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ANDERSON COOPER 360 DEGREES

Mideast on Alert; Lieberman Concedes Defeat; Strategy Session; Missing Egyptian Students; Bloody Tuesday; Iraq Bloodshed; Hezbollah's Leader

Aired August 8, 2006 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: A lot to talk about. Israeli troops massing along this border tomorrow here. It is already Wednesday here in Israel. Today, Wednesday, there's going to be a meeting of the Israeli war cabinet to discuss whether or not this conflict is going to escalate, whether or not to send Israeli troops, put more Israeli troops on the ground in south Lebanon and send them deeper into Lebanon than has previously happened.
A lot to talk about tonight, but first let's get you up to date in a 360 "War Bulletin."

(BEGIN VIDEOTAPE)

COOPER (voice-over): The ritual is simple. It's all they can do. Wrap the bodies and the tears fall.

Today in the southern Lebanese village of Gazea (ph) a crowd gathers to mourn lost wives, husbands, children and friends -- 15 to be buried. All killed in a raid.

During the funeral procession, mourners are rattled by an explosion. Smoke clouds rise. A new strike is under way. Israeli aircraft hitting targets nearby. In this war, there are few safe places, few safe moments.

From the skies above the embattled Lebanese port city of Tyre, another warning. Israeli planes drop leaflets warning those south of the Litani River, do not drive. You will be a moving target and could be killed. Israel says cars can carry weapons.

Elsewhere Israeli aircraft bombarded southern Lebanon, targeting buildings, access routes and missile launchers. On the other side of the border in Israel, more destruction. Hezbollah rockets ripping through northern Israeli towns, setting fires and damaging buildings. More than 140 strikes counted today.

Here, too, there is mourning. This young man remembers his friend, a reservist killed this past weekend in the conflict's deadliest rocket attack on Israeli soil.

EILAN SHIMONI, FRIEND OF DEAD SOLDIER: For him to serve in the army, usually in this time since this war, it was a privilege.

COOPER: Away from the rocket fire and bloodshed, urgent calls to end the fighting and a debate over how to do it. At the U.N. today, Arab league delegates met with the U.N. Security Council to push for a Lebanese cease-fire plan that calls for Israeli troops to withdraw from Lebanon, to be replaced by 15,000 Lebanese forces.

TAREK MITRI, LEBANESE SPECIAL ENVOY TO THE U.N.: I am here, we are all here, to find a way out. The proposal of our government, the proposal of yesterday, is a viable option.

COOPER: Israeli withdrawal is not on the proposed U.N. resolution backed by the United States. For their part, Israel says they're considering an expansion of their military campaign. Though today Israeli Prime Minister Ehud Olmert seemed open to the Lebanese plan.

EHUD OLMERT, ISRAELI PRIME MINISTER: It hooks interesting. We will examine it closely.

COOPER: Until an agreement is reached, the bombings and rocket attacks will continue. More people will die. Even if peace comes soon, it is too late for those who have already lost loved ones on both sides of this disputed border.

(END VIDEOTAPE)

COOPER (on camera): A lot to talk about, what is happening on the ground, inside south Lebanon. Earlier, just a short time ago, I talked to CNN's Ben Wedeman who is in besieged city of Tyre.

(BEGIN VIDEOTAPE)

COOPER: So, Ben, what is the latest situation in Tyre? I mean, the city seems virtually cut off.

BEN WEDEMAN, CNN CORRESPONDENT: It is cut off. Basically the only way out, Anderson, is over the Litani River, where basically you crawl or you walk across a log that's covering the river. Otherwise you wade right through.

Essentially, anybody trying to get in has to walk to the Litani River because at the moment, anybody out on the road in a car, or a donkey cart or a horse cart is considered a legitimate target by the Israelis who believe that vehicles are being used to transport ammunition and Hezbollah personnel. So they're going to hit anything on the roads. So it's getting rather difficult.

COOPER: On the one hand, Israelis have been telling people to get out, move further north. Now there's this thing that if you're driving a car, you're a target. How can people get out now? I mean, I guess there's no way. Is that correct?

WEDEMAN: Well, there is a way. You just take your life in your hands and you jump in a car and drive away. People are driving around. But everybody who does so realizes that there's a very high probability that your car will be hit.

So essentially, those who remain in southern Lebanon, and we heard from the head of the ICRC, the International Committee of the Red Cross, that they believe there's still about 100,000 people in southern Lebanon out of a normal population of about 400,000. The ones who are remaining, many of them Palestinian refugees who feel they really have nowhere else to go. And those who simply don't have the money.

It now costs anywhere between $400 and $600 to take the drive from Tyre to Beirut in a taxi. And most people who are still behind, left behind here, just don't have that kind of money.

