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Congress Debates Stem Cell Research; Americans Evacuate Beirut on Cruise Ship; Refugees Pour Into Syria; Cyprus Welcomes Western Evacuees from Lebanon

Aired July 19, 2006 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Hello, everyone. I'm Kyra Phillips at the CNN world headquarters in Atlanta.
Headed home. Evacuees reunite with families after days of anguish in the Middle East. Now, the next level of frustration, the price of the journey.

The ground war in Lebanon. Israeli troops move in. What happens next?

And a first at the White House. President Bush prepares to use his veto power for the very first time. What is the controversy over stem cells?

LIVE FROM starts right now.

Attacking from the air, fighting on the ground, evacuating by sea. The Mideast crisis enters its second week. Here's what we know what now. Hezbollah sends a new barrage of rockets into Northern Israel, killing two children in Nazareth. It's the furthest south that Israeli casualties have been reported.

Israeli warplanes again hit Beirut's airport, a frequent target. Meantime, Israeli ground troops cross into Southern Lebanon and tangled with Hezbollah fighters. Two Israeli soldiers were killed.

Today saw the biggest evacuation of Americans so far. The cruise ship Orient Queen is heading from Beirut to Cyprus with about 1,000 U.S. and British citizens. More ships, civilian and military, are on the way.

CNN has reporters across the region to bring you the latest on the fighting and the evacuating. We've got live reports straight ahead.

Let's get right to CNN's Carol Lin in the newsroom with new developments on the diplomatic efforts.

Hey, Carol.

CAROL LIN, CNN ANCHOR: Hi, there, Kyra.

Well, it looks like Condoleezza Rice won't be going to the Middle East any time soon, until the so-called conditions improve there. This word out of the White House. But we did hear a short time ago from the State Department spokesperson that Condoleezza Rice may be going to the United Nations as early as tomorrow.

(BEGIN VIDEO CLIP_

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: Secretary will go up Thursday night for dinner with Secretary-General Kofi Annan. She'll stay the night in New York. In the morning, on Friday, she'll have a briefing, along with Secretary-General Annan, from the U.N. team that will have just returned from the region, to hear what it is that they were hearing in the region, hear their thoughts about the way forward. She'll integrate what she hears into her thinking about the diplomatic way forward. And so that's one travel update for you, Barry, nothing beyond that.

(END VIDEO CLIP)

LIN: Kyra, so far, Washington remains opposed to a cease-fire, which the U.S. ambassador to the United Nations, John Bolton, said would be a simplistic solution.

Now Kyra, all this hour, and throughout your program, we are going to be hearing from viewers not only here in the United States but from around the world and inside Lebanon and Israel as to what's happening to them. What are their thoughts? What are they seeing? And anything that we get, we're going to bring it to you this hour.

Also, Kyra, we're waiting for all these images from various different networks. We're monitoring Israeli television, Hezbollah TV. Now Hezbollah TV, you rarely -- you never see it here in the United States, because it has been banned by the United States, as well as the European Union as a promoter for a terrorist organization. But we are monitoring these images, because we are seeing things that you would not normally be able to see from the ground level on up.

So pictures from around the Middle East region, as we follow this conflict for you right here on LIVE FROM.

PHILLIPS: All right, great, Carol, we'll keep checking in with you throughout the day. Appreciate it.

Battles on the border in Lebanon. And Israeli missiles return to a frequent target. CNN's Alessio Vinci joins me now from Beirut -- Alessio.

ALESSIO VINCI, CNN CORRESPONDENT: Hello, Kyra.

About 1,000 Americans began boarding earlier today about midday, this beautiful cruise ship that arrived last night here at the port of Beirut. And I can tell you that on board that ship today there was a great feeling of joy and relief as these people boarded there. The Americans really organized perhaps a bit late. But everything was really right on spot.

