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British Authorities Arrest New Suspect in Airline Terror Plot; Minister's Wife Accused of Murder Makes Bond; Lebanese Refugees Return Home

Aired August 15, 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: It's the top of the hour.
We're talking about another suspect in the British airline terror plot is in the hands of Scotland Yard today.

CNN's Dan Rivers has the details from London -- Dan.

DAN RIVERS, CNN CORRESPONDENT: Well, the arrest was made at 12:55, local time, here in the United Kingdom in the Thames Valley area of Britain, some 30, 40 miles to the west of London, comes as the police are continuing their in-depth forensic searches of a number of addresses in London, in Birmingham and in High Wycombe.

Sources have told me, though, they are not treating this latest arrest as a major person. Clearly, though, they are chasing down every lead, every bit of information that they come on in these houses. And that has, I understand, resulted from -- from some of these searches.

But they are not treating as a -- as a major development, from -- from what I have gathered.

In Pakistan, though, they are still awaiting the extradition of a man, Rashid Rauf, who is one of the key suspects in this inquiry. I understand that that extradition process has started, but no formal application has yet been submitted.

And I am told that negotiations are ongoing, but it's a -- a very complex situation. We have had confirmation now that they have indeed found handguns at one of the addresses in London, and also household chemicals, which are being described as ingredients that could have been used to put together some form of explosives.

They are being sent off to the forensic science laboratory here in London for analysis to double-check that the chemicals are what they say they are on the tin. But the sources I have been talking to say they are confident of securing a successful prosecution.

PHILLIPS: All right, Dan Rath -- Dan Rivers, rather, thank you.

Well, fighting terror in troubled times -- President Bush is huddling with his homeland security teams today. And they have a lot to talk about.

CNN's Kathleen Koch at the White House. KATHLEEN KOCH, CNN CORRESPONDENT: Kyra, yes, the president is right now, as we speak, just wrapping up five long hours of meetings at the National Counterterrorism Center in McLean, Virginia.

And the administration, obviously, in the wake of the foiled terror plot in Great Britain, is trying to show that it is doing everything it can to keep Americans safe.

And polls certainly do show that Americans believe that the president is doing a good job at that, giving him very high marks for his handling of homeland security. Also, his -- his approval ratings have risen, as well. So, the White House is really very eager to keep that momentum going.

Now, the president took a break from the meetings at the Counterterrorism Center midday to -- to talk to reporters about the plot in Great Britain and about the work that they do there at the center.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That plot is, and this building and the work going on here, really is indicative of the challenge we face, not only this week, but this year and the years to come, because the United States of America is engaged in a war against a -- a -- an extremist group of folks, bound together by an ideology, willing to use terror to achieve their objectives.

(END VIDEO CLIP)

KOCH: Now, during the meetings that were -- that the president and many, many participants in his Cabinet joined in.

Now, there at the National Counterterrorism Center, White House spokesperson Dana Perino said they focused on things like where the U.S. is when it comes to fighting terrorism, how far we have come, what we have learned, and what remains to be done.

Now, the Democrats have a different take on this. They say a lot remains to be done. The minority leader of the Senate, Senator Harry Reid, strategy -- quote -- "Ask any foreign policy pro, and they will tell you, we are less safe than we were five years ago, and that the Bush crowd is largely responsible" -- Kyra.

PHILLIPS: Kathleen Koch at the White House, thanks.

Well, what would you give up to maximize the safety of air travel? Shampoo in a carry-on, a few extra minutes, or even hours in a screening line? How about modesty? Would you stand still for an X- ray machine that can see a lot more than bones or metal?

Our Brian Todd -- Todd got an eyeful of what are some are calling an electronic strip-search.

(BEGIN VIDEOTAPE) BRIAN TODD, CNN CORRESPONDENT (voice-over): At London's Heathrow Airport, a weapon in the war on terror that can see through clothes carrying liquid explosives. Already used on more than one million passengers, these special X-rays can catch all kinds of contraband.

PETER KANT, VICE PRESIDENT FOR GOVERNMENT AFFAIRS, RAPISCAN SYSTEMS: Regular weapons, guns, knives, box-cutters and the like, but also un -- unusual types of weapons, explosives, liquid explosives, gels.

TODD: The U.S. government owns four of them, but none are in use at America's airport. One look at our demonstrations reveals why. I am advised that, if I don't want my private areas shown, I should put a metal plate in my pants.

(on camera): But those would be seen normally on the screen here. I'm going to do that now, right before I get screened.

(voice-over): I step just in front of the machine, turn around. In just a few seconds, the monitor displays my humble contours.

Now, in this test, I am playing the role of a would-be terrorist. I try to hide a plastic lipstick container in my vest pocket. Busted. I sneak a sports drink, similar to one officials believe may have been used in the latest terror plot, into my pants pocket. Busted again.

UNIDENTIFIED MALE: There it is. Picked it up.

TODD: How about wires in a sealed sandwich bag hidden in my sock? On the monitor, they show up on my ankle.

But the machines have limitations. When I pour water into a sealed sandwich bag, place inside my belt line and in a sock, you can barely see it.

