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U.S. and Iraqi Troops Bracing For All-Out Warfare in Falluja; Fourth Day of Deliberations in Peterson Trial; "The Cafferty File"

Aired November 08, 2004 - 07:00   ET

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

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


BILL HEMMER, CNN ANCHOR: Good morning.
There are thousands of U.S. and Iraqi troops bracing for an all- out urban warfare in Falluja. Coalition forces making the first move on the edge of that town.

The Yasser Arafat health crisis turns personal. Arafat's wife lobs an explosive accusation at Palestinian officials.

And day four deliberation in Scott Peterson's trial. Why do jurors now want another look at Peterson's fishing boat?

All ahead on AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everybody. November 8th, Monday morning here, 7:00 in New York. Soledad is out today. Kelly Wallace helping us out today. Good morning to you.

KELLY WALLACE, CNN ANCHOR: Good morning. Great to be here.

HEMMER: Nice to have you back with us.

They are getting ready in Falluja. And again, as we watch and wait from Iraq today, about 10,000 U.S. Marines and Iraqi soldiers on the edge of that town are getting ready for an all-out assault on insurgents inside of the city.

In a moment, we'll hear from the former coalition spokesperson, Dan Senor. He is our guest here in New York. Also, we'll find out how he responds to those who say the attacks should have happened sooner. So, we'll get to Dan in a moment.

WALLACE: Also, Bill, as you know, deliberations resume today in the double murder trial of Scott Peterson. Last week, jurors asked to get another look at some of the evidence in the case, including Peterson's fishing boat. We'll talk to reporter Gloria Gomez about why that's important. We'll also ask her about an interview she did with Peterson that may end up playing a role in the jury's verdict.

HEMMER: Back with us after a few days off last week, Jack Cafferty.

WALLACE: Yay, welcome back! JACK CAFFERTY, CNN ANCHOR: What's taking so long in the Peterson thing? I mean, he's guilty. Let's convict him, get him executed, and go on to the next thing.

There is no question that President Bush owes a rather large debt of gratitude to the right wing of the Republican party. They turned out in huge numbers, allowing him to win a second term in the White House. How is he going to settle up with them? We'll take a look at the possibilities in a few minutes.

HEMMER: All right, Jack. Thanks.

We'll get to Falluja in a moment. Want to get to Daryn Kagan at the CNN Center with the news headlines this morning. And Daryn, good morning to you.

DARYN KAGAN, CNN ANCHOR: Bill, good morning.

Now in the news -- a high-level Palestinian delegation now plans to go forward with the trip to visiting ailing Palestinian leader Yasser Arafat. Perhaps within the hour, that trip will take place. The officials had postponed the trip after Arafat's wife denounced the planned visit. Speaking to the Arabic-language network, Al-Jazeera, Suha Arafat called the aides would-be inheritors and said they wanted to bury Arafat alive. The 75-year-old Arafat has been in a coma at a French hospital for more than three days.

Here in the U.S., jurors in the Scott Peterson trial are expecting to inspect his boat. The jury requested last Friday to take another look at the aluminum boat. That is according to Court TV. Prosecutors claim the Peterson used the boat to dump the body of his pregnant wife in San Francisco Bay. Jury deliberations resume at 11:30 a.m. Eastern this morning.

Former hockey player for the St. Louis Blues is back in federal court today for his sentencing hearing. Mike Danton pleaded guilty last July to charges stemming from a murder-for-hire case. Prosecutors said the former NHL player wanted to kill his agent. Danton now faces seven to 10 years in prison and a $250,000 fine.

And a strong earthquake hits northern Japan. Buildings rattled earlier today during the 5.9 earthquake. At least eight people are reportedly injured north of Tokyo in the same region hit by a deadly quake some two weeks ago.

More on that ahead, but right now, back to Bill in New York.

WALLACE: Actually, Daryn, I'm going to take it away from you at the moment. Thanks so much.

Time now for a first check of the forecast. Chad Myers is at the CNN Center with the latest weather update. Good morning, Chad. It is brisk here in New York City.

(WEATHER REPORT)

HEMMER: Chad, thanks.

Dan Senor is the former spokesman for the Coalition Provisional Authority in Iraq. He's back in the U.S. now, and back in New York this morning, talking about the latest in Falluja. Welcome back to you, and good morning.

DAN SENOR, FMR. CPA SPOKESMAN IN IRAQ: Good to be with you, Bill.

HEMMER: You've been on the telephone with people in Baghdad. What have they said to you so far?

SENOR: Well, Prime Minister Allawi returned from New York, where he was meeting with NATO just over the past few days. He consulted with them with the situation of Falluja. He's been consulting with the regional neighbors throughout the Middle East. He intends actually later this month to attend a conference in Sharm El Sheikh where he'll continue to update them on the situation in Falluja and the path to elections.

And he, yesterday, had a meeting with the Falluja Committee of the National Assembly -- of the sort of interim parliament, if you will -- and briefed them of the situation. Received a briefing. They had been negotiating with the Fallujan leaders.

And then, this morning, he held a press conference, where he talked about the specific provisions within the National Emergency Order that he is imposing, regulate public movements, impose curfews through most of the country, and beginning to allow operations -- Iraqi operations -- in key parts of Falluja to work alongside the Marines.

HEMMER: At this point, are you hearing about anything that could turn this assault around?

