Return to Transcripts main page

CNN Live Today

Middle East Crisis Continues

Aired July 14, 2006 - 11:29   ET

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

DARYN KAGAN, CNN ANCHOR: A new development in the crisis in the Middle East.
Here is what we know at the half-hour. Israeli military sources telling CNN they believe longer-range missiles fired at the city of Haifa were made in Iran.

Two missiles fired from Hezbollah from Lebanon hit the northern Israeli port city for the first time late yesterday. Israel targeted the Beirut airport again today, but the U.S. helped broker a deal that allowed some planes take off before the bombs fell.

Hezbollah fired more rockets into northern Israel. Police say several towns were hit.

President Bush spoke by phone with Lebanon's prime minister to discuss the crisis. The prime minister wants the U.S. to help push for a cease-fire. The crisis escalated when two Israeli soldiers were captured by Hezbollah fighters.

Images of destruction, we have seen them on both sides of the Israeli-Lebanese border.

Our Miles O'Brien takes a bigger look at the big picture.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN CORRESPONDENT: Let's talk a little bit about the lay of land, if you would. Take a look at our Googol map technology, and we'll just give you a sense of what a compact region this is.

From stem to stern, Israel is about the size of New Jersey. But let's zoom in and tell you where this kind of all began.

June 25th it was, Gaza, to the south, and we're talking about 130 miles south of the border, where we're talking about a lot of the conflict this morning. Gaza, we should point out, is home to 1.5 million Palestinians. It is one of the most densely-populated places on the planet -- 2,146 people per kilometer.

All right, let's fly 130 miles to the north and past the border with Lebanon and Israel.

Beirut is only 55 miles from Israel's northern border. The population there is 1.7 million. A lot of focus in the southern regions right now, because that is where it is believed some key Hezbollah officials, including the Hezbollah leader, live. And, as a result, Israeli warplanes have been leafleting, warning residents to flee that area because there may be attacks directed that way. And that is what has caused a lot of people to flee Baghdad.

Let's go now to Safad, which is where we saw an attack yesterday. This is 13 miles south of the border, between Lebanon and Israel. And it was hit yesterday by Hezbollah firing the -- you can see the border up there, OK -- firing the Katusha rockets. Well within the range of those small Katusha rockets. One person was critically injured in that attack.

Now, Haifa was another site of attack. This surprised the Israelis a little bit. A little bit of the distances there. Haifa is the port city of Israel, the third largest city in Israel, with a population of about 300,000. And it is about 22 miles south of that border.

If we can go wide one more time there, Brian, just to show you real quickly. And that was considered a bit of a stretch for those Katusha rockets and perhaps people in Haifa a little more concerned today, knowing that those rockets can reach them.

And let's just go wide to the Middle East region one more time for you and give us a sense, we're talking about a country in Israel, which, as we said, is the size of New Jersey, 3.7 million square miles. And the distances between, you know, all the capitals and all the key places there are so small that it underscores a lot of the tensions there.

So we just wanted to give you a sense of where things stand geographically.

DARYN KAGAN, CNN ANCHOR: Let's try to understand more about what's happening in the Middle East.

Our next guest just returned from Israel late yesterday and he brings with him extensive insights.

Ambassador Richard Haass served as principal Middle East adviser to the first President Bush.

He is now the president of the Council on Foreign Relations.

Mr. Ambassador, good morning.

Thanks for taking the time to visit with us.

AMB. RICHARD N. HAASS, PRESIDENT, COUNCIL ON FOREIGN RELATIONS: Thank you.

KAGAN: So you're just back from Israel.

What do you think Israel's intent and what they're trying to achieve with these attacks on Lebanon?

HAASS: Well, it begins with the fact that, from the Israeli point of view, this is an unacceptable situation. The Israelis left Lebanon six years ago and part of the reason was so they would no longer face this kind of a threat. So this is clearly unacceptable.

