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ANDERSON COOPER 360 DEGREES

Middle East on the Brink; Western Wildfires

Aired July 13, 2006 - 23:00   ET

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


ANNOUNCER: Tonight, sitting in for Anderson and reporting from the CNN studios in Washington, here's John Roberts.
JOHN ROBERTS, CNN ANCHOR: And thanks for joining us. It's 6:00 in the morning in Haifa and Beirut. Another day of attacks and bloodshed is just beginning.

This is the worst violence the Middle East has seen in years, and that speaks volumes. Israel is fighting a two-front war, as the world and the White House figure out what to do.

Here's how we got to where we are. What began earlier this month with Palestinian rocket attacks from Gaza and a major Israeli incursion into the territory escalated in Segway north. When Shiite Hezbollah terrorists crossed over from Lebanon, kidnapping two Israeli soldiers and taken them, Israel fears, to Iran.

That was followed by air strikes and shelling. First on southern Lebanon and then today against the Beirut airport. In retaliation for that, rockets began falling on Haifa, Israel's third largest city.

Israel meantime is bombing roads to Syria and blockading Lebanese ports.

Iran is leveling threats. And so far dozens of civilians, mostly in Lebanon, have died.

Also as we speak, there are Americans in the crossfire. Caught in Lebanon. Tonight the U.S. government says it is examining all options to get them out. We'll start the hour with that and the air strikes.

CNN's Alessio Vinci is in Beirut, where it has been an extremely long night, and joins us there.

(BEGIN BREAKING NEWS)

Alessio, what's the latest from where you are?

ALESSIO VINCI, CNN CORRESPONDENT: Hello, John.

Well, just before daybreak here, Israeli war planes targeted several locations in the outskirts of Beirut and primarily in the southern area of Beirut and Shiite Muslim area there, also home to the Hezbollah headquarters, as well as of course it is believed the Hezbollah Leader Hassan Nasrallah. We understand that two key bridges in the southern outskirts have been destroyed. We are seeing several local television stations broadcasting some footage there from earlier this morning. I understand from those pictures that there are some casualties. I've seen at least two people injured, being carried away by others.

This attack was followed by two more strikes very close to this position here, the bureau. So closely, in fact, the entire building shook. We did not hear planes flying overhead at that time, indicating perhaps that Israel was also striking at the targets here in the capital, using its gun boats that are enforcing a blockade on Beirut's ports.

So all this has been a very long night, John. And this following, of course, already a very long 24 hours.

ROBERTS: Alessio, you've been on that balcony as long as I can remember. What have the last 24 hours been like there?

VINCI: Well, it began basically 24 hours ago with Israeli jets firing first at the airport in Beirut, basically damaging all three runways of Beirut International Airport, forcing incoming flights to be diverted to Cyprus. Passengers here obviously remained stranded.

Several hours later Israel targeted a Al-Manar television station, which is a television station controlled by the Hezbollah militia leader.

And several strikes have continued also in the southern part of the country where yesterday, Israel time, throughout the day there were at least 50 civilians, according to Lebanese sources here, that have been killed, including 10 members of an entire single family as a result of those strikes.

So, it has been a very, very intense and escalating day here. And judging from how the second day started, it's going to be another intense day coming up.

ROBERTS: All right, Alessio Vinci, live for us from Beirut. Thanks very much, Alessio.

On next in northern Israel where many people spent another night in air raid shelters in Haifa. That's about 30 miles south of the border with Lebanon.

CNN's John Vause has been up all night watching what's been going on there.

John, what can you tell us?

JOHN VAUSE, CNN CORRESPONDENT: Well, John, it is Friday morning here now, the start of the Jewish weekend. And with that comes the realization that Haifa could now be well within range of Hezbollah rockets.

The Israeli military is warning the 300,000 people who live here that they should stay close to bomb shelters and other safe rooms.

This is a mixed city of both Jews and Arabs. It is also Israel's major port facility. But the big concern for Israeli authorities is to the east of the city. A very large oil refinery complex which is now also considered to be a very large target.

It was early Thursday evening when two Hezbollah rockets reached this coastal city. The first time that Hezbollah rockets have traveled so far into Israeli territory. No one was hurt during that attack. But the Israeli government described it as a major escalation.

Hezbollah, though, denies firing those two missiles, but has claimed responsibility for more than a hundred other rocket attacks on Israeli towns to the north of here, killing at least two people and wounding dozens of others.

And as Israel escalates its military offensive across Lebanon, residents both here and Haifa and to the north have been told to expect more attacks in the days to come -- John.

ROBERTS: John, do we know anything about these rockets that landed in Haifa? Are they Katusha rockets that had been modified by Hezbollah? Or did they come from somewhere else? How did they suddenly get rockets that can travel that far?

VAUSE: Well, that is one of the big questions for the Israeli army, the Israeli authorities right now. There are a number of possibilities.

