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CNN INSIDE POLITICS

Meeting in Ur Held to Begin Talks on New Iraqi Leadership

Aired April 15, 2003 - 16:00   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: A meeting in an ancient city to plan Iraq's future. But despite promises from Washington, fear in the streets that the U.S. wants to rule Iraq.

Twelve-year-old Ali wants new arms. The badly burned Iraqi boy lost his in the battle for Baghdad.

UNIDENTIFIED MALE: He is still in critical situations.

ANNOUNCER: Now, hope for one of the younger casualties of war.

President Bush says victory in Iraq is certain, but not complete.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: What we begin, we will finish.

ANNOUNCER: With the major battles over, worries about the other war.

UNIDENTIFIED MALE: We still know that the terrorists would like to take another bite of the capital or the White House.

ANNOUNCER: Will Washington lower the nation's terror threat level from Orange to Yellow?

CNN live this hour, Judy Woodruff reports from Washington with correspondents from around the world.

A special edition of INSIDE POLITICS: "The War in Iraq," starts right now.

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Hello. I'm Judy Woodruff in Washington.

With the war in Iraq winding down, President Bush is turning the spotlight back to the economy, challenging the Republican-controlled Congress, which has whittled away his original tax cut plan.

(BEGIN VIDEO CLIP)

BUSH: Now the Congress must focus on a robust and effective growth package. We need at least $550 billion in that package, because the more tax relief that goes to the American people, the more jobs we will create in this economy.

(END VIDEO CLIP)

WOODRUFF: Meanwhile, Secretary of State Colin Powell says the United States has no plans for regime change in Syria, despite strong accusations against Damascus in recent days by the administration.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: We hope that Syria understands now that there is a new environment in the region with the end of the regime of Saddam Hussein, and that Syria will reconsider its policies of past years and understand that there are better choices they can make than the choices it has made in the past.

(END VIDEO CLIP)

WOODRUFF: CNN has learned an Iraqi CIA operative played a vital role in the rescue of former POW Private Jessica Lynch.

Pentagon correspondent Barbara Starr will tell us what he did.

And a 12-year-old Iraqi boy who lost his arms and both parents in a bombing raid, has been flown to Kuwait for treatment. His story has captured world attention. We'll have a live update this hour.

In Baghdad, we are seeing some very small steps toward recovery. Some shops and restaurants are opened, and health care workers are returning to the city's hospitals. But normalcy still is very far off. The streets are littered with debris from days of looting and chaos. U.S. forces are only now trying to implement some sense of law and order with some Iraqi help.

CNN's Christiane Amanpour is live in the Iraqi capital. She joins us now with the very latest. Hello, Christiane.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Judy, the people here, certainly in Baghdad, are looking for not only a political future, They want to know what shape their future is going to take. But also, obviously, first and foremost, as they've been telling us for the last week or so, security in their capital. And the Marines are having to fill this security vacuum.

Now today there was, it began with the Marines who were billeted around this hotel, coming in in masks and with weapons drawn to the Palestine Hotel and basically going room to room. In some cases they knocked on the doors. If the doors weren't answered they forced the doors.

In any event, they said they were looking for weapons and perhaps people who were, quote, "unfriendly to the U.S. presence here." They didn't find weapons in the hotel. They were quite suspicious about perhaps some of the people who were in the hotel, but they did say that they found weapons in another location, a little bit away from the hotel, boxes of weapons and ammunition.

Now, at the same time, they are trying not only to get out and patrol the street, they are trying to get the Iraqi police back on its feet. But that's taking a little longer than expected, although quite a few Iraqi policemen have tried to report back to duty, but there is quite a lot of screening and other procedures that need to happen.

And the Marines, also, certainly, in this part of the city, taking on some civil affairs duties. For instance, trying to gather the water administrators and engineers to put back full water pressure for the city, trying, of course, to get the electricity back working, because for many people, the lack of electricity simply adds to the lack of security and the feeling of vulnerability here, particularly at night.

