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Reading Between the Lines of Osama bin Laden; President Bush Iraq Speech; Dems Charge Manipulation: Setting Stage for Iraq Report

Aired September 7, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the breaking news we're following, reading between the lines of Osama bin Laden. A new videotape featuring the terror fugitive has been released. Does it include a 9/11 anniversary threat?
Also this hour, great expectations. Can Fred Thompson's newly- launched White House bid live up to all the hype? We have a one-on- one interview, rare access to the Republican presidential candidate on his campaign bus.

And Barack Obama's wife opens up, perhaps a bit too much. Is she revealing more about her husband than voters want to know? She might get some advice from Hillary Clinton.

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

But let's begin with the breaking news on the video that appears to be the first time that this new tape of Osama bin Laden has been released in nearly three years. The timing isn't lost on anyone, only days before the sixth anniversary of 9/11. That's coming up on Tuesday, and U.S. intelligence agencies are now working to verify the tape and the clues, the clues about the fugitive al Qaeda leader's plans.

Let's go to our homeland security correspondent, Jeanne Meserve. She's been watching the video. She's been going through the transcript.

Give our viewers a sense of what this al Qaeda leader, assuming it is him, assuming it's his voice -- all this is being worked on by the CIA to confirm -- but assuming this is genuine, what are we learning?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, the transcript of the tape which we've read in -- and we should say the tape is purportedly of bin Laden -- appears to be fairly current. It references, for instance, Nicolas Sarkozy, the president of France, who assumed office just last May, and Gordon Brown, the new British prime minister. It also mentions the anniversaries of the atomic bombings of Hiroshima and Nagasaki, a clue that the tape might have been made in August.

There are unsurprisingly references to 9/11. "Despite the power of the U.S.," the transcript reads, "19 young men were able by the grace of Allah, the most high, to change the direction of its compass." The transcript also says, "Burning living beings is forbidden in our religion, even if they be small, like the ant," a statement that's hard to reconcile with images we've all seen of the twin towers.

But the transcript dwells heavily on the war in Iraq, which is characterized as a failure, another Vietnam. One solution, the transcript says, "... is to escalate the killing and fighting against you. This is our duty and our brothers are carrying it out. And I ask Allah to grant them resolve and victory."

There are no other overt threats that we found.

In an interview earlier today, I asked Homeland security Secretary Michael Chertoff about the tape.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I wouldn't overstate the significance. Obviously, people are always interested in trying to figure out if he's alive, if he's healthy.

One of the things you want to do whenever you get a tape is try to determine whether it's been Photoshopped or whether people have integrated different tapes from different types of film into a single broadcast. So, all this is going to be looked at by experts. But again, I wouldn't overemphasize the significance of it.

(END VIDEO CLIP)

MESERVE: That type of analysis that Chertoff spoke of is exactly what's going on right now within the U.S. government -- Wolf.

BLITZER: So, what, if any, precautions are you hearing that the Department of Homeland Security might be taping -- might be taking now in connection with this new videotape? Because in the past, U.S. intelligence and law enforcement officials have often worried that there could be some hidden codes, some hidden messages brought forwarded by Osama bin Laden.

MESERVE: Well, when I spoke to Chertoff earlier today, he would not confirm the existence of this tape, but we know at that time that they did have their hands on a transcript at least, and were looking at that. And he said there were no changes in protective posture, that things have been ramped up a bit this summer, things continue to be changed around, but they do not believe there's an imminent threat to the homeland. Things remain largely where they have been -- Wolf.

BLITZER: All right. Thanks very much.

Stand by, because I know Jeanne is working her sources.

Our terror analyst, Peter Bergen, is joining us on the phone now.

Peter, I've gone through the transcript. I've read this.

Clearly, if, in fact, this is Osama bin Laden, if this is confirmed to be his voice, he's obviously alive right now. But first of all, if you take a look at the two pictures, the last time we saw him, 2004, his beard was gray. Now it's black.

What, if anything, do you make of that?

PETER BERGEN, CNN TERRORISM ANALYST: I guess that's just a case of hair dye. I mean, nothing more, nothing less.

You know, bin Laden celebrated his 50th birthday this year. He is -- he tends to look a bit older than 50. Obviously, he's living under some stress, but the most -- the videotape, you may recall, that came out the last time we saw him came out about five days before the presidential election in 2004.

In that tape, he looked pretty well to me rather than some of the other tapes we've seen in the past. His clothes were pressed. He was sitting behind a desk. He was doing a sort of -- almost like a Halloween parody of an Oval Office address, talking to the American people in a fairly well-lit situation.

He didn't look stressed out. He didn't look like he was on the run. And, you know, so, you know, there's been some discussion about why we haven't heard about him for a while. I think there's a very simple answer to that.

