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Egyptian Protesters Defy Curfew; Oil Prices Surge in Response to Protests; Ruling Party's Headquarters Set Ablaze in Egypt; Protestors Have Calmed Because There 'Is No Government, There Is No Authority'

Aired January 28, 2011 - 14:00   ET


JIM CLANCY, CNN INTERNATIONAL ANCHOR: We want to welcome our viewers joining us from all over the world here on CNN.

We had been waiting for a briefing by the U.S. Department of State. We understand they've issued a travel warning, but at the same time, I understand that they've canceled their briefing.

HALA GORANI, CNN INTERNATIONAL ANCHOR: They've canceled the briefing, but we are still waiting for a White House briefing.

And welcome, once again --

CLANCY: That will take precedence anyway.

GORANI: -- to our viewers. Let's bring you up to date if you're just joining us on what's happening in Egypt, this crucial, key country in the Arab world, an important ally to the United States.

It is now plus 7:00 Eastern, so -- I always have trouble with that.

CLANCY: It's about 9:00 p.m.

GORANI: It is now 9:00 p.m. local time in Egypt, well into a curfew declared by that country's embattled president and vital U.S. ally, Hosni Mubarak.

CLANCY: Looking at a live picture there. A little bit earlier -- this is a videotape showing you some of the scenes that we have witnessed during the day -- upheaval, historic events, unprecedented. People have never seen this in their lifetime.

Many people in Egypt have never known a leader other than Hosni Mubarak. But thousands upon thousands of protesters took to the streets, defied the tear gas, the water cannons, the rubber bullets, and apparently at least a few live rounds to face off with Egyptian police to demand that Hosni Mubarak step aside.

GORANI: It started quietly enough, now a few months ago, in Tunisia --

CLANCY: It did, yes. GORANI: -- with the suicide of a young man in Sidi Bouzid. It then spread to the rest of Tunisia. Then Tunisian demonstrators were able to force out an authoritarian leader.

After Tunisia, we saw protests elsewhere. And now, most significantly for the Arab world, in Egypt we are seeing a large demonstrator presence and a military now -- the introduction of the military on the streets of the big cities in Cairo.

Ben Wedeman is with us.

Ben, it is now 9:00 p.m. your time in Cairo, Egypt. What is the latest there?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Well, what we see down the street is I see a large fire. I don't think it's a building. I think it's a poster of the ruling National Democratic Party whose headquarters is just about half a kilometer to the south of here.

We were watching as some of the protesters were trying to barge their way into state TV and the police station that guards that. Otherwise, we're not hearing as much tear gas being fired. The city seems a bit calmer. I'm seeing lots of traffic on the 6th October Bridge behind me.

The question at this point, Jim and Hala, is where is the Egyptian government? We were expecting to hear from President Hosni Mubarak on state television, addressing the nation. That has yet to come.

I've been speaking with senior Egyptian officials throughout the day, and I'm struck by their inability to really comprehend what's been going on. Every sort of specific question I've put to them was met by a "No comment," or "I'll get back to you," or simply "I don't know."

Yesterday I spoke to someone who's very close to Gamal Mubarak, a member of the National Democratic Party, the ruling party, and I asked him, "How do you view this situation?" And he said, "We're very concerned." And they're also concerned that President Mubarak has not done more to address the concerns of the Egyptian people.

Now, the same source at the ruling party told me that one of the reasons why President Mubarak has been so hesitant to address the nation is because he didn't want, in his words, to make a Ben Ali speech. If you recall, the last speech made by the Tunisian president, Zine El Abidine Ben Ali, was a speech that almost sounded like surrender and an admission that he had made mistakes for many years. So that may explain why President Mubarak has yet to speak.

CLANCY: Ben Wedeman, Jim Clancy here.

I think that the question that people are wondering about right now is, what do the Egyptian people think happened today on their streets? International analysts have all weighed in, but in the end, theirs is the most important opinion here.

WEDEMAN: Well, you know, I think that there was a lot of enthusiasm when the first demonstration took place on Tuesday, when many Egyptians -- and we're talking about people of every stripe of Egyptian society, Muslims, Christians, students, office workers, farmers, construction workers -- all sort of joined in to this protest. And it's amazing to think that in just a matter of four days, it's come to this, where the Egyptian government, which is so much a part of everybody's life here whether they like it or not, seems to have drifted away.

The police are gone. The army has taken its place. The Republican Guard has apparently taken up post outside of the TV station.

But the normal functions of the Egyptian state don't seem to be working at the moment. So, as I said before, where is the government? And where is its leader?

GORANI: All right.

CLANCY: Some of the questions probably being asked by the Egyptians tonight as well.


CLANCY: They have to be.

GORANI: Yes. And it's interesting to make parallels, although there are many differences between Tunisia and Egypt, interesting to make parallels between President Ben Ali, when he finally addressed his compatriots, the image that that projected, and President Mubarak, the man who's been in charge of Egypt for almost 30 years. Certainly a generation.

