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CNN Live Today

Nuclear Deadline for Iran; President Bush Prepares for Speech; Tropical Storm Ernesto Updates; Tel Aviv Embassy Security Breach; Peacekeeping Force For Darfur?

Aired August 31, 2006 - 10:00   ET

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

DARYN KAGAN, CNN ANCHOR: We've got a busy couple of hours for you and I to spend together today. The news just keeps on coming this morning. Let's give you a preview of the major stories that we are following for you this hour.
President Bush live from Salt Lake City wearing his commander in chief hat. He is launching a three-week speech blitz this morning hoping to boost support for Iraq and the fight against terror.

Iran's president thumbing his nose at the U.S. and other major powers in the U.N. He does risk sanctions ignoring today's deadline to stop nuclear activity.

And Carolina bound Ernesto tries to get its act together. The storm threatens the southeastern shore with wind and floods. A live report is coming up just ahead.

We're going to begin our hour with a nuclear deadline for Iran. Here is what we know at this hour.

The United Nations says Iran must abandon its nuclear activities today or face the risk of sanctions. Iran shows no signs of backing down. Today the president said his country will not be bullied. Mahmoud Ahmadinejad says that Iran has the right to nuclear technology for peaceful purposes. Iran has always maintained that it wants to develop nuclear energy and not weapons. The U.S. and its allies believe otherwise.

CNN's Aneesh Raman has the latest. He is in Iran's capital. Joins us now from Tehran.

Aneesh, hello.

ANEESH RAMAN, CNN CORRESPONDENT: Daryn, good morning.

As you mentioned, Iran's president standing firm today, saying the country will not meet this U.N. deadline. Now it is up to see how the world responds.

(BEGIN VIDEOTAPE)

RAMAN, (voice over): The deadline has arrived, but Iran shows no sign it plans to bow to U.N. demands and stop enriching uranium. In fact, U.S. and European officials say there's evidence the country was continuing enrichment as recently as Tuesday. The U.N. has given Iran until today to halt the program or possibly face sanctions. The president, Mahmoud Ahmadinejad, speaking this morning in northwestern Iran, was still refusing to back down.

In the face of Iran's defiance, the U.S. State Department says it will start talks on sanctions with European allies and Russia as early as next week. But why defy the west? Iranian officials believe it gives their country more influence in the Muslim world. They are already riding high from what they portray as Hezbollah's victory over Israel. Iran being a primary supporter of Hezbollah.

But Iranians themselves are divided by the prospect of sanctions. Most people feel immense pride in the country's nuclear program, especially among those in blue collar southern Tehran. Here it's all about making your daily wage and showing no weakness to the west.

"We are not afraid of economic sanctions," says Majee (ph), "because this is not the first time they want to impose them. And in the eight years of war, we fought the entire world."

But head to northern Tehran, home to the more affluent, more moderate and confidence gives way to concern.

"Ordinary people," says 29-year-old Peshman (ph), are very worried. In the university, in homes and at workplaces people are very concerned. I can see that. They are very afraid."

But there's something even worse than sanctions that has people worried. It's the prospect of a military conflict over Iran's nuclear ambitions. Last week, the government launched a massive military exercise, war games to demonstrate Iran's ability to defend itself. In part against potential attacks on its nuclear sites. Something that could drag this country into a broader military conflict. That remains the worst-case scenario.

(END VIDEOTAPE)

RAMAN: Daryn, on the streets of Tehran today, a sense of foreboding. They have known this day was coming and now they must wait to see what happens next.

Daryn.

KAGAN: Aneesh Raman live from Tehran. Thank you.

So then there's the man who heads the U.N.'s nuclear watchdog agency. He is weighing in on Iran's atomic ambitions today. Mohamed ElBaradei issues a pivotal report. Our European political editor Robin Oakley joins me from London with more on this report and what we can look to learn from that.

Robin, hello.

ROBIN OAKLEY, CNN CORRESPONDENT: Hello, Daryn.

Well, we're still waiting to see precisely what is in this report, which is being handed round about now to ambassadors of the countries concerned in the International Atomic Energy Agency and at the U.N. But basically what we're expecting the inspection report to show is that while Iran has defied the U.N. Security Council and continued to enrich uranium, it has done so at a comparatively slow pace. It hasn't pushed up the rate of production of enriched uranium and nor has it produced uranium yet of the kind of purity that could be used for nuclear weapons as opposed to a civil nuclear energy program.