But the company behind this technology says, trained screeners would detect it. And the TSA says they have other methods to detect liquids.

Still, privacy advocates have seen enough.

MELISSA NGO, STAFF COUNSEL, ELECTRONIC PRIVACY INFORMATION CENTER: It's a virtual strip-search. What it is, is a detailed image of a person's body, so details that you can see genitalia.

TODD: What do passengers at New York's JFK Airport think?

UNIDENTIFIED FEMALE: That definitely seems like an invasion of privacy. And I would not be willing to do that.

UNIDENTIFIED MALE: I have been through it over in Europe, and I didn't mind.

TODD: Machine maker Rapiscan Systems says Heathrow Airport uses its devices as a secondary screening measure, segregating men and women with same-gender screeners in private rooms. Even then, passengers can choose between the see-through screen or a pat-down. And, according to Rapiscan, the vast majority choose the machines.

(on camera): So, is this an efficient screener of terrorist tools or a huge invasion of privacy? Well, officials at this company and others are trying to come up with a middle ground, a device that will maintain privacy, but not lose any detection capability. And they hope to have a machine like that ready in a matter of months.

Brian Todd, CNN, Arlington, Virginia.

(END VIDEOTAPE)

PHILLIPS: Well, Brian Todd is part of the team covering the world for THE SITUATION ROOM. Join Wolf Blitzer each weekday, 4:00 p.m. Eastern, and again in prime time at 7:00 p.m. Eastern.

Let's get straight to the newsroom, Betty Nguyen working details on a developing story -- Betty.

BETTY NGUYEN, CNN CORRESPONDENT: Yes.

Federal officials have made a huge bust today involving 150 suspects involved, they say, in a heroin organization. This occurred in seven different states where these arrests were made. Take a look at all the different states, California, Colorado, Indiana, Ohio, North Carolina, Tennessee, and South Carolina.

In fact, an official familiar with the operation says this. This -- this is interesting, Kyra. Some of those arrested had been hanging around outside methadone clinics, waiting to hit up addicts as they left.

Now, a formal announcement of this takedown is taking place at this hour. We are monitoring that news conference. And we will bring you any developments, if warranted. But anti-drug agent said that these arrests, again, made in seven states involved 150 suspects. And they are accused of not only producing, but smuggling Mexican black tar heroin into the U.S., not only in -- hidden in vehicles, but also by using people, stashing it on their bodies, just as they walked across the U.S. border.

So, we will stay on top of this and bring you any more if it's warranted -- Kyra.

PHILLIPS: Great. Thanks, Betty.

Free for now -- Mary Winkler, accused of killing her minister husband back in March, and feeling Tenn -- or fleeing Tennessee, rather, with her children, she left a county jail minutes ago, having met the terms of a $750,000 bond.

Our Rusty Dornin joins me now with more on this breaking story.

And it's just sort of a bizarre Tennessee law, that you can pay your bond and...

RUSTY DORNIN, CNN CORRESPONDENT: And be eligible to be released. PHILLIPS: Even when you are going to stand trial for murder.

DORNIN: For first-degree murder, yes, indeed.

And it did take them a while to get her out. They have been trying for five days to get her released. But, apparently, they were some having problem with the bond companies, because the attorneys would go every day and try to get her released. But these -- they -- the bond companies didn't have a good reputation.

And, as you see her leaving the courthouse, you can just see, they say that she's, emotionally, very fragile right now. She's gripping the arms of both of her attorneys. She never looks up as the attorneys bring her to the podium. She never -- it looks like, at some point, she's closing her eyes.

Her attorney, Steve Farese, talks about what he thinks is at least in her -- her short-term future.

(BEGIN VIDEO CLIP)

STEVE FARESE, ATTORNEY FOR MARY WINKLER: Mary Winkler was released today on bond, after an arduous effort on our part.

She has been incarcerated, as you all know, since approximately March 23. She will travel to the home where she's staying in McMinnville, Tennessee. She will have a job there. We would ask specifically of all the press, not just the press here today, but the magazines, newspapers, national press, to please respect her privacy, as they have respected the privacy of the Winkler family.

She has some acclimating to do on being on the outside world. And she needs as little interference as possible.

(END VIDEO CLIP)

DORNIN: Now, her attorney, Steven Farese, did tell me that she's very apprehensive about all this, going to the outside world, and was looking forward to things like carrying a purse again and things like that.

So, she will be working in a dry-cleaners, apparently. They won't say when she is starting. And she will be staying with a church friend. Meantime, her attorneys are trying to get the statements that she made to Alabama and Tennessee police suppressed. That's when she talked about the reasons that she had for shooting her husband, who was a very popular minister, Matthew Winkler.

PHILLIPS: And you wonder where she's going to be working, the friends she's staying with, other people, you know, concerned for their safety, considering these circumstances, because there really isn't any kind of check, except she has got to call in every night.

DORNIN: She has got to call in -- in every night. She is only allowed to go see her attorneys and see her children. Remember, she's trying to see her three children and set it up with her -- her family -- or his family -- excuse me -- for visitation, call-in, that sort of thing.

So, she is not going to be able to do many things. And she's just, apparently, looking forward to this time in her life. And it's just an amazing story, that they have even let her out.

