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ANDERSON COOPER 360 DEGREES

Rockets Fired Inside Lebanon; Interview With Israeli Ambassador to the United Nations Dan Gillerman; British Police Search For Smoking Gun in Alleged Terrorist Plot

Aired August 14, 2006 - 22:00   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: A fragile truce, how long will it hold?

UNIDENTIFIED MALE: We will do everything we can that it will succeed.

UNIDENTIFIED MALE: The days of armed groups deciding war and peace in this country are over.

ANNOUNCER: Promises from Israel and Lebanon, but what about the wild card? Hezbollah says it won the war. Will it block the peace?

Building the case against the London terror suspects.

JOHN WEIR, NEIGHBOR: Seen some round drums, the chemical drums.

ANNOUNCER: What police found in this London apartment.

Target: USA -- does the U.S. have the right tools to prevent the next 9/11? Does Britain have an edge?

(END VIDEOTAPE)

ANNOUNCER: This is a special edition of ANDERSON COOPER 360.

In for Anderson tonight, Christiane Amanpour in London and Wolf Blitzer in Jerusalem.

WOLF BLITZER, CNN ANCHOR: And good evening from Jerusalem. My co-anchor, Christiane Amanpour, is in London, with all the latest developments on the London terror plot investigation.

But we begin here in the Middle East with breaking news.

Within just the past few hours, an estimated 10 rockets were fired inside southern Lebanon, in spite of the cease-fire that began this morning.

CNN's Chris Lawrence is standing by in northern Israel with the very latest.

Chris, what's going on?

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, Israeli officials tell us that they continue to search southern Lebanon for unexploded rockets. When they find them, they destroy them. That accounts for some of the explosions that we have heard here tonight.

Now, this is in addition to the rockets that began falling in southern Lebanon around midnight, our time. Israeli forces, we have now learned, say that Israeli troops who are stationed in south Lebanon actually saw these rockets fall.

They appear to be short-range rockets, and landed more towards the western side of Lebanon. Israel has not retaliated, has no plans to do so, and right now is respecting its truce with Hezbollah -- Wolf.

BLITZER: Chris, stand by. We're going to be getting back to you.

That U.N. resolution that went into effect this morning has ended the major fighting between Israel and Hezbollah, but, clearly, not all of the fighting. And, to be sure, this truth -- truce is very much in its infancy, and whether it will grow into something bigger and stronger remains to be seen.

That said, there's no denying this was a pivotal day.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): After 34 days of bombs, rockets, and bloodshed, silence -- at 8:00 a.m., local time, this morning, a fragile cease-fire brokered by the United Nations finally took effect, with both sides claiming to have won.

Appearing on television, Hezbollah leader Hassan Nasrallah declared what he called a historic victory over Israel -- his defiant declaration greeted by fireworks and gunfire from his followers.

Across the border, Israeli Prime Minister Ehud Olmert said, his country had struck a major blow to a murderous organization. President Bush also said, Hezbollah was defeated, and once again held Syria and Iran directly accountable.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Responsibility for the suffering of the Lebanese people also lies with Hezbollah's state sponsors, Iran and Syria. The regime in Iran provides Hezbollah with financial support, weapons, and training.

Iran has made clear that it seeks the destruction of Israel. We can only imagine how much more dangerous this conflict would be if Iran had the nuclear weapon it seeks.

BLITZER: Just hours into the truce, four skirmishes were reported, with Israel announcing it had killed four Hezbollah fighters.

And, late today, Israel says 10 Katyusha rockets were fired from southern Lebanon. None, however, reached Israel. In southern Lebanon, the sounds of war were replaced by the blare of traffic. Driven away by the fighting, thousands of Lebanese refugees tried to return to their homes today, with some praising Hezbollah and many unsure of what awaited them.

The fragile truce follows a particularly violent weekend, with both sides unleashing a barrage of final attacks. On Sunday alone, Hezbollah launched more than 200 rockets into Israel. And, in Beirut, Israeli warplanes battered areas around the city.

The war's human toll has been staggering. Lebanon security forces say, an estimated 900 Lebanese have been killed. Lebanon says most were civilians, and nearly 4,000 others injured. Israel reports 159 deaths, including 100 soldiers, and more than 1,000 civilians injured.

(END VIDEOTAPE)

BLITZER: Peace is not a word used lightly in this part of the world.

With that in mind, we're going to turn to our reporters out in the field.

CNN's Jim Clancy is in Beirut. Chris Lawrence, once again, is joining us from northern Israel.

Jim, let's start with -- with you.

