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Bush Prepares Major Speech on Iraq; Beijing Bids for U.S. Company

Aired June 26, 2005 - 10:00   ET

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

BETTY NGUYEN, CNN ANCHOR: Good morning. I'm Betty Nguyen at CNN Center in Atlanta.
"Now in the News," insurgents launch deadly new attacks in Iraq. An American soldier was killed earlier today in a roadside bombing in Baghdad. Two others were wounded. The U.S. military death toll in Iraq is now at 1,734.

In northern Iraq, insurgents launched a terrifying round of attacks in the city of Mosul. At least four suicide bombings in 18 hours killed nearly two dozen people and wounded dozens more. Many of the victims were Iraqi police officers.

Here in the United States, wildfires are still spreading across vast sections of the West. Firefighters in southern Utah are battling a string of wildfires sparked by lightning. The biggest blaze has scorched at least 59,000 acres.

Experience the power of CNN video on your computer. Log on to CNN.com, click on the video link and browse for the video you want to see. You can watch what you want, whenever you want, and it's absolutely free at CNN.com.

I'm Betty Nguyen. More headlines at the bottom of the hour. ON THE STORY is next.

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Good morning and welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Andrea Koppel, on the story of tough talk from Secretary of State Condoleezza Rice to the Arab world. The U.S. will no longer choose stability at the expense of democracy.

ELAINE QUIJANO, CNN CORRESPONDENT: I'm Elaine Quijano, on the story of President Bush rejecting any timetable for pulling out of Iraq and preparing a major speech for Tuesday on what is happening in the war.

KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, on the story of dramatic evidence this week of how strong China has become. Bids from Beijing for major U.S. companies.

We'll go to Indonesia, where Atika Shubert talks about the tsunami six months after she first reported on that disaster. We'll go to Iraq, where Jane Arraf continues her reports with U.S. forces fighting insurgents. And we'll go to Aruba for more on the case of the missing Alabama teenager.

E-mail us at ONTHESTORY@CNN.com.

Now straight to Elaine Quijano, on the White House story.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Why would you say to the enemy, you know, here's the timetable, just go ahead and wait us out? It doesn't make any sense to have a timetable.

(END VIDEO CLIP)

QUIJANO: President Bush Friday slapping down the idea of giving details of when he might pull out U.S. forces from Iraq. He made those comments at a joint question-and-answer session with Iraqi Prime Minister Ibrahim al-Jaafari. The Iraqi leader mirrored the president's comments, saying this is not the time to fall back.

HAYS: But certainly the president, no matter what bold front he puts up, must feel a bit on the defensive as he sinks in the polls, especially on Iraq. At his speech coming up Tuesday, I believe, is he going to come out swinging again or are we going to see some admission that things haven't gone perfectly?

QUIJANO: Well, certainly, we already started to hear that. In fact, the president during that very news conference used some very cautious language.

You know, we heard him say that it was going to be difficult. We heard this yesterday as well in the radio address, there are going to be difficult days ahead, because, of course, the White House is well aware of the fact that these almost daily insurgent attacks are being played out on television screens across the country and around the world.

So the White House very much wants to get its message out. We're likely to hear something similar to the radio address, the two-track strategy. No timetable, though, on a U.S. withdrawal date or anything of that nature. But the two-track strategy being training Iraqis to take on more of their own security responsibilities and also helping the political process in Iraq move forward to establish a democracy there.

KOPPEL: Now, he's going to be talking at Fort Bragg. The White House chooses these venues very carefully.

QUIJANO: Absolutely.

KOPPEL: He could have picked any military base. Why there?

QUIJANO: Well, absolutely. Fort Bragg in North Carolina is home to the 82nd Airborne Division, and the timing of this quite notable as well.

First of all, the White House on Friday asked the networks for prime time. I mean, just that in and of itself quite telling in terms of how the White House really wants to push this message out and make sure that the American people can hear it.

One thing that the White House feels maybe hasn't been done is this conflict hasn't been put in perspective, into context, at least in terms of how the White House would like to do it. This is an opportunity they feel for the president to do that, but also to talk to the troops, and to essentially say, I know the sacrifices you have made, I know the sacrifices that your families are making, but this is an important conflict.

This is an important piece, a component of the war on terror. And so, yes, everything chosen carefully.

HAYS: There's frustration even with Republican lawmakers.

QUIJANO: Absolutely.

