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Conflict in the Middle East: Fire Breaks Out Near Church of Nativity

Aired May 1, 2002 - 17:48   ET


WOLF BLITZER, CNN ANCHOR: We now are seeing these live pictures from Bethlehem. You can see smoke. We're being told that there are explosions around the Church of the Nativity in Manger Square in Bethlehem following what Walter Rodgers, our man on the scene, told us was a 45-minute exchange of fire between Israeli forces, who said they were being sniped upon by Palestinians inside the Church of the Nativity. You can see the explosions. You can see the smoke emanating from around the Church of the Nativity, obviously, one of the holiest sites in the Catholic and the Christian church. This is where Christians believe Jesus was born. You can see the smoke emanating from the Church of the Nativity, explosions around that church.

This has been a month-long standoff between Israeli forces around the church and Palestinians inside. Only yesterday, a few dozen Palestinians, a few dozens individuals from inside the church were allowed to leave. But you can see on the left side of your screen, you can see some smoke, you can see some fire coming from outside, looks like outside that church. It's -- right a small bit, as you take a close look on the left side of that church. We're looking at this live picture that we have, our camera in Bethlehem. A very, very potentially worrisome development, a fire near the Church of the Nativity, very close to the Church of the Nativity.

This is a holy area, Manger Square, for those who have been there, no, it's not a very large area, but it's an area that includes a lot of religious symbols, a lot of religious places. You see that fire seems to be getting bigger outside the Church of the Nativity, right on the left side, lower part of your screen. You can see the flames emerging there.

The fire presumably broke out after this 45-minute gunfight that occurred earlier tonight. It's now well after midnight, almost 1:00 a.m. in Bethlehem where we see this live picture of this fire near the Church of the Nativity. Perhaps it's even abutting the Church of the Nativity from this vantage point. Our Walter Rodgers is trying to get close there with the telephone. Once he gets to the scene, once he can get on the phone, he will be giving us more information.

There still is close to 200 or so people believed to be inside the church, many monks, priests, nuns. Israelis say 20 to 30 or so armed Palestinians, they say wanted Palestinians that are accused of terrorism inside the church. And this has been a continuing standoff now for about one month, a little bit more than a month. You see our camera is now beginning to zoom in to that picture.

What you're seeing is a fire that erupted tonight in Bethlehem just outside -- looks like just outside the Church of the Nativity where an exchange of gunfire occurred between Israeli forces on the outside and Palestinians on the inside. An Israeli army spokesman telling our Walter Rodgers on the scene just a little while ago that they were being shot at from inside the church. They returned fire. A heavy exchange of fire has developed, and now this actual -- these actual flames that you're seeing bursting out.

This is obviously very troubling, given the enormous religious symbolism, the holy site in Bethlehem where this fire has now erupted. Only yesterday, as I said, some two dozen Palestinians, two dozen individuals inside that church left, were allowed to leave. There had been negotiations between Israelis and Palestinians to try to end this standoff. You can see this fire, obviously -- as our camera zooms in and gets closer, you can see the flames continuing.

It's unclear whether any firefighters have even moved into the area to try to put this fire out. The Israelis have imposed a curfew in Bethlehem now for almost about a month. There have been brief periods, a few hours every day or every few days, where local Palestinians who live in Bethlehem, Christians and Muslims alike can go and do a little bit of shopping. But by and large, there has been a curfew in Bethlehem for well over a month now as the standoff at the church continues.

Many observers had expected the resolution of the standoff in Ramallah, where Israelis say six wanted Palestinians were being protected, being holed up by Yasser Arafat in his Palestinian Authority headquarters, would serve as a model potentially for resolving the standoff in Bethlehem. But that so far, obviously, has not happened. The Palestinians inside that church remained holed up as we look at these live pictures from Bethlehem just outside Manger Square where the Church of the Nativity, of course, has existed.

These pictures, a fire outside the Church of the Nativity. The standoff in Bethlehem continues. Once again, our Walter Rodgers is heading towards that area right now in Bethlehem where it's almost 1:00 in the morning.