It could be a new type of missile which Hezbollah has now in its arsenal. Or possibly Hezbollah modified Katusha rockets to extend the range. Normally Katushas can travel about 12 miles. As you said, Haifa is at least 30 miles away from the border with Lebanon. Regardless the Israeli government says it is a dangerous escalation -- John.

ROBERTS: All right, John Vause, another long day beginning there in Haifa. Thanks very much.

President Bush today tried to walk a very fine line, voicing concern for Lebanon's fragile government, while trying to backing Israel's right to self-defense.

The president is in Europe, where calls for Israeli restraint are growing louder. And plans are in the works to send a European Union peace envoy to the Middle East. It won't be the first time. And as recent history shows, it may not be the last.

Here's CNN's Paula Hancocks with that story.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): June 22nd, their first embrace. And it looked like a warm one. Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas, at an amicable photo op. They pledged to meet again within two weeks to talk peace. Though Olmert warns that real negotiations can only happen when violence ends.

Then just a couple of days later, good intentions are shattered. Militants with Hamas, the group that now controls the Palestinian government, killed twos Israeli soldiers and kidnapped a third, Corporal Gilad Shalit.

Israeli tanks roll into Gaza to find the missing soldier. Tanks that had left only a year before, as Israel took a first hopeful step towards a permanent settlement with the Palestinians. How distant that seems now.

UNIDENTIFIED MALE: The Israelis are doing nothing but murdering, butchering children and women in their bedrooms and their homes, showing institutions that are predicated to development, negotiations and peace.

HANCOCKS: In the early hours of Wednesday, Israeli forces pushed deeper into Gaza in the search for their missing soldier. But an even bigger problem is about to erupt.

Militants with Hezbollah, the Islamic group that controls much of southern Lebanon, ambush and Israeli patrol on the border there, killing eight soldiers, abducting two more. The motive, the same as Hamas. Using soldiers as a bargaining chip to get prisoners released from Israeli jails.

It did work once before. In 2004, more than 430 Arab prisoners were released in return for one Israeli businessman and the remains of three Israeli soldiers killed by Hezbollah.

But this time Israel says it is not negotiating. Even for soldiers it believes are still alive. And it wants to drive Hezbollah from its border once and for all.

SHIMON PERES, ISRAEL VICE PREMIER: Even as Hezbollah would like to come back, they will discover that they cannot come back to ambush, to kill, to provoke, to destroy every ounce of good will.

HANCOCKS: Good will, never plentiful here, is now completely gone.

Israeli retaliation has targeted airports, bridges, and Hezbollah. More than 50 Lebanese have already lost their lives, leading to the inevitable retaliation from Hezbollah. Killing, wounding and terrifying Israelis. Now, with the missiles flying, calls for restraint and mediation, a U.N. team is on the way.

(On camera): But if history teaches us anything in this region, it's that mediators are rarely successful. It's only once the fiercest fighting is over and the players are willing to talk, that even just a cease fire becomes possible.

Paula Hancocks, CNN, Jerusalem.

(END VIDEOTAPE)

ROBERTS: It's safe to say there have been better times than now to be an optimist when it comes to the Middle East.

CNN's Wolf Blitzer knows well. He spent years covering the region for the "Jerusalem Post," and now is anchor of CNN's "SITUATION ROOM." We spoke earlier today.

(BEGIN VIDEOTAPE)

ROBERTS: Wolf, you spent an awful lot of time in that region. What are your impressions of what you're seeing over there? Unfortunately, I see really horrible things going on right now, with no immediate end in sight. It looks like the situation could really escalate into a much broader kind of confrontation. I'm not very optimistic. I hope (UNINTELLIGIBLE) prevail.

WOLF BLITZER, HOST OF "SITUATION ROOM": Right now, a lot of U.S. officials, as you know, John, they're pointing the finger at Syria and Iran. They are thinking Iran is trying to change the subject from its own nuclear program. They're under enormous pressure to curtail that. And they are trying to set the stage by using their influence with Hezbollah and Hamas to cause this diversion, in effect.

But, you know, these situations that could start modest, have a tendency to get out of control. And I see that potential right now. I hope though, the situation calms down.

ROBERTS: U.S. Secretary of State Condoleezza Rice said in Germany today that she urges restraint on the part of Israel as far as its response goes.

When you say that this could get even bigger, are you talking about in Lebanon? Or could it spread outside of Lebanon's borders, potentially to Syria?

BLITZER: I could see that happening in Syria. The Israelis launching air strikes against some selective targets in Syria. And the question then has to be asked, what happens next? What do the Syrians do? What do the Iranians do? What does the rest of the Middle East do as a result of that?

I could easily see the air strikes that are now focusing in on the Beirut airport. This Beirut to Damascus highway, this major thoroughfare between Syria and Lebanon -- I could see that escalating. And, you know, once you take that first shot, you better be prepared for some more.

