is, you talk about this paper trail that -- that you followed. And you talk about this -- this -- these years and years of secrecy, yet, there is a part that you discovered back, Pope Gregory IX, when priests were expelled for sexual abuse and turned over to authorities.

I mean, there were -- there were hard-core consequences. Why didn't it just stay that way?

SIPE: Well, because the church, at that time, was in complete control of both civil and the religious circumstances. So, actually, what they did is, they convicted them in a church court, and then sent them to the civil authorities, over whom they had control, to deal with it.

And, since the Protestant Reformation, especially, the church had to pull back and become more of a secret society -- or very much a secret society. And...

PHILLIPS: But, Richard, it seems like it could happen that way now. It seems that the church could say, look, we're not going to put up with this, and we are going to report you to the proper authorities, and you cannot be a part of this church.

SIPE: Well, it's coming to that.

But it's -- it's not because the church has had the motivation. It's that the victims and the civil courts and the people have risen up and said, look what is happening. And, of course, after years and years and years of saying, "Oh, we didn't know anything; it didn't happen; prove it to us," they are saying, "Oh, well, now we will do what the courts tell us to do."

You know, there have been about 15 grand jury investigations around the country. And every one of them have found that the bishops and the cardinals involved have been complicit.

PHILLIPS: Why did you...

SIPE: And...

PHILLIPS: ... leave the priesthood? I'm curious.

SIPE: Oh, it wasn't my vocation.

PHILLIPS: Was it -- was it due to sexual abuse? Were you ever sexually abused, or any -- did anyone...

SIPE: No.

PHILLIPS: ... within the church ever come after you?

SIPE: No, no, no. No.

PHILLIPS: So, it was just something that didn't feel right for you?

SIPE: No, I will tell you, I was trained to deal with the mental health problems of priests.

And, as I was involved in this -- and I was quite successful in this -- I'm a very outspoken person, and I never could have done the work I have done, if I had stayed in the priesthood.

PHILLIPS: Well, let me ask you, Richard. I mean, you have met with individuals that were dealing with a lot of issues. The -- the issue of sexual abuse, is it because priests are not allowed to marry? Is it because of homosexuality? What -- what is your take?

SIPE: Well, it's related to all those things. Neither of those things is the cause.

And people say, well, celibacy is the cause. I say, no, non- celibacy is the cause. The point is that the church demands celibacy of anybody who wants to be a priest. And they have a right to do that.

But you know what? They do not train people for that. They do not train the men for that. They do not monitor them. There's no accountability. And, so, what you have -- had develop is a whole underworld of sexual activity, below this blanket of, "We are nonsexual beings."

And, of course, what has happened is that the victims of sexual abuse, as minors -- see, that's a crime. See, a priest can be involved with a man or he can involved with a woman. He can be involved with another man. There's nothing illegal about that.

I mean it's kind of hypocritical, but there's nothing illegal. So, what has happened is that this problem that has always been there has bubbled up to the fore, when many, many priests have left the priesthood. And, so, there are too many abusing priests to balance off the priests who are not abusing.

PHILLIPS: Richard, just for the -- the sake of balance here, just real quickly...

SIPE: Sure.

PHILLIPS: ... I have got to get you to respond.

SIPE: Sure.

PHILLIPS: An attorney for the Diocese of Orange -- this came out in "The Los Angeles Times" -- talking about you and the other authors of this book -- said, look, he believes you're just following the money. "What is their motivation? They are professional witness who have a position to sell. It's not exactly impartial scholarship."

What do you think about those coming forward, saying you shouldn't be doing this?

(LAUGHTER)

SIPE: Well, you know, they have said that ever since I have been writing and working. You can check my tax returns. There's not a lot of money in writing books.

And...

(LAUGHTER)

SIPE: ... I used to do -- do you know that I used to do any consultation for nothing? And I only started, you know, charging because of the time it took.