Any reaction so far? I know it's early. It has only been a couple hours or so since there was word that 10 rockets were fired. They landed in southern Lebanon, did not cross into northern Israel. But what, if anything, are you hearing from your vantage point in Beirut?

JIM CLANCY, CNN CORRESPONDENT: Very, very little right now, Wolf. There is no confirmation coming out of Hezbollah.

Indeed, I do expect Hezbollah to have some kind of a statement on this incident. And, as well, they're going to have some kind of a statement on the six Hezbollah soldiers who were killed down in that area where IDF forces are deployed. They were shot by IDF forces.

And I'm wondering, speculating, whether or not this rocket incident has something to do with that.

BLITZER: Chris Lawrence, in northern Israel, what is the IDF, the Israel Defense Forces, saying about those earlier incidents in which Israeli soldiers killed Hezbollah troops?

LAWRENCE: Israel says that they were small skirmishes. And, from all of the officers that I spoke with today, even before the cease-fire, it is something that they expected to happen.

Just to put this in somewhat of perspective, I was speaking with an IDF official just a few minutes ago. And you have to remember that Israel has not launched any artillery into Lebanon. No Hezbollah rockets have landed in northern Israel.

All of this has been taking place in southern Lebanon, both these small skirmishes, which the Israeli army did anticipate, and now these rockets falling. The rockets did land in southern Lebanon. But, again, they caused no damage or injuries. And they do raise some questions. But I think, at this point, the Israeli officials are putting it in perspective, to say, this does not rise to the level of jeopardizing the cease-fire agreement.

BLITZER: Jim Clancy, we heard from the Hezbollah leader, Hassan Nasrallah, earlier today, on television, claiming victory. But what are the -- the average people that you're speaking to on the streets of Beirut, elsewhere in Lebanon, think?

CLANCY: I think, here in Beirut and across the Arab world, there's a sense here that Hezbollah rose to the occasion, battled, at least to a bloody draw down in southern Lebanon, with the Israeli forces. And that is construed as a victory.

On the other hand, when we hear that Hassan Nasrallah is going to be getting the money to put together what's estimated to be about $1 billion worth of housing units, saying he's bypassing the government, going to do it directly, on one hand, you can say it's to -- you know, to build up his support base there.

But, if Iran joins in this -- and some sources are telling me tonight they suspect Iran will provide the money to do this -- it's going to raise a question. And the question is, are they admitting culpability for having triggered this disaster?

BLITZER: Chris Lawrence, in northern Israel, Israelis say almost a million Israelis were either forced to go into shelters or move further south because of the rockets, some 4,000 of which came into northern Israel over the past 33, 34 days.

What's it like now in Haifa, elsewhere in northern Israel?

LAWRENCE: Well, we have seen families starting to come back to some of these areas, Haifa, Kiryat Shmona. People who have been gone for a month now took advantage of the first day of the cease-fire to come back to their homes for the first time.

And just to piggyback on some of the things that Jim was saying, interestingly enough, I spoke with one Israeli mother, who said that she felt, because Hezbollah was able to hang in this fight for so long, that she personally felt that Hezbollah's leader, Hassan Nasrallah, his image would be elevated in the Islamic world. And she truly fears that the families who live here in northern Israel have not heard the last of him -- Wolf.

BLITZER: Chris, thank you. Stand by for a moment.

Jim Clancy, back in Beirut, is there any indication you're getting when those 15,000 Lebanese troops will finally make it to the south, when the 15,000 expected U.N. forces would make it there, all of which is designed, in effect, to get the Hezbollah forces out, to disarm them, and let the Israeli troops start coming back to Israel?

CLANCY: I talked to a senior adviser to the Lebanese prime minister, Fuad Siniora, tonight, who told me that there were hopes, hopes that they could get that started by the end of this week, in a matter of days. There are stumbling blocks.

One of the issues -- you mentioned it there -- this whole question of, will there be Hezbollah troops there? Will they be armed? Will they have their arms, you know, hidden? There are assurance that have been given that they are not going to be a force to be reckoned with at all in that area; they will respect one single authority. That is the Lebanese army and the United Nations troops that are there.

The question is that -- does that go far enough to satisfy some of the nations who are going to be offering troops to this international force? Does that go far enough for the Israelis? And a key question, does it go far enough for the Lebanese army? All of those factors have to be satisfied for this troop movement to take place.

That is very crucial. That's our next hurdle.

BLITZER: A very complicated, tenuous, dangerous ordeal.