PHILLIPS: What do we -- do we know anything more about a motive or what was going on in her marriage and at home?

DORNIN: Well, we know, from the authorities, that her statements were to police, and that was that she was being verbally and emotionally abused for about a year before this incident happened. Apparently, she said she just snapped, when she did shoot him in the back.

We also note that, apparently, she got involved in some kind of Nigerian check scam scheme, where she may have lost $17,000. That may have led up to some kind of argument. But her attorneys keep saying that the public doesn't really know the true story, and that won't be coming out until a court -- or the trial, which will be in October.

The other interesting thing about this story is, it was -- it -- it hit the tabloids, that sort of thing, but no one was talking. I mean, no information really came out about any of her motives, until the FBI testified in court just about a month ago.

PHILLIPS: That will be interesting to follow.

Rusty Dornin, thanks.

Well, easing violence gives way to a growing humanitarian crisis. Thousands of Lebanese refugees returning to shattered lives, in desperate need of help. But helping them is a slow and dangerous job. Up next, a sit-rep from Mercy Corps in Beirut.

(COMMERCIAL BREAK)

PHILLIPS: Same target, different city -- a truck bomb destroyed part of the headquarters of the Patriotic Union of Kurdistan today, this time in the northern Iraqi city of Mosul. Police say, at least nine people were killed, 36 wounded.

Last week, the PUK headquarters in Karbala was ransacked. And Iraq's president, Jalal Talabani, is a member of that party.

We see pictures like that every day out of Iraq, insurgents taking aim at police, coalition troops, and innocent Iraqis -- one of the deadliest cities, the capital, where the government is launching its own offensive.

CNN's Harris Whitbeck has that from Baghdad.

(BEGIN VIDEOTAPE)

HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): The Mansour neighborhood of Baghdad is -- or was -- one of the nicer shopping districts of the capital. In better times, its streets would fill with afternoon shoppers out for a stroll.

These days, those shops are all closed -- shuttered windows, heavy locks on doors one of the signs of the times. Mansour used to provide a comfortable living for its shopkeepers. Now they spend their time sitting outside their closed stores, lamenting just how much their lives have changed.

UNIDENTIFIED MALE (through translator): Every day is the same for me now. I used to have a shop, but I closed it because of the security situation. I can't open another for the same reason.

WHITBECK: The only new signs of commercial activity around here are billboards, part of a public service campaign aimed at inspiring confidence in the new Iraq, and aimed at stopping some of the violence that has had such a devastating effect on, among so many other things, the economy in Mansour.

This sign says, "The military patrols and convoys are here for everybody's protection."

This one, appealing for unity, reads: "One hand, one heart. We're all Iraqis."

And, on television, more graphic messages, like this spot which tells Iraqis to be on the lookout for suicide bombers. Ironically, it was filmed by a U.S. production company on a movie set in Los Angeles.

The shopkeepers of Mansour aren't very convinced of the campaign's effectiveness.

UNIDENTIFIED MALE (through translator): What is the point of spending millions of dollars on advertisements that have no effect on the situation? They should start to rebuild the country, fix the electricity, improve our security. Otherwise, these advertisements are useless.

WHITBECK: Locals in Mansour say the P.R. campaign seems trite, even irrelevant, in the face of so much bloodshed.

(on camera): Bloodshed that shows no sign of letting up, as sectarian strife divides a once bustling city and fear empties in streets.

Harris Whitbeck, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: A uniform change -- the U.S. military has redesigned what Iraqi police wear, to make it more difficult to copy. Recent attacks have been carried out by gunmen posing as Iraqi police. Well, this new uniform is similar to U.S. Army camouflage, but the Iraqi flag embedded into the pattern. The new uniforms are expected to be available in October.

Violence and disease, one often leads to the other, and so it seems in southern Afghanistan, where polio is on the rise. Doctors say, fighting is preventing them from seeing patients who need to be vaccinated. So far this year, 25 polio cases have been diagnosed. Another is suspected. There were nine in all of last year.

Well, he blew the whistle on Abu Ghraib prison in Iraq. Now, two years after turning in those infamous photographs, he's telling his story -- my interview with Joe Darby, an American soldier, straight ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Well, boarding a plane in Britain today? Carry on -- but not much. Passengers...

(LAUGHTER)

PHILLIPS: ... can now hand-carry one piece of luggage, but it can't be much larger than a laptop computer. Laptops are allowed, too, as are cell phones. But cosmetics, gels, toothpaste, liquids and sharp objects are still off-limits. Britain's threat level remains at severe.

Assuming our names are not on a no-fly list, airport security focuses on what we pack or carry. But some experts say, it should concentrate on how we behave, or even how we look.

CNN's Robin Oakley looks at the controversial concept of passenger profiling.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN EUROPEAN POLITICAL EDITOR (voice-over): Airlines and their passengers agree: It just can't go on like this.

Air travel is being made a misery, endless lines held up by the stringent security applied to all. The answer, say some, is more passenger profiling, putting the security emphasis not on what all passengers are carrying, but on the passengers that may be a threat to others; let granny through the fast lane.

