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Battle for Tripoli; Celebrations All Over Benghazi; Rebels Take Over Gadhafi's Compound; Journalists Trapped in Tripoli; Opposition Fighters Control Tripoli Airport

Aired August 23, 2011 - 23:00   ET

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

JOHN VAUSE, CNN ANCHOR: Hello, everyone. I'm John Vause at the CNN Center.

ISHA SESAY, CNN ANCHOR: And I'm Isha Sesay.

We want to welcome our viewers around the United States and right around world to our special coverage of the crisis in Libya.

It's been a day marked by intense fighting and a symbolic takeover in Tripoli.

Here's the very latest: Rebels took their six-month battle to the compound of Moammar Gadhafi, pushing inside, and knocking over statues of the long-time Libyan leader, making off with weapons but finding no sign of him or his family.

VAUSE: But, Isha, the "Reuters" news agency reports that Gadhafi has been heard on a local radio station. Now, according to "Reuters," in his radio address, Gadhafi says his withdrawal from the compound was a tactical move. His location is still not known as we've said.

SESAY: Meantime, pockets of fighting remain, including at Tripoli's airport. That's where CNN's Arwa Damon has been reporting. Rebels took over the airport Monday but it is still a target for loyalist troops.

VAUSE: And international journalists are trapped in the Rixos Hotel in the Libyan capital. The journalists, including our own Matthew Chance, remain virtual prisoners being held by troops loyal to Gadhafi.

SESAY: Well, CNN's Sara Sidner was right in the middle of all the chaos at that Gadhafi compound. Rebels invited her in as they swept through the complex. The latest she and her crew had to leave as bullets fired from outside the compound flew over their heads. We're going to show you some of the dramatic video right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Let's go. Sara, come on, Sara.

SARA SIDNER, CNN CORRESPONDENT: We're having to run out of the compound now. We see gunfire coming from outside the compound in. And it's getting -- it's getting too close. So we're leaving. We're not going to go all the way into the compound. It's definitely now from the outside of the compound firing towards us.

(GUNFIRE)

UNIDENTIFIED FEMALE: Let's go. Let's go.

UNIDENTIFIED FEMALE: Yes, go ahead.

SIDNER: We just got a gunfire incoming over our head.

UNIDENTIFIED FEMALE: There's a tracer behind you.

SIDNER: Just saw gunfire. We're seeing all these tracers hitting the water tank, hitting the area. So we've got to go.

(END VIDEO CLIP)

SESAY: Such courage displayed by Sara and all our CNN teams on the ground in Libya today.

A little bit earlier I was able to speak with Sara about following the rebels into the compound and the dangerous situation that sent her team running out.

(BEGIN VIDEOTAPE)

SIDNER: We had to flee the compound along with everyone that was standing there because we literally heard bullets flying past our heads. We looked back behind us and saw tracer rounds coming from a fairly large weapon that were coming directly into the compound. So we got out of there as fast as we could.

Everyone was running, rebels themselves holding all that ammunition and their guns. Their first reaction was to run and then to turn around and start firing back.

What we do understand at this point, that was not coming from within the compound. That was actually coming from a neighborhood to the east that was outside of the compound. And so, what the rebels are saying is it is Gadhafi forces and they are now attacking the compound which is something no one ever would have thought would happen. This is a compound that is really Gadhafi's personal space, the rebels saying they are so desperate now that they're willing to attack his own compounds to try to root out the rebels who have taken it over.

So, obviously, the Gadhafi regime has fallen. The question is, where is Moammar Gadhafi? Where is his family? People still don't note answer to that, but certainly the rebels have had a major victory today, a historic moment in the capital Tripoli.

SESAY: And, Sara, what do the rebels plan on doing next? They do indeed have the compound. It is theirs now. Gadhafi is still nowhere to be found. What's their next step as you speak to them?

SIDNER: That is the difficult part, because I think right now what's happening is they're really trying to concentrate on any pockets of the city that are still problematic, any pockets of the city where they still see the people who they consider enemies. That is those that were fighting for Gadhafi.

We did see also, to show you what the tension was like outside that compound, we did see them with a man who had his arms bound behind his back. They were walking him out of the compound. And then there was some kind of argument and suddenly we saw one of the -- one of the rebels pointing a gun, pointing a rifle at this man.

And we were asking who he was, was he someone who was captured. And then eventually he talked his way out of it, and they realized that he was an actual civilian who had gone in to the compound because he wanted to see it.

But there is definitely a sense that they are Gadhafi loyalists, that there are those who have now put on plain clothes who are in neighborhoods and who are dangerous to the rebels.

And so definitely the sense of security in the city is heightened. The rebels have put up more and more checkpoints. We do know they are celebrating in Green Square now.

And what we should mention is, the celebrations that we heard the day that rebels got into Green Square, we were down there with them, were slight compared to what's happening today, because in the neighborhoods now people are feeling strong enough and confident enough that Gadhafi regime has fallen that they've come out in their neighborhoods and started to celebrate in a way we have not seen before.

SESAY: Sara, I want to pick up on that episode you were describing about the man that was bound, that you later saw a gun pointed at.

One of the principal concerns of the international community is that what happens next does not deteriorate into a situation where we're seeing vengeful killings and basically a breakdown in law and order. So the question of the discipline of these rebels is absolutely critical. So, let me ask you this. As you were there in the compound, how disciplined, how coordinated did the rebels appear to you on this day?

