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Battle for Libya; Syria Violence; Crunch Talks Between Nicolas Sarkozy and Angela Merkel

Aired August 16, 2011 - 23:00:00   ET

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


KRISTIE LU STOUT, HOST: Welcome to NEWS STREAM, where news and technology meet.

I'm Kristie Lu Stout, in Hong Kong.

Now, a new tactic in Gadhafi's fight against Libyan rebels. Security forces file a Scud missile at the opposition.

Investors' eyes are on Paris as the French president meets the German chancellor. Will they be able to thrash out a deal to solve the European debt crisis?

And as the World Food Program investigates claims, food for Somalia's starving is being stolen. We'll show you the life-saving supplies meant to stave off malnutrition.

The U.S. is confirming that Libyan forces fired a short-range Scud missile, but it appears to have missed its target. A NATO official calls it a desperate move.

Now, meanwhile, Egypt state media report that a senior Libyan government official arrived in Cairo with his family on Monday. There are rumors he defected.

Rebel forces claim that they're making major gains in key Libyan cities. Let's look now at where some of the biggest battles are being fought.

Now, forces loyal to Moammar Gadhafi still the hold the capital, Tripoli, and the opposition movement is strongest in the east. That's near Benghazi. But let's zoom in and take a closer look at the west of the country now.

Rebels claim that they're close to taking over this coastal city of Zawiya. Now, that town, it sits on a major supply road to Tripoli. And to the south of Tripoli, rebels also say they're gaining control here in Garyan. But reporters on the ground say it is still hard to tell who is in control, and the government in Tripoli is downplaying claims of rebel victories.

Now, CNN's Matthew Chance is there in Tripoli now. He joins us live.

And Matthew, are the rebels regaining momentum?

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Well, it certainly seems that they have over the past 72 hours or so made those significant military advances, particularly in the west, in that town of Zawiya. And that, to some extent, gives them the momentum. It's kind of caught the Gadhafi loyalists on the back foot.

I think, Kristie, the big question now is whether the rebels can hold on to these gains. Remember, they've been backed by pretty significant NATO air power. That's managed to get them into a position where they can push back the Gadhafi armed forces. But can they still hold those areas? Do they have the numbers required to do that?

That very much remains to be seen, and is really the big question that is being asked now. If they can, they will effectively have Tripoli, the Libyan capital, in a stranglehold and can essentially lay siege to it.

STOUT: Very key point you raise there, not only how much territory they have, but how long they can hold on to it for.

Now, separately, Matthew, the United States confirmed that Libyan troops fired a short-range Scud missile. So are we seeing a change in tactics from Gadhafi's forces?

CHANCE: Well, it's certainly the first time that Gadhafi's forces have used a ballistic missile in this six-month-old conflict. And so, in that sense, it marks a new departure. It could be a sign of desperation. It could be a sign that Colonel Gadhafi's forces are now prepared to use that arsenal of Scud missiles which they're known to have. They bought several hundred of them back in the 1970s from the Soviet Union, and they've been in storage.

There's a few problems associated with them. They're very difficult to target. They set a long time to set up to fire. This one, in fact, according to the U.S. warships that monitor this progress from Sirte to the port city of Brega, says that the missile missed its target by 50 miles and landed in the desert, harming no one.

And so it's going to be a challenge using these missiles. And of course they'd be exposed to NATO air power if they're brought out into the open. But certainly it's an ominous development.

STOUT: Also, a top Libyan security official appears to have defected in Egypt. What have you heard about this official? And, if true, if this is another high-profile defection, how much support does Colonel Gadhafi have left?

CHANCE: No, it's a good question. And, in fact, officials here in Tripoli have been downplaying the suggestion this is a defection, but clearly that's what it looks like.

This figure, Nasr al-Mabrouk Abdallah, who's a senior figure in the country's Interior Ministry, arrived in Cairo, according to the Egyptian news agencies, with nine of his family members on a private jet from Jerber (ph), in Tunisia, to the west. And so he wasn't met by embassy officials. He was there on a tourist visa.

And what officials here in Tripoli have said is that they believe he was under a great deal of what they call social pressure. They also believe that foreign security forces, intelligence agencies, had encouraged him to leave. And so they're not exactly calling it a defection, but that is sort of the working assumption, that this figure has defected. And if that's the case, then that certainly represents a blow with some high-ranking official like this leaving Colonel Gadhafi's side.

STOUT: Matthew Chance, joining us live from Tripoli.

Thank you.

Now, in Syria, five more people were reported killed in the northwestern city of Latakia today, and the U.N. says that more than 5,000 Palestinians have fled a refugee camp in the area. That's something the Syrian government denies.

Now, the crackdown there in Latakia has been going on for days now, and Syria's neighbors say that they have had enough. Jordan and Turkey are among the latest countries to join the international community in calling for an end to the violence.