What they, in turn, are doing is trying to make the Lebanese government and the Lebanese people pay a price for this situation and they're hoping that either the Lebanese government does more against Hezbollah or perhaps the international community -- the U.S. the U.N. and others -- place pressure on Lebanon, on Syria, on Iran, even, in order to get Hezbollah to pull back and stop.

KAGAN: Let's talk about that Lebanese government. We just heard a little bit of what Nic Robertson had to say. He's had an exclusive interview with the Lebanese prime minister that we'll hear more of in a little bit.

But this government appears to be impotent, powerless, when it comes to dealing with Hezbollah and reigning in what's happening in the southern part of the country.

HAASS: Well, impotent and powerless is a bit strong. But I think the basic point is right, that, at the end of the day, Hezbollah is something of a force within a state. It's one of the major arguments that it should be demobilized. There's no reason to have a militia of this sort that is carrying on this activity. And the Lebanese government on its own can't handle the challenge, which, again, is why the danger here is this situation could spread to Syria or Iran, because the Israelis may ultimately hold them accountable.

KAGAN: Some of the fallout of what we've seen happen, hardliners on both sides appear to be gaining.

First, let's talk within Israel, that the hardliners can say look, we withdrew from Southern Lebanon, we withdrew from Gaza, and, look, this is exactly where we have problems right now.

HAASS: Well, it's a fair point. They did withdraw. They expected to get something better in return. It's going to make future withdrawals more difficult. It's very hard to argue now that the Israelis, say, should be leaving from parts of the West Bank when after they left from Lebanon or after they left from Gaza, territory is being used as a base against them.

So this will strengthen the hands of the Israeli right.

And, by the way, that's no coincidence. If you look at the agenda of Hezbollah and you look at the agenda of its backers, it's quite possible that that's exactly what it is they want -- to polarize the situation.

KAGAN: And so let's talk about that on the other side, the hard line and the more extremist groups on the other side of this crisis. They, too, tend to be drawing support.

HAASS: Well, they are. But, also, it's interesting what's happening on the other side. It's a quiet, but perhaps the most intriguing development to date. As you listen to some voices coming out of Lebanon, you listen to some voices coming out of Egypt, out of Saudi Arabia, and we're seeing the moderate Arab world, we're seeing the Sunni Arab world, in some ways, unhappy with Hezbollah.

Let's be honest here, Hezbollah's agenda is not a pro-Lebanon agenda. Lebanon has already been -- been left by Israelis. They've got a different, more radical agenda, in the region. And it's representing, I believe, what Syria and Iran want.

So you're beginning to see moderate Arab voices in many ways unhappy and uncomfortable with what Hezbollah is doing, because its moderate Lebanese people, average Lebanese people on the street, who are paying a real price for it.

KAGAN: You can't have this conversation about this region and not talk about Iran, and, also, Syria. Iran seems to be sending the message to the United States and to the world, this is our neighborhood now and you can't come in here and look at what's happening without dealing with us.

HAASS: I think that's true, that Iran has now emerged as one of -- you might say one of the three most critical countries involved in the Middle East, alongside Israel and the United States. And it's a fact of life. It's not a judgment of whether that's desirable. It's simply the case.

I believe it argues for a U.S. dialogue with Iran that is across- the-board.

We need to discuss Iran's nuclear ambitions. We need to discuss their support of Hezbollah, their support of Hamas.

Like it or not, Iran is a factor. And I believe that it makes sense to engage them. I can't guarantee that diplomacy or talks would work, but clearly we're seeing that the current situation is working to no one's advantage.

KAGAN: Which brings me to my final question. And that is that the U.S. role in that region, if you bring it to the idea of having direct U.S.-Iranian talks without conditions attached, some within the administration might say that you're giving Iran a level of respect that it doesn't deserve.

HAASS: Diplomacy is not, if you will, a reward to anybody. It's not a favor to anybody. It's simply a tool for ourselves. And we ought to have the confidence that we can shape diplomacy in a way that promotes U.S. interests. If it doesn't, there's always other tools to fall back on.