He's a paranoid, secretive, disciplined guy who, every time he releases a video or audiotape, there is a possibility the chain of custody of these tapes can be traced back. And that's a way he can be found. So, I think he and Ayman Zawahiri, the number two in al Qaeda, have done sort of a deal where Ayman al-Zawahiri is producing more videotapes (INAUDIBLE) at this point.

He's sometimes coming out with two a week. And, of course, that means he's much more likely to be caught. Indeed, in January of 2006, Ayman al-Zawahiri narrowly escaped being killed by a Predator missile that was -- targeted him in the tribal areas in Pakistan.

So, bin Laden is keeping quiet because he knows that the chain of custody of these tapes can be traced back. That's one way to find him.

On the other hand, if he says nothing, he sort of becomes more of an historical figure, so he's in an interesting catch-22. If he says nothing, he sort of recedes into history. If he -- if he makes these tapes, he opens himself to detection.

So, I think that right now he's rationing these tapes out pretty carefully. But as you said earlier, Wolf, you know, no coincidence this is coming out around the sixth anniversary of 9/11. And indeed, I would anticipate another videotape in the run-up to the presidential election in 2008.

BLITZER: Another videotape by Osama bin Laden. A lot of people believe that that videotape that he released just before the 2004 U.S. presidential election wound up helping President Bush, hurting the Democratic presidential nominee, John Kerry.

If you read the whole transcript, as I have, it shows an incredible amount of detail as far as the domestic political scene here in the United States. By name, he goes after what he calls the neo-conservatives. He refers not only to Donald Rumsfeld and others, but he refers by name to Richard Perle, a former Defense Department adviser.

He also cites a book that a former CIA analyst on Osama bin Laden, Michael Scheuer, wrote. He says, "If you would like to get to know some of the reasons for losing your war against us, then read the book of Michael Scheuer in this regard."

Is that surprising, how much detail he goes into on the Democratic takeover of the U.S. House and the Senate and these other specific issues here in the United States?

BERGEN: Not really surprising to me, Wolf. I mean, this guy is a news junkie with a lot of times on his hands, and he obviously has access to BBC Radio, potentially, you know, Internet access, maybe newspapers.

We've seen in the previous statements he's made, you know, he's got a pretty granular sense of U.S. domestic politics, stuff that's happening around the world. When we interviewed him in '97, his first television interview on CNN, he started talked about Gerry Adams, the head of Sinn Fein, the political wing of the Irish Republican Army, visiting the White House.

I mean, this is -- this is a guy who is a political news junkie. He's quite well informed.

It's interesting that he has access to Michael Scheuer's book. That indicates, you know, that people are going out and buying things of interest to him at book markets in Pakistan, I would imagine. I'm sure Mike Scheuer, the former head of the bin Laden unit, will not be necessarily thrilled that Osama bin Laden is kind of giving this book endorsement in this most recent videotape -- Wolf.

BLITZER: He's also endorsing the books and the work of Noam Chomsky, who's a very outspoken anti-war critic here in the United States, Peter, as well.

All right, Peter. I want you to stand by because we're going to continue to watch this story, but I want to check in with Jack Cafferty. He's in New York. He's got "The Cafferty File".

Jack, we anticipated yesterday that there would be a new videotape. There is now a new videotape. They're analyzing to make sure this is Osama bin Laden.

But you notice they groomed him a little bit. He doesn't have that gray beard anymore. He's got a little bit of a darker beard.

JACK CAFFERTY, CNN ANCHOR: Well, he looks a lot less like he's been living in some cave on the Pakistani-Afghanistan border, doesn't he? He's gotten a trim, he's groomed, he's got -- I guess he has his own production company that's turning out these tapes. Apparently, he's got a barber or somebody around him to dye his beard. And, you know, I wonder if he's still hanging out in the wilderness like we have assumed he has been for the last four or five years.

While we contemplate Osama bin Laden and the upcoming anniversary of 9/11, consider this: there is a blistering report out on air cargo security. The Transportation Security Administration's program for keeping bombs out of the cargo holds of airplanes is fill of holes and leaves passenger planes more vulnerable to attack.

"USA Today" reports on this assessment by the Department of Homeland Security's inspector general. This report says the TSA has too few cargo inspectors, an ineffective database to track violations, and vague violations for screening cargo that goes on passenger planes.

It's estimated the passenger planes carry about 7,500 tons of cargo a day. And only a very small percentage of that is physically looked at and inspected.

The TSA mostly agreed with the report's conclusions. It said its main improvement since the findings were released privately to them back in May, the agency says "there were legitimate criticisms" -- no kidding. "Things are not the same though today as they were back then."

The inspector general's report acknowledges the TSA's recent efforts but says that only one in seven recommended improvements has been fully implemented.

That's disgraceful.

Here's the question: How safe do you feel flying six years after 9/11?