COOPER: What about supplies? I mean, food, gas for the people who are living there, and also humanitarian aid? Are they able to distribute it?

WEDEMAN: Well, that's the problem. Humanitarian aid is a real problem because we saw that, for instance, the Doctors Without Borders basically created a human chain across the Litani River to move those supplies in. Now supplies have been stockpiled. Nobody's starving in southern Lebanon, at least here in Tyre.

But what we have is a situation where prices are going way up. Petrol, gasoline, is now triple its normal price and in short supply. And so basically, people have, as I said, stockpiled. But prices are going up. And it's really getting hard to find certain basic commodities.

COOPER: Ben Wedeman, appreciate it, thank you.

(END VIDEOTAPE)

COOPER: And the race we've been watching, Connecticut. Joe Lieberman has now conceded. He says he has called his challenger Ned Lamont and congratulated him. He also says he will be running as an independent. Let's listen.

(BEGIN BREAKING NEWS)

SEN JOSEPH LIEBERMAN (D), CONNECTICUT: ... instead of talking about how we could solve the people's problems. Insults instead of ideas. In other words, more of the same old partisan politics that has stalemated Washington today.

I will continue to offer Connecticut a different path forward. I went into public service to find solutions, not to point fingers. To unite, not divide. To lift up, not to tear down. To make my community and country a better place to live and work. And that's what I want to do with the help of the voters of Connecticut for six more years.

COOPER: (UNINTELLIGIBLE) Candy Crowley. Candy, this has been a tough race, a surprising race to a lot of observers.

CANDY CROWLEY, CNN CORRESPONDENT (on the phone): Anderson, it's loud enough (UNINTELLIGIBLE) can hardly hear you. But I can tell you that the one last great question of this campaign has just been answered. And that is that in fact Joe Lieberman in his concession speech said, congratulations to the winner, but I'm going to keep running. He called it Team Lieberman.

So he will be going on, running an independent race. He said for the sake of the country, he cannot let this result stand. So he slams his opponent, said it was insult instead of ideas. He said that he thought it was partisan and polarizing. And that is not what he, Joe Lieberman, is about.

So the race is over and the race has just begun. One of the stranger concession speeches I've ever heard -- Anderson.

COOPER: How much money does he have? Can he win as an independent?

CROWLEY: Well, I mean, what's interesting here is that his opponent, Ned Lamont, spent the entire race saying, you're too close to Republicans, you're too accommodating to Republicans. And those very Republicans in Connecticut are the ones of course that Joe Lieberman will be counting on to put him over the top. I mean, their rationale is, listen, Ned Lamont was able to get a percentage of angry Democratic voters. But Joe Lieberman's appeal is broader. He can appeal to the more moderate elements of independent. Independents are the largest voting group in Connecticut, as well as Republicans.

They have a (UNINTELLIGIBLE)Republican candidate for Senate now and they've taken a look at that. And they believe looking at the polls that he stands a very good chance in the polls indicate he does, of winning this thing as an independent.

Now, he says he will go on to Capitol Hill and vote with the Democrats and that he'll still be a Democrat.

Now, others who have not wanted Lieberman to take this stand, believe that then will be backlash. And he's putting his colleagues in a very uncomfortable position because, of course, many of them feel they have no choice but to support who the Democratic Party chose tonight in Connecticut, and that's Ned Lamont.

COOPER: What does this mean for other Democrats who, you know, moderate Democrats who are closer to the Bush administration on Iraq, than liberal Democrats are? I mean, in particular, Hillary Clinton, who's sort of been trying to perhaps moderate some of her views or her public stances in the last year or so.

CROWLEY: Well, what's interesting is that there were a lot of people I talked to here in Connecticut who felt that when Hillary Clinton the other day called for Donald Rumsfeld, the secretary of defense's resignation, that that was done with one eye on what was going on in Connecticut, which was a very clear message from Democrats, that they have had it with the war.

Now, there were any number of other things that factored into this race. Some of it was just anti-Bush. Some of it was a feeling that Joe Lieberman was getting a little too far away from his constituents and the people that put him into office. Hadn't been as responsive as they wanted him. So other things factored into this race. But it's very clear that it will be interpreted as a signal that the antiwar sentiment within the Democratic Party is broad and it is deep and it is willing to throw out longtime incumbents in order to make that point.

COOPER: Candy, appreciate your reporting.

We should also point out that Cynthia McKinney has lost in Georgia. Cynthia McKinney has lost there. Hank Johnson has won.

