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THE SITUATION ROOM

White House Reaction to the Violence in the Middle East. War of Words Between Carter and Bush.

Aired May 21, 2007 - 16:00   ET

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


WOLF BLITZER, HOST:. Happening now, the Middle East exploding with new violence. Lebanese troops and Islamic militants continuing a bloody battle this hour. we'll get reaction from the White House and diplomatic pressure on President Bush.
Also, presidential campaign shakeups -- Florida officially throwing the primary calendar into chaos. And Iowa upsetting the candidates' pecking order. We're waiting those stories. And as gas prices keep rising, are oil companies gouging consumers?

I'll ask California's attorney general, Jerry Brown, what's driving fuel costs higher and higher.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, we're monitoring fierce fighting between Lebanese troops and Islamic militants in northern Lebanon. Just moments ago an explosion was heard in Beirut, now near Tripoli. Hundreds of Lebanese soldiers have surrounded a Palestinian refugee camp. They're pounding militant positions with tanks and artillery. The militants are firing back with mortars, automatic weapons and small arms. Dozens of people are believed to have been killed, many, many more wounded. It's thought to be the largest standoff between Lebanon's Western-backed government and militants since the country's civil war way back in the '80s and '90s.

Let's get some reaction to what is unfolding.

We'll go to our White House correspondent, Ed Henry -- Ed, it's looking very, very ugly.

The pictures have been so dramatic in Lebanon and all that unfolding as the situation in Gaza, along the border with Israel, clearly deteriorates, as well.

What is the White House saying?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, at his Texas ranch this past weekend, the president was hosting the secretary-general of NATO, Jaap de Hoop Scheffer. They had a very hefty agenda with Afghanistan. That war, obviously, at the top of the list.

But suddenly the president had to get -- and closely monitor the situation on the ground in Lebanon. And there was a plea today from the White House for all sides to step back and calm down. The White House spokesman, Tony Fratto, telling reporters: "We're concerned about the violence taking place there and the civilian casualties. We believe the party should take a step back from violence. We are firm believers in Lebanon's democracy and sovereignty, and support Prime Minister Siniora's efforts to deal with fighting in the country."

Now, many times before we've heard the president say that the U.S. and its allies need to stand behind this fledgling democracy in Lebanon. That obviously more true than ever, given all the setbacks with the war in Iraq, the tumult with Iran. Obviously, it goes without saying, the last thing the U.S. wants is more instability in the Mideast -- Wolf.

BLITZER: Ed, stand by for a moment.

We're going to be coming right back to you.

As a lot of our viewers know, President Bush today brushed off some harsh criticism of his foreign policy from the former president, Jimmy Carter. And for his part, Jimmy Carter is trying today to clarify some of those controversial remarks he made.

Jimmy Carter right now in Louisiana.

CNN's Susan Roesgen is in New Orleans -- Susan?

SUSAN ROESGEN, GULF COAST CORRESPONDENT: Wolf, former president Carter can swing a hammer and hit the Bush administration where it hurts. He's here to build the 1000th Habitat for Humanity house along the Gulf Coast since hurricane Katrina.

But over the weekend, he criticized the Bush administration's foreign policy. Today I asked him about that and he clarified his comments.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: The situation in Iraq and, also, because we had no effort made so far in more than six years to have peace in the Middle East. And that was the essence of it. But it interpreted -- and I was probably careless in what I said -- as -- as, you know, comparing President Bush's administration with all other administrations, which I didn't -- didn't do.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: I understand some people are, you know, may not agree with the decisions I made. But what the American people need to know, I'm making them based upon what's best for this country.

(END VIDEO CLIP)

ROESGEN: Initially, the reaction from the White House was that President Carter is irrelevant. Today president Carter said, "I'll take that."

He said, "I am not relevant in politics," he said, but he said, "I am relevant when it comes to driving nails, building houses for Habitat for Humanity" -- Wolf.

BLITZER: All right, Susan, thanks very much.

And we're getting some video right now, very disturbing video coming in from Beirut. We want to show our viewers what's just coming in to THE SITUATION ROOM right now.

Earlier, there were explosions and fighting in the northern part of Lebanon in Tripoli. But now, in the capital, in Beirut, you're seeing these pictures. And they're just coming into THE SITUATION ROOM.

A part of the Lebanese capital clearly attacked only a little while ago. The fighting in Lebanon obviously escalating right now, and some analysts suggesting this is the worst it's been within various Lebanese factions for some at least 20 years or so.

Lebanon right now deeply, deeply engulfed not only in flames, but in the tension within this Palestinian refugee camp in the north. Lebanese soldiers trying to go in there and clear it up. There are fears that Al Qaeda related groups are involved there. But it's obviously a deteriorating situation. And we're going to keep monitoring these pictures and stay on top of this situation in Lebanon.

Later, also, we're going to go to Gaza and see what's going on there. More Palestinian rockets landing in a nearby Israeli town today. The Israelis are retaliating. That situation, obviously, getting worse, as well.

There's a political firestorm closer to home here in President Bush's own backyard. That would be the growing calls for the attorney general, Alberto Gonzales, to step down coming from Republicans, as well as Democrats. Mr. Bush offered a fresh defense of his old friend today.

Let's go back to our White House correspondent, Ed Henry -- Ed, update our viewers.

