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American Morning
Airstrike In Somalia; Iraq Gun Battles; Malibu Wildfire; Tech Talk
Aired January 09, 2007 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: A developing story. A U.S. war plane fires on a suspected al Qaeda camp in Somalia. The target, the casualties and the timing all ahead in a live report from Africa.
MILES O'BRIEN, CNN ANCHOR: Start your clocks. Democrats leading the new Congress, kicking off their first 100 hours days after swearing in. Are they serious about getting something done.
California burning. High winds push a wildfire through beachfront mansions in Malibu.
S. O'BRIEN: And words that changed a nation. How Dr. Martin Luther King faced down violence with words in one of America's most racially divided city. A page from his private library and the Birmingham jail, only on this AMERICAN MORNING.
Welcome back, everybody. Good morning. It's Tuesday, January 9th. I'm Soledad O'Brien.
M. O'BRIEN: And I'm Miles O'Brien. Thanks for being with us.
We begin on another front on the war on terror. A developing story on the horn of Africa. At least one U.S. air strike on al Qaeda operatives in southern Somalia last night. It's the first acknowledged U.S. military action in Somalia since the deadly Blackhawk down incident back in 1993. We have two reports for you -- Jamie McIntyre at the Pentagon, Barbara Starr in Nairobi, Kenya. First to our senior Pentagon correspondent Jamie McIntyre.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN CORRESPONDENT: Two senior Pentagon officials tell CNN that the U.S. carried out an air strike along the southern tip of Somalia that was aimed at killing two suspected al Qaeda operatives who were believed to be hiding along the Kenya border. The attack was carried out by a U.S. Air Force special operations AC-130 gunship, a modified C-130 cargo plane outfitted with a rapid firing, side mounted gun that can deliver a devastating volley of cannon fire against ground targets. The AC-130 typically flies low, circling the target while firing its 105 mm cannon. It can flatten a building within minutes.
The U.S. had been tracking several suspected members of al Qaeda in Somalia after they fled the capital of Mogadishu, chased out by Ethiopian troops. Pentagon officials would not specifically name who was targeted in the air strike, but did confirm that among the suspects being tracked was Fazul Abdullah Mohammed, who's on the FBI's most wanted list for alleged involvement in the bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, in 1998. The other suspect was described as a senior al Qaeda operative.
U.S. military sources say the aircraft carrier, USS Eisenhower, was moved out of the Persian Gulf and into the Arabian Sea so its aircraft would be within striking distance in case they were needed for the attacked, but none of its war planes were involved.
At this point, sources say there is no confirmation that the al Qaeda suspects were actually killed in the attack, although the U.S. is trying to get information that would answer that question.
Jamie McIntyre, CNN, the Pentagon.
(END VIDEOTAPE)
S. O'BRIEN: The air strikes were carried out in southern Somalia, which is near the border with Kenya. Pentagon correspondent Barbara Starr has been in Nairobi, Kenya, for the last week, reporting on the conflict and also al Qaeda's rise in Africa.
Barbara, good morning.
BARBARA STARR, CNN CORRESPONDENT: Good morning to you, Soledad.
U.S. and African intelligence services had been collaborating for weeks on the manhunt for these al Qaeda operatives.
(BEGIN VIDEOTAPE)
STARR, (voice over): U.S. officials here in east Africa tell CNN that al Qaeda operatives were developing the ability to attack U.S. targets, just as they did in 1998, when U.S. embassies were bombed in Kenya and Tanzania, killing hundreds. Intelligence shows that after an Islamic militia took power in Somalia in June, al Qaeda stepped up its operations there. Camps taught radical Islam to young men, weapons flowed in from east Europeans arms dealers and money from the Middle East. One official said, "we just couldn't live with it any more. We were worried."
REAR ADM. RICHARD HUNT, COMMANDER, TASK FORCE HORN OF AFRICA: And that's what we were really concerned about, is there seemed to be much more recruiting, much more training going on. They were positioning themselves to expand their area of influence beyond the Somali borders.
STARR: Three al Qaeda operatives, accused in the embassy bombing, have been hiding in Somalia for years. The U.S. believes they were closely tied to the Islamic group the ICU. Neighboring Ethiopia was also worried by the prospect of a hard-line Islamic regime next door. Its invasion to oust the Islamic militia met with no objections from Washington. The new Somali foreign minster says his country now wants U.S. troops back more than a decade after they withdrew. ISMAEL HURREH, SOMALI FOREIGN MINISTER: So more than anything else, we want the Americans to help us to train an efficient security force.
(END VIDEOTAPE)
STARR: And, Soledad, African officials here say they do not believe the Islamic militia and its al Qaeda ties, they don't believe any of it has just melted away yet. They are very concerned here in east Africa that al Qaeda still has operating cells here, is regrouping and that there may be a new insurgency here in Africa. Here in Kenya of course, we are standing just a short distance from where the former U.S. embassy was bombed by al Qaeda in 1998. Here in east Africa, the threat of al Qaeda remains very real.
Soledad.