(END BREAKING NEWS)

COOPER: So we'll continue to cover developments when Ned Lamont comes out to speak. We'll also have a lot more, our reporters' roundtable from the Middle East. The latest on the crisis here from Beirut, from Israel, and from the diplomatic efforts going on in Washington and New York and points beyond. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Israeli artillery firing in a position here along the border into southern Lebanon. A lot of these artillery units have moved up their positions closer to the border so they can reach deeper inside Lebanon. And word today of troops massing along the border here for what may be a deeper push by Israel into Lebanon. That's going to be decided Wednesday here which has already begun here. It's now just past 6:00 a.m. here in Israel.

The war cabinet will meet to decide whether or not to in fact send in more troops and push them further in.

A lot to talk about with John Roberts who is elsewhere along the border here with me this morning. Also, Michael Ware who's in Beirut, and John King who's monitoring diplomatic efforts out of Washington, D.C.

John Roberts, troops massing along this border, what is going to determine whether or not they send in more troops, and how are those troops going to be used?

JOHN ROBERTS, CNN SENIOR NATIONAL CORRESPONDENT: Well, there's a plan before the Israeli security cabinet right now to expand this ground invasion quite dramatically. Probably another division of boots on the ground coming in. That would increase the size of the force by a third. About another 5,000 troops out in the field. It's taken that there's about 10,000 to 12,000 right now.

What it would do, Anderson, it would give them more ability to expand the campaign into more towns and villages in southern Lebanon. But the strategy is something that's in question right now. Are they just trying to hold this ground? Are they trying to actually sweep through the urban areas? It doesn't seem so.

They launched these pinpoint attacks into the urban areas and then withdraw. There are many people who are questioning how you can actually gain control of the territory if you don't go through these towns and villages and push Hezbollah all the way back. Which is perhaps why we're seeing the shuffle at the very highest levels of the Israeli army.

The of staff appointing his deputy to oversee and coordinate everything that the northern command has been doing now. For 28 days, General Udi Adam has been the man in charge. Now, General Don Valutz (ph), the chief of staff is appointing someone over the top of Adam to look after this whole thing.

Questions now in Israel today, is Adam going to stand for this? Is he going to resign? What is the shape of the Israeli ground invasion going to look like in the coming hours? Those are questions that we'll be asking today and hopefully we'll get some answers and we'll actually get a look at how this might change -- Anderson.

COOPER: A lot of question on the diplomatic front as well.

John King in Washington, what is France now saying? It seems like they are kind of shifting their position after hearing from the Arab league.

JOHN KING, CNN SENIOR NATIONAL CORRESPONDENT: What they are saying publicly, Anderson, is they believe the proposal on the table by the United States and France needs to be significantly changed to take the Arab concerns into account. France is not yet publicly saying what it thinks those changes should be.

But the Arabs want this. They want an immediate Israeli withdrawal. They want Sheba Farms, the disputed territory returned from Israel to Lebanon. And they want a smaller international force than envisioned by the United States and Israel.

The United States says it's sympathetic to those concerns, but I'm told by a Bush administration official tonight that if you give them very much, then you lose the Israelis. So the diplomacy is obviously at a very delicate point.

John Roberts spoke earlier of a tipping point when it comes to the military campaign. Or a tipping point in the diplomacy as well. The United States is listening, but I was told tonight That Ambassador Bolton was not happy. He thought the French wanted too many changes.

They're trying to get this vote, Anderson, by Thursday. They're already behind schedule on the diplomacy. The negotiations tonight and early tomorrow will determine whether they can get there or whether the diplomacy will continue. And, of course, as the diplomacy continues, so too does the fighting.

COOPER: Michael Ware in Beirut, Lebanon has said they would send down 15,000 soldiers down to south Lebanon if there is a deal, if Israel withdraws. Is the Lebanese army ready to do this? Is the Lebanese army ready to actually get Hezbollah to disarm? Are they capable of that?

MICHAEL WARE, CNN CORRESPONDENT: No, the Lebanese army has no capability to stand up against Hezbollah in any kind of conflict. I mean, let's look at the fight that the guerrillas are putting up against the might of the Israeli Defense Force. The Lebanese army can't hope to match that. The advantage of the Lebanese army, however, is they are compatriots.

So much of this conflict has being draped in nationalist terms. I mean, that is the core value in so many ways. Or certainly the core branding value of Hezbollah is that it is a force of national liberation. So to that regard, the Lebanese army and the Hezbollah interests and agenda align.

Indeed we've seen the national defense of the southern borders of Lebanon contracted out essentially by the government to Hezbollah. So by deploying these forces, even though they cannot forcibly disarm Hezbollah, it could lead to a detente much quicker and a much more cooperative Hezbollah -- Anderson.

COOPER: Michael Ware, appreciate that. John King as well and John Roberts. Thank you very much.

A lot more to cover in this region. But first let's check the other day's top stories.