Now, Marines who have are billeted in various places around the city, today we found them at one of Saddam Hussein's palaces that was used by one of his former wives. They were there relaxing, taking some time off from their duties on the streets. At the same time, though, it shouldn't be forgotten there is still heightened concerns for their own security. They handed out a flyer which they had printed in both English and Arabic today, calling on Iraqis to stay indoors during the nighttime hours, saying that there were other elements in Baghdad who would threaten the United States forces.

And the U.S. forces didn't want to mistake innocent Iraqis for those hostile forces, saying that any Iraqis that approached U.S. positions should do so in a very obvious and non-threatening manner, announce themselves and make sure that they wouldn't look like they were carrying anything that could be mistaken for a weapon. So, still quite a tense situation in some parts of the city. Some shops, very few, starting to open again and a couple of restaurants here and there -- Judy.

WOODRUFF: Christiane, what are you picking up at this point in terms of ordinary Iraqi people and their view, their attitude towards Americans?

AMANPOUR: Well, it's mixed. Many people say, thank you very much. We're very happy to be liberated. There is still a lot of good feelings towards the Marines and the soldiers on the street. Waves, thumbs up, this and that. Others are concerned, really. They are really concerned about what shape their future will take. They keep telling us we want Iraq to be run by the Iraqis. They say that they are very concerned about security.

And, obviously, they look to the only powers that exist here, which are the U.S. forces now to establish a certain amount of security and daily normalcy. And it's a very big job, and it's a big job for the U.S. forces here. And it's a big job for the people to sort of see and try to find where is the liberty or the liberation dividend, so to speak.

WOODRUFF: All right. Christiane Amanpour reporting for us live from Baghdad, where it is well into the evening. I think it's about midnight now, or just after. Thanks very much, Christiane. Meanwhile, in southern Iraq, a first step was taken toward implementing a new government. Hand-picked representatives of Iraq's Shiite, Sunni and Kurd communities all met in the ancient biblical city of Ur today. They discussed what shape the new government should take. They agreed to work toward a democratic federal system built on respect for diversity, according to a statement issued by U.S. Central Command. Another meeting is scheduled next week.

A large group of Shiite Muslims opposed today's meeting, however. They marched by the thousands in nearby Nasiriya to protest. It is a sign of just how difficult it's going to be to build a democracy in a country fractured by ethnic and religious divisions.

We get more now from CNN's John Vause in Nasiriya.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): On the streets of Nasiriya, rumor, and half-truths were announced to bring out thousands in protests. The Shiites, they said, were being deliberately ignored, their concerns going unheard.

UNIDENTIFIED MALE: Iraq's for Iraq. My oil for my people.

VAUSE: True, some Shiite groups were not represented at this, the first of many town meetings. But the U.S. says only because those Shiites decided to boycott. Some did, in fact, turn up. And there were rumors, like the one this protest organizer told me.

UNIDENTIFIED MALE (through translator): The Americans came for the oil, he said, already a pipeline has been cleared from Kirkuk to Israel. Everywhere here there are deep divisions and mistrust of American intentions. The local Imam told me ...

UNIDENTIFIED MALE (through translator): We do not trust them when they say they will install an Iraqi leader, he says. Iraqis can control their own affairs.

VAUSE: But for others, like Breezem Sual (ph) the only thing that really matters right now is safety for his family. "It doesn't matter if the Americans come or go," he says. "I need peace. I need security."

Their home was badly damaged when a coalition air strike hit the Ba'ath party headquarters across the street. And then the looters moved in and took everything out. Politics, it seems, doesn't mean much when all you have left is an old, small side table to sit on.

Still, at one of Nasiriya's many barbershops, the talk was about that meeting just a few miles down the road. I asked Jabar (ph) about Ahmed Chalabi, the leader of the exiled National Congress. He's seen him once, he says. "We want one Iraq," he says, "not divided. One Iraq for all people." It's a simple idea, but sometimes the simplest things can be the hardest.

