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THE SITUATION ROOM

Full coverage of the thwarted terror attack in Central London. Koppel reports on the latest efforts by the Democrats to change course on the war in Iraq

Aired June 29, 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: Thanks very much, guys.
Happening now, London on alert after a close call with a car bomb. British police say hundreds of people could have been killed if the bomb hadn't been found and defused. We're tracking the investigation.

And now what was in a second suspicious vehicle not that far away?

Also this hour, U.S. troops spill more blood on the Iraq battlefield. And the war takes a toll on Democrats in Congress.

Do party leaders have a plan to try to regain the public's slipping confidence?

And the Democratic presidential hopefuls versus the U.S. Supreme Court -- we'll get an inside take on the candidates' latest debate and how the issue of race came into play.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Let's begin, though, with the breaking news. It's just after 9:00 p.m. In London. There are scenes from a city on edge.

Check it out. Police are examining footage from closed-circuit TV cameras like these, hoping to track down suspects in an apparent bombing attempt. A Mercedes packed with the potentially deadly mix of gasoline, propane and nails was found very early today in London's busy nightclub and theater district. The bomb was defused, preventing what could have been a bloodbath.

CNN's Nic Robertson is joining us now from London.

He's over at Scotland Yard with the latest -- Nic, we just heard that there has been a second car involved, very similar to the first.

Update our viewers who may just be tuning in precisely what we know.

NIC ROBERTSON, CNN CORRESPONDENT: Well, the police have now said that a second vehicle that was discovered in a car pound in the afternoon in London was, in fact, taken away to that car pound just very, very close to where the original car bomb was discovered. They say that it was another Mercedes vehicle and that when the police investigated it, when their forensic teams examined what was inside this second Mercedes vehicle, they discovered bomb making components very similar to that first vehicle.

(BEGIN VIDEO CLIP)

PETER CLARKE, ANTI-TERRORIST COMMAND, METROPOLITAN POLICE: The vehicle was found to contain very similar materials to those that had been found in the first car in Haymarket earlier today. There was a considerable amount of fuel and gas canisters. As in the first vehicle, there was also a substantial quantity of nails.

This, like the first device, was potentially viable and was made safe by the explosives officers. These vehicles are clearly linked.

(END VIDEO CLIP)

ROBERTSON: Now, this gives the police two sets of forensic leads to go on. That will help their investigation, no doubt. But it will certainly raise their concerns, because now they know they're up against a very complex type of attack. More than one bomb involved, at least two bombs, potentially others. And the police have called for vigilance and said that they are stepping up their patrols -- Wolf.

BLITZER: And we didn't hear the end of that statement, but he said these two cars clearly were linked.

I take it very similar devices in both of these vehicles?

ROBERTSON: Earlier on in the day, the police had said that they weren't in a position to say whether or not these two vehicles were linked. Now they are saying categorically and clearly that these two bombs were linked. Both Mercedes, both containing the gasoline, the camping gas canisters, the nails. We were told one of the vehicles, at least, had a mobile phone, potentially the detonating device.

This is now -- it presents the police with -- with more information, but at the same time, the threat that there could be more of these bombs out there -- Wolf.

BLITZER: The -- the whole notion that the timing of this, it could be coincidental. It might not be coincidental. A new government, just taking over, a new prime minister, Gordon Brown, replacing Tony Blair.

I wonder if experts on your end are suggesting this is purely coincidental or there may be something to the timing of these potential plots?

ROBERTSON: Recently, Wolf, a British newspaper published an article that claimed to have information from the British intelligence sources, saying that -- from a letter from a senior Al Qaeda official to Al Qaeda supporters in Britain -- that they should attack during the changeover of power between prime minister -- outgoing Prime Minister Blair, incoming Prime Minister Gordon Brown. Why is this taken as being credible?

Because the man, this Al Qaeda figure, Abdul Haddi, has been named in British court testimony here for -- involved in several other planned attacks in Britain.

So there is evidence here that intelligence officials, at least according to this British newspaper, were aware that there could be a heightened Al Qaeda threat at this time -- Wolf.

BLITZER: The other interesting point -- I've been speaking with experts -- on these kinds of potential car bombs, a lot of propane, a lot of gasoline, a lot of nails that could have clearly killed and maimed a lot of individuals. This is the kind of a car bombing that would terrorize an area and cause a lot of human destruction, but not necessarily bring down a lot of buildings.

Is that what experts on your end, Nic, are suggesting as well?

ROBERTSON: That's what -- that's what they're saying, that so far, we're not aware that there were amounts of explosives in the vehicle.

Again, this is at the very beginning of the police investigation. They don't always tell us all the information they have. Earlier on, they said they weren't -- they didn't know for sure what was inside these propane gas containers, could explosives has been packed into those. That's the sort of thing that the IRA used to do.

Has that now been picked up by this particular group of terrorists?

That's not clear.

But the very fact that -- that these bombs were intended to go off, perhaps outside a nightclub or perhaps in other areas that the were crowded -- we don't know the timings when they were supposed to go off -- but two bombs originally placed fairly close together.

And why didn't they go off?

Was that smoke that was spotted in one of the vehicles an indication that the bomb had failed to go off?

At one level, these bombs quite simple in their design -- low cost, if you will, to make them. Were they intended to go off before -- or shortly before they were actually discovered?

So did -- are they -- did they fail or were the police just very lucky that they were able to pick them up -- Wolf.