SIDNER: Well, that's the difficulty because they seem coordinated at first because they did manage to get into this compound and fight their way through it. But whenever there is any sense that there is danger, suddenly, you see people just running all over the placement and this was one of those examples of them not knowing exactly who they were dealing with.

We also have to remember that some of these rebels are certainly not from Tripoli. And not everybody knows everybody. And so, what's happening is in this sort of urban warfare, the fear factor is up very high. Yes, when we saw the rebel leveled his rifle at this person's chest in fear that he wasn't telling the truth and in fear that this was an actual Gadhafi supporter who had been fighting, it was a scary moment.

One of the things that is troubling here is that people who have dark skin, people who are more dark-skinned than some of the other Libyans, people who they think are from Chad or from Nigeria or from Somalia are first targets, because these are the people that they say the Gadhafi regime has paid a lot of money to, has brought, in given them all the good jobs. Some of that may be true.

But they have become targets just because of their skin color. They are suspected because of their skin color -- something that rebels really have to try and be calm about. They have to be fair about.

And it's difficult, these folks who are having to deal with this, because they just happen to have darker skin than their neighbors.

(END VIDEOTAPE)

VAUSE: And our Arwa Damon has been at one of the hot spots in Tripoli, the airport where heavy fighting continued for another day. She gave us this update a short time ago as opposition fighters continued to face pockets of resistance from troops loyal to Gadhafi.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: We're actually in one of those pockets of resistance because Gadhafi fighters have been lobbing artillery, heavy machine gunfire, into the international airport complex that we're currently located on. And that has been the status quo ever since rebel fighters took it over at around noon yesterday.

Now, there are two military compounds according to the rebel firefighters who are located to the east of this location. And this is an area that they have yet to be able to secure. They also have not been able to move up the highway that leads straight to Gadhafi's Bab al-Aziziya compound because of the resistance that they are encountering in that direction as well.

There was a heavy gun battle going on here that lasted for around nine hours today. It died down just a short while ago. But then we have seen Gadhafi forces try to launch small attacks. They drove a vehicle up, fired some gun shots into the compound. But they're making their presence known.

And a short while after that, the rebel forces drove in a vehicle covered in blood where they said they'd killed one Gadhafi loyalist, wounded another, too.

And so, to the east where certainly they're still struggling at this point and they still expect a pretty intense fight.

VAUSE: Is there any way to know if these sort of counter attacks if you like by forces loyal to Moammar Gadhafi, are they under any kind of direction, maybe even by Gadhafi or by his son, Saif Islam? Or are they essentially freelancing at this stage?

DAMON: You know, John, it's really difficult for us to tell at this stage what sort of an organization there is on the other side. The attacks that have been coming in here appear to be fairly sustained for quite some time. At one point the rebel fighters were telling us that there was a two-pronged attack taking place, the more intense element of it coming from the east.

But then they say that simultaneously another unit of Gadhafi forces try to attack the compound from the south. So, that would seem as if there was a level of coordination. But again that was earlier in the day. While it has tapered off at night, that does not necessarily mean that the Gadhafi forces operating in this area have been defeated. The rebels have in fact been speculating because they say the level of resistance that they're coming up against is unexpected that perhaps some sort of high value individual, some sort of VIP, someone that regime would want to protect is perhaps located just to the east of this airport.

VAUSE: Arwa, one of the hallmarks of the opposition firefighters have been that they make these quick gains and then they haven't been able to hold. They it's happened for months now.

Is there a fear that same could happen in Tripoli?

DAMON: Well, there's the awareness of it, John. But the fighters here have been telling us that after the initial push into Tripoli where it seemed as if the rebels had controlled most of the city they then told us that there were certain locations where it appeared that Gadhafi forces managed to regroup and launch counter attacks where they were in fact driven back.

So there is the awareness amongst them that they do need to be able to figure out military, strategize how they are going to continue to hold onto these key locations that they've managed to gain control over.

VAUSE: OK. And, finally, there's this report out there that a government spokesperson is claiming that tribes loyal to Gadhafi in other parts of the country are now massing for some kind of assault on the capital. Is that even possible at this stage?

DAMON: Well, I think just about anything would be possible, although we've seen absolutely no indication of that sort of thing materializing just yet. And it would be very challenging if it were to come down to that, because it would also throw NATO into a fairly difficult position. Because then at the end of the day, you would effectively have two civilian armies for the most part coming up against one another. And especially if the fighting inside Tripoli were to begin to intensify, it would be very difficult for NATO to even try to adhere to its mandate to try to protect the civilian population.

But really we've seen no indication of any sort of a mass uprising in support of Gadhafi at this stage, although those individuals who do remain loyal to him, especially in the area that we're, in, are managing to make it quite challenging for the rebels to advance outside of this airport to the east and to the north.

(END VIDEOTAPE)

SESAY: Arwa Damon there.

Well, as we mentioned, our Matthew Chance is among the journalists being held at the Rixos Hotel.

They're in a very tight spot. Pro-Gadhafi forces have surrounded it and they are not letting anyone out. He spoke with Anderson Cooper about the tense scene inside.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): We're still very much in the same kind of grim situation, which is that, you know, we're in a hotel, we're in the top floor of the hotel. We've corralled ourselves into that top floor where Gadhafi loyalists are still very much in control of this hotel and the immediate perimeter around it. Beyond that I can't give you any good indication of what extent Gadhafi's forces -- to what extent they have control around this area.