We have some earlier pictures of the actual firefight that I want to put up and show our viewers, the exchange, the fire -- the exchange of firefight that was going on. Look at this. Very intense. This occurred within the past hour or so. And it continued for about 45 minutes. The Israelis say it started when Palestinians inside began shooting at them. They returned fire. Let's listen and watch this videotape that we shot within the past hour.

Israelis say perhaps as many as 40 wanted Palestinians still inside the church, the Church of the Nativity in Manger Square in Bethlehem, perhaps 180 to 200 people altogether, many monks, priests, nuns, others have been inside now for about a month, a little more than a month, as they -- as the standoff between the IDF, the Israeli Defense Forces, and the Palestinians has continued. We're back now live. You're looking at this fire that erupted. Just next -- it looks to be right next to the Church of the Nativity in Bethlehem, a fire that apparently erupted as a result of that intense gunfire that took place within the past hour or so, an exchange of firefights that occurred for about 45 minutes. Our Walter Rodgers is now back on the phone. He's on the scene in Bethlehem. Walter, tell us what you see and hear?

WALTER RODGERS, CNN CORRESPONDENT: Wolf, there is an exchange of gunfire going on between Israelis and Palestinians in Manger Square itself. There is a fire in one of the buildings adjacent to the Church of the Nativity. The church itself does not appear to be on fire. Of course, that's one of the holiest sites in Christendom.

The firefight commenced just about an hour ago. The Israeli defense spokesman, the IDF Israeli army spokesman here in Bethlehem said they began receiving fire from within the church where there are, according to the Israelis, at least 25 to 30 armed Palestinians inside. Of course, there are more Palestinians there, but most of them are innocent bystanders.

The firing came from within inside the church. The Israelis said they returned fire in the distance. As I say, I can see flames reaching up into the night air here in Bethlehem. Perhaps you can hear a kalashnikov firing there between where I'm standing and Manger Square. There has, of course, been a curfew in effect since about 3:30 or 4:00 this afternoon. But what we're seeing at this point, as I say, is a fire which apparently has been ignited by some of the exchanges of gunfire between the Palestinians and the Israelis. The Palestinians, of course, being holed up since April 2 in the Church of the Nativity and in some of the buildings around there.

Again, perhaps you can hear those rifle shots crackling in the distance. It's actually somewhat quieter now than it was an hour ago when this firefight commenced. It's become more sporadic at this point. At one juncture, a short while ago, the Israelis were firing flares into the night air here trying to get a better illumination of what actually is transpiring around the Church of the Nativity. Of course, the Israelis have that church ringed.

This is the traditional site of Jesus' birth in Bethlehem. Any visitor to this part of the world is more than familiar with it. It's an ancient church, parts of which go back to the fourth century, but it's been added to over the years over and over. And it's now a bit of a hodgepodge, but, of course, it's a very revered site for Christians. As I say, there is a fire in a building adjacent to it. We presume that fire was ignited by the exchange of shots and the duels between the Palestinians and the Israelis here -- Wolf.

BLITZER: Walter, is there any indication that you can see that firefighters are on the way to put out that fire?

RODGERS: Not in Bethlehem, Wolf. The entire infrastructure of the Palestinian community is...

BLITZER: So, there -- yes, go ahead. RODGERS: The infrastructure of the Palestinian community after this latest intifada is all but not nonexistent. Not sure how many firefighters would even answer a call at this particular point. You know, it's just too dangerous to go out there. There's a curfew. I've heard nothing suggesting sirens of a fire engine or anything like that. It just doesn't appear as if anyone is fighting that fire at this distance or at this point -- Wolf.

BLITZER: All right. Walter, stand by. I want to show our viewers once again the videotape of the actual firefight that occurred about an hour or so and lasted for some 45 minutes. Look at this. Very intense fighting that was going on, an exchange of fire, between Israelis and Palestinians inside that Church of the Nativity. You can see the intensity of that exchange. Let's listen in for a second.

Walter, remind our viewers, what does the IDF, the Israel Defense Forces, what do they say sparked this latest exchange?

RODGERS: The Israeli defense spokesman here in Bethlehem has told CNN that they began receiving fire from within the Church of the Nativity. Now, there are some 150, according to the Israelis, or more Palestinians within that church. Most of them are innocent bystanders. I just heard a burst of heavy machine-gun fire. That, of course, is coming from an Israeli armored vehicle.