For instance, I have consulted with the district attorneys in Orange County, by the way, to L.A. And I -- I was hired by the attorney general in California as a consultant. I only charge $100 an hour whenever I work for any public agency, and that -- when the time of travel and everything else -- well, you can see my tax return. I'm -- I'm not a millionaire. I'm not making a lot of money on this.

PHILLIPS: Well, I have got to say, the book is fascinating. And the fact that you married a former nun, you have a son, and...

SIPE: Yes.

PHILLIPS: ... you still go to the church and consider yourself a very spiritual person -- it's a fascinating book. Your life is quite fascinating -- "Sex, Priests, and Secret Codes: The Catholic Church's 2,000 Year Paper Trail of Sexual Abuse.'

Richard, thanks for your time.

SIPE: You're very welcome, Kyra.

PHILLIPS: We have got to get straight to some developing news right now. I'm being told Tony Harris working for it us in the newsroom -- Tony.

HARRIS: Well, Kyra, as you know, a 19-year-old young man has been arrested in connection with the case of missing Alabama teen Natalee Holloway.

Now, there are some developments in this case today.

Aruban journalist Tito Lacle is on the line with us.

And, Tito, what do we know that is new today about this 19-year- old?

TITO LACLE, ARUBAN JOURNALIST: Well, a lot more.

I can tell you that the prosecuting office has just released statements, where they basically confirm some charges, or some suspicions, of which the new person being detained is accused of. And I can mention one of them being he's suspected of having been involved in a criminal offense, in relation to the disappearance of Natalee Holloway.

And, also, he is being suspected of having -- being involved in illegally narcotics, meaning drug usage also involved with the case. What I can tell you is, compared to the other suspects that you already know of course, Joran van der Sloot and Deepak and Satish Kalpoe, the only new accusation or suspicion that is different from the rest is the last one I mentioned, meaning the illegal narcotics.

And I confirmed with the prosecuting office that that is, indeed, the only new charge or new suspicion...

HARRIS: Yes.

LACLE: ... that is in this case.

HARRIS: Tito, I'm -- I'm looking at that statement right now.

Suspected, GVC.

LACLE: Right.

HARRIS: It's the only way we -- we know of this suspect, by these initials. Do we at least have a name?

LACLE: His first name has been in the local papers today. So, I'm going to just mention the first name. He goes by the name of Jeffrey (ph).

And that's the only way we can inform...

HARRIS: OK.

LACLE: ... the first name and then the last initial.

HARRIS: OK.

Tito, is he a local?

LACLE: He is of Dutch descent. And that's a funny term in Aruba, because Arubans are of Dutch descent. You may not be a native, meaning born here. I do not believe he is born in Aruba, but he is considered a local native.

HARRIS: OK.

(CROSSTALK)

HARRIS: Here -- here's the statement.

It says: GVC is suspected of criminal offenses that may be related to the disappearance of Ms. Holloway.

What does that mean?

LACLE: That he was somehow involved with the disappearance, and that he may or may not have done something which cost the life of Natalee Holloway.

HARRIS: OK. Any criminal history that we know of connected to this young man?

LACLE: None whatsoever.

It is interesting. Since he was working with a security company -- and we will assume that -- but, then again, that's speculation. I don't want to get into that. But being -- working with a security company, you have to have a good track record. And, if he had a criminal past, of course, it would not -- it would -- it would not fly.

HARRIS: Tito, is he scheduled for a court appearance at some point today?

LACLE: He was.

We were expecting, actually, for a morning court appearance. The morning went and came. And we're waiting for -- we are being told that, any minute now, he should make his appearance in court.

HARRIS: OK. Tito, we appreciate it. Thanks for your time.

And that's the latest for you -- Kyra.

PHILLIPS: All right, Tony, thanks so much.

HARRIS: Sure thing.

PHILLIPS: I'm just getting word of another developing story right now, this coming out of Phoenix, Arizona. We have got live pictures up here, southwest Phoenix area, I'm told. It's a tanker truck fire, reportedly at some type of salvage yard here in southwest Phoenix. It broke out about noon, Phoenix time -- these pictures coming to us from our affiliate KTVK.