But we are very close to Colonel Gadhafi's compound. Obviously, we were very close to the fighting that was going on as the rebels wrestled control of that compound from the Gadhafi forces.

The concern that we have now, Anderson, is that, you know, we seem to be in one of the few remaining patches of territory in Libya which is still controlled by Gadhafi's forces. And so, we're kind of very anxious about what might happen at this hotel in the hours ahead.

ANDERSON COOPER, HOST, CNN'S "ANDERSON COOPER 360": Earlier, we heard from you and you said the mood was grim, that you were all basically in this room. It was very hot, you were all in your body armor. Do you have communication with the Libyan forces which are inside the hotel, not allowing you to leave?

CHANCE: Well, I mean, I don't know whether we can describe it as communications. But certainly we have contact with them. They're walking around the hotel patrolling the lobby floor. They're in the basement as well.

Within the past few hours a number of them have come up to the journalists floor as well and gone into some of the rooms, which is something we're a little concerned about. But in general, you know, we don't have much communication with them.

Having said that, about two hours ago I was leaning on the balcony overlooking the interior courtyard of the hotel, and one of them sidled up to me, he said, "I suppose you're happy now, aren't you, you journalists?" I asked him what he meant. He was referring to the fact that rebels have made all these gains and have obviously taken control of Gadhafi's compound.

And so, you know, there is still a sort of little bit of hostility towards us, a little bit in which -- you know, sense in which Gadhafi loyalists have basically regarded the international media as being on the rebels' side in this conflict, even though that's obviously not the case. We're just strictly here trying to report the government's -- Gadhafi's side of things in this conflict.

But, obviously, we're doing that in a very restricted circumstances. We've asked, of course, to get out of the hotel. We're not happy being here anymore for our own security. But that's not something that the authorities in control of this hotel are prepared at this point to let us do. We hope that will change soon.

COOPER: I heard earlier on the air you saying that you felt like you had been used. How so?

CHANCE: In lots of different ways, I suppose. Obviously, we're here so that government thinks that -- feels that they've got the ears, the eyes of the international media to put across their point of view whenever they want.

And a good example of that last night when Saif Islam, Colonel Gadhafi's oldest son who was reported to have been captured by the rebels as they advanced into Tripoli a day earlier made this surprise appearance in the lobby of the Rixos Hotel -- actually just outside the Rixos Hotel. It was just outside the front doors in that car and managed to speak. You may remember that.

And so, in that sense, I think, we feel and they feel that we're valuable, if you like, at the moment. So, we want to try and continue that, try and continue reflecting the government position as much as we can.

(END VIDEOTAPE)

SESAY: A very worrying situation.

VAUSE: Yes.

SESAY: His compound has been taken over by rebels.

VAUSE: So where is the Libyan leader right now? We'll look at ahead.

SESAY: Plus, the rebels' transitional council is focused on the future of Libya. Hear what it has to say about questions over its credibility.

(COMMERCIAL BREAK)

SESAY: A few months ago, the Libyan leader seemed to be everywhere. And he always appeared to be surrounded by adoring supporters.

That's all changed now. Gadhafi seems to have vanished. Rebels are scouring Tripoli but they haven't turned up any sign of him. One of the first places they checked was Gadhafi's compound.

Sara Sidner talked to a rebel who hasn't completely crossed the compound off his list.

(BEGIN VIDEO CLIP)

SIDNER: So you were told that Gadhafi and his special forces, the people that protect him, were inside this compound.

UNIDENTIFIED MALE: Yes. SIDNER: But you did not ever see them?

UNIDENTIFIED MALE: Maybe they are under the ground.

SIDNER: You think they might be in tunnels under the ground?

(END VIDEO CLIP)

SESAY: As the search goes on for the Libyan leader, in an exclusive interview with CNN, a former aide called for an end to the violence and talked about what Gadhafi believes his job is now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He said that he has a job. And we have to continue our job. Job is to stop the rebellions. And we have right to do so. That is what he is convincing all of us.

(END VIDEO CLIP)

VAUSE: Meanwhile, Libya's national transitional council says it's ready to take over, but its credibility has been questioned after it said it had captured Moammar Gadhafi's sons. Soon after that announcement, one of the sons appeared in Tripoli and spoke with international journalists.

Our Wolf Blitzer asked the NTC about that.

(BEGIN VIDEOTAPE)

ALI SULEIMAN AUJALI, LIBYAN TRANSITIONAL COUNCIL REP. TO U.S.: You cannot judge the credibility of the TNC for the last six months by one incident. This was miscommunication, misinformation. It's happening like that.

The credibility of the TNC, it is proof to the people, not only Libyan but the United States government and the international community, they lead the Libyan people for this fight to get rid of this Gadhafi and they succeed. That's our main goal.

Saif, Mohammad, all this, this is the other issue.

WOLF BLITZER, HOST, CNN'S "SITUATION ROOM": So you're looking for all these sons in addition to Moammar Gadhafi. If you find them you'll arrest them?

AUJALI: Of course. Of course.

BLITZER: You'll treat them humanely, I assume.

AUJALI: This is the call from everybody, not only me but the TNC, Dr. Mahmud Jibril. He made all these calls.