The cruise ship looked like a piece of America docked here in Beirut. There was an open buffet. There was a bar. There was a pool where kids were jumping in it, clearly intending to continue this vacation that was abruptly interrupted by war. So certainly there, a feeling of happiness after many days of ordeal.

Not many stories there of people really feeling that they actually escaped war. There was really a sense that the worst was behind them.

The U.S. ambassador to Lebanon had toured the boat there, shaking hands with many of the people who had been complaining for the delays and for the little information that they were getting from the American embassy, U.S. ambassador telling us that the embassy had to field about 500 phone calls an hour at some point, and so the small staff at the embassy was really struggling.

But he also said there were more ships on their way here to Beirut and that everybody would get out.

(BEGIN VIDEO CLIP)

JEFFREY D. FELTMAN, U.S. AMBASSADOR TO LEBANON: It really is a big logistical operation, because we've got thousands of people who have asked for our help in facilitating, and the top priority was security. How do you help people travel safely?

And today, we're helping more than 1,000 people travel safely. Tomorrow, it will be more. And we're going to keep this pace up until everyone who's asked our help in leaving Lebanon has a safe way to do so.

(END VIDEO CLIP)

VINCI: And, Kyra, among those who boarded, I met a family from Washington, D.C. She's a Lebanese-American; he's an American. They were at the international airport last week when it got first bombed, when the runway was bombed. They were about to board a plane, they said, to spend a whole week away from trouble, as they put it. And they were very much relieved.

She actually had left this country years ago when the civil war broke out here on a container ship. So she was quite happy that this time she had to leave on a luxury cruise liner.

And of course, all these people are leaving by ship simply because the international airport, as I said, is closed. And again, today it came under fire by the Israeli air forces, unclear, really what was hit there. But that is a frequent target of the Israeli -- of the Israeli air force as they're trying to block this country and the people within the Hezbollah movement from moving around.

Back to you, Kyra.

PHILLIPS: All right, Alessio Vinci, thanks so much. We'll be talking to you, of course, a lot more today.

Hundreds of Americans are finally out of Lebanon. Thousands more are going to follow. Our senior Pentagon correspondent, Jamie McIntyre, has the latest on what the U.S. military calls assisted departures. Hey, Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Kyra, the U.S. government may not have been the first to get large numbers of its citizens out. But they're insisting they're doing it the best way. I think you saw a little of evidence of that in Alessio's report there.

The capacity for taking Americans out is building up rapidly. They said today the capacity was just over 1,000. Basically, that was the cruise ship Orient Queen and some additional helicopter flights that took out another 100 or 120 or so Americans.

By tomorrow, they say, they'll be able to take out 2,000 or 3,000 in a single day. And by Friday, they say, the capacity to move people will be increased to about 4,000.

Part of that is because of the addition of U.S. warships to the mix. In fact, the next ship in we expect will be the USS Nashville, an amphibious assault ship that has on board, by the way, CNN's Barbara Starr, my colleague here at the Pentagon, will be getting a firsthand look at how things are going there. You can expect that the Americans on that massive warship will be well treated, as well.

Pentagon sources indicate that the ship may stay offshore and they may use amphibious landing craft to ferry people back and forth so that the ship doesn't actually have to pull up pier side.

The U.S. military considers, right now, this, a quote/unquote "permissive environment" for the commercial ships that are ferrying people back and forth. But a warship sends a little bit of a different signal, and they want to take every precaution possible to make sure that they've dealt with any threats in the area.

Of course, the -- there was an incident last week in which an Israeli warship was hit by an Iranian-made anti-ship missile that was apparently fired by Hezbollah. They don't expect that any U.S. ships will be targeted. But the ships do have anti-missile defenses. And they will be on full alert to make sure that they're able to deal with any threats -- Kyra.

PHILLIPS: All right, Jamie McIntyre, at the Pentagon, thanks so much.

Well, CNN's Aneesh Raman is in Syria, inside a refugee camp in Damascus, the capital.

Aneesh, tell us what's going on there.

