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CNN BREAKING NEWS

Ceremony Formalizing Iraq's Interim Government

Aired June 28, 2004 - 07:00   ET

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

BILL HEMMER, CNN ANCHOR: Good morning.
And a remarkable surprise out of Iraq this morning. The much- anticipated handover of sovereignty, the handover of power scheduled for Wednesday of this week, is now a done deal, and it's done two days early.

(BEGIN VIDEO CLIP)

PAUL BREMER, FORMER U.S. ADMINISTRATOR IN IRAQ: We welcome Iraq's steps to take its rightful praise in equality and honor among the free nations of the world, sincerely L. Paul Bremer.

(END VIDEO CLIP)

HEMMER: An event today of enormous magnitude carried out with very little fanfare. Nonetheless, changing the course of history for that country. We are in depth today in Baghdad and throughout the country of Iraq on this AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING, with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everyone. As we start a new week, what a day it is in Iraq, and a day of monumental importance for the future of the people in that country, and a lot to cover. Jack Cafferty back from a few days off last week. Jack checks in in a moment here, but what a day it is to talk about in Baghdad.

SOLEDAD O'BRIEN, CNN ANCHOR: Absolutely. Of course the big surprise this morning. We'll get you caught up on what's happening in Iraq. The handover of authority from the U.S.-led coalition to the Iraqi interim government happened at 10:26 in the morning Baghdad time. That's two days before the June 30th deadline. Within two hours, the U.S. administrator in Iraq, Paul Bremer, boarded an airplane and left the country, completing his 14-month assignment.

The decision to speed up the handover is said to have come at the request of the Iraqi prime minister, Ayad Allawi. The transfer of power will not give the Iraqi government control over the 135,000 U.S. troops who are in the country, and there are no plans for them to leave anytime soon.

Meanwhile, insurgents claim to have taken a U.S. Marine hostage in Iraq, along with a Pakistani driver. Three Turkish workers are also being held there. Also, countless angles today to talk about, and we shall throughout the morning here. That surprise handover of power, though, took place about five hours ago.

Our chief international correspondent Christiane Amanpour starting us off this morning inside the green zone.

Christiane, hello there.

CHRISTIANE AMANPOUR, CNN INTL. CORRESPONDENT: Well, Bill, it really makes me smile, because they told us it wasn't going to be Hong Kong. It wasn't going to be a big fireworks and dignitaries coming over for this handover, but we didn't know it was going to be this cloak and dagger. We were called from our office early this morning. We arrived here, and until the moment we walked in to the little room, which is the prime minister's office, and saw that this was going to happen, we simply didn't know.

At 10:26, as you've reported, an array of Iraqi dignitaries, including the prime minister, the president, the deputy prime minister, the head of the supreme court, as well as Paul Bremer, the ex-administrator as he now jokingly refers to himself as, and his British deputy. They were there. They spoke of what a historic moment this was, and then they got and they presented the -- Bremer presented the blue-bound document of the transfer of sovereignty order to the prime minister of Iraq who, in turn, gave it to the supreme court justice, who in turn gave it to the president. Then there were claps, there were laughter, and there were some statements made. The prime minister of Iraq said that this was the moment, and Iraq was ready.

(BEGIN VIDEO CLIP)

AYDAD ALLAWI, IRAQI PRIME MINISTER: So this is something that I have asked the coalition to expedite, the transfer of sovereignty. We are sure that the Iraqi Authority now and the government of Iraq will be handling the situation, the security of our economy. And this is a big day for us and Iraqis. For the first time now will deal with their own problems.

(END VIDEO CLIP)

AMANPOUR: Now the transfer has happened. They say the security is their first and biggest priority. And we hope to hear not too distant future how exactly they are going to impose some kind of emergency to clamp down on the security situation -- Bill.

HEMMER: All right, Christiane, thanks for that. Much more with you throughout the morning. Now Soledad with more.

O'BRIEN: The situation in Iraq is very much on the minds of NATO leaders as they hold their annual meeting.

Senior White House correspondent John king joining us now from Istanbul, Turkey with more.

John, good morning.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Good morning to you, Soledad.

Administration officials telling us this plan, the surprise turnover of power in Iraq, has been the works for about a week, and that Prime Minister Allawi told the White House that he believed it was better, the sooner the better, for him to get to work trying to battle the insurgency in Iraq, and the White House agreed.

Now here at the NATO summit this morning, Mr. Bush was at the early morning meeting, and around 10:26, he checked his watch, looked back at some aides. Reporters in the room at the time didn't know exactly what was up. But Mr. Bush then exchanged a smile and a handshake with his chief ally in the war in Iraq, the British Prime Minister Tony Blair. Both those men, Prime Minister Blair and President Bush, to speak about this dramatic development a bit later today.