CNN cannot independently confirm the reports of atrocities inside Syria, and we're no longer allowed inside the country. But our Arwa Damon is following events closely from Beirut, in Lebanon.

And Arwa, what is the situation at that refugee camp in Latakia?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Kristie, I think one of the most disturbing factors in all of this is that, quite simply, we don't know. We do not have an accurate picture of what is taking place, and neither does the U.N. refugee agency, which is why they are saying that it is critical that the Syrian government allow them unhindered access to that refugee camp. They say that they received numerous reports that because of the military onslaught, there were numerous casualties.

They have various reports that thousands had been forced to flee, but they have absolutely no concrete information as to what happened them, and that is why they're raising a very loud alarm bell, urging the Syrian government to let them in. But at this point, they say that the Syrians have largely been unresponsive.

We were speaking to an eyewitness from Latakia earlier in the day. He was informing us that there was ongoing shelling from the direction of the sea. Gunfire, very intense throughout the night and into the morning.

We have also received numerous reports from residents of al-Ramel neighborhood -- that is in the southern part of Latakia, and it is the area that has borne the brunt of this onslaught -- that people there, as they were trying to flee, hundreds of them, mostly men, have been rounded up. And it seems as if they've been effectively corralled into a stadium, their cell phones and their IDs taken away. That, of course, also causing great concern as well.

The Syrian government, for its part, is denying that it is using its naval forces in this military crackdown. It says that it is simply combing through this and other neighborhoods in this ongoing pursuit of what it is calling terrorist-armed gangs that it continues to blame for the unrest -- Kristie.

STOUT: Arwa, Jordan and, notably, Turkey have now joined the U.S. and the U.N. by calling an end to the violence there. But what impact will they and especially Turkey have on Damascus?

DAMON: You know, Kristie, Turkey came out with those harsh, stronger words yesterday, saying that the bloodshed, this military campaign, has to end immediately and unconditionally. Turkey, in that statement, really leaving very little room for the Syrian government to try to continue its military campaign if, from Turkey's perspective, it wanted any sort of negotiations to continue moving forward. But then we look at what is continuing to transpire today, and it most certainly seems as if this regime is not going to alter, is not going to move off its current military course. So, at this point, the big question becomes, what is the international community going to do?

The U.S. has been urging sanctions, calling for sanctions on Syria's energy oil sectors. We have also heard that call from organizations like Human Rights Watch. That, perhaps, could deliver a severe economic blow that would potentially, perhaps, force this regime to stop literally shooting at its own people.

What analysts will tell you though is that the fact that the government continues in its military onslaught is an indication of just how desperate it has become. And analysts will also say that in having chosen the course of violence, the government is effectively leading to its own destruction. It is isolating itself both domestically and internationally.

STOUT: Arwa Damon, thank you very much indeed.

Arwa there with the latest on the unrest inside Syria and the need for a meaningful international response.

Now, the U.K. riots may be over, but the search for looters and others who broke the law is escalating. London's Met Police, they have released disturbing footage of two officers being mowed down by a car.

Now, this video, it shows a group of looters. They're raiding a store in northeast London. And as the police respond, a car appears from the left of your screen, pitting the two officers, one of whom is left lying there on the road, his body armor scattered.

Police describe the act as attempted murder and hope that this footage will prompt witnesses to come forward. The injured officers are now recovering.

Now, a man accused of an elaborate bomb hoax in Australia will appear in court today. Some 9,000 miles away, in the U.S., FBI agents, they tracked down Paul Douglas Peters near Louisville, Kentucky, on Monday. Police say that the 50-year-old Australian, he flew to the U.S. just days after he had broken into a home in a Sydney suburb and strapped a suspected bomb around a teenage girl's neck, along with a note demanding money.

She spent some 10 hours wearing that device which turned out to be a fake before authorities removed it. Her father thanked police for their hard work.

(BEGIN VIDEO CLIP)

BILL PULVER, FATHER OF BOMB HOAX VICTIM: On behalf of Maddy and the entire family, we are enormously relieved that an arrest has been made in the United States overnight. These past two weeks have been a very difficult time for us, and we're hopeful that this development marks the beginning of the end of this traumatic ordeal for our family.

At the outset, I want to express our gratitude to the officers, the New South Wales Police Force, and Strike Force Haddon. Their professionalism, support and dedication has been truly amazing and inspirational, and we cannot thank them enough.

(END VIDEO CLIP)

STOUT: Australian authorities say they hope to have the man extradited from the U.S.

Now, coming up on NEWS STREAM, we are talking eurozone debt, as well as crunch talks and kissing habits between Nicolas Sarkozy and Angela Merkel.

U.S./Pakistan relations have been even more tense since U.S. forces killed Osama bin Laden on Pakistani soil, and now we'll tell you how China and this downed helicopter have stretched relations even more.

And as aid supplies run low in Somalia, we'll show you a high-calorie paste that is substituting as food for many and saving lives.

(COMMERCIAL BREAK)

STOUT: Welcome back.