But I believe engaging Iran is one of the things the United States should explore. Again, I'm not predicting it will work. But clearly the current approach is not working the way we want. And there's other things we need to do, as well.

We ought to look at ways to improve the relationship between Israel and the Palestinians. We ought to look to ways to strengthen the Lebanese government so they can do something to resist the role of Hezbollah.

KAGAN: Thank you for your perspective.

HAASS: Thank you.

KAGAN: Former Ambassador Richard Haass.

Thank you, sir.

I would like to mention that Richard Haass, the former director of planning for the U.S. the Department of State and where he was the principal adviser to then Secretary of State Colin Powell on a broad range of policy concerns.

All right, now let's go to the pictures that you're looking at right here, to Israel's second front. We've been focusing too much on Lebanon.

What about Gaza?

That is where another soldier is being held.

Our Ben Wedeman joins us there by phone -- Ben, take us back to that part of the story.

BEN WEDEMAN, CNN CORRESPONDENT: Well, yes. That soldier, 19- year-old Israeli Army Corporal Gilad Shalit is still in the hands of Palestinian militants. We recently heard from the Palestinian foreign minister, who is also a senior member of Hamas, reiterating what they want from Israel, which is a prisoner release, in exchange for Gilad Shalit. And we know that Hamas officials who are based in Damascus have gone to Cairo to talk to Egyptian mediators.

There is a desire amongst many Palestinians here in Gaza to get this soldier released so some of the pressure can be relieved on the Gaza Strip -- Daryn.

KAGAN: I want to ask you about another story, another development that we're seeing cross the wires here. If you could talk about this, Ben.

We're getting word that Palestinian gunmen blowing up a portion of the border wall between Gaza and Egypt.

WEDEMAN: Yes, that's a very interesting story. What they've done is apparently blown a huge hole in this wall. It's a huge concrete wall between Egypt and Gaza. And they've brought into Gaza around, we are told, 500 people who were waiting to be deported by the Egyptians to the Gaza Strip.

Now, that border crossing has been closed now since late June by the Israelis, following the capture of Gilad Shalit, of course, and that was part of their offensive in the Gaza Strip.

Now, we're told among these approximately 500 people who the militants have brought into Gaza, there are wanted people, people on Israel's wanted list.

This obviously is a grave development for the Egyptian authorities, who basically have been stampeded and overcome by the Palestinian militants to get these approximately 500 people over through wall and back into Gaza -- Daryn.

KAGAN: So this would be a huge breach in trying to control that border and in security?

WEDEMAN: Yes. And that border is very problematic since the Israelis pulled out of Gaza last -- at the end of last summer. We know that the amount of weaponry that's been crossing the border from Egypt into Gaza has increased dramatically. The border is currently under joint Palestinian and Egyptian control. They clearly don't control the border as well as the Egyptians -- or as well as the Israelis used to.

And, of course, there's a network of tunnels that's going under that wall, as well, that's been a conduit for weapons and other things, as well -- Daryn.

KAGAN: Ben Wedeman joining us on the phone from Gaza.

Thank you.

We're going to check on and see how the stock market and the oil markets are reacting to all of this.

Also, we'll talk with our Bill Schneider about this crisis's effect on the White House.

And there's Bill right now.

And we'll get to Bill in just a moment.

You are watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: Let's get back to developments as they are moving in the Middle East.

Our Nic Robertson in Beirut was able to get an exclusive interview with the prime minister there, Fouad Siniora, and had a chance to talk with him quite a bit about what is happening there in his country.

One of the questions that Nic asked him was about the prime minister's conversation that he had with President Bush.

Let's listen in to a little bit of that exclusive interview.

(BEGIN VIDEO CLIP)

ROBERTSON: ... the United States supports this government? FOUAD SINIORA, LEBANESE PRIME MINISTER: I think that President Bush is very sincere in extending the necessary support for the Lebanese government so that it can really do its job of bringing back peace, democracy into the country and, as well, stability. And to really support Lebanon and the Lebanese government in order so that its authority can prevail over all the territories. I believe that President Bush is sincere and is trying his best to do so.