It has been producing these clouds of dense black smoke for a while now. If you are familiar with this area, the salvage yard is located near 51st Avenue and Lower Buckeye.

Not quite sure how this fire broke out. We are going to continue to follow it, though, and see if -- if, indeed, there's any type of environmental threat or a threat to anybody around this -- this salvage yard.

We don't know if it has been evacuated, if there is anybody there, or if, indeed, this fire has been contained, or if it is spreading -- pretty powerful pictures, though now coming from another one of our affiliates there out of Phoenix, Arizona, KNXV. We want to thank our affiliates for those live pictures. We will bring you more information as we get it.

Oil prices at a record high. Can you expect a break at the pump any time soon? We're going to check the facts straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Well, prices now at a record high of more than $71 a barrel, and soaring right along with them, the price you pay for gas. Neither will not be plunging any time soon, as our CNN "Fact Check" explains.

(BEGIN VIDEOTAPE)

UNIDENTIFIED CORRESPONDENT (voice-over): The clear warning from analysts: Oil and gas prices could climb even higher in coming months.

Several factors are driving prices up: the diplomatic showdown with Iran over its nuclear ambitions -- Iran is the second largest oil producer in OPEC, the Organization of the Petroleum Exporting Countries -- civil unrest in oil-rich Nigeria, another OPEC member -- militant attacks have cut production by more than 25 percent -- the war in Iraq, especially the possibility of a full-blown civil war; strong global demand, amid tight supplies; the booming economies of oil-hungry China and India.

Soaring gas prices are hitting Americans where it hurts. Analysts say, it's happening, in part, because U.S. inventories have been shrinking, due, in part, to last year's hurricanes. More than 300,000 barrels a day of Gulf oil output remains shut because of hurricane-related damage.

Regular gas now averages $2.78 a gallon. That's 55 cents more than this time last year, according to the Energy Department. And analysts predict as we head toward the summer driving vacation season, the average could soon reach $3.

(END VIDEOTAPE)

PHILLIPS: Well, the president of China has arrived in Washington for some important meetings with some important people. But he's not in Washington, D.C. And the VIPs don't include President Bush, yet.

Our Ali Velshi on this story. Ali Velshi should be there.

ALI VELSHI, CNN ANCHOR: Yes, he's checking in with Bill Gates. That's the plan for Hu Jintao.

PHILLIPS: What's the connection there, by the way? Why Bill Gates?

VELSHI: All the cool people go see Bill Gates. I chatted with him a few weeks ago.

PHILLIPS: I guess I'm not cool.

VELSHI: Bill Gates is -- you know, when you're China, China is looking for a piece of everything, right? I mean, they need energy, they need people to make stuff, they need businesses to invest. Bill Gates, who is an entrepreneur and who has definitely, you know, shown signs of wanting to engage the entire world in his businesses, is a good person to meet.

So, you know, the Chinese president has been doing this. He goes to a lot of companies. In fact, the government is not describing this as a state visit. It's a working meeting. So there's a big dinner at Gates' place.

And Bill Gates is very sort of international and, you know, when you're China, depending on where you fall on things, some Americans think of China as a big threat, others think of it as a big opportunity. Bill Gates is one of those people who sees it as an opportunity, so it' a big welcome for the president of China. He sort of wants to get off on the right foot.

But, you know, Bill Gates is the hot ticket when you're in the United States if you're visiting from overseas. So getting an invitation to those parties -- I got to meet him in Times Square at an office building. I didn't get invited to the party.

PHILLIPS: You didn't get invited to the parties. Let me talk about the threat part of what you just said. I'm just remembering when we were talking about all the layoffs within the car industry. One thing that came up -- and we had all these analysts come on -- China and the fact that they are working on a car, a pretty good car, I guess, that will be about ten grand, and we see that as a threat.

VELSHI: And they're already -- first of all, they are a big car market for other people's cars, other manufactures. Most of the major manufacturers are in China. But China itself, remember, has gone from a whole lot of bicycles to a whole lot of cars.

