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Weekend of Violence and Bloodshed in Iraq; Four Men Stand Convicted in Failed London Terror Attacks; Pressure Mounting in U.S. for Troop Withdrawal From Iraq; Senators, White House, Generals All Debate Effectiveness Of Troops Surge Over Sectarian Violence In Iraq; Brit Tell-All Book Reveals Inner Workings At Blair's 10 Downing Street; Palestinian Cave Dwellers Refuse To Leave Traditions Behind, As Israelis Build Modern Settlements Nearby.

Aired July 09, 2007 - 12:00   ET

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

HALA GORANI, CNN INTERNATIONAL ANCHOR: Eroding support. More Republicans abandon a White House plan for Iraq as Iraq's prime minister faces pressure at home.
JIM CLANCY, CNN INTERNATIONAL ANCHOR: Guilty of conspiracy to murder. Four men are convicted in a failed plot to detonate bombs in London.

GORANI: And reunited with her family. Kidnappers release a 3- year-old held for ransom in Nigeria.

It is 5:00 p.m. in Port Harcourt, Nigeria, 8:00 p.m. here in Baghdad.

Welcome to our viewers around the globe.

I'm Hala Gorani.

CLANCY: I'm Jim Clancy.

From Washington to London, Tokyo to Toronto, wherever you are watching, this is YOUR WORLD TODAY.

As the level of violence soars in Iraq, more U.S. lawmakers breaking ranks with President Bush over the war, leaving some to wonder if Mr. Bush may finally be ready to talk troop withdrawal.

Iraqi lawmakers, meanwhile, struggling with their own growing political chaos as Sunni militants in Iraq are warning Iran, don't interfere.

Now, we've got correspondents covering all of the angles, from Ed Henry at the White House, to Baghdad and our own Hala Gorani.

Well, let's begin with you, Hala, in Baghdad.

GORANI: Well, Jim, it was a weekend of horrific violence and bloodshed, even by the standards of a war zone here in Iraq.

Iraqis are being told now they have to protect themselves by some officials after two days of attacks that have left more than 220 civilians dead. But the violence far from over. Twelve more people have been killed so far today, and Iraqi officials say it could still get much, much worse, while they fear a quick U.S. troop withdrawal could send the crashing into a full-on civil war.

We'll talk about that in a moment with a high-level Iraqi official.

But for now, back to you, Jim.

CLANCY: All right, Hala. Thank you for that.

And we're looking forward to having Hala back with us live from Baghdad. But we're going to go first to Britain.

It was a crime that became known simply as 7-21, a series of failed terror attacks on a London transportation system on July 21st of 2005. Now four men stand convicted.

International Security Correspondent Paula Newton joining us now live from Scotland Yard. She's got more details for us -- Paula.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT (voice over): July 21, 2005, just two weeks after London commuters faced the suicide bombers of July 7th. The city was still on edge, but on the mend, too, until that morning, and it all unfolded again, this time caught on tape. A brand of YouTube terror rattling even the most resilient of commuters.

Again, the bombers targeted underground trains and a bus. And during this trial, jurors saw so much of the evidence on tape.

A man with a backpack boards the train, and then the moment of impact. What prosecutors said was supposed to be the moment commuters were blown apart. But there was a saving grace. The bomb failed to detonate minutes later on the number 26 bus.

The moment of detonation up in smoke. Only the sound of a loud pop rang through the bus.

MARK MAYBANKS, DRIVER OF TARGETED BUS: The next point there, where I fully expected to see the top of the bus missing, I really felt it had gone, because it was that loud.

NEWTON: Bus driver Mark Maybanks rushed up the stairs just as the would-be suicide bomber ran off the bus, still wondering what went wrong. As Maybanks checked the seats, there it was, an oozing mass still smoking.

MAYBANKS: I remember thinking to myself, that's a bomb, I need to get off this bus quickly. That's definitely a bomb.

NEWTON: It was the crudest of bombs carefully concocted from a mix of hydrogen peroxide and flour. By this time, though, the bombers were on the run. Again, it was caught on tape. After an intensive manhunt, more dramatic video evidence.

After an intense standoff with police at a housing complex, surrender. The would-be bombers in custody, their bomb-making hideout laid bare. Police showed evidence of a stovetop bomb-making scheme, peroxide boiled down to lethal amounts, step-by-step instructions, even a schedule.

As their main defense, the suspects told the jury this was just a warning, an act of defiance and protest about how the West was treating Muslims in Iraq and elsewhere. But the prosecution countered with expert testimony that riveted the jury. Police reconstructed the crude bombs and showed the damage they could do.