SENOR: Well, look, if the Fallujan leaders were somehow able to produce Abu Musab al-Zarqawi or produce other key players within the insurgency leadership, certainly that may change things. But Allawi's made clear that the path is dual tracked. There's going to be military operations where Iraqi security forces play key roles, I said, alongside the Marines.

But he is going to continue to set the political conditions. He's still going to keep a dialogue open. He's still going to have a diplomatic process that goes forward. He wants to be communicating with the Fallujan leaders to let them know that there's always a political process in motion that's very fluid, even while military operations are ongoing.

HEMMER: With regard to the hospital late last night, you believe it's significant that Iraqi special forces went into the hospital first with Marines on the outside. Why the significance?

SENOR: It is critical that Iraqi security forces play a prominent role in this operation. We have seen the nature of the insurgency basically has two camps. There's a domestic Iraqi insurgents -- member of the former regime who are basically in the Al Anbar province. And then, the foreign fighters, the professional terrorists, people like Zarqawi.

And we've seen over the last couple of months a little bit of rift between the two groups. They have been collaborating. One of the factors driving the rift is that Iraqis are now engaging Iraqis. Iraqis have a tremendous sense of national pride. And when the Iraqi insurgents are being confronted by Iraqi security forces, rather than just coalition security forces, rather than just American security forces, it changes the dynamic. They are less willing to put up a fight against Iraqi security forces, against their own, than they are foreigners.

HEMMER: Kofi Annan apparently wrote a letter at the end of last week saying this will do no good in terms of elections. It will do no good for the Iraqi people if the assault continues today in Falluja or at some point during the week.

What would you say to Kofi Annan after reading a letter like that?

SENOR: I would defer to Prime Minister Allawi and the Iraqis on that. They have been quite clear. They have the opposite view -- that confronting the situation in Falluja is a necessary step to elections. If we intend to have elections in January throughout the country, then we have got to confront the al Qaeda affiliates and the insurgents -- people like Zarqawi -- who are trying to prevent elections from happening in certain parts of the country.

If they are not confronted, elections cannot be moved forward. So, you know, I would defer to the Iraqis on this one.

HEMMER: One quick thing, too, about this piece in "The New York Times" this morning -- an editorial suggesting for the U.S. to do this right -- in other words, elections on the 31st of January. Secure the country, not just in places like Falluja, but towns like Ramadi, as well, throughout the Sunni Triangle.

You are going to need 40,000 more U.S. troops on the ground. Do you agree with that assessment?

SENOR: Look, I think it's premature to speculate on those sorts of numbers. I think right now we need to worry about Falluja and the immediate next steps. We are going to have two brigades of the Iraqi National Guard participating in the operation of Falluja, about three battalions of -- two to three battalions of the U.S. Marines. Let's let that process play out.

We're talking about 10,000 troops if you include the Iraqis and the Americans. Let that play out, and then we can do an evaluation of what we need in January.

HEMMER: Dan Senor, thanks for your time this morning.

SENOR: Good to be with you, Bill. Thanks.

HEMMER: All right. Back to Kelly now.

WALLACE: Thanks, Bill.

A story out of Australia -- heavy rains in Queensland caused major flooding and have left at least two people dead. The floods ravaged the Brisbane region after rapidly rising creeks and drains caused havoc. Motorists got stuck in flood waters when they attempted to cross swollen creeks -- Bill?

HEMMER: Kelly, the race of all races now concluding yesterday -- the New York City Marathon. What a day it was, too. Throngs of well wishers. We say throngs -- there were tens of thousands of people up and down the 26.2-mile route Sunday as thousands of runners -- 35,000, in fact -- went through the Big Apple's five boroughs. South Africa's Hendrik Ramaala won the men's race in just about two hours, nine minutes, and 28 seconds -- his first victory in New York. He also dropped out of the marathon during the Athens Olympics due to a pulled hamstring. Revenge for him on Sunday.

Britain's world record holder Paula Radcliffe won the women's race. She did it in two hours, 23 minutes, and seven seconds. We'll talk to Paula a bit later this hour here on AMERICAN MORNING.

Also want to mention our senior broadcast producer Ted Fine (ph) finished the race yesterday in about four hours. Well done, Ted.

Kelly, back to you.

WALLACE: Still to come, Bill -- the full assault on Falluja hasn't even begun. Its objectives will be much more narrow than expected. In fact, one of its main goals has already been accomplished.

And after three days of deliberations, the Peterson jury wants another look at some evidence. Are jurors trying to connect Scott Peterson to murder, or acquit him of it?

And a top job is waiting for one of four comics if they prove they are funny, witty, and charming. But they have to keep their cool under an intense spotlight, and they don't have much time.

That's all ahead here on AMERICAN MORNING.

(COMMERCIAL BREAK)

WALLACE: The Scott Peterson jury resumes its life and death deliberations today. The panel is being sequestered until they reach a verdict. Today will be their fourth day working behind closed doors.

Reporter Gloria Gomez with Sacramento TV station KOVR has covered the Peterson case from day one. She joins us from Redwood City, California. Good morning, Gloria. Thanks for being with us.

GLORIA GOMEZ, REPORTER, KOVR TV: Good morning. WALLACE: So, we understand that the jury on Friday afternoon today asked to see Scott Peterson's boat. This is the boat that prosecutors charge he used to dump wife Laci Peterson's body. What's the significance of this request from the jury, Gloria?