They have got pollution problems, they've got all sorts of difficulties, so what they want to do is be able to have a people's car like a VW Bug. You know, they want something where people can afford and they can drive. So clearly, if China develops a car that is inexpensive and useful to people, that's a threat to everybody else who makes cars.

So China -- you know, you got to look at it from both sides. It's an opportunity, in some cases, to sell the Chinese goods, which is how Bill Gates sort of sees it, or it's something that's going to swamp your market and put all your workers out of work.

I mean, the reality I think lies somewhere in the middle. You've got to look at what the Chinese want to by as opposed to what they are flooding the market with. I mean, luxury goods is a perfect example. You know, Sak's is now opening up in China.

PHILLIPS: In China. VELSHI: That's the biggest luxury goods market in the world. It's the fastest growing. I was in China recently. You know, you walk in Shanghai, there are these luxury malls with Coach and Louis Vuitton and Prada and all those kind of places. You don't even see that collection of stores outside of New York, you know, in the United States.

This is a big, big market, so Sak's is moving in there. The Chinese are spending money, so they want to buy cheap cars. They also want to buy luxury goods. And so that, again, is another opportunity for companies that want to sell stuff in China.

PHILLIPS: Ali Velshi, we're going to see you closer to the closing bell.

VELSHI: Yes, I'm going to be telling you all of the markets are red hot today. Oil, another record. I'll tell you all about that in about half an hour.

PHILLIPS: Sounds great. See you then. Thanks, Ali.

Seventy-five pounds of explosives and another U.S. landmark crosses over into history. The Jamestown Bridge in Rhode Island toppled more than 100 feet into Narragansett Bay this morning in a demolition that shook windows in town. The old bridge was closed to traffic back in 1992 when it was replaced by a bigger one.

LIVE FROM is back after a quick break.

(COMMERCIAL BREAK)

PHILLIPS: Israel holds its fire for now, but it is blaming Hamas and the Palestinian government it controls for yesterday's suicide bombing in Tel Aviv. Nine people, plus the bomber, died. Sixty others were hurt.

CNN's Paula Hancocks has the latest.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Israelis start to bury their dead. Sixty-year-old Victor Erez (ph) laid to rest in a Tel Aviv cemetery, just one of nine killed in Monday's suicide bombing. People came to the site of Monday's attack to light candles and lay flowers.

Hamas, which dominates the new Palestinian Authority, continues to condone the attack Tuesday. Interior Minister Saeed Seyam saying Palestinians have the right to defend themselves against Israel in any way possible.

SAEED SEYAM, PALESTINIAN INTERIOR MINISTER (through translator): We are not a great power who can confront the planes and the missiles of the occupation, but our people have the will and the right to defend themselves and to confront as much as they can the arrogances of the occupation. HANCOCKS: Israeli Prime Minister Ehud Olmert met with his top advisers, officially blaming the Palestinian Authority for Monday's attack, the deadliest in 20 months, but deciding against a proposed military response against the Hamas-led government for the time being.

RANAAN GISSIN, ISRAELI SPOKESMAN: It happens to be a terrorist government, a government that supports terrorist activity, a government that refuses to recognize Israel's right to exist, a government that continues to incite and instigate the euphemism they call as armed resistance against occupation. But the end result is killing innocent men, women and children, like they killed in the central bus station.

HANCOCKS: Less than 50 miles south of Tel Aviv, in Gaza City, hundreds of Palestinians mourn the death of a man who they say was killed when the residential building he was in was hit by Israeli forces. Israeli forces have been shelling the area in recent weeks, they say to stop Palestinian militants from launching rockets into Israel.

Israel continues to be on a heightened state of alert as it has been during the whole of the Passover holiday. Israeli forces stepped up their presence in the West Bank town of Jenin, where the suicide bomber was from, arresting the bomber's father, brother and about 30 others.

Paula Hancocks, CNN, Jerusalem.

