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Muslim Remembrance comes Amid Violence in Iraq; Israel Under Pressure to Respond to Latest Act of Terror

Aired January 30, 2007 - 12:00   ET

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

JIM CLANCY, CNN INTERNATIONAL ANCHOR: Undaunted by danger, Shia Muslim pilgrims in Iraq observe their holiest religious holiday.
HALA GORANI, CNN INTERNATIONAL ANCHOR: The plot to buy weapons- grade uranium thwarted in a former Soviet republic. We're learning a bit more about it and we'll take you along as we retrace the smuggler's steps.

CLANCY: We have all seen pictures of historic Stonehenge, but now word that there's much more to the ancient village than meets the eye.

GORANI: And this bling is generating a lot of buzz. The mystery behind Camilla's very flamboyant necklace.

It is 8:00 p.m. in Baghdad, Iraq; 9:00 p.m. in Tbilisi, Georgia.

Hello and welcome to our report broadcast around the globe.

I'm Hala Gorani.

CLANCY: I'm Jim Clancy.

And from Baghdad, to Tbilisi, to Wiltshire, England, wherever you're watching, this is YOUR WORLD TODAY.

For the world's Shia Muslims, this is a day of devotion, a day of atonement, a time to mark a distant battle that has come to symbolize their sense of struggle against tyranny and injustice.

GORANI: Well, the faithful are marking Ashura, the holiest day on this Shiite calendar. Millions of Iraqis once banned from such commemorations are gathering for processions that some say also symbolize their newfound political power, at least for some of them. We'll get to that in a moment.

But first, as in years past, the culmination of Ashura in Iraq has been marred by violence. Assailants attacked Shia pilgrims in several cities, killing at least 38 people today.

Michael Holmes joins us from Baghdad with more on that, as well as the day's commemorations -- Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Hello to you, Hala.

Attacks focused on Shia pilgrims in the capital, also to the north of here in Diyala Province, killing dozens of people, wounding more than a hundred. They range from suicide bombers to roadside bombs, to drive-by shootings, also mortars. But at the same time, managed something rather unusual -- walking among the pilgrims in Kadhamiya, something that's been very difficult for Westerners to do for quite literally years.

(BEGIN VIDEOTAPE)

HOLMES (voice over): Up close at the religious ritual of Ashura in Baghdad's Kadhamiya district, men, young and old, beating their heads with swords and knives, sharing the pain of the grandson of the Prophet Mohammed, the Imam Hussein, killed in a battle 1,4000 years go.

"For Hussein, for Hussein!" the man yells at us.

To walk these streets is to feel the fervor of Shiites at the third most important shrine in Shia Islam. This was for us both a rare opportunity and a statement on security in Baghdad. It's been a long time since we have been able to walk freely like this on a Baghdad street. Just five U.S. soldiers with us and, more importantly, a respected local sheikh.

Usually video like this is shot by Iraqis, not Westerners. But this day we walked within maybe 400 meters, less than 250 feet of the revered shrine, in an area controlled by Shiite militiamen. Children approach us, adults look on, and the observance continues.

(on camera): There were some rockets and mortars fired earlier today, none of them landing here in Kadhamiya. No injuries. And the celebrations here have been going off largely without a hitch amid very tight security.

(voice over): An hour or so later, however, a mortar did land in this area, wounding nine pilgrims. But security efforts were considered successful here.

Multiple checkpoints keeping vehicles out. Even children patted down before proceeding. There was devotion, not tension on these streets. Huge vats of rice and meat cooked and handed out to hungry pilgrims who traveled from far and wide, mushrooming the local population from 100,000 to more than a million.

U.S. troops based here say walkabouts like this are the way forward where possible.

UNIDENTIFIED MALE: You've got to engage with the people. That's the only way you can find out what their issues are.

HOLMES (on camera): And yet a couple miles across the river, if you walk down the street like this?

UNIDENTIFIED MALE: You would use different techniques.

HOLMES (voice over): The respect afforded Sheikh Mohammed Baca (ph) certainly helped with our security this day. He's a man who speaks of moderation. favors dialogue with Sunnis, and says extremists on both sides are the problem. He also supports the U.S. presence.