Tom Foreman joins us with a 360 bulletin -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: He Anderson. More carnage in Iraq today. A string of car bombings in Baghdad, 20 died there. Also in Baghdad, police discovered 15 more bodies. It wasn't difficult, they were dumped. All were riddled with bullets. All showed signs of torture. This is of course happening with American forces stepping up their efforts against sectarian death squads.

Back home, in Salt Lake City -- take a look. This is the before picture. But tonight, twin sisters who spent the first four years of their lives attached are sleeping in separate beds for the first time. Doctors say the 26-hour operation was a success. The girls were joined from the chest down, shared a number of internal organs. The best to them.

Tom DeLay says he's pulling out of the race. He's been trying not to run for weeks. After losing a court battle to get his name off of the ballot, the indicted former house majority leader now says simply, he's out.

And in the middle of hurricane season, scientists at the National Hurricane Center are forecasting fewer storms now. The center is now predicting 12 to 15 named storms. With seven to nine expected to grow to hurricane status. That's less than half as many storms as last year. There's still a lot of time left with the hurricane season that stretches of course to the end of October. So the best of luck to all of our friends along the coast -- Anderson.

COOPER: Keep our fingers crossed. Tom Foreman, thanks very much.

When we come back, we're going to check back in with Candy Crowley in Connecticut, the latest on this Democratic primary race. Joe Lieberman conceding to Ned Lamont. We're waiting to hear from Ned Lamont himself. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN BREAKING NEWS)

NED LAMONT (D), CONNECTICUT SENATE CANDIDATE: I want to thank Senator Lieberman for this campaign. I want to thank him for the dignity...

COOPER: We're watching Ned Lamont, winner of the Democratic primary in Connecticut, beating Joe Lieberman. An amazing turn of events when you consider the career of Joe Lieberman and the fact that he ran for vice presidential candidate for the Democratic Party just a short time ago. He has now accepted defeat in the Democratic Party. Joe Lieberman announcing he's going to run as an independent.

Right now Candy Crowley takes a look at how he got to this place and what happened to Joe Lieberman.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): It is an election day ritual. Voting. Talking good game.

LIEBERMAN: I got to tell you that I have a very good feeling as we begin this primary day. Because I think the Democratic voters of Connecticut are coming home.

CROWLEY: Joe Lieberman's opponent responded by voting and talking good game.

LAMONT: We've had, what, 70, 80 people just registered in the last day here in Greenwich to be Democrats. I think we're catching on across the board. I'm feeling very positive.

CROWLEY: What a short, strange trip it's been. It was only about six weeks ago that the Lieberman campaign fully recognized the threat posed by antiwar candidate Ned Lamont, fueled by his own considerable wealth and the blogging left.

DAVID LIGHTMAN, HARTFORD COURANT: Internet people provide the base of support. They provide the intellectual foundation, they provide money. They provide momentum for somebody like Ned Lamont. They keep this thing going.

CROWLEY: The results will be read through the prism of Iraq. A simple for the war, against the war story.

LIGHTMAN: It's going to be that Democrats are fervently opposed to this war. And if you support it, we don't want you.

CROWLEY: But in many ways it is a story about a man versus the time. Not just a politician supportive of a war gone sour, but an 18- year Senate veteran in an anti-politician era. A centrist in sharply partisan times. And grumblers say, a Senator so interested in the national scene, he forgot the people who gave him the platform.

UNIDENTIFIED FEMALE: This is my opportunity to voice that. I don't really think Joe Lieberman has really listened to me or listened to many voters.

CROWLEY: As Team Lieberman worked feverishly in more than 500 precincts to get out the vote, it was a sign of the times that his formally obscure opponent had already turned the page.

LAMONT: I'm going to shake things up in terms of how we do business in Washington, D.C. I think that's a message that resonates with Republicans, independents, moderates and Democrats.

(END VIDEOTAPE)

COOPER: Candy Crowley joins me now from Connecticut, also Amy Walter, the senior editor of the "Cook Political Report."

Candy, let me start off with you. If that's true, if there are a lot of people in Connecticut feeling that Joe Lieberman had sort of focused too much on the national effort, no longer represented their interests, that does not bode well for him running as an independent.

CROWLEY (on camera): Well, it doesn't, except for that they've made this choice very deliberately. They looked at the numbers. And what they saw was that there is huge support among Connecticut Republicans and independents. And remember that independents, those that are not affiliated with either Democrat or Republican parties, is the largest party in Connecticut.

So they looked at those numbers. They saw how he polled with those people. And they made a very deliberate choice a couple of weeks ago, knowing that this was going to be his best route to return to the U.S. Senate.