CLANCY: Ben Wedeman, you know, it should be noted Ben has lived in Egypt for, what, more than 15 years?

GORANI: I think more than 15 years on and off.

CLANCY: But he really knows the story well.

Our own Nic Robertson is also on this story, because one of the important facets here is this isn't limited just to the political capital of Cairo.

GORANI: Right.

CLANCY: One of the important economic centers, tourist centers. Alexandria also rocked by demonstrations this day, and that's where we find our Nic Robertson -- Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Jim, there's a couple of things that really stand out in the dynamic of today, and one of them was a moment on one of the back streets here with the police when the crowds were facing off against them. And I've talked about it a number of times today, but it really illustrates I think that turning point where the police realized that they couldn't face off against the demonstrators, that they actually felt sympathies towards them.

When one of the demonstrators stood between the rock-throwing crowd and the rock-throwing police with his hands in the air, it calmed the situation down. More protesters came in doing the same thing.

Young men tried to throw rocks. They were calmed down. And then they were standing side by side with police, patting them on the back.

But they couldn't stop the crowd throwing rocks, so it carried on and the police pulled back. And that was sort of a real moment of turning.

And then, earlier in the evening, almost a vacuum where the police had gone. They had been beaten off the streets. The protesters didn't know what to do. They started burning buildings, police stations.

And there very much appeared to be a vacuum of decision as well before the army came in, as they are now. And this whole sort of decision-making process is wait for President Mubarak to speak. It's sort of reflected here on the streets.

Who's leading, under whose direction? I think a lot of people on the streets here are wondering that.

Very strong questions going on between the people and the army. The army saying they're here to protect them. The people saying, yes, that's very good, but at the same time, saying, you can't be here for President Mubarak, we want him gone. But there's a very sort of apparent vacuum of direction of leadership at the moment -- Jim and Hala.

GORANI: And it's the same -- Nic, this is Hala. And it's the same thing with the protesters, right? Because it's sort of a diverse group of people. It's rather eclectic, frankly, now that the Muslim Brotherhood has joined in, because you have sort of the higher socioeconomic classes, you have younger, poorer people, you have people who have grievances with the government about the economy, but others who really have intellectual political issues with the government and are demanding more freedom.

So what about tomorrow? I mean, I'm curious now that the military has moved in, are demonstrators saying that they're going to again protest tomorrow, Nic?

ROBERTSON: Hala, I'm afraid to say it's very difficult for me to hear exactly what you're saying. But you mentioned the Muslim Brotherhood there. You may not have asked this, but let me pick up on that point.

When we've watched men trying to calm the crowds down, you get the impression -- and certainly we've had this from some of the people who have told us themselves -- that they are actually members of the Muslim Brotherhood. So the dynamic on the streets is that older members of the Muslim Brotherhood are calming the younger, more angry men down on the streets.

So if you're looking for a lead over who has sort of taken the lead on the streets and control, it's the Muslim Brotherhood. But, as you say, we've seen families -- I saw a middle-aged couple with their two young boys and two young daughters walking on the streets, coming into town to see what the army was doing there.

But everyone does seem very United in that one demand, that Hosni Mubarak, his family, anyone associated with his regime should go. They're not offering another alternative. But we're already seeing the Muslim Brotherhood, I think, take the lead, at least in trying to control the demonstrations on the streets.

GORANI: Nic Robertson is live in Alexandria.

Many countries, including the United States, watching very closely what's happening here. Who among that crowd of demonstrators, what party, what group, what person, maybe, will be the leader of the opposition? Right now nothing is more unclear in Egypt.

CLANCY: You're looking at the tweet deck alongside a live picture. Well, these are earlier, taped pictures there, but it's interesting. Look how fast stories include the tag "Egypt."

GORANI: Hashtag "Egypt," yes.

CLANCY: They're just rolling through there. People worried about this, concerned about it, following it. Many of them enthused about what they see as the dawn of change.

Clearly, we have witnessed a historic day for Egypt. More than one analyst has told us they haven't seen a day like this.

GORANI: All right. We are still waiting for the White House briefing. We understand it has been postponed. We're expecting Robert Gibbs to come up to the podium. This is the White House Briefing Room.

CLANCY: The State Department canceled.

GORANI: A live image -- absolutely. And we're going to ask our State Department producer why the State Department canceled its briefing after this.


CLANCY: Welcome back to our continuing coverage here on CNN of a dramatic day of what appears to be profound political change in Egypt.

The Internet was shut down from almost dawn, but these scenes unfolded on the streets. Tires were burned, sometimes buses or trucks, as demonstrators vented their rage against the regime of President Hosni Mubarak, their elected president. GORANI: And you are an amazing still photographer, Jim. And sometimes the still picture really tells the story almost just as compellingly, sometimes more so, than the moving image when you see sort of Cairo as you're used to seeing it on a Friday night, and then as it is today, with really rage-fueled demonstrations that have turned into somewhat of I guess a surprising, maybe, love-fest between the protestors and the Egyptian military.

