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Monday, July 03

Editor's Note: The CNN Wire is a running log of the latest news from CNN World Headquarters, reported by CNN's correspondents and producers, and The CNN Wire editors. "Posted" times are Eastern Daylight.

American music producer sentenced to 4 years on cocaine charge

DUBAI, United Arab Emirates (CNN) -- Grammy-winning music producer Dallas Austin was sentenced to four years in prison Tuesday on charges of carrying cocaine into Dubai. He also faces deportation once his sentence has been served.

Austin, 34, pleaded guilty on Sunday to bringing 1.26 grams of cocaine into the country.

Austin's attorneys can appeal his sentence within 15 days, the court said. (posted 1:35 a.m.)

Israel arrests suspects in death of a West Bank settler

JERUSALEM (CNN) -- Israeli forces early Tuesday arrested three Palestinian men in the West Bank town of Ramallah in connection with the abduction and killing of an Israeli settler last month, an Israel Defense Forces representative said.

Eliyahu Asheri, 18, was taken captive by Palestinian militants on June 25 and his body was found four days later near Ramallah.

The suspects in his death were arrested early Tuesday after Israeli forces surrounded a West Bank police station, following a tip they were inside. After a standoff that lasted several hours, the men surrendered without incident.

Asheri's captors, a militant faction calling itself the Popular Resistance Committees, said the teen was killed "as a response to the targeting and killing of our leaders."

The information appeared on a radical Web site. Asheri lived in the Itamar settlement, near Nablus. (posted 12:55 a.m.)

Militant deadline passes

JERUSALEM (CNN) -- A deadline set by Palestinian militant groups that are holding an Israeli soldier captive passed early Tuesday with no significant change in the uneasy standoff.

Israeli Cpl. Gilad Shalit was kidnapped on June 25 in southern Israel by three militant organizations -- the military wing of Hamas, the Popular Resistance Committees and the Army of Islam -- that demanded Israel start releasing Palestinian prisoners by 6 a.m. Tuesday (11 p.m. ET Monday).

Israel firmly rejected the ultimatum that was faxed to news agencies Monday, saying it would not deal with terrorists.

"The government of Israel would not yield to any blackmail by the Palestinian Authority and the Hamas government lead by murderous terror organizations," a statement from Prime Minister Ehud Olmert's office said. (posted 11:50 a.m.)

Corzine calls N.J. lawmakers into session to close budget gap

TRENTON, N.J. (CNN) -- New Jersey Gov. Jon Corzine called the state Assembly into special session starting Tuesday to resolve a budget impasse that has spurred him to shut down much of the state's government.

Corzine furloughed 45,000 "non-essential" state employees Saturday in a dispute with state Senate and House leaders over how to close a $4.5 billion deficit for the 2007 budget year. Unless a solution is found by Wednesday, the state's casinos will be shuttered -- a shutdown that would the state another $1.2 million a day, the state Gaming Commission estimates.

New Jersey law requires gaming inspectors be present in state casinos at all times. If the government shutdown persists, gaming inspectors will join the ranks of furloughed employees later this week, the Gaming Commission said.

Corzine's order calling the Assembly into session states lawmakers will remain in Trenton until a 2007 budget is enacted. Negotiations stalled after Corzine proposed a sales tax increase from 6 percent to 7 percent, a gubernatorial aide told CNN. (Posted 9:49 p.m.)

NASA going ahead with Discovery launch Tuesday

KENNEDY SPACE CENTER, Fla. (CNN) -- NASA will go ahead with Tuesday's scheduled launch of the space shuttle Discovery after further examination of a pencil-sized crack in the foam insulation around the shuttle's fuel tank, the space agency announced.

"It all looks fine, and the structure is in good shape," Associate Administrator William Gerstenmaier told reporters.

Discovery is scheduled to lift off from Cape Canaveral at 2:37 p.m. Tuesday. The launch, already scrubbed twice due to bad weather, was threatened a third time Monday after an inspection found a four- to five-inch crack in the external fuel tank's foam insulation.

The cracked insulation covered a bracket that connects the liquid oxygen feed line to shuttle Discovery's external fuel tank. Engineers believe the problem stemmed from a buildup of frozen condensation that crushed a small piece of foam, Deputy Program Manager John Shannon told reporters earlier Monday.