ROBERTS: No one is saying what they could do. But certainly Mahmoud Ahmadinejad, the president of Iran, has made threats. He said a little while ago. Quote, "If the Zionist regime commits another stupid move and attacks Syria, this will be considered like attacking the whole Islamic world and this regime will receive a very fierce response."

Wolf, as you said, there are some people who believe that both Syria and Iran are behind the Hezbollah kidnappings, perhaps even the Hamas kidnappings.

What do you make of this threat from Ahmadinejad?

BLITZER: I think the Israelis are taking it very, very seriously. They've seen in terms of their own existential threat, the major problem for Israel being Iran, especially if it were to develop a nuclear bomb. They see the Iranian influence with Hezbollah, with other radical groups. And they are very worried about it. I think they take that kind of threat from Mahmoud Ahmadinejad very seriously.

ROBERTS: The United States wields an awful lot of influence with Israel. The president of the United States has voiced his concern that perhaps the moderate prime minister of Lebanon could be destabilized or weakened because of what's going on in Lebanon. Is there anything the United States can do besides complain about it publicly to get Israel to show restraint, to try to put this genie back in the bottle?

BLITZER: This involving Israel, the Lebanese, the Palestinians, the Syrians et cetera, it's clearly dominating everyone's attention right now. And there's a lot the United States can do behind the scenes as well as publicly. The question is how actively does the Bush administration want to get involved? In year's past, crises like this would see a secretary of state or a special envoy. At least go over to the region and try to calm things down.

I haven't seen that decision yet, but I wouldn't be surprised to see one top U.S. official peal off from the president's G8 summit at some point and head toward the region.

ROBERTS: Well, Wolf, we know you are right most of the time, but in terms of escalation, we hope this time you are wrong. Thanks very much. Appreciate it.

BLITZER: I hope I'm wrong too.

(END BREAKING NEWS)

(END VIDEOTAPE)

ROBERTS: A quick footnote now on American clout. Along with Egypt, Israel has long been one of the top two recipients of foreign aid from the United States. Here's the raw data.

In 2006 the United States gave nearly $21 billion in foreign aid to more than 100 countries. Nearly $2.5 billion of that total went to Israel. Of that, two and a quarter million was military paid.

On the brink of war, the war of words. Two very different sides of the conflict -- the Israeli and Syrian ambassadors to the United States. And adding to their arsenal, Hezbollah's weapon of choice -- a new breed of rockets that can reach deep inside Israel, when 360 continues.

(COMMERCIAL BREAK) ROBERTS: When we talk of what's happening in the Middle East, we tend to use broad strokes. Tonight, though, we want to take you up close, into the heart of the battle.

CNN's Tom Foreman breaks the fighting down for us, block by block.

(BEGIN BREAKING NEWS)

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: You simply have to bear in mind what a small area we are talking about right now. The entire area of Israel and Lebanon together are only about the size of the state of Maryland. Only about 80 miles between two of the major cities we are involved with here. The border, 40 miles and there's been all sorts of activity around it.

Hezbollah operates in the southern part of Lebanon. And effectively, Israel is trying to set up a ring of fire around them. There's a blockade aid out in the Mediterranean Sea. They attacked the airport on the northern end, knocking out three runways. Over here they knocked out a fuel station by bombing that, making it very difficult for them to get supplies in. And most recently later on today, they hit the road to Damascus. A major road there. And they are bombing all in this area where Hezbollah calls home, trying to put them into a real bind.

It's been the other way as well though. Bombs have been launched into Israel, and to Nahariya, Safed, and importantly, all the way down to Haifa. That's a big issue because Haifa has been pretty much off limits and considered too far away. That's why there's been so much concern.

Why does this matter to Americans? It's very simple. Because Israel is a long-time ally of America; and a big ally of Hezbollah is Iran. There's already tension with this nation. And as this goes on, there's a greater chance of bringing greater powers into a greater conflict -- John.

(END VIDEOTAPE)

ROBERTS: Tom Foreman.

What those maps don't show are Americans. Many of them caught in the crossfire of what could be the start of a full-blown war.

CNN's Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT: Bombed out runways at Beirut International Airport, now forcing the Pentagon to plan for a bad scenario. How to evacuate 25,000 Americans living in Lebanon without using the airport. If an evacuation were ordered, it could involve sending in Marines by helicopter from ships in the Mediterranean. They would try to get the Americans to a secure location for evacuation.

And the worst part of that scenario, Marines could have to do it while Israel and Hezbollah are exchanging bombs and rockets. And Hezbollah is believed to be working with a new generation of rockets.

In striking Haifa for the first time ever, a city with a strategic port and an oil refinery, the Muslim militant group shows it can fire nearly 40 miles inside Israel. Hezbollah has denied that attack. All of that changes the military equation in Israel's fight with Hezbollah.