(on camera): This is as close as the people of Nasiriya can get to this meeting. It's being held at an air base about a mile up the road, and that's the problem. Just a small number of handpicked Iraqis really know what's going on, and so for the rest, a flurry of rumors has filled the void.

John Vause, CNN, Nasiriya.

(END VIDEOTAPE)

WOODRUFF: A great deal to sort out.

Well, vocal opponents of the war in Iraq may be seeking to make amends with Washington. White House officials say the French president Jacques Chirac spoke to President Bush by telephone today for the first since their falling out over the war in Iraq. The two were said to talk for about 20 minutes.

And, in Germany, political observers say that a meeting between German Chancellor Gerhard Schroeder and British Prime Minister Tony Blair also focused on patching relations. Germany and France continue to push for a central role for the United Nations in rebuilding Iraq.

Still ahead, the U.S. attention turns to Syria. The heat is on. Damascus is feeling it. We'll have a report.

(COMMERCIAL BREAK)

WOODRUFF: The U.S. charges against Syria have become a drumbeat in recent days, and Damascus is busy denying them. Syria's deputy ambassador to the United States is calling the charges from Washington a campaign of "misinformation and disinformation." CNN's Sheila MacVicar reports from the Syrian capital.

(BEGIN VIDEOTAPE)

SHEILA MACVICAR, CNN CORRESPONDENT (voice-over): There is a steady drum beat.

BUSH: First things first. We're in Iraq now. The second thing about Syria is that we expect cooperation. And I'm hopeful we'll receive cooperation.

DONALD RUMSFELD, DEFENSE SECRETARY: We have seen a chemical weapons test in Syria over the past 12, 15 months. And, second, that we have intelligence that shows that Syria has allowed Syrians and others to come across the border into Iraq.

POWELL: I would expect that Syrian authorities would do everything they could not to provide these people safe haven.

MACVICAR: A litany of allegations and accusations that on the streets of Damascus leaves people angry and feeling threatened. There's not much in the Syrian newspapers about what the U.S. administration is saying, but Syrians listen to radio and watch TV.

"We always thought that when the U.S. finished with Iraq," he says, "they would start to make accusations against Syria." "We're at a loss," says this man, "Why are the Americans treating us like this?"

UNIDENTIFIED MALE: Sometimes, they don't know what they want.

MACVICAR: Sometimes even the government here seems bewildered by what the U.S. administration says.

UNIDENTIFIED MALE: We have no problem if you give us any sort of evidence, because if we say to you no, you are not believing us because this is the third, fourth statement that you are directing against Syria.

MACVICAR: Out here in the Syrian dessert the border with Iraq, sealed now, at least officially, after U.S. pressure. The Syrians insist no members of Saddam Hussein's regime have entered Syria, and Western diplomats in Damascus agree, saying the intelligence on which that allegation is based is, quote, "dubious."

(on camera): But there are serious questions as Britain's foreign secretary has said that will require serious answers. Questions about Syria's covert chemical weapons program, about it's continuing support for groups labeled as terrorist organizations like Hamas or Hezbollah. Now that the U.S. administration has the attention of the Syrians, what are they going to ask them to do?

Sheila MacVicar, CNN, Damascus.

(END VIDEOTAPE)

WOODRUFF: A few hours ago I talked with Edward Djerejian, a former U.S. ambassador to Syria, now director of the Baker Institute for Public Policy at Rice University. I started by asking Djerejian what is the principal diplomatic challenge for the U.S. now inside Iraq.

(BEGIN VIDEOTAPE)

EDWARD DJEREJIAN, BAKER INST. FOR PUBLIC POLICY: Well, I think the strategic challenge we have now is to really facilitate the formation of a broadly based representative government in Iraq, in which all the major constituencies, the Sunnis, the Kurds, the Shias, the Chaldeans, the Assyrians are represented. And that really means you can't do it only from above by parachuting in people from outside. Outsiders will have a role to play, but most of it I see coming from Iraqis inside. And the Nasiriya meeting today is a sign of how an effort to being made to get a local and regional leaderships to play that role.