COOPER: Amy, were you surprised at not only the vehemence, sort of the vitriol against Joe Lieberman from some bloggers, but also that the power of the bloggers ended up having in this race?

AMY WALTER, SENIOR EDITOR, "COOK POLITICAL REPORT": Well, look, I think you're talking about a very -- first of all, we have a state like Connecticut, where it's a very liberal state, where the -- Bush's unpopularity is about as high as anywhere in the country, where concerns about the war are about as high as anywhere else. So I think it was almost a perfect test tube to try a campaign like this, against an establishment Senator like Joe Lieberman. So I think that was really pretty critical.

But there's no doubt that what the blogs are able to do is fuel a lot of this enthusiasm, a lot of the grassroots support. And the real question now is, where they're going to be come November.

COOPER: Well, Candy, I mean, how do Democrats try to bring more people into the political 10 and win national elections if the candidates who are trying to do that, or trying to sort of be more moderate, can't get past the primaries?

CROWLEY: Well, it's sort of the, honey I shrunk the middle period in politics. It is very hard for a centrist, as Joe Lieberman is. And on the other side we have Lincoln Chaffee, who's a Republican, who's often gone up against George Bush. He's in trouble in his home state. So the middle is having a tough time. These are very sharp, partisan times.

And you saw Joe Lieberman in his concession speech say, listen, I'm going to go on because I believe in working together. And I believe in bipartisanship. So having spent the last several weeks talking about what a good Democrat he is and how many times he went up against George Bush, he turned that corner right away and said, look, I'm a bipartisan guy, I believe in working across the aisle, and I want all like-minded people to join Team Lieberman.

COOPER: Amy, can Joe Lieberman win in Connecticut as an independent?

WALTER: Well, I think he certainly can. Look, and Candy alluded to this earlier on in terms of looking at the numbers, the bottom line was the margin of victory here was very small. So I think Lieberman can go into this November saying, you know, I still have a good amount of support from activists, Democrats. I have very good support among independents. Republicans give me high marks.

The Republicans in this case don't have a very strong candidate. So a three-way race really would not benefit Republicans in the same way as if they had a particularly strong nominee.

COOPER: Amy Walter, senior editor of the "Cook Political Report," appreciate you being on the program.

WALTER: Thanks a lot.

COOPER: And Candy Crowley as well. Thanks very much.

(END BREAKING NEWS)

COOPER: When we come back, the other war. What some are calling the forgotten war with all the focus being on this Middle East crisis. The war in Iraq. Some bloody days there indeed. We'll take a status report when we return.

(COMMERCIAL BREAK)

COOPER: Well, it's 6:30 in the morning. The guns here along the Israel/Lebanon border have just begun to open up. Firing some shells into -- well, we don't see the targets. They're over the mountain over my shoulder. But we know that they are landing at some point in south Lebanon.

The range on these artillery pieces about 20 kilometers, 15 or so miles. And they have been striking all night long. And they took a brief respite over the last hour. Now I don't know if you can hear them, the guns are just starting to open up yet again.

A lot more to talk about what is going on here in this region. In particular, another day of steady rocket fire. Let's take a look at our "360 War Bulletin." Israeli gun ships hit Lebanon's largest Palestinian refugee camp. Early reports said one person had been killed. Israeli military says it was targeting a Hezbollah militant's house. Representatives of the Arab league on the diplomatic front petitioned the U.N. today for a peace proposal that includes Israel's immediate withdrawal from Lebanon. They want Israeli troops to be replaced by Lebanese troops and U.N. peacekeepers.

The death toll from an Israeli attack on the Beirut suburb of Shiyah has risen to 30. Lebanese authorities say 64 people were injured in that.

A story in the United States has caught our attention. A story of great concern. The FBI is searching now for 11 Egyptian exchange students. That's how they were described. We know that they arrived in the United States. The problem is no one has seen them since.

CNN's Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice over): Montana State University was going to host 17 Egyptian students this summer as part of a cultural exchange program. But only six showed up in Bozeman; 11 of them disappeared after arriving at New York's JFK airport on July 29th and entering the U.S. on student visas.

The FBI has issued a "be on the lookout" alert or BOLO, urging law enforcement to approach with caution if they come across any of the students.

JULIE MYERS, IMMIGRATION AND CUSTOMS ENFORCEMENT: We do want to talk to them, but at this point there's no reason to believe they pose any criminal or terrorist threat.

MESERVE (on camera): Federal sources say originally 20 Egyptian students were bound for Montana state, but three were denied visas. Now though, sources say, authorities are working with foreign intelligence to check out the 11 who have disappeared. Government sources believe they are still in the New York area.

(Voice-over): Because one of the 9/11 hijackers was in the U.S. on an expired student visa, the vetting and tracking of international students has tightened. Schools are now required to tell the government if foreign students don't show up. Montana State University did just that, even sooner than the law requires.

