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Kurdish Forces Push Toward Mosul Dam; Gazans Wish For Lasting Peace, Economic Development; Korean "Comfort Women's" Long Wait; Middle East Cease-Fire Talks; Israel's Military "Refusers"; Conflict in Ukraine; Turkish Elections; Iraq Security Concerns Don't Raise Oil Prices; Erbil Flights Suspended; Ramping Up in Iran; Easing Sanctions

Aired August 17, 2014 - 11:00   ET

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

BECKY ANDERSON, CNN HOST: Area assaults on the Islamic State. Western air strikes rain down on jihadist fighters in Iraq as Kurdish forces push to

retake a strategic dam.

Also ahead this hour, the morning after another violent night in Ferguson, Missouri. U.S. police fire tear gas and smoke during an overnight curfew

in the town where an unarmed black teenager was killed by police.

And a huge turnout in South Korea as Pope Francis talks straight to the country's youth. We'll have the latest on the pontiff's trip to Asia.

ANNOUNCER: Live from CNN Abu Dhabi, this is Connect the World with Becky Anderson.

ANDERSON: A very good evening from Abu Dhabi. A top Kurdish military commander tells CNN he expects his forces to take back the Mosul dam in the

next few hours.

The U.S. military war planes and Kurdish ground forces have been engaged in what has been a fierce battle to take back the strategic facility from

hundreds of ISIS militants.

Now the pesh merga say these militants placed land mines and IEDs in areas around the dam.

Well, it's Iraq's largest hydroelectric facility and if ISIS destroys it, the result will be devastating floods in Mosul and in Baghdad.

Anna Coren joins us from near Mosul with the very latest from the front lines -- Anna.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Well, Becky, as you mentioned, the commander of the pesh merga special forces is saying that his troops

should be able to take back Mosul dam in the next few hours, that's what he told me in a phone conversation a short time ago.

Now, there are a few obstacles in front of him. Obviously, the ISIS fighters have been putting up a good fight all day, but whilst they're

being retreating they have been leaving landmines scattered, littered all over the road towards Mosul dam.

Whilst we were there with the convoy of pesh merga forces, one of the trucks drove over an IED. 17 were injured, one was killed. So this is a

real problem for the pesh merga. Many of them turned around that had a long day fighting. They decided it was time to regroup, but another unit

is going in. They're going to push onwards towards Mosul dam.

But he says his forces are within 3 kilometers of the dam, which as you say is the largest hydroelectric dam in the country, provides power for Mosul

and Baghdad and it was a major blow when a pesh merga forces and the Iraqi forces for that matter lost it earlier this month.

So they're going all out in trying to recapture it -- Becky.

ANDERSON: For many of our viewers, the last time they might have heard talk of the pesh merga was back in 2003 and the U.S.-led invasion into Iraq.

Just how effective a fighting forces are they now now given that they are effectively the boots on the ground as they are supported, and possibly

will continue to be so, by U.S. forces from the air?

COREN: These are the men taking the fight to ISIS. Obviously, there were air strikes, and that is a campaign that is continuing. There were nine

U.S. airstrikes yesterday. We heard the jets flying over today. We'll hear from U.S. central command later as to what number their strikes took

place today.

However, the pesh merga, they are a fighting force. You know, they have the skills, but they don't necessarily have the equipment, Becky.

I spoke to the commander, and I asked him whether he had received any of the weaponry that the United States was meant to be sending directly to the

pesh merga. You have to remember that this is the man in charge of the special forces of the pesh merga. He said he has seen no evidence

whatsoever of any American weaponry, yet he is fighting against ISIS troops who captured the Iraqi weaponry from Mosul and other towns and cities. And

this, of course, is American weaponry, heavy weaponry, which the pesh merga just cannot -- cannot compete against.

So he said if they want the pesh merga to defeat ISIS they may need to be armed with better weapons.

ANDERSON: Anna Coren is on the ground for you. Anna, thank you for that.

Ahead on Connect the World with me Becky Anderson, a live report from Baghdad for you this hour on arming the Kurdish forces and the

effectiveness of these U.S. air strikes.

Also, we'll hear from a top Iraqi official and what the nation needs right now to survive this crisis.

And Britain's prime minister calls on Iraq's neighbors to work with the international community against the shared threat of these militants.

Well, the Israelis and Palestinians are set to resume indirect talks in Cairo. Egypt trying to negotiate a permanent agreement to end the weeks

long conflict in Gaza, but the Israeli prime minister Benjamin Netanyahu says he will not accept a deal, unless it meets his country's security

needs.

Well, right now a temporary truce is in place in Gaza. It, though, is expected to expire at midnight on Tuesday.