S. O'BRIEN: Barbara Starr is in Nairobi, Kenya, for us this morning.
Thank you, Barbara.
Miles.
M. O'BRIEN: Breaking news from Iraq. A major gun battle erupting in the middle of Baghdad as we speak. CNN's Arwa Damon is right in the middle of it. She's on the phone now, embedded with U.S. troops.
Arwa, what can you tell us?
ARWA DAMON, CNN CORRESPONDENT: Miles, it's really it's some of the more intense fighting that the capital has seen in quite some time. We are in an area that's called Haifa Street. It is essentially in the center of the city and the gun battle here has been raging for seven hours now.
U.S. and Iraqi troops arrived here on site after a series of days that follow a number of clashes between the Iraqi army and the insurgents that operate in this area, including Sunni extremists. You can hear the gun battle still going on outside right within the area that I am standing in. U.S. and Iraqi forces see anything from mortar rounds, rocket propelled grenades, machine gun fire and small arms fire. They believe that the insurgents that they are fighting out there are those that will fight to the death.
Searching overhead there are Apache helicopters. We have seen them move in (INAUDIBLE) targets. We have seen the U.S. and Iraq security forces trying to move through, clear building by building, but it is really slow going out there because of the intensity of the fire fight. In fact, so intense that at one point U.S. forces had to move from their position on a rooftop because the bullets were coming in so close, ricocheting off of the building opposite them. They had to take cover inside. This gun battle is still going on.
Mile. M. O'BRIEN: Arwa, do you have a sense that this is a coordinated attack by the Sunni insurgency?
DAMON: Well, Miles, this is definitely an operation that probably led to the insurgents that we're seeing out there, trying to coordinate and organizes themselves. The troops again, as they are here, under cover of darkness when they arrived, within minutes, actually, the first gunshots were heard shot at them by the insurgency. As the day has progressed we have seen (INAUDIBLE) maneuvers and tactics by the insurgents.
But the aim of this operation is actually to try to route out, draw out the insurgents, if you will, so that they can confront them. They are trying to clear this area once and for all. It is one of the main trouble spots in Baghdad where U.S. and Iraqi forces face the Sunni extremist element of the insurgency.
M. O'BRIEN: In talking with the troops whom you are embedded with, the 3rd Striker Brigade of the Second Infantry, did they anticipate this kind of resistance or did this catch them by surprise a little bit?
DAMON: Well, Miles, some of them say that they did because over the last few days they have been called in as quickly reaction forces to this area. In fact, 48 hours ago, on Sunday, there was another fierce battle here. They were called in as backup for the Iraqi army forces. Eight Iraqi army soldiers were killed. In fact, executed in this very area after they ran out of bullets. So they knew what they could potentially expect.
But at the same time, there have been a number of instances in the past where U.S. forces have rolled into an area and they have basically seen the insurgents melt away. The troops that we are talking to, some are saying they expected this, some are saying they are not, but all of them are saying that this is the most intense fighting of their experience here in the capital.
Miles.
M. O'BRIEN: And, Arwa, you're with U.S. troops, you're embedded with U.S. troops. Are Iraqi forces a part of this fight as well?
DAMON: I'm sorry, Miles, can you repeat that question?
M. O'BRIEN: Are there Iraqi forces fighting, coordinated with the U.S. forces, on Haifa Street?
DAMON: Yes, Miles. This is pretty much a 50/50 split in terms of numbers between U.S. and Iraqi security forces. Again, this is an area that has been under Iraqi army control for quite some time and they requested U.S. backup to coordinate and carry out this operation. We believe that there are about 500 to 600 Iraqi army soldiers, about 400 to 500 U.S. troops out here on the ground right now.
This is one of the clear examples, though, of the necessity of the U.S. troops presence here in the capital. The Iraqi army wanted U.S. forces with them for a number of reasons. One, they're better able to coordinate these kinds of operations. Two, they have better weapons. And, three, they have that crucial air support and we have seen them put to use a number of times throughout the day.
Miles.
M. O'BRIEN: CNN's Arwa Damon right in the middle of it. Please be safe as you're embedded with U.S. troops there in the midst of this fire fight.
Also watching things from his perch at our bureau inside the green zone is CNN's Ryan Chilcote.
Ryan, how far away are you from Haifa Street and this battle where Arwa is embedded and watching it unfold?
RYAN CHILCOTE, CNN CORRESPONDENT: Miles, we are probably a couple of miles away from Arwa. We are actually outside of the green zone, but we are in a safe position here. Nonetheless, as you can see, we've taken some security precautions.
What we have been watching for the last couple of hours now are fixed wing aircraft. The U.S. military's fixed wing attack aircraft hovering the skies over the Iraqi capital. They have left in just the last few minutes and we are seeing Apache attack helicopters now, the so called AH-64s.
These are the things that the U.S. military can add to the fight here in Iraq that the Iraqis don't have yet. They simply don't have any attack aircraft and they don't have any Apache attack helicopters. That is what is operating right now over central Baghdad. Quite unusual. Very rare to see U.S. aircraft in such large numbers and for such an extended period of time over the Iraqi capital.