GOMEZ: Well, I think what they are trying to see mainly is what prosecutors said all along, that Scott Peterson dumped his wife's body out of this boat. But of course, the defense has argued, wait a minute, how do you know that? Because if you dump a body out of a boat or something similar in size, the boat would capsize. And of course, the defense has argued that if you believe he did do that, that Scott Peterson did do that, then why didn't do you a demonstration for the jury.

So, clearly, this jury wants to take another look at this boat to see if that's a possibility. And if juror number five, who is a doctor and a lawyer, is in charge of this jury, and he's the foreman, that he'll probably take this jury step by step on that.

WALLACE: Yeah, tell us a little bit of jury number -- person number five, the foreperson of this jury. He is a doctor/lawyer, as you said. What do we know about his style, and how is he likely to be leading the deliberations?

GOMEZ: Well, I can tell you he takes meticulous notes. I think he has up to 19 notepads. And -- can you imagine? If he goes step by step with this jury, we could be here a while. And he was the only one, when reporters weren't taking notes that some of the information that was coming out of court, he still was taking notes.

And so, if he's in charge, then you know he's going to take this jury in a very, very slow, meticulous, calculating way. And of course, that will be interesting to see how long this jury will be deliberating.

WALLACE: And Gloria, of course, you have been covering this trial from day one. Now you kind of find yourself involved in some way. The prosecution using a portion of an interview you did with Scott Peterson in his closing arguments. First let's let the viewers listen to a portion of that interview.

(BEGIN VIDEO CLIP)

SCOTT PETERSON, DEFENDANT: Look at my hands. You can see, you know, cuts here on my knuckles, numerous scars. I have -- I work on farms. I work with machinery. I know I cut my knuckle that day.

GOMEZ: On what day?

PETERSON: On Christmas Eve.

GOMEZ: Doing what?

PETERSON: Reaching in the toolbox of my truck and then into the pocket on the door. I cut it with my knuckle. There's a blood stain on the door. (END VIDEO CLIP)

WALLACE: Gloria, what's the significance here? Why did the prosecution want to show that interview where Scott Peterson is talking about some scrapes on his hand?

GOMEZ: Well, mainly because Defense Attorney Mark Geragos really opened the door for that. In his closing argument to the jury, he said there was no evidence of a strangulation. There were no cuts or marks on Scott Peterson's hands. Apparently, he forgot about my interview with Scott Peterson. But the prosecution didn't forget.

And as a matter of fact, during their rebuttal case, they said, "We have this videotape. Play for it the jury." So, this was really the last thing the jury saw before they went into deliberations.

And Scott Peterson, you know, basically said to me that, yeah, I cut myself that day. I mean, I didn't even really prompt him on that day, but he brought it up himself. He volunteered the information. So, that was clearly an indication.

Of course, Rick Distaso, who is a prosecutor in this case, he really demonstrated for the jury at the very end. He says, you know, "And that's why these marks were on his hand, because he was strangling Laci. And as he was strangling her, she was fighting for her life and she scratched him." And that was a very, very dramatic moment for the jury.

WALLACE: Gloria Gomez, we have to leave it there. Another day of deliberations beginning today. Thanks so much for being with us.

GOMEZ: Thank you.

HEMMER: Back to Iraq now, where thousands of U.S. and Iraqi troops are amassed in the desert, bracing for the long-awaited offensive against Falluja. War planes artillery overnight hammering insurgent targets ahead of the expected assault.

Lieutenant Colonel Pete Newell is a commander with Task Force 22 with the 1st Infantry Division. He is near Falluja. He joins us by way of videophone.

And sir, we want to say thank you for your time at such a busy time. But update our viewers -- by my watch, it's about 3:00 in the afternoon there. What's happened overnight and in the hours so far today on Monday?

LT. PETE NEWELL, COMMANDER, TASK FORCE 22: (INAUDIBLE) middle of the afternoon. You know, we have been outside the city since early this morning. Right now conducting safety operations in support of the Iraqi intervention force, should they need to enter the city sometime in the next couple of days.

Our grant (ph) was to ensure that they are out of mortar fire, out of small-arms fires, and have a means to get inside the city and create the environment to re-establish the rule of law in Falluja. HEMMER: Lieutenant, do you believe Zarqawi is in that town? Lieutenant, I'm going to try it again, if we can keep did the line open here. And again, we just ask our viewers to be patient with us for a moment here.

Do you believe Zarqawi is inside the town of Falluja, sir?

NEWELL: I have no idea. He could be anywhere.

HEMMER: You were quoted as saying over the weekend, "We're going to start at one end of the city, and we're not going to stop until we get to the other." Explain to us what you mean by that, from a military standpoint, going into that town?

NEWELL: (INAUDIBLE) in the Iraqi intervention force require our assistance. Obviously, we'll enter the city and start at one end and clear enough battle space for the IRF to get in and do what they do best, and that's take actually gain control of the population and re- establish the rule of law for the city of Falluja.

HEMMER: We are told two bridges that cross the river on the western edge of the town were taken over the weekend. A hospital in that same area was taken, as well. Why do you believe this hospital was so critical to your operation?