HAYS: They have to run for office again, many of them. The president doesn't.

QUIJANO: Absolutely, and that is another factor that is certainly playing into this as well, because this discontent, if you will, that's showing up in the polls, the last CNN-"USA Today"-Gallup poll that we had was 39 percent of folks are in favor of the war. And that is down eight points from where it was just back in March.

So at the same time, you have this sentiment sort of spilling over into the Congress. And some Republicans, as you point out, you know, members of the president's own party, are saying, look, there has got to be some kind of more specific plan detailed to the American people, not necessarily a time frame, because they're in agreement that strategy-wise, that would not be the way to go. That certainly would give the insurgents the upper hand, they feel. But at the same time, there need to be more detailed so that people understand what exactly the next steps will be.

KOPPEL: So what, in fact -- do you have any kind of preview as to what the president might say that would, perhaps -- I mean, he's not going to be able to reassure the American people, because what he's saying is this is going to be a long, protracted battle.

QUIJANO: Absolutely. And, you know, it's interesting. On that point, earlier last week, we heard from top commanders talking about how the insurgency really is sort of at the same level that it has been over the last few months. In fact, let's take a listen to that.

Now, that was General Abizaid, John Abizaid, talking to lawmakers on Capitol Hill. Let's take a listen.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, COMMANDER, CENTRAL COMMAND: In terms of comparison from six months ago, in terms of foreign fighters, I believe there are more foreign fighters coming direct than there were six months ago. In terms of the overall strength of the insurgency, I'd say it's about the same as it was.

(END VIDEO CLIP)

QUIJANO: Now that, to some people, appeared to be in direct contrast to Vice President Cheney's statement just a few weeks before saying that the insurgency was in its last throes. And so here you had -- in fact, the president was asked about that, and the way he sort of answered was to use that language, the very cautious language, the very cautious tone, saying that, I know it's difficult, we've got this hard work ahead. But at the same time, he had that refrain that we always hear in that progress he feels is being made.

HAYS: No caution on the part of Karl Rove this week, though, when he said that the liberals prefer to give therapy to terrorists, unlike the Republicans, who are willing to fight them tooth and nail. By putting so much focus on this, though, are the Democrats playing into Rove's hand? Put the focus over here on this little brouhaha instead of Bush sinking in the polls?

QUIJANO: Well, certainly they've had a strong reaction to this. But let's take a listen first to what Karl Rove actually said. Just to set this up a little bit, this was actually a speech that Karl Rove was making to the New York State Conservative Party. Let's take a listen and hear exactly what he had to say.

(BEGIN VIDEO CLIP)

KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF: Conservatives saw the savagery of 9/11 and the attacks and prepared for war. Liberals saw the savagery of the 9/11 attacks and wanted to prepare indictments and offer therapy and understanding to our attackers.

(END VIDEO CLIP)

QUIJANO: Now, Democrats are outraged by that. They say that that is a harmful statement, a harmful thing to say. They say it's highly, highly partisan, and they've written a letter calling on Karl Rove to apologize. And they've also written a letter to President Bush, saying that if he doesn't apologize that he should be fired.

Now, the White House, of course, is standing firmly by the statement in terms of not saying -- you know, not denouncing the statement, but simply saying that, look, Karl Rove was simply pointing out differing political philosophies, different approaches. And they also point out sort of the context.

What you didn't hear in that sound bite was that Karl Rove specifically mentioned moveon.org, specifically mentioned Michael Moore. But Democrats, they feel outraged, and they are sticking by, you know, their guns. They're saying that, look, he better apologize or else the president should ask him to resign.

KOPPEL: Well, another voice of the administration this week was Secretary of State Condoleezza Rice and her sharp words to the Arab world about supporting, not stifling democracy. I'm back on that story after this. (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: For 60 years, my country, the United States, pursued stability at the expense of democracy in this region here in the Middle East, and we achieved neither. Now we are taking a different course. We are supporting the democratic aspirations of all people.

(END VIDEO CLIP)

KOPPEL: No more stability at the expense of democracy. Secretary of State Condoleezza Rice and not only -- was not only important what she said, but where she said it at the start of the week in Egypt, a close U.S. ally that is, to say the very least, not a democracy.

Welcome back. I'm Andrea Koppel. And we're ON THE STORY.

QUIJANO: And Andrea, I thought it was interesting. We had heard some of these same themes. We have heard them before from the Bush administration. But why was this particular speech viewed as being so significant.