Experts in explosives backed that up, saying the peroxide and flour mix was very close to working, the substance already dangerous. The suspects must have thought they would detonate.

UNIDENTIFIED MALE: Their intent was clearly to do significant damage. If all you wanted to do is to create panic, then what you do is you carry a sack and then you have a small number of firecrackers in the back.

NEWTON: Again, the proof seemed to be on tape, as an off-duty firefighter takes on one of the would-be bombers, asking him, "What have you done?" But he's screaming to himself, "This is wrong! This is wrong!"

A chilling exchange for any London commuter that day.

MAYBANKS: But I don't think people would realize how close they had come that day to actually being killed. And it's a point that the guy got on the bus to murder people, indiscriminately murder people. And that plays on your mind.

NEWTON: The fact is, the bombs didn't work, and only as this trial unfolded, literally frame by frame, has it become clear that this was a narrow escape for hundreds that day.

(END VIDEOTAPE)

CLANCY: All right. That was Paula Newton reporting there from London.

Let's get back now to Iraq via Washington.

As the death toll rises, support for the war appears to be plummeting in Washington as some lawmakers who are up for reelection begin to take seriously and gauge constantly public opinion and its attitudes about the war in Iraq. The Bush administration, some wonder, can it afford to keep fighting the growing pressure to bring U.S. troops home, or at least set a timetable?

Let's get the latest. Let's go to the White House live and Ed Henry.

Ed, as I understand it, today there was a discussion under way, there had been reports over the weekend that the president and his top advisers were considering outflanking the Democrats, perhaps announcing their own timetable, a tentative timetable.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, yes, Jim. Not necessarily a timetable, but there was a "New York Times" report this morning that set off a lot of buzz here at the White House, claiming there is a high-level debate going on behind closed doors, where senior White House aides are thinking that maybe the president can come out and at least talk about withdrawing troops over time, not have necessarily a specific time frame in the short term, because you know the president over and over has said he wouldn't do that, but try to get ahead of the Democratic debate playing out in the U.S. Senate and try to stem these Republican defections.

Very senior Republican senators in recent days telling this president he can no longer wait until September for this progress report from his commander on the ground, that he has to change course now. White House spokesman Tony Snow told reporters it's absolutely not true. This "New York Times" report he said got ahead of the facts, and then he went a step further by saying there is "no debate right now on withdrawing forces from Iraq."

Well, I pressed Tony Snow on that point, "Why isn't there a debate going on right now?" When you think about it, with all of these senior Republicans in the president's own party, you would think they would at least be discussing a possibility of withdrawals. Tony Snow insisting otherwise.

But the fact of the matter is that with this growing number of Republicans now telling the president he has to change course, it is a lot more than what it was before when it was just Democrats. Now you have senior Republicans telling the president it's time for change -- Jim.

CLANCY: Well, all along, Ed, you know, we have heard from Republicans that the Iraqi military, the Iraqi government was going to be taking over now. And the president has to send a report up to Capitol Hill this week, at some point by the end of the week, by Sunday, and he's got to say, are they meeting the benchmarks?

Well, are they meeting the benchmarks? And what if this government just outright collapses?

HENRY: Well, you're right, it's clear that the Iraqi government is not meeting these benchmarks, at least most of them. The president does have to send a report by Sunday to Congress about how many of the benchmarks they're meeting. That's going to obviously be a problem since they're not meeting most of them.

And secondly, you put your finger on the other major problem brewing in Baghdad right now. The fact of the matter is that President Bush has put a lot of political capital in Iraqi Prime Minister Nuri al-Maliki.

He went to Baghdad to see him, he met with him in Jordan. He's embraced him literally and figuratively. And now this talk of a no- confidence vote in the Iraqi parliament.

As you know, the Iraqi national security advisor yesterday told CNN that if Maliki's government falls, there is going to be a political hurricane in Iraq. The problem for this president is that he has no plan B if Maliki were to fall. He's put all of his eggs in the Maliki basket.

If that were to fall, there -- it's unclear who would fill the vacuum, number one. And number two, anyone who would replace Maliki would need time in order to get their sea legs. It's time this White House clearly no longer has because of the impatience among Republicans -- Jim.

CLANCY: All right. Ed Henry painting the picture for us of the political situation for the White House and up on Capitol Hill.

Ed, thank you for that.

HENRY: Thank you.

CLANCY: Not all Iraqis though want U.S. forces out of the country. Iraq's foreign minister has issued warnings about the troops withdrawal and what that will all mean.