UNIDENTIFIED MALE: They have more than 10,000 rockets. Medium range and longer range. And Haifa, which is about 50 miles or so, 50 miles in the region is a strategic range. So for the Hezbollah to do that, it's a major installation.

STARR: Analyst says it's a warning sign that a Bush administration nemesis may be behind Hezbollah's increased military capability.

UNIDENTIFIED MALE: Iran, which is one of the manufacturers of these rockets, Hezbollah's primary source for these rockets, has been doing a lot of work over the last 20 years or so to improve the quality of these rockets, their reliability, their accuracy and their range.

STARR: As Israel holds Lebanon libel for Hezbollah's actions, will Israel's high tech war planes, bombs and artillery, be enough to stop Hezbollah?

UNIDENTIFIED MALE: The nightmare scenario for the Israelis for several decades now has been that Hezbollah would basically wage a war of cities firing hundreds if not thousands of these rockets across the border.

STARR (on camera): The Bush administration sees Syria and Iran behind Hezbollah's attacks as well as being behind the insurgency in Iraq, making this a dangerous and crucial moment for the United States.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

(END BREAKING NEWS)

ROBERTS: Ahead on 360. What may happen tomorrow. What is Israel planning to do next? Is a ground invasion a possibility? I'll ask the Israeli ambassador to the United States. And getting all the angles, we'll hear from Syria's ambassador on the blame his country is getting.

Plus, here in the states, massive fires in California and folks now being forced to leave their homes.

The latest when 360 continues.

(COMMERCIAL BREAK)

ROBERTS: There were some of the most alarming words today concerning the battle in the Middle East. This afternoon, Daniel Ayalon, the Israeli ambassador to the United States, called the recent round of Hezbollah attacks, quote, "a major, major escalation."

Tonight I had a chance to talk with Ambassador Ayalon about the conflict.

(BEGIN VIDEOTAPE)

(BEGIN BREAKING NEWS)

ROBERTS: Ambassador Ayalon, Secretary of State Condoleezza Rice said tonight that it is extremely important that Israel show restraint in its response. Is that a request that you will heed, sir?

DANIEL AYALON, ISRAELI AMBASSADOR TO THE UNITED STATES: Well, absolutely. We have the highest respect for the secretary. But she also said, John, that it is Israel's right to defend itself. And right now we are really at war, which was imposed on us Hezbollah, the terrorist organizations in the north.

And it is time that Israeli citizens will enjoy what they deserve. And it is to be free of rockets, free of terror, free of violence. And this is exactly what we are doing right now.

ROBERTS: But, Mr. Ambassador, the European Union has expressed concern at what it calls a disproportionate response to the kidnappings by Hezbollah. What do you say to that?

AYALON: Well, I think this is totally wrong. First of all, you have to look at what's happening on our side of the border. When we have half of the population of our northern part of the country in bomb shelters, this is, I think, is disproportionate.

When we have Hezbollah terrorists crossing the international border, kidnapping and killing soldiers, this is a disproportionate. This is a provocation. This is an escalation. This is what has caused the entire crisis which we are in right now.

ROBERTS: So how far does this go and how do you stop it from going too far?

AYALON: Well, I don't think there is too far here. I think what we have to achieve is to bring about or restore, peace, relative peace, common stability. And the only way to restore it is by pushing back the Hezbollah. So they are not smack dab against our border provoking and attacking and also to deny them the capabilities of terrorizing the entire northern part of Israel by launching their rockets.

ROBERTS: So is that an indication, Mr. Ambassador, that Israel may seek to reoccupy southern Lebanon?

AYALON: No, not necessarily. I think there are other means of operations. We certainly do not want to return to Lebanon after we have pulled out.

ROBERTS: The Iranian President Mahmoud Ahmadinejad issued a very stern warning to Israel, saying do not attack Syria. If you do, that will be seen as an attack on the entire Islamic world and will be met with a fierce response. What is your response to that threat?

AYALON: Well, the response is such. This is not the first irresponsible remark from this president. He has been relentless in trying to deteriorate the entire region into the brink or abyss of violence in war. It certainly is serving Iranian's interest right now to push the entire area into an unstable situation, volatile situation, so they can continue to work on their nuclear program.

ROBERTS: You believe they are trying to deflect attention away from nuclear program at this weekend's G8 summit and that's why Hezbollah did all of this?

AYALON: Absolutely. That is one reason I believe they are doing it now. And Hezbollah, as you know, is a proxy of Iran. Their masters are in Tehran, also in Damascus, unfortunately. But another reason is, which is not less important or not less dangerous, is the Iranians are trying to push ahead their agenda, their radical agenda of the most Islamic -- of the most radical Islam and of terrorism and of destabilization into the entire Middle East and beyond.