The Israelis say -- what they're really looking for is 25 to 30 Palestinians who they call hardcore terrorists. These are men that the Israelis say are from Hamas and from Tanzim, the militant wing of Yasser Arafat's Fatah movement. They've been holed up inside that church. Again, there's a very serious firefight as I'm speaking to you down at Manger Square. And some of that is -- sounds like machine-gun fire. It's heavier than an AK-47 or M-16 rifles, which is the standard rifles used by both sides. But we're hearing what now sounds like machine-gun fire from Manger Square and in the general direction of the Church of the Nativity.

Now, the Israelis have so far, at least, shown considerable precaution about shooting in the direction of the church. They said earlier this evening, they were shooting over it. One is not really sure now particularly at night, the trajectory of the guns being fired. But the Israelis say this entire incident started when from within the Church of the Nativity. The Palestinians began pouring fire out on the Israeli positions, and the Israeli positions are largely armored personnel carriers and tanks positioned outside the church in Manger Square and in the surrounding streets here in Bethlehem -- Wolf.

BLITZER: All right, Walter, stand by. And for our viewers who are just tuning in, you are looking at live pictures of the Church of the Nativity in Bethlehem. Where earlier tonight there was a heavy exchange of gunfire between Israelis and Palestinians. And a fire has now erupted near the Church of the Nativity.

I want to being in Charles Sennott of "The Boston Globe," he's in Ramallah, but Charles knows a lot about the Church of the Nativity, having written extensively about it, including a major book. Charles, you're looking at these pictures. How close does this fire appear to be to the actual church?

CHARLES SENNOTT, "BOSTON GLOBE": Well, it looks like it is right in -- if -- I'm watching your images on CNN, and if I can see it -- maybe Walt Rodgers can tell me if I'm right, but it looks like it's in the old part of the church. The oldest part which would date back to the 4th century. Which would be, of course, you know, the real heart of the church, and the real center of this holy, you know, what has to be one of the holiest sites in Christiandom.

BLITZER: So what you're suggesting, Charles, is that the fire is actually inside the Church of the Nativity and not outside in an adjacent building?

SENNOTT: Based on your images running on CNN, it looks to me like that fire is right in the oldest part of the church, near the grotto. That's what it looks like to me from your images. But I'm not there.

BLITZER: Let me bring in Walter Rodgers. And, Walter, did you hear what Charles just reported?

RODGERS: I did. And Charles is a respected colleague. But it appears to me that what I'm looking at by way of fire, and the flames are not reaching as high as they were before. Indeed, they may have been extinguished. But much of that fire appears to have been actually slightly to the east of what Charles calls the nave of the old Church of the Nativity. Now that's a very interesting church historically, because that particular section was shared by the Roman Catholics, the Franciscans, the Greek Orthodox Church, and I believe the Armenians, as well.

And there was an interesting episode some years ago when the the -- the church itself was in such a state of disrepair that the warring Christians sects could never agree what to do about putting it in repair, so the Israelis actually moved in and put a wooden roof on that section of the church. This was not that long ago. There is a wooden roof there. It would be very susceptible to fire. But I'm not seeing anything to suggest that that is what was burning at this point.

From where I'm standing it appeared to be a building somewhat off to the left of the Church of the Nativity, perhaps in the area where the Franciscans had their priory. But, again, we can't be absolutely sure because there's very little illumination here at night. We have at best a half-moon, somewhat past and it's very, very dark here in Bethlehem.

As I say, the flames now appear to have subsided considerably. I am not sure that what Charles was describing as a fire in the nave of the Church of the Nativity itself is actually what we were looking at. If that were the case I think we would have seen much broader flames, because that's a very vulnerable, wooden roof -- Wolf.

BLITZER: All right. Walter, stand by. Walter Rodgers is in Bethlehem. He's a former Jerusalem bureau chief for CNN, obviously knows a great deal about what's in Bethlehem in and around the Church of the Nativity.

Charles Sennott of the "Boston Globe" also knows a great deal. Charles, I don't know if you saw that graphic, that image, the diagram of the Church of the Nativity. Could you -- if we could put that back up on the screen -- tell our viewers where you believe from looking at these pictures this fire may have erupted.