NEWELL: You know, (INAUDIBLE) a long ways out of my area of my operations. I heard the same thing this morning, but you know, I've not been to that side of the city. That's actually in another unit's area. So, I -- you know, I really couldn't tell you.

HEMMER: One more question while we have you: How many insurgents, do you believe, are inside the town?

NEWELL: We've heard anywhere (ph) from a couple of hundred to 1,200 to 1,500 to more than that. It's really difficult to give that an answer.

HEMMER: And can you give us a better understanding of the role that Iraqi forces are playing in this operation?

NEWELL: Actually, the Iraqi Intervention Force are really the important part of this operation. There's some things that they do that we just can't do. And their job is to get in, establish a rule of law, establish a rapport with the people of Falluja will return Falluja to a city that is ready for the Democratic process.

HEMMER: Lieutenant Colonel Pete Newell with the U.S. Army, Task Force 22 1st Infantry Division near Falluja, by way of videophone. And we thank you for speaking with us today. And if you get more information, we'll put you on the air whenever you have it.

Thank you, sir, again -- Kelly?

WALLACE: Thanks, Bill. Fascinating interview.

Still to come, as you saw in that interview, the circle is tightening around Falluja as the clock ticks down to an all-out ground assault.

And a battle has broken out over Yasser Arafat's money. He may be worth billions, but who gets the money? And by the way, where is it?

Stay with us. That's all right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Well, drivers breathing a bit of a sigh of relief at the gas pumps. Prices finally dropped just a bit. Andy Serwer's here on a Monday morning "Minding Your Business." Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Morning to you.

HEMMER: Still eight bucks a gallon in New York.

SERWER: Yeah, well...

HEMMER: But elsewhere...

SERWER: Yeah, well, but also you've got to cross the bridge to fill up, Bill. We keep trying to tell you that.

The price of oil been falling the past couple of days, and now the price of gas is following suit, down three cents last week to $2.01 a gallon. Price of oil at $48.90 this morning. Still not back down to $1.86 on September 10th. Look at those prices. That must be Cali. That's a lot. You've got to drive east to fill up.

Let's talk a little bit about the markets, because what a banner week it was last week. Price of oil falling, had a lot to do with that. So did that jobs report on Friday, and so did the election. It was just fine -- no tie-ups.

And so, the markets were up nicely. The Dow was up 360 points. And what have we got? A couple factors -- up two weeks in a row. Up nine sessions in a row. The biggest gain since early 2003 for the Dow, and the highest close for the S&P 500 since March of 2002. So, we are really cooking here, folks -- at least for the time being.

The bad news is it's a new week, and futures a little weak this morning. So, we will see what happens.

CAFFERTY: This gasoline thing -- gasoline's come down three cents a gallon. Oil dropped $5 a barrel.

SERWER: Yeah, even more.

CAFFERTY: That would be a 10 percent decline in the price of oil...

SERWER: Yeah.

CAFFERTY: ... and a -- what -- .02 percent decline in the price of gasoline? SERWER: That means -- the refiners are capturing that difference, meaning Exxon is making some big money right now.

WALLACE: ... takes a while to get to the customer...

SERWER: Yeah, oh, you're being nice. It takes a while, Kelly...

WALLACE: Takes a while...

SERWER: ... before it flows down to us poor folks.

CAFFERTY: Capturing is something that you do like this.

WALLACE: And you all see that Jack Cafferty's back from vacation...

SERWER: That's the capturing move, huh, Jack?

WALLACE: ... for "The Cafferty File" and the Question of the Day.

CAFFERTY: We need to convict Scott Peterson and get gas prices down.

WALLACE: How many people have you upset already this morning?

SERWER: Well, we're working on it.

CAFFERTY: It's early -- 7:25. I saw "Ray" over the weekend, by the way. It's a great movie.

Karl Rove, the president's chief political strategist, says President Bush will absolutely use his second term to spend the political capital that he earned during the election. No secret that evangelical Christians, part of Mr. Bush's conservative base, were a key to the president's win over John Kerry, and he owes them for that big time.

One of the ways the president may choose to try to repay them is by renewing his call for a Constitutional amendment banning gay marriage. Eleven states voted to outlaw gay marriage in last week's election. The exact form of the thank you note Mr. Bush plans to send his conservative base remains unknown, but here's the question: How far will the president go to repay his debt to conservatives? Am@cnn.com.

"Ray" is just terrific.

HEMMER: You like it?

CAFFERTY: Jamie Foxx is -- he ought to be nominated for an Oscar for this.

WALLACE: He's talked about.

CAFFERTY: He also was in that thing "Collateral Damage" (sic). He stole that movie from Tom Cruise.

WALLACE: Oh, he was fabulous in that.

CAFFERTY: He's going to get nominated for Best Supporting Actor for "Collateral Damage" (sic) and Best Actor for -- I'm doing 20- Second Pop here.

SERWER: He's getting in touch with his inner Toure.

CAFFERTY: No, I mean, the guy is -- he is some batch of talent, this kid. Very excellent movie.

HEMMER: Duly noted. Thank you, Jack.

CAFFERTY: Yeah.

HEMMER: Get a break here. "90-Second Pop" with Jack Cafferty is up in a moment here on a Monday morning.

(BEGIN VIDEO CLIP)

(voice-over): Is there anything worse than being insulted, humiliated, and taken advantage of by your boss? Yes, there is something even worse -- and the four comics competing for a dream job, and their auditions broadcast live on TV.