CLANCY: Well, remember, a lot of those vehicles that we were just looking at there were police vehicles. Police used undercover people to attack the press, to attack the demonstrators. Plainclothes police filtering in among the demonstrators, then apprehending some of them. Mohamed ElBaradei is reportedly under house arrest.

We've had some dramatic developments as tens of thousands of people have taken to the streets calling for a change of regime, Hala.

GORANI: All right. Let's go to Elise Labott, because we were expecting a State Department briefing.

CLANCY: This matters to the U.S.

GORANI: Absolutely. And this, I understand, briefing has been canceled at the State Department.

Elise Labott joins us now with more on why.

ELISE LABOTT, CNN STATE DEPARTMENT PRODUCER: That's right, Hala. We were supposed to be hearing from the State Department just now, spokesman P.J. Crowley. We were just told that that briefing has been canceled. The Obama administration wants to wait for the Egyptian government, for President Mubarak to come out and address his people before they say anything else.

We did hear a little bit earlier from Secretary Clinton, because the administration is really walking a very fine balance right now between wanting to support the protesters, but not to speak anything too forward to suggest that the U.S. is looking for regime change. They're really focusing right now on the rights of the people on the streets, making sure that the government does not crack down. The administration wants to see the resumption of the Internet and social media.

Let's take a listen to what Secretary Clinton said just about a couple of hours ago.


HILLARY CLINTON, SECRETARY OF STATE: These protests underscore that there are deep grievances within Egyptian society, and the Egyptian government needs to understand that violence will not make these grievances go away.

As President Obama said yesterday, reform is absolutely critical to the well-being of Egypt. Egypt has long been an important partner of the United States on a range of regional issues. As a partner, we strongly believe that the Egyptian government needs to engage immediately with the Egyptian people in implementing needed economic, political and social reforms.


LABOTT: So not saying that President Mubarak has to go, but that he has to implement some reforms immediately.

The message right now to the Egyptian government is, even if you can weather this storm, if you do not take some reforms you are going to face a permanent resistance that is not just going to be the Muslim Brotherhood, as we have seen, but a permanent resistance. These groups could align together and really be an unpredictable situation.

Everything here in the administration being evaluated in real time. And really, officials are really questioning their long-held assumptions about this government, asking themselves hard questions. This is a government they have been very supportive of, but at the same time has really frustrated them on human rights interests -- Jim.

GORANI: All right. Elise Labott, thanks very much, at the State Department.

CLANCY: You know, as we were saying, Hala, right from the earliest morning hours we found out that the Internet had just been literally switched off. Some of the experts said you couldn't do it.

GORANI: Not just the internet. SMS, cell phone coverage.

CLANCY: Everything. Cutting down a lot of the communications.

GORANI: You needed a landline if you wanted to call someone in Egypt.

CLANCY: You can see the tweet deck though. It has not stopped people from communicating.

Let's cut over to the CNN NEWSROOM right now, if we can, Hala. Brooke Baldwin is standing by there with a little bit more information for us on that front -- Brooke.

BROOKE BALDWIN, CNN ANCHOR: Yes. Jim and Hala, it is such a challenge talking to some of the hardworking people we don't normally see in front of the camera here in terms of relaying messages back and forth to our crews in Egypt. And I was talking to Cindy Strand (ph), overseeing a lot of the behind-the-scenes coverage, saying it's really good old-fashioned picking up and phone and redialing and redialing and redialing.

Another amazing part of this story though -- and here is Mohammed Jamjoom, our intrepid correspondent out of Abu Dhabi who is with us here today to walk me through sort of some of these iReports that we're getting in -- because we're really sort of just seeing what a lot of these people on the ground are seeing, including this American tourist, Mohammed, who shot this video that you're about to show me.


This is really amazing video that we got a short while ago. This is an iReporter in Cairo, an American tourist.

BALDWIN: Look at that.

JAMJOOM: You can see this. Look at this, thousands of people going against armored personnel carriers, tear gas canisters being thrown at them. Reportedly, some of the protesters picked up the canisters, threw them back, trying to get across this bridge. This is the (INAUDIBLE) Bridge, trying to get to Tahrir Square, where the main protests were trying to being staged today.

This just shows you the level of anger that's going on there on this day of anger in Egypt, the level of demonstration and the mass movement of people that want to see this regime thrown out.

BALDWIN: Now, the other issue here, as we've been talking about, is Twitter. And we have a couple of different correspondents there in Cairo and Alexandria. And a lot of people now are following @BenWedemanCNN. And a lot of us have been wondering, how in the world is Ben even able to tweet, given the fact that so much of that is down in country?