SENNOTT: Well, what I thought I was seeing was the fire in the nave, which would have some of the oldest parts of the church that would go back to Constantine to 333 A.D. When the church was really first built. And that would be a terrible and tragic loss, if that's the case. But Walt is saying that doesn't look like the case. So that's good news if that is true.

But I think what you're seeing here is, you know, the idea of this church caught in the middle of this conflict. And I think a lot of people look at a Christian holy site in the middle of the, you know, Israeli/Palestinian conflict and kind of wonder what it's doing there. I think they wonder sometimes about how that all fits. And people often aren't aware that there are many Palestinians who are Christian. A fairly small percentage, about 2 percent of the population, and a diminishing percentage, as well.

It's a population that has been leaving because of all this conflict. So we see a real diminishing Christian presence there. And I think it's part of this conflict is this great sadness that the Christians feel about, as I say, being very much caught in the middle of this conflict. And this, what we're watching right now, is, you know, just a really tragic example of that. One of the holiest sites of Christiandom, now experiencing a fire. You know, that's just a really, really sad part of this, I think.

BLITZER: Charles, while you're there, I want to show our viewers once again some videotape shot within the past hour, when the exchange of gunfire was most intense. Watch this video, Charles, and I want to get your analysis, precisely where in and around the church it occurred. Look at this.



BLITZER: Charles, from what you could see, and you're seeing the same pictures that we're seeing, where did that fight, where did that exchange appear to be taking place?

SENNOTT: Wolf, I'm watching this on a scratchy image in Ramallah, it's difficult to say. But it looks like that would be, I don't know, it looks like it would be in Manger Square, right in front of the church. But it's very difficult for me to tell, given the images that I'm watching now. I just can't be definitive on that.

BLITZER: And while we're looking at the Church of the Nativity, and as we look at this live picture, give us the history, a little bit of the history of this very important site for Christians around the world.

UNIDENTIFIED MALE: Tell him to get me back on.

SENNOTT: One of the things to know about the church was that it was built in the 4th century. It's modified later on in the 7th century, and it's always been a church that's had to think about intruders. Some of the architecture itself of the church. For example, the very low doorway at the entrance to the oldest part of the church was designed to keep the Persians out, the marauding Persians out of the church. So this idea of a church caught up in the turmoil, and the history of the Middle East, is very much a part of the history of the Church of the Nativity.

BLITZER: And as you point out, there's a small percentage of Palestinians who are Christians. But in Bethlehem, a large number of the Palestinians who live in and around Bethlehem are Christians, aren't they?

SENNOTT: Yes. The Palestinian Christian presence was as much as 15 percent or even maybe 20 percent 100 years ago. Now it's less than 2 percent of the total population. But you're absolutely right, that in the Bethlehem area, what they call the Christian Triangle...

UNIDENTIFIED MALE: Can you get him -- get me back on.


SENNOTT: (UNINTELLIGIBLE) and Beit Jala, you have a much higher percentage of Christians. This is really a Christian area. The Christians are largely...

UNIDENTIFIED MALE: Can you -- what are they saying?

SENNOTT: ... (UNINTELLIGIBLE) there -- so that industry in particular, of course, is devastated by the events of the last year or so. The Christians are suffering greatly economically. And are now seeing a real exodus out, once again, as they've had in many different conflicts. We've seen the Christians leave. So there are a lot of people who are estimating that we are right now seeing one of the more historic outflows of Christians, once again, so that number is going to be diminishing even smaller in the near future.

BLITZER: Charles Sennott of "The Boston Globe," who's written extensively on the Church of the Nativity in Bethlehem. Written a book about the entire church. Stand by. I want to bring you back later as we continue our live coverage.

For our viewers just tuning in, you're looking at a live picture in and around the Church of the Nativity in Manger Square in Bethlehem. Earlier tonight a major exchange of fire between Israelis and Palestinians. Israeli forces on the outside, Palestinians inside. That resulted, exchanges like this, in a fire, in an actual fire, we're told by our Walter Rodgers who is on the scene in Bethlehem, in an area adjacent, near the Church of the Nativity, but not actually inside the Church of the Nativity. A holy site for Christians, the birthplace of Jesus, obviously, a source of great sadness if, in fact, any part of that church would be damaged.