KOPPEL: Yes. It's not just the same themes, but the same words, actually, were spoken by President Bush dating back 18 months ago, to November of 2003.

Really, what -- what you had here was Secretary of State Rice not just taking the message to the Arab world, but taking it to the capital of a country that is a close U.S. ally. And Hosni Mubarak, who's been the president for almost 30 years, is effectively a dictator.

And so for Arab people, this was the United States standing up. It was a great big mea culpa, saying we are not going to -- we are not going to treat our friends one way and have a double standard and treat our enemies another, or those we don't feel as close to. We're going to have the same standard for everyone, and we're no longer going to be hypocritical, which is the way that the U.S. had been viewed in the eyes of may in the Arab world.

HAYS: Well, the words so carefully chosen. There are even references and allusions to slavery in the United States as part of the shame of our past. I can only imagine the preparation that went into every single word.

KOPPEL: Absolutely. In fact, we were talking to a couple of the people who were involved in writing this speech. And as far as Rice's senior aides were concerned, this was a speech that was going to stand the test of time, much as Ronald Reagan's speech, "Mr. Gorbachev, tear down that wall" has lasted for over 20 years.

This was going to be not a bunch of platitudes. It wasn't going to be just a laundry list of what you need to do, but really something that 20, 30, 40 years from now people will look back on and say, "I remember when the United States finally said to its friends that are not held to the same standard, this isn't going to happen anymore."

QUIJANO: And Andrea, on another topic, John Bolton, a status check quickly. Where do things stand now?

KOPPEL: You know, I think a lot of folks started the week -- the Senate leadership, Bill Frist, said we're going to have another vote. We're going to -- they needed 60 votes to cut off debate on John Bolton. And by the way, this has been going on for four months. We still don't have an ambassador at the United Nations.

They fell six votes short of getting the 60 votes needed. The last time they held a vote like this about a month ago they fell four votes short. So they're -- they're -- in fact, there are more Democrats that are stepping back. And, in fact, I spoke to a senior aide to the minority leader, Harry Reid, and he said that they had a caucus a couple of weeks ago and no more Democrats are going to break ranks.

So what is the White House doing? You had Bill Frist, who, just before he went in to have lunch with Mr. Bush this week, saying, that's it, we're not going to have any more votes. He does a complete about-face when he comes out from lunch. And so really, the Democrats and Republicans are saying what's going on?

You don't have the votes. Why are you going to go for another cloture vote to break off debate? Is this going to be a recess appointment?

And we have Fourth of July holiday coming up, and many people are wondering, is this part of the White House strategy to say we're going to try for another vote? If we see the third time around we still don't have it, then President Bush is either going to say to John Bolton, look, you've got to pull your nomination, or he's going to appoint him in recess.

Why is that a bad thing? Well, effectively, John Bolton would only be able to serve until January of 2007, not for the full Bush administration. So...

HAYS: Right. A fascinating story you've been looking into, though, the case of a brave Pakistani woman, a rape victim, coming to the United States.

KOPPEL: Mukhtaran Mai.

HAYS: Yes.

KOPPEL: This is a woman who -- a Pakistani woman who lives in a small village in Pakistan, and back three years ago was ordered by the tribal chiefs to be gang-raped by four men in her village because her brother, who was 12 years old, was allegedly sodomized by men in the village and was going to speak out against this.

And as a result, the tribal elder said, oh, no, he had an affair with another woman, and so the woman you're looking at right there was going to have to pay the price for this alleged affair and was ordered gang-raped. Rather than killing herself, as so many of them do, or ordered killed by other villagers, her family to have her killed in a so-called honor killing, she has taken the money that the government gave her in compensation and built two schools in her village. And now this small NGO that started up around the same time that her case first came to light three years ago wanted to bring her over here.

The Pakistani government has been blocking it in a variety of ways. And I just spoke to the woman who's been trying to bring her over here. And apparently, she's got a legal -- her case is going to be brought to the supreme court of Pakistan next week, and she's hoping, hoping that the 12 men who were originally convicted are going to be put back in prison because the Pakistani government released them.

We still don't know if and when she's actually going to be able to come to the United States.

QUIJANO: Andrea, that's just unimaginable as an American woman, but a fascinating story. Thanks for bringing that us to.

And from diplomacy and that story to natural disaster, a half a year since the tsunami devastated coastal areas across a wide swathe of southern Asia. Our Atika Shubert was there then and back now on the story. We'll talk to her after this.