And I'm sure, we have to present to the world that we are a civilized people, that we have to deal completely different than what Gadhafi did to his -- BLITZER: Did you see the pictures of that compound? And we showed to your viewers, you know, they just ran in, they did an unbelievable job ransacking that place but coming out with files and all sorts of other stuff. It almost liked like they were looting that presidential compound.

AUJALI: I've been there a few times to the place but I've never been inside.

BLITZER: You were never inside there?

AUJALI: No, just in the offices where Gadhafi --

BLITZER: And this is obviously not a highly-trained military that you have. These are an of lot of people who were engineers or scientists or teachers and, all of a sudden, they took up arms, learned how to use arms and now they're going after Gadhafi's forces who were highly trained.

AUJALI: Because of the determination and accumulation of 42 years of oppression, of injustice, (INAUDIBLE) of the Libyan people. This is why. They are untrained. Some of them they just get the weapon the first time in their lives.

But now, they are making history of Libya to be a country with the hope, with a future, and work with the international community. That's the great thing is happening with the Libyan history.

BLITZER: How secure are those chemical weapons that Gadhafi's military stockpiled, the sarin gas, the mustard gas?

AUJALI: I believe now he has no more access from this.

BLITZER: Who controls those storage facilities?

AUJALI: I really don't know exactly. You know, these kinds of things are s always very secretly handled. But I'm sure that Gadhafi has no access for this because now he's somewhere disappeared.

BLITZER: He's just hiding somewhere.

AUJALI: He's hiding somewhere. Yes.

BLITZER: So, you think it's only a matter of days before he's found?

AUJALI: The main thing to me now that Tripoli is secured. TNC gets access to the money. Try to keep the security of the Tripoli city as much as we can. That's what we need. We need to be united, to deal with the issues, and to determine -- the determination of the Libyan people for the future democratic country is going to happen very soon.

(END VIDEOTAPE)

VAUSE: While there is widespread contempt for Moammar Gadhafi, the president of Venezuela has only warm words. At a cabinet meeting, Hugo Chavez called Gadhafi a brother and says Venezuela would recognize no other Libyan government. Mr. Chavez has been highly critical about the NATO air strikes on Libya.

SESAY: Well, much more ahead for you on the situation in Libya when we return.

VAUSE: We'll also have some other news of the day, including an earthquake in the eastern part of the United States. Millions of Americans got the surprise of their lives. We'll show you what they did when the ground started shaking.

(COMMERCIAL BREAK)

VAUSE: Welcome back.

Conditions in Libya's war zone have been changing by the hour. We just heard from a Tripoli resident who says people are now forming militias to protect their neighborhoods from Gadhafi loyalists. The "Reuters" news agency reports the Libyan leader Moammar Gadhafi has addressed the country on radio and says the Libyan leader calls his retreat a tactical move.

Thousands of rebel forces overran the compound, a significant symbolic step in their quest to overthrow Gadhafi. They seized weapons and other items. Meanwhile, the rebels fought off pro-Gadhafi forces at Tripoli's airport, a key asset for control of the city.

And international journalists remain holed up in the Rixos Hotel which is now a prison. Pro-Gadhafi forces are not letting them leave.

SESAY: We're also monitoring a number of developing stories right now for you. A new U.N. draft resolution is taking aim at Syria's crackdown on opposition protesters. The U.N. says more than 2,200 people have been killed in the protests. Sanctions include freezing the assets of President Bashar al Assad and other officials. The U.S. and its European allies are behind the resolution, but the Russian ambassador says he doesn't think the time is right.

VAUSE: Dominique Strauss-Kahn is a free man. A New York judge dismissed the sexual assault charges against the former chief of the International Monetary Fund. Strauss-Kahn was accused of assaulting a housekeeper in his hotel suite.

When prosecutors discovered the housekeeper could not be relied upon to tell the truth about details of the incident, they moved to dismiss the charges.

(BEGIN VIDEO CLIP)

DOMINIQUE STRAUSS KAHN, FORMER IMF CHIEF (via telephone): I'm thankful for my wife, my children, my friends, and those who supported me during this period. I look forward to returning to my country, and I still have some things to do before I leave. I'll explain more fully when I return.

(END VIDEO CLIP)

VAUSE: And the hotel made has a pending civil suit. SESAY: Another big story we're following for you has the U.S. Eastern Seaboard buzzing. A 5.8 magnitude earthquake struck near Washington. It is a rare event, the strongest seismic activity in the region in more than a century. There are no reports of serious injuries, but there was plenty of shock and surprise.

(BEGIN VIDEO CLIPS)

UNIDENTIFIED FEMALE: I was sitting in the Union Station eating lunch with a coworker. And the Union Station just started trembling. And then particles start falling from the ceiling. I looked up and saw the ceiling moving and particles were falling. So, we jumped up. Everybody just started running.

UNIDENTIFIED MALE: I'm from San Francisco, born and raised. And I've lived through over 50 earthquakes. So my feet are real sensitive.

So I felt the first light tremor. I even told a coworker, we're having an earthquake. He said I didn't feel a thing.

Then the big punch hit. Building rattled. And I grabbed my coat and cell phone and said let's get out of the building.