(END VIDEO CLIP)

KAGAN: And, once again, that was the prime minister, Fouad Siniora, having a conversation with our Nic Robertson, an exclusive interview that you'll see only here on CNN.

Nic Robertson part of our team that is with CNN in the Lebanese capital.

Let's go ahead and talk about what is happening in Lebanon and other countries that are getting sucked into this situation, perhaps on purpose, and bring in our senior political analyst, Bill Schneider, who is joining us from Washington, D.C. -- Bill, good morning.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Good morning, Daryn.

KAGAN: First, let's talk about a country that we haven't talked a lot about over the morning, but really does seem to be having an influence about what's happening, and that is Iran.

SCHNEIDER: Iran seems to be a -- to have a hand in all of this. The Hezbollah, which, of course, kidnapped the two Israeli soldiers in the north of Israel, the Hezbollah was formed by Iranian Revolutionary Guards nearly 25 years ago. A lot of observers believe that the Hezbollah and the Hamas attacks were coordinated and they see Iran behind it.

Iran has some influence with the more militant faction of Hamas and they have a lot of influence with Hezbollah. Those are Shiite Muslims based in Lebanon with very close ties to Iran.

A lot of people think that, you know, when this started, Iran saw an opportunity here to become champions of the Palestinian cause and have played that card, to become heroes to a lot of Arabs in the Middle East and to assert their power throughout the entire region.

KAGAN: Let's circle back to Nic Robertson's exclusive interview with the prime minister of Lebanon, who has been very plain he would like to see the United States get involved in this. The United States has had different amounts of involvement in the Middle East crisis over the years, and in recent years, doesn't seem to have had a very visible role there.

SCHNEIDER: Not particularly in the Israeli-Palestinian conflict. But the United States does regard Lebanon as a success story. It's a democratic government which has tried to make peace among the various factions. Hezbollah is part of that government. But there's a question whether the Lebanese government, which is anti-Syrian, has real control over what Hezbollah does.

Hezbollah appears to have dragged Lebanon into this conflict with Israel. And a lot of Lebanese resent that.

There is the possibility that with American support, and possibly a U.N. role, there's the possibility that the anger at Hezbollah for provoking this conflict can lead to Hezbollah's isolation, perhaps even disarmament, if the Lebanese government is able to assert its authority and control over the Hezbollah forces.

That's very much in question now, but American support could be crucial in doing just that.

KAGAN: President Bush talks a lot about his passion for spreading democracy around the world.

How does that play into what we've seen in the Middle East?

And as you were pointing out, Lebanon would appear, at least on the government level, to be a success story there.

SCHNEIDER: That's right. It is a -- it was a democratically elected government. But, of course, Hezbollah, a very radical group that the United States and other countries have branded terrorist, they're in that government.

Democratic elections in the Palestinian Authority produced a Hamas government, which is branded by Europe and the United States as a terrorist political movement.

And, of course, there were -- there's democracy in Iraq, but that doesn't seem to have staved off forces, violence and disruption in that country.

So the record of democracy is rather mixed. Many radical forces have partly come to power, have gained authority, or at least a foothold, through democracy.

You know, the United States said before the Iraq War that Iraq would become a beacon of democracy and stability in the Middle East. It hasn't quite turned out that way. Look what's happening now. In fact, one of the unfortunate byproducts -- the world is well rid of Saddam Hussein, no question about that. But one of the unintended consequences has been to enhance the power and status of Iran, which is now becoming a champion of radical forces throughout the Middle East.

KAGAN: Bill Schneider, thanks for your expertise and your analysis this morning.

SCHNEIDER: Sure.

KAGAN: Another consequence of what we're seeing happening in the Middle East, the markets. It has pushed the price of oil up. And look at the Dow -- any gains the Dow has made for the year, kiss those good-bye. We'll also take a look at the Nasdaq, which is down 20 points -- more than 20 points, as well, this morning.