JAMJOOM: That's right. It's been fascinating trying to get information from our crews in Egypt. They've been doing an amazing job there. But earlier in the day, Ben was using a very nontraditional way of getting this information on to Twitter.


JAMJOOM: He was literally calling through a landline to the international desk behind us. He was talking to Talia Kayali, who was the editor who was minding him this morning, giving her the tweets. He was tweeting by proxy.

She would type it into the Twitter account and it would come out. And throughout the day we've seen more and more people try to encourage this kind of alternative way of getting messages on to Twitter.

Let me show you.

BALDWIN: Show me the tweet, Mohammed, because this is how other people in other countries are trying to help those in Egypt tweet.

JAMJOOM: And this shows you how much support this is having in the Arab world right now.

This is a Twitter user out of Yemen, actually, where they've had their own protests the past few days against the regime there. This Twitter user says, "Egypt can use this number for dial-up. It's a dial-up reportedly for a French ISP. They can go there, use a password and user login name, and then get on line that way.

BALDWIN: So that is your old-school dial-up modem Internet. JAMJOOM: Very, very old-school.

BALDWIN: That's amazing.

JAMJOOM: And let me show you another tweet we had earlier as well. This is somebody who purports to be in Cairo.

The tweet says, "We were so scared yesterday that we would be completely disconnected, but somehow the world is watching us, and it feels great." Really showing the mood there. The people knew that there was going to be this crackdown, they might be without Internet. They were afraid they'd be completely isolated. But now they really feel hopeful in that the world is watching.


BALDWIN: We are. The world is most definitely watching.

And Aton (ph), throw that picture up. The picture --

CLANCY: Guys, before we get to that, let me just interrupt for a second here.

BALDWIN: Go ahead.

CLANCY: Because we want to tell people that Delta Airlines for one is saying, what, they're going to have one more flight --

GORANI: Yes. Here is the exact statement. "The last Delta flight will depart from Cairo tomorrow, January 29th. All other Cairo service is indefinitely suspended as a result of civil unrest. The resumption of service is TBD."


GORANI: To be determined. And I think it reflects, well, the State Department travel warning. The question is, how many other airlines are going to do that? How isolated could --

GORANI: There are reports of Egypt Air limiting service as well. But this is something that we haven't confirmed yet.


CLANCY: All right. Still expecting to hear from the White House. We'll get a better definition of all of this coming up in a few minutes.

We're going to take a short break. Hala and I will be back after this.


CLANCY: Welcome back to CNN as we continue our coverage of events that are unfolding in a key U.S./Arab ally. Egypt, right now, a nation of 80 million people, has seen unprecedented protests that call for the stepping aside of President Hosni Mubarak, who has been at the helm of Egypt for some 30 years.

I want to bring in Amir Ahmed, who was born and raised in Egypt. He is also one of our editors on our assignment desk.

And Amir, I understand that you are still at the airport there in Cairo. Tell us about the scene there. What did you see there?

AMIR AHMED, CNN PRODUCER (via telephone): Yes. I arrived, Jim, about four hours ago, with huge police and security presence all the way from the plane. They took us on a bus.

Police and security personnel were lining up against the airport building, all the way to the airport. And then from there, when I left by car, from the airport to an area called the Sheraton (ph) residence buildings, which is really considered where Cairo proper begins.

I also saw people in cars and on foot right around the airport area trying to enter the city. And they were turned around by police and security officers. Some people are spending the night tonight at the airport because they can't really find rooms available in nearby hotels.

CLANCY: All right. Amir, so somewhat trapped at the airport right now. And we understand that the flights will be even fewer.

But you also have there an audience of people that is very important for perspective. Eighty million people live in Egypt. Perhaps 80,000, perhaps 160,000, perhaps hundreds of thousands turned out on the streets to protest. But so many others didn't. What are they thinking? Did you have a chance to talk with them?

AHMED: I did. The airport (INAUDIBLE) talking about the curfew and what people think about the current situation. So they didn't really participate in the protests, they told me.

But in general, they do sympathize with the protesters greatly. But the complaint in general is about the violence and what that caused to just ordinary people.

But some believe actually -- and of course we can't confirm this, but some believe that a lot of those who are responsible for the looting and the violence that happened today are plainclothes security officers, or people hired by them. Of course, again, we can't really confirm this at all, but that's what people who are talking on the streets think talking about, because if the damage is indeed done by people who were hired by security personnel, it makes the protesters (INAUDIBLE).

CLANCY: You know, very quickly, Amir, tell me something. If not Hosni Mubarak, who do they think should be running the country?

AHMED: (INAUDIBLE) over the last 30 years the opposition has oppressed. The people are not really talking about one figure. Of course, ElBaradei has been mentioned, but too many people think he's more of a bureaucrat than somebody who is charismatic enough to lead this country, which favors usually charismatic leaders.

CLANCY: OK. All right.

Amir Ahmed joining us there on the line. He's there, has been there about four hours at Cairo International Airport.