BLITZER: And I'm sure the police are nervous, especially at Scotland Yard, where you are, if they already found two cars with bombs inside, perhaps there are others still at large.

Nic, stand by. I know you're collecting more information.

We're going to get back from you shortly. But images from the ground in London are already popping up online, giving all of us a firsthand look at how the bomb scare is affecting Londoners.

Let's bring in our Internet reporter, Abbi Tatton.

She's watching this for us.

What are we seeing already online -- Abbi?

ABBI TATTON, CNN CORRESPONDENT: Wolf, we're seeing just what Londoners are dealing with today as they try and go about their business -- seeing evacuated streets and areas cordoned off. We're going to start at the beginning of the day here.

Olivia Laurent (ph) put these pictures up online on the site flicker. He works just a couple hundred feet away from where that first vehicle was found.

You can see there the tents as the emergency officials dealt with the vehicle. And from this picture here, you can see that that was the light green Mercedes there, as it was being loaded into a truck, which eventually took it away. Olivia recording those pictures as that truck containing that light green Mercedes was taken away past him.

Then on to later in the day, as police dealt with other threats and reports coming in. We're moving further east here, to the Fleet Street, the famous Fleet Street area of town. John was on the sixth floor as this area was cordoned off for about an hour. Police found no threat there. There was a suspicious vehicle. It turned out to be nothing. And that was reopened after about an hour.

But other areas of town remaining cordoned off. We're now going to I-report pictures. These sent in to CNN by Tim Martinez. He's an American student studying in London right now.

That's the Piccadilly area, but, also, the Hyde Park area, the area close to Park Lane, where that second vehicle had been taken. That second vehicle, Wolf, that we are finding out now did contain suspicious materials, as well.

Tim Martinez telling CNN earlier that he was pretty freaked out and that there were sirens going off all around him this afternoon when he took these pictures.

BLITZER: And, Abbi, just -- I want to be precise. You know London very well. These are among the areas most frequently visited by tourists coming in from all over the world.

TATTON: Yes. You don't have to be an expert about London to know that the Piccadilly area, the area of the West End, is where all the people are. In the middle of the night that's going to be one area where there are all sorts of people and plenty of hustle and bustle. You don't need to be a Londoner to know that this is a very famous area -- Wolf.

BLITZER: Abbi, thank you.

We'll get back to you as more images come in online.

British authorities still trying to figure out who was behind the car bomb defused in London today, and now a second suspicious vehicle containing similar explosive material. That according to authorities in London.

Britain's anti-terror police chief says the threat from terrorism is real and it is enduring.

Our terrorism analyst, Peter Bergen, is joining us now -- what do you make of this development, Peter?

You and I, over the years, we have spent a lot of time talking about terror plots.

What's your inkling now based on what we know?

PETER BERGEN, CNN TERRORISM ANALYST: Well, you know, I mean we've seen this videotape before and we've seen it in London. I mean it's multiple potential targets. The 7/7 attack in July 7, 2005 was four different targets. The July 21st plot that was averted was also four different targets.

The first plan was directed by Al Qaeda. The second plan seems to have been more inspired by Al Qaeda. We don't know for a fact whether this is inspired by Al Qaeda, directed by Al Qaeda or something different. But it seems to me to have all hallmarks of an Al Qaeda- directed or inspired organization.

BLITZER: What's worrying to me to me -- and maybe you, I'm sure it is -- they found two cars so far, but you've spoken in the past, one of the signature elements of an Al Qaeda or an Al Qaeda- sympathizing group is maybe four...

BERGEN: Yes, there could be at least two others out there.

BLITZER: And we remember on 9/11 there were four planes that were hijacked.

BERGEN: Indeed.

BLITZER: So there could be two other cars still at large containing these canisters of gasoline, propane and a lot of nails.

What does it say to you, the fact that they had this anti- personnel element to it?

These nails would be dispersed with an explosive device and it would kill a lot of people

BERGEN: Well, you know, it's interesting. I mean it's not -- it wouldn't be a catastrophic explosion. It would be more like a fireball with these nails coming out. And it's a -- the London attacks of July 7th, 2005 used a peroxide-based and that -- those killed 52 people in fairly confined spaces.

I'm not an explosives expert. Clearly, this is different. It doesn't have the signature of other things we've seen in Britain from Al Qaeda. I'm not quite sure what to make of it.

Interestingly, Al Qaeda did have a plan called The Gas Limos Project, which they circulated, basically saying we'll fill limos up with propane and nails and these kinds of things and blow them up.

So this idea has sort of been on the table and out there.

BLITZER: And on the Internet, as well.

BERGEN: On the Internet. In fact, somebody went to jail recently in Britain, a guy by the name of Barot, who distributed this -- this set of ideas. So the idea has been out there. This is not a new idea. But I don't think we've seen it in practice yet in London, except now, today.

BLITZER: Is it your sense that whoever was involved in this were sort of homegrown sympathizers to Al Qaeda or Al Qaeda operatives who have come in to England to plot this kind of attack?

BERGEN: My instinct is it's maybe be entirely homegrown. The reason I say that is if Al Qaeda came in to direct the attack, it would have worked. I mean July 7th, everybody -- you know, they killed 52 people. The July 21st plot, which was more homegrown, didn't work.

So it seems to me when a plot doesn't work, it's -- it's more likely to be amateurs.

BLITZER: Stand by.