The president, of course, believes it is a significant, positive step, in a way anyway, ending 14 months of essentially U.S. occupation in Iraq. The president also received a small victory this morning here at the NATO summit as the leaders met and they did pose for a class photo after their session this morning.

NATO has now formally agreed to offer some new help to the Iraqi government, helping to train Iraqi police and security forces. Still unclear exactly what form that help will -- what shape that help will take, but the Bush administration certainly wanted that as well. Again, we will hear from the president and Prime Minister Blair a bit later today. The president views this as a dramatic step forward, but we should still note some 140,000 troops still in Iraq. When they will start to come home is still very much an open question, and even though the government has changed hands to the new prime minister and the new interim Iraqi government, still that violent insurgency for the U.S. troops to deal with -- Soledad.

O'BRIEN: Hey, John, quick question for you -- what's been the reaction among NATO members? Some almost sort of are in the hot seat right now, because they made it clear they would much rather deal with Iraq and the Iraqi government than deal with the coalition, and now, well, it's happened, so they're sort of now in the fore, is that right?

KING: Yes, it changed the tone of this meeting now that there actually is a new Iraqi government up and running, yes. Any other government does not want to deal through the United States anymore. They want to deal directly with the new Iraqi government. So the president, essentially, fast forwarding that process by two days. And again, NATO quickly saying it will help. It will be interesting to watch in the days and weeks ahead, though, what shape that takes. No one expecting any new troop commitments. It will be mostly U.S. troops on the ground in Iraq for some time to come, but perhaps NATO will send in some people to train. You will get more, at least diplomatic and political help, maybe not any boots on the ground.

O'BRIEN: John King for us this morning in Turkey. Thanks, John, appreciate it -- Bill.

HEMMER: We mentioned the handover of power was done in a ceremony that was without much fanfare at all. In a moment here, we do expect some sort of signing ceremony to take place in Baghdad.

We're going to watch this room for you, and as soon as that gets rolling in Baghdad, we'll bring it you.

In the meantime, though, let's continue our discussion. Samir Sumaidaie is Iraq's former interior minister, Iraq's Governing Council, our guest now from London.

Sir, tell us why it was necessary to transfer the power two days early.

SAMIR SUMAIDAIE, IRAQI GOVERNING COUNCIL: Well, it's not a matter of being necessary. It's, I think, a measure which has been taken to disrupt any planning that the insurgents and terrorists had for the big day. We had the intelligence that some major acts of terror were being prepared for the day of the transfer of power, and I think this decision was to preempt that and to take sovereignty in the hands of Iraqis, so that tomorrow and the day after would be normal days and the insurgents would be caught on the wrong foot.

HEMMER: Is Iraq ready for this?

SUMAIDAIE: Yes, absolutely. I think -- if anything, it should have been -- it should have been done earlier. The whole concept of occupation, in my opinion, was a mistaken concept, the idea that Western alliance, the United States and its allies came in to liberate Iraq, which they did, from Saddam Hussein. Then we found that they cast themselves in the role of occupiers. This made is really difficult for us Iraqis who fought against Saddam and have now been labeled as lackeys of the occupier or agents. It's mixed up the roles. It is now much more clear cut. It has removed the -- any excuse by the terrorists that they are fighting occupation.

HEMMER: While we are talking, we were watching this room where the swearing-in ceremony will take place, and when it gets under way, we'll get our viewers back there live.

As we watch this, though, one of the criticisms we hear consistently is that it's very difficult to train the new Iraqi forces to fight in battle with fellow Iraqis. Why is it so difficult to get that job done when it's the other Iraqis, and even the foreign fighters, who are responsible for killing so many civilians in your country?

SUMAIDAIE: It's not difficult to train Iraqis in order to police streets and fight acts of crimes and terror. But there are certain areas where political sensitivities are high and, therefore, any such training has to be done properly and with the right kind of orientation.

It is not a matter of Iraqis fighting Iraqis; it's a matter of upholding the law and maintaining stability of the country, and protecting citizens and their property.

HEMMER: Samir Sumaidaie is our guest in London. Thank you for your time, sir.

With the split screen, we're watching Baghdad as well inside the green zone, as the official swearing-in ceremony gets under way there in Iraq. We mentioned the other ceremony, done without much fanfare at all, Just a simple camera in the room as the ambassador Paul Bremer now making his way out of Iraq, we are told, not quite aware of his whereabouts. That was the report we were given several hours ago.