E-mail us at caffertyfile@CNN.com or go to CNN.com/caffertyfile.

As a passenger, they look at you pretty closely now when you go on and off those airplanes, but apparently the cargo that goes in the belly of the plane right underneath where you're sitting, who knows what's in there?

BLITZER: Yes, this has been a huge, huge issue. A lot of people have complained about it. They have got a lot of work to do on that front, Jack.

CAFFERTY: Do you ever do anything to change the color of your hair?

BLITZER: No. No. I probably should do something about it.

CAFFERTY: No, no, you look very distinguished.

BLITZER: Very natural. That's...

CAFFERTY: A nice-looking man.

BLITZER: That's the way it is.

Jack, thanks very much.

Republican presidential candidate Fred Thompson on the bus and on the record. Our John King presses Senator Thompson on the hunt for Osama bin Laden and who should be held accountable for failure to find him. That's coming up.

Plus, as analysts pore over this latest bin Laden video, presidential candidates are considering the lessons of 9/11, and they don't see eye to eye.

And Michelle Obama reveals some stinky truths about her husband. That would be Senator Barack Obama.

Could she use some tips on running for first lady?

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

(COMMERCIAL BREAK)

BLITZER: There is new word on what's coming in a politically charged progress report on Iraq. U.S. military officials now telling CNN the top U.S. military commander in Iraq will recommend that current troop levels continue through next spring. That's when scheduled rotations will begin to reduce the so-called surge force. General David Petraeus delivering a progress report to Congress starting on Monday.

Our senior Pentagon correspondent, Jamie McIntyre, is going to have more on that. That's coming up.

In a letter to the troops dated today, General Petraeus said U.S. forces have what he calls tactical momentum in Iraq, but he adds that overall military progress is "uneven" -- that's his word -- and political progress hasn't happened. All this, and now there's new word about how President Bush might be addressing the Petraeus report next week.

Our congressional correspondent, Dana Bash, is standing by. But let's go to our White House correspondent, Ed Henry. He's getting new information on what the president's strategy might be in the coming days -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, Wolf.

CNN has learned that the president is very likely next week to address the nation in prime time, probably from the White House, with a progress report on the situation on the ground in Iraq. The details are not completely set, because, of course, the president is still overseas in Australia right now. But the most likely day seems to be next Thursday, at least the later part of next week, in part because it's going to be a very big week. The table will be set on Monday and Tuesday, when General Petraeus and Ambassador Crocker testify to Congress. They'll be on Capitol Hill.

Then later in the week, the president himself has to send a formal written report up to Capitol Hill at the end of the week to give them an update on how the surge is doing on the ground. So this prime time address would likely be in conjunction with that report being released.

The bottom line is the goal for the president will be not just to update the American people, but to try to reset this debate over the war in Iraq just as Congress is about to debate once again whether or not there should be timelines to start withdrawing U.S. troops -- Wolf.

BLITZER: We'll see if the president accepts General Petraeus' recommendation to keep the number of troops at about 160,000, 165,000, at the same level through the spring.

Stand by for that. We're watching this story closely.

Let's go to the Democrats though on Capitol Hill. They're setting the stage for a confrontation over Iraq policy next week.

Our congressional correspondent, Dana Bash, is watching this story for us.

And there was a very powerful charge, Dana, today.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. You know, you really can't overstate, Wolf, how much of this report next week and General David Petraeus' testimony has been built up here as a pivotal moment in the Iraq war debate. Now it looks like General Petraeus will undermine Democrats' call for troop withdrawal, and Democrats are making an explosive charge.

(BEGIN VIDEOTAPE)

BASH (voice over): The Senate's number two Democrat is accusing the administration of manipulating information in its highly- anticipated Iraq report.

SEN. DICK DURBIN (D), MAJORITY WHIP: By carefully manipulating the statistics, the Bush/Petraeus report will try to persuade us that violence in Iraq is decreasing and the surge is working.

BASH: Senator Dick Durbin says he's been in e-mail contact with civilian employees gathering data on Iraq progress.

DURBIN: Some of them I correspond with almost on a daily basis. And when they send a discouraging report about things that were happening in Baghdad, they were reminded by their superiors that that's unacceptable -- we need a positive report. And it would be sent back for editing and changing.

Now, that's a fact.

BASH: General David Petraeus is expected to testify next week that the troop surge has produced progress on the ground. Democrats are engaged in a coordinated effort to minimize the impact of that testimony, which could undermine their ability to convince wavering Republicans to vote for troop withdrawal.

The Senate's top Democrat got personal. He questioned Petraeus' credibility.

SEN. HARRY REID (D-NV), MAJORITY LEADER: He's made a number of statements over the years that have not proven to be factual. I have every belief that this good man, General Petraeus, will give us what he feels is the right thing to do in this report. It is now not his report, it's President Bush's report.

