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CNN LOU DOBBS MONEYLINE
U.S. Forces Leave Saudi Arabia; Interview With James Lilley; Battle to Stop Spam E-Mails
Aired April 29, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: It's official, U.S. forces are leaving Saudi Arabia. The Pentagon today announced that nearly all U.S. forces in the Gulf kingdom will be withdrawn by the end of this summer.
Former Defense Secretary William Cohen will join us to tell us how U.S. forces around the world are being repositioned to deal with new global military threats, and certainly one of those threats is North Korea. I'll be talking about that with the former ambassador to South Korea, James Lilley.
Also tonight, the battle to stop spam e-mail. Congress may be ready, finally, to take action.
First we go to Arthel Neville at CNN Center for the latest headlines.
(NEWSBREAK)
DOBBS: Arthel, thank you very much. And good evening, everyone.
A dramatic change for the U.S. military in the Persian Gulf tonight. Nearly all of the 5,000 troops in Saudi Arabia will leave that country by the end of this summer. Defense Secretary Donald Rumsfeld says those troops are being withdrawn because they are no longer needed for air patrols over Iraq.
Pentagon correspondent Barbara Starr reports from Saudi Arabia.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): For the Saudi ruling family, the end of Saddam Hussein's regime is already leading to changes in the kingdom's relationship with the United States. With the war over and the decades-old Iraqi threat gone, the air operations center at Prince Sultan Air Base began moving to Doha, Qatar, this week. All Gulf air operations will now be coordinated from that country.
Most U.S. military aircraft will likely be out of Saudi Arabia by summer's end. Some minimal U.S. air presence may be maintained, and there will be more emphasis on military training and exercises with Saudi Arabia.
Saudi defense minister, Prince Sultan, for whom the sprawling air base is named, and Defense Secretary Donald Rumsfeld held a rare joint news conference in Riyadh. They said the new arrangement was a mutual decision.
PRINCE SULTAN, SAUDI DEFENSE MINISTER (through translator): The cooperation between the two countries is going on, even before the end of the operation. And it will continue even after an end of the war.
STARR: Removal of all U.S. troops from Saudi Arabia, home to some of Islam's holiest shrines, has long been the goal of al Qaeda. Osama bin Laden made it the centerpiece of his campaign against the west. Al Qaeda extensively recruited Saudis and launched several attacks against U.S. forces in the region.
But the removal of some U.S. forces doesn't necessarily mean an end to political problems for the kingdom. Saudi Arabia may soon have a democratic Iraq on its border, adding to the pressure for the royal family to consider economic and political reforms. Already, Saudi Arabia is planning to join the World Trade Organization, a move that would shed more public light on its economic policies.
(on camera): The U.S. says there will be a continuing military relationship with Saudi Arabia, if for no other reason than Iran and Syria continue to pose a threat.
Barbara Starr, CNN, Saudi Arabia.
(END VIDEOTAPE)
DOBBS: Central Command tonight defended U.S. troops who opened fire on Iraqi gunmen hiding in a crowd of protesters. Central Command said those soldiers returned fire in self-defense.
The incident took place in the town of Fallujah, about 30 miles from Baghdad. Witnesses and the Red Cross said at least 15 Iraqis were killed, more than 50 were wounded.
That confrontation started when more than 200 Iraqis gathered outside a school used as a base by members of the 82nd Airborne Division. Soldiers said the crowd included 25 armed civilians.
The commander of U.S. forces in Baghdad today said his priority is to maintain security. Major General Buford Blount, commander of the 3rd Infantry Division, said 20,000 troops are in Baghdad already, as many as 4,000 more are on the way.
Jim Clancy has the report from Baghdad.
(BEGIN VIDEOTAPE)
JIM CLANCY, CNN CORRESPONDENT (voice over): Two supporters of the self-declared mayor were wrestled to the ground and put in handcuffs during a demonstration outside U.S. military headquarters. They may join Baghdad's would-be mayor behind bars.
MAJOR GENERAL BUFORD BLOUNT, 3rd INFANTRY DIVISION: Without any authority, no one had elected him in anything. There had been no meetings to choose him to be the mayor. He was taking possession of property that was not his in the name of the government. So, basically, he was stealing.
CLANCY: Just a week ago, Mohammed Zubaydi was holding court in the presidential suite of what used to be the Sheraton Hotel. The U.S. military says, and hotel managers confirm, he didn't pay the bill and had to go. Out on the streets, his promises of fat paychecks are losing credibility as well.
UNIDENTIFIED MALE (through translator): I've been coming here daily, and they deceive me. They say come tomorrow, and we'll give you $20 or buy a form and we'll give you a job in a ministry. It's been 10 days like this, and it's all lies.
CLANCY: Others gathered outside the self-declared mayor's headquarters said he was appointing former Ba'ath Party thugs to run the ministries. A high-level source at the Iraqi National Congress says Zubaydi worked for them running an intelligence network during years past, but they were as surprised as anyone when he declared himself mayor of Baghdad.