ROBERTS: Well certainly, Mr. Ambassador, we do hope that this conflict does not go regional, as many people believe that it will. Thanks very much for joining us. Appreciate it.

AYALON: Thank you.

(END VIDEOTAPE)

ROBERTS: Both Israel and the United States say Syria is partially to blame for the crisis happening now in the Middle East.

Earlier I spoke with Syria's Ambassador to the United States Imad Moustapha.

(BEGIN VIDEOTAPE)

ROBERTS: First of all, if you would, sir, let me let you to listen to this statement that President Bush made today in Germany just before he is departing for the G8.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Syria needs to be held to account. Syria is housing the militant wing of Hamas. Hezbollah has got an active presence in Syria.

The truth of the matter is, if really want there to be the situation to settle down, the soldiers need to be returned. And President Assad needs to show some leadership toward peace. ROBERTS: So, Ambassador Moustapha, the president firmly putting the ball in Syria's court to say you need to show leadership, saying that your country is partly responsible for what happened. What do you say?

IMAD MOUSTAPHA, SYRIA'S AMBASSADOR TO THE UNITED STATES: I would say this has become a stereotypical cliche of this administration. Whenever there is a problem in the Middle East, immediately the U.S. government would blame Syria. But by doing this, the U.S. administration is losing credibility.

In the past this was not the case. In the past, whenever there would be a problem in the Middle East, the United States government would engage in the Middle East diplomatically and they would help all parties find a solution.

ROBERTS: Is it not true, sir, that Syria holds a lot of influence with Hezbollah and Hezbollah does to some degree, Syria's bidding?

MOUSTAPHA: Look, saying that Hezbollah is doing Syria's bidding is a story that only circulates here in Washington, D.C. Even in Tel Aviv they don't believe this. It's just the Israeli spin version of the evidence.

Actually Hezbollah is part and parcel of the Lebanese social fabric. Hezbollah is represented in the Lebanese government and cabinet ministers. It's also present in the Lebanese parliament. They have their presence in Lebanon. They are Lebanese.

ROBERTS: Well, do you support or not support, Ambassador Moustapha, what happened, this cross-border raid that Hezbollah engaged in to kidnap the Israeli soldiers? And should Hezbollah give the soldiers back to try to deescalate the crisis there?

MOUSTAPHA: Hezbollah has said this publicly. Israel today holds Lebanese prisoners that were abducted and imprisoned by the Israelis illegally. Yesterday Hezbollah has called for Israel to engage in negotiations because they want to exchange their prisoners with the Israeli prisoners.

(CROSSTALK)

ROBERTS: Right, and Israel is worried that if they engage in those negotiations, that's just going to encourage Hezbollah to do this again.

MOUSTAPHA: This has happened before. Whenever the Israelis is captured and imprisoned Lebanese citizens, Hezbollah engaged in negotiations with Israel. The last time it was through the German mediation and they exchanged prisoners. I think this is a very fair proposition.

ROBERTS: One more quick question, if I could. Iranian President Mahmoud Ahmadinejad said that if Israel were to attack Syria, it would be an attack against the entire Islamic world and would be met with a quote, "fierce response." What would Syria do if Israel attacked it?

MOUSTAPHA: Let me first say that I hope nothing will happen because Syria does not want the situation in the Middle East to escalate towards violence and more war. However, every action in the world provokes and creates a reaction. This is the normal low of life. This is on one hand. On the other hand, possibly, what Ahmadinejad, the Iranian president was saying, is that if Israel attacks Syria, then -- but only Iran, the whole Arab and Islamic world will feel very, very seriously about what's happening.

ROBERTS: Ambassador Moustapha, I think the last thing the world wants to see is a conflict raging in the Middle East. We're keeping our fingers crossed.

Thank you, sir. Appreciate your time.

MOUSTAPHA: Thank you very much.

(END VIDEOTAPE)

(END BREAKING NEWS)

ROBERTS: In a moment, how President Bush is handling the crisis and how he is dealing with what his defense secretary once called old Europe.

Later, in the state of California, a state of emergency. A report from the wild fires, when 360 continues.

(COMMERCIAL BREAK)

ROBERTS: President Bush is in Germany, one of the European Union countries that today criticized Israel's attack on Lebanon. While the president called for restraint, he also strongly supported Israel's right to defend itself.

CNN's Ed Henry reports.

(BEGIN VIDEOTAPE)

(BEGIN BREAKING NEWS)

ED HENRY, CNN CORRESPONDENT (voice-over): Chancellor Angela Merkel, trying to make the visiting Texan feel at home with a German barbecue, First one to carve up the boar that's been roasting for hours.

BUSH: Thank you. I'm thrilled to be here. Thank you.

HENRY: But in advance of the G8 summit, President Bush is trying to shed the tough guy image, playing nice on the world stage, while the White House is ripping Iran and Syria for escalating violence in the Middle East.