(END VIDEOTAPE)

BASH: And a Republican leadership aide responded to all this saying that this is a clear attempt by Democrats to try to undermine the witness. He said the problem, this Republican source said, is that David Petraeus' approval rating is four times higher, Wolf, than Democrats here in Congress.

BLITZER: What a week setting up for next week.

Thanks very much.

Dana Bash on the Hill.

Heading into that make-or-break week in the political debate over Iraq, no troop reduction we're now told until the spring. How will that change the dynamic on the campaign trail?

J.C. Watts and Stephanie Cutter, they're standing by for our "Strategy Session".

But up next, Republican presidential candidate Fred Thompson on the failures in Iraq and who should be held accountable for failing to catch Osama bin Laden. He spoke to our John King. That interview coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More now on the breaking news we're following this hour, a video apparently of Osama bin Laden. It's now out.

It's a stark reminder of the ongoing terror threat six years after the 9/11 attacks. And a reminder that the al Qaeda leader still is a very much wanted man.

Some of the 2008 presidential candidates are eager to talk about the approaching 9/11 anniversary.

Our senior political analyst, Bill Schneider, is standing by, he's watching this. What are the candidates saying, Bill, about the lessons of 9/11?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, they're talking about how the country can be better prepared strategically and how the Democrats can be better prepared politically.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): Republicans are sending a clear signal. They want the 2008 election to be about the war on terror, just like the 2004 election.

RUDY GIULIANI (R) PRESIDENTIAL CANDIDATE: Being on offense against terrorism, unlike the Democrats, who are on defense against terrorism.

SCHNEIDER: Rudy Giuliani is the Republicans' national front- runner, and he claims fighting terrorism as his issue.

GIULIANI: In this era of the terrorist war on us, I think we should call it the terrorist war on us, or, if we want, the Islamic terrorist war on us.

SCHNEIDER: But this Democratic candidate, the same one who once called the global war on terror a bumper sticker slogan, sounded anything but defensive.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: The results are in on George Bush's so-called global war on terror. And it's not just a failure, it is a double-edged failure.

SCHNEIDER: John Edwards proposed an aggressive new policy against terrorists.

EDWARDS: Instead of Cold War institutions designed to win traditional wars and protect traditional borders, we need new institutions designed to share intelligence, cooperate across borders, and take out small, hostile groups.

SCHNEIDER: Organized around a new alliance.

EDWARDS: A new multilateral organization called the Counterterrorism and Intelligence Treaty Organization.

SCHNEIDER: Republicans are certain to argue they have made the country safer.

GIULIANI: All you have to do is pick up this morning's newspapers and you can see that that same movement and same group of people that killed so many people on September 11th were attempting to do the same thing in Germany.

SCHNEIDER: That shows multi-lateralism works, Edwards argued, even though it is usually derided by the Bush administration.

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

SCHNEIDER: Edwards' answer?

EDWARDS: Some running for the Democratic nomination have even argued that the Bush/Cheney approach has made us safer. It has not.

(END VIDEOTAPE)

SCHNEIDER: Edwards' message is, if the Republicans want to refight the 2004 campaign, bring them on -- Wolf.

BLITZER: All right, Bill, thanks very much.

Bill Schneider reporting.

Let's turn now to the volatile financial markets and the ripple effect through the economy.

The Treasury secretary, Hank Paulson, saying today it will take time for the markets to work through the current credit crunch and that some firms simply won't make it.

Meantime, the government reports employers cut jobs last month for the first time in four years. Payrolls shrank in August by 4,000 jobs.

And when you throw in the current housing slump, there are growing fears the economy could be taking a dramatic turn for the worse.

CNN's Susan Lisovicz is on Wall Street for us.

(BUSINESS REPORT)

BLITZER: Fred Thompson launching his presidential campaign with a bus ride through Iowa and a one-on-one interview with our own John King. Is the Republican contender living up to expectations?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some news happening today here in THE SITUATION ROOM, but let's go to what some are calling a dirty -- dirty little secret in Iraq, the prospect that the nation will wind up in three, maybe even more, volatile pieces.

Tom Foreman is here. He's the host of CNN's "THIS WEEK AT WAR."

What's the likelihood of there being not one Iraq, but at least three separate Iraqs?

TOM FOREMAN, CNN CORRESPONDENT: Well, you know, a year ago, the administration would have said that is the last thing that they want. But, more and more, our "WEEK AT WAR" experts are saying, it looks like that is what happening.

Let's look at a neighborhood here and get a sense of this. This is a mixed neighborhood, not far from Sadr City, mixed Sunni and Shia. To get peace on these streets, to let people go back to their jobs, you have to remember that the surge involves more than just more troops. It involves a strategy.