(COMMERCIAL BREAK)

KOPPEL: Nightmarish pictures of the natural disaster in southern Asia just six months ago. Death and destruction of biblical proportions.

CNN's Atika Shubert was on the scene of the tsunami shortly after it hit and is back now in Indonesia and joins us by phone.

Atika, you know, I think you've just gotten back there this past week. What strikes you the most in terms of the changes, if any, since you were last there?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, you know, this is one of the most heart-wrenching and heartwarming stories actually to cover in the first few days after the disaster. Honestly, it was an overwhelming experience just being here amid all of the death and destruction, hearing these -- these terrible stories.

But in the weeks afterwards, and especially since coming back here six months later, it's also been very heartening to see the amount of aid, the amount of help that's been coming in from overseas. But most importantly, the resilience of the Acehnese people.

It's amazing how many people we talked to who lost everything, but they're insisting on, you know, getting back on their own two feet. We talked to a young woman today who lost her younger sister, and you could see it just broke her heart to lose her. But she was determined to move on, saving what little money she could make from cash-for-work programs and investing it in a small business so she could move on.

So it's those kinds of stories that really strike you when you're here.

QUIJANO: It's amazing, Atika. Now, I know you've been reporting on tsunami survivors, children who've lost everything and put together new lives and families. Let's take a look at part of your report on the orphans of Banda Aceh.

(BEGIN VIDEO CLIP)

SHUBERT (voice-over): Bukari (ph) and Hamdani (ph) are 18 and 15 years old. They're not related, but their brothers of a sort. When their families were swallowed by the tsunami, they found each other huddled in a mosque with thousands of other survivors, yet utterly alone.

"I'm not looking for my family anymore," he says. I don't have any hope of finding them. If they're still alive, with luck perhaps they'll find me. We're on our own now."

Instead, the boys created their own family when they met Mahdoun Ahmad (ph), a father who lost his wife and two teenage sons in the tsunami. They live together in a one-room temporary shelter.

"I'm alone, he's alone, Mukari's (ph) alone. We're all lonely," he says. "We thought, how are we going to find a home on our own? So we banded together and ended up here."

Mahdoun (ph) looks for work during the day, unsuccessful most of the time, and cooks in the evenings. There's enough money for rice and a single egg split between the three of them. The burden of raising two teenagers clearly wears on him.

(END VIDEO CLIP)

QUIJANO: And Atika, when you look at these individual stories and you think about them in the aggregate, you think about how the Indonesian government can quite possibly even begin to handle that situation. How are they dealing with all of these survivors with the orphans that they have now -- that they are now trying to help?

SHUBERT: Well, it's an enormous task, and no one appreciates that more, I think, than the director of the recovery agency here. His name is Kontura Mokoshabruta (ph). We actually talked to him yesterday.

And his attitude is, you know, "These people have been in their tents long enough, and I'm going to work as hard as we can to make sure that they can lead a normal life again, but it's going to take years." And that's the message he's been trying to communicate to many survivors here.

And when we talk to survivors, it's amazing. They want to start reconstruction as soon as possible, but they're also very patient and they're willing to give the government a chance. They want to see the aid as soon as possible, but they warn -- the one man we spoke to warned yesterday, If we wait too long, then we're just going to start rebuilding on our own, no matter what the government says,"

So we'll have to see what happens.

HAYS: And you were talking about all the aid that has come in from around the world, but you're also mentioning the delays. What causes the delays? Are there politics involved? Why does it take so long to build even the most rudimentary housing for so many of these people?

SHUBERT: Well, that's one of the tragedies of what's happened. Immediate relief was very fast and very effective. It definitely prevented massive outbreaks of disease, for example. But that transition from immediate relief to reconstruction has been very long, and one of the reasons is simply bureaucratic.

There's more than $7 billion in aid coming into Aceh, and the Indonesian government simply seems to be stymied by the amount of aid that was coming in. It took them a long time to approve it, and it's really been only in the last few days that they've been able to disperse about $2.8 billion. And that will get a lot of the projects started, but again, it could take many years. And the people we talk to say they are willing to wait, but they can only wait so long.

KOPPEL: So what do people need the most, Atika? Do they need food?

You said that the government has a lot of aid and it's kind of caught in the pipeline. Are you talking about tangible aid, like food, or are you talking about money that they can then use?