Obviously what they are doing and what you have heard from Arwa is operating in support of U.S. and Iraqi troops who are on the streets in a gun battle right now with an unknown number of insurgents. Those aircraft obviously brought in to provide support for them. The Apache attack helicopters would be looking for targets that the U.S. military and the Iraqis on the ground can't get to themselves. That's what they would be doing, looking for snipers, looking for insurgent positions that somehow are concealed from U.S. and Iraqi troops.
The fixed wing aircraft that we have seen also and have just the left the area, they are not over the Iraqi capital right now, they would be operating together with ground teams that would be guiding them. We did not see them fire at all. They could have just been up there as a deterrent. But it has been an unusual show of force and unusually large battle in central Baghdad, all playing off as the Iraqis anticipate the U.S. president's speech on the way forward here in Iraq.
Miles.
M. O'BRIEN: Ryan Chilcote at our bureau in Baghdad. Arwa Damon in the midst of the battle. We're going to keep you posted all throughout the morning as this battle unfolds on Haifa Street in Baghdad.
Soledad.
S. O'BRIEN: And coming up, the first 100 hours for House Speaker Nancy Pelosi and the new Congress. From security to the minimum wage, we're going to take a closer look at some of the issues that they're going to tackle first.
And we'll hear from the very first time from the biological mother accused of kidnapping the twins she gave up for adoption.
Plus, if you feel like your iPod changed your life, we'll tell you what Apple is unveiling next at Macworld today.
All those stories and much more ahead on AMERICAN MORNING. The most news in the morning is right here.
(COMMERCIAL BREAK)
S. O'BRIEN: Welcome back. Coming up to quarter past the hour. Chad Myers is at the CNN Weather Center with the traveler's forecast for you.
Good morning.
(WEATHER REPORT)
S. O'BRIEN: In California, wildfires burning some of the most expensive real estate in America. Four mansions have burned to the ground already in Malibu. Let's get right to AMERICAN MORNING's Chris Lawrence. He's in Malibu for us this morning.
Chris, good morning.
CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Soledad.
One of the firefighters we spoke with put it best when he said, anything down here that could burn did burn. You can take a look behind me and you can see how this fire completely incinerated four seaside mansions and heavily damaged four others. One of the fire captains just confirmed to us that one of those homes did belong to actress Suzanne Somers.
Last night, as we took a look at some of the incredible flames that were coming out of this fire, you could see the flames blowing down the slopes toward some of those homes on the shoreline, and later, flames just boiling out of the skeletons of those homes for at least two hours until there was just virtually nothing left. Some of the residents told us that they saw flames shooting as high as 100 to 150 feet in the air. One woman described a large plume of black smoke that was just billowing out over the ocean.
Residents were evacuated on one end of Malibu Road. And this area has always been home to a lot of the movie stars over the years. As you mentioned, Soledad, you know, some of the most expensive, largest homes in the area. Mel Gibson, Barbara Streisand, Ted Danson, all have homes in Malibu. The Associated Press reports that actress Victoria Principal was one of the ones who actually rushed out to hose down her home. We mentioned that the fire chief confirmed that Suzanne Somers was one of the homes that was damaged.
And again, over the years, this has been an ongoing thing here in Malibu. Back in 1993, a huge firestorm whipped through here. It destroyed the home that had once belonged to Sean Penn. In that fire, three people were killed. Hundreds of homes were damaged. And the ongoing cycle here in Malibu is that every two to three years you will get a significant firestorm, and every 10 years a huge fire storm, just because of the way that the canyons are situated and those dry, hot Santa Ana winds that blow through like a chute.
Soledad.
S. O'BRIEN: You know these pictures we're looking at, Chris, while you're talking, are just unbelievable. What's the outlook, excuse me, what are the firefighters telling you about any progress they're making or not making, as the case may be?
LAWRENCE: Well the fires here are completely knocked down. What they're trying to do now is determine the cause. The point of origin for this fire was right off the highway. And what they're going to be doing as soon as the sun comes up a few hours from now is to get in and try to determine exactly how this fire started.
S. O'BRIEN: Chris Lawrence for us this morning.
Thanks, Chris, for the update.
Miles.
M. O'BRIEN: Thank you very much, Soledad.
A lot of eyes and ears on the Macworld conference kicking off today. But folks, we have a very early prototype of what may be announced today. Apple founder Steve Jobs is going to announce could be, could be an iCell phone of some kind, which would include your iPod and your cell phone. You could call it the iPhone, but, unfortunately, that's owned by another company. Jacki Schechner is here and she has one of the early prototypes . . .
JACKI SCHECHNER, CNN CORRESPONDENT: This is the early Jacki Schechner prototype of the iPhone.
M. O'BRIEN: That's a rubber band, a phone and an iPod.
SCHECHNER: It's early. We're still working out the kinks, you know, but it's there.
M. O'BRIEN: Excellent design work, I should say.
This is a big deal if, after all these years, Apple finally comes out with this. SCHECHNER: Oh, my gosh, the rumors have been swirling. One analyst told me he thought the rumors went back as far as 1986.