Now, it has been a volatile time for the stock markets, and this is how things stand in Europe at the moment.

As you can see, all the major indices are pointing south. For example, the FTSE is down almost 1.5 percent. The Zurich SMI, trading lower, some .9 of one percent. And Paris, the CAC 40, down more than two percent, and the Xetra DAX losing 2.75 of a percent.

Investors are remaining cautious ahead of crunch talks between the German chancellor, Angela Merkel, and French President Nicolas Sarkozy. They are meeting in Paris today to discuss the eurozone debt crisis.

And that is where our Nina Dos Santos is with more.

Nina, what is the latest coming out of the talks?

NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Well, first of all, they haven't actually begun those talks yet, Kristie. They're going to be starting those talks in about one hour, forty-five minutes from here in Paris.

And, of course, as you just said, the direction that the markets are pointing in at the moment really gives you an indication of exactly how much is riding on these talks. It's being billed as crunch time for this currency.

It's the single currency, the euro. Seventeen nations share it as their common currency, some 320 million people across this region use it on a daily basis.

But despite the fact that we have a monetary union here across the eurozone, we don't have a fiscal union. And that is one of the things that's going to be on the agenda, because economists and market makers all say that that is what is undermining the debt markets for all these different 17 nations. Countries like, for instance, Italy have to pay five percent to borrow for 10 years, whereas countries like Germany, that are viewed as more fiscally prudent, and perhaps healthier, only have to pay about 2.3 percent.

Now, one thing that may perhaps force the German chancellor's hand today is the fact that we had German GDP figures coming in much worse than expected. The country barely grew at all. Nicolas Sarkozy, the French counterpart, will be feeling in a similar situation, because we learned on Friday that France's economy flat-lined in the second quarter, and that just goes to show how serious the situation is here in Europe.

A lot of people are very worried that this with kind of anemic growth, it's going to become increasingly difficult for all these 17 nations to balance their burgeoning debt piles and rein in their deficits as their austerity plans demand -- Kristie.

STOUT: Yes, very worrying announcement out of Germany, especially being that the country has been a driver for the eurozone economy.

What will be the outcome of this meeting later today in Paris? Nina, will there be a concrete deal or announcement?

DOS SANTOS: Well, that's what the markets are desperately trying to price in. What they really want to see is the German chancellor and the French president make some kind of comment about what is being billed as euro bonds, or jointly-issued bonds by all of the 17 nations across the eurozone.

What has become increasingly difficult to sustain is a situation in which you have countries like, as I was saying, Spain and Italy, that have to pay more than twice the amount in terms of percentage interest to investors to borrow on the open markets than other countries like Germany, that share the same currency. They're saying that that is unsustainable, and they want to see a number of the eurozone's existing debt -- I should mention, $13 trillion worth of debt. That is what the eurozone's debt pile is in total if you tally up all the countries. They want to see that eventually, perhaps a portion of it, reissued under one banner with one yield.

So far, the German chancellor and the French president have been saying that the topic of euro bonds will not be approached in this particular summit between the two leaders, but you can bet it's likely to come up at the press conference, Kristie. That will be happening at 6:30 local time, and you can bet that people will be asking whether they're eventually going to consider that once we get some kind of fiscal cooperation going forward.

STOUT: All right.

Nina Dos Santos, on the story for us, live from Paris.

Thank you, Nina.

Now, as world leaders go, they are one of the cozier couples. When Nicolas Sarkozy and Angela Merkel get together, you can usually expect a bit of this. It is a very French tradition, but it may no longer be acceptable over the eastern border.

German etiquette advisers the Knigge Society have called for a ban on workplace kissing, saying even an old-fashioned peck on the cheek makes many of their compatriots feel uncomfortable. So next time Merkel has a standoff with the ECB over Greek debt, let's say, your policymakers will have to hope they will simply hug and make up.

Now, we have had a day to digest Google's massive acquisition of Motorola's handset business, but why did Google go for the kill? Is it for the patents?

Well, you don't need to spend $12.5 billion just for a patent portfolio. If Google wanted that, it could have entered a partnership with Motorola.

Google purchased Motorola Mobility for its search business. Let me explain.

Google's core business is search -- or rather the money it makes from advertising in search. Google's own sites raked in 69 percent of its revenue last quarter. That's about $6.25 billion. And Android, it makes just a fraction of that.

So why spend so much on it? Let's take a look at the Google universe.

It's not just Google.com. You have Android, YouTube, Gmail, Google Maps, as well as the Chrome browser. And all these properties lead users back to Google.com.

Take Android, for instance. Now, Google Search is built into this mobile operating system, so if you have an Android phone, you have to use Google.

And if you're in Google Plus, then why go to Bing, when Google Search is built into the tab? And if you use Chrome, Google Search is built right into the browser. You don't even need to go to Google.com.

Now, Google is effectively protecting its core search engine by using these other digital properties to embed it deep into your life. And the bottom line here, Google Search is not an option you have to look for, it's already there.