Thanks to both of you, Jim Clancy in Beirut, and Chris Lawrence in northern Israel. We will be checking back with you.

Let's get some more now on the breaking news we're following: at least 10 rockets fired into southern Lebanon, did not cross into northern Israel. What is the reaction of the Israeli government?

For that, we're joined by Israel's ambassador to the United Nations, Dan Gillerman. He's joining us on the phone.

Mr. Ambassador, what is the reaction to these 10 rockets being fired? Who -- first of all, do you know for sure that Hezbollah fired them?

DAN GILLERMAN, ISRAELI AMBASSADOR TO THE UNITED NATIONS: Yes, we do know that Hezbollah fired them.

And we're watching the situation very, very carefully. As you have noted, Wolf, we're not responding at the moment. We're waiting to see what happens on the ground. It sounds and looks to us as if Hezbollah's trying to say that they're still there. They're trying to create an impression that they're still -- they're still there, and they're still on the ground; they're still capable of doing something.

But we're waiting to see what this really means. And -- and this, really, at the end of the day, is -- is the difference, and shows, I think, the world the difference between a democracy that adheres completely and abides by the cease-fire, which the Security Council has demanded, and a Lebanese government, which has lost control over the south, has handed it over to a terrorist organization, which is probably still trying to stir things up and destabilize the cease-fire.

BLITZER: As -- as far as you know, those 10 rockets that landed in south Lebanon -- didn't cross into the northern part of Israel -- did they cause any damage?

GILLERMAN: No, they did not cause any damage. But we believe that they were directed at some of the Israeli troops that are still there. We're not quite sure what Hezbollah is trying to prove by that, except, as I said, to say that -- to state that they're still there.

But we're monitoring this very carefully. We're watching this very carefully. But we're not responding at the moment, because we do want to abide by the cease-fire. We want to give peace a chance. We want to give the United Nations and the international community a chance to actually have their forces deployed, and give the Lebanese government a chance to prove that this last chance they have been given -- and this may very well be the very last chance for Lebanon -- is something they seriously want to pursue.

Otherwise, I think the whole thing may fall apart, and Lebanon will have only itself to blame.

BLITZER: What happens if Katyusha rockets start landing once again, even a small number, in northern Israel itself; they cross the border from south Lebanon? What happens then?

GILLERMAN: Well, I very much hope this won't happen, both for the sake of the citizens of the north, who are starting to return to their homes, and want to start their lives again, but mainly for the sake of the stability of the whole region, because, if this happens, this will be a very, very clear violation of the cease-fire.

And I believe that Israel will have no choice but to -- not only to retaliate, but to make sure that it finishes the job, and make sure that the Hezbollah is totally incapable of doing that ever again.

But, as I said, that is a scenario I don't even want to imagine at the moment. We are nearly 24 hours from the beginning of this cease-fire, and we want to make sure that it holds, because I truly think that this is, as I said, not only the last chance for Lebanon, but the last opportunity for the international community to prove that that was not just a vote, but that is a real intention to make sure that Lebanon is free again and Israel is safe.

If the international community and Lebanon cannot do it, then, unfortunately, we will have to make sure that it happens.

BLITZER: Dan Gillerman is Israel's ambassador to the United Nations.

Thanks very much for joining us.

And, while Israel has agreed to a cease-fire in Lebanon, it continues its campaign against Palestinian militants in Gaza. Tonight, an Israeli airstrike struck a target in a refugee camp in Gaza. There was no immediate word of casualties -- the IDF, the Israel Defense Forces, saying the target was a command center for Islamic Jihad.

Earlier today, in Gaza, two FOX News Channel employees were kidnapped after their car was ambushed. We're watching that story, as well.

Still a very dangerous, dangerous situation unfolding here in the Middle East, but with the cease-fire under way, and workers -- aid workers are stepping up their humanitarian efforts in Lebanon.

Here's the "Raw Data."

Today, the U.N. said an estimated 230,000 more mattresses are being flown from all over the world to Beirut. Some 172,000 blankets and about 50,000 tents also are en route to the Middle East.

And the U.N. is warning civilians that roughly 10 percent of all the shells and mortars do not explode on impact, and could go off at just the slightest movement, clearly, a very, very dangerous situation.

In London, British police are looking for the smoking gun. As they search for the terror suspects' homes, their focus is on the explosives they say were going to be used to try to blow up planes. What they have found so far, that's coming up.

And is Britain becoming a breeding ground for Islamic terrorism? We will talk to counterterrorism experts for some insight.

