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Israel Strikes Beirut Airport and Hezbollah Targets; Oil Prices Surge: Plame Lawsuit; Indian Bombings

Aired July 13, 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: A major escalation in a Mideast already on edge.
Here's what we know right now. Israel says two Hezbollah rockets have slammed into the port city of Haifa. There are no reports of injuries, but Israel's ambassador to the U.S. calls it a major, major escalation of the crisis.

Israelis are responding. Hundreds of targets have been struck inside Lebanon, including the Beirut airport, twice. The latest attack on the airport came within the past hour from Israeli helicopter gunships. Lebanon wants the United Nations to act. An urgent meeting of the Security Council is scheduled for tomorrow.

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

We are also watching Middle Eastern television -- Carol Lin monitoring all of that. And there's a lot to watch.

Hey, Carol.

CAROL LIN, CNN CORRESPONDENT: Boy, there sure is.

We are covering all angles to this conflict. And we're watching the media out of the region, beginning with Israeli television, the Lebanese Broadcasting Corporation, also, very unique here, Hezbollah Television, which has been banned in the United States and all across Europe, because it's considered a vehicle for a terrorist organization. And we are also monitoring the Arab network Al-Arabiya.

Now, Kyra, a lot has happened in the region so far. We have fresh video coming in out of the region right now. Let me show you what we have on the attack, the rocket attack, on the northern port city of Haifa in Israel. You are seeing the aftermath of that right now, as investigators comb through the wreckage there on Mount Carmel. It's the highest point in Haifa in -- in a beautiful area of the downtown region, just beyond the point that -- what you're seeing is the -- the Baha'i Shrine, which is famous to tourists and -- and a symbol of the Baha'i faith from around the world.

You're seeing the aftermath of the attack, as they pick through the metal shards. And, also, a short time ago, we heard from the mayor of Haifa, Yona Yahav, and what he had to say about the resiliency of the Israeli people.

(BEGIN VIDEO CLIP)

YONA YAHAV, MAYOR OF HAIFA, ISRAEL: We are prepared to (INAUDIBLE) of this kind of throughout the last year. We -- our outcome was, some day, it will happen. When it happened in 1990, in the Iraqi war, that two missile hit Mount Carmel. It could happen again. And we are very much prepared for that. And you see that, in one second, all the forces arrived here and are taking charge in the situation.

UNIDENTIFIED FEMALE: Are you asking everyone to go into the shelters? Do you have shelters ready?

YAHAV: Every -- every home has a shelter. And we have also public shelters. And all the shelters are fully prepared for a situation of this kind. But the situation is not that worse and bad that the people should go down to shelters.

The only request we have passed forward is that the people should stay at home, but nothing else. And, even, there's a big open-air concert next to the sea, and we didn't stop it.

UNIDENTIFIED FEMALE: Thank you very much.

(END VIDEO CLIP)

LIN: Did you hear that, Kyra? They have a concert by the sea tonight. It is not canceled. They are not specifically asking people to go to shelters -- the people of Haifa taking a stand against these rocket attacks.

PHILLIPS: Very much used to this way of life as well.

LIN: Afraid so.

PHILLIPS: Carol Lin, thanks.

The Israeli military promised a robust response to the kidnapping of two soldiers this week. Robust, it is.

CNN's Paula Hancocks is in Jerusalem. She joins us now with that part of the story -- Paula.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Kyra.

Well, we have seen some very harsh and severe responses to that Hezbollah attack. That's exactly what the Israeli prime minister, Ehud Olmert, had threatened. We have seen a lot of attacks, airstrikes. As you say, in the past hour, we have seen a second airstrike on the Beirut airport itself.

And, also, we have just had confirmed from the Israeli military that Israeli aircraft have actually dropped leaflets onto a Beirut suburb, saying that people who are living in that particular suburb should stay away from Hezbollah offices -- so, obviously, an -- an obvious indication from the Israeli military that this escalation and violence will continue, that the military operations that they are carrying out will continue as well.

Now, the rhetoric had stepped up a notch just after those two rockets hit Haifa, the northern Israeli town. We heard from Shimon Peres, the deputy prime minister, condemning the attack. We also heard on Israeli television Ehud Barak, who is the former Israeli prime minister, who was actually in charge when Israel withdrew from Lebanon back in -- in May 2000, saying this was a serious escalation, and saying it was a very serious development, which would be reacted to.