We're also attempting to get some Israeli reaction to what's going on. But I want to bring in Saeb Erakat. He's the chief Palestinian negotiator. He joins us on the telephone.

Mr. Erakat, thanks for joining us. From what you're seeing, and what you're hearing, what can you tell us about this tragic development in Bethlehem?

SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: Indeed, it's very tragic. Wolf, I have been hearing you telling me about the heavy exchange of fire. Actually there was an Israeli attempt to storm the church from the eastern part of the (UNINTELLIGIBLE) church. The Palestinians don't have the bombs, the shells, that would cause the fire that took place.

There is an assault by the Israeli army against the church. I was in contact with the people inside the church about five minutes ago, and really, we really urge the international community to help us just get the fire department to function and put the fire off and the Israelis are preventing this. Tonight we had seen the movement of the six people down to Jericho.

In the president's compound, now the Israelis are exploding and demolishing many parts of the compound, and now in the Nativity Church there was an attempt of the Israelis to solve this problem by storming the church. I don't think that, you know, what you're saying that a heavy exchange of fire, the Israeli army surrounding, is using the machine guns, is using the guns, shells, that's causing this fire. And so far, Mr. (UNINTELLIGIBLE) the mayor of Bethlehem could not even get the fire department to get to the fire and deal with it.

BLITZER: Mr. Erakat, I want to ask you from where you are now, I assume you're in Jericho in your home. How do you know that the Israelis attempted to storm the Church of the Nativity tonight?

ERAKAT: Good question, Wolf. I was in touch with the people inside the church just five minutes ago. And when you say that there is a heavy exchange of fire, you know that it's proportionate use of force in the West Bank, Wolf. You know that the Palestinians don't have tanks around the Church of the Nativity. They don't have gunships. They don't have missiles. They don't have even any of these weapons that are being used to destroy the nativity church.

I really hold the Israeli government fully responsible and we just witnessed the ordeal of the Security Council not being able to send this commission of inquiry with the Israeli blackmail and Mafia style business, so that's what we are saying to Mr. Kofi Annan, if you don't send this team to learn the truth of what goes on here, because of the cover-up, and Israel's trying to hide something, this will give Sharon license for more massacres, for more demolishing. And now he's burning the Church of the Nativity.

And he's totally responsible for what's happening at this church. We thought we would have de-escalation process tonight after Ramallah. But they're escalating in Ramallah, but they are exploding much over the buildings around the compound and now it's the center of the Nativity Church to be burned by the Israeli...

BLITZER: Mr. Erakat, I wanted to alert our viewers. We are standing by. We're hoping to speak with an Israeli government official to present his side of the story shortly. But while I have you, just to recap, the -- I want you to stand by, if you don't mind, Mr. Erakat for a second. Our Matthew Chance is in Ramallah and he's got a major development that he wants to report, as well. Matthew, go ahead.

MATTHEW CHANCE, CNN CORRESPONDENT: Wolf, that's right. A major development, indeed, here in Ramallah. We've managed to find our way inside the compound of Yasser Arafat. I can confirm to you that Israeli forces have completely withdrawn from this compound for the first time since the end of March, opening the way, of course, for Yasser Arafat and the Palestinian leader to emerge from this confinement here in Ramallah into relative freedom of the West Bank and the Gaza Strip, or at least those areas which are still under Palestinian control.

I'm being greeted with scenes of joy and celebration inside this compound. Members of Yasser Arafat's security forces have come out into the very badly damaged area of the compound with a crumbling buildings, everywhere I look, chanting slogans in support of Yasser Arafat saying they will always protect him. Shouting that in Arabic. Yasser Arafat himself has yet to emerge. A lot of excitement in the air here. A lot of people with Kalashnikov rifles pointed to the sky chanting slogans in support of the Palestinian leader, Wolf.

BLITZER: Is there any indication, Matthew Chance, and it's now 1:15 a.m. in the morning in Ramallah, is there any indication that Yasser Arafat is about to leave that headquarters building that's been surrounded, obviously, for a month now?