I'm Wolf Blitzer in Jerusalem, along with my co-anchor, Christiane Amanpour, in London.

This is a special edition of ANDERSON COOPER 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN REID, BRITISH HOME SECRETARY: The threat level is at severe, indicating the high likelihood of an attempted terrorist attack at some stage.

(END VIDEO CLIP)

CHRISTIANE AMANPOUR, CNN ANCHOR: That was John Reid today, the British home secretary.

Four days after British police said they had stopped a plot to blow airliners out of the sky, the terror alert on both sides of the Atlantic have been lowered. Police say, the suspects were going to assemble liquid explosives when the planes were in mid-flight. Investigators are now searching for evidence of those explosives.

And CNN's Dan Rivers has the latest.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT (voice-over): British security sources have told CNN they are confident of finding bomb-making material, even as the detailed forensic investigation into the alleged terror plot focuses on this apartment in East London.

These exclusive CNN photos taken by a neighbor with a camera phone show plastic containers being carried from the flat by police.

JOHN WEIR, NEIGHBOR: Most of it has been packaged up. I have seen some round drums, the chemical drums they have sealed tight, lids and what have you. They have -- there's a few of them have come out.

RIVERS: The intensive police search is also continuing in woods near the town of High Wycombe. According to security sources, the police are looking for evidence of explosives-testing.

The British security sources confirm, the evidence seen so far indicates the alleged plotters were planning to blow up aircraft at their maximum cruising altitude, mid-Atlantic, positioning the explosives at the weakest point of the aircraft, intending for evidence to sink to the bottom of the ocean, potentially, the sources said, allowing similar follow-up attacks.

(on camera): Security sources have told CNN that they expect that some of the suspects being held at this high-security police station in central London may well be released without being charged.

(voice over): The British security sources have also cast doubt on multiple British and Pakistani media reports that the suspects have links to this man, Matiur Rehman, one of Pakistan's most wanted men for his alleged links to al Qaeda.

Security delays eased slightly at London's main airports, after the threat levels on both sides of the Atlantic were reduced.

But Britain's home secretary stresses, the security service MI5 is still hunting dozens of potential terror cells.

JOHN REID, BRITISH HOME SECRETARY: There are a number of other security service operations under way. There is still a very serious threat of an attack. The threat level is at severe, indicating the high likelihood of an attempted terrorist attack at some stage.

RIVERS: MI5 officers who were following the movements of the suspects have already been redeployed to monitor dozens of other suspected terror cells around Britain -- the security service estimating there are more than 1,200 individuals of concern across the U.K.

(END VIDEOTAPE)

AMANPOUR: And Dan Rivers joins me now.

Twelve hundred individuals, you said, who are being monitored. I mean, for what? What are the -- what are they suspected of? RIVERS: Well, I think they range from all the way up to people involved in this kind of conspiracy. I mean, the security services are saying there are several potential cells that they're watching, you know, up to and more than a dozen, some of them involved in -- in trying to create, you know, mass casualties, right the way down to the lower end of the scale.

But, I mean, it's clearly a massive problem and one that has left MI5 and -- and the police, you know, fully stretched.

AMANPOUR: Able to do this surveillance of 1,200?

RIVERS: I think -- I mean, they're really struggling. You know, you think about the number of people needed to be involved with that kind of level of surveillance. You know, you're talking more than, you know, 10 or 12 people per person.

So, I mean, you need a lot of people to keep monitoring. They have electrical surveillance and -- and all the rest of it, but they are really at full stretch at the moment.

AMANPOUR: Dan Rivers, thank you.

And, in the airline terror case, police have 23 suspects in British custody, and several more are behind bars in Pakistan. Investigators are focusing on one suspect in particular who was picked up in Pakistan.

And, with that story, here's CNN's Jason Carroll.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): British police say the man who lived at this Birmingham house for a period of time with his extended family was a key player in masterminding the plot to bring down planes bound for the United States.

Authorities arrested Rashid Rauf, 26, in Pakistan last week. His family says Rauf's younger brothers, Tayib, 22, and Asam (ph), 19, were arrested in Birmingham.

UNIDENTIFIED FEMALE: Well, has there been hard evidence about that? What's the evidence? It just looks like a load of baloney to me.

CARROLL: Rauf's relatives are angry and worried for the brothers.

UNIDENTIFIED MALE: We couldn't sleep three -- three, four night now, so close, so innocent.

CARROLL: Relatives say, Rashid Rauf is an honest man, who has been working in Pakistan the past few years. Family members we spoke to could not confirm what he did there. Here in England, his brothers ran a bakery near their house. Relatives also say, the brothers are deeply religious. They are -- they're believers.