There was other news to talk about, though, throughout the country of Iraq today, though. Although the transfer of power now complete, the hostage situation still remains unresolved. The Pentagon says it cannot confirm whether or not a Marine being held hostage is Corporal Wassef Ali Hassoun, but says the corporal has been missing from his unit for about a week, going back to the 21st of June.

A family in Salt Lake City, Utah says the marine is Corporal Hassoun, and a family spokesman read a statement on his behalf.

(BEGIN VIDEO CLIP)

TAREK NOSSEM (ph), FAMILY SPOKESMAN: In the name of Allah, we pray and we plead for his safe release, and we ask all people of the world to join us in our prayers. May God bless us all.

(END VIDEO CLIP)

HEMMER: In addition to this, you have the three Turks also working in Iraq who are held captive as well. The captors have vowed to behead their hostage, the Marine, that is, unless the coalition releases all Iraqi prisoners. A number of developments throughout the morning in Iraq, and of course we are on it from every angle. Much more ahead as we go throughout the morning here on this AMERICAN MORNING.

Now, Soledad.

O'BRIEN: All right, Bill, the other story of course we're following this morning is the trial of Scott Peterson. It resumes today after a police detective admitted last week that he left a key detail out of his report. A witness claimed that she saw Laci Peterson at the warehouse where her husband Scott stored the boat the day before she disappeared. Well, the defense claims that visit could explain how a stand of her hair, believed to be Laci's, could have ended up in that boat. The prosecution will get to re-examine the police detective.

Joining us this morning to talk about all of this, CNN's senior legal analyst Jeff Toobin.

Good morning. Nice to see you.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Good morning. O'BRIEN: Let's go back to Friday, because that's when we were really talking about this information that was omitted from Detective's Brocchini's report. We heard later Friday from a police sergeant who said it wasn't omitted, in fact, it was in several other reports, and that's why Brochhini felt fine to leave it out. But do you think the damage is done?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: I think it's certainly a damaging moment. Remember, this is early in the trial. We have to be careful not to overstate the importance of any sort of day-by-day developments in the context of a long case.

But you know, the fact is, it does appear that this information should have been in Detective Brocchini's report, and it wasn't there, suggesting that he was trying to keep it from the defense.

However, the prosecution can try to rehabilitate their position and say, look, this was not some conspiracy to keep it secret from the defense and point out that it was in other reports. That will limit the damage. It probably won't eliminate it.

O'BRIEN: So if you had to gauge how much of a setback this is for the prosecution, because there are reports from people who are in the courtroom, who said the jury sort of perked up, that they were very interested in this information. They definitely took note of it.

TOOBIN: It's a definitely a real setback, but you know, trials are back and forth in this regard. People who are convicted sometimes have good days in court. So it shouldn't be overstated.

But you know, you just have to keep it in mind, in the context of a week where a juror left the case saying he thought the case was weak. I mean, there are definitely warning signs the prosecution isn't going as well as the prosecution would have hoped.

O'BRIEN: And in fact there are even more signs. Apparently the prosecution not getting really high marks from court observers about the case that they are putting on. What kind of value does that have realistically? Because it seems sometimes court observers see one thing, the jurors are seeing something completely different.

TOOBIN: Yes, as a frequent court observer myself, I have learned to be very humble about my own opinions, because you know, I really can't always know what the jury is thinking. Also, we expect all the information in the trial to come out right away. You know, sometimes trials don't unfold in a linear, clear way, incriminating information comes out later. All that really matters is that it comes out eventually in the government's case. But it is a peculiar -- some of the decision the prosecution has made here. For example, not to introduce evidence of Laci's body. That's what you almost always do in a murder case. You start with here is the body. There was a murder. That hasn't even been done yet.

O'BRIEN: We'll talk a bit more about this and some other cases as well that we're expecting to hear from later today -- Jeff Toobin.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: A big day in the Supreme Court starting at 10:00, we expect, probably.

O'BRIEN: Yes, it is. We'll discuss that. All right, Jeff, thanks.

Let's go back to Bill.

HEMMER: Thank you, Soledad.

Back to Baghdad straightaway with the signing ceremony as well under way at this point, a historic day for the people of Iraq, 25 million strong waiting for their future to be determined by the group of men and women who have now been chosen as the interim government acting on behalf of the Iraqi people. We anticipate elections, maybe in January of 2005. Maybe that changes by then.

But at this point, this is what we have today, a two-day early ahead-of-schedule transfer of power, with the U.S. civilian administrator Paul Bremer doing the handshake earlier today, and now making his way out of Iraq is the report that we've been given lately.