U.S. promises of an emergency one-time payment to police did come through on Tuesday with officers each collecting $20.
Looters continue to prey on Baghdad's civilians, and the lack of security is at the top of the agenda for the 3rd Infantry Division's commander.
BLOUNT: We're protecting about 150 sites in the city from power stations, water treatment stations, to banks, schools, facilities that are important to the function of the city.
CLANCY (on camera): General Blount says his forces, now 20,000 strong, are in control of all sectors of the capital city. The U.S. military says it's sending 3,000, 4,000 more, including military policemen, in the coming week or 10 days. That will be welcome news here.
Jim Clancy, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: Coalition forces in Iraq have captured a member of a terrorist group with links to al Qaeda. Sources tell our national security correspondent, David Ensor, that the terrorist is a member of a group operating in the west of Baghdad. That group is led by Abu Musab Zarqawi. U.S. officials believe Zarqawi planned the assassination of U.S. diplomat, Lawrence Foley, in Jordan last October.
Coalition forces also said Saddam Hussein's former oil minister has surrendered. He was an expert on Iraq's missile systems as well. The former minister, the six of spades in the deck of cards showing the most wanted members of the Saddam Hussein regime.
He is married to the Iraqi microbiologist known as Dr. Germ. She was in charge of the Iraqi facility that weaponized anthrax.
The former governor of Basra province also surrendered to coalition forces today. He was the eight of clubs.
Four European countries that tried to block the United States from pursuing a war against Saddam Hussein today agreed to make their armed forces less dependent on the United States and, for that matter, upon NATO. Belgium, France, Germany and Luxembourg will set up a new European military headquarters by next year. Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNNfn CORRESPONDENT (voice over): France, Germany, Belgium and Luxembourg want a mini-me version of a defense alliance, their own defense pact that would exist outside of NATO, drawing howls of protest from NATO member countries.
TONY BLAIR, BRITISH PRIME MINISTER: We won't accept, and neither will the rest of Europe accept anything that either undermines NATO or conflicts with the basic principles of European defense that we've set out.
PILGRIM: The grand old NATO alliance includes 19 countries with seven more to join next year. The proposed breakaway defense pact would include only France, Germany, Belgium and Luxembourg.
Cracks in NATO have already shown up recently. Member countries could not agree to defend Turkey during the war in Iraq. Today, Secretary of State Colin Powell put the blame squarely on France.
COLIN POWELL, SECRETARY OF STATE: But they did not follow through on their obligation in order to press their own agendas on Iraq. Make no mistake, and I make no mistake about it, the disagreement was serious, and our delay in responding to Turkey's request damaged the credibility of our alliance.
PILGRIM: The dream of a separate force from NATO is implausible and expensive, according to some military analysts. The average age of a Belgian soldier is 40, compared to 28 in the U.S. and 29 in the U.K. In Europe equipment is especially poor and low-tech, and military funding is declining all through Europe.
The United States, the behemoth of NATO, is beginning to become more calculating in terms of its support of certain countries. With 117,000 troops in Europe, 80,000 in Germany, one option being considered is shifting bases from Germany, which did not support the U.S. position on Iraq, to other countries for their support.
(END VIDEOTAPE)
PILGRIM: With an economic slump in Europe, military budgets were the first things that were raided. Now military analysts say it's doubtful that, aside from a new command structure, there would be the funding for much else -- Lou.
DOBBS: It gets more and more interesting. Kitty, thank you very much. Kitty Pilgrim.
Well, turning to developments in business news, amid the thousands of pages of documents released in yesterday's historic Wall Street settlement, many e-mails revealed the deep conflict of interest between research and investment banking on Wall Street.
At Goldman Sachs, the head of U.S. Telecom research e-mailed a colleague this -- quote, "It's ridiculous. I've already met with bankers and plan to move most of the companies to market outperform from the recommended list. Would have loved to cut ratings long ago. Unfortunately we can't cut AT&T, because we're essentially restricted there."
A memo from Lehman read, quote, "The analyst is the key driver of the firm's relationship with its corporate client base."
At Citigroup's Salomon Smith Barney, a senior executive described in a handwritten note, "There is a basic inherent conflict between investment banking, equities and retail. Do institutions really care? Retail does and is growing." He described the ratings in the United States as, quote, "ridiculous on its face."
One new revelation from these documents disclosed yesterday, a number of firms actually paid their competitors for positive research on their clients. Morgan Stanley paid $2.7 million, in fact, for, quote, "research guarantees" to 25 other firms.
JP Morgan paid $1.3 million.
Bear Stearns paid more than $100,000 to another firm.
Merrill lynch, Salomon Smith Barney, Credit Suisse, all accused of issuing fraudulent research. The documents released yesterday could lead to even more shareholder lawsuits and to additional civil and criminal charges against individuals.
When we continue, former defense secretary William Cohen joins me with his thoughts about a U.S. military role in the new Middle East and about a role for Luxembourg in protecting Europe.