We are hearing very similar rhetoric from a lot of different Israeli politicians -- Kyra.

PHILLIPS: All right, Paula Hancocks live from Jerusalem -- thanks, Paula.

What's happening in the Middle East today has been a long time in the making. Here's a "Fact Check."

(BEGIN VIDEOTAPE)

LIN (voice-over): Here's the map to the current Mideast crisis as it unfolds and how it began.

On Israel's southern tip is Gaza and its Hamas-led Palestinian Authority. North of Israel lies Lebanon, home to militant Hezbollah guerrillas.

On June 25, armed Palestinians stormed an Israeli army border post, killing two Israeli soldiers and kidnapping one, Corporal Gilad Shalit. Israel refused a Hamas-proposed prisoner swap for Shalit's return. Instead, Israeli Prime Minister Ehud Olmert responded by saying his government would use extreme measures to rescue the kidnapped soldier.

A two-week military offensive ensued, with Israel bombing infrastructure in Gaza, as well as Hamas targets.

Then, Wednesday, Hezbollah guerrillas attacked an Israeli military convoy on the Lebanon border, abducting two more soldiers. Eight Israeli troops were killed in the ambush and the fighting that followed. Israel says it held the Lebanese government responsible for the Hezbollah kidnapping and has begun a wide-ranging military offensive against Hezbollah and other targets in Lebanon.

(END VIDEOTAPE)

PHILLIPS: Well, the Middle East tensions are a tightrope for President Bush. He is in Germany with Chancellor Angela Merkel, before this weekend's G8 meeting. And he's supporting Israel's right to defend itself, while urging it not to jeopardize Lebanon's shaky democracy.

CNN's Chris Burns is traveling with the president.

Chris, what's the latest?

CHRIS BURNS, CNN CORRESPONDENT: Well, Kyra, President Bush wrapped up the day here in former communist Eastern Germany with a barbecue, carving up a wild boar with Angela Merkel, this being a very important day of bonding between the two leaders, as they look ahead to these crises.

Now, there's almost an emotional bond, really, between the two leaders. President Bush's father had a very important hand in helping to unify East and Western Germany -- Angela Merkel today specifically thanking the American people for that unification. The unification led to her coming into politics and becoming Germany's first woman chancellor and the first from the East. If there hadn't been that unification, she may still be the nuclear scientist that she was back then.

Now, the -- this bond was immediately put to the test with a news conference today, where both leaders did see eye-to-eye on a number of issues, including on the Middle East, in these tensions between Israel and the Hezbollah, and the attacks between the two, President Bush and Angela Merkel calling for restraint, for an end to these hostilities, President Bush warning Israel, in a veiled sort of way, that they should not destabilize a pro-Western government in Lebanon; it would be against their interests to -- to act too strongly -- to attack too strongly inside Lebanon.

And he also -- but he also placed, as well as Angela Merkel, placed the blame mainly on the Hezbollah for kidnapping two Israeli soldiers, as well as firing so many rockets into Israel -- Mr. Bush blaming Hezbollah for interrupting the Israeli-Palestinian peace process.

This is what he had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's really sad where people are willing to take innocent life in order to stop that progress. As a matter of fact, it's pathetic.

And, having said that, Israel has a right to defend herself. Every nation must defend herself against terrorist attacks and the killing of innocent life. That's just -- it's -- it's a necessary part of the 21st century.

(END VIDEO CLIP)

BURNS: On Iran's nuclear program, both leaders also saw eye-to- eye. They were both pressing Tehran to allow talks and this incentives plan by the Security Council, U.N. Security Council permanent five, plus Germany -- President Bush specifically saying that the -- Iran cannot think that they can let things wait -- can wait things out, that they are -- he says they are underestimating this coalition of countries that are pressing Iran, that they will -- that they do mean business, that they are, as he said -- they're not kidding around.

The leaders go on to the Russia G8 conference, this -- at the end of this week -- of course, again, a test of this bonding process, as the two leaders, along with Vladimir Putin and the others of the G8, face these issues of Iran, of North Korea's missiles, and so forth -- back to you, Kyra.

PHILLIPS: All right, Chris Burns, thanks so much.

Six years of relative quiet between Israel and Lebanon evaporated today. Israeli forces took out targets, airports, army bases, bridges, across Lebanon. The response from Lebanon may redefine the Middle East conflict as we know it.

CNN's Alessio Vinci in Beirut, where's it's after 9:00 p.m. right now.

