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American Morning

Mideast Fighting Spreads; Rumsfeld in Iraq; Mumbai Blasts; Guarding the U.S. Trains; Back on Track

Aired July 12, 2006 - 06:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Good morning, everybody, Wednesday, July 12. I'm Miles O'Brien. Thanks for being with us.
BRIANNA KEILAR, CNN ANCHOR: And I'm Brianna Keilar in today for Soledad.

Here's a look at what's happening this morning.

O'BRIEN: Some breaking news out of Israel this morning, more heavy fighting, more kidnappings, this time on the border with Lebanon. Lebanese-based Hezbollah guerrillas say they have kidnapped two Israeli soldiers. CNN just confirmed Israeli troops have entered southern Lebanon.

KEILAR: And a day after his unannounced visit to Afghanistan, Defense Secretary Donald Rumsfeld is making a surprise visit to Iraq. Rumsfeld is meeting today with U.S. troops and the top U.S. commander in Iraq.

And President Bush heads to Germany today to begin a week long trip to Europe. It's his second trip to Europe in less than a month. The highlight is this weekend's G-8 economic summit in Russia.

O'BRIEN: Commuter trains running again in Mumbai, India, despite Tuesday's deadly attacks. One hundred and ninety killed in those train bombings. Authorities blaming Islamic militants.

In Chicago, subway trains running as usual this morning following a derailment during last night's rush hour in the loop (ph). Fire and smoke forcing hundreds of commuters to evacuate. No hint of terrorism on this one.

KEILAR: In California, a huge out-of-control wildfire has destroyed at least 30 homes and buildings in the upper valley just east of Los Angeles. Another 200 homes are threatened. And the fire has so far burned 17,000 acres.

We now go to Chad Myers at the CNN Center with the forecast.

Chad, what are you looking at?

CHAD MYERS, CNN METEOROLOGIST: We understand it's also burned a few of those buildings in Pioneer Town where they made so many westerns out there in the Yucca Valley. So we're going to have pictures of that, actually live pictures up here probably in an hour or two. (WEATHER REPORT)

Back to you guys in New York.

O'BRIEN: Thank you very much, Chad.

A dramatic escalation of violence in the Middle East this morning. Breaking news for us. It's happening this time on Israel's northern border with Lebanon. Lebanese-based Hezbollah fighters capturing two Israeli soldiers. And now Israeli forces have crossed the border into Lebanon. Israel is pounding Hezbollah positions with artillery and airstrikes as well. Israel has been on alert for Hezbollah attacks since it rolled its tanks into Gaza.

CNN's Paula Hancocks live now from Jerusalem where this story is unfolding -- Paula.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Miles.

Well it was two-and-a-half weeks ago that we saw an Israeli soldier being kidnapped by Palestinian militants. And now just four hours ago, we know two more Israeli soldiers have been kidnapped by Hezbollah militants.

Now the Israeli ground troops have moved in to southern Lebanon. We understand there is a fair bit of airstrikes and artillery from the Israeli side. They're trying to bomb bridges and also roads to make sure that the militants can't take this Israeli soldiers deeper into Lebanon. They're trying to restrict their movements to give them a better chance of trying to find them. We also know in attacks this morning, four more Israeli troops were injured.

Now we understand that Israeli Prime Minister Ehud Olmert is going to be meeting in a special Cabinet meeting in about seven hours from now to decide exactly what to do. But the defense minister's office has said they have given the Israeli military the green light to do whatever they need to do to get these soldiers back.

Now these statements are identical to what we heard two-and-a- half weeks ago when this other Israeli soldier, Gilad Shalit, was kidnapped in Gaza itself.

Now we've heard from the Prime Minister Ehud Olmert saying this is -- these are difficult days for Israel, saying they are threatened from the north and from the south. And also saying that the Hezbollah militants will pay a heavy price for this particular attack.

So attacks ongoing, we understand, in southern Lebanon. Troops moving into that area to try and find these two soldiers -- Miles.