Gerstenmaier showed a piece of foam about the size of a slice of bread that broke off along the crack and said mission managers will keep a close eye on the damaged area as launch time approaches. (Posted 9:48 p.m.)

Yale University under investigation for handling of federal grant funds

(CNN) -- Yale University received subpoenas late last week from three federal agencies as part of a wider investigation into the way the Ivy League college accounts for millions of dollars in federal grant money for scientific research, according to a letter addressed to Yale staff by university president Richard C. Levin.

According to the the university, over 90 percent of federal grants awarded in recent years have come from these three agencies. None of the agencies could be reached for comment on Monday.

Federal investigators are seeking information on 47 grants and contracts awarded over the past decade totaling $45 million, according to Yale spokesman Tom Conroy. In addition, they want information on an unspecified number of "sub-awards" in which Yale received partial grant funding for research primarily conducted at other universities, Conroy said. (Posted 7:07 p.m.)

Governor calls special session of Assembly until budget crisis is resolved

(CNN) -- New Jersey Gov. Jon Corzine called for a special session of his state's Assembly to start Tuesday morning to resolve the budget impasse that has forced a shutdown of much of the state's government.

The executive order said the special session would not end until a 2007 fiscal year budget is enacted. (Posted 5:34 p.m.)

Israel launches attack into northern Gaza

JERUSALEM (CNN) -- Israel broke an uneasy quiet along its border with Gaza late Monday, launching an airstrike near the town of Beit Hanoun in the northern part of the territory, killing at least one person and wounding three others, Palestinian security sources said.

The sources said tanks and armored personnel carriers had taken up positions around the town.

The Israeli army said an airstrike targeted a militant cell preparing explosive devices but did not comment on the movement of armored vehicles around Beit Hanoun. The army has already confirmed a limited operation to clear the area of tunnels and explosives.

With the clock counting down to a 6 a.m. Tuesday deadline set by Palestinian militants holding an Israeli corporal, it was the first movement in hours from either side of the border. (Posted 5:34 p.m.)

Ex-soldier charged in connection with alleged rape, killings

WASHINGTON (CNN) -- A 21-year-old former soldier has been charged with killing four Iraqi civilians last March, federal prosecutors and the Army announced Monday.

Steven D. Green, a former member of the 101st Airborne Division, is charged with killing an Iraqi man, two women and a girl and with raping one of the women. The killings took place in Mahmoudiya, just south of Baghdad, in March.

Green, who had been stationed in Fort Campbell, Ky., was arrested Friday evening in Marion, N.C., and had an initial appearance Monday in a federal court in Charlotte, prosecutors said. Magistrate Judge Carl Horn read Green the charges against him and signed papers to send him back to Kentucky for trial.

The investigation is the latest in a series of investigations alleging U.S. troops killed civilians in Iraq. A Justice Department official said Green was charged in the civilian criminal system because he is no longer in the military -- but under federal law, military personnel can be tried in U.S. civilian courts for crimes committed overseas, prosecutors said. (Posted 3:26 p.m.)

San Diego receives temporary reprieve in dispute over cross on city property

WASHINGTON (CNN) -- The city of San Diego won a temporary victory Monday, after the Supreme Court put off an order for city officials to dismantle a Christian cross that has been on public property for nearly a century.

Justice Anthony Kennedy, acting on an emergency appeal, stayed a lower court's pending order to remove the cross. The stay allows the city and its supporters more time to file further legal appeals. City officials had said they were prepared to begin removal as early as Wednesday, if their high court maneuver failed.

The city and a coalition of groups, including the American Legion and religious conservatives, has been fighting in courts since 1989 to allow the Mount Soledad cross to remain. The structure, overlooking the city, was given congressional approval for creation of a national war memorial on the site. (Posted 3:22 p.m.)

DSCC 'likely' to back winner of Lieberman, Lamont contest

WASHINGTON (CNN) -- A spokeman for the Democratic Senate Campaign Committee, Phil Singer, said the DSCC and its chairman -- Sen. Charles Schumer, D-N.Y. -- support Sen. Joe Lieberman's primary bid, but "we aren't going to speculate about what happens next because that would undermine our candidate."

Lieberman, D-Conn., facing a tough primary battle with Ned Lamont, announced Monday he was launching a petition drive to get on November's ballot in the event that he loses the Aug. 8 primary vote.