BUSH: It's really sad where people are willing to take innocent life in order to stop that progress. As a matter of fact, it's pathetic.

HENRY: The president still tried to play the role of peacemaker and find some middle ground.

BUSH: Israel has a right to defend herself. Every nation must defend herself against terrorist attacks and the killing of innocent life. Whatever Israel does though, should not weaken the government in Lebanon. We are concerned about the fragile democracy in Lebanon.

HENRY: And the president sounded down right deferential to the United Nations when pressed on how long the security council has to sanction Iran over its nuclear program.

BUSH: They got plenty of time. I mean, The U.N. Security Council, they got time to react.

HENRY: Compare that to the president in March of 2003, pressed on whether he had to wait for the U.N. before launching the war in Iraq.

BUSH: I'm confident the American people understand that when it comes to our security, if we need to act, we will act. And we really don't need United Nation's approval to do so.

HENRY: But now on hot spots like North Korea, a cautious president has changed his tune.

BUSH: I'm hopeful that we can get some U.N. action on North Korea.

HENRY: The shift has come because the president's image around the world has been battered.

WILLIAM DOBSON, "FOREIGN POLICY" MAGAZINE: The president has to come, sort of, with his hat in hand, doing the rounds and hope that others were willing to listen.

HENRY (on camera): That's why for the president, there is so much riding on the G8 summit that kicks off Sunday in St. Petersburg, where the agenda is getting more and more crowded with global hotspots.

Ed Henry, CNN, with the president in Rostock, Germany.

(END VIDEOTAPE)

ROBERTS: For some perspective on all of this, including Iran's possible involvement, I spoke with "TIME" magazine columnist Joe Klein a little bit earlier.

(BEGIN VIDEOTAPE)

ROBERTS: So, it has been said time and time again today that Iran is behind this, and what Iran is doing is it's trying to stir things up in Israel to deflect attention at the G8 Summit this coming weekend away from its nuclear program and all the talk that was going to be held at the G8 Summit about that.

What do you think about that whole theory?

JOE KLEIN, COLUMNIST, "TIME" MAGAZINE: Well, I think it's absolutely true.

You know, you had an extreme act here. Hezbollah crossed the border into Israel to stage this raid. Hezbollah receives $15 million to $20 million a month from Iran, which comes through the Iran Revolutionary Guard Corps, which is a kind of group of freelance military religious fanatics, which have very close ties to the President Ahmadinejad.

I think that what we're seeing here is Iran's emergence as a real regional power. And what we can't forget is that over the last four or five years, inadvertently -- it's the law of unintended consequences -- but our actions in the region have empowered Iran. We have taken out Iran's two major enemies, the Taliban in Afghanistan, and, most important, Saddam Hussein in Iraq. And I think that they're flexing their muscles.

ROBERTS: What do you make of the line that the White House is trying to walk today? The president on the one hand saying Israel has got the right to defend itself, and then Condoleezza Rice, on the other, saying whoa, urging restraint here on the part of the Israelis?

KLEIN: Well, they're sending three different messages.

The main message comes from President Bush. And it's appropriate. Israel has a right to defend itself after this extreme act, which was Hezbollah crossing the border.

Condoleezza Rice's message is to the rest of the region, saying, we want the Israelis not to go berserk, and to restrain themselves.

And then the third message is the one that's kind of coming, you know, subliminally and undercover to a lot of us in the press, with the administration officials saying, you know, Iraq and Syria were behind this.

And I think that the emphasis here -- not Iraq -- I mean Iran and Syria were behind this. And I think that the emphasis here is Iran.

ROBERTS: Right. I talked with the ambassador, the Syrian ambassador to the United States, just a little while ago, who was critical of the U.S. for not getting involved, saying, every time there's been a crisis in the past, the U.S. jumps in.

Now, Syria doesn't have the greatest credibility on this particular issue, but is it a mistake for the United States to be standing on the sidelines while the operation in Gaza is going on, and now while this crisis is Lebanon is going on?

KLEIN: Well, we've been standing on the sidelines diplomatically, historically, through much of the Bush administration. Although I got to say, about the Syrians, if we get involved, they don't like that, and, if we don't get involved, they criticize us for that.

I think it's really significant today that both the president and the secretary of state emphasized the U.N.'s role and the U.N. mission. The U.N. is sending over some real high- powered diplomats. Terje Larsen has a lot of experience in the region. But that doesn't replace a major American presence here, and a long-term one, diplomatically, in terms of trying to negotiate a settlement among these parties.

ROBERTS: Some interesting thoughts.

Joe Klein, good to see you again. Thanks very much.

KLEIN: Good to be here.

(END VIDEOTAPE)

(END BREAKING NEWS)

ROBERTS: As the fighting continues, so does reaction from around the world.