ANEESH RAMAN, CNN CORRESPONDENT: Well, Kyra, it is a main stadium here in the capital that has now become, as you say, a place for refugees. Lebanese who have streamed across the border to try and find some semblance of calm.

I was at the border just a few hours ago, the main border crossing between Lebanon and Syria. It is a scene of just utter chaos. There's a backlog of traffic, cars racing across, people streaming across. NGOs are there, trying to greet the Lebanese who have come, trying to find them a placement here in Syria, either at hotels, at refugee camps, the stadium, or Syrian families who are opening their doors.

I traveled from the border with a Lebanese family of 11. The eldest was the 65-year-old grandmother. The youngest, the 3-year-old granddaughter. And they broke down as they detailed stories of horrific destruction back in Lebanon. They say they saw people trapped under rubble. They saw food and aid trucks that were inadvertently hit by the air strikes. They saw carcasses all around them. The 65-year-old grandmother broke down, telling me she had never seen anything as bad as this.

They held up a Lebanese note. That's about 50 cents U.S. That is all they had now as they make their way into Syria, into an uncertain future.

There is a keen (ph) anger among the Lebanese that I've met here and at the border. They say the world is not paying attention, is turning a blind eye to the suffering and the humanitarian efforts that aren't taking place within Lebanon. And specifically, they say that Arab voices and Arab help is needed, but it is missing -- Kyra.

PHILLIPS: Aneesh Raman reporting from Damascus for us with another side to what's happening in the Middle East. We'll continue to talk to you, as well, Aneesh.

It's a Mediterranean island and the popular haven when things go bad right in the Middle East. Cyprus is getting crowded, and it's about to get a lot more so.

Our Chris Burns is right there in the middle.

Hey, Chris.

CHRIS BURNS, CNN CORRESPONDENT: Hey, Chris.

You know, in the next couple of hours this huge wave is going to start -- might be biggest we'll ever see over the next few days. Some 7,000 or more evacuees coming on a string of ships, starting at -- in a couple of hours with the Swedish.

In fact, over my shoulder is a ferry boat that the Norwegians chartered and brought in this morning with some 1,000 people, including about 150 students from the American University in Beirut. One of the students there talking about how he was hearing the explosions from the Israeli air strikes from his dorm room, saying that it was very, very unsettling and he's glad to be out. A lot of stories like that.

And these other ships coming in starting with the Swedes in a couple hours. We've seen -- we'll see, of course, the U.S. ship, the Orient Queen, arriving early tomorrow morning. That's in just a few hours. The Danes, the French, the U.N., the Canadians, the Belgians, all sending ships over the next 12 hours here. So we're going to see a constant stream. Now, what do you do with them? Well, officials are insisting that they should be able to move most of them to the airport and get them out on charters or on commercial flights. But some of them will have to stay in hotels. And that's what people are scrambling for, to put them up. They might even have to put them in halls. They're exploring that right now, Kyra.

PHILLIPS: So, Chris, that was -- a number of us were asking the questions to how long will they stay on these military ships? Will they be able to live on these military ships? Or are these just being used to sort of transport people in and out and then they are on their own for the next stop or where they're going to stay?

BURNS: Well, in theory, the idea is that they will be brought -- now they will be taken off those ships because those ships are supposed to go back and pick up more. So some nine, I believe, nine naval ships that will be in that operation. So they will be unloaded very quickly.

And from this point, here, that they will be either put on planes or put in some kind of accommodation. That's -- that is the plan here, Kyra.

PHILLIPS: All right. We hear that hotels are filling up fast. Is that true? Is it pretty crazy there? Is it hard to get a hotel room?

BURNS: It's not easy. It's not easy. They're filling up very fast. The beaches too.

PHILLIPS: All right. Chris Burns in Cyprus. We'll check in with you on a regular basis, as well.

We're covering the crisis in the Middle East with all our correspondents around the region and the globe. Barbara Starr is on the USS Nashville. We're going to hear from her a little later on.