But, Judy, the key thing in my eyes, whether this is going to be successful -- and I think it's critical to win the peace after we've won the war -- is to be able to have a government come and place in which the key parties will have real decision-making -- political, economic, cultural. If they don't have that, they may split. They may go their own way with terrible consequences in terms of the territorial integrity of Iraq. WOODRUFF: A lot is at stake.

DJEREJIAN: A lot is at stake.

WOODRUFF: Let me ask you now about Syria. Stepped up rhetoric on the part of the Bush administration. The U.N. Secretary-General Kofi Annan is saying we need to be careful here. He's talking about the possibility of further instability in the region. What is it that the Bush administration wants from Syria, do you think?

DJEREJIAN: Well, I think in the first instance when Secretary of Defense Rumsfeld, he sort of placed the shot across the bow of both Syria and Iran in terms of saying, Iran and Damascus have to control their borders. We are waging a war in Iraq. We see things coming across the border in terms of people, equipment. This is intolerable to the United States. Those borders must be controlled. They must be closed. That's the first element of the, I believe, the U.S. position.

But beyond that, what's important is that the -- that Syria, countries like Syria and Iran look at the change in altered landscape in the region after the war has been waged in Iraq, assess their interest and then see how they are going to be reengage with the other countries in the region and with us.

WOODRUFF: Is Syria threatened right now by the United States?

DJEREJIAN: Well, they will not claim to be threatened, but I think they are concerned by the political signals that they are getting very clearly from Washington.

WOODRUFF: Is it a good idea right now for the U.S., the Bush administration to be pressing Syria as hard as it is to clean up its act?

DJEREJIAN: Well, I think the control of the border is very important. We're still waging military actions in Iraq. Control of the border is important. But I'm looking ahead. And in looking ahead, we have a lot of unfinished business we have to do, and Syria will play a key role in that, including the Middle East peace process. There will not be a comprehensive peace between Israel and the Arabs without Syria and Lebanon after the Palestinian thing. So, that's one element.

The other element is, the issue of terrorism, the global campaign against terrorism. And we have, again, in the past, through what I call muscular diplomacy, narrowed a lot of these issues and come to favorable results. Syria joined us in the Desert Storm, both politically and militarily.

WOODRUFF: And some people have forgotten that.

DJEREJIAN: And people have forgotten that. And they also were very much with us at the Madrid Peace Conference. So there's important work that we can do with Syria.

WOODRUFF: And you're saying, the U.S. is going to need Syria going forward.

DJEREJIAN: Right. And Syria needs us. So, there's some mutual interest there.

WOODRUFF: Ed Djerejian, it's always good to see you. Thank you very much for talking with us.

DJEREJIAN: My pleasure. Thank you, Judy.

(END VIDEOTAPE)

WOODRUFF: While as governments wrangle over their roles in the Middle East, life goes on at a more personal level. Coming up, political discussion mean little to those in the hospitals of Iraq. We'll have some of their stories when we return.

(COMMERCIAL BREAK)

(NEWSBREAK)

WOODRUFF: Well, while a 9-year-old boy named Ali is going to Kuwait for medical help, you've been hearing his story this day. Many other children are left suffering without adequate attention in Baghdad and other places in Iraq. One such child is a 17-year-old who suffered burns on her face.

ITN's Tim Rogers brings us up to date on what's being done to help children like her.

(BEGIN VIDEOTAPE)

TIM ROGERS, ITN CORRESPONDENT (voice-over): Death Angel, an American tank, guards the Baghdad hospital where patients find comfort but little care. The doctors here told us that Hannan (ph), the girl we brought in yesterday had been sent home because there was nothing more they could do. In this place, desperation brings people in, and it takes them out.

