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Libyan Rebels Take Tripoli; Gadhafi's Sons Captured; What's Next in Libya?; Some Gadhafi Forces Put Up a Fight; Explosions at Gadhafi's Compound; Families of Jailed U.S. Hikers Plead for Compassion; Case Against Dominique Strauss-Kahn; Irene Now a Hurricane

Aired August 22, 2011 - 07:00   ET

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

UNIDENTIFIED FEMALE: We are in Green Square here in the middle of Tripoli.

CAROL COSTELLO, CNN ANCHOR: At the dictator's doorstep, the rebels rolling into Moammar Gadhafi's last stronghold reaching the heart of Tripoli celebrating on his turf, and CNN was on the back of a truck to witness it all.

CHRISTINE ROMANS, CNN ANCHOR: The big question that remains this morning, where is Moammar Gadhafi? Still, no sign of the man who vowed to fight to the finish as a new battle rages outside his compound.

COSTELLO: DSK off the hook. His accuser meeting with prosecutors today. Why attempted rape charges against the former IMF chief may be dropped?

ROMANS: And Irene picking up steam. Florida now in the path of the first hurricane of the year on this AMERICAN MORNING.

Good morning. It's Monday August 22nd. This is AMERICAN MORNING. I'm Christine Romans.

COSTELLO: And I'm Carol Costello. Thank you so much for joining us. Ali has the morning off. A historic day today.

ROMANS: That's right.

COSTELLO: So, let's get right to it.

ROMANS: Breaking news. New explosions overnight coming from Moammar Gadhafi's Tripoli compound. Three of his sons are now in custody, but Gadhafi's whereabouts are still unknown as history continues to unfold in Libya this morning.

COSTELLO: Rebel forces say they now control most of the capital and that Gadhafi's forces in one Tripoli neighborhood are negotiating their surrender.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): After months of fighting, the rebels finally and easily rolled into Tripoli yesterday. Gadhafi's army almost didn't put up any fight.

ROMANS: Wild celebrations erupting as the rebels took Green Square. It's the symbolic center of Tripoli. Thousands of Libyans tearing down pictures of the dictator, firing guns into the air, but this time, in celebration.

COSTELLO: As you can see thousands also filled the streets to celebrate in the heart of Libya's second largest city, Benghazi. Even though it's a victorious day for many Libyans, it came at a painful price. A Libyan government spokesman says some 1,300 people were killed, about 5,000 people injured in just this past weekend.

ROMANS: And we're now hearing that rebels have captured three of Gadhafi's sons. A prosecutor for the International Criminal Court tells CNN talks will be held today on transferring one of them, Saif Gadhafi, to the Hague. Still, no one knows for sure where their father is. He may not even be in Tripoli anymore even though he went on the radio, vowing to stay, quote, "until the end."

COSTELLO: President Obama, of course, monitoring all of this. He said Libya is slipping from the grasp of a tyrant and that Gadhafi needs to face reality and acknowledge he is no longer in control.

ROMANS: And we want to go live to Libya where our Matthew Chance is standing by. Matthew, just a short time ago you heard gunshots right where you are. There is still fighting near the hotel where you're staying. What's happening right now?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: There is. In fact, even though the past few seconds some ferocious gun fights taking place just over my shoulder near the compound of Colonel Gadhafi, a place that's been heavily bombed over the past several months, but it's still an area where Gadhafi loyalists are staking out their defense.

This is a patchwork of control in Tripoli. You know, large areas of the city have fallen under rebel control. They walked into many of those areas without any resistance at all. There are certain areas like this one around the Rixos Hotel where I'm talking to you from right now and the Gadhafi compound, which is virtually next door, where the governments are kind of resisting any rebel pressure. They are putting up some kind of defense, obviously choosing which areas they want to hold on to and which ones they aren't. And so it's one of those areas, one of the few areas in Tripoli, which is still under government Gadhafi loyalist control.

COSTELLO: And Matthew, tell us about the government minders and all the people who have been following western media for so many months now in Tripoli. Are they still there? Have they disappeared? What is this telling you about, I guess, the condition of the Gadhafi regime?

CHANCE: Well, obviously the Gadhafi regime to some extent has been crumbling, and part of that evidence for that is that the hotel here which was so full of government minders, we were under such close supervision, about 12 hours ago or so those minders essentially just left as the fight continued to intensify, as the rebels came into certain areas of the city.

You know, we saw the hotel basically abandoned except for a skeleton staff of government Gadhafi loyalist security personnel. Those Gadhafi loyalists are still in the hotel very much. They're in the lobby area. There are men armed with machine guns and more heavy weapons as well on the perimeter of the hotel.