How do they calm down a neighborhood like this? Well, you move a short distance away, and you can see how they do it. Here is the Army's 1st Cavalry over here. They have set up base here. You can see their Humvees around all this. And they -- they extend their influence out into the neighborhood and say, we are here to provide security.

A year ago, you had a base like this, you had about 25 or so of these around Baghdad. The surge has involved more than doubling that number and spreading the influence out into these neighborhoods, getting more soldiers on the streets to calm everything down.

That's what General Petraeus is going to say is working. But here's the puzzle. How do you do that over all this area? And, increasingly, what we're hearing is, you just can't do it. But what you might be able to do is go to the plan that people said they never wanted, which is a partitioned Iraq, where you really have, essentially, a Shia nation, a Sunni nation, and a Kurdish nation, and, within them, you get stability. And then you start talking much more seriously about, now, how do we negotiate peace between stable neighborhoods, instead of trying to calm everything down at once.

Nobody said they wanted that. But, as I mentioned, our "WEEK AT WAR" experts are increasingly saying this is what's starting to shape up anyway, and, if we have to look for a solution in Iraq, if their government can't solve the political issues, and we can't figure out in this country whether we're staying or going, this may be part of the solution.

Obviously, some people on the political trail have been talking about this. Joe Biden has said this all along. But now you're hearing other campaigns saying, well, maybe we have to look at this, even if it's not exactly what we want or exactly what the Iraqis want.

BLITZER: Well, given the displacement of the refugees...

FOREMAN: Sure.

BLITZER: ... internally and externally, there's been, in effect, an ethnic cleansing of a lot of these areas, Sunnis leaving Shia areas, Shia leaving Sunni areas.

FOREMAN: The partition has happened, according to some people. It's already that way.

(CROSSTALK)

BLITZER: ... the former U.S. ambassador, has written a whole book, saying it's already happened, and there could be a third and maybe a fourth area in and around Baghdad where there are these mixed communities.

FOREMAN: Exactly. Exactly.

BLITZER: All right. We're watching the story with Tom Foreman.

Tom, thanks very much.

This important note to our viewers : Tom's going to have a lot more on this coming up this weekend on "THIS WEEK AT WAR." It airs Saturday night, 7:00 p.m. Eastern, Sunday, replayed, 1:00 p.m. Eastern, right after "LATE EDITION." "THIS WEEK AT WAR," you're going to want to see it this weekend.

Carol Costello is joining us now with a closer look at some other incoming stories making news -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

A squadron of 10 airplanes and two helicopters have spent another day scouring the vast and rugged Nevada wilderness for Steve Fossett, but still no sign of the record-breaking adventurer or his plane. Fossett has been missing since Monday, when he took off from a private airstrip southeast of Reno.

Three suspects now in custody -- German authorities are running down a list of other people they think are linked to a terror plot more deadly than the London and Madrid attacks. They're focusing on finding seven suspects, both in and outside Germany. Germany admits a tipoff from U.S. authorities helped uncover the plot. The case is triggering calls for tougher security laws in Germany.

A federal judge has ruled Iran must pay $2.5 billion to the families of 241 U.S. service members killed in the 1983 bombing of a Marine barracks in Beirut. Iran had been accused of supporting the militant group Hezbollah, which carried out the suicide attack. However, Iran denies any responsibility for it. The ruling allows relatives to try to collect Iranian assets from various sources around the world, which, of course, won't be easy.

And Democratic Congressman William Jefferson is accusing the Justice Department of bringing corruption charges against him in Virginia to reduce the chances of getting black jurors. Blacks make up about 11 percent of Virginia's population. Jefferson wants the case moved to Washington, D.C. He denies charges of soliciting more than $500,000 in bribes, brokering deals in Africa.

You may recall authorities say they found about $90,000 in his freezer.

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

BLITZER: Thanks very much, Carol, for that.

From Democratic donor to bail-jumping fugitive -- now Norman Hsu's second stab at life on the lam has come to a screeching halt. He was arrested in Colorado, after failing to show in court to face a 1991 felony theft conviction. Hsu turned himself in last week to authorities in California, where he had been a fugitive for 15 years. He apparently was planning to flee again.

He was taken to Saint Mary's Hospital late yesterday, after he got sick on an Amtrak train. His next stop, once he's out of the hospital, jail.

Democrats, including Senator Hillary Clinton, among others, they're returning or the giving Hsu's contributions to charity.

Voters still are getting to know Senator Barack Obama, with some new help now from his wife, Michelle. Is she telling the public a little too much, though? Mrs. Obama is learning lessons Hillary Clinton learned the hard way. We're going to tell you what is going on.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Just days into his presidential campaign, Republican Fred Thompson is on a roll, literally. He's cruising across Iowa in his campaign bus.

And our chief national correspondent, John King, is along for the ride, got a rare on-board interview with Senator Thompson just a little while ago.