When we did find Hannan, it was at another hospital. Her spirits lifted and dosed with morphine. She was pleased to see us, but still unable to find the care she needs. She still has the bandages the Americans Marines wrapped around her when her father appealed to them for help. But the doctors here say any further treatment is impossible.

This is Hannan as she was before, 17-years-old and in her school uniform. Her father took me to see their home where she was burned on the second day of the war. He and his wife ripped off her burning nightdress to try to save her. But she was doused in burning kerosene when a lamp next to her bed fell over as a bomb blast should the house.

A bright and lively teenager before it happened, Hannan stills tries to remain cheerful. She doesn't want to frighten her younger brothers and sisters. Now she needs reconstructive surgery. But unless she can get treatment outside Iraq, she'll probably be disfigured for life.

(on camera): Hannan been given strong painkillers. But what's impressed us most about her is that she never complains. She is sitting here at home, because there's nothing more that the hospitals in Baghdad can do for her.

(voice-over): At the hospital where we found Hannan, the doctors illustrated the pressure they are under by showing us another case. This little girl, Zara Ali (ph), is 5 years old. She's just been orphaned. Her family were killed when a bomb hit their home. Covered in a healing cream, stocks of which are running out, she has 40 percent burns and will be lucky to survive.

UNIDENTIFIED MALE: I always I have -- crying about her.

ROGERS (on camera): You've been crying about her?

UNIDENTIFIED MALE: Yes.

ROGERS: No one knows exactly how many more like these there are like this, because most of the hospitals are closed. But the suffering is here and it is real. Only help from outside will make a difference.

Tim Rogers, ITV News, Baghdad.

(END VIDEOTAPE)

WOODRUFF: It's a story that breaks your heart.

Well, as we've been telling you, you've been hearing all day the story about that young 9-year-old boy who was flown to Kuwait.

As ITN's James Mates reports, though, there are others who are still struggling. Here is James Mates' report.

(BEGIN VIDEOTAPE)

JAMES MATES, ITN REPORTER (voice-over): It's an angelic face that has caught the sympathy of the world. The loss of both arms and virtually his entire family has become a powerful iconic symbol for civilian suffering in this war.

Since coming to the world's attention, he's been barely heard to complain. He still tries bravely to wave at the cameras. But courage alone may not be enough for Ali (ph), because the loss of his arms is tragic, but the 60 percent burns he's suffered could soon be fatal.

UNIDENTIFIED MALE: He's still in critical situation, since there is such big trauma, the burn of his chest and abdomen.

MATES: If the (INAUDIBLE) Ali could, within a few hours, be in a safe, sterile medical environment. His future will still be one of unimaginable difficulty and pain, but he will have a future.

Another horribly burned child, 17-year-old Hanan Ahmed (ph), who we found yesterday looking for medical attention, still awaits help from outside. Since way back on day two of this war, she's had no proper treatment for her burns. She will not get any in Baghdad. Hanan and dozens of other children in this city must get out to get treatment. They still await a guardian angel to ride to their rescue.

James Mates, ITV News, Baghdad.

(END VIDEOTAPE)

WOODRUFF: And that may have been the same young woman that we saw in the previous story.

Well, U.S. forces are pledging to do whatever they can to help the suffering children of Iraq. One U.S. Navy doctor told a British reporter that, if international agencies will come through, U.S. forces will do their part.

(BEGIN VIDEO CLIP)

DR. KEVIN MOORE, U.S. NAVY: The United States military will do all it can in its power to assist in liaisoning between NGOs, between different countries to get care to these poor, unfortunate children.

(END VIDEO CLIP)

WOODRUFF: Tough story.

Well, back here to the United States now and more domestic concerns in this country: a so-called doomsday budget plan from the mayor of the country's largest city. Coming up: New York's Michael Bloomberg promising some desperate measures for desperate times in his city.

We'll have that story, plus the latest headlines after the break.