So as I say, we're not seeing the level of government officials here that there was previously. We haven't seen any government officials in the course of the past 12 or 18 hours. But it's still an area which is under the control of the Gadhafi forces. We haven't seen any rebels come into this area yet. Any that have come in have been met with fierce clashes of the kind taking place over the past several minutes.

ROMANS: All right, Matthew Chance in Tripoli, stay safe. Thanks.

Despite those sporadic gun battles, the celebrations do continue in Tripoli and al across Libya this morning as Libyans flooded Green Square in the heart of Tripoli, rebels announcing they were bringing back its old name, Martyr Square, what it was called before Gadhafi. Sara Sidner rolled into the square with rebels as watched as fighters braced for a blood bath that never happened. Take a look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Finish, finish got done.

UNIDENTIFIED MALE: Tripoli very, very happy. Gadhafi finished. Now freedom.

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: We are in Green Square, and what you are seeing behind me is the rebels are saying there's going to be a massive battle here. They do not have full control of the city.

UNIDENTIFIED MALE: At the moment, we are not fully in control of Tripoli because you can see, you can see that.

SIDNER: What does this make you, how do you feel about this day. You are from Tripoli. How is this day is important?

UNIDENTIFIED MALE: It's a historic day because we had it to leave from here like without anything. And now we had to fight. I'm not a fighter. I'm a student. And they -- it's my first time that I handled a gun.

SIDNER: Civilians are now gone from here and we have to leave.

(GUNFIRE)

SIDNER: What's happening as everyone starts, we are in Green Square here in the middle of Tripoli. What we're seeing is rebels all over the square. There are really no civilians, mostly men with guns in the square. But we're also seeing people running. There's a lot of gunfire. They say they are snipers. We all had to pull back. The situation is very tense here, but there is a lot of celebrating going on. Some of this is just gunfire in the air, but people are very, very concerned because they say they were snipers posted on the top of some of these buildings. They're not sure exactly where some of this gunfire is coming from. Every now and then you see people just running, trying to get out of the way. But right now the rebels have Green Square and it is a historic moment here in Tripoli in the capital. The real stronghold of Moammar Gadhafi has now been taken over by the rebels.

Sara Sidner, CNN, Tripoli.

(END VIDEOTAPE)

COSTELLO: And Sara Sidner is still in Tripoli. We're trying to get her on the phone. When we get her on the phone we'll bring her to you live.

President Obama wants Gadhafi to face facts and give up. In a statement the president says "Tripoli is slipping from the grasp of a tyrant. The Gadhafi regime is show signs of collapse. The surest way for the bloodshed to end is simple. Moammar Gadhafi and his regime need to recognize that their role has come to an end. Gadhafi needs to acknowledge the reality that he no longer controls Libya. He needs to relinquish power once and for all."

The president is being briefed on developments while on vacation. Dan Lothian joins us live from Martha's Vineyard. Dan, just wondering, Republicans have already come out, namely Senator John McCain, and said that if the United States and NATO had thrown more at Libya, it wouldn't have taken six months for this thing to drag on and Moammar Gadhafi to be knocked out of power. Still, it was only six months, so is the president happy with the way things turned out?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, look, this is good news for the administration as you pointed out. It was just six months ago that president Obama stepped in front of the cameras and said that Moammar Gadhafi needed to go. And there has been, as you pointed out, a lot of criticism from Republicans that the administration should have been more forceful, more forcefully engaged from the very beginning because it would have not taken six months.

But nonetheless, the administration pleased with these latest developments. They have been very careful, though, not to get out too far in front of the developments on the ground. You did not see the president step in front of the camera last night, instead releasing that statement that you read from just a short time ago.

In addition to those words, the president also said, quote, "The people of Libya are showing that the universal pursuit of dignity and freedom is far stronger than the iron fist of a dictator."

Now what is the president doing this morning? We are told that he will be getting a briefing sometime this morning on the situation in Libya. John Brennan, his counterterrorism adviser, has been here on vacation with the president. He gave the president several briefings yesterday.

In addition to that, the president held a conference call with senior members of his national security team. Unclear at this point whether or not we'll see the president or hear from the president today, but we do have a briefing here with the White House, a deputy White House spokesman, sometime this morning, should be getting more reaction on what the administration thinks about the developments in Libya, carol.

COSTELLO: I suspect if they find Moammar Gadhafi and he is completely knocked out of power, we might see the president.

LOTHIAN: That's a very good bet. But so far, nothing on the president's schedule, other than what we have been told is that he will be getting a briefing sometime this morning.

COSTELLO: Dan Lothian reporting live from Martha's Vineyard, many thanks.