What happened?

HENRY: Well, Wolf, the president is not giving an inch. A key Republican yesterday, Arlen Specter, predicted that perhaps the attorney general would step down before further Republican rebuke.

But I can tell you, that prediction now seems outdated.

(BEGIN VIDEO TAPE)

HENRY (voice-over): Like the cactus on his Texas ranch, the president is dug in and carrying water for his embattled attorney general, Alberto Gonzales. BUSH: He has got my confidence. He has done nothing wrong. There's been enormous amount of attention on him, that there has been no wrongdoing on his part. And I, frankly, view what's taking place in Washington today as pure political theater.

HENRY: That's a shot at the latest Democratic maneuver against Gonzales -- votes of no confidence in both chambers of Congress because of Gonzales' handling of the firing of eight U.S. attorneys and new allegations the target list was longer than the Bush administration let on, as well as dramatic testimony alleging Gonzales went to the hospital room of an ailing John Ashcroft to convince him to sign off on the warrantless wiretapping program.

JAMES COMEY, FORMER DEPUTY ATTORNEY GENERAL: I thought I just witnessed an effort to take advantage of a very sick man.

HENRY: That seems to contradict Gonzales' claim to senators last year that there was never any serious disagreement over the surveillance program.

SEN. CARL LEVIN (D), MICHIGAN: We should have been gone a long time ago. If there is such a resolution of no confidence, I am surely going to vote for it. I think a number of Republicans will.

HENRY: Six Republican senators have gone further, outright calling for Gonzales to resign. But the no confidence vote is nonbinding and the president, the decider on personnel matters, isn't giving in.

BUSH: I stand by Al Gonzales and I would hope that people would be more sober in how they address these important issues. And they ought to get the job done of passing legislation, as opposed to figuring out how to be actors on the political theater stage.

(END VIDEO TAPE)

HENRY: Now, the question is why does the president keep digging in further and further?

The answer, for one, is the fact that al Gonzales is a close friend. The president is loyal and he has a shrinking inner circle right now. And, secondly, Alberto Gonzales' deputy, Paul McNulty has already stepped down. In the words of one top official here, that's given some breathing space, if you will, to Gonzales, because the White House right now cannot deal with two messy confirmation battles in the Senate -- Wolf.

BLITZER: Ed Henry reporting for us.

We'll stay on top of this story.

Let's go to New York.

Jack Cafferty is standing by with The Cafferty File -- Jack, how are you doing?

JACK CAFFERTY, CNN CORRESPONDENT: An interesting choice of words by the president there.

BLITZER: Explain what you mean by that -- Jack.

CAFFERTY: Just -- I was listening to the sound bite and I found the president's choice of words to be interesting.

BLITZER: All right.

CAFFERTY: Apparently, there is a problem in Pakistan. Al Qaeda funding and operatives are apparently flowing into those tribal territories in Pakistan along the Afghan border. This intelligence is our own -- a major CIA push last year to try to hunt down Osama bin Laden there. And according to U.S. officials, huge amounts of money are flowing to Al Qaeda, as well. And it's coming from various criminal enterprises operating inside Iraq.

The Bush administration's been paying Pakistan to fight terror for a long time -- and paying handsomely -- about a billion dollars a year to reimburse the Pakistani military for its counterterrorism efforts. So far, Pakistan has collected $5.6 billion American over the last five years. That would be your money and mine.

The problem is Pakistan's president, Pervez Musharraf, has actually cut back on the number of troops who are patrolling in these areas where Al Qaeda is most active. And not by a little -- by tens of thousands of troops. Of course, he's still happy to collect a check every month from the United States.

When asked about this disconnect, for want of a better word, in their relationship, the Bush administration continues to stress the importance of Pakistan's cooperation in the war on terror.

Sort of like they continue to stress the character and honesty and forthrightness of the nation's attorney general. Same idea.

Here's the question -- is the United States making a mistake by continuing its current relationship with Pakistan?

E-mail your thoughts on that to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Wolf, I was off last Friday.

I went to New Orleans. I attended the graduation ceremonies at Tulane University, where my youngest daughter, Leigh Cafferty, received her degree in English. I've got to tell you, New Orleans' jazz musicians, including Wynton Marsalis' father performed. Brian Williams gave the commencement from over there at NBC Nightly News. New Orleans, a great town. Tulane, great university. Terrific commencement. We had a nice time.

BLITZER: Excellent.

Congratulations to your daughter.

Congratulations to the whole family.

Now she can go out and get a job, is that right? CAFFERTY: We're hoping.

(LAUGHTER)

BLITZER: I know the feeling, Jack.

Thanks very much.

CAFFERTY: All right.

BLITZER: Coming up, we're going to have more on the breaking news that's unfolding in Lebanon right now. An explosion has just been heard in the capital of Beirut. We're going to update you on what's going on. Clearly, a deteriorating situation with enormous ramifications for the entire region.

Also, skyrocketing gas prices and hazardous emissions.

Are public officials doing enough?

What about the price of gasoline?

The California attorney general, Jerry Brown, he's standing by live right here in THE SITUATION ROOM.

Plus, anger and experience on the campaign trail -- Republican John McCain gets into a salty shouting match. And Democrat Bill Richardson formally jumps into the race, waving his resume.