"If the Americans weren't here," he says, "the Shia will win the war in four hours."

But for this day, in a place where religion rules and so often sparks violence, there is, mercifully, little of the latter and more of the former.

(END VIDEOTAPE)

HOLMES: Well, Kadhamiya is often the scene of sectarian strife, bodies dumped in the streets, mortar strikes, and the like. And as we pointed out, there was a mortar attack within an hour of us leaving. But for a short time, Hala, we were able to experience the area as it once was and as many people hope it will be again.

GORANI: And I was going to ask you, the reason you were able to walk down that street among the pilgrims and the Shia, was it solely because of the presence of the sheikh? Or has something else changed.

HOLMES: It largely was. And also, the U.S. lieutenant colonel we were with there has done a lot of this walking about. Not, it has to pointed out, on a holy day like this, where you would expect a little bit of resentment on the street, but he has done a lot of this walking around.

Having that sheikh there meant everything -- widely respected in the area. And it was quite a bizarre feeling, because, as you know, I have been coming here for years, and it's been a long time since we have been able to make a walk like that. And the day before we were across the river in Adamiya (ph), which is a Sunni area, and if you tried that in Adamiya (ph), you'd probably last about 10 minutes.

So it was quite an extraordinary experience -- Hala.

GORANI: All right. Michael Holmes, thanks for that report, live in Baghdad -- Jim.

CLANCY: Well, some of those massed displays that Michael was just showing us there by Iraq's Shia community show not only their religious fervor -- there's an important factor here -- it's their freedom. And it only came after the fall of Saddam Hussein. Arwa Damon gives us a better look at the day's events and how they represent the Shias' rise to power.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice over): The Shia ritual of Ashura, commemorating the death of Imam Hussein, the grandson of the Prophet Mohammed, Shias' defining moment. Saddam Hussein banned it for decades, fearing the power of the Shia people, the majority in Iraq, massing to mark an event seen by many as a symbol of the Shia struggle against tyranny, oppression and injustice.

But now this expression of mourning is not just a religious event. It is symbolic of the power Iraq's Shia community now commends. Power it never knew before. Power it now fully embraces.

UNIDENTIFIED MALE: I believe that there is a Shia revival, but it is very wise. It is not a crazy revival. America should not be afraid of Shiaism.

DAMON: What is of increasing concern to America and its allies in the Middle East is not necessarily Shiaism, but it's political power, risking turning Iraq into an Iranian-style theocracy.

UNIDENTIFIED FEMALE (through translator): Me as a Shiite woman, I believe that religion and politics cannot be separated. The politics and religion are mixed.

DAMON: Shia religious establishments can harness the fervor generated from emotional rituals like Ashura, turning it into a powerful political platform. The crowds controlled not by politicians, but by clerics.

UNIDENTIFIED MALE (through translator): I sincerely call on all honorable Iraqis to stop escalating the sectarian rhetoric.

DAMON: Abdul Aziz al-Hakim, one of most powerful men in Iraq, a religious cleric who heads Iraq's largest Shia bloc in parliament, preaching peace while forwarding his political agenda. In this case, calling for a central government with three autonomous regions for Shia, Sunni and Kurds.

Iraq's Sunni politicians are now in the minority and out of power, painfully aware they can never mobilize masses like this.

UNIDENTIFIED MALE (through translator): Some societies work to get some political advantages from the religious rituals.

DAMON (on camera): Shia leaders say that Shia power should not be feared, that Shiaism is the embodiment of Imam Hussein's struggle and revolution. But it is a religious struggle and revolution which may come to define Iraq's already faltering democracy.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

GORANI: Well, it's not just Shia Muslims in Iraq, but across the world marking Ashura as well. Huge crowds gathered in mostly Shia Iran, where president Mahmoud Ahmadinejad took part in the commemorations.

Tens of thousands of the faithful marked the day in the streets on the south sides of Beirut, as well. The Hezbollah stronghold still bearing the marks of last year's war with Israel.