Also tonight, clearing the way for the long-awaited road map to peace in the Middle East. The Palestinians put their first prime minister in place. Kelly Wallace will report from Ramallah in the West Bank.
Then the latest on the SARS virus epidemic, including a change in the travel ban to a major city in North America. Bill Tucker will have the story.
And the war on spam has made its way to Capitol Hill. We'll tell you what Congress may do to keep junk mail out of your inbox.
That and a great deal more still ahead. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The nuclear standoff on the Korean peninsula continues tonight. Thirty-seven thousand U.S. troops are in harm's way there. Today the United States announced it is pulling its military forces out of Saudi Arabia.
Joining me now on these topics and others, former defense secretary and our regular contributor, Bill Cohen. Bill, good to have you here.
WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: Good to be here, Lou.
DOBBS: Let's start with the peninsula. Should those 37,000 troops be pulled away from that border, where they are definitively in harm's way should there be an escalation of tensions in military conflict?
COHEN: Well, if you pull them away, you say how far away. They will always be within the line of fire, so to speak, as long as they have a presence on the Korean peninsula.
So, if you're going to -- if they're going to be there, they can be repositioned somewhat in order to perhaps be some sort of a deescalation move, perhaps, but pulling them out, that's one thing. Leaving -- trying to reposition them, I think from a strategic point of view doesn't make much sense.
DOBBS: Donald Rumsfeld has said that he would be willing to do so. Let me ask you this. You served as defense secretary. Those troops and certainly South Korean troops, indeed the city of Seoul itself, all could be obliterated.
COHEN: Right.
DOBBS: Quite simply, straightforwardly, why leave them there?
COHEN: Why did we have troops in Germany for so many years when the Soviet Union could have obliterated them? If we were to pull our troops out unilaterally, that would send a signal perhaps to Japan, and Japan would then have to ask why should we have our troops in Okinawa?
You would then create a power vacuum in which either China, Japan, perhaps India, or others would seek to move into that kind of a vacuum. So, I think we have to take that into account as we see what is the strategic goal.
If to pull our troops out so they won't be vulnerable to an attack, then what is the consequence? Are we then planning a military operation on our own, leaving all of the South Koreans to fend for themselves?
So, before taking such a move, I think we have to think of all the potential consequences.
DOBBS: One of the consequences is leaving them there. They're within the range of simple artillery.
COHEN: As they have been. DOBBS: As they have been for 50 years, but situations have changed now. In Europe, our troops were not concentrated where they could be hit by simple artillery. Certainly, they're within range of missiles and tactical weaponry.
COHEN: They were within range of anything the Soviet Union would seek to unload on them, yes.
DOBBS: So, as we look at this, what do we do?
COHEN: What we do is we continue to see if there's any real possibility for diplomacy. That dance of diplomacy can continue for a bit longer to see whether or not they're serious about wanting to give up their nuclear weapons.
If not, that presents another challenge to the United States in terms of where we go in terms of menu of options we have all the way from economic to political to military.
DOBBS: Is it fair, Bill, to say that Donald Rumsfeld has transformed the U.S. military and the Defense Department thinking to the point that, my God, why would we give up 37,000 young Americans' lives simply to avoid a power vacuum when we have stealth fighters, we have strategic and tactical missile systems that could be brought to bear without risking American lives?
COHEN: But the question becomes what do we do about our role throughout the Asia Pacific region? If we pull the 37,000 out because we fear that they might be within artillery range, what signal does that send to the Japanese? What signal does it send to any other country where we also deploy troops?
DOBBS: I understand signals...
COHEN: So, we have to worry about that.
DOBBS: ... but this is becoming a somewhat less nuanced world. We're talking about...
COHEN: There are still nuances.
DOBBS: Oh, there -- I said less nuances. I didn't eliminate them altogether, Bill. But the fact is why -- it just seems to me a very difficult decision to reach, to leave 37,000 U.S. servicemen there.
COHEN: Well, we're about to have thousands of troops still remaining in the Persian Gulf region. They may be at risk from attack by another country. Perhaps that risk is less today than it was yesterday.
What I'm saying is we're always at risk. We're at risk right here in the United States from different types of attacks.
DOBBS: No, I'm not talking about risks but I'm talking about absolutely within artillery range, devastating power arrayed against them.
Let's turn to another subject, as well, and that is moving forces in the Middle East from Saudi Arabia to Qatar. A remarkable, bold move.
COHEN: Two things. Number one, it certainly serves the interests of the Saudis to have the United States remove its forces. But a lot of internal objection to the U.S. presence over the years since the 1991 war. The reason for them being there has now been eliminated, as well, the threat coming from Saddam Hussein.
DOBBS: Right.
COHEN: But secondly, I think it also sends a signal that we no longer will be restricted by any restriction put on by the Saudis as far as the use of air force.
And the third thing it does, it now opens the Saudis even to more criticism from the critics within the administration to the band of Wahhabism that has been preached by Saudi Arabia over the years and the calls for reform within Saudi Arabia itself.
