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Lebanon Fires Missiles into Israel; Bush Supports Israel, Urges Resolution; California Wildfires Continue Rampaging

Aired July 13, 2006 - 12:59   ET

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

KYRA PHILLIPS, CNN ANCHOR: Hello, everyone, I'm Kyra Phillips at the CNN World Headquarters in Atlanta.
An airport bombed, rockets fired, a U.S. warship moves out of the way. Now a U.N. team is en route to try to quell the crisis in the Middle East.

In the West, a state of emergency, homes destroyed by fire. A national forest could be next. What's fueling the flames?

Was it flooding or was it wind? One couple's quest to sue a major insurance company. Could it affect the thousands of ongoing cases filed since Hurricane Katrina? The family at the center of this landmark case joins us from Gulfport.

LIVE FROM starts right now.

Israel bombing airports in Lebanon, Hezbollah lobbing rockets into Israel, and the United Nations entering familiar territory: Middle East crisis mode. And here's what we know this hour.

Beirut International Airport shut down. Israeli jets bombed all three runways and later hit two military airbases. More than 70 rockets, all fired from Lebanon, struck several towns in northern Israel today. At least one person was killed. Dozens more are hurt. And a U.N. negotiating team is on the way to the Middle East. A spokesperson for U.N. Secretary-General Kofi Annan says the team will urge all sides to show restraint and protect civilians.

We're covering all angles in the Middle East crisis. CNN's Alessio Vinci is in Beirut, Lebanon. John Vause on the Lebanese/Israeli border. Paula Hancocks is in Jerusalem. And White House correspondent Ed Henry is traveling with the president in Germany.

Crisis in the Middle East, certainly not new, more like the sudden reawakening of a dormant dispute, Lebanon, Gaza and Israel. Air strikes, rocket attacks and casualties.

CNN's John Vause is on Israel's border with Lebanon.

John, what's the Israeli strategy right now?

JOHN VAUSE, CNN CORRESPONDENT: Well, Israel, as this military conflict continues to escalate, with Israel carrying out air strikes today, not just in Southern Lebanon but also in the north of the country, reportedly, they're hitting an airport up in the north of Lebanon, as well as in the Bekaa Valley along the border with Syria. The Israeli artillery continues to pound Hezbollah positions in southern Lebanon.

The plan is to try and pressure the Lebanese government and Hezbollah to free the two Israeli kidnapped soldiers. But the Israeli defense minister says there is a wider strategy here, as well, to force Hezbollah to retreat from the southern part of Lebanon and, also, to never come back, Kyra.

PHILLIPS: John Vause, we'll keep checking in with you throughout the next three hours.

Six years of relative quiet between Israel and Lebanon. That's history now. Today's hostilities are the heaviest since the early '80s. Nothing flying or floating in or out of Beirut, where people are comparing today to the worst days of the Middle East conflict.

CNN's Alessio Vinci is in the capital. What's the status now, Alessio? Alessio, go ahead.

All right, we'll try and get back with him. We lost contact with him. Let's move on to Paula Hancocks.

Nothing is safe in Lebanon right now, those words coming from the Israeli military, underscoring what we've already seen. Military facilities, civilian transportation hubs, a television station, all of this targeting by a country demanding the release of its kidnapped soldiers.

Let's go to Jerusalem. CNN's Paula Hancocks on the latest -- Paula.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Kyra.

Well, we have heard from the chief of staff, Dan Halutz, saying they will target whatever they want. As you say, it is going to be the infrastructure, anything that is to do with Hezbollah. We've seen that TV station being targeted just because it was Hezbollah affiliated.

Now, we have seen escalation in violence and tensions, tremendous escalation over just a day and a half.

If we cast our minds back just three weeks ago, we saw Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas embracing warmly and talking about peace talks. We could not be further away from that point right now, Ehud Olmert saying there will be no negotiations, there will be no prisoner swap. But we've heard from Hezbollah and Hamas.