Alessio, what's the latest word from there?

ALESSIO VINCI, CNN ROME BUREAU CHIEF: Hi, Kyra.

It's actually after 10:00 p.m., local time, here.

And we have developing some news. Israeli forces have attacked, for the second time today, Beirut's International Airport. They have attacked a fuel depot just there at International Airport -- Lebanese television showing one of the depots there ablaze, after this strike.

And another development here: Several local television stations, including the al-Manar television station, which is backed and supplied by the Hezbollah militia group, are denying -- are reporting that Hezbollah is denying that they have fired those two rockets at Haifa in northern Israel., this despite the fact that those same television networks, earlier today, were reporting that if Israel had attacked, as -- as it has said, southern suburbs of Beirut, a stronghold of Hezbollah, and where the Hezbollah leader is supposed to live and work, then, they would have retaliated with a strike against Haifa.

But, right now, the Hezbollah television station is denying that the Hezbollah group has fired those missiles.

And all this, of course, is taking its toll on civilian casualties as well, especially down in the south. More than 50 people have been killed, most all of them civilians. We understand that an entire family of 10 has been killed just in one Israeli strike.

Here in Beirut, the situation is extremely quiet in the streets. Usually, on a Thursday night like this, in the middle of the summer, you would have people in -- at bars, at cafes, open-air cafes. You have traffic jams. None of this is happening today in Beirut.

I think the people here are beginning to feel and to fear that, perhaps, the bad old days are coming back -- Kyra, back to you.

PHILLIPS: Alessio Vinci, thanks so much.

Well, another look at the two-front, three-party fighting under way in the Middle East.

I am joined from New York by Martin Indyk. He is a former U.S. ambassador to Israel.

Mr. Ambassador, thanks for being with us.

What's your take? How bad do you think this can get?

MARTIN INDYK, DIRECTOR, SABAN CENTER FOR MIDDLE EAST POLICY AT BROOKINGS INSTITUTION: Oh, I think it will get a lot worse in the next week or so.

What we have is a situation of -- of escalating violence. That's obvious. But Hamas -- excuse me -- Hezbollah is making clear that, for every time that Israel hits targets in Lebanon, it's going to hit targets in Israel, deeper and deeper into Israel, now hitting one of Israel's major cities.

And I think the Israelis are now mobilizing their forces to move into Lebanon to try to at least rid southern Lebanon of Hezbollah forces and Hezbollah rockets. And, when that happens, presumably, Hezbollah will -- will unleash another barrage. They have thousands of rockets supplied by Iran. And, so, I suspect that, for the time being, until there's some major diplomatic intervention, things are going to continue to escalate.

PHILLIPS: Well, let's talk about that diplomatic intervention -- Pentagon sources now saying the military considering going into Lebanon, evacuating all American citizens. Do you think the U.S. should be doing more than that?

INDYK: Well, yes, the United States needs to be preparing now for a diplomatic intervention. You announced a little earlier that Lebanon was seeking U.N. Security Council action.

When the time is ripe -- and one has to be careful about not intervening too soon -- but -- but, when the opportunity is there, probably through a Security Council meeting, it will be important for Washington to reinvoke U.N. Security Council Resolution 1559, which called, at the time, not only for the removal of Syrian troops from Lebanon, something which happened, but also for the extension of Lebanese armed forces to southern Lebanon, and the disarmament of Hezbollah.

The Security Council is on record calling for the disarmament of Hezbollah and the movement of the Lebanese army south. If that had happened, and if the United States had gotten behind that resolution some 12 months ago, then perhaps we wouldn't be seeing this situation now.

PHILLIPS: Well, and -- and we are seeing this situation now. And -- and, Mr. Ambassador, let's have a reality check. I mean, you are talking about diplomatic intervention, but you're also talking about Israeli soldiers that have been kidnapped. No one has heard from these individuals. Are they safe? Are they not safe?

You have got two battles going on, one in Gaza, one on the Israeli-Lebanese border. People are being shot at. Targets are being blown up. Airports are being blown up.

I mean, how -- how -- how do you actually implement a diplomatic intervention, when you have got all-out chaos going on minute by minute right now on two different fronts?

INDYK: Well, you have two governments, the Israeli government and the government of Lebanon, that will have to exercise responsibility in this situation.

Somebody has to bring Hezbollah under control. The Lebanese government isn't capable of doing that, partly because Lebanese cabinet members happen to be Hezbollah members. And, so, Israel is now applying military pressure to try to create those circumstances in which it then becomes possible for the Lebanese government to somehow rein in Hezbollah.