Well, let's get more details from Fred Pleitgen. He joins me now from Gaza City.

Fred, despite the truce will expire Monday night, or Tuesday morning, before we talk about the politics of any long-term arrangement to end more

than what has been a month of bloodshed on both sides, you're in Gaza, how are people are coping?

FRED PLEITGEN, CNN INTERNATIONAL CORREPSONDENT: Well, Becky, the people here aren't coping well at all with the situation. They say they're

absolutely fed up not only with the fact that they've obviously been under this blockade for seven years, but also the fact that they've gone through

these intermittent conflicts every two years. They say they're absolutely fed up with putting a bandage on the situation. They want something that

will give them sort of a peace, or at least some sort of ceasefire for five to 10, maybe even longer, years. And what they really want is they wants a

chance at economic development.

You know, I was out with fishermen here in Gaza just yesterday. And they were telling me their fishing zones keep changing. Right now they can only

fish a couple of yards away from the shore. They're catching more garbage than they are fish at this point in time. It's very difficult for them.

Other people have told me the same thing. People say they want an airport. People say they want a seaport. But what they want is some sort of

possibility.

There was one woman who I talked who said, you know, if all these people had jobs, then you probably wouldn't see as much militancy in Gaza. Of

course there's all part of a larger and far more complicated process here, but most people that you speak to here say they're fed up with the

situation. They want things to change. They want a future for themselves. And that's really what they're looking to when they see those ceasefire

talks that are ongoing there in Cairo.

So the situation here is one that's very dire. And of course especially very dire, because you're just coming off these hostilities that were going

on as you said for the last couple of weeks. There are a lot of people who are still trying to rebuild.

The rebuilding process is really only in the early stages. It's more cleanup than anything else at this point in time and of course put on top

of that most people here don't have any sort of materials that they would need to rebuild. You're talking about things like cement, things like

metal as well, which of course are very difficult to come by here.

So it is a very dire situation for many people here in Gaza, Becky.

ANDERSON: All right. And we're going to do more on this from Israel coming up this hour. For the time being, Fred, thank you for that.

Well, the family of a black teenager who was shot and killed by a white policeman in the American Midwest are planning to attend a rally later

today. Now that follows another violent night in Ferguson, Missouri, one man critically wounded in a shooting. It's not clear who fired the shot.

Police used smoke and tear gas to disperse the protesters who defied that new curfew. Seven people were arrested.

Some new information coming to us now. Ana Cabrera joining us live from Ferguson -- Ana.

ANA CABRERA, CNN CORREPSONDENT: HI, Becky.

We have some new information we just got in in the last few minutes, in fact, regarding the investigation in the shooting death of that unarmed

teenager Michael Brown. We have just learned that attorney general, U.S. attorney general Eric Holder has agreed to the family of Michael Brown's

request for a Justice Department autopsy, for a federal autopsy, that would be in addition to the county medical examiners autopsy in this case.

Now, we've also been told this does not mean that the federal investigation in any way is doubtful of what the medical examiner with the county has

already completed, it's just that they have been asked by this family to do this second autopsy. And they have agreed to do so.

We've also learned that the FBI had additional resources on the ground here in Ferguson over the weekend and that yesterday, in fact, they met with

several new witnesses, we're told, who had not already been interviewed by the county investigators who are also working this case.

So this instigation is moving forward and those are the two newest nuggets -- Becky.

ANDERSON: Ana, thank you for that.

Still to come this evening, from Ukraine a tale of two convoys, one on a mission of peace, the other, well, with a more threatening objective.

And as the U.S. officers support in Iraq, some are asking if Washington could go even further. But is expanding the transfer of arms really the

answer? We'll be live in Baghdad with more.

(COMMERCIAL BREAK)

ANDERSON: You're watching CNN. This is Connect the World with me Becky Anderson. Welcome back.

Pope Francis has celebrated a mass in front of huge crowd in South Korea to mark Asian youth day. The continent is seen as an area of growth for the

Catholic Church. There are more than 5.4 million Catholics in South Korea, for example, alone.

Pope Francis is the first pontiff to visit the country in 25 years. The Vatican spokesman says the pope is also looking to promote peace and

reconciliation between the North and South Korea.

Well, among those invited to the mass in Seoul, survivors of the Sewol ferry disaster and a number of Korean women who were forced into sex

slavery for Japanese troops during World War II.

Now Paula Hancocks has more on the so-called comfort women who say they are still waiting for an official apology.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Kim Bok-dong sits opposite the Japanese embassy in Seoul as she does every Wednesday. Subzero

temperatures do not keep this 87-year-old away from the protest calling for Japanese recognition that she and thousands of other Korean women were used

as sex slaves for the military before and during World War II.