CHANCE: Well, the indication -- well, I don't know if he's going to leave or not. We'll have to wait and see about that, Wolf. Certainly I imagine there is a lot of pressure being put on him now and he's going to want to do this, to actually emerge from the buildings of that compound, to come and address the many hundreds of people that are gathering here, that are being drawn towards this compound, to see the man, you remember, who has grown hugely in popularity amongst his own people since the beginning of this.

Previously he was considered to be a bit of -- his political standing has been weakening, his regime was considered to be corrupt. After these weeks of siege here in this compound, his standing has grown, his stature, not just in the Arab world but more specifically with his own Palestinian people, Wolf. So we are expecting to see something of Yasser Arafat. What he will do in the hours ahead, in the days ahead, we just don't know at this stage.

BLITZER: So basically the noise that we're hearing around you, Matthew Chance, that is noise that involves joy and celebration that the Israelis are pulling out of Ramallah. Is that right?

CHANCE: That's right. Songs are being sung here in this compound. Flags of the Palestinian national authority are being held high, along with Kalashnikov assault rifles. People are hugging each other, kissing each other, many people here remember it's not just Yasser Arafat, it's been several hundred people, including a number of international peace activists who dodged the bullets to run inside this compound in a show of support for the Palestinian leader.

So this is a moment here of great celebration, at least. It's also a moment of great relief. Not just for the people who have been cooped up inside the compound, but also for the people in the immediate vicinity of the compound. Remember, since the Israeli forces were here, there's been a curfew in the area around this compound. Many thousands of people have been affected by that, unable to live their normal life. So a great sense of relief, undoubtedly. Certainly a great sense of joy here in the compound itself -- Wolf.

BLITZER: And Matthew, stand by, I assume that you and the others there are awaiting some sort of statement, perhaps, remarks from the Palestinian Authority president who might emerge and speak to the crowds that have gathered there. Is that right?

CHANCE: Certainly that's the basis on which we're working here. We have a live capability which we're scrambling to set up now, Wolf, in anticipation of that. I haven't had time to speak to any Palestinian officials. I have literally just walked in here and got on the phone to you. I haven't had time to find out exactly what the schedule is for this evening. Although, everybody here is anticipating some kind of announcement, some kind of address from the Palestinian leader himself, Yasser Arafat.

BLITZER: All right, Matthew Chance. Go ahead, go do your work. Our crews will be attempting to establish a live picture from inside the Ramallah headquarters of Yasser Arafat, once he emerges, we hope, obviously that we'll be able to bring those remarks to our viewers in the United States, and, indeed, around the world.

I want to go back to Bethlehem. In marked contrast to what we've been seeing and hearing from Matthew Chance in Ramallah, a different story unfolding in Bethlehem tonight. Gunfire and a fire near the Church of the Nativity. Our Walter Rodgers is on the scene. He has additional information -- Walter.

RODGERS: Yes, Wolf, it appears as though the fire in the vicinity of the church of the nativity in Bethlehem has been extinguished. We should also say some of the shooting has died down, as well. The fire, again, within adjacent I believe, to the Church of the Nativity, not the nave itself. I can't be absolutely sure of that, because it's very dark here in Bethlehem, and I'm standing about at an elevated position about half a kilometer away. We can't get any closer because of a curfew, and also because of the fact that there is shooting in that area and we've been told to stay away.

Having said that, it does appear that the fire which was near the Church of the Nativity has been extinguished. It was not a great conflagration. A short while ago, interestingly someone inside the church, and there are priests and nuns inside the church, with the Palestinians in there, as well, someone inside the Church of the Nativity began tolling the bells inside the church. Bells you often hear rung out on Christmas eve from that very bell tower.

Again those bells have quieted. The guns have quieted. It does appear that whatever fire there was, which we were seeing earlier, not a great conflagration, but very close to the Church of the Nativity, that appears to have been extinguished -- Wolf.

BLITZER: We don't know, Walter, where that actual fire was, what kind of building. And while I -- while you think about answering that, I don't know if you're close to our photographer, who is showing us these live pictures from Bethlehem, but if you are, maybe you could tell him or her to zoom in a little bit closer to where that fire had been so we can get a closer shot of the scene near the Church of the Nativity.

But go ahead, what kind of buildings, small buildings, surround the Church of the Nativity that might have been damaged in that fire?