If that doesn't happen, we don't have the ability to get Syria to do it, as we used to do, because the Syrians have left. And they -- they are washing their hands of it. So, the critical issue here is who is going to rein in Hezbollah.

I think that the Israelis are going to try to do it on the ground. And that's why we are going to see an escalation. And, then, we have to see whether it's possible for a diplomatic intervention, that -- that bolstering the Lebanese government will actually bring that under control.

That's not going to happen any time soon. As I said, there's likely to be an escalation in the situation.

PHILLIPS: How do you get diplomatic with an organization that's deemed a terrorist organization by Israel and the United States? Israel and the United States don't negotiate or have diplomatic relationships with terrorist organizations.

INDYK: That is correct. And -- and that -- it's not only that problem. But the bigger problem is that Hezbollah started this, provoked this, because they want a confrontation.

And, so, how do -- how do you persuade them that it's not in their interests to continue such a confrontation? That's where, unfortunately, military means have to come in. After that, it's a question of using the Lebanese government, which is supposed to be sovereign in Lebanon, hopefully with the support of the Lebanese people, to tell Hezbollah that they should stop doing these things, which is costing Lebanon very dearly.

PHILLIPS: I am sure you saw it, Mr. Ambassador, but "The New York Times"' editorial today, very interesting piece, op-ed piece, just a part of it saying, "The repeated lesson of recent history is that inflicting pain and humiliation on Arab civilians does not make them angry at the terrorists who provoked the violence. It makes them angrier at Israel."

You agree with that?

INDYK: Yes. As a general principle, that's -- that's what has happened in the past. And it's certainly happened in Gaza, when the Israelis took out the power plant down there, in the hope that -- that the Palestinians there would turn against Hamas. It actually increased Hamas' popularity.

But Lebanon is a little different situation. I keep on coming back to this U.N. resolution, because it's important, in terms of international legitimacy. Hezbollah was told that it had to disarm. The Lebanese government has been unable to implement that.

In these circumstances, where Lebanon is paying a very high price for Hezbollah's aggressive actions, which the Lebanese government has already said it had nothing to do with, it may be possible, in these circumstances, that the Lebanese will say, why is Hezbollah doing this? After all, Israel withdrew from Lebanon six years ago. It doesn't have -- there's no issue there, territorial issue. There's no occupation there.

It's all about Hezbollah wanting to stir up the pot.

PHILLIPS: Former U.S. Ambassador to Israel Martin Indyk, sure appreciate your time, sir.

INDYK: Thank you.

Who is Hezbollah? A closer look now at the group of the center of the Israeli-Lebanese flare-up -- our live coverage continues.

(COMMERCIAL BREAK)

PHILLIPS: Well, a major escalation in a Mideast already on edge.

Here's what we know at this point. Israel says two Hezbollah rockets have slammed into the port city of Haifa. There are no reports of injuries at this point, but Israel's ambassador to the U.S. calls it a major, major escalation of the crisis.

Israel's -- Israelis, rather, are responding. Hundreds of targets have been struck inside Lebanon, including the Beirut airport, twice. The latest attack on the airport came within the past hour from Israeli helicopter gunships. Lebanon wants the United Nations to act. An urgent meeting of the Security Council is scheduled for tomorrow.

Senior Pentagon correspondent Jamie McIntyre watching developments at the Pentagon.

Jamie, we had reported earlier that Pentagon sources were saying that they were considering evacuating Americans out of Lebanon. Is that still the case, or has that died out?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, that might be overstating it slightly.

What they are considering is how they would evacuate Americans, should it come to that. But, at this point, there are no plans to try to evacuate the some 25,000 Americans in Lebanon from that country.

What is going on is what, as you would expect, is prudent planning for every eventuality that could develop in the coming days. And, of course, if you were looking at the idea of evacuating Americans from Lebanon, it's complicated now by the fact, as we can see from the -- the burning wreckage, that the Beirut International Airport has essentially been taken out of commission.

Normally, when the U.S. removes citizens from another country because of civil strife or war, it's done by chartering aircraft, and -- and having them come, and simply fly them out. That's the preferred way to do it. In this case, obviously, they -- if they were going to do an evacuation, they would probably have to bring some ships in the area.