And Mitt Romney gets a leg up in Iowa.

Will it eventually give him a critical primary season bounce?

Paul Begala and J.C. Watts -- they're standing by for our Strategy Session.

Lots of news unfolding today right here in THE SITUATION ROOM.

COMMERCIAL

BLITZER: We're monitoring the breaking news out of Lebanon.

A new explosion in Beirut reported only moments ago amid fierce fighting between Lebanese troops and Islamic militants.

CNN's Brent Sadler, our bureau chief in Beirut.

He's joining us on the phone right now.

He's in New York watching all of this -- Brent, give our viewers a little sense of what's going on, because this explosion and the video we're seeing in Beirut is obviously devastating.

BRENT SADLER, SENIOR INTERNATIONAL CORRESPONDENT: That's right, Wolf. Let me set the scene. This is the Bradan (ph) shopping area, we understand from the pictures that we've just got in. They're showing a building on fire, a car that was badly damaged set ablaze and reports, obviously, of casualties as a result of this blast.

The Bradan (ph) shopping area is not only well known for upscale customers who go to shop there, it's multi-religious. There's a hotel there. There's a movie theater complex. It is a place where large numbers of Lebanese come and go.

Local time there, it was about 11:00 when this bomb went off, so it would have been at the end of the day. But, still, people moving around in that area at that time of night.

This blast the second in 24 hours, Wolf, as, meantime, that attack by the Lebanese Army goes against extremist terrorists in that north Lebanese Palestinian refugee camp. This is Beirut itself, the second bomb blast in 24 hours -- Wolf.

BLITZER: All right, Brent, we're going to have you stand by, because I'm going to get back to this story.

Clearly an awful situation unfolding in Lebanon right now.

We're going to stay on top of this.

Brent will be back.

We'll move on to some other news we're watching closer to home.

The average price of regular gasoline now at a record high, $3.18 a gallon. That's up $0.11 over the past two weeks.

As fuel costs rise, many politicians are pouncing.

Senator Maria Cantwell is sponsoring a bill that would make gas price gouging a federal crime. The Washington State Democrat was pressed about the measure on CNN's American morning.

(BEGIN VIDEO CLIP FROM "AMERICAN MORNING")

JOHN ROBERTS, CO-HOST, "AMERICAN MORNING": You ducked the question.

Do you think there's price gouging going on?

SEN. MARIA CANTWELL (D), WASHINGTON:

Oh, I think we've seen, in the state of Washington -- last year Spokane had the highest gas prices in the nation. And the FTC did a preliminary investigation and showed that there were anomalies.

We have other instances where we think that maybe supply and demand isn't just about supply and demand -- it might be about the artificial supply and demand.

So this is something very familiar to us on the West Coast, because we pay the highest gas prices.

(END VIDEO CLIP)

BLITZER: Maria Cantwell, the senator from Washington State, speaking with our own John Roberts on American morning.

Let's bring in the California attorney general, Jerry Brown.

He's waging his own campaign against automakers over greenhouse gas emissions. He has looked into these allegations of price gouging.

Attorney General, thanks very much for joining us.

Is there evidence the oil companies or other elements out there right now are gouging American consumers?

JERRY BROWN, CALIFORNIA ATTORNEY GENERAL: Well, there's no evidence that the attorney general has -- and not my predecessor, who looked into it repeatedly. It may be true. We know we got gouged in the electricity crisis. People gamed (ph) the season...

BLITZER: Enron and all of that.

BROWN: Enron, and even regular gas and electric companies -- utilities. They did gouge us, no question. And we're involved in multibillion-dollar lawsuits trying to recover.

But the problem with this gas is it depends on oil. And oil -- if you measure by carbon content, which is what you should do -- we're importing 68 percent -- Nigeria, Venezuela, Iraq, Iran. That whole Middle East is a threat to our continued supply of gasoline.

So, look, we'll keep looking. But I think people can expect, if isn't next month or the month after, over the next several years, gasoline prices are going up. And that's why it's so criminal for President Bush to do nothing about fuel efficiency and for the (UNINTELLIGIBLE) companies to keep fighting it.

BLITZER: Well, you're here testifying on this -- this whole issue.

What's your bottom line point right now?

What should the federal government be doing?

And you're speaking as the attorney general of California, where, arguably, gasoline is the highest in the nation.

BROWN: Well, very simple. Bush should ask the EPA -- give California permission to impose its own vehicle standards, its own emissions standards.

BLITZER: To make the cars more fuel efficient?

BROWN: Well, to reduce global emissions, and that will -- the carmakers will have to then make them more efficient, burn less gasoline. And that can be done. California has had a regulation that we've proposed for over two years. We're ready to do it...

BLITZER: But you want to have one set of standards for California for cars, another set of standards in neighboring states.

That would make life difficult for cars moving back and forth, wouldn't it?

BROWN: No, not really. At the time of Nixon as president, Reagan as governor of California, it was agreed to by the Congress to let California chart its own separate way in terms of emissions from automobiles -- much stricter. And we've gotten 50 waivers in that period of time. We want the same thing now.

Bush has had this -- or, rather, the EPA has had it since December of '05, the request. And if that request is granted -- it could be granted tomorrow, it could be granted in a month -- then California will impose its regulation. Eleven other states -- Connecticut, Washington, Rhode Island, Vermont and New York...