A senior Democratic strategist told CNN the DSCC will "likely back the winner of the Democratic primary in Connecticut." (Posted 3:11 p.m.)

Rice talks to Olmert, expresses concern over Gaza situation

From CNN State Department Producer Elise Labott

WASHINGTON (CNN) -- Secretary of State Condoleezza Rice called Israeli Prime Minister Ehud Olmert this weekend to go over ongoing diplomatic efforts to end the crisis in Gaza and to express concern about the humanitarian situation, State Department officials said Monday.

The Israeli government has said it remains open to a diplomatic solution to the kidnapping of an Israeli soldier by Palestinian militants.

Rice told Olmert that while Israel had a right to defend itself, it should not hurt average Palestinians and deny their basic needs. The officials said she told Olmert that Israel's efforts should be "proportional" to the situation.

Although Rice did not discuss the arrests of Palestinian legislators, diplomatic sources have said the United States is not pleased with the roundup.

The G-8 foreign ministers said in a communique last week they were concerned about the sweeping number of arrests, and the State Department officials said the roundup of Palestinians lawmakers falls into the same category.

"When we see this done in a general fashion, this is not something we want to see happen," one senior official said.

Israel is allowing some humanitarian supplies to enter Gaza.

Crack found in insulation covering Discovery's external fuel tank

KENNEDY SPACE CENTER (CNN) -- NASA will further examine a crack in foam insulation found on the space shuttle Discovery to ensure it is safe for takeoff on Tuesday, the agency announced Monday.

A mission meeting was set for Monday evening, after an inspection found the crack in insulation covering a bracket that connects the liquid oxygen feed line to shuttle Discovery's external fuel tank. The crack is four to five inches long and one eighth of an inch to a quarter-inch wide, NASA officials said.

Officials believe it was created by ice buildup. Some condensation froze and expanded, crushing the small piece of foam, said Deputy Program Manager John Shannon at a news conference.

If the crack had caused the chunk of foam to fall off, it would not have caused a problem, Shannon said. (Posted 2:21 p.m.)

No movement apparent as hours count down to a deadline announced by militants holding Israeli soldier

JERUSALEM (CNN) -- As the hours counted down to a deadline set by Palestinian militants holding an Israeli corporal, there appeared to be no movement on either side with Israel firmly rejecting the ultimatum.

The three Palestinian militant groups who kidnapped Cpl. Gilad Shalit on Sunday June 25 in southern Israel -- the military wing of Hamas, the Popular Resistance Committees and the Army of Islam -- said if Israel did not respond by the deadline, they could consider the matter "closed."

As the day wore on, Ghazi Hamad, a spokesman for the Hamas-led Palestinian government said his government was not involved in negotiations for the release of Shalit but described Israel's continued military strikes as "complicating" efforts to find and end to the crisis. He also called on Israel to deal with what he called the "tragedy" of almost 10,000 Palestinians held in Israeli jails.

Mark Regev, a spokesman for the Israeli Foreign Ministry, said Monday evening that releasing the soldier unconditionally could end the Israeli military operation in Gaza.

He said no one in Israel had drawn up any lists, but he warned that Hamas politicians who act like terrorists "will be treated as terrorists."

Asked if that meant that Palestinian Prime Minister Ismail Haniya would be targeted for assassination, Reeve said the Hamas political leadership had expressed approval for the kidnapping and added, "All the Hamas leadership has to be seen as culpable." (Posted 2:20 p.m.)

Lieberman hedges bets in re-election bid, launches petition drive for November ballot

WASHINGTON (CNN) -- Sen. Joe Lieberman, D-Conn., facing a tough challenge in the Democratic primary, will launch an alternative petition effort to get on the November ballot as an "petitioning" candidate for the seat he has held for nearly since 1989, CNN has learned.

Lieberman campaign manager Sean Smith said Leiberman's first priority is to win the Democratic nomination in the August 8th primary. But if he loses the primary, Lieberman could still get on the ballot by petition.

"He would be a 'Petitioning Democrat,'" said Smith. "He is not leaving the party and not running as an independent."

Connecticut law requires 7,500 registered voters' signatures by August 9th in order for an independent candidate to have a place on the November ballot.