CARROLL (on camera): They are believers?

UNIDENTIFIED MALE: Yes.

CARROLL: But not extremists?

UNIDENTIFIED MALE: Not extremists.

CARROLL (voice-over): But Birmingham police suspect, there may be a different side to the boys. A police spokeswoman confirmed the Rauf house was searched in 2002 and in 2005 in connection with two unsolved murders. The family says accusations Rashid Rauf may have been connected to al Qaeda are outrageous.

MOHAMMED KAHN, COUSIN OF RASHID RAUF: Harmless family, innocent family.

CARROLL (on camera): Innocent family.

KAHN: Totally innocent, especially the little children, Tayib and Asam (ph) (INAUDIBLE)

CARROLL: They believe all of the allegations result from anti- Muslim sentiment.

(END VIDEOTAPE)

CARROLL: The family tells me, what they are looking for is evidence, hard, solid evidence linking these three brothers to the terrorist plot. And only if that evidence is presented will some of them begin to believe that the allegations are true -- Christiane.

AMANPOUR: Jason, thank you.

And we will have more on the terror investigation from security expert Will Geddes, coming up.

But, first, Tom Foreman joins with us a "360 Bulletin."

Hi, Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hi, Christiane.

The first post-operative glimpse on TV today of Cuban leader Fidel Castro. Cuban television showed Castro in his bed, chatting with Venezuelan President Hugo Chavez. Chavez had dropped in to help Castro celebrate his 80th birthday. Castro has handed power to his brother Raul while he recovers from surgery for intestinal bleeding.

Michigan authorities have backed down from claims that three men arrested last week were planning to blow up a bridge. Two brothers and their cousin were suspected of casing the Mackinac Bridge, after they were found with 80 pre-paid wireless phones and photos of the bridge in their vehicle. However, the FBI said today the men had no link to terrorists.

The U.S. military is rolling out a new uniform for Iraqi police, one they hope will make it harder for insurgents to copy. Insurgents had been disguising themselves as police. They think the new uniform will be a little bit more difficult for them to copy.

A possible bird flu strain has been found in wild swans in Michigan. But it appears to be one that isn't dangerous to animals or people. The Department of Agriculture says it's not the same virus that has killed more than 100 people and resulted in the destruction of millions of birds throughout Asia, Europe, and Africa -- Christiane.

AMANPOUR: Tom, thank you.

And coming up; more on the foiled terror plot in the skies -- we look at what the alleged suspects have in common, besides a desire to kill innocent people.

Plus: fighting terror on both sides of the Atlantic -- what legal weapons are being used by the United States and the United Kingdom to root out the terrorists?

When this special edition of 360 continues.

(COMMERCIAL BREAK)

AMANPOUR: We are back from London, just near Tower Bridge over the River Thames. And as more details emerge from the U.K. about the 23 people suspected of plotting to bomb trans-Atlantic airliners, some patterns emerge, as well.

Will Geddes is a counterterrorism expert here in London. He's joined us several times to try to make sense of this.

These people were mostly, apparently, of Pakistani origin.

WILL GEDDES, COUNTERTERRORISM EXPERT: The 7-7 bombers were also definitely of Muslim origin.

AMANPOUR: What is it about England? Is it breeding this kind of terrorism?

GEDDES: Well, it's very difficult to say, Christiane, because I mean certainly some of the information that's coming out about the profiles of these individuals, they come from a variety of backgrounds. They don't seem to come from the poverty line. So there's very little desperation in terms of their potential lives and their lifestyles.

However, it does seem to be coming from very much a small part of the community. And the imams within the Muslim community that I've been speaking with of late, certainly in the last couple of days, are even scratching their heads to try and understand where is this radical element really being born from?

AMANPOUR: Do they have any answers?

GEDDES: Well, again, they're having a lot of difficulty. Again, it seems to be some sort of disenchantment, disgruntlement, if you like, with foreign policy. And a variety of other compounding factors, as well as obviously these individuals' personal feelings towards not only the United Kingdom but also its association with the United States.

AMANPOUR: The United Kingdom, the British police, the counterterrorism types, they have always sort of allowed -- England has been home for a lot of Muslim exiles. Some of them have been extremists. But the British have tended to be tolerant, in other words, to look at them, to keep an eye on them.

Has that been a double-edged sword, just allowing them to be here? Have they -- have they sort of, quote, infected some of these young, vulnerable, impressionable people?