O'BRIEN: Paula, is there any sense that there is any sort of coordination or communication between Hezbollah to the north and Hamas in Gaza?

HANCOCKS: Well they certainly have things in common, the fact they have a common enemy, that is it is Israel itself. And we know that there have been communications in the past. How much communication there was before this particular attack is very hard to know. And we know that there have been some celebrations in Lebanon itself from Hezbollah militants, the fact that they have been trying to do this kind of operation for years.

Now we know that Hamas militants, the Palestinian militants holding Gilad Shalit, have been trying to kidnap Israeli soldiers for years, as have Hezbollah itself. Because they want to make sure that if they have hold of an Israeli soldier, in this case Hezbollah has two, then they can ask for a prisoner swap.

There are many Hezbollah militants and Hamas militants in Israeli jails at the moment. So this is what they have been trying to do for years to secure themselves Israeli soldiers so they can ask for a prisoner swap, which, in the past, Olmert has said would not happen.

O'BRIEN: Paula Hancocks in Jerusalem, thank you very much -- Brianna.

KEILAR: Iraq's prime minister says they are battling insurgents who have plans to take over western Baghdad. That revelation comes just as Defense Secretary Donald Rumsfeld arrives in the Iraqi capital on another unannounced visit.

And we go now to CNN international correspondent Nic Robertson. He is live in Baghdad.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Brianna.

Well, Defense Secretary Donald Rumsfeld stopped off in a very large U.S. military base in the town of Balad at about 50 miles north of Baghdad. Before he came to the capital here, he met there with about 700 troops. He met with General George Casey, the commanding general here in Iraq.

He met with the troops, answered their questions about their battle against the insurgency, about all sorts of issues. He had a standing ovation at that meeting. Balad is a very large base. It has -- just to give you an idea of the size of it, it has three swimming pools on that particular base and it's where the most, perhaps advanced, U.S. medical facility is in Iraq for treating troops.

He has now come to Baghdad, we understand. He is expected to meet with Prime Minister Nuri al-Maliki. Nuri al-Maliki just concluded a session with his Parliament where he has taken some very, very tough questioning from parliamentarians. He just laid out his current assessment of the situation in Baghdad, saying that insurgents don't control the militias, don't control areas of the capital. This is after intense sectarian violence over the weekend.

Parliamentarians were saying, OK, well who are these groups in these areas? What are you doing? What are your specific successes? So the prime minister here has taken some very tough questioning. It seems that Defense Secretary Rumsfeld, his question-and-answer session with troops at Balad was somewhat easier -- Brianna. KEILAR: Nic Robertson live for us from Baghdad.

Thank you, Nic.

Meanwhile, there is a new wave of violence in Iraq this morning. Seven people were killed and at least 20 injured after a suicide bomber walked into a restaurant in Baghdad today and blew himself up.

Less than an hour earlier, a car bomb exploded in the central part of the city, killing two people and injuring two others -- Miles.

O'BRIEN: In Mumbai, India, a tense commute today for millions who use mass transit there. A series of synchronized explosions aboard trains and station platforms yesterday killing nearly 200 people, injuring at least 400.

CNN's Seth Doane on the phone now from Mumbai, formerly known as Bombay.

Seth, what can you tell us?

SETH DOANE, CNN CORRESPONDENT: Thanks, Miles.

Well a lot of people were waiting for daybreak here, very anxiously through the night. Last night of course the series of bomb blasts struck at rush hour. The people were ready for day to break here in Mumbai to see what the greater impact would be.

And we spent a lot of time around the city going to train stations here and really saw a tale of two cities, if you will. Some people saying, look, I'm going back to work, we're riding the train, let's show terrorists, in essence, that they won't stop us from going about our everyday lives. And we also spent time in hospitals with those injured and with families who were grieving the loss of loved ones. So it is two very different stories as this develops -- Miles.