ROMANS: So it's not known exactly where Moammar Gadhafi is holed up right now, but Libyan rebels say they've captured three of his seven surviving sons. Senior International Correspondent Nic Robertson is in Washington this morning and joins us now. It was just in February that Moammar Gadhafi, Nic, said he would never leave, he was defiant, he would not step down, he would not leave his country. Is there any reason to believe that he is no longer in Tripoli or do we think he's holed up there in that compound somewhere?

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: I think you have to look at what's happened to his three sons. These are obviously three guys never thought and never wanted to be picked up by the rebels. Saif al Islam, Saadi Gadhafi, Mohammed Gadhafi, they didn't think they were going to be picked up. They miscalculated. I think they miscalculated on the speed that the rebels would get into the city, the amount of fight that their loyalists were going to put up to save them.

And the indications were from that, based on that, would seem to be that Gadhafi has perhaps made a similar miscalculation, surrounded by sycophants, people that tell him the Libyans love you. We'll keep you protected, don't worry, the capital is safe. He lost touch it seems with the reality on the ground of what was happening and does seemed to have been outmaneuvered and outflanked.

So the best guess, and it is only a guess, perhaps he still is there in trig holed up somewhere, was hoping to get away and hasn't managed it. But we just don't know. He might have tried to flee across country to Sirte to get to his ancestral home if you will, go out to the desert, hide out there. But as he knows, NATO has been looking out for him from the skies. So that wouldn't be a smart move either. I think the smart money must be right now he is still in Tripoli some place, Christine.

ROMANS: All right, Nic Robertson, thanks so much, Nic.

COSTELLO: Time now to talk back on the big story of the day. The question this morning, was U.S. involvement in Libya worth it? There's no question now Libyan leader Moammar Gadhafi's reign is just about over. Thousands are reportedly dead, and it's likely that more will die. But thanks in large part to NATO forces and the United States, Libya will likely be free of a cruel dictator. Libya is celebrating.

(BEGIN VIDEO CLIP)

(SHOUTING)

(END VIDEO CLIP)

COSTELLO: Here at home in the United States, the celebrations may be satisfying to watch, but the feeling is tempered. Like everything else, U.S. involvement in Libya was conflicted. Liberal Congressman Dennis Kucinich accused President Obama of an impeachable offense because Mr. Obama moved forward on Libya without Congressional approval.

Republican Senator John McCain was critical because he said President Obama didn't move fast enough to prevent a long, drawn out fight for freedom. And Americans, weary of war, were also concerned about costs. According to the Obama administration, the Libyan mission will cost American taxpayers $1.1 billion by September 30th.

Still, in six months Gadhafi is just about gone. And remember he was slaughtering his own people. Al Jazeera estimates last month 13,000 Libyans have died in the conflict.

So the talk back this morning, was U.S. involvement in Libya worth it? Facebook.com/AmericanMorning, Facebook.com/AmericanMorning. I'll read your comments later this hour.

ROMANS: Still to come this morning on this rapidly developing story, with Gadhafi's regime disintegrating maybe once and for all, there are prevailing questions like what would Libya look like without its dictator. We're going to talk to a leading expert on the Middle East about the road ahead for Libya.

COSTELLO: And Dominique Strauss-Kahn's accuser is set to meet with prosecutors today. Why her lawyers think the charges could be dropped.

ROMANS: And hurricane Irene gaining speed, gaining strength, and it may be headed straight for the U.S. That's right, the first named hurricane of the season. You're watching AMERICAN MORNING. It's 12 minutes after the hour.

(COMMERCIAL BREAK)

ROMANS: Welcome back to AMERICAN MORNING.

We're watching breaking news and what could be the end game for Libyan leader Moammar Gadhafi. New explosions rocked his compound overnight. The rebels now taking the heart of Tripoli. Thousands of Libyans celebrating and saying that Gadhafi is through, but no one knows for sure where Gadhafi is right now. COSTELLO: Yes. It's the current mystery of the morning.

Let's bring in Fouad Ajami. He's a Senior Fellow at the Hoover Institution, formerly the Director of Middle East Studies at Johns Hopkins University and a leading authority on the - on the region. And you've always said, if Gadhafi falls, it's justice.

FOUAD AJAMI, SENIOR FELLOW, HOOVER INSTITUTION: Look, the Libyan people have been living in prison for four decades and four decades of - of tyranny is just good enough, if you will. Whatever they do next, whatever becomes of Libya, it will be better than the Libya of Moammar Gadhafi.

Moammar Gadhafi robbed the Libyan people of their freedom. He'd robbed them of their bread. It's the richest country in Africa with the poorest population. And it was living in a twilight zone. It's like this incredible parallel universe of Moammar Gadhafi. Moammar Gadhafi is the only one who spoke. Moammar Gadhafi is the only one who lived. Moammar Gadhafi is the only one who acted and now it's up to the Libyans.