BLITZER: But you'd be happier if the federal government just did it and it wouldn't require the states to impose their own regulations.

BROWN: Yes. Well, I'd love them to do it. But the history, under the Clean Air Act, is they haven't done it. And in terms of the fuel efficiency standards, which is another law, they -- they haven't done anything since 1985.

It's pathetic and it's dangerous because we basically mortgage the stability of our country, plus the stability of families and their budgets, on these unstable areas of the world that, you know, just the neighborhood we're looking at now.

BLITZER: And it is...

BROWN: It's not smart.

BLITZER: And it looks like it's going to be even more unstable, at least in the short-term, based on what's happening on the ground.

BROWN: And if this oil supply were ever interrupted for a few weeks, this entire economy would go in a tailspin. And that's the risk that is being run by the refusal to make greater efficiencies and greater alternative energy available.

BLITZER: The attorney general of California, Jerry Brown.

Thanks for coming in.

BROWN: OK.

Thank you.

BLITZER: Still ahead, we're going to get an update on what's happening in Beirut right now. We'll talk to someone who is there on the scene. You're looking at these pictures coming in from the Lebanese capital, where a huge explosion has just rocked an upscale area. We're watching the story very closely.

Also, the controversial immigration reform bill -- it's facing a key test in the Senate right now. We're going to give you an update on its progress or lack of there.

And later, Bill Richardson -- is he running or not running?

Well, we know he's running. We'll tell you why. He's going to be here in THE SITUATION ROOM.

We'll be right back.

COMMERCIAL

BLITZER: Nic Robertson is now in Beirut.

I want to go to him right away.

There's a breaking story happening in the Lebanese capital right now -- Nic Robertson, you're there in Beirut, where this huge explosion has just rocked this one neighborhood.

Tell us what you are seeing and hearing.

NIC ROBERTSON, CNN CORRESPONDENT: Well, Wolf, we arrived on the scene of the blast about 20 minutes ago. It's a chaotic scene. The Lebanese Army has been rushing into the area. A judge -- a senior judge, a police inspector, has just arrived to look at the scene.

We went right down where the bomb blast took place. It appears to have been a car bomb driven at the base of what appears to be an apartment building, an apartment, residential and commercial building.

It has blown all the windows out of that building, the building next to it, the building next to it, the building across the street. There's broken glass as far as 100 yards away, debris strewn through the streets.

And as we were down on the scene, firemen were trying to put out a blaze in one of the apartments. Ambulances were pulling up. At least several we saw being taken away in ambulances. Impossible to say, from where I stood, the condition of those people being taken away.

But looking at the damage, one, two, three, four, five, six floors of the apartment building absolutely shredded. The front of those buildings -- anyone sitting in the front rooms could have been badly damage and -- or badly wounded, potentially, in at least three buildings.

The army has taken control of the situation here now. Several hundred Lebanese Army soldiers are on the scene. But it is still chaotic. It is still emotional. It's very tense at the moment for the people living here -- Wolf.

BLITZER: And it's evening there.

Approaching, what, midnight in Beirut, Nic?

ROBERTSON: Wolf, it's just a little after 10:00 p.m. The blast went off at about, perhaps, five to 10, five of 10 this evening. The area was quickly moved into and secured by the Lebanese Army. There have been young people rushing in to take a look; a lot of photographers here, as well.

But this is the second blast in two days in Lebanon. I can see firemen on an extended ladder now being pushed up toward the blaze on one of the upper floors in the apartment building that bore the brunt of the blast. They're bringing him closer to that blaze.

From what we can see, Wolf, a car bomb -- it looked like a large car bomb driven as close as it could get to the steps at the front of the apartment building -- Wolf.

BLITZER: And god only knows how many casualties in that apartment building or nearby.

All right, Nic, standby.

We're going to stay on top of this story.

A huge explosion rocking the Lebanese capital of Beirut, as fighting continues in the northerner part of the country, as well. Much more on that story coming up.

Also, coming up, the race for the Republican nomination -- we've got some new poll results from a key battleground state. You may be surprised who is in the lead right now.

Also, making it matter -- one large state is moving its primary in order to have more influence. We're going to tell you all about that and the chain reaction it's likely to set off.

Stay with us.

You're in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Happening now, the hunt for bin Laden.

Is a billion dollars per year in aid to Pakistan's President Musharraf helping to get America any closer to the Al Qaeda leader?

We're waiting this story.

Also, in the next hour, former presidents generally hold back when it comes to harshly criticizing sitting presidents. But that unwritten rule now being ignored. We're going to find out what Jimmy Carter is saying about President Bush today.

And crisis in Lebanon -- as troops battle militants, is that country's government tottering on the brink?

Former defense secretary, CNN world affairs analyst, William Cohen, he's here in THE SITUATION ROOM.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

New Mexico Governor Bill Richardson is vowing today to repair the ravages of the Bush administration if he's elected president. The Democrat let loose during his formal campaign announcement. Richardson says he's no rock star, but he does have a heck of a resume.

Let's bring in our senior political correspondent, Candy Crowley. I guess we saw a little bit of the tough side of bill Richardson today.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: We did. He went directly at the Bush administration.