(COMMERCIAL BREAK)

WOODRUFF: President Bush made an appearance in the White House Rose Garden today and spoke of a rosy future for the U.S. economy. His speech touched on the benefits of spending cuts and his tax cut plan. But, on the other side of the coin, there was much less optimism from the man at the forefront of the nation's largest city.

Our Maria Hinojosa reports from New York with more -- Maria, hello.

MARIA HINOJOSA, CNN CORRESPONDENT: Hello, Judy.

Well, the headlines in today's New York papers said it all: in "The New York Daily News," Mike the Knife." And here in "Newsday," he's not Bloomberg. He's "Gloomberg." These are the worst cuts for the city since the 1970s, for a city struck by the September 11 attacks and now the war economy.

Now, what we do know, Judy, is that Bloomberg's contingency plan is more than $1.5 billion in cutbacks and (AUDIO GAP) after-school programs, 30 to 40 firehouses and two city zoos would close. Now, the mayor said, Judy that he needs help from the unions and his old Republican colleagues, Governor George Pataki and President George Bush. And without their help, he said that the doomsday budget would really be for real.

So, Judy, he said today -- we were hoping to have some of Mike Bloomberg's cuts there -- but he said that this disastrous budget is going to be his insurance policy. So it's like a backup plan, but he's preparing New Yorkers for the worst -- Judy.

WOODRUFF: So, bottom line, Maria, what are New Yorkers literally going to have to confront in the months to come?

HINOJOSA: Well, like I said, some of the most important things for New Yorkers: the loss of police officers, the loss of fire houses, the after-school programs. A big deal is being made about the zoos, the Queens Zoo and the Brooklyn Zoo.

But the people who we spoke to just said that they are feeling the crunch here and preparing for what they are going to deal in their own lives. For a lot of parents, it's going to be a problem. Not only after-school programs will be cut, but also summer school programs. So the children and the education that Mayor Bloomberg said he was going to try to protect here in the city might be the first thing on the chopping block -- Judy.

WOODRUFF: Very tough economic times.

All right, Maria Hinojosa in New York City, thanks very much. And thanks for hanging in there, even though we couldn't get that sound bite of the mayor. We'll get it right the next time.

Well, President Bush, when he was talking today, used the occasion of tax day -- we all know that's what April 15 is -- to begin his push for Congress to approve his tax cut plan. The president is now saying that cuts of at least $550 billion over 10 years would spark the creation of 1.4 million new jobs.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The American people need that relief right away. If tax cuts are good enough for the American taxpayers three or five or seven years from now, they are even better today.

(APPLAUSE)

BUSH: Instead of lowering taxes little by little, the Congress should do it all at once and give our economy the boost it needs.

(END VIDEO CLIP)

WOODRUFF: We all know that, 12 years ago, economic woes probably helped cost the first George Bush the presidency after just one term in office. And given the current state of the American economy, the question on many people's minds: Can his son avoid the same fate?

Well, joining me to talk about the possibilities: "USA Today" columnist Judy Keen.

Judy Keen, thank you very much for joining us.

JUDY KEEN, "USA TODAY": Nice to be here, Judy.

WOODRUFF: Thank you.

How much political capital -- you talk to people in the White House all the time -- how much political capital do they think they have coming off this successfully waged war in Iraq to turn their attention to domestic issues?

KEEN: Quite a lot, Judy, but they sure want to take advantage of it right away. As you noted, the state of the economy is their greatest concern and they think the possible greatest obstacle to the president's reelection. He's going to be spending a lot of time in the coming weeks talking about it.

WOODRUFF: Now, you write in "USA Today" this day that the White House is already organized, gearing up for the 2004 campaign. You talk about daily strategy meetings, White House aides, Republican National Committee aides. Just how far along are they?

