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Special Event

Investigating the Attack on the USS Cole; Examining the Crisis in the Middle East

Aired October 12, 2000 - 10:00 p.m. ET




ADM. VERN CLARK, CHIEF OF NAVAL OPERATIONS: The guided missile destroyer Cole was apparently attacked by terrorists.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: It was a despicable and cowardly act. We will find out who was responsible and hold them accountable.


ANNOUNCER: A suspected suicide bombing in Yemen leaves U.S. sailors dead, wounded and missing.


EHUD BARAK, ISRAELI PRIME MINISTER: This morning, we had a lynch. Israeli reservist soldiers came from the home and were lynched, then mutilated and burned, something that no government on Earth could accept.


ANNOUNCER: A mob attack in the West Bank provokes Israeli retaliation and deepens Palestinian anger.


UNIDENTIFIED MALE: Is Israeli life worth much more than Palestinian life? Is Palestinian humanity less than Israeli humanity?


ANNOUNCER: One day after debating international policy, the presidential candidates confront an international crisis.


GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: I hope that the -- we can gather enough intelligence to figure out who did the act and take the necessary action. AL GORE, VICE PRESIDENT OF THE UNITED STATES: Those responsible should know that the United States will not rest until the perpetrators are held accountable.


ANNOUNCER: The unfolding of a deadly day in the Middle East.


UNIDENTIFIED FEMALE: Right now, people are running. (UNINTELLIGIBLE) But people are running.

UNIDENTIFIED MALE: The sound of explosions, of shelling constantly. The sound of silence...

UNIDENTIFIED MALE: And this must stop immediately.

UNIDENTIFIED MALE: Somebody will shoot at civilians from a helicopter is not somebody who wants peace.

UNIDENTIFIED MALE: If this is not war, I don't know what is.


ANNOUNCER: From the first reports to the first pictures, to the costly reaction on Wall Street.

In New York, Perri Peltz.

PERRI PELTZ, CNN ANCHOR: We welcome our viewers around the world to this CNN SPECIAL REPORT on the twin crises in the Middle East: the apparent terrorist bombing of a U.S. destroyer in Yemen and the continuing spiral of violence and retaliation involving Palestinians and Israelis. Here's the latest.

A Hezbollah leader is calling on Arabs to take to the streets tomorrow for a day of rage to protest Israeli rocket and tank attacks in the West Bank and Gaza. The attacks came in retaliation for the deaths of at least two Israeli soldiers at the hands of a Palestinian mob. Meanwhile, revised casualty figures say six U.S. sailors are dead, 11 are missing, and 35 wounded as a result of what U.S. official strongly suspect was a suicide bomb attack on the destroyer, USS Cole.

The destroyer had pulled into Yemen's port city of Aden to refuel, when a small boat pulled alongside and exploded. CNN military affairs correspondent Jamie McIntyre has a closer look at the damage and the search for those responsible.


JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT (voice-over): The blast that punched this 20-by-40 foot hole through the one-half- inch thick steel hull of the destroyer USS Cole was as unexpected as it was deadly. WILLIAM COHEN, DEFENSE SECRETARY: According to an eyewitness account, the explosion occurred when a small boat that was participating in the mooring approached the USS Cole.

MCINTYRE: The American sailors caught in one of the main engine rooms, and on the mess deck above it, were killed by the powerful blast. And three dozen other sailors were wounded in what the Pentagon says appears to be a suicide-terrorist attack. According to Pentagon sources, in a routine maneuver, the small boat helped attach a mooring line to an offshore buoy.

But then, with the boat close by the warship, the two men aboard appeared to stand at attention, as the boat exploded without warning.

CLARK: My view is that -- and the scenario that I've described to you -- is that it would be extraordinarily difficult to have ever observed in time to do anything about this kind of situation, and to have stopped it.

MCINTYRE: The destroyer USS Cole was en route from the Mediterranean sea to the Persian Gulf to take part in enforcement of the oil embargo against Iraq. Because of the terrorist groups known to operate in Yemen, it used to be off limits to U.S. ships. But the Cole, which left its home port in Norfolk, Virginia this summer, refueled there, in part, because of a U.S. policy aimed at improving relations with Yemen.

The warship was scheduled to be there for only four to six hours, meaning the attack had to be planned well ahead of time.

SEN. JOHN WARNER (R), ARMED SERVICES CHAIRMAN: Given the magnitude of this blast, it couldn't have been put together in a garage overnight. Somebody had to do some careful planning to cause this much damage, this much loss of life and injury to our loved ones.