That's complication number two, because, at the moment, there are no U.S. military ships in the Mediterranean. The closest ships are -- are the ships of Amphibious Ready Group Iwo Jima, which are in the Red Sea and en route to the Persian Gulf for duty associated in Iraq -- again, no decision to turn any ships around or move any assets to conduct what is called a noncombatant evacuation operation in Pentagon -- in Pentagon jargon.

Again, though, planning is going on, in the event they would have to evacuate somebody in the -- in the future.

One thing they did do, the U.S. Navy did pull a -- an unarmed ship out of the port of Haifa that was there for an exercise. This is a small oceangoing tugboat called the USNS Apache. It was there for exercises that involved practicing salvage runs -- again, unarmed. And it has put out -- it was put out to sea earlier today, as a precautionary measure, well before those -- those long-range rockets hit from Lebanon in the port of Haifa. So, it's safely out of the line of fire as well -- again, a precautionary move.

But, at this point, the only thing that is going on is some -- some prudent planning for possible future eventualities. But there's been no request for any evacuation. And it's not under active consideration at the moment.

PHILLIPS: Jamie McIntyre...

MCINTYRE: Kyra.

PHILLIPS: ... thank you.

More now on Hezbollah, the group at the center of the Israeli- Lebanese flare-up.

(BEGIN VIDEOTAPE)

DARYN KAGAN, CNN ANCHOR (voice-over): 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 terrorists.

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: Let's get straight to Carol Lin, working more on our developing and top story today -- Carol.

LIN: That's right.

Actually, Kyra, a -- a new development on a different kind of terror case -- CNN has confirmed that there is a -- an order by a federal judge that allows terror suspect Jose Padilla to actually view classified government records on his case. He is going to trial in September on charges of conspiracy and providing material support to Islamic extremist groups.

He has been held as an enemy combatant, until there was a lawsuit. And, then, now he has been officially charged in Miami in a criminal -- in this criminal case. Well, apparently, he now has the right, under tight security, to see these classified documents and tapes about his three-and-a-half years in DOD custody, when he was held as an enemy combatant.

That means he gets to see some 32 DOD documents on his statements while in military custody, as well as videotape made of him during interrogations.

So, the justice system at work, Kyra -- Jose Padilla gets to view top-secret government documents on himself, so that he can prepare his defense.

PHILLIPS: All right, Carol, thank you.

LIN: All right.

PHILLIPS: Well, how is the crisis in the Middle East affecting oil prices? And how will it impact you?

A live report from the New York Stock Exchange, as we take a look at the recent numbers right now, Dow industrials down about 168 points.

We will be right back.

(COMMERCIAL BREAK)

PHILLIPS: All these ongoing battles over in the Middle East -- these are re -- this is video that we just got in from the Beirut airport, as you know, if you have been watching CNN, the escalating violence on the Israeli-Lebanon border, also, still, the battle going on in Gaza between the -- Hamas and Israelis, and, then, of course, in -- here in Lebanon and Israel, Hezbollah and Israel going at it, airstrikes. The airport being taken out by Israeli air strikes and forces trying to shut down that airport. Israel saying that weapons come in and out of this airport, providing ammunition for Hezbollah, an extremist, a terrorist group called by the U.S. and Israel.

We are following all the action, of course, in both areas. And this is video just in of that airport that got struck by Israeli forces in the air, as we follow all the new video coming in of the airport and the runways that were blown out.

We are also continuing to stay in touch with our CNN U.N. correspondent Richard Roth, who is joining us with a developing story with regard to the United Nations and its response to all of this. A vote actually taking place with regard to Gaza right now, is that right Richard.

RICHARD ROTH, CNN U.N. CORRESPONDENT: Yes. Let's look at the Security Council. Right now there's a resolution on the table that the U.S. may veto, and we're going to watch and see. But it's hard to see. Let's see, there is, someone is abstaining. This is a resolution that has been cooking here for about a couple of weeks. The timing is very interesting in light of the Lebanon violence.

This one is the Palestinians were demanding that Israel stop its Gaza offensive and they did tried to balance the resolution so that it would take into consideration the abducted Israeli soldiers. There was a veto. I'm betting it's the United States, though we asked the United Nations television to show us who was voting against. You couldn't really see in the wide shot. Ambassador Bolton was giving all kinds of indications that it would be something that the U.S. did not think was necessary at this time, Kyra, this resolution was not needed.