And Warren Buffett calls this building a moat around your business to protect your core business. And it's not an uncommon strategy. Now, what is uncommon is just how much money Google is willing to pay for it.

The U.S. president, Barack Obama, is on tour. He set off on a three-day tour by bus around the Midwest on Monday. He made stops in Minnesota before heading to Iowa. And during the trip, the White House says he will discuss ways to grow the economy, strengthen the middle class, and create jobs.

And CNN's Wolf Blitzer will be talking to Mr. Obama later today. You can catch that on "THE SITUATION ROOM." That's 5:00 p.m. in New York, 2:00 p.m. in L.A., 10:00 p.m. in London.

And there's another twist in the "News of the World" hacking scandal. British lawmakers say they're likely to bring News Corp. executive James Murdoch back for more testimony.

Now, they are trying to determine whether he misled officials about the scale of the hacking. Parliament is expecting new evidence in the case.

(BEGIN VIDEO CLIP)

TOM WATSON, BRITISH PARLIAMENT MEMBER: Within the evidence that will be published at 1:00, I think there are some devastating revelations that the company in general will have questions to answer. We've also asked for written evidence from Rebekah Brooks and Andy Coulson because of allegations made by Clive Goodman or correspondents that we've seen -- that Clive Goodman made in 2007. And I think that will form the basis of much of our inquiry in weeks to come as well.

(END VIDEO CLIP)

STOUT: And our London news desk is monitoring the parliament Web site, but so far no report. Now, it has been 20 minutes since the report has been expected, and being just past 1:00 p.m. local time there now. And once we get those details, we're told the news desk is "pushing F5 like crazy." That's a quotation. We'll bring you those details right here on CNN.

Now, up next, an American man kidnapped in Pakistan. And still, no one has taken responsibility. We'll get the latest on the case and who is being questioned.

That, up next on NEWS STREAM.

(COMMERCIAL BREAK)

STOUT: Coming to you live from Hong Kong, you're back watching NEWS STREAM.

Now, the United States is worried that Pakistan gave China access to the stealth helicopter that crashed during the raid on Osama bin Laden's compound. An official says the U.S. has strong suspicions, but can't confirm it. Pakistan denies it ever happened, and an official calls the claim a malicious campaign against Pakistan security forces.

When the stealth aircraft crashed, Navy SEALs destroyed most of it, but the tail remained intact.

Now, meanwhile, Pakistani police are holding the security guards and the driver of an American man who was kidnapped from his home on Saturday. The U.S. Embassy has identified that man as Warren Weinstein, and he was working in Pakistan as a development expert.

CNN's Reza Sayah is in Islamabad, and he joins us now.

Reza, what is the latest on this investigation?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, there's not a lot of information to report, and the mystery surrounding this kidnapping continues to steadily grow. I have no doubt that Warren Weinstein's wife and his family back in the U.S., they desperately want to know how he's doing or where he is. But unfortunately, it seems neither the U.S. Embassy here in Islamabad, nor Pakistani police have any information about his condition or his whereabouts.

The only new information we have from investigators is that they have detained Warren Weinstein's three security guards and his driver for questioning only. They point out that these individuals are not suspects in this kidnapping case, they're only being held for questioning. Pakistani law says you can detain individuals for up to 72 hours for questioning without charging them.

We should note the 72-hour window just passed several hours ago. They're still in detention. At this point, it's not clear why.

Warren Weinstein, of course, kidnapped early Saturday morning, 3:00 a.m., in his upscale neighborhood in Lahore, the eastern city in Pakistan. At least eight assailants, according to police, stormed into his home, overpowered his three security guards, were very well trained, by the way, according to investigators, retired military commandos. They tied them up, pistol-whipped his driver, eventually forced him to lead them to Warren Weinstein, who was up in his room, and eventually left with Warren Weinstein.

So, at this point, the investigation focusing, Kristie, on these three security guards and the driver, not necessarily because they're suspects, but it seems like they are the only, maybe the best witnesses to the kidnapping so far.

STOUT: And there has been no claim of responsibility for the kidnapping and no ransom demand. So, Reza, just how unusual is that?

SAYAH: Well, there's only three days that have passed, so it's still early. But in the coming days, if there's no group that steps up with a demand, no group that steps up with a claim of responsibility, I think that's going to be unusual.

Any group here -- not just in Pakistan, anywhere else -- that's involved in these kidnappings, they usually want something. It's either politically motivated or they're criminal gangs who want to make a quick buck.

Here in Pakistan, there's some kidnappings that have been linked to Islamist militants, but police say most of them are criminal gangs who want to cash in -- cash in with ransom. But at this point, there's absolutely no indication why this kidnapping happened and who was behind it.

STOUT: All right.

Reza Sayah, joining us live from Islamabad.

Thank you, Reza.