DOBBS: A necessary reorientation of our forces within that region to further demonstrate the Bush administration's, the U.S. government's commitment, to democracy in the region.
COHEN: It is to demonstrate that we want to reposition our forces where they're wanted and where they won't face inhibitions and restrictions in the future and, yes, to still maintain a security presence in that region.
DOBBS: OK. Bill, thank you very much. Bill, I've got -- we have just received this word from Associated Press in Tel Aviv. There has been a massive explosion in Tel Aviv. A terrorist attack, according to police there. That is all we have at this moment. But again, a massive explosion in Tel Aviv. A terrorist attack, according to the Tel Aviv police. And we will bring you details on that as they become available.
When we continue here, the nuclear standoff with North Korea. One day after the North Koreans offered to scrap their nuclear weapons program, the White House responds in no uncertain terms. Former ambassador to South Korea and China James Lilley will join us.
And the Centers for Disease Control today offer words of warning for the United States when it comes to the SARS virus. Bill Tucker reports.
And Congress is preparing to wage war, maybe, against spam. We can only hope. Tim O'Brien reports from Washington on the battle plans.
Those stories and more still ahead. Please stay with us.
(COMMERCIAL BREAK) DOBBS: More now on the breaking news from Israel. A huge explosion rocked Tel Aviv tonight. Police say it is a terrorist attack.
Police say the explosion was on a seafront walkway in Tel Aviv. That walkway stretches several miles along the Tel Aviv beachfront. There have been a large number of casualties in this explosion.
Joining me now by telephone, Jerrold Kessel. Jerrold, what do you have?
JERROLD KESSEL, CNN CORRESPONDENT: Lou, the Israeli police confirming that it was an attack, they believe a suicide bomber at a cafe on this Tel Aviv seafront promenade. And it is a cafe very close to the U.S. embassy, which is on that same promenade right on the Tel Aviv beachfront. There are many, many casualties, according to the first reports from the medical relief services. It happened just a very short while ago. And although the Israeli relief services and rescue service there act very quickly -- they're very experienced, unfortunately, in these kind of incidents -- they're still evacuating the injured.
No reports yet of whether there are indeed fatalities, but there are a large number of people injured.
And the working assumption at this stage of the police is that it was a suicide bomber at this cafe. The time now is after 1:00 a.m., but Tel Aviv normally a very busy and humming place on the seafront, people gathering even late at night. And there would have been a lot of people around at this time of night -- Lou.
DOBBS: Jerrold, thank you for the update. Again, as Jerrold Kessel has reported, a large explosion, some describing it as a massive explosion, Jerrold saying many, many casualties. We will be bringing you details as soon as they are available on this explosion in Tel Aviv.
We want to turn now to our -- to another story. Tim O'Brien reporting from Washington on the nuisance, which seems all, I must say, absolutely trivial in the context of the reports we're getting tonight out of Israel.
Nonetheless, Tim O'Brien with a report on what is being done about spam from Washington.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNNfn CORRESPONDENT (voice over): Spam is a cheap way of getting a message across. In some cases, hundreds of thousands of messages can be sent for less than $100. But spam can clog the arteries of any e-mail system. And it could cost you U.S. businesses some $10 billion in lost productivity this year, according to a recent study.
Average e-mail users get about three spam messages a day. In New York City alone, that adds up to more than eight million junk e-mails every day.
SEN. CHARLES SCHUMER (D), NEW YORK: The bottom line is that e- mail spam is growing like topsy. It grows by geometric proportion. And if we don't do anything about it, e-mail will be rendered useless within a few years.
O'BRIEN: Schumer is introducing legislation authorizing the Federal Trade Commission to create a no-spam registry, much like the do not call lists that have successfully deterred telemarketers. Anyone who wants to avoid spam would simply register on the FTC's Web site. Commercial e-mailers would be required to check the list and could face fines of up to $5,000 for sending commercial e-mail to those on it. Repeat offenders could get two years in jail.
The states are also getting involved. At AOL headquarters in Virginia today, a ceremonial signing of that state's tough new spam law. AOL, parent company of CNN, supports the legislation, as do other Internet service providers.
It's gotten so bad that even the direct marketing industry acknowledges Congress needs to act.
BOB WIENTZEN, PRESIDENT AND CEO, DIRECT MARKETING ASSOCIATION: Up to this point we've felt that self-regulation would work. Unfortunately, the bad guys have been ruling the roost, and they pretty much have ignored self-regulation. So, we think federal legislation is probably going to be necessary.
(END VIDEOTAPE)
O'BRIEN: The Direct Marketing Association supports legislation, but says Schumer's proposal goes too far. Some consumer groups complain it doesn't go far enough, that the only really effective remedy would be an absolute ban on all unsolicited commercial e-mail.
Lou, lawmakers are not ready to go that far, believing that would violate free speech.
DOBBS: Thank you, Tim.
Tonight we bring you a new feature, the MONEYLINE "Thought of the Day." We begin on the topic of private enterprise. The quote, "Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a handful see it for what it really is, the strong horse that pulls the whole cart." That thought from a man who knew quite a bit about enterprise, government, politics and, of course, war, British Prime Minister Winston Churchill.