John, give us some of the headlines.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, we were rolling across the Iowa countryside. National security dominated our discussion.

Senator Thompson, perhaps most among the Republican candidates, is robust in defending the president's decision to invade Iraq and topple the government of Saddam Hussein. He also significantly plays down the president's failure to capture or kill Osama bin Laden.

(BEGIN VIDEOTAPE)

KING: To what degree should the American people hold the president of the United States responsible for the fact that bin Laden is still at large six years later?

FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: I think bin Laden is more of a symbolism than he is anything else. I think he shows and demonstrates to people once again that we're in a global war.

Bin Laden being in the mountains of Afghanistan or -- or Pakistan is not as important as the fact that there's probably al Qaeda operatives inside the United States of America. KING: But, if he is still at large, and there are al Qaeda operatives in the United States that we should be worried about, are those who said Iraq was a diversion, that, even if it was the right thing to do, it should have waited until bin Laden was caught, or at least al Qaeda was further damaged and decapitated, are they right?

THOMPSON: It's not an either/or situation. Sometimes, you -- you don't have a choice.

Saddam Hussein was on the cusp of having defeated the United Nations and the free world and the United States. He had certainly had weapons of mass destruction and had the capability of reviving his nuclear program. In light of what Iran is doing today with their nuclear program, he certainly would have gotten back on the stick and -- and gotten there again...

(CROSSTALK)

KING: But, at that moment in time, Senator, there was no global terrorism emanating from Iraq. So, even if you thought it was a good idea to get him, there are those who say, get bin Laden first, kill al Qaeda first. Then get him.

THOMPSON: You -- you're -- you're not served up these issues one at a time. They -- they come when they come, and you have to -- you have to deal with them.

Some might say, stop efforts in other parts of the world and concentrate on Iraq. We don't have that luxury.

KING: ... the word unity emblazoned on the side of your bus here, and you bemoan in your speeches that the country is so divided over the Iraq War, that it makes it hard to look forward, to have a strategy going forward.

The Democrats are certainly partisan when it comes to the war, but how responsible, how much responsibility do the Republicans bear for that divide in the country, given the campaigns they ran against the Democrats in 2000, 2002, 2002 and 2004 especially, and again in 2006, saying the Democrats are soft and weak?

THOMPSON: You know, it would take a -- a long time to properly assess responsibility of this back-and-forth that's been going on for some time.

But I think the thing that a fellow running for president needs to think about, he's going to be president of all the people. No one president can satisfactorily address these problems. No one political party can.

KING: Town hall meeting just now, a gentleman got up and asked you what you thought the government's role was in dealing with what he called deviancy, homosexuality. And you said your view as a president would be, the government has a limited role, that the government should not favor anybody, nor discriminate against anybody.

What is your personal view? Is homosexuality deviant behavior?

THOMPSON: I'm not going to pass judgment on several million of my fellow citizens.

I think that anybody that knows me knows how I feel about, you know, the importance of the family, the importance of -- of marriage, the importance of a traditional marriage, and -- and that sort of thing. It's the thing that my parents wanted for me. It's the thing that I want for my children.

But it goes back to the unity that we were talking about, I guess. As president of the United States, one should not go out of their way to castigate or pass judgment publicly on a large segment of people that you're saying to, I'm now your president, work with me. I don't think that's right. And I won't do that.

KING: Let me ask you lastly, you mentioned China. You did work with the administration on China policy, with a focus more on the military buildup and what the United States should do about that.

I want to ask you more broadly about your thoughts on China. You're a parent of two young children. The country has just been besieged with these headlines in recent weeks about these toys, lead paint coming in, toothpaste coming in, all sorts of products coming in that are clearly below the safety threshold of what the American people think they should be getting when they go to the marketplace.

(CROSSTALK)

THOMPSON: Exactly. Exactly.

KING: What is the role of our government in dealing with that? And has the administration been too cozy, too friendly with China in the economic relationship, and not had a safety barrier up?

THOMPSON: Well, I have always been of two views about China.

I have always thought we ought to trade with China. I have seen nothing wrong with the average working people in this country being able to buy stuff for their kids that were less expensive than other stuff that they could get. I think it's, overall, good.

But we have been lax for many years in terms of selling them high technology and things that they could use for purposes they shouldn't be using it, just for business reasons, for economic reasons. And that's been wrong.

I'm wondering now whether or not some of that business and this laxative liberalization that I fought against when I was there is pouring over into other areas. We have got to crack down on these Chinese companies. We have got to make sure that our own companies are demanding the right things from these companies also.

And we have got to hold the Chinese government ultimately responsible. The oldest trick in the book for the Chinese government, when one of their companies get caught selling high technology or -- or materials that can be used in weapons of mass destruction to a -- to a dangerous nation, is that, well, you know, we will certainly do something about that. We had no idea this was going on.