Stay with us on CNN.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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Aired November 8, 2004 - 07:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good morning.
There are thousands of U.S. and Iraqi troops bracing for an all- out urban warfare in Falluja. Coalition forces making the first move on the edge of that town.

The Yasser Arafat health crisis turns personal. Arafat's wife lobs an explosive accusation at Palestinian officials.

And day four deliberation in Scott Peterson's trial. Why do jurors now want another look at Peterson's fishing boat?

All ahead on AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everybody. November 8th, Monday morning here, 7:00 in New York. Soledad is out today. Kelly Wallace helping us out today. Good morning to you.

KELLY WALLACE, CNN ANCHOR: Good morning. Great to be here.

HEMMER: Nice to have you back with us.

They are getting ready in Falluja. And again, as we watch and wait from Iraq today, about 10,000 U.S. Marines and Iraqi soldiers on the edge of that town are getting ready for an all-out assault on insurgents inside of the city.

In a moment, we'll hear from the former coalition spokesperson, Dan Senor. He is our guest here in New York. Also, we'll find out how he responds to those who say the attacks should have happened sooner. So, we'll get to Dan in a moment.

WALLACE: Also, Bill, as you know, deliberations resume today in the double murder trial of Scott Peterson. Last week, jurors asked to get another look at some of the evidence in the case, including Peterson's fishing boat. We'll talk to reporter Gloria Gomez about why that's important. We'll also ask her about an interview she did with Peterson that may end up playing a role in the jury's verdict.

HEMMER: Back with us after a few days off last week, Jack Cafferty.

WALLACE: Yay, welcome back! JACK CAFFERTY, CNN ANCHOR: What's taking so long in the Peterson thing? I mean, he's guilty. Let's convict him, get him executed, and go on to the next thing.

There is no question that President Bush owes a rather large debt of gratitude to the right wing of the Republican party. They turned out in huge numbers, allowing him to win a second term in the White House. How is he going to settle up with them? We'll take a look at the possibilities in a few minutes.

HEMMER: All right, Jack. Thanks.

We'll get to Falluja in a moment. Want to get to Daryn Kagan at the CNN Center with the news headlines this morning. And Daryn, good morning to you.

DARYN KAGAN, CNN ANCHOR: Bill, good morning.

Now in the news -- a high-level Palestinian delegation now plans to go forward with the trip to visiting ailing Palestinian leader Yasser Arafat. Perhaps within the hour, that trip will take place. The officials had postponed the trip after Arafat's wife denounced the planned visit. Speaking to the Arabic-language network, Al-Jazeera, Suha Arafat called the aides would-be inheritors and said they wanted to bury Arafat alive. The 75-year-old Arafat has been in a coma at a French hospital for more than three days.

Here in the U.S., jurors in the Scott Peterson trial are expecting to inspect his boat. The jury requested last Friday to take another look at the aluminum boat. That is according to Court TV. Prosecutors claim the Peterson used the boat to dump the body of his pregnant wife in San Francisco Bay. Jury deliberations resume at 11:30 a.m. Eastern this morning.

Former hockey player for the St. Louis Blues is back in federal court today for his sentencing hearing. Mike Danton pleaded guilty last July to charges stemming from a murder-for-hire case. Prosecutors said the former NHL player wanted to kill his agent. Danton now faces seven to 10 years in prison and a $250,000 fine.

And a strong earthquake hits northern Japan. Buildings rattled earlier today during the 5.9 earthquake. At least eight people are reportedly injured north of Tokyo in the same region hit by a deadly quake some two weeks ago.

More on that ahead, but right now, back to Bill in New York.

WALLACE: Actually, Daryn, I'm going to take it away from you at the moment. Thanks so much.

Time now for a first check of the forecast. Chad Myers is at the CNN Center with the latest weather update. Good morning, Chad. It is brisk here in New York City.

(WEATHER REPORT)

HEMMER: Chad, thanks.

Dan Senor is the former spokesman for the Coalition Provisional Authority in Iraq. He's back in the U.S. now, and back in New York this morning, talking about the latest in Falluja. Welcome back to you, and good morning.

DAN SENOR, FMR. CPA SPOKESMAN IN IRAQ: Good to be with you, Bill.

HEMMER: You've been on the telephone with people in Baghdad. What have they said to you so far?

SENOR: Well, Prime Minister Allawi returned from New York, where he was meeting with NATO just over the past few days. He consulted with them with the situation of Falluja. He's been consulting with the regional neighbors throughout the Middle East. He intends actually later this month to attend a conference in Sharm El Sheikh where he'll continue to update them on the situation in Falluja and the path to elections.

And he, yesterday, had a meeting with the Falluja Committee of the National Assembly -- of the sort of interim parliament, if you will -- and briefed them of the situation. Received a briefing. They had been negotiating with the Fallujan leaders.

And then, this morning, he held a press conference, where he talked about the specific provisions within the National Emergency Order that he is imposing, regulate public movements, impose curfews through most of the country, and beginning to allow operations -- Iraqi operations -- in key parts of Falluja to work alongside the Marines.

HEMMER: At this point, are you hearing about anything that could turn this assault around?