Hala Gorani joining us now live from Baghdad with more on the whole picture. And that's what it takes, a whole picture here, to understand what is going on between Iraq and Washington today -- Hala.

GORANI: You mentioned Hoshyar Zebari, Jim, and what he said. One of the things he said is that a hasty withdrawal of U.S. troops from Iraq would lead to a situation of security chaos, but also potentially to the collapse of the government. And speaking of politics -- and you touched upon it there with Ed Henry at the White House, this is a very crucial and difficult time for the government of Nuri al-Maliki. He is weakened and he is isolated, as well.

Now, I spoke with several high-level officials, both close to the government of Nuri al-Maliki and the prime minister himself, and those who perhaps oppose him and don't always see eye to eye with him and agree with his methods.

Take a look.

(BEGIN VIDEOTAPE)

GORANI (voice over): Will the government of Nuri al-Maliki survive the summer? And with it, any hopes for the passage of crucial laws America wants to present as benchmarks of political progress in Iraq?

The Shiite prime minister is weakened and isolated. Two important political blocs, the Sunnis and those loyal to radical Shiite cleric Muqtada al-Sadr, are boycotting cabinet meetings and parliamentary sessions. Despite the visible cracks in Nuri al- Maliki's government, his spokesperson says all is on track. ALI ALDABBAGH, SPOKESMAN FOR IRAQI PRIME MINISTER: We are quite sure we will do it, and, I mean, boycotting or not attending the cabinet won't stop the train to move. The train will move, but you may slow it.

GORANI: But say that to the country's Sunni vice president and the political battles within the government become apparent.

TARIQ AL-HASHIMI, IRAQI VICE PRESIDENT: I have been marginalized heavily, severely, in fact. It is not only myself, my colleague, my two colleagues in the presidency counsel, the president, as well as the vice president. This (INAUDIBLE) marginalized, in fact, and it is hardly saying that we were over the past year -- we were a partner and this is (INAUDIBLE).

GORANI: Contradicting weekend reports, al-Hashimi says there are no plans from his bloc to introduce a motion of no confidence against the prime minister, but he adds that if doesn't get guarantees that his party will be included in executive decisions, he will not hesitate to leave.

And the crisis extends to Maliki's former allies, officials from the party of Muqtada al-Sadr. They tell CNN the prime minister has turned against them and that his government is doomed to fall.

Meantime, even though the draft of a defining law on the sharing of oil revenues was approved by the cabinet, it was done without the presence of the Sunnis and the Sadrists, so laws could pass, but they will not be viewed as legitimate.

(END VIDEOTAPE)

GORANI: And it is really crunch time for Nuri al-Maliki. He is expected to majorly reshuffle his government.

As for the United States, the bloody weekend that we just witnessed, as well as a government teetering on the brink, may be ominous warnings that there will be no quick-fix solutions in Iraq -- Jim.

CLANCY: But Hala, briefly, is the government going to survive or not?

GORANI: You know, it's interesting, because when you ask even the opponents of Nuri al-Maliki whether they would like to see him go, they answer, look, not right away. The door is still open for negotiation.

In other words, there is still bargaining going on behind the scenes, clearly, because we've heard it both from Sadr loyalists, as well as high-level Sunni politicians. Which doesn't mean that if in a few weeks or a few months' time results are not achieved and there is no satisfaction on the side of those Sunni politicians and perhaps those loyal to Muqtada al-Sadr, that does not mean that then you will perhaps see a more concerted and aggressive effort to weaken him and even take him down -- Jim. CLANCY: Why is this man losing so much confidence in Iraq?

GORANI: As far as the government is concerned, and those high- level officials we've spoken to, they accuse him -- and you heard there Tariq al-Hashimi say it as well -- they accuse him of not listening to them, of being more concerned with protecting the interests, perhaps, of his own party and his own sect, rather than the interests of the Iraqi people as a whole. These are his critics.

Those who support him, of course, will say that is a false accusation, that these laws that are being discussed and passed by the cabinet are open for everyone to -- are in fact open for discussion for everyone. So that is perhaps why he's finding himself a little bit more isolated within his own government -- Jim.

CLANCY: All right.

Hala Gorani, complicated story. Thank you for helping us understand a little more of the bottom line here of what's going on in Iraq this day.

Hala will be back with us a little bit later in YOUR WORLD TODAY.

Still ahead, a happy ending for the family of a young British girl in southern Nigeria after a harrowing ordeal. Margaret Hill back home. Her story coming up next.