It wouldn't, say security experts, be such a huge change. At one extreme, Israeli airline El Al already questions every passenger to assess them as a security risk. At Britain's airport, there is already covert surveillance of travelers. When it comes to security, they say, you can't treat everyone the same.

PHILIP BAUM, EDITOR IN CHIEF, "AVIATION SECURITY INTERNATIONAL": In fact, we see that elsewhere in airports. When you arrive in a country, you are processed by immigration authorities. There's usually one line for nationals of the country that you have arrived in, and another line for others. When you go through customs checks, you are pulled aside on the basis of your appearance and behavior, possibly because of your ethnic origin. It's an intelligent approach.

OAKLEY: Others see it as a potentially dangerous approach, if ethnicity, not behavior, becomes the filter. MUHAMMAD ABDUL BARI, SECRETARY GENERAL, MUSLIM COUNCIL OF BRITAIN: If the profiling is based on race or ethnicity or religion, I think that's -- that's not going to help, because Muslims are not a homogeneous community. We have many communities within ours.

OAKLEY: Intelligence, they say, must be the key, not appearance.

BARI: There's tremendous potential for further alienation of the Muslim community.

OAKLEY: A straw poll of passengers at Heathrow Tuesday seemed mostly to see that risk.

UNIDENTIFIED MALE: You shouldn't be saying, these people are suspicious and everything. All -- everybody is equal, you know?

UNIDENTIFIED MALE: I wouldn't disagree with it, but I -- I would leave it up to the experts.

UNIDENTIFIED FEMALE: I wouldn't favor profiling, because everyone should be checked, for safety's sake, definitely.

UNIDENTIFIED MALE: Treat everybody the same.

OAKLEY (on camera): Many travelers would welcome any system which could cut airport security delays. But some say that passenger profiling could amount to a kind of airport apartheid. Winning acceptance for such a system from some of the communities who fear they are likely to be targeted could prove a near impossible task.

Robin Oakley, CNN, Heathrow Airport, London.

(END VIDEOTAPE)

PHILLIPS: Well, the airlines' ban on liquids is putting on strain, not just on passengers, but on baggage handlers as well.

Susan Lisovicz joins us live from the New York Stock Exchange with that story -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Kyra.

A strain on their backs.

(LAUGHTER)

LISOVICZ: I mean, we're talking about literal strain here.

The new airline regulations are causing a 10 to 40 percent increase in checked luggage, because passengers are checking more carry-on bags, rather than leaving behind toiletries and cosmetics. That has airlines and airports scrambling to beef up already strained baggage-handling systems.

And, with federal officials saying there are no plans to lift the ban on liquids, industry experts see more flight delays, lost luggage, and increased costs for airlines.

Many airlines are bringing in extra workers to help handle the load. But, even before the liquid ban went into effect, complaints about mishandled baggage had been rising steadily. We have talked about it. The carriers are also facing an unforeseen problem: Passengers are arriving hours before flights. And the airlines are struggling to find places to store their bags. It is a mess in the early going -- Kyra. .

PHILLIPS: Well, it seems like something has got to give. Are the airlines pushing to ease the ban?

LISOVICZ: Not yet, Kyra, but experts say, the Transportation Security Administration will likely face pressure to relax the bans at some point.

Airlines and consumer groups may push for more advanced equipment at airport checkpoints, something the TSA is working toward. But it takes a lot of money to deploy new equipment widely. And, even then, no piece of machinery currently available can detect liquid explosives -- Kyra.

PHILLIPS: All right. Well, how about some explosive green arrows on Wall Street? What's happening there?

LISOVICZ: Yes.

(LAUGHTER)

LISOVICZ: And that's a good way of putting it.

I mean, we have had a big rally today. And, unlike yesterday, where we had triple-digit gains that were fizzling at this time, ours are holding. And, you know, there's good reason.

Investors have been very -- very focused on the fact that the economy is slowing and inflation seems to be heating up. And we got good news on the inflation front. For the month of July, wholesale inflation came in, really, basically below the core -- the core rate came in below what the Street was expecting. And that eases a whole lot of fears, including those concerned with the Federal Reserve and whether it will raise or hold next month.

So, there you see the rally -- the Dow Jones industrials holding some very nice gains, up 127 points, or 1 percent. The Nasdaq is up 43 points, or 2 percent.

And that's the latest from Wall Street. I will be back in about half-an-hour with a roundup of the day on Wall Street.

Stay tuned. LIVE FROM will be right back.

(COMMERCIAL BREAK)

PHILLIPS: Israeli troops finally getting a break, after more than a month at war. Fionnuala Sweeney has the latest.

(BEGIN VIDEOTAPE)

FIONNUALA SWEENEY, CNN CORRESPONDENT (voice-over): Driving home, Israeli troops continue their pullout from southern Lebanon. The IDF are not saying how many will stay behind, but Israeli media reports suggest, by the end of the week, the army will have redeployed to a narrow security zone inside Lebanon.

CAPTAIN DAN GORDON, SPOKESPERSON, ISRAELI DEFENSE FORCES: The redeployment is going along smoothly, under the conditions of the cease-fire agreement. Israeli commanders are talking to their parallel commanders in the vastly expanded UNIFIL force. And, so far, the cease-fire is holding.