(END VIDEOTAPE)

PHILLIPS: Well, it's Army Day in Iran, a prime opportunity for Iran's militant president to warn potential foes to back off. Mahmoud Ahmadinejad spoke after the nation's armed forces marched through the streets of Tehran. While saying that Iran's army is no threat to anyone, he promised to cut off the hands of any aggressor. Iran has been butting heads with the U.S. and U.N. over its nuclear program.

President Bush has called talk of a U.S. strike on Iran "wild speculation," but it wouldn't be a first. Here's a look at Operation Eagle Claw, a mission that shocked the world 26 years ago this month.

(BEGIN VIDEOTAPE)

HARRIS (voice-over): President Jimmy Carter ordered the top secret operation in April of 1980 in a bid to free 53 Americans held hostage in Tehran. It was a daring plan with virtually no room for error. Six C-130 transport planes carrying special operations troops would rendezvous with nine Navy helicopters at a remote desert air strip near Tehran.

Almost from the start, the mission ran into trouble. First, two choppers went down due to engine trouble. A third landed to help. Next, the next six other choppers flew into a huge dust storm. One suffered damage when landing at the staging area. With only five choppers now available, President Carter aborted the mission. Then chaos erupted. During the scramble to refuel the choppers so they could return to Navy aircraft carriers, crashed into a C-130 refueling plane and burst into flames. Eight Americans, five airmen and three marines, were killed; several others injured.

Orders to blow up the choppers weren't carried out. As a result, the mission's plans fell into Iranian hands. President Carter went on national television and assumed full responsibility for the debacle.

(END VIDEOTAPE)

PHILLIPS: It's always amazing to hear stories of Japanese soldiers lost since World War II. Well, here's another one. Ishinosuke Uwano hadn't seen his family since going off to war. As far as they knew, he hadn't been seen since 1958. He was officially declared dead in 2000. Turns out the 83-year-old has been living in Ukraine with his wife and family. He's now on his way to Japan for a 10-day visit with relatives. He says he wants to see his parents' graves and Japan's famous cherry blossoms.

Still ahead, find out what the fast food restaurant McDonald's is taking or doing right now to help fight bird flu worldwide. The news keeps coming, we'll keep bringing it to you. More LIVE FROM next.

(COMMERCIAL BREAK)

PHILLIPS: Unless you have a beak and feathers, bird flu is not a pandemic, but many scientists believe a human pandemic is overdo and say it's a good idea to think ahead. In that vein, several hundred health workers in Maryland -- we're talking technical and support staffers here -- were asked about a possible flu pandemic. More than 40 percent say they wouldn't show up for work, 66 percent said they felt they would be putting themselves at risk if they did.

And this morning, the public health director of Los Angeles County spoke to CNN's Miles O'brien About pandemic staffing.

(BEGIN VIDEO CLIP)

JONATHAN FIELDING, L.A. COUNTY PUBLIC HEALTH DIRECTOR: Hospitals are, I think, now becoming very sensitive to this issue. We're working with a lot of them. I think they understand increasingly the importance of this. But we also know that one of the problems of having pandemic flu is that a lot of people will be sick. We already have shortages in the number of categories. For example, nurses of healthcare professionals. So it's going to be challenging just to get enough people.

(END VIDEO CLIP)

PHILLIPS: Remember to start your day with CNN's "AMERICAN MORNING," weekdays at 6:00 a.m..

McDonald's isn't taking any chances with its top selling Chicken McNuggets and Egg McMuffins, though food safety experts say proper handling and thorough cooking kills the bird flu virus in poultry, meat and eggs. McDonald's is pushing its European suppliers to bring all free range birds indoors. McDonald's started bird flu testing with U.S. suppliers six months ago, but in some countries, testing is controlled by the government.

And you knew it had to happen. Bird flu mutates into entertainment fodder. "The New York" ABC will be first network to cash in on the flap with the TV movie "Fatal Contact: Bird Flu in America." Joely Richardson and Stacey Keach will star. It airs May 9th during ratings sweep and it will probably do for birds what "Psycho" did for showers.

The news keeps coming. We'll keep bringing it to you. More LIVE FROM coming up.