And hundreds made homage in Bangladesh, where, as in most other places, the processions were peaceful. Of course, there was some self-flagellation there, as you can see -- Jim.

CLANCY: Well, let's change over now and take a look at what's going on and what the talk is in Israel this day.

The defense minister really raising the issue of putting up another barrier along a border. Now, this one would be a fence along its border with Egypt following the suicide bombing in Eilat. Is among the options Israel is considering now to prevent attacks by Palestinian militants.

Still, as Atika Shubert reports, Israel must be careful not to exacerbate an already tense situation.

(BEGIN VIDEOTAPE)

ATIKA SHUBERT, CNN CORRESPONDENT (voice over): Dramatic video taken just as the suicide bomber detonated his explosives from the closed-circuit camera of the shop next door. After nearly a year without a suicide attack, Israel is now under pressure to respond to this latest act of terror.

The defense minister, Amir Peretz, visited the site on Tuesday. "What happened in the city of Eilat is a severe incident," he said, "and we intend to implement initiated operations."

On Tuesday, Israel used air power to destroy a tunnel in Gaza. It could have been used to smuggle terrorists, Israel says. No one was injured, but it was the first aerial strike into Gaza since a cease-fire was called between Israel and Palestinian militants in November of last year.

At the Gaza home of the alleged suicide bomber, Mohammed Saksak (ph), family members mourned, but also praised what they called his martyrdom. Gathering crowds chanted, "Mohammed, be happy. You will go directly to heaven."

Militant groups declaring responsibility for the suicide attack in Eilat claimed it was aimed at uniting Palestinians. "We send a message to our Palestinian leadership, to our brothers in all factions and all military wings," this militant said. "We implemented this operation in order to direct our gun towards our main enemy, so as to declare that our main enemy is the Zionist occupation."

Gaza is only beginning to recover from its own violence. Days of fighting between Palestinian factions Fatah and Hamas has killed dozens, including two children.

Early Tuesday morning, Fatah and Hamas had called for a cease- fire. Just hours later, another Hamas official was assassinated.

(on camera): With Gaza already in turmoil and teetering on the brink of civil war, Israel is now under pressure to respond to this latest attack. But it's not clear if the sweeping response against militants in Gaza would have any effect or possibly make things worse.

Atika Shubert, CNN, Jerusalem.

(END VIDEOTAPE)

GORANI: Well, let's check some of the other news of the day.

(NEWSBREAK)

(COMMERCIAL BREAK)

CLANCY: Welcome back to CNN International and YOUR WORLD TODAY.

GORANI: Right. We bring CNN's international and U.S. viewers up to speed on the most important stories around the globe.

And today's a big day not just in the political world, but also in the tech world, Windows users. According to Microsoft, that's nine out every 10 computer users on the planet. With much fanfare, the company has officially launched the latest version of the operating system called Vista.

Microsoft chairman Bill Gates say it's designed to work faster, with more media, and more closely with the Internet than previous versions of Internet -- of Windows.

(BEGIN VIDEO CLIP)

BILL GATES, MICROSOFT CHAIRMAN: People are using Windows PCs actually more than they watch TV now. And they're doing a wide range of things -- photos, movies, communicating. And so in order to allow the hardware breakthroughs to show through and let people build new kinds of applications, a big release of Windows was needed.

(END VIDEO CLIP)

CLANCY: All right. Well, in that same interview, Bill Gates also said that all of us should upgrade right now to Vista.

It looks impressive but it's a really big step forward. It's an upgrade, yes, but it's a little bit more than that, and what you already own has a lot to do with it.

Now, here to help us to decide whether it's really worth our trouble, whether all of us should run out there and get it, this leading-edge technology, "PC Magazine's" lead analyst, Davis Janowski.

Thank you so much for being with us. OK...

DAVIS JANOWSKI, "PC MAGAZINE": Good afternoon. A pleasure.

CLANCY: ... when you look at this operating system, what do you think in terms of what it offers, really, for the users?

JANOWSKI: Well, for those of folks that are really on the cutting edge with their computing, it offers a great deal in the way of multimedia features. So, folks that are trying to watch TV with their computer, or do things with photos, or video editing, et cetera, they're going to really be wowed with it. So, for those, it's very exciting news.