SWEENEY: The cease-fire may still be under probation. But, in the meantime, Israeli soldiers are content to be out of Lebanon.

UNIDENTIFIED MALE (through translator): I'm not sure the war is over. But I am happy to be out right now.

UNIDENTIFIED MALE: I think Israel won the war, according to the agreement, again. If the agreement will -- going to be fulfilled, Israel won the war. If it's not going to be fulfilled, and Hezbollah were going to stay in the same places, then it -- then Israel didn't won the war.

SWEENEY: Debate rages within the country about how much Israel gained or lost in this war -- and, as the tanks are loaded up for the return journey to their barracks, varying opinions also among the soldiers.

UNIDENTIFIED MALE: All of Lebanon is kind of ruined. You know, they have nothing. We're still here. We're good.

GORDON: We know that in this particular campaign, we didn't cure the cancer that is Hezbollah, but we've put it into remission.

SWEENEY: A view shared by the Israeli Foreign Minister Tzipi Livni, who targeted Hezbollah for shooting at Israeli soldiers leaving Lebanon early Tuesday.

TZIPI LIVNI, ISRAELI FOREIGN MINISTER: It's in violation of the Security Council resolution. It's not only the spirit, it's the wording of the resolution. The resolution is binding, and it is clearly said that the meaning of cessation of hostility is full cessation of hostility and Hezbollah has to stop immediately his attacks, not only on Israel, but also on Israeli soldiers.

SWEENEY: Israel demands now that the international community step in to shore up the U.N. resolution.

(on camera): Two days into this cease-fire and these Israeli reservists are packing up to go home. The question on everyone's minds though, is for how long? Fionnuala Sweeney, CNN, Northern Israel.

(END VIDEOTAPE)

PHILLIPS: Well, how much force can a peacekeeping force bring to bear in south Lebanon? The latest U.N. resolution bestows what are called Chapter 6 powers, allowing troops to fight, but mostly in self- defense. Israel wanted a stronger mandate, Chapter 7, that would have let the force, quote, "take at any time such action as it deems necessary to maintain or restore international peace and security." Top U.S. diplomats say that the makeup of the force still has to be worked out.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMBASSADOR TO U.N.: Obviously, the decisions have to be made by individual countries and they are taking into account the circumstances of the mission, the extent of the mandate, the operational difficulties.

(END VIDEO CLIP)

PHILLIPS: Well, the current U.N. force in Lebanon is already patrolling the south. It's expected to grow in the coming days.

The fighting may be over in Lebanon, or essentially over, but the suffering is not. It may get worse. That's where relief workers come in though.

Cassandra Nelson has been in Lebanon for weeks. She is with Mercy Coarse. She joins me today from Beirut. All right, give us our -- I guess about every other day, we get a chance to talk. Bring us up to date on what you have been seeing today, Cassandra.

CASSANDRA NELSON, MERCY CORPS: Well, I actually just got back up from a town in southern Beirut called Nabatiyeh. Normally, it's a town that has around 35,000 people, but most of them fled during the fighting. It was under heavy bombardment.

Mercy Corps, during the fighting, was able to bring in some food supplies to the people who had remained there, but had a very difficult time accessing it. Now, with the cease-fire, we have been able to get in there the last two days and to really start to do some work there.

We are seeing a massive return of people. Over 10,000 people have flooded back into Nabatiyeh, and it's getting, probably by the end of today, even more than that. So we are seeing almost an instant revitalization of this town.

But, unfortunately, there's a lot of problems in Nabatiyeh, as well as throughout southern Lebanon that the returnees are facing. Common to most of the towns, including Nabatiyeh, is that there's no electricity. That means that the water system doesn't work because they rely on the electric pumps to pump their water, and they don't have any fuel for generators to keep those going. There's basically no food on the shelves in the markets, no drinking water, and no electricity.

So Mercy Corps has been working to try to help with the real basic needs today. We did a food delivery and a water delivery, drinking water. But in the coming days the major issues that need to be sorted out are clean drinking water, a water system, and a sewage system. These are critical for health reasons.

And the other thing that we really need to start on and that Mercy Corps is looking at is educating the people about the unexploded ordinances. There are small bombs and large bombs all over southern Lebanon.

Just today, I was out walking around the town and literally on the sidewalk in the main part of town there were all these little bomblets -- they nickname them bomblets. They're from cluster bombs. These looked kind of like hockey pucks, and these are things that children particularly can pick up and try to play with and if they explode in their hands or even -- you know, if they even explode near them, these can kill them instantly.

So there's a huge, huge threat with all these unexploded ordinances out there for children and for families or for anyone who may just be accidentally stepping on them. So that's a major concern we are facing.

PHILLIPS: How do you know you are coming across a piece of ordinance that hasn't exploded yet? Did you have training for that, Cassandra? I mean, how were you able to see that, notice that and warn the people on what they look like?

NELSON: Yes, well, I have had a lot of training on it. I have worked at places where there are a lot of land mines, like in Afghanistan and other areas, so it's something that I've been trained on. But if you haven't been trained, let me tell you, there are things that you just don't notice.