Now the final results of last night's MONEYLINE poll question. Should we do MONEYLINE polls? A whopping 73 percent of you said always, 13 percent of you said sometimes, 14 percent of you said never. We are nothing if not democratic and market sensitive, and we deliver precisely what you demand.
Tonight it's a request, a new MONEYLINE poll question. Consumer confidence rose dramatically this month. Our question for you tonight, compared to six months ago, is your confidence overall higher, the same, perhaps lower?
Cast your vote at cnn.com/moneyline. We'll have the preliminary results later in the broadcast.
Coming up next, we'll have the latest developments on that explosion in Tel Aviv tonight. Jerrold Kessel reporting.
Kelly Wallace will have a special report on the first Palestinian prime minister and what could come next in what has been a frustrating, delayed, and seemingly perpetual peace process.
Also tonight, the United States tells North Korea no on its proposals to end the nuclear crisis on the peninsula. We'll have that story.
We'll also be joined by former ambassador to South Korea and China, James Lilley.
And Erin Brockovich goes to Beverly Hills. She's to investigate disturbing findings at a well-known high school. We'll have that story and a great deal more for you still ahead here. Please stay with us.
(COMMERCIAL BREAK)
(NEWSBREAK)
DOBBS: A huge explosion, as we've reported, rocked the Tel Aviv beach front tonight. First reports say there are 15 casualties. First reports, again, that three of them are serious.
Israeli police say a suicide bomber carried out this attack. He blew himself up at a cafe which is near the U.S. Embassy. That attack came only hours after the Palestinian Authority approved a new prime minister.
And Abu Mazen is -- has been confirmed as the first Palestinian prime minister. That election paves the way for the United States' much-anticipated road map to peace in the Middle East.
Kelly Wallace has the report from Ramallah in the West Bank.
(BEGIN VIDEOTAPE)
KELLY WALLACE, CNN CORRESPONDENT: Palestinians are hailing this as a critical and an historic day. This all coming after the Palestinian parliament approved Abu Mazen as the new prime minister and his 24-member Cabinet.
Abu Mazen is someone who has long said that the armed struggle against the Israelis has not helped the Palestinian cause, and, in his first major address, he said he rejects terrorism in all its forms. He called for a political solution with the Israelis, and he also said a major goal of his will be ensuring that weapons are only held by those who are focusing on Palestinian security.
But Abu Mazen faces a number of challenges. Number one, how much power will Palestinian President Yasser Arafat try to assert behind the scenes?
And, number two, will he be able to stand up to the radical Palestinian groups responsible for attacks against Israelis, groups who are saying they will not disarm until Israeli occupation comes to an end?
So far, the Israeli response has been a bit cautious. The foreign minister of Israel, Silvan Shalom saying Abu Mazen's speech represents, quote, "a great start." However, he says, the Israelis will judge Abu Mazen's actions. The Israelis saying, if he fights terrorism and stops incitement, then the Palestinians will find in Israel a, quote, "true partner for peace."
I'm Kelly Wallace reporting. Back to you.
(END VIDEOTAPE)
DOBBS: The White House says the road map to Middle East peace is likely to be published soon. President Bush will then make a public statement. He will urge Israel and the Palestinians to seize a moment of hope and optimism.
Senior White House correspondent John King has the story for us -- John.
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: And, Lou, this suicide bombing a reflection of the challenges -- the severe challenge facing not only the new Palestinian prime minister, Abu Mazen, who must improve security to get the Israelis back to the bargaining table, but also a reflection of the challenges now on the Bush White House.
This president has committed to following through on the road map. The lead will be taken in the days ahead by his secretary of state, Colin Powell, who was here at the White House today. Both Secretary Powell and President Bush will deliver public statements urging the Israelis and the Palestinians to go forward, once the formal road map document is delivered to the two parties. That delivery could come as early as tomorrow. Most here at the White House think it will slip until Thursday.
Now the document has been published -- has been in -- has been printed since December. It has not been published until Mr. Bush said the Palestinians had a new prime minister, and Yasser Arafat was pushed to the sidelines.
In testimony earlier today on Capitol Hill, Secretary Powell saying the Palestinians now have a leader committed to peace. Secretary Powell says Abu Mazen has the authority to get a peace deal done, and now he must exercise it.
(BEGIN VIDEO CLIP) COLIN POWELL, SECRETARY OF STATE: I hope he'll use that leadership. We've made it absolutely clear that, when the road map is released, performance is what counts, not the particular language of a particular paragraph. It's performance. And I hope that the new prime minister will speak out immediately and clearly about terrorism and about violence.
(END VIDEO CLIP)
KING: Now the road map calls on both the Palestinians and the Israelis to take immediate steps. One of those immediate steps, burdens, you might say, on the Palestinians, is to improve and reform their security forces. This suicide bombing tonight only to intensify the focus on that first step required of the Palestinians.