ROMANS: Yes. The largest oil reserves in Africa and 95 percent of the economy is driven by the oil industry. One hopes that whatever it looks like after this, those riches will be shared with the people, but that means - that is a lot of ifs until that happens.

AJAMI: Of course. Of course. Look, Libya became basically a kleptocracy. It became a thief and it began with all kinds of pretensions. When you go back, I mean, I'm old enough to remember when Gadhafi came to power as a young man and he came to power in the first year of the Nixon presidency and this gives you an idea of how long this man has lingered about and has lingered on.

And I think now the Libyan people, this is their moment. This is their right. It's their liberty and it's their right to fashion their own destiny. We shouldn't really worry about what would become of Libya, you know?

You know, we kept saying who are these guys, the Transitional Council? Well, these guys are technocrats. They're good people. They're members of the - even some members of the old regime. They're ordinary Libyans keen on - on rehabilitating their country.

COSTELLO: Well, let's talk more about the Transitional National Council.

AJAMI: Yes.

COSTELLO: Because there were some Op-Eds this morning in some newspapers -

AJAMI: Sure.

COSTELLO: -- across the land saying that - I mean, they have a huge job ahead of them.

AJAMI: Yes.

COSTELLO: That because Libya really has no middle class that will make things more difficult for them to put an effective government into place.

AJAMI: Yes.

COSTELLO: So what do you do? Will you need humanitarian aid from throughout the world, including the United States to get things done?

AJAMI: I'm not sure they need humanitarian aid. I mean, look, these people have a lot of money. They have - we have $35 billion of their money and there are billions stashed in Europe, which Gadhafi had socked away. I think what they need is they need this - this faith in the - of the outside world in them. We shouldn't continue to second guess them.

And take a look at the Obama administration. It second guessed this rebellion in Libya for five long months. They refused to recognize them.

COSTELLO: Well, it wasn't particularly organized at first. They didn't have any weapons to fight. There were no trade military leaders. There was a lot to criticize there fairly.

AJAMI: Well, that's even - that's even more of a tribute to them that they were basically people who got up and, you know, students, x-ray technicians, economists, pharmacists, they got in the back of their Toyota Corollas and rushed to the front to claim their country and to fight this man and we discovered something about tyranny.

I mean, Gadhafi at the end had these mercenaries, people from Chad, people from Algeria. You know, I'm sure what he missed was only his four Ukrainian nurses who traveled with him everywhere. The voluptuous Ukrainian nurses were the only ones missing in the standoff.

It's a - it's a terrible nightmare that the Libyans have been in and it just wants to celebrates their freedom. I was just giddy this morning watching the coverage.

COSTELLO: I'm going to interrupt you because we're going to Sara Sidner. She's in Tripoli. Apparently, there are some new violence there.

So, Sara, what's going on.

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: We can hear gunfire and I just heard a loud blast, sounds like perhaps artillery fire. We do know now that we have to leave this area. We're about a half mile from Green Square, which the rebels are now trying to call Martyr Square, to return it to a name that they prefer.

But we're told to pull back. All of the rebels that were in this area just a few moments ago have pulled back. They are getting together to coordinate some sort of action. Now, we don't know exactly what that action is, but we saw them streaming through here just literally about five, six seconds ago. The last remaining gunner truck that's here behind us is just about to leave the area and we also are being told to leave the area because they're going back to do some sort of offensive. We just don't know where exactly in the city, but we are told it has to do with Gadhafi's troops.

ROMANS: All right. Sara, I think we should let Sara go so she can figure out what the situation is there and pull back. If the rebel forces are pulling back, obviously that means that - that Sara needs to get out of the situation -

COSTELLO: Put her helmet back on.

ROMANS: -- as quickly as she can. But what we were hearing there as Sara Sidner is saying that the rebels are massing together and they're pulling back. They're about a half mile from - from the square right now and they're pulling back and going someplace else to confront Gadhafi's forces. Showing you that this isn't over yet.

AJAMI: Right. Of course. Of course.

Look, this man, he still has his money. He still has some of his loyalists, but the regime is done, the regime is cooked. His heir apparent Saif al-Islam, Dr. Saif al-Islam, who bought a Ph.D. from the London School of Economics, you know, this regime is finished and I think the Libyan people, it's a day or two or three and I think they will have the chance at making a new - a new dawn.

COSTELLO: So, Moammar Gadhafi says he wants to die a martyr in his country.

AJAMI: Yes. Yes. We know about these declarations. People have a choice, they can either die martyrs in their own country or they can unite with their bank accounts abroad. And we don't know what Gadhafi will do, I mean, to be truthful.

We know that Saddam Hussein, he stayed in their country and faced the music of it and - and was sent to the gallows. We know other dictators like the Tunisian dictator right next door to Moammar Gadhafi, he simply absconded to Saudi Arabia with 1.5 tons of gold bar and his wife.