GEDDES: Well, yes and no. I think, again, it's a question of monitoring what groups are up to and not in an intrusive way. It's a case of saying what are these communities finding are difficult, either in their integration within the United Kingdom? Are they getting the support?

Certainly, the police constabularies across the United Kingdom have realized that community relations is a really key issue and something that's perhaps been not addressed as intrinsically as it should have been. The other issue is that the security services haven't been able to infiltrate necessarily within these groups to see whether there are any issues.

And on the whole we must remember that those communities are generally peaceful and law abiding. It's only a small radical element.

AMANPOUR: Very briefly, what is the answer to tackling this?

GEDDES: Well, the only way that it can really be tackled effectively is by self-policing in many respects. It's getting the community leaders, the imams, to work aggressively into their communities to try to find out what the root causes are and why individuals are trying to come together to undertake these kinds of actions.

AMANPOUR: Will Geddes, thank you very much indeed. Would being able to detain potential terror suspects without charge for longer periods help fight terrorism? We'll look at that coming up.

And what are the most desirable terrorist targets in the U.S.? The places that could be in the crosshairs, when 360 continues.

(COMMERCIAL BREAK)

BLITZER: Welcome back. I'm Wolf Blitzer, reporting tonight from Jerusalem, filling in for Anderson Cooper. We're following breaking news in the Middle East. For the first time since the cease-fire went into effect almost 24 hours ago, Israeli officials are now saying that some 10 rockets landed in South Lebanon. The Israeli ambassador to the United Nations, Dan Gillerman, telling us earlier here on ANDERSON COOPER 360 that those rockets were fired by Hezbollah.

They were Katyusha rockets. He said they caused no damage. The suspicion the Israelis have, though, is that they were aimed at Israeli soldiers in South Lebanon. Right now none of those rockets went into Northern Israel.

For the time being, Gillerman says, Israel is not going to respond, will continue to honor the cease-fire that was brokered by the United Nations Security Council.

Coming up shortly, we're going to be speaking with a spokesman for the Israel Defense Forces, getting more information on this breaking news.

In the meantime let's check back with Christiane Amanpour. She's in London with more on the war on terror -- Christiane.

AMANPOUR: Thanks, Wolf.

And the British bust of the alleged plot to blow airliners out of the sky is spurring the U.S. government to do a comparison of how the United States and Britain fight terrorism.

CNN's Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): In the review of British terror tactics one senior Justice Department official says the attorney general is not ruling anything in or ruling anything out. One significant legal weapon available to the British -- their ability to detain suspects for up to 28 days without charges.

ALBERTO GONZALES, ATTORNEY GENERAL: That may be something that we might want to look at. But again, is it consistent with our Constitution? We'll have to look at that.

MESERVE: In most cases U.S. law enforcement must bring charges within 48 hours of detaining a suspect.

PAT D'AMURO, CHAIRMAN CEO, GIULIANI SECURITY AND SAFETY: To be able to detain these individuals a little bit longer, to conduct some interviews, would be something that could be looked at in this country. Something that would be helpful to law enforcement authorities.

MESERVE: But the idea of extending the amount of time suspects can be held without charges makes civil libertarians bristle.

LISA GRAVES, AMERICAN CIVIL LIBERTIES UNION: Just a blanket authority to hold anyone, to round people up at will without any evidence that they've done anything wrong is a step in the wrong direction.

MESERVE: Few people inside or outside government believe the U.S. would or could follow the British model.

The Patriot Act, passed in the aftermath of the 9/11 attacks, expanded U.S. law enforcement's powers, making it easier, for instance, to conduct wiretaps. But some say it is essential to adopt some of Britain's other terror tools.

DAVID RIVKIN, REAGAN JUSTICE DEPARTMENT LAWYER: More surveillance, particularly in areas that really do not implicate the constitutionally protected expectation of privacy, A.

B, more data mining and ability to really combine information from different data bases and disciplines.

And C, and I know it's a dirty word in some circles, a more rational attitude towards profiling.

MESERVE (on camera): Though Congress did expand law enforcement's powers after 9/11, it is unclear how they would respond to such a request now. It is, after all, an election year.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And over the next hour we'll take an in-depth look at how vulnerable the U.S. might be to another terrorist attack in the United States.

Tonight, "Target USA", a close look at the most high-profile danger zones. They're scattered all around the United States, and as CNN's Tom Foreman tells us, no city or town is off limits.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): With 9/11 still a raw memory, the power failure that hit New York exactly three years ago sent millions of people into the streets in chaos and confusion, wondering if terrorists were once again at work.