So that in a sense is going to make it a little bit harder if those are the findings of the IAEA, it's going to make it a little bit harder for those who want to drive on fast now to sanctions. And a lot of the European nations are going to say, let's go on talking. We can't have official negotiations with Iran until it does agree to suspend its uranium enrichment program. But let's go on talking behind the scenes. Let's see if we can still get a diplomatic solution to this. That deadline is there. It's been broken but it's a bit of a rubber deadline.

Daryn.

KAGAN: How do the IAEA inspectors describe the kind of access they've been given to this site, some things they would like to see in Iran?

OAKLEY: Well, again, the report hasn't been published yet, Daryn, so we don't know exactly what they're saying. But we know they have been denied access to certain parts where Iran denies that certain sites are in any way part of the nuclear program. So that is going to be criticized, I think, by the IAEA.

Daryn.

KAGAN: All right. We will look for that and go back to you with what we see coming out of that report. Thank you. Robin Oakley live from London.

Let's give you some background and perspective here. The U.N. Security Council passed Resolution 1696 open July 31st. It requires Iran to suspend all nuclear enrichment activities by today. If Tehran fails to comply, the resolution authorizes sanctions, but it does not list specifics. The resolution only calls for further discussions by the five permanent members of the council.

President Bush kicks off a series of speeches defending his Iraq's war policy. Here is what you can expect. Next hour the president speaks at the American League's national convention. That's taking place in Salt Lake City, Utah. He's expected to acknowledge that these are unsettling times, but he'll argue that violence and terror threats are part of what he sees as a battle between freedom and extremism. The president is expected to reiterate his position that if the U.S. leaves Iraq before the job is done, the nation will face terrorists here at home in the U.S.

White House correspondent Ed Henry is traveling with the president. He also is in Salt Lake today.

Ed, good morning.

ED HENRY, CNN CORRESPONDENT: Good morning, Daryn.

Call it Bush 3.0. This is really the third time we've seen the president kick off a series of speeches like this in recent months. It's a clear sign the White House realizes that the first two visions really didn't get the job done in terms of shoring up support of the mission in Iraq. And so what we're going to see the president try to do once again, as we've seen before, is to try to recast the mission, but also the whole outlook on the midterm elections.

It's not just a referendum on Iraq, but as a referendum on the broader war on terror. Put Iraq in that broader context. And the president yesterday saying he does not want to make this debate political. But I can tell you when he landed here in Salt Lake City last night, he was greeted by 2,000 cheering supporters. Looked very much like a campaign rally. And the president sounded very much like a man trying to rally his party.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraq is the central front in this war on terror. If we leave the streets of Baghdad before the job is done, we will have to face the terrorists in our own cities. We will stay the course. We will help this young Iraqi democracy succeed. And victory in Iraq will be a major ideological triumph in the struggle of the 21st century.

(END VIDEO CLIP)

HENRY: Now the president said last week that he would not question the patriotism of his critics. But his defense secretary seemed to do just that on Tuesday when Donald Rumsfeld basically suggested that war critics support the type of appeasement that really sparked the rise of Nazism leading up to World War II.. That's really infuriated war protesters, Democrats on Capitol Hill. And those war protestors were planning a major rally here today in Salt Lake City even though Utah is clearly a conservative state. A bastion for President Bush.

The bottom line is the president's goal here is try to stem some of the political pressure that's building to withdraw U.S. troops from Iraq. He's been hearing that from Democrats, obviously. But now, even in this midterm election year, starting to hear it from Republicans as well.

Daryn.

KAGAN: Ed Henry live in Salt Lake City. Thank you.

HENRY: Thank you.

KAGAN: Tropical Storm Ernesto refusing to go away quietly. Here's what we know about that this hour. Ernesto gaining strength in the Atlantic Ocean as it heads toward the Carolinas. The storm is expected to move inland, possibly into South Carolina late today or early tomorrow. Forecasters warn that Ernesto could produce heavy wind and rain and cause dangerous flooding. Stay with CNN, we are your hurricane headquarters.