And I'll speak with the U.S. military's man in charge of the entire evacuation effort. Admiral Patrick Walsh joining us straight ahead.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): We didn't run because we were afraid but because we want to save our children. We're not afraid of death. We will die finally but we come here for our children's sake.

UNIDENTIFIED MALE (through translator): The situation is very bad. God bless Syria for receiving us here. We are a refugee nation, and the Arab world is doing nothing for Lebanon.

(COMMERCIAL BREAK)

PHILLIPS: We've been talking so much about the evacuations taking place in the Middle East, but we can't forget that there's an ongoing battle between Israeli forces and Hezbollah guerrillas. We've got a developing story now, I'm told, out of Matula in Northern Israel. That's where our Paula Newton joins us via telephone right now.

Paula, tell us exactly where you are and what you're seeing.

PAULA NEWTON, CNN CORRESPONDENT: Well, we are on the Israeli/Lebanese border. We're less than a mile away from the border, just outside the town of Matula. I can see, it's just a few hundred feet from me, really.

And we tried to enter the town. As we were approaching, we saw their or four of incoming, not exactly sure what it was. We saw flashes. Then the Israeli army stopped us.

And shortly thereafter, say about 70 to 80 Special Forces, Israeli Special Forces backed up by communications and some helicopters in the air have now gone into the town.

We understand possibly -- but CNN cannot confirm this, that Hezbollah militants have entered the town or perhaps are on the outskirts of the town. What's going on right now is a Special Forces have launched an operation on the outskirts of the town. And we stress again, we are very, very close to the Lebanese border. I've seen it a million times today. It's just a few dozen feet away from this town.

Essentially, towns are in spitting distance of each other. And so they are on the outskirts of this town, that skirts along the Lebanese town. And they are now active in some type of Special Forces operation.

The Israeli army here on the ground won't confirm anything to us. But what we saw with our own eyes, of course, is we can -- we are asking people as they were going in and they felt that they don't know how many, they don't know for how long, but they felt that Hezbollah had, in fact, infiltrated the Israeli border. That's about all that we know right now -- Kyra.

PHILLIPS: Paula, do you get the sense that -- we've been talking within the past couple of days, a lot of the politicians, inside the country, outside the country, saying they were fearing this was going to get worse, it was going to get bigger.

We're now -- you're now reporting about Hezbollah, troops on the ground. We've also reported that Israeli troops on the ground moving into certain areas. What we saw at the beginning were rocket launches and an air war going on pretty much. Now we're hearing more about troops on the ground on both sides.

Do you get the sense that that's telling you it's getting more intense, that it's getting bigger, to where this is a battle not only in the air but also on the ground?

NEWTON: I have to say things have been building up all day, Kyra. By the hour here on the ground we could feel things getting worse. And it started with just the number of Katyushas flying into northern Israel. They flew all around us today. But, more importantly, they flew into civilian areas and actually caused more casualties today.

Even when I called the Israeli Defense Forces a couple of hours ago, they really -- on the phone they expressed certainly concern. And really pointed out at that point it wasn't even nightfall yet and 130 Katyushas have already landed in Northern Israel. It really was an (UNINTELLIGIBLE) day for that.

I think what's been frustrating for the army is that they continue to tell us that they've probably wiped out 50 percent of Hezbollah's capability, and yet there are people here, in Israel. Just continues to get worse.

Not to mention the Lebanese people on the other side, on the artillery battlefield that we were on for most of the day. It was running fast and furious with the shelling. And many times, the Israeli government tells us again and again that they try to avoid civilian casualties. But you know on the incoming that there were civilians under some of those shells, as we heard from CNN's Cal Perry on the other side.

It has been especially intense today, Kyra. And the infiltration here -- we did a little driving around the border area here. And certainly there are pockets where Hezbollah can and has obviously infiltrated.