And then, soaring temperatures. First it was the U.S. West, now some Eastern states heating up, as well. We're going to examine the impact on the nation's power grid.

You're with YOUR WORLD TODAY.

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CLANCY: Hello, everyone. And welcome back to CNN International and YOUR WORLD TODAY.

We're covering the news that the world wants to know, sometimes needs to know, and give you a little perspective that goes deeper into the stories of the day that we're covering.

Well, their nightmare is over. Three-year-old British national Margaret Hill back with her family after being held for four days by unknown gunmen. She was snatched from the family's car last week in Nigeria's restive Niger Delta. Now, that is the oil-rich region where kidnappings for either political or criminal motives are rather common now, unfortunately.

Isha Sesay is in Johannesburg with more details -- Isha.

ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT: Jim, yes, thankfully, a happy reunion to a tumultuous episode involving one little British girl captured in Nigeria's restive Niger Delta.

(BEGIN VIDEOTAPE) SESAY (voice over): Unharmed and reunited with her anxious parents after four days in captivity, 3-year-old Margaret Hill is back home playing happily following her release on Sunday evening. According to her parents, aside from being hungry and covered head to toe in mosquito bites, the little girl is in good health.

The family made a visit to a local hospital in Port Harcourt following the child's release. Her parents are grateful their ordeal is over.

UNIDENTIFIED MALE: People of Nigeria, especially in the Niger Delta, who cooperated very well with the security services, who have actually done an excellent job, I want to thank them very much for getting Margaret free without too much damage, and she's not really hurt.

SESAY: And back in Britain, news of Margaret's release was also greeted with joy and relief.

UNIDENTIFIED FEMALE: We're just absolutely delighted, and I phoned all the family to let them all know, and they were all thrilled.

SESAY: Gunmen seized Margaret last Thursday as she was being driven to school, smashing the car's window and grabbing the toddler. According to the girl's Nigerian-born mother, Aluci (ph), Margaret's captors initially demanded her British father, Mike (ph), swap places with his daughter.

Police authorities advised against this. Then the kidnappers threatened to kill the 3-year-old if a ransom was not paid. Few details have emerged about the circumstances surrounding Margaret's release, but the Nigerian authorities insist no money was handed over.

It's still unclear who abducted the girl, with suspicions falling on a criminal gang. The Niger Delta is racked by violence, with militant groups frequently kidnapping foreign oil workers as they demand greater autonomy for the region and a share in its oil revenues.

At least 200 foreigners have been abducted in the last 18 months. Most have been released. The biggest such group, the Movement for the Emancipation of the Niger Delta, disowned Margaret's kidnapping and vowed to find the perpetrators.

Margaret is the third child to be snatched in recent weeks. The other two, both Nigerian children, were released unharmed after ransoms were paid.

Unlike those kidnappings, Margaret Hill's case attracted huge media attention around the world. President Umaru Musa Yar'adua appealed for her release. The eyes of the world were on the Nigerian authorities, watching closely how this episode unfolded. That global attention may have helped with Margaret's release, but for her parents, all that matters is that their little girl is safe and back home. (END VIDEOTAPE)

SESAY: And with the abduction of Margaret Hill and two other children in recent weeks, that is the question, are we about to see more of this kind of thing taking place in Nigeria's tumultuous oil- rich region ?

Jim.

CLANCY: Isha, you know, one of the leading political groups there opposed to the government, demanding more rights for the people of the region because of all the oil wealth that comes out of there, they the release, they said they had nothing to do with this.

Indications now this was a criminal case?

SESAY: Indeed, Jim, that is indeed the feeling there on the ground in Nigeria. And even the British Foreign Office last week was quoted as saying they suspected a criminal gang was indeed involved.

Gangs of this sort have been operating in the area for some time now, taking captives and demanding hefty ransoms with the knowledge that state governments and the multinational oil companies, it's believed, have slush funds from which they pay out these large sums. So in this case, there is no sign that this was an abduction with political overtones, for political reasons. There is a sense that this was purely for money -- Jim.

CLANCY: All right.

Isha Sesay reporting there live from Johannesburg on the case of the little girl back safe with her family.

You're watching YOUR WORLD TODAY.

Coming up, the heat is on in the United States. What kind of strain will a prolonged heat wave put on the nation's power grid?

We're going to take a closer look at that.

Plus, Boeing hopes its latest jet plane will be a dream come true, both for passengers and the company's future.

Stay with us.

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(NEWSBREAK)

CLANCY: Hello, everyone, and welcome back. To all of our viewers joining us from more than 200 countries and territories around the globe, including right here in the United States, this is YOUR WORLD TODAY. I'm Jim Clancy. Hala Gorani is joining us from Baghdad, but first, let's look at some of the top stories we're following.