UNIDENTIFIED FEMALE: It's the first thing that went into my mind, was, "Oh God, it's another 9/11."

FOREMAN: It was not a terrorist strike. But such worries remain well justified, according to many security consultants. They say American energy, water, and food supplies, transportation, and communication systems, landmarks and citizens remain in the bull's eye. For all the progress officials have made in protecting Target USA...

MICHAEL WERMUTH, DIRECTOR OF HOMELAND SECURITY, RAND CORPORATION: We are infinitely vulnerable.

FOREMAN: Michael Wermuth is the director of Homeland security for the Rand Corporation.

WERMUTH: It'll never be perfect. We can spend ourselves into oblivion from a government standpoint, from a private sector standpoint. And there's no such thing as perfect defense.

FOREMAN: The country's sheer size is an issue. Airport security has improved, but there are 5,000 airports to watch, 141,000 miles of railroad, 12,000 miles of coast with 11 major sea ports, and a seemingly limitless number of paths swirling around the borders.

REP. PETER KING (R), NEW YORK: The main thing is we need more -- we need more personnel. Again, we've tripled the number of Border Patrol agents in the last five years, but I think we have to add significantly more.

FOREMAN: Attacks on energy supplies remain a concern, from oil rigs in the Gulf to the nation's 6,000 electric plants. The half million miles of bulk transmission lines and the more than 100 nuclear reactors.

(on camera) And what about all of the landmarks and places where we naturally gather? Look at Chicago alone. There's the lakefront, the museums, the Sears Tower right downtown. There are more than a half dozen sports arenas all around the city. And look at the shopping centers. Each and every one a potential target for terrorists.

(voice-over) So many targets, so many towns. What can be done?

WERMUTH: If we can continue to enhance our intelligence efforts, that's where the big payoff is really going to be.

FOREMAN: And officials say we can be ready to respond when someday, somehow terrorists once again strike Target USA.

(END VIDEOTAPE)

BLITZER: And Tom, is there any indication based on all the information you're collecting, and you've been doing a lot of work on this over the past few days, that some of these so-called soft targets, the second-tier targets, shopping malls, if you will, they could become terrorist targets in the United States?

FOREMAN: Well, Wolf, you know from your experience they have been targets in other parts of the world. So far all the security analysts I talked to say that al Qaeda and the big terrorist groups seem to want to hit big targets. They want to make a statement that they can hit airlines; they can hit landmarks.

However, there is a belief that if it gets really hard to hit those then they may filter down to hitting shopping malls and sporting events and things that might not be their first choices for targets.

There are a lot of people there. If you look at the shopping centers of this country, 200 million Americans go to shopping centers every month. So obviously, there's a lot of work still to be done -- Wolf.

BLITZER: And if you go to a shopping mall here in Israel, you know what the future potentially could hold, because it's not easy getting in. You oftentimes have to go through metal detectors, and police are all over the place, security guards. One of the signs of life here in Israel. Elsewhere in Europe, in other parts of the world, as well.

Tom, thank you very much for that.

From tracking targets to following the money trail. Charges of fraud and mismanagement rocking the Department of Homeland Security. The allegations. That's coming up.

Plus, protecting America's shores. With 12,000 miles of coastline in the United States, is it just a matter of time before the terrorists penetrate U.S. ports? What you need to know, when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN MAGAW, FORMER UNDERSECRETARY, TSA: When we have a tragedy, when we have an incident, we find the money, we find the wherewithal to get it done. I am so concerned that we're going to have a tragedy with cargo, and then the money will flow quickly.

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AMANPOUR: That was John Magaw, former undersecretary of the TSA. Preserving freedoms, protecting the country, that is the mission of the Department of Homeland Security. To do that, Congress gives the agency billions of dollars each year, but it doesn't mean the money is being well spent.

CNN's Joe Johns is keeping them honest.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): You would think America's security watchdogs would be better than just about anybody else at watching how your taxpayer dollars are spent. But you'd be wrong. And in fact, this is not only about saving money. It's about saving lives.

UNIDENTIFIED MALE: Money is spent efficiently, effectively, to the right priorities. We're safer. We're more secure. If it's spent with waste, fraud, and abuse, we're helping the terrorists.

JOHNS: The Department of Homeland Security has been slammed again and again for failed financial controls. Now a new report prepared for Congress says DHS contracts worth more than $34 billion had significant waste or abuse or were poorly managed.