So I think it depends. And I think Nic Robertson is right. Perhaps Gadhafi miscalculated, perhaps he's still there, perhaps he wasn't able to make it to Algeria and to Chad. So that's it.

COSTELLO: We'll see -

ROMANS: All right.

COSTELLO: -- over the next couple of days or maybe even today will tell.

Fouad Ajami, thank you so much for talking with us this morning. ROMANS: All right. Still to come this morning, it's a been a rough few weeks in the market, but a new survey says we could gain it all back by year's end.

COSTELLO: Oh, come on.

ROMANS: All of us have our fingers crossed. We're going tell you more right after the break.

(COMMERCIAL BREAK)

ROMANS: Twenty-three minutes after the hour. "Minding Your Business" this morning.

Investors bracing for another potential rocky week in markets. Right now, U.S. stock futures for the Dow, NASDAQ and S&P 500 are all trading higher ahead of the opening bell.

Investors getting a boost from a dip in oil prices overnight that's after news the war in Libya could be coming to an end and the country could resume oil production. Before the war started, Libya produced 1.8 million barrels of oil a day, which accounts for almost two percent of global supply.

European markets trading higher on the news out of Libya, but that's likely a short lived distraction from the mounting concerns about, of course, the debt crisis in Europe. France becoming a bigger player in the credit concerns in that region. French President Nicolas Sarkozy is expected to announce austerity measures for France this week.

The S&P 500, which is the best indicator for the stock part of your 401(k), it's lost about 16.5 percent in the last month. Wall Street experts are saying that the index is expected to rebound by up to 20 percent by year's end. That's according to an exclusive survey by CNNMoney.com.

Looking ahead to Friday, Fed Chief Ben Bernanke will give his keynote at the Feds' annual retreat in Jackson Hole, Wyoming. At this event last year he hinted at another round of stimulus for the U.S. economy which was then implemented just a few months later. Analysts have been debating whether a third round of stimulus or quantitative easing could be on the horizon to boost the ailing U.S. economy.

Bloomberg News reporting $1.2 trillion were borrowed by U.S. and European banks during the financial crisis from the Fed. Citigroup and Bank of America taking out the largest loans. The Fed told Bloomberg that all of those loans have been paid back in full with interest.

Don't forget for the very latest news about your money, check out the all new CNNMoney.com.

AMERICAN MORNING will be back after this quick break.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

COSTELLO: And we are watching breaking news for you this morning. And witnessing history unfold in Libya. Celebrations erupting across the country as rebels enter the heart of Tripoli. Moammar Gadhafi's 42-year reign may be in its last day.

Good morning to you. It is Monday, August 22nd. Ali has the day off.

ROMANS: All right. Top stories, the top story, after six months of fighting, Libyan rebels appear to be on the brink of ending Moammar Gadhafi's 42-year rule. They rolled into the heart of Tripoli yesterday and despite a few remaining pockets of resistance, the rebels say they are in control of most of the capital and most of the nation.

COSTELLO: The rebels say they've now captured three of Gadhafi's son including one time heir apparent Saif al-Islam, who along with his father faces charges of crimes against humanity at the International Criminal Court.

ROMANS: But we don't know where Gadhafi is.

New fighting has reported - been reported overnight around his bombed out compound in Tripoli. No one knows if he's there or if he's even in the country anymore. The opposition believes that Gadhafi may have fled to neighboring Chad or Algeria. But no one knows for sure.

COSTELLO: It's the big mystery this morning.

A wild sight on Libyan State Television over the weekend. Take a look. You can see the news anchor, yes, the news anchor is waving a gun. She apparently is warning rebels that she and her colleagues are ready to become martyrs to defend the station saying, quote, "With this weapon, I either kill or die today."

ROMANS: In Tripoli, some of Moammar Gadhafi's forces are still putting up a fight. What you're hearing there is sporadic gunfire in the capital. The rebel forces claim they now control a great majority of Tripoli at this hour.

COSTELLO: And as Moammar Gadhafi's power appears to wane, the rebels are only growing stronger. Overnight they celebrated in Tripoli's Green Square, the symbolic heart of that country's capital.

And here you're looking at pictures of rebel forces celebrating after they seized control of the military base known as "Kilometer 27," sits just outside Tripoli. The base was considered one of the biggest obstacles on the road to capturing the capital.

COSTELLO: In Benghazi thousands shouted and fired their weapons into the air. Benghazi was the rebels' first stronghold and where the current rebel government resides.

ROMANS: So could today go down in history as the day when Moammar Gadhafi's 42-year reign comes to an end? COSTELLO: Joining us live from Providence, Rhode Island is the Ambassador Nicholas Burns. He is the former undersecretary of state and a professor at the Harvard Kennedy School of Government. Thank you for joining us this morning.