Amir, thanks so much for checking in with us on that.

When we come back, we're going to be talking with Jamie Rubin, a former U.S. State Department diplomat, someone who can give a little bit more perspective to us on what's happening in Egypt right now.




CLANCY: Demonstrators are calling it a day of rage.

Here are the key five points you need to know about what's happening right now: Riot police have been firing tear gas and water cannons at thousands of protestors and running street battles all day in Cairo and other cities. And, for the first time today, the Egyptian army moved into the streets.

GORANI: Well, demonstrators throughout the day were throwing Molotov cocktails at police trucks and buildings, and thousands remain in the streets, and that is significant because they are defying a government-imposed curfew. They are demanding that President Hosni Mubarak and his 30-year hold on power and step down.

CLANCY: Now, Mubarak, 82 years of age. He first came to power in 1981, that was after the assassination of Anwar Sadat. He's received strong support from the U.S. and other western governments in large part because of continuing peace with Israel. At home, he's ruled, though, with an iron fist.

GORANI: Right. And in the name of stability as well, many of these western governments prefer the stability of Mubarak versus potentially the instability of the alternative. Critics have been routinely jailed however in Egypt. There has been -- and very little change has come through --

CLANCY: Only internal the change. Yes.

GORANI: Right. And the opposition to Mubarak has been fractured. It has no overall leader. But, of course, Jim, as you well know and many of our viewers know, who follow events on Egypt, the most organized and strongest opposition group is the Muslim Brotherhood.

CLANCY: But they didn't lead this week's demonstrations. And it's important to note that this week's demonstrations are the largest seen in decades. They finally joined in, the Muslim Brotherhood, on Friday, the day of prayer there. Key reform advocate Mohammed ElBaradei returned to Cairo from Europe just yesterday.

GORANI: Right. Well, he, of course, is a Nobel Peace Prize winner.

CLANCY: As well-known.

GORANI: Very well-known outside of Egypt, a very recognizable name and face, internationally, the head of the IAEA.

Now, what you can see there on your screen as well is the briefing room at the White House. We're expecting the White House press secretary to come to the podium and brief journalists, the United States, and really the rest of the world on what the White House and President Obama is thinking right now as these events --

CLANCY: This is going to be interesting.

GORANI: -- yes -- unfold in Egypt.

CLANCY: Why is it going to be interesting? The U.S. has backed Egypt for decades, the reason being, of course, the Camp David peace accord that started it all off. Egypt gets approximately the same amount of aid that Israel gets every year, some $3 billion.

GORANI: One-point-three billion of which is in military assistance.

CLANCY: That's right. And Egypt has contracts, they produce tanks. They do other things. They make money, work together with the United States. And they give the United States advice.

It was Hosni Mubarak, and Hosni Mubarak, you know, has never failed to remind U.S. presidents, he said, don't go into Iraq. He has lent advice. He's been a valued ally of the United States.

GORANI: Let's go to Jamie Rubin who is in New York with more on, of course, the former U.S. assistant secretary of state.

But the State Department briefing was canceled. Why do you think that is?

JAMIE RUBIN, FMR. U.S. ASST. SECRETARY OF STATE: Well, before we answer that directly, it's also worth pointing out that Hosni Mubarak didn't think Saddam Hussein would invade Kuwait and advised the first President Bush that Saddam Hussein would never go in.


GORANI: So, does that make it even?

RUBIN: I don't know.

CLANCY: Jamie, you were there. You do know. That's an important thing to point out. He wasn't always right. But sometimes, right in the Middle East, does count. RUBIN: That's right. I think that it's interesting that the State Department briefing room is quiet. And I think what's going on here, it's a sensitive diplomatic dance between the department and the White House when an important event happens abroad.

You may remember that in the spring 2009, when the demonstrations were going on in the ground in Iran, and Hillary Clinton had just started off as secretary of state, it was President Obama himself who dictated every different signal the White House gave over the course of a week on the demonstrations and the potential change in Iran, giving one interview here, speaking one there, and he dictated very directly the U.S. reaction to those events on the ground.

Now, because Hillary Clinton had an event today, she was able to make an important statement. She's also made an important statement in the region when she said that the Arab governments need to understand that they are based on sand and could collapse any day. Now, that looks very prescient

But the problem is there's a great fear that is driving the aides below Clinton and President Obama, they can't figure out which is worse -- to be behind the curve if democratic change comes to the Arab world or to alienate President Mubarak if he ends up in power. And so, they're worried -- and I think that's caused this sort of back- and-forth over the course of the last several days, where one day it seems like they're standing back and right now, today, I think Hillary Clinton was leaning forward, but not really leaning forward.

Let's remember the United States gives, as you said, billions of dollars of military assistance. They can talk about that when the military of Egypt is on the ground. They can talk about what would be cut off and what would never come again if the military were to use force against the protestors. They haven't done that yet. They could make many, many other statements besides hortatory urgings.