Four men have been found guilty of plotting to bomb London's public transit system on July 21st, 2005. Those failed attacks came two weeks after the deadly 7/7 suicide bombings that killed 52 people. Police say that if the second series of attacks had succeeded they would have caused similar carnage.

A three-year-old British girl back with her family now after being held by unknown gunmen for four days in Nigeria. Margaret Hill was kidnapped last week from the family's car while she was being driven to school. Her abductors demanded ransom, but her father says no money was paid. Margaret was released unharmed.

Calls for a troop pullout from Iraq growing louder in the U.S. among lawmakers, but in Iraq, many officials say that would be a disaster. Iraq's foreign minister warning an early U.S. troop withdrawal could plunge Iraq into all-out civil war. Hoshyar (ph) Zebari says such a move could trigger the country's complete collapse.

GORANI: Well, Jim, the conflict is facing some key benchmarks in the coming weeks and months. The Bush war policy takes center stage on the floor of the U.S. Senate, of course, this week, as lawmakers begin a contentious debate on a major defense spending bill; the list of Republicans calling for a change in Iraq continuing to grow, as well.

Back in May, the U.S. Congress demanded the Iraqi government show progress on specific benchmarks. An interim report is due on July 15th, so really just a few days away. A more specific report by the top U.S. commander in Iraq is set for mid to late September, but the "New York Times" is reporting that there's been an internal debate inside the White House itself about whether the president should announce a troop pullback sooner rather than later.

Well, joining us now for more on all the developments in Iraq and Iran's influence inside this country is our own Michael Ware here in Baghdad.

So Michael, let's first start with these reports that the Iraqi Shiite Cleric Muqtada al Sadr may be in Iran right now. Is that even significant?

MICHAEL WARE, CNN INT'L. CORRESPONDENT: Well, certainly our sources within the Mehdi Army had indeed warned us that Muqtada al Sadr would be going to Iran. Now, they were citing the reason for that was concern within the senior ranks of his organization at the arrest of a man called Klaus Gazali (ph).

Now he was detained by U.S. forces in connection to the attempted kidnap of five U.S. soldiers and he's been talking. And we're told that that's what Muqtada's worried about. Now in Iran, we saw him go there earlier this year. He was able to maintain control, by remote. So the fact that he's not present really dilute his influence, but it does show that, obviously, he's under some kind of pressure.

GORANI: Now, let's talk about the Islamic State of Iraq, this self-proclaimed group here in Iraq, giving Shiite forces two months to stop attacks against their fighters or else. What does this mean? WARE: Well, what they're saying is they're warning Iran specifically. They're saying, we're giving you two months to stop supporting the Shia government and to stop attacking the Islamic State of Iraq. Now, the Islamic State of Iraq is Al Qaeda in Iraq. Now, unlike the old-school Al Qaeda by Osama bin Laden, this is the progeny of the late leader of Al Qaeda of Abu Musab al Zarqawi. Now, he made it very clear, his grand design from day one was to go and pick a war with the Shia.

Now, that means Iran as well. He believed that only by doing that will the great Sunni nation stand up and awake and strike back. So this is not new. This is an evolution of their thinking, their strategy.

GORANI: What would be the reaction on the other side, any worry at all?

WARE: I would imagine it would be hard for Iran to actually be worried about a threat from the Islamic State of Iraq. I mean, their attacks continue every day already. They're striking directly at these Iranian-backed government Shia in Iraq, and they're attacking Shia civilians day by day. They're unable to launch an offensive against Iran itself, so the war will remain here where it has from the beginning.

GORANI: What do you make of the Sunni vice president's statement that ordinary citizens in Iraq should just arm themselves of the security vacuum? What does that mean? How should we read it?

WARE: Well, we already know that every household in this country is allowed to have one AK-47 assault rifle. So they're already armed. We already know that in neighborhoods, men have to take to the streets every night to protect their block against death squads, against Al Qaeda, against Sunni insurgents. And even against the American raids. So the concept isn't new.

And indeed, we've seen America adopt it, they have coalesced the Baathist insurgency, contracting out, essentially, the fight against Al Qaeda in parts of the country because Baathists know what Al Qaeda is and America doesn't. They don't have the rules of war that America does. They can just walk in and kill these men, so that's what Tarik al Hashami (ph) is referring to.

GORANI: But when you look at the global picture and look at other countries that have gone through the same thing, where ordinary citizens group together and arm themselves to protect their own group, does that mean a militia war?