UNIDENTIFIED MALE: Thank you. Pleasure.

COSTELLO: So everybody's wondering this morning, where is Moammar Gadhafi? Care to guess?

AMBASSADOR NICHOLAS BURNS, UNDER SECRETARY OF STATE FOR POLITICAL AFFAIRS 2005-2008: Well, you know, I think Gadhafi had a chance over the last couple weeks to leave the country, to go to a third country, perhaps Chad, perhaps Algeria, where he could have had safe haven and lived out a life.

I think that chance is over. If he's still in the country, he's likely at a military base. He may not be in Tripoli, no one knows. But the really danger is that this insurgency could continue. The fighting could continue, as long as Gadhafi believes he's still in power.

And so obviously imperative that he be found quickly and this battle, the battles can end as quickly as possible to preserve human life in Tripoli and elsewhere.

ROMANS: How dangerous are the pockets of resistance. Some saying there could be an insurgency that stems from that if you don't get Gadhafi quickly or look these are mercenaries who are supporting him. His support is not widespread in the country.

BURNS: I think Gadhafi has effectively lost power. The rebels are in control of nearly all the country, nearly all of Tripoli, but there is a possibility that some remaining Gadhafi loyalists could gather around him and rally support and perhaps continue the fighting for a couple days, perhaps longer.

But that's unlikely. I think the handwriting is on the wall. His hours are numbered, not just his days being numbered. His 42-year rule is coming to an end. And now the real challenge will be, can this rebel alliance, which is really a people's army.

Can it now begin to constitute a government, to find a way to govern across that very vast country, a diverse country? As you know, Gadhafi played off one tribe against another to preserve his own rule over 42 years.

Gaining effective early control is going to be very important for this courageous, but obviously vast alliance that spreads over many, many states.

COSTELLO: Well, let's talk about that as far as the United States is concerned. President Obama has always wanted the United States to take a back seat, but it's still very much involved. How involved will the U.S. be with establishing a new government within Libya? BURNS: Well, I think first of all, the European countries ought to take the lead here. France and Italy, Germany, Britain, they have much more pronounced interests in Libya than the United States certainly closer political and economic relations.

So I think you should look to the Europeans to lead. The United States can certainly help with perhaps early economic aid, with political encouragement, perhaps even recognizing the rebel government once it does, once it is able to take power.

But in the final analysis, it's going to depend on the Libyan people to be able to get this government up and running, to spread the control of that government outward from Tripoli and Benghazi, to all the other cities where Gadhafi still held power as of yesterday.

There were a number of them and that's going to take some time. I think we have to expect to see a slow transition, perhaps a chaotic transition, perhaps, even, unfortunately a violent transition that wouldn't be surprising at all given the degree of this unity that this country has suffered for so long.

ROMANS: For 42 years it's been ruled by one person and finally the people's army as you describe it, has a very big task ahead of it. One has to wonder, how much influence and support from, say, Europe and the United States is going to be needed?

Because there aren't even institutions that are functioning for the people in this country, the middle class has been decimated in this country. I mean, you have to undo 42 years of behavior almost.

BURNS: You do. And part of Gadhafi's ability to control a country over four decades was to essentially destroy civil society, not to allow citizen groups to form, certainly not to allow any regional groups to form that might challenge him from power and those are the things that run a civil society, a democratic society that work in our own country.

So they will have to grow over time. So what we can do from abroad is to try to give some space, provide some space to the Libyan people, to get their lives together after six months of warfare, to heal the wounds of a very fractured and badly divided society.

It's a poor country. Perhaps help the poor people of the country to get on their feet again. There's a lot of work that has to be done, and frankly the Arab countries, particularly the countries of the Gulf, should be able to come in. They should come in with economic assistance.

They're wealthy. They have the ability to do so. They have an interest because the Arab league should want to see this society in Libya heal itself rather quickly. It's been the most violent revolution of all the revolutions we've seen in the 22 Arab countries since the Arab revolt started in January.

And obviously there's an interest in the Arab world in seeing Libya succeed in the future, not under Gadhafi, the tyrant, but under this people's government, this people's army that has succeeded so brilliantly in the last couple days.

COSTELLO: So just a final question for you. Now that Libya is drawn to what many call a successful conclusion, will that put more pressure on, perhaps, NATO or the United States to deal with Syria?

BURNS: I don't think so. Remember, when President Obama agreed to the NATO mission, in Libya, it was because the Arab league invited NATO to come in. The U.N. Security Council authorized it. There was an imminent seize of Benghazi six months ago.

