http://www.livescience.com/2483-mysterious-phoenix-lights-ufo-hoax.html
thirty seconds on google makes quick work of the pheonix lights. If you want to see the supernatural, it's all around you, but skepticism makes all the ghosts and goblins disappear into thin air.
Plus, just a nit picky thing. Aliens aren't supernatural. If they exist, they would just be using natural science. It's like the joke goes, alternative medicine that works is called medicine, and confirmed instances of the supernatural is called natural.
Edit:The above link is for the 2008 pheonix lights, the 1997 one was explained shortly there after as being a set of flares dropped by military aircraft doing excercises, but you know the UFO crowd. It's government lies.
Here is a snippet from the wikipedia page. What's amazing is that this took all of two minutes to investigate all of these sightings and see if there was an alternative explanation other than "Supernatural!! Unexplainable!"
the second event was the set of nine lights appearing to "hover" over the city of Phoenix at around 10 pm. The second event has been more thoroughly covered by the media, due in part to the numerous video images taken of the lights. This was also observed by numerous people who may have thought they were seeing the same lights as those reported earlier.
The U.S. Air Force explained the second event as slow-falling, long-burning LUU-2B/B illumination flares dropped by a flight of four A-10 Warthog aircraft on a training exercise at the Barry Goldwater Range at Luke Air Force Base. According to this explanation, the flares would have been visible in Phoenix and appeared to hover due to rising heat from the burning flares creating a "balloon" effect on their parachutes, which slowed the descent. [ 19 ] The lights then appeared to wink out as they fell behind the Sierra Estrella, a mountain range to the southwest of Phoenix.
A Maryland Air National Guard pilot, Lt. Col. Ed Jones, responding to a March 2007 media query, confirmed that he had flown one of the aircraft in the formation that dropped flares on the night in question. [ 19 ] The squadron to which he belonged was in fact at Davis-Monthan AFB, Arizona on a training exercise at the time and flew training sorties to the Barry Goldwater Range on the night in question, according to the Maryland Air National Guard. A history of the Maryland Air National Guard published in 2000 asserted that the squadron, the 104th Fighter Squadron, was responsible for the incident. [ 20 ] The first reports that members of the Maryland Air National Guard were responsible for the incident were published in The Arizona Republic newspaper in July 1997. [ 21 ]
Military flares [ 22 ] [ 23 ] such as these can be seen from hundreds of miles given ideal environmental conditions. Later comparisons with known military flare drops were reported on local television stations, showing similarities between the known military flare drops and the Phoenix Lights. [ 4 ] [ 5 ] An analysis of the luminosity of LUU-2B/B illumination flares, the type which would have been in use by A-10 aircraft at the time, determined that the luminosity of such flares at a range of approximately 50–70 miles would fall well within the range of the lights viewed from Phoenix. [ 17 ]