Kim says, "for 20 years we have not heard from Japan. We want an apology and repentance."

For the 1,000th protest last December, the so-called comfort women unveiled a statue of a Korean girl watching the embassy, a constant reminder of

their cause.

The embassy keeps its blinds shut during the protests. Individual prime ministers have personally apologized over the years, but the NGO supporting

the comfort women says more is needed.

The director says, "this is a crime that was institutionalized by a country. They forced women into sexual slavery over a long period of time.

They need to adopt a resolution at the official level and we need to see legal reparations."

Up to 200,000 women, mostly Korean, are believed to have been used as comfort women before and during World War II when Korea was a colony of

Japan. Many have since passed away.

Tokyo maintains its legal liability for the wrongdoing was cleared by a bilateral claims treaty signed in 1965 between the two countries.

Kim disagrees. Currently living in a shelter provided by the NGO, she says she was transported to half a dozen countries over eight years by the

Japanese military from the age of 14.

She tells me, "every Sunday soldiers came to the brothel from 8:00 a.m. until 5:00 p.m., on Saturday from noon until 5:00 plus weekdays. I

couldn't stand at the end of the weekend. I was physically broken."

She says the Japanese military destroyed her life and took away her womanhood. She wants an apology before she dies.

Comfort women met with Korean foreign minister Kim Song-hwang (ph) recently, criticizing the government for not doing more to help them.

A South Korean court ruled in August that it was unconstitutional for the South Korean government not to make diplomatic efforts to try and resolve

the matter. President Lee Myung-bak has since raised the issue with the Japanese Prime Minister Yoshahiko Noda (ph), but as yet there is no

resolution on this issue, which has long haunted relations between the two neighbors.

Paula Hancocks, CNN, Seoul.

(END VIDEOTAPE)

ANDERSON: You're watching Connect the World with me, Becky Anderson. Back after this.

(COMMERCIAL BREAK)

ANDERSON: This is Connect the World with me, Becky Anderson, live from Abu Dhabi. Welcome back. It is about 20 past 7:00 here.

Returning to our top story. And U.S. planes and Kurdish ground forces battling ISIS fighters for control of what is a crucial Mosul dam in

northern Iraq. The Kurdish pesh merga, as they are known, have been using mortars and explosives to try to push the militants out, while U.S. fighter

jets and drones carried out air strikes near Mosul and Irbil.

The Obama administration has also shipped weapons, they say, directly to Kurdish forces. And, we are told, is considering ways to expand the

transfer of arms. They're talking to one of our correspondent, Anna Coren, earlier on this hour.

She said one Kurdish fighter that she has spoken to is high up in the forces there says they see no evidence of those arms arriving.

Well, these U.S. airstrikes and the question of arming the Kurds directly as we talk about it, you might be excused for getting a sense of dZj^ vu,

the issues do, after all, bare a similarity, don't they, to what was being discussed during the Libyan war just a few years ago.

So, are we about to see history repeat itself?

Well, Jomana Karadsheh is in Baghdad for you tonight with more. She's also reported extensively from Libya for CNN.

The comparison, as I suggest we would be forgiven for using, is it a good one, though, Jomana?

JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Well, Becky, if you look at it this way -- I've heard this similarity drawn by Libyans even today,

but it's looking clear. Well, it depends on what the end goal is here.

Like we saw in Libya in 2011 the air support provided by NATO, that air power that enabled them to overthrow the regime. Here, what we're seeing

over the past couple of days in that operation to try and retake the Mosul dam, what we're seeing is the U.S. air force is providing -- the air

strikes provided by the U.S., that air cover that's being provided is allowing the pesh merga to advance and to try and regain territory that it

has lost to ISIS.

In the short-term, yes, this is -- these are significant blows to ISIS when they retake these lost territories, if they do.

But the issue here, Becky, in Iraq that the solution is never a military one only, it also is a political one. The real -- to solve Iraq's

problems, as we saw in the past to try and stabilize the situation the military option was not enough alone. In 2006 and 2007, we saw a real

change here, a real shift in balance on the battleground with the predecessor of ISIS, al Qaeda in Iraq, AQI, it was when the U.S. military

put a strategy in place where it recruited the Sunni tribes, had them turn on al Qaeda, and this is where we started seeing real changes on the

battleground.

So it all lies here in Baghdad. The political process is key to trying and change this situation, to try and regain the trust of the Sunni community,

to try and bring them into the fold, to try and start shifting this battle in the field against ISIS here. You have to start on the political level.

ANDERSON: Yeah. Jomana, you make a very good point. Iraq's foreign minister saying long-term changes are needed if this country is to take on

the challenges facing it and win.

Talking politics, let's have a listen to what he said earlier on today.