CATHY CONOVER, MONTANA STATE UNIVERSITY: We're hoping that everything is OK and the students are doing something in terms of visiting New York City, instead of coming to Bozeman, Montana.

MESERVE: Some say it doesn't make sense to give so much scrutiny to students, and so little to others with visas.

VICTOR JOHNSON, ASSOCIATION OF INTERNATIONAL EDUCATORS: We don't know where they are. We don't know what they're doing. Nobody knows, nobody particularly cares.

MESERVE: About a million foreign students are in the U.S. at any one time. Since 2003, thousands have been reported as potential visa violators. And about 1,800 have been arrested, including drug dealers and child predators. But Immigration and Customs Enforcement does not have the resources to check or find them all.

MYERS: We have to prioritize because we have 5,700 agents in this country and we have a wide range of responsibilities. But we are working hard to find those individuals who we deem to be of greatest risk.

MESERVE: That includes the 11 missing from Montana state. Whether or not authorities determine they are a security threat, they will be kicked out of the country if and when they are found.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

COOPER: When we come back, Iraq, a bloody day there. We'll have the latest, stay tuned.

(COMMERCIAL BREAK)

COOPER: An extremely bloody day in Iraq. More than 30 people killed in car bombings and shootings.

CNN's Harris Whitbeck has the latest on the day's death toll.

(BEGIN VIDEOTAPE)

HARRIS WHITBECK, CNN CORRESPONDENT: Iraqi commanders unfurled their division's flag on a military base in Tikrit. The ceremony, in the presence of top U.S. military commanders and the U.S. ambassador to Iraq, served to formalize the transfer of power and the province from U.S. to Iraqi military forces. Bringing the number of Iraqi army divisions in control of Iraqi territory to five. With five more due to take over by the end of the year.

GENERAL GEORGE CASEY, U.S. COMMANDER, IRAQ: They just keep taking small steps and they get better and better every day.

WHITBECK: But whoever is in control of security in Iraq continues to face a huge challenge. Just before the ceremony in Tikrit, two roadside bombs exploded in nearby Samarra, killing nine people.

And in Baghdad, two explosions, one in the main market, killed another 10. Sectarian violence in the capital has risen sharply in recent months.

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: Securing Baghdad is vital. It's the national capital, of course. And 7 million Iraqis live there. It is the scene of a great deal of violence in Iraq. Should this government be dismissed as having failed to deal with it, Iraq will be in a much more difficult situation.

WHITBECK: More U.S. troops have been sent into Baghdad. On Monday, they and Iraqi forces, supported by air power, fought Shia militia in the sprawling slum of Sadr City. And that has caused a rift between the U.S. military and Iraqi Prime Minister Nouri al- Maliki. Maliki criticized what he called the heavy handedness of the U.S. force.

NOURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): When they bombed Sadr City with planes, I was so angered and pained from this operation.

WHITBECK (on camera): Maliki now faces the challenge of trying to overcome the sectarian violence in the capital, at the same time as running a country whose army is a long way from being in control.

Harris Whitbeck, CNN, Baghdad.

(END VIDEOTAPE)

COOPER: Joining us to talk about the situation in Baghdad is CNN's Michael Ware, who is actually now in Beirut for us.

Michael, you've spent so much time there over the last several years. This transfer of power, how real is it? The Iraqi security forces -- I mean, how capable are they really at this point?

WARE: Well, Anderson, I mean, obviously the U.S. military in Iraq is going to great pains to put an Iraqi face on as much of the security arrangements as possible. The truth is whilst there are good and bad and very poor units within the Iraqi army, none of them can function without the support of the U.S. military. Without that air cover, without those logistics.

So when they say that Iraqi forces control an area, that is true, but to a very limited extent. They could not do it without the U.S. military underwriting them. They're certainly not standing on their own feet -- Anderson.

COOPER: We're getting a lot of outgoing shelling here, in case you hear some shelling going off. It is Israeli artillery firing into southern Lebanon. So, again, it's outgoing, which is why I'm not running in fear right now, because the shells are not landing here, they're just being fired from here.

Michael, let's talk about the sectarian violence. I mean, the kind of attacks, the kind of killings and brutality that we are seeing is just -- I mean, it just keeps getting worse and worse. What is the end game? I mean, who is it who's killing each other? Who are all these -- what are the different factors or factions that are causing the sectarian violence?

WARE: Well, clearly this was one of the key strategic planks of Abu Musab al-Zarqawi's strategy. I mean, the now deceased al Qaeda in Iraq leader. He wanted to flame this civil war. And we see death squads essentially from three broad groupings. The Sunnis, among the insurgents and among ordinary people trying to defend themselves. The Shia militias such as those as Muqtada al Sadr's (UNINTELLIGIBLE) militia. And also the government death squads within the ranks of the ministry of interior and other forces.