What's also interesting about this announcement is, here's the man from Santa Fe announcing his presidency in Los Angeles. It's all a part of the greater strategy.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): With a smile on his face and friends at his back, Bill Richardson officially launched his campaign with a stinging broadside.

GOV. BILL RICHARDSON (D-NM), PRESIDENTIAL CANDIDATE: Whether it will be willful ignorance or an ignorant will, we are left with the ravages of an administration that will take years to rectify.

CROWLEY: The governor of New Mexico made his announcement in California, home to millions of votes and an exploding population of politically active Hispanics.

RICHARDSON: En Espanol or en Ingles? En Ingles? OK. (SPEAKING FRENCH)

(LAUGHTER)

CROWLEY: Trilingual, he is the son of a Mexican mother and an American father. Richardson was largely raised in Mexico, but was born in California, because his father insisted.

RICHARDSON: I didn't spend much time here. In fact, it was about eight hours, because I went right back. But now there's a California primary, so I'm -- I'm trying to improve on those roots.

CROWLEY: It is classic Richardson, a loosey-goosey campaigner who describes himself as an imperfect guy, a normal person. He thinks voters will relate.

But do not mistake him for ordinary. He has what is arguably, perhaps indisputably, the best resume in the race: congressman for 14 years, ambassador to the U.N., secretary of energy, governor of New Mexico, reelected with 69 percent of the vote, and diplomatic troubleshooter in North Korea, Sudan, Iraq, helping to negotiate the release of hostages.

He thinks he is right for the times, for this war, for this world.

RICHARDSON: The key is diplomacy. The key -- the key is bringing people together. The key is not doing things alone, as we have before. The key is mediation.

CROWLEY: He is an Energizer Bunny type, known more for pragmatism than vision. His announcement speech was largely devoid of flourishes and heavy on problem-solving.

RICHARDSON: We have to recognize that no fence ever built has stopped history. And a border fence won't either. If you build a 10- foot fence...

(APPLAUSE)

RICHARDSON: ... someone will use an 11-foot ladder.

CROWLEY: He runs a shoestring campaign, and raised $6 million this first quarter, impressive for a non-household name, but a figure that pales in comparison to Barack Obama's $25.7 million.

Along the campaign trail, Richardson repeatedly announces his non-rock-star status. He struggles to find national limelight, but still believes time and resume are on his side.

RICHARDSON: Keep an eye on me and keep your powder dry. I'm going to be around a lot.

(END VIDEOTAPE)

CROWLEY: Spinning off his diplomatic and energy credentials, Richardson's signature issues are a foreign policy aimed at international cooperation and energy independence.

He is currently registering, by the way -- and his campaign put this out -- 10 percent in the Iowa polls. That's double the last time they took a look.

BLITZER: So, quickly, the reason he made the announcement in California, as opposed to New Mexico or someplace else?

CROWLEY: Because there are voters there. He's a Latino. It has a heavy Latino population. And because, as you know, there's a February 5 primary in California. He hopes to win the state.

BLITZER: Pretty good reasons for him.

Thank you, Candy, very much.

And coming up in our next hour: my interview with the governor, Bill Richardson, right here in THE SITUATION ROOM.

It's one of the holy grails of presidential politics, the search for the famous Iowa bounce. There are some eye-popping new poll numbers from the lead-off caucus state.

Let's go to our senior political analyst, Bill Schneider.

Bill, what are we learning from these latest poll numbers in Iowa?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, you know, the Bible says, the last shall be first. But, in Iowa, it appears, the third shall be first.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Five national polls of Republican voters this month show Rudy Giuliani with a narrow lead for the Republican nomination. The average? Giuliani 26 percent, John McCain 22 percent, with Mitt Romney third at 9 percent.

National polls help raise money and get press attention. But there is no national primary. The first state where Republicans actually vote is Iowa. Iowa could turn those national polls upside down overnight. Look what happened to Howard Dean and John Kerry after Iowa Democrats voted in 2004.

"The Des Moines Register" polled Republican caucus participants in Iowa last week. Romney vaults from third place in the national polls to first in Iowa. Romney won the first-quarter fund-raising race, and he's using his money to build a network of supporters in Iowa, and running a TV ad targeting conservatives, who dominate the Iowa Republican caucuses.

(BEGIN VIDEO CLIP, ROMNEY FOR PRESIDENT, INC. AD)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Legal immigration is great, but illegal immigration, that, we have got to end. Thank you. And -- and amnesty is not the way to do it.

(END VIDEO CLIP)

SCHNEIDER: A Research 2000 poll of Iowa Republicans also taken last week has McCain, Giuliani and Romney bunched together for first place. McCain and Giuliani do the same in both Iowa polls.

Why does Romney's support fall by nearly half in the Research 2000 poll? That poll includes two potential Republican candidates, Fred Thompson and Newt Gingrich, who, together, get 15 percent of the vote, just about what Romney loses.

Romney seems to be making headway with conservatives in Iowa.

ROMNEY: Some people have said we ought to close Guantanamo. My view is, we ought to double Guantanamo.

SCHNEIDER: Thompson or Gingrich could challenge Romney for Iowa conservatives. But, right now, they're not running.

(END VIDEOTAPE) SCHNEIDER: If Romney wins Iowa, that could vault him to victory a week later in New Hampshire, just as John Kerry's Iowa victory did in 2004.