And, of course, meteorologist Chad Myers is tracking that storm.

Chad, you even said yesterday, don't kiss Ernesto good-bye quite yet. You didn't think it was done.

CHAD MYERS, CNN METEOROLOGIST: That's right. And I still don't think it's done. Fifty-five miles per hour was the latest update. And then that aircraft that was in there, the Air Force reconnaissance plane, actually had to leave. Now another plane has actually flown into it and we're finally getting some of the first reports. As the old plane left, it was about 61 knots worth of speed at flight level. That's about 60 miles per hour down at the surface. So still getting stronger this morning.

Trying to make an eyewall now around the storm. It's still a little bit open there on the east side. Regardless whether this thing gets to be a hurricane or not, this is going to be a flood maker. And I've completely gone by rainmaker. This is going to a flooding situation as the rain continues as the storm moves up into it, it's grabbed already.

It's already grabbed enough moisture that when it gets up here, into North Carolina, South Carolina, and eventually into Virginia, it will make flooding. There will be areas there that will pick up six to 10 inches of rain, especially through the sand hills, on up into Charlotte and, for that matter, right up along the Piedmont into Charleston, West Virginia, even Pittsburgh. Everywhere that you see white on this map, that's three inches of rain or more. Think about the square miles here that are already white. The three inches of rain over that many square miles. It all has to runoff. It's not going to go into the ground, most of it. It's going to come down too fast.

And then we're going to set up a situation for Hampton, Rhodes (ph), for D.C., for Annapolis, for Baltimore. And we're going to start to fill up the Chesapeake Bay. That wind is going to blow right into the bay for hours and hours and hours and that water is going to come up, all of those estuaries, all the way up through the James and Williamsburg. All those areas are going to be inundated with flood water. We don't know how much. Depends on how long the storm sits there and spins. The more it spins, the more the floodwaters will be.

Look at this. Remember we looked at this yesterday, Daryn. This is actually John. John was just scraping along the west coast of Mexico. It grabbed enough dry air that it's down now to probably a category strong two, weak three.

But as it goes by Puerto Vallarta. It is actually going to grain more strength before it makes landfall very close to Cabo San Lucas again and then head out to sea. It could be a category four as it makes its way toward Cabo. September 2nd was an ugly day in Cabo years ago with a hurricane making landfall there. Beautiful day in New York. Seventy-five, partly cloudy. It doesn't get a lot better than that. Now, obviously, by Saturday, the rain from Ernesto does get up into New York City. It stays just cloudy in Boston. I don't think you get any rain from it. It's going to be too far to your south and to your southwest. Philadelphia, you get a lot of rain. D.C., you get a lot of rain as well.

The storm system itself is now making wave. This is a live shot from Wrightsville Beach. Seeing the waves now pick up, Wrightsville. We have four locations along the North Carolina coast to show you what the waves are doing.

We do expect landfall, at least the Hurricane Center has old landfall numbers from 5:00 this morning, very close to north Myrtle Beach. I'm thinking maybe even all the way over to Holden Beach or Cape Fear and that's 12 and a half hours away before the center of the eye makes landfall. And when it does, we could be filling up all of these estuaries though here, on up into Pamlica (ph) Sound and then that wind picks up for the mid Atlantic. From Richmond to Hampton Road to D.C. I mean even though the storm is now diminishing in intensity by then, the high pressure to the north and the low pressure that it is will be funneling wind into the northeast. Could be 50, 60 miles per hour all weekend long.

KAGAN: Sounds like a soaker of a Labor Day weekend for much of the East Coast.

MYERS: Absolutely.

KAGAN: All right, Chad, thank you.

MYERS: You're welcome.

KAGAN: Well let's go to that part of the East Coast. Our Keith Oppenheim joins us live. He's in Charleston, South Carolina. He's getting ready for Ernesto. So far calm before the storm, perhaps.

Keith.

KEITH OPPENHEIM, CNN CORRESPONDENT: Yes, pretty much, Daryn.

In fact, just to echo a little bit of what Chad said, we have a good view of Charleston Harbor from the water front park that we are at here in the city of Charleston. And we can see the wind as it comes off the harbor. But as I walk over here with a view of downtown Charleston, what we're really going to be keeping our eye on is rain that collects here and a number of stops in the city, which is particularly venerable for that kind of thing.