Of course there is operations still going on with Gaza. Both sides saying the only way the Israeli soldiers will be released is if the Palestinian prisoners and Arab prisoners in Israeli jails are released, as well. So the challenge for any mediator trying to come to this region, whether from the U.S., the U.N. or the E.U., is how to allow both sides to save face, whilst giving both sides what they want -- Kyra.

PHILLIPS: Now Paula, in the past there have been negotiations. I believe it was with an Israeli businessman. There was some sort of exchange that took place when this happened a number of years ago. Why is it so different now? Why are they headstrong about not negotiating?

HANCOCKS: Well, this time around, we have a different man at the top. We have a new prime minister, Ehud Olmert.

Now, the former prime minister, Ariel Sharon, did negotiate with Hezbollah and he did secure the release of three soldiers, the remains of three soldiers who had been killed back in 2000. In 2004, he authorized the release of about 430 Arab prisoners from Israeli jails to get those remains back and also that businessman who was still alive.

This time around, though, Ehud Olmert and all the politician are saying they don't want to set another precedent. They are worried that if this time around they agree to a prisoner swap, it will just encourage more abductions.

Now, we already know that Hamas and Hezbollah have been trying to years to kidnap Israeli citizens and civilians, sometimes successfully, because they know it is a bargaining chip.

PHILLIPS: Paula Hancocks, we'll continue to talk to you, as well, throughout the next couple of hours.

Now let's get back to John Vause. He's on the Israeli/Lebanon border where things are flaring up. John, what's happening right now?

VAUSE: Well, Kyra, for the first time in its conflict, the major coastal city in the north of Haifa and Israel's north has been hit by a rocket. This coming from Israeli officials. This happened after the Hezbollah warned that Haifa could be a target if Beirut was attacked by Israeli forces.

This is a major escalation. Haifa is a major port city in the north of Israel. It has been, now, hit by rockets in the first time in this campaign. It comes after two Katusha rockets fell just a short time ago on the northern city of Nahariya, the second time that city was hit today. I learned one person was killed there.

But the important news in the last few moments, Kyra, the major port city of Haifa in the north of Israel has been hit by rocket. Hezbollah warned they would carry out these attacks, and it now appears they have been true to their word, Kyra.

PHILLIPS: And John, just to talk a little bit about this area, you know the area well. I've been lucky enough to be there. I mean, this is a beautiful area along the Mediterranean Sea. A lot of tourists go to these areas. There's got to be a lot of concern for civilian casualties as this intensifies.

VAUSE: Well, Haifa is the major Israeli northern city. It's a good distance from the border with Lebanon. This would be extremely concerning for the Israeli officials, that now Haifa is in range of these rockets.

We don't know if it was a Katusha rocket or what they call Grad 60 (ph) rocket which was fired buy Hezbollah. But in the past, Hezbollah had warned they had 10,000 rockets lined up on the border between Israel and Lebanon. And they say that some of those rockets can reach Haifa. And it looks like they've been true to their word.

Haifa is a major city. Several hundred thousand people live there. It is a tourist destination. So now in range of these rockets being fired by Hezbollah. This is a major escalation.

A short time ago, the head of Israel's military warned that if these Katusha rockets and other missiles continue falling on Israeli towns and city, then Beirut would be a target. So this would now escalate further with Israeli air strikes not just in Lebanon but quite possibly targeting the Lebanese capital of Beirut, as well, Kyra.

PHILLIPS: And once again, John Vause bringing us the latest developments there, rockets from Lebanon hitting that Israeli city of Haifa along the sea. We'll continue to check in with John as the news develops, obviously happening by the second right now.

Meanwhile, six years of relative quiet between Israel and Lebanon, that's history. Today's hostilities are the heaviest since the early '80s. Nothing flying or floating into or out of Beirut, where people are comparing today to the worst days of the Middle East conflict.

CNN's Alessio Vinci, now connected with us in the Lebanese capital. Alessio, bring us up to date about what's happening there.