(BEGIN VIDEO CLIP)

HOSHYAR ZEBARI, IRAQI FOREIGN MINISTER: The military needs to be restructured with a new military creed and loyalty to the country, not to

personalities. This we need assistance, support from our American friends. We need adviser, we need trainers, in fact to reestablish the military

structure to take on the fight.

(END VIDEO CLIP)

ANDERSON: This, the foreign minister, Jomana, talking about the fact that portfolios need to be effectively given out and the right people put in

place to get this functioning government cabinet executive and government going forward.

Writing in a British newspaper, the Prime Minister David Cameron says that he's spoken to Iraq's incoming prime minister and to shorten Britain's

support in creating an inclusive government. Jomana, he said -- or added that the international community will rally around this new government, but

Iraq's neighbors in the region are equally vital.

So we must work with countries like Saudi and Qatar, the UAE, Egypt and Turkey against these extremist forces and perhaps even with Iran, which

could choose this moment to engage with the international community against this shared threat.

When you hear the words of the outgoing foreign minister and those of the British prime minister eluding to not just the politics in Baghdad, but

those involved from the outside, your thoughts.

Jomana, can you hear me?

KARADSHEH: Yes, Becky.

ANDERSON: All right, sounds as if we've lost Jomana for the time being, which is a shame, because I know the politics of Baghdad are her beat at

the moment. And we will get more from her in the days and weeks to come, of course.

Earlier this week CNN got a dramatic firsthand look at the intensity of the situation on Iraq's Mount Sinjar where a helicopter ride to report turned

into a life saving mission. You can see the desperation of the people trapped on that mountain and watched as an aid drop becomes a rescue

mission with traumatized Iraqis swarming that helicopter. That is coming up in our special report, Flight From Terror, airing today 7:00 p.m. in

London or the times where ou are locally. I'm sure you can work those out.

The latest world news headlines just ahead. Plus, the push for a lasting ceasefire in Gaza continues. We'll get plenty of perspective on the

negotiations from Jerusalem for you. That after this.

(COMMERCIAL BREAK)

ANDERSON: Half past 7:00 here in the UAE. This is CONNECT THE WORLD with me, Becky Anderson. The top stories for you on CNN this hour.

A Kurdish military leader tells this network he's confident that his forces will take back the Mosul Dam in the next few hours. Peshmerga trying to

push hundreds of militants away from the facility. Officials worry if the dam is destroyed, it could cause massive flooding in Mosul and in Baghdad.

One man was critically wounded in a shooting overnight in the racially- divided US town of Ferguson, Missouri. It's not clear who fired the shots. Seven protesters were arrested for defying the new curfew.

Ukraine's government has recognized a Russian convoy's cargo as humanitarian aid to eastern Ukrainian cities. The Red Cross will be

coordinating a delivery as soon as the trucks are checked and it is confirmed that they are not carrying weapons intended for Russian

separatists.

Egypt is trying to negotiate a permanent cease-fire for the weeks-long conflict in Gaza. The Israeli prime minister, Benjamin Netanyahu, says he

won't accept a longterm deal unless it meets the country's security needs. Right now, a temporary truce is in place in Gaza, but it's set to expire at

midnight on Tuesday.

For more on the talks, let's get to John Vause in Jerusalem. John, I know that you've spent some time in Gaza over the past few weeks. So, this is a

story you know well from both sides. The Israeli delegation in Cairo acting with a very clear mandate, and that is to stand firmly on Israel's

security needs. This is what Netanyahu has reportedly told ministers today.

The message from the Palestinians, well it seems, hasn't changed, or certainly I can't see a change. What are you expecting to come out of

these talks?

JOHN VAUSE, CNN INTERNATIONAL CORRESPONDENT: Well, Becky, I've been speaking to both Israeli and Palestinian officials today, and there's not

a lot of optimism out there that there will, in fact, be any kind of deal on a longterm way, longterm agreement to end the fighting in Gaza.

And as you mentioned, the Israeli prime minister putting it out there very much that Israel's security needs must come first. This is what he said

just before the start of the cabinet meeting in Tel Aviv.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL (through translator): From the very first day, the Israeli delegation to Cairo has worked under very clear

instructions: to remain steadfast on Israel's security needs. Only if there's a clear response to our security needs will we then be prepared to

come to an understanding.

(END VIDEO CLIP)

VAUSE: So, from the Israeli perspective, what that actually means is that they want demilitarization of Gaza first. Now, that means Hamas giving up

their weapons, in particular getting rid of the rockets. Palestinian officials, though, say that's simply a non-starter.

(BEGIN VIDEO CLIP)

NABIL SHAATH, SENIOR PALESTINIAN OFFICIAL: No, that is not possible.