MCINTYRE: The Pentagon says it's premature to blame the attack on any particular group.

COHEN: If, however, we determine that terrorists attacked our ship and killed our sailors, then we will not rest until we have tracked down those who are responsible for this vicious and cowardly act.

MCINTYRE (on camera): In response to the attack, the Pentagon has put all of its forces around the world on a higher state of alert. But until the U.S. completes it investigation, the Pentagon could offer no assurances this kind of attack couldn't happen again.

Jamie McIntyre, CNN, the Pentagon.


PELTZ: And now an overview of our other major story: Again today, violence erupted between Israelis and Palestinians in the West Bank city of Ramallah. A mob killed at least two Israeli soldiers. Israeli officials say the fate of a third soldier remains unknown. The mob violence provoked seven hours of Israeli retaliation. And, please, be advised, our Ben Wedeman story of this day in Ramallah contains pictures that are disturbing.


BEN WEDEMAN, CNN CORRESPONDENT (voice-over): An Israeli helicopter fires a missile into the Palestinian town of Ramallah: more proof -- as if more proof was needed -- the Middle East peace process may be in its death throes.

The attack was Prime Minister Ehud Barak's response to the killing, "lynching," as Israeli officials call it, of Israeli soldiers by a Palestinian crowd. According to Israel, the soldiers strayed into Ramallah by mistake. Palestinian police suspected they were undercover agents and arrested them, but could not defend them against the crowd.

Wherever the truth lies, there is no doubt about what happened next. The streets emptied. Israeli Merkava battle tanks moved into firing positions, while more armor deployed in the hills above Ramallah. Helicopters hovered menacingly over the outskirts of town. And then the attack began, hitting the police station where the killings took place.

Israel also targeted Palestinian radio, which was knocked off the air. The Israeli general in charge of the West Bank made no apologies.

GEN. BENNY GANZ, ISRAELI ARMY: And there was a very severe case this morning on these murders of our soldiers. As far as I'm concerned, I will do my best to control the area and to get ready to whatever option will come in the future.

WEDEMAN: Panicked residents fought to put out the fires. Palestinian council member Hanan Ashrawi described by phone the scene in Ramallah during the attack.

HANAN ASHRAWI, PALESTINIAN COUNCIL MEMBER: We have no electricity. I'm sorry, but we are trying very hard to stay calm. The situation is very, very critical. It's very dangerous.

WEDEMAN: Dozens were wounded as Israel launched a similar assault on targets in Gaza. Israel described the attacks as limited, but the injuries done to the peace process by the killing of the Israeli soldiers and by Israel's response may be fatal.

Ben Wedeman, CNN, Ramallah, on the West Bank.


PELTZ: Israeli attacks were not confined to the West Bank. Helicopters also attacked targets in Gaza, including a marina next to Palestinian Authority President Yasser Arafat's office. Most of the buildings were evacuated before they were struck. The Palestinian leader was not injured and later visited a hospital where Palestinians wounded in the recent fighting are now being treated.

With his dream of achieving peace in the Middle East during his presidency almost shattered, President Clinton says he is -- quote -- "horrified" by events in the region.

CNN senior White House correspondent John King looks at a tough day in Washington in this "Reporter's Notebook."


JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: It was, as one senior official put it, a double dose of despair. The president wakes up in New York. It's his 25th wedding anniversary. And he's told that a U.S. Naval destroyer in port in Yemen has been bombed, apparently of terrorist attack -- at least a handful of sailors dead, and the death toll likely to rise by 10 or 12 more, the president is told first thing in the morning.

If that's not bad enough, he gets back to the White House thinking that the situation on the ground in the Middle East had improved in the past 36 hours and perhaps now there could be a diplomatic effort -- a debate in the White House about whether to spend -- whether to send special envoy Dennis Ross or the secretary of state, Madeleine Albright -- and then boom: the Israeli soldiers murder.

The Israelis retaliate with gunship helicopters and rockets fired. So he thought he had made some progress in Middle East diplomacy. That disappears. And then you have a terrorist attack: sailors dead; the investigation of that under way. The president spent the day -- what was supposed to be a down day, a relaxing day -- in the White House Situation Room with his national security team most of the day, and then much of it in the Oval Office, once again working the phones, appealing for an end to the violence.

He's been doing that now for five or six straight days.

CLINTON: I call on both sides to undertake a cease-fire immediately and immediately to condemn all acts of violence.