WAR: Absolutely. We already have one now. Why do we have to wait for the Americans to leave for? There's already a militia war. And speaking to hard-line Iranian-backed elements of this government, Shia factions, they're saying to me that these are America's Sunni militia. And effectively what they told me over the weekend is that this is America's insurance policy against us, the Iraqi government.

GORANI: All right, Michael Ware, as always, thanks so much.

Well, for all of you following the Iraq story and all of our other headlines, you can always check out the website, cnn.com/international.

That's it for now from us, back to you, Jim.

CLANCY: All right, Hala, thank you very much for that.

Back to Britain, where one of the most eagerly awaited political memoirs has hit the book stores. Tony Blair's closest aide, Alastair Campbell, the median man, bearing all, well, nearly all, in his published diaries "The Blair Years: The Lights Aren't All Pleasant." Libby Wiener has more.

LIBBY WIENER, CNN INT'L. CORRESPONDENT (voice over): It's been billed as the book by the man who saw it all, the man in question Alastair Campbell. And what he saw, well, a lot of this man, Tony Blair. They talked all the time, and some of what they said is in the book, but crucially, relations with his neighbor in Downing Street, Gordon Brown, are largely glossed over. The fear of handing ammunition to the conservatives.

Mr. Campbell does give an insight, though, into how the rivalry at the top created uncertainty. He wrote in 2002, "Ministers were unsure what their instincts were meant to be because though we were the present, they realized GB", that's Gordon Brown, "was the future."

There were also revelations about how the cabinet felt when the big decision to go to war in Iraq was made. "JP," that's John Prescott, "John Reid, and one or two others looked physically sick," he notes in the diary.

What of the death of the weapon scientist, Doctor David Kelly, which led to Hutton inquiry the first extracts of the Alastair Campbell's diary being read out in court, he recorded "I felt dreadful. I could sense a juggernaut moving my way."

Andrew Gilligan, the BBC reporter at the center of the row over the government's use of intelligence had this to say today about the spin doctor's role.

ANDREW GILLIGAN, BBC CORRESPONDENT: I think by the end of his time in Downing Street, Campbell had become a rather tragic figure, a man whose every intervention had the exact opposite effect from that which he intended. I mean, if the war with the BBC was intended to restore trust in Tony Blair and disprove our story, it simply couldn't have been more counter productive.

WIENER: But Alastair Campbell clearly felt this was the moment to tell his side of the story. Stepping back into the limelight one more time. Libby Vena, ITV News, Westminster.

(END VIDEOTAPE)

CLANCY: From cave dwellers to composite plains, there is still a lot ahead on YOUR WORLD TODAY.

Boeing rolling out your new ride in the sky. The company is counting on the 787 Dreamliner for air superiority, in its sales dog fight with arch rival Airbus.

And Palestinians who have lived in caves for generations find their traditional lifestyle under threat by encroaching Jewish settlements on the West Bank. We'll have their story next.

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CLANCY: Well, it was inevitable. He brought lots of money into the Berlin zoo's coffers, but Knute, the celebrity polar bear, won't be having any more public play dates with his keeper. The two used to roll around and play together in twice-daily exhibitions at the zoo. But Knute is now seven months old, he weighs in at 50 kilos, no little guy really anymore. The zoo says it's concerned about the keeper's safety and the bear's independence.

But the keeper says he will always be there for Knute, who he says -- he describes him this way, he said, "Knute is really still a child."

Can't argue with that looking at him there.

Welcome back, no matter where you are watching around the world this day, it is YOUR WORLD TODAY, seen in more than 200 countries and territories across the globe.

An airliner that will carry travelers around the world for decades to come has just made its first appearance. The 787 Dreamliner, it's called. It was rolled out at Boeing's Everett, Washington, plant in a ceremony befitting its importance to Boeing's future. Richard Quest was there.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN TRAVEL CORRESPONDENT (voice over): With as much fanfare as Boeing could muster, the 787 Dreamliner was shown for the first time. This is a medium-size plane with big ambitions, designed to carry up to 250 people. It will fly long routes. For instance, Los Angeles to Sydney or London to Singapore. It is a plane that carries the future of Boeing along with it.

JIM MCNERNEY, CHAIRMAN, PRESIDENT., CEO: To make the world a smaller place and in so doing bringing all of us closer together.

QUEST: The Dreamliner is a different type of aircraft, made mainly from composite materials, not metal. It means it's very light and gives airlines great fuel efficiency, up to 20 percent better than current aircraft.