Let's show you some pictures that we shot yesterday as people were preparing for the storm and putting up storm boards on buildings, especially along beachfront here on Sullivan's Island just a couple of miles away from the city of Charleston. Back in the city we talked to a gentlemen this morning who went out for a jog, a doctor. He gave a sense of how he is preparing for the storm.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'd say kind of a consensus here is, this is probably a little bit more preemptive, you know, preparation than anything else given the strength of the storm. We'll wait and see. But, you know, all we can basically do is get ready and prepare and keep going on with what your life is.

OPPENHEIM: And hope it's not too bad.

UNIDENTIFIED MALE: And hope it's not too bad.

(END VIDEO CLIP)

OPPENHEIM: Just to illustrate how there are a number of locations in Charleston where water collects. This is one of them. And it's dry now because we just haven't had that much rain yet. But we know what the rain is coming. So we expect that by this afternoon this could all be in water and probably won't be dry until you get up to the steps of this fountain that I'm going up right here.

By the way, Daryn, schools are closed today. Bridges probably will be closed if the winds continue as Chad Myers was reporting. The winds just need to be at 40 miles per hour for bridges in this area to be shut down. And if you know Charleston, that's how you get around is by crossing bridges.

Back to you.

KAGAN: And I do know Charleston. Absolutely. Thank you. Keith Oppenheim in Charleston, South Carolina.

The other big storm we're watching, of course, that Chad was mentioning, Hurricane John on the west coast of Mexico. We're now getting word from Reuters that at least 10,000 Mexican citizens have been evacuated from their homes. That's all because of Hurricane John. Trying to get them away from that coastal areas so that they won't be in danger. Tourists who are still there have been encouraged just to hold up in their hotels. We will watch what is happening both with Ernesto and John as the next two hours go forward.

Meanwhile, we have a situation developing in Tel Aviv. Our Carol Lin has that for us.

Carol.

CAROL LIN, CNN CORRESPONDENT: Daryn, somehow an armed gunman breached security at the British embassy in Tel Aviv. He is on the roof right now threatening to commit suicide. This is what we know also from other reports. According to the CBC, the Canadian Broadcasting Company, that the man is threatening to jump. All employees are out of the building right now. Apparently breaching security through a parking lot and somehow, Daryn, made his way to the roof of that embassy.

Let me see if the Jerusalem Post has anything different here. According to their reporting, they've talked with an embassy spokesperson who said that police, and this is an interesting choice of words, have been invited into the embassy compound. They were seeking to deal with the situation. So far, Daryn, no reports of any shots fired.

KAGAN: All right, Carol, thank you. We will check back with you for more on that.

In the next hour, President Bush will be speaking in Salt Lake City. It's the first of many speeches on the war on terror. You'll see that live here on CNN.

Also, we'll get insight into Iran from Afshin Molavi, a long-time reporter and author in the region.

And he's accused of sex crimes related to children. Polygamist sect leader Warren Jeffs prepares for an extradition hearing. Who gets him first, Utah or Arizona? A live report from Las Vegas ahead on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: We are keeping an eye on Hurricane John and getting word from Reuters that the Mexican government has evacuated at least 10,000 Mexican citizens that live in the low lying areas around Cabo San Lucas. They'll be taken to shelters. And this is interesting. The Mexican government saying those people will go to those shelters by force if necessary. They will not be given a choice. They're trying to get them out of danger when the storm pummels in there on Friday. A quote from an official there saying, "those that do not want to leave will be taken away by the army." Our Harris Whitbeck is there in Cabo San Lucas. We'll be hearing from him in just a moment.

Well, with the deadline arriving today for Iran and the United Nations for Iran to suspend enrichment of uranium, let's get some perspective on this deadline and on Iran from a journalist who has spent a lot of time in the region. Afshin Molavi is author of "The Soul of Iran" and several other books. He's also a fellow at the New American Foundation.

Good to have you here with us once again.

AFSHIN MOLAVI, FELLOW, NEW AMERICAN FOUNDATION: Thank you, Daryn. It's a pleasure.