And, Lou, the document will be delivered within the next 48 hours. Then Secretary of State Powell will go both to Israel and the West Bank to make his case to get the two parties back together. That trip by Secretary Powell next week.
And, when Secretary Powell visits the region, he will carry with him something never extended to Yasser Arafat, an invitation for this new Palestinian Prime Minister Abu Mazen to come here and visit the president at the White House.
DOBBS: John, responding to Secretary Powell, the United States government's wishes, Abu Mazen today said in his acceptance speech, quote, "We reject terrorism by any party in all its forms," and then we have the explosion tonight in Tel Aviv. What is the likely impact? What will the White House expect of Abu Mazen on this issue?
KING: Well, Lou, they certainly will not blame him for violence on day one, and, for that matter, they will not blame him for violence on day two or three, if they see him taking the steps that they believe are necessary, including significant reforms in the structure, in the organization, in the leadership of the Palestinian security forces, a significant crackdown on Hamas and the leaders of those groups, some of whom are Abu Mazen's friends from his childhood days.
They say Abu Mazen, in both private conversations and in his public speeches, is saying the right things, is voicing his commitment to get those things done. The question is does he have -- he has on paper the political authority to do this. Does he in reality have the political authority to do this? And, if he cracks down and if along the way he makes an enemy, more of a strained relationship with Yasser Arafat, how will Yasser Arafat react?
Those are the questions that will be answered in the days ahead and, of course, as we note tonight, immediately after his answering in, a key test.
DOBBS: John, thank you very much.
John King, our senior White House correspondent.
World health officials today lifted the ban on travel to Toronto. The World Health Organization cited the lack of any new cases of SARS in Toronto since the 9th of April.
In this country, the Centers for Disease Control warned a Senate panel the danger from SARS, however, still exists.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNNfn CORRESPONDENT (voice-over): The message from the Centers for Disease Control is simple and direct.
DR. JAMES HUGHES, NATIONAL CENTER FOR INFECTIOUS DISEASES: We cannot say that we've dodged this. We most definitely are not out of the woods. We must maintain vigilance.
TUCKER: A fact that doesn't seem to have escaped Americans. Nearly half of us, 43 percent, are worried that they or a family member will become a victim of SARS, according to a recent CNN/"USA Today" poll. The CDC calls that an overreaction, but people are frightened. And the head of the CDC assured a Senate hearing that the center is vigilant.
DR. JULIE GERBERDING, CENTERS FOR DISEASE CONTROL: This is the best we can do right now, and we will make every use of these tools. And, if the problem evolves in this country, we're prepared to take additional steps to focus on containment.
TUCKER: A new survey by the Harvard School for Public Health says many Americans are comfortable with the idea of quarantine, believing it's necessary to contain the disease. And 94 percent of those surveyed would agree to be isolated for two to three weeks in a health-care facility if they had SARS, some of that willingness perhaps fueled by an important misconception.
ROBERT BLENDON, HARVARD SCHOOL OF PUBLIC HEALTH: In our survey, 40 percent of Americans thought that more than a quarter of people who would get SARS would die, and that really is not accurate. It just shows that, when they see reports from China, they just are alarmed by the size of it.
TUCKER: The progress of SARS seems to have slowed. The World Health Organization declaring the virus contained in Vietnam. But South Korea and New Zealand reported their first cases on Tuesday. And the travel advisories to Hong Kong and China remain in effect.
(END VIDEOTAPE)
TUCKER: Globally, there are more than 5,400 probable cases of SARS. The death rate: 353 reported deaths. The mortality rate: almost 6-1/2 percent -- Lou.
DOBBS: Bill, thank you very much.
Bill Tucker.
A reminder now to vote in our poll tonight. The question: Consumer confidence rose dramatically this month. Compared to six months ago, is your confidence overall higher, the same, or lower? Cast your vote, please, at cnn.com/moneyline. We'll have the preliminary results coming up for you later in the broadcast.
Still ahead, the latest on the Tel Aviv bomb explosion. At least 15 casualties. Three of the victims, we are told by Tel Aviv police, in critical condition. We'll bring you the latest developments as soon as they come in.
Also, the former ambassador to South Korea and to China, James Lilley, joins me. We'll be talking about nuclear weapons, negotiations, and prospects of resolution on the Korean peninsula.
Then, a special report on the future of the space program. NASA's top administrator hopes to return the shuttle to space sooner than expected. And the crew of the International Space Station is preparing for a shift change. We'll have their story coming up.
(COMMERCIAL BREAK)
DOBBS: As we've reported, a huge explosion rocked the Tel Aviv beach front tonight. We have just received in from Tel Aviv the first pictures of the aftermath of this explosion. Tel Aviv police saying that it is definitively a suicide bomber . As, again, I said, these are the first pictures to come in from Tel Aviv.
Fifteen casualties. Tel Aviv police tell us three of the casualties are in critical condition. We know that two of the victims have died. The suicide bomber dying in that explosion.