As we watch this, perhaps we dip on into Baghdad and listen to what's being said now in the Iraqi capital.

UNIDENTIFIED MALE (through translator): ... and to take care of the interest of the people and to stand by to preserve and guard the resources, water, and land and air, and to apply all legislation with sincerity and neutrality.

And may God be witness to what I say. Peace be upon you.

UNIDENTIFIED MALE (through translator): In the name of God, the most compassionate, the most merciful, I swear by God the almighty to carry out my responsibilities with dedication and sincerity, and to preserve the independence, and unity and sovereignty of Iraq, and its unified democratic system, and take care of the people, and stay upright (ph) guarding the interest and resources, and the land and the air, and to apply the legislation with neutrality and sincerity.

May God be witness to what I say.

UNIDENTIFIED MALE (through translator): The minister please repeat the pledge after me. In the name of God, the most merciful, the most compassionate, I swear by God almighty that I will carry out my duties and responsibilities with dedication and sincerity, and to preserve the independence and unity of Iraqi and its sovereignty and its unified federal system, and to carry out the interest -- take care of interest of the people, and to guard the resources, the water, the land and the air, and to apply all legislations with sincerity and neutrality.

May God be a witness to what I say.

(APPLAUSE)

GHAZI MASHAL AL-YAWER, INTERIM PRESIDENT OF IRAQ (THROUGH TRANSLATOR): Good evening. Congratulations to the ministers. We have exchanged kisses, so you can claim your share of kisses so that we live up to equality amongst all people and citizens.

(APPLAUSE)

In the name of God, most compassionate, most merciful, brethren and sisters, the citizens of Iraq, peace be upon all of you.

It pleases me in this blessed day that God willing to stand before congratulating you and myself that we regain sovereignty that we've always longed for. This Iraq that was in the forefront of people to take independence in the '30s of last century and the cradle of the oldest of civilization that coexisted and continue to coexist, where all people coexist together.

Before us there's a challenge and a burden, and we ask God Almighty to give us the patience and guidance to take this country, whose people deserve all goodness, and this work has to be collective amongst people and government in the spirit of one family, protecting our country and take care of our own wounds and overlook and overcome the grievances.

We in the government, we ask God Almighty to fill our hearts with mercy and clarity of vision and steadfastness.

AL-YAWER (THROUGH TRANSLATOR): We remember and recall the Koranic verse that says, "Oh God, give us guidance and mercy."

The prime minister will address you now, explaining and clarifying the agenda for the government.

May God protect Iraq and its citizens. Peace be upon all of you.

(APPLAUSE)

IBRAHIM AL-JAAFARI, INTERIM VICE PRESIDENT OF IRAQ (THROUGH TRANSLATOR): Mr. President, citizens, ladies and gentlemen, it is my pleasure and my honor to read you the letter from Mr. Bremer this morning; this day that we consider a victory, a big victory to all the forces of goodness in Iraq and the starting of the rising up that we're all striving for.

I ask God Almighty that our efforts and the efforts of those sincere people will be crowned with victory and success.

This letter came from the Provisional Authority:

"Mr. Judge Methat Mahmud (ph), as it is recognized in the U.N. Resolution 1546, 2004, the task of the Provisional Authority will end on the 28th of June, and at this time, the occupation will end and the interim Iraqi government will assume the complete sovereignty on behalf of the Iraqi people.

"We welcome the steps of Iraq toward assuming its legitimate role among all free countries of the world."

Bremer, the administrator, peace be upon you.

(APPLAUSE)

IYAD ALLAWI, INTERIM PRIME MINISTER OF IRAQ (THROUGH TRANSLATOR): In the name of God, most compassionate, most merciful, Mr. President, Vice President, Iraqi people, peace be upon all of you.

Congratulations for the sovereignty transfer. And we pledge that we'll move forward toward a secure future where prosperity, justice will prevail. And in this dear occasion, we will remember our martyrs, those who lit the candles for a future -- for a path, for a happy future.

And I convey my congratulations to our people and remember the sufferings in the past of our people.

ALLAWI (THROUGH TRANSLATOR): And also we salute the forces and peoples that stood by us, like Jordan, Syria, Turkey and others, as our people was living under the tyranny of Saddam.

And also I have to salute the coalition countries, especially United States, Britain, Italy, Sweden, Japan, South Korea and all the other coalition countries that helped us liberate Iraq from Saddam and his gang. And we extend the hand of peace to all of them.

Dear free people, our dear Iraq is now at a setback, but it is a very temporary setback, and we will rise up after that with the -- like mountains, standing up very firm.