KAGAN: We are waiting to get a good look through this IAEA report. But a pretty good guess about how the Iranians will be reacting to these demands.

MOLAVI: Well, I think the -- how Iran responded on August 22nd remains the Iranian response. And on August 22nd, Iran essentially said, we do not view the idea of the suspension of uranium enrichment as a precondition for negotiations as a viable option. And I think that's going to stand. So this August 31st deadline is not going to change any of that.

And I think what they did, though, when they responded that way, they also offered that act of defiance, if you will, with an olive branch in some ways because Ali Larijani, Iran's chief nuclear negotiator, said we are ready for serious talks. So in a way, by doing that, it was a fairly shrewd move which split the alliance and now you find Russia and China saying now is not the time to talk about sanctions. France and Germany and the Europe Union saying now is the time to discuss this issue with Iran. And the United States is increasingly isolated in its continued push for sanctions right away after this deadline passes.

KAGAN: Well, let's talk about it a second, because the threat of sanctions, again, Iran trying to come off like, well, we don't care. You know, you don't scare us with this threat of sanctions. Do you think there's a possibility that Iran would come back and threaten sanctions? Perhaps talk about cutting oil sales or other things that they might do?

MOLAVI: Well, no, it's an important question because Iranian officials have said as much in the past. But I think with Iran right now they earned about 80 percent of their foreign currency earning from oil and gas exports. And I think that would be spiting themselves if they were to do anything like that. And with a weak private sector, with the stock market down, with real estate prices down and high levels of inflation, chronic unemployment, the last thing Iran would want to do is cut off its oil life line to the outside world.

KAGAN: How close do you think the average Iranian citizen is following this?

MOLAVI: I think they're following it very closely. But they're following it closely because the ordinary Iranian, as you and I have talked about in the past, Daryn, are very eager for engagement with the outside world. Very eager for engagement, in fact, with the United States.

The last time Iranians were asked this question was a few years ago and the pollster said, would you like our country to restore dialogue with the United States. Three out of four Iranians said yes. As a result, that pollster was thrown in jail because the authorities in Iran didn't like the findings that he published. So Iranians would like to engage with the outside world. And they still retain their desire for greater democracy and freedom. That has not changed.

KAGAN: As this day goes forward and the coming weeks, what are you watching? What signs from either side?

MOLAVI: I think what we need to watch very closely is Russia's response. Because in many ways, Russia holds a very key role here because -- China, it seems to me, would follow Russia's lead if Russia were to waiver and move closer to the United States position.

But I think what we face here, Daryn, is not just a crisis in Iran and the crisis over this nuclear issue. I think we're also facing a larger crisis of American diplomacy here. We have in some way emasculated our diplomats by telling them that they cannot talk with people who disagree with them. And there are many people in the Senate, people like Senators Chuck Hagel and Joe Biden, who are speaking out against this. And I think rightfully so.

We have a very talented American diplomat corps and there is this dangerous canard that has infected the American body politic that says engagement means endorsement, engagement means appeasement. It doesn't mean that at all. American diplomats would not go into a negotiating position and simply say, OK, I give up.

So I think what we need to watch here is Washington. Is Washington ready to engage in what Ali Larijani, the chief nuclear negotiator said, Iran is ready to engage in serious talks?

KAGAN: The role of diplomacy. A discussion that we could have even farther on another day. Afshin Molavi, thank you for your time.

MOLAVI: Thank you, Daryn.

KAGAN: And speaking of diplomacy and the United Nations, the U.S. Security Council has made a decision on Darfur and a peacekeeping force there. Let's go to our Richard Roth at the U.N. for more on that.

RICHARD ROTH, CNN CORRESPONDENT: Daryn, they've made a decision, but whether it can be carried out is another matter. The Security Council voting in favor of authorizing a peacekeeping force for Darfur, Sudan, maybe up to 17,000 peacekeepers. The big problem, they need the permission of Sudan to deploy that peacekeeping force.

The Security Council voted 12 in favor, three abstentions. Russia and China, who could have used their vetoes but didn't, and Qatar, the lone Arab representative of the Arab league, favors and supports the Sudanese government position. Sudan does not want the U.N. force in Darfur. Critics, human rights organizations say Sudan's government is helping to carry out what the U.S. has called in the past a genocide against black Africans in Darfur.