Right now, all they're saying is they're concerned, no violence, we need reform. That seems to me the minimum that we would expect. If you see a real change on the part of the administration, it will be when they begin to lay out a transition. And they haven't done that yet.

GORANI: All right. Jamie Rubin, thanks very much.

We will talk with Jamie, of course, throughout the coming hours, hopefully with more analysis and perspective on why this is important for the United States and the tightrope that the United States is walking, because as Jamie mentioned, it's a question of, you know, waiting things out, because alienating Hosni Mubarak, if he does end up remaining at the helm there in Egypt is potentially a risk the Obama administration does not want to take right now.

CLANCY: And, Hala, you can bet, if it's important to the United States, it's about twice that important to the United States' biggest ally in the region, Israel.

That's where we find our Kevin Flower, our Jerusalem bureau chief.

Kevin, the perspective -- the concern there tonight?

KEVIN FLOWER, CNN JERUSALEM BUREAU CHIEF: Well, Jim, probably the concern is great, but Israeli officials are not sharing that concern right now. The Israeli prime minister's office, the foreign ministry, all quiet right now, reserving comment, only saying that, "We are watching events closely," and you can imagine that they are watching events extremely closely.

Israel shares a large southern border with Egypt. It is its closest ally in the region. It has peace deals with only two countries in the region. That's Jordan and Egypt. Egypt has been a crucial ally, albeit a cold relationship for the past 30 years, a crucial ally just the same, giving Israel a -- that relationship with Hosni Mubarak is one that's given Israel and the past eight prime ministers who has served here during Hosni Mubarak's term as president has given a sense of stability to Israel's what it often considers its fragile position here in the Middle East, Jim.

CLANCY: You know, Kevin, it is a fragile position. Egypt has played a very strong role, if you will, in calming things down on that border. Israel's talk about this has been a cold peace and all of that. But have they, too, counseled the Egyptian government about the need for change -- a change in the style of leadership, opening it up to an opposition? Or do they even talk about that?

FLOWER: Well, various prime ministers and the current prime minister, Benjamin Netanyahu will make the trip, you know, trips to go see the Egyptian prime minister there in Cairo or Sharm. And democratic reform is something that is never on the agenda or something that is never shared with the press of being on the agenda when those two -- when those leaders talk, when the Israeli prime minister and Egyptian president speak.


FLOWER: It is usually about the Palestinian/Israeli peace deal. It's about Iran. It's about the border. It's security issues. And that's what this relationship has been about, first and foremost, Jim.

GORANI: And you mentioned -- you mentioned -- this is Hala, Kevin, by the way -- you mentioned the southern border there that Egypt shares with Israel. But right there is Gaza as well, and the role Egyptian security forces has played in securing and even closing up that crossing point as far as Israel is concerned has been important to them.

FLOWER: Absolutely. The Egyptian government, you know, has been an ally -- sometimes a reluctant ally, but an ally just the same in trying to stem the flow of what Israel says are arms to -- are arm groups in the Gaza Strip, militant groups like Hamas, Islamic jihad, et cetera.

And so, with all of the events taking place in Egypt today, what analysts are looking at here today, what the Israeli government is looking at is what's going to happen, not necessarily today, tomorrow, but who in the coming days is going to -- who is going to step in here. Who -- if there is a political vacuum that's created, who is going to step in. Is it going to be Islamist groups? Is it going to be the army?

And, of course, the concern here is about a growing Islamist influence in some of these -- sort of these mass protests we're seeing in the region. Of course, today, there are protests in Jordan -- neighboring Jordan, not nearly as sizeable as what we've seen in Egypt. But still, another area of concern that Israel is watching closely -- and, of course, all of the events in Lebanon and its northern border.

GORANI: Kevin --

FLOWER: This is a troubled time for the region and Israel is watching closely.

GORANI: Kevin, thanks very much.

You know, one foreign minister of an Arab country, we're not allowed (ph) to quote him, so I won't quote him, said this regime is finished. The military is probably going to take over and that will be the interim leadership. So, it will be interesting to see --

CLANCY: I've been in the Middle East and you have, too, to know they don't make predictions like that often. All right. We will see --

GORANI: That's why I'm not quoting him.

CLANCY: All right.

GORANI: All right. We'll be right back.

CLANCY: We're back with more of our special coverage right after this.


CLANCY: Welcome back to our continuing coverage of the crisis in Egypt this day, as tens upon tens of thousands of Egyptians poured into their streets. You're looking at some video being rebroadcast by Nile television. That's Egyptian state television that took a pretty bold step here earlier in the day and decided to broadcast scenes of these demonstrations calling for the ouster of President Hosni Mubarak. They showed them on national television.

GORANI: And this is state television with wall-to-wall coverage of demonstrations against the state.