Greece called for the release of the Israeli hostages. It also asked Israel to avoid the use of excessive and pointless force.

Russia denounced Israel for attacking Lebanon and Gaza, saying it is a disproportionate response.

And Iran blasted what it calls quote, "the Zionist regime resorting to blind tactics against the innocent people of Lebanon with full U.S. backing."

Here at home, a very long night lies ahead for people in smoky southern California. Mandatory evacuations, hundreds of homes wrecked. Some scenarios have these fires doubling in size.

We'll go there live for the latest, when 360 continues.

(COMMERCIAL BREAK)

ROBERTS: Wild fires are making things very hot in the southern California desert tonight. Parts of San Bernardino County, California, are now under a state of emergency, with mandatory evacuations being ordered.

The problem began with one fire.

But now, as CNN's Chris Lawrence reports, there is double trouble.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Two wild fires burning through the mountains two hours east of Los Angeles. More than a thousand firefighters struggling to stop them from merging into one blaze. PAT MILLER, EVACUEE: There is fire on both sides of our dirt road. I was at work. Our neighbors got my husband out because I couldn't get in.

UNIDENTIFIED FEMALE: She was trying to get through and they wouldn't let her in.

MILLER: It was like driving into hell.

LAWRENCE: Morongo Valley resident Pat Miller, her kids and her pets all thank firefighters for the ultimate rescue.

MILLER: We kiss their feet. They are heroes, every single one of them, because they saved our houses.

LAWRENCE: But dozens more have been lost over the past few days. As smaller fires burn right into each other.

(On camera): Firefighters tell us this started as two separate fires. But they merged together, caught some good fuel, and literally raced right down the mountain.

UNIDENTIFIED MALE: It's going this way. So that's why you and I and everybody else needs to get down here as quickly as possible.

LAWRENCE: There were warnings as early as 8:00 a.m., when this smoke cloud bloomed high over the mountains.

UNIDENTIFIED MALE: It's real rare. To see an ice cap like that, this time of the morning, it's going to get big.

LAWRENCE: Crews hiked up steep mountains and cut fire lines by hand. But the weather has been hot, dry and windy, a combination that could push the fires towards Big Bear, where the fuel could act almost like a ladder.

UNIDENTIFIED MALE: The fire will climb from the grass to the brush to the trees. And we get it up running on the top and everything changes.

LAWRENCE: Tens of thousands of homes in this residential and tourist area, surrounded by a forest that could fuel these fires for weeks.

(END VIDEOTAPE)

(On camera): Now, right now, those flames are still quite a ways away from Big Bear. But the two main fires are closer to each other, less than five miles apart. Together they burned about 56,000 acres, an area almost four times the size of Manhattan -- John.

ROBERTS: That's just amazing, Chris, the size of those fires. When you say it could take, that Big Bear is a long way away, when it comes to a fire though, it can cross the line very, very quickly. You narrow that gap down. How close are these firefighters to getting a handle on these blazes? LAWRENCE: Well the larger fire, the Sawtooth fire, is now at about 20 percent containment. That's where they started the day. But the fire increased in size by about 7,000 to 8,000 acres. So in actuality, they actually got some headway on that fire. They kept the same percentage of containment for a larger fire. The smaller fire, Millard (ph), is still at about 5 percent containment.

ROBERTS: Incredible amount of work going on there.

Thanks very much, Chris. Appreciate it.

More from the fires ahead. We'll get a view from above the flames, when 360 continues.

(COMMERCIAL BREAK)

ROBERTS: You would think that with a fire the size of the Sawtooth burning in southern California, people would be running to get out of the way. Well, many are.

But as CNN's Gary Tuchman reports, there's a lot of diehards in that area.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): The land surrounding his home was in flames. Now it's charred with the huge wildfire still burning on the other side of a hill. But William Barbee refused and refuses to leave his house in Rimrock, California.

(on camera): Tell me how you felt as those flames were coming close?

WILLIAM BARBEE, RIMROCK RESIDENT: I was scared so bad, man, it was unbelievable. Man, I've never been as scared -- I couldn't believe what was happening. The flames was running 60, 70 mile an hour. I just didn't really know what to do at the point.

TUCHMAN: Was there a point where you thought you might die?

W. BARBEE: Yes.

TUCHMAN (voice-over): William, who just moved here three months ago from Tennessee, decided to evacuate his family, but stay himself to protect his home and other houses owned by family and friends.

W. BARBEE: I sprayed my house down with a water hose until I run out of water. Then, I went to the neighbor's houses and started taking care of theirs.

TUCHMAN: His wife, Debbie, who fled to safety, could not get in touch with her husband for almost 48 hours.

(On camera): What was it like for you waiting to find out if he was OK?

DEBRA BARBEE, RIMROCK RESIDENT: I cried and died for two days, looking for him.