Now an Army radio report says an eyewitness saw a security guard at the restaurant.
And you see there Mike's Place. That is where the explosion took place, just outside that, a strip along the waterfront, as Jerrold Kessel reported, that is active even this late in the morning. It's almost 2:00 a.m. there now. Frequented by young people in Tel Aviv.
A security guard at that restaurant prevented the suicide bomber, we are told, from entering the restaurant. That explosion took place -- this area is, by the way, also very near the U.S. Embassy, and it comes just hours after Abu Mazen was sworn in as the first Palestinian prime minister. And he said in his acceptance speech that he rejects -- "We reject," he said, "terrorism by any party and in all its forms."
And, obviously, this a demonstration by the suicide bomber and elements within the Palestinians that -- certainly, Abu Mazen does not speak for all Palestinians, nor is that sentiment certainly shared. We will have more details for you throughout the evening here.
Turning now to the crisis in North Korea, the White House today rejected North Korea's offer to end its nuclear weapons program in exchange for economic benefits.
White House Spokesman Ari Fleischer said President Bush will not reward Pyongyang for bad behavior, as he put it, and Secretary of State Colin Powell told the Senate Foreign Relations Committee that the United States will certainly not be intimidated by North Korean claims and threats.
The president's top security advisers were scheduled to meet today on whether to continue those negotiations with Korea. Pyongyang, for its part, said further talks would be useless, if Washington continues to insist that North Korea drop its nuclear weapons program.
Talks between Pyongyang and South Korea did continue today. The countries issued a joint statement saying they have agreed to resolve the nuclear issue peacefully.
My next guest has served as ambassador to both South Korea and to China. James Lilley is now a senior fellow at the American Enterprise Institute and joins us from our studios in Washington, D.C.
Ambassador, good to have you here.
JAMES LILLEY, FORMER U.S. AMBASSADOR: Thanks, Lou.
DOBBS: The -- these statements by North Korea not surprising to many at this point. Is this leading somewhere positive, in your judgment?
LILLEY: Well, you know, after looking at 50 years of negotiating with these people, I think we can see certain patterns. Right now, they're going through their initial stage -- threats, manipulation, tantrums, rescinding statements, restating them, obscurity. This is the technique now. If you follow them and get jerked around by this, you're going to be chasing your tail.
What you have to do with the North Koreans is to set your principles and stick to them and devise a process for dealing with them. Our principles, I think, are quite clear.
No nuclear weapons on the peninsula. China, Russia, Japan, South Korea, all agree with us.
Number two, there is an absolute necessity for economic reform in this broken-down Stalinist system. We all agree on that.
Third, we agree that force should not be used. We say unless, of course, they start it or we have to interdict their ships carrying nuclear weapons or weapons of mass destruction out.
So we get together -- and the process is clearly multilateral. You have to get China, South Korea, Russia, Japan, ourselves in on this thing because it involves everybody. It is not an American problem. The economic leverage comes mainly from South Korea and China.
The weapons of mass destruction -- we can neutralize these, but they -- to bring them down you have to begin to exercise economic leverage, and I think that's what we have to work on. We call it alliance cohesion, and that's the most important thing we're doing right now.
DOBBS: And yet, Ambassador, it took a great deal of effort to bring the Chinese into the forefront of these negotiations. They even posed during these first talks as mediator rather than participant.
Yet China, does it not, holds the key? It provides most of the fuel, most of the food for the North Koreans to sustain themselves. This has become a U.S. problem because it is a participant in these negotiations.
Why in the world is this not a Chinese problem?
LILLEY: It is a Chinese problem, and they know it is, and they have participated. What China faces right now is a fork in the road.
For years and years, they've said a buffer zone in North Korea, our socialist state must continue, we're going to keep it going, and, number two, we're going to try to keep millions of refugees out of Manchuria. Ergo, they're going to sustain the North Korean regime.
Now the Chinese are finding out that the North Koreans are becoming an increasing liability, that they're forcing ballistic- missile defense, that they're forcing the proliferation of weapons of mass destruction to other areas in Asia. This is very bad news for the Chinese.
And I think their position on SARS can be instructive. After 50 years of denying cholera, typhus, AIDS, Tianamen massacre, they come and say -- they give you a relatively truthful appraisal of the situation, and they move ahead on it. This is the first challenge for the new leadership.
Now, if they look at the North Korean situation, I think they will see that this is becoming increasingly difficult for them and dangerous for them, and they've got to rethink their involvement. And I think they can see that economic leverage is the key, and the South Koreans see this more and more all the time.
DOBBS: We have about 30 seconds, Ambassador. What is your expectation, the resolution of this crisis?
LILLEY: It's a long, slow haul. We hold the best cards. We are going to prevail. But we've got to get our friends and allies together, ad that is the nightmare for the North Koreans. I think we'll prevail, and I think this will be peacefully resolved.
DOBBS: Ambassador James Lilley.
Thank you very much, sir.
LILLEY: My pleasure.