(COMMERCIAL BREAK)

PHILLIPS: Las Vegas police need you to call if you can identify any of the young people on this surveillance video. Let em warn you, it's hard to watch. It shows a casino employee being punched, hit with a chain or belt, beaten, chased, stomped and then kicked. The brutal attack happened at a parking garage early Saturday near the MGM Grand. Police say the victim suffered a broken jaw and collar bone. They believe that those attackers, a group of about 15 people, may have been at the theater next door.

Arrested and now called a suspect. Prosecutors in Aruba say a 19-year-old man identified as GVC is being held for possible criminal offenses involving the disappearance of Natalee Holloway as well as on drug charges. The Alabama teen disappeared just about a year ago from a graduation trip in Aruba. To date, no one has been formally charged in her disappearance.

Pardons for Rosa Parks and many more. Alabama lawmakers have passed bill that clears the way for hundreds of civil rights figures to be pardoned. Their crimes, violating old laws aimed at keeping the races separate. Some African-American lawmakers question whether pardons of necessary since those Jim Crow laws were ruled unconstitutional a long time ago. Alabama's governor has not said whether he will sign the bill.

The bear hunt is back on in Cherokee National Forest. Preliminary tests show the bear that was trapped and killed over the weekend was apparently not the one that attacked an Ohio mother and her two children. More tests are being done right now. You'll remember, a six year old girl was killed in that attack. Her little brother is still in the hospital and so is the mother who faces more surgery for bites to her neck.

Time now to check in with Wolf Blitzer. He's standing by in THE SITUATION ROOM to tell us what's coming up at the top of the hour. Hi, Wolf?

WOLF BLITZER, CNN ANCHOR: Hi, Kyra. Thanks very much. P.R. offensive. The secretary of Defense Donald Rumsfeld meets behind closed doors with former U.S. generals. We'll speak with one man who is inside that room with the defense secretary. Also, White House shuffle. Who is in, who is out? Who may be next?

Plus gas prices sky high. Are the oil companies taking advantage at the pump? Find out why one U.S. senator is now calling for an investigation.

Get this, Hillaryisms. Sayings that come back to bite. Literally. That and much more, all that, Kyra, here in THE SITUATION ROOM.

PHILLIPS: Wolf I got a question for you.

BLITZER: Go ahead.

PHILLIPS: I know that always makes you a little nervous. Are you nervous?

BLITZER: With you, yes.

PHILLIPS: The upcoming May issue of "Esquire" magazine. Did you know you're in it?

BLITZER: Yes, I have seen the pictures. I have.

PHILLIPS. You have. The story is how men can shave years off their appearances by simply dying their hair gray.

BLITZER: No, dying it darker.

PHILLIPS: A darker gray, right? And then losing the facial hair. I don't know, Wolf. What do you think?

BLITZER: I think I'm going to stay the way I am.

PHILLIPS: I think I like the beard and mustache.

BLITZER: I like the au natural.

PHILLIPS: We took a poll. We think we like it, too. What about the glasses? Think we should move away from more of the round glasses and go to a square?

BLITZER: What do you think?

PHILLIPS: I don't know. That will be the next set of pictures.

BLITZER: We have something to do tomorrow.

PHILLIPS: That will be the follow-up in "Esquire."

See you, Wolf. Ali Velshi and the closing bell straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Well this next story might remind you of rush hour if you live in a busy city. Just remember these people are doing this for fun and prizes. The roll-over championships. That's what they are called. They were held in London over the weekend. Banger racing drivers, as they are called, try to take the ramp at full speed and get the best roll that they can. Each roll is judged on distance and elevation. Competitors also depend on style points and cheers from the crowd. A 24 year old radio D.J. from Kent won this year's trophy.

Insert favorite porky joke here. Have to share these highlights of the pig olympics from Russia. Yes, the pig olympics. Complete with opening ceremonies, individual and team events. These little piggie sportsmen were coached in competitions like pig ball. Organizers say, win or lose, all the piglets will be spared. They will breed a new generation of pig athletes.

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