And so there's a humanitarian impulse. None of those exist right now in Syria. Syria is not a place where I think the United States or any other country is contemplating military involvement, but I think the Obama administration has been absolutely correct to break relations with that country, to call for a -- the resignation of Bashar Al Assad, the Syrian president, and to put quite severe U.S. economic sanctions on Syria.

Those are the things that the United States is doing and I think the Obama administration has acted correctly and very wisely to keep us out of Syria militarily.

COSTELLO: Ambassador Burns, thank you so much for joining us this morning. We appreciate it.

BURNS: Thank you.

ROMANS: It shows you each of these conflicts, each of these revolutions, each of these movement since the Arab spring six or seven months ago has been different, has been very different, but the same kind of thread running through it. We'll see if this one is drawing to a close in a matter of hours.

COSTELLO: We'll see. Stay with us for the latest from Libya. Plus, new development in the case against the former IMF chief, Dominique Strauss-Kahn, criminal charges may be dropped this morning. We're live with the latest. It's 37 minutes past the hour.

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ROMANS: We're following breaking news this morning. The end appears near for the Libyan dictator Moammar Gadhafi, rebels firing their guns in celebration on the road into the heart of Tripoli. Libyan rebels say they now control most of the capital. Gadhafi, though, has still not given up and remains in hiding.

COSTELLO: A warning from embattled Syrian President Bashar Al Assad. In an interview with Syria state run television, Assad said any military action against Syria would bring repercussion to any countries interfering in Syria's affairs.

He also went on to say he's not worried about security in his country and doesn't think his regime is in danger of collapsing. The revolt against his family's 40-year rule erupted in mid-March.

ROMANS: The families two of jailed American hikers are speaking out this morning. They're urging the Iranian government to, quote, "show compassion" and free those two men.

Josh Fattal and Shane Bauer sentenced to eight years in prison after being convicted of espionage and illegal entry in Iran. They were arrested more than two years ago.

COSTELLO: Dominique Strauss-Kahn, the former head of the International Monetary Fund, could soon be a free man. Prosecutors are widely expected to drop this sexual assault charges against him as early as today.

ROMANS: Susan Candiotti joins us now. She's been following the story from the very beginning. Susan, lawyers for the accuser aren't very happy about that this morning are they?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Not at all. Because Nafissatou Diallo's attorney, Ken Thompson, tells me he does expect the charges to be dropped. CNN has learned from several sources that an official announcement could be made as early as today in advance of tomorrow's court hearing.

Diallo and Thompson are scheduled to meet this afternoon with prosecutors to discuss this case and things will probably get tense. Thompson feels his client is being treated as a criminal defendant, rather than an alleged victim.

The meeting is billed as a one-time opportunity to find out what will happen in court on Tuesday. That's when Dominique Strauss-Kahn makes his next appearance and gets the official verdict on whether charges will be dismissed.

COSTELLO: What a colossal embarrassments for prosecutors if this case is dropped or dismissed. I mean, how did it fall apart?

CANDIOTTI: Well, that's a long story, but it boils down to credibility issues. Basically, prosecutors appear to have lost faith in Diallo's credibility. Among other issues, investigators said she admitted lying on asylum forms, not just any lie, she claims she was gang raped to make her asylum claim more powerful.

She lied on tax forms and had a questionable relationship with a jailed friend, allegedly involved in money laundering. Then there was Diallo's TV and print interviews. Prosecutors generally don't prefer alleged victims coming forward before a trial.

And she also filed a civil lawsuit before trial and that opened her up to criticism from DSK's defense attorneys who claim she's just doing this for the money.

Her attorneys countered it gave her a chance to tell her story and hopefully get support in the court of public opinion and put pressure on prosecutors to go forward. But that does not appear now to be the case.

ROMANS: So what's next for Strauss-Kahn who's been in New York this whole time? CANDIOTTI: That's right. Well, assuming that prosecutors go ahead and drop the charges as expected, and the judge accepts it, he's likely to be a free man.

But he'll need to deal with the civil lawsuit here in the U.S. and another civil case from another alleged attack in France and, obviously, his reputation has taken a major hit.

He resigned as chief of the International Monetary Fund and was once considered a strong candidate for the French presidency, but will he be on the next plane out of here?

COSTELLO: I don't know. It's a probably a good bet, right? So let's go back to the original criminal case for just a second because the alleged victim in this case isn't quite giving up. She's going to file a motion, or her attorneys are rather.

CANDIOTTI: that's correct. That's expected to happen today. He is asking the court to take the DA off the case and appoint a special prosecutor to take over. Her lawyer tells CNN, it's the prosecutor, not his client, who's damaged her ability to get a fair trial.

But in the end for prosecutors, analysts say there were too many credibility issues to be able to convince a jury beyond a reasonable doubt that's what the problem appears to be.

ROMANS: What a colossal mess.