The Chinese government knows everything that's going on in that country. And they ultimately have to be held responsible. And there are plenty of levers to -- to -- to pull on that.

(END VIDEOTAPE)

KING: On a more personal note, I asked the Senator what it's like on this, the second day of his campaign, to ride on a bus that has the campaign stuff up front, the news on the TV up in the front of the bus, but, in the back, Wolf, a diaper-changing table for Senator Thompson's 10-month-old son, up on the TV in the back, the children's program "Dora the Explorer" for his nearly-4-year-old daughter.

I said, "Senator, how does that feel?"

He said -- let out a big laugh and said, "It's just like home" -- Wolf.

(LAUGHTER)

BLITZER: They all got their buses nowadays.

All right, John, doing a good job for us, as usual, thanks very much.

Both sides of the presidential field are talking about the war on terror.

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Are we any closer to getting rid of terrorism than we were six years ago? And the answer to that is no.

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: The terrorist war on America still goes on. The war that brought about that attack is still going on.

(END VIDEO CLIP)

BLITZER: But, with the release of a new bin Laden tape, is the war on terror a winning issue for either side?

And no troop reduction until the spring of 2008. How does that bit of news change the race for the White House? All that coming up. Stephanie Cutter and J.C. Watts, they are standing by live for our "Strategy Session" -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's the headline today: no reduction in troop levels until next spring. That's what we're hearing General Petraeus plans to recommend to President Bush. But how will that play out with the American public?

We are going to talk about that and more in our "Strategy Session" right now. We're joined by former Republican Congresswoman J.C. Watts and Democratic strategist Stephanie Cutter.

Stephanie, if -- if the president listens to General Petraeus -- and, by all -- everything he said, we are going to listen to the commanders -- so, I don't doubt at all that he will come up with some other idea -- the president listens to General Petraeus -- the 160,000, 165,000 troops are going to remain in Iraq, at least through next March or April.

What do the Democrats do then?

STEPHANIE CUTTER, DEMOCRATIC STRATEGIST: Well, I think what you will see is, it will finally give some of the moderate Republicans reason to break from the president and join with the -- with the Democrats in trying to pass some reforms to get our troops out of there in a reasonable way.

BLITZER: But that would just be mostly a symbolic stance.

CUTTER: Not necessarily.

BLITZER: It's not going to necessarily be binding on the president.

CUTTER: Well, it could. It depends whether or not Republicans will stand up to the president and do the right thing for -- and do what's in the best interests -- interests of the country.

BLITZER: The key numbers are 60 and 67 in the U.S. Senate, J.C. As you know, they need 60 votes to beat a filibuster, and they need 67 to override a presidential veto. There are going to have to be a lot of Republicans who will join with the Democrats, if the -- if they're going to do that.

J.C. WATTS, CNN POLITICAL ANALYST: There will have to be a lot of Republicans, Wolf, and I don't think there will be.

I think there will be Republicans that will -- if you have got the president saying stay the course or don't -- don't bring home, you know, 4,000 or 5,000 troops, that's one thing. But, if you have got the general on the ground, which everybody, for the most part, has been standing behind, or been taking that position, let's see what General Petraeus is going to say.

If he's saying, let's stay there until March, April, I think it makes it very difficult for senators. And I think it puts a lot of pressure on the Democrats as well for them to say, let's withdraw.

BLITZER: What about this new tape, the Osama bin Laden tape? The CIA, the intelligence community, they're trying to authenticate that it is, in fact, bin Laden. He's got a darker beard than he did three years ago, just before the U.S. presidential election, in the last videotape that was released. How does this play out politically, though?

CUTTER: Well, policy-wise, it reminds us that he's a real threat, he's still out there, and he's got his sights on the United States, and he's rebuilt his troops.

Politically, you know -- you know, Wolf, that, at one time, Democrats would have been shaking in their boots when a tape like this came out. In the 2004 election, the Friday before everybody voted, it -- it probably tilted the election back to Bush.

But, today, it's a much different story. You know, I think it's clear that the administration took their eye off the ball. It reminds people that al Qaeda and Osama bin Laden are still out there. Even the president's own intelligence experts has -- have concluded that al Qaeda has rebuilt their troops and are a greater danger today than they ever have been.

BLITZER: Yes, because, if -- if you take a look at the recent polls that we have done, "Will the U.S. capture or kill bin Laden?" J.C., the numbers have gone down -- 2001, 78 percent thought the U.S. would. It's gone down to 66, 58. Now only 42 percent believe that the U.S. eventually will capture or kill bin Laden.

Does a tape like this, when it comes out, sort of advertise, as Democrats say, the president's failure to get the job done?