Ahead on NEWS STREAM, a serious food crisis in Somalia. As the famine grows worse, doctors say that they are not equipped to handle the rising numbers of sick and starving.

And reporting from inside Libya. We'll get a special look at how journalists are treated while covering the country's civil war.

(COMMERCIAL BREAK)

STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching news stream. And these are your world headlines.

In Libya, there are reports that the government fired a Scud missile at rebels, but it appears to have missed its target. A NATO official is calling it a desperation move. Now meanwhile, rebels claim that they are closer to taking control of Zawiyah. Now that coastal city sits on a major supply road to government forces in Tripoli.

In Syria, activists say more than 5,000 Palestinians have fled a UN refugee camp in the northwestern city of Latakia. Now the Syrian government denies this despite ongoing reports of bloody crackdowns there over the past several days. Jordan and Turkey are now the latest countries to join the international community in calling for an end to the violence in Syria.

A man accused of an elaborate bomb hoax in Australia has been arrested more than 9,000 miles away in the United States. Now the 50 year old man is accused of strapping what appeared to be an explosive device around a woman's neck in Sydney earlier this month and it turned out to be a fake. Now he will appear in court later today.

Now French President Nicolas Sarcozy and German Chancellor Angela Merkel are holding talks on the European debt crisis on Tuesday. And as the leaders of the Eurozone's two biggest economies they are eager to find ways to restore confidence in government finances. However, some analysts say they don't expect any substantial progress from the meeting.

Now the food crisis in Somalia is growing more severe by the day. As the death toll rises, children are increasingly among the casualties. And as Nima Elbagir reports, doctors there say they just don't have enough supplies to keep up with the growing number of sick and starving.

(BEGIN VIDEOTAPE)

NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Hamid and Delroeha (ph) has been sitting on their sons hospital bed for the last two hours. Next to them, the 1 year old lies wrapped in a shroud. He died this morning, but the family doesn't have enough money to bury him yet. They spent all they had on transport getting their starving children to this hospital. Their two other children died on the road here.

Banadiir Hospital in Mogadishu houses Somalia's largest children's ward. The doctors here do what they can, but there's no electricity, no running water, they're even running out of the saline drips used to rehydrate the chronically malnourished. Dr. Luwal Mohammed, the doctor in charge here, says it's easier to list what they do have in the hospital rather than what they don't.

DR. LUWAL MOHAMMED, CHIEF OF MEDICAL STAFF, BANADIIR HOSPITAL: Supplies and equipment, essential equipment. This for life saving like oxygen machines, monitoring blood pressure, measurement (inaudible), all this are missing, they're (inaudible) now because it's life saving.

ELBAGIR: It's not just the hospitals that are struggling, the withdrawal of al-Shabbab militants from the capital has given more Somalis the courage to defy them and their battle foreign aid, to seek refuge in government help areas.

The flood of displaced people is threatening to overwhelm what little resources aid workers here have.

This children's feeding center is run by SAG (ph), a local aid group. Last month across their 19 feeding centers they fed 18,000 children. This month, as more and more people flood in, they're expecting to see 25,000 children. But even as the number of those in need grows, the resources to help them do not.

This is a World Food Program supported distribution center. It's where mothers can bring their children here to be weighed, where they can receive some support to stave off malnutrition. There is some aid coming into Somalia. There really isn't enough to deal with the sheer enormity of the crisis here.

The United Nations is now desperately trying to convince donors to give more. The UN secretary-general has even been putting in personal calls to the heads of state of wealthy nations. But they admit the inevitable, that while the Somalis wait, more areas here will slip into famine and more children will die.

Nima Elbagir, CNN, Mogadishu.

(END VIDEOTAPE)

STOUT: Now the UN's pleas for additional aid may soon be intensifying. The World Food Program says it is investigating reports that food donations designated for starving Somalis are actually being stolen in transit and then resold for profit. Now the relief supplies range from sacks of grain to other vital food staples. And it means the crucial aid is not getting to these children and the more than 12 million others who need it most that's how many people the UN says are facing starvation in the horn of Africa right now.

I want to show you what some of this UN emergency food actually looks like. Now they look like this. Now packets of high calorie peanut based paste. Now this is supplementary Plumpy, it's also known as Plumpy sup. It's used to treat moderate acute malnutrition. And this is called Plumpy'nut which fights severe acute malnutrition.

Now these samples, they were donated to us by UNICEF. And they both look like, as you can see, they look like and even taste like peanut butter. Now these are nut based products that contain soy, sugar, minerals and vitamins.

Now Plumpy'nut here contains additional protein from milk. And they both hit the top needs of the malnourished. They have the calories, high quality protein, a mix of minerals and vitamins, and they're sweat so children are willing to eat it.

Now they also have a long shelf life. And the package, as you can see, they're small, easy to transport. A parent can tear off a corner from the packet and feed it to a child straight from the package. Now each packet contains about 500 calories, enough for an infant, but that's not enough for a teenager.

