  We report the first observation of exclusive $\rho$ production in
ultra-peripheral collisions at RHIC. The $\rho$ are produced
electromagnetically at large impact parameters where no hadronic interactions
occur. The produced $\rho$ have a small perpendicular momentum, consistent with
production that is coherent on both the photon emitting and scattering nuclei.
We observe both exclusive $\rho$ production, and $\rho$ production accompanied
by electromagnetic dissociation of both nuclei. We discuss models of vector
meson production and the correlation with nuclear breakup. We also observe
$e^+e^-$ pair production in these ultra-peripheral collisions.