We're going to get back to you, Peter, as well, as we continue to watch this breaking news.

Jack Cafferty is off today.

But we're going to have a lot more coming up here in THE SITUATION ROOM.

As the bomb investigation continues to play out in London, we'll find out if President Bush is responding and how he's responding specifically to heightened fears of terror.

Plus, what would the presidential candidates do to make us all feel safer?

We're going to examine this life and death campaign issue.

And did the Democratic contenders change the national debate over race?

I'll talk to Tavis Smiley. He moderated last night's face-off among the eight Democratic candidates.

Stick around.

Lots going on today.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our lead story now, the breaking news out of London.

Police there confirming a second vehicle containing fuel, gas canisters and nails was found today, this one near Trafalgar Square. They say it's "clearly linked to the explosives packed car to the car found earlier outside a nightclub in Piccadilly Circus.

These pictures behind me are live pictures coming in from London via trafficland.com, as London tonight is on a high state of alert.

President Bush is certainly keeping tabs on the situation in London at his family's vacation home in Kennebunkport, Maine.

He's meeting there were the Russian president, Vladimir Putin, on Sunday.

Our White House correspondent, Ed Henry, is covering the president's stay up there -- so what's the administration saying, Ed, about what has happened today in London?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, the traveling White House, as you noted, is clearly monitoring this situation.

White House Spokesman Tony Snow revealing that the president has now had two briefings on the situation. He started his morning with his normal intelligence briefings. And Stephen Hadley, his national security adviser, at that point briefed the president on what the White House knew about developments overnight in London.

Then, about 2:00 this afternoon, a second briefing when the president came back from some fishing with his father. He got a briefing from Fran Townsend, his homeland security adviser, as well.

But Tony Snow is stressing that throughout all of this intelligence, the president has been shown no specific threat against the United States and as a result the White House has decided not to raise the threat level here in the United States. And, also, Snow stressing the U.S. is fully cooperating with British authorities at this point. Officials from various agencies, including the FBI, the State Department and the Department of Homeland Security, have all reached out to their counterparts in Great Britain, trying to help. And the president so far has not called the new British prime minister, Gordon Brown, simply because the White House feels like British authorities are on top of the situation. There's really no point, no real reason for them to confer just yet -- Wolf. BLITZER: But they have to be concerned, Britain being our number one ally in this whole battle, and certainly in the situation in Iraq. They have to be wondering, if it's happening in London right now and it's happened there two years ago, almost exactly two years ago, the spillover effect here in the United States has to be very worrisome.

HENRY: You're absolutely right, Wolf, and that's one of the major reasons why the White House is trying to monitor this situation so closely.

In particular, with the transfer of power in Great Britain -- Tony Blair, obviously, the former prime minister, the president's most stalwart ally in the war on terror broadly, concern, obviously, as to whether or not terrorists are trying to test the new prime minister in Britain. There obviously have been questions about whether Gordon Brown will be as stalwart an ally because Tony Blair took such a beating for being so close to President Bush. He took a beating in the public opinion polls.

Are the terrorists trying to test Gordon Brown right now, so soon after he came into office?

As you know, there have been a lot of questions about, for example, about whether Gordon Brown will want to withdraw large number of British troops from Iraq.

So, certainly, the White House want to make sure, A, that this is not a situation that affects the climate there with a new leader in Great Britain, but, secondly, and most importantly, they want to make sure that people in Britain and in the United States are safe. And that's why you're seeing key officials like Fran Townsend, homeland security officials in the U.S. staying on top of the situation -- Wolf.

BLITZER: The president still gearing up to receive the Russian president, Vladimir Putin, where you are in Kennebunkport.

And I take it the president's father will also be there?

HENRY: That's right. It's quite interesting. This is a delicate subject for the White House. They obviously do not want the impression out there, you know, that daddy is rescuing the son at a key time in U.S./Russian relations. We've seen that play out before over the Iraq War. The White House sensitive to the idea that Bush 41 -- as he's known -- the former president, they're sensitive to the idea that he and his former advisers are helping the White House or shifting any policy.

But in this particular case, the White House does acknowledge that President Bush, the current president, reached out to his father to get permission to use the family compound here for these talks with -- with Russian President Putin.

They start on Sunday. They last through Monday. The White House not calling it an official summit, because they don't want to raise expectations. But make no mistake, they think that an informal setting here in Kennebunkport can help solve the situation, a relationship that started out so warmly in 2001, but has really soured in recent weeks with some of the bellicose rhetoric from the Russian president about this U.S. missile defense plan -- Wolf.

BLITZER: And amidst all of this, Ed, the president takes a direct shot at Syria, the government there of Bashar al-Assad.

Tell our viewers what he announced today.

HENRY: You're right. Even while he's taking a couple days of vacation, the president issuing a proclamation today targeting Syria. The White House, as they've said before, they feel that Syria and others in the region are trying to destabilize that young democracy in Lebanon. The president issuing this proclamation, basically giving U.S. officials at the U.S. State Department the ability to block the travel of key Syrian officials or other former Lebanese officials who the White House believe are trying to destabilize the government in Lebanon. Officials -- U.S. officials traveling with the president basically saying this is another tool in their arsenal, really trying to target Syria and get them to stop meddling in Lebanon -- Wolf.

BLITZER: And among those officials, the head of Syrian intelligence and the national security adviser to the Syrian president.