ALESSIO VINCI, CNN CORRESPONDENT: Hello, Kyra. Let me bring you up to date with the very latest.

We've heard from the Lebanese army. We have confirmed, with them, that Israeli jets have targeted two locations in the Bekaa Valley. First, in the town of Rayak there. There was a military barrack and a runway. That was hit by Israeli planes within the last two hours.

And we understand that a second military runway has been hit in the town of Qulayaat in northern Lebanon.

All this while we understand from Lebanese television that Israeli jets are flying overhead in the major supply route between Beirut and between Lebanon and Syria, in the Bekaa Valley. So obviously, no indication there that Israel is letting up the pressure on Lebanon.

It wants -- Israel wants Lebanon to free those two soldiers. The problem, of course, is that the government here, who has been holding a series of cabinet sessions today, doesn't have much sway against the Hezbollah group, although two Hezbollah ministers belong to the current government.

So we're facing here, as far as the Lebanese are concerned, both a military crisis, as well as a political crisis, that the government here is facing at this time, Kyra.

PHILLIPS: Now Alessio, you bring up a good point. You're saying that the Lebanese army is bringing you up to date on what's happening. Obviously, the Lebanese forces not at the center or involved with these attacks. It is the guerrillas, the Hezbollah guerrillas. Two separate forces here but operating under the same government.

What's the role of the Lebanese army? Are they going to try to counteract what Hezbollah guerrillas are doing? And what about the safety of civilians in Lebanon?

VINCI: Right now, we have no indication that the Lebanese army, the regular Lebanese army, will actually counter-react to what the Hezbollahs are doing.

Right now it seems to us, at least from here, from Beirut, that Hezbollah has the lead in this crisis -- in this crisis. They are the ones who have kidnapped the two soldiers. They are the ones who are calling for indirect negotiations between Israel and Lebanon. And we have not really heard any advances if you want, from the Lebanese army.

So right now, the Lebanese army is remaining on the sidelines, if you want.

In the history of this country, of course, the problem is, with the civil war that has, you know, destroyed this country for almost two -- two decades here, involving the two local armies. Obviously, it is, perhaps, the worst possible outcome here.

PHILLIPS: Alessio Vinci, thanks so much.

Now we want to take you live to Washington, D.C. Speaking at the Press Club right now, Israeli's ambassador to the U.S., Daniel Ayalon. Let's listen in.

DANIEL AYALON, ISRAEL AMBASSADOR TO U.S.: ... ancient, I would say now, U.N. council resolutions like 425, which we fulfilled to the letter, by leaving Lebanon altogether. And then the Lebanese had to disarm all the -- what they call the militias or armed elements or terrorists. All militias -- Lebanese militias were disarmed except the Hezbollah.

Now, there was a reiteration of this demand from the Lebanese government in Security Council resolutions 1559 of last year and 1680. Also, of the end of last year. So there is nothing that can be added to that. It has to be applied. And to the extent that we can help it happen, we will continue with the operation.

Yes, sir?

UNIDENTIFIED MALE: Mr. Ambassador, Les Consolving (ph) of "World Net Daily" and WCBM.

Are you or your prime minister or anyone in the Knesset aware of the U.S. historical fact that in 1864, General Custer's hanging and shooting of nine Confederate prisoners of war was brought to an end only by Colonel John Mosby's hanging of eight of Custard's command?

AYALON: Historical facts are historical facts. I'm not sure I see the relevance for today. Except it goes to show -- and I think this is something that is very important to clarify. When these terrorists talk about the prisoner exchange, it's not the case. There are no prisoners exchange. We're talking about convicted murders, who spend in Israeli jails because they have blood on their hands.

PHILLIPS: Daniel Ayalon, the Israeli ambassador to the U.S., speaking to the Press Club in Washington, D.C., answering questions from various journalists. We'll continue to monitor that for you as he continues talking.