UNIDENTIFIED FEMALE: I was at my desk typing away. All of a sudden, I felt like a little jolt. I kind of looked around but no one was around me. Then I felt the jolt again. And I just wasn't really sure what was going on.

And then I heard one of our managers like go by saying everybody get out. So I wasn't sure if it was like she said like the air conditioner or if it was like an earthquake.

(END VIDEO CLIPS)

SESAY: The quake rattled New York several hundred kilometers to the north. One resident there told us what she did when the quake began.

(BEGIN VIDEO CLIP)

RESIDENT: I was sitting on the steps. And then I was on the phone. And the steps were actually moving. I was like, what's going on?

Then I looked down and the ground was moving. Then I called my girlfriend on the phone, and she said it was an earthquake in D.C. and it might be just aftershocks. She said it was just a mini one. But the whole ground was moving. It was scary.

Then they just started evacuating everybody. And it was crazy, like you see it out here. Like just crazy. The whole steps like right there down in the crack, everything was just moving.

And I was just like, it's kind of scary. So, especially after 9/11 is coming so close, so I think everybody is like on edge a little bit.

So, hopefully that's just what it is and we can go back in.

(END VIDEO CLIP)

SESAY: Well, there was some damage to the National Cathedral in Washington but a church statement says the building is safe.

Well, we'll have the very latest on the unrest in Libya when we return.

VAUSE: Yes. We'll go to the country's second largest city to gauge the mood there.

SESAY: And we'll look at the progress and missteps of what's likely to be the next government.

(COMMERCIAL BREAK)

VAUSE: To our viewers in the United States and around the world, welcome back to our special coverage of the crisis in Libya. I'm John Vause at the CNN center.

SESAY: And I'm Isha Sesay. Still no sign of Libyan Moammar Gadhafi. But he has reportedly being heard.

VAUSE: Reuters reports he addressed his people on radio calling his retreat from Tripoli a tactical move.

SESAY: Thousands of rebels stormed his compound Tuesday taken weapons and destroying statues of Gadhafi.

VAUSE: At Tripoli's airport, rebel forces battled those loyal to Gadhafi for nine hours. The rebels tell CNN they believe the pro- Gadhafi fighters are protecting a high-profile figure

SESAY: Meanwhile the Rixos hotel has become a prison for international journalists including our own, Matthew Chance. Pro- Gadhafi forces are not letting the journalists leave and supplies are running out.

VAUSE: And at short time ago I spoke with one Tripoli resident about what he's seeing in his neighborhood as this battle continues.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (via telephone): A lot of volunteers from the neighborhood they started to make road blocks and you know guard watch on the neighborhood. And it seems that these are the people that rebels rely on for intel and coordination if something happens. Because there are still some people who are shooting once in awhile or fleeing or whatever. So that is one thing.

The other I was very surprised with a lot of you know self-restraint and organization from the neighborhoods. I mean, they were talking about cleaning up the streets tomorrow in the neighborhoods, which sort of reminds me of the post riots in the U.K., some houses of known figures, they were talking - some people were you know brainstorming that they should storm the compound and see what's inside. And others were saying, no, we are civilized. We will not behave like those savages. This is a property. It will stay as it is you know until the judiciary will you know confiscate and do whatever they do. I was very pleased with that.

VAUSE: I was just going to ask, so apart from the situation with the Gadhafi loyalists who are still holding out, the situation with law and order as far as you know there's been no reports of retaliation, of revenge attacks, no looting?

UNIDENTIFIED MALE: Not from the residents, no, no. Absolutely no looting, no.

VAUSE: And no revenge attacks?

UNIDENTIFIED MALE: No. That's what I meant with the restraint, you know. I don't want to give details because it would give up my location. But one of the known figures of the houses saying we are not going to storm in until the judiciary or the army, whatever it is, they will take over rule and do it. This is a property that will remain safe until you know further notice.

VAUSE: So right now, are Gadhafi snipers, are they the biggest concern from a safety point of view?

UNIDENTIFIED MALE: Yes. They're the biggest concern, a nightmare, you know. It's these individuals. And they are you know at the moment this is what I heard that the Rixos area is unreachable because there are some snipers. Even as I said within the hospitals, they use the hospitals as stations for the snipers. And you know also you know for the, as medical aid for the loyalists, you know for the first aid.

So you know the hospitals, they're all taken now by the rebels. The snipers still remain a problem and I've seen the rebels at the Martyr Square, there was a lot of celebration. I spoke with them you know because we and other people were concerned, because now it has become a war between neighborhoods.

There is this big neighborhood that was pro-Gadhafi and there are some rumors that maybe one of his sons or all of them are still hidden in that area. It's close to us. The rebels are aware of the situation. They said you know tomorrow morning at dawn we'll start you know cleaning the streets and you know root out the armed loyalists.

VAUSE: Did you head off to any of the hospitals? We've heard reports that a lot of people have been wounded. There have been hundreds of casualties over the past 24 hours. You mentioned hospitals. Do you know how they're coping?

UNIDENTIFIED MALE: Well, I can't - I don't know. I can't comment on that. But me and my friends, we went inside one of those hospitals it, you know the big one. And it was in disastrous conditions. I mean, we were the first ones to form in just to check if there are any loyalists still there. And then on a second thought we started to gather some medicines and equipment to give rebels because there are some wounded people.