SHUBERT: Well, the food is already covered, those sort of basic necessities. People have food, they have water, they have a roof over their heads, and they've got access to medicine when they need it.

However, what they really need is housing. They need -- they need a good, solid shelter, not just some flimsy piece of wood or a tent. They want cement houses where they can really start living their lives again. And once they have their houses, what they want are jobs.

They can't -- they don't want to live on handouts. Many of the Acehnese we've talked to, they're a very proud people. And they want to be able to return to work, if it means work in terms of rebuilding houses.

They also want to see their boats come back so they can go fishing again. That's what they say they need. And it's across the board. Men and women and teenagers say they all want to start working again.

So those are two top priorities. And, of course, building communities, getting the schools back up and running, getting medical facilities. But again, all of that will take many years to do.

HAYS: Well, Atika Shubert, thank you so much for bringing that story to us, especially the resiliency of this people, I think which is so inspiring to the rest us. Good luck on the story. We'll be watching your reports.

From southern Asia to the U.S. economy, and why Chinese businesses were bidding this week for U.S. companies.

Also coming up, we'll to go to Iraq, where Jane Arraf is on the story of new attacks on U.S. forces.

We'll go to Aruba, on the story of the Alabama teenager missing now since the end of May.

And at the end of hour, our "What's Her Story?" segment on the first witness at the Mississippi murder trial dating back to 1964.

All coming up, all ON THE STORY.

Plus, a check of what's making headlines right now.

(COMMERCIAL BREAK)

NGUYEN: Good morning. I'm Betty Nguyen at the CNN Center in Atlanta. ON THE STORY continues in just a moment. But first here are the headlines right now in the news.

Florida's northwest beaches have reopened this morning following yesterday's shark attack that killed a 14 year old girl. Coming up at 11 eastern the man who tried to rescue the girl describes the horror of being followed to shore by what he says was the most aggressive sharks he had ever seen.

In Aruba now a judge is expected to decide if five suspects held in the disappearance of Alabama teenager, Natalie Holloway will remain in custody. The decision was expected yesterday but the judge's flight to the island was delayed.

Meanwhile, professional searchers from Texas are combing the island still looking for Natalie Holloway.

And Evangelist Billie Graham will end 60 years of revivals delivering what's expected to be his final U.S. crusade sermon tonight in New York. Over the last two nights he's preached to tens of thousands of people. Among the well wishes was Former President Clinton, who called Graham, quote, "A man I love."

You can experience the power of CNN video on your computer. All you have to do is log on to CNN.com click on the video link and browse for the video that you want to see. You can watch it any time you want and it's all free at CNN.com.

Those are the headlines. We'll have more news at the top of the hour on CNN LIVE SUNDAY. Now it's back to Washington and CNN's "ON THE STORY." (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our nation needs to confront a basic problem. We're using energy faster than we're producing it.

(END VIDEO CLIP)

HAYS: President Bush after touring the Calvert Cliffs Nuclear Power Plant in southern Maryland this Tuesday. He went on to say it's time for the U.S. to start building nuclear power plants again, as well as other steps to ease dependence on energy imports.

Welcome back. I'm Kathleen Hays. We're on a story.

QUIJANO: And Kathleen, President Bush focusing on energy last week, but we also heard last week oil at $60 a barrel. What's behind that?

HAYS: I know. In the market traders have been talking about, economists have been saying we could hit $60, but we hit it very fast. And what was really interesting about this week we hit it in a week there was no supply shock. The strike in Norway was averted. The Nigerian unrest is still there. But there was no pipeline blown up. It was simply more evidence our demand keeps growing.

One of my favorite moments was this week I was calling traders and I said to one guy, hello, I was just wondering how you're viewing the market today and without missing a beat he said, with astonishment. A lot of the traders can't believe how quickly just this evidence that we keep using more and more energy, more oil, more gas, more diesel with prices still climbing I think has a lot of people wondering just how high can it go.

QUIJANO: And what's the answer?

HAYS: Well, I've seen people saying easily $65 a barrel now. Some people saying $70. There have been these forecasts out there for -- in the event of some -- more of a disruption, which could happen at any time in the geo-political world of oil. We could even touch $100 a barrel at some point. Not this year.

Now there's another camp that says remember when oil gets expensive it costs more, it cuts into profits, it cuts into spending. The history of oil it spikes up, it causes a recession, demand crashes and the oil market crashes. But at this point we're a long ways from that. And of course ,one big reason, it's not just the U.S. now it's China, it's India.