M. O'BRIEN: So is this the year, finally, after all this talk?
SCHECHNER: Well, the Cingular (ph) announcement certainly indicates there's something in the pipeline. You know, one of the analysts I talked to yesterday, Miles, said to me, that more important than the technology that's going to be announced, are the partnerships that are going to be announced. So it will be interesting to see.
Cingular's one of the names that's been kicking around. Google and YouTube might be some sort of partnership for contacts from your computer to your television set. And Netflix is another name we've seen circulating. So we're going to have to see what those partnerships are.
As far as the technology is concerned, one of the things we're almost definite about would be iTV. And that's something that Steve Jobs pre-announced in September. Very unusual for him to do something like that. Usually Apple will announce something and then make it immediately available on the market because there's going to be so much buzz about it.
They pre-announced it. It came in conjunction with the announcement that there were going to be movie downloads on iTunes. And they had to make the announcement that they were going to have some way to transport those because people, of course, would like to watch feature films on their television set as opposed to on their computer.
M. O'BRIEN: And this is a key thing right now. They talk about the last 10 feet being the gap between the computer and the TV, trying to tie the two boxes together, right?
SCHECHNER: They've been doing that for years. I mean, it's great to get content on your computer screen, but ultimately you want to watch the big stuff on your television set. It looks better. Now as part of the Apple phone, the iPhone, which you said the name is taken by a voice-over-Internet protocol company, that has been so long rumored. People are really hoping. There are Mac enthusiasts online that have all sorts of prototypes, but, frankly, I think mine is the best out there.
M. O'BRIEN: I think you've got it right here.
SCHECHNER: I've got a future in building future Apple products.
M. O'BRIEN: Go put it on eBay, see how you do, OK. Jacki Schechner.
SCHECHNER: Going for 99 cents.
M. O'BRIEN: All right. The bidding begins.
All right. Thank you very much. Soledad.
S. O'BRIEN: You know, sometimes I don't understand how they come up with those prototypes, but that one . . .
M. O'BRIEN: That one you get.
S. O'BRIEN: The rubber band part, I'm fully -- yes, that's it.
SCHECHNER: It's cheap. It doesn't cost you anything.
S. O'BRIEN: Fabulous. I like it.
SCHECHNER: Music included.
S. O'BRIEN: Coming up on AMERICAN MORNING, a would-be contestant for "The Apprentice" reality show is suing The Donald. Now thousands of people might be able to get in on that lawsuit. We'll explain straight ahead.
Plus, the big hangup for thousands of telecom worker. We'll tell you how it's going to affect your phone services.
Those stories and much more ahead on AMERICAN MORNING. We're back in a moment.
(COMMERCIAL BREAK)
S. O'BRIEN: Breaking news from Iraq this morning. A major gun battle is underway right now at a main street in Baghdad. U.S. troops are fighting insurgents on the ground. Helicopters and war planes are in the sky. Arwa Damon is embedded with U.S. troops. We've got a live report coming up.
Back here in this country, four mansions have been destroyed after a wildfire ripped through Malibu, California. We'll update you on what happened there.
Miles.
M. O'BRIEN: All right. Here's a little business lesson for you. What happens when a cell phone company loses customers? Twenty-five minutes past the hour, Ali Velshi with the answer.
Good morning, Ali.
ALI VELSHI, CNN CORRESPONDENT: Good morning, Miles.
You know, you and Jacki were just talking about the possibility of an iPhone, a Mac phone deal. Boy, would this phone company enjoy that kind of deal. Sprint Nextel is -- you know, these are two companies that have come together. Sprint continues to gain customers, but Nextel is shedding customers.
These Nextel folks apparently don't love this deal. They're thinking that the quality and service is going to go down. So Nextel, the part of the company, gave up 300,000 customers in the last three months of the year, and that has cost that company a lot of money. It's costing them 5,000 jobs as a result of that.
Another company that's got some problems is Gap. You'll remember, you know, for somebody, this might be a clothing store. But for some people, it was the store that changed sort of fashion for men in America. It introduced casual to men. Until then, guys didn't really know how to dress particularly well.
It's an American icon and it's got its problems. It's brought Goldman Sachs in to discuss a potential sale or at least to discuss something. Usually when you hire Goldman Sachs, that means you're thinking of doing something with your company.
This company ran into some trouble some years ago. It fired the sort of legendary CEO, Mickey Drexler, who then went on to run J.Crew, which you now know is a public company. Meanwhile, the boss over at the Gap hasn't been able to get things moving there. They've had a lot of senior executives leave the company. Someone might buy that company, reports are, for as much as 25 percent more than it's worth right now.
And stocks were up yesterday. I wasn't paying too much attention, I was over at the auto show in Detroit. But I see that stocks were up about 25 points on the Dow to 12,423.
Oil settled yesterday at about $56.09 a barrel. That is down 8 percent so far this year. It's down again this morning on Asian markets. There was a report last night about a Nigerian rebel leader who said he's going to step up attacks on western oil workers and oil facilities in that region. So we'll see what happens to oil today on that news.