O'BRIEN: Seth, tell us about what was evident in the way of security today.

DOANE: The security is kind of tough to see here. I mean you go into these train stations and there does not appear to be any heightened security at all. We were in New Delhi, the capital, last night when these bombings first took place and flew here to Mumbai and had read a lot about the reports of heightened security in the cross metropolitan areas. Across India and Menz (ph) certainly focusing on airports and railway stations. But what I have seen on the ground does not seem that out of the ordinary -- Miles.

O'BRIEN: Seth Doane on the line from Mumbai, India, thank you very much.

Security definitely tightened in the U.S. because of the Mumbai bombings as we begin our "Security Watch" here.

New York Police are checking subway commuters' bags this morning. Extra police are guarding the train stations, tunnels and bridges. Here is Mary Snow with more.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): Following the deadly explosions on commuter trains in Mumbai, India, New York officials ordered stepped up security during their rush hour. The police commissioner says there is no specific threat to New York, that they are acting out of precaution.

COMM. RAY KELLY, NYPD: Is it an event part of a worldwide operation, a worldwide cooperate (ph), we don't know. But we're going to do what we think is prudent in this situation.

SNOW: That meant increasing measures the police department implemented since the Madrid and London bombings. For example, doubling random bag searches, deploying explosive detection units like these. Officials declined to discuss any more specifics, saying they prefer them to be unpredictable to keep possible attackers off balance.

Mayor Bloomberg says an attack on any transit system in the world is a serious warning.

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: Vigilance is just the reality of the post 9/11 world.

SNOW: Security was ratcheted up at commuter lines, including New Jersey's commuter PATH stations, which were specifically mentioned in a foiled plot that led to several recent arrests overseas. Besides trains, officials said security would be tighter on ferries as well. Other cities are also being vigilant following the Mumbai attacks.

In Atlanta, a spokesman for the Marta train says security was increased because of world happenings. In Los Angeles, the Metro Link redeployed some of its officers to busier stations. And in Boston, officials say they'll be thoroughly checking trains and buses and adding more police at key stations.

(END VIDEOTAPE)

Now other cities like Miami, Washington, D.C. and San Francisco say while they didn't take any specific steps yesterday, security has been heightened since the Madrid and London bombings -- Miles.

O'BRIEN: Mary, have you had a chance to ride the subways yet post this incident? And if so, what did you see?

SNOW: I did see, Miles, at the evening rush hour last night heightened security, more random bag searches, police waiting in the station. Also at this particular station, we saw the devices where police take swabs from people's bags and test it for explosives. They were doing that on a random basis.

O'BRIEN: Mary Snow in Herald Square, thank you very much.

Stay tuned to CNN day and night for the most reliable news about your security -- Brianna.

KEILAR: Happening in America now.

Police in Phoenix say 13 different shootings are probably connected to a set of earlier assaults. The recent shootings began in May, but investigators believe they are linked to another series of shootings that began in May 2005 that killed four people. They are now searching for the same suspect or suspects.

And in Boston, a section of a Big Dig highway tunnel remains closed to commuters this morning after a fatal accident. A woman was killed Tuesday when concrete ceiling slabs fell and crushed her car. Governor Mitt Romney said he will take legal action to remove the head of the Massachusetts Turnpike Authority.

Also in Massachusetts, a legal battle is brewing over same-sex marriage. Legislators will consider a proposed constitutional amendment today to define marriage as solely between a man and a woman. It comes more than two years after the first gay and lesbian couples took their wedding vows.

The power is back on in western Massachusetts this morning after a series of fast-moving storms left thousands of people without electricity. Two tornadoes touched down in the rural town of Wendell Tuesday afternoon damaging homes and toppling trees and power lines. No one was injured.

And Ohio is dealing with another round of severe weather. Tornadoes touched down in four counties in the southwestern part of the state on Tuesday, ripping up roots and causing minor damage. No one was seriously injured. A day earlier, heavy rain caused flash flooding in parts of northeast Ohio.