KOPPEL: Well, actually I was going to say because this crosses over onto my beat, CNOOC this enormous Chinese company for the first time making a bid on an American oil company.

HAYS: This was in the works because Chevron had bit, which is the number two oil company and oil monster, giant, Unocal based in southern California the ninth largest oil and gas producer. Chevron's bid was actually accepted by Unocal shareholders back in April and then CNOOC.

Apparently there were a lot of people advising, don't do this. They were going to boil the political waters. They came in with an $18.5 all cash bid. Very serious, very aggressive and of course, because CNOOC is largely owned by the Chinese government some people are viewing this as a very aggressive step by the Chinese government towards our economy.

KOPPEL: And so is there any way if the Bush administration wanted to block the deal that they could?

HAYS: There is a group we never hear about very much until times like this called the Committee On Foreign Investment. It was set up in 1988 by George Bush, Sr., the president then. And in the past they'd looked at deals generally when there was some kind of high technology involved that the government was worried if it were purchased by a foreign country could be used say for military purposes. It's something more directly referenced to what we call national security.

Now there is talk that this committee should look at the purchase of a major U.S. oil producer as something that would hurt our national security. A new way of looking at it, maybe a somewhat different definition, but there apparently is some pretty serious expectation that this could be blocked.

QUIJANO; And what about American companies sort of where do they -- what are they saying about all of this?

HAYS: Well Chevron, of course, is saying that they think that we should take a look at this. Of course they don't want Unocal to get this company because they say that while they'll bring all the oil to market and sell it the Chinese government in some sense might hold it back for themselves.

Other big companies who do business in China say, hey wait a minute. We're buying Chinese companies. Granted we're not buying a Chinese oil company so economically sensitive. But they're saying you're going to start some kind of war of protectionism, some kind of economic war that could hurt U.S. business therefore hurt the U.S. economy. We've heard that kind of saying out of Federal Reserve Chairman Alan Greenspan when he testified to Congress this week.

KOPPEL: But for Unocal stock holders they're getting a great offer here.

HAYS: They sure are. And they -- it's an interesting deal because the deal was really already accepted. If CNOOC wins this bide they have to pay Chevron a $500 million break up fee. Why it's so important for CNOOC as well is that all of these Unocal oil and gas reserves a lot of them are in Asia. And CNOOC of the big three Chinese oil companies is the one that specializes in the deep sea drilling, which Unocal now has a lot of expertise.

So for Unocal shareholders possibly a very good deal. But again, they might say no to the deal because of the political interference. And they say let's take the clean sweep deal from Chevron it's good enough because we don't know what will happen from the CNOOC bid.

QUIJANO: Kathleen on the domestic front really quickly. Airline prices going up. Why? What's behind that?

HAYS: Can you say jet fuel? Can you say (INAUDIBLE) demand? Demand, which includes jet fuel, diesel, all of those things is one of the things we're seeing crude prices run up. The demand for that, again, even with prices up so much like maybe almost 30 to 40 percent this year alone demand is still strong. And we know that these high jet fuel prices have been the main things driving some carriers into bankruptcy making it very hard for them to compete. They're putting like five dollars each way on some of their tickets. But it looks like these fair increases are gong to stick because the oil prices are staying so high.

QUIJANO: It's all connected.

HAYS: Right.

QUIJANO: Thank you, Kathleen.

Well, from the economy to Iraq we're back on the story of deadly attacks on U.S. forces, men and women, with Jane Arraf after this.

(COMMERCIAL BREAK)

JANE ARRAF, CNN CORRESPONDENT: There are no front lines in Iraq. Any highway is the front line when you have the prospect of improvised explosive devises, those deadly roadside bombs.

ANDREA KOPPEL, CNN CORRESPONDENT: CNN's senior Baghdad correspondent, Jane Arraf, talking about the ever present dangers in Iraq for U.S. forces men and women. After Thursday night's suicide bombing killed U.S. military personnel and at least three women Marines were killed.

Welcome back. We're on the story with Jane Arraf who's on the videophone. Jane, the Iraq was has put new pressure on the Pentagon's policy of banning women in combat units. What's the reaction of the troops where you are? Jane?

ARRAF: You know it's really interesting here. There are a lot of things that soldiers and Marines take for granted that the rest of the country doesn't. One is that they're going to...