But the U.N. is calling for restraint. Secretary-General Kofi Annan has asked his special political adviser to load a three-person team to try to defuse the crisis. The team heads first to Cairo, with other stops expected in Israel, the Palestinian territories, Lebanon and Syria.

Now the Middle East tensions amount to a tight rope for President Bush. He's spending one more day in Germany as a new guest of new Chancellor Angela Merkel. While he's backing Israel's right to defend itself, he's urging it not to jeopardize Lebanon's shaky democracy.

CNN's White House correspondent, Ed Henry, is in the town of Rostock with more on the president's perspective.

Ed, what's he saying?

ED HENRY, CNN CORRESPONDENT: Well, Kyra, he's really lashing out at both Iran and Syria, saying they're really to blame here for the escalation of violence, because of their support for the terrorist group Hezbollah. The president also making clear that he believes Israel has the right to defend -- defend itself.

But the president's walking a fine line there, as you noted, because he quickly added that he doesn't want Israel to overreact to such a point that it could disrupt, stunt the growth of a fledgling democracy that has sprouted up in Lebanon.

So this is just yet another thorny issue the president has to deal with in advance of the G-8 summit, which kicks off Sunday in St. Petersburg.

You mentioned he's here in Germany right now for one more day. He's with Angela Merkel, who has really become his new best friend on the world stage. The president in recent days has been talking so much about diplomacy, diplomacy, diplomacy from the Mideast to North Korea and Iran as well.

And it's important, right now, more than ever, in fact, for him to have such a strong ally in Europe, in Merkel. Her predecessor, obviously, Chancellor Schroeder, was not an ally of this president, specifically over their dispute over the war in Iraq, Kyra.

PHILLIPS: Ed, quick question for you. Actually, we're just getting word that we have confirmed that rocket attack in the city of Haifa, troops there. Now we're getting word out of Israel.

Ed, quick question about the G-8 summit. You mentioned Hamas, Hezbollah obviously being supported by Iran. Iran one of the center issues at the G-8 summit. You look at the timing of this, perfect distraction, isn't it?

HENRY: Well, it's remarkable. The White House has really -- saw it, almost, though, as an opportunity here to take another shot at Iran, given their support of Hezbollah.

On a separate track, of course, the president, today, as well, saying that it's time for Iran to be held for account, because of its thirst for nuclear weapons.

You know that yesterday Secretary Rice was in Paris, waiting for an answer from Iran, from that U.S. offer that's been standing for weeks now, to get Iran back to the table, multilateral talks, in exchange for them making clear that their uranium enrichment program is for peaceful purposes, not for war. Iran continuing not to come to the table, refusing to talk.

And so the president, again, today, warned that, in fact, they will be brought before the U.N. Security Council, sanctions, tough sanctions coming up.

But all this talk about diplomacy, so far, there really has been very little action around the world. Iran is still defying this coalition the president is trying to build. So there are a lot of thorny issues for him to face this weekend at the summit -- Kyra.

PHILLIPS: Ed Henry, thanks so much.

And once again, CNN confirming what sources were telling our John Vause there at the Israeli/Lebanon border. Two rockets fired from Lebanon, hitting the city of Haifa, that beautiful resort town along the Mediterranean Sea.

We'll continue to update you as we get word from the IDF, the Israel Defense Force, and also our sources here within CNN.

Well, who is Hezbollah? We're going to take a closer look now at the group at the center of the Israeli/Lebanese flare-up. Our live coverage continues.

Plus, up in smoke. California's Yucca Valley is burning. And this wildfire could triple in size before it's controlled. A live report just ahead. You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Once again, we want to bring you up to date on the crisis in the Middle East right now.

We are confirming exactly what John Vause told us just a few minutes ago, coming from the Israeli Defense Force. The IDF saying two rockets from Lebanon have hit the Israeli city of Haifa. Those rockets, fired from Lebanon, hit the northern city there within the past hour. Haifa, a beautiful resort town, a popular place for tourists to go. There's a university there, right along the Mediterranean Sea.