KEEN: They are pretty far long. As one person described it to me, they have a pre-existing organization that they can start pretty much at a moment's notice. The fund-raising apparatuses in place. They're just waiting for the go-ahead. We think that that will come probably in June. And as for volunteers to even get out the votes on Election Day, even though that's more than 18 month away, some state Republican Party organizations are already organizing that.

WOODRUFF: And, Judy Keen, who is running all this from the White House? We assume Karl Rove is deeply involved. Who else?

KEEN: Yes, he, of course, is overseeing the operation, as is the White House political director, Ken Mehlman, a little-known name to most of you viewers, probably. But, pretty soon, he's going to leave the White House and go run the Bush reelection campaign.

WOODRUFF: Ken Mehlman?

KEEN: That's correct.

WOODRUFF: And what about fund-raising? We know that, the last go-round in 2000, George W. Bush campaigned, raised something like $200 million -- or -- I'm sorry -- $100 million. What are they talking about this time?

KEEN: Well, that's right. It was $101 million in 2000, which was a record. They intend to double that for the next campaign, which makes sense, if you think about it, because, under the new campaign finance laws, the amount that individuals can give to a campaign has also doubled from $1,000 to $2,000 per election cycle. WOODRUFF: What are they going to spend the money on? Presumably, they are not going to have any primary opposition in the Republican Party. Is that -- that money is for television advertising and what else?

KEEN: I think so. They certainly don't expect that the president will be challenged for the nomination by anyone in his own party. But with all these Democrats out there -- and pretty soon, they're assuming that the public's attention will turn to this campaign -- they want to be able to counter those messages and do it in an aggressive way all over the country.

WOODRUFF: Any sense of which Democrat they are most worried about?

KEEN: Some officials have told me in the past that they were most concerned about Senator Edwards of North Carolina, primarily because he represents a fresh face.

But they also are greatly concerned about Senator Joe Lieberman, who, as Vice President Gore's running mate in the 2000 election, became a household name as well. They are running scared when it comes to anybody.

WOODRUFF: All right, Judy Keen with "USA Today," writing a big story in today's newspaper about the White House already gearing up for the 2004 reelection -- Judy Keen, thanks very much. Good to see you.

KEEN: Thank, Judy.

WOODRUFF: We appreciate it.

To a related story: CNN has learned that Michigan Democrats are preparing to back down from their threat to hold their presidential caucuses next year on the same day as New Hampshire's traditional first-in-the-nation primary. According to national and state Democratic officials, the state party is said to be close to finalizing an agreement with the Democratic National Committee that would put Michigan's caucuses on Saturday, February 7.

Now, that is almost two weeks after the New Hampshire primary, which is expected to fall January 27. Under the proposed compromise, the Democratic National Committee would either establish a commission to reexamine the first-in-the-nation status of Iowa and New Hampshire, or it would address the issue in the 2004 Democratic National Convention in Boston. In other words, stay tuned.

Well, with the success in Iraq a foregone conclusion, can the United States begin to relax? When we return: The Department of Homeland Security may be ready to change the colors once again.

Stay with us.

(COMMERCIAL BREAK) WOODRUFF: On February 7, Attorney General John Ashcroft announced that the threat level had been heightened from the yellow, elevated level, to orange, for high. Well, now, more than two months later, regime change in Iraq is, for all intents and purposes, over. And we learn the threat level may be close to a change as well.

Justice correspondent Kelli Arena explains.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): With the outbreak of war came a series of warnings and a rise in the nation's threat level. Would Saddam Hussein send Iraqi terrorists to retaliate? Would al Qaeda take advantage of the situation and once again attack on U.S. soil?

JOHN ASHCROFT, ATTORNEY GENERAL: There was intelligence that indicated that an elevated and escalated military presence by the United States and escalated activity in Iraq might occasion additional activity by terrorists.

ARENA: Obviously, there hasn't been an attack. The man in charge of homeland security offers this explanation.

TOM RIDGE, HOMELAND SECURITY SECRETARY: Being on alert, being aware, being empowered with this information we think is a deterrent factor.