Now this is not a miracle cure. Now Plumpy sup and Plumpy'nut, they do not address long-term malnutrition, but they are helping to fight the acute famine we're seeing today in the horn of Africa.

Now we cross back to Libya now where for six months Moammar Gadhafi's government has been fighting a war on several fronts against Libyan rebels and against a NATO aerial bombing campaign. And even thought the U.S., France, and Britain are leading the drive to overthrow Gadhafi, his regime has allowed journalists from those countries to report in Tripoli. As Ivan Watson tells us, they're under strict government control while operating from the Riksot (ph) Hotel, it's the mandatory residents for more foreign journalists visiting Libya.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT: So this is how we pretty much get to see Libya outside of our hotel: on government organized bus trips. All of the foreign press corps filed into here.

The bus trips are the only time we're allowed to film outside out hotel. Often time our government hosts don't tell us where we're going until the last minute. We see Libya through a key hole. Our movements and interviews strictly controlled by Moammar Gadhafi's government.

And yet we can still gather clues that offer glimpses of the immense pressure placed on the regime that's ruled Libya for more than 40 years as well as a society suffering the terrible consequences of war.

We've been brought to the front line city of Zlitan where this morning an airstrike hit a villa and killed two children and a woman. Their bodies are lying in this mosque and a crowd is gathered grieving relatives and neighbors and friends and has given way to an angry denunciation of the NATO bombing campaign here.

This is the first time during our assignment in Libya where we've seen an obvious case of a NATO airstrikes killing civilians.

The men at this funeral clearly weren't expecting a bus load of journalists to show up. Cameraman Joe Duran tried to balance capturing the intense emotions of the moment while also attempting to show respect for the young victims and the family's loss.

After the funeral, the government bus takes journalists to what officials say is a civilian target bombed by NATO. And here we get another glimpse of reality through the key hole.

We're on the compound of a law school that was hit a couple of days ago again by airstrikes. But there is compelling evidence that this has been a location for some military. These appear to be uniforms over here, these olive green pants. And then we've got boxes here that look an awful lot like they could have been holding ammunition.

Government minders told us the ammo boxes and uniforms belongs to law school security guards. But according to security analysts who examined the serial numbers, this box would have held Russian made armor piercing incendiary B32 rounds for the kind of machine gun that's typically mounted on armored personnel carriers and anti-aircraft guns.

Back in the hotel, it's hard to get a good night's sleep.

It's 2:00 am. We just heard four loud, long explosions. We can hear war planes overhead. And it looks like we're in for another night of airstrikes.

There was a pretty intense night of airstrikes last night, could you go check out and see the impact of those explosions?

DEBORAH HAYNES, DEFENSE EDITOR, TIMES OF LONDON: And this (inaudible) all you can do is sit on the roof and watch the explosions. You're not allowed out. If you go out, you're going to get arrested and sent back to the hotel, or worse deported.

WATSON: That's not the view of the deputy foreign minister who paints a much more rosy picture.

KHALED KAIM, LIBYAN DEPUTY FOREIGN MINISTER: My personal understanding on this is to allow journalists to go freely around and to talk to anyone who are pro or against the regime.

UNIDENTIFIED FEMALE: Go, go, go. Move, move, move, move. What you do here? Move, move.

WATSON: Sounds good, but reality was different. In practice, it's difficult to dodge the government minders. We were successful sometimes, though.

This is the neighborhood of Sukur Juma (ph). It is one of the most restive regions of the Libyan capital. And when we were brought here there were people closely monitoring what our team was doing, but I managed to slip away and hear some of these whispers of dissent at length from some of the residents here.

UNIDENTIFIED MALE: We are waiting. I'm patient.

WATSON: What are you waiting for?

UNIDENTIFIED MALE: Waiting for Misrata, the people. He has guns.

WATSON: The rebels.

UNIDENTIFIED MALE: Ah, the rebels. Yeah, sure. We're waiting him.

WATSON: You want them to come here?

UNIDENTIFIED MALE: Yeah, yeah we want him. To free. To be free.

HAYNES: I guess to those who have spent time here, it'll be remembered as a kind of surreal luxury prison. But a prison that has enabled us to get an insight into the conflict that others don't have. So it's not a complete waste of time.

WATSON: We just crossed the border from Libya into Tunisia. And I'm feeling a sense of relief both because we're out of the war zone and also away from the culture of fear of Moammar Gadhafi's Libya. I first went there three years ago, even in peace time I was always escorted everywhere by a minder and Libyans were clearly afraid to speak out against their government to even be quoted on record.

During the four weeks we've been in the country, government officials have repeatedly accused me of being a criminal and a spy for NATO, because they've been critical of some of the reporting that I've done.

Despite that, we met some very special people in Libya and are very worried about their future, because there are no signs that this civil war will end any time soon.

(END VIDEOTAPE)

STOUT: A fascinating, a very telling glimpse inside Libya during its civil war.