Thanks very much, Ed.

We'll stay in close touch.

Ed Henry covering the president's stay in Kennebunkport, Maine.

Meanwhile, a top commander in Iraq says an attack that killed five American soldiers was relatively sophisticated and particularly violent. It happened in a volatile area in southern Baghdad yesterday, where a very strong Al Qaeda cell is said to be located.

That brings the total U.S. death toll in Iraq in June up to 99, a very deadly stretch for American forces, extending from spring now into the summer.

Three thousand five hundred and seventy-six U.S. troops have been killed in Iraq since the war began.

On Capitol Hill today, Democratic leaders are sending a message to voters that they haven't given up their mission to try to bring the troops home from Iraq. As they prepare to head home for the Fourth of July break, Democrats may be getting an earful about their failure so far to force a time line for a troop withdrawal

Let's bring in our Congressional correspondent, Andrea Koppel.

She's watching all of this closely.

So what are they planning on doing, the Democratic leaders -- Andrea? ANDREA KOPPEL, CNN CORRESPONDENT: Well, Wolf, it's kind of like that old adage if at first you don't succeed, try, try again. Well, the Democratic leaders in the House and the Senate made clear that when it comes to the war in Iraq, they're not giving up.

(BEGIN VIDEO TAPE)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We have many arrows in our quiver and we are sharpening them.

KOPPEL (voice-over): The target Democrats are aiming to hit -- the president's Iraq policy.

Their goal?

To use the next big 2008 defense bill, set to land on the Senate floor in July, to force President Bush to begin pulling U.S. combat troops out of Iraq within months, the withdrawal to be completed by April 2008.

SEN. HARRY REID (D-NV), MAJORITY LEADER: That I am just -- not as a senator, but as a person, have a moral obligation to do what I can to stop the death and suffering. And I think by pushing for a withdrawal date, it does just that.

KOPPEL: If this all sounds familiar, it should. In May, President Bush vetoed a $124 billion emergency war spending bill which, for the first time, included a time line for withdrawal.

Eventually Democrats backed down and stripped the deadline out.

Fast forward to today.

What makes Democrats think they'll trump the president this time around?

REID: I don't know if we can or not, but we're going to keep pushing, because it's the right thing to do.

KOPPEL: But some things have changed since may. The military surge of tens of thousands of U.S. troops is now complete. And the latest CNN/Opinion Research Corporation poll shows a growing number of Americans, 39 percent, think the U.S. should withdraw all its troops. That's a 5 percent increase from October, a 12 percent up tick since February last year.

PELOSI: Nowhere were the American people more clear about their need for a new direction, their demand for a new direction, than in the war in Iraq.

(END VIDEO TAPE)

KOPPEL: And then, of course, Wolf, there was this week's very, very public call by two prominent members from the president's own party for him to withdraw troops as soon as possible -- Wolf.

BLITZER: Andrea, thanks very much.

More on the breaking news story right after this.

(COMMERCIAL BREAK)

BLITZER: We're tracking the breaking news out of London. Police now confirming a second vehicle containing fuel, gas canisters and nails was found today, this one near Trafalgar Square. They say it's clearly linked to the explosives packed car found earlier outside a nightclub near Piccadilly Circus.

We're going to go back to London for a live update momentarily.

But there are some other important stories we're watching right now.

Carol Costello is watching those for us -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Wolf, let's start in Afghanistan. The U.S. military says a number of militants have been killed and captured in raids there. U.S.-led coalition and Afghan troops have been targeting Taliban and other militants in southern and eastern regions. The military says troops were fired on as they raided three suspected bases for Taliban and foreign fighters.

An about-face from the Supreme Court. It has agreed to hear the cases of detainees at a U.S. prison in Guantanamo Bay, Cuba. The men are being held indefinitely without charge. They're fighting to use the civilian federal court system to challenge their detention. But the Bush administration argues that system has no jurisdiction and wants the case is dealt with by military tribunals. The justices gave no reason for their change of heart.

New flood alerts for Texas and Oklahoma, where it just won't stop raining. The storms are blamed for 11 deaths in the state now. In the meantime, Oklahoma is now under a state of emergency. It's been raining there for more than two weeks straight and forecasts say it could rain for another week.

And a bizarre twist in the deaths of pro-wrestler Chris Benoit, his wife and son. Online encyclopedia, Wikipedia, reported on Benoit's wife's death 14 hours before the families' bodies were found in their Georgia home. Now, a person reported confessed to changing Benoit's Wikipedia profile to mention his wife's death. The person said the changes were based on rumors, not hard evidence.

Authorities think Benoit strangled his wife and son before killing himself.

That's a look at the headlines now -- Wolf.

BLITZER: What a strange twist in that horrible story.

Carol, thank you very much.

Up next, are voters sentimental for Republican control of Congress?

Our new poll measures discontent with Democratic leaders.

And the car bombs in London ratcheting up fears right here in the United States.

What are presidential candidates in this country saying about the threat there and about the war on terror here?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now: breaking news.

It could have been carnage, but it wasn't, at least two planned car bombs foiled by chance in London's West End. We're going to go live to London shortly, examine the role of the public in the war on terror.

Almost 100 U.S. soldiers killed in Iraq alone this month, and the Pentagon still can't say when Iraqi troops will be able to operate on their own. There are new details on the training of Iraqi forces coming up.

And campaign cash -- who's ahead and who's behind in the fund- raising race?