Romney, like Kerry, is well known in New Hampshire. He's from next-door Massachusetts. Then the national polls will do what they always do in presidential primaries. They will follow the results in the early voting states -- Wolf.

BLITZER: Bill Schneider with those numbers -- thank you, Bill.

Coming up: conservative draft? Two candidates who aren't even running have just won a new straw poll in Georgia.

And narrowing the search -- U.S. soldiers in Iraq focusing in their -- on their search for those three missing American soldiers.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The race to replace President Bush got a little bit more complicated today. That's because the Florida governor, Charlie Crist, signed a bill moving his state's presidential primary up to January 29. As the calendar now stands, that puts Florida right behind only three states, Iowa, Nevada, and New Hampshire. South Carolina Democrats are scheduled to hold their primary on the same day as Florida.

(BEGIN VIDEO CLIP)

GOV. CHARLIE CRIST (R), FLORIDA: Well, we may not be first, but we're at the forefront. And shouldn't Florida be at the forefront? We're a mega-state. We will be the first mega-state to weigh in on the next leader of the free world.

(END VIDEO CLIP)

BLITZER: Let's bring in our chief national correspondent, John King.

How does Florida's move affect the overall race?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, what it does now, Wolf, is, it accelerates the front-loading, as they call it, moving states up as early as possible in the year.

But you had the emphasis just right. Florida is the latest state to move up on the calendar. But it won't be the last.

(BEGIN VIDEOTAPE)

KING (voice-over): A 2008 primary season that had an unprecedented early calendar to begin with now has a remote chance of seeing the first votes actually cast this year. KATON DAWSON, SOUTH CAROLINA REPUBLICAN PARTY CHAIRMAN: It's -- it's possible. You know, I can't control what New Hampshire or Iowa do. I mean, certainly, they are good partners with South Carolina in this process.

KING: Those three early states are fiercely protective of their nominating roles. And, as a result, an election calendar already front-loaded with early contests is in flux again.

Until this week, it was penciled in this way: the Iowa caucuses January 14, followed by Nevada five days later, and the New Hampshire presidential primary January 22. South Carolina planned its Democratic primary January 29, and its Republican primary February 2.

But Florida's move rips that version up. Florida set its primary for January 29. And the domino effect is already in the works, because South Carolina insists on being first in the South.

DAWSON: We are a very proud, maverick-type state. And we will do whatever it takes to retain our position in presidential politics.

KING: Assuming South Carolina moves up, New Hampshire will be required by state law to move. January 8 is a strong possibility, which will impact Nevada and perhaps land the Iowa caucuses at about 10 shopping days left until Christmas, Christmas 2007.

KATHLEEN SULLIVAN, FORMER NEW HAMPSHIRE DEMOCRATIC PARTY CHAIRWOMAN: There is still so much uncertainty with this calendar, that it's not good for the candidates either. They don't know where to focus.

KING: The irony is that the biggest day on the 2008 calendar could have little impact. February 5 will feature nominating contests in at least 10 and as many as 25 states, including California, New Jersey, Missouri, and New Mexico. But history shows early wins and momentum matter most. And activists in both parties predict most of the candidates will be broke by South Carolina.

SULLIVAN: So, it's going to be over. And, so, you're going to have people in 46 other states, plus the District of Columbia, who are going to be sitting there, saying, what happened? Why does our vote not matter?

(END VIDEOTAPE)

KING: Now, both the Democratic and the Republican parties saying they can penalize Florida, take away some of its convention delegates, if it sticks with this plan. The governor says, he doesn't care, Wolf. He thinks the state will deserve and benefit from all the attention of the candidates coming.

The candidates can also be penalized. The parties can say, you can't have some of the delegates from Florida if you campaign there.

Guess what? They are ignoring it, too, campaigning there, because it's such a big state, not only in the primary season, but in the general election as well.

BLITZER: This is going to be a huge, huge political fight. We will watch it together with you, John. Thanks...

KING: Thank you.

BLITZER: ... very much.

And still ahead here in THE SITUATION ROOM, we're watching the breaking news in Beirut right now. A huge explosion rocks one neighborhood, this as fighting continues in the north as well. We will go there live.

And could Iowa transform Mitt Romney from a runner-up to a front- runner? J.C. Watts and Paul Begala, they are standing by for our "Strategy Session."

And later: vintage Michael Moore. The man who brought us "Fahrenheit 9/11" turns to "Sicko." That's the name of his film -- the film and the controversy, all that coming up.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: A new poll shows Republican presidential hopeful Mitt Romney opening up a large lead in a key battleground state. That would be Iowa.

Joining us now for our "Strategy Session": Democratic strategist Paul Begala, former Republican Congressman J.C. Watts.

"The Des Moines Register" poll shows Romney with 30 percent, John McCain at 18 percent, Rudy Giuliani at 17 percent.

What do you make of this, J.C.?

J.C. WATTS, CNN POLITICAL ANALYST: Well, Wolf, as John King showed in his -- in the previous segment, we don't know when the vote is going to be, let alone who we're going to vote for. I mean, these states are moving around, moving their target dates as to when the primary is going to be.

I -- I think -- I understand Mitt Romney is on the air in Iowa. He's running ads. We have seen some of the ads here in the area, nice pieces. Those are going to drive his numbers. I still believe that it's going to rely on organization. John McCain has good organization in Iowa. Mitt Romney has organization. Rudy Giuliani has organization.