RODGERS: Well, there are many church-related structures in that area. A monastery attached to it, the Franciscans have a building attached to it. The Greek orthodox have their monasteries around it and in it. Of course everyone over the centuries has sort of glommed on to the original site, which is, of course, the traditional site of Jesus' birth and many religions have tried to build onto the church, and stake their claim to that piece of holy ground.

Having said that, what I think I was seeing was somewhat to the left of the knave of the Church of the Nativity, which I believe is where the Franciscans have their monastery, their priory, again, attached to the compound. But I'm not sure it was the knave itself, the most sacred part of the structure. And there was some effort, perhaps within the church, but perhaps the Israelis have a huge crane down there, but again it's very difficult to say if that crane was involved in the extinguishing of the flames.

The Israelis, I should say, have been very, very careful about all of this. I know one of your other guests suggested to the contrary. But the Israelis appreciate the sanctity of that church to Christians around the world and they have moved very slowly. Indeed, the Israeli army spokesman said that when this firefight began around midnight local time. It was Palestinians within the church pouring fire out onto the Israeli positions, some of the armored personnel carriers and tanks.

The original fire, again, according to the Israelis, coming from within the church, out towards the Israeli positions. And as I say, everything I've seen here suggests the Israelis have been more than careful to protect that shrine -- Wolf.

BLITZER: Walter, we see a little glow in the center of our screen around the Church of the Nativity. I don't know if you have access to our pictures. But is there any indication that that glow that we've circled now is what once was that fire?

RODGERS: Wolf, I'm not sure exactly what you're looking at. But as I look out over the area, yes, I can see now see what you're looking at. It's the same thing I'm looking at. But that's considerably in the distance, I believe, beyond the Church of the Nativity. And I think what we may have here is a fire that was set by some of the tracer shells which have been fired, and there have been tracer shells streaking through the sky for the past hour or so.

Again it's quiet now. The fire that you're looking at is, I believe, well beyond the Church of the Nativity and it could have been ignited by tracer shells which were used earlier in the evening. Again, as I look at it here and I'm standing out on a balcony about seven or eight floors up, overlooking this entire area, that particular glow you're looking at appears to be a fire well beyond the compound itself of the Church of the Nativity. And my guess, and this is just surmised, is that because of the hot tracer bullets that were used, some additional areas were ignited.

BLITZER: Walter, Saeb Erakat, the chief Palestinian negotiator, told us on the phone just a few minutes ago that he had been on the phone with individuals inside the church and was told that the Israelis had launched an assault on the church tonight that resulted in the exchange of fire and in turn the fire near the Church of the Nativity. You spoke with Israeli military officials earlier in the evening. What did they say to you?

RODGERS: What the Israelis have said was that the initial firing began from within the church and it was gunfire, rifle fire, coming from within the church compound out to Israeli positions beyond. Remember that everyone inside that church by and large, with the exception of a few clerics, are Palestinians, and they hardly come to this as objective observers in it.

I think you have to weigh all the testimony in this. No one is at any point in this thing coming without some prejudice to this case. I was talking to some of the men who were inside the church yesterday, and who were released, and they were, of course, swearing that the Israelis had been shooting inside the church, and smashing statues of the Virgin Mary, and icons and so forth.

But again they clearly had an axe to grind, as perhaps did the person with whom Saeb Erakat was speaking. At the end of the day when this is all finished, and it will be finished in a week or two weeks, perhaps more, however long it takes, there's going to be a lot of he said, she said in all of this. And both sides are going to blame the other for this incident tonight; the fire in the region, for the shooting that occurred, and for the damage which has certainly taken place inside that ancient church, and everyone acknowledges there's been considerable damage.

The Palestinians, of course, are blaming the Israelis. But it's going to take a very real inquiry to get to the truth both in terms of who started this firing tonight and what the Israelis actually did and what they didn't do. But, again, the people Saeb Erakat were citing were hardly what you would call unbiased observers, because they're the Palestinians inside the church with the guns.

BLITZER: Walter, has the gunfire stopped now? Are you hearing any more shots? RODGERS: Not currently, Wolf. About 15 minutes ago there were some red tracer bullets streaking across the sky here in Bethlehem. This started about midnight local time. There was a skirmish and it got heated, then it would die off, and the Israelis would fire flares into the air.