Lieberman was on the phone Monday morning informing Senate colleagues, including Minority Leader Harry Reid and fellow Connecticut Democrat Chris Dodd. An announcement was expected Monday afternoon.

A Lieberman adviser insisted internal polls show him with a slight lead against Democratic challenger Ned Lamont.

"This is a tight race," the adviser said. "Who know how many Democrats are going to turn out on August 8th. The entire state has elected him three times, and they should have the chance to do it again."

-- From CNN Correspondent Dana Bash (Posted 12:25 p.m.)

Soldier charged in connection with alleged rape, killings

WASHINGTON (CNN) -- A 21-year-old soldier has been arrested in Asheville, N.C. and charged with killing four civilians last March, when he was serving in Iraq, the Army said Monday in a news release.

Steven D. Green, who had formerly been stationed in Ft. Campbell, Ky., with the 101st Airborne, was taken into custody Friday evening, the statement said.

He is charged with killing an Iraqi man, two women and a girl as well as raping one of the females, U.S. Attorney David L. Huber of the Western District of Kentucky and FBI Special Agent in Charge Tracy Reinhold of Louisville, Ky. said.

Green's initial appearance took place Monday in federal court in Charlotte, N.C. He was expected to be sent to Kentucky for further proceedings.

6 paramilitary forces killed in a blast

From CNN s Syed Mohsin Naqvi

LAHORE, Pakistan (CNN) -- Six paramilitary force men were killed and three were wounded Monday in a bomb blast that struck a bus traveling near Dir, North Western Frontier Province, police said.

The bus, which was destroyed in the blast, was taking troops from the city of Dir to Chitral, where they were to provide security for a polo match.

A police official said the bomb may have been detonated remotely.

In a separate incident, the Taliban Council of Ulema in Pakistan's North Waziristan tribal area of Mir Ali near the border with Afghanistan held a public execution on Friday of an alleged murderer, tribal and government officials told CNN Monday.

Muhammad Ghani of the Eppi village had been arrested June 22 for killing two tribesmen and were found guilty by Taliban clerics. Their relatives carried out the execution. (Posted 12:01 p.m.)

"Non-essential" services shutdown amid N.J. budget showdown

From CNN's Zak Sos

TRENTON, N.J. (CNN) -- The budget dispute between New Jersey's governor and Assembly leaders which has closed state courts, motor vehicle offices and lottery terminals also threatens to shut down the lucrative casino business.

Gov. Jon S. Corzine furloughed 45,000 New Jersey "non-essential" state employees Saturday after he failed to reach a compromise on a 2007 state budget with senate and house leaders.

"I'm as concerned about not having our 45,000 state employees working as anyone else is," Corzine said on CNN Monday. "But we need to make sure we follow the law."

The governor said state police, prisons, mental hospitals and child welfare services will continue to operate. (Posted 12:01 p.m.)

More than 30 dead in train wreck

MADRID (CNN) -- More than 30 people died Monday when a subway train derailed in Valencia, Spain, in what officials said appeared to be an accident.

"The number (killed) will exceed 30," said Vicente Rambla, representative of the Regional Government of Valencia. He said the dead were being identified and would be removed shortly from the tunnel and taken to the Institute of Medicine.

The cause seems to be an accident, Mayor Rita Berbara Nolla told reporters.

Luis Felipe Martinez, subdelegate of the government, said a combination of excessive speed and a broken wheel appeared to be at fault. "One of the wheels broke, which is what caused the derailment," he said.

CNN+ reported the death toll at between 34 and 36. The newspaper El Pais said 22 people were injured, four of them seriously, including a pregnant woman. CNN+ put the number of injured at 32.

The train was traveling along the Number 1 line when it derailed in the subway tunnel along a curve in the track -- called a precaution zone -- at 1 p.m. (7 a.m. ET) between two downtown stations -- Jesus and Plaza de Espana, officials said.

In all, 150 people were evacuated from the tunnel. A team of psychologists working inside a field hospital set up near the site of the wreck. (Posted 11:53 a.m.)

Crack found in insulation covering Discovery's external fuel tank

ATLANTA (CNN) -- Workers at the Kennedy Space Center have found a crack in the foam insulation covering a bracket that connects the liquid oxygen feed line to shuttle Discovery's external fuel tank, KSC Public Affairs Officer George Diller said Monday.