VAUSE: Why not?

SHAATH: Because Israel would not demilitarize, either. Will not even commit itself that it will never use military arms against Gaza, either.

There is no equality between the two.

(END VIDEO CLIP)

VAUSE: So, Becky, it seems both sides are dug in. We also know that the Palestinians demanding an end to the blockade, they want the airport in

Gaza to be rebuilt and reopened. They also want a sea port, the Israelis are saying not a chance. That would just mean a duty-free shop, if you

like, for missiles coming in from Iran, especially if Gaza hasn't been demilitarized.

So, we got a situation in Cairo now that these sides are dug in, and unless someone or both are willing to compromised, find some kind of common

ground, not only will there not be an end to this fighting, then there's most likely the very real possibility of a fourth major military conflict

between Israel and Hamas sometime in the future.

ANDERSON: Yes. And this truce, as we were saying, only lasting until Monday night, Tuesday morning at this point. So, there is a possibility

that things could get very tough for those living in Gaza once again.

Now, just come back. As you talk, I want to show some pictures to our viewers of what could be deemed sort of almost normal life. Pictures of

people going about their daily business. But just how are Gazans coping? And let's remember, there's something like -- what? -- 200,000 displaced at

present, i.e. not living in their homes that they used to live in because they've been bombed.

VAUSE: Yes. We have a situation where there's actually about 450,000 people who are displaced. These numbers are coming to us from the United

Nations. There's about 200,000 right now who are living in UN shelters, essentially those UN schools, which have now been turned into evacuation

centers.

And the UN estimates that about another 250,000 people have left their homes and they're staying with friends, they're living in rental

accommodation, or they're living on the streets, they're living in parking lots, under tarpaulins, essentially because their homes have either been

destroyed or badly damaged or they're too scared to live in their homes because they're worried about what may or may not happen to them.

What is interesting is that we often see scenes from Gaza City, and Gaza City, while some neighborhoods, like the Shujayya neighborhood, have been

hit hard, for the most part, it's still pretty much a functioning city.

It still gets about its daily business, people go out, they hit the streets, they go -- they can go to the markets, although during the worst

of the Israeli military offensive, most people opted to stay indoors because it was simply safer that way.

But what we saw over the last couple of weeks, though, with the Israeli military offensive winding back, just hitting more towards those targeted

airstrikes, there was a sense of normalcy, not necessarily normality, but a rhythm which returned. People actually heading out, doing their shopping,

moving about.

But of course, there is this fear, now, of how their lives will be affected should there be no deal. And the expectation isn't necessarily that the

rockets will start flying at the stroke of midnight and the Israeli military will begin bombarding Gaza again, but it could sort of end up

being this sort of low-scale war of attrition between both sides, Becky.

ANDERSON: John Vause in Jerusalem for you this evening. John, thanks for that.

Well, military service is compulsory in Israel, but some Israeli teenagers called "refusers," say they won't join for political and ethical reasons.

Nineteen-year-old Udi Segal is one of them. He's been in prison for 20 days for refusing to join up, as it were, join the military.

But the Israeli military points out that not all of the refusers are conscientious objectors, like this young chap. He is also part of a group

of 130 young Israelis who wrote to Prime Minister Netanyahu criticizing Israeli politics and policy. Saima Mohsin went to meet him when he was

released from prison for the weekend. Have a look at this.

(BEGIN VIDEOTAPE)

SAIMA MOHSIN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Parents relieved to see their youngest son, 19-year-old Udi Segal, who's taken a

political stand and gone to jail for it.

MOHSIN (on camera): How do you feel, seeing your son again?

HEVDA LIVNAT, "REFUSER'S" MOTHER: Look it, and not to see him, to see him smile.

MOHSIN (voice-over): But he's only out for the weekend and has to return. It's only then he'll be told how long he's back in for. The family lives

in a kibbutz or Jewish commune, and Udi's views formed at an early stage in a joint Arab-Jewish school.

UDI SEGAL, ISRAELI "REFUSER": I know that my step won't solve the occupation, but what I hope to do is that people will see that I'm refusing

and will think twice before they're pushing the button and killing people in Gaza.

LIVNAT: We need those people. As a mother, I ask, why my son? But OK, but we need these voices to be heard.

MOHSIN: As an Israeli citizen, he says he, too, feels occupied.

SEGAL: Because of the occupation, I live in a military society, I live in a violent society, in a chauvinistic society.

MOHSIN: Hevda, clearly a mother relieved her son is out of jail, but this mother has two other sons who do serve in the military, one in Operation

Protective Edge in Gaza.

LIVNAT: They are all my son, OK? So, yes.