Hi, can you still hear me?

KOPPEL: Yes, we can hear you.

ARRAF: Sounds as if we may have lost -- lovely. The thing that mostly the rest of the world takes for granted, the rest of America takes for granted that they don't out here is that soldiers and Marines are going to die they've come to grips with her. And the fact that female Marines have died doesn't really have much more of an expectation that there will be. The United States realizes that women aren't out here filing (AUDIO GAP). And they are driving those very dangerous roads where there are roadside bombs.

KOPPEL: Jane, you've also been reporting on the fight against insurgents along the Syrian border including the discovery of a torture house where Iraqi hostages were held by insurgents. We're going to take a look now at our report on how Iraqi security forces talked to the people they found and then set free.

(BEGIN VIDEO CLIP)

ARRAF: These Iraqi soldiers helped remove the cuffs. They lecture them on speaking up and standing up to the terrorists. In this small and terrible room they argue about how to save Iraq. What do you mean you can't talk, the soldier says? Don't you have a tribe to protect you?

Talk and they'll cut off your head, one of them replies. There's no police. What do you mean there's no police? You yourselves have to take control. You're the youth right now, says another soldier. You need to get together and fulfill this duty. Torture was nothing new under Saddam Hussein, but this is unlike nothing they've ever seen.

Why are they trying to destroy Iraq, this Iraqi soldier asks. In the house Marines find photos of applications for Iraqi army officers. The battalion commander knows them.

UNIDENTIFIED MALE: So it appears as if these guys were targeted by the foreign fighters that were here. So I don't know whether they're alive or dead.

(END VIDEO CLIP)

HAYS: The situation these Iraqis are in is almost unthinkable. Do you hear that kind of conversation often, Jane, the security forces, the Iraqi security forces trying to rouse their fellow Iraqis to fight back?

ARRAF: You know, it's one of the most interesting things about reporting out here. It's not so much the explosions and the big (AUDIO GAP) fascinating to listen to those Iraqi soldiers lecturing young Iraqis (AUDIO GAP) you're lucky like we are sometimes going on in cities and gowns across this country. The stakes are very, very (AUDIO GAP) and you can kind of understand (AUDIO GAP)...

QUIJANO: And Jane, thank you very much. Apologies for the technical difficulties there. We understand conditions obviously not ideal there. But we'll see her back -- see you back here ON THE STORY.

From Iraq now we are bound to Aruba and a missing Alabama girl. More on that after this.

(COMMERCIAL BREAK) KOPPEL: Welcome back. It's been going on a month now since Alabama teenager, Natalie Holloway, disappeared on the Caribbean island of Aruba. Welcome back. We're on the story.

Today a judge in Aruba is set to decide whether five suspects in the case will remain in custody. And a team of Texas search specialists is in their second day of work. Joining us now is CNN reporter producer Alex Quade.

Alex, you've been following some of these searchers and their volunteers. What else can you tell us about them?

ALEX QUADE, CNN CORRESPONDENT: Well, at this point there are 27 members, 27 volunteers who have arrived here from Texas and all four of their cadaver dogs have also arrived. They are out there already this morning. Yesterday they had a very full day. They searched the wetland area. They searched a beach area. And they also went and searched in the rocks at another beach area. So they are going back and they are going back and they're going over things again and again.

HAYS: Alex it's just hard to imagine. There were days when the entire population of Aruba was let out of their jobs early to go search for this missing woman. What does the family say? They must be thinking their daughter's body will be found and at least bring a conclusion to that part of the story. But do they have any hope of finding her alive at this point?

QUADE: It's a great question. The family actually were the folks who called this Texas search team. They're hoping that bringing this search team in will help reenergize the search for Natalie and that they will find her. Just today they are getting those divers out. They're using their side scan sonar for the first time.

QUIJANO: And Alex, in terms of working alongside of authorities what's sort of the effort going on there in terms of coordination. We see them going through some of these areas and one has to think well, shouldn't these areas maybe have been looked at before. What's the coordination like with this group and with the authorities there?

QUADE: This Texas search group got the green light from the chief of police here and also from the prime minister to search and research everywhere. They are working very closely. There's good cooperation according to these Texas volunteers, very good cooperation between them and the authorities here in Aruba. And they are really encouraging volunteers and regular community members from all over this island to come and help them, to come on out and help volunteer research.