So essentially that includes U.S.-backed governments, death squads themselves. They're the hardest ones to crack. The institutionalized ones. But all of this, the sectarian killing, these death squads, strikes at the very heart of the success or failure of the Iraqi Democratic experiment -- Anderson.

COOPER: And why -- I mean, the kind of things we're seeing, I mean, mass groups of people being kidnapped, 20 people on a bus, being taken off a bus and kidnapped. People being found with drills that have been -- you know, their heads drilled in. It just doesn't seem to make any sense from the outside. Does it make sense when you're there?

WARE: Well, no, I guess nothing really makes sense. But I mean, certainly the civilian population, particularly of Baghdad, but also other areas, feel bunkered down. I mean, streets now, or neighborhoods now have what's called night guards. They've had these for quite some time. It's always been a matter of just local security. But now you'll see night guards engaging approaching death squads in the middle of the night.

I mean, it really is beyond reckoning. But the point is, it's got its own momentum now. I remember the test U.S. military was applying some time ago to measure the success of Zarqawi's plan. They said they're tit for tat killings, but it doesn't have its own momentum. Well, clearly, the military is now recognizing what everyone has known for at least a year. There is a low boil civil war, if not under way, then it's certainly ready to spill over -- Anderson.

COOPER: Michael Ware reporting from Beirut. Appreciate it, Michael. Thank you very much.

When we come back, a lot more from the region. We'll take a look at the Lebanese army. How capable are they really. And the latest on the fighting going on inside south Lebanon.

But first, let's check in with Tom foreman for the day's other top stories in our "360 Bulletin" -- Tom.

FOREMAN: Hi Anderson. Not just a Joe Lieberman upset this evening. The other big political race we're following tonight is in Georgia where Congresswoman Cynthia McKinney -- you remember her -- has lost her reelection bid in the Democratic primary runoff. With 90 percent of the precincts reporting, McKinney has just 41 percent of the vote. Her challenger, Hank Johnson, a former DeKalb County Commissioner, is carrying 59 percent.

The Federal Reserve decided not to raise interest rates today. For the first time in more than two years, it is standing pat. However, the Fed left the door open for more hikes in coming months. The Feds' feedback led to a down day on Wall Street. The Dow fell almost 46 points to end at 11,173.59. The NASDAQ and S&P were also down -- Anderson.

COOPER: Tom, thanks very much for that. When we come back, Hassan Nasrallah, the face of Hezbollah. What does he really think? When we return.

(COMMERCIAL BREAK)

COOPER: We're coming to you live from an Israeli artillery position right along the Lebanese border. It is just 6:45 here in the morning. As you can tell some of the soldiers are just waking up. A number of them are still sleeping. They actually sleep right next to the artillery pieces on cots. That's them in some of their sleeping bags. The artillery piece sits out here. It is operating 24 hours a day.

And it's amazing what these soldiers can sleep through, the shelling that goes on just around the clock. Here are just some of the shells that are really all set to go. This part of it, the warhead is actually screwed on top of it and we see them working on that throughout the day. They have more shells which are here in their cases, yet to be taken out.

It is an operation which happens just around the clock, 24 hours a day, seven days a week. And it is amazing what you get used to. The sound of it. The constant shelling. The first time you're here -- really, the first day you're here, it's really all you notice. But as you can see, these soldiers now, for them they can just sleep through just about anything.

We wanted to take a look at Hezbollah, in particular, Hassan Nasrallah, the leader of Hezbollah, a man who's really making a bid to become a leader of the Muslim world. We wanted to take a look at his true beliefs and what he really thinks about the state of Israel.

Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): He has called the Israeli leadership stupid, arrogant, ignorant. Called the Israeli army gigantic and blind, capable only of killing old men, women and children.

Though his speeches can be as subtle as they are direct, the supporters of Israel charge that Hassan Nasrallah's harsh view of Israel is part and parcel of a larger hatred of Jews.

David Makovsky of the Washington Institute for Near East Politics sees a man who scapegoats the Jews for almost every catastrophe.

DAVID MAKOVSKY, SENIOR FELLOW: Nasrallah's discourse is virulently anti-Semitic. On virtually every level. JOHNS: What's impossible to dispute is that one of the aims and goals of Hezbollah is destruction of the Jewish state. Why? Hezbollah would call it the return of the land to its rightful owners, the Palestinians.

Seth Jones is an analyst for the Rand Corporation who says it can be explained as a fight against Zionism.