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

First, an update from London on the two car bombs, that's coming up. Certainly, we're watching this breaking news very, very closely. We will have a full report momentarily.

Meanwhile, here in Washington, on Capitol Hill, Democratic leaders trying to spotlight their agenda, and putting their best face possible on what they have not accomplished -- our brand-new poll suggests Americans so far are not impressed.

Let's bring in our senior political analyst, Bill Schneider, who is watching all of this for us.

Bill, how do people think the Democratic-controlled Congress is doing after their first six months in power?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Lousy, but better than the alternative, Wolf.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): After six months, the Democratic Congress is taking a break. Well deserved? No, say Republicans. REP. ERIC CANTOR (R), VIRGINIA: We are now halfway through the first year of the 110th Congress, and there's no question that the failure on the part of the Democrats, in terms of their midterm exam, is -- is, really, I think, a letdown to the expectation of the American people.

SCHNEIDER: Democratic leaders are inclined to agree.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I'm not happy with Congress either.

SCHNEIDER: And the American people? Look at the grades. While President Bush is doing terribly, an average of 30 percent job approval in recent polls, Congress is doing worse, 25 percent.

Why the low marks? Democrats point to one issue where not much seems to be getting done.

SEN. HARRY REID (D-NV), MAJORITY LEADER: The war in Iraq is dragging down people's confidence in what's going on in this country.

SCHNEIDER: Republicans point to another issue.

SEN. JIM DEMINT (R), SOUTH CAROLINA: One of the reasons that confidence is at an all-time low is because of this immigration bill.

SCHNEIDER: So, are voters ready to change horses again and go back to a Republican Congress? Nope. A solid majority says it's good for the country that the Democratic Party is in control of Congress. Even though they're doing a lousy job? Yes.

People think, OK, the Democrats aren't so great, but the Republicans are worse. Americans are not convinced that changing parties will make much difference. The new dynamic in American politics right now isn't Democrat vs. Republican.

SEN. JON KYL (R), ARIZONA: Americans don't believe that their government is representing them, is acting on their behalf. The polls show it.

SCHNEIDER: It's the people vs. the government.

(END VIDEOTAPE)

SCHNEIDER: The immigration bill is a perfect illustration. It was a bipartisan bill supported by President Bush and most Democrats in Congress. So, why didn't it pass? Because the people didn't like it -- Wolf.

BLITZER: All right, Bill, thank you -- Bill Schneider looking at all these numbers for us.

Remember, we're following the breaking news out of London, British police confirming a second -- a second -- car bomb was found today hours after the first one was discovered and defused. Authorities say the two explosives-packed vehicles are clearly linked. British authorities are trying to figure out who's to blame.

Meanwhile, presidential candidates in this country are finding a new opening to talk about the war on terror.

Let's go to our Brian Todd. He's watching all of this unfold.

One White House hopeful, Brian, already seizing on this development in London.

BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf.

Nearly six years after 9/11, the fight against terror is still a Republican strength, and the GOP front-runner is in a unique position to capitalize.

(BEGIN VIDEOTAPE)

TODD (voice-over): Half-a-world away from London's cordoned streets, the Republican presidential front-runner plays the terrorism card.

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: When I hear about a thing like this in London today, it brings me back to many, many incidents in New York, how to react to it, how to deal with it, how to prepare for it.

TODD: What many believe is a proven track record on terror has catapulted Rudy Giuliani. And he often brandishes that on the campaign trail, intending to draw sharp distinctions between himself and the Democrats.

GIULIANI: I think they're in denial. I think they can't face this threat.

TODD: Analysts say, with Iraq their albatross and a fresh defeat on immigration reform, terrorism is one of the few issues where Republicans play from a position of strength.

A.B. STODDARD, ASSOCIATE EDITOR, "THE HILL": They have governed us in a time of terror. The Democrats have not governed since September 11 and not yet proven that they are the party that can keep us safe.

TODD: That often leaves Democrats playing from the sidelines, trying to win credibility on terror by finding any Republican weakness, real or perceived.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: What this global war on terror bumper sticker, a political slogan -- that's all it is; that's all it has ever been -- was intended to do was for George Bush to use it to justify everything he does.

TODD: That got John Edwards skewered by Republicans. Even Hillary Clinton said she disagreed with Edwards, said she's seen firsthand what a small band of terrorists can do.

On the current threat in the U.S.?

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I believe we are safer than we were. We are not yet safe enough.

TODD: But is that the right message to make voters believe they will be safer under Democratic leadership?

MIKE ALLEN, CHIEF POLITICAL CORRESPONDENT, POLITICO.COM: This is very tough terrain for Democrats, because they have not yet convinced people, as far down the cellar as Republicans are, that Democrats are not just the anti-war party.

(END VIDEOTAPE)

TODD: How do Democrats turn that around? Well, one analyst says, we will have to do a careful balancing act, what he calls security-plus. Democrats will have to hit home that they will be tough on terrorism, while not getting embroiled in controversies like torture and wiretapping that have hounded the Republicans -- Wolf.

BLITZER: Brian, thank you -- Brian Todd reporting.

Coming up, we are going to have the latest on the two -- two -- car bombs found in London today.

Also, the Democratic presidential candidates take on the U.S. Supreme Court, the issue of race, a lot more. Did they score points with African-American voters, among others? I will ask the moderator of last night's debate, Tavis Smiley. He's standing by live right here in THE SITUATION ROOM.