So we had ten in favor, one against and several abstentions, so this resolution does not go forward, despite attempts to placate Washington by balancing the resolution with criticism of rocket attacks on Israel and calling for the release of the prisoner currently held. It's wasn't enough for Washington to let this resolution pass. If you would like, we can listen to Ambassador John Bolton of the U.S. explaining his veto. JOHN BOLTON, U.S. AMBASSADOR TO U.N.: In light of the fluid and volatile nature of the events on the ground. The United States believes that this draft resolution was not only untimely but already outmoded. We have just recently witnessed a major escalation by Hezbollah.

On top of that, we have the announcement that the secretary- general will be sending a team to the region to help resolve the situation. These important new developments should be reflected in any text we consider.

Not withstanding these new developments, there were many other reasons to reject draft. The draft resolution before the council was unbalanced. It placed demands on one side in the Middle East conflict but not the other. This draft resolution would have exacerbated tensions in the region and would have undermined our vision of two Democratic states, Israel and Palestine, living side by side in peace and security. Passage would also have undermined the credibility of ...

ROTH: This is Ambassador John Bolton explaining why the U.S. vetoed, that it would not have helped in the region at this time. It would have inflamed the region, and it is not the United States' vision, so the U.S. blocking a resolution that would have criticized Israel and called for a halt to an offense in Gaza, though the resolution did call for the release of an Israeli prisoner and try to be more balanced. It wasn't enough for the United States. Back to you, Kyra.

PHILLIPS: So Richard let's talk for a minute about these votes and vetoes and these various resolutions. I had a chance to talk with former U.S. ambassador to Israel Martin Indyk, who was saying, if you look at the situation, obviously they're talking about Gaza here, but if we look at the ongoing battle that is taking place in Lebanon, the Israeli-Lebanese situation, he was saying look, there have been a number of prior resolutions where Hezbollah was supposed to disarm and they didn't disarm, so I guess what I'm asking you Richard is how effective are these resolutions? It doesn't look like necessarily that everybody does comply.

ROTH: That is correct. It does takes time. Israel is at wits end here saying listen, we pulled out of Lebanon and we didn't get the proper protection, in effect, based upon these resolutions, Hezbollah still was allowed by the Lebanese authorities to fire rockets and to cross borders. Thus Israel has never been a big fan of the United Nations.

Sometimes resolutions take years to work because they are on the books and the diplomats and peacemakers know what to follow. It does take time. It's a laborious process. There may be a resolution on the Lebanon situation. First there's an emergency debate, scheduled for tomorrow morning, here in New York.

PHILLIPS: All right, we will be talking about that debate, obviously tomorrow. Richard Roth, thanks so much . All right let's get back to Carol Lin continuing to work a number of developing stories for us. Don't know if it's in the Middle East or another story, a lot happening. I am being told a different developing story, Carol. You've got your hands full today.

LIN: Try Washington, D.C., Kyra. Valerie Plame, the former CIA officer, whose identity was leaked to reporters is now suing vice president Dick Cheney, his former top aid, presidential adviser Karl Rove, accusing them and other White House officials of conspiring to destroy her career. She was a CIA operative, her identity closely kept as she was used in recruiting tactics for the CIA. Had to quit her job after her identity was revealed.

Now, in a lawsuit filed in U.S. District Court, Valerie Plame and her husband, Joseph Wilson, a former U.S. ambassador, accuse Cheney and Rove and Scooter Libby of revealing her identity and seeking revenge against Wilson for criticizing the Bush administration's motives in Iraq. So, we thought that you would find that pretty interesting as this is not the last we have heard from the CIA operative. You know, a woman whose identity was kept secret is now going to be playing out the drama in a federal court.

PHILLIPS: And we'll be it all, no doubt. Carol Lin, thanks a lot. We will take a quick break. More LIVE FROM straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: A major escalation in a Middle East already on edge. Here's what we now right now. Israel says two Hezbollah rockets have slammed into the port city of Haifa. There are no reports of injuries, but Israel's ambassador to the U.S. calls it a major, major escalation of the crisis.

Israelis are responding. Hundreds of targets have been struck inside Lebanon, including the Beirut Airport, twice. The latest attack on the airport came within the past hour from Israeli helicopter gunships. Now Lebanon wants the United Nations to acts. An urgent meeting of the Security Counsel is scheduled for tomorrow.

Well, we've been keeping an eye on how rising tensions in the Middle East are affecting oil prices. Let's get back to Susan Lisovicz live from the New York Stock Exchange for more on the latest story, and I know it's probably not good new.