CLANCY: One way perhaps someone in the regime of President Hosni Mubarak thought that it would be the best way to answer these protests to open up. Another way may have been they told the police, who are much disliked by the people, the demonstrators on the streets to make way. They moved the military in there. The military has been embraced after the police, whose van you see rocking here, the police saw many of their vehicles set ablaze.

GORANI: We are still waiting for this White House briefing, I should, to commence. We understand from our John King there who contacted us that many high-level calls are -- is John on the phone? Ed Henry, I'm sorry.

Ed Henry, what is the latest? When can we expect this briefing to start?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (via telephone): Well, Hala, we don't know. The White House has said that basically they've delayed it indefinitely. Earlier, when I spoke to Robert Gibbs, he was going to have the briefing at 1:00 p.m. Eastern time, that was the original schedule. He said he pushed it back to 2:00 p.m. because he was hoping to get a senior national security official or another high official to join him at the briefing to talk about Egypt. He knew he would get a lot of questions on this. But then right before the 2:00 briefing was supposed to start, they delayed it again.

And our understanding now is they're just trying to sort out exactly what they want to come out and say on this. They realize it's a very volatile situation. The last thing they want to do is make it worse. They want to come out and just find the right balance there.

But part of it, obviously, is what's transpired over the last couple of hours. The situation on the ground has gotten a lot worse, number one. But number two, President Mubarak was supposed to come out, as you've been reporting, and given some sort of speech to the Egyptian people by now and the world, obviously, by extension, and that has not happened yet.

So I think that is obviously complicating the situation because if it knew inside the White House what President Mubarak was telling his people right now, they'd have a better handle on exactly how they wanted to react. The last thing they want to do now is come out and then have President Mubarak speak a short time later.

GORANI: Right.

CLANCY: Ed, I've got to ask you, I mean, this is the U.S.'s most important ally in the Middle East. Has the president called his counterpart Hosni Mubarak?

HENRY: I asked that question this morning, and I was told by White House officials that the president has not called President Mubarak yet. The reason being they have intermediaries who are speaking to one another right now, and President Obama is sending a signal through these intermediaries, diplomats, et cetera, that he has deep got concern about the situation on the ground.

I expect, based on previous situations like this, although there hasn't been anything quite like this in quite some time, but where there have been crises, a U.S. president doesn't necessarily want to get on the phone directly with a counterpart because it may complicate the situation further. You know, and you may want to let them take care of their domestic issues and see how it plays out.

At some point, though, obviously, if it starts spiraling, then there's more pressure on the U.S. president to get on the phone with that leader, and maybe for that U.S. president to come out and make some public comments.

All we've had from President Obama so far is it the somewhat brief comments he made yesterday in the dialogue with YouTube where he took some questions from the general public. And there was one question on Egypt where he gave a very basic, moderate statement about how there shouldn't be violence by the protestors, there shouldn't be violence by the government, that President Mubarak's government and his country have been key allies for the U.S. but that they have to embrace reform.

That's been the pretty basic position so far. That was before what we've seen transpire over the last few hours. That obviously going to put more pressure on the president himself to come out himself and tell the world what he thinks about all of this.

GORANI: All right. Waiting on the White House.

We've got to take a break here as on the right-hand side of your screen there you see a live picture of the White House Briefing Room. On the left-hand side of your screen, images of protests that have unfolded over the last several days in Egypt, in major flashpoints in Cairo, Alexandria, and Suez, demanding the ouster of Hosni Mubarak.

We've got to take a short break and we'll go once again live to Cairo after this on CNN. Stay with us.


CLANCY: Welcome back to our ongoing coverage of what is happening in Egypt. And we must say, when it comes to stability, that's what the markets like and they don't like what they're seeing in Egypt right now. It is not all of what you see there on the Big Board, Dow Jones Industrial Average down 1.25 percent, but it's some of it.

GORANI: I know we're going to go to Alison, but one of the things I did notice reading the developments about Egypt is that a ratings agency has downgraded the debt of Egypt. This, of course, means they are less confident that Egypt is economically viable in the face of this civil unrest.

So a lot of worry surrounding that. Egypt is already having issues working through its economic problems, and it is going to have issues now taking in tourism dollars because people are canceling their holidays, and then as far as the Egyptian stock market is concerned it is also losing ground.

CLANCY: All right, let's check in with Alison Kosik, get a better view here of what's happening on the market.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hey, Jim and Hala, you're exactly right. It's all about Egypt today on the markets, even here on Wall Street.

And as you said, Jim, you know, the market just hates instability. It's political turmoil that makes everybody nervous here, especially right before the weekend. So we're seeing a sell-off on the Dow, the Dow down about 140 points.

What you're seeing is investors, they're taking their money off the table, they're putting it into safer investments, they're pouring their money into Treasuries. The dollar is up, we're watching gold soar. You know, investors just don't want to leave their money in risky stocks over the weekend because they're worried that these clashes in Egypt could just escalate.

We're also watching oil prices, they settled close to $90 a barrel, up $3.70. Oil is definitely a volatile commodity that investors are definitely keeping track of.