MOHSIN: The Israeli military wouldn't tell CNN how many teenagers are enlisted into military service every year for, they say, security reasons.

Neither would they share the number of refusers.

Udi is clear, he doesn't support Hamas. He doesn't believe they're helping the Palestinian cause at all.

MOHSIN (on camera): What would you say to people who say you're not being patriotic, you're not respecting your country?

SEGAL: I don't want to respect my country, I don't want to be patriotic. I want to respect people, not countries.

MOHSIN (voice-over): And in the evening, time to meet his friends and other refusers, a group who call themselves the Conscientious Objectors Against

the Occupation. They wrote a letter to the prime minister explaining their refusal.

BAR LEVY, ISRAELI "REFUSER": They don't agree with what the army does, and I think that it's not -- it's immoral and it's only hurting us and the

Palestinians.

DANIEL ELSOHN, ISRAELI "REFUSER": I think the army plays a very big role on getting our society militarized and getting our society very much

concentrated around violence and around oppression. And I think it's not something I want to take part in.

DANIELLE YAOR, ISRAELI "REFUSER": As a citizen of Israel, I live because of who suffers, the Palestinians. And because of that, I chose against

occupation.

MOHSIN: Though not huge in number, their opinions and actions add to the debate inside Israel, a discourse these young Israelis hope will lead to a

more open society. Yet, the operations and conflicts continue.

Saima Mohsin, CNN, Atlit, Israel.

(END VIDEOTAPE)

ANDERSON: Separatist fighters shot down a Ukrainian air force MIG 29 fighter over eastern Ukraine on Sunday. The pilot ejecting safely, we are

told. Meanwhile, Russian convoy getting closer to being able to enter Ukraine, the government there recognizing the convoy's cargo as

humanitarian aid.

But Ukraine says it's worried about another convoy, that one containing military vehicles, including mobile rocket launchers, that Kiev says

crossed into rebel-controlled territory during the past 24 hours.

Let's get right to Will Ripley in Kiev, who has got the very latest. When you hear about MIG fighters being shot out of the sky, you realize that

this conflict continues at pace with, meantime, concerns about these convoys. What's the very latest?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, the latest is that just in less than a week, now, we've had two reports. One report, Western

journalists actually saw an armed Russian convoy of armored personnel carriers with men in uniforms crossing into rebel-controlled territory.

And then, overnight, you talked about those three Grad systems, the rocket launchers that the Ukrainian government says also crossed. And then you

have the fighter that was shot out of the sky.

Becky, can you believe, local experts here tell us it's now at least 10 planes that have been shot down since this conflict began. Of course, the

most high-profile and the extremely tragic as far as the death toll, the human toll, MH17, which really put quite a magnifying glass on this whole

thing.

But there have been other planes carrying a lot of people that were shot down. A military transport plane that had 49 people onboard was shot down,

and nobody survived. So, this is just one -- aspect of this conflict where people are dying.

Civilians continue to die in this intense fighting, and the Ukrainian government all along has claimed that these weapons and a lot of the

personnel are coming from Russia. In fact, even a rebel leader boasting on YouTube in a brand-new video that they're expecting hundreds of more

fighters who've received months of training in Russia.

And yet, Moscow consistently has denied every single claim of any convoy, anyone crossing. Just today, Vladimir Putin's spokesperson, speaking on

Russian radio and quoted by Interfax, saying once again, these reports of a convoy crossing from Russia into rebel territory in Ukraine just isn't

true.

So then, that begs the question, Becky, if the weapons and personnel aren't coming from Russia, where are they coming from?

ANDERSON: Will, for the time being, we thank you for that. The news for you directly from Kiev.

Well, the team at CONNECT THE WORLD wants to hear from you, as ever, it's your show. This is a global conversation. Join us,

facebook.com/CNNconnect. Have your say. You can always tweet me @BeckyCNN, or on Instagram as well, search for Becky and CNN. Do get in

touch @HolmesCNN, you can also get in touch with him if you want to.

I'm Becky Anderson, that was CONNECT THE WORLD, thank you for watching. MARKETPLACE MIDDLE EAST is next.

(COMMERCIAL BREAK)

JOHN DEFTERIOS, HOST: This week on MARKETPLACE MIDDLE EAST, from prime minister to president-elect.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Recep Tayyip Erdogan!

(END VIDEO CLIP)

DEFTERIOS: Recep Tayyip Erdogan secures his win. We look at what it means for this large regional player and sizable emerging market.

And trying to rebuild the auto sector in Iran. We speak to industrialist Mohammad Reza Najafi about the extension of nuclear talks and what could be

a promising consumer market there.