CLANCY: OK. Take, for example, video editing. Right now on Windows XP I can do it with one gigabyte of ram. Am I going to be able to do that on a Vista computer?

JANOWSKI: Well, if you look at the minimum requirements -- it's not a good thing to look at minimum requirements -- you could do it, but we suggest that you buy as much in the way of ram as you can. Two gigabytes would probably be the minimum we'd suggest.

CLANCY: Yes. Four gigabytes would be more like it.

You're talking about hundreds of dollars to upgrade. Really, is it an upgrade path, or is this something where you wait until you get your next new computer and that's when you get Vista?

JANOWSKI: Really, only those folks that are really into technology and have really done upgrades in the past, they're going to want to tackle that if they have a machine that's more than, say, a year or two old. For everyone else, yes, definitely it's going to come with your next machine. And it may very well make people want to go out and make that next purchase all the more quickly.

CLANCY: How about the issues of digital copyright and other things that have a lot of users saying, I don't think I want to go this way, Bill Gates is taking way too much of control not only of his computer operating system, my computer, my music collection, so much more?

JANOWSKI: Well, that's a big argument out there. You'll find similar arguments with Apple computers as well. Those issues aren't going to go away. And, in fact, you're going to find the various content providers becoming even more stringent.

So, you're going to be restricted, really, no matter what you do. Yes, you can could hold on to XP for now. But its support path is going to be limited. And really, as long as Microsoft still has 90 percent market share, or even if it's a little less than that, they're going to be calling the shots.

So, it's really up to you. If you want the cutting-edge technology, you're going to have to buy Vista. Otherwise you can stay where you are.

CLANCY: All right.

Davis Janowski of "PC Magazine," I want to thank you very much for being with us, telling it straight. You know, if you want cutting-edge, you can go Vista now. Otherwise, wait until you get a new machine.

JANOWSKI: There you go. My pleasure.

CLANCY: My pleasure.

GORANI: Business news is just ahead.

CLANCY: And then a little bit later, is any brand name safe in China. From expensive chocolates to high-value scarves, copies flooding the market. GORANI: China's counterfeit culture and how some companies are trying to fight back, that's coming up.

(COMMERCIAL BREAK)

(NEWSBREAK)

CLANCY: U.S. President George W. Bush can not run for another term in office, of course. But he will play a role in the presidential campaigns as either a target or an ally? That means his approval ratings still matter.

Senior political analyst Bill Schneider crunches the latest poll numbers for us.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): The latest batch of polls is in, and the news is not good for President Bush. Five polls taken in mid-January show the president's job approval rating at very low levels.

The CBS News figure, 28 percent, is the lowest figure ever for this president. Our poll of polls gives us an average of 32 percent approval, 63 percent disapproval. Nearly 2 to 1 negative.

So what, you might ask. Bush can't run again. A job rating is a measure of the president's clout. This president has a lot of things he wants to get done in his last two years besides Iraq. Health care, for instance.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We proposed a bold initiative.

SCHNEIDER: Congress is not likely to follow a deeply unpopular president. The public sees this president as a lame duck. Seventy- one percent do not think he will have the support he needs to get things done.

Members of the president's own party are distancing themselves, particularly on his troop build-up in Iraq.

SEN. JOHN WARNER (R), VIRGINIA: I'm very concerned about the American G.I. being thrust in the middle in the violence that really has root causes that go back a thousand years.

SCHNEIDER: Only four presidents since World War II have seen their job ratings drop below 30 percent. Harry Truman chose not to run for reelection in 1952. Richard Nixon was forced to resign. Jimmy Carter was fired after one term. So was Bush's father in 1992.

When you're this low, the voters consider your presidency over. Is that the way they feel about President Bush? Apparently. Fifty- eight percent in the "Newsweek" poll said they personally wished George W. Bush's presidency were over.