SCOTT CARSON, BOEING COMMERCIAL AIRPLANES: We knew that we had to design a product with a deep appreciation and concern for the environment, and for airport communities.

QUEST: From the start, airlines have voted in favor for this aircraft; 47 carriers have bought the plane. But the best part of 700 planes are now on order. So it's the most successful rollout ever. Singapore Airlines has bought 20 planes with an optional 20 more.

CHEW SHOON SENG, CEO, SINGAPORE AIRLINES: Well, if it delivers on all its designed targets and what Boeing promises, it will be a game-changer.

QUEST: The plane will now go into eight months of intense flight testing. The first commercial model will be delivered in May. This is an extremely ambitious time scale for an aircraft that has so much new technology.

MIKE BAIR, GEN. MANAGER, BOEING 787 PROGRAM: We know how to lay out flight test programs. We've done a lot of risk reduction testing already in the program to eliminate things that typically happen to you in flight tests. We understand how we've structured the program. We've got a lot of confidence that we're going to get this thing done and done on time.

QUEST: Boeing are keen to ensure, the Dreamliner doesn't suffer the fate of the A-380, where delays have soured the project.

(on camera): The battle between Boeing and Airbus will continue for many years to come, but as the long list of airline logos on this plane shows, the future of Boeing is resting on the wings of this plane. And for the time being, at least, the Dreamliner has made Boeing's dreams come true. Richard Quest, CNN, at the Boeing factory outside Seattle.

(END VIDEOTAPE)

CLANCY: All right. That's the view from the Boeing factory, but what do you really need to know about the 787 Dreamliner? Boeing and airbus are taking very different paths for their battle in the skies. Airbus is building the huge but largely conventional A-380. Boeing's new plane is more cutting edge in its design, smaller, more fuel efficient. So far, the strategy seems to be working for the U.S.-based plane maker.

Boeing says it's already received nearly 700 orders for the 787, more than any other aircraft in history before its first flight. The Dreamliner is scheduled to take to the air some time between late August and early September. It's supposed to enter commercial service next May.

We're going to take a short break here on YOUR WORLD TODAY. Hala Gorani and I will be back after this. Stay with us.

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CLANCY: Hello, everyone, and welcome back. An ancient tradition under fire in the West Bank. People who have lived for generations, literally, in caves, being pushed aside by modern developments, housing developments of Jewish settlers. But the Palestinians are trying to push back through the courts, and are getting some help from an unusual source, as Ben Wedeman tells us.

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BEN WEDEMAN, CNN INT'L. CORRESPONDENT: It's tea time at Haja Sada's (ph); tea prepared the same way it's been prepared for hundreds of years, by these Palestinian nomads in the baron hills of the occupied southern West Bank.

The ancient Arab traditions of hospitality second nature here; traditions now under threat.

The Israeli government wants to evict Sara and her relatives from this land because they don't have a permit to build, but these people don't build homes. For generations, they have been digging them.

(On camera): They say a man's home is his castle. In Sara's case, her castle was this cave. It was in this cave that she gave birth to three of her nine children. There is no running water, no phone lines, the electricity for their old TV comes from a car battery. They're dirt poor, scraping by with their goats, sheep, and olive groves. Yet the troglodyte life, Haja Sada says, was idyllic.

"It's better than living in a building," she tells me, "you have fresh air and you see the trees and the hills."

Three years ago, Israeli bulldozers filled in the cave that was her home. But Sada and her husband, who died two years ago, didn't leave. They put up tents and watched as the nearby Jewish settlement of Susia (ph) has grown and tensions between the two communities increased.

"We want them to be good, peaceful neighbors," she says, "We want to live together as neighbors with no one making trouble."

UNIDENTIFIED FEMALE: The change would be if you agree to shake my hand.

WEDEMAN: The cause of the cave-dwellers has been taken up by the Israeli peace movement, which is paying for a lawyer to fight their case in court. Over the weekend, more than 100 Israeli activists came to show their support, staging a march toward the settlement of Susia (ph), while police and settlers watched from above.

An Israeli court is expected to pass a ruling on the cave dwellers within the next two weeks. The fate of Sada, her family, and an ancient way of life is in the balance. Ben Wedeman, CNN, in the southern West Bank.

CLANCY: Well, finally, a chef in Taiwan causing an uproar, serving deep-fried carp while it's still alive and, well, twitching. The dish covered with sweet and sour sauce is a Szechwan specialty and is meant to show just how fresh the fish is. Well, not everyone wants it that fresh. Chefs say the preparation won't be on their menus, and a lot of people say, it's a pretty cruel recipe.