Welcome to MARKETPLACE MIDDLE EAST. A first in Turkey this week: Recep Tayyip Erdogan will become the first president directly elected by the

people. A few years ago, this large emerging market was growing by 9 percent a year. It's about half that level right now, with the situation

complicated by the unrest in neighboring Syria and Iraq.

(BEGIN VIDEOTAPE)

(CROWD CHEERING)

UNIDENTIFIED MALE: Recep Tayyip Erdogan!

DEFTERIOS (voice-over): Prime Minister Recep Tayyip Erdogan secured his prize, making the transition from prime minister to president-elect. But

it appears the honeymoon period in financial markets will be a short one.

The first day of trading after the election, the main Istanbul Borsa 100 index finished down nearly 2.5 percent. Ratings agency Fitch suggesting

there remain political risks in Turkey, and that the long-serving PM may overreach in his new role.

(CROWD CHANTING)

DEFTERIOS: Erdogan, during acceptance remarks, says it's time to open a new chapter.

RECEP TAYYIP ERDOGAN, PRESIDENT-ELECT OF TURKEY (through translator): Brothers, I say this from the heart, let's start a new social

reconciliation period today and let's leave the old discussions in the old Turkey. Let's leave tensions, culture of clashes, and virtual problems in

old Turkey.

DEFTERIOS: That softer tone comes after what's been a difficult 18 months in Turkey.

(CROWD CHANTING)

DEFTERIOS: He faced intense protests over development plans in central Istanbul and corruption allegations that reached to the top of the ruling

party. Before those setbacks, Mr. Erdogan represented a different face of Islam, one that could be pro-business.

The challenge now is getting growth back up to 8 to 9 percent, like it was just a few years ago. Or, as this recovery to 4 percent, after a dip down

to 2 percent, the new normal in Turkey?

BULENT ALIRIZA, DIRECTOR, CSIS TURKEY PROJECT: I think more serious questions will continue to be asked about whether the Turkish economic

miracle is going to continue. That's been a very important component of the string of victories that Mr. Erdogan has had.

DEFTERIOS: He has a plan to make Turkey a top ten economy by taking total GDP from $820 billion to $2 trillion by 2023. He wants to more than double

per capita income from just below $11,000 to $25,000 in the same time frame.

Many believe Erdogan would like to remain in office to celebrate the 100th anniversary of the Turkish Republic that will take place also in 2023 to

mark his place in history next to Mustafa Kemal Ataturk, the founder of modern Turkey.

(GUNFIRE)

DEFTERIOS: His first order of business is trying to prevent problems in neighboring Syria, and now Iraq, from defining his first chapter as

president and undermining his growth plans.

(END VIDEOTAPE)

DEFTERIOS: A very delicate situation, of course, in Turkey right now. Investors are waiting to see what happens at the end of the month when the

ruling AK Party will likely pick a successor as prime minister to Erdogan. Now, let's take a look at the other stories driving headlines in the region

this week.

(BEGIN VIDEOTAPE)

DEFTERIOS (voice-over): Despite security concerns and violence in Iraq, oil prices managed to touch a nine-month low as OPEC's second-largest producer

managed to boost exports slightly in the month of July. Most of the exports are being channeled through the south around Basra.

Abu Dhabi-based carrier Etihad joins Dubai-based Emirates and others suspending flights to Erbil in northern Iraq. However, Etihad says flights

to Baghdad and Basra will continue.

(END VIDEOTAPE)

DEFTERIOS: The Iranian government's not normally a big supporter of Western popular culture, but it's not making a big fuss about one entrepreneur

who's going against social norms. He's building skateboards in his basement and helping develop a skateboard community in Tehran along the

way. Reza Sayah has the story.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): He is skilled at the throw-down, a move that gets you on a skateboard at near-full speed.

He can do a perfect mini-ramp jump, a leap off an incline that gets you and you wheels airborne. He's smooth at grinding the rail. And he can kick-

flip with the greatest of ease.

M.J. Rahimi has mastered some of the world's most popular skateboarding tricks. But the one skill that's fast making M.J. a recognized name is

crafting skateboards inside his basement in Tehran, Iran, a country that's steadily putting itself on the map in the world of action skateboarding.

"I'm very happy I'm making skateboards," he says. "My biggest dream is to make a skateboard and have a professional skate on it."

Rahimi says his first homemade board shattered into pieces, but he kept at it. When the sport started picking up popularity in Iran several years

ago, demand for affordable equipment picked up, too.

M.J. starts by gluing together thin layers of maple wood, then presses them into sloped boards, and carves and sands them into shape. "When I first

started, my dad said it'll never work. But now he supports me," he says.

M.J. plans to create an affordable brand and sell his boards at a growing number of skate shops in the Islamic republic, where trendy teenagers shop

for gear to the tune of the latest techno beats.