Back to you.

KAGAN: But what kind of limits does the U.N. peacekeeping force have in terms of numbers as we watch the troops being drawn into southern Lebanon as well?

ROTH: Well, that has not been decided because they're not even going to be there until Sudan says yes. President Bush may meet with Sudan's president here in the general assembly in September. That's the U.S.'s best hope so far to get Sudan to sign on. Otherwise, eventually it might face sanctions.

KAGAN: Richard Roth live from the U.N. We'll come back and talk to you about Iran a little bit later in the hour. Thank you.

President Bush is focusing on his Iraq War policy. His speech live in less than an hour. You'll see it here on CNN.

But first, two jobs on two hours of sleep. Was fatigue a factor in the crash of Comair Flight 5191? Ahead on CNN, the most trusted name in news. (COMMERCIAL BREAK)

KAGAN: Sleep-deprived? Well, actually, we'll get to that story in just a moment. A major mess this morning in the motor city. Detroit police say a massive truck used to haul gravel flipped over the I-94 overpass. It plunged onto the interstate below, and it crushed an SUV. Two people inside that vehicle were injured. Road screws scrambled this morning to clean up the mess and reopen I-94. They are also checking to make sure the overpass is still structurally sound.

Now to Kentucky, and was somebody sleep-deprived in the tower there? New developments to tell you about in the Comair crash. The NTSB says the Lexington airport controller on duty had little rest, but more than the FAA required, eight hours downtime between shifts.

CNN's David Mattingly is in Lexington.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Federal crash investigators reveal at the time of the Comair crash, the Lexington, Kentucky air traffic controller was not only doing two jobs, he was doing them on two hours of sleep. Forty-nine people died when a Comair commuter jet crashed into trees after turning onto the wrong runway early Sunday morning. The air traffic controller was working the overnight shift alone, and with very little down time.

DEBBIE HERSMAN, NTSB SPOKESWOMAN: On Saturday morning he went on duty at 6:30 a.m. He went off duty at 2:30 p.m. He then had nine hours off. He went back on duty at 11:30 p.m. and was on -- scheduled to be on duty until 8:00 a.m. the next morning.

MATTINGLY: Federal officials earlier confirmed to CNN the controller was working alone in violation of FAA policy and performing both radar and ground traffic duties. The Comair jet was his 17 flight of the night. He gave clearance for takeoff while guiding another flight on radar.

HERSMAN: A review of the tower tape shows that he was vectoring the American Eagle flight around weather at the time that he was working the accident airplane.

MATTINGLY: On Wednesday, a caravan of buses carried family members to the scene of the crash. Authorities were out in force to ensure privacy.

At the Lexington Blue Grass Airport, a large lighted barricade has been erected at each end of the short runway where Flight 5191 made its tragic wrong turn. Less than 100 yards away, a memorial continues to grow as people touched by the tragedy bring flowers and notes of sympathy.

(END VIDEOTAPE)

KAGAN: Our David... MATTINGLY: And Daryn, this air traffic...

KAGAN: Go ahead, David, sorry.

MATTINGLY: I'm sorry, go ahead, Daryn.

KAGAN: Well, I just was going to say that our David Mattingly is there in Lexington, Kentucky.

MATTINGLY: Well, Daryn, this air traffic controller, even though he didn't have a lot of sleep, still managed to give the proper instructions to this flight as it was taking off. He told them to go to the correct runway. So it's possible this sleep deprivation had nothing to do with the accident that followed.

KAGAN: All right. Still a lot of questions to answer there from Lexington. David, thank you.

It is deadline day, but Iran remains defiant, vowing it will not give up its nuclear program. We're watching developments from Tehran to the U.N.

And powering up and pushing toward the Carolinas. A live report on a reenergized Tropical Storm Ernesto, coming up on CNN, the most trusted name in news.

Also, are you tired of living paycheck to paycheck. Here is Valerie Morris with tips for getting some debt relief.

(BEGIN VIDEOTAPE)

VALERIE MORRIS, CNN CORRESPONDENT (on camera): Many Americans are drowning in debt. Getting out can be a daunting task. So some ways to begin gaining control of your finances?