And a little later I'm going to come back with more on what an iPod and a phone could mean for business.
Back to you guys.
M. O'BRIEN: I think it could be big.
Thank you, Ali.
Top stories coming up next.
A battle right now in the streets of Baghdad. We have a live report and a reporter embedded with the troops as they engage in that firefight. We'll keep you posted.
And after 18 months and counting, are homeowners devastated by Hurricane Katrina about to finally get a check from their insurance company? News of a possible deal in the works. Those stories and more ahead on AMERICAN MORNING. The most news in the morning.
(COMMERCIAL BREAK)
S. O'BRIEN: Breaking news out of Iraq this morning. U.S. troops in a major gun fight with insurgents right now. We've got a live report from the scene in Baghdad straight ahead.
M. O'BRIEN: War and politics. What's happening today that could prevent President Bush from deploying thousands of new troops in Iraq.
S. O'BRIEN: Legal storm. A settlement apparently in the works by State Farm Insurance. Eighteen months after Hurricane Katrina, could thousands of Katrina victims in Mississippi finally be getting a check?
Those stories and much more ahead on this AMERICAN MORNING.
Welcome back, everybody. It is Tuesday, January 9th.
I'm Soledad O'Brien.
M. O'BRIEN: And I'm Miles O'Brien.
Thanks for being with us.
S. O'BRIEN: Here's what's happening this morning.
President Bush is working on his speech to announce a new direction in Iraq. The speech is tomorrow night.
He is expected to say that he's sending 20,000 to 40,000 more troops into Iraq. Republican observers say it's absolutely critical that the president convince the American people that his strategy will work.
Right now, the American people are weighing in. A poll from "USA Today"-Gallup over the weekend shows that 61 percent of those surveyed are opposed to a troop increase, 37 percent say they're in favor, 72 percent say the president doesn't have a clear plan for handling the situation in Iraq.
At noon today, the clock starts ticking on the Democrats' first 100 hours in Congress. During last year's election campaign they promised to pass six major pieces of legislation in the first 100 hours. So first up today is a bill to implement the 9/11 Commission's recommendations for homeland security -- Miles.
M. O'BRIEN: Breaking news unfolding from Iraq. A major gun battle erupting right in the middle of the city.
CNN's Ryan Chilcote joining us live with more -- Ryan.
RYAN CHILCOTE, CNN INTERNATIONAL CORRESPONDENT: Miles, it's been a dramatic series of events here in the Iraqi capital. It began with a gun battle on Haifa Street about 3:00, 4:00 in the morning here. It has been going on for nine hours. And just over the last couple of hours, we saw some very rare scenes of U.S. aircraft moving over the Iraqi capital.
We saw fixed-wing aircraft, almost certainly F-18s, and we saw Apache attack helicopters. The Apache attack helicopters also hovering over the city. I can hear them now coming back on to the scene.
Both the fixed-wing aircraft and the Apache attack helicopters left this particular part of central Baghdad and moved towards western Baghdad. Now I hear the Apache attack helicopters coming right back to central Baghdad.
That's where this gun battle has been going on, right in heart of the Iraqi capital. A group of U.S. and Iraqi troops op one side, fighting an unknown number of insurgents in an area called Haifa Street. It was late last night that an Iraqi patrol in that area came under fire.
They got pinned down, they called for support. That's when these U.S. and Iraqi troops came in, in support of them. And just over the last couple of hours, weighing in on that battle, if you want, moving in, in support.
We've had Apache attack helicopters and fixed-wing. It has been very unusual, very unprecedented to see so much air power and such a fierce gun battle right in the heart of Baghdad -- Miles.
M. O'BRIEN: I should say, Ryan. And at this point, do the forces on the ground there have the sense that this is a coordinated attack on the part of the insurgents?
CHILCOTE: It certainly sounds like a coordinated attack, because what we understand from what has been going on in Haifa Street, where this gun battle is under way, is that there has been mortar fire, there has been heavy machinegun fire. There has been small arms fire.
Just when you say mortar fire, that means indirect fire. That means that there are insurgents at a position some distance away who are being -- who are firing into this area. They probably have a spotter in the fight telling them where to aim and correcting their fire. So that would make this a coordinate attack, absolutely -- Miles.
M. O'BRIEN: Ryan Chilcote in Baghdad.
Thank you -- Soledad.
S. O'BRIEN: This morning along Mississippi's Gulf Coast some possible good news for Hurricane Katrina victims. Sources say that State Farm Insurance and the Mississippi attorney general are negotiating a settlement for thousands of Katrina victims.
CNN's Sean Callebs is in Long Beach, Mississippi, this morning for us.
Sean, good morning.
SEAN CALLEBS, CNN CORRESPONDENT: Good morning, Soledad.
If you look behind me, you can see the slabs, some cinderblocks, a lot of weeds, the remnants of a home that belonged to the Tipkers (ph). They say they received nothing from their insurance carrier after the storm, their claim was rejected -- State Farm.