And, later, Elizabeth Edwards takes on her husband's fight against the conservative pundit Ann Coulter. Is John Edwards coming out of this war of words a winner?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Democratic presidential candidates are fanning out today to various parts of the country, after their latest debate right here in Washington.

Our senior political correspondent, Candy Crowley, reports on the driving issue of that debate: race in America.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The most diverse field of presidential candidates in history met on the campus of historically black Howard University to talk about race in the 21st century.

EDWARDS: Slavery -- followed by segregation, followed by discrimination -- has had an impact that still is alive and well in America. CROWLEY: They talked about racial inequities across the board, but, first, they talked about the Supreme Court decision barring the use of race in assigning students to public schools. Joe Biden called for a new president to correct the conservative tilt of the Bush court.

SEN. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE: They have turned the court upside down.

(APPLAUSE)

BIDEN: And the next president of the United States will be able to determine whether or not we go forward or continue this slide.

CROWLEY: They talked about racial disparities in health care.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: But let me just put this in perspective. If HIV/AIDS were the leading cause of death of white women between the ages of 25 and 34, there would be an outraged outcry in this country.

(CHEERING AND APPLAUSE)

CROWLEY: They talked about gaps between blacks and whites in education, employment opportunities, and justice.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The criminal justice system is not colorblind. It does not work for all people equally. And that is why it's critical to have a president who sends a signal that we are going to have a system of justice that is not "just us," but is everybody.

CROWLEY: Iraq was barely mentioned, except in the context of how much it was costing, money that could be spent elsewhere.

REP. DENNIS KUCINICH (D-OH), PRESIDENTIAL CANDIDATE: Stop funding war. Start funding education. That's where we get the money.

(CHEERING AND APPLAUSE)

CROWLEY: African-American voters are the most loyal and one of the largest voting blocs in the Democratic Party. So, the debate at Howard was a must-attend for these candidates.

(on camera): Nobody took any major hits. At the same time, there was no breakthrough performance. On this night, most of the candidates pretty much agreed on pretty much everything.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

BLITZER: And let's go right to the moderator of last night's debate, Tavis Smiley. He's here in THE SITUATION ROOM.

Tavis, what did you think? You had an up-close and personal look at these eight candidates.

TAVIS SMILEY, HOST, "THE TAVIS SMILEY SHOW": I thought it was a good -- a good showing of last night.

The real purpose of last night was to unapologetically, Wolf, try -- and you have done this before, so you know what it's like trying to herd eight...

BLITZER: It's not easy.

SMILEY: ... now that you're trying herd eight people.

But, last night, we unapologetically were trying to raise issues that had not been discussed before. As Candy just mentioned in her piece, I believe that the African-American vote in the 2008 election is going to be the most sought-after and most fought-over Democratic demographic.

And, so, it was a must-attend last night to try to address issues that are important to African-Americans and people of color. They came last night ready. It was a good conversation.

BLITZER: Well, you all -- you heard -- you saw the reaction in the audience at Howard University. You also did some focus groups. Tell us what you found out.

SMILEY: On my PBS show, my regular show, late tonight, late night on PBS, we are going to talk to about 30 people who were part of a multiracial, multiethnic, multicultural focus group last night.

Thirty people, they came in last night overwhelmingly predisposed to vote for Barack Obama. You find out tonight, when we talk to them, that, at the end of the conversation last night, only two of them still felt that way, that is to say that they overwhelmingly thought Hillary Clinton, hands down, won the debate last night.

I asked them, though, after saying that they thought Hillary won the debate last night, whether or not that meant that they were going to vote for her. And they said, well, not so soon.

But, clearly, I think there is a pattern here, with all due respect for Senator Obama, that this may not be in his format. In these debates, he doesn't really break out. Last night, a lot of folks thought that that audience at Howard was tailor-made for him. He did fine, don't get me wrong. But maybe the debate format isn't his style. Maybe he's better long form than he is short form.

But, according to the focus group last night, he did not win that debate last night.

BLITZER: Look at these poll numbers. In the most recent Gallup poll among African-Americans, it's virtually neck and neck, 43 percent for Clinton, 42 percent for Obama. It's -- and the other candidates way down in the single digits.

But, really, for that African-American vote among registered Democrats and voters likely to vote Democratic, this is up for grabs right now.

SMILEY: It is. And that's why that conversation last night was so important.

We tried again to get to issues that had not been raised. In the debates that others have hosted, they focused so much on Iraq. We have talked so much about immigration.

But, last night, you have got -- as you know, you have got 90 minutes. You are going to get out 10, 12 questions, maybe. But we went at -- we talked about education last night. We talked about crime last night. We talked about race last night. We talked about Katrina last night. We talked about Darfur last night, trying to talk about issues that matter to black voters and other voters of color to see if we could get them off of their standard, on-message scripts...

(CROSSTALK)

BLITZER: And you are going to do the same thing with the Republicans.

SMILEY: Same thing in September.

BLITZER: Travis, thanks for doing a good job.

SMILEY: Good to see you, Wolf. Thank you. You, too.

BLITZER: Appreciate it.

SMILEY: Thank you, my friend.

BLITZER: The next presidential debate will be here on CNN July 23 in Charleston, South Carolina. CNN is teaming up with YouTube. It will be the first debate where all of you can submit your own questions to the candidates online. You could do it right now, if you want.