Bill Schneider, CNN, Washington

(END VIDEOTAPE)

GORANI: Well, Democrats in the U.S. Congress are looking at ways to flex their new political muscle when it comes to the war in Iraq. The Senate Judiciary Committee held a hearing on legislative war powers and what constitutional options Congress might have to force an end to the conflict. Lawmakers heard from a lineup of legal scholars.

CLANCY: Now the Senate also set to start debating a nonbinding resolution on Iraq, that would declare that the U.S. president's proposals to send in more U.S. troops is not in the national interests. But what would such a resolution really accomplish?

Bob Franken gives us a closer look?

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRES. OF THE UNITED STATES: I'm the decisionmaker. I had to come up with a way forward that precluded disaster.

BOB FRANKEN, CNN NATL. CORRESPONDENT (voice-over) The president makes it clear he's the commander in chief. The Constitution says he gets to decide how he uses the troops in his command. But the Constitution also gives Congress the power of the perk purse. However, there is no serious plan to cut off funding for the additional troops. So why bother with nonbinding resolutions?

SEN. RICHARD LUGAR (R), INDIANA: They are ways in which members of Congress get on record, indicate that they hear that the public doesn't like the war, doesn't like the way it's going, doesn't like the president.

FRANKEN: So what? The Democrats won control in Congress in great part because of opposition to the war.

JONATHAN TURLEY, GEORGE WASHINGTON UNIV.: What they can do is stop the war. They can simply pull the funding.

FRANKEN: So is a nonbinding resolution merely taunting from the safety of the sidelines, instead of really mix it up by debating whether to cut off funding and risk being held accountable.

TURLEY: They're many in Congress that want to be certain that when this war fails, they don't own a single part of it, and they can do that by continually appropriating money and allowing the war to go on.

FRANKEN: New Democratic congressional leaders say cutting off funding would further endanger troops already sent to Iraq, if they were to take that huge step. And they're being sung by claims from the president and his supporters that nonbinding, though it may be, Congressional action still has a powerful effect.

ROBERT GATES, DEFENSE SECY.: It's pretty clear that a resolution certainly emboldens the enemy and our adversaries.

FRANKEN: But Democrats say it's president policies that have emboldened the enemy.

SEN. JOSEPH BIDEN (D), DELAWARE: It's about time the president understands, virtually no one, no one agrees with the way he's conducting this war.

FRANKEN (on camera): Supporters of the nonbinding resolution say they could be a signal that there could be more important defining legislation later. In other words, later no more Mr. Nice Guy.

Bob Franken, CNN, Washington.

(END VIDEOTAPE)

GORANI: Well, we are learning more about the possible smuggling of nuclear material into the former Soviet Republic of Georgia.

CLANCY: This is a story that's really captured the attention of a lot of people, and concerned them, too. A Russian man jailed last year trying to sell highly enriched uranium to Georgian secret agents.

GORANI: Now Ryan Chilcote talked to the Georgian agent in charge of the sting operation.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): This is the moment agents in the former Soviet Republic of Georgia thwarted a nuclear sale. Oleg Khintsagov, a Russian, arrested on charges that he and three others were trying to sale weapons-grade uranium.

Investigator Archel Pablid Viscelli (ph) was in charge of the sting. We agreed not to show his face to keep from blowing his cove.

UNIDENTIFIED MALE: I wanted to find some Muslim buyers.

CHILCOTE (on camera): Muslim buyers?

UNIDENTIFIED MALE: Yes, because it was a common rumor that Muslims are ready to buy any type of radioactive materials.

CHILCOTE (voice-over): He agreed to drive us around, retracing the smugglers' steps.

Winter Khintsagov and his Georgian associates put word out on the streets they have up to three kilograms of uranium for sale. An undercover Georgian agent impersonates a wealthy Turkish buyer representing a, quote, serious Middle Eastern organization.

After 12 months of contact, the smugglers agree to provide a sample.

UNIDENTIFIED MALE: This will be nearly 100 gram, and we need to either 700,000 euros, or $1 million. CHILCOTE: The uncover agent agrees to meet the smugglers here in Georgia capital, but the deal breaks down.