So they joined legions of people involved in a lawsuit trying to squeeze some money out of the insurance giant. Well, as you mentioned, finally some good news could be on the horizon.
(BEGIN VIDEOTAPE)
CALLEBS (voice over): There are thousands of people along Mississippi's Gulf Coast who say they were victimized twice by Katrina. First by the storm, then by their insurance company.
People like John Oakes. He says State Farm denied his claim, alleging flood from the storm surge, not hurricane winds, devastated his home. This is at the heart of the dispute, what was destroyed by wind, which would be covered by insurance, and what was devastated by flooding, excluded from homeowner policies.
DR. JOHN OAKES, HURRICANE KATRINA VICTIM: A lot of what they'll say is really unbelievable. I mean, I wouldn't have expected the reasonable, intelligent person would tell me that water would shake a tree and it would break. But it did.
CALLEBS: Now CNN has learned from someone close to the negotiations, State Farm is on the verge of working out a settlement that could affect as many as 35,000 policyholders, and the deal could cost the insurance giant hundreds of millions of dollars.
State Farm told CNN, "At this point, we have no settlement. We continue to talk and to search for ways to bring these events to a resolution. If you ask me: would we like to bring closure to these matters? The answer is absolutely."
Well-known attorney Dickie Scruggs, who took on big tobacco in the 1990s and won, is leading the legal fight against State Farm and other insurance companies. Scruggs lost his Mississippi beach-front home in the storm and was denied wind coverage.
DICKIE SCRUGGS, ATTORNEY: It is as personal as anything in my life that's ever happened to me.
CALLEBS: Any settlement between homeowners and State Farm would have to be approved by Mississippi's attorney general, Jim Hood. Hood has filed a civil lawsuit against State Farm for refusing to cover damage from Katrina's storm surge.
Hood says -- quoting here -- "I am working day and night attempting to get our coastal residents a fair shake in the insurance litigation. It would not help our negotiations to disclose any details at this time."
(END VIDEOTAPE)
CALLEBS: And word we're hearing, a deal could be announced as early as today.
Now, Scruggs has actually initiated litigation against five insurance companies. The deal we're talking about would only affect those involving State Farm.
And one thing we should point out. The insurance industry says they've done a great job resolving the millions of claims by those people affected by Katrina, saying they resolved 90 percent of them so far.
And Soledad, no matter how many times you're out here and look around, you just never get used to the widespread devastation. And what people are hoping, if these checks finally start coming in, maybe rebuilding will really kick in, in this area.
S. O'BRIEN: You know, it's absolutely breathtaking when you look behind you. You see that's it, that's all that's left.
Let me ask you a question. You say there are basically five insurance carriers. Is there any sense that, as State Farm goes, so will the others? If they do some kind of settlement, the rest will follow?
CALLEBS: Difficult to say, because for a large part, these insurance companies have dug in their heels. Even State Farm all along has said, look, we paid what we were -- what we had to pay to the people who we had policies with. They said their insurance policies simply didn't cover flood insurance.
So these insurance companies have been digging in their heels. It's difficult to say, but State Farm represents more people in the Gulf Coast area than any other carrier. So perhaps this could be the impetus that spurs on other insurance carriers to do the same thing.
S. O'BRIEN: It will certainly be interesting to see.
Sean Callebs for us this morning in Mississippi.
Thank you, Sean -- Miles.
M. O'BRIEN: A violent start to the new year in New Orleans. Nine killings so far. The city considering a curfew to try to curb the bloodshed.
Community leaders say help for troubled youths and more cops would help. Mayor Ray Nagin expected to announce a plan to fight the violence later this week.
And another problem in the New Orleans area, killer bees. Workers chased away from a storm-damaged St. Bernard Parish home by aggressive Africanized honeybees. We know them as killer bees.
The bees also routed some beekeepers trying to catch them. Finally, mosquito workers were able to kill the bees. Now traps are being set to catch any killer bees left lurking there.
Coming up on AMERICAN MORNING, live from Malibu, a wildfire burning some of the most expensive real estate in America and some of the homes of the rich and famous on AMERICAN MORNING, the most news in the morning. (COMMERCIAL BREAK)
M. O'BRIEN: Another developing story we're following for you this morning. The U.S. attempting a significant blow in the war on terror in another location. Al Qaeda operatives the targets of at least one American air strike in southern Somalia yesterday.
Pentagon Correspondent Barbara Starr is live in Kenya, bordering Somalia, with more on all of this.
Barbara, what can you tell us?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Miles, a U.S. Air Force Special Operations AC-130 gun ship indeed launched that strike against a suspected al Qaeda training camp in southern Somalia, quite close to Kenya's northern border. No results from the strike yet. They don't know if they got who they want, but this has been an ongoing effort, watching al Qaeda operatives that were fleeing from Mogadishu (AUDIO GAP) to in the north, the capital of Somalia, once the Islamic militia that ruled there with al Qaeda had been overthrown by the Ethiopian army that came in right after Christmas.