KING: Aides say that he's quite frustrated, and at times, at wit's end, most of his frustration directed at Yasser Arafat, but also at the situation in general. This is something he has worked hard at for 7 1/2 years. Agree or disagree with this president, there's no question at least the time and the energy -- you might question the policies -- but there's no questioning the time and the energy he has put into the Middle East process.

And just 2 1/2 months ago, he thought he had them on the verge of a historic agreement. They were sitting across the table talking about the sole remaining issue: Jerusalem. It has completely unraveled now. And there is no expectation here at the White House that they can get back to that kind of bargaining, that close to a peace deal before this president leaves office. His biggest priority now is not making peace, it's avoiding a war.


PELTZ: And still to come on our SPECIAL REPORT: starkly different perspectives on the Middle East violence. We're going to hear from a Palestinian spokeswoman, as well as Israeli Prime Minister Ehud Barak. Also, a former Navy captain joins us to talk about the search for the missing sailors of the USS Cole. And later, the view from the campaign trail, where international affairs suddenly are more than just debating topics.


PELTZ: Today's killing of at least two Israeli soldiers in Ramallah and Israel military's retaliation has left the peace process critically wounded. Palestinians and Israelis are blaming each other for the escalating violence.

CNN chief international correspondent Christiane Amanpour spoke with Israeli Prime Minister Ehud Barak today. And she asked him what possibilities are left now for a peaceful solution?


CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Prime Minister Barak, you have just finished saying that this was a limited action, that you did not target Palestinian Authority President Yasser Arafat. But you have never -- Israel has never taken this extensive action against the Palestinians. How do you expect them to react?

BARAK: I expect them to put an end to violence that they have initiated and are responsible for. We have this morning -- we had a lynch of three Israeli reservist soldiers who -- people came from their home --and were lynched, then mutilated and burned. It's something that no government on Earth could accept, and Israel is ready to look open-eyed at the situation.

Understand that we are living in the Middle East, not in North America and not the Midwest, and this is a place where you cannot expect anyone to respect you, you cannot expect your own people to trust you, if you cannot respond to such an event. And we responded in a very focused manner, very clear signal that we will not have this kind of violence continue forever.

We are living in a neighborhood which is somewhat different from the neighborhood you are living in. It's not North America; it's not Western Europe. This is a place where there is no mercy for the weak -- you can see it in the lynched soldiers -- and no second opportunity for those who cannot defend themselves.

Israel is determined to defend itself. We have no hostile intention against anyone around us. We were ready to go further than any previous government in Israel, be it Netanyahu or Shamir or even Rabin and Peres, in contemplating ideas that will put an end to it. But if we won't find a partner with the same determination and clarity of objective, we will fight to defend ourself and our right to live in freedom in this part of the world. Try to imagine that you have a farm, it's attacked by robbers. You respond. Unfortunately, they are trying to kill you as you respond. You kill five of them and one of your family was killed. Is it fair to say that unless you will kill or let someone else kill another four of your family, it's not satisfactory?

We leaders have to be able to look through the street to see the real causes, the real causes that Arafat -- who could take very easily an agreement that was on the table in quite a detailed way, defined by ideas of President Clinton at Camp David -- he chose deliberately, for reasons that he's responsible for, is its own kind of choice. He deliberately choose to not to go to an agreement, but to raise violence in order to draw the support of the world and the attention of the world to his cause, paying with the blood of his people.

This deliberate action is against common sense; it's against the real interest of his own people, but that's up to him. But this is the cause of the whole issue.

We will never lose hope, as I've said, to make peace with the Palestinian people. They are our neighbors forever. But if this leadership is unripe, we cannot impose it upon them. It takes two to make peace. It takes only one to lead to confrontation. And if Arafat wants confrontation, we cannot avoid it. I only think we can hope is that the world leadership and Arab leadership and there are many other responsible leaders around and will use their influence. They'll share kind of multiple set of values with Chairman Arafat, to convince him this is the time to reach the peace of the brave. The time is right, but he seems to be unright for the time.


PELTZ: And, of course, Mr. Barak's words mean many things to many people. To help us understand how Palestinians hear his statements, Najat Arafat Khelil joins us now live from our Washington bureau. She's president of the Palestinian American Congress and works to create a dialogue between Palestinian-Americans and Jewish- Americans. She reports...

Dr. Khelil, thank you so much for being with us. We appreciate it.


PELTZ: There are reports tonight, Dr. Khelil, that a Hezbollah leader is calling for a day of rage tomorrow. Why not call for a day of peace and try to end this spiral of violence?