We'll continue to follow, of course, every part of the military action. As there are two battles going on, the Gaza operations, also, what is happening on the Israeli/Lebanese border.

Well, more now on Hezbollah, the group at the center of the Israeli/Lebanese flare-up.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Hezbollah or Party of God, emerged in Lebanon in the early 1980s, in response to Israel's invasion of Lebanon. Hezbollah was formed by Shiite clerics, primarily to try and drive the Israeli troops out.

It is supported by Syria and Iran. Israel and the U.S. consider Hezbollah a terrorist organization, as the group became synonymous with suicide bombings and kidnappings targeting Israeli and western interests.

It's been linked to many high-profile attacks, including the 1983 bombing of Marine barracks in Beirut that left 241 American troops dead.

Over the years, Hezbollah also evolved into a civilian movement with members of the Lebanese parliament and a welfare program that provides schools, hospitals, and other services to the Lebanese. Although Israeli troops withdrew from Lebanon in 2000, Hezbollah continues to control the south of the country.

(END VIDEOTAPE)

PHILLIPS: CNN's John Vause is on Israel's border with Lebanon. John, bring us up to date. We were able to confirm exactly what the IDF was telling you about these attacks on Haifa, coming from the IDF. Obviously, your sources there on the ground telling you the same thing.

VAUSE: That's right, Kyra.

What we know, two rockets, two missiles have landed in the port city of Haifa. Haifa is Israel's third largest city, population around 300,000. Probably about 40 kilometers, that's about 25, maybe 30 miles away from the Israel/Lebanon border.

This would be the furthest a Hezbollah rocket or missile has traveled, and this is a dangerous escalation in this conflict, the Israeli military chief of staff warning that if Israeli towns or cities are targeted by these Hezbollah rockets, then Beirut will be a target and that Hezbollah itself will be a target. Israel saying it wants to force Hezbollah out of the southern part of Lebanon, assuring it never comes back.

In the latest attack in Haifa, so far we are hearing no reports of casualties. But regardless, this is a major escalation. We are now waiting for the Israeli response to this attack by Hezbollah on the city of Haifa, Kyra.

PHILLIPS: All right, John Vause. We'll keep checking in with you. Thanks so much.

Meanwhile, Carol Lin now working all angles of this story, as well, from our CNN newsroom.

Carol, what do you have?

CAROL LIN, CNN ANCHOR: Well, just the latest reports from the CNN international desk behind me and the images now being shown on Lebanese television. Want to share some of them with you so that you can see the effect of the Israeli air strikes.

There you see a road that has been blown out. We know that there have been dozens of Israeli air strikes in this area. Bridges out, roads out, also, the Beirut International Airport has been closed, as Israeli air strikes have knocked out at least three runways.

Just a couple of hours ago two military bases were struck. Both of them, very strategic locations, close -- the closest bases to the Syrian border. Syria, a supporter of Hezbollah.

But you can see the impact of this, as John Vause was saying, that Israel is now calling this -- the ambassador to the United Nations calling this a major escalation in the conflict, as you've been reporting. The air strikes, the Hezbollah rocket attacks on the city of Haifa.

Kyra, we're also hearing from the international desk -- you know where the High Shrine is. It's in the main part of the Haifa city in the old town area. It's on the mountain, Mt. Carmel. So if you take the road behind the shrine, that is where the rocket attack occurred.

This is very close to the main center of the town. A beautiful area, as you've been describing, where the Hanging Gardens of the Bahai shrine are, and in a part of town, too, that has been known for its inclusiveness, Arabs, Jews, Drus (ph), Muslim, all of them coexisting in Haifa. That city now under attack.

PHILLIPS: Carol, I don't know if you -- I know you have been to Israel, as well. And I was able to stay in Haifa for a while and actually went to that Bahai temple up on the hill. It's breathtaking. I mean, it's a beautiful place. And a lot of people know that area for that sight. And it is a refuge for a lot of people within that country.