And we will protect all the people regardless of religion, color or any other consideration, so every Iraqi will have the right to their unified, united Iraq where brotherhood and justice prevail. And a national unity and tolerance and brotherly behavior and spirit of peace and prosperity will prevail.

Changing this to reality is a matter that will take our fullest consideration and dedication. This will be our agenda, and that will prevail over all of Iraq.

The national unity, dear brothers, dear free brothers, is a sacred issue. And the pluralism of national origin, religion and others should be a factor of progression, not divisiveness.

ALLAWI (THROUGH TRANSLATOR): It is time that we helped each other and cooperated, we listen to the opinion and the other opinion, and we live according to Islamic values and the message of our prophet when he said all Muslims are equal like the two teeth of the comb.

Please let us not be afraid by those outlaws that are fighting Islam and Muslims, because God is with us. Those are the grandsons of the heretics of Islam; they were rejected by history. They are targeting our people, supported by some mercenaries of Saddam and his gang.

Those transgressors, some of them already went to hellfire, and some others are waiting for their turn. This gang that had dominated over our people and had went in coalition with the enemies of Islam, they will end up in disgrace and failure. And here I caution those Baathists who have not committed crimes in the past, I ask them to stay away from the mercenaries of Saddam. Those who pledge to continue in their crimes, I ask all of those Baathists to fight the enemies of the people and to inform the government of any suspicious activities they see.

The Iraqi people are asked to tackle those challenges by scrutinizing any suspicious activity and informing the government and the police.

Those mercenaries that came to Iraq from different countries to attack the Iraqi people, we, God willing, and with the support of our people, we will be on the lookout for them, and we will chase them and bring them to justice to get their fair punishment.

The decision by your government to invoke and engage the United Nations and the international peace force is a major and positive step so that we can tackle all the issues of Iraq: regaining the peace on the internal front and to bring back the police force; and to form an army according to constitutional, national and ethical values; and promoting and developing the ministry of defense and merging the national militia in the army.

ALLAWI (THROUGH TRANSLATOR): All of those armed forces will be the hand that strikes all those who will try to bring Iraq back to the old times.

The army is the Iraqi army, not the Saddam army. They are our brothers and sons. Those who had not been brought back into the army will be rehabilitated to go back to the civic sector or to retire as honored people.

Dear brethren who are set free now, the transformation from the dictatorship to the civil society and democracy, this is another major task of our government so that we have an Iraq -- a federal Iraq, united Iraq. This task is a hard task, a complex task.

The transformation of societies will not take place in week or days or months, but this transformation will take years that are full of hope and patience and tolerance. But we will be steadfast, moving forward toward peace and security, stability and democracy. These will be our steps, God willing.

I will not just throw promises, and I will not put you before a dark or bright picture. I just want to put the facts before you so that we, all together, work with free will and with objectiveness so that we can take care of the futures of our people.

Dear free brethren, Iraq will never be isolated just like Saddam wanted it to be. It will not be outside of history. We have to slowly and steadily move forward with the principles that will preserve our people and values that (inaudible) from the sovereignty and common interests and the balancing of those interests.

We have to be active and interact with what goes on in the world. Iraq, God willing, with their resources, both human and agricultural, touristic, oil and other resources, is in the center of action in the world, not on the margin.

ALLAWI (THROUGH TRANSLATOR): That's why we have to strengthen our relationship with the United States and the European Union and the regional organizations like the Arab League and the Organization of Islamic Conference, and other like OPEC and UNESCO and the IMF and the WTO and the Cooperation and Security in Europe, and all the other organizations, so that we can -- and also NATO and also Southeast Asian organizations -- all that to serve the interests of Iraq and its people and help to re-enforce security and stability.

That's why I extend the hand of peace to Iran and Turkey, and also the hand of brotherhood and love to Syria, Kuwait and Saudi Arabia, asking them to stand with us and help us to build brotherly relationships where common interests prevail. We are, after all, brothers.

And we are to protect the interests of our people. And we have to work together to handle the problems of the area in a civilized manner and to harness our relationship to the interest of our people and the progress of our people and prosperity of our people and the security of the region.

And I use this opportunity to salute many other important countries like Jordan, United Arab Emirates and Egypt, and salute the brotherly countries that sympathized with us like Bahrain and Oman and Pakistan and our friend, President Musharraf, for their support to Iraq.

And I also salute Bangladesh and India for their participating in the multinational forces.

ALLAWI (THROUGH TRANSLATOR): Dear brother, restoring life to the economic sector and fighting unemployment and building infrastructure like power, water, sewage, and offering health services and educational services, and building our reserve of hard currency, and dealing with the problems that accumulated over the past decades, and rethinking our investment laws to protect the national employment and workforce, and promoting the private sector and relying on the resources of Iraq -- all of those are factors that are necessary for our development.