KHELIL: Well, it is very difficult with the situation the way it is now to think of peace on this part. People are -- the emotions are very high. The situation is escalated to the level that is beyond control. And to call for peace now, it is very difficult when you hear the Israeli prime minister saying what he is saying.

So in response to what he's saying -- so the people cannot respond by saying now it's time for peace, because, first of all, they are not the ones who started the violence. And the ones who started the violence should be stopping it and calling for peace first.

PELTZ: Well, one of the things that the prime minister said is that the retaliation is over, that it is now up to the Palestinians. Why hasn't Chairman Arafat come out and denounced the violence?

KHELIL: It is the same way that the prime minister is not denouncing it. Chairman Arafat did not call for the violence to start with. The violence started first by the failure of the Camp David talks, and then by the visit of Sharon, and then by the Israeli army hitting with the live ammunition, with tanks, with gunships, helicopters on unarmed civilians.

So they're the ones who started the violence. So if they go back to their positions inside Israel, the violence will stop automatically, because the Palestinian children will go home. And they won't have to feel the oppression they are feeling hour -- every hour.

PELTZ: Of course, there are questions tonight of who is in control. If Arafat in fact came out and denounced the violence, would Palestinians listen?

KHELIL: See, the point here everybody is talking about Arafat being in control or he's in not in control. The point here, we're not talking about control. If we're talking about control, would we blame President Clinton for all the riots that took place into Seattle during the World Trade Organization or the demonstration and the mob crowds that were in Washington during the World Bank meetings?

These are instantaneous popular revolts and actions that people come up with out of the desperation, out of oppression, out of feeling of the humiliation they have been under for 33 years. So it's not a matter of Arafat controlling it, because he's not the one who started it. And it's a popular revolt that is not controlled by leaders. On the other hand, Mr. Barak...

KING: Are you saying then, Dr. Khelil, that people in fact would not listen, because of course, that's the question: Why did this happen today in a police station?

KHELIL: It happened in a police station...

KING: Why were the police not able to control what was going on?

KHELIL: Because the police, to start with -- the Palestinian police, first of all, they're not armed to the hilt like the Israeli army. Second, they were not trained in mob control. Third, they've been outnumbered by the mobs who surrounded them. So they were not able to stop them, because they're not prepared for crowds like that, and no way they could really stand to the anger of the people.

And they're not equipped with either with weapons or they were not trained for mob control the way the Israeli army is.

PELTZ: Doctor Khelil, thank you so much for your thoughts. We appreciate your time.

KHELIL: Thank you.

PELTZ: Still to come on this CNN SPECIAL REPORT: a closer look at the U.S. ship that was an apparent terrorist target, and the latest on the U.S. investigation into the explosion.


PELTZ: Turning back now to our other top story, the apparent suicide attack on a U.S. ship as it refueled in Yemen: The USS Cole was one of the highest tech destroyers in the U.S. Navy. Joining us now is retired Captain Alec Fraser, who is now president of Turner Properties in Atlanta. And during his 20-year Navy career, he served aboard a ship similar to the Cole.

Captain Fraser, thank you so much for being with us.

RET. CAPT. ALEC FRASER, U.S. NAVY: Good evening.

PELTZ: In 1987, during the Iran-Iraq war, the USS Stark was mistakenly hit by two Iraqi Exocet cruise missiles. Are there any similarities between the damage caused to the USS Cole and the USS Stark?

FRASER: The USS Stark was a fast frigate guided-missile ship that was operating in the northern part of the Persian Gulf during the Iran-Iraq war. It was hit by two Iraqi Exocet missiles of somewhat similar explosive size than what the USS Cole was hit with earlier today. The missiles entered one side of the ship, exploded inside, and then the debris and the explosion continued out on the other side of the ship.

The resulting fires, as you can see in this video, extensively damaged the superstructure of the ship. It took several days for both this ship's crew and other ships' crews from nearby ships to extinguish the fires and prevent the flooding. Over 37 lives were lost in this incident. And it gave certain lessons learned to the Navy that were incorporated in the design and the training of crews in the future.

And, as a result, when the USS Cole suffered its extensive damage, the casualties were perhaps not as high because of lessons learned. In this particular video you show -- this slide -- you can see that the list on the ship is somewhat similar to what the USS Stark experienced, except the damage to the topside superstructure and the list -- and the fires have been extinguished quickly. And, as a result, there's been perhaps less extensive loss of life.