ARENA: But it's hard to prove a negative. Counterterrorism officials concede, we may never know whether increased security thwarted a planned attack.

But there is other concrete evidence of success against al Qaeda: the capture of key operatives, most notably Khalid Shaikh Mohammed. And along with those operatives came nearly six million documents loaded with intelligence leads.

TERRANCE GAINER, U.S. CAPITOL POLICE CHIEF: We still know that the terrorists would like to take another bite of the Capitol or the White House, Washington in general.

ARENA: The most recent audiotape believed to be from Osama bin Laden urging suicide attacks underscores al Qaeda's resolve.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE (through translator): It's clear to everybody that America, this mighty aggressor, can be defeated, can be destroyed and can be humiliated.

(END AUDIO CLIP)

ARENA: What's more, as tensions in the Middle East escalate, there is growing concern about the Lebanon-based terrorist group Hezbollah. UNIDENTIFIED MALE: Next to al Qaeda, Hezbollah is the single most dangerous terrorist organization there is. Prior to 9/11, Hezbollah has more American blood on their hands than any other group.

ARENA (on camera): Many terror experts believe, the biggest threat at this time is to U.S. interests overseas. But they warn, this is more of an art than a science and say Americans should remain on guard. Unlike the war in Iraq, there is no end in sight to the war on terror.

Kelly Arena, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Just ahead: a CIA operative with a hidden camera, a road map for the elite troops who rescued Private 1st Class Jessica Lynch.

We'll have a report.

(COMMERCIAL BREAK)

WOODRUFF: American POW Jessica Lynch was suffering from multiple injuries when she was rescued by U.S. troops at a hospital in Nasiriyah. What we haven't known until now is that a CIA operative with a hidden camera played a major role in setting up the rescue.

Our Pentagon correspondent Barbara Starr has the story.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that, just hours before Private 1st Class Jessica Lynch was rescued by special forces, the CIA sent a trusted Iraqi operative already on the agency payroll into the hospital with a secret video camera provided by the Pentagon. His mission: to tape the buildings interiors, critical information for planning the daring raid, a rescue the team would then tape themselves as it unfolded.

In the 72 hours before the April 1 rescue, the U.S. intelligence community began to hear whispers of Jessica Lynch's location. At least two enemy prisoners of war offered some information indicating she had been at another location in Nasiriyah. But none of that could be verified. Then a local Iraqi man informed nearby Marines that Jessica Lynch was at the hospital. His information needed to be verified.

But the CIA and the military were already working frantically on a number of leads, all pointing to the hospital in Nasiriyah. The Defense Intelligence Agency obtained hospital blueprints for the commando team. It was then decided to risk sending in the Iraqi operative with a hidden video camera. The rescue team was actually a group of special forces formed to hunt and capture regime leaders. They were diverted to this mission.

It was Navy SEALs that went into the hospital, while Army Rangers provided outside security, and the Marines staged a diversion. At the same time, Air Force special forces were waiting outside to take Jessica Lynch to safety.

(on camera): The mission went off without a hitch. Indeed, by the time the special forces team got there, most Iraqi fighters had deserted the hospital. And the role of the CIA operative would remain hidden until now.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

WOODRUFF: After Jessica Lynch was rescued, she was flown to Germany for medical treatment.

When we return: Members of Congress visit the same hospital to raise the spirits of injured Americans.

(COMMERCIAL BREAK)

WOODRUFF: Seven American congressmen visited injured troops in Germany today, bringing a lot of treats from back home. The injured, who are at Landstuhl Medical Center, were given get-well card from Arkansas Elementary School children and 1,600 chocolate chip cookies from the state of Colorado. So far, 223 injured Americans have been treated at this hospital in Landstuhl since the start of the war in Iraq.

Well, that's it for this -- we hope they enjoyed the cookies.

That's it for this special edition of INSIDE POLITICS. I'm Judy Woodruff.

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