And in eastern New Hampshire, how much would you pay for this car? Less now that some of the windows are cracked and there are 100 golf sized -- golf ball-sized dents on it. A hail storm pummeled the town of Exeter, including a car dealership there.

O'BRIEN: Still to come on the program, it wasn't terror but it was terrifying just the same. Hundreds of Chicago subway commuters chased by smoke and fire. We'll tell you how it happened and how well the trains are running this morning.

KEILAR: Columnist Robert Novak reveals one of his sources in the CIA leak scandal. Find out which White House insider leaked the story.

O'BRIEN: And it's a big day in space for the Discovery astronauts. Today's mission, to see if bondo or sort of like bondo works in space.

KEILAR: And we've got Carrie Lee here. She will have your business headlines.

CARRIE LEE, CNN CORRESPONDENT: Good morning, everyone. The European Union fining Microsoft over $350 million for failing to comply with a landmark anti-trust order. We'll have that story and more coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Happening this morning.

Two Israeli soldiers captured by a Lebanese-based Hezbollah guerrillas. Israeli forces have responded by rolling in to southern Lebanon.

The death toll rising from Tuesday's train bombings in Mumbai, India, 190 now dead. Authorities suspect Islamic militants behind the attacks.

And live pictures from space right now. This is the Unity module on the left. Astronaut Piers Sellers suiting up, getting ready, going through his check list there, about to step out into space with his comrade Mike Fossum. They'll be testing some repair methods for a shuttle's heat shield today. We'll keep you posted -- Brianna.

KEILAR: A section of Chicago's subway is back up and running this morning after a train derailed and caught fire. Hundreds of soot-covered passengers were evacuated during last night's rush hour, but no one was seriously hurt. Investigators have ruled out terrorism as a cause, but crews are trying to figure out exactly what went wrong.

CNN's Jonathan Freed updates us from Chicago.

(BEGIN VIDEOTAPE)

JONATHAN FREED, CNN CORRESPONDENT (on camera): It was just after 5:00 p.m. Central Time during rush hour here in Chicago that a subway train loaded with people was leaving downtown, heading along its usual route in the direction of O'Hare Airport. Didn't get very far, because the last car of this eight-car train derailed.

Officials now tell us that both the front and rear wheels of this train car derailed. And they say the sequence is that after the derailment there was a spark, a fire and then smoke. That is their best guess.

Now I spoke to one person who was on board that train. And he said it took just seconds for it to completely fill up with smoke. He said that he observed what he described as an electrical flash and then he saw white smoke, followed by grey smoke, followed by black smoke. And he said people were worried that it might be a terrorist attack and they didn't have complete information. It was all happening so quickly.

So they moved along the tunnel, they said for about 300 yards, until they were directed to an exit staircase. And then they came up above ground right here, just outside of downtown Chicago. And people were treated and transported to hospital. Now officials are telling us that 10 feet of the third rail was damaged and that about 250 feet of track is spread apart. And they say it's not clear whether that was preexisting or might have caused this incident.

Jonathan Freed, CNN, Chicago.

(END VIDEOTAPE)

KEILAR: Time for a check of your weather now. Chad Myers is at the CNN Center.

Hey, -- Chad.

MYERS: Hi, Brianna.

(WEATHER REPORT)

Back to you, -- Miles.

O'BRIEN: Thank you, Chad.

Microsoft apparently doesn't like to share very much and now the computer juggernaut will have to pay the price.

And later, we'll jump the couch or rather the crib. You know there was a time when scenes like this were everywhere, the old Tomkat scene. So where in the world is baby Suri? Inquiring minds want to know. Stay with us.

(COMMERCIAL BREAK)

KEILAR: Some of the most popular stories on CNN.com right now.

People in Mumbai, India are getting back on commuter trains this morning, just one day after those same rail lines were rocked by a series of explosions that killed 190 people.