CLANCY: Alison Kosik there at the New York Stock Exchange, thanks much for that.

And Hala, let's get an update. What is happening on the ground?

GORANI: Let's go to Fredrik Pleitgen, he is live in Cairo with the latest.

Hi there, Fred.


And we've just heard from Ben Wedeman, who is now roaming about the city getting some more video and talking to some people, that apparently the national party headquarters, of course, that is the party of Hosni Mubarak of the ruling party, appears to be on fire. We've been hearing reports before that there was fire in front of the building. Now it appears that the building itself is on fire and that there are skirmishes going on there as well.

Right here in front of our own building, as you can see, the crowds are sort of dispersing somewhat. We did, of course, have some massive scenes here throughout the evening until the military finally rolled in. That really dispersed the situation.

But I can tell you, I was on the ground for a lot of the times when the fighting was really going on. There was really a sense by a lot of the demonstrators that I spoke to that the Egyptian security forces are not invincible. And it was really interesting to see how these people were galvanized, how they were beating back the police, in some cases after the police had fired tear gas on them. Then the protestors would start charging as we were there when they actually captured a police vehicle and beat up that vehicle and then eventually set it on fire.

So we spoke to a lot of people who said that they feel that right now is the time that they had to fight for change. Interestingly, some of them told us that they didn't believe that the president necessarily would have to step down, but they did say that they felt there had to be fundamental change, Hala.

GORANI: Frederik Pleitgen, thanks very much.

You are on the right-hand side of your screen seeing live images coming to us from the White House. We're expecting that briefing to start at 3:00 p.m. Eastern, in six minutes time.

CLANCY: Let's get down to the streets, though, in Cairo right now. We -- this has been an unprecedented day.

There's really only one political party in Egypt, the party of President Hosni Mubarak, and it was set ablaze apparently in Cairo. That's where we find our Ben Wedeman.

Ben, what are you seeing there in the streets?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): I'm in front of the headquarters of the National Democratic Party that has ruled Egypt for decades. And it (AUDIO GAP). The crowd is saying it was the police, not the (AUDIO GAP) --

CLANCY: All right, we're having some real difficulties hearing what Ben has to say there.

He had reported in to us a little bit earlier that the headquarters of the National Democratic Party had had been set ablaze. There he's telling us that the protestors that have surrounded that building are saying it was the police that did it.

Ben, are you still on the line with us?

WEDEMAN: Yes. I'm still on the line, with you, Jim.

CLANCY: I'm sorry, we've got some bad communications here.

What kind of mood are the protestors in this hour?

WEDEMAN: Well, they're not even really (AUDIO GAP). There are no police around here. Not a single one. And people, a lot of them are taking pictures with their cell phones (AUDIO GAP) don't work at the moment. And there's another group who are actually trying to loot computers and office furniture from inside the headquarters itself.

Now, one interesting story, (AUDIO GAP) inside yesterday. We attended a press conference put on by Safwat al-Sharif, who is still, I guess, the secretary-general of the National Democratic Party. (AUDIO GAP).

CLANCY: Once again, we're having some problems with communications there -- Ben.

WEDEMAN: Never mind. Yes, yes?

CLANCY: Well, Ben, we are hearing you a little bit, and it's very important that we hear what you have to tell us about on the streets.

It would seem that for this day, for this day, things have calmed down substantially where you are in Cairo.

WEDEMAN: Jim, they've calmed down because there is no government, there is no authority. There are no policemen. The army soldiers and the Republican Guard have taken positions outside the Foreign Ministry, outside state television.

But there's no protests because there's nobody to protest against. It would seem that at least state authority in much of downtown Cairo has disappeared. We have looters. We have people who are also just spectators. But no sign, no evidence of any authority figures whatsoever.

Jim, I have to leave this area because things are a little dodgy, OK?

GORANI: Ben, I've got to ask you, there's looting going on in that building. There have to be fears with the museum, with all these very precious and unique structures in Egypt.

I was hearing reports that there was some civilian sort of chain forming itself around the Cairo Museum to try to protect it from any eventual looting. Have you heard that yourself?

CLANCY: Afraid Ben has had to get off the line. He was talking about a dodgy situation there.

He started out his day, he, Mary Rogers and some of the other crewmembers really set upon by security forces on the street, a camera stripped out of their hands, smashed on the streets. And boy, it's been a tough day for our correspondent there, Ben Wedeman. But no better person to cover this story, Hala.

GORANI: Right.

CLANCY: I'm telling you, he's got the background, he's got the knowledge ever the government, the players, and the people of Egypt. He sees this story in great perspective.

GORANI: We are going to take a short break.

We're waiting on that White House press briefing to start any minute now. We'll be right back.

You're with CNN and CNN International, and we have that Egypt story covered for you with all of our correspondents fanned out across Egypt and around the world.

We'll be right back.