The thing about this, yes, tourists have come out and done searches and the Arubans have been searching. The Texas team is not saying, oh, they didn't do a good job or anything like that. They're saying that it's just -- we want to just check again. We want to see if there's anything else that we can find. Give it just a fresh pair of eyes especially with these very special cadaver dogs. They just -- they want to give it another try. KOPPEL: How big is the island? Alex, and are searchers spending most of their time -- it looks from the video that we've been showing that they're on land, but are they trying to divide up their time between land and sea?

QUADE: They are trying to divide their search between land and sea. They are simultaneous searches going on. Right now they have groups out combing specific locations on the island. And then at the same time every day at this point they are also having their special side scan sonar and divers out in the water. And their hope is that they just want to find Natalie. They just want to bring her home regardless of if she is dead or alive. They just want to give something to the families to bring her home to Alabama.

HAYS: Alex, we want to share now with our viewers part of some comments that these head of these Texas searchers made down in Aruba.

(BEGIN VIDEO CLIP)

TIM MILLER, DIRECTOR, TEXAS EQUUSEARCH: We've got a lot of experience behind us. We've got a really -- what I feel is a good track record we're proud of and we don't have any guarantees except we're going to bring the best that we can bring, work with the authorities over there. We're all going to work together with one thing in mind and that is Natalie, finding Natalie, brining Natalie home.

(END VIDEO CLIP)

HAYS: Head of the Texas search group. Their second day of searching going on today.

Alex, tell us more about this man. What motivates him, why he brought these people to Aruba?

QUADE: That's Tim Miller. He has a very personal connection to all of this. He can relate to what Natalie Holloway's parents are going through because his daughter, I think it was about 21 years ago, was abducted, raped and murdered. So he knows what they're going through. He knows that, you know, they searched -- it's a very difficult thing for the families and I think that's where the connection is so strong between the Texas search team and the family that there is a personal connection.

And a little bit more about this Texas search team. They have gone out on about 451 searches around the country. They also help out trying to find tsunami victims in Sri Lanka. And they have about a 78 percent success record in finding missing people, and they hope that their cadaver dogs, sniffer dogs will be able to be a big help in this effort.

QUIJANO: Well hopefully they will be successful. Thank you very much, Alex Quade. And we are back on the story after this.

(COMMERCIAL BREAK) KOPPEL: We want to look forward to next week and some of the stories all of us will be focused on. Elaine, obviously the president has got his big speech on Iraq.

QUIJANO: Absolutely, Iraq a big story. But also looming out there and of course, rampant, rampant speculation going on about Chief Justice Rehnquist retiring and who would the Bush administration put there as far as a nominee and put forward. And so, a lot of speculation about that, but also the big Iraq speech on Tuesday. How specific will he get about what's net in Iraq?

What about for you, Kathleen? What's next for you?

HAYS: Well, talk about speculation, will those speculators push oil maybe above 60. People are saying $65 a barrel could be just around the corner, and the Federal Reserve meets next week on interest rates. Will we get any hint of their concern about high oil prices being a potential recession force or inflation force and that is a big question on Wall Street. But Andrea before we go, I just have to know, this Bolton thing has become like a Washington soap opera. What happens next?

KOPPEL: Yes, it's ground hog day every day. You know, will John Bolton get the nomination, won't he? Will he get the up or down vote on the floor? And we're all waiting to see whether or not Bill Frist will call for yet another vote. He needs 60 votes. They don't have it. And if he doesn't, coming up at the end of the week they're going to -- Congress is going to head off for their fourth of July holiday and the question is will President Bush make a recess appointment, and we don't know.

QUIJANO: It looks like Democrats though holding firm. All the indications...

KOPPEL: Holding firm. They're saying we want that evidence on Syria, the various documents that lead to a speech Bolton gave and they want the transcripts of the 19 intercepts that Bolton had requested on various U.S. officials and other government companies.

So thanks to Kathleen, Elaine and all of our colleagues around the world and in Aruba and thank you also for watching on the story. We are not going to be here next week. That's going to give us time to work up a new and improved and expanded ON THE STORY returning two weeks from this weekend at our new time. That's going to be Saturdays at 7 p.m. Eastern as well as back here Sunday mornings at 10 a.m. Eastern.

Today at the top of the next hour, 12 noon Easter, "LATE EDITION" with Wolf Blitzer. Among Wolf's guest the head of the U.S. Central Command General John Abizaid.

Straight ahead we're going to have a check on what's making news right now.

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