LIN: Yes, and several pilgrims, religious pilgrims go to that shrine. It's the international headquarters for the Bahai faith. And everybody knows what that image is. It is that beautiful gold-domed temple that overlooks the Mediterranean Sea. It is -- it is utterly breath-taking.

And it is a place where, if you are a tourist from anywhere in the world, this is where you would be. And it is approaching sundown out there as these attacks continue.

PHILLIPS: Carol, appreciate the insight and the update.

Well, the U.S. military makes a move in light of the Middle East crisis. A live report from the Pentagon straight ahead. This is CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: One hundred and eight blistering degrees, winds as strong as 40 miles an hour, and 40,000 acres already torched. Could it get any worse in California? Sadly, the answer is yes, very much worse.

CNN's Kyung Lah is in Yucca Valley with more on the rampaging Sawtooth fires and another wildfire just southeast of San Francisco.

Bring us up to date, Kyung Lah.

KYUNG LAH, CNN CORRESPONDENT: Hey, Kyra.

This is a part of the day when the heat starts to really pick up. And we're actually starting to feel the winds pick up in this area. And that's a real challenge for firefighters.

What we're seeing in the distance now, just over this ridge, you can see that giant plume of smoke. That, we understand, according to what firefighters have been able to pinpoint, is the heart of the fire. But very difficult area to access.

Let's give you a closer look from some aerials of what the fire looks like today. The fire, according to the latest information from the fire department, is 40,000 acres. That has grown from yesterday. It is, though, 20 percent contained. No estimation on any sort of full containment.

Forty-two houses have been lost, and 1,500 homes, though, do remain this danger. Fifteen hundred households have been evacuated, but not everyone is following this evacuation order.

Now Kyra, you were talking about that fire to the south and west of us. It's expected to merge in about 12 hours. That will bring it to 50,000 acres. If we can come back live here, you can see that ridge in the distance. That's very typical of the terrain in this area. What firefighters say is because of that tough terrain, it's hard to hold the fire line. That's why they expect those two fires to merge.

What they're trying to prevent is scenes like this. You see that burned out car there. There have been homes lost, as well. The firefighters say that if these conditions keep going, if we see the heat, we see the winds that we're seeing, this fire, once it merges, as it's expected to in the next 12 hours could start heading toward the Big Bear area -- Kyra.

PHILLIPS: Now Kyung, I apologize. We said that you were in Sawtooth. You're actually in Pioneertown, right? And this is what you and I were talking so much about yesterday, this historic area where they filmed all the western movies. It was a big tourist area for a lot of people.

LAH: It's actually -- probably would be about a mile, mile and a half away from where we are. There's -- just to give you an idea, we're going to pull out a little bit. You can see how sparse this area is. And it's dotted with homes. It really does look like the Wild West, like a pioneer town.

But way in the distance there, you see a couple little houses. So that's what firefighters are trying to protect. You can see that this is a wild area, which is what draws a lot of people here. But it has also made this area very difficult for firefighters to protect, Kyra.

PHILLIPS: Kyung Lah, thank you very much. We'll check in, of course, with you, throughout the next couple of hours.

Meanwhile, Israel bombing airports in Lebanon, Hezbollah lobbing rockets into Israel. This hour, the Israeli defense force reports that two rockets have hit the port city of Haifa.

Here's what we know right now this hour.

Beirut International Airport, shut down. Israeli jets bombed all three runways and later hit two military air bases. More than 70 rockets, all fired from Lebanon, struck several towns in northern Israel. At least one person was killed, dozens are hurt, and a U.N. negotiating team is on the way to the Middle East. A spokesperson for Secretary-General Kofi Annan says that the team will urge all sides to show restraint and protect civilians.

Now, those rising tensions in the Middle East are putting more pressure on oil prices. Susan Lisovicz live from the New York Stock Exchange monitoring all that for us. What's the latest, Susan?

(STOCK MARKET REPORT)

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