Now after the break here on News Stream, we got the sports headlines, Manchester City kicked off their Premiership campaign at home against newly promoted Swansea City. Last night, new signing Sergio Aguero looks pretty happy, and with good reason, he got off to a flyer. We'll bring you all the details after the break.

(COMMERCIAL BREAK)

STOUT: Welcome back.

Now it is the most prestigious and profitable club football competition on the planet. And over the next two days some of Europe's top teams have been trying to boost their chances for qualifying for it. Pedro Pinto is standing by. He's got all the details -- Pedro.

PEDRO PINTO, CNN SPORTS CORRESPONDENT: Hey, Kristie. A total of 10 spots in the Champion's League group phase are up for grabs. The likes of Bayern Munich, Benfica, Lyons, and Arsenal will be looking to get past the final qualifying round.

The first leg matches of a few ties are taking place later on Tuesday. Arsenal hosts Udinese with the Gunners aiming to make it into the competition for the 14th straight season. They'll be withour Samir Nasri and Robin Van Persie who are both suspended. That means some of the other younger players will have to step up their games if Arsenal are going to get a positive result at the Emirates stadium here in London.

Also playing on Tuesday are two time European cup winners Benfica, the Portuguese giants take on FC Twente in the Netherlands. 2010 Champion's League semifinalists Lyons host Rubin Kazan in France.

As far as Arsenal are concerned, their match with Udinese is the start of a new era, one without Spanish midfielder Cesc Fabregas. The Gunner's coach, Arsene Wenger admitted losing his captain was a big blow.

(BEGIN VIDEO CLIP)

ARSENE WENGER, ARSENAL MANAGER: Yes, we lost a world class player. And we are sad about it. We did fine to keep him, but in the end we have to respect the desire of the player. And this club is 125 years old. We've seen many big players have left the club and the club went on.

(END VIDEO CLIP)

PINTO: Aresenal's loss was Barcelona's gain. And fans of the Camp Nou were pretty excited to welcome Fabregas to the club on Monday. 30,000 supporters turned up to welcome back a player who had been at the club as a youth player. Cesc left Barcelona in 2003 at the age of 16. He now returns eight years later. The midfielder cost Barca around $42 million, although the fee could go up depending on several add on clauses. He signed a five year contract with the current European champions.

The midfielder told journalists at a packed press conference that this move was a dream come true.

(BEGIN VIDEO CLIP)

CESC FABRAGAS, BARCELONA MIDFIELDER (through translator): I am here to give everything I have in me. I don't want to disappoint anyone, especially the club that has made a bet on me. The only thing I can say is that I'm going to give it all until the last drop of sweat I have, because I grew up in this club. I never stopped following and loving it.

And though I know that a lot of people might not see it, because we went through hard times eight years ago I am back to experience feelings I experienced before as a professional. And I know it is going to be a big challenge.

(END VIDEO CLIP)

PINTO: Challenging for the Premier League title is something Manchester City are hoping of doing this season. And they started off their campaign convincingly on Monday night. Roberto Mancini's side thumped Swansea 4-nil at the City of Manchester Stadium. All the goals were scored in the secord half.

The story was undoubtedly Sergio Aguero who came off the bench to score twice with a dream debut with City with a big win.

In the United States, Minnesota Twins slugger Jim Tony made history by becoming the eighth Major League baseball player to hit 600 career home runs. He did it in style as well smacking two homers for the Minnesota Twins in last night's game against the Detroit Tigers. This was his second one, the 600th of his glorious career. A three run shot off Daniel Schlereth in the seventh inning.

Now he may have been playing in Detroit, but the fans there still gave him a standing ovation. Tony joining the 600 home run club.

A lot more coming up on the next addition of World Sport. But that's all from me for now. Back to you, Kristie, in Hong Kong.

STOUT: Pedro, thank you.

Now up next, the biggest snow storm in decades has brought parts of New Zealand to a grinding halt. Now find out how enterprising Kiwis are making the best of a bad situation ahead on News Stream.

(COMMERCIAL BREAK)

STOUT: Welcome back.

Now a freak polar blast has left parts of New Zealand blanketed in snow for the last three days. Now locals in Queenstown are calling it the biggest fall in 50 years. Now John McDermott reports how people are coping with the weather conditions that have blocked roads and grounded flights.

(BEGIN VIDEO CLIP)

JOHN MCDERMOTT: In the thrill seeking capital, they're never stuck for a new idea. The challenge of snowy roads, no problem for this enterprising skier on a day when abandoned cars sit everywhere. But most drivers got it right.

UNIDENTIFIED MALE: It's a lot with a lot of the people having their chains on today as opposed to yesterday. So yes, it's looking a lot better today.

MCDERMOTT: But it's not all good. With the highway closed to (inaudible) for part of a second day, fuel and some foods are in short supply. Milk is being rationed.

UNIDENTIFIED MALE: Milk must get through. No, it's pretty challenging to be honest.