SENOR: Well, look, if the Fallujan leaders were somehow able to produce Abu Musab al-Zarqawi or produce other key players within the insurgency leadership, certainly that may change things. But Allawi's made clear that the path is dual tracked. There's going to be military operations where Iraqi security forces play key roles, I said, alongside the Marines.

But he is going to continue to set the political conditions. He's still going to keep a dialogue open. He's still going to have a diplomatic process that goes forward. He wants to be communicating with the Fallujan leaders to let them know that there's always a political process in motion that's very fluid, even while military operations are ongoing.

HEMMER: With regard to the hospital late last night, you believe it's significant that Iraqi special forces went into the hospital first with Marines on the outside. Why the significance?

SENOR: It is critical that Iraqi security forces play a prominent role in this operation. We have seen the nature of the insurgency basically has two camps. There's a domestic Iraqi insurgents -- member of the former regime who are basically in the Al Anbar province. And then, the foreign fighters, the professional terrorists, people like Zarqawi.

And we've seen over the last couple of months a little bit of rift between the two groups. They have been collaborating. One of the factors driving the rift is that Iraqis are now engaging Iraqis. Iraqis have a tremendous sense of national pride. And when the Iraqi insurgents are being confronted by Iraqi security forces, rather than just coalition security forces, rather than just American security forces, it changes the dynamic. They are less willing to put up a fight against Iraqi security forces, against their own, than they are foreigners.

HEMMER: Kofi Annan apparently wrote a letter at the end of last week saying this will do no good in terms of elections. It will do no good for the Iraqi people if the assault continues today in Falluja or at some point during the week.

What would you say to Kofi Annan after reading a letter like that?

SENOR: I would defer to Prime Minister Allawi and the Iraqis on that. They have been quite clear. They have the opposite view -- that confronting the situation in Falluja is a necessary step to elections. If we intend to have elections in January throughout the country, then we have got to confront the al Qaeda affiliates and the insurgents -- people like Zarqawi -- who are trying to prevent elections from happening in certain parts of the country.

If they are not confronted, elections cannot be moved forward. So, you know, I would defer to the Iraqis on this one.

HEMMER: One quick thing, too, about this piece in "The New York Times" this morning -- an editorial suggesting for the U.S. to do this right -- in other words, elections on the 31st of January. Secure the country, not just in places like Falluja, but towns like Ramadi, as well, throughout the Sunni Triangle.

You are going to need 40,000 more U.S. troops on the ground. Do you agree with that assessment?

SENOR: Look, I think it's premature to speculate on those sorts of numbers. I think right now we need to worry about Falluja and the immediate next steps. We are going to have two brigades of the Iraqi National Guard participating in the operation of Falluja, about three battalions of -- two to three battalions of the U.S. Marines. Let's let that process play out.

We're talking about 10,000 troops if you include the Iraqis and the Americans. Let that play out, and then we can do an evaluation of what we need in January.

HEMMER: Dan Senor, thanks for your time this morning.

SENOR: Good to be with you, Bill. Thanks.

HEMMER: All right. Back to Kelly now.

WALLACE: Thanks, Bill.

A story out of Australia -- heavy rains in Queensland caused major flooding and have left at least two people dead. The floods ravaged the Brisbane region after rapidly rising creeks and drains caused havoc. Motorists got stuck in flood waters when they attempted to cross swollen creeks -- Bill?

HEMMER: Kelly, the race of all races now concluding yesterday -- the New York City Marathon. What a day it was, too. Throngs of well wishers. We say throngs -- there were tens of thousands of people up and down the 26.2-mile route Sunday as thousands of runners -- 35,000, in fact -- went through the Big Apple's five boroughs. South Africa's Hendrik Ramaala won the men's race in just about two hours, nine minutes, and 28 seconds -- his first victory in New York. He also dropped out of the marathon during the Athens Olympics due to a pulled hamstring. Revenge for him on Sunday.

Britain's world record holder Paula Radcliffe won the women's race. She did it in two hours, 23 minutes, and seven seconds. We'll talk to Paula a bit later this hour here on AMERICAN MORNING.

Also want to mention our senior broadcast producer Ted Fine (ph) finished the race yesterday in about four hours. Well done, Ted.

Kelly, back to you.

WALLACE: Still to come, Bill -- the full assault on Falluja hasn't even begun. Its objectives will be much more narrow than expected. In fact, one of its main goals has already been accomplished.

And after three days of deliberations, the Peterson jury wants another look at some evidence. Are jurors trying to connect Scott Peterson to murder, or acquit him of it?

And a top job is waiting for one of four comics if they prove they are funny, witty, and charming. But they have to keep their cool under an intense spotlight, and they don't have much time.

That's all ahead here on AMERICAN MORNING.

(COMMERCIAL BREAK)

WALLACE: The Scott Peterson jury resumes its life and death deliberations today. The panel is being sequestered until they reach a verdict. Today will be their fourth day working behind closed doors.

Reporter Gloria Gomez with Sacramento TV station KOVR has covered the Peterson case from day one. She joins us from Redwood City, California. Good morning, Gloria. Thanks for being with us.

GLORIA GOMEZ, REPORTER, KOVR TV: Good morning. WALLACE: So, we understand that the jury on Friday afternoon today asked to see Scott Peterson's boat. This is the boat that prosecutors charge he used to dump wife Laci Peterson's body. What's the significance of this request from the jury, Gloria?