They're, again, very small. They are probably about an inch high and about three inches in diameter, small, round sort of pucks. They are on the ground. They're often half-buried. They have got dirt on them, gravel over the top of them. They are very hard to see. Even with my training, I often find myself almost stepping down and seeing one and jumping back.

So you need to be very, very careful with them. It's certainly something that Mercy Corps is going to look at doing some educational programs for the incoming families that are returning so they know what to look for.

The other thing though, is to get clean-up crews in as fast as possible, scouring the south and really getting all of these unexploded ordinances cleaned up. But it's a long process, something you can work on and work on and work on, and there will still always be some out there. It's something we face throughout all of these countries where there's been a lot of bombings and a lot of land mines.

PHILLIPS: Any pockets of receive assistance?

NELSON: No. I think the good news is that, you know, at least for the Mercy Corps team where we are working, we have not seen any resistance. We haven't heard about any. We are cautiously optimistic, and really looking forward to being able to continue getting deeper and deeper into the south and helping the communities that have been so cut off for almost a month now.

PHILLIPS: Cassandra Nelson with Mercy Corps. Appreciate your time once again, Cassandra.

NELSON: Thank you.

PHILLIPS: Well, we're following yet another story out of the Middle East, the kidnapping in Gaza of Fox News reporter Steve Centanni and freelance photographer Olaf Wiig. Fox says that negotiations are underway to get the pair safely back. The Committee to Protect Journalists is demanding their immediate and unconditional release.

Well, no change, no response. Ariel Sharon is said to be stable a day after the former Israeli leader suffered a critical setback. Doctors in Tel Aviv say it could be days before they know whether he will respond to treatment for double pneumonia, just one of his latest complications. Sharon's brain and kidney functions are also said to be worsening. The 78-year-old warrior turned politician has been in a coma since suffering a disastrous stroke in January.

In Tokyo, on the anniversary of Japan's surrender in World War II, a visit to a war shrine triggers protests from China and South Korea. Prime Minister Junichiro Koizumi visited a shrine that honors Japan's war dead including executed war criminals from World War II. As he has on previous visits, Koizumi says that his purpose is to pray for peace, not to glorify war. But in Seoul and Beijing, protesters say the visits proves Japan has not atoned for its aggression in World War II.

So what gets on the plane? What gets tossed out? Our carry-on quiz straight ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Let's get straight to the newsroom. Betty Nguyen, working details on a developing story -- Betty.

NGUYEN: Hi, Kyra.

A federal judge has made a major ruling in a case involving an insurance claim that deals with Hurricane Katrina damage. Let's go straight to CNN's Seans Callebs in Pascagoula, Mississippi, to talk not only this ruling, Sean, but how it affects thousands of other people who have filed similar claims.

SEAN CALLEBS, CNN CORRESPONDENT: Betty, you're exactly right. There is probably nothing that has garnered more legal attention, more attention from homeowners along the Gulf Coast of New Orleans, all the way to Alabama, than the issue of what was damaged by wind and what was damaged by water or the storm surge during Hurricane Katrina.

We are in front of the home of Paul and Julie Leonard This was really the first case, arguably the test case, to bring this before a federal judge. Well, the ruling came down a short while ago, and it is kind of mixed. It is for the plaintiffs, meaning it is for the Leonards. They were trying to seek $130,000 from their insurance company, Nationwide, saying that their insurance agent talked them out of getting flood insurance, saying they were covered by a hurricane, but the amount they won was only about $1,224.

Now, joining us to bring this into focus a little bit is the lawyers who has handled this case, Richard "Dickie" Scruggs. Dickie, thanks for joining us here today.

RICHARD SCRUGGS, POLICY HOLDERS' ATTORNEY: Thank you for having me.

CALLEBS: Now, you say it's a win, but you have to be frustrated that the court only gave your clients $1,224. What does it mean?

SCRUGGS: Well, it's -- if you use a sports analogy -- it's you win the first game of the season. At the end of the game, you're ahead on the score board, you win the game. And that's what we set out to do. And I'm very proud of the Leonards and this family for stepping forward and being the first out of the box.

CALLEBS: Now, Nationwide was one of a handful of insurance companies that you're going to bring legal action against. You're going to take this further. What's going to stop the insurance companies from saying to you -- saying, look, precedent is set, we won. We said in our claims, in our policies for homeowners like the Leonards, they didn't have flood coverage, so they're not covered. We win. How do you account to that at this point?

SCRUGGS: On the issue of flood coverage, they won that issue, but they lost on the concurrent cause provision in the policy, which is how they have been defending a all of the homes that were completely destroyed down here.

CALLEBS: And put that into layman's terms. That means that when the storm surge came in after the hurricane started, if the roof was blown off, then the storm surge leveled the house, the insurance companies have been going, saying, look, it's completely destroyed by water. But now you can say, no, wind did significant damage first, we want a lot of money for that.

SCRUGGS: That's correct. The insurance companies have been saying to everyone under that clause that they lost today that if you had one millimeter of salt water in your home, there's no coverage, even if the hurricane winds blew off your roof. That, now, is off the playing field. They lost that, and that's going to be huge in future cases.