UNIDENTIFIED MALE: I got some milk. The bread has run out. So the wife will have to do some home baking.

MCDERMOTT: Despite the air port runway reopening, for some unlucky passengers cancellations and delays continue.

UNIDENTIFIED FEMALE: We're two days overdue now. We were due to fly out on Sunday.

UNIDENTIFIED MALE: Heading off to Mongolia, so fingers crossed we can make the flight from tonight.

MCDERMOTT: Ski fields is good business. But getting there wasn't easy.

UNIDENTIFIED MALE: My car is stuck in the bottom.

MCDERMOTT: For many businesses and the resort, the snow is just another challenge in what's becoming a difficult year. But they're mucking in.

UNIDENTIFIED MALE: The council has got enough on their plate so (inaudible) next door and just checking in (inaudible).

MCDERMOTT: So with some work hard to get rid of the snow, others are finding creative ways to use it. The biggest in 50 years or not, the snows had a major impact here for three days.

(END VIDEOTAPE)

STOUT: They really are making the best out of the situation there.

Let's get the latest with Mari Ramos. She joins us from the World Weather Center to see if New Zealand is going to get any respite from these big snow storms -- Mari.

MARI RAMOS, CNN WEATHER CORRESPONDENT: Yeah, that was kind of a lighthearted report there as to what's going on, but there are some serious problems happening there too, Kristie. You know, we saw the cars on the road. These temperatures, the problem is that it's lasting so long -- not only that they got all that snow, but that the temperatures are not going to go up, at least until we get probably until Thursday. So this polar outbreak at least one more day for you.

Let me go ahead and share with you some of these amazing temperatures that we've seen. In Aukland for example, that's a record. It's the coldest high temperature they've ever had since they've been keeping records, which is about 50 years. It only got up to about 8 degrees on Monday and on Tuesday. So that's pretty significant.

And Christchurch, it only got to about 5 degrees there in the south island. Not a big difference in temperature. And in Wellington about 5 degrees as well against an average high of 12 degrees.

So you can see here why this is a big deal. And it's not only the daytime highs, overnight lows have been extremely cold as well with this polar blast.

Now we did get a little bit of snow as far north as the north island of New Zealand, even as we head into the peninsula here. And it was very rare in Aukland in particular, because they've only had two recorded snow events since they've been keeping records. One was back in 1939 and then this one right now on August 15th of this year. So see how rare all this stuff is and why people think this is such a big deal.

And this is a great picture that I wanted to share with you. I don't know if you saw this already. You see those little -- this is a footprint on the ground. And those little droplets that you see there, it's almost snow that didn't really get to form. It almost looks like hail, but they call it grapple (ph). And it's almost like sleet that's falling on the ground.

This is full blown snow. This is in New Zealand. And I love this picture, because Kristie doesn't it make you think of Christmas? You know, for us in the northern hemisphere this is more of what we're used to.

But as we get into the forecast here, I want to show you something kind of interesting on the satellite. You see that flow almost coming in here off the east? That's all that moisture and the cold air. So areas that normally wouldn't see so much snowfall, that's why you're getting so much this time around. And there's so much cold air in place already. We're really not seeing a big change in this polar outbreak, like I said, not just through Wednesday where the heavy snow will continue, but I think the cold air will remain even as we head through the head on Thursday, through the day on Thursday.

One more thing, this heaviest snowfall, only in the highest elevations not in the coastal areas. You guys should be OK.

Let's go ahead and check out your city by city forecast.

From cold temperatures to the very warm temperatures that we have here. And most of our feels a little tropical, huh? Hot and humid as we head into Hong Kong at 30, 28 in Taipei. Look at Shanghai, even at this late hour, still 33. And 27 in Beijing.

Compare that to the 36 that we still have in Chongqing. This is going to continue for you, these warm temperatures, downright hot temperatures let's say. Call it a heat wave already. 39 again for you here. On Thursday will still remain above average and even into Friday. So these warm conditions will continue, Kristie. No big change there. The rain remains to the north.

Back to you.

STOUT: All right, Mari, good to see you. Thank you very much for that global forecast there. Mari Ramos there.

And it is time to take you over and out there to the world of espionage. If you've ever dreamed of being 007, now may be your chance. Britain's Ministry of Defense is auctioning off some slick gadgets to raise cash because of a massive budget shortfall. If you're looking for a defense issued helicopter, you might like this Gazelle, or maybe you'd prefer more classic James Bond look for example these armored Jaguars. They're priced as low as 12,000 pounds, or 20,000 U.S. dollars.

And if that's too steep for you, you can go for an off road option with these military motobikes, each one 650 pounds.

Or how about defense issue Dior watch. Now these are probably distributed to help agents blend in at sophisticated parties, but don't get your hopes up, no secret spy lasers or walkie talkies in those diamonds.

And that is News Stream, but the news continues at CNN. World Business Today is next.

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