First, leave your credit cards at home. Have a cash allowance each week, and when that is gone, so is the spending.

Next, negotiate lower rates on high interest cards. Call the company, explain your plan to take your business elsewhere unless they drop the rate. Then, consider transferring balances to low interest or zero interest cards but remember, there's almost always a window for when those promotional rates end, because the interest rate can then jump to double digits.

For more ideas, pick up "Money" magazine or online at CNNmoney.com.

I'm Valerie Morris.

(COMMERCIAL BREAK)

KAGAN: Today is the day the U.N. Security Council says Iran must end its nuclear activity, but Tehran is not budging. President Mahmoud Ahmadinejad says Iran will never give up its right to peaceful nuclear technology. The U.N. threatens sanctions, suspicious that Iran may actually be trying to build nuclear weapons. Any sanctions would begin with talks among the Security Council's five permanent members.

President Bush is defending his Iraq war policy this morning. Here is what you can expect to hear. Less than an hour from now, the president addresses the American Legion's national convention in Salt Lake City, Utah. He plans to restate his view that if the U.S. leaves Iraq before the job is done, the nation will face terrorists here at home. The president is expected to call the recent bloodshed and threats part of an ideological battle between freedom and extremism. The president's address comes ahead pivotal of midterm elections. Mr. Bush says these are not political speeches.

We have already had a preview of the president's speech. Mr. Bush spoke last night about Iraq and the war on terror when he arrived in Salt Lake.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraq is the central front in this war on terror. If we leave the streets of Baghdad before the job is done, we will have to face the terrorists in our own cities. We will stay the course. We will help this young Iraqi democracy succeed. And victory in Iraq will be a major ideological triumph in the struggle of the 21st century.

(END VIDEO CLIP)

KAGAN: Tropical Storm Ernesto intensifies. Here's what we know about that storm at this hour. The reinvigorated storm is heading toward the coast of the Carolinas. Residents along the Atlantic are worried more about Ernesto's soaking rains and potential flooding. The storm is expected to move inland, possibly into South Carolina, late today or early tomorrow.

CNN, once again, is your hurricane headquarters.

(WEATHER REPORT)

KAGAN: We're going to talk about Hurricane John in the Pacific, and it's a category-three storm. It is lashing Mexico's resort towns.

Harris Whitbeck is joining us from Cabo San Lucas -- Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hello, Daryn.

Civil defense officials here in Cabo San Lucas and in the entire region of the southern tip of the Baja Peninsula are preparing for Hurricane John. They've got about 160 public schools that would be used as shelters as shelters as mandatory evacuation orders come into effect. According to the civil defense here, close to 30,000 people are in areas that could be effected by Hurricane John. Thousands would be ordered to go to these temporary shelters. Meanwhile, flights with be canceled at some point today. Many of the flights back to the United States have already been oversold, and officials on many of the resorts and hotels along the beach here are telling those tourists who could not leave yesterday to just stay put, stay in their hotels where they will be taken care of. They stress that a hotel staff in general have training on dealing with hurricanes, and that they will do everything to keep people out of harm's way.

Civil defense authorities in -- on the peninsula say that their big concern is roads washing out. This is a very low-lying area. And as the storm brings in lots of water, lots of rain, there could be lots of flooding. A lot of the roads that connect to different communities on the peninsula could be washed out -- Daryn.

KAGAN: Well, I thought it was interesting reading on the wires that Mexican officials don't plan to give these locals any choice. They'll use the army to remove them from their low-lying homes if necessary.

WHITBECK: Well, that has been done before. The army has a plan called the DN3 plan, which is an emergency-response plan in which they bring in members of the military to deal with temporary refugees, dealing with handing out food, medicine, whatever might be needed, and in some cases, if necessary, they would be empowered to force people into the shelters.

KAGAN: And, Harris, Chad has a question for you.

CHAD MYERS, CNN METEOROLOGIST: I know you're much closer to the situation than we are, Harris. I mean, the storm was a category four yesterday knocked down to a category three as it came very close to the coast here. What do you know about damage around Puerto Vallarta and south of Puerto Vallarta. We're hearing that some of the areas could have had a foot of rain. You can look behind you and see what a foot of rain is going to do to that mountain side. It's going do the same thing to this mountain side. Are you getting any local reports at all?