I want to stress, again, though, that what has been said to us we cannot confirm at all. We tried to call, certainly, Israeli defense headquarters, and they are refusing to say anything. We do, though, because we've seen it with our own eyes -- we do know that this special operation is under way and they are looking for guerrilla fighters right now just in this Israeli town of Matula.

PHILLIPS: All right. CNN's Paula Newton, thank you so much for that, Paula.

She's in Northern Israel, just outside of that little town of Matula. We'll continue to talk with her as she's witnessing more ground troops. And as she said, Israeli special operations forces moving in on what they believe are pockets of Hezbollah guerrillas.

Well, Southern Lebanon is the Hezbollah heartland and a familiar Middle Eastern battleground.

Our Karl Penhaul is there.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): We take detours along dirt tracks to avoid bombed-out sections of the coastal highway. Most of the traffic's leaving the southern port city of Tyre, escaping the constant bombardment from Israel, less than 10 miles away.

This poster of Hezbollah leader Hassan Nasrallah looms large at the approach to the city. Another billboard, adorned with Hezbollah militia fighters, reads, "We stay and fight."

A Lebanese army soldier emerges from a side street and points out an underground parking lot that's now an improvised bomb shelter for a handful of Tyre's frightened residents.

"All this for two Israeli rats," this woman says, referring to a week of bombing raids by Israeli jets after Hezbollah captured two Israeli soldiers.

Mohammed Saidel (ph) says he and eight family members evacuated their home near Lebanon's border with Israel. He says he admires Hezbollah's grit.

UNIDENTIFIED MALE: Every member needs Hezbollah, every member. Every member. But we need peace -- we need, of course, peace, for this -- for this country. But not over our dignity.

PENHAUL: Residents say Tyre was pounded by Israel for most of Tuesday.

(on camera) This is Tyre's Al-Afar (ph) neighborhood. It was here, residents say, that about 4 p.m. on Sunday Israeli warplanes struck these buildings.

(voice-over) An apartment block wrecked. Cars crushed.

UNIDENTIFIED MALE: It is ruins.

PENHAUL: It's here I find Dr. Abdul Hussein Shafar picking his way through the rubble. He tells me at least 22 people were killed and 15 others were wounded. He says all were civilians.

DR. ABDUL HUSSEIN SHAFAR, LEBANESE DOCTOR: No military, no position or Hezbollah or any other party.

PENHAUL: As we speak, an Israeli jet buzzes over and unleashes another bomb in the distance.

SHAFAR: It's good.

PENHAUL: We heard seven explosions in our first five hours here.

A few yards from his home, 150 United Nations soldiers arrived a few hours ago to guard a resort hotel. It's become a refuge center for around 300 civilians hoping to be evacuated.

Halfik Kanan (ph) and his family suffered days of fear.

UNIDENTIFIED MALE: They destroyed complete families, children. They don't allow people to take them out of the ruins.

PENHAUL: As dusk falls, French Army Major Eric Minoli gives fresh orders to the United Nations contingent he commands. He's sickened over what he's seen over the last few days.

"The people are clearly terrorized. Many Lebanese are fleeing north. As a Frenchman and as a United Nations soldier, I hope the diplomats work out a cease-fire," he says.

Tonight, Minoli and his men will do their best to protect civilians desperate for sanctuary. Tomorrow, his challenge will be to shuttle them out of range of the heaviest fighting.

Karl Penhaul, CNN, Tyre, Lebanon.

(END VIDEOTAPE)

PHILLIPS: We're going to get an update on the evacuation efforts and read some of the messages we've been getting from Americans and others in the Middle East.

Plus, a check of the markets. A new Fed chairman spoke today. The reaction is a little different than the last time he made his public comments. Live from Wall Street, coming up next.

(COMMERCIAL BREAK)

PHILLIPS: Here's something we haven't been able to say for a little while. It's shaping up to be a very good day on Wall Street.

Susan Lisovicz live from the New York Stock Exchange to tell us what's behind that rally -- Susan.

(STOCK REPORT)

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