Hundreds of millions for radiation detectors that can't distinguish between weapons-grade nuclear material and cat litter. Border surveillance cameras that don't work in cold or hot weather. Spending on luxury hotels, long-distance calls, even payments for elevator operators at a fancy hotel in Manhattan.

Plus, government credit card abuse. Charges for iPods, training at golf and tennis resorts, the purchase of beer-brewing equipment.

(on camera) Then there are the costs that keep on costing. The government spent $1.3 billion on airport baggage screening machines that require the baggage to be taken from the conveyor belt to the machine and all the way back to the conveyor belt.

(voice-over) The report called this inefficient, but the Government Accountability Office estimates it will cost an additional $3 to 5 billion to upgrade to more efficient machines.

We asked the Department of Homeland Security for an interview. No one got back to us. But only a few weeks ago a DHS officer told the House Government Reform Committee the department doesn't have enough staff people to actually follow how contractors are spending the money.

ELAINE DUKE, DEPARTMENT OF HOMELAND SECURITY: We need more. We have an increase coming in the current '07 budget of about 200 additional, and we are working towards needing even more over time.

JOHNS: But it's not just DHS. Analysts say Congress itself is the root of the problem.

VERONIQUE DE RUGY, AEI: Right now Congress is all worked up about absolutely everything and want a lot of money to go everywhere, and there's very little thinking across the board about which are the important threat we should be thinking about.

JOHNS: De Rugy and others say the major problem is that the money isn't being spent according to which areas are subject to the greatest danger, and experts say it could be years before DHS heals itself.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

AMANPOUR: In the fragile truce between Israel and Lebanon, a report of rockets being fired in the past few hours. The latest coming up. But first, Tom Foreman joins us with a 360 business bulletin -- Tom.

FOREMAN: Hi, Christiane.

Stocks closed on a confident note today as the cease-fire in the Middle East relieved investors' fear. The Dow finished the day almost 10 points -- up 10 points to 11,098. The NASDAQ composite gained 11, while the S&P added nearly two points.

Good news for the Middle East was also good news for drivers today, as oil prices fell as much as $1.75 a barrel. Today's final price per barrel was almost $5 cheaper than it was at the peak of fighting.

Dell is recalling 4.1 million notebook computer batteries because they can overheat and catch fire. The world's largest maker of personal computers says that in rare cases a short circuit could cause the battery to overheat, raising the risk of sparks.

The computer giant's move is the largest electronics-related recall ever conducted by the Consumer Product Safety Commission.

Now let's go back to Wolf in Jerusalem.

BLITZER: Tom, thank you very much.

Ten Katyusha rockets fired, landing in South Lebanon, not making it across the border into Northern Israel. Israeli troops watching this very, very closely. We're going to take a closer look at what this may mean for this very, very fragile cease-fire.

Also coming up, the latest developments in the war on terror, the British hunt for airline terror suspects. We're going to bring you up to date when 360 continues.

(COMMERCIAL BREAK)

BLITZER: Hello again from Jerusalem, where the sun is just coming up. Approaching 6 a.m. here in the Middle East. I'm Wolf Blitzer, reporting from Jerusalem. My co-anchor, Christiane Amanpour, is reporting from London, where there are new developments in the terror plot investigation. That's coming up.

First of all, though, the latest on the breaking news we're following here in the Middle East, breaking news involving Katyusha rockets once again.

The cease-fire brokered by the United Nations Security Council not yet 24 hours old, but Israel says at least 10 rockets were fired by Hezbollah into Southern Lebanon just within the past few hours. No damage caused. Israeli officials say those rockets were aimed potentially at Israeli troops still in Southern Lebanon.

We're watching this story very, very closely. CNN's Chris Lawrence is on the border for us, once again in Northern Israel right near Lebanon.

Update our viewers on the latest.

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, we first brought you this breaking news earlier tonight on "THE SITUATION ROOM". Now we have learned that those rockets landed close enough for the Israeli soldiers stationed in South Lebanon to actually see the fall.

So far, Israel has not retaliated. Right now, at least, has no plans to do so.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): The cease-fire has created peace, but not peace of mind.

COL. YARON SHAVIT, IDF: It seems very fragile at the moment.

LAWRENCE: Even after the cease-fire there were several skirmishes. Israeli soldiers shot and killed several suspected Hezbollah fighters who they say posed a threat to their forces in Southern Lebanon.

DAN GORDON, IDF SPOKESMAN: That's why it's imperative that the vastly expanded UNIFIL and the Lebanese army take up their positions as quickly as possible.

LAWRENCE: The commander of U.N. peacekeepers met with Israeli and Lebanese officials on the border.

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