And Robert Novak says he told prosecutors who his source was for the story that outed CIA operative Valerie Plame. The syndicated columnist revealed for the first time that he has cooperated fully in the CIA leak investigation.

And little Suri is still MIA from the public eye. Tom Cruise and Katie Holmes' baby girl still hasn't been seen since her birth in April. Seems like an interesting departure for the very public couple.

O'BRIEN: Very little and secretive that couple, that's for sure.

All right, Carrie Lee, here's the question for you.

LEE: OK.

O'BRIEN: When a $2.4 billion loss is an improvement, you've got trouble, don't you? LEE: You're talking about Delphi?

O'BRIEN: Yes.

LEE: OK. Well first we're going to talk about Microsoft and then we'll get to Delphi.

O'BRIEN: You're not -- I got ahead of the game.

LEE: A couple of different stories here. Let's start with Microsoft because the news just came out within the last hour. Microsoft being fined $357 million by the European Union. The fine is punishment for failing to carry out anti-trust sanctions.

Now this all stems from a big 2004 landmark anti-trust case. Most of you probably remember that. The E.U. is saying it wants Microsoft to share information to help its rivals develop software that works with Windows.

Well Microsoft says that that information is patented, that the E.U. is forcing it to hand over its information and give rivals a leg up. Microsoft says it has been working on complying, but taking some time to do that.

Meanwhile, Microsoft does have $34 billion cash on hand. So I'm sure they'll be able to pay this without much of a hit to the company.

O'BRIEN: Yes, maybe they can help out Delphi with that money. Yes.

LEE: Delphi, yes, GM's big auto parts supplier here, just out with second quarter numbers, reporting a $2.4 billion loss in 2005, but that's only half as much as it lost in 2004. A couple of big reasons here, higher raw material costs, pricing pressures. The company does, though, expect some improvement later this year after the departure of over 12,000 workers. They took early retirement and buyout offers. Delphi's buyout tied with GM's buyout for those workers.

And finally a check on the markets. We are expecting a mixed session at the start this morning. Here's a look at what happened yesterday. Stocks up a little bit across the board. The Dow had been higher by as much as 75 points. But it looks like we're seeing a little bit of jitteriness over the second quarter profit reporting season. You know Alcoa out first in the Dow 30 and the numbers weren't so great.

So, that's what's happening so far this morning.

O'BRIEN: Thank you, -- Carrie Lee.

LEE: OK, my pleasure.

KEILAR: Thank you.

And the morning's top stories are straight ahead, including Defense Secretary Donald Rumsfeld fresh from Afghanistan lands in Iraq. And we're live in Baghdad.

And breaking news this morning, Middle East violence now spreading into Lebanon. Two more Israeli troops abducted. Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Get the latest news every morning in your e-mail. Sign up for AMERICAN MORNING Quick News at CNN.com/am.

Still to come on the program, a major chapter in the CIA leak case comes to an end; but there's at least one cliffhanger, columnist Robert Novak names a name but not names plural. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Happening this morning.

Israeli troops moving in to southern Lebanon. The move follows the kidnapping of two Israeli soldiers by Lebanon-based Hezbollah guerrillas.

A day after his unannounced visit to Afghanistan, Defense Secretary Donald Rumsfeld making a surprise visit to Iraq. Rumsfeld meeting today with U.S. troops and the top U.S. commander in Iraq.

And the death toll is rising from Tuesday's train bombings in Mumbai, 190 people are now dead. Authorities suspect Islamic militants behind the attacks.

Good morning to you, I'm Miles O'Brien.

KEILAR: And I'm Brianna Keilar in today for Soledad.

O'BRIEN: Good to have you here.

KEILAR: Thank you. It's great to be here.

O'BRIEN: All right.

KEILAR: Going to the headlines now.

Security in Iraq foremost on Defense Secretary Donald Rumsfeld's mind as he makes another unannounced visit to Iraq. That trip includes another question-and-answer session with U.S. troops.

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