DOBBS: Tonight, we're adding a new feature to the broadcast, the quote of the day. Our first quote comes from the new Palestinian Prime Minister Abu Mazen. Abu Mazen pledged to crack down on radical Islamist terrorists. He also had words for Israel on the issue of cooperation. And, on this day in which two Israelis and at least 15 others have been injured in a suicide bombing in Tel Aviv, the quote seems apt.
As he said, "The choice is yours. It's either real peace without settlements or continuing occupation, suppression, hatred, and conflict."
When we come back, the Dow extends yesterday's rally. We'll have the market for you, and we'll share some of your thoughts, including reaction to that historic billion-dollar Wall Street settlement. Stay with us.
(COMMERCIAL BREAK)
DOBBS: As we reported, a huge explosion rocked Tel Aviv tonight, and we have more details coming in on that explosion, and they are not good.
We initially reported 15 people wounded in the explosion, two dying. We are now told by Tel Aviv police that there are literally dozens of casualties, dozens of people wounded. The bomber blew himself up at the entrance to a cafe on the beach front.
This area is very near the U.S. embassy, by the way. A witness told Israeli army radio that a security guard actually managed to prevent the suicide bomber from going inside that cafe where, obviously, as devastating as this attack is, it would have been far worse, and he managed to gain entrance to the cafe itself.
This attack came just hours after the Palestinian Authority approved a new prime minister, Abu Mazen, who has disavowed terrorism in all forms, and we will be bringing you more details on this suicide bombing, this explosion, in Tel Aviv throughout the evening here on CNN.
We want to turn our attention now to other developments during the day, and some of those developments positive. Consumer confidence, for example, literally soared in the month of April. That, together with a raft of stronger than expected corporate earnings reports, enough to encourage investors to send stock prices higher. The Dow Jones Industrials -- a second straight day of gains.
Christine Romans now with the story of what is an improving environment in the market.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Indeed, Lou, and the Dow above 8,500 at the close here today. Volume better than average. Two-thirds of the day's big-board volume at higher prices. The earnings helped DuPont's sales, jumping 16 percent in the quarter.
And you've heard about the war premium in defense stocks. Northrop Grumman revenue jumped 49 percent, and the company raised targets for the rest of the year, Lou. Starwood Hotels swung to a loss in the quarter, warned for the whole year. The stock still ended higher, though. Investors are betting consumer spending can only improve from here.
Dynegy shares soared 25 percent. It reported a profit for the first time in more than a year.
Overall, S&P 500 earnings up about 11 percent so far in the quarter. Revenue up 7-1/2 percent.
And, Lou, the past eight weeks have been pretty good for investors. The Dow is up more than 10 percent. NASDAQ up 12 percent. S&P 500 up almost 11 percent in just the past two months -- Lou.
DOBBS: Those sounded like double-digit gains.
ROMANS: They are. For now.
DOBBS: Christine, thank you very much.
When we come back, we'll share some of your thoughts. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Now the preliminary results of our poll question tonight. We asked, compared to six months ago, is your confidence overall higher, the same, or lower. Thirty-four percent of you said higher. Twenty percent said the same. Forty-seven percent lower.
And, of course, you'll be able to continue responding to this poll over the next 23 hours. We'll have the final results tomorrow evening on the broadcast.
A look at your e-mails now.
On the Wall Street settlement, the historic settlement, Robert Love of Minnesota wrote to say, "The settlement is a total fraud. When you look carefully at the totals levied against the firms. Compared to their earnings, it's a mere drop in the bucket. The $1.4 billion should be 10 to 20 times greater. No senior manager is going to do hard time."
And Frank Moore of Oklahoma wrote to say, "If we were to make playing cards of all the corporate crooks, there'd be enough for a bunch of casinos."
Shawn in Oregon wrote to say, "I'm a liberal and partisan Democrat. The first time I watched your show was an accident, but I consistently liked what I have seen and have become a regular viewer. Your coverage is fair, balanced. Appreciate it, even if it is a bit conservative. Keep up the good work."
Thank you. Even if it is a bit conservative.
One viewer wrote about this story from Abilene, Texas, and we thought it was worth sharing. A man there rescued four children from a burning building and was later arrested for violating probation. Authorities recognized him from the news coverage of the rescue.
In reaction, Rick Nickell of Virginia wrote to say, "I was told many years ago that our justice system is morally based on the teachings of the Bible. However, one portion of the Bible seems to have gone unnoticed: redemption. A prime example is the younger hero in Texas.
Not only should he be let go on his probation violation, but he should be pardoned for all his crimes and be given a new start in life with nothing hanging over his head. His act -- his heroic act shows that he will not squander it.
There should be a way to redeem yourself and clear your record after committing even a crime. This man has shown us all a way to do that."
And we think that's a thought definitely worth sharing.
Please send us your thoughts. loudobbs@cnn.com.
Thanks for being with us tonight. I am Lou Dobbs, hidden behind these glasses. We thank you for being with us. Good night from New York.
"LIVE FROM THE HEADLINES" with Paula Zahn begins right now.
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