When you look closely at the hole that was imploded into the side of the ship by the explosion, there are several clues that can show that the damage suffered by the Cole was handled better and more effectively than that of the USS Stark. For instance, you can tell that the modern firefighting suppression system that was inside the engine rooms and main spaces for this ship successfully extinguished the fire quickly. That thus prevented the superstructure damage that we saw just a few seconds ago on the USS Start. So that area above where the blast occurred -- this area on the superstructure above -- was not as extensively damaged. Also, you can tell in this particular photograph that the phone on the bottom of the picture that was placed on top of the water inside of the engine rooms has successfully extinguished the fires.

And at the same time, because there is space between the waterline and the upper part of this hole, the ship's crew has successfully limited the flooding inside the ship such that it did not cause the ship to list further or perhaps to even endanger its ability to stay afloat.

PELTZ: Captain Fraser, I want to interrupt just for a second, because I want to make sure we have time, because I think people don't understand. The death -- the death count right now on the USS Cole is six sailors, 11 still missing. How can an explosion prevent rescuers from finding those missing sailors?

FRASER: The explosion has caused extensive flooding and damage to the doors to these compartments. So it's difficult for the sailors that are on the damage-control parties to be able to enter those compartments and successfully look for those missing sailors that are -- that are perhaps trapped.

PELTZ: There's a lot of traffic in any harbor. Could something like this, in your opinion, have been prevented?

FRASER: In the 20 years that I was involved in ship operations, you entered ports many times. But a ship does not refuel inside a hostile port. Inside a port are many boats that are going back and forth frequently, in addition to those line-handling tenders that were handling the USS Cole. It would be very difficult to distinguish one that was making a run at you for an attack as opposed to a generally peaceful boat going by.

PELTZ: Captain Fraser, can you tell us what it must have been like? This was obviously a tremendous surprise. What must it have been like on the boat at the time -- on this vessel at the time of the attack?

FRASER: The ship's crew is at a heightened state of readiness called sea-and-anchor detail as it was entering the harbor. When the explosion occurred, they probably sounded the general alarm, in which every sailor is trained to immediately respond to his general quarter station.

Those firefighting and damage-control teams and flooding teams immediately took their place on designated stations. And they responded. And it would be an automatic training evolution to respond to this type of thing. And they responded the way they were trained.

PELTZ: Captain Alec Fraser, we appreciate your insight. Thank you so much. It's very helpful. And coming up: We have more on today's apparent suicide bombing, including a look at the suspected terrorist groups that are a focus of a major U.S. investigation.


PELTZ: Pending final approval from the Yemeni government, more than 100 FBI agents, forensic experts and other investigators are set to go to Yemen.

CNN national security correspondent David Ensor reports the Pentagon and the CIA are wasting no time and sparing no effort in trying to ferret out the perpetrators.


DAVID ENSOR, CNN CORRESPONDENT (voice-over): It is the most serious attack on a U.S. target in over two years. And administration officials said they will spare no effort to get to the bottom of it.

CLINTON: We will find out who is responsible and hold them accountable.

ENSOR: An FBI team have been dispatched to the scene. At CIA headquarters and around the world, U.S. intelligence officials are scouring for leads. No one is pointing fingers yet, but Hezbollah, Hamas, and officials say especially Egyptian Islamic Jihad cannot be ruled out. U.S. officials say accused terrorist mastermind Osama bin Laden also has to be a suspect given his ties to Yemen, where he has commercial enterprises and relatives.

STANLEY BEDLINGTON, FORMER CIA OFFICIAL: Osama bin Laden seems almost tailor-made to fit the bill for the prime suspect in this one.

ENSOR (on camera): Why?

BEDLINGTON: Well, first of all, he's has -- he's had a history of carrying out acts of terrorism and other sorts of activities in Yemen, going back to the mid-'80s.

ENSOR (voice-over): In fact, the U.S. indictment before the federal court in New York of bin Laden and others in connection with the Africa Embassy bombings two years ago: charges that they conspired to "attack American military facilities in the Gulf region and the Horn of Africa, and members of the American military stationed in Saudi Arabia, Yemen, Somalia and elsewhere with bombs."

There is also at least one home-grown Yemeni group with ties to bin Laden, who some believe could be responsible for the attack on the ship.

PETER BERGEN, WRITER: The Islamic Army of Aden kidnapped 16 Western tourists, four of whom were killed in a botched rescue attempt by the Yemeni army. This group could possibly be behind this attack.