The hospitals are in unusable condition. When I went there it was really scary, looked like a post-hurricane. The lights were off. Water pipes broken. The fire alarm was on. A lot of broken equipments. So we tried to salvage whatever we can so we can give to the rebels. But the hospitals at the moment, from what I've seen, one of the main ones is unusable. It is unusable.

Plus we also saw the locations of the snipers on the balconies where they put the chairs and all the arrangements for the snipers. So this is as far as I can say about the hospitals in general.

VAUSE: And very quickly, last question, why do you think there are so many Gadhafi loyalists holding out at the Rixos hotel where all the international journalists are?

UNIDENTIFIED MALE: I have no idea. Sorry.

VAUSE: OK. We'll leave it there.

UNIDENTIFIED MALE: Yes, we'll do that. Because actually while trying, I want to stress this word, trying to go to the Martyr Square just to attend the celebrations, we had to really have a wide turn around the Rixos, not to touch the highway, not to touch the main road because of the snipers. But this I hope by tomorrow it will be solved.

(END VIDEOTAPE)

SESAY: In the rebel stronghold of Benghazi the head of Libya's national transitional council is already looking for ways to bring the country together. Its first goal, move to Tripoli and begin the transition.

Our Fred Pleitgen has more on the reaction and the celebration.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN CORRESPONDENT: People here in the Defacto, rebel capital of Libya, Benghazi are partying probably harder than they ever have before. And they say the reason why they are doing hat of course is this is the first time they truly believe that Moammar Gadhafi will not return here to this country. Thank you very much. They say it's the first time they truly believe that Moammar Gadhafi will not come back. And keep in mind this is the town where uprising started. It's a town that was almost taken by Gadhafi troops during this uprising. And it's now won of course that they believe they've finally won this battle. However, people here tell us that even though they're very happy with what's going on, they still believe there's a lot of work to be done.

UNIDENTIFIED MALE (through translator): Today's a big party because it's Gadhafi's last day. Thank God it's Gadhafi's last day. We're thankful for our army. We're thankful for our martyrs. And we're thankful for NATO for their help. Today, Libya is free.

UNIDENTIFIED MALE (through translator): Education before was horrible. Everyone went abroad to study to get a better education. God willing, the future will be better for my son. After six years, hopefully everything will be better and we'll have a good education system.

UNIDENTIFIED MALE: Because after Gadhafi is out, Libya is going to be much better. More people are going to learn other languages.

PLEITGEN: Of course, even though they have these celebrations going on right now, the people say they do realize that there's going to be a rocky road ahead. There's a lot of national unity that has to be created and as the leader of the transitional national council said also, a lot of wounds that need to heal.

Frederik Pleitgen CNN, Benghazi, Libya

(END VIDEOTAPE)

VAUSE: Now, the word from any NATO is, the war is not over yet but it is close. A senior official says pockets of resistance extend beyond triply. And NATO is on the lookout for any last issues of chemical weapons or scud missiles.

(BEGIN VIDEO CLIP)

COLONEL ROLAND LAVOIE, SPOKESMAN, NATO: The people of the uprising is without a doubt a historical milestone, although not yet the last chapter of the Libyan conflict. I would like to stress here that regardless of the latest involvement, our military mission has not changed.

Our mission remains to protect the civilian population against the threat of attacks and to enforce the arms embargo as well as the no fly zone as mandated by the United Nations.

(END VIDEO CLIP)

SESAY: The EU says it will also support the Libyan people. Foreign Minister Catherine Ashton says the EU is talking about offering aid, medical splice and fuel where it's need.

(BEGIN VIDEO CLIP)

CATHERINE ASHTON, EU FOREIGN MINISTER: We all recognize that there have been dramatic events that are unfolding currently in Tripoli. I've just spoken to Chairman Jaleel who tells me that eight percent of Tripoli is controlled by the national transitional council. But that he anticipates it will take a little while for that to move further forward.

(END VIDEO CLIP)

VAUSE: Now, after the turmoil in Libya dies down, there will be a new government. But as Jill Dougherty reports, the details are far from settled.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT (voice-over): When a jubilant Saif Gadhafi suddenly appeared after the national transitional council claimed he'd been captured it blew a hole in the credibility of the rebels' political leadership wing.

But U.S. officials are sticking by the NTC.

SUSAN RICE, U.S. AMBASSADOR TO U.N.: Clearly in a situation as fluid as this, it's evolving rapidly. There's going to be confusion, there's going to be misinformation.

DOUGHERTY: Since it was established at the beginning of March, setting up headquarters in the rebel stronghold of Benghazi, the NTC has had to prove itself. A Hodge dodge of former Gadhafi regime loyalists, reformers, ex-patriots, members of different tribes and some Jihadists. About the only thing they had in common was a desire to get rid of Gadhafi. In fighting turned deadly when the rebel's top commander General Abdel Fatah Younes was assassinated.

DANIEL SERWER, JOHNS HOPKINS UNIVERSITY: My impression was I was meeting with very thoughtful, capable people.

Reporter: Professor Daniel Serwer has met with the NTC. He says nevertheless they seem acutely aware of the need to establish the rule of law.

SERWER: From what we know, they want a democratic Libya, an Islamic state but a state that is clearly a multi-party state that is clearly a liberal state. But it's certainly an experiment for Libya, which has not had a state at all.

DOUGHERTY: The public face of the NTC is Mahmoud Jabril, a strategic planning expert who taught at the University of Pittsburgh and previously served in the regime.