Also developing the workforce, this will be our agenda on the economic and financial situations.

This is hard because Saddam's policies led to the loss of billions of dollars in the area of oil for food. And the money for salaries and wages, we are trying to work hard to reschedule or have the debt forgiven in our negotiations with the lending countries and the IMF and other entities.

In addition to that, our production of oil is regressing, is going back, because of the terrorists and their targeting of power and oil facilities.

So this will take time, maybe a year or two, until we build a strong and healthy economy. But that shouldn't mean that we are going to live in deficiency in the next few years. But we will move forward, God willing, to what's building and working gradually until we get to our goals.

Our government will work in a clear agenda that has priorities to tackle the serious matters first and put in place linchpins for progression on the economic infrastructure so that the returns to the Iraqi people will be quick, the financial returns will be good.

And we will study the privatization and consider their returns to promote investment. And here I call all the countries of the world to participate in supporting Iraq and rebuilding Iraq.

ALLAWI (THROUGH TRANSLATOR): Dear brothers, the cabinet has almost finished its agenda, and we will present it to you and it will be ready within a few days.

And in a few days, Iraq will radiate with stability and security. And we will work positively with the neighbors and the friends, and we will reciprocate by two steps for every step given to Iraq by others and will work toward the security and tranquility and peace of our people.

I call you for putting your efforts in being patient in that direction.

I salute our scholars and our religious authorities, Muslims, Christians, Shia and Sunni. At the forefront of that, Ayatollah Sistani.

I call all our sheiks and tribal leaders and all the leaders of our political movements and our social organizations to keep their voice loud and clear, to let the word of right prevail, and to fight the terrorists and to encourage the rule of law and to allow our judicial entities to exercise their role in the society, the rule of law and allowing justice to be objective and neutral. Our safety evolves in the society, and we are working in that direction.

Dear free brethren, I warn the forces of terror once again, we will not forget who stood by us and who stood against us in this crisis.

Here I arouse the efforts of people to defend the sacred places and the country. I call on all the heroes of the past, all the regions in Iraq and the sons of all Iraq, and I'll arouse their efforts to eradicate the foreign terrorists that are killing our people and destroying our country.

May God be with Iraq, and may God make it a great country, and may God make Iraq a factor of stability and security in the region, and we ask God to help us manage Iraq.

And peace be upon all of you.

(APPLAUSE)

HEMMER: Iyad Allawi is the new prime minister after this swearing-in ceremony taking place there in Bagdhad, the face now of the new Iraqi government. A reflection the population in Iraq: a Kurd, a Sunni, two Shias. And Iyad Allawi earlier today saying, every day matters, that's the reason why the handover has taken place in a surprise move two days earlier. We had anticipated on the 30th of June, which is Wednesday. However, coming today on this Monday morning. Iyad Allawi, saying like mountains, Iraq will stand firm.

SOLEDAD O'BRIEN, CNN ANCHOR: That handover, as you say, Bill expected on Wednesday. Of course, came this morning. Then six hours later what we're seeing right here, that official formal ceremony with the top leaders of the new sovereign Iraq have now been sworn in. Prime Minister Allawi, as we heard, laid out the agenda and also the challenges as well. Not just security challenges, but also some of the structural obstacles that had been put in place by Saddam Hussein himself. And he called on all the countries of the world to support Iraq's struggle. Let's take you to Anderson Cooper live in Baghdad. Of course, you were there for Wednesday's handover. Came as a little bit of a surprise this morning. Give me a sense of what the folks there have said about the handover and whether or not this more official ceremony has come as any surprise as well.

ANDERSON COOPER, CNN CORRESPONDENT: We anticipated some sort of ceremony after the official handover ceremony, which, as you point out, was a surprise, happening at 10:26 a.m. local Baghdad time. We knew there would be some sort of meeting that Ambassador Bremer would be out. CNN's Christiane Amanpour went to it, she was asked to go, of course, it turned out to be the actual handover ceremony. All along they had said, look, this isn't going to be a big Hong Kong-like handover ceremony, not going to be a big official event. We did anticipate it being at least a little bit bigger than it was and not quite such a stealth event. Obviously, security being a huge factor here. A huge concern here. And as you just heard Prime Minister Allawi discussing, really, number one on his agenda at this point, trying to get his arms around the security situation, trying in some way to bolster and revitalize not only the Iraqi army, but also the Iraqi police, Iraqi border patrols, the national guard, all the various elements of the Iraqi security services here. Not an easy job at all.