ENSOR: After a trial of seven, their leader, Abu Hassan al- Mihdar, was executed in Yemen just days less than one year ago. Finally, some analysts argue the government of President Saddam Hussein cannot be ruled out as a suspect, though U.S. officials say they doubt Iraqi involvement.

(on camera): One thing U.S. officials and outside analysts are grimly agreed upon: Given the current climate in the Middle East, they are bracing for more terrorism.

David Ensor, CNN, Washington.


PELTZ: And today's incident is raising questions not only about those responsible, but whether it could be related to recent events elsewhere in the Middle East. And here to talk about that is Brian Jenkins of Kroll & Associates. He's in our Los Angeles bureau.

Mr. Jenkins, thank you so much for your time.


PELTZ: Help us to make sense of all of this. Attacks like these can take weeks, months to plan. And yet Mideast violence has lasted about two weeks. So what can you tell us about a possible motive?

JENKINS: Well, I suspect the planning for this preceded the eruption of violence, the recent eruption of violence in the Middle East. As you mentioned, the planning for an operation of this type, the collection of intelligence, the reconnaissance the logistics, putting people in place, all of these takes weeks, sometimes months.

It may be made more propitious, for some audiences, to carry out right now. But I think this had its own timing, its own rhythm, and would be connected more broadly with sentiments -- anti-U.S. sentiments -- in the Middle East.

PELTZ: Let's talk about some of that sentiment, because Americans, of course, worldwide, there seems to be so much anger now directed towards Americans. How vulnerable are Americans, both worldwide and here in the United States?

JENKINS: Well, there is certainly vulnerabilities throughout the world. Americans are ubiquitous. We have our diplomatic facilities throughout the world. We have our military deployed in many parts of the world, in many contentious areas of the world. We have American businessmen, American tourists in almost every country of the world at some given moment. So the vulnerabilities are there.

That, however, doesn't translate into high risks for individual Americans traveling abroad, or for Americans in this country. Certainly, soldiers and sailors who are in some of these dangerous areas are exposed. But to the average American citizen, they are in far greater danger from our usual domestic violence and car accidents than they are from terrorism abroad.

PELTZ: All day, we have heard from officials -- the president, the secretary of state -- that those responsible will be brought to justice. And yet we know historically that when it comes to acts of terrorism, that always doesn't happen. How likely do you think, in this attack, the perpetrators will be brought to justice?

JENKINS: Well, I think there's a good chance we will able to identify and potentially apprehend those who were involved in the actual operation itself, those who may have assisted logistically or in providing safehouses, or doing other things that facilitated this terrorist attack.

Where it becomes difficult is to make the link between the actual perpetrators and the authors of that attack, those who ultimately gave the command. That's where the evidence is hard to get.

PELTZ: And how difficult is evidence to come by when it is a suicide attack? What can you tell us about that?

JENKINS: Well, there would still be a great deal of evidence. I mean, first of all, there is forensic evidence. There will be evidence of the kind of explosives used. There will be an attempt to gather up hopefully all of the debris, even though it will be made extremely difficult by the fact that a lot of that is scattered. A lot of it is underwater now, but, nonetheless, to gather that for forensic clues.

And, unfortunately, we've had occasion in recent years to become extremely good at that. Concurrent with that will be a standard police investigation, conducted by the Yemeni authorities, but with -- certainly with liaison and possibly with the assistance of U.S. authorities. There were people involved. Either that was the original crew on that little vessel that carried the bomb or a crew was substituted.

There will be some people who will know something. And the government of Yemen has already indicated that it intends to make this a major issue. The president of the country has indicated that he personally will take charge of the investigation.

PELTZ: All right, very good. Brian Jenkins, Kroll & Associates, sir, we appreciate your time. Thank you.

JENKINS: Thank you.

PELTZ: And still ahead on this CNN SPECIAL REPORT: a recap of the day's events as they unfolded in the Middle East and Yemen. We will be right back.


PELTZ: Thursday dawned in the Middle East with a renewed hope of progress toward peace. Palestinian leader Yasser Arafat and Israeli Prime Minister Ehud Barak had agreed the night before to a high-level meeting of military and security officials. But as the day unfolded, that step toward ending two weeks of violence was tripped up by devastating developments.


ASHRAWI: We're trying very hard to stay calm. The situation here is very, very critical. It's very dangerous.

UNIDENTIFIED FEMALE: I just heard another bomb. I see the two helicopters now. I just heard another bomb.

ASHRAWI: ... of explosions, of shelling constantly, the sound of sirens.