For months the Obama administration was skeptical. But the group pledged to work for a transition to democracy. And July 15th, the U.S. recognized it as the legitimate governing authority in Libya. That freed up Gadhafi government assets frozen by the U.S. and other countries.

Tuesday the state department said it's working with the U.N. to release one to $1.5 billion of a total of $30 billion frozen by the U.S.

VICTORIA NULAND, SPOKESWOMAN, U.S. STATE DEPARTMENT: The TNC has made a strong commitments to the United States with regard to the use of the money with regard to transparency, et cetera. We would not have taken this step if we didn't have confidence that the money will be used, will get to the people who need it and will be used appropriately.

DOUGHERTY: The state department is taking this cautious approach even as it tries to speed up the process of getting money to the rebels. Events in Libya are moving with blinding speed, and the NTC could soon be governing the entire country.

Jill Dougherty, CNN, the state department.

(END VIDEOTAPE) SESAY: A long difficult road ahead for the NTC.

VAUSE: Yes. And a few questions about their credibility right now.

SESAY: Yes, absolutely. Well, oil is the main economic driver of Libya's economy.

VAUSE: That industry has ground to a halt. We'll look at how that's affecting the global oil market and what the future might hold.

(COMMERCIAL BREAK)

VAUSE: A Libyan rebel leader told reporters that even though there is still some resistance, the six-month battle for control of Libya was all but over. Rebels stormed the presidential compound in Tripoli after hours of heavy fighting. Celebratory gunfire rang out as rebels carted off weapons, knocked over statues of Moammar Gadhafi.

Meanwhile, the Reuters news agency reports Gadhafi was heard on a local radio station. It reports that in his radio address, Gadhafi says his withdrawal from the compound was a tactical move.

SESAY: On the eastern front of Libya, rebels say they've overrun an oil town of Ras Lanuf to slow Moammar Gadhafi who was seen retreating to his hometown of Sirte. A rebel spokesman tells Reuters there was no damage to the oil facilities in Ras Lanuf. It was the scene of intense battles earlier in the conflict, you may remember. And rebels report only minimal damage to oil facilities in Brega, at a town they took on Monday

SESAY: Well, the price of New York crude oil moved up again. Prices had eased Monday as there were hopes the toppling of Gadhafi would allow Libya to resume oil production quickly. When news came it may take longer than first thought the price moved up.

NYMEX crude raised $1.02 to close at $85.44 a barrel. It was a different story in Europe. There was no movement on BRENT oil, the benchmark of European contract (ph). It was flat at a little over $109 a barrel. But that is still down from the $116 just weeks ago.

VAUSE: Isha, Libya's oil production has almost entirely dried up during the fighting. Now take a look at this graph.

For the past ten years Libyan production approached two million barrels a day, about two percent of the world's supply. This year, though, it fell to almost zero.

Now, the question is, how long before those levels can be reached again? More from Christine Romans.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's been said if you drill to the heart of every war, eventually you strike oil. Now, oil not the cause of this conflict, but it's critical to the rebuilding of Libya. In good times, Libya's supplies two percent of the world's oil. But when will that oil come back online? Estimates vary from a month to a few years.

PETER BEUTEL, PRESIDENT, CAMERON HANOVER: When this is their only export, their only hope of putting this government together and tying this country up, I've got to think that they're going to move heaven and earth to get it. I expect it's going to be a lot sooner than anybody guesses. I think that they are going to have some oil almost within a month, and I think within a quarter they are going to have a decent amount.

ROMANS: Even before it exports another drop, there are Moammar Gadhafi's riches frozen around the world, more than 30 billion in the U.S. alone. At present value Gadhafi's stash of gold is now worth more than $8 billion. But nation building can be littered with thievery and waste of a country's resources and riches.

How to make the history books different for Libya? It's why transparency is crucial.

MARC GINSBERG, FMR. U.S. AMBASSADOR TO MOROCCO: It's going to take the commitment on the part of a transparent national government that is going first of all be able to get that money back, get those assets unfrozen from foreign governments, and most importantly prepare a budget that is going to be able to be reviewed by the IMF, by the World Bank and by other institutions.

ROMANS: The U.S. treasury says it's not ready just yet to release the $30 billion in frozen assets. But you can be sure the scramble for access to Libya's money and resources is only just beginning.

Christine Romans, CNN, New York.

(END VIDEOTAPE)

VAUSE: So let's take a look at how the Asian markets are now responding.

Japan's Nikkei is down a little. Hong Kong's Hang Seng also down, so, Kospi down as well there by just over one percent. The Australia stock exchange, Sydney, down just by 0.5 percent as well. Isha

SESAY: Well, stocks in the U.S. were lifted by that surge in the price of oil. It led to major advances. Here's how it looked at the close.

The DOW came very close to gaining three percent. The S&P pushed past there getting close to 3 1/2 percent. But the Nasdaq raised the most, gaining more than 4.25 percent.

And back on the street of Tripoli, a group of journalists are stuck inside a hotel unable to cover the story.

VAUSE: Yes, including our own Matthew Chance. They've now actually become the story, and we will take you inside the Rixos hotel.