And, remember, for the latest political news at any time, check out our Political Ticker at CNN.com/ticker.

Up next: Democratic leaders in Congress trying to change the subject by attacking Republicans.

(BEGIN VIDEO CLIP)

REID: The culture of corruption was here, and it appears the Republicans don't want it to go away.

(END VIDEO CLIP)

BLITZER: Talk like that apparently isn't giving Americans a good impression of Congress. James Carville and John Feehery, they're standing by. They are ready to hash things over, our new poll numbers, a lot of other subjects, coming up in our "Strategy Session," including the car bombs found in London today. Will that help Republican presidential candidates gain ground with voters? Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We have been following the breaking news out of London today, a dramatic reminder of the threat of terrorism, two car bombs found in different parts of the English capital. Fortunately, neither bomb went off. Police, though, are looking for more cars right now.

It's a cold, hard reminder that those of us who live in the United States also remain vulnerable to terrorism.

Which of the candidates would best prevent another attack like 9/11?

Here to talk about the politics of terror in our "Strategy Session," Democratic strategist James Carville and Republican strategist John Feehery.

The conventional wisdom...

JAMES CARVILLE, CNN POLITICAL ANALYST: Right.

BLITZER: ... is that this is an issue tailor-made for the Republicans, that, if Americans start to worry once again about terrorism, it's going to benefit politically for the Republicans.

CARVILLE: Well, you know, our competitors over at FOX News network took a poll. And they asked people -- and quote -- I'm quoting their poll -- "If there's an all-out war between the United States and various radical Muslim groups, who would you rather have in charge, Democrats or Republicans?" Forty-one, Democratic; 38, Republican.

They have lost that. There is nothing the Republicans have left. The last thing they have got is now gone. And I have no reason in the world why any rational person would want the Republicans in charge of the war on terror, and not the Democrats. The Democrats are staying in session to implement the 9/11 Commission. The Democrats want -- would have gone after Osama bin Laden.

The Democrats would not have got us bogged down in Iraq. So, that's fine. If people -- if people want to have terror as the number-one issue, it's obviously an important issue. I don't -- I can't understand why any sane person would not want the Democrats in charge.

BLITZER: It's not as powerful an issue for Republicans now as it was back in 2004.

JOHN FEEHERY, REPUBLICAN STRATEGIST: Well, it's not. But it's going to be if the nominee is Rudy Giuliani, I think. I think he's the best one to talk about this for the Republicans.

If he gets the nomination vs. Hillary Clinton, he will -- he would -- will wipe off the floor with Hillary Clinton, I think, on this issue. And I think that he has that Q factor. He's got that kind of credibility on this issue more than any other...

(CROSSTALK)

BLITZER: And he's certainly...

FEEHERY: And so do Republicans.

BLITZER: He's using that issue.

FEEHERY: Right.

BLITZER: You served for the speaker of the House during -- during those critical years.

FEEHERY: I did. And, you know, the fact of the matter is, he was a great mayor, and he showed that -- the competence and the desire to get the job done.

(CROSSTALK)

BLITZER: If terrorism becomes a huge issue...

CARVILLE: Right. Right.

BLITZER: ... and it's Hillary Clinton vs. Rudy Giuliani, what do you think happens?

(CROSSTALK)

CARVILLE: I think she will beat him.

Just, well, why did you put the command center in the World Trade Center? Why did you not have your police a way to talk to each other?

If you look at Senator Clinton's record on this, in terms of, like, implementing the 9/11 Commission, she was -- you go and you ask the people, the widows of these people who died, and I guarantee you, they will all say that Senator Clinton, most all of them -- there are different people -- will say that Senator Clinton has stood with them.

Senator Clinton has been on the Armed Forces Committee. And Rudy Giuliani has never had anything to do with the U.S. military.

(CROSSTALK)

BLITZER: Is it a foregone conclusion that, among registered Republicans and those voters likely to vote Republicans, this issue clearly helps Rudy Giuliani going at, as opposed to, let's say, John McCain, or Mitt Romney, or some of the other Republican candidates?

FEEHERY: Well, I think McCain has a lot of credibility on this issue, because he's been a war veteran. He is someone who has got a lot of built-up credibility. And he's been strong on the war, and I think that Romney, to a lesser extent.

But I really think that, for Rudy Giuliani, because he's -- he's been most identified with the war on terror, that this is -- this is his winning issue for him.

BLITZER: And what about Fred Thompson?

FEEHERY: Well, you know, he was not really around during all this stuff, and he -- I don't think he has that built-in credibility that Rudy has.

BLITZER: Listen to Nancy Pelosi. You know, she's -- she's being criticized. Harry Reid is being criticized. Democrats are being criticized...

CARVILLE: Right.

BLITZER: ... for really not, six months into their power, not doing what a lot of voters really wanted them to do...

CARVILLE: Right.

BLITZER: ... get a timeline for troop withdrawal.

Listen to this.

(BEGIN VIDEO CLIP)

PELOSI: I'm not happy with Congress either. And I believe that our record will come across to the American people as we're able to pass legislation into law or convince -- tell the American people as to why that hasn't happened. But Congress is a big institution to turn around.

(END VIDEO CLIP)

BLITZER: So, what -- how do the Democrats deal with this problem? Because, as bad as Bush's popular numbers are, Congress' numbers are even worse.