ALI REZA ANSARI, T-SIXTY SKATE SHOP: We are doing our best to improve skateboarding here, and we have really good skaters here.

SAYAH (on camera): Ever since the 1979 Islamic revolution, the leadership here in Iran has been very wary about the spread and influence of Western

culture. Rock n' roll music, for example, is banned. So is dancing in public. But when it comes to skateboarding, not only does the government

seem fine with it, in many ways, they're actually supporting it.

The government has authorized six skate parks in the capital Tehran alone, and others in Ahvaz, Isfahan, Shiraz, Tabriz, and even the holy city of

Qom. Perfect arenas for Iran's growing skateboard community to ride M.J.'s skateboards, made in a basement in the Islamic Republic of Iran.

(END VIDEOTAPE)

DEFTERIOS: The skateboard industry's not the only thing ramping up in Iran. Years of crippling sanctions nearly killed off the auto sector, but ongoing

nuclear talks are helping ease restrictions. Up next on MARKETPLACE MIDDLE EAST, we'll speak to auto magnate Mohammad Reza Najafi when we return.

(COMMERCIAL BREAK)

DEFTERIOS: Welcome back to MARKETPLACE MIDDLE EAST. Mohammad Reza Najafi made his name in the Iranian auto sector, but he's watched that industry,

along with the economy of over 76 million people hit hard by Western- imposed sanctions.

Those sanctions have eased a bit with the ongoing talks between the P5 plus 1 and Iran. Najafi spoke to our Reza Sayah about the influence of those

negotiations on the Iranian economy and his sector.

(BEGIN VIDEOTAPE)

SAYAH (voice-over): Twenty-six years ago, Mohammad Reza Najafi started manufacturing auto parts in Iran. Today, he's an industry leader,

supplying roughly 3 million springs and 1 million brake pads every year to Iranian auto makers.

Najafi's success has made him a leading voice in Iran's efforts to reenergize its struggling economy and earned him seats on Tehran's Chamber

of Commerce and the Board of Directors of the Iranian Auto Parts Manufacturers Association. Like many business leaders, Najafi watched with

great interest the recent nuclear negotiations between Iran and the world powers.

SAYAH (on camera): What was your reaction when they couldn't reach a deal?

MOHAMMAD REZA NAJAFI, IRANIAN AUTO PARTS MANUFACTURERS ASSOCIATION: As a matter of fact, it was a deal. But naturally, it takes more time and we

are happy that it is continuing.

SAYAH: Would you agree that Iran's economy is not going to improve unless the sanctions are lifted?

NAJAFI: Oh, it's a very difficult question to answer, really, because at the same time, during the sanction time, we tried to find our own way to

improve ourselves and so on. But we are interested to collaborate with them, so it is an obstacle, it should be closely removed.

SAYAH: Tell me about Iran's economy today. Where does it stand?

NAJAFI: These three months of the year, the first quarter of the year of Iranian year, the trade -- international trade from 18.5 billion has

increased to 24.5 billion.

SAYAH: It's increased?

NAJAFI: Increased. And we hope after removing the sanctions, then we'll have at least 6 percent growth in the economy of the country and at least

10 percent growth in the industry.

SAYAH: Iran is still dependent on oil exports. That's been almost halved because of the sanctions. And then we have the banking sanctions.

NAJAFI: Yes.

SAYAH: How can Iran's economy thrive if they're cut off from the banking system?

NAJAFI: So, the banking system is one of the main points that we hope that is removed very soon. Of course, we have found our own way. But the best

way is that road to go through the normal way, which costs much lower and it is more normal.

SAYAH: Do you sense that over this past year, when relations have thawed with the West, that investors and businessmen and women, they want to come

to Iran and invest?

NAJAFI: Exactly. Exactly. After and even before this, we see a lot of delegations coming from all over the world. All of them, we are ready, we

are interested, we are eager to come here for partnering here with us.

SAYAH: Iran's position is they've made enough concessions, that their nuclear program is open for inspections. Even so, a deal wasn't struck.

Why are you optimistic that eventually a deal will happen?

NAJAFI: For sure it will happen. Why? Because we are a peaceful people, and we have a capable country. We have more than 4 million students at

university. We have the natural resources, and we are ready, we are open for collaboration with the world, and we hope that with collaboration,

everybody will have their interest out of it, and it will be a win-win play.

(END VIDEOTAPE)

DEFTERIOS: For more about the program, visit our website, cnn.com/mme. You can reach out, of course, and comment about the program on our Facebook

page as well.

And that's all for this edition of CNN MARKETPLACE MIDDLE EAST. I'm John Defterios, thanks for watching. We'll see you next week.

(COMMERCIAL BREAK)

END