UNIDENTIFIED FEMALE: No, I can see it now. It is actually the bomb coming out of the helicopter.

UNIDENTIFIED MALE: If this is not war, I don't what is.

COHEN: We will not rest until we have tracked down those who are responsible for this vicious and cowardly act.

PELTZ (voice-over): Just minutes after 7:00 Thursday morning: President Clinton is notified at his Chappaqua, New York home of an apparent suicide attack on a U.S. Navy destroyer in the Persian Gulf. The USS Cole was docked in the Yemeni port of Aden on a routine refueling stop, when a small boat pulled alongside the ship and exploded.

CLINTON: This was an act of terrorism. It was a despicable and cowardly act. We will find out who was responsible and hold them accountable.

LAWRENCE KORB, FMR. ASSISTANT DEFENSE SECRETARY: We should have been on heightened alert, we thought, with our intelligence, with knowing how volatile the situation is. But this obviously had been planned for a while.

DANIEL BENJAMIN, FMR. NATL. SECURITY COUNCIL OFFICIAL: The reports are sketchy. I -- the location is interesting, because Yemen is a country with a very high penetration of extremists, anti-American extremist terrorists.

PELTZ: More than 1500 miles away, in the West Bank town of Ramallah, a violent morning continued. In fact, it was just the beginning. Some 20 minutes after President Clinton was informed of the attack on the USS Cole, Israel announced that two of its soldiers had been killed by an angry Palestinian crowd outside Ramallah police headquarters.

The soldiers, dressed like civilians, had lost their way, and were taken into custody by Palestinian police. But when rumors spread through the enraged crowd that the Israeli soldiers were undercover agents, the furious group overran the station. Two of the soldiers were thrown into the street, one out of a second-floor window, and beaten.

GEOFFREY KEMP, THE NIXON CENTER: This escalation comes at a time when tensions are growing, both on the Arab street and on the Israeli street, and where it may soon be difficult for Mr. Barak and Mr. Arafat to control their own people.

PELTZ: Reaction from the United States was swift and direct.

MADELEINE ALBRIGHT, SECRETARY OF STATE: I call upon the entire international community to join the United States in urging Chairman Arafat to take the steps necessary to bring this senseless and destructive cycle of fighting to an end.

PELTZ: The United States had called for an emergency meeting between Yasser Arafat and CIA director George Tenet in Ramallah. But when the meeting was canceled, retaliation from Israel was even swifter. And combat helicopters took to the air.

SAUSAN GHOSHEH, CNN PRODUCER: The police here is on high alert. They are not letting many people come by. Journalists are only allowed in and out, because helicopters are still hovering in the air.

EPHRAIM SNEH, ISRAELI DEPUTY DEFENSE MINISTER: What we did this afternoon, we attacked the police building where our two soldiers were lynched. We attacked the broadcasting station, which all the instigations and the incitements for terrorism and brutality and violence is coming from. We attacked the headquarters of the militia, which is actually behind most of the violence. These were our targets. And it corresponds directly to those who ignite the flame of terrorism and violence.

PELTZ: In a second wave, Israeli helicopters returned two hours later, knocking out key targets just feet away from Arafat's Gaza seaside residence. Israel also clamped down movement on the West Bank, denying Palestinians access to other nearby communities, as Israeli tanks continued their attacks in and around Ramallah.

KEMP: This comes at a time when Israel feels very vulnerable that its deterrent power -- which for years kept it strong and kept its enemies at bay -- is no longer effective. And the result is going to be increasing voices in Israel to be tougher, to be ruthless, to be hard, because only then will the violence stop.

PELTZ: As night fell on the Middle East, another attack on the Palestinian security forces in the town of Nablus. Palestinians in Jericho set ablaze an ancient synagogue. And Israel's prime minister, Ehud Barak, called a halt to the rocket attacks against the West Bank town of Ramallah and the Gaza Strip, and warned the Palestinians of his country's resilience.

BARAK: We know which boats exactly of the kind of police boats of the -- of the Palestinians. We know exactly where everything is. And we will hit them if necessary. The Palestinian Authority cannot hold it -- the stick at both ends.

PELTZ: So what began as a day to broker a peace agreement ended in bloodshed, extinguishing immediate hopes that Israelis and Palestinians could end the two weeks of violence that has left at least 95 people dead.

(END VIDEOTAPE) PELTZ: U.S. officials say they are looking at a number of Middle East groups and an international fugitive as possible culprits for the attack on the USS Cole.