The U.S. military is trying to help out as much as possible. General David Petraeus is here. He's is the U.S. general in charge of trying to revitalize Iraq's security services. They are flooding the police with RPGs, with Kevlar vests, trying to get as much high- powered equipment to them as possible. But it is no easy task. It is slow going and training is not something that's going to happen overnight. But it is the number one thing you hear Iraqis talking about here. Look, we need to get security here, democracy is good, but without security, it doesn't have quite the same impact -- Soledad.

O'BRIEN: Anderson, while we're looking at really the aftermath of this official ceremony. Lots of handshaking, lots of congratulations being handed out to the ministers who have now been officially sworn in as part of the new sovereign Iraq. We heard from the Prime Minister Allawi where he pledged a secure future for Iraqis. Also where he said that he expected that, in fact, security and justice would indeed prevail. But as you are pointing out, that is a tremendous obstacle, especially maybe less the justice and more the security aspect of it, right?

COOPER: Absolutely. I don't know if you can hear. There's actually a fighter jet streaking across the sky. They've been streaking across the skies over Baghdad. Not all that common a sound these days. But this morning we've heard a lot of fighter jets overhead, as well as observation helicopters, some Apache helicopters, again, just reinforcing the importance of security here.

What we are hearing, though, from Iraqis, is the hope is, at least, that putting an Iraqi face on this, that having the Iraqi place on the streets, having the military doing their job, that they'll be, in effect, a force multiplier. That they can do things the U.S. military cannot. That an Iraqi police officer well equipped and well trained can identify who a foreign terrorist is and who is not. Who these people are. I had one Iraqi person who had some familiarity with security services and said to me the other day, look, we know who these people are. Give us the intelligence files. They want to build their own intelligence network. And they feel that they can do the job, if properly trained and if they have the equipment to do the job.

But, again, this is not going to be any kind of change overnight. It's a long, difficult road ahead and the U.S. military is not leaving anytime soon. More than 100,000 U.S. military personnel on the ground still today in Iraq. And they are likely to remain here for a long time to come, Soledad.

O'BRIEN: As we watch the last minutes this formal ceremony in which ministers have been sworn in to a new sovereign Iraq. Anderson Cooper is reporting for us from Baghdad. Of course, we're going to continue to check in with Anderson throughout the morning. Bill?

HEMMER: Soledad, there are countless angles to cover today regarding Iraq. NATO leaders meeting at the summit in Istanbul have agreed to train Iraqi forces. We'll get you live in Istanbul where the president is today.

Also live to Baghdad as well as the final end of this signing ceremony, official swearing-in ceremony concludes in Baghdad. It's a day of history. We'll see where we go from here in a moment on AMERICAN MORNING.

(COMMERCIAL BREAK)

(WEATHER REPORT)

HEMMER: Again, the news of the hour is out of Baghdad. Betty Nguyen is with us today for the headlines this morning. Good morning to you, Betty.

NGUYEN: Good morning. Of course, that is the headline this morning. The new Iraqi government officially taking control of the country. Members of the new leadership formally being sworn in just a short while ago. The U.S.-run coalition transferring power to the Iraqis just two days ahead of schedule. Former administrator Paul Bremer leaving Iraq shortly after that ceremony. More on that handover throughout the show.

The family of a U.S. Marine missing in Iraq is pleading for his safe release. An Arabic-language news network broadcasting video of the man yesterday is believed to be Corporal Wassef Ali Hassoun, missing from his unit since June 20th. Al Jazeera said insurgents are threatening to behead the man unless the U.S. releases Iraqi prisoners.

Court officials in Colorado will reportedly summon about a thousand people for jury duty in the Kobe Bryant sexual assault case. Lawyers are skill wrangling over the questionnaire they'll use to pick the final 12 jurors. That trial is scheduled to begin August 27th and it is expected to last several weeks.

In campaign 2004, Democratic presidential candidate John Kerry saying he doesn't cross picket lines. Senator Kerry making that announcement while leaving Sunday mass. The senator was scheduled to appear at the U.S. Conference of Mayors in Boston today but canceled because of a planned police union picket line. In a statement, the mayors say they are disappointed by Kerry's decision.

And the planet Saturn is gaining a follower. The Cassini spacecraft is nearing its seven-year journey to the planet. Cassini, equipped with cameras and a probe will slip through a gap in Saturn's rings this week. And if all goes well, the mission could provide clues about how the solar system was formed. Now, Bill, that is out of this world.

HEMMER: You're right. Thank you, Betty. Good to have you with us today on AMERICAN MORNING. Let's get a break here in a moment.