The Ethiopians took over, the Islamic militia fled south, and the manhunt was on. The United States military, along with the U.S. intelligence community and African intelligence services out here in this region, were very closely watching, looking for five top al Qaeda operatives, all of them affiliated with attacks here in East Africa. At least three of them said to be connected with the 1998 bombings of the U.S. Embassy here in Kenya and Tanzania.
The U.S. military had been watching the al Qaeda buildup in Somalia throughout the summer, and in the last day or so we have talked to many officials out here about all of that.
Listen for a moment to the top U.S. military official in the region.
(BEGIN VIDEO CLIP)
REAR ADM. RICHARD HUNT, COMMANDER, TASK FORCE HORN OF AFRICA: That's what we were really concerned about, is there seemed to be much more recruiting, much more training going on. They were positioning themselves to expand their area of influence beyond the Somali borders.
(END VIDEO CLIP)
STARR: What officials tell us, Miles, is they had kept the surveillance on in Somalia throughout the summer. They were seeing money coming in from Middle Eastern countries, weapons flowing in from eastern Europe, and multiple al Qaeda camps being set up in Somalia, now offering radical Islamic education to young Somali men that they were trying to recruit into that militia.
So the U.S. had been watching for the opportunity to strike against al Qaeda. Whether it's all over now remains a question. The aircraft carrier Eisenhower has moved south here to the waters off the coastline. There are two U.S. Navy warships also off the coastline, running patrols to try and keep any al Qaeda from fleeing by the sea.
Kenya here has closed its northern border with Somalia to keep anyone from trying to come into this country. And, of course, here in Kenya, this is a city that well remembers al Qaeda from that 1998 embassy bombing attack -- Miles.
M. O'BRIEN: Barbara, is there any talk at all about sending ground troops, U.S. ground troops, into Somalia at this juncture?
STARR: Well, very interesting. We talked to this new Somali foreign minister a couple of days ago. He wants ground troops.
He says the days of Black Hawk Down are long over. We would like U.S. troops to come help with security and come help train their new military forces.
But you can pretty much count on the fact the Bush administration has ruled that out. There is an effort to get African peacekeepers in to Somalia. There will not be U.S. troops, but there are still a lot of rumors throughout East Africa about all of that, Miles, and questions about whether any U.S. Special Forces will go in on the ground into Somalia covertly to try and hunt down these al Qaeda operatives.
No one is speaking publicly about that -- Miles.
M. O'BRIEN: I guess that would come as no surprise.
Barbara Starr in Kenya. Thank you -- Soledad.
S. O'BRIEN: Forty-five minutes past the hour. Let's get right to Chad Myers with an update on the traveler's forecast for us.
Hey, Chad. Good morning again.
CHAD MYERS, CNN METEOROLOGIST: Good morning, Soledad.
(WEATHER REPORT)
S. O'BRIEN: All right, Chad. Thank you.
MYERS: You're welcome.
S. O'BRIEN: In California, wildfires are burning some of the most expensive real estate in our nation. Four mansions have burned to the ground in Malibu.
AMERICAN MORNING'S Chris Lawrence is live there for us this morning.
Good morning, Chris.
CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Soledad.
One of the firefighters I spoke with put it best when he said, "Anything down here that could burn did burn." You can see behind me how this fire incinerated four of the seaside mansions and significantly damaged four of the other ones. And a fire captain just confirmed to me that one of those homes did belong to actress Suzanne Somers.
Last night, you could see these flames just shooting down the slopes toward those homes on the shoreline, and then just a few minutes later you could see the flames just boiling out of the skeletons for at least two hours until almost nothing was left of some of those homes. Some of the residents we spoke with say they could see flames shooting as high as 100 to 150 feet in the air.
This area, two things about Malibu that will remain constant. One, that movie stars will continue to live here.
Back in 1993, there was a huge firestorm that destroyed the homes of actor Sean Penn and actress Ali McGraw. Again, the fire captain confirming that this fire destroyed the home of Suzanne Somers.
And also, that fires will continue to occur here. Malibu has a unique alignment of the coastal canyons with those hot, dry Santa Ana winds. About every two or three years they get a fire, every 10 years you get a major firestorm in this area -- Soledad.
S. O'BRIEN: Chris Lawrence updating the situation there in Malibu for us this morning.
Thank you, Chris -- Miles.
M. O'BRIEN: Happening "In America," in California, Joey Buttafuoco back in jail. He'll do a year for illegal possession of ammunition.
You remember Buttafuoco, of course. His wife shot in the face by his teenage lover, Amy Fisher, back in '92. Fisher served seven years for the shooting. Buttafuoco did four months for statutory rape.
His wife, Mary Jo, recovered. The couple has since divorced.
In Massachusetts, a rejected candidate for "The Apprentice" is telling Donald Trump, "You're sued." Richard Hewitt (ph) is suing Trump for age discrimination.
Hewitt (ph) was 49 in 2005 when he was rejected for the show. He says in the six seasons of "The Apprentice," only two finalists have been over 40. That's young, right?
And in the streets of Gainesville, Florida, they are whooping it up this morning, probably still going. The Florida Gators college football national champs. They rolled over previously unbeaten Ohio State, led by the Heisman Trophy winner Troy Smith. The final score in the BCS title game, 41-14.