GOMEZ: Well, I think what they are trying to see mainly is what prosecutors said all along, that Scott Peterson dumped his wife's body out of this boat. But of course, the defense has argued, wait a minute, how do you know that? Because if you dump a body out of a boat or something similar in size, the boat would capsize. And of course, the defense has argued that if you believe he did do that, that Scott Peterson did do that, then why didn't do you a demonstration for the jury.

So, clearly, this jury wants to take another look at this boat to see if that's a possibility. And if juror number five, who is a doctor and a lawyer, is in charge of this jury, and he's the foreman, that he'll probably take this jury step by step on that.

WALLACE: Yeah, tell us a little bit of jury number -- person number five, the foreperson of this jury. He is a doctor/lawyer, as you said. What do we know about his style, and how is he likely to be leading the deliberations?

GOMEZ: Well, I can tell you he takes meticulous notes. I think he has up to 19 notepads. And -- can you imagine? If he goes step by step with this jury, we could be here a while. And he was the only one, when reporters weren't taking notes that some of the information that was coming out of court, he still was taking notes.

And so, if he's in charge, then you know he's going to take this jury in a very, very slow, meticulous, calculating way. And of course, that will be interesting to see how long this jury will be deliberating.

WALLACE: And Gloria, of course, you have been covering this trial from day one. Now you kind of find yourself involved in some way. The prosecution using a portion of an interview you did with Scott Peterson in his closing arguments. First let's let the viewers listen to a portion of that interview.

(BEGIN VIDEO CLIP)

SCOTT PETERSON, DEFENDANT: Look at my hands. You can see, you know, cuts here on my knuckles, numerous scars. I have -- I work on farms. I work with machinery. I know I cut my knuckle that day.

GOMEZ: On what day?

PETERSON: On Christmas Eve.

GOMEZ: Doing what?

PETERSON: Reaching in the toolbox of my truck and then into the pocket on the door. I cut it with my knuckle. There's a blood stain on the door. (END VIDEO CLIP)

WALLACE: Gloria, what's the significance here? Why did the prosecution want to show that interview where Scott Peterson is talking about some scrapes on his hand?

GOMEZ: Well, mainly because Defense Attorney Mark Geragos really opened the door for that. In his closing argument to the jury, he said there was no evidence of a strangulation. There were no cuts or marks on Scott Peterson's hands. Apparently, he forgot about my interview with Scott Peterson. But the prosecution didn't forget.

And as a matter of fact, during their rebuttal case, they said, "We have this videotape. Play for it the jury." So, this was really the last thing the jury saw before they went into deliberations.

And Scott Peterson, you know, basically said to me that, yeah, I cut myself that day. I mean, I didn't even really prompt him on that day, but he brought it up himself. He volunteered the information. So, that was clearly an indication.

Of course, Rick Distaso, who is a prosecutor in this case, he really demonstrated for the jury at the very end. He says, you know, "And that's why these marks were on his hand, because he was strangling Laci. And as he was strangling her, she was fighting for her life and she scratched him." And that was a very, very dramatic moment for the jury.

WALLACE: Gloria Gomez, we have to leave it there. Another day of deliberations beginning today. Thanks so much for being with us.

GOMEZ: Thank you.

HEMMER: Back to Iraq now, where thousands of U.S. and Iraqi troops are amassed in the desert, bracing for the long-awaited offensive against Falluja. War planes artillery overnight hammering insurgent targets ahead of the expected assault.

Lieutenant Colonel Pete Newell is a commander with Task Force 22 with the 1st Infantry Division. He is near Falluja. He joins us by way of videophone.

And sir, we want to say thank you for your time at such a busy time. But update our viewers -- by my watch, it's about 3:00 in the afternoon there. What's happened overnight and in the hours so far today on Monday?

LT. PETE NEWELL, COMMANDER, TASK FORCE 22: (INAUDIBLE) middle of the afternoon. You know, we have been outside the city since early this morning. Right now conducting safety operations in support of the Iraqi intervention force, should they need to enter the city sometime in the next couple of days.

Our grant (ph) was to ensure that they are out of mortar fire, out of small-arms fires, and have a means to get inside the city and create the environment to re-establish the rule of law in Falluja. HEMMER: Lieutenant, do you believe Zarqawi is in that town? Lieutenant, I'm going to try it again, if we can keep did the line open here. And again, we just ask our viewers to be patient with us for a moment here.

Do you believe Zarqawi is inside the town of Falluja, sir?

NEWELL: I have no idea. He could be anywhere.

HEMMER: You were quoted as saying over the weekend, "We're going to start at one end of the city, and we're not going to stop until we get to the other." Explain to us what you mean by that, from a military standpoint, going into that town?

NEWELL: (INAUDIBLE) in the Iraqi intervention force require our assistance. Obviously, we'll enter the city and start at one end and clear enough battle space for the IRF to get in and do what they do best, and that's take actually gain control of the population and re- establish the rule of law for the city of Falluja.

HEMMER: We are told two bridges that cross the river on the western edge of the town were taken over the weekend. A hospital in that same area was taken, as well. Why do you believe this hospital was so critical to your operation?

NEWELL: You know, (INAUDIBLE) a long ways out of my area of my operations. I heard the same thing this morning, but you know, I've not been to that side of the city. That's actually in another unit's area. So, I -- you know, I really couldn't tell you.