We've talked about the transfer of power and the new government. We've talked about the impact pact for the Iraqi people. What is the impact on the U.S. military? We'll get to that in a moment when we continue after this.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. Time to check in with Jack. He's got the question of the day. Welcome back.

JACK CAFFERTY, CNN ANCHOR: Thank you, Soledad, thank you. With the handover of power in Iraq complete now, the major tasks of the new government there will be many. Preparing for elections by the end of January in 2005, handle the day to day running of the country, gas, electricity, water, things like that. Work with the U.S.-led multinational force. They could ask foreign troops to leave the country. It's unlikely they will do that and they'll have to undertake all of these tasks while dealing with the terrorists and insurgents and various mutants that are running through the country trying to disrupt everything that's about to happen there. The question is this, how will the handover change things in Iraq? The e- mail address is AM@CNN.COM.

O'BRIEN: Good question.

UNIDENTIFIED MALE: A loaded question now.

CAFFERTY: I thought this up while I was in Colorado.

UNIDENTIFIED MALE: He knew the turnover was going to be today.

O'BRIEN: All the reporters there who were summoned in at the last minute, but Jack knew.

Let's get to Andy right now. A lot of news regarding Iraq. We'll see whether or not that impacts oil prices. Well, maybe gasoline prices as well. Good morning to you. First check, "Minding Your Business."

ANDY SERWER, "FORTUNE MAGAZINE": Already impacting the price of oil. We'll get to that in one second. After hitting a record high earlier this month, the price of oil has been falling for the past two weeks, easing further this morning with news of the turnover, plus, perhaps even more importantly, those pipelines in Iraq are back online, back to 2 million barrels a day. Now, the price of gas here in the United States is falling because of that. They are down nearly 7 cents over the past two weeks to $1.94 on average. Where you at? Well, Tulsa, Oklahoma, there at $1.69 is your lowest price in the United States for your major cities. San Francisco always high there because of taxes in California. So, it looks like the price of gas is going to continue to fall. And depending on how things go in Iraq, the price of oil will come down as well.

HEMMER: Cheap stuff in New York still $2.37. You'll have to wait a little longer...

SERWER: Don't fill your tank. Wait until you get out of New York to fill your tank.

HEMMER: Good advice. Quickly, futures are up in response to Iraq?

SERWER: Absolutely. Futures up sharply this morning. Last week a mixed picture. Techs up, the Dow down. We'll see what happens this morning. But, as you said, Bill, futures are looking pretty nice right now.

HEMMER: Let's get a break here. Much more on this surprise turn of events today in Iraq. The coalition authority is already out. The word is that Paul Bremer has already left that country onboard a C- 130. The new Iraqi government now officially sworn in. Back in a moment. All developments out of Iraq, the top of the hour, here on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: In Iraq, the June 30th handover that many people said was too soon, in the end wasn't soon enough. The long-awaited transfer of power in Iraq has happened. The U.S. occupation is officially over.

(BEGIN VIDEO CLIP) AMBASSADOR PAUL BREMER, FORMER ADMINISTRATOR, CPA: It was absolutely worth it. No doubt there will be challenges ahead. But I'm delighted to have been able to play a role here.

(END VIDEO CLIP)

O'BRIEN: U.S. administrator Paul Bremer now going home. Iraq taking its first steps into its new future. History made for both countries on this AMERICAN MORNING.

ANNOUNCER: From the CNN broadcast center in New York, this is AMERICAN MORNING with Soledad O'Brien and Bill Hemmer.

O'BRIEN: Good morning, everybody, thanks for joining us. A lot to cover out of Iraq this morning. A big show. Jack Cafferty is going to join us in just a few minutes with the question of the day.

HEMMER: You say a lot to cover. Indeed you are so right. Right now get you caught up on what's happening in Iraq. The stories as we have them at this hour. The new leaders of Iraq have been sworn into office. A low-key ceremony earlier today transferring power away from the coalition authority. Within two hours of that event, the U.S administrator to Iraq, Paul Bremer, boarded a C-130 and left the country, completing his 14-month assignment in Iraq. The decision to speed up the handover by two days said to have come at the request of the new Iraq Prime Minister Iyad Allawi and we heard from him last hour. The transfer of power will not give the Iraqi government control over the 135,000 U.S. troops in the country, and there are no plans for them to leave anytime soon. Meanwhile, insurgents claim to have taken a U.S. Marine hostage in Iraq along with a Pakistani driver. Three Turkish workers are also being held and their lives are being threatened.

O'BRIEN: The surprise handover of power took place just hours ago in Baghdad.

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