More business news just ahead after the break.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: Former CIA operative Valerie Plame is speaking out. She claims administration officials orchestrated a whispering campaign to out her identity and destroy her career.

About an hour ago, she and husband Joe Wilson held a news conference. They talked about their case against Vice President Dick Cheney, his former chief of staff, Lewis "Scooter" Libby and presidential adviser Karl Rove.

(BEGIN VIDEO CLIP)

VALERIE PLAME, FORMER CIA OPERATIVE: Joe and I have filed this action with heavy hearts, but with a renewed sense of purpose. I would much rather be continuing my career as a public servant than be a plaintiff in a lawsuit. But I feel strongly, and justice demands, that those who acted so harmfully against our national security must answer for their shameful conduct in court.

JOSEPH WILSON, FORMER U.S. AMBASSADOR: We are under no illusions about how tough this fight will be. But we believe the time has come to hold those who use their official positions to exact personal revenge accountable and responsible for their actions.

Thank you.

(END VIDEO CLIP)

KAGAN: Let's check the facts.

No one has been charged with linking Valerie Plame's name, even after a three year investigation.

(BEGIN VIDEO TAPE)

KAGAN (voice-over): The lawsuit claims that Valerie Plame was the target of revenge, that her name as a covert CIA agent was leaked after her husband, Joe Wilson, criticized the administration's reasons for going to war in Iraq.

In 2002, the CIA sent Wilson to Niger. It was a fact finding mission.

Was there any truth to the administration's claims that Saddam Hussein had been trying to buy yellow cake uranium and trying to develop nuclear weapons? Wilson says he found no evidence of that. And in July of 2003, he wrote an opinion piece in the "New York Times." He accused the administration of twisting prewar intelligence to justify taking action in Iraq.

Days later, columnist Robert Novak reported that it was Wilson's wife who had suggested her husband be sent on that fact finding mission. Referencing sources, Novak identified Plame as a CIA operative.

The column triggered an investigation into whether someone in the White House had deliberately unmasked a CIA agent. But after nearly three years, the only person facing charges is former vice presidential chief of staff, I. Lewis "Scooter" Libby. He's charged with perjury, obstruction of justice and making false statements to a grand jury about conversations prosecutors say he had about Plame. He's pleaded not guilty.

(END VIDEO TAPE)

KAGAN: Well, the rising tensions in the Middle East are not just a political problem. They are problems for the financial markets, as well.

Susan Lisovicz is live at the New York Stock Exchange with the latest -- Susan, good morning.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Daryn.

One veteran trader wrote in his notes this morning that this may not end either quickly or well. He's talking about the situation that's unfolding in the Middle East. And that is a region that produces about one third of the world's oil supply. So oil prices right now are actually off their highs of the session, but still at record highs of -- right now, it's $77.25 a barrel.

They were actually at $78.40 a barrel earlier in the session. In fact, it's gotten so tense that OPEC itself issued a statement this morning that pretty much says it clearly. "Geopolitical developments," according to OPEC, "over which OPEC has no influence, have been behind the sudden rise in volatility and these have come at a time when the market was already out of line with today's supply and demand fundamentals, with speculators playing a significant part in driving up prices."

And that is what you're seeing. And when you see a big rise in oil prices, of course, it eventually trickles down to us at the gasoline pump. The general rule of thumb is that for each $1 increase in crude, Daryn, gasoline prices rise by a dime.

This week alone, crude has jumped more than $3, just to put it in perspective for you -- Daryn.

KAGAN: All right, Susan, thank you.

Just a little earlier this hour, we were listening to the exclusive interview our Nic Robertson has acquired with the Lebanese prime minister.

We'll hear more of that coming up at the top of the hour on YOUR WORLD TODAY.

And I'll also be back in about 20 minutes with headlines from here in the U.S.

I'm Daryn Kagan.

Keep watching CNN.

"YOUR WORLD TODAY" is up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com