S. O'BRIEN: Ahead this morning in health news, new hope for hypochondriacs.
Are you a hypochondriac?
M. O'BRIEN: No. But I do have a pain in my neck.
S. O'BRIEN: Believe it or not, there's actually a real-life treatment for your imagined illnesses if you're a hypochondriac. We'll tell you what the...
M. O'BRIEN: It's a sugar pill or real treatment?
S. O'BRIEN: It's a real treatment.
M. O'BRIEN: Interesting.
S. O'BRIEN: We'll explain straight ahead on AMERICAN MORNING.
We're back in a moment.
(COMMERCIAL BREAK)
S. O'BRIEN: Health headlines for you this morning.
A new study is showing that San Francisco has the most illegal drug users of all major U.S. cities. The national average is about eight percent. San Francisco has 13 percent of residents use pot, cocaine and heroin on a regular basis.
California governor Arnold Schwarzenegger is calling for universal healthcare in his state. Maine, Massachusetts and Vermont already offer it. Schwarzenegger estimates it's going to cost about $12 billion to cover the 36 million residents, including illegal immigrants.
There's a pill for nearly everything. Now there's one for hypochondriacs. Researchers say the antidepressant Paxil can help people who only imagine that they're suffering from a disease or an illness. So if you can take a pill for it, that means you must really be suffering.
M. O'BRIEN: It's not imaginary, Paxil. It's the real thing.
S. O'BRIEN: It's the real thing.
Dr. Sanjay Gupta is going to talk with us ahead this morning about the link between folic acid and preventing Alzheimer's Disease. Sanjay will tell us just how much you need, how it works.
That's coming up at 7:40 a.m. Eastern Time this morning.
And still to come on AMERICAN MORNING, a wildfire in Malibu, California. We've been showing you some of those pictures. Multimillion-dollar seaside mansions burned to the ground.
That story and much more straight ahead on AMERICAN MORNING, where you'll find the most news in the morning, right here on CNN. (COMMERCIAL BREAK)
M. O'BRIEN: So, what's the next big thing for Apple? Well, Apple chief Steve Jobs is poised to make a big announcement today.
Fifty-six minutes past the hour. Ali Velshi is here.
Could the rumors finally be true, Ali, cell phone meets iPod?
ALI VELSHI, CNN CORRESPONDENT: The iPhone, as they've called it in the past. And you know, Miles, we've gone down this road before where we thought on this very day there will be an announcement. The Macworld Conference is on in San Francisco. You were talking to Jacki about that.
Who knows whether today will be the day. But there's a lot of speculation that Apple will announce a deal with Cingular as the carrier for this new Apple iPhone, which is a combination of an iPod and a telephone.
Now, here's the thing. We've gone down this road before with a phone and with music on it. Right now we have got a couple of issues.
Phones do a bunch of things. They make phone calls, they take pictures, they take video, and they play tunes. There are a number of phones out there that play tunes, some of them don't hold many tunes, some of them are not easy to use.
Cingular and Apple made a deal a couple of years ago with Motorola on this thing called the ROKR. It's a Motorola phone, and the ROKR plays tunes off of your iPod, off of your iTunes. But it only downloads 100 songs. And the thing about iPod, the reason why Apple controls so much of the market, is because it's easy to use. The interface is easy, the way it works is easy.
So, unless they do that, it's not going to work. The ROKR didn't work, this isn't going to work.
So, if it does work, the issue is, if you can decide that your phone and your iPod can come together on one device, this is going to be a big boost for one cell phone company. If it is Cingular, it will be a big boost for Cingular.
What it might do is affect Apple's sales, because they sell a lot of iPods, but the sales of iPods are slowing dramatically. Will people choose the phone instead of the iPod?
A lot of business implications, a lot of people watching to see if this decision actually gets made and if we have got an iPod -- an iPhone coming out soon.
M. O'BRIEN: I guess the real question is, though, do people really want to combine those two devices, cell phone and music player?
VELSHI: You know, people love their Apple devices so much, their Macs and their iPods, that if Apple comes up with an iPhone, I bet you'll have a lot of people moving over to it because they like the way that company designs stuff.
M. O'BRIEN: Got you. All right. Thank you, Ali.
VELSHI: OK.
S. O'BRIEN: Coming up at the top of the hour. Chad Myers is at the CNN weather center.
(WEATHER REPORT)
S. O'BRIEN: A developing story. At least one U.S. air strike on suspected al Qaeda operatives in Somalia. The target, the casualties and the timing all ahead in a live report from Africa.
M. O'BRIEN: Breaking news in Iraq as well. A major gun battle unfolding right in the middle of Baghdad. U.S. troops on the ground, attack helicopters in the sky. Our reporters are right there with them.
California burning. Strong winds send a wildfire through seaside mansions in California, including one owned by a famous actress. We'll tell you who.
S. O'BRIEN: And words that changed a nation. How Dr. Martin Luther King Jr. faced down violence with words in one of America's most racially divided cities.
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