WATTS: Well, Wolf, I think, politically, it -- it's a wash, because I think -- I think, really, many Americans really do have some problems with Democrats and when where they stand on security issues, so they say, well, do we want Democrats going after Osama bin Laden?

But, then, you -- on the flip side of that coin, you have got a Republican administration, for the last four years, they hadn't captured Osama bin Laden. So, who wins that fight? So, I think...

(CROSSTALK)

BLITZER: Because if the American public is nervous and scared about another 9/11, the -- the general sense has always been they're going to go to a Rudy Giuliani or someone who is perceived as being really tough on this issue.

CUTTER: Mm-hmm. Well, possibly.

I mean, Rudy Giuliani probably is the one person that would fall under that category. I -- I don't think that Democrats have a security problem anymore. I think that we have closed that security gap. We won the 2006 election primarily on security. And I think that's going to carry us through in 2008. And we have got very strong candidates out there, who have better plans on terror and better plans on Iraq than any of the Republicans do.

(CROSSTALK)

WATTS: Which, Stephanie, Wolf, I think, again, it puts Democrats in a real bind, if they're saying, bring the troops home, but we want to go get Osama bin Laden.

So, again, it puts them in somewhat of a quagmire.

CUTTER: Except for the fact -- it is a quagmire, except for the fact that they want to bring the troops home because we don't have any troops to go after Osama bin Laden. They're all stuck in Iraq, 160,000 of them, which is not -- you know, even General Jones said yesterday that having that U.S. footprint on Iraq puts us in danger. And it doesn't...

BLITZER: In other areas.

But I want to quickly get your thought. A lot of people are saying Fred Thompson's entry, formal entry into the Republican presidential contest, J.C., winds up helping Rudy Giuliani and hurting Mitt Romney, because of the conservative base is now sort of divided.

Do you agree with that?

WATTS: I think, if you look at it in those terms, yes.

But I'm not -- I don't think anyone is certain where -- where Fred's going to get his votes from. I think the magic number for Republicans is for any Republican to get above that 25 percent, 27 percent benchmark. And when you look at the pie, if he takes a little bit from Rudy, take a little bit from everybody, I'm not so sure -- I'm sure he probably ends up with 20 percent, and nobody gets above the 25 percent benchmark.

Where does he get the votes? That remains to be seen.

BLITZER: We will talk more about this some more down the road.

Guys, thanks for coming in, Stephanie Cutter, J.C. Watts. Good discussion.

It's a life-and-death question. How safe do you feel flying six years after 9/11? Jack Cafferty standing by with your e-mail.

Plus, we're learning more now about that just-released videotape. It's apparently Osama bin Laden with a dark beard, not a white beard anymore. Our Homeland Security correspondent, Jeanne Meserve, standing by. She is going to be back with more on this breaking news, what we're learning right now.

Plus, the search for a missing girl in Portugal, and her mother now reportedly -- reportedly -- under pressure to confess. What a story. What a heartbreak.

All that coming up -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Jack Cafferty -- he's watching a lot of news unfold -- with "The Cafferty File."

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: How safe do you feel flying six years after 9/11?

And the question is based on a report that we talked about early in the hour where the cargo that goes into the bellies of passenger planes, it's not being screened to the degree that perhaps it should be or could be.

Mike writes from Minnesota: "I don't feel safe at all flying today. Our country has made itself a larger target because of its foreign policy. And this has only increased our enemies' desire to harm us. There's no doubt our current airline security is inadequate. Until 100 percent of all luggage, persons, and personnel is screened, there will be no way to assure that airline travel will be safe."

William in North Carolina: "Overreaction by the airline industry has caused me so much misery, I totally quit flying. It seemed as if they were more worried about cough syrup, toothpaste, and shampoo than the mechanical condition of the airplane. Now that I don't fly anymore, I feel 100 percent safe and a heck of a lot happier."

Martin in Ohio: "I have been a pilot for 20 years. I think it's safe. To make it safer, have flights for foreigners and separate flights for Americans."

Olyn writes -- he's an Iraqi contractor -- "Mr. Cafferty, I was feeling just fine about flying until you sat there telling Osama bin Laden, again, about the many holes in the safety net that the industry and government have put into place since 9/11. I'm just so tired of the press exposing my unprotected backside to people who wish to stick it to me. Could you guys stop it?"

Bill in Redmond, Washington, say: "Statistically speaking, it's still the safest way to travel. I'm more worried about bad drives than a terrorist blowing up my airplane."

And David in Denton, Texas, says: "Scaring the hell out of the public and doing nothing about it is par for the administration. I don't fly. Like you, I have been everywhere, done everything. I don't worry about security. What does worry me, though, is your calling Wolf a handsome man" -- Wolf.

BLITZER: That worries me a little bit, too, Jack.

(LAUGHTER)

BLITZER: Thanks very much.

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

Happening now: Osama bin Laden's apparent message for Americans.

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