This was a big win for us. Monetarily, it could have been more. We asked for more, and thought it was justified. But a win is a win in the first game of the season, and you just take it. CALLEBS: And knowing you, you took on big tobacco back in the 90s, won multi-billion dollars, you're not done yet. You're going to continue to fight against State Farm, Nationwide, a number of other major insurance companies.

SCRUGGS: I'll be going after these guys as long as I'm drawing breath, Sean.

CALLEBS: OK, Dickie, thanks a lot for joining us here today.

SCRUGGS: Thank you.

CALLEBS: And when you get a ruling from a federal court and kind of combine it with the legalese of someone as gifted as Dickie, you kind of get the sound, Betty, of a dog whistle incomprehensible to the human ear. We're just going through this ruling...

NGUYEN: Yes, it's hard to determine, Sean...

CALLEBS: .. that came down...

NGUYEN: ... who exactly has won here. Because on one side, the judge said, look, you did not have flood insurance, so therefore this does not cover it. But on the other side, the judge says, look, if you can prove that wind caused the damage, then you get a little bit of money there. So who can you say really won here?

CALLEBS: Well, I mean, clearly you can say -- I mean, both sides are going to walk away from this, and they're going to spin it and make it sound as best for them as possible. We just heard that from Dickie. But there are going to be a lot of other lawsuits that continue to come down the pike.

And this is significant, because this is the house the Leonards lived in. You've seen the pictures of along the Gulf Coast. Most homes were completely destroyed. They were slabs. So it's going to be very difficult to say exactly what was covered by -- or what was damaged by the water and the wind. But now, at least people know the parameters that they're going to be fighting in in court -- Betty.

NGUYEN: All right. CNN's Sean Callebs, joining us from Pascagoula. Thank you, Sean -- Kyra.

PHILLIPS: Thanks, guys.

Well, he blew the whistle on Abu Ghraib prison in Iraq. Now two years after turning in those infamous photographers, he's telling us his story. Joe Darby, an American soldier, straight ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: A true American hero. No reason to be ashamed. Stay true to your morals, Joe. These are just some of the comments that you've sent us since I talked to Joe Darby about blowing the whistle on prisoner abuse at Abu Ghraib. He's only now starting to tell his story publicly, more than two years after his name was made public by, among others, the secretary of defense.

(BEGIN VIDEOTAPE)

SPEC. JOE DARBY, ABU GHRAIB WHISTLEBLOWER: I was sitting having lunch with a -- with a few soldiers. And I just was shocked. I put my food down and the soldiers that were with me said, you know, we need to leave. And we got up and left the dining facility.

PHILLIPS: Did anybody scream anything at you or come after you?

DARBY: No. No one really realized who I was, because most of the soldiers weren't from my unit. But in about probably three hours,everyone in the unit, you know, had got a call or an e-mail from home saying that I was the one who had turned them in.

PHILLIPS: Now, do you think Rumsfeld knew you were in Iraq? And do you think he meant to humiliate you? Or do you think he didn't realize what was going on?

DARBY: I just don't think they realized that I was still in Iraq.

PHILLIPS: Wow. So Joe, why did you do it? Why did you turn those pictures in?

DARBY: Because, ultimately, it was the right thing to do. I had made the decision that something needed to be done after I first found them. It just took me a while to figure out exactly what that was.

PHILLIPS: Now, but you initially thought that some of those pictures were pretty humorous. I think it was the one you said...

DARBY: Just the first.

PHILLIPS: Right? The naked pyramid. I think that was the one that everybody was talking about. You actually saw it and thought it was pretty funny.

DARBY: Well I didn't realize what I was looking at. It was the first picture I opened and I didn't realize it was prisoners. I mean, it seems like something that a fraternity would pull. So as I went on in the pictures and saw, you know, that it was actually prisoners, I was very appalled.

PHILLIPS: How did you get the C.D.? How did you get all those pictures?

DARBY: Well I was working in a cyber cafe in the evenings and I had asked Charles Graner for pictures and other places of Hilla and other places we had been around the country so I could download them to my computer so I could have some record. And when he gave them to me, he gave me two C.D.'s and when I burned them to my computer and gave the C.D.'s back. And when I looked at them two days later, one of the C.D.'s contained the photos that I turned in.

PHILLIPS: Do you think he realized what he had given you? DARBY: I don't think so.

PHILLIPS: Why do you think this happened? I think a lot of people sit back. Those who really don't know the military that well were been in the military and think, wow, you know, a soldier is supposed to stand for dignity and loyalty and self discipline. And that's not what was going on. Why do you think this was an ongoing course of action?

DARBY: Well, I think there was a lack of supervision at the time when the soldiers were at the prison. At that time of day, which was between the hours of like 1 a.m. and 5 a.m. in the morning, there was a lack of supervision from the command over them. So they basically had free rein to do as they wished.

PHILLIPS: Do you have any regrets?

DARBY: No. None whatsoever.

PHILLIPS: Do you see yourself as a traitor?

DARBY: No.

PHILLIPS: Would you do it again?

DARBY: Yes, I would.

PHILLIPS: You wouldn't change anything?