Again but the Israelis know how very fragile that church is, both in terms of its -- something just went off by the church itself. Sounded like a flare. A loud explosion. But, again, it could have been a concussion grenade. It could have been a stun shell. I'm not really sure. We just can't tell if the Israelis are inside that church, as the Palestinians claim, or not -- Wolf.

BLITZER: Well, I don't know if Saeb Erakat said they were actually inside the church. He said they launched an assault and Palestinians fired upon them as they did that. But it was unclear from what Mr. Erakat was saying that they actually entered the Church of the Nativity where this standoff of course, has continued now for more than a month.

The negotiations, Walter, actually seemed to have been making a tiny, tiny bit of progress over the past few days, as Israelis and Palestinians attempted to work out some sort of arrangement. Am I wrong on that?

RODGERS: No, you're actually quite correct, Wolf. Remember that yesterday 26 Palestinians were allowed to leave the compound, and they left the compound, as you say, as a result of the negotiations between Palestinian Authority officials and Israeli army officials.

The Israelis are eager to see the Palestinians leave that church. They want them out of there. But what they really want is the 25 or 30 hard-core Palestinian fighters who they say are inside the church. They say some of them are Hamas fighters, some of them are Tanzine, which is a militant branch of Yasser Arafat's Fatah Movement.

These are people who the Israelis say are responsible for perpetrating attacks on Israeli citizens in this area of Jerusalem. But, again, you're correct, there was progress in getting some of the people outside the church. Over 100 are said to remain inside. The key in all of this, of course, has been Arafat's confinement in Ramallah.

No one really believed that there would be a major breakthrough here at the Church of the Nativity. That is to say, an end to the standoff here, until there was an end to Yasser Arafat's confinement in Ramallah about 30 miles to the north of here. Arafat's people are controlling the negotiations here in tandem with the Israelis, and it was very clear that no one was going to see an end to the siege in Bethlehem or the standoff in Bethlehem until the siege of Arafat's headquarters in Ramallah was resolved.

Now, there's been a resolution of Arafat's situation up there, and that has given expectation before this evening's firefight, that has given expectation to considerable new momentum in the coming week, perhaps to an end of the standoff here at the Church of the Nativity where, again, in Bethlehem, Palestinians have been holed up, they've taken over the inside of the church since April 2, and they're negotiating, as you point out, with the Israelis.

There had been progress in the past few days. There was a belief that this was moving toward resolution. But there was always the unwritten understanding that it wouldn't be resolved until after Arafat was freed --Wolf.

BLITZER: Walter, stand by. I want to go back to Ramallah now. We've got live pictures from inside the compound. You can see this live picture, it's frozen for a second. But we have a live picture of inside the Ramallah headquarters of Yasser Arafat. Israeli tanks, military personnel left that area earlier today following an agreement with the Palestinians brokered by the United States and others.

Here, once again, we are seeing live pictures from inside the Ramallah compound awaiting formal remarks we are told, from the Palestinian leader Yasser Arafat.

Earlier today six Palestinians wanted by Israel were transferred to a jail in Jericho on the West Bank under supervision from U.S. and British authorities. They'll be in jail, guarded by Irish prisoners, as we're told.

The situation in Ramallah, standing by, obviously, for remarks from Yasser Arafat. In Bethlehem earlier tonight, an exchange of fire. Israeli officials say firefights broke out in and around the Church of the Nativity.

This is a videotape of what occurred -- a very heavy round of explosions that apparently resulted in a fire near the Church of the Nativity in Manger Square. And that fire is now out. We're told by Walter Rodgers that the situation in Bethlehem appears to be relatively quiet right now. The fire has been put out.

One final development, earlier today the U.N. Secretary-General Kofi Annan announcing he's disbanded a proposed fact-finding mission from the U.N. to go into the Palestinian refugee camp in Jenin to investigate Palestinian allegations. Denied by Israel, of a massacre of Palestinians in Jenin.

We're going to continue to follow all of these developments. I'm Wolf Blitzer in Washington. Lou Dobbs "MONEYLINE" will pick up our coverage shortly.


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