(STOCK MARKET REPORT)

PHILLIPS: All right. Well, let's talk about the other breaking news out of New Jersey. What's the latest with the Vioxx trial going on there?

SUSAN LISOVICZ, CNN ANCHOR: Crucial win for Merck, the big pharmaceutical company, Kyra, a jury finding Merck not liable for the heart attack of a 68-year-old New Jersey woman. It said that although Merck failed to warn the plaintiff of heart risks associated with Vioxx, it did adequately warn her doctor.

The jury also found that Merck did not commit consumer fraud in marketing the drug. Merck pulled Vioxx from the market in September of 2004 after it was linked to increased risks of heart attacks and strokes. Merck is facing thousands of lawsuits related to Vioxx, and has decided to fight each one individually.

This is only the seventh. So far Merck has won four, lost three, but the losses have been costly. The widow of one plaintiff was awarded $253 million, even though that's likely to be knocked down. And that's the latest from Wall Street. I will be back at the end of the trading session. I have to take a breath, Kyra.

PHILLIPS: It's been quite a boondoggle today. Boy, I'll tell you what, it's been a long day. A lot of stuff going on. You've been doing a great job.

(CROSSTALK)

PHILLIPS: Thanks, Susan.

Well, tears, fears, and questions. The latest on the aftermath of those train attacks in Mumbai. We'll be talking about that straight ahead as well.

(COMMERCIAL BREAK)

PHILLIPS: Confusion over the culprits. Despite some other media reports, Indian police tell CNN they have not released the names or photos of any suspects in Tuesday's commuter train bombings. We are being told that the sketches released earlier today were of two suspects connected to an earlier arms case the police have been investigating.

Now, CNN's Mallika Kapur brings us the latest on the intense hunt for the train bombers -- Mallika.

MALLIKA KAPUR, CNN CORRESPONDENT: Hi, Kyra. Well, you've pretty much summed up the latest news that we have that police officials and the chief of the anti-terrorism squad here in Mumbai has confirmed to CNN that the news that the local media were reporting and the photograph that local media was showing of two people they say are suspects in connection with Tuesday's bombing are actually not people involved in Tuesday's bombing, and the anti-terrorism chief in Mumbai has confirmed that to CNN.

Now, we have had some other developments in the investigation into Tuesday's bombings today, and police officials have confirmed to CNN that around 400 people in the city of Mumbai have been detained for questioning.

Now, let me remind you that there has been no official claim of responsibility yet, over Tuesday's bombing, but the suspicion has largely fallen on one particular group, and that particular group is called Lashkar-e-Tayyiba, and that is an Islamist group based in Kashmir which is a separatist group that is fighting New Delhi's rule in the disputed Kashmir region.

Now, the reason analysts believe this group is behind Tuesday's attacks is because it's the only group in the region which has such a wide reaching grasp. It's the only group with the finances and the resources to carry out such a sophisticated attack.

The group itself has actually come out and said that it condemns the attacks, and it's trying to distance itself from Tuesday's bombings, but several analysts over here are pointing their fingers at this Lashkar-e-Tayyiba.

Police investigators today have confirmed the investigation is ongoing. They have not made any official announcement saying who they think is behind Tuesday's blasts, but they say they do hope to have some more information on that very soon -- Kyra.

PHILLIPS: All right, Mallika Kapur, appreciate the update.

And we're continuing to watch developments in the Middle East as well. Carol Lin, what's the latest?

CAROL LIN, CNN ANCHOR: Kyra, I just got an e-mail from one of our military analysts, Don Shepperd, Major General Don Shepperd. He makes some interesting observations in looking at some of the videotape that we've been showing people.

In fact, I want to bring you the latest out of the Beirut International Airport. What you are looking at is a gas tank fire. We have confirmed in the last half hour or so that these gas tanks -- it's the second airstrike against the Beirut International Airport and that these gas tanks were the latest target in the last hour-and-a- half.

Now, what Don is saying is that it's very likely that Hezbollah is getting its missile support coming from Iran through Syria and through Lebanese ports and airports, one of the reasons why you are seeing the Israelis targeting the major airport there.

And he also noticed in earlier videotape, the cratering of what he called the runways which were taken out. He says that, yes, it's to prevent airplanes from taking off, further isolating Hezbollah, but also it's not preventing smaller aircraft, like a C-130-type aircraft he said, that Israel has a lot of C-130s, potentially preparing to secure that airport and use it in some manner.