CARVILLE: Well, also, the Republican Party numbers are 30 points worse than the Democratic Party numbers, according to our own poll. That's a pretty big shift there. And, also, people say they much would prefer having the Democrats in charge.

The problem is, is that these Democrats, they sent up a timetable. The president vetoed it. But, right now, you see that that the Senate Republicans, Senator Lugar, and I think -- I think Secretary Gates, understand what's going on. They're not going to -- they're going to negotiate a deal with the Senate Democrats. They're just going to cut the administration out of it and tell the president, this is the deal we cut, and you're going to sign it. And that's it.

I mean, they are kind of done looking to him for Iraq policy, if you ask me.

BLITZER: And, as horrible as the numbers are for job approval for Congress, look at this in our new CNN/Opinion Research Corporation poll. We asked if Democratic control of control is good for the country or bad for the country. Fifty-seven percent thought it was good for the country. Thirty-one percent thought it was bad for the country.

So, they have a clear -- the Democrats, John, have a clear advantage on this issue.

FEEHERY: Well, that's true right now. And I think it's because they see -- the American people see them as a counter to President Bush, and President Bush's ratings are so low, which is not that unusual in the seventh -- seventh year of a term.

But the fact of the matter is, the Democrats have made their impression. Their impression is that they're a little bit incompetent. And I think that is going to stay with the voters until the election.

BLITZER: Is there a distinction that is made among the American people, James -- and you have spent a lifetime studying the American public -- out there between the war in Iraq right now and the war on terror?

CARVILLE: Yes. I think -- I think that the administration and the Republicans have spent a long time trying to muck it up, but I think they're becoming less successful by the day.

And I think that people -- and if you look at Britain, nearly to a person, every intelligence expert in Britain thinks the war in Iraq is making this terrorism problem worse. I can't -- I don't know if there's a terrorism expert in our country that doesn't feel the same way.

We keep getting these reports from the CIA. and government agencies say the same thing. That kind of expertise that people that know what's going on, I think, to some extent, is starting to filter down to the public. And they see that the war in Iraq has made not -- has made things worse on the war on terrorism, not better.

BLITZER: What do you think?

FEEHERY: Well, the fact of the matter is that all the terrorists right now -- a big al Qaeda presence in Iraq, and that's where their -- our best chance is -- of killing terrorists is in Iraq and in Afghanistan.

And they have not -- there's not been a successful attack on American soil since 9/11, which is something that I think the voters understand.

BLITZER: We have got to leave it there, guys., Thanks very much for coming in, James and John, our "Strategy Session."

(CROSSTALK)

BLITZER: Still to come, we're going to have more on the breaking news out of London, a terror plot foiled by a few good eyes. We are going to examine the role of the public and closed-circuit television preventing terrorism in London and here in the United States.

And Elizabeth Edwards talks to us about her husband's campaign for president and those personal attacks by Ann Coulter.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It's a busy weekend for the presidential candidates out on the campaign trail.

Besides cramming in some last-minute fund-raising before tomorrow night's first-quarter -- second-quarter, that is, financial deadline, seven of the eight Democratic presidential hopefuls will be in Florida tomorrow. They are showing up at a forum hosting by top Latino elected and appointed officials. The pilgrimage by the candidates underlines just how important the Latino vote is for the Democrats. Long-shot candidate Mike Gravel is the only Democrat who won't be attending.

Six of the 10 Republican White House hopefuls will be at a conservative forum in Iowa that's focusing in on tax relief. Texas Congressman Ron Paul wasn't invited to that forum, so, he's going to show up and hold his own campaign event around the same time in the same hotel.

With the second-quarter fund-raising deadline only a day away for those presidential candidates, supporters' e-mail in-boxes are filling up with last-minute appeals for cash.

Our Internet reporter, Abbi Tatton, is with us.

So, what techniques, Abbi, are they using at these last hours?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, the sheer number of text messages, e-mails and Web pushes in the last day shows just how important this deadline is to the candidates.

From the Barack Obama camp, their emphasis is on the number of donors. And daily e-mails now to your in-box make sure that we don't forget it.

From the John Edwards campaign, the emphasis over the last few days has been that cable clash between Elizabeth Edwards and Ann Coulter. It's their Web site. E-mails were sent out to supporters. And, if you missed it there, the exchange was also sent to cell phones, with the following message.

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: Please give what you can today. Simply press one to contribute to the campaign.

(END AUDIO CLIP)

TATTON: From the Republican side, there's been a donate-for-swag effort. From John McCain, $100 will get you this handsome polo.

And, from the Mitt Romney camp, their T-shirts a little cheaper at $50, though, if you go the Mitt Romney Web site, you will find the former governor of Massachusetts hitting people up for more cash himself.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I wanted to remind you that the end-of-the-quarter fund-raising deadline is just days away.

(END VIDEO CLIP)

TATTON: Just days away.

Now it's tomorrow, Governor. And the deadline is midnight -- Wolf.

BLITZER: Abbi, thank you.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now, breaking news: two car bombs found in London -- officials urging vigilance, after London police what could have been scenes of death. We have got the latest, along with information on how you can stop a terror plot here in the United States. Keep your eyes open, one piece of advice.

Iraqi insurgents continue to use a deadly weapon against U.S. troops. The defense secretary says that, the longer it takes to stop it -- quote -- "Scores of young Americans are going to die."

And legions of waiting iPhone admirers are just minutes away from getting their thumbs on one of those machines.

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

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