W. BARBEE: Shut up.

D. BARBEE: Yes, it was really bad.

W. BARBEE: You did a good job, man.

D. BARBEE: We had no idea.

TUCHMAN: This is hundreds of acres that were in flames while you were a couple hundred feet away?

W. BARBEE: Yes. Yes, I was right here, dude. I was trying to do the best -- thank God I didn't get burned up or nothing, and, you know.

TUCHMAN: You're OK.

W. BARBEE: Yes.

TUCHMAN (voice-over): Fire trucks continue to go up and down this canyon road. William knows it wasn't safe to stay. But he also says he wanted to protect his pets and other animals, including this mule, and this rooster.

(On camera): You're a good-hearted guy. You came here, and you wanted to save two dogs, a jackass and a rooster.

W. BARBEE: That's basically it, dude.

TUCHMAN (voice-over): A mandatory evacuation is now in effect in his area, but William says he's not going anywhere, because he wants to keep an eye on the fire.

W. BARBEE: My whole saying is, my daddy told me one time, do unto others as you would want them to do unto you.

TUCHMAN: The golden rule, amid the golden flames.

We give you a look now, 12,000 feet above those golden flames. The sun hasn't set yet, but you can see the flames and the smoke above Yucca Valley, California.

(On camera): We came to you live from this helicopter last night. We actually saw more flames and more smoke last night. And that's because the fire is a bit more contained. Right now, we're talking 20 percent containment, compared to 16 percent yesterday. Not a huge increase, but at least it's some progress.

(Voice-over): Forty thousand acres have been burned. So when we talk 20 percent, that means 8,000 acres have been put out, but it also means 32,000 acres still to go.

Nearly 100 homes and other buildings have been destroyed, including a couple in that neighborhood where we were just with that gentleman. He was very lucky. Hundreds more homes are still threatened.

The problem is the terrain is so hard to get around, that it makes the work very difficult.

(On camera): And the temperature in Palm Springs, which is about 20 miles to the south, where we took off from, was 118 degrees today. The humidity is very low. The winds have picked up since yesterday. So that makes it a very difficult situation for the firefighters.

The latest number, we were told yesterday, are 2,500 firefighters on the ground. Turns out the number is 1,350. They counted a lot of them twice. But of those 1,350 firefighters, about 900 of them are prison inmates. Sounds unbelievable. But these prison inmates, who are not, and we emphasize not violent offenders, train in the fire academy. And they are out on the front lines right now, trying to fight this huge fire that could ultimately, officials here believe, go to 100,000 acres.

John, back to you.

(END VIDEOTAPE)

ROBERTS: Big problems, big danger there in southern California.

Now Erica Hill from "HEADLINE NEWS" joins us with some of the business stories that we are following tonight.

ERICA HILL, CNN CORRESPONDENT: John, the violence in the Middle East is pulling stock down and pushing oil prices up. The Dow sank more than 166 points, the NASDAQ lost 36 and the S&P fell 16. Now, as for oil, the price of a barrel closing at a record high today, $76.70.

In Atlantic City, New Jersey, Merck, winning its latest court fight over Vioxx. Jurors said today the company's painkiller was not responsible for a woman's heart attack. It is the sixth verdict tied to Vioxx. Merck has won two other cases, lost two more, and there was a split verdict in another trial. The drug maker has vowed to fight more than 11,000 lawsuits since Vioxx was pulled off the market in September 2004.

And home buyers take a note of this one. Fixed rates on a 30- year mortgage dropped for the first time in five weeks, to a nationwide average now of 6.74 percent. And rates on a 15-year fixed slipped to 6.37. Freddie Mac's chief economist says the declines reflect the expectation that the Federal Reserve will hike interest rates just one more time this year, John. They are not done yet.

ROBERTS: The housing market beginning to cool as well. So might be a time to get a mortgage and go out there house shopping as well.

HILL: Could be.

ROBERTS: Erica, thanks. We'll see you again tomorrow.

HILL: Thanks.

ROBERTS: More of 360 in just a moment. Stay with us.

(COMMERCIAL BREAK)

ROBERTS: Tomorrow on "AMERICAN MORNING," Barbaro, America's favorite Kentucky Derby winner, he has taken a turn for the worst.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm not going to try to sugar coat this. This is still a long shot, but -- and the factor that's evolved here is as long as he stays comfortable, we will try. If we can't keep him comfortable, we will not continue.

(END VIDEO CLIP)

ROBERTS: More on Barbaro's condition and a look at America's affection for this magnificent athlete tomorrow on "AMERICAN MORNING." It all starts at: 6:00 a.m., Eastern.

Anderson Cooper reporting on 360 tomorrow night from the Middle East. I'm John Roberts.

"LARRY KING" is next. He's got more on the violence in the Middle East as well.

For all us here at 360, thanks for watching. Have a good night.

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