(COMMERCIAL BREAK) VAUSE: As we have been telling you, the situation in Tripoli has becoming imperialist for a group of international reporters. They have been trapped inside the Rixos Hotel at one time it was held by Gadhafi forces who prevented the journalists from leaving. Electricity has been out and supplies are running low, they steering clear of windows in case of straight bullets.

A journalist from China's CCTV, describe the conditions inside the hotel.

(BEGIN VIDEOTAPE)

TEXT: You can see this room's window is about 100 meters from the street. You can even hear the sound of heavy gunfire outside. We have already moved the mattress to this position to provide some protection. This is virtually all the food we have left. I don't know how much longer it will last. You can see in the refrigerator that there are only a few bottles of water and drinks left.

In the hallway, the power is completely out. There's only a small light that was flickering. Because the water system is dependent on the electricity, we may experience a water shortage in the near future.

Now, let's go into the main hall. Usually there is a 24-hour security guard here, but now his post is empty. You can see over there a painting of Gadhafi.

In the last 24 hours, all of the government officials and the hotel employees have left.

This area was once full and now it is very empty. We can see there is no power in this wing of hotel. On the second floor, there is a banner that says "TV". That's where the international journalists gather.

This is the second floor where the international journalists gather. This used to be the hotel's temple. You can see some journalists now and over here they are figuring out what to do about the power outage.

(END VIDEOTAPE)

SESAY: Our thoughts are with all those journalists inside that hotel. While covering events outside the hotel has also posed some really serious risks. While reporting the rebel advance on Tripoli, Sara Sidner had to find protection from the constant celebratory gunfire.

(BEGIN VIDEO CLIP)

SARA SIDNER, CNN CORRESPONDENT: Yes. We're OK. Please don't shoot, sir. We are in between two walls so we're fine.

(END VIDEO CLIP)

SESAY: Well, violence is a risk every reporter in a war zone confronts. And it's been no different there in Libya. Our own Ben Wedeman was shot in Libya just last month. Thankfully no one was hurt.

According to the committee to protect journalists, six members of the media have been killed in Libya since 1992. Five journalists have been killed in crossfire since March of this year. One journalist was killed outside Benghazi in June of 2005.

Well, elsewhere, hurricane Irene is barreling towards the southeastern U.S. right now. Another important story we're following.

VAUSE: Yes. And Jennifer Delgado, the international weather center has been keeping a close eye on this. What's the latest, Jennifer?

JENNIFER DELGADO, AMS METEOROLOGIST: Yes. Right now it is a category one. It's located about 660 kilometers away if Nassau. And if you remember yesterday, it was a category two. And we really expected it to be a major hurricane by this time but it looks like it still could become one as we head late into Wednesday as well as into Thursday. As I show you on the satellite imagery, now we're actually seeing the center of circulation, the eye now becoming apparent on the satellite imagery. So, that is a change from yesterday that's showing some more improvement out of the storm structure of hurricane Irene.

The winds right now 148 kilometers. But notice this, as I said, those winds are going to continue to peak 176, 204, 204 as we go 72 hours out.

Now, as we go through tomorrow we're going to see it moving through parts of the Bahamas then as we head into Thursday in the Northern Bahamas. But then as we head into the weekend we're talking into Saturday, potentially a making landfall it looks like in the outer banks region of the U.S. as possibly a major hurricane. So certainly anywhere along the path of hurricane Irene everybody needs to make sure they have some type of safety plan as well as an evacuation plan.

Now, want to point out to you, updated conditions showing you where the hurricane warning is in place, anywhere in red. We're talking about our friends in the Bahamas, Turks and Caicos we are really about you because you're going to be dealing with a lot of rainfall through the next 24 to 48 hours. This model right here is going to give you an idea so you can visualize the track of hurricane Irene. As I put this into motion you can see where the Turks and Caicos is, as I said moving into northern Bahamas as we go into Thursday.

But what this is going to do? It's going to be bringing a tremendous amount of rainfall. We're talking some locations anywhere between 15 and 30 centimeters of rainfall. Let's go to the video right here to give you an idea the strength of hurricane Irene. This is just showing you what it looked like through San Juan. This is actually of a motorist driving through the heavy rain. We never recommend this.

But as I said, the rain is going to be so heavy coming through parts of Turks and Caicos. And the problem is this area is very low, unlike what we deal with Haiti as well as the Dominican Republic, a very mountainous region that leads to landslides as well as mudslides. But this is going to lead to the threat for a storm surge and widespread flooding because Nassau, Bahamas, Turks and Caicos very low area. And this is why we're going to be dealing with that severe threat for storm surge and as well as flooding through the next 24 to 48 hours.

Also want to show you how the track has been changing over the last several days. If you look at the area in yellow, that's showing you the national hurricane center's track on Sunday. As we go into orange showing you Monday and then on Tuesday. So notice all the models are now pushing it a bit more towards the east. But still because there is that uncertainty with the potential of this system to make landfall anywhere along the path, everybody needs to be paying close attention to hurricane Irene.

We'll send it back over to you, John and Isha.

VAUSE: OK. Thanks, Jennifer. A big storm and a lot to worry about.

SESAY: Yes. Indeed. The U.S. department is already issuing a travel warning for people considering travel to the Bahamas and the Turks and Caicos islands.

Now, the latest developments in the Libyan conflict are just two minutes away. I'm Isha Sesay.

VAUSE: And I'm John Vause. Please stay with CNN, the world's news leader.