UNIDENTIFIED MALE: They said, gentlemen, money first, and then, you know, maybe in 15 or 20 minutes we'll give you the materials. Of course our buyer said, gentlemen, you're playing dangerous games with us -- no materials, no money. Goodbye.

CHILCOTE (on camera): The deal was off?

UNIDENTIFIED MALE: Yes.

CHILCOTE (voice-over): As the smugglers vanished, though, one used a cell phone to tell his friend where they were staying. The police were listening.

(on camera): Three hours later, Georgia police tracked them to this the apartment building which they then raided using Georgian special forces fearful the men would try to flush the uranium down the toilet.

(voice-over): Khintsagov still had the weapons-grade uranium in his coat pocket. Khintsagov is serving eight years in a Georgia jail. Little is known about his background or the origin of the uranium.

In an interview with Georgian officials, the Russian smuggler says he was a food trader.

"I moved grain and flower," Khintsagov says, "anything that came my way to feed my family."

But a document Georgian officials say is a confidential communique from Russia's Secret Service says it's checking into reports the uranium may have come from Russia.

Russian authorities would not comment on the document, but say they are considering launching a criminal investigation into the theft of highly enriched uranium from its nuclear sites.

Khintsagov didn't have enough uranium to make a bomb. But still it's the largest case of nuclear smuggling in years. And officials say it is a matter of serious concern.

UNIDENTIFIED FEMALE: Maybe somebody else also had a couple of kilograms. I think then altogether it is quite alarming.

CHILCOTE: Authorities thought they'd all but closed down the illegal trade in the radioactive materials in the former Soviet Union; now many wonder if it's just been slipping by undetected.

Ryan Chilcote, CNN, Tbilisi, Georgia.

(END VIDEOTAPE)

CLANCY: Well, Hala, we don't know who built Stonehenge or why. But at least now, we know where they live. When we come back, new clues to one of history's greatest mysteries.

(COMMERCIAL BREAK)

(NEWSBREAK)

(JOINED IN PROGRESS)

HANCOCKS: ... going down to the river Avon (ph), the river here, of the Stonehenge itself. And that is what links the two. But we also heard from Mr. Pearson, saying that there are very interesting similarities between the two.

(BEGIN VIDEO CLIP)

MARK PARKER PEARSON, BRITISH ARCHAEOLOGIST: What we think is going on is they're living around that timber one with all their houses, but here what we find are the remains of the dead. So we think that the stone represents the dead, the ancestors, whereas the timber has more to do with the daily life and the world of the living.

(END VIDEO CLIP)

HANCOCKS: Amazingly they were also able to deduct what kind of houses these villagers actually lived in, 4,600 years ago. They say that obviously the timber itself that the houses were built out of and the furniture was built out of has decayed, but they believe that they were small houses, and they had a box of (INAUDIBLE) against one of the walls on the clay floor, and also they may even have some kind of wardrobe, or box, which is amazing when you think how long ago that was -- Jim.

CLANCY: You know all of these,they had a common hearth, didn't they? Where they more or less a community was built around. They were all these houses around it, and then they shared a fireplace?

HANCOCKS: That's right. Yes, there was a couple of communal areas they believe that they found, areas, for example, where there was more rubbish that they found over the (INAUDIBLE), over the centuries. Obviously more rubbish from feast that they have had, bones from animals, but not bone from human beings. Because what they used to do, archaeologists believe in those days, was they would go to edge of the cliff at this particular village and throw the remains of their loved ones who had died over the cliff into the river, because they believe that would then wash them downstream toward the afterlife (ph), and of course that would wash them downstream past Stonehenge, as well.

Now this is the burial site, or at least the cremation site, for those who were of a higher class, if you like, in society. There were less people who were actually cremated at Stonehenge itself -- Jim.

CLANCY: Paula Hancocks, the story is more than 5,000 years old, but it's fascinating as ever. Can't thank you enough for being with us. Too bad they didn't leave us some more notes. We still don't really know who they were.

Hala, back to you.