Don also confirms that, you know, in terms of Israel calling on Lebanon to mobilize its army to go to the southern part of Lebanon to control Hezbollah, that's a no-go. That's not going to happen. The Lebanese government has no control over this militant organization, so one of our military analysts shooting off his e-mail with some interesting observations as we are watching this videotape coming in out of the region.

PHILLIPS: All right, Carol, we will continue to follow, obviously, the live pictures coming out of the Middle East as you bring us up to date. Great insight from retired Major General Don Shepperd.

Well, we're covering all the angles in the Middle East crisis. We have reporters in Beirut, Lebanon, on the Lebanese-Israel border and in Jerusalem. We also have more on that developing story, Valerie Plame now says she's going to sue the vice president and a number of White House aides. We'll tell you more about that after the break.

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PHILLIPS: If you've been watching CNN, we just told you about a developing story. We are getting word that former CIA agent Valerie Plame Wilson and her husband, former ambassador Joseph Wilson, have filed suit in federal court against Vice President Dick Cheney, his former chief of staff, Lewis Scooter Libby, top presidential adviser Karl Rove and other unnamed senior White House officials, for their role in the public disclosure of her classified CIA status. Senior legal analyst Jeffrey Toobin joining us by phone now. Well, she's aiming high, that's for sure, Jeffrey, the vice president, Karl Rove, Scooter Libby and a number of other White House insiders.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Right, Kyra. I have just been reading the 23-page complaint of the Wilsons against Cheney and company, and frankly, I think that this is an extreme long shot, this lawsuit. Public officials have almost total immunity for action they take in the course of their duties, and I think it's very likely that this case will fall into that category as well.

PHILLIPS: Well, as you look through the paperwork, what was the first thing that hit you with regard to why you think this is a long shot?

TOOBIN: Well, the first question I had, well, suing for what? I mean, what is the tort that they claim took place? And the first cause of action, the first claim in this lawsuit is that Cheney and company violated their first amendment right. Well, that's not an ordinary mode of recovery in a lawsuit. That's not something that people usually get damages for. I think it's just indicative of the fact that basically what they are trying to do is take a, what has become a political dispute and turn it into a criminal case, a civil case for damages. And that rarely works.

PHILLIPS: Well the suit accuses the defendants of violating the Wilson's constitutional and other legal rights as a result of a, quote, conspiracy among current and former high-level officials in the White House to, quote, discredit, punish and seek revenge against Mr. Wilson for publicly disputing statements made by President Bush in 2003, his state of the union address, justifying the war in Iraq. So, it's interesting that you say, as you look through this, and if you read what the suit accuses the defendants of violating, it sounds like a personal political dispute versus what you are saying, is something really credible, to go after something financially?

TOOBIN: Right, in the first place, it is very hard to get damages against a government official. And here, you know, what you had was a dispute over what, whether the president had been accurate in his characterization of Saddam Hussein's effort to get weapons of mass destruction. He said something in the state of the union address. Ambassador Wilson said the president was wrong. The administration responded to that. That's the normal political give-and-take that is not the subject of lawsuits. The one thing that the Wilsons have going for them is that Valerie Wilson's undercover status was disclosed. That was a real damage to her. That's their best argument. But whether that is some sort of tort that a court will award damages for, all I can say is if it was, it will be the first time I ever heard of anyone getting damages for it.

PHILLIPS: Alright Jeffrey Toobin, thanks so much, we have some developing news happening. Carol Lin in the news room with it.

LIN: Kyra, we have been covering a lot of different topics today.

PHILLIPS: I know, sorry.

LIN: Oh, don't be sorry, it's a big news day. But this just came in over the wires and we have confirmed it, that actor Red Buttons, Oscar winning comedic legend has died at the age of 87. He passed away in his Century City home after battling a vascular disease. You might remember that back in 1958 Red Buttons won a best supporting actor for "Sayonara" and a Golden Globe for best supporting actor there, and was also in "The Poseidon Adventure," more modern day times reference, but dead at the age of 87.

PHILLIPS: Tell you what, he lead a pretty amazing life Carol.

LIN: Remarkable.

PHILLIPS: Alright, we will take a quick break. More on the Middle East crisis and the impact it's having on the markets. Stay with us.

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PHILLIPS: Closing bell about to ring, Susan Lisovicz, I'll see you tomorrow.

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