DARBY: No. It was the right thing to do, and it needed to be done.

(END VIDEOTAPE)

PHILLIPS: And you can hear more from Joe Darby tonight on "ANDERSON COOPER 360. That's at 10:00 p.m. Eastern, right here on CNN. You can also read more about what he went through in the September issue of "Gentlemen's Quarterly."

Time now to check in with CNN's Wolf Blitzer standing by in "THE SIT ROOM" to tell us what's coming up at the top of the hour. Hey, Wolf.

WOLF BLITZER, CNN ANCHOR: Hi, Kyra, thanks very much. Coming up, my exclusive interview with a woman who could be Israel's prime minister one of these days. What's she's saying about allegations that Israel and the U.S. conspired to go to war against Iran. Also Iran today declaring victory by Hezbollah against Israel. We're going to take a closer look at what's going on. In Tehran, our exclusive report, Aneesh Raman is standing by. And we'll also take you inside the al Qaeda training camps and life with Osama bin Laden. What's it like to go from being an al Qaeda operative to a CIA informant? All that coming up right here in "THE SITUATION ROOM," Kyra, we're live in Jerusalem.

PHILLIPS: Look forward to it. Thanks, Wolf. Well those confusing carry-on rules, navigating them may be the scariest part of your plane ride.

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN CORRESPONDENT: Mascara, not allowed. Wrench under seven inches, allowed. Now which one do you think I could do more damage with?

(END VIDEO CLIP)

PHILLIPS: Well common sense or chaos? Jeanne Moos shows us the reality of the rules.

(COMMERCIAL BREAK)

PHILLIPS: Well are cell phones OK or no go? What about toothpaste, iPods, blood pressure medicine? If your blood pressure is rising over new rules for airline carry-ons, well you are not alone. CNN's Jeanne Moos carries on with some New Yorkers who are just a little confused.

(BEGIN VIDEOTAPE)

MOOS (voice-over): Is it OK to bring lipstick? Will gel shoe inserts have security following in your footsteps? Even airport employees have trouble keeping up with the latest rules.

UNIDENTIFIED MALE: I'm not an expert on that. Place it in the bin when you go through. No, no, no.

MOOS: We invite you to test your knowledge.

(on camera): It's the carry-on quiz.

(voice-over): What's allowed and what's not allowed.

(on camera): Bug spray.

UNIDENTIFIED MALE: No.

MOOS: Gel deodorant.

UNIDENTIFIED MALE: Sorry.

MOOS: Jell-O.

UNIDENTIFIED MALE: No.

MOOS: Lip gloss.

UNIDENTIFIED FEMALE: Yeah.

UNIDENTIFIED FEMALE: Yes.

MOOS: No.

Knitting needles. (voice-over): For those "hmmm" items, you can always check by going to the Transportation Security Administration Web site, where there are lists and lists, but the rationale can be confusing.

(on camera): Gel-cap type pills.

UNIDENTIFIED MALE: Not allowed.

MOOS: All right. How about four ounces of Nyquil?

UNIDENTIFIED MALE: Not allowed.

MOOS: It's allowed now.

(voice-over): That's right, no gel-cap pills, but they just changed the rules to allow up to four ounces of non-prescription medicine.

(on camera): Contact lens solution.

UNIDENTIFIED FEMALE: No.

MOOS: Well, you know, they've changed it.

(voice-over): It's enough to confuse even a New York City policeman.

(on camera): Knitting needles.

UNIDENTIFIED MALE: No.

MOOS: Yes.

UNIDENTIFIED MALE: Really?

MOOS (voice-over): Knitting needles and nail clippers are now allowed.

(on camera): Mascara.

UNIDENTIFIED MALE: Yes.

MOOS: No.

(voice-over): We asked a spokesperson for the Transportation Security Administration.

(on camera): What's wrong with mascara? Why can't you take mascara? She said, "We want people to look as bad as possible." She was joking.

UNIDENTIFIED FEMALE: That would work.

MOOS: Lipstick.

UNIDENTIFIED MALE: No. MOOS: You're allowed.

UNIDENTIFIED MALE: Not today.

MOOS: Yes, today.

UNIDENTIFIED MALE: No, no, no, some lipsticks yes and some no.

MOOS: That's correct.

(voice-over): Lipstick is OK. Liquid lip gloss isn't.

(on camera): Mascara, not allowed. Wrench under seven inches, allowed. Now, which one do you think I can do more damage with?

(voice-over): If only it was as easy as this cartoon. Another brave soldier in the war on terror, throwing out Chanel #5.

Forget Chanel. What about shoe gels?

UNIDENTIFIED MALE: No?

MOOS (on camera): You have to surrender your gel inserts.

UNIDENTIFIED MALE: Wow.

MOOS (voice-over): Jeanne Moos, CNN...

(on camera): I think those socks should not be allowed on the plane.

UNIDENTIFIED MALE: Oh, the SpongeBobs?

MOOS (voice-over): ... New York.

(END VIDEOTAPE)

PHILLIPS: Well the closing bell is about to ring on Wall Street. Susan Lisovicz standing by with a final look at the trading day. Hey, Susan.

(MARKET REPORT)

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