WHITBECK: Well, we have heard that there -- as you say, there has been a lot of rain dumped along the Mexican coast, along the states of Halisco (ph) and a birth further north, near the port city of Massapan (ph). Lots of rain, as you say, nearly a foot of rain. But in general, people there seem to have been dealing with it pretty well.

As you know, Chad, the storm kind of like skirted the coast, but never really went inland, so it just dumped a lot of rain and a lot of wind there.

And as you mentioned, the mountains here on the peninsula are a big concern, possibility, potential for mudslides is big, and the possibility that these washes, these natural washes in the desert fill up with water and cut off roads is also a big concern here.

KAGAN: All right, thank you, Harris Whitbeck in Cabo San Lucas. More on that just ahead. Thank you.

Also in about 25 minutes we expect to hear from President Bush. He is in Salt Lake City giving the first of many speeches on an update on the fight on the war on terror. Still ahead, he's accused of sex crimes related to children. Polygamist sex leader Warren Jeffs prepares for an extradition hearing. A live report from Las Vegas on CNN, the most trusted name in news.

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KAGAN: To Nevada now. And polygamist sect leader Warren Jeffs has a date in a Vegas courtroom for a short -- in a short while. He is facing an extradition hearing. Who gets him first, Utah or Arizona?

Our Peter Viles is in Vegas and gives us a clue on that.

Peter, good morning.

PETER VILES, CNN CORRESPONDENT: Good morning, Daryn. The short answer to that question, as we understand it, is that Utah will get Warren Jeffs first. Now, the legal issues here are pretty simple. He's facing similar charges in Arizona and Utah that involve sex with children. He is accused in both states of forcing children, young girls, into marriage with older men. The penalty for that crime is more severe in Utah. In Utah, that is consider an accessory to rape, and the penalty is five years to life in prison. So, as we understand it, the prosecutors have worked out a deal that Utah will get the first shot at him, the first chance to prosecute him.

So the legal issue is not that complicated today. The sort of larger issue today is the theatrics, if you will, in the courtroom. Remember, this is a man about whom there's a tremendous amount of mystery. He was on the FBI's list of 10 most wanted fugitives this spring and summer. He is reported to have 40 to 70 wives. The FBI has said he has up to 10,000 followers. They thought he might be armed and dangerous while he was eluding arrest over the summer.

And so a tremendous amount of mystery. I talked to one reporter here who has been on this story for ten years out of Arizona, Daryn, who never once laid eyes on Warren Jeffs. So a lot of anticipation about just seeing him in the courtroom and how he handles himself -- Daryn.

KAGAN: Well, and so what happens to this community now, Peter?

VILES: That's a big open question. Is he such a driving force and a cohesive force that it can't survive without him? We just don't know. Certainly, prosecutors are hoping that people will come forward from these communities, right along the Arizona/Utah border, and testify against him and perhaps other leaders in the community.

But over the years, it has been hard to get people to speak out about him. So that's a bit of a mystery. And the FBI is saying 10,000 people were his followers. Do they follow someone else? And remember, this community and this religious sect predates Warren Jeffs. It's been there, in some form or another, for about a hundred years, when the Mormon church said that they didn't tolerate polygamy anymore. So it's not just his movement, but he is the leader of it. KAGAN: All right, Peter Viles, live in Vegas. Thank you. And we do expect to see live coverage of that extradition hearing at 12:30 Eastern. You'll see that here on CNN.

Health news is ahead. Harder to quit, easier to get hooked. A possible new clue to smoking addiction. That's ahead on CNN, the most trusted name in news.

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KAGAN: Breaking the habit, becoming even harder. That is according to a new report from the Massachusetts Department of Public Health. A study found that cigarettes are delivering more nicotine to the lungs, an increase of about 10 percent over the past six years. Tobacco companies are not commenting on the report.

We are standing by. About 25 minutes from now, President Bush begins a speech in Salt Lake City. He is focusing on the war on terror. You'll see that live here on CNN.

Also, powering up and pushing toward the Carolinas. A live report on a reenergized Tropical Storm Ernesto, coming up on CNN. This is the most trusted name in news.

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