And still ahead on this CNN SPECIAL REPORT: We are going to take a look at how today's developments in the Middle East affected Wall Street.


PELTZ: Jitters about the violence in the Middle East are hurting world stock markets. Indices in Singapore, South Korea, Hong Kong and Japan are sharply lower in Friday morning trading. The Dow Jones industrial average almost fell through the psychologically important 10000 barrier today. As it is, the 379-point drop is the fifth worst point loss in the Dow's history.

Crude oil prices, on the other hand, are skyrocketing. Prices briefly hit $37 a barrel -- that is just 20 cents below the 10-year high -- before falling back to 3606. Some analysts predict oil could reach $50 a barrel if tensions don't ease.

And still ahead on this CNN SPECIAL REPORT: We will have reactions to the developments in the Middle East, which are virtually interchangeable between the two major presidential candidates. We are going to hear from Texas Governor George W. Bush and Vice President Al Gore. That's next.


PELTZ: The campaign trails of presidential hopefuls Al Gore and George W. Bush converged today on events in the Middle East. Both denounced the mob violence that killed at least two Israeli soldiers. And they demanded Palestinian leader Yasser Arafat end the violence. They also agreed on how the United States should handle the deadly attack on the USS Cole in Yemen.


GORE: Terrorists should know that whoever is responsible for something like this will be met with a full and forceful and effective retaliatory response from the United States of America. We will not leave this matter.

BUSH: I hope that the -- we can gather enough intelligence to figure out who did the act and take the necessary action. There must be a consequence.


PELTZ: Vice President Gore returned to Washington from the campaign trail to attend White House briefings on the day's developments.

Well, during last night's presidential debate, a lot of viewers wondered why the candidates dwelled on world affairs. And, of course, we got the answer today.

As CNN senior political analyst Bill Schneider tells us, the crisis in the Middle East raises the stakes in the presidential contest.


WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Today's events are beyond political controversy. Americans are united in outrage over an apparent terrorist bombing of a U.S. naval vessel. Americans are united in the view that the U.S. has a vital interest in the Middle East.

Last night, the candidates reflected that consensus on Israel.

GORE: Our bonds with Israel are larger than agreements or disagreements on some details of diplomatic initiatives. They are historic, they are strong, and they are enduring.

BUSH: I want everybody to know, should I be the president, Israel's going to be our friend. I'm going to stand by Israel.

SCHNEIDER: And on the peace process:

BUSH: This current administration's worked hard to keep the parties at the table. I will try to do the same thing.

JIM LEHRER, MODERATOR: They want to base their vote on differences between the two of you as president, how you would handle Middle East policy. Is there any difference?

GORE: I haven't heard a big difference right in the last few exchanges.

SCHNEIDER: So will any of this affect the campaign? An international crisis makes the presidency look bigger. That could be a problem for George W. Bush, who has far less experience in world affairs than the vice president, which is exactly why Bush used the world affairs discussion last night to minimize the distance between himself and the Clinton administration. Like other governors who have run for president -- Jimmy Carter in 1976, Ronald Reagan in 1980, Bill Clinton in 1992 -- Bush has to reassure Americans that he's big enough for the job, or at least that he'll have people around him who are.

COLIN POWELL, FORMER CHAIRMAN, JOINT CHIEFS OF STAFF: He went with the vice president toe-to-toe for, I counted, close to 25 minutes on the various foreign policy issues that are before the nation and before the world.

SCHNEIDER: On world affairs, Bush is selling continuity. So is Gore. When Bush occasionally hinted at the need for change...

BUSH: I am worried about overcommitting our military around the world. I want to be judicious in its use.

SCHNEIDER: ... Gore said, me too. GORE: I would certainly also be judicious in evaluating any potential use of American troops overseas.

SCHNEIDER: Both candidates are betting that Americans want continuity in world affairs and change on other issues.

(on camera): If Americans are still satisfied with President Clinton's world leadership a month from now, Bush is hoping to neutralize the issue, convince voters he's just as safe a choice as Gore. If Clinton blunders, than both candidates are going to have to shift gears and show voters how they will offer change.

Bill Schneider, CNN, Atlanta.


PELTZ: And that wraps up this SPECIAL REPORT. Thank you for joining us.

I'm Perri Peltz.

For our international viewers, "WORLD NEWS" is next. And for viewers in North America, we are going to have another SPECIAL REPORT on the crisis in the Middle East and the attack on the USS Cole at 1:00 a.m. Eastern. That's 10:00 Pacific. "SPORTS TONIGHT" is next.

Good night.



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