NASA said the crack was discovered during an inspection Sunday evening. It is four to five inches long, and one eighth of an inch to a quarter-inch wide.

The Mission Management Team will discuss the issue at a 10 a.m. ET meeting.

The team will decide if they need to do a fix of some sort, or if they will proceed as planned with tomorrow's launch.

NASA's Bruce Buckingham said if NASA determines a repair is needed, they would have to build a platform that would reach out to the bracket to allow engineers to make the fix.

That would take more than a day, and mean no launch Tuesday.

There are two concerns with the cracked foam. One is that the foam would fall off during launch. The crack is near the belly of the obiter. The second concern is that ice could form in the crack, causing the crack to expand or the ice chunk to fall off, hitting the shuttle.

-- CNN's Jason Meucci contributed to this report (Posted 11:28 a.m.)

Iraq to neighbors: stop "harboring" terrorists; "We will get these people back"

BAGHDAD (CNN) -- The Iraqi government sent a loud-and-clear message to its neighbors Monday, warning them to turn over people on a most-wanted list or risk contributing to a spread of terrorism that would engulf the region.

"Harboring these terrorists and these criminals in their countries, it's not going to help at all. It's not going to help the whole region. We believe the security of Iraq is part of the security of the whole region, and if we cannot control terrorism in Iraq, then it will spread out all over the region, and the whole region will be in flames," National Security Adviser Muwaffaq al-Rubaie told CNN.

When Al-Rubaie released the list of 41 most-wanted Sunday, he said most of them are inside Iraq. Topping the list is Izzat Ibrahim al-Duri, former deputy commander of Iraq's armed forces under Saddam Hussein. (Posted 9:57 a.m.)

At least 30 dead in train wreck

MADRID (CNN) -- At least 30 people died Monday in a subway train wreck in Valencia, Spain, a Spanish official said.

The Spanish newspaper El Pais reported the death toll at 34, and said 14 people were seriously injured, including a pregnant woman.

The newspaper, citing a government official, said the wreck appeared to have been an accident, caused by a wheel breaking as the train was traveling too fast along a curve in the track.

The newspaper, citing "sources in the investigation," said the cause could also have been the destruction of part of the tunnel's wall or ceiling.

At least 12 of the 150 people who were evacuated from the tunnel suffered serious injuries, CNN+ reported.

A passenger using his cellphone first reported the accident. That call was followed immediately by 20 others, all from passengers, the network said.

Family members and friends of passengers were urged to call 011.34.900.43.10.46 for information. (Posted 9:41 a.m.)

Crack found in insulation covering Discovery's external fuel tank

NASA said the crack was discovered during an inspection Sunday evening. It is four to five inches long, and one eighth of an inch to a quarter-inch wide.

The Mission Management Team will discuss the issue at a 10 a.m. ET meeting.

The team will decide if they need to do a fix of some sort, or if they will proceed as planned with tomorrow's launch. (Posted 9:37 a.m.)

At least 30 dead in train wreck

MADRID (CNN) -- At least 30 people died Monday in a subway train wreck in Valencia, Spain, a Spanish official said.

The train along the Number 1 line derailed at 1 p.m. (7 a.m. ET), and led to the evacuation of at least 150 people from the subway tunnel, some of whom suffered serious injuries, said CNN+.

Israel responds to deadline from Palestinian militants; says it will not negotiate

JERUSALEM (CNN) -- The Israeli government Monday rejected an ultimatum from Palestinian militants holding an Israeli soldier, saying it will not negotiate and holds the Palestinian Authority responsible for the soldier's safe return.

In a statement, Israeli Prime Minister Ehud Olmert's office said, "The government of Israel would not yield to any blackmail by the Palestinian Authority and the Hamas government lead by murderous terror organisations. We will not hold any negotiations over release of prisoners. The Palestinian Authority carries full responsibility for the safety of Gilad Shalit and his safe return back to Israel."

The statement came in response to three Palestinian militant groups that abducted the soldier setting a Tuesday morning deadline for Israel to begin releasing Palestinian prisoners or suffer the consequences.

"We are giving the Zionist enemy until tomorrow, July 4th, at 6:00 a.m. (11 p.m. EDT Monday)," the statement said. "If they do not answer our humanitarian demands, the enemy will be responsible for all future consequences."