I wouldn't put a whole lot in those numbers, based on one person being on the air. Once everybody else gets in the campaign, then, I think we can put a little more stock in those numbers.

BLITZER: I think it's clear the Iowa caucus will either be in January or December. We will see what happens. Let's take a look at the Democrats' choices, Paula, in the same "Des Moines Register," John Edwards with 29 percent, Barack Obama with 23 percent, Hillary Clinton, 21 percent, Bill Richardson at 10 percent. We will be speaking with him in the next hour.

What, if anything, does that say to you?

PAUL BEGALA, CNN POLITICAL ANALYST: You know, unlike the Republican field, where Romney is surging -- gone from 11 two months ago to 30 now -- the Democratic field is very stable. It's more boring. You know, John Edwards...

BLITZER: Because Edwards has been ahead in Iowa for some time.

BEGALA: He very nearly won the last time. He came in a close second to John Kerry, and was surging there toward the end in Iowa in 2004. He's definitely the guy to beat there. He -- he could change his voter registration to Iowa, he's spent so much time there, but good for him.

It looks like that Barack Obama, who took off, has sort of stabilized as -- basically, a tie for second with Hillary Clinton. I think the interesting thing is Bill Richardson. And, of course, that's why he's coming into THE SITUATION ROOM today. He's kind of the only newsworthy thing in this poll, is that Bill is -- Governor Richardson beginning to surge. That's very good news to his supporters, because he's got a case to make.

BLITZER: All right. Well...

BEGALA: I saw Candy's piece on him earlier in our show.

WATTS: And, Wolf, I -- I have believed all along that Bill Richardson, I think, is kind of the dark horse. I have said that before.

And we see a little bit of a surge. But, again...

(CROSSTALK)

BLITZER: He hates it when we say this, but a lot of people think he's excellent potential vice presidential material.

BEGALA: Yes, but that's like telling your date she doesn't sweat too much for a fat chick. You can't say it out loud.

(LAUGHTER)

BEGALA: You don't say it out loud, you know? You can't say that, just not to -- not you -- you are the king of the interview, OK, but I wouldn't, like, patronize him that way. He would be a pretty qualified president.

BLITZER: All right. I won't mention it.

(CROSSTALK) (LAUGHTER)

BEGALA: I'm sorry.

(LAUGHTER)

BLITZER: All right. Let's talk a little bit.

(CROSSTALK)

BLITZER: There's a Georgia straw poll -- a straw poll that came out. You know, these straw polls are not necessarily all that reliable, certainly not very scientific.

But it was very interesting, because you take a look who came out on top of the Liberty Caucus of Georgia, the Georgia Federation of Young Republicans, Fred Thompson, who is not running yet, as far as we know, but might, 44 percent, Newt Gingrich 18 percent, not running yet, but might -- 18 percent. Rudy Giuliani comes in third with 16 percent. These were 431 delegates, alternates, and guests took part.

Obviously, not very scientific, but what do you think of that?

WATTS: Well, Wolf, I think even that says, when you look at all the polls, John McCain comes in somewhere from about 20 percent to 22 percent -- 20 to 26 percent.

I think John's numbers have stabilized. Now you have got to grow those numbers. Everybody else kind of moves around based on who is in the race. If Fred Thompson is in it, if Newt Gingrich is in, we see Mitt and -- and Rudy's numbers change.

So, I think the McCain folks have to feel pretty good about that. But -- but, again, what have we said? I think people are still kicking the tires. They're still raising the hood, trying to figure out which car do they want to buy.

BLITZER: You know what it says to me, Paul? It says to me that there are still a lot of Republicans out there who aren't satisfied...

BEGALA: Right.

BLITZER: ... with the field that's already been declared. They are looking for some new faces.

BEGALA: That's right.

Democrats are very happy with the candidates they have. You ask any Democrat -- Hillary is the front-runner. They would take Barack. They would take John Edwards. They would be happy with Bill Richardson, Chris Dodd, Joe Biden, any of these candidates. The Democrats are happy with their field -- Republicans deeply dissatisfied.

Two guys who are not running are leading in this Georgia straw poll? That's got to hurt a guy like McCain, who has pretty much been running for president full-time now for six years.

WATTS: Well, we don't know if they're running. we don't know if they're...

(CROSSTALK)

BLITZER: We assume -- we assume both of them will start running at some point.

WATTS: Yes.

BEGALA: Well, they all started -- you know, that's what Moe Udall said. The only cure for presidential fever is embalming fluid. So, maybe these guys have got it, and maybe that's the only cure.

BLITZER: Let me -- let me play a little clip from the "Law & Order" -- the last episode of this season, including the last episode for one of the actors in "Law & Order."

Watch this.

(BEGIN VIDEO CLIP, "LAW & ORDER")

SAM WATERSTON, ACTOR: I'm no politician, Arthur.

FRED THOMPSON, ACTOR: Yes, everybody says that.

(END VIDEO CLIP)

BLITZER: He's giving up that acting career, at least for now.

A lot of people think that, by July 4, he's in this race.

What do you think?

BEGALA: Yes. I always presume they are going to run.