COLLINS: And to the White House with Tony Snow talking about Iraq and the troop withdrawals. Let's listen in.

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TONY SNOW, PRESS SECRETARY, WHITE HOUSE: In other words, it's the same sort of approach the president has always taken, let's ascertain the facts on the ground, let's see what's commanders think is going to be most successful and effective. What we're going to get in the next week is a series of reports on benchmarks, on a number of benchmarks that have been agreed by members of Congress and also laid down by this administration, about how to judge where things stand; some probable satisfactory, some probably unsatisfactory. We certainly will find out. We'll be able to read them out.

But that gives you a glimpse of where at the very earliest stages of not only a surge, but an operational surge, where all the forces are in, and they're now having an opportunity to work with their Iraqi counterparts. You now have the beginning part and you'll be able to look in two months and at how you proceeded on those benchmarks and also whether generals are going to be in the position to say we did this right, we did this wrong, this is where we need to go next.

ED HENRY, CNN CORRESPONDENT (on camera): Various elements have said that the president can't wait until September, and they're saying you need to go faster. So putting aside a timetable, is there a debate for right now going on inside the White House for a gradual withdrawal of U.S. troops, as "The New York Times" said?

SNOW: No.

HENRY: A gradual withdrawal?

SNOW: No, no, there is no plan -- again, ultimately the president wants to withdraw troops based on the facts on the ground, not on a matter of politics. And I would refer you to the last quote I just read you, which was from last week.

Furthermore, I know there is a convenient short-hand, but I think the position Senator Lugar and others had was a little more subtle than that. The one thing they didn't want to talk about was simply withdrawal for withdrawal's sake. They understand there is real political pressure here in the country, and they also understand there is an importance for having demonstrated political success and effort within Iraq.

I think what we have here is, ironically, a pretty shared vision where we want to go. Jennifer's first answer -- or first response of my answer was, well, everybody agrees with that. I think there is general agreement about the end state here. So the question is, how do you get to the point where you can achieve those goals? And I actually think if you look at the statements of Senator Lugar, and others, you're going to find that they largely tracked with the quotes I just read to you from --

HENRY: Senator Lugar said, quote, "The prospects that the current surge strategy will succeed in the way originally envisioned by the president are very limited."

SNOW: By September -- He also talked about it done by September, and the fact is we don't think everything will be accomplished by September, or we never said that. What Senator Lugar, I think, also, is concerned about, as you read further into what he says, is that he does not want a situation where we withdraw hastily, we create a vacuum, and therefore, we have a longer term and much more dangerous security environment for the United States.

HENRY: (OFF MIC) most U.S. troops could be pulled out by the middle of 2008, specifically. Do you agree with that?

SNOW: We'll see. I'm not a general. I'm not going to try to play one.

HENRY: He also said, quote, "Our course in Iraq has lost contact with our vital national security interests." Do you agree with that? Does that really show --

SNOW: I think it's tied up with our vital national security interests, but I'm going to, again, I'm not going to get into a fight with --

HENRY: (OFF MIC) say as you did this morning, you're saying again that Republicans like Lugar are not necessarily opposing the White House when they're saying, quote, "our force in Iraq has lost contact with our vital national security interests." How does that agree with what you're saying?

SNOW: Again, what you've done -- we went through this last week, where you'd take one sentence, I'd cite another sentence and I didn't bring the speech with me this time.

HENRY: (OFF MIC) Is there a line in his speech that agrees with your policy?

SNOW: Yeah, I think the whole series of lines in there. Again, ask yourself what Dick Lugar wants to see. What he wants to see is, and effective and integrated diplomatic effort within the region. Which this administration has been trying to work through and has been working through. What he wants is more political progress on the ground with the Iraqis. What he wants is, better training and capability on the part of the Iraqis. He wants Al Qaeda to loose. He wants the Iraqi people to win.

I think there are substantial areas of agreement here.

HENRY: That the course you're taking is not succeeding in those endeavors, so -- SNOW: No, again, we have just started the course, the course has just begun.

HENRY: But time is running out. But he's not a Democrat, he's a Republican.

SNOW: I understand. I understand that, Ed. HENRY: And what he's saying is time is running out.

Is the White House in denial about that, then?

SNOW: No, the White House is not in denial about the fact. But I think you're in denial about the fact that in the overall contours there's not that much disagreement. If you want a disagreement, you compare what he's saying with what Harry Reid is saying.

If you want disagreement, you take a look at what Dick Lugar has been saying and what democratic leaders have been saying by and large.

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