The statement did not specify what the consequences would be if the deadline passed without action and was released by the military wing of the ruling Hamas party, the Popular Resistance Committees and the Army of Islam.

The ultimatum came eight days after Shalit was abducted by the militants in a daring raid into southern Israel.

In response, Israeli military continued to rail against Palestinian militants. (Posted 7:58 a.m.)

U.S. Marine, soldier die in Iraq

BAGHDAD (CNN) -- The U.S. military Monday reported the deaths of two members of its armed forces in Iraq.

A Marine assigned to Regimental Combat Team 5 died "due to enemy action" during operations in Anbar province Monday.

A Multi-National Division - Baghdad soldier died Sunday evening when his vehicle was hit by an explosion during combat patrol north of Baghdad.

Since the start of the war, there have been 2,539 U.S. fatalities in Iraq. (posted 4:45 a.m.)

Israel given deadline by Palestinian militants

GAZA CITY (CNN) -- In a faxed statement to news agencies, three Palestinian militant groups that abducted an Israeli soldier set a Tuesday morning deadline for Israel to begin releasing Palestinian prisoners or suffer the consequences.

"We are giving the Zionist enemy until tomorrow, July 4th, at 6:00 a.m. (11 p.m. EDT Monday)," the statement said.

"If they do not answer our humanitarian demands, the enemy will be responsible for all future consequences."

Israeli Prime Minister Ehud Olmert has previously said he would not negotiate with Hamas on its demand for the release of Palestinians held prisoner by the Israelis in exchange for Cpl. Gilad Shalit's release. (posted 3:50 a.m.)

Israel keeps pressure on militants in Gaza

JERUSALEM (CNN) -- With its troops lining the Gaza border, the Israeli military Monday kept steady pressure on Palestinian militants as it tries to free an Israeli soldier abducted more than a week ago.

Israeli missiles targeted two buildings in Gaza early Monday, including a building housing al Aqsa Martyrs Brigade offices in the center of Gaza City, Israeli and Palestinian sources said.

The Israel Defense Forces and Palestinian sources said that al Aqsa Martyrs Brigades -- a military offshoot of Palestinian Prime Minister Mahmoud Abbas' Fatah movement -- had offices in that building.

Saeb Erakat, an adviser to Palestinian Authority President Mahmoud Abbas, told CNN ahead of the latest Israeli airstrikes that "more bombs are not going to bring the soldier back alive, nor will they resolve this complex situation. It will only add to the complexities."

Erakat and Abbas are part of the Fatah Party, which lost power to Hamas in elections held earlier this year.

Hamas controls the Palestinian government, and Hamas militants captured 19-year-old Israeli Cpl. Gilad Shalit more than a week ago. (posted 2:55 a.m.)

Presidential results are too close to call

MEXICO CITY (CNN) -- As the head of Mexico's Federal Electoral Institute (IFE) deemed the country's presidential election too close to call, two leading candidates claimed victory late Sunday.

"It is not possible within the margins established in the quick count to say what party has obtained the highest vote," said Luis Carlos Ugalde, president of IFE.

"The margin of difference between the first and second place is so narrow that it is not possible to say at this point in time who has won."

Ugalde said the counting of ballots must be completed in all 300 of Mexico's voting districts, with an official tabulation of votes to take place on Wednesday. (posted 1:20 a.m.)

Small group of Israeli troops enters Gaza

JERUSALEM (CNN) -- A small Israeli force entered northern Gaza at daybreak Monday, but a military source said it was a routine mission.

According to the source, the mission, close to a border fence, was "to conduct pinpoint operations to find tunnels and explosive devices." (posted 1:20 a.m.)

IDF: 3 Palestinians killed in suicide bombing attempt in Gaza

JERUSALEM (CNN) -- Three Palestinian gunmen were shot dead by Israeli troops in southern Gaza early Monday as they approached the Israel Defense Forces in an apparent attempt to detonate explosive belts two of the Palestinians were wearing, an IDF spokesman said.

The gunmen fired on the troops as they approached them near the airport in Dahaniya, but all three were killed, the IDF said.

It was after killing them that Israel troops saw the explosive belts being worn by two of the Palestinians, the IDF said. (posted 11:15 p.m.)

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