And he -- you know, he brings a lot to it. But the first day he runs -- the day after he announces -- everybody will be nice to him his announcement day. The second day, they are going to start actually looking.

Did he, in fact, pass important legislation when he was in the Senate? John McCain will say, I did. Where was yours, Fred?

You know? And I think that he will get a sort of "Where's the beef?" going over from his rivals for the Republican nomination.

BLITZER: You know him? Have you met him?

WATTS: I do. I know Fred well. As I have said on this show, I think he's -- I think he's a very good guy, obviously qualified to be president.

But, if -- if Fred Thompson gets in the race, I think Rudy Giuliani and Mitt Romney are the ones that loses. When you look at all the polls, that's where he takes the numbers. McCain has a good base of about 20 to 25 percent of the vote. He has to grow that. Fred Thompson comes in with a base. Now, where does he grow his numbers? That's going to be his challenge.

BLITZER: We're going to watch it very, very closely.

Guys, thanks very much, Paul and J.C. Always good to have you guys here.

We're also watching the breaking news in Lebanon. A huge explosion has just rocked the Lebanese capital in Beirut. We're told that a Sunni Muslim district there, an apartment building, is clearly seriously damaged, vehicles, building afire. We're going to go there live shortly. We're watching what's happening in Lebanon.

Also, the U.S. has stepped up its efforts to track down al Qaeda leader Osama bin Laden. But some experts say America may be further from finding him than a year ago. We are going to tell you why.

And Bill Richardson makes his formal announcement today. He's officially running for president. He's also here in THE SITUATION ROOM.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

BLITZER: This hour, supporters and opponents of a complex immigration reform deal are arguing and maneuvering on the Senate floor. The draft immigration bill is more than 300 pages long. But one conservative blogger has made this bill more accessible for readers to digest.

Let's go to our Internet reporter, Jacki Schechner.

Jacki, how -- how is this being done?

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, Wolf, if you take a look at a printed draft of the legislation, you can see here that it is bigger than a Bible.

You can imagine how tough that is to read, let alone trying to read it online. So, a blogger well known as N.Z. Bear has taken this and broken it down into small bite-sized pieces. It's not pretty, but it's effective.

Basically, you can read one section at a time, and then comment on it. He's also made it so that bloggers can link to one section at a time, and don't have to print the whole document out for their readers to get ahold of.

Now, he's a conservative blogger. So, big-name conservatives are linking to him and praising him. But he says this is not about partisanship; this is about participation. He wants citizens to get involved in the legislative process. The Sunlight Foundation, which is all for government transparency, says they aren't going to weigh in on the content of the bill, Wolf, but they do like the idea of making it more accessible.

BLITZER: Thank you, Jacki, for that.

From Jacki Schechner, let's go to Jack Cafferty in New York for "The Cafferty File."

I assume those lawmakers right now, they are reading all those 300 pages line by line by line, right, Jack?

(CROSSTALK)

JACK CAFFERTY, CNN ANCHOR: Yes. We will be lucky if they read any of it.

What a cure for insomnia. I mean, go on your computer and start reading a 300-page immigration bill. If that doesn't do it, then there's no hope.

Our question this hour is: Is the U.S. making a mistake by continuing its current relationship with Pakistan?

Sam in Massachusetts writes: "We certainly should maintain our relationship with Pakistan, because they are and will continue to be a key player in helping us. However, we should try to work harder with Musharraf in order make sure that they uphold their end of the deal. What I think is most important is, they allow us to strike north Waziristan, because a nice carpet-bombing there would kill hundreds, if not thousands, of al Qaeda militants, and destroy key infrastructure and organization vital to them."

Pete in Montana: "Of course, we must continue to spend billions to prop up both the so-called free governments in Pakistan and Afghanistan. Otherwise, Pakistan may not be able to keep its nukes program up-to-date and available for export to North Korea. And Afghanistan's opium crop could fail, resulting in a shortage of heroin here in the United States."

Pat in California: "It costs $4 to buy a bus ticket from Pakistan to Afghanistan, with no security checkpoints along the way. Yet, Pakistan swears they're doing everything they can to stop terrorists sneaking into Afghanistan. Sure, we should keep up our relationship with Pakistan. Their war on terror policy is as effective as ours. We deserve each other."

H.L. in Mesa, Arizona: "Isn't it obvious? Pakistan got a no-bid contract. Just like Halliburton, they get the money whether they're perform or not."

Arif writes: "Here's the deal. Pakistan has sacrificed hundreds of young sons in the name of terrorism. Musharraf has done what no one else would have done. It's easy for us to criticize him from the comfort of our locale." Curtis in Philadelphia: "Jack, our relationship with Pakistan is like that with an in-law. While you really want to tell them to go to hell, you also want to keep the peace. It's a lesser-of-two-evils kind of deal."

And Tom in Medford, Oregon: "Of course we should maintain the relationship. Didn't Bush make a deal for us to get mangoes from them? Jack, you all of people should know how important mangoes are to us Americans. If we break ties with Pakistan, where are we going to get our mangoes?"

We have got to get new viewers for this program, Wolf. That's all there is to it.

Tom, the mangoes have come India. We didn't make any deal with Pakistan. We made the deal with India to get mangoes. Try to follow along here and keep up -- Wolf.

BLITZER: Thank you, Jack.

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