HEMMER: One more question while we have you: How many insurgents, do you believe, are inside the town?

NEWELL: We've heard anywhere (ph) from a couple of hundred to 1,200 to 1,500 to more than that. It's really difficult to give that an answer.

HEMMER: And can you give us a better understanding of the role that Iraqi forces are playing in this operation?

NEWELL: Actually, the Iraqi Intervention Force are really the important part of this operation. There's some things that they do that we just can't do. And their job is to get in, establish a rule of law, establish a rapport with the people of Falluja will return Falluja to a city that is ready for the Democratic process.

HEMMER: Lieutenant Colonel Pete Newell with the U.S. Army, Task Force 22 1st Infantry Division near Falluja, by way of videophone. And we thank you for speaking with us today. And if you get more information, we'll put you on the air whenever you have it.

Thank you, sir, again -- Kelly?

WALLACE: Thanks, Bill. Fascinating interview.

Still to come, as you saw in that interview, the circle is tightening around Falluja as the clock ticks down to an all-out ground assault.

And a battle has broken out over Yasser Arafat's money. He may be worth billions, but who gets the money? And by the way, where is it?

Stay with us. That's all right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Well, drivers breathing a bit of a sigh of relief at the gas pumps. Prices finally dropped just a bit. Andy Serwer's here on a Monday morning "Minding Your Business." Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Morning to you.

HEMMER: Still eight bucks a gallon in New York.

SERWER: Yeah, well...

HEMMER: But elsewhere...

SERWER: Yeah, well, but also you've got to cross the bridge to fill up, Bill. We keep trying to tell you that.

The price of oil been falling the past couple of days, and now the price of gas is following suit, down three cents last week to $2.01 a gallon. Price of oil at $48.90 this morning. Still not back down to $1.86 on September 10th. Look at those prices. That must be Cali. That's a lot. You've got to drive east to fill up.

Let's talk a little bit about the markets, because what a banner week it was last week. Price of oil falling, had a lot to do with that. So did that jobs report on Friday, and so did the election. It was just fine -- no tie-ups.

And so, the markets were up nicely. The Dow was up 360 points. And what have we got? A couple factors -- up two weeks in a row. Up nine sessions in a row. The biggest gain since early 2003 for the Dow, and the highest close for the S&P 500 since March of 2002. So, we are really cooking here, folks -- at least for the time being.

The bad news is it's a new week, and futures a little weak this morning. So, we will see what happens.

CAFFERTY: This gasoline thing -- gasoline's come down three cents a gallon. Oil dropped $5 a barrel.

SERWER: Yeah, even more.

CAFFERTY: That would be a 10 percent decline in the price of oil...

SERWER: Yeah.

CAFFERTY: ... and a -- what -- .02 percent decline in the price of gasoline? SERWER: That means -- the refiners are capturing that difference, meaning Exxon is making some big money right now.

WALLACE: ... takes a while to get to the customer...

SERWER: Yeah, oh, you're being nice. It takes a while, Kelly...

WALLACE: Takes a while...

SERWER: ... before it flows down to us poor folks.

CAFFERTY: Capturing is something that you do like this.

WALLACE: And you all see that Jack Cafferty's back from vacation...

SERWER: That's the capturing move, huh, Jack?

WALLACE: ... for "The Cafferty File" and the Question of the Day.

CAFFERTY: We need to convict Scott Peterson and get gas prices down.

WALLACE: How many people have you upset already this morning?

SERWER: Well, we're working on it.

CAFFERTY: It's early -- 7:25. I saw "Ray" over the weekend, by the way. It's a great movie.

Karl Rove, the president's chief political strategist, says President Bush will absolutely use his second term to spend the political capital that he earned during the election. No secret that evangelical Christians, part of Mr. Bush's conservative base, were a key to the president's win over John Kerry, and he owes them for that big time.

One of the ways the president may choose to try to repay them is by renewing his call for a Constitutional amendment banning gay marriage. Eleven states voted to outlaw gay marriage in last week's election. The exact form of the thank you note Mr. Bush plans to send his conservative base remains unknown, but here's the question: How far will the president go to repay his debt to conservatives? Am@cnn.com.

"Ray" is just terrific.

HEMMER: You like it?

CAFFERTY: Jamie Foxx is -- he ought to be nominated for an Oscar for this.

WALLACE: He's talked about.

CAFFERTY: He also was in that thing "Collateral Damage" (sic). He stole that movie from Tom Cruise.

WALLACE: Oh, he was fabulous in that.

CAFFERTY: He's going to get nominated for Best Supporting Actor for "Collateral Damage" (sic) and Best Actor for -- I'm doing 20- Second Pop here.

SERWER: He's getting in touch with his inner Toure.

CAFFERTY: No, I mean, the guy is -- he is some batch of talent, this kid. Very excellent movie.

HEMMER: Duly noted. Thank you, Jack.

CAFFERTY: Yeah.

HEMMER: Get a break here. "90-Second Pop" with Jack Cafferty is up in a moment here on a Monday morning.

(BEGIN VIDEO CLIP)

(voice-over): Is there anything worse than being insulted, humiliated, and taken advantage of by your boss? Yes, there is something even worse -- and the four comics competing for a dream job, and their auditions broadcast live on TV.

Stay with us on CNN.

(END VIDEO CLIP)

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