CANDIOTTI: Sure is.

COSTELLO: Susan Candiotti, many thanks.

ROMANS: Thanks, Susan. Also developing right now, the first named hurricane of the season, Tropical Storm Irene, is now Hurricane Irene. Picking up strength overnight, now a hurricane, lashing Puerto Rico with heavy rain, 75-mile-an-hour winds and Irene could pose a severe threat to the Florida coasts by week's end.

COSTELLO: Yes, well, let's see exactly when. Reynolds Wolf live in Atlanta in the CNN Severe Weather Headquarters. Tell us, give us the specifics.

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ROMANS: All right, Reynolds. We know you'll be watching for us as it progresses. Thanks.

WOLF: You bet.

COSTELLO: Morning headlines coming your way next including new developments overnight as rebels fight for control of Tripoli.

It's 46 minutes past the hour.

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COSTELLO: Forty-eight minutes past the hour. Here are your morning headlines.

Breaking news this morning. Moammar Gadhafi hanging on to his last thread of power right now. New explosions rocked his compound overnight. Rebels have now taken the heart of Tripoli and say they are in control.

Gadhafi's whereabouts still unknown, though, right now. The opposition says he may have even fled to a bordering country. Rebels have now captured three of his sons. One is expected to face charges of crimes against humanity at The Hague.

Investors bracing for another potentially rocky week in the markets after steep losses across the board last week. Right now, U.S. stock futures for the Dow, Nasdaq and S&P 500 all trading higher ahead of the opening bell. Investors getting a boost from a dip in oil prices overnight.

Fan violence at Candlestick Park in San Francisco this weekend. It happened at the 49ers/Raiders pregame. Cameras captured fans brawling in the stands. Another fan was severely beaten in the restroom and police are investigating a double shooting in the parking lot. Wow.

The hotel maid who accused Dominique Strauss-Kahn of sexual assault will meet with prosecutors today. The attorney for Nafissatou Diallo says he thinks the DA plans to drop the criminal case. In the meantime, Diallo's lawyers are expected to ask for a special prosecutor.

Eye on Irene, now the season's first hurricane. The storm is pounding Puerto Rico with heavy rain and 75-mile-per-hour winds. Hurricane warnings are also for the Dominican Republic. Irene's projected course could take it over the coast of Florida by the week's end.

That's the news you need to start your day. AMERICAN MORNING back after a break.

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Following breaking news this morning, people in Tripoli celebrating what appears to be their newfound freedom. Libyan rebels say they now control most of the capital. Moammar Gadhafi, though, has still not given up. He remains in hiding this morning. President Obama is saying Gadhafi should now recognize that this is it for him.

What are the opinion pages saying this morning about Libya and other news of the day? Here's your morning opinion.

Now that the Gadhafi regime is coming to an end, an op-ed in the "Financial Times of London" says, the hard part is about to begin and asks the U.S. to help out on the ground. The article reads, "Some sort of international assistance and most likely an international force is likely to be needed for some time to restore and maintain order. Most importantly, U.S. President Barack Obama may need to reconsider his assertion that there would not be any American boots on the ground. Leadership is hard to assert absent participation."

ROMANS: Investor Nick Burns said that this should be a European-led effort.

Meantime, "The Washington Post" this morning looks at the economy. Eric Cantor writes that, "Either increased spending or raising taxes will fix the problem." He writes, "The politics of division have reared up, fueled by efforts to incite class warfare. Why does the president insist on higher taxes? Behind the rhetoric lies the desire to permanently increase the size of government." That's from Eric Cantor in "The Washington Post."

COSTELLO: We asked you to Talk Back on one of the big stories of the day -- actually, the big story. We asked you this question: was U.S. involvement in Libya worth it?

This from MaryAnn. She said, "It's worth it when we see Libya liberated. However, if America is going to continue policing the world they need to be consistent. Thousands of people are being massacred by Bashar al Assad yet the United States does not get involved. Why?"

This from Avery. "Absolutely not. It was an illegal act of war never authorized by Congress. America should not go seeking monsters abroad and steer clear of these foreign civil wars. What do we know about the rebels and the leaders who will replace Gadhafi?"

And this from Andrew. "Do the ends justify the means? Obama refused to get congressional support like the law requires but a dictator is now gone because of President Obama's actions. Not one American casualty. But it's too early to tell. Crowds rejoiced in Baghdad, as well, when Hussein fell. If the rebels can consolidate power, not splinter into factions and fight among themselves and prevent the lawlessness that prevailed in Baghdad, then they have a chance. The next few weeks will be most important."

Keep the conversation flowing. Facebook.com/americanmorning.

ROMANS: All right. The latest on the situation in Libya right after the break. It's 55 minutes after the hour.

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