GORANI: Well, Jim, we're getting some news just in now. Tony Blair's chief fund-raiser arrested and then released on bail in the so-called "Cash for Honors" scandal. Now this is Lord Levy. What you see there is the House of Commons and Tony Blair. Lord Levy, 61, a close friend of Tony Blair, the U.K. prime minister, also his Middle East envoy arrested in connection with this scandal.

Now police are investigating whether honors were handed out as reward for financial help to any of main three parties in the United Kingdom. So just to repeat there, Lord Levy, the 61-year-old close friend of Tony Blair, and this is actually his second arrest. So we should say re-arrested and released on bail on this day. We'll have a lot more on this story and the potential impact on the British prime minister of course throughout the upcoming hours and days.

Do stay with us. You're with YOUR WORLD TODAY.

(COMMERCIAL BREAK)

GORANI: The latest James Bond movie is being shown in over 1,000 cinemas across China. Well, it's making it the biggest release ever for a foreign film there, Jim.

CLANCY: But you know, in China, people are seeing double of the man known as 007 as ITV's John Ray explains.

(BEGIN VIDEOTAPE)

JOHN RAY, ITV NEWS CORRESPONDENT (voice-over): The super spy has finally conquered the communists. The first 007 to get a license to thrill the Chinese. Yes, Bond has beat the censors, but he hasn't beaten the system of copyrights and pirates who have already made a killing.

(on camera): You might have a chance to be in a DVD shop and see that it's been on sale here for weeks.

DANIEL CRAIG, ACTOR: I know, well I said, that's a shame, but that's the way it is. We're hoping to change that a little.

(CROSSTALK)

RAY: Do you think it's going to hurt the box office?

CRAIG: Of course it is, it already has. I mean, that's the reality of it. It's a shame. The fact is that that will be a bad copy, or sound bad, look bad. And in fact, going to see it at the cinema is a much better experience.

RAY (voice-over): Through a secret door in a Beijing shop, our hidden camera caught just a glimpse of a vast black market in cut- price copies.

(on camera): OK, so here we have the new Bond DVD. In fact, we have the whole Bond series here. And this is just the tip of iceberg when it comes to China's counterfeit culture.

(voice-over): Sometimes it feels like everyone's faking it. Polo shirts, Burberry scarves, no Western brand is safe though some are fighting back. This Chinese chocolate maker is being sued by its more famous rival. Ferrero Rocher complained the product is too close a coincidence.

(on camera): Ferrero Rocher say that your product is just a copy of their products, that the customer will become confused and can't tell the difference.

UNIDENTIFIED MALE: No, this is the way -- the customer, Chinese name. These are products made in China. It's no, this is just an English name, this is a Chinese name. Big difference.

RAY (voice-over): The authorities are trying to crack down here. Police raid an illicit factory faking a Britain brand car wax. The counterfeit economy is worth a staggering $9 billion pounds. But the dummies to China's reputation is costliest still.

UNIDENTIFIED MALE: Everything can be copied and copied very well: pharmaceuticals, aircraft parts, semiconductors, automobile parts and so forth. Then you get into a real health and safety issue, public health and safety issue.

RAY: For Bond, it's hardly a matter of life and death. But in China's fakers and forgers, even he has met his match. John Ray, ITV News, Beijing.

(END VIDEOTAPE)

CLANCY: That's our report for this day.

GORANI: And just to update our viewers though on the developing story on Lord Levy, Tony Blair's chief fundraiser, who has been arrested and an inquiry is being -- has been launched really for some time into the so-called cash for honors scandal.

Police investigating whether honors were given as a reward for financial help to any of the main three parties. Now, this is Lord Levy, the 61-year-old close friend of the prime minister, Tony Blair. Also his Middle East envoy who is being -- who was arrested this day and released on bail, pending an inquiry into this scandal that has rocked really some circles in British politics. We'll keep following this for you on CNN. But for now?

CLANCY: That really leaves Tony Blair in a rough situation. His final days really, final months as prime minister going down in the very sleaze scandals that he said he wouldn't repeat and clarify. Well that has to be it for our report this hour. I'm Jim Clancy.

GORANI: I'm Hala Gorani. Stay with CNN. The news continues.

(COMMERCIAL BREAK)

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