SETH JONES, ANALYST: It's less that Jews should exist and more that they should not exist on that territory that is what we call Israel. So it's really a fundamental opposition to the establishment of a Jewish state, where it is located. Less so to I think Jews in general.

JOHNS: Which is why it's so difficult for many analysts to see a clean diplomatic solution when Israel says it's fighting for peaceful coexistence, and the other side refuses to acknowledge Israel's right to exist in the first place.

But how could a man like Nasrallah, who is thought of as part pragmatist, part ideologue and pure politician, actually believe this stuff? Probably not, says Steven Cook of the Council on Foreign Relations.

STEVEN COOK, FELLOW: Does he believe that he can wipe Israel off the face of the map? It's unlikely that he does believe that he can actually do it. Would he want to do that? Certainly. That's the case with many leaders of these types of organizations throughout the Middle East. They are anti-Zionist, anti-Israel to the core.

JOHNS: Meanwhile, there's another dynamic at work. In some ways, it's as simple and complex as grassroots politics. The tougher Nasrallah sounds, the more he bolsters his own case among the people who matter most. Especially when there's been collateral damage.

JONES: This has worked to Hezbollah's favor. So by going on the record to argue for the destruction of the state of Israel, I think that has -- Hezbollah believes it has supported its message rather than anything else.

JOHNS: But how all of that gets unraveled into a livable peace in the Middle East remains for the analysts an open question.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, when we come back, what it's like reporting this story. Behind the scenes. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Some damage in a southern suburb of Beirut.

One of the things we've been doing is having a photographer travel with us from Getty Images, trying to give us a sort of behind the scenes look of what it's like reporting this story.

We get a lot of comments from viewers asking us questions about what it's like being here. That's why we have the 360 blog which you can log onto and hear from the variety of correspondents.

We also try to put together every couple days these reporter's notebooks. Kind of a personal look at what it's like being here. The pictures tonight from Uri Lieberman (ph) and a few from Farah Nosh of Getty Images. Take a look.

(BEGIN VIDEOTAPE)

COOPER (voice-over): It's been three weeks now, three weeks and counting, fighting and dying, shelling and running. So much of it seems so long ago; only the pictures are a reminder you were ever there.

War is like that. Each day is the first. The past is dead, forgotten. In war, there's only now, only this, a smoke shared by buddies, a few hours' rest. The minutes pass. So do the memories.

At first, the shelling. The rockets. That's what you see. That's what you hear. Incoming, outgoing, sirens and screams. All of it quickly fades, however. It becomes like your pulse, always there, a throb in your ear, a beat you barely notice.

From a distance, there's a beauty to it. Brilliant flames, a flash of light, a brief boom that echoes in the hills. Up close, there's nothing beautiful about it. The ground rumbles. Your spine shakes. The heat and dirt scald your skin.

So much of this war we don't even see. We stare at distant hills that smoke and smolder. The ground is dead. We see tanks move, soldiers come and go. But you don't see the fight up close and that's where we all want to be.

We try to get close, as close as you can. You want to feel the heat, the fury, swallow the embers. You watch firefighters put out the flames, but it's never enough. You want to see more.

We follow the action wherever it's led: Beirut, Cyprus, Haifa, Kiryat Shemona, three weeks now, three weeks and counting. Sometimes I'm not even sure what I've seen.

I used to stare at the holes made by the rockets, hoping to see, to learn something. The truth is, there's nothing inside. It's steel and shrapnel, shattered concrete. There's nothing to learn.

You only learn from what you don't want to look at, what you least want to see: the blood on the ground, the sacrifices made. In Israel, they pick up the pieces, flesh and bone, heart and brain; all must be buried, all must be saved.

There's so much blood on both sides of this border, so much loss already endured. We see this war fought in the distance, but when death descends, it happens up close. Three weeks and counting. The pictures are painful. Three weeks and counting. So is the truth.

(END VIDEOTAPE)

COOPER (on camera): I want to thank Farah Nosh and Uri Lieberman (ph) for taking those pictures and all the help that they've given us while we've been traveling this last month or so. It's hard to believe it's already been just about one month.

Tomorrow on "AMERICAN MORNING," a new Oliver Stone film is opening tomorrow. The question is, is it too early? The film revolves around what happened on 9/11 and particularly what happened at the World Trade Towers. Some controversy about that film. They'll be looking at that on "AMERICAN MORNING."

Also, they'll have the latest on the war in the Middle East. And the implication for Democrats and other politicians of the defeat in the primary tonight of Joe Lieberman. That's on "AMERICAN MORNING," which starts at 6:00 a.m., East Coast time.

Thanks very much for watching this special edition of 360.

We will be in the war zone again tomorrow, as we have been, really since this conflict began. Hope you join us.

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